ELECTRICITY SUPPLY AGREEMENT

DATED 28 OCTOBER 2004

ENERCAL

and

GORO NICKEL
(acting through and on behalf of its New Caledonian branch)

 

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CONTENTS

              Clause       Page  
 
           
1.
  Definitions and Interpretations     1  
2.
  [not used]     14  
3.
  Duration and Term     14  
4.
  Funnel Mechanism     15  
5.
  Sale and Purchase of Capacity and Electricity     18  
6.
  Extra Electricity     18  
7.
  Electricity Before the Start Date     19  
8.
  Payments     19  
9.
  Adjustments     19  
10.
  Billing and Payment     21  
11.
  TSS and other Taxes     22  
12.
  Metering     23  
13.
  Additional rights and obligations of the parties     25  
14.
  Changes in Law     29  
15.
  ESA Coordinating Committee     33  
16.
  Force Majeure     34  
17.
  Termination     37  
18.
  Confidentiality     43  
19.
  Representations and Warranties     44  
20.
  Permits and Other Approvals     45  
21.
  Assignment     46  
22.
  Liabilities     46  
23.
  Insurance     47  
24.
  Indemnification     48  
25.
  Waiver     49  
26.
  Variation     49  
27.
  Entire Agreement     49  
28.
  Severability     49  
29.
  Notices     49  
30.
  Further Assurance     50  
31.
  Announcements     51  
32.
  Costs and Expenses     51  
33.
  Counterparts     51  
34.
  Language     51  
35.
  Third Party Rights     51  
36.
  Governing Law     51  
37.
  Expert Determination     51  
38.
  Arbitration     52  
 
            Schedule        
 
           
1.
  Availability Charge     54  
2.
  Fuel charge and variable operation and maintenance charge     56  
3.
  Delivery Points and Switchroom     60  
4.
  [NOT USED]     62  
5.
  Coal Specification     63  
6.
  Meter Testing Procedures     65  
7.
  Electricity Specification     66  
8.
  Scheduling Procedures     71  
9.
  Penalties     75  
10.
  Insurance     77  
11.
  Early Electricity Price     78  
12.
  AC Present Value     79  

 

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THIS AGREEMENT is made the 28th day of October, 2004

BETWEEN:

(1)   ENERCAL a company incorporated under the laws of France and registered in
Nouméa, New Caledonia with registered number B015 255 whose registered office is
at 87 avenue du Général de Gaulle, 98800 Nouméa, New Caledonia (Enercal); and

(2)   GORO NICKEL a company incorporated under the laws of France with
registered number 313954570 RCS Paris whose registered office is at 38 Rue du
Colisée, 75008, Paris, France (acting through and on behalf of its New
Caledonian branch whose office is at 7 bis, rue Suffren, BP218, 98845 Nouméa
Cedex, New Caledonia) (Goro Nickel).

WHEREAS:

(A)   Enercal is responsible for generating, transporting, dispatching and
distributing electricity in New Caledonia.   (B)   Goro Nickel holds certain
concessions pursuant to which Goro Nickel is entitled to explore for, develop
and mine certain minerals, among which are nickel and cobalt, in a specified
area in New Caledonia (the Concession).   (C)   Goro Nickel, having discovered a
mineral deposit containing nickel and cobalt within the Concession, intends to
procure and construct a complete and operable mining and metallurgical
processing complex, together with supporting infrastructure, to produce nickel
and cobalt (the Nickel Mine).   (D)   Goro Nickel is a purchaser of and wishes
to buy Electricity for the purposes of carrying out the Nickel Mine project, and
Enercal agrees to sell Electricity on the terms set out in this Agreement.

IT IS AGREED as follows:

1.   DEFINITIONS AND INTERPRETATIONS   1.1   Definitions       In this
Agreement:       ACFC has the meaning given to it in schedule 1 (Availability
Charge);       ACOM has the meaning given to it in schedule 1 (Availability
Charge);       AC Present Value has the meaning given to it in schedule 12 (AC
Present Value);       Actual Capacity means, in respect of any Hour, the
Electricity Delivered in that Hour except where the Electricity Delivered in
that Hour is affected by a Goro Nickel Event which causes a reduction in the
Electricity available to Enercal in which case the Actual Capacity for that Hour
will be increased by the amount of such reduction or, if Enercal in good faith
determines that such amount cannot be easily and readily measured or determined,
the Actual Capacity for that Hour will be the Target Net Capacity for that Hour;
      Actual Monthly Availability means, in any Month, the Actual Monthly
Availability calculated in accordance with clause 9.2 (Availability factors);

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    Affiliate means, in relation to a company:

  (a)   any other company (Other Company) which, either directly or indirectly,
controls or is controlled by it; and     (b)   any other company directly or
indirectly controlled by any such Other Company,

    in each case as such control is determined within the purpose of Art.
L.233-3 of the French commercial code;       Agreed Form means, in relation to
any document, the form of that document which has been initialled for the
purposes of identification by or on behalf of Enercal and Goro Nickel;      
Agreed Index means, in each case where such term is used, an index agreed by the
Parties (or, in the absence of agreement, as determined by an Expert) which
index:

  (a)   is published by a reliable independent source;     (b)   is available on
a timely basis;     (c)   is publicly available (or available for a reasonable
fee);     (d)   is based on costs other than those which are primarily a Party’s
own costs;     (e)   accurately approximates the changes in the amount to be
indexed or adjusted using the index; and     (f)   appropriately relates to the
amount to be so indexed or adjusted,

    and which index, for the avoidance of doubt, may be different in each such
case;       Applicable Law means any applicable national, territorial,
municipal, provincial or state statute, ordinance or other law (including in
relation to Tax), regulation, by-law, order or decree, any form of delegated
legislation, any treaty or international convention and any regulation or
resolution of France or New Caledonia or any part thereof or the European Union,
or the United Nations or its Security Council and includes for the avoidance of
doubt, the IC Permit;       Availability Charge means, in any Month, the
Availability Charge calculated in accordance with schedule 1 (Availability
Charge);       Availability Credit means, in any Month, the Availability Credit
calculated in accordance with clause 9.3(b) (Availability Credit);      
Availability Credit Electricity has the meaning given to it in clause 9.3(a)
(Availability Credit);       Availability Penalty has the meaning given to it in
clause 9.1 (Availability Penalty);       Backup Metering System means all
meters, metering equipment, infrastructure and measurement transformers (both
voltage, current or combination units) and any other measuring equipment and
apparatus which may be installed by Goro Nickel at the Nickel Mine for backup
metering of Electricity delivered pursuant to this Agreement;

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    Business Day means a Day (other than a Saturday or Sunday) on which banks
are generally open in Nouméa, New Caledonia for normal business;       Change in
Law means any of the following events occurring after the date of this
Agreement:

  (a)   the repeal, amendment, making or enactment of any Applicable Law having
the force of law including any Applicable Law relating to Tax;     (b)   the
change in the judicial or administrative interpretation of any Applicable Law
having the force of law including any Applicable Law relating to Tax; and    
(c)   Enercal is required to implement any action under the IC Permit which
action is not expected to require implementation as at the date of this
Agreement and which action is not required to be implemented as at the date the
IC Permit is first issued;

    Change Notice has the meaning given to it in clause 14.2(a) (Addition or
amendment to electricity generating unit);       Claimant has the meaning given
to it in Clause 38.2 (Formation of tribunal);       Coal Specification means the
coal specification set out in schedule 5 (Coal Specification);       Competent
Authority means any national, territorial, federal, regional, state, local,
European Union or other court, arbitral tribunal, administrative agency or
commission or other governmental, administrative or regulatory body, authority,
agency or instrumentality;       Concession has the meaning given to it in
recital (B);       Confidential Information has the meaning set out in clause 18
(Confidentiality);       Consequential Loss means any loss of production, loss
of profit, loss of revenue, loss of contract, loss of goodwill, loss of use or
liability under other agreements or indirect or consequential loss resulting
from the performance or non-performance of any obligation hereunder, any act of
negligence, breach of contract or otherwise by either Party and whether or not
such Party knew, or ought to have known, that such losses would be likely to be
suffered as a result of the same;       Construction Services Agreement means
the agreement so named dated 3 June 2004 between Prony and Goro Nickel;      
Contract Limits has the meaning given to it in paragraph 4(c) of the Scheduling
Procedures;       Contract Period means the period commencing on the Start Date
and, subject to clause 3.2 (Extensions to the Contract Period) and clause 17
(Termination), expiring on the twenty-fifth (25th) anniversary of the Start
Date;       Costs has the meaning given to it in clause 37.3(f) (Role of
Expert);       Credit Support Documents means each Inco Guarantee, any
replacement of an Inco Guarantee and any Enercal Credit Support Document;      
Day means a period of twenty-four (24) consecutive Hours starting at 00:00 on
any day and ending at 00:00 on the next day;

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    Deadline means 31 December 2008 or such later date agreed or determined in
accordance with clause 4.2;       Deemed Actual Capacity has the meaning given
to it in clause 9.2(b) (Availability factors);       Defaulting Party has the
meaning set out in clauses 17.1(a),(b) and (c) (Events of Default) (as
applicable);       Definitive Acceptance means the date that each of the
following has occurred:

  (a)   Nickel Mine Completion has been achieved;     (b)   the Nickel Mine has
produced, over a continuous period of 30 days occurring within 15 months after
Nickel Mine Completion, a total of at least 2,600 tonnes of contained nickel in
oxide form and 220 tonnes of contained cobalt (such amounts representing 60% of
the Nickel Mine’s capacity and the amount of 220 tonnes of cobalt being adjusted
to reflect any difference between the grade of cobalt in the ore actually mined
and the grade assumed by Inco in setting such figure in the Project Design
Criteria); and     (c)   Goro Nickel has given notice of (a) and (b) to Enercal;

    Delivery Points means the points of interconnection of the Enercal System to
the 33kV feeders connected to the Nickel Mine within the Switchroom, the precise
details of which are set out in part A of schedule 3 (Delivery Points and
Switchroom);       Disruption Process has the meaning given to it in the
Multipartite Agreement;       Dollar means the lawful currency of the United
States of America;       Early Electricity has the meaning given to it in clause
7(a) (Electricity before the Start Date);       Early Electricity Price means
the Early Electricity Price determined in accordance with schedule 11 (Early
Electricity Price);       Early Termination Date has the meaning set out in
clause 17.2(a) (Termination right), clause 16.2(f) (Consequences of Force
Majeure) and clause 14.4(a) (Change in Law costs) (as the case may be);      
Electricity means electrical energy meeting the Electricity Specification
produced, flowing, or supplied by an electric circuit during a time interval and
being an integral with respect to the time of instantaneous power, exchanged in
units of kWh;       Electricity Delivered means Electricity measured by the
Metering System (expressed in kW) as being delivered to Goro Nickel as an
average load over a one Hour period;       Electricity Specification means the
specification for Electricity set out at schedule 7 (Electricity Specification);
      Emissions Protocol means the agreement so named to be entered into between
Goro Nickel and Prony on terms substantially similar to the Emissions Protocol
letter of intent in the Agreed Form;

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    Enercal Credit Support Document means any standby letter of credit or other
form of credit support document issued in favour of Goro Nickel pursuant to
clause 13.1(b) (Enercal’s additional obligations);       Enercal Schedule has
the meaning given to it in paragraph 1(b) of the Scheduling Procedures;      
Enercal System means the Transmission System, the Switchroom and each
electricity generation facility connected to the Transmission System;       EPC
Contracts means the Engineering, Procurement, Erection and Commissioning
Contract between Prony, Alstom Power Limited and Alstom Power Turbomachines
dated 3 June 2004 and the General Agreement for Civil Works between Prony and
Vinci Construction Grands Projets dated 3 June 2004 in the Agreed Form;      
ESA Coordinating Committee has the meaning given to it in clause 15.1 (ESA
Coordinating Committee);       Escrow Account means any account established,
from time to time, bearing interest at commercial rates at an independent bank
not otherwise used by the Parties in the name of a third party who will release
the proceeds therein to the appropriate Party only upon satisfaction of the
applicable conditions provided in this Agreement and any escrow agreement that
may be agreed upon and executed by the Parties;       Euro means the lawful
currency of the member states of the European Union that have adopted or that
adopt the single currency in accordance with the treaty establishing the
European Community, as amended by the Treaty on European Union;       Event of
Default has the meaning given to it in clause 17.1 (Events of Default);      
Excluded Tax has the meaning given to it in clause 14.3(a) (Tax change in law);
      Excusing Factor means:

  (a)   Force Majeure affecting Enercal;     (b)   a Goro Nickel Event;    
(c)   any act or failure to act of any third party (other than any contractor or
sub-contractor of Goro Nickel);

    Expected Actual Capacity, in respect of any Hour, means the total amount of
Electricity (expressed in kW) which Enercal expects to be made available at the
Delivery Points on a continuous and reliable basis, as declared (or deemed to be
declared) by Enercal to Goro Nickel (excluding, for the avoidance of doubt, any
Extra Electricity expected to be delivered in that Hour);       Expert means an
appropriately qualified independent expert selected by the ESA Coordinating
Committee who is not a current or former director, officeholder or an employee
of, or directly or indirectly retained (either currently or formerly) as a
consultant to, any Party (or any Affiliate of any Party) and who is not a
current or former holder of shares in any Party (or in the Affiliate of any
Party); provided, however, that if the ESA Coordinating Committee is unable to
select an Expert within twenty-one (21) Business Days because of a deadlock
between the representatives, the Expert shall be an appropriately qualified
independent person

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    who is not a current or former director, officeholder or an employee of, or
directly or indirectly retained (either currently or formerly) as a consultant
to, any Party (or any Affiliate of any Party) and who is not a current or former
holder of shares in any Party (or in the Affiliate of any Party) appointed by
the International Centre for Expertise of the International Chamber of Commerce
in accordance with the ICC Rules for Expertise and the Parties shall share the
costs of such procedure equally;       Extension Notice has the meaning given to
it in clause 3.2 (Extensions to the Contract Period);       Extension Period has
the meaning given to it in clause 3.2 (Extensions to the Contract Period);      
Extra Electricity has the meaning given to that term in clause 6 (Extra
Electricity);       Extra Electricity Charge means, in any Month, the amount
calculated in accordance with clause 6(f) (Extra Electricity);       Extra
Electricity Price has the meaning given to it in paragraph 1(c) of the
Scheduling Procedures;       Facility means the pulverised coal fired power
station to be constructed under the EPC Contracts at Prony Bay, New Caledonia
together with the supporting infrastructure and associated facilities;      
Finance Documents means all documents relating to the financing of the Facility;
      Force Majeure means any external event or circumstance that is beyond the
control of the affected Party which it could not reasonably have avoided or
overcome and which makes it impossible to perform any of its obligations under
this Agreement, but excluding:

  (a)   any Insolvency Event affecting either Party or any of their contractors;
    (b)   any failure to perform by either Party’s contractors save to the
extent such failure (i) is caused by an event which would have constituted Force
Majeure under this Agreement had it occurred in relation to such Party and
(ii) also satisfies the requirements for such Party to rely on the same as an
event of Force Majeure for its own performance under this Agreement; and    
(c)   any strikes by a Party’s own workforce save to the extent they are part of
a general strike;

    Force Majeure Notice has the meaning given to it in clause 16.2(a)
(Consequences of Force Majeure);       Force Majeure Plan has the meaning given
to it in clause 16.2(c) (Consequences of Force Majeure);       Fuel Charge
means, in any Month, the Fuel Charge calculated in accordance with schedule 2
(Fuel Charge and Variable Operation and Maintenance Charge);       General
Agreement means the agreement so named dated 14 January 2004 between Inco, Goro
Nickel, Prony and Enercal (as amended);

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    Goro Force Majeure means any external event or circumstance that is beyond
the control of Goro Nickel which it could not reasonably have avoided or
overcome and which makes it impossible for Goro Nickel to perform all or
substantially all of the construction activities of the Nickel Mine, but
excluding:

  (a)   any Insolvency Event affecting Goro Nickel or any of its contractors;  
  (b)   any failure to perform by Goro Nickel’s contractors save to the extent
such failure (i) is caused by an event which would have constituted Goro Force
Majeure had it occurred in relation to Goro Nickel and (ii) also satisfies the
requirements for Goro Nickel to rely on the same as an event of Goro Force
Majeure for its own performance under this Agreement; and     (c)   any strikes
by Goro Nickel’s own workforce save to the extent they are part of a general
strike;

    Goro Nickel Event means:

  (a)   a breach by Goro Nickel of the Utilities and Services Agreement, the
Construction Services Agreement or articles 2, 3, 4 or 7 of the Transfer
Agreement; or     (b)   Goro Nickel being unable to provide utilities or
services (or only being able to provide a reduced level of utilities or
services) under the Utilities and Services Agreement as a result of Force
Majeure as defined thereunder; or     (c)   Goro Nickel providing no or a
reduced level of Key Services under the Utilities and Services Agreement as a
result of a Permitted Outage or a Planned Outage thereunder;

    Goro Nickel Schedule has the meaning given to it in paragraph 1(a) of the
Scheduling Procedures;       Goro Nickel Termination Payment has the meaning
given to it in clause 17.4(c)(i)(B) (Termination Payment);       Hour means a
period of sixty (60) consecutive minutes starting on the hour;       IAS means
International Accounting Standards published by the International Accounting
Standards Board or such other generally accepted accounting principles adopted
by Prony in its audited annual financial accounts;       IC Permit means the
‘autorisation d’exploiter une installation classée’ which is required by Prony
under Applicable Laws to operate the Facility;       Inco means Inco Limited, a
company organised under the laws of Canada and having its registered address at
145 King Street West, Toronto, ON, M5H 4B7;       Inco Guarantee means each
guarantee to be given by Inco on or about (but no later than) the date of this
Agreement in the Agreed Form;       Independent Party has the meaning given to
it in clause 12.4 (Sealing of the Metering System);       Insolvency Event has
the meaning given to it in clause 17.1 (Events of Default);

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    Invoice Notice Date has the meaning given to it in clause 10.7(a) (Failure
to issue invoice);       Key Service has the meaning given to it in the
Utilities and Services Agreement;       kW means kilowatt;       kWh means
kilowatt hours;       Late Payment Rate means a rate of interest per annum equal
to the lesser of:

  (a)   LIBOR plus three per cent. (3%) per annum; or     (b)   the maximum rate
of interest allowed by Applicable Law;

    Lender means any entity which provides or which may provide (directly or
indirectly) financial products or support to Goro Nickel in relation to the
Nickel Mine project;       Level Three Disruption Process has the meaning given
to it in the Multipartite Agreement;       LIBOR means:

  (a)   the British Bankers Association Interest Settlement Rate for the
Relevant Currency displayed on the appropriate page of the Reuters screen; or  
  (b)   (if no screen rate is available for the Relevant Currency) the
arithmetic mean (rounded upwards to four (4) decimal places) of the rates quoted
by the Reference Banks to leading banks in the London interbank market,

    as of 11.00 a.m. London time on the date two (2) London Business Days prior
to the date on which an amount becomes due under this Agreement for the offering
of deposits in the Relevant Currency for a period of three (3) Months;      
London Business Day means a Day (other than a Saturday or Sunday) on which banks
are generally open in London for normal business;       Make-up Amount means the
sum of, for each Hour during the Contract Period that Enercal’s ability to make
available Electricity has been affected by Force Majeure, the difference between
the Deemed Actual Capacity in that Hour and the amount that would have been the
Actual Capacity in that Hour had clause 9.2 (Availability Factors) not applied
plus the sum of, for each Hour during the Contract Period that Goro Nickel’s
ability to take Electricity has been affected by Force Majeure affecting Goro
Nickel only, the difference between the expected Scheduled Net Capacity for that
Hour most recently (determined at that Hour) notified to Enercal in accordance
with the Scheduling Procedures prior to the Force Majeure affecting Goro Nickel
and the Scheduled Net Capacity in that Hour;       Make-up Period means the
number of whole Days (rounded to the nearest Day) calculated as the Make-up
Amount (calculated on the first Day of the Make-up Period) divided by
1,200,000kW;       Material Adverse Change has the meaning given to it in clause
14.2(a) (Addition or amendment to electricity generating unit);       Metering
Specification means the specifications for the Metering System as agreed by the
ESA Coordinating Committee;

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    Metering System means all meters, metering equipment, infrastructure and
measurement transformers (both voltage, current or combination units) and any
other measuring equipment and apparatus owned by Enercal (including the
Transmission Metering System), the precise location and details of which are set
out in part B of schedule 3 (Metering Systems);       Meter Testing Procedures
means those procedures set out at schedule 6 (Meter Testing Procedures);      
Month means a calendar month;       Multipartite Agreement means an agreement so
named granting Goro Nickel specified rights in respect of the operation and
maintenance of the Facility in certain circumstances, the parties to which will
include Goro Nickel, Enercal and Prony;       Nickel Mine has the meaning given
to that term in recital (C);       Nickel Mine Completion means the date prior
to the start-up of the Nickel Mine when:

  (a)   the Nickel Mine has been built in accordance with the Project Design
Criteria and when all of its necessary systems and facilities are ready to
accept feed for start-up operations and are capable of production;     (b)   all
necessary materials and equipment have been installed in accordance with the
plans, drawings and specifications, and checked and tested for alignment,
lubrication, rotation, hydrostatic or pneumatic pressure integrity, and the
process, ancillary and appropriate infrastructure facilities have been flow
tested with water;     (c)   all necessary tests for mechanical integrity and
continuity of electric circuitry, piping and process controls have been
satisfactorily completed;     (d)   all necessary operating units, systems and
subsystems are determined to be complete and capable of operation; and     (e)  
a punch list of incomplete items related to the Nickel Mine and all operating
units, systems or subsystems has been established and agreed upon by Goro
Nickel;

    Non-Defaulting Party means the Party which is not the Defaulting Party;  
    Notice has the meaning given to it in clause 37.2 (Referral to Expert);  
    Other Approval means any permission, permit, approval, consent, licence,
authority or right of way other than a Permit, which is required by Enercal to
enable it to perform its obligations under this Agreement;       Other Company
has the meaning given to it in this clause 1.1;       Outage means any event,
other than Force Majeure, which affects Enercal’s ability to make Electricity
available to Goro Nickel under this Agreement;       Party means one or other of
the parties to this Agreement;       Permit means any permission, licence,
authority, approval or consent of any Competent Authority and, where a Competent
Authority is authorised to prohibit a proposal, the passing of the time limited
for such prohibition without the proposal being prohibited;

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    Planned Outage means an Outage for planned maintenance, testing and or
inspection of any part of the Enercal System as notified to Goro Nickel through
Enercal’s nominations of Expected Actual Capacity given in accordance with the
Scheduling Procedures;       PPA means the term sheet for the Contrat De Vente
Et D’Achat D’Electricité in the Agreed Form between Enercal and Prony dated 12
October 2004, any agreement entered into pursuant to that term sheet and the
Contrat De Vente Et D’Achat D’Electricité in the Agreed Form between Enercal and
Prony dated 3 June 2004 as amended (including any amendment in accordance with
the term sheet referred to in this definition) together pursuant to which
Enercal agrees to purchase from Prony the entire capacity of the Power Station
for a period at least equal to the Contract;       PQM Systems means the power
quality measuring systems, the general details of which are described in
paragraph 7 of the Electricity Specifications and the precise details of which
are agreed by the ESA Coordinating Committee;       Project Agreements means:

  (a)   this Agreement, the General Agreement, the Utilities and Services
Agreement, the Water Supply Agreement, the Multipartite Agreement, the Transfer
Agreement, the PPA, the Emissions Protocol, the Construction Services Agreement,
the EPC Contracts and the Finance Documents; and     (b)   any other material
agreement relating to the Facility to which Enercal or Prony is a party and a
breach of which would be likely to have a material adverse effect on:

  (i)   the ability of Enercal to perform any material obligation under this
Agreement; or     (ii)   the operation, maintenance or ownership of the
Facility;

    Project Design Criteria means Goro Nickel’s written project design criteria
(as amended from time to time);       Prony means Prony Energies S.A.S, a
company incorporated under the laws of France and registered in Nouméa, New
Caledonia with registered number B651927 and a registered office at 29, rue
Jules Ferry, 98800, Nouméa Cedex, New Caledonia;       Public Utilities
Obligations means Enercal’s statutory obligation to supply electricity to the
public of New Caledonia;       Reasonable and Prudent Operator means a person
seeking in good faith to perform its contractual obligations and, in so doing
and in the general conduct of its undertaking, exercising that degree of skill,
diligence, prudence and foresight which would reasonably and ordinarily be
expected from a skilled and experienced entity engaged in the same type of
undertaking under the same or similar circumstances or conditions and with
obligations to provide electricity on a continuous and reliable basis;      
Reduced Capacity means in respect of any Reduced Capacity Hour, 50,000kW minus
the amount of Electricity nominated by Goro Nickel in respect of that Reduced
Capacity Hour in the Goro Nickel Schedule;       Reduced Capacity Hour has the
meaning given to it in paragraph 1(a)(i) of the Scheduling Procedures;

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    Reference Banks means the principal London offices of Banque Nationale de
Paris/Paribas, Calyon, Barclays Bank plc, HSBC Bank plc and JP Morgan Chase or
such other banks or financial institutions as the Parties may agree from time to
time;       Reimbursement Credit has the meaning given to it in clause 17.5
(Reimbursement of Termination Payments);       Reimbursement Credit Electricity
has the meaning given to it in clause 17.5 (Reimbursement of Termination
Payments);       Reimbursement Credit Amount means ACFC/36,500,000;      
Relevant Change in Law has the meaning given to it in clause 14.1(a) (Illegality
or unenforceability);       Relevant Currency means the currency of the
applicable unpaid amount;       Request for Arbitration has the meaning given to
it in clause 38.2 (Formation of tribunal);       Required Authorisations has the
meaning given to it in clause 19(d) (General);       Required Works has the
meaning given to it in clause 14.2(a) (Addition or amendment to electricity
generating unit);       Required Works Cost has the meaning given to it in
clause 14.2(g) (Addition or amendment to electricity generating unit);      
Respondent has the meaning given to it in clause 38.2 (Formation of tribunal);  
    Rules has the meaning given to it in clause 38.1 (Dispute);       Scheduled
Net Capacity means, in respect of any Hour, the total amount of Electricity
(expressed in kW and not to exceed the Target Net Capacity for that Hour) which
Goro Nickel requires to be made available at the Delivery Points on a continuous
and reliable basis;       Scheduling Procedures means the procedures for
scheduling delivery of Electricity under this Agreement as set out in schedule 8
(Scheduling Procedures);       Start Date means the time at which the second
Electricity generating unit of the Facility is completed, commissioned and fully
operational, as determined by Enercal acting as a Reasonable and Prudent
Operator and notified in writing to Goro Nickel pursuant to clause 4 (Funnel
Mechanism);       Start Date LD Amount has the meaning given to it in part B of
schedule 9 (Penalties);       Successful has the meaning given to it in the
Multipartite Agreement;       Surrendered Electricity means, in respect of any
Hour, Electricity to which Goro Nickel is entitled under this Agreement, which
is within the Contract Limits and which Goro Nickel has agreed to surrender to
Enercal in consideration for the amount agreed for such Electricity in
accordance with the Scheduling Procedures in that Hour;       Switchroom means
the switchroom owned by Prony, the precise location and details of which are set
out and circled at grid reference 12:C in Part A of schedule 3 (Delivery Points
and Switchroom);

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    Target Monthly Availability means, in any Month, the Target Monthly
Availability calculated in accordance with clause 9.2(c) (Availability factors);
      Target Net Capacity for each Hour means 50,000kW minus:

  (a)   if that Hour is a Reduced Capacity Hour set by Goro Nickel in accordance
with paragraph 1(c) of the Scheduling Procedures, the Reduced Capacity in
respect of that Reduced Capacity Hour;     (b)   any amount of Surrendered
Electricity which the Parties have agreed in respect of that Hour in accordance
with the Scheduling Procedures; and     (c)   the amount by which Electricity
generation to be made available to Goro Nickel must be reduced in that Hour by
virtue of the Emissions Protocol;

    Target Start Date means 9th January, 2008 as the same may be extended by any
Excusing Factor (the duration of any such extension being as agreed between the
Parties or, in the absence of agreement, as determined in accordance with clause
37 (Expert Determination));       Tax means any tax, levy, impost, duty, royalty
or other charge or withholding of a similar nature (including any penalty or
interest payable in connection with any failure to pay or any delay in paying
any of the same) including income tax and corporation tax;       Tax Change in
Law means any of the following events occurring after the date of this
Agreement:

  (a)   the repeal, amendment, making or enactment of any Applicable Law having
the force of law relating to Tax (excluding, for the purposes of this
definition, any penalty or interest payable in connection with any failure to
pay or any delay in paying any of the same); and     (b)   the change in the
judicial or administrative interpretation of any Applicable Law having the force
of law relating to Tax (excluding, for the purposes of this definition, any
penalty or interest payable in connection with any failure to pay or any delay
in paying any of the same);

    Technical Dispute has the meaning given to it in clause 37.2 (Referral to
Expert);       Termination Payment has the meaning given to it in clause 17.4(a)
(Termination Payment), clause 16.2(f) (Consequences of Force Majeure) and clause
14.4(b) (Change in Law costs) (as the case may be);       Termination Payment
Date has the meaning given to in clause 17.4(e) (Termination Payment), clause
14.4(e) (Change in Law costs) and 16.2(i) (Consequences of Force Majeure) (as
the case may be);       Transfer Agreement means the agreement so named dated 3
June 2004 between Prony, Inco and Goro Nickel;       Transmission Metering
System means all meters, metering equipment, infrastructure and measurement
transformers (both voltage, current or combination units) and any other
measuring equipment and apparatus owned by Enercal and installed at or near the
point at which electricity is delivered from the Facility to the Transmission
System (the precise location and details of which are set out in part B of
schedule 3 (Metering Systems));

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    Transmission System means the high voltage national grid system owned and
operated by Enercal for the transmission of electricity in New Caledonia;      
TSS means ‘taxe sur les services‘;       Unavailable means, in relation to an
insurance policy required to be effected and maintained under this Agreement,
either that:

  (a)   such insurance policy is not available in the worldwide insurance market
with reputable insurers of good standing; or     (b)   the insurance premium
payable for such insurance policy is at such a level that the risk covered by
such insurance policy is not generally being insured against in the worldwide
insurance market with reputable insurers of good standing;

    Unsuccessful has the meaning given to it in the Multipartite Agreement;  
    Unused Capacity Price has the meaning given to it in paragraph 1(c) of the
Scheduling Procedures;       Utilities and Services Agreement means the
agreement so named dated 28 October 2004 between Goro Nickel and Prony;      
Variable Operation and Maintenance Charge means, in any Month, the Variable
Operation and Maintenance Charge calculated in accordance with schedule 2 (Fuel
Charge and Variable Operation and Maintenance Charge);       Water Supply
Agreement means an agreement to be entered into for the supply of water from the
Yate reservoir in New Caledonia to the Nickel Mine, the parties to which will
include Enercal and Goro Nickel; and       Week means each week commencing on
00:00 on Monday and ending on 24:00 on the following Sunday.   1.2  
Interpretation       In this Agreement:

  (a)   any reference, express or implied, to an enactment includes references
to:

  (i)   that enactment as amended, extended or applied by or under any other
enactment before or after the date of this Agreement;     (ii)   any enactment
which that enactment re-enacts (with or without modification); and     (iii)  
any subordinate legislation made (before or after the date of this Agreement)
under any enactment, including one within clause 1.2(a)(i) or (ii) above;

  (b)   any reference to a clause or schedule, is a reference to a clause or
schedule of this Agreement and any reference to a paragraph is to a paragraph of
the schedule in which the term is used or to the schedule noted where the term
is used;     (c)   words in the singular may be interpreted as including the
plural, and vice versa;

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  (d)   any reference to the words include or including shall be construed
without limitation;     (e)   unless otherwise specified, any reference to time
shall be a reference to time in Nouméa, New Caledonia;     (f)   any reference
to a year shall be a reference to a calendar year;     (g)   unless a contrary
indication appears, any reference in this Agreement to:

  (i)   any Party shall be construed so as to include its successors in title,
permitted assigns and permitted transferees;     (ii)   this Agreement or any
other agreement or instrument is a reference to this Agreement (including each
schedule to this Agreement) or other agreement or instrument as amended,
supplemented or novated from time to time in accordance with, and subject to,
any requirements of this Agreement;     (iii)   a person includes any
individual, firm, company, corporation, unincorporated organisation, government,
state or agency of a state or any association, trust or partnership (whether or
not having separate legal personality) or any other entity;     (iv)   a
regulation includes any regulation, rule, official directive, request or
guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation;     (v)   words of any
gender include each other gender;     (vi)   the term hereof and similar words
refer to this entire Agreement and not to any particular clause or schedule or
any other subdivision of this Agreement; and     (vii)   any capitalised words,
terms, phrases and abbreviations used specifically in any schedule shall have
the meanings set forth in such schedule, as the case may be; and

  (h)   clause and schedule headings are for ease of reference only.

2.   [NOT USED]   3.   DURATION AND TERM   3.1   Duration and term       This
Agreement shall come into force on the date of this Agreement and, subject to
clause 3.3 (Survival of rights), shall automatically expire at the end of the
Contract Period (unless terminated earlier in accordance with its terms).

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3.2   Extensions to the Contract Period

  (a)   Goro Nickel may:

  (i)   at least (2) two years before the twenty-fifth (25th) anniversary of the
Start Date; and     (ii)   at least (1) one year before the expiration of any
Extension Period,

      serve a notice upon Enercal to extend the Contract Period by a further
five (5) years (such period of extension being referred to as an Extension
Period) (Extension Notice). Following service of an Extension Notice, the
Contract Period shall be automatically extended until the end of the Extension
Period referred to in that Extension Notice. Goro Nickel may issue a maximum of
(5) five Extension Notices.     (b)   Unless Goro Nickel notifies Enercal
otherwise, the Contract Period will automatically be extended by one Make-up
Period which extension will follow on immediately from:

  (i)   the expiry of the final Extension Period; or     (ii)   if Goro Nickel
does not issue any Extension Notice, the twenty-fifth (25th) anniversary of the
Start Date.

  (c)   Notwithstanding any other provision of this Agreement, during any
Make-up Period no Availability Charge will be payable to Enercal however during
any Month of a Make-up Period, to the extent that Goro Nickel has not already
paid ACOM in respect of the period giving rise to the Make-up Period, Goro
Nickel shall pay Enercal ACOM for that Month.

3.3   Survival of rights

  (a)   Except as otherwise expressly provided in this Agreement, termination of
this Agreement shall not affect any rights or obligations of either of the
Parties which may have accrued prior to such termination and shall not affect
continuing obligations of either of the Parties under this Agreement.     (b)  
Save as otherwise provided in clause 16.2(e) (Consequences of Force Majeure),
clause 4.2(b) (Start Date notices), this clause 3.3, clause 37, clause 38 and
any other clause expressed to survive termination shall survive termination of
this Agreement.

4.   FUNNEL MECHANISM   4.1   Anticipated Start Date

  (a)   The Parties acknowledge that the Start Date is anticipated to occur on 9
January 2008 and can not occur before 9 January 2008 (or such other date as may
be agreed by the Parties).     (b)   In the event that the Start Date does not
occur by the Target Start Date, Enercal must pay Goro Nickel the Start Date LD
Amount each Day as liquidated damages from the Target Start Date to the Start
Date. The total sum of the Start Date LD Amounts payable by Enercal pursuant to
the proviso to the definition of “Amount” in Part B of Schedule 9 (Penalties –
Start Date LD Amount) will not exceed €1,456,289 and the

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      total sum of all other Start Date LD Amounts payable by Enercal will not
exceed €4,959,000.     (c)   Enercal shall pay any Start Date LD Amount which
becomes due to Goro Nickel under this clause 4 in respect of any Month within
thirty (30) Days of the start of the following Month.

4.2   Start Date notices

  (a)   Enercal must give Goro Nickel non-binding estimates of the anticipated
Start Date as follows:

  (i)   not less than three (3) Months in advance of the beginning of the Month
in which Enercal expects the Start Date will occur;     (ii)   not less than
four (4) Weeks in advance of the beginning of the Week in which Enercal expects
the Start Date will occur; and     (iii)   not less than forty-eight (48) Hours
in advance of the beginning of the Day on which Enercal expects the Start Date
will occur.

  (b)   If:

  (i)   the Start Date has not occurred by the Deadline; or     (ii)   in any
complete Month in the period from the date falling 5 months after the Target
Start Date to the Deadline, Enercal supplies less than seventy-five per cent.
(75%) of the Target Monthly Availability (except to the extent Enercal’s
inability to supply such proportion of the Target Monthly Availability is as a
direct result of a Goro Nickel Event),

      then Goro Nickel shall be entitled at any time thereafter to terminate
this Agreement upon written notice to Enercal, provided that the Start Date has
still not occurred by the date on which such notice is given by Goro Nickel to
Enercal. Upon such termination, neither Party will have any rights or
liabilities under this Agreement except that Enercal shall be required to
indemnify Goro Nickel for all losses, damages and reasonable and demonstrable
costs suffered by Goro Nickel as a result of the early termination of this
Agreement (such amount not to exceed the Relevant Cap). The Relevant Cap is
20,000,000 Dollars if paragraph (i) or (ii) above (as the case may be) occurs as
a result of Enercal’s wilful disregard of Goro Nickel’s need to have Electricity
and 10,000,000 Dollars in any other case.     (c)   If as a direct result of a
Goro Nickel Event, the effects of which Enercal could not have avoided or
overcome and which makes it impossible for Enercal to give notice of the Start
Date by the Deadline, Enercal will give notice to Goro Nickel setting out the
following:

  (i)   the details of the relevant Goro Nickel Event;     (ii)   the effect
that such Goro Nickel Event will have on Enercal’s ability to achieve the Start
Date by the Deadline and the date to which Enercal would propose that the
Deadline be extended; and

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  (iii)   the attempts that Enercal has made to avoid or overcome the effects of
the Goro Nickel Event.

  (d)   Following receipt of any notice in accordance with clause 4.2(c), Goro
Nickel will meet with Enercal with a view to resetting the Deadline, if
required, to take into account the effects that the Goro Nickel Event has had on
Enercal’s ability to give notice of the Start Date by the Deadline.     (e)   If
the Parties agree that it is required to extend the Deadline in the meeting held
in accordance with clause 4.2(d) and agree to an extended Deadline, the Deadline
will be extended to the date so agreed.     (f)   If the Parties are unable to
agree that the Deadline is required to be extended or, if required, the date to
which the Deadline should be so extended in accordance with clause 4.2(e), the
issue will be submitted to an Expert for determination. The appointed Expert
will be required to set the Deadline taking into account the effects that the
Goro Nickel Event has had on Enercal’s ability to give notice of the Start Date
by the Deadline, the attempts that Enercal has taken to overcome or mitigate
such effects and the submissions of the Parties.     (g)   The Parties agree
that any decision of the Expert in accordance with this clause 4.2 shall be (in
the absence of manifest error) final and binding on the Parties and not subject
to appeal.     (h)   For the purposes of this clause 4.2 and for the avoidance
of doubt, “direct result” will include any impact on Prony as a direct result of
the Goro Nickel Event which affects Enercal’s ability to supply Electricity.    
(i)   On, or as soon as reasonably practicable after, any termination of this
agreement pursuant to clause 4.2(b), Goro Nickel shall in good faith calculate
any payment owing to it by Enercal pursuant to clause 4.2(b) and shall notify
Enercal of the amount of such payment (including detailed support for the
amount).     (j)   Enercal shall pay the amount calculated pursuant to clause
4.2(i) to Goro Nickel within ten (10) Business Days of invoice or notification
of such amount, which amount shall bear interest in accordance with clause 10.6
(Late payments).     (k)   Goro Nickel may, at its option, set off any amount
payable in accordance with clause 4.2(j) against any or all other amounts owing
(whether or not matured, contingent or invoiced) between the Parties under this
Agreement. The right of set off shall be without prejudice and in addition to
any right of set off, combination of accounts, lien, charge or other right to
which any Party is at any time otherwise entitled (whether by operation of law,
by contract or otherwise). If an amount is unascertained, Goro Nickel may
reasonably estimate the amount to be set off. The Parties shall make any
adjustment payment required within three (3) Business Days of the amount
becoming ascertained.     (l)   Disputed amounts under this clause 4.2 shall be
paid by Enercal subject to refund with interest calculated in accordance with
clause 10.6 (Late payments) if the dispute is resolved in favour of Enercal.

4.3   Start Date LD information       Enercal will promptly notify Goro Nickel:

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  (a)   if it believes that the Start Date will not occur by the Target Start
Date, giving reasons for its belief; and     (b)   of the extent to which it is
liable to pay Start Date LD Amounts solely due to delays in completion of the
civil works relating to the second generating unit of the Facility.

5.   SALE AND PURCHASE OF CAPACITY AND ELECTRICITY   5.1   Availability and
delivery obligation       Subject to and in accordance with the terms of this
Agreement, during the Contract Period, Enercal shall in each Hour:

  (a)   make available to Goro Nickel, the Target Net Capacity for that Hour;
and     (b)   deliver to Goro Nickel the Electricity associated with the
Scheduled Net Capacity for that Hour.

5.2   Delivery   (a)   The Electricity to be supplied by Enercal to Goro Nickel
under this Agreement shall be delivered at the Delivery Points.   (b)   Title
and risk of loss with respect to all Electricity shall pass to Goro Nickel at
the Delivery Points upon delivery by Enercal of such Electricity to the Delivery
Points.   5.3   Obligations under Scheduling Procedures and Electricity
Specification       The Parties must comply with their respective obligations
contained in the Scheduling Procedures and any obligations contained in the
Electricity Specification.   6.   EXTRA ELECTRICITY   (a)   Subject to clauses
6(b) to 6(d), Goro Nickel shall be entitled to request at any time during the
Contract Period delivery of Electricity (Extra Electricity) in excess of the
Target Net Capacity in any Hour or the Contract Limit in paragraph 4(b) of the
Scheduling Procedures in any year.   (b)   Where Goro Nickel requests Extra
Electricity, such request must be in accordance with the Scheduling Procedures,
in writing and must specify the amount of Extra Electricity required and the
period in which such Extra Electricity is required to be delivered.   (c)  
Enercal must use all reasonable endeavours to satisfy any request for Extra
Electricity made by Goro Nickel in accordance with clause 6(b).   (d)   Where
Goro Nickel has not previously requested Extra Electricity in any Hour in
accordance with the Scheduling Procedures and Goro Nickel requires Extra
Electricity in that Hour, then Enercal will provide that Extra Electricity to
Goro Nickel if such Extra Electricity is available.   (e)   Extra Electricity
must be made available at the Delivery Points.   (f)   The Extra Electricity
Charge in any Month m, ECm, will be calculated as follows:

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    ECm = The sum of, for each Extra Electricity generation source used to
deliver Extra Electricity in that Month, the Extra Electricity Price in Month m
for that Extra Electricity generation source x the number of kWh of Extra
Electricity delivered by Enercal from that Extra Electricity generation source
to the Delivery Points in Month m.   7.   ELECTRICITY BEFORE THE START DATE  
(a)   If Goro Nickel requests Electricity in any Hour prior to the Start Date
(Early Electricity), Enercal agrees to:

  (i)   make available in that Hour up to 20,000kW of the Electricity purchased
by Enercal under the PPA; and     (ii)   give Goro Nickel priority to any
further Electricity purchased by Enercal under the PPA so long as Enercal can
meet its Public Utilities Obligations after using all available generation
sources on the Enercal System to satisfy such Public Utilities Obligations.

(b)   If Goro Nickel requests Early Electricity in any Hour and Enercal is
unable to satisfy that request for Early Electricity in part or in full in
accordance with clause 7(a), Enercal will endeavour to make available
Electricity from other generation sources to satisfy such request of Goro Nickel
if possible.   (c)   If the Start Date has not occurred by 1 July 2008, then
from 1 July 2008 until the Start Date, Enercal must in each Hour, make available
the Scheduled Net Capacity for that Hour. Enercal must use all best endeavours
to ensure that it is able to fulfil its obligation under this clause 7(c)
including by obtaining Electricity from the Transmission System or by obtaining
supplemental Electricity generation equipment. The price for any Early
Electricity delivered from 1 July 2008 until the Start Date will be the lower of
the Early Electricity Price and the price had such Electricity been delivered
after the Start Date under this Agreement.   (d)   Within thirty (30) Days after
receipt of an invoice for Early Electricity delivered in any Month, Goro Nickel
must pay the Early Electricity Price for all Electricity Delivered to Goro
Nickel in any Month before the Start Date.   8.   PAYMENTS       Goro Nickel
shall, in respect of each Month, from the Start Date until the end of the
Contract Period (and in accordance with the terms of this Agreement) pay to
Enercal:

  (a)   the Availability Charge for that Month;     (b)   the Fuel Charge for
that Month;     (c)   the Variable Operation and Maintenance Charge for that
Month; and     (d)   any Extra Electricity Charge for that Month.

9.   ADJUSTMENTS   9.1   Availability Penalty

  (a)   At the end of each Month of the Contract Period, Enercal shall calculate
the Actual Monthly Availability for that Month. If in any such Month the Actual
Monthly

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      Availability is less than the Target Monthly Availability, Enercal shall
pay to Goro Nickel an amount (Availability Penalty) calculated in accordance
with part A of schedule 9 (Penalties — Availability Penalty).     (b)   Any
Availability Penalty payable pursuant to this clause 9.1 in any Month during the
Contract Period must be included in an invoice issued in respect of that Month
under clause 10 (Billing and Payment) and must be paid by Enercal within thirty
(30) Days of the date of that invoice.

9.2   Availability factors   (a)   Subject to clause 9.2(b), the Actual Monthly
Availability for any Month shall be equal to the sum of the Actual Capacity for
each Hour in that Month. For the avoidance of doubt it is acknowledged that the
Actual Monthly Availability for any Month will be reduced if electricity made
available to Goro Nickel by Enercal in any Hour in respect of that Month does
not comply with the Electricity Specification and to the extent that Enercal is
unable to make available the quantity of Electricity which it is required to
make available to Goro Nickel in accordance with this Agreement in any Hour
during that Month.   (b)   Where in any Hour of any Month during the Contract
Period, Enercal’s ability to make available Electricity is affected by Force
Majeure (as specified in the Force Majeure Notice given in respect of the Force
Majeure), the Actual Capacity for that Hour will be determined as if the
Electricity Delivered in that Hour was not affected by the Force Majeure
detailed in the Force Majeure Notice (Deemed Actual Capacity).   (c)   The
Target Monthly Availability for any Month shall be equal to the sum of the
Scheduled Net Capacity for each Hour in that Month.   9.3   Availability Credit
  (a)   If, in respect of any Hour during the Contract Period the Transmission
Metering System records that electricity in excess of (50,000kW + Surrendered
Electricity in that Hour) was delivered to the Transmission System in that Hour
then Goro Nickel shall be entitled to an Availability Credit in respect of any
such excess electricity so recorded in any year in excess of the first
39,420,000kWh (Availability Credit Electricity). For the avoidance of doubt, if
the Contract Period spans any partial year, the amount of 39,420,000 kWh set out
in this clause 9.3(a) will be reduced proportionally in respect of that year and
this same amount shall be increased to 39,528,000kWh in any leap year.   (b)  
The Availability Credit in any Month m, AVCRm, will be calculated as follows:  
    AVCRm = The Unused Capacity Price in Month m x the amount of Availability
Credit Electricity (measured in units of kWh) recorded by the Transmission
Metering System in Month m.   (c)   Any entitlement to an Availability Credit
pursuant to this clause 9.3 in any Month will be deducted from the Availability
Charge for that Month and included in the invoice issued in respect of that
Month under clause 10 (Billing and Payment).

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10.   BILLING AND PAYMENT   10.1   Metering System       The Metering System
shall be used to determine the amount of Electricity Delivered in each Hour
during each Month. In the event that the Metering System is not in service as a
result of maintenance repairs or testing, then, if Goro Nickel has installed a
Backup Metering System, such system shall be used to determine the amount of
Electricity Delivered in each Hour during each Month.   10.2   Invoices   (a)  
No later than the tenth (10th) Business Day of each Month, Enercal shall submit
an original invoice or invoices to Goro Nickel showing, in respect of the
immediately preceding Month:

  (i)   the Availability Charge, the Fuel Charge, the Variable Operation and
Maintenance Charge, any Extra Electricity Charge, any Availability Credit and
the amount of any Availability Penalty as separate figures; and     (ii)   any
other amounts payable by Enercal or Goro Nickel pursuant to this Agreement.

(b)   Enercal shall also provide, with appropriate supporting documentation,
full details of the calculation of all amounts to be included in an invoice
submitted in accordance with clause 10.2(a).   (c)   Invoiced amounts shall be
due and payable within thirty (30) Days following receipt of the invoice.  
(d)   Invoices shall be denominated, as to all amounts, other than the Fuel
Charge, in Euro, and as to the components of the Fuel Charge, in Dollars and in
Euro (as the case may be).   10.3   Payment       All payments pursuant to this
Agreement shall be made by wire transfer to one or more New Caledonian bank
accounts designated by the Party to receive such payment. All payments shall be
made in full, without deduction or withholding on account of any other amount,
whether by way of set-off or otherwise, except as expressly provided in this
Agreement. Payments shall be considered made when the full amount due is
credited to the account of the recipient.   10.4   Payment of disputed amounts  
(a)   If a Party that receives an invoice from the other Party in good faith
disputes any amount provided on the invoice delivered by the other Party, the
invoiced Party shall pay the other Party the undisputed invoiced amounts on the
date due. The invoiced Party may withhold any disputed amounts, provided the
invoiced Party shall have notified the other Party in writing of such dispute
and the reasons therefore no later than thirty (30) Days after the invoiced
Party received such invoice. Any dispute pursuant to this clause 10.4(a) shall
be resolved in accordance with clause 10.4(b).   (b)   Upon receipt of any
notice of dispute pursuant to clause 10.4(a), the Parties shall immediately
submit such dispute to the ESA Coordinating Committee. If, after thirty (30)
Business Days, the ESA Coordinating Committee is unable to resolve the dispute
to the mutual satisfaction of each Party, the Parties shall immediately submit
the dispute to an Expert with experience in

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    resolving such disputes or disputes of a similar nature. The Expert shall be
required to resolve the dispute within ten (10) Business Days.   (c)   The
amount, if any, determined by the Expert to be due under the disputed invoice
shall become due and payable ten (10) Business Days after such determination,
without prejudice to each Party’s right to arbitration pursuant to clause 38
(Arbitration). If, after ten (10) Business Days, the Expert is unable to resolve
the dispute to the mutual satisfaction of the Parties, the disputed amount shall
be paid into an Escrow Account within ten (10) Days after the Expert’s decision
was required pursuant to clause 10.4(b) and the dispute shall be resolved in
accordance with clause 38 (Arbitration). Upon resolution of such dispute, the
funds placed into the Escrow Account (together with any interest accrued
thereon) shall be disbursed in accordance with the determined resolution of the
dispute and any balance remaining shall be paid to the Party which placed the
funds in the Escrow Account.   10.5   Set-off       Goro Nickel shall be
entitled to set-off amounts owed by Enercal under this Agreement against amounts
owed by Goro Nickel under this Agreement provided, however, that no set-off
shall be made unless the amount to be set-off is liquidated and is due or
acknowledged in an invoice issued by Enercal, a written acknowledgement by
Enercal, a final determination of an Expert appointed under this Agreement, or
an arbitral award made in accordance with this Agreement. Goro Nickel shall also
be entitled to set off judicial awards, if any, made by the courts of France
provided, however, that nothing herein shall be construed in derogation of
clause 38 (Arbitration). The rights and obligations of the Parties under this
clause 10.5 shall survive termination of this Agreement.   10.6   Late payments
      Any default in payment by either Party beyond any date for payment
established under this Agreement shall accrue interest (without duplication) on
the unpaid amount at the Late Payment Rate from the date upon which payment was
due until the date payment is made in full by or on behalf of the relevant
Party. The rights and obligations of the Parties under this clause 10.6 shall
survive termination of this Agreement.   10.7   Failure to issue invoice   (a)  
If Enercal fails to issue an invoice in accordance with clause 10.2 (Invoices),
then Goro Nickel may serve a notice on Enercal requiring Enercal to issue the
invoice within five (5) Business Days from and including the date of receipt of
such notice by Enercal (such fifth (5th) Business Day being the Invoice Notice
Date). Where Enercal fails to issue the invoice by the Invoice Notice Date,
Enercal appoints Goro Nickel as its attorney to issue the invoice and, once
issued, that invoice shall be treated as an invoice issued by Enercal for the
purposes of this Agreement.   (b)   Failure by Enercal to issue an invoice
within the time period specified in clause 10.2(a) (Invoices) shall not affect
the rights and obligations of the Parties under this Agreement and shall not be
a material breach of this Agreement under clause 17.1(a)(iii) (Events of
Default).   11.   TSS AND OTHER TAXES   11.1   TSS       All amounts referred to
in this Agreement are exclusive of any applicable TSS.

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11.2   Other Taxes       Subject to each Party’s obligations relating to TSS,
each Party shall cause all royalties, taxes, duties and other sums (including
any stamp duty, other documentary taxes, climate change levy or other
environmental tax or levy) legally payable by that Party arising in connection
with this Agreement to be paid.   12.   METERING   12.1   Metering and PQM
Systems   (a)   Enercal shall pay for and install the Metering System which will
be comprised of several components that shall each be in accordance with the
Metering Specification and accurate (including each voltage or current
transformer which forms part of the Metering System) at all times to within plus
or minus one-fifth of one per cent. (±0.2%). Enercal shall also pay for,
install, own, operate and maintain the PQM Systems (other than the power quality
metering equipment installed on the 33kV connection from the Facility to the
Nickel Mine which equipment shall be installed, owned and operated by Goro
Nickel at its expense). Goro Nickel may, but is not obliged to, install a Backup
Metering System. Enercal shall own and maintain the Metering System and Goro
Nickel shall own and maintain any Backup Metering System.   (b)   The Metering
System shall be installed and located in such a manner as to provide both
Enercal and Goro Nickel free and unfettered access. The PQM Systems shall be
located in strategic locations and shall be used to monitor the quality of
Electricity. The PQM Systems shall be used to monitor compliance with the
Electricity Specification and Enercal must ensure that those of the PQM Systems
owned by Enercal must be capable of isolating the Nickel Mine from the Enercal
System during periods when the Electricity quality does not meet the Electricity
Specification. The use of the PQM Systems will be determined by the ESA
Coordinating Committee.   12.2   Testing of Metering System   (a)   The Metering
System shall be tested and calibrated in accordance with the Meter Testing
Procedures.   (b)   Enercal shall test the Metering System for accuracy at
intervals determined by the ESA Coordinating Committee. The direct costs of such
tests shall be borne in equal portions by the Parties.   (c)   In addition, Goro
Nickel may require, upon five (5) Business Days prior written notice to Enercal
that Enercal test the Metering System or any part of the Metering System. The
costs of any such additional test shall be borne in equal portions by the
Parties, unless such test indicates that each component of the Metering System
required to be accurate to within plus or minus one-fifth of one per cent.
(±0.2%) under this Agreement is accurate to within plus or minus one-fifth of
one per cent. (±0.2%), in which case Goro Nickel shall bear the cost of such
test.   12.3   Inaccuracies in Metering System       When, as the result of a
Metering System test conducted pursuant to clause 12.2 (Testing of Metering
System), any component of the Metering System required to be accurate to within
plus or minus one-fifth of one per cent. (±0.2%) under this Agreement is
determined to be inaccurate by more than plus or minus one-fifth of one per
cent. (±0.2%) or is otherwise

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    functioning improperly, then the correct amount of Electricity Delivered in
any Hour to Goro Nickel or the electricity delivered to the Transmission System
for the actual period during which inaccurate measurements were made, if any,
shall be determined as follows:

  (a)   first, in respect of Electricity Delivered to Goro Nickel only, if a
Backup Metering System has been installed, the readings of the Backup Metering
System shall be utilised to calculate the correct amount of Electricity
Delivered in any such Hour, unless a test of the Backup Metering System, reveals
that the Backup Metering System is inaccurate by more than one-fifth of one per
cent. (0.2%) or is otherwise functioning improperly;     (b)   in respect of
Electricity Delivered to Goro Nickel when no Backup Metering System has been
installed or the Backup Metering System is found to be inaccurate by more than
one-fifth of one per cent. (0.2%) or is otherwise functioning improperly and in
respect of electricity delivered to the Transmission System, the Parties shall
jointly prepare an estimate of the correct reading on the basis of all available
information and such guidelines as may have been agreed to by the ESA
Coordinating Committee; and     (c)   if the period of inaccuracy cannot be
accurately determined, or if the Parties cannot agree on an estimate of the
correct reading, the Metering System inaccuracy shall be deemed to have
commenced on the date which is midway between the date the Metering System was
found to be inaccurate and the date of the last Metering System reading accepted
by the Parties as accurate. In no event, however, shall any such adjustment be
made for any period prior to the date on which any component of the Metering
System required to be accurate to within plus or minus one-fifth of one per
cent. (±0.2%) under this Agreement was last tested and found to be accurate
within plus or minus one-fifth of one per cent. (±0.2%) and not otherwise
functioning improperly,

    and any previous payments made by Goro Nickel or Enercal during the period
of inaccuracy shall be adjusted based on the adjustments to the Metering System
readings provided for in this clause 12.3 and the amount so determined shall be
offset against or added to the relevant amount payable under the next invoice
delivered by Enercal under this Agreement as appropriate.   12.4   Sealing of
Metering System   (a)   The Metering System and any Backup Metering System shall
be jointly and doubly sealed. Seals on the Metering System and any Backup
Metering System shall be broken by Enercal personnel or Goro Nickel personnel,
but only in the presence of one another, or if required by the ESA Coordinating
Committee, only in the presence of an independent party, unrelated, directly or
indirectly to either Party and mutually agreeable to the Parties (Independent
Party) and only when the Metering System or any Backup Metering System is to be
inspected, tested or adjusted in accordance with the terms of this Agreement.  
(b)   Either Enercal or Goro Nickel, as the case may be, shall be given at least
forty-eight (48) hours advance notice of the breaking of seals on the Metering
System or any Backup Metering System. Such notice will specify the date and time
at which a Metering System seal is to be broken. In the event that either Party
and/or the Independent Party (if determined by the ESA Coordinating Committee)
is not present at the time specified in such notice, the Party present may break
both seals on whichever of the Metering System or the Backup Metering System
that it owns, and such Party may inspect, test and calibrate the same, in which
case the metering of Electricity Delivered in any Hour shall be determined from
that Party’s

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    Metering System or Backup Metering System (as the case may be) until the
other Party schedules a reinspection of the Metering System and any Backup
Metering System (as applicable).   (c)   If the ESA Coordinating Committee has
decided that it is appropriate to appoint an Independent Party to be present
when the Metering System or any Backup Metering System is to be inspected,
tested or adjusted in accordance with the terms of this Agreement, then Enercal
and Goro Nickel (as the case may be) shall each provide access for the
Independent Party to its Metering System or Backup Metering System (as the case
may be) at all reasonable times for the purpose of carrying out any such
inspection, test or adjustment provided that such access shall not interfere
with the normal business operations of Enercal or Goro Nickel.   12.5   Repair,
replacement or recalibration of Metering System       When any component of the
Metering System required to be accurate to within plus or minus one-fifth of one
per cent. (±0.2%) under this Agreement, is found to be inaccurate by more than
plus or minus one-fifth of one per cent. (±0.2%) or otherwise not functioning
properly, Enercal shall immediately repair, recalibrate or replace such
component of the Metering System or the Metering System as a whole, as the case
may be, at its expense (except as otherwise provided herein). Upon the
completion of any examination, maintenance, repair or recalibration of, or
replacement of any component in, the Metering System such metering system shall
be sealed in the presence of representatives of the Parties and/or the
Independent Party (as decided by the ESA Coordinating Committee).   13.  
ADDITIONAL RIGHTS AND OBLIGATIONS OF THE PARTIES   13.1   Enercal’s additional
obligations   (a)   Enercal must procure that, unless required by any Applicable
Law, the Enercal System is not altered in any manner which would adversely
affect the ability of Enercal to perform its obligations under this Agreement.  
(b)   If Competent Authorities of France at any time cease to control
(indirectly through any majority owned Affiliate or Competent Authority or
directly), or to own more than fifty per cent. (50%) of the voting share capital
of, Enercal, Enercal shall notify Goro Nickel of such occurrence and shall:

  (i)   within thirty (30) Days of such occurrence, procure that a bank
acceptable to Goro Nickel provides Goro Nickel with an irrevocable on-demand
standby letter of credit or an entity acceptable to Goro Nickel provides some
other form of credit support (in either case in a form and substance
satisfactory to Goro Nickel) in respect of its liabilities under this Agreement
in an amount equal to 10,000,000 Euros; and     (ii)   thereafter ensure that
Goro Nickel has the benefit of such credit support document or letter of credit
from such entity or bank at all times during the Contract Period.

13.2   Reasonable and Prudent Operator       Enercal must act at all times as a
Reasonable and Prudent Operator with a view to ensuring that Electricity is
available up to the Target Net Capacity at all times during the Contract Period
other than periods of Planned Outage or as the result of Force Majeure.

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13.3   Goro Nickel financing     If any Lender requires Enercal and/or any
entity which has provided Enercal with financial products or support to enter
into any documentation in relation to any financial product or support to be
provided by that Lender to Goro Nickel, then Enercal will (at Goro Nickel’s
cost) provide all reasonable assistance to such Lenders and Goro Nickel so that
such financial products or support can be provided and such documentation can be
executed. Nothing in this clause 13.3 shall require Enercal to provide any
assistance or enter into any document that would:

  (a)   be inconsistent with; or     (b)   adversely affect the rights of
Enercal or any such entity under,
any document to which Enercal or such entity is a party.

13.4   Expansion of Electricity supply obligation   (a)   Subject to clause
13.4(b), Enercal must procure that:

  (i)   the Facility is designed so that it can at all times, following a
request by Goro Nickel, be expanded by the construction of an additional 50MW
electricity generating unit; and     (ii)   a portion of land immediately
adjacent to the Facility is made available so that the Facility can be expanded
in accordance with clause 13.4(a)(i).

(b)   Where Goro Nickel gives Enercal notice of a request for an expansion of
the Facility in accordance with clause 13.4(a):

  (i)   Enercal undertakes to co-operate with Goro Nickel in co-ordinating all
aspects related to the expansion including the financing and construction
arrangements;     (ii)   Enercal acknowledges that, where Prony does not obtain
financing for any such expansion requested by Goro Nickel, Goro Nickel will be
entitled to, in accordance with its rights and obligations under the Utilities
and Services Agreement, use its own funds to construct such expansion on the
land referred to in clause 13.4(a)(ii) (which land is to be made available to
Goro Nickel by Prony); and     (iii)   the Parties shall meet to determine any
amendments that are required to this Agreement and to each Project Agreement and
shall implement any amendments agreed following such meeting.

(c)   Goro Nickel may only give Enercal a request for an expansion of the
Facility in accordance with clause 13.4(a) once.   13.5   Replacement of an Inco
Guarantee   (a)   If an entity other than Inco acquires a direct or indirect
interest in Goro Nickel, Enercal acknowledges that an Inco Guarantee (and any
other guarantee provided in accordance with this clause 13.5) may be replaced
with:

  (i)   a new guarantee from Inco in the same form as that Inco Guarantee save
that the amount guaranteed under such new guarantee will be at least the
proportion of the

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      amount guaranteed under that Inco Guarantee representing Inco’s then
proportional ownership interest in the total number of ordinary shares in the
capital of Goro Nickel; and     (ii)   one or more guarantees with the same
legal effect as that Inco Guarantee (or other form of credit support agreed by
Enercal, such agreement not to be unreasonably withheld) provided that any
entity giving any such replacement guarantee or other form of credit support
document has a credit rating of at least Baa3 from Moody’s Investors Services,
Inc or BBB- from Standard & Poor’s, a division of The McGraw-Hill Companies,

    provided that:

  (iii)   the total sum of the amounts guaranteed (on a several basis) under
each guarantee and other credit support documents provided under this clause
13.5 and in place at any time will equal the amount guaranteed under that Inco
Guarantee; and     (iv)   at no time will the total number of such guarantees
and other credit support documents which replace that Inco Guarantee exceed five
(5) (unless Enercal consents to an increase in the permitted number of
guarantees or other credit support documents, such consent not to be
unreasonably withheld).

(b)   Enercal agrees to execute each guarantee or agreed credit support document
which complies with the requirements of this clause 13.5 and which Goro Nickel
requires Enercal to enter into.   (c)   Notwithstanding clause 13.5(a)(i):

  (i)   from the date of this Agreement until the date of Definitive Acceptance,
Goro Nickel must procure that the proportion of the amount guaranteed by Inco
under the Inco Guarantee in effect until the date of Definitive Acceptance will
be at least sixty six and two thirds per cent. (66 2/3%) of the total amount of
that Inco Guarantee as at the date of that guarantee; and     (ii)   from the
date of Definitive Acceptance until 5 years from the date of Definitive
Acceptance, Goro Nickel must procure that the proportion of the amount
guaranteed by Inco under the Inco Guarantee in effect from the date of
Definitive Acceptance will be at least fifty and one tenth per cent (50.1%) of
the total amount of that Inco Guarantee as at the date of that guarantee.

13.6   Acknowledgements and commitment   (a)   Enercal acknowledges that it is
its intention to endeavour to inform Goro Nickel of any material event or
circumstance which may affect the ability of Enercal to perform its obligations
under this Agreement. For the avoidance of doubt, Goro Nickel acknowledges that
failure by Enercal to comply with this clause 13.6(a) shall not be a material
breach of this Agreement under clause 17.1(a)(iii) (Events of Default).   (b)  
Enercal shall ensure that the PPA or any alternative arrangement agreed to in
writing by Goro Nickel (such agreement not to be unreasonably withheld where
such arrangement will allow Enercal to continue to perform its obligations under
this Agreement) will at all times continue to be in full force and effect in a
form which will allow Enercal to continue to perform its obligations under this
Agreement.

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13.7   Notification   (a)   Where an event of default occurs under any Project
Agreement (other than this Agreement), Enercal must notify Goro Nickel of the
details of such event of default and Enercal’s view of the effect that such
event of default is likely to have on:

  (i)   the ability of Enercal to perform any material obligation under this
Agreement; and     (ii)   the operation, maintenance or ownership of the
Facility.

(b)   If Goro Nickel requests further reasonable information in relation to any
event of default referred to in clause 13.7(a), Enercal must procure that such
information is promptly provided to Goro Nickel.   (c)   Where Enercal delivers
a notice under clause 13.7(a):

  (i)   Enercal and Goro Nickel will meet with a view to defining any action
required from either party to minimise any effect on:

  (A)   Enercal’s ability to perform any material obligation under this
Agreement; or     (B)   the operation, maintenance or ownership of the Facility,

      as a result of the event of default detailed in that notice; and    
(ii)   Enercal will use its best endeavours to ensure that Goro Nickel is able
to participate in any discussion with Enercal and/or third parties related to
such event of default.

(d)   For the avoidance of doubt, Enercal acknowledges that the rights and
obligations of the Parties under this clause 13.7 are without prejudice to
clauses 17.1(b)(ii) and 17.2(b) (Termination right).   13.8   Goro Nickel
documentation   (a)   Subject to clause 13.8(b), Goro Nickel shall provide
Enercal with any existing document relating to the Nickel Mine project that is
determined by Goro Nickel to be reasonably requested by Enercal and required by
Enercal in order to effect the financing of the Facility under the Finance
Documents.   (b)   Enercal must procure that the contents of any document
provided by Goro Nickel in accordance with clause 13.8(a) are kept confidential
and that any such document is only provided to an entity that has entered into a
form of confidentiality agreement acceptable to Goro Nickel and to which Goro
Nickel is a party and requiring that entity to keep such document and its
contents confidential.   13.9   Construction activities at the Nickel Mine      
Goro Nickel will, within 30 days after the end of each calendar quarter, provide
Enercal with a report setting out:

  (a)   the construction activities carried out at the Nickel Mine in that
quarter;     (b)   whether those activities were substantially those proposed to
be carried out in that quarter (given brief details of the reasons for any
discrepancies); and

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  (c)   the construction activities proposed to be carried out at the Nickel
mine in the next quarter,

    in each case in a manner which will enable Enercal to determine whether or
not the condition specified in clause 17.1(c)(i) has been satisfied.

14.   CHANGES IN LAW   14.1   Illegality or unenforceability   (a)   Where
clause 14.2 (Addition or amendment to electricity generating unit) does not
apply in respect of the Change in Law, in the event that any Change in Law
renders, or any proposed Change in Law could likely render, the performance of
this Agreement (in whole or in part) illegal or materially unenforceable by
either Party (a Relevant Change in Law), then clauses 14.1(b) to 14.1(f)
(inclusive) shall apply.   (b)   Neither Party shall be in breach of this
Agreement to the extent such breach is caused by the Relevant Change in Law.  
(c)   It shall not be a basis for terminating this Agreement that any Relevant
Change in Law shall have occurred.   (d)   The Parties shall meet within ten
(10) Business Days of notice by either Party to discuss and, acting in good
faith, agree upon any amendments that may be required to the terms of this
Agreement in order to take account of the Relevant Change in Law such that each
Party can continue to comply with the terms of this Agreement and on the
understanding that any such amendments shall not affect the commercial balance
of this Agreement. If a dispute or difference shall arise between the Parties as
to whether such amendments are required or as to the amendments so required (and
a dispute or difference shall be deemed to have arisen if the Parties have not
reached agreement within thirty (30) Days of the written request pursuant to
this clause 14.1(d)) such dispute or difference will be referred to an Expert
with experience in resolving such disputes or disputes of a similar nature to
resolve in a manner which enables each Party to continue to comply with the
terms of this Agreement and, for the avoidance of doubt, the Expert shall be
authorised to determine amendments to the terms of this Agreement in resolving
such a dispute (which amendments shall not, so far as practicable, affect the
commercial balance of this Agreement). For the avoidance of doubt, if the Expert
is unable to resolve the dispute to the mutual satisfaction of the Parties, the
dispute shall be resolved in accordance with clause 38 (Arbitration).   (e)  
During the period from the date upon which a Relevant Change in Law becomes
effective to the date upon which agreement between the Parties is reached or the
Expert or arbitrator makes a decision, all obligations of the Parties under this
Agreement shall be suspended except to the extent that any obligation is
unaffected by the Relevant Change in Law and is able to continue to be performed
(in whole or in part) without affecting the commercial balance of this Agreement
(taking into account each obligation of a Party which is able to so continue to
be performed). Any obligation which is suspended in accordance with this clause
14.1(e) will be replaced with a replacement obligation to the extent that such
replacement obligation is agreed by the Parties.   (f)   The Parties will use
reasonable endeavours to agree replacement obligations in accordance with clause
14.1(e) (taking into account all reasonable representations made by each Party)
and acknowledge that such replacement obligations will be as similar to the
suspended obligations as is practicable having regard to the nature of the
Relevant Change in Law.

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14.2   Addition or amendment to electricity generating unit   (a)   In the event
that any Change in Law requires a material addition to or modification of the
Facility or a modification of the operation of the Facility in order to bring
the Facility into compliance with Applicable Laws (as changed by the Change in
Law) (Required Works) and the Required Works are likely to materially increase
Enercal’s costs of complying with its obligations under this Agreement (and
would not otherwise be passed through to Goro Nickel automatically through the
indexation or adjustment of amounts payable by Goro Nickel in accordance with
this Agreement) (Material Adverse Change), then Enercal may within one (1) Month
following the Change in Law giving rise to the Required Works and the Material
Adverse Change give notice (Change Notice) to Goro Nickel setting out, to the
extent then available (having procured the relevant information from Prony where
required):

  (i)   the details of the Change in Law, the Required Works (including the
period by which the Required Works must be implemented) and the Material Adverse
Change; and     (ii)   Prony’s and Enercal’s proposed remedial works, programme
and budget to carry out the Required Works including the additional costs
associated with making available Electricity during the period that the Required
Works are being implemented.

(b)   To the extent that the information required to be delivered in accordance
with clause 14.2(a) is not all available at the time a Change Notice is given
pursuant to clause 14.2(a), such information shall be provided to Goro Nickel as
soon as it becomes available.   (c)   After receipt of the Change Notice, Goro
Nickel shall be entitled to serve a notice on Enercal requiring Enercal to
provide (having procured the relevant information from Prony where required)
further information to support the contents of the Change Notice.   (d)  
Enercal and Goro Nickel shall, within thirty (30) Days of Enercal’s receipt of
the notice given by Goro Nickel under clause 14.2(c) (or such longer period as
is nominated by Goro Nickel taking into account the Required Works), use
reasonable endeavours to agree upon the remedial works, programme and budget to
carry out the Required Works, failing which agreement either Party shall be
entitled to refer any matter which is not agreed to an Expert with experience in
resolving such disputes or disputes of a similar nature. For the avoidance of
doubt, if the Expert is unable to resolve the dispute to the mutual satisfaction
of the Parties, the dispute shall be resolved in accordance with clause 38
(Arbitration).   (e)   Following approval or determination of the remedial
works, programme and budget to carry out the Required Works, Enercal shall
procure that the Required Works are carried out promptly and diligently and
shall notify Goro Nickel of the date on which the Required Works are complete.  
(f)   If Enercal does not serve a Change Notice in accordance with clause
14.2(a), Goro Nickel will not be obliged to compensate Enercal in relation to
the Required Works or the Material Adverse Change.   (g)   In each Month from
the date of commencement of operation of the Required Works until the earlier of
the end of the Contract Period and end of the weighted average depreciable life
of the Required Works, an amount, CIL, will be included in the Availability
Charge for that Month, where CIL equals:

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    (EQUATION) [t15872t1587201.gif]       Where:

  A    is half of the total capital costs of implementing the Required Works (as
set out in the agreed or determined budget for the Remedial Works) (Required
Works Cost);     B    is the total number of Years of weighted average
depreciable life of the Required Works determined in accordance with IAS (as in
effect at the time of the Material Adverse Change);     b    is B x 12;     I   
is 150 basis points over the rate published by Reuters appearing in the 3rd
column on the ISDAFIX2 page entitled “ISDA BENCHMARK RATES”, corresponding to
the fixing at 11.00 a.m. Frankfurt time (on relevant date) the maturity of which
is B x 2/3, rounded to the nearest whole number. If B x 2/3 (rounded to the
nearest whole number) falls in between the published periods then I shall be
calculated as 150 basis points over the rate determined by linear interpolation
of the rates published; and     i    is I/12.

(h)   Goro Nickel shall not be obliged to make any further payment in respect of
the Required Works in respect of the period after the Contract Period.   (i)  
For the avoidance of doubt, the Parties acknowledge that the formula for
determining CIL in clause 14.2(g) will apply only in the circumstances that the
Facility comprises two electricity generating units. If the Facility is expanded
in accordance with clause 13.4 (Expansion of Electricity supply obligation), the
Parties will meet to determine those amendments that are required to reflect
such expansion in accordance with clause 13.4(b)(iii) (Expansion of Electricity
supply obligation).   (j)   If as a result of the Required Works, Enercal would
be required to incur additional ongoing increased operating and maintenance
costs which costs would not otherwise be passed through to Goro Nickel
automatically through the indexation or adjustment of amounts payable by Goro
Nickel in accordance with this Agreement (including for the avoidance of doubt
in this clause 14.2) and Enercal has taken all reasonable steps to minimise such
additional costs, then Goro Nickel and Enercal shall meet to determine a
mechanism to adjust, as appropriate:

  (A)   the ACOM component of the Availability Charge;     (B)   the Variable
Operating and Maintenance Charge; and     (C)   the Fuel Charge,

    or to reimburse Enercal by some other agreed reimbursement mechanism such
that in the Months during the Contract Period in which the adjustment or
reimbursement is made, Enercal shall be able to recover half of the additional
operating and maintenance costs which were directly attributable to the Required
Works (but, for the avoidance of doubt, no return thereon).

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14.3   Tax Change in Law   (a)   For the purposes of this clause 14.3, Excluded
Tax shall mean income tax, corporation tax, capital tax, dividend tax, branch
tax, interest withholding tax or similar tax or deduction.   (b)   Subject to
clauses 14.3 (c) to (e) inclusive below, in the event that:

  (i)   Enercal incurs material additional costs or savings in performing its
obligations under this Agreement as a result of a Tax Change in Law; and    
(ii)   such costs or savings would not otherwise be passed through to Goro
Nickel automatically through the indexation or adjustment of amounts payable by
Goro Nickel in accordance with this Agreement,

    then such costs or savings will be passed on to Goro Nickel by means of an
adjustment to the amounts payable to Enercal in accordance with clause 8
(Payments) or by some other reimbursement mechanism agreed between the Parties.
  (c)   Any increase or decrease in the amount of an Excluded Tax payable by
Enercal shall not be passed on to Goro Nickel under clause 14.3(b).   (d)  
Enercal shall use reasonable endeavours, acting as a Reasonable and Prudent
Operator, to minimise any increased costs and maximise any savings in relation
to each Tax Change in Law.   (e)   In the event that the Parties are unable to
agree on an adjustment to the amounts payable to Enercal in accordance with
clause 8 (Payments) or by some other agreed reimbursement mechanism, the matter
shall be referred for resolution to an Expert. For the avoidance of doubt, if
the Expert is unable to resolve the dispute to the mutual satisfaction of the
Parties, the dispute shall be resolved in accordance with clause 38
(Arbitration).   14.4   Change in Law costs   (a)   If, as a result of the
operation of this clause 14, the amount agreed or determined to be reimbursable
by Goro Nickel to Enercal or which would be required to be passed on by Enercal
to Goro Nickel would result in the total amount payable under clause 8 in any
Month, being twenty per cent. (20%) greater in that Month than the amount of
that payment had this clause 14 not been operative, then Goro Nickel shall have
the option at any time thereafter to terminate this Agreement upon written
notice to Enercal specifying a termination date (Early Termination Date).  
(b)   On, or as soon as reasonably practicable after, the Early Termination Date
of which notice is given under clause 14.4(a), Enercal shall in good faith
calculate the termination payment (the Termination Payment), in accordance with
this clause 14.4(c).   (c)   The Termination Payment will be the remaining
depreciated net book value of the second generating unit of the Facility, with
depreciation calculated on a twenty-five year straight line basis (determined as
at the Early Termination Date).   (d)   Enercal shall notify Goro Nickel of the
Termination Payment including detailed support for the Termination Payment
calculation.

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(e)   Goro Nickel shall pay the Termination Payment to Enercal within ten
(10) Business Days of invoice or notification of the Termination Payment amount
(the Termination Payment Date), which amount shall bear interest in accordance
with clause 10.6 (Late payments).   (f)   Enercal may, at its option, set off
the Termination Payment against any or all other amounts owing (whether or not
matured, contingent or invoiced) between the Parties under this Agreement. The
right of set off shall be without prejudice and in addition to any right of set
off, combination of accounts, lien, charge or other right to which any Party is
at any time otherwise entitled (whether by operation of law, by contract or
otherwise). If an amount is unascertained, Enercal may reasonably estimate the
amount to be set off. The Parties shall make any adjustment payment required
within three (3) Business Days of the amount becoming ascertained.   (g)  
Disputed amounts under this clause 14.4 shall be paid by Goro Nickel subject to
refund with interest calculated in accordance with clause 10.6 (Late payments)
if the dispute is resolved in favour of Goro Nickel.   15.   ESA COORDINATING
COMMITTEE   15.1   Establishment of ESA Coordinating Committee       Enercal and
Goro Nickel shall create a committee made up of three (3) representatives of
Enercal and three (3) representatives of Goro Nickel (ESA Coordinating
Committee).   15.2   Meetings of ESA Coordinating Committee   (a)   The ESA
Coordinating Committee shall meet as often as it determines is necessary and no
less frequently than quarterly.   (b)   A quorum of the ESA Coordinating
Committee shall exist when at least one (1) representative of each Party is
present.   (c)   The ESA Coordinating Committee may conduct its meetings by
telephone.   15.3   ESA Coordinating Committee procedures and functions   (a)  
Promptly following appointment of the members of the ESA Coordinating Committee
pursuant to clause 15.1 (Establishment of ESA Coordinating Committee), the ESA
Coordinating Committee shall meet to define its internal procedures, which
shall, among other things, provide for one (1) vote for each of Enercal and Goro
Nickel, which may be cast by one (1) or by each of a Party’s representatives on
the ESA Coordinating Committee.   (b)   In the event the ESA Coordinating
Committee is unable to take action as a result of a deadlock among the
representatives, the dispute causing such deadlock shall be referred to the
senior management of the Parties. If the dispute can still not be resolved, it
shall be resolved by an Expert with experience in resolving such disputes or
disputes of a similar nature. For the avoidance of doubt, if the Expert is
unable to resolve the dispute to the mutual satisfaction of the Parties, the
dispute shall be resolved in accordance with clause 38 (Arbitration).   (c)  
The ESA Coordinating Committee shall define procedures to govern the day-to-day
relationship between Enercal and Goro Nickel. The procedures adopted by the ESA
Coordinating Committee in all respects shall be subject to and consistent with
the terms of this Agreement and the scope of the ESA Coordinating Committee’s
specific responsibilities

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    listed in clause 15.3(e), and this Agreement shall prevail in the event of
any conflict between this Agreement and the procedures adopted by the ESA
Coordinating Committee.   (d)   Without limiting the foregoing, the ESA
Coordinating Committee shall not have any authority to amend this Agreement.  
(e)   The functions of the ESA Coordinating Committee shall include those
functions set out in this Agreement and the following:

  (i)   defining the internal procedures of the ESA Coordinating Committee; and
    (ii)   establishing day-to-day communication methods, including
communications procedures for the delivery of and payment for Electricity.

(f)   For the avoidance of doubt, nothing in this clause 15 can be interpreted
as granting any authority to the ESA Coordinating Committee which would detract
from Enercal’s right to make decisions as a Reasonable and Prudent Operator in
carrying out its obligations under this Agreement.   16.   FORCE MAJEURE  
16.1   Relief from liability   (a)   The Parties agree that the provisions of
Art. 1148 of the French civil code will not apply to the provisions of this
Agreement. As a result, neither Party shall be relieved from liability under
this Agreement for failure to perform any of its obligations under this
Agreement to the extent that such failure results from or is caused by (a)
“force majeure” or (b) “cas fortuit” as each of those two terms is defined under
Art. 1148 of the French civil code   (b)   Notwithstanding clause 16.1(a) and
subject to the provisions of this clause 16, a Party shall, except where
otherwise specified in this Agreement, be relieved from liability under this
Agreement for breach of any of its obligations under this Agreement if and to
the extent that such a breach results from or is caused by Force Majeure.  
(c)   For the avoidance of doubt:

  (i)   Goro Nickel’s obligation to pay ACFC in any Month prior to any Extension
Period will not be affected by Force Majeure affecting either Party;     (ii)  
where in any Hour of any Month during the Contract Period, Enercal’s ability to
make available Electricity is affected by Force Majeure (as specified in the
Force Majeure Notice given in respect of the Force Majeure) the provisions of
clause 9.2(b) (Availability factors) will apply; and     (iii)   where in any
Hour of any Month during the Contract Period, Goro Nickel’s ability to take
Electricity made available by Enercal is affected, Goro Nickel’s obligations to
make payment of the Availability Charge in that Month will not be affected.

16.2   Consequences of Force Majeure   (a)   Where a Party’s performance of its
obligations under this Agreement has been affected by Force Majeure, that Party
shall promptly (and in any event no later than five (5) Days of becoming aware
of the Force Majeure) give a notice to the other Party (Force Majeure Notice).

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(b)   A Force Majeure Notice shall (to the extent that such information is
reasonably available) state:

  (i)   a description of the Force Majeure, including the date of the
commencement of the Force Majeure and the extent of such Force Majeure;    
(ii)   the anticipated date of removal of such Force Majeure;     (iii)   the
cause of such Force Majeure;     (iv)   where Enercal is giving the Force
Majeure Notice, the effect that such Force Majeure has had and will have on:

  (A)   the ability of Enercal to make Electricity available; and     (B)  
Enercal’s daily nominations of Expected Actual Capacity given in respect of each
Hour it has been or expects to be affected by Force Majeure;

  (v)   the steps the Party giving the Force Majeure Notice proposes to take to
remove or mitigate the effects of such Force Majeure on the performance of its
obligations under this Agreement and to mitigate the effects of the
non-performance of its obligations on the other Party as a result of the Force
Majeure; and     (vi)   such other details as may be reasonably requested by the
other Party.

    To the extent that such information is not reasonably available at the time
a Force Majeure Notice is given pursuant to clause 16.2(a), such information
shall be notified to the other Party as soon as it becomes reasonably available.
  (c)   Where the Force Majeure Notice indicates that the anticipated date of
cessation of the effects of the Force Majeure on the performance of the affected
Party’s obligations under this Agreement is more than five (5) Days from the
commencement of the Force Majeure, the Parties will meet with a view to:

  (i)   agreeing a plan detailing the steps to be taken by the Party affected by
the Force Majeure to remove or mitigate the effects of such Force Majeure on the
performance of its obligations under this Agreement and to mitigate the effects
of the non-performance of its obligations on the other Party as a result of the
Force Majeure (Force Majeure Plan); or     (ii)   agreeing that the Force
Majeure cannot be remedied or cannot be remedied within 180 Days.

    If the Parties cannot reach agreement under clause 16.2(c)(i) or (ii), the
Parties shall submit the dispute to an Expert with experience in resolving such
disputes or disputes of a similar nature. The Expert shall be required to
resolve the dispute by:

  (iii)   if the Expert considers that the Force Majeure can be remedied within
180 Days, taking into account the submissions of the Parties and determining the
most effective Force Majeure Plan; or     (iv)   determining that the Force
Majeure cannot be remedied or cannot be remedied within 180 Days.

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    For the avoidance of doubt, if the Expert is unable to resolve the dispute
to the mutual satisfaction of the Parties, the dispute shall be resolved in
accordance with clause 38 (Arbitration).   (d)   If the Parties agree a Force
Majeure Plan or the Expert (or arbitrator) determines a Force Majeure Plan, the
Party whose obligations have been affected by such Force Majeure shall:

  (i)   implement the Force Majeure Plan;     (ii)   take all other reasonable
steps to mitigate the effects of such Force Majeure on the performance of its
obligations under this Agreement and to mitigate the effects of the
non-performance of its obligations on the other Party as a result of the Force
Majeure;     (iii)   give regular updates to the other Party setting out the
progress of the implementation of the Force Majeure Plan and the likely date or
dates on which the performance of each of its affected obligations will resume;
and     (iv)   resume the performance of such obligations as soon as reasonably
practicable and notify the other Party of such resumption accordingly.

(e)   If the Parties do not agree a Force Majeure Plan and agree (or the Expert
or arbitrator determines) that the Force Majeure cannot be remedied or cannot be
remedied within 180 Days, then either Party shall be entitled to terminate this
Agreement on written notice to the other. Upon such termination, subject to
clause 16.2(f), neither Party will have any rights or liabilities under this
Agreement other than those under clause 18 (Confidentiality) which shall
continue for a period of five (5) years after such termination. For the
avoidance of doubt, Goro Nickel shall have no right to:

  (i)   terminate this Agreement pursuant to this clause 16.2(e); or     (ii)  
claim that the performance of its obligations under this Agreement are affected
by Force Majeure,

    solely on the basis that it is unable to use Electricity which is made
available to it by Enercal on the terms of this Agreement.

(f)   If Goro Nickel elects to terminate this Agreement pursuant to clause
16.2(e) (the date of such termination being the Early Termination Date) Goro
Nickel will pay Enercal a termination payment (the Termination Payment),

  (i)   if the Early Termination Date falls before the twenty-fifth (25th)
anniversary of the Start Date, the amount required to indemnify Enercal for all
losses, damages and reasonable and demonstrable costs suffered by Enercal as a
result of the early termination of this Agreement such amount being equal to the
AC Present Value (calculated as of the Early Termination Date); and     (ii)  
if the Early Termination Date falls after the twenty-fifth (25th) anniversary of
the Start Date, the amount required to indemnify Enercal for all losses, damages
and reasonable and demonstrable costs suffered by Enercal as a result of the
early termination of this Agreement up to twenty per cent. (20%) of the
demonstrable fixed costs of operating and maintaining the second generating unit
at the Facility (calculated as of the Early Termination Date in respect of the
period from the Early Termination Date to the end of the Extension Period in
which the Early Termination Date falls).

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(g)   On, or as soon as reasonably practicable after, the Early Termination Date
of which notice is given under clause 16.2(e), Enercal shall in good faith
calculate the Termination Payment.   (h)   Enercal shall notify Goro Nickel of
the Termination Payment including detailed support for the Termination Payment
calculation.   (i)   Goro Nickel shall pay the Termination Payment to Enercal
within ten (10) Business Days of invoice or notification of the Termination
Payment amount (the Termination Payment Date), which amount shall bear interest
in accordance with clause 10.6 (Late payments).   (j)   Enercal may, at its
option, set off the Termination Payment against any or all other amounts owing
(whether or not matured, contingent or invoiced) between the Parties under this
Agreement. The right of set off shall be without prejudice and in addition to
any right of set off, combination of accounts, lien, charge or other right to
which any Party is at any time otherwise entitled (whether by operation of law,
by contract or otherwise). If an amount is unascertained, Enercal may reasonably
estimate the amount to be set off. The Parties shall make any adjustment payment
required within three (3) Business Days of the amount becoming ascertained.  
(k)   Disputed amounts under this clause 16.2 shall be paid by Goro Nickel
subject to refund with interest calculated in accordance with clause 10.6 (Late
payments) if the dispute is resolved in favour of Goro Nickel.   17.  
TERMINATION   17.1   Events of Default       Event of Default means:

  (a)   the occurrence at any time after the Start Date with respect to a Party
(the Defaulting Party) of any of the following events:

  (i)   (Insolvency) the Party:

  (A)   is dissolved or is in a state of ceasing payments (“état de cessation de
paiements”);     (B)   is subject to a procedure of amicable settlement
(“réglement amiable”) or generally makes a general assignment, arrangement or
composition with or for the benefit of its creditors;     (C)   institutes or
has instituted against it an insolvency or liquidation (“redressement ou
liquidation judiciaire”) proceeding or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, that proceeding or petition:

  I.   results in such Party being declared insolvent (“en état de cessation de
paiements”) or being liquidated or in the making of an order for its winding-up
or liquidation; or     II.   is not withdrawn, dismissed, discharged, stayed or
restrained in each case within thirty (30) Days of the institution or
presentation of that proceeding or petition;

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  (D)   has a resolution passed for its dissolution or liquidation (other than
pursuant to a merger);     (E)   has a secured party take possession of all or
substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against all
or substantially all its assets and that secured party maintains possession, or
that process is not withdrawn, dismissed, discharged, stayed or restrained, in
each case within thirty (30) Days of that event;     (F)   causes or is subject
to any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses
17.1(a)(i)(A) to 17.1(a)(i)(E) (inclusive); or     (G)   takes any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts referred to in this clause 17.1(a)(i),

      (each of the foregoing events an Insolvency Event);     (ii)  
(Non-Payment) the Party fails to pay any amount when due and payable under this
Agreement, and that failure is not remedied on or before the thirtieth (30th)
Business Day after the Non-Defaulting Party gives the Party notice of that
failure;     (iii)   (Material Obligations) the Party, where not affected by
Force Majeure, fails to perform a material obligation or material obligations
under this Agreement (other than an obligation referred to in clause 17.1(a)(ii)
or 17.1(b)(i) or an obligation to deliver Electricity), which failure has a
material adverse effect on the rights of the other Party under this Agreement
and that failure is not remedied:

  (A)   within thirty (30) Business Days where the Defaulting Party cannot
demonstrate (within thirty (30) Business Days following the Non-Defaulting Party
giving the Defaulting Party notice of that failure) to the Non-Defaulting
Party’s satisfaction (determined by the Non-Defaulting Party acting reasonably)
that the Defaulting Party is diligently pursuing a remedy for that failure; or  
  (B)   within sixty (60) Business Days (or such other period of time agreed by
the Non-Defaulting Party) where the Defaulting Party demonstrates (within thirty
(30) Business Days following the Non-Defaulting Party giving the Party notice of
that failure) to the Non-Defaulting Party’s satisfaction (determined by the
Non-Defaulting Party acting reasonably) that the Defaulting Party is diligently
pursuing a remedy for that failure;

  (b)   the occurrence at any time with respect to Enercal (the Defaulting
Party) of any of the following events:

  (i)   (Insurance) any insurance which is agreed to be required under this
Agreement, or which is required under Applicable Laws, to be effected and
maintained by Enercal is not so effected and maintained, becomes voidable

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      (whether for lack of disclosure, breach of condition or otherwise) or is
cancelled and:

  (A)   Enercal cannot demonstrate to Goro Nickel’s satisfaction that Enercal is
diligently pursuing a remedy for such failure; or     (B)   Enercal demonstrates
to Goro Nickel’s satisfaction that Enercal is diligently pursuing a remedy for
that failure and such failure is not remedied on or before the thirtieth (30th)
Business Day following such failure;

  (ii)   (Default) the occurrence of any event of default (save to the extent
that such event of default is caused by Goro Nickel) under any Project Agreement
(other than this Agreement):

  (A)   which is notified by Enercal to Goro Nickel under clause 13.7
(Notification); or     (B)   which ought to have been notified by Enercal to
Goro Nickel under clause 13.7 (Notification),

      which has not been waived by each non-defaulting party to that Project
Agreement and any non-defaulting party indicates that it intends to, or actually
seeks to, initiate any form of enforcement proceeding under such Project
Agreement which:

  (A)   Enercal agrees;     (B)   Goro Nickel demonstrates; or     (C)   an
Expert determines,

      will adversely affect:

  (A)   the ability of Enercal to perform any material obligation under this
Agreement; or     (B)   the operation, maintenance or ownership of the Facility
where such effect may have a material effect on Goro Nickel’s rights under this
Agreement; and

  (iii)   (Level Three Disruption Process) a Level Three Disruption Process is
Unsuccessful;     (iv)   (Two Level Three Disruption Processes in 12 months) a
Level Three Disruption Process is Successful but another Level Three Disruption
Process occurs within 12 months thereafter;     (v)   (Prevention of Disruption
Process) Enercal or Prony wilfully prevent the implementation of a Disruption
Process;     (vi)   (Representation or Warranty) any representation or warranty
made by Enercal in clause 19 (Representations and Warranties) of this Agreement
proves to have been false or misleading at the time it was made in a way that

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      materially adversely affects the rights of Goro Nickel under this
Agreement unless remedied to the satisfaction of Goro Nickel;     (vii)  
(Credit Support) any Credit Support Document relating to Enercal’s obligations
under this Agreement expires or terminates or fails or ceases to be in full
force and effect for the purposes of this Agreement (in any case other than in
accordance with its terms where, if so required by this Agreement, a replacement
is immediately provided) prior to the satisfaction of all obligations of Enercal
under this Agreement without the written consent of Goro Nickel; and    
(viii)   (Force Majeure) Enercal fails to comply with any Force Majeure Plan
agreed between the Parties or determined by an Expert (or arbitrator); and

  (c)   (Abandonment) at any time prior to the date of Definitive Acceptance,
(i) Goro Nickel (the (Defaulting Party) voluntarily ceases to perform all or
substantially all construction activities of the Nickel Mine without
interruption for a period of 180 days, (ii) Enercal has issued (at the end of
such period) a notice requesting a certificate from Goro Nickel to the effect
that Goro Nickel intends to resume or cause to be resumed all or substantially
all such construction activities and (iii) Goro Nickel has either not delivered
such a certificate within 180 days of receipt of such notice from Enercal or,
having so delivered such a certificate, Goro Nickel has not resumed all or
substantially all construction activities at the Nickel Mine within a period of
180 days of the date of such certificate. For the purposes of this clause
17.1(c), Goro Nickel shall be deemed not to have voluntarily ceased to perform
construction activities at the Nickel Mine if such cessation:

  (A)   is caused by Goro Force Majeure;     (B)   is directly caused by a
failure by Prony or Enercal to perform any of their obligations under the
Project Agreements or otherwise by an absence of power or water and provided
that such failure or absence is not caused by Goro Nickel;     (C)   is at a
time that either Enercal or Prony is affected by an Insolvency Event provided
that such Insolvency Event has not been caused by Goro Nickel; or     (D)  
follows an abandonment of the Facility by Prony regardless of the cause of such
abandonment provided that such abandonment was not caused by Goro Nickel;

  (d)   the occurrence at any time with respect to Goro Nickel (the Defaulting
Party) of any of the following events:

  (i)   (Prevention of Disruption Process) once a Disruption Process has been
initiated, Goro Nickel wilfully prevents the implementation of the same;    
(ii)   (Representation or Warranty) any representation or warranty made by Goro
Nickel in clause 19 (Representations and Warranties) of this Agreement proves to
have been false or misleading at the time it was made in a way that materially
adversely affects the rights of Enercal under this Agreement unless remedied to
the satisfaction of Enercal;

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  (iii)   (Credit Support) any Credit Support Document relating to Goro Nickel’s
obligations under this Agreement expires or terminates or fails or ceases to be
in full force and effect for the purposes of this Agreement (in any case other
than in accordance with its terms where, if so required by this Agreement, a
replacement is immediately provided) prior to the satisfaction of all
obligations of Enercal under this Agreement without the written consent of
Enercal; and     (iv)   (Force Majeure) Goro Nickel fails to comply with any
Force Majeure Plan agreed between the Parties or determined by an Expert (or
arbitrator).

    If an Expert is to be selected to make a determination in accordance with
clause 17.1(b)(ii) (Default), then the reference to twenty-one (21) Business
Days in the definition of Expert in clause 1.1 (Definitions) will be deemed to
be two (2) Business Days.   17.2   Termination right   (a)   If, at any time, an
Event of Default (other than an Event of Default under clause 17.1(b)(ii)
(Default)) has occurred and is continuing, the Non-Defaulting Party may
designate a Business Day as an early termination date with respect to this
Agreement (the Early Termination Date) by giving not less than thirty (30) Days’
notice to the Defaulting Party. This notice shall specify the relevant Event of
Default.   (b)   If, at any time, an Event of Default under clause 17.1(b)(ii)
(Default) has occurred, the Non-Defaulting Party may designate a Business Day as
an early termination date with respect to this Agreement (the Early Termination
Date) by giving notice to the Defaulting Party. This notice shall specify the
relevant Event of Default.   (c)   The rights under clauses 17.2(a) and 17.2(b)
are in addition to any other remedies available under this Agreement or at law.
  17.3   Early Termination Date       If notice designating an Early Termination
Date is given under clause 17.2 (Termination right), the Early Termination Date
will occur on the date so designated unless the circumstances giving rise to the
Event of the Default are no longer continuing on the Early Termination Date.  
17.4   Termination Payment   (a)   On, or as soon as reasonably practicable
after, the Early Termination Date of which notice is given under clause 17.2,
the Non-Defaulting Party shall in good faith calculate the termination payment
(the Termination Payment), in accordance with this clause 17.4.   (b)   Where
Enercal is the Defaulting Party, the Termination Payment will be the amount
required to indemnify Goro Nickel for all losses, damages and reasonable and
demonstrable costs suffered by Goro Nickel as a result of the early termination
of this Agreement such amount not to exceed the Applicable Cap. The Applicable
Cap is 20,000,000 Dollars if the Early Termination Date occurs as a result of
Enercal’s wilful disregard of Goro Nickel’s need to have Electricity and
10,000,000 Dollars in any other case.   (c)   Where Goro Nickel is the
Defaulting Party, then:

  (i)   the Termination Payment will be:

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  (A)   if the Early Termination Date falls before the Start Date, the amount
required to indemnify Enercal for all losses, damages and reasonable and
demonstrable costs suffered by Enercal as a result of the early termination of
this Agreement up to the amount determined as at the Early Termination Date in
accordance with the payment schedule set out in Annex 1 of the Inco Guarantee in
place as at the Early Termination Date;     (B)   if the Early Termination Date
falls on or after the Start Date but before the twenty-fifth (25th) anniversary
of the Start Date, the amount required to indemnify Enercal for all losses,
damages and reasonable and demonstrable costs suffered by Enercal as a result of
the early termination of this Agreement such amount (the Goro Nickel Termination
Payment) being equal to the AC Present Value (calculated as of the Early
Termination Date); and     (C)   if the Early Termination Date falls after the
twenty-fifth (25th) anniversary of the Start Date, the amount required to
indemnify Enercal for all losses, damages and reasonable and demonstrable costs
suffered by Enercal as a result of the early termination of this Agreement up to
twenty per cent. (20%) of the demonstrable fixed costs of operating and
maintaining the second generating unit at the Facility (calculated as of the
Early Termination Date in respect of the period from the Early Termination Date
to the end of the Extension Period in which the Early Termination Date falls);

  (ii)   any payment of or on account of a Termination Payment made under any
Inco Guarantee shall constitute pro tanto satisfaction of Goro Nickel’s
obligation to pay such Termination Payment;     (iii)   where clause
17.4(c)(i)(A) or (C) above applies, Enercal will use all reasonable endeavours
to minimise the amount of its losses, damages and costs; and     (iv)   where
clause 17.4(c)(i)(A) applies and the amount paid under the relevant Inco
Guarantee exceeds the actual amount of Enercal’s losses, damages and costs,
Enercal will pay an amount equal to the excess to Goro Nickel within 30 days of
such actual amount being finally agreed between the Parties or in the absence of
agreement determined in accordance with clause 38 (Arbitration).

(d)   The Non-Defaulting Party shall notify the Defaulting Party of the
Termination Payment including detailed support for the Termination Payment
calculation.   (e)   The Defaulting Party shall pay the Termination Payment to
the Non-Defaulting Party within ten (10) Business Days of invoice or
notification of the Termination Payment amount (the Termination Payment Date),
which amount shall bear interest in accordance with clause 10.6 (Late payments).
  (f)   The Non-Defaulting Party may, at its option, set off the Termination
Payment against any or all other amounts owing (whether or not matured,
contingent or invoiced) between the Parties under this Agreement. The right of
set off shall be without prejudice and in addition to any right of set off,
combination of accounts, lien, charge or other right to which any Party is at
any time otherwise entitled (whether by operation of law, by contract or
otherwise). If an amount is unascertained, the Non-Defaulting Party may
reasonably estimate the amount to be set off. The Parties shall make any
adjustment payment required within three (3) Business Days of the amount
becoming ascertained.

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(g)   Disputed amounts under this clause 17.4 shall be paid by the Defaulting
Party subject to refund with interest calculated in accordance with clause 10.6
(Late payments) if the dispute is resolved in favour of the Defaulting Party.  
(h)   The rights and obligations of the Parties under this clause 17.4 shall
survive termination of this Agreement.   17.5   Reimbursement of Termination
Payment   (a)   If Goro Nickel makes a Termination Payment (or a Termination
Payment is made on Goro Nickel’s behalf pursuant to a Credit Support Document)
following an Early Termination Date in accordance with this clause 17 or clause
16, Enercal must use its best endeavours to operate the Enercal System in a
manner that will allow any reimbursement of the Termination Payment paid by Goro
Nickel (or on Goro Nickel’s behalf pursuant to a Credit Support Document) to be
maximised in accordance with clause 17.5(b) up to the amount of the Termination
Payment.   (b)   If, in respect of any Hour from the Early Termination Date
referred to in clause 17.5(a) until the end of the Contract Period:

  (i)   the Transmission Metering System records that electricity in excess of
50,000kW was delivered to the Transmission System in that Hour; and     (ii)  
the full amount of the Termination Payment has not already been fully accrued,

      then Goro Nickel shall be entitled to a Reimbursement Credit in respect of
any such excess electricity so recorded (Reimbursement Credit Electricity). For
the purposes of this clause 17.5 only, the end of the Contract Period will be
determined as if the Early Termination Date had not occurred and will be:

  (A)   if the Early Termination Date does not fall within an Extension Period,
the 25th anniversary of the Start Date; or     (B)   if the Early Termination
Date falls within an Extension Period, the date of expiration of that Extension
Period.

(c)   The Reimbursement Credit in any Month m, RCRm, will be calculated as
follows:       RCRm = The Reimbursement Credit Amount x the amount of
Reimbursement Credit Electricity (measured in units of kWh) recorded by the
Transmission Metering System in Month m.   (d)   Any entitlement to a
Reimbursement Credit pursuant to this clause 17.5 in respect of any Month will
be payable by Enercal to Goro Nickel by the fifteenth (15th) Business Day of the
following Month.   (e)   This clause 17.5 shall survive termination of this
Agreement.   18.   CONFIDENTIALITY   (a)   The Parties shall treat the terms of
this Agreement and all information provided under or in connection with this
Agreement (Confidential Information) as confidential and shall not disclose
Confidential Information without the prior written consent of the other Party,
save that consent shall not be required for disclosure:

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  (i)   to directors, employees or Affiliates of a Party, provided that they in
turn are required by that Party to treat the Confidential Information as
confidential in favour of the other Party on terms substantially the same as
those set out in this clause 18;     (ii)   to persons professionally engaged by
a Party to the extent required in relation to such engagement, provided that
they in turn are required by that Party to treat the Confidential Information as
confidential in favour of the other Party on terms substantially the same as
those set out in this clause 18;     (iii)   to the extent required by any
Competent Authority having jurisdiction over that Party;     (iv)   to any bank,
other financial institution or rating agency to the extent required in relation
to the financing of a Party’s business activities, provided that the bank, or
other financial institution or rating agency, as the case may be, is required by
that Party to treat the Confidential Information as confidential in favour of
the other Party on terms substantially the same as those set out in this clause
18;     (v)   to the extent required by any Applicable Law, judicial process or
the rules and regulations of any recognised stock exchange, or to any Expert or
arbitrator to the extent necessary for the resolution of any dispute arising
under this Agreement;     (vi)   to any intending assignee of the rights and
interests of a Party under this Agreement or to a person intending to acquire an
interest in a Party or that Party’s Affiliate provided that the intending
assignee or acquirer in turn is required by that Party to treat the Confidential
Information as confidential in favour of the other Party on terms substantially
the same as those set out in this clause 18; and     (vii)   to the extent that
the Confidential Information is in or lawfully comes into the public domain
other than by breach of this clause 18.

(b)   The rights and obligations of the Parties under this clause 18 shall
survive termination of this Agreement and shall continue for a period of five
(5) years after such termination.   19.   REPRESENTATIONS AND WARRANTIES      
Each Party represents and warrants to the other Party that, (save in the case of
clause 19(d)) as of the date of this Agreement and (in the case of clause 19(d))
as of the date that Electricity is first required to be delivered under this
Agreement:

  (a)   (Status) it is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation (and, if relevant under those
laws, in good standing);     (b)   (Power) it has the power:

  (i)   to execute this Agreement and any other documentation relating to this
Agreement to which it is a party;     (ii)   to deliver this Agreement and any
other documentation relating to this Agreement that it is required by this
Agreement to deliver; and     (iii)   to perform its obligations under this
Agreement and has taken all necessary action to authorise that execution,
delivery and performance;

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  (c)   (No Violation or Conflict) the execution, delivery and performance
referred to in clause 19(b) do not violate or conflict with any law applicable
to it, any provision of its constitutional documents, any order or judgment of
any court or other Competent Authority applicable to it or any of its assets or
any contractual restriction binding on or affecting it or any of its assets;    
(d)   (Required Authorisations) all governmental and other licences,
authorisations, permits, consents, contracts and other approvals (if any) that
are required to enable the Party to fulfil any of its obligations under this
Agreement which it is required to perform on the date that Electricity is first
required to be delivered under this Agreement (Required Authorisations) have
been obtained and are in full force and effect and all conditions of any
Required Authorisations have been complied with;     (e)   (Obligations Binding)
its obligations under this Agreement constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms subject to
applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law);     (f)   (No Event of Default)
no Event of Default, or event which with notice and/or lapse of time would
constitute an Event of Default, has occurred with respect to it and no such
event would occur as a result of its entering into or performing its obligations
under this Agreement;     (g)   (No Litigation) no litigation, arbitration or
administrative suit or proceeding at law or in equity or before any court,
tribunal, governmental body, agency, official or arbitrator is pending or, so
far as it is aware, threatened against it which would result in a material
adverse change in such Party’s financial condition or its ability to perform its
obligations under this Agreement, or that is likely to affect the legality,
validity or enforceability against it of this Agreement;     (h)   (No Reliance)
it is not relying upon any representations of the other Party other than those
expressly set out in this Agreement;     (i)   (Principal) other than in the
case of Goro Nickel acting through and on behalf of its New Caledonian branch,
it has negotiated, entered into and executed this Agreement as principal (and
not as agent or in any other capacity, fiduciary or otherwise);     (j)   (Risk
Assumption) it has entered into this Agreement with a full understanding of the
material terms and risks of this Agreement and it is capable of assuming those
risks; and     (k)   (No Advice) the other Party is not acting as a fiduciary or
an adviser for it, nor has the other Party given to it any advice,
representation, assurance or guarantee as to the expected performance, benefit
or result of this Agreement.

20.   PERMITS AND OTHER APPROVALS   20.1   Responsibility for Permits and Other
Approvals

  (a)   Without prejudice to clause 20.2 (Assistance with obtaining and
maintaining Permits and Other Approvals) Enercal shall be solely and fully
responsible for obtaining and

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      maintaining all Permits and Other Approvals necessary for carrying out its
obligations under this Agreement.     (b)   For the avoidance of doubt, any
failure or refusal of a third party to issue a Permit or Other Approval will not
be an Excusing Factor for the purposes of this Agreement and will not relieve
Enercal from any obligation under this Agreement to obtain such Permit or Other
Approval.

20.2   Assistance with obtaining and maintaining Permits and Other Approvals  
    Upon receiving a written request from Enercal so to do, Goro Nickel shall
take such steps as are reasonable in the circumstances to assist Enercal to
obtain and/or maintain any of the Permits and any Other Approval provided that,
where Enercal makes any such request of Goro Nickel, Enercal shall:

  (a)   prior to the date upon which its request to Goro Nickel in accordance
with this clause 20.2 is submitted, have done all such things as it is
reasonable for Enercal, acting as a Reasonable and Prudent Operator, to have
done and as are necessary to obtain and/or maintain any Permit or Other Approval
which is the subject of such request;     (b)   notwithstanding the making of a
request of Goro Nickel in accordance with this clause 20.2, continue diligently
to pursue the grant and/or the maintenance of any Permit or Other Approval which
is the subject of such a request;     (c)   at the same time that it submits its
request to Goro Nickel, disclose to Goro Nickel full details of the steps which
Enercal has, prior to the date of the written request, taken to obtain and/or
maintain the Permit or Other Approval which is the subject of the request and of
the steps it is continuing to take with respect to the grant and/or maintenance
of such Permit or Other Approval;     (d)   provide Goro Nickel with such
assistance and information as Goro Nickel may reasonably request in connection
with Enercal’s request; and     (e)   bear all costs relating to the obtaining
and/or maintaining of any Permit or Other Approval and shall indemnify Goro
Nickel in respect of the same.

21.   ASSIGNMENT   21.1   Prohibition of assignment       Subject to clause 21.2
(Assignment by way of security), neither Party shall assign or transfer to any
person any of its rights or obligations in respect of this Agreement (including,
for the avoidance of doubt, as part of any statutory merger or “fusion”) without
the written consent of the other Party (which consent shall not be unreasonably
withheld or delayed).   21.2   Assignment by way of security       Either Party
may assign its rights under this Agreement by way of security to or in favour of
any bank or financial institution in relation to the financing of that Party’s
business activities.   22.   LIABILITIES   22.1   Consequential Loss

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    Except as specifically provided in this Agreement, neither Party shall be
liable to the other Party for any matter arising out of or in connection with
this Agreement in respect of any Consequential Loss suffered by the other Party.
  22.2   Limitation on liability   (a)   Subject to clause 22.2(b), the
liability of each Party to the other for breach of this Agreement (including for
the avoidance of doubt, any liability to pay an Availability Penalty) is limited
to an amount of four million (4,000,000) Euros per year (as such amount will be
adjusted each year from the date of this Agreement in accordance with the Agreed
Index).   (b)   The annual limit referred to clause 22.2(a) shall not apply to:

  (i)   any indemnity under clause 20 or clause 24 of this Agreement;     (ii)  
any amounts payable on a termination of this Agreement; and     (iii)   any
amount payable in accordance with clause 4.1(b) (such amounts being limited, for
the avoidance of doubt, to the amount set out in clause 4.1(b)).

22.3   Reasonable pre-estimate       Each Party acknowledges that the payment
obligations in clauses 4 (Funnel Mechanism) and 9 (Adjustments) are reasonable
in light of the anticipated harm and the difficulty of estimation or calculation
of actual damages upon early termination of this Agreement or upon the other
events referred to in those provisions. Each Party waives the right to contest
those payments as an unreasonable penalty.   23.   INSURANCE   23.1   Insurance
policies   (a)   Subject to clause 23.1(b), Enercal shall or shall procure that
its Affiliate shall, at its sole cost and expense, effect and maintain on a
primary and non-contributory basis the insurance policies and the levels of
deductibles described in schedule 10 (Insurance) in the amounts and on the terms
provided herein and therein with insurers deemed acceptable by Goro Nickel
(acting reasonably); provided, however, that such amounts and terms may be
changed from time to time with the prior written consent of Goro Nickel, which
consent shall not be unreasonably withheld. Nothing shall prevent Enercal, at
its costs and expense, and for its exclusive benefit, from procuring insurance
coverage in addition to the minimum coverages specified in schedule 10
(Insurance). Prior to placing the initial insurance policies described in
schedule 10 (Insurance) Enercal shall obtain Goro Nickel approval of such
policies.   (b)   Enercal shall not be required to effect and maintain any
insurance policy which is Unavailable.   (c)   If any insurance policy described
in schedule 10 (Insurance) and required to be effected and maintained by Enercal
is not so effected and maintained, becomes voidable (whether for lack of
disclosure, breach of condition or otherwise) or is cancelled, Enercal will
notify Goro Nickel of such occurrence. Upon receipt of such notice, Goro Nickel
will, at Enercal’s expense, use reasonable endeavours to assist Enercal to
effect and maintain the required insurance policy. For the avoidance of doubt,
while Goro Nickel continues to assist Enercal in accordance with this clause,
Enercal will not be a Defaulting Party for the purposes of clause 17.1(b)(i)
(Events of Default).

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23.2   Endorsements   (a)   Enercal shall cause its insurers to provide the
following endorsement items in its comprehensive or commercial general liability
insurance policies:

  (i)   Goro Nickel, Inco Australia Management Limited and Inco and the
employees of each of them shall be additional insured under such policies;    
(ii)   the insurance shall be primary with respect to the interest of the
employees of each of Goro Nickel, Inco Australia Management Limited and Inco and
any other insurance maintained by them is excess and not contributory with such
policies;     (iii)   such policies shall include standard cross liability
clauses; and     (iv)   notwithstanding any provision of the policies, the
policies may not be cancelled, non-renewed or materially changed by the insurer
without the insurer giving thirty (30) Days’ prior written notice or in the case
of cancellation for non-payment of any premium, thirty (30) Days’ prior written
notice to the insured party.

(b)   Enercal must procure that each insurance policy required to be effected
and maintained under this clause 23 is not cancelled, non-renewed or materially
changed by the insurer without Goro Nickel being given thirty (30) Days’ prior
written notice or in the case of cancellation for non-payment of any premium,
thirty (30) Days’ prior written notice.   (c)   Enercal shall cause its insurers
to waive all rights of subrogation against Goro Nickel, Inco Australia
Management Limited and Inco and against the employees, directors, agents,
shareholders and contractors of each of Goro Nickel, Inco Australia Management
and Inco in respect of a claim arising under its insurance policies, unless such
claim arises from wilful misconduct or gross negligence of the other Party or of
the other Party’s employees, directors, agents, shareholders or contractors.  
23.3   Insurance certificates       Enercal shall cause its insurers or agents
to provide Goro Nickel with certificates of insurance evidencing the policies
and terms specified in this clause 23 and schedule 10 (Insurance). Failure by
Enercal to obtain the insurance coverage or certificates of insurance required
by this clause 23 and schedule 10 (Insurance) shall not relieve Enercal of the
insurance requirements provided herein or therein or in any way relieve or limit
Enercal’s obligations and liabilities under any other provision of this
Agreement. If Enercal shall fail to procure or maintain any insurance required
pursuant to this clause 23 and schedule 10 (Insurance), Goro Nickel shall have
the right to procure such insurance at Enercal’s expense, provided Goro Nickel
shall have given thirty (30) Days’ prior written notice to Enercal of its
intention to exercise such right unless such intention arises from Enercal’s
non-payment of premiums for existing insurance in which case Goro Nickel shall
have given at least five (5) Days’ prior written notice of such intention.  
24.   INDEMNIFICATION       Each Party shall indemnify and hold harmless the
other Party and each of its Affiliates and each of their respective directors,
officers, shareholders, controlling persons, partners, employees, agents,
contractors, subcontractors and representatives and each of their respective
heirs, successors, and assigns from and against any and all damages, claims,
losses, liabilities, actions, causes of action, costs, expenses, and obligations
(including all reasonable attorneys’ fees), whether arising in contract, tort,
or otherwise, to third parties for or on

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    account of injury, bodily or otherwise, to, or death of, persons or for
damages to, or destruction of, property, in each case resulting from, arising
out of, or in connection with, such indemnifying Party’s negligence or wilful
misconduct.   25.   WAIVER       No waiver by either Party of any breach by the
other of this Agreement shall operate unless expressly made in writing, and any
such waiver shall not be construed as a waiver of any other breach.   26.  
VARIATION       No variation to the provisions of this Agreement shall be valid
unless it is in writing and signed by each Party.   27.   ENTIRE AGREEMENT  
(a)   This Agreement constitutes the entire agreement and understanding of the
Parties with respect to its subject matter and supersedes and extinguishes any
agreements, understandings and/or representations previously given or made with
respect thereto other than those included in this Agreement, provided that
nothing in this clause 27 shall limit or exclude any liability for fraud in
relation to those agreements, understandings and/or representations.   (b)   For
the avoidance of doubt, notwithstanding clause 27(a), the terms of the General
Agreement continue to apply to the extent such provisions are expressed to
survive execution of this Agreement.   28.   SEVERABILITY       The provisions
contained in each clause of this Agreement shall be enforceable independently of
each of the others and their validity shall not be affected if any of the others
are invalid. If any of those provisions is void but would be valid if some part
of the provision were deleted, the provision in question shall apply with such
modification as may be necessary to make it valid.   29.   NOTICES   29.1  
Address for notices       Any notice or other formal communication given under
this Agreement must be in writing (which, for the purposes of this clause 29,
includes fax, but not electronic mail) and may be delivered or sent by post or
fax to the Party to be served at its address as follows:

  (a)   to Enercal at:         87 avenue du Général de Gaulle
98800 Nouméa, New Caledonia         Fax: +687 250 253
Marked for the attention of
Directeur Général

  (b)   to Goro Nickel at:         38 rue du Colisee
75008, Paris, France         Fax: +33 1 45 63 29 97
Marked for the attention of the
Directeur General Délégué         And copied to:

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      7 bis, rue Suffren, BP218
98845 Nouméa Cedex, New Caledonia         Fax: +687 273 710
Marked for the attention of the
Président Directeur General         And also copied to:         Inco Limited
145 King Street West,
Toronto, ON, M5H 4B7         Fax: +1 41 6361 7788
Marked for the attention of Office of
the Secretary

    or at such other address or fax number as it may have notified to the other
Party in accordance with this clause 29. Any notice or other document sent by
post shall be sent by registered mail with return receipt requested (if within
New Caledonia) or by registered airmail with return receipt requested (if
elsewhere).   29.2   Delivery of notices       Any notice or other formal
communication shall be deemed to have been given:

  (a)   if hand delivered, at the time of delivery;     (b)   if posted, by
registered mail with return receipt requested (courrier recommandé avec accusé
de reception), at 10.00 a.m. on the second (2nd) Business Day after it was put
into the post;     (c)   if posted by registered airmail with return receipt
requested, at 10.00 a.m. on the tenth (10th) Business Day after it was put into
the post; or     (d)   if sent by fax, on the Day of transmission, if
transmitted before 3.00 p.m. on any Business Day, and in any other case on the
Business Day following the date of transmission.

29.3   Proof of service       In proving service of a notice or other formal
communication, it shall be sufficient to prove that delivery was made or that
the envelope containing the communication was properly addressed and posted
either by registered mail with return receipt requested (courrier recommandé
avec accusé de reception) or by registered airmail with return receipt requested
(as the case may be) or that the fax was properly addressed and transmitted.  
30.   FURTHER ASSURANCE       Each Party shall upon request, at its own expense,
at all times from the date of this Agreement do or procure the doing of all
things as may be required to give full effect to this Agreement, including the
execution or provision of all deeds and documents.

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31.   ANNOUNCEMENTS       No Party shall make (or permit any of its Affiliates
to make) any announcement concerning this Agreement or any ancillary matter
before, on or after the date of this Agreement except as required by law, or any
regulatory body or with the prior written approval of the other Party, such
approval not to be unreasonably withheld or delayed.   32.   COSTS AND EXPENSES
      Each Party shall pay the costs and expenses incurred by it in connection
with the entering into and completion of this Agreement.   33.   COUNTERPARTS  
    This Agreement may be executed in any number of counterparts, all of which,
taken together, shall constitute one and the same agreement, and any Party
(including any duly authorised representative of a Party) may enter into this
Agreement by executing a counterpart.   34.   LANGUAGE       The language of
this Agreement and the transactions envisaged by it is English and all notices,
demands, requests, statements, certificates or other documents or communications
shall be in English unless, in respect of administrative, accounting,
operational, financial and technical documents only, the ESA Coordinating
Committee determines otherwise or unless agreed in writing between the Parties.
If this Agreement or any other related documents originally prepared in English
are translated into another language, the English version shall prevail.   35.  
THIRD PARTY RIGHTS       Subject to the rights that may accrue to any successor
or permitted assigns of the Parties, no provision of this Agreement shall be
construed as creating any rights enforceable by a third party and all third
party rights implied by law are, to the extent permissible by law, excluded from
this Agreement.   36.   GOVERNING LAW       This Agreement shall be governed by
and construed in accordance with the laws of France.   37.   EXPERT
DETERMINATION   37.1   Dispute       Any dispute, claim or controversy arising
out of or in connection with this Agreement (a Dispute) shall, if the Parties
agree in writing that it is of a technical nature, be resolved in accordance
with this clause 37. In any other case, the Dispute shall be resolved in
accordance with clause 38 (Arbitration).   37.2   Referral to Expert      
Either Party may give at any time notice in writing to the other Party that a
Dispute of a technical nature has arisen (a Notice). If such Dispute is not
resolved by agreement in writing between the Parties within ten (10) Business
Days of the Notice being given, and the Parties agree in writing within five
(5) Business Days of the expiry of the ten (10) Business Day

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    period that the Dispute is of a technical nature (a Technical Dispute), an
Expert shall be appointed and the Technical Dispute shall be referred to an
independent Expert with experience in resolving such Technical Disputes or
Technical Disputes of a similar nature for determination.   37.3   Role of
Expert       The Expert appointed under clause 37.2 (Referral to Expert) shall
act on the following basis:

  (a)   on his or her appointment, the Expert shall confirm his or her
neutrality, independence and the absence of conflicts in determining the
Technical Dispute;     (b)   the Expert shall comply with the terms of this
Agreement and shall act as an expert and not as an arbitrator;     (c)   if the
ESA Coordinating Committee has selected the Expert, the Expert’s determination
shall (in the absence of manifest error) be final and binding on the Parties and
not subject to appeal (unless expressly stated otherwise in this Agreement);    
(d)   the Expert shall decide the procedure to be followed in the determination
in accordance with this Agreement and in consultation with the Parties and shall
be requested to make his or her determination in writing within twenty-five
(25) Business Days after his or her appointment or as soon as practicable
thereafter;     (e)   any amount payable by either Party to the other as a
result of the Expert’s determination shall be due and payable within five
(5) Business Days of the Expert’s determination being notified to the Parties.
Any action required by the Expert as a result of the Expert’s determination
shall be implemented within ten (10) Business Days following the Expert’s
determination being notified to the Parties or as specified within the
determination; and     (f)   the Expert shall decide how and by whom the costs
of the determination, including the fees and expenses of the Expert (but
excluding the Parties’ own costs which shall be borne by the Party incurring
those costs) (the Costs), are to be paid. Pending the Expert’s decision as to
the Costs of the determination, the Costs shall be borne equally by the Parties.
    (g)   For the avoidance of doubt, if the ESA Coordinating Committee has not
selected the Expert, a Party may refer any Technical Dispute which is not
resolved to its satisfaction to arbitration as a Dispute to be conducted in
accordance with clause 38 (Arbitration).

38.   ARBITRATION   38.1   Dispute       The Parties shall use reasonable
efforts to resolve any Dispute through negotiations. Either Party may at any
time refer a Dispute to one senior executive from each of Enercal and Goro
Nickel by giving a notice to the other that such Party desires a Dispute to be
decided by executives under this clause 38. Upon receipt of such notice of
referral, the executives of the Parties shall meet and attempt to resolve any
such Dispute. If the executives fail to resolve the Dispute within thirty
(30) Days after such Dispute is referred to them, then, except as otherwise
provided in this Agreement, such Dispute shall be finally and exclusively
settled by

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    arbitration in accordance with rules of arbitration of the International
Chamber of Commerce then in effect (the Rules), except as those rules may be
modified herein. The arbitration shall be held in Paris. The arbitration
proceedings shall be conducted, and the award shall be rendered, in the English
language.   38.2   Formation of tribunal       There shall be three arbitrators,
of whom each Party shall select one. At any time after the expiration of the
thirty (30) Day period referred to in clause 38.1 (Dispute), either Party (the
Claimant) may serve a request for arbitration (the Request for Arbitration), in
person or by registered mail, upon the other Party (the Respondent). Within
twenty (20) Days of the Respondent’s receipt of the Request for Arbitration, the
Respondent shall serve on the Claimant its answer to the Request for Arbitration
and any counterclaims. Should either Party fail to select an arbitrator, the
chairperson at the International Chamber of Commerce shall make such
appointment. Within fifteen (15) Days of the selection of the second arbitrator,
the two arbitrators thus appointed shall select a third arbitrator to act as
chairman of the tribunal. If the two Party-appointed arbitrators fail to agree
on a third arbitrator, the chairperson of the International Chamber of Commerce
shall make such appointment.   38.3   Applicable Law       Any arbitration
proceeding or award rendered hereunder and the validity, effect, and
interpretation of this clause 38.3 shall be governed by the laws of France.  
38.4   Waiver of appeal       The Parties hereby waive any rights of application
or appeal to the courts of France to the fullest extent permitted by law in
connection with any question of law arising in the course of the arbitration or
with respect to any award made.   38.5   Award final       The arbitrators shall
provide written reasons for their award. The award shall be final and binding
upon the Parties, and shall be the sole and exclusive remedy between the Parties
regarding any claims, counterclaims, issues, or accounting presented to the
arbitral tribunal. Judgment upon any award may be entered in any court having
jurisdiction.   38.6   Effect       This Agreement and the rights and
obligations of the Parties shall remain in full force and effect pending the
award in any arbitration proceeding hereunder and, except as expressly provided
in this Agreement, the Parties shall continue to perform their respective
obligations pursuant to this Agreement notwithstanding the existence of any
dispute, disagreement, or dispute resolution proceeding that may exist from time
to time.   38.7   Binding on transferee       This agreement to arbitrate shall
be binding upon the successors, permitted assigns, and any trustee or receiver
of each Party.

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SCHEDULE 1

AVAILABILITY CHARGE

1. Availability Charge prior to any Extension Period

The Availability Charge for Month m prior to any Extension Period shall be
calculated as follows:

ACm = (ACOMm + ACFC + CIL) - ARm

Where:

     
ACm
  Availability Charge for Month m in Euro
 
   
ACFC
  1,103,728.41 Euros
 
   
ACOMm
  Fixed Operation and Maintenance Charge Rate for Month m in Euro
 
   
ARm
  Availability Reduction
 
   
CIL
  The amount determined in accordance with clause 14.2(g) (if any)

The Fixed Operation and Maintenance Charge Rate for Month m shall be calculated
as follows:

ACOMm = 147,114.49 Euros + (198,071.01 Euros x INDEXLABm/INDEXLABb) +
(116,735.94 Euros x INDEXMTCm/INDEXMTCb) + (91,236.27 Euros x
INDEXGENm/INDEXGENb)

Where:

INDEXLAB = the Agreed Index for labour component of ACOMm;

INDEXMTC = the Agreed Index for maintenance and material component of ACOMm;

INDEXGEN = the Agreed Index for general component of ACOMm;

INDEXLABm = INDEXLAB in Month m;

INDEXLABb = INDEXLAB as at the date of this Agreement;

INDEXMTCm = INDEXMTC in Month m;

INDEXMTCb = INDEXMTC as at the date of this Agreement;

INDEXGENm = INDEXGEN in Month m; and

INDEXGENb = INDEXGEN as at the date of this Agreement,

however, if in any Hour of any Month m during the Contract Period, Enercal’s
ability to make available Electricity is affected by Force Majeure (as specified
in the Force Majeure Notice given in respect of that Force Majeure) (Force
Majeure Hour), then ACOM in that Month m will be reduced by the proportion being
the number of Force Majeure Hours in that Month divided by the total number of
Hours in that Month.

The Availability Reduction, ARm, shall be calculated as follows:

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ARm = ADm x (ACOMm + ACFC +CIL)/ Sum of Target Net Capacity for each Hour in
that Month m.

Where:

      ADm  
The sum of TMSh in respect of each Hour of Month m.
   
 
TMSh  
In respect of any Hour is (Target Net Capacity for that Hour - Actual Capacity
for that Hour) (which amount if negative will be equal to nil (0)).

2. Availability Charge during any Extension Period

The Availability Charge for Month m during any Extension Period shall be
calculated as follows:

ACm = ACOMm x 1.20 — AREPm + CIL

Where:

AREPm = ADm x (ACOMm x 1.20)/ Target Monthly Availability

However, if AREPm is nil in any Month during any Extension Period then ACm =
ACOMm x 1.25.

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SCHEDULE 2

FUEL CHARGE AND VARIABLE OPERATION AND MAINTENANCE CHARGE

SECTION A: FUEL CHARGE:

The Fuel Charge for Month m shall be calculated as follows:

$ECFCm = EDm x Cmcoal x HRCm + $ADJHFO

Where:

          EDm:   The sum of Electricity Delivered during each Hour in Month m
(as measured by the Metering System) in kWh        
 
Cmcoal:   is the cost of Coal + cost of shipping in month m in Dollars per
thousand Joules($/kJ).        
 
    Where:  
 
       
 
    Cmcoal = (Pmcoal + SRm )/SEmcoal        
 
    SEmcoal  
Specific energy of Coal in Month m expressed in kJ/tonnes, which value cannot be
less than 25 300 kJ/tonnes pursuant to schedule 5 (Coal Specification).
       
 
    Pmcoal  
Price of Coal for Month m in Dollars per tonne as defined in the relevant Coal
Purchase Agreement (as defined in the Utilities and Services Agreement)
corrected in accordance with section C of this schedule 2.
       
 
    SRm  
Shipping rate in Month m $US/tonne defined in the relevant Coal shipping
contract corrected in accordance with section C of this schedule 2.
       
 
HRCm   Heat Rate Coefficient (efficiency of converting thermal energy to
electrical energy) for Month m in kJ/kWh calculated as follows:        
 
    HRCm = HRCb x DF x PLAFm        
 
    Where:  
 
       
 
    HRCb  
Heat Rate Coefficient (efficiency) of the Facility at the date of this Agreement
being 11 191kJ/kWh
       
 
    DF  
Degradation Factor being the average loss of efficiency of the Facility over the
Contract Period calculated as 1.025 + CL
       
 
       
where:
       
 
       
CL is the coal loss from spillage, drainage runoff, airborne loss (not
efficiency) at the date of this Agreement being 1.005.

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              PLAFm  
Part Load Adjustment Factor in Month m is indicative of the efficiency of the
Facility when operated at less than 100% load, as set out in the table below.
       
 
    FL  
Partial Load Factor means in any Hour the actual total electricity output of the
Facility divided by 100MW and expressed as a percentage.

                    FL (%)     PLAFm      
100%
      1.0000      
95%<or= FL < 100%
      1.0052      
90% <or= FL < 95%
      1.0142      
85% <or= FL <90%
      1.0231      
80% <or= FL <85%
      1.0365      
75% <or= FL <80%
      1.0499      
70% <or= FL <75%
      1.0678      
65% <or= FL <70%
      1.0901      
60% <or= FL <65%
      1.1125      
55% <or= FL < 60%
      1.1393      
50% <or= FL <55%
      1.1687      
45% <or= FL <50%
      1.2019      

      $ADJHFO  
Fuel Charge Adjustment is, the costs associated with using heavy fuel oil (HFO)
instead of Coal. $ADJHFO will be set at zero (0) to the extent that the use of
HFO at the Facility exceeds 3286 tonnes per annum. However, if the Facility
consumption is less than 3286 tpa, all under-runs will be determined in
accordance with section B (Fuel Charge Adjustment).

SECTION B — FUEL CHARGE ADJUSTMENT

$ADJHFO = (QmHFO x EDm/Emtot) x (PmHFO - Pmcoal x (SEmcoal / SEmHFO))

Where:

              PmHFO  
Price of HFO in Month m according to the Utilities and Services Agreement in
Dollars per tonnes, corrected in accordance with part C.
       
 
    SEmHFO  
Specific energy of Heavy Fuel Oil (HFO) in Month m expressed in kJ/tonnes which
value can not be less than 41,570 kJ/tonnes pursuant to the Utilities and
Services Agreement (HFO Specification)).
       
 
    Emtot  
Total amount of electricity produced by Prony in Month m at the Facility in kWh.
       
 
    QmHFO  
Quantity of HFO consumed by Prony at the Facility in Month m in tonnes.

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SECTION C — INVENTORY CORRECTION FOR Pmcoal, SEmcoal, SRm SEmHFO, PmHFO

As both fuel storage facilities will be at any point in time, after receipt of
the second shipment of HFO or Coal as the case may be, comprised of an inventory
of differing values (Pmcoal, SEmcoal, SRm SEmHFO, PmHFO), Prony and Goro Nickel
will maintain a log to update these values at the agreed monthly billing date
according to the following example.

Example of Coal Cost using Weighted Average Calculation

                                      Tonnes                 Shipment   (1000’s)
    $/T   Month 1  
Opening balance
        —       —        
Monthly Purchases
  1     60     $ 35.00      
 
  2     45     $ 27.00      
 
                   
 
        105              
Total Available
        105     $ 31.57        
Monthly Consumption
        70     $ 31.57        
Balance
        35     $ 31.57     Month 2  
Opening balance
        35     $ 31.57        
Monthly Purchases
  3     60     $ 26.00      
 
  4     45     $ 35.00      
 
                   
 
        105              
Total Available
        140     $ 30.29        
Monthly Consumption
        90     $ 30.29      
 
                   
C/Bal
        50     $ 30.29     Month 3  
Opening balance
        50     $ 30.29        
Monthly Purchases
  5     50     $ 34.00      
 
  6     40     $ 37.00      
 
  7     35     $ 40.00      
 
                   
 
        125              
Total Available
        175     $ 34.82        
Monthly Consumption
        110     $ 34.82      
 
                   
C/Bal
        65     $ 34.82  

Others values (including SEmcoal) will be calculated in a similar manner to that
set out in the table above.

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SECTION D: Variable Operation and Maintenance Charge

The Variable Operation and Maintenance Charge for Month m shall be calculated as
follows:

ECOMm = ECOMRm x EDm

Where:

      ECOMm  
Variable Operation and Maintenance Charge for Month m in Euro
   
 
EDm  
The sum of the Electricity Delivered in each Hour during Month m (as measured by
the Metering Systems) in kWh
   
 
ECOMRm  
Variable Operation and Maintenance Charge Rate for Month m in Euro per kWh

The Variable Operation and Maintenance Charge Rate for Month m shall be
calculated as follows:

ECOMRm = 0.0004888 Euros x INDEXLABm/INDEXLABb + 0.00114 Euros x
INDEXMTCm/INDEXMTCb

Where:

INDEXLAB = the Agreed Index for labour component of ECOMRm;

INDEXMTC = the Agreed Index for maintenance and material component of ECOMRm;

INDEXLABm = INDEXLAB in Month m;

INDEXLABb = INDEXLAB as at the date of this Agreement;

INDEXMTCm = INDEXMTC in Month m;

INDEXMTCb = INDEXMTC as at the date of this Agreement

The parties agree that the numeric figures in relation to HRCb, CL and PLAFm
(the Moving Numbers) in this schedule 2 shall not be fixed on the date of this
Agreement and are subject to further revision in accordance with this paragraph.
Enercal will procure that Prony will perform relevant tests to determine the
actual value of the Moving Numbers, under conditions which are agreed with Goro
Nickel, as soon as practicable after the Start Date and intermittently until the
end of the period two years from the Start Date (the Fixing Date). The Parties
agree that the Moving Numbers shall be fixed on and shall not be subject to any
further changes by either Party at the Fixing Date.

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SCHEDULE 3

PART A

DELIVERY POINTS AND SWITCHROOM

[NOTE: DELIVERY POINTS AND SWITCHROOM PLANS NOT PROVIDED IN THIS VERSION]

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PART B

METERING SYSTEMS

[NOTE: METERING SYSTEMS PLANS NOT PROVIDED IN THIS VERSION]

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SCHEDULE 4

[NOT USED]

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SCHEDULE 5

COAL SPECIFICATION

Table 1: Proximate Analysis

                            Parameter     Units     Typical     Range    
The following Values can only be altered with the agreement of both Enercal and
Goro Nickel
                     
Total Moisture
    % ar     11.19     8.8 – 11.2    
Ash
    % ar     11.63     11.6 – 14.0    
Volatile Matter
    % ar     23.53     20.88 – 23.60    
Sulphur
    % ar           0.45 Max    
LHV
    kJ/kg     25,329     25,300 - 27,200    
 
                     
The following values are forecasted to meet Environmental limits. Enercal may
alter these as required.
                     
Cadmium and Compounds
    ppm Wt/Wt     1.20     400 Max    
Mercury and Compounds
    ppm Wt/Wt     0.04     0.45 Max    
Thallium
    ppm Wt/Wt     0.00     100 Max    
Cd + Hg + Tl
    ppm Wt/Wt                
Arsenic and Compounds
    ppm Wt/Wt     23.80     500 Max    
Selenium and Compounds
    ppm Wt/Wt     0.65     3.0 Max    
Tellurium
    ppm Wt/Wt     0.00     100 Max    
As + Se + Te
    ppm Wt/Wt                
Lead and Compounds
    ppm Wt/Wt     24.20     2,500 Max    
Antimony and Compounds
    ppm Wt/Wt     2.30     20 Max    
Chromium Total
    ppm Wt/Wt     31.60     200 Max    
Cobalt and Compounds
    ppm Wt/Wt     11.40     100 Max    
Copper and Compounds
    ppm Wt/Wt     1.20     20 Max    
Tin
    ppm Wt/Wt     1.20     20 Max    
Manganese and Compounds
    ppm Wt/Wt     53.40     300 Max    
Nickel
    ppm Wt/Wt     24.00     100 Max    
Vanadium
    ppm Wt/Wt     5.00     50 Max    
Zinc and Compounds
    ppm Wt/Wt     20.00     100 Max    
Sb+Cr+Co+Cu+Sn+Mn+Ni+V+Zn
    ppm Wt/Wt                

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ppm Wt/Wt = Part per Million by Weight in Coal as Delivered

Table 2: Physical Properties

(The following Values can only be altered with the agreement of both Enercal and
Goro Nickel)

                            Parameter     Units     Reference     Range    
Hardgrove Grindability Index
    —     47     40 – 75    
Top Size
    Mm           50 Max    
Part greater than 25mm
    %           15 Max    
Part less than 3mm
    %           20 Max    

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SCHEDULE 6

METER TESTING PROCEDURES

1.   METERING DATA   1.1   The Metering System will be comprised of several
components that shall each be to an international standard and providing a
measured accuracy of (including each voltage or current transformer which forms
part of the Metering System) plus or minus one-fifth of one per cent. (±0.2%).
Unless otherwise mutually agreed, the design standard shall be commensurate to
ANSI C 12.1-1995.       The metering data will be comprised of:

  (a)   signals from the Metering System required for establishing the
Electricity Delivered in any Hour, any Availability Penalty, any Availability
Credit and for determining any other payment or penalty amount under this
Agreement; and     (b)   separate, identical and electrically independent
signals from the Metering System to Enercal’s and Goro Nickel’s operations
centres.

2.   TESTING   2.1   The calibration of the Metering System will be checked and
verified to ensure that the accuracy remains within the specified limits.      
The method of calibration and frequency of tests will be agreed by the ESA
Coordinating Committee, based on knowledge of the performance and the design of
the installed Metering System and the manufacturers’ recommendations.      
Enercal will provide:

  (a)   certificates of accuracy to an international standard for the Metering
System it supplies; and     (b)   certificates of accuracy to a mutually agreed
international standard for the existing current and voltage transformers. If
replacement current or voltage transformers are required for the metering
locations, they will be supplied by Enercal, along with certificates of accuracy
to an international standard.

2.2   Testing of the Metering System shall be performed in-situ, using portable
equipment traceable to a mutually agreed international standard, without
interrupting the delivery of Electricity from the Enercal System to the Nickel
Mine.   2.3   Testing and calibration of the Metering System shall be carried
out by Enercal.   2.4   Testing and calibration of any Backup Metering System
shall be carried out by Goro Nickel.

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SCHEDULE 7

ELECTRICITY SPECIFICATION

The Electricity delivered to Goro Nickel under this Agreement shall comply with
the specifications set out in this schedule 7. Without prejudice to any
provision of the Multipartite Agreement, in the event that electricity delivered
to Goro Nickel under this Agreement does not comply with the specifications set
out in this schedule 7, such failure will be referred to the ESA Coordinating
Committee which will determine the appropriate actions to be undertaken by
Enercal to ensure that the failure is rectified and any further such failure is
prevented. For the avoidance of doubt, such a failure will not be a breach of a
material obligation under this Agreement for the purposes of clause 17.1(a)(iii)
(Events of Default).

1.   GORO NICKEL INTERCONNECTION AND GENERATORS   (a)   The Electricity
interconnection from the Delivery Points to the Nickel Mine will be by two
independent 33 kV feeders from the dual bus 33 kV switchboard in the Facility
Switchroom to the Goro Nickel 33kV switchboard as shown in part A of schedule 3
(Delivery Points and Switchroom).   (b)   The two feeders will each be rated for
1,200 Amp in order to accept the transfer of real (MW) and reactive (MVar)
Electricity associated with the Target Net Capacity to which Goro Nickel is
entitled.

Note: Enercal must procure that until such time that 33kV/33kV isolation
transformers are installed, the 33kV Facility interconnection to the EEC network
is only used for black start of the Facility or the Goro Nickel oil fired steam
and power plant (OFSPP) (when the 150kV link is lost).

2.   ELECTRICITY QUALITY   2.1   Voltage   (a)   Nominal Voltage: 33 kV (normal
operating voltage 34 kV)   (b)   Steady state (long term) voltage variation: +/-
4% from 34 kV   (c)   Transient voltage variation: +/- 10% (from 33 kV) for
periods of up to 60 seconds based on 33 kV   (d)   Short Term Voltage Dips:
Voltage dips of 10-100% to be limited to 300 half-cycles (3 sec). It is expected
that such voltage dips will not be more frequent than twice per year on average
and that single pole reclosing of the 150 kV line will limit the total loss of
Electricity from such occurrences to once every two years on average. These
frequencies are not guaranteed but are to be used as performance targets.
Enercal is to take remedial action to improve reliability of Electricity supply
in the event that these targets are significantly exceeded. Enercal must procure
that any exposed connection (e.g. overhead line) of the 33kV system at the
Facility to any system or network outside the Facility or Nickel Mine is through
a 33/33kV isolation transformer.   2.2   Frequency   (a)   Nominal Frequency:
50Hz

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(b)   Steady state (long term) frequency variation: +/- 1% (0.5Hz)   (c)  
Transient frequency variation: +/- 2% (1Hz)   2.3   Voltage Unbalance      
Voltage Unbalance: 2% (expressed as the ratio of negative to positive sequence
voltages).   2.4   Harmonics   (a)   Total Harmonic Voltage Distortion (THD),
evaluated for 2nd to 40th order components: 8% continuously with up to 12% for
15 seconds in any 150 second period. Individual harmonics should not exceed the
limits given in IEC 61000-3-6.   (b)   Goro Nickel must ensure that all
electrical equipment used in the Nickel Mine and connected to the Nickel Mine
electricity distribution system is designed and manufactured in accordance with
current good practice, in order to limit THD to acceptable levels.   (c)   If
the THD is exceeded at the Delivery Points resulting in adverse affects to
Prony, Goro Nickel or the Transmission System, appropriate modifications (which
may include the addition of harmonic filters) will be carried out by Goro Nickel
and/or Enercal to reduce the levels to within the THD, as follows:-

  •   where only one Party’s contribution exceeds 50% of the THD at the Delivery
Points, it will reduce its contribution until the adverse effects are
eliminated; or     •   where both Parties’ contributions exceed 50% of the
agreed level at the Delivery Points, both Parties will reduce their contribution
in proportion with their excess above 50% of the THD.

2.5   Power Factor       Goro Nickel acknowledges that Enercal will be relieved
from its requirement to deliver Electricity at any time, if at that time the
power factor of the Electricity delivered to Goro Nickel is less than 0.8.  
3.   FAULT LEVEL AND PROTECTION   (a)   Fault Level: The three phase short
circuit sub-transient fault current during a fault at the Delivery Points must
not exceed 31.5kA for one (1) second. In order to ensure this fault level is not
exceeded, Goro Nickel will not, and Enercal will procure that together with
Prony it will not, exceed individual short circuit fault level contributions of
12kA and 19.5kA respectively, without prior notification and agreement of the
other Party.   (b)   Fault duration: In order to maintain discrimination with
the downstream protection relays and clear fault within one (1) second, Enercal
will procure that high speed protection techniques incorporating logic blocking
schemes will be used for the Facility and similarly Goro Nickel will install
compatible systems in the Nickel Mine electricity distribution system. The
Parties acknowledge that engineering design coordination between Goro Nickel,
Enercal and Prony will be required to ensure the integrity of all electrical
systems and avoid tripping of the Facility, or Nickel Mine (inclusive of OFSPP).

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4.   SYSTEM STABILITY   (a)   For short term voltage deviations of 20% maximum
for less than 100ms, resulting from disturbances on the Transmission System or
any other transmission grid, (which should not have an adverse effect on the
Nickel Mine operation) Enercal must procure that the Facility is able to recover
without loss of Goro Nickel’s on-line plant.   (b)   For short term faults of
greater voltage deviation which may result in loss of a significant portion of
the Nickel Mine and which originate from outside the Nickel Mine the frequency
of occurrence shall be as defined in ‘Short Term Voltage Dips’ detailed above.
In the event of such faults, Enercal must procure that the Facility retains
stability by single pole reclosing of the 150- kV line or islanding of the
Facility to allow re-starting of the Nickel Mine without delay if it has
tripped. The target frequency for total loss of Electricity from such
occurrences is again defined in ‘Short Term Voltage Dips’ detailed above.  
(c)   Enercal must procure that Electricity voltage and frequency remain stable
and within the transient values nominated above for instantaneous load
rejections within the Nickel Mine of up to 15 MW. Maximum instantaneous load
increases within the Nickel Mine are expected to be generated from DOL (Direct
On Line) starting of motors up to 2.0 MW and resistance starting (or other
reduced current starting methods) of slip ring (or other types of) motors up to
6.0 MW. Again, Enercal must procure that Electricity voltage and frequency
remain stable and within the transient values under such load increases.   5.  
EARTHING   (a)   Enercal must procure that:

  (i)   the earthing system at the Facility is designed, constructed and
installed in accordance with Applicable Laws for such an installation;    
(ii)   touch voltages during fault conditions meet the design codes for the
earthing system at the Facility and are lower than safety curves given in the
NFC 15-100;     (iii)   a comprehensive equipotential bonding type of earthing
system is installed in the Facility; and     (iv)   a combined high voltage and
low voltage earthing system is installed for the Facility with maximum 1 Ohm
earth resistance.

(b)   Goro Nickel must ensure that:

  (i)   the earthing system at the Nickel Mine is designed, constructed and
installed in accordance with Applicable Laws for such an installation;    
(ii)   touch voltages during fault conditions meet the design codes for the
earthing system at the Nickel Mine and are lower than safety curves given in the
NFC 15-100;     (iii)   a comprehensive equipotential bonding type of earthing
system is installed in the Nickel Mine; and     (iv)   a combined high voltage
and low voltage earthing system is installed for the Nickel Mine with maximum 1
Ohm earth resistance.

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(c)   Goro Nickel will provide Enercal with data from an overall Nickel Mine
earth study to assist with design of the earthing system for the Facility. A
study of the lightning protection system calculated to an approved standard and
in accordance with the requirements of the overall site will be carried out by
Goro Nickel and the results shall be provided to Enercal. Enercal must procure
that aircraft warning lights to an approved standard including access for
maintenance shall be installed at the Facility if required by Applicable Laws.  
(d)   The Parties acknowledge that for safety reasons the earthing systems of
the Facility and Nickel Mine will be connected. Means will be provided to
disconnect the systems for testing or other exceptional purposes.   6.   LOSS OF
GENERATION   (a)   In the event of total loss of generation (zero (0) voltage on
the buses of both the Facility and Goro Nickel 33kV switchboards), both the
Facility and Nickel Mine will provide their own emergency electricity from
dedicated diesel generators.   (b)   Following a total loss of generation and
restoration of supply within 30 minutes from the 150 kV system or back feeding
of the EEC 33kV line, the maximum period for restoration of Target Net Capacity
to Goro Nickel by Enercal must not exceed three Hours.   (c)   In the event that
the loss of generation is for a period longer than 30 minutes then the target
times for restoration of the Target Net Capacity to Goro Nickel by Enercal shall
be proportionately increased until the period reaches 7 hours at which time it
shall be considered to be a cold start.   (d)   In a cold start condition,
following the receipt of external black start electricity (sufficient only for a
black start of the OFSPP), the target for the supply from the OFSPP will be 5MW
to the Facility (if unavailable from the 150kV system) within 5 hours and 10MW
to the Nickel Mine within 6 hours. The target for supply of Goro Nickel by
Enercal from the Facility will be 25MW within 6 hours and 50MW within 8 hours.  
(e)   Irrespective of the times stated above, operating procedures will be
developed by the ESA Coordinating Committee to guarantee the most expedient
restoration of Electricity, given the performance specifications of the critical
equipment within the Facility. These procedures will reflect the priority of
provision of Electricity to the Nickel Mine. Export or sale of Electricity to
other consumers by Enercal will not recommence until Goro Nickel’s requirements
for Electricity have been met (up to the Target Net Capacity).   7.   QUALITY
MEASUREMENTS       In order to confirm that these Electricity Specifications are
being achieved the PQM Systems shall comprise of a power quality meter (owned by
Goro Nickel) on the 33kV connection from the Facility to the Nickel Mine and one
or more power quality meters (owned directly or indirectly by Enercal) capable
of monitoring either 33kV bus on the Facility 33kV switchboard. The PQM Systems
will measure and record all the nominated quality criteria set out in this
Electricity Specification such as frequency, voltage, imbalance and harmonics.  
8.   ELECTRICITY QUALITY CONTROL   (a)   If it is determined that this
Electricity Specification is not being met due to poor electricity quality on
the 150kV system (and the quality is causing problems for the Nickel Mine), the
Nickel Mine and an operating 50MW coal fired generating unit shall be isolated
from the Transmission System and operate in “island” mode. The power quality
meter installed on the

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    33 kV connection from the Facility to the Nickel Mine would be used to
determine when an unacceptable electricity quality had been reached and would
activate a relay which would provide an alarm in the Facility control room. On
activation of this relay Enercal shall procure that Prony shall also be capable
of isolating the Nickel Mine as set out above.   (b)   Such an activation system
would initially be manual and would be dependent upon being able to determine
whether the source of Electricity quality disturbance was from the Transmission
System. If in the future, the ESA Coordinating Committee is satisfied that
automatic activation can be feasibly performed (ie without creating system
instability) and decides that it requires the activation system to be automatic,
then Enercal shall procure that it is made automatic. The values and times that
will be used to activate the isolation relay will be outside the Electricity
Specification values defined above but will be below the limits at which
problems are likely to occur in the Nickel Mine. The two systems will be
re-synchronised as soon as the Electricity from the Transmission System is
within the limits set out in this Electricity Specification. This condition will
be determined by the power quality meter on the 150 kV connection between the
Facility and the Transmission System.

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SCHEDULE 8

SCHEDULING PROCEDURES

1.   ANNUAL SCHEDULE   (a)   On and from three (3) Months prior to the earlier
of the Start Date and the Target Start Date, and thereafter six (6) Months prior
to the commencement of each year, Goro Nickel must send Enercal a notification
(the Goro Nickel Schedule) which shall contain:

  (i)   a nomination of certain of those Hours during the following year where
Goro Nickel requires an availability of less than 50,000kW (Reduced Capacity
Hour) and the amount of Electricity which Goro Nickel requires to be made
available in each Reduced Capacity Hour;     (ii)   a total of at least
26,280,000kWh of Reduced Capacity;     (iii)   an indication of Goro Nickel’s
expected requirements for Extra Electricity for each Hour in that following
year;     (iv)   an indication of when Goro Nickel expects that Surrendered
Electricity could be available to Enercal should Enercal require Surrendered
Electricity in that following year; and     (v)   Goro Nickel’s suggested prices
per kWh of Availability Credit Electricity during that following year.

    If Goro Nickel would be required to prepare a Goro Nickel Schedule prior to
the Contract Period at any time between 1 April and 31 September in any year,
the Goro Nickel Schedule prepared at that time will contain the information set
out above in respect of the period from earlier of the Start Date or the Target
Start Date until the end of the year following the year in which the Start Date
or the Target Start Date falls (as the case may be). In that circumstance, the
amount in paragraph 1(a)(ii) included in that Goro Nickel Schedule will be
increased proportionally to reflect the period from the earlier of the Start
Date and the Target Start Date and the end of the following year.   (b)   Within
ten (10) Business Days of receipt of the Goro Nickel Schedule in respect of a
year, Enercal shall send Goro Nickel a notification (the Enercal Schedule) which
shall contain:

  (i)   Enercal’s notifications of each Planned Outage for that year;     (ii)  
Enercal’s notifications of Expected Actual Capacity for each Hour in that year
(taking into account each Planned Outage for that year);     (iii)   any request
for Surrendered Electricity in any Hour of that year; and     (iv)   Enercal’s
suggested price per kWh of Extra Electricity delivered during that year from
each potential Extra Electricity generation source.

(c)   Within two (2) Weeks after Enercal has delivered the Enercal Schedule in
respect of a year, the Parties shall meet together to discuss the details
contained in the Goro Nickel Schedule and the Enercal Schedule and within two
Weeks following such discussions (which discussions shall not last longer than
two Weeks), Goro Nickel must:

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  (i)   give notice to Enercal of the actual Reduced Capacity Hours for that
year and the amount of Electricity which Goro Nickel requires to be made
available by Enercal in each Reduced Capacity Hour during that year (provided
that the sum of the Reduced Capacity for each such Reduced Capacity Hour must
equal at least 26,280,000kWh); and     (ii)   give notice to Enercal of the
prices per kWh of Availability Credit Electricity during the course of that year
(Unused Capacity Price),

    and Enercal must give notice to Goro Nickel of the price per kWh of Extra
Electricity during the course of that year from each potential Extra Electricity
generation source (each an Extra Electricity Price).   (d)   Where Goro Nickel
agrees:

  (i)   to provide any Surrendered Electricity requested by Enercal; and    
(ii)   a price for that Surrendered Electricity,

    in the discussions held in accordance with paragraph 2(a) below or otherwise
in respect of any year then Enercal will be obliged to pay Goro Nickel the
agreed price for that Surrendered Electricity. Within thirty (30) Days after
receipt of an invoice for Surrendered Electricity agreed in respect of any
Month, Enercal must pay Goro Nickel the agreed price for all such Surrendered
Electricity.   2.   MONTHLY AND WEEKLY UPDATES   (a)   Goro Nickel shall, seven
(7) days prior to the earlier of the Start Date and the Target Start Date, and
thereafter seven (7) days prior to the commencement of each Month, notify
Enercal of:

  (i)   its expected Scheduled Net Capacity for each Hour of the following
Month; and     (ii)   any amendment to any requirement for Extra Electricity for
each Hour of the following Month as set out in the Goro Nickel Schedule for that
Month.

(b)   Goro Nickel shall, seven (7) days prior to the earlier of the Start Date
and the Target Start Date, (Anticipated Start Date) and thereafter seven
(7) days prior to the commencement of each Week, Goro Nickel shall notify
Enercal of:

  (i)   any amendments to the previously notified expected Scheduled Net
Capacity for each Hour of the following Week; and     (ii)   any amendment to
any requirement for Extra Electricity for each Hour of the following Week as set
out in the Goro Nickel Schedule for that Week.

(c)   Within two (2) Business Days of receipt of a notice under paragraph 2(a)
or 2(b) above, Enercal shall notify Goro Nickel of any amendment to its
notification of Expected Actual Capacity for any Hour of such following Month or
Week (as the case may be) as set out in the Goro Nickel Schedule for that Month
or Week as the case may be.       For the avoidance of doubt, the Target Net
Capacity will not be increased by any notification given in accordance with this
paragraph 2 unless mutually agreed by the Parties.

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3.   DAILY NOTIFICATIONS   (a)   By 10:00am on each Day, Goro Nickel shall
notify Enercal of its expected Scheduled Net Capacity for each Hour of the
following Day and any amendment to any requirement for Extra Electricity for
each Hour of the following Day as set out in the Goro Nickel Schedule for that
Day.   (b)   By 11.00 a.m. on each Day, Enercal shall notify Goro Nickel:

  (i)   whether or not it anticipates any operational problem with providing any
Extra Electricity in any Hour requested by Goro Nickel in respect of the
following Day; and     (ii)   of the Expected Actual Capacity for each Hour of
such following Day.

4.   SCHEDULED NET CAPACITY   (a)   The Scheduled Net Capacity in respect of any
Hour may not exceed the Target Net Capacity for that Hour.   (b)   The total sum
of the Scheduled Net Capacity and the Surrendered Electricity for each Hour in
any year during the Contract Period may not exceed 394,200,000 kWh.   (c)   The
limitations in paragraphs 4(a) and 4(b) above are the Contract Limits.   (d)  
For the avoidance of doubt:

  (i)   if the Contract Period spans any partial year, the Contract Limit in
paragraph 4(b) above and the amount set out in paragraph 1(a)(ii) will be
reduced proportionally in respect of that year; and     (ii)   in any leap year
during the Contract Period the Contract Limit in paragraph 4(b) above will be
increased by 1,080,000kWh in respect of that year and the amount set out in
paragraph 1(a)(ii) above will be increased to 26,352,000kWh.

5.   FORCED OUTAGE NOTIFICATIONS       Enercal shall notify Goro Nickel
immediately if it anticipates any operational problem with providing either the
lower of the Target Net Capacity and the Expected Actual Capacity notified in
respect of any Hour pursuant to paragraph 2 above or any Extra Electricity in
respect of any Hour in the following Day.   6.   SHORTFALL   (a)   If at any
time the notification of Expected Actual Capacity for any Hour is less than the
expected notification of Scheduled Net Capacity for that Hour, then the Parties
shall investigate whether:

  (i)   Enercal is able to adjust demand, supply and maintenance in the Enercal
System so as to make good any shortfall; or     (ii)   Goro Nickel could either
make good the shortfall from its own generation sources or could avoid the
shortfall by rearranging (in a manner acceptable to Goro Nickel) its planned
production and maintenance programmes at the Nickel Mine.

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(b)   If, at any time:

  (i)   the Parties agree that Enercal will make good an expected shortfall of
Scheduled Net Capacity in respect of any Hour, it shall do so; and     (ii)  
the Parties agree that, in respect of any Hour, Goro Nickel will make good the
shortfall from its own generation sources (at a price agreed by Enercal) or will
avoid the shortfall by rearranging (in a manner acceptable to Goro Nickel) its
planned production and maintenance programmes at the Nickel Mine, then:

  (A)   Goro Nickel shall do so and to the extent that Goro Nickel agrees to do
so, Goro Nickel will reduce its expected Scheduled Net Capacity in that Hour by
the amount of Electricity which Goro Nickel will make available from its own
generation sources (and will reflect that amount in the Scheduled Net Capacity
in the relevant Hour) or will not require as a result of its arranging its
planned production and maintenance programmes at the Nickel Mine; and     (B)  
where during the Contract Period only, Goro Nickel agrees to make good the
shortfall from its own generation sources and Enercal has agreed a price,
Enercal shall, within 30 days of demand, reimburse Goro Nickel for the costs (at
the agreed price) that Goro Nickel incurs in using its own generation sources.

7.   EXTRA ELECTRICITY       If Enercal agrees that it can provide any amount of
Extra Electricity in any period, it shall use all reasonable endeavours do so.

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SCHEDULE 9

PENALTIES

PART A — AVAILABILITY PENALTY

(a)   The Availability Penalty in Month m prior to any Extension Period will be
calculated as follows:       APm = (Target Monthly Availability - (Actual
Monthly Availability + Remaining Outage Allowance)) x 0.381 Euro (as such amount
is adjusted from the date of this Agreement in accordance with the Agreed
Index).   (b)   The Availability Penalty in Month m during any Extension Period
will be calculated as follows:       APm = (Target Monthly Availability -
(Actual Monthly Availability + Remaining Outage Allowance)) x 0.381 Euro (as
such amount is adjusted from the date of this Agreement in accordance with the
Agreed Index),       provided that if any payment of an Availability Penalty,
APm, in respect of a Month during any Extension Period would cause the sum of
each Availability Penalty, APm, paid during that Extension Period to exceed the
sum of each Availability Charge paid during that Extension Period, then no
Availability Penalty, APm, will be payable in respect of that Month.

Where APm: The amount of the Availability Penalty in Month m in Euro (which
amount if negative will be equal to nil (0)).

The Remaining Outage Allowance in relation to any Month is 2,900,000kWh less the
aggregate of all Outages that have already occurred in previous Months in that
year. For the avoidance of doubt, if the Contract Period spans any partial year,
the amount of 2,900,000kWh set out in this paragraph will be reduced
proportionally in respect of that year. This amount of 2,900,000kWh shall be
increased to 2,907,945kWh in any leap year during the Contract Period..

If Enercal notifies its intention to carry out any major Planned Outage in any
year during the Contract Period in accordance with the Scheduling Procedures,
the amount of 2,900,000kWh in the immediately preceding paragraph will be
replaced with an amount of 4,100,000kWh in the year in respect of which such
Planned Outage is notified. Enercal may only notify a major Planned Outage twice
in each six (6) year period during the Contract Period, the first such six
(6) year period commencing on the Start Date. In the first year of the Contract
Period, the amount of 2,900,000kWh in the immediately preceding paragraph will
be replaced with an amount of 5,800,000kWh. The Parties agree that the ESA
Coordinating Committee may agree to extend the six (6) year period referred to
in this paragraph to a period of up to eight (8) years to reflect the actual
major Planned Outage requirements of Enercal.

For the avoidance of doubt, any balance of the Remaining Outage Allowance
remaining at the end of any year will not be carried forward to the next year.

PART B — START DATE LD AMOUNT

The Start Date LD Amount payable on any Day d, SDLDAd, will be calculated as
follows:

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SDLDAd = Amount x (1 - ((Sum of Actual Capacity for each Hour in that Day)/(Sum
of Target Net Capacity for each Hour in that Day)).

Where:

      Amount:  
If the Day, d, is a Day:
   
 
(i)  
between the Target Start Date and the Step-Up Date (both dates inclusive), is
€20,000; and
   
 
(ii)  
after the Step-Up Date, is €35,000;

PROVIDED THAT, if, on any such Day, the Start Date LD Amount is payable solely
due to delays in completion of the civil works relating to the second generating
unit of the Facility, Amount shall be €10,922 on such Day (instead of the
figures in (i) and (ii) above). The Step-Up Date means the date on which Prony
is entitled to receive a higher level of delay liquidated damages from its
contractors under the EPC Contracts.

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SCHEDULE 10

INSURANCE

(a)   Workers Compensation coverage, or similar insurance as per Applicable Laws
for all employees working for those companies related to or existing within the
Enercal System;

(b)   Comprehensive Third Party Liability Insurance insuring against bodily
injury, death and property damage to minimum policy limits of ten million Dollar
(US$10,000,000.00) per occurrence.

(c)   Automobile Liability Insurance, insuring against liabilities arising from
bodily injury, death, property damage, with policy limits as required by
Applicable Laws for any and all motor vehicles, owned, leased, rented, operated
or used by or on behalf of parties owning, leasing and/or operating any part of
the Enercal System and/or any contractor, subcontractor or agents for the
Enercal System and/or parties related thereto;

(d)   “All Risks” Property/Boiler & Machinery and Business Interruption
insurance insuring against direct physical loss or damage to the Enercal System
to its full replacement value, including but not limited to the coal conveying
system from the coal stockpile to the electricity generating facility and the
related business interruption arising there from, including but not limited to
extra expense and expediting costs, caused by all risks, including but not
limited to machinery and equipment breakdown, with policy limits adequate to
insure the Enercal System property of every description to full replacement cost
and Enercal System business interruption on a gross profits basis with an
indemnity period of at least 12 months;

(e)   “All Risks” Cargo Insurance, insuring against direct physical loss or
damage to all incoming cargo being transported for use by the Enercal System,
including but not limited to shipments of coal and equipment.

(f)   Charterer’s Liability, insuring against liability arising from the
chartering by any of the Enercal System companies of any marine vessel, with
minimum policy limits of at least ten million Dollars (US$10,000,000) per
Occurrence or the amount required by the vessel owner.

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SCHEDULE 11

EARLY ELECTRICITY PRICE

The Early Electricity Price per kWh for any Early Electricity delivered to Goro
Nickel will be determined as follows:

For Early Electricity sold to Enercal under the PPA- The price per kWh paid by
Enercal to Prony in respect of that Early Electricity as sold by Prony to
Enercal under the PPA and delivered to Goro Nickel under this Agreement.

For other Early Electricity — The price per kWh set by Enercal when it confirms
that such Early Electricity is available for delivery to Goro Nickel.

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SCHEDULE 12

AC PRESENT VALUE

AC Present Value means

(FORMULA) [t15872t1587202.gif]

Where:

PVRate = 0.8127% (which amount, for the avoidance of doubt, is equivalent to an
annual rate of ten and one fifth per cent. (10.2%)).

RMonths = The number of months between the Early Termination Date and the 25th
anniversary of the Start Date.

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In witness whereof this Agreement has been executed by the Parties as a Deed on
the date appearing on page 1.

     
EXECUTED AS A DEED by
ENERCAL
Acting by: Jean-Claude Hirel
  )
)
)

Director /s/ Jean-Claude Hirel
 

   

  Director/Secretary
 
   
EXECUTED AS A DEED by
GORO NICKEL
(acting through and on behalf of its
New Caledonian branch
Acting by: Yves Roussel
  )
)
)
)
)

Director /s/ Yves Roussel
 

   

  Director/Secretary

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