EXHIBIT 10.3

 

 

Amendment and restatement of the

Aluminium  Project  Framework Shareholders Agreement

 

 

between

 

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

 

and

 

ALCOA INC (ALCOA)

 

 

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THIS AMENDMENT AND RESTATEMENT AGREEMENT (hereinafter referred to as the
"Agreement"),  is made and entered into on [          ] in the Hejerian
calendar, corresponding to the [          ] day of [          ] [          ] in
the Gregorian calendar, by and between:

 

(1)

SAUDI ARABIAN MINING COMPANY (MA'ADEN), a company organized under the laws and
regulations of the Kingdom of Saudi Arabia with commercial registration
No.1010164391, having its head office and address at PO Box 68861, Riyadh 11537,
Kingdom of Saudi Arabia (together with its legal successors and permitted
assigns, hereinafter referred to as "Ma'aden"); and

 

 

 

(2)

ALCOA INC., a corporation under the laws of the Commonwealth of Pennsylvania,
USA, whose principal place of business is at 390 Park Avenue, New York, NY 1022,
USA, (together with its legal successors and permitted assigns, hereinafter
referred to as "Alcoa"),

 

 

(hereinafter jointly referred to as the "Parties" or individually as a "Party").

 

RECITALS

 

 

A.

The Parties entered into the Original Agreement on 3/1/1431 H corresponding to
the 20th day of December 2009G pursuant to which the Parties desired to enter
into the Joint Venture in respect of the Project (as such terms are defined in
the Original Agreement)

 

 

B.

The Parties entered into a Signing Side Letter also on 3/1/1431 H corresponding
to the 20th day of December 2009G clarifying certain matters in the Original
Agreement

 

 

 

C.

The Original Agreement was amended by the parties in the First Supplemental
Agreement on 14/4/1431 H, corresponding to 30th March 2010 G

 

 

 

D.

The Parties wish to reflect certain further amendments that have been agreed
between them in relation to certain parts of the Original Agreement and have
agreed to amend and restate certain parts of the Original Agreement on the terms
set out in this Agreement as if such amendments had been included in the
Original Agreement as from the date of execution of this Agreement by the
Parties

 

 

NOW, IT IS  HEREBY AGREED  as follows:

 

1.DEFINITIONS AND INTERPRETATION

 

 

1.1

Definitions

 

In this Agreement:

 

"Original Agreement" means the Aluminium Project Framework Shareholders
Agreement that was entered into on on 3/1/1431 H corresponding to the 20th day
of December 2009G between the  Parties as amended by the Signing Side Letter of
even date (as such terms are defined in the Original Agreement).

 

"Entire Agreement" means the Original Agreement as modified by the Signing Side
Letter and the First Supplemental Agreement;

 

"First Supplemental Agreement" means the First Supplemental Agreement entered
into between the Parties  on 14/4/1431H, corresponding to 30th March 2010 G

 

"Parties" means the signatories to this Amendment and Restatement Agreement; and

 

 

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1.2

Incorporation  of  Definitions and Interpretation

 

Subject to clause 1.1, unless the context otherwise requires, words and
expressions defined and references contained in the Original Agreement have the
same meanings and construction in this Agreement.

 

 

2.

AMENDMENT  AND RESTATEMENT

 

 

2.1

Amendment and Restatement

 

The Parties hereby agree to amend and restate the Entire Agreement in the form
as set out in Appendix l to this Agreement and that such amendments shall be
deemed to take effect as from the date of execution of this Agreement as if such
amendments had been included in the Entire Agreement from such time.

 

 

 

2.2

Continuing  Provisions

 

The Provisions of the Entire Agreement shall, except where expressly amended and
restated under the provisions of clause 2.1 of this Agreement, continue in full
force and effect in accordance with their terms.

 

 

3.

MISCELLANEOUS

 

 

3.1

Notices

 

Any notices to be given under or in connection with this Agreement shall be
given in accordance with the requirements set out in Clause 23.1 of the Entire
Agreement.

 

 

3.2

Counterparts

 

This Agreement may be executed in any number of counterparts and by the parties
to it on separate counterparts and each such counterpart shall constitute an
original of this Agreement but  all of which together constitute one and the
same instrument. This Agreement shall not be effective until each party has
executed at least one counterpart.

 

 

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3.3

Governing Law

 

This Amendment shall be governed by, construed and interpreted according to
English law and, for the avoidance of doubt, the dispute mechanisms in Article
21 of the Entire Agreement shall apply to this Amendment as though incorporated
herein.

 

 

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its
duly authorized representative as of the date first above written.

 

 

SUDI ARABIAN MINING COMPANY ALCOA INC (MA'ADEN)

 

 

 

 

 

 

     By    Khalid S Mudaifer – President     By      Ken
Wisnoski                              

 

 

     Signed   /s/ Khalid S Mudaifer           Signed /s/ Ken
Wisnoski                      

 

 

 

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APPENDIX 1

AMENDED AND RESTATED

ALUMINIUM PROJECT FRAMEWORK SHAREHOLDERS' AGREEMENT

 

 

ALUMINIUM PROJECT FRAMEWORK SHAREHOLDERS' AGREEMENT

 

 

between

 

 

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

 

 

and

 

 

ALCOA INC.

 

 

 

 

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CONTENTS

Clauses

 

Pages

1

DEFINITIONS AND INTERPRETATION

10

 

1.1

Definitions

10

 

1.2

Interpretation

21

 

1.3

Third-Party Rights

21

2

Effective Date; Term of the Agreement; Parent Company Guarantee

21

 

2.1

Effective Date

21

 

2.2

Term of the Agreement

21

 

2.3

Parent Company Guarantee

22

 

Development Committee and Establishment of a particular Company

22

3

3.1

Development Committee

22

 

3.2

Project Costs and Pre-Financing Budget

22

 

3.3

Project Milestones

22

 

3.4

Establishment of each Company

23

 

3.5

Details of each Company

24

 

3.6

Purpose

24

4

Share Capital, Funding by Shareholders and Financing Completion Date

25

 

4.1

Share Capital as of Incorporation

25

 

4.2

Required Shareholder Funding

26

 

4.3

Shareholder Loans

26

 

4.4

Form and Manner of Funding by Shareholders

27

 

4.5

Default Commission Rate

27

 

4.6

Limitations and Shareholder Funding

28

 

4.7

Pledge

28

 

4.8

Adherence Agreement

28

 

4.9

Financing Completion Date

28

5

Responsibilities of the Parties

29

 

5.1

Roles of the Parties

29

 

5.2

Role of Ma’aden

29

 

5.3

Role of Alcoa

29

 

5.4

Aluminium Offtake

29

 

5.5

Support for Downstream Industry and Priority to the Domestic Market

30

 

5.6

Sales Agency Arrangements for Sales in the Kingdom

30

 

5.7

Sales Agency Arrangements for Sales Outside the Kingdom

30

 

 

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5.8

Alumina Supply Arrangements and Excess Alumina

30

 

5.9

Capacity Expansions

31

 

5.10

Break-Off Projects

31

 

5.11

Value Added Projects

33

 

5.12

Responsibilities under the Gas Allocation Letter

33

 

5.13

Provision of Information by Parties and the Companies

34

6

Transfer of Existing Project Assets; Project Agreements

35

 

6.1

Transfer of Ma’aden Existing Project Assets

35

 

6.2

Transfer of Alcoa Existing Project Assets

35

 

6.3

Project Agreements signed post-Effective Date but before Company Formation

36

7

Shareholders’ Meetings

36

 

7.1

Shareholders’ Meetings

36

 

7.2

Supermajority Items

36

 

7.3

Language

37

8

Board of Managers

37

 

8.1

Appointment of Managers to each Company

37

 

8.2

Removal of Managers

38

 

8.3

Appointment of Senior Officers to each Company; Removal

38

 

8.4

Meetings of the Board of Managers of each Company

40

 

8.5

Voting Thresholds

40

 

8.6

Resolutions

41

 

8.7

Information

41

 

8.8

Duties of Managers

41

 

8.9

Company Policies

42

 

8.10

Project Steering Committee

42

9

Deadlock

43

 

9.1

Deadlock Arising

43

 

9.2

Deadlock Referral

43

 

9.3

Sole Remedies

44

10

Senior Debt Financing of the Project

44

 

10.1

Support For Financing Plan

44

 

10.2

Several Obligations

44

 

10.3

No Further Liability

45

11

Distributions Policy; Taxes

46

 

11.1

Distributions Policy

46

 

11.2

Local Community Projects; Research and Development Programme

46

 

11.3

Tax and Zakat

46

 

 

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12

Accounting System, Books and Budgets

46

 

12.1

Accounting System and Standards

46

 

12.2

Language of Reporting to the Shareholders

47

 

12.3

Financial Statements

47

 

12.4

Books and Audit Rights

47

 

12.5

Statutory Obligations

48

 

12.6

Auditors

48

 

12.7

Rights of Managers not Limited

48

 

12.8

Annual and Special Budgets

48

 

12.9

Emergency Funding

49

13

Entry Payment, Pre-Incorporation Costs and Transfer of Pre-Incorporation
Materials

49

 

13.1

Payment of Entry Payment and Pre-Incorporation Costs

49

 

13.2

Reimbursement of Pre-Incorporation Costs

51

14

Events of Default and Consequences

51

 

14.1

Events of Default

51

 

14.2

Consequences of Events of Default

52

 

14.3

Transfer Upon Event of Default of Alcoa

52

 

14.4

Additional Consequences of a Funding Default

54

 

14.5

Ma’aden as the Defaulting Party

55

 

14.6

Default Prior to Incorporation of any Company

56

 

14.7

Other Remedies

57

15

Failure to Achieve Financial Completion Date for Phase I by the Financing
Longstop Date

57

 

15.1

Compensation on Buy-Out

57

 

15.2

Transfer on Financing Longstop Date

58

16

Termination and Expiry

59

 

16.1

Full Termination and Expiry

59

 

16.2

Partial Termination

60

 

16.3

Consequences of Termination at the Expiry of the Term

60

 

16.4

Consequences following Termination

60

 

16.5

Survival and Rights Unaffected

61

17

Sale or Transfer of Shares, Pledge

61

 

17.1

General Prohibitions

61

 

17.2

Transfers to Affiliates

62

 

173

Permitted Transfers

63

 

17.4

Transfers of Shares

63

 

17.5

Notice of Offers

63

 

17.6

Notice of Right to Match the Offer

63

 

 

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17.7

Right of Remaining Party to Match the Offer

64

 

17.8

Transfer Requirements

64

 

17.9

Completion of Transfer

64

 

17.10

General

65

 

17.11

Further Assurances; Sole Shareholder

65

 

17.12

Further Assurances; Sole Shareholder

65

 

17.13

Further Assurances; Sole Shareholder

66

 

17.14

Further Assurances; Sole Shareholder

67

18

Valuations

68

 

18.1

Fair Market Value

68

 

18.2

Valuation Panel

68

 

18.3

Submission of Valuation

68

 

18.4

Valuation Approach

68

19

Assignment

69

20

Warranties

69

21

Governing Law, Dispute Resolution and Language

70

 

21.1

Governing Law

70

 

21.2

Reference to Senior Management

70

 

21.3

Dispute Resolution

70

 

21.4

Continuing Obligations

71

 

21.5

Jurisdiction

71

 

21.6

Process Agent

71

 

21.7

Language

72

22

Confidentiality and Public Announcements

72

 

22.1

Confidentiality

72

 

22.2

Disclosure of Information by Managers to Shareholders and Parties

73

 

22.3

Announcements

73

 

22.4

Survival

73

23

Notices

73

 

23.1

Notices

73

 

23.2

Effect

74

24

Further Assurances

74

 

24.1

Undertakings

74

 

24.2

Further Assurances

75

 

24.3

Business Conduct

75

25

Competing Businesses

76

 

25.1

Acknowledgement

76

 

 

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25.2

No Obligation to Offer

76

 

25.3

Competing Projects Following Termination

76

26

General Provisions

76

 

26.1

Severability

76

 

26.2

Waiver

76

 

26.3

Compliance with Law and Permits

77

 

26.4

Intellectual Property

77

 

26.5

Entire Agreement

78

 

26.6

Improper Inducements

78

 

26.7

Language

79

 

26.8

Amendments

79

 

26.9

No Partnership

79

 

26.10

Priority of Documents

79

 

26.11

Waiver of Immunity

79

 

26.12

No Liability for Consequential Losses, etc

79

 

 

 

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SCHEDULE 1

 

Parent Company Guarantee

81

SCHEDULE 2

 

Articles of Association of the Companies

87

SCHEDULE 3

 

Pre-Incorporation Costs

132

SCHEDULE 4

 

Gas Allocation Letter

133

SCHEDULE 5

 

Adherence Agreement

143

SCHEDULE 6

 

Cast House Users’ Agreement

145

SCHEDULE 7

 

Description of the Ras Az Zawr Complex

154

SCHEDULE 8

 

Description of the Mine

157

SCHEDULE 9

 

Project Agreements

159

SCHEDULE 10

 

Project Economics

166

 

Part 1 - Estimate of Project Costs

166

 

Part 2 - Pre-Financing Budget

168

 

Part 3 - Project Model

168

SCHEDULE 11

 

Ma’aden Existing Project Assets

170

SCHEDULE 12

 

Alcoa Existing Project Assets

171

SCHEDULE 13

 

Pre-Incorporation Development Committee, Project Account and Steering Committees

172

 

Part 1 - Development Committee Procedures

172

 

Part 2 - Payment Mechanism

178

 

Part 3 - Project Organisation (graphic depiction)

179

SCHEDULE 14

 

Alcoa Services

196

 

Part 1 - Alcoa Services

196

 

Part 2 - Technology Licenses and Support Services

201

SCHEDULE 15

 

Project Milestones

203

 

 

 

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ALUMINIUM  PROJECT  FRAMEWORK AGREEMENT

THIS  FRAMEWORK  AGREEMENT  (hereinafter  referred  to as the "Agreement"),  is
made and entered into on                         H, corresponding to the
         day of          2009 G, by and between:

 

 

(1)

SAUDI ARABIAN MINING COMPANY (MA'ADEN), a company organized under the laws and
regulations of the Kingdom of Saudi Arabia with commercial registration
No.1010164391, having its head office and address at PO Box 68861, Riyadh 11537,
Kingdom of Saudi Arabia (together with its legal successors and permitted
assigns, hereinafter referred to as "Ma'aden"); and

 

 

 

(2)

ALCOA INC., a corporation under the laws of the Commonwealth of Pennsylvania,
USA, whose principal place of business is at 390 Park Avenue, New York, NY 1022,
USA, (together with its legal successors and permitted assigns, hereinafter
referred to as "Alcoa"),

 

(hereinafter jointly referred to as the "Parties" or individually as a "Party").

RECITALS:

 

 

(A)

WHEREAS the Parties desire to enter into a joint venture for the development,
construction, ownership and operation of an integrated mine, refinery, smelter
and rolling mill in the Kingdom of Saudi Arabia (the "Joint Venture"), initially
to be developed for (i) the extraction of approximately 4,000,000 tpa of bauxite
from the Al Ba'itha bauxite deposit in the Kingdom, (ii) the production of
approximately 1,800,000 tpa of alumina and approximately 740,000 tpa of
aluminium, and (iii) the production of approximately 250,000 tpa, which may be
increased to 460,000 tpa of rolling mill product ((i), (ii) and (iii)
hereinafter referred to as the "Project"), as well as potential future
expansions of the Project;

 

 

 

(B)

WHEREAS Ma'aden and Alcoa entered into a Memorandum of Understanding dated 15
July 2009 (the "MOU") for the implementation of the Project.

 

 

 

(C)

WHEREAS the Parties fully accept the obligations set out in the Gas Allocation
Letter, without condition or qualification;

 

 

 

(D)

WHEREAS the Parties intend to establish several limited liability companies in,
and under the laws of, the Kingdom, one for the Mine and Refinery, one for the
Smelter, and one for the Rolling Mill (each referred to as a "Company" and
collectively as the "Companies") to implement the Joint Venture and to undertake
the Project;

 

 

 

(E)

WHEREAS the Parties wish to operate the Companies to undertake the Project as an
integrated joint venture for the purposes and on the terms set out in this
Agreement;

 

 

 

(F)

WHEREAS the Parties have agreed that they will offtake the Aluminium in
accordance with the principles set out in this Agreement and the terms of the
Offtake Agreements; and

 

 

 

(G)

WHEREAS the Parties are developing the Estimate of Project Costs, the
Pre-Financing Budget and the Project Model as described in Schedule 10.

 

 

NOW, THEREFORE, in consideration of the covenants contained herein, the Parties
hereto agree as follows:

 

 

1.

DEFINITIONS  AND INTERPRETATION

 

 

1.1

Definitions

 

Whenever used herein and written in initial capital letters, the following terms
shall have the meanings respectively defined:

 

10

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"Act of Insolvency" means, in respect of any person, the occurrence of one or
more of the following events (or any event analogous to the following events in
any jurisdiction):

 

 

(a)

such person is unable, or admits inability, to pay its debts as they fall due in
the ordinary course;

 

 

 

(b)

a moratorium is declared in respect of any indebtedness of such person; or

 

 

(c)

any corporate action, legal proceedings or other procedure or step is taken in
relation to:

 

 

(i)

the suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, liquidation, administration or reorganisation (by way of voluntary
arrangement, scheme of arrangement or otherwise) of such person other than a
solvent liquidation or reorganisation of such person;

 

 

 

(ii)

a composition, compromise, assignment or arrangement with any creditor of such
person; or

 

 

 

(iii)

the appointment of a liquidator (other than in respect of a solvent liquidation
of such person), receiver, administrative receiver, administrator, compulsory
manager or other similar officer in respect of such person or any of its assets,

 

 

and such action, legal proceedings or other procedure or step is acquiesced to
by such person or shall result in the entry of an order for relief or shall
remain undismissed for sixty (60) days;

 

"Additional Pre-Incorporation Costs" shall bear the meaning given in Clause
13.l(a):

 

"Additional Term" shall bear the meaning set out in Clause 2.2(b):

 

"Adherence Agreement" shall bear the meaning set out in Clause 4.8;

 

"Affiliate" means, in relation to any person, any entity which Controls, or is
directly or indirectly Controlled by or under common Control with, such person,
provided that (i) no Company shall be deemed to be an Affiliate of any Party,
and (ii) no person shall be deemed to be an Affiliate of another person solely
because both persons are under common Control of the Government of the Kingdom;

 

"Agent" means any person engaged to obtain business or regulatory advantage,
develop customer relationships, or interface with Governmental Authorities
and/or Government Officials;

 

"Agreed Form" means a form of document which has been agreed by or on behalf of
the parties thereto and initialled by or on behalf of the parties thereto for
the purposes of identification;

 

"Agreed Pre-Incorporation Costs" shall bear the meaning given in Clause 13.(a);

 

"Agreement" means this Framework Agreement;

 

"Alcoa" has the meaning set out in the parties clause;

 

"Alcoa Existing Project Assets" shall bear the meaning set out in Clause 6.2;

 

"Alcoa LOC" shall bear the meaning given in Clause 5.12(c):

 

"Alumina" means alumina produced by the Refinery as described in Clause
3.6(b)(ii):

 

11

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"Aluminium" means aluminium produced by the Smelter (and does not include the
products of the Rolling Mill) as described in Clause 3.6(b)(iii);

 

"Applicable Laws" means all legally binding and applicable laws, decrees,
directives, orders, regulations or rules of any Governmental Authority,
including (for the avoidance of doubt) laws relating to the prohibition of the
corruption of public officials which are applicable to the relevant Party,
Shareholder, Affiliate or Company (as the case may be) such as the U.S. Foreign
Corrupt Practices Act;

 

"Ancillary Agreements" means the agreements set out in Part 1 of Schedule 9 and
any other agreements that the Parties may agree to identify as Ancillary
Agreements from time to time;

"Annual Programme and Budget" shall bear the meaning set out in Clause 12.8(a);

 

"Approved Accounting Firm" means an internationally recognised accounting firm
as mutually agreed between the Parties or, failing agreement within five (5)
Business Days of being required to agree such firm, any firm from among the
largest four international accounting firms at the relevant time;

 

"Articles of Association" means the articles of association of a particular
Company in effect from time to time;

 

"Auditors" means an Approved Accounting Firm providing audit services that has
been appointed in accordance with this Agreement to audit the financial
statements of a particular Company and otherwise to perform the functions of an
auditor as set out herein;

 

"Base Case Model" means the base case financial model for each of the Phases
which is to be developed and approved by the Parties or, following incorporation
of a particular Company, the Board of Managers of that Company by the milestone
dates therefor set out in Schedule 15, as the same may be amended, modified,
implemented or replaced from time to time in accordance with this Agreement;

 

"Bauxite" means bauxite extracted from the Mine as described in Clause 3.6;

 

"Board of Managers" or "Board" means the board of managers from time to time of
a particular Company appointed in accordance with this Agreement and the
Articles of Association;

 

"Break-Off Project" shall bear the meaning set out in Clause 5.10(a);

"Break-Off Project Notice" shall bear the meaning set out in Clause 5.10(a);

 

"Break-Off Right" shall bear the meaning set out in Clause 5.10(a);

 

"Break-Off  Project Company" shall bear the meaning set out in Clause 5.10(a);

 

"Budget" means the Project Budget, an Annual Programme and Budget or a Special
Programme and Budget and "approved Budget" means a Budget of a particular
Company that is approved by the Parties and/or the Board of Managers of that
Company (as applicable) in accordance with this Agreement;

 

"Business Day" means any day on which banks in the Kingdom and New York, U.S.A.
are generally open for business and on which instructions to transfer same-day
funds can be executed;

 

"Calculation Date" shall bear the meaning set out in Clause 13.l(a):

 

"Call Date" shall bear the meaning set out in Clause 14.3(a)(i);

 

12

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"Cash Call" means all calls for (a) Equity Subscriptions and (b) if determined
by the Parties in accordance with this Agreement, advances under Shareholder
Loans, made by the relevant Board of Managers to the Parties in their respective
Shareholder Percentages in accordance with Clause 4;

 

"Cast House" means the casting facilities owned and operated by the Smelter, in
accordance with the Cast House Users' Agreement substantially in the form of
Schedule 6.

 

"Chairman" means the chairman of the relevant Board of Managers;

 

"Closing Date" shall bear the meaning set out in Clause 14.3(a)(iv);

 

"Commercial Production Date" means the later of, (a) in respect of the Mine, the
Refinery and the Smelter, the last day of the period of the first three (3)
months of continuous and stable operations of each of the Mine, the Refinery and
the Smelter at not less than ninety percent (90%) capacity, as determined by the
Parties on written advice from each relevant Board of Managers; and (b) in
respect of the Rolling Mill, after all major pieces of equipment and all
instrumentation and systems related to process and quality control successfully
complete acceptance testing, the date at which the first customer has given
acceptance of qualification for supply of beverage can stock, provided that for
the purpose of Clauses 8.5(b)(iv), l 2.3(d)(iii) and l 8.4(c) it shall mean the
above date applicable to the relevant Company;

 

"Commercial Register" means the commercial register at the Ministry;

 

"Commercial Registration" means registration of a particular Company on the
Commercial Register;

 

"Commission Rate" means a commission rate which is calculated as being
equivalent to:

 

 

(1)

the offered rate per annum for one month deposits in US Dollars which appears on
the appropriate page of the Reuters screen or such other page as may replace
that page for the purpose of displaying offered rates of lending banks for
London interbank deposits at or about 11:00 a.m. (London time) on the first
London Banking Day of each month, or, if more than one such rate appears on such
page on such day, the arithmetic mean of such rates (rounded upward to the
nearest five decimal places); and

 

 

 

(2)

if no such rate appears on the Reuters screen page referred to in paragraph (1)
above (or any such replacement page), the arithmetic mean (rounded upwards to
the nearest five decimal places) of the offered rates per annum quoted by
Barclays Bank, London Branch, and HSBC Bank, London Branch (or their successors
in interest), at which deposits in US Dollars for one month are being offered by
such banks (or their successors in interest) to prime banks in the London
interbank market at or about 11:00 a.m. (London time) on the first London
Banking Day of each month; or

 

 

 

(3)

if none or only one of the banks referred to in paragraph (2) above are offering
rates for deposits on the terms referred to in that paragraph, the rate per
annum quoted by such bank as the Party who does not owe such commission in
consultation with the Party that owes such commission may select from time to
time at which deposits in US Dollars for one month are being offered by such
bank to prime banks in the London interbank market at or about l 1.00 a.m.
(London time) on the first London Banking Day of each month;

 

 

"Commitment Date" shall bear the meaning set out in Clause 3.3(b):

 

"Companies11 and "Company" shall each bear the meaning set out in Recital D;

 

"Company Law" means the Saudi Arabian Regulations for Companies, Royal Decree
No. M/6 dated 22/3/1385H, as amended from time to time;

 

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"Company Policies" shall bear the meaning set out in Clause 8.9;

 

"Completion Agreements" means any and all completion debt service undertakings
and/or obligations to fund construction cost overruns up to an agreed maximum
amount granted by the Parties or members of their respective groups for the
benefit of Senior Lenders in connection with the Senior Debt for the Project;

 

"Complex" means the manufacturing facility to be constructed by the Companies
for the production of the Products, at Ras Az Zawr in the Kingdom, including the
Refinery, Smelter and Rolling Mill together with certain related facilities to
be owned by each relevant Company, as further described and defined in Schedule
7:

 

"Confidentiality & Non-Disclosure Agreement" means the confidentiality and
non-disclosure agreement dated 26/4/1430 H, corresponding to 22/4/2009 G,
between Ma'aden and Alcoa;

 

"Construction Agreement" means (i) any engineering, procurement and construction
contract entered into by a particular Company in respect of any material
component of the Project or any relevant Expansion, (ii) any engineering,
procurement and construction management (EPCM) contract entered into by a
particular Company in respect of any material component of the Project or any
relevant Expansion or (iii) any contract, agreement or arrangement substantially
similar to the foregoing;

 

"Control" shall mean in relation to any non-natural person (the "First Person"),
the right of another person or persons acting together, whether in law or in
fact (including by way of contract), to secure by means of the holding of shares
bearing fifty percent (50%) or more of the voting rights attaching to all the
shares in the First Person, or by having the power to control the composition of
the board of managers/directors or other governing body of the First Person,
that all or a substantial proportion of the affairs of the First Person are
conducted in accordance with the wishes of that person or persons acting
together, and the expressions "Controls" or "Controlled" shall be construed
accordingly;

 

"Cure Period" shall bear the meaning set out in Clause 14.4(e)(ii):

 

"Deadlock" shall bear the meaning set out in Clause 9.1(a):

 

"Deadlock Committee" shall bear the meaning set out in Clause 9.2(b)(i):

 

"Deadlock Referral Notice" shall bear the meaning set out in Clause 9.2(a):

 

"Deadlock Resolution Procedure" shall bear the meaning set out in Clause 9.2(b):

 

"Default Amount" shall bear the meaning set out in Clause 14.1(a);

 

"Default Commission" shall bear the meaning set out in Clause 4.5;

 

"Default Notice" shall bear the meaning set out in Clause 14.4(a);

 

"Defaulting Party" shall bear the meaning set out in Clause 14.1;

 

"Development Committee" shall bear the meaning set out in Clause 3.1;

 

"Development Committee Funding Call" shall bear the meaning set out in Clause
4.2(a);

 

"Distribution" means: (i) any Share Distribution; (ii) any payment by a
particular Company to any of its Shareholders or any of that Shareholder's
Affiliates in respect of any Shareholder Loan; or (iii) any payment by a
particular Company of any other amount (including by way of loan) to any of its

 

14

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Shareholders or any of that Shareholder's Affiliates (other than pursuant to the
terms of any Project Agreement);

 

"DZIT" means the Department of Zakat and Income Tax of the Kingdom;

"EBIT" means earnings before interest and taxes;

 

"Effective Date" shall mean the date determined in accordance with Clause 2.1;

 

"Encumbrance" means any interest or equity of any person (including any right to
acquire, option or right of pre emption) and any mortgage, charge, pledge, lien
(other than liens arising by operation of law and securing indebtedness arising
in the ordinary course of business not more than seven (7) days overdue),
assignment, hypothecation or other priority interest, deferred purchase,  title
retention, rental, hire purchase, conditional sale, trust, leasing, sale and
repurchase and sale and leaseback arrangements, rights of set off and any other
agreement or arrangement whatsoever having the same commercial or economic
effect as security (including any hold back or "flawed asset" arrangement) over
or in any property, asset or right of whatsoever nature and including any
agreement for any of the foregoing;

 

"Entry Payment" shall bear the meaning set out in Clause 13.1(b):

 

"Equity Subscription" means the subscription by the Parties (or any of them)
directly or through any of their respective Affiliates for additional Shares on
the basis of a subscription price of ten thousand Saudi Riyals (SR10,000) per
Share, or such other basis as may be approved by the relevant Board in
accordance with this Agreement and the Applicable Laws of the Kingdom;

 

"Estimate of Project Costs" means the Parties' estimate as at the Effective Date
of the Project Costs, as may be amended from time to time by mutual agreement of
the Parties, as more fully described in Part 1 of Schedule 10 and which shall be
superseded by the Project Budget;

"Event of Default" shall bear the meaning set out in Clause 14.1;

 

"Excess Alumina" means, in any period, any Alumina produced at the Refinery that
is not required for the production of Aluminium at the Smelter and/or to
maintain normal Alumina inventory levels during such period;

 

"Expansion"  shall bear the meaning set out  in Clause 5.9(a);

 

"Fair Market Value" shall bear the meaning set out in Clause 18.1;

 

"Financial Close" means the date on which all conditions precedent to first draw
down under the Financing Agreements for the relevant Phase of the Project have
been satisfied or, if capable of waiver, waived;

 

"Financial Year" means the financial year of a particular Company from January 1
to December 31 each year;

 

"Financing Agreements" means the credit agreements and associated documents
entered into or to be entered into by a particular Company pursuant to which
credit facilities will be made available to such Company in connection with the
Project;

 

"Financing Completion Date" shall mean the date on which the Financing
Agreements are signed on behalf of each relevant Company and the Senior Lenders
for the relevant Phase;

 

"Financing Longstop Date" means 31 December 2010 being the date by which the
Parties require the Financing Completion Date for Phase I to have occurred as
may be extended in accordance with Clause  15.1(a);

 

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"Financing Plan" means the financing plan to be developed by the Parties for
each Phase and which is intended to be approved by the Parties by the milestone
date therefor set out in Schedule 15;

"Foreign Investment Licence" means the foreign investment licence issued by
SAGIA authorizing the formation of a particular Company, as the same may be
amended from time to time;

 

"Free Cash" in respect of each relevant Financial Year, means (i) the net profit
after allowing for Income Tax and Zakat of a particular Company for such
Financial Year as reflected in the audited financial statements of that Company
for such Financial Year, (ii) plus depreciation and amortization, (iii) plus
adjustments for movement between opening and closing working capital, (iv) less
amounts disbursed in the Financial Year on account of capital expenditures, (v)
less amounts paid by that Company in respect of such Financial Year pursuant to
Clause 11.3, and (vi) less amounts paid or reserved for repayment of debt, (vii)
plus cumulative undistributed Free Cash from previous Financial Years;

 

"Funding Deadline" shall bear the meaning set out in Clause 4.4(a)(ii);

 

"Funding Default" shall bear the meaning set out in Clause 14.1(a);

 

"Gas Allocation Letter" means the gas allocation letter dated 28/10/1430 H,
corresponding to 17/10/2009 G, reference 3157/P/F, as may be amended from time
to time, in respect of the Project from Saudi Aramco (based on the authorisation
of the Ministry of Petroleum) to Ma'aden and SWCC, a copy of the current version
of which is attached at Schedule 4;

 

"Gate 3 Review" means the formal review of the final feasibility report produced
at the completion of the stage 2 engineering for each component of the Project
in accordance with the agreed stage gate process. This report shall describe the
basic engineering of the facilities, class 1 cost estimate within a range of +/-
ten percent (10%) (or such other level as agreed by the Parties), HAZOP study,
technical and financial risk assessment, constructability and operability
review, operational readiness review, level I master schedule, value improving
processes, final project execution plan, EPC/EPCM contract documentation and any
other items as agreed by the Parties;

 

"GCC countries" means Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United
Arab Emirates and any other country which may be designated as a Gulf
Cooperative Country from time to time;

 

"Governmental Authority" means any court or governmental authority, department,
commission, board, agency or other instrumentality of any country or
jurisdiction or any part thereof having jurisdiction over this Agreement, a
Company, a Shareholder, a Party or any asset or transaction contemplated by this
Agreement;

 

"Government Official" means an employee, officer or representative of, or any
person otherwise acting in an official capacity for or on behalf of a
Governmental Authority;

 

"IFRS" shall bear the meaning set out in Clause 12.1;

 

"Initial Term" shall bear the meaning set out in Clause 2.2(a);

 

"Intellectual Property" means rights in and in relation to confidential
information, trade marks, service marks, trade and business names, logos and get
up (including any and all goodwill associated with or attached to any of the
same), domain names, patents, inventions (whether or not patentable), registered
designs, design rights, copyrights (including rights in software) and moral
rights, database rights, semi-conductor topography rights, utility models and
all rights or forms of protection having an equivalent or similar nature or
effect anywhere in the world, whether enforceable, registered, unregistered or
registrable (including, where applicable, all applications for registration) and
the right to sue for damages for past and current infringement (including
passing off and unfair competition) in respect of any of the same;

 

16

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"IP Information" shall bear the meaning set out in Clause 26.4(d):

"Joint Venture" shall bear the meaning set out in Recital A;

"Kingdom" means the Kingdom of Saudi Arabia;

 

"KSA Controlled Transferee" shall bear the meaning set out in Clause 17.3(a):

 

"LME" means the London Metals Exchange;

 

"London Banking Day" means any day on which banks in London, England are
generally open for business;

 

"Ma'aden" has the meaning set out in the parties clause;

 

"Ma'aden  Existing Project Assets" shall bear the meaning set out in Clause
6.l(a):

 

"Ma'aden LOC" shall bear the meaning given in Clause 5.12(a):

 

"Manager" means a member from time to time of the relevant Board of Managers;

 

"Material Adverse Effect" means any effect or result which is, or is reasonably
likely to be, materially adverse to the business, operations, assets,
liabilities, properties, financial condition, effective management, results or
prospects of a particular Company or a subsidiary Controlled by such Company (if
any);

 

"Material Breach" shall bear the meaning set out in Clause 14. l(d);

 

"Mine" means the Al Ba'itha mine in the Kingdom for extracting approximately
4,000,000 tpa of bauxite as more fully described in Schedule 8. as modified
pursuant to any Expansion that may occur in accordance with this Agreement;

 

"Mining & Refining Company" shall bear the meaning set out in Clause 3.5 (c);

 

"Mining Licenses" means the mining and quarrying licenses in respect of the Mine
referred to in Schedule 8 and included in Schedule 11;

 

"Ministry" means the Ministry of Commerce and Industry of the Kingdom;

 

"Ministry of Petroleum" means the Ministry of Petroleum and Mineral Resources of
the Kingdom;

 

"MOU" shall bear the meaning set out in Recital B;

 

"Non-Defaulting Party" means the Party who is not the Defaulting Party;

 

"Notice of the Right to Match the Offer" shall bear the meaning set out in
Clause 17.6:

"NTP for Phase l" means an irrevocable written notice to proceed in full or
substantially in full with construction or similar steps given by the relevant
Company pursuant to the Construction Agreements in respect of Phase 1 in
accordance with Clause 3.3;

 

"Offer" shall bear the meaning set out in Clause 17.4;

 

"Offtake Agreements" means the offtake agreements in the Agreed Form in respect
of Aluminium and the Excess Alumina to be entered into by the relevant Companies
with each of the Parties;

"Other Project Agreements" means the Project Agreements set out in Part 2 of
Schedule 9;

 

17

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"Paid In Capital" means the aggregate amount of money paid by each Party
directly or through any of their respective Affiliates to a Company in
connection with the subscription for Shares by such Party or Affiliates in that
Company from time to time in accordance with this Agreement including the amount
of money set out under the headings "Paid In Capital" in Clause 4.1;

 

"Phase" means Phase 1 or Phase 2, as the case may be and "Phases" means
both  Phase 1 and Phase 2;

 

"Phase l" means (following the Gate 3 Review) the design, construction and
operation of the Smelter and the Rolling Mill;

 

"Phase 2" means (following the Gate 3 Review) the design, construction and
operation  of  the  Mine and  the Refinery;

 

"Pre-Financing Budget" means the development budget for the Project detailing
the Project Costs which the Parties have incurred and estimate will be likely to
be incurred on the Project up to Financial Close for each Phase, including an
appropriate level of contingency, as attached in Part 2 of Schedule 10;

 

"Pre-Incorporation Costs" means the aggregate of the costs properly incurred by
a Party prior to the incorporation of each Company in accordance with Clause 13;

 

"Pre-Incorporation Materials" means the relevant documents and materials
developed by the Parties jointly or otherwise provided by a Party for the
purposes of the Project prior to the incorporation of the Companies;

 

"President" means the president of a particular Company as appointed in
accordance with Clause 8.3(a);

 

"Product" or "Products" means Alumina, Aluminium and Rolling Mill products
produced at the Complex as described in Clause 3.6;

 

"Project" shall bear the meaning set out in Recital A;

 

"Project Account" means the joint bank account set up by the Parties for the
purposes of funding Project costs approved by the Parties through the
Development Committee prior to the incorporation of each particular Company and
appointment of the Board of such Company;

 

"Project Agreements" means the agreements entered into or to be entered into by
a particular Company and/or the Parties and/or either of the Parties (on behalf
of that Company) in connection with the Project, with the inclusion of the
Anci11ary Agreements, the Other Project Agreements, the Financing Agreements and
any other agreements which are identified as Project Agreements in accordance
with the terms of this Agreement;

 

"Project Budget" means the overall budget of the Project Costs for the Project
to be developed and approved by the Parties by the milestone date therefor set
out in Schedule 15, as may be amended, modified, implemented or replaced from
time to time pursuant to a resolution of the Parties pursuant to Clause 7.2 and
which shall supersede the Pre-Financing Budget and the Estimate of Project
Costs;

 

"Project Costs" means the total costs of the Project, including direct project
costs, contingency, owner's development costs, penalties for delay to implement
the Project by required deadlines, interest due on construction and other
financing costs and net working capital funding requirements;

 

"Project Model" means the financial model for the Project at the Effective Date
referred to in Part 3 of Schedule 10 from which the Base Case Model will be
developed by the Parties;

"Project Steering Committee" shall bear the meaning set out in Clause 8.10;

 

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"Proposed Resolution" shall bear the meaning set out in Clause 9.l(a);

 

"Ras Az Zawr Site" means that portion of the industrial area at Ras Az Zawr as
described in Schedule 7;

 

"Refinery" means the refinery to be constructed in Ras Az Zawr in the Kingdom
initially to produce approximately 1,800,000 tpa of alumina, as more fully
described in Schedule 7, as modified pursuant any Expansion that may take place
in accordance with this Agreement;

 

"Remaining Party(s)" shall bear the meaning set out in Clause 17.5;

 

"Required Shareholder Funding" shall bear the meaning set out in Clause 4.2;

 

"Right to Match the Offer Period" shall bear the meaning set out in Clause
17.7(a):

 

"Rolling Company" shall bear the meaning set out in Clause 3.5 (c);

 

"Rolling Mill" means the rolling mill to be constructed at Ras Az Zawr in the
Kingdom initially to produce approximately 250,000 tpa, which may be increased
to 460,000 tpa of rolling mill product, as more fully described in Schedule 7.
as modified pursuant to any Expansion that may take place in accordance with
this Agreement;

 

"SAGIA" means the Saudi Arabian General Investment Authority;

 

"Saudi Riyal" or "SR" means the lawful currency of the Kingdom;

 

"Security Interest" shall bear the meaning set out in Clause 4.7;

 

"Selling Party" shall bear the meaning set out in Clause 17.4;

 

"Senior Debt" means the financing provided by the Senior Lenders for the
Project;

 

"Senior Lenders" means one or more commercial banks, Islamic finance
participants, Saudi Arabian public financing institutions and other financial
institutions and/or capital markets investors (which for the avoidance of doubt,
may include one or more of the Parties and any of their Affiliates) providing
debt finance in respect of the Project other than in respect of Shareholder
Loans;

 

"Senior Lenders Commitment Letters" means the letters issued by prospective
Senior Lenders evidencing a commitment to provide Senior Debt to the relevant
Companies undertaking the relevant Phase of the Project;

 

"Senior Officers" means the President and other senior officers of a particular
Company as set out in Clause 8.3(a);

 

"Share" means  any share  of  SRI0,000  each in the  capital of any Company, and
"Shareholding"

shall be construed accordingly;

 

"Share Capital" means the capital which constitutes the Paid In Capital from
time to time of a Company as set out in its Articles of Association;

 

"Share Distribution" means any dividend (in cash, property or otherwise) or any
other distribution or payment made by a particular Company on or in respect of
its Shares, including any distribution of the distributable profits of such
Company, or any distribution of the assets of such Company upon any liquidation
or winding up of such Company;

 

"Shared Services Agreement" shall have the meaning set out in Clause 5.10(b):

 

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"Shareholder" means any person directly holding Shares from time to time in
accordance with the terms of this Agreement;

 

"Shareholder Loan" means a subordinated interest free loan by a Shareholder or
its Affiliate to a Company pursuant to a Shareholder Loan Agreement;

 

"Shareholder Loan Agreements" shall bear the meaning set out in Clause 4.3;

 

"Shareholder Percentage" means, in respect of a Party, the amount (expressed as
a percentage) equal to (a) the total Paid In Capital by such Party or its
Affiliate in a Company at such time, divided by (b) the total Paid In Capital by
all the Shareholders in such Company at such time, and "Shareholder Percentages"
collectively refers to the Shareholder Percentage of each of the Parties, which,
at the time of formation of a Company, are as set out in Clause 4.1;

 

"Smelter" means the smelter to be constructed in Ras Az Zawr in the Kingdom
initially to produce approximately 740,000 tpa of aluminium, as more fully
described in Schedule 7. as modified pursuant any Expansion that may take place
in accordance with this Agreement;

 

"Smelter Onsite Services Agreement" or "Smelter OSA" means the agreement for the
provision of onsite services to the Company by Rio Tinto Alcan Inc. relating to
aluminium smelting technologies, as more fully described in Part 2 of Schedule
9;

 

"Smelter Technology Transfer Agreement" or "Smelter TT A" means the agreement
for the licensing of certain of Aluminium Pechiney's Intellectual Property in
aluminium smelting technologies and provision of related services to a
particular Company, as more fully described in Part 2 of Schedule 9;

 

"Smelting Company" shall bear the meaning set out in Clause 3.5 (c):

 

"SOCPA" shall bear the meaning set out in Clause 12.1;

 

"Special Programme and Budget" shall bear the meaning set out in Clause 12.8(a);

 

"SWCC" means the Saline Water Conversion Corporation in the Kingdom;

 

"Transfer Date" means, in respect of any transfer of Shares, the date of
signature before the competent notary public in the Kingdom of the amendment of
the Articles of Association necessary to give effect to such transfer in
accordance with Clause 17.9;

 

"Transferable Interests" means, in respect of any Party, all Shares and
Shareholder Loans held by such Party and its Affiliates;

 

"Transfer Notice" shall bear the meaning set out in Clause 17.5;

 

"US Dollar" or "US$" shall mean the lawful currency of the United States of
America;

"Value Added Project" means any capital investment project to be implemented
after the date of this  Agreement  and   which  is  intended  
to  be  located  within  the  Kingdom   which  relates to

(a)downstream add-on products which could be produced using outputs generated by
the Project (for  the  avoidance  of  doubt,  not  including  the  
Rolling  Mill   or  any  Expansions  thereto) or

 

(b)

upstream inputs used in the Project (for the avoidance of doubt, not including
the Refinery or any Expansions thereto);

 

 

"Valuer" shall bear the meaning set out in Clause 18.2; and

 

"year", "month", "week" and "day" mean a calendar year, calendar week. calendar
month and a calendar day respectively of the Gregorian calendar.

 

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1.2

Interpretation

 

In this Agreement:

 

 

(a)

References to statutory provisions shall be construed as references to those
provisions as respectively amended or re•enacted or as their application is
modified from time to time by other provisions (whether before or after the date
hereof).

 

 

 

(b)

References to Recitals, Clauses, Schedules and paragraphs are to Recitals and
Clauses in, and to Schedules and paragraphs of Schedules to, this Agreement. The
Recitals and Schedules shall be deemed to form part of this Agreement.

 

 

 

(c)

References to any document (including this Agreement) are references to that
document as amended, consolidated, supplemented, novated or replaced from time
to time.

 

 

 

(d)

Headings are inserted for convenience only and shall not affect construction.

 

 

(e)

References to the Shareholders include their respective successors and permitted
assigns.

 

 

(f)

References to persons shall include any individual, any form of body corporate,
unincorporated association, firm, partnership, joint venture, consortium,
association, organization or trust (in each case whether or not having a
separate legal personality).

 

 

 

(g)

The word "include" and its derivatives shall be deemed to include the proviso
that it is "without limitation".

 

 

 

(h)

The  masculine gender shall include the feminine and neuter and the singular
number shall include the plural, and vice versa.

 

 

 

1.3

Third Party Rights

Except insofar as this Agreement expressly provides that a third party may in
his own right enforce a term of this Agreement, a person who is not a party to
this Agreement has no right to rely upon or enforce any term of this Agreement.

 

 

2.

Effective Date; Term of the Agreement; Parent Company Guarantee

Effective Date

 

2.1

This Agreement shall be effective as of the date of execution of this Agreement
by both Parties (the "Effective Date").

 

 

2.2

Term of the Agreement

 

 

(a)

The term of this Agreement and the Joint Venture shall be from the Effective
Date until thirty (30) years after the date that the last of the three Companies
is registered in the Commercial  Register (the "Initial Term").

 

 

 

(b)

At the expiry of the Initial Term, this Agreement shall be automatically renewed
for an additional term of twenty (20) years on the same terms and conditions,
unless the Parties agree otherwise at least two (2) years prior to the expiry of
the Initial Term or unless terminated earlier in accordance with this Agreement
("Additional Term").

 

 

 

(c)

The Parties may agree to extend the term of this Agreement and the Joint Venture
beyond the end of the Additional Term, by successive ten ( l0) year periods, by
mutual agreement of the Shareholders at least five (5) years prior to expiry of
the then current term

 

 

(d)

If the Parties are unable to agree on an extension of the term of this Agreement
and the Joint Venture pursuant to paragraph (c) above, prior to a liquidation of
the Companies

 

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pursuant to the provisions of Clause 16.3, the Parties will seek to negotiate a
purchase by one Party of the other Party's Transferable Interests at a Fair
Market Value pursuant to the procedures, and consistent with the valuation
principles, set forth in Clause 18.

 

 

 

2.3

Parent Company Guarantee

 

Alcoa shall procure the issuance by its ultimate parent company of a parent
company guarantee in respect of its Affiliates that are Shareholders in a
Company in the form set out in Schedule 1. Such parent company guarantee shall
be issued to Ma'aden prior to or simultaneously with the first issuance of
Shares to any Alcoa Affiliate.

 

 

3.

Development Committee and Establishment of a particular Company

 

 

3.1

Development Committee

 

The Parties shall proceed to incorporate each Company and appoint the relevant
Board of Managers as soon as possible after the Effective Date. If it is not
practicable to incorporate a Company immediately following the Effective Date
then, for the period between the Effective Date and the incorporation of such
Company and appointment of its Board of Managers, a project development
committee (the "Development Committee") shall be formed by the Parties for the
overall co­ ordination of the development of the project in the period up to
incorporation of such Company and appointment of its Board of Managers. The
Development Committee shall have the authority and duties and shall act in
accordance with the procedures set out in Part 1 of Schedule 13.

 

The Development Committee shall be subject to the same Company Policies as
described in Clause 8.9 of the Agreement once such policies are determined by
the Parties.

 

 

3.2

Project Costs and Pre-Financing Budget

 

Prior to the Effective Date, the Parties have agreed on:

 

(i)the Estimate of Project Costs;

 

(ii)the Project Model; and

 

(iii)the Pre-Financing Budget.

 

 

3.3

Project Milestones

 

 

(a)

From the Effective Date, the Parties shall use their best efforts to progress
the development of the Project including achieving the milestones set out in
Schedule 15 by the respective milestone dates. As the Project is progressed as
aforesaid, the Parties shall, and shall procure that each Company shall, further
develop and approve:

 

 

(i)

the Project Budget which shall supersede and replace the Estimate of Project
Costs and Pre-Financing Budget;

 

 

(ii)

the Base Case Model for each Phase;

 

 

(iii)

the Financing Plan for each Phase including a commitment by each of the Parties
to provide the Required Shareholder Funding specified in the Financing Plan
together with the Senior Lenders Commitment Letters in respect of such Phase;
and

 

 

(iv)

the material Project Agreements as specified in Schedule 15.

 

 

 

 

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(b)

Without prejudice to the above, the Parties shall use their best efforts to
obtain signed Senior Lenders Commitment Letters and the key signed Construction
Agreements (as agreed by the Parties) for Phase 1 by no later than 30 June 2010
(the "Commitment Date").

 

(c)

In the event that the Senior Lenders Commitment Letters and the key Construction
Agreements (as aforesaid) have not been signed by the Commitment Date, the
Parties will liaise with the Ministry of Petroleum to seek appropriate
extensions of time or other relief under the Gas Allocation Letter and the
Parties will continue to use all their respective best efforts to progress the
Senior Lenders Commitment Letters and the key Construction Agreements so that
they may be signed by the respective parties as soon as practicable following
the Commitment Date. In the event that the Gas Allocation Letter is terminated
or the gas allocation is withdrawn by reason of any failure to achieve the
signing of the Senior Lenders Commitment Letters or the relevant key
Construction Agreements by the Commitment Date, or for any other reason, then
this Agreement will terminate in accordance with Clause 16.l(e) and neither
Party shall have any liability to the other (including in respect of the
reimbursement of Pre-Incorporation Costs or Paid In Capital or Shareholder Loans
in respect of any Company) arising from any such termination.

 

(d)

Subject to obtaining signed Senior Lenders Commitment Letters for Phase 1, the
Parties: agree to continue to develop the Project; commit to provide the
Required Shareholder Funding in respect of Phase 1; and to procure that each
relevant Company shall sign the Financing Agreements for Phase 1, subject only
to the Financing Agreements being on materially the same terms as those
contained in the Senior Lenders Commitment Letters.

 

(e)

Following the development and approval of all items listed in paragraph (a)
above and, subject to paragraph (f) below, the occurrence of the Financing
Completion Date for Phase 1 (or earlier, should the Parties so agree), the
Parties shall procure that the NTP for Phase 1 is issued.

 

(f)

The Parties shall use their best efforts to progress the Project as aforesaid
such that the Financing Completion Date for Phase 1 occurs no later than the
Financing Longstop Date. In the event that the Financing Completion Date for
Phase 1 has not occurred by the Financing Longstop Date, Clause 15 shall apply.

 

(g)

The Parties acknowledge that the Project is an integrated project to be
developed in two Phases. The Parties shall use their best efforts to obtain
signed Senior Lenders Commitment Letters and the key signed Construction
Agreements (as agreed by the Parties) for Phase 2 by no later than 30 June 2011.
The Parties shall proceed to develop Phase 2 upon signing the relevant Financing
Agreements.

 

3.4

Establishment of each Company

 

 

(a)

The Parties acknowledge and shall procure that each Company will be established
by the relevant Shareholders in accordance with the Applicable Laws of the
Kingdom.

 

 

 

(b)

Promptly following the Effective Date, the Parties shall procure that the
relevant Shareholders shall apply to SAGIA for the issuance of the Foreign
Investment Licence in relation to each Company.

 

 

 

(c)

Promptly following the issuance of the Foreign Investment Licence for each
particular Company, the Articles of Association of such Company shall be
submitted to the Ministry and the Parties shall procure that the relevant
Shareholders shall use all reasonable efforts to complete the incorporation of
each Company. The Parties agree that each Company's Articles of Association will
be in the Agreed Form attached hereto as Schedule 2, an Arabic version of which
shall be submitted to the Ministry for approval. If any changes are requested by
the Ministry, the Articles of Association will be amended and resubmitted only

 

 

23

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after the Parties have consented thereto, such consent not to be unreasonably
withheld, conditioned or delayed. Promptly following approval of the Articles of
Association by the Ministry, the Parties will cause the authorized
representatives of the relevant Shareholders to execute the Articles of
Association before the competent notary public in the Kingdom and thereafter
shall take such further actions as shall be necessary to complete the
incorporation and registration of each Company in the Commercial Register as
soon as possible, and in accordance with the requirements of Clauses 3.5, 3.6
and 4.1 (a).

 

3.5

Details of each Company

 

The Parties acknowledge and agree that:

 

 

(a)

Each Company will be formed for a period of fifty (50) years starting from the
date of its registration in the Commercial Register, as may be extended pursuant
to the terms of the Articles of Association and this Agreement;

 

 

 

(b)

Notwithstanding paragraph (a) above, the term of the Joint Venture shall be as
specified in Clause 2.2;

 

 

 

(c)

The names of the Companies shall be (i) Ma'aden Bauxite & Alumina Company, which
will operate the Mine at Al Ba'itha and the Refinery at Ras Az Zawr (the "Mining
& Refining Company"); (ii) Ma'aden Aluminium Company, which will operate the
Smelter at Ras Az Zawr (the "Smelting Company"); and (iii) Ma'aden Rolling
Company, which will operate the Rolling Mill at Ras Az Zawr (the "Rolling
Company"), or in each case such other name as may be approved by the Parties
from time to time in accordance with this Agreement and set out in, or in an
amendment to the Articles of Association of such Company which have been duly
filed and/or registered in the Commercial Register in accordance with Applicable
Laws of the Kingdom;

 

 

 

(d)

The registered office of each Company shall be in Jubail in the Kingdom, or such
other place in the Kingdom as may be approved by the Parties from time to time
in accordance with this Agreement and set out in an amendment to the Articles of
Association of such Company which has been duly filed and/or registered with the
Commercial Register in accordance with Applicable Laws of the Kingdom;

 

 

 

(e)

Each Company shall be domiciled in the Kingdom and shall not conduct business in
any jurisdiction other than the Kingdom, except as may be necessary or
incidental to the Project, without the prior approval of the relevant Board of
Managers given in accordance with this Agreement.

 

 

 

3.6

Purpose

 

 

(a)

The Parties acknowledge and agree that (i) the Companies are a profit centre
separate to each of the Parties' other business(es), and (ii) subject to the
terms and conditions of this Agreement, the Parties shall procure (either
directly or through the relevant Shareholders appointed by them) that each
Company shall conduct its affairs, and each of the Parties shall (and shall
procure that the relevant Shareholders appointed by them shall) conduct its
dealings with such Company, in such a way as to promote the Company's business
and the profitability of the Project.

 

 

 

(b)

The Parties acknowledge and agree that the purpose of each Company is and shall
be to engage in the following commercial activities, subject to the terms and
conditions of this Agreement and in accordance with the contractual arrangements
by which it is bound:

 

 

 

(i)

Collectively, the development, construction, ownership and operation of the
Mine, the Refinery, the Smelter and the Rolling Mill in the Kingdom;

 

 

24

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(ii)

In the case of the Mining & Refining Company, initially the extraction of
approximately 4,000,000 tpa of Bauxite from the Al Ba'itha bauxite deposit in
the Kingdom and the production of approximately 1,800,000 tpa of Alumina;

 

 

 

(iii)

In the case of the Smelting Company, initially the production of approximately
740,000 tpa of Aluminium;

 

 

 

(iv)

In the case of the Rolling Company, initially the production of approximately
250,000 tpa, which may be increased to 460,000 tpa of Rolling Mill products (the
"Products"); and

 

 

 

(v)

Implementation of Expansions of the Project, and production of the resulting
increased quantities of the Products.

 

 

 

(c)

The Parties acknowledge that priority on the allocation and marketing of Excess
Alumina will be given to Expansions of the Smelter, followed by domestic demand
and then to export to international markets.

 

 

 

(d)

In accordance with the Gas Allocation letter and as referred to in Clause 5.5,
the Parties acknowledge and agree that the Companies are required to support the
development of downstream businesses in the Kingdom.

 

 

 

4.

Share Capital, Funding by Shareholders and Financing Completion Date

 

4.1

Share Capital as of Incorporation

 

 

a.

The Parties acknowledge that each Company shall be incorporated with an initial
Share Capital, and the ownership of such shares as at the date of incorporation
shall be, as set out in the tables below:

 

 

(i) In the case of the Mining & Refining Company:

 

Shareholder

Shareholder Percentage

Number of Shares

Paid In Capital

Ma'aden

74.9%

381,990

SR 3,819,900,000

Alcoa

25.1%

128,010

SR 1,280,100,000

TOTAL

100%

510,000

SR 5,100,000,000

 

(ii)

In the case of the Smelting Company:

 

Shareholder

Shareholder Percentage

Number of Shares

Paid In Capital

Ma'aden

74.9%

381,990

SR 5,729,850,000

Alcoa

25.1%

128,010

SR 1,920,150,000

TOTAL

100%

510,000

SR 7,650,000,000

(iii)In the case of the Rolling Company:

 

Shareholder

Shareholder Percentage

Number of Shares

Paid In Capital

Ma'aden

74.9%

292,110

SR 2,921,100,000

Alcoa

25.1%

97,890

SR 978,900,000

TOTAL

100%

390,000

SR 3,900,000,000

 

25

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(b)

Each Share shall entitle the holder thereof to one (1) vote on each matter
coming before the Shareholders.

 

 

 

(c)

Notwithstanding anything to the contrary contained in the Articles of
Association of each Company, each Share shall entitle the holder thereof to
receive Share Distributions in accordance with Clause 11 of this Agreement."

 

 

 

4.2

Required  Shareholder Funding

 

 

(a)

From the Effective Date until the date of incorporation of each Company and
appointment of the Board of Managers for such Company, funding calls will be
issued by the Development Committee (a "Development Committee Funding Call") in
accordance with the Pre-Financing Budget and shall be funded by the Parties
and/or their Affiliates into the Project Account in proportion to their proposed
Shareholder Percentages for each relevant Company set out in Clause 4.1 within
fourteen (14) days of the request, subject to the Parties' rights to
reimbursement in accordance with Clause 13.

 

 

 

(b)

Following the incorporation of a Company and appointment of its Board of
Managers, the Board of Managers may from time to time issue a Cash Call to the
Shareholders in accordance with their Shareholder Percentages for Equity
Subscriptions and, Shareholder Loans (in the proportions determined by the
Parties), in accordance with approved Budgets including initially the
Pre-Financing Budget and, when superseded, the Project Budget. The Equity
Subscriptions and Shareholder Loans shall each separately be proportionate to
the Shareholder Percentages of the respective Shareholders. The Parties shall
procure that the relevant Shareholders nominated by them shall pay or advance
such funds to such Company and, in respect of any Equity Subscription, the Paid
In Capital of each of the Shareholders in the Company shall be adjusted
accordingly. For the purposes of this Agreement, "Required Shareholder Funding"
shall comprise all funding that the Shareholders (or any of them) have advanced
or are required to advance (or procure the advancing ot) to each Company in
accordance with the approved Budgets or as otherwise required in accordance with
this Agreement, including by way of Equity Subscriptions and Shareholder Loans
(but shall exclude any Senior Debt provided by a Shareholder or its Affiliates).

 

 

4.3

Shareholder Loans

 

In the event that the Parties determine that a Cash Call issued by a particular
Board of Managers should comprise in whole or part Shareholder Loans, the
Parties shall procure that the Shareholders shall each, and shall also procure
that such Company shall, within fifteen (15) days of the request by the Board of
Managers to do so, execute one or more subordinated loan agreements between the
relevant Shareholders and such Company (the "Shareholder Loan Agreements")
requiring the relevant Shareholders, conditional on achieving the Financing
Completion Date for the relevant Phase, to advance amounts to such
Company  pursuant  to  Cash  Calls  in  accordance  with  Clause 4.2(b).

 

26

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4.4

Form and Manner of Funding by Shareholders

 

 

(a)

Unless otherwise approved by the Board of Managers of a relevant Company in
accordance with this Agreement, all Cash Calls by each Board of Managers shall:

 

 

 

(i)

be in an amount that corresponds to an approved Budget (which shall be
referenced in the Cash Call), be given at such times and in respect of such
amounts as correspond to the cash requirements of the particular Company and, to
the extent possible, correspond with the timing contemplated by such approved
Budget;

 

 

 

(ii)

be made by notice in writing to all Shareholders not less than ten (10) Business
Days prior to the date (the "Funding Deadline"), which shall be a Business Day,
by which such Required Shareholder Funding subject to the Cash Call is required
to be made;

 

 

 

(iii)

specify the amount required to be advanced by the affected Shareholder(s) in
accordance with this Agreement;

 

 

 

(iv)

specify whether the amount is required to be advanced by way of Equity
Subscription and or Shareholder Loan;

 

 

 

(v)

specify the Funding Deadline; and

 

 

(vi)

set out details of the bank account of the Company into which the Required
Shareholder Funding subject to the Cash Call should be deposited.

 

 

 

(b)

All Required Shareholder Funding pursuant to this Clause 4 shall be made in the
form of cash and in respect of equity shall be made in Saudi Riyals and in
respect of Shareholder Loans shall be made in either Saudi Riyals or US Dollars,
as agreed by the Parties.

 

 

 

(c)

All Shareholder funding made under this Clause 4 shall be directly deposited
into a separate bank account of the relevant Company established for such
purpose which shall be specified in the relevant Cash Call and (together with
any interest or investment income earned thereon) shall be the absolute property
of such Company for its own account and used by such Company in accordance with
this Agreement.

 

 

 

(d)

Subject to Applicable Laws in the Kingdom and Clause 7.2(a)(ii), when considered
appropriate by the relevant Board of Managers, including for purposes of
avoiding potential application of Article 180 of the Company Law, the Parties
shall procure that the Shareholders shall promptly resolve and otherwise procure
and take all steps and execute and deliver all instruments necessary or
desirable, including without limitation  amending the Articles of Association of
the relevant Company (without requiring separate approval under Clause 7.2(a)),
to convert Shareholder Loans into Share Capital by releasing and discharging
such principal amount of Shareholder Loans (then outstanding from each
Shareholder to the relevant Company) in consideration for the issuance by the
Company of that number of Shares so as to increase the Share Capital to an
appropriate level. Any Shareholder Loans so converted shall be converted into
Shares pro rata to the then Shareholder Percentages of the Shareholders and in a
manner which does not vary the Shareholder Percentages of the Shareholders post
conversion.

 

 

 

4.5

Default Commission Rate

 

If a Shareholder fails to pay or advance an amount in accordance with this
Clause 4 by the Funding Deadline or the deadline specified in Clause 4.2(a) (in
the case of a Development Committee Funding Call), the unpaid amount of such
Required Shareholder Funding or under such Development Committee Funding Call
(as the case may be) shall bear a commission  (the "Default

 

27

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Commission") from and after the date due to the date such amount is paid at a
rate per annum equal to the Commission Rate plus two percent (2%), payable upon
demand by the relevant Company or the non-defaulting Shareholder or, failing
such demand, monthly in arrears. Any calculation of Default Commission under
this Clause 4.5 shall be made on the basis of the actual number of days elapsed
and a three hundred and sixty (360) day year.

 

4.6

Limitations and Shareholder Funding

 

No Party, nor any of its Affiliates that are Shareholders in a particular
Company, shall be under any obligation to provide  funding,  directly
or  indirectly,  to a Company  except  pursuant  to this Clause 4 or Clause 10.

 

4.7

Pledge

 

Except as required pursuant to, and subject to, the terms of the Financing
Agreements, no Shareholder may pledge, mortgage, charge or grant any other
security interest ("Security Interest") over all or any part of its Shares or
Shareholder Loans unless such Shareholder obtains the prior written consent of
the other Shareholder to such Security Interest.

 

 

4.8

Adherence Agreement

 

Subject to Clause 4.9(b), a person who is not a Shareholder shall not acquire,
or be permitted to acquire, any Shares or Shareholder Loans in a Company: (1)
other than in accordance with and pursuant to the provisions of this Agreement;
and (2) unless such person shall have first executed an Adherence Agreement to
this Agreement in the form attached hereto as Schedule 5 ("Adherence Agreement")
on or prior to the completion of such acquisition of any Shares or Shareholder
Loans. Without limiting the foregoing, Alcoa intends to hold its Shares in each
of the Companies through an Affiliate and shall procure that each such Affiliate
shall enter into an Adherence Agreement on or prior to the issuance of any
Shares to such Affiliate. The Parties acknowledge that on receipt of an
Adherence Agreement in accordance with the terms of this Agreement, a New
Shareholder (as defined in the form of the Adherence Agreement) shall be deemed
to have been added as a party to this Agreement and all references to
Shareholder or Shareholders, shall include the New Shareholder.

 

 

4.9

Financing Completion Date

 

 

(a)

The Parties intend that the Financing Completion Date for each Phase shall occur
no later than the dates specified in Schedule 15 and, in any event, in respect
of Phase 1 by no later than the Financing Longstop Date or such other dates as
may be resolved by the relevant Board of Managers pursuant to Clause 8.5(a) (and
provided that there is no obligation to agree on any change to such dates and a
failure to agree on any change to such dates shall not constitute a Deadlock for
the purposes of this Agreement).

 

 

 

(b)

As soon as is reasonably practical after the Financing Completion Date for each
Phase, the Parties shall procure that the relevant Shareholders shall procure
that the Foreign Investment Licence, Articles of Association and Commercial
Register shall be amended so as to formalize the increase in capital and
issuance of the additional Shares.

 

 

 

(c)

Subject to the provisions of Clause 6.3, as soon as is reasonably practical
after the Financing Completion Date for each Phase, and in any event no later
than the closing date of the first drawdown of funds pursuant the Financing
Agreements for such Phase, the Parties shall procure that the relevant
Shareholders shall procure that each relevant Company shall execute all material
Project Agreements and Ancillary Agreements not executed prior to such date in
respect of such Phase.

 

 

28

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5

Responsibilities of the Parties

 

5.1

Roles of the Parties

 

The organization, development, and operation of each Company and the Project
will capitalize on the strengths and experience brought by each of the Parties,
who will provide such assistance pursuant to the terms of this Agreement and the
Ancillary Agreements.

 

 

 

5.2

Role of Ma'aden

 

Alcoa acknowledges and agrees that Ma'aden possesses extensive experience and
know-how in respect of mining, infrastructure, local regulatory compliance,
local procurement of goods and services, land related matters and project
development in the Kingdom. Accordingly, the Parties shall ensure that each
Company shall consult with Ma'aden, and Ma'aden (or as the case may be, its
Affiliates) shall provide assistance and support to such Company and, as
applicable, shall perform other specified services and obligations, with respect
to such matters in the manner provided in, and upon and subject to the terms and
conditions of, this Agreement and the relevant Ancillary Agreements entered into
by Ma'aden (or as the case may be, its Affiliates) in the Agreed Forms, in
accordance with Schedule 9. Such assistance and support and other obligations
shall be performed on an "at cost" basis except where an arm's length Ancillary
Agreement is to be entered into in accordance with Schedule 9. For the purposes
of this Clause 5.2, "at cost" means: in relation to services and support
provided by Ma'aden's or its Affiliates' personnel, the costs attributable to
base salary plus benefits and burdens of such personnel for the periods in which
such services and support are being performed; and in relation to other services
and support, the actual direct costs properly incurred by Ma'aden or its
Affiliates to third parties in performing the same.

 

5.3

Role of Alcoa

 

Ma'aden acknowledges and agrees that Alcoa possesses extensive experience and
know-how with respect to bauxite mining, alumina refining, aluminium smelting
and rolling mill operations. Accordingly, the Parties shall ensure that each
Company shall consult with Alcoa, and Alcoa (or, as the case may be, its
Affiliates) shall provide assistance and support to such Company and, as
applicable, shall perform other specified services and obligations, with respect
to such matters provided in, and upon and subject to the terms and conditions
of, this Agreement and the relevant Ancillary Agreements entered into by Alcoa
(or its Affiliates) in the Agreed Forms, as more particularly described in
Schedule 14. Such assistance and support and other obligations shall be
performed on an "at cost" basis except where an arm's length Ancillary Agreement
is to be entered into in accordance with Schedule 9. For the purposes of this
Clause 5.3 and Clause 16.4, "at cost" means: in relation to services and support
provided by Alcoa's or its Affiliates' personnel, the costs attributable to base
salary plus benefits and burdens of such personnel for the periods in which such
services and support are being performed and subject to grossing up such costs
to the extent that withholding tax is payable in respect of such costs; and in
relation to other services and support, the actual direct costs properly
incurred by Alcoa or its Affiliates to third parties in performing the same.

 

5.4

Aluminium Offtake

 

 

(a)

The Parties (or one of their respective Affiliates), the Smelting Company and
the Rolling Company will enter into the Cast House Users' Agreement
substantially in the form of Schedule 6 under which the Smelting Company will
co-ordinate the provision of cast house services, including to the Rolling
Company.

 

 

 

(b)

Subject to paragraph (c) below, the Parties or such of their respective
Affiliates shall each enter into an offtake agreement with the Smelting Company
in the Agreed Form in accordance with the timeline for execution specified in
Schedule 9, for the purchase of their

 

 

29

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pro rata share (based on their Shareholder Percentage) of each type of Aluminium
product produced by the Smelting Company.

 

 

(c)

The Parties shall procure that the Smelting Company shall allocate such
quantities of Aluminium to the Rolling Company as are required for the operation
of the Rolling Mill and such allocated quantities shall be taken to reduce the
amount of Aluminium provided by the Smelting Company and available to Parties
pursuant to paragraph (b) above.

 

 

 

(d)

In the event that the Parties fail to achieve the milestone dates relating to
the Rolling Mill as indicated in Schedule 15, the Parties acknowledge that the
Smelting Company will be required to allocate 275,000 tpa of Aluminium to other
entities determined by the Ministry of Petroleum in accordance with the Gas
Allocation Letter. Such allocation shall be divided pro rata to each Parties'
Shareholder Percentage and each Party shall be obliged to sell such amount of
Aluminium at a price equal to the full cost of production to such entities
determined by the Ministry of Petroleum.

 

 

 

(e)

The Parties shall use their reasonable efforts to (i) assist the Smelting
Company in obtaining the required LME registration for Aluminium to be produced
by it, and (ii) ensure that such registration is obtained in a timely manner.
Each Party shall bear its own costs in relation to assisting the Smelting
Company in obtaining the  LME  registration  pursuant  to  this Clause 5.4.

 

 

 

5.5

Support for Downstream Industry and Priority to the Domestic Market

 

 

(a)

In accordance with the Gas Allocation Letter, the Parties (or their Affiliates)
shall, in priority to export markets, enter into long-term supply agreements
with companies in the Kingdom that wish to purchase raw materials from among the
Products produced by each Company and, where applicable, sold to the Parties (or
their Affiliates) under each Parties' Offtake Agreement with the relevant
Company (as specified in Schedule 9) or sold by the Rolling Company (if
applicable).

 

 

 

(b)

Such supply agreements shall be long-term supply agreements based on competitive
terms and conditions, including market based pricing, and, where applicable, on
the terms outlined in the Parties' respective Offtake Agreements with the
relevant Company. Furthermore, the Parties shall work diligently to promote and
support the establishment of downstream industries in the Kingdom, based on the
Products produced by the Smelting Company and/or the Rolling Company.

 

 

 

5.6

  S

 

 

(a)

[INTENTIONALLY OMITTED.

 

 

5.7

S[INTENTIONALLY OMITTED]

 

 

5.8

Alumina Supply Arrangements and Excess Alumina

 

(a)

During the period between the date on which the Smelter becomes operational and
the date on which the Refinery begins to supply the Smelter's requirements for
Alumina, upon request of the Smelting Company, Alcoa (or its Affiliates) will
supply Alumina to the Smelting Company in such quantities and at such times as
requested, and at a market price formula agreed by the Parties. If at any time
thereafter the Mining & Refining Company becomes unable, including due to
operational interruptions in Alumina production, to supply the Smelting
Company's requirements for Alumina, Alcoa will offer its and its Affiliates'
services as agent to locate other sources of Alumina in the market.

 

 

30

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(b)

Alcoa will also offer, as agent, to market any Excess Alumina that the Mining &
Refining Company may have available for sale from time to time at prevailing
market prices and in return for a reasonable commission to be agreed.

 

 

5.9

Capacity Expansions

 

 

(a)

The Parties acknowledge that it is their intention to implement future capacity
expansions across all elements of the Project in the manner described in this
Agreement ("Expansion") and to consider engaging in or otherwise supporting
downstream manufacturing.

 

 

 

(b)

Any Party may require a particular Company to undertake a feasibility study into
any potential Expansion. The Parties agree that decisions to implement
Expansions shall be taken, in good faith, based on the commercial, economic and
strategic viability of the Expansion, following the completion of the
feasibility study by such Company. Any decision to implement any Expansion shall
be made in accordance with the provisions of Clause 8.5(b).

 

 

 

(c)

An Expansion shall be financed in accordance with a financing plan for such
Expansion that has been approved by the relevant Board of Managers in accordance
with this Agreement.

 

 

 

(d)

Each Party shall, and shall procure that the relevant Manager(s) appointed by
it, act and vote reasonably and in good faith in connection with the approval of
an Expansion and, if approved, in relation to the implementation and financing
of the Expansion.

 

 

 

(e)

In the context of an Expansion carried out by a particular Company, the Parties
shall endeavour to cause such Company (i) to minimise any disruption in the
production levels of the Project, including the Mine and/or the Complex, during
the period in which the Expansion is effected and (ii) to procure that the
Expansion is effected in accordance with good industry practice.

 

 

 

(f)

Each Party shall, and shall procure that any of its Affiliates that are
Shareholders shall, execute such documents as necessary in order to ensure the
intent of this Clause 5.9 is achieved, including to effect such amendments as
may be necessary to reflect the increase in capacity of the Mine and/or the
Complex, the relevant Company's capital and its ownership, and to amend its
Articles of Association and such Company's Commercial Registration accordingly.
Where a decision to implement an Expansion within the relevant Company is taken
by its Board of Managers in accordance with Clause 8, each Party shall, and
shall procure that any of its Affiliates that are Shareholders shall, exercise
their voting rights and do all such things and execute all such documents as may
be required to give effect to such decision of such Board of Managers.

 

 

 

5.10

Break-Off Projects

 

 

(a)

If Ma'aden makes an Expansion proposal in accordance with Clause 5.9 and such
Expansion proposal is not approved by the relevant Board of Managers in
accordance with this Agreement at two (2) non-successive Board meetings of the
relevant Company, held at least five (5) months apart, at which such Expansion
proposal is presented for approval, then Ma'aden shall have the right (the
"Break-Off Right") itself or through an Affiliate to proceed to develop,
construct, own and operate the Expansion to which such Expansion proposal
relates (the "Break-Off Project"). Ma'aden may develop, construct, own and/or
operate the Break-Off Project either itself or through a special purpose project
company (the "Break-Off Project Company") which it Controls. The Break-Off Right
shall terminate if (i) Ma'aden has not given formal notice to the relevant
Company (the "Break-Off Project Notice") of its intention to proceed with such
Expansion within the period of sixty (60) days after the second of the two
non-successive Board of Managers meetings where the relevant Board of  Managers
resolved not to proceed with such  Expansion, or (ii) notice to proceed

 

 

31

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under the relevant Construction Agreements for the Break-Off Project is not
given within eighteen (18) months of the date of the Break-Off Project Notice.
For the avoidance of doubt, if any Break-Off Right so terminates, the proposed
Expansion (or any Expansion substantially similar to such proposed Expansion)
must again be submitted to the relevant Company in accordance with Clause 5.9.

 

 

(b)

If Ma'aden gives a Break-Off Project Notice pursuant to paragraph (a) above, the
relevant Company shall, and the Parties shall procure that the other
Shareholders shall procure that such Company shall, negotiate in good faith with
Ma'aden, its Affiliates and/or the Break­ Off Project Company with a view to
such Company entering into a shared services agreement (a "Shared Services
Agreement") with Ma'aden, its Affiliate and/or the Break­ Off Project Company
pursuant to which such Company shall provide certain services and/or make
available certain facilities in order to support and facilitate the development,
construction and operation of the Break-Off Project. In connection with any such
negotiations, the Parties shall ensure that the following principles shall be
applied by the parties to such negotiations:

 

 

 

(i)

the relevant Company and Ma'aden, its Affiliates and/or the Break-Off Project
Company shall cooperate in relation to the conduct of the Project and the
Break-Off Project;

 

 

 

(ii)

the relevant Company shall, to the extent that doing so does not disrupt the
Project, seek to accommodate the needs of the Break-Off Project, including, for
the avoidance of doubt, allowing the Break-Off Project to interface with and
share the plant and facilities of the Project, at the cost of Ma'aden, its
Affiliates and/or the Break-Off Project Company; and

 

 

 

(iii)

the relevant Company shall provide such reasonable supplies including
intermediate Products, services, leases, licences, easements and other rights
and facilities as are reasonably requested by the Break-Off Project, provided
that such Company shall only be obliged to provide services to the Break-Off
Project:

 

 

 

(A)

to the extent that it has spare capacity, taking into account its current or
reasonably predicted future usage of that capacity;

 

 

 

(B)

provided that there are no technical incompatibilities which reasonably could be
expected to have an adverse effect on the Project and which cannot reasonably be
overcome;

 

 

 

(C)

provided that no capital expenditures are required of such Company, or
alternatively the Break-Off Project funds such capital expenditure;

 

 

 

(D)

provided that the arrangements do not adversely impact on the security and
regularity of supplies of energy and raw materials to such Company; and

 

 

 

(E)

provided that the provision of such services would not prejudice the efficient
current and planned future production of Aluminium by the Project.

 

 

For the purpose of this Clause 5.10(b)(iii). services, leases, easements and
utilities shall be provided on a "full cost" basis (including capital and
operating costs). If so required by the Break-Off Project, any intermediate
Products, intellectual property licences or other rights and facilities shall be
provided on a reasonable basis to be agreed with reference to the cost to the
relevant Company of providing such, as well as to the advantage to the Break-Off
Project in receiving rather than resorting to a third party provider (if
available).

 

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The Parties shall ensure that the Shared Services Agreement shall contain
provisions requiring the Break-Off Project Company to comply with detailed
reporting requirements, including as regards submitting to the relevant Company
monthly progress reports during the  pre-commercial operation phase of the
Break-Off Project and quarterly operations reports post commercial operation of
the Break-Off Project. All  reports shall be  in such  form  and  provide
such  information  as is customary and shall further contain such additional
information  as  the  relevant  Company  may  reasonably request  from time to
time.

 

 

5.11

Value Added Projects

 

 

(a)

If a Party or any of its Affiliates wishes to develop, construct, operate or
otherwise implement, or participate in, any Value Added Project, it may, but
shall not be obliged to, inform the relevant Company and the other Party
proposing that such Company implement, or participate in, the Value Added
Project. In such event, the Party shall set out such details of the proposed
Value Added Project as are reasonably necessary to enable the relevant Board to
make a reasoned judgement concerning the merits of such Value Added Project.
Notwithstanding the foregoing, if any such Value Added Project is likely to be a
substantial supplier to, or customer of, a Company (measured either by revenues
or by percentage of total purchases or sales), the relevant Party shall inform
the other Party and the relevant Company, and the Parties shall consult on the
effects on the relevant Company of any arrangement proposed to be entered into
between the Value Added Project and such Company but, for the avoidance of
doubt, informing the other Party and such Company as aforesaid should not be
deemed to be an offer to participate in the Value Added Project.

 

 

 

(b)

If the implementation of, or the participation in, a Value Added Project
proposed by a Party in accordance with paragraph (a) above is approved by the
relevant Board of Managers in accordance with this Agreement, the Parties shall
procure that the relevant Company proceeds to implement, or participate in (as
applicable), such Value Added Project in such manner as is determined by such
Board of Managers.

 

 

 

(c)

If the implementation of, or participation in, a Value Added Project proposed by
a Party in accordance with paragraph (a) above is not approved by the relevant
Board of Managers within ninety (90) days of such Board meeting at which the
proposal was first presented to the Board of Managers for approval, then the
Party whose appointed Manager(s) voted in favour of such Value Added Project at
such Board of Managers meeting shall be entitled itself or through an Affiliate
to implement, or participate in, the Value Added Project (on a basis
substantially similar to that set out in the relevant notice) outside the
relevant Company in partnership, joint venture or in such other relationship
with any other person as such Party may determine.

 

 

 

(d)

Notwithstanding the foregoing provisions of this Clause 5.11, each Party shall
use its reasonable efforts to procure that the relevant Company shall not
implement, or participate in, any Value Added Project in a manner that would
constitute, or cause such Company to commit, a breach of such Company's
obligations under any Project Agreements or Financing Agreements.

 

 

 

5.12

Responsibilities under the Gas Allocation Letter

 

 

(a)

The Parties acknowledge that the Gas Allocation Letter contains requirements in
respect of the implementation of the Project which are to be supported by the
provision by Ma'aden (on behalf of the Companies) of an irrevocable letter of
credit in the amount of US$ three hundred and fifty million (US$350,000,000)
(the "Ma'aden LOC"). The Ministry of Petroleum has the right to call on the
Ma'aden LOC in the event that the requirements of the Gas Allocation Letter are
not met.

 

 

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(b)

The Parties agree and acknowledge that a failure to satisfy the requirements of
the Gas Allocation Letter resulting in a claim under the Gas Allocation Letter
or a call under the Ma'aden LOC is a risk of the Project to be borne by the
Parties in proportion to their respective  Shareholder Percentages.

 

 

 

(c)

Alcoa shall provide to Ma'aden, within fourteen (14) days of Ma'aden's written
request, and in any case prior to the deadline under the Gas Allocation Letter
for provision of a letter of credit to the Ministry of Petroleum, a separate
irrevocable and unconditional letter of credit issued by a financial institution
acceptable to Ma'aden in an amount equal to Alcoa's pro rata share of the amount
stated in paragraph (a) above based on its Shareholder Percentage (the "Alcoa
LOC"). The Alcoa LOC shall have a term of not less than one (I) year and at
least thirty (30) days prior to its expiry, Alcoa shall either (i) cause the
issuing bank to provide a notice of renewal satisfactory to Ma'aden or (ii)
provide a notice of replacement to Ma'aden together with a replacement letter of
credit fulfilling the requirements of this Clause 5.12(c).

 

 

 

(d)

Ma'aden shall be entitled to call on the Alcoa LOC in the event that Ma'aden is
required to make payment for a failure to meet the requirements of the Gas
Allocation Letter or the Ministry of Petroleum calls under the Ma'aden LOC,
provided that any liability incurred to the Ministry of Petroleum under the Gas
Allocation Letter shall be borne by the Parties in proportion to their
Shareholder Percentages.

 

 

 

(e)

On satisfaction of the requirements of the Gas Allocation Letter and the return
of the Ma'aden LOC to Ma'aden, Ma'aden shall, within five Business days
thereafter, return the Alcoa LOC to Alcoa.

 

 

 

(f)

Any failure by Alcoa to comply with the requirements of this Clause 5.12 for any
reason whatsoever shall be deemed to be an Event of Default by Alcoa under
Clause 14.l(e).

 

 

 

5.l 3

Provision of lnformation by Parties and the Companies

 

 

(a)

In regard to the operations of the Companies and all matters governed by this
Agreement, if a Party, a Shareholder or a Company becomes aware that any of its
(or its Affiliate's) or the Companies' directors, employees or Agents have, or
in the future will, pay, offer, promise, or authorize the payment of money or
anything of value, directly or indirectly, to a Government Official while
knowing that any portion of such exchange is for the purpose of:

 

 

 

(i)

influencing any act or decision of a Government Official in its official
capacity, including the failure to perform an official function, in order to
assist itself, a Company or any other person in obtaining or retaining business,
or directing business to any third party;

 

 

 

(ii)

securing an improper advantage;

 

 

(iii)

inducing a Government Official to use its influence to affect or influence any
act or decision of a Governmental Authority in order to assist itself, a Company
or any other person in obtaining or retaining business, or directing business to
any third party; or

 

 

 

(iv)

providing an unlawful personal gain or benefit, of financial or other value, to
a Government Official,

 

 

that Party, Shareholder or Company, as the case may be, shall promptly inform
the Board of the relevant Company.

 

 

(b)

Where as a result of an activity carried on or proposed to be carried on by a
Company a Government  Authority makes an enquiry or request  for information in
relation  to a legal,

 

 

34

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compliance or regulatory requirement of such Company or Party under Applicable
Laws, the Parties shall co-operate with one another and the Company in relation
to that enquiry or request for information. Upon request by a Party or a
Company, as the case may be, the other Party (or Parties in the case of a
request made by a Company) shall provide all reasonable information and
assistance required by such Party or Company in respect of such enquiry or
request for information.

 

 

6.

Transfer of Existing Project Assets; Project Agreements

 

6.1

Transfer of Ma'aden Existing Project Assets

 

 

(a)

As soon as reasonably practicable after the incorporation of each relevant
Company, Ma'aden shall sell, transfer and assign all of its right, title and
interest (including all accrued rights) in and to each of Ma'aden's existing
Project assets as listed in  Schedule 11 ("Ma'aden Existing Project Assets") to
the relevant Company (as determined by the Parties) and the Parties shall
procure that such Company purchases or, as the case may be, receives and accepts
the transfer and assignment of each of the Ma'aden Existing Project Assets. The
sale, transfer and assignment of any Ma'aden Existing Project Assets pursuant to
this Clause 6.1 shall not be subject to, or conditional upon, the sale, transfer
or assignment of any other of the Ma'aden Existing Project Assets or any of the
Alcoa Existing Project Assets.

 

 

 

(b)

Ma'aden shall use its best efforts to give effect to the provisions of paragraph
(a) above and, without limiting the generality of the foregoing, shall:

 

 

 

(i)

execute appropriate Deeds of Transfer transferring each of the Ma'aden Existing
Project Assets to the relevant Company;

 

 

 

(ii)

procure (if appropriate) the re-issuance of, or transfer by, the appropriate
Governmental Authority (on terms not materially less favourable to the relevant
Company) of any relevant Ma'aden Existing Project Assets to the relevant
Company; and

 

 

 

(iii)

execute and procure the execution of any additional documents and take further
action as is necessary or reasonably requested by Alcoa to effectuate the intent
of this Clause 6.1.

 

 

 

6.2

Transfer of Alcoa Existing Project Assets

 

(a)

As soon as reasonably practicable after the incorporation of each relevant
Company, Alcoa shall sell, transfer and assign all of its right, title and
interest (including all accrued rights) in and to each of the Alcoa existing
Project assets as listed in Schedule 12 ("Alcoa Existing Project Assets") (if
any) to the relevant Company (as determined by the Parties) and the Parties
shall procure that such Company purchases or, as the case may be, receives and
accepts the transfer and assignment of each of the Alcoa Existing Project
Assets. The sale, transfer and assignment of any Alcoa Existing Project Assets
pursuant to this Clause 6.2 shall not be subject to, or conditional upon, the
sale, transfer or assignment of any of the other of Alcoa Existing Project
Assets or any of the Ma'aden Existing Project Assets.

 

 

 

(b)

Alcoa shall use its best efforts to give effect to the provisions of paragraph
(a) above and, without limiting the generality of the foregoing, shall:

 

 

 

(i)

execute appropriate Deeds of Transfer transferring each of the Alcoa Existing
Project Assets to the relevant Company; and

 

 

35

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(ii)

execute and procure the execution of any additional documents and take further
action as is necessary or reasonably requested by Ma'aden to effectuate the
intent of this Clause 6.2.

 

 

 

6.3

Project Agreements signed post-Effective Date but before Company Formation

 

 

(a)

Promptly following the Effective Date, the Party that is identified as a party
to any Ancillary Agreements shall, or shall procure that its relevant Affiliates
that are identified as parties thereto shall, use its reasonable efforts to
approve Agreed Forms of such Ancillary Agreements (with the exception of
Ancillary Agreements that are in Agreed Form on or prior to the Effective Date),
and shall execute, and the Parties shall procure that the relevant Company shall
execute, the Ancillary Agreements in the Agreed Form forthwith after the
Effective Date in accordance with Schedule 9. The Parties agree and acknowledge
that all Ancillary Agreements shall be entered into on arm's length commercial
terms.

 

 

 

(b)

The Parties shall use their reasonable efforts to ensure that, with the
exception of such of the Project Agreements that are in the Agreed Form, the
Project Agreements (other than the Ancillary Agreements and the Financing
Agreements) are negotiated and executed on the most favourable terms and
conditions for the relevant Company as may be reasonably obtainable and, where
applicable, in accordance with the timeline for the execution as specified by
the Board of Managers.

 

 

7.

Shareholders’ Meetings

 

 

7.1

Shareholders' Meetings

 

The Shareholders shall act through general meetings and resolutions duly held
and adopted in accordance with the terms and conditions of this Agreement, the
Articles of Association and Applicable Laws in the Kingdom. To the extent
permitted by Applicable Laws in the Kingdom, a Shareholder may participate in
Shareholders' Meetings in person or by video conference or tele­ conference,
and/or may appoint a proxy or proxies to represent it in such meetings.

 

 

7.2

Supermajority Items

 

 

(a)

The Parties agree that no action taken by any Company with respect to any of the
following matters shall have any effect, in each case unless and until such
matter shall have been approved by a resolution passed at a duly convened
meeting of the Shareholders of the relevant Company at which a quorum is present
by the affirmative votes of the relevant Shareholders in attendance or duly
represented at such meeting who are entitled to vote on such resolution in
accordance with this Agreement and holding in the aggregate not less than
seventy five percent (75%) of the Share Capital:

 

 

 

(i)

Any amendment of the Articles of Association (including any change of name of
the Company) other than in accordance with Clauses 4.4(d) and 4.9(b);

 

 

(ii)

Any change in the business object or shareholding structure of the Company,
including any increase or reduction in the Share Capital or issuance of Shares
or options on Shares by the Company (other than any increase in the Share
Capital or issuance of Shares previously authorised in connection with the
Required Shareholder Funding);

 

 

 

(iii)

Any liquidation or winding up of the Company (including voluntary dissolution of
the Company);

 

 

 

(iv)

Any sale or other disposition of all or a substantial part of the Company's
business or assets, or any merger of the Company with or into any other entity;

 

 

36

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(v)

Appointment, replacement, or removal of the Company's Auditors;

 

 

(vi)

Any decision regarding the distribution of the Company's available profits other
than in accordance with Clause 11.3, including without limitation, any decision
to establish reserves other than the statutory reserve or to carry forward the
Company's profit balance in whole or in part to the next Financial Year;

 

 

 

(vii)

Any decision regarding Managers' remuneration; or

 

 

(viii)

The approval and any subsequent amendment of the Project Budget.

 

 

(b)

The Parties shall, and shall ensure that any of their Affiliates that are
Shareholders shall, vote for any amendment to the Articles of Association,
change in shareholding structure of a Company, or decision regarding
distribution of a Company's available profits where required to give effect to
the rights and obligations of the Shareholders specifically provided for in this
Agreement.

 

 

 

(c)

Other than as regards matters enumerated in Clause 7.2(a), the Parties agree
that no action by a Company which requires Shareholder approval pursuant to this
Agreement or under Applicable Laws of the Kingdom shall have any effect until
such matter shall have been approved by a resolution passed at a duly convened
meeting of the Shareholders at which a quorum is present by the affirmative
votes of the relevant Shareholders in attendance or duly represented at such
meeting who are entitled to vote on such resolution in accordance with this
Agreement and holding in the aggregate at least fifty one percent (51%) of the
Share Capital of the relevant Company.

 

 

 

(d)

If any matter has been approved by the relevant Board of Managers in accordance
with the Agreement or any action is required to be taken by a Company or any
Shareholder in accordance with the Agreement, and such matter requires the
approval or ratification by the Shareholders in accordance with Applicable Laws
of the Kingdom, then the Parties shall procure that such approval or
ratification is promptly given.

 

 

7.3

Language

 

The resolutions of the meeting of Shareholders shall be laid down in writing in
the Arabic language and the English language. For purposes of any proceedings
conducted pursuant to Clause 21.3 the English language version of any such
resolution shall prevail.

 

 

8.

Board of Managers

 

 

8.1

Appointment of Managers to each Company

 

 

(a)

Except in relation to those matters reserved to the Shareholders, each Company
shall be managed by a Board of Managers, which will consist of five (5)
Managers. Promptly after the incorporation of a Company in accordance with
Clause 3.4, to the extent it has not already occurred, the required appointments
shall be made such that Ma'aden will appoint three (3) Managers, and Alcoa (or
its Affiliate) will appoint two (2) Managers, to such Company. Each of Ma'aden
and Alcoa (or its Affiliate, as aforesaid) will also appoint an Alternate
Manager, who will also participate in meetings of the relevant Board of
Managers, but will have no vote unless expressly authorized to vote pursuant to
sub-paragraph (f) below.

 

 

 

(b)

Unless otherwise agreed between the Shareholders of a particular Company,
Ma'aden shall appoint the Chairman of each Company.

 

 

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(c)

The relevant Board of Managers shall have full authority to act on behalf of the
Company to which they have been appointed, in accordance with the terms and
conditions of this Agreement and the Articles of Association. All appointments
of Managers shall be effected by written notice to such Company and the other
Party.

 

 

 

(d)

To the extent permissible under Applicable Laws of the Kingdom, meetings of the
Board of Managers may be held by conference call or video conference. Meetings
of the Board of Managers shall be held on a quarterly basis.

 

 

 

(e)

Meetings of the relevant Board of Managers shall be held at the head office of
such Company or at such other places as may be agreed by a majority of the
Managers of that Company. Meetings shall be held at such times as specified by
the Chairman of that Company. The notice shall include the agenda and all
documents pertaining to the business to be transacted at the meeting. The
relevant Board of Managers may waive or modify the requirement for notice
(including the duration of the notice) with the written consent of all the
relevant Managers either prior to or at the commencement of the meeting and
before any other business is transacted.

 

 

 

(f)

A Manager may grant a proxy to any other Manager appointed by the Shareholder
appointing such Manager to attend meetings of the Board of Managers
and  to  vote on his behalf.

 

 

 

(g)

Resolutions of the Board of Managers may be passed by written resolution.

 

 

(h)

Unless otherwise agreed between the Parties, vacancies will be promptly filled
by the Shareholder having the right to appoint a Manager to the vacant seat,
such that the composition of the Board of Managers of any particular Company
shall at all times be in accordance with this Agreement.

 

 

 

(i)

Subject to paragraph (f) above and Clause 8.5(a), each Manager shall have one
(1) vote, and the Chairman shall not have any additional voting power (including
any casting vote) by virtue of his position.

 

 

 

(j)

The Chairman shall be a Manager and shall have the authority set out in the
Articles of Association, such authority to be exercised in accordance with the
decision of the Board of Managers.

 

 

 

8.2

Removal of Managers

The Party or its Affiliate being a Shareholder who appointed a Manager (or an
alternate) may remove that Manager (or such alternate) at any time by written
notice to the relevant Company and the other Party. In the event that a Manager
is removed or resigns or becomes incapacitated or otherwise unable to serve for
any reason, the Party or its Affiliate being a Shareholder who appointed him
shall promptly appoint a replacement. Any Party or its Affiliate being a
Shareholder removing a Manager appointed by it or them in accordance with the
relevant provisions of the Articles of Association shall be responsible for and
shall hold harmless the other Party and the relevant Company from and against
any claim for unfair or wrongful dismissal arising out of such removal and any
reasonable costs and expenses incurred in defending such proceedings, including,
but without prejudice to the generality of the foregoing, legal costs actually
incurred.

 

 

8.3

Appointment of Senior Officers to each Company: Removal

 

 

(a)

The relevant Board of Managers shall appoint officers of the relevant Company
from time to time, including the following officers of such Company ("Senior
Officers"):

 

 

 

(i)

the President for one or more Companies;

 

38

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(ii)

the Vice President of Operations (or such other position as the parties may
determine);

 

 

 

(iii)

the Vice President for Finance for one or more Companies; and

 

 

(iv)

the Vice President for Human Resources.

 

 

(b)

The appointment and removal of each Senior Officer will be subject to approval
by the relevant Board of Managers pursuant to Clause 8.5(a).

 

 

 

(c)

Except as otherwise agreed by the Parties, the President shall be nominated by
Ma'aden to each Board of Managers for approval and shall be the primary
executive officer of each Company and shall be fully responsible for the general
and executive management and daily administration of the operations and business
of each Company. If more than one President is nominated by Ma'aden, Ma'aden
will identify which executive will maintain overall responsibility for common
operations and functions between the Companies (the "MA President"). The person
nominated by Ma'aden as President shall serve as President for each Company. The
President shall report directly to the relevant Board of Managers and carry into
effect all decisions and resolutions of the relevant Board of Managers and, if
and to the extent determined by special majority approval of the relevant Board
of Managers, any duly authorised committee of the relevant Board of Managers.

 

 

 

(d)

Except as otherwise agreed by the Parties, there shall be one Vice President for
Operations reporting to the MA President who shall be nominated by Alcoa,
subject to the approval of each Board of Managers. The scope of each Vice
President for Operations' role and responsibilities shall be as determined by
the relevant Board of Managers from time to time.

 

 

 

(e)

Except as otherwise agreed by the Parties, there shall be one Vice President for
Finance reporting to the MA President who shall be nominated by Ma'aden Subject
to the approval of each Board of Managers.. The scope of the Vice President for
Finance's role and responsibilities shall be as determined by the relevant Board
of Managers from time to time.

 

 

 

(f)

The scope of the Vice President for Human Resources' role and responsibilities
shall be as determined by the relevant Board of Managers from time to time. The
Vice President for Human Resources shall report directly to the MA President.
The Vice President for Human Resources Officer shall be a suitable qualified
Saudi national.It is acknowledged that the services of the Vice President for
Humand Resources position(s) may be provided by way of consolidated or shared
services from Ma' aden.

 

 

 

(g)

The Parties agree that the initial management team will be designated for a
transitional period of approximately six (6) years from incorporation of the
Companies, during which time the Parties shall use their best efforts to ensure
that suitably qualified Saudi professionals will be selected and prepared to
assume key management positions of each Company.

 

 

 

(h)

In the case of a disagreement between the Parties regarding the appointment or
removal of one of the Senior Officers, the Parties will first attempt to resolve
such disagreement amicably, including reference to senior management consistent
with the provisions  of Clause 21.1 (without, however, the required formality of
the written declaration of "dispute" and the issuance of a "dispute notice" and
without recourse to arbitration pursuant to Clause 21.3).

 

 

 

(i)

If a Party loses faith in a Senior Officer nominated by it, it may immediately
propose the replacement of such Senior Officer. If a Party loses faith in a
Senior Officer nominated by the other Party, it will promptly so inform the
other Party, and the Parties will consult on the necessary steps  required  to
either (1)  place such Senior Officer  under  review,  or (2)  to

 

 

39

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remove such Senior Officer. If the Parties cannot agree on the review or removal
of such Senior Officer, the Deadlock provisions of Clause 9 shall apply for a
period not to exceed one (1) year; and thereafter, if the loss of faith in such
Senior Officer continues, he or she will be removed from the present position,
and the Party entitled to nominate such Senior Officer will nominate a
replacement.

 

 

8.4

Meetings of the Board of Managers of each Company

 

 

(a)

A meeting of the Board of Managers may be requested by any two (2) Managers. The
secretary shall circulate to the relevant Managers a proposed agenda for each
Board meeting along with notice of such meeting. Except as may be agreed by all
Managers present and entitled to attend and vote at a meeting of the Board of
Managers, no resolution or business shall be passed or transacted at any such
meeting that is not included in the agenda for such meeting.

 

 

 

(b)

No business shall be transacted at any duly convened Board meeting unless a
quorum is present. Subject to paragraph (c) below, the quorum for the
transaction of business at any Board meeting shall be at least one (1) Manager
appointed by each Shareholder. The Parties shall procure that the relevant
Shareholders shall use their reasonable efforts to ensure that the Managers
appointed by them attend each Board meeting and that a quorum is present
throughout the meeting.

 

 

 

(c)

If within two (2) hours of the time appointed for a Board meeting a quorum is
not present, the meeting shall, subject to compliance with the next sentence, be
adjourned to the same day of the next week at the same time and the same place
or such other time, date and place as agreed by the relevant Managers so long as
it takes place not later than one (1) month following the initially scheduled
meeting. Each Manager shall be notified in writing by the relevant Company of
the date, time and place of the adjourned meeting as soon as practicable once
such date, time and place have been determined by the Managers. Unless otherwise
approved by the relevant Board of Managers in accordance with this Agreement, if
at the adjourned meeting a quorum is not present within two (2) hours of the
time appointed for the meeting, those Managers present shall constitute a
quorum.

 

 

 

8.5

Voting Thresholds

 

 

(a)

Subject to Clause 8.5(b). each Board of Managers shall adopt its resolutions
with the affirmative simple majority vote of the Managers being present in
person or by proxy, and entitled to vote, at a duly convened Board meeting at
which a quorum is present (or in the case of a written resolution taken without
a Board meeting, the total number of Managers). The decisions requiring the
affirmative simple majority vote of the Managers shall comprise all such
decisions of the Managers other than those for which a special majority
resolution is required pursuant to Clause 8.5(b).

 

 

 

(b)

The following decisions relating to each Company shall require the affirmative
special majority vote of seventy five percent (75%) of the relevant Managers
being present in person or by proxy, and entitled to vote, at a duly convened
Board meeting at which a quorum is present (or in the case of a written
resolution taken without a Board meeting, seventy five percent (75%) of the
Managers entitled to vote):

 

 

 

(i)

Appointment, removal and remuneration of the Senior Officers;

 

 

(ii)

Approval of the Project Budget and any material change thereto having a value in
excess of the lower of fifty million US Dollars (US$50 million) or ten (10)
percent of the Project Budget;

 

 

 

(iii)

Approval of the issuing of the NTP for each Phase.

 

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(iv)

Approval of the annual operating budgets and any material change thereto (having
a value in excess of the lower of fifty million US Dollars (US$50 million) or
ten (I 0) percent of the annual operating budget) of the relevant Company
following the Commercial Production Date;

 

 

 

(v)

Approval of any Expansion, Value Added Project, the incurring by a Company of
any additional indebtedness beyond that contained in the Financing Plan or the
Project Budget, or any capital investment projects or material changes to the
same in each case having a value in excess of fifty million US Dollars (US$50
million);

 

 

 

(vi)

Approval of any Construction Agreement to be entered into after the Effective
Date having a value in excess of fifty million US Dollars (US$50 million);

 

 

 

(vii)

Approval of any Project Agreement to be entered into between a Shareholder or
any of its Affiliates and any Company which is not in any Agreed Form at the
Effective Date;

 

 

 

(viii)

Approval of financial statements required to be produced by any Company and
presented to the Shareholders in accordance with Clause 12.3;

 

 

(ix)

Approval or any long-term contract, having a term in excess of three (3) years
and having a value in excess of fifty million US Dollars (US$50 million) (and
except to the extent already included in any approved budget);

 

 

 

(x)

Adoption of each Company's initial business conduct and conflict of interest
Company Policies, and any material changes thereto; and

 

 

 

(xi)

To the extent required by the Company Policies, entering into a contract of
engagement or compensation arrangements with an Agent whose duties are to lobby
or to influence the actions or decisions of Governmental Authorities and/or
Government Officials.

 

 

 

8.6

Resolutions

 

The resolutions of each Board of Managers shall be written in the English
language and, if Ma'aden so requires and at its cost, in the Arabic language.
For the purposes of any proceedings conducted pursuant to Clause 21.3, the
English language version of any such resolution shall prevail.

 

8.7

Information

 

A Manager shall be entitled to supply details of any business transacted at
Board meetings or committee meetings and any other information obtained by him
in his capacity as a Manager, to the Shareholder by whom he was appointed or to
the professional advisers of such Shareholder, subject always to the provisions
of Clause 22.

 

 

8.8

Duties of Managers

 

The Parties and any Affiliate being a Shareholder shall endeavour to procure
that the Managers and Senior Officers of each Company shall, in carrying out
their responsibilities, act honestly, ethically, in good faith and in the best
interests of such Company. Each Party and any Affiliate being a Shareholder
shall procure that its Managers and Senior Officers do not act or fail to act in
a way which would prevent any Company from exercising any right or enforcing any
remedy under any Ancillary Agreement or other Project Agreement.

 

41

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8.9

Company Policies

 

The Parties, through the relevant Board of Managers shall procure that each
Company shall adopt and be operated in accordance with the Company's policies
relating to accounting, environmental matters, health and safety, corporate
social responsibility, financing, cash management and disbursements, Share
Distributions, procurement, human resources, hedging and risk management and
business conduct as promulgated and amended by the Board of Managers from time
to time (the "Company Policies").

 

In this regard, among other things:

 

 

(a)

The Parties shall procure that each Company will, before the date that the
Company shall commence business, establish, maintain and duly administer an
internal control system comprising policies, processes and such other features
as are necessary or advisable to help ensure:

 

 

 

(i)

the Company's effective and efficient operation by enabling it to manage
significant business, operational, financial, compliance and other risks to
achieving the Company's objectives;

 

 

 

(ii)

the quality of the Company's internal and external financial reporting; and

 

 

(iii)

compliance by the Company with Applicable Laws.

 

 

(b)

The Parties shall procure that each Company will make and keep books, records
and accounts which in reasonable detail accurately and fairly reflect the
transactions and dispositions of its assets, and will (before the date that the
Company shall commence business) devise and maintain a system of internal
accounting controls sufficient to provide reasonable assurances that:

 

 

 

(i)

transactions are executed in accordance with management's general or specific
authorization and are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and/or
International Accounting Standards to maintain accountability of such assets;

 

 

 

(ii)

access to assets is permitted only in accordance with management's general or
specific authorization; and

 

 

 

(iii)

the recorded accountability for assets is compared with existing assets at
reasonable levels and appropriate action is taken with respect to any
differences.

 

 

 

(c)

Alcoa shall prepare and provide the first drafts of each Company's compliance
and procedure manuals and other documents necessary to implement sub-clause (a)
and (b) above.

 

 

 

8.10

Project Steering Committee

 

The Parties shall fonn a multi-disciplinary working group (the "Project Steering
Committee") for each Company which shall be responsible for advising such
Company in respect of various elements of the Project. The Project Steering
Committee shall be headed by the President and consist of representatives of
each Party and various third party consultants to the Project. The Project
Steering Committee shall report to the Board of each Company and co-ordinate
with its Senior Officers in the performance of its functions. The initial
charter and duties of the Project Steering Committee are set forth in Schedule
13.

 

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9.

Deadlock

 

 

9.1

Deadlock Arising

 

 

(a)

If a resolution (a "Proposed Resolution") with respect to any proposed action or
omission by any Company that constitutes (i) a matter requiring affirmative
special majority decision by the relevant Board of Managers as identified in
Clause 8.5(b), or (ii) a matter requiring the affirmative resolution of the
relevant Shareholders representing the relevant voting Share Capital as
identified in Clause 7.2 (other than potential Expansions, which are
subsequently pursued as Break-Off Projects, which are covered by the provisions
of Clause 5.10), is proposed at two (2) consecutive meetings of the relevant
Shareholders or, as the case may be, the relevant Board of Managers and such
resolution (as it may be amended or supplemented by approval of the relevant
Shareholders or, as the case may be, the relevant Board of Managers in
accordance with this Agreement) and is not approved at either of such meetings;
such situation shall be considered to constitute a "Deadlock" for the purposes
of this Agreement.

 

 

 

(b)

Nothing in this Clause shall affect or relieve any Party or Shareholder from its
obligations under this Agreement, nor shall any default by a Party or a
Shareholder in the performance of such obligations give rise to a Deadlock.

 

 

 

9.2

Deadlock Referral

 

 

(a)

Any Shareholder that has not voted against or abstained from voting in respect
of a Proposed Resolution that has resulted in a Deadlock or, as the case may be,
whose appointed Managers have not voted against or abstained from voting in
respect of such Proposed Resolution, may during the period of sixty (60) days
after such Deadlock has arisen (but not after such period) invoke the Deadlock
Resolution Procedure referred to in paragraph (b) below by giving notice (a
"Deadlock Referral Notice") in writing to the other Shareholder and, if
applicable, the relevant Company, which notice shall be accompanied by such
Shareholder's description of the Deadlock and its position with respect thereto.

 

 

 

(b)

If a Shareholder gives a Deadlock Referral Notice in respect of a Deadlock, the
Shareholders shall procure that the following procedure (the "Deadlock
Resolution Procedure")  is followed:

 

 

 

(i)

the chief executive officers of the ultimate parent companies of each of the
Shareholders or their representatives specifically designated for the purpose of
resolving the Deadlock (the "Deadlock Committee") shall meet within fifteen (15)
days of such notice being given and shall negotiate in good faith with a view to
resolving the Deadlock;

 

 

 

(ii)

the rules and procedures of the Deadlock Committee shall be unanimously agreed
by the Deadlock Committee;

 

 

 

(iii)

each Shareholder shall have the right to submit to the members of the Deadlock
Committee its own statement of the matter and its position with respect thereto;

 

 

 

(iv)

the members of the Deadlock Committee shall use their reasonable efforts to
resolve the Deadlock for a reasonable period of time, which shall not (unless
otherwise agreed between the Shareholders) exceed forty five (45) days;

 

 

 

(v)

the members of the Deadlock Committee shall be guided in such negotiations by
the best interests of the relevant Company or, if the Deadlock arises prior to
the incorporation of the Company, the Project; and

 

 

 

(vi)

the members of the Deadlock Committee may approve such interim or temporary

 

43

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actions or other measures as they shall unanimously agree are necessary and
desirable to protect and preserve the value of the Project pending resolution of
the Deadlock, and the relevant Shareholders shall procure that any such approved
actions or other measures are duly approved by those Shareholders or, as the
case may be, the relevant Board of Managers, in accordance with this Agreement
and implemented by the relevant Company.

 

 

 

(c)

No Party or Shareholder shall, by virtue of any Deadlock or Deadlock Resolution
Procedure, be relieved of any of its obligations under this Agreement and,
without limiting the generality of the foregoing, the Parties and the relevant
Shareholders shall continue to procure that the relevant Company continue to
take all such actions contemplated by this Agreement in a timely manner.

 

 

 

(d)

If a Deadlock is not the subject of a valid Deadlock Referral Notice or is not
resolved in accordance with the Deadlock Resolution Procedure within sixty (60)
days of the submission of such matter to the Deadlock Committee, no action will
be taken with respect to the Proposed Resolution giving rise to such Deadlock
and the status quo shall be maintained in respect of the operations of the
relevant Company in respect thereof.

 

 

9.3

Sole Remedies

 

 

(a)

A Deadlock shall not be submitted to, or be capable of resolution by,
arbitration under this Agreement, provided that, any dispute with respect to the
compliance by the relevant Shareholders with their obligations under this Clause
9 may be subject to arbitration pursuant to Clause 21.3.

 

 

 

(b)

The rights and remedies of the Parties and the relevant Shareholders under this
Clause 9 shall be the exclusive rights and remedies of the Parties and the
relevant Shareholders with respect to any Deadlock and, without limiting the
generality of the foregoing, no Party or Shareholder shall take any action or
other step to liquidate, wind-up or otherwise dissolve the relevant Company as a
consequence of any Deadlock.

 

 

 

10.

Senior Debt Financing of the Project

 

10.1

Support For Financing Plan Each Party shall:

 

 

(a)

provide such support and assistance, including the provision of guarantees, as
may be reasonably requested by any Company or the Development Committee in
connection with implementing the Financing Plan, arranging the Senior Debt
contemplated thereby, entering into the Financing Agreements and achieving
Financial Close for each Phase; and

 

 

 

(b)

negotiate in good faith with the Senior Lenders in connection with any
Completion Agreements requested from such Party or any of its Affiliates with a
view to concluding such Completion Agreements on terms that are consistent with
the Financing Plan for the relevant Phase and are otherwise acceptable to such
Party acting reasonably.

 

 

 

10.2

Several Obligations

 

 

The Parties agree that their obligations and any Completion Agreements shall be
several only and the Parties shall not be obliged to enter into any such
obligations on a joint or joint and several basis.

 

10.3

No Further Liability

 

It is the intention of the Parties in founding each Company that each Company
shall be liable for its own liabilities, and that neither the Parties nor the
relevant Shareholders shall assume liability for the debts and obligations of
any Company except to the extent required for the procurement of limited
recourse financing in connection with the Project, in accordance with the
Completion Agreements and pursuant to the Financing Agreements and as may be
required by Applicable Laws.

44

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11.

Distributions Policy; Taxes

 

 

11.1

Distributions Policy

 

(a)

The annual net profits of each Company and any retained profits from previous
Financial Years shall be first allocated towards maintaining the statutory
reserve as required by Applicable Laws in the Kingdom from time to time, subject
to any exemptions granted to any Company in relation thereto.

 

 

(b)

All Distributions by each Company to the relevant Shareholders pursuant to this
Clause 11.1 will be made in accordance with the following priorities to the
maximum extent permitted by the Applicable Laws of the Kingdom:

 

 

 

(i)

firstly, in repayment of the outstanding principal amount and any other amounts
in respect of the Shareholder Loans; and

 

 

 

(ii)

secondly, to the relevant Shareholders by way of dividend or other Share
Distribution as may be determined by the relevant Board of Managers in
accordance with this Agreement, and except to the extent that the relevant
Shareholders otherwise determine pursuant to Clause 7.2.

 

 

 

(c)

Subject to the foregoing, the Parties and the relevant Shareholders shall
procure that each Company maximises the Distributions of Free Cash, subject to
retaining the following funds in each Company:

 

 

 

(i)

funds reasonably required to fund maintenance of the Project in the manner
contemplated by this Agreement and other expenses expressly contemplated in this
Agreement, including required debt service, reserves or other funds pursuant to
this paragraph (c) and the funding of community projects and funding of a
Company's research and development programme pursuant to Clause 11.2;

 

 

 

(ii)

funds required to maintain working capital levels reasonably necessary to
support the operations of a Company; and

 

 

 

(iii)

funds required to be reserved for capital expenditures in accordance with an
approved Budget, including cash required to fund the equity portion of any
Expansion or Value Added Project approved in accordance with this Agreement.

 

 

 

(d)

Subject to any restrictions or obligations contained in any Financing Agreement
to which a Company is a party and after deduction of the amounts referred to in
Clauses 11.1(a) and (Q1 each Company shall make Distributions of Free Cash for
each Financial Year to the relevant Shareholders pro rata in accordance with
their respective Shareholder Percentage as soon as is commercially practicable
and in the manner set out in paragraph (b) above.

 

 

 

(e)

The Parties and the relevant Shareholders undertake to resolve to establish such
reserves and/or carry forward or retain such profits as may be necessary to
enable each Company to

 

 

45

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comply with the terms of any Financing Agreements or credit facilities to which
such Company is a party. If losses are incurred they shall be carried over to
the next Financial Year and no profits shall be distributed until the losses are
fully covered.

 

 

11.2

Local Community Projects; Research and Development Programme

 

 

(a)

The Parties shall procure that the Companies shall develop and agree policies
with respect to:

 

 

 

(i)

funding to be applied to local community projects as part of each of the
Companies' respective Annual Programme and Budget, at a minimum level equivalent
in the aggregate to the projected one percent (1%) of EBIT of the Companies and
subsequently, in the minimum amount of one percent (1%) of the Companies' actual
EBIT annually; and

 

 

 

(ii)

funding by the Companies of their research and development programmes in the
minimum amount in the aggregate of one percent (I%) of th_e Companies' actual
EBIT annually.

 

 

 

(b)

Each Company shall be responsible for dispersing such funds to the relevant
local community projects and for determining Ma'aden's role in this process, as
approved by the relevant Board of Managers, consistent with its Company
Policies. Each Company shall monitor any local community projects to which funds
have been so disbursed in accordance with the Parties' agreed policies, subject
to any monitoring role which is specifically
assigned  to  Ma'aden  in  accordance  with  a  Company's  determination  under  this
Clause 1l.2(b).

 

 

 

11.3

Tax and Zakat

 

 

(a)

Each Party shall ensure that any Affiliate that is a Shareholder shall be
responsible for and shall bear the cost of any income tax or zakat, which may be
imposed in the Kingdom on (i) its respective share of the profits in a Company,
or (ii) its respective ownership interest in a Company, or (iii) its respective
ownership of, or interest in, the Mining Licences. Each Party hereby authorises
each Company to pay to the DZIT on its behalf the Saudi Arabian income tax or
zakat for which it is responsible or which is attributable to it pursuant to
this Clause 11.3 and to charge a corresponding amount against the distribution
entitlement of the relevant Shareholder for the relevant Financial Year. In the
event that a Company does not have sufficient cash to pay the tax or zakat for
which a Shareholder is responsible the respective Party shall ensure that then
such Shareholder shall pay the necessary amount to the Company to enable it to
pay such tax or zakat to the DZIT.

 

 

 

(b)

Each Party shall, or shall ensure that any Affiliate that is a Shareholder shall
bear the cost of any Saudi Arabian withholding tax imposed on any payments made
to it by a Company in connection with a Distribution. Such Company may withhold
from any payments to be made to such Shareholder by the Company any withholding
tax for which such Shareholder is responsible and each Shareholder shall
promptly pay such Company for payment to the DZIT any additional amounts
required to cover any withholding tax for which such Shareholder is responsible.
Such Company will provide each relevant Shareholder with copies of all
applicable Tax receipts.

 

 

 

12.

Accounting System, Books and Budgets

 

 

12.1

Accounting System and Standards

 

The Parties will ensure that each Company shall keep and maintain an accounting
and cost accounting system allowing efficient control and allocation of all
costs involved, and shall regularly

 

46

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report to the Parties in accordance with the requirements of all Applicable Laws
of the Kingdom and a system acceptable to the relevant Board of Managers, based
on generally accepted accounting standards and applicable rules and regulations
applied by the Saudi Organisation for Certified Public Accountants ("SOCPA") in
the Kingdom and also in the International Financial Reporting Standards as
issued by the International Accounting Standards Board from time to time
("IFRS").

 

 

12.2

Language of Reporting to the Shareholders

 

All reports and financial information provided to Parties and relevant
Shareholders pursuant to this Clause 12 shall be prepared in Arabic and English.

 

12.3

Financial Statements

 

The Parties shall procure that each Company prepares the following:

 

 

(a)

not later than ninety (90) days after the end of each Financial Year, audited
financial statements, including balance sheets, income statements and cash flow
statements of the relevant Company for the preceding Financial Year, in
accordance with SOCPA and IFRS;

 

 

 

(b)

not later than thirty (30) days after each of each 31 March, 30 June, and 30
September in each Financial Year quarterly unaudited financial statements,
including balance sheets, income statements and cash flow statements of the
Company for the respective three (3), six (6) and nine (9) month periods then
ended, in accordance with SOCPA and IFRS;

 

 

 

(c)

not later than twenty (20) days after the end of each calendar month in each
Financial Year, monthly unaudited management accounts for such calendar month,
in accordance with SOCPA and IFRS; and

 

 

 

(d)

all financial statements and management accounts delivered to the Shareholders
shall be accompanied by:

 

 

(i)

a report of the President summarising the development, construction or, as the
case may be, operations of the relevant Company conducted during the period
covered by such financial statements or management accounts;

 

 

 

(ii)

a statement of the sources and application of funds of the relevant Company,
showing actual expenditures compared to the applicable approved Budget(s);

 

 

 

(iii)

the latest estimate of the anticipated Commercial Production Date (if it shall
not have occurred); and

 

 

(iv)

such other pertinent financial or other information as may reasonably be
requested from time to time by any Party or Shareholder.

 

 

 

12.4

Books and Audit Rights

 

The accounting books prepared by each Company shall be in conformity with Clause
12.1 above. Each Party and each Shareholder shall be entitled to inspect the
books and conduct an audit of the (i) financial affairs of a Company using its
own internal audit resources or an Approved Accounting Firm, or (ii) regulatory
compliance of a Company using their external legal resources, provided that such
inspection and/or audit shall not unduly interfere with the operations of the
relevant Company or the development and construction of the Project or any
Expansion or Value Added Project pursued by such Company, and subject to such
Party or Shareholder first obtaining reasonable undertakings of confidentiality
from the Approved Accounting Firm or law firm conducting the inspection and/or
audit. The expenses of any such inspection and/or audit shall be borne by  the
Party or  Shareholder  conducting  the inspection  and/or  audit  unless
the  inspection  and/or audit

 

47

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identifies a material error or omission in such books, financial affairs or any
financial statements delivered by a Company to such Party or Shareholder in
accordance with this Agreement, in which case the expenses of the Approved
Accounting Firm (where so appointed) carrying out such inspection and/or audit
shall be borne by such Company.

 

 

12.5

Statutory Obligations

 

In addition to the financial statements prepared by each Company pursuant to
Clause 12.3 above, the Parties shall procure that each Company prepares and
files with the relevant Governmental Authorities in the Kingdom such financial
information, accounts, financial statements, reports and other documents in
respect of its business and activities in accordance with Applicable Laws of the
Kingdom.

 

 

12.6

Auditors

 

 

(a)

The initial Auditors shall be appointed by the Parties as soon as reasonably
practicable following the Effective Date.

 

 

 

(b)

The Parties shall use their reasonable efforts to procure that at all times an
Approved Accounting Firm is appointed as Auditor and that such Auditor performs
such functions as are contemplated to be performed by the Auditor under this
Agreement.

 

 

 

(c)

If and to the extent that a Company is required under Applicable Laws of the
Kingdom to appoint any other person (including any person resident in the
Kingdom) to act as its auditor then the Parties shall procure that a suitably
qualified person is appointed to act in such capacity in the manner required
under Applicable Laws of the Kingdom; provided that, whenever practicable, such
person shall be the branch or affiliate firm of the Auditors in the Kingdom.

 

 

 

12.7

Rights of Managers not Limited

 

Nothing in this Clause 12 shall be deemed to limit the right of any Manager
under Applicable Laws of the Kingdom (i) to request, obtain and examine any
information relating to the business or affairs of the Company to which he has
been appointed a Manager or (ii) to gain access to the premises and facilities
of such Company.

 

 

12.8

Annual and Special Budgets

 

 

(a)

Each Party shall procure that the President prepares and delivers to each Board
of Managers an annual programme and budget for each Financial Year commencing
after the Effective Date (the "Annual Programme and Budget") not later than
thirty (30) days prior to the date of each Board of Managers meeting immediately
preceding the Financial Year to which such Annual Programme and Budget relates
and such other budgets and operating plans covering shorter periods or discrete
projects (each, a "Special Programme and Budget") as each Board of Managers may
direct.

 

 

 

(b)

Each Annual Programme and Budget in respect of a Financial Year shall include
the following information with respect to such Financial Year and such other
information as each Board of Managers may direct:

 

 

 

(i)

an estimate of all proposed capital expenditures to be incurred in such
Financial Year, indicating the item or type and estimated amount of such
expenditures, the necessity therefor and the estimated timing thereof;

 

 

48

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(ii)

an estimate of the revenues and other cash receipts expected to be received, and
the operating costs expected to be incurred, by the relevant Company during such
Financial Year, and the basis on which such estimate was prepared;

 

 

 

(iii)

projected financial statements for such Financial Year reflecting the foregoing;
and

 

 

(iv)

an estimate of the sources and uses of funds for such Financial Year, including
any estimated Required Shareholder Funding, the estimated amount and timing of
any Cash Calls, the estimated amount and timing of any Share Distributions and
the form of any such Distributions.

 

 

 

(c)

The Parties shall procure that each Company shall promptly report to the
relevant Shareholders:

 

 

 

(i)

any actual or anticipated aggregate expenditures by the Company during any
period of one month, calendar quarter or Financial Year that exceeds, or are
expected to exceed, the aggregate budgeted expenditures for such period by ten
percent (10%) or more; and

 

 

 

(ii)

any anticipated material deviations from the estimates set out in any approved
Budget of the amounts and timing of any Required Shareholder Funding or Cash
Calls.

 

 

 

(d)

In the event that a Deadlock arises in respect of the proposed adoption of a
Budget or a particular item included within the proposed Budget, the relevant
Company shall continue to be operated on the basis set forth in the latest
applicable approved Budget (adjusted for current inflation) or, to the extent
possible, the proposed Budget shall be approved except for the particular item
subject to the Deadlock, in each case until a new Budget is adopted or the
particular item is agreed.

 

 

 

12.9

Emergency Funding

 

 

(a)

Notwithstanding anything to the contrary in this Agreement, a Company may at any
time incur, and may require the Shareholders to fund, expenditures that the
President determines (acting reasonably), and the relevant Board of Managers
agrees, are necessary to protect life or property or the assets of the relevant
Company or to comply with Applicable Laws in the Kingdom without an approved
Budget.

 

 

 

(b)

The Parties shall ensure that each Company shall promptly notify the relevant
Shareholders of the occurrence of any of the circumstances referred to in
paragraph (a) above and the relevant Board of Managers may issue a Cash Call in
respect of the required funding subject to compliance with the terms and
conditions of Clause 4 above.

 

 

 

(c)

Prior to the incorporation of any Company, the Development Committee shall
promptly notify the Parties of the occurrence of any of the circumstances
referred to in paragraph (a) above and the Development Committee may issue a
Development Committee Funding Call subject to compliance with the terms and
conditions of Clause 4 above.

 

 

 

13.

Entry Payment, Pre-Incorporation Costs and Transfer of Pre-Incorporation
Materials

 

 

13.1

Payment of Entry Payment and Pre-Incorporation Costs

 

 

(a)

Alcoa agrees that Ma'aden has incurred certain Pre-Incorporation Costs as
described in Schedule 3 in developing the Project up to the date specified in
Schedule 3 (the "Calculation Date"). Alcoa has audited and agreed to certain of
the Pre-Incorporporation Costs being in aggregate one hundred and  thirty-five
million  US Dollars (US$135 million) (the "Agreed Pre-Incorporation Costs"). In
respect of the balance of the Pre-Incorporation Costs, the Parties will review
and agree upon the amount of such costs that are

 

49

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chargeable to the  Project (the "Additional Pre-Incorporation Costs").

 

 

(b)

Simultaneously with signing this Agreement on the Effective Date, Alcoa shall
pay to Ma'aden the following amounts: (i) eighty million US Dollars (US$80
million) comprising the entry payment payable by Alcoa in respect of the
opportunity to participate in the Project (the "Entry Payment")- paid 24
December 2009; and (ii) thirty four million US Dollars (US$34 million)
comprising Alcoa's pro rata share, based on its Shareholder Percentage set out
in Clause 4.1, of the Agreed Pre-Incorporation Costs incurred by Ma'aden prior
to the Calculation Date (which following receipt of such payment by Ma'aden,
shall be deemed to be Pre-Incorporation Costs of Alcoa as approved by the
Parties).

 

 

 

(c)

The payments referred to in paragraph (b) above are required to be made in cash
simultaneously with the signing of this Agreement. Accordingly, Alcoa shall
ensure either that (i) such payments have, prior to signature of this Agreement,
been credited to the account nominated by Ma'aden for such payment, or (ii)
Alcoa shall provide at its cost an irrevocable and unconditional standby letter
of credit in favour of Ma'aden in a form and issued by a bank or financial
institution acceptable to Ma'aden in an amount equal to the aggregate of the
amounts in sub-paragraphs (b)(i) and (b)(ii) above, such standby letter of
credit to be provided to Ma'aden simultaneously with the signature of this
Agreement as security for such payment. Ma'aden shall be entitled to draw on the
standby letter of credit by first written demand to the bank or financial
institution issuing the standby letter of credit. Ma'aden shall return such
standby letter of credit to Alcoa for cancellation immediately following receipt
in full by Ma'aden of the amounts referred to in paragraph (b).

 

 

 

(d)

Alcoa shall pay to Ma'aden Alcoa's pro rata share of the Additional
Pre-Incorporation Costs based on its Shareholder Percentage upon Financial Close
for Phase 1.

 

 

 

(e)

From the Calculation Date until the date of incorporation of each Company and
appointment of its Board of Managers, each Party shall obtain the written
consent of the other Party (not to be unreasonably withheld) or of the
Development Committee before incurring Project Costs which have not been
pre-approved by the Parties and included in the Pre-Financing Budget or the
Project Budget (as the case may be), and such approved or pre-approved Project
Costs shall constitute part of the Pre-Incorporation Costs. If a Party incurs
costs between the Calculation Date and the date of incorporation of the relevant
Company and appointment of the relevant Board of Managers as aforesaid, that
have not been approved by the other Party or the Development Committee in
accordance with this Clause 13.l(d), or have not been included in the
Pre-Financing Budget or the Project Budget (as the case may be), such Party
shall not be entitled to any contribution to such costs from the other Party or
reimbursement of such costs by the relevant Company pursuant to Clause 13.2.
Notwithstanding the foregoing, nothing in this Agreement shall restrict a Party
from incurring such cost if it considers it appropriate to do so at its own cost
and risk (as aforesaid), and subject to any subsequent determination by the
Development Committee or the relevant Board of Managers (as the case may be)
that such costs should be recognised as Pre-Incorporation Costs.

 

 

 

(f)

For the avoidance of doubt,
no  Party  shall  be  entitled  to  reimbursement  of  any  costs incurred in
negotiating this Agreement or any other agreement that such Party or its
Affiliates is to enter into with any Company (or with the other Party on behalf
of any Company).

 

 

 

(g)

Each Party shall be entitled to charge to the Companies the Pre-Incorporation
Costs which  such  Party  and  its  Affiliates  have  incurred  prior to  the
date of  reimbursement  of Pre-Incorporation Costs pursuant to Clause 13.2(a).
such costs and expenses to be paid by the Companies on an equal basis (or such
other basis as may be agreed by the Parties) out of the respective amounts of
Share Capital contributed pursuant to Clause 4.1, in accordance with the
provisions of this Clause 13.

 

 

 

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13.2

Reimbursement  of  Pre-Incorporation Costs

 

 

(a)

Pre-Incorporation Costs shall be reimbursed by the relevant Company (as
determined by the Parties) within thirty (30) days from the date of
incorporation of such Company in accordance with, and on the basis set out in,
Schedule 3.

 

 

 

(b)

Without prejudice to Clauses 6.1 and 6.2, promptly following the date of
incorporation of the relevant Company, the Parties shall assign and transfer
their rights in the Pre­ Incorporation Materials to such Company.

 

 

 

14.

Events of Default and Consequences

 

 

14.1

Events of Default

 

The following shall constitute an "Event of Default" in respect of a Party or
its Affiliate holding Shares (the "Defaulting Party") for the purposes of this
Agreement:

 

 

(a)

the Defaulting Party shall have failed to advance (or procure the advancing of)
the amount of any Required Shareholder Funding (the "Default Amount") required
to be advanced by the Defaulting Party in accordance with this Agreement on or
before the expiry of the Funding Deadline specified in a Cash Call duly
delivered in accordance with this Agreement and such default (a "Funding
Default") shall not have been cured in accordance with Clause 14.4 below;

 

 

 

(b)

the Defaulting Party is a transferring Shareholder and has breached or otherwise
failed to comply with any provisions of Clause 17 or of this Clause 14 and such
breach or default is not remedied within a period of seven (7) days from the
date of service of a default notice by the Non-Defaulting Party to the
Defaulting Party, other than any breach of Clause 17.4 which shall constitute an
Event of Default immediately upon its occurrence;

 

 

 

(c)

an Act of lnsolvency shall have occurred in respect of the Defaulting Party or,
if applicable, any member of the Defaulting Party's group that has guaranteed
the obligations of the Defaulting Party or its Affiliates pursuant to this
Agreement;

 

 

 

(d)

the Defaulting Party shall have committed any breach (or series of breaches) of
the provisions of this Agreement (other than as contemplated by paragraphs (a)
to (c) above or paragraph (e) below) and such breach constitutes or evidences a
failure on the part of the Defaulting Party to comply with its obligations under
this Agreement to an extent that has, or is likely to have, a Material Adverse
Effect and such breach is not remedied within twenty eight (28) days of
written  notice  thereof  from the relevant Company or  the Non­ Defaulting
Party to the Defaulting Party (a "Material Breach"); or

 

 

 

(e)

in respect of the period prior to incorporation of each Company and appointment
of the relevant Board of Managers, the Defaulting Party shall have failed to
advance (or procure the advancing of) the amount specified in a Development
Committee Funding Call under Clause 4.2(a) by the due date for payment and
such  failure is not remedied within fourteen

 

(14) days of a written notice thereof from the Non-Defaulting Party to the
Defaulting Party.

 

 

 

14.2

Consequences of Events of Default

 

The Project is an integrated project and, for the avoidance of doubt, the
Parties agree that an Event of Default in respect of any Company shall be
considered to be an Event of Default in respect of all Companies. If an Event of
Default has occurred and is continuing in relation to the Defaulting Party then,
without prejudice to the Defaulting Party's obligations under this Agreement or
the remaining provisions of this Clause 14, upon written notice by the
Non-Defaulting Party to the Defaulting Party:

 

 

(a)

if Ma'aden is the Non-Defaulting Party, it shall be entitled to purchase Alcoa's
Transferable

 

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Interests in accordance with Clause 14.3 below. If Alcoa is  the Non-Defaulting
Party, it shalt be entitled to sell its Transferable Interests to Ma'aden in
accordance with Clause 14.5_ below;

 

 

 

(b)

in the case of an Event of Default under Clause 14.l(b)-(d), the Defaulting
Party shall, in addition to the consequences arising from the remaining
sub-paragraphs of this Clause 14.2, not be entitled to any Distributions or to
otherwise participate in the profits of any Company under this Agreement, the
Articles of Association of any Company or otherwise during the period that such
Event of Default subsists;

 

 

 

(c)

in the case of a Funding Default, the consequences set out in Clause 14.4 shall
apply in addition to this Clause 14.2;

 

 

 

(d)

in the case of an Event of Default occurring prior to the incorporation of any
Company and appointment of the relevant Board of Managers, including under
Clause 14.l(e), the consequences set out in Clause 14.6 shall apply in addition
to this Clause 14.2.

 

 

 

14.3

Transfer Upon Event of Default of Alcoa

 

 

(a)

In the case of an Event of Default of Alcoa following the incorporation of any
Company, Ma'aden, as the Non-Defaulting Party, shall, without prejudice to any
other rights or claims available to it, have the right to purchase, and require
Alcoa to sell, Alcoa's Transferable Interests pursuant to Clause 14.2(a). in the
following manner:

 

 

 

(i)

on the first day immediately following: the occurrence of the Event of Default
under Clause 14. l(c): the expiry of the relevant cure period in the case of
Events of Default under Clause 14. l (b) or (d); or, in the case of a Funding
Default under Clause 14.l(a). immediately following the expiry of the Cure
Period and subject to Clause 14.4(f)(ii): (in each case, the "Call Date"), if
such circumstance shall continue to subsist, Alcoa shall be deemed to have
offered to sell and to procure the sale by its Affiliates of alt right, title
and interest in all of Alcoa's Transferable Interests to Ma'aden upon and
subject to the terms and conditions set out in this Clause 14;

 

 

 

(ii)

Ma'aden may, by notice in writing given to  Alcoa and each Company not later
than the forth fifth (45th day following  the  Call  Date, elect  to accept
Alcoa's offer respect of all (but not less than all) of Alcoa's Transferable
Interests, failing which Ma'aden shall be deemed to have rejected such offer;

 

 

 

(iii)

provided that Ma'aden has accepted Alcoa's offer in respect of all (but not less
than all) of Alcoa's Transferable Interests, Ma'aden shall purchase all of
Alcoa's Transferable Interests, and Alcoa shall be obliged to sell, transfer and
assign such Transferable Interests to Ma'aden on the Closing Date (as
hereinafter defined) in the amounts stipulated under paragraph (b) below; and

 

 

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(iv)

the completion of the purchase and sale of Alcoa's Transferable Interests shall
take place on the date (the "Closing Date") which is ten (10) Business Days
following the expiry of the forty five (45) day period referred to in
sub-paragraph (ii) above, or such other date as may be agreed between the
Parties.

 

 

 

(b)

If Ma'aden elects to accept Alcoa's offer to purchase its Transferable
Interests, the purchase price for Alcoa's Transferable Interests shall be as
follows:

 

 

 

(i)

in the event that the Financing Completion Date for Phase 1 has not occurred, at
a consideration of US$1.00 and provided that Alcoa shall be required to make
payment in respect of its pro rata share based on its Shareholder Percentage of
any unpaid Agreed Pre-Incorporation Costs and any Funding Default then
attributable to Alcoa;

 

 

 

(ii)

in the event that the Financing Completion Date for Phase 1 has occurred but the
Commercial Production Date in respect of the elements of the Project comprised
in Phase 1 has not occurred, at a consideration equal to sixty percent (60%) of
the Paid In Capital and Shareholder Loans of Alcoa in respect of all of the
Companies at the date of transfer less the amount of Alcoa's pro rata share
based on its Shareholder Percentage of any unpaid Agreed Pre-Incorporation
Costs;

 

 

 

(iii)

in the event that the Commercial Production Date in respect of the elements of
the Project comprised in Phase 1 has occurred but the fifth (5th) anniversary of
such date has not occurred, at a consideration equal to seventy five percent
(75%) of the Fair Market Value of Alcoa's Transferable Interests at the date of
transfer; and

 

 

 

(iv)

in the event that the fifth (5th) anniversary referred to in sub-paragraph (iii)
has occurred, at a consideration equal to eighty five percent (85%) of the Fair
Market Value of Alcoa's Transferable Interests at the date of transfer,

 

 

as determined (in the case of sub-clauses (iii) and (iv)) by the Valuers in
accordance with the provisions of Clause 18 which provisions shall apply mutatis
mutandis; and the Parties hereby acknowledge and agree that any discount
contemplated by this paragraph (b) does not (and shall not be construed to)
constitute a penalty imposed on Alcoa and that such discount reflects the
Parties' genuine pre-estimate of the damages that Ma'aden would suffer in the
circumstances contemplated by this Clause 14. In each case, any amount of
accrued and unpaid Default Commission shall be deducted from the amounts
otherwise payable to Alcoa. For the avoidance of doubt, the Entry Payment shall
not be reimbursed in the event of any purchase of Alcoa's Transferable Interests
pursuant to this Clause 14.3.

 

 

(c)

The Valuer referred to under paragraph (b) above shall be appointed and
instructed to determine the Fair Market Value of Alcoa's Transferable Interests
not later than the Call Date. The costs of the Valuer incurred in connection
with the determination of the Fair Market Value of Alcoa's Transferable
Interests shall be paid promptly by Alcoa upon receipt of an invoice therefor
and in any event prior to the Closing Date, failing which such costs may be
deducted by Ma'aden from the purchase price payable to Alcoa for the
Transferable Interests in such manner as Ma'aden may determine acting reasonably
(and Ma'aden shall then promptly pay such costs).

 

 

 

(d)

The Parties shall, and shall ensure that any of its Affiliates that are
Shareholders shall, execute all such documentation and do all such other acts
and things as may be necessary or desirable to give effect to this Clause 14.3.

 

 

 

(e)

Nothing in this Clause 14.3 shall be construed to require Ma'aden to exercise
any of the above rights.

 

 

53

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(f)

Any transfer under this Clause
14.3  shall  have  effect  to  transfer  Alcoa's  Transferable Interests free
and clear of any Encumbrance, subject to the Financing Agreements.

 

 

 

14.4

Additional Consequences of a   Funding Default

 

 

(a)

A relevant Company shall notify each Party promptly, but in any event within
seven (7) days, of the occurrence of a Funding Default and of the subsequent
making of any payments as to which such notice was given. Without prejudice to
the aforesaid, the Non-Defaulting Party may also give notice of a Funding
Default to the Defaulting Party. The notice given by the relevant Company, or in
the absence thereof, the notice given by the Non-Defaulting Party, to the
Defaulting Party shall constitute the "Default Notice".

 

 

 

(b)

To the extent that the relevant Company incurs any liabilities or losses as a
direct result of a Funding Default and for so long as such Funding Default is
continuing, then the Defaulting Party shall be liable to the Company for any
such liabilities or losses.

 

 

 

(c)

Immediately upon occurrence of a Funding Default and for so long as a Funding
Default is continuing, any amount of cash that would otherwise be payable by the
relevant Company to a Defaulting Party (or any of its Affiliates that are
Shareholders) as a Share Distribution shall from time to time be set-off against
the obligations owed by such Defaulting Party in respect of such Funding
Default. Any amounts retained by the Company as a result of such set-off shall
be applied:

 

 

 

(i)

firstly, to pay any accrued and unpaid Default Commission owing by such
Defaulting Party to the Company;

 

 

 

(ii)

second, to meet such Defaulting Party's obligations to advance Required
Shareholder Funding; and

 

 

 

(iii)

the balance (if any) shall be paid to the Defaulting Party,

 

and the application of such funds shall be deemed to discharge in full the
obligations of the relevant Company to the Defaulting Party in respect of any
such Share Distribution.

 

 

(d)

From the date of the Default Notice and for a period of thirty (30) days
thereafter (provided that the Funding Default is continuing during such period),
the Non-Defaulting Party may elect to contribute the entire (and not part)
Default Amount (which shall for the purposes of this Clause 14.4 include any
accrued and unpaid Default Commission) to the relevant Company by way of Equity
Subscriptions and, if applicable, Shareholder Loans, in accordance with the
terms of the relevant Cash Call notice, by notice to the relevant Company and
the Defaulting Party.

 

 

 

(e)

If the Non-Defaulting Party makes an election in accordance with paragraph (d)
above, then:

 

 

(i)

the Non-Defaulting Party shall advance the Default Amount (including any accrued
and unpaid Default Commission) within twenty (20) days after the date of the
Non­ Defaulting Party's notice to the relevant Company and the Defaulting Party
confirming its election to contribute the Default Amount pursuant to paragraph
(d) above; and

 

 

 

(ii)

the Defaulting Party shall have fourteen (14) days following the date of payment
by the Non-Defaulting Party of the Default Amount (including any accrued and
unpaid Default Commission), or thirty (30) days from the date of the Funding
Default, whichever period ends later, during which to cure the Funding Default
(the "Cure Period") by reimbursing the Non-Defaulting Party in respect of (i)
the Default Amount (including any Default Commission paid by the Non-Defaulting
Party) and

 

 

54

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(ii) the sum equal to the application of the Commission Rate on the Default
Amount from the date of payment by the Non-Defaulting Party until the date of
reimbursement by the Defaulting Party.

 

 

(f)

If, following expiry of the Cure Period, a Funding Default is continuing and has
not been cured in accordance with sub-paragraph (g) below:

 

 

 

(i)

the Defaulting Party's Shareholder Percentage in respect of all the Companies
(as it is intended that the Parties shall throughout the Joint Venture retain
equivalent Shareholder Percentages in all Companies) shall be diluted and
reduced by taking into account its shortfall in contributing Paid In Capital in
respect of all the Companies and applying the formula set out in the definition
of Shareholder Percentage; and the revised Shareholder Percentages of the
Defaulting Party and the Non-Defaulting Party shall be verified and certified by
the Auditors as the Shareholder Percentages of each Party for all such Companies
with effect from the date of the expiry of the Cure Period;

 

 

 

(ii)

if the Non-Defaulting Party is Ma'aden, then Ma'aden shall have the right to
terminate the Agreement and purchase all of Alcoa's Transferable Interests m
accordance with Clause 14.3; and

 

 

 

(iii)

if the Non-Defaulting Party is Alcoa, Alcoa shall have the right to terminate
the Agreement and sell all of its Transferable Interests to Ma'aden in
accordance with Clause 14.5.

 

 

 

(g)

A Funding Default shall be cured if the Default Amount (together with all
accrued and unpaid Default Commission thereon) shall have been paid, advanced or
otherwise discharged during the Cure Period in full by one or more of the
following means:

 

 

 

(i)

if the Default Amount (together with all accrued and unpaid Default Commission
thereon) is paid by the Defaulting Party to the relevant Company in accordance
with this Clause 14.4, in which case, cure of the Funding  Default under
sub-paragraphs (ii) and (iii) below would not be applicable; or

 

 

 

(ii)

the exercise by the relevant Company of its right to set-off Share Distributions
against the obligations of the Defaulting Party in respect of such Funding
Default pursuant to Clause 14.4(c); or

 

 

 

(iii)

if the Non-Defaulting Party shall have exercised its   rights   pursuant   to
Clause 14.4(e)(i) in respect of such Funding Default and shall have advanced the
Default Amount to the relevant Company thereunder and the Defaulting Party shall
have reimbursed the Non-Defaulting Party in respect of such Default Amount in
accordance with Clause 14.4(e)(ii).

 

 

 

14.5

Ma'aden as the Defaulting Party

 

 

(a)

In the event of an Event of Default by Ma'aden following the incorporation of
any Company, Alcoa shall, without prejudice to any other rights or claims
available to it, have the right to require Ma'aden to purchase all of Alcoa's
Transferable Interests pursuant to Clause 14.2(a). in the following manner:

 

 

 

(i)

Alcoa may, by notice in writing given to Ma'aden and the relevant Company not
later than the thirtieth (30m) day following: the occurrence of the Event of
Default under Clause 14.1 (c); the expiry of the cure period in the case of an
Event  of Default under Clause 14.l(b) or (d); or in the case of a Funding
Default  under Clause 14.1(a) immediately following the expiry of the Cure
Period and pursuant to

 

 

55

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Clause 14.4(f)(iii). elect to sell all (but not less than all) of its
Transferable Interests to Ma'aden; and

 

 

(ii)

Ma'aden shall purchase all of Alcoa's Transferable Interests, and Alcoa shall be
obliged to sell, transfer and assign such Transferable Interests to Ma'aden on
the date which is twenty (20) Business Days following the notice referred to in
sub­ paragraph (i) above, or such other date as may be agreed between the
Parties, in the amounts stipulated under paragraph (b) below;

 

 

 

(b)

The purchase price for Alcoa's Transferable Interests shall be as follows:

 

 

(i)

in the event that the Financial Completion Date for Phase l has not occurred, at
a consideration equal to the Paid In Capital and Shareholder Loans of Alcoa in
respect of all of the Companies at the date of transfer as well as the repayment
by Ma'aden of the Entry Payment;

 

 

 

(ii)

in the event that the Financial Completion Date for Phase l has occurred but the
Commercial Production Date in respect of the elements of the Project comprised
in Phase 1 has not occurred, at a consideration equal to one hundred and fifteen
percent (115%) of the Paid In Capital and Shareholder Loans of Alcoa in respect
of all of the Companies at the date of transfer as well as the repayment by
Ma'aden of the Entry Payment; and

 

 

 

(iii)

after the Commercial Production Date in respect of the elements of the Project
comprised in Phase 1, at a consideration equal to one hundred percent (100%) of
the Fair Market Value of Alcoa's Transferable Interests,

 

 

as determined (in the case of sub-paragraph (iii)) by the Valuers in accordance
with the provisions of Clause 18 which provisions shall apply mutatis mutandis.
In each case, any amount of accrued and unpaid Default Commission by Alcoa shall
be deducted from the amounts otherwise payable to Alcoa. For the avoidance of
doubt, the Entry Payment shall not be reimbursed in the event of any purchase of
Alcoa's Transferable Interests pursuant to this Clause 14.5.

 

 

(c)

The costs of the Valuer incurred in connection with the determination of the
Fair Market Value of Alcoa's Transferable Interests under sub-paragraph (b)(iii)
above shall be paid promptly by Ma'aden upon receipt of an invoice therefor and
in any event prior to the date referred to in Clause 14.5(a)(ii). failing which
such costs may be added by Alcoa to the purchase price payable by Ma'aden for
the Transferable Interests in such manner as Alcoa may determine acting
reasonably (and Alcoa shall then promptly pay such costs).

 

 

 

(d)

The Parties shall, and shall ensure that any of their Affiliates that are
Shareholders shall, execute all such documentation and do all such other acts
and things as may be necessary or desirable to give effect to this Clause 14.5.

 

 

 

(e)

Nothing in this Clause 14.5 shall be construed to require Alcoa to exercise any
of the above rights.

 

 

 

(f)

Any transfer under this Clause 14.5 shall have effect to transfer such
Transferable Interests free and clear of any Encumbrance, subject to the
Financing Agreements.

 

 

 

14.6

Default Prior to Incorporation of any Company

 

If an Event of Default has occurred prior to the incorporation of any Company,
the following shall apply in respect of any of the Companies which is not
incorporated at such time:

 

 

 

(a)

Following an Event of Default by Alcoa, Ma'aden shall, without prejudice to any
other rights or claims available to it, have the right to terminate this
Agreement by fourteen (14) days notice in writing given to Alcoa following: the
occurrence of an Event of Default under Clause 14.1 ( c): or the expiry of the
relevant cure period in the case of an Event of Default

 

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under Clause 14.1 (d) or (e). In the event of such termination, Alcoa shall
assign and transfer to Ma'aden its rights to and in all Pre-Incorporation
Materials in consideration of the payment ofUS$1.00 by Ma'aden.

 

 

 

(b)

Following an Event of Default by Ma'aden, Alcoa shall, without prejudice to any
other rights or claims available to it, have the right to terminate this
Agreement by fourteen (14) days notice in writing given to Ma'aden following:
the occurrence of an Event of Default under Clause 14.1 (c); or the expiry of
the relevant cure period in the case of an Event of Default under Clause 14.1
(d) or (e). In the event of such termination, Alcoa shall assign and transfer to
Ma'aden its rights to and in all Pre-Incorporation Materials in consideration of
the repayment by Ma'aden to Alcoa of the aggregate amount of the Entry Payment
and the proportion of the Pre-Incorporation Costs which have been paid by Alcoa
prior to such termination except to the extent that any such Pre-Incorporation
Costs have been reimbursed to Alcoa by any Company that has been incorporated
prior to such Event of Default or have been or will be recovered by Alcoa as
part of the Paid In Capital or Shareholder Loans reimbursed pursuant to this
Clause 14.

 

 

 

14.7

Other Remedies

The rights, consequences and remedies as provided for in this Clause 14 shall be
in addition to and not in substitution for any other remedies that may be
available to a Shareholder hereunder arising pursuant to any default or failure
by any Shareholder to comply with its obligations hereunder or an Event of
Default or by operation of Applicable Laws (including, for the avoidance of
doubt, the right of any Non-Defaulting Party to claim damages if it has suffered
a loss). The exercise of such rights shall not relieve the Defaulting Party from
any obligations accrued prior to the date on which the transfer(s) of Alcoa's
Transferable Interests is effected, nor shall the exercise or failure to
exercise such rights relieve the Defaulting Party from any liability for damages
to any Non­ Defaulting Party for breach of this Agreement.

 

15.

Failure to Achieve Financial Completion Date for Phase I by the Financing
Longstop Date

 

15.1

Compensation on Buy-Out

 

 

(a)

The Parties intend to implement the Project expeditiously and in accordance with
this Agreement so that the Financing Completion Date for Phase l is achieved by
the Financing Longstop Date and the NTP for Phase 1 is issued as soon as
possible thereafter (or earlier if so agreed by the Parties). Each Party shall,
and shall procure that the relevant Manager(s) appointed by it, act and vote
reasonably and in good faith in connection with the approval and execution of
the Financing Agreements for Phase l and any proposal to approve the issuing of
the NTP for Phase 1. The Parties shall monitor progress towards the achievement
of the Financing Completion Date and, if the Financing Completion Date has not
been achieved by the initial Financing Longstop Date, the Parties shall extend
the Financing Longstop Date by four (4) months or such shorter period as the
Parties may agree. The Parties may agree on subsequent extensions in their
discretion. If the Financing Completion Date for Phase l is not achieved by the
Financing Longstop Date (as may be extended), the provisions of this Clause 15
shall apply; provided always that, if the Financing Completion Date for Phase 1
is not achieved by the Financing Longstop Date (as may be extended) due to a
Party's (or its Affiliate Shareholder's) action or inaction on a matter that is
reasonably within its control and, but for such action or inaction, the
Financing Completion Date for Phase I would have been achieved on or before the
said Financing Longstop Date, such Party shall not be entitled to invoke the
provisions in sub-clauses (b) and (c) below.

 

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(b)

If the Financing Completion Date for Phase 1 has not occurred by the Financing
Longstop Date (as may be extended) due to the proposed Senior Lenders or their
successors or replacements no longer offering materially the same terms under
the proposed Financing Agreements for Phase l as they had offered under the
Senior Lender Commitment Letters, or terms otherwise acceptable to the Parties,
the Parties will have the options set out in this paragraph (b). If either
Ma'aden or Alcoa, acting reasonably and in good faith, concludes that further
extensions of time either will not result in acceptable terms or would result in
an unreasonable delay in the Project, then (A) Ma'aden shall have the right to
purchase and to require Alcoa to sell or (B) Alcoa shall have the right to sell
and Ma'aden shall be required to purchase, all of Alcoa's Transferable
Interests. The consideration for the purchase of Alcoa's Transferable Interests
will be based upon (I) the Paid In Capital and Shareholder Loans of Alcoa in
respect of all the Companies, plus (II) the Entry Payment, and shall be payable
as set forth below, notwithstanding the earlier transfer of the Transferable
Interests:

 

 

(i)

If Ma'aden proceeds with the Project and achieves Financial Close in respect of
the Project within a period of fifteen (15) months following the transfer of
Alcoa's Transferable Interests, one hundred percent (100%) of the above
consideration shall be payable;

 

 

(ii)

If Ma'aden proceeds with the Project and achieves Financial Close in respect of
the Project within the period between fifteen (15) and twenty-one (21)  months
following the transfer of Alcoa's Transferable Interests, seventy-five percent
(75%) of the above consideration shall be payable;

 

 

(iii)

If Ma'aden proceeds with the Project and achieves Financial Close in respect of
the Project within the period between twenty-one (21) and twenty-seven (27)
months following the transfer of Alcoa's Transferable Interests, fifty percent
(50%) of the above consideration shall be payable: and

 

 

(iv)

If Ma'aden does not achieve Financial Close in respect of the Project within
twenty­ seven (27) months following the transfer of Alcoa's Transferable
Interests, no consideration shall be payable.

 

 

(c)

If the Financing Completion Date for Phase 1 has not occurred by the Financing
Longstop Date (as may be extended) even though the proposed Senior Lenders or
their successors or replacements are prepared to offer materially the same terms
under the proposed Financing Agreements for Phase 1 as they had offered under
the Senior Lender Commitment Letters, or terms otherwise acceptable to the
Parties and Ma'aden intends to continue with the Project and to issue the NTP
for Phase 1 within the following four (4) months,  the procedure set out in this
paragraph (c) shall apply. Ma'aden may, at any time following the said Financing
Longstop Date, give notice to Alcoa requesting that Alcoa either (i) continue
with the Project on the proposed financing terms, or (ii) decline to continue
with the Project on such terms. Unless Alcoa shall within sixty (60) days
confirm that it is prepared to continue with the Project on the proposed
financing terms and to issue the NTP for Phase 1 as aforesaid (or if Alcoa has
so confirmed but subsequently fails to take the required actions to issue the
NTP for Phase 1), Alcoa shall be deemed to have offered to transfer to Ma'aden
and Ma'aden shall have the right to purchase, all of Alcoa's Transferable
Interests for nominal consideration, so as to take effect immediately prior to
the issuance of the NTP for Phase 1, and without Alcoa having any further right
to recover its Paid In Capital, Shareholder Loans and/or Entry Payment.

 

 

 

15.2

Transfer on Financing Longstop Date

 

 

(a)

Where Ma'aden has the right to purchase, and require Alcoa to sell, all of
Alcoa's Transferable  Interests pursuant  to Clause 15.l(b)  or  (c),
or  Alcoa  has the  right  to sell to

 

 

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Ma'aden, and Ma'aden has the obligation to purchase, all of Alcoa's Transferable
Interests pursuant to Clause 15. l(b) as the case may be, the following shall
apply:

 

 

(i)

on the relevant date under Clause 15.l(b) or (c), Alcoa shall either offer or be
deemed to have offered to sell and to procure the sale by its Affiliates of all
right, title and interest in all of Alcoa's Transferable Interests to Ma'aden
upon and subject to the terms and conditions set out in this Claus e 15;

 

 

 

(ii)

Ma'aden may, by notice in writing given to Alcoa and each Company not later than
the forty fifth (45th) day following the date of the offer or deemed offer under
paragraph (i), elect to accept Alcoa's offer (or, if Alcoa has provided actual
notice of its desire to sell to Ma'aden, must accept Alcoa's offer) in respect
of all (but not less than all) of Alcoa's Transferable Interests, failing which
Ma'aden shall be deemed to have rejected such offer;

 

 

 

(iii)

provided that Ma'aden has accepted Alcoa's offer in respect of all (but not less
than all) of Alcoa's Transferable Interests, Ma'aden shall purchase all of
Alcoa's Transferable Interests, and Alcoa shall be obliged to sell, transfer and
assign such Transferable Interests to Ma'aden, on the date specified in
sub-paragraph (iv) below and in the amounts stipulated under paragraph (b)
below; and

 

 

(iv)

the completion of the purchase and sale of all of Alcoa's Transferable Interests
shall take place on the date which is ten (10) Business Days following the
acceptance of the offer under sub-paragraph (ii) above, or such other date as
may be agreed between the Parties.

 

 

 

(b)

If Ma'aden elects to accept Alcoa's offer to purchase its Transferable
Interests, Alcoa shall sell such Transferable Interests to Ma'aden at the price
and at the time determined in accordance with Clause 15.1.

 

 

 

(c)

The Parties shall, and shall ensure that any of their Affiliates that are
Shareholders shall, execute all such documentation and do all such other acts
and things as may be necessary or desirable to give effect to this Clause 15.2.

 

 

 

(d)

Nothing in this Clause 15.2 shall be construed to require Ma'aden to exercise
any of the above rights.

 

 

 

(e)

Any transfer under this Clause 15.2 shalt have effect to transfer all of Alcoa's
Transferable Interests free and clear of any Encumbrance, subject to the
Financing Agreements.

 

 

 

16.

Termination and Expiry

 

 

16.1

Full Termination and Expiry

 

This Agreement shall remain in full force and effect until the earlier of:

 

 

(a)

the expiry of the Agreement pursuant to Clause 2.2;

 

 

(b)

the written agreement of the Parties that the Agreement be terminated;

 

 

(c)

the date upon which there is only one Shareholder in each Company (including
following a transfer of all of Alcoa's Transferable Interests pursuant to
Clauses 14 or 15 or following a transfer to Ma'aden under Clause 17);

 

 

 

(d)

termination pursuant to the exercise by a Party of a right to terminate the
Agreement in accordance with its terms; or

 

 

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(e)

the termination of the Gas Allocation Letter without being superseded by an
appropriate gas supply agreement.

 

 

 

16.2

Partial Termination

 

Without prejudice to Clause 16.1, this Agreement shall terminate as between a
Party that transfers its Transferable Interests to the other Party or to a third
party in accordance with this Agreement, and the other Parties (if any), on the
relevant Transfer Date, provided that the party to which such Shares have been
transferred has become (or was already) a party to this Agreement.

 

 

16.3

Consequences of Termination  at the Expiry  of the Term

 

Following termination of this Agreement pursuant to Clause 2.2, there shall be
an orderly liquidation of the assets of each Company, following which each
Company shalt be dissolved.

 

 

16.4

Consequences  following Termination

 

 

(a)

In the event of termination of the Agreement for any reason whatsoever, there
shall be no restriction on Ma'aden continuing with the development of the
Project (with or without an alternative joint venture partner) and Ma'aden shall
be entitled to proceed with the Project, either alone or with other parties and
shall be entitled to utilise for the purposes of the Project all
Pre-Incorporation Materials and other documents and materials it has developed
itself, or which have been jointly developed by the Parties, relevant
Shareholders or the particular Company or otherwise provided by a Party for the
purposes of the Project pursuant to the Agreement including, for the avoidance
of doubt, all Intellectual Property and IP Information in the same in accordance
with Clause 26.4. It is envisaged that certain intellectual property licence
agreements may be entered into by Ma'aden and/or the Companies with Alcoa and/or
its Affiliates under which Alcoa and/or its Affiliates would licence to Ma'aden
and/or the Companies certain Intellectual Property (including certain
technologies) and provide technical support services in connection with the
Project. For the avoidance of doubt, any such intellectual property licence
agreements shall remain in full force and effect, without restriction (other
than such customary restrictions as are acceptable to Ma'aden), notwithstanding
any termination of the Agreement and Ma'aden and the Companies shall be entitled
to continue to use the Intellectual Property under such intellectual property
licence agreements and Alcoa and its Affiliates shall continue  to provide the
technical support services in respect of the Project pursuant to the terms of
such agreements.

 

 

 

(b)

In the event of a termination of the Agreement for any reason other than for the
default of Ma'aden pursuant to Clause 14.5 or 14.6(b}. Alcoa shall, if requested
by a Company or Ma'aden (if such termination occurs prior to incorporation of
each Company),

 

 

 

(i)

provide such services as listed in Schedule 14 at cost (as defined in Clause
5.3) and for a period of twenty four (24) months following such termination,
where such termination occurs before the Commercial Production Date; or

 

 

 

(ii)

provide such services as listed in Schedule 14 at cost (as defined in Clause
5.3) and for a period of twelve (12) months following such termination, where
such termination occurs after the Commercial Production Date,

 

 

and in each case in such a manner so as to facilitate an orderly handover of
activities undertaken by Alcoa personnel engaged in the Project.

 

 

(c)

In the event of a termination of the Agreement due to a default of Ma'aden
pursuant to Clauses 14.5 or 14.6(b). Alcoa will have no obligation to provide
the services listed in Schedule 14 to any Company.

 

 

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(d)

The Parties shall execute all such documentation and do all such other acts as
may be necessary or desirable to give effect to this Clause 16.4.

 

 

16.5

Survival and Rights Unaffected

 

 

(a)

Any expiry or termination shall be without prejudice to the rights and
obligations accrued as at such date.

 

 

 

(b)

Notwithstanding any termination or expiry of this Agreement, whether as to any
Party or in its entirety,  the following  provisions  shall  survive
such  termination  or expiry  as  to all Parties: Clauses  l  (Definitions  and
Interpretation), 13 (Entry Payment, Pre-Incorporation Costs and Transfer of
Pre-Incorporation Materials), 16.4 (Consequences following Termination), 16.5
(Survival and Rights Unaffected), 21 (Governing Law etc), 22 (Confidentiality
and Public  Announcements), 23 (Notices) and  26  (General  Provisions). The
Parties shall be deemed to continue to be parties to the Agreement for such
purposes only.

 

 

 

 

17.

Sale or Transfer of Shares, Pledge

 

 

17.1

General Prohibitions

 

 

(a)

Unless permitted by this Clause 17 or with the prior written consent of Alcoa,
neither Ma'aden nor any Affiliate of Ma'aden shall do, or agree to do, any of
the following:

 

 

 

(i)

sell, transfer or otherwise dispose of, any of its Transferable Interests or any
interest in any of its Transferable Interests;

 

 

 

(ii)

encumber any of its Transferable Interests or any interest in any of its
Transferable Interests;

 

 

 

(iii)

enter into any agreement or arrangement in respect of the votes or other rights
attached to any of its Transferable Interests; or

 

 

 

(iv)

enter into any agreement or arrangement to do any of the foregoing.

 

 

(b)

The Alcoa Affiliate that will hold Alcoa's Transferable Interests in the
Smelting Company and the Rolling Company shall be directly or indirectly wholly
legally and beneficially owned by Alcoa, and the Alcoa Affiliate that will hold
its Transferable Interests in the Mining & Refining Company shall be directly or
indirectly wholly legally and beneficially owned 60% (or more) by Alcoa, and 40%
by Alumina Limited, a company listed on the Australian Stock Exchange with
registered number ABN 85 004 820 419 ("Alumina Limited"), subject to the
following provisions of this sub clause (b). Unless penrmitted by Clauses 14 or
15 or this Clause 17 but subject to Clause 17.l(c) below, Alcoa shall not and
shall procure that its Affiliates shatl not, (notwithstanding the provisions of
Clause 17.2) without the prior written consent of Ma'aden do, or agree to do,
any of the following:

 

 

 

(i)

enter into any transaction or series of transactions which have the aim or
effect of directly or indirectly selling, transferring or otherwise disposing of
legal and/or beneficial interests in relation to the Transferable Interests to
any person who is not directly or indirectly wholly legally and beneficially
owned by Alcoa (or in the case of any Transferable Interests in the Mining &
Refining Company 60% (or more) by Alcoa and 40% by Alumina Limited);

 

 

 

(ii)

enter into any agreement or arrangement in respect of the votes or other rights
attached to any of its Transferable Interests to any person who is not directly
or indirectly  wholly legally and beneficially  owned  by  Alcoa  (or in the
case of any

 

 

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Transferable Interests in the Mining & Refining Company 60% (or more) by Alcoa
and 40% by Alumina Limited);

 

 

(iii)

enter into any agreement or arrangement to encumber any of its Transferable
Interests or any interest in any of its Transferable Interests to any person who
is not directly or indirectly wholly legally and beneficially owned by Alcoa (or
in the case of any Transferable Interests in the Mining & Refining Company 60%
(or more) by Alcoa and 40% by Alumina Limited); or

 

 

 

(iv)

enter into any agreement or arrangement to do any of the foregoing.

 

 

(c)

Notwithstanding the above, Alcoa shall, provided it has supplied Ma'aden in
writing with sufficient information to identify the parties involved and all
relevant material terms of such transaction thirty (30) days in advance of the
consummation by Alcoa of any such transaction, be permitted to enter into a
significant strategic joint venture or similar transaction involving all or a
substantial portion of Alcoa's interests in the relevant business of bauxite
mining and alumina refining, aluminium smelting and/or aluminium rolling, as the
case may be, provided that (i) the proportion of the revenues properly
attributable to Alcoa's Transferable Interests in the Project is not material in
comparison to the total revenues in respect of all of Alcoa's operations which
are included within such transaction in the calendar year prior to such
transaction; and (ii) such transaction is entered into only with a strategic
partner rather than financial investors. For the purposes of this clause: a
"strategic partner" is a person and/or group of persons who are, immediately
prior to the date of any such transaction with Alcoa, engaged in the business of
owning and operating bauxite mines and alumina refineries, aluminium smelters
and/or aluminium rolling mills, as the case may be, in each case, including
operations outside the Kingdom: and the proportion of revenues shall not be
considered to be material if it is less than the initial Shareholder Percentage
of Alcoa."

 

 

 

17.2

Transfers to Affiliates

 

A Party or its Affiliate which is a Shareholder, may transfer, or procure the
transfer of, all but not less than all of its Shares and all but not less than
all of its Shareholder Loans together to an Affiliate, and the provisions of
Clauses 17.4 to 17.7 shall not apply to such transfer, provided that:

 

 

(a)

the transferring Party gives not less than thirty (30) days' prior written
notice of the transfer to the other Party;

 

 

 

(b)

if Ma'aden is the transferring Party, the Affiliate is and remains an Affiliate
of Ma'aden, and if Alcoa or its Affiliate is the transferring Party, the
Affiliate is and remains an Affiliate of Alcoa;

 

 

 

(c)

the transferring Party procures that the proposed transferee of any Shareholder
Loans become a party to a Shareholder Loan Agreement with the relevant Company
(and such Company shall, and the Party shall procure that the Company shall,
promptly execute and deliver any Shareholder Loan Agreement presented to it by
the transferring Party for such purpose);

 

 

 

(d)

if it ceases to be an Affiliate in accordance with Clause 17.2(b), the proposed
transferee (and/or any subsequent transferee in a series of transfers to
Affiliates) is under an obligation immediately to retransfer its Shares and/or
Shareholder Loans, as the case may be, to the original transferring Party or
another Affiliate of Ma'aden or of Alcoa, as the case may be; and

 

 

 

(e)

a guarantee is provided in substantially the form set out in Schedule 1 by Alcoa
in respect of the obligations of such  Affiliate, or  by  Ma'aden  in
respect  of  the obligations  of its such

 

 

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Affiliate under this Clause 17.2 (but not, for the avoidance of doubt, in
respect of a KSA Controlled Transferee under Clause 17.3).

 

 

17.3

Permitted Transfers

 

 

(a)

Notwithstanding the provisions of Clause 17.4, Ma'aden shall, at any time, be
entitled to sell, transfer and assign (and may procure the sale, transfer and
assignment by any of its Affiliates of) all of Ma'aden's right, title and
interest in and to all Shares held by Ma'aden and all of the Shareholder Loans
of Ma'aden to a person who is at the time of such sale, transfer and assignment,
Controlled, directly or indirectly, by any Governmental Authority of the Kingdom
("KSA Controlled Transferee").   Ma'aden shall give not less than thirty

 

(30) days' prior written notice to Alcoa of such a proposed transfer including
details of the proposed KSA Controlled Transferee. Ma'aden shall procure that,
as a condition to such transfer, the KSA Controlled Transferee sha11 agree to be
bound by all the terms of this Agreement and shall execute an Adherence
Agreement.

 

 

(b)

Alcoa shall give its consent to the sale, transfer and assignment under
paragraph (a) above and the provisions of Clauses 17.4 to 17.7 shall not apply
to such sale, transfer and assignment.

 

 

 

17.4

Transfers of Shares

 

Other than as provided in Clause 17.2 and Clause 17.3 and subject to Clause
17.8, at any time after the fifth anniversary of the Commercial Production Date,
any Party on behalf of itself and any Affiliate that is a Shareholder (the
"Selling Party") may transfer all but not less than all of its Shares and all of
the Shareholder Loans held by such Party and its Affiliates (if applicable) to a
third party ("Third Party Offeror") only if it receives an offer (the "Offer")
from such Third Party Offeror which:

 

 

(i)

is a bona fide offer in writing;

 

 

(ii)

is irrevocable during the period of the Offer;

 

 

(iii)

is for cash consideration only; and

 

 

(iv)

contains all material terms and conditions (including the offer price (the
"Offer Price") and the intended completion date of the Offer),

 

 

and in circumstances in which the Selling Party complies with the remaining
provisions of this Clause 17.

 

 

17.5

Notice of Offers

 

 

(a)

If a Selling Party receives an Offer or Offers which it wishes to accept, it
must immediately give written notice of such Offer(s) (the "Transfer Notice"),
to the other Party (the "Remaining Party") giving details of the identity of the
Third Party Offeror(s). The Selling Party is not required to provide the details
of the terms and conditions of the Offer.

 

 

 

(b)

The Remaining Party shall within thirty (30) days of receipt of the Transfer
Notice either approve the proposed Third Party Offeror(s) or object to any
proposed Third Party Offeror(s) on reasonable grounds.

 

 

 

17.6

Notice of Right to Match the Offer

 

The Selling Party may not proceed with a sale to the approved Third Party
Offeror without first giving written notice (the "Notice of the Right to Match
the Offer") to the Remaining Party giving the Remaining Party the right to match
the Offer (the "Right to Match the Offer"). This Notice of

 

 

 

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the Right to Match the Offer should include full details of all terms and
conditions of the Offer, including the price, and a copy of the Offer.

 

 

l 7.7

Right of Remaining Party to Match the Offer

 

 

(a)

The period during which the Remaining Party has a Right to Match the Offer will
last for thirty (30) days from and including the day on which the Notice of the
Right to Match the Offer is received (the "Right to Match the Offer Period").

 

 

 

(b)

If the Remaining Party matches the Offer, then all of the Transferable Interests
shall be transferred to the Remaining Party at the Offer Price, with such
transaction closing within the period specified in Clause 17.9(a).

 

 

 

(c)

If the Remaining Party does not match the Offer, then the Selling Party may
transfer all of its Transferable Interests to the Third Party Offeror pursuant
to the Offer at a price which is not less, and on terms and conditions no less
favourable to the Selling Party, than those set out in the Offer, within ninety
(90) days from the end of the Right to Match the Offer Period. For the avoidance
of doubt, if such transaction with the Third Party Offeror does not close in
accordance with the terms of this sub-paragraph (c) within the 90-day period,
the process must begin again with an Offer under Clause 17.4.

 

 

17.8

Transfer Requirements

 

All transfers of Transferable Interests pursuant to this Agreement shall be
subject:

 

 

(i)

to the transfer being in compliance with Applicable Laws of the Kingdom;

 

 

(ii)

to the transfer when completed, not constituting or giving rise to a breach by
the transferring Party or a Company of any Project Agreement (including any
Financing Agreement) to which either of them is a party; nor constituting, with
or without the passage of time, the giving of notice or the taking of other
steps by or on behalf of the Senior Lenders, an actual or potential default or
event of default (howsoever defined) under such Project Agreement (including any
Financing Agreement);

 

 

 

(iii)

to obtaining any approvals required from the competent authorities;

 

 

(iv)

to the proposed transferee and the persons Controlling it (whether directly or
indirectly) being of good character and being qualified to hold shares in a
limited liability company in the Kingdom under Applicable Laws of the Kingdom;

 

 

(v)

if the transferee is not already a Shareholder, to the execution by the
transferee of an Adherence Agreement, no later than the Transfer Date;

 

 

 

(vi)

where the transferee is not an Affiliate of the transferor, and the transferee
or the entities that Control it do not hold assets of substantially equivalent
value to those held by the Selling Party or any person guaranteeing the
obligations of the Selling Party hereunder, to the provision of a guarantee in
substantially the form set out in Schedule 1 by a person Controlling such
transferee which is of equivalent financial substance; and

 

 

 

(vii)

where any Shareholder Loan has been made by the transferor to a Company, to the
assignment and novation of all the transferor's rights and obligations in
respect of the Shareholder Loan to the transferee.

 

 

 

17.9

Completion of Transfer

 

The transfer of Transferable Interests pursuant to this Agreement shall be made
on the following terms:

 

(a)

Completion of the transfer of the Transferable Interests shall take place on the
Transfer Date, which shall be within ninety (90) days after the date of expiry
of the Right to Match

 

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the Offer Period in the event of a transfer to the Remaining Party pursuant to
Clause 17.7 and at such reasonable time and place as the Parties agree; and

 

 

 

(b)

Payment of the purchase price for the Transferable Interests will be due on the
Transfer Date, unless otherwise agreed, and shall be paid to the account
notified for such purpose by the transferee.

 

 

 

17.10

General

 

The Parties shall keep each Company informed, at all times, of the issue and
contents of any notice(s) served pursuant to this Clause 17 and any election or
acceptance relating to those notices.

 

 

17.11

Further Assurances; Sole Shareholder

 

The Parties shall take such action as may reasonably be required to give effect
to any transfer of Shares permitted pursuant to this Clause 17 or under Clauses
14 or 15, including cooperating in obtaining approvals required from all
relevant Governmental Authorities. If a Party that is entitled to acquire Shares
pursuant to this Clause 17 would, as a result of such acquisition, become the
only Shareholder in any Company, such Party shall have the right to designate an
Affiliate to acquire a portion of the Shares which such Party is entitled to
acquire.

 

 

17.12

Put And Call Option

 

 

a)

Alcoa hereby grants to Ma'aden an option (the "Put Option") to require Alcoa to
purchase from Ma'aden (i) such number of Shares as at the relevant time
constitutes 14.9% of the total issued Shares of each of the Companies; and (ii)
14.9% of the total aggregate Shareholder Loans provided to each of the Companies
(the "Option Interests"), on the terms set out in this Clause 17. Ma'aden hereby
grants to Alcoa an option (the "Call Option") to require Ma'aden to sell to
Alcoa all of the Option Interests on the terms set out in this Clause 17.

 

 

 

b)

The Put Option may only be exercised by Ma'aden and the Call Option may only be
exercised by Alcoa within a period of six (6) months from the date falling five
(5) years after the last of the Commercial Production Dates for the three
Companies (the "Option Period") and shall be exercised simultaneously for all of
the Companies. If the Put Option or the Call Option is not exercised during the
Option Period, it shall lapse.

 

 

 

c)

The Put Option shall be exercised by Ma'aden giving Alcoa written notice (the
"Put Option Notice") which shall include:

 

 

 

(i)

a statement to the effect that Ma'aden is exercising the Put Option; and

 

 

(ii)

a signature by or on behalf of Ma'aden.

 

 

 

d)

The Call Option shall be exercised by Alcoa giving Ma'aden written notice (the
"Call Option Notice") which shall include:

 

 

 

(i)

a statement to the effect that Alcoa is exercising the Call Option; and

 

 

 

(ii)

a signature by or on behalf of Alcoa.

 

 

e)

The Put Option and the Call Option may be exercised only in respect of all of
the Option Interests.

 

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f)

All Distributions resolved or declared to be paid or made by the relevant
Company in respect of the Option Interests by reference to a record date which
falls on or before the date on which completion of the sale of the Option
Interests under the Put Option (the "Put Option Completion Date") or the Call
Option (the "Call Option Completion Date") (as the case may be) occurs shall
belong to, and be payable to, Ma'aden. For the purposes of this Clause 17.11,
"completion" shall be the date when the Parties sign before a notary the
required shareholders resolutions authorising the amendment of each of the
Companies' articles of association to reflect the transfer.

 

 

 

g)

The consideration payable by Alcoa for the Option Interests (the "Option
Consideration") shall be calculated in accordance with the provisions of Clause
17.12.

 

 

 

h)

The Parties shall use their respective reasonable endeavours to:

 

 

(i)

procure that the Option Consideration shall be finally determined as quickly as
possible consistent with the provisions of Clause 17.12; and

 

 

 

(ii)

no later than twelve (12) months following the determination of the Option
Consideration, take all such action as may reasonably be required to give effect
to any transfer of the Option Interests pursuant to this Clause 17.11, including
cooperating in obtaining approvals required from all relevant Governmental
Authorities.

 

 

 

i)

On the Put Option Completion Date or Call Option Completion Date (as
applicable), Alcoa shall pay or procure the payment of the Option Consideration
to Ma'aden in cash to a bank account, the details of  which Ma'aden shall
provide in writing to Alcoa not less than three

 

(3) Business Days prior to the Put Option Completion Date or the Call Option
Completion Date (as applicable).

 

 

17.13

Put and Call Option Valuations

 

 

(a)

Option Consideration

 

The Parties shall act in good faith to determine the Option Consideration and,
in doing so, shall follow the approach and apply the valuation methods set out
below.

 

(b)

Valuation Panel

 

In the event that the Parties are unable to agree the Option Consideration
within fifteen (15) days of the date of the Call Option Notice or the Put Option
Notice (as the case may be), the Parties shall refer the valuation to a panel of
independent experts with appropriate experience in the aluminium industry (each
a "Valuer"). The panel shall consist of three Valuers, one of whom shall be
appointed by each Party and the third of whom, who shall act as chairman of the
panel, shall be jointly nominated by the two Valuers nominated by the Parties.
Failing agreement as to the identity of the third Valuer within five (5)
Business Days of being required to do so, such third Valuer shall be nominated
by the International Centre for Expertise in accordance with the provisions for
the appointment of experts under the Rules of Expertise of the International
Chamber of Commerce (who shall be instructed to nominate only a Valuer
experienced in valuing rolling mills, aluminium  smelters, alumina refineries,
bauxite mines and/or associated facilities, and shall have experience in, and
relevant knowledge of the Kingdom and the GCC region).

 

 

(c)

Submission of Valuation

 

The Valuers shall be instructed to collectively submit a single Option
Consideration valuation  to  the Parties within sixty (60) days of the
appointment  of  the third Valuer (or

 

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such longer time as the Parties may agree) and such valuation shall be final and
binding upon the Parties. The Option Consideration shall be determined on a fair
value basis in accordance with Clause l 7. l 2(d) below.

 

 

(d)

Valuation Approach

 

In valuing the Transferable Interests which are the subject of the Put Option or
Call Option, as the case may be, the Valuers:

 

 

(i)

shall prepare the valuation by using the discounted cashflows methodology based
on the net present value of cashflows attributable to the Option Interests which
take into account the terms of the Project Agreements (including, for the
avoidance of doubt, the Gas Allocation Letter, the Gas Supply Agreement to be
entered into with Saudi Aramco, the Energy Conversion Agreement entered into
between Ma'aden and SWCC dated 10 October 2009 and other agreements with
Government or publicly held entities) over the remaining life of the Project;

 

 

 

(ii)

shall consider cashflows from Expansions, taking into account any agreed
Expansions;

 

 

 

(iii)

shall use an appropriate discount rate to compute the net present value, taking
into account customary factors such as the industry, the geography, the Parties'
familiarity with the operations, and other relevant factors;

 

 

 

(iv)

shall not apply any discount to the Option Interests as a result of the Option
Interests not conferring Control over any Company or not conferring any minority
protection rights;

 

 

 

(v)

may consult persons engaged in the marketing of aluminium who, in the Valuers'
opinion, are experts in the making of price forecasts on a regular basis;

 

 

 

(vi)

may consult any other experts as the Valuers think fit;

 

(vii)

shall be entitled to rely in good faith upon the opinions of any experts so
consulted; and

 

 

 

(viii)

shall consider any submissions as to the value of the Option Consideration which
may be made to the Valuers by a Party within thirty (30) days of receipt by  the
Party of notice of the appointment of the third Valuer.

 

 

 

17.14

Notwithstanding Clauses 17. l(a), 17.3 and 17.4, Ma'aden shall be entitled to
sell, transfer and assign to one or more Saudi public companies or public funds
or any combination of the same consistent with the provisions of Clause 17.8
(and may procure the sale, transfer and assignment by any of its Affiliates to
the same), its rights, title and interest in and to Transferable Interests held
by Ma'aden of up to 14.9% of the aggregate of the Transferable Interests of a
Company. Such sale may take place at any time prior to the Put Option or Call
Option being exercised by Ma'aden or Alcoa respectively pursuant to Clause 17.1.
Ma'aden shall give not less than sixty (60) days' prior written notice to Alcoa
of such a proposed transfer including details of the proposed Saudi public
companies and /or public funds (the "Transferees"). Ma'aden shall procure that,
as a condition of such transfer, the Transferees shall agree to be bound by all
the terms of this Agreement and shall execute an Adherence Agreement, provided
that the Transferees further agree that Ma'aden shall represent the Transferees
in all dealings with Alcoa that arise in connection with the exercise of the Put
Option or Call Option, as the case may be. The Parties agree that, for the
purposes of determining Ma'aden's Shareholder Percentage in connection with its
rights and obligations under Clause 5.4 (in respect of the Aluminium  offiake)
and Clause 5.12 (in  respect  of the

 

 

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Ma'aden LOC under the Gas Allocation Letter), Ma'aden's Shareholder Percentage
shall be deemed to include as between Ma'aden and Alcoa, any such Shares and
Shareholder Loans held by such Saudi public companies or public funds. The
Parties hereby agree to take any action which may reasonably be required in
order to implement the provisions of this Clause 17.13 including (without
limitation) cooperating as necessary to amend the relevant Company's foreign
investment licence, articles of association and commercial registration so as to
formalize the transfer of the Shares."

 

 

18.

Valuations

 

 

18.1

Fair Market Value

 

Where a provision of this Agreement calls for a determination of the "Fair
Market Value" of Alcoa's Transferable Interests, the Parties shall act in good
faith to make such determination and, in doing so, shall apply commonly accepted
valuation methods.

 

 

18.2

Valuation Panel

 

In the event that the Parties are unable to agree the Fair Market Value of
Alcoa's Transferable Interests within fifteen (15) days of the relevant Chairman
requesting them to do so, the Parties shall refer the valuation to a panel of
independent experts with appropriate experience in the aluminium industry (each
a "Valuer"). The panel shall consist of three Valuers, one of whom shall be
appointed by each Party and the third of whom, who shall act as chairman of the
panel, shall be jointly nominated by the two Valuers nominated by the Parties.
Failing agreement as to the identity of the third Valuer within five Business
Days of being required to do so, such third Valuer shall be nominated by the
International Centre for Expertise in accordance with the provisions for the
appointment of experts under the Rules of Expertise of the International Chamber
of Commerce (who shall be instructed to nominate only a Valuer experienced in
valuing rolling mills, aluminiwn smelters, alumina refineries, bauxite mines and
associated facilities).

 

 

18.3

Submission of Valuation

 

The Valuers shall be instructed to collectively submit a single Fair Market
Value valuation to the Parties within thirty (30) days of the appointment of the
third Valuer (or such longer time as the Parties may agree) and such valuation
shall be final and binding upon the Parties. The Fair Market Value shall be
determined on a fair market basis as between a willing and not anxious seller
and a willing buyer on arms' length terms in accordance with Clause 18.4.

 

 

18.4

Valuation Approach

 

In valuing Alcoa's Transferable Interests, the Valuers:

 

 

(a)

shall prepare the valuation based on the net present value of cash flows
attributable to Alcoa's Transferable Interests, taking into account the terms of
the Project Agreements and the remaining life of the Project and all such other
matters as the Valuers deem appropriate;

 

 

 

(b)

shall not apply any discount to Alcoa's Transferable Interests as a result of
Alcoa's Shareholder Percentage not conferring Control over any Company;

 

 

(c)

if making the determination prior to the Commercial Production Date for any of
the Mine, the Refinery, the Smelter or the Rolling Mill, may consult any
contractor or manager appointed pursuant to any Construction Agreement and/or
any other contractors engaged in the development, construction or operation of
the Mine, Refinery, Smelter or Rolling Mill;

 

 

 

(d)

may consult persons engaged in the marketing of aluminium who, in the Valuers'
opinion, are experts in the making of price forecasts on a regular basis;

 

 

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(e)

may consult any other experts as the Valuers thinks fit;

 

 

(f)

shall be entitled to rely in good faith upon the opinions of any experts or
other persons so consulted; and

 

 

 

(g)

shall consider any submissions as to the Fair Market Value which may be made to
the Valuers by a Party within thirty (30) days of receipt by the Party of notice
of the appointment of the third Valuer.

 

 

19.

Assignment

Except as otherwise provided in this Agreement, no Party shall have the right to
assign its rights and/or transfer its obligations under this Agreement to any
other person and/or be released from its obligations under this Agreement
unless, such Party is simultaneously transferring its Transferable Interests to
such person in accordance with Clause 17.

 

 

20,

Warranties

 

Each Party hereby warrants and undertakes to the other Party on its behalf and
on behalf of any Affiliate being a Shareholder that:

 

 

(a)

it is duly incorporated and validly existing in accordance with the laws of the
country and/or state under which it is incorporated;

 

 

 

(b)

it has the power and authority to execute and deliver, to perform its
obligations under and to undertake the transactions anticipated by this
Agreement (or to procure that such obligations and transactions are undertaken
by its Affiliates) and all necessary corporate and other action has been taken
to authorise the execution, delivery and performance of this Agreement;

 

 

 

(c)

its officers have the power and authority to act on its behalf in entering into
this Agreement and the Shareholder Loan Agreements;

 

 

 

(d)

it is not insolvent, no petition has been filed relating to its insolvency and
no proceedings have been issued for its dissolution or liquidation;

 

 

 

(e)

this Agreement has been duly executed and constitutes a valid, legal and binding
obligation of such Party enforceable in accordance with its terms;

 

 

 

(f)

the execution and delivery of this Agreement and the performance by it or its
relevant Affiliates of its obligations under and the transactions anticipated by
this Agreement will not contravene any law applicable to it or such Affiliates
or conflict with or result in a breach of or default under its or their
corporate charter or other organizational documents or any agreement or other
obligation binding on it or any of its Affiliates; and

 

 

 

(g)

with respect to all activities contemplated under this Agreement, it has not,
nor will it, or its (or its Affiliates') directors, officers or employees pay,
offer, promise, or authorize the payment of money or anything of value, directly
or indirectly, to a Government Official while knowing or having reason to
believe that any portion of such exchange is for the purpose of:

 

 

 

(i)

influencing any act or decision of a Government Official in its official
capacity, including the failure to perform an official function, in order to
assist itself, the Companies or any other person in obtaining or retaining
business, or directing business to any third party;

 

 

 

(ii)

securing an improper advantage;

 

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(iii)

inducing a Government Official to use its influence to affect or influence any
act or decision of a Governmental Authority in order to assist itself, the
Companies or any other person in obtaining or retaining business, or directing
business to any third party; or

 

 

 

(iv)

providing an unlawful personal gain or benefit, of financial or other value, to
a Government Official.

 

 

 

21.

Governing Law, Dispute Resolution and Language

 

 

21.1

Governing Law

 

This Agreement shall be governed by and construed and interpreted according to
English law.

 

 

21.2

Reference to  Senior Management

 

Prior to referring any dispute, controversy or claim arising out of or in
connection with this Agreement, or the breach, termination or invalidity
thereof, (for the purposes of this Clause 21 a "dispute"), other than
proceedings to enforce an agreement reached between the Parties under this
Clause 21.2, to arbitration pursuant to Clause 21.3 below, the Party (which
shall include any Affiliate of such Party being a Shareholder) wishing to or
considering making such reference shall notify in writing the other Party of the
nature of the dispute and its background (for the purposes of this Clause 21, a
"dispute notice") and its proposed basis for settlement of such dispute and the
other Party shall respond to such dispute notice within fourteen (14) days of
receipt, setting out any clarification it may feel relevant and including its
proposed basis for settlement. The  chief executives or presidents of the
ultimate parent companies of each Party or their designees shall then meet
within thirty (30) days of the issue of the dispute notice to attempt a
reconciliation and settlement of the dispute. No statement as to a Party's
proposed basis for settlement nor any discussions or communications between the
Parties (or their ultimate parent companies) pursuant to this Clause 21.2
(except for the terms of any agreed settlement between the Parties) may be
relied upon or referred to in later court, arbitration, enforcement or appeal
proceedings.

 

 

21.3

Dispute Resolution

 

 

(a)

Except as otherwise provided in Clause 9, Clause 17.13 and Clause 18 of this
Agreement, if any dispute arising out of or in connection with the Agreement is
not resolved pursuant to Clause 21.2 above within forty five (45) days of its
referral to the Parties' senior management, such dispute shall be, if requested
by any Party, referred to and finally settled by arbitration under the Rules of
Arbitration of the International Chamber of Commerce as amended or substituted
from time to time (the "ICC Rules" and the proceedings brought in accordance
with this Clause 21.3), which ICC Rules are deemed to be incorporated into this
Agreement except to the extent expressly modified by this Clause 21.3.
Arbitration shall be the exclusive method for resolution of the dispute and the
determination of the arbitrators shall be final and binding. The Parties agree
that they will give conclusive effect to the arbitrators' determination and
award and that judgment thereon may be entered and enforced by any court of
appropriate jurisdiction.

 

 

 

(b)

The tribunal shall consist of three (3) arbitrators, one of whom shall be
appointed by each Party and the third of whom, who shall act as chairman, shall
be jointly nominated by the two arbitrators nominated by the Parties. Failing
agreement as to the identity of the third arbitrator within five Business Days
of being required to do so, such third arbitrator shall be nominated by the
International Court of Arbitration in accordance with the ICC Rules.

 

 

 

(c)

The place of arbitration shall be London. The language to be used in the
arbitration shall be English, and any documents or portions of them presented at
such arbitration in a language other than English shall be accompanied  by an
English translation thereof. The arbitrators

 

 

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shall decide such dispute in accordance with the substantive laws of England
applicable hereto.

 

21.4

Continuing Obligations

 

If a dispute is referred to arbitration pursuant to Clause 21.3 above, unless
the arbitrators rule otherwise, the obligations of the Parties shall not be
suspended and the provisions of this Agreement shall continue to be carried out
by the Parties.

 

 

21.5

Jurisdiction

 

 

(a)

The courts of England shall, subject to paragraph (b) below, have non-exclusive
jurisdiction with respect to the enforcement of the arbitration provisions of
this Agreement and the Parties expressly submit to the jurisdiction of such
courts with respect to any proceedings to enforce the arbitration provisions of
this Agreement. Each Party irrevocably waives any objection which it might at
any time have to the courts of England being nominated as the forum to hear and
decide any such proceedings and agrees not to claim that the courts of England
are not a convenient or appropriate forum.

 

 

 

(b)

Without resulting in the waiver of any remedy under this Agreement and
in  conjunction with each disputing Party's rights in accordance with Rule 25 of
the ICC Rules, nothing in this Clause 21 shall preclude a disputing Party from
seeking injunctive relief from a court pending the commencement of arbitral
proceedings in accordance with Clause 21.3 (or pending the arbitral tribunal's
determination of the merits of the dispute). The Parties hereby irrevocably
submit to the non-exclusive jurisdiction of the courts of England for such
injunctive relief and waive any objection or defence they may have to the venue
or jurisdiction of such courts. Without limiting the generality of the
foregoing, the Parties shall have the right to seek injunctive relief in any
court of competent jurisdiction and the seeking of injunctive relief in one or
more jurisdiction shall not preclude a Party from seeking such relief in any
other jurisdiction.

 

 

 

21.6

Process Agent

 

Each Party that is not incorporated and registered under the laws of England and
Wales will appoint a process agent in the United Kingdom to receive legal
process served under this Agreement. Each Party agrees that service of process
in respect of it upon such agent, together with written notice of such service
given to it as provided in Clause 23.1, shall be deemed to be effective  service
of process upon it in any such action, suit or proceeding. Each Party agrees
that the failure of such agent to give notice to it of any such service shall
not impair or affect the validity of such service or any judgment rendered in
any action, suit or proceeding based thereon. If for any reason such agent shall
cease to be available to act as such, each such Party agrees to designate a new
agent in the City of London, on the tenns and for the purposes of this Clause.
Nothing herein shall be deemed to limit the ability of any Party to serve any
such legal process in any other manner, to obtain jurisdiction over any other
Party or to bring any action, suit or proceeding against any other Party in such
other jurisdictions, and in any other manner as may be permitted or required by
Applicable Laws.

 

 

(a)

Ma'aden hereby irrevocably agrees to appoint Law Debenture Corporate Services
Limited, with offices at the date of this Agreement at Princes House, 95 Gresham
Street, London EC2V 7LY, England as its authorised agent on which any and all
legal process may be served in any such action, suit or proceeding brought in
the courts of England, and  to execute such documentation as may reasonably be
required by such agent in connection with its appointment.

 

 

 

(b)

Alcoa and any of its Affiliates being a Shareholder hereby irrevocably agrees to
appoint Pinsent Masons LLP, with offices at the date of this Agreement at 1 Park
Row, Leeds, LS1 5AB as its authorised  agent on which any and all  legal
process  may be served in any such

 

 

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action, suit or proceeding brought in the courts of England, and to execute such
documentation as may reasonably be required by such agent in connection with its
appointment.

 

 

21.7

Language

 

This Agreement and the agreements contemplated herein are to be executed in
Arabic and in English. The English language shall be the governing language
despite translation into any other language(s), and the English versions shall
prevail over any translated versions in the event of conflict. No translation,
if any, of this Agreement into any other language shall be of any force or
effect in the interpretation of this Agreement or in a determination of the
intent of each Party.

 

 

22.

Confidentiality  and  Public Announcements

 

22.1

Confidentiality

 

 

(a)

Each Party and any Affiliate being a Shareholder shall (i) ensure and shall
cause each Company to ensure that the contents of this Agreement and any
confidential information regarding the business, assets, customers, processes
and methods of any other Party which it may learn in the course of negotiations
for, or carrying out of this Agreement, is treated by it in strict confidence
and (ii) only disclose such information to an Affiliate or such of its or its
Affiliate's directors, officers, employees, professional advisers or
consultants, or to any bank or financial institution from whom the Party or any
Company is seeking finance, to the extent that such disclosure is necessary and
(iii) not make use of such information for purposes other than the
implementation of the Parties' cooperation hereunder unless such information:

 

 

 

(i)

is known to such Party prior to learning of it from the other;

 

 

(ii)

is obtained by such Party from a source other than the disclosing Party which
source, (i) did not require such Party to hold such secrets or information in
confidence and (ii) did not limit or restrict such Party's use thereof;

 

 

 

(iii)

becomes public knowledge other than through the fault of such Party;

 

 

(iv)

is required to be disclosed by any competent legal or regulatory authority;

 

 

(v)

is required to be disclosed by any internationally recognized stock exchange,
provided that in any such case the Party shall provide prompt written notice to
the other Party prior to making such disclosure and provide details of the
proposed form, nature and purpose of such disclosure so that the disclosing
Party may seek a protective order or other appropriate remedy or waive
compliance with the provisions of this clause;

 

 

 

(vi)

is independently developed by such Party; or

 

 

(vii)

is permitted to be used or disclosed pursuant to the terms of a separate
agreement between the disclosing Party and either the receiving Party or
the  relevant Company, in which case such use or disclosure shall be governed
by  the terms of the relevant agreement.

 

 

 

(b)

Each Party shall impose on its Affiliates, or such of its or its Affiliate's
directors, officers, employees, professional advisers or consultants, or to any
bank or financial institution from whom the Party is seeking finance, an
equivalent obligation of confidentiality and shall obtain  an  undertaking of
strict  confidentiality  from such  Affiliates,  or such of  its or its

 

 

 

Affiliate's directors, officers, employees, professional advisers or
consultants, or financial institution from whom the Party is seeking finance, on
the terms set out in this Clause 22.

 

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(c)

Specific information disclosed shall not be deemed to be within the foregoing
exceptions simply because such information is included in more general
information within the said exceptions. In addition any combination of
information, features, concepts, designs or process flows, shall not be
automatically deemed to be within the said exceptions simply because the
individual items of information, features, designs, concepts or process flows
are within the said exceptions.

 

 

 

22.2

Disclosure of Information by Managers to Shareholders and Parties

 

A Manager shall be entitled to supply detail of any business transacted at Board
of Managers meetings or committee meetings and any other information obtained by
him in his capacity as a Manager, to the Party or Shareholder by whom he was
appointed or to the professional advisers of such Party or Shareholder, subject
always to the provisions of this Clause 22.

 

 

22.3

Announcements

 

Each Party shall notify the other Party and the relevant Company of its intent
to issue any press release or other public announcement with respect to the
Company and its activities and, except as required by any competent legal or
regulatory authority or any internationally recognized stock exchange, shall not
issue any such release or announcement without the prior consent of the other
Party and the Company, which consent shall not be unreasonably withheld. Such
consent shall not, however, be required in order for a Party to include a
reference to its ownership interest in the relevant Company in its annual
reports and similar publications.

 

 

22.4

Survival

 

The Parties' obligations under this Clause 22 shall survive any termination or
expiry of this Agreement for a period of five (5) years from the date of such
termination or expiry and shall be without prejudice to any other
confidentiality obligations imposed on the Parties or any Company by the
Confidentiality & Non-Disclosure Agreement (in respect of the period prior to
the signing of this Agreement) or any of the Project Agreements.

 

 

23.

Notices

 

 

23.1

Notices

 

All notices, approvals, consents or other communications in connection with this
Agreement shall be given in writing by an authorized officer of the Party (or an
Affiliate being a Shareholder) providing any such notice, approval, consent of
other communication and shall either be left at the address of the addressee
which is specified below, sent by reputable international courier to the address
of the addressee specified below, hand delivered to the address of the addressee
which is specified below or sent by facsimile to the number specified below,
provided in each case that if the addressee notifies the other Party and the
relevant Company of another address or facsimile number then such other address
or facsimile number shall be deemed to replace that set out below.

 

For Ma'aden:

Address:

P.O. Box 68861

Riyadh 2537

Kingdom of Saudi Arabia

 

 

 

Facsimile: +966 1 874 8200

Attn.: Vice President Aluminium SBU

 

With a copy to:

Ma'aden  Legal Department

P.O. Box 68861

Riyadh 11537

Kingdom of Saudi Arabia

 

 

Facsimile: +966 1 874 8290

Attn: Chief Legal Counsel

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For Alcoa and its Shareholder Affiliates:

 

Address:

390 Park Avenue

New York, NY 10022

United States of America

Facsimile: +1 212 836 2804

Attn.: President, Global Primary Growth

 

 

 

With a copy to:

Alcoa Inc. Legal Department

20l Isabella Street

Pittsburgh, PA 15212

United States of America

Facsimile: +1 412 553 4064

Attn:  General Counsel

 

 

23.2

Effect

 

 

(a)

Unless a later time is specified in it, a notice, approval, consent or other
communication takes effect from the time it is actually received or deemed to be
received pursuant to this Clause 23.2. A couriered letter shall be deemed to
have been received when delivered to the appropriate address. A notice sent by
facsimile shall be deemed to have been received when a copy of such facsimile
has been received, unless the receiving Party or the relevant Company can
demonstrate that it did not receive a complete copy of the same. Facsimile
notices shall be confirmed by an alternative method of giving notice. A Party
receiving a notice by facsimile shall confirm receipt by returning a signed copy
of such notice to the sender by hand or reputable international courier to the
address which is specified above.

 

 

 

(b)

Where a notice is received during a day which is not a business day (in the
place of receipt), or after 3pm local time it shall be deemed to have been
received on the next business day (at such place of receipt) thereafter.

 

 

 

24.

Further Assurances

 

 

24.1

Undertakings

 

 

(a)

Each Party and any Affiliate being a Shareholder agrees that it shall:

 

 

(i)

Act in good faith with regards to the other Party and to each Company and at all
times render to the other Party and each Company true accounts, full information
and truthful explanations regarding all matters relating to the affairs of each
Company;

 

 

 

(ii)

in all cases treat each Company as a separate and independent profit centre and
make every reasonable effort to conduct the affairs of each Company and its own
dealings with such Company in a manner which gives effect to this Agreement and
promotes the business and profitability of each Company; and

 

 

 

(iii)

in its capacity as a Shareholder, exercise its voting rights and endeavour to
cause its representatives on the Board to exercise their voting rights in a
manner which gives full force and effect to the terms and conditions of this
Agreement, the Articles of Association, the Project Agreements and any other
agreement referred to herein.

 

 

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(b)

The Parties and any Affiliate being a Shareholder shall use their reasonable
efforts to procure that the Articles of Association of a Company are from time
to time duly amended, and any such amendment is duly registered with the
Commercial Register, in accordance with Applicable Laws of the Kingdom if and
whenever such amendment is reasonably necessary or desirable to give effect to,
or to conform them to, the provisions of this Agreement, or any decision of the
Board or the Shareholders, or the Project Agreements. Without limiting the
generality of the foregoing, the Parties and any Affiliate being a Shareholder
shall procure that the Articles of Association of each Company are amended:

 

 

 

(i)

to permit the Company to engage in any activity that may be contemplated or
required by the terms of this Agreement or any Project Agreement or any decision
of the Board of Managers or the Parties in accordance with this Agreement,
including by means of expanding the purpose or objects of the Company;

 

 

 

(ii)

to give effect to any increase or decrease (or required increase or decrease) in
the capital of the Company contemplated by this Agreement or any change (or
required change) in the holdings of Shares in the capital of the Company as
between the Shareholders required or contemplated by this Agreement;

 

 

 

(iii)

to give effect to the introduction of any new Shareholder that acquires (or
intends to acquire) Shares in accordance with this Agreement.

 

 

24.2

Further Assurances

 

The Parties and any Affiliate being a Shareholder hereby agree to execute and
deliver promptly all powers of attorney, consents and additional instruments,
and to take any such further action which may reasonably be required in order to
consummate the transactions anticipated by this Agreement, including
without  limitation  any  transfer of Shares  in any Company  pursuant  to
Clauses  14, 15 or 17.

 

 

24.3

Business Conduct

 

The Parties agree that, in relation to the development of the Project and the
subsequent business and operation of each Company, they shall (and shall procure
that each Company shall):

 

 

(a)

develop, construct and operate the Project and operate the business in a manner
that meets or exceeds internationally recognised standards, best practises,
business conduct and ethics in accordance with internationally accepted
commercial practices in the bauxite mining, alumina refining, aluminium smelting
and rolling mill industries and without regard to the interests of any Party or
any Affiliate;

 

 

 

(b)

without limiting the generality of paragraph (a) above, in order to ensure the
long-term sustainability of the Project, undertake maintenance and replacement
capital expenditures relating to the Project in a manner that meets or exceeds
internationally recognised standards and best practices in the bauxite mining,
alumina refining, aluminium smelting and rolling mill industries; and

 

 

 

(c)

operate with objectives of low cost operations, continuous improvement and
respect for people, consistent with best practices of the aluminium businesses.

 

 

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25.

Competing Businesses

 

 

25.1

Acknowledgement

 

The Parties acknowledge that the Parties and their Affiliates are engaged in, or
may become engaged in, bauxite mining, alumina refining, aluminium smelting,
rolling mill operations and other businesses that may compete with the Project.

 

 

25.2

No Obligation to Offer

 

Subject to Clauses 5.10, 5.11 and 25.3, neither Party (nor any of its
Affiliates) shall have any obligation to offer or provide to any Company or the
other Party (or any such other Party's Affiliate) any option or other right or
opportunity to pursue or acquire any right, title or interest in any corporate
opportunity or business venture prior to pursuing such opportunity or venture
for such Party's (or such Party's Affiliate's) own benefit.

 

 

25.3

Competing Projects Following Termination

 

In the event of termination of this Agreement, other than where Ma'aden is the
Defaulting Party in accordance with Clause 14.5, Alcoa shall not itself or
through any Affiliate develop, construct, operate or otherwise implement or
participate in whether itself, in partnership, joint venture or any such other
relationship with any other person, in any project in any of the Kingdom, GCC
Countries or Iran, which would compete with the Project, prior to the date that
is (i) if the termination occurs prior to the Commercial  Production  Date,
three (3)  years after termination of  this Agreement; or (ii) if the
termination occurs after the Commercial Production Date but prior to the fifth
anniversary of the Commercial Production Date, two (2) years after termination
of this Agreement. The foregoing restrictions shall not apply to any bauxite
mining, alumina refining, aluminium smelting, rolling mill operations and other
businesses that may compete with the Project (A) in which the Defaulting Party
is engaged as of the date of termination of this Agreement; or (B) in which the
Defaulting Party owns a direct or indirect interest of fifteen percent (15%) or
less or otherwise with the prior written consent of Ma'aden.

 

 

26.

General Provisions

 

 

26.1

Severability

 

If any provision or term (or part thereof) of this Agreement shall be, or be
found by any authority or court of competent jurisdiction to be, invalid,
illegal or unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect the other provisions or terms (or parts
thereof) in that jurisdiction or the whole of the Agreement in any other
jurisdiction, all of which shall remain in full force and effect. As regards the
provision or term (or part thereof) which is or has been found to be invalid,
illegal or unenforceable, the Parties shall negotiate in good faith in order to
agree the terms of a mutually satisfactory provision to be substituted for the
invalid, illegal or unenforceable provision and which as closely as possible
validly gives effect to the Parties' intentions as expressed herein.

 

 

26.2

Waiver

 

The failure, delay or forbearance of any Party or any Affiliate being a
Shareholder to insist upon, exercise or enforce any right or remedy conferred by
this Agreement shall not be or be deemed to be or be construed as a waiver of
the right or remedy or of any other rights or remedies nor shall such failure,
delay or forbearance operate as a bar to the exercise or enforcement of the
right or remedy at any time or times thereafter.

 

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26.3

Compliance with Law and Permits

 

 

(a)

In performing its obligations under this Agreement each Party and any Affiliate
being a Shareholder shall comply with (including without limitation giving all
notices under and paying all fees required by) all laws applicable to such Party
or Affiliate.

 

 

 

(b)

Without prejudice to the generality of this Clause 26.3. the Parties and any
Affiliate being a Shareholder shall, and shall procure that each Company shall,
comply with all Applicable Laws relating to the prohibition on the corruption of
public officials.

 

 

 

(c)

Each Party and any Affiliate being a Shareholder shall obtain and maintain in
effect all government licenses, permissions, consent, and approvals as it may be
required to obtain in order to perform its obligations under this Agreement.

 

 

26.4

Intellectual Property

 

 

(a)

Subject to any provisions as to ownership of Intellectual Property under any of
the Project Agreements (including the Smelter TTA and Smelter OSA). any rights
to Intellectual Property which are developed by a Company during the course of a
Company's activities under this Agreement shall belong to the Company.

 

 

 

(b)

The Parties. pursuant to separate technology license agreements which shall be
part of the Project Agreements, shall grant to the Companies a license to use
Intellectual Property which is owned by the Parties but is required to implement
the Project. Without limiting the foregoing. Alcoa and its Affiliates shall
offer to enter into with the relevant Companies technology licence agreements in
respect of the Intellectual Property and in respect of technical support
services as described in Part 2 of Schedule 14 on the payment terms described
therein.

 

 

 

(c)

In the event that this Agreement is terminated for any reason whatsoever, the
Parties acknowledge that Ma'aden is entitled in accordance with Clause 16.4 to
continue with the Project and utilise any Intellectual Property that has been
provided by Alcoa to the Project or has been developed in the course of the
Companies' activities under this Agreement. Accordingly, except to the extent
that such Intellectual Property is subject to a separate intellectual property
licence agreement entered into for value with the relevant Company, Alcoa hereby
grants to Ma'aden and the Companies an irrevocable, royalty-free license to use.
without the right to assign (other than to a project company). sublicense or
otherwise transfer to a third party, any such intellectual Property not
otherwise licensed thereafter solely in connection with the Project.

 

 

 

(d)

Without prejudice to the provisions of Clause 22 above or the provisions of any
of the Project Agreements, each of the Parties and any Affiliate being a
Shareholder shall procure that the Companies shall take all steps necessary to
protect all Intellectual Property of the Companies or, in respect of
sub-paragraphs (ii) and (iii) below of Ma'aden, and information comprising or
relating to such rights (the "IP Information"), including, without limitation:

 

 

 

(i)

ensuring that the Board of Managers, the President and the other officers and
employees of a Company use commercially appropriate measures to protect and
safeguard the IP Information at all times and comply with  the  provisions  of
Clause 22 and this Clause 26.4;

 

 

 

(ii)

using the IP Information provided to a Company or to Ma'aden under the Smelter
TTA, only for the purposes for which it was licensed to the Company or Ma'aden
(as the case may be);

 

 

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(iii)

using the IP Information provided to a Company or to Ma'aden under the Smelter
OSA, only for the purposes for which it was provided to such Company or Ma'aden
(as the case may be) under the Smelter OSA;

 

 

 

(iv)

not disclosing any IP Information to any person, except for employees,
suppliers, contractors, government agencies or financial institutions, who
reasonably require information for the purposes related to the Project and who
have agreed to be bound by the provisions of Clause 22 and this Clause 26.4;

 

 

 

(v)

not using any IP Information for the benefit of any third party; and

 

 

(vi)

in the event that a Company is compelled by judicial or administrative process
or required by Applicable Law or any Governmental Authority to disclose any IP
Information, seeking a protective order or other appropriate remedy to prevent
such disclosure, only disclosing such portion of the IP Information that is
required to be disclosed and using all reasonable efforts to obtain a protective
order or other assurance that confidential treatment will be afforded to such IP
Information.

 

 

26.5

Entire Agreement

 

This Agreement constitutes the complete and exclusive statement of the terms of
the contract between the Parties and any Affiliate being a Shareholder (together
with  the  Adherence Agreements) with reference to the subject matter hereof,
and supersedes all prior agreements, promises, proposals, representations,
understandings and negotiations, whether or not reduced to writing, between the
Parties and any Affiliate being a Shareholder respecting the subject matter
hereof. No statements or agreements, oral or written, made prior to or at the
signing hereof shall vary or modify the written terms hereof (provided that this
Clause shall not have effect to limit or excuse liability for any fraudulent
act).

 

 

26.6

Improper Inducements

 

 

(a)

No Party or Affiliate being a Shareholder shall, and each Party and Affiliate
being a Shareholder shall ensure that no Company shall, (in connection with the
Company or its business) make any payment in violation of any Applicable Law.

 

 

 

(b)

Except for customary promotional material and occasional business entertainment
limited in value in any instance to the reasonable cost of a business meal, no
Party or Affiliate being a Shareholder (whether acting directly or indirectly or
through any employee, officer, director or representative) shall promise, give,
offer or accept, and warrants that it has not promised, given, offered or
accepted, any money, fees, commissions, personal services, credit, gift,
gratuity, thing of value or compensation of any kind, to or from any person
including:

 

 

(i)

Any Party or its Affiliates;

 

 

(ii)

Any of their agents, independent contractors or subcontractors;

 

(iii)

The Government of the Kingdom;

 

 

(iv)

The employees of any of the foregoing,

 

for the purpose of improperly obtaining or rewarding favourable treatment in
connection with this Agreement or any of the other agreements contemplated by
this Agreement.

 

 

(c)

Any violation of this provision shall constitute a Material Breach of the
Agreement which, without prejudice to any Party's right to enforce any other
remedy provided by law, shall entitle that Party to terminate the Agreement in
accordance with Clause 16.l(d).

 

 

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26.7

Language

 

The English language shall be used and be the official language for written
communications (including, but not limited to, the reporting of results of
operations and forecasts of same) between and among the Parties, any Affiliate
being a Shareholder and each Company and otherwise under this Agreement.

 

 

26.8

Amendments

 

No variation or amendment to this Agreement shall be effective unless in writing
signed by duly authorised officers or representatives of each Party on behalf of
itself and any Affiliate being a Shareholder.

 

 

26.9

No Partnership

 

Nothing contained or implied in this Agreement shall constitute or be deemed to
constitute a partnership between the Parties or any Affiliates being
Shareholders (or any of them) and none of the Parties (or an Affiliate of a
Party being a Shareholder) shall have any authority to bind or commit any other
Party in any way, save as expressly set out herein.

 

26.10

Priority of Documents

 

In the event of conflict or inconsistency between this Agreement and any of the
Articles of Association, the terms and conditions of this Agreement shall
prevail.

 

26.11

Waiver of Immunity

 

Each Party and any Affiliate being a Shareholder unconditionally and irrevocably
agrees that the execution, delivery and performance by it of this Agreement
constitutes private and commercial acts, and to the extent that a Party or
Shareholder or any of its revenues, assets or properties shall be entitled, with
respect to any proceeding relating to enforcement of this Agreement or any award
thereunder at any time brought against such Party or Shareholder or any of its
revenues, assets or properties, to any sovereign or other immunity from suit,
from jurisdiction, from attachment prior to judgment, from attachment in aid of
execution of a judgment, from execution of a judgment or from any other legal or
judicial process or remedy, and to the extent that in any jurisdiction there
shall be attributed such an immunity, such Party or Shareholder irrevocably
agrees not to claim and irrevocably waives such immunity.

 

 

26.12

No Liability for Consequential Losses, etc.

 

Notwithstanding anything in this Agreement, no Party or any of its Affiliates
being a Shareholder shall have any liability to the other Party (whether in
contract, tort or otherwise) for any consequential, incidental, special or
indirect losses (including loss of anticipated profits) arising from or relating
to this Agreement, whether out of any Event of Default, other breach of this
Agreement, indemnity, any fault or negligence on the part of a Party or its
Affiliates (or their respective employees) or otherwise.

 

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IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its
duly authorized representative as of the date first written above.

 

 

 

 

 

 

 

By

 

SAUDI ARABIAN MINING COMPANY (MA’ADEN)

Dr. Abdullah Dabbagh, President and CEO

 

 

 

 

Signed:

 

 

 

 

 

By

 

ALCOA INC.

Klaus Kleinfeld, President and CEO

 

 

 

 

Signed:

 

 

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