EAM Solar

Legal Proceedings Report • Sep 25, 2015

EAM Solar ASA : Status of operations and litigations

EAM Solar ASA : Status of operations and litigations

Operations, reporting and shareholders meeting

All assets (25 PV power plants) are operating and delivering electricity to the

grid on a daily basis. 17 of the power plants are still not receiving FIT

payment from GSE for the electricity delivered to the GSE. At the end of

September 2015, GSE has an accumulated unpaid electricity bill of approximately

EUR 10m. A more detailed update on operational status will be given in the

Shareholders meeting the 8(th) of October and in the third quarter 2015 report.

The third quarter 2015 report will be released later than previously announced.

The announced date is 30 October 2015. The new reporting date will be 30

November 2015. The reason for postponing the report release is to await the

outcome of the criminal and administrative court proceedings that will take

place in October.

The Company will convene a shareholders meeting on Friday 9 October 2015 in

order to present current status, and for the Board and administration to be

available for questions and clarifications from the shareholders on the current

status of the company. The time and venue on the 9(th) of October will be

announced in a separate stock exchange notice.

Status of criminal proceedings against Aveleos directors and related parties

Reference is given to previous stock exchange notices and quarterly reports from

EAM Solar ASA.

Since the execution of the partial closing of the P31 acquisition the 15(th) of

July 2014, some of the Directors of Aveleos SA have been indicted by the

Prosecutors Office in Milan for several crimes against the State of Italy and

other parties. The Prosecutors Office's investigation was concluded in the first

quarter 2015, and at current the Criminal Court of Milan is conducting the

preliminary hearing in order to decide on approving the Prosecutors Office

request for a committal to trial.

Aveleos SA is a special purpose vehicle, established in 2010, owned by Enovos of

Luxembourg (59%) and Avelar Energy (41%), with the specific purpose to build for

sale PV power plants. Aveleos has no employees but is managed by a Board of

Directors consisting of 3 Enovos directors and 2 Avelar directors. The Enovos

directors since the inception of Aveleos SA has amongst other been Jean Lucius,

CEO of Enovos, and Michel Schaus, member of the Enovos Executive Board.

The preliminary hearing in the criminal proceedings started the 3(rd) of June

2015. On the 15(th) and 17(th) of September the preliminary hearings were

continued, and the preliminary conclusions from the hearing are as follows:

The judge of the preliminary hearing of the criminal proceedings against, inter

alia, the Aveleos' directors Marco Giorgi and Igor Akhmerov, has given EAM Solar

ASA and its daughter company EAM Solar Italy Holding S.r.l. the status of a

victim of fraud with reference to the crime of contractual fraud (as described

in point F of the Prosecutors Office of Milan's request for committal for

trial).

Mr Giorgi and Mr Akhmerov are accused of several crimes, including organised

crime, aggravated fraud aimed at obtaining public contributions, filing of fraud

declarations and contractual fraud against EAM.

In particular, under indictment point F, Marco Giorgi and Igor Akhmerov are

claimed to be responsible of collaborating with each other, as representatives

of Aveleos SA,, upon receiving the first instalment of the total payment of Euro

36.864.618 subject to the transfer of the shares of the companies that comprise

the P31 portfolio. Together they are accused of having procured an illegitimate

profit to Aveleos SA, equal to the value of the sales agreement, as they

deceived EAM by not disclosing to the latter the lack of the necessary

requirements in order to be granted with the incentive tariffs by the GSE and

therefore convinced EAM Solar Italy Holding and its holding company, EAM Solar

ASA, to make bank transfers with three different payments, in such a way causing

a serious economic damage to EAM Solar on 15 July 2014.

Furthermore, the judge of the preliminary hearing has allowed EAM to summon

Aveleos SA, Enovos Luxembourg SA and Avelar Energy Ltd as financially liable

parties for the economic damage suffered by EAM as a result of the fraud. The

judge rejected the objections of the companies summoned as financially liable,

which asked to be excluded from the criminal proceedings

The next preliminary hearing will be held on 20 October 2015. The judge will

most likely schedule another preliminary hearing before deciding on the request

for committal for trial of the defendants.

By obtaining the status as a victim of a fraud, EAM received the investigation

documentation from the Prosecutors Office. The documentation has enabled EAM to

prepare for the forthcoming legal measures, beyond the criminal case in Milan,

to be taken in order to seek compensation for the economic damages caused by the

fraud against EAM.

The next legal steps under criminal and civil law in Italy, Luxembourg and

Switzerland are now being prepared with EAM's advisors.

Status of the FIT suspension and administrative proceedings against GSE

Gestore Servizi Energetici ("GSE") has unilaterally suspended payments of their

electricity bills from 17 power plants since July 2014. During this period EAM

has challenged the payment suspension conducted by GSE in several administrative

court proceedings. On the 27(th) of January 2015 the State Council ruled, at

EAM's request in favour of EAM, that GSE had to make a decision on the validity

of the FIT contracts and decide on a final conclusion since the payment

suspension measure according to Italian law cannot be continued without a

definite timeline.

GSE has a triple role as both the administrative body responsible for

authorizing PV power plants, responsible for regulating operations and

controlling compliance of PV power plants, as well as being the commercial

customer of the purchase of electricity from the PV power plants.

In April the administrative court in Lazio (TAR) decided that the suspension

measure and the merits of the suspension would be subject to a court decision

the 9(th) of July for 7 of the 17 power plants.

Following this decision by the TAR, GSE issued a new suspension measure on the

30(th) of April with a 90 day finite timeline for a decision by GSE on the

validity of the FIT contracts for all 17 power plants.

In the first week of May GSE conducted physical inspections together with EAM

personnel of the 17 suspended power plants, and in addition GSE has received

information requested related to the construction and permitting of the PV power

plants in 2010 and 2011. Most of this material was previously received by GSE in

2010 and 2011.

On the 9(th) of July the administrative court (TAR) decided that since GSE had

conducted inspections and was in the process of concluding their internal

evaluation of the validity of the FIT with a definite deadline being the 29(th)

of July 2015, TAR ruled that GSE should  make their conclusion within the stated

deadline.

No decision has been taken by GSE within the deadline of the 29(th) of July and

GSE has not resumed payments of the FIT. Consequently, GSE is now in breach with

the order issued by the Administrative Court of Lazio (TAR).

Based on the lack of decision and breach of law by GSE, EAM has summoned GSE and

asked the administrative court to take urgent measures against GSE. The court

will likely decide on this issue on the 15(th) of October 2015.

In light of the breach of administrative law and breach of EAM's legal rights

conducted by GSE, and the administrative court rulings in favour of EAM, EAM

took the initiative to a meeting with the administration of GSE, represented its

President, Mr Sperandini, in order to see if a negotiated solution could be

found.

The meeting took place the 14(th) of September 2015 in Rome. Present in the

meeting were GSE, representatives from the ministry, EAM representatives and

also the Norwegian Ambassador to Italy, Mr Grydeland.

Although an amicable meeting, the meeting was inconclusive since GSE considers

itself incapable of performing its legal administrative obligations and make a

final decision on the validity of the FIT contracts for the suspended power

plants. Consequently, EAM is now forced to initiate the necessary legal action

in Italy, in the European Union and under the protection of the International

Energy Charter Treaty in international arbitration courts, in order to enforce

and protect the legal rights of EAM Solar ASA.

For further information, please contact:

Viktor E Jakobsen, Executive Director, phone +47 9161 1006, viktor@eam.no

Audun W. Iversen, CEO, phone +47 916 16 250, audun@eam.no

About EAM Solar: EAM Solar is a utility company that acquires and operates solar

power plants. The Company currently owns solar PV power plants in Italy. The

plants are operating under long-term sales contracts.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1954538]