Exhibit 10.I

ALUMINIUM PROJECT FRAMEWORK SHAREHOLDERS’ AGREEMENT

between

SAUDI ARABIAN MINING COMPANY (MA’ADEN)

and

ALCOA INC.

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CONTENTS

 

Clauses

     

Pages

1.   Definitions and Interpretation   6   1.1   Definitions   6   1.2  
Interpretation   17   1.3   Third Party Rights   17 2.   Effective Date; Term of
the Agreement; Parent Company Guarantee   17   2.1   Effective Date   17   2.2  
Term of the Agreement   17   2.3   Parent Company Guarantee   18 3.  
Development Committee and Establishment of a particular Company   18   3.1  
Development Committee   18   3.2   Project Costs and Pre-Financing Budget   18  
3.3   Project Milestones   18   3.4   Establishment of each Company   19   3.5  
Details of each Company   20   3.6   Purpose   20 4.   Share Capital, Funding by
Shareholders and Financing Completion Date   21   4.1   Share Capital as of
Incorporation   21   4.2   Required Shareholder Funding   22   4.3   Shareholder
Loans   22   4.4   Form and Manner of Funding by Shareholders   23   4.5  
Default Commission Rate   23   4.6   Limitations and Shareholder Funding   24  
4.7   Pledge   24   4.8   Adherence Agreement   24   4.9   Financing Completion
Date   24 5.   Responsibilities of the Parties   25   5.1   Roles of the Parties
  25   5.2   Role of Ma’aden   25   5.3   Role of Alcoa   25   5.4   Aluminium
Offtake   25   5.5   Support for Downstream Industry and Priority to the
Domestic Market   26   5.6   Sales Agency Arrangements for Sales in the Kingdom
  26   5.7   Sales Agency Arrangements for Sales Outside the Kingdom   27   5.8
  Alumina Supply Arrangements and Excess Alumina   27   5.9   Capacity
Expansions   27   5.10   Break-Off Projects   28   5.11   Value Added Projects  
29   5.12   Responsibilities under the Gas Allocation Letter   30   5.13  
Provision of Information by Parties and the Companies   31 6.   Transfer of
Existing Project Assets; Project Agreements   31   6.1   Transfer of Ma’aden
Existing Project Assets   31   6.2   Transfer of Alcoa Existing Project Assets  
32   6.3   Project Agreements signed post-Effective Date but before Company
Formation   32 7.   Shareholders’ Meetings   33   7.1   Shareholders’ Meetings  
33   7.2   Supermajority Items   33   7.3   Language   34 8.   Board of Managers
  34   8.1   Appointment of Managers to each Company   34   8.2   Removal of
Managers   35   8.3   Appointment of Senior Officers to each Company; Removal  
35

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  8.4   Meetings of the Board of Managers of each Company   36   8.5   Voting
Thresholds   37   8.6   Resolutions   38   8.7   Information   38   8.8   Duties
of Managers   38   8.9   Company Policies   38   8.10   Project Steering
Committee   39 9.   Deadlock   39   9.1   Deadlock Arising   39   9.2   Deadlock
Referral   39   9.3   Sole Remedies   40 10.   Senior Debt Financing of the
Project   41   10.1   Support For Financing Plan   41   10.2   Several
Obligations   41   10.3   No Further Liability   41 11.   Distributions Policy;
Taxes   41   11.1   Distributions Policy   41   11.2   Local Community Projects;
Research and Development Programme   42   11.3   Tax and Zakat   43 12.  
Accounting System, Books and Budgets   43   12.1   Accounting System and
Standards   43   12.2   Language of Reporting to the Shareholders   43   12.3  
Financial Statements   43   12.4   Books and Audit Rights   44   12.5  
Statutory Obligations   44   12.6   Auditors   44   12.7   Rights of Managers
not Limited   45   12.8   Annual and Special Budgets   45   12.9   Emergency
Funding   46 13.   Entry Payment, Pre-Incorporation Costs and Transfer of
Pre-Incorporation Materials   46   13.1   Payment of Entry Payment and
Pre-Incorporation Costs   46   13.2   Reimbursement of Pre-Incorporation Costs  
47 14.   Events of Default and Consequences   47   14.1   Events of Default   47
  14.2   Consequences of Events of Default   48   14.3   Transfer Upon Event of
Default of Alcoa   48   14.4   Additional Consequences of a Funding Default   50
  14.5   Ma’aden as the Defaulting Party   52   14.6   Default Prior to
Incorporation of any Company   53   14.7   Other Remedies   53 15.   Failure to
Achieve Financial Completion Date for Phase 1 by the Financing Longstop Date  
54   15.1   Compensation on Buy-Out   54   15.2   Transfer on Financing Longstop
Date   55 16.   Termination and Expiry   56   16.1   Full Termination and Expiry
  56   16.2   Partial Termination   56   16.3   Consequences of Termination at
the Expiry of the Term   56   16.4   Consequences following Termination   56  
16.5   Survival and Rights Unaffected   57 17.   Sale or Transfer of Shares,
Pledge   57   17.1   General Prohibition   57   17.2   Transfers to Affiliates  
58   17.3   Permitted Transfers   58   17.4   Transfers of Shares   58   17.5  
Notice of Offers   59

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  17.6   Notice of Right to Match the Offer   59   17.7   Right of Remaining
Party to Match the Offer   59   17.8   Transfer Requirements   59   17.9  
Completion of Transfer   60   17.10   General   60   17.11   Further Assurances;
Sole Shareholder   60 18.   Valuations   61   18.1   Fair Market Value   61  
18.2   Valuation Panel   61   18.3   Submission of Valuation   61   18.4  
Valuation Approach   61 19.   Assignment   62 20.   Warranties   62 21.  
Governing Law, Dispute Resolution and Language   63   21.1   Governing Law   63
  21.2   Reference to Senior Management   63   21.3   Dispute Resolution   63  
21.4   Continuing Obligations   63   21.5   Jurisdiction   64   21.6   Process
Agent   64   21.7   Language   64 22.   Confidentiality and Public Announcements
  65   22.1   Confidentiality   65   22.2   Disclosure of Information by
Managers to Shareholders and Parties   66   22.3   Announcements   66   22.4  
Survival   66 23.   Notices   66   23.1   Notices   66   23.2   Effect   67 24.
  Further Assurances   67   24.1   Undertakings   67   24.2   Further Assurances
  68   24.3   Business Conduct   68 25.   Competing Businesses   68   25.1  
Acknowledgement   68   25.2   No Obligation to Offer   68   25.3   Competing
Projects Following Termination   69 26.   General Provisions   69   26.1  
Severability   69   26.2   Waiver   69   26.3   Compliance with Law and Permits
  69   26.4   Intellectual Property   69   26.5   Entire Agreement   71   26.6  
Improper Inducements   71   26.7   Language   71   26.8   Amendments   71   26.9
  No Partnership   71   26.10   Priority of Documents   72   26.11   Waiver of
Immunity   72   26.12   No Liability for Consequential Losses, etc.   72

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Schedule SCHEDULE 1   Parent Company Guarantee   74 SCHEDULE 2   Articles of
Association of the Companies   80 SCHEDULE 3   Pre-Incorporation Costs   107
SCHEDULE 4   Gas Allocation Letter   108 SCHEDULE 5   Adherence Agreement   117
SCHEDULE 6   Cast House Users’ Agreement   119 SCHEDULE 7   Description of the
Ras Az ZawrComplex   128 SCHEDULE 8   Description of the Mine   131 SCHEDULE 9  
Project Agreements   133 SCHEDULE 10   Project Economics   140   Part 1 -
Estimate of Project Costs   140   Part 2 - Pre-Financing Budget   142   Part 3 -
Project Model   142 SCHEDULE 11   Ma’aden Existing Project Assets   144 SCHEDULE
12   Alcoa Existing Project Assets   145 SCHEDULE 13   Pre-Incorporation
Development Committee, Project Account and Steering Committees   146   Part 1 -
Development Committee Procedures   146   Part 2 - Payment Mechanism   152   Part
3 - Project Organisation (graphic depiction)   153 SCHEDULE 14   Alcoa Services
  170   Part 1 - Alcoa Services   170   Part 2 - Technology Licenses and Support
Services   175 SCHEDULE 15   Project Milestones   177

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ALUMINIUM PROJECT FRAMEWORK AGREEMENT

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

 

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

 

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

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

RECITALS:

 

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

 

(B) WHEREAS Ma’aden and Alcoa entered into a Memorandum of Understanding dated
15 July 2009 (the “MOU”) for the implementation of the Project.

 

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

 

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

 

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

 

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

 

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

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

 

1. Definitions and Interpretation

 

1.1 Definitions

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

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

 

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

 

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

 

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

 

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

 

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

 

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

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

“Additional Pre-Incorporation Costs” shall bear the meaning given in Clause
13.1(a);

“Additional Term” shall bear the meaning set out in Clause 2.2(b);

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

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

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

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

“Agreed Pre-Incorporation Costs” shall bear the meaning given in Clause 13.1(a);

“Agreement” means this Framework Agreement;

“Alcoa” has the meaning set out in the parties clause;

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

“Alcoa LOC” shall bear the meaning given in Clause 5.12(c);

“Alumina” means alumina produced by the Refinery as described in Clause
3.6(b)(ii);

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Calculation Date” shall bear the meaning set out in Clause 13.1(a);

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

 

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

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

“Chairman” means the chairman of the relevant Board of Managers;

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

“Commercial Production Date” means the later of, (a) in respect of the Mine, the
Refinery and the Smelter, the last day of the period of the first three
(3) months of continuous and stable operations of each of the Mine, the Refinery
and the Smelter at not less than ninety percent (90%) capacity, as determined by
the Parties on written advice from each relevant Board of Managers; and (b) in
respect of the Rolling Mill, after all major pieces of equipment and all
instrumentation and systems related to process and quality control successfully
complete acceptance testing, the date at which the first customer has given
acceptance of qualification for supply of beverage can stock, provided that for
the purpose of Clauses 8.5(b)(iv), 12.3(d)(iii) and 18.4(c) it shall mean the
above date applicable to the relevant Company;

“Commercial Register” means the commercial register at the Ministry;

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

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

 

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

 

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

 

  (3) if none or only one of the banks referred to in paragraph (2) above are
offering rates for deposits on the terms referred to in that paragraph, the rate
per annum quoted by such bank as the Party who does not owe such commission in
consultation with the Party that owes such commission may select from time to
time at which deposits in US Dollars for one month are being offered by such
bank to prime banks in the London interbank market at or about 11.00 a.m.
(London time) on the first London Banking Day of each month;

“Commitment Date” shall bear the meaning set out in Clause 3.3(b);

“Companies” and “Company” shall each bear the meaning set out in Recital D;

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

 

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

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

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

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

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

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

“Cure Period” shall bear the meaning set out in Clause 14.4(e)(ii);

“Deadlock” shall bear the meaning set out in Clause 9.1(a);

“Deadlock Committee” shall bear the meaning set out in Clause 9.2(b)(i);

“Deadlock Referral Notice” shall bear the meaning set out in Clause 9.2(a);

“Deadlock Resolution Procedure” shall bear the meaning set out in Clause 9.2(b);

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

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

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

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

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

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

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

 

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

“DZIT” means the Department of Zakat and Income Tax of the Kingdom;

“EBIT” means earnings before interest and taxes;

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

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

“Entry Payment” shall bear the meaning set out in Clause 13.1(b);

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

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

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

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

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

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

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

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

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

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

“Financing Longstop Date” means 31 December 2010 being the date by which the
Parties require the Financing Completion Date for Phase 1 to have occurred as
may be extended in accordance with Clause 15.1(a);

 

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

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

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

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

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

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

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

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

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

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

“IFRS” shall bear the meaning set out in Clause 12.1;

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

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

 

12

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“IP Information” shall bear the meaning set out in Clause 26.4(d);

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

“Kingdom” means the Kingdom of Saudi Arabia;

“KSA Controlled Transferee” shall bear the meaning set out in Clause 17.3(a);

“LME” means the London Metals Exchange;

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

“Ma’aden” has the meaning set out in the parties clause;

“Ma’aden Existing Project Assets” shall bear the meaning set out in Clause
6.1(a);

“Ma’aden LOC” shall bear the meaning given in Clause 5.12(a);

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

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

“Material Breach” shall bear the meaning set out in Clause 14.1(d);

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

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

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

“Ministry” means the Ministry of Commerce and Industry of the Kingdom;

“Ministry of Petroleum” means the Ministry of Petroleum and Mineral Resources of
the Kingdom;

“MOU” shall bear the meaning set out in Recital B;

“Non-Defaulting Party” means the Party who is not the Defaulting Party;

“Notice of the Right to Match the Offer” shall bear the meaning set out in
Clause 17.6;

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

“Offer” shall bear the meaning set out in Clause 17.4;

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

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

 

13

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

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

“Phase 1” means (following the Gate 3 Review) the design, construction and
operation of the Smelter and the Rolling Mill;

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

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

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

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

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

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

“Project” shall bear the meaning set out in Recital A;

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

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

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

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

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

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

 

14

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“Proposed Resolution” shall bear the meaning set out in Clause 9.1(a);

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

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

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

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

“Right to Match the Offer Period” shall bear the meaning set out in Clause
17.7(a);

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

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

“SAGIA” means the Saudi Arabian General Investment Authority;

“Saudi Riyal” or “SR” means the lawful currency of the Kingdom;

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

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

“Senior Debt” means the financing provided by the Senior Lenders for the
Project;

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

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

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

“Share” means any share of SR10,000 each in the capital of any Company, and
“Shareholding” shall be construed accordingly;

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

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

“Shared Services Agreement” shall have the meaning set out in Clause 5.10(b);

 

15

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

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

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

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

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

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

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

“Smelting Company” shall bear the meaning set out in Clause 3.5 (c);

“SOCPA” shall bear the meaning set out in Clause 12.1;

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

“SWCC” means the Saline Water Conversion Corporation in the Kingdom;

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

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

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

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

“Value Added Project” means any capital investment project to be implemented
after the date of this Agreement and which is intended to be located within the
Kingdom which relates to (a) downstream add-on products which could be produced
using outputs generated by the Project (for the avoidance of doubt, not
including the Rolling Mill or any Expansions thereto) or (b) upstream inputs
used in the Project (for the avoidance of doubt, not including the Refinery or
any Expansions thereto);

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

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

 

16

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1.2 Interpretation

In this Agreement:

 

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

 

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

 

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

 

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

 

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

 

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

 

  (g) The word “include” and its derivatives shall be deemed to include the
proviso that it is “without limitation”.

 

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

 

1.3 Third Party Rights

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

 

2. Effective Date; Term of the Agreement; Parent Company Guarantee

 

2.1 Effective Date

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

 

2.2 Term of the Agreement

 

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

 

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

 

  (c) The Parties may agree to extend the term of this Agreement and the Joint
Venture beyond the end of the Additional Term, by successive ten (10) year
periods, by mutual agreement of the Shareholders at least five (5) years prior
to expiry of the then current term

 

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  (d) If the Parties are unable to agree on an extension of the term of this
Agreement and the Joint Venture pursuant to paragraph (c) above, prior to a
liquidation of the Companies pursuant to the provisions of Clause 16.3, the
Parties will seek to negotiate a purchase by one Party of the other Party’s
Transferable Interests at a Fair Market Value pursuant to the procedures, and
consistent with the valuation principles, set forth in Clause 18.

 

2.3 Parent Company Guarantee

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

 

3. Development Committee and Establishment of a particular Company

 

3.1 Development Committee

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

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

 

3.2 Project Costs and Pre-Financing Budget

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

 

  (i) the Estimate of Project Costs;

 

  (ii) the Project Model; and

 

  (iii) the Pre-Financing Budget.

 

3.3 Project Milestones

 

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

 

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

 

  (ii) the Base Case Model for each Phase;

 

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

 

  (iv) the material Project Agreements as specified in Schedule 15.

 

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

 

  (c) In the event that the Senior Lenders Commitment Letters and the key
Construction Agreements (as aforesaid) have not been signed by the Commitment
Date, the Parties will liaise with the Ministry of Petroleum to seek appropriate
extensions of time or other relief under the Gas Allocation Letter and the
Parties will continue to use all their respective best efforts to progress the
Senior Lenders Commitment Letters and the key Construction Agreements so that
they may be signed by the respective parties as soon as practicable following
the Commitment Date. In the event that the Gas Allocation Letter is terminated
or the gas allocation is withdrawn by reason of any failure to achieve the
signing of the Senior Lenders Commitment Letters or the relevant key
Construction Agreements by the Commitment Date, or for any other reason, then
this Agreement will terminate in accordance with Clause 16.1(e) and neither
Party shall have any liability to the other (including in respect of the
reimbursement of Pre-Incorporation Costs or Paid In Capital or Shareholder Loans
in respect of any Company) arising from any such termination.

 

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

 

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

 

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

 

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

 

3.4 Establishment of each Company

 

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

 

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

 

  (c)

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

 

19

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

 

3.5 Details of each Company

The Parties acknowledge and agree that:

 

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

 

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

 

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

 

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

 

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

 

3.6 Purpose

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4. Share Capital, Funding by Shareholders and Financing Completion Date

 

4.1 Share Capital as of Incorporation

 

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

 

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

 

Shareholder

  

Shareholder

Percentage

  

Number of Shares

  

Paid In Capital

Ma’aden

   60%    306,000    SR 3,060,000,000

Alcoa

   40%    204,000    SR 2,040,000,000

TOTAL

   100%    510,000    SR 5,100,000,000

 

  (ii) In the case of the Smelting Company:

 

Shareholder

  

Shareholder Percentage

  

Number of Shares

  

Paid In Capital

Ma’aden    60%    459,000    SR 4,590,000,000 Alcoa    40%    306,000    SR
3,060,000,000 TOTAL    100%    765,000    SR 7,650,000,000

 

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  (iii) In the case of the Rolling Company:

 

Shareholder

  

Shareholder Percentage

  

Number of Shares

  

Paid In Capital

Ma’aden

   60%    234,000    SR 2,340,000,000

Alcoa

   40%    156,000    SR 1,560,000,000

TOTAL

   100%    390,000    SR 3,900,000,000

 

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

 

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

 

4.2 Required Shareholder Funding

 

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

 

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

 

4.3 Shareholder Loans

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

 

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4.4 Form and Manner of Funding by Shareholders

 

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

 

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

 

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

 

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

 

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

 

  (v) specify the Funding Deadline; and

 

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

 

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

 

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

 

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

 

4.5 Default Commission Rate

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

 

23

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

 

4.6 Limitations and Shareholder Funding

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

 

4.7 Pledge

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

 

4.8 Adherence Agreement

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

 

4.9 Financing Completion Date

 

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

 

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

 

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

 

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5. Responsibilities of the Parties

 

5.1 Roles of the Parties

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

 

5.2 Role of Ma’aden

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

 

5.3 Role of Alcoa

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

 

5.4 Aluminium Offtake

 

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

 

  (b)

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

 

25

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

 

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

 

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

 

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

 

5.5 Support for Downstream Industry and Priority to the Domestic Market

 

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

 

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

 

5.6 Sales Agency Arrangements for Sales in the Kingdom

 

  (a) Subject to agreement on terms, Alcoa (or its Affiliates) and Ma’aden shall
enter into a sales agency agreement pursuant to which Ma’aden or its Affiliates
shall act as the exclusive sales agent in the Kingdom for Alcoa’s (or its
Affiliates’) sales of Aluminium to businesses within the Kingdom, in
consideration for the payment of a reasonable agency fee to be agreed between
the Parties. Such sales agency agreement shall be subject to usual termination
rights for failure to perform in accordance with the terms thereof.

 

  (b) To ensure fairness to Alcoa, the price realised by Alcoa (before taking
into account the commission payable to Ma’aden) on sales of Aluminium by Ma’aden
as sales agent shall be determined with reference to the average price achieved
by Ma’aden (whether for its own account or as sales agent for Alcoa) on sales of
Aluminium in arm’s length transactions with third parties in the Kingdom.

 

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5.7 Sales Agency Arrangements for Sales Outside the Kingdom

 

  (a) Subject to agreement on terms, Alcoa and Ma’aden shall enter into a sales
agency agreement pursuant to which Alcoa (or its Affiliates) shall act as
Ma’aden’s sales agent for the sale outside the Kingdom of a portion of Ma’aden’s
share of Aluminium, which as at the date of this Agreement is intended to be in
the range of 30-50% of Ma’aden share, in consideration for the payment of a
reasonable agency fee to be agreed. Such sales agency agreement shall be for a
minimum term of 5 years, subject to usual termination arrangements, including
the ability to reduce the volumes committed under such sales agency agreement in
increments of up to fifty percent (50%) of the originally committed volume on
giving not less than twelve (12) months written notice to the agent, and
provided that no such reduction shall occur before the expiry of the fourth year
of the aforesaid minimum five (5) year term.

 

  (b) To ensure fairness to Ma’aden, the price realised by Ma’aden (before
taking into account the commission payable to Alcoa) on sales of Product by
Alcoa as sales agent shall be determined with reference to the average price
achieved by Alcoa (whether for its own account or as sales agent for Ma’aden) on
sales of Products of the same specified and quality in arm’s length transactions
with third parties.

 

5.8 Alumina Supply Arrangements and Excess Alumina

 

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

 

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

 

5.9 Capacity Expansions

 

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

 

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

 

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

 

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

 

  (e)

In the context of an Expansion carried out by a particular Company, the Parties
shall endeavour to cause such Company (i) to minimise any disruption in the
production levels of

 

27

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the Project, including the Mine and/or the Complex, during the period in which
the Expansion is effected and (ii) to procure that the Expansion is effected in
accordance with good industry practice.

 

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

 

5.10 Break-Off Projects

 

  (a) If Ma’aden makes an Expansion proposal in accordance with Clause 5.9 and
such Expansion proposal is not approved by the relevant Board of Managers in
accordance with this Agreement at two (2) non-successive Board meetings of the
relevant Company, held at least five (5) months apart, at which such Expansion
proposal is presented for approval, then Ma’aden shall have the right (the
“Break-Off Right”) itself or through an Affiliate to proceed to develop,
construct, own and operate the Expansion to which such Expansion proposal
relates (the “Break-Off Project”). Ma’aden may develop, construct, own and/or
operate the Break-Off Project either itself or through a special purpose project
company (the “Break-Off Project Company”) which it Controls. The Break-Off Right
shall terminate if (i) Ma’aden has not given formal notice to the relevant
Company (the “Break-Off Project Notice”) of its intention to proceed with such
Expansion within the period of sixty (60) days after the second of the two
non-successive Board of Managers meetings where the relevant Board of Managers
resolved not to proceed with such Expansion, or (ii) notice to proceed under the
relevant Construction Agreements for the Break-Off Project is not given within
eighteen (18) months of the date of the Break-Off Project Notice. For the
avoidance of doubt, if any Break-Off Right so terminates, the proposed Expansion
(or any Expansion substantially similar to such proposed Expansion) must again
be submitted to the relevant Company in accordance with Clause 5.9.

 

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

 

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

 

  (ii)

the relevant Company shall, to the extent that doing so does not disrupt the
Project, seek to accommodate the needs of the Break-Off Project, including, for
the avoidance of doubt, allowing the Break-Off Project to interface with and
share the

 

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plant and facilities of the Project, at the cost of Ma’aden, its Affiliates
and/or the Break-Off Project Company; and

 

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

 

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

 

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

 

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

 

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

 

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

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

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

 

5.11 Value Added Projects

 

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

 

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

 

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

 

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

 

5.12 Responsibilities under the Gas Allocation Letter

 

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

 

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

 

  (c) Alcoa shall provide to Ma’aden, within fourteen (14) days of Ma’aden’s
written request, and in any case prior to the deadline under the Gas Allocation
Letter for provision of a letter of credit to the Ministry of Petroleum, a
separate irrevocable and unconditional letter of credit issued by a financial
institution acceptable to Ma’aden in an amount equal to Alcoa’s pro rata share
of the amount stated in paragraph (a) above based on its Shareholder Percentage
(the “Alcoa LOC”). The Alcoa LOC shall have a term of not less than one (1) year
and at least thirty (30) days prior to its expiry, Alcoa shall either (i) cause
the issuing bank to provide a notice of renewal satisfactory to Ma’aden or
(ii) provide a notice of replacement to Ma’aden together with a replacement
letter of credit fulfilling the requirements of this Clause 5.12(c).

 

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

 

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

 

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  (f) Any failure by Alcoa to comply with the requirements of this Clause 5.12
for any reason whatsoever shall be deemed to be an Event of Default by Alcoa
under Clause 14.1(e).

 

5.13 Provision of Information by Parties and the Companies

 

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

 

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

 

  (ii) securing an improper advantage;

 

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

 

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

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

 

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

 

6. Transfer of Existing Project Assets; Project Agreements

 

6.1 Transfer of Ma’aden Existing Project Assets

 

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

 

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

 

  (i) execute appropriate Deeds of Transfer transferring each of the Ma’aden
Existing Project Assets to the relevant Company;

 

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

 

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

 

6.2 Transfer of Alcoa Existing Project Assets

 

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

 

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

 

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

 

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

 

6.3 Project Agreements signed post-Effective Date but before Company Formation

 

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

 

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

 

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7. Shareholders’ Meetings

 

7.1 Shareholders’ Meetings

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

 

7.2 Supermajority Items

 

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

 

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

 

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

 

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

 

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

 

  (v) Appointment, replacement, or removal of the Company’s Auditors;

 

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

 

  (vii) Any decision regarding Managers’ remuneration; or

 

  (viii) The approval and any subsequent amendment of the Project Budget.

 

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

 

  (c)

Other than as regards matters enumerated in Clause 7.2(a), the Parties agree
that no action by a Company which requires Shareholder approval pursuant to this
Agreement or under Applicable Laws of the Kingdom shall have any effect until
such matter shall have been approved by a resolution passed at a duly convened
meeting of the Shareholders at which a

 

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quorum is present by the affirmative votes of the relevant Shareholders in
attendance or duly represented at such meeting who are entitled to vote on such
resolution in accordance with this Agreement and holding in the aggregate at
least fifty one percent (51%) of the Share Capital of the relevant Company.

 

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

 

7.3 Language

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

 

8. Board of Managers

 

8.1 Appointment of Managers to each Company

 

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

 

  (b) Unless otherwise agreed between the Shareholders of a particular Company,
Ma’aden shall appoint the Chairman of each Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8.2 Removal of Managers

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

 

8.3 Appointment of Senior Officers to each Company; Removal

 

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

 

  (i) the President;

 

  (ii) the Vice President for Operations;

 

  (iii) the Vice President for Finance; and

 

  (iv) the Vice President for Human Resources.

 

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

 

  (c) Except as otherwise agreed by the Parties, the President shall be
nominated by Ma’aden to each Board of Managers for approval and shall be the
primary executive officer of each Company and shall be fully responsible for the
general and executive management and daily administration of the operations and
business of each Company. The person nominated by Ma’aden as President shall
serve as President for each Company. The President shall report directly to the
relevant Board of Managers and carry into effect all decisions and resolutions
of the relevant Board of Managers and, if and to the extent determined by
special majority approval of the relevant Board of Managers, any duly authorised
committee of the relevant Board of Managers.

 

  (d)

Except as otherwise agreed by the Parties, the Vice President for Operations of
each Company shall be nominated by Alcoa to the relevant Board of Managers for
approval. The

 

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scope of each Vice President for Operations’ role and responsibilities shall be
as determined by the relevant Board of Managers from time to time. Each Vice
President for Operations shall report directly to the President.

 

  (e) Except as otherwise agreed by the Parties, the Vice President for Finance
shall be nominated by Ma’aden to each Board of Managers for approval. The person
nominated by Ma’aden as the Vice President for Finance shall serve in such
capacity for each Company. The scope of the Vice President for Finance’s role
and responsibilities shall be as determined by the relevant Board of Managers
from time to time. The Vice President for Finance shall report directly to the
President.

 

  (f) The scope of the Vice President for Human Resources’ role and
responsibilities shall be as determined by the relevant Board of Managers from
time to time. The Vice President for Human Resources shall report directly to
the President. The person appointed as Vice President for Human Resources shall
serve in such capacity for each Company. The Vice President for Human Resources
shall report directly to the President. The Vice President for Human Resources
Officer shall be a suitable qualified Saudi national.

 

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

 

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

 

  (i) If a Party loses faith in a Senior Officer nominated by it, it may
immediately propose the replacement of such Senior Officer. If a Party loses
faith in a Senior Officer nominated by the other Party, it will promptly so
inform the other Party, and the Parties will consult on the necessary steps
required to either (1) place such Senior Officer under review, or (2) to remove
such Senior Officer. If the Parties cannot agree on the review or removal of
such Senior Officer, the Deadlock provisions of Clause 9 shall apply for a
period not to exceed one (1) year; and thereafter, if the loss of faith in such
Senior Officer continues, he or she will be removed from the present position,
and the Party entitled to nominate such Senior Officer will nominate a
replacement.

 

8.4 Meetings of the Board of Managers of each Company

 

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

 

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

 

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

 

8.5 Voting Thresholds

 

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

 

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

 

  (i) Appointment, removal and remuneration of the Senior Officers;

 

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

 

  (iii) Approval of the issuing of the NTP for each Phase.

 

  (iv) Approval of the annual operating budgets and any material change thereto
(having a value in excess of the lower of fifty million US Dollars (US$50
million) or ten (10) percent of the annual operating budget) of the relevant
Company following the Commercial Production Date;

 

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

 

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

 

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

 

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

 

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

 

  (x) Adoption of each Company’s initial business conduct and conflict of
interest Company Policies, and any material changes thereto; and

 

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

 

8.6 Resolutions

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

 

8.7 Information

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

 

8.8 Duties of Managers

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

 

8.9 Company Policies

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

In this regard, among other things:

 

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

 

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

 

  (ii) the quality of the Company’s internal and external financial reporting;
and

 

  (iii) compliance by the Company with Applicable Laws.

 

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

 

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

 

  (ii) access to assets is permitted only in accordance with management’s
general or specific authorization; and

 

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

 

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

 

8.10 Project Steering Committee

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

 

9. Deadlock

 

9.1 Deadlock Arising

 

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

 

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

 

9.2 Deadlock Referral

 

  (a)

Any Shareholder that has not voted against or abstained from voting in respect
of a Proposed Resolution that has resulted in a Deadlock or, as the case may be,
whose

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9.3 Sole Remedies

 

  (a)

A Deadlock shall not be submitted to, or be capable of resolution by,
arbitration under this Agreement, provided that, any dispute with respect to the
compliance by the relevant

 

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Shareholders with their obligations under this Clause 9 may be subject to
arbitration pursuant to Clause 21.3.

 

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

 

10. Senior Debt Financing of the Project

 

10.1 Support For Financing Plan

Each Party shall:

 

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

 

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

 

10.2 Several Obligations

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

 

10.3 No Further Liability

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

 

11. Distributions Policy; Taxes

 

11.1 Distributions Policy

 

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

 

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

 

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

 

  (ii) secondly, to the relevant Shareholders by way of dividend or other Share
Distribution as may be determined by the relevant Board of Managers in
accordance with this Agreement,

 

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and except to the extent that the relevant Shareholders otherwise determine
pursuant to Clause 7.2.

 

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

 

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

 

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

 

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

 

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

 

  (e) The Parties and the relevant Shareholders undertake to resolve to
establish such reserves and/or carry forward or retain such profits as may be
necessary to enable each Company to comply with the terms of any Financing
Agreements or credit facilities to which such Company is a party. If losses are
incurred they shall be carried over to the next Financial Year and no profits
shall be distributed until the losses are fully covered.

 

11.2 Local Community Projects; Research and Development Programme

 

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

 

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

 

  (ii) funding by the Companies of their research and development programmes in
the minimum amount in the aggregate of one percent (1%) of the Companies’ actual
EBIT annually.

 

  (b) Each Company shall be responsible for dispersing such funds to the
relevant local community projects and for determining Ma’aden’s role in this
process, as approved by the relevant Board of Managers, consistent with its
Company Policies. Each Company shall monitor any local community projects to
which funds have been so disbursed in accordance with the Parties’ agreed
policies, subject to any monitoring role which is specifically assigned to
Ma’aden in accordance with a Company’s determination under this Clause 11.2(b).

 

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11.3 Tax and Zakat

 

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

 

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

 

12. Accounting System, Books and Budgets

 

12.1 Accounting System and Standards

The Parties will ensure that each Company shall keep and maintain an accounting
and cost accounting system allowing efficient control and allocation of all
costs involved, and shall regularly report to the Parties in accordance with the
requirements of all Applicable Laws of the Kingdom and a system acceptable to
the relevant Board of Managers, based on generally accepted accounting standards
and applicable rules and regulations applied by the Saudi Organisation for
Certified Public Accountants (“SOCPA”) in the Kingdom and also in the
International Financial Reporting Standards as issued by the International
Accounting Standards Board from time to time (“IFRS”).

 

12.2 Language of Reporting to the Shareholders

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

 

12.3 Financial Statements

The Parties shall procure that each Company prepares the following:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12.4 Books and Audit Rights

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

 

12.5 Statutory Obligations

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

 

12.6 Auditors

 

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

 

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

 

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

 

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12.7 Rights of Managers not Limited

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

 

12.8 Annual and Special Budgets

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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12.9 Emergency Funding

 

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

 

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

 

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

 

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

 

13.1 Payment of Entry Payment and Pre-Incorporation Costs

 

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

 

  (b) Simultaneously with signing this Agreement on the Effective Date, Alcoa
shall pay to Ma’aden the following amounts: (i) eighty million US Dollars (US$80
million) comprising the entry payment payable by Alcoa in respect of the
opportunity to participate in the Project (the “Entry Payment”); and
(ii) fifty-five million US Dollars (US$55 million) comprising Alcoa’s pro rata
share, based on its Shareholder Percentage set out in Clause 4.1, of the Agreed
Pre-Incorporation Costs incurred by Ma’aden prior to the Calculation Date (which
following receipt of such payment by Ma’aden, shall be deemed to be
Pre-Incorporation Costs of Alcoa as approved by the Parties).

 

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

 

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

 

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  (e) From the Calculation Date until the date of incorporation of each Company
and appointment of its Board of Managers, each Party shall obtain the written
consent of the other Party (not to be unreasonably withheld) or of the
Development Committee before incurring Project Costs which have not been
pre-approved by the Parties and included in the Pre-Financing Budget or the
Project Budget (as the case may be), and such approved or pre-approved Project
Costs shall constitute part of the Pre-Incorporation Costs. If a Party incurs
costs between the Calculation Date and the date of incorporation of the relevant
Company and appointment of the relevant Board of Managers as aforesaid, that
have not been approved by the other Party or the Development Committee in
accordance with this Clause 13.1(d), or have not been included in the
Pre-Financing Budget or the Project Budget (as the case may be), such Party
shall not be entitled to any contribution to such costs from the other Party or
reimbursement of such costs by the relevant Company pursuant to Clause 13.2.
Notwithstanding the foregoing, nothing in this Agreement shall restrict a Party
from incurring such cost if it considers it appropriate to do so at its own cost
and risk (as aforesaid), and subject to any subsequent determination by the
Development Committee or the relevant Board of Managers (as the case may be)
that such costs should be recognised as Pre-Incorporation Costs.

 

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

 

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

 

13.2 Reimbursement of Pre-Incorporation Costs

 

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

 

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

 

14. Events of Default and Consequences

 

14.1 Events of Default

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

 

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

 

  (b)

the Defaulting Party is a transferring Shareholder and has breached or otherwise
failed to comply with any provisions of Clause 17 or of this Clause 14 and such
breach or default is

 

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not remedied within a period of seven (7) days from the date of service of a
default notice by the Non-Defaulting Party to the Defaulting Party, other than
any breach of Clause 17.4 which shall constitute an Event of Default immediately
upon its occurrence;

 

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

 

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

 

  (e) in respect of the period prior to incorporation of each Company and
appointment of the relevant Board of Managers, the Defaulting Party shall have
failed to advance (or procure the advancing of) the amount specified in a
Development Committee Funding Call under Clause 4.2(a) by the due date for
payment and such failure is not remedied within fourteen (14) days of a written
notice thereof from the Non-Defaulting Party to the Defaulting Party.

 

14.2 Consequences of Events of Default

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

 

  (a) if Ma’aden is the Non-Defaulting Party, it shall be entitled to purchase
Alcoa’s Transferable Interests in accordance with Clause 14.3 below. If Alcoa is
the Non-Defaulting Party, it shall be entitled to sell its Transferable
Interests to Ma’aden in accordance with Clause 14.5 below;

 

  (b) in the case of an Event of Default under Clause 14.1(b)-(d), the
Defaulting Party shall, in addition to the consequences arising from the
remaining sub-paragraphs of this Clause 14.2, not be entitled to any
Distributions or to otherwise participate in the profits of any Company under
this Agreement, the Articles of Association of any Company or otherwise during
the period that such Event of Default subsists;

 

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

 

  (d) in the case of an Event of Default occurring prior to the incorporation of
any Company and appointment of the relevant Board of Managers, including under
Clause 14.1(e), the consequences set out in Clause 14.6 shall apply in addition
to this Clause 14.2.

 

14.3 Transfer Upon Event of Default of Alcoa

 

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

 

  (i) on the first day immediately following: the occurrence of the Event of
Default under Clause 14.1(c); the expiry of the relevant cure period in the case
of Events of Default under Clause 14.1(b) or (d); or, in the case of a Funding
Default under Clause 14.1(a), immediately following the expiry of the Cure
Period and subject to Clause 14.4(f)(ii); (in each case, the “Call Date”), if
such circumstance shall continue to subsist, Alcoa shall be deemed to have
offered to sell and to procure the sale by its Affiliates of all right, title
and interest in all of Alcoa’s Transferable Interests to Ma’aden upon and
subject to the terms and conditions set out in this Clause 14;

 

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  (ii)

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

 

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

 

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

 

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

 

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

 

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

 

  (iii)

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

 

  (iv)

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

as determined (in the case of sub-clauses (iii) and (iv)) by the Valuers in
accordance with the provisions of Clause 18 which provisions shall apply mutatis
mutandis; and the Parties hereby acknowledge and agree that any discount
contemplated by this paragraph (b) does not (and shall not be construed to)
constitute a penalty imposed on Alcoa and that such discount reflects the
Parties’ genuine pre-estimate of the damages that Ma’aden would suffer

 

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in the circumstances contemplated by this Clause 14. In each case, any amount of
accrued and unpaid Default Commission shall be deducted from the amounts
otherwise payable to Alcoa. For the avoidance of doubt, the Entry Payment shall
not be reimbursed in the event of any purchase of Alcoa’s Transferable Interests
pursuant to this Clause 14.3.

 

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

 

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

 

  (e) Nothing in this Clause 14.3 shall be construed to require Ma’aden to
exercise any of the above rights.

 

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

 

14.4 Additional Consequences of a Funding Default

 

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

 

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

 

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

 

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

 

  (ii) second, to meet such Defaulting Party’s obligations to advance Required
Shareholder Funding; and

 

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

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

 

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

 

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

 

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

 

  (ii) the Defaulting Party shall have fourteen (14) days following the date of
payment by the Non-Defaulting Party of the Default Amount (including any accrued
and unpaid Default Commission), or thirty (30) days from the date of the Funding
Default, whichever period ends later, during which to cure the Funding Default
(the “Cure Period”) by reimbursing the Non-Defaulting Party in respect of
(i) the Default Amount (including any Default Commission paid by the
Non-Defaulting Party) and (ii) the sum equal to the application of the
Commission Rate on the Default Amount from the date of payment by the
Non-Defaulting Party until the date of reimbursement by the Defaulting Party.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14.5 Ma’aden as the Defaulting Party

 

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

 

  (i) Alcoa may, by notice in writing given to Ma’aden and the relevant Company
not later than the thirtieth (30th) day following: the occurrence of the Event
of Default under Clause 14.1(c); the expiry of the cure period in the case of an
Event of Default under Clause 14.1(b) or (d); or in the case of a Funding
Default under Clause 14.1(a) immediately following the expiry of the Cure Period
and pursuant to Clause 14.4(f)(iii), elect to sell all (but not less than all)
of its Transferable Interests to Ma’aden; and

 

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

 

  (b) The purchase price for Alcoa’s Transferable Interests shall be as follows:

 

  (i) in the event that the Financial Completion Date for Phase 1 has not
occurred, at a consideration equal to the Paid In Capital and Shareholder Loans
of Alcoa in respect of all of the Companies at the date of transfer as well as
the repayment by Ma’aden of the Entry Payment;

 

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

 

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

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

 

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

 

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

 

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

 

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

 

14.6 Default Prior to Incorporation of any Company

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

 

  (a) Following an Event of Default by Alcoa, Ma’aden shall, without prejudice
to any other rights or claims available to it, have the right to terminate this
Agreement by fourteen (14) days notice in writing given to Alcoa following: the
occurrence of an Event of Default under Clause 14.1 (c); or the expiry of the
relevant cure period in the case of an Event of Default under Clause 14.1 (d) or
(e). In the event of such termination, Alcoa shall assign and transfer to
Ma’aden its rights to and in all Pre-Incorporation Materials in consideration of
the payment of US$1.00 by Ma’aden.

 

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

 

14.7 Other Remedies

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

 

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15. Failure to Achieve Financial Completion Date for Phase 1 by the Financing
Longstop Date

 

15.1 Compensation on Buy-Out

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15.2 Transfer on Financing Longstop Date

 

  (a) Where Ma’aden has the right to purchase, and require Alcoa to sell, all of
Alcoa’s Transferable Interests pursuant to Clause 15.1(b) or (c), or Alcoa has
the right to sell to Ma’aden, and Ma’aden has the obligation to purchase, all of
Alcoa’s Transferable Interests pursuant to Clause 15.1(b) as the case may be,
the following shall apply:

 

  (i) on the relevant date under Clause 15.1(b) or (c), Alcoa shall either offer
or be deemed to have offered to sell and to procure the sale by its Affiliates
of all right, title and interest in all of Alcoa’s Transferable Interests to
Ma’aden upon and subject to the terms and conditions set out in this Clause 15;

 

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

 

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

 

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

 

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

 

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

 

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  (d) Nothing in this Clause 15.2 shall be construed to require Ma’aden to
exercise any of the above rights.

 

  (e) Any transfer under this Clause 15.2 shall have effect to transfer all of
Alcoa’s Transferable Interests free and clear of any Encumbrance, subject to the
Financing Agreements.

 

16. Termination and Expiry

 

16.1 Full Termination and Expiry

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

 

  (a) the expiry of the Agreement pursuant to Clause 2.2;

 

  (b) the written agreement of the Parties that the Agreement be terminated;

 

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

 

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

 

  (e) the termination of the Gas Allocation Letter.

 

16.2 Partial Termination

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

 

16.3 Consequences of Termination at the Expiry of the Term

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

 

16.4 Consequences following Termination

 

  (a)

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

 

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provide the technical support services in respect of the Project pursuant to the
terms of such agreements.

 

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

 

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

 

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

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

 

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

 

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

 

16.5 Survival and Rights Unaffected

 

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

 

  (b) Notwithstanding any termination or expiry of this Agreement, whether as to
any Party or in its entirety, the following provisions shall survive such
termination or expiry as to all Parties: Clauses 1 (Definitions and
Interpretation), 13 (Entry Payment, Pre-Incorporation Costs and Transfer of
Pre-Incorporation Materials), 16.4 (Consequences following Termination), 16.5
(Survival and Rights Unaffected), 21 (Governing Law etc), 22 (Confidentiality
and Public Announcements), 23 (Notices) and 26 (General Provisions). The Parties
shall be deemed to continue to be parties to the Agreement for such purposes
only.

 

17. Sale or Transfer of Shares, Pledge

 

17.1 General Prohibition

Unless permitted by Clauses 14 or 15 or this Clause 17 or with the prior written
consent of the other Party, no Party or any Affiliate which is a Shareholder
shall do, or agree to do, any of the following:

 

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

 

  (b) encumber any of its Transferable Interests or any interest in any of its
Transferable Interests;

 

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

 

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

 

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17.2 Transfers to Affiliates

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

 

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

 

  (b) if Ma’aden is the transferring Party, the Affiliate is and remains an
Affiliate of Ma’aden, and if Alcoa or its Affiliate is the transferring Party,
the Affiliate is and remains an Affiliate of Alcoa;

 

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

 

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

 

  (e) a guarantee is provided in substantially the form set out in Schedule 1 by
Alcoa in respect of the obligations of such Affiliate, or by Ma’aden in respect
of the obligations of its such Affiliate under this Clause 17.2 (but not, for
the avoidance of doubt, in respect of a KSA Controlled Transferee under Clause
17.3).

 

17.3 Permitted Transfers

 

  (a) Notwithstanding the provisions of Clause 17.4, Ma’aden shall, at any time,
be entitled to sell, transfer and assign (and may procure the sale, transfer and
assignment by any of its Affiliates of) all of Ma’aden’s right, title and
interest in and to all Shares held by Ma’aden and all of the Shareholder Loans
of Ma’aden to a person who is at the time of such sale, transfer and assignment,
Controlled, directly or indirectly, by any Governmental Authority of the Kingdom
(“KSA Controlled Transferee”). Ma’aden shall give not less than thirty
(30) days’ prior written notice to Alcoa of such a proposed transfer including
details of the proposed KSA Controlled Transferee. Ma’aden shall procure that,
as a condition to such transfer, the KSA Controlled Transferee shall agree to be
bound by all the terms of this Agreement and shall execute an Adherence
Agreement.

 

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

 

17.4 Transfers of Shares

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

 

  (i) is a bona fide offer in writing;

 

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  (ii) is irrevocable during the period of the Offer;

 

  (iii) is for cash consideration only; and

 

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

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

 

17.5 Notice of Offers

 

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

 

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

 

17.6 Notice of Right to Match the Offer

The Selling Party may not proceed with a sale to the approved Third Party
Offeror without first giving written notice (the “Notice of the Right to Match
the Offer”) to the Remaining Party giving the Remaining Party the right to match
the Offer (the “Right to Match the Offer”). This Notice of the Right to Match
the Offer should include full details of all terms and conditions of the Offer,
including the price, and a copy of the Offer.

 

17.7 Right of Remaining Party to Match the Offer

 

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

 

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

 

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

 

17.8 Transfer Requirements

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

 

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

 

  (ii)

to the transfer when completed, not constituting or giving rise to a breach by
the transferring Party or a Company of any Project Agreement (including any
Financing Agreement) to

 

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which either of them is a party; nor constituting, with or without the passage
of time, the giving of notice or the taking of other steps by or on behalf of
the Senior Lenders, an actual or potential default or event of default
(howsoever defined) under such Project Agreement (including any Financing
Agreement);

 

  (iii) to obtaining any approvals required from the competent authorities;

 

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

 

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

 

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

 

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

 

17.9 Completion of Transfer

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

 

  (a) Completion of the transfer of the Transferable Interests shall take place
on the Transfer Date, which shall be within ninety (90) days after the date of
expiry of the Right to Match the Offer Period in the event of a transfer to the
Remaining Party pursuant to Clause 17.7 and at such reasonable time and place as
the Parties agree; and

 

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

 

17.10 General

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

 

17.11 Further Assurances; Sole Shareholder

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

 

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18. Valuations

 

18.1 Fair Market Value

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

 

18.2 Valuation Panel

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

 

18.3 Submission of Valuation

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

 

18.4 Valuation Approach

In valuing Alcoa’s Transferable Interests, the Valuers:

 

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

 

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

 

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

 

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

 

  (e) may consult any other experts as the Valuers thinks fit;

 

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

 

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

 

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19. Assignment

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

 

20. Warranties

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

  (ii) securing an improper advantage;

 

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

 

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

 

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21. Governing Law, Dispute Resolution and Language

 

21.1 Governing Law

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

 

21.2 Reference to Senior Management

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

 

21.3 Dispute Resolution

 

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

 

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

 

  (c) The place of arbitration shall be London. The language to be used in the
arbitration shall be English, and any documents or portions of them presented at
such arbitration in a language other than English shall be accompanied by an
English translation thereof. The arbitrators shall decide such dispute in
accordance with the substantive laws of England applicable hereto.

 

21.4 Continuing Obligations

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

 

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21.5 Jurisdiction

 

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

 

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

 

21.6 Process Agent

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

 

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

 

  (b) Alcoa and any of its Affiliates being a Shareholder hereby irrevocably
agrees to appoint Pinsent Masons LLP, with offices at the date of this Agreement
at 1 Park Row, Leeds, LS1 5AB as its authorised agent on which any and all legal
process may be served in any such action, suit or proceeding brought in the
courts of England, and to execute such documentation as may reasonably be
required by such agent in connection with its appointment.

 

21.7 Language

This Agreement and the agreements contemplated herein are to be executed in
Arabic and in English. The English language shall be the governing language
despite translation into any other language(s), and the English versions shall
prevail over any translated versions in the event of

 

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conflict. No translation, if any, of this Agreement into any other language
shall be of any force or effect in the interpretation of this Agreement or in a
determination of the intent of each Party.

 

22. Confidentiality and Public Announcements

 

22.1 Confidentiality

 

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

 

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

 

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

 

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

 

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

 

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

 

  (vi) is independently developed by such Party; or

 

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

 

  (b) Each Party shall impose on its Affiliates, or such of its or its
Affiliate’s directors, officers, employees, professional advisers or
consultants, or to any bank or financial institution from whom the Party is
seeking finance, an equivalent obligation of confidentiality and shall obtain an
undertaking of strict confidentiality from such Affiliates, or such of its or
its Affiliate’s directors, officers, employees, professional advisers or
consultants, or financial institution from whom the Party is seeking finance, on
the terms set out in this Clause 22.

 

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

 

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22.2 Disclosure of Information by Managers to Shareholders and Parties

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

 

22.3 Announcements

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

 

22.4 Survival

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

 

23. Notices

 

23.1 Notices

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

 

For Ma’aden:    Address:   P.O. Box 68861      Riyadh 11537      Kingdom of
Saudi Arabia      Facsimile:          +966 1 874 8200     
Attn.:                  Vice President Aluminium SBU                With a copy
to:   Ma’aden Legal Department      P.O. Box 68861      Riyadh 11537     
Kingdom of Saudi Arabia      Facsimile:          +966 1 874 8290     
Attn:                  Chief Legal Counsel For Alcoa and its Shareholder
Affiliates:   Address:            390 Park Avenue      New York, NY 10022     
United States of America

 

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     Facsimile:          +1 212 836 2804      Attn.:                  President,
Global Primary Growth                With a copy to:   Alcoa Inc. Legal
Department      201 Isabella Street      Pittsburgh, PA 15212      United States
of America      Facsimile:          +1 412 553 4064     
Attn:                  General Counsel

 

23.2 Effect

 

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

 

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

 

24. Further Assurances

 

24.1 Undertakings

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

24.2 Further Assurances

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

 

24.3 Business Conduct

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

 

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

 

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

 

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

 

25. Competing Businesses

 

25.1 Acknowledgement

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

 

25.2 No Obligation to Offer

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

 

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25.3 Competing Projects Following Termination

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

 

26. General Provisions

 

26.1 Severability

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

 

26.2 Waiver

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

 

26.3 Compliance with Law and Permits

 

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

 

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

 

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

 

26.4 Intellectual Property

 

  (a)

Subject to any provisions as to ownership of Intellectual Property under any of
the Project Agreements (including the Smelter TTA and Smelter OSA), any rights
to Intellectual

 

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Property which are developed by a Company during the course of a Company’s
activities under this Agreement shall belong to the Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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26.5 Entire Agreement

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

 

26.6 Improper Inducements

 

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

 

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

 

  (i) Any Party or its Affiliates;

 

  (ii) Any of their agents, independent contractors or subcontractors;

 

  (iii) The Government of the Kingdom;

 

  (iv) The employees of any of the foregoing,

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

 

  (c) Any violation of this provision shall constitute a Material Breach of the
Agreement which, without prejudice to any Party’s right to enforce any other
remedy provided by law, shall entitle that Party to terminate the Agreement in
accordance with Clause 16.1(d).

 

26.7 Language

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

 

26.8 Amendments

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

 

26.9 No Partnership

Nothing contained or implied in this Agreement shall constitute or be deemed to
constitute a partnership between the Parties or any Affiliates being
Shareholders (or any of them) and none of

 

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the Parties (or an Affiliate of a Party being a Shareholder) shall have any
authority to bind or commit any other Party in any way, save as expressly set
out herein.

 

26.10 Priority of Documents

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

 

26.11 Waiver of Immunity

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

 

26.12 No Liability for Consequential Losses, etc.

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

 

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

 

  SAUDI ARABIAN MINING COMPANY (MA’ADEN) By:   Dr. Abdullah Dabbagh, President
and CEO Signed:  

/s/ Abdullah Dabbagh

  ALCOA INC. By:   Klaus Kleinfeld, President and CEO Signed:  

/s/ Klaus Kleinfeld

 

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SCHEDULE 1

Parent Company Guarantee

THIS AGREEMENT is dated and effective                      and is by and
between:

 

(1) ALCOA INC., a corporation organized under the laws of the Commonwealth of
Pennsylvania, whose principal place of business is at 390 Park Avenue, New York,
New York 10022-4608, U.S.A. (together with its legal successors and permitted
assigns, hereinafter referred to as the “Guarantor”); and

 

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

RECITALS:

 

(A) Whereas the Guarantor and the Beneficiary entered into a Framework
Shareholders’ Agreement dated [—] (the “Principal Agreement”); and

 

(B) Whereas, as a condition of such Principal Agreement, the Guarantor is
required to provide a guarantee in favour of the Beneficiary on the terms set
out herein in respect of any Affiliate of Alcoa (i) which subscribes for Shares
in any of the Companies pursuant to the Principal Agreement and an Adherence
Agreement and/or (ii) to whom any Shares in the Companies are subsequently
transferred (each an “Alcoa Affiliate”).

NOW THEREFORE the parties agree as follows:

 

1. Definitions and Interpretation

In this Agreement, unless the context otherwise requires:

 

1.1 terms shall have the meanings ascribed to them in the Principal Agreement;

 

1.2 any reference to an agreement or other document is a reference to that
agreement or document as from time to time supplemented, amended or novated;

 

1.3 headings are inserted for convenience only and shall not affect the
construction of this Agreement;

 

1.4 any reference to “Clause”, “Recital” or “Schedule” is a reference to a
Clause, Recital or Schedule to this Agreement and the Recitals and Schedules to
this Agreement shall be deemed to form part of this Agreement; and

 

1.5 any reference to the male shall include the female and the neuter and vice
versa, and any reference to the singular shall include the plural and vice
versa.

 

2. Guarantee and Indemnity

 

2.1

The Guarantor hereby unconditionally and irrevocably guarantees to the
Beneficiary the due and punctual performance and observance by each Alcoa
Affiliate of all its respective obligations, commitments, undertakings,
warranties, indemnities and covenants under or in connection with the Principal
Agreement and the Adherence Agreement (the “Obligations”) and agrees to
indemnify the Beneficiary on demand against all losses, damages, costs and
expenses (including reasonable legal costs and expenses in respect of any
enforcement of the Obligations and/or this Agreement) which

 

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the Beneficiary may suffer through or arising from any breach by any Alcoa
Affiliate of the Obligations. The liability of the Guarantor as aforesaid shall
not be released or diminished by any alterations of terms (whether of the
Principal Agreement, the Adherence Agreement or otherwise) or any forbearance,
neglect or delay in seeking performance of the obligations thereby imposed or
any granting of time for such performance or any other indulgence, provided,
however, that the Guarantor’s obligations under this Agreement shall continue
subject to any such alteration, extension of time or other indulgence, or any
waiver that may be granted.

 

2.2 If and whenever an Alcoa Affiliate defaults in the performance of the
Obligations and such default is not cured or remedied within the time limits
therefor after notice thereof by the Beneficiary to the Alcoa Affiliate
(“Default”), the Guarantor shall upon demand, which shall reasonably and briefly
specify the nature and amount, if any, of the Default (the “Demand”),
unconditionally perform (or procure performance of) and satisfy (or procure the
satisfaction of), in accordance with the terms and conditions of the Principal
Agreement and the Adherence Agreement, the Obligations in regard to which such
Default has been made, and so that the same benefits shall be conferred on the
Beneficiary as it would have received if such Obligations had been duly
performed and satisfied by the Alcoa Affiliate. Subject to the first sentence of
this Clause 2.2, the Guarantor hereby waives any rights which it may have to
require the Beneficiary to proceed first against or claim payment from the
relevant Alcoa Affiliate, to the extent that as between the Beneficiary and the
Guarantor, the latter shall be liable as principal obligor upon any aforesaid
Default, as if it had entered into all the Obligations jointly and severally
with the relevant Alcoa Affiliate.

 

2.3 This guarantee and indemnity is to be a continuing security to the
Beneficiary for all the Obligations of each Alcoa Affiliate notwithstanding any
settlement of account or other matter or thing whatsoever.

 

2.4 This guarantee and indemnity is in addition to and without prejudice to and
not in substitution for any rights or security which the Beneficiary may now or
hereafter have or hold for the performance and observance of the Obligations of
any Alcoa Affiliate.

 

2.5 In the event that the Guarantor has taken or takes any security from an
Alcoa Affiliate in connection with this guarantee and indemnity, the Guarantor
hereby undertakes to hold the same in trust for the Beneficiary pending
discharge in full of all the Guarantor’s obligations under or in connection with
the Principal Agreement and the Adherence Agreement. The Guarantor shall not,
after any Demand has been made hereunder, claim from an Alcoa Affiliate any sums
which may be owing to it from the Alcoa Affiliate or have the benefit of any
set-off or counter-claim or proof against, or dividend, composition or payment
by, the Alcoa Affiliate until all sums owing to the Beneficiary hereunder or
under or in connection with the Principal Agreement and the Adherence Agreement
have been paid in full.

 

2.6 As a separate and independent stipulation, the Guarantor agrees that any
Obligations which may not be enforceable against or recoverable from an Alcoa
Affiliate by reason of:

 

  (a) any legal limitation, disability or incapacity of the Alcoa Affiliate or
the Guarantor;

 

  (b) any insolvency or liquidation of the Alcoa Affiliate;

 

  (c) any merger, amalgamation or other change of status of the Guarantor; or

 

  (d) any other fact or circumstance,

shall nevertheless be enforceable against or recoverable from the Guarantor as
though the same had been incurred by the Guarantor as principal obligor in
respect thereof and shall be performed or paid by the Guarantor on demand in
accordance with and subject to the provisions of the Principal Agreement, the
Adherence Agreement and this Agreement.

 

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2.7 Subject to the other provisions of this Agreement, the obligations and
liability of the Guarantor under or arising out of this guarantee and indemnity
shall not be interpreted as imposing greater obligations and liabilities on the
Guarantor than are imposed on the relevant Alcoa Affiliate under the Principal
Agreement and the Adherence Agreement.

 

2.8 The Guarantor warrants and confirms to the Beneficiary:

 

  (a) that it is duly incorporated and validly existing under the laws of the
Commonwealth of Pennsylvania;

 

  (b) that it has full power under its Articles of Incorporation and By-laws to
enter into this Agreement;

 

  (c) that it has full power to perform its obligations under this Agreement;

 

  (d) that it has been duly authorised to enter into this Agreement;

 

  (e) that it has taken all necessary corporate action to authorise the
execution, delivery and performance of this Agreement;

 

  (f) that this Agreement when executed and delivered will constitute a binding
obligation on it in accordance with its terms; and

 

  (g) that it has not received any notice, nor to the best of its knowledge is
there pending or threatened any notice, of any violation of any Applicable Laws
by it which is likely to have a material adverse effect on its ability to
perform its obligations under this Agreement.

 

2.9 The Guarantor warrants and confirms to the Beneficiary that it has not
entered into this Agreement in reliance upon, nor has it been induced to enter
into this Agreement by any representation, warranty or undertaking made by or on
behalf of the Beneficiary (whether express or implied and whether pursuant to
statute or otherwise) which is not set out in this Agreement.

 

3. Governing Law and Jurisdiction

 

3.1 This Agreement shall be governed by and construed in accordance with the
laws of England.

 

3.2 Any dispute arising out of or in connection with this Agreement shall be, if
requested by any party, referred to and finally settled by arbitration under the
Rules of Arbitration of the International Chamber of Commerce as amended or
substituted from time to time (the “ICC Rules”) and the proceedings brought in
accordance with this Clause 3.2, which ICC Rules are deemed to be incorporated
into this Agreement except to the extent expressly modified by this Clause 3.
Arbitration shall be the exclusive method for resolution of the dispute and the
determination of the arbitrators shall be final and binding. The parties agree
that they will give conclusive effect to the arbitrators’ determination and
award and that judgment thereon may be entered and enforced by any court of
appropriate jurisdiction.

 

3.3 The tribunal shall consist of three (3) arbitrators, one of whom shall be
appointed by each of the Beneficiary and the Guarantor and the third of whom,
who shall act as Chairman, shall be jointly nominated by the two nominated
arbitrators.

 

3.4 The place of arbitration shall be London. The language to be used in the
arbitration shall be English, and any documents or portions of them presented at
such arbitration in a language other than English shall be accompanied by an
English translation thereof. The arbitrators shall decide such dispute in
accordance with the substantive laws of England applicable hereto.

 

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3.5 If a dispute is referred to arbitration pursuant to Clause 3.2 above, unless
the arbitrators rule otherwise, the obligations of the parties shall not be
suspended and the provisions of this Agreement shall continue to be carried out
by the parties.

 

3.6 The courts of England shall, subject to Clause 3.7 below, have non-exclusive
jurisdiction with respect to the enforcement of the arbitration provisions of
this Agreement and the parties expressly submit to the jurisdiction of such
courts with respect to any proceedings to enforce the arbitration provisions of
this Agreement. Each party irrevocably waives any objection which it might at
any time have to the courts of England being nominated as the forum to hear and
decide any such proceedings and agrees not to claim that the courts of England
are not a convenient or appropriate forum.

 

3.7 Without resulting in the waiver of any remedy under this Agreement and in
conjunction with each disputing party’s rights in accordance with Rule 25 of the
ICC Rules, nothing in this Clause shall preclude a disputing party from seeking
injunctive relief from a court pending the commencement of arbitral proceedings
in accordance with Clause 3.2 (or pending the arbitral tribunal’s determination
of the merits of the dispute). The parties hereby irrevocably submit to the
non-exclusive jurisdiction of the courts of England for such injunctive relief
and waive any objection or defence they may have to the venue or jurisdiction of
such courts. Without limiting the generality of the foregoing, the parties shall
have the right to seek injunctive relief in any court of competent jurisdiction
and the seeking of injunctive relief in one or more jurisdiction shall not
preclude a party from seeking such relief in any other jurisdiction.

 

3.8 The Beneficiary hereby irrevocably agrees to appoint Law Debenture Corporate
Services Limited, with offices at the date of this Agreement at Fifth Floor, 100
Wood Street, London EC2V 7EX, England as its authorised agent on which any and
all legal process may be served in any such action, suit or proceeding brought
in the courts of England, and to execute such documentation as may reasonably be
required by such agent in connection with its appointment. The Guarantor hereby
irrevocably agrees to appoint [            ], with offices at the date of this
Agreement at [            ] as its authorised agent on which any and all legal
process may be served in any such action, suit or proceeding brought in the
courts of England, and to execute such documentation as may reasonably be
required by such agent in connection with its appointment. Each party agrees
that service of process in respect of it upon its respective agent, together
with written notice of such service given to it as provided in Clause 4.2, shall
be deemed to be effective service of process upon it in any such action, suit or
proceeding. Each party agrees that the failure of such agent to give notice to
it of any such service shall not impair or affect the validity of such service
or any judgment rendered in any action, suit or proceeding based thereon. If for
any reason such agent shall cease to be available to act as such, each such
party agrees to designate a new agent in the City of London, on the terms and
for the purposes of this Clause. Nothing herein shall be deemed to limit the
ability of any party to serve any such legal process in any other manner, to
obtain jurisdiction over any other party or to bring any action, suit or
proceeding against any other party in such other jurisdictions, and in any other
manner as may be permitted or required by Applicable Laws.

 

3.9 All communications made in connection herewith and all proceedings commenced
in respect hereof shall be in the English language and, in the event of versions
of this Agreement being translated into other languages, the English language
version shall govern in the case of any inconsistency.

 

4. General Provisions

 

4.1 This Agreement contains all the terms agreed by the parties regarding the
subject matter of this Agreement and supersedes any prior agreements,
understandings or arrangements between them, whether oral or in writing and no
representation, undertaking or promise shall be taken to have been given or
implied from anything said or written in negotiations between the parties prior
to this Agreement except as set out in this Agreement.

 

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4.2 All notices, consents, determinations, requests, approvals, demands,
reports, objections, directions and other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been duly given and to be effective on the date on which such communications are
delivered by personal delivery, by facsimile transmission (with telephone
confirmation of receipt), by courier service or by registered or certified mail,
postage prepaid, return receipt requested, at the address set forth at the head
of this Agreement or at such other address as the party to whom the notice is
sent has designated by prior notice to the other parties in accordance with the
provisions of this Agreement.

 

4.3 The failure of any party to enforce or to exercise, at any time or for a
period of time, any term of or any right arising pursuant to this Agreement does
not constitute and shall not be construed as, a waiver of such term or right and
shall in no way affect that party’s right later to enforce or exercise it. No
variation or amendment to this Agreement shall be effective unless in writing
signed as an agreement by authorised representatives of the parties.

 

4.4 The Guarantor shall procure that, during the term of this Agreement, each
Alcoa Affiliate shall remain an Affiliate of the Guarantor.

 

4.5 All monies payable by the Guarantor to the Beneficiary hereunder shall be
paid in the manner and currency in which the relevant amount is payable by the
relevant Alcoa Affiliate under the Principal Agreement or Adherence Agreement
and in full without set-off or counterclaim of any kind and free and clear of
any deduction or withholding of any kind save as required by law. If any
deduction or withholding must be made by law, the Guarantor will pay that
additional amount which is necessary to ensure that the Beneficiary receives a
net amount equal to the full amount which it would have received if the payment
had been made without the deduction or withholding.

 

4.6 This Agreement shall terminate on the date that the last Alcoa Affiliate
ceases to be a party to the Principal Agreement in accordance with the terms
thereof, except for any outstanding obligations guaranteed under this Agreement
that have not been paid or performed by any Alcoa Affiliate.

 

4.7 If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable under the law of any jurisdiction, such illegality,
invalidity or unenforceability shall not affect the legality, validity or
enforceability of the remaining provisions of this Agreement under such law or
under the law of any other jurisdiction.

 

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

 

4.9 The rights and remedies provided by this Agreement are cumulative and not
exclusive of any rights or remedies provided by law.

 

4.10 This Agreement may be assigned by the Beneficiary to a person to whom the
entire Transferable Interests of the Beneficiary are transferred in accordance
with the Principal Agreement.

 

4.11 The parties do not intend any term of this Agreement to be enforceable
under the Contracts (Rights of Third Parties) Act, 1999 by any person who is not
a party to this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the day and year first above written.

 

ALCOA INC. By:  

 

Print Name:  

 

Date:  

 

SAUDI ARABIAN MINING COMPANY (MA’ADEN) By:  

 

Print Name:  

 

Date:  

 

 

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SCHEDULE 2

Articles of Association of the Companies

Articles of Association

Ma’aden Bauxite and Alumina Company

(Limited Liability Company)

It has been agreed by and between:

 

1. Saudi Arabian Mining Company (Ma’aden), a Saudi joint stock company
established under the Royal Decree No. m/17 dated 14/11/1417H, Commercial
Register No. 1010164391, Riyadh, dated 10/11/1421H, with its main office at
Riyadh City, P.O. Box 68861 Riyadh 11537.

 

2. Alcoa Inc., Commercial Registration No: ____/City: ______________ dated:
_________________, Main office at

to incorporate a limited liability company, (hereinafter referred to as the
“company” in accordance with Foreign Investment License No. (______) , dated
____________ issued by the Saudi Arabian General Investment Authority (“SAGIA”)
in accordance with the Companies Law , enacted pursuant to Royal Decree No. M/6
dated 23/3/1385H and its amendment and the Foreign Investment Law, enacted
pursuant to Royal Decree No. M/1 dated 5/1/1421H, and in accordance with the
provisions and conditions of this Articles of Association.

Article (1)

The name of the company is: “Ma’aden Bauxite and Alumina Company”, a Limited
Liability Company.

Article (2)

Objectives of the Company:

 

1. To perform independently or with other parties all mining and other
activities relating to the bauxite and alumina industries in all stages
including raw materials and final products.

 

2. To develop, operate and maintain bauxite mines, alumina refineries, power
generation plants, networks, roads, buildings and related facilities to meet the
Company’s objectives. To acquire the required licenses from the relevant
authorities to enable it to perform its objectives.

 

3. Wholesale and retail marketing in bauxite and alumina, with other metals in
their original or refined form.

Article (3)

Merger and Partnership:

The Company may own Shares in other existing companies and may merge with, and
shall have the right to establish its own or shared companies in mining,
aluminium industry and related industries, or participate with others to form
joint stock or limited liability companies to perform similar or complementary
activities, after satisfying the regulatory requirements. The Company may deal
in such Shares, provided that it shall not engage in financial brokerage for
such Shares.

 

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Article (4)

The Company Headquarters:

The Headquarters of the Company shall be based in the city of Jubail, and the
Company may transfer it’s headquarters to any other location in the Kingdom of
Saudi Arabia and may establish branches or offices inside the Kingdom.

Article (5)

Term of the Company:

The Company has been formed for a period of fifty (50) years starting from the
date of its registration in the Commercial Register. The duration of the Company
shall automatically be extended for similar periods unless one of the
Shareholders notifies the other of its desire not to continue the Company at
least three (3) years prior to the expiration of the initial or renewed period.

Article (6)

Capital:

The Share Capital of the Company is SR __________________ divided into
________________________ equal Shares. Each share is ten thousand Saudi Riyals
(SR 10.000) The paid up Capital is _________________________ divided into cash
shares between the Shareholders as follows:

 

Partner

   Total
Shares    Share
Value

1. Ma’aden

      10000

2. Alcoa

      10000

Article (7)

Increase or Decrease of the Capital:

The capital of the Company may be increased with the unanimous consent of all
Shareholders if the increase in the Company’s capital is effected by raising the
nominal value of Shareholders’ shares or by issuing new shares whose value must
be paid by all of the Shareholders in proportion to their respective
participation in the Company’s capital. Apart from the two methods referred to
above, the capital of the Company may be increased with the consent of the
majority of Shareholders representing at least three-fourths (3/4) of the
capital of the Company.

The Share capital of the Company may be decreased by a decision of the
Shareholders assembly, provided that it should not fall below the required
minimum, as follows:

 

(a) If the decrease is because the capital is in excess of the Company’s needs,
then the Company’s creditors shall be notified to show their objections within
sixty (60) days from the date of publishing the decision to decrease the capital
in a daily newspaper to be distributed in the Company’s headquarters. If a
creditor objects within the set time limit and presents his documents, the
Company shall immediately pay his debt or provide adequate guarantee if the debt
will be due in the future.

 

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(b) If the decrease in capital is due to a loss incurred by the Company, which
totals half of the Company’s capital, then no decrease in the Company’s capital
shall be effected.

Article (8)

Shares:

The Shares shall be freely transferable between the Shareholders or to their
legal successors. No Shareholder may assign any of its Shares to a third party,
with or without compensation, except after agreement by the other Shareholders,
and even though, the other Shareholders may regain such Share(s) released by one
of the Shareholders in accordance with Article (165) of the Companies
Regulations.

Article (9)

Share Register:

 

(a) The Company shall establish and keep in its head office a Share Register in
which it shall enter the names of the holders, the number of Shares owned by
each and all transactions affecting the Shares. No transfer of ownership of such
Shares shall be effective vis-à-vis the Company or any third party unless the
reason for the transfer of ownership is entered in the aforementioned Register.
The Register must contain all of the following information:

 

  1. The name, occupation, nationality, address and identity card number or
passport of each Shareholder,

 

  2. Number and value of the Shares owned by each Shareholder;

 

  3. Number and value of Shares which have been transferred, along with a
description of the manner in which the Shares were transferred - whether by
sale, purchase, inheritance, gift or otherwise;

 

  4. Name and signature of the transferor and the transferee;

 

  5. Date of the transfer;

 

  6. Total number and value of Shares owned by each Shareholder after any such
transfer.

 

(b) The pages of the Share Register shall be numbered serially. No page may be
detached nor any erasure or revision made to the information contained therein.

 

(c) A Shareholder shall have the right to examine the Share Register during the
normal working hours of the Company.

Article (10)

Management of the Company:

 

(a) The Company shall be managed by a Board of Managers composed of five
(5) managers appointed for a period of three (3) years as follows:

 

  1. Three (3) Managers, including the Chairman of the Board, to be appointed by
Saudi Arabian Mining Company (Ma’aden).

 

  2. Two (2) Managers appointed by Alcoa Inc.

 

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(b) Board of Managers Authorities:

The Board of Managers shall have the broadest possible authorities and powers to
manage the Company, which include the following. unless such authorities or
powers are reserved for the Shareholders under an operative enactment, or
provision in these articles or the shareholders agreement

 

  •  

Representing and managing the Company with full authorities to handle the
Company’s affairs and shall have the authority to represent the Company in its
relations with third parties, whether corporate or otherwise, and all judicial
governmental and nongovernmental bodies.

 

  •  

Representing the Company before banking and financial institutions, and all
types of companies and organizations and to obtain loans to achieve the
Company’s objectives.

 

  •  

Raising claims, allegations and law suits on behalf of the Company in courts, as
defendant or plaintiff. Attending court meetings, interviewing witnesses,
settling claims, receiving the Company’s entitlements, and arranging for the
settlement of the Company’s debts.

 

  •  

Appointing agents and attorneys for the Company and providing them with the
necessary authorities to defend the Company, raise claims, and request the
entitlements of the Company.

 

  •  

Signing all contracts and agreements, on behalf of the Company including, but
not limited to, leases, partnerships, company formation, mergers, liquidation,
amendments. Signing Shareholders resolutions for the formation of branches,
appointing manager and signing such documents before the notary public and the
Ministry of Commerce & Industry and SAGIA.

 

  •  

Follow-up with Ministry of Commerce & Industry, Municipality, Ministry of
Foreign Affairs, Passport Department, Saudi Communications, Ministry of Water &
Electricity, Saudi Industrial Development Fund, the General Investment Authority
and signing necessary forms and applications before authorized officers at such
governmental agencies.

 

  •  

Purchasing and selling Shares and attending Meetings of Boards of managers,
general assemblies of other companies in which the Company is a Shareholder
whether inside or outside the Kingdom and fully representing the company in such
companies.

 

  •  

Selling and purchasing, transferring of real estate, accepting and receiving
values, amending title documents, requesting amendments to limits of land and
real estates, and mortgaging lands and fixed assets necessary to promote the
Company’s business.

 

  •  

Preparing periodical reports, submitting recommendations to Shareholders general
assembly to improve the Company’s work and management, in accordance with the
forms and schedules approved for this purpose.

 

  •  

Preparing the Company general budget, accounts of profits and losses at the end
of each year, reports on the Company’s activities, financial status, suggestions
on profits, and submitting such reports to the Shareholders assembly together
with a copy to the Auditor’s report.

 

  •  

Authorization to sign at banks, opening bank accounts, deposit, draw, or request
various credit facilities and perform all banking operations in the Kingdom or
abroad to achieve the objectives of the Company.

 

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  •  

Forming one or more committees whenever the Board of managers deems it necessary
and taking any necessary action which serves the effectiveness of the Company.

 

  •  

Delegating and authorizing all or some of its authorities stated above to
others.

 

(a) Dismissal of Managers:

Each Shareholder may dismiss the Managers whom he has appointed.

 

(b) Board of Managers Meetings:

Meetings of the Board of Managers shall be held at the head office of the
Company or at such other places as may be agreed by a majority of the Board of
Managers. Meetings shall be held at such times as specified by the Chairman, any
two (2) Managers of the Board of Managers or any Shareholder, pursuant to a
fifteen (15) days notice to the Managers of the Board. The notice shall include
the agenda and all documents pertaining to the business to be transacted at the
Meeting. The Board may waive these requirements for notice by a unanimous vote
at the beginning of the Meeting and before any other business is transacted.

A Manager who is unable to attend a Meeting of the Board Of Managers or to take
any other necessary action may, by written notice to the Company, give a proxy
to any other Manager of the Board of Managers to vote and otherwise act on his
behalf in connection with any particular Meeting or matter.

The meeting of the Board of Managers shall not be valid unless convened by the
presence of at least one Member representing each Shareholder. If however, a
quorum is not obtained for a validly called for Meeting then the Meeting shall
be postponed for another date to be agreed upon by the Shareholders.

Meetings of the Board of Managers may be held by telephone or conference calls
other electronic means of communication which permit all managers present to be
heard by all others present, provided that the required forum is attained.

The Chairman of the Board of Managers shall preside all the Meetings of the
Board of Managers If the Chairman is unable to attend any Meeting, then the
present Board Members may agree on a substitute Chairman to chair the Meeting.
The Board shall appoint a Secretary to record the minutes of Meetings.

 

(b) Resolutions of the Board:

Each Manager of the Board of Managers shall have one (1) vote on any matter
presented to the Board for decision. Resolutions of the Board of Managers shall
be adopted by Simple Majority other than the resolutions which require the
affirmative vote of (75%) of the attending Managers. A resolution of the Board
of Managers may be issued by circulation if necessary and in such cases all
Managers of the Board of Managers will confirm their acceptance in writting. All
resolutions by circulation shall be presented to the Board in the following
Meeting and shall be attested in the minutes of that Meeting.

 

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Article (11)

Shareholders Meetings:

 

(a) The duly authorized representatives of each Shareholder shall have the right
to attend and take part in the deliberations of and vote at all Shareholder
Meetings.

 

(b) Shareholder Meetings shall be held at the head office of the Company or at
such other places as may be agreed by the Shareholders. Shareholder Meetings
shall be convened pursuant to a thirty (30) days notice to the Shareholders from
the Chairman of the Board of Managers and the Company accounts Controller.
Notice of each Shareholder Meeting shall include the agenda and all documents
concerning the business to be transacted at the Meeting.

 

(c) The Chairman of the Board of Managers shall call for an annual general
Meeting within six (6) months after the close of each fiscal year of the Company
to:

 

  (i) review and approve the report of the Board of Managers concerning the
management and administration of the Company;

 

  (ii) review and approve the auditor’s report for the preceding fiscal year;

 

  (iii) consider and take any appropriate decision in relation to any of the
foregoing matters;

 

  (iv) appoint or reappoint auditors to audit the Company’s accounts for the
ensuing fiscal year and determine their fees.

 

  (v) discuss and decide upon any other business or matter relating to the
Company.

 

(d) The presence of the duly authorized representatives of all Shareholders
shall be necessary to constitute a valid quorum. If, however, a quorum is not
obtained at a validly called Meeting, then the Meeting shall be postponed and
convened later by agreement of the Shareholders. This posponed Meeting shall be
valid with the attendance of any number of the Shareholders present.

 

(e) The Shareholders shall designate, from among those appointed to represent
each of them at general Meetings, one person who shall chair the Meetings of the
Shareholders’assembly. The Chairman shall select a person to act as the
Secretary for the Meeting and that person will ensure that an adequate and
accurate record of Shareholder Meetings is made and kept.

Article (12)

Shareholder Resolutions:

Shareholder resolutions shall be adopted as follows:

 

a. by unanimous approval in relation to any reseloution to change the Company’s
name or nationality or increase or decrease the financial liability of the
Shareholders.

 

b. By approval of Shareholders who together own at least 75% of the Company’s
capital in relation to any amendment to the Articles of Association of the
Company, appointment or removal of the external auditor, or Board of Managers
remuneration ; or distribution of profit, or voluntary reserve; and

 

c. except as mentioned in articles (A) and (B) above, resolutions adopted by the
approval of Shareholders who own at least fifty one (51%) of the Company’s
capital.

 

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Article (13)

Books of Accounts and Annual Financial Statements:

 

(a) The Board of Managers shall cause the Company to maintain proper books of
accounts and complete and accurate records regarding:

 

  (i) all income and expenditures of the Company;

 

  (ii) all contracts entered into by the Company;

 

  (iii) all purchases and sales made by the Company; and

 

  (iv) the assets and liabilities of the Company.

 

(b) All books of account and records shall be maintained in accordance with
generally accepted accounting principles and the regulations of the Kingdom and
kept at the head office of the Company.

Article (14)

Auditors:

The Shareholder(s) shall cause an Auditor to be appointed annually by a
resolution taken at a general Meeting by Shareholders holding at least seventy
five percent (75%) of the Company’s capital. The Auditor must be licensed to
practice in the Kingdom in accordance with the Auditors’ Regulations. The
Auditor shall ensure that the Articles of Association of the Company and the
Companies Regulations are being properly applied. He shall review all
inventories and final annual accounts and inspect the balance sheet and submit
an annual report to each Shareholder and to the Board of Managers. For that
purpose he may review all the Company’s books, documents and contracts entered
into with third parties and may request clarification and information as he
deems necessary. The Shareholders shall determine the auditor’s annual
remuneration on an annual basis.

Article (15)

Fiscal Year:

 

(a) The fiscal year of the Company shall commence on the date of its
registration in the Commercial Register and end on H corresponding to
__________G. and each fiscal year shall be twelve(12) months.

 

(b) The Board of Managers shall, within four (4) months following the end of
such fiscal year, prepare a balance sheet, profit and loss account, and a report
describing the Company’s activities and financial position, and its
recommendations as to the distribution of profits. The Board shall send copies
of these documents to each Shareholder and to the Companies’ Department at the
Ministry of Commerce and Industry , together with a copy of the auditor’s
report, within two (2) months of their date of preparation.

Article (16)

Distribution of Profits and Losses:

The annual net profits of the Company, after deduction of depreciation,
operating expenses and general expenses, shall be distributed as follows:

 

(a) The Company shall set aside four percent (4%) of such profits to constitute
the statutory reserve required by Article 176 of the Companies Act. The Company
may cease setting aside this reserve when it reaches fifty percent (50%) of the
Share capital of the Company.

 

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(b) The balance of the profits shall be distributed to the Shareholders pro rata
to the percentage of the Shares owned by each Shareholder, unless the
Shareholders decide to establish other reserves, or carry forward or transfer
all or a portion of the profits for the next fiscal year.

 

(c) Losses shall be borne by the Shareholders pro-rata to their Shareholding, or
if the Shareholders so agree, carry it over to the next fiscal year. No profits
shall be distributed until the losses are fully covered. If the Company’s losses
reach fifty percent (50%) of its capital the Board of Managers must call the
Shareholders to a Meeting within a period not to exceed thirty (30) days from
the date on which the losses reach this level in order to consider whether to
continue the Company, in which case the Shareholders must undertake to pay its
debts, or to dissolve it. The resolution of the Shareholders in this respect
shall not be valid unless it is issued in accordance with Article 173 of the
Companies Act, and the resolution must in all cases be published in the manner
provided in Article 164 of the Companies Act. If the Company continues its
business without the issuance of a resolution to continue it pursuant to the
foregoing conditions, or to dissolve it, the Shareholders shall become jointly
and severally liable to pay all of the Company’s debts and any interested party
may request that it be dissolved.

Article (17)

Company Dissolution & Liquidation:

The Company may be dissolved for any of the reasons for dissolution contained in
Article (15) of the Companies Act. Upon the Company’s dissolution it shall enter
the stage of liquidation in accordance with the provisions of Chapter 11 of the
Companies Act. In case of voluntary liquidation, the following must be observed:

 

  1) The Shareholders shall appoint one or more liquidator(s) for purposes of
liquidating the Company and shall determine their authority and fees.

 

  2) A report certified by a chartered accountant licensed to practice in the
Kingdom shall be prepared regarding the financial status of the Company as of
the date of issuance of the Shareholder resolution to dissolve and liquidate the
Company and specifying the Company’s ability to discharge its obligations and
its debts vis-a-vis third parties.

 

  3) All entitlements of creditors must be paid in full or a settlement entered
into with them. Otherwise, the Company shall not be liquidated until after a
decision is issued by the Board of Grievances announcing the bankruptcy of the
Company pursuant to a request by the creditors or the Shareholders.

Article (18)

Company Documents:

The Company’s letterhead shall clearly show the name of the Company, followed by
the phrase “a limited liability company,” as well as the address of its head
office, its commercial registration number and its capital. All other documents
shall comply with all applicable rules and regulations.

 

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Article (19)

Notices:

All notices given hereunder between Shareholders or with the Company shall be
deemed to be sufficiently delivered by postpaid registered mail to their
addresses as indicated in the Register of Shares referred in article (9) of
these articles.

Article (20)

Miscellaneous:

 

(a) The Company is subject to all laws and regulations prevailing in the Kingdom
of Saudi Arabia.

 

(b) All other matters not specifically provided for herein, or not agreed
between the Shareholders shall be subject to the Companies Act.

Article (21)

Copies of Contract:

These Articles of Incorporation have been executed in eight copies of which each
Shareholder shall receive one copy. The remaining copies shall be submitted to
the concerned authorities for purposes of necessary official procedures. Ali
Saeed Al-Ahmari is hereby authorized by the counterparts to take whatever action
is necessary to complete the necessary procedures herein mentioned. In witness
whereof the two parties signed hereunder.

 

Alcoa Inc.    

Saudi Arabian Mining Company

(Ma’aden).

         

Signature.

    Signature.

 

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Articles of Association

Ma’aden Rolling Company

(Limited Liability Company)

It has been agreed by and between:

 

1. Saudi Arabian Mining Company (Ma’aden), a Saudi joint stock company
established under the Royal Decree No. m/17 dated 14/11/1417H, Commercial
Register No. 1010164391, Riyadh, dated 10/11/1421H, with its main office at
Riyadh City, P.O. Box 68861 Riyadh 11537.

 

2. Alcoa Inc., Commercial Registration No: ______/City: _____________________
dated: _______________________, Main office at

to incorporate a limited liability company, (hereinafter referred to as the
“Company” in accordance with Foreign Investment License No. (_______) , dated
_________________ issued by the Saudi Arabian General Investment Authority
(“SAGIA”) in accordance with the Companies Law , enacted pursuant to Royal
Decree No. M/6 dated 23/3/1385H and its amendment and the Foreign Investment
Law, enacted pursuant to Royal Decree No. M/1 dated 5/1/1421H, and in accordance
with the provisions and conditions of this Articles of Association.

Article (1)

The name of the company is: “Ma’aden Rolling Company”, a Limited Liability
Company.

Article (2)

Objectives of the Company:

 

1. To perform independently or with other parties all mining activities relating
to the aluminum rolling mill industry in all its stages, including raw materials
and final products.

 

2. To develop, manage, operate and maintain aluminum rolling mills, power
generation plants, networks, roads, buildings and related facilities to meet the
Company’s objectives. To acquire the required licenses from the relevant
authorities to enable it to perform its objectives.

 

3. Wholesale and retail marketing in aluminum metal and its alloys with other
metals in their original or refined form.

Article (3)

Merger and Partnership:

The Company may own Shares in other existing companies and may merge with, and
shall have the right to establish its own or shared companies in mining,
aluminum industry and related industries, or participate with others to form
joint stock or limited liability companies to perform similar or complementary
activities, after satisfying the regulatory requirements. The Company may deal
in such Shares, provided that it shall not engage in financial brokerage for
such Shares.

 

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Article (4)

The Company Headquarters:

The Headquarters of the Company shall be based in the city of Jubail, and the
Company may transfer it’s headquarters to any other location in the Kingdom of
Saudi Arabia and may establish branches or offices inside or outside the
Kingdom.

Article (5)

Term of the Company:

The Company has been formed for a period of fifty (50) years starting from the
date of its registration in the Commercial Register. The duration of the Company
shall automatically be extended for similar periods unless one of the
Shareholders notifies the other of its desire not to continue the Company at
least three (3) years prior to the expiration of the initial or renewed period.

Article (6)

Capital:

The Share Capital of the Company is SR _____________________ divided into
___________________ equal Shares. Each share is ten thousand Saudi Riyals (SR
10.000) The paid up Capital is ______________________ divided into cash shares
between the Shareholders as follows:

 

Partner

   Total
Shares    Share
Value    No. of
Paid Shares    Value of
Paid Share    Total    %  

1. Ma’aden

      10000             —   % 

2. Alcoa

      10000             —   % 

Shareholders hereby acknowledge that the Company has paid part of the Capital,
deposited at an authorized bank and the related certificate has been obtained.

Article (7)

Increase or Decrease of the Capital:

The capital of the Company may be increased with the unanimous consent of all
Shareholders if the increase in the Company’s capital is effected by raising the
nominal value of Shareholders’ shares or by issuing new shares whose value must
be paid by all of the Shareholders in proportion to their respective
participation in the Company’s capital. Apart from the two methods referred to
above, the capital of the Company may be increased with the consent of the
majority of Shareholders representing at least three-fourths (3/4) of the
capital of the Company.

The Share capital of the Company may be decreased by a decision of the
Shareholders assembly, provided that it should not fall below the required
minimum, as follows:

 

(a) If the decrease is because the capital is in excess of the Company’s needs,
then the Company’s creditors shall be notified to show their objections within
sixty (60) days from the date of publishing the decision to decrease the capital
in a daily newspaper to be distributed in the Company’s headquarters. If a
creditor objects within the set time limit and presents his documents, the
Company shall immediately pay his debt or provide adequate guarantee if the debt
will be due in the future.

 

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(b) If the decrease in capital is due to a loss incurred by the Company, which
totals half of the Company’s capital, then no decrease in the Company’s capital
shall be effected.

Article (8)

Shares:

The Shares shall be freely transferable between the Shareholders or to their
legal successors. No Shareholder may assign any of its Shares to a third party,
with or without compensation, except after agreement by the other Shareholders,
and even though, the other Shareholders may regain such Share(s) released by one
of the Shareholders in accordance with Article (165) of the Companies
Regulations.

Article (9)

Share Register:

 

(a) The Company shall establish and keep in its head office a Share Register in
which it shall enter the names of the holders, the number of Shares owned by
each and all transactions affecting the Shares. No transfer of ownership of such
Shares shall be effective vis-à-vis the Company or any third party unless the
reason for the transfer of ownership is entered in the aforementioned Register.
The Register must contain all of the following information:

 

  1. The name, occupation, nationality, address and identity card number or
passport of each Shareholder,

 

  2. Number and value of the Shares owned by each Shareholder;

 

  3. Number and value of Shares which have been transferred, along with a
description of the manner in which the Shares were transferred - whether by
sale, purchase, inheritance, gift or otherwise;

 

  4. Name and signature of the transferor and the transferee;

 

  5. Date of the transfer;

 

  6. Total number and value of Shares owned by each Shareholder after any such
transfer.

 

(b) The pages of the Share Register shall be numbered serially. No page may be
detached nor any erasure or revision made to the information contained therein.

 

(c) A Shareholder shall have the right to examine the Share Register during the
normal working hours of the Company.

Article (10)

Management of the Company:

 

(a) The Company shall be managed by a Board of Managers composed of five
(5) managers appointed for a period of three(3) years as follows:

 

  1. Three (3) Managers, including the Chairman of the Board, to be appointed by
Saudi Arabian Mining Company (Ma’aden).

 

  2. Two (2) Managers appointed by Alcoa Inc.

 

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(b) Board of Managers Authorities

The Board of Managers shall have the broadest possible authorities and powers to
manage the Company, which include the following, unless such authorities or
powers are reserved for the Shareholders under an operative enactment, or
provision in these articles or the shareholders agreement.

 

  •  

Representing and managing the Company with full authorities to handle the
Company’s affairs and shall have the authority to represent the Company in its
relations with third parties, whether corporate or otherwise, and all judicial
governmental and nongovernmental bodies.

 

  •  

Representing the Company before banking and financial institutions, and all
types of companies and organizations and to obtain loans to achieve the
Company’s objectives.

 

  •  

Raising claims, allegations and law suits on behalf of the Company in courts, as
defendant or plaintiff. Attending court meetings, interviewing witnesses,
settling claims, receiving the Company’s entitlements, and arranging for the
settlement of the Company’s debts.

 

  •  

Appointing agents and attorneys for the Company and providing them with the
necessary authorities to defend the Company, raise claims, and request the
entitlements of the Company.

 

  •  

Signing all contracts and agreements, on behalf of the Company including, but
not limited to, leases, partnerships, company formation, mergers, liquidation,
amendments. Signing Shareholders resolutions for the formation of branches,
appointing Manager and signing such documents before the notary public and the
Ministry of Commerce & Industry and SAGIA.

 

  •  

Follow- up with Ministry of Commerce & Industry, Municipality, Ministry of
Foreign Affairs, Passport Department, Saudi Communications, Ministry of Water &
Electricity, Saudi Industrial Development Fund, the General Investment Authority
and signing necessary forms and applications before authorized officers at such
governmental agencies.

 

  •  

Purchasing and selling Shares and attending Meetings of Boards of Managers,
general assemblies of other companies in which the Company is a Shareholder
whether inside or outside the Kingdom and fully representing the Company in such
companies.

 

  •  

Selling and purchasing, transferring of real estate, accepting and receiving
values, amending title documents, requesting amendments to limits of land and
real estates, and mortgaging lands and fixed assets necessary to promote the
Company’s business.

 

  •  

Preparing periodical reports, submitting recommendations to Shareholders general
assembly to improve the Company’s work and management, in accordance with the
forms and schedules approved for this purpose.

 

  •  

Preparing the Company general budget, accounts of profits and losses at the end
of each year, reports on the Company’s activities, financial status, suggestions
on profits, and submitting such reports to the Shareholders assembly together
with a copy to the Auditor’s report.

 

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  •  

Authorization to sign at banks, opening bank accounts, deposit, draw, or request
various credit facilities and perform all banking operations in the Kingdom or
abroad to achieve the objectives of the Company.

 

  •  

Forming one or more committees whenever the Board of managers deems it necessary
and taking any necessary action which serves the effectiveness of the Company.

 

  •  

Delegating and authorizing all or some of its authorities stated above to
others.

 

(c) Dismissal of Managers:

Each Shareholder may dismiss the Managers whom he has appointed.

 

(d) Board of Managers Meetings:

Meetings of the Board of Managers shall be held at the head office of the
Company or at such other places as may be agreed by a majority of the Board of
Managers. Meetings shall be held at such times as specified by the Chairman, any
two (2) managers of the Board of Managers or any Shareholder, pursuant to a
fifteen (15) days notice to the Managers of the Board. The notice shall include
the agenda and all documents pertaining to the business to be transacted at the
Meeting. The Board may waive these requirements for notice by a unanimous vote
at the beginning of the Meeting and before any other business is transacted.

A Manager who is unable to attend a Meeting of the Board of Managers or to take
any other necessary action may, by written notice to the Company, give a proxy
to any other Manager of the Board of Managers to vote and otherwise act on his
behalf in connection with any particular Meeting or matter.

The meeting of the Board of Managers shall not be valid unless convened in the
presence of at least one Member representing each Shareholder. If however, a
quorum is not obtained for a validly called for Meeting then the Meeting shall
be postponed for another date to be agreed upon by the Shareholders.

Meetings of the Board of Managers may be held by telephone conference calls or
other electronic means of communication which permit all Managers present to be
heard by all others present, provided that the required forum is attained.

The Chairman of the Board of Managers shall preside all the Meetings of the
Board of Managers, if the Chairman is unable to attend any Meeting, then the
present Board Members may agree on a substitute Chairman to chair the Meeting.
The Board shall appoint a Secretary to record the minutes of Meetings.

 

(e) Resolutions of the Board:

Each manager of the Board of Managers shall have one (1) vote on any matter
presented to the Board for decision. Resolutions of the Board of Managers shall
be adopted by Simple Majority other than the resolutions which require the
affirmative vote of (75%) of the attending Managers. A

 

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resolution of the Board of Managers may be issued by circulation if necessary
and in such cases all Managers of the Board of Managers will confirm their
acceptance in writting. All resolutions by circulation shall be presented to the
Board in the following Meeting and shall be attested in the minutes of that
Meeting.

Article (11)

Shareholders Meetings:

 

(a) The duly authorized representatives of each Shareholder shall have the right
to attend and take part in the deliberations of and vote at all Shareholder
Meetings.

 

(b) Shareholder Meetings shall be held at the head office of the Company or at
such other places as may be agreed by the Shareholders. Shareholder Meetings
shall be convened pursuant to a thirty (30) days notice to the Shareholders from
the Chairman of the Board of Managers and the Company accounts Controller.
Notice of each Shareholder Meeting shall include the agenda and all documents
concerning the business to be transacted at the Meeting.

 

(c) The Chairman of the Board of Managers shall call for an annual general
Meeting within six (6) months after the close of each fiscal year of the Company
to:

 

  (i) review and approve the report of the Board of Managers concerning the
management and administration of the Company;

 

  (ii) review and approve the auditor’s report for the preceding financial year;

 

  (iii) consider and take any appropriate decision in relation to any of the
foregoing matters;

 

  (iv) appoint or reappoint auditors to audit the Company’s accounts for the
ensuing fiscal year and determine their fees.

 

  (v) discuss and decide upon any other business or matter relating to the
Company.

 

(d) The presence of the duly authorized representatives of all Shareholders
shall be necessary to constitute a valid quorum. If, however, a quorum is not
obtained at a validly called Meeting, then the Meeting shall be postponed and
convened later by agreement of the Shareholders. This posponed Meeting shall be
valid with the attendance of any number of the Shareholders present.

 

(e) The Shareholders shall designate, from among those appointed to represent
each of them at general Meetings, one person who shall chair the Meetings of the
Shareholders’ assembly. The Chairman shall select a person to act as the
Secretary for the Meeting and that person will ensure that an adequate and
accurate record of Shareholder Meetings is made and kept.

Article (12)

Shareholder Resolutions:

Shareholder resolutions shall be adopted as follows:

 

(a) by unanimous approval in relation to any resolution to change the Company’s
name or nationality or increase or decrease the financial liability of the
Shareholders.

 

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(b) By approval of Shareholders who together own at least 75% of the company’s
capital in relation to any amendment to the Articles of Association of the
Company, appointment or removal of the external auditor, or Board of Managers
remuneration; or distribution of profit, or voluntary reserve; and

 

(c) except as mentioned in articles (A) and (B) above, resolutions adopted by
the approval of Shareholders who own at least fifty one (51%) of the Company’s
capital.

Article (13)

Books of Accounts and Annual Financial Statements:

 

(a) The Board of Managers shall cause the Company to maintain proper books of
accounts and complete and accurate records regarding:

 

  (i) all income and expenditures of the Company;

 

  (ii) all contracts entered into by the Company;

 

  (iii) all purchases and sales made by the Company; and

 

  (iv) the assets and liabilities of the Company.

 

(b) All books of account and records shall be maintained in accordance with
generally accepted accounting principles and the regulations of the Kingdom and
kept at the head office of the Company.

Article (14)

Auditors:

The Shareholder(s) shall cause an Auditor to be appointed annually by a
resolution taken at a general Meeting by Shareholders holding at least seventy
five percent (75%) of the Company’s capital. The Auditor must be licensed to
practice in the Kingdom in accordance with the Auditors’ Regulations. The
Auditor shall ensure that the Articles of Association of the Company and the
Companies Regulations are being properly applied. He shall review all
inventories and final annual accounts and inspect the balance sheet and submit
an annual report to each Shareholder and to the Board of Managers. For that
purpose he may review all the Company’s books, documents and contracts entered
into with third parties and may request clarification and information as he
deems necessary. The Shareholders shall determine the auditor’s annual
remuneration on an annual basis.

Article (15)

Fiscal Year:

 

(a) The fiscal year of the Company shall commence on the date of its
registration in the Commercial Register and end on H corresponding to
__________G, and each fiscal year shall be twelve(12) months.

 

(b) The Board of Managers shall, within four (4) months following the end of
such fiscal year, prepare a balance sheet, profit and loss account, and a report
describing the Company’s activities and financial position, and its
recommendations as to the distribution of profits. The Board shall send copies
of these documents to each Shareholder and to the Companies’ Department at the
Ministry of Commerce and Industry , together with a copy of the auditor’s
report, within two (2) months of their date of preparation.

 

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Article (16)

Distribution of Profits and Losses:

The annual net profits of the Company, after deduction of depreciation,
operating expenses and general expenses, shall be distributed as follows:

 

(a) The Company shall set aside four percent (4%) of such profits to constitute
the statutory reserve required by Article 176 of the Companies Act. The Company
may cease setting aside this reserve when it reaches fifty percent (50%) of the
Share capital of the Company.

 

(b) The balance of the profits shall be distributed to the Shareholders pro rata
to the percentage of the Shares owned by each Shareholder, unless the
Shareholders decide to establish other reserves, or carry forward or transfer
all or a portion of the profits for the next fiscal year.

 

(c) Losses shall be borne by the Shareholders pro-rata to their Shareholding, or
if the Shareholders so agree, carry it over to the next fiscal year. No profits
shall be distributed until the losses are fully covered. If the Company’s losses
reach fifty percent (50%) of its capital the Board of Managers must call the
Shareholders to a Meeting within a period not to exceed thirty (30) days from
the date on which the losses reach this level in order to consider whether to
continue the Company, in which case the Shareholders must undertake to pay its
debts, or to dissolve it. The resolution of the Shareholders in this respect
shall not be valid unless it is issued in accordance with Article 173 of the
Companies Act, and the resolution must in all cases be published in the manner
provided in Article 164 of the Companies Act. If the Company continues its
business without the issuance of a resolution to continue it pursuant to the
foregoing conditions, or to dissolve it, the Shareholders shall become jointly
and severally liable to pay all of the Company’s debts and any interested party
may request that it be dissolved.

Article (17)

Company Dissolution & Liquidation:

The Company may be dissolved for any of the reasons for dissolution contained in
Article (15) of the Companies Act. Upon the Company’s dissolution it shall enter
the stage of liquidation in accordance with the provisions of Chapter 11 of the
Companies Act. In case of voluntary liquidation, the following must be observed:

 

  1) The Shareholders shall appoint one or more liquidator(s) for purposes of
liquidating the Company and shall determine their authority and fees.

 

  2) A report certified by a chartered accountant licensed to practice in the
Kingdom shall be prepared regarding the financial status of the Company as of
the date of issuance of the Shareholder resolution to dissolve and liquidate the
Company and specifying the Company’s ability to discharge its obligations and
its debts vis-a-vis third parties.

 

  3) All entitlements of creditors must be paid in full or a settlement entered
into with them. Otherwise, the Company shall not be liquidated until after a
decision is issued by the Board of Grievances announcing the bankruptcy of the
Company pursuant to a request by the creditors or the Shareholders.

 

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Article (18)

Company Documents:

The Company’s letterhead shall clearly show the name of the Company, followed by
the phrase “a limited liability company,” as well as the address of its head
office, its commercial registration number and its capital. All other documents
shall comply with all applicable rules and regulations.

Article (19)

Notices:

All notices given hereunder between Shareholders or with the Company shall be
deemed to be sufficiently delivered by postpaid registered mail to their
addresses as indicated in the Register of Shares referred in article(9) of these
articles.

Article (20)

Miscellaneous:

 

(a) The Company is subject to all laws and regulations prevailing in the Kingdom
of Saudi Arabia.

 

(b) All other matters not specifically provided for herein, or not agreed
between the Shareholders shall be subject to the Companies Act.

Article (21)

Copies of Contract:

These Articles of Incorporation have been executed in eight copies of which each
Shareholder shall receive one copy. The remaining copies shall be submitted to
the concerned authorities for purposes of necessary official procedures. Ali
Saeed Al-Ahmari is hereby authorized by the counterparts to take whatever action
is necessary to complete the necessary procedures herein mentioned. In witness
whereof the two parties signed hereunder.

 

Alcoa Inc.    

Saudi Arabian Mining Company

(Ma’aden).

         

Signature.

    Signature.

 

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Articles of Association

Ma’aden Aluminium Company

(Limited Liability Company)

It has been agreed by and between:

 

1. Saudi Arabian Mining Company (Ma’aden), a Saudi joint stock company
established under the Royal Decree No. m/17 dated 14/11/1417H, Commercial
Register No. 1010164391, Riyadh, dated 10/11/1421H, with its main office at
Riyadh City, P.O. Box 68861 Riyadh 11537.

 

2. Alcoa Inc., Commercial Registration No: _____/City: ______________ dated:
__________________, Main office at

to incorporate a limited liability company, (hereinafter referred to as the
“Company” in accordance with Foreign Investment License No. (_______) , dated
_____________ issued by the Saudi Arabian General Investment Authority (“SAGIA”)
in accordance with the Companies Law , enacted pursuant to Royal Decree No. M/6
dated 22/3/1385H and its amendment and the Foreign Investment Law, enacted
pursuant to Royal Decree No. M/1 dated 5/1/1421H, and in accordance with the
provisions and conditions of this Articles of Association.

Article (1)

The name of the company is: “Ma’aden Aluminium Company”, a Limited Liability
Company.

Article (2)

Objectives of the Company:

 

1. To perform independently or with other parties all mining and other
activities relating to the aluminum smelting industry in all its stages
including raw materials and final products.

 

2. To develop, operate and maintain aluminum smelters, power generation plants,
networks, roads, buildings and related facilities to meet the Company’s
objectives. To acquire the required licenses from the relevant authorities to
enable it to perform its objectives.

 

3. Wholesale and retail marketing in refined aluminum metal and its alloys with
other metals in their original or refined form.

Article (3)

Merger and Partnership:

The Company may own Shares in other existing companies and may merge with, and
shall have the right to establish its own or shared companies in mining,
aluminium industry and related industries, or participate with others to form
joint stock or limited liability companies to perform similar or complementary
activities, after satisfying the regulatory requirements. The Company may deal
in such Shares, provided that it shall not engage in financial brokerage for
such Shares.

 

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Article (4)

The Company Headquarters:

The Headquarters of the Company shall be based in the city of Jubail, and the
Company may transfer its headquarters to any other location in the Kingdom of
Saudi Arabia and may establish branches or offices inside the Kingdom.

Article (5)

Term of the company:

The Company has been formed for a period of fifty (50) years starting from the
date of its registration in the Commercial Register. The duration of the Company
shall automatically be extended for similar periods unless one of the
Shareholders notifies the other of its desire not to continue the Company at
least three (3) years prior to the expiration of the initial or renewed period.

Article (6)

Capital:

The Share Capital of the Company is SR ________________ divided into
_______________________ equal Shares. Each share is ten thousand Saudi Riyals
(SR 10.000). The paid up Capital is _________________________________ divided
into cash shares between the Shareholders as follows:

 

Partner

   Total
Shares    Share
Value    No. of
Paid Shares    Value of
Paid Share    Total    %  

1. Ma’aden

      10000             —   % 

2. Alcoa

      10000             —   % 

Shareholders hereby acknowledge that the Company has paid part of the Capital,
deposited at an authorized bank and the related certificate has been obtained.

Article (7)

Increase or Decrease of the Capital:

The capital of the Company may be increased with the unanimous consent of all
Shareholders if the increase in the Company’s capital is effected by raising the
nominal value of Shareholders’ shares or by issuing new shares whose value must
be paid by all of the Shareholders in proportion to their respective
participation in the Company’s capital. Apart from the two methods referred to
above, the capital of the Company may be increased with the consent of the
majority of Shareholders representing at least three-fourths (3/4) of the
capital of the Company.

The Share capital of the Company may be decreased by a decision of the
Shareholders assembly, provided that it should not fall below the required
minimum, as follows:

 

(a) If the decrease is because the capital is in excess of the Company’s needs,
then the Company’s creditors shall be notified to show their objections within
sixty (60) days from the date of publishing the decision to decrease the capital
in a daily newspaper to be distributed in the Company’s headquarters. If a
creditor objects within the set time limit and presents his documents, the
Company shall immediately pay his debt or provide adequate guarantee if the debt
will be due in the future.

 

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(b) If the decrease in capital is due to a loss incurred by the Company, which
totals half of the Company’s capital, then no decrease in the Company’s capital
shall be effected.

Article (8)

Shares:

The Shares shall be freely transferable between the Shareholders or to their
legal successors. No Shareholder may assign any of its Shares to a third party,
with or without compensation, except after agreement by the other Shareholders,
and even though, the other Shareholders may regain such Share(s) released by one
of the Shareholders in accordance with Article (165) of the Companies
Regulations.

Article (9)

Share Register:

 

(a) The Company shall establish and keep in its head office a Share Register in
which it shall enter the names of the holders, the number of Shares owned by
each and all transactions affecting the Shares. No transfer of ownership of such
Shares shall be effective vis-à-vis the Company or any third party unless the
reason for the transfer of ownership is entered in the aforementioned Register.
The Register must contain all of the following information:

 

  1. The name, occupation, nationality, address and identity card number or
passport of each Shareholder,

 

  2. Number and value of the Shares owned by each Shareholder;

 

  3. Number and value of Shares which have been transferred, along with a
description of the manner in which the Shares were transferred - whether by
sale, purchase, inheritance, gift or otherwise;

 

  4. Name and signature of the transferor and the transferee;

 

  5. Date of the transfer;

 

  6. Total number and value of Shares owned by each Shareholder after any such
transfer.

 

(b) The pages of the Share Register shall be numbered serially. No page may be
detached nor any erasure or revision made to the information contained therein.

 

(c) A Shareholder shall have the right to examine the Share Register during the
normal working hours of the Company.

Article (10)

Management of the Company:

 

(a) The Company shall be managed by a Board of Managers composed of five
(5) managers appointed for a period of three (3) years as follows:

 

  1. Three (3) Managers, including the Chairman of the Board, to be appointed by
Saudi Arabian Mining Company (Ma’aden).

 

  2. Two (2) Managers appointed by Alcoa Inc.

 

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(b) Board of Managers Authorities

The Board of Managers shall have the broadest possible authorities and powers to
manage the Company, which include the following, unless such authorities or
powers are reserved for the Shareholders under an operative enactment, or
provision in these articles or the shareholders agreement.

 

  •  

Representing and managing the Company with full authorities to handle the
Company’s affairs and shall have the authority to represent the Company in its
relations with third parties, whether corporate or otherwise, and all judicial
governmental and nongovernmental bodies.

 

  •  

Representing the Company before banking and financial institutions, and all
types of companies and organizations and to obtain loans to achieve the
Company’s objectives.

 

  •  

Raising claims, allegations and law suits on behalf of the Company in courts, as
defendant or plaintiff. Attending court meetings, interviewing witnesses,
settling claims, receiving the Company’s entitlements, and arranging for the
settlement of the Company’s debts.

 

  •  

Appointing agents and attorneys for the Company and providing them with the
necessary authorities to defend the Company, raise claims, and request the
entitlements of the Company.

 

  •  

Signing all contracts and agreements, on behalf of the Company including, but
not limited to, leases, partnerships, company formation, mergers, liquidation,
amendments. Signing Shareholders resolutions for the formation of branches,
appointing manager and signing such documents before the notary public and the
Ministry of Commerce & Industry and SAGIA.

 

  •  

Follow up with Ministry of Commerce & Industry, Municipality, Ministry of
Foreign Affairs, Passport Department, Saudi Communications, Ministry of Water &
Electricity, Saudi Industrial Development Fund, the General Investment Authority
and signing necessary forms and applications before authorized officers at such
governmental agencies.

 

  •  

Purchasing and selling Shares and attending Meetings of Boards of managers,
general assemblies of other companies in which the Company is a Shareholder
whether inside or outside the Kingdom and fully representing the Company in such
companies.

 

  •  

Selling and purchasing, transferring of real estate, accepting and receiving
values, amending title documents, requesting amendments to limits of land and
real estates, and mortgaging lands and fixed assets necessary to promote the
Company’s business.

 

  •  

Preparing periodical reports, submitting recommendations to Shareholders general
assembly to improve the Company’s work and management, in accordance with the
forms and schedules approved for this purpose.

 

  •  

Preparing the Company general budget, accounts of profits and losses at the end
of each year, reports on the company’s activities, financial status, suggestions
on profits, and submitting such reports to the Shareholders assembly together
with a copy of the Auditor’s report.

 

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  •  

Authorization to sign at banks, opening bank accounts, deposit, draw, or request
various credit facilities and perform all banking operations in the Kingdom or
abroad to achieve the objectives of the Company.

 

  •  

Forming one or more committees whenever the Board of Managers deems it necessary
and taking any necessary action which serves the effectiveness of the company.

 

  •  

Delegating and authorizing all or some of its authorities stated above to
others.

 

(c) Dismissal of Managers:

Each Shareholder may dismiss the Managers whom he has appointed.

 

(d) Board of Managers Meetings:

Meetings of the Board of Managers shall be held at the head office of the
Company or at such other places as may be agreed by a majority of the Board of
Managers. Meetings shall be held at such times as specified by the Chairman, any
two (2) managers of the Board of Managers or any Shareholder, pursuant to a
fifteen (15) days notice to the Managers of the Board. The notice shall include
the agenda and all documents pertaining to the business to be transacted at the
Meeting. The Board may waive these requirements for notice by a unanimous vote
at the beginning of the Meeting and before any other business is transacted.

A Manager who is unable to attend a Meeting of the Board of Managers or to take
any other necessary action may, by written notice to the Company, give a proxy
to any other Manager of the Board of Managers to vote and otherwise act on his
behalf in connection with any particular Meeting or matter.

The meeting of the Board of Managers shall not be valid unless convened in the
presence of at least one Member representing each Shareholder. If however, a
quorum is not obtained for a validly called for Meeting then the Meeting shall
be postponed for another date to be agreed upon by the Shareholders.

Meetings of the Board Of Managers may be held by telephone conference calls or
other electronic means of communication which permit all managers present to be
heard by all others present, provided that the required forum is attained.

The Chairman of the Board of Managers shall preside all the Meetings of the
Board of Managers. If the Chairman is unable to attend any Meeting, then the
present Board Members may agree on a substitute Chairman to chair the Meeting.
The Board shall appoint a Secretary to record the minutes of Meetings.

 

(e) Resolutions of the Board:

Each Manager of the Board of Managers shall have one (1) vote on any matter
presented to the Board for decision. Resolutions of the Board of Managers shall
be adopted by Simple Majority other than the resolutions which require the
affirmative vote of (75%) of the attending Managers. A

 

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resolution of the Board of Managers may be issued by circulation if necessary
and in such cases all Managers of the Board of Managers will confirm their
acceptance in writting. All resolutions by circulation shall be presented to the
Board in the following Meeting and shall be attested in the minutes of that
Meeting.

Article (11)

Shareholders Meetings:

 

(a) The duly authorized representatives of each Shareholder shall have the right
to attend and take part in the deliberations of and vote at all Shareholder
Meetings.

 

(b) Shareholder Meetings shall be held at the head office of the Company or at
such other places as may be agreed by the Shareholders. Shareholder Meetings
shall be convened pursuant to a thirty (30) days notice to the Shareholders from
the Chairman of the Board of Managers and the Company accounts Controller.
Notice of each Shareholder Meeting shall include the agenda and all documents
concerning the business to be transacted at the Meeting.

 

(c) The Chairman of the Board of Managers shall call for an annual general
Meeting within six (6) months after the close of each fiscal year of the Company
to:

 

  (i) review and approve the report of the Board of Managers concerning the
management and administration of the Company;

 

  (ii) review and approve the auditor’s report for the preceding fiscal year;

 

  (iii) consider and take any appropriate decision in relation to any of the
foregoing matters;

 

  (iv) appoint or reappoint auditors to audit the Company’s accounts for the
ensuing fiscal year and determine their fees.

 

  (v) discuss and decide upon any other business or matter relating to the
Company.

 

(d) The presence of the duly authorized representatives of all Shareholders
shall be necessary to constitute a valid quorum. If, however, a quorum is not
obtained at a validly called Meeting, then the Meeting shall be postponed and
convened later by agreement of the Shareholders. This posponed Meeting shall be
valid with the attendance of any number of the Shareholders present.

 

(e) The Shareholders shall designate, from among those appointed to represent
each of them at general Meetings, one person who shall chair the Meetings of the
Shareholders’ assembly. The Chairman shall select a person to act as the
Secretary for the Meeting and that person will ensure that an adequate and
accurate record of Shareholder Meetings is made and kept.

Article (12)

Shareholder Resolutions:

Shareholder resolutions shall be adopted as follows:

 

(a) by unanimous approval in relation to any resolution to change the Company’s
name or nationality or increase or decrease the financial liability of the
Shareholders.

 

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(b) By approval of Shareholders who together own at least 75% of the Company’s
capital in relation to any amendment to the Articles of Association of the
Company, appointment or removal of the external auditor, or Board of Managers
remuneration; or distribution of profit, or voluntary reserve; and.

 

(c) except as mentioned in articles (A) and (B) above, resolutions adopted by
the approval of Shareholders who own at least fifty one (51%) of the Company’s
capital

Article (13)

Books of Accounts and Annual Financial Statements:

 

(a) The Board of Managers shall cause the Company to maintain proper books of
accounts and complete and accurate records regarding:

 

  (i) all income and expenditures of the Company;

 

  (ii) all contracts entered into by the Company;

 

  (iii) all purchases and sales made by the Company; and

 

  (iv) the assets and liabilities of the Company.

 

(b) All books of account and records shall be maintained in accordance with
generally accepted accounting principles and the regulations of the Kingdom and
kept at the head office of the Company.

Article (14)

Auditors:

The Shareholder(s) shall cause an Auditor to be appointed annually by a
resolution taken at a general Meeting by Shareholders holding at least seventy
five percent (75%) of the Company’s capital. The Auditor must be licensed to
practice in the Kingdom in accordance with the Auditors’ Regulations. The
Auditor shall ensure that the Articles of Association of the Company and the
Companies Regulations are being properly applied. He shall review all
inventories and final annual accounts and inspect the balance sheet and submit
an annual report to each Shareholder and to the Board of Managers. For that
purpose he may review all the Company’s books, documents and contracts entered
into with third parties and may request clarification and information as he
deems necessary. The Shareholders shall determine the auditor’s annual
remuneration on an annual basis.

Article (15)

Fiscal Year:

 

(a) The first fiscal year of the Company shall commence on the date of its
registration in the Commercial Register and ends on H corresponding to
__________G. Each fiscal year after shall be twelve (12) months.

 

(b) The Board of Managers shall, within four (4) months following the end of
such fiscal year, prepare a balance sheet, profit and loss account, and a report
describing the Company’s activities and financial position, and its
recommendations as to the distribution of profits. The Board shall send copies
of these documents to each Shareholder and to the Companies’ Department at the
Ministry of Commerce and Industry , together with a copy of the auditor’s
report, within two (2) months of their date of preparation.

 

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Article (16)

Distribution of Profits and Losses:

The annual net profits of the Company, after deduction of depreciation,
operating expenses and general expenses, shall be distributed as follows:

 

(a) The Company shall set aside four percent (4%) of such profits to constitute
the statutory reserve required by Article 176 of the Companies Act. The Company
may cease setting aside this reserve when it reaches fifty percent (50%) of the
Share capital of the Company.

 

(b) The balance of the profits shall be distributed to the Shareholders pro rata
to the percentage of the Shares owned by each Shareholder, unless the
Shareholders decide to establish other reserves, or carry forward or transfer
all or a portion of the profits for the next fiscal year.

 

(c) Losses shall be borne by the Shareholders pro-rata to their Shareholding, or
if the Shareholders so agree, carry it over to the next fiscal year. No profits
shall be distributed until the losses are fully covered. If the Company’s losses
reach fifty percent (50%) of its capital the Board of Managers must call the
Shareholders to a Meeting within a period not to exceed thirty (30) days from
the date on which the losses reach this level in order to consider whether to
continue the Company, in which case the Shareholders must undertake to pay its
debts, or to dissolve it. The resolution of the Shareholders in this respect
shall not be valid unless it is issued in accordance with Article 173 of the
Companies Act, and the resolution must in all cases be published in the manner
provided in Article 164 of the Companies Act. If the Company continues its
business without the issuance of a resolution to continue it pursuant to the
foregoing conditions, or to dissolve it, the Shareholders shall become jointly
and severally liable to pay all of the Company’s debts and any interested party
may request that it be dissolved.

Article (17)

Company Dissolution & Liquidation:

The Company may be dissolved for any of the reasons for dissolution contained in
Article (15) of the Companies Act. Upon the Company’s dissolution it shall enter
the stage of liquidation in accordance with the provisions of Chapter 11 of the
Companies Act. In case of voluntary liquidation, the following must be observed:

 

(1) The Shareholders shall appoint one or more liquidator(s) for purposes of
liquidating the Company and shall determine their authority and fees.

 

(2) A report certified by a chartered accountant licensed to practice in the
Kingdom shall be prepared regarding the financial status of the Company as of
the date of issuance of the Shareholder resolution to dissolve and liquidate the
Company and specifying the Company’s ability to discharge its obligations and
its debts vis-a-vis third parties.

 

(3) All entitlements of creditors must be paid in full or a settlement entered
into with them. Otherwise, the Company shall not be liquidated until after a
decision is issued by the Board of Grievances announcing the bankruptcy of the
Company pursuant to a request by the creditors or the Shareholders.

 

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Article (18)

Company Documents:

The Company’s letterhead shall clearly show the name of the Company, followed by
the phrase “a limited liability company,” as well as the address of its head
office, its commercial registration number and its capital. All other documents
shall comply with all applicable rules and regulations.

Article (19)

Notices:

All notices given hereunder between Shareholders or with the Company shall be
deemed to be sufficiently delivered by postpaid registered mail to their
addresses as indicated in the Register of Shares referred in article (9) of
these articles.

Article (20)

Miscellaneous:

 

(a) The Company is subject to all laws and regulations prevailing in the Kingdom
of Saudi Arabia.

 

(b) All other matters not specifically provided for herein, or not agreed
between the Shareholders shall be subject to the Companies Act.

Article (21)

Copies of Contract:

These Articles of Incorporation have been executed in eight copies of which each
Shareholder shall receive one copy. The remaining copies shall be submitted to
the concerned authorities for purposes of necessary official procedures. Ali
Saeed Al-Ahmari is hereby authorized by the counterparts to take whatever action
is necessary to complete the necessary procedures herein mentioned. In witness
whereof the two parties signed hereunder.

 

Alcoa Inc.    

Saudi Arabian Mining Company

(Ma’aden).

         

Signature.

    Signature.

 

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SCHEDULE 3

Pre-Incorporation Costs

 

Project Development Costs Historical costs to 30 November 2009 (the “Calculation
Date”)

Period

   Cost (USD millions)

To end of April 2007

   42.2

1st May 2007 to 31 October 2008

   87.6

November 2008 to December 2008

   7.4

1st January 2009 to 30 September 2009

   110.1

1st October to 30 November 2009

   21.1

Cost of money*

   18.2

Total project cost at 30 November 2009

   286.6

 

* Based on averaged LIBOR + 1.5%

This is made up of US$228.4M of project costs and US$58.2M of Plant and
Equipment - primarily the contribution of the Project to the 380kV power line
and substation which will connect the Project to the national grid and is under
construction.

 

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SCHEDULE 4

Gas Allocation Letter

KINGDOM OF SAUDI ARABIA

Ministry of Petroleum & Mineral Resources

Office of the Minister

 

HE Fhaid Al-Shareef, Governor,

Saline Water Conversion Corporation

(SWCC)

P.O. Box 60889

Riyadh, 11555

Fax: (01)464-1854

  

Dr. Abdullah E. Dabbagh,

President & CEO

Saudi Arabian Mining Company

(MA’ADEN)

P.O. Box 68861

Riyadh 11537

Fax: (01) 472-1333

Regards,

Ref Letter dated 21/10/1430H, Corresponding to 10/10/2009 regarding your request
for the allocation of dry gas quantities for SWCC and Ma’ aden joint project for
the production of water and power, and Maaden Aluminum Project in Res Ez Zur,

We would like to inform you that the Ministry has allocated a total of 521
MMSCFD (based on 1080 BTU/SCF) of gas fuel and feedstock to Saline Water
Conversion Corporation (SWCC) and Saudi Arabian Mining Company (MA’ADEN)
combined project at Ras Az zur (the “Project”) until October 30, 2010. The
Ministry understands that the fuel/feedstock requirement of the Project is as
follows:

 

•  

500 MMSCFD (309 MMSCFD for SWCC and 191 MMSCFD for MA’ADEN) to produce Power and
Water required for both SWCC and MA’ADEN, and to export excess power to Saudi
Electricity Company (SEC).

 

•  

6 MMSCFD for MA’ADEN Aluminum Smelter Plant Process.

 

•  

15 MMSCFD for MA’ADEN Refinery Plant Process.

In addition, MA’ADEN will also require a maximum of 8 MBD (±20%) of Fuel Oil or
Arab Heavy Crude Oil for the Refinery boilers. It must be noted that, this
amount will be evaluated and revised during the project development and
progress. MA’ADEN is responsible, at its own expense, for securing the 8 MBD
from Saudi Aramco through ships or shall build a pipeline with receiving
facility.

 

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The Ministry understands that this allocation is contingent on MA’ADEN/SWCC
causing the following conditions to be met:

 

1. MA’ADEN Aluminum Smelter and Alumina Refinery Project Scope

MA’ADEN Project configuration shall consist of:

 

1.1 Bauxite Mine (4,000 KTA).

 

1.2 Alumina Refinery (1.800 KTA).

 

1.3 Aluminum Smelter Plant (740 KTA).

 

1.4 Rolling Mill (250 KTA), with total capacity of 460K1A.

 

2. Saline Water Conversion Corporation (SWCC) Project Scope

SWCC Power and Water Project configuration shall be as follows:

 

2.1 Power plant capacity of 2400 MW divided as follows:

 

  a) 1350 MW for MA’ADEN Project.

 

  b) 1050 MW for SEC, SEC Supplies Ras Azzour Downstream Industries with 50 MW.

 

2.2 Water capacity of 1,025,000 Cubic Meter, utilizing Reverse Osmosis (RO)
technology for the production of at least 25% of the total quantities, divided
as follows:

 

  a) 25,000 Cubic Meter for MA’ADEN Project.

 

  b) 1,000,000 Cubic Meter for SWCC.

 

3. SWCC Power and Water Plant

For best and optimum usage of the gas and efliciency, SWCC shall design its
power plant as a Combined Cycle Power Plant and shall use highly efficient gas
turbines. This design shall be reviewed and approved by Saudi Aramco before SWCC
commence.

 

4. Back-Up Fuel

SWCC backup fuel is Arab Extra Light Crude during the emergency only.

MA’ADEN/SWCC shall build their own Arab Extra Light Crude pipeline with metering
skid facility from a proper tie-in point at Saudi Aramco facilities that is to
be identified by Saudi Aramco. to the project at Ras Azzour, according to Saudi
Aramco’s standards. If MA’ADEN/SWCC elect to use diesel as a backup fuel, then
MA’ADEN/SWCC will solely be responsible, at their sole risk and own expense, to
secure the required backup diesel quantity. Saudi Aramco is not responsible or
commiffed to provide the diesel requirements.

 

5. Project Start-Up Date

The start up dates of the Project shall be as follows:

 

5.1 SWCC Power and Water Plant in 4Q 2012.

 

5.2 MA’ADEN Aluminum Smelter in 1 Q 2013.

 

5.3 MA’ADEN Rolling Mill in 4Q 2013.

 

5.4 MA’ADEN Alumina Refinery in 4Q 2014.

 

6. Deliverables

MA’ADEN and SWCC shall cause, individually, the following Project deliverables
to be submifted to Saudi Aramco no later than the dates specified as follows:

 

6.1 SWCC Power & Water Plant

 

  a) Copy of signed Energy Conversion Agreement (ECA) with Ma’aden by October
30, 2009.

 

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  b) Copy of signed Project Management Consultancy (PMC) contract by October 30,
2009.

 

  c) Copy of signed Engineering, Procurement and Construction (EPC) contract
before June 30, 2010.

 

6.2 MA’ADEN Aluminum Smelter Plant

 

  a) Copy of signed Financial Closure documents before June 30, 2010.

 

  b) Copy of signed Engineering, Procurement and Construction (EPC) contract
before July 31, 2010.

 

6.3 MA’ADEN Rolling Mill Plant

 

  a) Copy of signed Technical Service Support Agreement with Know-How provider
for Rolling Mill before March 31, 2010.

 

  b) Copy of signed Financial Closure documents for Rolling Mill before June 30,
2010.

 

  c) Copy of signed Engineering, Procurement and Construction (EPC) contracts
for Rolling Mill before December 31, 2010.

 

6.4 MA’ADEN Alumina Refinery

 

  a) Copy of signed Technology License Agreements before March 31, 2010.

 

  b) Copy of signed Financial Closure documents before June 30, 2011.

MA’ADEN AND SWCC COMBINED PROJECT SALES GAS ALLOCATION C) Copy of signed
Engineering, Procurement and Construction (EPC) contracts by July3l, 2011.

7. If the Alumina Refinery Project is not executed in accordance with the terms
set forth herein, MA’ADEN shall immediately pay, upon notification by the
Ministry, three hundred and fifty million U.S. Dollars ($350 MM) towards funding
the establishment of industrial infrastructure to support downstream industries
in the Kingdom, as directed and approved by Ministry. No later than one
(1) month following the execution of the Arabic version of the Allocation Letter
issued by MinPet, MA’ADEN shall provide the Ministry with an irrevocable letter
of credit issued by a financial institution acceptable to the Ministry in the
amount of three hundred and fifty million U.S. Dollars ($350 MM) relating to
MA’ADEN commitment to fund the industrial infrastructure (the Letter of
Credit”). The Letter of Credit shall be in a form acceptable to the Ministry and
shall have a term not less than one (1) year, At least thirty (30) days prior to
the expiry date of the Letter of Credit, MA’ADEN shall either (i) cause the
issuing bank to provide a notice of renewal to the Ministry or (ii) provide a
notice of replacement to the Ministry together with a replacement letter of
credit fulfilling the requirements set forth herein for a term not less than one
year.

 

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The Ministry shall be entitled to demand full payment under the Letter of
Credit, without the need for further authorization, in the event that (1) the
Ministry determines that Alumina Refinery Project is not implemented in
accordance with the terms set forth herein under paragraph 1.2 and milestone
dates under paragraph 6.4 b & c, and MA’ADEN have failed to fulfill the
commitment to immediately pay the aforementioned amount to fund the
establishment of the industrial infrastructure upon notification by the
Ministry: or (2) the Ministry has not received a notice of renewal or notice of
replacement (together with a replacement letter) at least fifteen (15) days
prior to the expiry date of the Letter of Credit.

The obligations to pay the three hundred and fifty million U.S. Dollars ($350
MM) and provide the Letter of Credit shall cease and the Leffer of Credit be
released by the Ministry when Ministry determines that the Financial Close
referenced in paragraph 6.4.b herein and the award of the EPC contract
referenced in paragraph 6.4.c herein have both occurred. If the Ministry
receives payment of the three hundred and fifty million U.S. Dollars ($350 MM)
to fund the said industrial infrastructure or Alumina Refinery Project is
executed in accordance with the terms set forth herein, then MA’ADEN have
satisfied the terms of this paragraph 7 in this letter.

8. In case of MA’ADEN failure to execute the Aluminum Project, MinPet has the
right to notify SWCC to withdraw the quantities of Power and Water allocated to
MA’ADEN. Further, MinPet has the right to allocate these quantities of Power and
Water on the same terms and conditions to another future Aluminum Smelter in the
Kingdom.

9. In the event of any delay to the Aluminum complex such that Ma’aden are
unable to consume the allocated power and water quantities, the unconsumed power
and water generated by utilizing Sales Gas allocated to MA’ADEN will be taken by
SEC and SWCC.

10. In case MA’ADEN does not meet its obligation to implement the Rolling Mill
plant under paragraph 1.4 or any milestone dates for the Rolling Mill under
paragraphs 6.3, Then MA’ADEN agrees that the Ministry will assign and allocate
275 KTA of Aluminum Ingots (to produce 250 KTA of Rolling Mill) to other
entities determined by the Ministry. The price of the Ingot shall be at
production actual cost, to utilize the subject quantities for Rolling Mill
project at Ras-Az zur.

 

11. Project Progress Reports

MA’ADEN and SWCC shall provide Saudi Aramco with quarterly reports describing
the status and progress achieved with respect to each of the deliverables and
conditions contained herein. Such quarterly report shall be submitted to Saudi
Aramco no later than the end of each calendar quarter starting December 31,
2009.

 

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12. Supply of Feedstock’s to Conversion/Downstream Industries

MA’ADEN shall enter into long-term supply agreements with investors who want to
purchase raw materials from the Project’s produced streams to be used as feed
for their in-Kingdom plants. Such supply agreements shall be long-term with
competitive market-based prices, terms and conditions.

 

13. Ma’aden Support of other industries

MA’ADEN shall work diligently to promote and support downstream industries such
as semi-finished and finished aluminum industry and other industries that are
intended to support the aluminum industry.

 

14. Sales Gas Pipeline

MA’ADEN and SWCC at their own expense shall build their own sales gas pipeline
with metering skid facility to transfer the sales gas quantities specified
herein above from a proper tie-in point at Saudi Aramco facilities, which is to
be identified by Saudi Aramco, to the Project at Ras Azzour according to Saudi
Aramco standards after securing the required license as per gas supply and
pricing regulations.

Any failure by SWCC and MA’ADEN Company in fulfillment of any of such
obligations shall make the gas allocation subject to cancellation.

Kindly, arrange with Saudi Aramco in order to sign the Allocation Letter.
Regards,

Faisal bin Turki bin Abdul Aziz

Ministry of Petroleum & Mineral Resources

 

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SCHEDULE 5

Adherence Agreement

THIS DEED is made on [date] by

 

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

 

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

 

(3) [ALCOA AFFILIATE], a company organized under the laws and regulations of
[—], having its head office and address at [—] (together with its legal
successors and permitted assigns, hereinafter referred to as the “New
Shareholder”).

RECITALS:

 

(A) This deed is made by the parties hereto in compliance with Clause 4.8 [and
Clause 17.8(v)] of the Framework Shareholders’ Agreement dated [—] made between
Ma’aden and Alcoa (as may be amended) (the “Framework Shareholders’ Agreement”).

 

(B) [Alcoa wishes the New Shareholder to subscribe for Alcoa’s entitlement to
Shares in [—] (the “Company”).] / [The New Shareholder wishes to acquire the
Transferable Interests of Alcoa (or its Affiliate) in [—] (the “Company” held by
[—] (the “Transferor”) from the Transferor.

 

(C) The terms defined in the Framework Shareholders’ Agreement shall unless the
context requires otherwise bear the same meaning in this Deed.

THIS DEED WITNESSES as follows:

 

1. The New Shareholder confirms that it has been supplied with a copy of and has
full knowledge of the terms of the Framework Shareholders’ Agreement.

 

2. The warranties in Clause 20 of the Framework Shareholders’ Agreement shall
apply, mutatis mutatis, to this Deed as if they were made by the New
Shareholder, upon the replacement of all references to “this Agreement” with
“this Deed and the Framework Shareholders’ Agreement”.

 

3. The New Shareholder undertakes to be bound by the Framework Shareholders’
Agreement in all respects as if the New Shareholder was an original party to the
Framework Shareholders’ Agreement and named in it as a Shareholder and to
observe and perform all the provisions and obligations of the Framework
Shareholders’ Agreement applicable to or binding on a Shareholder in respect of
the Company under that agreement insofar as they fall to be observed or
performed on or after the date of this Deed.

 

4. In addition, the New Shareholder shall observe and perform all the provisions
and obligations of the Framework Shareholders’ Agreement applicable to or
binding on a Shareholder in respect of the Company under that agreement and
otherwise act in its capacity as a Shareholder so that no act or omission of the
New Shareholder in relation thereto shall constitute, cause or contribute to a
breach by Alcoa of any of its obligations under the Framework Shareholders’
Agreement.

 

5. This Deed is made for the benefit of the parties to the Framework
Shareholders’ Agreement and every other person who after the date of the
Agreement (and whether before or after the execution of this Deed) assumes any
rights or obligations under the Framework Shareholders’ Agreement or adheres to
it.

 

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6. The address of the New Shareholder for the purposes of Clause 23.1 of the
Framework Shareholders’ Agreement [shall be the same as for Alcoa] / [ is as
follows:

[insert address]

Fax No: [insert number]]

(attention of [insert name].)]

 

7. The construction, validity and performance of this Deed and all
non-contractual obligations (if any) arising from or connected with this Deed
shall be governed by the laws of England.

IN WITNESS of which this Deed has been executed and has been delivered on the
date first written above.

Executed as a Deed by:

SAUDI ARABIAN MINING COMPANY (MA’ADEN)

 

 

Executed as a Deed by: ALCOA INC.

 

Executed as a Deed by: [New Shareholder]

 

 

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SCHEDULE 6

Cast House Users’ Agreement

THIS CAST HOUSE USERS AGREEMENT (hereinafter referred to as the “Agreement”), is
made and entered into on [                    ] in the Hejerian calendar,
corresponding to the [        ] day of [                    ] 2009 in the
Gregorian calendar, by and between:

 

(1) MA’ADEN ALUMINIUM COMPANY, a company organised under the laws and
regulations of the Kingdom of Saudi Arabia with commercial registration No. [—],
having its head office and address at [—], Kingdom of Saudi Arabia (together
with its legal successors and permitted assigns) (the “Smelting Company”); and

 

(2) MA’ADEN ROLLING COMPANY, a company organised under the laws and regulations
of the Kingdom of Saudi Arabia with commercial registration No. [—], having its
head office and address at [—], Kingdom of Saudi Arabia (together with its legal
successors and permitted assigns) (the “Rolling Company”); and

 

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

 

(4) [                    , a corporation under the laws of             , whose
principal place of business is at                     . and an Affiliate of
ALCOA INC., a corporation under the laws of the Commonwealth of Pennsylvania,
USA, whose principal place of business is at 390 Park Avenue, NY 10022, USA
(together with its legal successors and permitted assigns) (“Alcoa”).

Each of the Smelting Company, the Rolling Company, Ma’aden and Alcoa may be
referred to as a “Party”, or collectively as the “Parties”).

RECITALS

WHEREAS Alcoa and Ma’aden have entered into an Aluminium Project Framework
Shareholders’ Agreement dated [insert date] 2009 (the “Framework Shareholders’
Agreement”) under which, inter alia, the Smelting Company and the Rolling
Company have been established.

 

A. WHEREAS the Smelting Company and the Rolling Company have entered into into
an Aluminium Purchase Agreement dated [insert date] (the “Rolling Company APA”)
under which the Rolling Company will purchase its requirements for Rolling Slab
from the Smelting Company

 

B. WHEREAS the Smelting Company and Alcoa have entered into an Aluminium
Purchase Agreement dated [insert date] (the “Alcoa APA”) under which Alcoa will
purchase its pro rata share of all Product produced by the Smelting Company
which is not sold to the Rolling Company.

 

C. WHEREAS the Smelting Company and Ma’aden have also entered into respective an
Aluminium Purchase Agreement dated [insert date] (the “Ma’aden APA”) under which
Ma’aden will purchase its pro rata share of all Product produced by the Smelting
Company which is not sold to the Rolling Company.

 

D. WHEREAS the Framework Shareholders’ Agreement contemplates the construction
and operation of a central Cast House operated by the Smelting Company accepting
Molten Metal from the Smelter and solidifying it into cast products for sale to
the Rolling Mill Company and to Ma’aden and Alcoa.

 

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E. WHEREAS for the efficient and cost-effective operation of the Cast House, the
Parties desire to coordinate their activities under the Alcoa APA, the Rolling
Company APA and the Ma’aden APA with respect to the operation of the Cast House.

NOW, IT IS HEREBY AGREED as follows:

 

1. Definitions and Interpretation

 

1.1 Definitions

Defined terms in this Agreement and the Schedules, which may be identified by
the capitalisation of the first letter of each principal word thereof, have the
meanings set forth in each of the Alcoa APA and the Ma’aden APA, except as set
forth below:

“Additional Casting Equipment” means additional, new or specialized casting
equipment not part of, or a normal replacement of or enhancement to the existing
Cast House equipment that would increase the Capacity of the Cast House and/or
the range of Cast House Products that the Cast House is capable of producing.

“Agreement” means this Agreement as the same may be amended, modified or
replaced in accordance with the provisions hereof.

“Alcoa” has the meaning given to that term in the Recitals to this Agreement.

“Alcoa APA” has the meaning given to that term in the Recitals to this
Agreement.

“APAs” means the Alcoa APA, the Rolling Company APA and the Ma’aden APA,
collectively.

“Capacity” means the capacity of the Cast House, expressed in tpa, to produce
Cast Products in various forms, taking into account both the installed capacity
of the Cast House, productivity and required or expected maintenance.

“Capacity Nomination” means the annual quantity and form of Cast Products that a
Cast House Customer desires to receive from the Cast House for a given year.

“Cast Product” means Ingot, Sow, Rolling Slab, Billet, High Purity Product
and/or Value Added Product produced by the Cast House.

“Cast House Customer” means each of Ma’aden, Alcoa and the Rolling Company.

“Framework Shareholders’ Agreement” has the meaning given in Recital A.

“Ma’aden” has the meaning given to that term in the Recitals to this Agreement.

“Ma’aden APA” has the meaning given to that term in the Recitals to this
Agreement.

“Monthly Orders” means written communications from one of Ma’aden, Alcoa or the
Rolling Company setting forth a Contracted Monthly Quantity of Cast Products
such entity will purchase from the Cast House in a given month.

“Rolling Company” has the meaning given to that term in the Recitals to this
Agreement.

“Rolling Company APA” has the meaning given to that term in the Recitals to this
Agreement.

 

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“Scrap” means scrap aluminium of quality acceptable to the Cast House, which may
consist of (i) run around scrap from the Smelter and/or the Rolling Mill and/or
any of their end use customers; (ii) scrap returned by the Rolling Mill’s
customers; (iii) scrap purchased by the Smelter Company or the Rolling Company,
whether in the form of used beverage containers (UBCs) or otherwise; or
(iv) recycled dross metal units.

“Smelting Company” has the meaning given to that term in the Recitals to this
Agreement.

 

1.2 Interpretation

In this Agreement and in the Schedules, except to the extent that the context
otherwise requires:

 

  (a) the Table of Contents and headings are for convenience of reference only
and shall not affect the interpretation of this Agreement;

 

  (b) words and terms importing the plural include the singular and vice versa;

 

  (c) words importing gender include all genders;

 

  (d) unless otherwise specified, references to Articles, Clauses, paragraphs,
sub-paragraphs and Schedules are references to Articles, Clauses, paragraphs,
sub-paragraphs and Schedules to this Agreement;

 

  (e) unless otherwise specified, references to any document or agreement,
including this Agreement, shall be deemed to include references to such document
or agreement as amended, modified, supplemented or replaced from time to time in
accordance with its terms and (where applicable) subject to compliance with the
requirements set out herein;

 

  (f) a reference to any Party shall include its successors and permitted
assigns;

 

  (g) other than in relation to this Clause, the words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”;

 

  (h) each of the Schedules hereto shall form an integral part of this Agreement
and shall have effect as if set out herein;

 

  (i) subject to the express provisions of this Agreement, where the “consent”,
“approval” or the like of a Party is required under this Agreement, it shall be
in writing and may be given or withheld in the absolute discretion of such
Party; and

 

  (j) references to “months” and “years” are to months and years, respectively,
in the Gregorian Calendar.

 

1.3 Contracts (Rights of Third Parties) Act 1999

A Person who is not a Party to this Agreement has no rights under the Contracts
(Rights of Third Parties) Act 1999 (as amended or re-enacted from time to time)
to enforce or enjoy the benefit of any term of this Agreement.

 

1.4 Significant Digits After Decimal Point

For the purposes of this Agreement calculations shall be made taking into
account the following digits after the decimal place (except where otherwise
provided in this Agreement):

 

  (k) where a figure or value used for the purposes of this Agreement is a
published figure or value, all digits after the decimal place shall be taken
into account; and

 

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  (l) where a figure or value used for the purposes of this Agreement results
from a computation made by (or on behalf of) the Parties, the first three
(3) digits after the decimal point shall be taken into account;

provided that in each case the last digit to be taken into account is to be
rounded to the upper unit if the next succeeding decimal digit is equal to or
greater than five (5) and is to be rounded to the lower unit if the next
succeeding decimal digit is less than five (5).

 

2. Cast House; Operation and Capacity

 

2.1 Cast House

Pursuant to the Framework Shareholders’ Agreement, the Parties have caused the
Smelter Company to install the Cast House. The Parties agree to coordinate their
activities in the operation of the Cast House consistent with the provisions of
the APAs.

 

2.2 Operation

 

  (a) In close cooperation with the Rolling Company, the Smelter Company will
operate the Cast House in a commercially effective and efficient manner,
intended to meet the requirements communicated to it by the Cast House Customers
from time to time.

 

  (b) The Cast House will receive Molten Metal from the Smelter and Scrap, and
shall, pursuant to Monthly Orders received from:

 

  (i) the Rolling Company, produce Rolling Slab;

 

  (ii) from Ma’aden, produce the desired Cast Products; or

 

  (iii) from Alcoa, produce the desired Cast Products.

 

  (c) Monthly Orders for such Cast Products will be produced within the Cast
House’s Capacity as set forth in Clauses 2.3 and 2.4 below

 

2.3 Capacity Planning and Annual Communication

 

  (a) The Smelting Company will, at all times, maintain rolling three (3) year
capital and repair and maintenance budgets, and (consistent with the provisions
of Clause 5.2 of the APAs), a rolling five (5) year production plan for the Cast
House, designed to meet the communicated and anticipated needs of the Cast House
Customers. Except as otherwise required by the APAs or the Cast House Customers,
this capital budget will be communicated to the Cast House customers on or
before the first day of September each year.

 

  (b) On or before the first day of September of each year, the Smelting Company
shall determine and advise each Cast House Customer of the anticipated Capacity
of the Cast House, by Cast Product, for the next year and each month thereof.

 

2.4 Annual Capacity Nomination Process

 

  (a)

On or before the fifteenth (15th) day of November of each year, each Cast House
Customer will provide the Smelting Company with its Capacity Nomination under
its Initial Delivery Schedule, detailed by month, for the coming year. For the
avoidance of doubt, this Capacity Nomination must be consistent with the Initial
Delivery Schedule required to be communicated pursuant to Clause 5.3 of the
APAs. The Smelting Company will review the Capacity Nominations, and will seek
to develop an annual supply plan capable of meeting all the Capacity
Nominations.

 

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  (b) If the Cast House lacks the Capacity to meet all the Capacity Nominations,
whether in total or for a particular month, it will communicate its constraints
to the Cast House Customers. The Cast House Customers will then agree upon
coordinated, revised Capacity Nominations that the Cast House would be able to
achieve.

 

  (c) If the Cast House Customers are unable to agree upon such coordinated Cast
House Capacity Nominations, the Smelting Company will communicate its revised
plan to meet the collective Cast House Capacity Nominations, with priority given
to the requirements of the Rolling Company, and then to Ma’aden and Alcoa pro
rata to their ownership interests in the Project.

 

2.5 Quarterly Planning

The Cast House will issue its Quarterly Shipping Schedule to the Cast House
Customers not earlier than sixty (60) days and not later than forty five
(45) days before each calendar quarter for the succeeding quarter. Any changes
to the quantities to be shipped for a Cast House Customer under a Quarterly
Shipping Schedule must be communicated to the Cast House at least ten (10) days
prior to the beginning of the month of shipping.

 

2.6 Monthly Commitments and Coordination

 

  (a) Seven (7) days prior to the beginning of each month, each Cast House
Customer will place its Monthly Orders for production in the following month for
Cast Products consistent with the Quarterly Shipping Schedule, and within its
annual Capacity Nomination as determined pursuant to Clause 2.4 above. Such
Monthly Orders will be binding, and a Cast House Customer will be obligated to
take or pay for the quantity and form of Cast Products contained in such Monthly
Orders. The Cast House will build such Monthly Orders into its monthly
Production Plan. If a Cast House Customer does not provide the Cast House with a
Monthly Order with respect to any calendar month consistent with the paragraph
(a), the Cast House shall produce such Cast Products in the proportion as set
out in previously-provided Quarterly Shipping Plan.

 

  (b) If a Cast House Customer desires additional quantities of Cast Products
beyond those available to it by virtue of its Capacity Nomination and Monthly
Orders, and the Cast House is able to accommodate such increase within in its
then-current Production Plan, then the Cast House Customer may increase its
Monthly Order accordingly.

 

  (c) If the Cast House is not able to accommodate a requested increase within
its Production Plan, a Cast House Customer may request that one or more of the
other Cast House Customers make capacity available to it by reducing or
releasing the quantity of such other Cast House Customer’s Monthly Orders. The
reducing or releasing Cast House Customer is not required to agree, and may
require as a condition of its agreement reasonable compensation and/or other
considerations including without limitation an equitable adjustment of the
increasing Cast House Customer’s planned Monthly Orders in future months.

 

2.7 Disputes

Any disputes arising out of the Capacity Nominations, the allocation of Cast
House Capacity, or Monthly Orders or the Production Plan (including any
modifications or adjustments thereto) must be resolved solely pursuant to the
consultation and referral to Lead Representatives provisions of the Ma’aden APA,
the Rolling Company APA and the Alcoa APA, as the case may be.

 

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3. Cast House Expansions and Additional Casting Equipment

 

3.1 Subject to Framework Shareholders’ Agreement Capacity Expansion Provisions.
In general, Cast House Expansions will be subject to the Expansion provisions
contained in Clause 5.9 (but for the avoidance of doubt, not Clause 5.10 or
Clause 5.11) of the Framework Shareholders’ Agreement.

 

3.2 Disagreement or Deadlock. If, following the rejection of, or Deadlock
concerning any proposed Cast House Expansion, a Cast House Customer desires the
installation, operation and maintenance of Additional Casting Equipment, such
Cast House Customer shall request the Smelting Company to produce the plans and
specifications for, and the estimate of all costs and expenses in connection
with the installation, operation and maintenance of such Additional Casting
Equipment.

 

3.3 Installation, Operation and Maintenance of Additional Casting Equipment. If
Alcoa and/or Ma’aden choose not to participate in the installation, operation
and maintenance of the Additional Casting Equipment, the other Cast House
Customer(s) may lease or purchase such Additional Casting Equipment for their
own account(s). Thereafter, the Cast House Customer(s) may request the Smelting
Company to install, operate and maintain such Additional Casting Equipment on
behalf of and as agent for such Cast House Customer(s). Unless the Smelting
Company shall determine in its sole, reasonable judgment that the installation,
operation or maintenance of the Additional Casting Equipment would unreasonably
interfere with the development, construction, operation or maintenance of the
Cast House, the Smelting Company shall install, operate and maintain such
Additional Casting Equipment on behalf of and as agent for such Cast House
Customer(s). Costs for the preparation, submission, evaluation, operation,
repair and maintenance of such installed Additional Casting Equipment incurred
by the Smelting Company shall be paid by such Cast House Customer(s) alone. Only
such participating Cast House Customer(s) will have the right to place Orders
for Cast House Products utilizing such installed Additional Casting Equipment.

 

4. Confidentiality and public announcements

The provisions on confidentiality and public announcements found in Clause 22 of
the Framework Shareholders’ Agreement are hereby incorporate herein by this
reference.

 

5. General provisions

 

5.1 Notices

 

  (a) Any notice, claim, request, demand, consent, designation, direction,
instruction, certificate, report, confirmation, agreement or other communication
to be given in connection with this Agreement shall be given in writing in the
English language (or accompanied by an accurate English language translation
upon which the recipient shall have the right to rely for all purposes) and
shall be deemed duly given on the Day of delivery at the place of intended
receipt when (a) personally delivered, (b) sent by facsimile transmission (but
only if receipt is confirmed by return facsimile transmission) or (c) received
after mailing by certified or registered mail, postage pre-paid, in each case
addressed to a Party at its address or facsimile number as indicated in by a
Party to the others.

 

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

 

5.2 Governing Law

This Agreement shall be governed and construed in accordance with the laws of
England.

 

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5.3 Waiver of Immunity

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

 

5.4 Judgment Currency

The obligations of a Party to make payments hereunder in Dollars shall not be
discharged by an amount paid in any currency other than Dollars, whether
pursuant to a court or arbitral judgment or otherwise, to the extent that the
amount so paid upon conversion to Dollars and transferred to New York, New York
under normal banking procedures does not yield the amount of Dollars due, and
each Party, as a separate obligation and notwithstanding any such judgment,
agrees to indemnify each other Party against, and to pay to each such other
Party on demand, in Dollars, any difference between the sum originally due in
Dollars and the amount of Dollars received upon any such conversion and
transfer.

 

5.5 Currency Equivalents

For purposes of this Agreement, calculation of Dollar equivalents on any day
shall be based on (a) the spot rate of exchange for settlement on such date as
reported in The Wall Street Journal, Eastern Edition, as the New York foreign
exchange selling rate applying to trading among banks in amounts of US$1,000,000
or more, or, if not so reported, (b) the arithmetic average of the day’s spread
for settlement on such date as reported in the Financial Times, London Edition,
or, if not so reported, (c) the spot selling rate for trading among banks in
amounts of US$1,000,000 or more as quoted by Citibank, N.A. at its principal
office in New York, New York at or around 3:00 p.m. (New York time) on the date
on which spot exchange transactions settled on such date are quoted.

 

5.6 Limitation of Liability

 

  (a) Notwithstanding anything in this Agreement, neither Party shall have any
liability to the other Party (whether in contract, tort or otherwise) for any
consequential, incidental, special or indirect losses (including loss of
anticipated profits) arising from or relating to this Agreement, whether out of
any Event of Default, other breach of this Agreement, indemnity, any fault or
negligence on the part of a Party or its Affiliates (or their respective
employees) or otherwise.

 

  (b) Notwithstanding the foregoing, a Party shall be liable to the other Party
for any direct damages incurred by that Party arising from any breach by the
other Party of its obligations under this Agreement where such breach has arisen
due to the gross negligence or wilful misconduct of the other Party or its
Affiliates (or their respective employees).

 

5.7 Severability

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

 

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or unenforceable provision and which as closely as possible validly gives effect
to the intentions of the Parties as expressed herein.

 

5.8 Survival

The obligations of the Parties under the following provisions shall survive the
expiration or earlier termination of this Agreement:

 

  (a) Clause 4 (Confidentiality and Public Announcements), for a period of five
(5) years from the date of such expiry or termination;

 

  (b) Clause 5.2 (Governing Law);

 

  (c) Clause 5.3 (Waiver of Immunity);

 

  (d) Clause 5.6 (Limitations on Liability); and

 

  (e) this Clause 5.8 (Survival).

 

5.9 Execution in Counterparts

This Agreement may be executed in any number of counterparts and by the
different Parties on separate counterparts, each of which when so executed and
delivered shall be an original, but all the counterparts shall together
constitute one and the same instrument.

 

5.10 Amendments

No variation or amendment to this Agreement shall be effective unless in writing
signed by duly authorised officers or representatives of each of the Parties.

 

5.11 Waivers

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

 

5.12 Costs

Each Party shall pay its own costs in connection with the negotiation,
preparation, execution and performance of this Agreement.

 

5.13 No Partnerships

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

 

5.14 Translation

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

 

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5.15 Conflict between this Agreement and APAs.

In the event of a conflict between the terms of this Agreement and the APAs with
respect to the operation of the Cast House, the provisions of this Agreement
shall control.

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

 

MA’ADEN ALUMINIUM COMPANY

    MA’ADEN ROLLING COMPANY By  

 

    By  

 

Signed  

 

    Signed  

 

SAUDI    ARABIAN    MINING    COMPANY

(MA’ADEN)

    [ALCOA INC.] By  

 

    By  

 

Signed  

 

    Signed  

 

 

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SCHEDULE 7

Description of the Ras Az ZawrComplex

Set out below is the plan of the Ras Az Zawr site showing the location of the
smelter, rolling mill, refinery and village in relation to the other
developments at the site:

LOGO [g91834ex10_ipg147.jpg]

Refinery

The Refinery will be located at the Ras Az Zawr site. The Refinery will use the
Bayer process in a continuous operation and have an annual capacity of
1.8 million tonnes of smelter grade alumina. The alumina from the Refinery will
be conveyed to the Smelter by tube conveyor, and any excess alumina will be
trucked to the Port for export.

Bauxite from the Al Ba’itha Mine will be transported to the Refinery by rail and
unloaded onto the Refinery stockpiles. The Refinery will employ milling,
jacketed pipe unit (JPU) digestion, high rate settlers, deep cone washing train,
pressure security filtration, heat exchange, oxalate free precipitation with
cyclone classification, stationary calciners and red mud storage with dry
disposal.

Power, demineralised water and potable water will be supplied to the Refinery by
SWCC, while steam, cooling water, plant air and instrument air will be the
responsibility of the Refinery.

Provision has been made in the layout of the Refinery site for the Refinery to
be expanded to twice its initial capacity.

 

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Smelter

The Smelter will be based on technology provided by Aluminium Pechiney under a
Technology Supply Agreement.

 

•  

The Smelter will be located adjacent to the Refinery at the Ras Az Zawr Site. It
will be constructed as two modern, pre-bake, high amperage technology potlines
(AP37 initially but AP39 capable at the first reline), with an overall facility
annual rated capacity of 740,000 tonnes aluminium metal. This will increase to
780,000 tpy at the first reline using AP39 technology. The Smelter will be
expandable in three stages to 6 x 360 pots.

 

•  

In addition to the two potlines, the Smelter would include a carbon plant for
anode production, cast house for ingot production, material handling, and
support facilities.

 

•  

AP37, 360 pots(2 potlines), 20 stems version, capable of AP37 and AP39

 

•  

Tube conveyor alumina transport from Refinery

 

•  

Materials transport from port by truck

 

•  

Paste plant - two trains 35 tph each

 

•  

Baking furnace

 

•  

Cold cleaning rodding room for 20 stems

Integrated Cast House

An Integrated Cast House will be constructed at the Ras Az Zawr site, to provide
Cast House services to the Smelter and the Rolling Mill. The Integrated Cast
House will consist of:

 

•  

3 ingot lines with an annual capacity of 150,000 tonnes each

 

•  

2 VDC centers with an annual capacity of 250,000 tonnes each (sheet ingot)

 

•  

2 additional pits for future expansion of the VDC centers (sheet ingot or
billet)

 

•  

A remelt furnace center for recycle of internal scrap (approximately 30% of
Rolling Mill capacity)

During the ramp up of the Rolling Mill, the DC centers will produce some T ingot
to balance the Cast House capacity against the Smelter production. The Cast
House will be operated by the Rolling Mill organisation subject to an operating
agreement with the Smelter.

Rolling Mill

The Rolling Mill to be located at the Ras Az Zawr site adjacent to the smelter
will be designed to produce predominantly beverage can stock for sales in MENA
other appropriate customers outside of MENA. The principal equipment will
consist of a hot reversing mill and a 4 stand tandem hot finishing mill along
with appropriate cold rolling and finishing lines

The rolling mill will have an initial capacity of approximately 385,000 tpy of
finished Rigid Container Sheet (RCS) products ramping up to a capacity of approx
540,000 tpy with a second phase of capital investment. The rolling mill will
process Used Beverage Container (UBC) scrap and has an allocation of up to
380,000 tpy of molten prime from the adjacent smelter.

Provision will be made in the layout to provide for expansion to the ultimate
capacity of the hot rolling line which depending on product mix will be in the
order of 750,000 tpy.

 

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Supporting Infrastructure

Power for the Smelter and Refinery will be supplied from a new power house being
developed in conjunction with the Saline Water Conversion Corporation. This
plant will be built on land adjacent to the industrial site at Ras Az Zawr and
will supply electric power, potable water and desalinated water to the Project.
The power house will be fuelled with natural gas supplied by Saudi Aramco in
accordance with the key terms described in the Gas Allocation Letter.

Supporting infrastructure is divided into infrastructure which will be provided
by the project for its own use; common infrastructure which will be provided by
the Ma’aden Infrastructure Company under the Land Use and Services Agreement;
and infrastructure developed by the Saudi Government and accessed by the Project
under separate agreements. Key infrastructure provided in each category are:

Project provided:

 

•  

IT&S (ERP and each plant MES)

 

•  

Alumina loading and unloading equipment

 

•  

Training Centre

 

•  

Central Medical centre.

Provided by the MIC:

 

•  

Land access

 

•  

Common roads

 

•  

Access to central communications

 

•  

Ras Az Zawr single status village

 

•  

Site drainage

Provided by the Saudi Government:

 

•  

Railway for transport of bauxite from the Mine to the Refinery

 

•  

Port infrastructure

 

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SCHEDULE 8

Description of the Mine

The Al Ba’itha bauxite deposit is located in the Qassim province in the north
eastern region of the Kingdom of Saudi Arabia, at latitude 27°55’N, longitude
43°41’E approximately 600m above sea level. It is approximately 450 km northwest
of Riyadh.

The deposit has an overall strike length of approximately 105 km, trending in a
northwest – southeast direction, with an identified width of approximately 5 km.
The deposit comprises three main zones, the Northern Zone, Central Zone and
Southern Zone, with each zone being approximately 30 km long. As on the
Effective Date, Ma’aden holds mining concessions or licenses over the Southern
Zone as set out in the map below.

LOGO [g91834ex10_ipg150.jpg]

 

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Southern Zone Tenement Boundaries

 

No.

  Code   Expiry Date   Current
Status   Area
hectares   Tenure Boundary Co-Ordinates           Point  

Latitude

 

Longitude

          A   27° 42’ 23.16”   43° 56’ 43.98” 6/Q   Site 1   13/02/2037  
Granted   5,000   B   27° 44’ 37.29”   44° 00’16.73”          

 

C

  27° 39’ 17.51”   43° 59’ 11.75”           D   27° 41’ 31.57”   44° 02’ 44.48”
          C   27° 39’ 17.5”   43° 59’ 11.75”           D   27° 41’ 31.57”   44°
02’ 44.48” 7/Q   Site 2   13/02/2037   Granted   5,000   E   27° 38’ 36.73”  
43° 59’ 44.16”          

 

F

  27° 39’ 20.84”   44° 00’ 54.16”           G   27° 35’ 44.69”   44° 03’ 45.89”
          H   27° 37’14.55”   44° 06’ 8.58”           H   27° 37’14.55”   44°
06’ 8.58” 8Q   Site 3   13/02/2037   Granted   4,700   G   27° 35’ 44.69”   44°
03’ 45.89”          

 

I

  27° 31’ 20.1”   44° 07’ 15.77”           J   27° 32’ 49.93”   44° 09’ 38.42”

Southern Zone Tenement Details

License to explore and investigate the feasibility of the Az Zabirah bauxite
deposit was granted to Ma’aden in 1999 following a competitive tender. Mining
licenses over three tenure areas covering the Southern Zone were granted to
Ma’aden by the Minister for Petroleum and Mineral Resources on the 13/2/2007 for
a period of 30 Hijjrah years (approximately 29 years and 1 month Gregorian).
These licenses entitle Ma’aden to exclusive right of utilizing bauxite and
annexed minerals existing in the licensed area.

The targeted bauxite production from the Al Ba’itha bauxite mine is
approximately 4 million tonnes of bauxite per year, matched to the demand for
bauxite to feed the Refinery. Relative to other world bauxite deposits, the ore
has higher reactive silica content, balanced by reasonable alumina content. The
deposit has a higher proportion of boehmite (monohydrated alumina) in relation
to gibbsite (tri-hydrated alumina) than most bauxite. The geologic resources, at
a grade cut-off of 40 percent total available alumina, have been estimated as
252 million tonnes in measured, indicated and inferred categories with an
overall average grade of 47.8 percent total available alumina.

The Mine will be a conventional open pit operation with trucks and hydraulic
excavators. It is expected that blasting of overburden and iron cap will be
required. Processing at the Mine will include crushing and screening to a size
distribution suitable for rail transport and further processing att he Refinery.
Where possible, waste material will be stockpiled in mined out areas

The Mine infrastructure facilities will include site roads, drainage, bore field
and water supply pipeline, reticulation of utilities, and the mine site village.
The Mine infrastructure will also include two distinct groupings of support
buildings, the industrial operations’ buildings, and the mine site village. The
Mine infrastructure electricity will be produced by a diesel generating power
unit adequately sized for the purpose.

 

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SCHEDULE 9

Project Agreements

 

Agreement

  

Parties

  

Brief Description

 

Part 1 (a) - ANCILLARY AGREEMENTS - AT COST BASIS

 

Technology Arrangements 1   Technical Support - Refinery    Alcoa Inc. and
Ma’aden / Refining Company    Agreement for technical support services being
performed outside the Kingdom in respect of the Refinery. Agreement to be
developed. 2   Technical Support - Smelter    Alcoa Inc. and Ma’aden / Smelting
Company    Agreement for technical support services being performed outside the
Kingdom in respect of the Smelter. Agreement to be developed. 3   Technical
Support - Rolling Mill    Alcoa Inc. and Ma’aden / Rolling Company   

Agreement for technical support services being performed outside the Kingdom in
respect of the Rolling Mill.

 

Agreement to be developed.

4   Technical Support (in-country) – Refinery    Alcoa entity and
Ma’aden/Refining Company   

Agreement for technical support services being performed in the Kingdom in
respect of the Refinery.

 

Agreement to be developed.

5   Technical Support (in-country) – Smelter    Alcoa entity and
Ma’aden/Smelting Company   

Agreement for technical support services being performed in the Kingdom in
respect of the Smelter.

 

Agreement to be developed.

6   Technical Support (in-country) – Rolling Mill    Alcoa entity and
Ma’aden/Rolling Company   

Agreement for technical support services being performed in the Kingdom in
respect of the Rolling Mill.

 

Agreement to be developed.

 

Shareholder Offtake and Marketing Arrangements

7   Cast House Users Agreement    Smelting Company, Rolling Company, Alcoa
Affiliate and Ma’aden   

Provision of casting and recycling services to the Rolling Mill and
co-ordination of offtaker requirements.

 

Agreed Form to be included as a Schedule to the Framework Shareholders
Agreement. Note that no payment is required pursuant to this Agreement.

 

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Land Use and Support Services Agreements 8   Land Use and Services Agreement
(“LUSA”)    Ma’aden Infrastructure Company (“MIC”) and Ma’aden (to be novated to
the Companies)    Grant of land user rights to the Project over the Ras Az Zawr
project site and provision of certain services and facilities by MIC. The cost
basis is as set out in the LUSA.         Signed agreement in place. 9   Ma’aden
Support Services Agreement    Ma’aden and The Companies    Provision of certain
support services from Ma’aden to the Companies, with the exclusion of services
covered by the LUSA.         To be developed. 10   Village Utilization Agreement
   MIC and the Companies    Provision of user rights, facilities and other
related rights in respect of the area representing the proposed village.        
To be developed.

 

Part 1 (b) - ANCILLARY AGREEMENTS - COMMERCIAL TERMS BASIS

 

Technology Arrangements

11   Interim Technology Licence Agreement for Refinery    Alcoa Inc. and Ma’aden
   Interim technology licence in respect of the Refinery. To be in Agreed Form
on signing the Framework Shareholders Agreement. No payment if superseded by
full licence. 12   Interim Technology Licence Agreement for Rolling Mill   
Alcoa Inc. and Ma’aden    Interim technology licence in respect of the Rolling
Mill. To be in Agreed Form on signing the Framework Shareholders Agreement. No
payment if superseded by full licence. 13   Technology Licence Agreement for
Refinery    Alcoa Inc. and Ma’aden / the Refining Company   

Agreement for relevant technology for the Refinery.

 

To be developed.

14   Technology Licence Agreement for Smelter    Alcoa Inc. and Ma’aden / the
Smelting Company   

Agreement for relevant technology for the Smelter.

 

To be developed.

15   Technology Licence Agreement for Rolling Mill    Alcoa Inc. and Ma’aden /
the Rolling Company   

Agreement for relevant technology for the Rolling Mill.

 

To be developed.

 

Shareholder Offtake and Marketing Arrangements

16   Aluminium Purchase Agreement (Alcoa)    Alcoa Affiliate and Smelting
Company   

Purchase by Alcoa Affiliate of aluminium produced at the Smelter.

 

To be in Agreed Form on signing the Framework Shareholders Agreement.

17   Aluminium Purchase Agreement (Ma’aden)    Ma’aden and the Smelting Company
  

Purchase by Ma’aden of aluminium produced at the Smelter.

 

To be in Agreed Form on signing the Framework Shareholders Agreement.

 

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18   Aluminium Purchase Agreement (Rolling Mill)    Rolling Company and Smelting
Company   

Purchase by the Rolling Company of aluminium produced at the Smelter.

 

To be developed.

19   Sales Agency Agreement (Sales Outside KSA)    Alcoa Affiliate (as sales
agent) and Ma’aden   

Appointment of Alcoa Affiliate as Ma’aden’s sales agent for the sale outside
Saudi Arabia of a portion of Ma’aden’s share of Smelter aluminium in
consideration for the payment of a reasonable agency fee to be agreed.

 

To be developed.

20   Sales Agency Agreement (Sales Within KSA)    Ma’aden (as sales agent) and
Alcoa Affiliate   

Appointment of Ma’aden as the exclusive sales agent of Alcoa for sales in Saudi
Arabia of that portion of Alcoa’s share of the Smelter aluminium to be sold to
purchasers located inside Saudi Arabia, in consideration for the payment of a
reasonable agency fee to be agreed.

 

To be developed.

 

Alumina Supply and Offtake Arrangements

21   Alumina Supply Agreement    Alcoa/Alcoa Affiliate (as supplier) and
Smelting Company   

Supply of alumina to the Smelter (in cases of shortfall, prior to Refinery
start-up and force majeure), subject to terms and conditions including
pre-condition for availability of adequate port facilities.

 

To be developed.

22   Alumina Purchase and Sales Agency Agreement    Alcoa/Alcoa Affiliate (as
offtaker) and Smelting Company   

Offtake by Alcoa or Alcoa Affiliate, of excess alumina not required by the
Project, subject to terms and conditions including pre-condition for
availability of adequate port facilities.

 

To be developed.

 

131

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Part 2 - OTHER PROJECT AGREEMENTS

Technology Arrangements

 

23   Smelter Technology Transfer Agreement (“Smelter TTA”)   

Aluminium Pechiney (“AP”) and Ma’aden

 

Provision for novation to the Smelting Company

  

Grant by AP of a licence to use the process and the know-how, owned by AP, for
the purposes of the Smelter and for the provision of relevant basic engineering
services specific to the Smelter.

 

Signed agreement in place.

24   Smelter On-Site Assistance Agreement (“Smelter On-Site Assistance”)   

Alumint and Ma’aden

 

Provision for novation to the Smelting Company

  

Provision by Alumint of on-site assistance to procure, build and start up the
Smelter using the process, know-how, design and engineering documentation
provided under the Smelter TTA.

 

Signed Agreement in place.

25   Refinery Integrated Digestion and Evaporation Facility Basic Engineering   
Hatch / Outotec Joint Venture and Ma’aden   

Design of the digestion and evaporation facilities for the refinery to
completion of Basic Engineering. Includes term sheet for the technology
agreement.

 

Signed agreement in place.

26   Refinery Process Design and Basic Engineering    WorleyParsons and Ma’aden
  

Design of the overall Refinery except for the digestion and evaporation areas to
the completion of Basic Engineering.

 

Signed agreement in place.

 

Infrastructure Agreements

27   Railway Co-operation Agreement (“RCA”)    Public Investment Fund (“PIF”);
Saudi Railways (“SAR”) and Ma’aden   

Construction and operation by PIF / SAR of the North South railway project from
Al Jalamid to Ras Az Zawr, passing through Az Zabirah (“Railway Project”), for
providing railway transportation services to the Project Company.

 

Signed agreement in place

28   Railway Transportation Agreement (“Rail TA”)    PIF, SAR and the Companies
  

Provision of affreightment services to the Companies, for the transportation of
certain materials.

 

To be developed.

29   Port Services Agreement    Saudi Port Authority, Port Concession Holder and
the Companies   

Provision of port infrastructure, facilities and services to the Project Company
by the Saudi Port Authority / Port Concession Holder.

 

To be developed.

30   MOU with the Royal Commission    Ma’aden, Royal Commission for Jubail and
Yanbu.   

MOU in respect of the proposed development and operation of infrastructure at
Ras Az Zawr by the Royal Commssion.

 

Signed MOU in place

 

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Fuel Supply Agreements

31   Maaden and SWCC Combined Projects Sales Gas Allocation (“Gas Allocation
Letter”)    Ma’aden, Saline Water Conversion Corporation and Saudi Aramco   

Allocation of sales gas for the SWCC power station, smelter furnaces and
refinery calciners as well as Arab Heavy Crude for the boiler house to be built
in the refinery. This letter also sets terms on the project development and
financing, with penalties for non-compliance.

 

Signed agreement in place.

32   Ma’aden, SWCC and SEC Basic Agreement    Ma’aden, Saline Water Conversion
Corporation and Saudi Electricity Company   

This agreement provides for the security of electricity supply from SWCC,
construction of backup power plant dedicated to Ma’aden and the structure of the
future power tariff.

 

Signed agreement in place.

33   SWCC Energy Conversion Agreement    Ma’aden and SWCC   

Establishes tolling arrangements for Ma’aden gas allocation through SWCC power
plant.

 

Signed agreement in place.

 

Power Arrangements (with SEC)

34   MOU for Interconnection Agreement with SEC    SEC and Ma’aden   

Interconnection agreement with SEC.

 

Signed agreement in place.

35   Interim Power Supply Agreement    SEC and the Companies   

Provision of construction power to the Project.

 

Format developed per MPC. May be incorporated into SPSA (24).

36   Supplementary Power Supply Agreement    SEC and Ma’aden   

Provision of permanent back-up supply from SEC to the Companies, for the
purposes of the Complex.

 

Draft developed and under negotiation.

37   Connection & Energisation Agreement for 380 kV substation    SEC and
Ma’aden   

Provision of connection of the 380kV substation to the SEC transmission system
for delivering electricity between such transmission system and the Project.

 

Signed agreement in place.

38   Connection & Energisation Agreement for Aluminium Project    SEC and
Ma’aden   

Provision of connection of the Project to the SEC transmission system at a
specified connection point for delivering electricity between such transmission
system and the Project.

 

Signed agreement in place.

39   Transmission and Distribution Assets Allocation Agreement    Ma’aden and
the Companies   

Provisions for distribution of responsibility between Ma’aden and the Companies
in relation to the responsibility for financing, engineering, construction and
operation and maintenance of the 380 kV Ras Az Zawr Substation and Overhead Line
for the connection of the Project to SWCC.

 

Signed agreement in place.

40   SEC Confidentiality Agreement    SEC, Ma’aden and Alcoa   

Confidentiality obligations in relation to information exchanged amongst the
parties in connection with the power related agreements.

 

Signed agreement in place with Ma’aden.

 

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Transportation Agreement

41    Maritime Transportation Agreement(s)    Selected Supplier(s) and the
Companies   

Provision of maritime services to the Companies for the maritime transportation
of materials.

 

To be developed.

 

Supply Arrangements 42    Caustic Soda Supply Agreement(s)    Selected
Supplier(s) and the Companies   

Supply of caustic soda to the Companies for the purposes of the Project.

 

To be developed.

43    Coal Tar Pitch Supply Agreement(s)    Selected Supplier(s) and the
Companies   

Supply of coal tar pitch for the purposes of the Project.

 

Under development.

44    Carbon Block (Cathodes) Supply Agreement(s)    Selected Supplier(s) and
the Companies   

Supply of carbon block (cathodes) for the purposes of the Project.

 

To be developed.

45    Aluminium Fluoride Supply Agreement(s)    Selected Supplier(s) and the
Companies   

Supply of aluminium fluoride for the purposes of the Project.

 

Under development.

46    Calcined Coke Supply Agreement(s)    Selected Supplier(s) and the
Companies   

Supply of calcined coke for the purposes of the Project.

 

Under development.

 

Engineering and Construction Arrangements 47    Smelter EPCM Agreement    Saudi
Arabian Bechtel Company and Ma’aden; and Overseas Bechtel, Incorporated and
Ma’aden   

EPCM arrangements for the Smelter.

 

Signed agreement in place

48    Refinery EPCM Agreement    Selected Supplier(s) and the Refining Company
  

EPCM arrangements for the Refinery.

 

Currently out for bids.

49    Rolling Mill Feasibility Study    Fluor   

To conduct a bankable feasibility study of the Rolling Mill.

 

Signed agreement in place.

50    2009 marketing study – rolled products    McKinsey   

Marketing study to assist with identification of final product mix for Rolling
Mill in support of feasibility study.

 

Signed agreement in place.

 

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51    Conceptual engineering study for Rolling Mill    SMS Siemag   

Equipment configuration and engineering design data to support feasibility
study.

 

Signed agreement in place.

Mining Licences

52    License No. 6/g dated 12/02/2007    Ministry of Petroleum & Mineral
Resources and Ma’aden   

Mining licence in respect of 50 Sq. Km Al-Zabirah (Area 1) site.

 

Thirty (30) years in duration.

53    License No. 7/g dated 13/02/2007    Ministry of Petroleum & Mineral
Resources and Ma’aden   

Mining licence in respect of 50 Sq. Km Al-Zabirah (Area 2) site.

 

Thirty (30) years in duration.

54    License No. 8/g dated 13/02/2007    Ministry of Petroleum & Mineral
Resources and Ma’aden   

Mining licence in respect of 47.76 Sq. Km Al-Zabirah (Area 3) site.

 

Thirty (30) years in duration.

 

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SCHEDULE 10

Project Economics

Part 1 - Estimate of Project Costs

Capital costs for the Project have been assessed according to the table below.
Each sector of the Project is at a different stage of development, namely:

 

•  

Mine and Refinery – FEL 2, estimate accuracy +/- 20%

 

•  

Smelter – FEL 3, estimate accuracy +/- 10%

 

•  

Rolling Mill – initial feasibility, factored estimate

 

•  

Project infrastructure – factored estimate

These costs do not include the cost of financing or interest during
construction.

Financing costs and interest during construction will be negotiated during the
project financing and captured in the Base Case Model for the Project.

 

136

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Aluminium Project Capital Estimate Summary

USD Millions

 

     Mine    Refinery    Smelter    Casthouse    Rolling Mill    Infrastructure
   Total

Direct Costs

   205    1,686    2,407    400    1,300    237    6,235

Indirect Costs

   54    519    535       300    50    1,457

Contingency

   23    303    297       150    15    787

Escalation

      —            —        

EPC/M Controlled Scope

   282    2,508    3,239    400    1,750    302    8,480

Owner’s Team

   6    57    106    —      60    20    249

TTA & OSA

      21    168    —            189

Construction Office

   2          —         5    7

Insurance

            —         35    35

Owner’s Project Costs

   1    6       —      5    3    15

Operations Team

   1    42    24    —      40       107

Corporate Management

            —         10    10

ERP

            —         60    60

Start-up Raw Materials

      15    100    —      50       165

Initial Working Capital

   2    22    20    —      30       74

Operational Readiness Costs

   4    12       —      10       26

Contingency

   28    137    150    —      200    25    540

Escalation

            —            —  

Forex

            —            —  

Owner’s Reserves

            —            —  

Gap to Existing Scope

         40             40

Owner Managed Costs

   45    312    608    —      395    158    1,517

Total

   327    2,819    3,847    400    2,145    460    9,998

Note: Project costs do not include financing costs or interest during
construction

 

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Part 2 - Pre-Financing Budget

The forecast of remaining costs to incorporation has been calculated on the
assumption that incorporation will occur in conjunction with the Notice to
Proceed for the Smelter and Rolling Mill at the end of June 2010. This is
summarised in the table below:

 

Period

   USD (Millions)    Key Activities

Q4 2009 Forecast

   $ 45.5   

H1 2010 Forecast

   $ 287.0    Based on Smelter NTP 1st July 2010

Forecast to Incorporation

   $ 332.5   

This is made up of US$162 million of Project costs and US$125 million of Plant
and Equipment, which includes allowances for the completion of the 380kV
substation and transmission line as well as early works for the Smelter, Rolling
Mill and Refinery.

Additional costs will be incurred between the NTP for Phase 1 and Financial
Close. This budget will be developed and agreed between the Parties.

Part 3 - Project Model

The Project has prepared a Project Model for analysis of the Project. The
Project Model is calculated before the effects of project financing and tax,
using the following assumptions:

 

•Base Discount Rate (nominal)

   9.0 % 

•Long- Term General Inflation CPI

   2.5 % 

•Long-Term Metal Price Assumption

(Nominal Terms - 2013)

   2,248   

•Alumina Price Assumption (% LME)

   13.5 % 

•Credit Terms - Receivables (days)

   30   

•Payment Terms - Payables (days)

   60   

•Days of Inventory (days of cash cost)

   15   

Operating cash costs are calculated for the first year of full production as:

 

•Mine and Refinery (USD/tonne)

   146

•Smelter (USD/tonne)

   1,244

•Rolling Mill (USD/tonne excluding metal)

   257

The results of the financial modeling are summarized below:

 

     Capex
(US$ millions)    IRR
(%)     NPV
(US$ millions)  

Smelter and Infrastructure(1)

   4,706    14.0 %    3,450   

Rolling Mill

   2,145    8.8 %    (61 ) 

Phase 1 Total

   6,851    12.2 %    3,389   

Mine and Refinery

   3,146    10.0 %    384   

Integrated Aluminium Project

   9,997    11.6 %    3,773   

Notes:

(1)

Includes Casthouse $400M and Infrastructure $460M

(2)

Based on AP37 technology, AP39 in 2020

 

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(3)

All results are nominal, pre-tax and ungeared

Further work is required on the Project Model to ensure alignment on the model
structure and input assumptions prior to the development of the Base Case Model.
The results shown above are preliminary only.

 

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SCHEDULE 11

Ma’aden Existing Project Assets

 

1. Permits

The following permits will be transferred to the Company by Ma’aden in
accordance with the provisions of Clause 6.1 of the Agreement:

 

1.1 Industrial license – this is subject to update to reflect the current
capacities and configuration of the Project

 

1.2 Mining Licenses (as defined in Schedule 9)

 

1.3 Water well drilling and extraction authorization

 

1.4 Access roads and rights-of-way, including right of way dated 29 May 2007
issued by Saudi Electric Company for the construction of a new 380kV and 230kV
overhead transmission line from Jubail substation

 

1.5 Authorization for power generation for the Mine

 

1.6 Aviation clearance for high rise buildings proposed in respect of the
Project

 

1.7 Environmental Permit for the Project – this is subject to update to reflect
the current capacities and configuration of the Project

Application forms for any other permits relating to the Project, submitted to
KSA Governmental Authorities by Ma’aden or its Affiliates prior to the Effective
Date and additional permits that may be issued to Ma’aden or its Affiliates in
respect of the Project pursuant to pending application forms filed by Ma’aden
prior to the Effective Date, shall be transferred to the Company on its
formation.

 

2. Physical assets

The following physical assets will be transferred to the Project Company by
Ma’aden in accordance with Clause 6.1:

 

2.1 Ma’aden Aluminium Project interest in the 380 kV substation and associated
infrastructure

 

3. Agreements and allocation letters

Agreements and allocation letters as described in Schedule 9 will be transferred
or novated to the Project Company by Ma’aden in accordance with Clause 6.1

 

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SCHEDULE 12

Alcoa Existing Project Assets

No assets.

 

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SCHEDULE 13

Pre-Incorporation Development Committee, Project Account and Steering Committees

Part 1 – Development Committee Procedures

 

1. Definitions

In this Schedule 13, the following terms shall have the following meanings:

“Deadlock” for the purposes of this Schedule 13 shall bear the meaning stated in
paragraph 9.

“Member” means a member from time to time of the Development Committee.

“Project Executive Director” means the project director appointed by the
Development Committee, being a member of the Steering Committees.

“Steering Committee” means the working group which shall be drawn from the
Project team under the general authority and supervision of the Development
Committee for each of the Mine/Refinery, the Smelter and the Rolling Mill.

 

2. Appointment of the Development Committee

 

  (a) Prior to incorporation of the Company and appointment of the Board of
Managers, the development of the Project shall be managed by the Development
Committee. The Development Committee shall consist of five (5) Members. Promptly
after the Effective Date, the required appointments shall be made such that
Ma’aden will appoint three (3) Members and Alcoa will appoint two (2) Members.

 

  (b) Ma’aden shall appoint the Chairman of the Development Committee.

 

  (c) All appointments of Members shall be effected by written notice to the
other Party.

 

  (d) Unless otherwise agreed between the Parties, vacancies will be promptly
filled by the Party having the right to appoint a Member to the vacant seat,
such that the composition of the Development Committee shall at all times be in
accordance with this Schedule 13.

 

  (e) The Party who appointed a Member may remove that Member at any time by
written notice to the other Party. In the event that a Member is removed or
resigns or becomes incapacitated or otherwise unable to serve for any reason,
the Party who appointed him shall promptly appoint a replacement.

 

3. Authority of the Development Committee

 

3.1 Authority

 

  (a) The Members shall have full authority to act on behalf of the Parties, in
accordance with the terms and conditions of the Agreement and this Schedule 13.

 

  (b) The Development Committee shall have authority to bind the Parties in
relation to the Project within the framework of the authorities and
responsibilities specified below:

 

  (i) The Development Committee shall be responsible for:

 

  (A) overall coordination for the development of the Project;

 

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  (B) appointing the Project Executive Director, the Director, Project
Governance, and such other executive positions as it deems necessary;

 

  (C) establishing the Steering Committees, whose charter is set forth at Part 3
of this Schedule 13;

 

  (D) setting budgets for Project development costs;

 

  (E) setting and revising guidelines for the Steering Committees; and

 

  (F) reviewing the progress of the Steering Committees.

 

  (ii) The Development Committee shall have authority to approve Development
Committee Funding Calls.

 

  (iii) The Development Committee shall have authority to approve expenditures
and payments to be made on behalf of the Project and reimbursed as set out in
Clause 13 of the Agreement.

 

  (iv) The Development Committee shall have authority to approve the entry into
third party contracts by either Shareholder on behalf of a Company in connection
with the Project.

 

  (v) The Development Committee shall have authority to approve any Project
Agreement.

 

  (vi) The Development Committee will review a recommended authorities matrix
for commitments and payment approvals which, if approved by the Development
Committee, will be delegated to the Project Director appointed by the
Development Committee and to members of the Steering Committees.

 

  (vii) Commitments made by the Project Director and/or the Steering Committees
consistent with their delegated authority shall be reported to the Development
Committee at the next meeting after the commitment.

 

  (viii) Requests for the approval of commitments above delegated authority
level shall be submitted to the Development Committee in a standard format to be
specified by the Development Committee.

 

  (ix) Upon approval by the Development Committee of commitments, the Chairman
of the Development Committee shall issue, under his signature, an extract of the
minutes confirming the approval.

 

  (x) Members of the Development Committee shall be responsible for keeping the
respective Shareholders well informed on all aspects of the Committee’s
operations, decisions and commitments.

 

3.2 Voting Thresholds

 

  (a) Subject to paragraphs 3.2(b) and 4(g) below, each Member shall have one
(1) vote, and the Chairman of the Development Committee shall not have any
additional voting power (including any casting vote) by virtue of his position.

 

  (b)

Subject to paragraph 3.2(c), the Development Committee shall adopt its
resolutions with the affirmative simple majority vote of the Members being
present in person or by proxy, and entitled to vote, at a duly convened meeting
of the Development Committee at which a quorum is present (or in the case of a
written resolution taken without a Development

 

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Committee meeting, the total number of Members). The decisions requiring the
affirmative simple majority vote of the Members shall comprise all such
decisions of the Members other than those for which a special majority
resolution is required pursuant to paragraph 3.2(c) below.

 

  (c) The following decisions shall require the affirmative special majority
vote of seventy five per cent (75%) of the Members being present in person or by
proxy, and entitled to vote, at a duly convened meeting of the Development
Committee at which a quorum is present or in the case of a written resolution
taken without a meeting of the Development Committee, seventy five per cent
(75%) of the Managers entitled to vote:

 

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

 

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

 

4. Meetings of the Development Committee

 

  (a) The Chairman of the Development Committee shall appoint a secretary to
circulate to the Members a proposed agenda for each Development Committee
meeting along with notice of such meeting at least seven (7) days prior to the
commencement of the meeting, which agenda shall include:

 

  (i) standing agenda items (including, as appropriate, review of previous
meeting minutes, Project reports, incorporation of the Company status report,
and any other relevant business);

 

  (ii) matters for approval, including authorisation of any Development
Committee Funding Calls;

 

  (iii) special business matters; and

 

  (iv) any papers to be considered by the Development Committee at such meeting.

 

  (b) The Project Executive Director, the Director, Project Governance and the
chairs of each Steering Committee and their deputies (or their respective
designees) will attend each Meeting of the Development Committee.

 

  (c) Any Member may propose additional items for the agenda not less than three
(3) days prior to the meeting, following which the secretary shall circulate to
the Members the revised agenda for the meeting. Except as may be agreed by all
Members present and entitled to attend and vote at a meeting of the Development
Committee, no resolution or business shall be passed or transacted at any such
meeting that is not included in the agenda for such meeting.

 

  (d) No business shall be transacted at any duly convened meeting of the
Development Committee unless a quorum is present. The quorum for the transaction
of business at any meeting of the Development Committee shall be at least one
(1) Member appointed by each Shareholder. The Parties shall use reasonable
endeavours to ensure that the Members appointed by them attend each meeting of
the Development Committee and that a quorum is present throughout the meeting.

 

  (e)

The secretary shall circulate the minutes of each meeting to all Members within
three (3) days after the meeting. Each Member shall respond within five (5) days
of receipt, either

 

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countersigning the minutes to confirm agreement to their contracts or raising
comments, as appropriate.

 

  (f) Meetings of the Members may be held by conference call or video
conference. Meetings of the Members shall be held on a monthly basis, on the
second Monday of each month, unless all Members agree otherwise. Any Member may
request an additional meeting by giving ten (10) days written notice to all
other Members, unless all other Members agree a shorter time period for such
notice.

 

  (g) Meetings of the Members shall be held at the Project offices in Al-Khobar
in the Kingdom, or at such other places as may be agreed by the Shareholders.
Meetings shall be held at such times as specified by the Chairman of the
Development Committee. The notice shall include the agenda and all documents
pertaining to the business to be transacted at the meeting. The Development
Committee may waive or modify the requirement for notice (including the duration
of the notice) with the written consent of all the Members either prior to or at
the commencement of the meeting and before any other business is transacted.

 

  (h) A Member may grant a proxy to any other Member appointed by the Party
appointing such Member to attend meetings of the Development Committee and to
vote on his behalf.

 

  (i) The resolutions of the Development Committee shall be laid down in writing
in the English language, and if Ma’aden so requires, in the Arabic language.

 

  (j) Resolutions of the Members may be passed by written resolution.

 

5. Steering Committees

 

  (a) The Development Committee shall establish the Steering Committees to carry
out day-to-day Project development activities under the general authority and
supervision of the Development Committee.

 

  (b) The Steering Committees shall act in accordance with the instructions and
guidelines of the Development Committee and within the authority delegated by
the Development Committee.

 

  (c) The Steering Committees shall continue to operate until such time as the
Parties agree to disband them.

 

  (d) A Mine/Refinery, Smelter and a Rolling Mill Steering Committee will each
be commissioned by the Development Committee pursuant to this Schedule 13.

 

  (e) Steering Committee Membership and Procedures:

 

  (i) Each Steering Committee shall consist of six (6) members in total, with 3
members appointed by Ma’aden and 3 members appointed by Alcoa, each by written
notice to the other Party. Each Party may designate one (1) alternative member,
who may attend in substitution for an absent member appointed by his Party.
Alcoa will appoint the Chair of each Steering Committee.

 

  (ii) Each Steering Committee will meet at least once per calendar month at the
Project offices in Al-Khobar, Saudi Arabia, or such other location as may be
mutually agreed between the Parties from time to time. Meetings will generally
be in person, but may be held by video conference or teleconference.

 

  (iii) At meetings of each Steering Committee, a quorum shall be constituted by
the attendance of at least one representative of each Party.

 

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  (iv) Each Steering Committee shall be responsible for:

 

  (A) overall coordination and for the development of its respective part of the
Project;

 

  (B) setting budgets for development costs for its respective part of the
Project; and

 

  (C) reporting project progress and issues to the Development Committee, and
making recommendations for decisions to the Development Committee (where such
decisions are not within the delegated authority of the Steering Committee).

 

  (v) Individuals who are engaged in the Project may be invited to attend
Steering Committee meetings for the purpose of presenting reports or
recommendations to the Steering Committee, or receiving direction from the
Steering Committee. Advisors may accompany the Steering Committee members as
required

 

  (vi) The Steering Committees may establish sub-committees if considered
appropriate to assist the Steering Committees in discharging its
responsibilities.

 

  (vii) The Steering Committee Chairman will circulate an agenda for each
meeting at least ten (10) days prior to the commencement of the meeting, which
agenda shall include:

 

  (A) Standing agenda items (including, as appropriate, review of previous
meeting minutes, Project report, approvals required and any other relevant
business);

 

  (B) Matters for approval; and

 

  (C) Special business.

 

  (viii) Any member of the Steering Committee may propose additional items for
the agenda not less than six (6) days prior to the meeting, following which the
Steering Committee Chairman shall circulate to the members a revised agenda for
the meeting.

 

  (ix) Papers for consideration by the Steering Committee shall be issued with
the agenda, at least four (4) days prior to the meeting unless a shorter period
is agreed upon by all members.

 

  (x) Unless otherwise agreed by all members present at a Steering Committee
meeting, no resolution or business shall be passed or transacted at any such
meeting that is not included in the agenda for such meeting.

 

  (xi) A decision of the Steering Committee shall require consensus between the
members of the Steering Committee in attendance.

 

  (xii) If a resolution in connection with any matter is considered at any
meeting of the Steering Committee and not passed, any member can refer it to the
Development Committee.

 

  (xiii) Each Steering Committee Chairman shall appoint a Secretary to prepare
minutes of each meeting. The minutes of each meeting shall be circulated to all
members within three (3) days after the date of the meeting. Each member shall
respond within five (5) days of receipt, either to confirm agreement to their
contents or raising comments if appropriate.

 

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  (xiv) Each Steering Committee Chairman shall consider comments received on the
draft minutes and shall issue final minutes to all members within fourteen
(14) days of the meeting. Each member shall either countersign the minutes
(electronic, facsimile or PDF signatures are acceptable) or, in the event that
members of the Steering Committee disagree on the content of a minute from the
meeting, the disagreement will be advised to the Chairman and shall be included
in the agenda of the following meeting for resolution.

 

  (xv) Members of each Steering Committee are responsible for keeping the
respective Parties well informed on all aspects of the Steering Committee’s
operations and decisions. Each Steering Committee Chairman will attend meetings
of the Development Committee (and, eventually the Board) and will report on such
Steering Committee’s activities.

 

6. Project Integration and Executive Council

 

  (a) The Project Integration and Executive Council (the “Council”) will
facilitate the coordination of the three elements of the Project, and the
Project interfaces with shared site infrastructure.

 

  (b) The Council will be composed of the three Steering Committee Chairmen, the
three Steering Committee Deputy Chairmen, the Project Director – Project Systems
and Project Services, and the Project Executive Director, who will serve as the
chair of the Council.

 

  (c) The Council will meet as frequently as required.

 

7. Costs

 

  (a) Each Party shall bear the costs incurred by its appointed Members in
connection with their attendance at meetings of the Development Committee,
including travel and accommodation costs.

 

  (b) Administrative costs incurred by the Development Committee shall
constitute Pre-Incorporation Development Costs.

 

8. Winding up

 

  (a) The Development Committee may be wound up at any time on the agreement of
the Parties, subject to the prior reconciliation of expenditures made and
committed by the Parties to date.

 

  (b) The Development Committee shall be wound up on incorporation of the
relevant Company and appointment of the Board of Managers.

 

  (c) The Steering committees may be wound up by agreement of both Parties and
the reconciliation of expenditures.

 

9. Deadlock

 

  (a) If a resolution with respect to any proposed action or omission by the
Development Committee that constitutes a matter requiring affirmative special
majority decision by the Development Committee, as identified in paragraph
3.2(c) above, is proposed at two (2) consecutive meetings of the Development
Committee and such resolution (as it may be amended or supplemented) is not
approved at either of such meetings, such situation shall be considered to
constitute a “Deadlock” for the purposes of this Schedule 13.

 

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  (b) Any Shareholder whose appointed Members have not voted against or
abstained from voting in respect of a resolution that has resulted in Deadlock,
may during the period of thirty (30) days after such Deadlock has arisen (but
not after such period) request that the chief executive officers of the ultimate
parent companies of each of the Parties or their representatives, specifically
designated for the purpose of resolving the Deadlock shall meet within a further
fifteen (15) days to negotiate in good faith with a view to resolving the
Deadlock.

 

  (c) A Deadlock shall not be submitted to, or be capable of resolution by,
arbitration under this Agreement, provided that, any dispute with respect to the
compliance by the Parties with their obligations under this paragraph 8 may be
subject to arbitration pursuant to Clause 21.3 of the Agreement.

 

  (d) The rights and remedies of the Parties under this paragraph 8 shall be the
exclusive rights and remedies of the Parties with respect to any Deadlock of the
Development Committee.

Part 2 – Payment Mechanism

 

1. Within seven (7) days of the Effective Date, the Parties shall open the
Project Account. The initial deposit in the Project Account shall be USD 5
(five) million, which shall be paid by each Party in proportion to their
Shareholder Percentage.

 

2. Subsequently, the Project Account shall be funded by deposits from the Party
in accordance with each Development Committee Funding Call. The Parties shall
make payments in proportion to their Shareholder Percentage.

 

3. Each Party shall designate two (2) persons as authorised signatories for the
Project (each an “Authorised Signatory”). One (1) Authorised Signatory
designated by each Party will be required to sign all bank instruments and any
other related documentation in connection with the Project Account.

 

4. Payments out of the Project Account shall:

 

  (a) be subject to the approval of the Development Committee; and

 

  (b) be effected on the basis of an approved Project payment request in a form
to be agreed to by the Parties, and

all such payment requests shall be supported by copies of orders, invoices and
Development Committee approvals, as applicable.

 

5. A schedule of payments effected out of the Project Account in any given month
shall be submitted to the Development Committee on a monthly basis.

 

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Part 3 - Project Organisation (graphic depiction)

The attached PowerPoint illustrates the current working model for the Project
organisation.

 

LOGO [g91834ex10_ipg172.jpg]

 

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LOGO [g91834ex10_ipg173.jpg]

 

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LOGO [g91834ex10_ipg174.jpg]

 

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LOGO [g91834ex10_ipg175.jpg]

 

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LOGO [g91834ex10_ipg176.jpg]

 

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LOGO [g91834ex10_ipg177.jpg]

 

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LOGO [g91834ex10_ipg178.jpg]

 

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LOGO [g91834ex10_ipg179.jpg]

 

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LOGO [g91834ex10_ipg180.jpg]

 

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LOGO [g91834ex10_ipg181.jpg]

 

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LOGO [g91834ex10_ipg182.jpg]

 

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LOGO [g91834ex10_ipg183.jpg]

 

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LOGO [g91834ex10_ipg184.jpg]

 

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LOGO [g91834ex10_ipg186.jpg]

 

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LOGO [g91834ex10_ipg187.jpg]

 

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LOGO [g91834ex10_ipg188.jpg]

 

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SCHEDULE 14

Alcoa Services

Part 1 - Alcoa Services

In addition to (a) participation in the Development Committee and on the
Mine/Refinery, Smelter and Rolling Mill Steering Committees under Schedule 13;
(b) the technology licensing and assistance being provided pursuant to the
interim Technology Licenses; and (c) services to be provided under various
Ancillary Agreements, the following are the services that Alcoa anticipates
providing to the Companies:

 

1. Engineering and Construction Phase

 

1.1 General Services

 

  (a) Project execution leadership in all three Steering Committees, and at
overall Project level including through deputation of experience personnel where
needed

 

  (b) Contribute experienced technical, financial, energy, managerial,
marketing, raw material procurement and other resources to the owner’s team

 

  (c) Design engineering and construction peer review teams; Monitoring of
construction progress and development of remedial plans where required

 

  (d) Procurement advisory services

 

  (e) Development of EPC/EPCM bid packages and evaluation of bid submissions

 

  (f) Negotiation assistance, both with potential EPCs/EPCMs, but also with
other contractors and power supplier(s);

 

  (g) Assistance on Project Financing process, including financial work on
bankable feasibility studies

 

  (h) Advise on sales and marketing (critical for Rolled Products)

 

  (i) Research and Development linkage to Alcoa’s worldwide research facilities
and product development activities

 

  (j) Assistance on Human Resources (HR) systems/standards/practices ,
including, (i) Strategic HR activities, including developing long-term
hiring/sourcing, employment and training plans; (ii) Tactical HR activities,
including identifying Alcoa and other industry resources to assist during
engineering and construction; and (iii) Facilitate training assignments and
secondments for operating staff at Alcoa facilities

 

  (k) Disclosure of non-confidential improvements and innovations

 

  (l) Environmental , health and safety services

 

  (m) Any other services or assistance (including inter-alia any services in the
nature of business advisory services and management services)as mutually agreed
to by both parties

 

1.2 Mine/Refinery-specific Services

 

  (a) Refinery technology and design elements required following RTA’s
withdrawal

 

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  (b) Leverage engineering work done previously on refinery projects, expected
to result in time and cost savings to Project

 

  (c) Initiate planning to provide an experienced commissioning team to ensure a
smooth start up.

 

  (d) Any other services or assistance as mutually agreed to by both parties

 

1.3 Smelter-specific Services

 

  (a) Provide significant assistance in managing the Bechtel relationship – this
will leverage Alcoa’s experience with Bechtel on the Fjarðaál Project in Eastern
Iceland, and should improve Bechtel’s accountability and performance and result
in budget savings to Project

 

  (b) Smelting technology and design elements required following RTA’s
withdrawal

 

  (c) Initiate planning to provide an experienced commissioning team to ensure a
smooth start up

 

  (d) Smelting technology and design elements required following RTA’s
withdrawal including the design changes implemented to achieve high amperage and
high energy efficiency as implemented in Alcoa high amperage smelters including
the Fjardaal smelter.

 

  (e) Any other services or assistance as mutually agreed to by both parties

 

1.4 Rolling Mill (including Casthouse and Metal Recycling / Dross Processing)

 

  (a) Provide critical equipment configurations based on Alcoa best practices,
operating experience and critical proprietary technology, develop and provide
detailed equipment specifications for major CAPEX pieces of equipment, said
specifications to comprehend critical process / quality requirements needed to
produce can sheet and end and tab products , provide detailed input into
equipment layouts, process and material flow , scrap handling etc. . Optimize
CAPEX investment by eliminating unnecessary CAPEX (e.g. elimination of edge
scalping , minimization of Cast house CAPEX via EMC technology., etc. ) through
the integration and use of proprietary Alcoa technology. Alcoa will provide
subject matter experts to provide detailed know how for all sections of the mill
to ensure that the mill will be capable to produce the can products targeted.

 

  (b) Provide Alcoa’s proprietary designs for UBC scrap recycling equipment as
well specialized and proprietary equipment for casting , filtration, metal
treatment, and dross processing. Said equipment will represent state of the art
technology and know how based off Alcoa best practices, proprietary technology
and expertise.

 

  (c) Participate in an integrated team (Alcoa subject matter experts and
Ma’aden employees) in a parallel approach going forward to reach Financial
Closure in the required time, including (i) engaging OEMs for engineering on the
rolling and casting /ancillary equipment ; (ii) engaging an engineering firm for
engineering of infrastructure, buildings and facility elements; and
(iii) engaging and guiding consultants to establish market data to determine
product mix and speed of ramp up to full production of mainly sophisticated
sheet for can production. Technical engagement will include detailed engineering
inputs based on Alcoa experience such as typical emissions levels, consumption
levels, supporting utilities requirements and the like . Marketing engagement
will include the supply of Alcoa proprietary market data on the RCS market
including RCS sheet demand knowledge in MENA, Europe and Asia.

 

  (d)

Initiate planning to provide an experienced commissioning team to ensure that
the mill will produce customer accepted products from the earliest date
possible. This should eliminate

 

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technical problems from the ramping up period to the minimum necessary to
capture the envisaged market share.

 

  (e) Any other services or assistance as mutually agreed to by both parties

 

2. Start-up and operation phase

 

2.1 General Services

 

  (a) Deploy high-functioning, experienced commissioning teams to Mine/Refinery,
Smelter and Rolling Mill to start up facilities as efficiently, safely and
effectively as possible

 

  (b) Provide assistance in hiring/sourcing training and developing the
operating company’s workforce

 

  (c) Provide experienced resources for key managerial positions (across all
material functions) as needed including through deputation of experience
personnel where needed

 

  (d) Provide access to Alcoa’s system of operational development and relevant
personnel to maintain competiveness (as reflected inter-alia through cost of
production, downtime etc.) of the assets deployed across all three project
elements

 

  (e) On request, review relevant operational data from the Companies and
provide feedback on specific aspects

 

  (f) Provide access to product development know-how, particularly for rolled
products

 

  (g) Provide technical sales support, particularly for rolled products

 

  (h) Provide access to Alcoa’s worldwide leveraged procurement initiatives

 

  (i) Provide access to Alcoa’s operating procedures / quality control
procedures /any other relevant best practices in order for the companies to
establish their governance framework, internal policies & procedures

 

  (j) Dispatch of subject matter experts on short term assignments (on request)

 

  (k) Research and Development linkage to Alcoa’s worldwide research facilities
and product development activities

 

  (l) Assistance on Human Resources (HR) systems/standards/practices including,
(i) Strategic HR activities, including developing long-term hiring/sourcing,
employment and training plans; (ii) Tactical HR activities, including
identifying Alcoa and other industry resources to assist during engineering and
construction; and (iii) Facilitate training assignments and secondments for
operating staff at Alcoa facilities

 

  (m) Environmental, health & safety services

 

  (n) Raw material procurement, Marketing and logistics services

 

  (o) Finance / Accounting & Control / Treasury & Risk Management Services

 

  (p) Disclosure of non-confidential improvements and innovations

 

  (q) Any other services or assistance (including inter-alia any services in the
nature of business advisory services or management services) as mutually agreed
to by both parties

 

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2.2 Mine/Refinery-specific Services

 

  (a) Pre-train key managers and operators to ensure smooth Refinery start-up
including through on-site training

 

  (b) Deploy experienced Mine/Refinery start-up team

 

  (c) Provide technological, technical and managerial linkage to Alcoa’s
world-wide Mining and Refining system, which mines in excess of 35 million MTPY
of bauxite, and refines in excess of 15 million MTPY of alumina

 

  (d) Any other services or assistance as mutually agreed to by both parties

 

2.3 Smelter-specific Services

 

  (a) Pre-train key managers and operators at Alcoa’s AP smelters around the
world to ensure smooth Smelter start-up

 

  (b) Deploy experienced Smelter start-up team

 

  (c) Provide smelter-casthouse quality system and best practices for
controlling metal purity and primary aluminum product qualification into London
Metal Exchange (LME)

 

  (d) Provide technological, technical and managerial linkage to Alcoa’s
world-wide Smelting system, which produces in excess of 4.5 million MTPY of
primary aluminum

 

  (e) Marketing and logistics services

 

  (f) Any other services or assistance as mutually agreed to by both parties

 

2.4 Rolling Mill

 

  (a) Pre-train key managers and operators at Alcoa’s can sheet rolling mills
around the world to ensure smooth start-up of the cast house and rolling mill.

 

  (b) Deploy experienced Rolling Mill start-up team (Subject Matter experts)
during commissioning and start-up phases.

 

  (c) Provide personnel, laboratory and customer linkages necessary to qualify a
new can stock facility

 

  (d) Provide technological, technical and managerial linkage to Alcoa’s
world-wide Rolling system, which includes the premier can end, tab and body
stock manufacturing plants

 

  (e) Provide proprietary Alcoa Technology necessary for the operation of the
mill. This proprietary technology includes access to Alcoa Proprietary:

 

  (i) EMC casting technology (High productivity equipment hardware modifications
made by Alcoa, casting practices)

 

  (ii) EMC mold technology

 

  (iii) Molten metal filtration technology and practices

 

  (iv) Molten metal degassing technology and practices

 

  (v) Modified alloy chemistries to maximize scrap content & associated
processing paths to still meet customer requirements

 

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  (vi) Melter energy/dross optimization technology and practices

 

  (vii) Alcoa developed controls/models for Hot mills and Cold mills

 

  (viii) In-line Alcoa proprietary Surface Quality Inspection Systems (SQM)

 

  (ix) Alcoa Proprietary Water based lubrication technology

 

  (x) Alcoa proposed cold mill pre-quench (significantly minimizes working
capital / min hot mill store size)

 

  (xi) Taper rolling technology

 

  (xii) Roll Coating Technology including Alcoa developed grinding/polishing
practices

 

  (xiii) Can body scalp elimination requirements (Significant recovery
improvements)

 

  (xiv) Scalper controls / measurement system (Recovery optimization)

 

  (xv) End and Tab coating Line Equipment Configuration and practices

 

  (f) Any other services or assistance as mutually agreed to by both parties

 

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Part 2 - Technology Licenses and Support Services

Pursuant to Clause 26.4, Alcoa will offer to enter into separate technology
license agreements and technical support agreements with the Companies in
respect of the following and on the payment terms detailed below, the Parties
shall grant to the Companies a license to use Intellectual Property which is
owned by the Parties but is required to implement the Project.

 

1. Intellectual Property

Alcoa will make the following technologies available to the relevant Company on
the terms and conditions to be set out in the technology license agreements
contemplated by Clause 26.4:

 

1.1 Mining & Refining Company

 

  (a) QUASAR

 

1.2 Smelting Company

 

  (a) Potential Replacement of AP39 with AP33 + Fjardaal improvements

 

1.3 Rolling Company

 

  (a) Alcoa Rolling Mill technology

 

  (b) Alcoa Casting Technology

 

  (c) Recovery Maximization Technology

 

  (d) Melter Optimization Technology

 

  (e) Alcoa Proprietary Surface Inspection Systsms

 

  (f) Proprietary Roll Coating Technology

 

  (g) Water based Rolling Lubricants

 

  (h) Alcoa Proprietary Control Systems

 

  (i) Alcoa UBC Delacquering Technology

 

  (j) Dross Processing/Metal Reclamation Technology

 

  (k) Rolling Lubricant Management Technology

 

  (l) Alloy Cost Optimization

 

2. Support services

In addition to the specific technologies set out above, Alcoa will provide the
following support services in relation to the Project for each of the Mining &
Refining Company, the Smelting Company, and the Rolling Company:

 

  (a) Replication of existing engineering where appropriate

 

  (b) Access to incremental technology advancements

 

  (c) Access to Alcoa Business Systems and support in implementation

 

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  (d) Access to and support in implementing operating systems, procedures and
know-how

 

  (e) Design and commissioning support for process & engineering technology

 

  (f) Technical problem solving

 

  (g) Coaching of JV operational leadership

 

  (h) Ongoing access to Alcoa facilities for the purposes of training and
transfer of best practice

To structure this support, Alcoa will conduct an annual review of the
operational performance of each of the Mine, the Rolling Mill and the Smelter.
The review will measure the improvements achieved in the previous year, and
recommend the technology and operational improvements to be implemented in the
coming year. On approval by the relevant Company, Alcoa, together with the
[Development Committee/Board of Managers] of the relevant Company, will plan the
support necessary to transfer and embed these gains into the operations of each
Company.

 

3. Fees

In consideration for the licenses granted and services provided as described in
this Schedule 14, the relevant Company will pay the following fees (plus the
relevant travel and expenses):

 

3.1 Technology access fees:

 

  (a) Mining & Refining Company ($25m)

 

  (b) Smelting Company ($30m payable only if Fjardaal technology is selected)

 

3.2 Ongoing license fees for access to support:

 

  (a)

Mining & Refining Company: $3/t alumina produced (with an option to exit the
support arrangement after 10 years or on every 5th year thereafter)

 

  (b) Smelting Company: $8/tonne of aluminum produced escalated at 2.5% pa for 7
years.

 

  (c) Rolling Company: 1% of total revenue (with an option to exit the agreement
after 10 years)

 

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SCHEDULE 15

Project Milestones

 

Task

   Start    End    GAL Deadline

Common Activities

        

Smelter and Power

        

Stage 3 +/- 15% Estimate

      Oct ‘09   

Stage 3 +/- 10% Estimate

      Dec ‘09   

Stage 3 Report

      Jan ‘10   

Project financing

   Oct ‘09    Apr ‘10    Jun ‘10

NTP

      Apr ‘10   

First Metal

      Apr ‘13    Q1 2013

Rolling Mill

        

Stage 2 +/- 20% Study

      Dec ‘09   

Stage 3 +/- 15% Study

      Apr ‘10   

TSA Signed

         Mar ‘10

Financial Close

         Jun ‘10

EPC Contract Signed

         Dec ‘10

Startup

         Q4 2013

Mine and Refinery

        

Stage 2 +/- 20% Estimate

      Oct ‘09   

Stage 2 Report

      Dec ‘09   

Technology Agreement

         Mar ‘10

Stage 3 Engineering

   Dec ‘09    Aug ‘10   

Stage 3 +/- 10% Estimate

      Jul ‘10   

Stage 3 Report

      Aug ‘10   

Project Financing

   Sep ‘10    Mar ‘11    Jun ‘11

NTP

      Apr ‘11   

EPC Contract Signed

      Apr ‘11    Jul ‘11

First Alumina

      Aug ‘14    Q4 2014

 

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