COIGACH COMMUNITY CIC BOND OFFER MARCH 2018

PROMOTED BY

1 the wind of change for Coigach Important Notice

This financial promotion has been issued and approved by the UK division of Triodos Bank NV for the purposes of section 21 of the Financial Services and Markets Act 2000.

Triodos Bank NV is incorporated under the laws of the Netherlands with limited liability under number: 62415 and whose branch is registered in England and Wales with number: BR3012.

Triodos Bank is authorised by De Nederlandsche Bank (the “Dutch Central Bank”), Postbus 98, 1000 AB Amsterdam, Westeinde 1, and is also subject to limited regulation by the Financial Conduct Authority (the “FCA”) and the Prudential Regulation Authority (the “PRA”), 25 The North Colonnade, Canary Wharf, London, E14 5HS, in relation to the conduct of its UK business. Triodos Bank’s FCA registration number is: 183366, and may be checked on the FCA’s website at: www.fca.org. uk/register or by contacting the FCA on: 0845 606 1234. Our UK registered office address is at: Deanery Road, Bristol, BS1 5AS. Further details about the extent of our regulation by the Financial Conduct Authority and the Prudential Regulation Authority are available from us on request.

If you are in any doubt about the contents of this document or the action you should take, you should immediately consult a person authorised for the purposes of the Financial Services and Markets Act 2000 (as amended) who specialises in advising on the acquisition of shares and other securities.

This document does not constitute a prospectus as defined by the Prospectus Regulations 2005 (the “Regulations”), and has not been prepared in accordance with the requirements of the Regulations.

To the best of the knowledge and belief of the Directors of Coigach Community CIC (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. The Directors, whose names appear in section 2, accept responsibility accordingly.

Community sustainability in a world2 class environment… Coigach Community CIC

Coigach Community CIC (the “Company”) is a company limited by shares and a community interest company, registered in England with registered office at c/o Pannone Corporate LLP, 378-380 Deansgate, Manchester M3 4LY (registered number 09638437) with head office at Coigach Community Hall, IV26 2YR, . Offer for subscription

An offer of up to1,750,000 Bonds each with a nominal value of £1 in the Company

Promoted by

This document is only available to, and Bonds may only be issued to, persons resident in the . The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this document comes should inform themselves about, and observe, any of those restrictions. Any failure to comply with any of these restrictions may constitute a violation of the securities laws of any such jurisdiction.

3 the wind of change for Coigach Contents

1. Executive summary 5

2. Directors and advisers 9

3. Coigach Community CIC 10

4. Governance and Directors 14

5. Financial information 16

6. Risks 18

APPENDIX 1: Definitions and terms 21

APPENDIX 2: General information 22

APPENDIX 3: Taxation 24

APPENDIX 4: Bond Instrument 26

Community members celebrating the erection of the 50m wind monitoring mast at the turbine site in 2011 to collect wind data for the project.

4 1. Executive summary

Wind is a clean, free and readily available source of energy. The UK is the windiest country in Europe and wind energy is therefore a vital source of sustainable energy in the UK.

Onshore wind is now the UK’s largest source of renewable energy generation. There is currently around 12,500 MW of installed capacity in the UK which equates to around a third of total installed renewable energy capacity.1

An increasing number of renewable energy projects in the UK are being financed and run as community enterprises. This enables the profits generated from them to benefit the local community and gives people the opportunity to take ownership of these projects in their community. This trend has been particularly prevalent in Scotland – there are around 530 community owned projects in Scotland with a combined capacity of 81 MW.2

Coigach Community CIC

COIGACH Coigach Community CIC is a community interest company which owns and operates a community wind turbine in Coigach, a remote peninsula in the Northwest Highlands of Scotland. Coigach Community CIC is wholly owned Inverness by local charity, Coigach Community Development Company. Aberdeen Fort William

REIFF Glasgow ACHNAHAIRD

Edinburgh

LOCH OSCAIG INVERPOLLY NATURE RESERVE DORNIE LOCH STAC POLLAIDH BADAGYLE

ACHILTIBUIE CUL BEAG POLGLASS BADENSCALLIE

SUMMER ISLES CONA MHEALL BEIN BEN MÒR COIGACH AN EOIN NATURE RESERVE BEN MÒR COIGACH

A835

Coigach has a declining population currently of around 260. The community faces a number of challenges common to remote communities including a lack of affordable housing, decreasing levels of health provision, lack of access to basic amenities, poor transport links and a fragile economy which is over-reliant on the traditional industries of crofting and fisheries.

The Coigach wind turbine was developed to create a regular income to support the community through a variety of projects which tackle these challenges. The 500 kW turbine was constructed in early 2017 and started generating electricity in March 2017. It is performing in line with expectations 1 Department for Business, Energy and is expected to generate around 2,020 MWh each year. and Industrial Strategy (BEIS), Renewable electricity capacity and generation, December 2017. The Directors wish to raise £1.75 million through this Bond Offer to refinance existing high cost loans which were taken out to finance the construction of 2 Energy Saving Trust. Community and locally owned renewable the turbine. This will enable Coigach Community CIC to contribute around energy in Scotland at June 2017. £4.4 million to community projects over 20 years.

5 the wind of change for Coigach The 2018 Coigach Community CIC Bond Offer

Issuer: Coigach Community CIC

Amount: £1,750,000

Term: 12 years, final repayment on 31 March 2030

Minimum investment: £250

Interest: 5% gross per year, increasing in line with the annual retail price index each year from April 2019. Payable on 31 March each year (net of UK basic rate tax unless held in a Triodos Innovative Finance ISA when interest will be paid gross). Investors should note that payment of interest and repayment of capital are not guaranteed and are dependent on the continued success of Coigach Community CIC’s business model.

Repayment: The Bonds are expected to be repaid in ten annual instalments from 2021 to 2030. In the event of death of a Bondholder or in other exceptional circumstances, Bonds may be repaid early at the Company’s discretion subject to sufficient cash being available.

Social Impact: An estimated £4.4 million will be donated to Coigach Community Development Company – a local charity – over 20 years to support a range of community projects in Coigach.

ISA and SIPP: The Bonds are eligible to be held in a Triodos Bank Innovative Finance ISA and can be held in a self-invested personal pension (SIPP).

Security: Secured by way of a standard security over the tenant’s interest in the lease of the turbine site and a debenture (including a floating charge) over all of the assets of the Company. An independent Security Trustee will be appointed to represent the Bondholders’ security interest.

Covenants: A negative pledge regarding other borrowings until the Bonds are repaid in full. This prevents the Company from taking on additional debt.

Reporting: Bondholders will receive Coigach Community CIC’s annual report which will contain progress updates on the turbine and the community projects being supported, and will be invited to the Company’s annual AGM.

Transferable: Bonds are transferable but are not listed on any investment exchange which means that Bondholders will have to find a willing buyer and agree a purchase price with them. Investors should be prepared to hold the Bonds for their full 12-year term.

Aggregate minimum The aggregate minimum raise for the Offer is £1,450,000. If less than £1,450,000 is raised, raise: then investors’ monies will be returned with no accrued interest.

Timetable: The Offer opens on 1 March 2018 and closes at noon on 30 April 2018, unless the £1,750,000 target has been reached earlier or the Offer is extended by the Directors at their sole discretion.

Full details of all terms and conditions of the Bonds are included in the Bond Instrument which is in Appendix 4.

6 Example of Bondholder returns

The table below demonstrates the projected interest and capital repayments based on a £5,000 investment in the Bond Offer.

1000 900 800 Interest Payments* 700 Capital repayments 600 £ 500 *These interest payments 400 are estimated based on the 300 assumption that RPI is 2.5% 200 each year for the 12 year term 100 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

The total projected interest payable over the 12 year term based on this example is £2,384.

Please note that the payment of interest and capital are not guaranteed and are dependent on the continued successful operation of the wind turbine. Triodos Bank Innovative Finance ISA (‘IFISA’)

Coigach Community CIC’s Bonds are eligible to be held in a Triodos Bank IFISA, which means Bond interest payments will be received tax-free. The IFISA was introduced on 6 April 2016 and crowdfunded debt securities – such as these Bonds – are eligible for inclusion.

• For the tax year 2017/18 you can subscribe up to £20,000 in an ISA. Contributions to an IFISA count towards your overall ISA contribution limit. • Investors in the Coigach Community CIC Bond will be given the option of opening a Triodos IFISA as part of the online application process. • You can only open one IFISA per tax year. • For a higher rate (40%) taxpayer, holding a bond paying 5% in an ISA is the equivalent of investing in a bond paying 8.33% outside of an ISA wrapper.1

Like all ISAs, the IFISA is subject to eligibility requirements. Bonds cannot be held in an ISA held with other ISA providers. If you wish to invest money you hold in another ISA, you will first need to request an ISA transfer. More information on the Triodos IFISA can be found here www.triodoscrowdfunding.co.uk/IFISA

Funding requirement

Coigach Community CIC is looking to raise £1.75 million through this Bond Offer to refinance existing higher cost loans which were taken out to finance the construction phase of the project. The increased profits generated as a result of the refinancing will be donated toCoigach Community Development Company – a local charity – and invested in projects which will benefit the local community.

1Does not take into account the personal savings allowance of £1,000 for basic rate taxpayers and £500 for higher rate taxpayers.

7 the wind of change for Coigach Key risk factors

The Directors consider the key risk factors to be as follows: • Investing in Coigach Community CIC’s Bonds is not the same as depositing money in a bank account as your capital is at risk and you may not get back the full amount that you invested. The Bonds are not covered by the Financial Services Compensation Scheme or any other compensation scheme and in the event of the Company being unable to pay either the capital or interest payments you will not be entitled to make a claim against the scheme. • An investment in Coigach Community CIC’s Bonds is a long-term investment and Bondholders should be prepared to wait up to 12 years for the full repayment of their capital. You should therefore only invest if you will not need access to your capital for this time period. In the event of death of a Bondholder or in other exceptional circumstances, Bonds may be repaid early at the Company’s discretion subject to sufficient cash being available. • The payment of interest and capital on Coigach Community CIC’s Bonds is dependent on the successful operation of the wind turbine which is not guaranteed. Bondholders should note that the wind turbine is a refurbished Vestas V47 – a proven and established model – but some may view this as riskier than a new turbine. Please read Section 6 for full details. • Although the Bonds are transferable, they are not listed on a recognised investment exchange. This means there is no established mechanism if you wish to sell the Bonds to find a buyer, nor any guarantee of the price that the buyer might be willing to pay.

For further information on risks and the Directors’ perception of mitigating factors, please see Section 6. You should read these before participating in the Bond Offer.

The role of Triodos Corporate Finance

Coigach Community CIC has appointed Triodos Bank’s corporate finance division (which is operated and managed independently of the bank’s commercial lending operation) as lead adviser and promoter in respect of the Bond Offer. Triodos is experienced in raising capital for businesses whose primary purpose is to deliver positive social and environmental impact. Triodos Corporate Finance will be entitled to a success fee upon the successful completion of this offer.

The UK division of Triodos Bank NV, which is authorised by the Dutch Central Bank and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority, is acting for Coigach Community CIC in connection with the arrangements set out in this document and is not acting for anyone else. Triodos Bank does not provide financial advice to savers and investors. It is your responsibility to decide whether to invest or not, including carrying out relevant background research. If you do not understand anything regarding this investment, you should seek independent financial advice.

How to apply

Applications for Coigach Community CIC Bonds should be made online through the Triodos Bank Crowdfunding Platform at www.triodoscrowdfunding.co.uk. If you are unable to invest online please contact us to request a paper alternative.

Please ensure you have read this Offer Document in full before making a decision whether to invest.

If you have any questions about this document or the Bond Offer in general, please contact the Triodos Bank corporate finance team at [email protected] or by calling 0117 980 9593.

8 2. Directors and advisers

Directors Promoter and adviser to Accountants the Company and receiving Alison Hitchings A9 Accountancy Limited Stephen Husband agent for the Offer Elm House Cradlehall Business Park Ann Macleod Triodos Bank NV Inverness Iain Muir Deanery Road IV2 5GH Iain Scott Bristol Fraser MacKenzie BS1 5AS 0117 9809593 Registrar for the Bonds Registered office Triodos Bank NV Solicitors to the Offer Deanery Road Pannone Corporate LLP Bristol 378-380 Deansgate Harper Macleod LLP BS1 5AS Manchester Alder House M3 4LY Cradlehall Business Park Inverness IV2 5GH Registered number

09638437

9 the wind of change for Coigach 3. Coigach Community CIC

Background

Coigach Community CIC is a community interest company which owns and operates a single wind turbine in Coigach, a remote peninsula in the Northwest Highlands of Scotland.

The development of the wind turbine was led by Coigach Community Development Company (“CCDC”) – a company which was established in 2010 by residents of Coigach to benefit the community, and recently converted to a charity. Coigach Community CIC is wholly owned by Coigach Wind Power Ltd, ultimately owned by CCDC and 100% of the profits generated by the turbine will be donated to the charity to benefit the community of Coigach.

The construction of the turbine took place in early 2017 and it was commissioned and began operating in March 2017 when it gained formal accreditation from OFGEM for eligibility to receive Feed-in-Tariff payments for a 20-year period.

A summary of the structure of the group of companies is shown below.

Note: Coigach Wind Power Ltd is a dormant intermediate holding company.

COIGACH WIND POWER LTD CCDC TRADING LTD

COIGACH COMMUNITY CIC

10 Coigach Community Development Company

CCDC was established in 2010 to help overcome the increasingly fragile local economy of Coigach and develop a sustainable local economy which would attract residents and maintain the way of life.

Coigach is a remote peninsular community covering some 50 square miles of mountains, lochs, islands and croft-land set in the spectacular Coigach and Assynt National Scenic Area in the Highlands of Scotland. Despite it being a large area, the population is around 260 – 39% of whom are over 60. The community faces a number of challenges including a lack of affordable housing, a falling school roll, an ageing demographic, a lack of career and social opportunities, decreasing levels of health provision, lack of availability of land and a fragile economy. Coigach is heavily reliant on its traditional primary industries of crofting and fisheries which are vulnerable to external factors such as government policy and environmental concerns. Tourism is a growing industry in the area but is highly seasonal and many holiday homes in the area are owned by non-residents and therefore do not directly benefit the community.

Residents of Coigach face long journeys to access basic amenities – Coigach has no secondary school or medical centre for example. The primary school is also at risk of closure currently having just 11 pupils and one teacher.

CCDC has undertaken a number of projects to address some of these challenges and to generate funds which can be invested into the community.

Achiltibuie Schoolhouse Ben Mor hydro

CCDC developed a 500 kW run-of-river hydropower scheme in partnership with Scottish Wildlife Trust (SWT). The scheme – Ben Mor Hydro – was developed as a joint venture between CCDC and SWT to the point of obtaining planning permission and all other consents. It was then passed on to developer Locogen in 2015 as the development risks became too high for a community group and a wildlife charity to responsibly take on. With more resources available to it, Locogen was able to surmount the challenges that created the risks and the scheme began generating electricity in December 2016 and is expected to generate around 1,450 MWh a year.

CCDC retains a profit share from the scheme (through its wholly owned In 2015 CCDC acquired the old subsidiary CCDC Trading Ltd) which is expected to generate around schoolhouse in Achiltibuie that £350,000 for CCDC over the 20-year life of the project. This will also be had been unoccupied for many used to fund community projects. years. The charity partnered with The scheme was awarded the Best Community Engagement Award at the the Small Communities Scottish Green Energy Awards in 2017. Housing Trust to refurbish the property, transforming it into two flats to provide homes to let to local residents. Each flat is now occupied by a local young woman – one who has been able to return to her home community where she has established an acclaimed seafood bistro on nearby family croft land, the other who has pursued a career in salmon farming and now manages the two salmon farm sites in the nearby . This project meets one the charity’s key objectives of managing land and assets for the benefit of the community.

11 the wind of change for Coigach The Coigach wind turbine

After its formation in 2010, CCDC took on the task of developing a wind turbine project that had been talked about for some time in the community. A community ballot had shown strong support for the project as a means of generating funds to help achieve the community’s ambitions for sustainability and growth. With years of wind monitoring data available and analysed, the case to proceed was compelling. CCDC raised funds in the form of loans and grants from Local Energy Scotland, Highlands and Islands Enterprise and other organisations (see appendix 2 paragraph 6 for a full list of funders) for the various studies that were still required, and to appoint professional project managers. Planning permission could have been difficult to achieve in a National Scenic Area, butCCDC applied for it after completion of a full environmental impact study, and it was granted in 2014. Completion of the project was then largely dependent on securing funding, confirming Feed-in-Tariff payments with OFGEM, purchasing a turbine, appointing contractors and waiting for the regional grid to be upgraded, all of which we achieved by 2017.

The construction began in 2017 and was managed by our project managers Operation and maintenance Locogen – an experienced renewable energy specialist who retain an on-going of the turbine asset management role for the turbine. The turbine began generating electricity in March 2017. Our asset manager Locogen is responsible for the monitoring, The turbine, a refurbished Vestas V47, christened ‘Varuna’, has a capacity of performance analysis and 500 kW and is expected to generate around 2020 MWh of electricity a year. regulatory compliance of the The Directors decided to acquire a refurbished turbine to reduce the costs of turbine in order to optimise its the project and allow for greater donations to be made to CCDC. The turbine performance, reduce downtime – previously operational in Holland for 11 years – was fully refurbished by the and reduce operational costs. original manufacturer Vestas, with some of the original parts being replaced, Locogen monitors the real time prior to acquisition. performance of the turbine, The turbine’s output is sold onto the national grid through annually negotiated investigating any discrepancies. power purchase agreements with national utility companies. Coigach The company has an annual Community CIC owns the turbine and has a 28-year lease for the 2.5 acres of contract with Locogen for this rural land belonging to Scottish Wildlife Trust on which the turbine is located. service which we intend to renew annually. The turbine is fully accredited to benefit from the government’s Feed-in-Tariff (“FIT”) scheme for renewable energy projects, which guarantees an inflation- The maintenance of the protected income for 20 years from when the project began generating turbine is carried out by Realise electricity in March 2017. The FIT income is in addition to the income derived Energy Services (“Realise”) – a from the power purchase agreement. specialist provider of wind turbine operation, service and maintenance services. Realise performs a six-monthly inspection and service of the turbine and replace parts where required. The Company has an initial five-year contract for these services, which we will then look to renew.

The Coigach wind turbine was one of four projects short-listed for the 2017 Scottish Green Coigach Community CIC will Energy Awards in the Best donate 100% of the profits Community Project category. generated by the turbine to CCDC. This will provide a regular income stream for the charity to fund community projects. It is anticipated that around £4.4 million will be donated over 20 years.

12 Community projects

CCDC will use the profits donated fromCoigach Community CIC to fund projects which tackle the challenges faced by the community. It is intended that the funds will support projects which help to develop affordable housing, bring employment or work space into the area, develop transport links and amenities or conserve the natural area.

Old Dornie

One such project CCDC is currently involved in is the development of the community’s harbour facilities at Old Dornie. The harbour’s jetty is too short, drying out at low tide, and too narrow for safety and so is of limited use. However, as the base for the local fishing fleet it is vitally important. The fleet comprises around a dozen inshore creel fishing boats, each manned by one or two fishermen who fish for langoustine, lobster and crab from the waters around the Summer Isles, designated a Marine Protected Area (“MPA”) in 2017 in recognition of its environmental value. Creeling is an environmentally benign fishing method, very much in accord with the MPA ethos, as is the hand-dive scallop boat which also operates out of Old Dornie. Others who use Old Dornie include the local tourist cruise boat, the local salmon farm boats, boat traffic to the Summer Isles, local leisure craft and visiting yachts.

CCDC has secured funding for a feasibility study and to draw up detailed plans for the harbour’s development. When the study reports back, money from turbine income may be used as part of the community’s contribution to funding what will be a significant infrastructure project contributing to Coigach’s future and CCDC’s charitable objects.

In addition to infrastructure projects like Old Dornie harbour, CCDC will invite applications for funding from organisations and individuals with a plan and a funding requirement for a project which supports the development of the community of Coigach. A committee (independent from the CCDC Board) will be formed to assess applications and grant the funding. It is hoped that this process will enable genuine community engagement and allow ideas for the development of the community to come from all those in whose interests it is to see it thrive.

13 the wind of change for Coigach 4. Governance and Directors

Governance

Coigach Community CIC has a board of six Directors who manage the day to day operational aspects of the business. Four of the Directors are also directors of CCDC. Board meetings are held on a group basis and the board meets every four to six weeks. Minutes of the meetings are published on CCDC’s website.

Details of the Company’s Directors are shown below.

Iain Muir Alison Hitchings Iain Scott

Iain trained as a veterinary Alison is a professionally qualified Iain is a Chartered Management surgeon and worked in rural mechanical engineer. Having Accountant, with an MBA and communities in Scotland and worked for a consultancy in is a Chartered Director. Iain Republic of Ireland before Edinburgh as a design engineer has experience in working for developing a career in veterinary she now works in engineering the three largest construction pharmaceuticals to senior consultancy throughout the companies in Scotland. management level. He returned Highlands and Islands, having He joined a nursing home to live in his home community returned to live in her home business in 1998, progressing of Coigach over 20 years ago, community 15 years ago to bring to Managing Director, looking providing business development up her two boys, and perfect her after 5,500 older people and and marketing advice for clients mastery of the Highland bagpipes responsible for over 7,500 staff. of economic development in her spare time. Alison has Since 2004, Iain has worked as agencies, vet locum services and also worked with community a self-employed non-executive a variety of public and voluntary organisations developing social director primarily working roles, including past steering enterprise initiatives focusing on with small companies helping group chairman of North West community carbon reduction. them to raise funds and grow. Highland Geopark, director of Involved in the community turbine Iain, who has had a home in The Footpath Trust, trustee and project from the start, Alison has Achiltibuie for 10 years, has chair of West Sutherland Fisheries served on Coigach Community been a director of CCDC for four Trust, board member of the North Council, is Chair of Coigach years and has recently been Area Board for Scottish Natural Wind Power and is a Director of appointed as a Director of the Heritage and vice-chairman of Coigach Community CIC. Company. Iain is responsible for Coigach Community Council. all financial matters relating to Iain is a director and chairman of CCDC and the Company and CCDC and Director of Coigach produces monthly management Community CIC and was involved accounts for Coigach in the development of Coigach’s Community CIC and CCDC. wind turbine from the start.

14 Steve Husband Ann Macleod Fraser Mackenzie

Steve moved to Achiltibuie Ann moved north to live in A chartered town planner, over 30 years ago. He has Coigach permanently in 1978. Fraser has worked in renewable an agricultural background, She has a Bachelor of Education energy for ten years primarily providing a good base for degree from Manchester as project director on various practical problem solving. Steve University and a Diploma in large scale commercial wind has been self-employed for 25 Health and Social Care from farm projects. Prior to this Fraser years, running an engineering the Open University. As well as worked in the development of business, mainly providing bringing up five children, Ann has telecommunication networks equipment and services been employed locally for over throughout the UK and as worldwide to the wind energy 35 years in a variety of posts from planning advisor with Scottish industry. Steve has worked on supply teaching, smoked salmon Natural Heritage. Fraser lives in Coigach’s wind turbine project processing to the social care Cromarty on the Black Isle and since its inception. He is a Director sector and is now retired. Ann is has a home in Achiltibuie where of both the CCDC and Coigach the Correspondence Secretary his family roots are. Community CIC. of the local Community Council as well as a Director of the CCDC and Coigach Community CIC.

15 the wind of change for Coigach 5. Financial information

A summary of Coigach Community CIC’s consolidated financial projections is shown below.

Year ended 31 March 1 year 1 year 1 year 1 year 1 year 5 years 5 years 5 years 2018 2019 2020 2021 2022 2027 2032 2037 Total Forecast Projected Projected Projected Projected Projected Projected Projected Projected £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Operating income 351 373 382 391 401 2,154 2,431 2,744 9,226

Operating costs (61) (87) (89) (90) (92) (461) (498) (610) (1987)

Cash flow available for financing 290 285 293 301 309 1,693 1,933 2,134 7,239 and donation to CCDC

Existing loan interest and scheduled (174) (33) – – – – – – (207) capital repayments

Bond Interest – (73) (90) (92) (89) (381) (95) – (820)

Bond capital repayments – – – (100) (100) (800) (750) – (1,750)

Cash flow for donation to CDCC 116 180 203 109 120 512 1,088 2,134 4,463

Please note that forward-looking statements are merely unaudited projections based on a number of assumptions and should not be relied upon as indicators of future performance. There is no guarantee these projections will be achieved.

Forecast income is derived from The key assumptions underlying these projections are as follows: the sale of electricity generated by the wind turbine and payments • The Company raises £1,750,000 through the Bond Offer which is used received through the Feed-in-Tariff to repay all existing loans. scheme linked to the generation of • The Coigach wind turbine generates around 2,020 MWh of electricity renewable electricity. each year. Operating costs principally include • The turbine receives income from the sale of wholesale electricity to annual rent, insurance and operation the grid until 2037. The price is based on the export tariff floor price of and maintenance costs. The 5.05 pence per kWh which is set by Ofgem and increases in line with Directors receive no remuneration. inflation each year. • The turbine continues to receive payments through the Feed-in-Tariff scheme at a current rate of 12.49p/kWh until March 2037 (increased each year in line with inflation). • Bondholders’ capital is repaid in 10 annual instalments from 2021 to 2030. • 100% of available cash flow after operating costs and bond interest and capital repayments is donated to CCDC.

16 Bond capital repayments

Bondholders capital is scheduled to be repaid over a 12-year period in 10 instalments from 2021 to 2030. The graph below demonstrates the scheduled capital repayments for the full £1.75 million assuming the Bond is fully subscribed.

300

250

200

£’000 150

100

50

0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Please note that the payment of interest and capital are not guaranteed and are dependent on the continued successful operation of the wind turbine.

Support us, come and see us

We would like to encourage our Bondholders to come and visit us for our AGM where they can hear from the Directors, see the turbine, meet the community and enjoy our wonderful landscape.

17 the wind of change for Coigach 6. Risks

In addition to the other relevant information set out in this document, the following specific risk factors should be considered carefully in evaluating whether to make an investment in the Bonds. If you are in any doubt about the contents of this document or the action you should take, you are strongly recommended to consult your financial or other professional adviser.

The Directors believe that the principal risk factors relevant to investing in the Bonds are as set out below. The following risk factors should be considered but it should be noted that these are not exhaustive and not in any particular order of priority.

Single turbine revenue model risk Operating risks

Coigach Community CIC’s business plan is entirely There are risks associated with operating facilities where dependent on the successful continued operation of the an accident or incident might result in the facility being single 500 kw turbine. shut down for investigation and/or repair.

The turbine has been operational for almost a year. In the The Company has a service and maintenance contract with first 10 months of operation the turbine has generated an experienced contractor who provides a six-monthly around 90% of the energy forecast for that period. The inspection and service of the turbine. In addition to this majority of the shortfall was in the initial months of asset management services are provided by Locogen, operation whilst the optimal settings for the turbine monitoring the performance of the turbine and resolving were being finalised – in the four months since October operational issues as well as taking responsibility for 2017 it has performed at 99% of forecast production. The health, safety and environmental compliance. The Directors are confident that the Company has a sound Company also has insurance is respect of business commercial business model. interruption and machinery damage.

Single turbine technology risk Repayment of Bonds

Generation of electricity involves mechanical, electrical An investment in Coigach Community CIC is intended and electronic processes which may fail under certain to be a long-term investment and Bondholders should conditions and lead to loss of revenues and repair or be prepared to hold their investment for 12 years. The replacement costs. The turbine is a refurbished turbine repayment of the Bonds is dependent on the Company’s which was previously operational for 11 years on a ability to meet its financial forecasts. It is therefore not different site and therefore may be more susceptible a certainty that Coigach Community CIC will have to technology failures as compared to a new turbine. sufficient funds or access to financial resources available to However the turbine underwent a full refurbishment by repay the Bonds. An investment in Bonds is not covered by the original manufacturer, Vestas, before being installed in the Financial Services Compensation Scheme. Coigach, and parts were replaced where required. Based on the Company’s financial forecasts (summarised The Company has a five-year warranty and a service and on page 16) it is anticipated that the Company will maintenance contract with an experienced contractor generate around £1.5 million of surplus net cash over which includes the replacement of parts where required. the 12 year term of the Bond after paying all operating The Company also contributes £12,000 each year into a costs and interest and capital payments on the Bond. It is maintenance reserve to cover any additional maintenance intended this cash will be donated to CCDC however no and part replacements which are not covered by the payments will be made to the CCDC until the scheduled warranty service and maintenance agreement. The Bond interest and capital payments are made. Company has insurance is respect of business interruption and machinery damage.

18 Bonds are illiquid until scheduled The Company has a power purchase agreement with a large energy supplier at a price which exceeds the Export repayment dates Tariff. This is an annual agreement which the Directors may choose to renew depending on the price offered. However, The Bonds have a series of fixed capital repayment dates for prudence the financial projections assume that and investors will have no ability to require the Company electricity is sold at the Export Tariff rate. The Directors are to repay their capital before these repayment dates. confident of continuing to secure a commercially viable rate for the sale of electricity generated by the scheme. Although the Bonds are transferable, they will not be listed on a recognised stock exchange. This means there is no established mechanism for a Bondholder wishing to sell their Bonds to find a buyer, nor any guarantee of the price Environmental risks that the buyer might be willing to pay. Adverse environmental conditions at the site used by At the Company’s discretion, Bonds can be repaid on the Company for renewable generation may negatively the death of a Bondholder or in other exceptional affect the Company’s business and profitability. However, circumstances. The Company will make every effort to preliminary surveys carried out as part of the planning do this but any payment will be subject to there being application process did not reveal any likely adverse sufficient cash available. environmental risk factors.

The Directors are confident that the likelihood of severe environmental conditions at the Coigach Community Reliance on wind resources CIC site is remote. In any event, the Company is employing proven technologies designed to prevail in adverse Climate variability and fluctuating weather patterns could environmental conditions and holds specialist insurance to reduce the Company’s profitability since its revenues mitigate its exposure in the event of loss. directly relate to the amount of wind energy generated by the Coigach turbine. There is currently no consensus on evidence in historical Government policy towards renewable records or indication from climate modelling of declining trends in average wind levels. energy may change unfavourably

The Company’s assumptions around potential renewable The Company’s business plan is based on current UK energy generation levels each year are based on Government and European renewable energy policy. site capacity and yield calculations provided by the Changes in respect of legislation concerning the Feed-in- construction partner from many years of wind data Tariff in relation to renewable energy projects could recorded locally and at the turbine site. have a negative impact on the revenues and profits of the Company.

However, the UK Government has made certain Fluctuating electricity prices commitments to the FIT which are underpinned by a European Directive to achieve 20% of energy from Around 60% of the Company’s forecast income is renewables by 2020. The FIT is subject to regular review generated from the Feed-in-Tariff, a long-term inflation- though all UK governments have been consistent in linked UK government pricing mechanism which provides avoiding changes which impact projects retrospectively by a secure income stream. adopting a grandfathering policy for operational projects. The remainder of income comes from the sale of electricity exported to the grid. For the next 19 years, the Company has the option to sell exported electricity either for the Taxation Export Tariff, an inflation-linked UK government price or for a market price agreed with a wholesale purchaser. It can Information regarding taxation is based upon current UK make this choice periodically depending on whether the taxation legislation and HM Revenue & Customs practice. market price or Export Tariff is more favourable. Tax law and practice is subject to change. Any changes in the level and basis of taxation, in tax reliefs or in HM The wholesale prices of electricity and gas, which have an Revenue & Customs practice may affect the value of an impact on market sale prices for the Company’s electricity, investment in the Bonds and returns to Bondholders. fluctuate. This may lead to volatility in some of the forecast revenue streams.

19 the wind of change for Coigach 20 APPENDIX 1 Definitions and terms

Act the Companies Act 2006 Bond Instrument the bond instrument shown in Appendix 4 Bonds the bonds of £1 each to be issued by the Company, as constituted by the Bond Instrument Bondholder or Investor an investor who subscribes for and holds Bonds Bond Offer or Offer the invitation to qualifying investors to subscribe for Bonds issued by the Company on the terms referenced in this Offer Document Closing date the earlier of the Maximum Subscription being reached or 12 noon on 30 April 2018 (or such later date that the Directors of Coigach Community CIC may reasonably determine in their sole discretion) CCDC Trading Limited a company registered in Scotland (SC530297) and a subsidiary of CCDC Coigach Community CIC a community interest company registered in England (9638437) or the Company Coigach Community a charity registered in Scotland (SC374107) and ultimate parent company of Coigach Development Company Community CIC or CCDC Coigach Wind Power a company registered in Scotland (SC413306) and immediate parent company of Limited Coigach Community CIC Debenture the debenture granted to the Security Trustee on behalf of the Bondholders by the Company. Directors or the Board the current directors of the Company including Iain Muir, Steve Husband, Ann Macleod, Iain Scott, Fraser Mackenzie and Alison Hitchings Dutch Central Bank De Nederlandsche Bank (DNB), the central bank and one of the banking regulatory authorities of The Netherlands Energy energy is the rate at which power is used or produced. One Megawatt-hour represents 1 hour of electricity consumption (or generation) at a constant rate of 1 Megawatt (MW) Export Tariff a payment for the sale of electricity to the grid per kWh of electricity produced FCA the Financial Conduct Authority FIT Feed-in-Tariff. A revenue support mechanism under which generators of renewable energy received index linked payments over 20 years funded by the UK government FSMA the Financial Services and Markets Act 2000 (as amended) Gift aid a scheme enabling registered charities to reclaim tax on a donation made by a UK taxpayer Launch date 1 March 2018 Locogen Locogen Limited (SC370060), a renewable energy consultancy established in 2009 and based in Edinburgh Maximum or Full Raise the aggregate maximum raise under the Bond Offer of £1,750,000 Minimum Raise the aggregate minimum raise under the Bond Offer of £1,450,000 MW Megawatt, the unit for measuring electricity power output of a project MWh the amount of energy consumption (or generation) at a constant rate of 1 Megawatt (MW) per hour. The average UK household consumes 4.115 MWh per year PRA the Prudential Regulation Authority Realise Energy Services Realise Energy Services Limited (SC411662), a specialist provider of wind turbine operation, service and maintenance services established in 2011 and based in Perth Renewable Energy energy generated from unlimited natural resources such as wind, solar, wave and tidal Security Trustee an appointed Security Trustee representing the Bondholder security interest Triodos Bank or the Bank Triodos Bank NV (incorporated under the laws of the Netherlands with limited liability, registered in England and Wales BR3012). Authorised by the Dutch Central Bank and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Registered office: Triodos Bank NV, Deanery Road, Bristol, BS1 5AS. VAT reg no 793493383.

21 the wind of change for Coigach APPENDIX 2 General information

1. Responsibility

The Directors (whose names appear in Section 2) and the Company accept responsibility for the information in this document. To the best of the knowledge of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. Corporate structure

Coigach Community CIC was incorporated in England under the Companies Act 2006 as a community interest company with the name Willowcroft W Community Energy CIC and registered number 09638437 on 15 June 2015. Coigach Wind Power Ltd acquired the company in 2016 for the purposes of owning and operating the Coigach wind turbine and changed the name to Coigach Community CIC. The principal legislation that applies to the Company is the Companies Act 2006 and it is regulated by the Community Interest Company Regulator.

A summary of the group structure is shown below.

COIGACH WIND POWER LTD CCDC TRADING LTD

COIGACH COMMUNITY CIC

Coigach Wind Power was set up to develop the turbine and it was through this company that planning permission was obtained. However, as a limited company it was unable to access community Feed-in-Tariffs and therefore the Directors acquired Coigach Community CIC to own and operate the turbine and to access the community Feed-in-Tariff.

The registered office of the Company is Pannone Corporate LLP, 378-380 Deansgate, Manchester.

22 3. Share capital of the Company 4. The Directors

100% of the share capital of the Company is owned by The Directors are not remunerated by the Company. Coigach Wind Power Limited.

5. Material contracts

The Company has the following material contracts in place:

• An engagement letter dated 7 November 2017 with Triodos Bank NV in relation to the Bond Offer. Under this agreement, Triodos has been appointed as agent of the Company to use its reasonable endeavours to procure subscribers for Bonds under the Offer. The engagement letter provides for the Company to pay Triodos a success fee of 3% of funds raised on the successful completion of the Bond Offer.

• A 28-year lease agreement dated 18 August 2016 with the Scottish Wildlife Trust. Under the agreement rent is payable based on a percentage of the net income generated by the turbine. There are no break clauses in the agreement.

• An asset management agreement with Locogen Limited dated 7 August 2016. The agreement covers the operation, monitoring and managing of the turbine for a fixed annual charge which is adjusted by RPI annually.

• A five-year agreement with Realise Energy Renewable Energy Solutions dated 7 August 2016 for the service and maintenance of the turbine. The agreement covers a six-monthly inspection and service of the turbine and the replacement of specified parts for the five-year term. A fixed annual charge is payable for the services which is adjusted by RPI annually.

• Formal accreditation from Ofgem for eligibility to receive Feed-in-Tariff payments from 22 March 2017 for a 20-year period at a rate of 12.05p/kWh increasing each year in line with inflation.

6. Funders of the project 7. Other Information

CCDC has received funds from the following The Offer is conditional upon the Minimum Raise organisations to enable the turbine to be developed: of £1,450,000. This would enable the Company to repay one of the two existing higher cost loans in full, Highland and Islands Enterprise (HIE) leaving one remaining loan to be serviced alongside Local Energy Scotland the Bonds. The subscription monies will be kept in a Coigach Community Trust separate bank account and, if the Minimum Raise has Scottish and Southern Energy not been achieved by the Closing Date, the Offer will be withdrawn and the subscription monies refunded Big Lottery Fund without interest. Highland Council

23 the wind of change for Coigach APPENDIX 3 Taxation

If you are considering applying for Bonds, it is important that you understand the taxation consequences of investing in the Bonds. You should read this section and discuss the taxation consequences with your tax adviser, financial adviser or other professional adviser before deciding whether to invest.

The summary set out below describes certain taxation matters of the United Kingdom based on the Company’s understanding of current law and practice in the United Kingdom as of the date of this Offer Document, both of which are subject to change, possibly with retrospective effect. The summary is intended as a general guide only and is not intended to be, nor should it be construed to be, legal or tax advice.

The summary set out below applies only to persons who are the absolute beneficial owners of Bonds who hold their Bonds as investments and (save where it is explicitly stated otherwise) who are resident and (in the case of individuals) domiciled for tax purposes in the United Kingdom. In particular, Bondholders holding their Bonds via a depositary receipt system or clearance service should note that they may not always be the beneficial owners thereof. This summary does not deal with the tax position of individuals who hold their bonds via an IFISA. A brief summary of the tax position of individuals holding the Bonds in this manner is on page 7. Some aspects do not apply to certain classes of person (such as dealers, certain professional investors and persons connected with the Company) to whom special rules may apply. The United Kingdom tax treatment of prospective Bondholders depends on their individual circumstances and may therefore differ to that set out below or may be subject to change in the future.

If you may be subject to tax in a jurisdiction other than the United Kingdom or are unsure as to your tax position, you should seek your own professional advice. This summary addresses the general tax position of residents of the United Kingdom but does not address any changes to tax rates and bands announced by the Scottish government. If you are resident in Scotland, you should seek your own professional advice on the possible impact to the position set out in this summary of any changes announced by the Scottish government. This summary only deals with the matters expressly set out below.

Interest on the Bonds

Withholding tax on the Bonds

Generally, payments of interest on the Bonds will be made with deduction of, or withholding on account, of United Kingdom income tax at the basic rate of income tax, currently 20%. However, from 6 April 2016 the Personal Savings Allowance came into effect which enables savers to receive an allowance of savings income tax-free, based on the individuals’ own tax circumstances. Investors in investment bonds can use the Personal Savings Allowance in relation to income received for bond interest payments, but tax will continue to be deducted at source and HMRC will need to be contacted in order for any over-paid tax to be reclaimed.

Interest on the Bonds may be paid without withholding or deduction on account of United Kingdom tax where:

(a) interest on the Bonds is paid by a company and, at the time the payment is made, the Issuer reasonably believes that the person beneficially entitled to the interest is: (i) a company resident in the United Kingdom; or (ii) a company not resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account the interest in computing its United Kingdom taxable profits; or (iii) a partnership each member of which is a company referred to in (i) or (ii) above or a combination of companies referred to in (i) or (ii) above, provided that HMRC has not given a direction (in circumstances where it has reasonable grounds to believe that it is likely that one of the above exemptions is not available in respect of such payment of interest at the time the payment is made) that the interest should be paid under deduction of tax, or (b) the Issuer has received a direction permitting payment without withholding or deduction from HMRC in respect of such relief as may be available pursuant to the provisions of any applicable double taxation treaty. In other cases, an amount must generally be withheld from payments of interest on the Bonds on account of United Kingdom income tax at the basic rate (currently 20 per cent). If interest were paid under deduction of United Kingdom income tax, Bondholders who are not resident in the United Kingdom may be able to recover all or part of the tax deducted if there is an appropriate provision in an applicable tax treaty.

24 Further United Kingdom income tax issues United Kingdom

Interest on the Bonds constitutes United Kingdom source income for tax corporation taxpayers purposes and, as such, may be subject to income tax even where paid without withholding, irrespective of the residence of the Bondholder. In general, Bondholders which are within the charge to However, interest with a United Kingdom source properly received United Kingdom corporation without deduction or withholding on account of United Kingdom tax will tax (including non-resident not be chargeable to United Kingdom tax in the hands of a Bondholder Bondholders whose Bonds are (other than certain trustees) who is not resident for tax purposes in the used, held or acquired for the United Kingdom unless that Bondholder carries on a trade, profession purposes of trade carried on in or vocation in the United Kingdom through a United Kingdom branch the United Kingdom through a or agency in connection with which the interest is received or to which permanent establishment) will be the Bonds are attributable (and where that Bondholder is a company, charged to tax as income on all unless that Bondholder carries on a trade in the United Kingdom through returns, profits or gains on, and a permanent establishment in connection with which the interest is fluctuations in value of, the Bonds received or to which the Bonds are attributable). There are exemptions for (whether attributable to currency interest received by certain categories of agent (such as some brokers and fluctuations or otherwise) broadly investment managers). The provisions of an applicable double taxation in accordance with their statutory treaty may also be relevant for such Bondholders. accounting treatment.

Other United Kingdom taxpayers

Interest

Bondholders who are either individuals or trustees and are resident for tax purposes in the United Kingdom or who carry on a trade, profession or vocation in the United Kingdom through a branch or agency to which the Bonds are attributable will generally be liable to United Kingdom tax on the amount of any interest received in respect of the Bonds.

Transfer (including redemption)

For Bondholders who are individuals, the Bonds will constitute “qualifying corporate bonds” within the meaning of section 117 of the Taxation of Chargeable Gains Act 1992. Accordingly, a disposal by such a Bondholder of a Bond will not give rise to a chargeable gain or an allowable loss for the purposes of United Kingdom taxation of chargeable gains.

Accrued income scheme Stamp duty and stamp Inheritance tax

On a disposal of Bonds by a duty reserve tax Generally, the value of the bonds Bondholder who is an individual, will fall into the Bondholders No United Kingdom stamp duty any interest which has accrued estate for inheritance tax or stamp duty reserve tax is since the last interest payment purposes. payable on the issue or transfer date may be chargeable to tax by delivery of the Bonds or on as income under the rules of the their redemption. accrued income scheme as set out in Part 12 of the Income Tax Act 2007, if that Bondholder is resident in the United Kingdom or carries on a trade in the United Kingdom through a branch or agency to which the Bonds are attributable.

25 the wind of change for Coigach APPENDIX 4 Bond Instrument

DATED 2018

BOND INSTRUMENT

constituting

UP TO £1,750,000 5% INDEX-LINKED SECURED BONDS 2030

in

COIGACH COMMUNITY C.I.C

HARPER MACLEOD LLP IS ONLY ACTING FOR COIGACH COMMUNITY C.I.C AND NO OTHER PARTY IN RESPECT OF THIS DOCUMENT. EACH OTHER PARTY TO THIS DOCUMENT SHOULD TAKE THEIR OWN INDEPENDENT LEGAL ADVICE BEFORE ENTERING INTO THIS DOCUMENT AS THE EXECUTION OF THIS DOCUMENT WILL HAVE LEGAL EFFECT AND IMPLICATIONS.

26 CONTENTS

1 DEFINITIONS AND INTERPRETATION 28

2 AMOUNT OF BONDS 30

3 DESCRIPTION OF BONDS 30

4 STATUS OF BONDS 30

5 PAYMENTS – GENERAL 31

6 REPAYMENT OF CAPITAL 31

7 VOLUNTARY EARLY REPAYMENT 31

8 CANCELLATION 31

9 PAYMENT OF INTEREST 31

10 UNDERTAKINGS 32

11 CERTIFICATES 32

12 REGISTER 32

13 DEFAULT 33

14 ACCELERATION 33

15 MEETINGS OF BONDHOLDERS 33

16 TRANSFER OF BONDS 33

17 TRANSMISSION OF BONDS 34

18 REPORTING 34

19 ENFORCEMENT 34

20 MODIFICATION 34

21 NOTICE TO BONDHOLDERS 34

22 NOTICE TO THE COMPANY 34

23 SECURITY AND SECURITY TRUSTEE 34

24 COUNTERPARTS 35

25 GOVERNING LAW AND JURISDICTION 35

PART 1 FORM OF BOND CERTIFICATE 36

PART 2 REPAYMENT AMOUNTS 36

PART 3 PROVISIONS FOR MEETINGS OF BONDHOLDERS 37

PART 4 SECURITY TRUSTEE 39

27 the wind of change for Coigach HARPER MACLEOD LLP IS ONLY ACTING FOR COIGACH (a) borrowing or raising money (with COMMUNITY C.I.C AND NO OTHER PARTY IN RESPECT or without security), including any OF THIS DOCUMENT. EACH OTHER PARTY TO THIS premium and any capitalised interest DOCUMENT SHOULD TAKE THEIR OWN INDEPENDENT on that money; LEGAL ADVICE BEFORE ENTERING INTO THIS DOCUMENT (b) any bond, note, loan stock, debenture, AS THE EXECUTION OF THIS DOCUMENT WILL HAVE commercial paper or similar LEGAL EFFECT AND IMPLICATIONS. instrument; (c) any acceptance credit facility or dematerialised equivalent, bill- discounting, note purchase or THIS INSTRUMENT is made between: documentary credit facilities; (d) monies raised by selling, assigning (1) COIGACH COMMUNITY C.I.C., incorporated and or discounting receivables or other registered in England and Wales as a community financial assets on terms that recourse may be had to the Borrower if those interest company with company number 09638437, receivables or financial assets are not whose registered office is at C/O PANNONE paid when due; CORPORATE LLP, 378-380 Deansgate, Manchester, (e) any deferred payment for assets or England, M3 4LY (Company); and services acquired, other than trade credit that is given in the ordinary (2) TRIODOS CORPORATE OFFICER LIMITED course of trading and which does not incorporated and registered in England and Wales involve any deferred payment of any with company number 07594970, whose registered amount for more than 60 days; office address is at Triodos Bank, Deanery Road, (f) any rental or hire charges under Bristol, BS1 5AS as security trustee on behalf of the finance leases (whether for land, Bondholders (Security Trustee). machinery, equipment or otherwise); (g) any counter-indemnity obligation in respect of any guarantee, bond, indemnity, standby letter of credit BACKGROUND or other instrument issued by a third party in connection with the The Company has, by resolution of its board of Company’s performance of contracts; directors passed on 28 February, resolved to create (h) any other transaction that has the up to a maximum nominal amount of £1,750,000 5% commercial effect of borrowing Index-Linked Secured Bonds 2030 of £1 each, to be (including any forward sale or constituted in the manner set out below. purchase agreement and any liabilities which are not shown as borrowed money on the Company’s balance sheet because they are TERMS of BOND INSTRUMENT contingent, conditional or otherwise); (i) any derivative transaction entered into in connection with protection against 1. DEFINITIONS AND INTERPRETATION or benefit from fluctuation in any rate or price (and when calculating the 1.1 The definitions and rules of interpretation in this value of any derivative transaction, clause apply in this instrument. only the mark to market value shall be taken into account); and Annual Minimum in respect of a Repayment Date, the amount (j) any guarantee, counter-indemnity or Repayment of the minimum annual principal repayment other assurances against financial loss for that Repayment Date as set out opposite that the Company has given for any that Repayment Date in Part 2 of the of the items referred to in paragraphs Schedule. (a) to (i) inclusive of this definition incurred by any person, Bondholder each person for the time being entered in the Register as a holder of any Bonds. provided that, no liability shall be taken into account more than once. Bonds up to £1,750,000 5% Index-Linked Secured Bonds 2030 of £1 each constituted by this Business Day a day other than a Saturday, Sunday or instrument or, as the case may be, the public holiday in Scotland when banks in amount of such bonds for the time being Inverness are open for business. issued and outstanding. Client Money a UK bank account into which the Borrowed Money any Indebtedness the Company owes as a Account Company is to pay all sums due to the result of: Bondholders as notified to the Company by the Registrar.

28 Debenture the debenture dated on or around the date Security any standard security, mortgage, charge of this instrument between the Company (whether fixed or floating, legal or and the Security Trustee. equitable), pledge, lien, assignment or assignation by way of security or other Default Interest 3% above the Interest Rate. security interest securing any obligation Rate of any person or any other agreement or Directors the directors of the Company for the time arrangement having a similar effect. being. Special a resolution passed at a meeting of the Event of Default any of those events specified in clause 13. Resolution Bondholders duly convened and held in accordance with the provisions of this Final Repayment 31 March 2030. instrument and carried by a majority Date consisting of not less than 75% of the persons voting at such meeting on a show any obligation to pay or repay money, Indebtedness of hands or, if a poll is demanded, by a present or future, whether actual or majority consisting of not less than 75% of contingent, sole or joint and any guarantee the votes given on such poll. or indemnity of any of those obligations. means the standard security dated on or 5% per annum subject to increase with Standard Interest Rate around the date of this instrument by the effect from each RPI Index Change Date in Security Company in favour of Security Trustee over line with the RPI Index Change in respect the Property. of that RPI Index Change Date. This will be calculated in respect of each RPI Index Triodos the website at www.triodoscrowdfunding. Change Date using the formula: Crowdfunding co.uk, or such other replacement service as duly notified to the Bondholders from time new Interest Rate = existing Interest Rate x Website to time by the Registrar. (1 + RPI Index Change in respect of that RPI Trust Property means all rights, titles and interests Index Change Date). that may now or hereafter be given, Ofgem the Gas and Electricity Markets Authority mortgaged, charged or assigned in favour as defined in section 1(1) or the Utilities of the Security Trustee by or pursuant Act 2000 and any successor or other to the Debenture and/or the Standard appropriate body from time-to-time. Security (and, in each case, the proceeds of such security). Property the tenants interest in the leasehold subjects extending to 0.9839 hectares or thereby at Achavraie, Achiltibuie, Coigach, 1.2 Any reference in this instrument to: Ullapool undergoing first registration in 1.2.1 the assets of any person shall be construed the Land Register of Scotland under Title Number ROS19035 as a reference to all or any part of its business, undertaking, property, assets, revenues Register the register of Bondholders kept and maintained by or on behalf of the (including any right to receive revenues) and Company in accordance with clause 12. uncalled capital; Registrar Triodos Bank NV incorporated under 1.2.2 an encumbrance shall be construed as a the laws of the Netherlands with limited reference to a standard security, mortgage, liability and registered in England and charge (whether fixed or floating, legal or Wales with branch number BR3012 whose equitable), assignment, assignation, pledge, registered office is at Triodos Bank NV, Deanery Road, Bristol, BS1 5AS, as the lien (save as arising in the ordinary course Company’s registrar. of business), hypothecation, right of set-off (save as arising under the general law for the Repayment 31 March each year, commencing on 31 protection of certain classes of creditors) or Dates March 2019 and up to (and including) the Final Repayment Date, each a Repayment trust arrangement for the purpose of and Date. having a similar effect to the granting of security, or other security interest of any kind; RPI Index in respect of each RPI Index Change Date, Change the figure for the annual percentage 1.2.3 indebtedness shall be construed as a increase to the retail prices index (or any reference to any actual obligation for the official index replacing it) published on the Ofgem website and used by Ofgem payment or repayment of money, whether as to adjust the FIT (Feed-in-Tariff) rate with principal or as cautioner and whether present effect from that RPI Index Change Date. or future;

RPI Index 1 April each year, commencing on 1 April 1.2.4 this instrument or to any other instrument, 2019. Change Date agreement or document shall, unless the

29 the wind of change for Coigach context otherwise requires, be construed as 1.3.1 shall be construed as a reference to it as it is reference to this instrument or such other in force as at the date of this instrument; and instrument, agreement or document as the 1.3.2 shall include all subordinate legislation made same may from time to time be amended, as at the date of this instrument under that varied, supplemented or novated, in each statute or statutory provision. case, in accordance with its terms; 1.2.5 a month shall be construed as a reference 1.4 In construing this instrument general words to a period starting on one day in a calendar introduced by the word other shall not be given month and ending on the numerically a restrictive meaning by reason of the fact that corresponding day in the next calendar they are preceded by words indicating a particular month save that, where any such period class of acts, matters or things and general words would otherwise end on a day that is not followed by the word including shall not be given a a Business Day, it shall end on the next restrictive meaning by reason of the fact that they Business Day, unless that day falls in the are followed by particular examples intended to be calendar month succeeding that in which it embraced by the general words. would otherwise have ended, in which case 1.5 All the provisions of this instrument are severable it shall end on the preceding Business Day and distinct from one another and the illegality, provided that, if a period starts on the last invalidity or unenforceability of any provision of this Business Day in a calendar month or if there instrument under the law of any jurisdiction shall is no numerically corresponding day in the not affect its validity or enforceability under the law month in which that period ends, that period of any other jurisdiction nor the legality, validity or shall end on the last Business Day in that later enforceability of any other provision. month; 1.6 References to the Bonds include references to all 1.2.6 a person includes a natural person, and/or any of the Bonds. corporate or unincorporated body (whether or not having separate legal personality) 1.7 Clause, Schedule and paragraph headings shall not and that person’s personal representatives, affect the interpretation of this instrument. successors and permitted assignees; 1.8 References to clauses and the Schedule are to the 1.2.7 repayment includes redemption and clauses of and schedule to this instrument and vice versa and the words repay, redeem, references to paragraphs are to paragraphs of the repayable, redeemed and repaid shall be Schedule. construed accordingly; 1.9 The Schedule forms part of this instrument and 1.2.8 a reference to a holding company or a shall have effect as if set out in full in the body of subsidiary means a holding company or a this instrument. Any reference to this instrument subsidiary (as the case may be) as defined in includes the Schedule. the Companies Act 2006; 1.10 Any reference to writing or written includes email 1.2.9 tax shall be construed so as to include but not fax. any present and future tax, levy, impost, deduction, withholding, duty or other 2 AMOUNT OF BONDS charge of a similar nature (including, without limitation, any penalty or interest payable The principal amount of the Bonds is limited to in connection with any failure to pay or any £1,750,000. delay in paying any of the same); 1.2.10 the winding-up, dissolution or 3 DESCRIPTION OF BONDS administration of a person shall be construed so as to include any equivalent The Bonds shall be known as £1,750,000 5% Index- or analogous proceedings under the law Linked Secured Bonds 2030 of £1 each and shall be of the jurisdiction in which such person is issued in integral multiples of £1 by the Company. incorporated or resident of any jurisdiction in which such person carries on business; and 4 STATUS OF BONDS 1.2.11 £ denotes the lawful currency of the United The Bonds when issued shall rank pari passu equally and Kingdom. rateably without discrimination or preference among 1.3 References to any statute or statutory provision: themselves and as a secured obligation of the Company.

30 5 PAYMENTS – GENERAL or withheld from such payment) accrued on the relevant Bonds up to (and including) the date of 5.1 Where any payment to a Bondholder, whether of such repayment by the Company. principal, interest or otherwise, is due in accordance with the terms of this instrument it shall be paid 7 VOLUNTARY EARLY REPAYMENT by the Company within 10 Business Days of the relevant Repayment Date or Final Repayment Date 7.1 The Company may at its absolute discretion on and all references to the due date of payment in this each Repayment Date make a voluntary additional instrument shall be construed accordingly. payment of principal to the Bondholders. The 5.2 All payments of principal, interest or other moneys amount (if any) of any such voluntary additional to be made by the Company shall be made after any payment of principal to the Bondholders shall deductions or withholdings for or on account of any be determined by the Company at its absolute present or future taxes required to be deducted or discretion. withheld from such payments. 7.2 If, as a result of any voluntary additional payment 5.3 No repayment or prepayment of any part of any of principal by the Company pursuant to Clause Bonds shall result in the issue of a new certificate to 7.1 the amount of any outstanding principal of the the relevant Bondholder. Bonds is less than the amount of any scheduled Annual Minimum Repayment, the amount of such 5.4 Any payments of principal, interest or otherwise Annual Minimum Repayment shall be reduced to the by the Company shall be made to the Bondholders amount of the outstanding principal. by making a payment of such amount to the Client Money Account. 7.3 Any payment made under the provisions of Clause 7.1 shall be treated as reducing the amount of the repayments under Clause 6.2 proportionately. 6 REPAYMENT OF CAPITAL 7.4 Any redemption of the Bonds under the provisions 6.1 On the Final Repayment Date, the Company shall of Clause 7.1 shall be made pro rata to the holdings redeem the outstanding principal amount of the of all Bondholders as at the date of such redemption. Bonds in full. 7.5 Any redemption of the Bonds under this Clause 7 6.2 On each Repayment Date, the Company shall shall be made together with accrued and unpaid pay the Annual Minimum Repayment in respect interest (less any tax required by law to be deducted of that Repayment Date, which shall be due to or withheld from such payment) accrued on the the Bondholders pro-rata in accordance with relevant Bonds up to (and including) the date of the number of Bonds which they hold on that such repayment by the Company. Repayment Date. 6.3 If the Company fails to pay any principal amount 8 CANCELLATION on any Repayment Date (other than the Final Repayment Date) in accordance with this All Bonds redeemed, repaid, prepaid or purchased by instrument, such principal amount shall be payable the Company shall be cancelled and the Company shall as soon as the Company has cash available to not reissue the same. make such payment and interest shall accrue at the Default Interest Rate on the unpaid principal amount 9 PAYMENT OF INTEREST from the due date until the date of payment in accordance with clause 9.3. 9.1 Until the Bonds are repaid, interest on the principal amount of the Bonds outstanding from time to 6.4 The Company may at its absolute discretion, at any time shall accrue at the Interest Rate which shall be time following the death, critical illness or other payable in arrears on each Repayment Date. exceptional circumstances of any Bondholder, redeem the whole or part of the Bonds held by such 9.2 The Company shall pay accrued interest due to Bondholder. persons who were registered as Bondholders at the close of business on the Repayment Date in cash in 6.5 Any repayments made under this clause shall reduce arrears to the Client Money Account. the amount of principal outstanding in respect of the Bonds. 9.3 If the Company fails to pay any interest or the principal amount on any Bond when such amount is 6.6 Any redemption of the Bonds under this clause 6 due, interest shall accrue at the Default Interest Rate shall be made, together with accrued and unpaid on the unpaid amount from the due date until the interest (less any tax required by law to be deducted date of payment.

31 the wind of change for Coigach 9.4 Interest shall be calculated on the basis of the actual be available to the Bondholder on the Triodos number of days elapsed in the relevant period and a Crowdfunding Website. 365 day year. 9.5 Interest on any Bonds repaid by the Company in 12 REGISTER accordance with this instrument shall cease to 12.1 Each Bondholder acknowledges to the Company accrue as from the date of such repayment. that the Registrar will maintain an electronic Register which shall contain the following details: 10 UNDERTAKINGS 12.1.1 the names and addresses of the Bondholders 10.1 For such time as any principal or interest remains for the time being; outstanding to be repaid or paid (as the case may 12.1.2 the principal amount of the Bonds held by be) in respect of any Bonds, the Company shall not: each Bondholder; 10.1.1 create, or permit to subsist, any Security on or 12.1.3 the date of issue of each Bond; and over any of its assets other than the Security created pursuant to the Debenture and the 12.1.4 all transfers and changes of ownership of the Standard Security; or Bonds. 10.1.2 sell, transfer or otherwise dispose of any of its 12.2 Subject to the Registrar properly and accurately assets on terms whereby such assets are or maintaining such a register, the Company shall may be leased to or re-acquired or acquired recognise as absolute owner the registered holder of by it; or any Bonds. Neither the Company nor the Registrar shall (except as ordered by a court of competent 10.1.3 sell, transfer or otherwise dispose of any of its jurisdiction) be bound to take notice or see to the receivables on recourse terms; or execution of any trust (whether express, implied or 10.1.4 enter into any arrangement under which constructive) to which any Bonds may be subject. money or the benefit of a bank or other The receipt into the Client Money Account for the account may be applied, set-off or made principal payable in respect of such Bonds and subject to a combination of accounts; or for the interest from time to time accruing due 10.1.5 enter into any other preferential arrangement in respect of such Bonds or for any other moneys having a similar effect; and/or payable in respect of such Bonds shall be a good discharge by the Company notwithstanding any 10.1.6 incur or permit to subsist, any obligation for notice it or the Registrar may have (whether express Borrowed Money, other than pursuant to this or otherwise) of the right, title, interest or claim of instrument. any other person to or in such Bonds, interest or moneys. Neither the Company nor the Registrar shall 11 CERTIFICATES be bound to enter any notice of any express, implied or constructive trust on the Register in respect of any 11.1 The Company shall ensure that each certificate for Bonds. Bonds shall be in electronic form only and: 12.3 Neither the Company nor the Registrar shall be 11.1.1 bear a denoting number; bound to register more than one person as the 11.1.2 be issued to a Bondholder in the form (or holder of any Bonds. substantially in the form) set out in Part 1 of 12.4 A change of address or other details can be made by the Schedule; and any Bondholder through the Triodos Crowdfunding 11.1.3 be made available on the Triodos Website. A change of name by any Bondholder Crowdfunding Website. shall be notified to the Company and the Registrar through the Triodos Crowdfunding Website. 11.2 Each Bondholder shall be entitled access to a certificate for the Bonds registered in his name 12.5 No person may be registered as a holder of Bonds which shall be available to the Bondholder on the (including on a transfer of Bonds) unless they are Triodos Crowdfunding Website. registered with the Triodos Crowdfunding Website. 11.3 When a Bondholder transfers or redeems part only 12.6 Each of the Company and the Bondholders of his Bonds, other than as a result of repayments acknowledges and accepts that the Registrar shall of principal, the old certificate shall be cancelled act as agent for the Bondholders and facilitator in and a new certificate for the balance of such respect of the Bonds. Bonds shall be issued without charge and shall

32 13 DEFAULT 14 ACCELERATION

13.1 The following are Events of Default: If, at any time and for any reason, any Event of Default has occurred, the Bondholders may by Special 13.1.1 Non-payment: save as set out in clause 13.2, Resolution at any time while such Event of Default the Company fails to pay in cash in cleared remains unremedied and has not been waived by a funds, any principal and/or interest on any Special Resolution, direct that the principal amount of the Bonds within 10 Business Days of the of all Bonds, all unpaid accrued interest and any other Repayment Date upon which the same is due sums then payable on such Bonds shall become due and payable. and payable immediately. If the Bondholders give such 13.1.2 Insolvency: the Company is (or is, or could a direction under this clause, then the principal amount be, deemed by law or a court to be) insolvent of all Bonds, all unpaid accrued interest and any other or unable to pay its debts (as defined in sum then payable on such Bonds (in each case less any section 123 of the Insolvency Act 1986). applicable taxes) shall be immediately due and payable 13.1.3 Winding-up: save as set out in clause 13.3, by the Company and the Company shall immediately the Company takes any corporate action pay or repay such amounts to the Bondholders. or other steps are taken or legal or other proceedings are started for its winding-up, 15 MEETINGS OF BONDHOLDERS dissolution or re-organisation (other than for the purposes of a bona fide, solvent scheme The provisions for meetings of the Bondholders set of reconstruction or amalgamation) or for out in Part 3 of the Schedule shall be deemed to be the appointment of a receiver, administrator, incorporated in this instrument and shall be binding on administrative receiver, liquidator, trustee or the Company and the Bondholders and on all persons similar officer of it or of any or all of its assets;. claiming through or under them respectively. 13.1.4 Analogous proceedings: save as set out in clause 13.3, anything analogous to or having 16 TRANSFER OF BONDS a substantially similar effect to any of the events specified in clause 13.1.2 to clause 16.1 The Bonds are transferable by instrument in writing 13.1.3 inclusive shall occur under the laws of in the usual common form (or in such other form any applicable jurisdiction. as the Registrar may approve) in amounts and multiples of £100. There shall not be included in 13.1.5 Encumbrance enforceable: any any instrument of transfer any Bonds other than the encumbrance on or over the assets of the Bonds constituted by this instrument. Company is enforced. 16.2 Every instrument of transfer shall be duly signed by 13.1.6 Cessation of business: the Company ceases or on behalf of the transferor and the transferor shall to trade; and/or be deemed to remain the owner of the Bonds to be 13.1.7 Illegality: it is or becomes or will become transferred until the transferee’s name is entered in unlawful for the Company to perform or the Register in respect of such Bonds. comply with any of its material obligations 16.3 Every instrument of transfer shall be left for under this instrument, or any such material registration with the Registrar, together with such obligation is not or ceases to be a legal, valid other evidence as the Registrar may require to prove and binding obligation of the Company the title of the transferor or his right to transfer the under this instrument. Bonds and, if the instrument of transfer is executed 13.2 No Event of Default shall occur under clause 13.1.1 by some other person on his behalf, the authority where the failure to make the payment is caused of that person to do so. All instruments of transfer solely by an administrative error where such which are registered shall be retained by the administrative error has been remedied within 10 Registrar. Business Days of first receipt by the Company of 16.4 No fee shall be charged by the Company for the notice of that administrative error. registration of any transfer or for the registration of 13.3 No Event of Default shall occur under clause 13.1.3 any confirmation, probate, letters of administration, and/or clause 13.1.4 where any winding-up or other certificate of marriage or death, power of attorney or petition is frivolous or vexatious and is discharged, other document relating to or affecting the title to stayed or dismissed within 10 Business Days of any Bonds. commencement.

33 the wind of change for Coigach 17 TRANSMISSION OF BONDS 21 NOTICE TO BONDHOLDERS

17.1 The executors or administrators of a deceased Any notice or other document may be given or sent to Bondholder (not being one of several joint any Bondholder by sending the same by email to the registered holders) and in the case of the death of email address of the Bondholder as currently held by the one or more of several joint registered holders the Registrar. Notice may be given to the persons entitled survivor or survivors of such joint registered holders, to any Bonds as a result of the death, sequestration, or shall be the only person(s) recognised by the bankruptcy of any Bondholder by giving notice in the Company or the Registrar as having any title to such manner in which it would have been given if the death, Bonds. sequestration or bankruptcy had not occurred. 17.2 Any person who becomes entitled to any of the Bonds as a result of the death, sequestration or 22 NOTICE TO THE COMPANY bankruptcy of any Bondholder, or of any other Any notice or other document may be given or sent event giving rise to the transmission of such Bonds to the Company either by sending the same by post in by operation of law may, upon producing such a prepaid, first-class letter addressed to the Company evidence of the entitlement or capacity in respect at its registered office address from time to time (or of which he proposes to act or of his title as the such other address that the Company notifies to the Company or the Registrar shall think sufficient, be Bondholders in writing for such purposes). registered himself as the holder of such Bonds or, may transfer such Bonds. 23 SECURITY AND SECURITY TRUSTEE 18 REPORTING 23.1 The Company’s obligation in respect of the Bonds The Company shall send to the Registrar (who will shall be secured by the Debenture and the Standard make the same available to Bondholders on the Security. Triodos Crowdfunding Website) in each year until 23.2 The Security referred to in clause 23.1 shall be the Final Repayment Date a copy of the Company’s granted to the Security Trustee, as security trustee audited accounts, within 9 months after the end of the for the Bondholders. The Security Trustee shall Company’s financial year to which the same relate. be entitled to rely on the instructions of a Special Resolution of the Bondholders in relation to all 19 ENFORCEMENT matters arising in connection with the Debenture and/or the Standard Security. 19.1 From and after the date of this instrument and so long as any amount is payable by the Company in 23.3 Each Bondholder appoints (and the Security Trustee respect of the Bonds, the Company undertakes that and the Company acknowledges the appointment it shall duly perform and observe the obligations on of) the Security Trustee to act as its trustee in its part contained in this instrument. relation to the Trust Property and authorises the Security Trustee to hold such Trust Property on trust 19.2 The Bonds shall be held subject to and with for it on the terms and conditions contained in this the benefit of the provisions of this instrument, clause 23 and Part 4 of the Schedule. and the Schedule (all of which shall be deemed to be incorporated in this instrument). All such 23.4 The Security Trustee shall hold the Trust Property provisions shall be binding on the Company and upon trust for the Bondholders from time to time the Bondholders and all persons claiming through and the obligations, rights and benefits vested or to or under them respectively, and shall endure for the be vested in the Security Trustee by the Debenture benefit of all Bondholders. and the Standard Security or any document entered into pursuant to the Debenture and/or Standard Security shall (as well before as after enforcement) 20 MODIFICATION be performed and (as the case may be) exercised in The provisions of this instrument and the rights of accordance with the provisions of this instrument. the Bondholders may from time to time be modified, 23.5 The Security Trustee shall have only those duties, abrogated or compromised (including in any manner set obligations and responsibilities expressly specified in out in paragraph 16.1 of Part 3 of the Schedule) with the this instrument. consent of the Company and the sanction of a Special Resolution. 23.6 The Bondholders shall not have any independent power to enforce or have recourse to the Debenture and/or Standard Security or to exercise any rights or

34 powers pursuant to the Debenture and/or Standard Subscribed for and on behalf of Security except through the Security Trustee. COIGACH COMMUNITY C.I.C

24 COUNTERPARTS by *Authorised Signatory/Director/Company Secretary 24.1 This instrument may be executed in any number of Full Name of Signatory (Please Print) counterparts and by each of the parties on separate counterparts.

24.2 Where executed in counterparts: at

24.2.1 this instrument will not take effect until each on of the counterparts has been delivered; before 24.2.2 each counterpart will be held as undelivered until the parties agree a date on which the Witness (Signature) counterparts are to be treated as delivered; and Witness Name (Please Print) 24.2.3 the date of delivery may be inserted in the testing clause in the blank provided for the delivery date. Witness Address

25 GOVERNING LAW AND JURISDICTION

25.1 This instrument and the Bonds and any dispute or claim arising out of or in connection with any of them or their subject matter or formation (including non-contractual disputes or claims) shall be governed by, and construed in accordance with, the *Please delete as applicable law of Scotland. 25.2 The courts of Scotland shall have exclusive Subscribed for and on behalf of jurisdiction to settle any dispute or claim arising out TRIODOS CORPORATE OFFICER LIMITED of or in connection with this instrument or any Bond by *Authorised Signatory/Director/Company or their subject matter or formation (including non- Secretary contractual disputes or claims). Full Name of Signatory (Please Print) IN WITNESS WHEREOF: these presents, consisting of this and preceding [ ] pages together with the schedule annexed hereto, are subscribed as at follows, with a delivery date of 2018: on

before Witness (Signature)

Witness Name (Please Print)

Witness Address

*Please delete as applicable

35 the wind of change for Coigach This is the schedule referred to in the foregoing Subscribed for and on behalf of instrument between Coigach Community C.I.C and COIGACH COMMUNITY C.I.C Triodos Corporate Officer Limited by *Authorised Signatory/Director/Company Secretary PART 1 Full Name of Signatory (Please Print)

FORM OF BOND CERTIFICATE at Certificate No. [NUMBER] on Date of Issue [DATE] before Amount £ [AMOUNT] Witness (Signature) Coigach Community C.I.C £1,750,000 5% INDEX-LINKED Witness Name (Please Print) SECURED BONDS 2030

Witness Address Created and issued pursuant to a resolution of the board of directors of the Company passed on 28 February 2018.

THIS IS TO CERTIFY THAT [NAME OF BONDHOLDER] is the registered holder of £[AMOUNT] (subject to repayment or prepayment in accordance with the instrument) of the £1,750,000 5% index-linked *Please delete as applicable secured bonds 2030 constituted by an instrument entered into by the Company on ______2018 (Instrument). Such Bonds are issued with the benefit of and subject to the provisions contained in PART 2 the Instrument.

1 This Certificate must be surrendered before any REPAYMENT AMOUNTS transfer, whether of the whole or any part of the Bonds comprised in it, can be registered or any new certificate issued in exchange. Repayment Date Minimum Annual Principal Repayment 2 The Bonds and any dispute or claim arising out of or in connection with any of them or their 31 March 2019 £0 subject matter or formation (including non- 31 March 2020 £0 contractual disputes or claims) shall be governed by, and construed in accordance with, the law of 31 March 2021 £100,000 Scotland. 31 March 2022 £100,000 3 The courts of Scotland shall have exclusive 31 March 2023 £100,000 jurisdiction to settle any dispute or claim arising out of or in connection with the Bonds or their 31 March 2024 £100,000 subject matter or formation (including non- 31 March 2025 £100,000 contractual disputes or claims). 31 March 2026 £250,000 31 March 2027 £250,000 31 March 2028 £250,000 31 March 2029 £250,000 31 March 2030 £250,000

36 PART 3 3 CHAIRPERSON OF MEETINGS A person nominated by the Company shall be entitled PROVISIONS FOR MEETINGS OF BONDHOLDERS to take the chair at any such meeting and if no such nomination is made, or if at any meeting the person nominated shall not be present within 15 minutes 1 CALLING OF MEETINGS after the time appointed for holding the meeting, the Bondholders present shall choose one of their number 1.1 A meeting of the Bondholders may be called by: to be Chairperson. The Directors and the secretary and 1.1.1 the Company; or legal advisers of the Company and any other person authorised in that behalf by the Directors may attend at 1.1.2 the Company at the request of any registered any such meeting. holder of not less than 20% of the Bonds for the time being outstanding; or 4 QUORUM AT MEETINGS 1.1.3 the Company at the request of registered holders of the Bonds who together hold At any such meeting convened for any purpose, other between them not less than 20% of the Bonds than the passing of a Special Resolution, a person or for the time being outstanding. persons holding or representing by proxy one-tenth in nominal value of the Bonds for the time being 1.2 The person convening any meeting of the outstanding shall form a quorum for the transaction Bondholders shall determine the place and time that of business. At any meeting convened for the purpose the meeting shall be held. of passing a Special Resolution, persons (at least two 1.3 Any meeting of the Bondholders requested by in number) holding or representing by proxy a clear a Bondholder or Bondholders together under majority in nominal value of the Bonds for the time paragraph 1.1.2 above, shall only be convened by being outstanding shall form a quorum. No business the Company if and to the extent such meeting is (other than the choosing of a Chairperson) shall be expressly provided for under this instrument under: transacted at any meeting unless the requisite quorum is present at the commencement of the meeting. 1.3.1 clause 14;

1.3.2 clause 20; and 5 ABSENCE OF QUORUM 1.3.3 paragraph 16.1 of Part 3 of the Schedule. If within 30 minutes from the time appointed for any 1.4 The Company may make whatever arrangements meeting of the Bondholders a quorum is not present they consider appropriate to enable those attending the meeting shall, if convened upon the requisition of a meeting of the Bondholders to exercise their rights the Bondholders, be dissolved. In any other case it shall to speak or vote at it (including, for the avoidance of stand adjourned to such day and time (being not less doubt, electronic arrangements). than 10 Business Days and not more than 30 Business Days thereafter) and to such place as may be appointed 1.5 In determining attendance at a Bondholder by the Chairperson and at such adjourned meeting two meeting it is immaterial whether any two or more Bondholders present in person or by proxy and entitled Bondholders attending it are in the same place as to vote, whatever the principal amount of the Bonds each other. held by them, shall form a quorum.

2 NOTICE OF MEETINGS 6 ADJOURNMENT OF MEETINGS At least 10 Business Days’ notice specifying the place, day and hour of the meeting shall be given by the The Chairperson may with the consent of (and shall if person convening the meeting to the Bondholders in directed by) any such meeting adjourn the same from the manner provided in Part 3 of the Schedule. Any such time to time and from place to place. No business shall notice shall specify the general nature of the business be transacted at any adjourned meeting other than to be transacted at the meeting thereby convened business that might lawfully have been transacted at the but, except in the case of a resolution to be proposed meeting from which the adjournment took place. as a Special Resolution, it shall not be necessary to specify the terms of any resolutions to be proposed. 7 NOTICE OF ADJOURNED MEETINGS The omission to give notice to any Bondholder shall not invalidate any resolution passed at any such meeting. Notice of any adjourned meeting at which a Special Resolution is to be submitted shall be given in the manner provided for in this instrument. Such notice

37 the wind of change for Coigach shall state that two Bondholders present in person or 14 DEPOSIT OF INSTRUMENT APPOINTING PROXY by proxy and entitled to vote at the adjourned meeting whatever the principal amount of the Bonds held by The instrument appointing a proxy and the power of them shall form a quorum. attorney or other authority (if any) under which it is signed or a notarially certified or official copy register of such power or authority shall be deposited with 8 RESOLUTION ON SHOW OF HANDS the Company at its registered office or at such other Every question submitted to a meeting of Bondholders place as may be specified in the notice convening the shall be decided in the first instance by a show of hands. meeting before the time appointed for holding the In case of an equality of votes the Chairperson shall not meeting or adjourned meeting or the taking of a poll at have a casting vote. which the person named in such instrument proposes to vote and in default the instrument of proxy shall not be treated as valid. A vote given in accordance with the 9 DEMAND FOR POLL terms of an instrument appointing a proxy shall be valid At any meeting of Bondholders, unless (before or on notwithstanding the previous death or insanity of the the declaration of the result of the show of hands) a principal or revocation of the instrument of proxy or poll is demanded by the Chairperson or by one or more of the authority under which the instrument of proxy Bondholders present in person or by proxy, a declaration is given or transfer of the Bonds in respect of which it by the Chairperson that a resolution has been carried or is given unless previous intimation in writing of such carried by a particular majority or lost or not carried by death, insanity, revocation or transfer shall have been any particular majority shall be conclusive evidence of received by the Company at its registered office. No the fact. instrument appointing a proxy shall be valid after the expiration of 12 months from the date named in it as the date of its execution. 10 MANNER OF TAKING POLL

If at any such meeting a poll is so demanded it shall be 15 VOTES taken in such manner as the Chairperson may direct. The result of such poll shall be deemed to be the resolution On a show of hands every Bondholder who (being an of the meeting at which the poll was demanded. The individual) is present in person or by proxy or (being a demand for a poll may be withdrawn. corporation) is present by a representative (not being himself a Bondholder) or by proxy shall have one vote (provided that a proxy appointed by more than one 11 TIME FOR TAKING POLL member should only have one vote or, where the proxy has been instructed by one or more of those members Any poll demanded at any such meeting shall be taken to vote for the resolution and by one or more other of at the meeting without adjournment. The demand for a those members to vote against it, such proxy shall have poll shall not prevent the continuance of a meeting for one vote for and one vote against the resolution). On the transaction of any business other than the question a poll every Bondholder shall have one vote for every on which the poll has been demanded. £1 in nominal amount of the Bonds of which he is the holder. A Bondholder (or a proxy or representative of a 12 PERSONS ENTITLED TO VOTE Bondholder) entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses in The registered holders of any of the Bonds shall be entitled the same way. to vote in respect thereof either in person or by proxy.

16 POWER OF MEETINGS OF BONDHOLDERS 13 INSTRUMENT APPOINTING PROXY 16.1 In addition to any other powers it may have, a Every instrument appointing a proxy shall be in writing, meeting of the Bondholders may, by Special signed by the appointor or his attorney or, in the case of Resolution: a corporation, under its common seal, or signed by its attorney or a duly authorised officer and shall be in such 16.1.1 sanction any compromise or arrangement form as the Directors may approve. Such instrument proposed to be made between the Company of proxy shall, unless the contrary is stated thereon, and the Bondholders; be valid both for an adjournment of the meeting and 16.1.2 sanction any abrogation, modification or for the meeting to which it relates and need not be compromise or any arrangement in respect witnessed. A person appointed to act as a proxy need of the rights of the Bondholders against not be a Bondholder. the Company or its property whether such

38 rights shall arise under this instrument or Resolution. Such resolution in writing may be contained otherwise; in one document or in several documents in like form each signed by one or more of the Bondholders. 16.1.3 sanction any scheme for the reconstruction of the Company or for the amalgamation of the Company with any other company; 19 MINUTES OF MEETINGS

16.1.4 sanction any scheme or proposal for the Minutes of all resolutions and proceedings at every sale or exchange of the Bonds for, or the such meeting of the Bondholders shall be made and conversion of the Bonds into, cash or shares, duly entered in books to be from time to time provided stock, debentures, debenture stock or other for that purpose by the Company. Any minutes which obligations or securities of the Company or purport to be signed by the Chairperson of the meeting any other company formed or to be formed, at which such resolutions were passed or proceedings and for the appointment of a person with held or by the Chairperson of the next succeeding power on behalf of the Bondholders to meeting of the Bondholders shall be conclusive execute an instrument of transfer of the evidence of the matters contained in such minutes. Bonds held by them in favour of the person Unless the contrary is proved, every such meeting in to or with whom the Bonds are to be sold or respect of the proceedings of which minutes have been exchanged (as the case may be); made shall be deemed to have been duly convened and 16.1.5 assent to any modification or abrogation of held and all resolutions passed at such meetings to have the provisions contained in this instrument been duly passed. that shall be proposed by the Company and authorise the Company to execute an instrument supplemental to this instrument PART 4 embodying any such modification or abrogation; and SECURITY TRUSTEE 16.1.6 give any authority or sanction which under the provisions of this instrument is required 1 DEFAULT PROCEDURE to be given by Special Resolution. 1.1 If at any time there is an Event of Default any 16.2 No resolution that would increase any obligation of Bondholder may notify the Security Trustee of that the Company under this instrument or change the fact, specifying the nature of the Event of Default, due date for payment of any principal or interest whereupon the Security Trustee shall notify each of in respect of any Bond without the consent of the the Bondholders thereof and shall consult with the Company shall be effective. Bondholders with a view to determining the action to be taken in relation to such Event of Default. 17 SPECIAL RESOLUTION BINDING ON ALL 1.2 At any time following the occurrence of an Event BONDHOLDERS of Default the Security Trustee shall, if instructed by Special Resolution to do so, declare the security A Special Resolution, passed at a meeting of constituted by the Debenture and the Standard Bondholders duly convened and held in accordance Security to be enforceable and the Security Trustee with the provisions of this schedule, shall be binding shall take reasonable steps to enforce such security. on all the Bondholders whether or not present at such meeting and each of the Bondholders shall be bound to give effect to such Special Resolution accordingly. 2 APPLICATION OF PAYMENTS The passing of any such resolution shall be conclusive All monies from time to time received or recovered by evidence that the circumstances justify the passing of the Security Trustee in connection with the realisation such Special Resolution. of all or any part of the Security shall be held by the Security Trustee on trust to apply them as between the 18 RESOLUTIONS IN WRITING Bondholders in the following order of priority:

A resolution in writing signed by the holders of at 2.1 first in payment of any fees, costs and expenses least 75% in nominal value of the Bonds for the reasonably and properly incurred by the Security time being outstanding who are for the time being Trustee; entitled to receive notice of meetings in accordance 2.2 second in payment of any amounts due to the with the provisions contained in this instrument shall Bondholders under this instrument; and for all purposes be as valid and effectual as a Special

39 the wind of change for Coigach 2.3 third any balance shall be paid to the Company or by the Security Trustee or by the Bondholders) other person entitled thereto. whose advice or services may at any time seem necessary, expedient or desirable; 3 SECURITY TRUSTEE’S ACTIONS 3.3.3 rely upon any communication or document believed by it to be genuine and, as to any 3.1 Security Trustee’s Instructions matters of fact which might reasonably The Security Trustee shall, except as otherwise provided, be expected to be within the knowledge act in accordance with any instructions given to it by of a Bondholder or the Company, upon a a Special Resolution of the Bondholders and shall be certificate signed by or on behalf of that entitled to assume that: person; and 3.1.1 any instructions received by it from a 3.3.4 refrain from acting in accordance with Bondholder are duly given by or on behalf the instructions of one or all of the of all of the Bondholders following a Special Bondholders (including bringing any legal Resolution; and action or proceeding arising out of or in connection with the Debenture and/or 3.1.2 unless it has received actual notice of Standard Security) until it has received such revocation, that any instructions or directions indemnification and/or security as it may in given by a Bondholder have not been its absolute discretion require (whether by revoked by the Bondholders by Special way of payment in advance or otherwise) for Resolution. all costs, losses and liabilities which it may 3.2 Security Trustee’s Actions incur in bringing such action or proceedings. Subject to the provisions of this paragraph: 4 SECURITY TRUSTEE’S OBLIGATIONS 3.2.1 the Security Trustee may, in the absence of any instructions to the contrary, take such The Security Trustee shall promptly inform the action in the exercise of any of its duties Bondholders of: under the Debenture and/or Standard 4.1 the contents of any notice or document received Security which in its absolute discretion it by it in its capacity as Security Trustee from the considers to be for the protection and benefit Company under this instrument, the Debenture and/ of all the Bondholders; and or the Standard Security; and 3.2.2 at any time after receipt by the Security Trustee of notice from a Special Resolution 4.2 the occurrence of any Event of Default or any default of the Bondholders directing the Security by the Company in the due performance of or Trustee to exercise all or any of its rights, compliance with its obligations under this instrument, remedies, powers or discretions under the the Debenture and/or the Standard Security of which Debenture and/or the Standard Security, the the Security Trustee has received notice. Security Trustee may, and shall if so directed by a Special Resolution of the Bondholders, 5 EXCLUDED OBLIGATIONS take such action as in its sole discretion it thinks fit to enforce the Debenture and/or Notwithstanding anything to the contrary expressed or the Standard Security. implied in this instrument, the Debenture and/or the Standard Security, the Security Trustee shall not: 3.3 Security Trustee’s Discretions 5.1 be bound to enquire as to (a) the occurrence The Security Trustee may: or otherwise of any Event of Default or (b) the 3.3.1 assume unless it has, in its capacity as performance, default or any breach by the Company Security Trustee for the Bondholders, of its obligations under this instrument; received actual notice to the contrary that (a) 5.2 be bound to account to any Bondholder for any sum no Event of Default has occurred and (b) any or the profit element of any sum received by it for its right, power, authority or discretion vested by own account; the Debenture and/or the Standard Security in any person has not been exercised; 5.3 be bound to disclose to any other person (including any Bondholder) (a) any confidential information 3.3.2 engage, pay for and rely on the advice or (b) any other information if disclosure would or or services of any lawyers, accountants, might in its reasonable opinion constitute a breach surveyors or other experts (whether obtained of any law or by a breach of fiduciary duty;

40 5.4 be under any obligations other than those which 8 NO RESPONSIBILITY TO PERFECT SECURITY are specifically provided for in this instrument, the Debenture and/or the Standard Security; or The Security Trustee shall not be liable for any failure to: 5.5 have or be deemed to have any duty, obligation or 8.1 require the deposit with it of any instrument or responsibility to, or relationship of trust or agency document certifying, representing or constituting with, the Company. the title of the Company to the Trust Property; 8.2 obtain any licence, consent or other authority for the 6 EXCLUSION OF SECURITY TRUSTEE’S LIABILITY execution, delivery, legality, validity, enforceability or admissibility in evidence of any of this instrument or The Security Trustee shall not accept responsibility or be the Debenture and/or the Standard Security; liable for: 8.3 register, file or record or otherwise protect any of 6.1 the adequacy, accuracy and/or completeness of any the security (or the priority of any of the security) information supplied by the Security Trustee or any created by the Debenture and/or the Standard other person in connection with this instrument, Security under any applicable laws in any jurisdiction the Debenture and/or the Standard Security or the or to give notice to any person of the execution transactions contemplated in them, or any other of this instrument, or the Debenture and/or the instrument, arrangement or document entered into, Standard Security; made or executed in anticipation or, pursuant to or in connection with them; 8.4 take, or to require any of the Company to take, any steps to perfect its title to any of the Trust Property 6.2 the legality, validity, effectiveness, adequacy or or to render the security created by the Debenture enforceability of this instrument, the Debenture and/or the Standard Security effective or to secure and/or the Standard Security or the security created the creation of any ancillary security interest under by the Debenture and/or the Standard Security or the laws of any jurisdiction; or any other instrument, arrangement or document entered into, made or executed in anticipation of, 8.5 require any further assurances in relation to this pursuant to or in connection with them; instrument, the Debenture and/or the Standard Security. 6.3 any losses to any person or any liability arising as a result of taking or refraining from taking any action 9 INSURANCE BY SECURITY TRUSTEE in relation to any of this instrument, the Debenture and/or the Standard Security or otherwise, whether The Security Trustee shall not be under any obligation in accordance with an instruction from a Special to insure any of the Trust Property, to require any other Resolution of the Bondholders or otherwise; person to maintain any insurance or to verify any 6.4 the exercise of, or the failure to exercise, any obligation to arrange or maintain insurance. The Security judgment, discretion or power given to it by or Trustee shall not be responsible for any loss which may in connection with any of this instrument, the be suffered by any person as a result of the lack of or Debenture and/or the Standard Security, the inadequacy of any such insurance. Where the Security security created by the Debenture, the Standard Trustee is named on any insurance policy as an insured Security and/or any other instrument, arrangement party, it shall not be responsible for any loss which may or document entered into, made or executed in be suffered by reason of, directly or indirectly, its failure to anticipation of, pursuant to or in connection with the notify the insurers of any material fact relating to the risk them; or assumed by such insurers or any other information of any kind. 6.5 any shortfall which arises on the enforcement of the Debenture and/or the Standard Security. 10 CUSTODIANS AND NOMINEES

7 OWN RESPONSIBILITY The Security Trustee may appoint and pay any person to act as a custodian or nominee on any terms in relation It is understood and agreed by each Bondholder that at to any assets of the trust as the Security Trustee may all times that the Bondholders have themselves been, determine, including for the purpose of depositing with and will continue to be, solely responsible for making its a custodian this instrument or any document relating to own independent appraisal of and investigation into all the trust created under this instrument and the Security risks arising under or in connection with this instrument, Trustee shall not be responsible for any loss, liability, the Debenture and/or the Standard Security. expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part

41 the wind of change for Coigach of any person appointed by it under this instrument or be Trustee under the Debenture and the Standard Security, at bound to supervise the proceedings or acts of any person. which time each of the Security Trustee, the Bondholders and the Company shall be released from its obligations 11 REFRAIN FROM ILLEGALITY under this Part 4 of the Schedule (save for those which arose prior to such winding-up). The Security Trustee may refrain from doing anything which in its opinion will or may be contrary to any 16 REPLACEMENT OF SECURITY TRUSTEE relevant law, directive or regulation of any jurisdiction which would or might otherwise render it liable to any 16.1 Resignation of Security Trustee person, and the Security Trustee may do anything which The Security Trustee may resign at any time by is, in its opinion, necessary to comply with any such law, giving at least 30 days’ notice (or such shorter period directive or regulation. as the Company and the Security Trustee may agree) to that effect to: 12 POWERS SUPPLEMENTAL 16.1.1 each Bondholder; and The rights, powers and discretions conferred upon the 16.1.2 the Company. Security Trustee by this instrument shall be supplemental to those vested in the Security Trustee by general law or 16.2 Effect of resignation or removal otherwise. Upon the resignation or removal of the Security Trustee pursuant to clauses 16.1 the Security Trustee is 13 FEES COSTS AND EXPENSES released from any further obligations as trustee of the Trust Property under this document, but such release 13.1 Unless otherwise agreed by the Company and the does not prejudice any liability in respect of any Security Trustee, no retainer fee shall be payable by default arising before the termination of appointment. the Company to the Security Trustee in relation to its appointment as security trustee. 16.3 Assurances 13.2 The Company shall reimburse the Security Trustee Notwithstanding paragraph 16.1 no resignation or on demand for such fees, costs and expenses in removal of the Security Trustee takes effect unless: respect of any third party(ies) reasonably and 16.3.1 a successor Security Trustee has been properly suffered or incurred by the Security Trustee appointed in accordance with clause 16.4.1; in the performance of its obligations and provision and of its services pursuant to this instrument. 16.3.2 the successor Security Trustee undertakes 14 RELEASE to act as trustee of the Trust Property and be bound in that capacity by the terms of Upon a disposal of any of the Trust Property: this document and each other document to which the Security Trustee is a party. 14.1 pursuant to the enforcement of the security under the Debenture and/or the Standard Security; or 16.4 Appointment of successor Security Trustee 14.2 if such disposal is permitted under this instrument, 16.4.1 If the Security Trustee resigns, the Company the Debenture and/or the Standard Security, may appoint a successor Security Trustee. the Security Trustee shall (at the cost of the 16.4.2 If no successor Security Trustee is so Company) release that property from the security appointed or accepts the appointment and is authorised to execute, without the need for within 30 days after: any further authority from the Bondholders, any 16.4.2.1 notice of resignation or removal is release of the security or other claim over that asset. given in accordance with paragraph 16.1; or 15 WINDING-UP OF TRUST 16.4.2.2 the Security Trustee’s appointment is If the Security Trust, with the approval of a Special otherwise terminated, Resolution of the Bondholders, determines that all of the the Security Trustee may, on behalf of the obligations secured by the Debenture and the Standard Bondholders, appoint a successor Security Trustee Security have been fully and finally discharged the Security who is solvent and reputable and on such terms Trustee shall release, without recourse or warranty, all of and conditions as to fees and other terms as the the security then held by it and the rights of the Security terminated Security Trustee thinks fit.

42 Community sustainability in a world class environment…

Photographs

Copyright © remains with the photographer unless stated otherwise: Main front cover image From the hill – © Evelyn Scott. Small front cover pg 2 Sunset – © Iain Muir, Coigach turbine – © Malcolm McCurrach images: Kids hill race at The Gathering – © Julia Campbell, Coigach (www.nwimages.co.uk); pg 3 From Polbain – © Iain Muir; pg 4 Met mast turbine – © Malcolm McCurrach (www.nwimages.co.uk), Iain and volunteers – © Iain Muir; pg 9 Turbine – © Bernie McGee; pg 10 Coigach Alan beside the turbine shaft – © Julia Campbell, Pipe band at The turbine – © Malcolm McCurrach (www.nwimages.co.uk); pg 11 Susan Gathering © Julia Campbell; Badenscallie – © Bernie McGee, Community Hunter (Highlands Small Communities Housing Trust) and Sam Stewart skiff© Anne McGee. (Nationwide Foundation) at the schoolhouse – © Julia Campbell, Ben Mor Main back cover image and small turbine image © Malcolm Hydro – © Locogen Ltd; pg 12 Craning the turbine – © Iain Muir, Iain and McCurrach (www.nwimages.co.uk), other small back cover images Alan beside the turbine shaft – © Julia Campbell; pg13 Fishing boat – © Salt © Julia Campbell. Seafood Kitchen; Kids hill race at The Gathering – © Julia Campbell, Prawns – © Valerie Hodgkinson; pg 14/15 From the hill – © Evelyn Scott; pg 17 Dr Hamlet (Geopark Geologist) – © Julia Campbell, Ceilidh in the hall – © Julia Campbell, Coigach Community Hall – © Julia Campbell; pg 20 Turbine at night – © Anne McGee; pg 43 Northern lights– © Anne McGee.

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