VivoPower International PLC (Form: F-4, Received: 08/24/2016 17:33:03)

As filed with the Securities and Exchange Commission on August 24, 2016

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM F-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

VIVOPOWER INTERNATIONAL PLC

(Exact Name of Each Registrant as Specified in its Charter)


England	4931	N/A
(State or other jurisdiction of Incorporation or organization)	(Primary standard industrial classification code number)	(I.R.S. Employer Identification Number)

23 Hanover Square

Mayfair

London W1S 1JB, UK

+44 20 3714 8881

(Address, including zip code, and telephone number, including area code, of each registrant’s principal executive offices)

Philip Comberg

VivoPower International PLC

23 Hanover Square

Mayfair

London W1S 1JB, UK

+44 20 3714 8881

Law Debenture Corporate Services Inc.

400 Madison Avenue, 4th Floor

New York, NY 10017

Tel: (212) 750-6474

Fax: (212) 750-1361

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

David Alan Miller, Esq.
Jeffrey M. Gallant, Esq.
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Telephone: (212) 818-8800

Joel L. Rubinstein, Esq.
Winston & Strawn LLP

200 Park Avenue

New York, N ew Y ork 10166-4193

Telephone: ( 212 ) 294- 6700

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and all other conditions to the transactions contemplated by the Contribution Agreement described in the included proxy statement/prospectus have been satisfied or waived.

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

(Do not check if a smaller reporting company)

Smaller reporting company ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

CALCULATION OF REGISTRATION FEE

Title of each Class of Security being registered	Amount being Registered ⁽¹⁾		Proposed Maximum Offering Price Per Security ⁽²⁾		Proposed Maximum Aggregate Offering Price ⁽²⁾		Amount of Registration Fee
Ordinary shares ⁽³⁾		11,737,900	$	7.1952	$	84,456,000.00	$	8,504.72
Ordinary shares ⁽⁴⁾		439,450	$	2.5980	$	1,141,691.10	$	114.97
Total		12,177,350			$	85,597,691.10	$	8,619.69

(1)

All ordinary shares being registered are issued by VivoPower International PLC, a public limited company incorporated under the laws of England (“VivoPower”), in connection with the proposed business combination with Arowana Inc. (“ARWA”), a publicly-traded Cayman Islands exempted company, as described in the proxy statement/prospectus forming a part of this registration statement. As a result of the transactions described in the proxy statement/prospectus forming a part of this registration statement, VivoPower will become a publicly-traded company and ARWA is expected to dissolve and liquidate.

(2)

Determined in accordance with Rule 457.

(3)

Represents VivoPower ordinary shares to be issued to ARWA for distribution to ARWA shareholders and rights holders in connection with the Contribution Agreement as described in the proxy statement/prospectus forming a part of this registration statement.

(4)

Represents VivoPower ordinary shares to be issued to ARWA for distribution to ARWA warrantholders in connection with the warrant amendment as described in the proxy statement/prospectus forming a part of this registration statement.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

SUBJECT TO COMPLETION, DATED AUGUST 24 , 2016

AROWANA INC.
Level 11, 153 Walker Street

North Sydney, NSW 2060

Australia

Dear Arowana Inc. Shareholders and Warrantholders:

You are cordially invited to attend the extraordinary general meeting of shareholders and/or the extraordinary general meeting of warrantholders of Arowana Inc. (“ARWA”) at [●] a.m. eastern time and [●] a.m. eastern time, respectively, on [●], 2016, at the offices of Graubard Miller, ARWA’s counsel, at The Chrysler Building, 405 Lexington Avenue, 11 ^th Floor, New York, New York 10174.

At the extraordinary general meeting of shareholders, ARWA’s shareholders will be asked to consider and vote upon a proposal, which is referred to herein as the “Contribution Proposal,” to approve a Contribution Agreement, dated as of August 11, 2016, by and among ARWA, Arowana International Limited (“AWN”), a company listed on the Australian Securities Exchange and an affiliate of certain officers, directors and shareholders of ARWA, and VivoPower International PLC, a wholly owned subsidiary of AWN (“VivoPower”) (as may be amended, the “Contribution Agreement”). If the Contribution Proposal is approved and ARWA consummates the transactions contemplated by the Contribution Agreement, which we refer to collectively as the “Transactions,” ARWA will contribute to VivoPower the funds held in the trust account that holds the proceeds of its initial public offering, less certain transaction expenses, amounts used to pay ARWA public shareholders who properly exercise their conversion rights in connection with the vote to approve the Contribution Proposal and reserves for expenses of the liquidation and dissolution described below (the “Contribution Amount”), in exchange for ordinary shares of VivoPower. The contribution by ARWA of the Contribution Amount to VivoPower in exchange for VivoPower’s ordinary shares is referred to herein as the “Contribution.” As soon as reasonably practicable after the closing of the Transactions, ARWA will distribute the VivoPower ordinary shares received by it in exchange for the Contribution to the ARWA shareholders and (as a result of the warrant amendment described below) to the ARWA warrantholders. Thereafter, ARWA intends to dissolve and liquidate. A copy of the Contribution Agreement is attached as Annex A to the accompanying proxy statement/prospectus.

ARWA shareholders will also be asked to consider and vote upon a proposal to approve the voluntary winding up of ARWA, subject to and conditional upon the approval of the Contribution Proposal and the completion of the Transactions. We refer to this proposal as the “Dissolution Proposal.” In addition, ARWA shareholders will be asked to consider and vote upon a proposal to approve a discretionary management incentive plan, providing for the issuance of equity by VivoPower and VivoPower’s subsidiary, VivoPower International Services Limited (“MidCo”), to employees and directors of VivoPower and its subsidiaries. A copy of this incentive plan is attached as Annex B to the accompanying proxy statement/prospectus. We refer to this proposal as the “Incentive Plan Proposal.”

At the extraordinary general meeting of ARWA warrantholders, ARWA warrantholders will be asked to consider and vote on a proposal, which is referred to herein as the “Warrant Amendment Proposal,” to approve and consent to an amendment of the warrant agreement governing ARWA’s outstanding warrants, which is referred to herein as the “warrant amendment,” which provides that, upon consummation of the Transactions, each of ARWA’s outstanding warrants, which entitle the holder thereof to purchase one-half of one ordinary share of ARWA, will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower. A copy of the warrant amendment is attached as Annex C to the accompanying proxy statement/prospectus. Approval of the Warrant Amendment Proposal is a condition to the consummation of the Transactions.

We estimate that the ordinary shares of VivoPower distributed to ARWA shareholders and warrantholders as a result of the foregoing Contribution and warrant amendment will constitute between approximately 55.8% and 72.0% of the issued share capital of VivoPower following completion of the Transactions, depending on the number of shares converted by ARWA’s public shareholders pursuant to their conversion rights.

Each of these proposals is more fully described in the accompanying proxy statement/prospectus.

Under the Contribution Agreement, the closing of the Transactions is subject to a number of conditions, including that (i) ARWA shareholders approve the Contribution Proposal, (ii) holders of no more than 2,732,400 of ARWA’s public shares exercise their conversion rights and (iii) ARWA’s warrantholders approve the Warrant Amendment Proposal. If these conditions are not satisfied, then neither ARWA nor VivoPower will be required to consummate the Transactions.

ARWA’s units, ordinary shares, rights and warrants are currently listed on the Nasdaq Capital Market under the symbols “ARWAU,” “ARWA,” “ARWAR” and “ARWAW,” respectively. VivoPower intends to apply to list its ordinary shares on the Nasdaq Capital Market under the symbol “VVPR” in connection with the closing of the Transactions. We cannot assure you that VivoPower’s ordinary shares will be approved for listing on Nasdaq.

VivoPower is an “ emerging growth company ” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in VivoPower ’s securities involves a high degree of risk. See “ Risk Factors ” beginning on page [●] for a discussion of information that should be considered in connection with an investment in VivoPower ’s securities.

Pursuant to ARWA’s second amended and restated memorandum and articles of association, ARWA is providing its public shareholders with the opportunity to elect to have all or a portion of their ordinary shares of ARWA repurchased at a per-share repurchase price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the Transactions, including interest then held in the trust account, divided by the number of then outstanding ordinary shares that were sold as part of the units in ARWA’s initial public offering, which are referred to collectively as public shares, subject to the limitations described herein. For illustrative purposes, based on funds in the trust account of approximately $84.5 million on August 16, 2016 (after giving effect to the withdrawal by ARWA of all interest earned on the trust account for payment of its tax liabilities and for working capital), the estimated per share repurchase price would have been approximately $10.20. Public shareholders may elect to have their shares repurchased even if they vote for the Contribution Proposal. A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from exercising this repurchase right with respect to more than an aggregate of 20% of the public shares. Holders of ARWA’s outstanding warrants and rights do not have repurchase or redemption rights in connection with the Transactions. The holders of ARWA ordinary shares issued prior to its initial public offering, which are referred to as “insider shares,” have agreed to waive their repurchase rights with respect to their insider shares and any other shares they may hold in connection with the consummation of the Transactions, and the insider shares will be excluded from the pro rata calculation used to determine the per-share repurchase price.

References throughout this proxy statement/prospectus to conversions, demanding to convert, exercising conversion rights, conversion price, and similar, shall mean and take effect as repurchases, electing to repurchase, exercising repurchase rights, repurchase price, and similar, as described above. All such conversions shall take effect as repurchases as a matter of Cayman Islands law in accordance with the terms and procedures set out in ARWA’s second amended and restated articles of association.

ARWA is providing this proxy statement/prospectus and accompanying proxy card to its shareholders and warrantholders in connection with the solicitation of proxies to be voted at the extraordinary general meetings and at any adjournments or postponements of the extraordinary general meetings. Whether or not you plan to attend the applicable extraordinary general meeting(s), we urge you to carefully read this proxy statement/prospectus. Please pay particular attention to the section entitled “ Risk Factors , ” which begins on page 28.

ARWA ’s board of directors has unanimously approved the Contribution Agreement and Warrant Agreement Amendment and unanimously recommends that (i) its shareholders vote FOR all of the proposals presented to its shareholders and (ii) its warrantholders vote FOR all of the proposals presented to its warrantholders. When you consider the board recommendation of these proposals, you should keep in mind that ARWA ’s directors and officers have interests in the Transaction s that may conflict with your interests as a shareholder or warrantholder, as applicable. See the section entitled “ The Contribution Proposal — Interests of ARWA’s Directors and Officers in the Transactions . ”

Approval of the Contribution Proposal requires the affirmative vote of holders of a majority of the ordinary shares of ARWA voted at the extraordinary general meeting, either in person or by proxy. Approval of the Dissolution Proposal requires a special resolution under Cayman Islands law (being a resolution passed by a majority of at least two-thirds of members who, being entitled to do so, vote at the extraordinary general meeting). Approval of the Shareholder Adjournment Proposal, if presented, requires an ordinary resolution (being a resolution passed by a majority of members who, being entitled to do so, vote at the extraordinary general meeting). The boards of directors of ARWA and VivoPower have already approved the Contribution Agreement. The consummation of the Transactions also is subject to the approval of the AWN shareholders.

Approval of the Warrant Amendment Proposal at the extraordinary general meeting of warrantholders requires the approval of holders of a majority of the outstanding warrants. If the parties do not complete the Transactions, the warrant agreement will not be amended, even if warrantholders have previously approved the proposed amendment.

ARWA has no specified maximum conversion threshold under its second amended and restated memorandum and articles of association. It is a condition to closing under the Contribution Agreement, however, that holders of no more than 2,732,400 of the public shares exercise their conversion rights. If conversions by ARWA public shareholders cause ARWA to be unable to meet this closing condition, then VivoPower, AWN and ARWA will not be required to consummate the Transactions, although they may, in their discretion, agree to waive this condition. In no event, however, will ARWA convert public shares in an amount that would cause its net tangible assets to be less than $5,000,001 upon consummation of the Transactions.

ARWA’s initial shareholders, executive officers and directors have agreed to vote their insider shares and any other shares held by them in favor of the Contribution Proposal. They have also indicated they intend to vote their shares in favor of the Dissolution Proposal and the Incentive Plan Proposal and any warrants they hold in favor of the Warrant Amendment Proposal.

Your vote is very important. If you are a registered shareholder or warrantholder, please submit proxies to have your shares or warrants, as applicable, voted as soon as possible using one of the following methods to ensure that your vote is counted . R egardless of whether you expect to attend the applicable extraordinary general meeting(s) in person, complete, sign, date and submit the enclosed proxy card without delay . If you hold your shares or warrants in “ street name ” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares or warrants, as applicable, are represented and voted at the applicable extraordinary general meeting(s).

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the proposals presented at the extraordinary general meetings. With respect to the proposals for the extraordinary general meeting of shareholders, if you fail to return your proxy card or fail to submit your proxy by telephone or over the Internet, or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting of shareholders, and, if a quorum is present, will have no effect on the whether the proposals are approved. With respect to the proposals for the extraordinary general meeting of public warrantholders, if you fail to return your proxy card, or fail to instruct your bank, broker or other nominee how to vote, and do not attend the extraordinary general meeting in person, the effect will be that your warrants will have the same effect as a vote against the Warrant Amendment Proposal, but will have no effect on whether the Warrant Adjournment Proposal is approved. If you are a shareholder or warrantholder of record and you attend the applicable extraordinary general meeting(s) and wish to vote in person, you may withdraw your proxy and vote in person.

ARWA’s board of directors has fixed the close of business on [●], 2016, as the record date for the determination of shareholders and warrantholders entitled to notice of and to vote at the extraordinary general meeting of shareholders and the extraordinary general meeting of warrantholders, respectively, and at any adjournments or postponements thereof.

On behalf of the board of directors of ARWA, I thank you for your support and we look forward to the successful completion of the Transactions.

	Sincerely,


	Kevin T. Chin
	Chairman of the Board and Chief Executive Officer

[●], 2016

This proxy statement/prospectus is dated [●], 2016, and is first being mailed to shareholders and warrantholders of ARWA on or about [●], 2016.

AROWANA INC.
Level 11, 153 Walker Street

North Sydney, NSW 2060

Australia

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON [ ● ], 2016

TO THE SHAREHOLDERS OF AROWANA INC.:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of shareholders of Arowana Inc. (“ARWA”), a Cayman Islands exempted company, will be held at [●] a.m. eastern time, on [●], 2016, at the offices of Graubard Miller, ARWA’s counsel, at The Chrysler Building, 405 Lexington Avenue, 11 ^th Floor, New York, New York 10174. You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes:

(1)

to consider and vote upon a proposal to adopt the Contribution Agreement, dated as of August 11, 2016, by and among ARWA, Arowana International Limited (“AWN”), a company listed on the Australian Securities Exchange and an affiliate of certain officers, directors and shareholders of ARWA, and VivoPower International PLC, a wholly owned subsidiary of AWN (“VivoPower”) (as may be amended, the “Contribution Agreement”), which, among other things, provides for ARWA to contribute to VivoPower the funds held in the trust account that holds the proceeds of its initial public offering, less certain expenses, in exchange for ordinary shares of VivoPower, and to approve the business combination contemplated by such agreement – we refer to this proposal as the “Contribution Proposal”;

(2)

to consider and vote upon a proposal to approve the voluntary winding up of ARWA, subject to and conditional upon the approval of the Contribution Proposal and the completion of the Transactions — we refer to this proposal as the “Dissolution Proposal”;

(3)

to consider and vote upon a proposal to approve a discretionary management incentive plan, providing for the issuance of equity by VivoPower and MidCo, a wholly owned subsidiary of VivoPower, to employees and directors of VivoPower and its subsidiaries — we refer to this proposal as the “Incentive Plan Proposal”; and

(4)

to consider and vote upon a proposal to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, ARWA is not authorized to consummate the Transactions or the closing conditions under the Contribution Agreement are not met — we refer to this proposal as the “Shareholder Adjournment Proposal.”

These items of business are described in the attached proxy statement/prospectus, which we encourage you to read in its entirety before voting. Only holders of record of ARWA ordinary shares at the close of business on [●], 2016 are entitled to notice of the extraordinary general meeting and to vote and have their votes counted at the extraordinary general meeting and any adjournments or postponements of the extraordinary general meeting.

After careful consideration, ARWA’s board of directors has determined that the Contribution Proposal, the Dissolution Proposal, the Incentive Plan Proposal and the Shareholder Adjournment Proposal are fair to and in the best interests of ARWA and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” the Contribution Proposal, “FOR” the Dissolution Proposal, “FOR” the Incentive Plan Proposal and “FOR” the Shareholder Adjournment Proposal, if presented.

All ARWA shareholders are cordially invited to attend the extraordinary general meeting in person. To ensure your representation at the extraordinary general meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a shareholder of record of ARWA ordinary shares, you may also cast your vote in person at the extraordinary general meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the extraordinary meeting and vote in person, obtain a proxy from your broker or bank.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the extraordinary general meeting or not, please sign, date and return the enclosed proxy card as soon as possible. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

Thank you for your participation. We look forward to your continued support.

	By Order of the Board of Directors,


	Kevin T. Chin
	Chairman of the Board and Chief Executive Officer

[●], 2016

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS, AND YOU WILL NOT BE ELIGIBLE TO HAVE YOUR SHARES CONVERTED INTO CASH. TO EXERCISE YOUR CONVERSION RIGHTS, YOU MUST AFFIRMATIVELY VOTE EITHER FOR OR AGAINST THE CONTRIBUTION PROPOSAL AND DEMAND THAT ARWA CONVERT YOUR SHARES INTO CASH NO LATER THAN THE CLOSE OF THE VOTE ON THE CONTRIBUTION PROPOSAL BY TENDERING YOUR SHARES TO ARWA’S TRANSFER AGENT PRIOR TO THE VOTE AT THE MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE TRANSACTIONS ARE NOT COMPLETED, THEN THESE SHARES WILL NOT BE CONVERTED INTO CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR CONVERSION RIGHTS. SEE THE SECTION ENTITLED “ EXTRAORDINARY GENERAL MEETING OF ARWA SHAREHOLDERS AND EXTRAORDINARY GENERAL MEETING OF ARWA WARRANTHOLDERS — CONVERSION RIGHTS ” FOR MORE SPECIFIC INSTRUCTIONS.

This proxy statement/prospectus is dated [●], 2016 and is first being mailed to Arowana Inc. shareholders on or about [●], 2016.

AROWANA INC.
Level 11, 153 Walker Street

North Sydney, NSW 2060

Australia

NOTICE OF EXTRAORDINARY GENERAL MEETING OF WARRANTHOLDERS
TO BE HELD ON [ ● ], 2016

TO THE WARRANTHOLDERS OF AROWANA INC.:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of warrantholders of Arowana Inc. (“ARWA”), a Cayman Islands exempted company, will be held at [●] a.m. eastern time, on [●], 2016, at the offices of Graubard Miller, ARWA’s counsel, at The Chrysler Building, 405 Lexington Avenue, 11 ^th Floor, New York, New York 10174. You are cordially invited to attend the extraordinary general meeting, which will be held for the following purposes:

(1)

to consider and vote upon an amendment to the warrant agreement that governs all of ARWA’s warrants (the “warrant amendment”) to provide that, upon consummation of the transactions contemplated by the Contribution Agreement, dated as of August 11, 2016 (the “Contribution Agreement”), by and among ARWA, Arowana International Limited (“AWN”), a company listed on the Australian Securities Exchange and an affiliate of certain officers, directors and shareholders of ARWA, and VivoPower International PLC, a wholly owned subsidiary of AWN (“VivoPower”), each outstanding ARWA warrant will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower – we refer to this proposal as the “Warrant Amendment Proposal”; and

(2)

to consider and vote upon a proposal to adjourn the extraordinary general meeting of public warrantholders to a later date or dates, if necessary or desirable, to permit further solicitation and vote of proxies, in the event that there are not sufficient votes to approve the Warrant Amendment Proposal — we refer to this proposal as the “Warrantholder Adjournment Proposal”.

These items of business are described in the attached proxy statement/prospectus, which we encourage you to read in its entirety before voting. Only holders of record of ARWA warrants at the close of business on [●], 2016 are entitled to notice of the extraordinary general meeting and to vote and have their votes counted at the extraordinary general meeting and any adjournments or postponements of the extraordinary general meeting.

After careful consideration, ARWA’s board of directors has determined that the Warrant Amendment Proposal and the Warrantholder Adjournment Proposal are fair to and in the best interests of ARWA and its warrantholders and unanimously recommends that you vote or give instruction to vote “FOR” the Warrant Amendment Proposal and “FOR” the Warrantholder Adjournment Proposal, if presented. For the avoidance of doubt, warrantholders will have no power to adjourn the extraordinary general meeting of shareholders scheduled for the same day.

All ARWA warrantholders are cordially invited to attend the extraordinary general meeting in person. To ensure your representation at the extraordinary general meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a holder of record of ARWA warrants, you may also cast your vote in person at the extraordinary general meeting. If your warrants are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your warrants or, if you wish to attend the extraordinary meeting and vote in person, obtain a proxy from your broker or bank.

Your vote is important regardless of the number of warrants you own. Whether you plan to attend the extraordinary general meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your warrants are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the warrants you beneficially own are properly counted.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors,

Kevin T. Chin

Chairman of the Board and Chief Executive Officer

[●], 2016

This proxy statement/prospectus is dated [●], 2016 and is first being mailed to Arowana Inc. warrantholders on or about [●], 2016.

The information in this proxy statement/prospectus is not complete and may be changed. We may not issue these securities until the registration statement filed with the Securities and Exchange Commissions is effective. This proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED AUGUST 24 , 2016

PROXY STATEMENT FOR EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
OF
AROWANA INC.

PROXY STATEMENT FOR EXTRAORDINARY GENERAL MEETING OF WARRANTHOLDERS
OF
AROWANA INC.

PROSPECTUS FOR UP TO 12,177,350 ORDINARY SHARES
OF
VIVOPOWER INTERNATIONAL PLC

The board of directors of each of Arowana Inc., a Cayman Islands exempted company (“ARWA”), Arowana International Limited, an Australian public company (“AWN”), and VivoPower International PLC, a public limited company incorporated under the laws of England and wholly owned subsidiary of AWN (“VivoPower”), has unanimously approved the transactions contemplated by the Contribution Agreement, dated as of August 11, 2016, by and among ARWA, AWN and VivoPower (as the same may be amended, the “Contribution Agreement”).

Pursuant to the Contribution Agreement, ARWA will contribute to VivoPower the funds held in the trust account that holds the proceeds of its initial public offering, less certain transaction expenses, amounts used to pay ARWA public shareholders who properly exercise their conversion rights in connection with the vote to approve the Contribution Proposal and reserves for liquidation and dissolution expenses (the “Contribution Amount”), in exchange for ordinary shares of VivoPower. Additionally, ARWA warrantholders will be asked to consider and vote on a proposal to approve and consent to an amendment of the warrant agreement governing ARWA’s outstanding warrants (the “warrant amendment”) to provide that, upon consummation of the Transactions, each of ARWA’s outstanding warrants, which entitle the holder thereof to purchase one-half of one ordinary share of ARWA, will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower.

We estimate that the ordinary shares of VivoPower distributed to ARWA shareholders and warrantholders as a result of the Contribution and warrant amendment will constitute between approximately 55.8% and 72.0% of the issued share capital of VivoPower following completion of the Transactions, depending on the number of shares converted by ARWA’s public shareholders pursuant to their conversion rights. Following the contribution and warrant amendment, ARWA will distribute the VivoPower shares received in the Contribution to its shareholders and warrantholders and intends to thereafter dissolve and liquidate. Accordingly, this prospectus covers an aggregate of up to 12,177,350 ordinary shares to be issued by VivoPower to ARWA as a result of the Transactions and the warrant amendment.

Proposals to approve the Transactions and the other matters discussed in this proxy statement/prospectus will be presented at the extraordinary general meeting of shareholders of ARWA and the extraordinary general meeting of warrantholders of ARWA scheduled to be held on [●], 2016. The consummation of the Transactions also is subject to the approval of the AWN shareholders.

ARWA’s units, ordinary shares, rights and warrants are currently listed on the Nasdaq Capital Market (“Nasdaq”) under the symbols ARWAU, ARWA, ARWAR and ARWAW, respectively. VivoPower will apply for listing, to be effective at the time of the transactions contemplated by the Contribution Agreement, of its ordinary shares on Nasdaq under the symbol VVPR. VivoPower will not have units, warrants or rights traded following consummation of the Transactions and warrant amendment as the ARWA warrants will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower pursuant to the Contribution Agreement, the ARWA rights entitle the holder to receive one-tenth of an ARWA ordinary share upon consummation of the Transactions and the ARWA units are comprised of shares, warrants and rights, which warrants and rights will no longer trade. It is a condition of the consummation of the Transactions that VivoPower receive confirmation from Nasdaq that the combined company meets Nasdaq’s listing conditions, except for the number of round lot holders, but there can be no assurance such listing conditions will be met or that VivoPower will obtain such confirmation from Nasdaq. If such listing conditions are not met or if such confirmation is not obtained, the Transactions will not be consummated.

This proxy statement/prospectus provides you with detailed information about the Contribution Agreement, the warrant amendment and other matters to be considered at the extraordinary general meeting of ARWA’s shareholders and the extraordinary general meeting of ARWA’s warrantholders. We encourage you to carefully read this entire document. You should also carefully consider the risk factors described in “ Risk Factors” beginning on page 28 of this proxy statement/prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense .

This proxy statement/prospectus is dated [●], 2016, and is first being mailed to holders on or about [●], 2016.

TABLE OF CONTENTS

SUMMARY OF THE MATERIAL TERMS OF THE TRANSACTIONS	1
QUESTIONS AND ANSWERS ABOUT THE PROPOSALS	2
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS	10
The Parties	10
Emerging Growth Company	10
The Contribution Proposal	11
Opinion of Financial Advisor to the Board of Directors of ARWA	12
The Dissolution Proposal	12
The Incentive Plan Proposal	12
The Shareholder Adjournment Proposal	12
The Warrant Amendment Proposal	12
The Warrant Adjournment Proposal	13
ARWA Initial Shareholders	13
Date, Time and Place of Extraordinary General Meeting of ARWA’s Shareholders and Warrantholders	13
Voting Power; Record Date	13
Quorum and Vote for the Extraordinary General Meeting of Shareholders	14
Vote for the Extraordinary General Meeting of Warrantholders	14
Conversion Rights	14
Appraisal Rights	15
Proxy Solicitation	15
Interests of ARWA’s Directors and Officers in the Transactions	15
Recommendation to Shareholders and Warrantholders	18
Conditions to Closing the Transactions	18
Waiver	19
Termination	20
Regulatory Matters	20
Risk Factors	20
SELECTED HISTORICAL FINANCIAL INFORMATION	21
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION	26
COMPARATIVE PER SHARE DATA	27
RISK FACTORS	28
Risks Related to VivoPower’s Business and Operations Following the Transactions	28
Risks Related to Our Operations	31
Risks Related to an Investment in Our Ordinary Shares	36
Risks Related to the Transactions	37
Risks Related to Investing in an English Company	42
FORWARD-LOOKING STATEMENTS	45
EXTRAORDINARY GENERAL MEETING OF ARWA SHAREHOLDERS AND EXTRAORDINARY GENERAL MEETING OF ARWA WARRANTHOLDERS	46
General	46
Date, Time and Place	46
Purpose of the Extraordinary General Meeting of Shareholders	46
Purpose of the Extraordinary General Meeting of Warrantholders	46
Recommendation of ARWA Board of Directors	46
Record Date; Who is Entitled to Vote	47
Quorum	47
Abstentions and Broker Non-Votes	47
Vote Required	47
Voting Your Shares or Warrants	47
Revoking Your Proxy	48
Who Can Answer Your Questions About Voting Your Shares	48
Conversion Rights	48

Appraisal Rights	49
Proxy Solicitation Costs	49
ARWA Initial Shareholders	49
THE CONTRIBUTION PROPOSAL	51
Structure of the Transactions	51
Headquarters; Stock Symbols	51
Background of the Transactions	51
ARWA’s Board of Directors’ Reasons for Approval of the Transactions	53
Satisfaction of 80% Test	53
Interests of ARWA’s Directors and Officers in the Transactions	54
Opinion of Financial Advisor to the Board of Directors of ARWA	56
Material Federal Income Tax Consequences of the Transactions to ARWA and Its Securityholders	61
Material UK Tax Consequences of Owning, Holding and Disposing of VivoPower Shares	62
Anticipated Accounting Treatment	64
Regulatory Matters	64
Required Vote	64
THE CONTRIBUTION AGREEMENT	65
Closing and Effective Time of the Transactions	66
Representations and Warranties	65
Covenants	66
Lock-Up Agreements; Escrow	69
Conditions to Closing the Transactions	69
Waiver	70
Termination	70
Effect of Termination	71
Fees and Expenses	71
Confidentiality; Access to Information	71
Amendments	71
Governing Law; Consent to Jurisdiction	71
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS	72
The Transactions	72
THE DISSOLUTION PROPOSAL	83
General	83
Reporting Requirements	83
Trading of ARWA’s Securities	83
Regulatory Approvals	84
Appraisal Rights	84
Required Vote	84
INCENTIVE PLAN PROPOSAL	85
General	85
Description of Incentive Plan	85
New Plan Benefits	87
Required Vote	87
THE SHAREHOLDER ADJOURNMENT PROPOSAL	88
Consequences If the Shareholder Adjournment Proposal Is Not Approved	88
Required Vote	88
THE WARRANT AMENDMENT PROPOSAL	89
Certain Effects of the Approval of the Warrant Amendment Proposal	89
Required Vote	89
THE WARRANTHOLDER ADJOURNMENT PROPOSAL	90
Consequences if the Warrantholder Adjournment Proposal is Not Approved	90
Required Vote	90
OTHER INFORMATION RELATED TO ARWA	91
Introduction	91

Fair Market Value of Target Business	92
Liquidation if No Business Combination	92
Facilities	93
Employees	93
Directors and Executive Officers	93
Legal Proceedings	95
Periodic Reporting and Audited Financial Statements	95
ARWA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations	95
Independent Auditors’ Fees	97
Code of Ethics	98
BUSINESS OF VIVOPOWER	99
Overview	99
Current Offering	99
Future Offerings may include:	99
History and Corporate Structure	100
Industry Background	101
Energy Markets	101
Electrification of Energy Markets and Energy Storage	101
Solar Photovoltaic (PV) Electricity Generation	102
Solar – A Massive Energy Source	102
Solar – Environmental and Health Benefits	103
Solar Photovoltaic – Increases in Efficiency and Reductions in Cost	103
Key Drivers of Demand for Solar PV	105
Electric Power Grid	106
Vivopower’s Strength	114
Employees	117
Properties	118
Legal Proceedings	118
VIVOPOWER’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	119
Overview	119
Critical Accounting Policies	119
Description of the Group	119
Recent Events	120
Results of operations	120
Financial condition, liquidity and capital resources	120
Trend information	121
Off-balance sheet arrangements	121
Disclosure of contractual obligations	121
VIVOPOWER AUSTRALIA’S MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	122
Selected historical consolidated financial information	122
Overview	122
Description of the Group	122
Consolidated Statement of Profit or Loss and Other Comprehensive Income	123
Results Of Operations	123
Financial Condition, Liquidity and Capital Resources	126
Trend Information	126

iii

Off-Balance Sheet Arrangements	126
Tabular Disclosure of Contractual Obligations	127
Critical Accounting Estimates and Judgments	127
AEVITAS’ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	128
Selected historical consolidated financial information	128
Overview	128
Description of the Group	128
Statement of Profit or Loss and Other Comprehensive Income	129
Results of Operations	129
Financial Condition, Liquidity and Capital Resources	132
Trend Information	133
Off-Balance Sheet Arrangements	133
Tabular Disclosure of Contractual Obligations	134
Critical Accounting Estimates and Judgments	134
MANAGEMENT OF VIVOPOWER FOLLOWING THE TRANSACTIONS	135
Employees	136
Independence of Directors	136
Board Leadership Structure and Role in Risk Oversight	137
Meetings and Committees of the Board of Directors	137
Audit Committee Information	137
Nominating Committee Information	138
Compensation Committee Information	139
EXECUTIVE COMPENSATION	140
ARWA Executive Officer and Director Compensation	140
VivoPower Executive Officer and Director Compensation	140
BENEFICIAL OWNERSHIP OF SECURITIES	142
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS	145
ARWA Related Person Policy	145
ARWA Related Person Transactions	145
VivoPower Related Person Policy and Related Person Transactions	146
VivoPower Related Person Policy	147
Section 16(a) Beneficial Ownership Reporting Compliance	147
DESCRIPTION OF VIVOPOWER SECURITIES	148
General	148
Shareholder Authorities	148
Key Provisions in our Articles of Association	148
Objects and Purposes	148
Differences in Corporate Law	153
Other U.K. Law Considerations	159
Shareholder Rights	161
U.K. City Code on Takeovers and Mergers	161
History of Security Issuances	162
Transfer Agent and Registrar	162
Listing	162
PRICE RANGE OF ARWA SECURITIES AND DIVIDENDS	163
Market Price of Units, Ordinary Shares, Rights and Warrants	163
Holders	163
APPRAISAL RIGHTS	164
SHAREHOLDER PROPOSALS	164
OTHER SHAREHOLDER COMMUNICATIONS	164
EXPERTS	164
DELIVERY OF DOCUMENTS TO SHAREHOLDERS	164
WHERE YOU CAN FIND MORE INFORMATION	165
INDEX TO FINANCIAL STATEMENTS	166

Note : Unless otherwise indicated, all references to “ $ ” in this proxy statement/prospectus refer to United States dollars.

SUMMARY OF THE MATERIAL TERMS OF THE TRANSACTIONS

●

The parties to the Contribution Agreement are ARWA, VivoPower and AWN.

●

VivoPower is a wholly owned subsidiary of AWN. VivoPower is a global next generation solar power company that operates a build, transfer, operate (“BTO”) model to establish an installed solar power asset base in a capital efficient manner. VivoPower intends to leverage this asset base to sell distributed generation (“DG”) power and manage data driven energy services for commercial, industrial and government (“CIG”) customers. See the section entitled “ Business of VivoPower .”

●

Pursuant to the Contribution Agreement, ARWA warrantholders will be asked to consider and vote on a proposal to approve and consent to amend the terms of the warrant agreement governing ARWA’s outstanding warrants to provide that, upon consummation of the Transactions, each of ARWA’s outstanding warrants, which entitle the holder thereof to purchase one-half of one ordinary share of ARWA, will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower. See the section entitled “ The Warrant Amendment Proposal .”

●

It is estimated that the ordinary shares of VivoPower distributed to ARWA shareholders and warrantholders as a result of the Contribution and warrant amendment will constitute approximately 55.8% of the issued share capital of VivoPower after the Transactions assuming ARWA public shareholders seek conversion of the maximum of 2,732,400 shares as provided by the Contribution Agreement. To the extent that fewer ARWA public shareholders seek conversion of their public shares, ARWA will use the excess capital in the trust fund to purchase additional shares of VivoPower from VivoPower, who will in turn utilize those funds to repurchase a like number of VivoPower shares from AWN. It is estimated that the ordinary shares of VivoPower distributed to ARWA shareholders and warrantholders as a result of the Contribution and warrant amendment if no holders of public shares seek conversion rights will be approximately 72.0% of the issued share capital of VivoPower after the Transactions. See the section entitled “ The Contribution Proposal — Structure of the Transaction s .”

●

In connection with the Transactions, VivoPower will acquire certain businesses, including VivoPower Pty Ltd (“VivoPower Australia”) and Aevitas O Holdings Pty Ltd (“OptionCo”). The consummation of these acquisitions, which we refer to herein as the “contingent acquisitions,” is conditional on the closing of the Transactions. The consummation of the Transactions is conditional on all other conditions to the closing of these acquisitions being satisfied or waived and the parties thereto being ready, willing and able to consummate these acquisitions as soon as practical after the closing of the Transactions. As soon as practical after the closing of the Transactions and the contingent acquisitions, OptionCo will acquire over 99% of Aevitas Group Limited (“Aevitas”). See the section entitled “ The Contribution Agreement – Conditions to Closing the Transactions ” for further information.

●

In addition to voting on the Transactions, the shareholders of ARWA will vote on a proposal to approve the voluntary winding up of ARWA, subject to and conditional upon the approval of the Contribution Proposal and the completion of the Transactions, including the Contribution and subsequent distribution of the VivoPower shares ARWA will receive in such Contribution. Shareholders of ARWA also will vote on a discretionary management incentive plan (the “Incentive Plan”), providing for the issuance of equity by VivoPower and MidCo, a subsidiary of VivoPower, to employees and directors of VivoPower and its subsidiaries. See the sections entitled “ The Dissolution Proposal ” and “ The Incentive Plan Proposal. ”

●

The Contribution Agreement provides that either ARWA or VivoPower may terminate the agreement if the Transactions are not consummated by June 30, 2017. However, if ARWA does not consummate the Transactions by November 6, 2016, it will not be able to consummate them at all unless its shareholders approve an extension of such date, because without an extension, the passing of such date without the consummation of an initial business combination will trigger ARWA’s automatic winding up, dissolution and liquidation pursuant to its second amended and restated memorandum and articles of association. Additionally, the Transactions shall not be consummated if ARWA’s public shareholders do not approve the Contribution Proposal, holders of more than 2,732,400 of ARWA’s public shares validly exercise their conversion rights or AWN’s shareholders do not approve the Transactions. Additionally, the Contribution Agreement may be terminated, among other reasons, by either ARWA or VivoPower upon material breach of the other party. See the section entitled “ The Contribution Agreement — Termination .”

●

After the Transactions, the directors of VivoPower will be Kevin Chin, Gary Hui, Dr. Philip Comberg, Edward Hyams, Peter Sermol and [●]. After the transactions, Gary Hui, Edward Hyams and Peter Sermol will be considered independent directors under the rules of Nasdaq. See the section entitled “ Management of VivoPower Following the Transactions .”

●

Upon completion of the Transactions, the executive officers of VivoPower will be Dr. Philip Comberg, David Pilotte and Carl Weatherley-White. See the section entitled “ Management of VivoPower Following the Transactions .”

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS


Q.	Why am I receiving this proxy statement/prospectus?	A.	ARWA, AWN and VivoPower have agreed to a business combination under the terms of the Contribution Agreement, dated as of August 11, 2016, that is described in this proxy statement/prospectus. This agreement is referred to as the “Contribution Agreement.” A copy of the Contribution Agreement is attached to this proxy statement/prospectus as Annex A , and ARWA encourages its shareholders and warrantholders to read it in its entirety. ARWA’s shareholders are being asked to consider and vote upon a proposal to adopt the Contribution Agreement, which, among other things, provides for ARWA to contribute to VivoPower the Contribution Amount in exchange for ordinary shares of VivoPower, and to approve the Transactions contemplated by the Contribution Agreement. The Transactions constitute a “business combination” as defined under ARWA’s second amended and restated memorandum and articles of association.

			In addition to voting on the Transactions contemplated by the Contribution Agreement, the shareholders of ARWA will vote on a proposal to approve the voluntary winding up of ARWA, subject to and conditional upon the approval of the Contribution Proposal and the completion of the Transactions, including the Contribution and subsequent distribution of the VivoPower shares ARWA will receive in such Contribution. Shareholders of ARWA also will vote on the Incentive Plan, which provides for the issuance of equity by VivoPower and MidCo to employees and directors of VivoPower and its subsidiaries. See the sections entitled “ The Dissolution Proposal ” and “ The Incentive Plan Proposal .”

			ARWA’s warrantholders are also being asked to consider and vote on a proposal to approve and consent to amend the terms of the warrant agreement governing ARWA’s outstanding warrants to provide that, upon consummation of the Transactions, each of ARWA’s outstanding warrants, which entitle the holders thereof to purchase one-half of one ordinary share of ARWA, will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower. See the section entitled “The Warrant Amendment Proposal. ”

			In addition to the foregoing proposals, the shareholders and warrantholders may also be asked to consider and vote upon a proposal to adjourn their respective meetings to a later date or dates to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meetings, ARWA would not have been authorized to consummate the Transactions or the closing conditions under the Contribution Agreement would not have been met (because, for example, (i) the Contribution Proposal would not have been approved, (ii) more than 2,732,400 of the holders of the public shares would have properly elected to convert their public shares into cash or (iii) the Warrant Amendment Proposal would not have been approved). See the sections entitled “ The Shareholder Adjournment Proposal ” and “The Warrantholder Adjournment Proposal.”

			ARWA will hold the extraordinary general meeting of its shareholders and the extraordinary general meeting of its warrantholders to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the proposed Transactions and the other matters to be acted upon at the extraordinary general meetings. Shareholders and warrantholders should read it carefully.

			The vote of shareholders and warrantholders is important. Shareholders and warrantholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

Q.	I am a n ARWA rightholder . Why am I receiving this proxy statement/prospectus?	A.	As a holder of ARWA rights, you will be entitled to receive one-tenth of one ordinary share of ARWA upon consummation by ARWA of the Transactions. Accordingly, you will participate in the distribution of the VivoPower ordinary shares when and if they are distributed by ARWA to its shareholders and warrantholders following consummation of the Transactions. This proxy statement/prospectus includes important information about VivoPower and the business of VivoPower and its subsidiaries following consummation of the Transactions. We urge you to read the information contained in this proxy statement/prospectus carefully.

Q.	Why is ARWA proposing the business combination ?	A.	ARWA was incorporated to effect a merger, capital stock exchange, asset acquisition or other similar business combination with one or more businesses or entities.

			ARWA completed its initial public offering of units, with each unit consisting of one ordinary share, one warrant and one right convertible into one-tenth of one ordinary share upon the consummation of a business combination, on May 6, 2015, and closed on the sale of the units subject to overallotment on May 12, 2015, raising total gross proceeds of approximately $82,800,000. Since the initial public offering, ARWA’s activity has been limited to the evaluation of business combination candidates.

			VivoPower is a global next generation solar power company that operates a BTO model to establish an installed solar power asset base in a capital efficient manner. VivoPower intends to leverage this asset base to sell DG power and manage data driven energy services for CIG customers. Based on its due diligence investigations of VivoPower and the industry in which it operates, including the financial and other information provided by VivoPower in the course of their negotiations, ARWA believes that a business combination with VivoPower will provide ARWA shareholders with an opportunity to participate in a company with significant growth potential. However, there is no assurance of this. See the section entitled “ The Contribution Proposal — ARWA’s Board of Directors’ Reasons for Approval of the Transactions .”

Why is ARWA holding an extraordinary general meeting of warrantholders ?

At the extraordinary general meeting of warrantholders, ARWA will ask holders of its warrants, including ARWA’s officers, directors, initial shareholders and affiliates, to approve and consent to amend the terms of the warrant agreement governing ARWA’s outstanding warrants, to provide that, upon consummation of the Transactions, each of ARWA’s outstanding warrants, which entitle the holder thereof to purchase one-half of one ordinary share of ARWA, will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower (the “Warrant Amendment Proposal”). If the Transactions are not completed, the warrant amendment will not become effective, even if the warrantholders have approved the Warrant Amendment Proposal. Approval of the Warrant Amendment Proposal is a condition to consummation of the Transactions.

In addition, at the extraordinary general meeting of warrantholders, holders of warrants will also be asked to approve a proposal to adjourn the extraordinary general meeting of warrantholders to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that, based upon the tabulated vote at the time of the extraordinary general meeting, there are not sufficient votes to approve the Warrant Amendment Proposal. This is referred to herein as the Warrantholder Adjournment Proposal. This proposal will only be presented at the extraordinary general meeting of warrantholders if there are not sufficient votes to approve the Warrant Amendment Proposal.

Why is ARWA proposing the Warrant Amendment Proposal ?

ARWA is proposing the Warrant Amendment Proposal because VivoPower is not able to assume the ARWA warrants upon consummation of the Transactions under the laws of its jurisdiction of incorporation. Furthermore, the parties believe that amending the warrants in this fashion will leave VivoPower with a more simplified capital structure upon consummation of the Transactions. If the Transactions are not completed, the warrant amendment will not become effective, even if the warrantholders have approved the Warrant Amendment Proposal. Under the terms of the warrant agreement governing ARWA’s warrants, approval of the Warrant Amendment Proposal requires the affirmative vote of the holders of a majority of the outstanding warrants as of the record date.

Why is ARWA proposing the Dissolution Proposal ?

If the Contribution Proposal is approved and the Transactions are consummated, ARWA will have completed its initial business combination transaction by contributing to VivoPower all of the cash held in the trust account, less transaction expenses, amounts due to public shareholders who properly exercise their conversion rights and reserves for liquidation and dissolution expenses, in exchange for VivoPower ordinary shares. ARWA will then distribute the VivoPower ordinary shares it receives to its shareholders (by way of a dividend, subject to applicable laws) and warrantholders, at which time it will have no further business or assets. ARWA’s board of directors has determined that dissolving ARWA as a legal entity after completion of the Transactions and subsequent distribution is in the best interests of ARWA shareholders.

Do I have conversion rights?

If you are a holder of public shares, you have the right to demand that ARWA convert such shares into cash provided that you vote either for or against the Contribution Proposal. We sometimes refer to these rights to demand conversion of the public shares into a pro rata portion of the cash held in ARWA’s trust account as “conversion rights.”

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or more of the public shares. Accordingly, all public shares in excess of 20% held by a public shareholder will not be converted to cash.

Under ARWA’s second amended and restated memorandum and articles of association, the Transactions may only be consummated if ARWA has net tangible assets of at least $5,000,001 upon such consummation. ARWA estimates that this condition will be met if holders of no more than 7,789,803 of the public shares properly demand conversion of their shares into cash. However, pursuant to the Contribution Agreement, it is a condition to closing the Transactions that holders of no more than 2,732,400 of the public shares exercise their conversion rights. All of the parties to the Contribution Agreement must agree to waive this condition.

How do I exercise my conversion rights?

If you are a holder of public shares and wish to exercise your conversion rights, you must (i) affirmatively vote either for or against the Contribution Proposal and (ii) demand that ARWA convert your shares into cash no later than the time the vote is taken with respect to the Contribution Proposal by delivering your stock to ARWA’s transfer agent physically or electronically using Depository Trust Company’s DWAC (Deposit Withdrawal at Custodian) system prior to the vote at the meeting. Any holder of public shares voting for or against the Contribution Proposal will be entitled to demand that his shares be converted for a full pro rata portion of the amount then in the trust account, which was approximately $84.5 million, or $10.20 per share, as of August 16, 2016 (after giving effect to the withdrawal by ARWA of all interest earned on the trust account for payment of its tax liabilities and for working capital). Such amount will be paid promptly upon consummation of the Transactions. However, under Cayman Islands law, the proceeds held in the trust account could be subject to claims which could take priority over those of ARWA’s public shareholders exercising conversion rights, regardless of whether such holders vote for or against the Contribution Proposal. Therefore, the per-share distribution from the trust account in such a situation may be less than originally anticipated due to such claims. Your vote on any proposal other than the Contribution Proposal will have no impact on the amount you will receive upon exercise of your conversion rights.

Any request for conversion, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Contribution Proposal at the extraordinary general meeting. If you deliver your shares for conversion to ARWA’s transfer agent and later decide prior to the extraordinary general meeting not to elect conversion, you may request that ARWA’s transfer agent return the shares (physically or electronically). You may make such request by contacting ARWA’s transfer agent at the phone number or address listed at the end of this section.

Any corrected or changed proxy card or written demand of conversion rights must be received by ARWA’s proxy solicitor, Morrow Sodali, prior to the vote taken on the Contribution Proposal at the extraordinary general meeting. No demand for conversion will be honored unless the holder’s stock has been delivered (either physically or electronically) to the transfer agent prior to the vote at the meeting.

If a holder of public shares votes for or against the Contribution Proposal and demand is properly made by delivering the shares as described above, then, if the transactions are consummated, ARWA will convert these shares into a pro rata portion of funds deposited in the trust account. If you exercise your conversion rights, then you will be exchanging your ordinary shares of ARWA for cash and will not be entitled to VivoPower ordinary shares upon consummation of the Transactions.

If you are a holder of public shares and you exercise your conversion rights, it will not result in the loss of any ARWA rights or warrants that you may hold.

Do I have appraisal rights if I object to the proposed Transactions ?

A .

No. Neither ARWA shareholders, ARWA warrantholders nor ARWA rights holders have appraisal rights in connection with the Transactions.

What happens to the funds deposited in the trust account after consummation of the Transactions ?

Of the net proceeds of ARWA’s initial public offering and the private placements, a total of $84,456,000 was placed in the trust account immediately following the initial public offering. After consummation of the Transactions, the funds in the trust account will be contributed to VivoPower in exchange for ordinary shares of VivoPower, less certain amounts to pay holders of the public shares who exercise conversion rights and to pay expenses incurred in connection with the Transactions.

What happens if the Contribution Proposal is approved and a substantial number of public shareholde r s exercise their conversion rights?

Pursuant to ARWA’s second amended and restated memorandum and articles of association, all ARWA public shareholders may vote in favor of the business combination and exercise their conversion rights; provided that ARWA may not consummate the business combination if it has less than $5,000,001 of net tangible assets upon consummation of the Transactions. However, pursuant to the Contribution Agreement, it is a condition to closing the Transactions that holders of no more than 2,732,400 of the public shares exercise their conversion rights. All of the parties to the Contribution Agreement must agree to waive this condition.

What happens if the Transactions are not consummated?

If Transactions are not consummated and ARWA is unable to consummate a business combination by November 6, 2016 (or such later date as may be approved by ARWA shareholders), it will trigger ARWA’s automatic winding up, dissolution and liquidation pursuant to its second amended and restated memorandum and articles of association. If ARWA is forced to liquidate the trust account, ARWA anticipates that it would distribute to its public shareholders the amount in the trust account calculated as of the date that is two days prior to the distribution date (including any accrued interest). Prior to such distribution, ARWA would be required to assess all claims that may be potentially brought against it by its creditors for amounts they are actually owed and make provision for such amounts, as creditors take priority over the public shareholders with respect to amounts that are owed to them. ARWA cannot assure you that it will properly assess all claims that may be potentially brought against it.

When do you expect the Transactions to be completed?

It is currently anticipated that the Transactions will be consummated promptly following the ARWA extraordinary general meetings which are set for [●], 2016; however, such meetings could be adjourned, as described above. For a description of the conditions for the completion of the Transactions, see the section entitled “ The Contribution Agreement — Conditions to the Closing of the Transactions .”

What do I need to do now?

ARWA urges you to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the transactions will affect you as a shareholder, warrantholder and/or rightholder of ARWA. Shareholders and warrantholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy cards.

How do I vote?

If you are a holder of record of ARWA ordinary shares or warrants on the record date, you may vote in person at the extraordinary general meetings or by submitting a proxy for the extraordinary general meetings. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares or warrants in “street name,” which means your shares or warrants are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares or warrants you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or warrants or, if you wish to attend the meeting and vote in person, obtain a proxy from your broker, bank or nominee.

If my shares or warrants are held in “ street name, ” will my broker, bank or nominee automatically vote my shares or warrants for me?

No. Your broker, bank or nominee cannot vote your shares or warrants unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee.

May I change my vote after I have mailed my signed proxy card?

Yes. Shareholders and warrantholders may send a later-dated, signed proxy card to ARWA’s proxy solicitor at the address set forth below so that it is received by ARWA’s proxy solicitor prior to the vote at the extraordinary general meeting or attend the extraordinary general meeting in person and vote. Shareholders and warrantholders also may revoke their proxy by sending a notice of revocation to ARWA’s proxy solicitor, which must be received by ARWA’s proxy solicitor prior to the vote at the extraordinary general meeting.

What happens if I fail to take any action with respect to the meetings?

If you are a shareholder and you fail to take any action with respect to the shareholder meeting and the Transactions are approved by shareholders and consummated, you will become a shareholder of VivoPower. If you fail to take any action with respect to the shareholder meeting and the Transactions are not approved, you will continue to be a shareholder of ARWA.

If you are a warrantholder and you fail to take any action with respect to the warrantholder meeting and the Warrant Amendment Proposal is approved by warrantholders, you will become a shareholder of VivoPower. If you fail to take any action with respect to the warrantholder meeting and the Warrant Amendment Proposal is not approved, you will continue to be a warrantholder of ARWA. Approval of the Warrant Amendment Proposal is a condition to the consummation of the Transactions. If ARWA does not consummate the Transactions or another initial business combination by November 6, 2016, it will trigger ARWA’s automatic winding up, dissolution and liquidation pursuant to its second amended and restated memorandum and articles of association. In such event, the warrants will expire worthless.

What should I do with my share , warrant and/or rights certificates?

ARWA warrantholders, rights holders and those shareholders who do not elect to have their ARWA shares converted into the pro rata share of the trust account should not submit their certificates now. ARWA shareholders who exercise their conversion rights must deliver their share certificates to ARWA’s transfer agent (either physically or electronically) prior to the vote at the meeting.

What should I do if I receive more than one set of voting materials?

You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ARWA shares and/or warrants.

Who can help answer my questions?

If you have questions about the transactions or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:

Arowana Inc.

Level 11, 153 Walker Street

North Sydney, NSW 2060

Australia
Tel: +612-8083-9800

Email: investor.relations@arowanaco.com

or:

Morrow Sodali

470 West Avenue

Stamford CT 06902

Tel: (800) 662-5200 or banks and brokers can call collect at (203) 658-9400

Email: ARWA.info@morrowco.com

You may also obtain additional information about ARWA from documents filed with the Securities and Exchange Commission (“SEC”) by following the instructions in the section entitled “ Where You Can Find More Information .” If you are a holder of public shares and you intend to seek conversion of your shares, you will need to deliver your stock (either physically or electronically) to ARWA’s transfer agent at the address below prior to the vote at the extraordinary general meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Mr. Mark Zimkind
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
E-mail: mzimkind@continentalstock.com

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the extraordinary general meetings, including the Transactions, you should read this entire document carefully, including the Contribution Agreement attached as Annex A to this proxy statement/prospectus. The Contribution Agreement is the legal document that governs the Transactions that will be undertaken. It is also described in detail in this proxy statement/prospectus in the section entitled “ The Contribution Agreement. ”

The Parties

ARWA

Arowana Inc. is a blank check company incorporated to effect a merger, capital stock exchange, asset acquisition or other similar business combination with one or more businesses or entities. ARWA was incorporated under the laws of the Cayman Islands on October 1, 2014.

On May 6, 2015, ARWA closed its initial public offering of 7,200,000 units, with each unit consisting of one ordinary share, one right to receive one-tenth of one ordinary share upon consummation of an initial business combination and one redeemable warrant entitling the holder to purchase one-half of one ordinary share at a price of $12.50 per full share commencing on the completion of an initial business combination. On May 12, 2015, ARWA consummated the sale of an additional 1,080,000 units which were subject to an over-allotment option granted to the underwriter of its initial public offering. The units from the initial public offering (including the over-allotment option) were sold at an offering price of $10.00 per unit, generating total gross proceeds of $82,800,000. Simultaneously with the consummation of the initial public offering, ARWA consummated the private sale of 455,000 units to its initial shareholders and/or their affiliates at $10.00 per unit for an aggregate purchase price of $4,550,000. Simultaneously with the consummation of the overallotment, ARWA consummated a private placement of an additional 54,000 units (“private units”) to its initial shareholders and/or their affiliates generating gross proceeds of $540,000. After deducting the underwriting discounts and commissions and the offering expenses, the total net proceeds to ARWA from the offering and private placements were $85,111,186, of which $84,456,000 was deposited into the trust account and the remaining proceeds became available for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. The initial public offering was conducted pursuant to a registration statement on Form S-1 (Reg. No. 333-199591) that became effective on April 30, 2015.

ARWA units, ordinary shares, warrants and rights are listed on Nasdaq under the symbols ARWAU, ARWA, ARWAW and ARWAR, respectively.

The mailing address of ARWA’s principal executive office is Level 11, 153 Walker Street, North Sydney, NSW 2060, Australia and its telephone number is +612-8083-9800. After the consummation of the Transactions (and assuming approval of the Dissolution Proposal), ARWA will cease to exist.

VivoPower

VivoPower International PLC, a public limited company incorporated under the laws of England, was formed on February 1, 2016.

VivoPower is a global next generation solar power company that operates a build, transfer, operate (“BTO”) model to establish an installed solar power asset base in a capital efficient manner. VivoPower intends to leverage this asset base to sell distributed generation (“DG”) power and manage data driven energy services for commercial, industrial and government (“CIG”) customers.

The mailing address of VivoPower’s principal executive office is 23 Hanover Square, Mayfair, London W1S 1JB, United Kingdom. Its telephone number is +44 20 3714 8881.

Emerging Growth Company

Each of ARWA and VivoPower is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (or JOBS Act). It is anticipated that after the consummation of the Transactions, VivoPower will continue to be an “emerging growth company.” As emerging growth companies, ARWA and VivoPower are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These include, but are not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and the requirement to obtain shareholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. ARWA and VivoPower have irrevocably opted not to take advantage of such extended transition period, and will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

VivoPower could remain an emerging growth company until the last day of VivoPower’s fiscal year following the fifth anniversary of the consummation of the Transactions. However, if VivoPower’s non-convertible debt issued within a three-year period or its total revenues exceed $1 billion or the market value of its ordinary shares that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, VivoPower would cease to be an emerging growth company as of the following fiscal year.

The Contribution Proposal

The Contribution Agreement provides for ARWA to contribute to VivoPower the funds held in the trust account, less certain transaction expenses, amounts used to pay ARWA shareholders who properly exercise their conversion rights and reserves for liquidation and dissolution expenses (the “Contribution Amount”), in exchange for ordinary shares of VivoPower.

It is estimated that the ordinary shares of VivoPower distributed to ARWA shareholders and warrantholders as a result of the Contribution and warrant amendment will be approximately 55.8% of the issued share capital of VivoPower after the Transactions assuming ARWA public shareholders seek conversion of the maximum of 2,732,400 shares as provided by the Contribution Agreement. To the extent that fewer ARWA public shareholders seek conversion of their public shares, ARWA will use the excess capital in the trust fund to purchase additional shares of VivoPower from VivoPower, which will in turn utilize those funds to repurchase a like number of VivoPower shares from AWN. It is estimated that the ordinary shares of VivoPower distributed to ARWA shareholders and warrantholders as a result of the Contribution and warrant amendment if no holders of public shares seek conversion rights will be approximately 72.0% of the issued share capital of VivoPower after the Transactions.

ARWA’s outstanding rights entitle the holder to receive one-tenth of an ARWA ordinary share upon consummation of the business combination. Accordingly, ARWA’s outstanding rights will automatically convert into shares of ARWA upon consummation of the Transactions.

As soon as reasonably practicable after the closing of the Transactions, ARWA will distribute the VivoPower ordinary shares received as a result of the Contribution to ARWA’s shareholders (including those as a result of the ARWA rights converting into ARWA shares) and warrantholders. Thereafter, ARWA intends to dissolve and liquidate.

The holders of ARWA’s ordinary shares prior to its initial public offering (the “initial shareholders”) will not be able to sell any of the ordinary shares of VivoPower that they receive as a result of the Transactions until the day preceding the day that is twelve months after the consummation of the Transactions (subject to limited exceptions). The restriction on sales will end earlier than such date with respect to 50% of the shares if the closing price of the VivoPower ordinary shares exceeds $12.50 per share for any 20 trading days within a 30-trading day period following the consummation of the Transactions.

ARWA and VivoPower plan to complete the Transactions promptly after the ARWA extraordinary general meetings, provided that:

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ARWA’s shareholders have approved the Contribution Proposal;

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holders of no more than 2,732,400 of ARWA’s public shares have exercised their conversion rights;

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ARWA’s warrantholders have approved the Warrant Amendment Proposal; and

●

the other conditions specified in the Contribution Agreement have been satisfied or waived.

After consideration of the factors identified and discussed in the section entitled “ The Contribution Proposal — ARWA’s Board of Directors’ Reasons for Approval of the Transactions ,” ARWA’s board of directors concluded that the Transactions met all of the requirements disclosed in the prospectus for its initial public offering, including that the business of VivoPower had a fair market value of at least 80% of the balance of the funds in the trust account at the time of execution of the Contribution Agreement.

Opinion of Financial Advisor to the Board of Directors of ARWA

In the portions of this proxy statement/prospectus referencing the opinion of Cassel Salpeter & Co., LLC ( “ Cassel Salpeter ” ), “ True-up Sale, ” “ Make-even Sale, ” “ Distribution, ” “ Dissolution, ” “ Acquisitions, ” “ Related Transactions, ” “ Contribution ” and “ Transaction ” have the meanings set forth in Cassel Salpeter’s written opinion, which is included as Annex D to this proxy statement/prospectus.

On August 9, 2016, Cassel Salpeter rendered its oral opinion to the ARWA board (which was confirmed in writing by delivery of Cassel Salpeter’s written opinion dated the same date), as to, as of August 9, 2016, (i) the fairness, from a financial point of view, to ARWA of the Contribution Amount to be paid by ARWA in exchange for the Contribution Shares in the Contribution, after giving effect to the Acquisitions, pursuant to the Agreement and (ii) whether VivoPower had a fair market value equal to at least 80% of the value of ARWA’s trust fund.

The summary of the opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the written opinion, which is included as Annex D to this proxy statement/prospectus and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Cassel Salpeter in preparing its opinion. However, neither Cassel Salpeter’s written opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus is intended to be or constitutes advice or a recommendation to any security holder as to how such security holder should act or vote with respect to any matter relating to the prop osed Transaction or otherwise.

The Dissolution Proposal

The Incentive Plan Proposal

The shareholders of ARWA also will vote on a proposal to approve the Incentive Plan, which provides for the issuance of equity by VivoPower and MidCo to employees and directors of VivoPower and its subsidiaries. See the section entitled “ The Incentive Plan Proposal .”

The Shareholder Adjournment Proposal

If, based on the tabulated vote, ARWA is not authorized to consummate the Transactions or the closing conditions under the Contribution Agreement are not met (because, for example, the Contribution Proposal is not approved, more than 2,732,400 of the holders of the public shares properly elect to convert their public shares into cash or the Warrant Amendment Proposal has not been approved), ARWA’s board of directors may submit a proposal to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation of proxies. See the section entitled “ The Shareholder Adjournment Proposal .”

The Warrant Amendment Proposal

ARWA warrantholders will be asked to consider and vote on a proposal to approve and consent to amend the terms of the warrant agreement governing ARWA’s outstanding warrants to provide that, upon consummation of the Transactions, each of ARWA’s outstanding warrants, which entitle the holder thereof to purchase one-half of one ordinary share of ARWA, will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower. See the section entitled “The Warrant Amendment Proposal. ”

The Warrant Adjournment Proposal

If, based on the tabulated vote, there are not sufficient votes at the time of the extraordinary general meeting to approve the Warrant Amendment Proposal, ARWA’s board of directors may submit a proposal to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation of proxies. See the section entitled “ The Warrantholder Adjournment Proposal .”

ARWA Initial Shareholders

As of the record date for the ARWA extraordinary general meeting of shareholders, ARWA’s initial shareholders beneficially owned and were entitled to vote an aggregate of 2,070,000 insider shares that were issued prior to ARWA’s initial public offering. The initial shareholders also purchased an aggregate of 509,000 private units simultaneously with the consummation of ARWA’s initial public offering. The insider shares and the ordinary shares underlying the private units held by the ARWA initial shareholders currently constitute approximately 23.7% of ARWA’s outstanding ordinary shares. In addition, John C. Moore, a director of ARWA, purchased 10,000 public units in ARWA’s initial public offering.

In connection with the initial public offering, each of the ARWA initial shareholders agreed to vote the insider shares, the shares included in the private units, as well as any ordinary shares acquired in the aftermarket, in favor of the Contribution Proposal. The ARWA initial shareholders have also indicated that they intend to vote their shares and warrants in favor of all other proposals being presented at the meetings. The insider shares and shares included in the private units have no conversion rights in the event a business combination is not effected in the required time period and will be worthless if no business combination is effected by ARWA.

In connection with the initial public offering, the ARWA initial shareholders entered into an escrow agreement pursuant to which their insider shares are held in escrow and may not be transferred (subject to limited exceptions) until, with respect to 50% of the insider shares, the earlier of one year after the date of the consummation of an initial business combination and the date on which the closing price of our ordinary shares exceeds $12.50 per share for any 20 trading days within a 30-trading day period following the consummation of an initial business combination and, with respect to the remaining 50% of the insider shares, one year after the date of the consummation of an initial business combination, or earlier in each case if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property.

Date, Time and Place of Extraordinary General Meeting of ARWA’s Shareholders and Warrantholders

The extraordinary general meeting of the shareholders of ARWA will be held at [●] a.m., Eastern time, on [●], 2016, at the offices of Graubard Miller, ARWA’s counsel, at The Chrysler Building, 405 Lexington Avenue, 11 ^th Floor, New York, New York 10174, to consider and vote upon the Contribution Proposal, the Dissolution Proposal, the Incentive Plan Proposal and/or, if necessary, the Shareholder Adjournment Proposal to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, ARWA is not authorized to consummate the Transactions or the closing conditions under the Contribution Agreement are not met.

The extraordinary general meeting of the warrantholders of ARWA will be held at [●] a.m., Eastern time, on [●], 2016, at the offices of Graubard Miller, ARWA’s counsel, at The Chrysler Building, 405 Lexington Avenue, 11 ^th Floor, New York, New York 10174, to consider and vote upon the Warrant Amendment Proposal and/or, if necessary, the Warrantholder Adjournment Proposal to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the extraordinary general meeting, there are not sufficient votes to approve the Warrant Amendment Proposal.

Voting Power; Record Date

Shareholders and warrantholders will be entitled to vote or direct votes to be cast at the extraordinary general meetings if they owned ordinary shares or warrants, respectively, of ARWA at the close of business on [●] , 2016, which is the record date for the extraordinary general meetings of shareholders and warrantholders. With respect to the extraordinary general meeting of shareholders, shareholders will have one vote for each ordinary share of ARWA owned at the close of business on the record date. With respect to the extraordinary general meeting of warrantholders, warrantholders will have one vote for each warrant of ARWA owned at the close of business on the record date. If your shares or warrants are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. ARWA rights do not have voting rights. On the record date, there were (i) 10,859,000 ordinary shares of ARWA outstanding, of which 8,280,000 were public shares with the rest being held by the ARWA initial shareholders, and (ii) 8,789,000 warrants of ARWA outstanding.

Quorum and Vote for the Extraordinary General Meeting of Shareholders

A quorum of ARWA shareholders is necessary to hold a valid meeting of shareholders. The presence in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative, of the holders of a majority of the ARWA ordinary shares constitutes a quorum. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum, but will not count towards the voting thresholds. The proposals presented at the extraordinary general meeting will require the following votes:

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Pursuant to ARWA’s second amended and restated memorandum and articles of association, the approval of the Contribution Proposal will require the affirmative vote of holders of a majority of the ordinary shares of ARWA who, being entitled to do so, vote at the extraordinary general meeting.

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The approval of each of the Shareholder Adjournment Proposal and the Incentive Plan Proposal will require an ordinary resolution (being a resolution passed by a majority of members who, being entitled to do so, vote at the extraordinary general meeting).

Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will have no effect on the Contribution Proposal, the Dissolution Proposal, the Incentive Plan Proposal or the Shareholder Adjournment Proposal. Please note that holders of the public shares cannot seek conversion of their shares unless they affirmatively vote for or against the Contribution Proposal.

Vote for the Extraordinary General Meeting of Warrantholders

The proposals presented at the extraordinary general meeting of warrantholders will require the following votes:

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The approval of the Warrant Amendment Proposal will require the affirmative vote of the holders of a majority of the then outstanding warrants.

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The approval of the Warrantholder Adjournment Proposal will require the affirmative vote of the holders of a majority of the then outstanding warrants present and entitled to vote at the meeting.

Abstentions will have the same effect as a vote “against” the Warrant Amendment Proposal and the Warrantholder Adjournment Proposal, if presented. Broker non-votes, while considered present for the purposes of establishing a quorum, will have the same effect as a vote “against” the Warrant Amendment Proposal, but will have no effect on the Warrantholder Adjournment Proposal.

Conversion Rights

Pursuant to ARWA’s second amended and restated memorandum and articles of association, a holder of public shares may demand that ARWA convert such shares into cash if the Transactions are consummated; provided that ARWA may not consummate the Transactions if it has less than $5,000,001 of net tangible assets upon consummation of the Transactions. Holders of public shares will be entitled to receive cash for these shares only if they (i) affirmatively vote either for or against the Contribution Proposal and (ii) demand that ARWA convert their shares into cash no later than the close of the vote on the Contribution Proposal by delivering their shares to ARWA’s transfer agent prior to the vote at the meeting. If the Transactions are not completed, these shares will not be converted into cash. If a holder of public shares properly demands conversion and votes for or against the Contribution Proposal, ARWA will convert each public share into a full pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the Transactions. As of August 16, 2016, this would amount to approximately $10.20 per share (after giving effect to the withdrawal by ARWA of all interest earned on the trust account for payment of its tax liabilities and for working capital). If a holder of public shares exercises its conversion rights, then it will be exchanging its ordinary shares of ARWA for cash and will no longer own the shares. See the section entitled “ Extraordinary General Meeting of ARWA Shareholders and Extraordinary General Meeting of ARWA Warrantholders — Conversion Rights ” for a detailed description of the procedures to be followed if you wish to convert your shares into cash.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20.0% or more of the public shares. Accordingly, all public shares in excess of 20% held by a public shareholder will not be converted to cash.

Pursuant to ARWA’s second amended and restated memorandum and articles of association, the Transactions may only be consummated if ARWA has net tangible assets of at least $5,000,001 upon such consummation. ARWA estimates that this condition will be met if holders of no more than 7,789,803 of the public shares properly demand conversion of their shares into cash. However, pursuant to the Contribution Agreement, it is a condition to closing the Transactions that holders of no more than 2,732,400 of the public shares exercise their conversion rights. All of the parties to the Contribution Agreement must agree to waive this condition.

Holders of ARWA rights will not have conversion rights with respect to such rights.

Appraisal Rights

ARWA shareholders (including the initial shareholders), ARWA warrantholders and ARWA rights holders do not have appraisal rights in connection with the Transactions.

Proxy Solicitation

ARWA is soliciting proxies on behalf of its board of directors. ARWA will bear all of the costs of the solicitation. Proxies may be solicited by mail, telephone or in person. ARWA has engaged Morrow Sodali to assist in the solicitation of proxies for the fees described herein.

If a shareholder or warrantholder grants a proxy, it may still vote its shares or warrants in person if it revokes its proxy before the applicable extraordinary general meeting. A shareholder or warrantholder may also change its vote by submitting a later-dated proxy as described in the section entitled “ Extraordinary General Meeting of ARWA Shareholders and Extraordinary General Meeting of ARWA Warrantholders — Revoking Your Proxy .”

Interests of ARWA’s Directors and Officers in the Transactions

When you consider the recommendation of ARWA’s board of directors in favor of approval of the Contribution Proposal, you should keep in mind that ARWA’s initial shareholders, including its directors and executive officers, have interests in such proposal that are different from, or in addition to, your interests as a shareholder, warrantholder or rightholder. These interests include, among other things:

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If the Transactions are not consummated by November 6, 2016 (or such later date as may be approved by ARWA shareholders), it will trigger ARWA’s automatic winding up, dissolution and liquidation pursuant to its second amended and restated memorandum and articles of association. If ARWA is forced to liquidate the trust account, ARWA anticipates that it would distribute to its public shareholders the amount in the trust account calculated as of the date that is two days prior to the distribution date (including any accrued interest). In such event, the 2,070,000 insider shares held by ARWA’s initial shareholders, including its directors and officers, which were acquired for an aggregate purchase price of $25,000 prior to ARWA’s initial public offering, would be worthless because ARWA’s initial shareholders are not entitled to participate in any liquidation with respect to such shares. Such shares had an aggregate market value of approximately $20.9 million based upon the closing price of $10.12 per share on Nasdaq on August 16, 2016, subject to completion of the Transactions.

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ARWA’s initial shareholders and affiliates, including its officers and directors, purchased an aggregate of 509,000 private units from ARWA for an aggregate purchase price of $5,090,000 (or $10.00 per unit). These purchases took place on a private placement basis simultaneously with the consummation of the initial public offering. All of the proceeds ARWA received from these purchases were placed in the trust account. Such units had an aggregate market value of approximately $5.3 million based upon the closing price of $10.45 per unit on Nasdaq on August 16, 2016, subject to completion of the Transactions. The purchasers waived the right to participate in any redemption or liquidation distribution with respect to such private units. Accordingly, the ARWA shares, rights and warrants underlying the private units will become worthless if ARWA does not consummate a business combination by November 6, 2016 (or such later date as may be approved by ARWA shareholders), as will the ARWA rights and warrants held by public shareholders.

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The Transactions contemplated by the Contribution Agreement provide that Kevin Chin and Gary Hui will be directors of VivoPower. As such, in the future each may receive cash fees, stock options or stock awards that the VivoPower board of directors determines to pay to its directors as compensation for their service on the board.

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If ARWA is unable to complete a business combination within the required time period, Kevin Chin, ARWA’s Chief Executive Officer and Chairman of the Board of Directors, will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by ARWA for services rendered or contracted for or products sold to ARWA, but only if such a vendor or target business has not executed such a waiver.

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ARWA’s officers, directors, initial shareholders and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on ARWA’s behalf, such as identifying and investigating possible business targets and business combinations. However, if ARWA fails to consummate a business combination within the required period, they will not have any claim against the trust account for reimbursement. Accordingly, ARWA may not be able to reimburse these expenses if the Transactions, or another business combination, are not completed by November 6, 2016 (or such later date as may be approved by ARWA shareholders). As of July 31, 2016, ARWA’s officers, directors, initial shareholders and their affiliates had not incurred any unpaid reimbursable expenses, but they may incur such expenses in the future.

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If ARWA is required to be liquidated and there are no funds remaining to pay the costs associated with the implementation and completion of such liquidation, Kevin Chin has agreed to advance ARWA the funds necessary to pay such costs and complete such liquidation (currently anticipated to be no more than approximately $15,000) and not to seek repayment for such expenses.

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To the extent that ARWA public shareholders seek conversion of fewer than the maximum of 2,732,400 public shares, ARWA will use the excess capital in the trust fund to purchase additional shares of VivoPower from VivoPower, who will in turn utilize those funds to repurchase a like number of VivoPower shares from AWN.

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At the closing of the Transactions, VivoPower USA, LLC (“Vivo USA”), an affiliate of VivoPower, and AWN will enter into a Fee and Loan Agreement providing that, in consideration for the project management and ancillary services that AWN has and will continue to provide to Vivo USA and its related entities in relation to and as preparation for the transactions, Vivo USA will pay AWN a fee of $5,800,000.

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At the closing of the Transactions, Arowana Partners Group Pty Limited (“APG”), an affiliate of certain of ARWA’s officers and directors, will be repaid an aggregate of approximately A$692,581 of outstanding loans (the “APG Loan”) as of June 30, 2016, including accrued but unpaid interest, by one of the entities being acquired in the contingent acquisitions.

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ARWA has a loan payable to APG of $130,000. This loan may not be repaid if the Transactions are not consummated.

In addition to the foregoing, ARWA’s officers and directors may benefit from the Transactions as a result of the following interests and relationships:

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ARWA’s officers and directors beneficially own an aggregate of 21,435,050 ordinary shares of AWN. As such, their interest in the combined company will be greater than their direct interest in ARWA. In addition, to the extent VivoPower repurchases its ordinary shares from AWN, they may have an interest in a portion of the purchase price.

Panaga Group Pty Ltd as trustee for The Panaga Group Trust, of which Kevin Chin, ARWA’s chairman of the board and chief executive officer, is a beneficiary and one of the directors of the corporate trustee of such trust, holds 6,388,954 shares of AWN. APG, an affiliate of Mr. Chin's, holds 350,000 shares of AWN. 181 Foundation Pty Limited ATF Chin Family Superannuation Fund, an affiliate of Mr. Chin's, holds 7,691,046 shares of AWN.

Ralsten Pty Ltd., an entity controlled by John C. Moore, a director of ARWA, owns 1,400,000 shares of AWN.

Dudley Hoskin, a director of ARWA, holds 3,575,000 shares of AWN. Mr. Hoskin and his wife also jointly own 183,037 shares of AWN.

Gary San Hui, the chief financial officer, chief investment officer and a director of ARWA, owns 625,000 shares of AWN.

Kien Khan Kwan, a director of ARWA, holds 122,000 shares of AWN. Alnilum Pty Ltd ATF Jam and Jelly Foundation, an entity controlled by Mr. Kwan, holds: 46,500 shares of AWN. LEK Investments Pty Ltd ATF LEK Trust, an entity controlled by Mr. Kwan, owns 1,053,513 shares of AWN.

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ARWA’s officers and directors beneficially own 871,619 ordinary shares of Aevitas, as well as 47,749 in notes issued by Aevitas and 47,749 convertible preference shares of Aevitas. These securities will be acquired or redeemed by VivoPower as a consequence of the contingent acquisitions.

The Panaga Group Trust, of which Mr. Chin is a beneficiary and one of the directors of the corporate trustee of such trust, holds the following securities in Aevitas: (i) 373,217 ordinary shares; (ii) 4,500 notes; and (iii) 4,500 convertible preference shares. The Octagon Foundation, of which Mr. Chin is a director, owns 5.5% of the paid capital interest in the Arowana Special Situations Fund, which holds an interest of 80.9% of each of the Aevitas notes and convertible preference shares.

Ralsten Pty Ltd., an entity controlled by Mr. Moore and one of the initial shareholders of ARWA, holds 68,402 ordinary shares of Aevitas.

Mr. Hoskin and his wife jointly own 430,000 ordinary shares of Aevitas. Sd & K Investments Pty Ltd atf <Hoskins Family A/C>, an entity controlled by Mr. Hoskin, owns the following securities of Aevitas: (i) 43,249 convertible notes; and (ii) 43,249 convertible preference shares.

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ARWA’s officers and directors beneficially own shares of Arowana Australasian Value Opportunities Fund Limited (“AWQ”), a listed investment company managed by AAVOF Management Pty Limited (Manager), a wholly-owned subsidiary of AWN.

The Octagon Foundation, of which Mr. Chin is a director, owns 1,180,000 shares of AWQ. 181 Foundation Pty Limited ATF Chin Family Superannuation Fund, an affiliate of Mr. Chin's, holds 820,000 shares of AWQ. Mr. Chin holds 2 shares of AWQ.

Ralsten Pty Ltd., an entity controlled by John C. Moore, a director of ARWA, owns 200,000 shares of AWQ.

Dudley Hoskin, a director of ARWA, holds 500,000 shares of AWQ.

Mr. Hui, directly and via a controlled entity, also owns 228,500 shares of AWQ.

Alnilum Pty Ltd ATF Jam and Jelly Foundation, an entity controlled by Mr. Kwan, holds 150,000 shares of AWQ. K2 Horizon Pty Ltd, an entity controlled by Mr. Kwan, owns 50,000 shares of AWQ.

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Certain of ARWA’s officers and directors also are officers or directors of AWN.

Mr. Chin is Chief Executive Officer of, and a director of AWN and a participant in AWN's compensation arrangements.

Mr. Moore is a director of AWN and certain AWN subsidiaries and receives director fees from AWN.

Mr. Hui is a consultant to AWN, a director of certain AWN subsidiaries and a participant in AWN's compensation arrangements.

Mr. Kwan is a director of AWQ. Mr. Kwan is on the Investment Committee of AAVOF Management Pty Limited, a 100% subsidiary of AWN and Investment Manager of AWQ. Mr. Kwan is on the advisory board of AWN.

At any time prior to the applicable extraordinary general meeting, during a period when they are not then aware of any material nonpublic information regarding ARWA or its securities, the ARWA initial shareholders, AWN or AWN’s securityholders and/or their respective affiliates, subject to all applicable laws, may purchase shares or warrants from institutional and other investors who vote, or indicate an intention to vote, against the Contribution Proposal or the Warrant Amendment Proposal, or shares from investors who indicate an intention to convert their shares, or execute agreements to purchase such shares or warrants from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire ordinary shares or warrants of ARWA or vote their shares or warrants in favor of the Contribution Proposal or Warrant Amendment Proposal and not exercise their conversion rights. The purpose of such share or warrant purchases and other transactions would be to increase the likelihood of satisfaction of the requirement that the holders of a majority of the ordinary shares, being entitled to do so, vote at the meeting to approve the Contribution Proposal vote in its favor or to decrease the number of public shares that were being converted to cash, and to increase the likelihood of satisfaction of the requirement that the holders of a majority of the outstanding warrants vote to approve the warrant amendment. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares or warrants, including the granting of put options and the transfer to such investors or holders of shares, warrants or rights owned by the ARWA initial shareholders for nominal value.

Entering into any such arrangements may depress the market price of ARWA’s ordinary shares and warrants. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares or warrants at a price lower than market and may therefore be more likely to sell the shares or warrants he owns, either prior to or immediately after the extraordinary general meeting.

If such transactions are effected, the consequence could be to cause the Transactions to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares or warrants by the persons described above would allow them to exert more influence over the approval of the Contribution Proposal and other proposals to be presented at the extraordinary general meeting of shareholders and the Warrant Amendment Proposal to be presented at the extraordinary general meeting of warrantholders, and would likely increase the chances that such proposals would be approved.

As of the date of this proxy statement/prospectus, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder. ARWA will file a Current Report on Form 8-K to disclose any arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Contribution Proposal or the conversion threshold or the Warrant Amendment Proposal. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

Recommendation to Shareholders and Warrantholders

ARWA’s board of directors believes that the Contribution Proposal and the other proposals to be presented at the extraordinary general meeting of shareholders are fair to and in the best interest of ARWA’s shareholders and unanimously recommends that its shareholders vote “FOR” the Contribution Proposal, “FOR” the Dissolution Proposal, “FOR” the Incentive Plan Proposal and “FOR” the Shareholder Adjournment Proposal, if presented.

ARWA’s board of directors believes that the Warrant Amendment Proposal and the Warrantholder Adjournment Proposal are fair to and in the best interests of ARWA and its warrantholders and unanimously recommends that you vote or give instruction to vote “FOR” the Warrant Amendment Proposal and “FOR” the Warrantholder Adjournment Proposal, if presented.

Conditions to Closing the Transactions

General Conditions

Consummation of the Transactions contemplated by the Contribution Agreement is conditioned on (i) the ARWA shareholders approving the Transactions, (ii) the ARWA warrantholders approving the Warrant Amendment Proposal, (iii) the registration statement of which this proxy statement/prospectus forms a part being declared effective, (iv) the holders of no more than 2,732,400 of ARWA’s public shares exercising their conversion rights, (v) confirmation from Nasdaq that VivoPower meets all the requirements for listing on such exchange other than the requirement to have a sufficient number of round lot holders, (vi) AWN’s shareholders approving the Transactions and (vii) no governmental entity enacting or issuing any legal requirement which has the effect of making the Transactions illegal or otherwise prohibiting the consummation of the Transactions substantially on the terms set forth in the Contribution Agreement.

In addition, the consummation of the Transactions contemplated by the Contribution Agreement is conditioned upon, among other things, (i) the representations and warranties of each party being true and correct on and as of the closing date in all material respects (except to the extent already qualified as to materiality) and each party having performed or complied, in all material respects, with all agreements and covenants required by the Contribution Agreement to be performed or complied with on or prior to the closing and each party having received a certificate with respect to the foregoing from the other party, (ii) all necessary consents, waivers and approvals required to be obtained in connection with the Transactions having been received, other than consents, waivers and approvals the absence of which could not reasonably be expected to have a material adverse effect and (iii) the absence of any litigation pending or threatened, which is reasonably likely to prevent consummation of the transactions contemplated by the Contribution Agreement or cause such transactions to be rescinded following consummation or materially and adversely affect the right of either party to own or operate the assets and operations of VivoPower and AWN following the transaction.

AWN’s and VivoPower’s Conditions to Closing

The obligations of AWN and VivoPower to consummate the Transactions contemplated by the Contribution Agreement also are conditioned upon, among other things:

●

ARWA shall be in compliance with public company reporting requirements;

●

ARWA shall have made appropriate arrangements to have the trust fund, which shall contain no less than $84,456,000, dispersed immediately upon the Closing; and

●

the aggregate of ARWA’s transaction fees and expenses will not exceed $8,000,000.

ARWA’s Conditions to Closing

The obligations of ARWA to consummate the transactions contemplated by the Contribution Agreement also are conditioned upon each of the following, among other things:

●

there being no material adverse change affecting VivoPower;

●

certain individuals having resigned from all of their positions with VivoPower;

●

all outstanding indebtedness owned by any insider of VivoPower shall have been repaid in full; (ii) all guaranteed or similar arrangements pursuant to which VivoPower has guaranteed the payment or performance of any obligations of any VivoPower insider to a third party shall have been terminated; and (iii) no VivoPower insider shall own any undisclosed material direct equity interests in any subsidiary of VivoPower;

●

all of the conditions to the contingent acquisitions, other than the receipt of the Contribution Amount, shall have been satisfied or waived and each party thereto shall be ready to consummate such contingent acquisitions;

●

The aggregate Net Debt (as defined in the Contribution Agreement) of VivoPower and, without duplication, of Aevitas and VivoPower Australia, excluding Permitted Debt (as defined in the Contribution Agreement), as set forth in the most recent monthly financial information provided to ARWA, shall not exceed $25,000,000;

●

the AWN lock-up agreement shall have been executed and delivered and be in full force and effect, and lock-up agreements on terms satisfactory to ARWA shall have been entered into by the counterparties to the VivoPower Australia acquisition (as described in the section entitled “ The Contribution Agreement – Lock-Up Agreements; Escrow ”); and

●

AWN, as the sole shareholder of VivoPower, shall have approved the amendment and restatement of VivoPower’s memorandum and articles of association, the issue and allotment of shares and the approval of the terms of the Contribution Agreement in order to fund the payback of VivoPower shares.

Waiver

If permitted under applicable law, each of the parties may, in writing, waive any inaccuracies in the representations and warranties made for its benefit contained in the Contribution Agreement or in any document delivered pursuant to the Contribution Agreement, and waive compliance with any agreements or conditions for its benefit contained in the Contribution Agreement or in any document delivered pursuant to the Contribution Agreement. Inaccuracies in representations and warranties and noncompliance with agreements or conditions made for the benefit of more than one party may only be waived by mutual agreement of all such parties. ARWA cannot assure you that all of the conditions will be satisfied or waived.

If permitted under applicable law, at any time prior to the closing, VivoPower, AWN and/or ARWA may, in writing, to the extent legally allowed, extend the time for the performance of any of the obligations or other acts of the other parties to the Contribution Agreement that are to be performed for the benefit of such party or parties.

The existence of the financial and personal interests of the directors may result in a conflict of interest on the part of one or more of them between what he may believe is best for ARWA and what he may believe is best for himself in determining whether or not to grant or agree to a waiver in a specific situation. See the section entitled “ Risk Factors ” for a fuller discussion of this and other risks.

Termination

The Contribution Agreement may be terminated at any time, but not later than the closing, as follows:

●

by mutual written consent of ARWA and VivoPower;

●

by either ARWA or VivoPower if the transactions contemplated by the Contribution Agreement are not consummated on or before June 30, 2017;

●

by either ARWA or VivoPower if a governmental entity shall have issued an order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transactions, which order, decree, judgment, ruling or other action is final and nonappealable;

●

by either ARWA or VivoPower if the other party has breached any of its covenants or representations and warranties in any material respect such that the closing conditions would not be met and has not cured its breach within thirty days of the notice of an intent to terminate, provided that the terminating party is itself not in breach;

●

by either ARWA or VivoPower if, at the ARWA shareholder meeting, (i) the Transactions shall fail to be approved by holders of ARWA’s public shares or (ii) the holders of more than 2,732,400 of ARWA’s public shares shall exercise conversion rights; or

●

by either ARWA or VivoPower if the approval of the Transactions and the contingent acquisitions by the AWN shareholders (“AWN Shareholder Approval”) is not obtained at the meeting of AWN shareholders called for such purpose, provided AWN shall have used its best efforts to cause the AWN Shareholder Approval to be obtained.

Regulatory Matters

The Transactions contemplated by the Contribution Agreement are not subject to any additional federal or state regulatory requirement or approval necessary to effectuate the Transactions, except for filings with the Registrar of Companies in the Cayman Islands, with the Australian Securities and Investment Commission and Australian Securities Exchange Limited in Australia and with Companies House in England.

Risk Factors

In evaluating the proposals to be presented at the extraordinary general meetings, a shareholder and/or warrantholder should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “ Risk Factors .”

SELECTED HISTORICAL FINANCIAL INFORMATION

VivoPower and ARWA are providing the following selected historical financial information to assist you in your analysis of the financial aspects of the merger.

The following tables set forth selected historical financial information derived from the audited financial statements of the entities involved in the transaction.

●

The selected financial information as of and for the year ended February 29, 2016 and as of and for the period ended February 28, 2015 for ARWA is derived from the audited financial statements included elsewhere in this proxy statement/prospectus, presented in U.S. dollars and prepared in accordance with U.S. GAAP. The selected financial information as of May 31, 2016 and for the three month periods ended May 31, 2016 and 2015 for ARWA is derived from the unaudited financial statements included elsewhere in this proxy statement/prospectus.

●

The selected financial information for VivoPower is derived from the audited financial statements included elsewhere in this proxy statement/prospectus, presented in U.S. Dollars and is prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) as of March 31, 2016 and for the period then ended.

●

The selected financial information of VivoPower Australia and Aevitas is derived from the audited financial statements included elsewhere in this proxy statement/prospectus, presented in Australian dollars and prepared in accordance with IFRS as issued by the IASB as of March 31, 2016 and 2015 and for the years then ended.

The information is only a summary and should be read in conjunction with each of ARWA’s, VivoPower’s, VivoPower Australia’s and Aevitas’ consolidated financial statements and related notes and the sections entitled “ Other Information Related to ARWA — ARWA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ”, “ VivoPower’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ”, “ VivoPower Australia ’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and “ Aevitas ’ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” contained elsewhere herein. The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of ARWA, VivoPower, VivoPower Australia or Aevitas.

Selected Financial Information — ARWA

	May 31,		February 29,		February 28,
Consolidated Statement of Financial Position Data:	2016		2016		2015
Cash and cash equivalents	$	133,063	$	10,092	$	29,319
Marketable Securities held in Trust Account		84,459,058		84,511,769		-
Total Assets		84,660,433		84,568,646		157,195
Net Assets (Liabilities)		84,425,304		84,465,450		(14,111	)
Ordinary stock subject to possible redemption (at redemption value)		79,425,299		79,465,445		-
Total shareholders' equity (deficit)		5,000,005		5,000,005		(14,111	)

	Three months ended			Three months ended			Year ended			Period from October 1, 2014 (inception) through
Statement of Operations Data:	May 31, 2016			May 31, 2015			February 29, 2016			February 28, 2015
Operating expenses	$	61,988		$	31,317		$	345,030		$	34,111
Operating expenses – related party		30,000			8,387			98,387			5,000
Loss from operations		91,988			39,704			(443,417	)		(39,111	)
Other Income:
Unrealized gain on securities held in Trust Account		6,440			-			55,769			-
Interest income		45,402			4,571			29,072			-
Net loss		(40,146	)		(35,133	)		(358,576	)		(39,111	)
Basic and diluted net loss per share		(0.01	)		(0.02	)		(0.13	)		(0.02	)
Weighted average number of ordinary shares outstanding, basic and diluted		3,073,411			2,174,621			2,831,577			1,800,000

Cash Flow Data:
Net cash used in operating activities	$	(111,582	)	$	(62,953	)	$	(387,006	)	$	(681	)
Net cash used in investing activities		104,533			(84,456,000	)		(84,426,928	)		-
Net cash provided by financing activities		130,000			85,105,202			84,794,707			30,000

Selected Financial Information — VivoPower

	March 31,
Consolidated Statement of Financial Position Data :	2016
Cash and cash equivalents	$	28,038
Note receivable		7,874,594
Total Assets		7,905,530
Net Assets (Liabilities)		(280,661	)
Ordinary shares $0.12 par value 5,514,375 issued and outstanding at inception and March 31, 2016		72,125
Total shareholders' equity (deficit)		(280,661	)

	February 1, 2016 (inception) through
Consolidated Statement of Loss and Data:	March 31, 2016
General and administrative expense	$	279,036
Other expenses		1,625
Net loss		(280,661	)

Basic and diluted net loss per share		(0.05	)
Weighted average number of ordinary shares outstanding, basic and diluted		5,514,375

Consolidated Cash Flow Data:
Net cash used in operating activities		(94,728	)
Net cash used in investing activities		(2,898	)
Net cash provided by financing activities		125,664

Selected Financial Information — VivoPower Australia

Presented in Australian Dollars

	March 31,		March 31,
Consolidated Statement of Financial Position Data :	2016		2015
Cash and cash equivalents	$	877,036	$	2,434,539
Total Assets		4,182,563		2,810,488
Net Assets		2,684,862		2,639,563
Contributed Equity		4,753,804		3,170,002
Total Equity		2,684,862		2,639,563

	Year ended			Year ended
Consolidated Statement of Loss Data:	March 31, 2016			March 31, 2015
Sales Revenue	$	81,340		$	614
Gross Profit		65,855			614
Other Income:		392,765			41,983
Net loss		(1,543,264	)		(530,439	)

Consolidated Cash Flow Data:
Net cash used in operating activities		(1,892,866	)		(382,856	)
Net cash used in investing activities		(2,595,311	)		(352,608	)
Net cash provided by financing activities		2,930,674			3,171,002

Selected Financial Information — Aevitas

Presented in Australian Dollars

	March 31,			March 31,
Consolidated Statement of Financial Position Data :	2016			2015
Cash and cash equivalents	$	1,852,054		$	2,133,692
Total Assets		25,021,895			25,287,972
Net Assets		(3,426,669	)		(769,847	)
Issued capital		20,117,648			20,117,648
Total equity attributable to equity holders of the Company		(5,044,765	)		(2,281,588	)

Consolidated Statement of Loss Data:	Year ended March 31, 2016			Year ended March 31, 2015
Sales Revenue	$	35,439,263		$	39,595,734
Gross Profit		3,787,426			4,171,582
Other Income:		421,792			631,065
Net loss		(2,656,822	)		(2,845,451	)

Consolidated Cash Flow Data:
Net cash used in operating activities	118,720		(18,746	)
Net cash used in investing activities	(181,082	)	(1,215,423	)
Net cash provided by financing activities	(219,276	)	65,088

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

VivoPower and ARWA are providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the transactions. The unaudited pro forma financial statements are not necessarily indicative of the financial position or results of operations that may have actually occurred had the Transactions taken place on the dates noted, or the future financial position or operating results of the combined company.

See pro forma condensed combined financial statements and related notes in the section entitled “ Unaudited Pro Forma Condensed Combined Financial Statements ” included elsewhere in this proxy statement/prospectus.

Selected Unaudited Pro Forma Condensed Combi n ed Financial Informatio n — VivoPower International PLC

	March 31,
Pro Forma Combined Statement of Financial Position Data:	2016
Cash and cash equivalents		7,364,902
Total Assets		82,611,196
Net Assets		59,003,335
Contributed Equity		67,754,179
Total Equity		59,003,335

	Year ended
Pro forma Combined Statement of Income Data:	March 31, 2016
Sales Revenue		26,158,722
Gross Profit		2,837,703
Other Income:		432,869
Net loss		(4,232,892	)
Basic and diluted net loss per share		(0.25	)
Weighted average number of ordinary shares outstanding, basic and diluted		16,914,137

COMPARATIVE PER SHARE DATA

This information is only a summary and should be read together with the selected historical financial information summary included elsewhere in this proxy statement/prospectus, and the historical financial statements of VivoPower, Aevitas and VivoPower Australia and related notes that are included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement/prospectus.

The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of VivoPower, Aevitas and VivoPower Australia would have been had the companies been combined during the period presented.

	VivoPower			Aevitas			VivoPower Australia			Pro forma Combined
As of and for the period ended 31 March 2016
Number of common shares		5,514,375			12,697,547			7,421,816			16,914,137
Total parent entity interest (US$)		(280,661	)		(2,626,103	)		2,057,603			58,997,497
Book value per share (US$)		(0.05	)		(0.21	)		0.28			3.49
Cash dividends declared per share (US$)
Weighted average common shares		5,514,375			12,697,547			5,767,570			16,914,137
Net income (loss) or Pro Forma Net Income (US$)		(280,661	)		(2,034,909	)		(1,136,518	)		(4,231,718	)
Loss per share (basic and diluted) (US$)		(0.05	)		(0.16	)		(0.20	)		(0.25	)

RISK FACTORS

Shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement/prospectus.

The value of your investment in VivoPower following consummation of the Transactions will be subject to the significant risks affecting VivoPower and inherent in the solar energy industry. You should carefully consider the risks and uncertainties described below and other information included in this proxy statement/prospectus. If any of the events described below occur, the post-acquisition business and financial results could be adversely affected in a material way. This could cause the trading price of its ordinary shares to decline, perhaps significantly, and you therefore may lose all or part of your investment. As used in the risks described in this subsection, references to “ we, ” “ us ” and “ our ” are intended to refer to VivoPower unless the context clearly indicates otherwise.

Risks Related to VivoPower’s Business and Operations Following the Transactions

Due to the general economic environment and other factors, we may be unable to generate sufficient cash flows or obtain access to external financing necessary to fund our operations.

In recent years, the European, U.S. and world economies have undergone significant turmoil amid stock market volatility, difficulties in the financial services sector, tightening of the credit markets, softness in the housing markets, concerns of inflation and deflation, reduced corporate profits and capital spending, reduced consumer spending and various other economic difficulties. This recent turmoil demonstrates how uncertain future economic conditions are, and those conditions could negatively impact our ability to obtain debt or equity project financing required for the construction and sale of solar power plants. Additionally, access to capital markets continues to be challenging, especially in Europe. If the slow improvement in market and economic conditions does not continue or turmoil and volatility significantly increase, we may be further limited in our ability to access the capital markets to meet liquidity and operational and capital expenditure requirements. We may not have sufficient resources to support our business plan, and there can be no assurance that liquidity will be adequate over time. There can be no assurance that we will be able to generate sufficient cash flows, find other sources of capital or access capital markets, and if adequate funds and alternative resources are not available on acceptable terms, our ability to fund our operations, develop and construct solar power plants, maintain our research and development efforts, provide collateral for our projects or otherwise respond to competitive pressures would be significantly impaired. Our inability to do any of the foregoing could have a material adverse effect on our business and results of operations.

General economic conditions including market interest rate levels could impact demand for our solar projects and our ability to sell them to our customers profitably.

Our ability to earn cash flows and earnings relies on customer demand for our solar projects. An increase in market interest rates in the economies in which we operate is likely to result in our customers requiring higher rates of returns on solar projects that they acquire from us or finance on our behalf. This has the potential to negatively impact our ability to achieve our earnings and cash flow targets.

Changes in current and forecast electricity price expectations can potentially have a material impact on the profitability of our solar projects and the level of demand from potential customers and financiers.

While we primarily target solar projects that are backed by fixed price power purchase agreements, we may acquire projects that sell electricity at wholesale market rates from commencement or that have power purchase agreements that expire before the end of a project’s useful life. In these circumstances, our business is exposed to current wholesale electricity prices and expectations of future market electricity prices. In the event that these prices decline, or there is a decrease in market consensus forecasts, the demand for our solar projects and the profitability that they could generate may also decline commensurately, impacting our cash flow and earnings.

We make significant investments in building, acquiring and/or financing our solar energy projects, and the delayed sale of our projects or the inability to sell or transfer our projects to their intended long term funding vehicles would adversely affect our business, liquidity and results of operations.

We invest in and transact on solar projects at various stages of development and operations. The development and construction of solar power plants can require long periods of time and substantial initial capital investments, and there are significant risks related to our activities involving solar power plants under development, including high initial capital expenditure costs to develop and construct functional power plant facilities and the related need for construction capital, the availability of favorable government tax and other incentives, the high cost and potential regulatory and technical difficulties in integrating into new markets, an often limited or unstable marketplace, competition from other sources of electric power, regulatory difficulties including obtaining necessary permits, difficulties in negotiating power purchase agreements with potential customers, educating the market regarding the reliability and benefits of solar energy products and services, costs associated with environmental regulatory compliance and competing with larger, more established solar energy companies and utilities. There can be no assurance that we will be able to overcome these risks as we develop our business. There can also be no assurance that a potential project sale can be completed on commercially reasonable terms or at all. Our potential inability to obtain regulatory clearance, project financing or enter into sales contracts with customers could adversely affect our business, liquidity and results of operations. Our liquidity could also be adversely impacted if project sales are delayed.

If we are unable to enter into new financing agreements when needed, or upon desirable terms, for the construction and installation of our solar energy systems, or if any of our current financing partners discontinue or materially change the financing terms for our systems, we may be unable to finance our projects or our borrowing costs could increase, which would have a material adverse effect on our business, financial condition and results of operations.

We may require working capital and credit facilities to fund the up-front costs associated with the design, construction and installation of our solar energy systems and the purchase of components, such as solar modules and inverters, for our systems. In addition, we may seek to secure long-term financing upon completion of our solar energy systems for those systems we retain and use the proceeds to refinance the debt incurred for the design, construction and installation of the solar energy systems, as well as to generate profits and cash flow for our business. Without access to sufficient and appropriate financing, or if that financing is not available at desirable rates or on terms we deem appropriate, we would be unable to grow our business by increasing the number of solar energy systems we are simultaneously investing in. Our ability to obtain additional financing in the future depends on banks' and other financing sources' continued confidence in our business model and the renewable energy industry as a whole. Solar energy has yet to reach widespread market penetration and is dependent on continued support in the form of performance-based incentives, rebates, tax credits, feed-in tariffs and other incentives from federal, state and foreign governments. If this support were to dissipate, our ability to obtain external financing on acceptable terms, or at all, could be materially adversely affected. While we have solar project financing available to us through existing relationships and facilities, our current cash and financing sources may be inadequate to support the anticipated growth in our business plans. In addition, we do not currently have any dedicated financing in some of our emerging and international markets, and obtaining financing in these new markets will present challenges. Our failure to obtain necessary financing to fund our operations would materially adversely affect our business, financial condition and results of operations. To date, we have obtained financing for our business from a limited number of financial institutions. If any of these financial institutions decided not to continue financing our solar energy systems or materially changed the terms under which they are willing to provide financing, we could be required to identify new financial institutions and negotiate new financing documentation. The process of identifying new financing partners and agreeing on all relevant business and legal terms could be lengthy and could require us to reduce the rate of the growth of our business until such new financing arrangements were in place. In addition, there can be no assurance that the terms of the financing provided by a new financial institution would compare favorably with the terms available from our current financing partners. Our inability to secure financing could lead to cancelled projects, or reduced deal flow, or we could be forced to finance the construction and installation of solar energy systems ourselves. In any such case, our borrowing costs could increase, which could have a material adverse effect on our business, financial condition and results of operations.

We may be unable to obtain favorable financing from our vendors and suppliers, which could have a material adverse effect on our business, financial condition and results of operations.

We have historically utilized financing from our vendors and suppliers through customary trade payables or account payables. At times, we have also increased the number of days' payables outstanding. There can be no assurance that our vendors and suppliers will continue to allow us to maintain existing or planned payables balances, and if we were forced to reduce our payables balances below our planned level, without obtaining alternative financing, our inability to fund our operations would materially adversely affect our business, financial condition and results of operations.

If a number of projects in our pipeline are not acquired or completed, our business, financial condition or operating results could be materially adversely affected.

The solar project development process is long and includes many steps involving site selection and development, commercial contracting and regulatory approval, among other factors. There can be no assurance that pipeline will be converted into completed projects or generate revenues or that we can obtain the necessary financing to construct these projects. As we develop pipeline through acquisitions or begin to develop pipeline organically, some of the projects in our pipeline may not be completed or proceed to construction as a result of various factors. These factors may include changes in applicable laws and regulations, including government incentives, environmental concerns regarding a project or changes in the economics or ability to finance a particular project. If a number of projects are not completed, our business, financial condition or operating results could be materially adversely affected.

Our business depends on the solar industry, which is still driven largely by the availability and size of government and economic incentives that may ultimately be reduced or eliminated.

Solar industry demand continues to be driven mainly by the availability and size of government and economic incentives related to the use of solar power because, currently, the cost of solar power exceeds the cost of power furnished by the electric utility grid in most locations. As a result, government bodies in many countries have historically provided incentives in the form of feed-in-tariffs to solar project developers to promote the use of solar energy in on-grid applications and to reduce dependency on other forms of energy. In addition, we rely upon income tax credits and other state incentives in the United States for solar energy systems. Most countries have continued to regularly reduce the rates paid to solar power system owners for generating electricity under their respective feed-in-tariff programs, and these scheduled reductions in feed-in tariff rates are expected to continue. Moreover, the value and pricing of Performance Based Incentives (“PBIs”) and Renewable Energy Certificates (“RECs”), as well as the state Public Utilities Commission (“PUC”) approved power purchasing agreement rates for utilities (which are frequently higher than electricity rates for electricity generated from other energy sources), are likely to continue to decrease, further reducing the U.S. revenue stream from solar projects. These government economic incentives could be further reduced or eliminated altogether, especially in light of ongoing worldwide economic troubles and slow recovery. In addition, some of these solar program incentives expire, decline over time, are limited in total funding or require renewal of authority. Finally, certain countries have altered, and others may alter, their programs retroactively which would impact our current systems. Reductions in, or eliminations or expirations of, governmental incentives could result in decreased viability of our projects and pipeline, which could have a material adverse effect on our business, financial condition or results of operations.

The profitability of our Australian business is impacted by the market price of Large Scale Generation Certificates (LGC), which have historically been highly volatile and impacted by government policies.

We rely on Large Scale Generation Certificates which are generated by Australian solar projects to underpin the profitability of our Australian business and the feasibility of new projects. The LGC price has historically been highly volatile, and we expect future adverse price movements will have a material impact on the profitability of our Australian business’ existing projects and future pipeline. The price of LGCs is also impacted by government policies regarding renewable energy generation which can be uncertain and subject to change.

Existing regulations and policies governing the electric utility industry, as well as changes to these regulations and policies, may adversely affect demand for our projects and services and materially adversely affect our business, financial condition and results of operations.

The market for electricity generation is heavily influenced by local country factors including federal, state and local government regulations and policies concerning the electric utility industry, as well as policies promulgated by public utility commissions and electric utilities. These regulations and policies govern, among other matters, electricity pricing and the technical interconnection of distributed electricity generation to the grid. The regulations and policies also regulate net metering in the United States, which relates to the ability to offset utility-generated electricity consumption by feeding electricity produced by renewable energy sources, such as solar energy, back into the grid. Utility customer purchases of alternative energy, including solar energy, could be deterred by these regulations and policies, which could result in a significant reduction in the potential demand for our solar energy systems. Changes in consumer electricity tariffs or peak hour pricing policies of utilities, including the introduction of fixed price policies, could also reduce or eliminate the cost savings derived from solar energy systems and, as a result, reduce our customer demand for our systems.

Certain power purchase agreements signed in connection with government regulated counterparties may be subject to regulatory approval, and such approval may not be obtained or may be delayed, which could result in a detrimental impact on our business.

As a solar energy provider, the power purchase agreements executed by us and/or our subsidiaries, particularly with government regulated counterparties, in connection with the development of projects are generally subject to approval by the relevant regulatory authority in the local market. It cannot be assured that such approval will be obtained, and in certain markets, the regulatory bodies have recently demonstrated a heightened level of scrutiny on solar power purchase agreements that have been brought for approval. If the required approval is not obtained for any particular solar power purchase agreement, the power purchase agreement counterparty may exercise its right to terminate such agreement, and we may lose its invested development capital.

If we fail to meet changing customer demands, we may lose customers and our sales could suffer.

The industries in which we operate change rapidly. Changes in our customers' requirements result in new and more demanding technologies, product specifications and sizes, and manufacturing processes. Our ability to remain competitive will depend upon our ability to develop technologically advanced products and processes. We must continue to meet the increasingly demanding requirements of our customers on a cost-effective basis. We cannot be certain that we will be able to successfully introduce, market and cost-effectively source any new products, or that we will be able to develop new or enhanced products and processes that satisfy customer needs or achieve market acceptance.

We are currently dependent on a limited number of third-party suppliers for certain components for our solar energy systems. We also rely on third party subcontractors to construct and install our solar energy systems, which could result in sales and installation delays, cancellations, liquidated damages and loss of market share for our business.

We rely on a limited number of third-party suppliers for certain components for our solar power systems, such as inverters. If we fail to develop or maintain our relationships with these suppliers or if one of these suppliers goes out of business, we may be unable to install our solar power systems on time, or only at a higher cost or after a long delay, which could prevent us from delivering our solar power systems to our customers within required timeframes. Additionally, if one of these suppliers goes out of business, the warranty and other services offered by such supplier may be reduced or eliminated, and we may be required to provide such warranty and services, which could increase our costs. To the extent the processes that our suppliers use to manufacture components are proprietary, we may be unable to obtain comparable components from alternative suppliers. The failure of a supplier to supply components in a timely manner, or at all, or to supply components that meet our quality, quantity and cost requirements, could impair our ability to install solar power systems or may increase our costs. We utilize and rely on third party subcontractors to construct and install our solar energy systems throughout the world. If our subcontractors do not satisfy their obligations or do not perform work that meets our quality standards or if there is a shortage of third-party subcontractors or labor strikes that interfere with our subcontractors’ ability to complete their work on time and/or on budget, we could experience significant delays in our construction operations, which could have a material adverse effect on our reputation and/or our ability to grow our business.

Risks Related to Our Operations

Our operations span multiple markets and jurisdictions, exposing us to numerous legal, political, operational and other risks that could negatively affect our operations and profitability.

We continue to explore expansion of our international operations in certain markets where we currently operate and in selected new markets. New markets and developing markets can present many risks including the actions and decisions of foreign authorities and regulators, the imposition of limits on foreign ownership of local companies, changes in laws (including tax laws and regulations), their application or interpretation, civil disturbances and political instability, difficulties in protecting intellectual property, changes in applicable currency, restrictions that prevent us from transferring funds from these operations out of the countries in which they operate or converting local currencies we hold into U.S. dollars, British Pounds or other currencies, as well as other adverse actions by foreign governmental authorities and regulators, such as the retroactive application of new requirements on our current and prior activities or operations. Additionally, evaluating or entering into an emerging market may require considerable management time, as well as start-up expenses for market development before any significant revenues and earnings are generated. Operations in new foreign markets may achieve low margins or may be unprofitable, and expansion in existing markets may be affected by local political, economic and market conditions. As we continue to operate our business globally, our success will depend, in part, on our ability to anticipate and effectively manage these and other related risks. The impact of any one or more of these or other factors could adversely affect our business, financial condition or operating results.

If we fail to adequately manage our planned growth in our business, our overall business, financial condition and results of operations could be materially adversely affected.

We expect the amount of our megawatts (“MW”) installed to continue to grow significantly over the next year. We expect that this growth will place significant stress on our operations, management, employee base and ability to meet capital requirements sufficient to support this growth over the next twelve months. Any failure to address the needs of our growing business successfully could have a negative impact on our business, financial condition or operating results.

Larger scale solar projects involve concentrated project development risks that may cause significant changes in our financial results.

Larger projects may create concentrated risks otherwise described in these risk factors. Under International Financial Reporting Standards (“IFRS”), revenue from our projects will typically be recognised upon the completion and sale of the project, rather than on a percentage of completion accounting basis. A failure to complete a project within a given fiscal period, or entirely, may have a material impact on our quarterly or annual financial results. These projects may also give rise to significant capital commitments which could materially affect cash flow. In addition, if approval by relevant state public utility commissions is delayed or denied or if construction, module delivery, financing, warranty or operational issues arise on a larger project, such issues could have a material impact on our financial results.

We may incur unexpected warranty and performance guarantee claims that could materially and adversely affect our financial condition and results of operations.

In connection with our products and services, we may provide various system warranties and/or performance guarantees. While we generally are able to pass through manufacturer warranties we receive from our suppliers to our customers, in some circumstances, our warranty period may exceed the manufacturer's warranty period or the manufacturer warranties may not otherwise fully compensate for losses associated with customer claims pursuant to the warranty or performance guarantee we provided. For example, most manufacturer warranties exclude many losses that may result from a system component's failure or defect, such as the cost of de-installation, re-installation, shipping, lost electricity, lost renewable energy credits or other solar incentives, personal injury, property damage, and other losses. In addition, in the event we seek recourse through manufacturer warranties, we will also be dependent on the creditworthiness and continued existence of these suppliers. As a result, warranty or other performance guarantee claims against us could cause us to incur substantial expense to repair or replace defective products in our solar energy systems. Significant repair and replacement costs could materially and negatively impact our financial condition and results of operations, as well as take up a lot of employee time remedying such issues. In addition, quality issues can have various other ramifications, including delays in the recognition of revenue, loss of revenue, loss of future sales opportunities, increased costs associated with repairing or replacing products, and a negative impact on our reputation, all of which could also adversely affect our business and operating results.

Our solar projects may underperform expected levels due to a variety of factors including weather and sunlight, and this could materially affect our results of operations.

The results of our operating solar projects may be lower than expectations due to fewer than expected sunlight hours, power conversion, or adverse weather events, among other factors. This underperformance could adversely affect the attractiveness of our projects to potential buyers and result in our business not achieving expected financial returns on investment.

Failure to successfully launch new technologies, products and services could adversely affect our growth prospects.

Our long term growth strategy requires us to successfully monetise new products and services including power support and optimisation services, renewable energy technologies and energy efficiency solutions. A failure to successfully launch these new products and services profitably could adversely affect our growth and future results.

A default of counterparties under our power purchase agreements can materially impact the profitability of our solar projects.

We have entered into power purchase agreements with a number counterparties internationally for our various solar projects. These counterparties range from government entities to investment grade utilities to unrated commercial and industrial businesses. An insolvency event, deterioration in credit quality, or event of default by any of the counterparties of their obligations under their power purchase agreements could have a material detrimental effect on the value of our solar power projects. These projects, many of which required a material capital investment, may become unattractive to our potential customers, impacting our profitability and financial position.

We may have liabilities and obligations under management services agreements that we enter into with our customers, which could have a detrimental financial impact if enforced.

We provide ongoing solar system and project management services for our customers and co-investors under management services agreements. Under the terms of these agreements, many of which last for multiple years, we have certain liabilities and obligations which could be enforced in the event of a breach of our responsibilities. If called, some of these obligations and liabilities could be material and affect our results and financial position.

A failure to obtain change of control consents from counterparties when selling projects to customers could materially impact the results of our operations.

Our profitability relies in part on our ability to continue to transfer projects to other investors. Certain project agreements and non-recourse project financing documents require counterparty consent to a change of project or solar system ownership. If such consents cannot be obtained on reasonable terms, our ability to recycle capital and generate earnings and cash flows will be materially diminished, impacting the results of our operations and future growth prospects.

The loss of one or more of our customers, or failure of any of those customers to meet their obligations under agreements with us could materially adversely affect our results of operations.

Our operating results could materially suffer if we experience a significant reduction in, or loss of, purchases by our top customers.

We face competition in the markets and industry segments in which we operate, which could force us to reduce our prices to retain market share or face losing market share and revenues.

We face competition in the growing renewable energy services market and with other acquirers and investors in renewable energy assets. Some of our competitors have substantial financial, technical, engineering and manufacturing resources to develop products that currently, and may, in the future, compete favorably against our products, and some of our competitors in the solar industry may have substantial government-backed financial resources. We expect that our competitors will continue to improve the design and performance of their products and to introduce new products with competitive price and performance characteristics, and our failure to compete effectively could have a material adverse effect on our business, financial condition or results of operations. We may need to reduce our prices to respond to aggressive pricing by our competitors to retain or gain market share, which could have a material adverse effect on our business, financial condition or results of operations.

Our business may be harmed if we fail to properly protect our intellectual property.

We believe that the success of our business depends in part on our proprietary technology, information, processes and know how. We try to protect our intellectual property rights. We cannot be certain, however, that we have adequately protected or will be able to adequately protect these rights.

From time to time, we may become involved in costly and time-consuming litigation and other regulatory proceedings, which require significant attention from our management.

In addition to potential litigation related to our intellectual property rights, we may be named a defendant from time to time in other lawsuits and regulatory actions relating to our business, some of which may claim significant damages. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such proceedings. An unfavorable outcome could have a material adverse impact on our business and financial position, results of operations or cash flows or limit our ability to engage in certain of our business activities. In addition, regardless of the outcome of any litigation or regulatory proceedings, such proceedings are often expensive, lengthy, disruptive to normal business operations and require significant attention from our management. We may be subject in the future to claims, lawsuits or arbitration proceedings related to matters in tort or under contracts, employment matters, securities class action lawsuits, tax authority examinations or other lawsuits, regulatory actions or government inquiries and investigations.

Our inability to respond to rapid market changes in the solar energy industry, including identification of new technologies and their inclusion in the services that we offer, could adversely affect our business, financial condition or results of operations.

The solar energy industry is characterized by rapid increases in the diversity and complexity of technologies, products and services. In particular, the ongoing evolution of technological standards requires products with lower costs and improved features, such as more efficiency and higher electricity output. If we fail to identify or obtain access to advances in technologies, we may become less competitive, and our business, financial condition or results of operations may be materially adversely affected.

Although we are not currently regulated as a utility in the UK, Australia or under U.S. federal or state law, or the laws and regulations of our foreign markets, we could become regulated as a utility company in the future.

As an owner of solar energy facilities, we currently are exempt from most regulations in our various markets of operation that govern utility companies. As our business grows, however, certain facilities may no longer be eligible for exemption from these regulations, which would result in additional licencing and compliance obligations for our business. Any change in the regulatory environment could place significant restrictions on our ability to operate our business and execute our business plan by prohibiting or otherwise restricting the sale of electricity by us. If we were deemed to be subject to the same regulations as utility companies, such as FERC in the United States, or if new regulatory bodies were established to oversee the solar energy industry, our operating costs could materially increase, adversely affecting our results of operations.

Our brand and reputation are key assets of our business, and if our brand or reputation is damaged, our business and results of operations could be materially adversely affected.

If we fail to deliver our products or solar energy systems within the planned timelines, or our products and services do not perform as anticipated or if we materially damage any of our clients' properties, or cancel projects, our brand name and reputation could be significantly impaired, which could materially adversely affect our business and results of operations.

We may not realize the anticipated benefits of acquisitions, and integration of these acquisitions may disrupt our business and management and cause dilution to our shareholders.

As part of the Transactions we will be merging three independent groups of companies, project pipelines, products, and technologies, and in future may also undertake further acquisitions or enter into joint ventures or other strategic initiatives. We may not realize the anticipated benefits of these acquisitions and each acquisition has numerous risks. These risks include the following:

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difficulty in assimilating the operations and personnel of the acquired company;

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difficulty in effectively integrating the acquired technologies or products with our current products and technologies;

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difficulty in achieving profitable commercial scale from acquired technologies;

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difficulty in maintaining controls, procedures, and policies during the transition and integration;

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disruption of our ongoing business and distraction of our management and associates from other opportunities and challenges due to integration issues;

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inability to retain key technical and managerial personnel of the acquired business;

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inability to retain key customers, vendors, and other business partners of the acquired business;

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inability to achieve the financial and strategic goals for the acquired and combined businesses, as a result of insufficient capital resources or otherwise;

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incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results;

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potential impairment of our relationships with our associates, customers, partners, distributors, or third party providers of technology or products;

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potential failure of the due diligence processes to identify significant issues with product quality, legal and financial liabilities, among other things;

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potential inability to assert that internal controls over financial reporting are effective;

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potential inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay or prevent such acquisitions; and

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potential delay in customer purchasing decisions due to uncertainty about the direction of our product offerings.

Mergers and acquisitions of companies are inherently risky, and ultimately, if we do not complete the integration of acquired businesses successfully and in a timely manner, we may not realize the anticipated benefits of the acquisitions to the extent anticipated, which could adversely affect our business, financial condition, or results of operations.

We may not be able to locate and acquire interests in additional, attractive clean energy power generation facilities from unaffiliated third parties at favorable prices.

Part of our primary business strategy is to develop or acquire clean energy power generation facilities and transfer them to other third party investors. These investors may also acquire clean energy projects that are pre-operational. Competing bids for a power generating facility, including from companies that may have substantially greater capital and other resources than we do, or fewer third-party acquisition opportunities, which could result from, among other things, available power generation facilities having less desirable economic returns or higher risk profiles than we believe suitable for our business plan and investment strategy, could limit the opportunities available to us and cause a material adverse effect on our business, financial condition or results of operations.

We may incur additional costs or delays in completing the construction of certain generation facilities, which could materially adversely affect our business.

Our growth strategy is dependent to a significant degree on acquiring and transferring new solar energy projects to third parties. Our, or such third parties’, failure to complete such projects in a timely manner, or at all, could have a material adverse effect on our growth strategy. The construction of solar energy facilities involves many risks including:

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delays in obtaining, or the inability to obtain, necessary permits and licenses;

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delays and increased costs related to the interconnection of new generation facilities to the transmission system;

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the inability to acquire or maintain land use and access rights;

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the failure to receive contracted third party services;

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supply interruptions;

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work stoppages;

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labor disputes;

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weather interferences;

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unforeseen engineering, environmental and geological problems;

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unanticipated cost overruns in excess of budgeted contingencies;

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failure of contracting parties to perform under contracts, including engineering, procurement and construction contractors; and

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operations and maintenance costs not covered by warranties or that occur following expiration of warranties.

Any of these risks could cause a delay in the completion of projects under development, which could have a material adverse effect on our growth strategy.

Assimilation of the Aevitas division carries with it various risks.

Assuming we consummate the contingent acquisitions and Aevitas becomes an operating subsidiary of ours, it carries with it certain risks, including the need to retain a specialized labor force to service customers, risks of injuries from electrical and mechanical operations and the use of short term and fixed price contracts resulting in cost overruns. These risks may adversely impact the business of Aevitas.

We are exposed to foreign currency exchange risks because certain of our operations are located in foreign countries.

We generate revenues and incur costs in a number of currencies. Changes in economic or political conditions in any of the countries in which we operate could result in exchange rate movement, new currency or exchange controls or other restrictions being imposed on our operations or expropriation. Because our financial results are reported in U.S. dollars, if we generate revenue or earnings in other currencies, the translation of those results into U.S. dollars can result in a significant increase or decrease in the amount of those revenues or earnings.

Risks Related to an Investment in Our Ordinary Shares

The accounting treatment for many aspects of our business is complex and any changes to the accounting interpretations or accounting rules governing our business could have a material adverse effect on our IFRS reported results of operations and financial results.

The accounting treatment for many aspects of our solar energy business is complex, and our future results could be adversely affected by changes in the accounting treatment applicable to our solar energy business. In particular, any changes to the accounting rules regarding the following matters may require us to change the manner in which we operate and finance our solar energy business:

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the classification of sale-leaseback transactions as operating, capital or real estate financing transactions;

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revenue recognition and related timing;

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intercompany contracts;

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operation and maintenance contracts;

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joint venture accounting, including the consolidation of joint venture entities and the inclusion or exclusion of their assets and liabilities on our balance sheet;

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long-term vendor agreements; and

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foreign holding company tax treatment.

We make estimates and assumptions in connection with the preparation of our consolidated financial statements, and any changes to those estimates and assumptions could have a material adverse effect on our results of operations.

In connection with the preparation of our consolidated financial statements, we use certain estimates and assumptions based on current facts, historical experience and various other factors that may affect reported amounts and disclosures. Our most critical accounting estimates are described in the section entitled “ VivoPower’s M anagement's Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies .” While we believe that these estimates and assumptions are reasonable under the circumstances, they are subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to have been incorrect, it could have a material adverse effect on our results of operations, which could cause our stock price to decline.

Any future strategic acquisitions we make, including the proposed Transactions described in this proxy statement/prospectus, could have a dilutive effect on your investment, and if the goodwill, indefinite-lived intangible assets and other long-term assets recorded in connection with such acquisitions become impaired, we would be required to record additional impairment charges, which may be significant.

In the event of any future acquisitions, including the acquisitions described in this proxy statement/prospectus, we may record a portion of the assets we acquire as goodwill, other indefinite-lived intangible assets and finite lived intangible assets. We do not amortize goodwill and indefinite-lived intangible assets, but rather review them for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The recoverability of these assets is dependent on our ability to generate sufficient future earnings and cash flows. Changes in estimates, circumstances or conditions, resulting from both internal and external factors, could have a significant impact on our fair valuation determination, which could then result in a material impairment charge negatively affecting our results of operations.

Future sales of our ordinary shares may depress our stock price.

Future sales of substantial amounts of our ordinary shares in the public market, or the perception that these sales could occur, could adversely affect the price of our ordinary shares and could impair our ability to raise capital through the sale of additional shares.

In the future, we may also issue our securities if we need to raise capital in connection with a capital raise or acquisitions. The amount of ordinary shares issued in connection with a capital raise or acquisition could constitute a material portion of our then-outstanding ordinary shares.

Certain provisions in the Incentive Plan could have a material impact on VivoPower's attractiveness to potential acquirers.

MidCo is expected to adopt the Incentive Plan (see the section entitled “ The Incentive Plan Proposal ” for more detail) following the consummation of the Transactions. As part of the Incentive Plan, employees and directors of VivoPower and its subsidiaries may be granted non-voting shares in MidCo (“Ordinary A Shares”). Various rights will attach to the Ordinary A Shares. These will include rights pursuant to which a majority of VivoPower's shares cannot be acquired unless an offer is also made to acquire the Ordinary A Shares. The consideration for this offer to acquire the Ordinary A Shares must, in aggregate, be equal to 20% of the amount by which the consideration payable to VivoPower's shareholders exceeds U.S. $175 million (increasing by 8% on a compound basis for each calendar year after VivoPower's shares are expected to be listed on Nasdaq). If less than 100% of VivoPower were to be acquired, then this amount will be pro-rated. As such, any potential purchaser of a majority stake in VivoPower would have to make an offer to acquire the Ordinary A Shares. This could have the effect of discouraging potential purchasers from acquiring VivoPower shares.

Risks Related to the Transactions

If ARWA shareholders fail to properly elect to exercise their conversion rights or fail to deliver their shares to the transfer agent after so electing, they will not be entitled to convert their ordinary shares of ARWA into a pro rata portion of the trust account.

ARWA shareholders holding public shares may demand that ARWA convert their shares into a pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the transactions. ARWA shareholders who seek to exercise this conversion right must deliver their stock (either physically or electronically) to ARWA’s transfer agent prior to the vote at the meeting. Any ARWA shareholder who fails to properly elect to exercise such conversion rights or who fails to deliver his stock will not be entitled to convert his or her shares into a pro rata portion of the trust account for conversion of his shares. See the section entitled “ Extraordinary General Meeting of ARWA Shareholders and Extraordinary General Meeting of ARWA Warrantholders — Conversion Rights ” for the procedures to be followed if you wish to convert your shares to cash.

Public shareholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from seeking conversion rights with respect to more than 20% of the public shares.

A public shareholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group,” will be restricted from seeking conversion rights with respect to more than 20% of the public shares. Accordingly, if you hold more than 20% of the public shares and the Contribution Proposal is approved, you will not be able to seek conversion rights with respect to the full amount of your shares and may be forced to hold the shares in excess of 20% or sell them in the open market. ARWA cannot assure you that the value of such excess shares will appreciate over time following a business combination or that the market price of ARWA’s ordinary shares will exceed the per-share conversion price. In order to determine whether a shareholder is acting in concert or as a group with another shareholder, ARWA will require each public shareholder seeking to exercise conversion rights to certify to ARWA whether such shareholder is acting in concert or as a group with any other shareholder. Such certifications, together with other public information relating to stock ownership available to ARWA at that time, such as Schedule 13D, Schedule 13G and Section 16 filings under the Exchange Act, will be the sole basis on which ARWA makes the above-referenced determination. Notwithstanding the foregoing, shareholders may challenge ARWA’s determination as to whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.

Nasdaq may not list VivoPower’s shares on its exchange. Even if listed, VivoPower may be unable to maintain the listing of its securities in the future.

A condition of the Contribution Agreement is that VivoPower’s shares be listed on Nasdaq upon consummation of the Transactions. VivoPower will be required to meet the initial listing requirements to be listed. VivoPower may not be able to meet those initial listing requirements. Even if VivoPower’s securities are so listed, VivoPower may be unable to meet the continued listing requirements in the future and accordingly may be unable to maintain the listing of its securities.

If VivoPower meets the initial listing requirements, but is unable to meet the continued listing requirements and its ordinary shares are subsequently delisted, VivoPower could face significant material adverse consequences, including:

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a limited availability of market quotations for its securities;

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a limited amount of news and analyst coverage for the company;

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a decreased ability to issue additional securities or obtain additional financing in the future; and

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the possible application of UK stamp duty at the rate of 0.5% of the amount of consideration payable by the purchaser on future transfers of VivoPower shares.

ARWA will not have any right to make damage claims against AWN or VivoPower for the breach of any representation, warranty or covenant made by AWN or VivoPower in the Contribution Agreement.

The Contribution Agreement provides that all of the representations, warranties and covenants of the parties contained therein shall not survive the closing of the Transactions, except for those covenants contained therein that by their terms apply or are to be performed in whole or in part after the closing. Accordingly, there are no remedies available to the parties with respect to any breach of the representations, warranties, covenants or agreements of the parties to the Contribution Agreement after the closing, except for covenants to be performed in whole or in part after the closing. As a result, ARWA will have no remedy available to it if the Transactions are consummated and ARWA later learns of a breach of any of the representations, warranties and covenants made by AWN or VivoPower at the time of the Transactions.

The consummation of the Transactions is conditioned upon the approval of the AWN shareholders.

The Contribution Agreement provides that the consummation of the Transactions is conditioned upon the AWN Shareholder Approval. Absent such approval, even if the shareholders of ARWA approve the Contribution Proposal and all of the other conditions to the Transactions are satisfied or waived, the parties to the Contribution Agreement will not complete the Contribution and the subsequent distribution of VivoPower ordinary shares to the ARWA shareholders and warrantholders. Although the officers and directors of ARWA are also shareholders of AWN, under applicable laws, rules and regulations, they may not be permitted to vote their AWN shares on certain of the proposals to be presented to the AWN shareholders as part of the AWN Shareholder Approval. Accordingly, there can be no assurance that the AWN Shareholder Approval will be obtained.

ARWA’s current directors and executive officers and their affiliates own ordinary shares, warrants and rights that will be worthless and have incurred reimbursable expenses that may not be reimbursed or repaid if the transactions are not approved. Such interests may have influenced their decision to approve the business combination with VivoPower.

ARWA’s officers and directors have interests different from those of ARWA’s public shareholders. ARWA’s officers and directors and/or their affiliates beneficially own insider shares and private units that they purchased prior to, or simultaneously with, ARWA’s initial public offering. ARWA’s executive officers, directors and their affiliates have no redemption rights with respect to these securities in the event a business combination is not effected in the required time period. Therefore, if the Transactions or another business combination are not approved within the required time period, such securities held by such persons will be worthless. Furthermore, ARWA’s officers, directors, initial shareholders and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on ARWA’s behalf, such as identifying and investigating possible business targets and business combinations. These expenses will be repaid upon completion of the business combination with VivoPower. However, if ARWA fails to consummate the business combination, they will not have any claim against the trust account for reimbursement. Accordingly, ARWA may not be able to reimburse these expenses if the transactions are not completed. As of July 31, 2016, ARWA’s officers, directors, initial shareholders and their affiliates had not incurred any unpaid reimbursable expenses, although they may incur such expenses in the future. AWN will also sell VivoPower shares to VivoPower depending on the number of ARWA public shareholders seeking conversion as described herein. See the section entitled “ The Contribution Proposal — Interests of ARWA’s Directors and Officers in the Transactions .” Accordingly, ARWA’s shareholders will not have the benefit of a truly independent board of directors approving the proposed Transactions.

The financial interests of ARWA’s directors may have influenced their decision to approve the Transactions. In considering the recommendations of ARWA’s board of directors to vote for the Contribution Proposal and other proposals, its shareholders should consider these interests.

ARWA’s chairman of the board and chief executive officer is liable to ensure that proceeds of the trust are not reduced by vendor claims in the event the business combination is not consummated. Such liability may have influenced his decision to approve the business combination with VivoPower.

If the Transactions or another business combination are not consummated by ARWA within the required time period, Kevin Chin, ARWA’s chairman and chief executive officer, will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by ARWA for services rendered or contracted for or products sold to ARWA, but only if such a vendor or target business has not executed a waiver agreement. If ARWA consummates a business combination, on the other hand, ARWA will be liable for all such claims. Neither ARWA nor Mr. Chin has any reason to believe that Mr. Chin will not be able to fulfill his indemnity obligations to ARWA. Mr. Chin will also be obligated to fund liquidation expenses if the funds outside of the trust fund are not sufficient for such purposes. See the section entitled “ Other Information Related to ARWA — ARWA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” for further information.

These personal obligations of Mr. Chin may have influenced ARWA’s board of directors’ decision to approve the business combination with VivoPower and to continue to pursue such business combination. In considering the recommendations of ARWA’s board of directors to vote for the Contribution Proposal and other proposals, ARWA’s shareholders should consider these interests.

The exercise of ARWA’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the business combination may result in a conflict of interest when determining whether such changes to the terms of the business combination or waivers of conditions are appropriate and in ARWA’s shareholders’ best interest.

In the period leading up to the closing of the Transactions, events may occur that, pursuant to the Contribution Agreement, would require ARWA to agree to amend the Contribution Agreement, to consent to certain actions taken by AWN or VivoPower or to waive rights that ARWA is entitled to under the Contribution Agreement. Such events could arise because of changes in the course of VivoPower’s business, a request by VivoPower to undertake actions that would otherwise be prohibited by the terms of the Contribution Agreement or the occurrence of other events that would have a material adverse effect on VivoPower’s business and would entitle ARWA to terminate the Contribution Agreement. In any of such circumstances, it would be at ARWA’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors described in the preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he or they may believe is best for ARWA and what he or they may believe is best for himself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, ARWA does not believe there will be any changes or waivers materially adverse to ARWA’s shareholders that ARWA’s directors and officers would be likely to make after shareholder approval of the Contribution Proposal has been obtained. While certain changes could be made without further shareholder approval, ARWA will circulate a new or amended proxy statement/prospectus and resolicit ARWA’s shareholders if changes to the terms of the Transactions that would have a material impact on its shareholders are required prior to the vote on the Contribution Proposal.

Third parties may bring claims against ARWA and, as a result, the proceeds held in the trust account could be reduced and any per-share liquidation price received by shareholders could be less than $10.20 per share.

Under the terms of ARWA’s second amended and restated memorandum and articles of association, ARWA must complete the business combination with VivoPower or another business combination by November 6, 2016 (or such later date as may be approved by ARWA shareholders), or it will trigger ARWA’s automatic winding up, dissolution and liquidation pursuant to its second amended and restated memorandum and articles of association. If ARWA is forced to liquidate the trust account, ARWA anticipates that it would distribute to its public shareholders the amount in the trust account calculated as of the date that is two days prior to the distribution date (including any accrued interest). In such event, third parties may bring claims against ARWA. Although ARWA has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective target businesses it has directly negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of ARWA’s public shareholders. If ARWA is unable to complete a business combination within the required time period, Kevin Chin has agreed that he will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by ARWA for services rendered or contracted for or products sold to ARWA, but only if such a vendor or prospective target business does not execute such a waiver. However, he may not be able to meet such obligation. Therefore, the per-share distribution from the trust account in such a situation may be less than $10.20 due to such claims.

Additionally, if ARWA is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, or if ARWA otherwise enters compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its shareholders. To the extent any bankruptcy claims deplete the trust account, ARWA may not be able to return to its public shareholders at least $10.20.

ARWA’s shareholders may be held liable for claims by third parties against ARWA to the extent of distributions received by them.

If ARWA is unable to complete the business combination with VivoPower or another business combination within the required time period, it will trigger ARWA’s automatic winding up, dissolution and liquidation pursuant to its second amended and restated memorandum and articles of association. If ARWA is forced to liquidate the trust account, ARWA anticipates that it would distribute to its public shareholders the amount in the trust account calculated as of the date that is two days prior to the distribution date (including any accrued interest). Prior to such distribution, ARWA would be required to assess all claims that may be potentially brought against it by its creditors for amounts they are actually owed and make provision for such amounts, as creditors take priority over the public shareholders with respect to amounts that are owed to them. ARWA cannot assure you that it will properly assess all claims that may be potentially brought against ARWA. As such, as a matter of U.S. law, ARWA’s shareholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of its shareholders may extend well beyond the third anniversary of the date of distribution. Accordingly, ARWA cannot assure you that third parties will not seek to recover from its shareholders amounts owed to them by ARWA.

If ARWA is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by ARWA’s shareholders. Furthermore, because ARWA intends to distribute the proceeds held in the trust account to its public shareholders promptly after the expiration of the time period to complete a business combination, this may be viewed or interpreted as giving preference to its public shareholders over any potential creditors with respect to access to or distributions from its assets. Furthermore, ARWA’s directors may be viewed as having breached their fiduciary and/or may have acted in bad faith, thereby exposing themselves and the company to claims of damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. ARWA is unable to assure you that claims will not be brought against it for these reasons.

In addition, in the circumstances described above, ARWA’s shareholders could be subject to claims arising under Cayman Islands law by any liquidator appointed to ARWA in the Cayman Islands, or by a creditor of ARWA, seeking to set aside or otherwise require ARWA's shareholders to repay to ARWA any distributions received by them.

Because AWN will be paid a fee for services rendered by it to VivoPower to consummate the Transactions, each person who purchased Public Shares in the initial public offering and still held such shares upon learning of this fact may have securities law claims against ARWA for rescission or damages.

You should be aware that ARWA’s prospectus for its initial public offering and the insider letters that each of the initial shareholders entered into in connection with the initial public offering indicated that no compensation of any kind (including finder’s, consulting or other similar fees) would be paid to any of ARWA’s then existing officers, directors, shareholders, or any of their affiliates, prior to, or for any services they rendered in order to effectuate, the consummation of an initial business combination (regardless of the type of transaction that it was). However, as indicated above, AWN will be paid a fee for services rendered by it to VivoPower to consummate the Transactions. Accordingly, each person who purchased Public Shares in the initial public offering and still held such shares upon learning of this fact may have securities law claims against ARWA for rescission (under which a successful claimant has the right to receive the total amount paid for his or her securities pursuant to an allegedly deficient prospectus, plus interest and less any income earned on the securities, in exchange for surrender of the securities) or damages (compensation for loss on an investment caused by alleged material misrepresentations or omissions in the sale of a security). Such claims may entitle shareholders asserting them to as much as $10.00 or more per share, based on the initial offering price of the units comprised of shares, warrants and rights, less any amount received from sale of the original warrants or rights, plus interest from the date of ARWA’s initial public offering (which, in the case of holders of Public Shares, may be more than the pro rata share of the trust account to which they are entitled on conversion or liquidation).

Activities taken by existing ARWA shareholders to increase the likelihood of approval of the Contribution Proposal and other proposals could have a depressive effect on ARWA’s shares.

At any time prior to the extraordinary general meetings, during a period when they are not then aware of any material nonpublic information regarding ARWA or its securities, the ARWA initial shareholders, AWN or AWN’s securityholders and/or their respective affiliates, subject to all applicable laws, may purchase shares or warrants from institutional and other investors who vote, or indicate an intention to vote, against the Contribution Proposal or the Warrant Amendment Proposal, or who indicate an intention to convert their shares, or execute agreements to purchase such shares or warrants from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire ordinary shares or warrants of ARWA or vote their shares or warrants in favor of the Contribution Proposal or Warrant Amendment Proposal and not exercise their conversion rights. The purpose of such share or warrant purchases and other transactions would be to increase the likelihood of satisfaction of the requirement that the holders of a majority of the ordinary shares, being entitled to do so, vote at the meeting to approve the Contribution Proposal vote in its favor or to decrease the number of public shares that were being converted to cash, and to increase the likelihood of satisfaction of the requirement that the holders of a majority of the outstanding warrants vote to approve the warrant amendment. Entering into any such arrangements may depress the market price of ARWA ordinary shares or warrants. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares or warrants at a price lower than market and may therefore be more likely to sell the shares or warrants he owns, either prior to or immediately after the extraordinary general meeting.

The unaudited pro forma financial information included elsewhere in this joint proxy statement/prospectus may not be indicative of what the combined company’s actual financial position or results of operations would have been.

The unaudited pro forma financial information in this joint proxy statement/prospectus is presented for illustrative purposes only, has been prepared based on a number of assumptions and is not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the business combination been completed on the dates indicated. The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies or revenue enhancements that the combined companies may achieve as a result of the business combination or the costs to combine the operations of ARWA and VivoPower or the costs necessary to achieve these cost savings, operating synergies and revenue enhancements. See the section entitled “ Unaudited Pro Forma Consolidated Combined Financial Statements ”.

If either of the adjournment proposals for the shareholder and warrantholder meetings is not approved, and an insufficient number of votes have been obtained to approve the consummation of the Transactions or the Warrant Amendment Proposal, ARWA’s board of directors will not have the ability to adjourn either extraordinary general meeting to a later date in order to solicit further votes, and, therefore, the Transactions and/or Warrant Amendment Proposal will not be approved.

ARWA’s board of directors is seeking approval to adjourn the extraordinary general meetings to a later date or dates if, at the extraordinary general meetings, based upon the tabulated votes, there are insufficient votes to approve the consummation of the Transactions and/or the warrant amendment. If either adjournment proposal is not approved, ARWA’s board will be unable to adjourn the extraordinary general meetings to a later date and, therefore, will not have more time to solicit votes to approve the consummation of the Transactions or the Warrant Amendment Proposal. In such event, the Transactions and/or warrant amendment would not be completed.

As a foreign private issuer, we are permitted to report our financial results under IFRS, are exempt from certain rules under the U.S. securities laws and are permitted to file less information with the SEC than a U.S. company and our ordinary shares are not listed, and we do not intend to list our shares, on any market in England, our country of incorporation. This may limit the information available to holders of our ordinary shares.

We are a "foreign private issuer", as defined in the SEC's rules and regulations and, consequently, we are not subject to all of the disclosure requirements applicable to public companies organized within the United States. For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act. In addition, our officers and directors are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies and will not be required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange Act. We cannot predict if investors will find our ordinary shares less attractive because of these exemptions. If some investors find our ordinary shares less attractive, there may be a less active trading market for our ordinary shares and our share price may be more volatile.

Furthermore, our shares are not listed and we do not currently intend to list our shares on any market in the United Kingdom (we are incorporated under the laws of England). As a result, we are not subject to the reporting and other requirements of companies listed in the United Kingdom. Accordingly, there will be less publicly available information concerning our company than there would be if we were a public company organized in the United States.

As a foreign private issuer, we are permitted to follow certain home country corporate governance practices in lieu of certain requirements under the Nasdaq listing standards. This may afford less protection to holders of our ordinary shares than U.S. regulations.

As a foreign private issuer whose shares are expected to be listed on Nasdaq, we are permitted to follow English corporate law and the Companies Act 2006 ("Companies Act") with regard to certain aspects of corporate governance in lieu of certain requirements under the Nasdasq listing standards.

A foreign private issuer must disclose in its annual reports filed with the SEC each requirement under the Nasdaq listing standards with which it does not comply, followed by a description of its applicable home country practice. Our home country practices differ in significant respects from the corporate governance requirements applicable to U.S. domestic issuers listed on Nasdaq and may, therefore, afford less protection to holders of our ordinary shares.

We may rely on exemptions available under the Nasdaq listing standards to a foreign private issuer and follow our home country practices in the future, and as a result, you may not be provided with the same corporate governance requirements of the Nasdaq listing standards.

We may lose our foreign private issuer status in the future, which could result in significant additional cost and expense.

In order to maintain our current status as a foreign private issuer, either (1) a majority of voting power of our shares must be either directly or indirectly owned of record by non-residents of the United States or (2) (a) a majority of our executive officers or directors must not be U.S. citizens or residents, (b) more than 50% of our assets cannot be located in the United States, and (c) our business must be administered principally outside the United States. If we lost this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We would also be required under current SEC rules to prepare our financial statements in accordance with U.S. GAAP and modify certain of our corporate governance practices in accordance with various SEC rules and the Nasdaq listing standards. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be higher than the cost we would incur as a foreign private issuer. As a result, a loss of foreign private issuer status could potentially increase our legal and financial compliance costs. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

U.S. holders of our shares could be subject to material adverse tax consequences if we are considered a "passive foreign investment company" for U.S. federal income tax purposes.

We do not believe that we are a passive foreign investment company, and we do not expect to become a passive foreign investment company. However, our status in any taxable year will depend on our assets, income and activities in each year, and because this is a factual determination made annually after the end of each taxable year, there can be no assurance that we will not be considered a passive foreign investment company for the current taxable year or any future taxable years. If we were a passive foreign investment company for any taxable year while a taxable U.S. holder held our shares, such U.S. holder would generally be taxed at ordinary income rates on any sale of our shares and on any dividends treated as "excess distributions". An interest charge also generally would apply based on any taxation deferred during such U.S. holder's holding period in the shares.

Risks Related to Investing in an English Company

Our shares are not listed and we do not currently intend to list our shares on any market in the United Kingdom, our country of incorporation. As a result, we are not subject to the reporting and other requirements of companies listed in the United Kingdom. Accordingly, there will be less publicly available information concerning our company than there would be if we were a public company organized in the United States.

In addition, we report our financial statements under IFRS. There have been and there may in the future be certain significant differences between IFRS and generally accepted accounting principles adopted in the United States (“U.S. GAAP”), including differences related to revenue recognition, share-based compensation expense, income tax and earnings per share. As a result, our financial information and reported earnings for historical or future periods could be significantly different if they were prepared in accordance with U.S. GAAP. As a result, you may not be able to meaningfully compare our financial statements under IFRS with those companies that prepare financial statements under U.S. GAAP.

Provisions contained in our articles of association and under the laws of the United Kingdom may frustrate or prevent an attempt to obtain control of us.

Provisions in our articles of association, as amended and restated in connection with this offering, may have the effect of delaying or preventing a change of control or changes in our management. Our amended and restated articles of association include provisions that:

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specify that general meetings of our shareholders can be called only by our board of directors, the chair of our board of directors, or our chief executive officers (or otherwise by shareholders in accordance with the Companies Act); and

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provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though the number of directors may be less than a quorum.

Provisions of the laws of England may also have the effect of delaying or preventing a change of control or changes in our management. The Companies Act includes provisions that:

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require that any action to be taken by our shareholders be effected at a duly called general meeting (including the annual general meeting) and not by written consent; and

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require the approval of the holders of at least 75% of our outstanding shares to amend the provisions of our articles of association.

These provisions may frustrate or prevent any attempts by our shareholders to replace or remove our current management by making it more difficult for shareholders to replace members of our board of directors, which is responsible for appointing the members of our management.

In addition, because we are a public limited company whose registered office is in the United Kingdom, we may become subject to the UK City Code on Takeovers and Mergers ("Takeover Code") which is issued and administered by the UK Panel on Takeovers and Mergers ("Takeover Panel"). Although we believe that the Takeover Code does not apply to us, as we consider that we fall outside of the types of company the Takeover Panel specifies it regulates (set out in section 3 (a) of the introduction to the Takeover Code) the Takeover Panel will ultimately be responsible for determining whether this is the case. If at the time of a takeover offer the Takeover Panel determines that the Takeover Code is applicable to us, we would be subject to a number of rules and restrictions, including but not limited to the following: (1) our ability to enter into deal protection arrangements with a bidder would be extremely limited; (2) we may not, without the approval of our shareholders, be able to perform certain actions that could have the effect of frustrating an offer, such as issuing shares or carrying out acquisitions or disposals; and (3) we would be obliged to provide equality of information to all bona-fide competing bidders.

The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation.

We are incorporated under English law. The rights of holders of ordinary shares are governed by English law, including the provisions of the Companies Act, and by our articles of association. These rights differ in certain respects from the rights of shareholders in typical U.S. corporations.

Shareholders in certain jurisdictions may not be able to exercise their pre-emptive rights if we increase our share capital.

Under the Companies Act, our shareholders generally have the right to subscribe and pay for a sufficient number of our shares to maintain their relative ownership percentages prior to the issuance of any new shares in exchange for cash consideration. Shareholders in certain jurisdictions may not be able to exercise their pre-emptive rights unless securities laws have been complied with in such jurisdictions with respect to such rights and the related shares, or an exemption from the requirements of the securities laws of these jurisdictions is available. We will also consider the possibility of a secondary listing on the ASX in due course, but that aside we currently do not intend to register our ordinary shares under the laws of any jurisdiction other than the United States, and no assurance can be given that an exemption from the securities laws requirements of other jurisdictions will be available to shareholders in these jurisdictions. To the extent that such shareholders are not able to exercise their pre-emptive rights, the pre-emptive rights would lapse and the proportional interests of such shareholders would be reduced.

Further, the Companies Act provides that in certain circumstances the pre-emptive rights available to shareholders can be overridden, including where there is an issue of shares for non-cash consideration or the disapplication of the pre-emptive rights is approved by the holders of at least 75% of our outstanding shares.

U.S. investors may have difficulty enforcing civil liabilities against us, our directors or executive officers.

Under English law, a director owes various statutory and fiduciary duties to us, and not, except in certain limited circumstances, to shareholders. This means that under English law generally we, rather than the shareholders, are the proper claimant in an action in respect of a wrong done to us by a director. Notwithstanding this general position, the Companies Act provides that a court may allow a shareholder to bring a derivative claim, which is an action in respect of and on behalf of us, in respect of a cause of action arising from a director's negligence, default, breach of duty or breach of trust. The ability to bring a derivative claim is, however, subject to compliance with a number of procedural requirements which may in practice be difficult for shareholders to comply with.

We are a public limited company incorporated under the laws of England. Certain of our directors and executive officers and experts named in this prospectus reside outside the United States. In addition, a substantial portion of our assets and a substantial portion of the assets of such directors and executive officers, are located outside the United States. As a result, it may be difficult for an investor to serve legal process on us or our directors and executive officers or have any of them appear in a U.S. court.

It may not be possible to bring proceedings or enforce a judgment of a U.S. court in respect of civil liabilities predicated on the U.S. federal securities laws in England. The English courts will not enforce, either directly or indirectly, a penal, revenue or other public law of a foreign state. In addition, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in England. An award of damages is usually considered to be punitive if it does not seek to compensate the claimant for loss or damage suffered and is instead intended to punish the defendant. In addition to public policy aspects of enforcement, the enforceability of any judgment in England will depend on the particular facts of the case such as the nature of the judgment and whether the English court considered the U.S. court to have had jurisdiction. It will also depend on the laws and treaties in effect at that time. The United States and the United Kingdom do not currently have a treaty or convention providing for the reciprocal recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. Therefore, to enforce a judgment of a U.S. court, the party seeking to enforce the judgment must bring an action at common law in respect of the amount due under the judgment.

FORWARD-LOOKING STATEMENTS

Some of the information in this proxy statement/prospectus constitutes forward-looking statements within the definition of the Private Securities Litigation Reform Act of 1995. You can identify these statements by forward-looking words such as “may,” “expect,” “anticipate,” “contemplate,” “believe,” “estimate,” “forecast,” “intends,” and “continue” or similar words. You should read statements that contain these words carefully because they:

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discuss future expectations;

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contain projections of future results of operations or financial condition; or

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state other “forward-looking” information.

There may be events in the future that ARWA is not able to predict accurately or over which it has no control. The risk factors and cautionary language discussed in this proxy statement/prospectus provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by ARWA or VivoPower in such forward-looking statements, including among other things:

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the number and percentage of its public shareholders voting against the Contribution Proposal and/or seeking conversion;

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the occurrence of any event, change or other circumstances that could give rise to the termination of the Contribution Agreement;

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the ability to maintain the listing of VivoPower’s ordinary shares on Nasdaq following the business combination;

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changes adversely affecting the business in which VivoPower is engaged;

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management of growth;

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general economic conditions;

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VivoPower’s business strategy and plans; and

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the result of future financing efforts.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus.

All forward-looking statements included herein attributable to any of ARWA, VivoPower or any person acting on either party’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, ARWA and VivoPower undertake no obligations to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events.

Before a shareholder or warrantholder grants its proxy or instructs how its vote should be cast or vote on the Contribution Proposal, Plan of Dissolution Proposal, the Incentive Plan Proposal, Warrant Amendment Proposal, the Shareholder Adjournment Proposal or the Warrantholder Adjournment Proposal, as applicable, it should be aware that the occurrence of the events described in the “ Risk Factors ” section and elsewhere in this proxy statement/prospectus may adversely affect ARWA and/or VivoPower.

EXTRAORDINARY GENERAL MEETING OF ARWA SHAREHOLDERS AND EXTRAORDINARY GENERAL MEETING OF ARWA WARRANTHOLDERS

General

ARWA is furnishing this proxy statement/prospectus to its shareholders and warrantholders as part of the solicitation of proxies by its board of directors for use at the extraordinary general meeting of ARWA shareholders and extraordinary meeting of ARWA warrantholders to be held on [●], 2016, and at any adjournment or postponement thereof. This proxy statement/prospectus provides you with information you need to know to be able to vote or instruct your vote to be cast at the extraordinary general meeting of shareholders or warrantholders, as applicable.

Date, Time and Place

The extraordinary general meeting of shareholders will be held on [●], 2016, at [●] a.m., eastern time, at the offices of Graubard Miller, ARWA’s counsel, at The Chrysler Building, 405 Lexington Avenue, 11 ^th Floor, New York, New York 10174, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

The extraordinary general meeting of warrantholders will be held on [●], 2016, at [●] a.m., eastern time, at the offices of Graubard Miller, ARWA’s counsel, at The Chrysler Building, 405 Lexington Avenue, 11 ^th Floor, New York, New York 10174, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.

Purpose of the Extraordinary General Meeting of Shareholders

At the extraordinary general meeting of shareholders, ARWA is asking holders of ARWA ordinary shares to:

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consider and vote upon a proposal to adopt the Contribution Agreement and approve the Transactions contemplated by the Contribution Agreement (Contribution Proposal);

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consider and vote upon a proposal to approve the dissolution of ARWA (Dissolution Proposal);

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consider and vote upon a proposal to approve the Incentive Plan (Incentive Plan Proposal); and

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consider and vote upon a proposal to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that, based upon the tabulated votes at the time of the extraordinary general meeting, ARWA would not have been authorized to consummate the Transactions or the closing conditions under the Contribution Agreement would not have been met (Shareholder Adjournment Proposal).

Purpose of the Extraordinary General Meeting of Warrantholders

At the extraordinary general meeting of warrantholders, ARWA is asking holders of ARWA warrants to:

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consider and vote upon an amendment to the warrant agreement that governs all of ARWA’s warrants to provide that, upon consummation of the Transactions, each outstanding ARWA warrant will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower (Warrant Amendment Proposal); and

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consider and vote upon a proposal to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that, based upon the tabulated votes at the time of the extraordinary general meeting, ARWA would not have been authorized to approve the Warrant Amendment Proposal (Warrantholder Adjournment Proposal).

Recommendation of ARWA Board of Directors

ARWA’s board of directors has unanimously determined that the Contribution Proposal is fair to and in the best interests of ARWA and its shareholders; has unanimously approved the Contribution Proposal; unanimously recommends that shareholders vote “FOR” the Contribution Proposal; unanimously recommends that shareholders vote “FOR” the Dissolution Proposal; unanimously recommends that shareholders vote “FOR” the Incentive Plan Proposal; and unanimously recommends that shareholders vote “FOR” an Shareholder Adjournment Proposal if one is presented to the meeting.

ARWA’s board of directors has unanimously determined that the Warrant Amendment Proposal is fair to and in the best interests of ARWA and its warrantholders; has unanimously approved the Warrant Amendment Proposal; unanimously recommends that warrantholders vote “FOR” the Warrant Amendment Proposal; and unanimously recommends that warrantholders vote “FOR” a Warrantholder Adjournment Proposal if one is presented to the meeting.

Record Date; Who is Entitled to Vote

ARWA has fixed the close of business on [●] , 2016, as the “record date” for determining ARWA shareholders and warrantholders entitled to notice of and to attend and vote at the extraordinary general meetings. As of the close of business on the record date, there were 10,859,000 ordinary shares of ARWA outstanding and entitled to vote and 8,789,000 warrants of ARWA outstanding and entitled to vote. Each ordinary share of ARWA is entitled to one vote per share at the extraordinary general meeting of shareholders and each warrant of ARWA is entitled to one vote per warrant at the extraordinary general meeting of warrantholders.

Quorum

The presence, in person or by proxy, of a majority of all the outstanding ordinary shares entitled to vote constitutes a quorum at the extraordinary general meeting of shareholders.

Abstentions and Broker Non-Votes

Proxies that are marked “abstain” and proxies relating to “street name” shares that are returned to ARWA but marked by brokers as “not voted” will be treated as shares present for purposes of determining the presence of a quorum on all matters, but will not count towards the voting thresholds. The latter will not be treated as shares entitled to vote on the matter as to which authority to vote is withheld from the broker. If a shareholder or warrantholder does not give the broker voting instructions, under applicable self-regulatory organization rules, its broker may not vote its shares on “non-routine” proposals, such as the Contribution Proposal and the Warrant Amendment Proposal.

Vote Required

The approval of the Contribution Proposal will require the affirmative vote of holders of a majority of the ordinary shares of ARWA who, being entitled to do so, vote at the extraordinary general meeting. The approval of the Dissolution Proposal will require a special resolution (being a resolution passed by a majority of at least two-thirds of members who, being entitled to do so, vote at the extraordinary general meeting). The approval of each of the Incentive Plan Proposal and the Shareholder Adjournment Proposal, if presented, will require an ordinary resolution (a resolution passed by a majority of members who, being entitled to do so, vote at the extraordinary general meeting). Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not deemed voted and will have no effect on the proposals.

The Warrant Amendment Proposal will require the affirmative vote of the holders of a majority of the then outstanding warrants. Accordingly, abstentions and broker non-votes will have the same effect as a vote against such proposal. The approval of the Warrantholder Adjournment Proposal, if presented, will require the affirmative vote of the holders of a majority of the then outstanding warrants present and entitled to vote at the meeting. Abstentions are deemed entitled to vote on such proposal. Therefore, they have the same effect as a vote against the proposal. Broker non-votes are not deemed entitled to vote on such proposals and, therefore, they will have no effect on such proposal.

The Dissolution Proposal, the Incentive Plan Proposal and the Warrant Amendment Proposal are each conditioned on the Contribution Proposal. If the Contribution Proposal is not approved, the Dissolution Proposal and the Incentive Plan Proposal will not be presented at the meeting and the Warrant Amendment Proposal will have no effect, even if the latter proposal is approved by the requisite vote. In addition, the Transactions are conditioned upon approval of the Warrant Amendment Proposal. Unless the applicable condition is waived, the Transactions will not be consummated if the Warrant Amendment Proposal is not approved.

Voting Your Shares or Warrants

Each ordinary share of ARWA that you own in your name entitles you to one vote on each of the proposals for the extraordinary general meeting of shareholders. Each warrant of ARWA that you own in your name entitles you to one vote on each of the proposals for the extraordinary general meeting of warrantholders. Your one or more proxy cards shows the number of ordinary shares and/or warrants of ARWA, as applicable, that you own. If your shares and/or warrants are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares and/or warrants you beneficially own are properly counted.

There are two ways to vote your ARWA ordinary shares and/or warrants at the extraordinary general meetings:

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You Can Vote By Signing and Returning the Enclosed Proxy Card . If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares and/or warrants as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares and/or warrants, your shares and/or warrants will be voted as recommended by ARWA’s board “FOR” the Contribution Proposal, the Dissolution Proposal, the Incentive Plan Proposal, the Shareholder Adjournment Proposal, if presented, the Warrant Amendment Proposal and the Warrantholder Adjournment Proposal, if presented, as applicable. Votes received after a matter has been voted upon at the extraordinary general meetings will not be counted.

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You Can Attend the Extraordinary General Meetings and Vote in Person . You will receive a ballot when you arrive. However, if your shares and/or warrants are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way ARWA can be sure that the broker, bank or nominee has not already voted your shares and/or warrants.

Revoking Your Proxy

If you are a shareholder or warrantholder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

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you may send another proxy card with a later date;

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you may notify Morrow Sodali, ARWA’s proxy solicitor, in writing before the extraordinary general meeting that you have revoked your proxy; or

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you may attend the extraordinary general meeting, revoke your proxy, and vote in person, as indicated above.

Who Can Answer Your Questions About Voting Your Shares

If you are a shareholder and/or warrantholder and have any questions about how to vote or direct a vote in respect of your shares and/or warrants, you may call Morrow Sodali, ARWA’s proxy solicitor, at (800) 662-5200 (banks and brokers can call collect at (203) 658-9400).

Conversion Rights

Holders of public shares may seek to convert their shares, regardless of whether they vote for or against the Contribution Proposal. Any shareholder holding public shares as of the record date who votes in favor of or against the Contribution Proposal may demand that ARWA convert such shares into a full pro rata portion of the trust account (which was approximately $10.20 per share as of August 16, 2016, after giving effect to the withdrawal by ARWA of all interest earned on the trust account for payment of its tax liabilities and for working capital), calculated as of two business days prior to the anticipated consummation of the Transactions. If a holder properly seeks conversion as described in this section and the Transactions are consummated, ARWA will convert these shares into a pro rata portion of funds deposited in the trust account and the holder will no longer own these shares following the Transactions.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or more of the shares of the public shares. Accordingly, all public shares in excess of 20% held by a public shareholder will not be converted to cash.

ARWA’s initial shareholders will not have conversion rights with respect to any ordinary shares owned by them, directly or indirectly.

ARWA shareholders who seek to convert their public shares must affirmatively vote for or against the Contribution Proposal. ARWA shareholders who do not vote with respect to the Contribution Proposal, including as a result of an abstention or a broker non-vote, may not convert their shares into cash. Holders may demand conversion either by checking the box on their proxy card or by submitting their request in writing to Morrow Sodali, ARWA’s proxy solicitor. Any such demand must be made no later than the close of the vote on the Contribution Proposal. Holders demanding conversion must deliver their shares, either physically or electronically using Depository Trust Company’s DWAC system, to ARWA’s transfer agent prior to the vote at the meeting. If you hold the shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered (either physically or electronically) in accordance with these procedures will not be converted into cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $45 and it would be up to the broker whether or not to pass this cost on to the converting shareholder. In the event the Transactions are not consummated, this may result in an additional cost to shareholders for the return of their shares.

Any request to convert such shares, once made, may be withdrawn at any time up to the vote on the proposed transactions. Furthermore, if a holder of a public share delivered its certificate in connection with an election of its conversion and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the transfer agent return the certificate (physically or electronically).

If the Transactions are not approved or completed for any reason, then ARWA’s public shareholders who elected to exercise their conversion rights will not be entitled to convert their shares into a full pro rata portion of the trust account, as applicable. In such case, ARWA will promptly return any shares delivered by public holders.

The closing price of ARWA ordinary shares on August 16, 2016 was $10.12. The cash held in the trust account on such date was approximately $84.5 million, or $10.20 per public share (after giving effect to the withdrawal by ARWA of all interest earned on the trust account for payment of its tax liabilities and for working capital). Prior to exercising conversion rights, shareholders should verify the market price of ARWA ordinary shares, as they may receive higher proceeds from the sale of their ordinary shares in the public market than from exercising their conversion rights if the market price per share is higher than the conversion price. ARWA cannot assure its shareholders that they will be able to sell their ordinary shares of ARWA in the open market, even if the market price per share is higher than the conversion price stated above, as there may not be sufficient liquidity in its securities when its shareholders wish to sell their shares.

If a holder of public shares exercises its conversion rights, then it will be exchanging its ARWA ordinary shares for cash and will no longer own those shares. You will be entitled to receive cash for these shares only if you affirmatively vote for or against the Contribution Proposal, properly demand conversion no later than the close of the vote on the Contribution Proposal, and deliver your share certificate (either physically or electronically) to ARWA’s transfer agent prior to the vote at the meeting, and the Transactions are consummated.

Appraisal Rights

Neither shareholders, warrantholders nor rights holders of ARWA have appraisal rights in connection the transactions.

Proxy Solicitation Costs

ARWA is soliciting proxies on behalf of its board of directors. ARWA will bear all of the costs of the solicitation.

This solicitation is being made by mail but also may be made by telephone or in person. ARWA and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. ARWA also has hired Morrow Sodali to assist in the proxy solicitation process. ARWA will pay that firm a fee of $25,000 plus disbursements. Such fee will be paid with funds from outside the trust account.

ARWA will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. ARWA will reimburse them for their reasonable expenses.

ARWA Initial Shareholders

As of the record date, ARWA’s initial shareholders beneficially owned and were entitled to vote an aggregate of 2,070,000 insider shares that were issued prior to ARWA’s initial public offering. The initial shareholders also purchased an aggregate of 509,000 private units simultaneously with the consummation of ARWA’s initial public offering. The insider shares and the ordinary shares underlying the private units held by the ARWA initial shareholders currently constitute approximately 23.7% of the outstanding ordinary shares of ARWA. In addition, John C. Moore, a director of ARWA, purchased 10,000 public units in ARWA’s initial public offering. In connection with the initial public offering, the initial shareholders agreed to vote the insider shares, the shares included in the private units as well as any ordinary shares acquired in the initial public offering or the aftermarket, in favor of the Contribution Proposal. The ARWA initial shareholders have also indicated that they intend to vote their shares in favor of all other proposals being presented at the meetings. The insider shares and private units have no right to participate in any redemption distribution and will be worthless if no business combination is effected by ARWA. In connection with the initial public offering, the ARWA initial shareholders entered into an escrow agreement pursuant to which their insider shares are held in escrow and may not be transferred (subject to limited exceptions) until, with respect to 50% of the insider shares, the earlier of one year after the date of the consummation of an initial business combination and the date on which the closing price of our ordinary shares exceeds $12.50 per share for any 20 trading days within a 30-trading day period following the consummation of an initial business combination and, with respect to the remaining 50% of the insider shares, one year after the date of the consummation of an initial business combination, or earlier in each case if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. Following consummation of the Transactions, the shares of VivoPower that the ARWA initial shareholders receive in return for their insider shares will continue to be subject to the foregoing escrow provisions.

At any time prior to the applicable extraordinary general meeting, during a period when they are not then aware of any material nonpublic information regarding ARWA or its securities, the ARWA initial shareholders, AWN or AWN’s securityholders and/or their respective affiliates, subject to all applicable laws, may purchase shares or warrants from institutional and other investors who vote, or indicate an intention to vote, against the Contribution Proposal or the Warrant Amendment Proposal, or who indicate an intention to convert their shares, or execute agreements to purchase such shares or warrants from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire ordinary shares or warrants of ARWA or vote their shares or warrants in favor of the Contribution Proposal or Warrant Amendment Proposal and not exercise their conversion rights. The purpose of such share or warrant purchases and other transactions would be to increase the likelihood of satisfaction of the requirement that the holders of a majority of the ordinary shares, being entitled to do so, vote at the meeting to approve the Contribution Proposal vote in its favor or to decrease the number of public shares that were being converted to cash, and to increase the likelihood of satisfaction of the requirement that the holders of a majority of the outstanding warrants vote to approve the warrant amendment. While the exact nature of any such incentives has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares or warrants, including the granting of put options and the transfer to such investors or holders of shares, warrants or rights owned by the ARWA initial shareholders for nominal value.

THE CONTRIBUTION PROPOSAL

The discussion in this proxy statement/prospectus of the Transactions and the principal terms of the Contribution Agreement is subject to, and is qualified in its entirety by reference to, the Contribution Agreement. A copy of the Contribution Agreement is attached as Annex A to this proxy statement/prospectus. The text of the contribution proposal to be considered at the extraordinary general meeting is set forth in Annex E .

Structure of the Transactions

Pursuant to the Contribution Agreement, ARWA will contribute to VivoPower the Contribution Amount in exchange for ordinary shares of VivoPower. As soon as reasonably practicable after the closing of the Transactions, ARWA will distribute the VivoPower ordinary shares received by it in exchange for the Contribution to the ARWA shareholders and (as a result of the warrant amendment described below) to the ARWA warrantholders. It is estimated that the ordinary shares of VivoPower distributed to ARWA shareholders and warrantholders as a result of the Contribution and warrant amendment will be approximately 55.8% of the issued share capital of VivoPower after the Transactions assuming ARWA public shareholders seek conversion of the maximum of 2,732,400 shares as provided by the Contribution Agreement. To the extent that fewer ARWA public shareholders seek conversion of their public shares, ARWA will use the excess capital in the trust fund to purchase additional shares of VivoPower from VivoPower, who will in turn utilize those funds to repurchase a like number of VivoPower shares from AWN. It is estimated that the ordinary shares of VivoPower distributed to ARWA shareholders and warrantholders as a result of the Contribution and warrant amendment if no holders of public shares seek conversion rights will be approximately 72.0% of the issued share capital of VivoPower after the Transactions.

As soon as reasonably practicable after the closing of the Transactions, ARWA will distribute the VivoPower shares it acquires to its shareholders and warrantholders and ARWA will dissolve and liquidate.

In connection with the Transactions, VivoPower and AWN will use commercially reasonable efforts to cause the contingent acquisitions, including the acquisitions of VivoPower Australia and OptionCo, to be consummated. The consummation of the contingent acquisitions is conditional on the closing of the Transactions. The consummation of the Transactions is conditional on all other conditions to the closing of the contingent acquisitions being satisfied or waived and the parties thereto being ready, willing and able to consummate these acquisitions as soon as practical after the closing of the Transactions. As soon as practical after the closing of the Transactions and the contingent acquisitions, OptionCo will acquire over 99% of Aevitas.

Headquarters; Stock Symbols

After completion of the transactions contemplated by the Contribution Agreement:

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the corporate headquarters and principal executive offices of VivoPower will be located at 23 Hanover Square, Mayfair, London W1S 1JB, UK, which are VivoPower’s current corporate headquarters; and

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if VivoPower’s application for listing is approved, VivoPower’s ordinary shares will be traded on Nasdaq under the symbol VVPR.

Background of the Transactions

The terms of the Contribution Agreement are the result of arm’s-length negotiations between representatives of ARWA, AWN and VivoPower. The following is a brief discussion of the background of these negotiations, the Contribution Agreement and related transactions.

On May 6, 2015, ARWA closed its initial public offering of 7,200,000 units, with each unit consisting of one ordinary share, one right to receive one-tenth of one ordinary share upon consummation of an initial business combination and one redeemable warrant entitling the holder to purchase one-half of one ordinary share at a price of $12.50 per full share commencing on the completion of an initial business combination. On May 12, 2015, ARWA consummated the sale of an additional 1,080,000 units which were subject to an over-allotment option granted to the underwriter of its initial public offering. The units from the initial public offering (including the over-allotment option) were sold at an offering price of $10.00 per unit, generating total gross proceeds of $82,800,000. Simultaneously with the consummation of the initial public offering, ARWA consummated the private sale of 455,000 units to its initial shareholders and/or their affiliates at $10.00 per unit for an aggregate purchase price of $4,550,000. Simultaneously with the consummation of the overallotment, ARWA consummated a private placement of an additional 54,000 private units to its initial shareholders and/or their affiliates generating gross proceeds of $540,000. After deducting the underwriting discounts and commissions and the offering expenses, the total net proceeds to ARWA from the offering and private placements were $85,111,186, of which $84,456,000 was deposited into the trust account and the remaining proceeds became available to be used to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses.

Prior to the consummation of its initial public offering, neither ARWA nor anyone on its behalf, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction with ARWA.

Subsequent to the consummation of the initial public offering, ARWA commenced efforts to identify and evaluate potential acquisitions with the objective of consummating a business combination. ARWA’s stated focus included target businesses located in the Asia Pacific region (with a particular emphasis on South East Asia and Australia) operating in the energy (including solar and alternative energy) industry, or target businesses in such industry operating outside of those geographic locations which it believed would benefit from expanding their operations to such locations.

In the months following the initial public offering, ARWA’s management identified potential targets by initiating conversations with (i) management’s own network of business associates and contacts, (ii) third-party companies that management believed could make attractive business combination partners and (iii) professional service providers including lawyers, accountants, consultants and investment bankers. ARWA educated these parties on its structure as a special purpose acquisition company and its criteria for a business combination. ARWA also responded to inquiries from investment bankers or other similar professionals representing companies engaged in sale or financing processes. Furthermore, ARWA’s management conducted independent market research to identify potential business combination opportunities. From time to time, ARWA’s databases of global potential business combination candidates were updated and supplemented based on additional information derived from these discussions with third parties.

ARWA’s board of directors was updated on a regular basis with respect to the status of the business combination search. Input received from ARWA’s board of directors was material to management’s evaluation of potential business combinations.

During this search process, ARWA reviewed more than 46 acquisition opportunities, with potential access to information under non-disclosure agreements negotiated with 16 parties. These opportunities were evaluated by ARWA. Many did not fit ARWA’s screening criteria, while some were eliminated due to an insufficient size, or indications that the sellers’ valuation expectations were too high, or assets that had not yet reached sufficient maturity. The screening process was repeated numerous times in parallel with the continued sourcing process.

During the period from August 2014 to July 2016, AWN was actively focused on developing a pipeline of attractive solar projects in several geographies, including via VivoPower Australia and VivoPower. Each of these projects were initially early stage developments or acquisitions requiring significant operational involvement from employees of AWN. Each of these projects was also initially individually below ARWA’s acquisition threshold.

On July 16, 2016, Kevin Chin determined to introduce the potential acquisition of VivoPower, including the contingent acquisitions, to the ARWA directors. After discussion, the ARWA board determined to continue to explore the Transactions and, given that it would be a transaction with a target affiliated with ARWA’s officers and directors, determined to engage Cassel Salpeter to render an opinion to the ARWA board as to (i) the fairness, from a financial point of view, to ARWA of the Contribution Amount to be paid by ARWA to VivoPower in exchange for VivoPower’s ordinary shares in the Contribution, after giving effect to the contingent acquisitions, and (ii) whether VivoPower had a fair market value equal to at least 80% of the value of ARWA’s trust fund.

On July 20, 2016, a draft letter of intent in relation to the Transactions was circulated to the ARWA board, together with detailed briefing materials relating to the transaction, detailed strategic plans and company forecasts for the business. Directors met and discussed the draft letter of intent and briefing materials. At this meeting, the ARWA directors agreed to the Transactions in principle, subject to certain outstanding matters to be resolved.

ARWA’s board of directors was kept apprised of the progress of the potential business combination including summary financial information, and growth prospects, during the ensuing period. On July 31, 2016 the board appointed Local Knowledge Pty Ltd to provide certain transaction support services and logistical support.

On July 27, 2016, Graubard Miller, ARWA’s legal counsel, circulated a draft of the Contribution Agreement to VivoPower and its counsel.

On August 5, 2016, Kevin Chin provided a draft of the Contribution Agreement to ARWA directors incorporating initial feedback from AWN and AWN’s legal counsel. From that time up through and including the time when the Contribution Agreement was signed on August 11, 2016, representatives of, and advisers to, ARWA and AWN together with Graubard Miller, U.S. legal counsel to ARWA, and Winston Strawn LLP, U.S. legal counsel to AWN, circulated numerous drafts of the Contribution Agreement and the ancillary documents and participated in numerous telephone conversations to finalise the specific terms of the Business Combination.

At a board meeting on August 9, 2016 ARWA directors met to vote on the Transactions. During this meeting, the ARWA directors also received Cassel Salpeter’s opinion. The Transactions were approved by the ARWA board members unanimously and were separately approved by all of the directors other than Kevin Chin and John Moore.

On August 11, 2016, the parties thereto executed the Contribution Agreement. On August 11, 2016, the parties issued a press release announcing the execution of the Contribution Agreement.

ARWA’s Board of Directors’ Reasons for Approval of the Transactions

The ARWA Board of Directors has unanimously approved the Transactions and provided their recommendation to Shareholders to vote in favor of the Proposal. The Board of Directors have cited the following reasons for their recommendation:

Combining the three entities unlocks significant value for each and together as a whole including by:

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Creating a pure play solar platform with global reach, a strong pipeline of opportunities and a highly experienced team;

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Providing the combined business with sufficient scale to access technology and growth, including by enabling greater access to capital from the Nasdaq listing;

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Realignment of all existing management and shareholders across a single capital structure and global incentive plan; and

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Providing operating scale for continued best practice system rollout.

In the Directors’ view, each of the three underlying business operations will benefit greatly from the consolidation for the reasons outlined above as well as reasons individual to each them.

Opinion of Financial Advisor

Noting the Transactions would be with a target affiliated with ARWA’s officers and directors, ARWA’s board of directors also considered the financial analysis reviewed by Cassel Salpeter with the ARWA board, and the oral opinion of Cassel Salpeter to the ARWA board (which was subsequently confirmed in writing by delivery of Cassel Salpeter’s written opinion dated the same date), as to, as of August 9, 2016, (i) the fairness, from a financial point of view, to ARWA of the Contribution Amount to be paid by ARWA in exchange for the Contribution Shares in the Contribution, after giving effect to the contingent acquisitions, pursuant to the Contribution Agreement and (ii) whether VivoPower had a fair market value equal to at least 80% of the balance of funds in ARWA’s trust account. See the section entitled “ The Contribution Proposal — Opinion of the Financial Advisor to the Board of Directors of ARWA .”

Satisfaction of 80% Test

Pursuant to Nasdaq rules, ARWA’s initial business combination must have a fair market value equal to at least 80% of the balance in the trust account at the time of the execution of a definitive agreement for such business combination. Based on the financial analysis of VivoPower generally used to approve the Transactions, including a comparison of comparable companies and a discounted cash flow analysis, the ARWA board of directors determined that this requirement was met. The board determined that consideration being paid in the Transactions, which amount was negotiated at arms-length, was fair to and in the best interests of ARWA and its shareholders and appropriately reflected ARWA’s value. In reaching this determination, the board concluded that it was appropriate to base such valuation on qualitative factors such as management strength and depth, competitive positioning, customer relationships, and technical skills as well as quantitative factors such as VivoPower’s potential future growth in revenues and profits. ARWA’s board of directors believes that the financial skills and background of its members qualify it to conclude that the acquisition of VivoPower met this requirement. In addition, the ARWA board of directors considered the financial analysis reviewed by Cassel Salpeter with the ARWA board, and the oral opinion of Cassel Salpeter to the ARWA board (which was subsequently confirmed in writing by delivery of Cassel Salpeter’s written opinion dated the same date), as to, as of August 9, 2016, whether VivoPower had a fair market value equal to at least 80% of the balance of funds in ARWA’s trust account.

Interests of ARWA’s Directors and Officers in the Transactions

In considering the recommendation of the board of directors of ARWA to vote in favor of approval of the Contribution Proposal, the Dissolution Proposal, the Incentive Plan Proposal and the other proposals, shareholders should keep in mind that ARWA’s initial shareholders, including its directors and executive officers, have interests in such proposals that are different from, or in addition to, those of ARWA shareholders generally. In particular:

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Pursuant to ARWA’s second amended and restated memorandum and articles of association, if the Transactions are not consummated by November 6, 2016 (or such later date as may be approved by ARWA shareholders), it will trigger ARWA’s automatic winding up, dissolution and liquidation pursuant to its second amended and restated memorandum and articles of association. If ARWA is forced to liquidate the trust account, ARWA anticipates that it would distribute to its public shareholders the amount in the trust account calculated as of the date that is two days prior to the distribution date (including any accrued interest). In such event, the 2,070,000 insider shares held by ARWA’s initial shareholders, including its directors and officers, which were acquired for an aggregate purchase price of $25,000 prior to ARWA’s initial public offering, would be worthless because ARWA’s initial shareholders are not entitled to participate in any liquidation with respect to such shares. Such shares had an aggregate market value of approximately $20.9 million based upon the closing price of $10.12 per share on Nasdaq on August 16, 2016, subject to completion of the Transactions.

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ARWA’s initial shareholders and affiliates, including its officers and directors, purchased an aggregate of 509,000 private units from ARWA for an aggregate purchase price of $5,090,000 (or $10.00 per unit). These purchases took place on a private placement basis simultaneously with the consummation of the initial public offering. All of the proceeds ARWA received from these purchases were placed in the trust account. Such units had an aggregate market value of $5.3 million based upon the closing price of $10.45 per unit on Nasdaq on August 16, 2016, subject to completion of the Transactions. The purchasers waived the right to participate in any redemption or liquidation distribution with respect to such private units. Accordingly, the ARWA shares, rights and warrants underlying the private units will become worthless if ARWA does not consummate a business combination by November 6, 2016 (or such later date as may be approved by ARWA shareholders), as will the ARWA rights and warrants held by public shareholders.

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At the closing of the Transactions, Vivo USA, an affiliate of VivoPower, and AWN will enter into a Fee and Loan Agreement providing that, in consideration for the project management and ancillary services that AWN has and will continue to provide to Vivo USA and its related entities in relation to and as preparation for the transactions, Vivo USA will pay AWN a fee of $5,800,000.

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At the closing of the Transactions, APG, an affiliate of certain of ARWA’s officers and directors, will be repaid the APG Loan, in an aggregate amount of approximately A$692,581 as of June 30, 2016, by one of the entities being acquired in the contingent acquisitions.

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ARWA has a loan payable to APG of $130,000. This loan may not be repaid if the Transactions are not consummated.

In addition to the foregoing, ARWA’s officers and directors may benefit from the Transactions as a result of the following interests and relationships:

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Ralsten Pty Ltd., an entity controlled by John C. Moore, a director of ARWA, owns 1,400,000 shares of AWN.

Dudley Hoskin, a director of ARWA, holds 3,575,000 shares of AWN. Mr. Hoskin and his wife also jointly own 183,037 shares of AWN.

Gary San Hui, the chief financial officer, chief investment officer and a director of ARWA, owns 625,000 shares of AWN.

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Ralsten Pty Ltd., an entity controlled by Mr. Moore and one of the initial shareholders of ARWA, holds 68,402 ordinary shares of Aevitas.

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ARWA’s officers and directors beneficially own shares of AWQ, a listed investment company managed by AAVOF Management Pty Limited (Manager), a wholly-owned subsidiary of AWN.

Ralsten Pty Ltd., an entity controlled by John C. Moore, a director of ARWA, owns 200,000 shares of AWQ.

Dudley Hoskin, a director of ARWA, holds 500,000 shares of AWQ.

Mr. Hui, directly and via a controlled entity, also owns 228,500 shares of AWQ.

Alnilum Pty Ltd ATF Jam and Jelly Foundation, an entity controlled by Mr. Kwan, holds 150,000 shares of AWQ. K2 Horizon Pty Ltd, an entity controlled by Mr. Kwan, owns 50,000 shares of AWQ.

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Certain of ARWA’s officers and directors also are officers or directors of AWN.

Mr. Chin is Chief Executive Officer of, and a director of AWN and a participant in AWN's compensation arrangements.

Mr. Moore is a director of AWN and certain AWN subsidiaries and receives director fees from AWN.

Mr. Hui is a consultant of AWN, a director of certain AWN subsidiaries, and a participant in AWN's compensation arrangements.

Opinion of Financial Advisor to the Board of Directors of ARWA

In the portions of this proxy statement/prospectus referencing Cassel Salpeter’s opinion, “ True-up Sale, ” “ Make-even Sale, ” “ Distribution, ” “ Dissolution, ” “ Acquisitions, ” “ Related Transactions, ” “ Contribution ” and “ Transaction ” have the meanings set forth in Cassel Salpeter’s written opinion, which is included as Annex D to this proxy statement/prospectus.

The summary of the opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the written opinion, which is included as Annex D to this proxy statement/prospectus and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Cassel Salpeter in preparing its opinion. However, neither Cassel Salpeter’s written opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus is intended to be or constitutes advice or a recommendation to any security holder as to how such security holder should act or vote with respect to any matter relating to the proposed Transaction or otherwise.

The opinion was addressed to the ARWA board for the use and benefit of the members of the ARWA board (in their capacities as such) in connection with the ARWA board’s evaluation of the Transaction. Cassel Salpeter’s opinion should not be construed as creating any fiduciary duty on Cassel Salpeter’s part to ARWA or any other party to the Agreement, any security holder of ARWA or such other party, any creditor of ARWA or such other party, or any other person. Cassel Salpeter’s opinion was just one of the several factors the ARWA board took into account in making its determination to approve the Transaction.

Cassel Salpeter’s opinion only addressed whether, as of the date of the opinion, (i) the Contribution Amount to be paid by ARWA in exchange for the Contribution Shares in the Contribution, after giving effect to the Acquisitions, pursuant to the Agreement was fair, from a financial point of view, to ARWA and (ii) VivoPower, after giving effect to the Acquisitions, had a fair market value equal to at least 80% of the value of ARWA’s trust fund. It did not address any other terms, aspects, or implications of the Transaction or the Agreement, including, without limitation, (i) except for assuming the consummation thereof immediately prior to, or contemporaneously with the Contribution, the Acquisitions, (ii) any other Related Transaction, (iii) any term or aspect of the Transaction that is not susceptible to financial analyses, (iv) the fairness of the Contribution, or all or any portion of the Contribution Amount, to any security holders of ARWA, VivoPower, AWN or any other person or any creditors or other constituencies of ARWA, VivoPower, AWN or any other person, nor (v) the fairness of the amount or nature, or any other aspect, of any compensation or consideration payable to or received by any officers, directors, or employees of any parties to the Transaction, or any class of such persons, relative to the Contribution Amount to be paid by ARWA in the Contribution pursuant to the Agreement, or otherwise. Cassel Salpeter did not express any opinion as to what the value of the Contribution Shares actually would be when issued to ARWA in the Contribution or the prices at which ARWA shares or VivoPower shares may trade, be purchased or sold at any time, and Cassel Salpeter made no representation or warranty regarding the adequacy of its opinion or the analyses underlying its opinion for the purpose of ARWA’s compliance with the terms of its organizational documents or any applicable foreign, federal, state or local laws, rules or regulations or for any other general or particular purpose.

Cassel Salpeter’s opinion did not address the relative merits of the Contribution or any Related Transaction as compared to any alternative transaction or business strategy that may have existed for ARWA, or the merits of the underlying decision by the ARWA board or ARWA to engage in or consummate the Contribution or any Related Transaction. The financial and other terms of the Transaction were determined pursuant to negotiations between the parties to the Agreement and were not determined by or pursuant to any recommendation from Cassel Salpeter.

Cassel Salpeter’s analysis and opinion were necessarily based upon market, economic, and other conditions, as they existed on, and could be evaluated as of the date of the opinion. Accordingly, although subsequent developments could arise that would otherwise affect its opinion, Cassel Salpeter did not assume any obligation to update, review, or reaffirm its opinion to the ARWA board or any other person or otherwise to comment on or consider events occurring or coming to Cassel Salpeter’s attention after the date of the opinion.

In arriving at its opinion, Cassel Salpeter made such reviews, analyses, and inquiries as Cassel Salpeter deemed necessary and appropriate under the circumstances. Among other things, Cassel Salpeter:

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Reviewed a draft, dated August 7, 2016, of the Agreement.

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Reviewed certain publicly available financial information and other data with respect to VivoPower that Cassel Salpeter deemed relevant.

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Reviewed certain other information and data with respect to VivoPower made available to Cassel Salpeter by ARWA and VivoPower, including (i) unaudited historical financial statements of VivoPower pro-forma for the Acquisitions (the “Pro-Forma Financial Statements”) prepared by management of VivoPower based on draft audited historical financial statements of VivoPower, Aevitas and VivoPower Australia (the “Draft Financial Statements”) and (ii) financial projections with respect to the future financial performance of VivoPower, after giving effect to the Acquisitions, for the fiscal years ending March 31, 2017 through March 31, 2019, prepared by management of VivoPower (the “Projections”) and other internal financial information furnished to Cassel Salpeter by or on behalf of VivoPower.

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Considered and compared the financial and operating performance of VivoPower, after giving effect to the Acquisitions, with that of companies with publicly traded equity securities that Cassel Salpeter deemed relevant.

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Considered the publicly available financial terms of certain transactions that Cassel Salpeter deemed relevant.

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Compared the implied enterprise value reference ranges of VivoPower, after giving effect to the Acquisitions, to the balance, as provided by ARWA management, of ARWA’s trust fund.

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Discussed the business, operations, and prospects of VivoPower, after giving effect to the Acquisitions, and the proposed Transaction with ARWA’s and VivoPower’s management and certain of ARWA’s and VivoPower’s representatives.

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Conducted such other analyses and inquiries, and considered such other information and factors, as Cassel Salpeter deemed appropriate.

For purposes of its analyses and opinion, Cassel Salpeter assumed, at ARWA’s direction, that the amount of the Transaction Fees and Expenses borne by ARWA would be $6,000,000 and, as a result, the Contribution Amount would be $50,585,520. In addition, for purposes of Cassel Salpeter’s analysis and its opinion, Cassel Salpeter, with ARWA’s consent, evaluated whether, as of the date of the opinion, VivoPower had a fair market value equal to at least 80% of the value of ARWA’s trust fund solely upon the basis of a comparison of the implied enterprise value reference ranges indicated by Cassel Salpeter’s financial analysis for VivoPower, after giving effect to the Acquisitions with the balance of the funds remaining in ARWA’s trust fund, which ARWA advised Cassel Salpeter and Cassel Salpeter, for purposes of its analysis and opinion, assumed did not and would not exceed $84,456,000.

In arriving at its opinion, Cassel Salpeter, with ARWA’s consent, relied upon and assumed, without independently verifying, the accuracy and completeness of all of the financial and other information that was supplied or otherwise made available to Cassel Salpeter or available from public sources, and Cassel Salpeter further relied upon the assurances of ARWA’s and VivoPower’s management that they were not aware of any facts or circumstances that would make any such information inaccurate or misleading. Cassel Salpeter also relied upon, without independent verification, the assessments of the management of ARWA and VivoPower as to ARWA’s and VivoPower’s existing and future technology, products and services and the validity and marketability of, and risks associated with, such technology, products and services (including, without limitation, the development, testing and marketing of such technology, products and services; the receipt of all necessary governmental and other regulatory approvals for the development, testing and marketing thereof; and the life of all relevant patents and other intellectual and other property rights associated with such technology, products and services), and Cassel Salpeter assumed, at ARWA’s direction, that there would be no developments with respect to any such matters that would adversely affect its analyses or opinion. Cassel Salpeter is not legal, tax, accounting, environmental, or regulatory advisors, and Cassel Salpeter did not express any views or opinions as to any legal, tax, accounting, environmental, or regulatory matters relating to ARWA, VivoPower, AWN, the Transaction, or otherwise. Cassel Salpeter understood and assumed that ARWA had obtained or would obtain such advice as it deemed necessary or appropriate from qualified legal, tax, accounting, environmental, regulatory, and other professionals.

ARWA and VivoPower advised Cassel Salpeter that the audit of the Draft Financial Statements was not yet complete and the Draft Financial Statements were therefore in draft form, had not been finalized and remained subject to change. In addition, ARWA and VivoPower advised Cassel Salpeter that the Pro-Forma Financial Statements and the Projections had been prepared under IFRS, except the Projections did not contain any purchase price adjustments as required by IFRS. As ARWA was aware, management of VivoPower did not provide, and Cassel Salpeter did not assess, the impact of the preparation of the Projections with purchase price adjustments.

ARWA also advised Cassel Salpeter, and Cassel Salpeter assumed, that the Projections were reasonably prepared on a basis reflecting the best currently available estimates and judgments of management of VivoPower with respect to the future financial performance of VivoPower after giving effect to the Acquisitions and that the Projections and the Pro-Forma Financial Statements provided a reasonable basis upon which to analyze and evaluate VivoPower after giving effect to the Acquisitions and form an opinion. Cassel Salpeter expressed no view with respect to the Projections, the Pro-Forma Financial Statements or the assumptions on which they were based. Without limiting the generality of the foregoing, ARWA directed Cassel Salpeter to rely upon and assume, without independent verification, that had the Draft Financial Statements been finalized and had the Projections been prepared with purchase price adjustments in accordance with IFRS, such draft financial statements and projections would not differ from the Draft Financial Statements and Projections, respectively, in any way material to Cassel Salpeter’s financial analyses or opinion.

Cassel Salpeter did not evaluate the solvency or creditworthiness of ARWA, VivoPower, AWN, Aevitas, VivoPower Australia or any other party to the Transaction, the fair value of ARWA, VivoPower, AWN, Aevitas, VivoPower Australia or any of their respective assets or liabilities, or whether ARWA, VivoPower, AWN, Aevitas, VivoPower Australia or any other party to the Transaction is paying or receiving reasonably equivalent value in the Transaction under any applicable foreign, state, or federal laws relating to bankruptcy, insolvency, fraudulent transfer, or similar matters, nor did Cassel Salpeter evaluate, in any way, the ability of ARWA, VivoPower, AWN, Aevitas, VivoPower Australia or any other party to the Transaction to pay its obligations when they come due. Cassel Salpeter did not physically inspect ARWA’s, VivoPower’s, AWN’s, Aevitas’ or VivoPower Australia’s properties or facilities and did not make or obtain any evaluations or appraisals of ARWA’s, VivoPower’s, AWN’s, Aevitas’ or VivoPower Australia’s assets or liabilities (including any contingent, derivative, or off-balance-sheet assets and liabilities). Cassel Salpeter did not attempt to confirm whether ARWA, VivoPower, AWN, Aevitas and VivoPower Australia have good title to their respective assets. Cassel Salpeter’s role in reviewing any information was limited solely to performing such reviews as Cassel Salpeter deemed necessary to support its own advice and analysis and was not on behalf of the ARWA board, ARWA, or any other party.

Cassel Salpeter assumed, with ARWA’s consent, that the Transaction would be consummated in a manner that complies in all respects with applicable foreign, federal, state, and local laws, rules, and regulations and that, in the course of obtaining any regulatory or third party consents, approvals, or agreements in connection with the Transaction, no delay, limitation, restriction, or condition would be imposed that would have an adverse effect on ARWA, VivoPower, AWN, Aevitas, VivoPower Australia or the Transaction. Cassel Salpeter also assumed, with ARWA’s consent, that the final executed form of the Agreement would not differ in any material respect from the draft Cassel Salpeter reviewed and that the Transaction would be consummated on the terms set forth in the Agreement, without waiver, modification, or amendment of any term, condition, or agreement thereof material to Cassel Salpeter’s analyses or opinion. Cassel Salpeter also assumed that the representations and warranties of the parties to the Agreement contained therein were true and correct and that each such party would perform all of the covenants and agreements to be performed by it under the Agreement. Cassel Salpeter offered no opinion as to the contractual terms of the Agreement or the likelihood that the conditions to the consummation of the Transaction set forth in the Agreement would be satisfied.

In connection with preparing its opinion, Cassel Salpeter performed a variety of financial analyses. The following is a summary of the material financial analyses performed by Cassel Salpeter in connection with the preparation of its opinion. It is not a complete description of all analyses underlying such opinion. The preparation of an opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. As a consequence, neither Cassel Salpeter’s opinion nor the respective analyses underlying its opinion is readily susceptible to partial analysis or summary description. In arriving at its opinion, Cassel Salpeter assessed as a whole the results of all analyses undertaken by it with respect to the opinion. While it took into account the results of each analysis in reaching its overall conclusions, Cassel Salpeter did not make separate or quantifiable judgments regarding individual analyses and did not draw, in isolation, conclusions from or with regard to any individual analysis or factor. Therefore, Cassel Salpeter believes that the analyses underlying the opinion must be considered as a whole and that selecting portions of its analyses or the factors it considered, without considering all analyses and factors underlying the opinion collectively, could create a misleading or incomplete view of the analyses performed by Cassel Salpeter in preparing the opinion.

The multiple ranges and implied value reference ranges indicated by Cassel Salpeter’s analyses are not necessarily indicative of actual values nor predictive of future results, which may be significantly more or less favorable than those suggested by such analyses. Much of the information used in, and accordingly the results of, Cassel Salpeter’s analyses are inherently subject to substantial uncertainty.

The following summary of the material financial analyses performed by Cassel Salpeter in connection with the preparation of its opinion includes information presented in tabular format. The tables alone do not constitute a complete description of these analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses Cassel Salpeter performed.

For purposes of its analyses, Cassel Salpeter reviewed a number of financial metrics, including the following:

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EBITDA — generally the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization for a specified time period.

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Enterprise Value — generally the value as of a specified date of the relevant company’s outstanding equity securities (taking into account its options and other outstanding convertible securities) plus the value as of such date of its net debt (the value of its outstanding indebtedness, preferred stock and minority interests less the amount of cash on its balance sheet).

Unless the context indicates otherwise, (1) share prices for the selected companies used in the selected companies analysis described below were as of August 5, 2016, (2) the relevant values for the selected transactions analysis described below were calculated on an enterprise value basis based on the consideration proposed to be paid in the selected transactions, (3) estimates of future financial performance of VivoPower were based on the Projections, and (4) estimates of financial performance for the selected companies listed below were based on publicly available research analyst estimates for those companies. In addition, Cassel Salpeter assumed, at ARWA’s direction, that the Contribution Amount would be $50,585,520.

Discounted Cash Flows Analysis

Cassel Salpeter performed a discounted cash flow analysis of VivoPower by calculating the estimated net present value of VivoPower’s free cash flows, after giving effect to the Acquisitions, through 2019 and estimates of the terminal value of VivoPower, after giving effect to the Acquisitions, after 2019 using the Projections. In performing this analysis, Cassel Salpeter applied discount rates ranging from 12.0% to 13.0% and perpetual growth rates ranging from 2.45% to 2.95%. This analysis indicated an implied enterprise value reference range of $179,400,000 to $207,800,000 for VivoPower. This analysis indicated an implied value reference range of $76,800,000 to $92,700,000 for the Contribution Shares, as compared to the Contribution Amount of $50,585,520.

Selected Companies Analysis

Cassel Salpeter considered certain financial data for VivoPower and selected companies with publicly traded equity securities Cassel Salpeter deemed relevant. The financial data reviewed included Enterprise Value as multiple of estimated EBITDA for the year ending December 31, 2016, or “2016 E EBITDA” and Enterprise Value as multiple of estimated EBITDA for the year ending December 31, 2017, or “2017 E EBITDA.” The selected companies with publicly traded equity securities and resulting multiples were:

	Enterprise Value /
	2016 E EBITDA		2017 E EBITDA
Infigen Energy		*		13.3x
SPCG Public Company Limited		8.1x		7.9x
SPI Energy Co., Ltd.		*		*
Thai Solar Energy Public Co. Ltd.		*		*
Sky Solar Holdings, Ltd.		12.0x		10.5x
_________________ * Data either not available or not meaningful.

Taking into account the results of the selected companies analysis, Cassel Salpeter applied multiples of 8.0x to 10.0x to VivoPower management’s estimate of EBITDA for VivoPower, pro-forma for the Acquisitions, for the fiscal year ending March 31, 2017 and 8.0x to 10.0x to VivoPower management’s estimate of EBITDA for VivoPower, pro-forma for the Acquisitions, for the fiscal year ending March 31, 2018, which indicated an implied enterprise value reference range of $160,000,000 to $200,000,000 for VivoPower. This analysis indicated an implied value reference range of $66,000,000 to $88,300,000 for the Contribution Shares, as compared to the Contribution Amount of $50,585,520.

None of the selected companies have characteristics identical to VivoPower. An analysis of selected publicly traded companies is not mathematical; rather it involves complex consideration and judgments concerning differences in financial and operating characteristics of the selected companies and other factors that could affect the public trading values of the companies reviewed.

Selected Transactions Analysis

Cassel Salpeter considered certain financial data for VivoPower and the financial terms of the following business transactions Cassel Salpeter deemed relevant. The financial data reviewed included Enterprise Value (calculated based on the consideration to be paid in the relevant transaction) as a multiple of trailing twelve months, or “TTM,” revenue. The selected transactions were:

Target	Acquiror
SolarCity Corporation	Tesla Motors, Inc.
PowerSecure International, Inc.	Southern Company
Energy Source Partners, LLC	Revolution Lighting Technologies, Inc.
Golmud Shenguang New Energy Co., Ltd.	Dalian East New Energy Development Co., Ltd.
Japan Energy Construction Co., Ltd.	ENERES Co., Ltd.
J.P. Solar Power Co., Ltd.	Inter Far East Energy Company Limited
Milgam Solar Ltd.	Aspen Group Ltd.
Fengxian Huize Photovoltaic Energy Limited	Huabei Expressway Co.; China Solar Power Group; and other acquirers

Cassel Salpeter calculated the following multiples with respect to the selected transactions:

	High	Mean	Median	Low
Enterprise Value as a Multiple of TTM Revenue	14.42x	7.25x	6.62x	1.04x

Taking into account the results of the selected transactions analysis, Cassel Salpeter applied multiples of 3.50x to 4.50x to VivoPower management’s estimate of revenue for Vivo Power, pro forma for the Acquisitions, for the fiscal year ending March 31, 2017 and discounted the implied value reference range to present value at a discount rate of 12.5%, which indicated an implied enterprise value reference range of $153,500,000 to $197,300,000 for VivoPower. This analysis indicated an implied value reference range of $62,400,000 to $86,800,000 for the Contribution Shares, as compared to the Contribution Amount of $50,585,520.

None of the target companies or transactions in the selected transactions have characteristics identical to VivoPower or the proposed Transaction. Accordingly, an analysis of selected business combinations is not mathematical; rather it involves complex considerations and judgments concerning differences in financial and operating characteristics of the target companies in the selected transactions and other factors that could affect the respective acquisition values of the transactions reviewed.

Implied Value Reference Range of VivoPower Compared to Trust Fund Balance

Cassel Salpeter compared the implied enterprise value reference range indicated by its financial analyses for VivoPower, after giving effect to the Acquisitions, with the balance of the funds remaining in ARWA’s trust fund. Taking into account the results of the discounted cash flow, selected companies and selected transactions analyses described above, Cassel Salpeter calculated an implied enterprise value reference range of $153,500,000 to $207,800,000 for VivoPower, after giving effect to the Acquisitions, as compared to the balance of the funds remaining in ARWA’s trust fund, which ARWA advised Cassel Salpeter and Cassel Salpeter, for purposes of its analysis and opinion, assumed did not and would not exceed $84,456,000.

Other Matters Relating to Cassel Salpeter’s Opinion

As part of its investment banking business, Cassel Salpeter is regularly engaged in the evaluation of businesses and their securities in connection with Transaction, acquisitions, corporate restructurings, private placements and other purposes. Cassel Salpeter is a recognized investment banking firm that has substantial experience in providing financial advice in connection with acquisitions, sales of companies, businesses and other assets and other Transactions. Cassel Salpeter received a fee of $150,000 for rendering its opinion, no portion of which was contingent upon the completion of the Transaction. In addition, ARWA agreed to reimburse Cassel Salpeter for certain expenses incurred by it in connection with its engagement and to indemnify Cassel Salpeter and its related parties for certain liabilities that may arise out of its engagement or the rendering of its opinion. In accordance with Cassel Salpeter’s policies and procedures, a fairness committee was not required to, and did not, approve the issuance of the opinion.

Material Federal Income Tax Consequences of the Transactions to ARWA and Its Securityholders

Pursuant to the Transactions, holders of ARWA ordinary shares will receive VivoPower shares in proportion to their shareholders in ARWA and the holders of ARWA warrants will receive 1/20 ^th of a VivoPower share for each warrant held by them. It is expected that ARWA will dissolve and liquidate as soon as practicable after the closing of the Transactions; however, ARWA’s board of directors reserves the right to not liquidate following the Transactions. In addition, if the Warrant Amendment Proposal is approved, each outstanding warrant of ARWA will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower. The following discussion sets forth the income tax consequences to holders of ARWA ordinary shares and warrants of the receipt of VivoPower shares, assuming that the VivoPower shares will be treated for U.S. federal income tax purposes as received pursuant to a plan of liquidation of ARWA.

The receipt of VivoPower shares in the Transactions and warrant amendment should be a taxable transaction for U.S. federal income tax purposes. Assuming the foregoing is a taxable transaction and that the VivoPower shares will be treated as having been received pursuant to the liquidation of ARWA, in general, a U.S. holder of shares or warrants of ARWA, as applicable, should recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between (1) the fair market value at the time of the receipt of the VivoPower shares and (2) the U.S. holder’s adjusted tax basis in such ARWA ordinary shares or warrants, as applicable. If a U.S. holder acquired different blocks of ARWA shares or warrants at different times or different prices, such U.S. holder must determine its tax basis and holding period separately with respect to each block of ARWA ordinary shares or warrants, as applicable. Such gain or loss will be long-term capital gain or loss provided that a U.S. holder’s holding period for such shares or warrants is more than one year at the date of the Transactions. Long-term capital gains recognized by U.S. holders that are not corporations generally are eligible for reduced rates of federal income taxation. The deductibility of capital losses is subject to certain limitations. A U.S. holder should have a tax basis in the VivoPower shares received equal to their fair market value on the date of the exchange of the Contribution Amount for VivoPower shares, and the U.S. holder’s holding period with respect to such VivoPower shares should begin on the day after the date of the Transactions.

If ARWA is not dissolved or is not otherwise treated for U.S. federal income tax purposes as having been liquidated, the fair market value of the VivoPower shares received by the holder of shares and warrants of ARWA generally will be includible in such holder’s gross income on the date of receipt but only to the extent that the distribution is paid out of ARWA’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent that the amount of the distribution exceeds ARWA’s current and accumulated earnings and profits (as determined under U.S. federal income tax principles), such excess amount will be treated first as a tax-free return of the holder’s tax basis in such holder’s shares or warrants, as applicable, and then, to the extent such excess amount exceeds the holder’s tax basis in such holder’s shares or warrants, as capital gain.

The Transactions also may potentially qualify for U.S. federal income tax purposes as a tax-free reorganization under Section 368(a) of the Code. If the Transactions are a tax-free reorganization under Section 368(a) of the Code, the material federal income tax consequences to a U.S. holder who receives VivoPower shares would be as follows: no gain or loss will be recognized upon the receipt of VivoPower shares; and the holding period of the VivoPower shares received in the Transactions will include the holding period of the shares and warrants of ARWA, provided that the shares and warrants of ARWA are held as a capital assets on the effective date of the Transactions.

If the Transactions are a tax-free reorganization, each U.S. holder of ARWA ordinary shares or warrants who is a “significant holder” will be required to file a statement with her, his or its federal income tax return setting forth her, his or its tax basis in the ARWA securities surrendered by her, him or it and the fair market value in the ARWA securities surrendered by her, him or it in the Transactions, and to retain permanent records of the facts relating to the Transactions. A “significant holder” is a shareholder who immediately before the Transactions, owned at least one percent (by vote or value) of the outstanding ARWA ordinary shares or warrants with an adjusted tax basis of $1 million or more.

ARWA intends to treat the Transactions as a taxable transaction.

Material UK Tax Consequences of Owning, Holding and Disposing of VivoPower Shares

The comments set out below are based on current United Kingdom tax law as applied in England and HM Revenue & Customs (“HMRC”) practice (which may not be binding on HMRC) as of the date of this document, both of which are subject to change, possibly with retrospective effect. They are intended as a general guide and apply only to our shareholders resident and, in the case of an individual, domiciled for tax purposes in the United Kingdom and to whom “split year” treatment does not apply (except insofar as express reference is made to the treatment of non-United Kingdom residents), who hold VivoPower shares as an investment and who are the absolute beneficial owners thereof. The discussion does not address all possible tax consequences relating to an investment in the VivoPower shares. Certain categories of shareholders, including those carrying on certain financial activities, those subject to specific tax regimes or benefitting from certain reliefs or exemptions, those connected with VivoPower, those that own (or are deemed to own) 5% or more of our shares and/or voting power (either alone or together with connected persons) and those for whom the VivoPower shares are employment-related securities may be subject to special rules and this summary does not apply to such shareholders and any general statements made in this disclosure do not take them into account. This summary does not address any inheritance tax considerations.

This summary is for general information only and is not intended to be, nor should it be considered to be, legal or tax advice to any particular investor. It does not address all of the tax considerations that may be relevant to specific investors in light of their particular circumstances or to investors subject to special treatment under UK tax law. In particular:

Taxation of Dividends

VivoPower will not be required to withhold amounts on account of United Kingdom tax at source when paying a dividend.

Individuals

Subject to the enactment of the Finance Bill 2016 in its current form, United Kingdom resident individuals will receive an annual tax free allowance in relation to dividend receipts of £5,000. Dividend receipts in excess of this allowance will be taxed at the rates of 7.5% for basic rate income tax payers, 32.5% for higher rate income tax payers, and 38.1% for additional rate income tax payers.

Corporate Shareholders

Although shareholders who are within the charge to corporation tax would strictly be subject to corporation tax on dividends paid by VivoPower (subject to special rules for such shareholders that are “small” companies), generally such dividends will fall within an exempt class and will not be subject to Shareholders within the charge to corporation tax should consult their own professional advisers.

Taxation of Capital Gains on Disposals of VivoPower shares

UK Shareholders

Shareholders who are resident in the United Kingdom, and individual shareholders who are temporarily non-resident and subsequently resume residence in the United Kingdom within a certain time, may depending on their circumstances and the availability of exemptions or reliefs (including, for example, the annual exempt amount for individuals (which is £11,100 for the 2016/17 tax year) and indexation allowance for corporate shareholders), be liable to United Kingdom taxation on chargeable gains in respect of gains arising from a sale or other disposal (or deemed disposal) of the VivoPower shares.

Non-UK Shareholders

An individual holder who is not a United Kingdom resident shareholder will not be liable to United Kingdom capital gains tax on chargeable gains realized on the disposal of his or her VivoPower shares unless such shareholder carries on (whether solely or in partnership) a trade, profession or vocation in the United Kingdom through a branch or agency in the United Kingdom to which the shares are attributable. In these circumstances, such shareholder may, depending on his or her individual circumstances, be chargeable to United Kingdom capital gains tax on chargeable gains arising from a disposal of his or her shares.

A corporate holder of shares who is not a United Kingdom resident shareholder will not be liable for United Kingdom corporation tax on chargeable gains realized on the disposal of its shares unless it carries on a trade in the United Kingdom through a permanent establishment to which the shares are attributable. In these circumstances, a disposal of shares by such shareholder may give rise to a chargeable gain or an allowable loss for the purposes of United Kingdom corporation tax.

Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)

The statements in this section entitled “Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)” are intended as a general guide to the current United Kingdom stamp duty and SDRT position. The discussion below relates to shareholders wherever resident, but investors should note that certain categories of person are not liable to stamp duty or SDRT and others may be liable at a higher rate or may, although not primarily liable for tax, be required to notify and account for SDRT under the Stamp Duty Reserve Tax Regulations 1986.

General

Except in relation to depositary receipt systems and clearance services (to which the special rules outlined below apply), no stamp duty or SDRT will arise on the issue of VivoPower shares.

An agreement to transfer VivoPower shares will normally give rise to a charge to SDRT at the rate of 0.5% of the amount or value of the consideration payable for the transfer. SDRT is, in general, payable by the purchaser.

Instruments transferring VivoPower shares will generally be subject to stamp duty at the rate of 0.5% of the consideration given for the transfer (rounded up to the next £5). The purchaser normally pays the stamp duty.

If a duly stamped transfer completing an agreement to transfer is produced within six years of the date on which the agreement is made (or, if the agreement is conditional, the date on which the agreement becomes unconditional), any SDRT already paid is generally repayable, normally with interest, and any SDRT charge yet to be paid is cancelled.

Depositary Receipt Systems and Clearance Services

Following the European Court of Justice decision in C-569/07 HSBC Holdings Plc, Vidacos Nominees Limited v. The Commissioners of Her Majesty's Revenue & Customs and the First-tier Tax Tribunal decision in HSBC Holdings Plc and The Bank of New York Mellon Corporation v. The Commissioners of Her Majesty's Revenue & Customs, HMRC has confirmed that a charge to 1.5% SDRT is no longer payable when new shares are issued to a clearance service (such as, in our understanding, DTC) or depositary receipt system.

HMRC remains of the view that where VivoPower shares are transferred (a) to, or to a nominee or an agent for, a person whose business is or includes the provision of clearance services or (b) to, or to a nominee or an agent for, a person whose business is or includes issuing depositary receipts, stamp duty or SDRT will generally be payable at the higher rate of 1.5% of the amount or value of the consideration given or, in certain circumstances, the value of the VivoPower shares.

There is an exception from the 1.5% charge on the transfer to, or to a nominee or agent for, a clearance service where the clearance service has made and maintained an election under section 97A(1) of the Finance Act 1986 which has been approved by HMRC and which applies to the VivoPower shares. In these circumstances, SDRT at the rate of 0.5% of the amount or value of the consideration payable for the transfer will arise on any transfer of VivoPower shares into such a clearance service and on subsequent agreements to transfer such VivoPower shares within such clearance service. It is our understanding that DTC has not made an election under section 97A(1) of the Finance Act of 1986, and that therefore transfers or agreements to transfer shares held in book entry (i.e., electronic) form within the facilities of DTC should not be subject to UK stamp duty or SDRT.

Any liability for stamp duty or SDRT in respect of a transfer into a clearance service or depositary receipt system, or in respect of a transfer within such a service, which does arise will strictly be accountable by the clearance service or depositary receipt system operator or their nominee, as the case may be, but will, in practice, be payable by the participants in the clearance service or depositary receipt system.

The Proposed Financial Transactions Tax (“FTT”)

On February 14, 2013, the European Commission published a proposal (the “Commission's Proposal”) for a Directive for a common FTT in Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia (the “participating Member States”).

The Commission's Proposal has very broad scope and could, if introduced, apply to certain dealings in VivoPower shares (including secondary market transactions) in certain circumstances. Under the Commission's Proposal, the FTT could apply in certain circumstances to persons both within and outside of the participating Member States. Generally, it would apply to certain dealings in VivoPower shares where at least one party is a financial institution, and at least one party is established in a participating Member State. A financial institution may be, or be deemed to be, “established” in a participating Member State in a broad range of circumstances, including (a) by transacting with a person established in a participating Member State or (b) where the financial instrument which is subject to the dealings is issued in a participating Member State.

On March 16, 2016 Estonia formally left the group of participating Member States. The FTT proposal remains subject to negotiation between the remaining participating Member States, but the scope and timetable of the introduction of any such tax is uncertain. Additional EU Member States may decide to participate.

Prospective holders of VivoPower shares are advised to seek their own professional advice in relation to the potential introduction of the FTT.

Anticipated Accounting Treatment

VivoPower will issue between 9.4 million and 12.2 million shares, representing between 55.8% and 72.0% of the ordinary shares of the company following the Transactions for the cash in ARWA’s trust account. For accounting purposes, VivoPower will treat the Contribution as the issue of its shares for cash.

Regulatory Matters

The Transactions contemplated by the Contribution Agreement are not subject to any additional federal or state regulatory requirement or approval, except for filings with the Registrar of Companies in the Cayman Islands, with the Australian Securities and Investment Commission and Australian Securities Exchange Limited in Australia and with Companies House in England.

Required Vote

The approval of the Contribution Proposal will require the affirmative vote of holders of a majority of the ordinary shares of ARWA voted. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not deemed voted and will have no effect on such proposal. Additionally, pursuant to the Contribution Agreement, the Transactions will not be consummated if the holders of more than 2,732,400 of the public shares properly demand that ARWA convert their public shares into their pro rata share of the trust account. Even if the parties waive this closing condition, under ARWA’s second amended and restated memorandum and articles of association, the Transactions may only be consummated if ARWA has net tangible assets of at least $5,000,001 upon such consummation. ARWA estimates that this condition will be met if holders of no more than 7,789,803 of the public shares properly demand that ARWA convert their public shares into their pro rata share of the trust account. In addition, the Transactions are conditioned upon approval of the Warrant Amendment Proposal. Unless the applicable condition is waived, the Transactions will not be consummated if the Warrant Amendment Proposal is not approved.

If the Contribution Proposal is not approved, the other proposals (except the Shareholder Adjournment Proposal, as described below) will not be presented to the shareholders for a vote.

THE ARWA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE ARWA SHAREHOLDERS VOTE “ FOR ” THE APPROVAL OF THE CONTRIBUTION PROPOSAL.

THE CONTRIBUTION AGREEMENT

For a discussion of the structure of the Transactions and the consideration to be paid by ARWA, see the section entitled “ The Contribution Proposal .” Such discussion and the following summary of other material provisions of the Contribution Agreement is qualified by reference to the complete text of the Contribution Agreement, a copy of which is attached as Annex A to this proxy statement/prospectus. All shareholders are encouraged to read the Contribution Agreement in its entirety for a more complete description of the terms and conditions of the Transactions.

The Contribution Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of each agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Contribution Agreement. The representations, warranties and covenants in the Contribution Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. We do not believe that these schedules contain information that is material to a voting or conversion decision.

Closing and Effective Time of the Transactions

The closing of the Transactions will take place on the fifth business day following the satisfaction or waiver of the conditions described below under the subsection entitled “ Conditions to the Closing of the Transactions ,” unless the parties agree in writing to another time. The Transactions are expected to be consummated as soon as practicable after the extraordinary general meeting of ARWA’s shareholders described in this proxy statement/prospectus and the satisfaction or waiver of the other conditions to the closing of the Transactions.

Representations and Warranties

Except as limited below, the Contribution Agreement contains representations and warranties of each of ARWA and VivoPower generally relating, among other things, to:

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proper organization and similar corporate matters;

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subsidiaries;

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capital structure of each company;

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the authorization, performance and enforceability of the Contribution Agreement;

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required filings and consents and absence of conflicts;

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compliance with laws and other legal requirements;

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financial statements;

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absence of undisclosed liabilities;

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in the case of VivoPower, absence of certain changes or events;

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litigation;

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in the case of VivoPower, employee benefit plans;

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in the case of VivoPower, labor matters;

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in the case of VivoPower, restrictions on business activities;

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in the case of VivoPower, real property, leases and personal property;

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in the case of VivoPower, taxes;

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in the case of VivoPower, environmental matters;

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brokerage and similar fees;

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in the case of VivoPower, intellectual property;

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in the case of VivoPower, contracts and commitments;

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in the case of VivoPower, insurance;

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in the case of VivoPower, governmental actions/filings;

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interested party transactions;

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listing of securities;

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board approval;

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in the case of ARWA, absence of convertible securities except as disclosed;

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in the case of ARWA, SEC reports; and

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in the case of ARWA, amount of funds in the trust account.

Covenants

ARWA and VivoPower have each agreed to take such actions as are necessary, proper or advisable to consummate the Transactions. Each of them has also agreed to continue to operate their respective businesses in the ordinary course prior to the closing and not to take the following actions, among others, except as permitted by the agreement, without the prior written consent of the other party:

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waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;

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grant any material severance or termination pay to (i) any officer or (ii) any employee, except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof, or adopt any new material severance plan, or amend or modify or alter in any manner any material severance plan, agreement or arrangement existing on the date hereof;

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transfer or license to any person or otherwise extend, amend or modify any material rights to any intellectual property or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business provided that in no event shall VivoPower, VivoPower Australia, OptionCo and Aevitas (collectively, the “Company Group”) or ARWA license on an exclusive basis or sell any intellectual property;

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declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;

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purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company Group or ARWA;

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issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into or exchangeable for shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible or exchangeable securities;

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amend its charter documents, other than any amendment by ARWA necessary to extend the time for ARWA to complete an initial business combination, if necessary, and to provide the holders of public shares the opportunity to convert their shares into a pro rata portion of the trust fund in connection therewith;

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other than the contingent acquisitions or in the ordinary course of business, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of ARWA or the Company Group, as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;

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sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) in the ordinary course of business, and (B) the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party;

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adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business with employees who are terminable “at will”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, in each case except in the ordinary course of business or to conform to the requirements of any applicable law;

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pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of the APG Loan (as described in “ The Contribution Proposal – Interests of ARWA’s Directors and Officers in the Transactions ” section above) and any liabilities recognized or disclosed in the most recent Financial Statements or in the financial statements included in the ARWA SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements in the ordinary course of business, or waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which ARWA is a party or of which ARWA is a beneficiary, as applicable;

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except in the ordinary course of business, modify, amend or terminate any material contract, or waive, delay the exercise of, release or assign any material rights or claims thereunder;

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except as required by IFRS, revalue any of its assets or make any change in accounting methods, principles or practices;

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except in the ordinary course of business, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $300,000 in any 12 month period;

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settle any litigation where the consideration given is other than monetary or to which an insider of ARWA or the Company Group, as applicable, is a party;

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make or rescind any tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the tax liability or tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for tax purposes;

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form or establish any subsidiary except in the ordinary course of business or as contemplated by the Contribution Agreement;

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permit any person to exercise any of its discretionary rights under any plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;

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make capital expenditures except in accordance with prudent business and operational practices;

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make or omit to take any action which would have a material adverse effect;

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enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders, managers, members or other Subsidiaries other than the payment of salary and benefits and tax distributions in the ordinary course of business consistent with prior practice; or

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agree in writing or otherwise agree, commit or resolve to take any of the foregoing actions.

The Contribution Agreement also contains additional covenants of the parties, including covenants providing for:

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ARWA and VivoPower to prepare and file this proxy statement/prospectus, to be used for the purpose of soliciting proxies from the ARWA shareholders and warrantholders for the matters to be acted upon at the extraordinary general meetings and for the distribution of the VivoPower shares;

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the appointment of certain officers and directors of VivoPower;

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the protection of confidential information of the parties and, subject to the confidentiality requirements, the provision of reasonable access to information. See the section entitled “ The Contribution Agreement — Confidentiality; Access to Information ”;

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the parties to use commercially reasonable efforts to do all things necessary, proper or advisable to consummate and make effective the Transactions, including obtaining all necessary approvals from governmental agencies and other third parties;

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VivoPower, AWN and their respective affiliates to waive their rights to make claims against ARWA to collect from the trust account any monies that may be owed to them by ARWA;

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VivoPower and ARWA to use commercially reasonable best efforts to obtain the listing for trading on the Nasdaq of the VivoPower ordinary shares;

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VivoPower and AWN not to solicit or enter into discussions or transactions with any other third party regarding any merger, sale of ownership interests or assets;

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VivoPower and ARWA to maintain directors’ and officers’ liability insurance policies (or “tail” insurance coverage in the case of ARWA) for a period of six years following the closing of the Transactions;

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The VivoPower officers and directors to repay any amounts owed by them to VivoPower, cause any guaranty made by VivoPower for the benefit of the VivoPower officers and directors to be terminated and cease to own any direct interest in any VivoPower subsidiary;

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MidCo, a wholly owned subsidiary of VivoPower, to establish a separate class of non-voting securities that may be used by VivoPower to incentivize officers and employees of VivoPower and its subsidiaries;

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VivoPower, Aevitas and VivoPower Australia to provide periodic financial information to ARWA through the closing; and

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ARWA to cause the trust account to be disbursed as directed by it immediately upon the closing, which funds may be disbursed to pay the Contribution Amount (from which amounts may be deducted to pay the sellers in the contingent acquisitions) and all liabilities of ARWA due and owing or incurred at or prior to the closing, including, without limitation, all amounts payable to ARWA public shareholders electing to exercise their conversion rights, tax liabilities, director’s and officer’s insurance and amounts payable to third parties (e.g., professionals, printers, etc.) who have rendered services to ARWA;

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VivoPower and AWN to use commercially reasonable efforts to cause the contingent acquisitions and the Aevitas acquisition to be consummated;

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AWN to use its best efforts to take, or cause to be taken, all actions necessary to obtain the AWN Shareholder Approval; and

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VivoPower to cause its board of directors to be composed of a sufficient number of residents outside the UK, Channel Islands and the Isle of Man for the purposes of paragraph 3(a) of the Introduction to the UK Takeover Code such that the rules of the UK Takeover Code or the jurisdiction of the UK Takeover Panel do not apply.

Lock-Up Agreements; Escrow

AWN has entered into a lock-up agreement with VivoPower with respect to the ordinary shares of VivoPower held by it or which it has the right to acquire as of the closing. Pursuant to the lock-up agreement, subject to certain limited exceptions, AWN will not transfer such shares, either directly or indirectly, or otherwise transfer the economic consequences of ownership of such shares, or publicly announce the intention to do any of the foregoing, during the period beginning on the closing date and (a) with respect to 50% of such shares, ending on the earlier of the date VivoPower publicly releases its financial results for the fiscal year ending March 31, 2019 and the date which is at least one year after the closing date on which the closing price of the VivoPower shares has been at least $12.50 for 20 trading days out of any 30 trading day period, and (b) with respect to the other 50% of such shares, ending on the date VivoPower publicly releases its financial results for the fiscal year ending March 31, 2019.

Each of the sellers of VivoPower Australia also has entered into a lock-up agreement with VivoPower with respect to the ordinary shares of VivoPower to be issued to such seller in connection with the VivoPower Australia acquisition. Pursuant to the lock-up agreement, subject to certain limited exceptions, each seller will not transfer such shares, either directly or indirectly, or otherwise transfer the economic consequences of ownership of such shares, or publicly announce the intention to do any of the foregoing, during the period beginning on the closing date and (a) with respect to 20% of such shares, ending one year after the closing date of the Transactions, (b) with respect to 40% of such shares, ending on the earlier of the date VivoPower publicly releases its financial results for the fiscal year ending March 31, 2019 and the date which is at least one year after the closing date of the Transactions on which the closing price of the VivoPower shares has been at least $12.50 for 20 trading days out of any 30 trading day period, and (c) with respect to the remaining 40% of such shares, ending on the date VivoPower publicly releases its financial results for the fiscal year ending March 31, 2019.

In addition, the ordinary shares of VivoPower distributed to the holders of the ordinary shares of ARWA that were issued prior to ARWA’s initial public offering (the “ARWA Insider Shares”) will continue to be subject to the same escrow provisions applicable to the ARWA Insider Shares.

Conditions to Closing the Transactions

General Conditions

Consummation of the Transactions is conditioned on (i) the ARWA shareholders approving the Transactions, (ii) the ARWA warrantholders approving the Warrant Amendment Proposal, (iii) the registration statement of which this proxy statement/prospectus forms a part being declared effective, (iv) the holders of no more than 2,732,400 of ARWA’s public shares exercising their conversion rights, (v) confirmation from Nasdaq that VivoPower meets all the requirements for listing on such exchange other than the requirement to have a sufficient number of round lot holders, (vi) AWN’s shareholders approving the Transactions and (vii) no governmental entity enacting or issuing any legal requirement which has the effect of making the Transactions illegal or otherwise prohibiting the consummation of the Transactions substantially on the terms set forth in the Contribution Agreement.

In addition, the consummation of the Transactions is conditioned upon, among other things, (i) the representations and warranties of each party being true and correct on and as of the closing date and each party having performed or complied with all agreements and covenants required by the Contribution Agreement to be performed or complied with on or prior to the closing and each party having received a certificate with respect to the foregoing from the other party, (ii) all necessary consents, waivers and approvals required to be obtained in connection with the Transactions having been received, other than consents, waivers and approvals the absence of which could not reasonably be expected to have a material adverse effect and (iii) the absence of certain pending or threatened litigations.

AWN’s and VivoPower’s Conditions to Closing

The obligations of AWN and VivoPower to consummate the Transactions also are conditioned upon, among other things:

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ARWA shall be in compliance with public company reporting requirements;

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ARWA shall have made appropriate arrangements to have the trust fund, which shall contain no less than $84,456,000, dispersed immediately upon the Closing; and

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the aggregate of ARWA’s transaction fees and expenses will not exceed $8,000,000.

ARWA’s Conditions to Closing

The obligations of ARWA to consummate the Transactions also are conditioned upon each of the following, among other things:

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there being no material adverse change affecting VivoPower;

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certain individuals having resigned from all of their positions with VivoPower;

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all outstanding indebtedness owned by any insider of VivoPower shall have been repaid in full; (ii) all guaranteed or similar arrangements pursuant to which VivoPower has guaranteed the payment or performance of any obligations of any VivoPower insider to a third party shall have been terminated; and (iii) no VivoPower insider shall own any direct equity interests in any subsidiary of VivoPower, subject to certain exceptions;

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the AWN’s lock-up agreement shall have been executed and delivered and shall be in full force and effect, and lock-up agreements on terms satisfactory to ARWA shall have been entered into by the counterparties to the VivoPower Australia acquisition; and

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Waiver

Termination

The Contribution Agreement may be terminated at any time, but not later than the closing, as follows:

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by mutual written consent of ARWA and VivoPower;

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by either ARWA or VivoPower if the transactions contemplated by the Contribution Agreement are not consummated on or before June 30, 2017;

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by either ARWA or VivoPower if, at the ARWA shareholder meeting, (i) the Transactions shall fail to be approved by holders of ARWA’s shareholders or (ii) the holders of more than 2,732,400 of ARWA’s public shares shall exercise conversion rights; or

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by either ARWA or VivoPower if AWN Shareholder Approval is not obtained at the meeting of AWN shareholders called for such purpose, provided AWN shall have used its best efforts to cause the AWN Shareholder Approval to be obtained.

Effect of Termination

In the event of proper termination by either ARWA or VivoPower, the Contribution Agreement will be of no further force or effect and the Transactions will be abandoned, except that:

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the parties’ confidentiality obligations set forth in the Contribution Agreement will survive. See the section entitled “ The Contribution Agreement — Confidentiality; Access to Information ”;

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the waiver by AWN and its affiliates of their rights to make claims against ARWA to collect from the trust account any monies that may be owed to them by ARWA will survive;

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each party’s liability for breach of the Contribution Agreement will survive; and

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the obligation of each party to pay fees and expenses incurred by such party in connection with the Contribution Agreement will survive. See the section entitled “ The Contribution Agreement — Fees and Expenses .”

Fees and Expenses

All fees and expenses incurred in connection with the Contribution Agreement and the transactions contemplated thereby will be paid by the party incurring such expenses whether or not the transactions are consummated.

Confidentiality; Access to Information

ARWA and VivoPower will afford to the other party and its financial advisors, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to all of their respective properties, books, records and personnel during the period prior to the closing to obtain all information concerning the business, including the status of business development efforts, properties, results of operations and personnel, as each party may reasonably request. ARWA and VivoPower will maintain in confidence any non-public information received from the other party, and use such non-public information only for purposes of consummating the transactions contemplated by the Contribution Agreement.

Amendments

The Contribution Agreement may be amended by the parties thereto at any time prior to the closing of the Transactions by execution of an instrument in writing signed on behalf of each of the parties. After the dissolution of ARWA, this Agreement may be amended without the consent of ARWA provided that a majority of the individuals who were independent directors of ARWA as of the date of the Closing approve of such amendment.

Governing Law; Consent to Jurisdiction

The Contribution Agreement is governed by and construed in accordance with the law of the state of New York, regardless of the law that might otherwise govern under applicable principles of the conflicts of laws of New York.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

ARWA is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the transactions.

The following unaudited pro forma combined statement of financial position gives effect to the Transactions as if they had occurred on March 31, 2016. The accompanying unaudited pro forma combined statement of income for the year ended March 31, 2016, gives effect to the Transactions as if they were affected on April 1, 2015. The unaudited pro forma combined financial information has been compiled from the following sources with the following unaudited adjustments:

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The “VivoPower” column is derived without adjustment from, and should be read in conjunction with, the historical audited consolidated financial statements of VivoPower at and for the period ended March 31, 2016;

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The “Aevitas” column is derived from, and should be read in conjunction with, the historical audited consolidated financial statements of Aevitas at and for the year ended March 31, 2016. Aevitas’ financial statements have been translated to U.S. dollars for the pro forma statements at the March 31, 2016 spot rate of 0.7664 AUD/USD for accounts in the statement of financial position, and at the average rate for the year then ended of 0.7364 AUD/USD for accounts in the statement of income;

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The “VivoPower Australia” column is derived from, and should be read in conjunction with, the historical audited consolidated financial statements of VivoPower Australia at and for the year ended March 31, 2016. VivoPower Australia’s financial statements have been translated to U.S. dollars for the pro forma at the March 31, 2016 spot rate of 0.7664 AUD/USD for accounts in the statement of financial position, and at the average rate for the year then ended of 0.7364 AUD/USD for accounts in the statement of financial performance;

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The “Pro Forma Adjustments” column gives effect to changes in Aevitas investments prior to the Transactions, namely the “Purchase of JA Martin non-controlling interest” by Aevitas and the “Aevitas Sale of 7% of VivoPower Australia”, as well as the acquisition of the IS-31 project by VivoPower as if each had occurred at March 31, 2016;

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The “Merger with ARWA” column gives effect to the proposed subscription for new shares in VivoPower by ARWA as per the terms of the executed Contribution Agreement between the parties;

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The “PPA for Aevitas & VivoPower Australia” column gives effect to the purchase price adjustments (“PPA”) and eliminations related to VivoPower’s purchase of VivoPower Australia and Aevitas.

The PPAs have been prepared in accordance with the recognition and measurement principles of business combination accounting under IFRS. The pro forma financial information solely reflects VivoPower’s financial statements in contemplation with the Transactions, contingent acquisitions and Aevitas acquisition and does not portray ARWA’s financial information.

The Transactions

Contribution Agreement

To effect the Contribution, the Contribution Agreement provides for an increase in the share capital of VivoPower in exchange for a cash contribution from ARWA. Under the terms of the agreement, upon completion of the Transactions, ARWA will exchange cash for newly issued VivoPower shares. These will be subsequently distributed to ARWA shareholders and warrantholders as described in this proxy statement/prospectus. The pro forma capital structure presented in the Pro Forma combined statement of financial position gives effect to the subscription and proceeds of shares to be issued. If owners of fewer than 2,732,400 of ARWA’s public shares exercise their conversion rights, the pro forma will not be impacted as the incremental proceeds received by VivoPower will applied towards buyback of securities from AWN, which will ultimately result in VivoPower’s cash balance and shares on issue being unchanged regardless of the level of public shareholder conversion. For this reason, the pro forma financial information set out below contains only a single scenario.

As the Transactions will not result in a combined entity, an attempt to present the Transactions in such a manner may be misleading to investors. Assuming the Dissolution Proposal is approved, ARWA will be dissolved and no longer have active operations and its shareholders will have become shareholders of VivoPower. For these reasons, no pro forma information for ARWA is reflected.

Acquisition of Aevitas

The share sale agreement in relation to the ordinary shares in OptionCo was signed on August 11, 2016 and sets out that subject to the satisfaction of the conditions precedent contained in that agreement, VivoPower, through its wholly owned subsidiary MidCo, will acquire 100% of the ordinary shares in OptionCo for consideration of A$2.00. OptionCo is a non-operating entity that holds only options over 99.9% of the ordinary shares in Aevitas. The options must be exercised upon a change of control of OptionCo, which will occur as a result of the completion of the share sale agreement.

On exercise of the options, OptionCo must pay the shareholders of Aevitas cash of $9.7 million in exchange for 99.9% of the issued ordinary shares of the company. The acquisition of Aevitas will also trigger the redemption of Notes and Convertible Preference Shares on issue by Aevitas, including the payment of certain accrued interest liabilities and unpaid dividends on the instruments. In total, Aevitas will be required to pay cash of $16.1 million to redeem the Notes and $7.3 million to redeem the Convertible Preference Shares, inclusive of interest liabilities and unpaid dividends in relation to instruments. In aggregate, this results in total cash of $33.1 million being paid to Aevitas ordinary shareholders, convertible preference shareholders and noteholders to complete the transaction.

Aevitas provides power services throughout Australasia, combining a strong heritage in traditional industries with a focus on the growing market of renewables and energy efficiency. The acquisition of Aevitas is presented as a business combination acquisition within the pro forma combined statement of financial position and statement of loss.

Acquisition of VivoPower Australia

The share sale agreements were signed on August 11, 2016 and set out that VivoPower will acquire 80.1% of VivoPower Australia ordinary shares for the issuance of 1.8 million new VivoPower shares and, via its wholly owned subsidiary MidCo, 100% of the Series B Redeemable Pref Shares of VivoPower Australia for $0.6 million in cash. This represents total consideration of $18.8 million.

All share sale agreements complete immediately following the Transactions with ARWA.

VivoPower Australia operates two photovoltaic solar array projects in Australia and, through its holding in VivoPower Singapore, in Singapore. The acquisition of VivoPower Australia is presented as a business combination acquisition within the pro forma combined statement of financial position and statement of loss.

Changes in investments prior to the Transactions

Aevitas purchase of JA Martin non-controlling interest

On May 27, 2016, Aevitas acquired the remaining 15% interest in the ordinary shares of J.A Martin Electrical Pty Limited (“JA Martin”) that it did not already own from management shareholders for cash consideration of $1.1 million. Following this transaction, JA Martin became a 100% owned subsidiary of Aevitas. The company funded the purchase via a loan from a wholly owned subsidiary of AWN.

Aevitas sale of 7% of VivoPower Australia

On July 21, 2016, Aevitas sold 519,527 VivoPower Australia ordinary shares to a wholly owned subsidiary of AWN for a purchase consideration of $1.6 million. The consideration comprises the settlement of a $1.1 million loan owed to a wholly owned subsidiary of AWN, plus a receivable of $0.5 million which is payable on completion of the business combination.

VivoPower International Plc purchase of IS-31

On July 29, 2016, a wholly owned subsidiary of VivoPower purchased Innovative Solar 31, LLC (“NC-31”) for $2.1 million in cash. NC-31 holds only limited intangible assets, including a 10-year power purchase agreement, interconnect agreement and land lease which will be developed into a 34.2 MW AC solar project in North Carolina and was accounted for as an asset acquisition. Once development is completed in early 2017, 85.55% of the project is expected to be sold to an unrelated third party. As the project is expected to be developed and sold, the $2.1 million paid to purchase NC-31 plus notes receivable of $4.1 million over the project have been reclassified to inventory.

AS OF THE DATE HEREOF, VIVOPOWER HAS NOT FINALIZED THE DETAILED VALUATION NECESSARY TO DETERMINE THE FAIR VALUE OF ASSETS AND LIABILITIES OF AEVITAS AND VIVOPOWER AUSTRALIA ACQUIRED BY VIVOPOWER. THE FINAL PURCHASE PRICE AND ACQUIRED ASSETS AND LIABILITIES WILL ONLY BE DETERMINED AFTER COMPLETION OCCURS. CONSEQUENTLY, THESE ADJUSTMENTS REFLECT MANAGEMENT’S PRELIMINARY ESTIMATES OF FAIR VALUE NECESSARY TO PREPARE THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION AND ARE BASED ON INFORMATION AVAILABLE AT THIS TIME. THESE ALLOCATIONS WILL BE FINALIZED BASED ON VALUATION AND OTHER STUDIES TO BE COMPLETED. THE ACTUAL ADJUSTMENTS MAY DIFFER AS ADDITIONAL INFORMATION BECOMES AVAILABLE AND ADDITIONAL ANALYSIS IS PERFORMED BY MANAGEMENT. ACCORDINGLY, THE PURCHASE PRICE ALLOCATION ADJUSTMENTS AND RELATED IMPACTS ON THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION ARE PRELIMINARY AND ARE SUBJECT TO REVISION, WHICH MAY BE MATERIAL, AFTER THE COMPLETION OF THE ALLOCATION.

THIS UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION IS FOR ILLUSTRATIVE INFORMATIONAL PURPOSES ONLY AND IS NOT NECESSARILY INDICATIVE OF THE RESULTS OF OPERATIONS THAT WOULD HAVE BEEN ACHIEVED HAD THE ACQUISITION ACTUALLY TAKEN PLACE AT THE DATES INDICATED, AND DOES NOT PURPORT TO BE INDICATIVE OF THE FUTURE FINANCIAL POSITION OR OPERATING RESULTS. ACTUAL ADJUSTMENTS MAY DIFFER FROM THE PRO FORMA ADJUSTMENTS.

IN THIS REGARD, THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION DOES NOT GIVE EFFECT TO (I) THE STAGE OF COMPLETION AND FINANCING OF THE NC-31 PROJECT OR ESTIMATED FUTURE CONSTRUCTION, DEVELOPMENT OR FINANCING COSTS OR REVENUES, (II) THE PROPOSED DISPOSITION OF THE NC-31 PROJECT ON ACHIEVING COMPLETION OF DEVELOPMENT, (III) ESTIMATED HEAD OFFICE AND CORPORATE COSTS ASSOCIATED WITH OPERATING THE GROUP AS A PUBLIC COMPANY, INCLUDING MANAGEMENT SHARE BASED COMPENSATION ARRANGEMENTS AND INVESTMENT BANKING FEES, (IV) CHANGES IN ESTIMATES SUBSEQUENT TO THE DATES OF SUCH FINANCIAL INFORMATION, (V) RESTRUCTURING CHARGES THAT MAY BE INCURRED TO FULLY INTEGRATE AND OPERATE THE COMBINED ENTERPRISE MORE EFFICIENTLY, OR (VI) POSSIBLE CHANGES IN THE CAPITAL STRUCTURE OF THE COMBINED ENTERPRISE.

FUTURE OPERATING RESULTS MAY DIFFER MATERIALLY FROM THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION PRESENTED BELOW DUE TO VARIOUS FACTORS INCLUDING THOSE DESCRIBED IN THE SECTIONS ENTITLED “ RISK FACTORS ”, AND “ DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS ” AND ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS.

VivoPower International PLC
Unaudited Pro Forma Combined Statement of Financial Position
As at March 31, 2016
(in thousands of U.S. Dollars ($))

	VivoPower			Aevitas ⁽ⁱ⁾			Vivo Power Australia ⁽ⁱ⁾			Pro Forma Adjustments			Notes	Merger with ARWA			PPA for Aevitas & VivoPower Australia			Notes	Pro forma Combined
Notes														(d)
Assets
Current assets
Cash and cash equivalents		28			1,419			672			(2,100	)	(c)		41,036			(33,690	)	(e)		7,365
Trade and other receivables		-			5,404			62			451		(b)		-			-				5,917
Inventories		-			364			-			9,975		(c)		-			-				10,339
Other assets		-			136			174			-				-			-				310
Total current assets		28			7,323			908			8,326				41,036			(33,690	)			23,931
Non-current assets
Investments in associates		-			-			-			4,527		(b)		-			(4,527	)	(g)		-
Note receivable		7,875			-			-			(7,875	)	(c)		-			-				-
Property, plant and equipment		3			1,388			953			-				-			-				2,344
Intangible assets		-			9,509			835			-				-			45,007		(e)(f)		55,351
Other non-current assets		-			-			503			-				-			-				503
Deferred tax assets		-			956			5			(478	)			-			-				483
Total non-current assets		7,878			11,853			2,296			(3,826	)			-			40,480				58,681
Total Assets		7,906			19,176			3,204			4,500				41,036			6,790				82,611
Liabilities
Current Liabilities
Trade and other payables		186			2,735			115			-				-			1,456		(e)		4,492
Borrowings – related party		8,001			-			-			-				-			-				8,001
Borrowings		-			1,203			-			(24	)	(a) (b)		-			-				1,179
Employee benefits		-			1,299			-			-				-			-				1,299
Current tax liabilities		-			97			-			-				-			-				97
Total current liabilities		8,187			5,334			115			(24	)			-			1,456				15,068
Non-current liabilities
Borrowings		-			16,244			1,032			-				-			(16,099	)	(e)		1,177
Employee benefits		-			218			-			-				-			-				218
Deferred tax liabilities		-			6			-			1,359				-			5,781				7,146
Total non-current liabilities		-			16,468			1,032			1,359				-			(10,318	)			8,541
Total liabilities		8,187			21,802			1,147			1,335				-			(8,862	)			23,609
Net assets		(281	)		(2,626	)		2,058			3,165				41,036			15,652				59,003
Equity
Contributed equity		-			15,418			3,643			-				49,512			(818	)	(e)(f)		67,754
Accumulated losses		(281	)		(19,284	)		(1,586	)		4,405		(a) (b)		(8,476	)		16,464		(e)(f)		(8,758	)
Total parent entity interest		(281	)		(3,866	)		2,058			4,405				41,036			15,646		(f)(g)		58,997
Non-controlling interests		-			1,240			-			(1,240	)	(a)		-			6		(e)		6
Total equity		(281	)		(2,626	)		2,058			3,165				41,036			15,652				59,003

⁽ⁱ⁾ The financial statements have been converted to U.S. dollars for the unaudited pro forma combined statement of financial position at the rate of 0.7664 AUD/USD

See notes to unaudited pro forma combined financial statements.

VivoPower International PLC
Unaudited Pro Forma Combined Statement of Income
For the year ended March 31, 2016
(in thousands of U.S. dollars ($) except per share amounts)

	VivoPower			Aevitas ⁽ⁱ⁾			VivoPower Australia ⁽ⁱ⁾			Pro forma Adjustments			Notes	Pro forma combined
Sales revenue		-			26,099			60			-				26,159
Cost of sales		-			(23,310	)		(11	)		-				(23,321	)
Gross profit		-			2,789			49			-				2,838
Other income		-			311			289			(167	)	(k)		433
Selling costs		-			-			(168	)		167		(k)		(1	)
Occupancy costs		-			(315	)		(29	)		-				(344	)
Administrative expenses		(279	)		(2,817	)		(1,240	)		(2,895	)	(h)		(7,231	)
Impairment of intercompany loans		-			(22	)		-			-				(22	)
Impairment expense		-			-			(15	)		-				(15	)
Finance costs		(2	)		(1,476	)		(26	)		1,365		(i)		(139	)
Share of net losses of equity accounted associates		-			(211	)		-			211		(j)		-
Loss before income tax		(281	)		(1,741	)		(1,141	)		(1,318	)			(4,481	)
Income tax (expense) / benefit		-			(216	)		5			459		(l)		248
Loss for the year		(281	)		(1,957	)		(1,137	)		(860	)			(4,233	)
Loss attributable to:
Members of VivoPower		(281	)		(2,035	)		(1,137	)		(780	)			(4,232	)
Non-controlling interest		-			78			-			(79	)	(m)(n)		(1	)

Loss per share (basic and diluted) $ per share		(0.05	)		n/a			n/a			n/a				(0.25	)
Weighted average shares outstanding (basic and diluted)		5,514,375			n/a			n/a			n/a				16,914,137

⁽ⁱ⁾ The financial statements have been converted to U.S. dollars for the unaudited pro forma combined statement of income at the rate of 0.7364 AUD/USD

See notes to unaudited pro forma combined financial statements.

1.	Basis of Preparation

The consolidated financial statements of VivoPower and each of the respective financial statements of the Aevitas and VivoPower Australia were prepared in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”). The unaudited pro forma combined financial information is presented in an abbreviated form and therefore does not comply with all presentation and disclosure requirements of IFRS.

Acquisition method of accounting and purchase price allocation - The unaudited pro forma combined financial information shows the impact of the Aevitas and VivoPower Australia acquisitions on VivoPower’s combined financial position and results of operations under the acquisition method of accounting with, in each case, VivoPower being treated as the accounting acquirer.

VivoPower estimated the purchase price of Aevitas to be $33.1 million and estimated the purchase price of 80.1% of VivoPower Australia to be $18.8 million.

Under the acquisition method of accounting, the identifiable assets acquired and liabilities assumed will be measured at their fair values on the acquisition date. The unaudited pro forma combined financial information therefore includes estimated adjustments to record the assets and liabilities at their respective fair values and represented management’s best estimates based on information available at this time. The pro forma adjustments may be revised as additional information becomes available and additional analysis is performed. The unaudited pro forma combined financial statements are derived from these adjustments and are also subject to change. The final allocation of the purchase price will be determined after completion of a final analysis to determine the fair values of Aevitas’s and VivoPower Australia’s identifiable assets and liabilities as of the date of the acquisitions. The final acquisition accounting adjustments may be materially different from the pro forma adjustments presented in this document.

Foreign currency translation - The VivoPower group has a reporting currency of U.S. dollars, and the functional currency for most entities in the group is their local currency. Foreign currency transactions are translated into the functional currency using the current exchange rate as of the date of transaction. At each period end, monetary items denominated in a foreign currency are translated into the functional currency of the relevant entity using the period end spot rate. In preparing the group’s consolidated financial statements, financial statements not denominated in U.S. dollars have been converted to U.S. dollars for the pro forma at the spot rate of 0.7664 AUD/USD for accounts in the statement of financial position, and at the average rate for the year then ended of 0.7364 AUD/USD for accounts in the statement of financial performance.

Intercompany transactions - Transactions and balances between VivoPower and the acquired entities have been eliminated in the unaudited pro forma combined financial statements.

Goodwill - The excess of consideration paid over Aevitas and VivoPower Australia’s identifiable net assets acquired (after recognition of the adjustments above) has been allocated to goodwill. Goodwill reflects the anticipated benefits of the acquisition that are in addition to the fair value of the separately identifiable assets and liabilities. Goodwill is recognized in intangible assets in the Unaudited Pro Forma Combined Statement of Financial Position. Goodwill that arises in a business combination is required to be attributed to the combined enterprise’s individual cash generating units. A cash generating unit is a separate group of assets that generates cash flows independently of other parts of the business. The allocation of goodwill is to be completed post-acquisition as a part of the purchase price allocation.

Tax basis - The tax basis of identified intangible assets are deductible for tax purposes at ordinary rates. Goodwill recognized is not deductible for tax purposes

2.	Unaudited Pro forma Combined Statement of Financial Position A djustments

(a)

Purchase of JA Martin non-controlling interest by Aevitas

This adjustment reflects the funding and purchase by Aevitas of a 15% non-controlling interest in JA Martin, a consolidated subsidiary of Aevitas, for $1.1 million in cash. This adjustment assumes Aevitas funded the purchase via a loan of $1.1 million from a wholly owned subsidiary of AWN. The book value of the non-controlling interest was $1.2 million resulting in a $0.1 million increase in retained earnings of Aevitas. Following the purchase, Aevitas would consolidate 100% of JA Martin.

(b)

Aevitas sale of 7% of VivoPower Australia

This adjustment reflects the sale by Aevitas of a 7.0% interest in the ordinary shares of VivoPower Australia to a wholly owned subsidiary of AWN for consideration of $1.6 million. The consideration comprises settlement of a $1.1 million loan owed to a wholly owned subsidiary of AWN plus a receivable of $0.5 million which is now payable on completion of the business combination.

Pre-tax Gains totalling $6.1 million are expected to be recognised in retained earnings on the sale of the 7.0% and the revaluation of the residual 19.9% interest in VivoPower Australia which will continue to be held by Aevitas, but accounted for as an available for sale security instead of an associate due to the loss of significant influence. A deferred tax liability of $1.8 million on this expected gain has also been recorded with a corresponding reduction to retained earnings.

(c)

Reclassification of NC-31 to inventory

This adjustment reflects the purchase of NC-31 for $2.1 million in cash and the reclassification of notes receivable from NC-31 to inventory. NC-31 holds only limited intangible assets, including a 10-year power purchase agreement, interconnect agreement and land lease which will be developed into a 34.2 MW AC solar project in North Carolina and was accounted for as an asset acquisition. Once development is completed in early 2017, 85.55% of the project is expected to be sold to an unrelated third party. As the project is expected to be sold, the $2.1 million paid to purchase NC-31 plus notes receivable of $4.1 million have been reclassified to inventory. Pro forma inventory at March 31, 2016 includes the acquired project NC-31 in the amount of $6.2 million and the right to acquire NC-47 in the amount of $3.8 million.

(d)

Transactions with ARWA

This adjustment reflects the completion of the Transactions with ARWA and will result in an increase of cash of $41.0 million and increase in VivoPower ordinary shares. Costs associated with the transaction, to the extent they are not directly related to the issuance of new VivoPower ordinary shares, have been reflected in retained earnings.

(e)

Purchase of Aevitas

This adjustment reflects the purchase accounting adjustments for VivoPower's acquisition of 99.9% of the ordinary shares of Aevitas for an estimated $9.7 million, as well as the redemption of Notes for an estimated $16.1 million and Convertible Preference Shares for an estimated $7.3 million inclusive of accrued interest and unpaid dividend obligations.

Aevitas	Preliminary Purchase Price (in $ thousands)
Cash paid for ordinary shares		9,731
Cash paid for the redemption of notes		16,098
Cash paid for the redemption of convertible preference shares		7,286
Total		33,115

The preliminary estimated fair values for the assets, liabilities and contingent liabilities recognised in the unaudited pro forma combined statement of financial position as at March 31, 2016, as a result of the Aevitas acquisition are listed below and have been determined on a provisional basis, pending completion of independent valuations at the actual date of acquisition and management’s further assessment and review.

Aevitas	Preliminary Allocation of Purchase Price (in $ thousands)
Cash and cash equivalents		883
Trade and other receivables		5,855
Inventories		364
Other assets		136
Investments in associates		4,527
Property, plant and equipment		1,388
Definite lived intangible assets		16,469
Goodwill (included within intangible assets)		10,979
Deferred tax assets		956
Trade and other payables and deferred revenue		(4,192	)
Borrowings		(642	)
Employee benefits		(1,299	)
Current tax liabilities		(97	)
Non-current borrowings		(146	)
Non-current employee benefits		(218	)
Deferred tax liabilities		(1,842	)
Total net assets		33,121
Less non-controlling interest		(6	)
Total net assets acquired by VivoPower		33,115

Deferred revenue of $1.5 million was recognised in addition to adjustments to Aevitas identifiable intangible assets to reflect fair values (in $ thousands):

Type of Asset	Fair Value		Adjustment		Useful Life
Customer relationships		10,979		10,979		9.5
Trade Names		2,745		2,745		14.5
Supply Contract		2,745		2,745		4
Total		16,469		16,469

(f)

Purchase of VivoPower Australia

This adjustment reflects the purchase accounting adjustments for VivoPower’s acquisition of an 80.1% interest in the ordinary shares of VivoPower Australia for the issuance of 1.8 million new shares in VivoPower and the purchase, by MidCo, of 100% of the Series B Redeemable Pref Shares for $0.6 million in cash, representing total consideration of $18.8 million.

The preliminary estimated fair values for the assets, liabilities and contingent liabilities recognised in the unaudited pro forma combined statement of financial position as at March 31, 2016, as a result of the VivoPower Australia acquisition are listed below and have been determined on a provisional basis, pending completion of independent valuations at the actual date of acquisition and management’s further assessment and review.

VivoPower Australia	Preliminary Allocation of Purchase Price (in $ thousands)
Cash and cash equivalents		672
Trade and other receivables		62
Other current assets		174
Property, plant and equipment		953
Deferred tax assets		5
Goodwill (included within intangible assets)		12,399
Other non-current assets		503
Intangible assets		9,723
Trade and other payables		(67	)
Accrued annual leave		(48	)
Non-current borrowings		(1,032	)
Net assets of 100% of VivoPower Australia		23,344
Non-controlling interest in net assets acquired		(4,526	)
Net assets acquired directly by VivoPower		18,818

Adjustments to VivoPower Australia net assets to reflect fair values:

Type of Asset	Fair Value		Adjustment		Useful Life
Database		892		892		5
Solar contracts		779		-		20
Customer contracts		8,027		8,027		10
Other intangibles		24		-		14
Total		9,722		8,919

(g)

Eliminate investment and non-controlling interest in VivoPower Australia

VivoPower has achieved 99.9% ownership in VivoPower Australia through its direct 80.1% ownership and through the 19.9% interest it has acquired through Aevitas. In the consolidated pro forma statement of financial position, Aevitas’s investment of $4.5 million and VivoPower’s non-controlling interest of $4.5 million are eliminated against each other. Once VivoPower Australia is a consolidated subsidiary of VivoPower, Aevitas’s deferred tax liability of $1.8 million related to the investment in VivoPower Australia is eliminated against goodwill ($0.7 million) and intangible assets ($1.1 million).

Unaudited Pro Forma Statement of Income Adjustments

All pro forma adjustments to the unaudited pro forma combined statement of income are deemed to have recurring effects. The individual pro forma adjustments are further described in the footnotes.

Pro forma adjustments are made for events that are (i) directly attributable to the Aevitas and VivoPower Australia acquisitions, (ii) factually supportable and (iii) with respect to the statement of income, expected to have a continuing impact on the combined results.

(h)

Amortisation of identifiable intangible assets recognised in the proposed business combination

This adjustment recognises the amortisation expense of $2.9 million on the identifiable intangible assets recognised in adjustments (d) and (e) over their useful lives as if the proposed business combinations had occurred on April 1, 2015.

(i)

Add back interest on Aevitas notes

This adjustment reverses interest expense of $1.4 million recorded in Aevitas related to the notes outstanding. This adjustment assumes these notes were redeemed as part of the proposed business combinations as if they had occurred on April 1, 2015.

(j)

Eliminate investment and non-controlling interest in VivoPower Australia

VivoPower has achieved 99.9% ownership in VivoPower Australia through its direct 80.1% ownership and through the 19.9% interest it has acquired through Aevitas. As VivoPower consolidates VivoPower Australia, this adjustment eliminates Aevitas’s $0.2 million share of net losses of equity-accounted associate as if 99.9% ownership of VivoPower Australia had been achieved on April 1, 2015. This adjustment also recognises the $0.0 million non-controlling interest in the profits of Aevitas not owned by VivoPower.

(k)

Eliminate intercompany transactions between Aevitas and VivoPower Australia

Aevitas provided $0.2 million of sales resources at cost to VivoPower Australia. This adjustment eliminates the revenue recorded in other income of Aevitas and a selling cost within VivoPower Australia during the year ended March 31, 2016.

(l)

Tax impact of adjustments

The income tax expense impact of adjustments (g) and (h) is determined by applying the Australia statutory tax rate of 30% to each of the adjustments.

(m)

Eliminate JA Martin non-controlling interest in profits

This adjustment reflects the purchase of a 15% non-controlling interest JA Martin and a $0.8 million elimination of the non-controlling interest in the profits of JA Martin as if the non-controlling interest had been eliminated as of April 1, 2015.

(n)

Loss per share

Pro forma loss earnings per equity share for the year ended March 31, 2016 have been calculated based on the estimated average number of equity shares outstanding on a pro forma basis assuming that the Transactions took place at April 1, 2015 as set out below. Basic and diluted EPS are the same as no potential dilutive shares were identified in the pro forma financial statements.

VivoPower	No of shares ‘000
Weighted average shares outstanding of VivoPower	5,514
Shares issued as part of capital restructure	205
Ordinary shares issued to ordinary shareholders of ARWA on merger with ARWA	8,127
Ordinary shares issued to rights holders of ARWA on merger with ARWA	879
Ordinary shares issued to warrant holders on merger with ARWA	439
Ordinary shares issued on the acquisition of VivoPower Australia	1,750
Weighted average shares outstanding of VivoPower after the Proposed Business Combination	16,914

The loss per share does not include the financial impact of the Unit Purchase Option that had been granted by ARWA to EarlyBirdCapital, Inc. This Unit Purchase Option effectively provides an option by which EarlyBirdCapital, Inc. can purchase up to 720,000 units in ARWA on the consummation of a business combination at an exercise price $10.00 per unit. Given the Unit Purchase Option is antidilutive to the group’s operating loss, it has not been considered in the calculation of any per share metrics.

3.	Commitments, contingencies and proposed disposition of the NC-31 Project

The pro forma financial information does not give effect to the construction and completion of the NC-31 Project.

The total equity and debt finance necessary to fund the project is estimated to be $79.4 million, of which $4.1 million had been paid by VivoPower at March 31, 2016.

The project has in place a solar power facility Engineering, Procurement and Construction Agreement with Grupo Gransolar, LLC, and a Module Supply Agreement with Canadian Solar (USA) Inc. The project is anticipated to achieve its commercial operation date (“COD”) in January 2017. The Project will sell power to Duke Energy Progress, LLC (“Duke Energy”), under a 10-year power purchase agreement (the “PPA”).

On July 29, 2016, the project received debt financing in the form of Construction Loans with a principal amount of $35.3 million and ITC Bridge Loans with a principal amount of up to $25.7 million from KeyBank National Association as administrative agent. The project also entered into agreements with Firstar Development, LLC to receive tax equity investment of $27.0 million, which will be contributed primarily upon the project achieving COD and will be used to repay the ITC Bridge Loans.

On July 29, 2016, VivoPower US-NC-31, LLC also entered into an agreement for US-NC-31 Sponsor Partner, LLC (“Sponsor Partner”) to receive an Equity Capital Contribution Amount (“ECCA”) from NES US NC-31, LLC (“NES”) of $41.7 million upon the NC-31 Project achieving COD. This contribution would entitle NES to 100% of the Class A membership interests in Sponsor Partner, representing 85.55% of the allocation and distribution entitlements of the Sponsor Partner from the project. VivoPower US-NC-31, LLC would hold 100% of the Class B membership interests, representing 14.45% of the allocation and distribution entitlements of the Sponsor Partner. The proceeds will be used to settle the Construction Loans utilized to partially fund the $79.4 million expected construction cost and fund payment of a build and transfer fee of $11.6 million that will be paid to Vivo USA, net of any construction cost risks.

THE DISSOLUTION PROPOSAL

General

ARWA is seeking shareholder approval of the Dissolution Proposal at the extraordinary general meeting. The dissolution of ARWA was approved by ARWA’s board of directors on August 11, 2016, subject to shareholder approval. The dissolution of ARWA, if approved, also would be subject to and conditional upon the approval of the Contribution Proposal and the completion of the Transactions, including the Contribution and subsequent distribution of the VivoPower shares ARWA will receive in such Contribution. By approving the Dissolution Proposal, ARWA’s shareholders will be approving the voluntary winding up of ARWA under the Companies Law (2013 Revision) of the Cayman Islands (“Companies Law”) following distribution of the VivoPower shares it will acquire upon consummation of the Transactions and will be approving the appointment of [●] to act as liquidator in accordance with ARWA’s second amended and restated memorandum and articles of association and the Companies Law. The text of the dissolution proposal to be considered at the extraordinary general meeting is set forth in Annex E .

VivoPower and AWN will play no role in the dissolution of ARWA and has no responsibility for the dissolution of ARWA. The information contained in this proxy statement/prospectus in “ The Dissolution Proposal ” section and all other information in this proxy statement/prospectus relating to the dissolution and liquidation of ARWA is the responsibility of ARWA. All such information constitutes part of the proxy statement of ARWA but does not constitute part of the prospectus of VivoPower.

Upon the closing of the Transactions, ARWA will transfer substantially all of its assets to VivoPower. At or promptly following the closing of the Transactions, ARWA expects that it will:

●

pay all outstanding amounts due to former ARWA shareholders who properly exercised their conversion rights in connection with the vote to approve the Contribution Proposal;

●

distribute to ARWA shareholders (including the former rightholders) the VivoPower shares received in the Contribution to ARWA’s shareholders and warrantholders;

●

distribute to former ARWA warrantholders the VivoPower shares they are owed for their ARWA warrants, provided that the Warrant Amendment Proposal has been approved;

●

pay all outstanding transaction fees and expenses payable to its professional advisors upon consummation of the Transactions; and then

●

proceed with the voluntary winding up of ARWA in accordance with Cayman Islands law.

If the Dissolution Proposal is approved, ARWA’s board of directors will take such actions as it deems, in its absolute discretion, necessary, appropriate or advisable to effect ARWA’s liquidation and dissolution.

Reporting Requirements

Whether or not ARWA’s Dissolution is approved, ARWA has an obligation to continue to comply with the applicable reporting requirements of the Exchange Act, even if compliance with such reporting requirements is economically burdensome. If the Dissolution is approved by ARWA’s shareholders, after filing its notice of winding up, in order to curtail expenses, ARWA expects to seek relief from the SEC from the reporting requirements under the Exchange Act (other than with respect to the filing of current reports on Form 8-K), but there can be no assurances that such relief will be granted by the SEC.

Trading of ARWA’s Securities

ARWA currently intends to close its securities transfer books on the dissolution date and, at such time, cease recording securities transfers (other than transfers by will, intestate succession or operation of law) and issuing securities certificates (other than replacement certificates). Accordingly, it is expected that trading in ARWA’s securities will cease on such date.

ARWA’s securities are currently traded on the Nasdaq Capital Market. ARWA will notify Nasdaq to cease quotation of ARWA’s securities on and after the dissolution date.

ARWA intends to make a public announcement of the anticipated filing date of the notice of winding up in advance of the filing.

Regulatory Approvals

No United States federal or state regulatory requirements must be complied with or approvals obtained in connection with the dissolution. ARWA must comply with certain requirements of the Companies Law in order to effectuate the dissolution.

Appraisal Rights

Under Cayman Islands law, ARWA’s shareholders are not entitled to appraisal rights for their securities in connection with the transactions contemplated by the Dissolution or to any similar rights of dissenters.

Required Vote

The approval of the Dissolution Proposal will require a special resolution (being a resolution passed by a majority of at least two-thirds of members who, being entitled to do so, vote at the extraordinary general meeting). Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not deemed voted and will have no effect on such proposal. The Dissolution Proposal is conditioned upon the approval of the Contribution Proposal. If the Contribution Proposal is not approved, the Dissolution Proposal will not be presented at the meeting.

ARWA’S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “ FOR ” THE APPROVAL OF THE DISSOLUTION PROPOSAL.

THE INCENTIVE PLAN PROPOSAL

General

ARWA is presenting the Incentive Plan to its shareholders for approval. The Incentive Plan is contained in the articles of association of MidCo. The purpose of the Incentive Plan is to assist in attracting, retaining, motivating, and rewarding certain key employees, directors and consultants of VivoPower and its subsidiaries and promoting the creation of long-term value for shareholders of VivoPower by closely aligning the interests of such individuals with those of such shareholders. The Incentive Plan authorizes the award of shares of VivoPower and MidCo to encourage eligible employees to expend maximum effort in the creation of shareholder value. The text of the incentive plan proposal to be considered at the extraordinary general meeting is set forth in Annex E .

Description of Incentive Plan

The following description of the Incentive Plan is only a summary of certain provisions thereof and is qualified in its entirety by reference to its full text, a copy of which is included as Annex B to this proxy statement/prospectus.

Overview of the Management Incentive Arrangements

Following completion of the Transactions and subject to the receipt of ARWA shareholder approval, VivoPower will implement the Incentive Plan through VivoPower’s subsidiary, MidCo.

Information on awards to be made following completion of the Transactions and the principal features of the Incentive Plan are summarised below.

The Management Incentive Plan

Status

It is expected that the Incentive Plan will be adopted by VivoPower [●] days following completion of the Transactions and receipt of ARWA shareholder approval through the filing of MidCo’s articles of association. Under the Incentive Plan, MidCo may issue to eligible participants non-voting Ordinary A Shares.

Eligibility

All employees and directors of VivoPower and its subsidiaries are eligible for selection to participate in the Incentive Plan at the discretion of VivoPower’s board, although it is intended that the Incentive Plan will be operated for senior management of VivoPower.

Participation in the Incentive Plan by the directors of VivoPower and the terms of their participation will be determined by the Compensation Committee.

Award of Shares and Put Options

The board may award Ordinary A Shares to eligible employees within [●] days of completion of the Transactions or on an annual basis thereafter for new joiners. Each financial year, if MidCo's EBITDA has grown by 8% from the previous financial year the board must deem that a number of Ordinary A Shares owned by each holder of Ordinary A Shares have vested.

To realise the value of the vested shares, recipients of the Ordinary A Shares will also receive a put option (the “Put Option”) which may be exercised in two separate periods in a given financial year to the extent a holder of the Ordinary A Shares is not in possession of material nonpublic information in relation to VivoPower. The Put Option will entitle a holder of Ordinary A Shares to put all their vested shares to VivoPower in exchange for cash and/or VivoPower shares, at the election of VivoPower.

For the purposes of the Incentive Plan, any calculations in relation to growth in EBITDA (including any calculations as to the valuation of the Ordinary A Shares as outlined below) exclude any EBITDA that is contributed to MidCo by way of a business acquisition.

Valuation of Ordinary A Shares When Put to VivoPower

The aggregate consideration payable if all the Ordinary A Shares were to be put to VivoPower pursuant to the Put Option will be equal to 20% of the U.S. dollar amount by which MidCo's EBITDA exceeds the Hurdle. The “Hurdle” will be the EBITDA from the previous financial year multiplied by 1.08. If the Hurdle is not exceeded then the Ordinary A Shares will be deemed not to have any value for that financial year.

The consideration payable upon exercise of a Put Option can take the form of either VivoPower shares or cash, at VivoPower’s discretion.

Holding period

If any Ordinary A Shareholder receives VivoPower shares as consideration under the exercise of a Put Option, they will be required to retain 20% of these shares for two years from the date of receipt of these VivoPower shares.

Cessation of employment

Upon a participant ceasing to be employed, their Ordinary A Shares will be transferred to VivoPower for the following consideration: (i) to the extent that the participant is a “Bad Leaver,” they will receive 80% of the value of any vested Ordinary A Shares from prior financial years that have not yet been sold via a Put Option, or (ii) to the extent a Bad Leaver does not hold any vested shares, any Ordinary A Shares held will be bought back by VivoPower for nominal consideration.

To the extent a participant is a “Good Leaver,” their Ordinary A Shares will be transferred to VivoPower for the following consideration: (i) 100% of the value of any vested shares from prior financial years that have not yet been sold via a Put Option, or (ii) to the extent the participant does not hold any such shares, any Ordinary A Shares held will be bought back by VivoPower for nominal consideration.

A participant is a Bad Leaver if they are dismissed for: fraud, gross misconduct, any criminal conviction involving their moral turpitude, use of alcohol or substances which inhibit their ability to perform their role, or if the participant (who is a resident in the USA) pleads guilty or no contest in relation to an alleged criminal offence or any other conduct which has brought the leaver, MidCo or VivoPower into disrepute. A participant is also a Bad Leaver if they voluntarily resign and within 6 months begin employment with a competitor or starts a business which competes with VivoPower.

A participant is a Good Leaver if the participant is neither a Bad Leaver, nor declared bankrupt, nor had a receiver holding a power of sale appointed. For the avoidance of doubt, any leaver who is declared bankrupt or had a receiver in relation to their affairs appointed shall transfer their Ordinary A Shares to VivoPower for nominal value.

Corporate events

In the event of a return on capital on any shares in MidCo, on a liquidation or winding up or upon any sums being received on a disposal of assets or a disposal of shares in MidCo or a member of MidCo's group (all outside of the ordinary course of business) shall be distributed first to VivoPower until VivoPower has received an amount equal to $175 million compounded at 8% annually (“Market Hurdle”) for each subsequent calendar year, then secondly on the basis of 80% to VivoPower and 20% to the holders of Ordinary A Shares.

Provisions applying to the Management Incentive Plan

Dividends

Subject to a return of capital pursuant to any of the corporate events outlined above taking place, unless the Board passes a resolution authorising their participation the holders of the Ordinary A Shares will have no right to participate in any dividends.

Rights attaching to Shares

No Ordinary A Shares shall have any voting rights, other than in relation to matters affecting MidCo’s share capital. Aside from the other circumstances outlined in this section, holders of Ordinary A Shares will have only limited rights to transfer Ordinary A Shares to certain family members, certain trusts associated with them, family charitable foundations associated with them or automatically to VivoPower in the event of their insolvency unless prior written approval from the directors has been received.

Drag Along Sale

If at any time (i) the shareholders of VivoPower propose to sell more than 50% of its ordinary share capital; or (ii) VivoPower proposes to sell more than 50% of MidCo's ordinary share capital through a transaction or series of transactions (both a “Sale”) then VivoPower can designate any such Sale a “Drag Along Sale” pursuant to which all holders of Ordinary A Shares will be required to sell their Ordinary A Shares to the proposed transferee. The consideration for the Drag Along Sale shall be equal to 20% of the amount by which the consideration payable to VivoPower or VivoPower's shareholders (as the case may be) exceeds the Market Hurdle (or a pro-rated amount if less than 100% of MidCo or VivoPower, as the case may be is sold) which shall be paid to each Ordinary A Shareholder on a pro rata basis.

Tag Along Sale

In the event of a Sale (other than where a Drag Along Sale is being conducted) no Sale shall be completed unless VivoPower has procured that the proposed transferee shall offer to acquire the Ordinary A Shares on the same terms other than that the consideration payable to the holders of the Ordinary A Shares shall be equal to 20% of the amount by which the consideration payable to VivoPower or VivoPower's shareholders (as the case may be) exceeds the Market Hurdle (or a pro-rated amount if less than 100% of MidCo or VivoPower, as the case may be is sold) which shall be paid to each Ordinary A Shareholder on a pro rata basis. This offer will remain open for 7 days following the making of the offer.

New Plan Benefits

The benefits or amounts that will be received by or allocated to any executive officers or employees under the Incentive Plan are not currently determinable since no specific grants have been decided upon and no grants will be made prior to the Incentive Plan’s approval by ARWA’s shareholders.

Required Vote

The approval of the Incentive Plan Proposal will require an ordinary resolution (a resolution passed by a majority of members who, being entitled to do so, vote at the extraordinary general meeting). Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not deemed voted and will have no effect on such proposal. The Incentive Plan Proposal is conditioned upon the approval of the Contribution Proposal. If the Contribution Proposal is not approved, the Incentive Plan Proposal will not be presented at the meeting.

ARWA’S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “ FOR ” THE APPROVAL OF THE INCENTIVE PLAN PROPOSAL.

THE SHAREHOLDER ADJOURNMENT PROPOSAL

The Shareholder Adjournment Proposal, if adopted, will allow ARWA’s board of directors to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation of proxies. The text of the shareholder adjournment proposal to be considered at the extraordinary general meeting is set forth in Annex E .

The Shareholder Adjournment Proposal will only be presented to shareholders in the event, based on the tabulated votes, ARWA is not authorized to consummate the Transactions or the closing conditions under the Contribution Agreement are not met. In no event will ARWA solicit proxies to adjourn the extraordinary general meeting or consummate the Transactions beyond the date by which it may properly do so under its second amended and restated memorandum and articles of association and Cayman Islands law. The purpose of the Shareholder Adjournment Proposal is to provide more time for the ARWA initial shareholders, AWN and the AWN securityholders to make purchases of public shares or other arrangements that would increase the likelihood of obtaining a favorable vote on the Contribution Proposal and to meet the requirement that the holders of 2,732,400 or less of the public shares exercise their right to convert their public shares into a pro rata portion of the trust account. See the section entitled “ The Contribution Proposal — Interests of ARWA’s Directors and Officers in the Transactions .”

Consequences If the Shareholder Adjournment Proposal Is Not Approved

If the Shareholder Adjournment Proposal is presented to the meeting and is not approved by the shareholders, ARWA’s board of directors may not be able to adjourn the extraordinary general meeting to a later date in the event, based on the tabulated votes, there are not sufficient votes at the time of the extraordinary general meeting to approve the consummation of the Transactions (because either the Contribution Proposal is not approved or because the holders of more than 2,732,400 of the public shares exercise their right to convert their public shares into a pro rata portion of the trust account). In such event, the transactions would not be completed.

Required Vote

The approval of the Shareholder Adjournment Proposal will require an ordinary resolution (a resolution passed by a majority of members who, being entitled to do so, vote at the extraordinary general meeting). Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, are not deemed voted and will have no effect on such proposal. The Shareholder Adjournment Proposal is not conditioned upon the approval of any of the other proposals.

THE ARWA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ARWA SHAREHOLDERS VOTE “ FOR ” THE APPROVAL OF THE ADJOURNMENT PROPOSAL.

THE WARRANT AMENDMENT PROPOSAL

This section of the proxy statement/prospectus describes the material provisions of the warrant amendment , but does not purport to describe all of the terms of the warrant amendment . This summary is qualified in its entirety by reference to the warrant amendment , a copy of which is attached as Annex C hereto.

In connection with the proposed Transaction, warrantholders are being asked to approve and consent to the warrant amendment. The approval of the Warrant Amendment Proposal is a condition to the consummation of the Transactions.

The proposed warrant amendment provides that, upon consummation of the Transaction, each of ARWA’s outstanding warrants, which entitle the holder thereof to purchase one-half of one ordinary share of ARWA, will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower.

If the requisite warrantholders vote in favor of the Warrant Amendment Proposal and the parties complete the Transactions, then the warrant amendment will be binding on all warrantholders, including warrantholders that did not vote in favor of the Warrant Amendment Proposal, the warrant agreement will be amended, and each outstanding warrant will be exchanged with ARWA for one-twentieth (1/20) of an ordinary share of VivoPower upon consummation of the Transactions.

Certain Effects of the Approval of the Warrant Amendment Proposal

If the Warrant Amendment Proposal is approved, all warrants will be subject to the terms of the warrant amendment whether or not a given holder voted in favor of the Warrant Amendment Proposal.

Required Vote

Pursuant to the warrant agreement, approval of the Warrant Amendment Proposal will require the affirmative vote of the holders of a majority of the then outstanding warrants. Accordingly, abstentions and broker non-votes will have the same effect as a vote against such proposal. The Warrant Amendment Proposal is conditioned on the Contribution Proposal. If the Contribution Proposal is not approved, the Warrant Amendment Proposal will have no effect, even if it is approved by the requisite vote.

THE ARWA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT ARWA WARRANTHOLDERS VOTE “ FOR ” THE APPROVAL OF THE WARRANT AMENDMENT PROPOSAL.

THE WARRANTHOLDER ADJOURNMENT PROPOSAL

The Warrantholder Adjournment Proposal, if adopted, will allow ARWA’s board of directors to adjourn the extraordinary general meeting of warrantholders to a later date or dates, if necessary, to permit further solicitation of proxies. The Warrantholder Adjournment Proposal will only be presented to warrantholders in the event, based on the tabulated votes, there are not sufficient votes at the time of the extraordinary general meeting of warrantholders to approve the Warrant Amendment Proposal presented at the extraordinary general meeting of Warrantholders. In no event will ARWA’s board of directors adjourn the extraordinary general meeting of warrantholders or consummate the Transactions beyond the date by which it may properly do so under its second amended and restated memorandum and articles of association and Cayman Islands law.

Consequences if the Warrantholder Adjournment Proposal is Not Approved

If the Warrantholder Adjournment Proposal is not approved by ARWA warrantholders, ARWA’s board of directors may not be able to adjourn the extraordinary general meeting of warrantholders to a later date in the event, based on the tabulated votes, there are not sufficient votes at the time of the extraordinary general meeting of warrantholders to approve the Warrant Amendment Proposal.

Required Vote

The approval of the Warrantholder Adjournment Proposal, if presented, will require the affirmative vote of the holders of a majority of the then outstanding warrants present and entitled to vote at the meeting. Abstentions are deemed entitled to vote on such proposal. Therefore, they have the same effect as a vote against the proposal. Broker non-votes are not deemed entitled to vote on such proposals and, therefore, they will have no effect on such proposal. Adoption of the Warrantholder Adjournment Proposal is not conditioned upon the adoption of any of the other proposals.

THE ARWA BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT WARRANTHOLDERS VOTE “ FOR ” THE APPROVAL OF THE WARRANTHOLDER ADJOURNMENT PROPOSAL.

OTHER INFORMATION RELATED TO ARWA

Introduction

ARWA was incorporated on October 1, 2014 in order to serve as a vehicle for the acquisition of a target business. ARWA’s efforts to identify a prospective target business were not limited to a particular industry or geographic region, although it focused on target businesses in the Asia Pacific region (with a particular emphasis on South East Asia and Australia) operating in the energy (including solar and alternative energy) industry, or target businesses in such industry operating outside of those geographic locations which ARWA believes would benefit from expanding its operations to such locations. Prior to executing the Contribution Agreement with AWN and VivoPower, ARWA’s efforts were limited to organizational activities, completion of its initial public offering and the evaluation of possible business combinations.

Formation

In October 2014, ARWA issued 1,725,000 insider shares to the Initial Shareholders for an aggregate purchase price of $25,000. On February 22, 2015, ARWA issued an aggregate of 345,000 ordinary shares to the Initial Shareholders by way of capitalization under Cayman Islands law, resulting in the Initial Shareholders owning an aggregate of 2,070,000 ordinary shares. This number included an aggregate of up to 270,000 shares that were subject to compulsory repurchase by the Company; however, due to the full exercise of the over-allotment by the underwriters, no shares were repurchased. All of these shares were placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent, until (1) with respect to 50% of the shares, the earlier of one year after the date of the consummation of an initial business combination and the date on which the closing price of ARWA’s ordinary shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and (2) with respect to the remaining 50% of the insider shares, one year after the date of the consummation of an initial business combination, or earlier, in either case, if, subsequent to an initial business combination, ARWA consummates a liquidation, merger, share exchange or other similar transaction which results in all of ARWA’s shareholders having the right to exchange their shares for cash, securities or other property.

The insider shares are identical to the Ordinary Shares included in the Units sold in the initial public offering. However, the Initial Shareholders have agreed (A) to vote their insider shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to the second amended and restated memorandum and articles of association with respect to pre-business combination activities prior to the consummation of such a business combination unless ARWA provides dissenting public shareholders with the opportunity to convert their public shares into the right to receive cash from the Trust Account in connection with any such vote, (C) not to convert any insider shares into the right to receive cash from the Trust Account in connection with a shareholder vote to approve a proposed initial business combination (or sell any shares they hold to ARWA in a tender offer in connection with a proposed initial business combination) or a vote to amend the provisions of the second amended and restated memorandum and articles of association relating to shareholders’ rights or pre-business combination activity and (D) that the insider shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated.

Initial Public Offering

On May 6, 2015, ARWA closed its initial public offering of 7,200,000 units with each unit consisting of one ordinary share, one right to receive one-tenth (1/10) of one ordinary share upon consummation of an initial business combination and one redeemable warrant entitling the holder to purchase one-half of one ordinary share at a price of $12.50 per full share commencing on ARWA’s completion of an initial business combination. Simultaneous with the consummation of the initial public offering, ARWA consummated the private placement of 455,000 private units at a price of $10.00 per private unit, generating total proceeds of $4,550,000. The private units were purchased by ARWA’s initial shareholders and affiliates.

On May 12, 2015, ARWA consummated the sale of an additional 1,080,000 units subject to the underwriters’ over-allotment option. Simultaneously with the consummation of the over-allotment option, ARWA consummated a private placement of an additional 54,000 private units to its initial shareholders and/or their affiliates generating gross proceeds of $540,000.

The private units are identical to the units sold in the offering except the warrants included in the private units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Additionally, because the warrants underlying the private units were issued in a private transaction, the holders and their transferees will be allowed to exercise such warrants for cash even if a registration statement covering the ordinary shares issuable upon exercise of such warrants is not effective and receive unregistered ordinary shares. Furthermore, the purchasers have agreed (A) to vote their private shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to the second amended and restated memorandum and articles of association with respect to the pre-business combination activities prior to the consummation of such a business combination unless ARWA provides dissenting public shareholders with the opportunity to convert their public shares into the right to receive cash from the Trust Account in connection with any such vote, (C) not to convert any private shares into the right to receive cash from the Trust Account in connection with a shareholder vote to approve ARWA’s proposed initial business combination (or sell any private shares they hold to the Company in a tender offer in connection with a proposed initial business combination) or a vote to amend the provisions of the second amended and restated memorandum and articles of association relating to shareholders’ rights or pre-business combination activity and (D) that the private shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated. The purchasers have also agreed not to transfer, assign or sell any of the private units or underlying securities (except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions as the permitted transferees of the insider shares must agree to, each as described above) until the completion of ARWA’s initial business combination.

Offering Proceeds Held in Trust

$84,456,000 of the net proceeds from the initial public offering (including the exercise of the over-allotment option), was placed in a trust account. Except as described in the prospectus for ARWA’s initial public offering and in the subsection entitled “ ARWA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations ” below, these proceeds will not be released until the earlier of the completion of an initial business combination and ARWA’s redemption of 100% of the outstanding public shares upon its failure to consummate a business combination within the required time period.

Fair Market Value of Target Business

The target business or businesses that ARWA acquires must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account at the time of the execution of a definitive agreement for its initial business combination, although ARWA may acquire a target business whose fair market value significantly exceeds 80% of the trust account balance. ARWA’s board of directors determined that this test was met in connection with the proposed business combination with VivoPower.

Liquidation if No Business Combination

If ARWA does not complete the business combination with VivoPower (or another target business, if such business combination is not completed) by November 6, 2016 (or such later date as may be approved by ARWA shareholders), it will trigger ARWA’s automatic winding up, dissolution and liquidation pursuant to the terms of its second amended and restated memorandum and articles of association. As a result, this has the same effect as if ARWA’s shareholders had resolved to put ARWA into voluntary winding up under the Companies Law. Accordingly, no vote would be required from ARWA’s shareholders to commence such a voluntary winding up, dissolution and liquidation, though the shareholders would be required to appoint a liquidator.

The amount in the trust account (less the aggregate nominal par value of the public shares) under the Companies Law will be treated as share premium which is distributable under the Companies Law provided that immediately following the date on which the proposed distribution is proposed to be made, ARWA is able to pay its debts as they fall due in the ordinary course of business. If ARWA is forced to liquidate the trust account, ARWA anticipates that it would distribute to its public shareholders the amount in the trust account calculated as of the date that is two days prior to the distribution date (including any accrued interest). Prior to such distribution, ARWA would be required to assess all claims that may be potentially brought against it by its creditors for amounts they are actually owed and make provision for such amounts, as creditors take priority over the public shareholders with respect to amounts that are owed to them. ARWA cannot assure you that it will properly assess all claims that may be potentially brought against it. As such, shareholders could potentially be liable for any claims of creditors to the extent of distributions received by them as an unlawful payment in the event ARWA enters an insolvent liquidation. Furthermore, while ARWA has obtained and it will continue to seek to have all vendors and service providers (which would include any third parties it engaged to assist it in any way in connection with its search for a target business) and prospective target businesses execute agreements with ARWA waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they will execute such agreements. Nor is there any guarantee that, even if such entities execute such agreements with ARWA, they will not seek recourse against the trust account or that a court would conclude that such agreements are legally enforceable.

The initial shareholders have agreed to waive their rights to participate in any liquidation of ARWA’s trust account or other assets with respect to the insider shares and private shares held by them and to vote their insider shares and private shares in favor of any dissolution and plan of distribution which ARWA submits to a vote of shareholders. There will be no distribution from the trust account with respect to ARWA’s warrants and rights, which will expire worthless.

If ARWA is unable to complete an initial business combination with VivoPower or another target business and expends all of the net proceeds of its initial public offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share distribution from the trust account would be approximately $10.20.

The proceeds deposited in the trust account could, however, become subject to the claims of ARWA’s creditors which would be prior to the claims of the public shareholders. Although ARWA has obtained and will continue to seek to have all vendors, including lenders for money borrowed, prospective target businesses or other entities ARWA engages execute agreements with ARWA waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of the public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account, including but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with a claim against ARWA’s assets, including the funds held in the trust account.

ARWA will pay the costs of any subsequent liquidation from its remaining assets outside of the trust account. If there are insufficient funds held outside the trust account, Kevin Chin has agreed that he will be liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by ARWA for services rendered or contracted for or products sold to ARWA and which have not executed a waiver agreement.

Facilities

ARWA maintains its principal executive offices at Level 11, 153 Walker Street, North Sydney, NSW 2060, Australia. The cost for this space is included in the $10,000 per-month fee AWN charges ARWA for general and administrative services pursuant to a letter agreement between ARWA and AWN. ARWA believes, based on rents and fees for similar services in North Sydney, Australia, that the fee charged by AWN is at least as favorable as ARWA could have obtained from an unaffiliated person. ARWA considers its current office space, combined with the other office space otherwise available to its executive officers, adequate for its current operations.

Employees

ARWA has two executive officers. These individuals are not obligated to devote any specific number of hours to ARWA’s matters and intend to devote only as much time as they deem necessary to ARWA’s affairs. The amount of time they will devote in any time period will vary based on whether a target business has been selected for the business combination and the stage of the business combination process the company is in. Accordingly, once management locates a suitable target business to acquire, they will spend more time investigating such target business and negotiating and processing the business combination (and consequently spend more time to ARWA’s affairs) than they would prior to locating a suitable target business. ARWA presently expects each of its executive officers to devote such amount of time as they reasonably believe is necessary to ARWA’s business. ARWA does not intend to have any full time employees prior to the consummation of a business combination.

Directors and Executive Officers

ARWA’s current directors and executive officers are as follows:

Name	Age	Position
Kevin Tser Fah Chin	43	Chairman of the Board and Chief Executive Officer
Gary San Hui	47	Chief Financial Officer, Chief Investment Officer and Director
John C. Moore	79	Director
Dudley Hoskin	47	Director
Kien Khan Kwan	37	Director

Kevin Tser Fah Chin has served as ARWA’s Executive Chairman of the Board and Chief Executive Officer since ARWA’s inception. ARWA believes Mr. Chin is well-qualified to serve as a member of the Board due to his business leadership, investment and operational experience, as well as his diverse activities and contacts across Australia, Asia and globally. In 2007, Mr. Chin co-founded Arowana & Co., which today comprises Arowana Partners Group, Arowana Capital and AWN. Arowana Partners Group operates a number of unlisted investment funds and arranges and manages acquisitions and syndicated investments in unlisted companies. Arowana Capital operates as an Early Stage Venture Capital Limited Partnership venture capital fund, having formerly managed a Venture Capital Limited Partnership private equity fund. AWN is a company listed on the Australian Securities Exchange with operating subsidiaries and investments in the United States, Australia, New Zealand, the UK and South East Asia. Mr. Chin served as Managing Partner of Arowana Capital from June 2007 to June 2013 and has served as Chief Executive Officer of AWN since January 2013 and as Executive Chairman since February 2015. Prior to founding Arowana & Co., Mr. Chin led the management buyout of an ASX listed software business, SoftLaw Corporation (which was later renamed to RuleBurst Haley Limited) in November 2004 and became its Chief Financial Officer (and for a period also its Chief Operating Officer). RuleBurst Haley was acquired by Oracle Corporation in November 2008. Between October 2003 and October 2004, Mr. Chin worked as investment manager / analyst with a family office called the Lowy Family Group. Prior to then, he was with J.P. Morgan as a Vice President in its Investment Banking division gaining experience in Australia, the United States and Asia across both mergers and acquisitions and equity capital and derivative markets. Before joining J.P.Morgan, Mr. Chin worked as a corporate finance executive with an Australian merchant bank, Ord Minnett, from July 1996 to August 1997. He was previously also with Price Waterhouse in their corporate finance and litigation support team (June 1995 to July 1996) and Deloitte in their business consulting division (January 1993 to June 1995). Mr. Chin holds a Bachelor of Commerce degree from the University of New South Wales where he was one of the inaugural University Co-Op Scholars with the School of Banking and Finance. Mr. Chin is a Fellow of FINSIA (Financial Services Institute of Australia) where he also lectured for the FINSIA Masters Degree course, Advanced Industrial Equity Analysis. Mr. Chin is a qualified Chartered Accountant and a member of the Young Presidents Organisation (YPO) and Entrepreneurs Organisation (EO).

Gary San Hui has served as ARWA’s Chief Financial Officer, Chief Investment Officer and Director since November 2014. ARWA believes Mr. Hui is well-qualified to serve as a member of the Board due to his significant investment experience and his other experience and contacts. Mr. Hui joined AWN as an Executive Director and Fund Manager in November 2014. From 2007 to November 2014 when he joined ARWA, Mr. Hui was with Indus Capital, a hedge fund founded by former Soros Fund Management Partners. Mr. Hui joined Indus as a senior analyst, before becoming Managing Director and Chief Representative of Indus’ Singapore office in December 2011, prior to relocating to San Francisco in July 2013. From 1999 to 2007, Mr. Hui was with J.P. Morgan, including as an equity capital and derivatives banker responsible for the origination, structuring and execution of mandates in the Asian region. Prior to this, he worked at Deloitte in audit, business consulting and corporate finance. Mr. Hui qualified as a Chartered Accountant and completed the Securities Institute of Australia (now FINSIA) program. He holds a Bachelor of Commerce degree from the University of New South Wales.

John C. Moore has served as a member of the Board of Directors since October 2014. ARWA believes Mr. Moore is well-qualified to serve as a member of the Board due to his significant experience in business and politics, and contacts. From 1998 until 2001, Mr. Moore was Federal Minister of Defence of Australia. Since retiring from Australian politics in 2001, Mr. Moore has held numerous directorships across a range of industries including power and electrical services, education, and road maintenance. Mr. Moore was previously the Australian Federal Minister for Industry, Science and Tourism from 1996 until 1998, also holding the position of Vice President of the Executive Council. Mr. Moore has also held director or board memberships in a number of Australian companies, including Brandt Limited (Australia), P.F.C.B. Limited and Agricultural Investments Limited, and was a board member of Merrill Lynch Australia and Citinational Australia. He is currently Chairman of the Evolution Road Maintenance Group, and is a director of AWN and Arowana Australasia Value Opportunities Fund Limited, as well as several other private companies. Mr. Moore holds a Bachelor of Commerce and Associate in Accountancy from the University of Queensland, Australia.

Dudley Hoskin has served as a member of the Board of Directors since October 2014. ARWA believes Mr. Hoskin is well-qualified to serve as a member of the Board due to his significant business and investment experience gained across Asia. Since October 2011, Mr. Hoskin has been a Portfolio Manager with Tudor Investment Corporation, a global investment firm based in Greenwich, Connecticut. From 2007 to September 2011, Mr. Hoskin served as a Managing Director with Goldman Sachs in Australia, before which (from 2000 to 2002) he was based in Hong Kong with the same firm. From 2002 until 2005, he ran the G10 currency trading business for HSBC, at which time he returned to Australia to set up the Proprietary Trading Business for Societe Generale Australia before resuming his career with Goldman Sachs in 2007. Mr. Hoskin holds a Bachelor’s Degree with Honours in Aeronautical Engineering and Design from Loughborough University in the United Kingdom and trained as a Pilot in the Royal Air Force (UK).

Kien Khan Kwan has served as a member of the Board of Directors since October 2014. ARWA believes Mr. Kwan is well-qualified to serve as a member of the Board due to his significant investment and other experience. From February 2012 to October 2014, Mr. Kwan served as Executive Director and Chief Investment Officer of AWN (and other Arowana & Co. companies prior to the listing of AWN). Mr. Kwan has significant international experience in transaction origination, structuring, negotiation and execution, including transactions raising in excess of $4.3 billion of listed and unlisted equity. He has led teams involved in multiple merger and acquisition transactions in Australia and Europe across various industries. Prior to his role at Arowana & Co., Mr. Kwan spent 10 years in various investment and advisory roles in Sydney, Perth and London including at J.P. Morgan (September 2008 to April 2011) and at Macquarie Capital (December 2006 to August 2008). He also was a portfolio manager at J.P. Morgan Asset Management with direct responsibility for over $1 billion in funds under management. Mr. Kwan holds a Bachelor of Commerce (majoring in Accounting and Finance) and a Bachelor or Laws from the University of Western Australia.

Legal Proceedings

There are no legal proceedings pending against ARWA.

Periodic Reporting and Audited Financial Statements

ARWA has registered its securities under the Exchange Act and has reporting obligations, including the requirement to file annual and quarterly reports with the Securities and Exchange Commission. In accordance with the requirements of the Exchange Act, ARWA’s annual reports contain financial statements audited and reported on by ARWA’s independent registered public accounting firm. ARWA has filed with the SEC its Annual Report on Form 10-K covering the fiscal year ended February 29, 2016 and its Quarterly Reports on Form 10-Q covering the fiscal quarters ended May 31, 2015, August 31, 2015, November 30, 2015 and May 31, 2016.

ARWA’s Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of ARWA’s financial condition and results of operations should be read in conjunction with ARWA’s consolidated financial statements and notes to those statements included in this proxy statement/prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Please see the sections entitled “ Forward-Looking Statements ” and “ Risk Factors ” in this proxy statement/prospectus.

Critical Accounting Policies

For a more detailed discussion of the Critical Accounting Policies, please see Note 2 to the consolidated financial statements included in this proxy statement/prospectus.

Ordinary Shares Subject to Possible Conversion

ARWA accounts for its ordinary shares subject to possible conversion in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity”. Ordinary shares subject to mandatory conversion are classified as a liability instrument and are measured at fair value. Conditionally convertible ordinary shares (including ordinary shares that feature conversion rights that are either within the control of the holder or subject to conversion upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. ARWA’s ordinary shares feature certain conversion rights that are considered by ARWA to be outside of the ARWA’s control and subject to the occurrence of uncertain future events. Accordingly, at February 29, 2016, the ordinary shares subject to possible conversion are presented as temporary equity, outside of the shareholders’ equity section of ARWA’s balance sheet.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

Results of Operations

ARWA’s entire activity from inception up to May 6, 2015 was in preparation for the initial public offering. Since the initial public offering, ARWA’s activity has been limited to the evaluation of business combination candidates, and ARWA will not be generating any operating revenues until the closing and completion of ARWA’s initial business combination. ARWA expects to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant in view of current low interest rates on risk-free investments (treasury securities). ARWA expects to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. ARWA expects its expenses to increase substantially after this period.

For the three months ended May 31, 2016 and 2015, ARWA had a net loss of $40,146 and $35,133, respectively, which consisted primarily of operating costs. These expenses for the three months ended May 31, 2016 offset by interest income from its trust account of $45,402 and an unrealized gain on the U.S. treasury bonds of $6,440. For the three months ended May 31, 2015, ARWA had a net loss of $35,133, which consist of operating costs. During the three months ended May 31, 2015, the operating expenses were offset by interest income from the trust account of $4,571. ARWA’s operating expenses principally consisted of expenses related to its public filings and listing and identification and due diligence related to a potential target business, and to a lesser extent, general operating expenses including rent, insurance and office expenses.

For the year ended February 29, 2016, ARWA had a net loss of $358,576, which consisted primarily of operating expenses. These expenses were offset by interest income from ARWA’s Trust Account of $29,072 and an unrealized gain on the U.S. treasury bonds of $55,769. ARWA’s operating expenses principally consisted of expenses related to ARWA’s public filings and listing and identification and due diligence related to a potential target business, and to a lesser extent, general operating expenses including rent, insurance and office expenses. Until ARWA consummates a business combination, it will have no operating revenues.

Liquidity and Capital Resources

As indicated in the accompanying financial statements, at May 31, 2016, ARWA had $133,063 in cash and cash equivalents and a working capital deficiency of $33,754. Further, ARWA has incurred and expects to continue to incur significant costs in pursuit of ARWA’s financing and acquisition plans.

Through May 6, 2015, ARWA’s liquidity needs were satisfied through receipt of $25,000 from the sale of shares to ARWA’s initial shareholders and a loan from APG, an affiliate of its executive officers, in an aggregate amount of $171,306. ARWA also received advances of $139,190 from a related person as defined under the rules and regulations of the SEC (“Related Person”) in order to fund operations. Following the Offering, which resulted in $84,456,000 being placed into the Trust Account, ARWA had $684,291 in cash held outside of the Trust Account (after the payment of all costs related to the offering).

ARWA intends to use substantially all of the net proceeds of the initial public offering, including the funds held in the Trust Account, to acquire a target business or businesses and to pay its expenses relating thereto, including a fee payable to EarlyBirdCapital in an amount equal to $3,312,000 (representing 4% of the gross proceeds received in the Offering) (exclusive of any applicable finders’ fees which might become payable) upon consummation of ARWA’s initial business combination for assisting ARWA in connection therewith. To the extent that ARWA’s capital stock is used in whole or in part as consideration to effect ARWA’s initial business combination, the remaining proceeds held in the Trust Account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which ARWA had incurred prior to the completion of ARWA’s initial business combination if the funds available to ARWA outside of the Trust Account were insufficient to cover such expenses.

ARWA anticipates that it will need to raise additional capital through loans or additional investments from its shareholders, officers, directors, or third parties to allow ARWA to operate until its liquidation date, November 6, 2016 (or such later date as may be approved by ARWA shareholders). None of the shareholders, officers or directors are under any obligation to advance funds to, or to invest in, the Company. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about ARWA’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Until ARWA’s liquidation date, November 6, 2016 (or such later date as may be approved by ARWA shareholders), ARWA will be using its existing funds as well as additional capital for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.

If ARWA’s estimates of the costs of undertaking in-depth due diligence and negotiating its initial business combination are less than the actual amount necessary to do so, or the amount of interest available to ARWA from the Trust Account is less than ARWA expects as a result of the current interest rate environment, ARWA may have insufficient funds available to operate its business prior to ARWA’s initial business combination. Moreover, ARWA may need to obtain additional financing either to consummate its initial business combination or because ARWA becomes obligated to redeem a significant number of its public shares upon consummation of ARWA’s initial business combination, in which case ARWA may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, ARWA would only consummate such financing simultaneously with the consummation of its initial business combination. Following ARWA’s initial business combination, if cash on hand is insufficient, ARWA may need to obtain additional financings in order to meet its obligations.

Off-Balance Sheet Arrangements

As of February 29, 2016 and May 31, 2016, ARWA did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

Independent Auditors’ Fees

The firm of Marcum LLP acts as ARWA’s independent registered public accounting firm. The following is a summary of fees paid to Marcum LLP for services rendered.

Audit-Related Fees

Audit fees consist of fees billed for professional services rendered for the audit of ARWA’s year-end financial statements and services that are normally provided by Marcum LLP in connection with regulatory filings. The aggregate fees billed by Marcum LLP for professional services rendered for the audit of our annual financial statements, review of the financial information included in ARWA’s Forms 10-Q for the respective periods, the registration statement, the closing 8-K and other required filings with the SEC for the year ended February 29, 2016 and for the period from October 1, 2014 (inception) through February 29, 2015 totaled $27,140 and $67,868, respectively. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.

Tax Fees

During the fiscal year ended February 29, 2016 and the period from October 1, 2014 (inception) through February 28, 2015, fees for tax services for ARWA’s independent registered public accounting firm were $0, respectively.

All Other Fees

During the fiscal year ended February 29, 2016 and the period from October 1, 2014 (inception) through February 28, 2015, fees for other services were $2,500 and $0, respectively.

Audit Committee Pre-Approval Policies and Procedures

Since ARWA’s audit committee was not formed until April 30, 2015, the audit committee did not pre-approve all of the foregoing services although any services rendered prior to the formation of ARWA’s audit committee were approved by ARWA’s board of directors. However, in accordance with Section 10A(i) of the Securities Exchange Act of 1934, before ARWA engages its independent accountant to render audit or non-audit services on a going-forward basis, the engagement will be approved by ARWA’s audit committee.

Code of Ethics

On April 30, 2015, ARWA’s board of directors adopted a code of ethics that applies to our executive officers, directors and employees. The code of ethics codifies the business and ethical principles that govern aspects of ARWA’s business. ARWA will provide, without charge, upon request, copies of its code of ethics. Requests for copies of ARWA’s code of ethics should be sent in writing to Arowana Inc., Level 11, 153 Walker Street, North Sydney, NSW 2060, Australia.

Upon the consummation of the Transactions, VivoPower will adopt a similar code of ethics that will apply to VivoPower’s directors, officers and employees as well as those of its subsidiaries. VivoPower’s code of ethics will be available free of charge on VivoPower’s website at www.vivopower.com.

BUSINESS OF VIVOPOWER

Overview

Solar power is the world’s largest potential energy source and is the fastest-growing form of renewable energy. Between 2003 and 2014, cumulative installed solar capacity increased at an average annual growth rate of 49%, according to the International Energy Agency (“IEA”). Yet, today, solar energy’s contribution to global energy generation is insignificant, contributing less than 1% globally ; even as panel costs have dropped more than 75% over the same time period.

As a result, this is a pivotal moment in the acceleration of massive energy industry change. Enabled by strong capital availability and “smart” technology penetration, the solar industry is growing at exponential levels with VivoPower’s platform sitting at what it sees as the nexus of that industry value chain.

VivoPower is a global next generation solar power company that operates a BTO model to establish an installed solar power asset base in a capital efficient manner. VivoPower intends to leverage this asset base to sell DG power and manage data driven energy services for CIG customers.

VivoPower is building a comprehensive solar business platform focused on optimizing outcomes for all of its stakeholders. VivoPower will provide capital, development and structuring solutions for solar project developers and asset owners, enabling these stakeholders to efficiently develop projects in an expedited manner. Leveraging this installed asset base, VivoPower will deliver green energy to its customers. In addition to its asset development strategy, V ivoPower invests in financial and technology assets in a strategically coordinated way, leading to an increasingly optimized energy service experience for its customers.

The global energy architecture is increasingly becoming decentralized and digitized as today’s internet connected devices are able to measure, monitor and analyze energy supply and demand in real time. We believe VivoPower’s capabilities in data analytics and emerging technologies will allow it to capitalize on these trends and become a leader in energy efficiency, storage, demand management, remote energy and grid design.

Current Offering

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Service and asset optimisation - Ongoing asset monitoring, performance management and production optimization using next generation solar analytics technology

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Rooftop CIG - Financing, structuring, advisory, and other development services for developers of rooftop CIG solar projects

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Groundmount - Provision of financing, structuring, advisory, and other asset development services for developers of groundmount solar projects

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Power generation solutions - Following the integration of Aevitas, VivoPower will also provide power generation solutions including the design, supply, installation and maintenance of power systems, and control systems for a range of clients

Future Offerings may Include

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Energy efficiency and storage - Financing and delivery of LED solutions and battery and other energy storage solutions

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Smart Power- Holistic energy solutions, energy audits, demand management and renewable energy credit trading

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Technology and new energy - Development and ownership of proprietary energy technology, off-grid and remote energy solutions

VivoPower has identified core geographies and industry sectors to focus on. VivoPower’s primary strategy is centered on OECD countries and countries making up the Association of Southeast Asian Nations (“ASEAN”) where grid parity currently exists (or will soon exist) for utility and CIG customers. Additionally, VivoPower will take an opportunistic approach in select other markets.

History and Corporate Structure

VivoPower was formed on February 1, 2016 as a UK incorporated, public limited company. It has subsidiaries in the United Kingdom (“UK”) and the United States of America (“U.S.”) and is, itself, a wholly-owned subsidiary of AWN, an Australian public company traded on the Australian Securities Exchange under the symbol “AWN”. The current corporate structure of VivoPower is set out below.

Current summary group structure of VivoPower

Following the Transactions, the corporate structure of the group will incorporate VivoPower Australia and Aevitas and will be as set out in the diagram below.

Summary g roup structure of VivoPower following the Transactions

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VivoPower Australia was established on August 8, 2014 as a proprietary limited company in Australia. VivoPower Australia is a next generation renewable energy company investing in the origination, financing, build, transfer, operation, maintenance and optimization of solar electricity generation facilities in Australia and Asia. Its initial majority shareholder was Hadouken Pty Limited (an entity associated with VivoPower Australia management), with AWN subsequently acquiring an initial interest in VivoPower Australia on or around August 29, 2014 through its shareholding in the Arowana Australasian Special Situations Fund 1. Other current shareholders include Aevitas, VivoPower Australia management as well as a Arowana Energy Holdings Pty Ltd, a wholly owned AWN subsidiary. Following the Transactions, 80.1% of VivoPower Australia’s ordinary shares will be held by MidCo and 19.9% will be held by Aevitas.

Following the Transactions and upon adoption of the proposed Incentive Plan, certain employees, consultants and directors of VivoPower and its subsidiaries (if approved by the Compensation Committee) may hold a class of shares in MidCo.

OptionCo was established on June 1, 2016 and is an Australian proprietary limited company. It holds options to acquire 99.9% of the shares in Aevitas, an Australian unlisted public company established on February 28, 2013. Aevitas provides energy and power generation solutions including design, supply, installation and maintenance of power systems, control systems, with an increasing focus on solar and renewable energy, and energy efficiency products and strategies. Aevitas’ mission is to be its customers trusted integrated power expert.

Industry Background

Energy Markets

Energy is one of the world’s largest industries; in the United States expenditure on energy comprises approximately 8% of GDP.

Over the last 20 years, global primary energy consumption has grown at a rate of approximately 2.0% per annum. By fuel mix, approximately 90% of global primary energy consumption is sourced from fossil fuels such as oil, coal and natural gas. These three fossil fuels are responsible for almost all carbon dioxide emissions from primary energy consumption.

Electrification of Energy Markets and Energy Storage

One of the key long term trends in energy markets has been the electrification of society. In the United States for example consumption of electricity had increased from 16% of total energy consumption in 1955 to 39% in 2015, some fifty years later. When the electrification trend is examined by sector, the same pattern is evident, with transport being the only major energy consumption sector not having shown this pattern of electrification.

To date the key barrier for electrification of the transport sector has been economic energy storage. Yet the cost of lithium ion batteries have declined more than 50% since 2010.

Electrification of the transport sector may have profound consequences for electricity markets, given transport is the largest primary energy consumption sector excluding electricity generation. Furthermore, given solar PV’s intermittency, whereby electricity is only generated in daylight hours, economic energy storage may greatly expand the addressable market of solar PV.

USA - Electricity share of Energy Consumption by Sector

Year	Residential			Commercial			Industrial			Transport			Electricity Total
1955		22.9	%		34.2	%		17.4	%		0.8	%		16.1	%
1980		52.8	%		61.2	%		29.5	%		0.2	%		31.1	%
2015		68.8	%		77.3	%		31.6	%		0.3	%		39.1	%

Source: EIA, Monthly Energy Review

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Solar Photovoltaic (PV) Electricity Generation

Whilst there are several alternative technologies such as Solar Thermal and Concentrating Solar Production, Solar Photovoltaics (“Solar PV”) is the dominant form of solar power production in the world today.

The dominant form of solar PV today is silicon based, which accounts for over 90% of the solar PV market. Silicon is the second most abundant material in the earth’s crust and is typically produced and cut as wafer form polysilicon or monosilicon.

Electricity production via the photovoltaic (“PV”) effect is unique in that unlike conventional thermal electricity generation, the solar PV cell involves no moving parts. The photovoltaic effect involves the generation of a direct electric current in the solar PV cell upon exposure to light.

Solar - A Massive Energy Resource

Solar power is the planet’s largest potential energy source. The earth’s surface receives approximately 15 times more solar energy every year from the sun than the entire known reserves of coal, petroleum, natural gas and nuclear fuels combined. Furthermore, land area required for solar photovoltaic power is little constraint. Only about 0.6% of the United States land area would be required to power the entire country’s energy demand from solar energy based on the efficiency rates of currently available solar photovoltaic modules.

No other known energy source has the sheer scale of potential that Solar can provide, as evidenced by Thomas Edison in 1931 when he stated “I’d put my money on the sun and solar energy. What a source of power!”

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Solar - Environmental and Health Benefits

Apart from sheer scale potential, solar power has significant environmental and health benefits over conventional fossil fuels. Solar power produces very low levels of air pollution even on a full life cycle basis.

Air pollution causes an estimated 6.5 million deaths each year according to the World Health Organisation. Conventional fossil fuel energy production and use accounts for an estimated 85% of harmful particulate matter production and almost all sulfur dioxide and nitrogen oxide emissions, per recent research from the International Energy Agency.

Solar Photovoltaic – Increases in Efficiency and Reductions in Cost

  Solar energy’s share of primary energy production has historically been negligible. Key drivers of very low historical usage rates for solar energy were high cost and low efficiency.

In 1954, when Bell Laboratories created the first photovoltaic technology capable of powering electrical equipment, the silicon solar cell had only 4% energy conversion efficiency and cost approximately $300/Watt to produce.

Currently, photovoltaic modules are available in the USA for less than $0.50/Watt inclusive of import tariffs. Just as importantly, current commercial PV cell energy conversion efficiencies are above 20%, with demonstrated laboratory energy conversion efficiency well above 40%.

Solar PV – Energy Conversion Efficiency Continues to Improve

This plot is courtesy of the National Renewable Energy Laboratory, Golden, CO, USA

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Solar PV – Unit Cost Continues to Improve ($ / Watt of Capacity)

Source: International Energy Agency, Technology Roadmap, Solar Photovoltaic Energy – 2014 edition

Rapid improvement in efficiency and cost of solar PV are driving a huge increase in solar photovoltaic installations globally.

Over the last 10 years, the average annual growth in global installed Solar photovoltaic capacity has run at 47.4% and the average annual growth in net annual installations has run at 50.0% ¹ .

¹ BP Statistical Review of World Energy 2016, dataset, tab “Solar Capacity”

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Source: BP Statistical Review of World Energy

Key Drivers of Demand for Solar PV

Solar PV is largely a capital expenditure item, in that the fuel (sunlight) is free. Conventional electricity is typically bought from a utility company on a usage basis. Typically, a utility would charge on a dollar per kilowatt hour basis ($/kWh).

In order to render the capital cost of solar PV comparable, a levelized cost of energy (“LCOE”) calculation is performed. The LCOE calculation takes variables such as capital cost, energy output, cost of finance, operating cost and converts these to a usage basis such as $/kWh, to render solar PV directly comparable to other electricity source costs.

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Levelized Cost of Electricity - US Dollars per Mega watt Hour

Source: Source: U.S. Energy Information Administration, Levelized Cost and Levelized Avoided Cost of New Generation Technologies in the Annual Energy Outlook 2015 (AEO2015) IGCC is integrated gasification combined cycle; CCS is carbon capture and sequestration .

In the early years of solar, subsidies and incentives were critical factors in stimulating demand, due to the fact that for many end users, solar power was more expensive that the alternative energy sources.

However, the confluence of increasing efficiency and falling cost of solar PV on a dollar per Watt ($/W) basis has led to the phenomenon of Grid Parity, which describes the situation where solar is at least as cheap as grid power, on a life cycle basis. Grid Parity conditions exist in an increasing number of electricity markets globally.

Electric Power Grid

A conventional electric power grid sector is typically organized vertically.

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Generation : Centralized electricity Generators produce traditionally electricity. Often generators are located closer to fuel or fuel transport hubs rather than their ultimate end customers.

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Transmission Network : Transmission lines are high voltage cables that move large amounts of electricity from a generation site towards end customers.

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Distribution Network : Distribution lines connect the Transmission terminus of a high voltage substation to a localized network of low voltage cables.

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Retail : Residential and Commercial & Industrial (“C&I”) customers connect to the Distribution Network in order to receive electricity

It is important to note that in many developed markets, the cost of transport of electricity via Transmission and Distribution Networks can be higher than the cost of electricity Generation to end customers.

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Thus comparison of Solar PV LCOE to the cost of Coal electricity LCOE may not be an accurate comparison. In many markets, due to the cost burden of Transmission and Distribution, customers may choose to bypass the Grid and install solar PV on their rooftops, thereby avoiding the cost burden not just of Generation, but also Transmission and Distribution.

Source: IEA Re-powering Markets, 2016

United States

The US utility scale electric fleet generated 4,087,381 megawatt hours of electricity in 2015 according to EIA data. Approximately 33.2% of this was generated from coal fire power stations, with gas fired power stations contributing approximately 32.7% of generation.

Federal Energy Regulatory Commission (“FERC”) data for utility scale generation plants of 1 megawatt or greater capacity shows that the US had 1,169 gigawatts of installed capacity at the end of June 2016. Of this installed capacity, solar represented just 1.5%.

However, FERC data shows that solar is the fastest growing utility scale generation type, with the installed base of utility scale solar plants of 1 megawatt or greater expanding at a compound average annual growth rate of 53% from 2009 to 2015.

FERC generation data furthermore shows that for 2015, approximately 34% of electricity generated by solar photovoltaics was from distributed generation (“DG”) sources not included in the utility scale figures above.

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Source: BP Statistical Review of World Energy

US Policy Initiatives to Encourage Solar

The US has in place many incentives to encourage installation of renewable energy. The principal Federal incentives as they relate to solar include:

Investment Tax Credit ( “ ITC ” ): The ITC confers a tax credit of 30% of the eligible solar energy property basis at the time the solar generating facility is placed in service for tax purposes. The 30% ITC rate reduces in 2020 to 26%, 22% for 2021 and 10% for 2022 and years thereafter.

Modified Accelerated Cost Recovery System Depreciation ( “ MACRS ” ) : MACRS allow an acceleration of eligible expenditure on solar energy property basis over a period of five years, notwithstanding that the economic life of a solar photovoltaic generation facility may be well over twenty five years.

The principal State based solar incentives include:

Renewable Portfolio Standards ( “ RPS ” ): RPS are state based programmes typically mandating electricity providers to produce or purchase a minimum level of renewable energy as part of their electricity sales mix. A total of 29 states and the District of Columbia presently have binding RPS in place. A feature of many state based RPS programs is the use of Renewable Energy Credits (“RECs”) to provide a price signal to incentivize solar capacity installation. RECs enable an electricity provider who has insufficient renewable generation to meet their RPS obligation by buying credits.

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Feed in Tariffs ( “ FIT ” ) : Currently 6 states have FITs in place. Feed in tariffs typically apply to DG solar facilities connected to the distribution grid. They allow a solar facility owner to sell excess electricity produced back to the distribution grid. Solar FIT rates can vary depending on the time of day.

Net Metering : Net metering typically applies to DG solar facilities connected to the distribution grid. Net Metering allows a customer to set off against their consumption from the grid and net exports of electricity to the grid.

Australia

Australia possesses some of the highest solar insolation in the world, exceeding the average values in Europe, Russia, and most of North America. Solar has been the most rapidly expanding renewable energy source in the country over the last ten years, growing by 30% per year on average ² , underpinned by growth in both solar PV and solar hot water. However, this was from a low base and solar remains a relatively small contributor to Australia’s energy mix. In 2013–14 about 4.9 TWh of electricity was generated from solar PV technologies representing only 2% of Australia’s total electricity generation ² . Australia is still highly reliant on heavily polluting coal generation, contributing 166TWh or 75% of total generated electricity, and 27.4 GW or 42% of installed capacity ³ .

The latest annual update to the International Energy Agency prepared by the Australian PV Institute (APVI) stated that 935 MW of solar PV was installed for 2015, a nearly 20% growth on 2014 delivering a milestone of 5GW of cumulative installed capacity. BNEF projects solar capacity additions in 2017 and 2018 of 1.1 GW and 1.2 GW, respectively.

Cumulative MW Installed in Australia

The main solar incentive scheme in Australia at the federal level is the Renewable Energy Target (RET), which is divided into two segments – the Small-scale Renewable Energy Scheme (SRES) and the Large-scale Renewable Energy Target (LRET).

●

SRES works by issuing Small-scale Technology Certificates (STCs) to eligible entities, based on the expected output of a solar system over a 15-year period. The installed solar capacity must be less than 100kW to be eligible for this incentive. STCs can be traded and sold, which provides an up-front cash stream for solar system owners ⁴ .

●

LRET provide for Large-scale Generation Certificates (LGCs) that can be generated by commercial and utility-scale systems over 100kW. LGCs are produced on an ongoing basis after the plant starts producing power, providing an ongoing revenue stream for their operators on top of revenues from sale of electricity. The LRET includes legislated annual targets which will drive significant investment in new renewable energy generation capacity in coming years. Recent years have been characterized by under investment, which has significantly increased LGC traded prices in recent times. The large-scale targets ramp up until 2020 when the target will be 33,000 gigawatt-hours (GWh) of renewable electricity generation ⁴ . LGCs are tradeable and enforced until 2030.

² Energy in Australia 2015, Department of Industry, Innovation and Science

³ Bloomberg New Energy Finance

⁴ Clean Energy Regulator (www.cleanenergyregulator.gov.au)

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In addition to renewable energy target, the government also provides support for large-scale PV installation through the Australian Renewable Energy Agency (ARENA). The agency is also currently supporting 101 solar energy projects with committed ARENA funding of A$586 million ⁵ . ARENA has also allocated A$100 million in funding to support large-scale solar PV projects through a competitive round initiated last 2015. A total of 22 projects with 766 MW have been selected to proceed to the full application stage, which are currently being assessed by the agency ⁶ .

Key state and local programs and incentives include:

●

ACT Large Scale Auction – A reverse auction process which determines prices for a large-scale feed-in tariff programme. The programme has so far awarded feed-in tariffs to three large-scale solar and five wind projects across four tranches, supporting a total of 440 MW of contracted power capacity ⁷ .

●

Victoria Renewable Energy Target – The government announced a new policy in 2016 to target 40% of electricity being produced from renewable sources by 2025. The targets are expected to be supported by a state sponsored reverse auction process, similar to those held in the ACT. This will allow renewable energy developers to bid for long term electricity contracts to make their projects viable. The first phase of the expected reverse auctions is scheduled to occur in 2017 with an aim to have 1.8 GW of new energy capacity built by 2020 ⁸ .

⁵ Australian Renewable Energy Agency (http://arena.gov.au/projects/solar/)

⁶ Australian Renewable Energy Agency (http://arena.gov.au/programmes/advancing-renewables-programme/large-scale-solar-pv/)

⁷ BNEF

⁸ BNEF

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United Kingdom

In 2015, the total installed capacity of the UK electricity market was 97 GW ⁹ and annual demand was 344 TWh of energy. The majority was supplied by coal-fired, natural gas-fired and nuclear facilities, many of which are coming to the end of their useful lives. Approximately two-thirds of existing power stations are expected to close down by 2030 ¹⁰ .

Source: National Grid FES - Consumer Power Forecast ^’ ¹¹

New generation capacity is required to replace the retirements. This is expected to be partly met through the deployment of renewables (including solar PV) as the UK progresses towards its long-term carbon targets. The UK intends to source 15% of final energy consumption from renewable energy by 2020 ¹² and to reduce carbon emissions by at least 80% from 1990 levels by 2050 ¹³ .

Under National Grid’s “Consumer Power” forecast ¹⁴ (as per the chart below), the total installed capacity of solar PV is forecast to increase four-fold by 2040.

⁹ National Grid: Future Energy Scenarios, 2016

¹⁰ National Infrastructure Commission, 4 ^th March 2016

¹¹ National Grid: Chart is based on National Grid’s Consumer Power scenario forecast, which assumes a market-driven world, with limited government intervention.

¹² Renewable Energy Directive 2009/28/EC

¹³ Climate Change Act 2008

¹⁴ National Grid: Future Energy Scenarios, 2016 - Consumer Power scenario forecasts assume a market-driven world, with limited government intervention.

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Source: National Grid FES - Consumer Power Forecast ^’ ¹⁵

The UK government has several policy initiatives to encourage cost-efficient renewable energy generation:

●

Feed in T ariffs (FITs): FITs are predominately 20-year RPI-indexed tariffs for electricity generated by small scale renewable installations. Following rapid deployment of solar PV in recent years incentivised by the FITs, in early 2016, the government implemented tariff cuts of 65% ¹⁶ and set quarterly deployment caps to limit overall FIT costs to £100 million per year by April 2019 ¹⁷ .

●

Contract-for-Difference (CfD): This is the new scheme to support large scale low carbon electricity generation. A CfD is a long term contract which pays a renewable generator the difference between a strike price and the market electricity price. The first CfD allocation round took place in October 2014. The second round was scheduled for October 2015 but was cancelled ¹⁸ . A consultation was published in May 2016 on the terms of future CfD rounds ¹⁹ and round 2 is now expected in late 2016. ²⁰

●

Renewable Obligation (RO): The RO places an obligation on licensed electricity retailers to source a proportion of electricity from renewable sources. In England, Wales and Scotland, the RO was closed to new PV projects larger than 5 MW on 1 April 2015 ²¹ and to new solar PV projects of 5 MW capacity or below on 1 April 2016. ²² Both closures have a grace period of 12 months for projects meeting certain conditions: significant commitment, grid delay or preliminary accreditation.

¹⁵ National Grid: Chart is based on National Grid’s Consumer Power scenario forecasts which assumes a market-driven world, with limited government intervention.

¹⁶ Guardian: 17/12/2015

¹⁷ International Energy Agency: UK renewable energy policy framework summary

¹⁸ Edie.net: DECC postpones next Contracts for Difference auction

¹⁹ DECC: Consultation on amending the CFD contract and regulations

²⁰ International Energy Agency: UK renewable energy policy framework summary

²¹ Ofgem: Renewables Obligation: closure of the scheme to large-scale solar PV

²² Ofgem: Renewables Obligation: closure of the scheme to small-scale solar PV

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●

Climate Change Levy (CCL): Renewable electricity generators are no longer eligible for CCL exemption certificates ²³ , which had provided an additional income stream up to the value of the CCL (currently £5.59/MWh).

●

Levy control framework (LCF): The LCF sets annual limits on the overall costs of all DECC’s low carbon electricity levy-funded policies to control public expenditure paid for through consumer bills until 2020/21. ²⁴ The limit for 2020/21 is £7.6 billion in real terms.

Singapore

Singapore virtually imports almost all its energy needs, and in 2015 natural gas accounted for 95% of the country’s total electricity sources ²⁵ .

Singapore has a long term average annual solar irradiation of 1,632 kWh/m2 ²⁶ which makes solar PV one of the more viable renewable energy options for the island nation. Land scarcity and high prices make ground mounted solar uneconomical, but there is sufficient roof top space of about 34 square km ²⁷ for rooftop solar. This has resulted in the cumulative roof top solar PV installed capacity in Singapore growing to 99.4 MW as of June 30, 2016 ²⁸ .

While there are no declared targets for renewable energy as a share of Singapore’s total electricity resource, the government has declared a target of 350 MW of solar PV installations for its own agencies by 2020 with the SolarNova program ^{http://www.eco-business.com/news/singapore-goes-big-on-solar-with-largest-tender-to-date/} ²⁹ .

Solar PV potential projections for Singapore

²³ Summer Budget 2015

²⁴ DECC: Implementing Electricity Market Reform

²⁵ Page 8 of Energy Market Authority Annual Report 2014/2015

²⁶ Page 16 of The nutes & bolts of Solar PV installations in Singapore, SERIS 2014

²⁷ Page 32 (Table 4.1) Solar PV Roadmap for Singapore,2013

²⁸ Latest Quarterly Statistics (Q2-2016, SERIS)

²⁹ http://www.eco-business.com/news/singapore-goes-big-on-solar-with-largest-tender-to-date/ June 2015

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VivoPower’s Strength

VivoPower is a global next generation solar power 2.0 company that currently operates a Build, Transfer, Operate (BTO) business model to establish and grow a PPA backed solar power asset base in a capital efficient manner. This will enable it to sell Distributed Generation (“DG”) power and big data driven energy services to Commercial, Industrial and Government (“CIG”) customers.

VivoPower’s strategy is to build a high growth next generation green energy company that is based on distributed energy, intelligence, data and information with lower capital intensity than traditional players and increasing recurring income and free cash flows.

VivoPower’s key investment merits are summarized as follows:

●

Strong industry tailwinds : Confluence of declining costs, political support in key markets and a groundswell of boardroom and community support for clean power will accelerate the take-up of solar PV, driving sustainable growth;

●

Large global addressable market : Business model, product and service offering is easily scalable and relevant to a diverse range of customers and across geographies;

●

Recurring contracted revenues : As the installed asset base grows, we expect that an increasing share of revenue base will be derived from power support services under long term contracts, delivering an increasing stream of recurring cashflows;

●

Capital efficient business model : BTO (build, transfer, operate) business model is capital efficient and ensures VivoPower delivers a superior ROIC (return on invested capital) relative to other renewable energy players;

●

Diversified, coherent offering : Diverse yet complementary segments strategically position VivoPower to take advantage of the 3 phases of industry disruption: (i) mass solar & storage adoption; (ii) DG proliferation; (iii) digitization of power; and

●

Diverse team composition : VivoPower’s team comprises a diverse mix of project and corporate finance professionals, engineers, technologists and project management executives with deep renewables sector experience.

VivoPower’s strength is linked to its well-defined strategy to expand from its current offering of utility scale and CIG solar system BTO sales. In addition to this, its planned future offering will encompass energy efficiency & storage services, smart green power services and technology & new energy as the market evolves. Over time, this will build VivoPower’s base of recurring revenue from providing power support services, including asset optimization and management, to an expanding client and asset base across globally.

VivoPower’s management

VivoPower’s team comprises a diverse global mix of project financiers, engineers, procurement specialists, corporate financiers, asset managers, technologists and data scientists. This unique combined skill set will enable VivoPower to assist its CIG clients to navigate what will become an increasingly complex energy management paradigm as power becomes digitized.

VivoPower’s industry position

VivoPower sits in the ‘sweet spot’ of the industry value chain.

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VivoPower’s solution

VivoPower’s team with its diverse skill set, will be able to provide customers with integrated power solutions and an ability to navigate an increasingly complex energy management landscape. VivoPower’s team has the requisite skill set to co-ordinate and navigate the various stakeholders involved in pre-qualification, development, financing and optimization of solar power projects to deliver a de-risked investment opportunity to long term asset owners seeking yield. In addition, VivoPower can navigate the complex cross border legal, tax, accounting and structuring issues that may be involved in these projects. Once the project has been built, VivoPower will also provide asset operation, maintenance and optimization services incorporating technology and big data based solutions.

Solar power project stakeholders

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VivoPower’s revenue model

VivoPower generates upfront revenue from solar systems BTO sales (utility groundmount and CIG rooftop) and recurring revenues from power support services, power asset management, power generation and energy services. The four pillars of revenue are:

●

Solar systems BTO sales: VivoPower will generate upfront revenues derived from the BTO (build, transfer and operate) model by providing financing, structuring, advisory, engineering, equipment procurement and project management services for developers and asset owners.

●

Power support services: VivoPower will generate recurring revenues from ongoing asset monitoring and maintenance, performance management and production optimization using next generation solar analytics technology.

●

Power generation: VivoPower will generate recurring revenues from operational solar power plants around the world underpinned by long term PPA contracts in which VivoPower decides to maintain a residual ownership interest.

●

Energy services: VivoPower will generate recurring and upfront revenues from its various other energy activities including engineering, design, equipment procurement and sales, energy efficiency and technology consulting services.

VivoPower’s current and future sources of revenue are demonstrated by the below diagram.

VivoPower’s growth outlook

VivoPower has a strong growth outlook with a forecast pro forma group revenue Compound Annual Growth Rate (“CAGR”) of 20% from FY2017 to FY2019 and forecast pro forma EBIT CAGR of 23% for the same period. Our estimate of the group’s pro forma forecast revenue and EBITDA for the next three financial years are as follows:

Pro Forma Statement of Income	PF Historic	PF Forecast	PF Forecast	PF Forecast
( US$ M)	31-Mar-16	31-Mar-17	31-Mar-18	31-Mar-19
Revenue	26.2	47.9	57.4	69.1
EBITDA	(1.1)	18.0	22.0	26.9

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The forecast was underpinned by a visible pipeline of global opportunities, including a significant portion of its forecast FY17 revenue which had already been contracted. VivoPower has a pipeline of 12.5 GigaWatts (“GW”) of opportunities globally, of which 1.75GW have been qualified by VivoPower’s management. VivoPower’s forecast was prepared by applying conservative pipeline conversion metrics, which have the potential to be exceeded should the FY18 and FY19 lead conversion rate be equivalent to its FY17 run rate.

Shareholders and warrantholders of ARWA are cautioned not to rely on the above forecast in making a decision regarding the Transactions. The forecast was prepared for internal purposes by VivoPower. The forecast did not include costs associated with the Transaction and did not include or estimate any changes due to capital structure. The forecast was not prepared with a view to public disclosure or in compliance with IFRS, U.S. GAAP, the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The forecast was, in general, prepared solely for internal use and capital budgeting and other management purposes, is subjective in many respects and therefore is susceptible to varying interpretations and the need for periodic revision based on actual experience and business developments.

The forecast reflected numerous assumptions that VivoPower’s management believed were reasonable when made, including assumptions with respect to general business, economic, market, regulatory and financial conditions and various other factors, all of which are difficult to predict and many of which are beyond VivoPower’s control, such as the risks and uncertainties contained in the section entitled “ Risk Factors .” Accordingly, the forecast may be materially different than actual results.

The projections for revenue and EBITDA are forward-looking statements that are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond VivoPower’s control. While all projections are necessarily speculative, VivoPower believes that the prospective financial information covering periods beyond FY17 carries increasingly higher levels of uncertainty and should be read in that context. There will be differences between actual and forecasted results, and actual results may be materially greater or materially less than those contained in the forecast. The inclusion of the forecast in this proxy statement should not be regarded as an indication that VivoPower, or their representatives, considered or consider the forecast to be a reliable prediction of future events.

VivoPower has not warranted the accuracy, reliability, appropriateness or completeness of the projections to anyone, including to ARWA. Neither VivoPower’s management nor any of its representatives has made or makes any representation to any person regarding the ultimate performance of VivoPower compared to the information contained in the forecast, and none of them undertakes or intends to undertake any obligation to update or otherwise revise the projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events in the event that any or all of the assumptions underlying the forecast are shown to be in error. Accordingly, it should not be looked upon as “guidance” of any sort. VivoPower will not refer back to the forecast in its future periodic reports filed under the Exchange Act.

The projections were prepared by, and are the responsibility of, VivoPower management. Marcum LLP, VivoPower’s auditor, has neither examined nor compiled the forecast and, accordingly, Marcum LLP does not express an opinion or any other form of assurance with respect thereto. The Marcum LLP report included in this proxy statement relates to VivoPower’s historical financial information. It does not extend to the projections and should not be read as if it does so.

EBITDA is defined as earnings before interest, taxes, depreciation and amortization as adjusted for certain one-time non-recurring items and exclusions. EBITDA is a measure that VivoPower and ARWA believe is customarily used by investors and analysts to evaluate the financial performance of companies in VivoPower’s industry. VivoPower’s management also believes that EBITDA is useful in evaluating its core operating results. However, EBITDA is not a measure of financial performance under IFRS or U.S. GAAP and should not be considered an alternative to operating income or net income as an indicator of VivoPower’s operating performance. Because EBITDA is not calculated identically by all companies, the presentation in this proxy statement/prospectus may not be comparable to those disclosed by other companies.

Employees

VivoPower has 128 employees ³⁰ located in 9 offices globally. VivoPower believes its relations with its employees are good.

³⁰ Management estimate of pro forma full time equivalent employees had the business combination occurred on March 31, 2016 .

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Properties

VivoPower’s principal executive office is located at 23 Hanover Square, Mayfair, London W1S 1JB, UK. VivoPower leases this space, consisting of approximately 500 square feet. VivoPower considers this space adequate for its current operations.

Legal Proceedings

There are no actual or, to its knowledge, threatened legal proceedings against VivoPower.

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VIVOPOWER’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the “ Selected Historical Financial Information” section and the accompanying financial statements and related notes included elsewhere in this proxy statement/prospectus. The following discussion contains forward-looking statements that reflect VivoPower’s future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside VivoPower’s control. VivoPower’s actual results could differ materially from those discussed in these forward-looking statements. Please read the sections entitled “ Risk Factors ” and “ Forward-Looking Statements. ” In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur.

Overview

This operating and financial review is divided into the following sections:

●

Critical accounting policies – a discussion of the Group’s accounting policies that require critical judgements and estimates, including the impact of recent accounting pronouncements;

●

Description of the Group – a general description of the corporate and business structure, the basis of presentation of financial information, and the components of, and key drivers of, financial results and economic factors affecting the Group and results of operations;

●

Results of operations – a discussion and analysis of the Group’s results of operations for fiscal year 2016;

●

Financial condition, liquidity and capital resources – an analysis of funding and treasury policies, cash flows and sources and uses of cash;

●

Trend information – a summary of trends within our results of operations;

●

Off-balance sheet arrangements – disclosure regarding off-balance sheet arrangements; and

●

Disclosure of contractual obligations – a summary of the timing and amounts of known contractual obligations.

Critical Accounting Policies

For detailed discussion of the Critical Accounting Policies, please see Note 2 to the consolidated financial statements of VivoPower.

Use of estimates

The following are the critical judgments that management has made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements:

●

The Group is required to make a judgment to determine whether funding advanced for the construction of solar arrays is recognized as a financial asset, an investment property, or inventory.

●

The Group is required to make a determination regarding the collectability of its note receivable.

Recent Accounting Pronouncements

For detailed discussion of the impact of Recent Accounting Pronouncements, please see Note 2 to the consolidated financial statements of VivoPower.

Description of the Group

VivoPower was formed and commenced operations in February 2016 as a holding company to invest in the origination, construction, transfer, operation and optimisation of solar electricity generation facilities globally. We design, install, maintain and transfer solar power plants through on site generation facilities and large scale grid feed projects. Our initial activity is centred in the United States of America, with growth in European activities already underway.

Our business is organized primarily into a single pillar, being the provision of solar services. Within this, there are two key target submarkets, the Commercial, Industrial and Government sectors and Utility-Scale projects.

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The CIG sub market focuses on solar facilities which are situated behind-the-meter for CIG clients. We construct solar generation facilities on customer’s sites and feed energy directly to the client. In this fashion, we disintermediate the wholesale electricity market, the electricity grid and the electricity retailer sharing in the savings with the client.

The Utility-Scale (U-S) sub market focuses on wholesale electricity generation through large or Utility-Scale sized installations. These are generally situated on large tracts of land and are directly connected to the distribution (low voltage) or transmission (high voltage) grids. These large projects sell electricity directly to utilities.

Recent Events

The consolidated financial statements presented herein reflect our operations to March 31, 2016. However, subsequent to the end of the period, we have on July 29, 2016 entered, through a wholly owned subsidiary, into an Equity Capital Contribution Agreement with NES US NC-31, LLC under which such company will subscribe for an 85.55% interest in the NC-31 project currently owned by VivoPower. We have also secured construction loans with a principal amount of $35.3 million and ITC Bridge Loans with a principal amount of up to $25.7 million from KeyBank National Association as administrative agent to fund construction of the NC-31 project, which is scheduled for completion in January 2017.

Results of Operations

U.S. dollars	February 1, 2016 (inception) through March 31, 2016
General and administrative expenses	$	279,036
Other expense
Interest expense		964
Currency losses		661
Total other expense		1,625

Total comprehensive loss	$	(280,661	)

The results reflect the Group’s limited operating history since incorporation on February 1, 2016. The company has focused its efforts to build a senior team of experienced industry professionals whose primary role is to find and evaluate utility scale, commercial, industrial, and governmental solar development opportunities meeting the company's stringent investment criteria. To date, the company has commenced construction of two utility scale solar projects described further in “ Financial condition, liquidity and capital resources ” subsection below.

For the period from inception (February 1, 2016) to March 31, 2016, VivoPower had a net loss of $280,661. General and administrative expenses totalled $279,036 and comprised primarily compensation costs ($184,927), professional fees ($22,705), occupancy cost ($41,599), and travel ($29,632).

Financial Condition, Liquidity and Capital Resources

Sources and Trends in Liquidity

As a pre-revenue group, VivoPower and its subsidiaries, were dependent on advances of $8.0 million from its parent company, AWN, to fund operations and administrative needs. Subsequent to March 31, 2016, AWN has continued to provide loan funding as required by VivoPower. The total principal balance of loans outstanding at July 31, 2016 was $16.5 million. A promissory note is in place between the relevant parties and further periodic advances have been documented when incurred. AWN has stated an intention to continue providing financing to VivoPower while it is a wholly owned subsidiary – until the group commences generating revenue. The advances currently become due in February and March 2017 and will either be extended by mutual agreement, or repaid from operating cash flows generated during fiscal year 2017 or from excess cash following the completion of the business combination transaction. In this regard, we note that the pending commissioning of the NC-31 project in early 2017 is expected to provide the Group with $11.6 million in gross cash proceeds. This cash is expected to fund further project acquisitions and administrative needs until proceeds are also received from the second solar project, NC-47, and others in VivoPower’s pipeline.

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Longer term, the solar projects developed and built by VivoPower's subsidiaries are expected to be a significant source of revenue and cash flow including through build and transfer fees as well as from the provision of ancillary support and optimisation services to project owners under long-term contracts.

Acquisitions

NC-31

In July 2016, VivoPower's wholly-owned subsidiary, IS-31 Holdings, LLC (“31Holdings”) acquired a 34.2 MW AC solar project to be built in Bladen County, North Carolina U.S. Total cost of the project is expected to be $79.4 million and third party equity and financing, including construction financing and tax equity, has been arranged. Construction of the project has begun and COD is expected in early 2017.

NC-47

The Group is also pursuing the acquisition of the NC-47 project and expects to sign definitive documents imminently. NC-47 owns a 33.8 MW AC solar project to be built in Robeson County, North Carolina U.S. Total as built and transferred cost of the project is expected to be $78.6 million. Final engineering and design work is in progress and discussions on financing for the project are underway with multiple parties.

Trend Information

The Group’s results depict only 2 months of operations, and at a time when the Group was in a pre-revenue state. Therefore, future results are expected to vary significantly from the financial information depicted.

Off-Balance Sheet Arrangements

As of March 31, 2016 and July 31, 2016, the Group did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Disclosure of Contractual Obligations

Payments due by period

Contractual Obligations

Total

Less than 1 year

1 - 3 years

3 - 5 years

More than 5 years

Long-Term Debt Obligations (a)

8,000,258

–

Interest on debt obligations (b)

605,000

–

Capital (Finance) Lease Obligations

–

Operating Lease Obligations (c)

182,418

136,430

45,988

–

Purchase Obligations

–

Other Long-Term Liabilities Reflected on the Company's Balance Sheet

–

Total

8,787,676

8,741,688

45,988

–

________________

(a)

The notes are payable to the parent company, AWN, and incur interest as a rate of 6% per annum, and mature in February and March 2017. Funds are advanced under the notes as needed for project and administrative matters. Though there is no specific schedule of advances, additional advances under the notes are expected. At July 31, 2016, principal advances under the notes totalled $16.5 million.

(b)	Interest due through maturity to the parent company pursuant to the notes payable.

(c)	Headquarters office lease in London, UK.

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VIVOPOWER AUSTRALIA’S MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Selected Historical Consolidated Financial Information

The following tables present our selected historical consolidated financial information for the two most recent fiscal years. The selected consolidated financial information presented below as of, and for the fiscal years ended March 31, 2016 and 2015 has been derived from, and is qualified in its entirety by reference to, our audited consolidated financial statements, in each case included elsewhere in this filing.

The selected historical consolidated financial information presented below has been prepared in a manner consistent with our accounting policies in accordance with International Financial Reporting Standards as issued by the IASB (IFRS). IFRS differs in certain respects from U.S. GAAP. The selected historical consolidated financial and operating data presented below is in AUD. Our functional currency is Australian dollars.

Overview

This operating and financial review is divided into the following sections:

●

Description of the Group – a general description of the corporate and business structure, the basis of presentation of financial information, discontinued operations and the components of, and key drivers of, financial results and economic factors affecting the Group and results of operations;

●

Results of operations – a discussion and analysis of the Group’s results of operations for FY2016 as compared to FY2015;

●

Financial condition, liquidity and capital resources – an analysis of funding and treasury policies, cash flows and sources and uses of cash;

●

Trend information – a summary of trends within our results of operations;

●

Off-balance sheet arrangements – disclosure regarding off-balance sheet arrangements;

●

Contractual and commercial commitments – a summary of the Group’s contractual and commercial commitments;

●

Critical accounting policies – a discussion of the Group’s accounting policies that require critical judgements and estimates

Description of the Group

VivoPower Australia is a next generation renewable energy company that is involved in the origination, financing, construction, transfer, operation and optimisation of solar electricity generation facilities globally. We operate a BTO model involving the design, installation, transfer and maintenance of solar power plants through on site generation facilities and large scale grid feed projects. As of March 31, 2016 we had 4 employees located at 3 offices.

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Consolidated Statement of Profit or Loss and Other Comprehensive Income

	31-Mar-16			31-Mar-15
	A $			A $

Sales Revenue		81,340			614
Cost of Sales		(15,485	)		-
Gross profit		65,855			614

Other Income		392,765			41,983
Sales Expenses		(228,758	)		(56,847	)
Employee Benefits expense		(445,850	)		(226,830	)
Occupancy		(39,852	)		(11,762	)
Consulting and Professional Fees		(850,025	)		(82,767	)
Information and Communications		(21,930	)		(10,104	)
Depreciation and Amortisation		(2,431	)		(361	)
Philippines Costs		(20,472	)		(115,674	)
Finance Costs		(35,578	)		(371	)
Other Expenses		(363,833	)		(68,320	)
Loss before income tax		(1,549,569	)		(530,439	)
Income tax benefit		6,305			-

Loss for the period		1,543,264			530,439
Other comprehensive income		-			-
Total comprehensive loss for the period		1,543,264			530,439

Loss attributable to:		1,543,264			530,439
Equity holders of the parent
Total comprehensive loss for the period		1,543,264			530,439

Results of Operations

During the year the Group supplied electricity to customers through the use of solar technologies. VivoPower designs, installs and maintains solar power plants through on site generation facilities.

The loss after tax of the Group for the year ended March 31, 2016 is A$1,543,264 (March 31, 2015: A$530,439 loss) after an income tax benefit of A$6,305 (March 31, 2015: A$0 benefit) was taken into account.

Components of financial results and their drivers

The key components of the Group’s revenue and expenses and the internal and external factors that affect results are described below.

Sales revenue

The Group currently derives the majority of its revenue from sales of solar energy. Consequently, our results of operations are primarily driven by factors that impact the prices we are able to charge for our energy and the volume of energy generated.

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Sales revenue may also be derived from the sale of our projects.

Sales price – CIG

The upper limit for new CIG projects is in many cases the customer’s avoided cost of energy i.e. the grid energy we are displacing with on-site generation. In most markets, this grid cost of energy is composed of three major components; (1) wholesale energy price (green and black), (2) network costs, and (3) electricity retailer margin. To be competitive with current technologies, our all in cost of delivery at the customer’s site must be below the customer’s current cost. The higher the customer’s current contract, the higher the price charged and therefore the higher the margin earned. The electricity prices for our current projects are contractually defined.

Sales price – U-S

The upper limit for new U-S sub market projects can be the wholesale energy price (green and black), or an existing contracted rate or feed in tariff. The wholesale energy price differs from state to state and is currently highest in South Australia and Queensland. The long term prices we are able to achieve (and therefore margins) are impacted by the spot price of wholesale electricity and the long term forecasts of electricity. The higher the wholesale prices, the higher the margin earned.

Energy production

The production of our energy on our existing projects depends on a number of factors including primarily weather and insolation but also includes equipment uptime. H owever volatility on any given project is typically low year on year.

Competition

There are a number of more tradition solar project developers in Australia and Asia whom compete against the Group for access to projects and customers. However, competition does not affect projects that have fixed Power Purchase Agreements (i.e. existing portfolio projects). Once the agreements are executed with counterparties revenues are contractually defined.

General economic conditions

Australian real GDP continues to be supported by non-mining activity growth, while the mining sector continues to face the effects of a cyclical downturn in activity. The majority of VivoPower target customers are outside the mining sector.

Foreign Exchange

The consensus view on the AUD is slightly bearish which causes project costs (equipment denominated in USD) to increase over time. The reduction in overall costs in USD is expected to outweigh the impact of the depreciating AUD allowing solar projects to maintain their competitiveness against alternative energy sources.

Fiscal Year 2016 Compared to Fiscal Year 2015

Consolidated Results of Operations

Sales Revenue

Sales Revenue increased by approximately A$80 thousand, to A$81 thousand in FY16 from A$1 thousand in FY15. The increase was primarily driven by the commencement of Amaroo Solar generation revenue in January 2016, which amounted to A$71 thousand for the year.

Cost of Sales

Cost of Sales increased from A$0 in FY15 to A$15 thousand in FY16. The increase was primarily driven by an increase in depreciation charges against the Amaroo Solar project.

Other Income

Other Income increased by A$351 thousand, 836%, to A$393 thousand in FY16 from A$42 thousand in FY15. The increase was primarily driven by the on-charge of costs incurred while developing projects in the Philippines for a Philippine domiciled company of A$279 thousand in FY16. We provided consulting to a local Philippine JV partner and on-charged these costs. Work on these particular JV projects has subsequently ceased.

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Sales expenses

Sales expenses increased by A$172 thousand, or 302%, to A$229 thousand in FY16 from A$57 thousand in FY15. The increase in sales expenses were primarily driven by an increase of A$171 thousand in sales resource to A$227 thousand in FY16 from A$56 thousand in FY15 as we increased our sales and business development activities.

Employee benefits expense

Employee benefits expense increase by A$219 thousand, or 97%, to A$446 thousand in FY16 from $227 thousand in FY15. The increase in employee benefits expense was primarily driven by an increase in headcount from 3 to 5 through the majority of FY15 and FY16, respectively.

Occupancy

Occupancy expense increased by A$28 thousand, or 239%, to A$40 thousand in FY16 from A$12 thousand in FY15. VivoPower moved offices in July 2015 to larger premises increasing the occupancy expense from A$847 per month in 2015 to A$2,250 per month in 2016. In January 2016, occupancy expenses of A$2,500 per month commenced for the Amaroo Solar project being licence fees for the occupancy of the Amaroo School rooftop for the purposes of the Amaroo Solar project.

C onsulting and professional fees

Consulting and professional fees increased by A$767 thousand, or 927%, to A$850 thousand in FY16 from A$83 thousand in FY15. The increase in consulting and professional fees were driven by an increase in project development fees from A$0 in FY15 to A$476 thousand in FY16 related to the acquisition and build of our one of our CIG projects and the increase in consulting fees from A$1 thousand in FY15 to A$295 thousand in FY16 related to Singapore consulting expenses, consulting fees to AWN for M&A support and project development consultation .

Information and communication

Information and communication expense increased by A$12 thousand, or 117%, to A$22 thousand in FY16 from A$10 thousand in FY15. The increase in information and communication expense was due to the change of office where the internet charges were previously incorporated into the rental costs. Increased charges were also incurred for conference call facilities. Costs were also expended on a redesign of the website.

Depreciation and amortisation

Depreciation and amortisation expense increased by A$2 thousand to A$2 thousand in FY16 from A$0 thousand in FY15. The increase was driven by the commencement of depreciation on Solar Panel Systems and the additional depreciation on A$1,203 thousand of Solar Panel Systems added during FY16.

Philippines costs

Philippines operational costs decreased by approximately A$96 thousand, or 82%, to A$20 thousand in FY16 from A$116 thousand in FY15. The decrease in operational costs was driven by a decision in September 2015 to cease development on a number of Philippine domiciled projects.

Finance costs

Finance costs increased by A$35 thousand in FY16 from A$0 thousand in FY15. The increase in finance costs was primarily driven by a new facility entered into during the year to fund a CIG project.

Other expenses

Other expenses increased by A$296 thousand, or 433%, to A$364 thousand in FY16 from A$68 thousand in FY15. The increase was primarily due to A$247 thousand of tariff entitlement expense incurred in FY16 for the purchase of Feed-in-Tariff rights for the Amaroo Solar project.

Income tax benefit

Income tax benefit increased by A$6 thousand in FY16 from A$0 in FY15. The increase in income tax benefit was primarily driven by an increase in the deferred tax asset book entry.

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Financial Condition, Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from financing activities including borrowings and issuance of shares or other equity. Our primary uses of cash are to fund working capital and capital expenditures. We believe that our existing cash and cash equivalents, operating cash flows and potential cash release on sale of our existing projects will be sufficient to meet our capital requirements for at least the next 12 months.

As of March 31, 2016, cash and cash equivalents were A$877 thousand, a decrease of A$1,558 thousand compared to March 31, 2015. The decrease was primarily due to capital expenditure and working capital investment associated with the acquisition and build of our existing projects.

Operating Activities

Net cash used in operating activities increased by A$1,510 thousand in FY16 to A$1,893 thousand from A$382 thousand in FY15. This reflected the working capital requirements of the Group incorporating additional expenses from increased scope of activity.

Investing Activities

Net cash used in investing activities increased by A$2,243 thousand in FY16 to A$2,595 thousand from A$352 thousand in FY15. This increase was primarily due to the development of the Amaroo Solar project (A$1,233 thousand) and Sun Connect portfolio of projects (A$1,017 thousand).

Financing Activities

Net cash provided by financing activities decreased by A$239 thousand in FY16 to A$2,931 thousand from A$3,170 thousand in FY15. This decrease was driven by a decrease in proceeds from shares and equity instruments of A$1,586 thousand, offset by an increase in proceeds from borrowings of A$1,346 thousand.

Treasury policies

We manage our debt and equity capital positions through a number of Board approved treasury policies designed to appropriately manage our capital structure.

Financial Commitments

The group has a grant of authority policy which outlines the delegation of authority with respect to any financial commitment by any of the Group companies. The policy addresses guarantees, security over assets (mortgages, charges and liens), hedging, take or pay contracts, joint venture agreements and other forms of corporate commitments.

The chairman oversees the adherence to this policy to ensure conformity with our corporate financial strategy and our financial obligations, including our negative pledge undertakings in financing arrangements.

Quantitative and qualitative disclosure about market risk

Our activities expose us to a variety of financial and market risks, including interest rate risk and market pricing risk. From time to time, we enter into interest rate forward contracts to manage these risks. The Group does not trade in derivative financial instruments for speculative purposes.

The Group has entered into a 3 year fixed forward interest rate contract in relation to its debt exposure on the Amaroo Solar project. At the end of the 3 year period, the interest rate will revert to a floating rate at which time it may be re-hedged.

Trend Information

The Group has commenced earning significant generation revenues from January 2016 and therefore only has recorded 3 months to the record date of these revenues. Future results may vary as generation revenue continues to grow.

Off-Balance Sheet Arrangements

Other than as described under “ Tabular disclosure of contractual obligations ” subsection below, as of March 31, 2016, we had no significant off-balance sheet contractual obligations or other commitments.

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Tabular Disclosure of Contractual Obligations

The following table sets forth certain information about our contractual obligations as of March 31, 2016:

Payments Due by Fiscal Period

A$	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Debt obligations	$	1,346,872	$	0	$	200,573	$	204,520	$	941,779

Operational leases	$	623,456	$	54,380	$	64,077	$	60,000	$	445,000

Purchase obligations		–		–		–		–		–

Interest	$	461,231	$	64,486	$	119,231	$	100,583	$	176,931

Total	$	2,431,559	$	133,568	$	369,179	$	365,103	$	1,563,710

Critical Accounting Estimates and Judgments

Our financial statements and the related notes thereto contain information that is pertinent to Management’s Discussion and Analysis. In preparing our financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Changes to these assumptions and estimates could have a material effect on the company’s financial statements. However, the company believes it has taken reasonable, but conservative, positions where assumptions and estimates are used in order to minimize the negative financial impact to the partnership that could result if actual results vary from the assumptions and estimates. In management’s opinion, the areas where the most significant judgment is exercised for all business segments includes:

●

the determination of impairment estimates of long-lived assets (including intangible assets) and goodwill,

●

provision for impairment of receivables; and

●

amortisation of purchased solar contract.

The company discusses its significant accounting policies, including those that do not require management to make difficult, subjective, or complex judgments or estimates, in Note 4 of the Notes to Condensed Combined and Consolidated Financial Statements.

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AEVITAS’ MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Selected historical consolidated financial information

The selected historical consolidated financial information presented below has been prepared in a manner consistent with our accounting policies in accordance with IFRS as issued by the IASB. IFRS differ in certain respects from U.S. GAAP. The selected historical consolidated financial and operating data presented below is in Australian dollars. Our functional currency is Australian dollars.

Overview

This operating and financial review is divided into the following sections:

●

Results of operations – a discussion and analysis of the Group’s results of operations for FY2016 as compared to FY2015;

●

Financial condition, liquidity and capital resources an analysis of funding and treasury policies, cash flows and sources and uses of cash;

●

Trend information – a summary of trends within our results of operations;

●

Off-balance sheet arrangements – disclosure regarding off-balance sheet arrangements;

●

Contractual and commercial commitments – a summary of the Group’s contractual and commercial commitments;

●

Critical accounting policies – a discussion of the Group’s accounting policies that require critical judgements and estimates

Description of the Group

Aevitas provides electrical and mechanical engineering, design and maintenance services to clients in a range of industries. The business provides power generation solutions including design, supply, installation and maintenance of power systems, and control systems. The business also provides and maintains industrial switchboards and motor control centres, electrical motors and non-destructive testing services and energy efficiency services. As of March 31, 2016 we had approximately 122 employees (on a full time equivalent basis) located at offices across Australia.

Aevitas operates via J.A. Martin Electrical Pty Limited (“JA Martin”) and Electrical Engineering Group Pty Limited, encompassing the operations of Kenshaw Electrical Pty Limited (“Kenshaw”). A third division, Generator and Power Station Services Pty Limited was placed into external administration on 4 March 2015 and its operations discontinued.

JA Martin is based in Tomago (Newcastle, New South Wales), Mount Thorley (Hunter Valley, New South Wales) and Gunnedah (Liverpool Plains, New South Wales) and has been operating primarily in the Newcastle region, Hunter Valley and western New South Wales for over 40 years. JA Martin primarily provides products and services through its switchboards control rooms, electrical maintenance and service and electrical contracting projects divisions.

Kenshaw has been operating from its base in Cardiff (Newcastle, New South Wales) for over 20 years. Kenshaw provides power generator sales & service, electrical motors installation and service, and motor management services and non-destructive preventative maintenance testing. Customers include hospitals, data centres, and a range of government departments and industrial businesses.

Aevitas’ mission is to be its customers trusted integrated power expert.

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Statement of Profit or Loss and Other Comprehensive Income

	2016 A$			2015 A$
Sales revenue		35,439,263			39,595,734
Cost of sales		(31,651,837	)		(35,424,152	)
Gross profit		3,787,426			4,171,582

Other income		421,792			631,065
Occupancy costs		(427,360	)		(435,429	)
Administrative expenses		(3,824,633	)		(3,643,510	)
Impairment of intercompany loans		(29,378	)		(1,258,224	)
Finance costs		(2,004,367	)		(1,632,047	)
Share of net losses of equity-accounted associates		(287,105	)		(211,645	)

Profit before income tax		(2,363	)		(2,378,208	)
Income tax expense		(293,197	)		7,046

Profit from continuing operations		(2,656,822	)		(2,378,208	)
Profit/(loss) from discontinued operations		-			(474,289	)

Profit for the year		(2,656,822	)		(2,845,451	)

Other comprehensive income for the year, net of tax		-			-
Total comprehensive income for the year		(2,656,822	)		(2,845,451	)

Profit attributable to:
Members of the parent entity		(2,763,177	)		(2,816,235	)
Non-controlling interest		106,355			(29,216	)
		(2,656,822	)		(2,845,451	)
Total comprehensive income attributable to:
Members of the parent entity		(2,763,177	)		(2,6816,235	)
Non-controlling interest		106,355			(29,216	)
		(2,656,822	)		(2,845,451	)

Results of Operations

During the year the Group provided generation solutions, industrial switchboards, electrical motors, non-destructive testing and energy efficiency services to a range of commercial and industrial customers.

The consolidated loss of the Group amounted to A$2,656,822 (2015: A$2,845,451).

Components of financial results and their drivers

The key components of the Group’s revenue and expenses and the internal and external factors that affect results are described below.

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Sales revenue – general

The Group derives the majority of its revenue from the JA Martin business, followed by Kenshaw. Our results of operations are primarily driven by factors that impact the prices we are able to charge for our products and services as well as demand in the end markets we serve, each of which is discussed further below.

	2016 A$		2015 A$
JA Martin		25,252,736		27,940,223
Kenshaw		10,186,527		11,650,953
Other		-		4,558
Total		35,439,263		39,595,734

Sales revenue – JA Martin

JA Martin achieved revenues of A$25.2 million in 2016 a decrease of A$2.7 million, or 10%, compared to A$27.9 million in 2015. 74% (78%, 2015) of this revenue was charged on a lump sum basis and related to infrastructure style projects, works for utility providers and regional farming sectors, notably the cotton industry. These projects generally require the manufacture of large switchboards and the deployment of project management and installation teams to various sites to complete the installation. The majority of the remaining revenue was charged based on time spent basis and related to service and maintenance agreements the business has with local based organisations again in the agriculture, mining, utilities and building supply industries.

The decrease in revenue was attributable to a slowdown in the mining industry and regional economy, which impacted the number of new infrastructure projects (i.e. reduction in total volumes). JA Martin identified trends suggesting the mining boom was coming to a cyclical peak and had therefore diversified its client based to other industrial clients and started moving into the renewable energy sector.

The prices charged for lump sum revenues are driven by fixed price contracts, bid on through team of estimators. The expressions of interest come from previous clients, recommendations and online portals. The level of success depends heavily on the demonstration of past experience, quality management assurance accreditations, safety records and most notably established relationships.

The prices charged for time spent revenue are based on the market cost of qualified electrical engineering personnel and the rates charged by other competing engineering firms in the local market. Volume based pricing applies to clients in some cases. Premium pricing is also available when critical faults occur and personnel need to be deployed at a ‘at call’ basis.

Customer demand for JA Martin’s services is driven by the demand for new electrical and mechanical installation across a range of end markets.

Sales revenue – Kenshaw

Kenshaw achieved revenues of A$10.1 million in 2016 a decrease of A$1.5 million, or 13%, from A$11.7 million in 2015. 52% (87%, 2015) of this revenue was received on a lump sum basis from projects that required large back up, or high power needs, as supplied through an axillary generator. Kenshaw’s supply to the data centre sector accounted for 22% (22%, 2015) of the lump sum revenue achieved. Income from labour made up approximately 15% (13%, 2015) of Kenshaw’s 2016 revenue and relates to repairing electronic motors and generators. A small component of the labour relates to generator preventative maintenance agreement, requiring a generator mechanic to attend the clients site and perform a service.

The decrease in revenue was due in part to timing of completion of large projects (i.e. volume driven impact).

The prices charged for these projects is driven by Kenshaw’s value add, and industry competitive dynamics.

The prices charged for income from labour is based on the market cost of qualified personnel and the rates charged by other competing engineering firms in the local market. Premium pricing is achieved when the motor or generator is critical to the operation of the industrial client, due to the need to respond if a fault occurs within a set time period.

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Customer demand for Kenshaw’s services is driven by the level of industry activity and demand in Kenshaw’s catchment areas, from a range end market users including in the health industry, data centres and mining companies. Kenshaw customers are clients that have a need to maintain power on all time and hence need back supports, maintenance checking of their power network and rapid response if faults occur. Aggregate demand in these sectors reduced in 2016 notably as the level of mining sector spend reduced in 2016.

Cost of sales

Cost of sales totalled A$31.7 million in fiscal year 2016 (A$35.4 million, 2015), resulting in Aevitas achieving a gross profit margin of approximately 11% for the year (11%, 2015). These direct costs were primarily made up of direct labour costs and wages of trade personnel working within a negotiated EBA rate and the sale of physical inventory and raw materials of switchboards, generators and electrical cabling and componentry. Lower volumes due to both slower new project infrastructure and cyclical project timing impacts drove the decrease in cost of sales in 2016.

The cost of direct labour is influenced by the volume of work required to be undertaken on a particular project as well as market wage rates for qualified electrical and mechanical engineering personnel.

The cost of raw materials and physical inventory is impacted by exchange rates, and supplier competition. The cost of switchboards is impacted by Australian wage growth, due to their manufacture locally.

Competition

There are a number of national and regional engineering and mining services companies that compete with Aevitas. JA Martin’s primary competitors are Downer EDI Limited, O’Donnell Griffin and Stowe, while Kenshaw’s primary competitors are Sulzer, P&H Mine Pro and UGL. Contracts are typically won via formal tender processes or through repeat business with long-term term customers.

General economic conditions

Australian real GDP continues to be supported by non-mining activity growth, while the mining sector continues to face the effects of a cyclical downturn in activity. Aevitas has historically been indirectly and directly exposed to the mining economy as many of its customers have operated in this sector. However, the business has diversified its customer base and service offering in recent years, and has significantly reduced its focus on mining related activities with a corresponding increase in focus on providing engineering products and services to non-mining customers and building a renewables and energy efficiency services business.

Regulation

Aevitas activities are regulated by a range of workplace safety standards, given its operations in the industrial space.

Foreign exchange

The AUD has recently declined relative to the USD, which has impacted the price of raw materials and inputs which are typically priced in USD. Direct and indirect labour costs are unaffected by currency movements.

As Aevitas’ customer base is in Australia, its revenues are also typically denominated in AUD and therefore unaffected by movements in exchange rates.

Fiscal 2016 Compared to Fiscal 2015

Consolidated Results of Operations

Sales revenue

Sales revenue decreased by A$4.2 million, or 11%, to A$35.4 million in FY16 from A$39.6 million in FY15. A$2.7 million (or 65%) of this decrease was as a result of the JA Martin business, with the vast majority of the remaining decrease attributable to the Kenshaw business. The decrease in revenue was related to lower volumes of new business from the company’s new projects division. The projects department in Kenshaw was 26% down on new projects due in part to the timing of its large projects. The business has largely maintained its margins despite the change in its revenue mix, and the impact of pricing on the change in revenue relative to FY15 was minimal.

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Cost of sales

Cost of sales decreased by A$3.7 million, or 10.5%, to A$31.7 million in FY16 from A$35.4 million in FY15. The decrease in Cost of sales was primarily driven by a reduction of A$3.7 million in material costs to A$14.5 million in FY16 from A$18.2 million in FY15. The decrease in these cost items overall related to and broadly corresponded with the reduction in revenue for the business.

Administrative expenses

Administrative expenses increased by A$0.2 million, or 5%, to A$3.8 million in FY16 from A$3.6 million in FY15. The increase in administrative expenses was primarily driven by a A$0.2 million increase in depreciation and amortisation expenses, an A$0.2 million increase in employee benefits costs and a A$0.1 million loss on disposal of fixed assets in FY16. These increases were primarily due to some modest wage cost increase, and investment in the mechanical workshop of Kenshaw to increases its product base offerings. The loss on disposal of equipment occurred due to the write off of the old equipment.

The increase was also partially offset by a A$0.3 million reduction in administration, professional and management fees. The reduction in these costs were driven by improved operating efficiencies and a focus on cost management.

Impairment of intercompany loans

Impairment of intercompany loans decreased by A$1.3 million, or 98%, to A$0.0 million in FY16 from A$1.3 million in FY15. The intercompany loans impaired in FY15 related to amounts owed by GPS Services and were impaired on the basis that it was unlikely that the amount would be received by Aevitas, due to this business being placed into external administration.

Finance costs

Finance costs increased by A$0.4 million, or 23%, to A$2.0 million in FY16 from A$1.6 million in FY15. The increase in finance costs was primarily driven by an increase in interest expenses on convertible notes of A$0.4 million to A$1.9 million in FY16 from A$1.5 million in FY15.

Share of net losses of equity-accounted associates

Share of net losses of equity-accounted associates increased by A$0.0 million, or 36%, from A$0.0 million in FY15. The Group has a 26.9% interest in an associate entity, VivoPower Australia, which is domiciled in Australia. The investment in this entity is accounted for using the equity accounting method.

Income tax

Income tax increased by A$0.3 million, to A$0.3 million in FY16 from A$0.0 million in FY15. The increase in income tax was primarily driven by an increase of A$0.4 million in tax losses not brought to account, that was partly offset by a A$0.1 million decrease in non-deductible impairment and other expenses.

Discontinued operations

The company had no discontinued operations in FY16. In FY15 on 4 March 2015, the Group placed Generator and Power Station Services Pty Limited (a subsidiary entity) into External Administration and therefore discontinued its operations in their business segment.

Financial Condition, Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from operations and borrowings under our credit facilities. Our primary uses of cash are to fund working capital, capital expenditures, and repayment of debt. We believe that our existing cash and cash equivalents, operating cash flows and borrowing capacity under our credit agreement as described below will be sufficient to meet our capital requirements for at least the next 12 months.

As of March 31, 2016, cash and cash equivalents were A$1.9 million, a decrease of A$0.3 million compared to March 31, 2015. The decrease was due to cash provided by operating activities increasing by A$0.1 million, offset by capital expenditures of A$0.2 million and repayment of borrowings of A$0.2 million.

Operating Activities

Net cash provided by operating activities increased by A$0.1 million in FY16 from A$0.02 million net cash used in operating activities in FY15. The increase primarily reflects a reduction in interest paid, with lower receipts from customers during the year largely offset by lower payments to suppliers and employees.

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Investing Activities

Net cash used in investing activities decreased by A$1.0 million in FY16 from A$1.2 million net cash used in investing activities in FY15. FY15 investing cash flows included a A$0.5 million investment made in associates as well as A$0.5 million in cash utilised in the winding down and liquidation of Generator and Power Station Services Pty Limited. These were one-off cash uses that were not replicated in FY16.

Financing Activities

Net cash used in financing activities increased by A$0.3 million in FY16 from A$0.0 million net cash provided by investing activities in FY15. This resulted primarily from a net A$0.2 million repayment of borrowings in FY16 compared to a net increase in borrowings of A$0.1 million in FY15.

Treasury policies

We manage our debt and equity capital positions through a number of Board approved treasury policies designed to appropriately manage our capital structure.

Financial Commitments

The Financial Controller oversees the adherence to this policy to ensure conformity with our corporate financial strategy and our financial obligations, including our negative pledge undertakings in financing arrangements.

Quantitative and qualitative disclosure about market risk

Our activities expose us to a variety of financial and market risks, including interest rate risk. The Group does not trade in derivative financial instruments for speculative purposes, but may from time to time enter into forward contracts or deploy other hedging strategies to manage these risks.

Aevitas currently has total borrowings of A$22.8 million, with fixed interest rates.

Trend Information

The group has actively focused on taking on work that delivers a higher gross margin and profitability. Recent trends indicate that overall revenue is expected to continue to decline in the short term as management reduces exposure to customers that provide low margin or unprofitable work. Consequently, cost of sales is continuing to fall faster than revenue, resulting in positive growth in gross profit and margins. Trading in the first quarter following the end of the FY16 financial year has been positive overall and management’s discipline has seen the group improve its profitability relative to the prior corresponding period. Management is also increasing its focus on energy efficiency activities, which may be a source of additional profitability.

Off-Balance Sheet Arrangements

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Tabular Disclosure of Contractual Obligations

The following table sets forth certain information about our contractual obligations as of March 31, 2016:

A$			Payments Due by Fiscal Period
	Total		1 Year or Less		1 - 3 Years		3 - 5 Years	More than 5 Years
Debt obligations	$	18,886,354		1,382,391		17,503,963
Finance leases		400,474		199,453		201,021
Purchase obligations		3,569,301		3,569,301
Interest		6,178,447		187,665		5,990,782
Total	$	29,034,576		5,338,810		23,695,766

Critical Accounting Estimates and Judgments

●

the determination of impairment estimates of long-lived assets (including intangible assets) and goodwill,

●

provision for impairment of receivables; and

●

income taxes and deferred tax assets.

The company discusses its significant accounting policies, including those that do not require management to make difficult, subjective, or complex judgments or estimates, in Note 2 of the Notes to Condensed Combined and Consolidated Financial Statements.

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MANAGEMENT OF VIVOPOWER FOLLOWING THE TRANSACTIONS

As contemplated by the Contribution Agreement, VivoPower’s board of directors following the Transactions will be comprised of six directors.

The following sets forth certain information concerning the persons who are expected to serve as VivoPower’s directors and executive officers following the consummation of the Transactions. There will also be a sixth individual appointed as a director of VivoPower, to be finalized and disclosed in due course prior to the closing of the Transactions.

Name	Age	Position
Kevin Chin	43	Non-Executive Director and Chairman
Philip Comberg	48	Chief Executive Officer and Director
David Pilotte	58	Chief Financial Officer
Carl Weatherley-White	53	Group Director of Finance
Gary Hui	47	Non-Executive Director
Peter Sermol	55	Non-Executive Director
Edward Hyams	65	Non-Executive Director

Biographical information relating to Messrs. Chin and Hui are set forth above under the section entitled “ Other Information Related to ARWA – Directors and Executive Officers .”

Dr. Philip Comberg will become Chief Executive Officer on September 1, 2016 and has served as a board member of VivoPower since May 1, 2016. Dr. Comberg brings twenty years of experience as a chief executive officer, board member, investor, investment banker and attorney in Europe, the United States and Asia. Since 2014 Dr. Comberg has served as non-executive Chairman of Solarcentury Holdings, a leading London based solar development and EPC company. At the same time he has advised U.S. hedge fund Magnetar Capital on the build-up of its more than 300 MW solar power asset portfolio in the UK and served on the boards of technology and industrial companies in Silicon Valley and Germany. From 2011 to 2014, Dr. Comberg was Chairman and CEO of Conergy, one of Germany’s foremost solar companies, leading its restructuring and sale to U.S. financial investor Kawa Capital. Prior to that, he served as an Independent Director on the board of Solarfun Power Holdings (now Hanwha QCells), a fully integrated Chinese solar manufacturer, following its listing on Nasdaq in 2006. In 2004, he co-founded Alcosa Capital, a Frankfurt based special situation investment and advisory firm focusing on investments in the German SME sector, advising companies on M&A, debt and equity transactions as well as operational issues and serving as their board member. From 2001 to 2003, Dr. Comberg worked as an investment banker at Deutsche Bank and from 1995 to 2000 as an M&A lawyer with Freshfields Bruckhaus Deringer in Germany and China and completing his legal articles. Dr. Comberg studied law and Chinese at the University of Heidelberg in Germany and Zhong Shan University in China, subsequently completing his Master’s degree at New York University and a Doctor of Law at the University of Düsseldorf, Germany. He speaks English, French, Chinese and German. VivoPower believes Dr. Comberg is well-qualified to serve on the board due to his global executive and board level solar expertise as well as his financial and investment background.

David Pilotte has served as Chief Financial Officer of VivoPower since February 2016. Mr. Pilotte brings more than twenty-five years of experience leading public companies as CFO, COO, Corporate Controller, Treasurer, CRO, and interim executive. In 1996, Mr. Pilotte formed an independent consulting practice, DNP Financial, LLC, through which he has advised companies ranging from start-up to $700 million revenue on matters of accounting, corporate finance, M&A, public reporting, due diligence, debt restructuring, and profit improvement. From January 2014 to January 2016, Mr. Pilotte served as CFO and Secretary of Principal Solar (OTCBB), a company developing solar projects in the U.S. Prior to this, David served as CFO of Calpian (OTCBB) (April 2010 to October 2013); CFO of Omniflight Helicopters (June 2007 to February 2008); and CFO and COO of Digital Recorders, Inc., (Nasdaq) (October 2004 to June 2006). Prior to this, he held other executive level positions with Axtive Corporation (Nasdaq), American Pad & Paper (AMEX), Cyrix/National Semiconductor (Nasdaq), and Baldor Electric Company (NYSE). Mr. Pilotte started his career with Arthur Andersen & Company. Mr. Pilotte holds a bachelor’s degree in finance from the University of Florida, an MBA with concentrations in management and accounting from the University of Houston, and has been a CPA in Texas since 1986. Mr. Pilotte is a member of the Institute for Excellence in Corporate Governance, CEO Netweavers, and Financial Executives International. He also serves as an accounting and reporting expert for investor information groups including Evaluserve’s Circle of Experts and the Gerson Lehrman Group.

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Carl Weatherley-White has served as Group Director of Finance of VivoPower since July 13, 2016. Mr. Weatherley-White brings over twenty-five years of renewable energy transactional experience to VivoPower, with a particular focus on acquisitions, project and corporate finance, private equity and joint ventures. Previously, he was President of Lightbeam Electric Company from December 2013 to February 2016 which aggregated a diversified, international portfolio of renewable energy projects to support an initial public offering. From January 2012 to December 2013, he was Chief Financial Officer of K Road Power Holdings, a private solar development company and portfolio company of Barclays. Prior to this, he was at Lehman Brothers from December 2005 to September 2008 where he was Managing Director and head of project finance, and held the same role at Barclays from September 2008 to December 2011. He has global energy infrastructure transaction experience for a wide variety of private equity and strategic clients. He also led renewable energy tax equity investing at Credit Suisse and Lehman Brothers. Mr. Weatherley-White holds a bachelor of science with honors from Brown University, and held a Graduate Fellowship in economics and political science at the University of Cape Town. He is a Chartered Financial Analyst (“CFA”) holder.

Edward Hyams will be appointed as a non-executive board member of VivoPower prior to or upon listing of VivoPower’s shares on Nasdaq. Mr. Hyams has over forty years’ experience in Power Engineering, Renewables and in Energy Efficiency as an Executive, Private Equity Partner and as a Non-Executive Director. He was a Partner at Englefield Capital from 2004 to 2012 where he co-led the Renewable Energy Fund, investing in Solar, Wind and Biomass developments in Europe. He joined Englefield having led the management team which Englefield and another PE firm backed to invest in Zephyr, the first structured financing of a portfolio of renewables assets in the UK. Prior to Englefield, Mr. Hyams held senior executive roles as CEO of BizzEnergy from 2001to 2003, Managing Director of Eastern Group PLC from 1996 to 2001 and Director of Engineering at Southern Electric Plc from 1992 to 1996. Mr. Hyams was a non-executive Director of the UK Energy Saving Trust following the electricity and gas privatisations in the early 1990’s. He re-joined the Trust as Non-Executive Chairman in 2005 and was appointed as a NED at the UK Carbon Trust in the same year. Mr. Hyams is a Chartered Engineer, graduating with a degree in Electrical Engineering from Imperial College, London and holds a Diploma in Accounting and Finance from the Association of Certified Chartered Accountants. He has completed executive programs in finance at Harvard Business School and in strategy and organisation at Stanford. VivoPower believes Mr. Hyams is well-qualified to serve on the board due to his experience in senior executive roles in the renewable energy industry and experience as a non-executive director for a number of other companies.

Peter Sermol will be appointed as a non-executive board member of VivoPower prior to or upon listing of VivoPower’s shares on Nasdaq. Mr. Sermol has over thirty years experience in institutional finance. Mr. Sermol is the co-founder of North Star Solar Ltd, a company formed by him in September 2014 focused on installing UK rooftop solar PV and battery storage which developed a model to install renewable technologies without any need for government subsidies. Prior to this, Mr. Sermol ran the Toronto office of Amstel Securities, a Dutch regulated brokerage firm, from Aug 2004 to September 2012. During this period he also served as CEO of an online media distribution company. Previously, Mr. Sermol worked with specialist brokerage and advisory firms including Anca Capital Partners and Amstel as well as co-founding his own brokerage firm, Global Markets Ltd trading Asian Convertible Bonds and GDRs. Mr. Sermol studied marine electronics at the Merchant Naval College, Greenhithe. VivoPower believes Mr. Sermol is well-qualified to serve on the board due to his extensive experience in the solar sector and institutional finance.

Employees

VivoPower has 128 employees ³¹ located in 9 offices globally. Biographies of key employees that will be working in VivoPower following the consummation of the Transactions are included above.

Independence of Directors

As a result of its ordinary shares being listed on Nasdaq following consummation of the Transactions, VivoPower will adhere to the rules of Nasdaq in determining whether a director is independent. The board of directors of VivoPower has consulted, and will consult, with its counsel to ensure that the board’s determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of directors. The Nasdaq listing standards define an “independent director” as a person, other than an executive officer of a company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Consistent with these considerations, VivoPower anticipates that following the consummation of the Transactions, Messrs. Gary Hui, Peter Sermol and Edward Hyams will be the independent directors of VivoPower. VivoPower’s independent directors will have regularly scheduled meetings at which only independent directors are present.

³¹ Management estimate of pro forma employees had the business combination occurred on March 31, 2016

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Board Leadership Structure and Role in Risk Oversight

Upon consummation of the Transactions, Kevin Chin will be Chairman of the Board of VivoPower. In addition, Dr. Comberg will be Chief Executive Officer of VivoPower. VivoPower believes in the importance of independent oversight. VivoPower will look to ensure that this oversight is truly independent and effective through a variety of means, including:

●

Having a majority of the board be considered independent.

●

At each regularly scheduled Board meeting, all independent directors will typically be scheduled to meet in an executive session without the presence of any management directors.

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The charters for each of standing committees of the Board will require that, subject to Nasdaq’s “phase-in” rules, all of the members of those committees be independent.

We believe that separated roles of Chief Executive Officer and Chairman provides a strong balance between leadership and independent oversight.

Classification of Directors

Upon adoption of the amended and restated articles of association of VivoPower, which will occur prior to or at the time of the closing of the Transactions, the directors of VivoPower shall be divided into three classes, as nearly equal in number as possible and designated as Class A, Class B and Class C. The term of the initial Class A Directors, consisting of [ ] and Peter Sermol, shall terminate at the first annual general meeting of VivoPower held following adoption of the VivoPower amended and restated articles of association; the term of the initial Class B Directors, consisting of Gary Hui and Philip Comberg, shall terminate at the second annual general meeting of VivoPower held following adoption of the VivoPower amended and restated articles of association; and the term of the initial Class C Directors, consisting Kevin Chin and Edward Hyams, shall terminate at the third annual general meeting of VivoPower held following adoption of the VivoPower amended and restated articles of association. At each succeeding annual general meeting of VivoPower thereafter, successors to the class of directors whose term expires at that annual general meeting shall be elected for a three-year term.

Meetings and Committees of the Board of Directors

Upon consummation of the Transactions, VivoPower will establish a separately standing audit committee, nominating committee and compensation committee.

Audit Committee Information

Effective upon consummation of the Transactions, VivoPower will establish an audit committee comprised of Gary Hui, Edward Hyams and Kevin Chin. Each of the members of the audit committee, other than Mr. Chin, will be independent under the applicable Nasdaq listing standards. Pursuant to Nasdaq’s “phase-in” rules for newly listed companies, we have one year from the date on which we are first listed on Nasdaq to have our audit committee be comprised solely of independent members. We intend to identify one additional independent director to serve on the audit committee within one year of our listing on Nasdaq, at which time Mr. Chin will resign from the committee. The audit committee will have a written charter, a form of which will be available free of charge on VivoPower’s website at www.vivopower.com. The purpose of the audit committee, as specified in the Audit Committee Charter, include, but are not limited to:

●

reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our annual report;

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discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;

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discussing with management major risk assessment and risk management policies;

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monitoring the independence of the independent auditor;

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verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;

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reviewing and approving all related-party transactions;

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inquiring and discussing with management our compliance with applicable laws and regulations;

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pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;

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appointing or replacing the independent auditor;

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determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; and

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establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies.

Financial Experts on Audit Committee

Subject to Nasdaq’s “phase-in” rules for newly listed companies, the audit committee will be composed exclusively of “independent directors,” as defined for audit committee members under the Nasdaq listing standards and the rules and regulations of the SEC, who are “financially literate,” as defined under Nasdaq’s listing standards. Nasdaq’s listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement. In addition, VivoPower will be required to certify to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication. The Board of Directors has determined that Gary Hui and Kevin Chin will satisfy Nasdaq’s definition of financial sophistication and also qualify as an “audit committee financial expert” as defined under rules and regulations of the SEC.

Nominating Committee Information

Effective upon consummation of the Transactions, VivoPower will establish a nominating committee of the board of directors comprised of Gary Hui, Peter Sermol and Kevin Chin. Each of the members of the nominating committee, other than Mr. Chin, will be independent under the applicable Nasdaq listing standards. Pursuant to Nasdaq’s “phase-in” rules for newly listed companies, we have one year from the date on which we are first listed on Nasdaq to have our nominating committee be comprised solely of independent members. We intend to identify one additional independent director to serve on the nominating committee within one year of our listing on Nasdaq, at which time Mr. Chin will resign from the committee. The nominating committee will have a written charter, a form of which will be available free of charge at VivoPower’s website at www.vivopower.com. The nominating committee will be responsible for overseeing the selection of persons to be nominated to serve on VivoPower’s board of directors.

Guidelines for Selecting Director Nominees

The nominating committee will consider persons identified by its members, management, shareholders, investment bankers and others. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons to be nominated:

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should have demonstrated notable or significant achievements in business, education or public service;

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should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and

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should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.

The nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee will not distinguish among nominees recommended by shareholders and other persons.

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Compensation Committee Information

Upon consummation of the Transactions, the board of directors of VivoPower will establish a compensation committee consisting of Gary Hui, Edward Hyams and Kevin Chin. Each of the members of the compensation committee, other than Mr. Chin, will be independent under the applicable Nasdaq listing standards. Pursuant to Nasdaq’s “phase-in” rules for newly listed companies, we have one year from the date on which we are first listed on Nasdaq to have our compensation committee be comprised solely of independent members. We intend to identify one additional independent director to serve on the compensation committee within one year of our listing on Nasdaq, at which time Mr. Chin will resign from the committee. The compensation committee will have a written charter, a form of which will be available free of charge on VivoPower’s website at www.vivopower.com. The compensation committee’s duties, which are specified in our Compensation Committee Charter, include, but are not limited to:

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reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer’s based on such evaluation;

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reviewing and approving the compensation of all of our other executive officers;

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reviewing our executive compensation policies and plans;

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implementing and administering our incentive compensation equity-based remuneration plans;

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assisting management in complying with our proxy statement and annual report disclosure requirements;

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approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;

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if required, producing a report on executive compensation to be included in our annual proxy statement; and

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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

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EXECUTIVE COMPENSATION

ARWA Executive Officer and Director Compensation

ARWA is an “emerging growth company,” as defined in the Jumpstart our Business Startups Act of 2012, or JOBS Act, and the following is intended to comply with the scaled disclosure requirements applicable to emerging growth companies. No executive officer or director of ARWA has received any compensation for services rendered to ARWA other than the $10,000 per month administrative fee that ARWA pays AWN described above. Additionally, AWN will receive a fee upon consummation of the Transactions from VivoPower. At the closing of the Transactions, Vivo USA, an affiliate of VivoPower, and AWN shall enter into a Fee and Loan Agreement providing that, in consideration for the project management and ancillary operational support services that AWN has and will continue to provide to Vivo USA and its related entities in relation to and as preparation for the transactions and operational execution, Vivo USA will pay AWN a fee of $5,800,000. Since its formation, ARWA has not granted any stock options, stock appreciation rights, or any other equity-or equity-based awards under long-term incentive plans to any of its executive officers or directors.

ARWA’s executive officers are reimbursed for any out-of-pocket expenses incurred in connection with activities on ARWA’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no limit on the amount of these out-of-pocket expenses and there will be no review of the reasonableness of the expenses by anyone other than ARWA’s board of directors, which includes persons who may seek reimbursement, or a court of competent jurisdiction if such reimbursement is challenged. Because of the foregoing, ARWA generally does not have the benefit of independent directors examining the propriety of expenses incurred on its behalf and subject to reimbursement. As of July 31, 2016, an aggregate of approximately $13,906 has been reimbursed to them for such expenses.

VivoPower Executive Officer and Director Compensation

Incentive Plan

Subject to shareholder approval being received, VivoPower is intending to adopt a management incentive plan as outlined in the section entitled “ The Incentive Plan Proposal ”.

Executive Agreements

Philip Comberg entered into a service agreement with VivoPower, via its 100% owned subsidiary MidCo, on August 4, 2016, pursuant to which he will serve as the Group's Chief Executive Officer effective September 1, 2016. The agreement runs for an indefinite term and until notice of not less than 12 months is provided by Services or by Mr. Comberg. Pursuant to the agreement, Mr. Comberg is entitled to an initial annual base salary of £540,000 subject to review and upward adjustment annually; an additional 10% of his base salary in lieu of pension contributions; participation in an incentive plan (as discussed in more detail in the section entitled “ The Incentive Plan Proposal ”); company paid life insurance at four times his base salary; Mr. Comberg's election, participation in company sponsored benefits plans offered to other employees or an amount of £1,800 per month contribution to he and his family's private medical insurance; participation in any company permanent health insurance scheme; and relocations costs. Mr. Comberg will also participate in a special bonus scheme where he could earn up to an additional amount of 150% of his annual base salary for achieving specified performance objectives. In addition to observing English public holidays, Mr. Comberg is entitled to 30 days personal holidays each year. Mr. Comberg is restricted from pursuing interests in other competing businesses and is subject to customary terms regarding confidentiality, intellectual property, and non-competition and gardening leave protections afforded the company.

David Pilotte, the Chief Financial Officer, entered into an employment agreement with Vivo USA on February 3, 2016. Mr. Pilotte’s agreement provides for base compensation, currently at a rate of $360,000 per year, and eligibility to participate in a bonus pool based on the Vivo USA’s and Mr. Pilotte’s performance. The payment and timing of the bonus is at the sole discretion of Vivo USA. Mr. Pilotte’s target bonus under the plan is 50-100% of his base compensation.

Carl Weatherley-White, the Director of Finance, entered into an employment agreement with Vivo USA on July 13, 2016. Mr. Weatherley-White’s agreement provides for base compensation, currently at a rate of $348,000, and eligibility to participate in an annual bonus pool based on Vivo USA’s and Mr. Weatherley-White’s performance. The payment and timing of the bonus is at the sole discretion of Vivo USA. Mr. Weatherley-White’s target bonus under the bonus is up to 100% of his base compensation.

Mr. Pilotte’s and Mr. Weatherley-White’s agreements also provide for participation in Vivo USA’s standard benefits, reimbursement of reasonable work related expenses and at least twenty days of paid time off each year. Both employees are eligible to participate in Vivo USA’s carried interest participation plan. The terms and conditions are determined by Vivo USA and are subject to a number of customary conditions and restrictions, including vesting periods and employee tenure.

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Mr. Pilotte and Mr. Weatherley-White agreed to non-solicitation and non-competition provisions for a period of six months following each one’s last day with Vivo USA.

Potential Payments Upon Termination or Change in Control

Pursuant to the employment agreements, Mr. Pilotte and Mr. Weatherley-White are employed on an “at will” basis and may be terminated at any time, for any reason, with or without cause or notice. In the event that Mr. Pilotte is terminated without cause, he is entitled to receive severance in the form of six months’ continuation of his current base salary.

In the event that Mr. Weatherley-White is terminated without cause or resigns for good reason, he is entitled to receive severance in the form of twelve months’ continuation of his current base salary and an amount equal to the average of his last two years’ bonus. If Mr. Weatherley-White’s employment is terminated by reason of death or disability, in addition to any accrued and unpaid salary, he (or his estate) would also receive any pro-rata bonus.

If Mr. Weatherley-White’s employment, six months prior to, or within two years following, a change of control, is terminated involuntarily by Vivo USA other than for cause, death, disability, Mr. Weatherley-White shall be entitled to twelve months’ continuation of his current base salary and a bonus equal to the greater of (1) the average of his last two years’ bonus or (2) two-thirds of his base salary.

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BENEFICIAL OWNERSHIP OF SECURITIES

The following table sets forth information regarding the beneficial ownership of ARWA ordinary shares as of the record date and the beneficial ownership of VivoPower ordinary shares immediately following consummation of the Transactions by:

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each person known by ARWA to be the beneficial owner of more than 5% of ARWA’s outstanding ordinary shares on the record date;

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each of ARWA’s current executive officers and directors;

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each person who is currently or will become an executive officer or a director of VivoPower upon consummation of the Transactions; and

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all of VivoPower’s executive officers and directors as a group after the consummation of the Transactions.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security.

The beneficial ownership of ARWA’s ordinary shares pre-Transactions is based on 10,859,000 ordinary shares issued and outstanding as of the record date.

The expected beneficial ownership of VivoPower ordinary shares post-Transactions has been determined based on the following: (i) 5,718,879 issued and outstanding ordinary shares of VivoPower, as of the record date for the ARWA extraordinary general meetings, (ii) 12,177,350 shares to be issued to ARWA under the Contribution Agreement (including the shares to be issued in accordance with the warrant amendment), which assumes that no ARWA shareholders have exercised their conversion rights, (iii) 1,750,308 shares to be issued to VivoPower Australia shareholders as part of the contingent acquisitions, and (iv) the buyback of 2,732,400 ordinary shares from AWN pursuant to the Contribution Agreement.

Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all ordinary shares beneficially owned by them.

	Beneficial Ownership on Record Date						Beneficial Ownership Upon C onsummation of the Transactions
Name and Address of Beneficial Owner ⁽ ¹ ⁾	Amount and Nature of Beneficial Ownership			Approximate Percentage of Beneficial Ownership			Amount and Nature of Beneficial Ownership			Approximate Percentage of Beneficial Ownership
Kevin Chin		1,416,138	^{(2) (13)}		13.0	%		1,443,030	^{(2) (13)}		8.5	%
Gary Hui		315,981	⁽³⁾		2.9	%		325,046	⁽³⁾		1.9	%
John C. Moore		41,597	^{(4) (13)}		0.4	%		44,003	^{(4) (13)}		0.3	%
Dudley Hoskin ⁽ ⁵ ⁾		31,597			0.3	%		32,503			0.2	%
Kien Khan Kwan		31,597			0.3	%		32,503			0.2	%
The Panaga Group Trust ⁽ ⁶ ⁾		1,416,138			13.0	%		1,443,030			8.5	%
AQR Capital Management, LLC ⁽ ⁷ ⁾		875,000			8.1	%		875,000			5.2	%
Castle Creek Arbitrage, LLC ⁽ ⁸ ⁾		872,500			8.0	%		872,500			5.2	%
Weiss Asset Management LP ⁽ ⁹ ⁾		572,500			5.3	%		572,500			3.4	%
Polar Asset Management Partners Inc ⁽ ¹⁰ ⁾		1,467,712			13.5	%		1,467,712			8.7	%
Davidson Kempner Capital Management LP ⁽ ¹¹ ⁾		700,000			6.4	%		700,000			4.1	%
Dr. Philip Comberg ⁽ ¹² ⁾		0			0	%		0			0	%
Philip Broomhead ⁽ ¹² ⁾		0			0	%		0			0	%
Declan Kenny ⁽ ¹² ⁾		0			0	%		0			0	%
Edward Hyams ⁽ ¹² ⁾		0			0	%		0			0	%
Peter Sermol ⁽ ¹² ⁾		0			0	%		0			0	%
David Pilotte ⁽ ¹² ⁾		0			0	%		0			0	%
Carl Weatherley-White ⁽ ¹² ⁾		0			0	%		0			0	%
Arowana International Limited ⁽ ¹⁴ ⁾		556,010			5.1	%		5,089,410			30.1	%
All directors and executive officers as a group (Pre-Transactions) (8 persons)		1,836,910			16.9	%		1,877,086			11.1	%
All directors and executive officers as a group (Post-Transactions (7 persons)		1,732,119			16.0	%		1,768,076			10.5	%

_________________________

* Less than one percent.

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(1)

Unless otherwise indicated, the business address of each of the individuals is c/o Arowana Inc., at Level 11, 153 Walker Street, North Sydney, NSW 2060, Australia.

(2)

Represents shares held by The Panaga Group Trust, of which Mr. Chin is a beneficiary and one of the directors of the corporate trustee of such fund.

(3)

These shares are held by Beira Corp., an entity controlled by Mr. Hui.

(4)

These shares are held by the Ralsten Pty Ltd., an entity controlled by Mr. Moore.

(5)

The business address of Mr. Hoskin is Tudor Investment Corporation, 1275 King Street, Greenwich, CT 06831.

(6)

Kevin Chin is a beneficiary, and is the sole director, of The Panaga Group Trust. Accordingly, he may be deemed to have voting and dispositive power over the shares held by this entity.

(7)

The business address of AQR Capital Management, LLC is Two Greenwich Plaza, Greenwich, CT 06830.

(8)

The business address of Castle Creek Arbitrage, LLC is 227 West Monroe, Suite 3550, Chicago, IL 60606.

(9)

The business address of Weiss Asset Management LP is 222 Berkeley St., 16th Floor, Boston, Massachusetts 02116.

(10)

The business address of Polar Asset Management Inc is 401 Bay Street, Suite 1900, PO Box 19, Toronto, Ontario M5H 2Y4, Canada.

(11)

The business address of Davidson Kempner Capital Management LP is c/o Davidson Kempner Partners, 65 East 55th Street, 19th Floor, New York, New York 10022.

(12)

The business address for each of the individuals is c/o VivoPower International PLC, 23 Hanover Square, Mayfair, London W1S 1JB, UK.

(13)

Does not include shares held by Arowana International Limited, of which Mr. Chin and Mr. Moore are directors.

(14)

Includes shares held by Arowana International Limited and its controlled or managed entities. Arowana International Limited is controlled by its board of directors, which is comprised of Kevin Chin, John C. Moore, Anthony Kinnear and Robert McKelvey. The board of directors of Arowana International Limited as a group controls the voting power and dispositive power over the shares held by the entity and no one individual acting alone has such power.

ARWA’s initial shareholders, including its officers and directors, beneficially own 23.8% of its issued and outstanding ordinary shares as of the record date including 10,000 public units purchased by John C. Moore in ARWA’s initial public offering. All of the insider shares have been placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent, until (A) with respect to 50% of such shares, the earlier of (i) the date on which the closing price of the VivoPower ordinary shares exceeds $12.50 per share for any 20 trading days within a 30-trading day period following the consummation of the transactions and (ii) the day preceding the day that is twelve months after the consummation of the Transactions and (B) with respect to the remaining 50% of such shares, the day preceding the day that is twelve months after the consummation of the Transactions. Following the closing of the Transactions and distribution of the VivoPower shares by ARWA to its shareholders, the VivoPower shares the ARWA initial shareholders receive will continue to be subject to the same escrow provisions.

During the escrow period, the holders of these shares will not be able to sell or transfer their securities except to certain permitted transferees, in each case where the transferee agrees to the terms of the escrow agreement, but will retain all other rights as ARWA’s shareholders, including, without limitation, the right to vote their ordinary shares and the right to receive cash dividends, if declared. If dividends are declared and payable in ordinary shares, such dividends will also be placed in escrow. If ARWA is unable to effect a business combination and liquidate the trust account, none of its initial shareholders will receive any portion of the liquidation proceeds with respect to their insider shares.

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In a private placement conducted simultaneously with the consummation of ARWA’s initial public offering, the initial shareholders and their designees purchased 509,000 private units. The purchasers have agreed that these units will not be sold or transferred (except to certain permitted transferees) until after ARWA has completed a business combination.

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

ARWA Related Person Policy

ARWA’s Code of Ethics requires ARWA to avoid, wherever possible, all Related Person transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the board of directors (or the audit committee). ARWA defines Related Person transactions as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) ARWA or any of its subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of ARWA’s ordinary shares, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.

ARWA’s audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent ARWA enters into such transactions. The audit committee will consider all relevant factors when determining whether to approve a Related Person transaction, including whether the Related Person transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the Related Person’s interest in the transaction. No director may participate in the approval of any transaction in which he is a Related Person, but that director is required to provide the audit committee with all material information concerning the transaction. Additionally, ARWA requires each of its directors and executive officers to complete an annual directors’ and officers’ questionnaire that elicits information about Related Person transactions.

These procedures are intended to determine whether any such Related Person transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

ARWA Related Person Transactions

Insider Shares

In October 2014, ARWA issued 1,725,000 insider shares to the initial shareholders for an aggregate purchase price of $25,000. On February 22, 2015, ARWA issued an aggregate of 345,000 ordinary shares to the initial shareholders by way of capitalization under Cayman Islands law, resulting in the initial shareholders owning an aggregate of 2,070,000 ordinary shares. This number included an aggregate of up to 270,000 shares that were subject to compulsory repurchase by ARWA; however, due to the full exercise of the over-allotment by the underwriters, no shares were repurchased. All of these shares were placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent, as described above.

ARWA’s shareholders include the Arowana Australasian Special Situations Fund (“AASSF 1”), which holds approximately 5% of the ordinary shares of the company. AASSF 1 is a wholly owned subsidiary of AWN (who holds an 88.9% beneficial interest in AASSF).

Advances from Related Person

During the year ended February 29, 2016, AWN advanced funds totaling $139,190 to ARWA to pay administrative expenses and offering costs incurred. These advances were due on demand and were non-interest bearing. As of February 29, 2016, the advances were repaid by ARWA.

As of July 31, 2016, ARWA had a current payable to AWN of $70,698 in respect of accrued but unpaid management fees under a contract to which they are both parties.

ARWA has a loan payable to APG, an entity associated with Kevin Chin of $130,000

Note to Related Person

ARWA issued a $171,306 principal amount unsecured promissory note to AWN. The note was non-interest bearing and repaid by the Company during June 2015.

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Registration Rights

The holders of the insider shares, as well as the holders of the private units (and all underlying securities) and any securities our initial shareholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us, are entitled to registration rights pursuant to a registration rights agreement. The holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares are to be released from escrow. The holders of a majority of the private units or securities issued in payment of working capital loans made to us can elect to exercise these registration rights at any time after we consummate a business combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation of a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

Office Space

Commencing on May 6, 2015, ARWA has paid AWN a monthly fee of $10,000 for general and administrative services. This arrangement will terminate upon completion of the Transactions or ARWA’s liquidation. During the year ended February 29, 2016, ARWA incurred AWN management fees of $98,387, which is included in operating costs in the condensed statement of operations.

VivoPower Related Person Policy and Related Person Transactions

Advances from Related Persons

Arowana Energy Holdings Limited, a subsidiary of AWN is indebted to Aevitas for approximately A$587,967.21 for deferred consideration under a transaction relating to the sale of VivoPower Australia ordinary shares. This will be repaid at or prior to closing the Transactions via the Letter Amendment to the Arowana Energy Holdings and Aevitas share sale agreement.

Aevitas is indebted to the following entities which are subsidiaries of AWN via their holdings in Aevitas notes:

●

Arowana Australasian Special Situations 1A pty Ltd <Arowana Australasian Special Situations Trust 1A A/C>: 666,666 Aevitas notes held.

●

Arowana Australasian Special Situations 1B pty Ltd <Arowana Australasian Special Situations Trust 1B A/C>: 666,666 Aevitas notes held.

●

Arowana Australasian Special Situations 1C pty Ltd <Arowana Australasian Special Situations Trust 1C A/C>: 666,667 Aevitas notes held.

Aevitas is indebted to the following entities via their holdings in Aevitas convertible notes:

●

The Panaga Group Trust, of which Mr. Kevin Chin is a beneficiary and one of the directors of the corporate trustee of such trust, holds 4,500 Aevitas notes.

●

Sd & K Investments Pty Ltd atf <Hoskins Family A/C> an entity controlled by Mr Dudley Hoskin holds 43,249 convertible notes.

Aevitas is indebted to APG, an affiliate of Mr. Chin’s for approximately A$692,581. This will be repaid at or prior to closing via the APG Aevitas Repayment Notice

VivoPower has an intercompany loan agreement with AWN dated March 15, 2016 on normal commercial terms with interest charged at 6% per annum and principal and interest payable one year after the initial drawdown date. At July 31, 2016 there were no advances made under this loan.

VivoPower USA LLC is indebted to AWN via an intercompany loan agreement with AWN dated March 23, 2016 on normal commercial terms with interest charged at 6% per annum and principal and interest payable one year after the initial drawdown date. At July 31, 2016 the principal balance due to AWN by VivoPower USA LLC under this loan was $15,917,023.

VivoPower International Services is indebted to AWN via an intercompany loan on normal commercial terms with interest charged at 6% per annum and principal and interest payable one year after the initial drawdown date. At July 31, 2016 the principal balance due to AWN by VivoPower International Services under this loan was $562,414.

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VivoPower Related Person Policy

Upon consummation of the Transactions, VivoPower will adopt a Related Person Policy similar to the one adopted by ARWA.

VivoPower’s audit committee, pursuant to its written charter, will be responsible for reviewing and approving Related Person transactions to the extent it enters into such transactions. The audit committee will consider all relevant factors when determining whether to approve a Related Person transaction, including whether the Related Person transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the Related Person’s interest in the transaction. VivoPower will require each of its directors and executive officers to complete an annual directors’ and officers’ questionnaire that elicits information about Related Person transactions.

VivoPower will also need to comply with English law provisions in relation to directors’ conflicts contained in the Companies Act and specific provisions contained in the Company’s articles of association. The Companies Act permits directors of UK public limited companies to have conflicts of interests so long as their articles of association enable directors to authorize a matter and the directors do authorize any such conflict. Please see the sections entitled “ Description of VivoPower Securities – Key Provisions of our Articles of Association – Directors – Directors’ Interests and Restrictions ” for a description of the provisions of VivoPower’s articles of association with regards to conflicts of interest.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires ARWA directors, officers and persons owning more than 10% of ARWA’s ordinary shares to file reports of ownership and changes of ownership with the SEC. Based on its review of the copies of such reports furnished to ARWA, or representations from certain reporting persons that no other reports were required, ARWA believes that all applicable filing requirements were complied with during the fiscal year ended February 29, 2016, were timely filed.

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DESCRIPTION OF VIVOPOWER SECURITIES

The following description of the material terms of the share capital of VivoPower following the Transactions includes a summary of specified provisions of the amended and restated memorandum and articles of association of VivoPower that will be in effect upon completion of the Transactions. This description is qualified by reference to VivoPower’s amended and restated memorandum and articles of association as will be in effect upon consummation of the Transactions, copies of which are attached to this proxy statement/prospectus and are incorporated in this proxy statement/prospectus by reference.

General

We are incorporated as a public company with limited liability and our affairs are governed by our articles of association and the laws of England.

The following description summarizes the most important terms of our share capital, as they are expected to be in effect upon the closing of this offering. We will adopt an amended and restated articles of association in connection with this offering, and this description summarizes the provisions that are included therein. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description of the matters set forth in this “ Description of VivoPower Securities ” section, you should refer to our amended and restated articles of association, which is included as an exhibit to the registration statement of which this prospectus forms a part, and to the applicable provisions of the Companies Act 2006 (the “Companies Act”).

Our ordinary shares will have the rights and restrictions described in the subsection entitled “ –Key Provisions in our Articles of Association .”

We are not permitted under English law to hold our own shares unless they are repurchased by us and held in treasury.

Shareholder Authorities

Certain resolutions are required to be passed by our shareholders prior to the completion of this offering. These include resolutions for:

(1)

The adoption of amended and restated articles of association that will become effective immediately prior to completion of the Transactions contemplated by the Contribution Agreement. See the subsection entitled “– Key Provisions in our Articles of Association .”

(2)

The authorization of our directors for purposes of s551 Companies Act to issue shares in us and grant rights to subscribe for or convert any securities into shares in us up to a maximum aggregate nominal amount of $135,000 for a period of five years.

(3)

A further authorization of our directors for purposes of s551 Companies Act to issue shares in us and grant rights to subscribe for or convert any securities into shares in us up to a maximum aggregate nominal amount of $100,000,000 for a period of five years.

(4)

The empowering of our directors pursuant to s570 Companies Act to issue equity securities for cash pursuant to the s551 authority referred to in number 3 above as if the statutory pre-emption rights under s561(1) Companies Act did not apply to such allotments.

(5)

The approval for the purposes of s694 Companies Act for us to repurchase 2,732,400 ordinary shares in the Company.

Key Provisions in our Articles of Association

The following is a summary of certain key provisions of our articles of association to become effective immediately prior to the completion of this offering.

Objects and Purposes

The Companies Act abolished the need for an objects clause and, as such, our objects are unrestricted.

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Shares and Rights Attaching to Them

General

Other than the voting rights described herein, all ordinary shares have the same rights and rank pari passu in all respects. Subject to the provisions of the Companies Act and any other relevant legislation, our shares may be issued with such preferred, deferred or other rights, or such restrictions, whether in relation to dividends, returns of capital, voting or otherwise, as may be determined by ordinary resolution (or, failing any such determination, as the directors may determine). We may also issue shares which are, or are liable to be, redeemed at the option of us or the holder.

Voting Rights

The holders of ordinary shares are entitled to vote at general meetings of shareholders. Each ordinary shareholder is entitled, on a show of hands, to one vote; and on a poll, to one vote for each ordinary share held. For as long as any ordinary shares are held in a settlement system by the Depository Trust Company, all votes shall take place on a poll.

In the case of joint holders of a share, the vote of the joint holder whose name appears first on the register of members in respect of the joint holding shall be accepted to the exclusion of the votes of the other joint holders.

A shareholder is entitled to appoint another person as his proxy (or in the case of a corporation, a corporative representative) to exercise all or any of his rights to attend and to speak and vote at a general meeting.

Capital Calls

Under our articles of association, the liability of our shareholders is limited to the amount, if any, unpaid on the shares held by them.

The directors may from time to time make calls on shareholders in respect of any monies unpaid on their shares, whether in respect of nominal value of the shares or by way of premium. Shareholders are required to pay called amounts on shares subject to receiving at least 14 clear days' notice specifying the time and place for payment. “Clear days” notice means calendar days and excludes the date of mailing, the date of receipt or deemed receipt of the notice and the date of the meeting itself. If a shareholder fails to pay any part of a call, the directors may serve further notice naming another day not being less than 14 clear days from the date of the further notice requiring payment and stating that in the event of non-payment the shares in respect of which the call was made will be liable to be forfeited. Subsequent forfeiture requires a resolution by the directors.

Restrictions on Voting Where Sums Overdue on Shares

None of our shareholders (whether in person by proxy or, in the case of a corporate member, by a duly authorized representative) shall (unless the directors otherwise determine) be entitled to vote at any general meeting or at any separate class meeting in respect of any share held by him unless all calls or other sums payable by him in respect of that share have been paid.

Dividends

The directors may pay interim and final dividends in accordance with the respective rights and restrictions attached to any share or class of share, if it appears to them that they are justified by the profits available for distribution.

Unless otherwise provided by the rights attaching to shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is paid, and apportioned and paid proportionally to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid.

Any dividend which has remained unclaimed for 12 years from the date when it became due for payment shall, if the directors resolve, be forfeited and cease to remain owing by us. In addition, we will not be considered a trustee with respect to, or liable to pay interest on, the amount of any payment into a separate account by the directors or any unclaimed dividend or other sum payable on or in respect of a share.

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We may cease to send any payment in respect of any dividend payable in respect of a share if:

●

in respect of at least two consecutive dividends payable on that share the check or warrant has been returned undelivered or remains uncashed (or another method of payment has failed);

●

in respect of one dividend payable on that share the check or warrant has been returned undelivered or remains uncashed, or another method of payment has failed, and reasonable inquiries have failed to establish any new address or account of the recipient; or

●

a recipient does not specify an address, or does not specify an account of a type prescribed by the directors, or other details necessary in order to make a payment of a dividend by the means by which the directors have decided that a payment is to be made, or by which the recipient has elected to receive payment, and such address or details are necessary in order for us to make the relevant payment in accordance with such decision or election,

but, subject to the articles of association, we may recommence sending checks or warrants or using another method of payment for dividends payable on that share if the person(s) entitled so request and have supplied in writing a new address or account to be used for that purpose.

The directors may, with the authority of an ordinary resolution of the Company, offer to shareholders the right to elect to receive, in lieu of a dividend, an allotment of new shares credited as fully paid. The directors may also direct payment of a dividend wholly or partly by the distribution of specific assets.

Distribution of Assets on Winding-up

If the Company is wound up, the liquidator may, with the sanction of a special resolution and any other sanction required by law, divide among the members in specie the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members. The liquidator may, with the like sanction, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the members as he may with the like sanction determine, but no member shall be compelled to accept any assets upon which there is a liability.

Variation of Rights

The rights attached to any class may be varied, either while we are a going concern or during or in contemplation of a winding up (a) in such manner (if any) as may be provided by those rights; or (b) in the absence of any such provision, with the consent in writing of the holders of three-quarters in nominal value of the issued shares of that class (excluding any shares of that class held as treasury shares), or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class, but not otherwise.

Transfer of Shares

All of our shares in certificated form may be transferred by an instrument of transfer in any usual or common form or any form acceptable to the directors and permitted by the Companies Act and any other relevant legislation.

The directors may, in their absolute discretion, refuse to register the transfer of a share in certificated form which is not fully paid. They may also refuse to register a transfer of a share in certificated form (whether fully paid or not) unless the instrument of transfer: (a) is lodged, duly stamped, at our registered office or at such other place as the directors may appoint and (except in the case of a transfer by a financial institution where a certificate has not been issued in respect of the share) is accompanied by the certificate for the share to which it relates and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer; (b) is in respect of only one class of share; and (c) is in favor of not more than four transferees.

Alteration of Capital

We may, by ordinary resolution, consolidate and divide all or any of our share capital into shares of larger amount than our existing shares; and sub-divide our shares, or any of them, into shares of a smaller amount than our existing shares; and determine that, as between the shares resulting from the sub-division, any of them may have any preference or advantage as compared with the others.

Pre-emption Rights

There are no rights of pre-emption under our articles of association in respect of transfers of issued ordinary shares. In certain circumstances, our shareholders may have statutory pre-emption rights under the Companies Act in respect of the allotment of new shares in our company. These statutory pre-emption rights, when applicable, would require us to offer new shares for allotment to existing shareholders on a pro rata basis before allotting them to other persons. In such circumstances, the procedure for the exercise of such statutory pre-emption rights would be set out in the documentation by which such ordinary shares would be offered to our shareholders. These statutory pre-emption rights may be disapplied by a special resolution passed by shareholders in a general meeting or a specific provision in our articles of association.

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Directors

Number

Subject to the provisions of the Companies Act, a majority of the directors may from time to time fix the maximum number of directors and unless so fixed the number of directors (other than alternate directors) shall not be subject to any maximum. The minimum number shall not be less than two.

Classification

Appointment of Directors

The directors may appoint a person who is willing to act as a director, and is permitted by law to do so, to be a director, either to fill a vacancy or as an additional director.

Termination of a Director’s Appointment

A director may be removed with the approval of all of the other directors and a person would cease to be a director as the result of certain other circumstances as set out in our articles of association, including resignation, by law and continuous non-attendance at board meetings. Directors are not subject to retirement at a specified age limit under our articles of association.

Borrowing Powers

Under our directors’ general power to manage our business, our directors may exercise all our powers to borrow money and to mortgage or charge our undertaking, property and uncalled capital or parts thereof and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of ours or of any third party.

Quorum

The quorum necessary for the transaction of business of the directors may be fixed from time to time by the directors and unless so fixed shall be two. Provided that a director declares his interest (as outlined in the subsection entitled “– Directors’ Interests and Restrictions ” below) a director may vote as a director in regard to any transaction in which he is interested or upon any matter arising therefrom and if he shall so vote his vote shall be counted and he shall be counted in the quorum present at the meeting (aside from in relation to counting towards quorum in relation to the authorization of a director's conflict).

Directors’ Interests and Restrictions

Subject to the provisions of the Companies Act, and provided that he has disclosed in accordance with English law the nature and extent of any material interests of his, a director notwithstanding his office:

(1)

may be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested; and

(2)

may be a director or other officer of, or be employed by, or hold any position with, or be a party to any transaction or arrangement with, or otherwise interested in, any body corporate in which the Company is interested; and

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(3)

notwithstanding the fact that a proposed decision of the directors concerns or relates to any matter in which a director has, or may have, directly or indirectly, any kind of interest whatsoever, that director may participate in the decision-making process for both quorum and voting purposes although any director facing such a conflict is not to be counted as participating in the decision to authorise the conflict for quorum or voting purposes.

A director shall not, by reason of his office, be accountable to the Company for any benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit.

Remuneration

Until otherwise determined by ordinary resolution, the directors may determine the amount of fees to be paid to the directors for their services provided that any fees paid to the directors shall not exceed the amounts set out in the then applicable directors' remuneration policy approved by members for the purposes of section 439A of the Companies Act 2006.

Any director who holds any other office with us, or who serves on any committee of the directors, or who performs, or undertakes to perform, services which the directors consider go beyond the ordinary duties of a director may be paid such additional remuneration as the directors may determine.

The directors may also be paid all reasonable expenses properly incurred by them in connection with the exercise of their powers and the discharge of their responsibilities as directors.

Share Qualification of Directors

Our articles of association do not require a director to hold any shares in us by way of qualification. A director who is not a member shall nevertheless be entitled to attend and speak at general meetings.

Indemnity of Officers

Subject to the provisions of any relevant legislation, each of our directors and other officers (excluding an auditor) may be entitled to be indemnified by us against all liabilities incurred by him in the execution and discharge of his duties or in relation to those duties. The Companies Act renders void an indemnity for a director against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director.

Shareholders Meetings

Calling of General Meetings

A general meeting may be called by a majority of the directors, the chairman of the board of directors or the chief executive officer. The directors are also required to call a general meeting once we have received requests to hold a general meeting from shareholders representing at least 50% of the paid up capital of the company entitled to vote at a general meeting.

Quorum of Meetings

No business shall be transacted at any meeting unless a quorum is present. Two persons entitled to vote upon the business to be transacted, each being a member or a proxy for a member or a duly authorized representative of a corporation which is a member (including for this purpose two persons who are proxies or corporate representatives of the same member), shall be a quorum.

Attendance

The directors may make arrangements for simultaneous attendance and participation by electronic means allowing persons not present together at the same place to attend, speak and vote at general meetings.

Limitation on Owning Securities

Our articles of association do not restrict in any way the ownership or voting of our shares by non-residents.

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Disclosure of Interests in Shares

If we serve a demand on a person under section 793 of the Companies Act (which requires a person to disclose an interest in shares), that person will be required to disclose any interest he has in our shares. Failure to disclose any interest can result in the following sanctions: suspension of the right to attend or vote (whether in person or by representative or proxy) at any general meeting or at any separate meeting of the holders of any class or on any poll; and where the interest in shares represent at least 0.25% of their class (excluding treasury shares) also the withholding of any dividend payable in respect of those shares and the restriction of the transfer of any shares (subject to certain exceptions).

Differences in Corporate Law

The applicable provisions of the Companies Act differ from laws applicable to Cayman Islands companies and their shareholders. Set forth below is a summary of certain differences between the provisions of the Companies Act applicable to VivoPower and the Companies Law applicable to ARWA shareholders relating to shareholders’ rights and protections. This summary is not intended to be a complete discussion of the respective rights and it is qualified in its entirety by reference to Cayman Islands law and English law.

*Issue*	*England*	*Cayman Islands*

Number of Directors	Under the Companies Act, a public limited company must have at least two directors and the number of directors may be fixed by or in the manner provided in a company’s articles of association.	Under the Companies Law, a Cayman Islands company must have at least one director and the number of directors may be fixed by or in the manner provided in a company's articles of association.

Removal of Directors	Under the Companies Act, shareholders may remove a director without cause by an ordinary resolution (which is passed by a simple majority of those voting in person or by proxy at a general meeting) irrespective of any provisions of any service contract the director has with the company, provided that 28 clear days’ notice of the resolution is given to the company and certain other procedural requirements under the Companies Act are followed (such as allowing the director to make representations against his or her removal at the meeting and/or in writing).	The procedure for removing directors is set out in the company's articles of association and is not prescribed by the Companies Law.

Vacancies on the Board of Directors	Under English law, the procedure by which directors (other than a company’s initial directors) are appointed is generally set out in a company’s articles of association, provided that where two or more persons are appointed as directors of a public limited company by resolution of the shareholders, resolutions appointing each director must be voted on individually unless a resolution of the shareholders that such resolutions do not have to be voted on individually is first agreed to by the meeting without any vote being given against it.	Vacancies on the board of directors of a Cayman Islands company may be filled in whatever way is set out in the company's articles of association and the Companies Law is not prescriptive in that regard.

Annual General Meeting	Under the Companies Act, a public limited company must hold an annual general meeting each year. This meeting must be held within six months of the company’s accounting reference date.	Cayman Islands law provides that an exempted company is not required to hold an annual general meeting. However, the company's articles of association may provide otherwise and commonly do so in the context of public companies.

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General Meeting	Under the Companies Act, a general meeting of the shareholders of a public limited company may be called by the directors. Shareholders holding at least 5% of the paid-up capital of the company carrying voting rights at general meetings can also require the directors to call a general meeting.		The procedure for calling a general meeting of shareholders of a Cayman Islands company is set out in the articles of association of the company and the Companies Law is not prescriptive in that regard.

Notice of General Meetings	The Companies Act provides that a general meeting (other than an adjourned meeting) must be called by notice of:		Notices of a general meeting of shareholders of a Cayman Islands company must be sent in accordance with the articles of association of the company and the Companies Law is not prescriptive in that regard.
	●	in the case of an annual general meeting, at least 21 clear days; and

	●	in any other case, at least 14 days.

	The company’s articles of association may provide for a longer period of notice and, in addition, certain matters (such as the removal of directors or auditors) require special notice, which is 28 clear days’ notice. The shareholders of a company may in all cases consent to a shorter notice period, the proportion of shareholders’ consent required being 100% of those entitled to attend and vote in the case of an annual general meeting and, in the case of any other general meeting, a majority in number of the members having a right to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving a right to attend and vote at the meeting.

Quorum	Subject to the provisions of a company’s articles of association, the Companies Act provides that two shareholders present at a meeting (in person or by proxy) shall constitute a quorum.		The quorum for shareholder meetings is as set out in the company's articles of association.

Proxy	Under the Companies Act, at any meeting of shareholders, a shareholder may designate another person to attend, speak and vote at the meeting on their behalf by proxy (or, in the case of a shareholder which is a corporate body, by way of a corporate representative).		The ability for shareholders to appoint a proxy for general meetings, and the procedure for doing so, is as set out in the company's articles of association.

Issue of New Shares	Under the Companies Act, the directors of a company must not exercise any power to allot shares or grant rights to subscribe for, or to convert any security into, shares unless they are authorized to do so by the company’s articles of association or by an ordinary resolution of the shareholders. Any authorization given must state the maximum amount of shares that may be allotted under it and specify the date on which it will expire, which must be not more than five years from the date the authorization was given. The authority can be renewed by a further resolution of the shareholders.		The ability for a Cayman Islands company to issue shares, and the procedure for doing so, is as set out in the company's articles of association.

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Pre-emptive Rights	Under the Companies Act, the issuance for cash of:		The Companies Law does not provide for pre-emptive rights, though such rights may be embodied in the company's articles of association.
	●	equity securities, being shares in the company other than shares that, with respect to dividends and capital, carry a right to participate only up to a specified amount in a distribution (“ordinary shares”); or

	●	rights to subscribe for, or to convert securities into, ordinary shares,

	must be offered first to the existing equity shareholders in the company in proportion to the respective nominal value of their holdings, unless an exception applies or a special resolution to the contrary has been passed by shareholders in a general meeting or a specific provision is contained in the articles of association, in each case in accordance with the provisions of the Companies Act.

Liability of Directors and Officers	Under the Companies Act, any provision (whether contained in a company’s articles of association or any contract or otherwise) that purports to exempt a director of a company (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void. Any provision by which a company directly or indirectly provides an indemnity (to any extent) for a director of the company or of an associated company against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he or she is a director is also void except as permitted by the Companies Act, which provides exceptions for the company to: (i) purchase and maintain insurance against such liability; (ii) provide a “qualifying third party indemnity” (being an indemnity against liability incurred by the director to a person other than the company or an associated company. Such indemnity must not cover criminal fines, penalties imposed by regulatory bodies, the defense costs of criminal proceedings where the director is found guilty, the defense costs of civil proceedings successfully brought against the director by the company or an associated company, and the costs of unsuccessful applications by the director for relief); and (iii) provide a “qualifying pension scheme indemnity” (being an indemnity against liability incurred in connection with the company’s activities as trustee of an occupational pension plan).		There are no restrictions under the Companies Law on the amount to which a director or officer of a Cayman Islands company may be indemnified out of the assets of the company save in the event of the fraud or wilful default of that director or officer. It is also typical for the articles of association of a company to contain broad indemnification wording for the directors and officers of the company. Subject to contrary provisions set out in the articles of association, there are no restrictions on the ability of a Cayman Islands company to obtain insurance for its directors and officers.

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Voting Rights	Under English law, unless a poll is demanded by the shareholders of a company or is required by the Chairman of the meeting or the company’s articles of association, shareholders shall vote on all resolutions on a show of hands. Under the Companies Act, a poll may be demanded by: (i) not fewer than five shareholders having the right to vote on the resolution; (ii) any shareholder(s) representing at least 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding any voting rights attached to treasury shares); or (iii) any shareholder(s) holding shares in the company conferring a right to vote on the resolution being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all the shares conferring that right. A company’s articles of association may provide more extensive rights for shareholders to call a poll. Under English law, an ordinary resolution is passed on a show of hands if it is approved by a simple majority (more than 50%) of the votes cast by shareholders present (in person or by proxy) and entitled to vote. If a poll is demanded, an ordinary resolution is passed if it is approved by holders representing a simple majority of the total voting rights of shareholders present (in person or by proxy) who (being entitled to vote) vote on the resolution. Special resolutions require the affirmative vote of not less than 75% of the votes cast by shareholders present (in person or by proxy) at the meeting.		The voting rights attaching to classes of shares of a Cayman Islands company are as set out in that company's articles of association. Whether voting is carried out on a show of hands, or on a poll, will be determined by and set out in the company's articles of association. Under Cayman Islands law, general shareholder matters are approved by “ordinary resolution”, meaning at least a majority of the votes cast by shareholders at a quorate meeting. Certain matters specified in the Companies Law require a “special resolution,” (such as amending the articles of association, changing the name of the company, entering voluntary winding up, continuing to another jurisdiction) which requires the affirmative vote of at least two thirds of votes cast at a quorate meeting. The articles of association may prescribe a higher threshold for ordinary and special resolutions.

Variation of class rights	The Companies Act provides that rights attached to a class of shares may only be varied or abrogated in accordance with provision in the company’s articles for the variation or abrogation of those rights or, where the company’s articles contain no such provision, if the holders of shares of that class consent to the variation or abrogation. Consent for these purposes means:		The rights attaching to a class of shares may only be varied in accordance with the provisions set out in the articles of association of that company.

	●	consent in writing from the holders of at least 75% in nominal value of the issued shares of that class (excluding any shares held as treasury shares); or

	●	a special resolution passed at a separate meeting of the holders of that class sanctioning the variation.

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The Companies Act provides that the quorum for a class meeting is not less than two persons holding or representing by proxy at least one-third of the nominal amount paid up on the issued shares of that class.

Following a variation of class rights, shareholders who amount to not less than 15% of the shareholders of the class in question who did not approve the variation may apply to court to have the variation cancelled. Any application must be made within 21 days of the variation. The court may cancel the variation if it is satisfied having regard to all the circumstances of the case that the variation would unfairly prejudice the shareholders of the class represented by the applicant.

Shareholder Vote on Certain Transactions

The Companies Act provides for schemes of arrangement, which are arrangements or compromises between a company and any class of shareholders or creditors and used in certain types of reconstructions, amalgamations, capital reorganizations or takeovers. These arrangements require:

● the approval at a shareholders’ or creditors’ meeting convened by order of the court, of a majority in number of shareholders or creditors representing 75% in value of the capital held by, or debt owed to, the class of shareholders or creditors, or class thereof present and voting, either in person or by proxy; and

● the approval of the court.

Once approved, sanctioned and effective, all shareholders and creditors of the relevant class and the company are bound by the terms of the scheme.

The Companies Act also contains certain provisions relating to transactions between a director and the company, including transactions involving the acquisition of substantial non-cash assets from a director or the sale of substantial non-cash assets to a director, and loans between a company and a director or certain connected persons of directors. If such transactions meet certain thresholds set out within the Companies Act the approval of shareholders by ordinary resolution will be required.

The articles of association may reserve certain matters for the shareholders. By way of example, the Articles may provide that the directors of the company shall not enter into certain transactions without prior shareholder approval.

The Companies Law provides for schemes of arrangement which are court supervised arrangements between a company and its members or creditors (or classes thereof). The scheme process would involve convening a meeting of the members (or classes thereof) whose rights are to be subject to the scheme. Those meetings are convened by the Cayman Islands court. For the scheme to proceed to be approved by the court, the majorities which must be achieved at the meeting of the members in attendance and voting at the meeting (in person or by proxy) are:

(a) 50% + 1 in number; and

(b) 75% in value.

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Standard of

Conduct for

Directors

Under English law, a director owes various statutory and fiduciary duties to the company, including:

● to act in the way he or she considers, in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole;

● to avoid a situation in which he or she has, or can have, a direct or indirect interest that conflicts, or possibly conflicts, with the interests of the company;

● to act in accordance with the company’s constitution and only exercise his or her powers for the purposes for which they are conferred;

● to exercise independent judgment;

● to exercise reasonable care, skill and diligence;

● not to accept benefits from a third party conferred by reason of his or her being a director or doing (or not doing) anything as a director; and

● a duty to declare any interest that he or she has, whether directly or indirectly, in a proposed or existing transaction or arrangement with the company.

Fiduciary duties:

A director is in a fiduciary relationship with the Cayman company. Fiduciary duties may be described as those of loyalty, honesty and good faith owed to the company. Every director owes these duties individually and they are owed to the company as a whole. They are specifically not owed to other companies with which the company is associated. In practical terms, these duties translate into the following:

● Bona Fides: The directors must act bona fides in what they consider to be in the best interests of the company as a whole. This is a subjective test and a court could only interfere if it determines that no reasonable director could have concluded that a particular course of action was in the best interests of the company.

● Proper Purpose: The directors must exercise the powers that are vested in them for the purpose for which they were conferred and not for a collateral purpose.

● Unfettered Discretion: directors should not improperly fetter the exercise of their future discretion.

● Conflict of Duty and Interest: directors must not place themselves in a position in which there is a conflict between their duty to the company and their personal interests. This obligation is often varied by the articles which can provide that a director can vote on a matter in which he has an interest provided that he has disclosed his interest to the Board at the earliest opportunity.

Duties of Care, Diligence and Skill:

● Each director owes a duty of care, diligence and skill to the company.

● The duties of care, diligence and skill have traditionally been regarded as subjective, though more recently it appears that the duties of care and skill of a director are also to be determined by reference to the care, diligence and skill that would be displayed by a reasonable director in the circumstances.

158

Shareholder Suits

Under English law, generally, the company, rather than its shareholders, is the proper claimant in an action in respect of a wrong done to the company or where there is an irregularity in the company’s internal management. Notwithstanding this general position, the Companies Act provides that (i) a court may allow a shareholder to bring a derivative claim (that is, an action in respect of and on behalf of the company) in respect of a cause of action arising from a director’s negligence, default, breach of duty or breach of trust, subject to complying with the procedural requirements under the Companies Act and (ii) a shareholder may bring a claim for a court order where the company’s affairs have been or are being conducted in a manner that is unfairly prejudicial to some or all of its shareholders.

Our Cayman Islands counsel is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:

● a company is acting, or proposing to act, illegally or beyond the scope of its authority;

● the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or

● those who control the company are perpetrating a “fraud on the minority.”

A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.

Other UK Law Considerations

Squeeze-out

Under the Companies Act, if a takeover offer (as defined in section 974 of the Companies Act) is made for the shares of a company and the offeror were to acquire, or unconditionally contract to acquire:

(1)

not less than 90% in value of the shares to which the takeover offer relates (the “Takeover Offer Shares”); and

(2)

where those shares are voting shares, not less than 90% of the voting rights attached to the Takeover Offer Shares,

the offeror could acquire compulsorily the remaining 10% within three months of the last day on which its offer can be accepted. It would do so by sending a notice to outstanding shareholders telling them that it will acquire compulsorily their Takeover Offer Shares and then, six weeks later, it would execute a transfer of the outstanding Takeover Offer Shares in its favor and pay the consideration to the company, which would hold the consideration on trust for outstanding shareholders. The consideration offered to the shareholders whose Takeover Offer Shares are acquired compulsorily under the Companies Act must, in general, be the same as the consideration that was available under the takeover offer.

159

Sell-out

The Companies Act also gives minority shareholders a right to be bought out in certain circumstances by an offeror who has made a takeover offer (as defined in Section 974 of the Companies Act). If a takeover offer related to all the shares of a company and, at any time before the end of the period within which the offer could be accepted, the offeror held or had agreed to acquire not less than 90% of the shares to which the offer relates, any holder of the shares to which the offer related who had not accepted the offer could by a written communication to the offeror require it to acquire those shares. The offeror is required to give any shareholder notice of his or her right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of the minority shareholders to be bought out, but that period cannot end less than three months after the end of the acceptance period. If a shareholder exercises his or her rights, the offeror is bound to acquire those shares on the terms of the offer or on such other terms as may be agreed.

Disclosure of Interest in Shares

Pursuant to Part 22 of the Companies Act, a company is empowered by notice in writing to require any person whom the company knows to be, or has reasonable cause to believe to be, interested in the company’s shares or at any time during the three years immediately preceding the date on which the notice is issued to have been so interested, within a reasonable time to disclose to the company details of that person’s interest and (so far as is within such person’s knowledge) details of any other interest that subsists or subsisted in those shares.

If a shareholder defaults in supplying the company with the required details in relation to the shares in question (the “Default Shares”), the shareholder shall not be entitled to vote or exercise any other right conferred by membership in relation to general meetings. Where the Default Shares represent 0.25% or more of the issued shares of the class in question, the directors may direct that:

●

any dividend or other money payable in respect of the Default Shares shall be retained by the company without any liability to pay interest on it when such dividend or other money is finally paid to the shareholder; and/or

●

no transfer by the relevant shareholder of shares (other than a transfer approved in accordance with the provisions of the company’s articles of association) may be registered (unless such shareholder is not in default and the transfer does not relate to Default Shares).

Dividends

Under English law, before a company can lawfully make a distribution, it must ensure that it has sufficient distributable reserves. A company’s distributable reserves are its accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital duly made.

In addition to having sufficient distributable reserves, a public company will not be permitted to make a distribution if, at the time, the amount of its net assets (that is, the aggregate of the company’s assets less the aggregate of its liabilities) is less than the aggregate of its issued and paid-up share capital and undistributable reserves, or if the distribution would result in the amount of its net assets being less than that aggregate.

Purchase of Own Shares

Under English law, a public limited company may purchase its own shares only out of the distributable profits of the company or the proceeds of a new issue of shares made for the purpose of financing the purchase. A public limited company may not purchase its own shares if as a result of the purchase there would no longer be any issued shares of the company other than redeemable shares or shares held as treasury shares.

Subject to the foregoing, because the Nasdaq Capital Market is not a “recognized investment exchange” under the Companies Act, a company may purchase its own fully paid shares only pursuant to a purchase contract authorized by ordinary resolution of the holders of its ordinary shares before the purchase takes place. Any authority will not be effective if any shareholder from whom the company proposes to purchase shares votes on the resolution and the resolution would not have been passed if such shareholder had not done so. The resolution authorizing the purchase must specify a date, not being later than five years after the passing of the resolution, on which the authority to purchase is to expire.

160

A share buy back by a company of its ordinary shares will give rise to UK stamp duty at the rate of 0.5% of the amount or value of the consideration payable by the company, and such stamp duty will be paid by the company.

Our articles of association do not have conditions governing changes in our capital which are more stringent than those required by law.

Statutory Pre-emption Rights

Under English law, a company must not allot equity securities to a person on any terms unless the following conditions are satisfied:

●

it has made an offer to each person who hold ordinary shares in the company to allot to them on the same or more favorable terms a proportion of those securities that is as nearly as practicable equal to the proportion in nominal value held by them of the ordinary share capital of the company; and

●

the period during which any such offer may be accepted has expired or the company has received notice of the acceptance or refusal of every offer so made.

For these purposes “equity securities” means ordinary shares in the company or rights to subscribe for, or to convert securities into, ordinary shares in the company. “Ordinary shares” means shares other than shares that, with respect to dividends and capital, carry a right to participate only up to a specified amount in a distribution.

The statutory pre-emption rights are subject to certain exceptions, including the issue of ordinary shares for non-cash consideration, an allotment of bonus shares and the allotment of equity securities pursuant to an employees’ share scheme. The statutory pre-emption rights may also be disapplied with the approval of 75% of shareholders.

Shareholder Rights

Certain rights granted under the Companies Act, including the right to requisition a general meeting or require a resolution to be put to shareholders at the annual general meeting, are only available to our members. For English law purposes, our members are the persons who are registered as the owners of the legal title to the shares and whose names are recorded in our register of members. In the case of shares held in a settlement system operated by the Depository Trust Company (“DTC”), the registered member will be DTC's nominee, Cede & Co. If a person who holds their ordinary shares in DTC wishes to exercise certain of the rights granted under the Companies Act, they may be required to first take steps to withdraw their ordinary shares from the settlement system operated by DTC and become the registered holder of the shares in our register of members. A withdrawal of shares from DTC may have tax implications, for additional information on the potential tax implications of withdrawing your shares from the settlement system operated by DTC, see the section entitled “ The Contribution Proposal – Material UK Tax Consequences of Owning, Holding and Disposing of VivoPower Shares .”

UK City Code on Takeovers and Mergers

The Company does not believe that it is subject to the Takeover Code as it considers that it falls outside of the types of company the Takeover Panel specifies it regulates (set out in Section 3(a) of the Code). However, as a UK public limited company, VivoPower may, in certain limited circumstances, become subject to the Takeover Code. VivoPower will keep this matter under review.

Any takeover proposal for the company would not, therefore, at the present time be governed by the Takeover Code and the Panel would not have jurisdiction in relation to any such transaction.

161

History of Security Issuances

We were incorporated on February 1, 2016 with an issued share capital of 50,000 ordinary shares of nominal value of £1.00 each. Since incorporation there have been the following changes to our issued share capital:

●

pursuant to the authority granted by a resolution, passed as an ordinary resolution by our shareholders on August 3, 2016: that the existing 50,000 ordinary shares of £1 each in the capital of the Company be sub-divided into 5,514,375 ordinary shares of £ 0.00906721 each;

●

pursuant to the authority granted by a resolution, passed as an ordinary resolution by our shareholders on August 3, 2016: that a further 204,504 ordinary shares of £ 0.00906721 each be allotted up to an aggregate nominal amount of £1,854.29; and

●

pursuant to the authority granted by a resolution, passed as an ordinary resolution by our shareholders on August 3, 2016 that the share capital be redenominated from Great British Pounds to U.S. Dollars.

Transfer Agent and Registrar

Upon the completion of this offering, the transfer agent and registrar for our ordinary shares will be Computershare.

Listing

We intend to apply for the listing of our ordinary shares on the Nasdaq Capital Market under the symbol “VVPR.”

162

PRICE RANGE OF ARWA SECURITIES AND DIVIDENDS

Market Price of Units, Ordinary Shares, Rights and Warrants

ARWA’s units, ordinary shares, rights and warrants are traded on The Nasdaq Capital Market under the symbols ARWAU, ARWA, ARWAR and ARWAW, respectively. The following table sets forth the high and low sales prices for ARWA’s units, ordinary shares, rights and warrants for the periods indicated since the units began public trading on May 1, 2015 and since the ordinary shares, rights and warrants began separate public trading on May 18, 2015.

The closing price ARWA’s units, ordinary shares, rights and warrants on August 10, 2016, the last trading day before announcement of the execution of the Contribution Agreement, was $10.32, $10.07, $0.29 and $0.09, respectively. As of the record date, the record date, the closing price for each unit, ordinary share, right and warrant of ARWA was $[●], $[●], $[●] and $[●], respectively.

	Units		Ordinary Shares		Rights		Warrants
	High	Low	High	Low	High	Low	High	Low
2016-2017:
Second Quarter*	10.45	10.20	10.12	10.02	0.3434	0.15	0.1751	0.08

First Quarter	10.35	10.13	10.50	9.89	0.35	0.20	0.1158	0.08
2015-2016:
Fourth Quarter	10.28	9.90	9.89	9.74	0.32	0.20	0.1155	0.08

Third Quarter	10.20	10.10	9.96	9.80	0.27	0.16	0.17	0.08

Second Quarter	10.35	10.09	10.30	9.74	0.2801	0.169	0.17	0.10

First Quarter	10.10	9.95	9.80	9.63	0.30	0.23	0.17	0.10

___________________

* Through August 17, 2016

Holders of ARWA’s units, ordinary shares, warrants and rights should obtain current market quotations for their securities. The market price of ARWA’s securities could vary at any time before the merger.

Holders

As of [●], 2016, the record date, there were [●] holders of record of our units, [●] holders of record of our ordinary shares, [●] holders of record of our warrants and [●] holders of record of our rights. Management believes we have in excess of 300 beneficial holders of our securities.

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APPRAISAL RIGHTS

Neither ARWA shareholders, warrantholders nor rights holders have appraisal rights in connection with the Transactions.

SHAREHOLDER PROPOSALS

The VivoPower 2017 annual meeting of shareholders will be held on or about [●], 2017 unless the date is changed by the board of directors. If you are a shareholder and you want to include a proposal in the proxy statement for the year 2017 annual meeting, you need to provide it to VivoPower by no later than [●], 2017. You should direct any proposals to VivoPower’s secretary at its principal and registered office which will be located at 23 Hanover Square, Mayfair, London W1S 1JB, UK. If you are a shareholder and you want to present a matter of business to be considered at the year 2017 annual meeting, under VivoPower’s memorandum and articles of association you must give timely notice of the matter, in writing, to VivoPower’s secretary. To be timely, the notice has to be given between [●], 2016 and [●], 2017.

ARWA will not hold a 2017 meeting if the Contribution Proposal and Dissolution Proposals are approved.

OTHER SHAREHOLDER COMMUNICATIONS

Shareholders and interested parties may communicate with ARWA’s board of directors, any committee chairperson or the non-management directors as a group by writing to the board or committee chairperson in care of Arowana Inc., Level 11, 153 Walker Street, North Sydney, NSW 2060, Australia. Following the Transactions, such communications should be sent in care of VivoPower, at 23 Hanover Square, Mayfair, London W1S 1JB, UK. Each communication will be forwarded, depending on the subject matter, to the board of directors, the appropriate committee chairperson or all non-management directors.

EXPERTS

The consolidated financial statements of VivoPower International PLC and Subsidiaries as of March 31, 2016, and the period from February 1, 2016 (inception) through March 31, 2016, appearing in this proxy statement/prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere in this proxy statement/prospectus, and are included in reliance on such report given on the authority of Marcum LLP as experts in auditing and accounting.

The financial statements of Aevitas Group Limited as of March 31, 2016 and 2015 and for each of the two fiscal years in the period ended March 31, 2016 included in this proxy statement/prospectus have been so included in reliance on the report of PKF(NS) Audit & Assurance Limited Partnership, an independent registered public accounting firm, appearing elsewhere herein given on the authority of said firm as experts in auditing and accounting.

The financial statements of VivoPower Pty Ltd as of March 31, 2016 and 2015 and for each of the two fiscal years in the period ended March 31, 2016 included in this proxy statement/prospectus have been so included in reliance on the report of PKF(NS) Audit & Assurance Limited Partnership, an independent registered public accounting firm, appearing elsewhere herein given on the authority of said firm as experts in auditing and accounting.

The financial statements of Arowana Inc. as of February 29, 2016 and 2015, and for the year ended February 29, 2016 and for the period from October 1, 2014 (inception) through February 28, 2015, appearing in this proxy statement/prospectus have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere in this proxy statement/prospectus, and are included in reliance on such report given on the authority of Marcum LLP as experts in auditing and accounting.

Representatives of Marcum LLP will be present at the shareholder meeting or will be available by telephone with the opportunity to make statements and to respond to appropriate questions.

DELIVERY OF DOCUMENTS TO SHAREHOLDERS

Pursuant to the rules of the SEC, ARWA and services that it employs to deliver communications to its shareholders are permitted to deliver to two or more shareholders sharing the same address a single copy of each of ARWA’s annual report to shareholders and ARWA’s proxy statement. Upon written or oral request, ARWA will deliver a separate copy of the annual report to shareholder and/or proxy statement to any shareholder at a shared address to which a single copy of each document was delivered and who wishes to receive separate copies of such documents. Shareholders receiving multiple copies of such documents may likewise request that ARWA deliver single copies of such documents in the future. Shareholders may notify ARWA of their requests by calling or writing ARWA at its principal executive offices at Level 11, 153 Walker Street, North Sydney, NSW 2060, Australia or +612-8083-9800. Following the Transactions, such requests should be made by calling or writing VivoPower at 23 Hanover Square, Mayfair, London W1S 1JB, United Kingdom or +44 20 3714 8881.

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This document, in so far as it constitutes an invitation or inducement to engage in investment activity (within the meaning of section 21 Financial Services and Markets Act 2000 as amended, or FSMA, in connection with the securities which are the subject of the offering contemplated by this document, VivoPower shares, ARWA warrants, ARWA shares or otherwise, is being directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments who fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) persons who fall within Article 43 of the Order (members and creditors of certain bodies corporate) or (iv) certain high value persons and entities who fall within Article 49(2)(a) to (d) of the Order; or (iv) any other person to whom it may lawfully be communicated (all such persons in (i) to (iv) together being referred to as “relevant persons”). The VivoPower shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such VivoPower shares will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. The communication of this document or any such invitation or inducement to any persons other than relevant persons is unauthorized and may contravene FSMA.

WHERE YOU CAN FIND MORE INFORMATION

ARWA files reports, proxy statements and other information with the SEC as required by the Exchange Act. You may read and copy reports, proxy statements and other information filed by ARWA with the Securities SEC at the SEC public reference room located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain copies of the materials described above at prescribed rates by writing to the Securities and Exchange Commission, Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549. You may access information on ARWA at the SEC web site containing reports, proxy statements and other information at: http://www.sec.gov.

This proxy statement/prospectus incorporates important business and financial information about the parties that is not included in or delivered with the proxy statement/prospectus. Information and statements contained in this proxy statement/prospectus or any annex to this proxy statement/prospectus are qualified in all respects by reference to the copy of the relevant contract or other annex filed as an exhibit to the registration statement of which this proxy statement/prospectus forms a part.

All information contained in this document relating to ARWA has been supplied by ARWA, and all such information relating to AWN has been supplied by AWN. Information provided by one another does not constitute any representation, estimate or projection of the other.

If you would like additional copies of this document or if you have questions about the transactions, you should contact via phone or in writing:

Arowana Inc.
Level 11, 153 Walker Street
North Sydney, NSW 2060

Australia
Tel. +612-8083-9800

Email. investor.relations@arowanaco.com

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INDEX TO FINANCIAL STATEMENTS

Vi voPower International PLC and Subsidiaries Consolidated Financial Statements	F-1
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Statement of Financial Position	F-3
Consolidated Statement of Loss and Comprehensive Loss	F-4
Consolidated Statement of Changes in Shareholder's Deficit	F-5
Consolidated Statement of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7

Aevitas Group Limited and Its Controlled Entities	F-15
Statement of Profit or Loss and Other Comprehensive Income	F-17
Statement of Financial Position	F-18
Statement of Changes in Equity	F-19
Statement of Cash Flows	F-20
Notes to the Financial Statements	F-21
Report of Independent Registered Public Accounting Firm	F-49

VivoPower Pty Limited and Controlled Entities	F-50
Consolidated Statement of Profit or Loss and Other Comprehensive Income	F-52
Consolidated Statement of Financial Position	F-53
Consolidated Statement of Changes in Equity	F-54
Consolidated Statement of Cash Flows	F-55
Notes to the Consolidated Financial Statements	F-56
Report of Independent Registered Public Accounting Firm	F-77

Arowana Inc. Interim Financial Statements	F-78
Condensed Balance Sheets	F-79
Condensed Statements of Operations	F-80
Condensed Statement of Changes in Shareholders’ Equity	F-81
Condensed Statements of Cash Flows	F-82
Notes to Unaudited Condensed Financial Statements	F-83

Arowana Inc. Audited Financial Statements	F-93
Report of Independent Registered Public Accounting Firm Financial Statements	F-94
Balance Sheets	F-95
Statements of Operations	F-96
Statements of Shareholders’ Equity	F-97
Statements of Cash Flows	F-98
Notes to Financial Statements	F-99

166

VIVOPOWER INTERNATIONAL PLC

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

For The Period from Inception

(February 1, 2016) to March 31, 2016

Table of Contents

Page

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Statement of Financial Position	F-3

Consolidated Statement of Loss and Comprehensive Loss	F-4

Consolidated Statement of Changes in Shareholder's Deficit	F-5

Consolidated Statement of Cash Flows	F-6

Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

of VivoPower International PLC

We have audited the accompanying consolidated statement of financial position of VivoPower International PLC and Subsidiaries (the “Company”) as of March 31, 2016, and the related consolidated statements of loss and comprehensive loss, changes in shareholder’s deficit and cash flows for the period from February 1, 2016 (inception) through March 31, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of VivoPower International PLC and Subsidiaries, as of March 31, 2016, and the consolidated results of its operations and its cash flows for the period from February 1, 2016 (inception) through March 31, 2016 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

New York, NY

August 10, 2016

F-2

VIVOPOWER INTERNATIONAL PLC

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(U.S. dollars)

	March 31, 2016
ASSETS
Non-Current Assets
Fixed Assets	$	2,898
Note receivable (Note 3)		7,874,594
Total non-current assets		7,877,492

Current Assets
Cash (Note 2)		28,038
Total current assets		28,038
Total assets	$	7,905,530

LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
Accounts payable	$	184,969
Interest payable (Note 4)		964
Notes payable - Arowana (Note 4)		8,000,258
Total current liabilities		8,186,191
Total liabilities		8,186,191

Commitments and Contingencies
Shareholder's Deficit
Ordinary shares $.012 par value 5,514,375 issued and outstanding at inception and March 31, 2016 (Note 6)		72,125
Share subscription receivable (Note 10)		(72,125	)
Accumulated deficit		(280,661	)
Total shareholder's deficit		(280,661	)
Total liabilities and shareholder's deficit	$	7,905,530

The accompanying notes are an integral part of these consolidated financial statements.

F-3

VIVOPOWER INTERNATIONAL PLC

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE LOSS

(U.S. dollars)

	February 1, 2016 (inception) through
	March 31,
	2016

General and administrative expenses	$	279,036
Other expense
Interest expense (Note 4)		964
Currency losses (Note 4)		661
Total other expense		1,625

Loss before provision for income taxes		(280,661	)
Provision for income taxes (Note 8)		-
Net loss		(280,661	)
Comprehensive loss		-
Total comprehensive loss	$	(280,661	)

The accompanying notes are an integral part of these consolidated financial statements.

F-4

VIVOPOWER INTERNATIONAL PLC

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S DEFICIT

(U.S. dollars)

	Ordinary Shares				Subscription			Accumulated			Shareholder's
	Number		Amount		Receivable			Deficit			Deficit

February 1, 2016 (inception) (Note 10)		-	$	-	$	-		$	-		$	-
Issuance of shares to parent		5,514,375	$	72,125	$	(72,125	)	$	-		$	-
Net Loss		-		-		-			(280,661	)		(280,661	)
March 31, 2016		5,514,375	$	72,125	$	(72,125	)	$	(280,661	)	$	(280,661	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

VIVOPOWER INTERNATIONAL PLC

AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(U.S. dollars)

	February 1, 2016 (inception) through
	March 31, 2016

OPERATING ACTIVITIES
Net loss	$	(280,661	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in operating assets and liabilities:
Accounts payable		184,969
Interest payable		964
Net cash used in operating activities		(94,728	)

INVESTING ACTIVITIES
Purchase of fixed assets		(2,898	)
Net cash used in investing activities		(2,898	)

FINANCING ACTIVITIES
Advances on note payable - Arowana (Note 4)		125,664
Net cash provided by financing activities		125,664

Increase in cash		28,038
Cash, beginning of period		-
Cash, end of period	$	28,038

Non-Cash Transactions:
Contribution of note and interest payable from parent (Note 4)	$	7,874,594
Contribution of note receivable from parent (Note 3)	$	(7,874,594	)

The accompanying notes are an integral part of these consolidated financial statements.

F-6

VIVOPOWER INTERNATIONAL PLC

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - OVERVIEW

The Group

VivoPower International PLC (“VivoPower” when denoting the individual parent entity and the “Group”, “our”, “us”, or “we” when denoting VivoPower inclusive of its subsidiaries) was incorporated as a public limited company on February 1, 2016, according to the laws of England and Wales. VivoPower is a considered to be a foreign private issuer under the U.S. Securities and Exchange Commission rules. It has subsidiaries in the United Kingdom ("UK") and the United States of America ("U.S.") and is, itself, a wholly-owned subsidiary of Arowana International Limited ("Arowana"), an Australian public company traded on the Australian Stock Exchange under the symbol "AWN".

VivoPower’s registered office is 23 Hanover Square, Mayfair London, W1S 1JB, United Kingdom, with its principal place of business at 140 Broadway 28th Floor New York, NY 10005. Since its formation, the Group has primarily been engaged in the acquisition, financing, and development of solar power generating facilities, initially in the U.S.

Stock Split

On August 3, 2016, VivoPower's board of directors and sole shareholder affected a 110.287509:1 stock split (the "Stock Split"). Unless otherwise stated or the context would require otherwise, all share amounts disclosed throughout these consolidated financial statements retroactively takes into account the Stock Split, and all resulting fractional share amounts have been rounded to the nearest whole share.

Business

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board.

Authorization

The consolidated financial statements were authorized for issue by the board of directors on August 9, 2016.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recent Accounting Pronouncements

IFRS 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods beginning on or after 1 January 2018).

The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and includes revised requirements for the classification and measurement of financial instruments, revised recognition and derecognition requirements for financial instruments and simplified requirements for hedge accounting. The key changes that may affect the Group on initial application include certain simplifications to the classification of financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for expected credit loss, and the irrevocable election to recognize gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. IFRS 9 also introduces a new model for hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge policies in line with the new hedge accounting requirements of the Standard, the application of such account would largely be prospective.

F-7

Although the directors anticipate that the adoption of IFRS 9 may have an impact on the Group’s financial instruments, including hedging activity, it is impractical at this stage to provide a reasonable estimate of such estimate as the Group has not yet commenced significant operations.

IFRS 15: Revenue from contracts with customers (applicable to annual reporting periods commencing on or after 1 January 2018).

When effective, this Standard will replace the current accounting requirements applicable to revenue with a single, principles-based model. Except for a limited number of exceptions, including leases, the new revenue model in IFRS 15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of business to facilitate sales to customers and potential customers.

The core principle of the Standard is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. To achieve this objective, IFRS 15 provides the following five-step process:

●

Identify the contract(s) with a customer

●

Identify the performance obligations in the contract(s)

●

Determine the transaction price

●

Allocate the transaction price to the performance obligations in the contract(s)

●

Recognize revenue when (or as) the performance obligations are satisfied

This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue. Although the directors anticipate that the adoption of IFRS 15 may have an impact on the Group’s financial statements, it is impractical at this stage to provide a reasonable estimate of such impact as the Group has not yet commenced significant operations.

IFRS 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).

When effective, this Standard will replace the current accounting requirements applicable to leases with a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

A lessee is required to recognize a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee recognizes depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the statement of cash flows applying International Accounting Standards ("IAS") 7 Statement of Cash Flows.

This Standard will require retrospective restatement, as well as enhanced disclosures regarding leases. Although the directors anticipate that the adoption of IFRS 16 may have an impact on the Group’s financial statements, it is impractical at this stage to provide a reasonable estimate of such impact as the Group has not yet commenced significant operations.

Principles of Consolidation

The Group consolidates the financial position, results of operations, and cash flows of all majority-owned subsidiaries. The consolidated financial statements include the accounts of VivoPower International PLC and its subsidiaries including VivoPower International Services Limited ("Services"); VivoPower USA, LLC ("USA") and its direct and indirect subsidiaries including the solar project company IS 31 Holdings, LLC. Significant intercompany accounts and transactions have been eliminated in consolidation.

F-8

Use of Estimates

The preparation of our financial statements in accordance with IFRS requires us to, on an ongoing basis, make significant estimates and judgments that affect the reported values of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions we believe are reasonable under the circumstances, the results of which form the basis for our conclusions. Actual results may differ from these estimates under different assumptions or conditions. Such differences could have a material impact on our future financial position, results of operations, and cash flows.

●

The Group is required to make a judgment to determine whether funding advanced for the construction of solar arrays is recognized as a financial asset, an investment property, or inventory.

●

The Group is required to make a determination regarding the collectability of its note receivable.

Cash

Our deposits are maintained primarily in two financial institutions and, at times, may exceed amounts covered by federally sponsored insurance, where applicable.

Note Receivable

Financial assets classified as notes receivables are measured at amortized cost using the effective interest method less any impairment losses. Impairment losses on notes receivables are recognized using separate allowance accounts.

Income Taxes

The tax expense recognized in the consolidated statement of profit or loss, if any, comprises current income tax expense plus deferred tax expense.

Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred tax is provided on temporary differences that are determined by comparing the carrying amounts of tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements.

Deferred tax is not provided for the following:

●

Taxable temporary differences arising on the initial recognition of goodwill.

●

Temporary differences related to investment in subsidiaries, associates and jointly controlled entities to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

F-9

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilized.

Current tax assets and liabilities are offset where there is a legally enforceable right to set off the recognized amounts and there is an intention either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognized as income or an expense and included in profit or loss for the period except where the tax arises from a transaction which is recognized in other comprehensive income or equity, in which case the tax is recognized in other comprehensive income or equity respectively.

Currency

The Group's registered office is in the United Kingdom but its primary solar development activities, expected revenues, and the majority of its expenses are located in the U.S. and denominated in U.S. dollars. As such, the Group as a whole and each individual consolidated subsidiary has as its functional and reporting currency the U.S. dollar. The Group has some administrative expenses denominated in currencies other than the U.S. dollar (primarily salaries, rents, and professional services in the UK) and is expected to incur currency gains and/or losses on these transactions. The Group's debt is outstanding from its parent company, Arowana, and is denominated in Australian dollars (see Note 4 "NOTES PAYABLE"). As a result, currency translation adjustments are likely. The Group does not engage in hedging activities.

Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.

Financial Instruments

The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, available-for-sale financial assets and held-to-maturity investments. The Group classifies financial liabilities in the following categories; financial liabilities at fair value through profit or loss, and other financial liabilities at amortized cost. The classification depends on the purpose for which the financial instruments were acquired and the nature of the instruments. Management determines the classification of its financial instruments at initial recognition.

Financial Risk Factors

The Group’s activities expose it to a variety of financial risks: market risk (including cash flow interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance.

Risk management is carried out by management under the supervision of the board of directors. Management identifies and evaluates financial risks. The Group has not engaged in hedging activities to date.

Market Risk

Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates affecting the Group’s income or the value of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. All such transactions are carried out under the supervision of the Board of directors. The Group is exposed to the risk of changes in foreign exchange rates as it has debt to its parent company, Arowana, denominated in Australian dollars. The Group is not exposed to changes in equity prices as it holds no investments in publicly traded companies and has no sponsored plans including its own equity. The Group is also not exposed to the risk of interest rate changes since the Group has no borrowings issued at variable rates.

F-10

Credit Risk

Management is responsible for managing and analyzing the credit risk. Credit risk arises from cash on deposit with banks and financial institutions, as well as credit exposure stemming from its note receivable. Assumed credit risk is mitigated by engaging with known, highly rated financial institutions with whom the Group maintains its deposits and ensuring its note receivable is fully and adequately collateralized at all times. The maximum exposure to credit risk at the reporting date is the carrying value of each class of assets. Management does not expect any losses from nonperformance by these counterparties.

Liquidity Risk

Management closely monitors its current and expected future liquidity using detailed forecasts of its upcoming solar project expenditures and an estimate of its administrative needs. The Group is dependent upon continued advances from its parent, Arowana, to meet its development and administrative needs.

Capital Management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including short-term and long-term borrowings as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as equity as shown in the statement of financial position plus net debt.

NOTE 3 - NOTE RECEIVABLE

At March 31, 2016, the Group had a note receivable from an unrelated third-party, Principal Solar, Inc., denominated in U.S. dollars and fully and adequately secured by the debtor's exclusive right to acquire the solar projects Innovative Solar 31 and Innovative Solar 47. The note had been contributed to the Group by its parent company, Arowana, effective March 31, 2016, in exchange for an equal contribution of the parent's cumulative investment of development funds advanced to Principal Solar. The note bears interest at a rate of 6% per annum and was due to mature December 31, 2016. See NOTE 10 "Satisfaction of Note Receivable".

NOTE 4 - NOTE S PAYABLE

Notes Payable - Arowana

VivoPower International Services Limited

On February 10, 2016, VivoPower International Services Limited ("Services"), a subsidiary of VivoPower, obtained financing from Arowana International Limited, its ultimate parent company, to support its ongoing administrative needs. The note is denominated in Australian dollars and had an initial principal amount of AU$450,000 (approximately $325,000). The note provides for additional advances without limit, is unsecured, matures on February 10, 2017, and bears a fixed interest rate of 6.0% annually. The principal outstanding at March 31, 2016, is $130,749, and all principal and interest is due at maturity.

F-11

VivoPower USA, LLC

On March 23, 2016, VivoPower USA, LLC obtained financing from Arowana International Limited, its ultimate parent company, to support its ongoing development of solar projects in the U.S. and its administrative needs. The note is denominated in Australian dollars and had an initial principal amount of AU$200,000 (approximately $152,000). The note provides for additional advances without limit, is unsecured, matures on March 24, 2017, and bears a fixed interest rate of 6.0% annually. The note had been contributed to the Group by its parent company, Arowana, effective March 31, 2016, in exchange for a similar contribution of the parent's note receivable from Principal Solar, Inc. (See NOTE 3 - "NOTE RECEIVABLE"). The principal outstanding at March 31, 2016, including the contributed amount, is $7,722,924. Interest payable of $146,585 outstanding on the note at the date it was contributed was assumed by the Group. All principal and interest on the note payable is due at maturity.

NOTE 5 - LEASES

The Group's solar arrays acquired in July 2016 are expected to sit on properties subject to long-term real estate leases (or similar agreements in the case of rooftop installations) with initial terms equal to or greater than the power purchase agreement and having one or more renewal options. Rental payments under the leases may vary in type between fixed price, percentage of revenue, or, primarily in the case of rooftop installations, no separate charge. See NOTE 10 "SUBSEQUENT EVENTS".

The Group maintains its headquarters in London UK pursuant to an office lease expiring in March 2017 at a cost of $15,190 (GBP £10,680) per month. Minimum lease payments in 2016 and 2017 are $136,430 and $45,988, respectively.

NOTE 6 – CAPITAL STOCK

At March 31, 2016, VivoPower has 5,514,375 certificated $.012 par value ordinary shares issued and outstanding held by our parent company, Arowana.

NOTE 7 – RELATED PARTY TRANSACTIONS

Other than loans and advances from our parent company, Arowana, described in NOTE 4 "NOTES PAYABLE" there are no related party transactions involving the Group.

Parent Company: Arowana International Limited

Subsidiaries
VivoPower International Services Limited	US-NC-31 Sponsor Partner, LLC
VivoPower USA, LLC	US-NC-31 Sponsor, LLC
VivoPower US-NC-31, LLC	IS 31 Holdings, LLC

NOTE 8 - TAXES

The Group has no current or deferred income tax liability and deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. As the Group has not yet begun to generate revenue, future profitability is uncertain, and no deferred tax assets were recognized.

At March 31, 2016, the Group has a current net operating loss of $280,661 for which no deferred tax asset has been recognized.

F-12

NOTE 9 - COMMITMENTS AND CONTINGENCIES

At March 31, 2016, USA had expended significant amounts toward acquiring and developing two solar projects through a secured note receivable from an unrelated third party, yet had not entered into definitive documents to acquire the projects. See NOTE 10 "SUBSEQUENT EVENTS".

NOTE 10 - SUBSEQUENT EVENTS

Financing

Arowana has continued to make advances under each of the notes payable (see NOTE 4 "NOTES PAYABLE"), and current balances payable to Arowana outstanding from Services and USA are $562 thousand and $15.9 million, respectively at July 31, 2016.

Satisfaction of Note Receivable

In June 2016, the Group and debtor reached an amicable agreement for the debtor to relinquish in favor of the Group its exclusive right to acquire the solar projects Innovative Solar 31 and Innovative Solar 47 in exchange for cancellation of the note and full satisfaction of all amounts due under the note. The Group then entered into a definitive purchase agreement with the seller of the projects. The note receivable was classified as non-current as it was settled in exchange for a non-current asset.

Acquisitions

Innovative Solar 31

In July 2016, USA's wholly-owned subsidiary, IS-31 Holdings, LLC ("31Holdings") acquired from Innovative Solar Systems, LLC ("ISS"), a solar developer operating primarily in the southeastern U.S 100% of the equity interest of Innovative Solar 31, LLC ("IS31"). IS31 owns a 34.2mw AC solar project to be built in Bladen County, North Carolina U.S. The purchase price was approximately $2.1 million. At acquisition, IS31 held only limited intangible assets including a 10-year power purchase agreement ("PPA ") with Duke Energy Progress, LLC, an interconnection agreement and a real estate lease. IS31 does not have, nor has it ever had, any other assets, any liabilities, any employees, any revenues, or any operations of any kind. As such, IS31 is not a "business" as defined in the accounting literature, and it has no historical financial statements. 31Holdings investment to date in the project is approximately $6.8 million at July 31, 2016. Construction of the project has begun and the commercial operation date ("COD") is expected in early 2017.

Total as built and transferred cost of the project is expected to be $79.4 million and financing, including construction financing and tax equity, has been arranged. Following construction, the project will have no long-term debt. In addition to the production of electricity, IS31 will also produce renewable energy credits whose market potential and value, if any, have not yet been determined.

The IS31 lender provided $35.3 million in construction financing and $25.7 million in a tax-equity bridge. Terms of the financings are typical including a secured first lien on the project, a guaranty of the parent company, USA, blocked bank accounts, etc. The total cost of the financing during construction is expected to be $1.6 million.

The tax equity bridge loan of $25.7 million provided by the construction lender will be contributed toward construction of the project in installments of 1% at financial close, 19% at mechanical completion, and 80% at the COD. The tax equity was arranged in the form of a fixed-date partnership flip.

Upon COD, 85.5% of the project is expected to be sold to a newly formed subsidiary of an unrelated entity, New Energy Solar ("NES"), of Sydney Australia. At COD, the Group expects to receive build and transfer revenue of $11.6 million. Following the partial sale, the Group expects to retain a 14.5% minority interest and will manage the project for NES under a separate management services agreement earning the Group $75 thousand annually.

F-13

IS31 is party to multiple real estate leases covering 196 acres at a blended cost of $176 thousand per year, escalating at 5% every five years beginning in year 6. The leases are each for 20 years and have two 5-year options to extend resulting in a total potential lease period of 30 years.

Innovative Solar 47

The Group is pursuing the acquisition Innovative Solar 47, LLC ("IS47") from Innovative Solar Systems and expects to sign definitive documents imminently. IS47 owns a 33.8mw AC solar project to be built in Robeson County, North Carolina U.S. The purchase price was approximately $2.0 million. IS47 holds only limited intangible assets, a 10-year power purchase agreement ("PPA ") with Duke Energy Progress, LLC, an interconnection agreement and a real estate lease. IS47 does not have, nor has it ever had, any other assets, any liabilities, any employees, any revenues, or any operations of any kind. As such, IS47 is not a "business" as defined in the accounting literature, and it has no historical financial statements. The Group's investment to date in the project is approximately $4.4 million at July 31, 2016. Construction of the project has begun and COD is expected in early 2017.

Total as built and transferred cost of the project is expected to be $78.6 million. Final engineering and design work is in progress and discussions on financing for the project are underway with multiple parties. IS47 will produce renewable energy credits whose market potential and value, if any, have not yet been determined.

IS47 is party to multiple real estate leases covering 168 acres at a cost of $190 thousand per year, escalating at 5% every five years beginning in year 6. The lease is for 20 years and has two 5-year options to extend resulting in a total potential lease period of 30 years. IS47 also has options of 9-month duration to lease adjacent parcels of up to 155 acres on similar terms should additional acreage be needed.

Capitalization

On August 3, 2016, VivoPower called the subscription receivable of Arowana denominated in British pounds collecting £50,000 in cash in full satisfaction of the subscription receivable, and the shares held by them became fully paid as of that date. On August 3, 2016, VivoPower's board of directors and sole shareholder affected a 110.287509:1 stock split and issued an additional 204,504 ordinary shares in exchange for an additional investment by Arowana of £1,854.29. Immediately following the share issuance, VivoPower redenominated its par value of shares to its U.S. dollar equivalent value of $0.012 par value per share. VivoPower's capitalization following these changes is 5,718,879 shares outstanding having a par value of $0.012 per share and fully paid equity of $68,626.55.

Executive Management

On August 4, 2016, Services entered into a Service Agreement with Philip Comberg ("Executive") to serve as the Group's Chief Executive Officer effective September 1, 2016. The agreement runs for an indefinite term and until notice of not less than 12 months is provided by Services or by the Executive. Pursuant to the agreement, Executive is entitled to an initial annual base salary of £540,000 ($705,917) subject to review and upward adjustment annually; an additional 10% of his base salary in lieu of pension contributions; company paid life insurance at four times his base salary; and, at Executive's election, participation in company sponsored benefits plans offered to other employees or an amount of £1,800 ($2,351) per month contribution to he and his family's private medical insurance. The Executive will also participate in a special bonus scheme where he could earn up to an additional amount of 150% of his annual base salary for achieving specified performance objectives. In addition to observing English public holidays, the Executive is entitled to 30 days personal holidays each year. The Executive is restricted from pursuing interests in other businesses and is subject to customary terms regarding confidentiality, intellectual property, and non-competition protections afforded the company.

F-14

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Financial Statements

For the Years Ended 31 March 2016 and 2015

F-15

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Contents

For the Years Ended 31 March 2016 and 2015

Page

Financial Statements

Statement of Profit or Loss and Other Comprehensive Income

F-17

Statement of Financial Position

F-18

Statement of Changes in Equity

F-19

Statement of Cash Flows

F-20

Notes to the Financial Statements

F-21

Report of Independent Registered Public Accounting Firm

F-49

F-16

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Statement of Profit or Loss and Other Comprehensive Income

For the Years Ended 31 March

2016 2015

Note $ $

Sales revenue
4 35,439,263 39,595,734

Cost of sales
5 (31,651,837 ) (35,424,152 )

Gross profit
3,787,426 4,171,582

Other income
4 421,792 631,065

Occupancy costs
5 (427,360 ) (435,429 )

Administrative expenses
5 (3,824,633 ) (3,643,510 )

Impairment of intercompany loans
(29,378 ) (1,258,224 )

Finance costs
5 (2,004,367 ) (1,632,047 )

Share of net losses of equity-accounted associates
(287,105 ) (211,645 )

Profit before income tax
(2,363,625 ) (2,378,208 )

Income tax expense
6 (293,197 ) 7,046

Profit from continuing operations
(2,656,822 ) (2,371,162 )

Profit/(loss) from discontinued operations
7 - (474,289 )

Profit for the year
(2,656,822 ) (2,845,451 )

Other comprehensive income for the year, net of tax
- -

Total comprehensive income for the year
(2,656,822 ) (2,845,451 )

Profit attributable to:

Members of the parent entity
(2,763,177 ) (2,816,235 )

Non-controlling interest
106,355 (29,216 )

(2,656,822 ) (2,845,451 )

Total comprehensive income attributable to:

Members of the parent entity
(2,763,177 ) (2,816,235 )

Non-controlling interest
106,355 (29,216 )

(2,656,822 ) (2,845,451 )

The accompanying notes form part of these financial statements.

F-17

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Statement of Financial Position

As At 31 March

2016 2015

Note
$

$

ASSETS

CURRENT ASSETS

Cash and cash equivalents
9 1,852,054 2,133,692

Trade and other receivables
10 7,051,427 6,500,664

Inventories
11 475,540 421,007

Other assets
177,644 152,271

TOTAL CURRENT ASSETS
9,556,665 9,207,634

NON-CURRENT ASSETS

Investments in associates
- 287,105

Property, plant and equipment
12 1,810,832 2,114,006

Intangible assets
13 12,407,447 12,407,447

Deferred tax assets
20 1,246,951 1,271,780

TOTAL NON-CURRENT ASSETS
15,465,230 16,080,338

TOTAL ASSETS
25,021,895 25,287,972

LIABILITIES

CURRENT LIABILITIES

Trade and other payables
14 3,569,301 3,377,112

Borrowings
15 1,570,056 1,539,395

Employee benefits
16 1,694,485 1,566,437

Current tax liabilities
20 126,834 65,914

TOTAL CURRENT LIABILITIES
6,960,676 6,548,858

NON-CURRENT LIABILITIES

Borrowings
15 21,196,516 19,299,923

Employee benefits
16 283,825 201,491

Deferred tax liabilities
20 7,547 7,547

TOTAL NON-CURRENT LIABILITIES
21,487,888 19,508,961

TOTAL LIABILITIES
28,448,564 26,057,819

NET ASSETS
(3,426,669 ) (769,847 )

EQUITY

Issued capital
17 20,117,648 20,117,648

Retained earnings
(25,162,413 ) (22,399,236 )

Total equity attributable to equity holders of the Company
(5,044,765 ) (2,281,588 )

Non-controlling interest
1,618,096 1,511,741

TOTAL EQUITY
(3,426,669 ) (769,847 )

The accompanying notes form part of these financial statements.

F-18

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Statement of Changes in Equity

For the Years Ended 31 March

Note
Ordinary

Shares

$

Retained

Earnings

$

Owners of

parent

$

Non-controlling

Interests

$

Total

$

Balance at 1 April 2015
20,117,648 (22,399,236 ) (2,281,588 ) 1,511,741 (769,847 )

Profit/(loss) for the year
- (2,763,177 ) (2,763,177 ) 106,355 (2,656,822 )

Other comprehensive income
- - - - -

Balance at 31 March 2016
20,117,648 (25,162,413 ) (5,044,765 ) 1,618,096 (3,426,669 )

Balance at 1 April 2014
20,117,648 (20,413,321 ) (295,673 ) 2,243,243 1,947,570

Profit/(loss) for the year
- (2,816,235 ) (2,816,235 ) (29,216 ) (2,845,451 )

Other comprehensive income
- - - - -

Discontinued operations
- 891,170 891,170 (684,286 ) 206,884

Dividends paid or provided for
21 - (60,850 ) (60,850 ) (18,000 ) (78,850 )

Balance at 31 March 2015
20,117,648 (22,399,236 ) (2,281,588 ) 1,511,741 (769,847 )

The accompanying notes form part of these financial statements.

F-19

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Statement of Cash Flows

For the Year Ended 31 March

2016 2015

Note $ $

CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers
38,849,619 43,710,013

Payments to suppliers and employees
(38,719,068 ) (43,540,653 )

Interest received
42,526 30,422

Interest paid
(54,357 ) (218,528 )

Net cash provided by/(used in) operating activities
25 118,720 (18,746 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of plant and equipment
42,316 28,098

Purchase of property, plant and equipment
(223,398 ) (256,629 )

Acquisition of investment in associate
- (498,750 )

Proceeds from disposal of subsidiary
- (488,142 )

Net cash used by investing activities
(181,082 ) (1,215,423 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowings
- 596,940

Repayment of borrowings
(219,276 ) (453,002 )

Dividends paid by parent entity
- (78,850 )

Net cash used by financing activities
(219,276 ) 65,088

Net increase/(decrease) in cash and cash equivalents held
(281,638 ) (1,169,081 )

Cash and cash equivalents at beginning of year
2,133,692 3,302,773

Cash and cash equivalents at end of financial year
9 1,852,054 2,133,692

The accompanying notes form part of these financial statements.

F-20

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

The Group provides electrical and mechanical services to clients in a range of industries. The business provides power generation solutions including design, supply, installation and maintenance of power systems, and control systems. The business also provides and maintains industrial switchboards and motor control centres, electrical motors and non-destructive testing services and energy efficiency services.

The financial report covers Aevitas Group Limited and its controlled entities ('the Group'). Aevitas Group Limited is a for-profit Company limited by shares, incorporated and domiciled in Australia.

Each of the entities within the Group prepare their financial statements based on the currency of the primary economic environment in which the entity operates (functional currency). The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Comparatives are consistent with the prior year, unless otherwise stated.

1

Basis of Preparation

The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and its related interpretations as issued by the International Accounting Standards Board (IASB).

The directors authorised the financial statements for issue on 22 July 2016.

The financial statements have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

Significant accounting policies adopted in the preparation of these financial statements are presented below and are consistent with prior reporting periods unless otherwise stated.

2

Summary of Significant Accounting Policies

(a)

Principles of Consolidation

The consolidated financial statements include the financial position and performance of controlled entities from the date on which control is obtained until the date that control is lost.

Intragroup assets, liabilities, equity, income, expenses and cashflows relating to transactions between entities in the consolidated entity have been eliminated in full for the purpose of these financial statements.

Appropriate adjustments have been made to a controlled entity’s financial position, performance and cash flows where the accounting policies used by that entity were different from those adopted by the consolidated entity. All controlled entities have been prepared on the basis of a March financial year end.

A list of controlled entities is contained in Note 22 to the financial statements.

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the parent has control. Control is established when the parent is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.

F-21

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2

Summary of Significant Accounting Policies (cont'd)

(a)

Principles of Consolidation (cont'd)

Associates

Interests in associates, where the investor has significant influence over the investee, are accounted for using the equity method in accordance with IAS 28 Investments in Associates and Joint Ventures . Under this method, the investment is initially recognised as cost and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss and other comprehensive income of the investee after the date of acquisition.

Where the equity accounted amount of our investment in an entity falls below zero, we suspend the equity method of accounting and record the investment at zero. When this occurs, the equity method of accounting does not recommence until our share of profits and reserves exceeds the cumulative prior years’ share of losses and reserve reductions.

(b)

Income Tax

The tax expense recognised in the statement of profit or loss and other comprehensive income comprises of current income tax expense plus deferred tax expense.

Deferred tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets and liabilities to the carrying amounts in the consolidated financial statements.

Deferred tax is not provided for the following:

●

Taxable temporary differences arising on the initial recognition of goodwill.

●

Temporary differences related to investment in subsidiaries, associates and jointly controlled entities to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and losses can be utilised.

Current tax assets and liabilities are offset where there is a legally enforceable right to set off the recognised amounts and there is an intention either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised as income or an expense and included in profit or loss for the period except where the tax arises from a transaction which is recognised in other comprehensive income or equity, in which case the tax is recognised in other comprehensive income or equity respectively.

F-22

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2

Summary of Significant Accounting Policies (cont'd)

(c)

Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the Group, are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over the life of the lease term.

(d)

Revenue and other income

Revenue is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the transaction will flow to the Group and specific criteria relating to the type of revenue as noted below, has been satisfied.

Revenue is measured at the fair value of the consideration received or receivable and is presented net of returns, discounts and rebates.

All revenue is stated net of the amount of goods and services tax (GST).

Sale of goods

Revenue is recognised on transfer of goods to the customer as this is deemed to be the point in time when risks and rewards are transferred and there is no longer any ownership or effective control over the goods.

Interest revenue

Interest is recognised using the effective interest method.

Rendering of services

Revenue in relation to rendering of services is recognised depending on whether the outcome of the services can be estimated reliably. If the outcome can be estimated reliably then the stage of completion of the services is used to determine the appropriate level of revenue to be recognised in the period.

If the outcome cannot be reliably estimated then revenue is recognised to the extent of expenses recognised that are recoverable.

(e)

Goods and Services Tax (GST)

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payable are stated inclusive of GST.

F-23

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2

Summary of Significant Accounting Policies (cont'd)

(e)

Goods and Services Tax (GST) (cont'd)

The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position.

Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the Australian Taxation Office is classified as operating cash flows.

(f)

Inventories

Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined using the first-in-first-out basis and is net of any rebates and discounts received.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the costs necessary to make the sale. Net realisable value is estimated using the most reliable evidence available at the reporting date and inventory is written down through an obsolescence provision if necessary.

(g)

Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment of losses.

Assets are carried at cost less any accumulated depreciation and any impairment losses. Costs include purchase price, other directly attributable costs and the initial estimate of the costs of dismantling and restoring the asset, where applicable.

Depreciation

Property, plant and equipment, excluding freehold land, is depreciated on a straight-line or diminishing value basis over the assets useful life to the Company, commencing when the asset is ready for use.

Leased assets and leasehold improvements are amortised over the shorter of either the unexpired period of the lease or their estimated useful life.

The estimated useful lives used for each class of depreciable asset are shown below:

Fixed asset class

Useful life

Leasehold improvements

20 to 40 years

Plant and equipment

3.5 to 10 years

Furniture and fittings

10 to 50 years

Motor vehicles

2 to 8 years

Computer equipment

2 to 16 years

At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.

F-24

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2

Summary of Significant Accounting Policies (cont'd)

(h)

Financial instruments

Financial instruments are recognised initially using trade date accounting, i.e. on the date that the Group becomes party to the contractual provisions of the instrument.

On initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured at fair value through profit or loss where transaction costs are expensed as incurred).

Financial Assets

Financial assets are assigned to the different categories on initial recognition, depending on the characteristics of the instrument and its purpose. A financial instrument’s category is relevant to the way it is measured and whether any resulting income and expenses are recognised in profit or loss or in other comprehensive income.

All income and expenses relating to financial assets are recognised in the statement of profit or loss and other comprehensive income in the ‘finance income’ or ‘finance costs’ line item respectively.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers but also incorporate other types of contractual monetary assets.

After initial recognition these are measured at amortised cost using the effective interest method, less provision for impairment. Any change in their value is recognised in profit or loss.

The Group’s trade and most other receivables fall into this category of financial instruments.

Discounting is omitted where the effect of discounting is considered immaterial.

Significant receivables are considered for impairment on an individual asset basis when they are past due at the reporting date or when objective evidence is received that a specific counterparty will default. The amount of the impairment is the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.

In some circumstances, the Group renegotiates repayment terms with customers which may lead to changes in the timing of the payments, the Group does not necessarily consider the balance to be impaired, however assessment is made on a case-by-case basis.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity. Investments are classified as held-to-maturity if it is the intention of the Group's management to hold them until maturity.

Held-to-maturity investments are subsequently measured at amortised cost using the effective interest method, with revenue recognised on an effective yield basis. In addition, if there is objective evidence that the investment has been impaired, the financial asset is measured at the present value of estimated cash flows. Any changes to the carrying amount of the investment are recognised in profit or loss.

F-25

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2

Summary of Significant Accounting Policies (cont'd)

(h)

Financial instruments (cont'd)

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities depending on the purpose for which the liability was acquired.

The Group‘s financial liabilities include borrowings, trade and other payables (including finance lease liabilities), which are measured at amortised cost using the effective interest rate method.

(i)

Impairment of non-financial assets

At the end of each reporting period the Group determines whether there is an evidence of an impairment indicator for non-financial assets.

Where this indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets not yet available for use, the recoverable amount of the asset is estimated.

Where assets do not operate independently of other assets, the recoverable amount of the relevant cash-generating unit (CGU) is estimated.

The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in use is the present value of the future cash flows expected to be derived from an asset or CGU.

Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.

Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.

(j)

Intangible Assets

Goodwill

Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of:

i)

the consideration transferred;

ii)

any non-controlling interest; and

iii)

the acquisition date fair value of any previously held equity interest;

over the acquisition date fair value of net identifiable assets acquired.

The value of goodwill recognised on acquisition of each subsidiary in which the Group holds less than a 100% interest will depend on the method adopted in measuring the aforementioned non-controlling interest. The Group has elected to measure the non-controlling interest in the acquiree at the non-controlling interest's proportionate share of the subsidiary's identifiable net assets ('proportionate interest method').

F-26

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2

Summary of Significant Accounting Policies (cont'd)

(j)

Intangible Assets (cont'd)

Goodwill on acquisitions of subsidiaries is included in intangible assets.

Goodwill is not amortised but is tested for impairment annually and is allocated to the Group's cash generating units or groups of cash generating units, which represent the lowest level at which goodwill is monitored but where such level is not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity sold.

(k)

Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

Bank overdrafts also form part of cash equivalents for the purpose of the statement of cash flows and are presented within current liabilities on the statement of financial position.

(l)

Employee benefits

Provision is made for the Group's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be wholly settled within one year have been measured at the amounts expected to be paid when the liability is settled.

Employee benefits expected to be settled more than twelve months after the end of the reporting period have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Cashflows are discounted using market yields on national corporate bonds with terms to maturity that match the expected timing of cashflows. Changes in the measurement of the liability are recognised in profit or loss.

Employee benefits are presented as current liabilities in the statement of financial position if the Group does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date regardless of the classification of the liability for measurement purposes under IAS 19.

(m)

Adoption of new and revised accounting standards

Accounting Standards and interpretations issued by the IFRS that are not yet mandatorily applicable to the entity, together with an assessment of the potential impact of such pronouncements on the Group when adopted in future periods, are discussed below:

IFRS 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods beginning on or after 1 January 2018).

F-27

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2

Summary of Significant Accounting Policies (cont'd)

(m)

Adoption of new and revised accounting standards (cont'd)

The key changes that may affect the Group on initial application include certain simplifications to the classification of financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for expected credit loss, and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. IFRS 9 also introduces a new model for hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge policies in line with the new hedge accounting requirements of the Standard, the application of such account would largely be prospective.

IFRS 15: Revenue from contracts with customers (applicable to annual reporting periods commencing on or after 1 January 2018).

The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. To achieve this objective, IFRS 15 provides the following five-step process:

●

Identify the contract(s) with a customer;

●

Identify the performance obligations in the contract(s);

●

Determine the transaction price;

●

Allocate the transaction price to the performance obligations in the contract(s); and

●

Recognise revenue when (or as) the performance obligations are satisfied.

IFRS 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).

When effective, this Standard will replace the current accounting requirements applicable to leases with a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

F-28

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2

Summary of Significant Accounting Policies (cont'd)

(m)

Adoption of new and revised accounting standards (cont'd)

A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. A lessee measures right-of-use assets similarly to other non-financial assets (such as property, plant and equipment) and lease liabilities similarly to other financial liabilities. As a consequence, a lessee recognises depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the statement of cash flows applying IAS 7 Statement of Cash Flows.

3

Critical Accounting Estimates and Judgments

The directors make estimates and judgements during the preparation of these financial statements regarding assumptions about current and future events affecting transactions and balances.

These estimates and judgements are based on the best information available at the time of preparing the financial statements, however as additional information is known then the actual results may differ from the estimates.

Key estimates - impairment of goodwill

In accordance with IAS 36 Impairment of Assets, the Group is required to estimate the recoverable amount of goodwill at each reporting period.

Impairment testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at an appropriate rate and using a terminal value to incorporate expectations of growth thereafter.

The Group’s review includes the key assumptions related to sensitivity in the cash flow projections which have been outlined at Note 13.

Key judgements - provision for impairment of receivables

The receivables at reporting date have been reviewed to determine whether there is any objective evidence that any of the receivables are impaired. An impairment provision is included for any receivable where the entire balance is not considered collectible. The impairment provision is based on the best information at the reporting date.

Key judgments - taxes

Deferred tax assets

Determining income tax provisions involves judgment on the tax treatment of certain transactions. Deferred tax is recognised on tax losses not yet used and on temporary differences where it is probable that there will be taxable revenue against which these can be offset. Management has made judgments as to the probability of future taxable revenues being generated against which tax losses will be available for offset based on budgets, current and future expected economic conditions.

F-29

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

4

Revenue and Other Income

Sales revenue

- sale of goods
35,439,263 39,595,734

Other revenue

- Other income
379,266 600,643

- Interest revenue
42,526 30,422

421,792 631,065

35,861,055 40,226,799

5

Result for the Year

Cost of sales

- Material costs
14,535,471 18,206,869

- Labour costs
15,088,787 15,202,278

- Operational overheads
1,182,494 1,218,345

- Depreciation and amortisation
380,740 429,748

- Occupancy costs
464,345 366,912

31,651,837 35,424,152

Finance costs

- Interest on notes
1,853,994 1,471,657

- Bank charges
54,357 74,929

- Other interest expense
96,016 85,461

2,004,367 1,632,047

Occupancy costs

- Occupancy costs
382,659 417,559

- Repairs and maintenance expense
44,701 17,870

427,360 435,429

Administration expenses

- Employee benefits cost
2,437,516 2,277,654

- Administration, professional and management fees
139,140 396,310

- Bank charges
12,257 11,845

- Insurance expense
267,403 331,440

- Other expenses
494,941 371,405

- Depreciation and amortisation
208,809 48,330

- Repairs and maintenance expense
116,821 115,024

- Travel expenses
56,519 96,850

- Loss on disposal of fixed assets
91,227 (5,348 )

3,824,633 3,643,510

F-30

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

6

Income Tax Expense

(a)

The major components of tax expense (income) comprise:

Current tax expense
158,922 65,914

Deferred tax expense
134,275 (72,960 )

293,197 (7,046 )

(b)

Reconciliation of income tax to accounting profit:

Profit
(2,363,625 ) (2,378,208 )

Tax
30 % 30 %

(709,088 ) (713,462 )

Add/(less) tax effect of:

- tax losses not brought to account/(recouped)
793,413 385,251

- non-deductible impairment expenses
- 377,467

- non-deductible other expenses
122,740 (119,796 )

- share of net profits of associates
86,132 63,494

Income tax expense
293,197 (7,046 )

7

Discontinued Operations

On 4 March 2015, the Group placed Generator and Power Station Services Pty Limited (subsidiary entity) into External Administration and therefore discontinuing its operations in this business segment.

(a)

Result for the year

Revenue
- 5,429,243

Expenses
- (5,889,900 )

Operating income
- (460,657 )

Finance costs
- (13,632 )

Loss for the year attributable to discontinued operations
- (474,289 )

(b)Net cash flows

Net cash inflows/(outflows) from operating activities
- 93,668

Net cash inflows/(outflows) from investing activities
- (61,329 )

Net cash inflows/(outflows) from financing activities
- (32,790 )

Net cash increase in cash generated by the discontinued operations
- (451 )

F-31

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

8

Operating Segments

(a)

Accounting policies adopted

Unless stated below, all amounts reported to the Board of Directors, being the chief operating decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

(b)

Inter-segment transactions

An internally determined transfer price is set for all inter-entity sales. This price is reset quarterly and is based on what would be realised in the event the sale was made to an external party at arm's-length. All such transactions are eliminated on consolidation of the Group's financial statements.

Corporate charges are allocated to reporting segments based on the segments' overall proportion of revenue generation within the Group. The Board of Directors believes this is representative of likely consumption of head office expenditure that should be used in assessing segment performance and cost recoveries.

Inter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates.

F-32

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

8

Operating Segments (cont'd)

(c)

Segment performance

J.A. Martin Electrical Pty

Limited

Electrical Engineering Group Pty Limited

Elimination

Total

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

REVENUE

Sales revenue
25,252,736 27,940,223 10,186,527 11,655,511 - - 35,439,263 39,595,734

Interest revenue
21,726 14,987 20,800 15,435 - - 42,526 30,422

Other revenue
6,989 190,518 27,820 42,724 344,457 367,401 379,266 600,643

Total segment revenue
25,281,451 28,145,728 10,235,147 11,713,670 344,457 367,401 35,861,055 40,226,799

Segment operating profit
783,233 163,888 (1,087,191 ) 706,019 (2,352,864 ) (3,241,069 ) (2,656,822 ) (2,371,162 )

F-33

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

8

Operating Segments (cont'd)

(d)

Segment assets

J.A. Martin Electrical Pty

Limited

Electrical Engineering Group Pty Limited

Elimination

Total

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

Cash
957,139 1,490,011 834,958 587,193 59,957 56,488 1,852,054 2,133,692

Receivables
5,398,077 4,745,932 1,306,535 1,376,696 346,815 378,036 7,051,427 6,500,664

Inventories
405,043 (31,498 ) 70,497 452,505 - - 475,540 421,007

Plant and equipment
901,777 1,107,594 906,316 961,724 2,739 44,688 1,810,832 2,114,006

Intangible assets
8,666,400 8,666,400 3,455,745 3,455,745 285,302 285,302 12,407,447 12,407,447

Other assets
508,967 437,511 909,793 960,706 5,835 312,939 1,424,595 1,711,156

Total segment assets
16,837,403 16,415,950 7,483,844 7,794,569 700,648 1,077,453 25,021,895 25,287,972

(e)

Segment liabilities

J.A. Martin Electrical Pty

Limited

Electrical Engineering Group Pty Limited

Elimination

Total

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

2016

$

2015

$

Payables
3,778,665 3,607,486 7,559,300 9,190,924 (7,768,664 ) (9,421,298 ) 3,569,301 3,377,112

Borrowings
281,632 376,084 94,213 22,517 22,390,727 20,440,717 22,766,572 20,839,318

Employee benefits
1,307,782 1,201,254 665,325 544,632 5,203 22,042 1,978,310 1,767,928

Other liabilities
118,891 63,926 7,922 9,535 7,568 - 134,381 73,461

Total segment liabilities
5,486,970 5,248,750 8,326,760 9,767,608 14,634,834 11,041,461 28,448,564 26,057,819

F-34

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

9

Cash and cash equivalents

Cash at bank and in hand
1,852,054 2,133,692

10

Trade and other receivables

CURRENT

Trade receivables
6,827,645 6,276,882

Related party receivables
223,782 223,782

7,051,427 6,500,664

11

Inventories

CURRENT

Stock on hand
417,223 332,401

Work in progress
58,317 88,606

475,540 421,007

12

Property, plant and equipment

Leasehold improvements, at cost
196,385 202,140

Accumulated depreciation
(37,880 ) (26,662 )

158,505 175,478

Plant and equipment, at cost
1,110,295 1,213,864

Accumulated depreciation
(594,630 ) (511,178 )

515,665 702,686

Furniture, fixtures and fittings, at cost
14,617 79,784

Accumulated depreciation
(8,377 ) (51,955 )

6,240 27,829

Motor vehicles, at cost
1,954,234 1,847,316

Accumulated depreciation
(1,165,297 ) (979,336 )

788,937 867,980

Computer equipment, at cost
644,780 734,864

Accumulated depreciation
(303,295 ) (394,831 )

341,485 340,033

1,810,832 2,114,006

F-35

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

12

Property, plant and equipment (cont'd)

(a)

Movements in carrying amounts of property, plant and equipment

31 March 2015

Leasehold

Improvements

$

Plant and

Equipment

$

Furniture and

Fittings

$

Motor

Vehicles

$

Computer

Equipment

$

Total

$

Opening balance
291,178 938,653 64,082 1,201,197 462,419 2,957,529

Additions
22,105 151,748 2,032 207,473 62,132 445,490

Disposals
- (2,336 ) - (20,384 ) - (22,720 )

Depreciation expense
(6,162 ) (127,712 ) (7,030 ) (252,763 ) (84,411 ) (478,078 )

Discontinued operations
(131,643 ) (257,667 ) (31,255 ) (267,543 ) (100,107 ) (788,215 )

Closing balance
175,478 702,686 27,829 867,980 340,033 2,114,006

Leasehold

Improvements

$

Plant and

Equipment

$

Furniture and

Fittings

$

Motor

Vehicles

$

Computer

Equipment

$

Total

$

31 March 2016

Opening balance
175,478 702,686 27,829 867,980 340,033 2,114,006

Additions
5,930 40,668 - 211,792 161,528 419,918

Disposals
(8,479 ) (44,731 ) (18,164 ) (37,148 ) (25,021 ) (133,543 )

Depreciation expense
(14,424 ) (182,958 ) (3,425 ) (253,687 ) (135,055 ) (589,549 )

Closing balance
158,505 515,665 6,240 788,937 341,485 1,810,832

13

Intangible Assets

Goodwill

At cost
17,777,447 17,777,447

Accumulated impairment losses
(5,370,000 ) (5,370,000 )

Total Intangibles
12,407,447 12,407,447

Impairment tests for goodwill

For the purpose of impairment testing, goodwill is allocated to cash-generating units which are based on the Group's operating divisions. The aggregate carrying amount of goodwill allocated to each CGU is:

J.A. Martin Electrical Pty Limited
8,666,400 8,666,400

Electrical Engineering Group Pty Limited
3,741,047 3,741,047

12,407,447 12,407,447

F-36

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

13

Intangible Assets (cont'd)

Value-in-use assumptions

The recoverable amount of each CGU, or where applicable, groups of CGUs is determined based on value-in-use (VIU) calculations for continuing operations. The VIU calculations use net cash-flow projections for the financial year ending 31 March 2017 and 2018 and management’s estimates of the growth in cash-flow projections for the subsequent three years. After the fifth year, a terminal value of the CGU, is determined and discounted back to its present value.

The pre-tax discount rates used were determined by management, and reflect the appropriate cost of capital for that CGU, adjusted for risks specific to the CGU such as the specialised service line and geographical region from which the cash-flows of that CGU will be derived.

Growth assumptions have been based on management’s approved financial forecasts for the financial years ending 31 March 2017 and 2018 and a comparison of growth in earnings over the previous two financial years as a basis of whether the average growth rate applied is reasonable.

The assumptions below have been used to analyse each CGU:

Average

Growth Rate

%

Discount Rate

%

J.A. Martin Electrical Pty Limited
5.00 13.40

Electrical Engineering Group Pty Limited
5.00 13.40

Sensitivity to change of assumptions

With regard to the assessment of the value-in-use of the CGU's, any material negative movement in the above mentioned inputs would have a material impact on value-in-use calculations and the carrying value of goodwill.

14

Trade and other payables

CURRENT

Trade payables
2,837,940 2,668,703

GST payable
206,422 169,715

Sundry payables and accrued expenses
524,939 538,694

3,569,301 3,377,112

F-37

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

15

Borrowings

CURRENT

APG loan

15(a)
1,384,605 1,288,589

Lease liability secured

15(b)
185,451 250,806

1,570,056 1,539,395

NON-CURRENT

Lease liability secured

15(b)
190,394 147,795

Notes

15(c)
21,006,122 19,152,128

21,196,516 19,299,923

(a)

APG loan

The APG loans are deemed unsecured, with the lender ranking behind secured creditors but equally with unsecured creditors in the event of winding down the Group.

(b)

Finance lease liabilities

Leased liabilities are secured by the underlying leased assets.

(c)

Notes

On 1 June 2013 the Company issued 2,473,367 Notes for consideration totalling $17,313,569.

The 2,473,367 Notes issued have a face value of $7.00 per note, mature on 30 June 2018 with interest payable to 30 June 2015 at 8.5% per annum, and interest payable from 1 July 2016 at 11.4% per annum, with interest on unpaid amounts increased by 2.0% per annum.

If trigger event such as a change of control event, a listing event or a disposal of substantially all of Company’s business has occurred the Company must redeem the Notes. The redemption amount depends on the proceeds from the trigger event and may exceed the face value of the Notes.

The Company must ensure that gross debt to EBITDA ratio does not exceed prescribed limits while the Notes are outstanding. The Company was in compliance with these requirements at the reporting date.

The Notes are deemed unsecured, with the lender ranking behind secured creditors but equally with unsecured creditors in the event of winding down the Group.

16

Employee Benefits

Current liabilities

Provision for employee benefits
1,392,335 1,306,908

Long service leave
302,150 259,529

1,694,485 1,566,437

F-38

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

16

Employee Benefits (cont'd)

Non-current liabilities

Long service leave
283,825 201,491

17

Issued Capital

12,697,547 (2015: 12,697,547) Ordinary shares
12,697,547 12,697,547

2,473,367 (2015: 2,473,367) Preference shares
7,420,101 7,420,101

20,117,648 20,117,648

(a)

Ordinary shares

The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company. On a show of hands at meetings of the Company, each holder of ordinary shares has one vote in person or by proxy, and upon a poll each share is entitled to one vote.

The Company does not have authorised capital or par value in respect of its shares.

(b)

Convertible preference shares

On 1 June 2013 the Company issued 2,473,367 Convertible Preference Shares for consideration totalling $7,420,102. The 2,473,367 Convertible Preference Shares issued have an issue price of $3.00 per share and mature on 30 June 2018 .

The holders of Convertible Preference Shares are entitled to dividends at 8.5% per annum until 30 June 2015 and at 11.4% per annum from 1 July 2016 subject to the directors of the Company, at their discretion, determining the dividend to be payable. If a dividend has not been paid the Company may not make any payments in relation to ordinary shares and may not undertake any capital expenditure to expand its operations.

At maturity or if a trigger event such as a change of control event, a listing event or a disposal of substantially all of Company’s business has occurred the Company can choose to redeem Convertible Preference Shares or convert them into ordinary shares. If the redemption option is chosen the redemption amount depends on the proceeds from the trigger event and may exceed the face value of the Convertible Preference Shares. In case of conversion, each Convertible Preference Share converts into 30 ordinary shares.

Convertible Preference Shares are subordinated to all creditors of the Company, rank equally amongst themselves and rank in priority to ordinary shares.

The holders of redeemable preference share are entitled to receive dividends. Redeemable preference shares carry the right to vote. All shares rank equally with regard to the Company’s residual assets, except that holders of redeemable preference shares participate only to the extent of the fair value of the shares.

(c)

Capital Management

The Group’s capital comprises notes, preference shares and ordinary shares. Capital of the Group is managed in order to achieve the outcomes of investors.

There are no externally imposed capital requirements.

F-39

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

17

Issued Capital (cont'd)

(c)

Capital Management (cont'd)

The Group monitors capital through the gearing ratio, which is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is defined as equity per the statement of financial position plus net debt.

18

Capital and Leasing Commitments

(a)

Finance Leases

Minimum lease payments:

- not later than one year
199,453 268,222

- between one year and five years
201,021 159,294

Minimum lease payments
400,474 427,516

Less: finance changes
(24,629 ) (28,915 )

Present value of minimum lease payments
375,845 398,601

Finance leases are in place for motor vehicles and normally have a term between 3 and 5 years. The ownership of the asset transfers to the Group at the completion of the lease period.

(b)

Contracted Commitments

The Group has no contract commitments as at 31 March 2016 (2015: None).

19

Financial Risk Management

The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk.

The Group's financial instruments consist mainly of deposits with banks, accounts receivable and payable, bank loans and overdrafts, loans to and from subsidiaries, and notes.

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

Financial Assets

Cash and cash equivalents
1,852,054 2,133,692

Trade and other receivables
6,827,645 6,276,882

Total financial assets
8,679,699 8,410,574

Financial Liabilities

Financial liabilities at amortised cost

- Trade and other payables
3,569,301 3,377,112

- Borrowings
22,766,572 20,839,318

Total financial liabilities
26,335,873 24,216,430

F-40

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

19

Financial Risk Management (cont'd)

Specific financial risk exposures and management

The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk, foreign currency risk and equity price risk.

Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:

●

preparing forward-looking cash flow analysis in relation to its operational, investing and financial activities which are monitored on a monthly basis;

●

monitoring undrawn credit facilities;

●

maintaining a reputable credit profile;

●

managing credit risk related to financial assets; and

●

comparing the maturity profile of financial liabilities with the realisation profile of financial assets.

F-41

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

19

Financial Risk Management (cont'd)

Liquidity risk (cont'd)

The Group‘s liabilities have contractual maturities which are summarised below:

Within 1 year

1 to 5 years

Total

2016 2015 2016 2015 2016

$ $ $ $ $ 2015

Cash
1,852,054 2,133,692 - - 1,852,054 2,133,692

Receivables
7,051,427 6,500,664 - - 7,051,427 6,500,664

Payables
(3,569,301 ) (3,377,112 ) - - (3,569,301 ) (3,377,112 )

Interest bearing loans
(1,570,056 ) (1,539,395 ) (21,196,516 ) (19,299,923 ) (22,766,572 ) (20,839,318 )

Total
3,764,124 3,717,849 (21,196,516 ) (19,299,923 ) (17,432,392 ) (15,582,074 )

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the market prices.

(i) Interest rate risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.

The following table illustrates sensitivities tot the Group's exposures to changes in interest rates. The table indicates the impact on how cash and interest bearing loan values reported at balance date would have been affected by changes in the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other variables.

2016

2015

+1.00%
-1.00%
+1.00%
-1.00%

$ $ $ $

Cash and cash equivalents
18,521 (18,521 ) 21,337 (21,337 )

Interest bearing loans
(227,666 ) 227,666 (208,393 ) 208,393

Credit risk

Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group and arises principally from the Group's receivables.

It is the Group's policy that all customers who wish to trade on credit terms undergo a credit assessment process which takes into account the customer's financial position, past experience and other factors. Credit limits are then set based on ratings in accordance with the limits set by the Board of Directors, these limits are reviewed on a regular basis. In addition, receivable balances are monitored on an ongoing basis. The Group's credit management procedures has resulted in the Group's experiencing no bad debts.

F-42

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

20

Tax assets and liabilities

(a)      Current Tax

Income tax payable/(receivable)
126,834 65,914

(b)     Recognised deferred tax assets and liabilities

ASSETS

Deferred tax assets
1,246,951 1,271,780

LIABILITIES

Deferred tax liabilities
7,547 7,547

(c)      Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following:

Revenue losses (at 30%)
782,170 292,392

Capital losses (at 30%)
375,684 375,684

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therein.

21

Dividends

The following dividends were declared and paid:

Final franked preference share dividend
- 60,850

22

Interests in other entities

(a)     Composition of the Group

Principal place

of business

Percentage

Owned (%)*

2016

Percentage

Owned (%)*

2015

          Subsidiaries:

          Aevitas Holdings Pty Limited

Australia
100 100

          Subsidiaries of Aevitas Holdings Pty Limited

          J.A. Martin Electrical Pty Limited

Australia
85 85

          Electrical Engineering Group Pty Limited

Australia
100 100

          Subsidiaries of Electrical Engineering Group Pty Ltd

          Kenshaw Electrical Pty Limited

Australia
100 100

*The percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries.

F-43

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

22

Interests in other entities (cont'd)

(b)

Subsidiaries with material non-controlling interests

2016

Name of subsidiary

J.A. Martin

Electrical Pty

Limited

Generator

and Power

Station

Services Pty

Limited

% ownership held by NCI
15 -

Profit / loss allocated to NCI
106,355 -

Accumulated NCI of subsidiary
1,618,096 -

Summarised statement of financial position

Current assets
1,022,325 -

Non-current assets
1,525,488 -

Current liabilities
593,873 -

Non-current liabilities
50,433 -

Net assets
1,903,507 -

Summarised statement of profit or loss and other comprehensive income

Revenue
3,882,218 -

Profit / (loss)
106,355 -

Total comprehensive income
106,355 -

Summarised statement of cash flows

Cash flows from operating activities
(40,720 ) -

Cash flows from investing activities
(875 ) -

Cash flows from financing activities
(38,336 ) -

Net increase / (decrease) in cash
(79,931 ) -

F-44

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

22

Interests in other entities (cont'd)

(b)

Subsidiaries with material non-controlling interests (cont'd)

2015

Name of subsidiary

J.A. Martin

Electrical Pty

Limited

Generator

and Power

Station

Services Pty

Limited

% ownership held by NCI
15 20

Profit / loss allocated to NCI
37,184 (66,400 )

Accumulated NCI of subsidiary
1,511,741 -

Dividends paid to NCI
(18,000 ) -

Summarised statement of financial position

Current assets
940,723 -

Non-current assets
1,461,450 -

Current liabilities
572,801 -

Non-current liabilities
43,350 -

Net assets
1,786,022 -

Summarised statement of profit or loss and other comprehensive income

Revenue
4,222,810 1,085,849

Profit / (loss)
37,184 (66,400 )

Total comprehensive income
37,184 (66,400 )

Summarised statement of cash flows

Cash flows from operating activities
46,442 18,734

Cash flows from investing activities
(5,865 ) (12,266 )

Cash flows from financing activities
(48,611 ) (6,558 )

Net increase / (decrease) in cash
(8,034 ) (90 )

F-45

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

22

Interests in other entities (cont'd)

(c)

Equity accounted investments

The Group has a 26.9% interest in an associate entity, VivoPower Australia, which is domiciled in Australia. The investment in this entity is accounted for using the equity accounting method. Due to losses made by the entity, equity accounting has been suspended and the investment has been recorded at zero.

The carrying value of the equity accounted investment as at 31 March 2016 is $Nil (31 March 2015: $287,105).

The unrecorded share of net loss on the equity accounted investment as at 31 March 2016 is $212,758 (31 March 2015: $Nil). The cumulative unrecorded share of net loss as at 31 March 2016 is $212,758.

For the year ended 31 March 2016, the Group received $226,769 revenue from sales resource fees recognised at cost (31 March 2015: $55,606) recognised through Other Income.

23

Contingencies

In the opinion of the Directors, the Company did not have any contingencies at 31 March 2016 (31 March 2015: None).

24

Related Parties

Key management personnel

Short term employee benefits
543,094 555,198

Post-employment benefits
49,957 50,356

593,051 605,554

Aggregate information regarding directors and executives’ compensation is provided in the compensation note above. Apart from the details disclosed in this note, no director has entered into a material contract with the Group since the end of the previous financial year and there were no material contracts involving directors’ interests existing at year-end.

Key Management Personnel and Related Party Transactions

A number of key management persons, or their related parties, may hold positions in other entities that result in them having control or joint control over the financial and operating policies of those entities.

Any transactions during the year between the Group and Key Management Personnel, their controlled entities or other related parties are undertaken on terms and conditions no more favourable than those available, or which might reasonably be expected to be available, on similar transactions with non-key management personnel related entities or other related parties, on an arm’s length basis.

F-46

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

24

Related Parties (cont'd)

Key Management Personnel and Related Party Transactions (cont'd)

The aggregate value of transactions relating to key management personnel, entities over which they have control or joint control and other related parties were as follows:

Expense transactions

Key management personnel

Key management personnel

Reimbursement of expenses

15,557

4,149

Other related parties

Arowana International Limited (a)

Reimbursement of expenses

4,680

8,727

Revenue transactions

Other related parties

VivoPower Pty Ltd (b)

Fee for sales resource provided

226,769

55,606

Payables balance at balance date

The aggregate value of payables balance at balance date relating to key management personnel, entities over which they have control or joint control and other related parties were as follows:

NIL

Receivables balance at balance date

The aggregate value of receivables balance at balance date relating to key management personnel, entities over which they have control or joint control and other related parties were as follows:

VivoPower Pty Ltd (b) - 20,334

Details of related parties

(a)

Entity is a holder of convertible preference shares in the parent company of the Group and is the parent company of the Associate referred to at (b) below.

(b)

Entity is an equity accounted investment - refer Note 22(c).

F-47

Aevitas Group Limited and its controlled entities

ABN: 59 162 624 599

Notes to the Financial Statements

2016

$

2015

$

25

Cash Flow Information

(a)

Reconciliation of result for the year to cashflows from operating activities

Profit for the year
(2,656,822 ) (2,371,162 )

Non-cash flows in profit:

- depreciation
589,549 478,078

- accrued finance costs
1,950,010 1,413,519

- net (profit)/loss on disposal of property, plant and equipment
91,227 (5,378 )

- write-downs to recoverable amount
- 1,258,224

Share of associated companies net loss after income tax
287,105 211,645

Changes in assets and liabilities:

- (increase)/decrease in trade and other receivables
(550,763 ) (95,302 )

- (increase)/decrease in inventories
(54,533 ) 168,891

- (increase)/decrease in deferred tax receivable
24,829 32,894

- (increase)/decrease in other assets
(25,373 ) 98,176

- increase/(decrease) in trade and other payables
192,189 (1,147,596 )

- increase/(decrease) in income taxes payable
60,920 159,944

- increase/(decrease) in deferred taxes payable
- (82,364 )

- increase/(decrease) in employee benefits
210,382 (138,315 )

Cashflow from operations
118,720 (18,746 )

(b)Non-cash financing and investing activities

Acquisition of assets by means of finance leases
196,520 188,861

26

Events Occurring After the Reporting Date

On 27 May 2016, Aevitas Holdings Pty Limited acquired the remaining 15% shareholding of J.A. Martin Electrical Pty Limited from non-controlling shareholders. To facilitate this acquisition, the Group has acquired additional debt funding equal to the purchase price.

In June 2016, the Group adopted the new business name, and commenced trading as, Aevitas Group.

On 21 July 2016, the Company sold 519,527 shares in VivoPower Pty Limited to Arowana Energy Holdings Pty Limited. As a result the Company's shareholding in VivoPower Pty Limited has reduced from 26.88% to 19.88%.

Except for the above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

27

Company Details

The registered office of and principal place of business of the company is:

Aevitas Group Limited

Level 11, 153 Walker Street

North Sydney, NSW, 2060

F-48

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Aevitas Group Limited

We have audited the accompanying statement of financial position of Aevitas Group Limited and its controlled entities (the “Group”) as at 31 March 2016 and 2015, and the related statement of profit of loss and other comprehensive income, statement of changes in equity and statement of cash flows for each of the years ended 31 March 2016 and 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Group as of 31 March 2016 and 2015, and the results of their operations and their cash flows for each of the years ended 31 March 2016 and 2015 in conformity with International Financial Reporting Standards issued by the International Accounting Standards Board.

PKF

CLAYTON HICKEY

Chartered Accountants

Partner

PCAOB registered

Newcastle

Dated: 5 August 2016

F-49

VivoPower Pty Limited and Controlled Entities

Financial Report

31 March 2016

VIVOPOWER PTY LIMITED

ACN 601 157 680

AND CONTROLLED ENTITIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016 AND THE PERIOD ENDED 31 MARCH 2015

F-50

VivoPower Pty Limited and Controlled Entities

Table of Contents

31 March 2016

Table of Contents

Consolidated Statement of Profit or Loss and Other Comprehensive Income

F-52

Consolidated Statement of Financial Position

F-53

Consolidated Statement of Changes in Equity

F-54

Consolidated Statement of Cash Flows

F-55

Notes to the Consolidated Financial Statements

F-56

Report of Independent Registered Public Accounting Firm

F-77

F-51

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Consolidated

Year ended

Consolidated

Period ended

Note
31 March 2016

31 March 2015

$ $

Sales Revenue
5 81,340 614

Cost of Sales
6 (15,485 ) -

Gross Profit
65,855 614

Other Income
5 392,765 41,983

Sales Expenses
7 (228,758 ) (56,847 )

Employee Benefits expense
(445,850 ) (226,830 )

Occupancy
(39,852 ) (11,762 )

Consulting and Professional Fees
8 (850,025 ) (82,767 )

Information and Communications
(21,930 ) (10,104 )

Depreciation and Amortisation
(2,431 ) (361 )

Philippines Costs
9 (20,472 ) (115,674 )

Finance Costs
10 (35,578 ) (371 )

Other Expenses
11 (363,293 ) (68,320 )

Loss before income tax
(1,549,569 ) (530,439 )

Income tax benefit
12 6,305 -

Loss for the period
(1,543,264 ) (530,439 )

Other comprehensive income
- -

Total comprehensive loss for the period
(1,543,264 ) (530,439 )

Loss attributable to:

Equity holders of the parent
(1,543,264 ) (530,439 )

Total comprehensive loss for the period
(1,543,264 ) (530,439 )

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying Notes.

F-52

Consolidated Statement of Financial Position

Consolidated

As at 31.03.16

Consolidated As at

As at 31.03.15

Note 31 March 2016 31 March 2015

$ $

Current Assets

Cash and Cash Equivalents
13 877,036 2,434,539

Trade and Other Receivables
14 81,345 5,220

Other Current Financial Assets
17 66,584

Other Current Assets
15 160,665 17,740

Total Current Assets
1,185,630 2,457,499

Non-Current Assets

Property, Plant and Equipment
16 1,243,498 52,247

Other Non-Current Financial Assets
17 656,851 300,000

Intangible Assets
18 1,090,076 742

Deferred Tax Asset
6,508 -

Total Non-Current Assets
2,996,933 352,989

Total Assets
4,182,563 2,810,488

Current Liabilities

Trade and Other Payables
19 87,920 78,489

Other Current Liabilities
21 62,706 92,436

Total Current Liabilities
150,626 170,925

Non-Current Liabilities

Borrowings
20 1,346,872 -

Provisions
203 -

Total Non-Current Liabilities
1,347,075 -

Total Liabilities
1,497,701 170,925

Net Assets
2,684,862 2,639,563

Equity

Contributed Equity
22 4,753,804 3,170,002

Reserve
23 4,761 -

Accumulated losses
(2,073,703 ) (530,439 )

Total Equity
2,684,862 2,639,563

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying Notes.

F-53

Consolidated Statement of Changes in Equity

31 March 2015

Consolidated

Contributed Equity

FX Translation

Reserve

Retained Earnings

Total Equity

Balance on incorporation 8 August 2014
- - - -

(loss) for the period
- - (530,439 ) (530,439 )

Total comprehensive income for the period
- - (530,439 ) (530,439 )

Shares issued during the period (net of transaction costs)
3,170,002 - - 3,170,002

Balance at the end of the period (31 March 2015)
3,170,002 - (530,439 ) 2,639,563

31 March 2016

Consolidated

Contributed Equity

FX Translation

Reserve

Retained Earnings

Total Equity

Balance at the beginning of the period (1 April 2015)
3,170,002 - (530,439 ) 2,639,563

(loss) for the year
- - (1,543,264 ) (1,543,264 )

Total comprehensive income for the year
- - (1,543,264 ) (1,543,264 )

Shares issued during the year (net of transaction costs)
1,583,802 - - 1,583,802

FX translation reserve
- 4,761 - 4,761

Balance at the end of the year (31 March 2016)
4,753,804 4,761 (2,073,703 ) 2,684,862

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

F-54

Consolidated Statement of Cash Flows

Consolidated

Note
Year ended

31 March 2016

Period ended

31 March 2015

$ $

Cash Flows from Operating Activities

Receipts from customers (inclusive of Goods and Services Tax)
219,958 614

Payments to suppliers and employees (inclusive of Goods and Services Tax)
(2,135,802 ) (419,862 )

Interest and other costs of finance paid
(29,441 ) (371 )

Interest received
52,419 36,763

Income taxes paid
- -

Net cash provided by/ (used in) operating activities
13 (1,892,866 ) (382,856 )

Cash flows from Investing Activities

Payments for property, plant and equipment
(1,209,181 ) (52,608 )

Payments for intangibles
(1,025,129 ) -

Payments for purchase of business, net of cash acquired
143,836 -

Proceeds from disposal of property, plant and equipment
- -

Deposits paid
(4,050 ) -

Investment in related entities
(1,423 ) -

Loans to related parties
(499,364 ) (300,000 )

Net cash provided by/ (used in) investing activities
(2,595,311 ) (352,608 )

Cash flows from Financing Activities

Proceeds from issuing shares or other equity instruments
1,583,802 3,170,002

Proceeds from borrowings
1,346,872 -

Repayments of finance lease borrowings
- -

Net cash provided by/ (used in) financing activities
2,930,674 3,170,002

Net Movement in Cash and Cash Equivalent s Held
(1,557,503 ) 2,434,538

Cash and Cash Equivalent At The Beginning Of The Financial Period
13 2,434,539 -

Cash and Cash Equivalent At The End Of The Financial Period
13 877,036 2,434,538

The above Consolidated Statement of Cash Flow should be read in conjunction with the accompanying Notes .

F-55

1.

General Information

The consolidated financial statements of VivoPower Pty Limited (the Company) and its subsidiaries (collectively the Group) were authorised for issue in accordance with a resolution of the Directors on 18 July 2016. VivoPower Pty Limited is a for profit proprietary limited company limited by shares incorporated in Australia.

The address of its principal place of business is:

Level 11

153 Walker Street

NORTH SYDNEY NSW

During the period, the Company`s principal activities were the supply of electricity to customers through the use of solar technologies. VivoPower designs, installs and maintains solar power plants through on site generation facilities.

2.

Adoption of New and Revised Accounting Standards

In the current year, the Consolidated entity has adopted all of the new and revised Standards and Interpretations issued by the IASB that are relevant to its operations and effective for the current annual reporting period. The adoption of these new and revised standards has not resulted in any significant changes to the Consolidated entity`s accounting policies or to the amounts reported for the current and prior periods.

2.1

Standards and interpretations in issue not yet adopted

At the date of authorisation of the financial statements, the standards and interpretations listed below were in issue but not yet effective. Management is currently assessing the impact on future financial reports of adopting the standards and interpretations.

Standard

Title

Application date

(reporting period

commences on or after)

Application year

ending

IFRS 9

Financial Instruments

1 January 2018

1 January 2018

IFRS 15

Revenue from Contracts with Customers

1 January 2018

1 January 2018

IFRS 16

Leases

1 January 2019

1 January 2019

3.

Significant Accounting Policies

3.1

Basis of Preparation

The financial statements, except for cash flow information, have been prepared on an accruals basis and are based on historical costs.

The financial report is presented in Australian dollars, unless otherwise noted. The amounts presented have been rounded to the nearest dollar.

F-56

3.2

Compliance with International Financial Reporting Standards (IFRS)

The financial report complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

3.3

Basis of Consolidation

The consolidated financial statements incorporate all the assets, liabilities and results of the parent, VivoPower Pty Limited, and all the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it is expected to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. A list of subsidiaries is provided in Note 24.

The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the group from the date control is obtained. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit and loss. Any investment retained is recognised at fair value.

3.4

Business Combinations

Business combinations are accounted for using the acquisition method. The consideration for each acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition related costs are expensed as incurred and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit and loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IASB 39 Financial Instruments: Recognition and Measurement , is measured at fair value with changes in fair value recognised either in profit and loss or as a change to OCI. If the contingent consideration is not within the scope of IASB 39, it is measured in accordance with the appropriate Australian Accounting Standard. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity.

3.5

Goodwill

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.

F-57

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill has been allocated to a cash generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

Changes in the ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions and do not affect the carrying value of goodwill.

3.6

Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:

●

Expected to be realised or intended to be sold or consumed in the Group’s normal operating cycle

●

Held primarily for the purpose of trading

●

Expected to be realised within twelve months after the reporting period

●

Cash or a cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

The Group classifies all other assets as non-current.

A liability is current when:

●

It is expected to be settled in the Group’s normal operating cycle

●

It is held primarily for the purpose of trading

●

It is due to be settled within twelve months after the reporting period

●

There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Group classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

3.7

Fair Value Measurement

The Group measures financial instruments such as derivatives and non-financial assets at fair value at each balance date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

●

In the principal market for the asset or liability

●

In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

F-58

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming the market participants acts in their economic best interest.

3.8

Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is received. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The Group has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all revenue arrangements, has pricing latitude and is also exposed to inventory and credit risks.

The specific recognition criteria described below must be met before revenue is recognised.

Sale of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Capacity credit revenue is recognised in the month when the benefits are derived.

Interest income

Interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument, or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income is included in interest received in the statement of profit or loss.

Other income

Other income includes fair value gains to Large-scale Generation Certificates (‘LGC’s’). These are recognised when the Group has obtained approval by the Clean Energy Regulator and title to the certificates.

All revenue is stated net of the amount of goods and services tax.

3.9

Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset (but not the legal ownership) are transferred to entities in the Group, are classified as finance leases. Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property and the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses on a straight-line basis over the lease term.

3.10

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

F-59

3.11

Employee Benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

The Group’s obligations for short-term employee benefits such as wages and sick leave and also annual leave provisions are recognized as part of other current liabilities in the statement of financial position.

3.12

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current Tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred Tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences except:

●

When the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

●

In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

●

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

●

In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

F-60

The carrying amount of deferred tax assets is reviewed at each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognised in profit or loss.

Tax Consolidation Legislation

VivoPower Pty Limited and its wholly owned Australian controlled entities have not implemented the tax consolidation legislation as at 31 March 2016.

In addition to its own current and deferred tax amounts, VivoPower Pty Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and used tax credits assumed from controlled entities in the consolidated accounts.

3.13

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at-call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown as borrowings in current liabilities on the statement of financial position.

3.14

Trade and Other Receivables

Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment.

3.15

Property, Plant and Equipment

Plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

F-61

In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognized in the statement of profit and loss.

Depreciation is calculated on a straight line basis over the estimated useful lives of the assets as follows:

●

Plant and equipment
25 years

● Solar equipment 25 years

● Furniture & computer equipment 2 to 15 years

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss when the asset is derecognised.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

3.16

Intangibles Other Than Goodwill

(a)

Trademarks

Trademarks are recognised at cost of acquisition. Trademarks are words, names, symbols or other devices used in trade to indicate the source of the product or service, and to distinguish the product or service from the source of others. They are deemed to have indefinite useful lives and are carried at cost. Trademarks are tested annually for impairment.

(b)

Large-scale Generation Certificates (LCG’s)

LCG’s represent renewable energy certificates obtained by the Group pursuant to the Renewable Energy (Electricity) Act 2000. As a scheme participant, the Group obtains the certificates (based on megawatt hours of electricity generated from renewable sources) which are registered and validated by the Australian Government (Clean Energy Regulator). The certificates are recorded at their fair value upon the approval of the megawatt hours generated giving the Group title to the certificate. The certificates are tradeable in an active market in accordance with the scheme, and fair value adjustments are made to the certificate values based on the market value of the certificates. The LGC’s are tested annually for impairment.

3.17

Trade and Other Payables

Trade and other payables represent the liabilities for goods and services received by the Group that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

3.18

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of the provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss, net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

F-62

3.19

Financial Assets

All financial assets are recognised and derecognised on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.

Financial assets are classified into the following specified category of ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Loans and Receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

The Group does not designate any interest in subsidiaries, associates or joint ventures as being subject to the requirements of Accounting Standards specifically applicable to financial instruments. For the purpose of the parent entity separate financial statements, investment in subsidiaries, associates and joint ventures are accounted for at cost.

Impairment of Financial Assets

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

Derecognition of Financial Assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

F-63

Financial risk management objectives and policies

The Group’s principal financial liabilities comprise loans and borrowings and trade and other payables. The main purpose of these financial liabilities is to finance the Group’s operations and to provide guarantees to support its operations. The Group’s principal financial assets include loans, trade and other receivables and short term deposits that derive directly from operations.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group has a variable rate on its borrowings.

3.20

Financial Liabilities and Equity Instruments Issued by the Group

Classification as debt or Equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

Other financial Liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

Derecognition of Financial Liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

3.21

Comparative Figures

Comparative figures have been adjusted to conform to changes in presentation for the current financial year where required by accounting standards or as a result of changes in accounting policy.

3.22

Goods and Services Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

●

When the GST incurred on a sale or purchase of assets or services is not payable to or recoverable from the taxation authority, in which case the GST is recognised as part of the revenue or the expense item or as part of the cost of acquisition of the asset, as applicable.

●

When receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part of operating cash flows.

F-64

3.23

Segment Reporting

Operating segments are identified, and segment information disclosed, on the basis of internal reports that are regularly provided to, or reviewed by, the Group’s chief operating decision make which, for the Group, is the Board of Directors. In this regard, the Board of Directors confirms that the Group continues to operate in one operating segment, being the supply of solar power.

4.

Critical Accounting Judgments and Key Sources of Estimation Uncertainty

In the application of the Group’s accounting policies, which are described in Note 3, the Directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

4.1

Key Sources of Estimation Uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Useful Lives of Property, Plant and Equipment

As described at 3.15 above, the Group reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period. The useful life of certain items of equipment acquired under finance lease arrangements has been determined at 25 years and the Group believes that this reflects the period in which the asset’s future economic benefits are expected to be consumed by the Group and is consistent with the rates used by other entities in the industry.

Amortisation of Purchased Solar Contracts

The Directors have assessed this intangible asset as a finite life intangible asset. Amortisation will commence on this asset once the underlying solar energy contracts are transferred for the risk and reward of the VivoPower group, and from that point will be amortised over 15 years.

Recoverability of Related Party Loans Receivable

The Directors have assessed the recoverability of loans receivable from related entities disclosed in Note 17 of the financial statements as at the date of this report. The Directors are of the view that these loans are currently recoverable, however due to restructuring activity and other potential future transactions which are currently being investigated by the Group, there is uncertainty as to whether the loans may be recoverable in the future depending on the outcome of these investigations. The Directors will continue to assess these loans for indicators of impairment, and should there be any potential impairment identified, the loan balances will be provided against or written down to their recoverable amount.

F-65

5.

Revenue and Other Income

Consolidated

31 March 2016

31 March 2015

$ $

Sales revenue
81,340 614

Total revenue
81,340 614

Interest received
53,942 41,983

Philippines costs recovered
278,947 -

Large-scale generation certificates
22,934 -

Other income
42,039 -

Unrealised FX gain/(loss)
(5,097 ) -

Total other income
392,765 41,983

6.

Cost of Sales

Depreciation
14,945 -

Energy Usage
540 -

Total cost of sales
15,485 -

7.

Sales Expenses

Sales material
1,989 1,241

Sales resource (UPMG)
226,769 55,606

Total sales expenses
228,758 56,847

8.

Consulting and Professional Fees

Accounting and audit fees
25,481 25,500

Management and legal fees
53,837 56,517

Consulting fees
294,667 750

Project development fees
476,040 -

Total consulting and professional fees
850,025 82,767

9.

Philippines Costs

Philippines incorporation cost
- 28,288

Philippines operational costs
20,472 87,386

Total Philippines costs
20,472 115,674

As outlined in Note 24, the Group holds a non-controlling interest in VVP Holdings Inc, a company domiciled in the Philippines. The above costs relate to the establishment and operating of this entity.

F-66

10.

Finance Costs

Consolidated

31 March 2016

31 March 2015

$ $

Bank charges (including loan fees)
15,204 371

Interest expense
20,374 -

Total finance costs
35,578 371

11.

Other Expenses

Insurance
17,477 5,891

Advertising
263 300

Compliance costs
1,277 1,861

Energy usage
540 -

Branding & website
5,100 8,367

Travel & entertainment
62,389 42,043

Trademarks
11,218 6,302

Subscriptions
11,437 1,698

Staff training & amenities
500 1,858

Tariff entitlements
247,059 -

Withholding tax
6,351 -

Freight & Courier
222 -

Total other expenses
363,833 68,320

12.

Income Tax Expense

Numerical reconciliation of income tax (benefit) / expense to prima facie tax payable:

Profit/(Loss) before tax
(1,549,569 ) (530,439 )

Tax statutory rate at 30% (2015: 30%)
(464,871 ) (159,132 )

Tax effect of non-allowable expenses
(8,544 ) (2,985 )

Deferred tax assets not recognised
479,719 162,117

Tax benefit/(expense)
6,305 -

As at 31 March 2016, the Group has accumulated unutilised tax losses and unclaimed capital allowances of S479,719 which are available for set-off against future profits subject to the shareholders and their respective shareholdings remaining substantially the same.

No deferred tax asset relating to these unutilised tax losses and unclaimed capital allowances has been recognised in the financial statements at 31 March 2016 given uncertainty regarding the timing of future realisation.

F-67

13.

Cash and Cash Equivalents

Consolidated

31 March 2016

31 March 2015

$ $

Cash at bank
877,036 24,389

Cash fixed deposits
- 2,410,150

Total cash and cash equivalents
877,036 2,434,539

Reconciliation of loss for the year to net cash flows from operating activities

Profit/(Loss) for the year
(1,543,264 ) (530,439 )

Adjustment for :

Income tax expense(benefit) recognised in profit or loss
(6,305 ) -

Net foreign exchange loss (gain)
(5,097 ) -

Non-cash financing expenses
(6,137 ) (19 )

Depreciation and amortization of non-current assets
(17,495 ) (361 )

Renewable Energy Certificates recognised
(17,280 )

(1,595,578 ) (530,819 )

Movements in working capital

Decrease/(Increase) in trade and other receivables
(142,709 ) (5,220 )

Increase in deposits and prepaid expenses
(142,925 ) (3,421 )

Increase in investments
(1,423 ) -

Increase in provisions
203 -

Increase in other liabilities
- (255 )

(Decrease)/Increase in trade and other payables
(10,434 ) 156,859

Cash used in operations
(297,288 ) 147,963

Net cash used in operating activities
(1,892,866 ) (382,856 )

14.

Trade and Other Receivables

Trade receivables
50,877 -

Sundry debtors
30,468 5,220

Total trade and other receivables
81,345 5,220

15.

Other Current Assets

Deposits
4,050 -

Prepayments
30,888 3,421

GST receivable
125,727 14,319

Total other current assets
160,665 17,740

F-68

16.

Property, Plant and Equipment

Consolidated

31 March 2016

31 March 2015

$ $

Computer Equipment

At cost
11,132 4,739

Accumulated depreciation
(3,346 ) (361 )

7,786 4,378

Solar Panel Systems

At cost
1,250,657 47,869

Accumulated depreciation
(14,945 ) -

1,235,712 47,869

Total property, plant and equipment
1,243,498 52,247

Movement in property, plant and equipment:

Computer

Equipment

Solar Panel

Systems

Total

31 March 2015

Balance on incorporation 8 August 2014
- - -

Additions
4,739 47,869 52,608

Disposals
- - -

Depreciation Expense
(361 ) - (361 )

Balance at the end of the reporting period (31 March 2015)
4,378 47,869 52,247

31 March 2016

Balance at the beginning of the reporting period (1 April 2015)
4,378 47,869 52,247

Additions
6,393 1,202,788 1,209,181

Disposals
- - -

Depreciation Expense
(2,985 ) (14,945 ) (17,930 )

Balance at the end of the reporting period (31 March 2016)
7,786 1,235,712 1,243,498

Assets Pledged as Security

The Group has pledged certain assets to secure facilities with the ANZ Banking Group Ltd. A floating charge has been issued over the assets and contracts of Amaroo Solar FCo Pty Ltd and Amaroo Solar Pty Ltd.

F-69

17.

Other Financial Assets

Consolidated

31 March 2016

31 March 2015

$ $

Current

Related party loan – VVP Holdings Inc
39,730 -

Related party loan – VivoPower RE Solutions Inc
26,854 -

Total other current assets
66,584 -

Non-Current

Related party loan – VVP Holdings Inc
233,946 -

Related party loan – VivoPower RE Solutions Inc
421,582 -

Related party loan – VivoPower Singapore
- 300,000

Investments
1,323 -

Total other non-current assets
656,851 300,000

18.

Intangibles

Purchased solar contracts
1,016,695 -

Renewable energy certificates
17,280 -

Other intangibles
5,829 742

Patents & trademarks
8,434 -

Goodwill
41,838 -

Total intangibles
1,090,076 742

Movement in intangible assets:

Other

Intangibles

Purchased

Solar

Contracts

Patents & Trademarks

Renewable

Energy

Certificates

Goodwill

Total

31 March 2015

Balance at incorporation
- - - - - -

Additions
742 - - - - 742

Amortisation Expense
- - - - - -

Balance at the end of the reporting period (31 March 2015)
742 - - - - 742

31 March 2016

Balance at the beginning of the reporting period (1 April 2015)
742 - - - - 742

Additions
5,087 1,016,695 8,434 17,280 41,838 1,089,334

Amortisation Expense
- - - - - -

Balance at the end of the reporting period (31 March 2016)
5,829 1,016,695 8,434 17,280 41,838 1,090,076

F-70

In December 2015, the Company, entered into a Transfer Agreement with a third party whereby the Company agreed to purchase the third party’s solar contracts with customers. The consideration paid for this purchase was $1,016,695 and was recognised as ‘Purchased solar contracts’ in the Statement of Financial Position.

Business Combinations

In September 2015, VivoPower Pty Ltd acquired 100% of the share capital of VivoPower Singapore Pte Ltd for a total consideration transferred of $100 SGD. VivoPower Singapore Pte Ltd also operates in the solar power sector.

VivoPower Singapore Pte Ltd contributed revenue of $25,198 (AUD) and an operating loss of $117,966 (AUD) to the consolidated entity for the period September 2015 to 31 March 2016. If the acquisition occurred on 1 April 2015, the full year contributions would have been revenue of $31,416 (AUD) and an operating loss of $240,302 (AUD) to the consolidated entity for the period from 1 April 2015 to 31 March 2016.

The values identified in relation to the acquisition of VivoPower Singapore Pte Ltd are final as at 31 March 2016.

Details of the acquisition are as follows:

Fair value (AUD)

$

Cash and cash equivalents
143,936

Trade receivables
10,004

Prepayments
21,933

Loans receivable
609,259

Property, plant and equipment
2,067

Accounts payable
(2,148 )

Loans payable
(826,789 )

Net assets acquired
(41,738 )

Goodwill
41,838

Acquisition date fair value of total consideration transferred
100

Net cash received on acquisition
143,836

The acquiree’s carrying amounts approximated the fair values of all assets and liabilities on acquisition.

19.

Trade and Other Payables

Consolidated

31 March 2016

31 March 2015

$
$

Trade and other payables
87,920 78,489

Total trade and other payables
87,920 78,489

Trade payables are current. The average payment terms are 30 days.

20.

Borrowings

Non-Current Borrowings:

ANZ tailored commercial facility
1,346,872 -

Total non-current borrowings
1,346,872 -

F-71

The Company entered into a loan agreement with the ANZ Banking Group Ltd to fund the Amaroo Solar project in the Australian Capital Territory. The loan is interest only, at a weighted average rate of 3.35%, for 6 months post final drawdown on the facility which has not yet occurred. After that repayments will occur over the term of 11.5 years.

21.

Other Current Liabilities

Consolidated

31 March 2016

31 March 2015

$

$

Accrued expenses
58,505 78,370

Payroll liabilities
4,201 10,727

Superannuation liabilities
- 3,339

Total other current liabilities
62,706 92,436

22.

Contributed Equity

7,421,716 Fully paid Ordinary Shares (2015: 500,000)
4,753,803 3,170,000

Series A Convertible redeemable Pref Shares
- 1

Series B Redeemable Pref Shares
1 1

Total equity
4,753,804 3,170,002

Number of Shares

Share Capital

$

Balance at 31 March 2015
5,000,000 3,170,000

Issue of shares
2,421,716 1,583,802

Conversion of Series A convertible Pref Shares
100 1

Ordinary Shares at 31 March 2016
7,421,816 4,753,803

Series B Redeemable Pref Shares
100 1

Balance at 31 March 2016
7,421,916 4,753,804

Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued shares do not have a par value.

Terms and conditions of share capital

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value as noted above. On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Series A Convertible Redeemable Preference Shares

Series A Convertible Preference shares (CP Shares) holders are entitled to a dividend in respect of each dividend period of 0.5% of the issue price in respect of the initial period (being 1 January 2015 to 30 June 2015) (non-cumulative), and 5% per annum of the issue price in respect of the period from 1 July 2016. The payment of dividends are at the discretion of the Directors, and subject to Corporations Act and other regulatory requirements permitting a dividend to be paid.

F-72

CP shareholders have limited voting rights compared to ordinary shareholders, and are entitled to vote at general meetings regarding resolutions on dividends, proposed transactions impacting on share capital, significant changes to the business or winding up.

In event of a wind-up, CP shares rank above other classes of shares for distribution of assets.

CP shares may not be redeemed by the holder. Conversion (or redemption) of the CP shares occurs the earlier of the date a ‘trigger event’ (e.g. takeover bid, sale of shares or other arrangement effecting disposal of 50% or more of the Company) occurs and September 2016.

CP shares convert into ordinary shares at varying percentage rates depending on the extent of annualised EBIT achieved, between the ranges of $4 million and $7 million.

Series B Redeemable Preference Shares (LTVCP shares)

Series B Redeemable Preference Shares (Long-term value creation pool, or ‘LTVCP’ shares) are entitled to a dividend calculated at a rate of 0.05% of the issue price per annum from 1 January 2015 (non-cumulative). The payment of dividends are at the discretion of the Directors, and subject to Corporations Act and other regulatory requirements permitting a dividend to be paid.

LTVCP shareholders have no voting rights, and no rights to convert into shares or any other class of security in VivoPower Pty Ltd.

In event of a wind-up, LTVCP shares rank behind CP shares, but rank above other classes of shares for distribution of assets.

LTVCP shares may not be redeemed by the holder. Conversion (or redemption) of the LTVCP shares occurs the earlier of the date a ‘trigger event’ (e.g. takeover bid, sale of shares or other arrangement effecting disposal of 50% or more of the Company) occurs and August 2019.

LTVCP shares receive a redemption sum, calculated based on a formula factoring in the Enterprise Value of VivoPower Pty Ltd and the Aggregate Equity invested net of consolidated debt as at the calculated date.

Capital Management

Management controls the capital of the Group in order to maintain a satisfactory debt to equity ratio and to ensure that the Group can fund its operations and continue as a going concern.

There have been no changes in the capital structure or the objectives, policies, processes and strategy adopted by management to manage the capital of the Group from the previous year.

23.

Reserve

Consolidated

31 March 2016

31 March 2015

$

$

Foreign exchange translation reserve
4,761 -

Total reserve
4,761 -

24.

Subsidiaries

The subsidiaries listed below have share capital consisting of ordinary shares, which are held directly by the Group. The proportion of ownership interest held equals the voting rights held by the Group.

F-73

Details of the Company’s subsidiaries at 31 March 2016 are as follows:

Name of Subsidiary

Principal Activity

Place of

Incorporation

and Operation

Ownership and

Voting Power Held

31 March 2016

Ownership and

Voting Power Held

31 March 2015

VivoPower WA Pty Ltd

Rents solar equipment

Australia

100%

100%

Amaroo Solar TCo Pty Ltd

Dormant

Australia

100%

-

Amaroo Solar HCo Pty Ltd

Dormant

Australia

100%

-

Amaroo Solar FCo Pty Ltd

Financing

Australia

100%

-

Amaroo Solar Pty Ltd

Owns and operates the ACT solar Project

Australia

100%

-

SC TCo Pty Ltd

Dormant

Australia

100%

-

SC HCo Pty Ltd

Dormant

Australia

100%

-

SC FCo Pty Ltd

Dormant

Australia

100%

-

SC OCo Pty Ltd

Has purchased solar contracts

Australia

100%

-

VivoPower Singapore Pte Ltd

Singapore

100%

-

VVP Project 1 Pty Ltd Currently dormant Australia 100% -

VVP Project 2 Pty Ltd Currently dormant Australia 100% -

Investments in Associates

A wholly-owned subsidiary of Vivopower Pty Ltd, VivoPower Singapore Pte Ltd, holds a 40% share of VVP Holdings Inc, a company domiciled in the Philippines. VVP Holdings has investments in Vivopower Re Solutions (40%) and VivoPower Philippines (60%). The investment held by the Group in VVP Holdings balance is not currently deemed to be material.

25.

Related Party Transactions

Key Management Personnel Compensation

Consolidated

31 March 2016

31 March 2015

$

$

Short-term employee benefits
164,250 106,409

Post-employment benefits
- -

Total employee benefits
164,250 106,409

F-74

Key Management Personnel and Related Party Transactions

The aggregate value of transactions relating to key management personnel, entities over which they have control or joint control and other related parties were as follows:

31 March 2016

31 March 2015

$

$

Expense Transactions:

Key management person

Ben Tan ^{(a) (e)}

Reimbursement of expenses
119,149 39,438

Other related parties

Arowana International Limited ^(b)(e)

Reimbursement of expenses
15,072 37,990

Arowana International Limited ^(b)

Consulting fees
75,000 -

Arowana Partners Group Pty Limited ^(c)(e)

Reimbursement of expenses
7,906 -

Ubiquity Power Maintenance Group ^(d)

Sales resources
226,769 55,606

Vivopower Singapore Pte Ltd ^(d)

Fee for management services
160,332 -

Revenue Transactions:

Nil
- -

Payables balance at balance date

The aggregate value of payables balance at balance date relating to key management personnel, entities over which they have control or joint control and other related parties were as follows:

Ben Tan
2,134 -

Arowana International Limited ^(b)
1,880 3,794

Ubiquity Power Maintenance Group ^(d)
- 20,334

Receivables balance at balance date

The aggregate value of receivables balance at balance date relating to key management personnel, entities over which they have control or joint control and other related parties were as follows:

Nil
- -

F-75

Details of Related Parties

(a)

Executive Director

(b)

Ultimate parent company of the Group

(d)

Entity is a related party – a significant shareholder in the Group and provider of KMP sales resources

(e)

All reimbursement of expenses relates to occupancy costs, salaries on charged, travel expenses, etc. The expenses have been incurred by the supplier on behalf of the Group.

26.

Commitments

Consolidated

31 March 2016

31 March 2015

$

$

Office Rental

Payables – minimum lease payments:

Not later than 12 months
23,980 19,984

Between 12 months and 5 years
3,997 27,977

Later than 5 years
- -

27,977 47,960

The lease of the Group’s Osborne Park offices expires on 2 June 2017.

Amaroo Licence Fees

Payables – minimum lease payments:

Not later than 12 months
30,000 -

Between 12 months and 5 years
150,000 -

Later than 5 years
412,500 -

592,500 -

27.

Contingent Liabilities

The Group had no contingent liabilities at 31 March 2016.

28.

Remuneration of Auditors

Audit of the financial report
9,000 3,500

9,000 3,500

The auditors of the consolidated entity for both 2015 and 2016 are PKF (NS) Newcastle.

29.

Events after the Reporting Period

No matters or circumstances have arisen since the end of the financial period which significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

F-76

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of VivoPower Pty Limited

We have audited the accompanying statement of financial position of VivoPower Pty Limited and its controlled entities (the “Group”) as at 31 March 2016 and 2015, and the related statement of profit of loss and other comprehensive income, statement of changes in equity and statement of cash flows for each of the years ended 31 March 2016 and 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

PKF

CLAYTON HICKEY

Chartered Accountants

Partner

PCAOB registered

Newcastle

Dated: 22 July 2016

F-77

AROWANA INC.

Page

Condensed Balance Sheets

F-79

Condensed Statements of Operations

F-80

Condensed Statement of Changes in Shareholders’ Equity

F-81

Condensed Statements of Cash Flows

F-82

Notes to Unaudited Condensed Financial Statements

F-83

F-78

Arowana Inc.

Condensed Balance Sheets

May 31, 2016

February 29, 2016

(unaudited)

Assets

Current Assets:

Cash and cash equivalents
$ 133,063 $ 10,092

Prepaid expenses
68,312 46,785

Total Current Assets
201,375 56,877

Marketable securities held in trust
84,459,058 84,511,769

Total Assets
$ 84,660,433 $ 84,568,646

Liabilities and Shareholders' Equity

Current Liabilities:

Accounts payable and accrued expenses
$ 13,689 $ 41,756

Accounts payable - related party
91,440 61,440

Note payable - related party
130,000 -

Total Current Liabilities
235,129 103,196

Commitments

Ordinary shares, subject to possible conversion (7,786,512 and 7,785,589 shares at conversion value as May 31, 2016 and February 29, 2016, respectively)
79,425,299 79,465,445

Shareholders' Equity:

Preferred shares, $0.0001 par value; 1,000,000 authorized none issued and outstanding
- -

Ordinary shares, $0.0001 par value; 100,000,000 shares authorized; 3,072,488 and 3,073,411 issued and outstanding (excluding 7,786,512 and 7,785,589 shares subject to possible conversion) at May 31, 2016 and February 29, 2016, respectively
307 307

Additional paid in capital
5,437,531 5,397,385

Accumulated deficit
(437,833 ) (397,687 )

Total Shareholders' Equity
5,000,005 5,000,005

Total Liabilities and Shareholders' Equity
$ 84,660,433 $ 84,568,646

See accompanying notes to unaudited condensed financial statements.

F-79

Arowana Inc.

Condensed Statements of Operations

(unaudited)

For the Three Months Ended May 31,

2016

2015

EXPENSES

Operating costs
$ 61,988 $ 31,317

Operating costs - related party
30,000 8,387

TOTAL EXPENSES
(91,988 ) (39,704 )

Unrealized gain on securities held in Trust Account
6,440 -

Interest income
45,402 4,571

Net loss
$ (40,146 ) $ (35,133 )

Net loss per ordinary share - basic and diluted
$ (0.01 ) $ (0.02 )

Weighted average ordinary shares outstanding - basic and diluted
3,073,411 2,174,621

See accompanying notes to unaudited condensed financial statements.

F-80

Arowana Inc.

Condensed Statement of Changes in Shareholders’ Equity

For the Three Months Ended May 31, 2016

(unaudited)

Ordinary Shares

Additional Paid-In

Accumulated

Shareholders'

Shares

Amount

Capital

Deficit

Equity

Balance, March 1, 2016
3,073,411 $ 307 $ 5,397,385 $ (397,687 ) $ 5,000,005

Ordinary shares subject to possible conversion
(923 ) - 40,146 - 40,146

Net loss
- - - (40,146 ) (40,146 )

Balance, May 31, 2016
3,072,488 $ 307 $ 5,437,531 $ (437,833 ) $ 5,000,005

See accompanying notes to unaudited condensed financial statements.

F-81

Arowana Inc.

Condensed Statements of Cash Flows

(unaudited)

For the Three Months Ended May 31,

2016

2015

Cash Flows From Operating Activities:

Net loss
$ (40,146 ) $ (35,133 )

Adjustments to reconcile net loss to net cash used in operating activities:

Unrealized gain on securities held in Trust Account
(6,440 ) -

Interest earned on cash and securities held in Trust Account
(45,402 ) (4,571 )

Changes in operating assets and liabilities:

Prepaid expenses
(21,527 ) (23,858 )

Accounts payable and accrued expenses
(28,067 ) 609

Accounts payable - related party
30,000 -

Net cash used in operating activities
(111,582 ) (62,953 )

Cash Flows From Investing Activities:

Proceeds from maturity of securities held in Trust Account
84,560,000 -

Purchases of securities held in Trust Account
(84,455,447 ) (84,456,000 )

Net cash provided by (used in) investing activities
104,553 (84,456,000 )

Cash Flows From Financing Activities:

Proceeds from public offering, net of offering costs
- 80,021,186

Proceeds from insider units
- 5,090,000

Proceeds from related party advances
- 139,190

Proceeds from note payable - related party
130,000 -

Payments of deferred offering costs
- (145,174 )

Net cash provided by financing activities
130,000 85,105,202

Net Change in Cash and Cash Equivalents
122,971 586,249

Cash and Cash Equivalents - Beginning
10,092 29,319

Cash and Cash Equivalents - Ending
$ 133,063 $ 615,568

Supplemental disclosure of non-cash investing and financing activities:

Ordinary shares subject to possible conversion
$ 40,146 $ 79,788,888

Reclassification of deferred offering costs to share issuance costs
$ - $ 273,050

See accompanying notes to unaudited condensed financial statements.

F-82

Arowana Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 1 - Organization and Plan of Business Operations, Liquidity and Going Concern

Arowana Inc. (the “Company”) was incorporated in the Cayman Islands on October 1, 2014 as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities (a “Business Combination”).

At May 31, 2016, the Company had not yet commenced any operations. All activity for the three months ended May 31, 2016 relates to the Company’s search for a business combination target and general and administrative expenses.

The registration statement for the Company’s initial public offering was declared effective on April 30, 2015. The Company consummated a public offering of 7,200,000 units (“Units”) on May 6, 2015 (the “Offering”), received gross proceeds of $72,000,000 and net proceeds of $69,545,186 after deducting $2,454,814 of transaction costs. Each Unit consists of one ordinary share (“Public Share”) in the Company, one right (“Right”) and one redeemable warrant (“Warrant”). In addition, the Company generated proceeds of $4,550,000 from the private placement of 455,000 Units (the “Private Placement”) to certain initial shareholders of the Company. The Units sold pursuant to the Offering and the Private Placement were sold at an offering price of $10.00 per Unit. The Company also granted EarlyBirdCapital, Inc. (“EarlyBird”), the representative of the underwriters in the Offering, an over-allotment option to purchase an additional 1,080,000 Units. On May 12, 2015, the Company consummated the closing of the full over-allotment option to purchase the additional 1,080,000 Units. The Units sold pursuant to the over-allotment option were sold at an offering price of $10.00 per Unit, generating gross proceeds of $10,800,000 and net proceeds of $10,476,000. In a private sale that took place simultaneously with the consummation of the exercise of the over-allotment option, the Company’s initial shareholders prior to the Offering and their affiliates purchased an additional 54,000 Private Placement Units at $10.00 per Private Placement Unit generating gross proceeds of $540,000.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Offering and Private Placement, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination. The Company’s Units are listed on the Nasdaq Capital Market (“NASDAQ”). Pursuant to the NASDAQ listing rules, the Company’s initial Business Combination must be with a target business or businesses whose collective fair market value is at least equal to 80% of the balance in the trust account at the time of the execution of a definitive agreement for such Business Combination, although this may entail simultaneous acquisitions of several target businesses. There is no assurance that the Company will be able to effect a Business Combination successfully.

Following the closing of the Offering, the Private Placement and the exercise of the over-allotment options, an amount of $84,456,000 or $10.20 per share sold in the Offering including shares sold in the overallotment is being held in a trust account (“Trust Account”) and may be invested in money market funds meeting the applicable conditions of Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, and that invest solely in U.S. treasuries or United States bonds, treasuries or notes having a maturity of 180 days or less. The funds placed into the Trust Account may not be released until the earlier of (i) the consummation of the Company’s initial Business Combination and (ii) the Company’s failure to consummate a Business Combination within the prescribed time. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. However, the interest earned on the Trust Account balance may be released to the Company (i) to pay any tax obligations and (ii) any remaining interest earned on the funds in the Trust Account that the Company needs for its working capital requirements. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers, prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements.

F-83

Note 1 - Organization and Plan of Business Operations, Liquidity and Going Concern (Continued)

The Company will either seek shareholder approval of any Business Combination at a meeting called for such purpose at which the holders of shares included in Units sold in the Offering (“Public Shareholders’), may seek to convert their Public Shares into their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid or provide shareholders with the opportunity to sell their Public Shares to the Company by means of a tender offer for an amount equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid. The Company will proceed with a Business Combination only if it will have net tangible assets of at least $5,000,001 upon consummation of the Business Combination and, solely if shareholder approval is sought, a majority of the outstanding ordinary shares of the Company voted, are voted in favor of the Business Combination. Notwithstanding the foregoing, a Public Shareholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or more of the ordinary shares sold in the Offering. Accordingly, all shares purchased by a holder in excess of 20% of the shares sold in the Offering will not be converted to cash.

In connection with any shareholder vote required to approve any Business Combination, the holders of the founders shares and shares purchased in the Private Placement (collectively, the “Initial Shareholders”) have agreed (i) to vote any of their respective shares, including the 2,070,000 ordinary shares sold to the Initial Shareholders in connection with the organization of the Company (the “Initial Shares”), 509,000 units sold in the Private Placement (“Private Units”), and any ordinary shares which were initially issued in connection with the Offering, whether acquired in or after the effective date of the Offering, in favor of the initial Business Combination and (ii) not to convert such shares into a pro rata portion of the Trust Account or seek to sell their shares in connection with any tender offer the Company engages in.

Pursuant to the Company’s Memorandum and Articles of Association, if the Company is unable to complete its initial Business Combination by November 6, 2016, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding Public Shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining holders of ordinary shares and the Company’s board of directors, dissolve and liquidate. If the Company is unable to consummate an initial Business Combination and is forced to redeem 100% of the outstanding Public Shares for a pro rata portion of the funds held in the Trust Account, each holder will receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account and not released to the Company to pay any of its taxes and working capital requirements. Holders of Rights (see Note 3) and Warrants (see Note 3) will receive no proceeds in connection with the liquidation. The Initial Shareholders will not participate in any redemption distribution with respect to their Initial Shares and Private Units, including the ordinary shares included in the Private Units.

If the Company is unable to complete its initial Business Combination and expends all of the net proceeds of the Offering not deposited in the Trust Account, without taking into account any interest earned on the Trust Account, the Company expects that the initial per-share redemption price for ordinary shares will be $10.20. The proceeds deposited in the Trust Account could, however, become subject to claims of the Company’s creditors that are in preference to the claims of the Company’s shareholders. In addition, if the Company is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of the Company’s ordinary shareholders. Therefore, the actual per-share redemption price may be less than $10.20.

F-84

Note 1 - Organization and Plan of Business Operations, Liquidity and Going Concern (Continued)

Kevin Chin, the Chairman and Chief Executive Officer of the Company, has contractually agreed pursuant to a written agreement with the Company that, if the Company liquidates the Trust Account prior to the consummation of a business combination, he will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by the Company for services rendered or contracted for or products sold to the Company. Accordingly, if a claim brought by a target business or vendor did not exceed the amount of funds available to the Company outside of the Trust Account or available to be released to the Company from interest earned on the Trust Account balance, Mr. Chin would not have any obligation to indemnify such claims as they would be paid from such available funds. However, if a claim exceeded such amounts, the only exceptions to Mr. Chin’s obligations to pay such claim would be if the party executed an agreement waiving any right, title, interest or claim of any kind they have in or to any monies held in the Trust Account. The Company cannot assure you that Mr. Chin will be able to satisfy these obligations if he is required to do so. Therefore, the Company cannot assure the shareholders that the per-share distribution from the Trust Account, if the Company liquidates the Trust Account because the Company has not completed a business combination within the required time period, will not be less than $10.20.

Liquidity and Going Concern

As of May 31, 2016, the Company had working capital deficit of $33,754, cash of $133,063 in its operating bank accounts and $84,459,058 in marketable securities held in the Trust Account to be used for an initial Business Combination or to convert its ordinary shares. As of May 31, 2016, $3,058 of the amount on deposit in the Trust Account was available to be withdrawn as described above.

Until consummation of its initial Business Combination, the Company will be using the funds not held in the Trust Account, plus the interest earned on the Trust Account balance (net of income, and other tax obligations) that may be released to the Company to fund its working capital requirements, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

The Company will need to raise additional capital through loans or additional investments from its shareholders, officers, directors, or third parties. None of the shareholders, officers or directors are under any obligation to advance funds to, or to invest in, the Company. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.

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Note 2 - Significant Accounting Policies

Basis of presentation

The accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. The Company has evaluated subsequent events through the issuance of this Form 10-Q. Operating results for the quarter ended May 31, 2016 are not necessarily indicative of the results that may be expected for the period March 1, 2016 through November 6, 2016 (liquidation date) or any future interim period. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission on June 10, 2016.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

Marketable securities held in Trust Account

The amounts held in the Trust Account represent substantially all of the proceeds of the Initial Public Offering of $84,456,000 which were invested in United States Treasury Bills (“U.S. treasury bills”) with original maturities of six months or less and are classified as restricted assets since such amounts can only be used by the Company in connection with the consummation of a Business Combination.

On November 19, 2015, upon maturity of these U.S. treasury bills, the Company received proceeds of $84,485,000 yielding interest of $29,072 which was released to the Company’s operating account. On November 19, 2015, the Company purchased $84,560,000 face value of U.S. treasury bills, which matured on May 12, 2016, for $84,455,928. Upon maturity of the U.S. treasury bills on May 12, 2016, the Company withdrew interest income totaling $104,814 to be utilized for working capital needs. On May 13, 2016, the Company purchased $84,504,000 face value of U.S. treasury bills that mature on August 11, 2016.

As of May 31, 2016, marketable securities held in the Trust Account had a fair value of $84,459,058. At May 31, 2016, there was $3,058 of interest income held in the Trust Account available to be released to the Company. For the three months ended May 31, 2016, the recorded an unrealized gain on securities of $6,440. For the three months ended May 31, 2016 and 2015, the Company recorded $45,402 and $4,571 of interest income, respectively.

Fair value of financial instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheet, primarily due to their short-term nature.

Net loss per ordinary share

The Company complies with accounting and disclosure requirements of ASC 260, “Earnings Per Share.” Net loss per ordinary share is computed by dividing net loss applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. There were 7,786,512 and 7,822,017 ordinary shares subject to possible conversion at May 31, 2016 and 2015, respectively, which were excluded from the calculation of basic loss per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of (i) warrants sold in the Initial Public Offering to purchase 4,140,000 ordinary shares of the Company, (ii) warrants sold in the Private Units to purchase 254,500 ordinary shares of the Company, and (iii) rights to acquire 878,900 shares of the Company resulting from the Offering and Private Placement, in the calculation of diluted loss per share, since the exercise of the warrants and conversion of the rights is contingent on the occurrence of future events. In addition, the Company has not considered the effect of the unit purchase option to purchase up to a total of 720,000 units consisting of 792,000 ordinary shares (which include 72,000 ordinary shares to be issued for the rights included in the units) and 720,000 Warrants to purchase 360,000 ordinary shares, in the calculation of diluted loss per share, since the exercise of the unit purchase option and warrants as well as the conversion of rights is contingent on the occurrence of future events.

Ordinary shares subject to possible conversion

The Company accounts for its ordinary shares subject to possible conversion in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity”. Ordinary shares subject to mandatory conversion are classified as a liability instrument and are measured at fair value. Conditionally convertible ordinary shares (including common shares that feature conversion rights that are either within the control of the holder or subject to conversion upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain conversion rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at May 31, 2016 and February 29, 2016, the ordinary shares subject to possible conversion are presented as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheet.

F-86

Note 2 - Significant Accounting Policies (Continued)

Use of Estimates

The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Income Taxes

The Company accounts for income taxes under ASC Topic 740 “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryovers. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. The income tax provision was deemed to be immaterial as of May 31, 2016.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company determined that the Cayman Islands and Australia are its only major tax jurisdictions. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements as of May 31, 2016. Since the Company was incorporated on October 1, 2014, the evaluation was performed for the 2014 and 2015 tax years, which will be the only periods subject to examination. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial position.

The Company’s policy for recording interest and penalties associated with audits is to record such expense as a component of income tax expense. There were no amounts accrued for penalties or interest as of or during the period from March 1, 2016 through May 31, 2016. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

Related Parties

The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20, the related parties include: (a.) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company; (e.) management of the Company; (f.) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

F-87

Note 2 - Significant Accounting Policies (Continued)

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Reclassification

Certain prior period amounts have been reclassified to conform to current period presentation. The reclassifications did not have an impact on net loss as previously reported .

Subsequent Events

The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements were issued for potential recognition or disclosure. Any material events that occur between the balance sheet date and the date that the financial statements were issued are disclosed as subsequent events, while the financial statements are adjusted to reflect any conditions that existed at the balance sheet date.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

Note 3 - Initial Public Offering

In May 2015, the Company sold a total of 8,280,000 Units at a price of $10.00 per Unit in the Offering and over-allotment. Each Unit consists of one ordinary share in the Company, one Right and one Warrant. Each Right will entitle the holder to receive one-tenth (1/10) of an ordinary share on the consummation of an initial Business Combination. The Company will not issue fractional shares. Each Warrant entitles the holder to purchase one-half of one ordinary share at a price of $12.50 per full ordinary share commencing on the later of the Company’s completion of its initial Business Combination or April 30, 2016 and expiring five years from the completion of the Company’s initial Business Combination. The Company will not issue fractional shares. As a result, investors must exercise Warrants in multiples of two Warrants, at a price of $12.50 per full share, subject to adjustment, to validly exercise the Warrants. The Company may redeem the Warrants, in whole and not in part, at a price of $0.01 per Warrant upon 30 days’ notice, only in the event that the last sale price of the ordinary shares is at least $17.50 per share for any 20 trading days within a 30-trading day period (“30-Day Trading Period”) ending on the third day prior to the date on which notice of redemption is given, provided there is a current registration statement in effect with respect to the ordinary shares underlying such Warrants commencing five business days prior to the 30-Day Trading Period and continuing each day thereafter until the date of redemption. If the Company redeems the Warrants as described above, management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In accordance with the warrant agreement relating to the Warrants to be sold and issued in the Offering the Company is only required to use its best efforts to maintain the effectiveness of the registration statement covering the Warrants. If a registration statement is not effective within 90 days following the consummation of a Business Combination, Warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act of 1933, as amended. In the event that a registration statement is not effective at the time of exercise or no exemption is available for a cashless exercise, the holder of such Warrant shall not be entitled to exercise such Warrant for cash and in no event (whether in the case of a registration statement being effective or otherwise) will the Company be required to net cash settle the Warrant exercise. Additionally, in no event will the Company be required to net cash settle the Rights. If an initial Business Combination is not consummated, the Rights and Warrants will expire and will be worthless.

F-88

Note 4 - Private Units

Simultaneously with the Offering, certain of the Initial Shareholders of the Company purchased an aggregate of 509,000 Private Units at $10.00 per Private Unit (for an aggregate purchase price of $5,090,000) from the Company. All of the proceeds received from these purchases were placed in the Trust Account.

The Private Units are identical to the units sold in the offering except the warrants included in the private units will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Additionally, because the warrants underlying the private units were issued in a private transaction, the holders and their transferees will be allowed to exercise such warrants for cash even if a registration statement covering the ordinary shares issuable upon exercise of such warrants is not effective and receive unregistered ordinary shares. Furthermore, the purchasers have agreed (A) to vote their private shares in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to the amended and restated memorandum and articles of association with respect to the pre-business combination activities prior to the consummation of such a business combination unless the Company provides dissenting public shareholders with the opportunity to convert their public shares into the right to receive cash from the Trust Account in connection with any such vote, (C) not to convert any private shares into the right to receive cash from the Trust Account in connection with a shareholder vote to approve our proposed initial business combination (or sell any private shares they hold to the Company in a tender offer in connection with a proposed initial business combination) or a vote to amend the provisions of the amended and restated memorandum and articles of association relating to shareholders’ rights or pre-business combination activity and (D) that the private shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated. The purchasers have also agreed not to transfer, assign or sell any of the private units or underlying securities (except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions as the permitted transferees of the insider shares must agree to, each as described above) until the completion of the Company’s initial business combination.

Note 5 - Related Party Transactions

Note Payable to Related Party

On March 1, 2016, the Company issued a $130,000 principal amount unsecured promissory note to an affiliate of the Company’s executive officers. The note is non-interest bearing and shall be repaid on the consummation of an initial business combination. If a business combination is not consummated, the note will not be repaid by the Company and all amounts owed there under by the Company will be forgiven except to the extent that the Company had funds available to it outside of its Trust Account established in connection with the Initial Public Offering.

F-89

Note 6 - Commitments

Underwriting Agreement

The Company entered into an agreement with the underwriters of the Offering (“Underwriting Agreement”). The Underwriting Agreement required the Company to pay an underwriting discount of 3% of the gross proceeds of the Offering as an underwriting discount. The Company has further engaged EarlyBird to assist the Company with its initial Business Combination. Pursuant to this arrangement, the Company anticipates that EarlyBird will assist the Company in holding meetings with shareholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities, assist the Company in obtaining shareholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the EarlyBird a cash fee of 4% of the gross proceeds of the Offering for such services upon the consummation of its initial Business Combination (exclusive of any applicable finders’ fees which might become payable).

Registration Rights

The Initial Shareholders of the Private Units will be entitled to registration rights with respect to their initial shares, the Private Units (and underlying securities) and any additional units (and underlying securities) issued upon conversion of working capital loans made by such parties to the Company (“Working Capital Units”). The holders of the majority of the initial shares are entitled to demand that the Company register these shares at any time commencing three months prior to the first anniversary of the consummation of a Business Combination. The holders of the Private Units (or underlying securities) or Working Capital Units (or underlying securities) are entitled to demand that the Company register these securities at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights on registration statements filed after the Company’s consummation of a Business Combination.

Purchase Option

The Company sold to the Representative, for $100, a unit purchase option to purchase up to a total of 720,000 units exercisable at $10.00 per Unit (or an aggregate exercise price of $7,200,000) commencing on the later of the consummation of a Business Combination and one year from May 1, 2015. The unit purchase option expires five years from May 1, 2015. The Units issuable upon exercise of this option are identical to the Units sold in the Offering. Accordingly, after the Business Combination, the purchase option will be to purchase 792,000 ordinary shares (which include 72,000 ordinary shares to be issued for the rights included in the Units) and 720,000 Warrants to purchase 360,000 ordinary shares. The Company has agreed to grant to the holders of the unit purchase option, demand and “piggy back” registration rights for periods of five and seven years, respectively, from the effective date of this Offering, including securities directly and indirectly issuable upon exercise of the unit purchase option.

The Company accounted for the fair value of the unit purchase option, inclusive of the receipt of a $100 cash payment, as an expense of the Offering resulting in a charge directly to shareholders’ equity. The Company estimated that the fair value of this unit purchase option on the grant date was approximately $4,872,306 (or $6.77 per unit) using a Black-Scholes option-pricing model. The fair value of the unit purchase option was estimated as of the date of grant using the following assumptions: (1) expected volatility of 86%, (2) risk-free interest rate of 1.58% and (3) expected life of five years. The unit purchase option may be exercised for cash or on a “cashless” basis, at the holder’s option (except in the case of a forced cashless exercise upon the Company’s redemption of the Warrants, as described in Note 3), such that the holder may use the appreciated value of the unit purchase option (the difference between the exercise prices of the unit purchase option and the underlying Warrants and the market price of the Units and underlying ordinary shares) to exercise the unit purchase option without the payment of any cash. The Company will have no obligation to net cash settle the exercise of the unit purchase option or the Warrants underlying the unit purchase option. The holder of the unit purchase option will not be entitled to exercise the unit purchase option or the Warrants underlying the unit purchase option unless a registration statement covering the securities underlying the unit purchase option is effective or an exemption from registration is available. If the holder is unable to exercise the unit purchase option or underlying Warrants, the unit purchase option or Warrants, as applicable, will expire worthless.

F-90

Note 6 - Commitments (Continued)

Administrative Service Fee

The Company, commencing on the effective date of the registration statement relating to the Offering, has agreed to pay, an affiliate of the Company’s executive officers, a monthly fee of $10,000 for general and administrative services. This arrangement will terminate upon completion of a Business Combination or the Company's liquidation. During the three months ended May 31, 2016 and 2015, the Company recorded its affiliate management fees of $30,000 and $8,387, respectively, which is included in operating costs in the unaudited condensed statement of operations. As of May 31, 2016 and February 29, 2016, $91,440 and $61,440, respectively, was due to the affiliate and are presented as Accounts payable – related party on the Company’s condensed balance sheet.

Amended and Restated Memorandum and Articles of Association

The Company’s Memorandum and Articles of Association were amended in connection with the Offering to prohibit the Company, prior to a Business Combination, from issuing (i) any ordinary shares or any securities convertible into ordinary shares or (ii) any other securities (including preferred shares) which participate in or are otherwise entitled in any manner to any of the proceeds in the Trust Account or which vote as a class with the ordinary shares on a Business Combination.

Note 7 - Shareholder’s Equity

Preferred Shares

The Company is authorized to issue 1,000,000 preferred shares with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors.

As of May 31, 2016 and February 29, 2016, there are no preferred shares issued or outstanding.

Ordinary Shares

The Company is authorized to issue 100,000,000 ordinary shares with a par value of $0.0001 per share.

In October 2014, 1,725,000 ordinary shares were sold to the Initial Shareholders at a price of approximately $0.01 per share for an aggregate of $25,000. On February 22, 2015, the Company issued an aggregate of 345,000 ordinary shares to the Initial Shareholders by way of capitalization under Cayman Islands law, resulting in the Initial Shareholders owning an aggregate of 2,070,000 ordinary shares. This number included an aggregate of up to 270,000 shares that were subject to compulsory repurchase by the Company; however, due to the full exercise of the over-allotment by the underwriters, no shares were repurchased. All of these shares were placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent, until (1) with respect to 50% of the shares, the earlier of one year after the date of the consummation of an initial Business Combination and the date on which the closing price of the Company’s ordinary shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination and (2) with respect to the remaining 50% of the insider shares, one year after the date of the consummation of an initial Business Combination, or earlier, in either case, if, subsequent to an initial Business Combination, the Company consummates a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s shareholders having the right to exchange their shares for cash, securities or other property.

As of May 31, 2016 and February 29, 2016, 3,072,488 and 3,073,411 shares of ordinary shares were issued and outstanding which excludes 7,786,512 and 7,785,589 shares subject to possible conversion, respectively.

F-91

Note 8 - Fair Value Measurements

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1:

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2:

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at May 31, 2016 and February 29, 2016, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description

Level

May 31,
2016

February 29,
2016

Assets:

Cash and securities held in Trust Account
1 $ 84,459,058 $ 84,511,769

Note 9 - Subsequent Events

F-92

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm Financial Statements:

F-94

Balance Sheets

F-95

Statements of Operations

F-96

Statements of Shareholders’ Equity

F-97

Statements of Cash Flows

F-98

Notes to Financial Statements

F-99 – F-108

F-93

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Audit Committee of the

Board of Directors and Shareholders

of Arowana Inc.

We have audited the accompanying balance sheets of Arowana Inc. (the “Company”) as of February 29, 2016 and February 28, 2015, and the related statements of operations , changes in shareholders’ equity and cash flows for the year ended February 29, 2016 and the period from October 1, 2014 (inception) to February 28, 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Arowana Inc., as of February 29, 2016 and February 28, 2015, and the results of its operations and its cash flows for the year ended February 29, 2016 and the period from October 1, 2014 (inception) to February 28, 2015 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has no present revenue, its business plan is dependent on the completion of a business combination and the Company’s cash and working capital as of February 29, 2016, may not be sufficient to complete its planned activities through November 6, 2016, the date the Company is required to liquidate. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might results from the outcome of this uncertainty.

/s/ Marcum llp

Marcum llp

New York, NY
June 9, 2016

F-94

Arowana Inc.

Balance Sheets

February 29, 2016

February 28, 2015

Assets

Current Assets:

Cash and cash equivalents
$ 10,092 $ 29,319

Prepaid expenses
46,785 -

Total Current Assets
56,877 29,319

Deferred offering costs associated with public offering
- 127,876

Marketable securities held in trust
84,511,769 -

Total Assets
$ 84,568,646 $ 157,195

Liabilities and Shareholders' Equity

Current Liabilities:

Accounts payable and accrued expenses
$ 41,756 $ -

Accounts payable - related party
61,440 -

Note payable - related party
- 171,306

Total Current Liabilities
103,196 171,306

Commitments

Ordinary shares, subject to possible conversion (7,785,589 shares at conversion value)
79,465,445 -

Shareholders' Equity (Deficit):

Preferred shares, $0.0001 par value; 1,000,000 authorized none issued and outstanding
- -

Ordinary shares, $0.0001 par value; 100,000,000 shares authorized; 3,073,411 issued and outstanding at February 29, 2016 (excluding 7,785,589 shares subject to possible conversion) and 2,070,000 shares issued and outstanding at February 28, 2015
307 207

Additional paid in capital
5,397,385 24,793

Accumulated deficit
(397,687 ) (39,111 )

Total Shareholders' Equity (Deficit)
5,000,005 (14,111 )

Total Liabilities and Shareholders' Equity (Deficit)
$ 84,568,646 $ 157,195

See accompanying notes to the financial statements.

F-95

Arowana Inc.

Statements of Operations

For the Year

Ended

February 29, 2016

For the Period from

October 1, 2014
(Inception) through

February 28, 2015

EXPENSES

Operating costs
$ 345,030 $ 34,111

Operating costs - related party
98,387 5,000

TOTAL EXPENSES
(443,417 ) (39,111 )

Unrealized gain on securities held in Trust Account
55,769 -

Interest income
29,072 -

Net loss
$ (358,576 ) $ (39,111 )

Net loss per ordinary share - basic and diluted
$ (0.13 ) $ (0.02 )

Weighted average ordinary shares outstanding - basic and diluted
2,831,577 1,800,000

See accompanying notes to the financial statements.

F-96

Arowana Inc.

Statements of Shareholders’ Equity

For the Period from October 1, 2014 (Inception) through February 29, 2016

Ordinary Shares

Additional

Paid-In

Accumulated

Shareholders'

Shares

Amount

Capital

Deficit

(Deficit) Equity

Balance, October 1, 2014 (Inception)
- $ - $ - $ - $ -

Issuance of ordinary shares
2,070,000 207 24,793 - 25,000

Net loss
- - - (39,111 ) (39,111 )

Balance, February 28, 2015
2,070,000 $ 207 $ 24,793 $ (39,111 ) $ (14,111 )

Sale of 8,280,000 units
8,280,000 828 82,799,172 - 82,800,000

Underwriters discount and offering expenses
- - (3,051,863 ) - (3,051,863 )

Sale of 509,000 private units
509,000 51 5,089,949 - 5,090,000

Ordinary shares subject to possible conversion
(7,785,589 ) (779 ) (79,464,666 ) - (79,465,445 )

Net loss
(358,576 ) (358,576 )

Balance, February 29, 2016
3,073,411 $ 307 $ 5,397,385 $ (397,687 ) $ 5,000,005

See accompanying notes to the financial statements.

F-97

Arowana Inc.

Statements of Cash Flows

For the Year

Ended

February 29, 2016

For the Period from

October 1, 2014

(Inception) through

February 28, 2015

Cash Flows From Operating Activities:

Net loss
$ (358,576 ) $ (39,111 )

Adjustments to reconcile net loss to net cash used in operating activities:

Unrealized gain on securities held in Trust Account
(55,769 ) -

Interest earned on cash and securities held in Trust Account
(29,072 ) -

Formation and organization costs paid by related party
- 38,430

Changes in operating assets and liabilities:

Prepaid expenses
(46,785 ) -

Accounts payable and accrued expenses
41,756 -

Accounts payable - related party
61,440 -

Net cash used in operating activities
(387,006 ) (681 )

Cash Flows From Investing Activities:

Proceeds from maturity of securities held in Trust Account
84,485,000 -

Purchases of securities held in Trust Account
(168,911,928 ) -

Net cash used in investing activities
(84,426,928 ) -

Cash Flows From Financing Activities:

Proceeds from public offering, net of offering costs
80,021,186 -

Proceeds from insider units
5,090,000 -

Proceeds from issuance of ordinary shares to initial shareholder
- 25,000

Proceeds from related party advances
139,190 -

Repayment of related party advances
(139,190 ) -

Proceeds from note payable - related party
- 5,000

Repayment of related party note payable
(171,306 ) -

Payments of deferred offering costs
(145,173 ) -

Net cash provided by financing activities
84,794,707 30,000

Net Change in Cash and Cash Equivalents
(19,227 ) 29,319

Cash and Cash Equivalents - Beginning
29,319 -

Cash and Cash Equivalents - Ending
$ 10,092 $ 29,319

Supplemental disclosure of non-cash investing and financing activities:

Ordinary shares subject to possible conversion
$ 79,465,445 $ -

Payments of deferred offering costs by related party
$ - $ 127,876

Reclassification of deferred offering costs to share issuance costs
$ 273,049 $ -

See accompanying notes to the financial statements.

F-98

Arowana Inc.

Notes to Financial Statements

Note 1 - Organization and Plan of Business Operations, Liquidity and Going Concern

At February 29, 2016, the Company had not yet commenced any operations. All activity for the year ended February 29, 2016 relates to the Company’s formation, public offering (as described below), search for a business combination target and general and administrative expenses.

F-99

Note 1 - Organization and Plan of Business Operations, Liquidity and Going Concern (Continued)

F-100

Note 1 - Organization and Plan of Business Operations, Liquidity and Going Concern (Continued)

Liquidity and Going Concern

As of February 29, 2016, the Company had working capital deficit of $46,319, cash of $10,092 in its operating bank accounts and $84,511,769 in marketable securities held in the Trust Account to be used for an initial Business Combination or to convert its ordinary shares. As of February 29, 2016, $29,072 of the amount on deposit in the Trust Account was available to be withdrawn as described above.

Subsequent to the balance sheet date, the Company received advances of funds totaling $130,000 from an affiliate of one of the Company’s executive officers, in order to pay administrative expenses and costs of the Company until interest income held in the Trust account is released for working capital needs.

F-101

Note 2 - Significant Accounting Policies

Basis of presentation

The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

Marketable securities held in Trust Account

As of February 29, 2016, marketable securities held in the Trust Account had a fair value of $84,511,769. At February 29, 2016, there was $29,072 of interest income held in the Trust Account available to be released to the Company. For the year ended February 29, 2106, the recorded an unrealized gain on securities of $55,769.

Fair value of financial instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.

Net loss per ordinary share

The Company complies with accounting and disclosure requirements of ASC 260, “Earnings Per Share.” Net loss per ordinary share is computed by dividing net loss applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. There were 7,785,589 ordinary shares subject to possible conversion at February 29, 2016, which were excluded from the calculation of basic loss per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of (i) warrants sold in the Initial Public Offering to purchase 4,140,000 ordinary shares of the Company, (ii) warrants sold in the Private Units to purchase 254,500 ordinary shares of the Company, and (iii) rights to acquire 878,900 shares of the Company resulting from the Offering and Private Placement, in the calculation of diluted loss per share, since the exercise of the warrants and conversion of the rights is contingent on the occurrence of future events. In addition, the Company has not considered the effect of the unit purchase option to purchase up to a total of 720,000 units consisting of 792,000 ordinary shares (which include 72,000 ordinary shares to be issued for the rights included in the units) and 720,000 Warrants to purchase 360,000 ordinary shares, in the calculation of diluted loss per share, since the exercise of the unit purchase option and warrants as well as the conversion of rights is contingent on the occurrence of future events.

For the period from October 1, 2014 through February 28, 2015, weighted average shares was reduced for the effect of an aggregate of 270,000 ordinary shares that are subject to compulsory repurchase by the Company if the over-allotment option is not exercised by the underwriters.

Ordinary shares subject to possible conversion

The Company accounts for its ordinary shares subject to possible conversion in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity”. Ordinary shares subject to mandatory conversion are classified as a liability instrument and are measured at fair value. Conditionally convertible ordinary shares (including common shares that feature conversion rights that are either within the control of the holder or subject to conversion upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain conversion rights that are considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at February 29, 2016, the ordinary shares subject to possible conversion are presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.

F-102

Note 2 - Significant Accounting Policies (Continued)

Use of Estimates

Concentration of credit risk

Income Taxes

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company determined that the Cayman Islands and Australia are its only major tax jurisdictions. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements as of February 29, 2016. Since the Company was incorporated on October 1, 2014, the evaluation was performed for the 2014 and 2015 tax years, which will be the only periods subject to examination. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial position.

The Company’s policy for recording interest and penalties associated with audits is to record such expense as a component of income tax expense. There were no amounts accrued for penalties or interest as of or during the period from March 1, 2015 through February 29, 2016. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

Related Parties

The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions.

F-103

Note 2 - Significant Accounting Policies (Continued)

Subsequent Events

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

Note 3 - Initial Public Offering

F-104

Note 4 - Private Units

Note 5 - Related Party Transactions

Advances from Related Party

During the year ended February 29, 2016, an affiliate of the Company’s executive officers advanced funds totaling $139,190 to the Company to pay administrative expenses and offering costs incurred. These advances were due on demand and were non-interest bearing. As of February 29, 2016, the advances were repaid by the Company.

Note Payable to Related Party

The Company issued a $171,306 principal amount unsecured promissory note to an affiliate of the Company’s executive officers. The note was non-interest bearing and repaid by the Company during June 2015.

F-105

Note 6 - Commitments

Underwriting Agreement

Registration Rights

Purchase Option

F-106

Note 6 - Commitments (Continued)

Administrative Service Fee

Amended and Restated Memorandum and Articles of Association

Note 7 - Shareholder’s Equity

Preferred Shares

As of February 29, 2016, there are no preferred shares issued or outstanding.

Ordinary Shares

The Company is authorized to issue 100,000,000 ordinary shares with a par value of $0.0001 per share.

As of February 29, 2016, 3,073,411 shares of ordinary shares were issued and outstanding which excludes 7,785,589 shares subject to possible conversion.

F-107

Note 8 – Fair Value Measurements

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at February 29, 2016 and February 28, 2015, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Description

Level

February 29,
2016

February 28,
2015

Assets:

Cash and securities held in Trust Account
1 $ 84,511,769 $ -

Note 9 – Subsequent Events

As discussed in Note 1, subsequent to the balance sheet date, the Company received advances of funds totaling $130,000 from an affiliate of one of the Company’s executive officers, in order to pay administrative expenses and costs of the Company until interest income held in the Trust account is released for working capital needs.

F-108

ANNEX A

Execution Version

CONTRIBUTION AGREEMENT

by and among

AROWANA INC. ,

VIVOPOWER INTERNATIONAL PLC

and

AROWANA INTERNATIONAL LIMITED

Dated as of August 11, 2016

NY:1824684.16

A-1

CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT is made and entered into as of August 11, 2016, by and among AROWANA INC., a Cayman Islands exempted company (“ ARWA ”), VIVOPOWER INTERNATIONAL PLC, an England and Wales public limited company (“ Company ”), and AROWANA INTERNATIONAL LIMITED, an Australian company (“ AWN ”).

The term “ Agreement ” as used herein refers to this Contribution Agreement, as the same may be amended from time to time, and all schedules hereto (including AWN Schedule, the Company Schedule and the ARWA Schedule, each as hereafter defined). All capitalized terms used in this Agreement shall have the meanings ascribed to such terms in Article X or as otherwise defined elsewhere in this Agreement unless the context clearly provides otherwise. ARWA, the Company and AWN may also be referred to collectively herein as the “ Parties ” and individually as a “ Party .”

RECITALS

A. ARWA is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.

B. The Company is an international solar power company.

C. The Parties desire that ARWA contribute a substantial portion of its assets (consisting solely of cash) in exchange for such number of newly issued ordinary shares, par value $0.012 per share, of the Company (the “ Company Shares ”) as is further described herein, upon the terms and subject to the conditions set forth in this Agreement.

D. AWN has agreed to sell to the Company, and the Company has agreed to purchase from AWN, a certain number of Company Shares equal to a portion of the Company Shares that ARWA may acquire hereunder, as is further described herein, upon the terms and subject to the conditions set forth in this Agreement.

E. Promptly following the execution and delivery of this Agreement, the Company will file with the SEC a Registration Statement (as hereafter defined), including a related Proxy Statement/Prospectus (as hereafter defined) that is both a proxy statement to be distributed to holders of outstanding ordinary shares, par value $0.0001 per share, of ARWA (the “ ARWA Ordinary Shares ”) and outstanding warrants of ARWA to purchase one-half of one ARWA Ordinary Share (the “ ARWA Warrants ”) in connection with the solicitation by ARWA of proxies for ARWA Shareholder Approval and ARWA Warrantholder Approval (each as hereinafter defined) and a prospectus covering the registration of the Company Shares to be issued by the Company to ARWA pursuant to this Agreement.

NY:1824684.16

A-2

AGREEMENT

NOW, THEREFORE, in consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I
THE CONTRIBUTION AND PURCHASE

1.1 Contribution and Issuance of Company Shares by Company; Sale of Company Shares by AWN .

(a) In accordance with the terms and subject to the conditions of this Agreement, at the Closing, ARWA shall contribute to the Company an amount (the “ Contribution Amount ”) in cash in U.S. Dollars equal to (i) $56,585,520, less (ii) unpaid fees and expenses incurred by ARWA in connection with this Agreement and the transactions contemplated hereby that are in excess of the working capital available to ARWA outside of, or eligible to be withdrawn from, the Trust Fund (the “ Transaction Fees and Expenses ”), and the Company shall issue, sell and deliver to ARWA, an aggregate of 9,444,950 Company Shares (the “ Contribution Shares ”), free and clear of all Liens (the “ Contribution ”).

(b) To the extent that there are additional funds held in the Trust Fund after taking into account (i) the Contribution Amount, (ii) amounts necessary to pay holders of ARWA Ordinary Shares issued in ARWA’s initial public offering (the “ Public Shares ”) as to which the holders thereof have elected to exercise their rights to convert such shares into a pro rata portion of the Trust Fund (such rights, “ Conversion Rights ”) pursuant to ARWA’s Charter Documents (as hereafter defined) and (iii) the Transaction Fees and Expenses (such excess amounts in the Trust Fund being hereinafter referred to as the “ True-up Amount ”), in accordance with the terms and subject to the conditions of this Agreement, at the Closing, ARWA will purchase from the Company, and the Company shall issue, sell and deliver to ARWA, a number of Company Shares (the “ True-up Shares ”) equal to the True-up Amount divided by $10.20, free and clear of all Liens, for an aggregate purchase price equal to the True-up Amount, payable by ARWA in cash in U.S. Dollars (the “ True-up S ale ”).

(c) In accordance with the terms and subject to the conditions of this Agreement, at the Closing, the Company will purchase from AWN, and AWN shall sell and deliver to the Company, a number of Company Shares (the “ Make-even Shares ”) equal to the number of True-up Shares, free and clear of all Liens, for an aggregate purchase price equal to the amount paid by ARWA for the True-up Shares (the “ Make-even Amount ”), payable by the Company in cash in U.S. Dollars (the “ Make-even Sale ” and together with the Contribution, True-up Sale and the other transactions contemplated hereby, the “ Transactions ”). Any stamp duties payable in connection with the Make-even Sale shall be paid by AWN.

NY:1824684.16

A-3

1.2 Payment and Delivery of Contribution Amount , True-up Amount and Make-even Amount ; Distribution of Company Shares; Other Securities .

(a) At the Closing:

(i) ARWA shall deliver and pay to the Company the Contribution Amount and True-up Amount, if any, by wire transfer or intrabank transfer of immediately available funds to an account designated by the Company no later than the close of business on the third (3 ^rd ) Business Day prior to the Closing Date;

(ii) The Company shall deliver to ARWA (or credit ARWA through direct registration or through the Deposit and Withdrawal at Custodian system of the Depository Trust Company or through the FAST (Fast Automated Securities Transfer) Program) the Contribution Shares and the True-up Shares, if any, pursuant to written instructions provided by ARWA no later than the close of business on the third (3 ^rd ) Business Day prior to the Closing Date;

(iii) AWN shall deliver to the Company the Make-even Shares, if any, pursuant to written instructions provided by the Company no later than the close of business on the third (3 ^rd ) Business Day prior to the Closing Date; and

(iv) the Company shall deliver and pay to AWN the Make-even Amount, if any, by wire transfer or intrabank transfer of immediately available funds to an account designated by AWN no later than the close of business on the third (3 ^rd ) Business Day prior to the Closing Date.

(b) Within 45 days after the Closing Date, ARWA shall distribute (i) 9,005,500 Contribution Shares plus the True-up Shares, if any, by means of a dividend payable in such Contribution Shares and True-up Shares to the holders of ARWA Ordinary Shares (or, in ARWA's sole discretion, as may be directed by the holders of ARWA Ordinary Shares) and (ii) 439,450 Contribution Shares by means of a special distribution payable in such Contribution Shares to the holders of ARWA Warrants (or, in ARWA's sole discretion, as may be directed by the holders of ARWA Warrants), in each case as of the close of business on a date determined by the Board of Directors of ARWA. Holders of the rights issued by ARWA (the “ ARWA Rights ”) pursuant to the Rights Agreement, dated as of April 30, 2015, by and between ARWA and Continental, shall be required to return the certificates evidencing their ARWA Rights to Continental prior to receiving ARWA Ordinary Shares and Company Shares to which they are entitled pursuant to the Rights and such dividend. Upon receipt of a valid Rights Certificate, ARWA shall issue to the registered holder of such Rights a number of full ARWA Ordinary Shares to which he, she or it is entitled pursuant to such Rights and then distribute the full number of Company Shares to which he, she or it is entitled pursuant to such dividend, respectively, registered in such name or names as may be directed by him, her or it. The Company shall not issue fractional shares upon exchange of Rights or payment of such dividend. In the event that any holder would otherwise be entitled to any fractional share upon exchange of Rights or payment of such dividend, the number of ARWA Ordinary Shares or Company Shares, as applicable, that the holder would be entitled to will be rounded down to the nearest whole number .

(c) Within 45 days of the Closing Date, subject to approval of the Dissolution Proposal, ARWA shall wind up and liquidate in accordance with its Charter Documents and the Companies Law (2013 Revision) of the Cayman Islands.

NY:1824684.16

A-4

1.3 Closing . Unless this Agreement shall have been terminated pursuant to Section 9.1, the consummation of the Transactions (the “ Closing ”) shall take place at the offices of Graubard Miller, counsel to ARWA, 405 Lexington Avenue, New York, New York 10174-1101 at a time and date to be specified by the parties, which shall be no later than the fifth (5 ^th ) business day after the satisfaction or waiver of the conditions set forth in Article VII (other than conditions with respect to actions the respective Parties will take at the Closing itself), or at such other time, date and location as the parties hereto agree in writing (the “ Closing Date ”). Closing signatures may be transmitted by facsimile or by email .pdf files. All Transactions contemplated herein to occur on and as of the Closing Date shall be deemed to have occurred simultaneously.

1.4 Rule 145 . All Company Shares issued pursuant to this Agreement to “affiliates” of ARWA listed in Schedule 1. 4 will be subject to certain resale restrictions under Rule 145 promulgated under the Securities Act and all certificates representing such Company Shares shall bear an appropriate restrictive legend.

1.5 Governing Documents . Effective as of the Closing, the memorandum and articles of association of the Company shall be amended and restated in a form mutually agreeable to the Parties.

1.6 Make-even Share Consideration . The maximum number of Company Shares which can be purchased by the Company pursuant to Article 1.1(c) of this Agreement is 2,732,400. The minimum consideration for the buyback of the Make-even Shares will be the nominal value of the Company Shares, and the maximum consideration will be $10.20 per Company Share. For the avoidance of doubt, the Parties acknowledge that no Company Shares may be bought back until the shareholders of the Company approve the terms of this Agreement at a general meeting.

ARTICLE II
REPRESENTATIONS AND WARRANTIES REGARDING AWN

Subject to the exceptions set forth in Schedule 2 attached hereto (the “ AWN Schedule ”), AWN hereby represents and warrants to ARWA as follows:

2.1 Approval . By execution of this Agreement, AWN, in its capacity as the sole shareholder of the Company, shall be deemed to have provided its written consent to the approval of this Agreement and authorization for the Company to execute and deliver same, and the approval of the Transactions, including the amendment and restatement of the Company’s memorandum and articles of association as set forth in Section 1.5, the issue and allotment of shares pursuant to Section 1.1(b) and the buyback of shares pursuant to Section 1.1(c), subject to approval of this Agreement and the Transactions by the shareholders of AWN.

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2.2 Authority Relative to this Agreement . AWN has full corporate power and authority to: (a) execute and deliver this Agreement and each Transaction Document to which it is a party, (b) perform its obligations hereunder and thereunder and (c) consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Transaction Documents to which it is a party by AWN and the consummation by AWN of the transactions contemplated hereby and thereby has been duly and validly authorized by all necessary corporate action on the part of AWN. This Agreement and the Transaction Documents to which it is a party have been or will be, as applicable, duly and validly executed and delivered by AWN and, assuming the due authorization, execution and delivery hereof and thereof by each other party hereto, constitute or will constitute, as applicable, the legal and binding obligations of AWN, enforceable against AWN in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

2.3 No Conflict; Required Filings and Consents .

(a) The execution and delivery of this Agreement by AWN do not, and the performance of this Agreement by AWN shall not, (i) conflict with or violate AWN’s Charter Documents, (ii) conflict with or violate any Legal Requirements applicable to AWN, (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair the Company’s rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or trigger or increase any payment to a third party pursuant to, any Contract to which the Company or AWN is a party or by or to which any of the properties or assets of AWN may be bound (an “ AWN Contract ”), or (iv) result in the creation of a Lien on any of the properties or assets of the Company or AWN pursuant to any AWN Contract, except, with respect to clauses (ii), (iii) or (iv), for any such conflicts, violations, breaches, defaults, triggerings, accelerations, increases, Liens or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on AWN or the Company, or prevent or materially delay the consummation of the Transactions or otherwise prevent the parties hereto from performing their respective obligations under this Agreement.

(b) The execution and delivery of this Agreement by AWN does not, and the performance of its obligations hereunder will not, require any Governmental Action/Filing or consent, approval, authorization or permit of, or filing with or notification to, any other third party (including, without limitation, lenders and lessors), except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, blue sky laws and the rules and regulations thereunder, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on AWN or the Company, or prevent or materially delay the consummation of the Transactions or otherwise prevent the parties hereto from performing their respective obligations under this Agreement .

2.4 Ownership . AWN owns, and immediately prior to the Closing will own, all of the outstanding Company Shares, free and clear of all Liens, other than Permitted Liens (all of which shall be extinguished as to the Make-even Shares upon transfer of such shares to the Company). AWN shall not assign, sell, transfer or otherwise dispose of the Company Shares. Except for this Agreement, AWN is not, and shall not become, a party to any Contract obligating AWN to assign, sell, transfer or otherwise dispose of any Company Shares .

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2.5 No Other Representations and Warranties; Non-Reliance . Except for the specific representations and warranties contained in this Agreement, none of AWN, AWN’s Affiliates, or any other Person on behalf of AWN or any of AWN’s Affiliates has made, makes or shall be deemed to make, any other express or implied representation or warranty regarding AWN or its subsidiaries (including any representation or warranty with respect to any projection or forecast with respect to AWN, the Company Group, Aevitas or its subsidiaries or any other information provided to ARWA or ARWA’s Affiliates or representatives), and AWN disclaims any such representation or warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing). AWN agrees that neither it nor any of its Affiliates has relied upon or is relying upon any representations or warranties of any kind other than the specific representations and warranties expressly made by ARWA in this Agreement.

ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY

Subject to the exceptions set forth in Schedule 3 attached hereto (the “ Company Schedule ”), the Company and AWN (solely with respect to the Company) hereby represent and warrant to, and covenants with, ARWA as follows:

3.1 Organization and Qualification .

(a) The Company is a corporation duly incorporated, validly existing and, if applicable, in good standing under the laws of the country of its formation and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted. The Company is in possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders (“ Approvals ”) necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being conducted, except where the failure to have such Approvals would not, individually or in the aggregate, have a Material Adverse Effect on the Company. Complete and correct copies of the Charter Documents of the Company, as amended and currently in effect, have been made available to ARWA. The Company is not in violation of any of the provisions of the Company’s Charter Documents.

(b) The Company is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that would not, individually or in the aggregate, have a Material Adverse Effect on the Company.

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3.2 Subsidiaries .

(a) All of the Company Group Members (as used in this Section 3.2 “Company Group Members” excludes the Company, as to which representations are made elsewhere in this Article III) are listed on Schedule 3.2 . The Company owns all of the outstanding securities of its Subsidiaries, and upon consummation of the Contingent Acquisitions, will own the securities of the Contingent Acquisition Targets, free and clear of all Liens, other than Permitted Liens . Other than this Agreement and the Contracts relating to the Contingent Acquisitions and the Aevitas Acquisition, there are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which any Company Group Member is a party or by which any Company Group Member is bound obligating such Person to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any shares of capital stock, partnership interests or similar ownership interests of such Company Group Member. Except for other Company Group Members, none of the Company Group Members (i) owns, directly or indirectly, any ownership, equity, profits or voting interest in any Person, (ii) is a party to any agreement or commitment to purchase any such interest, and (iii) other than this Agreement and the Contracts relating to the Contingent Acquisitions and the Aevitas Acquisition, has agreed or is obligated to make nor is bound by any Contract under which it may become obligated to make, any future investment in or capital contribution to any other Person.

(b) Each Company Group Member is duly incorporated or formed, validly existing and, if applicable, in good standing under the laws of its state of incorporation (as listed in Schedule 3 .2 ) and has the requisite corporate or company power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted. Each Company Group Member is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being conducted, except where the failure to have such Approvals would not, individually or in the aggregate, have a Material Adverse Effect on the Company Group. Complete and correct copies of the Charter Documents of each Company Group Member, as amended and currently in effect, have been heretofore delivered to ARWA. No Company Group Member is in violation of any of the provisions of its Charter Documents.

(c) Each Company Group Member is duly qualified or licensed to do business as a foreign corporation or foreign limited liability company and, if applicable, is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that would not, individually or in the aggregate, have a Material Adverse Effect on the Company Group.

3.3 Capitalization .

(a) The authorized capital stock of the Company is unlimited and consists exclusively of 5,718,879 shares issued and outstanding as of the date of this Agreement, all of which are validly issued, fully paid and nonassessable (“ Company Stock ”). Schedule 3.3(a) hereto contains a list of all of the shareholders of the Company, the number of shares of Company Stock owned by each shareholder and each shareholder’s residence address.

(b) No shares of Company Stock are reserved for issuance upon the exercise of outstanding options to purchase Company Stock granted to employees of Company or other parties, outstanding warrants or other rights to purchase Company Stock . Any shares of Company Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which Company is bound obligating the Company to accelerate the vesting of any such options, warrants or other rights as a result of the Transactions. All outstanding shares of Company Stock and any such options, warrants and rights have been issued and granted in compliance with, in all material respects, (x) all applicable Legal Requirements, and (y) all requirements set forth in any applicable Material Company Group Contracts. The Company has delivered to ARWA true and accurate copies of the forms of documents used for the issuance of any such options, warrants and rights and a true and complete list of the holders thereof, including their names and the numbers of shares of Company Stock underlying such options, warrants and rights.

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(c) Except as set forth in Section 3.3(a) or as otherwise contemplated by this Agreement, there are no outstanding subscriptions, options, warrants, equity securities, calls, rights (including preemptive rights), commitments or agreements of any character to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any Company Stock, or obligating the Company to grant, extend, accelerate the vesting, exercisability, exchangeability or convertibility of, or enter into, any such subscription, option, warrant, equity security, call, right, commitment or agreement, including, without limitation, as a result of the entry into this Agreement or the consummation of the Transactions. No outstanding shares of Company Stock are unvested or subject to a repurchase option, risk of forfeiture or other condition under any agreement of any character with the Company.

(d) Except as contemplated by this Agreement, there are no outstanding registrations rights, voting trusts, proxies, rights plans, anti-takeover plans or other similar agreements with respect to the voting or transfer of the Company Stock to which the Company is a party.

(e) The Contribution Shares and True-up Shares, upon issuance in accordance with the terms of this Agreement (including the payment to the Company of the applicable purchase price), will be duly authorized, validly issued and such Company Shares will be fully paid and nonassessable.

3.4 Authority Relative to this Agreement . The Company has full corporate power and authority to: (a) execute and deliver this Agreement and the Transaction Documents to which it is a party, (b) perform its obligations hereunder and thereunder and (c) consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Transaction Documents to which it is a party by the Company and the consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of the Company . This Agreement and the Transactions Documents to which it is a party have been or will be, as applicable, duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery hereof and thereof by each other party hereto, constitute or will constitute, as applicable, the legal and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

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3.5 No Conflict; Required Filings and Consents .

(a) The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company shall not, (i) conflict with or violate the Company’s or any Company Group Member’s Charter Documents, (ii) conflict with or violate any Legal Requirements, (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair the Company’s rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of any Company Group Contract (as defined in Section 3.19), or (iv) result in the creation of a Lien (other than Permitted Lien) on any of the properties or assets of the Company Group pursuant to any Company Group Contract (as defined in Section 3.19), except, with respect to clauses (ii), (iii) or (iv), for any such conflicts, violations, breaches, defaults, triggerings, accelerations, increases or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on the Company Group.

(b) The execution and delivery of this Agreement by the Company does not, and the performance of its obligations hereunder will not, require any Governmental Action/Filing by any Company Group Member or consent, approval, authorization or permit of, or filing with or notification to, any other third party (including, without limitation, lenders and lessors) by any Company Group Member , except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, blue sky laws and the rules and regulations thereunder, and appropriate documents received from or filed with the relevant authorities of other jurisdictions in which the Company is licensed or qualified to do business, (ii) the consents, approvals, authorizations and permits described in Schedule 3 .5(b) , (iii) AWN Shareholder Approval, and (iv) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, have a Material Adverse Effect on the Company Group or prevent consummation of the Transactions or otherwise prevent the parties hereto from performing their obligations under this Agreement.

3.6 Compliance . The Company Group has complied with and is not in violation of any Legal Requirements with respect to the conduct of its business, or the ownership or operation of its business, except for failures to comply or violations that would not, individually or in the aggregate, have a Material Adverse Effect on the Company Group. No written notice of material non-compliance with any Legal Requirements applicable to the Company Group has been received by the Company Group. The Company Group is not in violation of any term of any Material Company Group Contract (as defined in Section 3.19), except for violations which, individually or in the aggregate, would not have a Material Adverse Effect on the Company Group.

3.7 Financial Statements .

(a) The Company has made available to ARWA true and complete copies of the audited consolidated financial statements (including any related notes thereto) of the Company and of Aevitas Group Limited (“ Aevitas ”) and VivoPower Pty Ltd (“ VivoPower Pty ”) and their respective Subsidiaries as of and for the fiscal years ended March 31, 2016 and 2015 (the “ Financial Statements ”).

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(b) The Financial Statements comply as to form, and were prepared in accordance, in all material respects, with International Financial Reporting Standards (“ IFRS ”) applied on a consistent basis throughout the periods involved, and fairly present in all material respects the financial position of the Company and of Aevitas and VivoPower Pty and their respective Subsidiaries at the date thereof and the results of their operations and cash flows for the period indicated.

(c) There are no outstanding loans or other extensions of credit made by the Company Group to any executive officer (as defined in Rule 3b -7 under the Exchange Act) or director of the Company that would be prohibited by Section 402 of the Sarbanes -Oxley Act if such section were applicable to the Company Group .

(d) The books of account, minute books and transfer ledgers and other similar books and records of the Company Group have been maintained in accordance with, in all material respects, good business practice, are complete and correct in all material respects and there have been no material transactions that are required to be set forth therein and which have not been so set forth.

(e) Except as otherwise noted in the Financial Statements, the accounts and notes receivable reflected therein: (i) arose from bona fide sales transactions in the ordinary course of business and are payable on ordinary trade terms, (ii) are legal, valid and binding obligations of the respective debtors enforceable in accordance with their terms, except as such may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting creditors’ rights generally, and by general equitable principles, (iii) are not subject to any valid set-off or counterclaim to which the Company has been notified in writing as of the date hereof except to the extent set forth in such balance sheet contained therein, and (iv) are not the subject of any actions or proceedings brought by or on behalf of the Company Group as of the date hereof.

(f) To the knowledge of the Company, the auditors of the Financial Statements have at all required times since the date of enactment of the Sarbanes-Oxley Act been: (i) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act); (ii) “independent” with respect to the Company within the meaning of Regulation S-X under the Exchange Act; and (iii) in compliance with subsections (g) through (l) of Section 10A of the Exchange Act and the rules and regulations promulgated by the SEC and the Public Company Accounting Oversight Board thereunder.

3.8 No Undisclosed Liabilities . The Company Group has no liabilities of a nature required to be disclosed on a balance sheet or in the related notes to financial statements prepared in accordance with IFRS, except: (i) liabilities provided for in or otherwise disclosed in the balance sheet included in the Financial Statements or in the notes to the Financial Statements, or (ii) such liabilities arising in the ordinary course of the Company’s business since the latest balance sheet date of the Financial Statements, none of which, individually or in the aggregate, would have a Material Adverse Effect on the Company Group.

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3.9 Absence of Certain Changes or Events . Except as contemplated by this Agreement or as disclosed in the Financial Statements, since the latest balance sheet date of the Financial Statements, there has not been: (a) any Material Adverse Effect on the Company Group, (b) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of the Company Group’s capital stock, or any purchase, redemption or other acquisition by the Company Group of any of the Company Group’s capital stock or any other securities of the Company Group or any options, warrants, calls or rights to acquire any such shares or other securities, (c) any split, combination or reclassification of any of the Company Group’s capital stock, (d) any granting by the Company Group of any increase in compensation or fringe benefits, except for normal increases of cash compensation in the ordinary course of business , or any payment by the Company Group of any bonus, except for bonuses made in the ordinary course of business, or any granting by the Company Group of any increase in severance or termination pay or any entry by the Company Group into any currently effective employment, severance, termination or indemnification agreement or any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving the Company Group of the nature contemplated hereby, (e) entry by the Company Group into any licensing or other agreement with regard to the acquisition or disposition of any Intellectual Property other than licenses in the ordinary course of business or any amendment or consent with respect to any licensing agreement filed or required to be filed by the Company with respect to any Governmental Entity, (f) any material change by the Company Group in its accounting methods, principles or practices, except as required by concurrent changes in IFRS, (g) any change in the auditors of the Company Group, (h) any issuance of capital stock of the Company Group, or (i) any revaluation by the Company Group of any of its assets, including, without limitation, writing down the value of capitalized inventory or writing off notes or accounts receivable or any sale of assets of the Company Group other than in the ordinary course of business.

3.10 Litigation . Except as disclosed in Schedule 3.10 hereto, there are no material claims, suits, actions or proceedings pending or, to the knowledge of the Company, threatened in writing against the Company Group before any court, governmental department, commission, agency, instrumentality or authority, or any arbitrator.

3.11 Employee Benefit Plans .

(a) All employee compensation, incentive, fringe or benefit plans, programs, policies, commitments or other arrangements (whether or not set forth in a written document) covering any active or former employee, director or consultant of the Company Group, or any trade or business (whether or not incorporated) which is under common control with the Company Group, with respect to which the Company Group has liability (individually, a “ Plan ,” and, collectively, the “ Plans ”) have been maintained and administered in all material respects in compliance with their respective terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Plans, and all liabilities with respect to the Plans have been properly reflected in the financial statements and records of the Company Group. No suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of Plan activities) has been brought, or, to the knowledge of the Company, is threatened in writing, against or with respect to any Plan. There are no audits, inquiries or proceedings pending or, to the knowledge of the Company, threatened in writing by any Governmental Entity with respect to any Plan. All contributions, reserves or premium payments required to be made or accrued as of the date hereof to the Plans have been timely made or accrued. The Company Group does not have any plan or commitment to establish any new Plan, to modify any Plan (except to the extent required by law or to conform any such Plan to the requirements of any applicable law, in each case as previously disclosed to ARWA in writing, or as required by this Agreement), or to enter into any new Plan.

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(b) Except as disclosed in Schedule 3 .11 (b) hereto, neither the execution and delivery of this Agreement nor the consummation of the Transactions will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any shareholder, director, officer or employee of the Company Group under any Plan or otherwise, (ii) materially increase any benefits otherwise payable under any Plan, or (iii) result in the acceleration of the time of payment or vesting of any such benefits.

(c) The representations and warranties set forth in this Section 3.11 are sole and exclusive representations and warranties with respect to employee benefit matters relating to the Company Group.

3.12 Labor Matters .

(a) Except for those which have been made available to ARWA, the Company Group is not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by the Company Group nor does the Company know of any activities or proceedings of any labor union to organize any such employees. There are no pending grievance or similar proceedings involving the Company Group and any of its employees subject to a collective bargaining agreement or other labor union contract and there are no continuing obligations of the Company Group pursuant to the resolution of any such proceeding that is no longer pending.

(b) Except as provided for in the collective bargaining agreements and labor union contracts which have been made available to ARWA, each employee and consultant of the Company Group is terminable “at will” subject to applicable notice periods as set forth by law or in the applicable employment or consulting agreement, and there are no agreements or understandings between the Company Group and any of its employees or consultants that their employment or services will be for any particular period. The Company is not aware that any of the Company Group’s officers or key employees intends to terminate his or her employment with the Company Group . The Company Group is in compliance in all material respects and, to the Company’s knowledge, each of its employees and consultants is in compliance in all material respects, with the terms of the respective employment and consulting agreements between the Company Group and such individuals. There are not, and there have not been, any oral or informal arrangements, commitments or promises between the Company Group and any employees or consultants of the Company Group that have not been documented as part of the formal written agreements between any such individuals and the Company Group that have been made available to ARWA .

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(c) The Company Group is in compliance in all material respects with all Legal Requirements applicable to its employees, respecting employment, employment practices, terms and conditions of employment and wages and hours and is not liable for any arrears of wages or penalties with respect thereto. The Company has no knowledge of any circumstance that could give rise to any valid claim by a current or former employee for compensation on termination of employment (beyond the statutory severance pay to which employees are entitled). All amounts that the Company Group is legally or contractually required either (x) to deduct from its employees’ salaries or to transfer to such employees’ pension or provident, life insurance, incapacity insurance, continuing education fund or other similar funds or (y) to withhold from its employees’ salaries and benefits and to pay to any Governmental Entity as required by applicable Legal Requirements have, in each case, been duly deducted, transferred, withheld and paid, and the Company Group does not have any outstanding obligation to make any such deduction, transfer, withholding or payment. There are no pending, or to the Company’s knowledge, threatened in writing, claims or actions against the Company Group by any employee in connection with such employee’s employment or termination of employment by the Company Group .

(d) No employee or former employee of the Company Group is owed any wages, benefits or other compensation for past services (other than wages, benefits and compensation accrued in the ordinary course of business during the current pay period and any accrued benefits for services, which by their terms or under applicable law, are payable in the future, such as accrued vacation, recreation leave and severance pay).

(e) The representations and warranties set forth in this Section 3.12 are sole and exclusive representations and warranties with respect to labor matters relating to the Company Group.

3.13 Restrictions on Business Activities . Except as disclosed in Schedule 3.13 , there is no agreement, commitment, judgment, injunction, order or decree binding upon the Company Group or its assets or to which the Company Group is a party which impairs or restricts any business practice of the Company Group, any acquisition of property by the Company Group or the conduct of business by the Company Group as currently conducted, other than such restrictions, the non-compliance with which would not, individually or in the aggregate, have a Material Adverse Effect on the Company Group.

3.14 Title to Property .

(a) The Company Group does not own any real property.

(b) All leases pursuant to which the Company Group leases from others material real property or Personal Property are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default of the Company Group or, to the Company’s knowledge, any other party (or any event which with notice or lapse of time, or both, would constitute a material default), except where the lack of such validity and effectiveness or the existence of such default or event of default would not have a Material Adverse Effect on the Company Group. The Company Group has good and marketable title to the personal property and other property and assets of the Company Group owned, used or held for use in connection with the business of the Company Group (the “ Personal Property ”), and all such Personal Property is in each case held free and clear of all Liens, other than Permitted Liens.

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(c) The Company Group is in possession of, or has valid and effective rights to, all properties, assets and rights (including, without limitation, real property, Personal Property and Intellectual Property) required for the effective conduct of its business in all material respects, as it is currently conducted and expected to be conducted in the future.

3.15 Taxes .

(a) The Company Group has timely filed all federal, state, local and foreign returns, estimates, information statements and reports relating to Taxes (“ Returns ”) required to be filed by the Company Group with any Tax authority prior to the date hereof, except such Returns that are not material to the Company Group. All such Returns are true, correct and complete in all material respects. The Company Group has paid all Taxes shown to be due and payable on such Returns.

(b) All Taxes that the Company Group is required by law to withhold or collect have been duly withheld or collected, and have been timely paid over to the proper governmental authorities to the extent due and payable.

(c) The Company Group has not been delinquent in the payment of any Tax nor is there any Tax deficiency outstanding, proposed or assessed against the Company Group, nor has the Company Group executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax. The Company Group has complied, in all material respects, with all Legal Requirements with respect to payments made to third parties and the withholding of any payment of withheld Taxes and has timely withheld from employee wages and other payments and timely paid over in full to the proper taxing authorities all amounts required to be so withheld and paid over for all periods.

(d) To the knowledge of the Company Group, no audit or other examination of any Return of the Company Group by any Tax authority is presently in progress, nor has the Company Group been notified of any request for such an audit or other examination.

(e) No adjustment relating to any Returns filed by the Company Group has been proposed in writing, formally or informally, by any Tax authority to the Company Group or any representative thereof.

(f) The Company Group has no liability for any unpaid Taxes which have not been accrued for or reserved in the Financial Statements, other than any liability for unpaid Taxes that may have accrued since the end of the most recent fiscal year in connection with the operation of the business of the Company Group in the ordinary course of business.

(g) The representations and warranties set forth in this Section 3.15 are sole and exclusive representations and warranties with respect to tax matters relating to the Company Group.

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3.16 Environmental Matters . The Company Group has complied with all applicable Environmental Laws , except for failures to comply or violations that would not, individually or in the aggregate, have a Material Adverse Effect on the Company Group. Without limiting the generality of the foregoing, (a) the properties currently operated or being constructed by the Company Group (including soils, groundwater, surface water, air, buildings or other structures) are not contaminated with any Hazardous Substances; (b) the properties formerly owned, operated or constructed by the Company Group were not contaminated with Hazardous Substances during the period of ownership, operation or construction by the Company Group or during any prior period; (c) the Company Group is not subject to liability for any Hazardous Substance disposal or contamination on any third party or public property; (d) the Company Group has not experienced any actual or threatened release of any Hazardous Substance into the environment in violation of any Environmental Law; and (e) the Company is not subject to any orders, decrees, injunctions or other arrangements with any Governmental Entity or subject to any indemnity or other agreement with any third party relating to liability under any Environmental Law or relating to Hazardous Substances. The Company Group has not received any written notice, demand, letter, claim or request for information alleging that the Company Group may be in violation of or liable under any Environmental Law.

3.17 Brokers; Third Party Expenses . No member of the Company Group has incurred or will incur, directly or indirectly, any liability for brokerage, finders’ fees, agent’s commissions or any similar charges in connection with this Agreement or the Transactions.

3.18 Intellectual Property .

(a) The Company Group owns or has enforceable rights to use all Intellectual Property required for the conduct of its business as presently conducted or as presently contemplated to be conducted. No Company Group Intellectual Property or Company Group Product is subject to any material proceeding or outstanding decree, order, judgment, contract, license, agreement or stipulation restricting in any manner the use, transfer or licensing thereof by the Company Group, or which may affect the validity, use or enforceability of such Company Group Intellectual Property or Company Group Product, which in any such case could reasonably be expected to have a Material Adverse Effect on the Company Group.

(b) The Company Group owns and has good and exclusive title to each material item of Company Group Intellectual Property owned by it free and clear of any Liens (excluding non-exclusive licenses and related restrictions granted by it in the ordinary course of business); and the Company Group is the exclusive owner of all material registered Trademarks and Copyrights and all material Patents used in connection with the business of the Company Group as presently conducted or as presently contemplated to be conducted, including the sale of any products or the provision of any services by the Company Group.

(c) To the knowledge of the Company, the operation of the business of the Company Group as such business currently is conducted or is contemplated to be conducted, including the Company Group’s use of any product, device or process, has not, does not and will not infringe or misappropriate the Intellectual Property of any third party or constitute unfair competition or trade practices under the laws of any jurisdiction and the Company Group has not received any claims or threats from third parties alleging any such infringement, misappropriation or unfair competition or trade practices.

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(d) The representations and warranties set forth in this Section 3.18 are sole and exclusive representations and warranties with respect to intellectual property matters relating to the Company Group.

3.19 Agreements, Contracts and Commitments .

(a) Schedule 3 .19 hereto sets forth a complete and accurate list of the following Contracts (collectively, the “ Material Company Group Contracts ”) to which the Company Group is a party or by or to which any of the properties or assets of the Company Group may be bound, subject or affected, excluding Contracts made in the ordinary course of business for the purchase of equipment and supplies for the construction of solar projects (the “ Company Group Contracts ”):

(i) each Contract providing for payments (present or in the next five years) to the Company Group in excess of $1.25 million in the aggregate;

(ii) any Contract under or in respect of which the Company Group presently has any liability or obligation in excess of (present or in the next five years) $1.25 million;

(iii) any Contract between the Company Group, on the one hand, and any officer, director, employee, shareholder or holder of derivative securities (“ I nsider ”) of the Company Group or an Affiliate of an Insider of the Company Group, on the other hand, excluding contracts of employment or similar, or contracts relating to the Contingent Acquisitions or Aevitas acquisitions elsewhere disclosed, and excluding transactions between Company Group Members and their wholly owned subsidiaries;

(iv) any Contract involving any guaranty, direct or indirect, by the Company Group of any obligation for borrowings or otherwise in excess of $500,000, excluding endorsements made for collection in the ordinary course of business and indebtedness or cross guarantees between parent and subsidiary entities or similar;

(v) any Contract made other than in the ordinary course of business or (x) providing for the grant of any preferential rights to purchase or lease any asset of the Company Group or (y) providing for any right (exclusive or non-exclusive) to sell or distribute, or otherwise relating to the sale or distribution of, any product or service of the Company Group;

(vi) any Contract to register any shares of the capital stock or other securities of the Company Group with any Governmental Entity;

(vii) any Contract to make payments, contingent or otherwise, arising out of the prior acquisition of the business, assets or stock of other Persons; and

(viii) any Company Group Contract for the acquisition of a business within the last twenty-four months.

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Each Material Company Group Contract was entered into at arms’ length and in the ordinary course, is in full force and effect and, to the Company’s knowledge, is valid and binding upon and enforceable against each of the parties thereto, except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies. To the Company’s knowledge, no other party to a Material Company Group Contract is the subject of a bankruptcy or insolvency proceeding. True and correct copies of all Material Company Group Contracts and all offers and proposals that, if accepted, would constitute Material Company Group Contracts (or written summaries in the case of oral Material Company Group Contracts or offers or proposals) have been provided to ARWA. Except as set forth in Schedule 3.19 , neither the Company Group Members nor, to the best of the Company’s knowledge, any other party thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any Material Company Group Contract, and no party to any Material Company Group Contract has given any written notice of any claim of any such breach, default or event, which, individually or in the aggregate, would have a Material Adverse Effect on the Company.

3.20 Insurance . The coverages provided by the Company Group’s insurance policies and fidelity and surety bonds covering the assets, business, equipment, properties, operations, employees, officers and directors are adequate in amount and scope for the Company Group’s business and operations, including any insurance required to be maintained by Company Group Contracts.

3.21 Governmental Actions/Filings . The Company Group has been granted and holds, and has made, all material Governmental Actions/Filings necessary to the conduct of the business of the Company Group as presently conducted or used or held for use by the Company Group. Each such Governmental Action/Filing is in full force and effect and the Company Group is in substantial compliance with all of its obligations with respect thereto. No event has occurred and is continuing which requires or permits, or after notice or lapse of time or both would require or permit, and consummation of the Transactions or any ancillary documents will not require or permit (with or without notice or lapse of time, or both), any modification or termination of any such Governmental Actions/Filings except such events which, either individually or in the aggregate, would not have a Material Adverse Effect upon the Company Group.

3.22 Interested Party Transactions . Except as disclosed in Schedule 3.22 , no Insider of the Company Group or a member of his or her immediate family is indebted to any member of the Company Group, nor is any member of the Company Group indebted (or committed to make loans or extend or guarantee credit) to any of such Persons, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of a member of the Company Group, and (iii) for other employee benefits made generally available to all employees. Except as set forth in Schedule 3.22 , to the knowledge of the Company, no Insider of the Company Group or any member of his or her immediate family is, directly or indirectly, interested in any Material Company Group Contract (other than such contracts as relate to any such Person’s ownership of capital stock or other securities of the Company Group or such Person’s employment with the Company Group).

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3.23 Listing . As of the Closing, the Company Shares shall be listed or approved for initial listing on The Nasdaq Stock Market LLC (“ Nasdaq ”).

3.24 Board Approval . The board of directors of the Company (including any required committee or subgroup thereof) has, as of the date of this Agreement, duly approved this Agreement and the Transactions.

3.25 N o Other Representations and Warranties; Non-Reliance . Except for the specific representations and warranties contained in this Agreement, none of AWN or the Company Group, or their respective Affiliates, or any other Person on behalf of AWN or the Company Group or any of the Company Group’s Affiliates , has made, makes or shall be deemed to make, any other express or implied representation or warranty (including any representation or warranty with respect to any projection or forecast with respect to the Company Group or any other information provided to ARWA or ARWA’s Affiliates or representatives), and AWN and the Company Group disclaim any such representation or warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing). The Company agrees that neither it nor any of its Affiliates has relied upon or is relying upon any representations or warranties of any kind other than the specific representations and warranties expressly made by ARWA in this Agreement.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ARWA

Subject to the exceptions set forth in Schedule 4 attached hereto (the “ ARWA Schedule ”), ARWA represents and warrants to, and covenants with, the Company, as follows (as used in this Article IV, and elsewhere in this Agreement, the term “ARWA” includes ARWA’s Subsidiaries, unless the context clearly otherwise indicates):

4.1 Organization and Qualification . ARWA is a company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands, and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted. ARWA is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being conducted, except where the failure to have such Approvals would not, individually or in the aggregate, to have a Material Adverse Effect on ARWA.

4.2 Warrants, Rights, Etc . Except as disclosed in the ARWA SEC Reports, ARWA has no convertible securities, exchangeable securities, warrants, options or other rights outstanding that, pursuant to their terms, as a result of the consummation of the Transactions, will become convertible, exchangeable or exercisable for any shares, warrants, options or other securities of the Company.

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4.3 Authority Relative to this Agreement . ARWA has full corporate power and authority to: (i) execute, deliver and perform this Agreement, and each ancillary document that ARWA has executed or delivered or is to execute or deliver pursuant to this Agreement, and (ii) carry out ARWA’s obligations hereunder and thereunder and, to consummate the transactions contemplated hereby and thereby (including the Transactions). The execution and delivery of this Agreement by ARWA and the consummation by ARWA of the transactions contemplated hereby (including the Transactions) have been duly and validly authorized by all necessary corporate action on the part of ARWA, and no other corporate proceedings on the part of ARWA are necessary to authorize this Agreement or to consummate the Transactions, other than the ARWA Shareholder Approval. This Agreement has been duly and validly executed and delivered by ARWA and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes the legal and binding obligation of ARWA, enforceable against ARWA in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

4.4 No Conflict; Required Filings and Consents .

(a) The execution and delivery of this Agreement by ARWA do not, and the performance of this Agreement by ARWA shall not: (i) conflict with or violate ARWA’s Charter Documents, (ii) conflict with or violate any Legal Requirements, or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair ARWA’s rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any of the properties or assets of ARWA pursuant to, any Contract to which ARWA is a party or by or to which any of the properties or assets of ARWA may be bound (an “ ARWA Contract ”), except, with respect to clauses (ii) or (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on ARWA.

(b) The execution and delivery of this Agreement by ARWA does not, and the performance of its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, blue sky laws, and the rules and regulations thereunder, and appropriate documents with the relevant authorities of other jurisdictions in which ARWA is qualified to do business, (ii) the qualification of ARWA as a foreign corporation in those jurisdictions in which the business of the Company makes such qualification necessary, and (iii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, have a Material Adverse Effect on ARWA, or prevent consummation of the Transactions or otherwise prevent the parties hereto from performing their obligations under this Agreement.

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4.5 ARWA SEC Reports and Financial Statements .

(a) ARWA has timely filed all required registration statements, reports, schedules, forms, statements and other documents required to be filed by it with the SEC since April 30, 2015 (collectively, as they have been amended since the time of their filing and including all exhibits thereto, the “ ARWA SEC Reports ”). None of the ARWA SEC Reports, as of their respective dates (or if amended or superseded by a filing prior to the date of this Agreement or the Closing Date, then on the date of such filing), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The audited financial statements of ARWA (“ ARWA Audited Financial Statements ”) and unaudited interim financial statements of ARWA (“ ARWA Unaudited Financial Statements ” and, together with the ARWA Audited Financial Statements, the “ ARWA Financial Statements ”) (including, in each case, the notes and schedules thereto) included in the ARWA SEC Reports complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with U.S. GAAP applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10 -Q of the SEC) and fairly present (subject, in the case of the unaudited interim financial statements included therein, to normal year-end adjustments and the absence of complete footnotes) in all material respects the financial position of ARWA and its Subsidiaries as of the respective dates thereof and the results of their operations and cash flows for the respective periods then ended.

(b) ARWA has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to ensure that material information relating to ARWA is made known to ARWA’s principal executive officer and its principal financial officer, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. To ARWA’s knowledge, such disclosure controls and procedures are effective in timely alerting ARWA’s principal executive officer and principal financial officer to material information required to be included in ARWA’s periodic reports required under the Exchange Act.

(c) ARWA has established and maintained a system of internal controls. To the Company’s knowledge, such internal controls are sufficient to provide reasonable assurance regarding the reliability of ARWA’s financial reporting and the preparation of ARWA’s financial statements for external purposes in accordance with U.S. GAAP.

(d) There are no outstanding loans or other extensions of credit made by ARWA to any executive officer (as defined in Rule 3b -7 under the Exchange Act) or director of ARWA . ARWA has not taken any action prohibited by Section 402 of the Sarbanes-Oxley Act.

(e) The books of account, minute books and transfer ledgers and other similar books and records of ARWA and its Subsidiaries have been maintained in accordance with good business practice, are complete and correct in all material respects and there have been no material transactions that are required to be set forth therein and which have not been so set forth.

(f) Except as otherwise noted in the ARWA Financial Statements, the accounts and notes receivable of ARWA and its Subsidiaries reflected in the ARWA Financial Statements: (i) arose from bona fide sales transactions in the ordinary course of business and are payable on ordinary trade terms, (ii) are legal, valid and binding obligations of the respective debtors enforceable in accordance with their terms, except as such may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting creditors’ rights generally, and by general equitable principles, (iii) are not subject to any valid set-off or counterclaim to which ARWA has been notified in writing as of the date hereof except to the extent set forth in such balance sheet contained therein, and (iv) are not the subject of any actions or proceedings brought by or on behalf of ARWA or any of its subsidiaries as of the date hereof.

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4.6 No Undisclosed Liabilities . ARWA (including its Subsidiaries) has no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet or in the related notes to ARWA Financial Statements that are, individually or in the aggregate, material to the business, results of operations or financial condition of the Company, except: (i) liabilities provided for in or otherwise disclosed in the balance sheet included in the most recent ARWA Financial Statements or in the notes to the most recent ARWA Financial Statements, and (ii) such liabilities arising in the ordinary course of the Company’s business since the date of the most recent ARWA Financial Statement, none of which, individually or in the aggregate, would have a Material Adverse Effect on ARWA and its Subsidiaries taken as a whole.

4.7 Litigation . There are no claims, suits, actions or proceedings pending or to ARWA’s knowledge, threatened against ARWA, before any Governmental Entity.

4.8 Brokers . Except as set forth in Schedule 4.8 , ARWA has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders’ fees or agent’s commissions or any similar charges in connection with this Agreement or the Transactions.

4.9 Interested Party Transactions . No Insider of ARWA or a member of his or her immediate family is indebted to ARWA, nor is ARWA indebted (or committed to make loans or extend or guarantee credit) to any of such Persons, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of ARWA, and (iii) for other employee benefits made generally available to all employees. Except as set forth in Schedule 3.22 , to the knowledge of ARWA, no Insider of ARWA or a member of his or her immediate family is directly or indirectly a party to or has a material interest in any ARWA Contract (other than such contracts as relate to any such Person’s ownership of capital stock or other securities of ARWA or such Person’s employment with ARWA).

4.10 Listing . The ARWA Ordinary Shares are listed on the Nasdaq. There is no action or proceeding pending or, to ARWA’s Knowledge, threatened against ARWA by the Nasdaq with respect to any intention by such entity to prohibit or terminate the listing of the ARWA Ordinary Shares on the Nasdaq .

4.11 Board Approval . The board of directors of ARWA has, as of the date of this Agreement, subject to the ARWA Shareholder Approval, unanimously (i) approved this Agreement and the Transactions and (ii) determined that the Transactions are in the best interests of the shareholders of ARWA .

4.12 Trust Fund . As of the date hereof and as of immediately prior to the Closing, ARWA has and will have no less than $84,456,000 in a trust account administered by Continental (the “ Trust Fund ”), less such amounts, if any, as ARWA is required to pay to shareholders who exercise their Conversion Rights in accordance with the provisions of ARWA’s Charter Documents, as now in effect or hereafter amended.

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4.13 No Other Representations and Warranties; Non-Reliance . Except for the specific representations and warranties contained in this Agreement, none of ARWA, ARWA’s Affiliates or any other Person on behalf of ARWA or any of ARWA’s Affiliates has made, makes or shall be deemed to make, any other express or implied representation or warranty, and ARWA disclaims any such representation or warranty disclaims any such representation or warranty. ARWA agrees that neither it nor any of its Affiliates has relied upon or is relying upon any representations or warranties of any kind, whether written or oral, express or implied, other than the specific representations and warranties expressly made by AWN or the Company in this Agreement .

ARTICLE V
CONDUCT PRIOR TO THE CLOSING DATE

5.1 Conduct of Business by the Company . Except as contemplated by this Agreement or as otherwise consented to in writing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company and ARWA shall, and shall cause each of their respective Subsidiaries to, carry on its business in the usual, regular and ordinary course, and in compliance with all applicable Legal Requirements (except where noncompliance would not have a Material Adverse Effect), pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes, pay or perform other material obligations when due, and use its commercially reasonable best efforts to (i) preserve substantially intact its present business organization, (ii) keep available the services of its present key officers and employees and (iii) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. Without limiting the generality of the foregoing, except as required or permitted by the terms of this Agreement and except as required by applicable Legal Requirements, without the prior written consent of the other party (which consent shall not be unreasonably withheld), during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company and ARWA shall not, and shall not permit any of their respective Subsidiaries to, do any of the following:

(a) Waive any stock repurchase rights, accelerate, amend or (except as specifically provided for herein) change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;

(b) Grant any material severance or termination pay to (i) any officer or (ii) any employee, except pursuant to applicable law, written agreements outstanding, or policies existing on the date hereof, or adopt any new material severance plan, or amend or modify or alter in any manner any material severance plan, agreement or arrangement existing on the date hereof;

(c) Transfer or license to any person or otherwise extend, amend or modify any material rights to any Intellectual Property or enter into grants to transfer or license to any person future patent rights, other than in the ordinary course of business provided that in no event shall the Company Group or ARWA license on an exclusive basis or sell any Intellectual Property;

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(d) Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property in respect of any capital stock or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;

(e) Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock or other equity securities or ownership interests of the Company Group or ARWA;

(f) Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any shares of capital stock or other equity securities or ownership interests or any securities convertible into or exchangeable for shares of capital stock or other equity securities or ownership interests, or subscriptions, rights, warrants or options to acquire any shares of capital stock or other equity securities or ownership interests or any securities convertible into or exchangeable for shares of capital stock or other equity securities or other ownership interests, or enter into other agreements or commitments of any character obligating it to issue any such shares, equity securities or other ownership interests or convertible or exchangeable securities;

(g) Amend its Charter Documents, other than any amendment by ARWA necessary to extend the time for ARWA to complete an initial business combination and to provide the holders of Public Shares the opportunity to convert their shares into a pro rata portion of the Trust Fund in connection therewith;

(h) Other than the Contingent Acquisitions and the acquisition of Aevitas or in the ordinary course of business, acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of ARWA or the Company Group, as applicable, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services; it being acknowledged and agreed that, for purposes of this paragraph, “material” includes the requirement that, as a result of such transaction, financial statements of the acquired, merged or consolidated entity be included in the Proxy Statement/Prospectus;

(i) Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) in the ordinary course of business, and (B) the sale, lease or disposition (other than through licensing) of property or assets that are not material, individually or in the aggregate, to the business of such party;

(j) Adopt or amend any employee benefit plan, policy or arrangement, any employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business with employees who are terminable “at will”), pay any special bonus or special remuneration to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants, in each case except in the ordinary course of business or to conform to the requirements of any applicable law;

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(k) Pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement) other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of the APG Loan and any liabilities recognized or disclosed in the most recent Financial Statements or in the financial statements included in the ARWA SEC Reports filed prior to the date of this Agreement, as applicable, or incurred since the date of such financial statements in the ordinary course of business, or waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company is a party or of which the Company is a beneficiary or to which ARWA is a party or of which ARWA is a beneficiary, as applicable;

(l) Except in the ordinary course of business, modify, amend or terminate any Company Contract or ARWA Contract, as applicable, or waive, delay the exercise of, release or assign any material rights or claims thereunder;

(m) Except as required by IFRS, revalue any of its assets or make any change in accounting methods, principles or practices;

(n) Except in the ordinary course of business, incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $300,000 in any 12 month period;

(o) Settle any litigation where the consideration given is other than monetary or to which an Insider of ARWA or the Company Group, as applicable, is a party;

(p) Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income tax liability or, except as required by applicable law, materially change any method of accounting for Tax purposes;

(q) Form or establish any subsidiary except in the ordinary course of business or as contemplated by this Agreement;

(r) Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such plans;

(s) Make capital expenditures except in accordance with prudent business and operational practices;

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(t) Make or omit to take any action which would to have a Material Adverse Effect;

(u) Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, stockholders, managers, members or other Subsidiaries other than the payment of salary and benefits and tax distributions in the ordinary course of business consistent with prior practice; or

(v) Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 5.1 (a) through (v) above.

ARTICLE VI
ADDITIONAL AGREEMENTS

6.1 Registration Statement ; Shareholder and Warrantholder Meetings .

(a) As soon as is reasonably practicable after receipt by ARWA from the Company of all financial and other information relating to the Company as ARWA may reasonably request for its preparation, ARWA and the Company shall prepare and the Company shall file with the SEC under the Securities Act, and with all other applicable regulatory bodies, a Registration Statement on Form F-4 with respect to the issuance of Company Shares by the Company and the distribution thereof by ARWA (the “ Registration Statement ”), which shall include proxy materials for the purpose of:

(i) soliciting proxies from holders of ARWA Ordinary Shares to vote in favor of (A) the adoption of this Agreement and the approval of the Transactions (“ ARWA Shareholder Approval ”) and (B) the winding up, liquidation and dissolution of ARWA (the “ Dissolution Proposal ”), at a meeting of holders of ARWA Ordinary Shares to be called and held for such purpose (the “ Shareholder Meeting ”); and

(ii) soliciting proxies from holders of ARWA Warrants to vote, at a meeting of holders of ARWA Warrants (the “ Warrantholder Meeting ”), in favor of an amendment to the Warrant Agreement, dated April 30, 2015 (the “ Warrant Agreement ”), by and between ARWA and Continental, providing that, upon the consummation of the Transactions, each ARWA Warrant shall, automatically and without any action by the registered holder thereof, or any prior notice by ARWA, be exchanged and deemed transferred by such registered holder to ARWA in consideration for the right to receive payment in the amount of 1/20 ^th of one Company Share per ARWA Warrant (the “ Consideration ”), and such registered holder shall cease to have any rights with respect to the ARWA Warrants other than the right to receive the Consideration (“ ARWA Warrantholder Approval ”).

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Such proxy materials shall be in the form of a proxy statement/prospectus to be used for the purpose of soliciting proxies from holders of ARWA Ordinary Shares and ARWA Warrants for the matters to be acted upon at the Shareholder Meeting and Warrantholder Meeting and the distribution of the Company Shares (the “ Proxy Statement/Prospectus ”), which shall also be filed with the SEC on Schedule 14A. The Company shall furnish to ARWA all financial and other information concerning the Company as ARWA may reasonably request in connection with the preparation of the Proxy Statement/Prospectus. The Company and its counsel and ARWA and its counsel shall be given an opportunity to review and comment on the and Registration Statement prior to its filing with the SEC. ARWA and the Company shall promptly respond to any SEC comments on the Registration Statement and ARWA and the Company shall otherwise use commercially reasonable best efforts to cause the Registration Statement to be declared effective by the SEC as promptly as practicable. ARWA and the Company shall also take any and all actions required to satisfy the requirements of the Securities Act and the Exchange Act.

(b) As soon as practicable following the effectiveness of the Registration Statement, ARWA shall distribute the Proxy Statement/Prospectus to the holders of ARWA Ordinary Shares, ARWA Rights and ARWA Warrants and, pursuant thereto, shall call the Shareholder Meeting and Warrantholder Meeting in accordance with its Charter Documents, the Warrant Agreement and the Companies Law and, subject to the other provisions of this Agreement, solicit proxies from such holders to vote in favor of the adoption of this Agreement and the approval of the Transactions and the other matters presented to the shareholders and warrantholders of ARWA for approval or adoption at the Shareholder Meeting and the Warrantholder Meeting, including, without limitation, the matters described in Section 6.1(a).

(c) The Company and ARWA shall comply with all applicable provisions of and rules under the Securities Act and Exchange Act and all applicable provisions of the Companies Law and other applicable corporate law in the preparation, filing and distribution of the Registration Statement and the Proxy Statement/Prospectus, the solicitation of proxies thereunder, the calling and holding of the Shareholder Meeting and Warrantholder Meeting and the distribution of the Company Shares. Without limiting the foregoing, ARWA shall ensure that the Proxy Statement/Prospectus does not, as of the date on which it is first distributed to holders of ARWA Ordinary Shares and ARWA Warrants, and as of the date of the Shareholder Meeting and Warrantholder Meeting, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading (provided that ARWA shall not be responsible for the accuracy or completeness of any information relating to the Company or any other information furnished by the Company for inclusion in the Proxy Statement/Prospectus). The Company represents and warrants that the information relating to the Company supplied by the Company for inclusion in the Proxy Statement/Prospectus will not as of the date on which the Proxy Statement/Prospectus (or any amendment or supplement thereto) is first distributed to holders of ARWA Ordinary Shares or ARWA Warrants or at the time of the Shareholder Meeting or Warrantholder Meeting contain any statement which, at such time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or omits to state any material fact required to be stated therein or necessary in order to make the statement therein not false or misleading. ARWA represents and warrants that the information relating to ARWA supplied by ARWA for inclusion in the Proxy Statement/Prospectus will not as of the date on which the Proxy Statement/Prospectus (or any amendment or supplement thereto) is first distributed to holders of ARWA Ordinary Shares or ARWA Warrants or at the time of the Shareholder Meeting or Warrantholder Meeting contain any statement which, at such time and in light of the circumstances under which it is made, is false or misleading with respect to any material fact, or omits to state any material fact required to be stated therein or necessary in order to make the statement therein not false or misleading.

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(d) ARWA, acting through its board of directors, shall include in the Proxy Statement/Prospectus the recommendation of its board of directors that the holders of ARWA Ordinary Shares vote in favor of the adoption of this Agreement and the approval of the Transactions, and that the holders of ARWA Warrants vote in favor of the amendment to the Warrant Agreement contemplated hereby, and shall otherwise use commercially reasonable best efforts to obtain ARWA Shareholder Approval and ARWA Warrantholder Approval.

6.2 Directors and Officers of the Company After Transactions . The Parties shall take all necessary action so that the persons listed in Schedule 6.2 are elected to the positions of officers and directors of the Company, as set forth therein, to serve in such positions effective immediately after the Closing. If any Person listed in Schedule 6.2 is unable to serve, the Party appointing such Person shall designate a successor; provided that, if such designation is to be made after the Closing, any successor to a Person designated by ARWA shall be made by a majority of the individuals who were independent directors of ARWA as of the date of the Closing.

6.3 Other Actions .

(a) As promptly as practicable after execution of this Agreement, ARWA will prepare and file a Current Report on Form 8-K pursuant to the Exchange Act to report the execution of this Agreement (“ ARWA Signing Form 8-K ”), which the Company may review and comment upon prior to filing. Any language included in the Signing Form 8-K that reflects the Company’s comments, as well as any text as to which the Company has not commented upon being given a reasonable opportunity to comment, shall, notwithstanding the provisions of Section 6.1(a) and Section 6.4, be deemed to have been approved by the Company and may henceforth be used by ARWA in other filings made by it with the SEC and in other documents distributed by ARWA in connection with the transactions contemplated by this Agreement without further review or consent of the Company. Promptly after the execution of this Agreement, ARWA and the Company shall also issue a joint press release announcing the execution of this Agreement (the “ Signing Press Release ”).

(b) At least five (5) days prior to Closing, each of the Company and ARWA shall prepare a draft Report of Foreign Private Issuer on Form 6-K or Current Report on Form 8-K, as applicable, announcing the Closing, together with, or incorporating by reference, the financial statements prepared by the Company and its accountant, and such other information that may be required to be disclosed with respect to the Transactions in any report or form to be filed with the SEC (collectively, the “ Closing Form 8-K ”), each of which shall be in a form reasonably acceptable to the other Party. Prior to Closing, ARWA and the Company shall prepare a press release announcing the consummation of the Transactions hereunder (“ Closing Press Release ”). Concurrently with the Closing, ARWA shall distribute the Closing Press Release. Concurrently with the Closing, or as soon as practicable thereafter, each of the Company and ARWA shall file the Closing Form 8-K with the Commission.

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6.4 Required Information . In connection with the preparation of ARWA Signing Form 8-K, the Signing Press Release, the Proxy Statement/Prospectus, the Closing Form 8-K and the Closing Press Release, or any other statement, filing notice or application made by or on behalf of ARWA and/or the Company to any Government Entity or other third party in connection with Transactions and the other transactions contemplated hereby, and for such other reasonable purposes, the Company and ARWA each shall, upon request by the other, furnish the other with all financial and other information concerning themselves, their respective directors, officers and stockholders (including the directors of the Company to be appointed or elected effective as of the Closing pursuant to Section 6.2 hereof) and such other matters as may be reasonably necessary or advisable in connection with the Transactions. Each party warrants and represents to the other party that all such information shall be true and correct in all material respects and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. Any such information consisting of financial statements shall be prepared in accordance with IFRS, as modified by the rules and regulations of the SEC, applied on a consistent basis to prior periods and shall fairly present in all material respects the financial position of such party at the date thereof and the results of its operations and cash flows for the period indicated, except that any such interim financial statements shall be subject to normal audit adjustments that shall not be expected to have a Material Adverse Effect on such party taken as a whole and shall not include all footnotes.

6.5 Confidentiality; Access to Information .

(a) Confidentiality . Any confidentiality agreement previously executed by the parties shall be superseded in its entirety by the provisions of this Agreement. Subject to the provisions of Section 6.6, each party agrees to maintain in confidence any non-public information received from the other party, and to use such non-public information only for purposes of consummating the transactions contemplated by this Agreement. Such confidentiality obligations will not apply to (i) information which was known to the one party or their respective agents prior to receipt from the other party; (ii) information which is or becomes generally known; (iii) information acquired by a party or their respective agents from a third party who was not bound to an obligation of confidentiality; and (iv) disclosure required by law or stock exchange or regulatory authority rule. In the event this Agreement is terminated as provided in Article IX hereof, each party (i) will destroy or return or cause to be destroyed or returned to the other all documents and other material obtained from the other in connection with the Transactions contemplated hereby, and (ii) will use its commercially reasonable best efforts to delete from its computer systems all documents and other material obtained from the other in connection with the Transactions contemplated hereby.

(b) Access to Information .

(i) The Company will afford ARWA and its financial advisors, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of the Company during the period prior to the Closing to obtain all information concerning the business, including the status of business development efforts, properties, results of operations and personnel of the Company, as ARWA may reasonably request. No information or knowledge obtained by ARWA in any investigation pursuant to this Section 6.5 will affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Transactions.

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(ii) ARWA will afford the Company and its financial advisors, underwriters, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of ARWA during the period prior to the Closing to obtain all information concerning the business, including properties, results of operations and personnel of ARWA, as the Company may reasonably request. No information or knowledge obtained by the Company in any investigation pursuant to this Section 6.5 will affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Transactions.

6.6 Public Disclosure . From the date of this Agreement until the earlier of the Closing and termination of this Agreement pursuant to Article IX, the parties shall cooperate in good faith to jointly prepare all press releases and public announcements pertaining to this Agreement and the transactions governed by it, and no party shall issue or otherwise make any public announcement or communication pertaining to this Agreement or the transaction without the prior consent of ARWA (in the case of the Company) or the Company (in the case of ARWA), except as required by any legal requirement or by the rules and regulations of, or pursuant to any agreement of a stock exchange or trading system. Each party will not unreasonably withhold approval from the others with respect to any press release or public announcement. If any party determines with the advice of counsel that it is required to make this Agreement and the terms of the transaction public or otherwise issue a press release or make public disclosure with respect thereto, to the extent practicable, it shall, at a reasonable time before making any public disclosure, consult with the other party regarding such disclosure, seek such confidential treatment for such terms or portions of this Agreement or the transaction as may be reasonably requested by the other party and disclose only such information as is legally compelled to be disclosed. This provision will not apply to communications by any party to its counsel, accountants and other professional advisors.

6.7 Commercially Reasonable Best Efforts . Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use its commercially reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Transactions and the other transactions contemplated by this Agreement, including using commercially reasonable best efforts to accomplish the following: (a) the taking of all reasonable acts necessary to cause the conditions precedent set forth in Article VII to be satisfied, (b) the obtaining and/or making of all necessary Governmental Actions/Filings and the taking of all reasonable steps as may be necessary to avoid any suit, claim, action, investigation or proceeding by any Governmental Entity, (c) the obtaining of all consents, approvals or waivers from third parties required as a result of the transactions contemplated in this Agreement, including the consents referred to in Schedule 3.5(b) , (d) the defending of any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed, and (e) the execution or delivery of any additional instruments reasonably necessary to consummate the Transactions contemplated by, and to fully carry out the purposes of, this Agreement. This obligation shall include, on the part of ARWA, in connection with the Closing, sending a termination letter to Continental in substantially the form of Exhibit 6.7 attached to the Investment Management Trust Agreement by and between ARWA and Continental dated as of April 30, 2015. In connection with and without limiting the foregoing, ARWA and its board of directors and the Company and its board of directors shall, if any state takeover statute or similar statute or regulation is or becomes applicable to the Transactions or this Agreement, use its commercially reasonable best efforts to enable the Transactions to be consummated as promptly as practicable on the terms contemplated by this Agreement. Notwithstanding anything herein to the contrary, nothing in this Agreement shall be deemed to require ARWA or the Company to agree to any divestiture by itself or any of its affiliates of shares of capital stock or of any business, assets or property, or the imposition of any material limitation on the ability of any of them to conduct their business or to own or exercise control of such assets, properties and stock.

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6.8 Registration Rights Agreement . At the Closing, the Company, the Persons (the “ Investors ”) listed under “Investor” on the signature page to that certain Registration Rights Agreement with the Company dated April 30, 2015 (the “ Original Registration Rights Agreement ”) and AWN shall enter into a registration rights agreement (the “ Registration Rights Agreement ”), which will replace the Original Registration Rights Agreement, in form and substance mutually agreeable to the Company, the Investors and AWN, pursuant to which the Company will under certain circumstances agree to register for resale under the Securities Act (i) the Company Shares held by AWN as of immediately after the Closing and (ii) the Company Shares issued to the Investors in the Transactions or otherwise in respect of the “Registrable Securities” as defined in the Original Registration Rights Agreement.

6.9 Sale Restrictions . Concurrently with the execution of this Agreement, AWN shall have executed the lock-up agreement in the form of Exhibit 6.9 hereto (“ Lock-Up Agreement ”).

6.10 No Securities Transactions . Neither the Company nor any of its Subsidiaries, directly or indirectly, shall engage in any transactions involving the securities of ARWA prior to the time of the making of a public announcement of the transactions contemplated by this Agreement. The Company shall use its best efforts to require each of its officers, directors and employees, and shall use commercially reasonable best efforts to require each of its agents, advisors, contractors, associates, clients, customers and representatives, to comply with the foregoing requirement.

6.11 No Claim Against Trust Fund . Notwithstanding anything else in this Agreement, each of the Company and AWN acknowledges that it has read ARWA’s final prospectus dated April 30, 2015 and understands that ARWA has established the Trust Fund for the benefit of ARWA’s public shareholders and that ARWA may disburse monies from the Trust Fund only (a) to ARWA’s public shareholders in the event they elect to convert their shares into cash in accordance with ARWA’s Charter Documents and/or the liquidation of ARWA, (b) to ARWA after, or concurrently with, the consummation of a business combination, (c) solely with respect to interest earned on the monies held in the Trust Fund, to ARWA to pay its income or other tax obligations and for its working capital requirements. Each of the Company and AWN further acknowledges that, if the transactions contemplated by this Agreement, or, upon termination of this Agreement, another business combination, are not consummated by November 6, 2016, unless extended in accordance with ARWA’s Charter Documents, ARWA will be obligated to return to its shareholders the amounts being held in the Trust Fund. Accordingly, the Company and AWN, for themselves and their respective Subsidiaries, affiliated entities, directors, officers, employees, shareholders, representatives, advisors and all other associates and affiliates, hereby waive all rights, title, interest or claim of any kind against ARWA to collect from the Trust Fund any monies that may be owed to them by ARWA for any reason whatsoever, including but not limited to a breach of this Agreement by ARWA or any negotiations, agreements or understandings with ARWA (whether in the past, present or future), and will not seek recourse against the Trust Fund at any time for any reason whatsoever. This paragraph will survive this Agreement and will not expire and will not be altered in any way without the express written consent of ARWA and the Company.

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6.12 Disclosure of Certain Matters . Each of ARWA and the Company will provide the others with prompt written notice of any event, development or condition that (a) would cause any of such party’s representations and warranties to become untrue or misleading or which may affect its ability to consummate the transactions contemplated by this Agreement, (b) had it existed or been known on the date hereof would have been required to be disclosed under this Agreement, or (c) would require any amendment or supplement to the Proxy Statement/Prospectus. The parties shall have the obligation to supplement or amend the AWN Schedule, the Company Schedule and the ARWA Schedule (the “ Disclosure Schedules ”) being delivered concurrently with the execution of this Agreement with respect to any matter hereafter arising which, if existing or known at the date of this Agreement, would have been required to be set forth or described in the Disclosure Schedules; provided , that such no supplement or amendment shall be taken into account for purposes of determining the satisfaction of the conditions in Article VII or for the purposes of Sections 9.1(d) or 9.1(e). The obligations of the parties to amend or supplement the Disclosure Schedules being delivered herewith shall terminate upon the earlier of the termination of this Agreement pursuant to Article IX and the Closing Date.

6.13 Securities Listing . ARWA and the Company shall use commercially reasonable best efforts to obtain the listing for trading of the Company Shares on Nasdaq.

6.14 Acquisition Proposals . The Company agrees that (i) the Company and AWN and their respective officers and directors shall not, (ii) the Subsidiaries and their respective officers and directors shall not and (iii) the Company, AWN and the Subsidiaries shall use reasonable best efforts to ensure that their respective stockholders, investment bankers, financial advisors, attorneys, accountants, employees, consultants or other agents, advisors and representatives do not (A) directly or indirectly, initiate, solicit or knowingly encourage or facilitate any inquiries or the making, submission or reaffirmation of any proposal or offer with respect to a tender offer or exchange offer, merger, reorganization, share exchange, consolidation or other business combination involving any member of the Company Group or any proposal or offer to acquire in any manner an equity interest in any member of the Company Group, or the assets, securities or other ownership interests of or in any member of the Company Group, other than sales of assets in the ordinary course of business and the transactions contemplated by this Agreement (any such proposal or offer being hereinafter referred to as an “ Acquisition Proposal ”) or (B) directly or indirectly, engage in any negotiations or discussions concerning, or provide access to its properties, books and records or any confidential information or data to, any Person relating to an Acquisition Proposal or execute or enter into any agreement, understanding, letter of intent or arrangement with respect to any Acquisition Proposal.

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6.15 Charter Protections; Directors’ and Officers’ Liability Insurance .

(a) All rights to indemnification and advancement of expenses for acts or omissions occurring through the Closing Date now existing in favor of the current directors and officers of ARWA as provided in the Charter Documents of ARWA or in any indemnification agreements shall survive the Transactions and shall continue in full force and effect in accordance with their terms, and the Company shall assume all obligations of ARWA under such documents in full from and after the Closing . From and after the Closing, the Company shall provide rights to indemnification and advancement of expenses in favor of the directors and officers appointed in connection with Section 6.2, which are at least as favorable to such individuals as the rights to indemnification and advancement of expenses now existing in favor of the current directors and officers of ARWA, including by entering into indemnification agreements with such Persons.

(b) For a period of six (6) years after the Closing Date, each of ARWA and the Company shall cause to be maintained in effect the current policies of directors' and officers' liability insurance maintained by ARWA and the Company, respectively (or policies of at least the same coverage and amounts containing terms and conditions which are no less advantageous) , with respect to claims arising from facts and events that occurred prior to the Closing Date; provided , however , that in lieu of the foregoing, ARWA may purchase “tail” insurance coverage that provides coverage identical in all material respects to the Company’s existing directors’ and officers’ insurance policies and the Company’s existing fiduciary liability policies, for a period of not less than six (6) years after the Closing, from insurance carriers with the same or better rating as ARWA’s current applicable insurance carriers, that provides coverage for events occurring at or prior to the Closing (including the Transactions) that is no less favorable than the existing directors’ and officers’ insurance policies and the Company’s existing fiduciary liability policies or, if substantially equivalent insurance coverage is unavailable, the best available coverage.

(c) If Company or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of ARWA assume the obligations set forth in this Section 6 .15 .

(d) The provisions of this Section 6 .15 are intended to be for the benefit of, and shall be enforceable by, each Person who will have been a director or officer of ARWA for all periods ending on or before the Closing Date and may not be changed without the consent of a majority of the individuals who were independent directors of ARWA as of the date of the Closing .

6.16 Insider Loans . The Company shall use its best efforts to cause each director and executive officer of the Company and each Subsidiary to, at or prior to Closing (i) repay to the Company and each Subsidiary any loan by the Company or such Subsidiary to such Person and any other amount owed by such Person to the Company; (ii) cause any guaranty or similar arrangement pursuant to which the Company has guaranteed the payment or performance of any obligations of such Person to a third party to be terminated; and (iii) except as disclosed in Schedule 7.3(h) , cease to own any direct material equity interests in any Subsidiary of the Company or in any other Person that utilizes the name “VivoPower” or any derivative thereof.

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6.17 Certain Financial Information . Within twenty (20) business days after the end of each month between the date hereof and the earlier of the Closing Date and the date on which this Agreement is terminated, the Company shall deliver, and shall cause the VivoPower Pty and Aevitas to deliver, to ARWA unaudited consolidated management accounts of the Company and VivoPower Pty and Aevitas for such month, including a balance sheet, statement of operations, statement of cash flows and statement of shareholders’ equity, prepared in accordance with IFRS applied on a consistent basis to prior periods (except as may be indicated in the notes thereto) and fairly presenting in all material respects the financial position of the Company and VivoPower Pty and Aevitas at the date thereof and the results of their operations and cash flows for the period indicated, except that such management accounts need not contain notes and may be subject to normal adjustments that are not expected to have a Material Adverse Effect on the Company.

6.18 Access to Financial Information . The Company will, and will cause its auditors to (a) continue to provide ARWA and its advisors full access to all of the Company’s financial information used in the preparation of its Financial Statements and the financial information furnished pursuant to Sections 6.4 and 6.17 hereof and (b) cooperate fully with any reviews performed by ARWA or its advisors of any such financial statements or information.

6.19 ARWA Borrowings . Through the Closing, ARWA shall be allowed to borrow funds from its directors, officers and/or shareholders to meet its reasonable capital requirements, with any such loans to be made only as reasonably required by the operation of ARWA in due course on a non-interest bearing basis and repayable at Closing (or convertible into securities of ARWA in accordance with the terms of the promissory notes issued to evidence the borrowing, consistent with the terms set forth in the Final Prospectus).

6.20 Trust Fund Disbursement . ARWA shall cause the Trust Fund to be disbursed to ARWA or as directed by ARWA immediately upon the Closing. At Closing, the Trust Fund may be disbursed to pay the Contribution Amount (from which amounts may be deducted to pay the sellers in the Contingent Acquisitions), the True-up Amount and all liabilities of ARWA due and owing or incurred at or prior to the Closing, including , without limitation, all amounts payable to ARWA shareholders electing to exercise their Conversion Rights, tax liabilities, deferred underwriting discounts and commissions or business combination marketing fees, director’s and officer’s insurance and amounts payable to third parties (e.g., professionals, printers, etc.) who have rendered services to ARWA in connection with its efforts to effect a business combination, including the Transactions, and adequate reserves shall be made against amounts distributed from the Trust Fund therefor.

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6.21 Contingent Acquisitions . The Company and AWN shall use commercially reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to cause the consummation of the acquisition of the businesses set forth on Schedule 6.21 (the “ Contingent Acquisition Targets ”), on the terms described therein (the “ Contingent Acquisitions ”), including the consummation of the acquisition (the “ VivoPower Acquisition ”) of approximately 80% of VivoPower Pty ordinary shares and 100% of Series B redeemable preference shares and the acquisition (the “ OptionCo Acquisition ”) of 100% of Aevitas O Holdings Pty Ltd (“ OptionCo ”) simultaneously with the Closing of the Transactions or as soon thereafter as practicable, after which the options to acquire ordinary shares in Aevitas granted to OptionCo by the holders of 99.94% of those ordinary shares will be exercised, further ordinary shares will be issued to OptionCo by Aevitas in accordance with the facilitation agreement dated on or about June 1, 2016 between Aevitas and OptionCo (the “ Facilitation Agreement ”), a special dividend will be declared in relation to the convertible non-cumulative preference shares (“ CP Shares ”) as proposed in the Facilitation Agreement and the notes and CP Shares issued by Aevitas will be redeemed in accordance with their terms and the Facilitation Agreement (the “ Aevitas Acquisition ”). The Company and AWN represent to ARWA that, upon consummation of the Contingent Acquisitions and the Aevitas Acquisition, except as set forth in Schedule 6 .2 1 , the Company or one of its Subsidiaries shall own all of the outstanding securities of each Contingent Acquisition Target and of Aevitas, free and clear of all Liens, and there shall be no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which such Contingent Acquisition Target or Aevitas is a party or by which such Contingent Acquisition Target or Aevitas is bound obligating such Contingent Acquisition Target or Aevitas to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any shares of capital stock, partnership interests or similar ownership interests of such Contingent Acquisition Target or Aevitas .

6.22 AWN Shareholder Approval . AWN shall use its best efforts to take, or cause to be taken, all actions necessary to obtain the AWN Shareholder Approval.

6.23 Incentive Plan . VivoPower International Services Ltd., a wholly owned subsidiary of the Company (“ MidCo ”), shall establish a separate class of non-voting securities that may be used by the Company to incentivize officers and employees of the Company and the Subsidiaries.

6.24 Insider Escrow Arrangement . ARWA shall cause Continental, or another escrow agent, to agree to hold the Company Shares to be issued upon the Closing to the shareholders of ARWA who were shareholders of ARWA prior to ARWA’s initial public offering (the “ IPO Insiders ”) as nominee for the IPO Insiders and to hold such Company Shares following the Closing in accordance with the terms set forth in that certain Share Escrow Agreement, dated as of April 30, 2015, by and between ARWA, the IPO Insiders and Continental.

6.25 Project Management Fee . At or prior to the Closing, VivoPower USA, LLC (“ Vivo USA ”) and AWN shall enter into a Fee and Loan Agreement, in the form of Exhibit 6.25 hereto, providing that, in consideration for the project management and ancillary services that AWN has and will continue to provide to Vivo USA and its related entities in relation to and as preparation for the Transactions, Vivo USA will pay AWN a fee of $5,800,000, and AWN will loan Vivo USA $5,800,000 to pay such fee, on the terms and subject to the conditions set forth therein.

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6.26 UK Takeover Code . The Parties acknowledge and agree that it is their intention that the Company shall not be subject to the rules of the UK Takeover Code or to the jurisdiction of the UK Takeover Panel. Accordingly, the Company’s board of directors will be composed of a sufficient number of residents outside the UK, Channel Islands and Isle of Man for the purposes of paragraph 3(a) of the Introduction to the UK Takeover Code such that the rules of the UK Takeover Code or to the jurisdiction of the UK Takeover Panel do not apply.

Accordingly, a majority of the directors of the Company will be resident outside the UK, Channel Islands and Isle of Man for the purposes of paragraph 3(a) of the Introduction to the UK Takeover Code. It is further acknowledged by the Parties that in the event there is an equal number of directors of the Company that the UK Takeover Panel will look to the residency of the Chairman of the Company, as the possessor, pursuant to the articles of association of the Company, of the casting vote in the event of an equality of votes in any matter being voted on by the board, when determining whether the Company is subject to the rules of the UK Takeover Code or to the jurisdiction of the UK Takeover Panel. Accordingly, until such time as a majority of directors are resident outside of the UK the Chairman of the Company will be resident outside the UK, Channel Islands and Isle of Man for the purposes of paragraph 3(a) of the Introduction to the UK Takeover Code.

ARTICLE VII
CONDITIONS TO THE TRANSACTION

7.1 Conditions to Obligations of Each Party to Effect the Transactions . The respective obligations of each party to this Agreement to effect the Transactions shall be subject to the satisfaction at or prior to the Closing Date of the following conditions:

(a) ARWA Shareholder Approval . The ARWA Shareholder Approval shall have been duly approved and adopted by the shareholders of ARWA by the requisite vote under applicable corporate law and the ARWA Charter Documents.

(b) ARWA Warrantholder Approval . The ARWA Warrantholder Approval shall have been duly approved and adopted by the warrantholders of ARWA by the requisite vote under the Warrant Agreement.

(c) ARWA Conversions . Holders of no more than 2,732,400 of the ARWA Ordinary Shares issued in ARWA’s initial public offering of securities shall have exercised their Conversion Rights .

(d) NASDAQ Listing . The Company Shares shall have been approved for listing on Nasdaq, subject to providing evidence of at least 300 Round Lot Holders (as such term is defined in Rule 5005(a)(37) of the Nasdaq Listing Rules) following consummation of the Transactions.

(e) AWN Shareholder Approval . AWN Shareholder Approval shall have been obtained.

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(f) No Order . No Governmental Entity shall have enacted, issued, promulgated, enforced or entered (or have pending) any Legal Requirement (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Transactions illegal or otherwise prohibiting consummation of the Transactions, substantially on the terms contemplated by this Agreement.

(g) Registration Statement . The Registration Statement shall have been declared effective by the SEC.

7.2 Additional Conditions to Obligations of the Company . The obligations of the Company and AWN to consummate and effect the Transactions shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by the Company and AWN:

(a) Representations and Warranties . Each representation and warranty of ARWA contained in this Agreement that is (i) qualified as to materiality shall have been true and correct on and as of the Closing Date with the same force and effect as if made at and as of the Closing (except that any such representation or warranty made as of a specific date shall only be required to be so true and correct as such specified date), and (ii) not qualified as to materiality shall have been true and correct in all material respects on and as of the Closing Date with the same force and effect as if made at and as of the Closing (except that any such representation or warranty made as of a specific date shall only be required to be so true and correct as such specified date). The Company shall have received a certificate with respect to the foregoing signed on behalf of ARWA by an authorized officer of ARWA (“ ARWA Closing Certificate ”).

(b) Agreements and Covenants . ARWA and its Affiliates shall have performed or complied, in all material respects, with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date. The ARWA Closing Certificate shall include a provision to such effect.

(d) Consents . ARWA shall have obtained the consents, waivers and approvals required to be obtained by ARWA in connection with the consummation of the transactions contemplated hereby, other than consents, waivers and approvals the absence of which, either alone or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on ARWA or otherwise prevent or materially delay the consummation of the transactions contemplated hereby. The ARWA Closing Certificate shall include a provision to such effect.

(e) Other Deliveries . At or prior to Closing, ARWA shall have delivered to the Company (i) copies of resolutions and actions taken by ARWA’s board of directors and shareholders in connection with the approval of this Agreement and the transactions contemplated hereunder, and (ii) such other documents or certificates as shall reasonably be required by the Company and its counsel in order to consummate the transactions contemplated hereunder.

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(f) SEC Compliance . Immediately prior to Closing, ARWA shall be in compliance with the reporting requirements under the Securities Act and Exchange Act.

(g) Trust Fund . ARWA shall have made appropriate arrangements to have the Trust Fund, which shall contain no less than the amount referred to in Section 4.12, dispersed in accordance with Section 6.2 0, immediately upon the Closing.

(h) Transaction Fees and Expenses . The aggregate of Transaction Fees and Expenses will not exceed $8,000,000.

7.3 Additional Conditions to the Obligations of ARWA . The obligations of ARWA to consummate and effect the Transactions shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by ARWA:

(a) Representations and Warranties . Each representation and warranty of the Company and AWN contained in this Agreement that is (i) qualified as to materiality shall have been true and correct on and as of the Closing Date with the same force and effect as if made at and as of the Closing Date (except that any such representation or warranty made as of a specific date shall only be required to be so true and correct as such specified date), and (ii) not qualified as to materiality shall have been true and correct in all material respects on and as of the Closing Date with the same force and effect as if made at and as of the Closing Date (except that any such representation or warranty made as of a specific date shall only be required to be so true and correct as such specified date). ARWA shall have received a certificate with respect to the foregoing signed on behalf of the Company and AWN by an authorized officer of the Company and AWN, respectively (“ Company Closing Certificate ”).

(b) Agreements and Covenants . The Company and AWN shall have performed or complied, in all material respects, with all agreements and covenants required by this Agreement to be performed or complied with by them at or prior to the Closing Date. The Company Closing Certificate shall include a provision to such effect.

(c) No Litigation . No action, suit or proceeding shall be pending or threatened (in writing) before any Governmental Entity which is reasonably likely to (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (iii) affect materially and adversely the right of the Company to own, operate or control any of the assets and operations of the Company following the Transactions, or (iv) affect materially and adversely or otherwise encumber the title of the Company Shares to be issued by the Company in connection with the Transactions, and no order, judgment, decree, stipulation or injunction to any such effect shall be in effect.

(d) Consents . The Company and AWN shall have obtained all consents, waivers, permits and approvals required to be obtained by the Company or AWN in connection with the consummation of the transactions contemplated hereby, other than consents, waivers and approvals the absence of which, either alone or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company or otherwise prevent or materially delay the consummation of the transactions contemplated hereby. The Company Closing Certificate shall include a provision to such effect.

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(e) Other Deliveries . At or prior to Closing, the Company shall have delivered to ARWA: (i) copies of resolutions and actions taken by the Company's board of directors and AWN in connection with the approval of this Agreement and the transactions contemplated hereunder, and (ii) such other documents or certificates as shall reasonably be required by ARWA and its counsel in order to consummate the transactions contemplated hereunder.

(f) Material Adverse Effect . No Material Adverse Effect with respect to the Company shall have occurred since the date of this Agreement.

(g) Resignations . The persons listed in Schedule 7.3(g) shall have resigned from all of their positions and offices with the Company.

(h) Insider Loans; Equity Ownership in Subsidiaries . All outstanding indebtedness owed by the directors and executive officers of the Company shall have been repaid in full and all outstanding guaranties and similar arrangements pursuant to which the Company has guaranteed the payment or performance of any obligations of any of the directors and executive officers of the Company to a third party shall have been terminated; and no director or executive officer of the Company shall own any direct material equity interests in any Subsidiary of the Company or in any other Person that utilizes the name “VivoPower” or any derivative thereof except as disclosed in Schedule 7.3(h).

(i) Contingent Acquisitions . All conditions precedent set out in the agreements for the VivoPower Acquisition and the OptionCo Acquisition, other than the conditions set out in clause 2.1(c) (with heading “Conditions to completion of Business Combination Transaction”) and clause 2.1(d) (with heading “Release of ARWA trust funds”) of those agreements, shall have been satisfied or waived, and each party to each such acquisition shall stand ready, willing and able to consummate such acquisition upon distribution of the Trust Fund .

(j) Company Net Debt . The aggregate Net Debt (as hereafter defined) of the Company and, without duplication, of Aevitas and VivoPower Pty , excluding Permitted Debt (as hereafter defined), as set forth in the most recent monthly financial information provided to ARWA, shall not exceed $25,000,000. “ Net Debt ” shall mean all debt less Permitted Debt, less cash and cash equivalents. “ Permitted Debt ” shall mean all construction debt and tax equity associated with IS-31 that is non-recourse to the Company, any other solar project related debt or tax equity that is non-recourse to the Company, Aevitas notes and other Aevitas indebtedness up to a maximum of $1.5 million.

(k) Lock-Up Agreements . The Lock-Up Agreements shall have been executed and delivered by those Persons required by the terms of this Agreement and shall all be in full force and effect, and lock up agreements have been entered into by the counterparties to the VivoPower Acquisition on terms satisfactory to ARWA.

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(l) Company Resolutions . AWN, as the sole shareholder of the Company , shall have approved the amendment and restatement of the Company’s memorandum and articles of association as set forth in Section 1.5, the issue and allotment of shares pursuant to Section 1.1(b) and the approval of the terms of this Agreement in order to fund the buyback of Company Shares pursuant to Section 1.1(c) .

ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

The representations, warranties and covenants of the Parties contained herein shall not survive the Closing, except for those covenants contained herein that by their terms apply or are to be performed in whole or in part after the Closing. There are no remedies available to the parties hereto with respect to any breach of the representations, warranties, covenants or agreements of the parties to this Agreement after the Closing, except for covenants to be performed in whole or in part after the Closing. Notwithstanding anything to the contrary elsewhere in this Agreement, no party shall, in any event, be liable to the other party for any consequential, special or punitive damages (except to the extent of third party claims therefor).

ARTICLE IX
TERMINATION

9.1 Termination . This Agreement may be terminated at any time prior to the Closing:

(a) by mutual written agreement of ARWA and the Company at any time;

(b) by either ARWA or the Company if the Transactions shall not have been consummated by June 30, 2017; provided , however , that the right to terminate this Agreement under this Section 9.1(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Transactions to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;

(c) by either ARWA or the Company if a Governmental Entity shall have issued an order, decree, judgment or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transactions, which order, decree, ruling or other action is final and nonappealable;

(d) by the Company, upon a material breach of any representation, warranty, covenant or agreement on the part of ARWA set forth in this Agreement, or if any representation or warranty of ARWA shall have become untrue, in either case such that the conditions set forth in Article VII would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such breach by ARWA is curable by ARWA prior to the Closing Date, then the Company may not terminate this Agreement under this Section 9.1(d) for thirty (30) days after delivery of written notice from the Company to ARWA of such breach, provided ARWA continues to exercise commercially reasonable best efforts to cure such breach (it being understood that the Company may not terminate this Agreement pursuant to this Section 9.1(d) if it shall have materially breached this Agreement or if such breach by ARWA is cured during such thirty (30) day period); or

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(e) by ARWA, upon a material breach of any representation, warranty, covenant or agreement on the part of the Company or AWN set forth in this Agreement, or if any representation or warranty of the Company or AWN shall have become untrue, in either case such that the conditions set forth in Article VII would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such breach is curable by the Company or AWN prior to the Closing Date, then ARWA may not terminate this Agreement under this Section 9.1(e) for thirty (30) days after delivery of written notice from ARWA to the Company of such breach, provided the Company and AWN continue to exercise commercially reasonable best efforts to cure such breach (it being understood that ARWA may not terminate this Agreement pursuant to this Section 9.1(e) if it shall have materially breached this Agreement or if such breach by the Company or AWN is cured during such thirty (30) day period).

(f) by either ARWA or the Company, if, at the Shareholder Meeting (including any adjournments thereof), the ARWA Shareholder Approval is not obtained, or holders of more than 2,732,400 of the ARWA Ordinary Shares issued in ARWA’s initial public offering of securities and outstanding immediately before the Closing have exercised their rights to convert their shares into a pro rata share of the Trust Fund in accordance with ARWA’s Charter Documents .

(g) by either ARWA or the Company if AWN Shareholder Approval is not obtained at the meeting of AWN shareholders called for such purpose; provided , however , that the right to terminate this Agreement under this Section 9.1(g) shall not be available to the Company if the Company or AWN is in breach of Section 6.22.

9.2 Notice of Termination; Effect of Termination .

(a) Any termination of this Agreement under Section 9.1 above will be effective immediately upon (or, if the termination is pursuant to Section 9.1(d) or Section 9.1(e) and the proviso therein is applicable, thirty (30) days after) the delivery of written notice of the terminating party to the other parties hereto.

(b) In the event of the termination of this Agreement as provided in Section 9.1, this Agreement shall be of no further force or effect and the Transactions shall be abandoned, except for and subject to the following: (i) Sections 6 .5, 6.11 , 9.2 and 9.3 and Article XI (General Provisions) shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any party from liability for any breach of this Agreement.

9.3 Fees and Expenses . All fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses whether or not the Transactions are consummated.

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ARTICLE X
DEFINED TERMS

Terms defined in this Agreement are organized alphabetically as follows, together with the Section and, where applicable, paragraph, number in which definition of each such term is located:

“ Affiliate ” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with, such Person. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“ APG Loan ” means aggregate principal and accrued interest amount outstanding owed by Aevitas to Arowana Partners Group pursuant to the loan agreements between Aevitas and Arowana Partners Group. The aggregate principal and accrued interest is A$692,581 as of June 30, 2016.

“ AWN Shareholder Approval ” shall mean all necessary resolutions of the shareholders of AWN have been passed to approve the Transaction and all other transactions contemplated hereby, including the Contingent Acquisitions for all relevant purposes.

“ Charter Documents ” means, with respect to any entity, the memorandum and articles of organization, articles of incorporation, certificate of formation, bylaws, operating agreement, articles of association, partnership agreement or other comparable instruments relating to the creation, organization, governance and management of such entity.

“ Company Group ” means, collectively, the Company, the Contingent Acquisition Targets and Aevitas, and their respective Subsidiaries.

“ Company Group Member ” means any Person that is part of the Company Group.

“ Contract ” means any written or oral contract, agreement, lease, mortgage, indenture, note, bond, license, permit, franchise, purchase order, sales order, instrument, option, warranty, license, insurance policy, benefit plan or other understanding, commitment, undertaking or other legally binding obligation, including outstanding offers and proposals.

“ Continental ” means Continental Stock Transfer & Trust Company.

“ Copyrights ” means all copyrights, copyright registrations and applications therefor, and all other rights corresponding thereto throughout the world.

“ Environmental Law ” means any Legal Requirement relating to (a) the protection, investigation or restoration of the environment, health and safety, or natural resources; (b) the handling, use, presence, disposal, release or threatened release of any Hazardous Substance or (c) noise, odor, wetlands, pollution, contamination or any injury or threat of injury to persons or property.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Governmental Action/Filing ” means any franchise, license, certificate of compliance, authorization, consent, order, permit, approval, consent or other action of, or any filing, registration or qualification with, or any notice to, any Governmental Entity

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“ Governmental Entity ” shall mean any (a) international, national, federal, state, multi-state, provincial, municipal or other local government, or political subdivision thereof, or (b) court, magistrate, tribunal, arbiter, arbitration panel, administrative agency, commission, bureau , department, governmental or regulatory authority or similar public or private body public or exercising executive, legislative, taxing, regulatory or administrative powers or functions , whether domestic or foreign.

“ Hazardous Substance ” means any substance that is: (a) listed, classified or regulated pursuant to any Environmental Law; (b) any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive materials or radon; or (c) any other substance which is the subject of regulatory action by any Governmental Entity pursuant to any Environmental Law.

“ Intellectual Property ” means any of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith: (a) Patents; (b) inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the foregoing; (c) Copyrights; (iv) software and software programs; (v) domain names, uniform resource locators and other names and locators associated with the Internet; (vi) industrial designs and any registrations and applications therefor; (vii) Trademarks; (viii) all databases and data collections and all rights therein; (ix) all moral and economic rights of authors and inventors, however denominated, and (x) any similar or equivalent rights to any of the foregoing, as applicable.

“ knowledge ” means actual knowledge or awareness as to a specified fact or event of a Person that is a director a Person that is a corporation or similar entity.

“ Lien ” means any mortgage, pledge, security interest, encumbrance, lien, restriction or charge of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof, any sale with recourse against the seller or any Affiliate of the seller, or any agreement to give any security interest).

“ Legal Requirements ” means any international, national, federal, state, multi-state, provincial, municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity and all requirements set forth in applicable Company Contracts or ARWA Contracts.

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“ Material Adverse Effect ” when used in connection with a Person, means any change, event, or occurrence, individually or when aggregated with other changes, events, or occurrences, that has, or could reasonably be expected to have, a materially adverse effect on the business, financial condition or prospects, of such Person, and their respective subsidiaries taken as a whole (including, in the case of the Company, the Contingent Acquisition Targets); provided, however, that none of the following alone or in combination shall be deemed, in and of itself, to constitute a Material Adverse Effect: any changes, events, occurrences or effects arising out of, resulting from or attributable to (a) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism; (b) earthquakes, hurricanes, tornados or other natural disasters; (c) changes attributable to the public announcement or pendency of the transactions contemplated hereby (including the threatened or actual impact on relationships of the Company and the Subsidiaries with customers, vendors, suppliers, distributors, landlords or employees (including the threatened or actual termination, suspension, modification or reduction of such relationships)); (d) changes in the national or world economy or financial markets as a whole or changes in general economic conditions that affect the industries in which the Company and the Subsidiaries conduct their business, so long as such changes or conditions do not adversely affect the Company and the Subsidiaries and the Contingent Acquisition Targets, taken as a whole, in a materially disproportionate manner relative to other similarly situated participants in the industries or markets in which they operate; (e) any change in applicable Law, rule or regulation or IFRS or interpretation thereof after the date hereof, so long as such changes do not adversely affect the Company and the Subsidiaries and the Contingent Acquisition Targets, taken as a whole, in a materially disproportionate manner relative to other similarly situated participants in the industries or markets in which they operate; (f) the failure, in and of itself, of the Company to meet any published or internally prepared estimates of revenues, earnings or other financial projections, performance measures or operating statistics; and (g) compliance with the terms of, and taking any action required by, this Agreement, or taking or not taking any actions at the request of, or with the consent of, the other Parties hereto.

“ Patents ” means all patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof throughout the world.

“ Permitted Lien ” means Liens (a) created by this Agreement or any agreement contemplated hereby, (b) imposed by securities laws, including the Securities Act, blue-sky laws and similar Legal Requirements; (c) for taxes not yet due and payable or being contested in good faith by appropriate procedures; (d) mechanics, carriers', workmen's, repairmen's or other like liens arising or incurred in the ordinary course of business; (e) easements, rights of way, zoning ordinances and other similar encumbrances affecting real property; (f) other than with respect to owned real property, liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business; (g) Liens that will be released at Closing as a consequence of the consummation of the transaction; or (h) other imperfections of title or Encumbrances, if any, that have not had, and would not have, a Material Adverse Effect.

“ Person ” shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity.

“ Sarbanes-Oxley Act ” means the Sarbanes-Oxley Act of 2002, as amended.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Subsidiary ” means, with respect to a Person (other than an individual), another Person (other than an individual) in which such Person owns, directly or indirectly, equity securities or a security convertible into, or exercisable for, equity securities.

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“ Taxes ” or “ Tax ” means any tax or similar governmental charge imposed, assessed or collected by or under the authority of any Governmental Entity, including without limitation, net income, gross income, earnings, gross receipts, profits, sales, use, occupation, value added (or VAT), ad valorem, transfer, franchise, corporation, gains, capital gains, national insurance, customs, import, escheat, unclaimed property, wage, withholding, payroll, employment, excise, property, license, severance, stamp, premium, windfall profits, capital stock, social security (or similar), unemployment, disability, alternative or add-on minimum and estimated taxes, assessments, duties, fees, levies and tariffs, together with all interest, penalties and additions imposed with respect to any such amounts and any obligations under any agreements or arrangements with any other Person with respect to any such amounts and including any liability of a predecessor entity for any such amounts.

“ Trademarks ” means all trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor throughout the world.

“ Transaction Documents ” means the Registration Rights Agreement, the Lock-Up Agreements and the Employment Agreements.

“ U.S. GAAP ” means generally accepted accounting principles in the United States of America.

ARTICLE XI
GENERAL PROVISIONS

11.1 Notices . All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or sent via telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as shall be specified by like notice):

if to ARWA, to:

Arowana Inc.
Level 11, 153 Walker Street
North Sydney, NSW 2060
Australia
Attn: Kevin Chin
Tel.: +61 2 8083 9800
E-mail: info@arowanaco.com

with a copy to:

Graubard Miller
The Chrysler Building
405 Lexington Avenue, 11th Floor
New York, New York 10174
Attn:     David Alan Miller, Esq.
              Jeffrey M. Gallant, Esq.
Tel.:      (212) 818-8800
Fax:      (212) 818-8881
E-mail: dmiller@graubard.com
             jgallant@graubard.com

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if to the Company to:

Vivopower International PLC
23 Hanover Square, Mayfair
London, England, W1S 1JB
Attn: Julie-Anne Byrne
Tel.: +44 20 3714 8881
E-mail: julie-anne.byrne@vivopower.com

with a copy to:

if to AWN to:

Arowana International Limited
Level 11, 153 Walker Street
North Sydney NSW 2060
Attn: Conor Byrne
Tel.: +61 2 8083 9814
E-mail: ElizabethH@arowanaco.com

with a copy to:

Vivopower International PLC
23 Hanover Square, Mayfair
London, England, W1S 1JB
Attn: Julie-Anne Byrne
Tel.: +44 20 3714 8881
E-mail: julie-anne.byrne@vivopower.com

and

Winston & Strawn LLP
200 Park Avenue
New York, New York 10166
Attn:     Joel Rubinstein, Esq.
              Elliott Smith, Esq.
Tel.:        212-294-6700
Fax:        212-294-4700
E-mail:  jrubinstein@winston.com
              emsmith@winston.com

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11.2 Interpretation . The definitions of the terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context shall require, any pronoun shall include the corresponding masculine, feminine and neuter forms. When a reference is made in this Agreement to an Exhibit or Schedule, such reference shall be to an Exhibit or Schedule to this Agreement unless otherwise indicated. The Exhibits, Schedules and other attachments to this Agreement shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein. When a reference is made in this Agreement to Sections or subsections, such reference shall be to a Section or subsection of this Agreement. The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. Unless otherwise indicated the words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. When reference is made herein to “the business of” an entity, such reference shall be deemed to include the business of all direct and indirect subsidiaries of such entity. References to Contracts, agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto as of the date of this Agreement. References to any statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, and amendments and modifications thereof as of the date of this Agreement. Reference to the subsidiaries of an entity shall be deemed to include all direct and indirect subsidiaries of such entity. All monetary amounts set forth herein are referenced in United States dollars, unless otherwise noted.

11.3 Counterparts; Electronic Delivery . This Agreement and each other document executed in connection with the transactions contemplated hereby, and the consummation thereof, may be executed in one or more counterparts, all of which shall be considered one and the same document and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. Delivery by facsimile or electronic transmission to counsel for the other party of a counterpart executed by a party shall be deemed to meet the requirements of the previous sentence.

11.4 Entire Agreement; Third Party Beneficiaries . This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein, including the Exhibits and Schedules hereto (a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof; and (b) are not intended to confer upon any other person any rights or remedies hereunder (except as specifically provided in this Agreement).

11.5 Severability . In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

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11.6 Other Remedies; Specific Performance . Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

11.7 Governing Law . This Agreement shall be governed by and construed in accordance with the internal law of the State of New York regardless of the law that might otherwise govern under applicable principles of conflicts of law thereof.

11.8 Consent to Jurisdiction . Each of the parties irrevocably agrees that any action, proceeding or claim with respect to this Agreement or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or permitted assigns shall be brought and determined exclusively in any state court or Federal court sitting in New York, New York and each of the parties hereto hereby (a) irrevocably submits with regard to any such action, proceeding or claim for itself and in respect to its property, generally and unconditionally, to the exclusive personal jurisdiction of the aforesaid courts in the event any dispute arises out or relates to of this Agreement or any transaction contemplated hereby, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agrees that it will not bring any action arising out of or relating to this Agreement or any transaction contemplated hereby in any court other than any state court or Federal court sitting in New York, New York. It is understood and agreed that any other court or arbiter in any other jurisdiction shall be entitled to enforce any judgment of any state court or Federal court sitting in New York, New York. Any writs, process or summonses to be served on any other party in such action or proceeding may be made by delivery of process in accordance with the notice provisions contained in Section 11.1 or as otherwise permitted by applicable law. Each of the parties hereto irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to serve process in accordance with this Section 11.8 or (ii) to the fullest extent permitted by applicable law that (A) the suit, action or proceeding in any such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

11.9 Rules of Construction . The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

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11.10 Assignment .

(a) Subject to Section 11.10(b), no party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties. Subject to the first sentence of this Section 11.10(a), this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

(b) The Company may not assign its rights in relation to clause 1.1 (c) in any circumstances whatsoever.

11.11 Amendment . This Agreement may be amended by the parties hereto at any time by execution of an instrument in writing signed on behalf of each of the parties; provided , however , that after the dissolution of ARWA, this Agreement may be amended without the consent of ARWA provided that a majority of the individuals who were independent directors of ARWA as of the date of the Closing approve of such amendment.

11.12 Extension; Waiver . At any time prior to the Closing, any party hereto may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right.

11.13 WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

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11.14 Schedules . The information furnished in the Schedules is arranged in sections corresponding to the Sections of this Agreement, and the disclosures in any section of the Schedules shall qualify (a) the corresponding Section of this Agreement and (b) other Sections of this Agreement to the extent (notwithstanding the absence of a specific cross-reference), that it is clear from a reasonable reading of the Schedules and such other Sections of this Agreement that such disclosure is also applicable to such other Sections of this Agreement. The Schedules and the information and disclosures contained in such Schedules are intended only to qualify and limit the representations and warranties of the parties contained in this Agreement and shall not be deemed to expand in any way the scope of any such representation or warranty. The inclusion of any information in the Schedules shall not be deemed to be an admission or acknowledgment that such information is material or outside the ordinary course of business. The inclusion of any fact or information in a Schedule is not intended to be construed as an admission or concession as to the legal effect of any such fact or information in any proceeding between any party and any Person who is not a party.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above.

AROWANA INC.

By: /s/ Gary Hui

       Name: Gary Hui

       Title: CFO

VIVOPOWER INTERNATIONAL PLC

By: /s/ Philip Comberg

       Name: Philip Comberg

       Title: Director

AROWANA INTERNATIONAL LIMITED

By: /s/ Kevin Chin

       Name: Kevin Chin

       Title: Chairman

[Signature Page to Contribution Agreement]

A-51

ANNEX B

THE COMPANIES (JERSEY) LAW 1991

ARTICLES OF ASSOCIATION

VIVOPOWER INTERNATIONAL SERVICES LIMITED

(a par value company limited by shares)

Index

Subject Matter
Page

1

Definitions and Interpretation

B-3

2

Non-Application of the Standard Table

B-7

3

Share Capital

B-7

4

Drag Along Rights

B-8

5

Tag Along Rights

B-10

6

Leaver Provisions

B-10

7

Put Option

B-11

8

Payment and Closing

B-13

9

Share Certificates

B-14

10

Lien

B-14

11

Calls on Shares and Forfeiture

B-15

12

Transfer of Shares

B-16

13

Transmission of Shares

B-17

14

Consolidation of Shares

B-18

15

General Meetings

B-18

16

Notice of General Meetings

B-18

17

Proceedings at General Meetings

B-19

18

Votes of Members

B-20

19

Number of Directors

B-22

20

Alternate Directors

B-22

21

Powers of Directors

B-22

B-1

22

Delegation of Directors' Powers

B-23

23

Appointment of Directors

B-23

24

Disqualification and Removal of Directors

B-23

25

Remuneration of Directors

B-24

26

Directors' Expenses

B-24

27

Directors' Appointment and Interests

B-24

28

Directors' Gratuities and Pensions

B-25

29

Proceedings of Directors and Interests

B-25

30

Secretary

B-26

31

Minutes

B-26

32

Seal

B-26

33

Dividends

B-27

34

Capital Distributions

B-28

35

Accounts and Audit

B-28

36

Capitalisation of Profits

B-29

37

Notices

B-29

38

Winding Up

B-30

39

Indemnity

B-30

40

Insurance

B-31

B-2

THE COMPANIES (JERSEY) LAW 1991

ARTICLES OF ASSOCIATION

VIVOPOWER INTERNATIONAL SERVICES LIMITED

1

Definitions and Interpretation

1.1

In these articles (unless the context otherwise requires):

Acquired EBITDA

EBITDA that is contributed to the Company in a financial year by virtue of a business acquisition

articles

the articles of association of the Company

Bad Leaver

any person who becomes a Leaver by reason of:

(a) his/her voluntarily resignation who within 6 months of their resignation joins a competitor of the Company or starts a business which competes with the Company

(b) his/her summary dismissal from employment as a result of:

(i) the Leaver's fraud, gross misconduct or other conduct which has brought either the Leaver, the Company Group or the Ordinary Shareholder into disrepute;

(ii) the Leaver's conviction for any criminal offence involving their moral turpitude;

(iii) use of alcohol or any other drug or substance to such a degree that the Leaver's ability to perform their role is materially and adversely affected and they are unable to perform their services in an acceptable manner; or

(iv) in relation to any Leaver who is resident in the USA any plea of guilty or no contest in relation to an alleged criminal offence

Business Day

any day on which banks are open in St Helier, Jersey and London, UK which is not a Saturday or a Sunday

clear days

in relation to the period of a notice means that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect

Company

VivoPower International Services Limited

Company Group

the Company and any other person directly or indirectly Controlled by the Company from time to time and Group Company shall be construed accordingly

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Control

in relation to a body corporate or partnership, means the power of a person to secure that the affairs of the body corporate or partnership are conducted in accordance with the wishes of that person:

(a)     by means of the holding of Shares, or the possession of voting power, in or in relation to that or any other body corporate or partnership; or

(a)     by virtue of any powers conferred by the constitutional or corporate documents, or any other document, regulating that or any other body corporate or partnership,

and Controlling and Controlled shall be construed accordingly;

;

Depositary

any depositary, clearing agency, custodian, nominee or similar entity appointed under arrangements entered into by HoldCo o otherwise approved by the board of HoldCo that holds, or is interested directly or indirectly including through a nominee, in shares, or rights or interest in respect thereof, and which issues certificates, instruments, securities or other documents of title or maintains accounts, evidencing or recording the entitlement of the holders thereof, or account holders, too to receive such shares, rights or interests;

Depositary Interest

any certificate, instrument, security, depositary receipt, or other document of title issued or created, or interest recorded in an account maintained by a Depositary to evidence or record the entitlement of the holder, or account holder to or to receive shares, or rights or interest in respect thereof;

Distributable Cash

all of the cash available to the Company after taking into account, in respect of the whole of the Company Group, as appropriate:

(a)     operating costs and expenses and working capital requirements as agreed by the Board;

(b)     service of any debt finance provided by persons other than members of the Ordinary Shareholder Group and Ordinary A Shareholder Group;

(c)     taxes and regulatory fees payable; and

(d)     reserves for capital expenditure as agreed by the Board,

which may be distributed by the Company by way of the methods described in paragraphs (a) to (b) of the definition of Distribution or otherwise in accordance with applicable law

Distribution

any payment to Shareholders in respect of the following:

(a)     any return of capital on any Shares on a liquidation or winding up; or

(b)     any sums received on a disposal of assets or Shares in a member of the Company Group outside of the ordinary course of business,

and Distributed shall be construed accordingly

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EBITDA

the Company's earnings before interest, tax, depreciation and amortisation as determined by the Company's end of year accounts

EBITDA Threshold

(a) where the Financial Year in Question is the financial year ending 2017 (or earlier): the EBITDA Threshold shall be deemed not to have been met; or

(b) where the Financial Year in Question is the financial year ending 2018 or later: 1.08 x EBITDA for the financial year prior to the Financial Year in Question, adjusted on a pro forma basis as if any acquisitions completed in that financial year had been completed on the first day of that financial year

Employee

an employee, director or consultant

Encumbrance

any mortgage, pledge, lien, charge, assignment, hypothecation, or other agreement or arrangement which has the same or a similar effect to the granting of security

executed

includes any mode of execution

Good Leaver

any Leaver who is neither a Bad Leaver nor who has been declared bankrupt nor had a receiver holding a power of sale appointed. For the avoidance of doubt this term shall include any person who voluntarily resigns other than such a person who within 6 months of their resignation joins a competitor of the Company or start a business which competes with the Company.

holder

in relation to Shares means the member whose name is entered in the register of members as the holder of the Shares

Hurdle

US $175 million in the calendar year after the HoldCo Shares commence trading on a stock exchange, with this amount increasing by 8 per cent. on a compound basis for each subsequent calendar year

Law

the Companies (Jersey) Law 1991, including any statutory modification or re-enactment for the time being in force

Leaver

means an Ordinary A Shareholder who ceases to be an Employee of any Group Company or member of the Ordinary Shareholder Group and does not continue (or is not immediately engaged) in such capacity in relation to such member of the Group or any other such member of the Group (for the purposes of this definition any reference to the date of cessation of employment (or similar) is the date upon which the relevant person gives or is given notice of termination of his/her contract of employment or otherwise ceases to be an employee or director of or consultant to any member of the Group)

Member or Shareholder

any person or persons entered on the register of members from time to time as the holder of Shares

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Office

the registered office of the Company

ordinary resolution

a resolution of the Company in general meeting adopted by a simple majority of the votes cast at that meeting

Ordinary A Shareholder

a holder of Ordinary A Shares

Ordinary A Shareholder Group

any person directly or indirectly Controlling, Controlled by or under common (direct or indirect) Control with any Ordinary A Shareholder from time to time and member of the Ordinary A Shareholder Group shall be construed accordingly (for the avoidance of doubt each Group Company shall be deemed to be outside the Ordinary A Shareholder Group)

Ordinary A Shares

the non-voting ordinary shares of £0.01 each in the Company

Ordinary Shareholder

a holder of Ordinary Shares

Ordinary Shareholder Group

any person directly or indirectly Controlling, Controlled by or under common (direct or indirect) Control with any Ordinary Shareholder from time to time and member of the Ordinary Shareholder Group shall be construed accordingly (for the avoidance of doubt each Group Company shall be deemed to be outside the Ordinary A Shareholder Group)

Ordinary Shares

the voting ordinary shares of £1.00 each in the Company

Private Company

has the meaning assigned to it by the Law

Public Company

has the meaning assigned to it by the Law

secretary

the secretary of the Company or any other person appointed to perform the duties of the secretary of the Company, including a joint, assistant or deputy secretary.

Shared EBITDA

in respect of the Financial Year in Question the extent to which:

(a) if EBITDA less Acquired EBITDA exceeds the EBITDA Threshold:

20 percent x (EBITDA minus Acquired EBITDA minus the EBITDA Threshold); or

(b) if EBITDA less Acquired EBITDA does not exceed the EBITDA Threshold: zero

Shareholder's Group

in respect of the Ordinary Shareholder the Ordinary Shareholder's Group and in respect of the Ordinary A Shareholder the Ordinary A Shareholder's Group

Shares

the Ordinary A Shares and the Ordinary Shares

Third Party Buyer

any person not being a member of a Shareholder Group at the relevant time

B-6

Transfer

in relation to any Share or any legal or beneficial interest in any Share or any other asset, to:

(a)     sell, assign, Transfer or otherwise dispose of it;

(b)     create or permit to subsist any Encumbrance over it;

(c)     direct (by way of renunciation or otherwise) that another person should receive it or assign any right to receive it;

(d)     enter into any agreement in respect of the votes or any other rights attached to a Share; or

(e)     agree, whether or not subject to any condition precedent or subsequent, to do any of the foregoing,

and Transferred shall be construed accordingly

Vested Carry

the aggregate dollar amount which an Ordinary A Shareholder would have received if they had exercised the Put Option over all Put Option Shares in all prior years minus the aggregate consideration actually paid to the Ordinary A Shareholder pursuant to their exercise of the Put Option in all prior years. For the avoidance of doubt, if this amount is nil, then the Ordinary A Shareholder shall be deemed not to have any Vested Carry

1.2

words or expressions contained in these articles bear the same meaning as in the Law but excluding any statutory modification thereof not in force when these articles become binding on the Company;

1.3

references to a numbered article are to the article so numbered of these articles;

1.4

words denoting one gender include the other genders;

1.5

words denoting the singular include the plural and vice versa;

1.6

references to persons include companies, foundation, partnerships and other unincorporated associations or bodies of persons.

2

Non-Application of the Standard Table

The articles of association constituting the Standard Table prescribed pursuant to article 6 of the Law shall not apply to the Company.

3

Share Capital

3.1

Subject to the provisions of the Law:

3.1.1

without prejudice to any rights attached to any issued Shares, any Share may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the Company may by special resolution determine;

3.1.2

the Company may:

3.1.2.1

issue, or

3.1.2.2

convert any existing non-redeemable Shares, whether issued or not, into,

Shares which are to be redeemed or are liable to be redeemed at the option of the Company or the Shareholder, on such terms and in such manner as may be determined by special resolution;

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3.1.3

subject to the provisions of articles 3.1.1 and 3.1.2, unissued Shares shall be at the disposal of the directors who may allot, grant options over or otherwise dispose of them to such persons and on such terms as the directors think fit. Without prejudice to the generality of the foregoing, the directors may at any time issue Shares wholly or in part paid up as a consideration for any property Transferred to the Company or any services done for or any benefits accruing to the Company;

3.1.4

the Company may purchase its own Shares; and

3.1.5

notwithstanding any other provisions of these articles, the Company may hold Shares as treasury Shares.

3.2

Fractions of Shares in the Company may be issued in accordance with the provisions of the Law. The holder of a fraction of a Share in the Company shall rank pari passu with regard to the right to receive a dividend paid to holders of Shares in that class (but such dividends shall only be payable in proportion to the fraction of the Share so held) but shall only be entitled to vote at general meetings of the Company in respect of whole Shares held by such holder.

3.3

The Company may exercise the powers of paying commissions conferred by the Law. Subject to the provisions of the Law, any such commission may be satisfied by the payment of cash or by the allotment of fully or partly paid Shares or partly in one way and partly in the other.

3.4

Except as required by law, no person shall be recognised by the Company as holding any Share upon any trust and (except as otherwise provided by the articles or by law) the Company shall not be bound by or recognise any interest in any Share except an absolute right to the entirety thereof in the holder.

3.5

The special rights conferred upon the holders of any Shares or class of Shares issued with preferred, deferred or other special rights shall (unless otherwise expressly provided by the terms of issue of such Shares) be deemed not to be varied by the creation or issue of further Shares or further classes of Shares ranking pari passu therewith.

4

Drag Along Rights

4.1

If at any time:

4.1.1

the shareholders of the Ordinary Shareholder propose to sell more than 50% of its ordinary share capital (the HoldCo Shares ); or

4.1.2

the Ordinary Shareholder proposes to sell more than 50% of the Ordinary Shares,

(each a Sale ),

through any transaction or series of related transactions, the Ordinary Shareholder may, prior to but in contemplation of such Sale, elect to deem such Transfer of the HoldCo Shares or the Ordinary Shares that are to be the subject of the Sale to be a Drag-Along Sale , and in such case each Ordinary A Shareholder (together the Dragged Shareholders and each a Dragged Shareholder ) shall take all actions which are required in this article 4.

B-8

4.2

Each Dragged Shareholder shall participate in such Drag-Along Sale by Transferring all the Ordinary A Shares to the proposed transferee (any such Ordinary A Shares being Sale Shares ) and:

4.2.1

in consideration for their Sale Shares, subject to article 4.8, each Ordinary Shareholder shall receive an amount equal to 20 per cent. of the amount by which the consideration payable to the shareholders of the Ordinary Shareholder or the Company (as the case may be) exceeds the Hurdle (or a prorated amount of the Hurdle if less than 100% of the Ordinary Shareholder or the Company is to be acquired), pro-rata to the proportion of the Ordinary A Shares which they own, rounded down to the nearest penny. For the avoidance of doubt, if the amount payable to the shareholders of the Ordinary A Shareholders pursuant to this article 4.2 is equal to or less than the Hurdle (or a pro rated amount of the Hurdle if less than 100% of the Ordinary Shareholder or the Company is acquired) then no sum shall be payable to the Dragged Shareholder; and

4.2.2

on the same terms and conditions as the HoldCo Shares or Ordinary Shares (as the case may be) are being Transferred.

4.3

The Ordinary Shareholder shall provide notice of a Drag-Along Sale (the Drag-Along Notice ) to the Dragged Shareholders. Such Drag-Along Notice shall disclose in reasonable detail the proposed terms and conditions of the proposed Drag-Along Sale.

4.4

With respect to any Drag Along Sale, each Dragged Shareholder agrees that he or she shall use all reasonable efforts to effect such Drag Along Sale as expeditiously as practicable, including delivering all documents necessary or reasonably requested for the purpose of Transferring the Drag Along Shares to the proposed transferee save that each Dragged Shareholder shall not be required to give any warranties or indemnities upon any Drag-Along Sale (other than as to title to the Sale Shares and their capacity to enter into all relevant documents). Each Dragged Shareholder shall Transfer such Shares with full legal and beneficial title and free from Encumbrances.

4.5

In the event of a Drag-Along Sale, each Dragged Shareholder shall be required to Transfer such Shares as provided in the Drag-Along Sale Notice.

4.6

Within seven (7) days after dispatch of the Drag Along Notice the Ordinary Shareholder shall confirm to or notify the Dragged Shareholders of the date, being at least seven (7) days later, on which the sale and purchase of such Drag Along Shares is to be completed (the Drag Completion Date ). The Drag Completion Date shall be the same date as the date on which the HoldCo Shares or Ordinary Shares (as the case may be) referred to in article 4.1 are Transferred unless all Dragged Shareholders and Ordinary Shareholders agree otherwise in writing.

4.7

If a Dragged Shareholder fails to deliver share Transfer forms for his or her Drag Along Shares to the Ordinary Shareholder by the Drag Completion Date, the Ordinary Shareholder or the Board (as the case may be) may (and shall, if requested by the Ordinary Shareholder) authorise the Company to Transfer the Drag Along Shares from the Dragged Shareholder to each prospective purchaser of the Drag Along Shares to the extent the prospective purchaser has, by the Drag Completion Date, provided the Company with the requisite consideration due (if any) in respect of the Drag Along Shares offered to him or her pursuant to article 4.2. The directors of the Company shall then authorise registration of the Transfer. The defaulting Dragged Shareholder shall surrender his or her share certificate for his Drag Along Shares to the Company. On surrender, he or she shall be entitled to the consideration due but shall not be entitled to any interest that may have been earned by the Company on the proceeds of the sale.

4.8

For the avoidance of doubt, in the event that an Ordinary A Shareholder is Dragged pursuant to this article 4, the calculation of the consideration payable to the shareholders of the Ordinary Shareholder shall include any distributions made to those shareholders by the Ordinary Shareholder pursuant to the terms of that transaction.

B-9

5

Tag Along Rights

5.1

Other than where a Drag-Along Sale is being conducted, no Sale shall be made unless, before the Transfer is completed, the Ordinary Shareholder shall have first procured that an offer complying with the provisions of article 5.2 has been made by the proposed transferee (the Tag-Along Sale ). The Ordinary A Shareholders (together the Tag Along Shareholders ) shall participate in the Tag Along Sale, such that the Tag Along Shareholders can request that the Tag Along Sale shall not be registered unless the proposed transferee unconditionally offers to buy all of the Shares held by the Tag Along Shareholders in accordance with article 5.2.

5.2

The offer referred to in article 5.1 above:

5.2.1

shall be open for acceptance for a period of at least seven (7) days following the making of the offer;

5.2.2

shall be on terms that the purchase of any Shares in respect of which such offer is accepted shall be completed at the same time as the relevant transaction and, subject to article 5.2.3, on the same terms as that pertaining to the Ordinary Shareholder save for the proceeds payable to the Tag Along Shareholders which shall be calculated in accordance with article 5.2.3 below; and

5.2.3

shall be such that the Tag Along Shareholder will receive an amount equal to 20 per cent. of the amount by which the consideration payable to the shareholders of the Ordinary Shareholder or the Company (as the case may be) exceeds the Hurdle (or a prorated amount of the Hurdle if less than 100% of the Ordinary Shareholder or the Company is to be acquired), pro-rata to the proportion of the Ordinary A Shares which they own, rounded down to the nearest penny. For the avoidance of doubt, if the amount payable to the shareholders of the Ordinary Shareholders pursuant to this article 5.2 is equal to or less than the Hurdle (or a pro rated amount of the Hurdle if less than 100% of the Ordinary Shareholder or the Company is acquired) then no sum shall be payable to the Tagged Shareholder.

5.3

If the offer with respect to any Tag-Along Sale is accepted by any Ordinary Shareholder, such Shareholder agrees that he or she shall use all reasonable efforts to effect such Tag-Along Sale as expeditiously as practicable, including delivering all documents necessary or reasonably requested in connection with such sale and entering into any instrument, undertaking or obligation necessary or reasonably requested in connection with such sale, save that each Tagged Shareholder shall not be required to give any warranties or indemnities upon any Tag-Along Sale (other than as to title to the Sale Shares and their capacity to enter into all relevant documents).

5.4

For the avoidance of doubt, in the event that an Ordinary A Shareholder is tagged pursuant to this article 5, the calculation of the consideration payable to the shareholders of the Ordinary Shareholder shall include any distributions made to those shareholders by the Ordinary Shareholder pursuant to the terms of that transaction.

6

Leaver Provisions

6.1

If an Ordinary A Shareholder becomes a Leaver at any time the Ordinary A Shares held by him or her will be Transferred to the Ordinary Shareholder, on the following basis:

6.1.1

in circumstances constituting him/her a Bad Leaver, the Ordinary Shareholder agrees to acquire and the Bad Leaver agrees to sell the Bad Leaver's Ordinary A Shares and the consideration for that acquisition shall be:

6.1.1.1

to the extent the Bad Leaver holds Vested Carry. 80 per cent of the Vested Carry (as defined below); or

6.1.1.2

to the extent the Bad Leaver does not hold Vested Carry, the price paid for the Ordinary A Shares.; or

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6.1.2

in circumstances constituting him/her a Good Leaver the Ordinary Shareholder agrees to acquire and the Good Leaver agrees to sell the Good Leaver's Ordinary A Shares and the consideration for that acquisition shall be:

6.1.2.1

to the extent the Good Leaver holds Vested Carry, 100 per cent of the Vested Carry; or

6.1.2.2

to the extent the Good Leaver does not hold Vested Carry, the price paid for the Ordinary A Shares.

6.2

Each Shareholder agrees (and hereby warrants to the Ordinary Shareholder) that if he/she is a Leaver all Shares Transferred pursuant to this article 6.2 shall be Transferred with full legal and beneficial title and free from any Encumbrances. Each transferor of Shares hereby warrants to the Ordinary Shareholder that it shall have full power and authority to Transfer such Shares.

6.3

For the purposes of Transferring Shares pursuant to this article 6.3, each Ordinary A Shareholder agrees that, if he/she is a Leaver, he/she shall do all such acts and/or execute all such documents in a form reasonably satisfactory to the Ordinary Shareholder as may reasonably be required to give effect to the Transfer of the legal and beneficial ownership of the relevant Shares, including the delivery of Transfers of the Shares duly executed by the registered holder(s) thereof together with the relevant share certificates in the names of such registered holder(s) and share certificates.

6.4

Subject to article 6.5, against delivery of all documents required pursuant to article 6.3, the Ordinary Shareholder shall pay (or procure payment) in cash or, solely at the Ordinary Shareholder's discretion, another form of consideration of equal value, of the relevant consideration, determined in accordance with article 6.1.1 and 6.1.2 on or before the date falling 180 days after the later of:

6.4.1

the date on which the relevant Ordinary A Shareholder became a Leaver; and

6.4.2

the date on which the value of the relevant Ordinary A Shares as determined pursuant to either article 6.1.1 or 6.1.2 (as applicable) is finally agreed or determined in accordance with the terms of these articles.

6.5

If for any reason the provisions of article 6.3 are not complied with by a Leaver, the Board may, and shall do so if requested by the Ordinary Shareholder, authorise any director to Transfer the relevant Ordinary A Shares on behalf of the Leaver to the Ordinary Shareholder (or its nominee) to the extent that the Ordinary Shareholder has put the Company in funds to pay the agreed or determined consideration for the Ordinary A Shares concerned. The Board shall then authorise registration of the Transfer. The defaulting Leaver shall deliver to the Company Transfers of the relevant Shares duly executed by the registered holder(s) thereof with the relevant share certificates in the names of such registered holders. On such delivery, such defaulting Leaver shall be entitled to the agreed or determined consideration for the relevant Shares but shall not be entitled to any interest which may have been earned by the Company on the proceeds of the sale. Pending the due registration of the Ordinary Shareholder as the holder of the relevant Shares, the defaulting Leaver shall hold all rights and benefits in respect of such Shares on trust for the Ordinary Shareholder and the Ordinary Shareholder (or its nominee) shall be appointed as proxy to vote and take all actions and give all consents relating to those Shares as may be required under these articles.

7

Put Option

7.1

The Ordinary Shareholder hereby grants to each Ordinary A Shareholder a right to require the Ordinary Shareholder, or such person as the Ordinary Shareholder may designate, to purchase (or procure the purchase by such person as the Ordinary Shareholder may designate) a number of the Ordinary A Shares he or she owns as determined in accordance with article 7.3 (the Put Option ).

B-11

7.2

The Put Option may only be exercised:

7.2.1

twice per financial year of the Company :

7.2.1.1

within 90 days of the publication of the Ordinary Shareholder's annual results; and/or

7.2.1.2

after 180 days have lapsed since the publication of the Ordinary Shareholder's annual results, but before 270 days have lapsed since the publication of the Ordinary Shareholder's annual results; and

7.2.2

only to the extent the Ordinary A Shareholder is not in possession of material nonpublic information in relation to the Ordinary Shareholder ,

by each such Ordinary A Shareholder (the Exercising Shareholder ) giving notice in writing to the Ordinary Shareholder specifying the number of Shares subject to the Put Option (an Option Notice ).

7.3

The number of Ordinary A Shares (the Put Option Shares ) in relation to which the Put Option applies will be calculated each financial year based on the level of Shared EBITDA for that financial year (the Financial Year in Question ) and shall be calculated as follows:

7.3.1

to the extent there is no Shared EBITDA for the Financial Year in Question the number of Put Option Shares in relation to that financial year shall be zero; or

7.3.2

to the extent there is Shared EBITDA for the Financial Year in Question, the number of Put Option Shares which can be put to the Ordinary Shareholder will be determined by the Ordinary Shareholder at its sole discretion,

and any consideration payable pursuant to this article 7.3 shall be calculated in accordance with article 7.4.

7.4

The consideration payable per Put Option Share by the Ordinary Shareholder to an Exercising Shareholder will be payable, at the discretion of the Ordinary Shareholder, in:

7.4.1

HoldCo Shares (or, at the discretion of the Ordinary Shareholder, Depositary Interests in respect thereof); or

7.4.2

cash,

equal in value to the Shared EBITDA divided by the aggregate number of Put Option Shares which can be put to the Ordinary Shareholder pursuant to article 7.3.2, with each Ordinary A Shareholder being entitled to a pro rata amount of the consideration equal to the proportion of Ordinary A Shares which the Exercising Shareholder is able to put to the Ordinary Shareholder for the Financial Year in Question. The amount payable per Ordinary A Shareholder pursuant to this article 7.4 being the Exercise Price .

7.5

If any Ordinary A Shareholder receives HoldCo Shares subject to article 7.4.1 then they:

7.5.1

may be required, in HoldCo's sole discretion, to pay the aggregate nominal value of the HoldCo Shares issued to them in consideration for their Put Option Shares or, where Depositary Interests are provided, the aggregate nominal value of the HoldCo Shares in respect thereof; and

7.5.2

will be required not to transfer 20 per cent. of these HoldCo Shares for a period of two years from the date on which they are received. The provisions of this article 7.5.2 shall not prevent a Depositary from transferring HoldCo Shares to the Exercising Shareholder as part of the surrender of their Depositary Interest in respect thereof, provided that following such transfer the shareholder will remain subject to the provisions of this article.

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8

Payment and Closing

8.1

In respect of each Option Notice, the Ordinary Shareholder and the relevant Ordinary A Shareholder shall be bound to complete the sale and purchase of Put Option Shares on the Payment Date.

8.2

The Payment Date shall be the date falling 60 days after the date on which the relevant Option Notice is served by the Ordinary Shareholder provided that if such date is not a Business Day, the Payment Date shall be the first following day that is a Business Day.

8.3

In respect of each Option Notice, on the Payment Date:

8.3.1

the relevant Option A Shareholder, who is the legal and beneficial owner of the Put Option Shares, shall sell and the Ordinary Shareholder shall purchase (or procure to be purchased by a person designated by the Ordinary Shareholder) the Put Option Shares on the basis that they are sold on the Payment Date with legal and beneficial title and free from any Encumbrance and together with all rights attached to them contained in the memorandum of association and these articles;

8.3.2

the relevant Option A Shareholder shall deliver or cause to be delivered to the Ordinary Shareholder duly executed Transfers of the Put Option Shares together with the relevant share certificate(s); and

8.3.3

the Ordinary Shareholder shall pay (or procure to be paid) the Exercise Price to the relevant Ordinary A Shareholder in US dollars, into such bank account as is nominated by such Ordinary A Shareholder for such purpose, to be received in cleared funds in such account on or before the Payment Date.

8.4

If an Ordinary A Shareholder shall fail to deliver duly executed Transfers of the relevant Put Option Shares together with the relevant share certificate(s) in accordance with article 8.3.2 above, such Ordinary A Shareholder hereby irrevocably authorises and instructs (i) the Ordinary Shareholder to execute and deliver any necessary document or instrument of Transfer to effect the Transfer of the Put Option Shares to the Ordinary Shareholder (or such person as the Ordinary Shareholder may designate) pursuant to article 8.3.1, and (ii) the Company to cause the Ordinary Shareholder (or such person as the Ordinary Shareholder may designate) to be entered into the register of members as the holder of the Put Option Shares, in each case without obtaining the further consent of Ordinary A Shareholder or any other person.

8.5

The Ordinary Shareholder shall not be obliged to complete the purchase of the Put Option Shares until the relevant Ordinary A Shareholder complies fully with the requirements of article 8.3.2 or the Transfer of the Put Option Shares to the Ordinary Shareholder (or such person as the Ordinary Shareholder may designate) is effected in accordance with article 8.4.

8.6

Provided the relevant Ordinary A Shareholder has complied with the requirements of article 8.3.2 above, any failure by the Ordinary Shareholder to pay the Exercise Price or any part thereof due to the Exercising Shareholder in accordance with article 8.3.3 above shall constitute an Option Default and default interest shall accrue on the outstanding amount of the Exercise Price from the relevant Exercise Date up to and including the date on which the Exercise Price is paid in full to such Exercising Shareholder at the rate of 3-month US dollar LIBOR plus 7 per cent. (the Default Rate ).

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8.7

Each Exercising Shareholder and the Ordinary Shareholder authorises and instructs the Company or any one of the directors of the Company to execute and deliver any necessary document or instrument of Transfer to effect the Transfer of the Shares to the relevant Exercising Shareholder pursuant to article 8.3.2 without obtaining the further consent of each Exercising Shareholder, the Ordinary Shareholder or any other person and shall cause the relevant Exercising Shareholder to be entered into the register of members as the holder of the Shares.

9

Share Certificates

9.1

Except (unless otherwise determined by the directors) in the case of the subscribers to the memorandum of association of the Company and subject always to the conditions of allotment of Shares, every member, upon becoming the holder of any Shares, shall be entitled without payment to one certificate for all the Shares of each class held by him (and, upon Transferring a part of his holding of Shares of any class, to a certificate for the balance of such holding) or several certificates each for one or more of his Shares upon payment for every certificate after the first of such reasonable sum as the directors may determine. Every certificate shall be sealed in accordance with article 32 or signed either by two directors or by one director and the secretary. Every certificate shall specify the number, class and distinguishing numbers (if any) of the Shares to which it relates and the amount or respective amounts paid up thereon. The Company shall not be bound to issue more than one certificate for Shares held jointly by several persons and delivery of a certificate to one joint holder shall be sufficient delivery to all of them.

9.2

If a Share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms (if any) as to evidence and indemnity and payment of the expenses reasonably incurred by the Company in investigating evidence as the directors may determine but otherwise free of charge, and (in the case of defacement or wearing out) on delivery up of the old certificate.

10

Lien

10.1

The Company shall have a first and paramount lien on every Share (not being a fully paid Share) for all moneys (whether presently payable or not) payable at a fixed time or called in respect of that Share. The directors may at any time declare any Share to be wholly or in part exempt from the provisions of this article. The Company's lien on a Share shall extend to any amount payable in respect of it.

10.2

The Company may sell in such manner as the directors determine any Shares on which the Company has a lien if a sum in respect of which the lien exists is presently payable and is not paid within 14 clear days after notice has been given to the holder of the Share or to the person entitled to in consequence of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may be sold.

10.3

To give effect to a sale the directors may authorise some person to execute an instrument of Transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The title of the transferee to the Shares shall not be affected by any irregularity in or invalidity of the proceedings in reference to the sale.

10.4

The net proceeds of the sale, after payment of the costs, shall be applied in payment of so much of the sum for which the lien exists as is presently payable, and any residue shall (upon surrender to the Company for cancellation of the certificate for the Shares sold and subject to a like lien for any moneys not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the sale.

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11

Calls on Shares and Forfeiture

11.1

Subject to the terms of allotment, the directors may make calls upon the members in respect of any moneys unpaid on their Shares (whether in respect of nominal value or premium) and each member shall (subject to receiving at least 14 clear days' notice specifying when and where payment is to be made) pay to the Company as required by the notice the amount called on his Shares. A call may be required to be paid by instalments. A call may, before receipt by the Company of any sum due thereunder, be revoked in whole or part and payment of a call may be postponed in whole or part. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent Transfer of the Shares in respect whereof the call was made.

11.2

A call shall be deemed to have been made at the time when the resolution of the directors authorising the call was passed.

11.3

The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof.

11.4

If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid at the rate fixed by the terms of allotment of the Share or in the notice of the call or at such rate as the directors may determine but the directors may waive payment of the interest wholly or in part.

11.5

An amount payable in respect of a Share on allotment or at any fixed date, whether in respect of nominal value or premium or as an instalment of a call, shall be deemed to be a call and if it is not paid the provisions of the articles shall apply as if that amount had become due and payable by virtue of a call. The Company may accept from a member the whole or a part of the amount remaining unpaid on Shares held by him, although no part of that amount has been called up. No interest shall be paid or become due as of right on monies paid to the Company in advance of a call being made but the directors may, if they from time to time think fit, pay interest on any such monies at such rate as they may deem appropriate.

11.6

Subject to the terms of allotment, the directors may make arrangements on the issue of Shares for a difference between the holders in the amounts and times of payment of calls on their Shares.

11.7

If a call remains unpaid after it has become due and payable the directors may give to the person from whom it is due not less than 14 clear days' notice requiring payment of the amount unpaid together with any interest which may have accrued. The notice shall name the place where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the call was made will be liable to be forfeited.

11.8

If the notice is not complied with any Share in respect of which it was given may, before the payment required by the notice has been made, be forfeited by a resolution of the directors and the forfeiture shall include all dividends or other moneys payable in respect of the forfeited Shares and not paid before the forfeiture.

11.9

Subject to the provisions of the Law, a forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the directors determine either to the person who was before the forfeiture the holder or to any other person and at any time before sale, re-allotment or other disposition, the forfeiture may be cancelled on such terms as the directors think fit. Where for the purposes of its disposal a forfeited Share is to be Transferred to any person the directors may authorise some person to execute an instrument of Transfer of the Share to that person.

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11.10

A person whose Shares have been forfeited shall cease to be a member in respect of such Shares and shall surrender to the Company for cancellation the certificate for the Shares forfeited but shall remain liable to the Company for all moneys which at the date of forfeiture were presently payable by him to the Company in respect of those Shares with interest at the rate at which interest was payable on those moneys before the forfeiture or at such rate as the directors may determine from the date of forfeiture until payment, but the directors may waive payment wholly or in part or enforce payment without any allowance for the value of the Shares at the time of forfeiture or for any consideration received on their disposal.

11.11

A declaration under oath by a director or the secretary that a Share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the Share and the declaration shall (subject to the execution of an instrument of Transfer if necessary) constitute a good title to the Share and the person to whom the Share is disposed of shall not be bound to see to the application of the consideration, if any, nor shall his title to the Share be affected by any irregularity in or invalidity of the proceedings in reference to the forfeiture or disposal of the Share.

12

Transfer of Shares

12.1

The instrument of Transfer of a Share may be in any usual form or in any other form which the directors may approve and shall be executed by or on behalf of the transferor and, unless the Shares are fully paid, by or on behalf of the transferee. No person shall be recognised as the holder of Shares until his name is entered in the register of members.

12.2

The directors may refuse to register the Transfer of a Share (whether or not fully paid) to a person of whom they do not approve without assigning any reasons therefore and they may refuse to register the Transfer of a Share on which the Company has a lien. They may also refuse to register a Transfer unless the instrument of Transfer:

12.2.1

is lodged at the Office or at such other place as the directors may appoint and is accompanied by the certificate for the Shares to which it relates and such other evidence as the directors may reasonably require to show the right of the Transferor to make the Transfer;

12.2.2

is in respect of only one class of Shares; and

12.2.3

in favour of not more than four transferees.

12.3

If the directors refuse to register a Transfer of a Share, they shall within two months after the date on which the instrument of Transfer was lodged with the Company send to the transferor and the transferee notice of the refusal.

12.4

The registration of Transfers of Shares or of Transfers of any class of Shares may be suspended at such times and for such periods (not exceeding 30 days in any year) as the directors may determine.

12.5

No fee shall be charged for the registration of any instrument of Transfer or other document relating to or affecting the title to any Share,

12.6

The Company shall be entitled to retain any instrument of Transfer which is registered, but any instrument of Transfer which the directors refuse to register shall be returned to the person lodging it when notice of the refusal is given.

12.7

Subject to articles 6.1, 8.3, 12.8 and 12.9 Ordinary A Shares may not be Transferred without prior written approval from the Board. In the event of any Transfer to the Ordinary Shareholder pursuant to these articles:

12.7.1

the Ordinary Shareholder shall have the right but not the obligation, at its discretion to transfer such Ordinary A Shares to an employment trust established for the benefit of the employees of the Ordinary Shareholder Group or the Company Group for such price as the Ordinary Shareholder shall determine and agree with such transferee pending Transfer to employees of the Ordinary Shareholder Group or the Company Group or such other persons as the Ordinary Shareholder may approve; and

12.7.2

in the event that the Ordinary Shareholder becomes the owner of any Ordinary A Shares the Ordinary Shareholder will not have any right to put any Ordinary A Shares pursuant to article 7.1 or to participate in any Distribution payable to Ordinary A Shareholders pursuant to article 34.1.

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12.8

Any Ordinary A Shareholder who is declared bankrupt or has a receiver appointed who has a power of sale over the property of the Ordinary A Shareholder shall Transfer their Ordinary A Shares to the Ordinary Shareholder at a price per Ordinary A Share equal to the nominal value of the Ordinary A Share.

12.9

Any Ordinary A Shareholder may, at any time, Transfer their Ordinary A Shares to:

12.9.1

an Ordinary A Shareholder's spouse or civil partner;

12.9.2

a relative of the Ordinary A Shareholder who, on the date of the Transfer in question, has shared the same household as the manager for at least 12 months

12.9.3

the Ordinary A Shareholder's children or step children;

12.9.4

a parent or step-parent of any Ordinary A Shareholder;

12.9.5

a trust benefitting any of the persons mentioned in 12.9.1 to 12.9.4, or

12.9.6

a charitable foundation associated with the transferring Ordinary A Shareholder

(each such person being a Permitted Transferee ) on the condition that the transferring Ordinary A Shareholder gives written notice of the Transfer and the Permitted Transferee executes a document pursuant to which the transferee acknowledges that they are bound by these Articles and in particular article 12.7.

13

Transmission of Shares

13.1

If a member dies, the survivor or survivors where he was a joint holder, and his personal representatives where he was a sole holder or the only survivor of joint holders, shall be the only persons recognised by the Company as having any title to his interest; but nothing herein contained shall release the estate of a deceased member from any liability in respect of any Share which had been jointly held by him.

13.2

A person becoming entitled to a Share in consequence of the death or bankruptcy of a member may, upon such evidence being produced as the directors may properly require, elect either to become the holder of the Share or to have some person nominated by him registered as the transferee. If he elects to become the holder he shall give notice to the Company to that effect. If he elects to have another person registered he shall execute an instrument of Transfer of the Share to that person. All the articles relating to the Transfer of Shares shall apply to the notice or instrument of Transfer as if it were an instrument of Transfer executed by the member and the death or bankruptcy of the member had not occurred.

13.3

A person becoming entitled to a Share in consequence of the death or bankruptcy of a member shall have the rights to which he would be entitled if he were the holder of the Share, except that he shall not, before being registered as the holder of the Share, be entitled in any respect of it to attend or vote at any meeting of the Company or at any separate meeting of the holders of any class of Shares in the Company.

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14

Consolidation of Shares

Whenever as a result of a consolidation of Shares any members would become entitled to fractions of a Share, the directors may, on behalf of those members, sell the Shares representing the fractions for the best price reasonably obtainable to any person (including, subject to the provisions of the Law, the Company) and distribute the net proceeds of sale in due proportion among those members, and the directors may authorise some person to execute an instrument of Transfer of the Shares to, or in accordance with the directions of, the purchaser. The transferee shall not be bound to see to the application of the purchase money nor shall his title to the Shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale.

15

General Meetings

15.1

It is not a requirement that an annual general meeting be held by the Company.

15.2

The directors may call general meetings and, on the requisition of members pursuant to the provisions of the Law, shall forthwith proceed to call a general meeting to be held as soon as practicable and in no event later than two months after the receipt of the requisition. If there are not sufficient directors to call a general meeting, any director or any member of the Company may call such a meeting. A general meeting may be convened outside the Island of Jersey.

16

Notice of General Meetings

16.1

All general meetings shall be called by at least 14 clear days’ notice but a general meeting may be called by shorter notice if it is so agreed:

16.1.1

in the case of an annual general meeting, by all the members entitled to attend and vote thereat; and

16.1.2

in the case of any other meeting by a majority in number of the members having a right to attend and vote at the meeting being a majority together holding not less than 90 per cent in nominal value of the Shares giving that right.

16.2

The notice shall specify the day, time and place of the meeting and the general nature of the business to be transacted.

16.3

Subject to the provisions of the articles and to any restrictions imposed on any Shares, the notice shall be given to all the members, to all persons entitled to a Share in consequence of the death or bankruptcy of a member, to the auditors, if any, and to every director who has notified the Company of his desire to receive such notice.

16.4

The accidental omission to give notice of a meeting to, or the non-receipt of a notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at the meeting.

16.5

Subject to article 17.15, a resolution in writing signed by or on behalf of each member who, at the date when the resolution is deemed to be passed, would be entitled to vote on the resolution if it were proposed at a meeting, shall be as valid and effectual as if it had been passed at a meeting of the Company or at a meeting of the holders of a class of Shares in the Company and may consist of several instruments in the same form each signed by or on behalf of one or more members. Such resolutions in writing may be used to pass a special resolution but not to remove any auditor of the Company and shall be deemed to be passed when the instrument, or the last of several instruments, is last signed or on such later date as is specified in the resolution.

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17

Proceedings at General Meetings

17.1

No business shall be transacted at any meeting unless a quorum is present. Two persons entitled to vote upon the business to be transacted, each being a member or a proxy for a member or a duly authorised representative of a body corporate, shall be a quorum. In the event that there is only one member of the Company entitled to vote upon the business to be transacted, in accordance with the Law, a quorum shall be such member and article 17.15shall apply.

17.2

If such a quorum is not present within half an hour from the time appointed for the meeting, or if during a meeting such a quorum ceases to be present, the meeting shall stand adjourned to the same day in the next week at the same time and place or such day, time and place as the directors may determine.

17.3

The chairman, if any, of the board of directors or in his absence some other director nominated by the directors shall preside as chairman of the meeting, but if neither the chairman nor such other director (if any) is present within 15 minutes after the time appointed for holding of the meeting and willing to act, the directors present shall elect one of their number to be chairman and, if there is only one director present and willing to act, he shall be chairman.

17.4

If no director is willing to act as chairman, or if no director is present within 15 minutes after the time appointed for holding the meeting, those present and entitled to be counted in a quorum shall choose one of their number to be chairman.

17.5

A director shall, notwithstanding that he is not a member, be entitled to attend and speak at any general meeting and at any separate meeting of the holders of any class of Shares in the Company.

17.6

The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place, but no business shall be transacted at an adjourned meeting other than business which might properly have been transacted at the meeting had the adjournment not taken place. When a meeting is adjourned for 14 days or more, at least seven clear days' notice shall be given specifying the day, time and place of the adjourned meeting and the general nature of the business to be transacted. Otherwise it shall not be necessary to give any such notice.

17.7

A resolution put to the vote of a meeting shall be decided on a show of hands unless before, or on the declaration of the result of, the show of hands a poll is duly demanded. Subject to the provisions of the Law, a poll may be demanded:

17.7.1

by the chairman; or

17.7.2

by at least two members having the right to vote on the resolution; or

17.7.3

by a member or members representing not less than one tenth of the total voting rights of all the members having the right to vote on the resolution; or

17.7.4

by a member or members holding Shares conferring a right to vote on the resolution being Shares on which an aggregate sum has been paid up equal to not less than one tenth of the total sum paid up on all the Shares conferring that right; and

17.7.5

a demand by a person as proxy for a member shall be the same as a demand by the member.

17.8

Unless a poll is duly demanded a declaration by the chairman that a resolution has been carried or carried unanimously, or by a particular majority, or lost, or not carried by a particular majority and an entry to that effect in the minutes of the meeting shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

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17.9

The demand for a poll may, before the poll is taken, be withdrawn but only with the consent of the chairman and a demand so withdrawn shall not be taken to have invalidated the result of a show of hands declared before the demand was made.

17.10

A poll shall be taken as the chairman directs and he may appoint scrutineers (who need not be members) and fix a day, time and place for declaring the result of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

17.11

In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall be entitled to a second or casting vote in addition to any other vote he may have.

17.12

A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken either forthwith or at such day, time and place as the chairman directs not being more than 30 days after the poll is demanded. The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll was demanded. If a poll is demanded before the declaration of the result of a show of hands and the demand is duly withdrawn, the meeting shall continue as if the demand had not been made.

17.13

No notice need by given of a poll not taken forthwith if the day, time and place at which it is to be taken are announced at the meeting at which it is demanded. In any other case, at least seven clear days' notice shall be given specifying the day, time and place at which the poll is to be taken.

17.14

If a member is by any means in communication (including, without limitation, communication by telephone) with one or more other members so that each member participating in the communication can hear what is said by any other of them, each member so participating in the communication shall be deemed to be present at a meeting with the other members so participating.

17.15

If the Company has only one voting Member, such Member may record its decision on a question or resolution in writing and that record shall constitute both the passing of the resolution and the minute of it. The Company shall circulate a copy of such record to all non-voting members.

18

Votes of Members

18.1

Subject to any rights or restrictions attached to any Shares, on a show of hands every Ordinary Shareholder who (being an individual) is present in person or by proxy or (being a body corporate) is present by a duly authorised representative or proxy, not being himself an Ordinary Shareholder entitled to vote, shall have one vote and on a poll every Ordinary Shareholder shall have one vote for every Share of which he is the holder. For the avoidance of doubt no Ordinary A Shareholder shall have any right to vote at a General Meeting whatsoever other than in relation to matters affecting the Company's share capital.

18.2

In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and seniority shall be determined by the order in which the names of the holders stand in the register of members.

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18.3

An Ordinary Shareholder in respect of whom an order has been made by any court having jurisdiction (whether in the Island of Jersey or elsewhere) in matters concerning mental disorder may vote, whether on a show of hands or on a poll, by his curator or other person authorised in that behalf appointed by that court, and any such curator or other person may, on a poll, vote by proxy. Evidence to the satisfaction of the directors of the authority of the person claiming to exercise the right to vote shall be deposited at the Office, or at such other place within the Island as is specified in accordance with the articles for the deposit of instruments of proxy within 48 hours of the time appointed for holding the meeting or adjourned meeting at which the right to vote is to be exercised and in default the right to vote shall not be exercisable.

18.4

No Ordinary Shareholder shall vote at any general meeting or at any separate meeting of the holders of any class of Shares in the Company, either in person or by proxy, in respect of any Share held by him unless all moneys presently payable by him in respect of that Share have been paid.

18.5

No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is tendered, and every vote not disallowed at the meeting shall be valid. Any objection made in due time shall be referred to the chairman whose decision shall be final and conclusive.

18.6

On a poll or show of hands votes may be given either personally or by proxy. An Ordinary Shareholder may appoint more than one proxy to attend on the same occasion and vote on different matters.

18.7

An instrument appointing a proxy shall be in writing in the usual form, or as approved by the directors, and shall be executed by or on behalf of the appointor.

18.8

Any corporation which is a member of the Company may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of members of the Company, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual member of the Company. The directors may require such evidence as they consider necessary of such representative's authority to represent a corporate member.

18.9

The instrument appointing a proxy and any authority under which it is executed or a copy of such authority certified by a notary or in some other way approved by the directors may:

18.9.1

be deposited at the Office or at such other place within Jersey as is specified in the notice convening the meeting or in any instrument of proxy sent out by the Company in relation to the meeting within 48 hours of the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote; or

18.9.2

in the case of a poll taken more than 48 hours after it is demanded, be deposited as aforesaid after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll; or

18.9.3

where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded, be delivered at the meeting at which the poll was demanded to the chairman or to the secretary or to any director; and

18.9.4

an instrument of proxy which is not deposited or delivered in a manner so permitted shall be invalid provided that no objection to any instrument of proxy may be made except at the meeting or adjourned meeting at which the proxy tenders his vote. The Company shall inform each member of the right to appoint a proxy and the proper method of depositing or delivering such proxy prior to a meeting in the notice convening such meeting.

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18.10

A vote given or poll demanded by proxy or by the duly authorised representative of a body corporate shall be valid notwithstanding the previous determination of the authority of the person voting or demanding a poll unless notice of the determination was received by the Company at the Office or at such other place at which the instrument of proxy was duly deposited before the commencement of the meeting or adjourned meeting at which the vote is given or the poll demanded or (in the case of a poll taken otherwise than on the same day as the meeting or adjourned meeting) the time appointed for taking the poll.

19

Number of Directors

19.1

Subject to the provisions of the Law, the Company in general meeting may from time to time fix the maximum and/or minimum number of directors and unless so fixed the number of directors (other than alternate directors) shall not be subject to any maximum and the minimum number shall be:

19.1.1

one director, for any period during which the Company is a Private Company; and

19.1.2

two directors, for any period during which the Company is a Public Company.

20

Alternate Directors

20.1

Any director (other than an alternate director) may appoint any other director, or any other person willing to act, to be an alternate director and may remove from office an alternate director so appointed by him.

20.2

An alternate director shall be entitled to receive the same notice of meetings of directors and of all meetings of committees of directors of which his appointor is a member as his appointor is entitled to receive, to attend and vote at any such meeting at which the director appointing him is not personally present, and generally to perform all functions of his appointor as a director in his absence. An alternate director shall be entitled to receive such remuneration from the Company for his services as may be determined by the directors.

20.3

An alternate director shall cease to be an alternate director if his appointor ceases to be a director, but, if a director is reappointed, any appointment of an alternate director made by him which is in force immediately prior to his reappointment shall continue after his reappointment.

20.4

Any appointment or removal of an alternate director shall be by notice in writing to the Company signed by the director making or revoking the appointment or in any other manner approved by the directors.

20.5

Save as otherwise provided in the articles, an alternate director shall be deemed for all purposes to be a director and shall alone be responsible for his own acts and defaults and he shall not be deemed to be the agent of the director appointing him.

21

Powers of Directors

21.1

Subject to the provisions of the Law, the memorandum and the articles and to any directions given by special resolution, the business of the Company shall be managed by the directors who may exercise all the powers of the Company. No alteration of the memorandum or articles and no such direction shall invalidate any prior act of the directors which would have been valid if that alteration had not been made or that direction had not been given. The powers given by this article shall not be limited by any special power given to the directors by the articles and a meeting of directors at which a quorum is present may exercise all powers exercisable by the directors.

21.2

The directors may procure the payment by the Company of all expenses incurred in promoting and registering the Company.

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21.3

The directors may, by power of attorney or otherwise, appoint any person to be the agent of the Company for such purposes and on such conditions as they determine, including authority for the agent to delegate all or any of his powers.

22

Delegation of Directors' Powers

The directors may delegate any of their powers to any committee consisting of one or more directors and/or one or more persons who are not directors. They may also delegate to any managing director or any director holding any other executive office or to any other person such of their powers as they consider desirable to be exercised by him. Any such delegation may be made subject to any conditions the directors may impose, and either collaterally with or to the exclusion of their own powers and may be revoked or altered. Subject to any such conditions, the proceedings of a committee with two or more members shall be governed by the articles regulating the proceedings of directors so far as they are capable of applying.

23

Appointment of Directors

23.1

Subject to the provisions of the Law, the first directors of the Company shall be appointed in writing by the subscribers of the memorandum or by a majority of them.

23.2

Subject to the provisions of the Law and save in the case of a resolution duly passed unanimously by or on behalf of all the members entitled to attend the meeting and vote thereon, no person shall be appointed a director at any general meeting unless:

23.2.1

he is recommended by the directors; or

23.2.2

not less than 7 nor more than 35 clear days before the date appointed for the meeting, notice executed by a member qualified to vote at the meeting has been given to the Company of the intention to propose that person for appointment stating the particulars which would, if he were so appointed, be required to be included in the Company's register of directors together with notice executed by that person of his willingness to be appointed.

23.3

The directors shall, upon receiving a notice of the type described in article 23.2, convene a general meeting of the members without delay for the purpose of dealing with such proposal.

23.4

Subject to the provisions of the Law and subject as aforesaid, the Company may by ordinary resolution appoint a person who is willing to act to be a director either to fill a vacancy or as an additional director.

23.5

Subject to the provisions of the Law, the directors may appoint a person who is willing to act as a director, either to fill a vacancy or as an additional director, provided that the appointment does not cause the number of directors to exceed any number fixed by or in accordance with the articles as the maximum number of directors.

24

Disqualification and Removal of Directors

24.1

The office of a director shall be immediately vacated if:

24.1.1

he ceases to be a director by virtue of any provision of the Law or he becomes prohibited by law from or disqualified from being a director; or

24.1.2

he becomes bankrupt or makes any arrangement or composition with his creditors generally; or

24.1.3

he resigns from office by written notice to the Company delivered to the Office by hand, post or facsimile; or

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24.1.4

he shall for more than six consecutive months have been absent without permission of the directors from meetings of directors, and/or of any committee established of which he is a member, held during that period and the directors resolve that his office be vacated; or

24.1.5

(where a corporate director) the corporate director fails to comply with the provisions of the Law including, without limitation, Article 73(4) of the Law; or

24.1.6

the Company so resolves by ordinary resolution.

24.2

The Company may by ordinary resolution remove any director from office notwithstanding any agreement between the Company and such director but such removal shall be without prejudice to any claim such director may have for damages for breach of contract between him and the Company.

25

Remuneration of Directors

25.1

Directors are entitled to such remuneration as the directors determine:

25.1.1

for their services to the Company as directors, and

25.1.2

for any other service which they undertake for the Company.

25.2

Subject to the articles, a director's remuneration may:

25.2.1

take any form, and

25.2.2

include any arrangements in connection with the payment of a pension, allowance or gratuity, or any death, sickness or disability benefits, to or in respect of that director.

25.3

Unless the directors decide otherwise, directors’ remuneration accrues from day to day.

26

Directors' Expenses

The directors may be paid all reasonable travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of directors or committees of directors or general meetings or separate meetings of the holders of any class of Shares or of debentures of the Company or otherwise in connection with the discharge of their duties.

27

Directors' Appointment and Interests

27.1

Subject to the provisions of the Law, the directors may appoint one or more of their number to the office of managing director or to any other executive office of the Company and may enter into an agreement or arrangement with any director for his employment by the Company or for the provision by him of any services outside the scope of the ordinary duties of a director. Any such appointment, agreement or arrangement may be made upon such terms as the directors determine and they may remunerate any such director for his services as they think fit. Any appointment of a director to an executive office shall terminate if he ceases to be a director but without prejudice to any claim to damages for breach of the contract of service between the director and the Company.

27.2

Subject to the provisions of the Law, and provided that he has disclosed in accordance with the Law the nature and extent of any material interests of his, a director notwithstanding his office:

27.2.1

may be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested;

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27.2.2

may be a director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the Company or in which the Company is otherwise interested; and

27.2.3

shall not, by reason of his office, be accountable to the Company for any benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit.

27.3

An interest of which a director has no knowledge and of which it is unreasonable to expect him to have knowledge shall not be treated as an interest of his.

28

Directors' Gratuities and Pensions

The directors may provide benefits, whether by the payment of gratuities or pensions or by insurance or otherwise, for any director who has held but no longer holds any executive office or employment with the Company or with any body corporate which is or has been a subsidiary of the Company or a predecessor in business of the Company or of any such subsidiary, and for any member of his family (including a spouse and former spouse) or any person who is or who was dependent on him, and may (as well before as after he ceases to hold such office or employment) contribute to any fund and pay premiums for the purchase or provision of any such benefit.

29

Proceedings of Directors and Interests

29.1

Subject to the provisions of the articles, the directors may regulate their proceedings as they think fit. A director may, and the secretary at the request of a director shall, call a meeting of the directors. Questions arising at a meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote. A director who is also an alternate director shall be entitled in the absence of his appointor to a separate vote on behalf of his appointor in addition to his own vote.

29.2

If a director is by any means in communication (including, without limitation, communication by telephone) with one or more other directors so that each director participating in the communication can hear what is said by any other of them, each director so participating in the communication shall be deemed to be present at a meeting with the other directors so participating.

29.3

Whenever two or more persons hold the office of director in the Company the quorum necessary for the transaction of the business of the directors shall be two or such greater number as may be fixed by the Company in general meeting from time to time. When only one director is in office, he shall have and may exercise all the powers in and over the affairs of the Company as by these articles are conferred on the directors for so long as the Company is a Private Company. A person who holds office only as an alternate director shall, if his appointor is not present, be counted in the quorum.

29.4

The continuing directors or a sole continuing director may act notwithstanding any vacancies in their number, but, if the number of directors is less than the number fixed as the quorum or less than the minimum number of directors fixed by the Company in general meeting or less than the number required by the Law, the continuing directors or director may act only for the purpose of filling vacancies or of calling a general meeting.

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29.5

The directors may appoint one of their number to be the chairman of the board of directors and may at any time remove him from that office. Unless he is unwilling to do so, the director so appointed shall preside as chairman at every meeting of directors at which he is present. If there is no director holding that office, or if the director holding it is unwilling to preside or is not present within five minutes after the time appointed for the meeting or is unable to attend a meeting, the directors present may appoint one of their number to be chairman of that meeting.

29.6

All acts done by a meeting of directors, or of a committee of directors, or by a person acting as a director shall, notwithstanding that it be afterwards discovered that there was a defect in the appointment of any director or that any of them were disqualified from holding office, or had vacated office, or were not entitled to vote, be as valid as if every such person had been duly appointed and was qualified and had continued to be a director and had been entitled to vote.

29.7

A resolution in writing signed by all the directors entitled to receive notice of a meeting of directors or of a committee of directors and/or other persons to whom the directors have delegated any of their powers shall be valid and effectual as if it had been passed at a meeting of directors or (as the case may be) a committee of directors (and/or other persons) duly convened and held and may consist of several documents in the like form each signed by one or more directors or other persons; but a resolution signed by an alternate director need not also be signed by his appointor and, if it is signed by a director who has appointed an alternate director, it need not be signed by the alternate director in that capacity.

29.8

Every director shall disclose to the Company all interests which are required to be so disclosed by virtue of the provisions of the Law. The disclosure shall be made in any manner allowed or directed by the Law.

29.9

A director may vote as a director in regard to any transaction in which he is interested or upon any matter arising therefrom and if he shall so vote his vote shall be counted and he shall be counted in the quorum present at the meeting.

29.10

Any corporation which is a director of the Company may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of directors or committees of directors of the Company, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual director of the Company. The directors may require such evidence as they consider necessary of such representative's authority to represent a corporate director.

30

Secretary

Subject to the provisions of the Law, the secretary shall be appointed by the directors for such term, at such remuneration and upon such conditions as they may think fit; and any secretary so appointed may be removed by them.

31

Minutes

The directors shall cause minutes to be made in books kept for the purpose in accordance with the Law.

32

Seal

32.1

The Company may have a common seal ( Common Seal ) upon which the name of the Company shall be engraved in legible characters.

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32.2

If the Company engages in business outside the Island of Jersey, the directors may determine that it shall have for use in any country, territory or place outside the Island of Jersey an official seal ( Branch Seal ) which shall be a facsimile of the Common Seal with the addition on its face either of the words “Branch Seal” or the name of the country, territory or place where it is to be used.

32.3

The directors may determine that the Company shall have, for use for sealing securities issued by the Company or documents creating or evidencing securities so issued, an official seal ( Securities Seal ) which shall be a facsimile of the Common Seal with the addition of the word “Securities” on its face.

32.4

No seal of the Company shall be used except with the general or special authority of the directors or of a committee of one or more of the directors (and/or one or more other persons) authorised by the directors. The directors may from time to time (generally or in relation to any particular instrument or otherwise howsoever) provide for the person or persons who shall sign any instrument to which any seal of the Company is affixed and until otherwise determined, every such instrument shall be signed by a director and by (or on behalf of) the secretary or a second director provided that:

32.4.1

in the case of documents creating or evidencing securities issued by the Company to which the Common Seal or the Securities Seal is affixed the directors may determine that the need for such signatures shall be dispensed with or that such signatures shall be affixed by means of some method of mechanical signature; and

32.4.2

the directors may appoint in writing under the Common Seal an agent who may affix the Branch Seal to a document to which the Company is a party. An agent appointed pursuant to this article shall be vested with such powers and discretions as the directors may from time to time determine. Unless otherwise resolved by the directors (generally or in relation to a particular instrument or otherwise howsoever), any such document to which the Branch Seal has been affixed by such agent shall be signed by such agent and if so signed there shall be no necessity for it to be signed by any other person on behalf of the Company. Details of all documents to which the Branch Seal is affixed shall be sent to the secretary without delay.

33

Dividends

33.1

Subject to the provisions of the Law, the Company may by ordinary resolution declare dividends in accordance with the respective rights of the members, but no dividend shall exceed the amount recommended by the directors.

33.2

Subject to the provisions of the Law, the directors may pay interim dividends. Subject to article 34.1. if the Share capital is divided into different classes, the directors may pay interim dividends on Shares which confer deferred or non-preferred rights with regard to dividend as well as on Shares which confer preferential rights with regard to dividend, but no interim dividend shall be paid on Shares carrying deferred or non-preferred rights if, at the time of payment, any preferential dividend is in arrears. The directors may also pay at intervals settled by them any dividend payable at a fixed rate if it appears to them that the profits available for distribution justify the payment. Provided the directors act in good faith, they shall not incur any liability to the holders of Shares conferring preferred rights for any loss they may suffer by the lawful payment of an interim dividend on any Shares having deferred or non-preferred rights.

33.3

Except as otherwise provided by the rights attached to Shares, all dividends shall be declared and paid according to the nominal amount paid up on each Share on which the dividend is paid. In the case of partly paid Shares all dividends shall be apportioned and paid proportionately to the nominal amounts paid up on those Shares during any portion or portions of the period in respect of which the dividend is paid, but, if any Share is issued on terms providing that it shall rank for dividend as from a particular date, that Share shall rank for dividend accordingly.

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33.4

A general meeting declaring a dividend may, upon the recommendation of the directors, direct that the dividend shall be satisfied wholly or partly by the distribution of assets and, where any difficulty arises in regard to the distribution, the directors may settle the same and in particular may issue fractional certificates and fix the value for distribution of any assets and may determine that cash shall be paid to any member upon the basis of the value so fixed in order to adjust the rights of members and may vest any assets in trustees.

33.5

Any dividend or other moneys payable in respect of a Share may be paid by cheque or by warrant sent by post to the registered address of the person entitled or, if two or more persons are the holders of the Share or are jointly entitled to it by reason of the death or bankruptcy of the holder, to the registered address of that one of those persons who is first named in the register of members or to such person and to such address as the person or persons entitled may in writing direct. Every cheque or warrant shall be made payable to the order of the person or persons entitled or to such other person as the person or persons entitled may in writing direct and payment of the cheque or warrant shall be good discharge to the Company. Any joint holder or other person jointly entitled to a Share as aforesaid may give receipts for any dividend or other moneys payable in respect of the Shares.

33.6

No dividend or other moneys payable in respect of a Share shall bear interest against the Company unless otherwise provided by the rights attached to the Share.

33.7

Any dividend which has remained unclaimed for 10 years from the date when it became due for payment shall, if the directors so resolve, be forfeited and cease to remain owing by the Company.

33.8

Subject to article 34.1. unless the Board passes a resolution authorising their participation the Ordinary A Shareholders will have no right to participate in any dividends.

34

Capital Distributions

34.1

On a return of capital on any Shares on a liquidation or winding up or upon any sums being received on a disposal of assets or Shares in a member of the Company Group outside of the ordinary course of business and subject to the Law, Distributable Cash shall be Distributed as soon as reasonably practicable in the following priority:

34.1.1

firstly, to the Ordinary Shareholder until the Ordinary Shareholder has received an amount equal to the Hurdle; and

34.1.2

secondly, the residual balance to be distributed on the following basis:

34.1.2.1

80 per cent. to the Ordinary Shareholder; and

34.1.2.2

20 per cent. to the Ordinary A Shareholders.

35

Accounts and Audit

35.1

No member shall (as such) have any right of inspecting any accounting records or other book or document of the Company except as conferred by law or authorised by the directors or by ordinary resolution of the Company.

35.2

Save as provided in this article it shall not be necessary for the accounts of the Company to be audited.

35.3

Auditors shall be appointed to examine and report upon the accounts of the Company if:

35.3.1

the directors so resolve; or

35.3.2

an ordinary resolution of the Company so requires; or

35.3.3

the Company is or becomes a Public Company.

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35.4

Subject to the provisions of the Law, the accounts of the Company, if audited, shall be audited in such manner and by such person or persons as may be determined by the directors.

36

Capitalisation of Profits

36.1

The directors may with the authority of an ordinary resolution of the Company:

36.1.1

subject as hereinafter provided, resolve to capitalise any undivided profits of the Company not required for paying any preferential dividend (whether or not they are available for distribution) or any sum standing to the credit of the Company's Share premium account or capital redemption reserve;

36.1.2

appropriate the sum resolved to be capitalised to the members in proportion to the nominal amounts of the Shares (whether or not fully paid) held by them respectively which would entitle them to participate in a distribution of that sum if the Shares were fully paid and the sum were distributable and were distributed by way of dividend and apply such sum on their behalf either in or towards paying up the amounts, if any, for the time being unpaid on any Shares held by them respectively, or in paying up in full unissued Shares or debentures of the Company of a nominal amount equal to that sum, and allot the Shares or debentures credited as fully paid to those members, or as they may direct, in those proportions, or partly in one way and partly in the other; but the Share premium account, the capital redemption reserve, and any profits which are not available for distribution may, for the purposes of this article, only be applied in paying up unissued Shares to be allotted to members credited as fully paid up;

36.1.3

make such provision by the issue of fractional certificates or by payment in cash or otherwise as they determine in the case of Shares or debentures becoming distributable under this article in fractions; and

36.1.4

authorise any person to enter on behalf of all the members concerned into an agreement with the Company providing for the allotment to them respectively, credited as fully paid, of any Shares or debentures to which they are entitled upon such capitalisation, any agreement made under such authority being binding on all such members.

37

Notices

37.1

Any notice to be given to or by any person pursuant to the articles shall be in writing except that a notice calling a meeting of the directors need not be in writing.

37.2

A member shall be entitled to receive any notice to be given to him pursuant to the articles notwithstanding that his registered address is not in the Island of Jersey or elsewhere in the British Isles. The Company may give notice to a member personally (which shall include a video link communication), by facsimile transmission or by sending it by post, either in a prepaid envelope addressed to the member at his registered address or by leaving it at that address or by electronic mail (or other similar form of computer or electronic communication system in use). Where a notice is given by facsimile transmission or electronic mail (or similar), a copy of the notice must also be sent by post in the manner aforesaid (but this shall not affect the due service of such notice as provided by article 37.5 below). In the case of joint holders of a Share, all notices shall be given to the joint holder whose name stands first in the register of members in respect of the joint holding and notice so given shall be sufficient notice to all the joint holders.

37.3

A member present, either in person or by proxy, at any meeting of the Company or of the holders of any class of Shares in the Company shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called.

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37.4

Every person who becomes entitled to a Share shall be bound by any notice in respect of that Share which, before his name is entered in the register of members, has been duly given to a person from which he derives his title.

37.5

Proof that an envelope containing a notice was properly addressed, prepaid and posted shall be conclusive evidence that the notice was given. A notice given by post shall be deemed to be given at the expiration of 48 hours after the envelope containing it was posted. A notice given by facsimile shall be deemed to have been given on transmission and a written transmission report indicating that the facsimile message has been received in full by the correct number shall be conclusive evidence that the notice was given. A notice given by electronic mail (or similar system) shall be deemed to have been given on a confirmation of receipt of the message being received by the sender on his machine.

37.6

A notice may be given by the Company to persons entitled to a Share in consequence of the death or bankruptcy of a member by sending or delivering it, in any manner authorised by the articles for the giving of notice to a member, addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt or by any like description at the address supplied for that purpose by the persons claiming to be so entitled. Until such an address has been supplied, a notice may be given in any manner in which it might have been given if the death or bankruptcy had not occurred.

38

Winding Up

If the Company is wound up, the Company may, with the sanction of a special resolution and any other sanction required by the Law, divide the whole or any part of the assets of the Company among the members in specie and the liquidator or, where there is no liquidator, the directors may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members, and with the like sanction, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the members as he with the like sanction determines, but no member shall be compelled to accept any assets upon which there is a liability.

39

Indemnity

39.1

In so far as the Law allows, every present or former officer of the Company shall be indemnified out of the assets of the Company against any loss or liability incurred by him by reason of being or having been such an officer, including:

39.1.1

any liabilities incurred in defending any proceedings (whether civil or criminal):

39.1.1.1

in which judgment is given in the person’s favour or the person is acquitted;

39.1.1.2

which are discontinued otherwise than for some benefit conferred by the person or on the person’s behalf or some detriment suffered by the person; or

39.1.1.3

which are settled on terms which include such benefit or detriment and, in the opinion of a majority of the directors of the Company (excluding any director who conferred such benefit or on whose behalf such benefit was conferred or who suffered such detriment), the person was substantially successful on the merits in the person’s resistance to the proceedings;

39.1.2

any liability incurred otherwise than to the Company if the person acted in good faith with a view to the best interests of the Company;

39.1.3

any liability incurred in connection with an application made under article 212 of the Law in which relief is granted to the person by the court; or

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39.1.4

any liability against which the Company normally maintains insurance for persons other than directors.

40

Insurance

40.1

The directors may decide to purchase and maintain insurance, at the expense of the Company, for the benefit of any relevant officer in respect of any relevant loss.

40.2

In this article:

40.2.1

relevant officer means any director or other officer or former director or other officer of the Company or an associated company but excluding any person engaged by the Company or an associated company as auditor (whether or not he is also a director of other officer) to the extent that he acts in his capacity as auditor;

40.2.2

relevant loss means any loss or liability which has been or may be incurred by a relevant officer in connection with that relevant officer's duties or powers in relation to the Company, any associated company or any pension fund or employees' Share scheme of the Company or associated company; and

40.2.3

companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate.

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Annex C

[TO BE PROVIDED BY AMENDMENT ]

C-1

Annex D

LETTERHEAD OF CASSEL SALPETER & CO., LLC

August 9, 2016

Arowana, Inc.

Level 11, 153 Walker Street

North Sydney, NSW 2060

Australia

Attention: The Board of Directors

Members of the Board of Directors:

We understand that Arowana, Inc. (the “Company”) intends to enter into a Contribution Agreement (the “Agreement”) by and among the Company, VivoPower International PLC (“VivoPower”) and Arowana International Limited (“AWN”). We have been advised that pursuant to the Agreement, among other things, (i) the Company will contribute (the “Contribution”) to VivoPower an amount in cash (the “Contribution Amount”) equal to (A) US$56,585,520, less (B) unpaid fees and expenses incurred by the Company in connection with the Agreement and the transactions contemplated thereby that are in excess of the working capital available to the Company outside of, or eligible to be withdrawn from, the Company’s trust fund (the “Transaction Fees and Expenses” and, such trust fund, the “Trust Fund”) and (ii) in exchange for the Contribution Amount, VivoPower will issue to the Company 9,444,950 ordinary shares (the “Contribution Shares”), par value $0.012 per share, of VivoPower (“VivoPower Shares”). We in addition understand that pursuant to the Agreement, (i) to the extent that there are additional funds available in the Trust Fund after taking into account, (A) the Contribution Amount, (B) amounts necessary to pay holders of ordinary shares, par value $0.0001 per share (“Company Shares”), of the Company issued in the Company’s initial public offering exercising their rights to convert such shares into a pro rata portion of the Trust Fund the amounts payable thereto and (C) the Transaction Fees and Expenses (the amount of such additional available funds, the “True-up Amount”), VivoPower will, in exchange for the True-up Amount, issue to the Company a number of VivoPower Shares (the “True-up Shares”) equal to the True-up Amount divided by US$10.20 (the “True-up Sale”), (ii) VivoPower will purchase from AWN a number of VivoPower Shares (the “Make-even Shares”) equal to the True-up Shares in exchange for an amount in cash equal to the True-up Amount (the “Make-even Sale”), which Make-even Shares shall immediately thereafter be canceled, (iii) following the Contribution, the True-up Sale and the Make-even Sale, the Company will distribute (the “Distribution”) the Contribution Shares and the True-up Shares to the holders of Company Shares (including Company Shares issued upon exchange of warrants or other rights) and the holders of warrants to purchase Company Shares, and (iv) the Company will dissolve, wind-up and liquidate (the “Dissolution”). Further, we understand that simultaneously with the consummation of the Contribution, VivoPower will acquire (the “Acquisitions”) VivoPower Pty Limited (“VivoPower Australia”) and Aevitas O Holdings Pty Limited and thereby Aevitas Group Limited (“Aevitas”). The True-up Sale, the Make-even Sale, the Distribution, the Dissolution and the Acquisitions are referred to herein as the “Related Transactions” and, together with the Contribution, as the “Transaction.”

You have requested that Cassel Salpeter & Co., LLC render an opinion (this “Opinion”) to the Board of Directors of the Company (the “Board”) as to whether, as of the date of this Opinion, (i) the Contribution Amount to be paid by the Company in exchange for the Contribution Shares in the Contribution, after giving effect to the Acquisitions, pursuant to the Agreement is fair, from a financial point of view, to the Company and (ii) VivoPower, after giving effect to the Acquisitions, has a fair market value equal to at least 80% of the value of the Company’s Trust Fund.

In arriving at this Opinion, we have made such reviews, analyses, and inquiries as we have deemed necessary and appropriate under the circumstances. Among other things, we have:

●

Reviewed a draft, dated August 7, 2016, of the Agreement.

●

Reviewed certain publicly available financial information and other data with respect to VivoPower that we deemed relevant.

●

Reviewed certain other information and data with respect to VivoPower made available to us by the Company and VivoPower, including (i) unaudited historical financial statements of VivoPower pro-forma for the Acquisitions (the “Pro-Forma Financial Statements”) prepared by management of VivoPower based on draft audited historical financial statements of VivoPower, Aevitas and VivoPower Australia (the “Draft Financial Statements”) and (ii) financial projections with respect to the future financial performance of VivoPower, after giving effect to the Acquisitions, for the fiscal years ending March 31, 2017 through March 31, 2019, prepared by management of VivoPower (the “Projections”) and other internal financial information furnished to us by or on behalf of VivoPower.

D-1

●

Considered the publicly available financial terms of certain transactions that we deemed relevant.

●

Compared the implied enterprise value reference ranges of VivoPower, after giving effect to the Acquisitions, to the balance, as provided by Company management, of the Trust Fund.

●

Discussed the business, operations, and prospects of VivoPower, after giving effect to the Acquisitions, and the proposed Transaction with the Company’s and VivoPower’s management and certain of the Company’s and VivoPower’s representatives.

●

Conducted such other analyses and inquiries, and considered such other information and factors, as we deemed appropriate.

For purposes of our analyses and this Opinion, we have assumed, at your direction, that the amount of the Transaction Fees and Expenses borne by the Company will be US$6,000,000 and, as a result, the Contribution Amount will be US$50,585,520. In addition, for purposes of our analysis and this Opinion we have, with your consent, evaluated whether, as of the date of this Opinion, VivoPower has a fair market value equal to at least 80% of the value of the Company’s Trust Fund solely upon the basis of a comparison of the implied enterprise value reference ranges indicated by our financial analysis with the balance of the funds remaining in the Company’s Trust Fund, which you have advised us and we, for purposes of our analysis and this Opinion, have assumed does not and shall not exceed US$84,456,000.

This Opinion only addresses whether, as of the date hereof, (i) the Contribution Amount to be paid by the Company in exchange for the Contribution Shares in the Contribution, after giving effect to the Acquisitions, pursuant to the Agreement is fair, from a financial point of view, to the Company and (ii) VivoPower, after giving effect to the Acquisitions, has a fair market value equal to at least 80% of the value of the Company’s Trust Fund. It does not address any other terms, aspects, or implications of the Transaction or the Agreement, including, without limitation, (i) except for assuming the consummation thereof immediately prior to, or simultaneously with, the Contribution, the Acquisitions, (ii) any other Related Transaction, (iii) any term or aspect of the Transaction that is not susceptible to financial analyses, (iv) the fairness of the Contribution, or all or any portion of the Contribution Amount, to any security holders of the Company, VivoPower, AWN or any other person or any creditors or other constituencies of the Company, VivoPower, AWN or any other person, nor (v) the fairness of the amount or nature, or any other aspect, of any compensation or consideration payable to or received by any officers, directors, or employees of any parties to the Transaction, or any class of such persons, relative to the Contribution Amount to be paid by the Company in the Contribution pursuant to the Agreement, or otherwise. We are not expressing any opinion as to what the value of the Contribution Shares actually will be when issued to the Company in the Contribution or the prices at which Company Shares or VivoPower Shares may trade, be purchased or sold at any time, and we make no representation or warranty regarding the adequacy of this Opinion or the analyses underlying this Opinion for the purpose of the Company’s compliance with the terms of its organizational documents or any applicable foreign, federal, state or local laws, rules or regulations or for any other general or particular purpose.

This Opinion does not address the relative merits of the Contribution or any Related Transaction as compared to any alternative transaction or business strategy that might exist for the Company, or the merits of the underlying decision by the Board or the Company to engage in or consummate the Contribution or any Related Transaction. The financial and other terms of the Transaction were determined pursuant to negotiations between the parties to the Agreement and were not determined by or pursuant to any recommendation from us.

In arriving at this Opinion, we have, with your consent, relied upon and assumed, without independently verifying, the accuracy and completeness of all of the financial and other information that was supplied or otherwise made available to us or available from public sources, and we have further relied upon the assurances of the Company’s and VivoPower’s management that they were not aware of any facts or circumstances that would make any such information inaccurate or misleading. We also have relied upon, without independent verification, the assessments of the management of the Company and VivoPower as to the Company’s and VivoPower’s existing and future technology, products and services and the validity and marketability of, and risks associated with, such technology, products and services (including, without limitation, the development, testing and marketing of such technology, products and services; the receipt of all necessary governmental and other regulatory approvals for the development, testing and marketing thereof; and the life of all relevant patents and other intellectual and other property rights associated with such technology, products and services), and we have assumed, at your direction, that there will be no developments with respect to any such matters that would adversely affect our analyses or this Opinion. We are not legal, tax, accounting, environmental, or regulatory advisors, and we do not express any views or opinions as to any legal, tax, accounting, environmental, or regulatory matters relating to the Company, VivoPower, AWN, the Transaction, or otherwise. We understand and have assumed that the Company has obtained or will obtain such advice as it deems necessary or appropriate from qualified legal, tax, accounting, environmental, regulatory, and other professionals.

D-2

The Company and VivoPower have advised us that the audit of the Draft Financial Statements is not yet complete and the Draft Financial Statements are therefore in draft form, have not been finalized and remain subject to change. In addition, the Company and VivoPower have advised us that the Pro-Forma Financial Statements and the Projections have been prepared under international financial reporting standards (“IFRS”), except the Projections do not contain any purchase price adjustments as required by IFRS. As you are aware, management of VivoPower has not provided, and we have not assessed, the impact of the preparation of the Projections with purchase price adjustments.

You have also advised us and we have assumed that the Projections were reasonably prepared on a basis reflecting the best currently available estimates and judgments of management of VivoPower with respect to the future financial performance of VivoPower after giving effect to the Acquisitions and that the Projections and the Pro-Forma Financial Statements provide a reasonable basis upon which to analyze and evaluate VivoPower after giving effect to the Acquisitions and form an opinion. We express no view with respect to the Projections, the Pro-Forma Financial Statements or the assumptions on which they are based. Without limiting the generality of the foregoing, you have directed us to rely upon and assume, without independent verification, that had the Draft Financial Statements been finalized and had the Projections been prepared with purchase price adjustments in accordance with IFRS, such draft financial statements and projections would not differ from the Draft Financial Statements and Projections, respectively, in any way material to our financial analyses or this Opinion.

We have not evaluated the solvency or creditworthiness of the Company, VivoPower, AWN, Aevitas, VivoPower Australia or any other party to the Transaction, the fair value of the Company, VivoPower, AWN, Aevitas, VivoPower Australia or any of their respective assets or liabilities, or whether the Company, VivoPower, AWN, Aevitas, VivoPower Australia or any other party to the Transaction is paying or receiving reasonably equivalent value in the Transaction under any applicable foreign, state, or federal laws relating to bankruptcy, insolvency, fraudulent transfer, or similar matters, nor have we evaluated, in any way, the ability of the Company, VivoPower, AWN, Aevitas, VivoPower Australia or any other party to the Transaction to pay its obligations when they come due. We have not physically inspected the Company’s, VivoPower’s, AWN’s, Aevitas’s or VivoPower Australia’s properties or facilities and have not made or obtained any evaluations or appraisals of the Company’s, VivoPower’s, AWN’s, Aevitas’s or VivoPower Australia’s assets or liabilities (including any contingent, derivative, or off-balance-sheet assets and liabilities). We have not attempted to confirm whether the Company, VivoPower, AWN, Aevitas and VivoPower Australia have good title to their respective assets. Our role in reviewing any information was limited solely to performing such reviews as we deemed necessary to support our own advice and analysis and was not on behalf of the Board, the Company, or any other party.

We have assumed, with your consent, that the Transaction will be consummated in a manner that complies in all respects with applicable foreign, federal, state, and local laws, rules, and regulations and that, in the course of obtaining any regulatory or third party consents, approvals, or agreements in connection with the Transaction, no delay, limitation, restriction, or condition will be imposed that would have an adverse effect on the Company, VivoPower, AWN, Aevitas, VivoPower Australia or the Transaction. We also have assumed, with your consent, that the final executed form of the Agreement will not differ in any material respect from the draft we have reviewed and that the Transaction will be consummated on the terms set forth in the Agreement, without waiver, modification, or amendment of any term, condition, or agreement thereof that is material to our analyses or this Opinion. We have also assumed that the representations and warranties of the parties to the Agreement contained therein are true and correct and that each such party will perform all of the covenants and agreements to be performed by it under the Agreement. We offer no opinion as to the contractual terms of the Agreement or the likelihood that the conditions to the consummation of the Transaction set forth in the Agreement will be satisfied.

Our analysis and this Opinion are necessarily based upon market, economic, and other conditions, as they exist on, and could be evaluated as of the date hereof. Accordingly, although subsequent developments may arise that would otherwise affect this Opinion, we do not assume any obligation to update, review, or reaffirm this Opinion to you or any other person or otherwise to comment on or consider events occurring or coming to our attention after the date hereof.

This Opinion is addressed to the Board for the use and benefit of the members of the Board (in their capacities as such) in connection with the Board’s evaluation of the Transaction. This Opinion is not intended to and does not constitute advice or a recommendation to any of the Company’s or any other party’s security holders as to how such holder should vote or act with respect to any matter relating to the Transaction or otherwise. This Opinion should not be construed as creating any fiduciary duty on our part to the Company or any other party to the Agreement, any security holder of the Company or such other party, any creditor of the Company or such other party, or any other person.

D-3

We will receive a fee for rendering this Opinion, no portion of which is contingent upon the completion of the Transaction. In addition, the Company has agreed to reimburse certain of our expenses and to indemnify us and certain related parties for certain liabilities that may arise out of our engagement or the rendering of this Opinion. In accordance with our policies and procedures, a fairness committee was not required to, and did not, approve the issuance of this Opinion.

Based upon and subject to the foregoing, it is our opinion that, as of the date of this Opinion, (i) the Contribution Amount to be paid by the Company in exchange for the Contribution Shares in the Contribution, after giving effect to the Acquisitions, pursuant to the Agreement is fair, from a financial point of view, to the Company and (ii) VivoPower, after giving effect to the Acquisitions, has a fair market value equal to at least 80% of the value of the Company’s Trust Fund.

Very truly yours,

/s/ Cassel Salpeter & Co., LLC

D-4

Annex E

AROWANA, INC.

(the “ Company ”)

RESOLUTIONS OF THE SHAREHOLDERS OF THE COMPANY

1.	Business Combination Proposal

It is resolved THAT the Contribution Proposal (as defined in the Company’s proxy statement dated [●], 2016 for the Extraordinary General Meeting (the “ Proxy Statement ”)), and the transactions (the “ Transactions ”) contemplated by the Contribution Agreement, dated August 11, 2016, by and among the Company, VivoPower International PLC (“ VivoPower ”) and Arowana International Ltd., be approved.

2.	Dissolution Proposal

It is resolved as special resolutions:

(a)

THAT the Company be placed in voluntary winding up conditional upon, and immediately following, the completion of the Transactions, including the Contribution (as defined in the Proxy Statement) and subsequent distribution of the VivoPower shares the Company will receive in such Contribution, as more particularly described in the Proxy Statement;

(b)

THAT [●] of [●] be appointed voluntary liquidator (the " Voluntary Liquidator ") of the Company upon commencement of the Company's voluntary winding up; and

(c)

THAT the Voluntary Liquidator be authorised to divide among the shareholders in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for such purpose set such value as the Voluntary Liquidator deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.

3.	Incentive Plan Proposal

It is resolved THAT the discretionary management incentive plan, in the form attached at Annex B to the Proxy Statement, be approved.

4.	Adjournment Proposal

It is resolved THAT the Extraordinary General Meeting be adjourned to a later date or dates and time or times as shall be announced by the Chairman at the Extraordinary General Meeting, to permit further solicitation and vote of proxies.

E-1

12,177,350 ORDINARY SHARES

VIVOPOWER INTERNATIONAL PLC

DEALER PROSPECTUS DELIVERY OBLIGATION

Until [ ● ], all dealers that effect transactions in these securities, whether or not participating in this

offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a

prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers

The Registrant's amended and restated articles of association provide that, subject to the Companies Act 2006, each of the Registrant's directors and other officers (excluding auditors) may be indemnified by the Registrant against all costs, charges, losses, expenses and liabilities incurred by him in the execution and discharge of his duties or in relation to those duties. The Companies Act 2006 renders void an indemnity for a director against any liability relating to:

●

criminal fines;

●

penalties imposed by regulatory bodies;

●

defence costs of criminal proceedings where the director is found guilty;

●

defence costs of civil proceedings successfully brought against the director by a company or an associated company where judgment is given against him;

●

liabilities in connection with an application for relief under sections 661 (3) or (4) of the Companies Act (power of court to grant relief in case of an application for relief in case of acquisition of shares by innocent nominee) or section 1157 Companies Act 2006 (general power of court to grant relief in case of honest and reasonable conduct) for which he fails to obtain relief; and/ or

●

anything which would indemnify the director in question for his negligence, default, breach of duty or breach of trust in relation to a company of which he is a director or an associated company.

Every person who is or was at any time a director or other officer (excluding an auditor) of the Registrant may be indemnified out of the assets of the Registrant against all costs, charges, expenses, losses or liabilities incurred by him in performing his duties or the exercise of his powers or otherwise in relation to or in connection with his duties, powers or office.

Item 21. Exhibits and Financial Statement Schedules

Exhibit no	Description

2.1	Contribution Agreement (included as Annex A to the proxy statement/prospectus).

3.1	Form of Memorandum and Articles of Association of VivoPower.

4.1	Specimen Ordinary Share Certificate of VivoPower.*

4.2	Loan Agreement, dated February 10, 2016, between VivoPower International Services Limited and Arowana International Limited.

4.3	Loan Agreement, dated March 23, 2016, between VivoPower USA. LLC and Arowana International Limited.

4.4	Articles of Association of VivoPower International Services Limited (included as Annex B to the proxy statement/prospectus).

5.1	Opinion of Herbert Smith Freehills LLP.*

8.1	Tax Opinion of Herbert Smith Freehills LLP.*

10.1	Membership Interest Purchase Agreement, dated as of June 14, 2016, by and between Innovative Solar Systems, LLC and IS-31 Holdings, LLC.

10.2	Financing Agreement, dated July 29, 2016, among Innovative Solar 31, LLC, KeyBank National Association and the Lenders party thereto.

10.3	[Intentionally Omitted]

10.4	Solar Power Engineering, Procurement, and Construction Agreement, dated July 29, 2016 by and between Innovative Solar 31, LLC and Grupo Gransolar, LLC.

II-1

Exhibit no	Description

10.5	[Intentionally Omitted]

10.6	Development Services Agreement, dated July 29, 2016, between Innovative Solar 31, LLC and VivoPower USA LLC.

10.7	Employment Agreement, effective as of September 1, 2016, with Philip B. Comberg.

10.8	Employment Agreement, dated February 3, 2016, with David N. Pilotte.

10.9	Employment Agreement, dated July 13, 2016, with Carl Weatherley-White.

23.1	Consent of Marcum LLP (VivoPower International PLC and Arowana Inc.).

23.2	[Intentionally Omitted]

23.3	Consent of PKF as to (Aevitas Group Limited).

23.4	Consent of PKF as to (VivoPower Pty Ltd.).

23.5	Consent of Herbert Smith Freehills LLP (included in Exhibit 5.1 and 8.1).*

99.1	Consent of Edward Hyams (Director nominee).*

99.2	Consent of Peter Sermol (Director nominee).*

99.3	Consent of Gary Hui (Director nominee).*

____________

* To be filed by amendment.

Item 22. Undertakings

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post effective amendment to this registration statement:

i. To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

ii. To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

iii. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of form 20-F at the start of any delayed offering or throughout a continuous offering.

II-2

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such Director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

The registrant undertakes that every prospectus: (1) that is filed pursuant to the immediately preceding paragraph, or (2) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of London, United Kingdom, on the 24 ^th day of August, 2016.

		VIVOPOWER INTERNATIONAL PLC


	By:	/s/ Philip Comberg
		Philip Comberg
		Chief Executive Officer (Principal Executive Officer)

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Philip Comberg, David Pilotte and Kevin Chin as his true and lawful attorney-in-fact, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments including post-effective amendments to this proxy statement/prospectus and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute, each acting alone, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Name	Title	Date
/s/ Philip Comberg Philip Comberg	Chief Executive Officer (Principal Executive Officer) and Director	August 24, 2016

/s/ David Pilotte David Pilotte	Chief Financial Officer (Principal financial and accounting officer)	August 24, 2016

/s/ Kevin Chin Kevin Chin	Director	August 24, 2016

/s/ Declan Kenny Declan Kenny	Director	August 24, 2016

/s/ Philip Broomhead Philip Broomhead	Director	August 24, 2016

Authorized Representative in the United States

Law Debenture Corporate Services Inc.

By: /s/ Giselle Manon

Name: Giselle Manon

Title: Service of Process Officer

Date: August 24, 2016

Exhibit 3.1

No. 09978410

VIVOPOWER INTERNATIONAL PLC

Incorporated on 1 February 2016

ARTICLES OF ASSOCIATION

(Adopted with effect from [ • ] 2016 by Special Resolution passed on [ • ] 2016 )

INDEX

Headings	Page
PRELIMINARY	1
SHARE CAPITAL	3
VARIATION OF RIGHTS	4
SHARE CERTIFICATES	4
LIEN	5
CALLS ON SHARES AND FORFEITURE	6
TRANSFER OF SHARES	8
TRANSMISSION OF SHARES	9
DISCLOSURE OF INTERESTS	10
UNTRACED MEMBERS	12
ALTERATION OF CAPITAL	13
NOTICE OF GENERAL MEETINGS	14
PROCEEDINGS AT GENERAL MEETINGS	14
AMENDMENTS TO RESOLUTIONS	17
POLLS	17
VOTES OF MEMBERS	18
PROXIES AND CORPORATE REPRESENTATIVES	20
APPOINTMENT AND RETIREMENT OF DIRECTORS	22
DISQUALIFICATION OF DIRECTORS	23
ALTERNATE DIRECTORS	23
POWERS OF DIRECTORS	24
DIRECTORS' REMUNERATION, GRATUITIES AND BENEFITS	25
DIRECTORS' APPOINTMENTS AND INTERESTS	26
PROCEEDINGS OF DIRECTORS	28
DIVIDENDS	30
CAPITALISATION OF PROFITS	35
RECORD DATES FOR PAYMENTS and issue	36
NOTICES AND OTHER COMMUNICATIONS	36
ADMINISTRATION	40
WINDING UP	41
INDEMNITY	41
Depositary interests other than dtc	42

ARTICLES OF ASSOCIATION

VIVOPOWER INTERNATIONAL PLC

(adopted with effect from [ •] 2016 by special resolution passed
on [ •] 2016)

PRELIMINARY

Definitions

1.
(1)
In these articles the following words bear the following meanings:

"Acts" means the Companies Acts (as defined in section 2 of the Companies Act 2006), in so far as they apply to the Company;

"articles" means the articles of association of the Company;

"board" or "board of directors" means the directors or any of them duly acting as the board of the Company;

"clear days" means in relation to the period of a notice, that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect;

" Depositary " means any depositary, clearing agency, custodian, nominee or similar entity appointed under arrangements entered into by the Company or otherwise approved by the board that holds, or is interested directly or indirectly, including through a nominee, in, shares, or rights or interests in respect thereof, and which issues certificates, instruments, securities or other documents of title, or maintains accounts, evidencing or recording the entitlement of the holders thereof, or account holders, to or to receive such shares, rights or interests;

" Depositary Interest " means any certificate, instrument, security, depositary receipt, or other document of title issued or created, or interest recorded in an account maintained, by a Depositary to evidence or record the entitlement of the holder, or account holder, to or to receive shares, or rights or interests in respect thereof;

"Depositary Interest Holder" means the holder of a Depositary Interest;

" director " means a director of the Company;

"DTC" means The Depository Trust Company and any Affiliate or nominee therefore, including Cede & Co., and any successors thereto;

"electronic address" means any number or address used for the purposes of sending or receiving notices, documents or information by electronic means;

"electronic form" has the same meaning as in the Acts;

"electronic means" has the same meaning as in the Acts;

"executed" means any mode of execution;

"holder" means in relation to shares, the member whose name is entered in the register of members as the holder of the shares;

"member" means an ordinary shareholder in the Company;

"Office" means the registered office of the Company;

"Operator" means the Operator of a relevant system (as defined in the Uncertificated Securities Regulations) or the transfer agent of the Company (as applicable);

"participating security" means a share or other security title to units of which is permitted to be transferred by means of a relevant system;

"relevant system" means any computer-based system, and procedures, permitted by the Uncertified Securities Regulations or other applicable regulations, which enable title to shares or other securities to be evidenced and transferred without a written instrument and which facilitate supplementary and incidental matters;

"seal" means the common seal (if any) of the Company and an official seal (if any) kept by the Company by virtue of section 50 of the Companies Act 2006, or either of them as the case may require;

"secretary" means the secretary of the Company or any other person appointed to perform the duties of the secretary of the Company, including a joint, assistant or deputy secretary;; and

"share" means ordinary shares in the Company;

"Uncertificated Securities Regulations" means the Uncertificated Securities Regulations 2001 (as amended).

(2)

In these articles, references to a share being in uncertificated form are references to that share being an uncertificated unit of a security and references to a share being in certificated form are references to that share being a certificated unit of a security.

(3)

Save as aforesaid and unless the context otherwise requires, words or expressions contained in these articles have the same meaning as in the Companies Act 2006 or the Uncertificated Securities Regulations (as the case may be).

(4)

Except where otherwise expressly stated, a reference in these articles to any primary or delegated legislation or legislative provision includes a reference to any modification or re-enactment of it for the time being in force.

(5)

In these articles, unless the context otherwise requires:

(a)

words in the singular include the plural, and vice versa;

(b)

words importing any gender include all genders; and

(c)

a reference to a person includes a reference to a body corporate and to an unincorporated body of persons.

(6)

In these articles:

(a)

references to writing include references to typewriting, printing, lithography, photography and any other modes of representing or reproducing words in a legible and non-transitory form, whether sent or supplied in electronic form or made available on a website or otherwise;

(b)

the words and phrases "other", "otherwise", "including" and "in particular" shall not limit the generality of any preceding words or be construed as being limited to the same class as the preceding words where a wider construction is possible; and

(c)

references to a power are to a power of any kind, whether administrative, discretionary or otherwise.

(7)

The headings are inserted for convenience only and do not affect the construction of these articles.

Exclusion of other regulations

2.	No regulations or model articles contained in any statute or subordinate legislation including without prejudice to such generality, the regulations contained in the Companies (Model Articles) Regulations 2008 shall apply as the articles of the Company.

SHARE CAPITAL

Liability of members

3.	The liability of the members is limited to the amount, if any, unpaid on the shares held by them.

Further issues and rights attaching to shares on issue

4.	(1)	Without prejudice to any rights attached to any existing shares, any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine or, if the Company has not so determined, as the directors may determine.

	(2)	In the event that rights and restrictions attaching to shares are determined by ordinary resolution or by the directors pursuant to this article, those rights and restrictions shall apply, in particular in place of any rights or restrictions that would otherwise apply by virtue of the Companies Act 2006 in the absence of any provisions in the articles of a company, as if those rights and restrictions were set out in the articles.

Redeemable shares

5.	(1)	Any share may be issued which is or is to be liable to be redeemed at the option of the Company or the holder, and the directors may determine the terms, conditions and manner of redemption of any such share.

	(2)	In the event that rights and restrictions attaching to shares are determined by the directors pursuant to this article, those rights and restrictions shall apply, in particular in place of any rights or restrictions that would otherwise apply by virtue of the Companies Act 2006 in the absence of any provisions in the articles of a company, as if those rights and restrictions were set out in the articles.

Payment of commissions

The Company may exercise the powers of paying commissions conferred by the Acts. Any such commission may be satisfied by the payment of cash or by the allotment of fully or partly paid shares, or partly in one way and partly in the other and may be in respect of a conditional or an absolute subscription.

Trusts not recognised

Except as required by law, no person shall be recognised by the Company as holding any share upon any trust. Except as otherwise provided by these articles or by law, the Company shall not be bound by or recognise (even if having notice of it) any equitable, contingent, future, partial or other claim or any interest in any share other than the holder's absolute ownership of it and all the rights attaching to it.

Uncertificated shares

8.	Without prejudice to any powers which the Company or the directors may have to issue, allot, dispose of, convert, or otherwise deal with or make arrangements in relation to shares and other securities in any form:

(a)

the holding of shares in uncertificated form and the transfer of title to such shares by means of a relevant system shall be permitted; and

(b)

the Company may issue shares in uncertificated form and may convert shares from certificated form to uncertificated form and vice versa.

If and to the extent that any provision of these articles is inconsistent with such holding or transfer as is referred to in paragraph (a) of this article or with any provision of the Uncertificated Securities Regulations or other applicable regulations, it shall not apply to any share in uncertificated form.

Separate holdings of shares in certificated and uncertificated form

Notwithstanding anything else contained in these articles, where any class of shares is, for the time being, a participating security, unless the directors otherwise determine, shares of any such class held by the same holder or joint holder in certificated form and uncertificated form shall be treated as separate holdings.

VARIATION OF RIGHTS

Variation of rights

10.	If at any time the capital of the Company is divided into different classes of shares, the rights attached to any class may be varied, either while the Company is a going concern or during or in contemplation of a winding up:

(a)

in such manner (if any) as may be provided by those rights; or

(b)

in the absence of any such provision, with the consent in writing of the holders of three-quarters in nominal value of the issued shares of that class (excluding any shares of that class held as treasury shares), or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class,

but not otherwise. To every such separate meeting the provisions of these articles relating to general meetings shall apply, except that the necessary quorum shall be (i) at any such meeting other than an adjourned meeting, two persons together holding or representing by proxy at least one-third in nominal value of the issued shares of the class in question (excluding any shares of that class held as treasury shares); and (ii) at an adjourned meeting, one person holding shares of the class in question (other than treasury shares) or his proxy.

Rights deemed not varied

11.	Unless otherwise expressly provided by the rights attached to any class of shares, those rights shall be deemed not to be varied by the purchase by the Company of any of its own shares or the holding of such shares as treasury shares.

SHARE CERTIFICATES

Rights to share certificates

12.

(1)

On becoming the holder of any share other than a share in uncertificated form, every person (other than a financial institution in respect of whom the Company is not required by law to complete and have ready a certificate) shall be entitled, without payment, to have issued to him within two months after allotment or lodgement of a transfer (unless the terms of issue of the shares provide otherwise) one certificate for all the shares of each class registered in his name or, upon payment for every certificate after the first of such reasonable sum as the directors may determine, several certificates each for one or more of his shares.

(2)

Every certificate shall be issued under the seal or under such other form of authentication as the directors may determine (which may include manual or facsimile signatures by one or more directors), and shall specify the number, class and distinguishing numbers (if any) of the shares to which it relates and the amount or respective amounts paid up on them.

(3)

Where a member (other than a financial institution) has transferred part only of the shares comprised in a certificate, the member is entitled, without payment, to have issued to him a certificate in respect of the balance of shares held by him or, upon payment for every certificate after the first of such reasonable sum as the directors may determine, several certificates each for one or more of his shares.

(4)

When a member's (other than a financial institution's) holding of shares of a particular class increases, the Company may issue that member with a single, consolidated certificate in respect of all the shares of a particular class which that member holds or a separate certificate in respect of only those shares by which that member's holding has increased.

(5)

A member (other than a financial institution) may request the Company, in writing, to replace the member's separate certificates with a consolidated certificate or the member's consolidated certificate with two or more separate certificates representing such proportion of the shares as the member may specify, provided that any certificate(s) which it is (or they are) to replace has first been returned to the Company for cancellation. When the Company complies with such a request it may charge such reasonable sum as the directors may determine for doing so.

(6)

The Company shall not be bound to issue more than one certificate for shares held jointly by several persons and delivery of a certificate to whichever of the joint holders' names appears first on the register of members in respect of the joint holding shall be a sufficient delivery to all of them.

(7)

If a certificate issued in respect of a member's shares is damaged or defaced or said to be lost, stolen or destroyed, then that member is entitled to be issued with a replacement certificate in respect of the same shares. A member exercising the right to be issued with such a replacement certificate:

(a)

must return the certificate which is to be replaced to the Company if it is damaged or defaced; and

(b)

must comply with such conditions as to evidence, indemnity and the payment of a reasonable fee as the directors may determine.

LIEN

Company's lien on shares not fully paid

13.

The Company has a lien over every share which is partly paid for all amounts (whether presently payable or not) payable at a fixed time or called in respect of that share. The directors may declare any share to be wholly or in part exempt from the provisions of this article. The Company's lien over a share takes priority over any third party's interest in that share, and extends to any dividend or other money payable by the Company in respect of that share (and, if the lien is enforced and the share is sold by the Company, the proceeds of sale of that share).

Enforcing lien by sale

14.

The Company may sell, in such manner as the directors determine, any share on which the Company has a lien if an amount in respect of which the lien exists is presently payable and is not paid within 14 clear days after notice has been given to the holder of the share, or the person entitled to it in consequence of the death or bankruptcy of the holder or otherwise by operation of law, demanding payment and stating that if the notice is not complied with the shares may be sold.

Giving effect to a sale

15.	To give effect to the sale:

(a)

in the case of a share in certificated form, the directors may authorise any person to execute an instrument of transfer of the share to the purchaser or a person nominated by the purchaser;

(b)

in the case of a share in uncertificated form, the directors may:

(i)

to enable the Company to deal with the share in accordance with the provisions of this article, require or procure any relevant person or the Operator (as applicable) to convert the share into certificated form; and

(ii)

after such conversion, authorise any person to execute an instrument of transfer and take such other steps (including the giving of directions to or on behalf of the holder, who shall be bound by them) as they think fit to effect the transfer.

The title of the transferee to the share shall not be affected by any irregularity in or invalidity of the proceedings in reference to the sale.

Application of proceeds of sale

16.

The net proceeds of the sale, after payment of the costs, shall be applied in payment of so much of the amount for which the lien exists as is presently payable. Any residue shall (upon surrender to the Company for cancellation of the certificate for the share sold, in the case of a share in certificated form, and subject to a like lien for any amount not presently payable as existed upon the share before the sale) be paid to the person entitled to the share at the date of the sale.

CALLS ON SHARES AND FORFEITURE

Calls

17.

Subject to the terms of allotment, the directors may make calls upon the members in respect of any amounts unpaid on their shares (whether in respect of nominal value or premium) and each member shall (subject to receiving at least 14 clear days' notice specifying when and where payment is to be made) pay to the Company as required by the notice the amount called on his shares. A call may be required to be paid by instalments. A call may, before receipt by the Company of an amount due under it, be revoked in whole or in part and payment of a call may be postponed in whole or part. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the shares in respect of which the call was made.

18.	A call shall be deemed to have been made at the time when the resolution of the directors authorising the call was passed.

Joint and several liability in respect of calls

19.	The joint holders of a share shall be jointly and severally liable to pay all calls in respect of it.

Interest

20.

If a call or an instalment of a call remains unpaid after it has become due and payable the person from whom it is due shall pay interest on the amount unpaid, from the day it became due and payable until it is paid at the rate fixed by the terms of allotment of the shares in question or fixed in the notice of the call or, if no rate is fixed, at the appropriate rate (as defined in the Acts). The directors may, however, waive payment of the interest wholly or in part.

Sums treated as calls

21.	An amount payable in respect of a share on allotment or at any fixed date, whether in respect of nominal value or premium or as an instalment of a call, shall be deemed to be a call and if it is not paid these articles shall apply as if that sum had become due and payable by virtue of a call.

Power to differentiate

22.	Subject to the terms of allotment, the directors may differentiate between the holders in the amounts and times of payment of calls on their shares.

Payment of calls in advance

23.

The directors may receive from any member willing to advance it all or any part of the amount unpaid on the shares held by him (beyond the sums actually called up) as a payment in advance of calls, and such payment shall, to the extent of it, extinguish the liability on the shares in respect of which it is advanced. The Company may pay interest on the amount so received, or so much of it as exceeds the sums called up on the shares in respect of which it has been received, at such rate (if any) as the member and the directors agree.

Notice if call not paid and forfeiture

24.

If a call or an instalment of a call remains unpaid after it has become due and payable the directors may give to the person from whom it is due not less than 14 clear days' notice requiring payment of the amount unpaid together with any interest which may have accrued. The notice shall name the place where payment is to be made and shall state that if the notice is not complied with the shares in respect of which the call was made will be liable to be forfeited. If the notice is not complied with, any shares in respect of which it was given may, before the payment required by the notice has been made, be forfeited by a resolution of the directors and the forfeiture shall include all dividends and other amounts payable in respect of the forfeited shares and not paid before the forfeiture.

Sale of forfeited shares

25.

A forfeited share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the directors determine either to the person who was before the forfeiture the holder (including a person who was entitled to the share in consequence of the death or bankruptcy of the holder or otherwise by operation of law) or to any other person and, at any time before the disposition, the forfeiture may be cancelled on such terms as the directors determine. Where for the purposes of its disposal a forfeited share is to be transferred to any person:

(a)

in the case of a share in certificated form, the directors may authorise any person to execute an instrument of transfer and take such other steps (including the giving of directions to or on behalf of the holder, who shall be bound by them) as they think fit to effect the transfer; and

(b)

in the case of a share in uncertificated form, the directors may:

(i)

(ii)

Cessation of membership and continuing liability

26.

A person whose shares have been forfeited shall cease to be a member in respect of the shares forfeited and shall surrender to the Company for cancellation any certificate for the shares forfeited. However, such person shall remain liable to the Company for all amounts which at the date of forfeiture were presently payable by him to the Company in respect of those shares with interest at the rate at which interest was payable on those amounts before the forfeiture or, if no interest was so payable, at the appropriate rate (as defined in the Acts) from the date of forfeiture until payment. The directors may waive payment wholly or in part or enforce payment without any allowance for the value of the shares at the time of forfeiture or for any consideration received on their disposal.

Statutory declaration as to forfeiture

27.

A statutory declaration by a director or the secretary that a share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the share and the declaration shall (subject to the execution of an instrument of transfer if necessary, in the case of a share in certificated form) constitute good title to the share and the person to whom the share is disposed of shall not be bound to see to the application of the consideration, if any, nor shall his title to the share be affected by any irregularity in or invalidity of the proceedings relating to the forfeiture or disposal of the share.

TRANSFER OF SHARES

Transfer of shares in certificated form

28.	The instrument of transfer of a share in certificated form may be in any usual form or in any other form which the directors approve and shall be executed by or on behalf of the transferor and, where the share is not fully paid, by or on behalf of the transferee.

Transfer of shares in uncertificated form

29.

Where any class of shares is, for the time being, a participating security, title to shares of that class which are recorded on an Operator register of members as being held in uncertificated form may be transferred by means of the relevant system concerned. The transfer may not be in favour of more than four transferees.

Refusal to register transfers

30.

(1)

(a)

is lodged, duly stamped, at the Office or at such other place as the directors may appoint and (except in the case of a transfer by a financial institution where a certificate has not been issued in respect of the share) is accompanied by the certificate for the share to which it relates and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer;

(b)

is in respect of only one class of share; and

(c)

is in favour of not more than four transferees.

(2)

The directors may refuse to register a transfer of a share in uncertificated form to a person who is to hold it thereafter in certificated form in any case where the Company is entitled to refuse (or is excepted from the requirement) under the Uncertificated Securities Regulations or other applicable regulations to register the transfer.

Notice of and reasons for refusal

31.

If the directors refuse to register a transfer of a share, they shall as soon as practicable and in any event within two months after the date on which the transfer was lodged with the Company (in the case of a transfer of a share in certificated form) or the date on which the transfer instructions were received by the Company or the Operator (in the case of a transfer of a share in uncertificated form to a person who is to hold it thereafter in certificated form) send to the transferee notice of the refusal together with reasons for the refusal. The directors shall send such further information about the reasons for the refusal to the transferee as the transferee may reasonably request.

No fee for registration

32.	No fee shall be charged for the registration of any instrument of transfer or other document or instruction relating to or affecting the title to any share.

Retention or return of instrument of transfer

33.	The Company shall be entitled to retain any instrument of transfer which is registered, but any instrument of transfer which the directors refuse to register shall (except in the case of fraud) be returned to the person lodging it when notice of the refusal is given.

Recognition of renunciation

34.	Nothing in these articles shall preclude the directors from recognising a renunciation of the allotment of any share by the allottee in favour of some other person.

TRANSMISSION OF SHARES

Transmission on death

35.

If a member dies the survivor or survivors where he was a joint holder, or his personal representatives where he was a sole holder or the only survivor of joint holders, shall be the only persons recognised by the Company as having any title to his interest. However, nothing in this article shall release the estate of a deceased member from any liability in respect of any share which had been solely or jointly held by him.

Election of person entitled by transmission

36.

A person becoming entitled to a share in consequence of the death or bankruptcy of a member or otherwise by operation of law may, upon such evidence being produced as the directors may properly require to show his title to the share, elect either to become the holder of the share or to have some person nominated by him registered as the transferee. If he elects to become the holder he shall give notice to the Company to that effect. If he elects to have another person registered he shall transfer title to the share to that person. All the provisions of these articles relating to the transfer of shares shall apply to the notice or instrument of transfer (if any) as if it were an instrument of transfer signed by the member and the death or bankruptcy of the member or other event giving rise to the entitlement to the share by operation of law had not occurred.

Rights of person entitled by transmission

37.

A person becoming entitled to a share by reason of the death or bankruptcy of a member or otherwise by operation of law shall, after giving notice to the Company of his entitlement to the share and upon such evidence being produced as the directors may properly require to show his title to the share, have the rights to which he would be entitled if he were the holder of the share, except that he shall not, before being registered as the holder of the share, be entitled in respect of it to attend or vote at any general meeting or at any separate meeting of the holders of any class of shares. A person entitled to a share who has elected for that share to be transferred to some other person pursuant to article 36 shall cease to be entitled to any rights in relation to such share upon that other person being registered as the holder of that share.

DISCLOSURE OF INTERESTS

Disclosure of interests

38.

(1)

If a member, or any other person appearing to be interested in shares held by that member, has been given a notice under section 793 of the Companies Act 2006 and has failed in relation to any shares (the "default shares") to give the Company the information thereby required within 14 days from the date of giving the notice, the following sanctions shall apply, unless the directors otherwise determine in their absolute discretion, in relation to the default shares, including following any transfer of the default shares unless the transfer is an excepted transfer under this article:

(a)

the member shall not be entitled in respect of the default shares to be present or to vote (either in person or by representative or proxy) at any general meeting or at any separate meeting of the holders of any class of shares or on any poll; and

(b)

where the default shares represent at least 0.25 per cent of their class (calculated exclusive of treasury shares):

(i)

any dividend payable in respect of the default shares shall be withheld by the Company, which shall not have any obligation to pay interest on it, and the member shall not be entitled to elect, pursuant to these articles, to receive shares instead of that dividend;

(ii)

no transfer, other than an excepted transfer, of any default shares held by the member in certificated form shall be registered unless:

(A)

the member is not himself in default as regards supplying the information required; and

(B)

the member proves to the satisfaction of the directors that no person in default as regards supplying such information is interested in any of the shares the subject of the transfer; and

(iii)

for the purposes of sub paragraph (1)(b)(ii) of this article, in the case of a member holding default shares in uncertificated form or in the case of any other person who is interested in default shares which are represented by Depositary Interests, the directors may require the beneficial owner of such default shares:

(A)

to change his holding of such default shares from uncertificated form into certificated form in the name of the member or his holding of such default shares represented by Depositary Interests into certificated shares only in the name of the person who is interested in the Depositary Interests, as applicable, within a specified period; and

(B)

then to hold such default shares in certificated form for so long as the default subsists; and

(C)

to appoint any person to take any steps, by instruction by means of a relevant system or otherwise, in the name of the beneficial holder of default shares as may be required to change such default shares from uncertificated form into certificated form or where a person has an interests in default shares which are represented by Depositary Interests to change such default shares represented by Depositary Interests into certificated form only in the name of the interested person (and such steps shall be effective as if they had been taken by such holder).

(2)

Where the sanctions under paragraph (1) of this article apply in relation to any default shares, they shall cease to have effect at the end of the period of seven days (or such shorter period as the directors may determine) following the earlier of:

(a)

receipt by the Company of the information required by the notice mentioned in that paragraph; and

(b)

receipt by the Company of notice that the default shares have been transferred by means of an excepted transfer.

The directors may suspend or cancel any of the sanctions at any time in relation to any default shares.

(3)

Any new shares in the Company issued in right of default shares shall be subject to the same sanctions as apply to the default shares, and the directors may make any right to an allotment of the new shares subject to sanctions corresponding to those which will apply to those shares on issue, provided that:

(a)

any sanctions applying to, or to a right to, new shares by virtue of this paragraph shall cease to have effect when the sanctions applying to the related default shares cease to have effect (and shall be suspended or cancelled if and to the extent that the sanctions applying to the related default shares are suspended or cancelled); and

(b)

paragraph (1) of this article shall apply to the exclusion of this paragraph (3) if the Company gives a separate notice under section 793 of the Companies Act 2006 in relation to the new shares.

(4)

Where, on the basis of information obtained from a member in respect of any share held by him, the Company gives a notice under section 793 of the Companies Act 2006 (a "Section 793 Notice" ) to any other person, it shall at the same time send a copy of the notice to the member. The accidental omission to do so, or the non-receipt by the member of the copy, shall, however, not invalidate or otherwise affect the application of this article.

(5)

Where a Depositary Interest Holder receives a Section 793 Notice, that person is not considered for the purposes of this article to have an interest, or to be a person appearing to have an interest, in any shares held by the Depositary or in which the Depositary is otherwise interested other than those shares specified in the Section 793 Notice.

(6)

Where the member on whom a Section 793 Notice has been served is a Depositary acting in its capacity as such, the obligations of the Depositary shall be limited to disclosing to the Company such information requested in the Section 793 Notice relating to any person appearing to be interested in the shares held by it and specified in the Section 793 Notice as has been recorded by the Depositary in accordance with the arrangements entered into by the Company or approved by the board pursuant to which it was appointed as a Depositary.

(7)

For the purposes of this article:

(a)

a person, other than the member holding a share, shall be treated as appearing to be interested in that share if the member has informed the Company that the person is, or may be, so interested, or if the Company (after taking account of any information obtained from the member or, pursuant to a Section 793 Notice, from anyone else) knows or has reasonable cause to believe that the person is, or may be, so interested;

(b)

"interested" shall be construed in the same way as it is for the purpose of section 793 of the Companies Act 2006;

(c)

reference to a person having failed to give the Company the information required by a notice, includes (i) reference to his having failed or refused to give all or any part of it; (ii) reference to his having given any information which he knows to be false in a material particular or having recklessly given information which is false in a material particular; and (iii) reference to the Company knowing or having reasonable cause to believe that any of the information provided is false or materially incorrect or incomplete; and

(d)

an "excepted transfer" means, in relation to any shares held by a member:

(i)

a transfer pursuant to acceptance of a takeover offer (within the meaning of section 974 of the Companies Act 2006) in respect of shares in the Company;

(ii)

a transfer in consequence of a sale made through any stock exchange on which the Company's shares are normally traded; or

(iii)

a transfer which is shown to the satisfaction of the directors to be made in consequence of a sale of the whole of the beneficial interest in the shares to a person who is unconnected with the member and with any other person appearing to be interested in the shares.

(6)

Nothing in this article shall limit the powers of the Company under section 794 of the Companies Act 2006 or any other powers of the Company whatsoever.

UNTRACED MEMBERS

Untraced members

39.

(1)

The Company shall be entitled to sell at the best price reasonably obtainable any share held by a member, or any share to which a person is entitled by transmission (including in consequence of the death or bankruptcy of the member or otherwise by operation of law), if:

(a)

for a period of 12 years no cheque or warrant or other method of payment for amounts payable in respect of the share sent and payable in a manner authorised by these articles has been cashed or effected and no communication has been received by the Company from the member or person concerned;

(b)

during that period the Company has paid at least three dividends (whether interim or final) and no such dividend has been claimed by the member or person concerned;

(c)

the Company has, after the expiration of that period, sent a notice to the registered address or last known address of the member or person concerned of its intention to sell such share and before sending such a notice to the member or other person concerned, the Company must have used reasonable efforts to trace the member or other person entitled, engaging, if considered appropriate, a professional asset reunification company or other tracing agent; and

(d)

the Company has not during the further period of three months following the sending of the notice referred to in sub-paragraph (c) above and prior to the sale of the share received any communication from the member or person concerned.

(2)

The Company shall also be entitled to sell at the best price reasonably obtainable any additional share issued during the said period of 12 years in right of any share to which paragraph (1) of this article applies (or in right of any share so issued), if the criteria in sub-paragraphs (a), (c) and (d) of that paragraph are satisfied in relation to the additional share (but as if the words "for a period of 12 years" were omitted from sub-paragraph (a) and the words ", after the expiration of that period," were omitted from sub-paragraph (c)).

(3)

To give effect to the sale of any share pursuant to this article:

(a)

in the case of a share in certificated form, the directors may authorise any person to execute an instrument of transfer of the share to the purchaser or a person nominated by the purchaser and take such other steps (including the giving of directions to or on behalf of the holder, who shall be bound by them) as it thinks fit to effect the transfer; and

(b)

in the case of a share in uncertificated form, the directors may:

(i)

(ii)

after any such conversion, authorise any person to execute an instrument of transfer of the shares to the purchaser or person nominated by the purchaser and take such other steps (including the giving of directions to or on behalf of the holder, who shall be bound by them) as it thinks fit to effect the transfer.

(4)

The purchaser shall not be bound to see to the application of the proceeds of sale, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings relating to the sale. Unless otherwise determined by the directors the net proceeds of sale shall be forfeited and such former member or other person previously entitled to the share shall no longer be a creditor for the proceeds of sale and the Company will not be obliged to account to such persons for, or be liable to such persons in relation to, the proceeds of sale.

ALTERATION OF CAPITAL

Consolidation and sub-division

40.

(1)

The Company may by ordinary resolution:

(a)

consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; and

(b)

sub-divide its shares, or any of them, into shares of a smaller amount than its existing shares; and determine that, as between the shares resulting from the sub-division, any of them may have any preference or advantage as compared with the others.

(2)

Where any difficulty arises in regard to any consolidation or division, the directors may settle such difficulty as they see fit. In particular, without limitation, the directors may sell to any person (including the Company) the shares representing the fractions for the best price reasonably obtainable and distribute the net proceeds of sale in due proportion among those members or retain such net proceeds for the benefit of the Company and:

(a)

in the case of shares in certificated form, the directors may authorise any person to execute an instrument of transfer of the shares to the purchaser or a person nominated by the purchaser and take such other steps (including the giving of directions to or on behalf of the holder, who shall be bound by them) as they think fit to effect such transfer; and

(b)

in the case of shares in uncertificated form, the directors may:

(i)

(ii)

after such conversion, authorise any person to execute an instrument of transfer of the shares to the purchaser or a person nominated by the purchaser and take such other steps (including the giving of directions to or on behalf of the holder, who shall be bound by them) as they think fit to effect the transfer.

(3)

The transferee shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale.

NOTICE OF GENERAL MEETINGS

Calling general meetings

41.	A majority of directors, the chairman of the board of directors or the chief executive officer of the Company may call a general meeting. If there are no directors then serving on the board of directors, any member of the Company may call a general meeting.

Notice of annual general meetings and other general meetings

42.

An annual general meeting and all other general meetings of the Company shall be called by at least such minimum period of notice as is prescribed or permitted under the Acts. The notice shall specify the place, the date and the time of meeting and the general nature of the business to be transacted, and in the case of an annual general meeting shall specify the meeting as such. Where the Company has given an electronic address in any notice of meeting, any document or information relating to proceedings at the meeting may be sent by electronic means to that address, subject to any conditions or limitations specified in the relevant notice of meeting. Subject to the provisions of these articles and to any rights or restrictions attached to any shares, notices shall be given to all members, to all persons entitled to a share in consequence of the death or bankruptcy of a member or otherwise by operation of law and to the directors and auditors of the Company.

Omission or failure to give notice and non-receipt of notice

43.	The accidental omission to give notice of a meeting to, or the failure to give notice due to circumstances beyond the Company's control to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.

Special Gen eral Meetings

44.

The board of directors may postpone or reschedule any previously scheduled special general meeting of members. Only those matters set forth in the notice of the special general meeting may be considered or acted upon at a special general meeting of members of the Company. Nominations of persons for election to the board of directors of the Company and member proposals of other business shall not be brought before a special general meeting of members to be considered by the members .

PROCEEDINGS AT GENERAL MEETINGS

Quorum

45.

No business shall be transacted at any meeting unless a quorum is present. Two persons entitled to vote upon the business to be transacted, each being a member or a proxy for a member or a duly authorised representative of a corporation which is a member (including for this purpose two persons who are proxies or corporate representatives of the same member), shall be a quorum.

Procedure if quorum not present

46.	If a quorum is not present within half an hour after the time appointed for holding the meeting, or if during a meeting a quorum ceases to be present, the meeting shall stand adjourned in accordance with article 54(1).

Chairing general meetings

47.

The chairman (if any) of the board of directors, or in his absence the deputy chairman, or in the absence of both of them some other director nominated prior to the meeting by the directors, shall preside as chairman of the meeting. If neither the chairman nor the deputy chairman nor such other director (if any) is present within 15 minutes after the time appointed for holding the meeting and willing to act, the directors present shall elect one of their number present and willing to act to be chairman of the meeting, and if there is only one director present he shall be chairman of the meeting.

48.	If no director is present within 15 minutes after the time appointed for holding the meeting, the members present and entitled to vote shall choose one of their number to be chairman of the meeting.

Security arrangements and orderly conduct

49.

The directors or the chairman of the meeting may direct that any person wishing to attend any general meeting should submit to and comply with such searches or other security arrangements (including without limitation, requiring evidence of identity to be produced before entering the meeting and placing restrictions on the items of personal property which may be taken into the meeting) as they or he consider appropriate in the circumstances. The directors or the chairman of the meeting may in their or his absolute discretion refuse entry to, or eject from, any general meeting any person who refuses to submit to a search or otherwise comply with such security arrangements.

50.

The directors or the chairman of the meeting may take such action, give such direction or put in place such arrangements as they or he consider appropriate to secure the safety of the people attending the meeting and to promote the orderly conduct of the business of the meeting. Any decision of the chairman of the meeting on matters of procedure or matters arising incidentally from the business of the meeting, and any determination by the chairman of the meeting as to whether a matter is of such a nature, shall be final.

Directors entitled to attend and speak

51.

Directors may attend and speak at general meetings and at any separate meeting of the holders of any class of shares, whether or not they are members. The directors or the chairman of the meeting may permit other persons who are not members of the Company or otherwise entitled to exercise the rights of members in relation to general meetings to attend and, at the chairman of the meeting's absolute discretion, speak at a general meeting or at any separate class meeting.

Attendance and participation at different places and by electronic means

52.

In the case of any general meeting, the directors may, notwithstanding the specification in the notice convening the general meeting of the place at which the chairman of the meeting shall preside (the "Principal Place" ), make arrangements for simultaneous attendance and participation by electronic means allowing persons not present together at the same place to attend, speak and vote at the meeting (including the use of satellite meeting places). The arrangements for simultaneous attendance and participation at any place at which persons are participating, using electronic means may include arrangements for controlling or regulating the level of attendance at any particular venue provided that such arrangements shall operate so that all members and proxies wishing to attend the meeting are able to attend at one or other of the venues.

53.

(1)

The members or proxies at the place or places at which persons are participating via electronic means shall be counted in the quorum for, and be entitled to vote at, the general meeting in question, and that meeting shall be duly constituted and its proceedings valid if the chairman of the meeting is satisfied that adequate facilities are available throughout the meeting to ensure that the members or proxies attending at the places at which persons are participating via electronic means are able to:

(a)

participate in the business for which the meeting has been convened; and

(b)

see and hear all persons who speak (whether through the use of microphones, loud speakers, audiovisual communication equipment or otherwise) in the Principal Place (and any other place at which persons are participating via electronic means).

(2)

For the purposes of all other provisions of these articles (unless the context requires otherwise), the members shall be treated as meeting at the Principal Place.

(3)

If it appears to the chairman of the meeting that the facilities at the Principal Place or any place at which persons are participating via electronic means have become inadequate for the purposes set out in sub-paragraphs (a) and (b) above, the chairman of the meeting may, without the consent of the meeting, interrupt or adjourn the general meeting. All business conducted at the general meeting up to the point of the adjournment shall be valid. The provisions of article 54(3) shall apply to that adjournment.

Adjournments

54.

(1)

If a quorum is not present within half an hour after the time appointed for holding the meeting, or if during a meeting a quorum ceases to be present, the meeting shall stand adjourned and (subject to the provisions of the Acts) the chairman of the meeting shall either specify the time and place to which it is adjourned or state that it is adjourned to such time and place as the directors may determine. If at the adjourned meeting a quorum is not present within 15 minutes after the time appointed for holding the meeting, the meeting shall be dissolved.

(2)

Without prejudice to any other power of adjournment he may have under these articles or at common law:

(a)

the chairman of the meeting may, with the consent of a meeting at which a quorum is present (and shall if so directed by the meeting), adjourn the meeting;

(b)

the chairman of the meeting may, without the consent of the meeting, adjourn the meeting before or after it has commenced, if the chairman of the meeting considers that:

(i)

there is not enough room for the number of members and proxies who wish to attend the meeting;

(ii)

the behaviour of anyone present prevents, or is likely to prevent, the orderly conduct of the business of the meeting;

(iii)

an adjournment is necessary to protect the safety of any person attending the meeting; or

(iv)

an adjournment is otherwise necessary in order for the business of the meeting to be properly carried out.

If so adjourned, the chairman of the meeting shall either specify the time and place to which it is adjourned or state that it is adjourned to such time and place as the directors may determine.

(3)

Subject to the provisions of the Acts, it shall not be necessary to give notice of an adjourned meeting except that when a meeting is adjourned for 14 days or more, at least seven clear days' notice shall be given specifying the time and place of the adjourned meeting and the general nature of the business to be transacted. No business shall be transacted at an adjourned meeting other than business which might properly have been transacted at the meeting had the adjournment not taken place.

(4)

Subject to paragraph (1) of this article, meetings can be adjourned more than once, in accordance with the procedures set out in this article.

AMENDMENTS TO RESOLUTIONS

Amendments to special and ordinary resolutions

55.

(1)

A special resolution to be proposed at a general meeting may be amended by ordinary resolution if:

(a)

the chairman of the meeting proposes the amendment at the general meeting at which the resolution is to be proposed; and

(b)

the amendment does not go beyond what is necessary to correct a clear error in the resolution.

(2)

An ordinary resolution to be proposed at a general meeting may be amended by ordinary resolution if:

(a)

unless such amendment is proposed by the directors written notice of the terms of the proposed amendment and of the intention to move the amendment have been delivered to the Company at the Office at least 48 hours before the time for holding the meeting or the adjourned meeting at which the ordinary resolution in question is proposed and the proposed amendment does not, in the reasonable opinion of the chairman of the meeting, materially alter the scope of the resolution; and

(b)

the chairman of the meeting, in his absolute discretion, decides that the proposed amendment may be considered or voted on.

Withdrawal and ruling amendments out of order

56.

With the consent of the chairman of the meeting, an amendment may be withdrawn by its proposer before it is voted on. If an amendment proposed to any resolution under consideration is ruled out of order by the chairman of the meeting, the proceedings on the resolution shall not be invalidated by any error in the ruling.

POLLS

Demand for a poll

57.

(1)

For so long as any shares are held in a settlement system operated by DTC, any resolution put to the vote of a general meeting must be decided on a poll (and for so long as any shares are held in a settlement system operated by DTC this provision may not be amended without the unanimous consent of all the members). If no shares are held in DTC, a resolution put to the vote of a general meeting must be decided on a show of hands unless a poll is validly demanded. A poll on a resolution may be demanded either before a vote on a show of hands on that resolution or immediately after the result of a show of hands on that resolution is declared.

(2)

A poll on a resolution may be demanded by:

(a)

the chairman of the meeting;

(b)

a majority of the directors present at the meeting;

(c)

not less than five members having the right to vote at the meeting;

(d)

a member or members representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting (excluding any voting rights attached to any shares in the Company held as treasury shares); or

(e)

a member or members holding shares conferring a right to vote on the resolution on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right (excluding any shares in the Company conferring a right to vote at the meeting which are held as treasury shares).

Chairman's declaration

58.

Unless a poll is duly demanded and the demand is not subsequently withdrawn, a declaration by the chairman of the meeting that a resolution has been carried or carried unanimously, or by a particular majority, or lost, or not carried by a particular majority, and an entry in respect of such declaration in the minutes of the meeting, shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against the resolution.

Withdrawal of demand for a poll

59.	The demand for a poll may, before the poll is taken, be withdrawn but only with the consent of the chairman of the meeting, and a demand so withdrawn shall not be taken to have invalidated the result of a show of hands declared before the demand was made.

Polls to be taken as chairman directs

60.

Polls at general meetings shall, subject to articles 61 and 62 below, be taken when, where and in such manner as the chairman of the meeting directs. The chairman of the meeting may appoint scrutineers (who need not be members) and decide how and when the result of the poll is to be declared. The result of a poll shall be the decision of the meeting in respect of the resolution on which the poll was demanded.

When poll to be taken

61.

A poll on the election of the chairman of the meeting or on a question of adjournment must be taken immediately. Any other polls must be taken either during the meeting or within 30 days of the poll being demanded. A demand for a poll does not prevent a general meeting from continuing, except as regards the question on which the poll was demanded. If a poll is demanded before the declaration of the result of a show of hands and the demand is duly withdrawn, the meeting shall continue as if the demand had not been made.

Notice of poll

62.	No notice need be given of a poll not taken during the meeting if the time and place at which it is to be taken are announced at the meeting at which it is demanded. In any other case, at least seven clear days' notice must be given specifying the time and place at which the poll is to be taken.

VOTES OF MEMBERS

Voting rights

63.	Subject to any rights or restrictions attached to any shares:

(a) on a show of hands:

(i)

every member who is present in person has one vote;

(ii)

every proxy present who has been duly appointed by one or more members entitled to vote on the resolution has one vote, except that if the proxy has been duly appointed by more than one member entitled to vote on the resolution and is instructed by one or more of those members to vote for the resolution and by one or more others to vote against it, or is instructed by one or more of those members to vote in one way and is given discretion as to how to vote by one or more others (and wishes to use that discretion to vote in the other way) he has one vote for and one vote against the resolution; and

(iii)

every corporate representative present who has been duly authorised by a corporation has the same voting rights as the corporation would be entitled to;

(b)

on a poll every member present in person or by duly appointed proxy or corporate representative has one vote for every share of which he is the holder or in respect or which his appointment as proxy or corporate representative has been made; and

(c)

a member, proxy or corporate representative entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses the same way.

Voting record date

64.

In order that the Company may determine the members entitled to vote at any meeting of members or any adjournment thereof, and how many votes such person may cast, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed the record date for determining members entitled to vote at a meeting of members shall, unless otherwise required by law, be at the close of business on the business day preceding the day on which notice is given.

Votes of joint holders

65.	In the case of joint holders the vote of the joint holder whose name appears first on the register of members in respect of the joint holding shall be accepted to the exclusion of the votes of the other joint holders.

Votes on behalf of an incapable member

66.

A member in respect of whom an order has been made by any court having jurisdiction in matters concerning mental disorder may vote, on a show of hands or on a poll, by any person authorised in that behalf by that court and the person so authorised may exercise other rights in relation to general meetings, including appointing a proxy. Evidence to the satisfaction of the directors of the authority of the person claiming the right to vote shall be delivered to the Office, or such other place as is specified in accordance with these articles for the delivery or receipt of appointments of proxy, not less than 48 hours before the time appointed for holding the meeting or adjourned meeting at which the right to vote is to be exercised, and in default the right to vote shall not be exercisable.

No right to vote where sums overdue

67.	No member shall have the right to vote at any general meeting or at any separate meeting of the holders of any class of shares, either in person or by proxy, in respect of any share held by him unless all amounts presently payable by him in respect of that share have been paid.

Objections and validity of votes

68.

(1)

Any objection to the qualification of any person voting at a general meeting or on a poll or to the counting of, or failure to count, any vote, must be made at the meeting or adjourned meeting or at the time the poll is taken (if not taken at the meeting or adjourned meeting) at which the vote objected to is tendered. Any objection made in due time shall be referred to the chairman of the meeting whose decision shall be final and conclusive. If a vote is not disallowed by the chairman of the meeting it is valid for all purposes.

(2)

The Company shall not be bound to enquire whether any proxy or corporate representative votes in accordance with the instructions given to him by the member he represents and if a proxy or corporate representative does not vote in accordance with the instructions of the member he represents the vote or votes cast shall nevertheless be valid for all purposes.

PROXIES AND CORPORATE REPRESENTATIVES

Appointment of proxies

69.

A member is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and to speak and vote at a meeting of the Company. The appointment of a proxy shall be deemed also to confer authority to demand or join in demanding a poll. Delivery of an appointment of proxy shall not preclude a member from attending and voting at the meeting or at any adjournment of it. A proxy need not be a member. A member may appoint more than one proxy in relation to a meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him. References in these articles to an appointment of proxy include references to an appointment of multiple proxies.

70.

Where two or more valid appointments of proxy are received in respect of the same share in relation to the same meeting, the one which is last sent shall be treated as replacing and revoking the other or others. If the Company is unable to determine which is last sent, the one which is last received shall be so treated. If the Company is unable to determine either which is last sent or which is last received, none of such appointments shall be treated as valid in respect of that share.

Form of proxy appointment

71.

(1)

Subject to article 72 an appointment of proxy shall be in writing in any usual form or in any other form which the directors may approve and shall be executed by or on behalf of the appointor which in the case of a corporation may be either under its common seal or under the hand of a duly authorised officer or other person duly authorised for that purpose. The signature on the appointment of proxy need not be witnessed.

(2)

Where the appointment of a proxy is expressed to have been or purports to have been executed by a duly authorised person on behalf of a member:

(a)

the Company may treat the appointment as sufficient evidence of that person's authority to execute the appointment of proxy on behalf of that member; and

(b)

the member shall, if requested by or on behalf of the Company, send or procure the sending of any authority under which the appointment of proxy has been executed, or a certified copy of any such authority to such address and by such time as required under article 73 and, if the request is not complied with in any respect, the appointment of proxy may be treated as invalid.

Proxies sent or supplied in electronic form

72.

The directors may (and shall for so long as any shares are held in a settlement system operated by DTC or if and to the extent that the Company is required to do so by the Acts) allow an appointment of proxy to be sent or supplied in electronic form subject to any conditions or limitations as the directors may specify. Where the Company has given an electronic address in any instrument of proxy or invitation to appoint a proxy, any document or information relating to proxies for the meeting (including any document necessary to show the validity of, or otherwise relating to, an appointment of proxy, or notice of the termination of the authority of a proxy) may be sent by electronic means to that address, subject to any conditions or limitations specified in the relevant notice of meeting.

Receipt of appointments of proxy

73.

(1)

An appointment of proxy may:

(a)

in the case of an appointment of proxy in hard copy form, be received at the Office or such other place as is specified in the notice convening the meeting, or in any appointment of proxy or any invitation to appoint a proxy sent out or made available by the Company in relation to the meeting, not less than 48 hours before the time for holding the meeting or adjourned meeting to which it relates;

(b)

in the case of an appointment of proxy in electronic form, be received at the electronic address specified in the notice convening the meeting, or in any instrument of proxy or any invitation to appoint a proxy sent out or made available by the Company in relation to the meeting, not less than 48 hours before the time for holding the meeting or adjourned meeting to which it relates; and

(c)

in the case of a poll taken subsequently to the date of the meeting or adjourned meeting, be received as aforesaid not less than 24 hours (or such shorter time as the directors may determine) before the time appointed for the taking of the poll.

(2)

The directors may specify in the notice convening the meeting that in determining the time for delivery of proxies pursuant to this article, no account shall be taken of any part of any day that is not a working day. An appointment of proxy which is not received or delivered in a manner so permitted shall be invalid.

Termination of appointments of proxy

74.

A vote given or poll demanded by proxy shall be valid notwithstanding the previous termination of the authority of the person voting or demanding a poll, unless notice of the termination was delivered in writing to the Company at such place or address at which an appointment of proxy may be duly received under article 73 not later than the last time at which an appointment of proxy should have been received under article 73 in order for it to be valid.

Availability of appointments of proxy

75.

The directors may at the expense of the Company send or make available appointments of proxy or invitations to appoint a proxy to the members by post or by electronic means or otherwise (with or without provision for their return prepaid) for use at any general meeting or at any separate meeting of the holders of any class of shares, either in blank or nominating in the alternative any one or more of the directors or any other person. If for the purpose of any meeting, appointments of proxy or invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the Company's expense, they shall be issued to all (and not to some only) of the members entitled to be sent a notice of the meeting and to vote at it. The accidental omission, or the failure due to circumstances beyond the Company's control, to send or make available such an appointment of proxy or give such an invitation to, or the non-receipt thereof by, any member entitled to attend and vote at a meeting shall not invalidate the proceedings at that meeting.

Corporations acting by representatives

76.

(1)

Subject to the provisions of the Acts, any corporation (other than the Company itself) which is a member of the Company may, by resolution of its directors or other governing body, authorise a person or persons to act as its representative or representatives at any meeting of the Company, or at any separate meeting of the holders of any class of shares. The corporation shall for the purposes of these articles be deemed to be present in person at any such meeting if a person or persons so authorised is present at it. The Company may require such person or persons to produce a certified copy of the resolution before permitting him to exercise his powers.

(2)

A vote given or poll demanded by a corporate representative shall be valid notwithstanding that he is no longer authorised to represent the member unless notice of the termination was delivered in writing to the Company at such place or address and by such time as is specified in article 73 for the receipt of an appointment of proxy.

APPOINTMENT AND RETIREMENT OF DIRECTORS

Number of directors

77.	Unless otherwise determined by a majority of the directors the number of directors (disregarding alternate directors) shall not be subject to any maximum but shall not be less than two.

Procedure for appointment or reappointment at general meeting

78.	No person other than a director retiring at the meeting shall be appointed or reappointed a director at any general meeting unless:

(a)

he is recommended by the directors; or

(b)

not less than 14 nor more than 35 days before the date appointed for holding the meeting, notice executed by a member qualified to vote on the appointment or reappointment has been given to the Company of the intention to propose that person for appointment or reappointment, stating the particulars which would, if he were appointed or reappointed, be required to be included in the Company's register of directors, together with notice executed by that person of his willingness to be appointed or reappointed.

Election of two or more directors

79.

At a general meeting a motion for the appointment of two or more persons as directors by a single resolution shall not be made, unless a resolution that it shall be so made has first been agreed to by the meeting without any vote being given against it. For the purposes of this article a motion for approving a person's appointment or for nominating a person for appointment shall be treated as a motion for his appointment.

Power of directors to appoint a director

80.

The directors may appoint a person who is willing to act as a director, and is permitted by law to do so, to be a director, either to fill a vacancy or as an additional director, provided that the appointment does not cause the number of directors to exceed any number fixed as the maximum number of directors.

Annual retirement of directors

81.

The directors shall be divided into three classes: "Class A", "Class B" and "Class C". The number of directors in each class shall be as nearly equal as possible. Upon the adoption of these articles, the existing directors shall by resolution classify themselves as "Class A Directors", "Class B Directors" or "Class C Directors". The Class A Directors shall stand elected for a term expiring at the Company’s first annual general meeting, the Class B Directors shall stand elected for a term expiring at the Company’s second annual general meeting and the Class C Directors shall stand elected for a term expiring at the Company’s third annual general meeting. Commencing at the Company’s first annual general meeting following the adoption of these articles, and at each annual general meeting thereafter, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual general meeting after their election. Except as the Acts or other applicable law may otherwise require, in the interim between annual general meetings called for the election of directors and/or the removal of one or more directors and the filling of any vacancy in that connection, additional directors and any vacancies in the board of directors, including unfilled vacancies resulting from the removal of directors for cause, may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum (as defined in these articles), or by the sole remaining director. All directors shall hold office until the expiration of their respective terms of office and until their successors shall have been elected and qualified. A director elected to fill a vacancy resulting from the death, resignation or removal of a director shall serve for the remainder of the full term of the director whose death, resignation or removal shall have created such vacancy and until his successor shall have been elected and qualified.

Filling of vacancy

82.

If the Company, at the meeting at which a director retires, does not fill the vacancy the retiring director shall, if willing to act, be deemed to have been reappointed unless at the meeting it is resolved not to fill the vacancy or a resolution for the reappointment of the director is put to the meeting and lost.

Director not reappointed at annual general meeting

83.	A director who retires at an annual general meeting may be reappointed. If he is not reappointed or deemed to have been reappointed, he shall retain office until the meeting elects someone in his place or, if it does not do so, until the close of the meeting.

DISQUALIFICATION OF DIRECTORS

Termination of a director's appointment

84.	A person ceases to be a director as soon as:

(a)

that person ceases to be a director by virtue of any provision of the Acts or is prohibited from being a director by law;

(b)

a bankruptcy order is made against that person;

(c)

a composition is made with that person's creditors generally in satisfaction of that person's debts;

(d)

notification is received by the Company from that person that he is resigning or retiring from his office as director, and such resignation or retirement has taken effect in accordance with its terms;

(e)

in the case of a director who holds any executive office, his appointment as such is terminated or expires and the directors resolve that he should cease to be a director;

(f)

that person is absent without permission of the directors from all meetings of the directors held during a continuous period of six months or more and the directors resolve that he should cease to be a director; or

(g)

a notice in writing is served upon him personally, or at his residential address provided to the Company for the purposes of section 165 of the Companies Act 2006, signed by all the other directors stating that he shall cease to be a director with immediate effect (and such notice may consist of several copies each signed by one or more directors, but a notice executed by an alternate director need not also be executed by his appointor and, if it is executed by a director who has appointed an alternate director, it need not also be executed by the alternate director in that capacity).

ALTERNATE DIRECTORS

Appointment and removal of an alternate director

85.

Any director (other than an alternate director) may appoint any other director, or any other person approved by resolution of the directors and willing to act and permitted by law to do so, to be an alternate director and may remove an alternate director appointed by him from his appointment as alternate director.

Rights of an alternate director

86.

An alternate director shall be entitled to receive notices of meetings of the directors and of committees of the directors of which his appointor is a member, to attend and vote at any such meeting at which the director appointing him is not present, and generally to perform all the functions of his appointor as a director in his absence. An alternate director shall not (unless the Company by ordinary resolution otherwise determines) be entitled to any fees for his services as an alternate director, but shall be entitled to be paid such expenses as might properly have been paid to him if he had been a director.

Termination of an alternate director's appointment

87.

An alternate director shall cease to be an alternate director if his appointor ceases to be a director; however, if a director retires, pursuant to these articles or otherwise, but is reappointed or deemed to have been reappointed at the meeting at which he retires, any appointment of an alternate director made by him which was in force immediately prior to his retirement shall continue after his reappointment.

88.	An alternate director shall cease to be an alternate director on the occurrence in relation to the alternate director of any event which, if it occurred in relation to his appointor, would result in the termination of the appointor's appointment as a director.

Method of appointment or removal of an alternate director

89.	An appointment or removal of an alternate director shall be by notice in writing to the Company signed by the director making or revoking the appointment or in any other manner approved by the directors.

Other provisions regarding alternate directors

90.	Save as otherwise provided in these articles, an alternate director shall:

(a)

be deemed for all purposes to be a director;

(b)

alone be responsible for his own acts and omissions;

(c)

in addition to any restrictions which may apply to him personally, be subject to the same restrictions as his appointor; and

(d)

not be deemed to be the agent of or for the director appointing him.

POWERS OF DIRECTORS

General powers of the Company vested in the directors

91.

(1)

The business of the Company shall be managed by the directors who, subject to the provisions of these articles and to any directions given by special resolution of the Company to take, or refrain from taking, specified action, may exercise all the powers of the Company. No alteration of these articles and no such direction shall invalidate any prior act of the directors which would have been valid if that alteration had not been made or that direction had not been given. The general management powers given by this article shall not be limited by any special authority or power given to the directors by any other article.

(2)

Notwithstanding the generality of (1) above, the directors may exercise all the powers of the Company to: (i) borrow money; (ii) mortgage or charge all or any part or parts of its undertaking, property and uncalled capital; and (iii) issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

Provision for employees on cessation or transfer of business

92.

The directors may decide to make provision for the benefit of persons employed or formerly employed by the Company or any of its subsidiary undertakings (other than a director or former director or shadow director) in connection with the cessation or transfer to any person of the whole or part of the undertaking of the Company or that subsidiary undertaking.

Delegation to persons or committees

93.

(1)

Subject to the provisions of these articles, the directors may delegate any of the powers which are conferred on them under the articles:

(a)

to such person or committee;

(b)

by such means (including by power of attorney);

(c)

to such an extent;

(d)

in relation to such matters or territories; and

(e)

on such terms and conditions,

as they think fit.

(2)

If the directors so specify, any such delegation may authorise further delegation of the directors' powers by any person to whom they are delegated.

(3)

The directors may revoke any delegation in whole or part, or alter its terms and conditions.

(4)

The power to delegate under this article includes power to delegate the determination of any fee, remuneration or other benefit which may be paid or provided to any director.

(5)

Subject to paragraph (6) of this article, the proceedings of any committee appointed under paragraph (1)(a) of this article with two or more members shall be governed by such of these articles as regulate the proceedings of directors so far as they are capable of applying.

(6)

The directors may make rules regulating the proceedings of such committees, which shall prevail over any rules derived from these articles pursuant to paragraph (5) of this article if, and to the extent that, they are not consistent with them.

(7)

References to a committee of the directors are to a committee established in accordance with these articles, whether or not comprised wholly of directors.

DIRECTORS' REMUNERATION, GRATUITIES AND BENEFITS

Directors' remuneration

94.	(1)	Until otherwise determined by the Company by ordinary resolution, there shall be paid to the directors (other than alternate directors) such fees for their services in the office of director as the directors may determine, provided that any fees paid to the directors shall not exceed the amounts set out in the then applicable directors' remuneration policy approved by members for the purposes of section 439A of the Companies Act 2006. The fees shall be deemed to accrue from day to day and shall be distinct from and additional to any remuneration or other benefits which may be paid or provided to any director pursuant to any other provision of these articles.

	(2)	Any director who holds any other office in the Company (including for this purpose the office of chairman or deputy-chairman), or who serves on any committee of the directors, or who performs, or undertakes to perform, services which the directors consider go beyond the ordinary duties of a director may be paid such additional remuneration (whether by way of fixed sum, bonus, commission, participation in profits or otherwise) as the directors may determine.

95.	Expenses

96.

The directors may also be paid all reasonable expenses properly incurred by them in connection with their attendance at meetings of the directors or of committees of the directors or general meetings or separate meetings of the holders of any class of shares or of debentures of the Company and any reasonable expenses properly incurred by them otherwise in connection with the exercise of their powers and the discharge of their responsibilities in relation to the Company.

Directors' gratuities and benefits

97.

The directors may (by the establishment of, or maintenance of, schemes or otherwise) provide benefits, whether by the payment of allowances, gratuities or pensions, or by insurance or death, sickness or disability benefits or otherwise, for any director or any former director of the Company or of any body corporate which is or has been a subsidiary undertaking of the Company or a predecessor in business of the Company or of any such subsidiary undertaking, and for any member of his family (including a spouse or civil partner or a former spouse or former civil partner) or any person who is or was dependent on him and may (before as well as after he ceases to hold such office) contribute to any fund and pay premiums for the purchase or provision of any such benefit.

Executive directors

98.	The directors may appoint one or more of their number to the office of managing director or to any other executive office of the Company and any such appointment may be made for such term, at such remuneration and on such other conditions as the directors think fit.

DIRECTORS' APPOINTMENTS AND INTERESTS

Other interests and offices

99.

(1)

Provided that he has disclosed to the directors the nature and extent of any material interest of his, a director notwithstanding his office:

(a)

may be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested;

(b)

(2)

No transaction or arrangement shall be liable to be avoided on the ground of any interest, office, employment or position within paragraph (1) above and the relevant director:

(a)

shall not infringe his duty to avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company as a result of any such office, employment or position, or any such transaction or arrangement, or any interest in any such body corporate;

(b)

shall not, by reason of his office as a director of the Company be accountable to the Company for any benefit which he derives from any such office, employment or position, or any such transaction or arrangement, or from any interest in any such body corporate;

(c)

shall not be required to disclose to the Company, or use in performing his duties as a director of the Company, any confidential information relating to any such office, employment, or position if to make such a disclosure or use would result in a breach of a duty or obligation of confidence owed by him in relation to or in connection with such office, employment or position; and

(d)

may absent himself from discussions, whether in meetings of the directors or otherwise, and exclude himself from information, which will or may relate to such office, employment, position, transaction, arrangement or interest.

(3)

For the purposes of this article:

(a)

a general notice given to the directors that a director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in which a specified person or class of persons is interested shall be deemed to be a disclosure that the director has an interest in any such transaction of the nature and extent so specified;

(b)

an interest of which a director has no knowledge and of which it is unreasonable to expect him to have knowledge shall not be treated as an interest of his;

(c)

a director shall be deemed to have disclosed the nature and extent of an interest which consists of him being a director, officer or employee of any subsidiary undertaking of the Company;

(d)

a director need not disclose an interest if it cannot be reasonably regarded as likely to give rise to a conflict of interest; and

(e)

a director need not disclose an interest if, or to the extent that, the other directors are already aware of it (and for this purpose the other directors are treated as aware of anything of which they ought reasonably to be aware).

100.

(1)

The directors may (subject to such terms and conditions, if any, as they may think fit to impose from time to time, and subject always to their right to vary or terminate such authorisation) authorise, to the fullest extent permitted by law:

(a)

any matter which would otherwise result in a director infringing his duty to avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company and which may reasonably be regarded as likely to give rise to a conflict of interest (including a conflict of interest and duty or conflict of duties); and

(b)

a director to accept or continue in any office, employment or position in addition to his office as a director of the Company and, without prejudice to the generality of paragraph (1)(a) of this article, may authorise the manner in which a conflict of interest arising out of such office, employment or position may be dealt with, either before or at the time that such a conflict of interest arises,

provided that the authorisation is effective only if (i) any requirement as to the quorum at the meeting at which the matter is considered is met without counting the director in question or any other interested director, and (ii) the matter was agreed to without their voting or would have been agreed to if their votes had not been counted.

(2)

If a matter, or office, employment or position, has been authorised by the directors in accordance with this article then (subject to such terms and conditions, if any, as the directors may think fit to impose from time to time, and subject always to their right to vary or terminate such authorisation or the permissions set out below) no transaction or arrangement relating to any such matter shall be liable to be avoided on the ground of any such matter, or office, employment or position and the relevant director:

(a)

(b)

shall not, by reason of his office as a director of the Company, be accountable to the Company for any benefit which he derives from any such matter, or from any such office, employment or position;

(c)

shall not be required to disclose to the Company, or use in performing his duties as a director of the Company, any confidential information relating to such matter, or such office, employment or position if to make such a disclosure or use would result in a breach of a duty or obligation of confidence owed by him in relation to or in connection with that matter, or that office, employment or position; and

(d)

may absent himself from discussions, whether in meetings of the directors or otherwise, and exclude himself from information, which will or may relate to that matter, or that office, employment or position.

PROCEEDINGS OF DIRECTORS

Procedures regarding board meetings

101.	(1)	Subject to the provisions of these articles, the directors may make any rule which they think fit about how they take decisions, and about how such rules are to be recorded or communicated to directors.

	(2)	A director may, and the secretary at the request of a director shall, call a meeting of the directors.

(3)

Notice of a board meeting may be given to a director personally, or by telephone, or sent in hard copy form to him at a postal address notified by him to the Company for this purpose, or sent in electronic form to such electronic address (if any) as may for the time being be notified by him to the Company for that purpose. A director may waive notice of any board meeting and any such waiver may be retrospective.

(4)

Questions arising at a meeting shall be decided by a majority of votes. In case of an equality of votes, the chairman shall (unless he is not entitled to vote on the resolution in question) have a second or casting vote. A director who is also an alternate director shall be entitled in the absence of his appointor to a separate vote on behalf of his appointor in addition to his own vote; and an alternate director who is appointed by two or more directors shall be entitled to a separate vote on behalf of each of his appointors in the appointor's absence.

(5)

A meeting of the directors may consist of a conference between directors some or all of whom are in different places provided that each director who participates in the meeting is able:

(a)

to hear each of the other participating directors addressing the meeting; and

(b)

if he so wishes, to address each of the other participating directors simultaneously,

whether directly, by conference telephone or by any other form of communication equipment (whether in use when this article is adopted or developed subsequently) or by a combination of such methods. A quorum shall be deemed to be present if those conditions are satisfied in respect of at least the number of directors required to form a quorum. A meeting held in this way shall be deemed to take place at the place where the largest group of directors is assembled or, if no such group is readily identifiable, at the place from where the chairman of the meeting participates at the start of the meeting.

Number of directors below minimum

102.

The continuing directors or a sole continuing director may act notwithstanding any vacancies in their number, but, if the number of directors is less than either the number fixed as the minimum, or the quorum required for a meeting of the directors (or both) the continuing directors or director may act only for the purpose of filling vacancies or of calling a general meeting.

Election and removal of chairman and deputy chairman

103.

The directors may elect from their number, and remove, a chairman and a deputy chairman of the board of directors. The chairman, or in his absence the deputy chairman, shall preside at all meetings of the directors, but if there is no chairman or deputy chairman, or if at the meeting neither the chairman nor the deputy chairman is present within ten minutes after the time appointed for the meeting, or if neither of them is willing to act as chairman, the directors present may choose one of their number to be chairman of the meeting.

Resolutions in writing

104.

A resolution in writing agreed to by all the directors entitled to receive notice of a meeting of the directors and who would be entitled to vote (and whose vote would have been counted) on the resolution at a meeting of the directors shall (if that number is sufficient to constitute a quorum) be as valid and effectual as if it had been passed at a meeting of the directors, duly convened and held. A resolution in writing is adopted when all such directors have signed one or more copies of it or have otherwise indicated their agreement to it in writing. A resolution agreed to by an alternate director, however, need not also be agreed to by his appointor and, if it is agreed to by a director who has appointed an alternate director, it need not also be agreed to by the alternate director in that capacity.

Quorum

105.

No business shall be transacted at any meeting of the directors unless a quorum is present. The quorum may be fixed by the directors. If the quorum is not fixed by the directors, the quorum shall be two. A director shall not be counted in the quorum present in relation to a matter or resolution on which he is not entitled to vote (or when his vote cannot be counted) but shall be counted in the quorum present in relation to all other matters or resolutions considered or voted on at the meeting. An alternate director who is not himself a director shall if his appointor is not present, be counted in the quorum. An alternate director who is himself a director shall only be counted once for the purpose of determining if a quorum is present.

Permitted interests and voting

106.	(1)	Subject to articles 106 (2) and 107, notwithstanding the fact that a proposed decision of the directors concerns or relates to any matter in which a director has, or may have, directly or indirectly, any kind of interest whatsoever, that director may participate in the decision-making process for both quorum and voting purposes.

	(2)	The directors have the power to authorise a director's conflict of interest under section 175(4) (b) of the Acts. If the directors propose to exercise this power, the director facing the conflict is not to be counted as participating in the decision to authorise the conflict for quorum or voting purposes.

107.	Subject to the provisions of the Acts, and provided that (if required to do so by the said Acts) he has declared to the directors the nature and extent of any direct or indirect interest of his, a director, notwithstanding his office:

(1)

may be a party to or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise interested;

(2)

may be a director or other officer or an employee of, or a party to any transaction or arrangement with, or otherwise interested in, any subsidiary of the Company or body corporate in which the Company is interested; and

(3)

is not accountable to the Company for any remuneration or other benefits which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no transaction or arrangement is liable to be avoided on the ground of any such remuneration, benefit or interest.

Suspension or relaxation of prohibition on voting

108.	The Company may by ordinary resolution suspend or relax to any extent, in respect of any particular matter, any provision of these articles prohibiting a director from voting at a meeting of the directors or of a committee of the directors.

Questions regarding director's rights to vote

109.

If a question arises at a meeting of the directors as to the right of a director to vote, the question may, before the conclusion of the meeting, be referred to the chairman of the meeting (or, if the director concerned is the chairman, to the other directors at the meeting), and his ruling in relation to any director other than himself (or, as the case may be, the ruling of the majority of the other directors in relation to the chairman) shall be final and conclusive.

DIVIDENDS

Declaration of dividends by Company

110.	The Company may by ordinary resolution declare dividends in accordance with the respective rights of the members, but no dividend shall exceed the amount recommended by the directors.

Payment of interim dividends

111.

The directors may pay interim dividends if it appears to them that they are justified by the profits of the Company available for distribution. If the share capital is divided into different classes, the directors may pay interim dividends on shares which confer deferred or non-preferred rights with regard to dividend as well as on shares which confer preferential rights with regard to dividend, but no interim dividend shall be paid on shares carrying deferred or non-preferred rights if, at the time of payment, any preferential dividend is in arrear. The directors may also pay at intervals settled by them any dividend payable at a fixed rate if it appears to them that the profits available for distribution justify the payment. If the directors act in good faith they shall not incur any liability to the holders of shares conferring preferred rights for any loss they may suffer by the lawful payment of an interim dividend on any shares having deferred or non-preferred rights.

Payment according to amount paid up

112.

Except as otherwise provided by these articles or the rights attached to shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is paid. If any share is issued on terms that it ranks for dividend as from a particular date, it shall rank for dividend accordingly. In any other case (and except as aforesaid), dividends shall be apportioned and paid proportionately to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid. For the purpose of this article, no account is to be taken of any amount which has been paid up on a share in advance of the due date for payment of that amount.

Non-cash distribution

113.

The directors may determine when resolving to pay a dividend, and a general meeting declaring a dividend may, upon the recommendation of the directors, direct that it shall be satisfied wholly or partly by the distribution of specific assets and in particular of fully paid shares or debentures of any other company. Where any difficulty arises in regard to the distribution, the directors may settle the same as they think fit and in particular (but without limitation) may:

(a)

issue fractional certificates or other fractional entitlements (or ignore fractions) and fix the value for distribution of such specific assets or any part thereof;

(b)

determine that cash shall be paid to any member on the basis of the value so fixed in order to adjust the rights of those entitled to participate in the dividend; and

(c)

vest any such specific assets in trustees.

Dividend payment procedure

114. (1)

Any dividend or other money payable relating to a share shall be paid to:

	(a)	the holder;

	(b)	if the share is held by more than one holder, all joint holders; or

	(c)	the person or persons becoming entitled to the share by reason of the death or bankruptcy of a holder or otherwise by operation of law,

and such person shall be referred to as the "recipient" for the purposes of this article and article 115 .

(2)

Any dividend or other money payable relating to a share shall be paid by such method as the directors decide. Without limiting any other method of payment which the directors may decide upon, the payments may be made, wholly or partly:

(a)

by sending a cheque, warrant or any other similar financial instrument to the recipient by post addressed to his registered address or, in the case of joint recipients, by sending such cheque, warrant or any other similar financial instrument to the registered address of whichever of the joint recipients' names appears first on the register of members, or, in the case of persons entitled by operation of law, to any such persons;

(b)

by inter-bank transfer or any other electronic form or electronic means to an account (of a type approved by the directors) which is specified in a written instruction from the recipient (or, in the case of joint recipients, all joint recipients);

(c)

in respect of shares in uncertificated form, where the Company is authorised to do so by or on behalf of the recipient (or, in the case of joint recipients, all joint recipients) in such manner as the directors may from time to time consider sufficient, by means of a relevant system;

(d)

in some other way requested in writing by the recipients (or, in the case of joint recipients, all joint recipients) and agreed by the Company;

(e)

in the case of a Depositary, and subject to the approval of the directors, to such persons and postal addresses as the Depositary may direct; or

(f)

to such other person as may be set out in a written instruction from the recipient (or, in the case of joint recipients, all joint recipients), in which case payment shall be made in accordance with sub clauses (a) to (d) above, as specified in the written instruction.

(3)

In respect of the payment of any dividend or other sum which is a distribution, the directors may decide, and notify recipients, that:

(a)

one or more of the means described in paragraph (2) will be used for payment and a recipient may elect to receive the payment by one of the means so notified in the manner prescribed by the directors;

(b)

one or more of such means will be used for the payment unless a recipient elects otherwise in the manner prescribed by the directors; or

(c)

one or more of such means will be used for the payment and that recipients will not be able to elect otherwise.

The directors may for this purpose decide that different methods of payment may apply to different recipients or groups of recipients.

(4)

All cheques, warrants and similar financial instruments are sent, and payment in any other way is made, at the risk of the person who is entitled to the money and the Company will not be responsible for a payment which is lost, rejected or delayed. The Company can rely on a receipt for a dividend or other money paid in relation to a share from any one of the joint recipients on behalf of all of them. The Company is treated as having paid a dividend if the cheque, warrant or similar financial instrument is cleared or if a payment is made using a relevant system or inter-bank transfer or other electronic means.

(5)

Subject to the rights attaching to any shares:

	(a)	any dividends or other monies payable on or in respect of a share may be declared or paid in such currency or currencies and using such exchange rate or such date for determining the value or currency conversions as the directors may determine; and

	(b)	following agreement with a Depositary, the directors may decide that that Depositary shall receive dividends in a currency other than the currency in which they were declared and can make arrangements accordingly. In particular, if a Depositary has chosen or agreed to receive dividends in another currency, the directors can make arrangements with the Depositary for payment to be made to the Depositary for value on the date on which the relevant dividend is paid, or a later date decided by the directors.

Right to cease sending payment and unclaimed payments

115.

(1)

The Company may cease to send any cheque or warrant, or to use any other method of payment, for any dividend payable in respect of a share if:

(a)

in respect of at least two consecutive dividends payable on that share the cheque or warrant has been returned undelivered or remains uncashed, or another method of payment has failed;

(b)

in respect of one dividend payable on that share, the cheque or warrant has been returned undelivered or remains uncashed, or another method of payment has failed, and reasonable enquiries have failed to establish any new address or account of the recipient; or

(c)

a recipient does not specify an address, or does not specify an account of a type prescribed by the directors, or other details necessary in order to make a payment of a dividend by the means by which the directors have decided in accordance with these articles that a payment is to be made, or by which the recipient has elected to receive payment, and such address or details are necessary in order for the company to make the relevant payment in accordance with such decision or election,

but, subject to the provisions of these articles, the Company may recommence sending cheques or warrants, or using another method of payment, for dividends payable on that share if the person or persons entitled so request and have supplied in writing a new address or account to be used for that purpose.

(2)

In cases where the Company makes a payment of a dividend or other sum which is a distribution in accordance with these articles and that payment is rejected or refunded, such sum may be invested or otherwise made use of for the benefit of the Company until the relevant recipient (or, in the case of joint recipients, all joint recipients) nominates a valid address or account to which the payment shall be made. If the Company does this, it will not be a trustee of the money and will not be liable to pay interest on it and any amount credited to an account of the Company is to be treated as having been paid to the relevant recipient (or, in the case of joint recipients, all joint recipients) at the time it is credited to that account.

No interest on dividends

116.	No dividend or other money payable in respect of a share shall bear interest against the Company, unless otherwise provided by the rights attached to the share.

Forfeiture of unclaimed dividends

117.	(1)	Any dividend or other money payable in respect of a share which has remained unclaimed for 12 years from the date when it became due for payment shall be forfeited (unless the directors decide otherwise) and shall cease to remain owing by the Company and the Company shall not be obliged to account to, or be liable in any respect to , the recipient or person who would have been entitled to the amount.

	(2)	If the Company sells the share under Article 39, any dividend or other money payable in respect of the share outstanding at the time of sale shall be forfeited and the Company shall not be obliged to account to, or be liable in any respect to , the recipient or person who would have been entitled to the amount.

Scrip dividends

118.

The directors may, with the authority of an ordinary resolution of the Company, offer any holders of ordinary shares the right to elect to receive new ordinary shares, credited as fully paid, instead of cash in respect of the whole (or some part, to be determined by the directors) of any dividend specified by the ordinary resolution. The following provisions shall apply:

(a)

The resolution may specify a particular dividend or dividends (whether or not declared), or may specify any, some or all dividends declared or payable within a specified period, but such period must not end later than the end of the third annual general meeting following the date of the meeting at which the ordinary resolution is passed.

(b)

The directors may offer such rights of election to holders either:

(i)

in respect of the next dividend proposed to be paid; or

(ii)

in respect of that dividend and all subsequent dividends, until such time as the election is revoked by the Company or the authority given pursuant to paragraph (a) of this article expires without being renewed (whichever is the earlier).

(c)

The entitlement of each holder of shares to new shares of the same class shall be such that the relevant value of the entitlement shall be as nearly as possible equal to (but not greater than) the cash amount (disregarding any tax credit) that such holder would have received by way of dividend. For this purpose "relevant value" shall be the closing price or last sale price of a share if such class of shares is publicly traded or such price as may be determined by the board of directors of the Company in its reasonable good faith judgment. A certificate or report by the auditors as to the amount of the relevant value in respect of any dividend shall be conclusive evidence of that amount.

(d)

No fraction of a share shall be allotted and the directors may make such provision for fractional entitlements as they think fit, including provision:

(i)

for the whole or part of the benefit of fractional entitlements to be disregarded or to accrue to the Company; or

(ii)

for the value of fractional entitlements to be accumulated on behalf of a member (without entitlement to interest) and applied in paying up new shares in connection with a subsequent offer by the Company of the right to receive shares instead of cash in respect of a future dividend.

(e)

If the directors resolve to offer a right of election, they shall, after determining the basis of allotment, notify the holders of ordinary shares in writing of the right of election offered to them, and shall send with, or following, such notification, forms of election and specify the procedure to be followed and place at which, and the latest time by which, elections must be received in order to be effective. No notice need be given to a holder who has previously made (and has not revoked) an earlier election to receive new shares in place of all future dividends.

(f)

The directors may on any occasion decide that rights of election shall only be made available subject to such exclusions, restrictions or other arrangements as they shall in their absolute discretion deem necessary or desirable in order to comply with legal or practical problems under the laws of, or the requirements of any recognised regulatory body or stock exchange in, any territory.

(g)

The dividend (or that part of the dividend in respect of which a right of election has been given) shall not be payable on ordinary shares in respect of which an election has been duly made ("the elected ordinary shares"). Instead, additional ordinary shares shall be allotted to the holders of the elected ordinary shares on the basis of allotment determined as aforesaid. For such purpose the directors shall capitalise out of any amount for the time being standing to the credit of any reserve or fund (including any share premium account or capital redemption reserve) or any of the profits which could otherwise have been applied in paying dividends in cash, as the directors may determine, a sum equal to the aggregate nominal amount of the additional ordinary shares to be allotted on that basis and apply it in paying up in full the appropriate number of ordinary shares for allotment and distribution to the holders of the elected ordinary shares on that basis.

(h)

The directors shall not proceed with any election unless the Company has sufficient reserves or funds that may be capitalised to give effect to it after the basis of allotment is determined.

(i)

For the purposes of a scrip dividend authorised pursuant to this article only, a resolution of the directors capitalising any profits of the Company not required for paying any preferential dividend (whether or not they are available for distribution) or any sum standing to the credit of any reserve or fund of the Company (including any share premium account, capital redemption reserve, merger reserve or revaluation reserve) shall have the same effect as if such capitalisation had been declared by ordinary resolution of the Company in accordance with article 119 and the directors may, in relation to any such capitalisation, exercise all of the powers conferred on them by article 119.

(j)

Unless the directors decide otherwise or the rules of a relevant system require otherwise, any new ordinary shares which a holder has elected to receive instead of cash in respect of some or all of his dividend will be:

(i)

shares in uncertificated form if the corresponding elected ordinary shares were uncertificated shares on the record date for that dividend; and

(ii)

shares in certificated form if the corresponding elected ordinary shares were shares in certificated form on the record date for that dividend.

(k)

The additional ordinary shares when allotted shall rank pari passu in all respects with the fully paid ordinary shares then in issue except that they will not be entitled to participation in the dividend in lieu of which they were allotted.

(l)

The directors may do all acts and things which they consider necessary or expedient to give effect to any such capitalisation, and may authorise any person to enter on behalf of all the members interested into an agreement with the Company providing for such capitalisation and incidental matters and any agreement so made shall be binding on all concerned.

CAPITALISATION OF PROFITS

Capitalisation of profits

119.

(1)

The directors may with the authority of an ordinary resolution of the Company:

(a)

subject as provided in this article, resolve to capitalise any profits of the Company not required for paying any preferential dividend (whether or not they are available for distribution) or any sum standing to the credit of any reserve or fund of the Company (including any share premium account, capital redemption reserve, merger reserve or revaluation reserve);

(b)

appropriate the sum resolved to be capitalised to the members in proportion to the nominal amounts of the shares (whether or not fully paid) held by them respectively which would (or in the case of treasury shares, which would if such shares were not held as treasury shares) entitle them to participate in a distribution of that sum if the shares were fully paid and the sum were then distributable and were distributed by way of dividend and apply such sum on their behalf either in or towards paying up the amounts, if any, for the time being unpaid on any shares held by them respectively, or in paying up in full shares or debentures of the Company of a nominal amount equal to that sum, and allot such shares or debentures credited as fully paid to those members or as they may direct, in those proportions, or partly in one way and partly in the other, but the share premium account, the capital redemption reserve, and any profits which are not available for distribution may, for the purposes of this article, only be applied in paying up shares to be allotted to members credited as fully paid;

(c)

resolve that any shares so allotted to any member in respect of a holding by him of any partly paid shares shall so long as such shares remain partly paid rank for dividend only to the extent that the latter shares rank for dividend;

(d)

make such provision by the issue of fractional certificates or other fractional entitlements (or by ignoring fractions) or by payment in cash or otherwise as they think fit in the case of shares or debentures becoming distributable in fractions (including provision whereby the benefit of fractional entitlements accrues to the Company rather than to the members concerned);

(e)

authorise any person to enter on behalf of all the members concerned into an agreement with the Company providing for the allotment to them respectively, credited as fully paid, of any further shares to which they are entitled upon such capitalisation, any agreement made under such authority being binding on all such members; and

(f)

generally do all acts and things required to give effect to such resolution as aforesaid.

(2)

Where, pursuant to an employees' share scheme (within the meaning of section 1166 of the Companies Act 2006) the Company has granted options to subscribe for shares on terms which provide (inter alia) for adjustments to the subscription price payable on the exercise of such options or to the number of shares to be allotted upon such exercise in the event of any increase or reduction in or other reorganisation of the Company's issued share capital and an otherwise appropriate adjustment would result in the subscription price for any share being less than its nominal value, then the directors may, on the exercise of any of the options concerned and payment of the subscription price which would have applied had such adjustment been made, capitalise any such profits or other sum as is mentioned in paragraph (1)(a) above to the extent necessary to pay up the unpaid balance of the nominal value of the shares which fall to be allotted on the exercise of such options and apply such amount in paying up such balance and allot shares fully paid accordingly. The provisions of paragraphs (1)(a) to (f) above shall apply with the necessary alterations to this paragraph (but as if the authority of an ordinary resolution of the Company were not required).

RECORD DATES FOR PAYMENTS and issue

Company or directors may fix record dates for payments and issue

120.

Notwithstanding any other provision of these articles, but without prejudice to the rights attached to any shares, the Company or the directors may fix a date and time as the record date by reference to which persons registered as holders of shares or other securities shall be entitled to receipt of any dividend, distribution, allotment or issue, and that date may be before, on or after the date on which the dividend, distribution, allotment or issue is declared, paid or made, and where such a record date is fixed, references in these articles to a holder of shares or member to whom a dividend is to be paid or a distribution, allotment or issue is to be made shall be construed accordingly;

NOTICES AND OTHER COMMUNICATIONS

Requirements for writing

121.	Any notice to be given to or by any person pursuant to these articles shall be in writing other than a notice calling a meeting of the directors which need not be in writing.

Methods of sending or supplying

122.

(1)

Any notice, document or information may (without prejudice to articles 126 and 127) be sent or supplied by the Company to any member:

(a)

by hand, that is by any person (including a courier or process server) handing it to the member or leaving it at the member's registered address;

(b)

by sending it by post in a prepaid envelope addressed to the member at his registered address address;

(c)

by sending it in electronic form to a person who has agreed (generally or specifically) that the notice, document or information may be sent or supplied in that form (and has not revoked that agreement);

(d)

by making it available on a website, provided that the requirements in paragraph (2) of this article and the provisions of the Acts are satisfied;

(e)

through a relevant system; or

(f)

in some other way authorised in writing by the relevant member.

(2)

The requirements referred to in paragraph (1)(d) of this article are that:

(a)

the member has agreed (generally or specifically) that the notice, document or information may be sent or supplied to him by being made available on a website (and has not revoked that agreement), or the member has been asked by the Company to agree that the Company may send or supply notices, documents and information generally, or the notice, document or information in question, to him by making it available on a website and the Company has not received a response within the period of 28 days beginning on the date on which the Company's request was sent and the member is therefore taken to have so agreed (and has not revoked that agreement);

(b)

the member is sent a notification of the presence of the notice, document or information on a website, the address of that website, the place on that website where it may be accessed, and how it may be accessed ("notification of availability");

(c)

in the case of a notice of meeting, the notification of availability states that it concerns a notice of a company meeting, specifies the place, time and date of the meeting, and states whether it will be an annual general meeting; and

(d)

the notice, document or information continues to be published on that website, in the case of a notice of meeting, throughout the period beginning with the date of the notification of availability and ending with the conclusion of the meeting and in all other cases throughout the period specified by any applicable provision of the Acts, or, if no such period is specified, throughout the period of 28 days beginning with the date on which the notification of availability is sent to the member, save that if the notice, document or information is made available for part only of that period then failure to make it available throughout that period shall be disregarded where such failure is wholly attributable to circumstances which it would not be reasonable to have expected the Company to prevent or avoid.

(3)

In the case of joint holders:

(a)

it shall be sufficient for all notices, documents and other information to be sent or supplied to the joint holder whose name stands first in the register of members in respect of the joint holding only; and

(b)

the agreement of the joint holder whose name stands first in the register of members in respect of the joint holding that notices, documents and information may be sent or supplied in electronic form or by being made available on a website shall be binding on all the joint holders.

(4)

In the case of a member registered on a branch register, any notice, document or other information can be posted or despatched or in the country where the branch register is kept.

(5)

For the avoidance of doubt, the provisions of this article are subject to article 42.

(6)

The Company may at any time and at its sole discretion choose to send or supply notices, documents and information only in hard copy form to some or all members.

Deemed receipt of notice

123.	A member present either in person or by proxy at any meeting of the Company or of the holders of any class of shares shall be deemed to have received notice of the meeting and, where requisite, of the purposes for which it was called.

Company or directors may fix record dates for notices

124.	(1)	The Company or the directors may fix a date and time as the record date by reference to which persons registered as holders of shares or other securities shall be entitled to receive any notice or other document to be given to members and no change in the register after that time shall invalidate the giving of the notice or document, provided that in the case of a notice of general meeting or the annual accounts and reports of the Company, such record date shall be not more than sixty (60) days before the day the notice or document is sent.

	(2)	Every person who becomes entitled to a share shall be bound by any notice in respect of that share which, before his name is entered in the register of members, has been given to the person from whom he derives his title.

Notice when post not available

125.

Where, by reason of any suspension or curtailment of postal services, the Company is unable effectively to give notice of a general meeting, or meeting of the holders of any class of shares, the board may decide that the only persons to whom notice of the affected general meeting must be sent are: the directors; the Company's auditors; those members to whom notice to convene the general meeting can validly be sent by electronic means and those members to whom notification as to the availability of the notice of meeting on a website can validly be sent by electronic means. In any such case the Company shall also:

(a)

advertise the general meeting in at least two national daily newspapers published in the United States; and

(b)

send or supply a confirmatory copy of the notice to members in the same manner as it sends or supplies notices under article 123 if at least seven clear days before the meeting the posting of notices again becomes practicable.

Other notices and communications advertised in national newspaper

126.	Any notice, document or information to be sent or supplied by the Company to the members or any of them, not being a notice of a general meeting, shall be sufficiently sent or supplied if sent or supplied by advertisement in at least one national daily newspaper published in the United States.

When notice or other communication deemed to have been received

127.	Any notice, document or information sent or supplied by the Company to the members or any of them:

(a)

by hand, shall be deemed to have been received on the day it was handed to the member or left at the member's registered address;

(b)

by post, shall be deemed to have been received 24 hours after the time at which the envelope containing the notice, document or information was posted unless it was sent by second class post, or there is only one class of post, or it was sent by air mail to an address outside the United States, in which case it shall be deemed to have been received 48 hours after it was posted, and proof that the envelope was properly addressed, prepaid and posted shall be conclusive evidence that the notice, document or information was sent;

(c)

by electronic means, shall be deemed to have been received 24 hours after it was sent. Proof that a notice, document or information in electronic form was addressed to the electronic address provided by the member for the purpose of receiving communications from the Company shall be conclusive evidence that the notice, document or information was sent;

(d)

by making it available on a website, shall be deemed to have been received on the date on which notification of availability on the website is deemed to have been received in accordance with this article or, if later, the date on which it is first made available on the website;

(e)

by means of a relevant system , shall be deemed to have been received 24 hours after the Company or any sponsoring system-participant acting on the Company's behalf, sends the issuer-instruction relating to the notice, document or information;

(f)

by any other means specified in a written authorisation from the relevant member, shall be deemed to have been received when the Company has done what it was authorised to do by that member; and

(g)

by advertisement, shall be deemed to have been received on the day on which the advertisement appears.

Communications sent or supplied to persons entitled by transmission

128.

(1)

If a person who claims to be entitled to a share in consequence of the death or bankruptcy of a holder or otherwise by operation of law supplies to the Company:

(a)

such evidence as the directors may reasonably require to show his title to the share; and

(b)

an address at which notices, documents or information may be sent or supplied to such person,

then such a person shall be entitled to have sent or supplied to him at such address any notice, document or information to which the relevant holder would have been entitled if the death or bankruptcy or any other event giving rise to an entitlement to the share by law had not occurred.

(2)

Until a person entitled to the share has complied with article 128(1), any notice, document or information may be sent or supplied to the relevant holder in any manner authorised by these articles, as if the death or bankruptcy or any other event giving rise to an entitlement to the share by law had not occurred. This shall apply whether or not the Company has notice of the death or bankruptcy or other event.

Power to stop sending communications to untraced members

129.

If on three consecutive occasions notices, documents or information sent or supplied to a member have been returned undelivered, the member shall not be entitled to receive any subsequent notice, document or information until he has supplied to the Company (or its agent) a new registered address, or shall have informed the Company, in such manner as may be specified by the Company, of an electronic address. For the purposes of this article, references to notices, documents or information include references to a cheque or other instrument of payment; but nothing in this article shall entitle the Company to cease sending any cheque or other instrument of payment for any dividend, unless it is otherwise so entitled under these articles.

Validation of documents in electronic form

130.	Where a document is required under these articles to be signed by a member or any other person, if the document is in electronic form, then in order to be valid the document must:

(a)

incorporate the electronic signature, or personal identification details (which may be details previously allocated by the Company), of that member or other person, in such form as the directors may approve; or

(b)

be accompanied by such other evidence as the directors may require in order to be satisfied that the document is genuine.

The Company may designate mechanisms for validating any such document and a document not validated by the use of any such mechanisms shall be deemed as having not been received by the Company. In the case of any document or information relating to a meeting, an instrument of proxy or invitation to appoint a proxy, any validation requirements shall be specified in the relevant notice of meeting in accordance with articles 43 and 72.

BRANCH REGISTERS

Overseas branch registers

131.	The Company, or the directors on behalf of the Company, may cause to be kept in any territory an overseas branch register of members resident in such territory, and the directors may make, and vary, such arrangements as they may think fit in relation to the keeping of any such register.

ADMINISTRATION

Making and retention of minutes

132.	The directors shall cause minutes to be made, in books kept for the purpose of:

(a)

all appointments of officers made by the directors; and

(b)

all proceedings at meetings of the Company, of the holders of any class of shares in the Company, and of the directors, and of committees of the directors, including the names of the directors present at each such meeting.

Minutes shall be retained for at least ten years from the date of the appointment or meeting and shall be kept available for inspection in accordance with the Acts.

Inspection of accounts

133.	Except as provided by statute or by order of the court or authorised by the directors or an ordinary resolution of the Company, no person is entitled to inspect any of the Company's accounting or other records or documents merely by virtue of being a member.

Appointment of secretary

134.	The secretary shall be appointed by the directors for such term, at such remuneration and upon such other conditions as they think fit; and any secretary so appointed may be removed by them.

Use of the seal

135.

The seal shall be used only by the authority of a resolution of the directors or of a committee of the directors. The directors may determine whether any instrument to which the seal is affixed shall be signed and, if it is to be signed, who shall sign it. Unless otherwise determined by the directors:

(a)

share certificates and, subject to the provisions of any instrument constituting the same, certificates issued under the seal in respect of any debentures or other securities, need not be signed and any signature may be applied to any such certificate by any mechanical or other means or may be printed on it;

(b)

every other instrument to which the seal is affixed shall be signed by

(i)

two directors of the Company;

(ii)

one director and the secretary of the Company; or

(iii)

at least one authorised person in the presence of a witness who attests the signature.

For this purpose an authorised person is any director of the Company or the secretary of the Company, or any person authorised by the directors for the purpose of signing instruments to which the seal is affixed.

Official seal for use abroad

136.	The Company may have an official seal for use in accordance with the Acts. Such a seal shall be used only by the authority of a resolution of the directors or of a committee of the directors.

Destruction of documents

137.

(1)

The Company may destroy:

(a)

any instrument of transfer, after six years from the date on which it is registered;

(b)

any dividend mandate or notification of change of name or address, after two years from the date on which it is recorded;

(c)

any share certificate, after one year from the date on which it is cancelled; and

(d)

any other document on the basis of which an entry in the register of members is made, after six years from the date on which it is made.

(2)

Any document referred to in paragraph (1) of this article may be destroyed earlier than the relevant date authorised by that paragraph, provided that a copy of the document (whether made electronically, by microfilm, by digital imaging or by any other means) has been made which is not destroyed before that date.

(3)

It shall be conclusively presumed in favour of the Company that every entry in the register of members purporting to have been made on the basis of a document destroyed in accordance with this article was duly and properly made, that every instrument of transfer so destroyed was duly registered, that every share certificate so destroyed was duly cancelled, and that every other document so destroyed was valid and effective in accordance with the particulars in the records of the Company, provided that:

(a)

this article shall apply only to the destruction of a document in good faith and without notice of any claim (regardless of the parties to it) to which the document might be relevant;

(b)

nothing in this article shall be construed as imposing upon the Company any liability in respect of the destruction of any such document otherwise than in accordance with this article which would not attach to the Company in the absence of this article; and

(c)

references in this article to the destruction of any document include references to the disposal of it in any manner.

Change of name

138.	The Company may change its name by resolution of the directors.

WINDING UP

Winding up

139.

INDEMNITY

Power to indemnify directors

140.

(1)

Subject to paragraph (2) of this article, the Company:

(a)

may indemnify to any extent any person who is or was a director, or a director of any associated company, directly or indirectly (including by funding any expenditure incurred or to be incurred by him) against any loss or liability, whether in connection with any proven or alleged negligence, default, breach of duty or breach of trust by him or otherwise, in relation to the Company or any associated company;

(b)

may indemnify to any extent any person who is or was a director of an associated company that is a trustee of an occupational pension scheme, directly or indirectly (including by funding any expenditure incurred or to be incurred by him) against any liability incurred by him in connection with the company's activities as trustee of an occupational pension scheme; and

(c)

may purchase and maintain insurance for any person who is or was a director, or a director of any associated company, against any loss or liability or any expenditure he may incur, whether in connection with any proven or alleged negligence, default, breach of duty or breach of trust by him or otherwise, in relation to the Company or any associated company,

and for this purpose an associated company means any body corporate which is or was a subsidiary undertaking of the Company or in which the Company or any subsidiary undertaking of the Company is or was interested.

(2)

This article does not authorise any indemnity which would be prohibited or rendered void by any provision of the Acts or by any other provision of law.

Depositary interests other than dtc

141.	(1)	The directors shall, subject always to applicable law and the provisions of these articles, have power to implement or approve (or both) any arrangements which they may, in their absolute discretion, think fit in relation to (without limitation) the evidencing of title to and transfer of Depositary Interests or similar interests in shares.

	(2)	The directors may from time to time take such actions and do such things as they may, in their absolute discretion, think fit in relation to the operation of any such arrangements under paragraph (1) above including, without limitation, treating Depositary Interest Holders as if they were holders directly of the shares or interests in shares represented thereby for the purposes of compliance with any obligations imposed under these articles on members.

(3)

If and to the extent that the directors implement or approve (or both) any arrangements in relation to the evidencing of title to and transfer of Depositary Interests or similar interests in shares in accordance with paragraphs (1) and (2) above, the directors shall ensure that such arrangements provide (in so far as is practicable):

(a)

a Depositary Interest Holder with the same or equivalent rights as a member of the Company including, without limitation, in relation to the exercise of voting rights and provision of information; and

(b)

the Company and the directors with the same or equivalent powers as given under these articles in respect of a member of the Company, including, without limitation, the powers of the board of directors under article 42 so that such power may be exercised against a Depositary Interest Holder and the shares or interest in shares represented by such Depositary Interest or similar interest.

(4)

The provisions of paragraphs (1) to (3) shall not apply to any Depositary Interests held in a settlement system operated by DTC.

Exhibit 4.2

	Loan Agreement



	Arowana International Limited (ABN 83 103 472 751) ( Lender )

	VivoPower International Services Limited (Jersey Company Number 121017) ( Borrower )

Loan Agreement

Contents

1.	Definitions and Interpretation	2

2.	Loan	4

3.	Interest	4

4.	Repayment of Loan Balance and Interest	4

5.	Events of Default	4

6.	Use of the Loan	5

7.	Notices	5

8.	Governing law and jurisdiction	6

9.	Costs and Stamp Duty	7

Signing Page		8

Loan Agreement

Date	10 February 2016


Parties

Name	Arowana International Limited
ABN	83 103 472 751
Description	Lender
Notice details	Level 11, 153 Walker Street North Sydney NSW 2060 Australia Facsimile: +61 2 8083 9804
	Email: conorb@arowanaco.com
	Attention: Conor Byrne

Name	VivoPower International Services Limited
Jersey Company Number	121 017
Description	Borrower
Notice details	3 ^rd Floor, 37 Esplanade St Helier, Jersey JE2 3QA Facsimile:
	Email: Julie-anne.byrne@vivopower.com
	Attention: Julie-Anne Byrne


Background

A.	The Lender has agreed to loan the Principal Sum to the Borrower on the terms and conditions set out in this Agreement.

B.	This Agreement is intended to be legally binding and the parties agree to give effect to the arrangements contemplated by it.

Loan Agreement

Agreed Terms

1.	Definitions and Interpretation

1.1	Definitions

In this Agreement:

Act means the Corporations Act 2001 (Cth) as in force from time to time.

Agreement means this agreement and any schedules and annexures attached to this agreement, as amended by the parties in writing.

Business Day means a day on which banks are open for general banking business in Sydney, excluding Saturdays, Sundays or public holidays in Sydney.

Drawdown Date means 10 February 2016.

Event of Default means any of the events or circumstances described in clause 5.2.

Immediately Available Funds means cash, bank cheque or electronic funds transfer.

Interest Rate on any date for the determination of interest under this Agreement, means 6% p.a.

Government Agency means any government or governmental, semi governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity whether foreign, federal, state, territorial or local.

Loan means the advances made under clauses 2.1 and 2.2.

Loan Balance means the aggregate of all amounts advanced under clauses 2.1 and 2.2 and not yet repaid by the Borrower to the Lender.

Principal Sum means AU$450,000

Repayment Date means that date which is the last day of the Term, provided that in the event that such date is not a Business Day, the Repayment Date will be the last Business Day prior to that date.

Term means the period of 1 year commencing on the Drawdown Date.

1.2	Interpretation

In this Agreement headings are for convenience only and do not affect the interpretation of this Agreement and, unless the context otherwise requires:

(a)

words importing the singular include the plural and vice versa;

(b)

words importing a gender include any gender;

Loan Agreement

(c)

where a word or phrase is given a particular meaning, other parts of speech and grammatical forms of a word or phrase defined in this Agreement have a corresponding meaning;

(d)

an expression importing a natural person includes any individual, company, partnership, joint venture, association, corporation or other body corporate and any Government Agency;

(e)

no provision of this Agreement will be construed adversely to a party solely on the ground that the party was responsible for the preparation of this Agreement or that provision;

(f)

an agreement, representation or warranty on the part of or in favour of two or more persons binds or is for the benefit of them jointly and severally;

(g)

when the day on which something must be done is not a Business Day, that thing must be done on the following Business Day;

(h)

in determining the time of day where relevant to this Agreement, the relevant time of day is the time of day in the place where the party required to perform the obligation is located; and

(i)

a reference to:

(i)

any thing (including any right) includes a part of that thing but nothing in this clause Error! Reference source not found. implies that performance of part of an obligation constitutes performance of the obligation;

(ii)

a clause, party, annexure, exhibit or schedule is a reference to a clause of, and a party, annexure, exhibit and schedule to, this Agreement and a reference to this Agreement includes any annexure, exhibit and schedule;

(iii)

a statute, regulation, proclamation, ordinance or by law includes all statutes, regulations, proclamations, ordinances or by laws amending, consolidating or replacing it, and a reference to a statute includes all regulations, proclamations, ordinances and by laws issued under that statute;

(iv)

a document (including this Agreement) includes all amendments or supplements to, or replacements or novations of, that document;

(v)

a party to a document includes that party’s executors, administrators, successors, substitutes (including persons taking by novation) and permitted assigns;

(vi)

“including”, “for example” or “such as” when introducing an example, does not limit the meaning of the words to which the example relates to that example or examples of a similar kind;

(vii)

“law” includes legislation, the rules of the general law, including common law and equity, and any judgment order or decree, declaration or ruling of a court of competent jurisdiction or governmental agency binding on a person or the assets of that person; and

(viii)

a monetary amount is a reference to Australian dollars.

Loan Agreement

Loan

2.1	The Lender will advance the Principal Sum to the Borrower on the Drawdown Date in Immediately Available Funds.

2.2	The Lender may advance additional sums to the Borrower for time to time as evidenced by the signature of an authorised officer of the Borrower on a schedule of advances substantially in the format of Exhibit A, Schedule of Loan Advances, attached to this Agreement.

2.3	The Loan is unsecured.

3.	Interest

Interest will accrue on a daily basis and compound annually on the outstanding balance of the Loan Balance at the Interest Rate from, and including, the Drawdown Date to, and including, the date on which the Loan Balance is repaid in full.

4.	Repayment of Loan Balance and Interest

4.1	Subject to the provisions of clause 5, the Borrower must repay the Loan Balance and all accrued interest on the Repayment Date.

4.2	Nothing in this Agreement precludes the Borrower from repaying the Principal Sum, the Loan Balance, any accrued interest, or any portion of them earlier than required under this Agreement.

5.	Events of Default

5.1	If an Event of Default occurs, the Lender may declare part or all of the outstanding Loan Balance, and any accrued interest, due and payable within the period set out in a written notice to the Borrower and the Borrower must comply with the terms of that notice.

5.2	For the purposes of this Agreement, each of the following events will be an Event of Default:

(a)

Non-Payment : if the Borrower defaults in the due payment of any amount under this Agreement;

(b)

Insolvency Event : if in respect of the Borrower:

(i)

an application is made to a court for a winding up or bankruptcy order;

(ii)

the appointment of a provisional liquidator, administrator, receiver or similar officer;

(iii)

a receiver, receiver and manager, controller (as defined in the Act), a managing controller (as defined in the Act) is appointed to any part of the Borrower’s property;

Loan Agreement

(iv)

the Borrower enters into or takes any steps for the purpose of entering into any moratorium, composition, arrangement or similar agreement in respect of all or any of its debts with its creditors or any person; or

(v)

the Borrower is or states that it is unable to pay all of its debts as and when they fall due for payment.

(c)

Material Adverse Change : if any situation occurs which in the opinion of the Lender gives it grounds to believe that a material and adverse change in the business or financial condition of the Borrower has occurred or that the ability of the Borrower to perform its obligations under this Agreement has been or will be materially and adversely affected.

6.	Use of the Loan

The Borrower must only use Loan for the purposes of project investment, working capital purposes and to start its business as a holding company, as approved by the Borrower’s board of directors.

7.	Notices

7.1	Notices

(a)

Form of communication

Unless expressly stated otherwise in this Agreement any notice, certificate, consent, request, demand, approval, waiver or other communication ( Notice ) must be:

(i)

in legible writing and in English;

(ii)

signed by the sender (if an individual) or where the sender is a company, signed by an officer or in accordance with section 127 of the Act; and

(iii)

marked for the attention of and addressed to the addressee.

A Notice can be relied upon by the addressee and the addressee is not liable to any other person for any consequences of that reliance if the addressee believes it to be genuine, correct and authorised by the sender.

(b)

Delivery of Notices

Notices must be hand delivered or sent by prepaid express post (next day delivery), email or facsimile to the addressee’s address for notices specified in notice details in the Parties section of this Agreement or to any other address, email or facsimile number a party notifies to the other parties under this clause.

In this clause 7.1, reference to an addressee includes a reference to an addressee’s officers, agents or employees or any person reasonably believed by the sender to be an officer, agent or employee of the addressee.

(c)

When Notice is effective

Notices take effect from the time they are received or taken to be received under clause (d) below (whichever happens first) unless a later time is specified.

Loan Agreement

(d)

When Notice taken to be received

Notice is taken to be received by the addressee if by:

(i)

delivery in person, when delivered to the addressee;

(ii)

prepaid express post, on the second Business Day after the date of posting;

(iii)

post three Business Days from and including the date of postage; or

(iv)

subject to (e) below, facsimile transmission, at the time shown in the transmission report generated by the machine from which the facsimile was sent; and

(v)

subject to (e) below, electronic mail (e-mail), four hours after the sent time (as recorded on the sender’s e-mail server), unless the sender receives a notice from the recipient’s email server or internet service provider that the message has not been delivered to the recipient.

(e)

Legible Notices and receipt outside business hours

(i)

A facsimile transmission or e-mail is regarded as legibly received unless the addressee telephones the sender within twenty four hours after the transmission or e-mail is received or regarded as received under clause 7.1(d) and informs the sender that it is not legible.

(ii)

Despite clauses 7.1(c) and (d), if a Notice is received or taken to be received under this clause 7.1 after 4:00pm in the place of receipt or on a non-Business Day, it is taken to be received at 9:00am (recipient’s time) on the following Business Day and take effect from that time unless a later time is specified in the Notice.

7.2	A facsimile transmission is regarded as legible unless the addressee telephones the sender within 2 (two) hours after the transmission is received or regarded as received under clause 7.1(c) and informs the sender that it is not legible

7.3	In this clause 7, reference to an addressee includes a reference to an addressee’s officers, agents or employees or any person reasonably believed by the sender to be an officer, agent or employee of the addressee.

8.	Governing law and jurisdiction

(a)

This Agreement is governed by the laws of New South Wales.

(b)

Each party irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of New South Wales and any courts which have jurisdiction to hear appeals from any of those courts in respect of any proceedings in connection with this Agreement.

(c)

Each party waives any right it has to object to an action being brought in the courts of New South Wales including, without limitation, by claiming that the action has been brought in an inconvenient forum or that those courts do not have jurisdiction.

Loan Agreement

9.	Costs and Stamp Duty

(a)

Each party will pay their own costs in relation to the negotiation, finalisation and execution of this Agreement.

(b)

The Borrower must pay any stamp duty of and incidental to this Agreement.

Loan Agreement

Signing Page

Executed as an Agreement

SIGNED by Arowana International Limited (ABN 83 103 472 751) under delegated authority from the Board by its properly authorised Chief Financial And Operating Officer:

/s/ Conor Byrne

Signature of authorised signatory

Conor Byrne

Print Full Name of Signatory

SIGNED by VivoPower International Services Limited (Jersey Company Number 121 017) by two Directors or a Director and Secretary in accordance with s.127 of the Corporations Act 2001:

/s/ Philip Michael Broomhead

Signature of Director

Philip Michael Broomhead

Signature of Director/Secretary*

Print Full Name of Signatory

* Delete whichever does not apply

Loan Agreement

Exhibit A – Schedule of Loan Advances

Advance Date	Amount	Principal Balance	Interest (Cumulative)

Arowana International Limited

Dated this the ________ day of ____________ 2016

GG. Received and acknowledged by the Borrower, VivoPower International Services Limited

HH.

II. Signature of Authorised Representative

JJ.

KK. Name of Authorised Representative

LL.

MM. Title of Authorised Representative

Dated this the ________ day of ____________ 2016

Exhibit 4.3

Loan Agreement

Arowana International Limited (ABN 83 103 472 751)

( Lender )

VivoPower USA LLC

( Borrower )

Loan Agreement

Contents

1.	Definitions and Interpretation	2

2.	Loan	4

3.	Interest	4

4.	Repayment of PRINCIPAL and Interest	4

5.	Events of Default	4

6.	Limited Recourse	5

7.	Use of the Loan	5

8.	Undertakings of the Borrower	6

9.	Notices	7

10.	Governing law and jurisdiction	6

11.	Costs and Stamp Duty	7

Signing Page		8

Loan Agreement

Date	23 March 2016

Parties

Name	Arowana International Limited
ABN	83 103 472 751
Description	Lender
Notice details	Level 11, 153 Walker Street North Sydney NSW 2060 Australia Facsimile: +61 2 8083 9804
	Email: conorb@arowanaco.com
	Attention: Conor Byrne


Name	VivoPower USA LLC
ABN	N/A
Description	Borrower
Notice details	C/- Corporations Service Company 2711 Centerville Road, Suite 400 Wilmington, New Castle County Delaware 19808 United States of America Facsimile: N/A
	Email: David.pilotte@vivopower.com.au
	Attention: David Pilotte


Background

A.	The Lender has agreed to loan the Principal Sum to the Borrower on the terms and conditions set out in this Agreement.

B.	This Agreement is intended to be legally binding and the parties agree to give effect to the arrangements contemplated by it.

Loan Agreement

Agreed Terms

1.	Definitions and Interpretation

1.1

Definitions

In this Agreement:

Act means the Corporations Act 2001 (Cth) as in force from time to time.

Agreement means this agreement and any schedules and annexures attached to this agreement, as amended by the parties in writing.

Business Day means a day on which banks are open for general banking business in Sydney, excluding Saturdays, Sundays or public holidays in Sydney.

Drawdown Date means 24 March 2016.

Event of Default means any of the events or circumstances described in clause 5.2.

Immediately Available Funds means cash, bank cheque or electronic funds transfer.

Interest Rate on any date for the determination of interest under this Agreement, means 6% p.a.

Loan means the advances made under clauses 2.1 and 2.2.

Loan Balance means the aggregate of all amounts advanced under clauses 2.1 and 2.2 and not yet repaid by the Borrower to the Lender.

Principal Sum means AU$200,000.

Term means the period of 1 year commencing on the Drawdown Date.

1.2	Interpretation

In this Agreement headings are for convenience only and do not affect the interpretation of this Agreement and, unless the context otherwise requires:

(a)

words importing the singular include the plural and vice versa;

(b)

words importing a gender include any gender;

Loan Agreement

(c)

where a word or phrase is given a particular meaning, other parts of speech and grammatical forms of a word or phrase defined in this Agreement have a corresponding meaning;

(d)

an expression importing a natural person includes any individual, company, partnership, joint venture, association, corporation or other body corporate and any Government Agency;

(e)

no provision of this Agreement will be construed adversely to a party solely on the ground that the party was responsible for the preparation of this Agreement or that provision;

(f)

an agreement, representation or warranty on the part of or in favour of two or more persons binds or is for the benefit of them [jointly and severally];

(g)

when the day on which something must be done is not a Business Day, that thing must be done on the following Business Day;

(h)

in determining the time of day where relevant to this Agreement, the relevant time of day is the time of day in the place where the party required to perform the obligation is located; and

(i)

a reference to:

(i)

any thing (including any right) includes a part of that thing but nothing in this clause 1.2 implies that performance of part of an obligation constitutes performance of the obligation;

(ii)

(iii)

(iv)

a document (including this Agreement) includes all amendments or supplements to, or replacements or novations of, that document;

(v)

a party to a document includes that party’s executors, administrators, successors, substitutes (including persons taking by novation) and permitted assigns;

(vi)

“including”, “for example” or “such as” when introducing an example, does not limit the meaning of the words to which the example relates to that example or examples of a similar kind;

(vii)

Loan Agreement

(viii)

a monetary amount is a reference to Australian dollars.

Loan

2.1	The Lender will advance the Principal Sum to the Borrower on the Drawdown Date in Immediately Available Funds.

2.2	The Lender may advance additional sums to the Borrower for time to time as evidenced by the signature of an authorised officer of the Borrower on a schedule of advances substantially in the format of Exhibit A, Schedule of Loan Advances, attached to this Agreement.

2.3	The Loan is unsecured.

3.	Interest

4.	Repayment of Loan Balance and Interest

4.1	Subject to the provisions of clause 5, the Borrower must repay the Loan Balance and all accrued interest on the Repayment Date.

4.2	Nothing in this Agreement precludes the Borrower from repaying the Principal Sum, the Loan Balance, any accrued interest, or any portion of them earlier than required under this Agreement.

5.	Events of Default

5.1	If an Event of Default occurs, the Lender may declare part or all of the outstanding Loan Balance, and any accrued interest, due and payable within the period set out in a written notice to the Borrower and the Borrower must comply with the terms of that notice.

5.2	For the purposes of this Agreement, each of the following events will be an Event of Default:

(a)

Non-Payment : if the Borrower defaults in the due payment of any amount under this Agreement;

(b)

Insolvency Event : if in respect of the Borrower:

(i)

an application is made to a court for a winding up or bankruptcy order;

(ii)

the appointment of a provisional liquidator, administrator, receiver or similar officer;

(iii)

a receiver, receiver and manager, controller (as defined in the Act), a managing controller (as defined in the Act) is appointed to any part of the Borrower’s property;

Loan Agreement

(iv)

(v)

the Borrower is or states that it is unable to pay all of its debts as and when they fall due for payment.

(c)

6.	Use of the Loan

The Borrower must only use Loan for the purposes of project investment, working capital purposes and to start its business as a holding company, as approved by the Borrower’s board of directors.

7.	Notices

7.1	Notices

	(a)	Form of communication

		Unless expressly stated otherwise in this Agreement any notice, certificate, consent, request, demand, approval, waiver or other communication ( Notice ) must be:

(i)

in legible writing and in English;

(ii)

signed by the sender (if an individual) or where the sender is a company, signed by an officer or in accordance with section 127 of the Act; and

(iii)

marked for the attention of and addressed to the addressee.

		A Notice can be relied upon by the addressee and the addressee is not liable to any other person for any consequences of that reliance if the addressee believes it to be genuine, correct and authorised by the sender.

	(b)	Delivery of Notices

		Notices must be hand delivered or sent by prepaid express post (next day delivery), email or facsimile to the addressee’s address for notices specified in notice details in the Parties section of this Agreement or to any other address, email or facsimile number a party notifies to the other parties under this clause.

		In this clause 7.1, reference to an addressee includes a reference to an addressee’s officers, agents or employees or any person reasonably believed by the sender to be an officer, agent or employee of the addressee.

Loan Agreement

	(c)	When Notice is effective

		Notices take effect from the time they are received or taken to be received under clause (d) below (whichever happens first) unless a later time is specified.

	(d)	When Notice taken to be received

		Notice is taken to be received by the addressee if by:

(i)

delivery in person, when delivered to the addressee;

(ii)

prepaid express post, on the second Business Day after the date of posting;

(iii)

post three Business Days from and including the date of postage; or

(iv)

subject to (e) below, facsimile transmission, at the time shown in the transmission report generated by the machine from which the facsimile was sent; and

(v)

(e)

Legible Notices and receipt outside business hours

(i)

(ii)

7.2	A facsimile transmission is regarded as legible unless the addressee telephones the sender within 2 (two) hours after the transmission is received or regarded as received under clause 7.1(c) and informs the sender that it is not legible

7.3	In this clause 7, reference to an addressee includes a reference to an addressee’s officers, agents or employees or any person reasonably believed by the sender to be an officer, agent or employee of the addressee.

8.	Governing law and jurisdiction

(a)

This Agreement is governed by the laws of New South Wales.

(b)

Loan Agreement

(c)

9.	Costs and Stamp Duty

(a)

Each party will pay their own costs in relation to the negotiation, finalisation and execution of this Agreement.

(b)

The Borrower must pay any stamp duty of and incidental to this Agreement.

Loan Agreement

Signing Page

Executed as an Agreement

SIGNED by Arowana International Limited (ABN 83 103 472 751) by authorised delegation of the Board of Directors:

/s/ Conor Byrne

Signature of Chief Financial and Operating Officer

Conor M Byrne

Print Full Name of Signatory

SIGNED by VivoPower USA LLC by an authorised signatory of the Manager:

/s/ Gary Hui

Signature of Authorised individual

Gary Hui

Print Full Name of Signatory

Loan Agreement

Exhibit A – Schedule of Loan Advances

Advance Date	Amount	Principal Balance	Interest (Cumulative)

Arowana International Limited

Dated this the ________ day of ____________ 2016

II. Received and acknowledged by the Borrower, VivoPower USA LLC

*Signature of Authorised Representative*

*Name of Authorised Representative*

*Title of Authorised Representative*

Dated this the ________ day of ____________ 2016

Exhibit 10.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT

by and between

INNOVATIVE SOLAR SYSTEMS, LLC

and

IS-31 HOLDINGS, LLC

Dated as of June 14, 2016

Table of Contents

			Page

1.	PURCHASE AND SALE OF MEMBERSHIP INTERESTS; CLOSING DATE		1
	1.1	Purchase and Sale	1
	1.2	Purchase Price	1
	1.3	Payment Terms	2
	1.4	Time and Place of Closing	2
	1.5	Seller Closing Date Deliverables	2
	1.6	Assignment	4
	1.7	Further Assurances	4
2.	REPRESENTATIONS AND WARRANTIES OF SELLER		4
	2.1	Existence	4
	2.2	Sole Owner	4
	2.3	Due Execution	5
	2.4	Due Authorization	5
	2.5	Binding Effect	5
	2.6	No Conflicts; Consents	5
	2.7	Legal Proceedings	5
	2.8	No Undisclosed Liabilities	6
	2.9	Compliance with Laws	6
	2.10	Sophisticated Seller	6
	2.11	Documents; Disclosure	6
	2.12	Project Company Development Assets/ISS Project Development Assets	6
	2.13	Contracts	7
	2.14	Environmental Laws	8
	2.15	Permits	8
	2.16	Insurance	8
	2.17	Conflicts of Interest	8
	2.18	Employee Matters	9
	2.19	Interconnection	9
	2.20	Power Purchase Agreement	9
	2.21	Taxes	9

Table of Contents

(continued)

Page

	2.22	Real Property Interests	13
	2.23	Wetlands Jurisdictional Determination	13
	2.24	Capitalization; Subsidiaries	13
	2.25	Regulation	14
	2.26	Subsidiaries and Joint Ventures	15
	2.27	Intellectual Property	15
	2.28	Hazardous Substances	15
	2.29	Affiliate Transactions	15
	2.30	Bank Accounts	15
	2.31	No Brokers	15
	2.32	Full Disclosure	15
3.	REPRESENTATIONS AND WARRANTIES OF BUYER		16
	3.1	Organization; Authority	16
	3.2	Binding Effect	16
	3.3	Absence of Conflicting Agreements	16
4.	CONDITIONS TO CLOSING AND PRE- AND POST-CLOSING COVENANTS		16
	4.1	Conditions to Obligations of Buyer	16
	4.2	Conditions to Obligations of Seller	17
	4.3	Other Actions to be Taken at or after the Closing Date	17
	4.4	Project Company Pre-Closing Liabilities	18
	4.5	Tax Covenants	18
	4.6	Pre-Closing Access	19
	4.7	Achievement of Closing	20
5.	INDEMNIFICATION		20
	5.1	Survival of Representations and Warranties	20
	5.2	Indemnification By Seller	20
	5.3	Indemnification By Buyer	21

Table of Contents

(continued)

Page

	5.4	Indemnification by Seller Related to Taxes	21
6.	TERMINATION		21
	6.1	Termination	21
	6.2	Force Majeure	21
	6.3	Extension of Final Date	21
	6.4	Third Party Sale	22
	6.5	Effect of Termination	22
7.	MISCELLANEOUS		22
	7.1	Notices	22
	7.2	Execution in Counterparts	23
	7.3	Entire Agreement	23
	7.4	Amendment	23
	7.5	Assignment	23
	7.6	Headings	24
	7.7	Governing Law	24
	7.8	Binding Effect	24
	7.9	Waiver	24
	7.10	Enforceability	24
	7.11	License for Access and Data Room	24
	7.12	Due Diligence	24
	7.13	Zoning	24
	7.14	Copies of Specified Agreements	25
	7.15	Exclusivity	25
	7.16	Expenses	25
	7.17	Confidentiality	25
	7.18	Public Announcement	25
	7.19	Other Agreements	26
	7.20	Interpretation	26

Table of Contents

(continued)

Page

7.21

Definitions

EXHIBITS

Exhibit A

Wire Instructions

Exhibit B

Form of Transfer and Assignment Agreement

Exhibit C

Form of Bill of Sale and Assignment Agreement for ISS Project Development Assets

Exhibit D-1

Form of Seller Manager’s Certificate

Exhibit D-2

Form of the Project Company Manager’s Certificate

Exhibit E

Form of Buyer Manager’s Certificate

SCHEDULES

Schedule 2.6

Conflicts; Consents

Schedule 2.8

Liabilities

Schedule 2.12(a)

Project Company Development Assets

Schedule 2.12(b)

ISS Project Development Assets

Schedule 2.13

Material Contracts

Schedule 2.15(a)

Obtained Permits

Schedule 2.15(b)

Permits to be Obtained

Schedule 2.16

Insurance

Schedule 2.22

Project Real Property

Schedule 2.24

Membership Interests

Schedule 2.29

Affiliate Transactions

Schedule 2.30

Bank Accounts

Schedule 7.14

Specified Agreements

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “ Agreement ”), dated as of June 14, 2016 (the “ Effective Date ”), is entered into by and between:

(1)	Innovative Solar Systems, LLC, a North Carolina limited liability company with an office at 171 Rolling Meadows Road, Fletcher, NC, 28732 (“ Seller ”); and

(2)	IS-31 Holdings, LLC, a Delaware limited liability company with an address at 3824 Cedar Springs Rd #801-1299, Dallas TX 75219 (“ Buyer ” and, together with Seller, each a “ Party ” and collectively the “ Parties ”).

WHEREAS , Seller owns all right, title and interest in 100% of the issued and outstanding limited liability company membership interests of Innovative Solar 31, LLC, a North Carolina limited liability company (the “ Project Company ”) (collectively, the “ Membership Interests ”);

WHEREAS , the Project Company is developing a 34.2 MW (AC) solar photovoltaic project in Bladen County, North Carolina that is referred to as the IS31 Project (the “ Project ”);

WHEREAS , Seller wishes to sell, assign and transfer to Buyer 100% of the Membership Interests in exchange for the Purchase Price (as defined below), and Buyer has agreed to accept such sale, assignment and transfer of the Membership Interests and to pay the Purchase Price therefore, in accordance with the payment terms set forth in Section 1.3 and subject to the conditions of this Agreement;

NOW, THEREFORE , in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

1. PURCHASE AND SALE OF MEMBERSHIP INTERESTS; CLOSING DATE

1.1 Purchase and Sale . On the basis of the representations, warranties, covenants and agreements herein, on the Closing Date (as defined below), Seller shall sell and transfer to Buyer the Membership Interests, free and clear of any and all Encumbrances of any kind, nature or description, and Buyer shall purchase from Seller the Membership Interests by payment of the Purchase Price in accordance with the payment terms set forth in Section 1.3.

1.2 Purchase Price . The purchase price to be paid by Buyer to Seller in consideration of the sale of the Membership Interests is Two Million Fifty-Two Thousand Dollars ($2,052,000.00) (the “ Purchase Price ”). The Purchase Price shall consist of the following payments: (i) the Previously Paid Payments, which have been paid as provided in Section 1.3(a), and (ii) the Closing Payment, which shall be paid by Buyer by wire transfer of immediately available funds pursuant to the wire instructions set forth on Exhibit A , or to such bank account designated by Seller by written notice to Buyer, containing all necessary wire transfer information, not less than three (3) days prior to the applicable date for payment.

1.3 Payment Terms . The Purchase Price has been paid or will be paid by Buyer to Seller as follows:

Previously Paid Payments . Seller agrees to credit towards the Purchase Price an amount equal to a Two Hundred Fifty Thousand Dollar ($250,000.00) non-refundable cash deposit (the “ Deposit ”) paid to Seller on August 24, 2015. Additionally, Seller agrees to credit towards the Purchase Price an amount equal to One Hundred Twenty-Five Thousand Dollars ($125,000.00), which constitutes a portion of a deposit previously paid to Seller in respect of the project known as IS-33, but which Buyer and Seller have agreed to apply toward the Project (the “ Credit ”, and together with the Deposit, the “ Previously Paid Payments ”).

Closing Payment . At the Closing, Buyer shall pay to Seller an amount equal to the difference of (i) One Million Six Hundred Seventy-Seven Thousand Dollars ($1,677,000.00) less (ii) the amount of the Extension Credit determined in accordance with Section 6.3 (such difference, the “ Closing Payment ”).

1.4 Time and Place of Closing . The closing of the transactions contemplated herein (the “ Closing ”) shall take place remotely on a date no later than two (2) business days after the satisfaction or waiver by Buyer in writing of all the conditions set forth in Section 4.1 (other than conditions which, by their nature, are to be satisfied on the Closing Date) or on such other date as the Parties may mutually agree upon in writing. The applicable date on which the Closing shall occur pursuant to this Section 1.4 is referred to in this Agreement as the “ Closing Date ”, and the Closing shall be deemed effective as of 12:01 a.m. Eastern Time on the Closing Date.

1.5 Seller Closing Date Deliverables . On the Closing Date, Seller shall deliver to Buyer the following:

a transfer and assignment instrument evidencing the transfer to Buyer of the Membership Interests, in the form attached to this Agreement as Exhibit B ;

a certificate of good standing (or equivalent document) for the Project Company from the state of its formation dated within five (5) business days prior to the Closing Date;

a manager’s certificate from each of Seller and the Project Company, in the form attached to this Agreement as Exhibit D-1 and Exhibit D-2 , respectively, dated as of the Closing Date (x) certifying and attaching copies of (i) the certificate of formation or articles of organization, as applicable, of each of Seller and the Project Company, (ii) the operating agreement of each of Seller and the Project Company, and (iii) the resolutions duly adopted by the respective board of managers (or its equivalent governing body) of each of Seller and the Project Company authorizing the execution, delivery and performance of this Agreement and the other agreements contemplated hereby, and the consummation of the transactions contemplated hereby and thereby and (y) in the case of the manager’s certificate from Seller, certifying that the condition set forth in Section 4.1(b) has been fulfilled and that all deliverables under Sections 7.12, 7.13 and 7.14 have been provided to Buyer;

copies of all Books and Records of the Project Company (including books of account) and all Contracts entered into by or on behalf of the Project Company and all originals of the same in the possession of Seller;

an updated pro forma leasehold title policy with approved endorsements and a title commitment to the satisfaction of Buyer for each of the Premises (as defined, as applicable, in each of (i) the Lease between the Project Company and William R. Storms, unremarried widower of Shelby H. Storms (“ Storms Landlord ”), dated October 20, 2015, as amended by the Amendment of Lease, dated January 22, 2016 and as further amended in accordance with Section 1.5(i)(i), and (ii) the Lease between the Project Company and Boyce Gerald White, Jr. and wife Katherine S. White (“ White Landlord ”, and together with Storms Landlord, the “ Landlords ”), dated November 7, 2013, as amended by the Amendment of Lease, dated January 25, 2016 and as further amended in accordance with Section 1.5(i)(i) (each a “ Lease ”, and together the “ Leases ”) in the name of the Project Company with endorsements satisfactory to Buyer (the “ Title Policy ”);

an updated ALTA survey of each of the Premises, in a form reasonably satisfactory to Buyer, that comports with the Title Policy and is certified to the title company that issues the Title Policy and the Project Company;

copies of all verifications of appropriate zoning classification from all relevant city and county agencies having jurisdiction over the Premises;

(x) an environmental impact assessment report with respect to the Project (i) with an effective date no earlier than six (6) months prior to the Closing Date (such report to be updated as necessary, at Buyer’s expense, to fulfill this condition) and (ii) satisfying the requirements of 40 C.F.R. pt. 312 for conducting “all appropriate inquiries” under Sections 101(35)(B)(i)(I) and (B)(ii)-(iii) of CERCLA and any other components necessary for Buyer to obtain “bona fide prospective purchaser” liability protection pursuant to Sections 101(40) and 107(r) of CERCLA and (y) a reliance letter addressed to Buyer with respect thereto, in form and substance reasonably satisfactory to Buyer;

the following documents from each of the Landlords, in each instance in form and substance reasonably satisfactory to Buyer:

an amendment to the applicable Lease and corresponding amendment to the applicable memorandum of Lease; and

ii.

an estoppel certificate.

a wetlands delineation survey report performed in accordance with the rules and regulations of the United States Army Corps of Engineers;

a certificate, dated as of the Closing Date, under Section 1445(b)(2) of the Code (a Foreign Investment in Real Property Tax Act certificate), certifying that Seller (or the first upstream regarded owner of Seller for U.S. federal income tax purposes in the event Seller is classified as a disregarded entity for U.S. federal income tax purposes) is not a foreign person;

a bill of sale and assignment agreement, in the form attached hereto as Exhibit C , assigning the ISS Project Development Assets to the Project Company (the “ ISS Bill of Sale and Assignment Agreement ”), duly executed by Seller; and

letters of resignation (which include releases of the Project Company from Liability) of the officers, directors and managers of the Project Company from all positions held with the Project Company, effective as of the Closing.

1.6 Assignment . Subject to the terms and conditions set forth herein, on the Closing Date, pursuant to the ISS Bill of Sale and Assignment Agreement, Seller shall assign to the Project Company all of Seller’s rights, title and interests in, to and under all of the assets, properties and rights of every kind and nature, whether real, personal or mixed, tangible or intangible, wherever located and whether now existing or hereafter acquired, which relate to, or are used or held for use in connection with, the Project, including, without limitation, all of Seller’s right, title and interest in, to and under originals, or where not available, copies, of all Books and Records (collectively, the “ ISS Project Development Assets ”). Notwithstanding the foregoing, in no event shall the Project Company assume any Liabilities to or arising from the ISS Project Development Assets.

1.7 Further Assurances . Following the Closing, Buyer and Seller shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder. For Seller that will include, at its sole expense, transferring, or causing an affiliate to transfer, the ownership of any of the assets, properties and rights that relate to the ISS Project Development Assets that for any reason did not transfer to the Project Company at the Closing, and obtaining or confirming, in writing in form and substance reasonably acceptable to Buyer, from any applicable vendor related to any ISS Project Development Asset the right of Buyer to rely on and use such ISS Project Development Asset (and any related work product therefrom) for its purposes in connection with the Project.

2. REPRESENTATIONS AND WARRANTIES OF SELLER . Seller hereby represents and warrants to Buyer that the following representations are true, correct and complete with respect to Seller and the Project Company, as applicable, as of the date hereof, and as of the Closing Date, except as otherwise indicated.

2.1 Existence . Each of Seller and the Project Company is a limited liability company duly organized, validly existing and in good standing under the laws of the state of North Carolina.

2.2 Sole Owner . Seller is the sole record and beneficial owner of 100% of the issued and outstanding membership interests of the Project Company and has good and marketable title thereto, free and clear of any and all liabilities, liens, security interests, pledges, restrictions on transfer, claims, charges or other encumbrances or equities of any kind, nature, or description (collectively, the “ Encumbrances ”). Upon delivery of and payment for the Membership Interests, Buyer shall acquire valid and un-encumbered title to the Membership Interests in the Project Company.

2.3 Due Execution . This Agreement has been duly executed by Seller and the execution, delivery and performance of this Agreement by Seller will not violate, or result in a breach of, or constitute a default under, any agreement, instrument, judgment, order or decree to which Seller is a party or to which Seller may be subject, nor will such execution, delivery or performance constitute a violation of or conflict with any fiduciary duty to which Seller is subject.

2.4 Due Authorization . Seller has the full right, power, authority and capacity to enter into and perform its obligations under this Agreement and to convey and assign to Buyer the Membership Interests, without any other or further authorization, action or proceeding.

2.5 Binding Effect . This Agreement when executed and delivered by Seller will constitute the valid and legally binding obligation of Seller, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

2.6 No Conflicts; Consents . Except as set forth on Part A of Schedule 2.6 , the purchase of the Membership Interests and the execution, delivery and performance by Seller of this Agreement and the documents to be delivered by Seller hereunder and thereunder, and the consummation of the transactions contemplated hereby and thereby, do not and will not (with or without notice or lapse of time or both): (a) violate or conflict with the certificate of incorporation, by-laws or other organizational documents of Seller; (b) violate or conflict with any Law applicable to Seller; (c) conflict with, or result in any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any Contract or other instrument to which Seller is a party or to which the Project Company Development Assets are subject; or (d) result in the creation or imposition of any Encumbrances on any of the Project Company Development Assets. Except as set forth on Part B of Schedule 2.6 , no consent, approval, waiver, notice or authorization is required to be made or obtained by Seller from any Person or entity (including any Governmental Authority) in connection with the purchase of the Membership Interests and the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby and thereby.

2.7 Legal Proceedings . There is no Action of any nature pending or threatened against or by Seller relating to or affecting the Project or the Project Company Development Assets or that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. There are no outstanding judgments, injunctions, orders or rulings relating to or affecting the Project Company Development Assets. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action. There are no outstanding judgments, injunctions, orders or rulings relating to or affecting the Project Company Development Assets.

2.8 No Undisclosed Liabilities . The Project Company does not have any Liabilities except for those set forth in Schedule 2.8 .

2.9 Compliance with Laws . The Project Company and Seller have complied with all laws applicable to the Project Company or Seller or the operation of their respective businesses, except to the extent any such non-compliance would not, individually or in the aggregate, have a material adverse effect on Seller, or the Project Company.

2.10 Sophisticated Seller . Seller (a) is a sophisticated individual or entity familiar with transactions similar to those contemplated by this Agreement; (b) has adequate information concerning the business and financial condition of the Project Company to make an informed decision regarding the sale of the Membership Interests held by Seller; and (c) has independently and without reliance upon Buyer, and based on such information and the advice of such advisors as Seller has deemed appropriate, made its own analysis and decision to enter into this Agreement. Seller acknowledges that neither Buyer nor its affiliates is acting as a fiduciary or financial or investment adviser to Seller, and has not given Seller any investment advice, opinion or other information on whether the sale of the Membership Interests held by Seller is prudent. Seller acknowledges that (i) Buyer currently may have, and later may come into possession of, information with respect to the Project Company that is not known to Seller and that may be material to a decision to sell the Membership Interests held by Seller (“ Seller Excluded Information ”); (ii) Seller has determined to sell all the Membership Interests held by Seller notwithstanding its lack of knowledge of Seller Excluded Information; and (iii) Buyer shall not have any liability to Seller, and Seller waives and releases any claims that it might have against Buyer whether under applicable securities laws or otherwise, with respect to the nondisclosure of Seller Excluded Information in connection with the sale of the Membership Interests held by Seller and the transactions contemplated by this Agreement. Seller understands that Buyer will rely on the accuracy and truth of the foregoing representations, and Seller hereby consents to such reliance. Seller understands that the value of the Membership Interests being sold by it hereunder may appreciate in value in the future (including in the immediate future) and that upon, and by virtue of, its sale of the Membership Interests being sold by it hereunder, Seller will be precluded from sharing or benefiting from any such appreciation.

2.11 Documents; Disclosure . Copies of all documents relating to the Project Company delivered to Buyer (such documents, collectively the “ Project Company Documents ”) are true and complete in all respects, and other than the Project Company Documents, there are no agreements or instruments that govern any interest in the Membership Interests.

2.12 Project Company Development Assets/ISS Project Development Assets.

Schedule 2.12(a) sets forth a true, correct and complete list of all assets of the Project Company, including those related to, associated with or concerning the Project or either of the Premises (collectively, the “ Project Company Development Assets ”). The Project Company has good and marketable title to all of the Project Company Development Assets. All Project Company Development Assets are free and clear of any and all Encumbrances and other rights of third parties. Other than the Project Company Development Assets and the ISS Project Development Assets, there are no other assets that are held by Seller, the Project Company, any affiliate of Seller or any other Person necessary for the Project Company to fulfill its obligations under the Interconnection Agreement and the PPA. The Project Company Development Assets (i) have been maintained in accordance with prudent industry practices for similar assets, (ii) are in good operating condition and repair, ordinary wear and tear excepted (to the extent tangible), and (iii) are suitable for the purposes for which they are employed.

Schedule 2.12(b) sets forth a true, correct and complete list of all ISS Project Development Assets. Seller has good and marketable title to all of the ISS Project Development Assets. All ISS Project Development Assets are free and clear of any and all Encumbrances and other rights of third parties.

2.13 Contracts . Schedule 2.13 contains a true, correct and complete list of all contracts, agreements, arrangements, letters of intent, memoranda of understanding, promises, obligations, rights, purchase orders, leases, licenses or similar understandings, whether written or oral (each, a “ Contract ”) to which the Project Company is a party or that relate to, are associated with or concern, or will relate to, be associated with or concern, the Project, the Project Company or the Project Company Development Assets (the “ Material Contracts ”). Each Material Contract has been duly authorized and executed by the parties thereto, has been delivered by Seller to Buyer, is in full force and effect, and constitutes a legal, valid, binding and enforceable agreement as to the Project Company and to the respective counterparties thereto, and will not be rendered invalid or unenforceable or in breach or default as a result of the transactions contemplated by this Agreement. Neither the Project Company nor any other Person (a) is in breach of or in default under any Material Contract, (b) except for amendments to the Leases in accordance with Section 1.5(i)(i) of to this Agreement, has indicated its intention to amend or terminate any Material Contract, or (c) has made any claims against, or sought any indemnification as to any matter arising under or with respect to any Material Contract. No event has occurred which with the passage of time or giving of notice or both would constitute such a default, result in a loss of rights or permit termination, modification or acceleration under, or result in the creation of any Encumbrance under any Material Contract. Seller has made available to Buyer true, correct and complete copies of all Material Contracts and any amendments thereto. Other than the Material Contracts, there are no Contracts relating to, associated with or concerning the Project or the Project Company Development Assets. Neither Seller nor Project Company is a party to any agreement with any other third party related to the Project, directly or indirectly, that is not considered or listed herein as a Material Contract, which is in default or with the passage of time or giving of notice or both would be in default, or which has been terminated because of a default.

2.14 Environmental Laws . To Seller’s Knowledge, Seller and the Project Company have complied and are in compliance with all Environmental Laws affecting the Project Company and its respective assets, including the Project Company Development Assets. No Action has been filed, commenced or threatened against Seller or the Project Company alleging any failure of Seller or the Project Company to comply with any applicable Environmental Law. To Seller’s Knowledge, each of the Premises is in compliance with all Environmental Laws. All environmental investigations, reports, studies, audits, tests, reviews sampling, or other analyses conducted in relation to each of the Premises, to the extent commissioned by or in the possession of Seller or the Project Company or anyone under either of their control, have been delivered to Buyer. Seller has made available to Buyer copies of all other material documents and records in its or the Project Company’s possession or control concerning any condition of the environment with respect to each of the Premises. To Seller’s Knowledge, there are no conditions, facts or circumstances that could result in the imposition of Liabilities under, or noncompliance with, any Environmental Laws at either of the Premises or by Seller or the Project Company. Neither Seller nor the Project Company has agreed to assume, undertake, or provide indemnification for any liability of any other Person under any Environmental Law for environmental matters or conditions.

2.15 Permits . All permits, licenses or other governmental approvals (collectively, whether obtained or pending, referred to herein as “ Permits ”) related to, associated with or concerning the Project or either of the Premises that have been obtained by the Project Company are set forth on Schedule 2.15(a) . The Project Company owns or validly holds (and is in material compliance with) the Permits, and each such Permit is valid, binding and in full force and effect and has not been appealed, terminated, revoked or modified and all time limits for filing appeals have run. No notice of noncompliance or default has been received by either Seller or the Project Company, and the Project Company is not in material default (or with the giving of notice or lapse of time or both, would be in material default) under any such Permit, and no information has been received by either Seller or the Project Company that could reasonably be expected to prevent Buyer from maintaining any such Permit. To Seller’s Knowledge, all Permits that are necessary for the Project Company to construct, operate, own and maintain the Project (other than the Permits set forth on Schedule 2.15(a) ) are set forth on Schedule 2.15(b) . To Seller’s Knowledge, no facts or circumstances exist that reasonably could be expected to hinder, delay or restrict the ability of the Project Company to obtain any Permits set forth on Schedule 2.15(b) in the normal course without unreasonable delay or expense. Seller has previously delivered to Buyer (a) a true and correct copy of each Permit set forth on Schedule 2.15(a) , (b) all material documents, reports and correspondence provided by the Project Company to any Governmental Authority with respect to any Permit, and (c) all material documents, reports and correspondence received by the Project Company from any Governmental Authority with respect to any Permit.

2.16 Insurance . Schedule 2.16 sets forth a list of all insurance policies carried by or for the benefit of the Project Company. Such insurance policies are in full force and effect. All premiums with respect to such insurance policies have been paid in full. The insurance coverage provided by any of the policies described in this Section 2.16 will not terminate or lapse by reason of the transactions contemplated by this Agreement.

2.17 Conflicts of Interest . Neither Seller, any of its affiliates nor its or their members, managers, officers or directors has, either directly or indirectly, (a) an equity or debt interest in any corporation, limited liability company, partnership, joint venture, association, organization or other Person that furnishes or sells services or products to the Project Company, or otherwise does business with the Project Company; or (b) a material beneficial interest in or will derive any material financial gain from any Contract to which the Project Company is a party or under which the Project Company is obligated or bound or to which any of its assets may be subject other than this Agreement.

2.18 Employee Matters . The Project Company does not employ and has never employed any employees. The Project Company has no Liabilities with respect to any employees of any of its affiliates or any other individuals (including independent contractors, contract workers, leased employees or temporary employees) that have performed work at or in connection with the Project or in connection with the business of the Project Company. The Project Company does not sponsor, maintain, contribute to or have any obligation to contribute to, and since the date of its creation has never sponsored, maintained, contributed to or had any obligation to contribute to, any employee benefit plan. There does not now exist nor do any circumstances exist that could be expected to result in, any Liability of the Project Company with respect to any employee benefit plan sponsored, maintained, contributed to or required to be contributed to by any affiliate of the Project Company.

2.19 Interconnection . The Project Company has obtained approval to interconnect the Project pursuant to the Interconnection Agreement, which is in full force and effect. The Interconnection Agreement is a Final Interconnection Agreement, as that term is defined in the North Carolina State-Jurisdictional Interconnection Procedures. The Project Company has complied in all respects with the North Carolina State-Jurisdictional Interconnection Procedures, including but not limited to (a) completing all obligations imposed by the interconnecting utility under the Section 1.1.3 queue management process; and (b) obtaining all required studies by the interconnecting utility under the Section 4 Study Process necessary to evaluate the Project’s impact to the utility system and the cost of interconnection facilities and any upgrades required for the utility to safely and reliably interconnect and operate in parallel with the Project. The Project Company is in full compliance with all payment obligations (through payments made on its behalf by Buyer or its Affiliate) and Project interconnection milestones specified in the Interconnection Agreement. The Interconnection Agreement provides for the delivery, to the point of interconnection specified therein, of all of the Project’s electrical output, and complies with or is not in contravention of the PPA.

2.20 Power Purchase Agreement . The Project Company has entered into the PPA, which is in full force and effect, and is in full compliance with all payment obligations (through payments made on its behalf by Buyer or its Affiliate), milestones and other covenants therein.

2.21 Taxes .

The Project Company, Seller and their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company) have timely filed all required Tax Returns that were due on or before the Closing Date. All such Tax Returns are true, correct and complete and all Taxes that are shown to be due on such Tax Returns and all other Taxes whether or not shown as due on such Tax Returns (including estimated Tax payments) that are due and owing have been paid in full. Project Company has timely complied with all applicable laws relating to the payment, collection or withholding of any Tax and the reporting and remittance thereof to any and all governmental authority or taxing authority.

There have been, and as of the Closing Date are, no (i) examinations, audits or other proceedings previously pending, currently pending or threatened against the Project Company, Seller, or any of their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company) by any Governmental Authority or taxing authority for the assessment or collection of Taxes, (ii) claims for assessment or collection of Taxes that have been asserted in writing against the Project Company, Seller or any of their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company), or (iii) matters under discussion with any governmental authority or taxing authority regarding claims for assessment or collection of Taxes against any of the Project Company, Seller or any of their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company). There are no liens for Taxes upon the Membership Interests, any other direct or indirect interest in the Project Company or any of the Project Company Development Assets.

The Project Company, Seller and their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company) do not have in force any indemnity or other agreement with respect to Taxes, any waiver or extension of any statute of limitations in respect of Taxes or any extension of time with respect to a Tax Return, Tax assessment or Tax deficiency, and, no such indemnity, waiver or extension has been requested from the Project Company or Seller, or any of their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company). Neither the Project Company, Seller nor any of their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company) (A) is a party to or has any liability under any Tax sharing or Tax indemnification agreement or (B) has any tax liability for Taxes of any other Person under Treasury Regulation section 1.1502-6 (or any similar provision of state, local or non-U.S. law), as a transferee or successor, by Contract, or otherwise.

Neither the Project Company nor Seller nor any of their respective affiliates has filed an election to treat the Project Company as a corporation for federal, state or local income Tax purposes. The Project Company is, and at all times since its organization has been, classified as “disregarded as an entity separate from its owner,” Seller, for federal income Tax purposes within the meaning of Treasury Regulation section 301.7701-2(c)(2)(i), and for state and local income Tax purposes, and neither the Project Company nor Seller nor any of their respective affiliates has received a written notice from any Governmental Authority or taxing authority challenging the Project Company’s classification as a disregarded entity.

The Project Company, Seller and their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company) have withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, member, vendor, supplier or other third party.

No federal income Tax credit or grant in lieu of any such credit or any similar credit or grant under state or local law has been claimed by the Project Company, Seller or any of their respective affiliates or direct or indirect partners, shareholders or members with respect to the Project or the Project Company Development Assets or ISS Project Development Assets. To Seller’s Knowledge, there are no facts that would cause the Project to be incapable of qualifying for, and producing or giving rise to, the federal investment Tax credit pursuant to Section 48 of the Code with continued reasonable and diligent effort, and to Seller’s Knowledge, no facts or circumstances exist that reasonably could be expected to hinder, impair, restrict, limit or disqualify the Project or the applicable Project Company Development Assets or ISS Project Development Assets from qualifying for, and producing and giving rise to, the federal investment income Tax credit pursuant to Section 48 of the Code.

No power of attorney is currently in effect, and no Tax ruling has been requested of any Governmental Authority or taxing authority with respect to any Tax matter, relating to the Project Company, the Project, the Project Company Development Assets or the ISS Project Development Assets.

The Project Company and Seller, including their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company), have not received any written notice of any special assessments, levies or Taxes imposed or to be imposed affecting the Project, the Project Company, any of the Project Company Development Assets or any of the ISS Project Development Assets.

None of the Project Company, Seller or any of their respective affiliates or direct or indirect partners, shareholders or members (a) has reported or will report any of the Project Company Development Assets or ISS Project Development Assets as having been “placed in service” prior to the Closing Date for federal income Tax purposes or (b) has taken or will take (or has caused to be taken or will cause to be taken) any actions that would cause the Project Company Development Assets or ISS Project Development Assets to be treated as having been “placed in service” prior to the Closing Date for federal income Tax purposes.

No portion of the Project Company Development Assets or ISS Project Development Assets have benefited from the proceeds of any federal or state grant or rebate program that would cause a reduction in the amount of the investment tax credit under Section 48 of the Code, and no application with respect to any such grant or rebate has been filed or submitted. No portion of the basis of any Project Company Development Asset or ISS Project Development Asset is attributable to “qualified rehabilitation expenditures” within the meaning of Section 47(c)(2)(A) of the Code. No proceeds of any issue of state or local government obligations have been used to provide financing for the Project the interest on which is exempt from Tax under Code Section 103. To Seller’s Knowledge, none of the Project Company Development Assets or ISS Project Development Assets are treated as leased to or owned by a tax-exempt entity (within the meaning of Section 168(h)(2) of the Code) or otherwise constitute “tax-exempt use property” within the meaning of Section 168(h) of the Code. The Project is not comprised of any property that is imported property of the kind described in Section 168(g)(6) of the Code to which Section 168(g)(1)(D) applies. No election under Section 168(g)(7), 168(b)(2)(D) or 168(b)(3)(D) of the Code has been made with respect to any assets of the Project Company.

The Project Company and Seller, and their respective affiliates (with respect to or to the extent potentially materially impacting the Project Company Development Assets, the ISS Project Development Company Assets, the Project or the Project Company) have paid all applicable sales and use Taxes with respect to the Project Company Development Assets and ISS Project Development Assets.

For purposes of Section 1445(b)(2) of the Code, neither Seller (or the first upstream regarded owner of Seller for U.S. federal income tax purposes in the event Seller is classified as a disregarded entity for U.S. federal income tax purposes) nor the Project Company is a “foreign person” as defined in Section 1445(f)(3) of the Code.

2.22 Real Property Interests . The real property and any of the interests related to the real property described on Schedule 2.22 describe all of the real property interests, including, without limitation, options, easements and leases, held by the Project Company underlying or used or to be used in the operation of the Project, including all rights to each of the Premises and all rights needed for the Project Company to fulfill its obligations under the Interconnection Agreement and the PPA (the “ Project Real Property ”). Such real property interests are sufficient in all material respects for the Project Company to develop, install, own and operate the Project as contemplated by the Material Contracts. The Project Company does not own, lease, license or otherwise have and has not had any interests (including option interests) in any other real property. The Project Real Property is not subject to any liens or other rights of third parties other than such matters set forth as an exception to the Title Policy. The Project Company holds good, valid and marketable leasehold title to each of the Premises. Seller has delivered to Buyer true, accurate and complete copies of all leases, purchase options, land rights or other agreements with respect to each of the Premises, and any surveys or plats relating to each of the Premises, together with any and all exhibits thereto, and none of the foregoing has been modified or amended unless shown therein. Each Lease, as amended, is in full force and effect and constitutes the valid and binding legal obligations of the parties therein. The copy of each Lease provided to Buyer is true, accurate and complete, contains all exhibits and has not been modified or amended unless as shown therein. To Seller’s Knowledge, each of the Premises are in compliance with all conditions, restrictions or requirements contained in any zoning ordinances, permits or approvals necessary for the Project including, but not limited to, any necessary consents or authorizations. Neither Seller nor the Project Company has received any notice of any of the following and, to Seller’s Knowledge, none of the following events or conditions have occurred or currently exist: (a) any existing or threatened special Tax or special assessment to be levied against the Premises, (b) any claims from any Governmental Authority having jurisdiction over the Project Company or the Premises or from any Person who will provide utility service to the Premises, that there are not sufficient easements and rights-of-way required for the operation of the Project as contemplated or to provide ingress and egress to and from the Premises, or (c) any notices (including without limitation requests for information) from any Governmental Authority or other person related to (i) the presence, release or threatened release of any Hazardous Material or any other environmental condition on, in or under the Project Real Property, or (ii) any other circumstance forming the basis of any actual or alleged violation by Seller or the Project Company of any Environmental Law or other remedial or removal obligation, harm, injury or damage to real or personal property, natural resources, the environment or any person alleged to have resulted from the foregoing. To Seller’s Knowledge, the Premises are being maintained in all material respects in accordance with applicable laws, rules and regulations and neither Seller nor the Project Company has received any written notification that the Premises are in violation, in any material respect, of any applicable laws, rules and regulations.

2.23 Wetlands Jurisdictional Determination . The United States Army Corps of Engineers (“ USACE ”) issued a Jurisdictional Determination dated October 19, 2015 related to 150 acres of the Project Real Property owned by Boyce White, Jr. and wife Katherine S. White. USACE issued a Jurisdictional Determination dated February 8, 2016 related to 45.92 acres of the Project Real Property owned by William R. Storms, unremarried widower of Shelby H. Storms. To Seller’s Knowledge, these Jurisdictional Determinations are the only Jurisdictional Determinations issued for the Project Real Property and remain in full force and effect as of the date of this Agreement and the Closing Date.

2.24 Capitalization; Subsidiaries . Schedule 2.24 sets forth all authorized, issued and outstanding Membership Interests, all of which are owned by Seller. Except as set forth on Schedule 2.24 there are no other issued and outstanding Membership Interests, or convertible securities, calls, options, warrants, Contracts or commitments (other than this Agreement), or understandings or arrangements by which the Project Company is bound to issue, repurchase or otherwise acquire or retire any additional Membership Interests. Upon consummation of the transactions contemplated by this Agreement, Buyer will own all of the Membership Interests, free and clear of all Encumbrances. The Project Company has no and has never had any subsidiaries or owned any equity interests in any Person.

2.25 Regulation .

Presuming that Buyer is not itself a “public utility” (as that term is defined under the FPA) and is either not a “holding company” (as that term is used under FPA Section 203(a)(2)) or is eligible for the blanket authorizations set forth in 18 C.F.R. § 33.1(c)(8), to Seller’s Knowledge, the execution, delivery, and consummation of the transactions provided for in this Agreement require no pre-consummation of the FERC under Section 203 of the FPA.

The Project Company (i) is not now a “public utility” as that term is defined in the FPA but is subject to regulation under the FPA with respect to its status as a QF and its eligibility to make sales of electricity at wholesale pursuant to the PPA, and (ii) is not subject to regulation as a “public utility,” as that term is defined in the North Carolina Public Utilities Act. Neither Seller nor the Project Company (x) is subject to regulation as a “public utility,” “public utility company,” “electrical corporation” or “holding company” as those terms are defined in the Public Utility Holding Company Act of 2005, as amended, and the regulations promulgated thereunder (“ PUHCA ”) (except that Seller is a “holding company” of one or more QFs and/or “exempt wholesale generators,” as those terms are defined under PUHCA, and is eligible for the exemption from regulation under PUHCA to the extent set forth in 18 C.F.R. § 366.3(a)), the FPA or the North Carolina Public Utilities Act, or otherwise subject to regulation as a public utility or service company (or similar designation) by a Governmental Authority or (y) has taken any action that would result in Seller or the Project Company being subject to such regulation.

The Project is a QF and will be a “small power production facility” that will meet the requirements of 18 C.F.R. Section 292.204. The Project Company (i) has obtained and maintained status for the Project as a QF and (ii) has made the requisite QF filings with FERC and any applicable utility and state regulatory authority in order to obtain QF status. The Project and the Project Company are exempt from regulation (x) as set forth in 18 C.F.R. Sections 292.601 and 602, but are not exempt from regulation under Sections 204, 205 and 206 of the FPA under 18 C.F.R. Section 292.601, and (y) by the state of North Carolina respecting rates and financial and organizational regulation under 18 C.F.R. Section 292.602. The Project Company has not submitted to FERC any tariff or application for “market-based rate” authority (as that term is used under 18 C.F.R. Part 35 Subpart H). The execution, delivery and performance by the Parties of this Agreement and the consummation of the transactions contemplated hereby require no pre-consummation notice or approval by the NCUC under the North Carolina Public Utilities Act. The ownership of the Project will not result in the Project Company being subject to regulation by the NCUC as a “public utility” as defined in the North Carolina Public Utilities Act. The Project Company has obtained all applicable NCUC regulatory approvals to (A) construct the Project, including but not limited to, the requirement to obtain a certificate of public convenience and necessity to begin construction of an electric generating facility in accordance with N.C.G.S. § 62-110.1 and Rule R8-64; (and the Project Company has notified the NCUC of the change of control of and updated contact information for the Project Company in accordance with Rule R8-64(d)(3)); and (B) register the Project as a New Renewable Energy Facility, as that term is defined in N.C.G.S. § 62-133.8, in accordance with Rule R8-66.

2.26 Subsidiaries and Joint Ventures . The Project Company does not own any capital stock, security, partnership interest or other equity interest of any kind in any corporation, partnership, limited liability company, joint venture, association or other entity.

2.27 Intellectual Property . The Project Company owns, or has the licenses or rights to use, all material Intellectual Property currently used by the Project Company or that is necessary for the conduct of the business of the Project Company as of the date hereof. Neither the Project Company nor Seller has received from any Person a claim in writing that the Project Company is infringing in any material respect the Intellectual Property of such Person and to Seller’s Knowledge there is no threatened claim by or against the Project Company for infringement or misappropriation of any Intellectual Property.

2.28 Hazardous Substances . To Seller’s Knowledge, no release of Hazardous Substances has occurred at, onto, from or under any of the properties relating to the Premises or any property adjacent thereto. Neither Seller nor the Project Company have stored, handled, disposed of, generated, manufactured, refined, transported, migrated, produced or treated any Hazardous Substance at, upon, or from the properties relating to the Premises in violation of any applicable Law (including Environmental Laws) and, to Seller’s Knowledge, no condition exists or event has occurred on the properties relating to the Premises which with the passing of time or the giving of notice or both would constitute a violation of Environmental Law or otherwise give rise to costs, liabilities or obligations thereunder.

2.29 Affiliate Transactions . Except as set forth on Schedule 2.29 , neither Seller nor any affiliate of Seller (other than the Project Company) or any affiliate of the Project Company has any interest in or is a party to: (a) any Contract with the Project Company; (b) any loan or other instrument to or from the Project Company; (c) any right or property (real, personal or mixed, tangible or intangible) used, or expected to be used, by the Project Company or otherwise related to the Project; or (d) any pending or threatened claim or cause of action against the Project Company.

2.30 Bank Accounts . Schedule 2.30 sets forth the names and locations of banks, trust companies and other financial institutions at which the Project Company maintains bank accounts or safe deposit boxes and the names of all Persons authorized to draw thereon, make withdrawals therefrom or have access thereto.

2.31 No Brokers . There is no investment banker, broker, finder or other intermediary retained by or authorized to act on behalf of Seller, Buyer or the Project Company who might be entitled to any fee or commission as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated by this Agreement.

2.32 Full Disclosure . Seller has reviewed the documents, items and other disclosures listed in this Agreement and the Schedules and Exhibits hereto. To Seller’s Knowledge, there is no untrue or incorrect statement of fact in this Agreement or the Schedules and Exhibits hereto. To Seller’s Knowledge, there is no omission from this Agreement or the Schedules and Exhibits hereto necessary to make the information therein, in light of the circumstances, in which it was provided, not misleading. No representation or warranty by Seller contained in this Agreement or the Schedules and Exhibits hereto or in any statement or certificate furnished or to be furnished by or on behalf of Seller to Buyer or its representatives in connection herewith or pursuant hereto contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact required to make the statements contained herein or therein not misleading. Except for any such events or circumstances that have been disclosed in this Agreement or the Schedules and Exhibits hereto and other than matters of a general economic or political nature which do not affect the Project uniquely, there are no other facts or other circumstances (i) that would, individually or in the aggregate, be considered material by a reasonable investor in making an investment decision regarding the Project or (ii) that could, individually or in the aggregate, materially and adversely affect the ability of the Project to connect to the local distribution or transmission system in accordance with the requirements of the Interconnection Agreement, achieve COD or sell power and the environmental attributes in accordance with the requirements of the PPA.

3. REPRESENTATIONS AND WARRANTIES OF BUYER . Buyer represents and warrants to Seller that the following representations are true, correct and complete as of the date hereof, and as of the Closing Date, except as otherwise indicated.

3.1 Organization; Authority . Buyer is duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its formation. Buyer has all requisite entity powers and authorities to own, lease and operate its properties and to carry on its business as now being conducted. The execution, delivery and performance by Buyer of this Agreement are within Buyer’s entity powers and have been duly authorized by all necessary resolutions or other required actions.

3.2 Binding Effect . This Agreement when executed and delivered by Buyer will constitute the valid and legally binding obligation of Buyer, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

3.3 Absence of Conflicting Agreements . Neither Buyer nor its affiliates is a party to, bound or affected by or subject to any indenture, mortgage, lease, agreement, instrument, charter or bylaw provision, statute, regulation, order, judgment, decree or law which would be violated, contravened or breached by, or under which any default would occur, as a result of the execution and delivery of this Agreement or the consummation of any of the transactions described herein.

4. CONDITIONS TO CLOSING AND PRE- AND POST-CLOSING COVENANTS

4.1 Conditions to Obligations of Buyer . The obligation of Buyer to complete the transactions contemplated hereby are subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any or all of which, if not fulfilled, may be waived in writing by Buyer:

Seller shall have delivered to Buyer each of the documents and items set forth in Section 1.5;

Each of the representations and warranties of Seller contained in Article 2 hereof shall be true and correct as though made on and as of the Closing Date;

Buyer shall have received copies of all site plans approved by the relevant local governmental authorities, in form and substance satisfactory to Buyer; and

Buyer shall have received the written consent of Duke Energy to the change of control of the Project Company in form and substance acceptable to Buyer.

The closing of the non-recourse debt financing for the Project Company (the “ Debt Financing ”), with documents and terms in form and substance reasonably satisfactory to Buyer (including delivery of all required third-party documentation, including, to the extent required, satisfactory consents, estoppels and legal opinions of major project participants), shall have occurred or shall occur simultaneously with or immediately following the Closing hereunder, and the commitments under the Debt Financing shall be effective simultaneously with the Closing.

The closing of the tax equity financing for the Project, with documents and terms in form and substance reasonably satisfactory to Buyer (including delivery of all required third-party documentation, including, to the extent required, satisfactory consents, estoppels and legal opinions of major project participants), shall have occurred or shall occur simultaneously with or immediately following the Closing hereunder.

4.2 Conditions to Obligations of Seller . The obligation of Seller to complete the transactions contemplated hereby are subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any or all of which, if not fulfilled, may be waived in writing by Seller:

Each of the representations and warranties of Buyer contained in Article 3 hereof shall be true and correct as though made on and as of the Closing Date;

Buyer shall have delivered to Seller, a certificate dated as of the Closing Date, executed by its manager, certifying that the condition set forth in Section 4.2(a) has been fulfilled, in the form attached to this Agreement as Exhibit E ; and

Buyer shall have complied with all then due payment obligations hereunder.

4.3 Other Actions to be Taken at or after the Closing Date . Seller and Buyer shall execute and deliver to the other any and all documents and instruments in addition to those provided for herein that may be necessary or appropriate to effectuate the transactions contemplated by this Agreement at or after the Closing Date.

4.4 Project Company Pre-Closing Liabilities . Seller shall (i) be responsible for all Project Company Pre-Closing Liabilities and (ii) cause all Project Company Pre-Closing Liabilities to be paid, performed and discharged by their applicable due date. For purposes of this Agreement, “ Project Company Pre-Closing Liabilities ” shall mean any and all Liabilities of the Project Company or that otherwise are associated with or relate to the Project or the Project Company (i) arising on or attributable to periods on or prior to the Closing, or (ii) arising out of, related to, or in connection with the acts or omissions of Seller or its affiliates (or any of its officers, directors, members or employees), whether or not associated with or related to the Project, the Project Company, the Project Company Development Assets or the ISS Project Development Assets; provided , however, that with respect to Liabilities under Material Contracts, “ Project Company Pre-Closing Liabilities ” shall only include Liabilities (x) due and payable on or prior to the Closing, and (y) to the extent such Liabilities are a result of or attributable to a breach or default by the Project Company of such Material Contract on or prior to the Closing; provided , further , that “ Project Company Pre-Closing Liabilities ” shall not include any rental payments under the Leases, payments for the costs of interconnection due under the Interconnection Agreement, costs paid, due or payable pursuant to the Power Purchase Agreement, and costs paid, due or payable to any local governmental entity and any other costs or expenses which have been paid or incurred by Buyer or any affiliate or related party to Buyer, with such rental payments and costs to be paid by Buyer (it being understood that no such payments, costs or expenses shall be reimbursed, due or payable by Seller).

4.5 Tax Covenants .

Pre-Closing Tax Returns . For any Tax Returns that relate to tax periods ending on or before the Closing Date, Seller shall prepare and timely file with the appropriate authorities all Tax Returns required to be filed by the Project Company or the other entity of which such Project Company is considered not to be separate for federal income tax purposes and shall pay any Taxes shown as due on such Tax Returns. Such Tax Returns shall be prepared in a manner consistent with past practice (unless otherwise required by applicable law).

Post-Closing Tax Returns . Buyer shall prepare and timely file with the appropriate authorities all Tax Returns required to be filed by the Project Company that relate to a Straddle Period, and Seller shall cooperate, to the reasonable satisfaction of Buyer, in the accurate preparation and filing of such Tax Returns. Buyer shall send to Seller a copy of each such Tax Return (together with such schedules and supporting workpapers as Seller may reasonably request) and shall permit Seller to review and comment. Seller shall pay to Buyer or the Project Company, no less than five (5) days prior to the due date for the applicable Tax Return, any Pre-Closing Taxes shown on such Tax Return. Notwithstanding anything to the contrary herein, Buyer shall be entitled to timely file any Tax Return for a Straddle Period without having incorporated any unagreed upon changes to avoid a late filing of such Tax Return.

Cooperation . Buyer and Seller shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to this Section 4.5 and any examination, audit or other proceeding with respect to Taxes.

Third Party Tax Claims . If any third-party notifies Seller of the existence of any Proceedings relating to Taxes of the Project Company or related to Taxes with respect to or potentially impacting the Project Company Development Assets, the ISS Project Development Assets, the Project or the Project Company (a “ Third Party Tax Claim ”), Seller shall give notice to Buyer within fifteen (15) days of the notice of the Third Party Tax Claim. Seller covenants not to settle or otherwise dispose of any Third Party Tax Claim, if such claim shall have or could reasonably be expected to have adverse Tax consequences to the Project Company or Buyer, without first obtaining written consent from Buyer of such settlement or disposition, such consent not to be unreasonably withheld, conditioned or delayed.

Transfer Taxes and Filings Fees . Seller shall be responsible for and pay all Transfer Taxes and filing fees associated with the transactions contemplated by this Agreement. Seller shall file when due all necessary documentation and Tax Returns with respect to such Transfer Taxes.

Purchase Price Allocation . For federal income Tax purposes, the Parties shall treat the purchase and sale of the Membership Interests as a purchase and sale of all of the assets of the Project Company and assumption by Buyer of all the Project Company’s Liabilities (other than Liabilities for which Buyer is required to be indemnified pursuant to this Agreement). Except as may otherwise be required by applicable law, for purposes of any state Transfer Taxes and, to the extent permitted by applicable law, Buyer and Seller acknowledge and agree that they shall treat the transactions contemplated by this Agreement as a sale of the Membership Interests. The Parties agree that for purposes of income Tax reporting, the assets of the Project Company do not include any goodwill or going concern value, and neither Buyer nor Seller nor any of their affiliates will file any Internal Revenue Service Form 8594 with respect to the purchase and sale of the Membership Interests pursuant to this Agreement.

4.6 Pre-Closing Access.

Seller shall, prior to the Closing, furnish or cause to be furnished to Buyer and its representatives, at reasonable times and upon reasonable notice, such access (i) during normal business hours, to the Project as Buyer reasonably requests and (ii) to the Books and Records as Buyer reasonably requests, but, in each case, only to the extent that such access does not unreasonably interfere with the business and operations of the Project Company; provided, however, that Seller has the right to have one of its representatives present and to impose reasonable restrictions and requirements for safety purposes.

Buyer and Seller agree that prior to the Closing, at the sole responsibility and expense of Buyer, Seller shall permit designated representatives of Buyer to regularly observe, in the presence of personnel of Seller and at Buyer’s, reasonable discretion, all business and operations of Seller that relate to the Project and that occur at the site of the Project, and the development and operation thereof, and to participate to the extent reasonably practicable in key discussions and communications with third parties relating to the Project, including any amendment, modification, termination or waiver of any provision of any Material Contract; provided, however, that (i) any such observations shall be conducted in such a manner as not to interfere unreasonably with the development and operation of the Project and to be in compliance with customary safety and confidentiality protocols and (ii) Buyer may not observe any discussions between Seller and its legal counsel and may not otherwise observe any activities or discussions which may constitute a waiver of the attorney-client privilege. Seller shall provide reasonable advance notice of any such material discussions and communications and shall coordinate participation in such material discussions and communications to the extent reasonably practicable.

4.7 Achievement of Closing . From the date hereof until the Closing, Seller shall take such actions as are reasonably necessary to expeditiously satisfy the closing conditions set forth in Article 4 hereof, and Seller shall cooperate fully with Buyer in promptly taking all such actions and in seeking to obtain all necessary third party consents, authorizations, orders and approvals required for the Closing; provided that the foregoing shall not obligate Seller to enter into any contract, agreement or other instrument with a counterparty of Buyer or any governmental or other entity, or take any action that could reasonably be expected to expose Seller to any material liability, including, but not limited to, liability that survives the Closing. Seller shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt or satisfaction of any closing condition. Seller shall keep Buyer informed of the status of satisfaction of the closing conditions and shall promptly notify Buyer of any anticipated delay of, or expected failure to achieve, any closing condition.

5. INDEMNIFICATION

5.1 Survival of Representations and Warranties . All representations, warranties, covenants and agreements contained herein and all related rights to indemnification shall survive the Closing for a period of two (2) years other than to the extent related to Taxes in which case survival shall be for the applicable statute of limitations; provided, that, with respect to any representation, warranty, covenant or agreement as to which a claim shall have been asserted prior to the date that is two (2) years following the Closing Date (or the expiration of the applicable statute of limitations to the extent the underlying claim relates to Taxes), the survival period shall continue in effect with respect to such claim until such claim shall have been finally resolved or settled.

5.2 Indemnification By Seller . Seller agrees to indemnify, defend and save Buyer (and following the Closing Date, the Project Company) and each of their officers, directors, managers, employees, agents and representatives (each, a “ Buyer Indemnified Party ”), harmless from and against, and to promptly pay to a Buyer Indemnified Party or reimburse a Buyer Indemnified Party for, any and all damages, Liabilities (whether contingent, fixed or unfixed, liquidated or unliquidated, or otherwise), obligations, deficiencies, demands, claims, suits, actions, causes of action, assessments, losses, costs, expenses, interest, fines, penalties or costs or expenses of any and all investigations, proceedings, judgments, environmental analyses, remediations, settlements and compromises (including, without limitation, fees and expenses of attorneys, accountants and other experts) (collectively, “ Losses ”) sustained or incurred by any Buyer Indemnified Party relating to, resulting from, arising out of or otherwise by virtue of any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or in any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement, and any breach or non-fulfillment of any covenant, agreement or other obligation to be performed by Seller pursuant to this Agreement or any document to be delivered hereunder.

5.3 Indemnification By Buyer . Buyer agrees to indemnify, defend and save Seller and each of its officers, directors, managers, employees, agents and representatives (each, a “ Seller Indemnified Party ”) harmless from and against, and to promptly pay to a Seller Indemnified Party or reimburse a Seller Indemnified Party for, any and all Losses sustained or incurred by any Seller Indemnified Party relating to, resulting from, arising out of or otherwise by virtue of any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or in any certificate or instrument delivered by or on behalf of Buyer pursuant to this Agreement, and any breach or non-fulfillment of any covenant, agreement or other obligation to be performed by Buyer pursuant to this Agreement or any document to be delivered hereunder.

5.4 Indemnification by Seller Related to Taxes . Seller shall also indemnify Buyer and hold it harmless from and against, without duplication, any loss, claim, liability, expense or other damage attributable to (i) all Pre-Closing Taxes (or the non-payment thereof), (ii) any and all Taxes of any person imposed on the Project Company as a transferee or successor, by contract or pursuant to any law, rule or regulation, which Taxes relate to an event or transaction occurring on or before the Closing and (iii) all Transfer Taxes as a result of the transactions contemplated by this Agreement.

6. TERMINATION

6.1 Termination . Notwithstanding anything in this Agreement to the contrary, either Buyer or Seller may terminate this Agreement by written notice to the other Party in the event that the Closing Date has not occurred on or by July 31, 2016, as such date may be extended in accordance with Section 6.3 (as extended, the “ Final Date ”), provided , that such termination will not be available to a Party if the Closing Date has not occurred solely by reason of any breach by such Party of this Agreement (including, in the case of Seller, breach of its obligations in Section 4.7). Following such termination in accordance with this Section, Seller shall be entitled to retain all Extension Payments (as defined below) received by it as liquidated damages, and neither Party shall have any further obligations hereunder except as set forth in Sections 6.4 and 6.5.

6.2 Force Majeure . If, for any reason prior to Closing Date, the Project cannot be developed or otherwise go forward to completion and sale of electricity to Duke Energy through no fault of Buyer or due to external factors not under the control of Seller or Buyer (such as force majeure or governmental action, but not due to Buyer’s inability to obtain financing for the Project or one similar to such), then this Agreement will terminate upon written notice thereof by either Party to the other Party, and thereafter neither Party shall have any further obligations hereunder except as set forth in Sections 6.4 and 6.5.

6.3 Extension of Final Date . On or prior to the Final Date, Buyer may extend the Final Date by up to sixty (60) additional days in the aggregate, by paying to Seller, in advance of such extension, payments of $5,000 per each day of extension desired (“ Extension Payments ”), by wire transfer of immediately available funds pursuant to the wire instructions set forth on Exhibit A ; provided that Buyer may make multiple extensions of the Final Date in any increment of additional days (including increments to extend only to the next succeeding business day) so long as payment is made on or prior to the then-current Final Date. An amount equal to the sum of (i) fifty percent (50%) of all Extension Payments paid to Seller until the Closing Date plus (ii) all Extension Payments paid to Seller for days after the Closing Date (such sum, the “ Extension Credit ”) shall be credited to the Closing Payment as set forth in Section 1.3(b).

6.4 Third Party Sale . If, following termination of this Agreement pursuant to Sections 6.1 or 6.2, Seller sells the Membership Interests to a Person that is not an Affiliate of Buyer (a “ Third Party Sale ”), then Seller shall give notice thereof to Buyer and pay to Buyer, simultaneous with the closing of such Third Party Sale, an amount equal to:

(a)

fifty percent (50%) multiplied by

(b)

the excess, if any, of:

(i)

the gross proceeds received by Seller from such Third Party Sale, less

(ii)

an amount equal to the Closing Payment (with an Extension Credit of $0), less

(iii)

the amount of all reasonable documented and invoiced out-of-pocket third-party expenses (including, but not limited to, legal, survey, engineering, environmental and commissioning expenses) paid or payable by Seller necessary to consummate such Third Party Sale and incurred following the termination of this Agreement; provided that Seller may only include amounts pursuant to this clause (iii) to the extent it provides documentation thereof to Buyer.

Seller shall deliver to Buyer all such documentation, closing statements and other written evidence as Buyer may reasonably request to verify the amounts referred to in this Section.

6.5 Effect of Termination . In the event of the termination of this Agreement pursuant to Sections 6.1 or 6.2, this Agreement shall forthwith become void, there shall be no liability on the part of Buyer, Seller or the Project Company or their respective officers, directors, stockholders, managers or partners pursuant to this Agreement, and all rights and obligations of any party hereto shall cease, except (i) for the provisions of Sections 6 and 7, and other provisions of this Agreement that by their nature survive termination, all of which shall survive any such termination; and (ii) that nothing herein shall relieve any party hereto of any liability for any and all of the damages suffered by the other party hereto as a result of any fraud, intentional misrepresentation or willful breach of such party’s representations, warranties, covenants or agreements contained in this Agreement.

7. MISCELLANEOUS

7.1 Notices . Any notice or other communication in connection with this Agreement shall be deemed to be delivered if in writing (including via email) addressed as provided below and if either (a) actually delivered at said address, (b) in the case of delivery by transmission with receipt acknowledged, or recognized overnight courier service, one business day after transmittal, or (c) in the case of a letter, three business days after deposited in the United States mails, postage prepaid and registered or certified, return receipt requested:

If to Seller:

Innovative Solar Systems, LLC

171 Rolling Meadows Road

Fletcher, NC 28732

Attention: Richard H. Green

Title: Manager
Email: Rhgreen@aol.com

If to Buyer:

IS-31 Holdings, LLC
c/o VivoPower USA, LLC

3824 Cedar Springs Rd. #801-1299

Dallas, TX 75219

Attention: Chief Financial Officer

Email: dpilotte@vivopower.com

And in any case at such other address as the addressee shall have specified by written notice. All periods of notice shall be measured from the date of delivery thereof.

7.2 Execution in Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. The exchange of copies of this Agreement and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement and signature pages thereof for all purposes.

7.3 Entire Agreement . This Agreement and the documents to be delivered hereunder constitute the entire understanding and agreement between the parties hereto concerning the subject matter hereof. Nothing expressed or implied in this Agreement is intended or shall be construed so as to grant or confer on any person, firm or corporation other than the parties hereto, any rights or privileges hereunder.

7.4 Amendment . No amendment, modification or waiver of any term hereof shall be effective unless set forth in writing signed by all Parties hereto.

7.5 Assignment . Neither the Project Company nor Seller shall assign their rights, duties or obligations hereunder to any third party without the prior written approval of Buyer, provided that any such permitted assignment shall not relieve Project Company or Seller of its primary liability for its obligations hereunder. Buyer may assign all or any of its rights hereunder to any third party without requiring the approval of Seller, provided that, any such assignment shall not relieve Buyer of its primary liability for its obligations hereunder. Nothing in this Agreement, expressed or implied, is intended or shall be construed to confer upon any person other than the parties hereto and their respective successors and permitted assigns any rights, remedy or claim under or by reason of this Agreement or any provision herein contained.

7.6 Headings . The headings contained in this Agreement are for the purpose of reference only and shall not be considered a part of, or control or affect the meaning or construction of this Agreement.

7.7 Governing Law . THIS AGREEMENT, AND ANY INSTRUMENT OR AGREEMENT REQUIRED HEREUNDER (TO THE EXTENT NOT EXPRESSLY PROVIDED FOR THEREIN), SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE AND WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) .

7.8 Binding Effect . This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of each party, and their successors and permitted assigns.

7.9 Waiver . The failure to enforce at any time any of the provisions of this Agreement or to require at the time of performance by the other Party of any of the provisions hereof shall not be construed as a waiver of such provisions or to affect the validity of this Agreement, or any part hereof or the right of either Party to enforce each and every such provision in accordance with the terms of this Agreement.

7.10 Enforceability . Except as otherwise provided herein, in case any provision(s) of this Agreement shall be determined invalid or unenforceable under the applicable law, such provision(s) shall, insofar as possible, be construed or applied in such manner as will permit enforcement; otherwise, this Agreement shall be construed as though such provision(s) had never been made a part hereof.

7.11 License for Access and Data Room . Upon execution of this Agreement, Seller shall (a) execute a license for access to enable Buyer, its affiliates and consultants to access the Premises for the purpose of completing the due diligence contemplated herein; and (b) provide to Buyer copies of all new or updated information not already provided to Buyer to allow Buyer to complete its due diligence.

7.12 Due Diligence . Seller shall provide, to the satisfaction of Buyer, copies of all due diligence inspections, reports and studies relative to the Premises, including but not limited to a preliminary title commitment and a survey of the Premises. Seller shall provide to Buyer any existing reports, studies and permits that have been completed or obtained by Seller. Additionally, Seller shall cooperate with Buyer regarding any additional reasonable information requests. Unless otherwise indicated, all costs of such reports, studies and permits provided by Seller shall be borne by Seller.

7.13 Zoning . Seller shall provide, to the satisfaction of Buyer, copies of any and all verifications of appropriate zoning classification from the respective city and/or County for the Premises on which the Project is sited, or final determination of applicable rezoning petitions, and such cost shall be Seller’s responsibility.

7.14 Copies of Specified Agreements . At or before Closing, Seller shall provide, to the satisfaction of Buyer, copies of the following agreements for the Project or Premises, as applicable (and shall list all of the applicable agreements in Schedule 7.14 to this Agreement):

the Leases, including any applicable Subordination, Non-Disturbance and Attornment Agreements;

verification of any existing agricultural contracts affecting the Premises;

the Interconnection Agreement;

REC Contracts (if applicable);

the PPA;

any consents which may be necessary due to the change in control of the Project under each Lease or Interconnection Agreement, and any permits, filings and approvals, required for ownership, operation and maintenance of the Project; and

all necessary authorizations, certifications and licenses from the NCUC and all other regulatory agencies for the operation of the Project and the sale and delivery of electrical output therefrom, including but not limited to registration of the Project as a new renewable energy facility and the issuance of an Order of Certificate of Public Convenience and Necessity.

7.15 Exclusivity . Except as otherwise provided herein, prior to any termination of this Agreement, Seller shall not, and shall not authorize or permit any representative on Seller’s behalf, including but not limited to John Green or Richard Green, to directly or indirectly, encourage, solicit, initiate, facilitate, enter into discussions or negotiations or any agreement with, or otherwise participate in any manner whatsoever, concerning the acquisition of any or all of the membership interests or the assets of the Project Company or divesture of the Project. Seller shall deal exclusively with Buyer and Buyer’s designated agent(s), if any, concerning the foregoing and the transactions contemplated hereunder (collectively, the “ Transaction ”).

7.16 Expenses . Whether or not the Transaction is consummated, each Party will each bear its respective costs and expenses, including the payment of any broker fees. Neither party shall be liable for or pay any costs or expenses incurred by the other, except as otherwise provided herein.

7.17 Confidentiality . Buyer and Seller’s position as described in this Agreement is made with the understanding that it will be treated in confidence and that no disclosure will be made without Buyer’s or Seller’s prior consent, except as otherwise required by law or regulation.

7.18 Public Announcement . The parties shall consult with each other on the desirability, timing and substance of any press release or public announcement, publicity statement or other public disclosure relating to the Transaction or the fact that negotiations are being held. Each Party agrees not to make any such public disclosures without the prior written consent of the other Party as to the content and timing of such disclosure; provided, however, that either Party may make such disclosures as are required to comply with applicable law or regulation.

7.19 Other Agreements . This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof and supersedes any other prior agreements, written or oral, between the Parties concerning such subject matter.

7.20 Interpretation . Except where otherwise expressly provided or unless the context otherwise necessarily requires, in this Agreement: (a) reference to a given Article, Section, Subsection, clause, Exhibit or Schedule is a reference to an Article, Section, Subsection, clause, Exhibit or Schedule of this Agreement; (b) the terms “hereof”, “herein”, “hereto”, “hereunder” and “herewith” refer to this Agreement as a whole; (c) reference to a given agreement, instrument, document or law is a reference to that agreement, instrument, document or law as modified, amended, supplemented and restated through the date as of which such reference is made, and, as to any law, any successor law; (d) reference to a Person includes its successors and permitted assigns; (e) the singular includes the plural and the masculine includes the feminine, and vice versa; (f) “includes” or “including” means “including, for example and without limitation;” and (g) references to “days” mean calendar days.

7.21 Definitions . For purposes of this Agreement, the following terms and variations thereof have the meanings specified or referred to in this Section 7.21:

“Affiliate” means, with respect to a Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with such first Person.

“Action” means any claim, action, suit, proceeding, arbitration, complaint, charge or governmental investigation of any nature.

“ Books and Records ” means originals, or where not available, copies, of all books and records, including, but not limited to, books of account, data, studies and correspondence (including all correspondence with any Governmental Authority) used in the siting, design, development, interconnection, construction, start-up, testing, commissioning, ownership, use, operation or maintenance of the Project or otherwise related to the Project, the Project Company or the transactions contemplated by this Agreement.

“ CERCLA ” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.

“ COD ” has the meaning ascribed to such term in the PPA.

“ Code ” means the United States Internal Revenue Code of 1986, as amended.

“Contract” means any agreement, contract, lease, consensual obligation, promissory note, evidence of indebtedness, purchase order, letter of credit, license, promise, letter of intent, memorandum of understanding or undertaking of any nature (whether written or oral and whether express or implied).

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or in its capacity as sole or managing member, by Contract or otherwise. The term “Control” when used as a verb in the referenced clauses shall have a correlative meaning.

“ Duke Energy ” means Duke Energy Progress, LLC (f/k/a Duke Energy Progress, Inc.).

“Environmental Laws” means all applicable Laws (including rules, regulations, codes, plans, injunctions, judgments, orders, ordinances, decrees, rulings and charges thereunder) of Governmental Authorities (and all agencies thereof) concerning or relating to pollution or protection of human health, land conservation, wildlife, flora and fauna, natural resources, or the environment, safety, land use and zoning, including, without limitation, Laws relating to emissions, discharges, releases, or threatened releases of pollutants or Hazardous Substances into the air, surface water, ground water, lands or subsurface (including, without limitation, releases to ambient air, land and surface and subsurface strata), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, release, disposal, transport, or handling of Hazardous Substances.

“ FERC ” means the Federal Energy Regulatory Commission.

“ FPA ” means the Federal Power Act, as amended, and FERC’s implementing regulations thereunder, as amended.

“GAAP” means accounting principles generally accepted in the United States, as in effect as of the date of this Agreement, consistently applied.

“ Governmental Authority ” means any federal, national, regional, state, municipal or local government, any political subdivision or any governmental, judicial, public or statutory instrumentality, tribunal, court, agency, authority, body or entity, or other regulatory bureau, authority, body or entity having legal jurisdiction over the matter or Person in question.

“Hazardous Substance” means any substance that is defined or listed in, or otherwise classified pursuant to, any Environmental Law, including materials listed in C.F.R. § 172.101 and materials defined as hazardous substances pursuant to Section 101(14) of CERCLA, as a “hazardous substance,” “extremely hazardous substance,” “hazardous material,” “hazardous waste,” “infectious waste,” “medical waste,” “toxic substance,” “toxic pollutant,” or any other formulation intended to classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, or reproductive toxicity; and pollutants, effluents, residues, contaminants, asbestos, petroleum (including all petroleum-related products, by-products, and wastes), polychlorinated biphenyls, urea formaldehyde, radon gas, methane gas, radioactive materials (including any source, special nuclear, or by-product material), explosives, chlorofluorocarbons, lead or lead-based materials, and any other substance whose presence could be detrimental to property, health, or the environment.

“Intellectual Property” means the following intellectual property rights, both statutory and common law rights, if applicable: (a) copyrights, registrations and applications for registration thereof; (b) trademarks, service marks, trade names, slogans, domain names, logos, trade dress, and registrations and applications for registrations thereof; and (c) patents, inventions, know-how and trade secrets as well as any reissued and reexamined patents and extensions corresponding to the patents, and any patent applications, as well as any related continuation, continuation in part and divisional applications and patents issuing.

“Interconnection Agreement” means that certain Interconnection Agreement, dated October 17, 2014, by and between the Project Company and Duke Energy.

“Law” means any applicable current or future federal, national, regional, state, municipal or local law, statute, treaty, rule, regulation, ordinance, order, code, judgment, decree, directive, injunction, writ or similar action or decision duly implementing any of the foregoing by any Governmental Authority, and includes all applicable Permits.

“Liabilities” or “liabilities” means with respect to any individual or entity, any liability or obligation of such individual or entity of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such individual or entity.

“ NCUC ” means the North Carolina Utilities Commission.

“ North Carolina Public Utilities Act ” means Chapter 62 of the North Carolina General Statutes.

“North Carolina State-Jurisdictional Interconnection Procedures” means those procedures, forms and agreements approved by the NCUC on May 15, 2015, in Docket No. E-100, Sub 101.

“Person” means any individual, sole proprietorship, corporation, partnership, joint venture, limited liability partnership, limited liability company, trust, unincorporated association, institution, Governmental Authority or any other entity.

“ Pre-Closing Tax Periods ” means taxable periods ending on or prior to the Closing Date and, in the case of any Straddle Period, the portion thereof ending on the Closing Date.

“ Pre-Closing Taxes ” means all Taxes of a Pre-Closing Tax Period, and with respect to a Straddle Period, the portion of Taxes attributable to a Pre-Closing Tax Period as described below, in each case relating to the Project Company, the Project Company Development Assets, the ISS Project Development Assets or the operation, construction or development thereof, and whether or not imposed on the Project Company, on Seller or on its affiliates or direct or indirect partners, shareholders or members. For any Straddle Period, Pre-Closing Taxes shall be apportioned to Seller for the Pre-Closing Tax Period of such Straddle Period in the following manner: (i) in the case of Taxes based on or measured by income, receipts or payroll, based on an interim closing of the books as of the close of business on the Closing Date; and (ii) in the case of real property Taxes, personal property Taxes and other similar Taxes and obligations, the amount of Taxes that relate to such Pre-Closing Tax Period shall be deemed to be the amount of such Taxes and obligations for the entire Straddle Period multiplied by a fraction the numerator of which is the number of days in such Pre-Closing Tax Period and the denominator of which is the number of days in such Straddle Period.

“PPA” means that certain Power Purchase Agreement by and between the Project Company and Duke Energy dated as of June 30, 2015.

“Proceedings” means any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any governmental body or arbitrator.

“QF” means “qualifying small power production facility,” as that term is defined by FERC.

“Representatives” means each Party’s respective officers, directors, employees, representatives, agents, attorneys or advisors.

“Seller’s Knowledge” means the collective actual or constructive knowledge of John Green and Richard Green after conducting a reasonably comprehensive investigation regarding the accuracy of the applicable representation and warranty made herein by Seller.

“ Straddle Period ” means any taxable period that includes (but does not end on) the Closing Date.

“ Tax ” or “ Taxes ” means (i) any and all federal, state, local or foreign taxes, fees, levies, duties, tariffs, imposts and other charges of any kind, imposed by any governmental authority or taxing authority, including, without limitation, taxes or other charges on, measured by, or with respect to income, franchise, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, unclaimed property, value-added or gains taxes; license, registration and documentation fees; and customs duties, tariffs and similar charges (whether or not imposed on the Project Company, Seller or on any of its affiliates); (ii) any liability for the payment of any amounts of the type described in (i) as a result of being a member of, or a successor member of, an affiliated, combined, consolidated or unitary group for any taxable period; (iii) any liability for the payment of any amounts of the type described in (i) or (ii) as a result of being a transferee of, or a successor in interest to, any person or as a result of an express or implied obligation to indemnify any person; and (iv) any and all interest, penalties, additions to tax and additional amounts imposed in connection with or with respect to any amounts described in (i), (ii) or (iii).

“ Tax Return ” means any return, declaration, report, claim for refund, election or information return or statement relating to Taxes of any kind or nature filed or supplied or required to be filed or supplied with any governmental authority or taxing authority, including any schedule or attachment thereto, and including any amendment thereof.

“ Transfer Tax ” means any and all transfer Taxes (excluding Taxes measured by net income), including Taxes related to sales, use, excise, value added, transaction privilege, conveyance, stock, stamp, documentary, filing, recording, permit, license, authorization, filing fees or other similar Taxes (including related penalties, interest and additions) if any, resulting from the sale of the Membership Interests by Seller pursuant to this Agreement.

“ Treasury Regulations ” means the regulations promulgated under authority of the Code by the United States Department of Treasury.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the date and year first above written.

SELLER:

INNOVATIVE SOLAR SYSTEMS, LLC

By: /s/ Richard Green

Name: Richard Green

Title: Manager

By: /s/ John Green

Name: John Green

Title: Manager

BUYER:

IS-31 HOLDINGS, LLC

By: /s/ Gary Hui

Name: Gary Hui

Title: Manager

Exhibit 10.2

FINANCING AGREEMENT

Among

Innovative Solar 31, LLC ,

a North Carolina limited liability company,

as Borrower

KEYBANK NATIONAL ASSOCIATION ,

as Lead Arranger, as Administrative Agent for the Lenders and as Collateral Agent for the Secured Parties

and

THE LENDERS PARTY HERETO

July 29, 2016

Approximately 43.0 MW DC solar project in Bladenboro, North Carolina

TABLE OF CONTENTS

Page

ARTICLE 1 DEFINITIONS			1
	1.1	Definitions.	1
	1.2	Rules of Interpretation.	27
ARTICLE 2 THE CREDIT FACILITIES			28
	2.1	Construction Loan Facility and ITC Bridge Loan Facility.	28
	2.2	Interest Provisions Relating to All Loans; Loan Funding; Prepayments.	32
	2.3	Total Commitments.	36
	2.4	Fees.	36
	2.5	Other Payment Terms.	37
	2.6	Change of Circumstances.	43
	2.7	Funding Losses.	46
	2.8	Alternate Office; Minimization of Costs.	46
ARTICLE 3 CONDITIONS PRECEDENT			47
	3.1	Conditions Precedent to the Closing Date.	47
	3.2	Conditions Precedent to Each Credit Event.	56
	3.3	No Approval of Work.	60
ARTICLE 4 REPRESENTATIONS AND WARRANTIES			60
	4.1	Organization.	60
	4.2	Authorization; No Conflict; Enforceability.	60
	4.3	Governmental Authorizations.	61
	4.4	Compliance with Law.	61
	4.5	Employee Matters; ERISA.	62
	4.6	Taxes.	62
	4.7	Business, Debt, Contracts, Etc.	63
	4.8	Filings.	63
	4.9	Investment Company.	63
	4.10	Governmental Regulation.	63
	4.11	Regulation U, Etc.	64
	4.12	Financial Statements.	64
	4.13	Partnerships and Joint Ventures.	64
	4.14	Existing Defaults.	64
	4.15	No Default.	64
	4.16	Permits; Applicable Approvals.	65
	4.17	Offices, Location of Collateral.	66
	4.18	Material Adverse Change.	66
	4.19	Environmental.	66
	4.20	Litigation.	67
	4.21	Title and Liens.	67
	4.22	Utility Services.	68
	4.23	Roads and Transmission Lines.	68
	4.24	Project Documents.	68

	4.25	Project Document Representations.	69
	4.26	OFAC and Related Matters.	69
	4.27	Energy Regulation.	70
	4.28	Disclosure.	71
	4.29	Projections and Project Budget and Schedule.	71
	4.30	Collateral.	71
	4.31	Intellectual Property.	72
	4.32	Land Not in Flood Zone.	72
	4.33	Insurance.	72
	4.34	Accounts.	72
	4.35	Anti-Terrorism Laws.	72
	4.36	Labor Laws.	72
	4.37	Equity Interests.	73
	4.38	Project Work.	73
	4.39	Affiliate Assignment.	73
	4.40	ITC Matters.	73
	4.41	Expected Funding Amount..	73
	4.42	Affected Systems.	74
	4.43	Obligations Under MIPA.	74
	4.44	Remedies Under Module Warranties.	74
	4.45	Assignment of Warranties.	74
	4.46	Regulatory Matters.	74
ARTICLE 5 AFFIRMATIVE COVENANTS OF BORROWER			74
	5.1	Use of Loan Proceeds.	74
	5.2	Payment.	74
	5.3	Notices.	74
	5.4	Financial Statements.	78
	5.5	Reports.	79
	5.6	Additional Permits and Additional Project Documents.	80
	5.7	Reserved.	80
	5.8	Existence, Conduct of Business, Properties.	80
	5.9	Obligations.	81
	5.10	Spare Parts Inventory.	81
	5.11	Books and Records.	81
	5.12	Energy Regulation.	81
	5.13	Operation of Project and Annual Budget.	81
	5.14	Preservation of Rights; Further Assurances.	82
	5.15	Enforcement.	83
	5.16	Construction.	83
	5.17	Taxes, Other Government Charges and Utility Charges.	83
	5.18	Compliance With Laws, Instruments, Etc.	84
	5.19	Maintenance of Insurance.	84
	5.20	Warranty of Title.	84
	5.21	Event of Eminent Domain.	84
	5.22	Indemnification.	85
	5.23	Reserved.	87

iii

	5.24	Reserved.	87
	5.25	Equator Principles.	87
	5.26	Compliance with Terms of Leaseholds.	87
	5.27	FERC Filings.	87
	5.28	Additional Obligations.	87
	5.29	Separateness Provisions.	88
	5.30	Compliance with Anti-Money Laundering Laws and OFAC Laws.	88
	5.31	Reserved.	88
	5.32	Reserved.	89
	5.33	Warranty Assignments.	89
	5.34	Income Tax.	89
ARTICLE 6 NEGATIVE COVENANTS OF BORROWER			89
	6.1	Contingent Liabilities.	89
	6.2	Limitations on Liens.	89
	6.3	Indebtedness.	89
	6.4	Sale or Lease of Assets.	89
	6.5	Changes.	90
	6.6	Distributions.	90
	6.7	Investments.	90
	6.8	Transactions With Affiliates.	90
	6.9	Regulations.	90
	6.10	Loan Proceeds.	90
	6.11	Partnerships.	90
	6.12	Dissolution.	90
	6.13	Additional Project Documents.	90
	6.14	Amendments; Change Orders; Completion.	90
	6.15	Compliance with Anti-Money Laundering Laws and OFAC Laws.	91
	6.16	Name and Location; Fiscal Year.	91
	6.17	Use of Project Site.	91
	6.18	Assignment.	92
	6.19	Abandonment of Project.	92
	6.20	Hazardous Substances.	92
	6.21	ERISA.	92
	6.22	Regulation of Parties.	92
	6.23	Employees.	92
	6.24	Accounts.	92
	6.25	Subsidiaries.	92
	6.26	ITC Matters.	93
	6.27	Recapture.	93
	6.28	Federal Tax Benefit Matters.	93
ARTICLE 7 APPLICATION OF FUNDS			93
	7.1	Construction Account.	93
	7.2	Loss Proceeds Account.	93
	7.3	Reserved.	93
	7.4	Equity Capital Contribution Account.	93

	7.6	Application of Insurance Proceeds.	93
	7.7	Application of Eminent Domain Proceeds.	93
	7.9	Security Interest in Proceeds and Accounts.	94
	7.10	Earnings on Accounts.	94
	7.11	Dominion and Control.	94
	7.12	Disbursement to Borrower.	94
ARTICLE 8 EVENTS OF DEFAULT; REMEDIES			95
	8.1	Failure to Make Payments.	95
	8.2	Judgments.	95
	8.3	Misstatements.	95
	8.4	Bankruptcy; Insolvency.	96
	8.5	Cross Default.	97
	8.6	ERISA.	97
	8.7	Breach of Transaction Documents.	98
	8.8	Breach of Terms of Agreement.	99
	8.9	Invalidity of Financing Documents.	100
	8.10	Loss of Regulatory Certifications or Authorizations.	100
	8.11	Repudiation of Borrower Entity Obligations.	101
	8.12	Security.	101
	8.13	Loss of Applicable Permits.	101
	8.14	Loss of Collateral.	102
	8.15	Destruction of the Project.	102
	8.16	Holdings Operating Agreement.	102
	8.17	Change of Control.	102
	8.18	No Further Loans.	103
	8.19	Cure by Administrative Agent.	103
	8.20	Acceleration.	103
	8.21	Cash Collateral.	103
	8.22	Remedies Under Financing Documents.	103
	8.23	Possession of Project.	104
ARTICLE 9 SCOPE OF LIABILITY			104
ARTICLE 10 ADMINISTRATIVE AGENT; COLLATERAL AGENT; AMENDMENT, SUBSTITUTION AND ASSIGNMENT			105
	10.1	Appointment, Powers and Immunities.	105
	10.2	Reliance by Administrative Agent.	107
	10.3	Non-Reliance.	107
	10.4	Defaults.	107
	10.5	Indemnification.	108
	10.6	Successor Agents.	108
	10.7	Authorization.	109
	10.8	Other Rights and Power of Administrative Agent.	109
	10.9	Amendments.	109
	10.10	Withholding Tax.	110
	10.11	General Provision as to Payments.	111

	10.12	Substitution of a Lender.	111
	10.13	Participations.	112
	10.14	Assignments; Transfer of Commitments.	113
	10.15	Laws.	113
	10.16	Assignability to Federal Reserve Bank.	114
	10.17	Response to Borrower Requests.	114
	10.18	Flood Law Compliance Policies.	114
ARTICLE 11 INDEPENDENT CONSULTANTS			114
	11.1	Removal and Fees.	114
	11.2	Duties.	115
	11.3	Independent Consultants’ Certificates.	115
ARTICLE 12 MISCELLANEOUS			115
	12.1	Addresses.	115
	12.2	Additional Security; Right to Set-Off.	116
	12.3	Delay and Waiver.	117
	12.4	Costs, Expenses and Attorneys’ Fees.	117
	12.5	Entire Agreement.	118
	12.6	Governing Law.	118
	12.7	Severability.	118
	12.8	Headings.	118
	12.9	Accounting Terms.	118
	12.10	No Partnership, Etc.	118
	12.11	Limitation on Liability.	119
	12.12	Waiver of Jury Trial.	119
	12.13	Consent to Jurisdiction.	119
	12.14	Usury.	120
	12.15	Successors and Assigns.	120
	12.16	Counterparts.	120
	12.17	USA Patriot Act Compliance.	120
	12.18	Confidentiality.	121
	12.19	Attorney-in-Fact.	122
	12.20	Deed of Trust; Collateral Documents.	122

INDEX OF EXHIBITS AND SCHEDULES

Notes

Exhibit A-1

Form of Construction Loan Note

Exhibit A-2

Form of ITC Bridge Loan Note

Loan Disbursement Procedures

Exhibit B-1

Form of Notice of Borrowing

Exhibit B-2

Form of Confirmation of Interest Period Selection

Exhibit B-3

Form of Drawdown Certificate

Exhibit B-4

Form of Independent Engineer’s Drawdown Certificate

Security Related Documents

Exhibit C-1

Schedule of Security Filings

Consents to Collateral Assignment

Exhibit D-1

Schedule of Consents and Estoppels

Exhibit D-2

Form of Other Contracting Party Consent

Closing Certificates

Exhibit E

Form of Insurance Consultant’s Certificate

Project Description Exhibits

Exhibit F-1

Schedule of Applicable Permits and Applicable Approvals

Exhibit F-2

Project Budget and Schedule

Exhibit F-3

Non-Compliance; Pending Litigation

Exhibit F-4

Hazardous Substances Disclosure

Exhibit F-5

Schedule of Real Property Documents

Other

Exhibit G

Lenders/Lending Offices

Exhibit H

Schedule of Lender Proportionate Shares

Exhibit I

Insurance Requirements

Schedules

Schedule 1

Environmental Reports

Schedule 2

Accounts

Schedule 3

Schedule of Project, Power Purchaser, Power Purchase Agreement, Interconnector, Interconnection Agreement, EPC Contractor, EPC Agreement, O&M Contractor, O&M Agreement, EPC Guaranty, Warranty Agreements, Module Supplier, Module Warranty Provider, and Modules

Schedule 4

Requirements for Final Completion of the Project

Schedule 5

Site for the Project

Schedule 6

Requirements for Substantial Completion of the Project

vii

FINANCING AGREEMENT

This FINANCING AGREEMENT (this “ Agreement ”) is dated as of July 29, 2016, among INNOVATIVE SOLAR 31, LLC, a North Carolina limited liability company (“ Borrower ”), the financial institutions from time to time party hereto as lenders (collectively, the “ Lenders ”), and KEYBANK NATIONAL ASSOCIATION, a national banking association (“ KeyBank ”), as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “ Administrative Agent ”), as collateral agent for the Secured Parties (in such capacity, together with its successors and assigns in such capacity, “ Collateral Agent ”), and as Lead Arranger.

RECITALS

A. Class B Parent is, as of the date hereof, the sole member of Class B Member. Class B Member, as of the date hereof, owns one hundred percent (100%) of the Class B Membership Interests of Holdings.

B. Holdings owns, as of the date hereof, one hundred percent (100%) of the limited liability company interests of Borrower. Borrower owns the Project.

C. Borrower has requested that the Lenders provide loans pursuant to a construction loan facility and ITC bridge loan facility in connection with the construction of the Project.

D. The Lenders are willing to make such loans upon the terms and subject to the conditions of this Agreement.

AGREEMENT

NOW THEREFORE, in consideration of the mutual promises set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

1.1 Definitions . As used in this Agreement, the following terms shall have the meanings set forth below:

“ Account ” means the Construction Account, the Loss Proceeds Account or the Equity Capital Contribution Account, including any sub-accounts therein, and “ Accounts ” means each of the foregoing.

“ Additional Project Documents ” means any contracts or agreements relating to the ownership, development, construction or operation of the Project (but excluding the Financing Documents, the Tax Equity Documents and the Operating Agreements) entered into by Borrower or assigned to Borrower, subsequent to the Closing Date that (a) replace or substitute for any Material Project Document, (b) have a term greater than one (1) year, (c) obligate any party thereto to make payments in an aggregate amount exceeding One Hundred Fifty Thousand Dollars ($150,000) in any calendar year or (d) if terminated, could reasonably be expected to have a Material Adverse Effect.

“ Administrative Agent ” means KeyBank in its capacity as administrative agent for the Lenders under this Agreement, or its successor in such capacity appointed pursuant to the terms hereof.

“ Affected Lender ” shall have the meaning given in Section 2.6(a) hereof.

“ Affiliate ” of a specified Person means any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person specified, or who holds or beneficially owns fifty percent (50%) or more of the equity interest in the Person specified or fifty percent (50%) or more of any class of voting securities of the Person specified (or is otherwise directly or indirectly, controlling, controlled by or under common control with such Person where “control” means the power, directly or indirectly, to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise); provided that in no event shall any Class A Member be, or be deemed to be, an Affiliate of any Borrower Entity or Class B Member.

“ Agents ” shall mean Administrative Agent, Collateral Agent and Depositary, and “ Agent ” shall mean any of the Agents, as applicable.

“ Aggregate Construction Loans ” means, as of a given date, the aggregate principal amount of all Construction Loans made as of such date.

“ Aggregate ITC Bridge Loans ” means, as of a given date, the aggregate principal amount of all ITC Bridge Loans made as of such date.

“ Agreement ” shall have the meaning given in the preamble.

“ Anti-Money Laundering Laws ” means any laws or regulations relating to money laundering or terrorist financing, including, without limitation: the Bank Secrecy Act, 31 U.S.C. sections 5301 et seq.; the Patriot Act; Laundering of Monetary Instruments, 18 U.S.C. section 1956; Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, 18 U.S.C. section 1957; the Financial Recordkeeping and Reporting of Currency and Foreign Transactions Regulations, 31 C.F.R. Part 103; and any similar laws or regulations currently in force or hereafter enacted.

“ Anti-Terrorism Laws ” means (a) the anti-money laundering provisions of the Patriot Act, (b) the Department of Treasury Rule and (c) the Terrorism Order.

“ Applicable Approval ” means all Approvals required in connection with (a) the execution, delivery and performance by Borrower of the Project Documents and (b) the construction, ownership or operation and maintenance of the Project and the generation, transmission and sale of energy generated by the Project as contemplated under the Project Documents; provided that the term “Applicable Approval” does not include any Approval pursuant to any unwritten or informal rules, practices or procedures.

“ Applicable Construction Loan Margin ” means with respect to (a) Eurodollar Loans, the Applicable Construction Loan Margin (Eurodollar Rate) and (b) Base Rate Loans, the Applicable Construction Loan Margin (Base Rate).

“ Applicable Construction Loan Margin (Base Rate) ” means 0.75% per annum above the Base Rate.

“ Applicable Construction Loan Margin (Eurodollar Rate) ” means 1.75% per annum above the Eurodollar Rate.

“ Applicable Equator Principles ” means those principles so entitled and described in “The Equator Principles - A financial industry benchmark for determining, assessing and managing social and environmental risk in projects” (June 2013) and available at: http://www.equator-principles.com/resources/equator_principles_III.pdf, as adopted in such form by certain financial institutions and as applicable to borrowers with respect to projects of the applicable category of the Project.

“ Applicable ITC Bridge Loan Margin ” means with respect to (a) Eurodollar Loans, the Applicable ITC Bridge Loan Margin (Eurodollar Rate) and (b) Base Rate Loans, the Applicable ITC Bridge Loan Margin (Base Rate).

“ Applicable ITC Bridge Loan Margin (Base Rate) ” means 0.75% per annum above the Base Rate.

“ Applicable ITC Bridge Loan Margin (Eurodollar Rate) ” means 1.75% per annum above the Eurodollar Rate.

“ Applicable Permit ” means, at any time, any Permit, including any zoning, environmental protection, pollution (including but not limited to air, water or noise), sanitation, FERC, import, export, safety, siting or building Permit that is:

(a) necessary at any given time in light of the stage of development, construction, ownership or operation of the Project (to the extent required by Legal Requirements, Governmental Rules, the Financing Documents or Material Project Documents) to site, construct, test, operate, maintain, repair, own or use the Project as contemplated by the Financing Documents and Material Project Documents, to sell electricity therefrom, and for Borrower or Holdings to enter into any Operative Document or to consummate any transaction contemplated thereby, in each case in accordance with all applicable Legal Requirements; or

(b) necessary at any given time in light of the stage of development, construction or operation of the Project (to the extent required by Legal Requirements or Governmental Rules) so that

(i) none of Administrative Agent, Collateral Agent, the Depositary, or any Lender, nor any Affiliate (as that term is defined in Section 1262(1) of PUHCA, 42 U.S.C. § 16451(1)) of any of them will be deemed by FERC to be subject to, or not exempt from, regulation under the FPA or PUHCA (except as provided in Section 4.27(b) hereof) or under any state laws or regulations respecting the rates or the financial or organizational regulation of electric utilities, solely as a result of the construction, ownership or operation of the Project or the sale of electricity therefrom, and

(ii) no Borrower Entity will be deemed by FERC to be subject to, or not exempt from, regulation under the FPA or PUHCA (except as set forth in Section 4.27 hereof) or under any state laws or regulations respecting the rates or the financial or organizational regulation of electric utilities, solely as a result of the construction, ownership or operation of the Project or the sale of electricity therefrom; or

(c) listed on the then current Schedule of Applicable Permits and Applicable Approvals attached to, or subsequently updated and delivered pursuant to, this Agreement as Exhibit F-1 .

“ Appraiser ” means Alvarez & Marsal Holdings, LLC or such other Person identified as “Appraiser” pursuant to the Tax Equity ECCA from time to time and satisfactory to Administrative Agent.

“ Approvals ” means any and all approvals, permits, licenses, authorizations, consents, certifications, orders, waivers, exemptions, variances, franchises, declarations, rulings and registrations to, from or issued by any Person. “ Approvals ” shall not include immaterial ministerial approvals by a Governmental Authority.

“ Authorized Person ” means a natural Person designated by Borrower as such on forms supplied by Administrative Agent.

“ Available Construction Funds ” means at any time the sum of (a) the aggregate of the undisbursed proceeds of the Total Construction Loan Commitment, plus (b) any amounts on deposit in the Construction Account.

“ Available Construction Loan Commitment ” means (a) at any time on or prior to the Maturity Date, the Total Construction Loan Commitment at such time minus the Aggregate Construction Loans at such time and (b) at any time after the Maturity Date, zero.

“ Available ITC Bridge Loan Commitment ” means (a) at any time on or prior to the Maturity Date, the Total ITC Bridge Loan Commitment at such time minus the Aggregate ITC Bridge Loans at such time and (b) at any time after the Maturity Date, zero.

“ Bankruptcy Event ” shall have the meaning given in Section 8.4 hereof.

“ Bankruptcy Law ” means Title 11, United States Code, and any other state or federal insolvency, reorganization, moratorium or similar law for the relief of debtors.

“ Base Case Projections ” means a financial model that is a projection of operating results for the Project.

“ Base Rate ” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate, (b) one-half of one percent (.50%) in excess of the Federal Funds Effective Rate, and (c) one percent (1%) in excess of the London interbank offered rate for loans in Eurodollars for a period of one month (or, if such day is not a Business Day, such rate as calculated on the most recent Business Day). Any change in the Base Rate shall be effective immediately from and after such change in the Base Rate. Notwithstanding the foregoing, if at any time the Base Rate as determined above is less than zero, it shall be deemed to be zero for purposes of this Agreement.

“ Base Rate Loans ” means Loans that bear interest at a rate per annum determined by reference to the Base Rate.

“ Basel III ” means the capital regulations promulgated by relevant Governmental Authorities implementing the Basel III Global Regulatory Framework for more Resilient Bank and Banking Systems, including transition rules, and any amendments to such regulations adopted.

“ Benefited Bank ” shall have the meaning given in Section 2.5(h) hereof.

“ Borrower ” shall have the meaning given in the preamble hereof.

“ Borrower Entities ” means, collectively, Borrower and Holdings, and “ Borrower Entity ” means Borrower or Holdings.

“ Borrower Equity ” means the aggregate of funds contributed by or on behalf of Borrower (including funds contributed or advanced by affiliates of Sponsor prior to the formation of Borrower or prior to the closing under the MIPA) for the payment of Project Costs (excluding the proceeds of any Loan and the proceeds of any capital contribution made by the Class A Member).

“ Borrower Operating Agreement ” means the Amended and Restated Limited Liability Company Agreement of Innovative Solar 31, LLC, dated as of the Closing Date, by Holdings, as supplemented, amended, amended and restated or otherwise modified from time to time to the extent permitted under this Agreement.

“ Borrower’s Closing Certificate ” shall have the meaning given in Section 3.1(f) hereof.

“ Borrowing ” means a borrowing by Borrower of any Construction Loan or ITC Bridge Loan, in each case upon the satisfaction (or waiver in accordance with the terms hereof) of each of the applicable conditions precedent listed in Article 3 hereof.

“ Borrowing Date ” means a Business Day specified in a Notice of Borrowing on which the Lenders make Loans pursuant to this Agreement.

“ Business Day ” means a day that is not a Saturday, a Sunday or another day of the year on which national banks are authorized or required to close in Cleveland, Ohio, and, in addition, if the applicable Business Day relates to a Eurodollar Loan, is a day of the year on which dealings in Dollar deposits are carried on in the London interbank Eurodollar market.

“ Capital Adequacy Requirement ” shall have the meaning given in Section 2.6(d) hereof.

“ Change of Law ” shall have the meaning given in Section 2.6(b) hereof.

“ Claims ” shall have the meaning given in Section 5.22 hereof.

“ Class A Member ” means Firstar Development, LLC, a Delaware limited liability company and its successors-in-interest under, and pursuant to the terms of, the Tax Equity Documents and any other entity that becomes a “Class A Member” under the terms of the Tax Equity Documents.

“ Class B Member ” means US-NC-31 Sponsor, LLC, a Delaware limited liability company.

“ Class B Membership Interests ” means the Class B Membership Interests, under and as defined in the Holdings Operating Agreement, having the rights, preferences and designations provided for such class in the Holdings Operating Agreement.

“ Class B Parent ” means US-NC-31 Sponsor Partner, LLC, a Delaware limited liability company.

“ Closing ” means the satisfaction (or waiver in accordance with the terms hereof) of each of the conditions precedent listed in Section 3.1 hereof.

“ Closing Date ” means the date upon which Closing occurs.

“ Code ” means the Internal Revenue Code of 1986, as amended, and any successor federal tax statute.

“ Collateral ” means all real and personal property which is subject, from time to time, to the security interests or liens granted in or purported or intended to have been granted by any of the Collateral Documents.

“ Collateral Agent ” means KeyBank acting in its capacity as Collateral Agent for the Secured Parties under this Agreement, or its successor in such capacity appointed pursuant to the terms hereof.

“ Collateral Documents ” means, collectively, the Security Agreement, the Holdings Pledge Agreement, the Depositary Agreement, the Consents and Estoppels, the Deed of Trust and any other security document, financing statement and the like filed or recorded in connection with the foregoing or with respect to the Collateral (but excluding, for the avoidance of doubt, the NES Escrow Agreement and the NES Escrow Account Disbursement Agreement).

“ Commercial Operation ” shall have the meaning given in the Power Purchase Agreement as in effect on the Closing Date.

“ Commercial Operation Date ” or “ COD ” means the date when all the conditions to Commercial Operation for the Project have been satisfied.

“ Commitment Fees ” means, collectively, the Construction Loan Commitment Fees and the ITC Bridge Loan Commitment Fees.

“ Commitments ” means, with respect to each Lender, without duplication, such Lender’s Construction Loan Commitment and ITC Bridge Loan Commitment, with respect to all Lenders, without duplication, the Total ITC Bridge Loan Commitment and the Total Construction Loan Commitment.

“ Confirmation of Interest Period Selection ” shall have the meaning given in Section 2.2(b)(ii) hereof.

“ Consents and Estoppels ” means the consents to collateral assignment and estoppel certificates identified on Exhibit D -1 hereof, in each case by and among the applicable Borrower Entity and the Persons identified therein in the forms agreed to on the Closing Date or in substantially the form of Exhibit D -2 or otherwise in form and substance reasonably satisfactory to Administrative Agent and the Required Lenders.

“ Construction Account ” shall have the meaning given in Section 7.1 hereof.

“ Construction Loan ” and “ Construction Loans ” shall have the meanings given in Section 2.1(a)(i) hereof.

“ Construction Loan Commitment ” means, at any time with respect to each Lender, such Lender’s Proportionate Share of the Total Construction Loan Commitment at such time.

“ Construction Loan Commitment Fees ” shall have the meaning given in Section 2.4(b)(i) hereof.

“ Construction Loan Facility ” shall have the meaning given in Section 2.1(a)(i) hereof.

“ Construction Loan Note ” and “ Construction Loan Notes ” shall have the meanings given in Section 2.2(e) hereof.

“ Controlled Group ” means (a) a corporation which is a member of a controlled group of corporations with Borrower within the meaning of Section 414(b) of the Code, (b) a trade or business (including a sole proprietorship, partnership, trust, estate or corporation) which is under common control with Borrower within the meaning of Section 414(c) of the Code or Section 4001(b)(1) of ERISA, (c) a member of an affiliated service group with Borrower within the meaning of Section 414(m) of the Code, or (d) an entity deemed affiliated with Borrower under Section 414(o) of the Code. For the avoidance of doubt, the Class A Member shall not be deemed to be a member of the Controlled Group.

“ Cost Segregation Report ” means a cost segregation report from the Appraiser in respect of the Project.

“ Credit Event ” means each Borrowing.

“ Debt ” of any Person at any date means, without duplication, (a) all obligations of such Person for borrowed money, including in respect of unreimbursed drawings under letters of credit issued for the account of such Person, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (d) all obligations of such Person under leases which are or should be, in accordance with GAAP, recorded as capital leases in respect of which such Person is liable, (e) all obligations of such Person to purchase securities (or other property) which arise out of or in connection with the sale of the same or substantially similar securities (or property), (f) all deferred obligations of such Person to reimburse any bank or other Person in respect of amounts paid or advanced under a letter of credit or other instrument, (g) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person, and (h) all Debt of others guaranteed directly or indirectly by such person or as to which such Person has an obligation substantially the economic equivalent of a guarantee.

“ Deed of Trust ” means the Construction Leasehold Deed of Trust with Power of Sale, Assignment of Leases and Rents, Security Agreement, and Fixture Filing, to be executed pursuant to Section 3.1(m)(iv) hereof, by Borrower, as trustor, in favor of Collateral Agent, as beneficiary, covering the Site, in form and substance acceptable to Administrative Agent.

“ Default ” means an event or condition that constitutes, or with the lapse of any applicable grace period or the giving of notice or both would constitute, an Event of Default, and that has not been waived by the Required Lenders (or, if required hereunder, all of the Lenders) in writing.

“ Default Rate ” means the interest rate per annum equal to two percent (2%) plus (a) in the case of any Loans, the rate that would otherwise be applicable to such Loan, or (b) with respect to any other Obligation not referred to in clause (a) above, the rate applicable to Base Rate Loans.

“ Department of Treasury Rule ” shall have the meaning given in Section 4.26(a)(i) hereof.

“ Depositary ” means KeyBank, in its capacity as the Depositary under the Depositary Agreement, or its successor in such capacity appointed pursuant to the terms of the Depositary Agreement.

“ Depositary Agreement ” means that certain Depositary Agreement, dated as of the Closing Date, by and among Borrower, Holdings, Administrative Agent, Collateral Agent and Depositary.

“ Development Agreement ” means that certain Development Services Agreement, dated as of the Closing Date, by and among Borrower and Sponsor.

“ Discharge Date ” shall mean the date on which the Commitments shall have been terminated or fully utilized, and the principal of and interest on the Loans, all fees and all other expenses, amounts or Obligations (excluding contingent indemnification and reimbursement obligations, that, by their express terms, survive the repayment of the Loans, interest, fees and other amounts owed under this Agreement) payable under any Financing Document shall have been paid in full in cash.

“ Disclosing Party ” shall have the meaning given in Section 12.18 hereof.

“ Disqualified Person ” means (a) the United States, any state or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any the foregoing, (b) any organization which is exempt from tax imposed by the Code (including any former tax-exempt organization within the meaning of Code Section 168(h)(2)(E) and any tax-exempt controlled entity within the meaning of Code Section 168(h)(6)(F)(iii) if such entity has not made the election provided in Code Section 168(h)(6)(F)(ii)), (c) any Person who is not a United States Person, (d) any Indian tribal government described in Section 7701(a)(40) of the Code, or (e) any partnership or other pass-through entity any direct or indirect partner (or other holder of an equity or profits interest) of which is an organization or entity described in clauses (a) through (d) of this definition; provided that any such Person described in clauses (a) through (d) of this definition shall not be considered a Disqualified Person to the extent that (i) the Person is described within clause (a) , clause (b) or clause (d) of this definition and the exception under Code Section 168(h)(1)(D) applies with respect to the income from Borrower, Holdings or Class B Member, (ii) the Person is described within clause (c) of this definition and the exception under Code Section 168(h)(2)(B)(i) applies with respect to the income from Borrower, Class B Member or Holdings, or (iii) another exception is applicable under the Code or Treasury Regulations.

“ Dodd-Frank Wall Street Reform and Consumer Protection Act ” shall mean the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203 (signed into law July 21, 2010)).

“ Dollar ” or the “ $ ” sign means lawful currency of the United States.

“ Drawdown Certificate ” means a certificate delivered to Administrative Agent, substantially in the form of Exhibit B-3 to this Agreement.

“ Eligible Assignee ” means (a) a depository institution as defined under the Federal Deposit Insurance Act or (b) a branch of a foreign bank as defined under the International Banking Act of 1978, in each case with the minimum capital base of $1,000,000,000 and having the following ratings of its long-term indebtedness from at least two of the following rating agencies: (i) “A-” or higher from Standard & Poor’s Corporation; (ii) “A3” or higher from Moody’s Investors Service, Inc.; and (iii) “A-” or higher by Fitch Investor’s Service, Inc. (or its successors); provided that such standards shall be applied to the foreign bank and not such branch.

“ Environmental Claim ” means any and all liabilities, obligations, losses, administrative, regulatory or judicial actions, suits, demands, decrees, Claims, liens, judgments, warning notices, notices of noncompliance or violation, investigations, proceedings, removal or remedial actions or orders, or damages (foreseeable and unforeseeable), penalties, out-of-pocket costs, expenses, disbursements, or attorneys’ or consultants’ fees, arising under any Environmental Law or any Permit issued under any such Environmental Law and relating to the Site or other property that is the subject of the Real Property Documents, including with respect to the Site or other property that is the subject of the Real Property Documents, any neighboring properties, or off-site waste disposal facility, (a) any and all such Claims for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all such Claims arising from alleged injury or threat of injury to health and safety, the environment, natural, cultural, archeological or biological resources or wildlife or regarding the investigation, delineation, remediation, Release or potential Release of, or human exposure to, any Hazardous Substances.

“ Environmental Consultant ” means Alpha Environmental Sciences, Inc. or any replacement to the Environmental Consultant appointed pursuant to Section 11.1 hereof.

“ Environmental Law ” means any applicable Governmental Rule regulating, relating to or imposing liability or standards of conduct concerning (a) protection of natural, cultural, archaeological or biological resources, wildlife or the environment, (b) the Release, generation, distribution, use, treatment, storage, disposal, cleanup, transport or handling of, or exposure to, Hazardous Substances or (c) the protection of human health and safety, each as now or may at any time hereafter be in effect.

“ Environmental Reports ” means the reports listed or otherwise described on Schedule 1 hereof.

“ EPC Agreement ” means that certain Solar Power Facility Engineering, Procurement and Construction Agreement between EPC Contractor and Borrower, dated as of the Closing Date.

“ EPC Contractor ” means Grupo Gransolar, LLC, a Delaware limited liability company.

“ EPC Guaranty ” means that certain Guarantee, dated as of the Closing Date, by EPC Parent in favor of Borrower.

“ EPC Parent ” means Grupo Gransolar, S.L., a Spanish limited liability company.

“ Equity Capital Contribution Account ” shall have the meaning given in Section 7.4 hereof.

“ Equity Contribution Requirement ” means, as of the date of determination, Borrower Equity equal to at least ten percent (10%) of the total projected Project Costs (other than the development fee) as set forth in the Project Budget and Schedule.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) which, together with Borrower, would be deemed to be a “single employer” within the meaning of Section 414(b) or Section 414(c) of the Code (and Sections 414(m) and 414(o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ ERISA Plan ” means any employee benefit plan (a) maintained by Borrower or any member of the Controlled Group, or to which any of them contributes or is obligated to contribute, for its employees and (b) covered by Title IV of ERISA or to which Section 412 of the Code applies.

“ Eurodollar Loans ” means Loans that bear interest at a rate per annum determined by reference to the Eurodollar Rate, other than any Base Rate Loans that bear interest at a rate per annum determined by reference to the Eurodollar Rate for a one-month Interest Period.

“ Eurodollar Rate ” means, with respect to a Eurodollar Loan, for any Interest Period, a rate per annum equal to the quotient obtained (rounded upwards, if necessary, to the nearest 1/16 ^th of 1%) by dividing (a) the rate of interest, determined by Administrative Agent in accordance with its standard procedures (which determination shall be conclusive absent manifest error) as of approximately 11:00 A.M. (London time) two Business Days prior to the beginning of such Interest Period pertaining to such Eurodollar Loan, as listed as the London interbank offered rate, as published by Thomson Reuters or Bloomberg (or, if for any reason such rate is unavailable from Thomson Reuters or Bloomberg, from any other similar company or service that provides rate quotations comparable to those currently provided by Thomson Reuters or Bloomberg) for Dollar deposits in immediately available funds with a maturity comparable to such Interest Period, provided that, in the event that such rate quotation is not available for any reason, then the Eurodollar Rate shall be the average (rounded upward to the nearest 1/16th of 1%) of the per annum rates at which deposits in immediately available funds in Dollars for the relevant Interest Period and in the amount of the Eurodollar Loan to be disbursed or to remain outstanding during such Interest Period, as the case may be, are offered to Administrative Agent (or an affiliate of Administrative Agent, in Administrative Agent’s discretion) by leading banks in any Eurodollar market reasonably selected by Administrative Agent, determined as of 11:00 A.M. (London time) (or as soon thereafter as practicable), two Business Days prior to the beginning of the relevant Interest Period pertaining to such Eurodollar Loan; by (b) 1.00 minus the Reserve Percentage. Notwithstanding the foregoing, if at any time the Eurodollar Rate, as determined above, is less than zero, it shall be deemed to be zero for purposes of this Agreement.

“ Event of Default ” and “ Events of Default ” shall have the meanings given in Article 8 hereof.

“ Event of Eminent Domain ” means any compulsory transfer or taking by condemnation, eminent domain or exercise of a similar power, or transfer under threat of such compulsory transfer or taking, of any part of the Collateral, any part of the Project or any of the real property that is the subject of the Real Property Documents, by any agency, department, authority, commission, board, instrumentality or political subdivision of the State in which the Project are located, the United States or another Governmental Authority having jurisdiction.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Excluded Taxes ” shall have the meaning given in Section 2.5(d)(i) hereof.

“ EWG ” means an “exempt wholesale generator,” as such term is defined in Section 1262(6) of PUHCA and the FERC regulations at 18 C.F.R. § 366.1.

“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date hereof, (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

“ Federal Funds Effective Rate ” means, for any day, the rate per annum (rounded upward to the nearest one one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the Closing Date.

“ Federal Reserve Board ” means the Board of Governors of the Federal Reserve System.

“ Federal Tax Benefit ” means (a) the eligibility of the Project for the ITC, (b) the eligibility of the Project for 5-year MACRS tax depreciation provided by Section 168 of the Code, (c) the treatment of Borrower as either a disregarded entity or a partnership, in each case, for income tax purposes, and (d) treatment of the Class A Member as a partner of, and not a lender to, Holdings, including for purposes of Section 7701(o) of the Code.

“ Federal Tax Benefits Change of Law Event ” means both (a) no material adverse change in tax law has occurred (including, without limitation, proposed regulations or other changes in how the IRS interprets or applies the Code as evidenced by way of written administrative rules or guidance, tax rulings, information releases, notices, announcements or other communications) and (b) no material adverse proposed change in tax law that has been passed by either house of Congress for which, based on the stated position of the Obama Administration and the indicated support for the bill in either house of Congress is reasonably likely to become law, has occurred.

“ FERC ” means the Federal Energy Regulatory Commission and its successors.

“ Final Completion ” shall have the meaning given in Schedule 4 hereof.

“ Financing Documents ” means, collectively, this Agreement, the Notes, the Collateral Documents and any other loan or security agreements or letter agreements or similar documents, agreements or instruments entered into in connection with any of the foregoing and designated a “Financing Document” (but excluding, for the avoidance of doubt, the NES Escrow Agreement and the NES Escrow Account Disbursement Agreement).

“ Flood Laws ” shall have the meaning given in Section 10.18 hereof.

“ Flood Notice ” shall have the meaning given in Section 3.1(p) hereof.

“ FPA ” means the Federal Power Act, as amended, and all rules and regulations adopted by the FERC thereunder.

“ GAAP ” means generally accepted accounting principles in the United States of America consistently applied.

“ Governmental Authority ” means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, bureau or entity (including any taxing authority, zoning authority, FERC, NCUC, NERC, SERC Reliability Corporation, the Securities and Exchange Commission, the IRS, the Federal Deposit Insurance Corporation (or its successors), the Comptroller of the Currency or the Federal Reserve Board, any central bank or any comparable authority), or any arbitrator with authority to bind a party at law.

“ Governmental Rule ” means, with respect to any Person, any statute, law, rule, regulation, ordinance, rule of common law, order or binding interpretation, code, treaty, judgment, decree, directive, guidelines, policy or similar form of decision of any Governmental Authority, in each case applicable to or binding upon such Person or any of its properties or to which such Person or any of its property is subject, including any Environmental Law.

“ Hazardous Substances ” means any and all pollutants, contaminants, wastes, materials, substances, chemicals or explosive or radioactive substances which are subject to regulation or which can give rise to liability under any Environmental Law, including petroleum or petroleum distillates and breakdown constituents, asbestos or asbestos-containing materials, polychlorinated biphenyls, chlorinated solvents, or radon gas.

“ Holdings ” means IS-31 Holdings, LLC, a Delaware limited liability company.

“ Holdings Operating Agreement ” means the Amended and Restated Limited Liability Company Agreement of IS-31 Holdings, LLC, dated as of the Closing Date, by and between Class A Member and Class B Member, as the same may from time to time be further supplemented, amended, amended and restated or otherwise modified to the extent permitted under this Agreement.

“ Holdings Pledge Agreement ” means the Pledge Agreement, dated as of the Closing Date, by Holdings in favor of Collateral Agent.

“ Indemnified Taxes ” shall have the meaning given in Section 2.5(d)(i) hereof.

“ Indemnitees ” and “ Indemnitee ” shall have the respective meanings given in Section 5.22(a) hereof.

“ Independent Consultants ” means, collectively, the Insurance Consultant, the Environmental Consultant and the Independent Engineer or their respective replacements appointed pursuant to Section 11.1 hereof.

“ Independent Engineer ” means DNV GL, or any replacement to the Independent Engineer appointed pursuant to Section 11.1 hereof.

“ Independent Engineer’s Report ” means the Preconstruction Due Diligence Report prepared by the Independent Engineer.

“ Insurance Consultant ” means Traxler & Tong, Inc., or any replacement to the Insurance Consultant appointed pursuant to Section 11.1 hereof.

“ Insurance Consultant’s Report ” shall have the meaning given in Section 3.1(h)(i) hereof.

“ Insurance Proceeds ” shall have the meaning given in the Depositary Agreement.

“ Insurance Requirements ” means the provisions set forth on Exhibit I hereof.

“ Interconnection Agreement ” means that certain North Carolina Interconnection Agreement, dated as of October 17, 2014, by and between the Interconnector and Borrower.

“ Interconnector ” means Duke Energy Progress, LLC (f/k/a Duke Energy Progress, Inc.), a North Carolina limited liability company.

“ Interest Period ” means, with respect to any Eurodollar Loan, the time periods selected by Borrower pursuant to Section 2.1 hereof (in accordance with Section 2.2(b) hereof).

“ Interest Rate Type ” means a Base Rate Loan or a Eurodollar Loan, as applicable.

“ Inverter Supplier ” means KACO new energy, Inc.

“ IRS ” means the United States Internal Revenue Service, or any successor agency.

“ ITC ” means any investment tax credit provided for with respect to the Project within the meaning of Section 48 of the Code or any successor to such section.

“ ITC Bridge Loan ” and “ ITC Bridge Loans ” shall have the respective meanings given in Section 2.1(b)(ii) hereof.

“ ITC Bridge Loan Commitment ” means, at any time with respect to each Lender, such Lender’s Proportionate Share of the Total ITC Bridge Loan Commitment at such time.

“ ITC Bridge Loan Commitment Fees ” shall have the meaning given in Section 2.4(b)(ii) hereof.

“ ITC Bridge Loan Facility ” shall have the meaning given in Section 2.1(b)(i) hereof.

“ ITC Bridge Loan Note ” and “ ITC Bridge Loan Notes ” shall have the meanings given in Section 2.2(e) hereof.

“ KeyBank ” shall have the meaning given in the preamble hereof.

“ Lease ” or “ Leases ” shall have the respective meanings set forth on Exhibit F-5 to this Agreement.

“ Lead Arranger ” means KeyBank in its capacity as Lead Arranger under this Agreement, or its successor in such capacity.

“ Legal Requirements ” means, as to any Person, any law (including any applicable Environmental Laws), treaty, rule or regulation, any requirement under a Permit or Applicable Approval, and any determination of any Governmental Authority, in each case applicable to or binding upon such Person or any of its properties or to which such Person or any of its property is subject.

“ Lenders ” means the banks or other financial institutions listed as such on Exhibit G to this Agreement, or as otherwise from time to time party as lenders to this Agreement, and their respective successors and assigns, and “ Lender ” means any of the Lenders.

“ Lending Office ” means, with respect to any Lender, the office designated as such beneath the name of such Lender on Exhibit G hereof or such other office of such Lender as such Lender may specify in writing from time to time to Administrative Agent and Borrower.

“ Lien ” on any asset means any mortgage, deed of trust, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected or effective under applicable law, or any preference, priority or preferential arrangement of any kind or nature whatsoever including the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.

“ Liquidation Costs ” shall have the meaning given in Section 2.7 hereof.

“ Loans ” means, collectively, the Construction Loans and the ITC Bridge Loans (including all subsets of such Loans as delineated in this Agreement), and “ Loan ” means any of the Loans.

“ Loan Period ” means the period from the Closing Date to the Maturity Date.

“ Loss Proceeds Account ” shall have the meaning given in Section 7.2 hereof.

“ Major Project Participants ” means (a) the EPC Contractor, (b) the Power Purchaser, (c) the O&M Contractor, (d) each Module Supplier, (e) each Module Warranty Provider, (f) the Inverter Supplier, (g) the Tracker Supplier, (h) the Interconnector and (i) each other Warranty Provider.

“ Mandatory Prepayment ” means a prepayment of Obligations required of Borrower pursuant to this Agreement.

“ Material Adverse Effect ” means (a) a material adverse change in the status of the business, assets, liabilities, results of operations or condition (financial or otherwise) of Borrower, Holdings, Sponsor, Class B Member or the Project, or (b) a material adverse change in (i) the ability of any of Sponsor, any Borrower Entity, Class B Member, the Power Purchaser, the O&M Contractor, any Warranty Provider, the Interconnector or the EPC Contractor to perform any of their material obligations under the applicable Transaction Documents, (ii) the ability of the Lenders or the other Secured Parties to enforce any of the Obligations or material rights or remedies under the Financing Documents, (iii) the validity, priority or perfection of Collateral Agent’s security interests in and Liens on the Collateral or (iv) the ability of the Class A Member to fund the applicable portion of the Tax Equity Funding Amount on or before such amount is required to be funded on each Tax Equity Funding Date.

“ Material Project Documents ” means the Power Purchase Agreement, the Interconnection Agreement, the EPC Agreement, the EPC Guaranty, the Module Supply Agreement, the O&M Agreement, the MIPA, the Warranty Agreements, the Development Agreement and the Leases.

“ Maturity ” or “ maturity ” means, with respect to any Loan, Borrowing, interest, fee or other amount payable by Borrower under this Agreement or the other Financing Documents, the date such Loan, Borrowing, interest, fee or other amount becomes due, whether upon the stated maturity or due date, upon acceleration or otherwise.

“ Maturity Date ” means the earliest to occur of (a) February 28, 2017, (b) the making of the NES ECCA Equity Contribution or the Tax Equity Tranche B Equity Contribution, and (c) such earlier date on which the entire outstanding principal balance of the Loans, together with all unpaid interest, fees, charges and costs, become due and payable under this Agreement.

“ MBR Authority ” means a final non-appealable order from FERC pursuant to Section 205 of the FPA authorizing the sale at wholesale of electric energy, capacity and ancillary services at market-based rates, accepting a tariff providing for such sales, and granting such waivers and blanket authorizations as are customarily granted by FERC to a similarly-situated company that sells wholesale electric energy, capacity and ancillary services at market-based rates, including blanket authorization to issue securities and assume liabilities pursuant to Section 204 of the FPA; provided that such order from FERC shall be deemed to be final and non-appealable upon issuance in the event that no third party intervenes in the proceeding.

“ Memorandum of Lease ” means, for each Lease, an accurate summary of such Lease, detailing at a minimum the parties to such Lease and the term of such Lease, and which is in a form suitable for recording in the jurisdiction where the property subject to such Lease is located.

“ MIPA ” means the Membership Interest Purchase Agreement, dated as of June 14, 2016, between Innovative Solar Systems, LLC, a North Carolina limited liability company and Holdings, as supplemented, amended, amended and restated or otherwise modified from time to time to the extent permitted under this Agreement.

“ Modules ” shall have the meaning given in Schedule 3 hereof.

“ Module Supplier ” means Canadian Solar (USA) Inc.

“ Module Supply Agreement ” means that certain Module Sales Contract, dated as of July 1, 2016, between Module Supplier and Holdings, as assigned to Borrower pursuant to that certain Bill of Sale, Assignment and Assumption Agreement, dated as of the Closing Date.

“ Module Warranty Provider ” means Canadian Solar Inc.

“ Mortgaged Property ” means the “Property”, as defined in the Deed of Trust.

“ Multiemployer Plan ” means any ERISA Plan that is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which Borrower, Class B Member, Holdings or any member of the Controlled Group is making, or has an obligation to make, contributions, or has made, or has been obligated to make, contributions since the date which is six years immediately preceding the Closing Date.

“ NCUC ” means the North Carolina Utilities Commission.

“ NERC ” means the North American Electric Reliability Corporation.

“ NES ” means NES US-NC-31 LLC, a Delaware limited liability company.

“ NES ECCA ” means, that certain Equity Capital Contribution Agreement, dated as of the Closing Date by and among NES, Class B Parent and VivoPower US-NC-31 LLC, as amended, modified or supplemented from time to time to the extent permitted in this Agreement.

“ NES ECCA Equity Contribution ” means the making of the final equity contribution by NES under the NES ECCA at or after the Commercial Operation Date, in an amount of no less than the then-unfunded portion of the NES Funding Amount.

“ NES Escrow Account ” means a blocked escrow deposit account or securities account maintained at the NES Escrow Bank in accordance with the terms of the NES Escrow Agreement.

“ NES Escrow Account Disbursement Agreement ” means that certain Escrow Account Disbursement Agreement, dated as of the Closing Date, by and among Administrative Agent, NES and Class B Parent, as supplemented, amended, amended and restated or otherwise modified from time to time, and in form and substance reasonably acceptable to Administrative Agent

“ NES Escrow Agreement ” means that certain Escrow Agreement, dated as of the Closing Date, by and among Administrative Agent, NES, the NES Escrow Bank and Class B Parent, as supplemented, amended, amended and restated or otherwise modified from time to time, and in form and substance reasonably acceptable to Administrative Agent.

“ NES Escrow Bank ” means U.S. Bank National Association, a national banking association.

“ NES Funding Amount ” means an amount no less than Forty-One Million Six Hundred Fifty Thousand Dollars ($41,650,000).

“ NES Funding Date ” means the Investor Funding Date, as defined in the NES ECCA.

“ Non-Recourse Party ” and “ Non-Recourse Parties ” shall have the respective meanings given in Article 9 hereof.

“ Note ” and “ Notes ” shall have the meanings given in Section 2.2(e) hereof.

“ Notice of Borrowing ” shall mean a written notice of Borrowing in the form of Exhibit B-1 .

“ Notice of Inability to Determine Rates ” shall have the meaning given in Section 2.6(e) hereof.

“ O&M Agreement ” means the Operation and Maintenance Agreement, dated as of the Closing Date, by and between O&M Contractor and Borrower.

“ O&M Contractor ” means Grupo Gransolar, LLC, a Delaware limited liability company.

“ O&M Costs ” means all actual cash maintenance and operation costs incurred and paid for or in relation to the Project by Borrower in any particular calendar or fiscal year or period to which said term is applicable, state and local taxes, insurance, consumables, payments under any lease, payments pursuant to the agreements for the management, operation and maintenance of the Project (including pursuant to the O&M Agreement), reasonable legal fees, costs and expenses paid by Borrower in connection with the management, maintenance or operation of the Project, costs and expenses paid by Borrower in connection with obtaining, transferring, maintaining or amending any Applicable Permits and reasonable general and administrative expenses, but exclusive in all cases of any non-cash charges, including depreciation or obsolescence charges or reserves therefor, amortization of intangibles or other bookkeeping entries of a similar nature, and also exclusive of all interest charges and charges for the payment or amortization of principal of indebtedness of Borrower (other than those relating to Debt permitted pursuant to Sections 6.3(c) , 6.3(d) and 6.3(e) hereof).

“ Obligations ” means, collectively, (a) all Debt, loans, advances, debts, liabilities (including any indemnification or other obligations that survive the termination hereof and of the other Financing Documents), letter of credit reimbursement obligations and other obligations, howsoever arising (including guarantee obligations and indemnification), owed by Borrower or Holdings to Administrative Agent, Collateral Agent or the Lenders of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, pursuant to the terms of this Agreement, the Collateral Documents or any of the other Financing Documents, including all interest, fees (including Other Fees and Commitment Fees), charges, expenses, attorneys’ fees and accountants fees chargeable to Borrower or payable by Borrower or Holdings thereunder, (b) any and all sums advanced by Administrative Agent or Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral and (c) in the event of any proceeding for the collection or enforcement of the obligations described in clauses (a) and (b) of this definition, after an Event of Default shall have occurred and be continuing, the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by Administrative Agent or Collateral Agent of their rights under the Collateral Documents, together with any necessary attorneys’ fees and court costs.

“ OFAC ” means the United States Department of Treasury Office of Foreign Assets Control.

“ OFAC Laws ” means any laws, regulations, and executive orders relating to the economic sanctions programs administered by OFAC, including, without limitation, the International Emergency Economic Powers Act, 50 U.S.C. sections 1701 et seq., the Trading with the Enemy Act, 50 App. U.S.C. sections 1 et seq., and the Office of Foreign Assets Control, Department of the Treasury Regulations, 31 C.F.R. Parts 500 et seq. (implementing the economic sanctions programs administered by OFAC).

“ OFAC SDN List ” means the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC.

“ OFAC Violation ” shall have the meaning given in Section 5.30(d) hereof.

“ Operating Agreements ” means, collectively, the (a) Borrower Operating Agreement and (b) Holdings Operating Agreement.

“ Operative Documents ” means, collectively, the Financing Documents, the NES Escrow Agreement and the Project Documents, and “ Operative Document ” means any of the Operative Documents.

“ Organizational Documents ” means, as to any Person, the articles of incorporation, certificate of formation, articles of organization, bylaws, operating or limited liability company agreement, partnership agreement, or other organizational or governing documents of such Person, including, in the case of Borrower and Holdings, the Operating Agreements.

“ Other Fees ” shall have the meaning given in Section 2.4(a) hereof.

“ Other Taxes ” shall have the meaning given in Section 2.5(d)(i) hereof.

“ Participant Register ” shall have the meaning given in Section 10.13(b) hereof.

“ Patriot Act ” shall have the meaning given in Section 4.26(a)(i) hereof.

“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under Title IV of ERISA.

“ Permit ” means any approval, consent, waiver, exemption, variance, franchise, order, permit, authorization, notification, certification, registration, ruling, filing with, or right or license of or from a Governmental Authority.

“ Permitted Encumbrances ” shall have the meaning given in Section 3.1(m)(ii)(A) hereof.

“ Permitted Liens ” means: (a) the Liens created by, and other rights and interests of Collateral Agent and the other Secured Parties as provided in, the Operative Documents; (b) Liens imposed by any Governmental Authority for Taxes, either (i) secured by a bond reasonably acceptable to Administrative Agent or (ii) not yet due or (iii) being contested in good faith and by appropriate proceedings and in respect of which appropriate reserves have been established in accordance with GAAP, so long as (A) such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of the Project or the Site (or any material portion thereof), title thereto or any material interest therein and shall not interfere in any material respect with the use or disposition of the Project or the Site (or any material portion thereof), or (B) a bond or other security acceptable to Administrative Agent in its reasonable discretion has been posted or provided in such manner and amount as to assure Administrative Agent that any Taxes determined to be due will be promptly paid in full when such contest is determined; (c) materialmen’s, mechanics’, workers’, repairmen’s, employees’ or other like Liens arising in the ordinary course of business either for amounts not yet due or for amounts being contested in good faith and by appropriate proceedings so long as (i) such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material part of the Project or the Site, title thereto or any material interest therein and shall not interfere in any material respect with the use or disposition of the Project or the Site, and (ii) a bond or other security acceptable to Administrative Agent in its reasonable discretion has been posted or provided in such manner and amount as to assure Administrative Agent that any amounts determined to be due will be promptly paid in full when such contest is determined; (d) Permitted Encumbrances; (e) Liens incurred in the ordinary course of business in connection with worker’s compensation, unemployment insurance, social security and other Governmental Rules and that do not in the aggregate materially impair the use of the property or assets of Borrower or Holdings or the value of such property or assets for the purposes of such business; (f) minor defects, easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, licenses, restrictions on the use of property or minor imperfections in title and other land use and environmental rules or regulations of any Governmental Authority that do not secure any monetary obligations and which do not materially impair the property affected thereby for the purpose for which title was acquired or interfere with the operation of the Project as contemplated by the Operative Documents; (g) Liens, deposits or pledges to secure statutory obligations or performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or for purposes of like general nature in the ordinary course of business; (h) involuntary Liens junior to the Liens of the Collateral Documents (including a lien of an attachment, judgment or execution) securing a charge or obligation, on Borrower’s property, either real or personal, whether now or hereafter owned, in the aggregate sum of less than Twenty-Five Thousand Dollars ($25,000); (i) Liens and any right of setoff in favor of the Depositary granted pursuant to Section 3.5 of the Depositary Agreement; and (j) judgment Liens that do not involve any risk of forfeiture of the Project prior to the Maturity Date and, within ten (10) Business Days of their existence, or after the entry thereof, are being contested in good faith and by appropriate proceedings, and, if the judgment Lien exceeds One Hundred Fifty Thousand Dollars ($150,000), adequate reserves in accordance with GAAP have been provided for the Lien or the Lien is fully covered by insurance, bonds or other reasonable security.

“ Person ” means any natural person, corporation, limited liability company, partnership, firm, association, Governmental Authority or other entity whether acting in an individual, fiduciary or other capacity.

“ Plan ” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including any employee pension benefit plan that is maintained or is contributed to by Borrower or any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code), maintained for employees of Borrower or any ERISA Affiliate or any such Plan to which Borrower or any ERISA Affiliate is required to contribute on behalf of its employees.

“ Plans and Specifications ” means the plans and specifications for the construction and design of the Project, including any document describing the scope of work performed by the EPC Contractor under the EPC Agreement or any other contract or subcontract for the construction of the Project and any feeder lines and interconnections, all work drawings, engineering and construction schedules, project schedules, project monitoring systems, specifications status lists, material and procurement ledgers, drawings and drawing lists, manpower allocation documents, management and project procedures documents, project design criteria, and any other document referred to in the EPC Agreement or any of the documents referred to in this definition, as the same may be amended to the extent permitted by this Agreement.

“ Power Purchase Agreement ” or “ PPA ” means the Power Purchase Agreement, dated June 30, 2015, by and between the Power Purchaser and Borrower, as the same may from time to time be amended, restated or otherwise modified or replaced.

“ Power Purchaser ” means Duke Energy Progress, LLC (f/k/a Duke Energy Progress, Inc.), a North Carolina limited liability company.

“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by KeyBank, at its offices in Cleveland, Ohio, as such bank’s prime rate with respect to extensions of credit made by it in the United States; and each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“ Proceeds ” shall have the meaning given in Section 7.7 hereof.

“ Project ” means the approximately 34.2 MW (AC) solar photovoltaic project in Bladen County, North Carolina that is referred to as the IS31 Project.

“ Project Budget and Schedule ” shall have the meaning given in Section 3.1(bb) hereof.

“ Project Costs ” means: (a) the cost of designing, engineering, equipping, procuring, constructing, starting up and testing the Project; (b) the cost of constructing or procuring the construction of the collection system and interconnection of the Project to the relevant electrical substation therefor; (c) the cost of acquiring any lease and any other necessary interest in the Site; (d) real and personal property taxes, ad valorem taxes, sales, use and excise taxes and insurance (including title insurance) premiums payable with respect to the Project prior to COD; (e) interest payable on any Note and financing-related fees (including Other Fees and Commitment Fees) and costs incurred with respect to the Project, prior to COD; (f) initial working capital requirements of the Project incurred prior to COD; (g) the costs of acquiring Permits for the Project prior to COD; (h) all general and administrative costs of Borrower, Class B Member, Holdings and Sponsor attributable to the Project prior to COD; (i) the cost of establishing a spare parts inventory for the Project (if any); (j) operating costs incurred prior to COD; (k) the cost of performance security or delay liquidated damages pursuant to any Project Document; and (l) other fees, costs and expenses relating to the development, construction and financing (including any tax equity financing) for the Project, including financial, legal and consulting fees, costs and expenses, together with a contingency allowance in respect of the EPC Agreement, in each case, including any such fees, costs and expenses incurred prior to Closing; provided that (i) all Project Costs shall be set forth in the Project Budget and Schedule and in accordance with the Project Budget and Schedule and (ii) the total aggregate amount of such Project Costs (including developer fees) shall not exceed Seventy-Nine Million Three Hundred Two Thousand Six Hundred Seventy-One Dollars ($79,302,671).

“ Project Documents ” means the Material Project Documents, all Real Property Documents, the Additional Project Documents and any other agreement to which Borrower is a party relating to the ownership, development, construction or operation of the Project (but excluding the Financing Documents, the Tax Equity Documents and the Operating Agreements).

“ Project Revenues ” means all income and receipts derived from the ownership or operation of the Project, including payments and liquidated damages paid to Borrower under the Power Purchase Agreement, the Interconnection Agreement, the EPC Agreement, the O&M Agreement, the EPC Guaranty and any other contract or agreement of Borrower, proceeds of any business interruption or delay in start-up insurance, other income derived from the sale or use of electric energy transmitted or distributed by the Project, and any receipts derived from the sale of any property pertaining to the Project or incidental to the operation of the Project, the investment income on amounts in the Accounts attributable to the Project, the proceeds of any condemnation awards relating to the Project and proceeds from the sale of any Collateral.

“ Proportionate Share ” means with respect to each Lender, the percentages set forth opposite such Lender’s name on Exhibit H to this Agreement, as the context may require, under the heading “Aggregate Commitment”, “Construction Loan Commitment” or “ITC Bridge Loan Commitment”, in each case as such Exhibit H may be amended from time to time by Administrative Agent upon notice to Borrower from time to time as a result of assignments of Commitments or Loans by a Lender.

“ Proposal Letter ” means the Proposal Letter dated April 6, 2016, among KeyBank as Lead Arranger and Sponsor, as supplemented, amended, amended and restated or otherwise modified from time to time.

“ Prudent Utility Practices ” means those practices, methods, equipment, specifications and standards of safety and performance, of which there may be more than one, and as the same may change from time to time, as are commonly used by solar electric generation facilities of a type and size similar to the Project in the United States as good, safe and prudent engineering practices in connection with the design, construction, operation, maintenance, repair and use of electrical and other equipment, facilities and improvements of such solar electrical generation facilities, with commensurate standards of safety, performance, dependability, efficiency and economy. Prudent Utility Practices includes, but is not limited to, taking reasonable steps to ensure that: (a) equipment, materials, resources and supplies are available to meet the needs of the Project; (b) the equipment will function properly under both normal and emergency conditions at the Project; (c) appropriate monitoring and testing are performed to ensure equipment is functioning as designed; and (d) equipment is not operated in a negligent manner, or in a manner unsafe to workers, the general public, or contrary to Environmental Law or regulations or without regard to defined limitations such as flood conditions, safety inspection requirements, operating voltage, current, volt-ampere reactive (VAR) loading, frequency, rotational speed, polarity, synchronization, and/or control system limits.

“ PUHCA ” means the Public Utility Holding Company Act of 2005, as amended, and all rules and regulations adopted thereunder.

“ PURPA ” means the Public Utility Regulatory Policies Act of 1978, as amended, and all FERC rules and regulations adopted thereunder.

“ Qualifying Facility ” or “ QF ” means a “qualifying small power production facility” as defined in Section 3(17)(C) of the FPA, 16 U.S.C. § 796(17)(C), and the implementing regulations of the FERC at 18 C.F.R. §§ 292.101(b)(1) and 292.203(a).

“ Quarterly Date ” means the last Business Day for the month of March, June, September and December of each calendar year, commencing on the last Business Day of September, 2016.

“ Real Property ” means, collectively, all real property interests held by Borrower, which Borrower owns in fee or in which it holds a leasehold interest as a tenant, a subleasehold interest as a subtenant, an easement right as an easement holder or a license right as a licensee, or a co-tenancy interest as a tenant-in-common, including, without limitation, the real property more particularly identified in the Title Policy, which provides Borrower with leasehold, subleasehold and easement interests with respect to the Site between Borrower and various land owners.

“ Real Property Documents ” means any documents, agreements or instruments pursuant to which Borrower has rights in Real Property or pertaining to Borrower’s rights in Real Property, or which memorialize such rights, including, without limitation, each Lease, each Memorandum of Lease, and any estoppel agreements, easements, non-disturbance agreements, deeds and rights of way.

“ Recipient ” shall have the meaning given in Section 12.18 hereof.

“ Register ” shall have the meaning given in Section 2.2(d)(i) hereof.

“ Regulation D ” means Regulation D of the Federal Reserve Board (or any successor).

“ Regulatory Change ” means any change after the Closing Date in federal, state, local or foreign laws, regulations, Legal Requirements or requirements under Applicable Permits, or the adoption or making after such date of any interpretations, directives or requests of or under any federal, state, local or foreign laws, regulations, Legal Requirements or requirements under Applicable Permits (whether or not having the force of law) by any Governmental Authority charged with the interpretation or administration thereof.

“ Release ” means disposing, discharging, injecting, spilling, leaking, leaching, dumping, pumping, pouring, emitting, escaping, emptying, seeping, placing and migrating of any Hazardous Substance into or upon any land or water or air or otherwise entering into the environment.

“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty (30) day notice period is waived by the PBGC.

“ Required Lenders ” means at any time Lenders having Proportionate Shares which, in the aggregate, represent more than fifty percent (50%) of the Proportionate Shares of all Lenders at such time; provided that the Proportionate Share of any Substitutable Lender shall be disregarded in determining Required Lenders at any time.

“ Reserve Percentage ” means, for any day, that percentage (expressed as a decimal) that is in effect on such day, as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including, without limitation, all basic, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) for a member bank of the Federal Reserve System in Cleveland, Ohio, in respect of Eurocurrency Liabilities (as defined in Regulation D of the Federal Reserve Board, as in effect from time to time). The Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Percentage.

“ Reserve Requirement ” means, with respect to any Lender, the maximum rate (expressed as a percentage) at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained during the Interest Period therefor under Regulation D by such Lender. Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by such Lender, by reason of any Regulatory Change against (a) any category of liabilities which includes deposits by reference to which the Eurodollar Rate, the Base Rate or Loans is to be determined, (b) any category of liabilities or extensions of credit or other assets which include Loans or (c) any category of liabilities or extensions of credit which are considered irrevocable commitments to lend, unless such Loans are exempt from this foregoing list.

“ Responsible Officer ” means, as to any Person, the president, the chief executive officer, the chief financial officer, any vice president, the treasurer, the secretary, any assistant secretary, any manager, any managing general partner, any managing member of such Person or of any managing general partner or any managing member or sole member of such Person, or any authorized representative of such Person.

“ Restricted Payment ” means (a) any dividend or other distribution by Borrower (in cash, property, securities or obligations) on, or other dividends or distributions on the account of, or the setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement or other acquisition by Borrower of, any portion of any membership interest in Borrower; and (b) all payments (in cash, property, securities or obligations) of principal of, interest on and other amounts with respect to, or other payments on account of, or the setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement or other acquisition by Borrower of, any Debt owed to Holdings, Sponsor or any of their respective Affiliates.

“ Scheduled Final Completion Date ” shall mean March 1, 2017.

“ Secured Parties ” means, collectively, Administrative Agent, Collateral Agent and the Lenders, and “ Secured Party ” means any of the Secured Parties.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Security Agreement ” means the Security Agreement, dated as of the Closing Date, by Borrower in favor of Collateral Agent.

“ Site ” means all parcels or tracts of real property upon which any portion of the Project is or will be situate in connection with the development, construction or operation of the Project, in each case as described in Schedule 5 to this Agreement.

“ Site Owners ” means, collectively, the fee owners of the Site (or any portion thereof), and “ Site Owner ” means any of the Site Owners.

“ Sponsor ” means VivoPower USA LLC, a Delaware limited liability company.

“ State ” shall mean (a) any state of the United States of America or (b) the District of Columbia.

“ Subject Persons ” shall have the meaning given in Section 8.4(a) hereof.

“ Substantial Completion ” shall have the meaning given in Schedule 6 to this Agreement.

“ Substitutable Lender ” shall have the meaning given in Section 10.12 hereof.

“ Survey ” shall mean a signed and certified ALTA/ACSM Land Survey of the Site.

“ Tax Equity Documents ” means, collectively, (i) the Tax Equity ECCA, (ii) the Holdings Operating Agreement, (iii) the Tax Equity Guaranty and (iv) the other “Investment Documents” as defined in and referred to within the Holdings Operating Agreement (but excluding the Borrower Operating Agreement and any document specifically designated as a Material Project Document herein), and “ Tax Equity Document ” means any of the Tax Equity Documents.

“ Tax Equity ECCA ” means that certain Equity Capital Contribution Agreement, dated as of the Closing Date by and among Class A Member, Class B Member and Holdings, as amended, modified or supplemented from time to time to the extent permitted in this Agreement.

“ Tax Equity Tranche A Equity Contribution ” means the making of the Investor Tranche A Funding Date Contribution by Class A Member under (and as such term is defined in) the Tax Equity ECCA.

“ Tax Equity Tranche B Equity Contribution ” means the making of the Investor Tranche B Funding Date Contribution by Class A Member under (and as such term is defined in) the Tax Equity ECCA, in an amount of no less than then-unfunded portion of the Tax Equity Funding Amount.

“ Tax Equity Funding Amount ” means an amount no less than Twenty-Seven Million One Thousand Four Hundred Fifty-Four Dollars ($27,001,454) to be funded under Article III of the Holdings Operating Agreement by the Class A Member in respect of the Project.

“ Tax Equity Funding Date ” means each Funding Date, as such term is defined in the Tax Equity ECCA.

“ Tax Equity Guarantor ” means U.S. Bancorp, a Delaware corporation.

“ Tax Equity Guaranty ” means that certain Guarantee, dated as of the Closing Date, by Tax Equity Guarantor in favor of Class B Member, Holdings and Collateral Agent.

“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Terrorism Order ” shall have the meaning given in Section 4.26(a)(i) hereof.

“ Title Insurer ” means First American Title Insurance Company and its successors or assigns.

“ Title Policy ” shall have the meaning given in Section 3.1(m)(ii) .

“ Total Construction Loan Commitment ” shall have the meaning given in Section 2.3(a)(i) hereof.

“ Total ITC Bridge Loan Commitment ” shall have the meaning given in Section 2.3(a)(ii) hereof.

“ Tracker Supplier ” means PV Hardware, LLC.

“ Transaction Documents ” means the Operative Documents, the NES ECCA and the Tax Equity Documents.

“ UCC ” means the Uniform Commercial Code of the jurisdiction the law of which governs the document in which such term is used or which governs the creation or perfection of the Liens granted thereunder.

“ UCC Financing Statement ” means a financing statement filed or to be filed in accordance with the UCC, as in effect from time to time, in the relevant State or States.

“ United States ” and “ U.S . ” each means the United States of America.

“ United States Person ” means a domestic corporation or any other person defined as a United States person in Section 7701(a)(30) of the Code.

“ Warranty Agreement ” and “ Warranty Agreements ” shall have the respective meanings given in Schedule 3 to this Agreement.

“ Warranty Providers ” means those certain warranty providers under the Warranty Agreements in respect of modules, trackers, racking systems and inverters.

1.2 Rules of Interpretation . Except as otherwise expressly provided, the rules of interpretation set forth below shall apply to this Agreement and the other Financing Documents.

(a) The singular includes the plural and the plural includes the singular, and meanings given to defined terms shall be equally applicable to both the singular and plural forms of the defined terms.

(b) The word “or” is not exclusive.

(c) A reference to a Governmental Rule includes any amendment or modification to such Governmental Rule, and all regulations, rulings and other Governmental Rules promulgated under such Governmental Rule.

(d) A reference to a Person includes its successors and permitted assigns.

(e) Accounting terms have the meanings assigned to them by GAAP, as applied by the accounting entity to which they refer.

(f) The words “include,” “includes” and “including” are not limiting.

(g) A reference in a document to an Article, Section, Exhibit, Schedule, Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex or Appendix of such document unless otherwise indicated. Exhibits, Schedules, Annexes or Appendices to any document shall be deemed incorporated by reference in such document.

(h) References to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, and (b) shall mean such document, instrument or agreement as amended, restated, modified and supplemented from time to time (to the extent permitted under the Financing Documents) and in effect at any given time.

(i) The words “hereof,” “herein” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole and not to any particular provision of such document.

(j) References to “days” shall mean calendar days, unless the term “Business Days” shall be used. References to a time of day shall mean such time in New York, New York, unless otherwise specified.

(k) The Financing Documents are the result of negotiations between and among, and have been reviewed by, Borrower, Administrative Agent, Collateral Agent, each Lender, and their respective counsel. Accordingly, the Financing Documents shall be deemed to be the product of all parties thereto, and no ambiguity shall be construed in favor of or against Borrower, Administrative Agent, Collateral Agent or any Lender.

(l) The words “will” and “shall” shall be construed to have the same meaning and effect.

ARTICLE 2
THE CREDIT FACILITIES

2.1 Construction Loan Facility and ITC Bridge Loan Facility .

(a) Construction Loan Facility .

(i) Availability . Subject to the terms and conditions set forth in this Agreement, each Lender severally agrees to advance to Borrower, from time to time during the Loan Period, such loans as Borrower may request under this Section 2.1(a) (individually, a “ Construction Loan ” and collectively the “ Construction Loans ”), in an aggregate principal amount not to exceed such Lender’s Construction Loan Commitment (the Construction Loan Commitments of all Lenders being the “ Construction Loan Facility ”); provided that, after giving effect to the making of any Construction Loans, in no event shall the Aggregate Construction Loans exceed the Total Construction Loan Commitment.

(ii) Notice of Borrowing for Construction Loans . Borrower shall request Construction Loans by delivering to Administrative Agent at least five Business Days before the date of a requested Borrowing of Construction Loans, a Notice of Borrowing, appropriately completed, which specifies, among other things:

(A) That the Borrowing will consist of Construction Loans;

(B) The amount of the requested Borrowing, which shall be in the minimum amount of Two Hundred Fifty Thousand Dollars ($250,000) or an integral multiple of Fifty Thousand Dollars ($50,000) in excess thereof (except for the amount made on Borrower’s final Borrowing of Construction Loans that shall be in an amount not to exceed the then-current Available Construction Loan Commitment) or such other amount agreed to by Administrative Agent;

(D) The date of the requested Borrowing, which shall be a Business Day;

(E) Whether the Construction Loans then being requested are to be (or what portion thereof are to be) Base Rate Loans or Eurodollar Loans; provided that if no selection is made as to the Interest Rate Type of any Construction Loans, such Construction Loans shall be deemed to be Base Rate Loans;

(F) The initial Interest Periods selected by Borrower for such Construction Loans that are Eurodollar Loans; and

(G) That Borrower has satisfied all conditions precedent to the making of such Borrowing under Article 3 of this Agreement.

Administrative Agent shall promptly provide the Lenders with a copy of each such Notice of Borrowing. Except as permitted by Administrative Agent in its sole discretion, no more than two such Notices of Borrowing may be provided in any calendar month during the Loan Period.

(iii) Construction Loan Interest Rate .

(A) Each Construction Loan shall be either a Base Rate Loan or a Eurodollar Loan as Borrower may request in its Notice of Borrowing delivered to Administrative Agent pursuant to Section 2.1(a)(ii) , and thereafter, the basis for determining the interest rate with respect to each Construction Loan may be changed from time to time pursuant to Section 2.2(b)(ii) .

(B) Borrower shall pay interest (including interest accruing after the commencement of an insolvency proceeding under applicable Bankruptcy Law) on the unpaid principal amount of each Construction Loan that is a Eurodollar Loan, accruing from the date of the funding of (or conversion to) such Eurodollar Loan until the date of repayment or prepayment thereof (or conversion thereof to a Base Rate Loan), at a rate per annum in effect during each Interest Period for such Eurodollar Loan equal to the Eurodollar Rate for the relevant Interest Period plus the Applicable Construction Loan Margin (Eurodollar Rate). Borrower shall pay interest (including interest accruing after the commencement of an insolvency proceeding under applicable Bankruptcy Law) on the unpaid principal amount of each Construction Loan that is a Base Rate Loan, accruing from the date of the funding of (or conversion to) such Base Rate Loan until the date of repayment or prepayment thereof (or conversion thereof to a Eurodollar Loan), at a rate per annum equal to the Base Rate in effect during such period plus the Applicable Construction Loan Margin (Base Rate).

(C) In the event that an Event of Default shall have occurred and be continuing, upon notice by Administrative Agent to Borrower (provided that no such notice shall be required upon the occurrence of an Event of Default under Section 8.4 with respect to any Borrower Entity, in which case the Default Rate shall apply automatically), the Default Rate shall apply to all then outstanding Construction Loans from and after the date of the occurrence of such Event of Default until such Event of Default is no longer continuing (as determined by Administrative Agent acting at the direction of the Required Lenders).

(iv) Construction Loan Principal Payments . Borrower shall repay to Administrative Agent, for the account of each Lender, on the Maturity Date, the aggregate unpaid principal amount of all Construction Loans made by such Lender.

(v) Use of Construction Loan Proceeds . Borrower shall use the proceeds of any Construction Loan solely for the purposes provided in Section 5.1 .

(b) ITC Bridge Loan Facility .

(i) Availability . Subject to the terms and conditions set forth in this Agreement, each Lender severally agrees to advance to Borrower, at any time and from time to time during the Loan Period, such loans as Borrower may request under this Section 2.1(b) (individually, an “ ITC Bridge Loan ” and collectively the “ ITC Bridge Loans ”), in an aggregate principal amount not to exceed such Lender’s ITC Bridge Loan Commitment (the ITC Bridge Loan Commitments of all Lenders being the “ ITC Bridge Loan Facility ”); provided that, (A) after giving effect to the requested Borrowing the Aggregate ITC Bridge Loans shall not exceed the Total ITC Bridge Loan Commitment, and (B) Borrower may only request ITC Bridge Loans after the Available Construction Loan Commitment is Zero Dollars ($0).

(ii) Notice of Borrowing for ITC Bridge Loans . Borrower shall request ITC Bridge Loans by delivering to Administrative Agent, at least five Business Days before the date of the requested Borrowing of ITC Bridge Loans, a Notice of Borrowing, appropriately completed, which specifies, among other things:

(A) That the Borrowing will consist of ITC Bridge Loans;

(B) The amount of the requested Borrowing, which shall be in the minimum amount of Two Hundred Fifty Thousand Dollars ($250,000) or an integral multiple of Fifty Thousand Dollars ($50,000) in excess thereof (except for the amount made on Borrower’s final Borrowing of ITC Bridge Loans, which shall be in an amount not to exceed the then-current Available ITC Bridge Loan Commitment) or such other amount agreed to by Administrative Agent;

(D) Whether the ITC Bridge Loans then being requested are to be (or what portion thereof are to be) Base Rate Loans or Eurodollar Loans; provided that if no selection is made as to the Interest Rate Type of any ITC Bridge Loans, such ITC Bridge Loans shall be deemed to be Base Rate Loans;

(E) The purpose and principal amount of each requested ITC Bridge Loan;

(F) The initial Interest Period selected by Borrower for such ITC Bridge Loans that are Eurodollar Loans; and

(G) That Borrower has satisfied all conditions precedent to the making of such Borrowing under Article 3 of this Agreement.

(iii) ITC Bridge Loan Interest Rate .

(A) Each ITC Bridge Loan shall be either a Base Rate Loan or a Eurodollar Loan as Borrower may request in its Notice of Borrowing delivered to Administrative Agent pursuant to Section 2.1(b)(ii) , and thereafter, the basis for determining the interest rate with respect to each ITC Bridge Loan may be changed from time to time pursuant to Section 2.2(b)(ii) .

(B) Borrower shall pay interest (including interest accruing after the commencement of an insolvency proceeding under applicable Bankruptcy Law) on the unpaid principal amount of each ITC Bridge Loan that is a Eurodollar Loan, accruing from the date of the funding of (or conversion to) such Eurodollar Loan until the date of repayment or prepayment thereof (or conversion thereof to a Base Rate Loan), at a rate per annum in effect during each Interest Period for such Eurodollar Loan equal to the Eurodollar Rate for the relevant Interest Period plus the Applicable ITC Bridge Loan Margin (Eurodollar Rate). Borrower shall pay interest (including interest accruing after the commencement of an insolvency proceeding under applicable Bankruptcy Law) on the unpaid principal amount of each ITC Bridge Loan that is a Base Rate Loan, accruing from the date of the funding of (or conversion to) such Base Rate Loan until the date of repayment or prepayment thereof (or conversion thereof to a Eurodollar Loan), at a rate per annum equal to the Base Rate in effect during such period plus the Applicable ITC Bridge Loan Margin (Base Rate).

(C) In the event that an Event of Default shall have occurred and be continuing, upon notice by Administrative Agent to Borrower (provided that no such notice shall be required upon the occurrence of an Event of Default under Section 8.4 with respect to any Borrower Entity, in which case the Default Rate shall apply automatically), the Default Rate shall apply to all then outstanding ITC Bridge Loans from and after the date of the occurrence of such Event of Default until such Event of Default is no longer continuing (as determined by Administrative Agent acting at the direction of the Required Lenders).

(iv) ITC Bridge Loan Principal Payments . Borrower shall repay to Administrative Agent, for the account of each Lender, on the Maturity Date, the aggregate unpaid principal amount of all ITC Bridge Loans made by such Lender.

(v) Use of ITC Bridge Loan Proceeds . Borrower shall use the proceeds of the ITC Bridge Loans solely for the purposes provided in Section 5.1 .

2.2 Interest Provisions Relating to All Loans; Loan Funding; Prepayments .

(a) Accrual and Payment Dates . Accrued interest shall be capitalized on the unpaid principal amount of: (i) each Eurodollar Loan (A) on the last day of each Interest Period related to such Eurodollar Loan, (B) upon any prepayment of such Eurodollar Loan as and to the extent provided herein, and (C) upon conversion of such Eurodollar Loan into a Base Rate Loan; and (ii) each Base Rate Loan (A) on each Quarterly Date, (B) upon conversion of such Base Rate Loan into a Eurodollar Loan, and (C) upon any prepayment of such Base Rate Loan as and to the extent provided herein. Accrued and unpaid Commitment Fees shall be capitalized on each Quarterly Date. Borrower shall pay all accrued Commitment Fees, and accrued interest (including fees and interest accrued after the commencement of an insolvency proceeding under applicable Bankruptcy Law) on the unpaid principal amount of each Loan, on the Maturity Date (whether by acceleration or otherwise).

(b) Eurodollar Loan Interest Periods .

(i) The initial and each subsequent Interest Period selected by Borrower for Eurodollar Loans shall be one month, two months or three months for Eurodollar Loans, or such other periods as Administrative Agent may approve in its sole and absolute discretion; provided that (A) any Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless such next Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding Business Day, (B) any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period, (C) Borrower may not select Interest Periods which would otherwise end after the Maturity Date, and (D) Borrower may not at any time have outstanding more than six different Interest Periods.

(ii) Subject to the Interest Periods provided for in Section 2.2(b)(i) , Borrower may elect, from time to time, to change the Interest Period or Interest Rate Type of each Loan, provided that (A) such election shall not be effective with respect to Eurodollar Loans until the end of the Interest Period in which the election is made; and (B) such election shall be in writing in the form of the Confirmation of Interest Period Selection defined below or such other form as is acceptable to Administrative Agent. Borrower may contact Administrative Agent at any time prior to the end of an Interest Period for a quotation of Eurodollar Rates in effect at such time for given Interest Periods. Borrower may select an Interest Period telephonically within the time periods specified in this Section 2.2 , which selection shall be irrevocable. Borrower shall confirm such telephonic notice to Administrative Agent by telecopy or other electronic means on the day such notice is given (in substantially the form of Exhibit B-2 , a “ Confirmation of Interest Period Selection ”). Borrower shall promptly deliver to Administrative Agent the original of the Confirmation of Interest Period Selection initially given by telecopy or other electronic means. Subject to the limitations set forth above, (1) if no Interest Period is selected in a notice given in accordance with this Section 2.2 to convert or continue Eurodollar Loans, Borrower shall be deemed to have selected an Interest Period of one month, and (2) if Borrower fails to notify Administrative Agent of the next Interest Period for any Eurodollar Loans in accordance with this Section 2.2 , such Eurodollar Loans shall automatically convert to Base Rate Loans.

(c) Interest Account and Interest Computations . Borrower authorizes Administrative Agent to record in an account or accounts maintained by Administrative Agent on its books (i) the interest rates applicable to all Loans and the effective dates of all changes thereto, (ii) the Interest Period for each Eurodollar Loan, (iii) the date and amount of each principal and interest payment on each Loan and (iv) such other information as Administrative Agent may determine is necessary for the computation of interest payable by Borrower hereunder. Borrower agrees that all computations by Administrative Agent of interest shall be conclusive in the absence of demonstrable error. All computations of interest on Eurodollar Loans hereunder shall be based upon a year of three hundred sixty (360) days and the actual days elapsed. All computations of interest on Base Rate Loans hereunder shall be based upon a year of three hundred sixty-five (365) days (or three hundred sixty-six (366) days in a leap year) and the actual days elapsed .

(d) Register .

(i) Administrative Agent, acting solely for these purposes as a non-fiduciary agent of Borrower, shall maintain, at its address referred to in Section 12.1 , a register for the recordation of the names and addresses of the Lenders and the Commitments and Loans of each Lender from time to time (the “ Register ”). The Register shall be available for inspection by Borrower at any reasonable time and from time to time upon reasonable prior notice.

(ii) Administrative Agent shall record in the Register (A) the Commitments and the Loans from time to time of each Lender, including any transfers thereof made in accordance with Section 10.14 , (B) the interest rates applicable to all Loans and the effective dates of all changes thereto, (C) the Interest Period for each Loan, (D) the date and amount of any principal or interest due and payable or to become due and payable from Borrower to each Lender hereunder, (E) each repayment or prepayment in respect of the principal amount of the Loans of each Lender, (F) the Other Fees, the Commitment Fees and any other fees payable by Borrower hereunder from time to time, (G) the amount of any sum received by Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof and (H) such other information as Administrative Agent may determine is necessary for administering the Loans and this Agreement. Any such recordation shall be conclusive and binding on Borrower and each Lender, absent demonstrable error; provided that (1) neither failure to make any such recordation, nor any error in such recordation, shall affect any Lender’s Commitments or Borrower’s obligations in respect of any applicable Loans or otherwise; and (2) except as set forth above, in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern. Borrower, Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.

(e) Promissory Notes . The obligation of Borrower to repay the Loans made by each Lender and to pay interest thereon at the rates provided herein, if requested by any Lender, shall be evidenced by promissory notes in the form of Exhibit A-1 (individually, a “ Construction Loan Note ,” and collectively, the “ Construction Loan Notes ”) and Exhibit A-2 (individually, an “ ITC Bridge Loan Note ,” and collectively, the “ ITC Bridge Loan Notes ” and, together with the Construction Loan Notes, each a “ Note ”, and collectively, the “ Notes ”), and each payable to such Lender and in the principal amount of such Lender’s Construction Loan Commitment and such Lender’s ITC Bridge Loan Commitment, respectively. Borrower authorizes each Lender to record on the schedule annexed to such Lender’s Note or Notes the date and amount of each Loan made by such Lender and each payment or prepayment of principal thereunder, and Borrower agrees that all such notations shall constitute prima facie evidence of the accuracy of the matters noted; provided that (i) in the event of any inconsistency between the Register and any Lender’s records, the recordations in the Register shall govern; and (ii) neither the failure to make any such notation nor any error in such notation shall affect the validity of Borrower’s obligations to repay the full unpaid principal amount of the Loans or the other obligations of Borrower hereunder or under the Notes. Borrower further authorizes each Lender to attach to and make a part of such Lender’s Note or Notes continuations of the schedule attached thereto as necessary.

(f) Loan Funding .

(i) Notice . Each Notice of Borrowing shall be delivered to Administrative Agent in accordance with this Article 2 and Section 12.1 . Administrative Agent shall promptly notify each applicable Lender of the contents of each Notice of Borrowing.

(ii) Pro Rata Loans . All Loans shall be made on a pro rata basis by the Lenders in accordance with their respective Proportionate Shares.

(iii) Lender Funding . Each Lender shall, before 3:00 p.m., New York time, on the date of each Borrowing, make available to Administrative Agent at its office specified in Section 12.1 , in same day funds, such Lender’s Proportionate Share of such Borrowing. The failure of any Lender to make the Loan to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation hereunder to make its Loan on the date of such Borrowing. No Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on the date of any Borrowing.

(iv) Availability of Funds . No later than 5:00 p.m., New York time, on the date specified in each Notice of Borrowing, if the applicable conditions precedent in Article 3 have been satisfied or waived, as applicable, and to the extent Administrative Agent shall have received the appropriate funds from the Lenders, Administrative Agent shall make available the Construction Loans or the ITC Bridge Loans, as applicable, requested in such Notice of Borrowing, in Dollars and in immediately available funds, and shall deposit such funds into the Construction Account to be disbursed in accordance with the Depositary Agreement.

(g) Prepayments .

(i) Terms of all Prepayments . Upon the prepayment of any Loan, Borrower shall pay to Administrative Agent for the account of the Lenders, on a pro rata basis according to their Proportionate Shares, (A) all accrued interest to the date of such prepayment on the principal amount prepaid, (B) all accrued fees to the date of such prepayment corresponding to the amount being prepaid, and (C) if such prepayment is the prepayment of a Eurodollar Loan on a day other than the last day of an Interest Period for such Eurodollar Loan, all Liquidation Costs incurred by the Lenders as a result of such prepayment and for which payment is demanded by any Lender under Section 2.7. All prepayments of principal shall be applied (1) first , to the outstanding Base Rate Loans, (2) second , to the outstanding Eurodollar Loans, and (3) third , to the prepayment of any other Obligations under the Financing Documents.

(ii) Re-Borrowings . Borrower may not re-borrow the principal amount of any Construction Loan or ITC Bridge Loan which is paid or prepaid.

(iii) Optional Prepayments . Borrower may, at its option, upon at least five (5) Business Days prior notice to Administrative Agent, prepay without premium or penalty any Construction Loans or ITC Bridge Loans, in each case, in whole or in part, subject to payment of Liquidation Costs under Section 2.7 . Any optional prepayment of any Loan hereunder shall be in the minimum amount of Five Hundred Thousand Dollars ($500,000) or an integral multiple of One Hundred Thousand Dollars ($100,000) in excess thereof (unless such Loan (including related interest, fees and other amounts) is being repaid in full).

(iv) Mandatory Prepayments . Borrower shall prepay the Loans to the extent provided by the terms of this Agreement (including, without limitation, pursuant to Section 2.6 hereof) and the Depositary Agreement. Borrower shall promptly apply the proceeds of the Tax Equity Tranche A Equity Contribution and the Tax Equity Tranche B Equity Contribution received by it to repay the ITC Bridge Loans. Borrower shall promptly apply the proceeds of the NES ECCA Equity Contribution received by it to repay Construction Loans. Borrower shall apply the proceeds of the Project Revenues in accordance with the Depositary Agreement.

2.3 Total Commitments .

(a) Commitment Amounts .

(i) Construction Loans . The aggregate principal amount of all Construction Loans made by the Lenders outstanding at any time shall not exceed Thirty-Five Million Three Hundred Twenty-Six Thousand Twenty-Three Dollars ($35,326,023) (such amount, the “ Total Construction Loan Commitment ”).

(ii) ITC Bridge Loans . The aggregate principal amount of all ITC Bridge Loans made by the Lenders outstanding at any time shall not exceed Twenty-Five Million Six Hundred Fifty-One Thousand Three Hundred Eighty-One Dollars ($25,651,381) (such amount, the “ Total ITC Bridge Loan Commitment ”).

2.4 Fees .

(a) Other Fees . Borrower shall pay (i) on the Closing Date, to Administrative Agent, for distribution to each Lender party hereto on such date, the upfront fee provided for in, and all on the terms and in the respective amounts set forth in, the Proposal Letter and (ii) to Administrative Agent, for distribution to the Agents, the applicable agency and structuring fees provided for in, and all on the terms and in the respective amounts set forth in, the Proposal Letter (all such fees referred to in this Section 2.4(a) being, collectively, the “ Other Fees ”).

(b) Commitment Fees .

(i) On each Quarterly Date during the Loan Period and on the Maturity Date (or, if the Total Construction Loan Commitment is canceled or expires prior to such date, on the date of such cancellation or expiration), Borrower shall pay to Administrative Agent, for the benefit of the Lenders, accruing from the Closing Date or the first day of such quarter, as the case may be, Construction Loan commitment fees (the “ Construction Loan Commitment Fees ”) for such quarter (or portion thereof) then ending equal to the product of (A) 0.75% times (B) the daily average Available Construction Loan Commitment for such quarter (or portion thereof), times (C) a fraction, the numerator of which is the number of days in such quarter (or portion thereof) and the denominator of which is three hundred sixty (360); provided that any amount of Construction Loan Commitment Fees that remains unpaid on the applicable Quarterly Date shall be automatically capitalized as set forth in Section 2.2(a) , and the Borrower shall not be deemed in breach of its payment obligations under this clause.

(ii) On each Quarterly Date during the Loan Period and on the Maturity Date (or, if the Total ITC Bridge Loan Commitment is canceled or expires prior to such date, on the date of such cancellation or expiration), Borrower shall pay to Administrative Agent, for the benefit of the Lenders, accruing from the Closing Date or the first day of such quarter, as the case may be, ITC Bridge Loan commitment fees (the “ ITC Bridge Loan Commitment Fees ”) for such quarter (or portion thereof) then ending equal to the product of (A) 0.75% times (B) the daily average Available ITC Bridge Loan Commitment for such quarter (or portion thereof), times (C) a fraction, the numerator of which is the number of days in such quarter (or portion thereof) and the denominator of which is three hundred sixty (360); provided that any amount of ITC Bridge Loan Commitment Fees that remains unpaid on the applicable Quarterly Date shall be automatically capitalized as set forth in Section 2.2(a) , and the Borrower shall not be deemed in breach of its payment obligations under this clause.

2.5 Other Payment Terms .

(a) Place and Manner . Borrower shall make all payments due to each Lender hereunder to Administrative Agent, for the account of such Lender, to:

Bank: KeyBank National Association

ABA: 041001039

City, State: Cleveland, Ohio

Attn: Key Agency Services

Account No.: 1140228209035

Reference: Innovative Solar 31

or as otherwise directed by Administrative Agent in writing from time to time, in lawful money of the United States and in immediately available funds not later than 3:00 p.m., New York time, on the date on which such payment is due. Any payment made after such time on any day shall be deemed received on the next Business Day after such payment is received. Administrative Agent shall disburse to each Lender each such payment received by Administrative Agent for such Lender, such disbursement to occur by 5:00 p.m., New York time, on the day such payment is received if received by 3:00 p.m., New York time, or otherwise on the next Business Day.

(b) Date . Subject to Section 2.2(b) , whenever any payment due hereunder shall fall due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall be included in the computation of interest or fees, as the case may be.

(c) Late Payments . If any amounts required to be paid by Borrower under this Agreement or the other Financing Documents (including principal or interest payable on any Loan, and any fees or other amounts otherwise payable to Administrative Agent or any Lender) remain unpaid after such amounts are due, Borrower shall pay interest on the aggregate, outstanding balance of such amounts from the date due until those amounts are paid in full at a per annum rate equal to the Default Rate.

(d) Net of Taxes, Etc .

(i) Taxes . Any and all payments to or for the benefit of Administrative Agent, any Lender or any other Person by or on behalf of Borrower hereunder or under any other Financing Document shall be made free and clear of and without withholding, deduction, setoff or counterclaim of any kind whatsoever with respect to Taxes unless required by law. If such withholding, deduction or setoff is required by law, Borrower shall pay such additional amounts as may be necessary in order that the amounts payable, after deduction for or on account of any Taxes arising from or relating to such Lender’s Commitments or Loans or other financial accommodations made under this Agreement or other amounts payable to Administrative Agent, any Lender or any such other Person under the Financing Documents, and all liabilities with respect thereto (excluding (A) Taxes imposed on or measured by the net income, profits or gross receipts (in each case, however denominated), franchise Taxes, and branch profits Taxes of Administrative Agent, any Lender or any such other Person, in each case imposed (1) as a result of Administrative Agent, such Lender or any such other Person being organized under the laws of, or having its principal office or its applicable Lending Office located in the jurisdiction imposing such Tax (or any political subdivision thereof) or (2) by any jurisdiction or Governmental Authority thereof as a result of a present or former connection between Administrative Agent, such Lender or any such other Person and such jurisdiction, other than a connection resulting solely from executing, delivering, becoming a party to, performing its obligations under, receiving payments under, receiving or perfecting a security interest under, selling or assigning an interest in, engaging in any other transaction pursuant to or enforcing this Agreement, any Note or any other Financing Document, (B) any U.S. federal withholding Taxes (including backup withholding Taxes) to the extent imposed as a result of Administrative Agent, any Lender or any such other Person voluntarily designating a successor Lending Office which has the effect of causing Administrative Agent, such Lender or any such other Person to become subject to U.S. federal withholding Taxes in excess of those in effect immediately prior to such designation, (C) any U.S. federal withholding Taxes (including backup withholding Taxes) that are in effect and that would apply to a payment hereunder or under any other Financing Document made to Administrative Agent, any Lender or any such other Person as of the date Administrative Agent or such Lender becomes a party to this Agreement (other than any such Taxes imposed as a result of exercising remedies in connection with an Event of Default), (D) any U.S. federal withholding Taxes imposed under FATCA, (E) Taxes which arise from the addition of a “limitation on benefits” provision to an existing Tax treaty that did not have such a provision on the Closing Date, (F) any Taxes attributable to the failure of Administrative Agent, any Lender or any such Person to comply with its obligations under Section 2.5(f) , and (G) any interest or penalties imposed on any of the foregoing amounts in clauses (A) through (F) of this Section 2.5(d)(i) (the “ Excluded Taxes ”)) (all such Taxes other than Excluded Taxes being hereinafter referred to as “ Indemnified Taxes ”), shall be not less than the amounts otherwise specified to be paid under this Agreement and the other Financing Documents. Notwithstanding the foregoing, the term “Indemnified Taxes” shall include, with respect to an Administrative Agent or a Lender that becomes a party to this Agreement as a result of an assignment or a Lender that changes its Lending Office to an office outside the United States, Taxes (or the portion thereof) if and to the extent such Taxes would have constituted Indemnified Taxes in the hands of the assigning (or transferring) Lender (or Lending Office) hereunder as of the date of such assignment or change in the Lending Office; provided that nothing in this sentence shall affect any Lender’s obligations under Section 2.8 . If any Taxes shall be required by law to be withheld or deducted from or in respect of any sum payable hereunder or under any other Financing Document to Administrative Agent or any Lender, (1) in the case of Indemnified Taxes, the sum payable shall be increased as described above in this Section 2.5(d) , (2) such deductions or withholdings shall be made, and (3) Borrower shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law. In addition, Borrower agrees to pay any present or future stamp, recording, documentary or similar taxes, charges or levies that arise under applicable law from any payment made hereunder or under any other Financing Document or from the execution, delivery, filing, performance or otherwise with respect to this Agreement or any other Financing Document (hereinafter referred to as “ Other Taxes ”).

(ii) Indemnity . Borrower shall indemnify Administrative Agent and each Lender for the full amount of Indemnified Taxes and Other Taxes (including any Indemnified Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.5(d) ) imposed on Administrative Agent or any Lender, or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto whether or not such Indemnified Taxes or Other Taxes were correctly or legally asserted; provided that Borrower shall not be obligated to indemnify Administrative Agent or any Lender for any penalties, interest or expenses relating to Taxes or Other Taxes arising from such indemnitee’s gross negligence, willful misconduct, or material breach of its obligations hereunder or under any other Financing Document, each as determined by a final non-appealable judgment of a court of competent jurisdiction. Each of Administrative Agent and each Lender agrees to use its best efforts to give written notice to Borrower of the assertion of any claim against Administrative Agent or such Lender, as applicable, relating to such Indemnified Taxes or Other Taxes reasonably promptly, and in no event later than forty-five (45) days after the Responsible Officer of Administrative Agent or such Lender responsible for administering this Agreement has actual knowledge of such claim, as applicable; provided that Administrative Agent’s or any Lender’s failure to so notify Borrower within such forty-five (45)-day period of such assertion shall not relieve Borrower of its obligation under this Section 2.5(d) with respect to Indemnified Taxes, Other Taxes, penalties or expenses arising prior to the end of such period except to the extent of any increased liability for such Indemnified Taxes, Other Taxes, penalties, interest or expenses attributable to such failure. Payments by Borrower pursuant to this Section 2.5(d)(ii) shall be made within thirty (30) days from the date Administrative Agent or such Lender provides written notice therefor as described above (submitted through Administrative Agent), which notice shall be accompanied by a certificate, which shall be conclusive absent demonstrable error, describing the basis and calculation thereof. Each of Administrative Agent and each Lender agrees to repay to Borrower any refund (without interest, other than any interest that was included as part of such refund with respect to Indemnified Taxes or Other Taxes paid by Borrower pursuant to this Section 2.5(d)) obtained or received by Administrative Agent or such Lender for Indemnified Taxes or Other Taxes, penalties, interest or expenses that were paid by Borrower pursuant to this Section 2.5(d) and to contest, with the cooperation and at the expense of Borrower, any such Indemnified Taxes or Other Taxes, penalties, interest or expenses which Administrative Agent, such Lender or Borrower reasonably believes not to have been properly assessed; provided that none of Administrative Agent or any Lender shall be required to take any action to contest such Indemnified Taxes or Other Taxes if such Person determines that such action could reasonably be expected to adversely affect it or any of its Affiliates. This Section 2.5(d) shall not be construed to require Administrative Agent, any Lender or any other Person to make available its tax returns (or any other information relating to its taxes that it deems confidential) to Borrower or any other Person.

(iii) Notice . Within thirty (30) days after the date of any payment of any Indemnified Taxes or Other Taxes described in this Section 2.5(d) by Borrower, Borrower shall furnish to Administrative Agent, at its address referred to in Section 12.1 , the original or a certified copy of a receipt evidencing payment thereof, or if such receipt is not obtainable, other evidence of such payment by Borrower reasonably satisfactory to Administrative Agent. Borrower shall indemnify Administrative Agent and each Lender, as applicable and to the extent provided in Section 5.22 , for all losses and expenses sustained by Administrative Agent or such Lender, as the case may be, as a result of any failure by Borrower to so furnish the original or certified copy of such receipt or such other evidence of payment.

(iv) Survival of Obligations . The obligations under this Section 2.5(d) shall survive until the expiration of the applicable statute of limitations after the termination of this Agreement and the repayment of the Obligations.

(e) Failure to Pay Administrative Agent . Unless Administrative Agent shall have received notice from Borrower at least two Business Days prior to the date on which any payment is due to the Lenders hereunder that Borrower will not make such payment in full, Administrative Agent may assume that Borrower has made such payment in full to Administrative Agent on such date, and Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent Borrower shall not have so made such payment in full to Administrative Agent, such Lender shall repay to Administrative Agent forthwith upon demand such amount distributed to such Lender, together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to Administrative Agent, at a rate equal to the Eurodollar Rate. A certificate of Administrative Agent submitted to any Lender with respect to any amounts owing by such Lender under this Section 2.5(e) shall be conclusive in the absence of demonstrable error.

(f) Withholding Exemption Certificates .

(i) Each of Administrative Agent and each Lender (upon becoming a Lender hereunder) agrees that (A) on or before the date such Lender or Person becomes a party to this Agreement it will deliver to each of Borrower and Administrative Agent either (1) if such Lender or Person is a United States Person, a copy of a duly and appropriately completed IRS Form W-9 or any successor applicable form establishing that such Lender or Person is not subject to United States backup withholding tax, (2) if such Lender or Person is not a United States Person, (y) two duly and appropriately completed executed originals of IRS Forms W-8IMY (together with any required attachments), W-8ECI and/or W-8BEN (or successor applicable forms), as the case may be (claiming therein any available reduction in or an exemption from United States withholding taxes), and (z) in the case of a Person eligible for the “portfolio interest exemption,” two duly and appropriately completed executed originals of a statement certifying that it is not a “bank,” a “10 percent shareholder” of Borrower or a “controlled foreign corporation” receiving interest from a related person within the meaning of Section 881(c)(3) of the Code, together with two duly and appropriately completed executed originals of IRS Form W-8BEN (or successor applicable form) certifying that such Person is not a United States Person, (B) in each case promptly following any reasonable request by Borrower or Administrative Agent, or upon expiration, invalidity or obsolescence of any previously submitted form, it will deliver any additional or successor form required by applicable law in order to qualify for any available reduction in or exemption from United States withholding taxes, together with such supplemental documentation as may be prescribed by applicable law to permit Borrower to determine the deduction or withholding required to be made, and (C) it will promptly notify Administrative Agent and Borrower in writing of its inability to deliver such forms or information.

(ii) If a payment made to Administrative Agent or a Lender under any Financing Document would be subject to U.S. federal withholding Tax imposed by FATCA if Administrative Agent or such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or Section 1472(b) of the Code, as applicable), Administrative Agent or such Lender, as applicable, shall deliver to Borrower and Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower or Administrative Agent such documentation prescribed or required by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower or Administrative Agent as may be necessary for Borrower and Administrative Agent to comply with their obligations under FATCA and to determine that Administrative Agent or such Lender has complied with such Administrative Agent’s or such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.5(f) , “FATCA” shall include any amendments made to FATCA after the Closing Date and any current or future regulations or official interpretations thereof, agreements entered into pursuant to Section 1471(b)(1) of the Code, and FATCA-related intergovernmental agreements entered into between the U.S. and a relevant jurisdiction.

(iii) Notwithstanding the foregoing or anything else to the contrary in this Agreement, the completion, execution and submission by a Lender of documentation required or provided for in this Section 2.5(f) (other than any documentation required or provided for in Sections 2.5(f)(i)(A) and 2.5(f)(i)(B) above and in Section 2.5(f)(ii)) shall not be required if in such Lender’s reasonable judgment, such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(g) Pro Rata Treatment . Except as otherwise provided herein, (i) each Borrowing consisting of Construction Loans and each reduction of the Total Construction Loan Commitment shall be made or allocated among the Lenders pro rata according to their respective Proportionate Shares, (ii) each Borrowing consisting of ITC Bridge Loans and each reduction of the Total ITC Bridge Loan Commitment shall be made or allocated among the Lenders pro rata according to their respective Proportionate Shares, (iii) each payment of principal of and interest on Construction Loans and ITC Bridge Loans shall be made or shared among the Lenders holding such Loans pro rata according to the respective unpaid principal amounts of such Loans held by such Lenders, and (iv) each payment of Commitment Fees shall be shared among the Lenders pro rata according to their respective Proportionate Shares.

(h) Sharing of Payments, Etc . If any Lender (a “ Benefited Bank ”) shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of Obligations (or interest thereon) owed to it, in excess of its ratable share of payments on account of such Obligations obtained by all Lenders entitled to such payments, such Lender shall forthwith purchase from the other Lenders such participations in the Obligations, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them and, if after taking into account such participations, the Benefited Bank continues to have access to additional funds of Borrower for application on account of its Debt, then the Benefited Bank shall use such funds to reduce Debt of Borrower held by the Benefited Bank and shall share such payments with the other Lenders; provided that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase by such Lender shall be rescinded and each other Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such other Lender’s ratable share (according to the proportion of (i) the amount of such other Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.5(h) may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation.

2.6 Change of Circumstances .

(a) Cost of Funds Supplemental Charge . No later than two Business Days prior to the date when any Interest Period for a Eurodollar Loan may be requested by Borrower (including any continuations of a Eurodollar Loan), any Lender (such lender, the “ Affected Lender ”) is entitled to provide a written notice to Administrative Agent and Borrower with respect to the Affected Lender’s projected additional costs of funds (in excess of the Eurodollar Rate then in effect) with respect to the relevant Interest Period for such Eurodollar Loan. The Affected Lender is required to certify to Borrower in such written notice that (i) the relevant Eurodollar Rate for the upcoming Interest Period does not adequately reflect the Affected Lender’s funding costs and (ii) the additional funding costs being claimed by the Affected Lender are a reasonable approximation of such additional costs sought to be recovered determined by applying customary and reasonable practices used by the Affected Lender. After receipt of such written notice, (A) Administrative Agent shall inform the Lenders generally that one of the Lenders has claimed additional funding costs (without specifying the identity of the Affected Lender or the amount of the additional funding costs) and (B) the Affected Lender’s Eurodollar Loan for the relevant Interest Period shall accrue interest at:

(1) the applicable Eurodollar Rate plus the Applicable Construction Loan Margin for Eurodollar Loans, plus

(2) the additional funding costs claimed by the Affected Lender in its notice to Borrower and Administrative Agent.

Upon receipt of a notice of additional funding costs, Borrower shall have the right to convert the relevant Eurodollar Loans to Base Rate Loans.

(b) Illegality . If, after the Closing Date, the adoption of any Governmental Rule, any change in any Governmental Rule or the application or requirements thereof (whether such change occurs in accordance with the terms of such Governmental Rule as enacted, as a result of amendment, or otherwise), any change in the interpretation or administration of any Governmental Rule by any Governmental Authority, or compliance by any Lender or Borrower with any request or directive (whether or not having the force of law) of any Governmental Authority whether or not retroactively applied (a “ Change of Law ”) shall make it unlawful or impossible for any Lender to make or maintain any Eurodollar Loan, such Lender shall promptly notify Administrative Agent and Borrower of such Change of Law. Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines and directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change of Law” in all instances under this Agreement and the other Financing Documents, regardless of the date enacted, adopted or issued (even if such date is prior to the date hereof). Upon receipt of such notice from a Lender under the first sentence in this Section 2.6(b) , (A) Borrower’s right to request the making by such Lender of, and such Lender’s obligations to make or continue to make, Eurodollar Loans shall be suspended for so long as such condition shall exist, and (B) if such Lender shall notify Borrower that such Lender may not lawfully continue to fund and maintain Eurodollar Loans, then Borrower, at the request of such Lender, shall convert to Base Rate Loans any or all Eurodollar Loans made by such Lender or, if not so converted, repay Eurodollar Loans made by such Lender. Any conversion or repayment of Eurodollar Loans made pursuant to the preceding sentence prior to the last day of an Interest Period for such Eurodollar Loans shall be deemed a prepayment thereof and any such prepayment shall not affect the aggregate Commitments hereunder.

(i) shall subject any Lender to any tax, duty or other charge with respect to any Obligation or Commitment (except for Indemnified Taxes and Taxes described in clauses (A)(1) and (B) – (G) of the definition of Excluded Taxes); or

(ii) shall impose, modify or hold applicable any reserve, special deposit or similar requirement (without duplication of any reserve requirement included within the interest rate through the definition of “Reserve Requirement”) against assets held by, deposits or other liabilities in or for the account of, advances or loans by, or any other acquisition of funds by any Lender for any Eurodollar Loan; or

(iii) shall impose on any Lender any other condition directly related to any Loan, Obligation or Commitment;

and the effect of any of the foregoing is to increase the cost to such Lender of making, issuing, creating, renewing, participating in or maintaining any such Loan, Obligation or Commitment or to reduce any amount receivable by such Lender hereunder or under the Notes, then Borrower shall from time to time, upon demand by Administrative Agent (accompanied by a certificate from such Lender setting forth the amount of such increased costs or reduced amounts and certifying that the determination of such amount is in accordance with its internal practices as consistently applied), pay to Administrative Agent on behalf of such Lender additional amounts sufficient to reimburse such Lender for such increased costs or to compensate such Lender for such reduced amounts.

(d) Capital Requirements . If any Lender reasonably determines that (i) any Change of Law affects the amount of capital required or expected to be maintained by such Lender or the Lending Office of such Lender (a “ Capital Adequacy Requirement ”) and (ii) the amount of capital maintained by such Lender or such Lending Office which is attributable to or based upon the Loans, the Commitments or this Agreement must be increased as a result of such Capital Adequacy Requirement (taking into account such Lender’s policies with respect to capital adequacy), Borrower shall pay to Administrative Agent on behalf of such Lender, upon demand of Administrative Agent on behalf of such Lender, such amounts as such Lender shall reasonably determine are necessary to compensate such Lender for the increased costs to such Lender of such increased capital.

(e) Inability to Determine Rates . If, on or before the first day of any Interest Period for any Eurodollar Loan which is to bear interest at the Eurodollar Rate, Administrative Agent determines in good faith that the Eurodollar Rate for such Interest Period cannot be adequately and reasonably determined due to the unavailability of funds in or other circumstances affecting the London interbank market, then Administrative Agent shall promptly give notice of such condition to Borrower together with an explanation in reasonable detail describing such condition (“ Notice of Inability to Determine Rates ”). After the giving of any such Notice of Inability to Determine Rates and until Administrative Agent shall otherwise notify Borrower that the circumstances giving rise to such condition no longer exist, Borrower’s right to request the making of and the obligations of Lenders to make or continue Eurodollar Loans shall be suspended. Any Eurodollar Loan outstanding at the commencement of any such suspension relating thereto shall be converted at the end of the then current Interest Period for such Loans into Base Rate Loans unless Administrative Agent has notified Borrower in writing that such suspension has then ended.

(f) Notice . Each Lender will notify Administrative Agent of any event occurring after the Closing Date that will entitle such Lender to compensation pursuant to this Section 2.6 , as promptly as is reasonable, and in no event later than one hundred twenty (120) days after a Responsible Officer of such Lender responsible for administering this Agreement has actual knowledge of the occurrence of such event and Administrative Agent shall promptly notify Borrower of such event; provided that any Lender’s failure to notify Administrative Agent within such one hundred twenty (120)-day period of such event shall not relieve Borrower of its obligations under this Section 2.6 with respect to claims arising prior to the end of such period, but shall relieve Borrower of its obligations under this Section 2.6 with respect to the time between the end of such period and such time as Borrower receives notice as provided herein. Any Lender seeking compensation under this Section 2.6 shall promptly deliver to Borrower (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this Section 2.6 , which statement shall be conclusive and binding upon all parties hereto absent demonstrable error.

2.7 Funding Losses . If Borrower shall (a) repay or prepay any Eurodollar Loans on any day other than the last day of an Interest Period for such Eurodollar Loans (whether an optional prepayment or a Mandatory Prepayment), (b) fail to borrow any Eurodollar Loans in accordance with a Notice of Borrowing delivered to Administrative Agent (whether as a result of the failure to satisfy any applicable conditions or otherwise), or (c) fail to make any prepayment in accordance with any notice of prepayment delivered to Administrative Agent, then Borrower shall, upon demand by any Lender, reimburse such Lender for all costs and losses incurred by such Lender as a result of such repayment, prepayment or failure which shall include, in the case of any Eurodollar Loan, the amount equal to the excess, if any, of (i) the portion of the applicable interest attributable to the Eurodollar Rate which would have applied to the principal amount so repaid, prepaid or not borrowed for the period from the date of such repayment or prepayment or failure to borrow to the last day of the then current Interest Period for such Loan over (ii) the amount of interest that the relevant Lender would be able to obtain by placing an amount equal to the principal amount so repaid, prepaid or not borrowed, as the case may be, with a leading bank in the London interbank market for a period commencing from the date of such repayment, prepayment or failure to borrow, as applicable, through the end of such Interest Period (“ Liquidation Costs ”) but shall not otherwise include any compensation for lost profits. Borrower understands that such costs and losses may include losses incurred by a Lender as a result of funding and other contracts entered into by such Lender to fund Loans. Each Lender demanding payment under this Section 2.7 shall deliver to Administrative Agent a certificate setting forth and reasonably accounting for the amount of costs and losses for which demand is made, and Administrative Agent shall promptly provide such certificate to Borrower. Notwithstanding the foregoing, unless an Event of Default shall have occurred and be continuing, and except with regard to any optional prepayments hereunder or the events described in clauses (b) and (c) above, each Lender shall use reasonable efforts to minimize any Liquidation Costs, at Borrower’s request, by not applying Mandatory Prepayments until the last day of an Interest Period (provided that, for purposes of clarification, Loans corresponding to such Mandatory Prepayments shall be deemed to remain outstanding for purposes of the Financing Documents until such Mandatory Prepayments are applied to Loans).

2.8 Alternate Office; Minimization of Costs .

(a) To the extent reasonably possible, each Lender shall designate an alternative Lending Office with respect to its Loans to reduce any liability of Borrower to such Lender under Section 2.5(d) , Section 2.6(a) , Section 2.6(c) or Section 2.6(d) , or to avoid the unavailability of any Loans or an interest rate option under Section 2.6(b) , so long as such Lender, in its reasonable discretion, does not determine that such designation is disadvantageous to such Lender. To the extent reasonably possible, each Lender shall otherwise take any reasonable actions to reduce any liability of Borrower to such Lender under Section 2.5(d) , Section 2.6(a) , Section 2.6(c) or Section 2.6(d) , or to avoid the unavailability of any Loans or an interest rate option under Section 2.6(b) , so long as such Lender, in its reasonable discretion, does not determine that such action is disadvantageous to such Lender.

(b) Any Lender may designate a Lending Office other than that set forth for such Lender on Exhibit G and may assign all of its interests under the Financing Documents, and its Notes, to such Lending Office, provided that such designation and assignment do not at the time of such designation and assignment increase the reasonably foreseeable liability of Borrower under Section 2.5(d) , Section 2.6(a) , Section 2.6(c) or Section 2.6(d) or make Loans or an interest rate option unavailable pursuant to Section 2.6(b) .

(c) Each Lender and Administrative Agent shall use reasonable efforts to avoid or minimize any additional costs, Taxes, expense or obligation which might otherwise be imposed on Borrower pursuant to Section 2.5(d) , Section 2.6(a) , Section 2.6(c) or Section 2.6(d) or as a result of such Lender or Administrative Agent being subject to a Reserve Requirement or to avoid the unavailability of Loans or an interest rate option under Section 2.6(b) ; provided that such efforts shall not cause the imposition on any Lender of any additional costs or legal or regulatory burdens unless Borrower shall provide such Lender with an indemnification for such additional costs in form and substance satisfactory to such Lender and shall not in any respect (other than such indemnified costs or burdens) be disadvantageous to such Lender.

ARTICLE 3
CONDITIONS PRECEDENT

3.1 Conditions Precedent to the Closing Date . The obligation of the Lenders party hereto on the Closing Date to make the initial Loans (provided that the initial and each subsequent Borrowing of any such Loans shall be subject to the prior satisfaction (or waiver in writing by Administrative Agent and the Lenders) of the applicable conditions precedent set forth in Section 3.2 ) and to otherwise enter into the transactions contemplated by this Agreement is subject to the prior satisfaction of each of the following conditions (unless waived in writing by Administrative Agent and the Lenders):

(a) Resolutions . Delivery to Administrative Agent of a copy of one or more resolutions or other authorizations of Borrower, Holdings, NES, Class B Member and Class A Member, certified by a Responsible Officer of each such Person as being in full force and effect on the Closing Date, authorizing the execution, delivery and performance by such Person of the Transaction Documents to which such Person is a party and, in the case of Borrower, the Borrowings provided for herein.

(b) Incumbency . Delivery to Administrative Agent of certificates satisfactory in form and substance to Administrative Agent from Borrower, Holdings, NES, Class B Member and Class A Member, signed, respectively, by a Responsible Officer of such Person and dated the Closing Date, as to the incumbency of the natural persons authorized to execute and deliver this Agreement and the other applicable Transaction Documents to which such Person is a party.

(c) Formation and Organizational Documents . Delivery to Administrative Agent of (i) a copy of the certificate of formation of Borrower, Holdings, NES, Class B Member and Class A Member, each certified by the Secretary of State of the applicable State of formation, and (ii) a copy of the Operating Agreements and the operating agreement of NES, Class B Member and Class A Member, in each such case certified by its respective secretary or representative.

(d) Good Standings . Delivery to Administrative Agent of (i) certificates of existence (or the equivalent) issued by the applicable Secretary of State or equivalent office of the jurisdiction of incorporation or formation of Borrower, Holdings, NES, Class B Member, Class A Member and the Major Project Participants and (ii) certificates issued by the State of North Carolina in respect of the O&M Contractor and the EPC Contractor, certifying that each such Person is in existence (or the equivalent) and is duly authorized to transact business in the State of North Carolina; provided that no certifications from the applicable jurisdiction of organization are required to be delivered with respect to Major Project Participants that are organized outside of the United States.

(e) Transaction Documents .

(i) Delivery to Administrative Agent of fully executed Financing Documents, all of which Financing Documents shall be satisfactory in form and substance to Administrative Agent and the Lenders and shall have been duly authorized, executed and delivered by the parties thereto.

(ii) Copies of the Project Documents in effect as of the Closing Date shall be delivered to Administrative Agent and shall be certified by a Responsible Officer of Borrower as being true, complete and correct and in full force and effect on the Closing Date pursuant to the certificate delivered as provided in Section 3.1(f) , which certificate shall include a certification that (A) Borrower is not in breach of any of its obligations under any such Project Document and no event has occurred or circumstance exists that, with the passage of time or the giving of notice or both, would constitute a breach by Borrower under any such Project Document, (B) to Borrower’s knowledge, no other party is in breach of any of such other party’s obligations under any such Project Document and no event has occurred or circumstance exists that, with the passage of time or the giving of notice or both, would constitute a breach by such other party under any such Project Document, and (C) Borrower has satisfied all conditions precedent to be satisfied by it as of the Closing Date under each Project Document and, to Borrower’s knowledge, each other party to each such Project Document has satisfied all conditions precedent to be satisfied by such other party under such Project Document as of the Closing Date.

(iii) Delivery to Administrative Agent of copies of each of the duly executed (A) Tax Equity ECCA, (B) Tax Equity Guaranty, (C) NES ECCA, and (D) NES Escrow Agreement, in each such case, in form and substance acceptable to Administrative Agent and the Lenders.

(f) Certificate of Borrower . Administrative Agent shall have received an officer’s certificate of Borrower. dated as of the Closing Date, pursuant to subsection (b) above containing closing certifications reasonably satisfactory to the Administrative Agent.

(g) Legal Opinions . Delivery to Administrative Agent of opinion letters, each in form and substance acceptable to Administrative Agent and the Lenders,

(i) of Stoel Rives LLP, counsel for the Borrower Entities and Class B Member;

(ii) of Parker Poe Adams & Bernstein LLP, North Carolina corporate, environmental, energy regulatory and real estate counsel for Borrower;

(iii) of Foley & Lardner LLP, counsel for Tax Equity Guarantor and Class A Member;

(iv) of counsel to the EPC Contractor, as requested by Administrative Agent.

(h) Independent Consultants’ Certificates . Delivery to Administrative Agent of:

(i) an Insurance Consultant’s certificate, in substantially the form of Exhibit E , with a copy or an original of the Insurance Consultant’s report (the “ Insurance Consultant’s Report ”), including a review of the adequacy of insurance policies for the Project and confirming that all insurance policies required by such Insurance Consultant’s Report for the Project is in full force and effect, are not subject to cancellation without thirty (30) days prior notice (ten (10) days for non-payment of premiums) and otherwise conform with the insurance requirements set forth in Exhibit I and the Material Project Documents for the Project, in form and substance reasonably satisfactory to Administrative Agent and the Lenders;

(ii) the Independent Engineer’s Report for the Project that (A) covers the technical aspects of the Project, (B) covers a solar resource assessment that includes (1) a final energy production analysis for the Project and (2) an analysis of forecasts of overall power production during the life of the Project, (C) confirms that the Project as designed complies with the technical system requirements of the Power Purchase Agreement and the Interconnection Agreement and (D) is addressed to Administrative Agent or delivered to Administrative Agent together with a letter granting reliance to Administrative Agent and each Lender, each in form and substance satisfactory to Administrative Agent and Lenders;

(iii) a reliance letter from the Environmental Consultant and a copy of each of the Environmental Reports, both the letter and the Environmental Reports in form and substance reasonably satisfactory to Administrative Agent; and

(iv) the Cost Segregation Report by the Appraiser, identifying the cost categories and the expected amount of Project Costs that will be eligible for inclusion, consistent with the Code and other Legal Requirements, in the calculation of the ITC, as set forth in the Cost Segregation Report, together with a letter granting reliance thereon to Administrative Agent and each Lender, each in form and substance reasonably satisfactory to Administrative Agent and the Lenders.

(i) Applicable Permits and Approvals . Delivery to Administrative Agent of (A) Exhibit F-1 , the schedule of Applicable Permits and Applicable Approvals required to develop, construct, own and operate the Project, in form and substance satisfactory to Administrative Agent, together with copies of each Applicable Permit and Applicable Approval that is listed on Part I of Exhibit F-1 and that has not previously been delivered to Administrative Agent, each in form and substance satisfactory to Administrative Agent and (B) delivery of a certificate, signed by a Responsible Officer of Borrower, stating that: (1) the Applicable Permits and Applicable Approvals for the Project listed on Part I of Exhibit F-1 constitute all of the Applicable Permits and Applicable Approvals that are, in light of the status of the acquisition, development, construction, ownership and operation of the Project as of the Closing Date, required to have been obtained by the Closing Date; (2) Part II of Exhibit F-1 lists all other Applicable Permits and Applicable Approvals required to develop, construct, own and operate the Project; (3) the Applicable Permits and Applicable Approvals listed in Part II of Exhibit F-1 are, in light of the status of the acquisition, development, construction, ownership and operation of the Project as of the Closing Date, obtainable not later than required without substantial difficulty, expense or delay and in a manner to allow construction to proceed in accordance with the project schedule; and (4) the Applicable Permits and the Applicable Approvals are not subject to any restriction, condition, limitation, provision or proceeding that could reasonably be expected to have a Material Adverse Effect on the construction or operation of the Project.

(j) Closing Costs and Fees . Concurrently with the Closing, Borrower shall pay all closing costs and reasonable fees and expenses due and payable by Borrower at the Closing under the Financing Documents.

(k) Payment of Fees . Without duplication of Section 3.1(j) , all other amounts then required to be paid by Borrower to, or deposited by Borrower with, Administrative Agent or any Lender under the Financing Documents, and all taxes and reasonable fees and other costs payable by Borrower in connection with the execution, delivery, recordation and filing of the documents and instruments required to be filed as a condition precedent in this Section 3.1 (including the amounts then due and payable under the Proposal Letter), shall have been paid in full (or, with the consent of Administrative Agent, shall be paid concurrently with the occurrence of the Closing Date).

(l) Financial Statements . Administrative Agent shall have received:

(i) the annual financial statements (audited if available) of the Power Purchaser, the EPC Contractor, the O&M Contractor, the EPC Parent and each Module Warranty Provider, the Inverter Supplier, and the Tracker Supplier for the past two years (where available) prepared in accordance with GAAP (where applicable);

(ii) the most recent quarterly financial statements from the Power Purchaser, each Module Warranty Provider, the Inverter Supplier, and the Tracker Supplier prepared in accordance with GAAP (where applicable);

(iii) the annual audited financial statements of Arowana International Limited for its fiscal year ended June 30, 2015 and the interim unaudited financial statements of Arowana International Limited for its fiscal half-year ended December 31, 2015, in each case prepared in accordance with International Financial Reporting Standards;

(iv) the respective most recent unaudited financial statements of Sponsor, Holdings, Borrower and Class B Member; and

(v) with respect to the financial statements provided under clause (iv) of this Section 3.1(l) , a certificate from a Responsible Officer of the applicable Person, stating that no material adverse change in the assets, liabilities, operations or financial condition of such Person has occurred from those set forth in the respective most recent unaudited financial statements provided to Administrative Agent pursuant to clause (iv) of this Section 3.1(l) , and that such unaudited financial statements fairly present in all material respects the financial condition of such Person, in accordance with GAAP, as at the respective date of such financial statements (subject to normal year-end adjustments and the absence of footnotes);

provided that for any Person for which financial statements are to be provided pursuant to this Section 3.1(l) and which is a public company, and is required or permitted to file reports under the Exchange Act, the availability of its report on Form 10-K or Form 20-F or the availability on such Person’s website of the financial statements referred to above shall satisfy the requirements herein.

(m) Real Estate Matters .

(i) Survey . Administrative Agent shall have received the Survey, reasonably current and certified to Administrative Agent and Collateral Agent by a licensed surveyor satisfactory to Administrative Agent in its discretion, with a layout of the photovoltaic arrays and other improvements to be constructed on the Site, in a form and substance reasonably acceptable to Administrative Agent.

(ii) Title Policy . Borrower shall have delivered to Administrative Agent a lender’s ALTA 2006 Form extended coverage loan policy of title insurance with respect to the Deed of Trust in favor of Collateral Agent for the benefit of the Secured Parties, in form and substance reasonably satisfactory to Administrative Agent, together with such endorsements and affirmative assurances as are reasonably required by Administrative Agent, issued by the Title Insurer, insuring (or irrevocably and unconditionally committing to insure) that:

(A) Borrower has a leasehold interest in the Site, and has any and all easements that are reasonably necessary for the operation of the Project on the Site, free and clear of liens, encumbrances or other exceptions to title except those encumbrances and exceptions set forth on Schedule B-I of the Title Policy and approved by Administrative Agent (such encumbrances and exceptions, “ Permitted Encumbrances ”); and

(B) The Deed of Trust is (or will be when recorded) a valid first lien on the interest of Borrower in the Site, free and clear of all liens, encumbrances and exceptions to title whatsoever, other than Permitted Encumbrances referred to in this Section 3.1 . The Title Policy issued under this Section 3.1 shall effect full coverage against insurable losses from existing mechanics’ or materialmen’s liens and subsequent mechanics’ and materialmen’s liens which may gain priority over the Deed of Trust either without exception for mechanics’ and materialmen’s liens or with a commitment to issue future endorsements as described above, which coverage and endorsements shall be subject to Administrative Agent’s approval;

(such policy, together with all amendments thereto, endorsements thereof and substitutions or replacements therefor, being herein referred to as the “ Title Policy ”). As of the Closing Date, the Title Policy shall be in an amount at least equal to Forty-Five Million Dollars ($45,000,000).

(iii) Leases . Borrower shall have acquired a leasehold interest in the Site, and shall have delivered all documents necessary to establish that Borrower (A) holds a legal, valid and subsisting interest in all easements and rights of way appurtenant to the Site that are reasonably necessary to the operation of the Project on the Site, free and clear of all Liens other than any Permitted Liens, and (B) has obtained all necessary real estate licenses, easements, rights of way, access rights, utility and other services then required for the development of the Project, including any instruments or memoranda of the applicable Real Property Documents, including all amendments thereto, evidencing such interests in the Site to be duly recorded with all required Governmental Authorities in accordance with applicable law.

(iv) Deed of Trust Recording . The Deed of Trust shall have been duly recorded within the applicable land records of Bladen County, State of North Carolina (or the Deed of Trust shall have been delivered to the Title Insurer for recordation on terms and conditions satisfactory to Administrative Agent), and the security interests in the portion of the Collateral under the Deed of Trust that consists of personal property and fixtures shall have been promptly perfected (or arrangements for such perfection satisfactory to Administrative Agent shall have been made).

(n) UCC Reports . Administrative Agent shall have received a Form UCC11 report (or similar report) of a recent date before the Closing Date for each of the jurisdictions in which the UCC Financing Statements and the Deed of Trust are to be filed in respect of the Collateral, showing that, upon due filing or recordation (assuming such filing or recordation occurred on the date of such respective reports), the security interests created under the Collateral Documents will be prior to all other financing statements or other security documents of record in respect of the Collateral (subject only to Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the Liens granted by the Collateral Documents).

(o) No Event of Default or Default . No Default or Event of Default has occurred and is continuing as of the Closing Date or would result from this Agreement becoming effective in accordance with its terms.

(p) Flood Hazard Deliverables . Administrative Agent shall have received copies of any required “life of loan” Federal Emergency Management Agency Standard Flood Hazard Determination (FEMA Form 81-93) for each parcel which constitutes a portion of the Site and on which an improvement is located. If any improvement to the Site is located in a special flood hazard area, a notification to Borrower (a “ Flood Notice ”) shall be delivered and (if applicable) such Flood Notice shall include notification to Borrower that flood insurance coverage under the National Flood Insurance Program is not available because the community does not participate in the National Flood Insurance Program. Administrative Agent shall have received documentation evidencing Borrower’s receipt of a Flood Notice (e.g., countersigned Flood Notice, return receipt of certified U.S. mail, or overnight delivery). If a Flood Notice is required to be given and flood insurance is available in the community in which the Site is located, Administrative Agent shall receive a copy of one of the following: the flood insurance policy, Borrower’s application for a flood insurance policy plus proof of premium payment, a declaration page confirming that flood insurance has been issued, or such other evidence of flood insurance satisfactory to Administrative Agent (including, without limitation, the addition of Administrative Agent or Collateral Agent as mortgagee and lender’s loss payee thereunder).

(q) No Material Adverse Effect . In the judgment of Administrative Agent, acting in good faith, there shall not have occurred any material adverse change in the Project Budget and Schedule, in the economics or feasibility of constructing or operating the Project, or in the financial condition, business, prospects or operations of Holdings, Borrower, Class B Member, the Power Purchaser, the O&M Contractor, any Warranty Provider, the Interconnector, the EPC Parent or the EPC Contractor, in each case, which could reasonably be expected to have a Material Adverse Effect.

(r) Establishment of Accounts . The Accounts required under Article 7 shall have been established to the satisfaction of Administrative Agent. The NES Escrow Account shall have been established to the satisfaction of the Administrative Agent.

(s) Representations and Warranties . Each representation and warranty of Borrower set forth in Article 4 and of each applicable Borrower Entity under the Financing Documents to which such Person is a party shall be true and correct in all material respects as of the Closing Date (or if such representation and warranty relates solely to an earlier date, as of such earlier date), and each of the representations and warranties made by Class B Member or a Borrower Entity in the Project Documents and the Tax Equity Documents shall have been true and correct in all material respects as of the date made (or, if any such representation and warranty relates to an earlier date, as of such earlier date) .

(t) Ownership Diagram . Borrower shall have delivered to Administrative Agent an ownership diagram of Borrower that shows each level of ownership of Borrower and Holdings up to Sponsor.

(u) Patriot Act Compliance . Borrower shall have delivered to Administrative Agent all documentation and information requested by Administrative Agent that are necessary (including the name, address, tax payer identification number, IRS Form W-9, copies of organizational documents, copies of government issued identification and names of officers and controlling members of each Borrower Entity) for Administrative Agent and the Lenders to identify each such Person in accordance with any applicable Anti-Terrorism Laws and the requirements of the Patriot Act (including the “know your customer” and similar regulations thereunder).

(v) Filing and Recordation of Security Interests . All Liens contemplated by the Collateral Documents to be created and perfected in favor of Collateral Agent pursuant to such Collateral Documents shall have been perfected, recorded (or deemed recorded) and filed in the appropriate jurisdictions (other than the Deed of Trust), shall be in full force and effect and shall constitute valid and enforceable first-priority Liens (subject only to Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the Liens granted by such Collateral Documents) on the Collateral under such Collateral Documents. Administrative Agent shall have received the UCC Financing Statements listed in Exhibit C-1 , in proper form for filing.

(w) Possession of Membership Interests and Instruments of Transfer . Holdings shall have delivered to Collateral Agent original physical membership certificates or other instruments evidencing one hundred percent (100%) of the limited liability company interests in Borrower and accompanied by duly executed instruments of transfer or assignment in blank and an irrevocable proxy with respect to such limited liability company interests, each in form and substance acceptable to Administrative Agent, Collateral Agent and the Lenders.

(x) [ Reserved .]

(y) [ Reserved .]

(z) [Reserved.]

(aa) Base Case Projections . Borrower shall have furnished Administrative Agent the Base Case Projections, in form and substance satisfactory to Administrative Agent and the Lenders (in consultation with and as approved by the Independent Engineer).

(bb) Project Budget and Schedule . Borrower shall have furnished Administrative Agent the budget for all Project Costs and a detailed project schedule (the “ Project Budget and Schedule ”), as well as estimates of revenues and cash flows, if any, expected to be generated from the Project for the period commencing on the date of the Project Budget and Schedule through the Commercial Operation Date, together with a statement of uses and anticipated sources of funds necessary to complete the Project, broken down as to separate construction phases and components, but excluding any developer fee or similar premium, and such project schedule shall demonstrate that the Project will commence commercial operations under the Power Purchase Agreement and produce electrical energy for commercial sale in accordance with Prudent Utility Practices, the Power Purchase Agreement and applicable laws no later than January 30, 2017, and the Project Budget and Schedule shall be satisfactory to Administrative Agent and the Secured Parties (in consultation with and as approved by the Independent Engineer). The Project Budget and Schedule is attached hereto as Exhibit F-2 .

(cc) Project Costs . Administrative Agent shall have received (i) evidence reasonably satisfactory to Administrative Agent (including copies of invoices and other documentation) that the amount of the Borrower Equity contributed on or prior to the Closing Date to pay Project Costs is at least equal to the Equity Contribution Requirement and (ii) certification by the Independent Engineer of Project Costs paid by Borrower, in form and substance reasonably acceptable to Administrative Agent and the Lenders.

(dd) Consents and Estoppels . Administrative Agent shall have received Consents and Estoppels from the EPC Contractor, the O&M Contractor and the EPC Parent, dated as of the date of the initial Construction Loan, and from each Site Owner, dated no earlier than ninety (90) days prior to the Closing Date, each duly executed and delivered by each Person intended to be a party thereto, in the applicable form attached hereto as Exhibit D-2 , or as otherwise reasonably acceptable to Administrative Agent.

(ee) No Action, Suit or Proceeding .

(i) No action, suit, proceeding or investigation shall have been instituted or threatened in writing, and no order, judgment or decree shall have been issued or proposed to be issued, by any Governmental Authority that, solely as a result of the development, construction, ownership, leasing, maintenance or operation of the Project, the sale of electricity therefrom or the entering into of any Operative Document or any transaction contemplated hereby or thereby, would cause (A) Administrative Agent, the Lenders, any other Secured Party or any Affiliate (as that term is defined in Section 1262(1) of PUHCA, 42 U.S.C. § 16451(1)) of any of them to become (1) subject to regulation as a “public utility” under the FPA, (2) subject to, or not exempt from, regulation as a “holding company” under PUHCA, or (3) subject to rate regulation or financial or organizational regulation by the NCUC, each except as set forth in Section 4.27(b) of this Agreement, or (B) any Borrower Entity to become (1) subject to regulation as a “public utility” under the FPA, (2) subject to, or not exempt from, regulation as a “holding company” under PUHCA, or (3) subject to rate regulation or financial or organizational regulation by the NCUC under applicable North Carolina law, each except as set forth in Section 4.10 and Section 4.27(a) of this Agreement.

(ii) No action, suit or administrative proceeding or investigation shall have been instituted or threatened in writing against any Borrower Entity that could reasonably be expected to have a Material Adverse Effect.

(iii) There shall have been no Environmental Claim or violation of any Environmental Law (or any notice thereof), which Environmental Claim or violation could reasonably be expected to result in a material liability to any Borrower Entity.

(iv) No action, suit or administrative proceeding or investigation shall have been instituted or threatened in writing by any Governmental Authority to the effect that any condemnation or other eminent domain proceeding is pending or threatened with respect to any material portion of the Site on which the Project is constructed.

3.2 Conditions Precedent to Each Credit Event . The obligation of the Lenders to effect or permit each Credit Event is subject to the prior satisfaction (or waiver in writing by Administrative Agent and the Lenders) of each of the following conditions:

(a) Each representation and warranty of each Borrower Entity set forth in Article 4 or any other Financing Document shall be true and correct in all material respects as if made on such date (or if such representation and warranty relates solely as of an earlier date, as of such earlier date).

(b) No Default or Event of Default has occurred and is continuing or will result from such Credit Event, and no Default or Event of Default would result from the application of proceeds of such Borrowing.

(c) Each Financing Document, each Project Document and each Applicable Permit that is then required to be in effect remains in full force and effect.

(d) No event or circumstance having a Material Adverse Effect has occurred (except as is no longer continuing or has been waived by the Required Lenders).

(e) With respect to a Borrowing of Construction Loans, Borrower shall have delivered a Notice of Borrowing to Administrative Agent in accordance with the procedures specified in Section 2.1(a)(ii) for Construction Loans.

(f) With respect to a Borrowing of ITC Bridge Loans, Borrower shall have delivered a Notice of Borrowing to Administrative Agent in accordance with the procedures specified in Section 2.1(b)(ii) for ITC Bridge Loans.

(g) Prior to each Construction Loan Borrowing and each ITC Bridge Loan Borrowing, not less than (i) five Business Days prior to the proposed Borrowing Date, Borrower shall provide the Independent Engineer all information and certificates necessary from Borrower and the EPC Contractor applicable to such Borrowing, (ii) five Business Days prior to the proposed Borrowing Date, Borrower shall provide Administrative Agent with a Drawdown Certificate, specifying the date such Borrowing is to be made and signed by Borrower, with all applicable attachments, and (iii) three Business Days prior to the proposed Borrowing Date, the Independent Engineer shall have reviewed and verified Borrower’s certificates and supporting invoices or other evidence of payment and other information referred to in the Drawdown Certificate and provided Administrative Agent with a certificate of the Independent Engineer with respect to the Project in substantially the form of Exhibit B-4 .

(h) For each Construction Loan Borrowing and each ITC Bridge Loan Borrowing, Borrower shall provide a date-down endorsement to the Title Policy delivered pursuant to Section 3.1 , re-dating such Title Policy and all endorsements attached thereto to the date of the draw for such Borrowing, showing no new matters of record or additional exceptions (including survey exceptions) other than the Permitted Encumbrances related to such Title Policy, increasing the amount of the coverage of the Title Policy up to and including the amount of such Borrowing (but only to the extent necessary) and showing the total amount of the coverage as of the date thereof, and continuing to insure the first priority lien of the Deed of Trust subject only to such Permitted Encumbrances, in form and substance reasonably satisfactory to Administrative Agent, together with evidence of payment of all title insurance premiums and expenses, all filing, recording and similar fees and any other items required by the Title Insurer to issue such endorsement.

(i) After taking into consideration the Borrowing being requested, Available Construction Funds plus the Available ITC Bridge Loan Commitment shall not be less than the aggregate unpaid amount of Project Costs required to cause Final Completion in accordance with all Legal Requirements and the EPC Agreement on or prior to the Scheduled Final Completion Date as set forth in the Project Budget and Schedule.

(j) Borrower shall have delivered to Administrative Agent duly executed acknowledgments of payments and a conditional waiver and release upon progress payment to release all mechanics’ and materialmen’s liens, in form reasonably satisfactory to Administrative Agent, from all contractors, subcontractors, vendors and materialmen with a contract value in excess of One Hundred Thousand Dollars ($100,000), for all work, services and materials, including equipment and fixtures of all kinds, done, previously performed or furnished for the construction of the Project, and a conditional waiver and release upon progress payment for such work, services and materials to be paid for with the proceeds of the requested Borrowing, in a form reasonably satisfactory to Administrative Agent. With respect to the final payment, such Lien releases shall be unconditional waivers and releases upon final payment.

(k) All Applicable Permits required to develop, construct, own and operate the Project and required to have been obtained on or before the date of such Borrowing from any Governmental Authority in light of the status of the acquisition, development, construction and operation of the Project as of the date of such Borrowing have been issued and are in full force and effect and not subject to appeal or further proceedings or to any unsatisfied conditions, restrictions, limitations or other provisions that may allow material modification or revocation. With respect to any of the Applicable Permits not yet required as of the date of such Borrowing and listed in Part II of Exhibit F-1 , Administrative Agent shall have reasonably concluded that there is no reason to believe that any such Applicable Permits will not be obtained without substantial difficulty, expense or delay and in a manner to allow construction to proceed in accordance with the Project Budget and Schedule, all of which shall be reasonably satisfactory in all respects to Administrative Agent.

(l) All of the Operative Documents to be executed and delivered on or prior to the date of such Borrowing shall be in full force and effect without change or amendment since the Closing Date, except as consented to in writing by Administrative Agent (and, if a Material Project Document or a Financing Document, as consented to in writing by the Required Lenders) or as otherwise permitted pursuant to the terms hereof.

(m) Upon the reasonable request of Administrative Agent, with respect to additional Applicable Permits and Additional Project Documents entered into or obtained, transferred or required (whether because of the status of the construction of the Project or operation of the Project or otherwise) since the date of the most recent Borrowing, all items then required pursuant to Section 5.6 shall be delivered to the extent not previously delivered.

(n) (i) All work that has been done on the Project has been done in a good and workmanlike manner and in accordance with the EPC Agreement and Prudent Utility Practices and (ii) there has not been filed against, or served upon, any Borrower Entity notice of or application for any Lien (other than Permitted Liens), claim of Lien (other than Permitted Liens) or attachment upon or claim affecting the right to receive payment of any of the moneys payable to any of the Persons named in such notice, application, claim or attachment, as applicable (A) which has not been released, (B) which will not be released with the payment of the applicable obligation out of the applicable Borrowing, (C) which has not been bonded in an amount and in a manner satisfactory to Administrative Agent in its discretion that assures Administrative Agent that any amounts determined to be due will be promptly paid in full when any such claim is resolved, or (D) for which an amount satisfactory to Administrative Agent has not been reserved in a manner satisfactory to Administrative Agent in its discretion that assures Administrative Agent that any amounts determined to be due will be promptly paid in full when any such claim is resolved.

(o) If at the time of making any Construction Loan Borrowing or any ITC Bridge Loan Borrowing, the Project shall have been materially damaged by flood, fire or other casualty, either (i) Borrower shall be in compliance with all provisions of the Financing Documents relating to restoration, repair or application of insurance proceeds thereof or (ii) Administrative Agent shall have received insurance proceeds or money or other assurances sufficient in the reasonable judgment of Administrative Agent and the Independent Consultants to assure restoration and Substantial Completion of the Project prior to the Maturity Date and the Final Completion of the Project on or prior to the Scheduled Final Completion Date.

(p) No party to the Tax Equity ECCA or the Holdings Operating Agreement is in material default of any obligation thereunder.

(q) No party to the NES ECCA is in material default of any obligation thereunder.

(r) No action, suit, administrative proceeding or investigation shall have been instituted or threatened in writing against any Borrower Entity or the Project that could reasonably be expected to have a Material Adverse Effect. There shall have been no Environmental Claim or violation of any Environmental Law (or any notice thereof), which Environmental Claim or violation could reasonably be expected to result in a material liability to any Borrower Entity.

(s) All amounts then required to be paid by Borrower to, or deposited by Borrower with, Administrative Agent or any Lender under the Financing Documents, and all taxes and reasonable fees and other costs then due and payable by Borrower in connection with the execution, delivery, recordation and filing of the documents and instruments required to be filed as a condition precedent in this Section 3.2 in respect of the requested Borrowing, shall have been paid in full.

(t) No Federal Tax Benefits Change of Law Event shall have occurred.

(u) With respect to the initial ITC Bridge Loan, the Available Construction Loan Commitment shall have been reduced to zero.

(v) With respect to any Credit Event occurring after the Closing Date, Borrower shall have filed an application with FERC requesting an order granting Borrower MBR Authority, and provided a copy of such application to Administrative Agent.

(w) With respect to any Credit Event occurring after the Closing Date, Borrower shall have filed with FERC a notice of self-certification of its status as an EWG, and provided a copy of such filing to Administrative Agent.

3.3 No Approval of Work . The making of any Borrowing hereunder shall not be deemed an approval or acceptance by Administrative Agent or the Lenders of any work, labor, supplies, materials or equipment furnished or supplied with respect to the Project.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

Borrower makes the following representations and warranties to and in favor of Administrative Agent, the Lenders and each other Secured Party as of the Closing Date and as of the date of each Borrowing (except that any representation or warranty in this Article 4 which relates expressly to an earlier date, by direct reference or by reference to a document dated a certain date, shall be deemed made only as of such earlier date). All of the representations and warranties in this Article 4 shall survive the Closing Date and the making of the Borrowings.

4.1 Organization . Each of each Borrower Entity and Class B Member (a) is duly formed, validly existing and, if applicable, in good standing under the laws of the jurisdiction of its formation, as applicable, with all requisite organizational or other power and authority under the laws of such jurisdiction to enter into the Transaction Documents to which it is a party and to perform its obligations thereunder and to consummate the transactions contemplated thereby, (b) is duly qualified or authorized to do business and, if applicable, in good standing in each other jurisdiction where the character of its properties or the nature of its activities makes such qualification or authorization necessary, and (c) has the power (i) to carry on its business as now being conducted and as proposed to be conducted by it, (ii) to grant the Liens provided for in, and to be granted by it under, the Financing Documents to which it is a party, and (iii) to take all action as may be necessary to consummate the transactions contemplated under the Transaction Documents to which it is a party and to own or hold under lease and operate the property it purports to own or hold under lease and to carry on its business as now being conducted and as proposed to be conducted under the Transaction Documents to which it is a party. The only member of Borrower is Holdings, which owns one hundred percent (100%) of the issued and outstanding limited liability company interests of Borrower. The only member of Class B Member is Class B Parent, which owns one hundred percent (100%) of the issued and outstanding limited liability company interests of Class B Member. The only members of Holdings are Class A Member and Class B Member, which together own one hundred percent (100%) of the issued and outstanding limited liability company interests of Holdings.

4.2 Authorization; No Conflict; Enforceability .

(a) Each of each Borrower Entity and Class B Member has duly authorized, executed and delivered each Transaction Document to which such Person is a party (or such Transaction Documents have been duly and validly assigned to such Person and such Person has duly and validly assumed the obligations assigned to such Person thereunder), and none of the execution and delivery by any Borrower Entity or Class B Member of, the consummation by any Borrower Entity or Class B Member of the transactions contemplated by, or the compliance by any Borrower Entity or Class B Member with the terms of any Transaction Document to which such Person is a party: (i) conflicts with, or constitutes a default under, or results in the violation of, the provisions of the Organizational Documents of such Person or any Legal Requirement applicable to or binding on such Person or any of its properties or on the Project, except any such conflict, default or violation that could not reasonably be expected to result in a Material Adverse Effect; (ii) constitutes a default under, or results in the violation of, the provisions of any Project Document to which such Person is a party or of any indenture, mortgage, deed of trust, agreement or other instrument to which such Person is a party or by which it or any of its properties or assets is or may be bound or affected, except any such default or violation that could not reasonably be expected to result in a Material Adverse Effect; or (iii) results in, or requires the creation or imposition of (or the obligation to create or impose), any Lien (other than Permitted Liens) upon any of such Person’s property or assets, or results in the acceleration of any of its obligations, other than, in each case, in accordance with any of the Financing Documents. The execution, delivery and performance by each Borrower Entity and Class B Member of each Operative Document to which it is a party does not require the approval or consent of any holder or trustee of any Debt or other obligations of such Borrower Entity or Class B Member which has not been obtained .

(b) Each Transaction Document to which any Borrower Entity or Class B Member is a party is a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights and subject to general equitable principles. None of the Operative Documents to which any Borrower Entity or Class B Member is a party has been amended or modified since the Closing Date, except in accordance with this Agreement.

4.3 Governmental Authorizations . No approval, consent, exemption or authorization by, or notice to, or filing with, any Governmental Authority or any other Person is required in connection with (a) the execution, delivery or performance by any Borrower Entity or Class B Member of any Transaction Document to which such Person is a party, except (i) for approvals, consents, exemptions, authorizations, notices or filings that have been obtained or made or are not required to be obtained or made until a later date and (ii) for those the absence of which could not reasonably be expected to have a Material Adverse Effect, (b) the grant by any Borrower Entity of the Liens granted by it pursuant to the Collateral Documents or (c) upon the recordation of the Deed of Trust and the filings of the UCC Financing Statements listed in Exhibit C-1 , and subject to the timely filing of related continuation statements at a later date, the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof, subject only to Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the Liens granted by the Collateral Documents) .

4.4 Compliance with Law . (a) Each Borrower Entity is in compliance with, and not in default under, its Organizational Documents, and (b) except as otherwise set forth in Exhibit F-3 , Borrower is in compliance with all Legal Requirements applicable to it, the Project and to the Site, except for any such noncompliance or default that could not reasonably be expected to result in a Material Adverse Effect. Without prejudice to the generality of the foregoing, and except as otherwise set forth in Exhibit F-3 , with regard to any conditional use permit obtained in connection with the Project, except as otherwise set forth in Part II of Exhibit F-1 , Borrower has complied with all conditions of approval and mitigation measures included therein required to have been complied with in light of the status of the development, construction and ownership of the Project, and has received all Permits and Approvals required to have been obtained in light of the status of the development, construction and ownership of the Project, in connection therewith, in each case to the satisfaction of the applicable jurisdiction. No notices of violation or potential violation of any Legal Requirement relating to the Project or to the Site have been issued or received by Borrower, except such notices of violation or potential violation of which copies have been delivered to Administrative Agent, and except such notices of violation or potential violation that could not reasonably be expected to result in a Material Adverse Effect.

4.5 Employee Matters; ERISA .

(a) Borrower does not have, and has never had, any employees.

(b) Either (i) there are no ERISA Plans for Borrower or any member of the Controlled Group or (ii) Borrower and each member of the Controlled Group with an ERISA Plan have fulfilled their obligations under the minimum funding standards of ERISA and the Code for each ERISA Plan and have not incurred any material liability to the PBGC or an ERISA Plan under Title IV of ERISA. So long as the source of funds for the Loans are not considered “plan assets” under ERISA, neither the execution nor the delivery of this Agreement nor the consummation of the transactions contemplated hereby will involve a material “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code which is not exempt under Section 408 of ERISA or under Section 4975(d) of the Code.

4.6 Taxes .

(a) Borrower has filed, or has caused to be filed, all federal, state and local income, franchise, doing business and similar Tax returns, all federal, state and material local workers’ compensation premium and unemployment compensation contribution Tax returns and all other material federal, state and local Tax returns that Borrower is required to file, has paid, or caused to be paid, all Taxes shown to be due and payable on such Tax returns and has paid or has caused to be paid all other Taxes, workers’ compensation premiums and unemployment compensation contributions Borrower is required to pay to the extent due (other than those Taxes that it is contesting in good faith and by appropriate proceedings for which appropriate adequate, segregated cash reserves have been established).

(b) Except for any express obligation of Borrower as a tenant or lessee under any Lease to pay Taxes otherwise payable by the landlord or lessor under such Lease or any other agreement that does not have as its principal purpose the allocation of liability for Taxes, Borrower is not a party to any tax sharing arrangement with any Person or any other agreement pursuant to which Borrower is liable for the Taxes of another Person (including with any Affiliate of Borrower).

(c) All Taxes that are required to be withheld or collected by Borrower have been duly withheld and collected and, to the extent required, have been paid to the appropriate Governmental Authority or properly deposited as required by applicable laws (other than those Taxes that Borrower is contesting in good faith and by appropriate proceedings for which adequate, segregated cash reserves have been established).

(d) Borrower is, and has been since its formation, a “disregarded entity” within the meaning of Treasury Regulation Section 301.7701-3 for U.S. federal income tax purposes. No affirmative elections have been filed with the IRS or any state or local taxing authority to treat Borrower as an association taxable as a corporation for U.S. federal, state or local income tax purposes.

(e) Borrower has, since its formation, not been owned by any entity that is not a United States Person.

4.7 Business, Debt, Contracts, Etc . Borrower has not conducted any business other than the business contemplated by the Operative Documents, Borrower has no outstanding Debt or other material liabilities other than pursuant to or allowed by the Operative Documents, and Borrower is not a party to or bound by any material contract obligating Borrower to pay over Fifty Thousand Dollars ($50,000), individually or in the aggregate, other than the Operative Documents to which Borrower is a party. Borrower holds no equity interests in any company and has no subsidiaries.

4.8 Filings . No filing, recording, refiling or rerecording, other than the recordation of the Deed of Trust and the filings of the UCC Financing Statements listed in Exhibit C-1 , and the timely filing of related continuation statements at a later date, is necessary to perfect and maintain the perfection and priority of the security interests created by the Collateral Documents in the Collateral that can be perfected by filing.

4.9 Investment Company . Borrower is not required to register as an “investment company” under the Investment Company Act of 1940, as amended.

4.10 Governmental Regulation .

(a) Except as otherwise set forth in Section 4.27(a) , Borrower will not, solely as a result of the development, construction or ownership of the Project or the entering into of any Operative Document or any transaction contemplated hereby or thereby, become subject to, or not exempt from, rate regulation or financial or organizational regulation by the NCUC under applicable North Carolina law. Borrower is not precluded by any applicable North Carolina law governing rate regulation or financial or organizational regulation by the NCUC from (i) incurring or repaying the principal of and interest on any Obligations or (ii) executing or delivering or, except as set forth in Section 4.16 , performing its obligations under, the Operative Documents to which it is a party.

(b) There is no complaint or administrative proceeding pending with respect to Borrower under any applicable North Carolina law governing rate regulation or financial or organizational regulation by the NCUC or with respect to the FERC regulations implementing the FPA, PURPA and PUHCA that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, and Borrower is not aware of any facts or circumstances which could reasonably be expected to give rise to such a complaint or administrative proceeding in the future.

(c) As of the Closing Date and each Borrowing Date and other than as set forth in Sections 4.16 , 4.27(a) and 5.12 , no other approval is required from any state or federal Governmental Authority with jurisdiction over energy sales or the transmission of electric energy, except as may be required under Section 203 of the FPA upon exercise by a Secured Party of certain remedies allowed under the Financing Documents.

4.11 Regulation U, Etc . Borrower is not engaged principally, or as one of its principal activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (as defined or used in Regulation T, U or X of the Federal Reserve Board), and no part of the proceeds of the Borrowings will be used by Borrower to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or otherwise in violation of Regulation T, U or X of the Federal Reserve Board.

4.12 Financial Statements . The financial statements of Borrower most recently delivered to Administrative Agent pursuant to Section 3.1 or Section 5.4 , as applicable, are true, correct and complete and fairly present the financial condition of the Person (or, if such statements are prepared on a consolidated basis, Persons) to which they relate as of the date thereof, and have been prepared in accordance with GAAP, subject to normal year-end adjustments and lack of footnotes. Borrower has no material liabilities, direct or contingent, except as has been disclosed or otherwise accounted for in such financial statements or pursuant to the Financing Documents or the Project Documents or otherwise disclosed in writing to Administrative Agent.

4.13 Partnerships and Joint Ventures . Borrower is not a general partner or a limited partner in any general or limited partnership or a joint venturer in any joint venture or a member in any limited liability company.

4.14 Existing Defaults . Borrower is not in default under any material term of any Project Document and, to Borrower’s knowledge, no other party to any Project Document is in default under any material term thereunder .

4.15 No Default . No Default or Event of Default has occurred which has not been disclosed to Administrative Agent by Borrower in writing. No Default or Event of Default has occurred and is continuing. The consummation of the transactions contemplated by this Agreement and the other Operative Documents would not cause a default under any Project Document or give any party to any Project Document the right to terminate or alter the terms of such Project Document or a right to claim damages thereunder.

4.16 Permits; Applicable Approvals .

(a) No material Permits are necessary for the Project under any Governmental Rule as the Project is currently designed that are or will become Applicable Permits other than the Permits described in Exhibit F-1 . As of the date of each Credit Event, each Applicable Permit is either (i) necessary to have been obtained as of such date, validly issued, final and in full force and effect and, if an appeal period is specified by a Governmental Rule, the appeal period has expired and no judicial, administrative or other proceedings are pending or, to Borrower’s knowledge, threatened that may allow material modification, suspension or revocation, in the case of those Permits listed in Part I of Exhibit F-1 (in each case other than as set forth in Exhibit F-3 ), or (ii) of a type that, in light of the status of the acquisition, development, construction and ownership of the Project as of the date of such Credit Event, is not required to be obtained on or before the date of such Credit Event and is of a type that is ministerial in nature and routinely granted on application, as contemplated by the Operative Documents in the case of those Applicable Permits listed in Part II of Exhibit F-1 . Borrower has no reason to believe that any Applicable Permit so indicated on Part II of Exhibit F-1 will not be obtained without substantial difficulty, expense or delay before it becomes necessary. No Borrower Entity is in material violation of any Applicable Permit and, except as otherwise set forth in Part II of Exhibit F-1 , there are no material unsatisfied conditions with respect to any Applicable Permit and no Applicable Permit is subject to any material restriction, condition, limitation or suspension. Borrower has notified Administrative Agent of each material permit not listed on Exhibit F-1 that, since the Closing Date, due to a change in applicable law or otherwise, has become an Applicable Permit. No Applicable Permit contains any terms or conditions that provide for material curtailment or other material operational restrictions with respect to the Project.

(b) Except as set forth in Exhibit F-3 , to Borrower’s knowledge, as of the date of each Credit Event, Borrower and each other Major Project Participant possesses all licenses, Applicable Permits, franchises, patents, copyrights, trademarks and trade names, or rights thereto, necessary to perform its duties as of such date under the Operative Documents to which it is a party, and such party is not in violation of any valid rights of others with respect to any of the foregoing, in each case which could reasonably be expected to have a Material Adverse Effect.

(c) All Applicable Approvals are listed on Exhibit F-1 . Except as otherwise set forth in Exhibit F-3 , each Applicable Approval listed in Part I of Exhibit F-1 is validly issued, final and in full force and effect and is not subject to any current legal proceedings or any material unsatisfied conditions, and all applicable waiting or appeal periods with respect to such Applicable Approvals have expired without any material adverse action being taken by the applicable Governmental Authority. Each Applicable Approval listed in Part II of Exhibit F-1 is not required to be obtained as of the Closing Date and is not required to be obtained until the applicable dates indicated in Part II of Exhibit F-1 , and Borrower is not aware of any facts or circumstances to indicate that such Applicable Approval will not be obtained on or prior to the required dates without undue expense.

(d) Since the Closing Date, no Applicable Approval has been amended, modified or supplemented in a manner that could reasonably be expected to have a Material Adverse Effect.

4.17 Offices, Location of Collateral .

(a) As of the Closing Date, the chief executive office or principal place of business (as such term is used in Article 9 of the Uniform Commercial Code) of Borrower is located at c/o VivoPower USA LLC, 140 Broadway, 28th Floor, New York, NY 10005. Borrower’s organizational identification number is 1338518.

(b) All of the Collateral in Borrower’s possession (other than the Collateral under the Deed of Trust, the Accounts, any other deposit accounts listed or otherwise described on Schedule 2 , general intangibles and certificated securities and other intangible property included in the Collateral) is located at the address set forth in Section 4.17(a) . All of the Collateral under the Deed of Trust is located either at the address set forth in Section 4.17(a) or at the Site.

4.18 Material Adverse Change . Since the Closing Date, there has occurred no material adverse change in the Project Budget and Schedule or in the economics or feasibility of constructing the Project or operating the Project, except as has been approved by Administrative Agent with the consent of the Required Lenders, and there has occurred no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect .

4.19 Environmental .

(a) Except as set forth in Exhibit F-4 : (i) Borrower is not in violation of (and has not received any notice in writing that it is or was in violation of) any Environmental Law or any Applicable Permit issued pursuant to any Environmental Law that could reasonably be expected to result in a material liability to Borrower or could otherwise reasonably be expected to result in a Material Adverse Effect; (ii) Borrower and, to the knowledge of Borrower, no third party has used, Released, generated, manufactured, produced, treated, handled or stored in, on or under the Site or other Real Property that is the subject of the Real Property Documents, or transported thereto or therefrom, any Hazardous Substances in a manner that could reasonably be expected to subject Administrative Agent, the Lenders or Borrower to material liability under any Environmental Law; (iii) to the knowledge of Borrower, there are no underground tanks, whether operative or temporarily or permanently closed, located on the Site or the Real Property that is the subject of the Real Property Documents; (iv) there are no Hazardous Substances used, stored or present at or on the Site or the Real Property that is the subject of the Real Property Documents, in material violation of, or that could result in material liability under, Environmental Law or any Applicable Permit issued pursuant to any Environmental Law in amounts or concentrations requiring investigation or cleanup under Environmental Law; and (v) to Borrower’s knowledge, there is no condition, circumstance, action, activity or event that could reasonably be expected to form the basis of any material violation of Environmental Law, or any material violation of any Applicable Permit issued pursuant to any Environmental Law, by Borrower, or any material liability under any Environmental Law to, or any material Environmental Claim against, Administrative Agent, the Lenders or Borrower.

(b) Except as set forth on Exhibit F-4 , there is no pending or, to the knowledge of Borrower, threatened written Environmental Claim and, to the knowledge of Borrower, there is no proceeding, investigation or inquiry by any Governmental Authority (including the U.S. Environmental Protection Agency) or any non-governmental third party, in each case with respect to the presence or Release of Hazardous Substances in, on, from or to the Site or other Real Property that is the subject of the Real Property Documents or with respect to the violation of, or liability under, any Environmental Law or any Applicable Permit issued pursuant to any Environmental Law relating in any way to the Project that could reasonably be expected to have a Material Adverse Effect or could reasonably be expected to result in a Default or Event of Default.

(c) Except as set forth on Exhibit F-4 , Borrower has no knowledge of any past or existing violations of any Environmental Laws, or of any Applicable Permits issued pursuant to any Environmental Law, by any Person relating in any way to the Site or the Real Property that is the subject of the Real Property Documents that could reasonably be expected to have a Material Adverse Effect.

(d) Except as set forth on Exhibit F-4 , there are no land use restrictions, institutional controls, engineering controls or other restrictions on the Project imposed pursuant to any Environmental Laws or any Applicable Permits issued pursuant to any Environmental Law that could reasonably be expected to have a Material Adverse Effect.

4.20 Litigation . Except as set forth on Exhibit F-3 , there are no pending or, to Borrower’s knowledge, threatened written actions or proceedings of any kind, including actions or proceedings of or before any Governmental Authority, to which Borrower or the Project is a party or is subject, or by which Borrower or any of its properties or revenues or the Project are bound that in each case could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect .

4.21 Title and Liens . Borrower has good and, with respect to Real Property, marketable and insurable title to, or leasehold interests in, the assets owned or leased by it that comprise the Project and all of the Collateral of Borrower then existing and relating to the Project. Except as delivered to Administrative Agent in accordance with the terms hereof, Borrower has received no written notice that any material portion of the Real Property is subject to (i) any condemnation proceeding or (ii) any unregistered rights of third parties other than Permitted Liens. The Real Property is sufficient for the intended installation of the Project. Except for the Accounts, any other deposit accounts listed or otherwise described on Schedule 2 , investments permitted under the Depositary Agreement and this Agreement, accounts receivable, rights under policies of insurance, and rights in and under the Operative Documents: (a) Holdings does not own assets or Collateral other than the assets or Collateral comprising Borrower and the respective limited liability company interests of Borrower, assets comprising of rights under the Tax Equity Documents and the Equity Capital Contribution Account; and (b) Borrower does not own assets other than the assets comprising the Project. Upon proper recordation of the Deed of Trust, the lien of the Deed of Trust will constitute a valid and subsisting first priority lien of record on the Real Property included in the Mortgaged Property described in the Deed of Trust, subject to no Liens except Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the lien of the Deed of Trust .

4.22 Utility Services . The Project is connected to, or has available to it upon commercially reasonable terms, all public and private utility systems whose service is necessary for the full utilization of the Project for its intended purpose under the relevant Project Documents.

4.23 Roads and Transmission Lines .

(a) All roads necessary for the full utilization of the Project for its intended purposes under the Project Documents have either been completed or the necessary rights of way therefor have been acquired.

(b) All necessary easements, rights of way and other rights for the construction, operation, interconnection and utilization of any necessary Project transmission lines have been acquired.

(c) All of the easements, rights of way and other rights referred to in Sections 4.23(a) and 4.23(b) are held by Borrower, and are good, valid and subsisting with a good and marketable title thereto free and clear of all Liens other than Permitted Liens.

4.24 Project Documents .

(a) Other than those services, materials, real property interests, Real Property Documents and other rights that can be reasonably expected to be commercially available when and as required, the services to be performed, the materials to be supplied and the real property interests, the Real Property Documents and other rights granted pursuant to the Project Documents:

(i) are sufficient to enable (A) the Project to be located and constructed on the Site and (B) the Project to be operated and maintained on the Site, in each case in accordance with all Legal Requirements, the Project Documents and the Project Budget and Schedule; and

(ii) provide adequate ingress to and egress from the Project for the construction, operation and maintenance of the Project under the Project Documents.

(b) There are no material services, materials or rights required for the construction, operation or maintenance of the Project in accordance with the EPC Agreement, the Plans and Specifications, the O&M Agreement, the Interconnection Agreement and the Power Purchase Agreement other than those available under the Project Documents or that can reasonably be expected to be commercially available, as and when necessary, on commercially reasonable terms.

(c) All material agreements relating to the Project to which any Borrower Entity is a party and all Real Property Documents, in each case in effect on the Closing Date, are listed on Exhibit F-5 and Schedule 3 . Copies of all Project Documents to which any Borrower Entity is a party and Real Property Documents listed on Exhibit F-5 and Schedule 3 as currently in effect have been delivered to Administrative Agent by or on behalf of Borrower. Except as has been previously disclosed in writing to Administrative Agent, as of the Closing Date, none of the Project Documents or the Real Property Documents to which any Borrower Entity is a party has been amended, modified or terminated and each such Project Document and Real Property Document is in full force and effect.

4.25 Project Document Representations . Each of the representations and warranties made by Borrower in the Project Documents was true and correct in all material respects as of the date made (or, if any such representations and warranties relate to an earlier date, as of such earlier date) .

4.26 OFAC and Related Matters .

(a) Except to the extent any violation would be due solely to the identity or nationality of one or more parties hereto or their Affiliates, any Borrower Entity or their respective Affiliates:

(i) None of the transactions contemplated hereby will violate (A) the United States Trading with the Enemy Act, as amended, (B) any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto (as amended, the “ Department of Treasury Rule ”), (C) Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism) (as amended, the “ Terrorism Order ”) or (D) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, Public Law 107-56 (October 26, 2001), as amended (the “ Patriot Act ”).

(ii) No Borrower Entity and no other subsidiary of Sponsor is a “blocked person” as described in Section 1 of the Terrorism Order or a Person described in the Department of Treasury Rule.

(iii) None of any Borrower Entity or any other subsidiary of Sponsor knowingly engages in any dealings or transactions, or is otherwise knowingly associated, with a “blocked person” as described in Section 1 of the Terrorism Order or a Person described in the Department of Treasury Rule.

(b) None of any Borrower Entity or any other subsidiary of Sponsor: (i) appears on the OFAC SDN List; (ii) is included in, owned by, controlled by, acting for or on behalf of, providing assistance, support, sponsorship or services of any kind to, or otherwise associated with, any of the Persons referred to or described in the OFAC SDN List; or (iii) has conducted business with, or engaged in any transaction with, any Person named on the OFAC SDN List or, to Borrower’s knowledge, any Person included in, owned by, controlled by, acting for or on behalf of, providing assistance, support, sponsorship or services of any kind to, or otherwise associated with, any of the Persons referred to or described in the OFAC SDN List.

4.27 Energy Regulation .

(a) FERC Regulation . Prior to the generation, transmission, distribution or production, and the sale or delivery of any electric energy (including test energy), capacity or ancillary services from the Project, Borrower made all necessary filings with the FERC for the Project to be a QF for so long as any the Project meets the criteria of a QF, as set forth in 18 C.F.R. § 292.204. Borrower is exempt from regulation under PUHCA, pursuant to 18 C.F.R. § 366.3(a), except to the extent Borrower is subject to regulation under PUHCA with respect to (A) maintaining its exempt wholesale generator status and (B) any regulation as a “subsidiary company” or an “affiliate” of a “holding company,” as such terms are used within the meaning of 42 U.S.C. § 16451, that is entitled to the exemptions and waivers set forth in 18 C.F.R. § 366.3(a). Each of Holdings and Class B Member is a “holding company” under PUHCA, but is exempt from regulation as such under 18 C.F.R. §§ 366.2 and 366.21, pursuant to 18 C.F.R. § 366.3(a). No Borrower Entity (other than Borrower) will, solely as a result of the development, construction, ownership, leasing or operation of the Project by Borrower, the generation, transmission or sale of electric energy from the Project, or the entering into by such Borrower Entity of any Operative Document or any transaction contemplated hereby or thereby, be subject to, or not exempt from, regulation under the FPA.

(b) Lenders Not Subject to Regulation . None of Administrative Agent or any Secured Parties, nor any Affiliate (as that term is defined in Section 1262(1) of PUHCA, 42 U.S.C. § 16451(1)) of any of them, will, solely as a result of the development, construction, ownership, leasing or operating of the Project, the sale or transmission of electricity therefrom or the entering into of any Operative Document or any transaction contemplated hereby or thereby by such Secured Party, become (i) subject to regulation as a “public utility” under the FPA, (ii) subject to, or not exempt from, regulation as a “holding company” under PUHCA, or (iii) subject to rate regulation or financial or organizational regulation by the NCUC under North Carolina law, except that (A) if any Secured Party otherwise is a “holding company” as defined in PUHCA, the purchase, acquisition or taking by such Secured Party of a security (as defined in Section 3(16) of the FPA, 16 U.S.C. § 796(16)) of Borrower, because Borrower is an “electric utility company” as defined in PUHCA, may be subject to Section 203(a)(2) of the FPA, 16 U.S.C. § 824b(a)(2) (provided that such Secured Party may be eligible for a blanket authorization granted pursuant to 18 C.F.R. § 33.1(c), if such acquisition meets the criteria of a blanket authorization), and (B) upon exercise by a Secured Party of certain remedies allowed under the Financing Documents, such Secured Party and its Affiliates (as that term is defined in Section 1262(1) of PUHCA, 42 U.S.C. § 16451(1)) may become subject to regulation under the FPA or PUHCA, or both the FPA and PUHCA, to the extent such entity becomes an owner (whether directly or indirectly) or operator of, or controls, Borrower or the Project’s FERC-jurisdictional facilities or contracts, if any.

(c) Labor Disputes and Acts of God . Neither the business nor the properties of Borrower (or, to the knowledge of Borrower, any Major Project Participant) is affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy, or other casualty or force majeure event (whether or not covered by insurance), which could reasonably be expected to have a Material Adverse Effect.

4.28 Disclosure . None of this Agreement, any other Financing Document or any report, financial statement, certificate or other written information furnished to Administrative Agent or any Lender by or, to the knowledge of Borrower, on behalf of Borrower in connection with the transactions contemplated by this Agreement, the other Financing Documents and the Project Documents or the design, description, testing or operation of the Project, taking into account documentation furnished by or, to the knowledge of Borrower, on behalf of Borrower to Administrative Agent or to the Independent Engineer on or prior to the date so furnished (such documentation and information to be taken as a whole, including, without limitation, updated or supplemented documentation and information), contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not materially misleading under the circumstances in which they were made at the time such statements were made . There is no fact known to any Borrower Entity which such Borrower Entity has not disclosed, or caused to be disclosed, to Administrative Agent or the Lenders in writing which could reasonably be expected to have a Material Adverse Effect . Notwithstanding the foregoing, no representation or warranty is made in this Section 4.28 respecting any forward looking information or projections, which representations and warranties are governed exclusively by Section 4.29 .

4.29 Projections and Project Budget and Schedule . The Project Budget and Schedule and the Base Case Projections (a) to Borrower’s knowledge, are based on reasonable assumptions as to all legal and factual matters material to the estimates set forth therein and set forth an accurate representation of the expected financial performance of the Project over the life of the credit facilities provided for in this Agreement, (b) are consistent in all material respects with the provisions of the Operative Documents and (c) indicate that the estimated Project Costs will not exceed funds available to pay Project Costs. There are no material Project Costs (including anticipated sales and use taxes) that are not included in the Project Budget and Schedule.

4.30 Collateral . The security interests in the Collateral granted to Collateral Agent under the Collateral Documents constitute as to personal property included in the Collateral, and, with respect to subsequently acquired personal property included in the Collateral, will constitute, perfected and, subject only to Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the Liens granted by the Collateral Documents, first priority security interests after the proper filing of each applicable UCC Financing Statement listed on Exhibit C-1 hereof to the extent a security interest in such personal property may be perfected by the filing of such Financing Statement. Except to the extent control of portions of the Collateral is required for perfection of the security interests in the Collateral granted to Collateral Agent under the Collateral Documents, upon the proper filing of each applicable UCC Financing Statement referred to in the immediately preceding sentence, all action as is necessary will have been taken to perfect, subject only to Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the Liens granted by the Collateral Documents, Collateral Agent’s first priority security interests in the Collateral. As of the Closing Date, Collateral Agent will have been properly provided control of all Collateral as to which control is required for perfection of the security interests in such Collateral granted to Collateral Agent under, and to the extent required by, the Collateral Documents .

4.31 Intellectual Property . Borrower owns, or has the right to use, all material patents, trademarks, service marks, trade names, copyrights, licenses and other rights, which are necessary for the operation of its business . Borrower has not received notice that: (a) any material product, process, method, substance, part or other material presently contemplated to be sold by or employed by Borrower in connection with its business, including, without limitation, any CMS, will infringe in any material manner any patent, trademark, service mark, trade name, copyright, license or other right owned by any other Person; (b) there is pending or threatened any claim or litigation against or affecting Borrower contesting its right to sell or use any such product, process, method, substance, part or other material; or (c) there is, or there is pending or proposed, any patent, invention, device, application or principle, or any statute, law, rule, regulation, standard or code, which could reasonably be expected to have a Material Adverse Effect .

4.32 Land Not in Flood Zone . Except as disclosed on the applicable Survey, but in no event with respect to Real Property where Modules are, or are expected to be, located, none of the Collateral includes improved real property that is or will be located in an area that has been identified by the Director of the Federal Emergency Management Agency as an area having special flood hazards and in which flood insurance has been made available under the Flood Laws .

4.33 Insurance . Insurance complying with Section 5 . 19 hereof is in full force and effect and all premiums then due thereon have been paid in full. Borrower has not received any notice from any insurance company as to any cancellation or reduction, or other material adverse change in, coverage of such insurance which cancellation, reduction or change has not been remedied in accordance with the requirements hereof .

4.34 Accounts . Borrower has no “deposit account” with a “bank” (in each case, as defined in Section 9-102 of the Uniform Commercial Code) other than any deposit account included in the Accounts established in accordance with this Agreement and the other Financing Documents and other than any deposit accounts listed or otherwise described on Schedule 2 .

4.35 Anti-Terrorism Laws . Borrower is not in violation of any Anti-Terrorism Laws. The use of the Loans by Borrower will not violate any Anti-Terrorism Laws .

4.36 Labor Laws . Borrower is not a party to any collective bargaining agreement or other contract, agreement or understanding, or subject to any arbitration award, with any union, labor organization or similar organization or representative of any of the employees of Borrower. No labor-related organizational effort, election activities or request or demand for negotiations, recognition or representation has occurred with respect to Borrower. Borrower is, and has been, in compliance with all Legal Requirements relating to employment or the workplace, including, without limitation, provisions relating to wages, hours, collective bargaining, safety and health, immigration or work authorization, equal employment opportunity, the withholding of material income and other taxes, unemployment compensation, workers’ compensation, employee privacy and right to know, classification of contractors and temporary employees, other employment terms and conditions, and plant closings and layoffs (including the Worker Adjustment and Retraining Notification Act and comparable state, local or other laws), and Borrower is not, and has not been, (individually or collectively in any respect) liable for any arrears of wages, other compensation or benefits, or any taxes, charges, fines or penalties for failure to comply with any of the foregoing, except for any noncompliance or any arrearage, taxes, charges, fines or penalties that could not reasonably be expected to result in a Material Adverse Effect .

4.37 Equity Interests . All of the outstanding limited liability company interests in Borrower have been validly created and are owned free and clear of all Liens except for any Liens or similar rights created under the Collateral Documents .

4.38 Project Work . No portion of the Project was placed in service prior to the Closing Date. All work that has been done on the Project has been done in a good and workmanlike manner and in accordance with the Applicable Permits, the Applicable Approvals, the Material Project Documents and Prudent Utility Practices, except where the failure to adhere to the foregoing could not reasonably be expected to result in a Material Adverse Effect .

4.39 Affiliate Assignment . As of the initial Construction Loan, all Material Project Documents in respect of the Project required to be in the name of Borrower and all Applicable Permits necessary for the development, construction, ownership and operation of the Project are in Borrower’s name or have been duly assigned or transferred to Borrower, or in the case of Applicable Permits, have been issued in the name of Borrower .

4.40 ITC Matters .

(a) No beneficial owner of an interest in Borrower is a Disqualified Person.

(b) All of the materials used to build the Project will be new and previously unused.

(c) No grant, federal income tax credit, governmental subsidy or tax-exempt financing has been received or applied for with respect to the Project or any asset thereof, except for the investment tax credit received or receivable by the Class A Member.

(d) The Project is intended to use and will use solar resources to generate electricity within the meaning of Code Section 48.

4.41 Expected Funding Amount .

(a) Borrower has not been notified, and is not otherwise aware, of any event, condition or circumstance that could reasonably be expected to result in the sum of the expected capital contributions by NES on the NES Funding Date being less than the NES Funding Amount.

(b) Borrower has not has been notified, and is not otherwise aware, of any event, condition or circumstance that could reasonably be expected to result in the sum of the expected capital contributions by the Class A Member on each Tax Equity Funding Date being less than the Tax Equity Funding Amount.

4.42 Affected Systems . There have not been any affected systems identified in the Interconnection Agreement that have not been waived by the affected parties or otherwise accounted for by the Project or the applicable interconnection utility.

4.43 Obligations Under MIPA . As of the Closing Date, all payment obligations under the MIPA have been fully performed by Holdings.

4.44 Remedies Under Module Warranties . The Module Warranty Provider has confirmed to Borrower that if any of such provider’s Modules are deemed defective and replacement is necessary, each replacement module will be of congruent physical and technical specifications and will have a power rating equal to or higher than the Module subject to replacement, such that the quantity of Modules installed in the Project shall not exceed the “as-built” drawings for the Project.

4.45 Assignment of Warranties . To the extent warranties are required to be assigned at Substantial Completion under the EPC Agreement, no later than the date that Substantial Completion has been achieved the EPC Contractor has assigned all warranties and guarantees from all subcontractors and vendors associated with the Project to Borrower.

4.46 Regulatory Matters . The transactions provided for in the MIPA require no pre-consummation or authorization of FERC under Section 203 of the FPA.

ARTICLE 5
AFFIRMATIVE COVENANTS OF BORROWER

Borrower covenants and agrees that, so long as this Agreement is in effect, Borrower will, unless the Required Lenders or if so specified, all Lenders, waive compliance in writing:

5.1 Use of Loan Proceeds . Unless otherwise applied by Administrative Agent pursuant to this Agreement, cause the proceeds of the Construction Loans and the ITC Bridge Loans to be deposited into the Construction Account and for all such proceeds to be used for the payment of Project Costs as necessary to achieve Substantial Completion and Final Completion, in accordance with the Project Budget and Schedule.

5.2 Payment . Pay all sums due under this Agreement and the other Financing Documents according to the terms hereof and thereof.

5.3 Notices . Promptly, upon acquiring notice or giving notice, as the case may be, or obtaining knowledge thereof, or as otherwise provided in this Section 5.3 , give written notice to Administrative Agent of the following (it being understood that delivery of such notice shall not be deemed to result in a waiver of any Default or Event of Default arising from any of the matters notified):

(a) Any litigation, action or proceeding pending or, to the knowledge of Borrower, threatened in writing against any Borrower Entity and involving claims against such Borrower Entity or the Project in excess of One Hundred Thousand Dollars ($100,000) in the aggregate or involving any material injunctive, declaratory or other equitable relief, such notice to include copies of all papers filed in such litigation, action or proceeding and to be given monthly if any such papers have been filed since the last notice given;

(b) Any dispute or disputes that exist between any Borrower Entity and any Governmental Authority and which involve (i) claims against such Borrower Entity that individually exceed Fifty Thousand Dollars ($50,000) or in the aggregate in any fiscal year of such Borrower Entity exceed One Hundred Thousand Dollars ($100,000), (ii) injunctive or declaratory relief, (iii) the revocation, material modification or suspension of any Applicable Permit or the imposition of additional material conditions with respect to any Applicable Permit, or (iv) any Liens for Taxes due and payable but not paid;

(d) Any casualty, damage or loss, whether or not insured, through fire, theft, other hazard or casualty, or through any act or omission of any Borrower Entity or any of its partners, officers, directors, employees, contractors, consultants or representatives, or through any act or omission of any other Person, if such casualty, damage or loss (i) affects any Borrower Entity or the Project in excess of Fifty Thousand Dollars ($50,000) for any one occurrence or in the aggregate per fiscal year or (ii) results in any material curtailment of operation of, or in the deliveries of electrical production from, the Project or any forced outage of the Project under the Power Purchase Agreement that would reasonably be expected to last more than forty-eight (48) hours, and Borrower shall keep Administrative Agent timely apprised of any insurance claim proceedings related to such casualty, damage or loss, including providing copies of any notice received from any insurance company indicating that it is not obligated to pay any named insured, or that it is withholding any amounts that such Borrower Entity is claiming are due and payable under any insurance policy maintained by such Borrower Entity;

(e) Any cancellation or material change in the terms, coverages or amounts of any insurance described in Section 5.19 ;

(f) Any matter which has, or could reasonably be expected to have, a Material Adverse Effect;

(g) Initiation of any condemnation or eminent domain proceedings involving the Project or any portion thereof;

(h) Any contractual obligations incurred by Borrower exceeding One Hundred Thousand Dollars ($100,000) in any fiscal year of Borrower in the aggregate and not part of the Project Budget and Schedule;

(i) Any act or agreement by Borrower to become a surety, guarantor, endorser or accommodation endorser for a third party other than endorsement of negotiable instruments for collection purposes and other than under any Operative Documents;

(j) Any intentional withholding of compensation to (i) the O&M Contractor under the O&M Agreement or (ii) the EPC Contractor under the EPC Agreement, in each such case, that continues for more than thirty (30) days, other than retention provided by the express terms of the O&M Agreement or the EPC Agreement, as applicable;

(k) Any termination, notice of event of default or other material notice given or received by Borrower under any Material Project Document or any other Real Property Document, including, without limitation, any notice of any major unscheduled repair or replacement of parts and any notice of event of default received by any Borrower Entity under any Operating Agreement or with respect to the Tax Equity ECCA or the NES ECCA;

(l) A copy of (i) any start-up and commissioning and performance tests which are to be performed under the EPC Agreement and a copy of any “Substantial Completion Certificate” (as such term is defined in the EPC Agreement) for the Project and (ii) any fully signed Final Acceptance Certificate (as such term is defined in the EPC Agreement), together with any supporting documents and attachments, delivered by the applicable Major Project Participant to Borrower in connection therewith;

(m) Any event of force majeure asserted under any Material Project Document and, to the extent reasonably requested by Administrative Agent and reasonably available to Borrower, copies of related invoices, statements, supporting documentation, schedules, data or affidavits delivered under such Material Project Document;

(n) Any written notice from the FERC, the NCUC or any other Governmental Authority (i) initiating or threatening the commencement of proceedings against any Borrower Entity or the Project that could materially affect the Project or impose material incremental expenses on such Borrower Entity or the Project, or (ii) alleging a violation of the regulations of the FERC, or the NCUC, including any threat or claim with respect to the loss of the QF or exempt wholesale generator status of the Project;

(o) Any (i) fact, circumstance, condition or occurrence at, on or arising from the Site or other Real Property subject to the Real Property Documents that results in material noncompliance with or material liability under any Environmental Law, or any Release of Hazardous Substances on or from the Site or other Real Property subject to the Real Property Documents, that has resulted or could reasonably be expected to result in personal injury required to be reported by the EPC Contractor or the O&M Contractor under any applicable Material Project Document or to result in material property damage or to have a Material Adverse Effect, and (ii) pending Environmental Claim asserted or, to Borrower’s knowledge, threatened in writing against Borrower or, to Borrower’s knowledge, any of its Affiliates, contractors or lessees or any other Persons, arising in connection with their occupying or conducting operations on or at the Project, the Site or any other Real Property subject to the Real Property Documents and which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect;

(p) Reserved ;

(q) Any event that could be reasonably likely to cause O&M Costs to exceed by more than five percent (5%) the allocated budgeted amounts corresponding thereto in the then-applicable annual operating budget;

(r) Any Additional Project Document or any amendment, modification or waiver to any existing Material Project Document (together with copies of such Additional Project Document or amendment not otherwise delivered to Administrative Agent);

(s) Any event of default, foreclosure or other proceeding under a mortgage in favor of the fee owner of the Site;

(t) The occurrence of any Reportable Event with respect to an ERISA Plan, which notice shall describe in reasonable detail the facts which constitute the Reportable Event;

(u) Any notice of withdrawal and assessment of withdrawal liability from a Multiemployer Plan;

(v) Any material breach by an Affiliate of any Borrower Entity of the terms of any Project Document to which that Affiliate is a party;

(w) Any material regular or periodic report and filing (without exhibits unless expressly requested by a Lender) made by Borrower to or with any Governmental Authority, other than any annual report (or similar report) filed by Borrower with the office of the Secretary of State or equivalent office of any jurisdiction in which Borrower is formed or qualified or authorized to transact business;

(x) Any material violation of any Applicable Permit or Applicable Approval, or any termination, suspension or other loss of any Applicable Permit or Applicable Approval;

(y) Any payment obligation of Borrower that has arisen under the Power Purchase Agreement after the Closing Date;

(z) Any notice or demand delivered to any Borrower Entity or the Class A Member by any Governmental Authority with respect to the ITC or any Federal Tax Benefit;

(aa) Copies of all reports and material notices received or issued by Class B Member under the Holdings Operating Agreement or the other Tax Equity Documents;

(bb) Copies of any warranty cards or other notice delivered to or provided by a Warranty Provider indicating the starting date of the warranty period under the applicable Warranty Agreement; and

(cc) Copies of all progress schedules and progress reports provided to Borrower under Section 4.2 of the EPC Agreement.

5.4 Financial Statements .

(a) Deliver to Administrative Agent (or cause to be delivered to Administrative Agent) with sufficient copies for the Lenders (including by Administrative Agent’s posting on a secure electronic data site accessible to the Lenders), in form and substance reasonably satisfactory to Administrative Agent and the Required Lenders:

(i) Within sixty (60) days after the close of the first, second and third quarterly periods of its fiscal year, quarterly (and year-to-date) (consolidated, if applicable) (A) unaudited consolidated financial statements of Class B Parent and unaudited consolidated and consolidating financial statements of Holdings, and (B) unaudited financial statements of, and prepared by, the Power Purchaser, in all such cases for clauses (A) and (B) of this Section 5.4(a)(i) , subject to normal year-end adjustments and the absence of footnotes, and to include in all such cases for clauses (A) and (B) of this Section 5.4(a)(i) , a balance sheet and statements of income; provided that (1) for any of the foregoing Major Project Participants which is a public company and is required or permitted to file reports under the Exchange Act, the availability of its report on Form 10-Q or the availability of the financial statements referred to above on such Major Project Participant’s website shall satisfy the requirements herein, (2) for any Major Project Participant described in the immediately preceding clause (1) which is a public company and, pursuant to the provisions of applicable law, is only required to file semi-annual financial statements, only semi-annual financial statements shall be required under this Section 5.4(a)(i) , and (3) Borrower shall only be required to use commercially reasonable efforts to deliver the financial statements referred to in clause (B) of this Section 5.4(a)(i) ; and

(ii) Within one hundred twenty (120) days after the close of each fiscal year (commencing with the fiscal year ending December 31, 2016), (A) audited consolidated financial statements of Class B Parent and audited consolidated and consolidating financial statements of Holdings, (B) audited consolidated financial statements of the EPC Contractor, the O&M Contractor, the EPC Parent, the Module Warranty Provider, the Tracker Supplier and the Inverter Supplier, and (C) audited consolidated financial statements of the Power Purchaser, including, in each such case, statements of equity, balance sheets as of the close of such year, and statements of income, all prepared in accordance with GAAP (or, if GAAP is not applicable, in accordance with International Financial Reporting Standards) and certified by an independent certified public accountant selected by the Person whose financial statements are being prepared, which certification as to the audited financial statements referred to in clause (A) of this Section 5.4(a)(ii) shall not be qualified or limited because of restricted or limited examination by such accountant of any material portion of the records of the applicable Person; provided that (x) for any of such Major Project Participants described in this Section 5.4(a)(ii) (other than any Borrower Entity) which is a public company and is required or permitted to file reports under the Exchange Act, the availability of its report on Form 10-K or Form 20-F or the availability of the financial statements referred to above on such Major Project Participant’s website shall satisfy the requirements herein, (1) Borrower shall only be required to use commercially reasonable efforts to deliver the financial statements referred to in clauses (B) and (C) of this Section 5.4(a)(ii) ; and (2) Borrower shall not have any obligation to deliver the foregoing financial statements of the EPC Contractor after expiration of all applicable warranty periods under the EPC Agreement.

(b) Each time the financial statements of any Borrower Entity or Class B Parent are delivered under Section 5.4(a)(i) or Section 5.4(a)(ii) , deliver to Administrative Agent along with such financial statements (i) a certificate signed by a Responsible Officer of Borrower, certifying that (A) each of the representations and warranties contained in Sections 4.1 , 4.2 , 4.3 and 4.4 are true and correct in all material respects as of the date of such certificate (or if any such representation and warranty relates solely as of an earlier date, as of such earlier date) and (B) such Responsible Officer has made or caused to be made a review of the transactions and financial condition of the applicable Person during the relevant fiscal period and that such review has not, to the knowledge of such Responsible Officer, disclosed the existence of any event or condition which constitutes a Default or an Event of Default hereunder or under any other Financing Document applicable to such Person, or if any such event or condition existed or exists, the nature thereof and the corrective actions that such Person has taken or proposes to take with respect thereto, and (ii) a certificate signed by a Responsible Officer of such Borrower Entity or Class B Parent, as applicable, certifying that such financial statements are true, correct and complete and fairly present the financial condition of the Person (or, if such statements are prepared on a consolidated basis, Persons) to which they relate as of the date thereof, and have been prepared in accordance with GAAP, subject to normal year-end adjustments and lack of footnotes.

5.5 Reports .

(a) Deliver to Administrative Agent monthly, within thirty (30) days after the end of each month, and at such other times as Administrative Agent may reasonably request, a report of Borrower describing in reasonable detail (i) the estimated date on which Substantial Completion and Final Acceptance (in each case, as such term is defined in the EPC Agreement) shall be achieved for the Project, (ii) the status of construction of the Project (and a description of any material defects or deficiencies with respect thereto or any material discrepancies with the applicable Plans and Specifications), (iii) any material disputes with contractors, materialmen, suppliers or others relating to the Project and any related claims against Borrower, (iv) any performance guarantee or warranty claims made by or against Borrower, (v) if Substantial Completion and Final Acceptance do not occur in accordance with the Project Budget and Schedule, an explanation of the reasons that Substantial Completion or Final Acceptance did not occur in accordance with the Project Budget and Schedule, (vi) the conformance to the Project Budget and Schedule and the amount of Project Costs incurred to date and during the most recent monthly period and, in the event of a material variance, the reasons therefor, and (vii) the status of matters relating to the construction of the interconnection facilities under the Interconnection Agreement since the prior report hereunder.

(b) Provide to Administrative Agent, promptly upon reasonable request by Administrative Agent, such reports, statements, lists of property, accounts, budgets, forecasts and other similar information concerning the Project and, to the extent reasonably available and reasonable in light of their role in the Project, such reports and information as are reasonably required by the Independent Consultants. Permit the Independent Engineer to, at least once each calendar month, visit the Site and provide a monthly report of the status of construction based on such visit at least each calendar month prior to Substantial Completion.

(c) Deliver to Administrative Agent and the Lenders all such information (including the name and address of each Borrower Entity) requested by Administrative Agent and the Lenders that is necessary for Administrative Agent and the Lenders to identify such Borrower Entity in accordance with the requirements of the Patriot Act (including the “know your customer” and similar regulations thereunder).

5.6 Additional Permits and Additional Project Documents . Deliver or otherwise make available to Administrative Agent promptly, but in no event later than thirty (30) days after the receipt thereof by Borrower, copies of (a) all material Applicable Permits or Material Project Documents obtained or entered into by Borrower after the Closing Date, and (b) any material amendment, supplement or other modification to any material Applicable Permit received by Borrower after the Closing Date. With respect to any Material Project Document or any other Additional Project Document entered into by Borrower after the Closing Date that is reasonably deemed by Administrative Agent (after consultation with the Independent Engineer) material to Borrower, use commercially reasonable efforts to cause the counterparty thereto to execute and deliver to Administrative Agent a consent to collateral assignment in substantially the form of Exhibit D-2 with such changes thereto, or in such other form, as shall be agreed by such counterparty, and which shall be in form and substance reasonably satisfactory to Administrative Agent and which may, in Administrative Agent’s reasonable discretion, be executed and delivered after the entry into such Material Project Document or Additional Project Document.

5.7 Notice to Power Purchaser and Payment of Additional Performance Security . Borrower shall (a) provide to the Power Purchaser the notice referred to in the first paragraph of Section 20.5.1 of the Power Purchase Agreement on or prior to September 20, 2016 and (b) timely pay, or cause to be paid, the amounts due pursuant to Section 20.5 of the Power Purchase Agreement in connection with clause (a) above .

5.8 Existence, Conduct of Business, Properties . Except as otherwise expressly permitted under this Agreement, maintain and preserve its existence as a North Carolina limited liability company and all material rights, privileges and franchises necessary or desirable in the normal conduct of its business.

5.9 Obligations . Pay all its obligations, howsoever arising, as and when due and payable, including, subject to the provisions of Section 5.17 , Taxes and Tax claims, except (b) such payment obligations as may not yet be due and payable, as may be contested in good faith or as to which a bona fide dispute may exist, provided that (i) Administrative Agent is satisfied in its reasonable discretion that non-payment of such obligation pending the resolution of such contest or dispute would not reasonably be expected to result in a Material Adverse Effect or (ii) provision is made to the satisfaction of Administrative Agent in its reasonable discretion for the posting of security for or the bonding of such obligation or the prompt payment thereof in the event that such obligation is payable, and (b) each Borrower’s trade payables which shall be paid in the ordinary course of business.

5.10 Spare Parts Inventory . Maintain, or cause the O&M Contractor to maintain, a spare parts inventory sufficient for the Project .

5.11 Books and Records; Inspections . Maintain adequate books, accounts and records (including project, financial and accounting records) with respect to itself and the Project and prepare all financial statements required hereunder in accordance with GAAP and in compliance with the regulations of any Governmental Authority having jurisdiction thereof, and permit employees or agents of Administrative Agent and the Lenders at any reasonable times during normal business hours and upon reasonable prior notice to inspect all of its properties, including the Modules and the Site, to examine or audit all of its books, accounts and records and make copies and memoranda thereof and, with respect to the Project, together with the Independent Engineer, to witness any start-up tests and commissioning of the Project; provided that (a) other than during the continuance of an Event of Default, such inspections by Administrative Agent and the Lenders shall be at the expense of Administrative Agent and Lenders and a Lender desiring to conduct an inspection in excess of one inspection per ninety (90) day period shall, based on facts and circumstances then existing, have reasonably determined that it is reasonably necessary to conduct such inspection at such time; and (b) any employees or agents of Administrative Agent and the Lenders wishing to so inspect the foregoing properties shall agree to comply with all reasonable applicable safety and visitor rules provided to such Person in writing and in advance of such inspection.

5.12 Energy Regulation . To the extent the Project is operational, take or cause to be taken all necessary or appropriate actions to (a) maintain the QF status of the Project and comply with the FERC’s regulations applicable to QFs with respect to the Project for so long as the Project meets the criteria of a QF, as set forth in 18 C.F.R. § 292.204, (b) maintain its EWG status and comply with the FERC’s regulations applicable to EWGs, (c) after its MBR Authority is effective, maintain its MBR Authority and be in compliance with its MBR Authority and all regulations of FERC related to or arising out of its MBR Authority, and (d) comply with any FERC regulation otherwise applicable to Borrower.

5.13 Operation of Project .

(a) As soon as applicable, (i) keep and operate the Project in good operating condition consistent with Prudent Utility Practices, all Applicable Permits and all Legal Requirements and all applicable requirements of the Operative Documents, and make or cause to be made all repairs (structural and non-structural, extraordinary or ordinary) necessary to keep and operate the Project in such condition and (ii) consider and implement, from time to time, reasonable recommendations of the Independent Engineer in connection with the operation and maintenance of the Project.

(b) Subject to the Holdings Operating Agreement, replace or consent to the replacement of the O&M Contractor, to the extent provided under the O&M Agreement, if the O&M Contractor is not providing services to the Project in accordance in all material respects with the provisions hereof or the O&M Agreement, upon receipt of notice from Administrative Agent to the effect that, in the reasonable opinion of the Required Lenders and the Independent Engineer after consultation with Borrower, the O&M Contractor has failed to perform any material obligations set forth herein which are or may be performed on Borrower’s behalf by the O&M Contractor or has failed to perform any material obligations under the O&M Agreement.

5.14 Preservation of Rights; Further Assurances .

(a) Preserve, protect and defend its rights under each Material Project Document, including, if appropriate, prosecution of suit to enforce any such right thereunder and enforcement of any claims with respect thereto.

(b) From time to time, as reasonably requested by Administrative Agent, execute, acknowledge, record, register, deliver or file all such notices, statements, instruments and other documents (including any financing statement, continuation statement, certificate of title or estoppel certificate) relating to the Loans and other Obligations, and stating the interest and charges then due (to the extent necessary or appropriate) and any known defaults, and take such other steps as may be necessary or advisable to render fully valid and enforceable under all applicable laws the rights, Liens and priorities of Administrative Agent, Collateral Agent and the Lenders with respect to all Collateral and other security from time to time furnished under this Agreement and the other Financing Documents or intended to be so furnished, in each case in such form and at such times as shall be reasonably satisfactory to Administrative Agent, and pay all reasonable fees and expenses (including reasonable attorneys’ fees) incident to compliance with this Section.

(c) If Borrower shall, at any time during the Loan Period, acquire any real property or leasehold, subleasehold, easement or other interest in real property not covered by the Deed of Trust, promptly upon such acquisition, Borrower shall (i) execute, deliver and record a supplement to the Deed of Trust, reasonably satisfactory in form and substance to Administrative Agent, subjecting such real property or leasehold, subleasehold, easement or other interest in real property to the Lien and security interest created by such Deed of Trust and (ii) execute, deliver and otherwise provide such documents, instruments, agreements, opinions and certificates with respect to such real property, leasehold, subleasehold, easement or other interest in real property that Administrative Agent shall reasonably request.

(d) Borrower shall deliver or cause to be delivered to Administrative Agent and Collateral Agent such other instruments, agreements, certificates, opinions and documents (including UCC Financing Statements and fixture filings and landlord waivers) as Administrative Agent or Collateral Agent may reasonably request to perfect and maintain the Liens granted, or purported to be granted, to Collateral Agent by the Collateral Documents prior (subject only to Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the Liens granted by the Collateral Documents) to the Liens or other interests of any Person other than Collateral Agent. Borrower shall fully cooperate with Administrative Agent and Collateral Agent and perform all additional acts reasonably requested by Administrative Agent or Collateral Agent to effect the purposes of the foregoing.

5.15 Enforcement . Diligently pursue and enforce all of Borrower’s rights and remedies under the EPC Agreement, the Power Purchase Agreement, the Interconnection Agreement and any other material contracts or agreements related to the construction of the Project, and ensure that the Project is constructed in all material respects in accordance with all such contracts and agreements, to the extent applicable.

5.16 Construction . Make or cause to be made all contracts, and do or cause to be done all things necessary, for the acquisition, construction, expansion, improvement, equipping and Substantial Completion, with or without advertising for bids, and cause the Project to be constructed, expanded, improved and equipped to achieve Substantial Completion and Final Completion substantially in accordance in all material respects with the Plans and Specifications and the Project Documents and the Project Budget and Schedule and without exceeding the disbursements as contemplated by the Project Budget and Schedule.

5.17 Taxes, Other Government Charges and Utility Charges . Pay, or cause to be paid, as and when due and prior to delinquency, all Taxes, assessments, workers’ compensation premiums, unemployment compensation contributions and governmental charges of any kind that may at any time be lawfully assessed or levied against or with respect to Borrower or the Project (or portion thereof), all utility and other charges incurred in the construction, operation, maintenance, use, occupancy and upkeep of the Project, and all assessments and charges lawfully made by any Governmental Authority for public improvements that may be secured by a Lien on the properties of Borrower or the Project, other than, in each case, such taxes, assessments, workers’ compensation premiums, unemployment compensation contributions and other charges being contested in good faith, including appeals, so long as (a) reserves reasonably in accordance with GAAP have been established, (b) enforcement of the contested Tax, assessment, workers’ compensation premiums, unemployment compensation contributions or other charge is effectively stayed for the entire duration of such contest, and (c) any Tax, assessment, workers’ compensation premium, unemployment compensation contribution or other charge determined to be due, together with any interest or penalties thereon, is paid when due after resolution of such contest.

5.18 Compliance With Laws, Instruments, Etc . At its expense, within such time as may be required by Legal Requirements: (a) comply with all Legal Requirements, whether or not compliance therewith shall require structural changes in the Project or any part thereof or require major changes in operational practices or interfere with the use and enjoyment of the Project or any part thereof, except for such noncompliance which would not reasonably be expected to have a Material Adverse Effect, except that Borrower may, at its expense, contest by appropriate proceedings conducted in good faith the validity or application of any such Legal Requirements so long as (i) none of Administrative Agent, the Lenders or Borrower would be subject to any criminal liability for failure to comply therewith, and (ii) all proceedings to enforce such Legal Requirements against Administrative Agent, the Lenders, Borrower or the Project, or any part of any of them, shall have been duly and effectively stayed during the entire pendency of such contest; (b) procure, maintain and comply with all Applicable Permits and Applicable Approvals required for any use of the Project, or any part thereof, then being made or contemplated by the Operative Documents, except for such noncompliance or such failure to so procure or maintain which would not reasonably be expected to have a Material Adverse Effect; and (c) use commercially reasonable efforts to comply with the material, commercially reasonable mitigation measures set forth in the Environmental Reports .

5.19 Maintenance of Insurance . Without cost to the Lenders, maintain in effect at all times the types of insurance required pursuant to the Insurance Requirements set forth in Exhibit I , including the maintenance of flood insurance, in the amount and on the terms and conditions specified therein with insurance companies rated “A-” or better, with a minimum size rating of “X” by Best’s Insurance Guide and Key Ratings (or an equivalent rating by another nationally recognized insurance rating agency of similar standing if Best’s Insurance Guide and Key Ratings shall no longer be published), or “A” or better by Standard & Poor’s Corporation, and, unless the Discharge Date occurs on or before the anniversary of the Closing Date, certified by Borrower as in full force and effect on each such anniversary and confirmed in a certificate by Borrower’s insurance broker. Obtain flood insurance in such total amount as Administrative Agent may from time to time reasonably require, if at any time the area in which any improvements located on the Site are designated a “flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), and otherwise comply with the Flood Laws . All such insurance shall (a) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least thirty (30) days (or ten (10) days for nonpayment of premium) in the case of property or liability insurance and forty-five (45) days in the case flood insurance, after receipt by Administrative Agent of written notice thereof, but if such notice is not commercially available, Borrower agrees to provide such notice, (b) name Administrative Agent or Collateral Agent as mortgagee (in the case of property insurance and flood insurance) or additional insured (in the case of liability insurance) or lender’s loss payee (in the case of property insurance and flood insurance), as applicable, and (c) be reasonably satisfactory in all other respects to Administrative Agent.

5.20 Warranty of Title . Maintain (a) a legal and valid interest in and to the tenants-in-common, leasehold, subleasehold or easement estate (as the case may be) to the Site pursuant to the Real Property Documents, subject only to Permitted Encumbrances, and (b) good and valid title to, or lease interests in, all of its other properties and assets, other than properties and assets disposed of in the ordinary course of developing and operating the Project or in accordance with Section 6 . 4 .

5.21 Event of Eminent Domain . If an Event of Eminent Domain shall be threatened in writing or occur, (a) diligently pursue all its rights to compensation against the relevant Governmental Authority in respect of such Event of Eminent Domain, (b) without the written consent of Administrative Agent and the Required Lenders, which consent shall not be unreasonably withheld, conditioned or delayed, not compromise or settle any claim against such Governmental Authority and (c) deliver from time to time to Administrative Agent all documents and instruments reasonably requested by Administrative Agent to permit Administrative Agent to participate in any proceedings resulting from an Event of Eminent Domain with respect to any Collateral, and Borrower consents to such participation by Administrative Agent .

5.22 Indemnification .

(a) Without duplication of Borrower’s obligations under Sections 2.5(d) , 2.6(b) , 2.6(c) and 2.6(d) (and excluding any items or events specifically excluded from Borrower’s obligations thereunder), indemnify, defend and hold harmless Administrative Agent, Collateral Agent, Depositary and each Lender and, in their capacities as such, their respective officers, directors, shareholders, controlling persons, employees and agents (collectively, the “ Indemnitees ” and each individually an “ Indemnitee ”) from and against and reimburse the Indemnitees for:

(i) any and all claims, obligations, liabilities, losses, damages, injuries (to person, property or natural resources), penalties, stamp or other similar taxes, actions, suits, judgments, costs and expenses (including reasonable attorney’s fees of a single counsel, plus a single local counsel if required, and additional counsel solely to the extent the Indemnitees have inconsistent or conflicting defenses or the circumstances giving rise to such indemnification would create an ethical conflict for such single counsel) of whatever kind or nature, including strict liability claims, whether or not well founded, meritorious or unmeritorious, demanded, asserted or claimed against any Indemnitee (collectively, “ Claims ”) in any way relating to, or arising out of, or in connection with, this Agreement, the other Operative Documents or the Project; and

(ii) any and all Environmental Claims, including Claims arising in connection with the Release or presence of any Hazardous Substances at the Project, whether foreseeable or unforeseeable, including all costs of removal and disposal of such Hazardous Substances, all reasonable costs required by Governmental Authorities or under any Environmental Law incurred in (B) determining whether the Project is in compliance and (A) causing the Project to be in compliance with all applicable Environmental Laws and Applicable Permits and all reasonable costs associated with Environmental Claims for damages to persons or property and reasonable attorneys’ and consultants’ fees and court costs.

(b) The foregoing indemnities in this Section 5.22 shall not apply with respect to (i) an Indemnitee to the extent arising solely as a result of the gross negligence or willful misconduct of any Indemnitee as determined by a final non-appealable judgment of a court of competent jurisdiction, (ii) the material breach of any Financing Document by an Indemnitee, as determined by a final non-appealable judgment of a court of competent jurisdiction or (iii) any Claims by any Indemnitee against any other Indemnitee.

(c) The provisions of this Section 5.22 shall survive foreclosure of the Collateral Documents and satisfaction or discharge of the Obligations, and shall be in addition to any other rights and remedies of Administrative Agent and the Lenders.

(d) In case any action, suit or proceeding shall be brought against any Indemnitee for which such Indemnitee is entitled to indemnity under this Section 5.22 , such Indemnitee shall notify Borrower of the commencement thereof, and Borrower shall be entitled, at its expense, to participate in the defense of such action, suit or proceeding, and, to the extent that Borrower desires to assume and control the defense thereof, it may act only through counsel reasonably acceptable to such Indemnitee; provided that any Indemnitee’s failure to so notify Borrower shall not relieve Borrower of its obligation under this Section 5.22(d) , except to the extent that such failure has an adverse effect on Borrower. Such Indemnitee shall be entitled, at its expense, to participate in any action, suit or proceeding the defense of which has been assumed by Borrower under this Section 5.22(d) . Notwithstanding the foregoing, Borrower shall not be entitled to assume and control the defense of any such action, suit or proceeding if and to the extent that, in the reasonable opinion of such Indemnitee and its counsel, such action, suit or proceeding involves the potential imposition of criminal liability upon such Indemnitee or a potential or actual conflict of interest between such Indemnitee and Borrower and, in such event (other than with respect to disputes between such Indemnitee and another Indemnitee) Borrower shall pay the reasonable expenses of such Indemnitee in such defense.

(e) Borrower shall report to the applicable Indemnitee on the status of any action, suit or proceeding the defense of which has been assumed by Borrower under Section 5.22(d) as developments shall occur and at least within sixty (60) days after the date of any previous report. Borrower shall deliver to such Indemnitee a copy of each document filed or served on any party in such action, suit or proceeding, and each material document which Borrower possesses relating to such action, suit or proceeding.

(f) Notwithstanding Borrower’s rights hereunder to control certain actions, suits or proceedings, unless Borrower has provided to an Indemnitee against which any Claim has been made such security as is adequate, in such Indemnitee’s reasonable judgment, to cover any potential unfavorable determination of such action, suit or proceeding, such Indemnitee shall be entitled to compromise or settle such Claim if such Indemnitee determines in its reasonable discretion that failure to compromise or settle such Claim would reasonably be expected to have a material adverse effect on such Indemnitee, the Project, any Collateral or such Indemnitee’s interest in the Project or Collateral. Any such compromise or settlement shall be binding upon Borrower for purposes of this Section 5.22 .

(g) Upon payment of any Claim by Borrower with respect to any Indemnitee pursuant to this Section 5.22 , Borrower, without any further action, shall be subrogated to any and all claims that such Indemnitee may have relating thereto, and such Indemnitee shall cooperate with Borrower and give such further assurances as are necessary or advisable to enable Borrower vigorously to pursue such claims.

(h) Any amounts payable by Borrower pursuant to this Section 5.22 shall be paid on or before the date such amounts are due, and if not paid by the due date therefor shall bear interest at the Default Rate from the date due until the date paid.

5.23 Reserved .

5.24 Reserved .

5.25 Equator Principles . Comply in all material respects with the Applicable Equator Principles for Category C projects .

5.26 Compliance with Terms of Leaseholds . Make all payments and otherwise perform in all material respects all covenants and obligations to be made or performed by or on behalf of Borrower in respect of all the Real Property Documents, keep Borrower’s rights under the Real Property Documents in full force and effect, prevent any lapse or termination of any Lease and prevent any Material Adverse Effect resulting from a lapse or termination of the Real Property Documents other than the Leases, enforce against the relevant Site Owner each material covenant or obligation of the Real Property Document to which it is a party in accordance with its terms, and prevent any rights to renew any Lease from being forfeited or cancelled .

5.27 FERC Filings . Promptly deliver to Administrative Agent copies of any filings with, or approvals, rejections, decisions or any other material notice from, the FERC with respect to the QF or exempt wholesale generator status of the Project and any MBR Authority granted to the Project .

5.28 Additional Obligations .

(a) Give to Collateral Agent at least ten (10) Business Days’ prior written notice of any change in: (i) the location of such Borrower Entity’s place of business or its chief executive office if it has more than one place of business; (ii) such Borrower Entity’s name, business structure, mailing address, federal taxpayer identification number or organizational identification number; and (iii) the location of any of the Mortgaged Property. Unless otherwise approved by Collateral Agent in writing, cause all Mortgaged Property that consists of personal property to be located at the Site or at Borrower’s principal place of business or chief executive office if Borrower has more than one place of business.

(b) Notify, and cause Holdings to notify, Collateral Agent promptly in writing of the occurrence of any default by the landlord under any Real Property Document to which such Borrower Entity is a party.

(c) Notify Collateral Agent promptly in writing of (i) any request, by any party to any Real Property Document for arbitration or appraisal relating to such Real Property Document, (ii) the institution of any legal proceeding involving obligations under any such Real Property Document, and promptly deliver to Collateral Agent a copy of all determinations and decisions in any such arbitration, appraisal or legal proceeding. Collateral Agent shall have the right, following written notice to Borrower, to participate in any such legal proceeding in association with Borrower or on its own behalf as an interested party.

5.29 Separateness Provisions .

(a) Maintain separate bank accounts and separate books of account from each of its Affiliates, and not commingle its funds with those of its Affiliates.

(b) Conduct its business solely in its own name in a manner not misleading to other Persons as to its identity, and correct any known misunderstanding regarding its separate identity. Without limiting the generality of the foregoing, make all oral and written communications (if any), including letters, invoices, purchase orders, contracts, statements and applications, related to its business solely in its name.

(c) Obtain proper authorization from members, directors and managers if and to the extent required by its limited liability company agreement for all of its limited liability company actions.

(d) Comply in all material respects with the terms of its Operating Agreement and observe all formalities of a limited liability company.

5.30 Compliance with Anti-Money Laundering Laws and OFAC Laws .

(a) Comply at all times with the requirements of all applicable Anti-Money Laundering Laws.

(b) Provide Administrative Agent (on behalf of the Lenders) with any information regarding each Borrower Entity and Class B Member as necessary for the Lenders to comply with all applicable Anti-Money Laundering Laws.

(d) If Borrower obtains actual knowledge or receives any written notice that Sponsor or any of its subsidiaries is named on the OFAC SDN List (such occurrence, an “ OFAC Violation ”), (i) give written notice promptly to Administrative Agent of such OFAC Violation and (ii) comply with all applicable laws with respect to such OFAC Violation (regardless of whether the party included on the OFAC SDN List is located within the jurisdiction of the United States of America), including the OFAC Laws, and Borrower hereby authorizes and consents to Administrative Agent taking any and all steps Administrative Agent deems necessary, in its sole discretion, to comply with all applicable laws with respect to any such OFAC Violation, including the requirements of the OFAC Laws (including the “freezing” or “blocking” of assets and reporting such action to OFAC).

(e) Upon Administrative Agent’s request from time to time, deliver a certification confirming compliance with the covenants set forth in this Section 5.30 .

5.31 Reserved .

5.32 Reserved .

5.33 Warranty Assignments . Provide to Administrative Agent evidence, in form and substance reasonably satisfactory to Administrative Agent, that the applicable Warranty Providers have consented to the assignment of all Warranty Agreements (other than in respect of the modules) to the Borrower under the EPC Agreement.

5.34 Income Tax . Remain a “disregarded entity” for income tax purposes.

ARTICLE 6
NEGATIVE COVENANTS OF BORROWER

Borrower covenants and agrees that, so long as this Agreement is in effect, Borrower will not, without the prior written consent of the Required Lenders or, if so specified, the Lenders:

6.1 Contingent Liabilities . Except as provided in this Agreement and the other Operative Documents, become liable as a surety, guarantor, accommodation endorser or otherwise, for or upon the obligation of any other Person or otherwise create, incur, assume or suffer to exist any contingent obligation exceeding in the aggregate Fifty Thousand Dollars ($50,000); provided that this Section 6.1 shall not be deemed to prohibit, in each solely with respect to Borrower (a) the acquisition of goods, supplies or merchandise in the normal course of operating the Project on normal trade credit, (b) the endorsement of negotiable instruments received in the normal course of operating the Project, (c) contingent liabilities required under any Applicable Permit or any Operative Document, (d) the incurrence of contingent obligations under the Power Purchase Agreement, or (e) contingent indemnification obligations under any contract or agreement governing or otherwise relating to any deposit accounts permitted under Section 6.24 .

6.2 Limitations on Liens . Create, assume or suffer to exist any Lien on any of the Collateral or the Project which secures a charge or obligation on the Project or on any of the Collateral, real or personal, whether now owned or hereafter acquired, except Permitted Liens.

6.3 Indebtedness . Incur, create, assume or permit to exist any Debt except (a)the Loans and the other Obligations, (b) trade or other similar indebtedness incurred in the ordinary course of constructing, developing and operating the Project, and not more than ninety (90) days past due, (c) up to an aggregate of Fifty Thousand Dollars ($50,000) of Debt at any time outstanding incurred in the ordinary course of operating the Project associated with purchase money Permitted Liens, (d) Debt incurred pursuant to any Project Document and (e) contingent liabilities, to the extent otherwise constituting Debt, permitted pursuant to Section 6.1 of this Agreement.

6.4 Sale or Lease of Assets . Sell, lease, assign, transfer or otherwise dispose of assets, whether now owned or hereafter acquired, except (a) in the ordinary course of operating the Project as contemplated by the Operative Documents, (b) obsolete, worn out, surplus or replaced personal property not used or useful in the development of the Project, and (c) other assets in an aggregate value not to exceed Fifty Thousand Dollars ($50,000) in any calendar year at fair market value.

6.5 Changes . Change the nature of its business, or expand its business beyond the business contemplated in the Operative Documents.

6.6 Distributions . Directly or indirectly make or declare (a) any Restricted Payments, or (b) any payments in respect of any management fees to any of Borrower’s Affiliates.

6.7 Investments . Make or permit to remain outstanding any advances, loans or extensions of credit to, or purchase or own any stock, bonds, notes, debentures or other securities of, any Person, except, in each case under this Section 6.7 , extensions of credit in the nature of accounts receivable arising from the grant of trade credit in the ordinary course of business made pursuant to the Material Project Documents.

6.8 Transactions With Affiliates . Other than as provided for in the Operative Documents, enter into, directly or indirectly, any transaction or series of transactions with or for the benefit of an Affiliate of Borrower without the prior written consent of the Required Lenders.

6.9 Regulations . Apply, d irectly or indirectly, any part of the proceeds of any Loan to the purchasing or carrying of any margin stock within the meaning of Regulation T, U or X of the Federal Reserve Board, or any regulations, interpretations or rulings thereunder.

6.10 Loan Proceeds . Use, pay, transfer, distribute or dispose of any Loans in any manner or for any purposes except as provided in Section 5 . 1 or elsewhere in this Agreement or in Article 4 of the Depositary Agreement .

6.11 Partnerships . Execute a binding agreement to become a general or limited partner in any partnership, or a joint venturer in any joint venture or a member in any limited liability company, or acquire, create and hold stock or other equity interests in any Person or form or acquire any subsidiaries.

6.12 Dissolution . (a) Liquidate, wind-up or dissolve, (b) sell or lease or otherwise transfer or dispose of all or any substantial part of its property, assets or business, (c) combine, merge or consolidate with or into any other entity, or (d) change its legal form .

6.13 Additional Project Documents . Enter into or become a party to any Additional Project Document, except (a) with the prior written consent of Administrative Agent and the Required Lenders, (b) in the name of Borrower, and (c) upon delivery to Administrative Agent of a consent to collateral assignment from the counterparty to such Additional Project Document, to the extent required pursuant to Section 5.6 .

6.14 Amendments; Change Orders; Completion .

(a) Cause, consent to or permit any termination, amendment, modification, variance or waiver of timely compliance with any terms or conditions of (i) without the consent of Administrative Agent, the Borrower Operating Agreement, (ii) without the consent of Administrative Agent and the Required Lenders, any Material Project Document (except for change orders permitted pursuant to Section 6.14(b) ) or any Applicable Permit, or (iii) without the consent of Administrative Agent, any Project Documents which are not Material Project Documents, unless, in each case under this clause (iii) , such termination, amendment, modification, variance or waiver is in the best interest of the Project. Notwithstanding the foregoing, Borrower may, without the consent of Administrative Agent and the Lenders, amend or modify any term of the Borrower Operating Agreement or any Project Document or any Applicable Permit to correct any printing, stenographic or clerical errors that are inconsistent with the terms hereof or the transactions contemplated herein.

(b) Unless compliance herewith is waived in writing by Administrative Agent, direct or consent to any change order under the EPC Agreement or O&M Agreement if such change order:

(i) may permit or result in any material adverse modification of, or materially impair the enforceability of, any warranty under the EPC Agreement, any subcontract or the O&M Agreement;

(ii) is not permitted by, or is otherwise inconsistent with, any Material Project Document or would materially diminish any obligation of any Major Project Participant or materially increase any obligation of Borrower thereunder;

(iii) may (A) permit the revocation or material modification or suspension of any material Applicable Permit, or (B) jeopardize the QF or exempt wholesale generator status of the Project; or

(iv) would reasonably be expected to cause the Project not to comply with, or to lessen the Project’s ability to comply with, Legal Requirements in any manner that would reasonably be expected to result in a Material Adverse Effect.

6.15 Compliance with Anti-Money Laundering Laws and OFAC Laws .

(a) Become a Person described or designated in the OFAC SDN List of the Office of Foreign Assets Control or in Section 1 of the Terrorism Order.

(b) Engage in any dealings or transactions with any Person described or designated in the OFAC SDN List or in Section 1 of the Terrorism Order.

6.16 Name and Location; Fiscal Year .

(a) Change its fiscal year without prior written notice to Administrative Agent.

(b) Change its jurisdiction of organization, the location of its chief executive office, its principal place of business or its federal taxpayer identification number, in each case, in violation of Section 5.28(a) .

6.17 Use of Project Site . (a) Use or permit to be used the Site for any purpose other than for the development and construction of the Project, and operation and maintenance of the Project, as contemplated by the Operative Documents, without the prior written consent of Administrative Agent or (b) locate any portion of the Project on a site other than as permitted by the Power Purchase Agreement and the Interconnection Agreement.

6.18 Assignment . Assign its rights under any of the Project Documents to any Person, or consent to the assignment by any Major Project Participant or any Affiliate of Borrower of such Person’s obligations under any Material Project Document to which it is a party .

6.19 Abandonment of Project . At any time willfully and voluntarily abandon and suspend the operation of the Project for a period of more than thirty (30) days for any reason other than force majeure; provided that none of (a) scheduled maintenance of the Project, (b) repairs to the Project, whether or not scheduled, or (c) a forced or scheduled outage of the Project shall constitute abandonment so long as Borrower is diligently attempting to end such suspension .

6.20 Hazardous Substances . Release into the environment any Hazardous Substances in material violation of, or in a manner that could result in material liability under, any Environmental Laws or Applicable Permits or allow any Hazardous Substance to impact or be present on, in, under or above the Site in material violation of, or in a manner that could result in material liability under, any Environmental Laws by Borrower in a manner that could reasonably be expected to have a Material Adverse Effect .

6.21 ERISA . Establish, maintain, contribute or become obligated to contribute to any ERISA Plan, or contribute or become obligated to contribute to any ERISA Plan sponsored by any member of the Controlled Group.

6.22 Regulation of Parties . Take or cause to be taken any actions that could reasonably be expected to result in Administrative Agent, the Lenders, any other Secured Party or any Affiliate (as that term is defined in Section 1262(1) of PUHCA, 42 U.S.C. §16451(1)) of any of them, solely as a result of Borrower’s actions relating to the ownership, leasing or operation of the Project, the sale of electricity therefrom or the entering into of any Operative Document or any transaction contemplated hereby or thereby, becoming (a) subject to regulation as a “public utility” under the FPA or (b) subject to, or not exempt from, regulation as a “holding company” under PUHCA, each except as provided in Section 4 . 27(b) of this Agreement .

6.23 Employees . Hire or become the employer of any employees; or maintain or be a participating employer in any Plan; or enter into any indemnity agreement or similar arrangement with, any ERISA Affiliate in connection with, any Plan maintained at any time by such ERISA Affiliate or in connection with any Plan to which any ERISA Affiliate may at any time contribute, except as may be required by ERISA or the Code; or assume any liability or obligation with respect to any ERISA Affiliate in connection with any Plan maintained at any time by such ERISA Affiliate or in connection with any Plan to which any ERISA Affiliate may at any time contribute, except as may be required by ERISA or the Code.

6.24 Accounts . Maintain, establish or use any deposit accounts or securities accounts, other than the Accounts and any other accounts referred to in Schedule 2.

6.25 Subsidiaries . Have any subsidiaries.

6.26 ITC Matters . Agree to any arrangement that would result in any interest in Holdings or Borrower or the Project being owned or used by a Disqualified Person, other than any transfer or other arrangement made by the Class A Member pursuant to the terms and conditions of the Tax Equity Documents.

6.27 Recapture . Take any action that would cause or permit any transfer (other than any transfer or other arrangement made by the Class A Member pursuant to the terms and conditions of the Tax Equity Documents) of any direct or indirect ownership interests in any Borrower Entity that would cause the ITC to be subject to recapture pursuant to Section 50 of the Code (or other disallowance claim), including the issuance, sale, assignment or transfer of any direct or indirect ownership interest in any Borrower Entity to any Disqualified Person .

6.28 Federal Tax Benefit Matters . Agree to any arrangement that would result in any loss, reduction, disallowance or deferral of the Federal Tax Benefits that could reasonably be expected to result in the sum of the expected capital contributions by the Class A Member on each Tax Equity Funding Date being less than the Tax Equity Funding Amount .

ARTICLE 7
APPLICATION OF FUNDS

7.1 Construction Account . On or prior to the Closing Date, Borrower and Administrative Agent shall establish with Depositary an account entitled “Innovative Solar 31, LLC – Construction Account” (the “ Construction Account ”). Any deposit, transfer or application of funds in the Construction Account shall be in accordance with Sections 4.1 and 4.2 of the Depositary Agreement.

7.2 Loss Proceeds Account . On or prior to the Closing Date, Borrower and Administrative Agent shall establish with Depositary an account entitled “Innovative Solar 31, LLC – Loss Proceeds Account” (the “ Loss Proceeds Account ”). Any deposit, transfer or application of funds in the Loss Proceeds Account shall be in accordance with Section 4.4 of the Depositary Agreement.

7.3 Reserved .

7.4 Equity Capital Contribution Account . On or prior to the Closing Date, Holdings and Administrative Agent shall establish with Depositary an account entitled “IS-31 Holdings, LLC – Equity Capital Contribution Account” (the “ Equity Capital Contribution Account ”). Any deposit, transfer or application of funds in the Equity Capital Contribution Account shall be in accordance with Section 4.6 of the Depositary Agreement.

7.5 Application of Insurance Proceeds . Any deposit, transfer or application of Insurance Proceeds received by Borrower, shall be in accordance with Section 4.4 of the Depositary Agreement.

7.6 Application of Eminent Domain Proceeds . Any deposits, transfer or application of Eminent Domain Proceeds (as defined in the Depositary Agreement) shall be in accordance with Section 4.5 of the Depositary Agreement.

7.7 Security Interest in Proceeds and Accounts . Borrower and Holdings pledged, assigned and transferred, or will pledge, assign and transfer, to Administrative Agent or Collateral Agent (as the case may be) and have granted, or will grant, to Administrative Agent or Collateral Agent (as the case may be) a security interest in all of Borrower’s and Holdings’ right, title and interest in and to, in each case, as and when required pursuant to the terms hereof, (a) pursuant to the Collateral Documents, all Insurance Proceeds (“ Proceeds ”), Accounts in Article 7 , and the contents of such Accounts, and (b) pursuant to the Depositary Agreement, the Accounts and the contents thereof, in each case as security for the payment and performance of the Obligations. Neither Borrower nor Holdings shall have any rights or powers to direct or control activities with respect to any Account except to have funds therein invested or applied in accordance with this Agreement, the Depositary Agreement and the other Financing Documents. Upon the occurrence and during the continuation of an Event of Default, Collateral Agent shall have all rights and powers with respect to Proceeds, the Accounts and the contents of the Accounts as Collateral Agent has with respect to any other Collateral and may apply such amounts to the payment of interest, principal, fees, costs, charges or other amounts due or payable to Administrative Agent, Depositary, Collateral Agent, the Lenders or any other Secured Party with respect to the Obligations in such order as the Required Lenders may elect in their sole discretion. Neither Borrower nor Holdings shall have any rights or powers with respect to Proceeds, except as expressly provided in this Article 7 or in Article 4 of the Depositary Agreement.

7.8 Earnings on Accounts . All earnings on amounts credited to any Account maintained hereunder shall accrue to such Account. The parties hereto agree that, for tax reporting purposes, Borrower is the owner of any cash in each Account (other than the Equity Capital Contribution Account) until such cash is distributed in accordance with this Agreement, and that all interest on or other taxable income, if any, earned from the investment of such cash shall be treated for tax purposes as earned by Borrower, and Borrower shall pay any taxes thereon.

7.9 Dominion and Control . Each of the Accounts and the amounts held thereunder shall be at all times under the exclusive dominion and control of Administrative Agent or Collateral Agent, subject to the terms of the Depositary Agreement and the other Financing Documents .

7.10 Disbursement to Borrower . Upon the occurrence of the Discharge Date, Administrative Agent shall disburse or cause to be disbursed to Borrower any amounts on deposit in the Accounts (other than the Equity Capital Contribution Account). Except as otherwise provided in this Agreement, all disbursements made by Administrative Agent (or Depositary pursuant to instructions from Administrative Agent) shall be made by wire transfer of immediately available funds in accordance with written wire transfer instructions supplied by an Authorized Person on forms specified by Administrative Agent .

ARTICLE 8
EVENTS OF DEFAULT; REMEDIES

Events of Default

The occurrence of any of the following events shall constitute an event of default (individually, an “ Event of Default ”, and collectively, “ Events of Default ”) hereunder:

8.1 Failure to Make Payments . Borrower shall fail to pay or cause to be paid: (i) any principal on any Loan on or before the date that such sum is due under this Agreement; (ii) any interest or fee due and owing to Administrative Agent, Collateral Agent, Depositary or the Lenders under the Financing Documents, on or before the date that is three Business Days after the date that such interest or fee is due; (iii) any other cost, charge, expense or other sum due under this Agreement or any other Financing Document on or before the date that is ten (10) Business Days after the date that such sum is due; (iv) any amount due and owing by Borrower under the Power Purchase Agreement (other than any such amount being contested in good faith or as to which a bona fide dispute exists and provision is made to the satisfaction of Administrative Agent in its reasonable discretion for the posting of security for or the bonding of such obligation or the prompt payment thereof in the event that such obligation is payable) and such failure to pay such amount continues beyond any applicable grace or cure period provided under the Power Purchase Agreement and constitutes an event of default under the Power Purchase Agreement; or (v) any amount due and owing by Borrower under any other Material Project Document (other than any such amount being contested in good faith or as to which a bona fide dispute exists and provision is made to the satisfaction of Administrative Agent in its reasonable discretion for the posting of security for or the bonding of such obligation or the prompt payment thereof in the event that such obligation is payable) and such failure to pay such amount continues beyond any applicable grace or cure period provided under such other Material Project Document and constitutes an event of default under such other Material Project Document .

8.2 Judgments . A final judgment or judgments shall be entered against Borrower, Class B Member or Holdings (a) in the aggregate amount of One Hundred Thousand Dollars ($100,000) or more (other than (i) a judgment which is fully covered by insurance or satisfied in full or discharged within forty-five (45) days after its entry, or (ii) a judgment, the execution of which is effectively stayed within forty-five (45) days after its entry and until forty-five (45) days after the date on which such stay is terminated or expires) or (b) which would reasonably be expected to materially impair or inhibit the operation or use of the Project or Borrower’s use of the Project (or any portion thereof) for its intended purpose .

8.3 Misstatements . Any financial statement, representation, warranty or certificate (including any Notice of Borrowing, but excluding any representation, warranty, statement or certificate respecting any forward looking information or projections) made or prepared by, under the control of or on behalf of, Borrower, Class B Member, Sponsor and Holdings and furnished to Administrative Agent, Collateral Agent or any Lender pursuant to this Agreement or any other Financing Document: (a) shall contain an untrue or misleading statement of a fact as of the date made that would reasonably be expected to have a Material Adverse Effect, but no Event of Default shall occur pursuant hereto if, within forty-five (45) days after the date on which Borrower receives notice (from any source) that such untrue or misleading statement has occurred, Borrower, Class B Member, Sponsor or Holdings, as applicable, shall eliminate or otherwise cure such effect so that it would no longer reasonably be expected to have a Material Adverse Effect; or (b) shall fail to state a fact necessary to make the statements therein not misleading as of the date made and as a result thereof there would reasonably be expected to occur a Material Adverse Effect.

8.4 Bankruptcy; Insolvency . Any of the following events shall have occurred (each, a “ Bankruptcy Event ”):

(a) Any of Sponsor, any Borrower Entity, Class B Member, the Power Purchaser, the O&M Contractor, the Interconnector, the EPC Contractor, the EPC Parent or any Warranty Provider (collectively, the “ Subject Persons ” and each individually a “ Subject Person ”; provided that the Subject Persons shall not include (i) the O&M Contractor to the extent the O&M Contractor is replaced within ninety (90) days after the occurrence of any Bankruptcy Event with respect to the O&M Contractor, if the replaced O&M Contractor and any replacement of the O&M Agreement is acceptable to Administrative Agent and the Lenders or (ii) any Warranty Provider to the extent that (A) within ninety (90) days after the occurrence of any Bankruptcy Event with respect to such Warranty Provider, Borrower has procured replacement warranty coverage or insurance, in each such case, as determined by Administrative Agent to be similar to the warranty that such Warranty Provider was providing under the applicable Warranty Agreement or (B) (1) Administrative Agent has reasonably determined that such Bankruptcy Event is not (and could not reasonably be expected to be) the result of any performance or technology issue related to the equipment covered under such Warranty Agreement executed by such Warranty Provider and (2) within ninety (90) days after the occurrence of any Bankruptcy Event with respect to such Warranty Provider, the Independent Engineer has certified, in form and substance acceptable to Administrative Agent and the Lenders, that the equipment covered under such Warranty Agreement is performing, and is reasonably expected to continue performing, in accordance with the operational parameters assumed by the Independent Engineer in its report delivered hereunder) shall, with respect to itself, institute a voluntary case seeking liquidation or reorganization under the Bankruptcy Law (or any successor statute) or consent to the institution of an involuntary case thereunder against it;

(b) Any of the Subject Persons shall, with respect to itself or, in the case of Holdings, with respect to itself and Borrower, apply for, or consent to or acquiescence in, an appointment of a receiver, liquidator, sequestrator, trustee or other officer with similar powers;

(c) Any of the Subject Persons shall make an assignment for the benefit of creditors; or any of the Subject Persons shall admit in writing its inability to pay its debts generally as they become due; or

(d) An involuntary case shall be commenced seeking the liquidation or reorganization of any Subject Person under the Bankruptcy Law (or any successor statute) or any similar proceeding shall be commenced against any Subject Person under any other applicable federal, state or other applicable law, and:

(i) the petition commencing the involuntary case is not timely controverted;

(ii) the petition commencing the involuntary case is not dismissed within ninety (90) days after its filing;

(iii) an interim trustee is appointed to take possession of all or a portion of the property, or to operate all or any part of the business, of such Subject Person and such appointment is not vacated within ninety (90) days;

(iv) an order for relief shall have been issued or entered therein; or

(v) a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee or other officer having similar powers of such Subject Person, or of all or a part of its property, shall have been entered and not stayed, vacated or dismissed within forty-five (45) days.

8.5 Cross Default . Borrower shall default for a period beyond any applicable grace or cure period (i) in the payment of any principal, interest or other amount due under any agreement (other than the Financing Documents and the Project Documents) involving the borrowing of money or the advance of credit if the indebtedness evidenced thereby equals or exceeds One Hundred Thousand Dollars ($100,000) (a “ Material Debt Agreement ”) in the aggregate, or (ii) in the performance of any other obligation due under any Material Debt Agreement the effect of which default is to cause such Material Debt Agreement to become due prior to its stated maturity.

8.6 ERISA . Borrower or any member of the Controlled Group establishes, maintains, contributes to or becomes obligated to contribute to any ERISA Plan and: (a) a reportable event (as defined in Section 4043(b) of ERISA) shall have occurred with respect to such ERISA Plan and, within forty-five (45) days after the reporting of such reportable event to Administrative Agent by Borrower (or Administrative Agent otherwise obtaining knowledge of such event) and the furnishing of such information as Administrative Agent may reasonably request with respect thereto, Administrative Agent shall have notified Borrower in writing that (i) Administrative Agent has made a determination that, on the basis of such reportable event, there are reasonable grounds for the termination of such ERISA Plan by the PBGC or for the appointment by the appropriate United States District Court of a trustee to administer such ERISA Plan and (ii) as a result thereof, an Event of Default exists hereunder; or (b) a trustee shall be appointed by a United States District Court to administer such ERISA Plan; or (c) the PBGC shall institute proceedings to terminate such ERISA Plan; or (d) a complete or partial withdrawal by Borrower or any member of the Controlled Group from such ERISA Plan if such ERISA Plan is a Multiemployer Plan shall have occurred, or such Multiemployer Plan shall enter reorganization status, become insolvent, or terminate (or notify Borrower or any member of the Controlled Group of its intent to terminate) under Section 4041A of ERISA and, within forty-five (45) days after the reporting of any such occurrence to Administrative Agent by Borrower (or Administrative Agent otherwise obtaining knowledge of such event) and the furnishing of such information as Administrative Agent may reasonably request with respect thereto, Administrative Agent shall have notified Borrower in writing that Administrative Agent has made a determination that, on the basis of such occurrence, an Event of Default exists hereunder; provided that any of the events described in this Section 8.6 shall involve (A) one or more ERISA Plans that are single-employer plans (as defined in Section 4001(a)(15) of ERISA) and under which the aggregate gross amount of unfunded benefit liabilities (as defined in Section 4001(a)(16) of ERISA), including vested unfunded liabilities which arise or might arise as the result of the termination of such ERISA Plan or ERISA Plans, or (B) one or more Multiemployer Plans to which the aggregate liabilities of Borrower and all members of the Controlled Group shall, in each case, be in an amount that would reasonably be expected to have a Material Adverse Effect on the economic condition of Borrower or on the Controlled Group as a whole.

8.7 Breach of Transaction Documents .

(a) Borrower Entity and Class B Member . Any Borrower Entity or Class B Member shall be in breach of any material obligation, or a material default by such Person shall have occurred and be continuing (other than as described in Section 8.1 ), under a Material Project Document (other than the Power Purchase Agreement) or under the NES ECCA, the Tax Equity ECCA or the Holdings Operating Agreement, and such breach or default shall not be remediable or, if remediable, shall continue unremedied for a period equal to the lesser of one-half of the cure period provided under such agreement or sixty (60) days; provided that except with respect to the Power Purchase Agreement, the NES ECCA, the Tax Equity ECCA and the Holdings Operating Agreement, if (i) such breach cannot be cured within a period of less than sixty (60) days, (ii) such breach is susceptible of cure within ninety (90) days, (iii) such applicable Borrower Entity or Class B Member is proceeding with diligence and in good faith to cure such breach, (iv) the existence of such breach has not resulted in, and would not after considering the nature of the cure be reasonably expected to give rise to, a termination by any counterparty to such Material Project Document which is subject to breach or to otherwise have a Material Adverse Effect, and (v) Administrative Agent shall have received a certificate signed by a Responsible Officer of Borrower to the effect of immediately preceding clauses (i) , (ii) , (iii) and (iv) and stating what action such Borrower Entity or Class B Member is taking to cure such breach, then, so long as no Material Adverse Effect occurs on account thereof, such cure period shall be extended to such date not to exceed ninety (90) days, as shall be necessary for such Borrower Entity or Class B Member diligently to cure such breach.

(b) Third Party . A party (other than Borrower or any Warranty Provider in connection with racking equipment and transformers) shall be in breach of any obligation under, or a default shall have occurred and be continuing under, a Material Project Document (other than any Power Purchase Agreement), and such breach or default shall not be remediable or, if remediable, shall continue unremedied for a period beyond the cure period provided under such Material Project Document (unless such breach or default is waived by Borrower with the written consent of Required Lenders (such consent not to be unreasonably withheld, conditioned or delayed)) and such breach or default shall have had, or would reasonably be expected to have, a Material Adverse Effect; provided that (i) if (A) such breach cannot be cured within such period, (B) such breach is susceptible of cure within sixty (60) days, and (C) the breaching party is proceeding with diligence and in good faith to cure such breach, or (ii) if (A) such breach cannot be cured within such period, (B) such third party could reasonably be replaced within sixty (60) days and such replacement is permitted under such Material Project Document, and (C) Borrower is proceeding with diligence and in good faith to replace such third party, then, so long as no Material Adverse Effect occurs on account thereof, such cure period shall be extended to such date not to exceed sixty (60) days as shall be necessary for such third party diligently to cure such breach or for Borrower to replace such third party in accordance with such Material Project Document, as applicable.

(c) Termination . (x) Any (i) Material Project Document shall for any reason cease to be valid and binding on the Persons party thereto, as the case may be, except upon fulfillment of such party’s obligations thereunder, or any such Person pursues a right of termination under such Material Project Document, as the case may be, or (ii) material provision in any other Project Document shall for any reason cease to be valid and binding on any party thereto except upon fulfillment of such party’s obligations thereunder, and the foregoing in clause (i) or clause (ii) of this Section 8.7(c) would be reasonably expected to result in a Material Adverse Effect and (y) for thirty (30) days (1) such cessation shall continue unremedied and (2) a substitute agreement shall not have been entered into by the original parties thereto on substantially the same terms and provisions as provided in such Project Document.

(d) Power Purchase Agreement . (i) A party shall be in breach of any material obligation under, or a default shall have occurred and be continuing under, the Power Purchase Agreement and such breach or default shall not be remediable or, if remediable, shall continue unremedied (A) with respect to payment defaults, for a period equal to the grace or cure period referred to in Section 8.1(iv) , and (B) with respect to any other breach of any material covenant or obligation under the Power Purchase Agreement that shall have occurred and be continuing under the Power Purchase Agreement, for a period of thirty (30) days; or (ii) the Power Purchaser asserts that it is not obligated to purchase energy from the Project or refuses to accept energy from the Project and such assertion or refusal continues for a period of thirty (30) days or more.

8.8 Breach of Terms of Agreement .

(a) Borrower shall fail to perform or observe any of the covenants set forth in Sections 5.1 , 5.3(c) , 5.3(n) or 5.8 or in Article 6 ;

(b) Borrower shall fail to perform or observe any covenant set forth in Sections 5.19 and 5.26 and such failure shall continue unremedied for a period of seven (7) Business Days after Borrower becomes aware thereof or receives written notice thereof from Administrative Agent;

(c) Borrower shall have failed to pursue its rights and remedies under any Project Document with an Affiliate of Borrower upon a breach by the applicable Affiliate of the terms of such Project Document, and such failure shall continue unremedied for a period beyond any applicable grace or cure period under such Project Document and then for an additional period of ten (10) Business Days after Borrower receives written notice of such failure from Administrative Agent (provided that Borrower shall, in the case of any failure by any Affiliate to pay liquidated damages or warranty payments, seek from such Affiliate recovery of such liquidated damages or warranty payments from, at a minimum, the date Administrative Agent provides notice hereunder); or

(d) Any Borrower Entity shall fail to perform or observe any other covenant to be performed or observed by it hereunder or under any other Financing Document and not otherwise specifically provided for elsewhere in this Article 8 , and such failure shall continue unremedied for a period of thirty (30) days after such Borrower Entity, as applicable, becomes aware thereof or receives written notice thereof from Administrative Agent; provided that if (i) such breach cannot be cured within such period, (ii) such failure is susceptible of cure within sixty (60) days, (iii) Borrower is proceeding with diligence and in good faith to cure, or to cause the cure of, such failure, and (iv) Administrative Agent shall have received a certificate signed by a Responsible Officer of Borrower to the effect of immediately preceding clauses (i) , (ii) and (iii) and stating what action Borrower is taking to cure such failure, then, so long as no Material Adverse Effect occurs as a result of such extension, such thirty (30) day cure period shall be extended to such date not to exceed sixty (60) days as shall be necessary for Borrower diligently to cure, or to cause the cure of, such failure.

8.9 Invalidity of Financing Documents . Any provision of any Financing Document, at any time after its execution and delivery and for any reason (except in accordance with its terms or except as provided below) ceases to be in full force and effect, and such provision is not replaced to the satisfaction of the Lenders with a valid provision, the economic effect of which comes as close as possible to that of the provision that has ceased to be in full force and effect, within five (5) Business Days after Borrower has obtained actual knowledge or notice that such provision has ceased to be in full force and effect, and such replaced provision does not result in any material adverse effect on the rights and remedies of the Lenders under the Financing Documents. Notwithstanding the foregoing, it shall not be an Event of Default hereunder if any provision of a Financing Document, at any time after its execution and delivery, ceases to be in full force and effect to the extent expressly permitted under this Agreement or other relevant Financing Document.

8.10 Loss of Regulatory Certifications or Authorizations .

(a) The Project, after synchronous connection of the Project to the grid, shall fail to meet the criteria of a QF as set forth in 18 C.F.R. § 292.204; or

(b) Borrower shall fail to maintain MBR Authority at any time when the net energy delivered from the Project and those commonly-owned and affiliated solar photovoltaic generating projects located within one mile of the Project, individually or in the aggregate, exceeds 20 MWac; or

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(c) Borrower shall fail to maintain exempt wholesale generator status at any time when the net energy delivered from the Project and those commonly-owned and affiliated solar photovoltaic generating projects located within one mile of the Project, individually or in the aggregate, exceeds 30 MWac; or

(d) Borrower Entity shall become subject to, or not exempt from, any other law or regulation that would materially adversely affect the Project (or portion thereof) with respect to the generation or sale of electricity therefrom under any applicable state or federal law or regulation and the same would reasonably be expected to result in a Material Adverse Effect and shall continue for a period of sixty (60) days or, if (i) such breach cannot be cured within a period of sixty (60) days, (ii) such breach is susceptible of cure within one hundred twenty (120) days, and (iii) Borrower is proceeding with diligence and in good faith to cure such breach, then, such sixty (60) day cure period shall be extended to such date, not to exceed a total of one hundred twenty (120) days, as shall be necessary to diligently cure such breach so long as such extension of time to cure has not resulted in a Material Adverse Effect.

8.11 Repudiation of Obligations . (a) Any Borrower Entity or Class B Member shall take any action to terminate, cancel or repudiate any Transaction Document to which it is a party or any of its obligations thereunder, (b) Class A Member shall take any action to terminate, cancel or repudiate any Tax Equity Document or any of its obligations thereunder or (c) NES shall take any action to terminate, cancel or repudiate the NES ECCA or the NES Escrow Agreement or any of its obligations thereunder.

8.12 Security . Any of the Collateral Documents, once executed and delivered, shall, except in accordance with its terms or as the result solely of the acts or omissions of Administrative Agent, Collateral Agent, the Lenders or any other Secured Party (except any such omission in respect of which Borrower is expressly obligated under the Financing Documents), in any material respect fail to provide the Secured Parties the Liens intended to be created thereby or cease to be in full force and effect, or the validity thereof or the applicability thereof to the Loans, the Notes or any other Obligations purported to be secured or guaranteed thereby or any part thereof shall be disaffirmed by or on behalf of any Borrower Entity party thereto.

8.13 Loss of Applicable Permits .

(a) Borrower shall fail to obtain any Permit on or before the date that such Permit becomes an Applicable Permit and such failure would reasonably be expected to have a Material Adverse Effect; or

(b) Any Applicable Permit necessary for operation of the Project shall be materially modified, revoked, suspended or canceled by the issuing agency or other Governmental Authority having jurisdiction and, within thirty (30) days thereafter, Borrower is not able to demonstrate to the Required Lenders that such modification, revocation, suspension or cancellation of such Applicable Permit could not reasonably be expected to have a Material Adverse Effect.

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8.14 Loss of Collateral .

(a) Any substantial portion of any Collateral is seized or appropriated without fair value being paid therefor such as to allow replacement of such property or prepayment of the Obligations then outstanding and to allow Borrower or Holdings, as applicable, in Administrative Agent’s reasonable judgment, to continue satisfying its obligations hereunder and under the other Operative Documents; or

(b) Reserved;

(c) Any claim disputing any Site Owner’s fee title to, or Borrower’s leasehold or subleasehold interest in, the Real Property is asserted and Borrower’s possession of the Real Property is disturbed or otherwise materially impaired as a result of such claim, and the Title Insurer fails to indemnify Borrower against, or to pay, such claim in accordance with the applicable Title Policy.

8.15 Destruction of the Project; Default in Construction; Schedule .

(a) All of the Project or a material portion of the assets or operations of the Project is destroyed, or suffers an actual or constructive loss or material damage and thereafter the conditions specified in Sections 4.4 and 4.5 of the Depositary Agreement are not met .

(b) At any time prior to Final Completion, construction work on the Project by the EPC Contractor shall cease for a period of more than thirty (30) days for any reason (which period (i) shall be measured from the first occurrence of a work stoppage and continuing until work of a substantial nature is resumed and thereafter diligently continued, and (ii) shall not include: (A) delays caused by any event of force majeure under the EPC Agreement, (B) any scheduled intervals during which subcontractors of the EPC Contractor are not scheduled to be working, and (C) re-sequencing or re-scheduling of subcontractors, trades or construction tasks).

8.16 Holdings Operating Agreement . Notwithstanding anything to the contrary set forth herein, it shall be an Event of Default if (a) Class B Member is removed as the Managing Member and/or the Tax Matters Member under and as defined in the Holdings Operating Agreement for any reason pursuant to the terms of the Holdings Operating Agreement, or (b) the Class A Member provides notice (which notice is not rescinded or otherwise withdrawn by the Class A Member within ten (10) Business Days) to Class B Member that the Class A Member has the right to, and intends to, remove Class B Member as the Managing Member and/or the Tax Matters Member under, and pursuant to the terms and conditions of, the Holdings Operating Agreement, as a result of a breach by Class B Member of the terms and conditions of the Holdings Operating Agreement.

8.17 Change of Control . (a) Sponsor shall transfer any direct or indirect ownership interest in Holdings, other than in connection with the Tax Equity Documents or the NES ECCA, or (b) Holdings shall cease to own one hundred percent (100%) of the ownership interests in Borrower, in the case of either subsection (a) or (b) , without the prior written consent of the Lenders .

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Remedies

Upon the occurrence and during the continuation of an Event of Default, Administrative Agent may, and at the election of the Required Lenders shall, by notice to Borrower but with no requirement for further notice of default, presentment or demand for payment, protest or notice of non-payment or dishonor, or other notices or demands of any kind, all such other notices and demands being waived, exercise any or all of the following rights and remedies (or direct Collateral Agent to so exercise), in any combination or order that Administrative Agent or the Required Lenders may elect, in addition to such other rights or remedies as Administrative Agent, Collateral Agent, the Lenders and the other Secured Parties may have hereunder, under the Collateral Documents or at law or in equity:

8.18 No Further Loans . Refuse, and the Lenders shall not be obligated, to make any additional Loans or make any payments from any Account or any Proceeds or other funds held by Administrative Agent or the Depositary under the Financing Documents or on behalf of Borrower .

8.19 Cure by Administrative Agent . Without any obligation to do so, make disbursements or Loans to or on behalf of Borrower to cure any Event of Default hereunder and to cure any default and render any performance under any Project Documents as the Required Lenders in their sole discretion may consider necessary or appropriate, whether to preserve and protect the Collateral or the Lenders’ interests therein or for any other reason, and all sums so expended, together with interest on such total amount at the Default Rate (but in no event shall the rate exceed the maximum lawful rate), shall be repaid by Borrower to Administrative Agent on demand and shall be secured by the Financing Documents, notwithstanding that such expenditures may, together with amounts advanced under this Agreement, exceed the amount of Total Construction Loan Commitment or the Total ITC Bridge Loan Commitment, as applicable .

8.20 Acceleration . Declare and make all sums of outstanding principal and accrued but unpaid interest remaining under this Agreement together with all unpaid fees, costs (including Liquidation Costs), charges and other amounts due hereunder or under any other Financing Document, immediately due and payable, provided that in the event of an Event of Default occurring under Section 8 . 4 with respect to any Borrower Entity, all such amounts shall become immediately due and payable without further act of Administrative Agent or the Lenders or any other Person .

8.21 Cash Collateral . Apply or execute upon any amounts on deposit in any Account or any other moneys of Borrower on deposit with Depositary, or in the name of Administrative Agent, Collateral Agent or any Lender in the manner provided in the UCC and other relevant statutes and decisions and interpretations thereunder with respect to cash collateral.

8.22 Remedies Under Financing Documents . Exercise any and all rights and remedies available to it under any of the Financing Documents (including judicial or non-judicial foreclosure or public or private sale of any of the Collateral pursuant to the Collateral Documents and applicable law) .

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8.23 Possession of Project . Enter into possession of the Project and perform or cause to be performed any and all work and labor necessary to complete the Project substantially according to the EPC Agreement and the Plans and Specifications or to operate and maintain the Project, and all sums expended by Administrative Agent in so doing, together with interest on such total amount at the Default Rate, shall be repaid by Borrower to Administrative Agent upon demand and shall be secured by the Financing Documents, notwithstanding that such expenditures may, together with amounts advanced under this Agreement, exceed the amount of the Total Construction Loan Commitment or the Total ITC Bridge Loan Commitment .

ARTICLE 9
SCOPE OF LIABILITY

Notwithstanding any other provision of the Financing Documents (but subject to the last sentence of this Article 9), there shall be no recourse against any Sponsor, Class B Parent, Class B Member, NES or any of their respective Affiliates (except for Borrower and, to the extent set forth in the applicable Financing Documents, Holdings), or the stockholders, shareholders, members or other owners, officers, directors, managers or employees of any of them, (each, a “ Non-Recourse Party ” and collectively, the “ Non-Recourse Parties ”), for any liability to the Lenders, Administrative Agent, Collateral Agent and the other Secured Parties arising in connection with any breach or default under this Agreement and the other Financing Documents except to the extent the same is enforced against Borrower and, to the extent set forth in the applicable Financing Documents, Holdings, and the Collateral and the rents, issues, profits, proceeds and products of the Collateral, and the Lenders, Administrative Agent, Collateral Agent and the other Secured Parties shall look solely to Borrower and, to the extent set forth in the applicable Financing Documents, Holdings (but not to any Non-Recourse Party or to any distributions received by any Non-Recourse Party pursuant to the terms of this Agreement and the other Financing Documents, except as provided herein) and the Collateral and the rents, issues, profits, proceeds and products of the Collateral in enforcing rights and obligations under and in connection with the Financing Documents; provided that (a) the foregoing provisions of this Article 9 shall not constitute a waiver, release or discharge of any of the indebtedness, or of any of the terms, covenants, conditions or provisions of this Agreement, the Notes, any Collateral Document or any other Financing Document (but without personal liability to the Non-Recourse Parties except as provided herein and therein), (b) the foregoing provisions of this Article 9 shall not limit or restrict the right of Administrative Agent, Collateral Agent or the Lenders to name any Borrower Entity or any other Person as a defendant in any action or suit for a judicial foreclosure or for the exercise of any other remedy under or with respect to this Agreement, the Project, any Collateral Document or any other Financing Document, or otherwise, or for injunction or specific performance, so long as no judgment in the nature of a deficiency judgment shall be enforced against any Non-Recourse Party out of any property, assets or funds other than the Collateral and the rents, issues, profits, proceeds or products of the Collateral, and (c) the foregoing provisions of this Article 9 shall not affect or diminish or constitute a waiver, release or discharge of any specific written obligation, covenant or agreement made by any of the Non-Recourse Parties or any security granted by the Non-Recourse Parties in support of the obligations of such Persons under any guarantee or as security for the obligations of Borrower. Notwithstanding the foregoing, it is expressly understood and agreed that nothing contained in this Article 9 shall be deemed to (i) limit or restrict any right or remedy of the Lenders (or any assignee or beneficiary thereof or successor thereto) with respect to, and any Borrower Entity and all of the other Persons described above shall remain fully liable to the extent that such Person would otherwise be liable for its own actions with respect to, any fraud, willful misconduct or gross negligence, (ii) limit in any respect the enforceability against the parties thereto of any Collateral Documents or any other Operative Document in accordance with their respective terms, or (iii) release any legal consultant in its capacity as such from liability on account of any legal opinion rendered in connection with the transactions contemplated hereby.

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ARTICLE 10
ADMINISTRATIVE AGENT; COLLATERAL AGENT; AMENDMENT, SUBSTITUTION AND ASSIGNMENT

10.1 Appointment, Powers and Immunities .

(a) Each Lender hereby appoints and authorizes KeyBank to act as such Lender’s Administrative Agent hereunder and under the other Financing Documents with such powers as are expressly delegated to Administrative Agent by the terms of this Agreement and the other Financing Documents, together with such other powers as are reasonably incidental thereto. Administrative Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement or in any other Financing Document, and shall not be a trustee for, or fiduciary of, any Lender. Notwithstanding anything to the contrary contained herein, Administrative Agent shall not be required to take any action which is contrary to this Agreement or any other Financing Documents or any Legal Requirement or exposes Administrative Agent to any liability. Each of Administrative Agent, the Lenders and any of their respective Affiliates shall not be responsible to any other Lender for any recitals, statements, representations or warranties made by any Borrower Entity or any Affiliate of any Borrower Entity contained in this Agreement or any other Financing Document or in any certificate or other document referred to or provided for in, or received by Administrative Agent or any Lender under, this Agreement or any other Financing Document, for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, the Notes, any other Financing Document or any other document referred to or provided for herein or for any failure by any Borrower Entity or any Affiliate of any Borrower Entity to perform its obligations hereunder or thereunder. Administrative Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care.

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(b) Administrative Agent and its directors, officers and employees shall not be responsible for any action taken or omitted to be taken by it or them hereunder or under any other Financing Document or in connection herewith or therewith, except for its or their own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. Without limiting the generality of the foregoing, Administrative Agent: (i) may treat the payee of any Note as the holder thereof until Administrative Agent receives written notice of the assignment or transfer thereof signed by such payee and in form and substance satisfactory to Administrative Agent; (ii) may consult with legal counsel (including counsel for Borrower), independent public accountants and other experts selected by Administrative Agent with reasonable care and shall not be liable for any action taken or omitted to be taken by Administrative Agent in good faith in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender for any statements, warranties or representations made in or in connection with any Operative Document; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Operative Document on the part of any party thereto or to inspect the property (including the books and records) of any Borrower Entity or any other Person; and (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Operative Document or any other instrument or document furnished pursuant hereto or thereto. Except as otherwise provided under this Agreement, Administrative Agent shall take such action with respect to the Financing Documents as shall be directed by the Required Lenders.

(c) In furtherance of the foregoing, Administrative Agent and each Lender hereby irrevocably appoints and authorizes Collateral Agent to act as the agent of (and to hold any security interest and other Liens created by certain of the Collateral Documents for and on behalf of or as agent for) Administrative Agent, the Lenders and the other Secured Parties for purposes of acquiring, holding, perfecting and enforcing any and all Liens on certain Collateral granted by Borrower and Holdings (in each case to the extent directed by Administrative Agent) to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, Collateral Agent, in such capacity (and any co-agents, sub-agents and attorneys-in-fact appointed by Administrative Agent or Collateral Agent for purposes of holding or enforcing any Lien on any Collateral granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of Administrative Agent or Collateral Agent), shall be entitled to the benefits of all provisions of Section 5.22 , this Article 10 and Sections 12.4 , 12.5 and 12.13 (including, for avoidance of doubt, all of the rights, protections, privileges, immunities and exculpations provided for therein) to the same extent as “Administrative Agent” thereunder as if set forth in full herein with respect thereto (and such provisions shall, as the context may require, inure to the benefit thereof). Additionally, each and every right, power, privilege or duty expressed or intended by this Agreement or any of the other Financing Documents to be exercised by or vested in or conveyed to Administrative Agent with respect to any applicable Collateral shall be exercisable by and vest in Collateral Agent to the extent, and only to the extent, necessary to enable Collateral Agent to exercise such rights, powers and privileges with respect to such Collateral and to perform such duties with respect to such Collateral, and every covenant and obligation contained in the Financing Documents and necessary to the exercise or performance thereof by Collateral Agent shall run to and be enforceable by any of Administrative Agent or Collateral Agent. Should any instrument in writing from any Borrower Entity be required by Collateral Agent or any such co-agents, sub-agents and attorneys-in-fact for more fully and certainly vesting in and confirming to it such rights, powers, privileges and duties, such Borrower Entity shall execute, acknowledge (or shall cause to be executed and acknowledged) and deliver any and all such instruments promptly upon request by Administrative Agent or Collateral Agent, as applicable.

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10.2 Reliance by Administrative Agent . Administrative Agent shall be entitled to rely upon any certificate, notice or other document (including any email or other electronic transmission, telecopy or telex) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by Administrative Agent. As to any other matters not expressly provided for by this Agreement, Administrative Agent shall not be required to take any action or exercise any discretion, but shall be required to act or to refrain from acting upon instructions of the Required Lenders or, where expressly provided, all Lenders (except that Administrative Agent shall not be required to take any action which exposes Administrative Agent to personal liability or which is contrary to this Agreement, any other Financing Document or any Legal Requirement) and shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any other Financing Document in accordance with the instructions of the Required Lenders (or, where so expressly stated, all Lenders), and such instructions of the Required Lenders (or all Lenders, where applicable) and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders .

10.3 Non-Reliance . Each Lender represents that it has, independently and without reliance on Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of the financial condition and affairs of each Borrower Entity and their respective Affiliates and such Lender’s decision to enter into this Agreement and agrees that such Lender will, independently and without reliance upon Administrative Agent or any other Lender, and based on such documents and information as such Lender shall deem appropriate at the time, continue to make its own appraisals and decisions in taking or not taking action under this Agreement. Each of Administrative Agent and any Lender shall not be required to keep informed as to the performance or observance by any Borrower Entity or any of their respective Affiliates under this Agreement or any other document referred to or provided for herein or to make inquiry of, or to inspect the properties or books of, any Borrower Entity or any of their respective Affiliates .

10.4 Defaults . Administrative Agent (acting in its capacity as Administrative Agent and not in any other capacity) shall not be deemed to have knowledge or notice of the occurrence of any Default or any Event of Default unless Administrative Agent has received a written notice from a Lender or Borrower, referring to this Agreement, describing such Default or such Event of Default and indicating that such notice is a “notice of default .” If Administrative Agent receives such a notice of the occurrence of a Default or an Event of Default, Administrative Agent shall promptly give notice thereof to the Lenders. Administrative Agent shall take such action with respect to such Default or such Event of Default as is provided in Article 8 or, if not provided for in Article 8 , as Administrative Agent shall be reasonably directed by the Required Lenders; provided that unless and until Administrative Agent shall have received such directions, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or such Event of Default as it shall promptly deem advisable in the best interest of the Lenders.

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10.5 Indemnification . Without limiting the obligations of Borrower hereunder, each Lender agrees to indemnify each of Administrative Agent and Collateral Agent, ratably in accordance with such Lender’s Proportionate Share for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against Administrative Agent or Collateral Agent, as applicable, in any way relating to or arising out of this Agreement, the other Financing Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or the enforcement of any of the terms hereof or thereof or of any such other documents; provided that no Lender shall be liable for any of the foregoing to the extent they arise solely from the gross negligence or willful misconduct of Administrative Agent or Collateral Agent, as applicable, as determined by a final non-appealable judgment of a court of competent jurisdiction. Each of Administrative Agent and Collateral Agent shall be fully justified in refusing to take or refusing to continue to take any action hereunder unless it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Without limitation of the foregoing, each Lender agrees to reimburse each of Administrative Agent or Collateral Agent, as applicable, promptly upon demand for such Lender’s ratable share of any out-of-pocket expenses (including counsel fees) incurred by Administrative Agent or Collateral Agent, as applicable, in connection with the preparation, execution, administration or enforcement of, or legal advice in respect of rights or responsibilities under, the Operative Documents, to the extent that Administrative Agent or Collateral Agent, as applicable, is not reimbursed promptly for such expenses by Borrower .

10.6 Successor Agents . Each of Administrative Agent and Collateral Agent acknowledges that its current intention is to remain Administrative Agent or Collateral Agent, as applicable, hereunder. Nevertheless, Administrative Agent or Collateral Agent may resign at any time by giving fifteen (15) days written notice thereof to the Lenders and Borrower, such resignation to be effective only upon the acceptance of the appointment of a successor Administrative Agent or Collateral Agent, as applicable. Administrative Agent or Collateral Agent may be removed involuntarily only for a material breach of its duties and obligations hereunder or under the other Financing Documents or for gross negligence or willful misconduct, as determined by a final non-appealable judgment of a court of competent jurisdiction, in connection with the performance of its duties hereunder or under the other Financing Documents and then only upon the affirmative vote of the Required Lenders (excluding any Lender in its capacity as such Agent from such vote and such Lender’s Proportionate Share of the Commitments from the amounts used to determine the portion of the Commitments necessary to constitute the required Proportionate Shares of the other Lenders). Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent or Collateral Agent, as applicable, with the consent of Borrower (unless an Event of Default shall have occurred and be continuing), which consent shall not be unreasonably withheld and which consent shall be provided with respect to at least one of the Lenders. If no successor Administrative Agent or Collateral Agent, as applicable, shall have been so appointed by the Required Lenders, and such successor shall have accepted such appointment, within thirty (30) days after the retiring Administrative Agent’s or Collateral Agent’s, as applicable, giving of notice of resignation or the Required Lenders’ removal of the retiring Administrative Agent or retiring Collateral Agent, as applicable, the retiring Administrative Agent or the retiring Collateral Agent, as applicable, may, on behalf of the Lenders, appoint a successor Administrative Agent or Collateral Agent, as applicable, which shall be a Lender, if any Lender shall be willing to serve, and otherwise shall be a commercial bank having a combined capital and surplus of at least One Hundred Million Dollars ($100,000,000). Upon the acceptance of any appointment as Administrative Agent or Collateral Agent, as applicable, under the Operative Documents by a successor Administrative Agent or Collateral Agent, as applicable, such successor Administrative Agent or successor Collateral Agent, as applicable, shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent or the retiring Collateral Agent, as applicable, and the retiring Administrative Agent or the retiring Collateral Agent, as applicable, shall be discharged from its duties and obligations as Administrative Agent or Collateral Agent, as applicable, only under the Financing Documents. After any retiring Administrative Agent’s or retiring Collateral Agent’s resignation or removal hereunder as Administrative Agent or Collateral Agent, as applicable, the provisions of this Article 10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent or Collateral Agent, as applicable, under the Operative Documents.

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10.7 Authorization . Administrative Agent is hereby authorized by the Lenders to execute, deliver and perform each of the Financing Documents to which Administrative Agent is or is intended to be a party, and each Lender agrees to be bound by all of the agreements of Administrative Agent contained in the Financing Documents. Administrative Agent is further authorized by the Lenders to enter into agreements supplemental hereto with any Person for the purpose of curing any formal defect, inconsistency, omission or ambiguity in this Agreement or any other Financing Document to which it is a party (without any consent or approval by the Lenders).

10.8 Other Rights and Power of Administrative Agent . With respect to its Commitments, the Loans made by it and any Note issued to it, the Lender serving as Administrative Agent shall have the same rights and powers under the Operative Documents as any other Lender and may exercise the same as though it were not Administrative Agent. The term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include Administrative Agent in its capacity as a Lender. Administrative Agent and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with Borrower or any other Person, without any duty to account therefor to the Lenders.

10.9 Amendments . Subject to the provisions of this Section 10 . 9 , no amendment or waiver of any provision of this Agreement or any other Financing Document, and no consent to any departure by any Borrower Entity therefrom, shall be effective unless in writing signed by the Required Lenders (or Administrative Agent with the consent in writing of the Required Lenders) and the Borrower Entity party thereto, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no such amendment, waiver or consent shall , without the consent of all of the Lenders:

(a) Extend the maturity of any Loan or any of the Notes or reduce the principal amount thereof, or reduce the rate or change the time of payment of interest due on any Loan, any Note or any Commitment Fees; or

(b) Modify Section 2.1 ( Construction Loan Facility and ITC Bridge Loan Facility ), 2.3 ( Total Commitments ), 2.4 ( Fees ), 2.5 ( Other Payment Terms ), 2.6 ( Change of Circumstances ), 2.7 ( Funding Losses ), 5.1 ( Use of Loan Proceeds ), 6.6 ( Distributions ), 6.12 ( Dissolution ), 6.15 ( Compliance with Anti-Money Laundering Laws and OFAC Laws ), 10.1 ( Appointment, Powers and Immunities ), 10.13 ( Participations ) or 10.14 ( Assignments; Transfer of Commitments ) hereof, or modify Article 4 of the Depositary Agreement; or

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(d) Increase the amount of any of the Commitments of any Lender hereunder; or

(e) Reduce the amount of, or change the time of payment of, any fee (other than the Other Fees) due or payable hereunder or under any other Financing Document; or

(f) Reduce the percentage specified in the definition of Required Lenders; or

(g) Permit Borrower to assign its rights under this Agreement except as provided in Section 12.15 ; or

(h) Amend this Section 10.9 ; or

(i) Release any Collateral from the Lien of any of the Collateral Documents, release any guaranties under any of the Collateral Documents or allow release of any funds from any Account otherwise than in accordance with the terms hereof (including Section 6.4) , the terms of the Depositary Agreement and the terms of the other Financing Documents.

No amendment of any provision of this Agreement relating to Administrative Agent shall be effective without the written consent of Administrative Agent. No amendment of any provision of this Agreement relating to Collateral Agent shall be effective without the written consent of Collateral Agent. No amendment of any provision of this Agreement relating to the Depositary shall be effective without the written consent of the Depositary.

10.10 Withholding Tax .

(a) Administrative Agent may withhold from any interest payment to any Lender an amount equivalent to any applicable withholding tax.

(b) If the IRS or any authority of the United States or other jurisdiction is successful in establishing a claim that Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or was not properly executed, or because such Lender failed to notify Administrative Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), such Lender shall promptly indemnify Administrative Agent or Borrower, as applicable, fully for all amounts paid, directly or indirectly, by such Person as tax or otherwise, including penalties and interest, together with all expenses incurred, including legal expenses, allocated staff costs, and any out of pocket expenses.

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(c) If any Lender grants participations in its rights under this Agreement, the participant shall comply with, and be bound by, the terms of Sections 2.5(f) , 10.10(a) and 10.10(b) as though it were such Lender.

10.11 General Provision as to Payments . Administrative Agent shall promptly distribute to each Lender its pro rata share of each payment of principal and interest payable to the Lenders on the Loans or fees hereunder received by Administrative Agent for the account of the Lenders and of any other amounts owing under the Loans. The payments made for the account of each Lender shall be made, and distributed to it, for the account of its domestic or foreign Lending Office, as each Lender may designate in writing to Administrative Agent. Lenders shall have the right to alter designated Lending Offices upon written notice to Administrative Agent and Borrower .

10.12 Substitution of a Lender . If any Lender (a) fails to make a Loan, states in writing that it does not intend to comply with its funding obligations hereunder or fails to provide the forms or other documentation required by Section 2 . 5(f) , in each case, in violation of its obligations under this Agreement, (b) is unable to make Eurodollar Loans due to an event occurring under Section 2.6(b) , (c) claims increased costs or amounts under Section 2.6(a) , Section 2.6(c) or Section 2.6(d) , (d) requires the payment of any additional amount to such Lender or any Governmental Authority on account of such Lender pursuant to Section 2.5 , or (e) refuses to consent to any amendment, waiver or other modification of any Financing Document requested by Borrower that requires the consent of all Lenders (or all Lenders directly and adversely affected thereby) and such amendment, waiver or other modification is consented to by the Required Lenders (any such Lender being a “ Substitutable Lender ”), then (i) Administrative Agent may in its sole discretion fund the Loan on behalf of the Substitutable Lender and (ii) Borrower may require such Lender to transfer and assign, in accordance with and subject to the restrictions contained in Section 10.14 , its rights and interests to any Eligible Assignee or any other Lender reasonably acceptable to Administrative Agent and that shall be willing to assume the Substitutable Lender’s obligations under this Agreement (including the obligation to make the Loan which the Substitutable Lender failed to make but without assuming any liability for damages for failing to have made such Loan or any previously required Loan), and Administrative Agent shall cooperate and assist Borrower with any such demand. Subject to the provisions of the next following sentence, such Person shall be substituted for the Substitutable Lender hereunder upon execution and delivery to Administrative Agent of an agreement acceptable to Administrative Agent by such Person assuming the Substitutable Lender’s obligations under this Agreement, and all interest and fees which would otherwise have been payable to the Substitutable Lender shall thereafter be payable to such Person. Nothing in (and no action taken pursuant to) this Section 10 . 12 shall relieve the Substitutable Lender from any liability it might have to Borrower or to the other Lenders as a result of the Substitutable Lender’s failure to make such Loan or any other Loan . For the avoidance of doubt, the Substitutable Lender being substituted hereunder shall have received payment of an amount equal to the Obligations then owing to it (to the extent of the outstanding principal, accrued fees and other amounts, as applicable, included in the Obligations) from either Borrower or the assignee of the Substitutable Lender.

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10.13 Participations .

(a) Generally . Nothing herein provided shall prevent any Lender from selling a participation in its Commitments (and Loans made thereunder); provided that (i) no such sale of a participation shall alter such Lender’s obligations hereunder, (ii) no more than two participations may be sold by any Lender absent an Event of Default at the time of such sale, and (iii) any agreement pursuant to which any Lender may grant a participation in its rights with respect to its Commitments (and Loans or other Obligations) shall provide that, with respect to such Commitments (and Loans or other Obligations), such Lender shall retain the sole right and responsibility to exercise the rights of such Lender and to enforce the obligations of Borrower relating to such Commitments (and Loans or other Obligations), including the right to approve any amendment, modification or waiver of any provision of this Agreement or any other Financing Document and the right to take action to have the Notes declared due and payable pursuant to Article 8 and that the participant agree for the benefit of Borrower and Administrative Agent to comply with provisions of Section 2.5(d) and Section 2.5(f) to the same extent as if it were a Lender (it being understood that the documentation required under Section 2.5(d) and Section 2.5(f) shall be delivered to the participating Lender).

(b) Participant Register . Each Lender that sells a participation shall, acting solely for this purpose as an agent of Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Loans or other obligations under the Financing Documents (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans, letters of credit or its other obligations under any Financing Document) except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations . The entries in the Participant Register shall be conclusive absent demonstrable error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

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10.14 Assignments; Transfer of Commitments . Notwithstanding anything else herein to the contrary, any Lender, after receiving the prior written consent of (a) Administrative Agent, and (b) so long as no Event of Default has occurred and is continuing, Borrower (provided that Borrower shall be deemed to have consented to a transfer or assignment to an Eligible Assignee unless Borrower shall object thereto by written notice to Administrative Agent within five Business Days after having received notice thereof), in each such case, such consent not to be unreasonably withheld or delayed, may from time to time, at such Lender’s option, sell, assign, transfer or otherwise dispose of (collectively, “assign,” and any such sale, assignment, transfer or other disposition being, for the purposes of this Section 10.14 , an “assignment,” the Lender making such assignment being the “assigning Lender” and the assignee or transferee of such assignment being an “assignee” or a “new Lender”) a portion of its Commitments (and Loans made thereunder) (including such Lender’s interest in this Agreement and the other Financing Documents) to any bank or other lending institution which in such assigning Lender’s reasonable judgment is capable of performing the obligations of a Lender hereunder and reasonably experienced in project financings; provided that no Lender (including any assignee of any Lender) may assign any portion of its Commitments (including Loans) of less than Two Million Five Hundred Thousand Dollars ($2,500,000) (unless to another Lender) or which leaves the assigning Lender with Commitments (including Loans) of less than Two Million Five-Hundred Thousand Dollars ($2,500,000) after giving effect to such assignment and all previous assignments (except that a Lender may be left with no Commitments and Loans if it assigns its entire Commitments and Loans); provided that (i) no natural person, no Lender that is a Substitutable Lender, no Borrower Entity, and no Affiliate of any Borrower Entity shall be an assignee or new Lender, and no Lender (including any assignee of a Lender) may assign any portion of its Commitments, Loans or other Obligations to any of the foregoing prohibited holders; and (ii) unless otherwise consented to in writing by Borrower (solely to the extent that no Event of Default is continuing and such consent is not to be unreasonably withheld, delayed or conditioned), at no time shall the total number of Lenders exceed three Lenders (including assignments to affiliates of Lenders). In the event of any permitted assignment: (A) the assigning Lender’s Proportionate Share shall be reduced by the amount of the Proportionate Share assigned to the new Lender; (B) the parties to such assignment shall execute and deliver an appropriate agreement evidencing such assignment (and, if Borrower is not required to execute such assignment agreement pursuant to the terms of this Section 10.14 , Administrative Agent shall provide a copy of such executed assignment agreement to Borrower upon execution thereof) and shall pay or cause to be paid to Administrative Agent a processing fee in the amount of Three Thousand Five Hundred Dollars ($3,500); and (c) at the assigning Lender’s option, Borrower shall execute and deliver to such new Lender new Notes substantially in the forms attached hereto as Exhibit A-1 and Exhibit A-2 (as appropriate) in a principal amount equal to such new Lender’s Proportionate Share of the applicable Commitments being assigned, and Borrower shall execute and exchange with the assigning Lender a replacement note for any Note in an amount equal to the Proportionate Share of the applicable Commitments retained by the assigning Lender, if any. Thereafter, such new Lender shall be a Lender and shall have all of the rights and duties of a Lender (except as otherwise provided in this Article 10 ), in accordance with its Proportionate Share, under each of the Financing Documents.

10.15 Laws . Notwithstanding the foregoing provisions of this Article 10 , no sale, assignment, transfer, negotiation or other disposition of the interests of any Lender hereunder or under the other Financing Documents shall be allowed if it would require registration of the Notes under the Securities Act, any other federal securities laws or regulations or the securities laws or regulations of any applicable jurisdiction. Borrower shall, from time to time at the request and expense of Administrative Agent, execute and deliver to Administrative Agent, or to such party or parties as Administrative Agent may designate, any and all further instruments and take such further actions as may in the opinion of Administrative Agent be reasonably necessary or advisable to give full force and effect to any sale, assignment, transfer or other disposition permitted under Section 10.14 and this Section 10.15 and Section 10.16 .

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10.16 Assignability to Federal Reserve Bank . Notwithstanding any other provision contained in this Agreement or any other Financing Document to the contrary, any Lender may assign all or any portion of the Loans or Notes held by it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Federal Reserve Board and any Operating Circular issued by such Federal Reserve Bank; provided that any payment in respect of such assigned Loans or Notes made by Borrower to or for the account of the assigning or pledging Lender in accordance with the terms of this Agreement shall satisfy Borrower’s obligations hereunder in respect to such assigned Loans or Notes to the extent of such payment. No such assignment shall release the assigning Lender from its obligations hereunder.

10.17 Response to Borrower Requests . Administrative Agent and each Lender shall endeavor to act as diligently as practicable in the review of documents, the making of determinations or the consideration of requests for consents, approvals, waivers or amendments required to be reviewed, made or considered by Administrative Agent or the Lenders, as the case may be, as contemplated by and in accordance with the provisions of this Agreement and the other Operative Documents. Borrower shall provide Administrative Agent with reasonable advance written notice of the expected occurrence of any such requirements and, at the reasonable request of Borrower and to the extent required by this Agreement, Administrative Agent shall so advise the Lenders. Borrower shall provide such documents and information to any Lender (through Administrative Agent) as Administrative Agent may reasonably consider necessary or advisable, and shall otherwise cooperate with Administrative Agent and the Lenders, to permit Administrative Agent and the Lenders effectively to review such documents, make such determinations or consider such requests for consents, approvals, waivers or amendments .

10.18 Flood Law Compliance Policies . Administrative Agent has adopted internal policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and related legislation (the “ Flood Laws ”). Administrative Agent will post on the applicable electronic platform (or otherwise distribute to each Lender) documents that it receives in connection with the Flood Laws. However, each Lender hereby acknowledges and agrees that, pursuant to the Flood Laws, each federally regulated lender is responsible for assuring its own compliance with flood insurance requirements .

ARTICLE 11
INDEPENDENT CONSULTANTS

11.1 Removal and Fees . Administrative Agent, in its reasonable discretion, may remove, from time to time, any one or more of the Independent Consultants and appoint replacements reasonably acceptable to Borrower. Notice of any replacement Independent Consultant shall be given by Administrative Agent to Borrower, the Lenders and the Independent Consultant being replaced. All reasonable fees and expenses of the Independent Consultants (whether the original Independent Consultants or replacements) shall be paid by Borrower; provided that unless a Default or an Event of Default shall have occurred and be continuing, Administrative Agent shall request that each Independent Consultant provide Borrower with its proposed scope of work and proposed budget therefor, and shall consult with and seek the consent of Borrower (such consent not to be unreasonably withheld or delayed) with regard to the matters contained therein .

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11.2 Duties . Each Independent Consultant shall be contractually obligated to Administrative Agent to carry out the activities required of it in this Agreement and as otherwise requested by Administrative Agent and shall be responsible to Administrative Agent .

11.3 Independent Consultants’ Certificates . Borrower shall provide such documents and information to the Independent Engineer as it may reasonably consider necessary in order for the Independent Engineer to deliver to Administrative Agent, upon the reasonable request of Administrative Agent, after notification to Borrower, a certificate setting forth a full report on the status of the Project and such other information and certification as Administrative Agent may reasonably require from time to time. Borrower shall provide the Independent Consultants with reasonable notice of the expected occurrence of any dates or events that would require certificates of Independent Consultants hereunder.

ARTICLE 12
MISCELLANEOUS

12.1 Addresses . Any communications hereunder between or among the parties hereto, or any notices provided herein to be given, may be given to the following applicable addresses (or with respect to the Lenders, as set forth in Exhibit G or in the applicable assignment agreement delivered pursuant to Section 10.14 ):

If to Administrative Agent:

KeyBank National Association,

as Administrative Agent

127 Public Square

Cleveland, OH 44114-1306

Attn: Sukanya Raj, Senior Vice President

Tel: (216) 689-7669

Fax: (216) 689-8329

with a copy to:

KeyBank National Association

4900 Tiedeman Road

Cleveland, OH 44114

Mail Code: OH-01-49-0114

Attn: Key Agency Services

Tel: (216) 813-4617

Fax: (216) 370-5733

If to Collateral Agent:

KeyBank National Association,

as Collateral Agent

127 Public Square

Cleveland, OH 44114-1306

Attn: Sukanya Raj, Senior Vice President

Tel: (216) 689-7669

Fax: (216) 689-8329

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with a copy to:

KeyBank National Association

4900 Tiedeman Road

Cleveland, OH 44114

Mail Code: OH-01-49-0114

Attn: Key Agency Services

Tel: (216) 813-4617

Fax: (216) 370-5733

If to Borrower: Innovative Solar 31, LLC

c/o VivoPower USA LLC

3824 Cedar Springs Rd #801-1299

Dallas TX 75219

Attention: Chief Financial Officer

Email: dpilotte@vivopower.com

Fax: (844) 774-0503

With a copy to (which shall not constitute notice):

Stoel Rives LLP

600 University Street, Suite 3600

Seattle, WA 98101

Attn: Alex Mertens

Email: alex.mertens@stoel.com

Fax: (206) 386-7500

The address shown above for Borrower is a mailing address for Borrower. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be considered as properly given (a) if delivered in person, (b) if sent by overnight delivery service, (c) if mailed by first class mail, postage prepaid, registered or certified with return receipt requested, or (d) if sent by facsimile. Any notice or other communication so given shall be effective upon receipt by the addressee, except that any notice or other communication so transmitted by facsimile shall be deemed to have been validly and effectively given on the day (if a Business Day and, if not, on the next following Business Day) on which it is transmitted if transmitted before 5:00 p.m., recipient’s time, and if transmitted after that time, on the next following Business Day; provided that if any notice or other communication is tendered to an addressee and the delivery thereof is refused by such addressee, such notice or other communication shall be effective upon such tender. Any party shall have the right to change its address for notice hereunder to any other location within the United States by giving written notice of such change to the other parties in the manner set forth in this Section.

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12.2 Additional Security; Right to Set-Off . Any deposits or other sums at any time credited or due from Lenders and any Project Revenues, securities or other property of Borrower in the possession of Administrative Agent may at all times be treated as collateral security for the payment of the Loans and the Notes and all other Obligations of Borrower to the Lenders under this Agreement and the other Financing Documents, and, as security for the payment of the Loans, the Notes and all other Obligations of Borrower to the Lenders under this Agreement and the other Financing Documents, Borrower hereby pledges to Administrative Agent for the benefit of the Secured Parties, and grants to Administrative Agent a security interest in all of Borrower’s right, title and interest in and to, all such deposits, sums, securities and other property . Regardless of the adequacy of any other collateral, Administrative Agent and only Administrative Agent may execute or realize on the Secured Parties’ security interest in any such deposits or other sums credited by or due from the Lenders to Borrower, and may apply any such deposits or other sums to or set them off against Borrower’s obligations to Lenders under the Notes and this Agreement at any time after the occurrence and during the continuation of any Event of Default.

12.3 Delay and Waiver . No delay in exercising, and no omission to exercise, any right, power or remedy accruing to Administrative Agent or the Lenders upon the occurrence of any Default or Event of Default or any breach or default by Borrower under this Agreement or by any Borrower Entity under any other Financing Document shall impair any such right, power or remedy of Administrative Agent, Collateral Agent or the Lenders, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single Default, Event of Default or other breach or default be deemed a waiver of any other Default, Event of Default or other breach or default theretofore or thereafter occurring. Any waiver, indulgence, permit, consent or approval of any kind or character on the part of Administrative Agent or the Lenders of any Default, Event of Default or other breach or default under this Agreement or any other Financing Document, or any waiver on the part of Administrative Agent or the Lenders of any provision or condition of this Agreement or any other Financing Document, must be in a writing expressly referencing this Agreement and shall be effective only to the extent in such writing specifically set forth. All remedies, either under this Agreement or any other Financing Document or by law or otherwise afforded to Administrative Agent and the Lenders, shall be cumulative and not alternative .

12.4 Costs, Expenses and Attorneys’ Fees . Borrower will pay to Administrative Agent all of its reasonable and documented third-party and out-of-pocket costs and expenses in connection with the preparation, negotiation, closing and costs of administering this Agreement and the documents contemplated hereby, including the reasonable and documented fees, expenses and disbursements of Thompson Hine LLP and a single local counsel for each relevant jurisdiction retained by Administrative Agent in connection with the preparation of such documents and any amendments hereof or thereof, or the negotiation, closing or administration of this Agreement, and the reasonable and documented fees, expenses and disbursements of the Independent Consultants and any other engineering, insurance, environmental and construction consultants to Administrative Agent incurred in connection with this Agreement or the Loans or the Commitments, including the reasonable and documented travel and out-of-pocket costs incurred by Administrative Agent; provided that Borrower shall not be required to pay the fees of the Lenders’ (other than Administrative Agent’s) attorneys. Borrower will reimburse Administrative Agent and the Lenders for all costs and expenses, including reasonable and documented attorneys’ fees, third-party consultant fees, and expert witness fees expended or incurred by Administrative Agent and each Lender in enforcing this Agreement or the other Financing Documents in connection with a Default or an Event of Default, in actions for declaratory relief in any way related to this Agreement, or in collecting any sum which becomes due and payable to Administrative Agent or any Lender on the Notes or under the other Financing Documents.

117

12.5 Entire Agreement . This Agreement, the other Financing Documents and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect to the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Agreement and any such agreement, document or instrument, the terms, conditions and provisions of this Agreement shall prevail.

12.6 Governing Law . THIS AGREEMENT, AND ANY OTHER FINANCING DOCUMENT (TO THE EXTENT NOT EXPRESSLY PROVIDED FOR THEREIN), SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK.

12.7 Severability . If any provision of this Agreement or any other Financing Document is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Financing Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction .

12.8 Headings . Article, Section and paragraph headings and a table of contents have been inserted in this Agreement as a matter of convenience for reference only and it is agreed that such Article, Section and paragraph headings and such table of contents are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement .

12.9 Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with GAAP and practices consistent with those applied in the preparation of the financial statements submitted by Borrower to Administrative Agent, and (unless otherwise indicated) all financial data submitted pursuant to this Agreement shall be prepared in accordance with such principles and practices .

12.10 No Partnership, Etc . Administrative Agent, Collateral Agent, the Lenders and Borrower intend that the relationship between or among them shall be solely that of creditor and debtor. Nothing contained in this Agreement, the Notes or any of the other Financing Documents shall be deemed or construed to create a partnership, tenancy-in-common, joint tenancy, joint venture or co-ownership by, between or among Administrative Agent, Collateral Agent, the Lenders and Borrower or any other Person. None of Administrative Agent, Collateral Agent or the Lenders shall be in any way responsible or liable for the Debts, losses, obligations or duties of any Borrower Entity or any other Person with respect to the Project Documents, the Project or otherwise. All obligations of Borrower to pay real property or other taxes, assessments and insurance premiums, or other fees and charges, arising from any Project Document or the ownership, operation or occupancy of the Project and to perform all obligations of Borrower or any of its subsidiaries under the Project Documents and any other agreements and contracts relating to the Project shall be the sole responsibility of Borrower .

118

12.11 Limitation on Liability . NO CLAIM SHALL BE MADE BY ANY PARTY HERETO OR ANY OF ITS AFFILIATES, DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS AGAINST ANY OTHER PARTY HERETO OR ANY OF ITS AFFILIATES, DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (WHETHER OR NOT THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT, DUTY IMPOSED BY LAW OR OTHERWISE) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE OTHER OPERATIVE DOCUMENTS OR ANY ACT OR OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND EACH PARTY HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

12.12 Waiver of Jury Trial . ADMINISTRATIVE AGENT, COLLATERAL AGENT, EACH LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ADMINISTRATIVE AGENT, ANY LENDER OR BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR ADMINISTRATIVE AGENT, COLLATERAL AGENT, THE LENDERS AND BORROWER TO ENTER INTO THIS AGREEMENT .

12.13 Consent to Jurisdiction . Administrative Agent, Collateral Agent, the Lenders and Borrower agree that any legal action or proceeding by or against Borrower or with respect to or arising out of this Agreement, the Notes or any other Financing Document may be brought in or removed to the courts of the State of New York, in and for the County of New York, or of the United States of America for the Southern District of New York. By execution and delivery of this Agreement, Administrative Agent, Collateral Agent, the Lenders and Borrower accept for themselves and in respect of their property, generally and unconditionally, the jurisdiction of the aforesaid courts. Administrative Agent, Collateral Agent, the Lenders and Borrower irrevocably consent to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to Administrative Agent, Collateral Agent, the Lenders or Borrower, as the case may be, at their respective addresses for notices as specified herein and that such service shall be effective five (5) Business Days after such mailing. Administrative Agent, Collateral Agent, the Lenders and Borrower further agree that the aforesaid courts of the State of New York and of the United States of America shall have exclusive jurisdiction with respect to any claim or counterclaim of Borrower based upon the assertion that the rate of interest charged by Administrative Agent or the Lenders on or under this Agreement, the Loans or the other Financing Documents is usurious. Administrative Agent, the Lenders, Collateral Agent and Borrower hereby waive any right to stay or dismiss any action or proceeding under or in connection with this Agreement or any other Financing Document brought before the foregoing courts on the basis of forum non-conveniens. Nothing herein shall affect the right to serve process in any other manner permitted by law or the right of Administrative Agent or any Lender to bring legal action or proceedings in any other competent jurisdiction.

119

12.14 Usury . Nothing contained in this Agreement or the Notes shall be deemed to require the payment of interest or other charges by Borrower or any other Person in excess of the amount which the holders of the Notes may lawfully charge under any applicable usury laws . In the event that the holders of the Notes shall collect moneys which are deemed to constitute interest which would increase the effective interest rate to a rate in excess of that permitted to be charged by applicable law, all such sums deemed to constitute interest in excess of the legal rate shall, upon such determination, at the option of the holders of the Notes, be returned to Borrower or credited against the principal balance of the Notes then outstanding . Nothing contained in this Section 12.14 shall be construed as waiving any usury exemption any Lender has under law, and, to the extent any such exemption applies, this Section 12.14 shall be inapplicable.

12.15 Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, and, as expressly provided herein, Depositary and all Persons entitled to indemnification hereunder. Borrower may not assign or otherwise transfer any of its rights under this Agreement without the prior written consent of Administrative Agent and the Lenders .

12.16 Counterparts . This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Signature pages to this Agreement may be detached from multiple separate counterparts and attached to a single counterpart so that all signatures are physically attached to the same document. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement. The parties to this Agreement agree that, except as expressly provided above, any deliverable required to be provided pursuant to Article 3 may be delivered by facsimile or electronic mail or other electronic transmission. For the avoidance of doubt, any copy of a fully executed document which by its terms may be signed in counterpart or executed and delivered by facsimile or electronic mail or other electronic transmission that is delivered by facsimile or electronic mail or other electronic transmission shall constitute an original for purpose of such Article 3 , except to the extent originals are specifically required in Article 3 and, in each case where originals will be required, such originals to be delivered to Administrative Agent, Collateral Agent, Lenders or their counsel, as applicable.

12.17 USA Patriot Act Compliance . Administrative Agent hereby notifies Borrower that, pursuant to the requirements of the Patriot Act, it and any Lender shall be required to obtain, verify and record information that identifies Borrower, which information includes, without limitation, the name and addresses and other information that will allow it or any Lender to identify Borrower in accordance with the requirements of the Patriot Act. Borrower shall promptly deliver information described in the immediately preceding sentence when requested by Administrative Agent or any Lender in writing pursuant to the requirements of the Patriot Act .

120

12.18 Confidentiality . Each party hereto (a “ Recipient ”) agrees to use commercially reasonable efforts to maintain the confidential nature of, and shall not use or disclose, the financial information or other confidential information related to any other party or any other party’s Affiliates (a “ Disclosing Party ”) without first obtaining such Disclosing Party’s prior written consent; provided that nothing in this Section 12.18 shall require any Recipient to obtain any consent of any Disclosing Party in connection with (and each Disclosing Party hereby authorizes each Recipient to freely disclose any financial information or confidential information with respect to such Disclosing Party or any Financing Document without such Disclosing Party’s consent, to the extent otherwise required, in connection with): (a) exercising any of a Recipient’s rights under the Financing Documents, including those exercisable upon the occurrence of an Event of Default; (b) providing information about Borrower or any Financing Document or the parties thereto to any Lender or prospective Lender or any Person acquiring, or potentially acquiring, any interest of the Lenders under this Agreement and any such Person’s directors, officers, employees, agents and consultants in connection with their credit evaluation of Borrower or otherwise (if, in the case of any such Person potentially acquiring such an interest from any Lender, such Person agrees to be bound by the terms of a confidentiality agreement substantially similar to this Section 12.18 ); (c) any situation in which any Recipient (i) is required by law or required by any Governmental Authority or, in the case of the Agents and Lenders, the National Association of Insurance Commissioners, or, in the case of the Borrower, the Australian Securities Exchange or any other securities or trading exchange, to disclose information or (ii) is requested by bank examiners to disclose information (provided that in each instance under immediately preceding clauses (i) and (ii) such Person uses commercially reasonable efforts to maintain confidentiality of the information disclosed); (d) providing information to legal counsel to any Recipient in connection with the transactions contemplated by any of the Financing Documents (if such Recipient informs such counsel of the confidential nature of such information and requires that it be kept confidential except as permitted herein); (e) providing information to independent accountants, auditors or other expert consultants retained by any Recipient (if such Recipient informs such auditors or consultants of the confidential nature of such information and requires that it be kept confidential except as permitted herein); (f) providing information to such Recipient’s officers, directors, members, managers and employees (if such Recipient informs such officers, directors, members, managers and employees of the confidential nature of such information and requires that it be kept confidential except as permitted herein); (g) Borrower providing information to Affiliates of Borrower and the respective officers, directors, members, managers, employees, agents, representatives, investors and lenders of such Affiliates (if Borrower informs such Affiliates and such other Persons of the confidential nature of such information and requires that it be kept confidential except as permitted herein); (h) any information that is in or becomes part of the public domain otherwise than through a wrongful act of any Recipient or any employees or agents thereof or other Persons to whom confidential information is disclosed under any of clauses (b) , (c) , (d) , (e) , (f) and (g) of this Section 12.18 ; (i) any information that is in the possession of any Recipient prior to receipt thereof from the Disclosing Party or any other Person known to any Recipient to be acting on behalf of the Disclosing Party; (j) any information that is independently developed by any Recipient; and (k) any information that is disclosed to any Recipient by a third party that is not known or reasonably suspected by such Recipient to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, Disclosing Party, with respect to such information.

Notwithstanding anything to the contrary set forth in this Section 12.18 , after notice to the applicable Disclosing Party, any Recipient shall be free to disclose any information regarding the tax structure of the transactions contemplated in this Agreement and the other Financing Documents to any relevant Governmental Authority requiring such information.

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12.19 Attorney-in-Fact . For the purpose of allowing Administrative Agent to exercise its rights and remedies provided in Article 8 following the occurrence and during the continuation of an Event of Default, Borrower hereby constitutes and appoints Administrative Agent its true and lawful attorney-in-fact, with full power of substitution, to complete the Project in the name of Borrower, and hereby empowers such attorney or attorneys as follows:

(a) To use any unadvanced proceeds of the Loans allocated to the Project for the purpose of completing, operating or maintaining the Project as provided in the Power Purchase Agreement and the Interconnection Agreement, the EPC Agreement, the O&M Agreement and the Plans and Specifications or the other related Material Project Documents;

(b) To make such changes and corrections in the Plans and Specifications as reasonably shall be necessary or desirable to complete the work on the Project in substantially the manner contemplated by the EPC Agreement;

(c) To employ such contractors, subcontractors, agents, architects and inspectors as reasonably shall be required for the foregoing purposes;

(d) To pay, settle or compromise all bills and claims which may be or become Liens against the Project or the Collateral or any part thereof, unless a bond or other security satisfactory to Administrative Agent has been provided;

(e) To execute applications and certificates in the name of Borrower which reasonably may be required by the Financing Documents or any other agreement or instrument executed by or on behalf of Borrower in connection with the Project;

(f) To prosecute and defend all actions or proceedings in connection with the Project or the Collateral or any part thereof, and to take such action and require such performance as such attorney reasonably deems necessary under any performance and payment bond and the Financing Documents; and

(g) To do any and every act which Borrower might do on its behalf with respect to the Collateral or any part thereof, or the Project and to exercise any or all of Borrower’s rights and remedies under any or all of the Material Project Documents.

This power of attorney shall be deemed to be a power coupled with an interest and shall be irrevocable.

12.20 Deed of Trust; Collateral Documents . The Loans and the other Obligations are secured in part by the Deed of Trust encumbering certain properties in North Carolina. Reference is hereby made to the Deed of Trust and the other Collateral Documents for the provisions, among others, relating to the nature and extent of the security provided thereunder, the rights, duties and obligations of Borrower and the rights of the Secured Parties with respect to such security .

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IN WITNESS WHEREOF, the parties have caused this Financing Agreement to be duly executed by their respective officers, representatives or other authorized persons thereunto duly authorized as of the day and year first above written.

	Innovative Solar 31, LLC ,
	a North Carolina limited liability company


	By: /s/Gary Hui
	Name: Gary Hui
	Title: Manager

	KEYBANK NATIONAL ASSOCIATION ,
	as Administrative Agent, as Collateral Agent, as
	Lead Arranger and as a Lender


	By: /s/ Sukanya V. Raj
	Name: Sukanya V. Raj
	Title: Senior Vice President

EXHIBIT 10.4

SOLAR POWER FACILITY ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

by and between

INNOVATIVE SOLAR 31, LLC

and

GRUPO GRANSOLAR, LLC

Dated as of July 29, 2016

TABLE OF CONTENTS

Page

ARTICLE I		DEFINITIONS; INTERPRETATION; EXHIBITS	2
	1.1	Defined Terms	2
	1.2	Interpretation	13
ARTICLE II		CONTRACTOR RESPONSIBILITIES	13
	2.1	General Services of Contractor	13
	2.2	Compliance with Laws	13
	2.3	Labor	13
	2.4	Environmental Laws	14
	2.5	Specific Services of Contractor	14
	2.6	Subcontractors	18
	2.7	Independent Contractor	19
	2.8	Security and Safety Procedures	20
	2.9	Quality Assurance Plan	20
	2.10	Spare Parts	20
	2.11	Preliminary Work	20
	2.12	Assigned Equipment	21
ARTICLE III		OWNER RESPONSIBILITIES	21
	3.1	Access to Site	21
	3.2	Owner’s Representative	21
	3.3	Review of Deliverables	22
	3.4	Payment of Contract Price	22
	3.5	Compliance with Laws	22
	3.6	Permits	22
	3.7	Owner-Furnished Equipment	22
	3.8	Coordination with Utility	22
ARTICLE IV		SCHEDULE, COMPLETION, INSPECTION AND PERFORMANCE	22
	4.1	Project Schedule	22
	4.2	Contractor Schedule and Reports	23
	4.3	Mechanical Completion	24
	4.4	Installed Nameplate Capacity Inspection	25
	4.5	Substantial Completion	26
	4.6	Final Acceptance	28
	4.7	Delay Damages	30
	4.8	Performance Tests	30
	4.9	Performance Tests and Performance Liquidated Damages	31
	4.10	Liquidated Damages Not a Penalty	33
	4.11	Inspection	33
	4.12	Work Notwithstanding Disputes	33

TABLE OF CONTENTS

(Continued)

Page

ARTICLE V		COMPENSATION AND PAYMENT	33
	5.1	Contract Price	33
	5.2	Taxes, Royalties and License Fees	34
	5.3	Payment Schedule	34
	5.4	Payments Not Acceptance of Equipment or Services	35
	5.5	Withholding	36
	5.6	Payment and Performance Bonds	36
	5.7	Releases and Waivers	37
	5.8	Removal of Liens	38
	5.9	Set-Off	38
	5.10	Lien Agent Information	38
	5.11	Parent Guarantee	38
ARTICLE VI		TITLE; LOSS OR DAMAGE; FORCE MAJEURE	38
	6.1	Title	38
	6.2	Rights in Drawings, Etc	39
	6.3	Risk of Loss	39
	6.4	Force Majeure	39
	6.5	Suspension of Work	40
	6.6	Stop Work Directive	40
ARTICLE VII		CHANGES	41
	7.1	Change Orders	41
	7.2	Contractor Proposed Change Orders	41
	7.3	Compensation for Change Orders	42
	7.4	Differing Site Conditions	42
	7.5	Concurrent Delay	42
ARTICLE VIII		WARRANTIES	42
	8.1	Warranties	42
	8.2	Warranty Period	43
	8.3	Remedies	43
	8.4	Warranty Exclusions	44
	8.5	Subcontractors’ and Vendors’ Warranties	45
	8.6	NO IMPLIED WARRANTIES	45
ARTICLE IX		LIMITATIONS ON LIABILITY	45
	9.1	Aggregate Limit of Liability	45
	9.2	Direct Damages Only	46
	9.3	Intent	46
ARTICLE X		INDEMNIFICATION	47
	10.1	Contractor Indemnity	47
	10.2	Intellectual Property Indemnity	47

TABLE OF CONTENTS

(Continued)

Page

	10.3	Environmental Indemnity	48
	10.4	Owner’s Indemnity	48
	10.5	Defense of Claims	49
ARTICLE XI		INSURANCE	49
	11.1	Contractor Insurance	49
	11.2	Subcontractor Insurance	51
	11.3	Additional Requirements	51
	11.4	Builders All-Risk Insurance	53
ARTICLE XII		DEFAULT AND REMEDIES; TERMINATION	54
	12.1	Owner Events of Default	54
	12.2	Contractor Events of Default	55
	12.3	Contractor Remedies upon Owner Event of Default	56
	12.4	Owner Remedies upon Contractor Event of Default	57
	12.5	Termination for Convenience	57
	12.6	Mitigation upon Breach	58
	12.7	Termination Prior to NTP	58
ARTICLE XIII		ASSIGNMENT	58
	13.1	General	58
	13.2	Permitted Assignments	58
ARTICLE XIV		REPRESENTATIONS	59
	14.1	General Representations and Warranties	59
	14.2	Additional Representations and Warranties of Contractor	60
	14.3	Title Company Representations	60
	14.4	Financing Assistance	61
ARTICLE XV		NOTICES; INFORMATION	61
	15.1	Notices	61
	15.2	Technical Communications	62
	15.3	Public Announcements	62
ARTICLE XVI		MISCELLANEOUS	62
	16.1	Entire Agreement	62
	16.2	Waiver	63
	16.3	Dispute Resolution	63
	16.4	Confidentiality	64
	16.5	Signage	64
	16.6	Governing Law	64
	16.7	Consent to Jurisdiction	65
	16.8	Waiver of Jury Trial	65
	16.9	Time of Performance	65

iii

TABLE OF CONTENTS

(Continued)

Page

16.10	Construction	65
16.11	Headings	65
16.12	Status of the Parties	65
16.13	Parties in Interest	65
16.14	Further Assurances	66
16.15	Amendments	66
16.16	Severability	66
16.17	Conflicting Provisions	66
16.18	Survival	66
16.19	Counterparts	66

EXHIBITS

Exhibit A	-	The Facility
Exhibit B	-	Contractor’s Scope of Work
Exhibit C-1	-	Contractor Permits
Exhibit C-2	-	Owner Permits
Exhibit D	-	Contractor’s Security and Safety Procedures
Exhibit E	-	Payment Schedule
Exhibit F 1	-	Form of Conditional Waiver and Release on Progress Payment
Exhibit F 2	-	Form of Unconditional Waiver and Release on Progress Payment
Exhibit F 3	-	Form of Conditional Waiver and Release on Final Payment
Exhibit F 4	-	Form of Unconditional Waiver and Release upon Final Payment
Exhibit G	-	Project Schedule
Exhibit H	-	Form of Change Order
Exhibit I	-	Site Description
Exhibit J	-	Mechanical Completion Certificate
Exhibit K	-	Substantial Completion Certificate
Exhibit L	-	Final Acceptance Certificate
Exhibit M	-	Form of Invoice
Exhibit N	-	Contractor’s Quality Assurance Plan
Exhibit O	-	List of Preapproved Major Subcontractors
Exhibit P	-	Spare Parts
Exhibit Q-1	-	Geotechnical Report
Exhibit Q-2	-	Environmental Report
Exhibit R	-	Performance Testing
Exhibit S	-	List of Required Deliverables
Exhibit T	-	Manufacturer Warranties
Exhibit U	-	Form of Warranty Assignment Agreement
Exhibit V	-	Contractor’s Key Personnel
Exhibit W	-	Form of Progress Report
Exhibit X-1	-	Owner-Furnished Equipment
Exhibit X-2	-	Description of Preliminary Work
Exhibit Y	-	Commissioning Procedures
Exhibit Z	-	Form of Purchase Order Assignment
Exhibit AA	-	Form of Parent Guarantee

SOLAR POWER FACILITY ENGINEERING,
PROCUREMENT AND CONSTRUCTION AGREEMENT

This SOLAR POWER FACILITY ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT (this “ Agreement ”), dated as of July 29, 2016 (the “ Effective Date ”), is entered into by and between Grupo Gransolar, LLC, a Delaware limited liability company (“ Contractor ”), and Innovative Solar 31, LLC, a North Carolina limited liability company (“ Owner ”), with reference to the following matters:

RECITALS

WHEREAS, Owner owns, leases, or otherwise controls certain real property, as more fully described in Exhibit I hereto, for the purpose of constructing and operating an on-site solar photovoltaic facility.

WHEREAS, Contractor designs, constructs and installs photovoltaic facilities and as such is able to design, engineer and construct the Facility (defined below) and all the necessary ancillary systems to produce electric energy.

WHEREAS, Owner desires to retain Contractor to provide, and Contractor desires to provide, complete fixed-price turnkey design, engineering, procurement, construction and installation of the Facility, as set forth in this Agreement.

WHEREAS, prior to the Effective Date, Owner engaged Alpha Alternative Energy, Inc., a Nevada corporation (“ Preliminary Work Provider ”), to perform certain work, detailed in Exhibit X-2, for or on behalf of IS-31 Holdings, LLC, a Delaware limited liability company and the sole member of Owner as of the Effective Date, or its Affiliates (collectively, the “ Owner Affiliate ”) relating to the Facility (the “ Preliminary Work ”). Owner and Contractor now desire that such Preliminary Work be incorporated in the scope of the Contractor’s services, subject to and in accordance with the terms of this Agreement.

WHEREAS, on the Effective Date, Owner, Owner Affiliate and Contractor are executing and delivering the Purchase Order Assignment (as defined below) to assign and transfer to Contractor all of the rights, obligations and liabilities under certain purchase orders, warranties and other agreements and all of the right, title and interest in certain items of equipment covered thereby (the “ Assigned Equipment ”), and Owner and Contractor intend for the Assigned Equipment to be included within the scope of this Agreement, subject to and in accordance with the terms hereof.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Owner and Contractor, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS; interpretation; exhibits

1.1 Defined Terms . Capitalized terms used in this Agreement without other definition shall have the meanings specified in this Section 1.1 , unless the context requires otherwise.

“ Additional Insureds ” has the meaning set forth in Section 11.1(i)(1) .

“ Affiliate ” means, with respect to any Person, any other Person controlling, controlled by or under common control with such first Person. For purposes of this definition and the Agreement, the term “control” (and correlative terms) means the right and power, directly or indirectly through one or more intermediaries, to direct or cause the direction of substantially all of the management and policies of a Person through ownership of voting securities or by contract, including, but not limited to, the right to fifty percent (50%) or more of the capital or profits of a partnership or, alternatively, ownership of fifty percent (50%) or more of the voting stock of a corporation.

“ Agreement ” has the meaning set forth in the preamble to this Agreement, and shall include all Exhibits hereto.

“ Articles ” means ARTICLES 1 through 16 of this Agreement.

“ Assigned Equipment ” has the meaning set forth in the Recitals to this Agreement.

“ Business Day ” means any day other than a Saturday, Sunday or any other day on which banking institutions in North Carolina are not open for the transaction of normal banking business.

“ Capacity Test ” means the capacity test set forth in Exhibit R .

“ Change in Law ” means the enactment, adoption, promulgation, modification (including a change in interpretation by a Governmental Authority with jurisdiction over the Parties or the Project) or repeal of any applicable Law or Permit after the Effective Date.

“ Change Order ” means a written order signed by Owner and Contractor authorizing a change in the Work and an adjustment in the completion dates for performance or delivery of the Work.

“ Claims ” has the meaning set forth in Section 10.1 .

“ Completion Cost ” means the total (and reasonably documented) expenses actually incurred in completing the Work following or in connection with the termination of this Agreement pursuant to Section 12.4 , including (i) all reasonably incurred amounts charged by any replacement contractor to finish the Work based on the obligations such replacement contractor assumes under this Agreement and under any of Contractor’s subcontract(s) or other contractual agreement(s) that Owner elects to have assigned to such replacement contractor, plus, to the extent accrued as of the date of termination of this Agreement due to a Contractor Event of Default, any Delay Damages payable to the Owner pursuant to this Agreement, (ii) additional reasonable and necessary overhead incurred by Owner to effect such takeover and to complete the Work, and (iii) any termination and cancellation charges Owner is assessed by third parties resulting from Owner’s termination of Contractor.

“ Contract Documents ” means this Agreement together with all Exhibits referenced or attached and any Change Orders.

“ Contract Price ” has the meaning set forth in Section 5.1 .

“ Contractor ” has the meaning set forth in the preamble to this Agreement.

“ Contractor Event of Default ” has the meaning set forth in Section 12.2 .

“ Contractor Indemnified Parties ” means (i) Contractor and Guarantor, (ii) any Affiliate of a Person described in clause (i), and (iii) any director, officer, partner, member, manager, agent or employee of a Person described in clause (i) or (ii).

“ Contractor Permits ” has the meaning set forth in Section 2.5(g) .

“ Contractor Personnel ” means Contractor’s employees, consultants, independent contractors, agents and representatives.

“ Delay Damages ” has the meaning set forth in Section 4.7 .

“ Direct Costs ” means Contractor’s actual and verifiable (and reasonably documented) direct cost of labor (including home office labor directly performing the Work), support labor, material, Equipment, services, tools, supplies, subcontracts, jobsite facilities, utilities, jobsite general conditions costs, jobsite overhead, and jobsite staffing necessary to perform the Work, plus ten percent (10%) of the foregoing amounts for overhead and profit; provided that, for the avoidance of doubt, “Direct Costs” shall not include profit or overhead (other than jobsite overhead), except for the ten percent (10%) for overhead and profit specifically set forth above.

“ Disclosing Party ” has the meaning set forth in Section 16.4(a) .

“ Effective Date ” has the meaning set forth in the preamble to this Agreement.

“ Environmental Report ” means that certain environmental site assessment and report dated May 19, 2016 prepared by Alpha Environmental Sciences, Inc. prepared with respect to the Site, which is attached hereto as Exhibit Q-2 .

“ Environmental Attributes ” has the meaning set forth in Section 2.5(k)(i) .

“ Environmental Law ” means any Laws and any amendments thereto (whether common law, public law, rule, order, regulation, or otherwise), directives, judgments, and other requirements promulgated or entered into by any Governmental Authority relating to the environment, human health, public safety, protected animal or plant species, cultural resources, preservation or reclamation of natural resources, or to the management, handling, use, generation, treatment, storage, transportation, disposal, manufacture, distribution, formulation, packaging, labeling, Release or threatened Release of or exposure to Hazardous Materials, whether now existing or subsequently amended or enacted and in effect, including but not limited to: CERCLA, 42 U.S.C. § 9601, et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300(f) et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. § 136 et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., and any similar or implementing state or local Law, all amendments or regulations promulgated thereunder; and any applicable standard of conduct under any common law doctrine, including but not limited to, negligence, nuisance, or trespass, personal injury, or property damage related to or arising out of the presence, Release, or exposure to Hazardous Materials.

“ Equipment ” means all of the equipment, materials, apparatus, structures, supplies and other goods required to complete the Work and to be incorporated into the Facility as described in Exhibit B as well as any other equipment, materials, apparatus, structures, supplies and other goods required to complete the Facility in accordance with the requirements of this Agreement, including all Assigned Equipment and Owner-Furnished Equipment. Equipment shall not include any materials, apparatus or tools owned by Contractor or any Subcontractor that are used to complete the Work but are not contemplated under this Agreement to become part of the Work.

“ Equipment Documentation ” means copies or originals of (i) all operating specifications, warranties and other similar information obtained by Contractor from Equipment vendors or prepared by Contractor as part of the design, construction and/or installation services provided by Contractor hereunder, (ii) a complete inventory list of all Equipment comprising the Facility, and (iii) all documentation and identification information with respect to all Equipment comprising part of the Facility, including the Equipment listed in Exhibit B , but excluding with respect to Owner-Furnished Equipment.

“ Exhibits ” means the Exhibits comprising part of this Agreement referenced and listed in the Table of Contents.

“ Expected Capacity ” means the expected capacity of the Facility as set forth in Exhibit A .

“ Facility ” means the solar electric generating facility set forth on Exhibit A , including its integrated assemblies of photovoltaic panels, mounting assemblies, inverters, converters, metering, transformers, disconnects, combiners, switches, wiring devices and wiring, to be located at the Site and to be Interconnected with the Utility, as more specifically described in Exhibit A and Exhibit B .

“ Facility Lender ” means any lenders or other third parties (including cash equity and Tax equity providers) providing Financing, and any trustee or agent acting on their behalf.

“ Final Acceptance ” has the meaning set forth in Section 4.6(a) .

“ Final Acceptance Certificate ” means a notice in the form attached as Exhibit L delivered by Contractor to Owner pursuant to Section 4.6(b) indicating that, in Contractor’s opinion, the Facility has satisfied the requirements for Final Acceptance.

“ Final Acceptance Date ” means the date on which the Facility achieves Final Acceptance pursuant to Section 4.6(b) , as set forth in a Final Acceptance Certificate.

“ Financing ” means any construction financing, term financing or equity financing or other credit support provided by any Facility Lender in connection with the Facility.

“ Force Majeure Event ” means the occurrence of any act or event that delays or prevents a Party from timely performing obligations under this Agreement or from complying with conditions required under this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided by, and is beyond the reasonable control of and without the fault or negligence of, the Party relying thereon as justification for such delay, nonperformance, or noncompliance, which includes, to the extent that the foregoing conditions are satisfied, an act of God or the elements, weather conditions for the relevant area that are sufficient to cause work stoppage for safety reasons or other stoppage to avoid catastrophic results, explosion, fire, epidemic, landslide, mudslide, sabotage, terrorism, lightning, earthquake, flood, volcanic eruption or similar cataclysmic event, an act of public enemy, war, blockade, civil insurrection, riot, civil disturbance, strike or other labor difficulty and labor disputes that are national or regional in scope, Change in Law (including but not limited to the imposition of, or increase of, any Taxes, fees or duties imposed on Equipment that is imported into the United States) or actions or failures to act of any Governmental Authority that are national or regional in scope. However, financial cost alone or as the principal factor (other than with respect to a Change in Law) shall not constitute grounds for a claim of force majeure. Notwithstanding anything in the foregoing to the contrary, Force Majeure Events shall not include any of the following:

(a) mechanical or Equipment failures (except to the extent such events or conditions themselves are caused by a Force Majeure Event);

(b) any condition at the Site for which the affected Party is responsible under this Agreement including but not limited to lost Equipment or damage to the Site;

(c) increases in the cost of performance of a Party’s obligations under this Agreement, and changes in market conditions, other than increased costs incurred in responding to a Force Majeure Event or as a result of a Change in Law;

(d) any labor disturbance, strike or dispute specific to Contractor’s or any Subcontractor’s workers or personnel or specific to the Site;

(e) any delay in obtaining, inability or failure to obtain, suspension, non-renewal or cancellation of, any Permit to the extent caused by the Contractor’s failure to timely submit a final, complete permit application, renew such Permit, or provide any requested responses thereto in accordance with Prudent Industry Standards;

(f) any concealed or latent natural subsurface condition at the Site whether or not it is identified in a Geotechnical Report;

(g) any surface or subsurface structures, materials, properties or conditions having historical, cultural, archaeological, religious or similar significance that are identified in the Permits or the Exhibits attached to this Agreement; and

(h) any habitat of an endangered or protected species as provided in applicable Law that were identified in the Permits or the Exhibits attached to this Agreement.

“ Geotechnical Report ” means the geotechnical reports attached as Exhibit Q-1 .

“ Good Utility Practice ” means, with respect to the performance by Contractor of its obligations under this Agreement, the range of practices, methods and acts engaged in or approved by a significant portion of the solar power industry in the United States that, at a particular time, in the exercise of reasonable judgment in light of the facts known or that should reasonably have been known at the time a decision was made, would have been expected to accomplish the desired result in a manner consistent with applicable Law, regulation, codes, standards, Equipment manufacturer’s recommendations, reliability, safety, environmental protection, economy and expedition. With respect to Contractor’s obligations under this Agreement, Good Utility Practice includes, but is not limited to, taking reasonable steps to ensure that:

(a) Equipment (other than Owner-Furnished Equipment), materials, resources and supplies are available to meet the Contractor’s obligations under this Agreement;

(b) the Equipment (other than Owner-Furnished Equipment) will function properly under both normal and emergency conditions at the Facility;

(c) appropriate monitoring and testing as set forth in the Scope of Work are performed to ensure Equipment is functioning as designed;

(d) to the extent Contractor is obligated to operate the Facility under this Agreement, the Equipment is not operated in a negligent manner, or in a manner unsafe to workers, the general public, or contrary to applicable Law or regulations or without regard to defined limitations such as flood conditions, safety inspection requirements, operating voltage, current, frequency, polarity, synchronization, and/or control system limits;

(e) Equipment will operate at its expected performance level; and

(f) Contractor’s performance of its obligations under this Agreement complies, in all material respects, with the requirements of each of the Interconnection Agreement, the Power Purchase Agreement, the Solar Lease and all Permits, to the extent that such requirements are directly applicable to Contractor’s Scope of Work under this Agreement.

“ Governmental Authority ” means any United States national, regional or local government, any political subdivision thereof, or any governmental, quasi-governmental, regulatory, judicial or administrative agency, authority, commission, board or similar entity having jurisdiction over the performance of the Work, the Facility or their operations, or the Site or otherwise over any Party, including any applicable independent system operator or regional transmission organization, the Federal Energy Regulatory Commission, and the North American Electric Reliability Corporation.

“ Guaranteed Capacity ” has the meaning set forth in Exhibit R .

“ Guaranteed Mechanical Completion Date ” means, with respect to the Facility, December 30, 2016, as such date may be adjusted pursuant to this Agreement.

“ Guaranteed PR ” has the meaning set forth in Exhibit R .

“ Guaranteed Substantial Completion Cliff Date ” means January 30, 2017.

“ Guaranteed Substantial Completion Date ” means, with respect to the Facility, January 30, 2017, as such date may be adjusted pursuant to this Agreement.

“ Guarantor ” means Grupo Gransolar S.L., a Spanish limited liability company.

“ Hazardous Material ” means (i) any asbestos and any asbestos containing material; (ii) any substance that is then defined or listed in, or otherwise classified pursuant to, any Environmental Law or any other applicable Law as a “hazardous substance,” “hazardous material,” “hazardous waste,” “infectious waste,” “toxic substance,” “toxic pollutant” or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity or Toxicity Characteristic Leaching Procedure (TCLP) toxicity; (iii) any petroleum and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; and (iv) any petroleum product, polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive material (including any source, special nuclear, or by-product material), medical waste, chlorofluorocarbon, lead or lead-based product.

“ Independent Engineer ” means DNV GL, or any other engineering firm with experience in the design and construction of solar energy projects selected and retained by Owner or any Facility Lenders.

“ Installed Nameplate Capacity ” has the meaning set forth in Section 4.4 .

“ Interconnected ” and “ Interconnection ” means the Facility is connected to the Utility’s transmission system.

“ Interconnection Agreement ” means that certain North Carolina Interconnection Agreement dated as of October 17, 2014 by and between Owner and the Utility, a copy of which Contractor acknowledges has been provided by Owner to Contractor.

“ Interest Rate ” means an annual rate equal to the lesser of (a) the “prime rate” (as published in the Wall Street Journal) from time to time plus two percent (2%), and (b) the highest rate permitted by applicable Law.

“ ITC ” means the investment Tax credit under Section 48 of the Internal Revenue Code.

“ Law ” means any constitution, charter, act, statute, law, ordinance, code, rule, regulation, order, or other legislative or administrative action of any Governmental Authority or a final decree, judgment or order of a court or tribunal, including the requirements set forth in engineering, construction, electrical, safety and similar codes and standards.

“ Legal Requirement ” means the requirements of any Law, including any Environmental Law, Tax, or any Permit.

“ Limited Notice to Proceed ” or “ LNTP ” has the meaning set forth in Section 4.1(a) .

“ Liquidated Damages Aggregate Cap ” has the meaning set forth in Section 9.1(a)(iii) .

“ LNTP Scope of Work ” means pre-construction, design and engineering services to be further described in the LNTP that may be issued by Owner.

“ Major Equipment ” has the meaning set forth in Section 8.1 .

“ Major Subcontract ” has the meaning set forth in Section 2.6(c) .

“ Major Subcontractor ” means each counterparty to a Major Subcontract.

“ Mechanical Completion ” has the meaning given in Section 4.3(b) .

“ Mechanical Completion Certificate ” means the notice in the form attached as Exhibit J delivered by Contractor to Owner pursuant to Section 4.3(c) indicating that, in Contractor’s opinion, the Facility has satisfied the requirements for Mechanical Completion.

“ Mechanical Completion Date ” means the date on which the Facility achieves Mechanical Completion, as set forth in a Mechanical Completion Certificate.

“ Minimum Guaranteed PR ” has the meaning set forth in Exhibit R .

“ MWAC ” means AC (nameplate) megawatt.

“ MWDC ” means DC (peak) megawatt.

“ Notice to Proceed ” or “ NTP ” has the meaning set forth in Section 4.1(b) .

“ O&M Manual ” has the meaning set forth in Section 2.5(m) .

“ Owner ” has the meaning set forth in the preamble to this Agreement.

“ Owner Caused Delay ” means a failure (other than (i) any failure that does not materially delay Contractor’s performance of any item of Work, and (ii) any failure related to a breach by Contractor of its obligations under this Agreement) by Owner to perform any of its obligations under this Agreement, including without limitation (a) any failure by Owner to achieve any of the critical path items that are the responsibility of Owner under this Agreement, including the timely delivery of Owner-Furnished Equipment and timely acquisition of Owner Permits, (b) any failure to ensure sufficient on site Owner representatives when requested by Contractor for testing observation, (c) any delays (whether by Owner or Utility or any other Person other than Contractor or any Subcontractor) with respect to construction or completion of any Interconnection facilities or network upgrades necessary for interconnecting the Facility (including the Utility’s failure to energize the substation on or before December 16, 2016) or any telemetry required for the Facility (including T-1 lines) and (d) any event or circumstance that is identified in this Agreement as an Owner Caused Delay.

“ Owner Event of Default ” has the meaning set forth in Section 12.1 .

“ Owner-Furnished Equipment ” shall mean the Equipment identified in Exhibit X-1 .

“ Owner Indemnified Parties ” means (i) Owner, its parent and the Facility Lenders, (ii) any Affiliate of a Person described in clause (i), and (iii) any director, officer, partner, member, manager, agent or employee of a Person described in clause (i) or (ii).

“ Owner Permits ” has the meaning set forth in Section 3.6 .

“ Owner’s Representative ” means the employee of Owner (or Owner’s Affiliate) designated by Owner in accordance with Section 3.2 to act as Contractor’s primary point of contact.

“ Parent Guarantee ” has the meaning set forth in Section 5.11 .

“ Parties ” means Owner and Contractor.

“ Party ” means Owner or Contractor.

“ Payment Bond ” has the meaning set forth in Section 5.6(a) .

“ Payment Schedule ” means the payment schedule set forth in Exhibit E , according to which the Contractor earns progress payments against the Contract Price during the Work in accordance with the provisions of Section 5.3 .

“ Performance Bond ” has the meaning set forth in Section 5.6(a) .

“ Performance Improvement Period ” has the meaning set forth in Section 4.9(b)(i) .

“ Performance Liquidated Damages ” means the liquidated damage amounts payable by Contractor in respect of the performance of the Facility pursuant to Section 4.9(b)(ii) or Section 4.9(b)(iv) as the case may be.

“ Performance Ratio Test ” means the performance ratio test set forth in Exhibit R .

“ Performance Tests ” means the Capacity Test and the Performance Ratio Test.

“ Permits ” means all permits, licenses, authorizations, consents, orders, waivers, franchises, registrations, variances, extensions, filings, notifications, certificates, exemptions and approvals and other authorizations obtained from or made with any Governmental Authority.

“ Person ” means any individual, limited liability partnership, limited liability company, partnership, corporation, association, joint stock company, business, trust, estate, joint venture, unincorporated organization, government or political subdivision thereof, governmental agency or other entity.

“ Power Purchase Agreement ” means that certain Power Purchase Agreement dated as of June 30, 2015 by and between Owner and the Utility, a copy of which Contractor acknowledges has been provided by Owner to Contractor.

“ PR ” has the meaning set forth in Exhibit R .

“ Preliminary Work ” has the meaning set forth in the Recitals to this Agreement.

“ Preliminary Work Provider ” has the meaning set forth in the Recitals to this Agreement.

“ Project Manager ” means the Project Manager designated by Contractor pursuant to Section 2.5(f) .

“ Project Schedule ” means the schedule for the Work attached hereto as Exhibit G , as such schedule may be adjusted pursuant to this Agreement. References to the Project Schedule shall be deemed to include reference to the Guaranteed Mechanical Completion Date and the Guaranteed Substantial Completion Date, as the context requires.

“ Proprietary Interest ” has the meaning set forth in Section 10.2(a) .

“ Prudent Industry Standards ” means, with respect to Contractor’s performance of its obligations under this Agreement, at a particular time, in the exercise of reasonable judgment in light of the facts known, or that should have been known, at the time a decision was made, those practices, standards, designs, methods, means, techniques, equipment and acts that would require a Person to: (a) perform its duties in good faith and as a reasonably prudent contractor and in compliance with applicable Law and applicable Permits, (b) perform its duties in compliance with the requirements of the Solar Lease, the Interconnection Agreement and the Power Purchase Agreement in all material respects, (c) perform its duties in compliance with Good Utility Practices, (d) exercise such care, skill and diligence as a reasonably prudent business company of established reputation engaged in the solar energy business would exercise in the conduct of its business and for the advancement or protection of its own interests, (e) perform the duties in accordance with applicable United States solar energy industry standards, taking into account the requirements to qualify for the ITC under Section 48 of the Internal Revenue Code, (f) use sufficient and properly trained and skilled personnel, and (g) use parts and supplies that meet the specifications set forth in the Solar Lease, the Interconnection Agreement and the Power Purchase Agreement. Prudent Industry Standards are not intended to be the optimum practice, method or acts to the exclusion of all others, but rather are intended to be any of the practices, methods or actions generally accepted in the United States that meet the foregoing standards.

“ Punchlist ” means the list of Work uncompleted upon the achievement of Substantial Completion for the Facility, the lack of which or the failure of which to complete (considered individually and in the aggregate) does or will not adversely affect the safe, reliable, normal and continuous operation of the Facility in compliance with the requirements of this Agreement, Legal Requirements and Prudent Industry Practices.

“ Purchase Order Assignment ” means the Bill of Sale, Assignment and Assumption Agreement attached hereto as Exhibit Z .

“ Receiving Party ” has the meaning set forth in Section 16.4(a) .

“ Release ” or “ Released ” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing, or dumping into soil, surface water, ground water, land surface, subsurface strata, ambient air, wildlife, plants or other natural resources.

“ Relevant Matter ” has the meaning set forth in Section 11.3(k) .

“ Remedial Action Plan ” has the meaning set forth in Section 4.2(b) .

“ Retainage ” has the meaning set forth in Section 5.3(d) .

“ Review Date ” means the date that is forty five (45) days following the Effective Date.

“ Scope of Work ” means the Scope of Work attached hereto as Exhibit B .

“ Site ” means the real property on which the Facility will be located as further described in Exhibit I .

“ Site Conditions ” has the meaning set forth in Section 7.4 .

“ Solar Lease ” means, collectively, (i) that certain Lease between Owner and William R. Storms and wife Shelby H. Storms, dated October 20, 2015, as amended by Amendment of Lease dated January 22, 2016, and as further amended by Second Amendment of Lease dated July 19, 2016 and (ii) that certain Lease between Owner and Boyce Gerald White, Jr. and wife Katherine S. White, dated November 7, 2013, as amended by Amendment of Lease dated January 25, 2016, and as further amended by Second Amendment of Lease dated July 19, 2016, copies of which Contractor acknowledges have been provided by Owner to Contractor.

“ Spare Parts ” has the meaning set forth in Section 2.10 .

“ Subcontractor ” means any Person with whom Contractor enters into an arrangement for the performance of the Work or for the supply of services or Equipment to Contractor, including Persons at any tier with whom any Subcontractor has further subcontracted any part of the Work, and the legal or personal representatives, successors, and assigns of such Person; excluding , for the avoidance of doubt, suppliers of Owner-Furnished Equipment and the Preliminary Work Provider to the extent each such Person does not otherwise meet the requirements of this definition.

“ Substantial Completion ” has the meaning set forth in Section 4.5(a) .

“ Substantial Completion Certificate ” means a notice in the form attached as Exhibit K delivered by Contractor to Owner pursuant to Section 4.5(b) indicating that, in Contractor’s opinion, the Facility has satisfied the requirements for Substantial Completion.

“ Substantial Completion Cliff Liquidated Damages ” has the meaning set forth in Section 4.7 .

“ Substantial Completion Date ” means the date on which the Facility achieves Substantial Completion, as set forth in a Substantial Completion Certificate .

“ Tax ” means any federal, state, local, or foreign tax, charge, duty, fee, levy or other assessment, including income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, imposed by any taxing or Governmental Authority, and including any interest, penalty, or addition thereto, whether disputed or not or in respect to failure to comply with any requirement concerning Tax Returns.

“ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, required to be filed with any Governmental Authority, including any schedule or attachment thereto and including any amendment thereof.

“ Utility ” means Duke Energy Progress, LLC.

“ Warranty Period ” has the meaning set forth in Section 8.2 .

“ Work ” means all work to be performed by Contractor under this Agreement and, subject to Section 2.11 , the Preliminary Work, including, except as explicitly excluded, engineering and design, procurement, construction and erection, installation, training, start-up (including calibration, inspection and start-up operation), and testing with respect to the Facility on a turnkey basis as more fully set forth in Exhibit B . Work includes, except as explicitly excluded, (i) all labor, materials, equipment, services and any other items to be used by Contractor or its Subcontractors in the prosecution of this Agreement, wherever the same are being engineered, designed, procured, manufactured, delivered, constructed, installed, trained, erected, tested, started-up or operated during start-up and testing and whether the same are on or are not at the Site; (ii) all supervision and administration; and (iii) all related items which would be required of an engineering, procurement and construction contractor of projects of comparable size and design acting in accordance with Prudent Industry Standards which are necessary for the Facility to achieve Final Acceptance in accordance with the terms of this Agreement, the Power Purchase Agreement, the Interconnection Agreement, the Solar Lease and all applicable Legal Requirements. Subject to the foregoing, Contractor shall be responsible for providing any and all additional items and services which are not expressly included by the terms of this Agreement and which are required to achieve Final Acceptance, provided that such additional items and services may be reasonably inferred from the terms and conditions of this Agreement and the Scope of Work.

“ Work Product ” has the meaning set forth in Section 6.2 .

1.2 Interpretation . As used in this Agreement, the terms “herein,” “herewith” and “hereof” are references to this Agreement, taken as a whole, the terms “includes” or “including” shall mean “including, without limitation,” and references to a “Section,” “Article” or “Exhibit” shall mean a Section, Article or Exhibit of this Agreement, as the case may be, unless in any such case the context requires otherwise. All references to a given Exhibit, agreement, instrument or other document shall be a reference to that Exhibit, agreement, instrument or other document as modified, amended, supplemented and restated through the date as of which such reference is made. Except where a definition specifically refers to any Laws as in effect as of the Effective Date, references to Laws referenced in this Agreement refer to such Laws as they may be amended from time to time, and references to particular provisions of a Law include any corresponding provisions of any succeeding Law. A reference to a Person includes its permitted successors and permitted assigns. The singular shall include the plural, and the masculine shall include the feminine and neuter, and vice versa. Unless expressly specified otherwise, “day” means a calendar day. The expression “and/or” shall connote “any or all of.”

ARTICLE II

CONTRACTOR RESPONSIBILITIES

2.1 General Services of Contractor . Contractor shall, on a fixed-price turnkey basis, and except as explicitly excluded, design, engineer, procure all Equipment (other than Owner-Furnished Equipment), erect, install, start-up, commission and test the Facility, perform all obligations set forth in the Scope of Work and perform related activities for the successful completion of the Work and the delivery of the Facility in compliance with the Contract Documents. The Parties understand that Contractor is obligated to perform all tasks required by the Scope of Work or reasonably implied by the Scope of Work to be necessary to deliver to Owner the completed and fully operational Facility meeting the requirements of the Contract Documents. All Work performed by Contractor and all Subcontractors shall be performed in accordance with good engineering design practices, sound construction procedures, Legal Requirements and Prudent Industry Standards.

2.2 Compliance with Laws . Throughout the performance of all aspects of the Work, Contractor shall, at Contractor’s sole cost, comply with, and shall ensure that each Subcontractor complies with, all Legal Requirements.

2.3 Labor . Contractor shall provide and be solely responsible for all labor and personnel required in connection with the Work. Contractor shall comply with all applicable prevailing wage requirements, Davis Bacon requirements, labor agreements and collective bargaining agreements, if any, and all applicable Laws related to labor and employment.

2.4 Environmental Laws . Throughout performance of the Work, Contractor shall comply, and shall ensure that each Subcontractor complies with, all Permits and applicable Environmental Laws. Without limiting the generality of the foregoing, Contractor shall not: (i) Release or permit the Release of Hazardous Materials brought on to the Site or generated at the Site by Contractor or a Subcontractor in connection with the Work, or (ii) negligently Release pre-existing Hazardous Materials or Hazardous Materials brought to the Site by Owner, and shall, if any such Hazardous Materials are so Released, remediate and prevent the spread of such Hazardous Materials. In the event Contractor encounters material reasonably believed to be a Hazardous Material on the Site, Contractor shall immediately (i) stop work in the affected area and notify Owner of the condition and (ii) submit a plan for Owner’s approval for remediating such Hazardous Material. Upon approval of such plan by Owner, Contractor shall remediate such Hazardous Material in accordance with the approved plan and shall thereafter resume work in the affected area. Contractor is entitled to an adjustment to the Contract Price, the Project Schedule, or both of them, to reflect the effect of such remediation on the completion of the Work except (x) if the Hazardous Materials were brought on to the Site or generated at the Site by Contractor or a Subcontractor; (y) to the extent that the cost of or time for remediating Hazardous Materials are increased due to delays in commencing remediation or other mishandling of the remediation by Contractor or a Subcontractor; and/or (z) to the extent that any preexisting Hazardous Materials or Hazardous Materials brought to the Site by Owner are negligently Released by Contractor or a Subcontractor.

2.5 Specific Services of Contractor . Without limiting the generality of Section 2.1 , Contractor shall perform all of the following specific tasks in accordance with the Scope of Work in order to achieve Mechanical Completion, Substantial Completion and Final Acceptance for the Facility in accordance with this Agreement:

(a) Supply and Procurement of Equipment . Contractor shall procure or supply and pay for all of the Equipment (except for Owner-Furnished Equipment), shall arrange and pay for the delivery of all Equipment (except for Owner-Furnished Equipment) to the Site, and shall arrange and pay for the unloading and storage of all of the Equipment (including Owner-Furnished Equipment) at the Site. With respect to each Equipment supply agreement that (i) relates to inverters, racking equipment or mounting equipment or (ii) provides for payments in excess of $2,000,000, the Contractor shall provide Owner with an opportunity to comment on drafts of such Equipment supply agreement and Contractor shall use commercially reasonable efforts to incorporate any of Owner’s comments received by Contractor (but only to the extent such Owner comments are received within seven (7) days of such Equipment supply agreement being delivered to Owner);

(b) Engineering and Design . Contractor acknowledges and agrees that the Scope of Work sets forth Owner’s minimum design requirements for the Facility and the separate components, systems, items of Equipment, processes, and other portions of the Work. Except as explicitly excluded, Contractor shall at its own expense design and provide engineering services with respect to the Facility in a manner that shall be:

(1) consistent with the actual conditions existing at the Site;

(2) consistent with the requirements set forth in the Scope of Work;

(3) consistent with the requirements of the Solar Lease, the Power Purchase Agreement and the Interconnection Agreement;

(4) sufficient, complete and adequate in all respects necessary to enable the Facility (A) to satisfy the requirements of Substantial Completion by the Guaranteed Substantial Completion Date and (B) to satisfy the requirements of all applicable Permits; and

(5) in conformance with applicable Legal Requirements and Prudent Industry Standards.

Contractor shall provide all design and engineering drawings to Owner for its review. Owner shall have the right, but not the obligation, to review all design and engineering drawings, ask related questions and provide comments and shall do so within five (5) Business Days of receipt. Contractor shall consider, but shall have no obligation to accept, Owner’s comments; provided however , that (i) Owner may direct Contractor to make such changes to the design and engineering of the Facility as Owner reasonably believes are necessary by issuing a Change Order and (ii) Contractor shall address any comments which demonstrate that such drawings are not in compliance with the requirements of this Agreement. Unless required to comply with applicable Legal Requirements or Prudent Industry Standards, Contractor shall be entitled to an adjustment in the Contract Price, the Project Schedule, or both of them, in the event that the original design conformed to the Scope of Work and the change directed by Owner increases the cost of the Work or Contractor’s time of performance or both. No such review or requested changes shall impose any liability on Owner (other than to make payment in accordance with any applicable Change Order) or relieve Contractor of any of its ultimate responsibility for the design, engineering and performance of the Facility as provided in this Agreement.

(c) Construction and Installation . Contractor shall provide, install, complete and pay for all labor, Equipment, tools, supplies, construction equipment and machinery, utilities and consumables, transportation and other facilities and services (including any temporary materials, equipment, supplies and facilities) necessary for the proper execution and completion of the Work, except that Owner shall pay for and cause delivery of the Owner-Furnished Equipment that will be inspected, off loaded, stored, secured and installed by Contractor. All construction and installation performed by Contractor under this Agreement shall be in accordance with the given manufacturer’s written instructions and the specific instructions of the manufacturer’s representative, unless otherwise agreed by Owner in advance in writing, sound construction procedures, Prudent Industry Standards and all Legal Requirements.

(d) Utilities . Contractor shall provide and pay for all of the utilities used or required at the Site in connection with the installation, start-up, commissioning and final completion of the Facility.

(e) Equipment Documentation and Equipment Training . On or before the Final Acceptance Date for the Facility, Contractor shall provide Owner with all Equipment Documentation for the Facility. On or before the Substantial Completion Date for the Facility, Contractor shall provide Owner’s (or its operator’s) personnel with up to five (5) days of on-site training, pursuant to a training schedule to be mutually agreed by the Parties prior to Mechanical Completion, in the use and operation of the Equipment incorporated into the Facility. The cost of providing such training shall be included within the Contract Price. The cost of providing personnel to be trained (including the costs of required personal protective equipment, meals and transport and incidental items) shall be Owner’s cost. All training shall be provided in English. Owner shall ensure that all personnel to be trained by Contractor pursuant to this Section (e) shall be skilled labor or technicians, with a minimum of five (5) years’ work experience (or such lesser period as may be agreed by the Parties).

(f) Project Management . Exhibit V contains a list of Contractor’s key personnel and their respective positions. Contractor shall not replace any of the key personnel in the positions listed in Exhibit V without the prior written consent of Owner, which consent shall not be unreasonably withheld. Contractor’s Project Manager shall act as Contractor’s liaison with Owner and shall have the authority to administer this Agreement on behalf of Contractor and bind Contractor. Contractor’s Project Manager shall have overall day-to-day responsibility for managing and directing the performance of the Work and shall issue and receive communications on Contractor’s behalf under this Agreement. In addition to the key personnel required hereunder, Contractor’s construction management staff shall include site engineering staff, contract administration staff, project controls, construction specialists, safety, environmental and quality control personnel, and such other personnel as Contractor may require to manage performance of the Work.

(g) Permits . Contractor shall obtain (including as assignee or successor in interest to the Preliminary Work Provider), before required under any Law, including Environmental Law, and maintain in full force and effect and pay for the following Permits (the “ Contractor Permits ”): (i) all the Permits listed in Exhibit C-1 , (ii) all other Permits necessary for Contractor and any Subcontractor to do business in the jurisdiction where the Facility is located and the Work is to be performed, and (iii) all other Permits required to be obtained to perform the Work, including all Permits required to be obtained in the name of Owner with respect to the Work or the construction, commissioning, start-up, testing, or energization of the Facility. In connection with the foregoing, Contractor shall promptly following the Effective Date apply to become a licensed contractor in the State of North Carolina. During the pendency of the issuance of such license, Owner shall provide Contractor with such reasonable assistance as Contractor may request to assist Contractor in performing the Work; provided, however, that such assistance shall not include any obligation on Owner to amend the Scope of Work or Contractor’s responsibility therefor, and Owner’s actions with respect to same shall not be deemed to be an Owner Caused Delay. For the avoidance of doubt, Contractor’s delay in or failure to obtain the State of North Carolina contractor license described herein shall not be construed to be a Force Majeure Event. Notwithstanding the foregoing, Contractor shall not be required to obtain the Owner Permits. Contractor shall promptly provide Owner with copies of all Contractor Permits upon Contractor’s obtaining such Contractor Permits. In order to assist Contractor in obtaining the Contractor Permits, Owner shall provide Contractor with such reasonable assistance as Contractor may request. Contractor shall conduct the Work in compliance with the Permits and shall be responsible for the satisfaction of all conditions set forth in the Permits except to the extent otherwise indicated on Exhibit C-1 or Exhibit C-2.

(h) Security; Safety . Contractor shall be responsible for the security of the Work and all materials and Equipment prior to Substantial Completion and shall coordinate with Owner for the ingress and egress of Contractor’s personnel to and from the Site. Contractor shall comply with, and require all Subcontractors to comply with, the security and safety procedures set forth in Exhibit D .

(i) Local and General Conditions . Contractor acknowledges and agrees that it has satisfied itself as to the general and local conditions and circumstances affecting the Work, including technical information and requirements, conditions affecting transportation, disposal, handling and storage of materials at the Site, availability and conditions of roads, availability of housing, climatic conditions and seasons, physical conditions at the Site, topography and ground surface materials to be encountered, Permits delivered by Owner to Contractor prior to the Effective Date, geotechnical conditions as described in the Geotechnical Report, the Site Conditions and Equipment and facilities needed for performance of the Work, construction, installation or operation of the Facility. Contractor shall only use the entrances to the Site specified by Owner for ingress and egress of all personnel, Equipment, and vehicles. Contractor shall perform the Work consistent and in accordance with Owner’s rights under the Solar Lease and Owner’s real property rights in and to the Site to the extent Owner has brought any restrictions or specific requirements to Contractor’s attention prior to execution of this Agreement. Contractor’s failure to acquaint itself with the general or local condition or circumstances affecting the Work existing as of the date of this Agreement as set forth above shall neither relieve it from the responsibility for successfully performing this Agreement, nor entitle Contractor to an adjustment to the Contract Price or Project Schedule.

(j) Other Activities . Contractor shall not (i) create or place, or suffer to exist, any liens, security interests or other encumbrances on the Facility, the Equipment or the Site arising out of the performance of the Work other than mechanic’s liens or similar liens or security interests arising by operation of Law for the sole purpose of securing Owner’s obligation to pay Contractor for Work performed hereunder provided that Contractor complies with its obligations under Section 5.8 with respect thereto, or (ii) except as expressly provided in this Agreement without the express prior written consent of Owner, take any action that is permitted for Owner or exercise any right or remedy of Owner under the Power Purchase Agreement, the Solar Lease or Interconnection Agreement.

(k) Ownership of Green Attributes .

(i) Contractor acknowledges that Owner shall own, and may assign or sell in its sole and absolute discretion, all right, title and interest in all green attributes, renewable energy credits, production, investment and/or energy Tax credits (or grants in lieu of) and/or any other environmental financial incentives or similar financial rebates or incentives associated with or resulting from the development, installation and ownership of the Facility or the production, sale, purchase or use of the energy output of the Facility (collectively “ Environmental Attributes ”). If any such Environmental Attributes are initially credited to or treated as owned by Contractor, Contractor shall cause, to the extent permissible under applicable Law, such Environmental Attributes to be assigned or transferred to Owner without delay or otherwise pay to Owner the financial benefit of any such Environmental Attributes obtained by Contractor.

(ii) Contractor shall provide reasonable assistance to Owner in the preparation and submittal of all documents necessary to participate in or obtain any Environmental Attributes available to Owner and/or Utility. Contractor shall provide reasonable assistance to Owner in Owner’s efforts to meet the requirements for any certification, registration, or reporting program relating to Environmental Attributes.

(iii) Contractor’s obligation to assist Owner or Utility in connection with Environmental Attributes pursuant to clause (ii) above shall cease upon Final Acceptance.

(l) Condition of the Site . Contractor shall at all times comply with all requirements of Owner and Legal Requirements with respect to the use, occupancy and condition of the Site, including use of parking areas by Contractor and any Subcontractors, location and maintenance of storage and laydown areas used by the Contractor, and shall maintain the Site and all other areas used by the Contractor free from accumulation of waste material or rubbish, and shall, prior to Final Acceptance, remove any rubbish from the Site and all tools, scaffolding, equipment and unused materials. Contractor shall leave the Work and the Site in a clean, neat and workmanlike condition.

(m) O&M Manual . On or before the Substantial Completion Date for the Facility, Contractor shall deliver to Owner an operation and maintenance manual for the Facility (the “ O&M Manual ”) which shall contain all instruction manuals and special directions provided by Equipment manufacturers or vendors and all information necessary and appropriate for the start-up, operation, maintenance and repair of the Facility, including complete Equipment and system instructions and procedures for the start-up, operation, maintenance and repair of the Facility. The O&M Manual shall be consistent with Prudent Industry Standards and Legal Requirements.

(n) Deliverables . Contractor shall timely provide to Owner all deliverables and written materials required to be delivered hereunder and as set forth in Exhibit S .

2.6 Subcontractors . Contractor may employ Subcontractors for the performance of portions of the Work; provided , that Contractor obtains Owner’s prior written approval of each Major Subcontractor, which approval shall not be unreasonably withheld or delayed. A list of Major Subcontractors preapproved by Owner is set forth in Exhibit O . Contractor shall be fully responsible and liable for all Work performed by, and all acts or omissions, of each Subcontractor. Contractor shall ensure that all Subcontractors performing Work at the Site shall be licensed as required by Laws applicable at the Site. Contractor shall promptly pay when due under the applicable subcontracts all undisputed amounts payable to its Subcontractors. Contractor shall cause its Subcontractors not to create or place any liens, security interests or other encumbrances on the Facility, the Equipment or the Site other than mechanic’s liens or similar liens or security interests arising by operation of law for the sole purpose of securing Contractor’s obligation to pay a Subcontractor for Work performed hereunder provided that Contractor complies with its obligations under Section 5.8 with respect thereto.

(a) No Privity with Subcontractors . Owner shall not be deemed by virtue of this Agreement to have any contractual obligation to, or relationship with, any Subcontractor, and, except as otherwise expressly stated herein, all Work shall be performed solely by Contractor and its Subcontractors.

(b) Review Not Relief of Contractor’s Liability . Any Owner inspection permitted or required under this Agreement of any portion of the Work, either completed or in progress, shall not relieve Contractor of any duties, liabilities or obligations under this Agreement.

(c) Major Subcontract Review . Contractor shall promptly notify Owner if any contract with a Subcontractor has a contract price or anticipated value in an amount that is equal to or greater than two million dollars ($2,000,000) (each such contract with a Subcontractor a “ Major Subcontract ”). Contractor shall provide Owner with a list of all Major Subcontracts within sixty (60) days after the Effective Date and shall update such list on a monthly basis thereafter. Contractor shall deliver to Owner an unpriced copy of each Major Subcontract, which may also exclude other commercially confidential information. The review by Owner regarding any Subcontractor or subcontract shall not relieve Contractor of any of its duties, liabilities or obligations under this Agreement, and Contractor shall be liable hereunder for the performance, acts and omissions of such Subcontractors.

(d) Required Provisions in Major Subcontracts . Contractor shall cause each Major Subcontract and each supply agreement with a Subcontractor for Major Equipment to be assignable by Contractor to Owner and the Facility Lenders (as collateral security or absolutely) without the prior consent of such Subcontractor, in accordance with this Section 2.6(d) . Each such Major Subcontract and supply agreement shall provide that, upon notification to the Subcontractor from Owner that, (a) this Agreement has been terminated and (b) Owner or a designee thereof will thereafter be assuming Contractor’s future rights and obligations under such Major Subcontract or supply agreement, then such Subcontractor shall continue to perform all of its obligations under such Major Subcontract or supply agreement for the benefit of Owner or the Facility Lenders and shall recognize Owner or the Facility Lenders as being vested with all of the future rights and obligations of Contractor under such Major Subcontract or supply agreement; provided that Contractor shall maintain all rights and claims against each Subcontractor for the portion of Work previously performed. Notwithstanding the foregoing, it is specifically understood and agreed (and each Subcontractor shall so acknowledge in its subcontract) that no Subcontractor shall have any right to look to Owner or the Facility Lenders for the performance of Contractor’s obligations under any subcontract unless and until such Subcontractor has received notification that its subcontract has been transferred to Owner or such designee and then only with respect to future obligations under such subcontract.

2.7 Independent Contractor . Contractor shall be an independent contractor with respect to the Facility and the Work, and neither Contractor nor its Subcontractors nor the employees of either shall be deemed to be agents, representatives, employees or servants of Owner in connection with this Agreement. Owner shall not have the right to control, nor any actual, potential or other control over the methods and means by which Contractor or any of its agents, representatives, Subcontractors or employees conducts its independent business operations. The Parties covenant and agree that in the performance of the Work, Contractor shall not perform any act or make any representation to any Person to the effect that Contractor or any of its agents, representatives or Subcontractors, is the agent of Owner. Contractor, Subcontractors, and the employees of either shall have no right and shall make no claim under any employee plan or benefit plan or program of Owner or any of its Affiliates.

2.8 Security and Safety Procedures . Contractor shall hold the Contractor Personnel (when working at the Site) to the standards set forth in Exhibit D , including but not limited to the policies regarding drugs and alcoholic beverages set forth therein. Contractor shall promptly remove, and deny access to the Site to, any Contractor Personnel who violate such standards hereunder upon Owner’s request, and in any event within one (1) day of receipt of such request. In addition to the foregoing, in the event Owner believes that any Contractor Personnel is violating the standards of care and performance contained in this Agreement, upon notice from Owner, Contractor and Owner shall meet to discuss and mutually agree upon a resolution of such issues which may include the removal of such Contractor Personnel. Contractor shall promptly provide Owner with: (a) verbal notification of recordable accident(s) within 24 hours, (b) written accident reports for O.S.H.A. lost time and recordable accidents that occur at or in connection with construction of the Facility within seven (7) days of the accident, prepared in accordance with the safety and security assurance program approved by Owner pursuant to this Section, and (c) copies of all written communications with any Governmental Authority and insurance company (including any notices, written warnings, notice of violation, or cease and desist orders) with respect to accidents or inspections that occur at or in connection with construction of the Facility within seven (7) days of receipt by Contractor, and thereafter provide such written reports relating thereto as Owner may reasonably request.

2.9 Quality Assurance Plan . Contractor shall comply with and implement Contractor’s quality assurance plan, a copy of which is attached as Exhibit N .

2.10 Spare Parts . At any time prior to Substantial Completion, Owner may from time to time request that Contractor procure and deliver any of the items of Equipment set forth on Exhibit P (the “ Spare Parts ”) in such quantities as Owner may specify, and, to the extent such request is made at least thirty (30) days prior to Substantial Completion and it is commercially reasonable to procure the applicable Spare Parts within the period remaining until Substantial Completion, Contractor shall procure and deliver such requested Spare Parts as a condition to Substantial Completion. Owner shall pay Contractor for any Spare Part so procured and delivered at the per-unit price set forth for such Spare Part in Exhibit P , with no markup or additional cost. If any Equipment fails before Substantial Completion, then Contractor may withdraw Spare Parts from Owner’s stock of Spare Parts procured under this Section 2.10 , to the extent that such Spare Parts are available in Owner’s stock, so that the Equipment that failed may be returned to operating condition. Contractor shall replace any such Spare Parts at its cost. Subject to the immediately preceding sentence in respect of Contractor’s obligation to replace Spare Parts used by Contractor, the Contract Price does not include the cost of Spare Parts.

2.11 Preliminary Work . Contractor acknowledges and agrees that, subject to the terms of this Section 2.11 , Preliminary Work shall be incorporated into and form part of the Work. If Contractor identifies in writing to Owner prior to the Review Date any Preliminary Work that is defective, deficient or otherwise not in conformance with the standards of other Work required under this Agreement, then Contractor shall be entitled to a Change Order for an equitable adjustment to the Project Schedule, the Contract Price, or both of them, as a result of such defective, deficient or non-conforming Preliminary Work, which such Change Order shall be issued in accordance with ARTICLE VII ; provided , however , that Owner may at its discretion waive in writing any defective, deficient or non-conforming Preliminary Work in lieu of any such Change Order being issued; provided further , that the consequences of any such waiver shall, notwithstanding anything to the contrary herein, be at Owner’s sole cost and risk. Owner shall in all events assume all liability and it shall defend, indemnify, and hold harmless the Contractor Indemnified Parties from and against any and all Claims made by the Preliminary Work Provider against any Contractor Indemnified Party in connection with or related to the Preliminary Work.

2.12 Assigned Equipment . Notwithstanding anything herein to the contrary, each Party acknowledges and agrees that Contractor shall not be liable to Owner hereunder with respect to the terms and conditions of the purchase orders and other agreements relating to the Assigned Equipment (but excluding, for the avoidance of doubt, warranties, which remain subject to the terms of ARTICLE VIII ) but only to the extent of any such terms and conditions which Contractor identifies in writing to Owner prior to the Review Date as containing provisions that are inconsistent with the terms and conditions of this Agreement and standard of Work required hereunder. With respect to any such items for which Contractor is not liable as determined in accordance with the preceding sentence, Contractor shall be entitled to a Change Order for an equitable adjustment to the Project Schedule and the Contract Price if (a) any such inconsistency causes, or could be reasonably expected to cause, any Work that is affected thereby to be defective, deficient or otherwise not in conformance with the standards of Work hereunder, and (b) Owner requires Contractor to correct the applicable defect, deficiency or inconsistency, which such Change Order shall be issued in accordance with ARTICLE VII ; provided , however , that Owner may at its discretion waive in writing any defective, deficient or non-conforming Work in lieu of any such Change Order being issued; provided further , that the consequences of any such waiver shall, notwithstanding anything to the contrary herein, be at Owner’s sole cost and risk.

ARTICLE III

OWNER RESPONSIBILITIES

3.1 Access to Site . Owner shall provide at all times access to the Site sufficient to enable Contractor’s performance of the Work. Contractor shall allow Owner at all times complete and unobstructed access to the Site and the Work performed by Contractor hereunder provided that Owner shall (i) not unreasonably impede or unreasonably disrupt Contractor’s performance of the Work; and (ii) comply with the security and safety procedures set forth in Exhibit D . However, Owner may withhold any such right or access until the Payment Bond and the Performance Bond have been received in accordance with Section 5.6 .

3.2 Owner’s Representative . Owner shall designate in writing an Owner’s Representative to represent the Owner and to receive communications from the Contractor. The Owner’s Representative shall have such authority to act for the Owner under this Agreement as is specified by Owner in the notice to Contractor appointing such Owner’s Representative; provided that Owner’s Representative shall under no circumstances have the authority to terminate or assign, or consent to the termination or assignment of this Agreement.

3.3 Review of Deliverables . Owner shall review all of the deliverables set forth on Exhibit S and provided by Contractor under this Agreement and shall do so within five (5) Business Days. Owner may, but shall not be obligated to, provide comments to Contractor regarding such deliverables. Contractor shall (i) make such changes to the deliverables as Owner reasonably believes are necessary, provided the same do not violate any of the other terms of this Agreement, and (ii) address any comments which demonstrate that such deliverables are not in compliance with the requirements of this Agreement. No such review or requested changes shall impose any liability on Owner or relieve Contractor of any of its responsibility under this Agreement.

3.4 Payment of Contract Price . Owner shall pay Contractor for the Work in accordance with this Agreement.

3.5 Compliance with Laws . Owner shall comply with all applicable Laws in performing its obligations under this Agreement.

3.6 Permits. Owner shall obtain the Permits described in Exhibit C-2 (the “ Owner Permits ”). In order to assist Owner in obtaining the Owner Permits, Contractor shall provide Owner with such reasonable assistance as Owner may request.

3.7 Owner-Furnished Equipment . Owner shall, at its sole cost and expense, deliver the Owner-Furnished Equipment to the Site in accordance with the critical path dates identified in the Project Schedule.

3.8 Coordination with Utility. Owner shall cause the Utility to (a) provide specifications for utility metering and telemetering equipment to be installed by Contractor, (b) subject to Contractor’s obligation to pay for power consumption as provided in this Agreement, make back-feed power available, if required, to the Facility, and (c) permit Interconnection of the Facility at the point of Interconnection specified in the Interconnection Agreement and accept electricity generated by the Facility, as needed, for commissioning and performance of the Performance Tests, in each case in accordance with the Project Schedule; provided that, Contractor shall properly design, commission and test the Interconnection facilities such that the Utility agrees to allow Interconnection.

ARTICLE IV

SCHEDULE, completion, INSPECTION and PERFORMANCE

4.1 Project Schedule . Contractor shall design, install, engineer, construct, start-up, test and commission the Facility and perform all Work hereunder in material conformance with the Project Schedule set forth in Exhibit G . The Project Schedule includes anticipated dates for achievement of significant project milestones, including the issuance of the Limited Notice to Proceed, Notice to Proceed, the start and completion dates for design, the anticipated award and delivery dates of long lead-time procured items, the start and completion dates for construction and testing, and the scheduled Mechanical Completion Date, Substantial Completion Date and Final Acceptance Date. This Section 4.1 shall not limit Contractor’s obligations to achieve Substantial Completion and Final Acceptance for the Facility by the dates provided in this Agreement.

(a) Limited Notice to Proceed . On or after the Effective Date, Owner may, at Owner’s sole discretion, but subject to Contractor’s written agreement to the terms thereof, issue to Contractor a limited notice to proceed directing Contractor to commence and complete the LNTP Scope of Work under and in accordance with the terms of this Agreement (such notice a “ Limited Notice to Proceed ” or “ LNTP ”). All Work performed by Contractor prior to or pursuant to the Limited Notice to Proceed shall be deemed part of the Work. Owner shall have no obligation to Contractor under this Agreement until the Owner issues the Notice to Proceed, except that, upon issuance of a Limited Notice to Proceed, Owner shall be obligated to make the payments for Work as specified therein provided such Work is performed by Contractor in the manner required by such Limited Notice to Proceed and otherwise in accordance with the requirements of this Agreement.

(b) Notice to Proceed . On or after the Effective Date, Owner may, at Owner’s sole discretion, issue to Contractor a notice to proceed directing Contractor to commence and complete all Work under and in accordance with the terms of this Agreement (such notice a “ Notice to Proceed ” or “ NTP ”). All Work performed by Contractor prior to the date of issuance of the Notice to Proceed shall be deemed part of the Work. In the event Owner fails to issue the Notice to Proceed on the date that is 180 days after the Effective Date, Contractor shall be entitled to a Change Order to be issued in accordance with ARTICLE VII .

(c) Completion Date . Contractor shall achieve (i) Mechanical Completion on or before the Guaranteed Mechanical Completion Date and (ii) achieve Substantial Completion on or before the Guaranteed Substantial Completion Date and the Guaranteed Substantial Completion Cliff Date. Contractor shall be responsible for (x) Delay Damages as provided in Section 4.7 if it fails to achieve Mechanical Completion or Substantial Completion on or before the Guaranteed Mechanical Completion Date or the Guaranteed Substantial Completion Date (as such dates may be adjusted pursuant to this Agreement), respectively, and (y) Substantial Completion Cliff Liquidated Damages if it fails to achieve Substantial Completion on or before the Guaranteed Substantial Completion Cliff Date. Contractor shall not be excused from any failure to achieve Mechanical Completion or Substantial Completion by the Guaranteed Mechanical Completion Date or Guaranteed Substantial Completion Date (as applicable), except as the result of a Force Majeure Event, an Owner Caused Delay, Owner’s failure to issue the Notice to Proceed at the times set forth in Section 4.1(b) , or approved changes in accordance with ARTICLE VII . The Guaranteed Substantial Completion Cliff Date shall not be subject to any extensions under this Agreement.

4.2 Contractor Schedule and Reports . Contractor shall prepare and submit to Owner updated progress schedules and progress reports on a regular basis (as requested, but no less often than monthly) in the form provided in Exhibit W and in such detail as Owner may reasonably request ( provided , that any such report submitted on a monthly basis shall be submitted either no earlier than five (5) days prior to or in conjunction with the invoice package described in Section 5.3(b) ), as well as such other reports relating to the Work as Owner shall reasonably request from time to time. From and after the issuance of the Limited Notice to Proceed or Notice to Proceed until Substantial Completion, Contractor’s Project Manager shall hold weekly progress meetings with the Owner’s Representative (and shall hold more frequent progress meetings at Owner’s reasonable request), to assess and verify actual progress, to predict future progress and to review and, if possible, resolve any construction-related issues that Owner or Contractor may wish to discuss.

(a) Schedule Requirements . All schedules provided by Contractor must (i) be suitable for monitoring the progress of the Work, (ii) provide necessary data about the timing for Owner decisions, and all Owner milestones and commitments, and (iii) be in sufficient detail to demonstrate adequate planning for and completion of the Work.

(b) Remedial Action Plan . If at any such weekly progress meeting it is determined that Contractor is more than two (2) weeks behind schedule in respect of any of the anticipated dates for achievement of critical path project milestones (identified as such in the Project Schedule), then Owner may deliver a written notice to Contractor and require that within ten (10) Business Days of Contractor’s receipt of such notice that Contractor submit to Owner a plan demonstrating the measures that Contractor has taken or will take in order to ensure that Mechanical Completion and Substantial Completion will occur no later than the Guaranteed Mechanical Completion Date and the Guaranteed Substantial Completion Date (as applicable) notwithstanding such missed significant project milestone(s) (such plan, a “ Remedial Action Plan ”). Contractor shall address all comments received from Owner during Owner’s review of the Remedial Action Plan, and Contractor shall implement Owner’s comments, except to the extent refusal is consistent with Prudent Industry Standards, in which case Contractor shall provide a written statement describing why any of Owner’s comments or proposed changes to the Remedial Action Plan were not implemented by Contractor. The cost of carrying out a Remedial Action Plan shall be borne by Contractor except to the extent Contractor has the right to request a Change Order pursuant to ARTICLE VII in connection with such delay giving rise to the need for the Remedial Action Plan. In case Contractor disputes any of the foregoing, the Parties shall refer the matter for determination in accordance with the dispute resolution provisions of Section 16.3 .

4.3 Mechanical Completion .

(a) Notice of Mechanical Completion . No less than fourteen (14) days prior to the date it expects to have achieved Mechanical Completion, Contractor shall give Owner notice of the expected date of Mechanical Completion.

(b) Mechanical Completion of the Facility . “ Mechanical Completion ” of the Facility shall mean and shall be deemed to have occurred when each of the following conditions has been satisfied:

(1) the Facility has been installed in accordance with the Contract Documents, except that Interconnection has not occurred and it has not been synchronized into the grid, is mechanically and electrically sound, and is ready for synchronization, initial start-up, adjustment, testing and commissioning; and

(2) the Facility is ready to be started-up and thereafter, following synchronization into the grid and satisfactory adjustment, testing and commissioning, will be ready to be continuously operated without damage to the Facility or any other property and without injury to any Person and without voiding any third-party warranties.

(c) Application of Mechanical Completion . When Contractor believes Mechanical Completion for the Facility has been achieved, Contractor shall notify Owner by delivering to Owner a Mechanical Completion Certificate. Within five (5) Business Days after receipt of the Mechanical Completion Certificate, Owner shall either (i) notify Contractor that Mechanical Completion has been achieved and execute the certificate noting that the Mechanical Completion Date is the date on which Owner received the Mechanical Completion Certificate or (ii) notify Contractor that Mechanical Completion has not been achieved and provide a detailed explanation of the reasons therefor, except that if Owner requires additional time for review, then Owner shall provide Contractor written notice of the need for such additional time during the five (5) Business Day period recited above, and, if Owner subsequently rejects the Mechanical Completion Certificate, then the Contractor may request a Change Order for a day for day adjustment to the Project Schedule for each day after the fifth (5 ^th ) Business Day until the day on which the Owner issues the rejection of the Mechanical Completion Certificate. Owner shall in all events diligently cooperate with respect to Contractor’s ongoing performance of Work scheduled during the pendency of Owner’s review of the Mechanical Completion Certificate. In the event Owner rejects a Mechanical Completion Certificate delivered by Contractor, the Parties shall thereupon promptly and in good faith confer and make all reasonable efforts to resolve the applicable issue. If such issue is not resolved within five (5) Business Days of the delivery by Owner of its notice of rejection to Contractor, the Parties shall refer the matter for determination in accordance with the dispute resolution provisions of Section 16.3 . If Owner’s rejection is a result of identified defects or deficiencies in the Work, Contractor shall correct such defects or deficiencies and/or perform such Work and the foregoing notice procedure shall be repeated until the requirements for Mechanical Completion have been met.

4.4 Installed Nameplate Capacity Inspection . Contractor shall keep a log of all module serial numbers installed at the Site and share this log with Owner on an ongoing basis for verification during construction. The total actual installed DC nameplate capacity for the Facility shall be determined by summing the module nameplate capacities as specified by the factory flash test reports for the modules, and verifying with module serial numbers for each module confirmed as installed in the Facility from the module serial number log. Within three (3) Business Days of receipt of notice from Contractor that the Facility is ready for inspection and as a condition to Final Acceptance, Owner shall review the data and inspect the Facility to determine whether the Facility has achieved the Expected Capacity in accordance with this Section 4.4 , except that if Owner requires additional time for review, then Owner shall provide Contractor written notice of the need for such additional time during the three (3) Business Day period recited above, and, if Owner subsequently rejects the results of the inspection, then the Contractor may request a Change Order for a day for day adjustment to the Project Schedule for each day after the third (3 ^rd ) Business Day until the day on which the Owner issues the rejection of the results of the inspection. Owner shall in all events diligently cooperate with respect to Contractor’s ongoing performance of Work scheduled during the pendency of Owner’s review of the Expected Capacity of the Facility.

4.5 Substantial Completion .

(a) Substantial Completion of the Facility . “ Substantial Completion ” of the Facility shall mean and shall be deemed to have occurred when each of the following conditions has been satisfied:

(1) the Facility has achieved Mechanical Completion;

(2) Contractor has (i) completed the Performance Tests on the Facility, (ii) delivered to Owner results demonstrating that the Facility has passed the Capacity Test and achieved the Guaranteed Capacity, and (iii) either (x) delivered to Owner results demonstrating that the Facility has passed the Performance Ratio Test and achieved the Guaranteed PR, (y) delivered to Owner results demonstrating that the Facility has achieved the Minimum Guaranteed PR, delivered notice to Owner pursuant to the last sentence of Section 4.9(b)(i) to exercise its option to improve performance of the Facility during the Performance Improvement Period, and paid Performance Liquidated Damages pursuant to sub-Section (10) below, calculated in accordance with Section 4.9(b)(ii) , or (z) delivered to Owner results demonstrating that the Facility has achieved the Minimum Guaranteed PR and paid Performance Liquidated Damages pursuant to sub-Section (10) below, calculated in accordance with Section 4.9(b)(iv) ;

(3) all requirements of Utility to perform testing and Interconnection of the Facility have been satisfied, and Contractor has delivered to Owner evidence thereof reasonably satisfactory to Owner, and the Facility has been physically Interconnected at its full capacity and is capable of delivering electric energy to the grid;

(4) the Equipment has been commissioned so as to allow the commercial operation of the Facility or achievement of the commercial operation date under the Power Purchase Agreement;

(5) all Spare Parts and special tools required to be delivered at Substantial Completion in connection with the Facility under this Agreement have been delivered to Owner;

(6) all applicable Contractor Permits have been received, are in full force and effect, if necessary and permitted by Law, have been transferred to the Owner and copies thereof have been delivered to Owner;

(7) the Facility complies with all applicable Legal Requirements and has passed all inspections by any applicable Governmental Authority;

(8) to the extent not previously delivered, all lien waivers then required under ARTICLE V have been delivered to and received by Owner;

(9) all Delay Damages and Substantial Completion Cliff Liquidated Damages payable by Contractor have been paid to Owner or the amount of the Contract Price remaining to be paid at Substantial Completion is sufficient to off-set the Delay Damages and Substantial Completion Cliff Liquidated Damages due, and Contractor agrees in writing that such damages may be off-set against the Contract Price remaining to be paid;

(10) if applicable, all Performance Liquidated Damages accrued pursuant to Section 4.9 as of the Substantial Completion Date have been paid to Owner or the amount of the Contract Price remaining to be paid at Substantial Completion is sufficient to off-set such Performance Liquidated Damages, and Contractor agrees in writing that such damages may be off-set against the Contract Price remaining to be paid;

(11) the design and construction of the Facility is in compliance with the requirements of the Contract Documents, the Power Purchase Agreement, the Solar Lease and the Interconnection Agreement;

(12) Contractor has completed the required operations and maintenance training program for Owner’s personnel as agreed pursuant to Section 2.5(e) , and Owner has received those documents set forth on Part I of Exhibit S (which documents shall not include an as-built drawing), including the O&M Manual;

(13) the Commercial Operation Date as defined in the Power Purchase Agreement has occurred;

(14) Owner and Contractor have agreed on a Punchlist of all uncompleted items in accordance with Section 4.5(c) ; and

(15) Contractor has assigned to Owner all warranties and guarantees from all Subcontractors and vendors with respect to the Facility either pursuant the form of warranty assignment agreement attached hereto as Exhibit U or such other warranty assignment agreement in form and substance satisfactory to Owner.

(b) Application for Substantial Completion . When Contractor considers that the criteria for Substantial Completion have been met, Contractor shall so notify Owner in writing by delivering to Owner a Substantial Completion Certificate. Within five (5) Business Days after Owner’s receipt of the Substantial Completion Certificate, Owner shall either (i) notify Contractor that Substantial Completion has been achieved and execute the Substantial Completion Certificate noting that the Substantial Completion Date is the date on which Owner received the Substantial Completion Certificate or (ii) notify Contractor that Substantial Completion has not been achieved and provide a detailed explanation of the reasons therefor, except that if Owner requires additional time for review, then Owner shall provide Contractor written notice of the need for such additional time during the five (5) Business Day period recited above, and, if Owner subsequently rejects the Substantial Completion Certificate, then the Contractor may request a Change Order for a day for day adjustment to the Project Schedule for each day after the fifth (5 ^th ) Business Day until the day on which the Owner issues the rejection of the Substantial Completion Certificate. Owner shall in all events diligently cooperate with respect to Contractor’s ongoing performance of Work scheduled during the pendency of Owner’s review of the Substantial Completion Certificate. In the event Owner rejects a Substantial Completion Certificate delivered by Contractor, the Parties shall thereupon promptly and in good faith confer and make all reasonable efforts to resolve the applicable issue. If such issue is not resolved within five (5) Business Days of the delivery by Owner of its notice of rejection to Contractor, the Parties shall refer the matter for determination in accordance with the dispute resolution provisions of Section 16.3 . If Owner’s rejection is a result of identified defects or deficiencies in the Work, Contractor shall correct such defects or deficiencies and/or perform such Work and the foregoing notice procedure shall be repeated until the requirements for Substantial Completion have been met. Upon execution and delivery by Owner of the Substantial Completion Certificate, care, custody and control of the Facility shall pass to Owner; provided , however , Contractor shall not be relieved of its ongoing liabilities and obligations under this Agreement.

(c) Punchlist . Prior to Substantial Completion, Owner and Contractor shall develop a comprehensive list of all known defects or deficiencies in the Work or discrepancies between installed Equipment or workmanship and that required by this Agreement that are then known to Owner or Contractor and that meet the requirements of this Agreement for inclusion on the Punchlist. A comprehensive Punchlist developed by Contractor of remaining Work for the Facility shall be agreed upon by Contractor and Owner and include a schedule pursuant to which each task will be performed by Contractor, except that (i) Contractor shall not thereby be excused from responsibility for any and all defects or deficiencies in the Work or discrepancies between installed Equipment or workmanship and that required by this Agreement that are not then known to Owner, and (ii) if any remaining Work, defects or deficiencies in the Work or discrepancies between installed Equipment or workmanship and that required by this Agreement does not meet the requirements of this Agreement for inclusion on the Punchlist, then Contractor shall complete such Work and correct such defects, deficiencies or discrepancies in accordance with this Agreement prior to achieving Substantial Completion.

(d) Independent Engineer’s Certificate . Without limiting the requirements of Section 4.5(a) , Owner may seek, at its own cost and expense, and Contractor shall provide reasonable assistance in obtaining, a certificate from the Independent Engineer with respect to Substantial Completion for the Facility, which may include certifications that the criteria required for Substantial Completion have been met. Such certification from the Independent Engineer shall in no event be considered a condition precedent to Substantial Completion or Final Acceptance.

4.6 Final Acceptance .

(a) “ Final Acceptance ” of the Facility shall mean and shall be deemed to have occurred when each of the following conditions has been satisfied:

(1) Substantial Completion for the Facility has occurred;

(2) Owner has received from Contractor all as-built drawings for the Work in both PDF and CAD format;

(3) Owner has received from Contractor all Equipment Documentation with respect to the Facility, including the log of flash test data described in Section 4.4 ;

(4) Owner has received from Contractor all testing acceptance reports, final job books and each other item described on Exhibit S ;

(5) all Contractor’s materials and wastes related to the Facility have been removed from the Site and properly disposed of;

(6) to the extent not previously delivered, all lien waivers then required under ARTICLE V have been delivered to and received by Owner;

(7) the performance of the Work is 100% complete (other than warranty Work, as applicable), including the completion by Contractor to Owner’s satisfaction of all items set forth on the Punchlist; provided that the Parties may agree that any outstanding item of Work may be completed by Owner or otherwise be deleted from the Punchlist, subject to the Parties’ agreement of an appropriate sum to be paid or allowed by Contractor to Owner for such outstanding item of Work; and provided further that, notwithstanding any other provision of this Agreement, if the completion of any Punchlist item requires that the Facility be shut down or that its output be curtailed, Owner shall have the option of completing such Punchlist item itself and Owner shall deduct its reasonable and documented costs required to complete such Punchlist item from the monies otherwise due from Owner to Contractor hereunder;

(8) the Facility has passed any additional final inspections by applicable Governmental Authorities that directly relate to the Scope of Work;

(9) if Contractor has delivered notice to Owner pursuant to the last sentence of Section 4.9(b)(i) to exercise its option to improve performance of the Facility during the Performance Improvement Period, Contractor has (i) completed the Performance Tests on the Facility and (ii) either (x) delivered to Owner results demonstrating that the Facility has passed the Performance Ratio Test and achieved the Guaranteed PR or (y) if Contractor has failed to demonstrate that the Facility has achieved the Guaranteed PR, paid to Owner Performance Liquidated Damages pursuant to sub-Section (10) below and Section 4.9(b)(iv) ;

(10) if applicable, all Performance Liquidated Damages accrued pursuant to Section 4.9 have been paid to Owner;

(11) all Work performed at the Facility from and after the Substantial Completion Date is in compliance with the requirements of the Contract Documents and the Power Purchase Agreement, and the Facility is capable of being operated safely;

(12) all Spare Parts withdrawn by Contractor from Owner’s stock pursuant to Section 2.10 have been replaced by Contractor; and

(13) all undisputed amounts owed from Contractor to Owner have been paid.

(b) Final Acceptance Certificate . When Contractor considers that the criteria for Final Acceptance for the Facility have been met, Contractor shall so notify Owner in writing by delivering to Owner a Final Acceptance Certificate. Within five (5) Business Days after Owner’s receipt of the Final Acceptance Certificate, Owner shall either (i) notify Contractor that Final Acceptance has been achieved and execute the Final Acceptance Certificate noting that the Final Acceptance Date is the date on which Owner received the Final Acceptance Certificate, or (ii) notify Contractor that Final Acceptance has not been achieved and provide a detailed explanation of the reasons therefor, except that if Owner requires additional time for review, then Owner shall provide Contractor written notice of the need for such additional time during the five (5) Business Day period recited above, and, if Owner subsequently rejects the Final Acceptance Certificate, then the Contractor may request a Change Order for a day for day adjustment to the Project Schedule for each day after the fifth (5 ^th ) Business Day until the day on which the Owner issues the rejection of the Final Acceptance Certificate. Owner shall in all events diligently cooperate with respect to Contractor’s ongoing performance of Work scheduled, if any, during the pendency of Owner’s review of the Final Acceptance Certificate. In the event Owner rejects a Final Acceptance Certificate delivered by Contractor, the Parties shall thereupon promptly and in good faith confer and make all reasonable efforts to resolve the applicable issue. If such issue is not resolved within five (5) Business Days of the delivery by Owner of its notice of rejection to Contractor, the Parties shall refer the matter for determination in accordance with the dispute resolution provisions of Section 16.3 . If Owner’s rejection is a result of identified defects or deficiencies in the Work, Contractor shall correct such defects or deficiencies and/or perform such Work and the foregoing notice procedure shall be repeated until the requirements for Final Acceptance have been met.

4.7 Delay Damages . Subject to Section 12.4 , in the event (a) Mechanical Completion has not occurred on or before the Guaranteed Mechanical Completion Date or (b) Substantial Completion has not occurred on or before the Guaranteed Substantial Completion Date, then, as Owner’s sole and exclusive remedy for Contractor’s failure to achieve Mechanical Completion or Substantial Completion by the Guaranteed Mechanical Completion Date or the Guaranteed Substantial Completion Date (as applicable), Contractor shall pay to Owner, as liquidated damages and not as a penalty, an amount equal to Fifteen Thousand Dollars ($15,000) per day for each day after (x) the Guaranteed Mechanical Completion Date until the Mechanical Completion Date or (y) the Guaranteed Substantial Completion Date until the Substantial Completion Date, as the case may be (the “ Delay Damages ”). Notwithstanding the foregoing, in the event Contractor achieves Substantial Completion by the Guaranteed Substantial Completion Date, Contractor shall have no obligation to pay Delay Damages on account of any failure by it to achieve Mechanical Completion by the Guaranteed Mechanical Completion Date and any Delay Damages previously assessed by Owner for delay in achieving Mechanical Completion shall be credited to the account of Contractor. In addition to the foregoing, in the event that Substantial Completion has not occurred on or before the Guaranteed Substantial Completion Cliff Date, then Contractor shall pay to Owner, as liquidated damages and not as a penalty, an amount equal to Two Hundred and Fifty Thousand Dollars ($250,000) (the “ Substantial Completion Cliff Liquidated Damages ”); provided , however , that notwithstanding anything to the contrary herein, Contractor shall only be liable for Substantial Completion Cliff Liquidated Damages if, after failing to achieve Substantial Completion on or before the Guaranteed Substantial Completion Cliff Date, Owner is obliged to pay liquidated damages in the amount of Four Hundred and Fifty Thousand Dollars ($450,000) as a liquidated damage amount pursuant to Section 20.5 of the Power Purchase Agreement. The Substantial Completion Cliff Liquidated Damages shall not be subject to the Liquidated Damages Aggregate Cap.

4.8 Performance Tests .

(a) As part of the Work, Contractor shall, at its sole expense, perform the Performance Tests in accordance with Exhibit R . In preparing for the performance of Performance Tests, the Contractor shall cooperate to the extent reasonably necessary with the Utility.

(b) The Owner shall be permitted to have its own and its designees’ personnel (including personnel of the Facility Lender, the Independent Engineer and the Utility) on the Site to observe and/or verify all Performance Tests.

(c) The Contractor shall give the Owner at least ten (10) Business Days written notice in advance of the date on which the Contractor intends to commence the initial Performance Test.

(d) If the Facility fails a Performance Test, then, without prejudice to Section 4.5 , Contractor shall undertake, pursuant to and subject to Section 4.9 , all actions as may be necessary (at its own expense) to cure the failure, including re-performing the Performance Tests as necessary to demonstrate such cure.

4.9 Performance Tests and Performance Liquidated Damages .

(a) Performance Tests .

(i) Contractor guarantees that, subject to Section 4.9(b) , the Facility shall achieve Guaranteed Capacity and the Guaranteed PR as set forth in Exhibit R during a completed Performance Test in accordance with all of the requirements of Exhibit R .

(ii) Subject always to ARTICLE VII and ARTICLE IX , (1) Contractor’s obligation to meet the Guaranteed Capacity and the Minimum Guaranteed PR as set forth in Exhibit R is absolute, and (2) Contractor shall do all things necessary or appropriate to achieve the Guaranteed Capacity and Minimum Guaranteed PR including exercising each and every repair or replacement alternative, and retesting, regardless of cost to Contractor or difficulties associated therewith.

(b) Performance Liquidated Damages .

If during any completed Performance Ratio Test, the measured Facility PR is less than the Guaranteed PR then, subject to the Facility achieving the corresponding Minimum Guaranteed PR, the following provisions shall of this Section 4.9 shall apply:

(i) Without creating any Contractor right to extend any time or date by which tests must be performed hereunder, Contractor may repeat tests as it deems necessary to achieve the Guaranteed PR. If, on or before the date that is forty-five (45) days after the Guaranteed Substantial Completion Date, Contractor has demonstrated that the Facility has achieved the Minimum Guaranteed PR but has failed to demonstrate that the Facility has achieved the Guaranteed PR, Contractor may elect, at its option, to pay either (x) the Performance Liquidated Damages calculated in accordance with Section 4.9(b)(ii) for the period commencing on the Guaranteed Substantial Completion Date and ending one hundred and eighty (180) days after the Guaranteed Substantial Completion Date (the “ Performance Improvement Period ”) or (y) the Performance Liquidated Damages calculated in accordance with Section 4.9(b)(iv) . Subject to Contractor’s right to repeat tests pursuant to the first sentence of this Section 4.9(b)(i) , Contractor shall exercise such option by delivering a notice to Owner within five (5) Business Days after the completion of any Performance Ratio Test that demonstrates the Facility has achieved the Minimum Guaranteed PR; provided , however , that if Contractor fails to deliver such notice or fails to indicate either which option is exercised or its intention to repeat the test, Contractor shall be deemed to have elected to pay the Performance Liquidated Damages in accordance with Section 4.9(b)(iv) .

(ii) The Performance Liquidated Damages payable by Contractor during the Performance Improvement Period pursuant to Section 4.9(b)(i) are, for each thirty (30) day period during the Performance Improvement Period, an amount equal to Four Thousand Five Hundred Dollars ($4,500) per one percentage (prorated to the hundredth percent) shortfall against the Guaranteed PR; provided , however , that if Contractor demonstrates, during any such thirty (30) day period, that the Facility has achieved the Guaranteed PR, the Performance Liquidated Damages payable in respect of the applicable thirty (30) day period shall be reduced by multiplying them by a fraction, the denominator of which is thirty (30) and the numerator of which is the number of days elapsed since the start of the applicable thirty (30) day period until the date on which the Facility achieves the Guaranteed PR. No further Performance Liquidated Damages shall accrue following the date on which the Facility achieves the Guaranteed PR. Contractor shall pay Owner Performance Liquidated Damages calculated for each thirty (30) day period during the Performance Improvement Period pursuant to this Section 4.9(b)(ii) within ten (10) Business Days following the expiry of each such thirty (30) day period; provided , however , that the payment of all such Performance Liquidated Damages then accrued, if applicable, shall be a condition of achieving Substantial Completion pursuant to Section 4.5(a)(10) .

(iii) If Contractor has exercised the option set forth in clause (x) of Section 4.9(b)(i) to improve the performance of the Facility during the Performance Improvement Period, and Contractor fails, on or before the expiry of the Performance Improvement Period, to demonstrate that the Facility has achieved the Guaranteed PR, Contractor shall pay Performance Liquidated Damages calculated in accordance with Section 4.9(b)(iv) .

(iv) The Performance Liquidated Damages payable by Contractor pursuant to either (A) Section 4.9(b)(iii) , (B) the proviso of clause (y) of Section 4.9(b)(i) or (C) the deemed election pursuant to the last sentence of Section 4.9(b)(i) are the amount of Five Hundred Thousand Dollars ($500,000) per one percentage (prorated to the hundredth percent) shortfall against the Guaranteed PR. Contractor shall pay Owner such amount, in respect of (A), within ten (10) Business Days following the expiry of the Performance Improvement Period as a condition of Final Acceptance, or, in respect of (B) and (C), as a condition of Substantial Completion.

(v) Except as provided in ARTICLE XII , and provided that the Minimum Guaranteed PR has been satisfied pursuant to Section 4.9(a)(ii) , payment of the Performance Liquidated Damages by Contractor shall constitute Contractor’s sole and exclusive liability and Owner’s sole and exclusive remedy relating to Contractor’s unexcused failure to achieve the performance guarantees.

4.10 Liquidated Damages Not a Penalty . THE PARTIES AGREE THAT IT WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE UNDER THE PRESENTLY KNOWN AND ANTICIPATED FACTS AND CIRCUMSTANCES TO ASCERTAIN AND FIX THE AMOUNT OF ACTUAL DAMAGES THAT WOULD BE SUFFERED DUE TO A DELAY IN THE ACHIEVEMENT OF MECHANICAL COMPLETION AND SUBSTANTIAL COMPLETION AND REDUCTION IN PERFORMANCE RATIO FOR THE FACILITY. THEREFORE THE PARTIES ACKNOWLEDGE THAT THE DELAY DAMAGES, SUBSTANTIAL COMPLETION CLIFF LIQUIDATED DAMAGES and Performance Liquidated Damages ARE A FAIR AND REASONABLE DETERMINATION OF THE AMOUNT OF DAMAGES WHICH WOULD BE SUFFERED BY OWNER FOR SUCH DELAYS AND REDUCTION IN PERFORMANCE, AND THAT THE DELAY DAMAGES and Performance Liquidated Damages DO NOT CONSTITUTE A PENALTY.

4.11 Inspection . All Work performed by Contractor and all Equipment shall be properly inspected by Contractor at its expense and shall be subject to inspection by Owner, Owner’s representatives, the Independent Engineer and the Facility Lenders at Owner’s own expense. Contractor shall provide access to all Equipment and related documents and information as reasonably required by Owner and such other Persons. If any Equipment (other than Owner-Furnished Equipment), material or Work is defective or not in conformance with this Agreement, the provisions of ARTICLE VIII shall apply. Such right of inspection, and any inspection actually conducted by Owner or such other Persons, shall not relieve Contractor of its responsibility for the proper performance of the Work or the proper functioning of the Equipment to the extent provided under this Agreement. Contractor shall furnish samples as reasonably required and shall provide reasonable assistance and cooperation necessary to permit tests to be performed on materials or Work determined by Owner to be defective or not in conformance with this Agreement. Contractor shall provide to Owner and such other Persons full and unsupervised access to the Facility and any other location or facility where Work is being performed upon reasonable prior notice and subject to Contractor’s customary safety rules and policies.

4.12 Work Notwithstanding Disputes . Unless otherwise agreed in writing, Contractor shall diligently carry on the Work during the pendency of any dispute so long as all undisputed amounts payable to Contractor have been paid. Upon resolution of such dispute, whether by agreement of the Parties or through a dispute proceeding, any amounts found to be owing by either Party shall be promptly paid by the Party owing payment to the other Party, together with interest at the Interest Rate, from the day following the date of the overpayment or underpayment, as applicable, until the date of repayment in full.

ARTICLE V

compensation and payment

5.1 Contract Price . As consideration to Contractor for the installation of the Equipment and the performance by Contractor of the Work and all other services hereunder, Owner shall pay Contractor the aggregate sum of Thirty Two Million Five Hundred Seventy One Thousand Four Hundred Ninety Dollars ($32,571,490) as such amount may be adjusted in accordance with the terms of this Agreement (the “ Contract Price ”).

5.2 Taxes, Royalties and License Fees . The Contract Price includes, and Contractor shall be responsible for the payment of, any and all sales, use, transfer or similar excise Taxes, or other impositions of any similar amount, including duties and import fees, that may be imposed or assessed by any Governmental Authority on Contractor, any Subcontractor or Owner solely on account of performance of the Work, except for those that may be imposed with respect to the Owner-Furnished Equipment. To the extent applicable and without limiting the generality of the foregoing, Contractor shall provide Owner all documentation (excluding Tax Returns) reasonably requested by Owner to establish that such Taxes have been paid. Contractor and Owner each shall, at the other’s reasonable request, cooperate with any efforts to obtain any available exemptions from Taxes with respect to the Work or any part of it, including property Taxes and any available Tax credits or grants, and shall execute and provide the requesting Party with all reasonably requested documentation (excluding Tax Returns) within its custody, control, or possession. Contractor shall pay all required royalties and license fees and shall procure (whether for itself or as agent for Owner), as required, the appropriate proprietary rights, licenses, agreements and permissions, for materials, methods, processes and systems that are incorporated into the Work, save and except for those related to the Owner-Furnished Equipment.

5.3 Payment Schedule .

(a) Progress Payments . Exhibit E sets forth the Payment Schedule for the Site with respect to the aggregate Contract Price. The Payment Schedule shall be used as the basis for preparation of progress invoices as set forth below with respect to the Work, and, except as otherwise set forth herein, shall establish the amount to be paid to Contractor on a percentage complete basis each month of the Project Schedule.

(b) Contractor Invoicing . On the 25 ^th day of each calendar month the Contractor shall submit a draft invoice showing percentages complete projecting through the end of the current month. Contractor and Owner shall meet and agree to final percentages actually complete by the end of the month. Within five (5) Business Days after the end of each calendar month, Contractor shall submit an invoice package to Owner, in which Contractor shall certify that the Work for which payment is sought complies with the standards of performance hereunder. Each invoice shall be in the form attached as Exhibit M accompanied by supporting documents. Contractor’s invoice will provide accounting information in a form reasonably specified by Owner that will enable Owner to maintain segregated accounts of the Work for Owner’s records. Such segregation shall include separate accounting for (i) taxable and non-taxable expenditures with respect to buildings, land improvements and project management, Permit and license costs and Taxes and fees paid by Contractor and (ii) the cost of Equipment and Work that qualifies for ITCs and the cost of Equipment and Work that does not qualify for ITCs.

(c) Conditions of Payment . Upon receipt of an invoice, Owner shall review the invoice package and reasonably verify the progress on the Project Schedule and other Work completed and the amounts for which payment is sought under the invoice. Within ten (10) Business Days after Owner receives an invoice and related documentation required under this Agreement from Contractor, Owner shall notify Contractor concerning any dispute over the accuracy of, or entitlement to, any amount of the invoice submitted by Contractor and the basis for such dispute. If Owner has not notified Contractor within such ten (10) Business Day period of any good faith objection to an invoice, Owner shall be deemed to have approved such invoice; provided , however , that any such approval shall not constitute approval of any Work reflected on such invoice or a waiver by Owner of any rights under this Agreement (other than the right to approve or dispute such invoice). Subject to the terms of this Section 5.3 , Owner shall pay or cause to be paid to Contractor the full undisputed amount (as reduced by any Retainage or any set-offs) specified in each invoice within thirty (30) days after the day on which Owner originally received a properly supported and correct invoice; provided that:

(1) Owner shall not be obligated to make any progress payment hereunder for Work that is not completed or for Work the completion of which is being disputed if Owner reasonably determines that the matters so certified to or by Contractor in an invoice with respect to such payment are materially erroneous; provided , however , that Owner shall pay the undisputed portion of the disputed progress payment and provided further that if Contractor disputes the decision of Owner and it is determined pursuant to Section 16.3 that Owner should have confirmed the matters so certified by Contractor with respect to such payment, but failed to do so, then Contractor shall be entitled to interest on all unpaid amounts withheld from such progress payment to be accrued at the Interest Rate from the date such progress payment would otherwise have been due to Contractor until the date paid to Contractor; and

(2) Owner shall not be obligated to make any progress payment hereunder until Contractor has supplied Owner with the certification and lien waivers required pursuant to Section 5.7 .

(d) Retainage . Owner shall withhold from each progress payment an amount equal to five percent (5%) of such payment, which shall be held by Owner as retainage (“ Retainage ”). Contractor shall not be entitled to any interest payment by Owner on Retainage. Retainage shall be paid to Contractor in accordance with the following:

(1) Within fifteen (15) Business Days after the Substantial Completion Date, all Retainage shall be paid to Contractor, minus an amount equal to two hundred percent (200%) of the aggregate agreed valuation of the Punchlist; and

(2) Within fifteen (15) Business Days after the date on which the Punchlist items have been completed by Contractor in accordance with this Agreement, and provided that Substantial Completion has occurred, all remaining Retainage shall be paid to Contractor.

(e) Late Payments . All amounts a Party owes the other Party under this Agreement which are not paid when due, shall bear interest on the unpaid balance at the Interest Rate from the due date until they are paid in full.

5.4 Payments Not Acceptance of Equipment or Services . No payment made hereunder shall be considered or deemed to represent that Owner has inspected Contractor’s Work or checked the quality or quantity thereof, or made a detailed examination, audit or arithmetic verification of any payment documentation, and shall not be deemed or construed as approval or acceptance of any Work, or as a waiver of any claim or right that Owner may then or thereafter have, including any rights with respect to warranty claims.

5.5 Withholding . Owner may withhold payment on any payments to be made hereunder (i) in an amount equal to payments previously made to Contractor which were not yet properly due and payable pursuant to this ARTICLE V ; or (ii) for any other sums which Owner is entitled to recover from Contractor under the terms of this Agreement, including Delay Damages, Substantial Completion Cliff Liquidated Damages and Performance Liquidated Damages.

5.6 Payment and Performance Bonds .

(a) No later than five (5) Business Days following the date on which Owner issues the Notice to Proceed, the Contractor shall obtain and deliver to Owner (i) a performance bond in form and substance reasonably satisfactory to Owner (a “ Performance Bond ”) and (ii) a payment bond in form and substance reasonably satisfactory to Owner (a “ Payment Bond ”), in each case issued by SwissRe and Travelers or any other issuer reasonably acceptable to Owner. The value of the Performance Bond and Payment Bond shall each be for an amount equal to one hundred percent (100%) of the Contract Price; provided, however, that the aggregate liability of the surety (or sureties, if more than one) shall not in any event (A) exceed one hundred percent (100%) of the Contract Price, or (B) be greater than Contractor’ s liability hereunder. Upon any increase in the Contract Price in excess of ten percent (10%) of the prior Contract Price, Owner may request, and Contractor shall within ten (10) Business Days thereafter provide, an increase in the amount of the Performance Bond and the Payment Bond such that each remains at a value not less than the Contract Price. All costs associated with providing and maintaining the Performance Bond and the Payment Bond shall be borne by Contractor.

(b) Owner shall have the right to apply the Payment Bond to satisfy any payment obligation of Contractor in connection with this Agreement that is not paid when due hereunder. Owner shall have the right to apply the Performance Bond to satisfy any performance obligation of Contractor in connection with this Agreement that is not performed when due hereunder. Owner shall deliver a copy of any demand made under each of the Payment Bond and Performance Bond to Contractor contemporaneously with the demand presented to the applicable surety; provided, however, that failure to so deliver such demand shall not create a right of objection to any payment to be made under either the Payment Bond or Performance Bond. Demands under the Payment Bond and Performance Bond shall include identification of the provision of this Agreement entitling Owner to demand thereunder.

(c) On the Substantial Completion Date, Owner shall return the Performance Bond and the Payment Bond. Upon return of the Performance Bond and the Payment Bond, the Performance Bond and Payment Bond shall be deemed fully exonerated.

5.7 Releases and Waivers . On or before Owner’s remittance of each payment to be made pursuant to this Agreement, Contractor shall, in accordance with the provisions of this Section 5.7 , provide to Owner releases and waivers to the extent of payment of (i) all of Contractor’s liens and other claims of lien and encumbrances, legal and equitable, against Owner, the Facility, the Site, and all other property and Equipment (to the extent created or brought about due to performance of the Work), and (ii) all Subcontractor’s liens, claims of lien, and encumbrances, legal and equitable, arising out of or in connection with the Work performed. The forms of required lien waiver are set forth in Exhibits F-1 through F-4 , provided, however, that upon Owner’s request, Contractor shall deliver lien waivers on the applicable North Carolina Land Title Association form or a substantially similar form as may be required by any title insurance company as a requirement to issue a title policy to Owner without exception to mechanics or materialmen’s liens.

(a) Interim Waivers . On or before any payment to Contractor hereunder:

(1) Contractor shall duly execute and deliver to Owner a conditional lien waiver and release upon payment for Contractor dated as of the date of the applicable invoice in substantially the form attached hereto in Exhibit F-1 executed by such Subcontractor in the total amount of the payment being requested;

(2) with respect to each Subcontractor, Contractor shall deliver to Owner a conditional lien waiver and release in the form included in Exhibit F-1 . The amount of each such conditional lien waiver and release that is to be delivered by a Subcontractor in direct privity with Contractor shall not exceed the portion of the total amount of the payment being requested that is allocable to such Subcontractor;

(3) Contractor shall duly execute and deliver to Owner an unconditional lien waiver and release upon payment for Contractor in substantially the form attached hereto in Exhibit F-2 with respect to all Work previously billed and paid through the date of the applicable invoice; and

(4) with respect to each Subcontractor, Contractor shall deliver to Owner an unconditional lien waiver and release in the form included in Exhibit F-2 executed by such Subcontractor with respect to all Work previously billed and paid through the date of the applicable invoice.

(b) Final Release from Contractor or Subcontractors; Removal of Liens . In addition to the interim waivers required under Section 5.7(a) , within thirty (30) days after the date on which final payment to a Subcontractor is made, with respect to each such Subcontractor Contractor shall deliver to Owner a final unconditional lien waiver and release in the form included in Exhibit F-4 executed by such Subcontractor. On or before the date on which final payment to Contractor is made under this Agreement, Contractor shall duly execute and deliver to Owner a conditional lien waiver and release upon payment dated as of the date of the applicable invoice in substantially the form attached hereto in Exhibit F-3 in the total amount of the payment being requested. Within fifteen (15) days after the date on which final payment to Contractor is made under this Agreement, Contractor shall duly execute and deliver to Owner a final unconditional lien waiver and release in the form included in Exhibit F-4 .

5.8 Removal of Liens . If any lien, claim of lien or stop notice is filed related to the Work with respect to any portion of the Facility, Equipment (except for any lien, claim of lien or stop notice filed by the manufacturer or vendor of the Owner-Furnished Equipment), or the Site, Contractor shall promptly (and in any case not later than thirty (30) days after such lien or claim of lien or stop notice is received by Contractor) cause such lien, claim of lien or stop notice to be removed by obtaining and recording a bond in accordance with applicable Law. In the event Contractor fails to cause such lien, claim of lien or stop notice to be removed, Owner may withhold from any payment payable to Contractor an amount sufficient to discharge any or all such liens or claims of lien and Owner may discharge such lien or claim with the moneys withheld, whereupon for purposes of this Agreement such moneys shall be deemed to have been paid to Contractor hereunder. Contractor shall indemnify, save harmless and defend the Owner Indemnified Parties and Owner’s title insurance company from all liabilities arising from liens related to the Work so long as Owner has paid Contractor all amounts required pursuant to this Agreement, or such amounts have been set-off pursuant to Section 5.9 . In the event and to the extent that any such lien results from Owner’s failure to pay Contractor or set-off undisputed amounts as and when due under this Agreement, Contractor shall have no obligation under this Section 5.8 to cause the removal of any such lien to the extent of such failure (until such amounts are paid or set-off).

5.9 Set-Off . Owner may deduct and set-off against any part of the balance due or to become due to Contractor from Owner under this Agreement (including any Delay Damages, Substantial Completion Cliff Liquidated Damages and Performance Liquidated Damages due hereunder but not yet paid).

5.10 Lien Agent Information . In order to facilitate the provision of prompt and accurate information regarding lien agents for the Site, all requests to Owner for lien agent contact information made pursuant to NC Gen Stat §44A-7, et. seq., or otherwise, must be sent to the address of Owner provided in ARTICLE XV . Contractor shall cause all subcontractors, suppliers subconsultants and other persons performing any portion of the Work to make all requests for lien information in accordance with this provision. The contact information for the lien agent designated by Owner is as follows: First American Title Insurance Company, 19 W Hargett St, Suite 507, Raleigh, NC 27601, Facsimile Number: (919) 489-5231, E-mail Address: support@liensnc.com.

5.11 Parent Guarantee . Guarantor shall guarantee the full and faithful performance of all obligations and liabilities of Contractor under this Agreement in the form attached as Exhibit AA hereto (" Parent Guarantee "), which shall be delivered to the Owner on the Effective Date. Unless otherwise agreed by the Parties, Contractor shall not be entitled to any compensation under the Agreement unless and until Contractor provides the foregoing Parent Guarantee to Owner in accordance with this Section 5.11 .

ARTICLE VI

TITLE; LOSS OR DAMAGE; FORCE MAJEURE

6.1 Title . Contractor warrants that, as of the date of payment for Work, legal title to and ownership of the Work shall be free and clear of any and all liens, claims, security interests or other encumbrances when title thereto passes to Owner. Except as set forth in Section 6.2 , title to all Work shall pass to Owner upon the earliest to occur of (i) incorporation into the Facility, (ii) delivery to the Site and (iii) when payment (other than Retainage) is made by Owner therefore in accordance with this Agreement. Contractor shall deliver to Owner such assignments, bills of sale or other documents as reasonably requested by Owner to evidence such transfer of title.

6.2 Rights in Drawings, Etc . All drawings, documents, and engineering and other data furnished or to be furnished by Contractor in connection with the Work (the “ Work Product ”) shall be the property of Contractor or its Subcontractors, but an irrevocable and royalty-free license to use such Work Product for use incident to ownership and operation of the Facility shall pass to Owner (assignable to Owner’s successors in interest) on Substantial Completion. Owner assumes all liability and it shall defend, indemnify, and hold harmless Contractor from and against any and all claims, causes of action, damages, costs and expenses, including reasonable attorneys’ fees, in the event that Owner or its successors or assigns (i) modifies or causes any other Person or entity to modify the Work Product for any purpose, or (ii) use the Work Product for any purpose other than the ownership, operation or maintenance of the Facility.

6.3 Risk of Loss . Subject to the final sentence of this Section 6.3 but otherwise notwithstanding anything herein to the contrary, Contractor shall have the full responsibility for care, custody and control of material and Equipment incorporated into the Work (including all equipment and materials used in connection therewith) and shall bear the risk of loss thereof until the earlier of the Substantial Completion Date or the termination of this Agreement, at which time risk of loss shall pass to Owner. Thereafter, Contractor shall not be liable for any damage or loss to the Facility or the Equipment except to the extent such loss or damage is caused by Contractor’s fault or negligence. Notwithstanding the foregoing, risk of loss with respect to Owner-Furnished Equipment shall (a) not pass to Contractor until Owner has delivered it for unloading by Contractor at the Site, and (b) after delivery to the Site, remain with Contractor until the earlier of the Substantial Completion Date or the termination of this Agreement, at which time risk of loss shall pass to Owner.

6.4 Force Majeure . Each Party shall be excused from performance and shall not be considered to be in default with respect to any obligation hereunder, except the obligation to pay money in a timely manner for services actually performed or other liabilities actually incurred, if and to the extent that its failure of, or delay in, performance is due to a Force Majeure Event; provided , that:

(a) such Party gives the other Party written notice describing the particulars of the Force Majeure Event as soon as is reasonably practicable and in any event within five (5) Business Days after the discovery of the Force Majeure Event;

(b) the suspension of performance is of no greater scope and of no longer duration than is reasonably required by the Force Majeure Event;

(c) no obligations of the Party that arose before the occurrence causing the suspension of performance shall be excused as a result of the occurrence;

(d) the Party (i) uses its commercially reasonable efforts to overcome or mitigate the effects of such occurrence, (ii) works diligently to cure, remove or otherwise correct such occurrence, (iii) minimizes and contains all costs and expenses attendant to or arising from such occurrence, or (iv) in the case of Contractor, uses its commercially reasonable efforts to demobilize and/or otherwise reduce its costs promptly after receiving written notice from Owner directing such action;

(e) when the Party is able to resume performance of its obligations under this Agreement, such Party shall give the other Party written notice to that effect and shall promptly resume performance hereunder;

(f) if all of the requirements of this Section 6.4 are met, such Party shall be entitled to a Change Order adjusting the Project Schedule; and

(g) if a Force Majeure Event prohibits Contractor from performing the Work for more than ten (10) consecutive days or ten (10) days in the aggregate, Contractor shall be entitled to recover from Owner the actual and reasonable increase in the cost of performing the Work pursuant to a Change Order attributable to the period after the applicable ten (10) day period, as the case may be, as a direct result of the Force Majeure Event, on condition that Contractor shall use commercially reasonable efforts to demobilize and reduce such costs. If either Party is substantially prevented from fulfilling its obligations as a result of a Force Majeure Event for more than three hundred and sixty-five (365) days in the aggregate, then, notwithstanding that the Parties may by reason thereof have been granted an extension of any required dates, either Party may terminate this Agreement by written notice to the other. Any such termination by either Party shall be considered a termination for convenience by Owner pursuant to Section 12.5 .

6.5 Suspension of Work . Owner shall have the right to suspend all or any portion of the Work for any period of time (not to exceed one hundred twenty (120) days); provided that following such suspension, Contractor shall be entitled to a Change Order for an equitable adjustment to the Project Schedule and the Contract Price as a result of such suspension; provided , further that Contractor shall not be entitled to an adjustment in the Project Schedule or Contract Price if Owner’s suspension arose out of a breach of, or other failure of performance under, this Agreement by Contractor.

6.6 Stop Work Directive . Notwithstanding Section 6.5 , Owner or Owner’s Representative may issue a stop work directive where:

(a) continued work could cause damage, or render remedial action ineffective for any product or service provided by Contractor or the Subcontractors; or

(b) a safety issue arises that is an imminent threat to Person(s) or property.

Upon receipt of a stop work directive, Contractor and all Subcontractors shall cease performance of the Work, including shipments of any specified products, to the extent stipulated by the stop work directive. Contractor and the Subcontractors shall not resume Work on an activity described in a stop work directive until Contractor has obtained a written authorization from Owner or Owner’s Representative. The issuance of a stop work directive shall entitle Contractor to a Change Order for an equitable adjustment to the Project Schedule and Contract Price, if the stop work directive did not arise out of a breach of, or other failure of performance under, this Agreement by Contractor.

ARTICLE VII

Changes

7.1 Change Orders . Owner may request by Change Order any change in the Work within the general scope of and consistent with this Agreement, whether such changes are modifications, alterations, additions, or deletions. All such changes shall be made in accordance with this ARTICLE VII , in the form attached as Exhibit H , and shall be considered, for all purposes of this Agreement, as part of the Work. If Owner provides notice to Contractor that Owner is requesting a change in the Work, then Contractor shall, as soon as practicable, prepare a draft change order, which shall include a detailed proposal for such change in the Work, together with an explanation for the basis thereof. If Contractor and Owner reach agreement on all matters that constitute a Change Order, then the Parties shall execute a Change Order, and Contractor shall perform all changes to the Work included in such Change Order. If the Parties do not agree on the effects of an Owner-requested Change Order on the Contract Price, the Project Schedule, the Payment Schedule, the Guaranteed Mechanical Completion Date, the Guaranteed Substantial Completion Date, or on any other provision hereof, then Contractor shall, if directed by Owner pursuant to a written instruction, nevertheless proceed to perform such Change Order work for the compensation described in Section 7.3 .

7.2 Contractor Proposed Change Orders. The intent of this Agreement is to provide a fixed-price, date certain, turn-key agreement. Consequently, subject to the restrictions set forth below in this Section 7.2 , Contractor may request a Change Order under the following circumstances: (i) Owner suspends the Work as provided in Section 6.5 , (ii) Owner issues a stop work directive pursuant to Section 6.6 , (iii) a Force Majeure Event occurs that justifies a Change Order pursuant to the requirements of Section 6.4 , (iv) following occurrence of an Owner Caused Delay, (v) following occurrence an Owner Event of Default; or (vi) any other event or circumstance for which a Change Order is allowed pursuant to terms of this Agreement. Contractor may not propose a Change Order:

(a) if Contractor fails to deliver a Change Order request to Owner in writing within thirty (30) days after the date Contractor became aware, or should have become aware, of the act, event or condition giving rise to the delay in or increase in cost of performance (except in the case of a Force Majeure Event, which is governed by the requirements of Section 6.4 ); or

(b) to the extent that the event in question is attributable to Contractor’s or its Subcontractor’s omissions or defaults (including, without limitation, to the extent arising out of a suspension of this Agreement by Owner during the continuance of a Contractor Event of Default), or such event is not otherwise allowed to result in a Change Order because of other restrictions in this Agreement.

7.3 Compensation for Change Orders . In the event that any Change Order directed by Owner affects the Work, there shall be an equitable adjustment of the payments and time of performance under this Agreement as agreed by the Parties. If the Parties are unable to agree on an adjustment to the Contract Price to be made for an Owner-directed Change Order, Owner shall have the right to direct Contractor to perform the Work in such Change Order on a time and materials basis under the direction and supervision of Owner or Owner’s Representative. Owner shall pay Contractor an amount equal to the actual and reasonable Direct Costs incurred, less Direct Costs avoided, as the case may be, by Contractor to make such changes to the Work as full and complete compensation for the Change Order. Contractor shall provide Owner time cards, time sheets, invoices for materials purchases and other supporting information and documentation reasonably requested by Owner to support all such Direct Costs. Upon occurrence of an Owner Caused Delay or Force Majeure Event, Contractor shall be entitled to a Change Order for an equitable adjustment to the Project Schedule and, subject to the terms of this Agreement, the Contract Price. Any disputes regarding Change Orders shall be subject to the dispute resolution provisions of Section 16.3 .

7.4 Differing Site Conditions. Contractor has received the Environmental Report, the Geotechnical Report and Permits that were obtained prior to the Effective Date and Contractor has had the opportunity to review the Equipment (other than Owner-Furnished Equipment) incorporated in the Work and the results of the Geotechnical Report and Environmental Report (the foregoing collectively the “ Site Conditions ”). As of the Effective Date, Contractor specifically acknowledges and accepts the Site Conditions and agrees that the Project Schedule shall not be extended and the Contract Price shall not be modified as a result of any conditions present at the Site, except as described in this Section 7.4 or Section 2.12 . To the extent that there are conditions discovered at the Site, and those conditions cause the Site to be materially different than the Site Conditions, including without limitation, any concealed or latent subsurface condition at the Site or any surface or subsurface structures, materials, properties or conditions having historical, cultural, archaeological, religious or similar significance, then Contractor may request a Change Order from Owner for an equitable adjustment of the Contract Price, the Project Schedule, or both of them, in accordance with this ARTICLE VII . Contractor may also request a Change Order in accordance with this ARTICLE VII for an equitable adjustment the Contract Price, the Project Schedule, or both of them, to the extent that the habitat of an endangered or protected species as provided in applicable Law at the Site is materially different from the descriptions contained in the Site Conditions.

7.5 Concurrent Delay. Notwithstanding the provisions of this ARTICLE VII , Contractor shall only be entitled to a Change Order adjusting the Project Schedule, and not the Contract Price, with respect to any Owner Caused Delay or Force Majeure Event to the extent the Work experienced any mutually occurring or concurrent delays, disruptions, interferences and/or accelerations resulting from causes, events, conditions and/or circumstances caused by a breach by Contractor of its obligations under this Agreement.

ARTICLE VIII

Warranties

8.1 Warranties .

(a) Contractor warrants that the Work, including each item of Equipment (other than Owner-Furnished Equipment) incorporated therein, will:

(1) be new and undamaged at the time of installation;

(2) be of a design and grade of its respective kind that is consistent with the Scope of Work;

(3) be free from defects in engineering, materials, construction, and workmanship; and

(4) conform in all respects to all applicable Legal Requirements, Permits, the requirements of the Utility (all as in effect at the time the Work is performed), the Power Purchase Agreement, the Interconnection Agreement, the Solar Lease and all other requirements of the Contract Documents.

(b) Additionally, the modules, inverters and racking systems (the “ Major Equipment ”) shall, to the extent required to be procured by Contractor under this Agreement, be covered by manufacturer warranties with terms equal to or better than those attached as Exhibit T and as approved by Owner. Contractor shall take all necessary steps to ensure that the manufacturer warranties for the Owner-Furnished Equipment are preserved through Substantial Completion.

8.2 Warranty Period . Contractor shall remedy any breach of the warranties set forth in Section 8.1 that manifests in the Facility and for which Owner provides written notice to Contractor within two (2) years after the Substantial Completion Date (the “ Warranty Period ”). When Contractor performs warranty Work after Substantial Completion, the Warranty Period for each item of cure Work performed after Substantial Completion shall be extended until the later of (x) the expiration of the original Warranty Period, and (y) the date that is six (6) months following the completion of such item of cure Work; provided , however , that in no event shall the Warranty Period extend beyond thirty (30) months from the Substantial Completion Date. Owner shall make all Major Equipment manufacturer warranties that are held in Owner’s name available to Contractor during the Warranty Period and shall provide reasonable assistance to Contractor in making warranty claims to Major Equipment manufacturers.

8.3 Remedies .

(a) If a warranty set forth in Section 8.1 hereof is breached and Owner delivers a notice thereof to Contractor before the expiration of the Warranty Period, Contractor shall, upon notice from Owner of a warranty claim, at Contractor’s sole option, and as Owner’s sole and exclusive remedy, repair, replace, and/or correct the applicable Work (including, where required, re-engineering any deficient systems) while minimizing any impact of the failure on the availability and functionality of the Facility at a time reasonably agreed to by Owner. Any such notice from Owner shall state with reasonable specificity the date of occurrence or observation of the alleged breach and the reasons supporting Owner's belief that Contractor is responsible for performing corrective work. Contractor shall have reasonable access to the Facility as necessary to perform its warranty obligations under this Agreement. All costs of or incidental to Contractor’s performance of its warranty obligations shall be borne by Contractor, including the removal, replacement and reinstallation of all Equipment and materials necessary to gain access to defective Work and the repair of any and all damage to any part of the Facility or the Site.

(b) If Contractor fails to diligently commence corrective actions within five (5) Business Days after the later of (i) receipt of notice from Owner of a breach of warranty and (ii) Owner having provided necessary access to remedy the applicable breach, or if Contractor fails to diligently continue for and/or complete the required corrective actions within thirty (30) days (or such longer period as may be required to procure long lead-time Equipment and perform associated corrective action), then Owner may, upon written notice to Contractor, correct such defect(s) itself, in which event Contractor shall be liable for all reasonable costs, charges and expenses incurred by Owner in connection therewith and shall forthwith pay to Owner an amount equal to such costs, charges and expenses within thirty (30) days after receipt of invoice(s) and supporting documentation therefor from Owner. The corrective action by Owner pursuant to this Section 8.3(b) shall not limit or void Contractor’s warranty, provided that the corrective action by Owner is in accordance with the requirements of this Agreement, manufacturer’s warranties and Prudent Industry Standards, and gives due consideration to any Contractor’s reasonable recommendations; provided further , that Owner shall be responsible for any property damage or personal injury caused by Owner or its contractors while performing the applicable corrective action.

(c) If chronic failure of components of the Facility (other than with respect to Owner-Furnished Equipment) occurs during the Warranty Period, Contractor shall diligently investigate the root cause of the failure and repair, replace or adjust to correct the root cause of the chronic failure in accordance with Prudent Industry Standards. For purposes hereof, a “chronic failure” shall mean a substantially similar failure occurring of the same component two or more times within a twelve (12) month period, or a substantially similar failure occurring to more than ten percent (10%) of the same (like-kind) components as comprise part of the Equipment in a six (6) month period.

(d) In the event any adjustment, repair, addition, correction or replacement made by Contractor pursuant to this warranty is ineffective in remedying the defective condition in question, Owner shall so notify Contractor in writing and Contractor shall proceed to conduct efforts consistent with its obligation under the root cause provision of Section 8.3(c) above.

8.4 Warranty Exclusions . The warranty obligations of Contractor do not extend to (a) normal wear and tear or (b) damage or failure caused by (i) material abuse or material neglect of Owner, unless such action or inaction was taken or not taken, as the case may be, in reliance on written instructions provided by Contractor or its Subcontractors, (ii) modifications not performed by or through Contractor or an Affiliate of Contractor in a manner materially inconsistent with or contrary to the written information or written instructions provided by Contractor or its Subcontractors or contained in the vendor manuals provided by Contractor, (iii) the negligent acts or omissions of Owner or its contractors (other than Contractor or any Subcontractor), (iv) the acts or omissions of third parties that are not Affiliated to Owner or Contractor and not engaged by or under the control of Contractor, (v) defects or deficiencies attributable to Force Majeure Events, or (vi) failure by Owner to maintain or operate the Facility materially in accordance with the O&M Manual (but excluding, in the case of this clause (vi), any such failure on account of any action or omission by an Affiliate of Contractor acting as the operations and maintenance provider for the Facility).

8.5 Subcontractors’ and Vendors’ Warranties . Without limiting Contractor’s own warranties hereunder, Contractor shall also, for the benefit of Owner, obtain from all Subcontractors and Equipment vendors (other than vendors of Owner-Furnished Equipment) twenty-four (24) month repair and replacement warranties and guarantees (provided that twenty-four (24) month warranties and guarantees are available on commercially reasonable terms, but in no event shall such warranties from Major Subcontractors be for a term of less than twelve (12) months) or for longer time period covered by a special warranty provided by a vendor as a normal part of the purchase, with respect to Equipment and services provided by such Subcontractors and vendors, which warranties shall cover the removal, repair and replacement of the Equipment under such warranties. No warranty from a Subcontractor may be amended, modified or otherwise discharged (except in accordance with the expiration thereof) if such amendment, modification or discharge would be reasonably expected to affect such warranty after the Warranty Period. Upon Substantial Completion of the Facility, Contractor shall assign to Owner all warranties and guarantees from all Subcontractors and vendors with respect to the Facility; provided that notwithstanding such assignment, Contractor shall be entitled to enforce each such warranty through the end of the Warranty Period. Owner shall cooperate with Contractor and make such warranties and guarantees available to Contractor in connection with Contractor’s performance of its warranty obligations hereunder. Owner shall also have the right, but not the obligation, to proceed directly against any Subcontractor or vendor under their warranties or guarantees, and, to the extent Owner is able to obtain performance from such Subcontractor or vendors of any matters that are subject to Contractor’s warranty obligations hereunder, such performance shall satisfy Contractor’s warranty obligations with respect to the Work performed. Neither Contractor, nor its Subcontractors, nor any Person under Contractor’s control shall take any action which could release, void, impair or waive any warranties or guaranties on Equipment, materials or Work that it procures from other Persons.

8.6 NO IMPLIED WARRANTIES . EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, CONTRACTOR MAKES NO WARRANTIES OR GUARANTEES, EXPRESS OR IMPLIED, AND CONTRACTOR DISCLAIMS ANY WARRANTY OR GUARANTEE IMPLIED BY LAW, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES OF CUSTOM OR USAGE.

ARTICLE IX

Limitations On Liability

9.1 Aggregate Limit of Liability .

(a) Contractor’s total liability for liquidated damages hereunder shall not exceed the following limits:

(i) for Delay Damages, ten percent (10%) of the Contract Price;

(ii) for Performance Liquidated Damages, fifteen percent (15%) of the Contract Price; and

(iii) for Delay Damages and Performance Liquidated Damages in the aggregate, twenty percent (20%) of the Contract Price (the “ Liquidated Damages Aggregate Cap ”).

(b) Except as otherwise specifically set forth herein, Contractor’s aggregate liability to Owner, from any and all causes (including all Delay Damages, Substantial Completion Cliff Liquidated Damages and Performance Liquidated Damages payable hereunder and all claims under the warranties described in this Agreement), whether based on contract, tort (including negligence), strict liability or any other cause of action, shall in no event exceed the Contract Price provided , however , that the foregoing limitation shall not apply to acts of gross negligence, willful misconduct or fraud by Contractor, amounts transferred to Owner pursuant to Section 2.5(k)(i) or Contractor’s indemnification obligations under Section 5.8 and ARTICLE X . Contractor’s total liability for purposes of this Section 9.1 shall be calculated without regard to amounts received by Contractor in respect of any of the warranties and guarantees of the Subcontractors and vendors obtained in accordance with Section 8.5 or any manufacturer warranties obtained pursuant to Section 8.1 and liabilities excluded from the Contractor’s aggregate liability limitation hereunder by the proviso to the immediately preceding sentence. Owner’s aggregate liability to Contractor, from any and all causes, whether based on contract, tort (including negligence), strict liability or any other cause of action, shall in no event exceed the Contract Price, provided however , that the foregoing limitation shall not apply to acts of gross negligence, willful misconduct or fraud by Owner or Owner’s indemnification obligations under ARTICLE X . Owner’s total liability for purposes of this Section 9.1 shall be calculated without regard to claims made, or amounts received, in respect of liabilities excluded from the Owner’s aggregate liability limitation hereunder by the proviso to the immediately preceding sentence.

9.2 Direct Damages Only . EXCEPT FOR CONTRACTOR’S LIABILITY FOR DELAY DAMAGES, SUBSTANTIAL COMPLETION CLIFF LIQUIDATED DAMAGES, Performance Liquidated Damages, AND ANY LIABILITIES TO A THIRD PARTY FOR WHICH A PARTY IS SEEKING INDEMNIFICATION HEREUNDER, NO PARTY SHALL BE LIABLE FOR SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES OR LOST PROFITS, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY, OTHER LAW OR OTHERWISE AND WHETHER OR NOT ARISING FROM THE OTHER PARTY’S SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT.

9.3 Intent . Except in cases of fraud, willful misconduct or gross negligence, the Parties intend that the waivers and disclaimers of liability, releases from liability, limitations and apportionments of liability, and indemnity and hold harmless provisions expressed throughout this Agreement shall apply even in the event of the fault, negligence (in whole or in part), strict liability or breach of contract of the Party released or whose liability is waived, disclaimed, limited, apportioned or fixed by any such provision, and shall extend to such Party’s Affiliates and its and their partners, shareholders, directors, officers, employees and agents. The Parties also intend and agree that such provisions shall continue in full force and effect notwithstanding the completion, termination, suspension, cancellation or rescission of this Agreement.

ARTICLE X

INDEMNIFICATION

10.1 Contractor Indemnity . To the fullest extent permitted by Law, Contractor shall indemnify, defend and hold harmless the Owner Indemnified Parties from and against any and all third-party claims for losses, damages, expenses and liabilities, including fines, penalties, court costs and reasonable attorneys’ fees sought by the third party (collectively, “ Claims ”) made against any Owner Indemnified Party in connection with or related to (a) any breach or violation of or default under this Agreement or any applicable Legal Requirements by, or (b) the fault, willful misconduct, or negligent acts or omissions of, in each case of (a) and (b), to the extent of the fault, act or omission of the Contractor or Subcontractors or their respective employees, agents or others under their control, provided, however, that in no event shall Contractor be obligated under this Section to the extent such Claims arise due to the negligence or willful misconduct of the Owner Indemnified Parties.

10.2 Intellectual Property Indemnity .

(a) No Infringement . Contractor represents and warrants to Owner that the Equipment (other than Owner-Furnished Equipment) and all specifications prepared or to be prepared by or on behalf of Contractor in connection with the Facility will not infringe any patent, patent pending, trademark, copyright, or any other intellectual property rights (hereinafter referred to separately and collectively as “ Proprietary Interest ”) and no infringement of any Proprietary Interest has been asserted by any third party with respect to the Equipment (other than Owner-Furnished Equipment) or any specifications prepared or to be prepared by or on behalf of Contractor in connection with the Facility. For the avoidance of doubt, the representation and warranties contained herein do not apply to any infringement claims to the extent related to Owner-Furnished Equipment.

(b) Indemnification by Contractor . Contractor agrees to indemnify, defend, and hold harmless Owner Indemnified Parties from and against any and all Claims arising out of or relating to any infringement or the improper use of any Proprietary Interest which may occur in connection with Contractor’s or any Subcontractor’s or vendor’s performance of the Work pursuant to this Agreement, except with respect to infringement claims related solely to the Owner-Furnished Equipment.

(c) Removal of Injunctions . If Owner is enjoined from completion of the Facility or any part thereof, or from the use, operation or enjoyment of the Facility, the Equipment, or any part thereof as a result of any claim, legal action or litigation of the type described in Section 10.2(b) , Contractor shall promptly arrange, in each case at no cost to Owner, to have such injunction removed, or to substitute non-infringing Equipment or processes, or to modify such infringing Equipment or processes or the Facility so they become non-infringing, provided that Owner may, at its option and without thereby limiting any other right it may have hereunder or at law or in equity, require Contractor to supply, temporarily or permanently, Equipment not subject to such injunction and not infringing any Proprietary Interest or to remove all such Equipment and refund the cost thereof to Owner or to take such steps as may be necessary to ensure compliance by Owner with such injunction, all to the satisfaction of Owner and all without cost or expense to Owner.

10.3 Environmental Indemnity . Notwithstanding any other provision hereof, to the fullest extent permitted by Law, Contractor shall indemnify, defend and hold harmless the Owner Indemnified Parties from and against all Claims arising out of or relating to any violations of any Permits or Environmental Laws, including the Release at, on, above, below or near the Site or in connection with the Work, of any Hazardous Materials to the extent such violation or Release related to pre-existing Hazardous Materials that were negligently Released on the Site by a Contractor or a Subcontractor, Hazardous Materials brought onto the Site by Contractor or a Subcontractor or if such violation or Release resulted from a violation by Contractor of its obligations under Section 2.4 .

10.4 Owner’s Indemnity . To the fullest extent permitted by Law, Owner shall indemnify, defend and hold harmless the Contractor Indemnified Parties from and against any and all Claims made against any Contractor Indemnified Party in connection with or arising from:

(a) any third-party claim for physical or other damage to or physical destruction of property or death of or bodily injury to any Person in connection with or related to (i) any breach or violation of or default under this Agreement or any applicable Legal Requirements by, or (ii) the fault, willful misconduct, or negligent acts or omissions of, in each case of (i) and (ii), the Owner Indemnified Parties, or their respective agents or employees or others under their control;

(b) any Proprietary Interest relating to Owner-Furnished Equipment; and

(c) any violations of any Permits or Environmental Laws, including the Release at, on, above, below or near the Site or in connection with the Work, of any Hazardous Materials to the extent such violation or Release (i) occurred prior to the Effective Date or (ii) is caused by any Owner Indemnified Party or any Person engaged by or under the control of Owner (other than Contractor and Subcontractors) after the Effective Date,

provided, however, that in no event shall Owner be obligated under this Section to the extent such Claims arise due to the negligence or willful misconduct of the Contractor Indemnified Parties.

10.5 Defense of Claims . The indemnifying Party shall have the right to defend any indemnified Party with counsel (including insurance counsel) of the indemnifying Party’s selection reasonably satisfactory to the indemnified Party, with respect to any Claims within the indemnification obligations hereof; provided that the indemnified Party shall have the right to be represented therein by advisory counsel of its own selection and at its own expense. If the defendants in any such action include both the indemnifying Party and the indemnified Party, and (i) if the indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are inconsistent with those available to the indemnifying Party, (ii) any settlement is reasonably likely to involve injunctive, equitable or prospective relief or to materially and adversely affect the indemnified Party’s business or operations other than as a result of monetary damages, or (iii) the indemnified Party reasonably believes that the matter in question involves potential criminal liability, then the indemnified Party shall have the right to select separate counsel to participate in the defense of such action on its own behalf and at the indemnifying Party’s expense. An indemnified Party shall give the indemnifying Party prompt written notice of any asserted Claims or actions indemnified against hereunder and shall cooperate in the defense of any such Claims or actions. Without the prior written consent of the indemnified Party, which consent shall not be unreasonably withheld, the indemnifying Party shall not settle any Claims or actions in a manner that would require any action or forbearance from action by, or result in any judgment, including but not limited to criminal liability against, any indemnified Party. If the indemnifying Party fails to assume or diligently prosecute the defense of any Claim in accordance with this ARTICLE X , then the indemnified Party shall have the absolute right to control the defense of such Claim and the right to settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate any action, Claim, suit, investigation or proceeding for which indemnity is afforded hereunder, and the fees and expenses of such defense, including reasonable attorneys’ fees of the indemnified Party’s counsel, and any amount determined to be owed by the indemnifying Party pursuant to such Claim shall be borne by the indemnifying Party, provided that the indemnifying Party will be entitled to participate in, but not control such defense.

ARTICLE XI

INSURANCE

11.1 Contractor Insurance . Prior to commencing any Work through the Substantial Completion Date (except with respect to the Commercial General Liability Insurance, Products Completed Operations and Professional Liability Insurance coverages required by Sections 11.1(a) and 11.1(e) respectively, which shall continue until the second anniversary of such date), Contractor shall provide and maintain, or cause to be maintained, with insurers of recognized responsibility authorized to do business in the state in which the Site is located, assigned an A.M. Best rating of no less than A VII , the following insurance which shall include the minimum coverages and limits set forth below.

(a) Commercial General Liability Insurance (with coverage consistent with ISO Form CG 00 01 12 07 or its equivalent) with a limit of not less than $1,000,000 per occurrence and $2,000,000 per project or per location in the aggregate per product and completed operations, and a deductible or self-insured retention not to exceed $25,000 per occurrence, covering liability for bodily injury and property damage, arising from premises, operations, independent contractors, personal injury/advertising injury, contractual liability, and products/completed operations for not less than two (2) years from the Substantial Completion Date .

(b) Commercial Automobile Liability Insurance, including coverage for liability arising out of the use of owned (if any), non-owned, leased or hired automobiles, for both bodily injury and property damage in accordance with applicable Legal Requirements, with a limit of not less than $1,000,000 combined single limit per occurrence .

(c) Worker’s Compensation Insurance, with statutory limits, covering all of Contractor’s employees, on terms and conditions as required by applicable Law and imposed by worker’s compensation, occupational disease or similar Laws, including the Longshore and Harbor Workers’ Act, the Federal Employers’ Liability Act and the Jones Act, if applicable; provided that this Section 11.1(c) shall only apply to Contractor if Contractor has employees.

(d) Employers’ Liability Insurance with limits of not less than $1,000,000 each accident for bodily injury by accident, $1,000,000 each employee for bodily injury by disease, and $1,000,000 policy limit.

(e) Professional Liability Insurance, with limits of no less than $10,000,000 per incident and in the aggregate. If any of the Work performed by Contractor or its Subcontractors includes the rendering of professional services including, but not limited to, architectural, engineering, design, or consulting services, Contractor shall maintain and/or require any Subcontractor involved in the same or similar services, to maintain Professional Liability or Errors and Omissions insurance .

(f) Umbrella or Excess Liability Insurance, with limits of no less than $10,000,000 per occurrence and per project or per location aggregate with coverage in excess of Sections 11.1(a) , (b) and (c) , which coverage shall be materially follow form, however, these liability limits may be met with any combination of primary and Umbrella or Excess Liability Insurance policy limits totaling $10,000,000.

(g) To the extent the Scope of Work includes Hazardous Material, a Pollution Liability Insurance applicable to bodily injury; property damage, including loss of use of damaged property or of property that has not been physically injured or destroyed; cleanup costs; and defense, including costs and expenses incurred in the investigation, defense, or settlement of claims, with limits of $1,000,000 each claim and in the aggregate.

(h) To the extent permitted by applicable Laws, all above-mentioned insurance policies shall provide the following:

(1) Except for Professional Liability Insurance, be primary and non-contributory to any other liability insurance carried by Owner as respects any claims, losses, damages, expenses or liabilities arising out of, relating to in any way, or incident to the Work or any activities of Subcontractors at the Site;

(2) Contain cross-liability coverage as provided under standard ISO Forms’ separation of insureds clause (with the exception of the Workers’ Compensation policy);

(3) Provide for a waiver of all rights of subrogation which Contractor’s or Subcontractor’s insurance carriers might exercise against Owner Indemnified Parties; and

(4) Any Excess or Umbrella liability coverage will not require contribution before it will apply.

(i) The insurance referenced in Section 11.1(a) - (b) and (f) - (g) above shall be endorsed to include the following:

(1) Owner and Facility Lenders, including the directors, officers, Affiliates, agents, representatives, employees, subsidiaries, successors, and assigns of each (“ Additional Insureds ”) shall be named Additional Insured using endorsements approved by Facility Lenders;

(2) The coverage afforded Additional Insureds shall be primary as respects any claims, losses, damages, expenses or liabilities arising out of, relating to in any way, or incident to the Work or any activities of Subcontractors at the Site, regardless whether instituted against Owner alone or jointly with the Subcontractors or others, and noncontributing with any other insurance maintained by Additional Insureds; and

(3) To the extent commercially available, Owner and Facility Lenders shall be given thirty (30) days advance written notice of cancellation or non-renewal of the policy by the insurer, except then (10) days’ notice for cancellation due to non-payment of premium. Notice of cancellation shall be sent to the Owner and Facility Lenders.

11.2 Subcontractor Insurance . Contractor shall require all first-tier Subcontractors to comply with the insurance requirements set forth in Sections 11.1(a) , (b) , (c) (without giving effect to the proviso in Section 11.1(c) ) and (d) . Contractor shall require all Subcontractors to include provisions in all lower-tier Subcontracts requiring such lower-tier Subcontractors to maintain insurance in accordance with standard industry practice for similar operations and comply with such insurance requirements. Contractor shall obtain insurance certificates from each Subcontractor and shall provide such insurance certificates to Owner upon request.

11.3 Additional Requirements .

(a) Prior to commencement of Work on Site under this Agreement, Contractor shall provide Owner with certificates of insurance evidencing compliance with the foregoing requirements relating to insurance policies to be obtained and maintained by Contractor, accompanied by copies of the required endorsements. Any failure of such certificates to conform to the contractual requirements specified in this ARTICLE XI shall not result in a waiver by Owner of any rights under this Agreement or Contractor’s required insurance and indemnity obligations herein and such obligations shall continue in full force and effect.

(b) All coverage required hereunder shall be kept in full force and effect during the performance of the Work, provided, however , products/completed operations coverage shall continue for two (2) years after the Substantial Completion Date and if any liability policy is written on a claims made basis, (i) the retroactive date may not be advanced after the date of the Notice to Proceed and (ii) coverage shall be maintained in full force and effect for two (2) years after termination of this Agreement, which coverage may be in the form of tail coverage or extended reporting period coverage.

(c) If Contractor fails to comply with its obligations as specified in this ARTICLE XI , Owner shall have the right, but not the obligation, to procure the required insurance coverage at Contractor’s expense without in any way compromising or waiving any right or remedy at law or in equity and Contractor shall not be relieved of or excused from the obligation to obtain and maintain such insurance amounts and coverages. All such costs incurred by Owner shall be promptly reimbursed by Contractor and/or may be withheld from any payment due Contractor.

(d) To the extent allowed by Law, Contractor shall furnish Owner with accident report(s) covering accidents occurring in connection with or as a result of the performance of the Work within five (5) Business Days of the occurrence of such an accident.

(e) Contractor shall be responsible for any deductibles or self-insured retentions applicable to the insurance provided in compliance with ARTICLE XI , except as described in Section 11.4 .

(f) Insurance coverage provided by Contractor under this ARTICLE XI shall not include any endorsement limiting coverage available to Owner which is otherwise required by this ARTICLE XI .

(g) Contractor shall notify Owner in writing when coverages required herein have been reduced as a result of claim payments, expenses or both.

(h) None of the requirements contained in this ARTICLE XI as to types, limits, or Owner’s approval of insurance coverage to be maintained by Contractor are intended to and shall not in any manner limit, qualify or quantify the liabilities and obligations assumed by Contractor hereunder, in any other agreement with Owner, or as otherwise provided by applicable Law.

(i) The Commercial General Liability policy shall contain standard cross-liability (separation of insureds) provisions.

(j) Contractor shall and hereby waives all rights of subrogation against the Owner Indemnified Parties.

(k) In addition, Contractor shall cause each policy to include the following severability provisions: (i) a provision requiring the insurers to undertake to each insured that the policy will not be invalidated as regards the rights and interests of such insured and that the insurers will not seek to avoid liability under this policy because of any act, neglect, error or omission made by any other insured including any failure by any other insured to disclose any material fact, circumstance or occurrence, any misrepresentation by any other insured or any breach or non-fulfillment by any other insured of any condition, warranty, or provisions contained in the policy; and (ii) a provision requiring the insurers to agree that no insured shall be penalized or prejudiced in any way by any unintentional or inadvertent misrepresentation, non-disclosure, want of due diligence or breach of any declaration, terms, condition or warranty, of a policy (together the “ Relevant Matter "), except as regards to the individual insured responsible for the Relevant Matter if that insured fails to notify the insurers or the brokers through whom the policy was placed as soon as reasonably practicable after the management or managers of that insured become aware or are made aware of the Relevant Matter.

(l) Failure of Contractor to provide insurance as herein required or failure of Owner to require evidence of insurance or to notify Contractor of any breach by Contractor of the requirements of this ARTICLE XI shall not be deemed to be a waiver by Owner of any of the terms and conditions of this Agreement, nor shall they be deemed to be a waiver of the obligation of Contractor to indemnify, defend, and hold harmless Owner as required herein. The obligation to procure and maintain any insurance required is a separate responsibility of Contractor and independent of the duty to furnish a copy or certificate of such insurance policies.

11.4 Builders All-Risk Insurance . From and after the Effective Date and continuing until the Substantial Completion Date and with insurance companies rated “A-” or better, with a minimum size rating of “X” by Best’s, Owner shall purchase and maintain builders’ risk insurance, on an “all-risk” full replacement value basis with extended coverage, including perils or causes of loss customarily covered under an all-risk policy providing coverage for the Facility and the Work, with a deductible of no greater than $50,000 and with customary endorsements (including but not limited to endorsements, minimum sub-limits and coverage extensions). This insurance shall also cover Equipment or other property stored off the Site including transit. The limit of such insurance shall be equal to the 100% of the replacement cost value of the property under construction. Such builder’s all risk insurance shall (i) include as additional insureds Contractor, Subcontractors and Guarantor, but only to the extent of their interests, and (ii) name Facility Lender as loss payee as its interests may appear, (iii) include without limitation coverage for inland transit and off-site storage risks, mechanical and electrical break down including all forms of testing and commissioning required to complete the Works plus resulting damage arising out of design error, defects of materials or faulty workmanship (Leg 3/96 or better) and (iv) include with sub-limits as per market practice: debris removal (5% of the limit), inland transits in such amounts to satisfy replacement cost values of the shipment, off-site storage in such amounts to satisfy replacement cost values of the largest property area, CAT perils including wind, windstorm, flood, earthquake, extra expense, expediting expenses, ordinance or low coverage including the increased cost of construction to comply with the enforcement of any law that regulates the construction or repays of damaged property including the cost to demolish undamaged portions of the Works, with a sublimit not lower than $3,000,000, strike, riot, civil commotion, vandalism and malicious mischief.

(a) This policy shall be primary and non-cancellable, and shall include automatic reinstatement of limits following each loss and shall not include a serial loss clause.

(b) During the period between the Effective Date and the Substantial Completion Date, Contractor shall be solely responsible for payment of any deductibles for claims relating to builder’s all-risk insurance but for events attributable to the Contractor and its Subcontractors with a cap equal to the sum of (x) $10,000 plus (y) fifty percent (50%) of the remaining deductible per event and as per their responsibilities under this Agreement, provided that with respect to physical loss or damage caused by the negligence of Owner or events attributable to Owner as per their responsibilities under the Agreement, any required payments of the deductibles for claims relating to builders’ all-risk insurance shall be the responsibility of Owner. Contractor and Owner and their insurers waive all rights of subrogation against each other and any Subcontractors.

(d) In case of damage in which the Facility Lender is the loss payee, the Owner and Contractor shall meet to discuss whether the Contractor should commence reinstatement of the affected Works. In the event the Owner decides not to reinstate the affected Works as required in the Contract, the affected Works shall be excluded from the Contractor's scope of work and from the Contractor's responsibilities. If the Owner instructs to reinstate the affected Works or any part, the Owner shall pay the insurance proceeds to the Contractor for such reconstruction to the extent that the relevant insurance claim is not paid directly to the Contractor. Additionally, any Works which have been executed but are damaged, unpaid and/or not yet included within the monthly invoice shall be payable immediately.

(e) The Owner shall provide a copy of the cover notes or other evidence of cover in respect of such insurances prior to the Notice to Proceed and copies of the insurance policies not later than thirty (30) Days after the issuance of the Notice to Proceed.

(f) Separate from and in addition to the foregoing, from and after the Substantial Completion Date, Owner shall purchase and maintain All Risk Property Damage/Machinery Breakdown Insurance, in an amount sufficient to cover one hundred percent (100%) of the replacement cost of the Facility. Owner shall provide a copy of the policy on or prior to the date on which Owner issues notice pursuant to Section 4.5(b) confirming that Substantial Completion has been achieved. The O&M Contractor shall be responsible for the deductibles for such policies but only for events attributable to Contractor as per their responsibilities under the Agreement and with a cap of $10,000 per event and in the aggregate.

ARTICLE XII

DEFAULT AND REMEDIES; termination

12.1 Owner Events of Default . The following shall constitute events of default on the part of Owner (each, an “ Owner Event of Default ”) under this Agreement:

(a) If Owner fails to make any undisputed payment required hereunder within thirty (30) days after written notice thereof from Contractor;

(b) If any representation or warranty of Owner in this Agreement proves to have been false or misleading in any material respect when made, and Owner has not, within thirty (30) days after written notification thereof from Contractor, either fully remedied, or commenced and diligently pursued the remedy of, all adverse impacts on Contractor resulting therefrom; provided that such thirty (30) day period may be extended by sixty (60) days so long as Owner has commenced and is at all times diligently pursuing such remedy;

(c) If Owner makes a general assignment for the benefit of its creditors (except as permitted pursuant to Section 13.2 ), or if a receiver is appointed on account of the insolvency of Owner, or if Owner files a petition seeking to take advantage of any other Law relating to bankruptcy, insolvency, reorganization, winding up or composition of or readjustment of debts and, in the case of any such proceeding instituted against Owner (but not by Owner) such proceeding is not dismissed within sixty (60) days of such filing; or

(d) If Owner fails to comply with any material provision of this Agreement not otherwise set forth as an Owner Event of Default in this Section 12.1 and fails to cure or remedy such failure within thirty (30) days after notice and a written demand is made by Contractor to Owner to cure the same or, if such failure cannot be cured within thirty (30) days, Owner fails to commence to cure such breach within thirty (30) days after such notice and written demand and thereafter diligently pursue such cure to completion, which cure shall in no event be later than sixty (60) days after such notice.

12.2 Contractor Events of Default . The following shall constitute events of default on the part of Contractor (each, a “ Contractor Event of Default ”) under this Agreement:

(a) If Contractor or Guarantor fails to make any undisputed payment required hereunder or under the Parent Guarantee (as applicable) within thirty (30) days after written notice thereof from Owner;

(b) Contractor incurring liability for Delay Damages and Performance Liquidated Damages in the aggregate equal to the Liquidated Damages Aggregate Cap;

(c) Failure of Substantial Completion with respect to the Facility to occur within sixty (60) days of the Guaranteed Substantial Completion Date;

(d) If any representation or warranty of Contractor in this Agreement or Guarantor under the Parent Guarantee (as applicable) proves to have been false or misleading in any material respect when made, and Contractor has not, within thirty (30) days after written notification thereof from Owner, fully remedied all adverse impacts on Owner resulting therefrom; provided that such thirty (30) day period may be extended by sixty (60) days so long as Contractor or Guarantor (as applicable) has commenced and is at all times diligently pursuing such remedy;

(e) If Contractor or Guarantor makes a general assignment for the benefit of its creditors, or if a receiver is appointed on account of the insolvency of Contractor or Guarantor, or if Contractor or Guarantor files a petition seeking to take advantage of any other Law relating to bankruptcy, insolvency, reorganization, winding up or composition of or readjustment of debts and, in the case of any such proceeding instituted against Contractor or Guarantor (but not by Contractor or Guarantor) (as applicable), such proceeding is not dismissed within sixty (60) days of such filing;

(f) If Contractor fails to maintain insurance pursuant to ARTICLE XI , and Contractor has not, within (5) Business Days obtained replacement insurance;

(g) If Contractor fails to comply with any material provision of this Agreement, or Guarantor fails to comply with any material provision of the Parent Guarantee (as applicable), which is not otherwise defined as a Contractor Event of Default in this Section 12.2 and fails to cure or remedy such failure within thirty (30) days after notice and a written demand is made by Owner to Contractor and, if applicable, Guarantor, to cure the same or, if such failure cannot be cured within thirty (30) days, Contractor or Guarantor (as applicable) fails to commence to cure such breach within thirty (30) days after such notice and written demand and thereafter diligently pursue such cure to completion, which cure shall in no event be later than sixty (60) days after such notice;

(h) either (i) any Payment Bond or Performance Bond ceases to be in full force and effect except that if Contractor discovers or is notified that, due to no fault of Contractor, the Payment Bond or Performance Bond is terminated or otherwise invalid, Contractor is entitled to twelve (12) Business Days to obtain a replacement bond, or (ii) the Parent Guarantee ceases to be in full force and effect, unless Contractor replaces such Parent Guarantee with an alternative guarantee from an Affiliate or other Person that is as creditworthy as Guarantor within twelve (12) Business Days of the original Parent Guarantee ceasing to be in full force and effect;

(i) Failure of Mechanical Completion with respect to the Facility to occur within sixty (60) days of the Guaranteed Mechanical Completion Date; or

(j) If Contractor fails to comply with the terms of an agreed Remedial Action Plan and fails to cure or remedy such failure within five (5) Business Days after notice and a written demand is made by Owner to Contractor to cure the same.

12.3 Contractor Remedies upon Owner Event of Default . Upon the occurrence and during the continuation of an Owner Event of Default, Contractor may terminate this Agreement upon ten (10) days written notice to Owner, and Owner shall pay to Contractor an amount equal to the following:

(a) the value, in accordance with the schedule of values included in Exhibit E , of all Work performed by Contractor up to the date of such termination and for which Contractor has not previously been paid, plus payment for progress achieved on any partially completed Work, provided that in each case such Work conforms to the requirements of this Agreement, and

(b) all Direct Costs incurred by Contractor in connection with the termination of this Agreement, including in connection with (i) Equipment and materials reasonably ordered for the Work which have been delivered to Contractor or for which Contractor is legally liable to pay or accept delivery (title to all of which shall pass to Owner upon payment for same); (ii) payments made or to be made by Contractor to any Subcontractors or suppliers in connection with the termination of any subcontracts or supply arrangements with respect to the Project, including any cancellation charges; (iii) other termination-related costs, including demobilization costs, and (iv) protecting the Work and leaving the Site in a clean and safe condition as directed by Owner.

Contractor’s claim (which shall contain detailed supporting documentation) shall be submitted within thirty (30) days of the effective date of termination under this Section 12.3 . Contractor waives any claims for any other damages due to a termination pursuant to this Section 12.3 and the above amounts shall constitute Contractor’s sole remedy for such termination.

12.4 Owner Remedies upon Contractor Event of Default .

(a) Generally . Upon the occurrence and during the continuation of a Contractor Event of Default, in addition to any or all other remedies available at law or at equity, all of which shall be cumulative, Owner may terminate this Agreement upon ten (10) days written notice to Contractor. If any termination for cause by Owner pursuant to this Section 12.4 is ultimately determined to have been wrongful, then such termination shall be deemed a termination for convenience pursuant to Section 12.5 , and Contractor’s sole remedy shall be the receipt of the amounts set forth in Section 12.5 .

(b) Rights on Termination . If Owner terminates this Agreement pursuant to this Section 12.4 , upon Owner’s request, Contractor (i) shall withdraw from the Site, (ii) shall assist Owner in preparing an inventory of all Equipment located on the Site, in storage or in transit, (iii) shall assign to Owner (or to any replacement contractor) such of Contractor’s subcontracts (including warranties), purchase orders and Permits as Owner may request, and (iv) subject to Section 6.2 , shall deliver and make available to Owner all information, drawings, specifications documents, patents, licenses of Contractor (whether or not such information, drawings, specifications documents, patents, and licenses are complete) and any proprietary components related to the Work reasonably necessary to permit Owner to complete or cause the completion of the Work, and in connection therewith Contractor authorizes Owner and its agents to use such information in completing the Work and operating the Facility. Contractor shall remove all materials, equipment, tools, and instruments used by and any debris or waste materials generated by Contractor in the performance of the Work as Owner may direct. For those items of Work that are completed as of the date of termination, Contractor shall provide Owner with a warranty for such Work with the same protections and remedies as set forth in ARTICLE VIII for a period of one (1) year commencing on the date of termination. Owner may employ any other qualified Person, firm, or corporation to finish the Work by whatever method Owner may deem expedient, and may undertake such reasonable expenditures as will best accomplish the timely completion of the Work. In such event Contractor shall not be entitled to receive any further payments under this Agreement.

(c) Determination of Completion Costs . Within a reasonable time after a termination of this Agreement pursuant to this Section 12.4 , Owner shall provide Contractor with a schedule of values estimating the cost to complete the Work. As soon as practicable after Final Acceptance of the Facility after a termination of this Agreement pursuant to this Section 12.4 , Owner shall determine the Completion Cost. If the Completion Cost exceeds the unpaid portion of the Contract Price at the time of the termination of this Agreement, then Contractor shall pay to Owner the amount of such excess within thirty (30) days following receipt of Owner’s demand for such payment, which shall be accompanied by reasonable supporting documentation. Under such circumstances, Owner shall not be required to pay additional amounts to Contractor.

12.5 Termination for Convenience .

(a) Owner may terminate this Agreement for convenience in whole or in part (including by reducing the Scope of Work) on ten (10) days written notice to Contractor. Upon receipt of any such notice, Contractor shall, unless the notice directs otherwise:

(i) immediately discontinue the Work on the date and to the extent specified in such notice;

(ii) place no further orders or subcontracts for Equipment or services except as may be necessary for completion of such portion of the Work that is not discontinued;

(iii) promptly make every reasonable effort to procure cancellations upon terms satisfactory to Owner of all orders, subcontracts, and rental agreements to the extent they relate to the performance of the Work that is discontinued on terms that mitigate the cost thereof; and

(iv) thereafter execute only that portion of the Work as may be necessary to preserve and protect Work already in progress and to protect Equipment at the Site or in transit thereto.

(b) In the event of termination for convenience by Owner under this Section 12.5 , Contractor shall be entitled to payment of the amounts that would be due Contractor for its termination of the Agreement pursuant to Section 12.3 , above. Contractor's claim (which shall contain detailed supporting documentation reasonably approved by Owner) shall be submitted within thirty (30) days of the effective date of termination under this Section 12.5 . Contractor waives any claims for any other damages due to a termination pursuant to this Section 12.5 and the above amounts shall constitute Contractor's sole remedy for such termination.

12.6 Mitigation upon Breach . Each Party shall use reasonable efforts to mitigate any damage, expense or liability incurred as a result of the other Party’s breach of this Agreement.

12.7 Termination Prior to NTP. Owner is entitled to terminate this Agreement for convenience prior to issuance of the Notice to Proceed to Contractor. Owner will have no obligation to Contractor under this Agreement until the Owner issues the Notice to Proceed, except that, upon issuance of a Limited Notice to Proceed, Owner shall be obligated to make the payments for the Work specified therein and actually performed in the manner required by such Limited Notice to Proceed.

ARTICLE XIII

ASSIGNMENT

13.1 General . Subject to Section 13.2 , neither Party shall assign or in any other manner transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party. Any purported assignment or transfer without such consent, whether voluntary or involuntary, by operation of Law, under legal process or proceedings, by receivership, in bankruptcy or otherwise, is void.

13.2 Permitted Assignments . Notwithstanding Section 13.1 , Owner may, without Contractor’s consent, but with written notice to Contractor: (i) assign this Agreement to (A) any creditworthy subsidiary, Affiliate or special purpose company formed by Owner or any Affiliate for the purpose of developing and owning the Facility, or (B) a purchaser of all or substantially all of Owner’s assets or Owner’s successor in interest as part of a corporate reorganization, consolidation, take-over, merger or other business combination, or (ii) collaterally assign this Agreement as security to any Facility Lender; provided , however , that no assignment of this Agreement by Owner pursuant to the foregoing sub-clauses (i) or (ii) shall release Owner from any payment obligations and liabilities under this Agreement, and, in the case of sub-clause (i), Owner shall, upon reasonable request by Contractor, deliver a guarantee, in form and substance acceptable to Contractor (acting reasonably), to guarantee all such obligations and liabilities. A permitted assignee of Owner under this Section 13.2 shall be bound by the obligations of this Agreement (upon consummation of a foreclosure of its security interest in the case of a Facility Lender) and shall, upon Contractor’s request, deliver a written assumption of Owner’s rights and obligations under this Agreement to Contractor.

ARTICLE XIV

REPRESENTATIONS

14.1 General Representations and Warranties . Each Party hereby represents and warrants to the other Party that:

(a) It is duly organized, validly existing and in good standing under the Laws of the state of its formation and is duly qualified to do business in the jurisdiction where the Site is located.

(b) It has all necessary power and authority to execute, deliver and perform its obligations under this Agreement; its execution, delivery and performance of this Agreement have been duly authorized by all necessary action on its part; and this Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or moratorium or other similar Laws relating to the enforcement of creditors’ rights generally and by general equitable principles.

(c) As of the Effective Date, (i) it is not in violation of any applicable Legal Requirement, or any judgment entered by any national, regional or local Governmental Authority, which violations, individually or in the aggregate, would adversely affect its performance of any obligations under this Agreement and (ii) there are no legal or arbitration proceedings or any proceeding by or before any Governmental Authority, now pending or (to its best knowledge) threatened against it which, if adversely determined, could have a material adverse effect upon its financial condition, operations, prospects or business, as a whole, or its ability to perform under this Agreement.

(d) No authorization, approval, exemption, or consent of or by any Person is required by it in connection with the execution, delivery, and performance of this Agreement.

(e) The execution and delivery of this Agreement, the consummation of the transactions herein contemplated and compliance with the terms and provisions hereof by it will not conflict with or result in a material breach of, or require any consent under, any of its constitutive documents, or any applicable Law, or any agreement or instrument to which it is a party or by which it is bound or to which it is subject, or constitute a material default under any such agreement or instrument.

14.2 Additional Representations and Warranties of Contractor . Contractor hereby represents and warrants to Owner that:

(a) Contractor has (either directly or through its Subcontractors) all the required authority, ability, skill, experience and capacity necessary to perform the Work and diligently do so in a timely and professional manner, utilizing sound engineering and design principles, project management procedures, construction procedures and supervisory procedures, all in accordance with applicable Laws, Permits and Prudent Industry Standards.

(b) Subject to the requirements of Sections 2.4 and 2.5(g) , the Contractor Permits either have been obtained by Contractor (or a Subcontractor) and are in full force and effect on the date hereof or will be obtained by Contractor (or a Subcontractor) and will be in full force and effect on or prior to the date on which they are required, under applicable Law, to be in full force and effect, so as to permit Contractor to commence and prosecute the Work to completion in accordance with the Project Schedule.

(c) As of the date on which Contractor becomes a licensed contractor in the State of North Carolina, Contractor shall take all further action, as may be reasonably necessary, to cause such license to remain in full force and effect for the duration of this Agreement.

14.3 Title Company Representations . Because Owner’s title insurance company will seek to provide mechanic’s lien coverage for the benefit of any Facility Lenders, whose mortgage lien(s) may be recorded after the commencement of the Work, Contractor hereby expressly acknowledges that such title insurance company may rely on the certifications contained in any lien waiver delivered by Contractor pursuant to Section 5.7 . Contractor hereby agrees that Contractor shall from time to time execute any reasonable documents requested by Owner in furtherance of and/or confirming the foregoing consent, but the foregoing provisions shall be self-operative without the necessity of further documentation. Additionally, Contractor shall from time to time upon the request of and in the form furnished by Owner and reasonably agreed to by Contractor provide one or more agreements in favor of the title company and/or any holder of a mortgage loan secured by the Site or Owner's interest therein, directly providing to such party the right to rely on the certifications contained in any lien waiver delivered by Contractor pursuant to Section 5.7 and indemnifying such party against those matters for which Contractor has provided an indemnity to Owner under Section 5.8 . Contractor shall include provisions equivalent to this Section 14.3 in each first-tier subcontract. Contractor shall require all Subcontractors to include provisions equivalent to this Section 14.3 in all lower-tier subcontracts.

14.4 Financing Assistance . Contractor shall cooperate with Owner in connection with Owner’s efforts to obtain and maintain any Financing. Without limiting the generality of the foregoing, Contractor: (a) shall execute such typical documents as an engineering, procurement and construction contractor executes in a project finance transaction or as Owner reasonably requests in connection with obtaining and maintaining any Financing, including a consent to assignment, an estoppel certificate and any other certifications and opinions required with respect to the Financing in form and substance reasonably acceptable to Contractor, Owner and the Facility Lender; (b) shall deliver to Owner and the Facility Lender information customarily provided in connection with a project financing in format and content mutually acceptable to the Parties regarding the financial capability of Contractor and facilitate inspections of the Site; (c) shall at Owner’s reasonable request, attend and participate in presentations to actual and potential Facility Lenders; (d) hereby authorizes Owner to (i) provide this Agreement to potential Facility Lenders (subject to Section 16.4 ), and (ii) include a description of the material provisions of this Agreement in any offering circular or document required for the Financing and/or, if the Financing must be registered or otherwise disclosed in accordance with applicable Law, that Owner may, after consultation with Contractor, file this Agreement as an Exhibit to such registration statement or other disclosure; (e) at Owner’s request, shall reasonably cooperate with the Independent Engineer and any rating agencies or credit enhancement entities associated with a Financing; (f) at Owner’s request, shall reasonably cooperate in connection with Tax-exempt Financing or any Financing or other arrangements effected to reduce Taxes on the Facility or the Work, which cooperation shall not include, or be considered or deemed to be, Tax advice or planning; and (g) shall provide Owner and the Facility Lenders with legal opinions of counsel regarding the execution, delivery and validity of this Agreement, absence of conflicts, and the legal status of Contractor as Owner or any Facility Lender may reasonably request in connection with obtaining and maintaining the Financing, provided that Owner shall reimburse Contractor for any third-party expense reasonably incurred in providing such opinions.

ARTICLE XV

NOTICES; INFORMATION

15.1 Notices . Except as set forth in Section 15.2 , any notice, statement, demand, claim, offer or other written instrument required or permitted to be given pursuant to this Agreement shall be in writing signed by the Party giving such notice and shall be sent by hand messenger delivery or overnight courier service, (or facsimile or electronic mail if mutually acceptable procedures are developed) to the other Party at the address set forth below:

If delivered to Owner, Innovative Solar 31, LLC

c/o VivoPower USA LLC

3824 Cedar Springs Rd. #801-1299

Dallas, TX 75219

Email: dpilotte@vivopower.com

Attn: Chief Financial Officer

With copy to: Stoel Rives LLP

600 University Street, Suite 3600

Seattle, WA 98101

Email: alex.mertens@stoel.com

Attn: Alex Mertens

With copy to: NES US NC-31 LLC

c/o Dixon Advisory USA

140 Broadway, 28th Floor

New York, NY 10005

With copies to (which shall not constitute notice) :

New Energy Solar

PO Box 29

Crows Nest NSW 1585

Australia

Attention: Tom Kline and Liam Thomas

Email: assetmanager@newenergysolar.com.au

Foley & Lardner LLP

777 E. Wisconsin Ave.

Milwaukee, WI 53202-5306

Attention: David W. Clark

If delivered to Contractor, Grupo Gransolar, LLC

C/ Sepulveda 17, PB 1-2.

28108 Alcobendas.

Madrid, Spain

Email: ihigueras@gransolar.com

Attn: Iván Higueras

Each Party shall have the right to change the place to which notice shall be sent or delivered or to specify one additional address to which copies of notices may be sent, in either case by similar notice sent or delivered in like manner to the other Party. All notices shall be effective upon receipt.

15.2 Technical Communications . Any technical or other communications pertaining to the Work shall be between Contractor’s Project Manager and Owner’s Representative or other representatives as agreed by both Parties. Each Party shall notify the other in writing of the names of such representatives.

15.3 Public Announcements . Contractor shall not make any public announcements regarding this Agreement or the transactions contemplated hereby without Owner’s prior written approval, which approval shall not be unreasonably withheld or delayed. Owner shall not make any public announcements regarding this Agreement or the transactions contemplated hereby without Contractor’s prior written approval, which approval shall not be unreasonably withheld or delayed.

ARTICLE XVI

MISCELLANEOUS

16.1 Entire Agreement . This Agreement and the documents executed in connection herewith constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede any prior understandings, negotiations, agreements or representations of the Parties of any nature, whether written or oral, to the extent they relate in any way to the subject matter hereof or thereof.

16.2 Waiver . Any waiver of the provisions of this Agreement must be in writing and shall not be implied by any usage of trade, course of dealing or course of performance. No exercise of any right or remedy by Owner or Contractor constitutes a waiver of any other right or remedy contained or provided by Law. Any delay or failure of a Party to exercise, or any partial exercise of, its rights and remedies under this Agreement shall not operate to limit or otherwise affect such rights or remedies. Any waiver of performance hereunder shall be limited to the specific performance waived and shall not, unless otherwise expressly stated in writing, constitute a continuous waiver or a waiver of future performance.

16.3 Dispute Resolution .

(a) Management Negotiations . The Parties shall use all reasonable efforts to settle disputes through negotiation between authorized members of each Party’s senior management. Either Party may, by written notice to the other Party, request a meeting to initiate negotiations to be held within five (5) Business Days of the other Party’s receipt of such request, at a mutually agreed time and place. If the dispute is not resolved within fifteen (15) Business Days of their first meeting, then the dispute shall be submitted to mediation in accordance with Section 16.3(b) .

(b) Mediation . If any dispute is not resolved by the procedures set forth in Section 16.3(a) , then the Parties shall submit the dispute to mediation before a mutually acceptable mediator. The mediation shall take place in Dallas, Texas pursuant to the Construction Industry Rules of the American Arbitration Association. If the dispute is not resolved by the procedures set forth in this Section 16.3(b) , then either Party may pursue any other remedies available to it at law or in equity.

16.4 Confidentiality .

(a) Neither Party (the “ Receiving Party ”) shall use for any purpose other than performing the Work under this Agreement or owning and operating the Facility, divulge, disclose, produce, publish, or permit access to, without the prior written consent of the other Party (the “ Disclosing Party ”), any confidential information of the Disclosing Party. Confidential information includes, without limitation, this Agreement and Exhibits hereto, all information or materials prepared in connection with the Work performed under this Agreement or any related subsequent agreement, designs, drawings, specifications, techniques, models, data, documentation, source code, object code, diagrams, flow charts, research, development, processes, procedures, know-how, manufacturing, development or marketing techniques and materials, development or marketing timetables, strategies and development plans, customer, supplier or personnel names and other information related to customers, suppliers or personnel, pricing policies and financial information, and other information of a similar nature, whether or not reduced to writing or other tangible form, and any other trade secrets, in each case where such information or material is clearly marked as confidential or where the Receiving Party reasonably assumes under the circumstances that such information or material is considered confidential information of the Disclosing Party. The Receiving Party may grant access to such documentation and information to its respective employees and authorized contractors, subcontractors and agents whose access is necessary to fulfill the terms of this Agreement. Confidential information does not include (a) information known to the Receiving Party prior to obtaining the same from the Disclosing Party; (b) information in the public domain at the time of disclosure by the Receiving Party; or (c) information obtained by the Receiving Party from a third party who did not receive same, directly or indirectly, from the Disclosing Party or otherwise had an unrestricted right to disclose such information. The Receiving Party shall use the higher of the standard of care that the Receiving Party uses to preserve its own confidential information or a reasonable standard of care to prevent unauthorized use or disclosure of such confidential information. Notwithstanding anything herein to the contrary, the Receiving Party has the right to disclose confidential information without the prior written consent of the Disclosing Party: (i) as required by any court or other Governmental Authority, or by any stock exchange the shares of any Party are listed on, (ii) as otherwise required by law, (iii) as advisable or required in connection with any government or regulatory filings, including without limitation, filings with any regulating authorities covering the relevant financial markets, (iv) to its attorneys, accountants, financial advisors or other agents, in each case bound by confidentiality obligations, (v) to banks, investors and other Financing sources and their advisors, in each case if the party receiving the confidential information is bound by the same or similar confidentiality obligations, (vi) in connection with an actual or prospective merger or acquisition or similar transaction where the party receiving the confidential information is bound by the same or similar confidentiality obligations, or (vii) to the United States Department of the Treasury or the Internal Revenue Service in connection with Tax incentives. If a Receiving Party believes that it will be compelled by a court or other Governmental Authority to disclose confidential information of the Disclosing Party, it shall give the Disclosing Party prompt written notice so that the Disclosing Party may determine whether to take steps to oppose such disclosure.

(b) The Parties’ obligations under this Section 16.4 shall terminate on the date that is two years after the earlier to occur of (i) the termination of this Agreement and (ii) the expiration of Warranty Period.

16.5 Signage . Subject to Owner’s prior written approval, which shall not be unreasonably withheld, Contractor may erect signage on the Site indicating its role as designer and builder of the Facility. Contractor may maintain such signage following Final Acceptance for a period as mutually agreed by the Parties and in accordance with applicable Law. Any such signage shall comply with applicable Legal Requirements and shall not interfere with the operation of the Facility.

16.6 Governing Law . This Agreement and all claims arising out of or relating to this Agreement and the transactions contemplated hereby shall be governed by the Laws of the State of North Carolina, without regard to the conflicts of law principles that would result in the application of any Law other than the Law of the State of North Carolina.

16.7 Consent to Jurisdiction . Each of the Parties hereby irrevocably consents and agrees that any legal action or proceedings brought with respect to any dispute arising out of this Agreement shall be brought in, and each Party submits to the jurisdiction and venue of the state and federal courts located in the state and county in which the Facility is located, and by execution and delivery of this Agreement, each of the Parties hereby (i) accepts the non-exclusive jurisdiction of the foregoing courts, (ii) irrevocably agrees to be bound by any final judgment (subject to any appeal) of any such court with respect thereto, and (iii) irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of venues of any suit, action or proceedings with respect hereto brought in any such court, and further irrevocably waives to the fullest extent permitted by Law any claim that any such suit, action or proceedings brought in any such court has been brought in an inconvenient forum. Each of the Parties agrees that a final judgment in any such action or proceeding shall be conclusive (subject to any appeal) and may be enforced in other jurisdictions by suit on the judgment or in any other manner to the extent provided by Law.

16.8 Waiver of Jury Trial . TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

16.9 Time of Performance . Time is of the essence in the performance of each provision of this Agreement.

16.10 Construction . This Agreement is to be construed so as to effectuate the normal and reasonable expectations of a sophisticated buyer and seller of the Equipment and services covered by this Agreement and shall not be construed either for or against either Party. No provision of this Agreement shall be construed or interpreted for or against either Party because such Party drafted or caused its legal representative to draft the provision.

16.11 Headings . The table of contents and section headings contained in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement or affect in any way the meaning or interpretation of this Agreement.

16.12 Status of the Parties . Contractor and its Subcontractors shall be independent contractors to Owner with respect to the Work, irrespective of whether such Subcontractors are approved by Owner, and neither Contractor nor its Subcontractors, nor the employees or agents of either, shall be deemed to be the employees, representatives or agents of the Owner in connection with any matter relating to this Agreement. No provision of this Agreement shall be construed or represented as creating a partnership, trust, joint venture, fiduciary or any similar relationship between the Parties. Contractor shall be responsible for and shall pay all federal, state or local income Taxes, payroll Taxes and self-employment Taxes upon the compensation paid for services rendered under this Agreement, and all other applicable Taxes.

16.13 Parties in Interest . Except as provided in ARTICLE X and Section 14.3 , nothing in this Agreement, whether express or implied, shall be construed to give any Person, other than the Parties, their respective successors and permitted assigns, the Owner Indemnified Parties and the Contractor Indemnified Parties, any legal or equitable right, remedy, claim or benefit under or in respect of this Agreement.

16.14 Further Assurances . Each Party agrees to execute and deliver all further instruments and documents, and take all further action, as may be reasonably necessary to complete performance by the Parties hereunder and to effectuate the purposes and intent of this Agreement. In particular, Contractor shall cooperate with and provide reasonable assistance to Owner, Facility Lenders and the insurers of the Facility and their independent engineering, environmental, financial, legal, technical and other consultants, officers, employees, representatives and agents, in relation to their due diligence, financial, technical, scientific, engineering, accounting, environmental studies, monitoring, inspections, audits, and the creation and administration of milestone and completion tests that shall test the physical, mechanical, legal, reliability, financial, regulatory and other relevant aspects of completion of the Work and the Facility.

16.15 Amendments . Except for a Change Order issued as a directive by Owner pursuant to Section 7.1 , no change, amendment or modification of this Agreement shall be valid or binding upon the Parties unless such change, amendment or modification is in writing and duly executed by both Parties.

16.16 Severability . If any provision of this Agreement is determined to be illegal or unenforceable, such determination will not affect any other provision of this Agreement and all other provisions will remain in full force and effect.

16.17 Conflicting Provisions . In the event of any conflict, error, ambiguity or discrepancy between one or more of (i) the Articles, (ii) the Scope of Work, (iii) any other Exhibit, (iv) Contractor’s design and engineering drawings and (v) any provision of any Law applicable to the performance of the Work or of any standard, specification, manual or code or of any instruction of any Subcontractor supplying any Equipment for the Facility, the identifying Party shall promptly report such conflict, error, ambiguity or discrepancy to the other Party in writing. The following order of precedence in the interpretation or resolution of the applicable conflict, error, ambiguity or discrepancy shall prevail: (i) amendments to this Agreement and Change Orders duly authorized and executed by the Parties; (ii) the terms and conditions of this Agreement consisting of the recitals and ARTICLE I through ARTICLE XVI; (iii) the Scope of Work; and (iv) each of the remaining Exhibits (other than the Scope of Work). Subject to the foregoing, the several documents forming this Agreement shall be taken as mutually explanatory of one another and in the case of ambiguities or discrepancies within or between such parts the same shall be explained and interpreted, if possible, in a manner that gives effect to each part and avoids or minimizes conflicts among such parts.

16.18 Survival . The provisions of Section 5.8 , ARTICLE VI , ARTICLE VIII , ARTICLE IX , ARTICLE X , ARTICLE XII , Section 14.3 , ARTICLE XV and ARTICLE XVI shall survive termination of this Agreement to the extent required for their full performance.

16.19 Counterparts . This Agreement may be executed in any number of separate counterparts and delivered by electronic means (including by “.pdf”), each of which when so executed shall be deemed an original, and all of said counterparts taken together shall be deemed to constitute but one and the same instrument.

[ Signatures on Next Page ]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

OWNER:

INNOVATIVE SOLAR 31, LLC

By: ____/s/ Gary Hui__________________
Name: Gary Hui Title: Manager

CONTRACTOR:

GRUPO GRANSOLAR, LLC

By: ____ /s/ Iván Higueras_______
Name: Iván Higueras Title: Manager

EXHIBIT 10.6

July 29, 2016

INNOVATIVE SOLAR 31, LLC

and

VIVOPOWER USA LLC

DEVELOPMENT SERVICES AGREEMENT

in relation to the IS31 solar photovoltaic

project in Bladenboro, North Carolina

86696224.7 0058116-00002

EXHIBIT 10.6

TABLE OF CONTENTS

Clause	Headings	Page
1.	definitions and interpretation	1
2.	DEVELOPMENT SERVICES	4
3.	TERM	5
4.	Timing of DEVELOPMENT Services	5
5.	Status of Developer	5
6.	Subcontracting	6
7.	FEES AND PAYMENT	6
8.	PERFORMANCE REVIEW	7
9.	Changes to Development services	7
10.	INtellectual property	8
11.	Force Majeure	8
12.	TERMINATION	9
13.	LIMITATIONS ON LIABILITY; INDEMNITY	10
14.	dispute resolution	11
15.	Governing Law	12
16.	mutual representations and warranties	12
17.	MISCELLANEOUS	12
Schedule 1

86696224.7 0058116-00002

EXHIBIT 10.6

THIS AGREEMENT is made on July 29, 2016

BETWEEN:

(1)	INNOVATIVE SOLAR 31, LLC , a North Carolina limited liability company ( "ProjectCo" ); and

(2)	VivoPower USA LLC , a Delaware limited liability company ( "Developer" ).

RECITALS:

(A)

ProjectCo desires to engage Developer to provide certain services in connection with the development, construction and installation of the approximately 34.2 MW (AC) solar photovoltaic project in Bladen County, North Carolina that is referred to as the IS31 Project (the "Project" ), and Developer desires to accept such engagement, on the terms and conditions set forth herein.

(B)	In consideration for the services to be provided by Developer, ProjectCo has agreed to pay to Developer certain amounts in the manner set forth herein.

IT IS AGREED as follows:

1.	definitions and interpretation

1.1	Definitions

In this Agreement, each of the following words and expressions shall have the following meanings:

"Affiliates" means in relation to any person, any other person directly or indirectly Controlled by, or Controlling of, or under common Control with, that person; provided , however , that (i) with respect to Developer, “Affiliate” shall not include ProjectCo and (ii) with respect to ProjectCo, “Affiliate” shall not include Developer;

"Business Day" means a day on which the banks are open for business in New York, New York, excluding a Saturday, Sunday or public holiday in New York, New York;

“Claim” means, collectively, all claims, demands, actions, suits or proceedings (judicial, governmental or otherwise) asserted, threatened in writing or filed against a Person, and any fines, penalties, losses, liabilities, damages and expenses incurred by such Person as a result thereof, including reasonable attorneys’ fees and costs of investigation, litigation, settlement and judgment, and any contractual obligations of such Person to provide indemnity for any such claims, demands, actions, suits or proceedings, fines, penalties, losses, liabilities, damages and expenses to any other Person.

"Confidential Information" has the meaning given to it in clause 17.1 ;

"Control" means the power of a person to secure, directly or indirectly (whether by the holding of shares, possession of voting rights or by virtue of any other power conferred by the articles of association, constitution, partnership deed or other documents regulating another person or otherwise), that the affairs of such other person are conducted in accordance with his or its wishes and "Controlled" and "Controlling" shall be construed accordingly;

"Development Fee" the amount of Eleven Million Five Hundred Fifty Thousand Dollars ($11,550,000) payable by ProjectCo to Developer in accordance with the terms hereof;

"Development Period" has the meaning given to it in clause 3 ;

"Development Services" means the services requested by ProjectCo as described in Schedule 1 ;

"Dispute" means any dispute, difference or claim of any kind or type, whether based on contract, tort, statute, regulation or otherwise, arising out of, relating to or connected with this agreement or its subject matter, existence, negotiation, interpretation, validity, performance, breach, termination or enforceability (including non-contractual disputes or claims), or any operations carried out pursuant to this Agreement;

86696224.7 0058116-00002

EXHIBIT 10.6

"Dispute Notice" has the meaning given to it in clause 14.1.1 ;

"Effective Date" means the date on which this Agreement is executed;

"Financing Agreement" means the Financing Agreement, dated as of the date hereof, among ProjectCo, as borrower, KeyBank National Association, as administrative agent and collateral agent, and the Lenders party thereto from time to time.

"Force Majeure" means, in relation to a Party, any act, event or circumstance, to the extent to which the cause of such act, event or circumstance is not of such Party's making nor within that Party's reasonable control, including:

(a)

an act of God;

(b)

fire, flood, typhoon, tsunami, volcanic activity, earthquake or extreme weather conditions;

(c)

war (including civil war), hostilities (whether or not war has been declared), invasion, coup, guerrilla activity, sanctions or blockade;

(d)

terrorist acts or a threat of a terrorist act;

(e)

riot, insurrection, civil commotion, public demonstration, sabotage, embargo or acts of vandalism;

(f)

explosion or impact of any mine, bomb, shell, grenade or other projectile or missile;

(g)

release of ionising radiation or contamination by radioactivity, chemical or biological contamination;

(h)

acts of any civil or military authority or direction of any Governmental Authority;

(i)

restriction, suspension or withdrawal of any licences, approvals, permits or consents or any required licence, approval, permit or consent not being granted on a timely basis, in each case not arising as a result of such Party;

(j)

materially adverse change in law or regulation;

(k)

the order of any court, arbitral body or Governmental Authority;

(l)

any strike, lock out or other industrial trade dispute or action (not arising as a result of such Party and not involving solely the employees of that Party, or the employees of that Party's subcontractors); and

(m)

structural shift or subsidence;

"Governmental Authority" means any government or state and any ministry, department or political subdivision thereof, and any person, including without limitation any body corporate or partnership, exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government (including any independent regulator) or any other governmental entity, instrumentality, agency, authority, corporation, committee or commission under the direct or indirect control of a government;

"Insolvency" as to any Person means the filing of a petition for relief as to any such Person as debtor or bankrupt under Title 11 of the United States Code, as in effect from time to time, or like provision of Law (except if such petition is contested by such Person and has been dismissed within sixty (60) days); insolvency of such Person as finally determined by a court proceeding; filing by such Person of a petition or application to accomplish the same or for the appointment of a receiver or a trustee for such Person or a substantial part of its assets; commencement of any proceedings relating to such Person under any other reorganization, arrangement, insolvency, adjustment of debt or liquidation law of any jurisdiction, whether now in existence or hereinafter in effect, either by such Person or by another, provided that if such proceeding is commenced by another, such Person indicates its approval of such proceeding, consents thereto or acquiesces therein, or such proceeding is contested by such Person and has not been finally dismissed within sixty (60) days;

86696224.7 0058116-00002

EXHIBIT 10.6

"Intellectual Property" means all inventions (whether patentable or not), patents, utility models, petty patents, registered designs, design rights, database rights, copyright and related rights, moral rights, semiconductor topography rights, plant variety rights, trade marks, service marks, logos, get up, trade names, business names, domain names, (in each case whether registered or unregistered) and including any applications for registration and any renewals or extensions of any of the foregoing, and, in each case, the goodwill attaching to any of the foregoing, rights to sue for passing off or for unfair competition, all Know How, confidential information and trade secrets and any rights or forms of protection of a similar nature or having equivalent or similar effect to any of them which subsist anywhere in the world;

"Know How" means all know how, trade secrets and confidential information, in any form (including paper, electronically stored data, magnetic media, film and microfilm) including financial and technical information, drawings, formulae, test results or reports, project reports and testing procedures, information relating to the working of any product, process, invention, improvement or development, instruction and training manuals, tables of operating conditions, information concerning intellectual property portfolio and strategy, market forecasts, lists or particulars of customers and suppliers, sales targets, sales statistics, prices, discounts, margins, future business strategy, tenders, price sensitive information, market research reports, information relating to research and development and business development and planning reports and any information derived from any of them;

"Law" means any statute, regulation, order, rule, subordinate legislation or other document enforceable under any statute, regulation, rule or subordinate legislation, including:

(a)

principles of law or equity;

(b)

standards with which the relevant Party is required to comply; and

(c)

fees, rates, taxes, levies, and charges payable in respect of things referred to in this definition,

whether or not existing at the Effective Date;

"Notice" has the meaning given to it in clause 17.2.1 ;

"Notice Details" has the meaning given to it in clause 17.3 ;

"Parties" means ProjectCo and Developer and a "Party" means any one of them;

"Person" or "person" means any individual, partnership, joint venture, limited liability company, corporation, trust or other entity, and the heirs, executors, administrators, legal representatives, successors and assigns of such Person where the context so requires;

"Project" has the meaning given to it in in the Recitals;

"Project Budget" means the Project Budget and Schedule referred to in the Financing Agreement;

“Project Documents” has the meaning given such term in the Financing Agreement;

"Prudent Solar Industry Practices" means those reasonable practices, methods and acts, as they may change from time to time, that (a) are customarily used within the solar energy industry to develop, construct and install solar energy generating facilities and associated facilities of the type that are similar to the Project, safely, reliably and efficiently and in compliance with applicable Law, manufacturers’ warranties and manufacturers’ recommendations and (b) are consistent with the exercise of the reasonable judgment, skill, diligence, foresight and care customary in the solar energy industry of a solar energy generating project developer in order to efficiently accomplish the desired result consistent with safety standards, applicable Law, manufacturers’ warranties, manufacturers’ recommendations, the Financing Agreement, the Tax Equity Documents and the Project Documents, in each case taking into account the location of the Project, including climatic, environmental and general conditions. Prudent Solar Industry Practices are not intended to be limited to the optimum practices or methods to the exclusion of others, but rather those practices or methods generally accepted or approved by a significant portion of the photovoltaic solar power industry during the relevant time period.

86696224.7 0058116-00002

EXHIBIT 10.6

"Subcontractor" means a subcontractor, supplier or consultant engaged by or on behalf of Developer in the performance of Development Services;

"Success" means the occurrence of either of the NES ECCA Equity Contribution or the Tax Equity Tranche B Equity Contribution, each as defined in the Financing Agreement; and

“ Tax Equity Documents ” has the meaning given such term in the Financing Agreement.

1.2	Interpretation

1.2.1

Headings and bold type are for convenience only and do not affect the interpretation of this Agreement.

1.2.2

The singular includes the plural and the plural includes the singular.

1.2.3

Words of any gender include all genders.

1.2.4

Other parts of speech and grammatical forms of a word or phrase defined in this Agreement have a corresponding meaning.

1.2.5

An expression importing a person includes any company, partnership, joint venture, association, corporation or other body corporate and any Governmental Authority as well as an individual.

1.2.6

A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to, this Agreement and a reference to this Agreement includes any schedule, attachment and exhibit.

1.2.7

A reference to a document includes all amendments, modifications or supplements to, or replacements or novations of, that document.

1.2.8

A reference to a party to a document includes that party’s successors and permitted assignees.

1.2.9

A reference to an agreement other than this Agreement includes a deed and any legally enforceable undertaking, agreement, arrangement or understanding, whether or not in writing.

1.2.10

If a period of time is specified and dates from a given day or the day of an act or event, it is to be calculated exclusive of that day.

1.2.11

Specifying anything in this Agreement after the words ‘include’ or ‘for example’ or similar expressions does not limit what else is included.

1.2.12

A reference to writing includes any method of representing or reproducing words, figures, drawings or symbols in a visible or tangible form.

2.	DEVELOPMENT SERVICES

2.1

Scope

2.1.1

Subject to the terms of this Agreement, Developer shall provide, or procure the provision of, the Development Services during the Development Period to ProjectCo .

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2.1.2

Developer acknowledges that the functions specified in Schedule 1 are non-exhaustive and the Development Services to be provided or procured include all management, administration, registry, secretarial, marketing, financial controls and compliance with Law, unless otherwise prescribed.

2.2	Standard of Performance

2.2.1

Developer shall provide Development Services, complete the work and accomplish the tasks described in Schedule 1 with diligence, care, prudence, in a safe and responsible manner and in accordance with Prudent Solar Industry Practices, and Developer shall devote such time, effort, and skills of its personnel as a reasonable servicer provider in like position would do in like circumstances.

2.2.2

Developer shall ensure that its employees and Subcontractors hired to perform the Development Services are appropriately licensed and shall use reasonable efforts to ensure such employees and Subcontractors are qualified to perform the work for which they are hired.

2.2.3

Developer is not required or obliged to fulfill, or comply with, any provision of this Agreement or any instruction, comment, recommendation, communication or direction by ProjectCo that would cause Developer to breach applicable Law.

TERM

The " Development Period " means the period commencing on the Effective Date and continuing until the date which is the earlier of:

(A)

the achievement of Success; and

(B)

the date on which this Agreement is terminated in accordance with its terms.

4.	Timing of DEVELOPMENT Services

Developer shall carry out Development Services as and when specified by ProjectCo from time to time, except in the event of Force Majeure, in which case clause 11 applies.

5.	Status of Developer

5.1	Independent Corporate Entity

5.1.1

In performing Development Services, Developer acts as an independent corporate entity and not an agent, employee, partner or joint venturer of ProjectCo or any of its Affiliates, except:

(A)

to the extent that Developer is required to act as the agent for ProjectCo to perform the Development Services;

(B)

if instructed by ProjectCo in writing to act as an agent in a specified circumstance; or

(C)

where it is necessary by Law for Developer to act on behalf of ProjectCo in carrying out any obligations under clause 6.2 .

5.1.2

If exceptions in clause 5.1.1 apply Developer has the authority to incur, assume or create, in writing or otherwise, any liability or obligation of any kind, express or implied, in the name or on behalf of the ProjectCo.

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5.1.3

For avoidance of doubt, in all other circumstances to which exceptions in clause 5.1.1 do not apply it is intended by the Parties that Developer and ProjectCo remain independent corporate entities responsible for own actions.

5.1.4

Except as specifically provided for in this Agreement, Developer will bear the costs of its own internal administrative and operational expenses.

5.2	Assistance by ProjectCo

5.2.1

The Parties acknowledge and agree that Developer may, from time to time, require the assistance of ProjectCo to perform Development Services.

5.2.2

ProjectCo shall provide Developer free of charge any reasonable assistance that Developer requests in writing to facilitate the provision of the Development Services.

5.2.3

Developer is not required to provide Development Services to the extent that ProjectCo does not provide the assistance referred to in this clause 5.2 .

6.	Subcontracting

6.1	Authority to Subcontract and Delegate

6.1.1

Developer may, at any time, subcontract or delegate in any manner any or all of its rights and obligations under this Agreement without ProjectCo’s consent.

6.1.2

Developer is responsible for ensuring the suitability of any Subcontractor that it engages to provide Development Services to ProjectCo and must ensure that the work performed by any Subcontractor complies with the requirements of this Agreement.

6.1.3

Developer:

(A)

is not relieved of any of its obligations and liabilities under this Agreement as a result of any subcontracting of those obligations or liabilities;

(B)

at all times remains responsible for the performance of all Subcontractors that it engages to provide Development Services to ProjectCo, and acts and omissions of such Subcontractors, as if they were acts and omissions of Developer; and

(C)

acknowledges and agrees that a breach by a Subcontractor of, or failure by a Subcontractor to comply with, any obligation of Developer under this Agreement is a breach or failure by Developer under this Agreement.

6.2	Third Party Contracts, Permits and Licences

6.2.1

Subject to clauses 5.1.4 and 6.2.2 and save as otherwise expressly provided in Schedule 1 , where Developer procures the services of a third party on behalf of ProjectCo to deliver the Development Services, or otherwise incurs costs on behalf of ProjectCo, including licence and permitting costs, the related costs shall be invoiced directly to ProjectCo, in each case in accordance with the Project Budget, and ProjectCo shall meet all such payment obligations when due.

6.2.2

Developer shall be responsible for any costs of subcontracting its performance of any Development Services pursuant to clause 6.1 .

7.	FEES AND PAYMENT

7.1

Fees

7.1.1

The Parties acknowledge and agree that no fees are payable by ProjectCo for the provision of Development Services by Developer unless and until Success is achieved.

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EXHIBIT 10.6

7.1.2

Conditional upon the Parties achieving Success, ProjectCo shall pay the Development Fee to Developer.

7.1.3

The amount of the Development Fee is exclusive of any applicable value added tax or other tax (other than any tax in the nature of a business or income tax). Any applicable value added tax or other tax shall be added to the Development Fee payable by ProjectCo.

7.2	Payment

7.2.1

After the Parties have achieved Success and on receipt of a valid invoice from Developer, ProjectCo shall pay the Development Fee to Developer on the terms contained therein.

7.2.2

Overdue payments hereunder shall bear interest from the date due until the date paid at a rate per annum equal to lesser of (a) the rate published by the Wall Street Journal as the “prime rate” on the Business Day preceding the date on which such interest begins to accrue plus two percent (2.0%) or (b) the maximum rate allowed under applicable Law.

8.	PERFORMANCE REVIEW

8.1	Inspection

8.1.1

ProjectCo has the right, at any time, to inspect the work undertaken by Developer and any of its Subcontractors in relation to Development Services, provided that reasonable notice has been given to Developer.

8.1.2

Developer shall, and shall procure that its Subcontractors, comply with all reasonably requested inspections by ProjectCo under clause 8.1.1 .

8.2	Documents and Records

8.2.1

Developer shall maintain records in respect of Development Services provided to ProjectCo and make available for inspection any such documents and information reasonably requested by ProjectCo.

8.2.2

Developer will not be in breach of its record keeping obligations under this clause 8.2 to the extent that it reasonably relies on a third party to produce a report or provide information and the third party fails to so or fails to do so in a timely manner.

9.	Changes to Development services

9.1	Variations Permitted

9.1.1

The Parties may, at any time, vary the nature of the Development Services to be provided to ProjectCo.

9.1.2

The Parties, acting reasonably, must agree in writing on the scope and extent of the variation to the Development Services before Developer carries out the varied Development Services.

9.1.3

If the Parties agree to vary Development Services, Developer must carry out the Development Services as if the varied Development Services were originally defined in this Agreement.

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9.2	Suspension of Services

9.2.1

Without limiting ProjectCo’s other rights under this Agreement, ProjectCo may by written notice to Developer temporarily suspend the performance of all or any part of the Development Services.

9.2.2

As soon as reasonably practicable after receipt of notice under clause 9.2.1 , Developer must suspend the provision of Development Services specified in the notice.

10.	INtellectual property

10.1	Intellectual Property to be owned by Developer

With the exception of Intellectual Property owned by ProjectCo, all Intellectual Property in, arising out of, or in connection with, Development Services shall be owned by Developer.

10.2	Intellectual Property to be retained by Developer

10.2.1

The Parties acknowledge and agree that Developer retains all rights, title and interest in Intellectual Property relating to Development Services on:

(A)

the expiry of this Agreement; or

(B)

termination of this Agreement.

11.	Force Majeure

11.1	Notice of Force Majeure

11.1.1

If as a result of Force Majeure a Party is rendered unable, wholly or in part, to carry out its obligations under this Agreement, other than an obligation to pay money, then that Party must give written notice to the other Party setting out:

(A)

reasonably full particulars of the Force Majeure; and

(B)

an estimate of the period of time that the Party reasonably considers it would require to remove or overcome the Force Majeure situation.

11.2	Reasonable endeavours to overcome Force Majeure

11.2.1

A Party affected by Force Majeure must use all reasonable endeavours to remove or overcome the Force Majeure situation as quickly as possible in an economic manner.

11.2.2

No Party will be obliged to settle any strike, lockout, ban, labour dispute or other industrial disturbance except on terms acceptable to it.

11.2.3

A Party affected by Force Majeure must keep the other Party informed of all significant developments in relation to the Force Majeure.

11.3	Suspension of obligations during Force Majeure

11.3.1

The obligation to give notice under clause 11.1 will, to the extent that the obligation is affected by Force Majeure, be suspended during the continuance of Force Majeure.

11.3.2

Without limiting clause 11.2 , to the extent that a Party cannot meet its obligations due to Force Majeure, the performance of obligations under this Agreement will be extended for such period of delay or prevention.

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EXHIBIT 10.6

12.	TERMINATION

12.1	Termination upon payment of Development Fee

This Agreement shall automatically terminate upon payment in full of the Development Fee and all other accrued fees incurred prior to termination in accordance with clause 7 .

12.2	Termination for Insolvency

Either Party may terminate this Agreement immediately by notice in writing to the other Party upon the Insolvency of such other Party.

12.3	Termination for breach

Either Party may terminate this Agreement by written notice to the other Party if the other Party is in material breach of this Agreement and does not remedy that breach within 30 Business Days following a written request to do so.

12.4	Effect of termination

If this Agreement is terminated in accordance with this clause 12 , then:

(A)

each Party is released from further performance of its obligations under this Agreement, except those expressed to survive termination (set out below);

(B)

each Party retains the rights it has against the other Party in respect of any breach of this Agreement occurring before termination; and

(C)

the rights and obligations of each Party under the following clauses will continue independently from the other obligations of the Parties and survive termination of this Agreement: clause 10 (Intellectual Property), this clause 12.4 (Effect of Termination), clause 13 (Limitations on Liability; Indemnity), clause 14 (Dispute Resolution), clause 15 (Governing Law) and clause 17 (Miscellaneous).

12.5	Cost of termination

Subject to clause 12.6 , if this Agreement is terminated, each Party must bear its own costs, expenses, losses and outgoings (including all duties, taxes, imposts, and charges of an incidental to the termination of this Agreement).

12.6	Outstanding claims not affected

12.6.1

The termination of this Agreement does not affect:

(A)

any claim by Developer in respect of accrued fees incurred prior to termination;

(B)

any claim or accrued right or remedy which either Party may have against the other; or

(C)

any transaction properly entered into with third parties before the termination date.

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EXHIBIT 10.6

13.	LIMITATIONS ON LIABILITY; INDEMNITY

13.1	No Liability in Certain Circumstances

13.1.1

To the extent permitted by Law, no Party is liable for any special, incidental, indirect, punitive or consequential loss or damage of any nature, arising at any time or from any cause whatsoever.

13.1.2

The limitations on liability in clause 13.1.1 apply to any claim or action, whether it is based in whole or in part on contract, negligence, strict liability, tort, statute or any other liability, except to any loss or damage suffered by a Party as a result of fraud, gross negligence, intentional misrepresentation or wilful misconduct.

13.1.3

Nothing in this clause shall exclude or limit any liability which either Party may have to an individual for the death of, or personal injury sustained by, such individual to the extent such death or personal injury was caused by that Party's negligence, or the negligence of that Party's officers, employees or agents.

13.2	Maximum Liability

Subject to clause 13.1 and without limiting the ProjectCo's obligation to pay the fees to Developer as set forth herein, the Parties acknowledge and agree that the aggregate liability of either Party under this Agreement to the other Party shall not exceed the total amount of the Development Fee, and that an adjustment to the Development Fee is the sole remedy for ProjectCo in respect of any breach of contract by Developer.

13.3	Developer’s Indemnity

Developer agrees to indemnify, defend and hold ProjectCo and its successors and permitted assigns and their respective Affiliates, officers, directors, contractors, employees, shareholders, representatives and agents (collectively, the "ProjectCo Indemnified Parties" ) harmless against and from any and all Claims, losses, damages, charges, liabilities, obligations and expenses (including reasonable attorneys’ fees and expenses) (collectively, "Losses" ) suffered by an ProjectCo Indemnified Party for (A) injuries, disease or death to any Person, (B) any damage to any property of any Person, (C) all fines or penalties issued by, and other similar amounts payable to, any Governmental Authority, or (D) any other losses or liabilities of ProjectCo, in each case to the extent caused by or resulting from Developer’s breach of this Agreement, performance of the Development Services or any act or omission (including strict liability, breach of contract, fraud, negligence, or willful misconduct) of Developer, its employees, agents or authorized representatives, Affiliates, Subcontractors or their respective employees and subcontractors and agents during the Development Period in connection with this Agreement; provided, however, that nothing contained herein shall be deemed to render Developer liable for or obligated to indemnify any ProjectCo Indemnified Party against any liability or damages to the extent attributable to or resulting from the negligence or willful misconduct of any ProjectCo Indemnified Party or their respective agents or authorized representatives, Affiliates, subcontractors (other than Developer) and employees at any time during the Development Period.

13.4	ProjectCo’s General Indemnity.

ProjectCo agrees to indemnify, defend and hold Developer and its successors and permitted assigns and their respective Affiliates, officers, directors, contractors, employees, shareholders, representatives and agents (collectively, the "Developer Indemnified Parties" ) harmless against and from any and all Losses suffered by a Developer Indemnified Party for (A) injuries, disease or death to any Person, (B) any damage to any property of any Person, (C) all fines or penalties issued by, and other similar amounts payable to, any Governmental Authority or (D) any other losses or liabilities of Developer, in each case to the extent caused by or resulting from any negligence or willful misconduct of an ProjectCo Indemnified Party in connection with this Agreement; provided, however, that nothing contained herein shall be deemed to render ProjectCo liable for or obligated to indemnify any Developer Indemnified Party against any liability or damages to the extent attributable to or resulting from the negligence or willful misconduct of any Developer Indemnified Party or their respective agents or authorized representatives, Affiliates, subcontractors and employees at any time during the Development Period.

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EXHIBIT 10.6

13.5	Intent.

IT IS THE EXPRESS INTENT OF THE PARTIES THAT THE INDEMNITIES PROVIDED IN THIS CLAUSE 13 SHALL (I) PROVIDE PROTECTION TO THE INDEMNIFIED PERSONS AND ENTITIES IN RELATION TO ALL TYPES OF CLAIMS, LIABILITIES AND LOSSES FALLING WITHIN THE TERMS HEREOF, INCLUDING, AS SPECIFIED HEREIN, FROM THE SOLE NEGLIGENCE OF DEVELOPER OR ANY OTHER PERSON OR ENTITY AND/OR THE CONTRIBUTORY, JOINT OR CONCURRENT NEGLIGENCE OF A PARTY AND/OR ANY OTHER PERSON OR ENTITY AND (II) SHALL MEET THE REQUIREMENTS OF ANY EXPRESS NEGLIGENCE RULE, ANY EXPRESS INTENT RULE AND ANY CONSPICUOUSNESS DOCTRINE ADOPTED BY ANY JURISDICTION.

14.	dispute resolution

14.1	Dispute Notice

14.1.1

Where a Dispute arises, either Party may give a written notice to the other Party specifying:

(A)

particulars of the Party’s reason for being dissatisfied; and

(B)

the position that the Party believes is correct,

being a "Dispute Notice" .

14.2	Litigation

After 20 Business Days of receipt of the Dispute Notice under clause 14.1.1 , either Party to the Dispute may commence legal proceedings to resolve any part of the Dispute.

14.3	Continuity

Despite the existence of a Dispute, Developer must continue to perform its obligations under this Agreement (including provision of Development Services) and ProjectCo must pay all undisputed amounts to Developer.

14.4	Injunctive Relief

Nothing in this clause 14 prejudices either Party’s right to institute proceedings to seek injunctive or urgent declaratory relief in respect of a Dispute or any other matter arising under this Agreement.

14.5	Damages are Insufficient Compensation and Equitable Remedies are Available

Without prejudice to any other rights or remedies that the Parties may have, the Parties acknowledge and agree that damages alone would not be an adequate remedy for any breach by them of this Agreement and that the remedies of injunction and specific performance as well as any other equitable relief for any threatened or actual breach of this Agreement by any Party would be more appropriate remedies.

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EXHIBIT 10.6

15.	Governing Law

15.1	This Agreement shall be governed by the internal laws of the State of New York, excluding any of its conflict of law provisions that would require the application of the laws of another jurisdiction.

15.2

Subject to the provisions of clause 14 for purposes of resolving any Dispute arising under or relating to this Agreement, the Parties hereby submit to the non-exclusive jurisdiction of the United States Federal District Courts for the State of New York, or, if such court does not have subject matter jurisdiction, the state courts of the State of New York, in each case sitting in New York County. Each Party hereby waives any objection that it may have to the venue of such action, suit or proceeding in such court or that such suit, action or proceeding in such court was brought in an inconvenient court and agrees not to plead or claim the same. Each Party further agrees that such court shall have in personam jurisdiction over each of them with respect to any such dispute, controversy, or proceeding. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHTS TO A TRIAL BY JURY WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT

16.	mutual representations and warranties

16.1	Each Party represents and warrants to the other Party that as at the Effective Date:

16.1.1

the execution, delivery and performance of this Agreement complies with its documents of organization and does not constitute a breach of any Law or obligation, or cause or result in a default under any agreement by which it is bound and which would prevent it from entering into and performing its obligations under this Agreement;

16.1.2

all necessary authorisations for the execution, delivery and performance of this Agreement in accordance with its terms have been obtained;

16.1.3

each Party has full power and capacity to enter into and perform its obligations under this Agreement; and

16.1.4

each Party is validly incorporated, organised and subsisting in accordance with the laws of its place of incorporation or organization.

17.	MISCELLANEOUS

17.1	Confidentiality

17.1.1

Subject to clause 17.1.2 , each Party must keep confidential and must not divulge or disclose:

(A)

any information relating to another Party or its business, which is disclosed to the recipient in the course of procuring or providing Development Services contemplated by this Agreement; or

(B)

this Agreement

(collectively, " Confidential Information" )

17.1.2

Confidential Information may be disclosed:

(A)

to an Affiliate of the recipient, provided that the recipient must ensure that its Affiliates comply in all respects with the recipient’s obligations under this clause;

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EXHIBIT 10.6

(B)

if the information is in the public domain as at the date of this Agreement (or subsequently becomes in the public domain other than by breach of any obligation of confidentiality binding on the recipient);

(C)

if the recipient is required to disclose the information by applicable Law or the rules of any recognised stock exchange on which its shares or the shares of any of its related bodies corporate are listed, provided that the recipient has consulted with the provider of the information as to the form and content of the disclosure;

(D)

if the disclosure is made by the recipient to its current or potential financiers, investors and equity owners or lawyers, accountants, investment bankers, consultants, other professional advisers or Subcontractors to the extent necessary to enable the recipient to properly perform its obligations under this Agreement or to conduct its business generally, in which case the recipient must ensure that those persons keep the information secret and confidential and do not divulge or disclose the information to any other person in contravention hereof;

(E)

if the disclosure is necessary to seek the approval of any transaction contemplated by this Agreement by a Governmental Authority, provided that, to the extent the disclosing party may request confidential treatment thereof, the relevant Governmental Authority is made aware of the confidential nature of the information and is instructed to keep the information secret and confidential and not to divulge or disclose the information to any other person;

(F)

if the disclosure is required for use in legal proceedings regarding this Agreement; or

(G)

each other Party has consented in writing before the disclosure.

17.2	Communication and Notices

17.2.1

A notice or other communication under this Agreement ( "Notice" ) must be in writing and delivered by hand or sent by pre-paid post, fax or electronic communication (including electronic mail) to a Party at the address or the fax number for that Party or as otherwise specified by a Party.

17.2.2

A Party may change Notice Details by giving written notice to the other Party.

17.2.3

A Notice sent by post is regarded as given and received on the second Business Day following the date of postage.

17.2.4

A fax is regarded as given and received on production of a transmission report by the machine from which the fax was sent which indicates that the fax was sent in its entirety to the recipient’s fax number, unless the recipient informs the sender that the Notice is illegible or incomplete within 4 hours of it being transmitted.

17.2.5

A Notice delivered or received other than on a Business Day or after 4.00pm (recipient’s time) is regarded as received at 9.00am on the following Business Day and a Notice delivered or received before 9.00am (recipient’s time) is regarded as received at 9.00am.

17.3	Notice Details

17.3.1

ProjectCo:

Innovative Solar 31, LLC

c/o VivoPower USA LLC

3824 Cedar Springs Rd. #801-1299

Dallas, TX 75219

Attention: Chief Financial Officer

Email: dpilotte@vivopower.com

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EXHIBIT 10.6

With a copy to (which shall not constitute notice):

Stoel Rives LLP

600 University Street, Suite 3600

Seattle, WA 98101

Attn: Alex Mertens

Facsimile: (206) 386-7500

Email: alex.mertens@stoel.com

NES US NC-31 LLC

c/o Dixon Advisory USA

140 Broadway, 28th Floor

New York, NY 10005

New Energy Solar

PO Box 29

Crows Nest NSW 1585

Australia

Attention: Tom Kline and Liam Thomas

Email: assetmanager@newenergysolar.com.au

Foley & Lardner LLP

777 E. Wisconsin Ave.

Milwaukee, WI 53202-5306

Attention: David W. Clark

17.3.2

Developer:

VivoPower USA LLC

3824 Cedar Springs Rd. #801-1299

Dallas, TX 75219

Attention: Chief Financial Officer

Email: dpilotte@vivopower.com

With a copy to (which shall not constitute notice):

Stoel Rives LLP

600 University Street, Suite 3600

Seattle, WA 98101

Attn: Alex Mertens

Facsimile: (206) 386-7500

Email: alex.mertens@stoel.com

17.4	Assignment, transfer and novation of rights

Each Party may assign, transfer or novate all or any part of its rights or obligations under this Agreement provided written consent has been obtained in writing from the other Party, which will not be unreasonably withheld; provided that, without the prior written consent of the other Party, either Party may collaterally assign any of its rights, duties or obligations under this Agreement as security for the obligations of such Party to any Person providing financing for the benefit of such Party or any of its Affiliates.

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EXHIBIT 10.6

17.5	Entire agreement

This Agreement states all the express terms of the agreement between the Parties in respect of its subject matter. It supersedes all prior discussions, negotiations, understandings and agreements in respect of its subject matter.

17.6	Counterparts

This Agreement may be executed in any number of counterparts (including by facsimile or other electronic means). All counterparts, taken together, constitute one instrument. A Party may execute this Agreement by signing any counterpart.

17.7	Severability

If any provision in this Agreement is held invalid or unenforceable, all other provisions will not be affected. With respect to the provision held invalid or unenforceable, the Parties will amend this Agreement as necessary to effect the original intent of the Parties as closely as possible.

17.8	Waiver

The rights and remedies of the Parties shall not be affected by any failure to exercise or delay in exercising any right or remedy or by the giving of any indulgence by any other Party or by anything whatsoever except a specific waiver or release in writing and any such waiver or release shall not prejudice or affect any other rights or remedies of the Parties. No single or partial exercise of any right or remedy shall prevent any further or other exercise thereof or the exercise of any other right or remedy.

17.9	Successors

This Agreement is binding upon and inures to the benefit of the Parties and their respective successors and permitted assigns.

17.10

Amendment, etc.

No amendment, waiver or other modification of this Agreement shall be effective unless it is in writing (which for this purpose does not include email) signed by or on behalf of each of the Parties.

[ Signature page follows ]

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EXHIBIT 10.6

IN WITNESS WHEREOF , the Parties have executed this Agreement on the date first mentioned above.

DEVELOPER :

VIVOPOWER USA LLC

By: ___/s/ Gary Hui__________

Name: Gary Hui

Title: Manager

PROJECTCO :

INNOVATIVE SOLAR 31, LLC

By: ___/s/ Gary Hui_________

Name: Gary Hui

Title: Manager

[ Signature Page to Development Services Agreement ]

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EXHIBIT 10.6

Schedule 1

DEVELOPMENT SERVICES

The Development Services shall include the following with respect to the Project:

(a) assist in dealing with: (i) power purchase agreement customers, (ii) the utility, (iii) governmental agencies, (iv) local organizations, and (v) other parties interested in the development and installation of the Project;

(b) coordinate contractors, professionals and consultants employed in connection with the design or installation of the Project;

(d) administer and manage the Project in accordance with the contracts providing for the engineering, procurement and construction of the Project (collectively, the "EPC Contract" ), including the construction schedule set forth therein, and any other supply or installation contracts on behalf of ProjectCo;

(e) review and submit to ProjectCo for approval all requests for payments under the EPC Contract or any other supply or installation contract;

(f) construction management services, including, without limitation, all activities necessary to monitor, manage, perform and exercise, on behalf of and as agent for ProjectCo, ProjectCo’s rights and obligations under the EPC Contract (other than (a) ProjectCo’s obligation to make payments or procure equipment under the EPC Contract, (b) ProjectCo’s right to contract with and retain separate contractors, and (c) ProjectCo’s obligation to provide any ProjectCo-provided facilities and services), and endeavor to secure full and proper performance of the obligations of the contractors under the EPC Contract;

(g) prepare and submit to ProjectCo for approval all requests for loan advances or other payments under the Financing Agreement;

(h) apply for and maintain in full force and effect any and all governmental permits and approvals required for the lawful construction of the Project or cause contractors to do so;

(i) comply with all terms and conditions applicable to ProjectCo or the Project contained in any governmental permit or approval required or obtained for the lawful installation of the Project, or in any insurance policy affecting or covering the Project during its construction and installation, or in any surety bond obtained in connection with Project construction and installation;

(j) furnish such consultation and advice relating to the construction and installation of the Project as may be reasonably requested from time to time by ProjectCo;

(k) prepare such reports on the progress of the design, construction and installation of the Project as are reasonably requested by ProjectCo;

(l) inspect the progress of the course of the construction and installation of the Project and verify that the same is being carried out substantially in accordance with the plans and specifications approved by ProjectCo or, if the same is not being so carried out, promptly notify ProjectCo;

(m) if requested by ProjectCo, perform on behalf of ProjectCo all obligations of ProjectCo with respect to the design and installation of the Project contained in any Financing Document, Project Document or Tax Equity Document, or in any agreement entered into with any governmental body or agency (including any utility) relating to the terms and conditions of such installation, provided that copies of such agreements have been provided by ProjectCo to Developer or ProjectCo has otherwise notified Developer in writing of such obligations;

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EXHIBIT 10.6

(n) assist ProjectCo in obtaining and maintaining insurance coverage for the Project, ProjectCo and its agents during the development phase of the Project, in accordance with an insurance schedule approved by ProjectCo;

(o) assemble and retain all contracts, agreements and other records and data as may be necessary to carry out Developer’s functions hereunder;

(p) at the direction of ProjectCo, implement any decisions of ProjectCo made in connection with the design, development and installation of the Project or any policies and procedures relating thereto;

(q) perform and administer any and all other services and responsibilities of Developer that are set forth in any other provisions of this Agreement, or that are reasonably requested to be performed by ProjectCo and are within the general scope of the services described herein;

(r) Cash Management, Billing Services and Collection :

(I) collect on behalf of ProjectCo, or cause to be so collected, all payments due to ProjectCo with respect to Project construction and installation; and

(II) arrange to promptly pay, or cause to be paid, on behalf of ProjectCo, any amounts required to be paid by ProjectCo (including payment of all utilities such as water, power and data service), including all expenses incurred by ProjectCo and relating to the Project’s construction and installation or that are due and payable under construction or installation contracts to which ProjectCo is a party;

(s) cause to be paid, at ProjectCo’s cost, all taxes and other governmental charges shown to be due by ProjectCo and relating to the Project’s construction and installation before the same becomes delinquent; and

(t) to the extent any of the Development Services have been delegated to a subcontractor, supervise and monitor such subcontractor’s performance of such delegated functions.

EXHIBIT 10.7

VivoPower International Services Limited

and

Philip Comberg

SERVICE AGREEMENT

Herbert Smith Freehills LLP

TABLE OF CONTENTS

Clause	Headings	Page
1.	INTERPRETATION	3
2.	REPRESENTATIONS AND WARRANTIES	5
3.	APPOINTMENT AND TERM	6
4.	DUTIES AND POWERS	6
5.	SALARY	8
6.	PENSION AND INSURANCE BENEFITS	8
7.	DIRECTORS' AND OFFICERS' INSURANCE	9
8.	EXPENSES, GRATUITIES AND DEDUCTIONS	10
9.	HOLIDAYS	10
10.	SICKNESS AND INJURY	11
11.	INTERESTS IN OTHER BUSINESSES	12
12.	SHARE DEALINGS	12
13.	INTELLECTUAL PROPERTY	12
14.	CONFIDENTIALITY	14
15.	PROTECTION OF INTERESTS OF COMPANY ETC	14
16.	INTERIM APPOINTMENT	19
17.	TERMINATION	19
18.	GARDEN LEAVE	22
19.	AMALGAMATION AND RECONSTRUCTION	23
20.	DISCIPLINE AND GRIEVANCES	24
21.	ADDITIONAL PARTICULARS	24
22.	ENTIRE AGREEMENT AND SEVERABILITY	24
23.	VARIATION AND WAIVER	25
24.	THIRD PARTY RIGHTS	25
25.	ASSIGNMENT	25
26.	DATA PROTECTION	25
27.	REFERENCES	26
28.	TELEPHONE AND COMPUTER/E MAIL AND INTERNET USE	26
29.	NOTICES	27
30.	GOVERNING LAW	28
31.	COUNTERPARTS	28
SCHEDULE 1 – KEY PERFORMANCE INDICATORS ("KPI")		30

AGREEMENT made

BETWEEN:

	A.	VIVOPOWER INTERNATIONAL SERVICES LIMITED a company incorporated in Channel Islands with registered number 121017 whose registered office is at 3rd Floor 37 Esplanade, St Helier, Jersey, JE2 3QA and which is established in the United Kingdom under UK establishment number BR018560 and whose establishment offices is at 23 Hanover Square, Mayfair, London, England W1S 1JB (the "Company" ); and

	B.	PHILIP COMBERG of Cretzschmarstrasse 21, 60487 Frankfurt (the "Executive" ) IT IS AGREED as follows:

INTERPRETATION

1.1

In this Agreement:

1.1.1

"Associate" means a body corporate:

(A)

which is the PLC Company;

(B)

which for the time being is a Parent Undertaking of the PLC Company or a Subsidiary of the PLC Company or of such a Parent Undertaking; or

(C)

in whose Equity Share Capital for the time being an interest of 20 per cent or more is held directly or indirectly (through another body corporate or other bodies corporate or otherwise) by a Parent Undertaking of the PLC Company or by a Subsidiary (including the Company) of such a Parent Undertaking or by a combination of two or more such Parent Undertakings or Subsidiaries;

1.1.2

“ ASX ” means the Australian Securities Exchange;

1.1.3

"Board" means the board of directors of the PLC Company from time to time and includes any person or committee duly authorised by the board of directors to act on its behalf for the purposes of this Agreement;

1.1.4

"Company Secretary" means the secretary of the PLC Company from time to time;

1.1.5

"Confidential Information" means all and any information, whether or not recorded, of the PLC Company, the Company or of any other Subsidiary or Associate which the Executive (or, where the context so requires, another person) has obtained by virtue of his employment or engagement and which the PLC Company, the Company or any other Subsidiary or Associate regards as confidential or in respect of which the PLC Company, the Company or any other Subsidiary or Associate is bound by an obligation of confidence to a third party, including:

(A)

all and any information relating to business methods, corporate plans, future business strategy, management systems, finances, and maturing new business opportunities;

	(B)	all and any information relating to research or development projects or both;

	(C)	all and any information concerning the curriculum vitae, remuneration details, work-related experience, attributes and other personal information concerning those employed or engaged by the PLC Company, the Company or any other Subsidiary or Associate;

(D)

all and any information relating to marketing or sales of any past present or future product or service of the PLC Company, the Company or any other Subsidiary or Associate including sales targets and statistics, market share and pricing statistics, marketing surveys and strategies, marketing research reports, sales techniques, price lists, mark-ups, discounts, rebates, tenders, advertising and promotional material, credit and payment policies and procedures, and lists and details of customers, prospective customers, suppliers and prospective suppliers including their identities, personnel, business requirements and contractual negotiations and arrangements with the PLC Company, the Company or any other Subsidiary or Associate; and

(E)

all and any trade secrets, secret formulae, processes, inventions, design, know-how, technical specification and other technical information in relation to the creation, production or supply of any past, present or future product or service of the PLC Company, the Company or any other Subsidiary or Associate, including all and any information relating to the working of any product, process, invention, improvement or development carried on or used by the PLC Company, the Company or any other Subsidiary or Associate and information concerning the intellectual property portfolio and strategy of the Company or of any Subsidiary or Associate,

but excluding any information which:

(i)

is part of the Executive's own stock in trade;

(ii)

is readily ascertainable to persons not connected with the PLC Company, the Company or any other Subsidiary or Associate without significant expenditure of labour, skill or money; or

(iii)

which becomes available to the public generally other than by reason of a breach by the Executive of his obligations under this Agreement;

1.1.6

" PLC Company " means VIVOPOWER INTERNATIONAL PLC a company incorporated in England and Wales with registered number 09978410 whose registered office is at 23 Hanover Square, Mayfair, London, England W1S 1JB;

1.1.7

"Recognised Investment Exchange" means the NASDAQ, the ASX and any body corporate or unincorporated association which is a recognised investment exchange for the purposes of the Financial Services and Markets Act 2000;

1.1.8

"Remuneration Committee" means the remuneration committee of the Board from time to time;

1.1.9

"Subsidiary" means Subsidiary Undertaking, and " Subsidiary Undertaking ", " Parent Undertaking " and "Equity Share Capital" shall have the respective meanings attributed to them by sections 1162 and 548 of the Companies Act 2006;

1.1.10

"Termination Date" means the date on which the employment of the Executive by the Company terminates save pursuant to an assignment by the Company pursuant to clause 25 in which case it shall mean the date on which his employment with such assignee shall terminate;

1.1.11

"Working Day" means any day other than a Saturday, Sunday or a day which is generally recognised as a public holiday in England.

1.2

In this Agreement, unless otherwise stated, a reference to the employment of the Executive is to his employment by the Company under this Agreement and shall include any period of garden leave pursuant to clause 18 or suspension pursuant to sub-clause 17.4.

1.3

In this Agreement, unless the context otherwise requires:

	1.3.1	the contents page and headings and bold type face inserted in this Agreement are inserted for convenience only and shall not affect the interpretation of this Agreement;

	1.3.2	references to clauses and sub-clauses are to clauses and sub-clauses of this Agreement;

1.3.3

references to this Agreement include this Agreement as amended or supplemented in accordance with its terms;

1.3.4

references to writing shall include any modes of reproducing words in any legible form and shall include e-mail except where expressly stated otherwise;

1.3.5

references to "includes" or "including" shall mean "includes without limitation" or "including without limitation";

1.3.6

words in the singular shall include the plural and vice versa, and a reference to any gender includes a reference to all genders or, where appropriate, is to be read as a reference to the opposite gender;

1.3.7

a reference to a person shall include a reference to a firm, a body corporate, an unincorporated association or a partnership;

1.3.8

a reference to a statute or statutory provision shall include a reference to any subordinate legislation made under the relevant statute or statutory provision and, except where expressly stated otherwise, is a reference to that statute, provision or subordinate legislation as from time to time amended, consolidated, modified, re-enacted or replaced.

REPRESENTATIONS AND WARRANTIES

2.1

The Executive represents and warrants to the PLC Company and the Company that, and acknowledges that in entering into this Agreement the Company has relied upon prior representations and warranties by the Executive in the following terms:

2.1.1

save for this Agreement, he will, save as implied by law, be free from all agreements, arrangements or other restrictions seeking to restrict his right to compete with any person or to deal with or solicit clients or solicit, employ or engage employees of any person or in any way restricting him from entering into and performing this Agreement in accordance with its terms;

2.1.2

he has not (directly or indirectly) misappropriated, or otherwise made any unlawful use or disclosure of, any confidential information and/or intellectual property belonging to or relating to the business of any other person (including, for the avoidance of doubt, his previous employer(s)) and will not do so whether prior to the commencement of his employment under this Agreement or otherwise;

2.1.3

he is not prohibited by law from being a director and is permitted by law to work in the UK; and

2.1.4

he has any necessary licences, permissions, consents, approvals, qualifications and memberships required for him to perform his duties under this Agreement and is not and has not been subject to any prohibition, censure, criticism or disciplinary sanction by any professional, regulatory or other body or authority which would prevent him from performing any duties under this Agreement or undermine the confidence of the Board in his employment by the Company.

2.2

The Executive shall indemnify the PLC Company and the Company against all claims, liabilities, losses, costs, and expenses which the PLC Company and the Company may suffer or incur or which may be made against the PLC Company or the Company arising out of, or in respect of, any breach of the warranties and representations in this clause 2.

APPOINTMENT AND TERM

3.1

The Executive shall be employed by the Company as Chief Executive Officer of the PLC Company and shall be a statutory director of the PLC Company and the Company.

3.2

The Executive's employment under the terms of this Agreement shall begin on 1 September 2016 (the “ Effective Date ”) and shall continue, subject to the terms of this Agreement, until determined by either party giving to the other not less than 12 months' written notice to expire at any time.

DUTIES AND POWERS

4.1

The Executive shall comply with his fiduciary and legal duties during the continuance of his employment and, in particular, shall:

4.1.1

comply with the provisions of Part 10 of the Companies Act 2006 (a copy of which will be made available to him) including the:

(A)

duty to act within powers;

(B)

duty to promote the success of the company;

(C)

duty to exercise independent judgment;

(D)

duty to exercise reasonable care, skill and diligence;

(E)

duty to avoid conflicts of interest;

(F)

duty not to accept benefits from third parties; and

(G)

duty to declare interest in proposed transaction or arrangement;

4.1.2

faithfully and diligently perform:

(A)

the usual duties of a Chief Executive Officer; and

(B)

such other duties as may from time to time be assigned to him by the Board, whether those duties relate to the business or interests of the PLC Company or the Company or to the business or interests of any other Associate (and such duties may include holding any office or other appointment in or on behalf of any Associate or any other company for as long as the Company requires);

4.1.3

familiarise himself with and in all respects comply with:

(A)

all and any lawful and reasonable directions given by or under the authority of the Board; and

(B)

all relevant policies, rules and regulations of the PLC Company and the Company from time to time in force; and

(C)

all laws, codes of conduct, rules and regulations or listing rules relevant to the PLC Company, the Company and/or any other Associate or to him as a director of the PLC Company and the Company or as an office- holder of any other Associate.

4.1.4

exercise only such powers as are consistent with his duties and act only in accordance with the Articles of Association of the PLC Company or the Company (as appropriate), where his duties relate to the business or interests of an Associate, of that company;

4.1.5

use his best endeavours to promote the success of the PLC Company and the Company, each for the benefit of its members as a whole and, save where there is any conflict with the success of such company, the success of all Associates;

4.1.6

keep the Board promptly and fully informed (in writing if so requested by the Board) of his conduct of the business, finances or affairs of the PLC Company, the Company and any other Associate and provide such explanations as the Board may require;

4.1.7

promptly disclose to the Board full details of any knowledge or suspicion he has that any employee or officer (including the Executive himself) of the PLC Company, the Company or any other Associate has or plans to commit any serious wrongdoing or serious breach of duty or other act which might materially damage the interests of the PLC Company, the Company or its Associates or plans to leave their employment or to join or establish a business in competition with the PLC Company, the Company or any of its Associates (including details of any steps taken to implement any such plan); and

4.1.8

save where on authorised leave (for holiday or sickness or injury or other reason) and save as modified by the provisions of this Agreement where the Executive is placed on garden leave or suspended, devote the whole of his time, attention and ability during his agreed hours of work to the performance of his duties under this Agreement.

4.2

The nature of the Executive's job is such that his working time is not measured or predetermined. The agreed hours of work of the Executive shall be normal business hours and such other hours as may be required for the proper performance of his duties under this Agreement.

4.3

The Executive shall perform his duties principally at the London office of the Company or at such place or places in the United Kingdom as the Board may from time to time reasonably determine. The Executive may be required to travel for work as reasonably required, the expenses for which he will be reimbursed in accordance with clause 8. The Company will also reimburse the Executive’s reasonable relocation costs in:

4.3.1

moving to London in order to take up employment with the Company; and

4.3.2

if the Executive’s employment is terminated, other than in accordance with clause 17.2, or following the Executive's resignation, moving back to Germany,

provided that the Executive provides the Company with: i) two quotes from reputable relocation service providers for the cost of his relocation, from which the Chairman may choose; and ii) evidence of actual payment of the cost and expenses as the Company may reasonably require. For the avoidance of doubt, all sums paid by the Company to the Executive relating to any reimbursement pursuant to this clause 4.3, shall be grossed up by the Company to reflect any tax payable in respect of those amounts.

SALARY

5.1

During the continuance of his employment the Executive shall be entitled to a salary at the rate of £540,000 per annum (or such higher rate as the Remuneration Committee may from time to time determine and confirm in writing to the Executive).

5.2

The Executive's salary shall accrue from day to day and be payable by equal monthly instalments on or about the last day of each month.

5.3

The Executive's salary shall be inclusive of any other sums receivable as directors' fees or other remuneration to which he may be or become entitled as the holder of offices or appointments in or on behalf of the PLC Company, the Company or of any of its Associates. To achieve this the Executive shall account for any such sums he receives to the Company and his salary shall be reduced by the amount of such sums (and the Executive hereby authorises the Company to make any such reduction(s)).

5.4

The Remuneration Committee shall review the Executive's salary at least once in each twelve months save after notice of termination of this Agreement has been served by either party, but shall not be obliged to make any increase in the salary (but for the avoidance of doubt shall not make any decrease in the salary).

5.5

In addition to his salary, the Executive shall be entitled to participate in such discretionary bonus scheme and other incentive arrangements as may be operated by the Company, on such terms and at such level as the Remuneration Committee may from time to time determine, always provided that the Executive shall have the right to participate in an annual bonus arrangement, paying up to 150% of base salary for attainment of pre-agreed key performance indicators (as set out in Schedule 1 of this Agreement). The Company reserves the right at any time before the relevant year to amend the terms of this bonus scheme (but not so as to reduce the Executive’s maximum percentage bonus opportunity).

5.6

The Executive shall also be entitled to participate in a separate carried interest arrangement which has been communicated to him separately.

5.7

In accordance with the Companies Act 2006, all remuneration payments and benefits due to the Executive (including any payment for loss of office) will only be payable if and to the extent that they are either consistent with the most recent remuneration policy approved by members of the Company pursuant to section 439A of the Companies Act 2006 or are separately approved by resolution of the members of the Company.

5.8

Any payment (or amount treated as paid) under this clause 5 shall be paid less any deductions which the Company may be required under law to make including in respect of income tax and National Insurance Contributions.

PENSION AND INSURANCE BENEFITS

6.1

In lieu of pension contributions, the Company shall pay the Executive an annual amount equal to 10% of his annual base salary under clause 5.1, such amount to be paid in annual monthly instalments at the same time as salary is paid to him.

6.2

The Executive shall be entitled to participate in the Company's life assurance scheme which shall pay to the Executive's dependant(s) a sum equal to four times the Executive's salary if the Executive dies during service. Participation is subject to:

	6.2.1	the terms of the Company's life assurance scheme, as amended from time to time; and

	6.2.2	the rules or the insurance policy of the relevant insurance provider, as amended from time to time.

If the insurance provider refuses for any reason to provide life assurance benefit to the Executive, the Company shall not be liable to provide to the Executive any replacement benefit of the same or similar kind or to pay any compensation in lieu of such benefit.

6.3

The Company shall, at the Executive's election, either:

6.3.1

provide for the Executive to become and during the continuance of his employment remain a member of such private medical insurance and personal accident insurance scheme as the Company may from time to time in its absolute discretion participate in subject to the rules of the scheme (as varied from time to time), Such cover shall be provided for the Executive, his spouse and dependent children under the age of 21 years; or

6.3.2

pay contributions to the Executive's existing private medical insurance arrangements, providing cover for the Executive, his spouse and dependent children under the age of 21 years to a maximum of £1,800 per month.

6.4

The Executive may become and during the continuance of his employment remain a member of such permanent health insurance scheme as the Company may from time to time in its absolute discretion operate, membership being subject to the rules of the Company's scheme (as varied from time to time) details of which are available from the Company Secretary. Nothing in this Agreement shall prevent the Company from terminating the Executive's employment for any reason whatsoever even where the effect of termination is to prejudice, prevent or terminate an actual or prospective claim under the permanent health insurance scheme.

6.5

In the event that the Executive claims under any insurance scheme referred to in sub- clause 6.3 or 6.4 and such claim is rejected by the insurer, the Company shall not be obliged to issue proceedings in relation to such claim but in the event that it does so on the Executive's request the Executive shall indemnify the Company against all costs, expenses and other liabilities arising out of such proceedings.

6.6

To the extent that any benefit provided to the Executive under this clause 6 is taxable, the Company shall, as appropriate, and if required by law, withhold an amount in respect of the income tax, and employee's National Insurance Contributions due on the taxable value of that benefit.

6.7

The Executive shall be entitled to use his current personal telephone and any other telephone most suitable to the location in which the Executive is located and the Company shall reimburse the Executive for all reasonable expenses properly incurred by him in doing so in the performance of his duties under this Agreement and shall from time to time pay for a suitable replacement.

6.8

The Executive shall be entitled to use his personal computer for the performance of his duties under this Agreement (but shall comply with reasonable instructions from the Company regarding Company information on the personal computer, for example saving documents to shared drives) and the Company shall from time to time pay for a suitable replacement.

DIRECTORS' AND OFFICERS' INSURANCE

During the continuance of his employment and for six years following the Termination Date, the Company will procure that the Executive is covered by a policy of directors' and officers' liability insurance on terms no less favourable than those in place from time to time for other members of the Board. The Company will also put in place legal expenses insurance which, subject to any legal restrictions on indemnification for directors of UK incorporated companies or on companies listed on the NASDAQ or the ASX, will cover the cost of legal expenses incurred by the Executive in seeking to enforce the terms of the directors’ and officers’ liability insurance policy described above, and any legal fees incurred by the Executive in relation to the defence or pursuit of any claim relating to the execution of his duties on behalf of the Company or any Associated Company.

EXPENSES, GRATUITIES AND DEDUCTIONS

8.1

The Company shall reimburse the Executive all reasonable travelling (including business class air-fares with any commercial airline of the Executive's choice), hotel, mobile telephone, IT (including in relation to his personal computer), entertainment and other expenses properly incurred by him in the performance of his duties under this Agreement, provided that the Executive claims these in accordance with the Company's expenses reporting procedure in force from time to time. The Executive shall, if so required provide the Company with receipts or other evidence of the payment of such expenses in accordance with the Company's expense reporting procedure in force from time to time. If the Executive is provided with a company credit card or charge card, he shall use it only for such expenses as he is entitled under this sub-clause to have reimbursed by the Company.

8.2

The Executive shall not during the continuance of his employment seek or (unless fully disclosed to and approved in advance by the Board) accept from any actual or prospective customer, contractor or supplier of the Company or of any Associate any gift, gratuity or benefit of more than a trivial value or any hospitality otherwise than properly in the performance of his duties to the Company and of a kind and value not lavish, extravagant or inappropriate.

8.3

The Executive hereby agrees that at any time during the continuance of his employment under this Agreement and on termination of his employment the Company shall be entitled to deduct from any sums due to the Executive (including salary, pay in lieu of notice, bonus, holiday pay or sick pay) any outstanding monies then owed by the Executive to the Company, including all outstanding loans or advances of salary made by the Company to the Executive (and any interest), any expense floats, any pay received for holiday taken in excess of the Executive's accrued holiday entitlement under clause 9, any sums paid on behalf of the Executive by the Company which have not been incurred by the Executive in the proper performance of his duties.

HOLIDAYS

9.1

In addition to English public holidays, the Executive shall be entitled to 30 days' holiday in each holiday year of the Company running from 1 April to 31 March, to be taken at such times as may be approved by the Board (and Regulations 15(1) to 15(4) of the Working Time Regulations 1998 concerning the arrangements for taking holiday are hereby excluded). The first 28 days of holiday taken in the holiday year including public holidays shall be deemed to be the Executive's statutory leave entitlement firstly under Regulation 13 and then under Regulation 13A of the Working Time Regulations 1998. Holidays may be carried forward from one holiday year to the next where, for work-related reasons the Executive is unable to take holiday during the holiday year. No payment shall be made by the Company (during the continuance of this Agreement) in lieu of holidays not taken except as required by law or as set out under sub-clause 9.2.

9.2

Upon termination of this Agreement for whatever reason the Executive shall be entitled to payment in lieu of such of his holiday entitlement under sub-clause 9.1 as has accrued (on a pro rata basis) in the holiday year in which the Termination Date falls but has not been taken or such holiday the Executive is entitled to under sub-clause 9.1 that has been carried forward in accordance with clause 9.1. If appropriate, the Executive shall repay to the Company any salary received in respect of holiday taken prior to the Termination Date in excess of his accrued entitlement under sub-clause 9.1. In either case (and for the purposes of Regulation 14 of the Working Time Regulations 1998) the payment shall be calculated by multiplying the unused or excess entitlement (as the case may be) by 1/260 of the Executive's salary at that time.

9.3

Subject to clause 9.2, the Company shall be entitled to require the Executive to take all or any part of any accrued untaken holiday entitlement during any period of notice to terminate the Executive's employment (including, for the avoidance of doubt, during any period of garden leave pursuant to clause 18). If the Company exercises this right, the Executive must obtain the prior agreement of the Board to the actual days to be taken as holiday. Save to the extent required by the Working Time Regulations 1998, the Executive's entitlement under sub-clause 9.1 shall not accrue during any period of absence from work due to sickness or injury in excess of 90 continuous days (unless otherwise agreed by the Company in its discretion up to a maximum of 120 continuous days) or during any period of unpaid leave (excluding statutory additional maternity, paternity or adoption leave).

10.

SICKNESS AND INJURY

10.1

If the Executive is absent from work as a result of sickness or injury he must:

10.1.1

notify a member of the Board or the Company Secretary as soon as practicable on the first day of his absence;

10.1.2

if the period of absence is less than eight consecutive calendar days, submit to the Company on his return a certificate of sickness or injury completed by himself;

10.1.3

if the period of absence is eight consecutive calendar days or more, submit to the Company without delay a medical certificate signed by a practising medical practitioner in respect of each week of absence after the first.

10.2

The Executive agrees that he shall at the expense of the Company and if directed to do so by the Board at any time undergo a medical examination by a medical practitioner nominated by the Company and shall authorise (and does hereby authorise) such medical practitioner to disclose to the Company and provide (for the Company to retain) a copy of any medical report, diagnosis or prognosis made or produced in relation to any such medical examination. The Executive further agrees that he shall authorise the medical practitioner and the Company to discuss together any matters arising from such medical report, diagnosis or prognosis.

10.3

The Executive shall, subject to compliance with sub-clauses 10.1 and 10.2 and to clause 17, be entitled to

10.3.1

payment of his salary at the full rate less any social security or other state benefits or payments due under any health and disability scheme payable to him, whether claimed or not (and the Executive shall inform the Company of his entitlement to any such payments or benefits), and

10.3.2

provision of all contractual benefits set out in this Agreement save as set out below

during any periods of absence from work as a result of sickness or injury up to 90 days in aggregate in any twelve consecutive months (unless otherwise agreed by the Company in its discretion up to a maximum of 120 days) in aggregate in any twelve consecutive months. The Executive shall not be entitled to any payment of salary or provision of contractual benefits during any absence in excess of that maximum and any payment or provision made in respect of such period shall be at the absolute discretion of the Company.

10.4

The Company shall pay statutory sick pay, where appropriate, in accordance with the legislation in force at the time of absence, and any payment of salary in accordance with this clause shall go towards discharging its liability to pay statutory sick pay.

11.

INTERESTS IN OTHER BUSINESSES

Save with the prior written consent of the Chairman of the Board (consent not to be unreasonably withheld and it being acknowledged that the Executive shall not hold more than three non-executive directorships at any one time), the Executive shall not during the continuance of his employment be engaged or interested (except: i) as the holder for investment of up to 5% of any class of securities which are quoted or dealt in on a Recognised Investment Exchange which are not the securities of any company which competes or proposes to compete with the business of the Company or any of its Associates; or ii) in relation to securities which are not quoted or dealt in on a Recognised Investment Exchange, where: a) those securities are not securities of any company which competes or proposes to compete with the business of the Company or any of its Associates; or b) those securities, which are securities of any company which competes or proposes to compete with the business of the Company or any of its Associates, have been expressly agreed to by the Chairman in writing), nor make preparations to be engaged or interested either directly or indirectly in any business or occupation (excluding any charitable work) other than the business of the Company and its Associates. Consent is hereby given in relation to the Executive's non-executive directorships with Solarcentury Holdings Ltd, Joh. Friedrich Behrens AG and Lucis Technologies Ltd. The Board and the Executive shall periodically review the Executive’s non-executive directorships, and where the Board and the Executive come to the view that the Executive’s non-executive directorships conflict (or are reasonably likely to conflict) or unreasonably interfere with the proper performance of the Executive's roles as CEO or director, the Board and the Executive shall agree upon an appropriate solution in respect of the Executive’s non- executive directorships.

12.

SHARE DEALINGS

The Executive shall at all times comply with every rule of law and every regulation of any applicable Recognised Investment Exchange or regulatory authority in relation to any dealings in any shares or their securities in any company and in relation to inside information. During the employment the Executive shall also comply with any share dealing code from time to time in place within the Company or the PLC Company.

13.

INTELLECTUAL PROPERTY

In this clause 13, "Intellectual Property Rights" means all inventions (whether patentable or not), patents, utility models, petty patents, registered designs, design rights, database rights, copyright and related rights, topography rights, plant variety rights, trade marks, service marks, logos, get up, trade names, domain names, (in each case whether registered or unregistered) and including any applications for registration and any renewals or extensions of and rights to claim priority from, any of the foregoing and, in each case, the goodwill attaching to any of the foregoing, rights to sue for passing off or for unfair competition, all know how, confidential information and trade secrets and any rights or forms of protection of a similar nature or having equivalent or similar effect to any of them which subsist now or will subsist in the future anywhere in the world.

13.1

If during his employment under this Agreement the Executive in the course of his normal duties or other duties specifically assigned to him (whether or not during normal working hours or using Company premises, resources or facilities) either alone or in conjunction with any other person:

13.1.1

makes, discovers, develops or produces any invention, innovation, process, improvement or development (whether or not patentable or capable of registration and whether or not recorded in any medium) ( "Inventions" ); or

13.1.2

originates any design, trade mark, logo, know how, database, artistic or literary work (in each case whether registerable or not) or other work ( "Works" ); or

13.1.3

creates any other Intellectual Property Rights,

then he shall forthwith disclose the same to the Company and shall (subject to sub-clauses 13.2, 13.3, 13.4, 13.5 and 13.6) hold such Inventions, Works and Intellectual Property Rights on trust for the Company and he hereby undertakes to keep confidential all information about and details of the Inventions, the Works and the Intellectual Property Rights.

13.2

The Executive hereby assigns wholly and absolutely with full title guarantee including the right to sue for damages for past infringements to the Company, by way of future assignment, the copyright and future copyright, and the design right and future design right, for the full term thereof throughout the world including any extensions or renewals arising in respect of all such Works referred to in clause 13.1.

13.3

The Executive waives all his present and future moral rights (and all similar rights in other jurisdictions), if any, arising in respect of such Works referred to in clause 13.1.

13.4

The Executive acknowledges that all Inventions, Works and Intellectual Property Rights referred to in clause 14.1 and all materials embodying them shall automatically belong to the Company to the fullest extent permitted by law and in particular:

13.4.1

The Executive acknowledges that for the purpose of section 11 of the Copyright Designs and Patents Act 1988 the Company shall be the first owner of any copyright works made during the course of his employment.

13.4.2

The Executive acknowledges that, for the purposes of the Copyright, Designs and Patents Act 1988, section 2(1) of the Registered Designs Act 1949 as amended by the Copyright, Designs and Patents Act 1988, and Article 14 of the Community Design Regulation EC No. 6/2002, the Company shall be treated as the original proprietor of a design, where such design is, created by him during his employment.

13.4.3

The Executive acknowledges that for the purpose of the Copyright and Rights in Databases Regulations 1997 (as from time to time amended, extended or re- enacted) the Company shall be treated as the maker of any such database, where such database is created by him during his employment.

13.5

Any Inventions made discovered or produced by the Executive referred to in clause 13.1 shall be the absolute property of the Company (except to the extent, if any, provided otherwise by section 39 of the Patents Act 1977) and the Executive shall, without additional payment, if and when required by the Company (whether during the continuance of his employment or afterwards) and at its expense, apply, or join with the Company in applying, for any patent at the Company's expense, or other protection in any part of the world for any invention process or development.

13.6

The Executive shall execute all documents and do all acts (both during and after his employment by the Company) necessary to confirm the vesting in the Company or its nominee absolutely of title to and/or registering in the name of the Company or its nominee any or all applicable Inventions, Works and/or Intellectual Property Rights referred to in clause 13.1 (except only to the extent that by virtue of Section 39 of the Patents Act 1977 such Intellectual Property Rights fail to vest in the Company) in any or all countries.

13.7

The Executive agrees and undertakes that he shall execute such deeds or documents and do all such acts and things as may be necessary or desirable (both during and after his employment by the Company) to protect and maintain the rights of the Company in respect of the matters referred to in sub-clauses 13.1 to 13.5 (inclusive).

13.8

The Executive shall do nothing (whether by omission or commission) during his employment or at any times thereafter to affect or imperil the validity of any Intellectual Property Rights obtained, applied for or to be applied for by the Company or its nominee.

The Executive shall not disclose the subject matter of any Inventions which may be patentable before the Company has had the opportunity to apply for any patent.

13.9

Nothing in this Agreement shall oblige the Company, its nominee or any Associates to seek patent or other protection for any Invention or to exploit any Invention.

13.10

The Executive acknowledges that, because of the nature of his duties and the particular responsibilities arising from the nature of his duties, he has, and shall have at all times while he is employed by the Company, a special obligation to further the interests of the Company.

14.

CONFIDENTIALITY

14.1

Save in the proper performance of his duties under this Agreement or if authorised to do so by the Board or ordered to do so by a court of competent jurisdiction or required to do so by any statutory or regulatory authority, the Executive shall not during his employment or afterwards directly or indirectly:

	14.1.1	use for his own benefit or the benefit of any other person or to the detriment of the Company or any of its Associates;

	14.1.2	disclose to any person; or

	14.1.3	through any failure to exercise all due care and diligence cause or permit any unauthorised disclosure of

any Confidential Information.

14.2

The Executive shall use his best endeavours during the continuance of his employment to prevent the publication, disclosure or misuse of any Confidential Information and shall not remove, nor authorise others to remove, from the premises of the Company or of any of its Associates any records of Confidential Information except to the extent strictly necessary for the proper performance of his or the other person's duties to the Company or any of its Associates.

14.3

The Executive shall promptly disclose to the Company full details of any knowledge or suspicion he has (whether during or after his employment) of any actual, threatened or pending publication, disclosure or misuse by any person (including the Executive himself) of any Confidential Information and shall provide all reasonable assistance and co- operation (at the Company’s expense) as the Company may request in connection with any action or proceedings it may take or contemplate in respect of any such publication, disclosure or misuse.

14.4

This clause 14 is without prejudice to the Executive's equitable duty of confidence.

14.5

Nothing in this Agreement shall preclude the Executive from making a protected disclosure in accordance with the provisions set out in the Employment Rights Act 1996.

15.

PROTECTION OF INTERESTS OF COMPANY ETC.

15.1

In this clause:

15.1.1

"Competing Business" shall mean any business carried on within England, Wales, Scotland, Northern Ireland, Ireland, the United States of America, Australia, Philippines, Singapore or Uruguay or any other country in which the PLC Company, the Company or any of its Subsidiaries or Associates as at the Termination Date carries on or proposes to carry on (in the immediate or foreseeable future) any business, which wholly or partly competes or proposes to compete with any business which at the Termination Date the PLC Company, the Company or any of its Subsidiaries or Associates carries on, save for any such business in any such country in which the Executive was not involved to any material extent at any time during the 12 months up to and including the Termination Date and in relation to which the Executive did not possess material Confidential Information as at the Termination Date;

15.1.2

"Prospective Business" shall mean any business carried on within England, Wales, Scotland, Northern Ireland, Ireland, the United States of America, Australia, Philippines, Singapore or Uruguay or any other country in which the PLC Company, the Company or any of its Subsidiaries or Associates as at the Termination Date carries on or proposes to carry on (in the immediate or foreseeable future) any business, which wholly or partly competes or proposes to compete with any business which at the Termination Date the PLC Company, the Company or any of its Subsidiaries or Associates proposes to carry on in the immediate or foreseeable future, save for any such business in any such country in relation to which the Executive did not possess material Confidential Information as at the Termination Date;

	15.1.3	"Restricted Goods or Services" shall mean goods or services of the same type as or similar to or competitive with any goods or services supplied by the PLC Company, the Company or any of its Subsidiaries or Associates at the Termination Date, in the sale or supply of which the Executive shall have been involved to any material extent at any time during the 12 months up to and including the Termination Date;

	15.1.4	references to acting directly or indirectly shall include (without prejudice to the generality of that expression) acting alone or on behalf of any other person or jointly with or through or by means of any other person.

15.2

Until the expiration of 6 months from the Termination Date, except in the event of a termination of this Agreement by the Company in repudiatory breach of its terms, the Executive shall not directly or indirectly:

15.2.1 carry on or be interested in a Competing Business SAVE that he may hold for investment:

	(A)	up to 3% of any class of securities quoted or dealt in on a Recognised Investment Exchange; and

	(B)	up to 10% of any class of securities not so quoted or dealt;

15.2.2

act as a consultant or employee or worker or officer in any executive, sales, marketing, research or technical capacity in a Competing Business or provide technical, commercial or professional advice to a Competing Business, SAVE to the extent that the Executive demonstrates to the reasonable satisfaction of the Board that his duties or work (i) shall relate exclusively to work of a kind or nature with which he was not concerned to any extent (other than de minimis) at any time during the 12 months up to and including the Termination Date and (ii) shall not involve a material risk of deliberate or inadvertent disclosure or use of any of the Confidential Information possessed by the Executive;

15.2.3

act as a consultant or employee or worker or officer in any executive, sales, marketing, research or technical capacity in a Prospective Business or provide technical, commercial or professional advice to a Prospective Business, SAVE to the extent that the Executive demonstrates to the reasonable satisfaction of the Board that his duties or work (i) shall relate exclusively to work of a kind or nature with which he was not concerned to any extent (other than de minimis) at any time during the 12 months up to and including the Termination Date and (ii) shall not involve a material risk of deliberate or inadvertent disclosure or use of any of the Confidential Information possessed by the Executive,

15.3

Until the expiration of 6 months from the Termination Date, except in the event of a termination of this Agreement by the Company in repudiatory breach of its terms, the Executive shall not directly or indirectly accept orders for or supply or cause orders to be accepted for or cause to be supplied Restricted Goods or Services to any person:

15.3.1

who was provided with goods or services by the PLC Company, the Company or any of its Subsidiaries or Associates at any time during the 12 months up to and including the Termination Date and with whom the Executive dealt in connection with the provision of such goods or services at any time during the said 12 month period or in relation to whose dealings with the PLC Company, the Company or any of its Subsidiaries or Associates the Executive possessed a material amount of Confidential Information as at the Termination Date; or

15.3.2

who was negotiating with the PLC Company, the Company or any of its Subsidiaries or Associates in relation to orders for or the supply of goods or services at any time during the 12 months up to and including the Termination Date and with whom the Executive dealt at any time during the 12 months up to and including the Termination Date or in relation to whose dealings with the Company or any of its Subsidiaries or Associates the Executive possessed a material amount of Confidential Information as at the Termination Date.

15.4

15.4.1

who was provided with goods or services by the PLC Company, the Company or any of its Subsidiaries or Associates at any time during the 12 months up to and including the Termination Date and with whom the Executive dealt in connection with the provision of such goods or services at any time during the said 12 month period or in relation to whose dealings with the Company or any of its Subsidiaries or Associates the Executive possessed a material amount of Confidential Information as at the Termination Date; or


	15.4.2	who was negotiating with the PLC Company, the Company or any of its Subsidiaries or Associates in relation to orders for or the supply of goods or services at any time during the 12 months up to and including the Termination Date and with whom the Executive dealt at any time during the 12 months up to and including the Termination Date or in relation to whose dealings with the PLC Company, the Company or any of its Subsidiaries or Associates the Executive possessed a material amount of Confidential Information as at the Termination Date;

for the purpose of offering to that person Restricted Goods or Services.

15.5
Until the expiration of 6 months from the Termination Date, except in the event of termination of this Agreement by the Company in repudiatory breach of its terms, the Executive shall not directly or indirectly:

15.5.1

solicit, canvass or approach or endeavour to solicit, canvass or approach or cause to be solicited, canvassed or approached for the purpose of:

(A)

obtaining the supply of goods or services of the same type as or similar to any goods or services supplied to the PLC Company, the Company or any of its Subsidiaries or Associates at the Termination Date; or

(B)

interfering with or endeavouring to terminate or reduce the levels of such supplies to the PLC Company, the Company or any of its Subsidiaries or Associates,

any person who supplied the PLC Company, the Company or any of its Subsidiaries or Associates with any such goods or services at any time during the 12 months up to and including the Termination Date and with whom the Executive dealt at any time during the said 12 month period or in relation to whom as at the Termination Date the Executive possessed a material amount of Confidential Information where it is reasonably likely that such soliciting, canvassing or approaching would, if successful, materially prejudice the ability of the Company or any of its Subsidiaries or Associates to procure or the terms on which it is able to procure the supply of such goods or services; or

15.5.2

knowingly interfere with any arrangements between the PLC Company, the Company or any of its Subsidiaries or Associates and any third party or parties whereby the PLC Company, the Company or the relevant Subsidiary or Associate holds a licence or permission to carry on its business or benefits from discounts or other beneficial trading terms extended to it by a supplier of goods or services by virtue of such arrangements; or

15.5.3

knowingly or recklessly do anything which is or is calculated to be prejudicial to the interests of the PLC Company, the Company or any of its Subsidiaries or Associates or the business of the Company or any of its Subsidiaries or Associates or which results or may result in the discontinuance of any contract or arrangements of benefit to the PLC Company, the Company or any of its Subsidiaries or Associates;

and for these purposes any agreement between the PLC Company, the Company or any of its Subsidiaries or Associates and a third party whereby that third party sources customers or goods or services for the PLC Company, the Company or any of its Subsidiaries or Associates shall also be deemed to constitute a supply of a service by such third party.

15.6

Until the expiration of 6 months from the Termination Date, except in the event of a termination of this Agreement by the Company in repudiatory breach of its terms, the Executive shall not directly or indirectly solicit or entice away or endeavour to solicit or entice away or cause to be solicited or enticed away from the PLC Company, the Company or any of its Subsidiaries or Associates any person who is, and was at the Termination Date, employed or directly or indirectly engaged by the PLC Company, the Company or any of its Subsidiaries or Associates in an executive, sales, marketing, research or technical capacity or whose departure from the PLC Company, the Company or any of its Subsidiaries or Associates would have a material adverse effect on the business of such company, and with whom the Executive worked at any time during the 12 months up to and including the Termination Date or in relation to whom as at the Termination Date the Executive possessed a material amount of Confidential Information, with a view to inducing that person to leave such employment or engagement (whether or not such person would commit a breach of his contract of employment or engagement by reason of leaving).

15.7

In the event that the Executive is placed on garden leave pursuant to sub-clause 18.1, during which the Company exercises its rights under sub-clause 18.1.4 or 18.1.5, the period of any such garden leave shall be deducted from the period of the restrictions contained in sub-clauses 15.2, 15.3, 15.4, 15.5 and 15.6.

15.8

The restrictions in clause 15.2 will only apply if the Executive receives a remuneration payment (including base salary, the cost to the Company of the contractual benefits referred to in clauses 6.1 to 6.4, bonus and any sums accrued and outstanding under the carried interest arrangement) in respect of the relevant period of restriction. For the avoidance of doubt, the Executive shall be deemed to have received a remuneration payment if the period of restriction encompasses a period in respect of which he has been paid in accordance with clause 17.10.

15.9

Each of the restrictions in sub-clauses 15.2.1, 15.2.2, 15.2.3, 15.3.1, 15.3.2, 15.4.1, 15.4.2, 15.5.1, 15.5.2, 15.5.3, 15.6 hereof is separate and severable and in the event of any such restriction (including the defined expressions in sub-clauses 1.1.1, 1.1.5, 15.1.1, 15.1.2, 15.1.3 and 15.1.4) or sub-clause 15.7 being determined as being unenforceable in whole or in part for any reason such unenforceability shall not affect the enforceability of the remaining restrictions or, in the case of part of a restriction being unenforceable, the remainder of that restriction. The restrictions in sub-clauses 15.2.1, 15.2.2 and 15.2.3 shall be deemed to be separate and severable in relation to each of the countries set out in sub- clauses 15.1.1 and 15.1.2.

15.10

After the Termination Date (for whatever reason and howsoever caused) or, if later, the date of his ceasing to be a director of the Company the Executive shall not represent himself or permit himself to be held out as being in any way connected with or interested in the business of the PLC Company, the Company or of any of its Subsidiaries or Associates and shall not use in connection with any business the name of the Company or any of its Subsidiaries or Associates or any name capable of confusion therewith.

15.11

Save for a protected disclosure made in accordance with the provisions set out in the Employment Rights Act 1996 and save as required by law or the regulations of any statutory or regulatory authority, the Executive shall not during his employment or after the Termination Date make, publish or cause to be made or published any statement or remark which is likely or intended to harm the business or reputation of the Company or any of its Subsidiaries or Associates or any current or former officer, employee, consultant or agent of any such company.

15.12

The restrictions entered into by the Executive in sub-clauses 14, 15.2, 15.3, 15.4, 15.5, 15.6, 15.7, 15.8, 15.10 and 15.11 are given to the Company to hold as trustee for itself and for each and any of its Subsidiaries and Associates and the Executive agrees that he shall at the request and cost of the Company enter into a further agreement with any such company whereby he shall accept restrictions corresponding to the restrictions in this Agreement (or such of them as that company in its discretion shall deem appropriate). The Company declares that insofar as these restrictions relate to such Subsidiary or Associate it holds the benefit of them as trustee for such Subsidiary or Associate as the case may be. As regards any powers, authorities and discretions vested in the Company as trustee hereunder or by operation of law, the Company shall have absolute and uncontrolled discretion as to the exercise or non-exercise thereof and shall not (save in the case of its gross negligence or wilful misconduct) be responsible for any loss, costs, damages or expenses that may result from the exercise or non-exercise thereof.

15.13

Following the Termination Date, the Company reserves the right forthwith on written notice to the Executive given in accordance with clause 29 to assign its rights under clauses 14 and 15 to any successor in business to the Company or to any of its Subsidiaries or Associates.

15.14

The Executive acknowledges that he has had the opportunity to take legal advice in relation to the restrictions contained in this clause 15 and that he considers them reasonable and necessary for the protection of the legitimate interests of the Company and its Subsidiaries and Associates.

15.15

Without prejudice to the Executive's obligations under clauses 14 and 15, in the event that, during the continuance of this Agreement or during the period for which all or any of the restrictions set out in this clause 15 are expressed to apply, the Executive receives from any person an offer of employment or engagement (whether oral or in writing) which the Executive is considering whether to accept, the Executive shall provide to such offeror a copy of the restrictions contained in clauses 14 and 15 of this Agreement. In the event that the Executive accepts any such offer, he shall immediately inform the Board of the identity of the offeror and a description of the principal duties of the position accepted and shall confirm to the Board in writing that he has provided a copy of the restrictions contained in clauses 14 and 15 of this Agreement to such offeror.

16.

INTERIM APPOINTMENT

The Company shall be entitled:

16.1

during the whole or part of any period of notice to terminate the Executive's employment served by either party; and/or

16.2

if the Executive is absent from work as a result of sickness or injury or other leave for more than 90 consecutive days, for the period of continued absence,

to appoint another person or persons to hold the same or similar job title on an interim basis and to carry out all or any of the Executive's duties instead of him.

17.

TERMINATION

17.1

Either party shall be entitled to terminate the employment of the Executive by giving notice to the other in accordance with sub-clause 3.2.

17.2

Notwithstanding sub-clause 3.2 and without prejudice to its rights under the other provisions of this clause 17, the Company shall be entitled to terminate the employment of the Executive with immediate effect by giving summary notice if the Executive commits a repudiatory breach of this Agreement or if the Board reasonably considers that any of the events set out below occur or have occurred (whether or not such event would otherwise be a repudiatory breach):

17.2.1

the Executive commits a serious or persistent breach of any material term of this Agreement;

17.2.2

the Executive is guilty of conduct (whether or not related to his employment or office) likely in the reasonable opinion of the Board to bring himself or the Company or any Associate into disrepute;

17.2.3

the Executive repeatedly neglects, fails or refuses to carry out any of the duties properly assigned to him under this Agreement;

17.2.4

the Executive becomes bankrupt or compounds with his creditors;

17.2.5

save in the case of impending insolvency where the Board does not heed the Executive's reasonable recommendations and the Executive considers himself obliged to resign, the Executive without the express written consent of the Board resigns from (other than pursuant to the Company’s request under sub-clause 17.6), or fails to offer himself for re-election to, his office as a director of the Company or of any Associate of which he has been appointed a director, or if he shall be disqualified from holding or shall cease to be qualified to hold office as a director by any order of the Court or under any provision of general law from time to time;

17.2.6

the Executive commits any serious or persistent breach of the Company's equal opportunity or health and safety policy in force from time to time; or

17.2.7

the Executive

(A)

is disqualified or disbarred from membership of; or

(B)

is subject to any prohibition, censure, criticism or disciplinary sanction by; or

(C)

fails to be granted or obtain, or ceases to hold, any necessary licences, permissions, consents, approvals or qualifications (in unrestricted form) from

any professional, regulatory or other body or authority, which prevents him from performing any of his duties under this Agreement or undermines the confidence of the Board in his continued employment by the Company.

For the avoidance of doubt, in the circumstance of a termination pursuant to this clause 17.2 the Executive shall have no pro-rata entitlement to any bonus or carried interest arrangement in respect of that year.

17.3

The parties to this Agreement agree that termination under sub-clause 17.2 shall be deemed to be for a substantial reason justifying dismissal within Section 98(1)(b) of the Employment Rights Act 1996. The parties further agree that termination under sub-clause

17.2 shall be deemed to be by reason of the Executive's conduct within Section 86(6) of the Employment Rights Act 1996.

17.4

In order to investigate a complaint against the Executive of misconduct and to allow the Company to carry out whatever investigations it deems appropriate, the Company may suspend the Executive for a reasonable period on full pay and other contractual benefits save as set out below and may do any or all of the following:

17.4.1

exclude the Executive from all or any premises of the Company or any Associate; or

17.4.2

require the Executive to abstain from engaging in any contact (whether or not initiated by him) which concerns any of the business affairs of the Company or any Associate with any customer, client, supplier, other business connection, employee, director, officer, consultant or agent of the Company or any Associate; or

17.4.3

require the Executive to deliver up to the Company (to whomever the Board specifies), without destruction, deletion or redaction of any data or images, any correspondence, documents, laptops, computer drives, computer disks and other computer equipment, tapes, mobile telephones, or BlackBerry wireless devices (or similar equipment) in his possession or under his control and which belong to the Company or any of its Associates, and to provide to the Company full details of all then current passwords or other privacy or security measures used by the Executive in respect of any such equipment; or

17.4.4

suspend or limit the Executive’s access to the Company’s and any Associate's computer, e-mail, telephone, voicemail and other communication systems or databases.

17.5

During any period of suspension pursuant to sub-clause 17.4, the Executive shall (for the avoidance of doubt) continue to be bound by the duties of fidelity and good faith, shall hold himself available during normal business hours (other than agreed holidays or authorised absence for sickness or injury or other authorised leave) to perform any duties that may be assigned to him (if any), and shall continue to comply with the terms of this Agreement including clauses 11 to 14 (inclusive). Except where subsequently reinstated, the Executive shall have no eligibility for any bonus (including the bonus referred to in sub- clause 5.5) in respect of the period of any such suspension and shall have no claim in respect of the effect (if any) which any such suspension may have on his eligibility in respect of any other period. If the Executive ceases to be available for work as a result of sickness or injury during any period of suspension pursuant to sub-clause 17.4, the suspension will be rescinded until such time as the Executive becomes fit for work. Notwithstanding such rescission, the Executive must continue to comply with any instruction issued by the Company in the terms set out in sub-clauses 17.4.1 to 17.4.4.

17.6

On the Termination Date (for whatever reason and howsoever caused), or at the Company's request following the Executive having been placed on garden leave pursuant to sub-clause 18.1, the Executive shall promptly:

17.6.1

resign (if he has not already done so) from any and all offices and appointments held by him in or on behalf of the Company or any of its Associates;

17.6.2

deliver up to the Company (to whomever the Board specifies), without destruction, deletion or redaction of any data or images, any and all originals, copies or extracts of:

(A)

correspondence, documents (including lists of customers), laptops, computer drives, computer disks, other computer equipment (including leads and cables), tapes, mobile telephones, BlackBerry wireless devices (or similar equipment), credit cards, security passes, keys, car provided by the Company (which is to be returned in good condition allowing for fair wear and tear) and other tangible items, which are in his possession or under his control and which belong to or are leased or hired by the Company or any of its Associates; and

(B)

correspondence and documents (including lists of customers) in his possession or under his control which contain or refer to any Confidential Information; and

(C)

minutes of meetings and other papers of the Board and of any board of directors of any Associate which are in his possession or under his control

and provide to the Company full details of all then current passwords or other privacy or security measures used by the Executive in respect of any equipment required to be delivered up to the Company pursuant to sub-clause 17.6.2(A); and

17.6.3

having forwarded a copy to the Company, irretrievably delete as far as technically possible any and all Confidential Information from any laptops, computer drives, computer disks, tapes, mobile telephones, BlackBerry wireless devices (or similar equipment) or other re-usable material in the Executive's possession or under his control (but which do not belong to the Company or any of its Associates).

17.7

The Executive irrevocably authorises the Company in his name and on his behalf to execute all documents and do all things necessary to effect the resignations referred to in sub-clause 17.6.1, in the event of his failure to do so within seven days of any request or the Termination Date (as the case may be). The Executive shall produce such evidence of his compliance with sub-clauses 17.6.2 and 17.6.3 as the Company may reasonably require. In the event of the Executive's death prior to compliance with the obligations in sub-clauses 17.6.2 and 17.6.3, the Executive's estate and heirs shall be bound by such obligations.

17.8

Any obligations of the Executive under this Agreement which are expressed to continue after the Termination Date shall continue in full force and effect notwithstanding the termination of his employment.

17.9

For the purposes of sub-clause 17.10, the "Period" shall mean:

17.9.1

the unexpired portion of any prior notice of termination of the Executive's employment which has already been given by the Executive or the Company (as at the date of service of notice pursuant to this sub-clause); or

17.9.2

where no such prior notice has been given, the minimum period of notice of termination specified as to be given by the Company in sub-clause 3.2.

17.10

The Company may, in its absolute discretion and without any obligation to do so, terminate the Executive's employment with immediate effect by giving him written notice given in accordance with clause 29 that it will make a payment of such sum as would have been payable by the Company to the Executive as base salary (for the avoidance of doubt, excluding any bonus, carry arrangement, other incentives or benefits) plus the cost to the Company of the contractual benefits referred to in clauses 6.1 to 6.4 in respect of the Period less any deductions which the Company may be required to make including in respect of income tax and employee's National Insurance contributions. If the Company gives such notice, the Executive agrees that his employment under this Agreement will terminate with effect from the date the notice was deemed given in accordance with clause 29 and the Company will make the payment specified herein in accordance with clause 17.12. If the Executive's employment is terminated pursuant to this clause 17.10 it is agreed that the Executive shall be entitled to participate in the bonus scheme and carried interest arrangement referred to in this Agreement in clauses 5.5 and 5.6 on a pro-rata basis in respect of the period up to the Termination Date (with any amounts payable under these schemes to be paid at the same time as payments are made under such schemes to other participants). For the avoidance of doubt, the termination of the Executive’s employment will not affect the Executive’s entitlements under the bonus scheme and carried interest arrangement other than in relation to the pro-rating of any benefit.

17.11

Any such payment shall be accepted by the Executive in full and final settlement of all claims which he may have against the Company or any Associate arising out of his employment or its termination. The discretion to terminate the Executive's employment given to the Company by this sub-clause shall not preclude the Company from exercising any other right which it may have to terminate the Executive's employment or by otherwise dismissing him without notice and paying such compensation as may be agreed or otherwise determined by a court of law.

17.12

Any payment of base salary and contractual benefits to be made to the Executive pursuant to clause 17.10 shall be made in two equal instalments. The first instalment shall be made within seven Working Days after the Termination Date and the second instalment shall be made no later than the date that falls 6 months after the Termination Date. The amount payable to the Executive under the second instalment shall be reduced by an amount equal to any payments or benefits received by the Executive from alternative employment or engagement after the Termination Date and up to the date on which the second instalment is due for payment. For the avoidance of doubt, alternative employment shall not take account of any role performed by the Executive in the 6 months following the Termination Date if the Executive performed the role before the Termination Date and/or it was disclosed and/or permitted as required under this Agreement.

17.13

The Executive shall not be entitled to any payment pursuant to clause 17.10 if the Company is able to demonstrate (with appropriate supporting evidence) that it would otherwise have been entitled to terminate the employment of the Executive without notice in accordance with sub-clause 17.2.

18.

GARDEN LEAVE

18.1

Notwithstanding the provisions of clause 4, at any time after notice has been served by either party pursuant to sub-clause 3.2 or if the Executive resigns without giving due notice and the Company does not accept his resignation, the Company may in its discretion place the Executive on garden leave on full salary and other contractual benefits for up to a maximum of twelve months. It is agreed that the Executive shall be entitled to participate in the bonus scheme and carried interest arrangement referred to in this Agreement in clauses 5.5 and 5.6 on a pro-rata basis in respect of the period in which the Executive is on garden leave up to the Termination Date. For the avoidance of doubt, the Executive being on garden leave and/or under notice will not affect the Executive’s entitlements under the bonus scheme and carried interest arrangement other than in relation to the pro-rating of any benefit. During any such garden leave period the Company shall not be obliged to provide any work for the Executive or to assign to or vest in the Executive any powers, duties or functions and may for all or part of such garden leave period do any or all of the following:

	18.1.1	exercise its rights under clause 16;

	18.1.2	announce externally or internally or both that the Executive has given or been given notice of termination of his employment or office(s) and been placed on garden leave and (where applicable) that a substitute has been appointed;

	18.1.3	exclude the Executive from all or any premises of the Company or of any Associate;

18.1.4

18.1.5

require the Executive to carry out no duties;

18.1.6

save where absent due to agreed holidays or authorised absence for sickness or injury or other authorised leave, require the Executive to undertake at his home or at such place reasonably nominated by the Company such reasonable duties (which may differ from the Executive's normal duties) as the Company may at its discretion assign and to provide any reasonable assistance requested by the Company;

	18.1.7	exercise its rights under sub-clause 9.3;

	18.1.8	suspend or limit the Executive’s access to the Company’s computer, e-mail, telephone, voicemail or other communication systems or databases;

18.1.9

exercise its rights under sub-clause 17.6.

18.2

During any garden leave period pursuant to sub-clause 18.1, the Executive shall:

	18.2.1	(for the avoidance of doubt) continue to be bound by the duties of fidelity and good faith;

	18.2.2	hold himself available during normal business hours (other than agreed holidays or authorised absence for sickness or injury or other authorised leave) to perform such duties as may be assigned to him, if any, and in the event that he fails to make himself available for duties assigned to him, he shall (notwithstanding any other provision of this Agreement) forfeit his right to salary and contractual benefits in respect of such period of non-availability; and

18.2.3

continue to comply with the terms of this Agreement including clauses 11 to 14 (inclusive).

18.3

Subject to 18.1, the Executive shall have no claim in respect of the effect (if any) which any garden leave period may have on his eligibility in respect of any bonus or other incentive arrangement.

19.

AMALGAMATION AND RECONSTRUCTION

19.1

If:

19.1.1

the employment of the Executive is terminated:

	(A)	by reason of the liquidation of the Company for the purpose of amalgamation or reconstruction; or

	(B)	as part of any arrangement for the amalgamation of the undertaking of the Company not involving liquidation or for the transfer of the whole or part of the undertaking of the Company to any of its Associates; and

19.1.2

the Executive is offered employment of a similar nature with the amalgamated or reconstructed or transferee company on terms not generally less favourable to him than the terms of this Agreement;

the Executive shall have no claim against the Company or any Associate in respect of that termination.

20.

DISCIPLINE AND GRIEVANCES

20.1

The Executive is not subject to any particular Company disciplinary rules or disciplinary or dismissal procedures but should conduct himself in accordance with his duties under this Agreement and his fiduciary and other legal duties.

The ACAS Code of Practice on discipline and grievance applies to the taking of some disciplinary decisions or decisions to dismiss, details of which can be obtained from the Company Secretary.

	20.2	If the Executive is dissatisfied with any disciplinary or dismissal decision or has any grievance relating to his employment, he should refer the matter to the Chairman of the Board. The reference will be dealt with in such manner as the Chairman determines.

	21.	ADDITIONAL PARTICULARS

	21.1	The following additional particulars are given for the purposes of the Employment Rights Act 1996:

	21.1.1	the employment of the Executive by the Company shall begin on 1 September 2016;

	21.1.2	no employment of the Executive with a previous employer counts as part of the Executive's continuous employment with the Company and his period of continuous employment shall begin on 1 September 2016;

21.1.3

except as otherwise provided by this Agreement, there are no terms or conditions of employment relating to hours of work or to normal working hours or to entitlement to holidays (including public holidays) or holiday pay or to incapacity for work due to sickness or injury or to pensions or pension schemes or requiring the Executive to work outside the United Kingdom for a period of more than one month;

21.1.4

there are no collective agreements which directly affect the terms or conditions of the Executive's employment.

22.

ENTIRE AGREEMENT AND SEVERABILITY

22.1

Each of the Executive and the Company, on behalf of itself and its Associates, confirms that this Agreement represents the entire understanding, and constitutes the whole agreement, in relation to its subject matter (save only for any terms implied at law or by custom) and supersedes any previous agreement between the parties with respect thereto (which shall be deemed to have been terminated by mutual consent).

22.2

The Executive confirms that:

22.2.1

in entering into this Agreement he has not relied on any representation, warranty, assurance, covenant, indemnity, undertaking or commitment which is not contained in this Agreement, or any document referred to in it; and

22.2.2

in any event, without prejudice to any liability for fraudulent misrepresentation or fraudulent misstatement, the only rights or remedies he has in relation to any representation, warranty, assurance, covenant, indemnity, undertaking or commitment given or action taken in connection with the entering into or performance of this Agreement are pursuant to this Agreement and, for the avoidance of doubt and without limitation, the Executive does not have any right or remedy (whether by way of a claim for contribution or otherwise) in tort (including negligence) or for misrepresentation (whether negligent or otherwise, and whether made prior to, or in this Agreement).

22.3

In the event that any part (including any sub-clause or part thereof) of this Agreement shall be void or unenforceable by reason of any applicable law, it shall be deleted and the remaining parts of this Agreement shall continue in full force and effect and, if necessary, both parties shall use their best endeavours to agree any amendments to the Agreement necessary to give effect to the spirit of this Agreement.

23.

VARIATION AND WAIVER

23.1

No variation of this Agreement shall be effective unless it is evidenced in writing (excluding e-mail) by the Company.

23.2

No waiver by the Company or any of its Associates of any term, provision or condition of this Agreement or of any breach by the Executive of any term, provision or condition of this Agreement shall be effective unless it is in writing (excluding e-mail) and signed by the Company.

23.3

No failure to exercise nor any delay in exercising any right or remedy hereunder by the Company or any of its Associates shall operate as a waiver thereof or of any other right or remedy hereunder, nor shall any single or partial exercise of any right or remedy by the Company or any of its Associates prevent any further or other exercise thereof or the exercise of any other right or remedy.

23.4

The waiver of any term, provision or condition of this Agreement on any occasion by the Company or any of its Associates shall not constitute a waiver of:

23.4.1

any other term, provision or condition of this Agreement; or

23.4.2

such terms, provisions or conditions of this Agreement on any future occasion.

24.

THIRD PARTY RIGHTS

No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

25.

ASSIGNMENT

In addition to the Company's rights pursuant to sub-clause 15.13, the Executive hereby agrees irrevocably that the Company may forthwith on written notice to the Executive given in accordance with clause 29 assign its rights and transfer (whether by novation or otherwise) or delegate its obligations under this Agreement to any Associate from time to time, and that the Executive shall execute all documents and do all things necessary to effect such assignment or transfer, and any reference to the Company in this Agreement shall thereafter be a reference to any such company. The Executive shall not assign or otherwise seek to transfer or delegate his rights or obligations under this Agreement to any other person.

26.

DATA PROTECTION

26.1

In this clause, "Personal Data" , "Sensitive Personal Data" and "Processing" shall have the respective meanings attributed to them by the Data Protection Act 1998.

26.2

From time to time the Company will process personal data and sensitive personal data relating to the Executive in order to fulfil the obligations of the Company to the Executive under this Agreement and for other purposes relating to or which may become related to the Executive's employment or the business of the Company. Such processing will principally be for, but will not be limited to, personnel, administrative, financial, regulatory or payroll purposes (including for the purposes of arranging share option or other incentive scheme participation, pension arrangements, life assurance, and any other insurance arrangements provided to the Executive by the Company or by any Associate).

26.3

The Executive consents to personal data and sensitive personal data relating to him, for the purposes set out in sub-clause 26.2 and to the extent that is reasonably necessary in connection with the Executive's employment or the business of the Company, being processed by the Company and being disclosed or transferred to and processed by:

26.3.1

the Company's professional advisors, HM Revenue & Customs or other authorities, or (subject to appropriate confidentiality undertakings) prospective purchasers of the Company or of the whole or part of its business; and

26.3.2

entities which provide benefits or services to employees of the Company or the Company; and

26.3.3

any Associate and the employees of such Associate.

26.4

The Executive's consent to the transfer and disclosure of personal data and sensitive personal data shall apply regardless of the country to which the data is to be transferred. Where data is transferred outside of the European Economic Area, the Company shall take reasonable steps to ensure an adequate level of protection for the personal data and sensitive personal data concerned.

26.5

The Executive shall ensure that any personal data and sensitive personal data which he may process during his employment is kept secure from unauthorised access or disclosure. The Executive shall comply with the requirements of the Data Protection Act 1998 when processing such data in the course of his employment and shall not, without the prior consent of the company, use the services of any third party for the processing of such data. The Executive agrees to promptly notify the Company Secretary of any actual or suspected breach of the requirements of the Data Protection Act 1998 which comes to his attention.

26.6

The Executive is responsible for promptly informing the Company Secretary of any change to his personal data, including name, address, marital status, contact details, qualifications and next of kin.

27.

REFERENCES

If the Company is asked to provide any reference in respect of the Executive it shall be under no obligation to do so, save as required by law or by any professional, statutory or regulatory body or authority. If it does agree to provide a reference it shall use reasonable efforts to ensure that any reference is accurate but shall not in the absence of malice on the part of the Company be liable to the Executive for any error in or omission from any such reference.

28.

TELEPHONE AND COMPUTER/E MAIL AND INTERNET USE

Unless otherwise provided in the Agreement, the Executive shall comply with the Company's policies for the time being in force concerning use of the Company's telephone and computer (including e mail and Internet) facilities. The Company reserves the right to carry out ad hoc or routine monitoring of, and to keep records of, telephone and e mail communications made, Internet sites accessed and data and images stored using the Company's facilities (including use for personal reasons) for any of the purposes set out in the Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000.

	29.	NOTICES

	29.1	A notice to terminate this Agreement and a notice which is required to be given in accordance with this clause:

29.1.1

must be in writing in the English language;

29.1.2

must be delivered personally or left at the address of the addressee or sent by pre-paid recorded delivery (airmail if posted to or from a place outside the United Kingdom) to the address of the addressee or sent by facsimile to the facsimile number of the addressee in each case which is specified in this clause in relation to the party to whom the notice is addressed, and marked for the attention of the person so specified, or to such other address or facsimile number in the United Kingdom or marked for the attention of such other person as the relevant party may from time to time specify by notice given in accordance with this clause.

The relevant details of each party at the date of this Agreement are: In the case of the Executive:

	Address:	Cretzschmarstrasse 21, 60487 Frankfurt

	In the case of the Company:

	Address:	VivoPower International PLC, 23 Hanover Square, Mayfair, London, England, W1S 1JB

Attention: Company Secretary of VivoPower International PLC

29.1.3

for the avoidance of doubt, must not be sent by e-mail.

	29.2	Any notice shall be deemed to be given and take effect at the time it is deemed to have been received in accordance with sub-clause 29.3 or, if earlier, at the time it is in fact received.

	29.3	Subject to sub-clause 29.4, a notice is deemed to be received:

29.3.1

in the case of a notice left at the address of the addressee, upon delivery at that address;

29.3.2

in the case of a posted letter, on the third day after posting, or if posted to or from a place outside the United Kingdom, the seventh day after posting; and

29.3.3

in the case of a facsimile, on production of a transmission report from the machine from which the facsimile was sent which indicates that the facsimile was sent in its entirety to the facsimile number of the recipient provided that a confirmatory copy of such facsimile shall have been sent by post in accordance with sub-clause 29.1 within 24 hours of such transmission.

29.4

A notice received or deemed to be received in accordance with Clause 29.1 above on a day which is not a Business Day, or after 5pm on any Business Day, shall be deemed to be received on the next following Business Day and for the purposes of this clause "Business Day" shall mean a day (other than a Saturday or Sunday) on which banks are open for general business in London.

29.5

The Executive undertakes to maintain at all times during the term of this Agreement an address in the United Kingdom for service of notices pursuant to this clause and to notify the Company in advance by notice given in accordance with this clause of any changes from time to time of the details of such address.

30.

GOVERNING LAW

30.1

This Agreement shall be governed by, and construed in accordance with, the law of England and Wales and the Courts of England and Wales shall have exclusive jurisdiction in relation to any dispute arising out of or in connection with this Agreement.

31.

COUNTERPARTS

The Agreement is subject to contract until it is dated and signed by all of the parties, at which point it shall be treated as an agreement binding on the parties, notwithstanding that it may still be labelled 'Draft ' or 'Subject to Contract'. This Agreement may be executed in any number of counterparts each in the like form, all of which taken together shall constitute one and the same document and any party may execute this Agreement by signing and dating any one or more of such counterparts.

IN WITNESS whereof the parties hereto have set their hands the day and year written below.

SIGNED: /s/ Kevin Chin

For and on behalf of the Company

NAME: Kevin Chin, Chairman

D A T E D: 04 A u g u s t 2 01 6

SIGNED: /s/ Philip Comberg

The Executive

D A T E D: 04 A u g u s t 2 01 6

Exhibit 10.8

EMPLOYMENT AGREEMENT

T HIS E MPLOYMENT A GREEMENT (“Agreement”) is made this 3 rd day of February, 2016 between V IVO P OWER USA, LLC (the “Company”), a Delaware Limited Liability Company, having a mailing address at 140 Broadway, 28 th Floor, New York, New York 10005 and D AVID P ILOTTE an individual (the “Employee”), having a mailing address at 4545 Crosstimber Drive, Plano, Texas 75093.

W HEREAS , the Company desires that Employee provide services to the Company; and

W HEREAS , Employee wishes to provide services to the Company.

N OW , T HEREFORE , in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:

1. P OSITION AND D UTIES . Employee shall be employed in the position of Chief Financial Officer. The primary duties of the position include the responsibility for all administrative, financial, and risk management operations of the company, including the development of a financial and operational strategy, metrics tied to that strategy, and the ongoing development and monitoring of control systems designed to preserve company assets and report accurate financial results and raising capital for the company as legally required. The CFO must ensure all entities under the company comply with legislation and perform such other duties as may be assigned from time to time.

2. O BLIGATIONS TO THE C OMPANY . Employee shall at all times faithfully perform all of the duties and obligations required of and from Employee, consistent and commensurate with Employee’s position, to the best of his ability and experience pursuant to the terms hereof and to the satisfaction of the Company. During Employee’s employment with the Company, Employee will use his best efforts to promote the interests of the Company and shall devote substantially all of his business time and attention to the business and affairs of the Company and the Company shall be entitled to all of the benefits and profits arising from or incident to his services for the Company.

C OMPENSATION AND B ENEFITS .

(a) Salary. Employee shall receive, for employment services to be rendered under this Agreement, a base salary (“Base Salary”) of USD$360,000 per year. Such Base Salary shall be payable in installments on the Company’s ordinary payroll dates, less standard deductions and required withholdings. Employee’s Base Salary shall be reviewed annually. Employee will be an exempt employee not eligible for payment of overtime.

(b) Performance Bonus. Employee will be eligible to participate in a bonus pool (target of up to 50-100% of base compensation) to be based on key performance indicators that relate to both the Company’s performance and Employee’s individual performance in his role at the Company, subject to terms and conditions to be established by the Company. The amount and timing of payment of the Performance Bonus is at the sole discretion of the Company and shall be subject to all required withholdings. Employee must be employed on the date of payment in order to receive the Performance Bonus. No pro-rated payments shall be made.

(c) Standard Company Benefits. Employee shall be entitled to all other rights and benefits for which Employee is eligible under the terms and conditions of any Company benefit plans, programs, or practices that may be in effect from time to time and provided by the Company to its employees of comparable position. The Company may alter, add to, modify or terminate its benefits plans at any time it determines in its sole judgment to be appropriate.

(d) Expenses. Employee shall be entitled to receive reimbursement of all reasonable and authorized expenses incurred by Employee in performing Company services in accordance with Company’s expense reimbursement or other policies. In accordance with such policies, Employee shall timely furnish the Company with adequate records and other documentary evidence of such expenses for which Employee seeks reimbursement, and such expenses shall be accounted for under such policies and procedures established by the Company.

(e) Paid Time Off. Employee shall accrue not less than 20 days of paid time off (“PTO”) per year in accordance with the Company’s PTO policies. In addition, Employee shall be entitled, without loss of pay, to be absent voluntarily from the performance of employment duties for such periods of time and for such valid and legitimate reasons as the Board in its discretion may determine.

4. P ARTICIPATION P LAN . Employee initially will be eligible to participate in a Carried Interest Participation Plan (“Participation Plan”) under such terms and conditions as determined by the Company at its discretion which will be subject to a number of customary conditions and restrictions, including vesting periods and employment tenure, to be further defined in the aforementioned Participation Plan. Employee’s continued participation in the Participation Plan, and the amount(s) to which his will be eligible to receive thereunder, shall be subject to the Company’s sole discretion. Amounts payable under the Participation Plan shall be subject to all required withholdings.

T ERMINATION OF E MPLOYMENT .

(a) Employment. Employee’s employment shall be on an “at will” basis. The Company may terminate the employment relationship at any time, for any reason, with or without cause or notice. Employee may terminate the employment relationship at any time, for any reason, with or without cause, upon providing at least thirty (30) days advance written notice to the Company prior to the termination of Employee’s employment. In the event Employee gives such notice, the Company may deem such notice to have immediate effect by payment of salary through the date of termination specified in such notice by Employee, which termination date shall not exceed thirty (30) days after the notice date.

(b) Accrued Compensation. Except as set forth in Paragraph 5(c) below, in the event of a termination of employment, Employee shall only be entitled to (i) any accrued salary, (ii) any benefits under any plan of the Company in which Employee is a participant to the full extent of Employee’s rights under such plan, (iii) any accrued unused vacation pay, and (iv) any appropriate business expenses incurred by Employee in connection with his duties hereunder, all to the date of termination (collectively “Accrued Compensation”) which will be paid within ten (10) business days after his termination of employment with the Company (or at such other times as provided under any benefit plan in which Employee participates), and thereafter the Company’s obligations hereunder shall terminate. Payments of Accrued Compensation shall be subject to all required withholdings.

(c) Severance Compensation . In the event Employee’s employment is terminated by the Company without “Cause” (as defined below), and provided Employee timely executes a general release of known and unknown claims and such other provisions including without limitation, confidentiality and non-disparagement, in a form prescribed by the Company substantially similar to Exhibit A attached hereto (“Release”) in a timely manner and does not exercise his right to revoke the Release (if applicable), Employee shall receive severance in the form of six (6) months’ continuation of Employee’s then Base Salary, subject to applicable payroll and tax withholding. The Release will be delivered to Employee on the date of his termination of employment with the Company. The Severance Compensation described herein shall be paid in installments in accordance with the Company’s normal payroll cycle commencing the first payroll after the sixtieth (60 th ) day following Employee’s termination. For the avoidance of doubt, Employee is only eligible for Severance Compensation in the event his employment is terminated by the Company without Cause.

Termination shall be for “Cause” in the event of the occurrence of any of the following:

(i) Employee’s conviction of a felony crime involving moral turpitude or dishonesty, or a plea of guilty or no contest to such felony crime; or (ii) Employee’s participation in a fraud or any material act of dishonesty against the Company; or (iii) Employee’s failure or refusal to perform Employee’s duties, provided Employee is given written notice of, and at least ten (10) days opportunity to cure, such failure or refusal; or (iv) Employee’s failure or refusal to act in accordance with any lawful and proper direction or order of Management, provided Employee is given written notice of, and at least ten (10) days opportunity to cure, such failure or refusal; or (v) Employee’s gross negligence or willful misconduct in the performance of Employee’s duties or (vi) Employee’s material failure to satisfactorily perform his duties in connection with this Agreement after the Company provides written notice to the Employee and a thirty (30) day opportunity to cure, provided that such deficiency(ies) are curable; or (vii) a material misrepresentation or breach by Employee of this Agreement, of any other Company policy or his fiduciary duties to the Company.

(d) Termination Obligations. If Employee’s employment terminates for any reason, Employee shall be deemed to have terminated from all positions with the Company (including resignation of membership on the Board) effective as of the date of such termination.

(e) 409A Compliance . It is the intention of the Company and Employee that the payments and other benefits payable to Employee under this Agreement either be exempt from, or otherwise comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). The provisions of this Agreement shall be interpreted in such manner as may be required in order to be exempt from or to comply with Section 409A. In that regard:

(i) If any payment to be made hereunder is “nonqualified deferred compensation” subject to Section 409A and the timing of such payment is based on termination of Employee’s employment with the Company, then for such purpose “termination of employment” shall mean “separation from service” with the Company as such term is defined for purposes of Section 409A under Treas. Reg. Section 1.409A-1(h).

(ii) Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within ten (10) days following the termination of employment”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

(iii) Each payment (including each installment payment) that may be made under this Agreement shall be considered a separate payment.

(iv) In no event shall any payment of expense reimbursement under this Agreement be made later than the end of the calendar year next following the calendar year in which such expenses were incurred, and Employee shall be required to have submitted substantiation for such expenses at least ten (10) days before the last date for payment, the amount of such expenses that the Company is obligated to pay in any given calendar year shall not affect the expenses that the Company is obligated to pay in any other calendar year, and Employee’s right to have the Company pay such expenses may not be liquidated or exchanged for any other benefit.

(v) Notwithstanding any other provision in this Agreement, solely to the extent that a delay in payment is required in order to avoid the imposition of any tax under Section 409A, if a payment obligation under this Agreement arises on account of Employee’s “separation from service” (within the meaning of Section 409A) and Treas. Reg. Section 1.409A-1(h)) such payment shall not be made until the first to occur of (i) the date of Employee’s death or (ii) the date which is one day after the six (6) month anniversary of his “separation from service”, but in either case only if he is a “specified employee” (as defined under Section 409A(a)(2)(B)(i) of the Code and the regulations promulgated thereunder) in the year of his separation from service. Any payment that is delayed pursuant to the provisions of the immediately preceding sentence shall instead be paid in a lump sum promptly following the first to occur of the two dates specified in such immediately preceding sentence.

(vi) The preceding provisions of this Section 5(e) shall not be construed as a guarantee by the Company or by any of the Company’s affiliates of any particular tax effect to Employee with regard to any payment under this Agreement or any other plan, program, arrangement or agreement. Neither the Company nor its affiliates shall be liable to Employee for any additional tax, penalty or interest imposed under Section 409A nor for reporting in good faith any payment as an amount includible in gross income under Section 409A.

6. P OLICIES AND P ROCEDURES . The employment relationship between the parties hereto shall be governed by the general employment policies and practices adopted from time to time by the Company, provided that if the terms of this Agreement are in conflict with the Company’s general employment policies or practices in any manner, this Agreement shall control. Employee shall follow all Company policies as in effect from time to time, including the requirement to disclose to Chairman any actual or suspected existence of a loss, fraud, embezzlement, unsafe or improper practice or similar impairment of Company funds or property, or suspicious persons or activity.

C ONFIDENTIALITY AND R ESTRICTIVE C OVENANTS .

(a) Confidentiality . Employee acknowledges that:

(i) in addition to employment, his has received further compensation and benefits associated with that employment as a result of entering into this Agreement as consideration for his commitment to protect the Company’s Confidential Information and its client and employee relationships as set forth in this Paragraph 7 and the Company agrees to provide Employee with such Confidential Information;

(ii) The business in which the Company is engaged is intensely competitive and that his employment by the Company will require that his have access to and knowledge of confidential information of the Company, including, but not limited to, the Company’s products, financial models, business plans, customer lists and information, investor lists and information, deals or transactions, software diagrams, flow charts and product plans, plans for creation, prototypes, acquisition or disposition of products or publications, expansion plans, financial status, statements and plans, products, improvements, formulas, methods of distribution, product development plans, personnel information and trade secrets of the Company, all of which are of vital importance to the success of the Company’s business (collectively, “ Confidential Information ”);

(iii) the direct or indirect disclosure of any Confidential Information would place the Company at a serious competitive disadvantage and would do serious damage, financial and otherwise, to the Company’s business;

(iv) by his training, experience and expertise, the Employee’s services to the Company will be special and unique; and

(v) if the Employee leaves the Company’s employ to work for a competitive business, in any capacity, it would cause the Company irreparable harm.

(b) Covenant Against Disclosure . The Employee therefore covenants and agrees that all Confidential Information relating to the Company’s business or any of its subsidiaries, affiliates or customers shall be and remain the sole property and confidential business information of the Company, free of any rights of the Employee. The Employee shall not at any time, directly or indirectly, make use of the Confidential Information except in the performance of his duties under this Agreement and shall not at any time disclose any Confidential Information to third parties, without the prior written consent of the Company.

(c) Return of Company Documents and Information . The Employee will, upon any termination of his employment with the Company or upon the Company’s demand, return to the Company, or destroy where such destruction is certified in writing, all Confidential Information in his possession, directly or indirectly, that is in written or other tangible form (together with all duplicates thereof), together with all copies, recordings, abstracts, notes, computer diskettes, computer or computer assisted data storage or reproductions of any kind made from or about the documents and tangible items return to the Company, or the information they contain, and that his will not retain or furnish any such Confidential Information to any third party. Employee will also return all Company-provided electronic storage devices, and provide for inspection any of Employee’s electronic storage devices used by his to conduct Company business on or before his termination of employment, or upon the Company’s earlier demand.

(d) Non-Competition . In consideration of the compensation and the other payments and benefits to which the Employee is eligible under this Agreement, during the Restricted Period (defined below), which shall include the Post-Employment Restricted Period, Employee shall not within the United States directly or indirectly, either for Employee’s own account or as a partner, shareholder (other than shares regularly traded in a recognized market), officer, employee, agent or otherwise associate with any other business, enterprise or venture that is the same or competitive with the Company (“Competitor”) in the field of investing in solar energy assets that are operating, under construction, or under development, or any such other field that the Company engages in during the period of Employee’s employment.

(i) For the purposes of this Agreement, the following shall not be deemed to be a Competitor of the Company: (i) an investment banking institution, provided any work for such Investment Bank is in an advisory role and not an investment role; (ii) a private equity fund or fund manager that is not active in the renewable energy industry; (iii) a developer of solar energy projects, provided that such entity as set forth in section (iii) above does not market its projects to third-party investors that have had contact with the Company and is neither (A) a publicly traded “yieldco” (as such term is understood by the parties, and the financial industry in general, as of the date hereof), nor (B) has publicly announced or confirmed intentions to become a publicly traded “yieldco.”

(ii) It is expressly agreed between the parties that the scope of the Company’s business is throughout the United States and that this restriction is reasonable.

(e) Non-Solicitation . During the Restricted Period, which shall include the Post-Employment Restricted Period, Employee shall not, directly or indirectly, take any of the following actions, and, to the extent the Employee owns, manages, operates, controls, is employed by or participates in the ownership, management, operation or control of, or is connected in any manner with, any business, the Employee will use his best efforts to ensure that such business does not take any of the following actions:

(i) persuade or attempt to persuade any customer, consultant, investor or vendor of the Company to cease doing business with the Company or any of its subsidiaries or affiliates, or to reduce the amount of business any customer, consultant, investor or vendor does with the Company or any of its subsidiaries or affiliates;

(ii) solicit or accept, for himself or any entity, any deal or transaction (or piece thereof) which was active or a prospective deal or transaction at the Company at any during the Employee’s employment;

(iii) persuade or attempt to persuade any current employee of the Company or any of its subsidiaries or affiliates, or any individual who was an employee of the Company or any of its subsidiaries or affiliates during the six (6) month period prior to the Employee’s termination of employment, to leave the employ of the Company or any of its subsidiaries or affiliates or to otherwise hire any such employee or former employee.

(f) Definition of Restricted Period . “ Restricted Period ” means collectively (i) the period commencing on the first day of Employee’s employment and ending on the last day of Employee’s employment, and (ii) the period commencing immediately following the last day of the employment and ending six (6) months later. (“ Post-Employment Restricted Period” ). For the avoidance of doubt, Paragraph 7, including all subparagraphs, applies regardless of the basis by which such termination of employment arises (whether by the Company or by the Employee).

(g) Reasonableness of Restrictions . Employee acknowledges that the restrictions set forth in this Paragraph 7 are reasonable in scope and essential to protect the Company’s legitimate interests in safeguarding its Confidential Information, customer and employment relationships. The Executive further agrees that compliance by the Employee to the obligations set forth in Paragraphs 7(d) and 7(e) during the Restricted Period will not cause the Employee any undue hardship, especially given the substantial compensation and benefits provided for in this Agreement in exchange for his compliance with such obligations. Executive acknowledges that the compensation and benefits provided for herein will allow his to maintain a standard of living of at least the sort of fashion to which his became accustomed while employed at the Company. The Employee’s breach or threatened breach of his obligations set forth in this Paragraph 7 will result in the immediate suspension of any further payments to the Employee pursuant to Paragraph 3 and 5, as applicable, and for the avoidance of doubt, in the case of such suspension, Employee shall not be released or discharged from any of his obligations under this Agreement, including without limitation, this Paragraph 7 and the validity of the Release shall not be affected thereby.

(h) Defend Trade Secrets Act of 2016 Notice . Nothing in this Agreement is intended to interfere with or discourage Employee’s good faith disclosure of a trade secret or other confidential information to any governmental entity related to a suspected violation of law. Notwithstanding anything to the contrary in this Agreement, the federal Defend Trade Secrets Act of 2016 provides that Employee cannot be held criminally or civilly liable under any federal or state trade secret law if Employee discloses a trade secret or other confidential information (a) to any federal, state, or local government official, to Employee’s attorneys, or in a sealed court document, for the purpose of reporting or investigating a suspected violation of the law; or (b) to Employee’s attorneys or in a sealed court document in connection with a lawsuit against Employee’s employer alleging retaliation by such employer for Employee’s reporting a suspected violation of the law, so long as Employee does not otherwise disclose the trade secret or other confidential information except as required by court order.

I NTELLECTUAL P ROPERTY .

(a) Assignmen t. The Employee assigns to the Company, without additional compensation, all right, title and interest in all creations, inventions, ideas, designs, copyrightable materials, trademarks, and other technology and rights (and any related improvements or modifications), whether or not subject to patent or copyright protection (collectively, “ Inventions ”), relating to any activities of the Company that are conceived or developed by the Employee in the course of his employment, whether alone or with others and whether or not conceived or developed during regular business hours, and if based on Confidential Information after the termination of this Agreement for any reason. Such Inventions shall be the sole property of the Company and, to the maximum extent permitted by applicable law, shall be deemed “works made for hire” as the term is used in the United States Copyright Act.

(b) Disclosure . The Employee will promptly inform the Company of any such Inventions. The Employee will (whether while employed by the Company or after the termination of this Agreement) execute such written instruments and do other such acts as may be necessary in the opinion of the Company or its counsel to secure the Company’s rights in the Inventions, including obtaining a patent, registering a copyright or otherwise (and the Employee irrevocably appoints the Company and any of its officers as attorney in fact to undertake such acts in his name). The Employee’s obligation to execute written instruments and otherwise assist the Company in securing its rights in the Inventions will continue after the termination of this Agreement for any reason.

(c) Sublicense . To the extent, if any, that the Employee retains any right, title or interest with respect to any Inventions that his develops during his employment with the Company, the Employee grants to the Company an irrevocable, paid-up, transferable, sublicensable, worldwide right and license (i) to modify all or any portion of such Inventions, including, without limitation, the making of additions to or deletions from such Inventions, regardless of the medium (now or hereafter known) into which such Inventions may be modified and regardless of the effect of such modifications on the integrity of such Inventions, and (ii) to identify the Employee, or not to identify the Employee, as one or more authors of or contributors to such Inventions or any portion thereof, whether or not such Inventions or any portion thereof have been modified. The Employee further waives any “moral” rights, or other rights with respect to attribution of authorship or integrity of such Inventions that his may have under any applicable law, whether under copyright, trademark, unfair competition, defamation, right of privacy, contract, tort or other legal theory.

9. N O C ONFLICTING O BLIGATIONS . Employee represents and warrants to the Company that his is under no obligations or commitments, whether contractual or otherwise, that are inconsistent with his obligations under this Agreement, nor shall his enter into any such agreement or commitment, contractual or otherwise, in conflict with his obligations under this Agreement. Employee represents and warrants that his shall not use or disclose, in connection with his employment by the Company, any trade secrets or other proprietary information or intellectual property in which any other person has any right, title or interest other than with such other person’s consent (through license, assignment of interest or otherwise), and that his employment by the Company as contemplated by this Agreement shall not infringe or violate the rights of any other person or entity.

10. O UTSIDE A CTIVITIES . Except with the prior written consent of Management, Employee shall not during the period of employment undertake or engage in any other employment, occupation, or business enterprise, other than ones in which Employee is a passive investor. Employee may engage in civic and not-for-profit activities and may, upon notice to Management, serve as a member of boards of directors of companies not engaged in competition with the Company so long as such activities do not materially interfere with the performance of his duties hereunder. Employee agrees to immediately disclose in writing to the Company any activities which may violate this provision.

11.

D ISPUTES .

(a) Arbitration . The Employee and the Company agree that, with the sole exception being disputes covered by Paragraph 7 and Paragraph 8 of this Agreement, any and all controversies, claims or disputes arising out of or relating to this Agreement, the Employee’s employment with the Company or the termination of such employment (“Claims”) shall be resolved solely by final and binding arbitration before a single neutral trial arbitrator pursuant to the Federal Arbitration Act, 9 U.S.C. § 1-16, and in accordance with the Employment Arbitration Rules of the American Arbitration Association (“AAA”). The Employee irrevocably and unconditionally waives any right to a trial by jury in any controversy, claim or dispute with the Company and Employee irrevocably and unconditionally waives the right to arbitrate or otherwise litigate class actions, collective actions or representative actions against the Company , including those that arise under any federal, state or local law, including but not limited to any potential federal, state or local statutory wage and hour law, employment discrimination law, or other employment law Claims, including but not limited to Claims that could have been brought as class actions, under the Fair Labor Standards Act of 1938, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Americans With Disabilities Act of 1990, as amended, the Family and Medical Law Act of 1993, as amended, the New York Labor Law, the New York Executive Law, the New York Civil Rights Law, the New York State Human Rights Law, the New York City Human Rights Law, the Texas Labor Code and the Texas Commission on Human Rights Act. The arbitration shall be conducted in Dallas, Texas unless the parties mutually agree otherwise. The Company shall bear all of the costs associated with the arbitration, including filing fees and any stipend for the arbitrator. The Company and Employee shall each bear its, his, or her own attorney's fees, except as otherwise awarded by the arbitrator. The award rendered by the arbitrator shall be final and judgment may be entered upon the award in any court having jurisdiction over the matter. Nothing in this Paragraph 11 shall be read to preclude the Company from seeking injunctive relief for the Employee's breach of any obligations pursuant to Paragraph 7 and Paragraph 8 of this Agreement.

(b) Administrative Claims . This Agreement does not prohibit Employee from pursuing an administrative Claim with a federal, state, or local administrative agency such as the U.S. Equal Employment Opportunity Commission or the New York State Division on Human Rights. This Agreement does, however, preclude Employee form pursuing court action regarding any such Claim.

(c) Confidentiality . The arbitration proceedings, including any award made, shall be private and confidential, except to the extent disclosure is required by law or applicable professional standards, or is necessary in a proceeding to confirm or enforce the award, or in a later proceeding between the parties.

(d) Injunctive Relief; Jurisdiction; Venue. Notwithstanding the agreement to arbitrate, a breach by the Employee of his obligations under Paragraph 8 or Paragraph 9 of this Agreement would cause the Company irreparable harm, and no adequate remedy at law would be available in respect thereof. Accordingly, if any dispute arises between the parties under Paragraph 7 or Paragraph 8 of this Agreement, the Company shall not be required to arbitrate such Claim under Paragraph 11(a), but shall have the right to institute immediately judicial proceedings in any court of competent jurisdiction with respect to such dispute or claim and shall be entitled to relief enjoining such acts without the need to post a bond. If such judicial proceedings are instituted, such proceedings shall not be stayed or delayed pending the outcome of any arbitration proceeding under Paragraph 11(a) of this Agreement. The Employee and the Company consent to the jurisdiction of the United States District Court for the Southern District of New York (or if such court cannot exercise jurisdiction for any reason, to the jurisdiction of the Supreme Court of the State of New York, County of New York) for this purpose. Further, the Employee and the Company waive any objections to the jurisdiction of such courts based on improper or inconvenient forum.

(e) Attorneys’ Fees . To the extent permitted by applicable law, Employee agrees to pay the Company’s costs and expenses, including reasonable attorneys’ fees, incurred by the Company in connection with the enforcement of Paragraph 7 and Paragraph 8 of this Agreement.

12.

G ENERAL P ROVISIONS .

(a) Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of (i) personal delivery, (ii) confirmed delivery by facsimile transmission, electronic transmission (email), or overnight courier, or (ii) the third day after mailing by first-class mail, to the Company at its primary office location and to Employee at his address as then listed in the Company’s payroll records.

(b) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable whether in whole or in part under any applicable law or rule in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed and construed in such jurisdiction so as to render it enforceable under applicable law insofar as possible consistent with the intent of the parties.

(c) Waiver. If either party should waive any breach of any provisions of this Agreement, that party shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

(d) Complete Agreement. This Agreement and its exhibits constitute the complete, final, and exclusive embodiment of the entire agreement between Employee and the Company with regard to the subject matter hereof, and it supersedes all prior term sheets, letter agreements and understandings between the parties, whether oral, written, or implied-in-fact. It is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in a writing signed by both Employee and a duly authorized member of the Board.

(e) Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

(f) Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Employee and the Company, and their respective successors, assigns, heirs, executors, and administrators, except that Employee may not assign any duties hereunder and may not assign any rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.

(g) Choice of Law. All questions concerning the construction, validity, and interpretation of this Agreement shall be governed by the laws of the State of New York, without regard to New York’s conflict-of-laws rules. Employee agrees and acknowledges that this Agreement evidences an employment relationship in interstate commerce. Notwithstanding the provision in the first sentence of this Paragraph 12(g) with respect to applicable substantive law, any arbitration conducted pursuant to the terms of this Agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16.

(h) Non-Publication. The parties hereto mutually agree not to disclose publicly the terms of this Agreement except to the extent that disclosure is mandated by applicable law or such disclosure is made in confidence to the parties’ respective attorneys, accountants, other professional advisors, and immediate family.

(i) Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together shall constitute one and the same Agreement.

(j) Survival. Sections 7, 8 and 11 shall survive the termination of this Agreement.

(k) Capacity. The Employee represents and warrants that he is not a party to any agreement that would prohibit him from entering into this Agreement or performing fully his obligations under this Agreement.

I N W ITNESS W HEREOF , the parties hereto have executed this Agreement on the day and year first above written.

Dated: June 7, 2016

EMPLOYEE	COMPANY V IVO P OWER USA, LLC

/s/ David N. Pilotte
	Name: Gary Hui

	By: /s/ Gary Hui

	Title: Director

EXHIBIT 10.9

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made this 13th day of July 2016 between VivoPower USA, LLC (the “Company”), a Delaware Limited Liability Company, having a mailing address at 140 Broadway, 28 ^th Floor, New York, New York 10005 and Carl Weatherl e y-White an individual (the “Employee”), having a mailing address at 49 East 96th street, New York NY 10128.

Whereas , the Company desires that Employee provide services to the Company; and

Whereas , Employee wishes to provide services to the Company.

Now, Therefore , in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:

1. Position and Duties . Employee shall be employed in the position of Director of Finance reporting directly to the Chief Executive Officer (“CEO”) of the Company. The primary duties of the position shall be those normally associated with and appropriate for such position as determined by the CEO of the Company.

2. Obligations to the Company . Employee shall at all times faithfully perform all of the duties and obligations required of and from Employee, consistent and commensurate with Employee’s position, to the best of his ability and experience pursuant to the terms hereof and to the satisfaction of the Company. During Employee’s employment with the Company, Employee will use his best efforts to promote the interests of the Company and shall devote substantially all of his business time and attention to the business and affairs of the Company and the Company shall be entitled to all of the benefits and profits arising from or incident to his services for the Company.

3. Compensation and Benefits .

(a) Salary. During employment, Employee shall receive, for employment services to be rendered under this Agreement, a base salary (“Base Salary”) of USD $348,000 per year. Such Base Salary shall be payable in installments on the Company’s ordinary payroll dates, less standard deductions and required withholdings. Employee’s Base Salary shall be reviewed annually for increase but not decrease. Employee will be an exempt employee not eligible for payment of overtime.

(b) Performance Bonus. During employment, Employee will be eligible to participate in an annual bonus pool (target of up to 100% of base compensation) to be based on key performance indicators that relate to both the Company’s performance and Employee’s individual performance in his role at the Company, subject to terms and conditions to be established by the Company. The amount and timing of payment of the Performance Bonus is at the sole discretion of the Company and shall be subject to all required withholdings. Employee must be employed on the date of payment in order to receive the Performance Bonus. No pro-rated payments shall be made.

(c) Standard Company Benefits. Employee shall be entitled to all other rights and benefits for which Employee is eligible under the terms and conditions of any Company benefit plans, programs, or practices that may be in effect from time to time and provided by the Company to its employees of comparable position. The Company may alter, add to, modify or terminate its benefits plans at any time it determines in its sole judgment to be appropriate.

(e) Paid Time Off. Employee shall accrue not less than 20 days of paid time off (“PTO”) per year in accordance with the Company’s PTO policies. In addition, Employee shall be entitled, without loss of pay, to be absent voluntarily from the performance of employment duties for such periods of time and for such valid and legitimate reasons as the Board of Directors (“Board”) in its discretion may determine.

(f) Place of Performance . Employee’s place of work, subject to reasonable and necessary travel requirements, shall be the offices of the Company located in New York, New York.

4. Participation Plan. Employee will initially be eligible to participate in an annual Carried Interest Participation Plan (“Participation Plan”) under such terms and conditions as determined by the Company at its discretion which will be subject to a number of customary conditions and restrictions, including vesting periods and employment tenure, to be further defined in the aforementioned Participation Plan. Employee’s continued participation in the Participation Plan, and the amount(s) to which his will be eligible to receive thereunder, shall be subject to the Company’s sole discretion. Amounts payable under the Participation Plan shall be subject to all required withholdings. Employee will also be eligible to participate in any discretionary bonus, short-term and long-term cash incentive compensation plans and such other management incentive programs or arrangements of the Company approved by the Board that are generally available to the Company’s senior executives on terms and conditions generally consistent with those afforded other senior executives.

5. Termination of Employment

(b) Accrued Compensation. Except as set forth in Paragraph 5(c) below, in the event of a termination of employment, Employee shall only be entitled to (i) any accrued salary and, except for Termination for Cause or Voluntary termination without Good Reason, any earned but unpaid bonus for any performance period ending prior to the date of termination, (ii) any benefits under any plan of, or agreement with, the Company in which Employee is a participant to the full extent of Employee’s rights under such plan, including the Participation Plan, (iii) any accrued unused vacation pay, and (iv) any appropriate business expenses incurred by Employee in connection with his duties hereunder, all to the date of termination (collectively “Accrued Compensation”) which will be paid within ten (10) business days after his termination of employment with the Company (or at such other times as provided under any benefit plan in which Employee participates), and thereafter the Company’s obligations hereunder shall terminate. Payments of Accrued Compensation shall be subject to all required withholdings.

(c) Severance Compensation . In the event Employee’s employment is terminated by the Company without “Cause” (as defined below) or in the event of Employee resigning with Good Reason (as defined below), and provided Employee timely executes a general release of known and unknown claims and such other provisions including without limitation, confidentiality and non-disparagement, in a form prescribed by the Company substantially similar to Exhibit A attached hereto (“Release”) in a timely manner and does not exercise his right to revoke the Release (if applicable), Employee shall receive severance (the “Severance”) in the form of (i) twelve (12) months’ continuation of Employee’s Base Salary, subject to applicable payroll and tax withholding paid in installments in accordance with the Company’s normal payroll cycle commencing the first payroll after the sixtieth (60th) day following Employee’s termination and (ii) an additional amount equal to the average of Employee’s last two years’ bonus (or if there have not been two year’s bonus, an additional amount equal to no less than 50% of Employee’s Base Salary) payable to Employee in a lump sum on the 45 ^th day following the date Employee’s employment terminates hereunder. Company shall not bear the costs of Employee’s vesting of unvested stock or for the continuation of Employee’s participation in Company’s group health plan. The Release will be delivered to Employee on the date of Employee’s termination of employment with the Company. For the avoidance of doubt, Employee is only eligible for Severance Compensation in the event his employment is terminated by the Company without Cause or Employee resigns for Good Reason.

(d) Termination for Cause . Termination shall be for “Cause” in the event of the occurrence of any of the following: (i) Employee’s conviction of a felony crime involving moral turpitude or dishonesty, or a plea of guilty or no contest to such felony crime; or (ii) Employee’s participation in a fraud or any material act of dishonesty against the Company; or (iii) Employee’s willful failure or refusal to perform Employee’s material duties, provided Employee is given written notice of, and at least ten (10) days opportunity to cure, such failure or refusal; or (iv) Employee’s willful failure or refusal to act in accordance with any lawful and proper direction or order of Management, provided Employee is given written notice of, and at least ten (10) days opportunity to cure, such failure or refusal; or (v) Employee’s gross negligence or willful misconduct in the performance of Employee’s duties or (vi) Employee’s material failure to satisfactorily perform his duties in connection with this Agreement after the Company provides written notice to Employee and a thirty (30) day opportunity to cure, provided that such deficiency(ies) are curable; or (vii) a material misrepresentation or breach by Employee of this Agreement, of any other Company policy or his fiduciary duties to the Company.

(e) Vol u nt a ry Termination for Good Reason. Good Reason shall mean: (i) a material reduction in Employee’s Base Salary without Employee’s consent; (ii) removal of Employee from his title or responsibilities as Chief Financial Officer of the Company; (iii) failure of Employee to report directly to the CEO or the CEO’s successor; (iv) relocation of the Company’s office to which Employee is required to report to a location more than thirty miles from the Company’s current office in New York City and/or (v) failure of a successor to all or substantially all of the Company’s assets or business to assume this Agreement either contractually or as a matter of law as of the closing of such transaction. To resign for Good Reason, Employee must give written notice to the Company setting forth in reasonable detail the facts and circumstance giving rise to the purported Good Reason within thirty (30) days of Employee’s initial discovery thereof; provided, however that Company shall have thirty (30) days to cure any condition alleged by Employee in such notice to constitute Good Reason; and, if the Company fails to cure, Employee terminates his employment within 30 days following the end of the Company’s cure period

(f) Termination by Death. If Employee dies during the Employment Term, the Employee’s employment will terminate and the Employee’s beneficiary or if none, the Employee’s estate, shall be entitled to receive from the Company the Accrued Compensation and a pro-rata bonus for the year of termination, determined by multiplying the amount the Employee would have received if he remained employed for the full performance year (with any personal goals deemed to be earned at 100%), by a fraction, the numerator of which is the number of days the Employee was employed during the performance period and the denominator of which is 365 (a “Pro-Rata Bonus”), which Pro-Rata Bonus shall be paid in a lump sum when bonuses are paid to executives of the Company, but not later than the date that is two and one-half months after the end of the fiscal year in which annual cash bonuses are paid to executives of the Company.

(g) Termination by Disability.

(i) If the Employee is afflicted with a Disability during the term of this Agreement the Employee’s employment will terminate, and provided once such termination constitutes a Separation from Service, the Employee shall be entitled to receive from the Company the Accrued Compensation and a Pro-Rata Bonus, which Pro-Rata Bonus shall be paid in a lump sum when bonuses are paid to executives of the Company, but not later than the date that is two and one-half months after the end of the fiscal year in which annual cash bonuses are paid to executives of the Company.

(ii) Disability is defined to mean that Employee has been unable to perform Employee’s Company duties as the result of Employee’s incapacity due to physical or mental illness, and such inability, at least twenty-six (26) weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to Employee or Employee’s legal representative (such Agreement as to acceptability not to be unreasonably withheld). Termination resulting from Disability may only be effected after at least thirty (30) days' written notice by the Company of its intention to terminate Employee’s employment. In the event that Employee resumes the performance of substantially all of Employee’s Company duties before the termination of Employee’s employment becomes effective, the notice of intent to terminate shall automatically be deemed to have been revoked.

(h) Involun tary Termination Following a Change of Control other than for Cause, Death or Disability or Voluntary Termination for Good Reason .

(i) If during the Employee’s employment, six months prior to, or within two years following, a Change of Control, Employee’s employment is terminated involuntarily by the Company other than for Cause, Death, Disability or by Employee pursuant to a Voluntary Termination for Good Reason, and Employee executes a Release as provided for herein, then Employee shall be entitled to the payments in Section 5(c) except and the bonus portion of the severance shall be based on the greater of (i) the bonus calculated under Section 5(c)(ii) or (ii) 2/3 of Employee’s Base Salary. Notwithstanding the foregoing. for any termination covered by this subclause (h) which is within six months prior to a Change of Control, the bonus portion of the severance if in excess of the amount payable under Section 5(c)(ii) shall be paid to Employee on the date of the Change of Control.

(ii) A Change of Control is defined as (i) any person or entity becoming the beneficial owner, directly or indirectly, of securities of the Company representing forty (40%) percent of the total voting power of all its then outstanding voting securities; (ii) a merger or consolidation of the Company in which its voting securities as held by shareholders immediately prior to the merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity as held by the Company’s shareholders immediately prior to the transaction immediately after the merger or consolidation; (iii) a sale of substantially all of the assets of the Company or a liquidation or dissolution of the Company; or (iv) individuals who, as of the date of the signing of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided that any individual who becomes a director of the Company subsequent to the date of the signing of this Agreement, whose election, or nomination for election by the Company stockholders, was approved by the vote of at least a majority of the directors then in office shall be deemed a member of the Incumbent Board.

(i) Termination Obligations. If Employee’s employment terminates for any reason, Employee shall be deemed to have terminated from all positions with the Company (including resignation of membership on the Board) effective as of the date of such termination.

(j) 409A Compliance . It is the intention of the Company and Employee that the payments and other benefits payable to Employee under this Agreement either be exempt from, or otherwise comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). The provisions of this Agreement shall be interpreted in such manner as may be required in order to be exempt from or to comply with Section 409A. In that regard:

(i) If any payment to be made hereunder is “nonqualified deferred compensation” subject to Section 409A and the timing of such payment is based on termination of Employee’s employment with the Company, then for such purpose “termination of employment” shall mean “separation from service” with the Company as such term is defined for purposes of Section 409A under Treas. Reg. Section 1.409A-1(h).

(ii) Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within ten (10) days following the termination of employment”), the actual date of payment within the specified period shall be within the sole discretion of the Company and if it can be paid in one of two calendar years may be paid in the second calendar year.

(iii) Each payment (including each installment payment) that may be made under this Agreement shall be considered a separate payment.

(iv) In no event shall any payment of expense reimbursement under this Agreement be made later than the end of the calendar year next following the calendar year in which such expenses were incurred, and Employee shall be required to have submitted substantiation for such expenses at least ten (10) days before the last date for payment, the amount of such expenses that the Company is obligated to pay in any given calendar year shall not affect the expenses that the Company is obligated to pay in any other calendar year, and Employee’s right to have the Company pay such expenses may not be liquidated or exchanged for any other benefit.

(v) Notwithstanding any other provision in this Agreement, solely to the extent that a delay in payment is required in order to avoid the imposition of any tax under Section 409A, if a payment obligation under this Agreement arises on account of Employee’s “separation from service” (within the meaning of Section 409A) and Treas. Reg. Section 1.409A-1(h)) such payment shall not be made until the first to occur of (i) the date of Employee’s death or (ii) the date which is one day after the six (6) month anniversary of his “separation from service”, but in either case only if he is a “specified employee” (as defined under Section 409A(a)(2)(B)(i) of the Code and the regulations promulgated thereunder) in the year of his separation from service. Any payment that is delayed pursuant to the provisions of the immediately preceding sentence shall instead be paid in a lump sum promptly following the first to occur of the two dates specified in such immediately preceding sentence.

(vi) The preceding provisions of this Section 5(e) shall not be construed as a guarantee by the Company or by any of the Company’s affiliates of any particular tax effect to Employee with regard to any payment under this Agreement or any other plan, program, arrangement or agreement. Neither the Company nor its affiliates shall be liable to Employee for any additional tax, penalty or interest imposed under Section 409A nor for reporting in good faith any payment as an amount includible in gross income under Section 409A.

6. Policies and Procedures . The employment relationship between the parties hereto shall be governed by the general employment policies and practices adopted from time to time by the Company, provided that if the terms of this Agreement are in conflict with the Company’s general employment policies or practices in any manner, this Agreement shall control. Employee shall follow all Company policies as in effect from time to time, including the requirement to disclose to Chairman any actual or suspected existence of a loss, fraud, embezzlement, unsafe or improper practice or similar impairment of Company funds or property, or suspicious persons or activity.

7. Confidentiality and Restrictive Covenants.

(a) Confidentiality . Employee acknowledges that:

(i) in addition to employment, his has received further compensation and benefits associated with that employment as a result of entering into this Agreement as consideration for his commitment to protect the Company’s Confidential Information and its client and employee relationships as set forth in this Paragraph 7 and the Company agrees to provide Employee with such Confidential Information;

(ii) The business in which the Company is engaged is intensely competitive and that his employment by the Company will require that his have access to and knowledge of confidential information of the Company, including, but not limited to, the Company’s products, financial models, business plans, customer lists and information, investor lists and information, deals or transactions, software diagrams, flow charts and product plans, plans for creation, prototypes, acquisition or disposition of products or publications, expansion plans, financial status, statements and plans, products, improvements, formulas, methods of distribution, product development plans, personnel information and trade secrets of the Company, all of which are of vital importance to the success of the Company’s business (collectively, “ Confidential Information ”);

(iii) the direct or indirect disclosure of any Confidential Information would place the Company at a serious competitive disadvantage and would do serious damage, financial and otherwise, to the Company’s business;

(iv) by his training, experience and expertise, Employee’s services to the Company will be special and unique; and

(v) if Employee leaves the Company’s employ to work for a competitive business, in any capacity, it would cause the Company irreparable harm.

(b) Covenant Against Disclosure . The Employee therefore covenants and agrees that all Confidential Information relating to the Company’s business or any of its subsidiaries, affiliates or customers shall be and remain the sole property and confidential business information of the Company, free of any rights of Employee. The Employee shall not at any time, directly or indirectly, make use of the Confidential Information except in the performance of his duties under this Agreement and shall not at any time disclose any Confidential Information to third parties, without the prior written consent of the Company.

(c) Return of Company Documents and Information . The Employee will, upon any termination of his employment with the Company or upon the Company’s demand, return to the Company, or destroy where such destruction is certified in writing, all Confidential Information in his possession, directly or indirectly, that is in written or other tangible form (together with all duplicates thereof), together with all copies, recordings, abstracts, notes, computer diskettes, computer or computer assisted data storage or reproductions of any kind made from or about the documents and tangible items return to the Company, or the information they contain, and that his will not retain or furnish any such Confidential Information to any third party. Employee will also return all Company-provided electronic storage devices, and provide for inspection any of Employee’s electronic storage devices used by Employee to conduct Company business on or before his termination of employment, or upon the Company’s earlier demand.

(d) Non-Competition . In consideration of the compensation and the other payments and benefits to which Employee is eligible under this Agreement, during the Restricted Period (defined below), which shall include the Post-Employment Restricted Period, Employee shall not within the United States directly or indirectly, either for Employee’s own account or as a partner, shareholder (other than shares regularly traded in a recognized market), officer, employee, agent or otherwise associate with any other business, enterprise or venture that is the same or competitive with the Company (“Competitor”) in the field of investing in solar energy assets that are operating, under construction, or under development, or any such other field that the Company is materially engaged in during or as of the date of Employee’s termination of employment.

(i) For the purposes of this Agreement, the following shall not be deemed to be a Competitor of the Company: (i) an investment banking institution, provided any work for such Investment Bank is in an advisory role and not an investment role; (ii) a private equity fund or fund manager that is not active in the renewable energy industry; (iii) a developer of solar energy projects, provided that such entity as set forth in section (iii) above is neither (A) a publicly traded “yieldco” (as such term is understood by the parties, and the financial industry in general, as of the date hereof), nor (B) has publicly announced or confirmed intentions to become a publicly traded “yieldco.”

(ii) It is expressly agreed between the parties that the scope of the Company’s business is throughout the United States and that this restriction is reasonable.

(e) Non-Solicitation . During the Restricted Period, which shall include the Post-Employment Restricted Period, Employee shall not, directly or indirectly, take any of the following actions, and, to the extent Employee owns, manages, operates, controls, is employed by or participates in the ownership, management, operation or control of, or is connected in any manner with, any business, Employee will use his best efforts to ensure that such business does not take any of the following actions:

(i) persuade or attempt to persuade any customer, consultant, investor or vendor of the Company to cease doing business with the Company or any of its subsidiaries or affiliates, or to reduce the amount of business any customer, consultant, investor or vendor does with the Company or any of its subsidiaries or affiliates;

(ii) solicit or accept, for himself or any entity, any deal or transaction (or piece thereof) which was active or a prospective deal or transaction at the Company at any during Employee’s employment;

(iii) persuade or attempt to persuade any current employee of the Company or any of its subsidiaries or affiliates, or any individual who was an employee of the Company or any of its subsidiaries or affiliates during the six (6) month period prior to Employee’s termination of employment, to leave the employ of the Company or any of its subsidiaries or affiliates or to otherwise hire any such employee or former employee.

(f) Definition of Restricted Period . “ Restricted Period ” means collectively (i) the period commencing on the first day of Employee’s employment and ending on the last day of Employee’s employment, and (ii) the period commencing immediately following the last day of Employee’s employment and ending six (6) months later. (“ Post-Employment Restricted Period” ). For the avoidance of doubt, Paragraph 7, including all subparagraphs, applies regardless of the basis by which such termination of employment arises (whether by the Company or by Employee).

(g) Reasonableness of Restrictions . The Employee acknowledges that the restrictions set forth in this Paragraph 7 are reasonable in scope and essential to protect the Company’s legitimate interests in safeguarding its Confidential Information, customer and employment relationships. The Employee further agrees that compliance by Employee to the obligations set forth in Paragraphs 7(d) and 7(e) during the Restricted Period will not cause Employee any undue hardship, especially given the substantial compensation and benefits provided for in this Agreement in exchange for his compliance with such obligations. Employee acknowledges that the compensation and benefits provided for herein will allow Employee to maintain a standard of living of at least the sort of fashion to which his became accustomed while employed at the Company. The Employee’s breach or threatened breach of his obligations set forth in this Paragraph 7 will result in the immediate suspension of any further payments to Employee pursuant to Paragraph 3 and 5, as applicable, and for the avoidance of doubt, in the case of such suspension, Employee shall not be released or discharged from any of his obligations under this Agreement, including without limitation, this Paragraph 7 and the validity of the Release shall not be affected thereby.

8. Intellectual Property.

(a) Assignmen t. The Employee assigns to the Company, without additional compensation, all right, title and interest in all creations, inventions, ideas, designs, copyrightable materials, trademarks, and other technology and rights (and any related improvements or modifications), whether or not subject to patent or copyright protection (collectively, “ Inventions ”), relating to any activities of the Company that are conceived or developed by Employee in the course of his employment, whether alone or with others and whether or not conceived or developed during regular business hours, and if based on Confidential Information after the termination of this Agreement for any reason. Such Inventions shall be the sole property of the Company and, to the maximum extent permitted by applicable law, shall be deemed “works made for hire” as the term is used in the United States Copyright Act.

(b) Disclosure . The Employee will promptly inform the Company of any such Inventions. The Employee will (whether while employed by the Company or after the termination of this Agreement) execute such written instruments and do other such acts as may be necessary in the opinion of the Company or its counsel to secure the Company’s rights in the Inventions, including obtaining a patent, registering a copyright or otherwise (and Employee irrevocably appoints the Company and any of its officers as attorney in fact to undertake such acts in his name). The Employee’s obligation to execute written instruments and otherwise assist the Company in securing its rights in the Inventions will continue after the termination of this Agreement for any reason.

(c) Sublicense . To the extent, if any, that Employee retains any right, title or interest with respect to any Inventions that his develops during his employment with the Company, Employee grants to the Company an irrevocable, paid-up, transferable, sublicensable, worldwide right and license (i) to modify all or any portion of such Inventions, including, without limitation, the making of additions to or deletions from such Inventions, regardless of the medium (now or hereafter known) into which such Inventions may be modified and regardless of the effect of such modifications on the integrity of such Inventions, and (ii) to identify Employee, or not to identify Employee, as one or more authors of or contributors to such Inventions or any portion thereof, whether or not such Inventions or any portion thereof have been modified. The Employee further waives any “moral” rights, or other rights with respect to attribution of authorship or integrity of such Inventions that his may have under any applicable law, whether under copyright, trademark, unfair competition, defamation, right of privacy, contract, tort or other legal theory.

9. No Conflicting Obligations . Employee represents and warrants to the Company that his is under no obligations or commitments, whether contractual or otherwise, that are inconsistent with his obligations under this Agreement, nor shall his enter into any such agreement or commitment, contractual or otherwise, in conflict with his obligations under this Agreement. Employee represents and warrants that his shall not use or disclose, in connection with his employment by the Company, any trade secrets or other proprietary information or intellectual property in which any other person has any right, title or interest other than with such other person’s consent (through license, assignment of interest or otherwise), and that his employment by the Company as contemplated by this Agreement shall not infringe or violate the rights of any other person or entity.

10. Outside Activities . Except with the prior written consent of the Company’s CEO, Employee shall not during the period of employment undertake or engage in any other employment, occupation, or business enterprise, other than ones in which Employee is a passive investor. Employee may engage in civic and not-for-profit activities and may, upon notice to the Company’s CEO, serve as a member of boards of directors of companies not engaged in competition with the Company so long as such activities do not materially interfere with the performance of his duties hereunder. Employee agrees to immediately disclose in writing to the Company any activities which may violate this provision.

11. Disputes .

(a) Arbitration . The Employee and the Company agree that, with the sole exception being disputes covered by Paragraph 7 and Paragraph 8 of this Agreement, any and all controversies, claims or disputes arising out of or relating to this Agreement, Employee’s employment with the Company or the termination of such employment (“Claims”) shall be resolved solely by final and binding arbitration before a single neutral trial arbitrator pursuant to the Federal Arbitration Act, 9 U.S.C. § 1-16, and in accordance with the Employment Arbitration Rules of the American Arbitration Association (“AAA”). The Employee irrevocably and unconditionally waives any right to a trial by jury in any controversy, claim or dispute with the Company and Employee irrevocably and unconditionally waives the right to arbitrate or otherwise litigate class actions, collective actions or representative actions against the Company , including those that arise under any federal, state or local law, including but not limited to any potential federal, state or local statutory wage and hour law, employment discrimination law, or other employment law Claims, including but not limited to Claims that could have been brought as class actions, under the Fair Labor Standards Act of 1938, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Americans With Disabilities Act of 1990, as amended, the Family and Medical Law Act of 1993, as amended, the New York Labor Law, the New York Employee Law, the New York Civil Rights Law, the New York State Human Rights Law, and the New York City Human Rights Law. The arbitration shall be conducted in New York, New York. The Company shall bear all of the costs associated with the arbitration, including filing fees and any stipend for the arbitrator. The Company and Employee shall each bear its, his, or her own attorney's fees, except as otherwise awarded by the arbitrator. The award rendered by the arbitrator shall be final and judgment may be entered upon the award in any court having jurisdiction over the matter. Nothing in this Paragraph 11 shall be read to preclude the Company from seeking injunctive relief for Employee's breach of any obligations pursuant to Paragraph 7 and Paragraph 8 of this Agreement.

(b) Administrative Claims . This Agreement does not prohibit Employee from pursuing an administrative Claim with a federal, state, or local administrative agency such as the U.S. Equal Employment Opportunity Commission or the New York State Division on Human Rights. This Agreement does, however, preclude Employee form pursuing court action regarding any such Claim.

(d) Injunctive Relief; Jurisdiction; Venue. Notwithstanding the agreement to arbitrate, a breach by Employee of his obligations under Paragraph 8 or Paragraph 9 of this Agreement would cause the Company irreparable harm, and no adequate remedy at law would be available in respect thereof. Accordingly, if any dispute arises between the parties under Paragraph 7 or Paragraph 8 of this Agreement, the Company shall not be required to arbitrate such Claim under Paragraph 11(a), but shall have the right to institute immediately judicial proceedings in any court of competent jurisdiction with respect to such dispute or claim and shall be entitled to relief enjoining such acts without the need to post a bond. If such judicial proceedings are instituted, such proceedings shall not be stayed or delayed pending the outcome of any arbitration proceeding under Paragraph 11(a) of this Agreement. The Employee and the Company consent to the jurisdiction of the United States District Court for the Southern District of New York (or if such court cannot exercise jurisdiction for any reason, to the jurisdiction of the Supreme Court of the State of New York, County of New York) for this purpose. Further, Employee and the Company waive any objections to the jurisdiction of such courts based on improper or inconvenient forum.

12. General Provisions .

(a) Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of (i) personal delivery, (ii) confirmed delivery by facsimile transmission, electronic transmission (email), or overnight courier, or (ii) the third day after mailing by first-class mail, to the Company at its primary office location and to Employee at his address as then listed in the Company’s payroll records.

(b) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal, or unenforceable whether in whole or in part under any applicable law or rule in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed and construed in such jurisdiction so as to render it enforceable under applicable law insofar as possible consistent with the intent of the parties.

(c) Waiver. If either party should waive any breach of any provisions of this Agreement, that party shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

(d) Complete Agreement. This Agreement and its exhibits constitute the complete, final, and exclusive embodiment of the entire agreement between Employee and the Company with regard to the subject matter hereof, and it supersedes all prior term sheets, letter agreements and understandings between the parties, whether oral, written, or implied-in-fact. It is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in a writing signed by both Employee and a duly authorized member of the Board.

(e) Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

(f) Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Employee and the Company, and their respective successors, assigns, heirs, executors, and administrators, except that Employee may not assign any duties hereunder and may not assign any rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.

(h) Non-Publication. The parties hereto mutually agree not to disclose publicly the terms of this Agreement except to the extent that disclosure is mandated by applicable law or such disclosure is made in confidence to the parties’ respective attorneys, accountants, other professional advisors, and immediate family.

(j) Survival. Sections 7, 8 and 11 shall survive the termination of this Agreement.

( K ) Capacity. The Employee represents and warrants that he is not a party to any agreement that would prohibit him from entering into this Agreement or performing fully his obligations under this Agreement.

In Witness Whereof , the parties hereto have executed this Agreement on the day and year first above written.

Dated: _______25 July_________, 2016

New York, New York

EMPLOYEE	COMPANY
	VivoPower USA, LLC


/s/ Carl Weatherly-White	Name:	Gary Hui

	By:	/s/ Gary Hui

	Title:	Director

EXHIBIT A

SEPARATION AGREEMENT AND GENERAL RELEASE ¹

THIS SEPARATION AGREEMENT AND GENERAL RELEASE (“ Release ”), dated as of __________, 20___, is made by and between VivoPower USA, LLC (the “Company”), and ____________(“Employee”).

WHEREAS, the Company and Employee previously entered into an Employment Agreement dated [*], 2016 (the “Employment Agreement”) under which Employee was employed to serve as [*] of the Company;

WHEREAS, pursuant to Paragraph [*] of the Employment Agreement, Employee is entitled to certain compensation, contingent upon the execution of this Release.

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and in the Employment Agreement, the Company and Employee agree as follows:

1. The Company shall pay Employee the gross amount of [*], less applicable deductions and withholding, to be paid in equal or near equal installments. Subject to the conditions set forth in the Employment Agreement, including any applicable conditions set forth in Section [*] the first installment of the Severance Payment shall be made in the first regular payroll after the sixtieth (60 ^th ) day following Employee’s termination of employment.

2. The Employee, on behalf of his heirs, estate and beneficiaries, hereby forever releases and discharges all claims against the Company, and any of its parents, subsidiaries or affiliates, and each past or present officer, director, agent, employee, shareholder, representative, and insurer of any such entities (collectively, including the Company, the “Releasees”), from liability for any claims or damages Employee may have against it or them as of the date this Agreement is executed, whether known or unknown, including, but not limited to, any alleged violation of the Age Discrimination in Employment Act, as amended, the Older Worker Benefits Protection Act; Title VII of the Civil Rights of 1964, as amended; the Genetic Information Non-Discrimination Act; Sections 1981 through 1988 of Title 42 of the United States Code; the Equal Pay Act; the Americans with Disabilities Act; the Family and Medical Leave Act; Employee Retirement Income Security Act of 1974, as amended; the Worker Adjustment and Retraining Notification Act; the National Labor Relations Act; the Fair Credit Reporting Act; the Occupational Safety and Health Act; the Immigration Reform Control Act; the retaliation provisions of the Sarbanes-Oxley Act of 2002; the New York State Human Rights Law; the New York State Civil Rights Law; the New York State Whistleblower law; the retaliation provisions of the New York State Workers Compensation Law; the New York State Labor Law; the New York State Wage and Hour Law; the New York City Human Rights Law; the New York City Administrative Code (and including any and all amendments to the above) and/or any other alleged violation of any federal, state, local or foreign law, regulation or ordinance, and/or contract (including but not limited to the Employment Agreement) or implied contract or tort law or public policy or whistleblower claim, having any bearing whatsoever on Employee’s employment by and the termination of employment with the Company, including, but not limited to, any claim for equity, wrongful discharge, back pay, vacation pay, sick pay, wage, bonus payment, long term incentive payment, attorneys’ fees, costs, and/or future wage loss. This paragraph shall not affect any vested rights Employee may have under the Company’s employee benefit plans or any rights Employee has to the Accrued Compensation and/or Severance Compensation (as both terms are defined in the Employment Agreement) or any rights to be indemnified, advanced expenses or covered under any applicable directors’ and officers’ liability insurance policies. This paragraph also does not release any claims that lawfully cannot be waived.

¹ The Company reserves the right to modify this Release to the extent that the Company reasonably determines necessary or advisable to help ensure that this Release is enforceable to the fullest extent permissible under applicable law and to reflect the applicable payments.

3. The Employee acknowledges that his has been paid and/or has received all compensation, wages, bonuses, commissions and/or benefits to which he may be entitled under his Employment Agreement or otherwise, and that no other compensation, wages, bonuses, commissions and/or benefits are due to [him/her], except as provided herein.

4. The Employee agrees to keep confidential all information contained in this Agreement or relating to this Agreement, except (1) to the extent the Company consents in writing to such disclosure; (2) if his is required by process of law to make such disclosure and she promptly notifies the Company at the address set forth in Section 11 below of his receipt of such process; or (3) because his must disclose certain terms to his financial consultant, attorney or spouse.

5. The Employee represents that his has not filed or caused to be filed any claim, complaint, or action against the Company or any other Releasees in any forum or form and that his is not presently a party to any such claim, complaint, or action. Employee further represents that his will not participate voluntarily in any action brought by any third party against the Company or any other Releasees. The Employee represents that his will not testify in any action involving the Company or any other Releasees on behalf of a third party unless compelled by subpoena to do so. Nothing in this Release is intended to preclude Employee from (1) enforcing the terms of this Release; (2) challenging the validity of this Release; or (3) filing a charge or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission or the National Labor Relations Board or comparable state or local agency. Notwithstanding the foregoing, Employee agrees to waive his right to recovery monetary damages or other individual relief in any charge, complaint or lawsuit filed by [him/her] or anyone else on his behalf to the extent permitted by applicable law.

6. During the course of Employee’s employment with the Company, Employee acknowledges that his acquired certain confidential and proprietary information regarding the Releasees, including without limitation, any trade secrets, customer lists, information relating to the sources of customers, financial, personnel and customer information, and any confidential information concerning the business or affairs of any supplier, creditor, lender, shareholder or customer of the Company or any of its affiliates. The Employee reaffirms his agreement to Paragraph 7 of the Employment Agreement the provisions of which shall remain in full force and effect. The Employee’s breach or threatened breach of his obligations set forth in Paragraph 7 of the Employment Agreement will result in the immediate suspension of the Severance Payment to Employee. For the avoidance of doubt, in the case of such suspension, Employee shall not be released or discharged from any of his obligations under the Employment Agreement, including without limitation Paragraph 7 and the validity of the Release shall not be affected thereby.

7. The Employee agrees to return to the Company all Confidential Information (as defined in Paragraph 7(c) of the Employment Agreement) and all Company property, in his possession or control, including, without limitation, all access passes, cell phones, personal digital assistants (PDAs), electronic storage devices, keys, laptops, hardware, software, files, papers, memoranda, letters, handbooks, manuals and customer lists. The Employee acknowledges that his does not retain any written or other tangible material containing any confidential information, whether located on his own personal computer or elsewhere.

8. To the extent applicable, this confirms Employee’s resignation from all offices and positions of the Company and its Affiliates effective as of the date of his termination of employment.

9. The Employee agrees that his will not publicly or privately disparage the Releasees, or any one of them, or any of the Company’s products or services, including but not limited to, via the internet and media.

10. This Release constitutes and contains the parties’ complete understanding with respect to the subject matter addressed in this Release, and supersedes and replaces all prior negotiations and all agreements, if any, whether written or oral, concerning the subject matter of this Release, except for the provisions of the Employment Agreement referenced in Paragraphs 8 and 12, which remain in full force and effect. The Employee acknowledges and agrees that even though claims and facts in addition to those now known or believed by [him/her] to exist may subsequently be discovered, it is his intention to fully settle and release all claims his may have against the Releasees, whether known, unknown or suspected.

11. The Employee has up to twenty-one (21) days [or forty-five (45) days if a group termination] from the date his receives this Release to consider its terms and return it to the Company’s [TITLE]. During the twenty-one (21) [or forty-five (45)] day period and before signing below, Employee is advised to consult with an attorney regarding the terms of this Release, at his own expense. The Employee further understands that his has seven (7) days after signing this Release to revoke it by so notifying the Company in writing, such notice to be delivered to the Company at the address set forth above. In any event, within sixty (60) days of Employee’s separation from service, Employee must execute this Release and deliver it to the Company, no longer subject to a right of revocation.

12. This Release shall be construed and enforced in accordance with, and governed by, the laws of the State of New York , without regard to principles of conflict of laws. If any clause of this Release should ever be determined to be unenforceable, it is agreed that this will not affect the enforceability of any other clause or the remainder of this Release.

13. By signing this Release, Employee acknowledges that: (1) his has read this Release completely; (2) his has had an opportunity to consider the terms of this Release; (3) his has been advised to consult with an attorney of his choosing prior to executing this Release to explain the Release and its consequences; (4) his knows that his is giving up important legal rights by signing this Release; (5) his has not relied on any representation or statement not set forth in this Release; (6) his understands and means everything that his has said in this Release, and his agrees to all its terms; and (7) his has signed this Release voluntarily and entirely of his own free will.

		VivoPower USA, LLC

		By:

		Name:

		Title:


ACCEPTED AND AGREED:





Date

EXHIBIT 23.1

Independent Registered Public Accounting Firm’s Consent

We consent to the inclusion in this Registration Statement of VivoPower International PLC on Form F-4 of our report dated August 10, 2016 with respect to our audit of the consolidated financial statements of VivoPower International PLC and Subsidiaries as of March 31, 2016 and for the period from February 1, 2016 (Inception) through March 31, 2016, and our report dated June 9, 2016 with respect to our audits of the financial statements of Arowana Inc. as of February 29, 2016 and February 28, 2015, and for the year ended February 29, 2016 and for the period from October 1, 2014 (Inception) through February 28, 2015 which reports appear in the Proxy Statement/Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading “Experts” in such Proxy Statement/Prospectus.

/s/ Marcum LLP

Marcum LLP

New York, NY

August 24, 2016

	EXHIBIT 23.3


	PKF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT

We consent to the inclusion in this Registration Statement of VivoPower International Plc on Form F-4 of our report dated 5 August, 2016, with respect to our audit of the financial statements of Aevitas Group Limited as of 31 March 2016 and 2015, and for the periods then ended, which report appears in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.

/s/ PKF	/s/ Clayton Hickey

PKF	CLAYTON HICKEY
Chartered Accountants	Partner
Newcastle, NSW

Dated: 24 August 2016

	EXHIBIT 23.4


	PKF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT

We consent to the inclusion in this Registration Statement of VivoPower International Plc on Form F-4 of our report dated 22 July, 2016, with respect to our audit of the financial statements of VivoPower Pty Limited as of 31 March 2016 and 2015, and for the periods then ended, which report appears in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.

/s/ PKF	/s/ Clayton Hickey

PKF	CLAYTON HICKEY
Chartered Accountants	Partner
Newcastle, NSW

Dated: 24 August 2016

	●	Climate Change Levy (CCL): Renewable electricity generators are no longer eligible for CCL exemption certificates ²³ , which had provided an additional income stream up to the value of the CCL (currently £5.59/MWh).

	●	Levy control framework (LCF): The LCF sets annual limits on the overall costs of all DECC’s low carbon electricity levy-funded policies to control public expenditure paid for through consumer bills until 2020/21. ²⁴ The limit for 2020/21 is £7.6 billion in real terms.

		2016		2015
	Note	$		$
Sales revenue	4	35,439,263		39,595,734
Cost of sales	5	(31,651,837	)	(35,424,152	)
Gross profit		3,787,426		4,171,582

Other income	4	421,792		631,065
Occupancy costs	5	(427,360	)	(435,429	)
Administrative expenses	5	(3,824,633	)	(3,643,510	)
Impairment of intercompany loans		(29,378	)	(1,258,224	)
Finance costs	5	(2,004,367	)	(1,632,047	)
Share of net losses of equity-accounted associates		(287,105	)	(211,645	)
Profit before income tax		(2,363,625	)	(2,378,208	)
Income tax expense	6	(293,197	)	7,046
Profit from continuing operations		(2,656,822	)	(2,371,162	)
Profit/(loss) from discontinued operations	7	-		(474,289	)
Profit for the year		(2,656,822	)	(2,845,451	)

Other comprehensive income for the year, net of tax		-		-
Total comprehensive income for the year		(2,656,822	)	(2,845,451	)

Profit attributable to:
Members of the parent entity		(2,763,177	)	(2,816,235	)
Non-controlling interest		106,355		(29,216	)
		(2,656,822	)	(2,845,451	)
Total comprehensive income attributable to:
Members of the parent entity		(2,763,177	)	(2,816,235	)
Non-controlling interest		106,355		(29,216	)
		(2,656,822	)	(2,845,451	)

	Note	Ordinary Shares $		Retained Earnings $			Owners of parent $			Non-controlling Interests $			Total $
Balance at 1 April 2015			20,117,648		(22,399,236	)		(2,281,588	)		1,511,741			(769,847	)
Profit/(loss) for the year			-		(2,763,177	)		(2,763,177	)		106,355			(2,656,822	)
Other comprehensive income			-		-			-			-			-
Balance at 31 March 2016			20,117,648		(25,162,413	)		(5,044,765	)		1,618,096			(3,426,669	)

Balance at 1 April 2014			20,117,648		(20,413,321	)		(295,673	)		2,243,243			1,947,570
Profit/(loss) for the year			-		(2,816,235	)		(2,816,235	)		(29,216	)		(2,845,451	)
Other comprehensive income			-		-			-			-			-
Discontinued operations			-		891,170			891,170			(684,286	)		206,884
Dividends paid or provided for	21		-		(60,850	)		(60,850	)		(18,000	)		(78,850	)
Balance at 31 March 2015			20,117,648		(22,399,236	)		(2,281,588	)		1,511,741			(769,847	)

Fixed asset class	Useful life
Leasehold improvements	20 to 40 years
Plant and equipment	3.5 to 10 years
Furniture and fittings	10 to 50 years
Motor vehicles	2 to 8 years
Computer equipment	2 to 16 years

Sales revenue
- sale of goods	35,439,263	39,595,734

Other revenue
- Other income	379,266	600,643
- Interest revenue	42,526	30,422
	421,792	631,065
	35,861,055	40,226,799

Cost of sales
- Material costs	14,535,471	18,206,869
- Labour costs	15,088,787	15,202,278
- Operational overheads	1,182,494	1,218,345
- Depreciation and amortisation	380,740	429,748
- Occupancy costs	464,345	366,912
	31,651,837	35,424,152
Finance costs
- Interest on notes	1,853,994	1,471,657
- Bank charges	54,357	74,929
- Other interest expense	96,016	85,461
	2,004,367	1,632,047
Occupancy costs
- Occupancy costs	382,659	417,559
- Repairs and maintenance expense	44,701	17,870
	427,360	435,429
Administration expenses
- Employee benefits cost	2,437,516	2,277,654
- Administration, professional and management fees	139,140	396,310
- Bank charges	12,257	11,845
- Insurance expense	267,403	331,440
- Other expenses	494,941	371,405
- Depreciation and amortisation	208,809	48,330
- Repairs and maintenance expense	116,821	115,024
- Travel expenses	56,519	96,850
- Loss on disposal of fixed assets	91,227	(5,348	)
	3,824,633	3,643,510

Current tax expense	158,922	65,914
Deferred tax expense	134,275	(72,960	)
	293,197	(7,046	)

Profit	(2,363,625	)	(2,378,208	)
Tax	30	%	30	%
	(709,088	)	(713,462	)
Add/(less) tax effect of:
- tax losses not brought to account/(recouped)	793,413		385,251
- non-deductible impairment expenses	-		377,467
- non-deductible other expenses	122,740		(119,796	)
- share of net profits of associates	86,132		63,494
Income tax expense	293,197		(7,046	)

Revenue	-	5,429,243
Expenses	-	(5,889,900	)
Operating income	-	(460,657	)
Finance costs	-	(13,632	)
Loss for the year attributable to discontinued operations	-	(474,289	)

(b)Net cash flows
Net cash inflows/(outflows) from operating activities	-	93,668
Net cash inflows/(outflows) from investing activities	-	(61,329	)
Net cash inflows/(outflows) from financing activities	-	(32,790	)
Net cash increase in cash generated by the discontinued operations	-	(451	)

	J.A. Martin Electrical Pty Limited				Electrical Engineering Group Pty Limited					Elimination						Total
	2016 $		2015 $		2016 $			2015 $		2016 $			2015 $			2016 $			2015 $
REVENUE
Sales revenue		25,252,736		27,940,223		10,186,527			11,655,511		-			-			35,439,263			39,595,734
Interest revenue		21,726		14,987		20,800			15,435		-			-			42,526			30,422
Other revenue		6,989		190,518		27,820			42,724		344,457			367,401			379,266			600,643
Total segment revenue		25,281,451		28,145,728		10,235,147			11,713,670		344,457			367,401			35,861,055			40,226,799
Segment operating profit		783,233		163,888		(1,087,191	)		706,019		(2,352,864	)		(3,241,069	)		(2,656,822	)		(2,371,162	)

CURRENT
Trade receivables	6,827,645	6,276,882
Related party receivables	223,782	223,782
	7,051,427	6,500,664

CURRENT
Stock on hand	417,223	332,401
Work in progress	58,317	88,606
	475,540	421,007

Leasehold improvements, at cost	196,385		202,140
Accumulated depreciation	(37,880	)	(26,662	)
	158,505		175,478
Plant and equipment, at cost	1,110,295		1,213,864
Accumulated depreciation	(594,630	)	(511,178	)
	515,665		702,686
Furniture, fixtures and fittings, at cost	14,617		79,784
Accumulated depreciation	(8,377	)	(51,955	)
	6,240		27,829
Motor vehicles, at cost	1,954,234		1,847,316
Accumulated depreciation	(1,165,297	)	(979,336	)
	788,937		867,980
Computer equipment, at cost	644,780		734,864
Accumulated depreciation	(303,295	)	(394,831	)
	341,485		340,033
	1,810,832		2,114,006

Goodwill
At cost	17,777,447		17,777,447
Accumulated impairment losses	(5,370,000	)	(5,370,000	)
Total Intangibles	12,407,447		12,407,447

CURRENT
Trade payables	2,837,940	2,668,703
GST payable	206,422	169,715
Sundry payables and accrued expenses	524,939	538,694
	3,569,301	3,377,112

CURRENT
APG loan	15(a)	1,384,605	1,288,589
Lease liability secured	15(b)	185,451	250,806
		1,570,056	1,539,395

NON-CURRENT
Lease liability secured	15(b)	190,394	147,795
Notes	15(c)	21,006,122	19,152,128
		21,196,516	19,299,923

Current liabilities
Provision for employee benefits	1,392,335	1,306,908
Long service leave	302,150	259,529
	1,694,485	1,566,437

12,697,547 (2015: 12,697,547) Ordinary shares	12,697,547	12,697,547
2,473,367 (2015: 2,473,367) Preference shares	7,420,101	7,420,101
	20,117,648	20,117,648

Minimum lease payments:
- not later than one year	199,453		268,222
- between one year and five years	201,021		159,294
Minimum lease payments	400,474		427,516
Less: finance changes	(24,629	)	(28,915	)
Present value of minimum lease payments	375,845		398,601

Financial Assets
Cash and cash equivalents	1,852,054	2,133,692
Trade and other receivables	6,827,645	6,276,882

Total financial assets	8,679,699	8,410,574

Financial Liabilities
Financial liabilities at amortised cost
- Trade and other payables	3,569,301	3,377,112
- Borrowings	22,766,572	20,839,318
Total financial liabilities	26,335,873	24,216,430

	Within 1 year					1 to 5 years					Total
		2016		2015			2016		2015			2016
		$		$			$		$			$		2015
Cash		1,852,054		2,133,692			-		-			1,852,054		2,133,692
Receivables		7,051,427		6,500,664			-		-			7,051,427		6,500,664
Payables		(3,569,301	)	(3,377,112	)		-		-			(3,569,301	)	(3,377,112	)
Interest bearing loans		(1,570,056	)	(1,539,395	)		(21,196,516	)	(19,299,923	)		(22,766,572	)	(20,839,318	)
Total		3,764,124		3,717,849			(21,196,516	)	(19,299,923	)		(17,432,392	)	(15,582,074	)

	2016					2015
	+1.00%			-1.00%		+1.00%			-1.00%
		$		$			$		$
Cash and cash equivalents		18,521		(18,521	)		21,337		(21,337	)
Interest bearing loans		(227,666	)	227,666			(208,393	)	208,393

(a) Current Tax
Income tax payable/(receivable)	126,834	65,914

(b) Recognised deferred tax assets and liabilities
ASSETS
Deferred tax assets	1,246,951	1,271,780
LIABILITIES
Deferred tax liabilities	7,547	7,547
(c) Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following:
Revenue losses (at 30%)	782,170	292,392
Capital losses (at 30%)	375,684	375,684

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therein.

The following dividends were declared and paid:
Final franked preference share dividend			-				60,850

(a) Composition of the Group
	Principal place of business	Percentage Owned (%)* 2016		Percentage Owned (%)* 2015
Subsidiaries:
Aevitas Holdings Pty Limited	Australia		100		100
Subsidiaries of Aevitas Holdings Pty Limited
J.A. Martin Electrical Pty Limited	Australia		85		85
Electrical Engineering Group Pty Limited	Australia		100		100
Subsidiaries of Electrical Engineering Group Pty Ltd
Kenshaw Electrical Pty Limited	Australia		100		100

2016 Name of subsidiary	J.A. Martin Electrical Pty Limited			Generator and Power Station Services Pty Limited
% ownership held by NCI		15			-
Profit / loss allocated to NCI		106,355			-
Accumulated NCI of subsidiary		1,618,096			-
Summarised statement of financial position
Current assets		1,022,325			-
Non-current assets		1,525,488			-
Current liabilities		593,873			-
Non-current liabilities		50,433			-
Net assets		1,903,507			-
Summarised statement of profit or loss and other comprehensive income
Revenue		3,882,218			-
Profit / (loss)		106,355			-
Total comprehensive income		106,355			-
Summarised statement of cash flows
Cash flows from operating activities		(40,720	)		-
Cash flows from investing activities		(875	)		-
Cash flows from financing activities		(38,336	)		-
Net increase / (decrease) in cash		(79,931	)		-

2015 Name of subsidiary	J.A. Martin Electrical Pty Limited			Generator and Power Station Services Pty Limited
% ownership held by NCI		15			20
Profit / loss allocated to NCI		37,184			(66,400	)
Accumulated NCI of subsidiary		1,511,741			-
Dividends paid to NCI		(18,000	)		-
Summarised statement of financial position
Current assets		940,723			-
Non-current assets		1,461,450			-
Current liabilities		572,801			-
Non-current liabilities		43,350			-
Net assets		1,786,022			-
Summarised statement of profit or loss and other comprehensive income
Revenue		4,222,810			1,085,849
Profit / (loss)		37,184			(66,400	)
Total comprehensive income		37,184			(66,400	)
Summarised statement of cash flows
Cash flows from operating activities		46,442			18,734
Cash flows from investing activities		(5,865	)		(12,266	)
Cash flows from financing activities		(48,611	)		(6,558	)
Net increase / (decrease) in cash		(8,034	)		(90	)

Key management personnel
Short term employee benefits	543,094	555,198
Post-employment benefits	49,957	50,356
	593,051	605,554

Expense transactions

Key management personnel
Key management personnel	Reimbursement of expenses	15,557	4,149

Other related parties
Arowana International Limited (a)	Reimbursement of expenses	4,680	8,727


Revenue transactions

Other related parties
VivoPower Pty Ltd (b)	Fee for sales resource provided	226,769	55,606