Exhibit 10.14


 


 


 


 


 


 


 


 


 


 


Sponsorship
Agreement


 


 


 


 


 


The
Republic of Nauru


The
Nauru Seabed Minerals Authority


Nauru
Ocean Resources Inc.


 


 


 


 


 


 


 


 


 


 


 


CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
BY [***], HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED.


 




     


     


    

 


Table
of Contents


 


	 	 	 	 	Page
	 	 	 	 	 
	CLAUSE
    1	 	Term	 	2
	 	 	 	 	 
	CLAUSE
    2	 	Sponsorship	 	2
	 	 	 	 	 
	CLAUSE
    3	 	Seabed
    Mineral Recovery Payment	 	3
	 	 	 	 	 
	CLAUSE
    4	 	audit	 	4
	 	 	 	 	 
	CLAUSE
    5	 	Undertaking
    to Comply with ISA Contract Terms	 	5
	 	 	 	 	 
	CLAUSE
    6	 	Subcontractors	 	5
	 	 	 	 	 
	CLAUSE
    7	 	Training
    and Capacity Building	 	6
	 	 	 	 	 
	CLAUSE
    8	 	Indemnification	 	6
	 	 	 	 	 
	CLAUSE
    9	 	Applicable
    Taxes and Payments	 	7
	 	 	 	 	 
	CLAUSE
    10	 	Nauruan
    Laws, Expropriation and Corporate Existence	 	8
	 	 	 	 	 
	CLAUSE
    11	 	Assignment
    of NORI Rights	 	11
	 	 	 	 	 
	CLAUSE
    12	 	Notification
    to NORI	 	12
	 	 	 	 	 
	CLAUSE
    13	 	Exploitation
    Application	 	12
	 	 	 	 	 
	CLAUSE
    14	 	Environmental
    and Safety Performance Monitoring Program	 	13
	 	 	 	 	 
	CLAUSE
    15	 	ESPMP
    Officers	 	14
	 	 	 	 	 
	CLAUSE
    16	 	Completion
    Criteria	 	15
	 	 	 	 	 
	CLAUSE
    17	 	Confidentiality	 	15
	 	 	 	 	 
	CLAUSE
    18	 	Administration
    Fee	 	15
	 	 	 	 	 
	CLAUSE
    19	 	NORI
    Default and Republic Default	 	16
	 	 	 	 	 
	CLAUSE
    20	 	Temporary
    Suspension of Activities	 	17
	 	 	 	 	 
	CLAUSE
    21	 	Material
    NOR! Breach Termination	 	18



 


CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN
THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM
IF PUBLICLY DISCLOSED.


 






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Table
of Contents


 


	 	 	 	 	Page
	 	 	 	 	 
	CLAUSE
    22	 	Material
    Republic Breach	 	20
	 	 	 	 	 
	CLAUSE
    23	 	Dispute
    Resolution	 	21
	 	 	 	 	 
	CLAUSE
    24	 	Authorisation
    to Enter Agreement	 	21
	 	 	 	 	 
	CLAUSE
    25	 	Governing
    Jurisdiction	 	21
	 	 	 	 	 
	CLAUSE
    26	 	International
    Law	 	22
	 	 	 	 	 
	CLAUSE
    27	 	Notices	 	22
	 	 	 	 	 
	CLAUSE
    28	 	Entire
    Agreement	 	23
	 	 	 	 	 
	CLAUSE
    29	 	Force
    Majeure	 	23
	 	 	 	 	 
	CLAUSE
    30	 	Amendment	 	24
	 	 	 	 	 
	CLAUSE
    31	 	Severability
    of Provisions	 	24
	 	 	 	 	 
	CLAUSE
    32	 	Further
    Assurances	 	25
	 	 	 	 	 
	CLAUSE
    33	 	No
    Limitation	 	25
	 	 	 	 	 
	CLAUSE
    34	 	Representations
    and Warranties	 	25
	 	 	 	 	 
	CLAUSE
    35	 	Non
    Reliance	 	26
	 	 	 	 	 
	CLAUSE
    36	 	Counterparts	 	26
	 	 	 	 	 
	CLAUSE
    37	 	Interpretation	 	26
	 	 	 	 	 
	CLAUSE
    38	 	Definitions	 	26


 





CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD
LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED.


 




    Page ii



     


    

 


Date


 


PARTIES


 


The
Republic of Nauru (the “Republic”) and The Nauru Seabed Minerals Authority, established under the
International Seabed Minerals Act 2015 (the “Act”) and Nauru Ocean Resources Inc. (No. T/2028) a Nauruan company
having its registered office at 1st Level, Civic Centre, Aiwo District, Republic of Nauru, South Pacific (“NORI”)


 


RECITALS


 


NORI
has the exclusive right to explore for Polymetallic Nodules in the International Seabed Area pursuant to the ISA Exploration Contract.


 


The
Republic has Sponsored NORI’s Activities in the International Seabed Area pursuant to the Certificate of Sponsorship, and agrees
to maintain Sponsorship on the terms of this Agreement.


 


In
exchange for the Republic’s sponsorship, NORI will pay a Seabed Mineral Recovery Payment during Exploitation in accordance with
Section 40 of the Act.


 


The
Seabed Mineral Recovery Payment will be paid to the Seabed Minerals Fund, in accordance with the Act to provide benefits to Nauru’s
current and future generations in a transparent manner. In this way, the Seabed Mineral Recovery Payment paid by NORI during Exploitation
is intended to provide great benefits with a high social rate of return to the people of Nauru.


 


NORI
currently provides capacity building initiatives for Nauruan nationals and proposes to continue to provide such initiatives during the
Exploration and


 


The
International Seabed Area for the prospective exploration and exploitation is outside the sovereign jurisdiction of the Republic and
the Republic does not own the Polymetallic Nodules contained in NORI’s Tenement Area.


 


The
seafloor minerals contained in the Tenement Area are administered by the ISA and NORI will be required to make payments to the ISA for
the right to recover the minerals during Exploitation.


 


It
is acknowledged that considerable funds will be required to be expended at risk before any commercial development of the Polymetallic
Nodules in the Tenement Area. The Republic is not making any monetary investment in the Exploration and Exploitation activities in the
Tenement Area, and accordingly is not exposed to the risk of loss associated with such investment.


 


NORI
undertakes that its Polymetallic Nodule Exploitation in the International Seabed Area will not directly impact on the environment in
the Republic of Nauru and will not cause depletion of the Republic of Nauru’s own mineral resources.


 




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With
regard to the respective obligations and commitments under this Agreement, each of the parties covenant that it shall act in good faith
and deal fairly with the other party.


 


For
good and valuable consideration, the Parties hereto agree to be bound by the following terms and conditions:


 


CLAUSE
1



Term


 


1.1 This
Agreement will remain in force for the duration of NORI’s 15 year ISA Exploration Contract, and will automatically extend for a
further 20 years upon NORI reaching the Minimum Recovery Level under an ISA Exploitation Contract, unless:


 


(a) NORI’s
ISA Contract is terminated by the ISA as a result of NORI breaching the ISA Contract; or


 


(b) this
Agreement is terminated pursuant to clauses 10.6, 11, 21, or 22 of this Agreement.


 


CLAUSE
2



Sponsorship


 


2.1 The
Republic agrees to:


 


(a) provide
and maintain Sponsorship of NORI and NORI’s Exploration and Exploitation of the Tenement Area (including providing Sponsorship
of NORI’s Exploitation application to the ISA) for the Term of this Agreement;


 


(b) do
all things reasonably necessary to give effect to NORI having the full benefit of the Sponsorship, including renewing NORI’s Certificate
of Sponsorship, undertaking communications with, and providing documentation, certificates and undertakings to, the ISA or other regulatory
body required in respect of the Sponsorship; and


 


(c) fulfil
its responsibilities under Section 30 of the Act.


 


2.2 For
clarity, the Republic acknowledges that the Sponsorship is provided by the Republic, as a signatory to UNCLOS, for the purposes of UNCLOS
and the ISA Regulations and that neither this Agreement nor Sponsorship confers on the Republic any rights to or in connection with:


 


(i) the
Tenements;


 


(ii) the
Polymetallic Nodules contained within the Tenements or recovered therefrom; or


 


(iii) any
product produced from the processing of the Polymetallic Nodules.


 






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2.3 NORI
will have the exclusive enjoyment and right to carry out the Exploration and Exploitation in the Tenement Area, and NORI may at its sole
discretion deal with the title and ownership of Tenements and Polymetallic Nodules in any way, and the NORI Group may at their sole discretion
make an Assignment upon providing notification to the Republic.


 


2.4 The
Republic recognizes that the Exploration and Exploitation within the Tenements shall require significant international financing, and
the Republic agrees to use its best efforts to assist the NORI Group to obtain financing, including entering into agreements and providing
formal documents that the lenders, investors and other third parties may reasonably require in relation to Sponsorship and the provision
of regulatory certainty, however nothing herein will require or be deemed that the Republic has provided or guaranteed any such financing.


 


2.5 For
the avoidance of doubt, the Republic is only sponsoring NORI, and is not sponsoring or responsible for the activities of any other entity
in the NORI Group.


 


CLAUSE
3



Seabed Mineral Recovery Payment


 


3.1 In
exchange for the Republic agreeing to provide continued Sponsorship for the Term on the terms set out in this Agreement, NORI shall pay
to the Republic during Payment Years a Seabed Mineral Recovery Payment (“SMRP”) in accordance with this Clause 3.


 


3.2 The
Seabed Mineral Recovery Payment will be US$[***] per Tonne of Polymetallic Nodules Recovered from the Tenement Area during Payment Years.


 


3.3 The
SMRP shall be paid in arrears on or before the last day of the month immediately following the end of each calendar quarter during Payment
Years.


 


3.4 The
SMRP is fixed for the first five years of this Agreement, and shall be adjusted (on a compounding basis) on the first day of January
in each following year by the relevant factor in each following year that represents official inflation in the United States of America
using the All Items Consumer Price Index for All Urban Consumers (CPI-U) for the U.S. City Average published from time to time by the
United States Department of Labour, Bureau of Labour Statistics. For example, if official inflation in the US is 3% in the 6th year of
this Agreement the SMRP will be increased by 3% from US$[***] to US$[***].


 


3.5 Until
such time as NORI reaches the Minimum Recovery Level within the Tenement Area, no SMRP or other amounts or payments will be payable by
NORI to the Republic, except for the Administration Fee under Section 18 of this Agreement.


 




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3.6 Subject
to Sections 9 and 18 of this Agreement:


 


(a) the
Republic hereby agrees that the SMRP contemplated under this Section 3 represents the totality of the monetary contributions, payments
and Taxes the NORI Group is required to make to the Republic;


 


(b) the
NORI Group will not be subject to or required to pay any other Taxes for the Term, including without limitation any Tax related to the
Exploration, Exploitation, the NORI Rights, the Business and/or Sponsorship.


 


3.7 The
Republic hereby undertakes and affirms that at no time will the rights (and the full and peaceful enjoyment thereof) granted by it under
this Agreement be discriminately derogated from or otherwise prejudiced by any Nauruan Law or the action or inaction of the Republic,
or any official thereof, or any other person whose actions or inactions are subject to the control of the Government. To the extent there
is inconsistency between any future Nauruan Law related to taxation or the financial terms between the Republic and the NORI Group, then
this Agreement will govern.


 


CLAUSE
4



audit


 


4.1 The
Republic may, not more than once each calendar year, request in writing an independent audit of the amount of Polymetallic Nodules Recovered
in the preceding calendar year (“Production Audit”). If the Republic requests a Production Audit, NORI and the Republic
shall seek to agree on a suitably qualified and independent auditor to conduct the Production Audit.


 


4.2 NORI
will provide the auditor with reasonable access to its records for the purpose of undertaking the Production Audit.


 


4.3 The
Parties will require the auditor to provide a written report to the Parties on the findings of the Production Audit within 30 days of
completion of the Production Audit. In the absence of manifest error, the findings of the auditor will be binding on the Parties.


 


4.4 If
the auditor determines that a materially larger or smaller (i.e. more than 5%) amount of Polymetallic Nodules were Recovered from the
Tenement Area in the preceding year than reflected in the SMRP calculated by NORI for the year pursuant to clause 3, then within 30 days
of receipt of the auditor’s report, NOM must recalculate in accordance with the accurate and revised figures determined by the
auditor for that year the SMRP under clause 3, and pay to (or deduct from future payments to) the Republic the difference between the
SMRP already paid and the SMRP due under clause 3 on the basis of the revised figures.


 


4.5 The
cost of an audit under this clause will be borne equally between the Republic and NOM.


 




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CLAUSE
5



Undertaking to Comply with ISA Contract Terms


 


5.1 NORI
shall ensure that the Activities carried out in the International Seabed Area will be in compliance with:


 


(i) the
terms and conditions of the applicable ISA Contract that is in existence at the time and that pertains to the Activities in the International
Seabed Area, including the environmental terms and conditions contained in the applicable ISA Contract; and


 


(ii) NORI’s
ISA Obligations that pertain to the Activities in the International Seabed Area.


 


5.2 NOM
and its Subcontractors will not commit any actions, or make any omissions that would cause the Republic to materially breach its Sponsorship
Obligations.


 


5.3 The
Republic will not commit any actions or make any omissions that would cause NORI to breach its obligations under clause 5.1.


 


5.4 NOM
will comply with its obligation under Section 29 of the Act.


 


CLAUSE
6



Subcontractors


 


6.1 Subject
to the provisions of this clause, the Republic acknowledges and agrees that NOM may delegate to and/or contract with Subcontractors to
undertake all or part of the Exploration and Exploitation.


 


(a) agrees
that the Exploration and Exploitation shall be carried out in accordance with NORI’s ISA Obligations and the Act, whether the Exploration
or Exploitation is being carried out by NORI or a Subcontractor; and


 


(b) is
responsible to the Republic for any monetary damage the Republic suffers under UNCLOS for a breach of its Sponsorship Obligations resulting
from the acts, negligence, omissions or defaults of any Subcontractor in carrying out the Activities in the International Seabed Area,
as if they were the acts, negligence, omissions or defaults of NORI.


 


6.2 NORI
shall take reasonable and appropriate measures to ensure that the Activities carried out in the International Seabed Area are executed
by and under the supervision of appropriately qualified, experienced and skilled personnel.


 




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CLAUSE
7



Training and Capacity Building


 


NORI
will implement training and capacity building initiatives for Nauruan nationals in accordance with a program to be developed by NORI
in compliance with Section 8 of the ISA Contract.


 


CLAUSE
8



Indemnification


 


8.1 Except
to the extent that an award of damages is available as a consequence of a breach of this Agreement and subject to clause 8.3, NORI indemnifies
and will keep indemnified the Republic from and against all costs, expenses, losses, charges, demands, actions, damages and Claims or
other monetary liabilities under UNCLOS that the Republic suffers, incurs, sustains or becomes liable for under UNCLOS to the extent
to which the costs, expenses, losses, charges, demands, actions, damages and Claims or other monetary liabilities arise as a consequence
of the Activities in the International Seabed Area being carried out wrongfully and directly causing the Republic to breach its Sponsorship
Obligations.


 


8.2 Upon


 


(a) the
Republic becoming aware:


 


(i) of
any actual or potential Claim against it under UNCLOS; and/or


 


(ii) that
it has or may incur a cost, expense, loss, liability or any damage, for which NORI has indemnified the Republic under clause 8.1, or:


 


(b) if
the Republic can make:-


 


(i) a
Claim against NORI under the clause 8.1 indemnification; and


 


(ii) the
Claim relates to a Claim or liability under UNCLOS against the Republic made from or owed to a third party, including without limitation,
a Claim made against the Republic by the ISA or another country,


 


the
Republic must:


 


(i) Notify
NORI in writing of the alleged Claim or liability as soon as is reasonably practicable after the Republic becomes aware of such Claim
or liability;


 


(ii) give
NORI (and any of NORI’s nominees) at the time of Notification the option to at NORI’s expense conduct the defence of the
Claim or liability and make any appeals;


 




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8.3 The
Republic must not pay out any amounts claimed against the Republic under the Claim or liability until:


 


(i) NORI
has been Notified in accordance with clause 8.2 and has advised that it will not defend the Claim or liability; and


 


(ii) in
the event that NORI or any of its nominees has elected to defend the Claim or liability; not pay out any amounts claimed against the
Republic under the Claim or liability until NORI has provided written approval, which it will do acting reasonably and in any case upon
a Final Determination.


 


8.4 The
Republic must act in good faith to avoid prejudicing or adversely affecting any defence of the Claim that NORI may pursue and provide
NORI (at NORI’s expense) with any assistance requested by NORI in conducting the defence of such Claim or liability as may be requested
in writing by NORI from time to time (and in the case that such assistance is provided by the Republic’s legal team, such engagement
will be on commercial terms with fees and disbursements to be agreed prior to engagement.


 


8.5 Notwithstanding
anything contained in this clause 8, NORI will only be liable for direct damages, and shall not be liable for any indirect or consequential
damages, and shall not be liable for, and the indemnity in clause 8.1 will be proportionately reduced to the extent that, any costs,
expenses, losses, charges, demands, actions, damages or Claims or any other liabilities that the Republic suffers, incurs, sustains or
becomes liable for or may suffer, incur, sustain or become liable for, to the extent that they arise from:


 


(a) a
negligent or reckless act of the Republic or at the Republic’s direction or on its behalf;


 


(b) a
situation where the Republic fails to act in good faith or acts in a way that discriminates against NORI; or


 


(c) a
Material Republic Breach.


 


8.6 This
clause 8 survives termination or expiry of this Agreement until the date that the Republic no longer has any responsibilities or potential
liabilities under UNCLOS that may arise as a consequence of the Activities being carried out wrongfully.


 


CLAUSE
9



Applicable Taxes and Payments


 


9.1 Notwithstanding
anything contained in this Agreement, NORI agrees that it will be subject to the following payments and conditions, where applicable:


 


(a) Payments
that are classified as a Penalty;


 


(b) the
Administration Fee;


 




    Page 7


     


    

 


(c) ISA
Application Costs;


 


(d) taxes
imposed on representatives of NORI which are built into the cost of goods and services, such as departure tax, consumption tax and bed
tax;


 


(e) taxes
imposed on NORI employees working in or residing in Nauru as well as taxes imposed on entities and individuals providing services to
NORI in Nauru in accordance with the Employment and Services Tax Act 2014;


 


(f) taxes
imposed on entities and individuals providing services to NORI in Nauru in accordance with the Business Tax Act 2016;


 


(g) Visa
fees for NORI representatives;


 


(h) the
registration aspects under the Administration Tax Act; and


 


(i) ordinary
corporate administration fees such as the costs associated with the annual renewal of the certificate of incorporation.


 


provided
that such payments and conditions are applied on a fair and reasonable basis and are imposed on a non-discriminatory basis to all Nauruan
entities and nationals.


 


9.2 For
the avoidance of doubt, the NORI Group will not be subject to or required to pay any other Taxes for the Term, including without limitation
any Tax related to the Exploration and Exploitation (in so far as the Exploration and Exploitation occur outside the jurisdiction of
Nauru), the NORI Rights, the Business and/or Sponsorship, with the exception of the SMRP and those Taxes detailed in Section 9.1 (a)
to (i) above.


 


CLAUSE
10



Nauruan Laws, Expropriation and Corporate Existence


 


10.1 The
Republic agrees and warrants that:


 


(a) any
Nauruan Laws and regulations brought into effect after the Commencement Date will not interfere with or diminish NORI’s rights
with respect to any Tenements, the Business or the rights arising under this Agreement and must not be a Discriminatory Change in Nauruan
Law, except to the extent the Republic has an obligation at International Law to enact such laws in order to fulfil the Republic’s
Sponsorship Obligations;


 


(b) to
the extent that NORI or the NORI Group’s rights and obligations under this Agreement conflict with their rights and obligations
under any discriminatory Nauruan Law, this Agreement will take precedence, and NORI and the NORI Group will be relieved of any obligations
under Nauruan Law to the extent that their rights and obligations conflict with Nauruan Law;


 


(c) the
Republic will take such actions necessary to give effect to the exemptions from applicable law and tax law expressly provided in this
Agreement. For clarity, NORI will not be subject to any taxation with respect to NORI’s activities that occur outside of the Republic,
including the Exploration and Exploitation.


 






    Page 8


     


    

 


10.2 Prior
to bringing in any laws or regulations that are required by International Law to fulfil the Republic’s Sponsorship Obligations
the Republic will provide NORI with reasonable and meaningful consultation.


 


10.3 The
Republic must also notify NORI from time to time as to any applicable Nauruan Law that may be brought in to effect to fulfil the Republic’s
Sponsorship Obligations and shall provide NORI sufficient time to ensure that it is able to comply with those laws or otherwise seek
dispute resolution between the Parties with regards to the application of such Nauruan Law. In the event any such change comes into force
and materially impacts on the financial obligations of NORI, then the parties agree to negotiate in good faith appropriate amendments
to the payments contemplated to the Republic under this Agreement in order to maintain the same level of financial burden on NORI as
of the date of execution of this Agreement.


 


10.4 The
Republic shall not impose, nor shall it permit or authorise any of its agencies or instrumentalities or any local or other authority
of the Republic to impose any Taxes, impositions, rates or charges of any nature whatsoever on or in respect of the titles, property,
or other assets, products, materials, or services used or produced by or through the Activities or by any or all of the NORI Group otherwise
in the conduct of its business pursuant to the NORI Rights nor will the Republic take or permit to be taken by any such Republic authority
any other discriminatory action which would deprive the NORI Group of full enjoyment of the rights granted and intended to be granted
by the NORI Rights or otherwise under this Agreement.


 


10.5 In
enacting and implementing Nauruan Laws and regulations the Republic shall at all times accord NORI fair and equitable treatment, and
will provide a stable and predictable legal framework and make decisions consistently and transparently and in accordance with the legitimate
expectations of NORI and the NORI Group.


 


10.6 In
the event there occurs any change in Nauruan Laws (including without limitation provisions relating to imposts, duties, fees, charges,
penalties, and Tax related legislation) after the date of this Agreement, and if upon NORI’s representation it appears that on
a reasonable interpretation and application of the law it would have the effect of divesting, decreasing, or in any way limiting, reducing
or withholding any rights or benefits accruing to NORI or the NORI Group under this Agreement or under current legislation, then the
Parties shall, in good faith, negotiate to modify this Agreement so as to restore the economic rights and benefits of the NORI Group
to a level equivalent to or as close as possible to what they would have been if such change had not occurred. If the economic rights
and benefits of the NORI Group are not restored then NORI may at its election terminate this agreement.


 


10.7 The
Republic will permit all bona fide monetary conversions and transfers related to the NORI Rights or the Business (including currency
conversions, transfers to, by or on behalf of NORI, or any member of the NORI Group) to be made freely and without delay into and out
of the Republic of Nauru provided the procedural laws applicable to the transfer of funds out of jurisdiction applicable to all persons
are be complied with.


 




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10.8 The
Republic acting in good faith shall not do or cause to be done or permit any act, thing or omission whether legislative, executive or
administrative which discriminates adversely and unfairly against NORI, any member of the NORI Group, the NORI Rights or the Business
if it results, upon its application, in a deprivation of the full enjoyment of the rights granted or intended to be granted under this
Agreement.


 


10.9 The
Republic warrants and defends NORI’s title to possession and peaceful enjoyment of the NORI Rights and all property of NORI and
any member of the NORI Group against Expropriation, confiscation, condemnation, and wrongful possession and, to the extent possible,
destruction, disruption or interference by the Republic or any other person controlled by or acting on behalf of the Republic.


 


10.10 The
Republic acknowledges that the Exploration, Exploitation and commercialisation of the NORI Rights will require a significant level of
expenditure and commercial risk by the NORI Group. The Republic assures, agrees with and warrants to NORI that the Republic has no intention
as at the date of this Agreement to, and that the Republic will not (and will not attempt, take any action to, or institute any measures
to), directly or indirectly, nationalise or Expropriate NORI, any member of the NORI Group and/or their property (including the NOM Rights,
the Business and any other rights or assets of the NORI Group). The Republic further agrees that it will not, directly or indirectly,
subject the NORI Group to a measure or measures having the same nature or effect equivalent to nationalization or Expropriation (or attempt,
take any action to, or institute any such measure or measures).


 


10.11 In
the event of any inconsistency between the provisions contained within this Agreement, the Parties agree that an interpretation of this
Agreement will be preferred which gives NORI and the NORI Group the benefit of this Agreement without nationalisation or expropriation.


 


10.12 Provided
NORI is in material compliance with this Agreement and the Corporations Act 1972, the Republic will take all necessary actions
for the Term to ensure that the corporate existence of NORI (as well as any other Nauruan incorporated member of the NORI Group) as bodies
corporate duly organized and validly existing and in good standing under the laws of the Republic of Nauru is maintained, including ensuring
that all such authorisations, approvals, consents and licences are issued as may be required to enable NORI (and such other members of
the NORI Group) to maintain its good standing, including ensuring that certificates evidencing annual renewal of registration of incorporation
are issued in a timely manner in accordance with the Corporations Act 1972. Unless NORI (or such other members of the NORI Group
incorporated in the Republic) are in material breach of this Agreement and/or the Corporations Act 1972, the Republic shall ensure
that no action is taken (either by the government or by any government entity or instrumentality) to interfere with the continued corporate
existence and registration of NORI and such other members of the NORI Group incorporated in the Republic.


 


10.13 The
Republic guarantees the conversion and transfer overseas of NORI earnings and savings or earnings of expatriate personnel, their affiliates
and subcontractors, resulting from the Activities.


 






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10.14 With
respect to earnings of NORI servants or agents, and expatriate personnel, whilst the Republic will not place unnecessary restriction
of transfer of funds legitimately earned by NORI servants or agents, and expatriate personnel, such transfers will comply with the procedural
laws applicable to transfer of funds out of jurisdiction applicable to all persons.


 


CLAUSE
11



Assignment of NORI Rights


 


11.1 The
Republic agrees that any or all members of the NORI Group may Assign the NORI Rights or any part thereof at any time, at their sole discretion,
without reason and without prior consultation, upon providing notification to the Republic.


 


11.2 In
the event that a member of the NORI Group notifies the Republic that an Assignment is to be made or is proposed to be made the Republic
shall sign all documents, do all things and take all measures reasonably requested by the NORI Group to facilitate that Assignment, and
will not act in any way to prevent or delay the Assignment.


 


11.3 Upon
the later of:


 


(a) an
Assignment being completed in favour of an assignee; or


 


(b) a
certificate of sponsorship being signed by a new country pursuant to the ISA Regulations under which that country sponsors the assignee
under the Assignment (or the assignees nominee) as the new holder of the NORI Rights,


 


this
Agreement will terminate effective immediately and:


 


(c) NORI
will no longer have any obligations to pay an Administration Fee or SMRP to the Republic except:


 


(i) to
cover the calendar year’s Administration Fee during which the Agreement is terminated; and


 


(ii) to
cover any SMRP owing in respect of any seabed mineral production that has occurred up to the day before completion of an Assignment;


 


(d) No
Party shall be liable to any other Party, whether arising under contract, tort, strict liability or otherwise, for any:


 


(i) loss
of anticipated profits, loss of opportunity, loss of use, loss of production, loss of contracts; or


 


(ii) consequential
or indirect loss or damage, of any nature arising at any time from any cause whatsoever; and


 






    Page 11


     


    

 


(e) The
indemnity provided to the Republic under clause 8.1 shall continue in force until the date that the Republic no longer has any responsibilities
or potential liabilities under UNCLOS that may arise as a consequence of the Activities being carried out wrongfully.


 


11.4 For
avoidance of any doubt, and subject to Clause 9.1, the Republic will not impose any Tax (including without limitation capital gains tax,
stamp duty, sales tax or transfer tax) on any sale or transfer of:


 


(a) the
NORI Rights;


 


(b) any
asset held by the NORI Group;


 


(c) any
NORI Group entity; or


 


(d) any
shares in the NORI Group.


 


11.5 This
Section 11 survives termination or expiry of this Agreement.


 


CLAUSE
12



Notification to NORI


 


12.1 Should
the Republic or the Nauru Seabed Minerals Authority receive material information, correspondence or notices from the ISA or other regulatory
body relating to:


 


(a) NORI;


 


(b) NORI’s
ISA Obligations;


 


(c) the
Republic’s Sponsorship Obligations;


 


(d) any
Subcontractor;


 


(e) the
Activities; or


 


(f) the
Tenements,


 


it
shall promptly inform NORI and provide a copy of such material information, correspondence or notice.


 


CLAUSE
13



Exploitation Application


 


13.1 The
Republic will cooperate with NORI to facilitate the preparation, submission and support of:


 


(i) Applications
to extend the ISA Exploration Contract; and


 


(ii) Applications
to the ISA for Exploitation.


 






    Page 12


     


    

 


13.2 The
costs of presenting the applications to the ISA referred to in clause 13.1 shall be met by NORI, including any costs reasonably incurred
by the Republic in taking actions either requested by NORI or deemed necessary by the Republic under the rules of the ISA, to support
the application before the ISA (“ISA Application Costs”).


 


CLAUSE
14



Environmental and Safety Performance Monitoring Program


 


14.1 Subject
to clause 14.4, NORI acknowledges that the Republic has the right to carry out an environmental and safety performance monitoring program
(“Environmental and Safety Performance Monitoring Program” or “ESPMP”) to, inter alia:


 


(a) Assist
the Republic satisfy its Sponsorship Obligations;


 


(b) Verify
whether the Activities, Subcontractors, Vessels and Installations are in compliance with NORI’s ISA Obligations;


 


(c) Verify
whether any Activities or Subcontractors are causing or have caused Pollution Incidents or Serious Harm to the Marine Environment; and/or


 


(d) Verify
whether the Activities, Subcontractors, Vessels and/or Installations are in compliance with NORI’s ISA Obligations pertaining to
Safety at Sea.


 


14.2 NORI
acknowledges that it must permit, and must ensure that all relevant Subcontractors permit, the Republic, the Republic’s nominees,
any suitably qualified person authorized by the Republic, or any independent qualified environmental or safety officers engaged by the
Republic or acting on the Republic’s behalf (collectively referred to as “ESPMP Officers”), to conduct an ESPMP
in accordance with this clause 14.


 


14.3 NORI
acknowledges that it must give, and must ensure that all relevant Subcontractors give, the ESPMP Officers access to any Vessel or Installation
being used in the Activities that is relevant to the ESPMP, except where such access is impracticable or would cause unreasonable interference
with the Activities, and provide the ESPMP Officers with:


   


(a) reasonable
assistance requested by the ESPMP Officers to allow them to access, inspect, assess, audit and/or monitor the relevant Activities, including:


 


(i) safe
boarding of Vessels and Installations;


 


(ii) cooperation
and assistance with the ESPMP on Vessels and Installations;


 


(iii) reasonable
access to relevant log books, records, documents, equipment, facilities and personnel on Vessels and Installations at reasonable times;


 






    Page 13


     


    

 


(iv) provision
of reasonable accommodation and facilities, including, where appropriate, food and means of adequate subsistence while on any Vessel
or Installation; and


 


(v) safe
disembarkation from Vessels and Installations; and


 


(b) Copies
of any documents requested by the ESPMP Officers that are in the possession of NORI and/or a relevant Subcontractor and are strictly
necessary to carry out the ESPMP (subject to confidentiality constraints).


 


14.4 The
Republic shall, and shall ensure that all ESPMP Officers engaged in the ESPMP shall, keep confidential all information provided to them
by or on behalf of NORI or any Subcontractors or otherwise obtained by the Republic or ESPMP Officers in connection with any ESPMP and
which relates to NORI, the Activities or any Subcontractor. NORI reserves the right to require any ESPMP Officer before receiving such
information to first sign a confidentiality agreement in person that strictly limits the approved purpose of disclosure to that of carrying
out the ESPMP and reporting to the Republic.


 


CLAUSE
15



ESPMP Officers


 


15.1 Notwithstanding
anything contained in this Agreement:


 


(a) ESPMP
Officers must follow all instructions and directions pertaining to Safety at Sea given to them from NORI, a relevant Subcontractor, the
captain and/or other relevant safety officers on board Vessels and Installations whether given in writing, verbally or via signage, and
NORI is not liable (including under any indemnity in this Agreement) for injury, loss or damage caused by a failure of any ESPMP Officers
to follow any instructions and directions or any negligence on the part of such ESPMP Officers; and


 


(b) NORI
has the right to:


 


(i) request
and receive from any ESPMP Officer, prior to their involvement in any aspect of the Activities, all reasonable information necessary
to assess the officer’s suitability and qualifications for participation in the Activities, including without limitation relevant
criminal records, medical information and certification of health including a test for contagious diseases and drugs (with NORI reserving
the right to refuse participation in any aspect of the Activities should NORI deem an ESPMP Officer or candidate unsuitable or unsafe);


 


(ii) at
NORI’s sole discretion, deny any ESPMP Officer access to or remove any ESPMP Officer from any aspect of the Activities in the event
that the Officer poses an unreasonable risk to Safety at Sea, the Activities or does not possess the necessary safety qualifications
or training including survival training; and


 






    Page 14


     


    

 


(iii) order
any ESPMP Officers to undergo, if necessary, offshore safety training before or while on board Vessels or Installations,


 


CLAUSE
16



Completion Criteria


 


NORI
will comply with NORI’s ISA Obligations pertaining to completion of the Exploitation, including safe removal of Installations from
the Tenement Area.


 


CLAUSE
17



Confidentiality


 


17.1 Subject
to clause 17.2, the Republic must not disclose to a third party Confidential Information.


 


17.2 The
Republic may disclose information:


 


(a) in
enforcing this Agreement or in a proceeding arising out of or in connection with this Agreement;


 


(b) if
required under a binding order of the ISA;


 


(c) if
it is required or permitted to be disclosed by this Agreement;


 


(d) to
its legal advisers, consultants, directors, officers and employees provided that such parties undertake to keep the information confidential
and provided the disclosure is reasonably necessary in connection with the Republic exercising its rights or performing its obligations
under this Agreement or performing the Republic’s Sponsorship Obligations; or


 


(e) if
NORI has given prior written consent.


 


17.3 If
the Republic becomes aware of a suspected or actual breach of this Section 17, the Republic will immediately Notify NORI and take all
practicable steps to prevent or stop the suspected or actual breach.





 


17.4 This
Section 17 survives termination or expiry of this Agreement.





CLAUSE
18



Administration Fee


 


18.1 NORI
will pay US$[***] per calendar year to the Republic to cover the costs associated with the Republic’s administration of its Sponsorship
in that calendar year (“Administration Fee”). The fee will be paid annually on the anniversary of the signing of the
Certificate of Sponsorship, or such other date mutually agreed from time to time between NORI and the Nauru Seabed Minerals Authority.


 






    Page 15


     


    

 


18.2 The
Republic may review the amount of the Administration Fee, and may reasonably increase the amount where this is required to cover the
actual costs to the Republic of administering and supervising the sponsorship, provided that the Republic obtains NORI’s written
consent where the increase in any year is greater than US$[***].


 


18.3 The
Administration Fee will be reviewed once NORI receives an ISA Exploitation Contract to include any additional costs to the Republic of
administering and supervising the sponsorship, including the costs of ESPMP Officers.


 


CLAUSE
19



NORI Default and Republic Default


 


19.1 A
NORI default occurs if:


 


(a) there
is a material breach of an obligation under this Agreement by NORI; or


 


(b) NORI
is in material breach of NORI’s ISA Obligations (“NORI Default”); or


 


(c) NORI
Fails to Act in Good Faith.


 


19.2 If
a NORI Default occurs the Republic may give NORI a Notice in writing (“NORI Default Notice”) stating that a NORI Default
has occurred and requiring NORI to Remedy the NORI Default within a reasonable time from the date of such Notice.


 


19.3 Upon
receipt of a NORI Default Notice NORI shall promptly commence, and continue to pursue with diligence, the Remedy of the NORI Default
within 60 days, and must, whenever requested by the Republic, advise progress of the Remedy.


 


19.4 A
Republic default (“Republic Default”) occurs if:


 


(a) the
Republic breaches this Agreement, its obligations under UNCLOS, Regulations or the Act; or


  


(b) the
Republic fails to act in good faith or discriminates against NORI (including through a Discriminatory Change in Nauruan Law); or


 


(c) the
Republic ceases to Sponsor NORI and the Activities, fails to confirm Sponsorship of NORI and the Activities, takes any action towards
ceasing its Sponsorship or purports to cease its Sponsorship of NORI and the Activities; or


 


(d) the
Republic directly or indirectly Expropriates the ownership, rights or assets of the NORI Group, or takes any action to directly or indirectly
Expropriate the ownership, rights or assets of the NORI Group.


 






    Page 16


     


    

 


19.5 If
a Republic Default occurs NORI may give the Republic a Notice in writing (“Republic Default Notice”) stating that
a Republic Default has occurred and requiring the Republic to


 


Remedy
the Default expeditiously not exceeding 60 days from the date of such Notice.


 


CLAUSE
20



Temporary Suspension of Activities


 


20.1 In
the event that:


 


(a) an
Emergency exists; or


 


(b) NORI
or a Subcontractor, in spite of written warnings by the ISA or the Republic, has conducted its activities in such a way as to result
in serious persistent and willful violations of the fundamental terms of this Agreement, an ISA Contract or NORI’s ISA Obligations
and:


 


(i) the
Republic has served a written Notice of its intention to order suspension under this clause (“Republic Suspension Notice”)
on NORI; and


 


(ii) the
Republic Suspension Notice specifies in detail the reasons why the Republic Suspension Notice is given and that the Republic requires
NORI to Remedy the breach within 60 days of receipt of the Notice, the Republic may by written Notice to NORI:


 


(c) in
the case of 20.1(a) above, demand the suspension of the portion of the Activities necessary to end or mitigate the Emergency for such
period as is reasonably necessary;


 


(d) in
the case of 20.1(b) above, demand the suspension of the Activities (for such period as is reasonably necessary) on the day falling 60
days after the date NORI receives the Republic Suspension Notice, unless:


 


(i) in
the case that the breach can be Remedied and NORI has Remedied the breach in that period;


 


(ii) in
the case that the breach cannot be Remedied (or cannot be Remedied within the time specified in clause 20.1(d)), NORI has adequately
compensated the Republic for the demonstrable damages incurred by the Republic as a result of the breach; or


 


(iii) the
Republic withdraws in writing the Republic Suspension Notice. 20.2 If suspension is ordered in accordance with clause 20.1:


 


(e) NORI
will take reasonable and appropriate measures to ensure that the relevant Subcontractors comply with the suspension orders and carry
out those orders in a way that does not cause or exacerbate a Safety Incident or Serious Harm to the Marine Environment;


 






    Page 17


     


    

 


(f) the
suspended Activities may be resumed when NORI is provided with written direction from the Republic to resume the Activities (always provided
that the resumption is allowed under International Law), which the Republic must give immediately if:


 


(i) in
the case of an Emergency, the Emergency has ceased;


 


(ii) in
the case that the breach can be Remedied; NORI has Remedied the breach;


 


(iii) in
the case that the breach cannot be Remedied (or cannot be Remedied within the time specified in clause 20.1(d)), NOR! has adequately
compensated the Republic for the demonstrable damages incurred by the Republic as a result of the breach; and


 


(g) NORI
will not be relieved of its other responsibilities and obligations under this Agreement, except to the extent that such responsibilities
and obligations cannot be performed as a result of the suspension.


 


20.2 NORI
shall provide any necessary assistance to the Republic in the exercise of its rights under this Section 20.


 


20.3 In
the event that NORI disputes the reasons why the Suspension Notice has been issued by the Republic or there is a dispute as to the demonstrable
damages incurred by the Republic as a result of the breach, or whether or not the grounds for suspension have been Remedied by NORI,
the matter will be referred as a dispute under Section 23 and the suspension under this clause 20 will either not take effect or cease
to continue until such time as the dispute resolution has been completed in accordance with that Section 23.


 


20.4 In
the spirit of good faith and co-operation the parties will endeavour to have any dispute referred to under clause 20.4 to be finalised
in no later than 60 days.


 


CLAUSE
21



Material NORI Breach Termination


 


21.1 In
the event of a Material NORI Breach, and:


 


(a) the
Republic has served a written Notice of its intention to terminate this Agreement under this Section 21 (“Republic Termination
Notice”) on NORI; and


 


(b) the
Republic Termination Notice specifies in detail the Material NORI Breach in respect of which the Republic Termination Notice is
given and that the Republic requires NORI to remedy the breach within 60 days of receipt of the Notice, this Agreement will
terminate, without penalty to the Republic, on the day falling 60 days after the date NORI receives the Republic Termination Notice,
unless:


 






    Page 18


     


    

 


(c) in
the case that the Material NORI Breach can be Remedied; NORI rectifies or overcomes the effect of the Material NORI Breach in that period,
or can demonstrate that it has commenced and is diligently proceeding to remedy the breach;


 


(d) in
the case that the Material NOM Breach cannot be Remedied (or cannot be Remedied within the time specified in clause 21.1(b)), NOM has
adequately compensated the Republic for the demonstrable material damages incurred or to be incurred by the Republic as a result of the
Material NORI Breach; or


 


(e) the
Republic withdraws in writing the Republic Termination Notice.


 


21.2 For
avoidance of doubt this Agreement will not terminate if:


 


(a) there
are no demonstrable material damages to the Republic as a result of the Material NORI Breach; or


 


(b) if
NORI compensates the Republic for the demonstrable material damages incurred by the Republic as a result of the Material NORI Breach.


 


21.3 Termination
of this Agreement under Section 21 shall not in any way prejudice or affect the Republic’s rights to Claim and recover damages
under the indemnity provided in clause 8.1.


 


21.4 In
the event that NORI disputes the reasons why the Republic Termination Notice has been issued by the Republic or there is a dispute as
to the demonstrable damages incurred by the Republic as a result of the breach, or as to whether or not the grounds for termination have
been Remedied by NORI, the matter will be referred as a dispute under Section 23. The termination under this Section 21 will not take
effect until the later of the time period specified under this clause 21.1 or such time as the dispute resolution has been completed
in accordance with Section 23.


  


21.5 The
Republic acknowledges and agrees that termination of this Agreement by the Republic under Section 21 shall not cause the grant of or
otherwise create any entitlement, rights or title to the Republic in the NORI Rights which will at all times remain the property of the
NORI Group notwithstanding the termination of this Agreement, and the NORI Group will remain entitled to effect an Assignment of the
NORI Rights or to otherwise take steps to preserve the operation of and NORI’s entitlement to the NORI Rights without further notification
to the Republic.


 


21.6 Notwithstanding
anything contained in this Agreement, if the Republic terminates this Agreement it must not revoke the Certificate of Sponsorship until
at least six months from the date of the Republic Termination Notice, and must, if requested by NORI, continue to do all things necessary
to:


 


(a) maintain
sponsorship during this period; and


 


(b) assist
NORI Assign the NOM Rights.


 






    Page 19


     


    

 


21.7 This
Section 21 survives termination or expiry of this Agreement.


 


CLAUSE
22



Material Republic Breach


 


22.1 In
the event of a Material Republic Breach, and:


 


(a) NORI
has served a written Notice of its intention to terminate this Agreement under this clause 22.1 (“NORI Termination Notice”)
on the Republic; and


 


(b) the
NOM Termination Notice specifies the Material Republic Breach in respect of which the NORI Termination Notice is given, and that NORI
requires the Republic to remedy the breach within 60 days of receipt of the Notice,


 


22.2 A
Material Republic Breach event will occur on the day falling 60 days after the date the Republic received the NORI Termination Notice
(“Material Republic Breach Event”), unless:


 


(a) in
the case that the Material Republic Breach can be remedied; the Republic Remedies the Material Republic Breach in that period;


 


(b) in
the case that the Material Republic Breach cannot be remedied (or cannot be Remedied within the time specified in clause 22.1(b)), the
Republic adequately compensates NORI for the demonstrable damages incurred and/or to be incurred by it, its affiliates or its Subcontractors
as a result of the Material Republic Breach; or


 


(c) NORI
withdraws in writing the NORI Termination Notice.


  


22.3 Without
prejudice to any other rights NORI may have, under this Agreement or at Law, if a Material Republic Breach Event occurs NORI may, at
its discretion, terminate the Agreement.


 


22.4 Notwithstanding
anything contained in this Agreement, in the case that the Material Republic Breach relates to an event contemplated in clause 19.4(c)
or (d) a Material Republic Breach Event will be immediately triggered upon the occurrence of the event without the requirement for a
written Notice to be given by NORI.


 


22.5 Without
prejudice to any other rights available at law to NORI, the Republic acknowledges the NORI Rights will at all times remain the property
of the NORI Group notwithstanding the termination of this Agreement under this clause 22 and the NORI Group will remain entitled to effect
an Assignment of the NORI Rights or to otherwise take steps to preserve the operation of and its entitlement to the NORI Rights without
further notification to the Republic.


 


22.6 This
Section 22 survives termination or expiry of this Agreement.


 






    Page 20


     


    

 


CLAUSE
23



Dispute Resolution


 


23.1 If
a dispute between the Republic and NORI arises out of or in connection with the Agreement, either the Republic or NORI may give to the
other disputing Party a Notice of dispute in writing adequately identifying the matters and the subject of the dispute together with
detailed particulars of the dispute. Notwithstanding anything in this Section 23 the Parties may, by mutual agreement in writing, conduct
dispute resolution in any other way or vary the following dispute resolution procedures as they see fit.


 


23.2 Within
20 days after service of a Notice of dispute, the Parties must meet at least once, to attempt to resolve the dispute.


 


23.3 If,
within 20 days after service of a Notice of dispute, the dispute is not resolved, the chief executive officer of NORI and a relevant
Republic Minister must meet within 20 days of expiry of that 20 day period and use their best endeavours, acting in good faith, to resolve
the dispute (in whole or in part). If the dispute is resolved at the meeting referred to in this clause then any such resolution will
be reduced to writing and will be contractually binding on the Parties.


 


23.4 Any
dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or validity thereof, that has not
been resolved in accordance with Section 23.3 shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at
present in force. The appointing authority shall be the International Chamber of Commerce acting in accordance with the rules of the
ICC for this purpose. The number of arbitrators shall be one. The place of arbitration shall be Brisbane, Australia. The language to
be used in the arbitral proceeding shall be English.


  


23.5 Notwithstanding
anything in this Section 23:





 


(a) nothing
will prejudice the right of a Party to seek urgent injunctive, interrogatory or declaratory relief from a court of competent jurisdiction;
and


 


(b) each
Party must continue to perform its obligations under the Agreement.


 


CLAUSE
24



Authorisation to Enter Agreement


 


The
Republic warrants that it has done everything under the Act necessary to authorize it to enter in to this Agreement, and the Agreement
is enforceable in accordance with its terms


 


CLAUSE
25



Governing Jurisdiction


 


25.1 The
Governing law and the jurisdiction shall be the Republic, provided however that with respect to any arbitration, the governing procedural
laws of the situs of the arbitration shall govern the arbitration. For the avoidance of doubt, all matters arising hereunder shall be
resolved pursuant to the Dispute Resolution procedures set forth in Section 23.


 






    Page 21


     


    

 


25.2 The
Nauru Supreme Court will be responsible for enforcing a decision of the arbitration tribunal under clause 23.


 


25.3 Any
appeals from the Supreme Court judgement, decision or ruling lies to the High Court of Australia in accordance with Appeals (Amendment)
Act 1974 and where leave to appeal may be required, the parties agree not to object to any such leave being granted.


 


25.4 It
is the intention of the Parties that the High Court of Australia must have the jurisdiction to hear the appeal on its merits.


 


25.5 This
clause must be reviewed if the Australian High Court no longer remains as the Highest Appellate Court of the Republic in which case parties
have liberty to mutually agree to change the jurisdiction to the courts in Australia with the applicable law being the laws of Nauru.


 


CLAUSE
26



International Law


 


26.1 To
the extent that NORI’s obligations under this Agreement conflict with NORI’s ISA Obligations, the latter shall take precedence,
and the Parties agree that NORI shall be relieved of its obligations under this Agreement to the extent and for the period that those
obligations conflict with NORI’s ISA Obligations or other obligations at International Law.


 


26.2 Any
relief provided to NORI under this Section 26 does not invalidate the remaining provisions of this Agreement nor affect the validity
of that provision at a future date if it ceases to cause NORI to be in breach of NORI’s ISA Obligations.


 


CLAUSE
27



Notices


 


Any
notice, demand, consent or other communication (“Notice”) given or made under this Agreement:


 


(a) must
be in writing and signed by the Party or a person duly authorised by the Party;


 


(b) must
be addressed and delivered to the intended recipient at the address below or the address last Notified by the intended recipient to the
sender after the date of this Agreement:


 


(i) to
the Republic:


 


Nauru
Seabed Minerals Authority


Government
Offices


Yaren
District


Republic
of Nauru


 






    Page 22


     


    

 


(ii) to
Nauru Ocean Resources Inc., Nauru Education and Training Foundation Inc. or Nauru Health and Environment Foundation Incorporated:


 


1st
Level, Civic Centre, Aiwo District


P.O.
Box 30, Aiwo District


Republic
of Nauru


 


With
an electronic copy to: office@nauruoceanresources.com to be delivered at the same time


 


(c) will
be taken to be duly given or made when left at the above address (or the address last Notified by the intended recipient to the sender)
and signed for by the recipient. If delivery or receipt occurs on a day that is not a business day in the place to which the Notice is
sent or is later than 4pm (local time) at that place, it will be taken to have been duly given or made at the commencement of business
on the next business day in that place.


 


CLAUSE
28



Entire Agreement


 


This
Agreement constitutes the entire Agreement between the Parties hereto in respect of the matters referred to herein and there are no representations,
warranties, covenants or agreements, express or implied, collateral hereto other than as expressly set forth or referred to herein. Any
prior arrangements, agreements, representations or undertakings are superseded by the terms contained in this Agreement.


 


CLAUSE
29



Force Majeure


 


29.1 Subject
to clause 29.4, either Party shall be excused from performance and shall not be in default in respect of any obligation hereunder to
the extent that the failure to perform such obligation is due to an Event of Force Majeure.


 


29.2 For
the purpose of this Agreement, an “Event of Force Majeure” means any of the circumstance detailed in clause 29.3 that are
not within the reasonable control of the Party or parties affected, but only if and to the extent that:


 


(a) such
circumstance, despite the exercise of reasonable diligence, cannot be, or be caused to be, prevented, avoided or removed by such Party;


 


(b) such
circumstance materially and adversely affects the ability of the Party to perform its obligations under this Agreement, and such Party
has taken all reasonable precautions, due care and reasonable alternative measures in order to avoid the effect of such event on the
Party’s ability to perform its obligations under this Agreement and to mitigate the consequences thereof; and


 






    Page 23


     


    

 


(c) The
affected Party notifies the other Party of the Event of Force Majeure as soon as reasonably possible.


 


29.3 The
circumstances giving rise to an Event of Force Majeure include:


 


(a) an
act of God such as, but not limited to, fires, explosions, earthquakes, drought, tidal waves and floods;


 


(b) war,
hostilities (whether war be declared or not), invasion, act of foreign enemies, mobilisation, requisition, or embargo;


 


(c) rebellion,
revolution, insurrection, or military or usurped power, or civil war;


 


(d) contamination
by radio-activity from any nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel, radio-active toxic explosive,
or other hazardous properties of any explosive nuclear assembly or nuclear component of such assembly;


 


(e) riot,
commotion, strikes, go slows, lock outs or disorder, unless solely restricted to employees of the Parties;


 


(f) a
change (beyond the control of the parties) to an international law that governs the parties and relates to seabed exploration or exploitation;
or


 


(g) acts
or threats of terrorism.


 


29.4 Notwithstanding
anything contained in this Section 29, the parties will not be relieved of their rights and obligations contained in Section 11 of this
Agreement.


 


CLAUSE
30



Amendment


 


This
Agreement may only be amended by mutual agreement in writing by the Parties.


 


CLAUSE
31



Severability of Provisions


 


Any
provision of this Agreement that is prohibited or unenforceable in any jurisdiction is ineffective as to that jurisdiction to the extent
of the prohibition or unenforceability. That does not invalidate the remaining provisions of this Agreement nor affect the validity or
enforceability of that provision in any other jurisdiction.


 






    Page 24


     


    

 


CLAUSE
32



Further Assurances


 


The
Parties must do anything necessary or desirable (including executing agreements and documents and performing such acts that lie within
their power) to give full effect to this Agreement and the transactions contemplated by it.


 


CLAUSE
33



No Limitation


 


Without
limiting the generality of any other provision of this Agreement, any waiver or delay in the exercise by a Party of any rights under
this Agreement will not relieve the other Party of any of their obligations under this Agreement.


 


CLAUSE
34



Representations and Warranties


 


(a) The
representations and warranties provided in this Agreement are continuing representations and warranties and will be repeated on each
day while any obligation under this Agreement remains outstanding, with reference to the facts and circumstances then subsisting.


 


(b) Each
Party warrants to each other Party that at the date of this Agreement it has full power and lawful authority to execute and deliver this
Agreement and to perform its obligations under this Agreement. Except as expressly provided in this Agreement, no representation, inducement
or warranty was, prior to the execution of this Agreement, given or made by one of the Parties hereto with the intent of inducing the
other Party to enter into this Agreement, and any representations, inducements or warranties that may have been so given are hereby denied
and negated.


 


(c) The
Republic further represents and warrants that the execution, delivery and performance of this Agreement has received all necessary governmental
approvals and authorizations and constitutes the legal, valid and binding obligation of the Republic and is enforceable in accordance
with its terms, and the Republic cannot claim sovereign immunity.


 


(d) Each
Party represents and warrants that they are in compliance with applicable anti-bribery and anti-corruption legislation.


 






    Page 25


     


    

 


CLAUSE
35



Non Reliance


 


The
Parties warrant that they:


 


(a) did
not in any way rely upon any information, representation, arrangement, understanding, statement or documentation, made by or provided
to the Party from any other Party or anyone on behalf of the other Party for the purposes of entering into this Agreement except to the
extent that any such information, data, representation, arrangement, understanding, statements or document is expressly set out or referred
to in this Agreement; and


 


(b) enter
into this Agreement based on their own investigations, interpretations, deductions, information and determinations, and acknowledge that
they are aware that the other Parties have entered into this Agreement relying upon the warranties contained in this Section 35.


 


CLAUSE
36



Counterparts


 


This
Agreement may be executed in any number of counterparts and by different parties in separate counterparts. Each counterpart when so executed
is deemed an original but all of which together constitute one and the same instrument.


 


CLAUSE
37



Interpretation


 


The
following rules of interpretation apply unless the context requires otherwise.


 


(a) If
a word or phrase is defined, its other grammatical forms have a corresponding meaning.


 


(b) A
reference to dollars and $ is to Australian currency unless otherwise stated.


 


(c) All
references to time and to dates are to Nauruan times and dates.


 


(d) No
rule of construction is to apply to the disadvantage of a Party on the basis that that Party drafted the whole or any part of this deed.


 


(e) Headings
do not affect the interpretation of this Agreement.


 


CLAUSE
38



Definitions


 


The
following definitions apply unless the context requires otherwise.


 


Act
means the International Seabed Minerals Act 2015 of the Republic of Nauru.


 


Activities
means any and all activities that are carried out in, on or over the International Seabed Area by NORI and/or a Subcontractor
for which the Republic has a responsibility under its Sponsorship Obligations and for which the Republic could be held liable in accordance
with UNCLOS due to its Sponsorship of NORI.


 






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Nauru
Seabed Minerals Authority means the body established under the Act to administer Nauru’s sponsorship of Seabed Mineral
Activities.


 


Agreement
means this agreement.


 


Assign
or Assignment means the assignment or transfer of the NORI Rights to an entity incorporated or existing outside
of the Republic of Nauru, including without limitation in conjunction with a change of sponsorship to a new country.


 


Business
means each and any business being conducted by the NORI Group arising as a result of or connected with the Exploration, the Exploitation,
the Activities and/or the Tenements.


 


Certificate
of Sponsorship means the certificate of sponsorship signed on the 11th day of April, 2011 by the Nauruan Minister
for Commerce, Industry and Environment under which the Republic certified that it sponsored NORI’s application to the ISA to explore
for Polymetallic Nodules in the International Seabed Area and assumed responsibility in accordance with article 139, article 153, paragraph
4, and Annex III, article 4, paragraph 4, of UNCLOS.


 


Claim
includes any action, claim, demand or proceeding arising under UNCLOS. Commencement Date means the date this Agreement is executed
by the Parties.


 


Confidential
Information means all information that is not in the public domain that is disclosed to the Republic by the NORI Group including
but not limited to, information relating to the Activities, technology, processes and know-how, the location and prospective locations
of Polymetallic Nodules, confidential information that is restricted or proprietary under any contract or agreement with a third party,
business details, customers or suppliers, all technical and research data relating to the Activities, financial information and business
relationships including the names of any Subcontractors, and shall include the terms of this Agreement. Corporate Tax means any corporate
income tax levied by the Republic on corporations incorporated in Nauru or that engage in business in Nauru.


 


Corporations
Act means the Corporations Act 1972 of the Republic of Nauru as in force from time to time, or any law concerning corporations
that may succeed the 1972 Act. Discriminatory Change in Nauruan Law means a change in Nauruan Law that is categorically enacted for the
sole purposes to:- -:


 


		(a)	materially
                                            changes the commercial intent of this Agreement or the Sponsorship arrangement between NORI
                                            and the Republic; or



 


		(b)	materially
                                            increases the total quantum of benefits required to be given by the NORI Group (whether economic
                                            or intangible) to the Republic in such a way as to materially change the intent contemplated
                                            under this Agreement;



 


but
does not include a change in Nauruan Law that is required by international law for the Republic to fulfil its Sponsorship Obligations.


 






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Emergency
means a circumstance where the Activities have caused or pose an immediate and probable threat of causing Serious Harm to the
Marine Environment, a Pollution Incident or a Safety Incident, as well as any other event or circumstance connected to or arising from
the Activities that is classified by the ISA as an emergency.


 


Entity
includes a body corporate, a partnership, joint venture or a trust.


 


ESPMP,
see clause 14.1.


 


ESPMP
Officer, see clause 14.2.


 


Exploitation
means the exploitation of Polymetallic Nodules in the Tenement Area for commercial purposes, and includes without limitation:


 


		(a)	the
                                            extraction, lifting, dewatering, treatment, processing and transportation in the Tenement
                                            Area of Polymetallic Nodules and all other work, operations and activities required thereof;



 


		(b)	transporting,
                                            constructing, installing, testing, commissioning, using, operating, maintaining and repairing
                                            equipment and Installations;



 


		(c)	loading
                                            and unloading of Polymetallic Nodules to and from any treatment, processing facility and/or
                                            any transport vessel in the Tenement Area; and



 


		(d)	any
                                            other activity in the International Seabed Area deemed necessary by NORI or a Subcontractor
                                            to carry out the exploitation that would not breach any of NORI’s ISA Obligations.



 


Exploitation
Contract means any contract or licence permitting NORI to Exploit Polymetallic Nodules in the International Seabed Area entered
into between NORI and the ISA or granted by the ISA to NORI.


 


Exploration
means the exploration for Polymetallic Nodules in the Tenement Area and includes without limitation:


 


		(a)	sonar,
                                            oceanographic, geophysical and geological surveying, sampling and dredging;



 


		(b)	testing
                                            of collecting systems and equipment and recovery of bulk samples; and



 


		(c)	environmental
                                            and technical studies,



 


in
the International Seabed Area, as well as any other activity or operation in the International Seabed Area deemed necessary by NORI or
a Subcontractor to carry out the exploration that would not breach NORI’s ISA Obligations, and includes prospecting carried out
by NORI pursuant to the ISA’s rules and regulations.


 






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Exploration
Contract means any contract or licence permitting NORI to Explore for Polymetallic Nodules in the International Seabed Area entered
into between NORI and the ISA or granted by the ISA to NORI, and includes the ISA Exploration Contract.


 


Expropriate
or Expropriation means to dispossess of ownership, to deprive of property, to deprive of use of property, to deprive
of property for the public use, to make an Entity or assets (tangible and intangible) the property of the Republic (in whole or in part),
or a measure or measures having an equivalent effect (directly or indirectly), and includes without limitation:


 


		(a)	the
                                            transfer of title, physical seizure or an executive or legislative act for the purpose of
                                            transferring property or interests into the public domain;



 


		(b)	subjecting
                                            an Entity, property or assets (tangible or intangible) to taxation, regulation, or other
                                            action that is confiscatory or that prevents, unreasonably interferes with, or unduly delays,
                                            effective enjoyment of such property or assets;



 


		(c)	regulations
                                            by the Republic which constitutes dispossession or depravation of an asset, property or right
                                            or that reduces or eliminates the economic value or viability of an asset, property or right
                                            subject to those regulations, including application of otherwise lawful measures in such
                                            a way as to deprive ultimately the enjoyment of value of property;



 


		(d)	any
                                            measure or measures that inhibit the ability to transfer bona fide assets, rights and/or
                                            property out of the Republic of Nauru;



 


		(e)	a
                                            measure or series of measures the effect of which would be direct or indirect dispossession,
                                            including but not limited to the levying of taxation, the compulsory sale of all or part
                                            of an investment or asset, or the impairment or deprivation of its management,



 


as
well as any other measure or series of measures which together are tantamount to expropriation or that results in dispossession or depravation
of an asset or right, irrespective of whether compensation is provided. However, Expropriation does not include an act by the Republic
that is reasonably required to fulfil the Republic’s Sponsorship Obligations.


 


Final
Determination means a decision of a court or of any agency having jurisdiction to resolve the dispute:


 


		(a)	from
                                            which no appeal can be taken and in respect of which no application for special leave to
                                            appeal can be made; or



 


		(b)	in
                                            respect of which the relevant appeal or special leave application period has expired without
                                            an appeal being taken or an application for special leave to appeal being made, but does
                                            not include an interlocutory order.



 


Fails
to Act in Good Faith means acting with willful or reckless disregard for the consequences of its actions


 






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Installation
means any structure, installation or artificial island in the International Seabed Area used in or intended to be used in the
Activities and for which the Republic is responsible and potentially liable in accordance with its Sponsorship Obligations.


 


International
Law means any legally binding international treaties and conventions and other legally binding international rules including
UNCLOS and the ISA regulations as in force from time to time.


 


International
Seabed Area means the seabed and ocean floor and subsoil thereof, beyond the limits of national jurisdiction.


 


ISA
means the International Seabed Authority and any successor institution to the ISA. ISA Contract means any contract or licence
granted to NORI by the ISA, and includes any Exploration Contract and any Exploitation Contract, and all terms and conditions contained
therein.


 


ISA
Exploration Contract means the contract for exploration for Polymetallic Nodules signed between the ISA and NORI on the 22nd
day of July, 2011 at Kingston, Jamaica and any amendment or replacement thereto.


 


ISA
Regulations means the legally binding regulations adopted by the ISA applicable to the Activities.


 


Licence
and Licences means any licences, permits or contracts required under Nauruan law to carry out exploration and/or
exploitation in the International Seabed Area.


 


Material
NORI Breach means the occurrence of any of the following:


 


		(a)	an
                                            ISA Contract is suspended or terminated by the ISA as a direct result of NORI or any Subcontractor
                                            failing to comply with the conditions of the ISA Contract;



 


		(b)	a
                                            serious breach of NORI’ s ISA Obligations or obligations under this Agreement, that
                                            has caused or will cause material and direct monetary damage to the Republic and has not
                                            been Remedied within a reasonable time;



 


		(c)	NORI
                                            or any Subcontractor, in spite of written warnings by the ISA, has conducted its activities
                                            in such a way as to result in serious persistent and willful violations of the fundamental
                                            terms of this Agreement, ISA Contract or NORI’s ISA Obligations; or NORI has failed
                                            to pay the SMRP in accordance with Section 3.



 


Material
Republic Breach means a Republic Default that has not been Remedied within 60 days in accordance with Section 19.


 






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Minimum
Recovery Level shall be deemed to have occurred when Exploitation of Polymetallic Nodules yields a quantity of greater than [***]
tonnes of Polymetallic Nodules from the Tenement Area in any one calendar year.


 


Nauruan
Law means all applicable laws in Nauru, including without limitation, legislation and regulations.


 


NORI
includes NORI and its authorized servants or agents as well as any other entities affiliated with NORI.


 


NORI
Group includes NORI as well as any other entities affiliated with NORI.


 


NORI
Rights means the rights held by NORI under the ISA Regulations and under any ISA Contracts, or held in relation to the International
Seabed Area or the Tenement Area, and without limitation includes the Tenements and all rights held therein.


 


NORI’s
ISA Obligations means the legally binding obligations NORI has under the ISA Contract, ISA Regulations and/or UNCLOS, as in force
from time to time, and includes without limitation all legally binding obligations and responsibilities that NORI has under any ISA Contract,
ISA Regulation and/or UNCLOS the breach of which would result in monetary liability to the Republic under UNCLOS due to the Republic’s
Sponsorship of NORI.


 


Notice,
see Section 27.


 




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Payment
Year means any calendar year in which NORI reaches the Minimum Recovery Level. Parties means the parties to this Agreement.


 


Penalty
means a penalty imposed by the Republic on NORI which either:


 


(1)(a)arises
as a direct result of a breach of NORI’s ISA Obligations;


 


(b) is
required to be imposed by International Law in order for the Republic to fulfil its Sponsorship Obligations; and


 


(c) is
for an amount not exceeding the reasonable amount required for the Republic to satisfy its Sponsorship Obligations.


 


or


 


(2) arises
as a direct result of NORI breaching criminal or civil law in the Republic.


 


Pollution
Incident means any event involving pollution that seriously breaches NORI’s ISA Obligations.


 


Polymetallic
Nodules has the meaning given to that term by the ISA.


 


Production
Audit, see Section 4.


 






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Recovered
means extracted and recovered from the seafloor in the Tenement Area to the sea surface (for example, to a sea surface platform
or Vessel) and then placed on to a transport ship. Remedy or Remedied means to remedy or redress or to have remedied or redressed (as
applicable) the relevant occurrence or overcome its consequences and effects so that there ceases to be any continuing material detrimental
effect of that occurrence.


 


Safety
at Sea means safety of life and property at sea, and includes, inter alia:


 


(a) safe
Vessel or Installation management and navigation;


 


(b) collision
prevention;


 


(c) maintaining
appropriate safety procedures and medical standards;


 


(d) appropriate
provision of safety equipment, first aid, rescue and fire fighting services;


 


(e) protecting
the safety, health and welfare of personnel used in the Activities;


 


(f) preventing
injury to personnel that may be affected by the Activities; and


 


(g) taking
measures to effectively deal with safety Emergencies.


  


Safety
Incident means any event involving Safety at Sea that seriously breaches NORI’s ISA Obligations.


 


Serious
Harm to the Marine Environment means any serious harm to the marine environment caused by one or more Activities that constitutes
a serious breach of NORI’s ISA Obligations. SMRP see clause 3.1.


 


Sponsorship
means sponsorship of NORI by the Republic as required by the ISA, the ISA Regulations, UNCLOS, and/or under NORI’s Exploration
Contract and/or Exploitation Contract and Sponsored shall have a similar meaning.


 


Sponsorship
Obligations means any and all responsibilities and obligations the Republic has under UNCLOS or the ISA Regulations with which
it is legally required to comply and that pertain to the Republic’s Sponsorship of NORI and/or the Activities, including its responsibility
to ensure NORI’s compliance with NORI’s ISA Obligations.


 


Subcontractor
means any person or entity who is subcontracted (either by the NORI Group or their subcontractors or their affiliates and whether
via contract or through a joint venture or similar arrangement) to carry out all or part of the Activities in the Tenement Area, and
includes without limitation any of the subcontractors’ officers, employees, agents, contractors, or assignees. [For the avoidance
of doubt, this definition only includes those persons or Entities for whom the Republic has a responsibility and is potentially liable
in accordance with its Sponsorship Obligations]. This definition does not include any officer or employee of the Republic or any person
who represents or is contracted by the Republic, ISA or other regulatory body.


 






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Tax
means any tax, fee, Corporate Tax, sales tax, capital gains tax, resource rent tax, transfer tax, impost, royalty, duty (including
import duty and stamp duty), excise charge, surcharge, contribution, levy, rate, rent or any other charge however it is described, whether
direct or indirect, whether monetary or non-monetary, and whatever method collected or recovered, imposed by any Nauruan governmental,
semi governmental or other Nauruan body authorised by law.


 


Tenement
Area means that part of the International Seabed Area, as may change from time to time, over which NORI has Tenements.


 


Tenements
includes any ISA Contract and any lease, contract, licence, claim or permit issued or to be issued to NORI by the ISA or any
other regulatory body which confers or may confer on NORI a right to prospect, explore for, mine and/or process any mineral in the International
Seabed Area, or which may facilitate the enjoyment of such right, and includes any application for, and any extension, renewal, conversion
or substitution of, any of those tenements, and for the avoidance of doubt includes without limitation any and all ISA Contracts and
the rights of access and to enjoy the income and/or product derived thereof.


 


Term
means the term as provided for in clause 1.1.





 


Tonne
means the weight of one thousand (1000) kilograms of Polymetallic Nodules Recovered from the Tenement Area measured at the first
onshore port of unloading.


 


UNCLOS
means the United Nations Convention on the Law of the Sea of 10 December 1982. Vessel means any sea-going vessel and any seaborn
craft of any type whatsoever used in the Activities and for which the Republic is responsible and potentially liable for in accordance
with its Sponsorship Obligations.


 


[Remainder
of page intentionally left blank]


 






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	Signed
    as an agreement	 	 
	 	 	 
	For and on behalf of the Republic of Nauru	 
	 	 
	 	 
	Name:	Dated:	 
	Title:	 	 
	 	 	 
	For and on behalf of the Nauru Seabed Minerals Authority	 
	 	 
	 	 	 
	Name:	Dated:	 
	Title:	 	 
	 	 	 
	For and on behalf of Nauru Ocean Resources, Inc.

                                                                      
	 
	 	 	 
	Name:	Dated:	 
	Title:	 	 



 


[Signature Page to Sponsorship Agreement]