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30 December 2004




GNiFi

(as Lessor)




GORO NICKEL S.A.

(as Lessee)


 



	 





LEASE AGREEMENT




(Contrat de Crédit-Bail)






	 

















 








TABLE OF CONTENTS




	 	 	 	 	 
	CLAUSE	 	PAGE
	1. DEFINITIONS

	 	 	2	 
	 

	 	 	 	 
	2. PURPOSE AND TERM OF THIS LEASE

	 	 	2	 
	 

	 	 	 	 
	3. UNDERTAKINGS OF THE LESSOR

	 	 	3	 
	 

	 	 	 	 
	4. DEFECTS

	 	 	3	 
	 

	 	 	 	 
	5. TERMS AND CONDITIONS OF OCCUPATION

	 	 	4	 
	 

	 	 	 	 
	6. RENT AND OTHER CHARGES

	 	 	6	 
	 

	 	 	 	 
	7. WORK PERFORMED DURING THE LEASE TERM

	 	 	8	 
	 

	 	 	 	 
	8. LIABILITIES AND RECOURSE

	 	 	9	 
	 

	 	 	 	 
	9. INSPECTIONS

	 	 	10	 
	 

	 	 	 	 
	10. ENVIRONMENTAL RISKS

	 	 	10	 
	 

	 	 	 	 
	11. SAFETY AND SECURITY

	 	 	12	 
	 

	 	 	 	 
	12. INSURANCES

	 	 	12	 
	 

	 	 	 	 
	13. TOTAL AND PARTIAL LOSS

	 	 	15	 
	 

	 	 	 	 
	14. PARTIAL EXPROPRIATION

	 	 	16	 
	 

	 	 	 	 
	15. TEMPORARY REQUISITION

	 	 	17	 
	 

	 	 	 	 
	16. TRANSFER

	 	 	17	 
	 

	 	 	 	 
	17. LIENS

	 	 	17	 
	 

	 	 	 	 
	18. NO WAIVER

	 	 	18	 
	 

	 	 	 	 
	19. REPRESENTATIONS

	 	 	18	 
	 

	 	 	 	 
	20. TERMINATION EVENTS

	 	 	21	 
	 

	 	 	 	 
	21. TERMINATION

	 	 	24	 






Page I









 






	 	 	 	 	 
	22. PAYMENT ON TERMINATION – TRANSFER OF TITLE TO THE ASSETS

	 	 	26	 
	 

	 	 	 	 
	23. ADD-BACK INDEMNITY

	 	 	27	 
	 

	 	 	 	 
	24. COLLATERALISATION

	 	 	29	 
	 

	 	 	 	 
	25. INDEMNIFICATION

	 	 	31	 
	 

	 	 	 	 
	26. PURCHASE OPTION

	 	 	35	 
	 

	 	 	 	 
	27. DGI PROCESS

	 	 	36	 
	 

	 	 	 	 
	28. CONDITIONS PRECEDENT

	 	 	37	 
	 

	 	 	 	 
	29. CONSENT RIGHTS

	 	 	38	 
	 

	 	 	 	 
	30. WAIVER OF RECOURSE

	 	 	39	 
	 

	 	 	 	 
	31. AMENDMENTS

	 	 	39	 
	 

	 	 	 	 
	32. PARTIAL INVALIDITY

	 	 	39	 
	 

	 	 	 	 
	33. CONFIDENTIALITY

	 	 	40	 
	 

	 	 	 	 
	34. CHOICE OF LAW - JURISDICTION CLAUSE

	 	 	40	 
	 

	 	 	 	 
	35. COSTS AND EXPENSES

	 	 	41	 
	 

	 	 	 	 
	36. NOTICES

	 	 	41	 
	 

	 	 	 	 
	APPENDIX 1 DEFINITIONS

	 	 	45	 
	 

	 	 	 	 
	APPENDIX 2 DESCRIPTION OF THE ASSETS

	 	 	60	 
	 

	 	 	 	 
	APPENDIX 3 ASSUMPTIONS

	 	 	61	 
	 

	 	 	 	 
	APPENDIX 4 ADJUSTMENT METHOD FOR CHANGE IN ASSUMPTIONS

	 	 	83	 
	 

	 	 	 	 
	APPENDIX 5 RENT PAYMENT SCHEDULE SEE ANNEX 3 OF APPENDIX 3

	 	 	87	 
	 

	 	 	 	 
	APPENDIX 6 LOAN AGREEMENT – OUTSTANDING PRINCIPAL AMOUNT SEE ANNEX 2 OF APPENDIX 3

	 	 	88	 
	 

	 	 	 	 
	APPENDIX 7 TAX LOAN REFERENCE TV SEE ANNEX 5 OF APPENDIX 3

	 	 	89	 
	 

	 	 	 	 
	APPENDIX 8 COMPUTING OF THE RETROCESSION RATE

	 	 	90	 






Page II









 






	 	 	 	 	 
	APPENDIX 9 DGI FINAL APPROVAL

	 	92







Page III









 





THIS LEASE, DATED 30 DECEMBER 2004, IS ENTERED INTO BY AND BETWEEN:





	(1)  	GNiFi, a groupement d’intérêt économique having its registered office at 37, avenue Henri
Lafleur, BP K3, 98849 Nouméa Cedex, and enrolled at the Register of Commerce and Companies of
Nouméa under number 204 C 749002, and represented by Monsieur Khalid AMMARI, duly authorised
for the purposes of this Lease (hereinafter referred to as the “Lessor”); and
	 
	(2)  	GORO NICKEL S.A., a company incorporated under the laws of France, having its registered
office at 38, rue du Colisée, 75008 Paris, France, and enrolled at the Register of Commerce
and Companies of Paris under number 313 954 570, acting herein through and on behalf of its
branch (succursale) whose registered office is at 7 bis, rue Suffren, BP218, 98845, Nouméa
Cedex, New Caledonia, and represented by Monsieur Yves ROUSSEL, duly authorised for the
purposes of this Lease (hereinafter referred to as the “Lessee”),




each a “Party” and together the “Parties”.



WHEREAS:



(A)     The Lessor has been organised for the purpose of constructing, financing and leasing the Assets
which constitute a portion of the Plant. The Project shall be developed and operated by the Lessee.
The transactions contemplated by this Lease and the other Transaction Documents are based on the
special tax support available for Dom-Tom investments.



(B)     In accordance with the Girardin Law, the Request for DGI Final Approval was filed with the DGI.
A preliminary approval of the Transaction was granted by the DGI by a letter dated May 4, 2001 and
the DGI Final Approval is to be issued. The retrocession rate as calculated in
Appendix 8 at the date of this Lease is higher than 80%.





	(C)  	In order to finance the construction of the Assets, the Lessor shall:






	 	(i)  	receive the Tax Advances from the Tax Investors pursuant to an the
Tax Loan Agreement; and
	 
	 	(ii)  	enter into the Loan Agreement.






	(D)  	The Substantial Completion Date and the delivery of the Assets to the Lessee is expected to
occur on or prior to December 31, 2008 (as such date may be extended to a date no later than
December 31, 2009 (subject to the satisfaction of the conditions in clause 11.1(b) of the
Construction Agreement)). Substantial Completion shall be evidenced by the signature by the
Project Manager and the Lessee, on its behalf and on behalf of the Owner, of a Definitive
Acceptance Certificate in accordance with the terms of the Construction Agreement.




NOW THEREFORE, THE PARTIES AGREES AS FOLLOWS:





Page 1









 








1. Definitions



1.1 For the purpose of this Lease, capitalised terms and expressions which are not otherwise
defined in this Lease (whether in singular or in plural form) shall have the respective meanings
given to them in Appendix 1.



1.2 In this Lease





	(a)  	headings of Clauses and Appendices are for ease of reference only and are not intended to
influence the interpretation of this Lease; and
	 
	(b)  	references to any agreement or any other document shall be construed as a reference to that
agreement as it may from time to time be amended, varied, supplemented, restated or novated
(but excluding any amendment, variation, supplement, restatement, variation or novation
contrary to any Transaction Document).





2. Purpose and Term of this Lease



2.1 The Lessor hereby agrees to lease the Assets to the Lessee and the Lessee agrees to lease the
Assets from the Lessor, in accordance with the provisions of Articles L.313-7 et subseq. of the
French Code Monétaire et Financier, the laws in force in New Caledonia and the terms and conditions
of this Lease.



2.2 This Lease shall commence on the date hereof and end on the date on which the Lessee has fully
performed all of its obligations hereunder and no claim is capable of being made against the Lessor
in respect of which it would be entitled to be indemnified hereunder. The “Lease Term” shall
commence on the Substantial Completion Date and end, except as otherwise provided herein, on the
twelfth anniversary of the Substantial Completion Date.



2.3 The Parties hereby acknowledge that the Lessor has agreed only to provide financing for the
Transaction and that all risks associated with the ownership and the operation of the Assets will
be borne solely by the Lessee pursuant to the terms and conditions of this Lease.



2.4 The Lessor shall acquire title to the Assets in accordance with clause 7.3 of the Construction
Agreement.



2.5 The Lessor shall deliver and the Lessee shall accept the Assets on the Substantial Completion
Date in accordance with the terms of the Construction Agreement.



2.6 The Parties agree that no inventory (état des lieux) shall be prepared for the Assets, and the
Lessee shall take the Assets in the condition they are in as at the Substantial Completion Date,
without recourse of any sort against the Lessor. The delivery of the Definitive Acceptance
Certificate:





	(a)  	shall be considered as an acknowledgment by the Lessee that (subject to any claims the Lessee
may bring under the supplier, installer and manufacturer warranties referenced in Clause 8.3)
the Assets are fit for their intended use, without any restrictions or reservations, and are
accepted by the Lessee; and




Page 2









 












	(b)  	shall result in the use and possession of the Assets being transferred to the Lessee (entrée
en jouissance) and the transfer of custody of the Assets from the Project Manager to the
Lessee in accordance with the Construction Agreement.




2.7 With effect from the date of this Lease until the fifth anniversary of the Substantial
Completion Date, the Lessee expressly renounces any investment tax benefit understood as “aide
fiscale locale à l’investissement, équivalente à l’ aide fiscale de l’ article 217 undecies
(déduction extra-comptable, crédit-d’ impôt)” and undertakes not to request any investment
subsidies (subventions d’ investissement) in relation to the Assets.




3. Undertakings of the Lessor



3.1 The Lessor undertakes:





	(a)  	to provide the Lessee with quiet enjoyment of the Assets during the Lease Term;
	 
	(b)  	not to grant any security or guarantee to a third party other than the Security, or to do
anything which could reduce the value or effectiveness of the Security;
	 
	(c)  	not to change its business or to incur any indebtedness other than that approved under the
Transaction Documents with a view to remaining a bankruptcy remote entity; and
	 
	(d)  	to properly incorporate all the Tax information included in the DSF Ruling and accounting
information relating to the Lessor into its accounts and financial models as they pertain to
the Transaction and to take responsibility in case of error in the incorporation of such
information.




3.2 The Lessor makes no representation, warranty, undertaking or guarantee in connection with the
condition or use of the Assets (in particular relating to any fault or apparent or hidden defect of
the Assets), and, in particular, the Lessor has no obligation to maintain the Assets, in accordance
with articles 1719 2°, 1719 4°, 1720 and 1721 of the French Civil Code, in recognition of the fact
that the Lessee (in its capacity as Lessee and Project Manager) is responsible for the selection of
the location, the type, the configuration, the design and the intended use of the Assets and the
selection and installation of the Equipment.




4. Defects



4.1 Notwithstanding the provisions of articles 1720 and 1721 of the French Civil Code, the Lessee
may not make any claim against the Lessor in respect of any defect in the Assets or obtain a
decrease in the amount of the Rent or a reduction in the purchase price under Clause 26, even where
such defect is such that it would prevent the use of the Assets.



4.2 As between the Lessee and the Lessor, the Lessee shall be solely responsible and liable for the
following:





	(a)  	all apparent or hidden defects in the Assets; and
	 
	(b)  	all defects in the condition of the Land that affect the operation of the Assets.




Page 3









 










The Lessee agrees not to make a claim against the Lessor, and that the Lessor shall not be liable,
for any losses incurred as a result of such defects. The Lessee shall be required to perform at its
own expense all repairs and replacements of any type that are necessary as a result of any defect,
whether apparent or hidden.



4.3 The Lessee agrees to notify the Lessor of any defects in the Assets, whether apparent or
hidden, in respect of which a claim has been or will be made under the Insurance Policies within
the time limits imposed under the Insurance Policies, and in any case, not later than one (1) month
after the Lessee’s discovery thereof. All the consequences of any delay in providing notice of any
defects that might otherwise be covered by any insurance benefits shall remain the responsibility
of the Lessee.




5. Terms and Conditions of Occupation




5.1 Authorised use of the Assets



The Assets shall be used by the Lessee in connection with the Project (the “Authorised
Activities”).




5.2 Operating permits





	(a)  	The Lessee shall be responsible for obtaining all administrative authorisations required by
Applicable Law in New Caledonia to conduct the Authorised Activities.
	 
	(b)  	Upon any request from the Lessor, the Lessee shall provide documentary proof that the Lessee
has secured the operating permits required by any Applicable Laws in New Caledonia and that
such permits remain in effect. For the avoidance of doubt, the Lessor acknowledges that the
Lessee shall only be required to obtain such operating permits by the time that such operating
permits are necessary under Applicable Laws in New Caledonia.





5.3 Compliance with standard practice





	(a)  	In connection with the operation of the Assets, the Lessee shall comply with any Applicable
Law in New Caledonia, including inter alia with regard to labour, safety, health and
environment matters.
	 
	(b)  	The Lessee shall ensure that all Equipment conforms in all material respects to standards
mandated under Applicable Law in New Caledonia.
	 
	(c)  	The Lessor shall not be responsible for any work required to ensure the Assets conform to the
standards described in this Clause 5.3, even where Applicable Law in New Caledonia provides
that the owner must bear the cost of such work.
	 
	(d)  	At its own expense and with no right of claim or action against the Lessor, the Lessee shall
be responsible for the cost of any work or investigation that may be necessary in order to
comply with any Applicable Law in New Caledonia notwithstanding the termination of this Lease
or the Lease Term.




Page 4









 











5.4 Easements (if any)





	(a)  	The Lessee shall have no right of claim or action against the Lessor to seek any reduction in
the Rent or in the other financial charges under this Lease in connection with the existence
of any easements (servitudes) that may encumber the Assets.
	 
	(b)  	The Lessee shall benefit from the “active” easements (servitudes actives) in connection with
the Assets (if any), at its own expense, risk and peril, and with an obligation (where
applicable) to pay its share of costs in respect of such easements.





5.5 Modifications





	(a)  	Subject to any administrative authorisations that may be necessary, and to compliance with
all Applicable Laws in New Caledonia, the Lessee will be entitled to undertake at its own cost
any modification to and/or improvement of the Assets without the Lessor’s consent, unless such
modification and/or improvement results in:






	 	(i)  	the withdrawal or deprivation of the DGI Final Approval and the
benefits to the Tax Investors under the Girardin Law;
	 
	 	(ii)  	a reduction of the value of the Assets or a material modification
of the Assets in a manner that is not consistent with the Authorised Activities;
or
	 
	 	(iii)  	the Lessor or the Tax Investors being exposed to any additional
event which is likely to result in an Operational Loss which was not contemplated
under the Transaction Documents at the date of this Lease.






	(b)  	In accordance with this Clause 5.5, the Lessor shall grant powers to the Lessee for the
purpose of filing the applications for the administrative authorisations necessary for the
performance of the work.
	 
	(c)  	The Lessee will notify the Lessor in writing of any modification or improvement to be made to
the Assets which requires any application for any Administrative Authorisations to be made, no
later than 15 Business Days prior to the date planned for the filing of the application for
such Administrative Authorisation.





5.6 Lessee financial information





	(a)  	Upon request, the Lessee will provide its audited annual reports to the Lessor no later than
30 June of each year.
	 
	(b)  	The Lessee shall also provide such other information regarding the Lessee’s financial
condition or operations as may be reasonably requested by the Lessor in connection with the
preparation of Lessor’s financial statements or as required by any Member or Tax Investor in
order to comply with any request from a competent regulatory body or tax authority.




Page 5









 












	(c)  	The Lessee will provide to the Lessor a copy of each report required to be provided to the
DGI in accordance with the DGI Final Approval.





6. Rent and Other Charges




6.1 Rent and Termination Value





	(a)  	Description of Rent






	 	(i)  	It is expressly understood and agreed that the term “Rent” as used
herein for the convenience of understanding shall be qualified as a financial
charge.
	 
	 	(ii)  	Unless otherwise expressly provided for by the provisions of this
Lease, the Rent shall not be modified or adjusted for any reason, whether in
connection with legal provisions governing (whether temporarily or otherwise) the
amount or the rate of the rentals for commercial or industrial premises, nor
shall it be adjusted based on the provisions of articles L.145-1 and subsequent
of the French Commercial Code, governing the relations between lessors and
lessees of commercial premises.
	 
	 	(iii)  	Notwithstanding the provisions of Article 1724 of the French Civil
Code, in the event that the operation of the Assets must be suspended for any
reason, including inter alia as the result of any work carried out by the Lessee,
an accident or a fortuitous or force majeure event (including fire), the Lessee
shall not be entitled to claim any indemnity from the Lessor or any decrease in
the Rent, even where such suspension continues for a period of more than forty
(40) days.






	(b)  	Determination, due date and payment of Rent






	 	(i)  	During the Lease Term, the Lessee shall owe and make payments of
Rent to the Lessor in US$, in the amounts and on the dates set out in the Rent
Payment Schedule.
	 
	 	(ii)  	The first instalment of Rent shall be due and payable on the date
falling six months after the Substantial Completion Date.
	 
	 	(iii)  	The last instalment of Rent shall be payable on the last day of
the Lease Term.
	 
	 	(iv)  	If any payment is due and payable on a day that is not a Business
Day, the due date for payment shall be extended to the next Business Day unless
such Business Day falls in the next calendar month in which case payment shall be
made on the immediately preceding Business Day, and the amount of such payment
shall be equal to the amount calculated as if such payment had been made on the
date which the payment was originally due and payable.
	 
	 	(v)  	The Rent shall be portable. Any payment of Rent by the Lessee under
this Lease shall be made by the Lessee:




Page 6









 












	 	(A)  	by electronic transfer of immediately available funds to an
account specified by the Lessor;
	 
	 	(B)  	before 11:00 a.m. in New York, being the location of the
account specified by the Lessor for payment; and
	 
	 	(C)  	on the Interest Payment Date.






	(c)  	Adjustment of Rent, Tax Loan Reference TV and Termination Value






	 	(i)  	The Rent Payment Schedule, parts (a) and (b) of the definition of
Termination Value and Tax Loan Reference TV are based on the Assumptions and
shall be adjusted pursuant to Appendix 3 (in the case of the Rent Payment
Schedule) and Appendix 4 (in the case of parts (a) and (b) of the definition of
Termination Value and Tax Loan Reference TV).
	 
	 	(ii)  	The Lessor shall communicate forthwith to the Lessee any new Rent
Payment Schedule, parts (a) and (b) of the definition of Termination Value or Tax
Loan Reference TV if adjusted as a result of a variation of any of the
Assumptions and shall provide to the Lessee the opportunity to comment on such
adjustments.





6.2 Payment of cost, charges and Taxes





	(a)  	The Lessee agrees to pay all Taxes and charges normally for the account of lessees, and in
particular any TSS (if and when applicable), its movable and personal property contributions,
rental Taxes and professional Taxes. The Lessee agrees further to assume all Taxes, charges,
contributions or other items, whatever their designation or their basis and whoever is the
lawful debtor, including the Lessor, and which directly or indirectly relate to the Assets or
their use, including any real estate Tax and all Taxes of a proprietary or other nature, that
are usually for the account of owners, and generally, all Taxes or charges to be borne by
lessees or which, even if they are charged to owners of buildings, would relate to a service
from which the Lessee benefits, in such a manner that the Lessor collects Rent that is net of
all Taxes, charges, payments and expenses of any type.
	 
	(b)  	All amounts that may be owed in connection with the premiums for the Insurance Policies, and
more generally, those costs and charges required to be paid by the Lessee under this Lease,
must be borne by the Lessee.
	 
	(c)  	The Lessee agrees to pay the amounts specified in this Clause 6.2, plus any Tax levied
thereon (if applicable), to the Lessor, upon any request.
	 
	(d)  	The Lessor shall issue the request referred to in Clause 6.2(c) to the Lessee by ordinary
letter containing documentary proof of the amounts owed and their due dates.
	 
	(e)  	Where the Lessee fails to strictly comply with the provisions of this Clause 6, all penalties
for delay, interest on overdue payments, surcharges, monetary damages and/or other charges
that could be claimed by reason of the delay in the payment by the Lessee




Page 7









 












	 	   	of the Taxes, levies, charges, insurance premiums and/or additional costs shall be borne by
the Lessee. If the Lessor must pay or pays any amount on behalf of the Lessee in accordance
with this Clause 6.2, the Lessee shall pay to the Lessor such amount.






	(f)  	At least ten (10) Business Days prior to each Interest Payment Date, the Lessor shall submit
to the Lessee all information and all documentary proof inter alia to verify the Taxes,
charges or costs (if any) actually borne by the Lessor.





6.3 Supplemental Rent



In the event that the Substantial Completion Date occurs after December 31, 2007 or there is a
delay in claiming deductions, the Lessee shall pay to the Lessor a supplemental rent as and when
indicated in paragraphs (5) or (6) of Appendix 4.



In the event that any centimes additionels are payable by the Lessor a supplemental rent calculated
in accordance with paragraph (ee) of Section C to Appendix 3 will be payable by the Lessee.




6.4 Costs and charges



The Lessee shall bear any cost or charges due and payable in connection with the possession,
control, safekeeping, management, maintenance, refurbishment, repair or operation of the Assets.




7. Work performed during the Lease Term




7.1 Maintenance / repairs





	(a)  	The Lessee agrees to maintain and, subject to exercise of the Purchase Option, to return the
Assets, at the end of the Lease Term, in a proper state of maintenance, rental repairs
(réparations locatives) and replacement (normal wear and tear excepted).
	 
	(b)  	The Lessee shall be required to perform, on the Lessor’s behalf but at the Lessee’s own
expense, risk and peril, and without any right of claim, action or refund against the Lessor,
all structural work and major repairs to the Assets that may become necessary during the Lease
Term in connection with the performance of the Authorised Activities, including inter alia
those set forth in Article 606 of the French Civil Code, required by any competent authority
or resulting from a fortuitous or force majeure event notwithstanding that such work and
repairs would usually be required to be performed by the owner of the assets and which, once
incorporated into the Assets, automatically become the owner’s property.
	 
	(c)  	The Lessee shall be solely and exclusively liable for any direct or indirect consequences
that may result from any failure to perform, in due time, the work, repairs or replacements
that fall under the Lessee’s responsibility.





7.2 Liability of the Lessee by reason of the work




Page 8









 









	(a)  	During any period of construction, reconstruction or restoration of any portion of the
Assets, the Lessee shall take reasonable precautions to preserve and protect the Assets from
risk of damage or destruction, in accordance with prevailing construction practices.
	 
	(b)  	The Lessee undertakes to carry out all work required under this Clause 7 in conformity with
Applicable Law in New Caledonia.





7.3 Status of the works performed by the Lessee during this Lease





	(a)  	Without prejudice to the provisions of Clause 5.5, any structural additions to the Assets by
the Lessee shall be deemed to be the Lessor’s property free of any lien except Permitted
Liens.
	 
	(b)  	The Lessee must, on termination of the Lease Term, leave the modifications and/or
improvements to the Assets, without being entitled to demand any indemnity, or any refund of
the costs and expenses of replacement equipment in such respect.





8. Liabilities and recourse



8.1 During the Lease Term the Lessee shall have the use, administration, management and control of
the Assets. In such respect, the Lessee shall be deemed to be the custodian (gardien) of the Assets
and the Assets shall be placed under its exclusive care, which the Lessee must assume in full,
without any right for the Lessee to bring any claims or actions against the Lessor in connection
with the Assets except as otherwise provided for in this Lease. Therefore, as between the Lessee
and the Lessor, the Lessee shall be responsible during the Lease Term for any damage to the Assets
or any damage that may arise due to reasons attributable to the Assets, whatever the cause thereof,
including defects.



8.2 During the Lease Term all damage or loss that may be caused to the Lessee by reason of the
Assets shall be entirely borne by the Lessee, without any right for the Lessee to bring any claims
or actions against the Lessor and the Lessee shall indemnify and hold harmless the Lessor against
all losses, claims, costs (including legal costs) and judgments in connection therewith (other than
those arising from a third party claim). The provisions of Clause 25.1(c), (d) and (e) shall apply
mutatis mutandis to the indemnity given under this Clause 8.2 as if amounts paid under this
indemnity were Indemnification Amounts and such losses, claims, costs and judgments were
Operational Losses.



8.3 The provisions of this Lease related to assumption of liability by the Lessee and acceptance by
the Lessee of the Assets at the Substantial Completion Date shall not release or be deemed to
release any Contractor or other third party from its obligations and liabilities in connection with
the work and the construction of the Assets. In this respect, the Lessor grants a power of attorney
to the Lessee in order to file any claims in relation to the installation and the operation of the
Assets against any Contractor or other third party pursuant to the warranties issued by such
Contractor or other third party with respect to the installation and the operation of the Assets in
favour of the Lessor and to complete any necessary steps. Such power of attorney will be
automatically terminated upon the occurrence of a Lessor Termination Event.




Page 9









 







8.4 The Lessee shall be entitled to bring all actions that it may deem appropriate against any
Contractor or other third party provided that the Lessee shall not be entitled to assert that the
Lessor is liable or otherwise implicate the Lessor in any such actions, in any manner.



8.5 The Lessee shall bear the cost of all interest, legal costs and fees in relation to such
proceedings, as well as the damages or other judgments (if any) that may be awarded or entered as a
result thereof.




9. Inspections



9.1 During the Lease Term, the Lessor or its agents may, upon reasonable prior notice and not more
than once per year, inspect the Assets in order to verify their condition, and the Lessee must
provide, upon any request from the Lessor, all the documentary proof that may be reasonably
requested from the Lessee on the proper performance of the Lessee’s obligations under this Lease.



9.2 Unless a Lease Termination Event shall have occurred and be continuing, the Lessee shall bear
any reasonable out of pocket expenses of the Lessor’s agent in connection with one inspection each
calendar year. If a Lease Termination Event shall have occurred and be continuing, the Lessee
shall bear any reasonable out of pocket expenses of the Lessor’s agent in connection with any
inspection. Any inspection must be requested in advance in order to ensure that the inspection
does not hinder the operations of the Project.



9.3 The Lessor must procure that any Person given access under Clause 9.1 or Clause 9.2 complies
with the Lessee’s site rules and must procure that such access does not hinder or disrupt the
Project.




10. Environmental Risks




10.1 Obligations of the Lessee



(a) During the Lease Term, the Lessee will operate the Project (including the Assets), in
compliance in all material respects with all applicable Environmental Laws.





	(b) 	The Lessee hereby agrees to notify the Lessor within 5 Business Days:






	 	(i)  	of any formal notice (mise en demeure formelle) received from the
public authorities, relating to the operation of the Assets or indicating that
the Assets must conform to any applicable Environmental Law, and namely involving
(without limitation) discharges into water, on to land (either above or below
ground), emissions into the air, noise, the processing of waste products or the
storage of any Hazardous Material;
	 
	 	(ii)  	of any accident or incident that may result from the operation of
the Assets, and that could have any material adverse effects on the environment,
or that could create any risk of material harm to the environment, and that would
require a report thereon to be filed with the Bureau de l’ Inspection des
Installations Classées (New Caledonian Agency for the Inspection of Classified
Facilities), in




Page 10









 






	 	   	accordance with the provisions of Order n°14 dated 21 June 1985 (as amended), as
well as any subsequent statutes;






	 	(iii)  	of any court decision or injunction rendered as a result of any
complaints filed by third parties or by a public authority to obtain the remedy
of any adverse effects on the environment, or to seek an end to any nuisances,
resulting from the operation of the Plant; and
	 
	 	(iv)  	of any formal notice received from any public authority to correct
or repair (remise en état) all or any material part of the Assets.






	(c)  	The Lessee shall report to the Lessor and, where requested by the Lessor, provide documentary
proof of the measures implemented to remedy any situation reported under Clause 10.1(b) or to
comply with Applicable Law in New Caledonia.
	 
	(d)  	All the costs, expenses and fees that the Lessor may incur in connection with the provisions
of this Clause 10.1, as well as any deposits or bonds (consignation) that the Lessor may be
required to make or to post, shall be deemed to come under the obligations of the Lessee, and
the Lessee hereby agrees to promptly refund all such amounts to the Lessor, upon any request
to do so submitted by the Lessor.
	 
	(e)  	As between the Lessee and the Lessor, the Lessee shall be exclusively responsible for the
consequences of any environmental damage caused by the operation of the Assets during the
Lease Term, even if such damage is discovered after termination of this Lease or the Lease
Term and the Lessee shall indemnify and hold harmless the Lessor against all losses, claims,
costs (including legal costs) and judgments in connection therewith (other than those arising
from a third party claim). The provisions of Clause 25.1(c), (d) and (e) shall apply mutatis
mutandis to the indemnity given under this Clause 10.1(e) as if amounts paid under this
indemnity were Indemnification Amounts and such losses, claims, costs and judgments were
Operational Losses.





10.2 Administrative requirements



In the event of any shutdown of operation of the Assets (arrêt definitif), upon the Lessor’s
request, the Lessee shall:





	(a)  	submit documentary proof that it has filed the notices and reports required under Applicable
Law in New Caledonia in connection with such shutdown of operations (arrêt definitif) at the
relevant site;
	 
	(b)  	comply with all the preventive and restorative measures mandated, pursuant to Applicable Law
in New Caledonia; and
	 
	(c)  	procure from the public authorities all certificates or documentary proof of the completion
of all the formalities in relation to such shutdown of operations (arrêt definitif), as
required under Applicable Law in New Caledonia.




Page 11









 











11. Safety and Security



11.1 During the Lease Term, the Lessee shall be solely liable and responsible for the safety and
security of the persons and properties involved in the operation of the Assets and the Lessee shall
indemnify and hold harmless the Lessor against all losses, claims, costs (including legal costs)
and judgments in connection therewith (other than those arising from a third party claim). The
provisions of Clause 25.1(c), (d) and (e) shall apply mutatis mutandis to the indemnity given under
this Clause 11 as if amounts paid under this indemnity were Indemnification Amounts and such
losses, claims, costs and judgments were Operational Losses.



11.2 During the Lease Term, the Lessee shall provide the Lessor with a report on any major
developments related to safety and security and on the measures implemented by the Lessee related
to safety and security at the Assets, such report to be provided semi-annually prior to the Final
Completion Date and annually thereafter.




12. Insurances



12.1 The Lessee shall obtain and maintain the following insurance cover from appropriate solvent
insurers with ratings by Standard & Poor’s Ratings Group of no less than A-, for the period
commencing on the Substantial Completion Date and ending on the later of the expiry of the Lease
Term and the date on which title to the Assets is transferred to the Lessee on payment of the
Termination Compensation (if any) in full, on a basis consistent with Inco’s policies and best
practice, providing such cover (including deductions and exclusions) and in such form and amounts
as are customarily obtained for this type of operation and in accordance with good business
practices:






	(a)  	“All Risks Property/Boiler and Machinery insurance”, including insurance against flood,
earthquake, civil commotion, riot and terrorism insuring the Assets against direct physical
loss or damage and resultant business interruption on a replacement cost basis;
	 
	(b)  	“Third Party Liability Insurance” insuring liabilities arising from bodily injury, death and
property damage arising out of the ownership, operation, maintenance, condition or use of the
Assets. Cover shall include, but shall not be limited to, blanket contractual legal liability,
broad form property damage, occurrence property damage, personal injury, sudden and accidental
pollution; and
	 
	(c)  	any other insurance which may be required by local law, it being understood that a
determination of what is required by local law will be based on a cooperative analysis by the
Lessee, the Lessor and their respective insurance and legal advisers.




12.2 The Lessee shall cause each Insurance Policy to:





	(a)  	name the Lessor, each Member, each Tax Investor, the Security Agent and the Lessor
Administrators as named insured as their interest may appear and as relates solely to the
Assets, but none of the Lessor nor any Tax Investor or any Member or the Security Agent or the
Lessor Administrators shall be liable for the payment of such insurance premiums;




Page 12









 












	(b)  	designate the Security Agent as the loss payee, on behalf of each named insured in Clause
12.2(a) as their collective interests may appear (but only as such interests relate to the
Assets) except that it is understood and agreed that the Security Agent, the Lessor or any
Tax Investor will not be designated as loss payee as regards Insurance Policies covering
liabilities to third parties or insuring the interests of third parties; and
	 
	(c)  	provide a waiver of all rights of recourse against the Lessor, each Tax Investor, each
Member, the Security Agent and the Lessor Administrators and their insurers with respect to
their interests in the Assets and the Lessor, each Tax Investor, each Member, the Security
Agent and the Lessor Administrators shall cause their respective insurers to waive any rights
of recourse against the Lessee and each of its insurers.
	 
	   	Each of the Parties shall provide the others with documentation evidencing the waivers by
their respective insurers.





12.3 In respect of the Insurance Policies:





	(a)  	Notwithstanding Clause 12.2(b),






	 	(i)  	if the insurance proceeds resulting from any claim under the
Insurance Policies for damage to the Assets (other than damages amounting to a
Total Loss) are less than US$50,000,000, such proceeds will be paid directly to
the Lessee;
	 
	 	(ii)  	if the insurance proceeds resulting from any claim under the
Insurance Policies for damage to the Assets (other than damages amounting to a
Total Loss) are more than US$50,000,000, such proceeds will be paid directly to
the Lessee, provided that the Lessee provides the Lessor as soon as practicable
following such damage to the Assets with a plan which sets out the Lessee’s
proposal to reinstate the Assets back to their pre-loss condition, or (subject to
the Lessor’s written consent (such consent not to be unreasonably withheld)) to
an equivalent condition provided that the fitness for purpose of the Assets is
maintained;
	 
	 	(iii)  	if a Total Loss occurs and the Lessee has determined within twelve
months of the date of the event giving rise to such Total Loss that the Assets
will be replaced or re-built, then any insurance proceeds resulting from the
resultant insurance claim will be paid directly to the Lessee, provided that the
Lessee provides the Lessor as soon as practicable following the Total Loss with a
plan which sets out the Lessee’s proposal to reinstate the Assets back to their
pre-loss condition, or (subject to the Lessor’s written consent (such consent not
to be unreasonably withheld)) to an equivalent condition provided that the
fitness for purpose of the Assets is maintained;
	 
	 	(iv)  	if a Total Loss occurs and the Lessee has determined within twelve
months of the date of the event giving rise to such Total Loss that the Assets
will be not be replaced or re-built, then the Lessee shall provide the Lessor
with a letter of credit issued in favour of the Security Agent by a credit
institution with ratings by Standard & Poor’s Ratings Group of no less than A-
equal in amount to the Tax Loan Reference TV within five Business Days of the
date of such determination,




Page 13









 






	 	   	it being agreed and understood that any insurance proceeds resulting from the
resultant insurance claim will be paid directly to the Lessee;






	 	(v)  	if a Total Loss occurs and the Lessee has determined that the
Assets will be not be replaced or re-built, and the Lessee fails to provide the
Lessor with a letter of credit on the terms required under Clause 12.3(a)(iv),
then any insurance proceeds resulting from the resultant insurance claim to an
amount up to the Tax Loan Reference TV will be paid directly to the Security
Agent (acting on behalf of the Lessor and the Tax Investors) as the interests of
the Lessor and Tax Investors may appear and only as such proceeds relate to the
Assets; and
	 
	 	(vi)  	if a Total Loss occurs and insurance proceeds are paid prior to the
date on which the Lessee has notified the Lessor whether it intends to replace or
rebuild the Assets or, if earlier, prior to the date falling twelve months after
the date of the event giving rise to such Total Loss, then unless the Lessee has
provided to the Lessor a letter of credit on the terms required under Clause
12.3(a)(iv), the insurance proceeds up to an amount up to the Tax Loan Reference
TV will be paid directly to the Security Agent (acting on behalf of the Lessor
and the Tax Investors) as the interests of the Lessor and Tax Investors may
appear and only as such proceeds relate to the Assets;






	(b)  	In the event of failure by the Lessee to pay the relevant insurance premiums under the
Insurance Policies, the Lessor shall have the right to pay such premiums on behalf of the
Lessee.
	 
	(c)  	On or before the first day of the Lease Term and thereafter as soon as practicable following
any request by the Lessor, the Lessee agrees to furnish to the Lessor a report that includes
in respect of each Insurance Policy:






	 	(i)  	the certificates of insurances signed by the insurers or their
authorised representatives indicating the amount of the cover and the risks
covered, confirming that the provisions set out in Clause 12.3(e) are being
complied with and declaring that all insurance premiums have been paid; and
	 
	 	(ii)  	a certificate signed by a responsible officer of the Lessee stating
that such insurance is in accordance with this Clause 12;






	(d)  	During the occurrence of a Lease Termination Event (other than a Lessor Termination Event
referred to in Clause 20.1(d) (Total Loss) or a Lessee Termination Event referred to in Clause
20.2(b) (Lessor breach) or Clause 20.2(c) (DGI Final Approval)) which remains unremedied or
unwaived), all transactions and other agreements to be entered into between the Lessee and any
insurers relating to the determination of the amount of any damage and any other methods of
indemnification for losses under the Insurance Policies which exceed US$7,500,000 are subject
to the prior agreement of the Lessor. 
	 
	(e)  	To the extent that such provisions are valid and available on commercially reasonable terms,
the Insurance Policies shall provide that:




Page 14









 












	 	(i)  	the respective interests of each of the Lessor, any Member and any
Tax Investor shall not be invalidated by any act or omission by the Lessee; and
	 
	 	(ii)  	the cover afforded by such Insurance Policies shall not be affected
by the performance of any work on the Assets or by any modification thereto.






	(f)  	Subject to availability on commercially reasonable terms, the Insurance Policies shall
contain obligations on the part of the insurer as follows:






	 	(i)  	without prejudice to Applicable Law, to advise the Lessor of any
delay in the payment of premiums and not to suspend the agreed cover until one
(1) month following receipt by the Lessor of such notice;
	 
	 	(ii)  	without prejudice to Applicable Law, to provide the Lessor with one
(1) month’s prior notice of any termination, taking of effect of cancellation or
material reduction of cover which occurs at the initiative of such insurer;
	 
	 	(iii)  	not to exercise any rights against the Lessor, any Member,
any Tax Investor, the Security Agent and/or the Lessor Administrators relating to
any omission, incomplete information or misrepresentation of the Lessee or any
Contractor and, consequently, not to raise in defence against the Lessor, any
Member or any Tax Investor nullity, average or lapse in the event of a breach of
its obligations committed by the insured subsequent to the loss; and
	 
	 	(iv)  	not to avail itself of any clause limiting insurance proceeds to
the cost of the Assets in case of the Assets being constructed on the land of
others.






	(g)  	Notwithstanding the preceding provisions of this Clause 12, the Lessor may at any time take
out of its own initiative and at its own cost any other insurance that it may desire.
	 
	(h)  	The Lessee shall obtain and maintain the Insurance Policies and ensure compliance with
Applicable Law through participation by insurers licensed in New Caledonia. Reinsurance of
Insurance Policies will be arranged by the Lessee and may include reinsurance with insurers
operating outside of New Caledonia.
	 
	(i)  	The Lessee shall declare to the insurer, as the primary named insured, on behalf of all named
insured, including the Lessee and the Lessor, all accidents or events likely to give rise to a
claim under the Insurance Policies, in the manner provided for in the Insurance Policies.




12.4 The Lessee shall not seek to cancel the Insurance Policies or to introduce any amendment
materially reducing the cover thereunder without the prior consent of the Lessor which consent
shall not be unreasonably withheld.




13. Total and Partial Loss




13.1 Total Loss




Page 15









 









	(a)  	If, at any time after the Substantial Completion Date, an event occurs which could reasonably
be expected to constitute a Total Loss, the Lessee shall notify the Lessor as soon as
practicable.
	 
	(b)  	Within twelve months of the date of the occurrence of an event which gives rise to a Total
Loss, the Lessee shall notify the Lessor as to whether or not the Assets will be replaced or
re-built.
	 
	(c)  	Any other event, damage or loss which is not a Total Loss must be repaired or reconstructed
pursuant to Clause 13.2 below.





13.2 Partial Loss and Repair





	(a)  	If at any time after the Substantial Completion Date the Assets or any part thereof suffers
damage that does not constitute a Total Loss (a “Partial Loss”), the Lessee shall be required
to repair, at its own expense, the damage caused to the Assets and to restore the Assets back
to their pre-loss condition, or (subject to the Lessor’s written consent (such consent not to
be unreasonably withheld) to an equivalent condition provided that the fitness for purpose of
the Assets is maintained.
	 
	(b)  	The Lessee shall be responsible for all administrative authorisations and all expenses
necessary for such reconstruction.
	 
	(c)  	The repair, reconstruction or reinstatement work shall be performed under the Lessee’s full
responsibility, pursuant to a power of attorney (mandat) to be issued to the Lessee by the
Lessor.
	 
	(d)  	Subject to Clause 12.3(a) above and in accordance with the Insurance Policies, the insurance
proceeds shall be paid out to the Lessee, which shall use such proceeds to pay for the
restoration or reconstruction work, which shall be performed under the supervision of the
Lessee. It is agreed that the Lessee alone shall be responsible for all costs (including all
Taxes) in connection with the repair or reconstruction work in excess of the amount of such
insurance proceeds.




13.3 Upon the occurrence of any fortuitous or force majeure event which does not cause an
Abandonment to occur, this Lease shall not be terminated. The Lessee shall remain responsible for
the payment of all the Rent on the terms of this Lease, whatever the length of time of the event.




14. Partial Expropriation




14.1 Partial expropriation





	(a)  	In the event of any partial expropriation of the Assets during the Lease Term which does not
constitute a Lessor Termination Event pursuant to Clause 20.1(j), where:






	 	(i)  	the non-expropriated portion of the Assets allows the Lessee to
continue to conduct the Authorised Activities; and




Page 16









 












	 	(ii)  	the partial expropriation does not result in the withdrawal of the
DGI Final Approval,






	 	   	this Lease shall continue in full force and effect with regard to the non-expropriated
portion of the Assets.




The Rent and the charges payable under this Lease shall be owed in full by the Lessee. The Lessee
shall not be entitled to claim any adjustment to, or reduction in, the Rent by reason of the
reduction in the Assets.




14.2 Rights of the Lessee





	(a)  	Clause 14.1 shall be without prejudice to any rights that the Lessee may otherwise be
entitled to assert in connection with its indemnification by the expropriating authority, with
regard to the total or partial loss of its business (fonds de commerce).
	 
	(b)  	At its own discretion, the Lessee shall be entitled to exercise such rights exclusively as
against the expropriating authority, at its own expense, risk and peril, and without any right
of claim or action against the Lessor. The Lessor shall not be entitled to exercise any right
against the expropriating authority in respect of the partial expropriation of the Assets.





15. Temporary requisition





	(a)  	In the event of any temporary requisition or occupation of all or part of the Assets during
the Lease Term by any duly-empowered authority or agency which does not constitute a Lessor
Termination Event pursuant to Clause 20.1(j), this Lease shall continue in full force and
effect, and the Rent shall continue to be due and payable by the Lessee, without any
reduction.
	 
	(b)  	Any requisition or occupation indemnity to be paid in connection with such requisition or
occupation of the Assets shall be owed in full to the Lessee.





16. Transfer



Neither Party may sell, assign or transfer (collectively, “Transfer”) in any form its rights and
obligations under this Lease without the prior written agreement of the other Party provided that
this shall not apply to any Transfer permitted under any Transaction Document.




17. Liens



17.1 The Lessee shall not create nor permit to exist any Liens other than any Permitted Liens over
the Assets.



17.2 The Lessee shall not grant or permit to exist any mortgage, lien, pledge, impediment,
inscription on a public record in the nature of a security interest or any other type of security
interest or lien of any kind over any of its assets or undertaking in respect of any indebtedness
for borrowed money (howsoever characterised), unless the Lessor is entitled to share in such




Page 17









 







security interest pari passu in respect of the Add-Back Indemnity provided that this shall not
apply to a security interest granted in respect of the initial financing of the acquisition of an
asset, where such financing is limited in recourse solely to the asset acquired.




18. No Waiver



It is hereby formally agreed and understood that the fact that any act of forbearance or waiver
that may be made by a Party with regard to the enforcement of this Lease, whatever the frequency
and/or the duration thereof, shall, unless expressly provided otherwise in writing, in no event:





	(a)  	be deemed to constitute any novation or any amendment or any deletion of the provisions of
this Lease; or
	 
	(b)  	operate to confer any rights,




and in each case, except as expressly provided in writing, that Party shall be entitled to put an
end to such act of forbearance or waiver, without any prior notice being required.




19. Representations



19.1 The Lessor hereby makes the following representations to the Lessee as at the date of this
Lease:





	(a)  	Status: the Lessor is a groupement d’intérêt économique duly organised and validly existing
under the laws of France and the laws applicable in New Caledonia, and it possesses the
capacity to sue and be sued in its own name and has the power and authority to carry on its
business and to own its assets and has no immunity from jurisdiction;
	 
	(b)  	Capacity and authority: the Lessor has full legal capacity to execute, deliver and perform
its obligations under this Lease and each of the other Transaction Documents to which it is a
party and to carry out the transactions contemplated by such documents and all necessary
corporate and other action has been taken to authorise the execution, delivery and performance
hereof and thereof by the Lessor; and
	 
	(c)  	Validity, non-conflict: this Lease and each other Transaction Document to which the Lessor is
a party:






	 	(i)  	has been duly executed and validly delivered by the Lessor and
constitutes a valid, legal and binding obligation of the Lessor enforceable
against the Lessor in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganisation, moratorium and similar laws of
general application relating to or affecting creditors’ rights; and
	 
	 	(ii)  	does not violate any provisions of any law or regulation or any
judgment, order or decree of any governmental authority, agency or court having
jurisdiction over it.




Page 18









 










19.2 The Lessee hereby makes the following representations to the Lessor as at the date of this
Lease:





	(a)  	Status: the Lessee is a société anonyme, or a société par actions simplifiée (as the case
may be), duly organised and validly existing under the laws of France acting through its New
Caledonian branch in respect of its operations in New Caledonia (and its New Caledonian branch
is duly organised and validly existing under the laws applicable in New Caledonia), and it
possesses the capacity to sue and be sued in its own name and has the power and authority to
carry on its business and to own its assets and has no immunity from jurisdiction;
	 
	(b)  	Powers and authority: the Lessee has full legal capacity to execute, deliver and perform its
obligations under this Lease and each other Transaction Document to which it is a party and to
carry out the transactions contemplated by such documents and all necessary corporate,
shareholder and other action has been taken to authorise the execution, delivery and
performance hereof and thereof by the Lessee;
	 
	(c)  	Binding obligations: the obligations of the Lessee under this Lease and each other
Transaction Document to which the Lessee is a party constitute its valid, legal, binding and
enforceable obligations, subject to bankruptcy, insolvency, fraudulent transfer,
reorganisation, moratorium and similar laws of general applicability relating to or affecting
creditors’ rights;
	 
	(d)  	Contraventions: the execution, delivery and performance by the Lessee of this Lease and each
Transaction Document to which it is a party does not:






	 	(i)  	contravene any applicable law or regulation or any judgment, order
or decree of any governmental authority, agency or court having jurisdiction over
it;
	 
	 	(ii)  	result in any breach of any of the provisions of, or constitute a
default under, any agreement or other instrument to which the Lessee is a party
or any licence or other authorisation to which it is subject or by which it is
bound; or
	 
	 	(iii)  	contravene or conflict with the provisions of its constitutional
documents (statuts),






	   	in each case, save where such contravention is being contested in good faith, by an
appropriate proceeding;






	(e)  	Insolvency: the Lessee has taken no action nor, to its knowledge, have any steps been taken
or legal proceedings been started or threatened against it for winding-up, dissolution,
re-organisation, or bankruptcy;
	 
	(f)  	No default: so far as it is aware the Lessee is not in default under any obligation under any
agreement to which it is a party or which is binding on it in a manner or to an extent which
could reasonably be expected to have a material adverse effect on the Lessee’s operations or
on the Lessor’s or Tax Investors’ rights and obligations except where such default or alleged
default is being contested in good faith;




Page 19









 












	(g)  	Litigation: there are no actions, suits or proceedings pending or, to the Lessee’s knowledge,
threatened against or affecting the Lessee which would reasonably be expected to have a
material adverse effect on the ability of the Lessee to perform its obligations under the
Transaction Documents to which it is a party;
	 
	(h)  	Authorisations: all governmental authorisations, licences, consents, filings and
registrations required:






	 	(i)  	for the conduct of business trade and ordinary activities of the
Lessee (in particular the Operating Permit),
	 
	 	(ii)  	for the performance and discharge of the obligations of the Lessee
under the Transaction Documents to which it is a party, and
	 
	 	(iii)  	in connection with the execution, delivery, validity and
enforceability of the Transaction Documents to which it is a party,






	   	have been or, as the case may be, obtained or made, except to the extent that they are not
immediately necessary or failure to receive, benefit from or make the same would not have a
material adverse effect on the operations of the Lessee;
	 
	(i)  	Taxes: except as disclosed in writing to the Lessor prior to the date of this Lease: (a)
there are no material disputes pending or, to the Lessee’s knowledge, threatened with
governmental authorities in respect of the Lessee’s non-payment of Taxes; (b) the Lessee has
filed or caused to be filed all Tax returns required; and (c) the Lessee has paid all Taxes
due and payable on the returns contemplated by this Clause 19.2(i) except in each case (a) to
(c) where (A) the obligation to file or pay is being contested in good faith and by
appropriate proceedings, or (B) the failure to file or pay would not have a material adverse
effect on the Lessee’s operations or its ability to perform its obligations under the
Transaction Documents;
	 
	(j)  	Environment: the Lessee conducts its operations and assets in New Caledonia and will operate
the Assets in compliance with all applicable Environmental Laws except where appropriate
remedial action acceptable to appropriate regulatory bodies is being taken; and
	 
	(k)  	Accounts: the audited financial statements of the Lessee as of and for the period ended
December 31, 2003, fairly present in all material respects the financial condition of the
Lessee as of the date of such financial statements in accordance with French generally
accepted accounting principles, and as of the date of this Lease, except as disclosed in
writing to the Lessor (including, without limitation, pursuant to the Disclosure Letter) or as
publicly disclosed prior to the date of this Lease, since the date of such financial
statements there has been no material adverse change in the financial condition of the Lessee.




The Lessee shall be deemed to repeat the representations in Clause 19.2 (other than (e)
(Insolvency), (f) (No default), (g) (Litigation), (i) (Taxes), (j) (Environment) and (k)
(Accounts)) on each day of the Lease Term.




Page 20









 








20. Termination Events




20.1 Lessor Termination Events



For the purpose of this Lease, the occurrence of any of the following events after the Substantial
Completion Date shall be a “Lessor Termination Event”:





	(a)  	Non-payment: the Lessee does not pay on the due date any amount payable by it under this
Lease unless the non-payment is remedied within 10 Business Days of written notice by the
Lessor;
	 
	(b)  	Misrepresentation: a representation or warranty made or repeated by the Lessee in a
Transaction Document is incorrect in any material respect when made or repeated and would
adversely affect the rights of the Lessor under this Lease;
	 
	(c)  	Girardin Law’s benefits: any event which results in the withdrawal or deprivation of the DGI
Final Approval;
	 
	(d)  	Total Loss: a Total Loss occurs;
	 
	(e)  	Abandonment: an Abandonment occurs;
	 
	(f)  	Unlawfulness: it becomes unlawful for the Lessee to perform or comply with any of its
obligations under this Lease or any other Transaction Document;
	 
	(g)  	Insolvency proceedings or winding up: the Lessee:






	 	(i)  	is in a state of suspension of payment (cessation des paiements),
has stopped making payments, has given up, by way of payment, a large part of its
assets to its creditors or has entered into a voluntary agreement (accord
amiable) with some of its creditors which relates to the refinancing of a large
part of its indebtedness;
	 
	 	(ii)  	becomes subject to a voluntary arrangement procedure (procédure de
règlement amiable) or a judicial recovery proceeding (procédure de redressement
judiciaire) (and the administrator (administrateur judiciaire) nominated in
relation with this proceeding refuses (or is deemed to have refused) the
continuation of any one of the Transaction Documents to which the Lessee is a
party); or
	 
	 	(iii)  	becomes subject to a voluntary or mandatory winding-up;






	(h)  	Insurance: either:






	 	(i)  	the Lessee fails to obtain and maintain, or cause to be obtained
and maintained, the Insurance Policies in accordance with Clause 12; or
	 
	 	(ii)  	any insurer cancels either of the Insurance Policies described in
Clause 12.1(a) or Clause 12.1(b),




Page 21









 












	 	   	provided that such failure shall not constitute a Lessor Termination Event if it
continues for a period of not more than fifteen (15) Business Days (such period being
extended to twenty (20) Business Days to the extent that the Lessee is in good faith
seeking to replace or reinstate any Insurance Policy);





(i) Environmental proceedings:





	 	(i)  	a judicial proceeding is taken against the Lessor and/or the Lessee
in relation to the Assets with respect to environmental damages in an amount
exceeding EUR 50,000,000 which is not contested in good faith by either the
Lessor and/or the Lessee as relevant (it being understood that the Lessee may
intervene if not named in the proceeding to ensure that the proceeding is being
contested), or, if it is contested in good faith, where such contestation is
still pending after:






	 	(A)  	in the case of a proceeding against the Lessee, five years from
its initiation; or
	 
	 	(B)  	in the case of a proceeding against the Lessor, two years from
its initiation,






	 	   	except where an expert of international standing appointed jointly by the Parties
has delivered an opinion that such judicial proceeding has no realistic prospect of
success;






	 	(ii)  	a judicial proceeding is taken against the Lessee in relation to
any of its other material assets being part of the Plant with respect to
environmental damages in an amount exceeding EUR 150,000,000 and which:






	 	(A)  	is not contested in good faith by the Lessee (unless such
contestation is still pending after five years from its initiation); and
	 
	 	(B)  	would affect the capacity of the Lessee to perform its
obligations under this Lease;






	(j)  	Expropriation and requisition: any of the following occurs:






	 	(i)  	expropriation by any governmental authority or any local public
body acting under governmental authority of all or a substantial part of the
Assets; or
	 
	 	(ii)  	requisition or occupation of all or a substantial part of the
Assets during the Lease Term by any duly-empowered authority or agency for a
period exceeding two years;






	(k)  	Transaction Documents unenforceable or terminated: this Lease or any other Transaction
Document is declared in a final judgment to be unenforceable against any party other than the
Lessor;
	 
	(l)  	Cross-default: any of the following occurs:




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	 	(i)  	a Construction Agreement Termination Event;
	 
	 	(ii)  	an acceleration of the Loan Agreement or the Tax Loan Agreement;
	 
	 	(iii)  	any continuing event of default under any Transaction Document
other than the First Demand Guarantee (as such term is expressly defined under
the relevant Transaction Document); or
	 
	 	(iv)  	an acceleration under, or early termination of, any Transaction
Document (other than the First Demand Guarantee);






	(m)  	Put option: the exercise by the Members of the Put Option pursuant to clause 2.3(b) of the
Put Option Agreement on the Early Option Date;
	 
	(n)  	Cancellation, expiration or withdrawal of operating and building permits: the Operating
Permit or the Building Permit:






	 	(i)  	is finally and conclusively cancelled, expired or withdrawn; or
	 
	 	(ii)  	is suspended for more than 6 months,






	   	and such cancellation, expiration, withdrawal or suspension has the effect of stopping the
operation of the Plant (provided that such final cancellation, expiration, withdrawal or
suspension is not contested in good faith and that if such contestation is initiated, it is
still pending two years from its initiation);






	(o)  	Non-compliance with environmental undertakings: the Lessee does not comply on a continuing
basis with its obligations under Clause 10.1(a) or 10.1(e) (Environmental risks), except:






	 	(i)  	where appropriate, remedial action acceptable to appropriate
regulatory bodies is being taken; or
	 
	 	(ii)  	where compliance requirements are being contested in good faith by
appropriate proceedings (provided that the Lessor may mandate an expert to
determine whether the condition in this exception (ii) is satisfied);






	(p)  	Guarantor Event of Default: the occurrence of a Guarantor Event of Default; or
	 
	(q)  	Non-compliance with DGI Final Approval: the Lessee or Inco, as the case may be, fails to
comply in any material respect with its obligations under the DGI Final Approval which are
under its sole control.





20.2 Lessee Termination Events



For the purpose of this Lease the occurrence of any of the following events after the Substantial
Completion Date shall be a “Lessee Termination Event”:




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	(a)  	Increased Costs, Taxes: the Lessee determines that the consequences to it of its liabilities
in respect of any Increased Cost are excessive;
	 
	(b)  	Lessor breach: a material breach of the Lessor’s covenants under this Lease;
	 
	(c)  	DGI Final Approval: the Lessor is in breach of any material requirement imposed on it by the
DGI Final Approval which is under its sole and direct control;
	 
	(d)  	Variation of Assumptions: the consequences to the Lessee of its liabilities in respect of any
change of calculation following a variation in the Assumptions have become more onerous than
on the Closing Date;
	 
	(e)  	Tax Indemnity: the obligations of the Lessee under the Tax Indemnity have become materially
more onerous than on the Closing Date; and
	 
	(f)  	Unlawfulness: the Lessor receives a notice in accordance with clause 6.1(a) of the Tax Loan
Agreement.





21. Termination 



21.1 The Lease Term may be terminated prior to its scheduled expiry date as set out in this Clause
21.1.





	(a)  	Upon the occurrence of a Lessee Termination Event (other than Lessee Termination Event
referred to in Clause 20.2(f)), the Lessee shall have the right to terminate the Lease Term 45
days after the receipt by the Lessor (with a copy to the Tax Investors) of a written
notification sent by the Lessee stating that such event has occurred (subject to the relevant
Lessee Termination Event continuing unremedied by the Lessor (in the case of Clause 20.2(b) or
20.2(c)) or unwaived by the Lessee).
	 
	(b)  	Upon the occurrence of a Lessee Termination Event referred to in Clause 20.2(f), the Lessor
must immediately notify the Lessee and must keep the Lessee informed of the progress of all
discussions held in accordance with clause 6.1(b) and/or (c) of the Tax Loan Agreement. If
following those discussions, the Lessor is required to make payment of a Take-Out Amount under
the Tax Loan Agreement, then the Lessor must immediately notify the Lessee and the Lease Term
shall terminate automatically 5 days after the receipt by the Lessee of such written
notification sent by the Lessor stating that the Take-Out Amount is required to be paid
(subject to the relevant Lessee Termination Event continuing unremedied by the Lessor or the
Lessee having exercised its rights under Clause 21.4 and 21.5).
	 
	(c)  	Upon the occurrence of a Lessor Termination Event (other than a Lessor Termination Event
referred to in Clause 20.1(d) (Total Loss), Clause 20.1(m) (Put option) or Clause 20.1(q)
(Non-compliance with DGI Final Approval), the Lessor shall have the right to terminate the
Lease Term 45 days after the receipt by the Lessee (with a copy to the Guarantors) of a
written notification sent by the Lessor stating that such event has occurred (subject to the
relevant Lessor Termination Event continuing unremedied by the Lessee or unwaived by the
Lessor).




Page 24









 












	(d)  	Upon the occurrence of a Total Loss the Lessor shall have the right to terminate the Lease
Term six months after the receipt by the Lessee (with a copy to the Guarantors) of a written
notification sent by the Lessor stating that such event has occurred unless:






	 	(i)  	the Lessor has received an undertaking from the Lessee to reinstate
the Assets, together with a plan which sets out the intended replacement and
reconstruction of the Assets;
	 
	 	(ii)  	the Lessor has received written confirmation from the DGI that it
will not withdraw the DGI Final Approval, such confirmation to have been given
subject to the express conditions that:






	 	(A)  	the Lessee reinstates the Assets; and
	 
	 	(B)  	the parties to the Transaction Documents are required to
continue their participation in the transactions described therein (and in
particular, that the Tax Loan Agreement is required to continue in accordance
with its terms); and






	 	(iii)  	the Lessee has paid to the Tax Investors a fee calculated in
accordance with paragraph (6) of Appendix 4 on the basis of the number of the
days between the date of the occurrence of the Total Loss and the date of
completion of reinstatement of the Assets in accordance with the terms of this
Lease.






	(e)  	Upon the occurrence of a Lessor Termination Event referred to in Clause 20.1(m) (Put option),
the Lessor shall have the right to terminate the Lease Term 15 days after the receipt by the
Lessee (with a copy to the Guarantors) of a written notification sent by the Lessor stating
that such event has occurred (subject to the relevant Lessor Termination Event continuing
unremedied by the Lessee or unwaived by the Lessor).
	 
	(f)  	Following the occurrence of a Lessor Termination Event referred to in Clause 20.1(q)
(Non-compliance with DGI Final Approval), the Lessor shall, on giving notice to the Lessee, be
entitled to terminate the Lease Term 6 months after the occurrence of such Lessor Termination
Event provided that neither of the following has occurred within that 6 month period:






	 	(i)  	the Lessee or Inco, as the case may be, remedies the non-compliance
of the DGI Final Approval which caused the Lessor Termination Event pursuant to
Clause 20.1(q) (Non-compliance with DGI Final Approval) to occur; nor
	 
	 	(ii)  	the DGI has not indicated its intention to withdraw the DGI Final
Approval (it being acknowledged that on the occurrence of the Lessor Termination
Event pursuant to Clause 20.1(q) (Non-compliance with DGI Final Approval), the
Lessee will be obliged to notify the DGI as soon as practicable (with a copy to
the Lessor)).






	21.2  	In the event of any termination in accordance with this Clause 21, the provisions of Clause 22
shall apply.




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21.3 If Clause 21.1(a) or Clause 21.1(c) applies then during the 45-day grace period during which
the default may be remedied the Lessee and the Lessor will meet with a view to maintaining the
Transaction and avoiding recapture of the Tax advantages under the DGI Final Approval. If the
Lessee and the Lessor agree on a plan to maintain the Transaction and avoid recapture of the Tax
advantages under the DGI Final Approval, the grace period of 45 days referred to in Clause 21.1(a)
or Clause 21.1(c), as the case may be will be extended in order to allow the implementation of such
plan.



21.4 Upon the occurrence of the Lessee Termination Event set out under Clause 20.2(f) in relation
to an individual Tax Investor, the Lessee will have the option to require the Lessor to expel the
Tax Investor affected by the illegality (if a solution to that Lessee Termination Event is not
found in accordance with clause 6.1(c) of the Tax Loan Agreement) by terminating the Tax Loan
Agreement as far as that Tax Investor is concerned in accordance with Clause 6.1(c) of the Tax Loan
Agreement. If the Lessee chooses to exercise this option it shall notify the Lessor not later than
30 days after receipt of the first notification from the Lessor referred to in Clause 21.1(b). In
such case, the Lessor shall promptly notify the Lessee of the Take-out Amount.



21.5 Subject to the Lessee having paid to the Lessor the Take-Out Amount within 5 Business Days
from the notification of the Take-out Amount by the Lessor to the Lessee, the Lessee Termination
Event will be deemed to have been cured and the Tax Investors not affected by such illegality will
continue to perform their obligations under the Transaction Documents.



21.6 Upon the occurrence of a Lessee Force Majeure event, the Lessee shall notify the Lessor as
soon as practicable (such notification to include details of the relevant event, the likely effect
on the Lessee’s ability to perform its obligations under this Lease and the proposed actions to
mitigate the consequences of the event). The Lessor and the Lessee shall consult with each other
in good faith and use reasonable endeavours to agree appropriate terms to mitigate the effects of
the Lessee Force Majeure event and facilitate the continued performance of this Lease.




22. Payment on Termination – Transfer of Title to the Assets



22.1 On the termination of the Lease Term pursuant to Clause 21, the Lessee shall owe to the
Lessor:





	(a)  	the Termination Value; and
	 
	(b)  	any other amounts in the relevant currencies which are or become due and payable by the
Lessee under this Lease,
	 
	   	together the “Termination Compensation”.




22.2 The Lessee shall pay, or cause the payment of, the Termination Compensation to the Lessor on
the Termination Compensation Payment Date. Any amount of the Termination Compensation not paid on
its due date for payment shall bear interest at a rate per annum equal to LIBOR (if the unpaid
amount is in US$) or at EONIA (if the unpaid amount is in Euro) plus 300 basis points per annum,
calculated on the basis of a 360-day year and the exact number of days elapsed from and including
the due date to and including the actual date of payment. Without prejudice to Clause 22.4, on
payment of the Termination Compensation the Lessor shall




Page 26









 







transfer title to the Assets to the Lessee and the Lessor undertakes to execute any documentation
and take any steps required in order to transfer title to the Assets.





	22.3  	In the event of termination of the Lease Term following any Lease Termination Event (other
than a Lessee Termination Event under Clause 20.2(b) (Lessor breach) or Clause 20.2(c) (DGI Final
Approval)) such Lease Termination Event occurring prior to the fifth anniversary of the Substantial
Completion Date, the Lessee shall post Lessee Collateral, or cause Lessee Collateral to be posted,
for the amount of the Tax Loan Reference TV in the following cases and in accordance with the
provisions of Clause 24:






	(a)  	where the amounts referred to under (a) and (b) of the definition of Termination Value are to
be paid on the date falling 6 months after receipt by the Lessor and/or all the Tax Investors
of a notification of recapture from the DGI due to the withdrawal of the DGI Final Approval
(notification de redressement); or
	 
	(b)  	where 9 months after termination of the Lease Term (as referred to in the first paragraph
this Clause 22.3), the Lessor has not received any notification of recapture from the
competent French tax authorities (notification de redressement).




22.4 On the Termination Date the Lessor shall sell the Assets to the Lessee subject to a retention
of title (vente avec clause de réserve de propriété), with the payment of the Termination
Compensation pursuant to this Clause 22 as full consideration for such sale. The retention of
title (vente avec clause de réserve de propriété) shall be released on full and final payment of
the Termination Compensation, it being understood that the posting of Lessee Collateral does not
constitute full and final payment of the Termination Compensation.



22.5 The Lessor shall transfer the Assets under the ordinary de facto and legal terms and
conditions without any warranty to be offered by the Lessor, acting in its capacity as the seller
and with its contents and in the “as is” condition of the Assets as at the date of such transfer.



22.6 The Lessee shall bear all the costs, duties, levies and Taxes in respect of the termination of
the Lease Term and the transfer of Assets, and the title thereto.



22.7 If the Lessee fails to comply with its obligations under Clause 22 when due for performance,
the Lessor shall have available to it all remedies available under this Lease and at law.




23. Add-Back Indemnity




23.1 General Principles and Computation



The Lessee shall indemnify and hold harmless the Lessor or any Member (as the case may be) against
any Add-Back Loss (the “Add-Back Indemnity”).




Page 27









 








23.2 Payment of Add-Back Indemnity



If any Add-Back Indemnity shall be payable as part of the Termination Compensation then that
Add-Back Indemnity shall be paid on the Termination Compensation Date unless Lessee Collateral in
an amount not less than the Tax Loan Reference TV has been posted.



For the avoidance of doubt and without prejudice to the obligation of the Lessee to post Lessee
Collateral as provided for under Clause 24, the Add-Back Indemnity will at no time be payable by or
on behalf of the Lessee unless the Lessor, the Lessee and the Security Agent have received a copy
of each of:





	(a)  	the payment request (demande de paiement avec avis de mise en recouvrement) by the competent
French tax authorities, indicating the amount to be paid in accordance with such request or,
in the absence of the payment request by virtue of a tax loss position of a Tax Investor,
final notification from the competent tax authorities of the amount disallowed by the
competent tax authorities (notification de redressement); and
	 
	(b)  	the letter by which the competent French tax authorities notified withdrawal of the DGI Final
Approval (retrait d’agrément).





23.3 Exclusions



The provisions of Clauses 23.1 and 23.2 shall not apply to, and the amount thereof shall exclude
any loss incurred or sustained by the Lessor, which is directly caused by (and only to the extent
that such loss is directly caused by):





	(a)  	the gross negligence (faute intentionnelle) or wilful misconduct (dol) of any Tax Investor or
any Member;
	 
	(b)  	any failure of a Tax Investor to make or abandon its Tax Advances in accordance with the Tax
Loan Agreement;
	 
	(c)  	any breach by a Tax Investor or a Member of any requirement imposed on it by the DGI Final
Approval that is under its sole control; or
	 
	(d)  	any material breach by the Lessor of its covenants under this Lease,




it being understood that the exclusions will apply only to that Tax Investor or that Member which
has defaulted as provided under Clauses 23.3 (a) to (d) and not to the other Tax Investors or other
Members.



The provisions of Clause 23.1 shall not apply to, and the amount thereof shall exclude any loss
incurred or sustained by the Lessor which has already been compensated by the payment of the
Termination Compensation.




23.4 Conduct of claims





Page 28









 







So long as the Lessee Collateral has not been released pursuant to Clause 24.1(d)(ii) or Clause
24.1(d)(iii), the Lessee shall have full rights, at its election and at its own cost, to control
the conduct of any proceedings with respect to any claims under the indemnities in this Clause 23,
with the Lessor to provide full cooperation with such proceedings and claims, provided that the
Lessee and/or Inco as the case may be shall keep the Lessor fully informed of the conduct of such
proceedings and shall, where reasonably practicable, consult with the Lessor regarding the conduct
of such proceedings.




The Lessee shall provide the Lessor with copies of all correspondence with the DGI in respect of
such proceedings.




23.5 Specification




For the avoidance of doubt, it is specified that when a claim is made and paid under this Clause
23, the same claim will not give rise to another payment pursuant to clause 20.4(a) of the
Construction Agreement. Further, notwithstanding any other provision of this Clause 23, this Clause
23 (other than this Clause 23.5) shall only be in effect after (but not including) the Substantial
Completion Date, except to the extent required to give effect to Clause 20.4(a) of the Construction
Agreement prior to the Substantial Completion Date.




24. Collateralisation




24.1 General Principles of Collateralisation





	(a)  	Procedures for Posting Lessee Collateral






In the event the Lessee is required to post Lessee Collateral under Clause 22.3, it shall
post, or shall cause to be posted, Lessee Collateral in an amount at least equal to the Tax
Loan Reference TV by no later than the Termination Compensation Payment Date.




In connection with the posting of any Lessee Collateral, the Lessee shall provide an opinion
of counsel addressed to the Lessor to the effect that the means of posting constitutes a
valid security interest over such Lessee Collateral (or similar opinion taking into account
the mechanism used to post the Lessee Collateral). In addition, the chief financial officer
of the Lessee shall provide a certificate of solvency in favour of the Lessor.




	(b)  	Lessee Collateral may be posted by or on behalf of the Lessee






When Lessee Collateral is required to be posted under this Lease, it may be posted by the
Lessee or by a third party in its name and on its behalf.




	(c)  	Use of Lessee Collateral






The Security Agent shall be authorised and directed by the Lessor to apply the Lessee
Collateral in satisfaction of any Add-Back Indemnity upon receipt (by the Security Agent or
the Lessor) of:



Page 29




 









 









	 	(i)  	a copy of the payment request (demande de paiement avec avis de
mise en recouvrement) by the competent French tax authorities, indicating the
amount to be paid in accordance with such request or, in the absence of the
payment request by virtue of a tax loss position of a Tax Investor, final
notification from the competent tax authorities of the amount disallowed by the
competent tax authorities (notification de redressement); and
	 
	 	(ii)  	a letter by which the competent French tax authorities notified
withdrawal of the DGI Final Approval (retrait d’agrément.






	(d)  	Release of Lessee Collateral






The Security Agent shall be required by the Lessor to release Lessee Collateral (or any part
remaining after discharge of any amounts in respect of which such Lessee Collateral was
posted) on the earliest to occur of:




	 	(i)  	full and final discharge of the amounts payable under the Add-Back
Indemnity;
	 
	 	(ii)  	the first anniversary of the date of posting of the Lessee
Collateral, if by such date no request stating the amount of recapture (avis de
mise en recouvrement) has been issued by the competent French tax authorities;
and
	 
	 	(iii)  	if no notification of recapture (notification de redressement) is
issued by the competent French tax authorities, the date falling 9 months after
the date of posting of the Lessee Collateral,






such date being the “Lessee Collateral Release Date”.




	(e)  	Maximum amount of collateral






The Parties acknowledge and agree that the Lessor will not be entitled to receive the
benefit of any form of collateral in accordance with this Lease (by way of insurance
proceeds or a letter of credit in under Clause 12.3 or as Lessee Collateral) which in total
exceeds the Tax Loan Reference TV. Accordingly, if the Lessee (or the Security Agent on
behalf of the Lessee) receives:




	 	(i)  	the value of any insurance proceeds pursuant to Clause 12.3(a)(v)
or Clause 12.3(a)(vi) or of any letter of credit pursuant to Clause 12.3(a)(iv)
or Clause 12.3(a)(vi); and/or
	 
	 	(ii)  	any Lessee Collateral posted in accordance with this Lease,






at any point in time to the value of the Tax Loan Reference TV, notwithstanding any
provision of this Lease, the Lessor will have no further entitlement to any insurance
proceeds pursuant to Clause 12.3(a)(v) or Clause 12.3(a)(vi) or of any letter of credit
pursuant to Clause 12.3(a)(iv) or Clause 12.3(a)(vi) or any Lessee Collateral.




	(f)  	Investment of Lessee Collateral





Page 30




 









 









The Security Agent shall be required by the Lessor to purchase Eligible Investments with the
Lessee Collateral unless the Security Agent is unable to do so in which case the Security
Agent shall be required by the Lessor to consult with the Lessee in order to agree how the
Lessee Collateral should be invested. Income arising from the Lessee Collateral (including
any Eligible Investments) but excluding Taxes (if any) payable on such income shall form
part of the Lessee Collateral.



25. Indemnification




25.1 General Indemnity





	 (a)   	Subject to Clause 25.1(b), (c), (d) and (e), the Lessee hereby agrees at all times to
indemnify and hold harmless the Lessor for any Loss (including any environmental claim and any
amounts which the Lessor is required to pay to any Tax Investor under clause 12 of the Tax
Loan Agreement) other than in respect of Taxes, which the Lessor or any Member at any time
suffers or incurs, in its capacity as owner of the Assets or Member (respectively), as a
result of any third party claim (including but not limited to any claim by subcontractors) and
as confirmed by an executory judgment despite appeal (jugement exécutoire malgré l’appel) or a
final judgment (jugement ayant acquis l’autorité de la chose jugée) it being understood that
the Lessee shall be consulted as to any decision to file or not any appeal and should take the
final decision whether or not to file such appeal (each such Loss covered by the indemnity
under this Clause 25.1 being an “Operational Loss”) including, but not limited to:






	 	(i)  	arising directly or indirectly out of or in any way connected with
the purchase, manufacture, ownership, possession, transportation, construction,
management, import, export, storage, insurance, sale, control, use or operation,
design, condition, testing, delivery, leasing, subleasing, maintenance, repair,
service, modification, overhaul, replacement, removal or redelivery of the Assets
or any part thereof by the Lessee, the Lessor or any other Person, whether or not
such Loss may be attributable to any defect in the Assets or any part thereof or
to the design, testing or use thereof or to any maintenance, service, repair,
overhaul, or to any other reason (whether similar to any of the foregoing or
not), and regardless of when the same shall arise (whether prior to, during, or
after termination of, the Lease Term); or
	 
	 	(ii)  	arising as a result of any design, article or material in the
Assets or any part thereof or the operation or use thereof constituting or being
alleged to constitute an infringement of any patent, copyright, design or other
proprietary right; or
	 
	 	(iii)  	in relation to preventing or attempting to prevent the arrest,
confiscation, seizure, taking in execution, impounding, forfeiture or detention
of the Assets, or in securing the release of the Assets.






	 (b)   	The indemnification amount (the “Indemnification Amount”) in respect of an Operational Loss
incurred or sustained by the Lessor shall be equal to:






	 	(i)  	the amount of such Operational Loss; less





Page 31




 









 









	 	(ii)  	the net amount (after deducting the reasonable costs or expenses to
the Lessor in collecting such amount and any Taxes) paid to the Lessor by any
insurer or third party in respect of such Loss; less
	 
	 	(iii)  	the amount of any actual reduction in Taxes, or other costs or
expenses of the Lessor resulting from such Loss; plus
	 
	 	(iv)  	in the event of any cost resulting from Taxes imposed by New
Caledonia, France, the State of Delaware, Canada or any other country in which
the Lender (or successor or assign) or a New Participant is incorporated and
actually borne or incurred by the Lessor by reason of the receipt or accrual of
indemnity payments under this Lease, by such additional amount as shall be
necessary to ensure that the Lessor actually receives an amount equal to the
amount it would have received had no such costs been imposed.






	(c)  	If, after an Indemnification Amount is paid to the Lessor:






	 	(i)  	the Lessor receives from an insurer or a third party any amount in
respect of such Operational Loss; or
	 
	 	(ii)  	the Lessor realises any benefit resulting from such Operational
Loss that, in each case, would have reduced the Indemnification Amount paid in
respect of such Operational Loss pursuant to Clause 25.1(b)(ii) or Clause
25.1(b)(iii); or
	 
	 	(iii)  	the executory judgment despite appeal on the basis of which the
Lessor has received indemnification, is partially or totally invalidated or the
appeal decision confirming such judgment, if any, is invalidated and the Lessor
receives any amount in this regard,






then the Lessor shall without delay repay to the Lessee, as applicable, the net amount so
received or the benefit so realised.




If, as a result of an executory judgment despite appeal (jugement éxecutoire malgré appel),
the Lessor has made payments to the third party by means of funds made available to it by
the Lessee and such payments could be refundable by such third party as a result of a final
judgment, the Lessor shall immediately transfer and assign to the Lessee its claim on the
third party resulting from such final judgment.




	(d)  	The Lessee shall pay any Indemnification Amount to the Lessor upon receipt of documentation
supporting that Indemnification Amount.






	(e)  	The provisions of this Clause 25.1 shall not apply to, and the Indemnification Amount shall
exclude amounts relating to, any loss incurred or sustained by the Lessor, which is directly
caused by (and only to the extent that such loss is directly caused by):






	 	(i)  	the gross negligence (faute intentionnelle) or wilful misconduct
(dol) of any Tax Investor or any Member;





Page 32




 









 









	 	(ii)  	any failure of a Tax Investor to make or abandon its Tax Advances
in accordance with the Tax Loan Agreement;
	 
	 	(iii)  	any breach by a Tax Investor or a Member of any requirement
imposed on it by the DGI Final Approval that is under its sole control;
	 
	 	(iv)  	any material breach by the Lessor of its covenants under this
Lease; or
	 
	 	(v)  	an imposition on the net income of the Lessor,






it being understood that the exclusions set out in paragraphs (i) to (iv) of this Clause
25.1(e) will apply only to that Tax Investor or that Member which has defaulted as provided
under paragraphs (i) to (iv) of this Clause 25.1(e) and not to the other Tax Investors or
the Members.




	25.2  	Tax Indemnity






	(a)  	The Lessee hereby agrees at all times to indemnify and hold harmless the Lessor for:






	 	(i)  	specified losses, resulting from payment of a new Tax of any kind
or nature, an increase in the rate of an existing Tax other than the rate of
French Corporate Income Tax, or total or partial deprivation of a Tax advantage
or exemption provided for under the DSF Ruling, in each case imposed by New
Caledonia, France, Canada and any other country, or the State of Delaware, in
which the Lender (or successor or assign) or a New Participant is incorporated
where such event is the result of a Change in Law; and






	 	(ii)  	any Tax imposed by New Caledonia which arises from the
non-availability (including as a result of any incorrect or incomplete
assessment) of:






	 	(A)  	the tax treatment set out in the DSF Ruling; or
	 
	 	(B)  	the Tax Agreement,






in each case in respect of this Lease, any of the other Transaction Documents or the Assets,
or any part or interest therein or in respect of any transaction contemplated by this Lease
or any of the other Transaction Documents, including (without limitation) the purchase,
ownership, delivery, leasing, use, possession and operation, import to or export from any
country, return, storage, maintenance, protection, sale, attempted sale or other disposition
of the Assets, or any part or interest therein.




	(b)  	The Parties shall cooperate to find a position to mitigate the Tax consequences of any
incorrect or incomplete New Caledonian tax assessment.






	(c)  	The Lessee shall pay and discharge or cause to be paid or discharged, as soon as the same
become payable all such Taxes and, if requested by the Lessor, produce to the Lessor evidence
of the payment and discharge thereof. The Lessor agrees to provide any documentation required
to effect the payment or discharge on or prior to the due date.





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	(d)  	The provisions of this Clause 25.2 shall not apply to, and the amount of any indemnity shall
exclude any loss incurred or sustained by the Lessor, which is directly caused by (and only to
the extent that such loss is directly caused by):






	 	(i)  	the gross negligence (faute intentionnelle) or wilful misconduct
(dol) of any Tax Investor or any Member;
	 
	 	(ii)  	any failure of a Tax Investor to make or abandon its Tax Advances
in accordance with the Tax Loan Agreement;
	 
	 	(iii)  	any breach by a Tax Investor or a Member of any requirement
imposed on it by the DGI Final Approval that is under its sole control;
	 
	 	(iv)  	any material breach by the Lessor of its covenants under this
Lease; or
	 
	 	(v)  	an imposition on the net income of the Lessor,






it being understood that the exclusions set out in paragraphs (i) to (iv) of this Clause
25.2(d) will apply only to that Tax Investor or that Member who will have defaulted as
provided under paragraphs (i) to (iv) of this Clause 25.2(d) and not to the other Tax
Investors or the Members.




	(e)  	If, after indemnification in respect of Tax has been paid in accordance herewith to the
Lessor, the Lessor receives a Tax credit or refund in respect of such Tax or realises any
benefit resulting from the indemnification of such Tax, then the Lessor shall without delay
repay to the Lessee the net amount of such credit or refund.






	25.3  	Conduct of claims





The Lessee and/or Inco shall have full rights, at its election and at its own cost, to control the
conduct of any proceedings with respect to any claims under the indemnities in this Clause 25, with
the Lessor having to provide full cooperation with such proceedings and claims, provided that the
Lessee and/or Inco as the case may be shall keep the Lessor fully informed of the conduct of such
proceedings and shall, where reasonably practicable, consult with the Lessor regarding the conduct
of such proceedings.





	25.4  	Mitigation





The Lessee and the Lessor shall use their reasonable endeavours to avoid and mitigate all
Operational Losses, Tax Losses and Add-Back Losses, including the Lessee making expenditure of
funds and taking action which results in incurring costs. The Lessor is not obliged to take any
steps under this Clause 25.4 if, in the opinion of the Lessor (acting reasonably), to do so might
require it, or any Member, to expend funds.





	25.5  	Specification





For the avoidance of doubt, it is specified that when a claim is made and paid under Clause 25, the
same claim will not give rise to another payment pursuant to clause 25 of the Construction




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Agreement. Further, notwithstanding any other provision of this Clause 25, this Clause 25 (other
than this Clause 25.7) shall only be in effect after (but not including) the Substantial Completion
Date.





	25.6  	Consequences of syndication





Notwithstanding any provision of this Lease to the contrary, it is agreed that the Lessee shall not
be affected by, or required to contribute to any Loss deriving solely or directly from the
syndication mechanism, as described in the letter from Capstar Partners dated 15 October 2004, as
approved by the DGI on 19 October 2004.





	   	26. Purchase Option





26.1 In accordance with the provisions of Article L.313-7 (second paragraph) of the French Code
Monétaire et Financier, the Lessor hereby undertakes, for the benefit of the Lessee, to sell to the
Lessee, at the election of the Lessee (the “Purchase Option”) the Assets contemplated in this Lease
on the terms set out in this Clause 26.





	26.2  	The Lessee shall be entitled to request the exercise of the Purchase Option:
	 
	(a)  	upon the expiration date of the Lease Term; or
	 
	(b)  	on the fifth (5th) anniversary date of the Substantial Completion Date and
thereafter on each semi-annual anniversary of the Substantial Completion Date.





26.3 The exercise of the Purchase Option must be requested by registered letter with return receipt
requested sent to the Lessor:





	(a)  	no less than twenty (20) days and no more than ninety (90) days in advance, in respect of a
request for exercise between the fifth (5 th ) anniversary of the Substantial
Completion Date and eleventh (11 th ) anniversary of the Substantial Completion Date;
or
	 
	(b)  	three (3) months prior to the expiration date, in respect of a request for exercise upon the
end of the Lease Term.





26.4 The exercise of the Purchase Option is subject to the full and complete performance by the
Lessee of all of its obligations under this Lease that have fallen due for performance by the date
of exercise of the Purchase Option.




26.5 The purchase of the Assets by the Lessee shall be:





	(a)  	recorded under a notarised agreement (to the extent required under Applicable Law in New
Caledonia) and all the charges, duties, levies, Taxes and fees (if any) in connection with
such purchase shall be borne by the Lessee; and
	 
	(b)  	under the ordinary de facto and legal terms and conditions without any warranty to be offered
by the Lessor, acting in its capacity as the seller and with its contents and in the “as is”
condition of the Assets as at the date of such transfer.





Page 35




 









 








The Lessor undertakes to execute any documentation and to take any steps required to effect such
purchase and the transfer of the Assets.




26.6 The purchase price shall be calculated in accordance with Annex 10 of Appendix 3. The Lessor
agrees that the Lessee will be deemed to have paid the amounts described in paragraphs (a) and (b)
of the definition of Termination Value if the Lessee, or another Person acceptable to the Lender,
executes an assumption (novation) of all amounts, whether actual or contingent, payable by the
Lessor to the Lender under the terms of the Loan Agreement (such assumption having been consented
to by the Lender in accordance with Clause 21 of the Loan Agreement).




26.7 It is expressly agreed and understood that the Lessor alone shall be bound by this Purchase
Option, which is accepted by the Lessee as a mere option (promesse).




26.8 For the avoidance of doubt, the Parties agree that upon payment of the purchase price under
Clause 26.6, the Lease Term will terminate.




27. DGI Process




27.1 Upon the earlier of the receipt by the Lessor and/or any Tax Investor or by the Lessee and/or
Inco of:





	(a)  	a notification from the DGI; and
	 
	(b)  	any information, either oral or in writing, to the effect that the DGI is considering
withdrawing the DGI Final Approval and/or a reassessment of all of the Tax Investors in
relation to the transactions contemplated by this Lease and the other Transaction Documents,





(a “Global Reassessment” and the date of such receipt being the “DGI Notice Date”) the Lessor will
promptly notify the Lessee, or the Lessee will promptly notify the Lessor, as the case may be, of
such occurrence and provide details as to the steps which it is considering in relation thereto, in
particular as to any written response it may be required to provide to the DGI (including, where
applicable, providing a written response to the French tax authorities within the prescribed 30-day
period).




27.2 Upon receipt from the DGI of any official notice of the DGI’s decision to withdraw the DGI
Final Approval (notification de retrait d’agrément):





	(a)  	the Lessor and the Lessee shall cooperate in their dealings with the DGI regarding the
withdrawal of the DGI Final Approval (notification de retrait d’agrément);
	 
	(b)  	the Lessee will be entitled to require that the Lessee and Inco shall have the right to
attend all discussions and meetings with the DGI (to the extent permitted by the DGI);
	 
	(c)  	without prejudice to the provisions of Clause 25.3, the Lessee may request, acting reasonably
and in good faith, having due regard to the interests of the Tax Investors and the Lessor,
that the Lessor dispute the withdrawal of the DGI Final Approval by appropriate judicial
proceedings and the Lessor shall not enter into any settlement with





Page 36




 









 









the DGI related to such withdrawal of the DGI Final Approval or Global Reassessment without
the prior written approval of Inco (not to be unreasonably withheld).



The rights of the Lessee and Inco under this Clause 27.2 shall cease on the delivery of a final
non-appealable court decision confirming the withdrawal of the DGI Final Approval.




28. Conditions Precedent




The rights and obligations of the Parties under this Lease are subject to the satisfaction of the
following conditions:





	(a)  	a DGI Final Approval satisfactory to each of the Tax Investors, the Lessee and Inco shall
have been obtained from the DGI;






	(b)  	DSF Ruling satisfactory to each of the Tax Investors, the Lessee and Inco shall have been
obtained from the DSF;






	(c)  	a Canadian tax ruling, satisfactory to the Lessee and Inco shall have been obtained from the
Canadian tax authorities;






	(d)  	the execution of the Transaction Documents acceptable both in form and substance to all
parties to the Transaction Documents;






	(e)  	a legal opinion issued by the Lessee’s metropolitan France counsel with respect to the
corporate status of the Lessee acceptable to all parties to the Transaction Documents;






	(f)  	a legal opinion issued by the counsel of each Guarantor party to the Transaction Documents at
the Closing Date with respect to the corporate status of such Guarantor acceptable to all
parties to the Transaction Documents; for Inco, such opinion may be issued by its internal
lawyer;






	(g)  	a legal opinion issued by the counsel of each Guarantor party to the Transaction Documents at
the Closing Date confirming that the obligations undertaken under the First Demand Guarantee
and the Cautionnement are enforceable against such Guarantor under the laws of its place of
incorporation addressed to the Lessor and the Tax Investors (collectively the “Addressees”) as
well as to the Lessee;






	(h)  	a legal opinion issued by the Lessor’s New Caledonian counsel (a) with respect to the
corporate status of the Lessor and (b) confirming that no provisions of the Transaction
Documents to which the Lessor is party contravenes with New Caledonian laws and regulations,
addressed to and acceptable to all parties to the Transaction Documents;






	(i)  	a legal opinion issued by the Lessor’s metropolitan France counsel confirming that all
Transaction Documents entered into by all parties to the Transaction Documents are legal,
valid and binding in accordance with their terms, addressed to the Addressees and with a copy
to the Lessee who will not be entitled to rely on it; and





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	(j)  	approvals by the boards of directors of each of Inco and the Lessee of the terms of, and the
transactions contemplated by the Transaction Documents.





29. Consent Rights




29.1 Consent Rights Regarding Management of the Lessor




Except where (x) the Lessor is required to do so by law or (y) a Lessor Termination Event has
occurred and is continuing, the Lessor shall obtain the consent of the Lessee prior to undertaking
any of the following events, which consent shall not be unreasonably withheld (each such required
consent being a “Consent Right”):





	(a)  	any changes in the by-laws of the Lessor or any change in the corporate object of the Lessor
(except provisions regarding the new entrance and exit of Tax Investors, the sharing of
interests in the Lessor, provided that this will not affect the “special purpose vehicle”
nature and bankruptcy remoteness of the Lessor);






	(b)  	any sale or encumbrance of any of the Assets or any debt rescheduling other than as
contemplated in the Transaction Documents;






	(c)  	incurrence of any indebtedness or obligations in excess of 30,000 Euro per annum other than
as contemplated by (and in connection with) the Transaction Documents; it being provided that
as regards any liability which may be incurred without the Lessee’s prior consent, the Lessor
shall undertake to cause such liabilities to be extinguished whenever an option is exercised
under the Put Option Agreement or the Call Option Agreement;






	(d)  	any amendment to any of the Transaction Documents subject to the provisions of Clause
29.1(a);






	(e)  	any decision to liquidate the Lessor, enter into insolvency proceedings, corporate
reorganisation, agreement with creditors or similar arrangement or proceeding; and






	(f)  	settlement of litigation or claims.





29.2 Lessor financial information




Upon request, the Lessor will provide its audited annual reports to the Lessee no later than 30
June of each year and will provide its unaudited annual report to the Lessee by not later than 15
February in each year.




The Lessor shall provide a list of the Lessor’s transactions for the most recently completed
financial quarter within 15 days of the end of each such financial quarter.




The Lessor shall also provide such other information regarding the Lessor’s financial condition or
operations as may be reasonably requested by the Lessee in connection with the preparation of
Inco’s or the Lessee’s financial statements. If so required to ensure compliance with Inco
Limited’s regulatory reporting requirements, the Lessee shall be entitled, at its own expense and




Page 38




 









 








upon reasonable notice, to carry out an audit of the Lessor. The Lessee shall ensure that any such
audit is carried out in a manner that minimises disruption to the Lessor.




30. Waiver of Recourse 




30.1 Subject to the Exceptions, the Lessee hereby expressly waives any recourse for any sum,
against the Members, in the event of default by the Lessor in the performance of its obligations
under this Lease.




30.2 The Lessee hereby undertakes to limit any recourse for any sum, against the Lessor to the
Assets and any rights and claims the Lessor may have with respect to the Assets, in the event of
default by the Lessor in the performance of its obligations under this Lease.




30.3 The Lessee acknowledges and agrees that the undertakings contained in this Clause 30
constitute an express, irrevocable waiver of the provisions of article L.251-6 of the French
Commercial Code. In consequence thereof, the Lessee hereby undertakes, subject to the Exceptions,
to refrain from invoking against any or all of the Members, the capacity of Members with liability
on their own assets for the debt of a groupement d’intérêt économique, before any jurisdiction with
respect to the obligations of the Lessor under this Lease.




30.4 The Lessee hereby undertakes to refrain from taking any action (including the filing of any
claim, petition or motion) with a view to the opening of any of the following proceedings against
the Lessor or any or all of the Members:





	(a)  	designation as a debtor unable to pay its debts as and when they become due (cessation de
paiements);
	 
	(b)  	judicial reorganisation (redressement judiciaire) or judicial liquidation (liquidation
judiciaire) pursuant to articles L. 620-1 and subsequent of the French Commercial Code; or
	 
	(c)  	any other action with respect of the insolvency, winding-up, dissolution, administration,
liquidation, rehabilitation, composition, or any equivalent or analogous proceedings in France
or any other jurisdiction or for an arrangement, adjustment, composition, protection or relief
from creditors’ action.





31. Amendments




This Lease may only be amended with the written agreement of each Party.




32. Partial Invalidity




In the event that one of the provisions of this Lease is invalid or becomes impossible to perform,
such event will not affect the validity or performance of any other provision of this Lease.




Page 39




 









 








33. Confidentiality




The Parties shall treat the terms of this Lease and all information provided under or in connection
with the Transaction, this Lease and each other Transaction Document (“Confidential Information”)
as confidential and shall not disclose Confidential Information without the prior written consent
of the other Party, save that consent shall not be required for disclosure:





	(a)  	to directors, employees or affiliates of a Party, provided that they in turn are required by
that Party to treat the Confidential Information as confidential in favour of the other Party
on terms substantially the same as those set out in this Clause 33;






	(b)  	to persons professionally engaged by a Party to the extent required in relation to such
engagement, provided that they in turn are required by that Party to treat the Confidential
Information as confidential in favour of the other Party on terms substantially the same as
those set out in this Clause 33;





(c)   to the extent required by any competent authority having jurisdiction over a Party;





	(d)  	to any bank, insurance company, other financial institution or rating agency to the extent
required in relation to the financing or insuring of the business activities of a Party,
provided that the bank, insurance company, or other financial institution or rating agency, as
the case may be, is required by that Party to treat the Confidential Information as
confidential in favour of any of the other Party on terms substantially the same as those set
out in this Clause 33;






	(e)  	to the extent required by any Applicable Law, judicial process or the rules and regulations
of any recognised stock exchange, or to any expert or arbitrator to the extent necessary for
the resolution of any dispute arising under this Lease;






	(f)  	to any intending assignee of the rights and interests of a Party under this Lease or to a
person intending to acquire an interest in a Party or that Party’s affiliate provided that the
intending assignee or acquirer in turn is required by that Party to treat the Confidential
Information as confidential in favour of any of the other Party on terms substantially the
same as those set out in this Clause 33; and






	(g)  	to the extent that the Confidential Information is in or lawfully comes into the public
domain other than by breach of this Clause 33.





34. Choice of Law - Jurisdiction Clause




34.1 This Lease is governed by French law.




34.2 Subject to any specific provisions of this Lease, and to any mandatory legal provisions that
may apply, the Parties agree to submit to the jurisdiction of the relevant courts located within
the geographical jurisdiction of the Cour d’Appel (Court of Appeal) of Paris, in connection with
any and all proceedings and procedures (other than actions in rem).




Page 40





 









 








34.3 In addition, the Courts of Paris shall have exclusive jurisdiction, even in the event of an
impleader (appel en garantie), plurality of defendants or motion on a point of law (demande
incidente).




35. Costs and Expenses




35.1 All the costs, expenses, duties and fees of this Lease arising after the Closing Date, and all
those that may arise in connection with, or as a consequence of, this Lease and incurred after the
Closing Date, shall, to the extent that they are not Implementation Costs, be borne by the Lessee,
which hereby agrees to pay them.




35.2 The Lessee shall pay within 3 Business Days of demand by the Lessor, any amount which the
Lessor is required to pay:





	(a)  	to the Tax Investors:






	 	(i)  	under clause 6.2 (Increased Costs) of the Tax Loan Agreement;
	 
	 	(ii)  	under clause 12 of the Tax Loan Agreement; or
	 
	 	(iii)  	under clause 21 of the Tax Loan Agreement;






	(b)  	to the Lender:






	 	(i)  	in respect of Increased Costs; or
	 
	 	(ii)  	under clause 19 of the Loan Agreement,





provided that the Lessee shall not be required to pay such amounts which is the Lessor is required
to pay if such amounts are Implementation Costs or would not be recoverable by the Lessor under
this Lease.




35.3 All the costs, expenses and Taxes relating to the Lease payable in connection with the
publicity formalities of the Lease to the Tribunal de Commerce shall be borne by the Lessee
together with, if any, any costs, expenses and Taxes relating the publicity formalities to the
local mortgages registry.




36. Notices





	(a)  	Any notice or other communication under, or in connection with, this Lease shall be in
writing and signed by or on behalf of the Party giving it and shall be deemed to have been
properly served if delivered personally, or by post or facsimile transmission to the following
address or facsimile number:






Lessor:




BNP Paribas Nouvelle Calédonie

37 avenue Henri Lafleur

BP K3, 98800 Nouméa cedex, Nouvelle Calédonie



Page 41




 









 









Fax: +687.25.84.59

Attention: Bernard Monteilh




And copied to




BNP Paribas-Capstar Partners

37 place du Marché Saint Honoré

75031 Paris Cedex 01, France

Facsimile number: +33 1 42 98 12 03

Attention: Khalid Ammari





Lessee:




Goro Nickel S.A.

7 bis, rue Suffren, BP218

98845 Nouméa Cedex, New Caledonia

Fax number: +687 273 710

Attention: Président Directeur Général





And copied to


Goro Nickel

38, rue du Colisée

75008 Paris, France

Attention: Directeur Général Délégué

Facsimile number: +33 1 45 63 29 97




And copied to:




Address: Inco Limited

145 King Street West

Toronto, ON, M5H 4B7, Canada

Fax number: +1 416 361 7788

Attention: Office of the Secretary




or to such other address or facsimile number as the recipient may have notified to the other
Party in writing.




	(b)  	Proof of posting or despatch of any notice or other communication shall be deemed to be proof
of receipt:






	 	(i)  	in the case of a letter sent by post, at 10.00 a.m. on the tenth
(10th) Business Day after posting;
	 
	 	(ii)  	in the case of a facsimile transmission, at 10.00 a.m. on the
Business Day immediately following the date of despatch; and





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	 	(iii)  	in the case of a letter delivered by hand, immediately upon
delivery.






	(c)  	References in Clause 36(b)(i) and (ii) to time are to local time in the country of the
addressee.
	 
	(d)  	A Party may notify the other Party of a change to its name, relevant addressee, address or
facsimile number for the purposes of this Clause 36, provided that such notice shall only be
effective on the date specified in the notice as the date on which the change is to take
place; or if no date is specified or the date specified is fewer than five Business Days after
the date on which notice is given, the date which is five Business Days after the date on
which notice of change is given.





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Made and executed in Paris,




In three (3) originals, one of which will be used for the purposes of registration with the
Register of Commerce and Companies.




On December 30, 2004.




	 	 	 
	/s/ Yves Roussel

	 	   /s/ Khalid Ammari
	 
	 	 
	 

	 	 
	 
	 	 
	Goro Nickel S.A.

	 	GNiFi
	 
	 	 
	Name: Yves ROUSSEL

	 	Name: Khalid AMMARI
	 
	 	 
	Position: Directeur Général Délégué

	 	Position:






Page 44





 










 






APPENDIX 1




DEFINITIONS




	 	 	 
	Abandonment

	 	means:







	 	(a)  	at any time after the Substantial Completion
Date, (i) the Lessee voluntarily ceases to perform all or
substantially all operational activities of the Assets
without interruption for a period of 180 days, (ii) the
Lessee issues at the end of such period a notice
addressed to the Lessor (A) informing the Lessor of such
cessation and (B) indicating its intention to either
abandon or resume all or substantially all operational
activities of the Assets (the “Cessation Notice”), (it
being understood that the Lessee undertakes to issue such
Cessation Notice at the end of such period referred to in
part (a)(i) of this definition), and (iii) in the case
where the Lessee has indicated its intention to resume
all or substantially all operational activities of the
Assets, the Lessee has not resumed all or substantially
all operational activities of the Assets within a period
of 180 days of the date of the Cessation Notice. For the
purposes of this definition, the Lessee shall be deemed
not to have voluntarily ceased to perform operational
activities of the Assets if such cessation is caused by
the Lessee Force Majeure ; or
	 
	 	(b)  	as a result of Lessee Force Majeure:






	 	(i)  	the Lessee ceases to perform all or
substantially all operational activities of the Assets
without interruption for a period of 360 days;
	 
	 	(ii)  	the Lessee issues at the end of such period a notice
addressed to the Lessor:






	 	(A)  	informing the Lessor of such cessation; and
	 
	 	(B)  	indicating its intention to either abandon or resume
all or substantially all operational activities of the
Assets (the “FM Cessation 





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	 	   	Notice”),



(it being understood that the Lessee undertakes to
issue such FM Cessation Notice at the end of such period
referred to in part (b)(i) of this definition); and
	 
	 	(iii)  	in the case where the Lessee has indicated its
intention to resume all or substantially all operational
activities of the Assets, the Lessee has not taken
demonstrable steps to resume all or substantially all
operational activities of the Assets within a period of
180 days of the date of the FM Cessation Notice.





	 	 	 
	Add-Back Indemnity

	 	has the meaning given to it in Clause 23 of this Lease.
	 
	 	 
	Add-Back Loss

	 	means the amount determined as:







	 	(a)  	the lesser of (x) the Tax Loan Reference TV and (y)
the amount actually paid by the Tax Investors to the DGI
(excluding interest and penalties) due to the loss of
deductions under Article 217 undecies et duodecies of the
CGI following withdrawal of the DGI Final Approval
(retrait d’agrément); plus
	 
	 	(b)  	penalties and late payment interest (intérêts de
retard), if any, imposed by the French tax authorities,





	 	 	 
	

	 	excluding for the purposes of the calculation of (y) any
amount paid or incurred by a Tax Investor, as the case
may be, to the DGI due to the loss of deductions under
Article 217 undecies et duodecies of the CGI following
withdrawal of the DGI Final Approval (retrait d’agrément)
to the extent that the Tax Investor was required to pay
such amount as a direct result of:







	 	(i)  	the gross negligence (faute intentionnelle) or wilful
misconduct (dol) of such Tax Investor;

	 
	 	(ii)  	
any failure of such Tax Investor to make or abandon
its Tax Advances in accordance with the Tax Loan
Agreement; or
	 
	 	(iii)  	any breach by such Tax Investor of any





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requirement
imposed on it by the DGI Final Approval that is under its
sole control,



	 	 	 
	

	 	in each case which occurred prior to the relevant Lease
Termination Event.






	 	 	 
	Administrative
	 	 
	Authorisations

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	Appendix

	 	means an appendix to this Lease.
	 
	 	 
	Applicable Law

	 	means, with respect to any Person or any property or
asset, all laws, ordinances, codes, rules, regulations,
orders, writs, injunctions, decrees or rulings of any
governmental authority and all governmental
authorisations applicable to or binding on such Person
(or its properties or assets) or to such property or
asset from time to time.
	 
	 	 
	Assets

	 	means the assets listed in Appendix 2 and any equipment
or assets which are comprised in the assets listed in
Appendix 2.
	 
	 	 
	Assumptions

	 	means the assumptions set out in Appendix 3.
	 
	 	 
	Authorised Activities

	 	has the meaning given to it in Clause 5.1.
	 
	 	 
	Building Permit

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	Business Day

	 	means a day, other than a Saturday or Sunday, on which
banks are open for general business in Paris, Nouméa,
Toronto and New York, and (on any day on which it is
necessary to calculate EONIA) Brussels and (on any day on
which it is necessary to calculate LIBOR) London.
	 
	 	 
	Call Option Agreement

	 	means the agreement so named between each Member, Inco
and the Lessee dated on or about the date of this Lease.
	 
	 	 
	Cautionnement

	 	means the cautionnement solidaire dated on or about the
date of this Lease between Inco and the Security Agent
(on behalf of the Lessor) and each other cautionnement
solidaire entered into pursuant to that cautionnement
solidaire.
	 
	 	 
	CGI

	 	means the Code Général des Impôts.






Page 47




 









 








	 	 	 
	Change in Law

	 	means any change in, deletion from, amendment or addition
to or introduction of, any Applicable Law or regulation
or official directive or any change in the interpretation
or administration of any thereof by any court, tribunal
or other binding competent authority in each case from
that existing as at the date of this Lease.
	 
	 	 
	Clause

	 	means a clause of this Lease.
	 
	 	 
	Closing Date

	 	means 30 December 2004.
	 
	 	 
	Consent Right

	 	has the meaning given to it in Clause 29.1.

	 
	 	 
	Construction

Agreement

	 	means the construction agreement
dated on or about the date of this Lease between the Lessor (as owner) and the
Lessee (as project manager).
	 
	 	 
	Construction

Agreement

Termination Event

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	Contractor

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	Definitive

Acceptance

Certificate

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	Delegations

	 	means each of the Rentals Delegation and the Termination
Value Delegation.
	 
	 	 
	DGI

	 	means the French Direction Générale des Impôts.
	 
	 	 
	DGI Final Approval

	 	means the letter from the DGI to BNP Paribas-Capstar
Partners dated 30 December 2004 and the decision
(decision d’ agrément) attached thereto, as set out in
Appendix 9, together with the other decisions referred to
in such letter and decision.
	 
	 	 
	Disclosure Letter

	 	means the letter from Inco to, among others, the Lessor
dated on or about the date of this Lease.
	 
	 	 
	DSF

	 	means the Direction des Services Fiscaux of New Caledonia.
	 
	 	 
	DSF Ruling

	 	means the letter dated 7 December 2004 issued by the DSF
to the Lessee under designation number CS04-7000-000597.






Page 48




 









 








	 	 	 
	Early Option Date

	 	has the meaning given to it in the Put Option Agreement.
	 
	 	 
	Eligible Investments

	 	means:







	 	(a)  	debt securities denominated in Euro issued or fully
guaranteed or fully insured by any of the United States
of America, France or Canada, having maturities of 12
months or less from the date of acquisition which are
rated at least A-1 by Standard & Poor’s Ratings Group and
P-1 by Moody’s Investors Service, Inc.;






	 	(b)  	certificates of deposit of, or time deposits or
overnight bank deposits denominated in Euro with, any
commercial bank whose short-term securities are rated at
least A-1 by Standard and Poor’s Rating Group and P-1 by
Moody’s Investors Service, Inc. having maturities of 12
months or less from the date of acquisition;






	 	(c)  	commercial paper of, or money market accounts or
funds denominated in Euro with or issued by, an issuer
rated at least A-1 by Standard & Poor’s Ratings Group and
P-1 by Moody’s Investors Service, Inc. and having
maturities of 12 months or less from the date of
acquisition (provided that an investment in any one such
company, money market or fund, may not exceed 10,000,000
Euro);






	 	(d)  	medium term fixed or floating rate notes denominated
in Euro of an issuer rated at least A-1 by Standard &
Poor’s Rating Group and P-1 by Moody’s Investors Service,
Inc. at the time of acquisition and having maturities of
six months or less from the date of acquisition;





	 	(e)  	such other securities (if any) as may be agreed
between the Lessor and the Lessee.





	 	 	 
	Environmental Law

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	EONIA (European

	 	means:
	Overnight Index
	 	 





	Average)	(a)  	on any Business Day, the percentage rate per annum
determined by the Fédération Bancaire de l’Union
Européenne (FBE) displayed on the Telerate screen at page
247 (or on any other page which replaces it) at 19h00
(Brussels time) on the relevant Business




Page 49




 









 









	 	   	Day (in
Brussels) during which deposits in Euro are offered on
the Euro–Zone interbank market; or






	 	(b)  	in the case that on any given Business Day, the
average set out in paragraph (a) above is not displayed,
the average daily rate determined by the Tax Investors
Agent, equal to the arithmetic average, rounded upwards
to the 1/16th of one per cent. of the rates
which have been communicated by at least two of the
Reference Banks and which are trading on the interbank
market in Paris at 11h00 on that Business Day quoted to
lending banks in the European interbank market for the
offering of deposits in Euro.





	 	 	 
	Equipment

	 	means any item of equipment or machinery which is part of
the Assets.
	 
	 	 
	Euro

	 	means the lawful currency of the member states of the
European Union that have adopted or that adopt the single
currency in accordance with the treaty establishing the
European Community, as amended by the Treaty on European
Union.
	 
	 	 
	Exception

	 	has the meaning given to it in the Intercreditor
Agreement.
	 
	 	 
	Final Completion Date

	 	has the meaning given to it in the Construction Agreement.

	 
	 	 
	First
Demand
Guarantee

	 	means the first demand guarantee dated on or about the
date of this Lease between the Security Agent (on behalf
of the Tax Investors) and Inco and each other first demand guarantee
entered into pursuant to that first demand guarantee.
	 

	 	
	 
	 	 
	French Civil Code

	 	means the French Civil Code in effect and as it may be
lawfully amended.
	 
	 	 
	French Commercial

Code

	 	means the French Commercial Code in effect and as it may
be lawfully amended.

	 
	 	 
	French Corporate

Income Tax

	 	 means any tax, contribution or assessment levied by
France on the Taxable Base or other corporate net income
of a Person (other than an individual) with a registered
place of business in metropolitan France (expressing such
additional contributions or assessments as a percentage rate on such Person’s Taxable Base or on the corporate
income tax itself).






Page 50




 









 








	 	 	 
	General Indemnity

	 	means the indemnity provisions set out in Clause 25.1 of
this Lease.
	 
	 	 
	Girardin Law



Guarantor

	 	means the French tax legislation relating to Dom-Tom
investments.




means Inco and each New Participant.
	 
	 	 
	Guarantor Event of
Default

	 	has the meaning given to it in the First Demand Guarantee.
	 
	 	 
	Hazardous Material

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	Implementation Costs

	 	has the meaning given to it in the Tax Loan Agreement.
	 
	 	 
	Inco

	 	means Inco Limited, a Canadian corporation having its
registered office at 145 King Street West, Toronto, ON,
M5H 4B7, Canada.
	 
	 	 
	Increased Cost

	 	has the meaning given to it in the Loan Agreement.
	 
	 	 
	Indemnification

Amount

	 	has the meaning given to it in Clause 25.1(b).
	 
	 	 
	Indemnities

	 	means together the General Indemnity, the Tax Indemnity
and the Add-Back Indemnity, and “Indemnity” means any of
them.
	 
	 	 
	Insurance
Policies



Intercreditor

Agreement

	 	means the insurance policies
specified in Clause 12.1.




means the agreement so named dated on or about the date
of this Lease between, among others, the Lessor, the
Lessee, each Tax Investor, each Member, the Lender, each
Guarantor and the Security Agent.
	 
	 	 
	Interest
Payment Date



Land

	 	has the meaning given to it in the Loan Agreement.




means the real property in New Caledonia on which the
Assets are to be located.
	 
	 	 
	Lease Assignment

	 	means the assignment, dated on or about the date of this
Lease, between the Lessee and the Lessor, of the rights
and obligations over the Land as vested in the Lessee
under the Long-term Lease.
	 
	 	 
	Lease Term

	 	has the meaning given to it in Clause 2.2.
	 
	 	 
	Lease Termination

	 	means a Lessee Termination Event or a Lessor Termination






Page 51




 









 








	 	 	 
	Event

	 	Event.
	 
	 	 
	Lender

	 	means Goro Funding, LLC, a limited liability company
formed under the laws of the State of Delaware.
	 
	 	 
	Lessee Collateral

	 	means a cash deposit into an account in the name of the
Security Agent on behalf of the Lessor subject to the
terms of a gages espèces in form and substance
satisfactory to the Lessor.
	 
	 	 
	Lessee Collateral

Release Date

	 	has the meaning set out in Clause 24.1(d).
	 
	 	 
	Lessee Force Majeure

	 	means:







	 	(a)  	the concept of force majeure such as defined under
French law and construed under French jurisprudence,
being an unforeseeable (“imprévisible”), external
(“extérieur”) event or circumstance that is beyond the
control of the Lessee which it could not have avoided or
overcome (irrésistible) and which makes it impossible for
the Lessee to construct and/or operate all or
substantially all of the Assets and including, without
limitation, events such as for example climatic events,
civil war, revolution, acts of war or terrorism;
	 
	 	(b)  	the events mentioned in the DGI Final Approval
including unforeseeable major technological and technical
difficulties beyond the control of the Lessee and Inco
provided that such difficulties are confirmed by an
independent expert; or
	 
	 	(c)  	strikes.





	 	 	 
	Lessee Termination

Event

	 	has the meaning given to it in Clause 20.2.
	 
	 	 
	Lessor

	 	has the meaning given to it in the Preamble.
	 
	 	 
	Lessor Adminstrators

	 	means the administrators of the Lessor as appointed under
its by-laws.
	 
	 	 
	Lessor Termination

Event

	 	has the meaning given to it in Clause 20.1.






Page 52




 









 








	 	 	 
	LIBOR

	 	means:







	 	(a)  	the British Bankers Association Interest Settlement
Rate for the offering of deposits in US$ for the relevant
period as displayed on the appropriate page of the
Telerate screen at 11.00 (London time) on the relevant
Business Day; or
	 
	 	(b)  	if no rate is available on Telerate for US$ for the
relevant period, the average daily rate determined by the
Tax Investors Agent, equal to the arithmetic average,
rounded upwards to the 1/16th of one per cent.
of the rates which have been communicated by at least two
of the Reference Banks and which are trading on the
interbank market in London at 11.00 (London time) on that
Business Day quoted to lending banks in the London
interbank market for the offering of deposits in US$.





	 	 	 
	Lien

	 	means, with respect to the Assets (whether consensual or
not or arising from contract, law or otherwise), any
mortgage, lien, pledge, impediment, inscription on a
public record of the nature of a security interest or any
other type of security interest or lien of any kind
relating to the Assets.
	 
	 	 
	Loan Agreement

	 	means the agreement so named dated on or about the date
of this Lease between the Lender, as lender, and the
Lessor, as borrower.
	 
	 	 
	Long-term Lease

	 	means the “bail emphytéotique” dated 7 December 2004
between the Lessee, as lessee, and New Caledonia, as
lessor.
	 
	 	 
	Loss



Member

	 	means any loss, liability, claim, damage, cost or expense.




means each member of the Lessor (or any successor or
assign of such member).
	 
	 	 
	Mortgage

	 	means the mortgage that may be entered into between the
GIE and the Tax Investors on the part of the Long-term
Lease assigned under the Lease Assignment.
	 
	 	 
	New Participant

	 	means a Person who is a “New Participant” as defined
under the First Demand Guarantee and the Cautionnement.
	 
	 	 
	Operational Loss

	 	has the meaning given to it in Clause 25.1.
	 
	 	 
	Operating Permit

	 	has the meaning given to it in the Construction Agreement.






Page 53




 









 








	 	 	 
	Partial Loss

	 	has the meaning given to it in Clause 13.2
	 
	 	 
	Permitted Liens

	 	means:







	 	(a)  	the respective rights and interests of the Parties
and the parties to all contracts referred to in this
Lease;
	 
	 	(b)  	liens of the Public Treasury that are being contested
in good faith and by appropriate proceedings duly
conducted, so long as such proceedings do not: (i)
involve any danger of foreclosure, forfeiture or loss of
the Assets, or any part thereof or interest therein or
any substantial danger of the sale of the Assets or any
parts thereof or interest therein; or (ii) interfere with
the enjoyment, possession or development of the Assets or
any part thereof or rights therein; and
	 
	 	(c)  	the liens of architects, contractors, masons and all
other workmen employed for the construction of the Assets
or for any Work or modifications or arising in the
ordinary course of business for amounts that are not more
than 30 days past due or which are being contested in
good faith by appropriate proceedings.





	 	 	 
	Person

	 	means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust,
unincorporated organisation, governmental entity (whether
or not having separate legal personality).
	 
	 	 
	Plant

	 	means the nickel-cobalt processing plant comprising a
portion of the Project.
	 
	 	 
	Preamble

	 	means the preamble of this Lease which forms an integral
part of this Lease.
	 
	 	 
	Project

	 	means the nickel-cobalt mine, Plant and supporting
infrastructure being constructed, and to be operated, by
the Lessee in the South Province of New Caledonia.
	 
	 	 
	Project Manager

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	Public Treasury

	 	means the Trésor Public.
	 
	 	 
	Purchase Option

	 	has the meaning given to it in Clause 26.1.
	 
	 	 
	Put Option

	 	has the meaning given to it in the Put Option Agreement.






Page 54




 









 








	 	 	 
	Put Option Agreement

	 	means the agreement of that name between each Member,
Inco, and the Lessee dated on or about the date of this
Lease.
	 
	 	 
	Reference Banks

	 	means Société Générale, HSBC-CCF and Natexis Banques
Populaires and such other bank as or banks as may be
appointed as such by the Lessor in consultation with the
Lessee.
	 
	 	 
	Rent

	 	means the rental instalments due by the Lessee to the
Lessor under Clause 6.
	 
	 	 
	Rent Payment Schedule

	 	means the schedule set out in Appendix 5.
	 
	 	 
	Rentals Delegation

	 	means the delegation of claims (acte de délégation
imparfaite) dated on or about the date of this Lease and
entered into between the Lessor, as grantor (délégant),
the Lessee, as delegated debtor (débiteur délégué), and
the Lender as beneficiary (délégataire) pursuant to which
the Lessor delegates the Lessee to the Lender with
respect to the Lessor’s rights and claims relating to the
Rent.

	 
	 	 
	Request for DGI

Final Approval

	 	 means the request for approval of
the Transaction filed with the DGI and pursuant to which the DGI Final Approval
is to be issued.
	 
	 	 
	Security

	 	has the meaning given to it in the Intercreditor
Agreement.
	 
	 	 
	Security Agent

	 	means the security agent appointed by the Tax Investors,
the Lessor and the Lender under the Intercreditor
Agreement and acting for them on their behalf.
	 
	 	 
	Substantial

Completion

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	Substantial

Completion Date

	 	has the meaning given to it in the Construction Agreement.
	 
	 	 
	Take-out Amount

	 	has the meaning given to it in the Tax Loan Agreement.
	 
	 	 
	Tax or Taxes

	 	means all forms of taxation whether direct or indirect
and whether levied by reference to income, profits,
gains, net wealth, asset values, turnover, added value or
other reference and statutory, national or supranational,
governmental, state, provincial, local governmental or
municipal impositions, duties, contributions, rates and
levies (including without limitation customs duties,
social security contributions and any payroll taxes),
whenever and wherever imposed (whether imposed by way of
a withholding or deduction for






Page 55




 









 








	 	 	 
	

	 	or on account of tax or
otherwise) and in respect of any person and all
penalties, charges, costs and interest relating thereto.
	 
	 	 
	Tax Advance

	 	has the meaning given to it in the Tax Loan Agreement.
	 
	 	 
	Tax Agreement

	 	means the country law (loi de pays) of July 2001 together
with the Governmental order of 7th March 2002
and the Certificate of Approval issued pursuant thereto.
	 
	 	 
	Tax Indemnity

	 	means the indemnity provided under Clause 25.2.
	 
	 	 
	Tax Investors

	 	has the meaning given to it in the Tax Loan Agreement.
	 
	 	 
	Tax Investors Agent

	 	has the meaning given to it in the Tax Loan Agreement.
	 
	 	 
	Tax Loan Agreement

	 	means the agreement so named dated on or about the date
of this Lease between the Lessor, the Tax Investors and
the Tax Investors Agent.
	 
	 	 
	Tax Loan Reference TV

	 	means the amount set out in Annex 9 of Appendix 3 in
respect of the Termination Date or, if no amount is set
out in respect of the Termination Date, the amount set
out in Annex 9 of Appendix 3 for the most recent date
prior to the Termination Date (as such amount may be
varied from time to time in accordance with Sections (3)
and (4) of Appendix 4.
	 
	 	 
	Taxable Base

	 	means, for a Person (other than an individual) with a
registered place of business in metropolitan France, the
amount of such Person’s taxable corporate income as
determined in accordance with article 209(I) of the CGI
(or any successor provision thereof) for purposes of
calculation of the amount of Taxes such Person’s
corporate income tax liability under article 219(I) of
the CGI (or any successor provision thereof).
	 
	 	 
	Termination

	 	means the earliest to occur of:
	Compensation Payment

Date
	 	 







	 	(a)  	the date falling 6 months after the date of receipt
by the Lessor of notification of recapture from the DGI
due to the withdrawal of the DGI Final Approval
(Notification de redressement pour retrait d’agrément);
	 
	 	(b)  	the date on which the DGI confirms that it will not
be seeking a withdrawal of the DGI Final Approval;





Page 56



 









 






	 	   	and






	 	(c)  	if the Lessor has not received a notification of
recapture from the competent French tax authorities
(notification de redressement) the date falling 9 months
after the date of termination of the Construction
Agreement or the Lease Term, pursuant to the occurrence
of a Construction Agreement Termination Event or Lease
Termination Event, as the case may be.





	 	 	 
	Termination Date

	 	means the date on which the Lease Term is terminated
following the occurrence of Lease Termination Event.






	 	 	 
	Termination Value

	 	shall be equal to the aggregate of:







	 	(a)  	the outstanding principal amount under the Loan
Agreement as of the Termination Date as set out in
Appendix 6 (payable in US$); plus
	 
	 	(b)  	the accrued and unpaid interest under the Loan
Agreement until the Termination Date should this date not
occur on an Interest Payment Date under the Loan
Agreement and any other amount due under the Loan
Agreement including any breakage costs; plus
	 
	 	(c)  	(except in the case of a Lessee Termination Event
under Clause 20.2(b) (Lessor breach) or Clause 20.2(c))
the Add-Back Loss (as evidenced in the payment request of
the competent French tax authorities (avis de mise en
recouvrement),





	 	 	 
	

	 	in each case:







	 	(i)  	other than (c) above, calculated on the basis of the
values set out in Appendix 6 for the Interest Payment
Date occurring closest to the Termination Compensation
Payment Date (whether occurring before or after such
date); and
	 
	 	(ii)  	after deducting any amount previously paid by the
Lessee under the Indemnities (if any) in respect of the
amounts referred to in paragraphs (a) to (c) of this
definition.





	 	 	 
	Termination Value

	 	means the delegation of claims (acte de délégation






Page 57




 









 








	 	 	 
	Delegation

	 	imparfaite) dated on or about the date of this Lease and
entered into between the Lessor, as grantor (délégant),
the Lessee, as delegated debtor (débiteur délégué), and
the Tax Investors and the Lender, as beneficiaries
(délégataires), pursuant to which the Lessor delegates
the Lessee to the Tax Investors and the Lender with
respect to the Lessor’s rights and claims relating to the
Termination Value and the purchase price under Clause 26.
	 
	 	 
	Total Loss

	 	means:







	 	(a)  	the Assets are completely physically destroyed, or
	 
	 	(b)  	the Assets are destroyed to an extent that it is
deemed more economic to replace rather than repair the
Assets,





	 	 	 
	

	 	and in each case as certified by an expert jointly
appointed by the Lessor and the Lessee.
	 
	 	 
	Transaction

	 	means the transaction comprising:







	 	(a)  	the assignment pursuant to the Lease Assignment;
	 
	 	(b)  	the construction and commissioning of the Assets by
the Lessee, acting as project manager under the
Construction Agreement, and the incremental acquisition
by the Lessor of title to the Assets as they are
constructed, pursuant to the Construction Agreement; and
	 
	 	(c)  	this Lease.





	 	 	 
	Transaction Documents

	 	means this Lease, the Construction Agreement, the Loan
Agreement, the Tax Loan Agreement, the First Demand
Guarantee, the Cautionnement, the Delegations, the Put
Option Agreement, the Call Option Agreement, the
Long-term Lease, the Lease Assignment, the Intercreditor
Agreement and the letter from Inco to the Security Agent
(on behalf of the Lessor) dated on or about the Closing
Date regarding the obligations of the Lender under the
Loan Agreement.
	 
	 	 
	Transfer

	 	has the meaning given to it in Clause 16.






Page 58




 









 








	 	 	 
	TSS

	 	means taxes sur les services imposed in New Caledonia.
	 
	 	 
	US$,
USD and US

Dollars

	 	means the lawful currency for the
time being of the United States of America.
	 
	 	 
	Work

	 	means any works or services to be carried out or provided
with a view to completing and commissioning the Assets.






Page 59




 









 








APPENDIX 2




DESCRIPTION OF THE ASSETS




As set out in appendices 2A, 2B and 2C of the Construction Agreement.




Page 60




 









 








APPENDIX 3




ASSUMPTIONS




The calculations performed in the Annexes 1 to 10 of Appendix 3 are based on the following
assumptions, which are summarised in Annex 0 of Appendix 3:




A. Overall assumptions:





	 	(a)  	Closing Date occurs by 30 December 2004.
	 
	 	(b)  	Construction Costs are USD 511 million (the “Cost Assumption”).
	 
	 	(c)  	Payments of Construction Costs by the Lessor are, for book-keeping purposes, to
be made in Euro based on the Applicable Exchange Rate. The Loan Agreement is denominated
and repayable in USD. Since it will be converted into USD at the same exchange rate as
each Euro instalment under the Construction Agreement, there will not be a change due to
currency exchange rates of the Advances under the Loan Agreement fixed three Business
Days prior to each scheduled date for payment of an Installment under the Construction
Agreement.
	 
	 	(d)  	Assets are delivered to the Lessee on 18 December 2007. (“Expected Substantial
Completion Date”). For the avoidance of doubt, the Lessee’s expectation is to give
notice of the Substantial Completion Date by the end of 2007 .
	 
	 	(e)  	: The conditions applicable to the Transaction are in conformity with the DGI
Final Approval.
	 
	 	(f)  	“Aides Fiscales à l’Investissement”: the Members will be authorised, in
conformity with the provisions of articles 217 undecies and duodecies of the
French Tax Code and by derogation of article 140 octies of Annexe II of the French Tax
Code, to deduct from the tax profit and loss of the fiscal group to which they belong,
respectively for the FYE 2004, 2005, 2006, in proportion to their respective rights in
the results of the Lessor, an amount equal to the Euro amount (based on the Applicable
Exchange Rate) of a maximum Deductible Amount of US$481 million (the “Deductible
Amount”) and further that 100% of the maximum Deductible Amount has been allocated to
the Members. The exchange rate, as agreed by the DGI, will be capped such that 1 USD
will be less than 1.15 EUR.






     The projected annual deductible amounts are:



Page 61




 









 









	 	•  	27 % of the Deductible Amount at the latest in 2004 : USD 129,870,000
	 
	 	•  	33 % of the Deductible Amount at the latest in 2005 : USD 158,730,000
	 
	 	•  	40 % of the Deductible Amount at the latest in 2006 : USD 192,400,000
	 
	 	The projected deduction schedule is set out as Appendix 3 - Annex 1.






	 	(g)  	The interest rate under the Loan Agreement is 7.5 % per annum with interest
charged based on actual days / 360 and forms the basis for the calculation of the
discount rate “ r ” for the calculation of NPVB, PVCFB and the Retrocession Rate, as
provided in Appendix 8. The Loan Agreement schedule is attached as Appendix 3 - Annex 2.
Advances under the Loan Agreement will be drawn on the dates corresponding to each
scheduled date for payment of an Instalment under the Construction Agreement. The Loan
Agreement will have a principal repayment grace period of two and a half years starting
from the Substantial Completion Date.
	 
	 	(h)  	From the Substantial Completion Date, Rent will be paid in arrears under the
Lease for the first time six months after the Substantial Completion Date, and
thereafter semi-annually.
	 
	 	   	The amounts and date of the Rents are stipulated in the Appendix 3 - Annex 3.
	 
	 	   	Each Rent will be comprised of an interest component corresponding to the interest under
the Loan Agreement and of a principal component corresponding to the principal repayment
under the Loan Agreement, subject to the two and one-half year grace period on principal
repayment as set out in the Loan Agreement.
	 
	 	   	If need be, a supplemental rent will be due so as to ensure that the cash balance of
the GIE is zero.
	 
	 	(i)  	No VAT or sales taxes or duties are, or will become, payable in France or New
Caledonia or in respect of the sale of the Assets to the Lessor under the Construction
Agreement, nor will tax under the CGI (other than taxes on income), VAT or sales tax or
duty be assessed upon or in respect of the sale or other disposal of the Assets by the
Lessor.
	 
	 	(j)  	The outstanding amount of the Loan Agreement will be equal to 10 % of the
Construction Costs at the end of the 12th year of the Lease Term. Payment terms of the
Lease will match payment terms of the Loan Agreement. Actual payment terms for the Lease
are subject to change based on the actual terms of the Loan Agreement.
	 
	 	(k)  	Implementation Costs are equal to 3.05 % of the Deductible Amount (as set out in
Appendix 3 – Annex 0). Participation Fees, for purpose of calculation of the PVCFB, are
assumed to be 1.0 % of the Deductible Amount.





Page 62




 









 








B. Assets assumptions:





	 	(a)  	The scheduled dates for payment of an Instalment under the Construction Agreement
by the Lessor to finance the Construction Costs, which is to be comprised of the Tax
Advances and the Advances under the Loan Agreement from Goro Funding, LLC, is:






	 	•  	27 % of the Construction Costs on the 30th of December 2004 : EUR
137,970,000 = USD 511,000,000 x 27 % x 1 EUR / 1USD
	 
	 	•  	33 % of the Construction Costs on the 18th of December 2005 : EUR
168,630,000 = USD 511,000,000 x 33 % x 1 EUR / 1USD
	 
	 	•  	40 % of the Construction Costs on the 18th of December 2006 : EUR
204,400,000 = USD 511,000,000 x 40 % x 1 EUR / 1USD






The amounts and date of the Construction Costs payments are stipulated in the
Appendix 3 - Annex 4.




	 	(b)  	Subject to the exchange rates and French Corporate Income Tax Assumption (see
below in (d)), the Tax Investors will provide Tax Advances, the amounts and dates of which
are stipulated in the Appendix 3 - Annex 5.
	 
	 	(c)  	The Tax Investors will forgive the Tax Advance in accordance, in particular,
with clause 4 of the Tax Loan Agreement at the latest at the fiscal year corresponding
to 5 years from the Substantial Completion Date. At any time before such date, the Tax
Investors may forgive Tax Advances up to an amount not exceeding the net situation of
the Lessor and the Tax Investors for New Caledonian tax purposes at the time
immediately prior to the proposed Tax Advance forgiveness. The balance of the Tax
Advances outstanding on the fifth anniversary of the Substantial Completion Date will
be forgiven at this later date. It is understood that the intent of any proposed Tax
Advance forgiveness prior to the date corresponding to five years from the Substantial
Completion Date is to ensure that the ordinary tax losses of the Lessor and the Tax
Investors for New Caledonian purposes will not otherwise expire. A projected schedule
of Tax Advance forgiveness is joined in Appendix 3 - Annex 6.
	 
	 	   	The “net situation” shall mean the amount of the accumulated tax losses of the Lessor for
New Caledonian tax purposes and the Tax Investors in relation to the Transaction.
	 
	 	(d)  	The rate of French Corporate Income Tax applicable in France (IS) to the Members
is 35.43 % in 2004, 34.93 % in 2005 and 34.43 % in 2006 and thereafter (“French
Corporate Income Tax Assumption”, each tax rate separately “IS Ai”). Moreover, the
company groups to which the Members belong could benefit from the provisions of article
223 of the French Tax Code relative to the tax regime of such company group in existence
at the Closing Date. The projected tax savings of the Members and the projected rate of
French Corporate Income Tax are joined in Appendix 3 - Annex 7.





Page 63




 









 









	 	(e)  	Other Taxes:






The metropolitan VAT rate is of 19.60%. It is assumed that the Implementation Costs, as
well as any other sum due under the Transaction will not be submitted to the metropolitan
VAT rate.




Any other tax, contribution applicable in metropolitan France that could be due by the
Lessor and the Members will be at the exclusive expense of the Lessee.



Page 64




 









 








C. New Caledonian assumptions:





	 	(a)  	The Lessee will benefit from the Tax Agreement. The applicable condition for
New-Caledonian tax purposes results from the letter dated December 7th, 2004
of the DSF of New-Caledonia answering to the request of the Lessee dated December
1st, 2004 (such document is in Appendix 3 - Annex 11).
	 
	 	(b)  	The Lessor will be incorporated in New Caledonia as a Groupement d’Intérêt
Economique (“GIE”), governed by the articles L.251-1 and following of the French
Commercial Code. Its members will be French Metropolitan Corporate Investors. A GIE is a
transparent entity for corporate income tax purposes and its profits are not taxed in
the name of the GIE directly, but its profits are taxable in New Caledonia in the name
of the GIE’s members.
	 
	 	   	The fraction of the negative results of the GIE that corresponds to the differed
considered depreciation (“amortissements régulièrement comptabilisés, mais réputés
différés en période déficitaire”) is not attributed between the Members and is taken into
account in order to determine the results of the first positive result fiscal year of the
GIE.
	 
	 	(c)  	The financial year of the Lessor will end on 31 December in each year.
	 
	 	(d)  	The Rents will be considered for tax purposes as operating profit and the Lessor
will be entitled to depreciate the Assets as the owner thereof.
	 
	 	(e)  	All costs, fees and expenses incurred by the Lessor in relation to the
Transaction Documents (including without limitation the legal and other costs in respect
of preparing the Transaction Documents) will be allowed as a deduction for tax purposes
in the financial year in which they are incurred.
	 
	 	(f)  	The Corporate Tax Rate applicable to the Lessor in New-Caledonia means the tax
rate stipulated in Article 45 of the New-Caledonian Tax Code, as well as any other tax,
contribution or levy, temporary or not, created or that would be created, whatever its
denomination, which basis would be calculated respective to the amount of benefits or
respective to the corporate tax or which would be of a similar nature to the corporate
tax.






It is specified that the Corporate Tax Rate applicable in New-Caledonia for FYE 2004 and
following would be 30 %.




Any New Caledonian corporate tax due by the Members in New-Caledonia would remain at the
expense of the Lessee in accordance with Section 26 of the Lease. In the event of the
Members would have to pay such tax, a supplemental rent would be called upon by the Lessor
taking into account (i) such tax , as well as (ii) any additional tax



Page 65




 









 









resulting from the payment of the tax on the said supplemental rent constituting a taxable
product in the Lessor (“gross-up”).




The projected tax results of the Lessor and the projected Corporate Tax applicable in
New-Caledonia which will be due by the Members are attached in Appendix 3 - Annex 8.




	 	(g)  	F.CFP / Euro Parity: the exchange rate retained is 1 F.CFP = 0.00838 Euro
	 
	 	(h)  	The absence of sale or any other form of transfer of property and, as a result,
the absence of registration duties and any other taxes or duties payable during the
construction of the Assets by Lessee on behalf of the Lessor pursuant to the
Construction Agreement.
	 
	 	(i)  	The absence of registration duties and any other taxes or duties to be paid on
the purchase of equipment, materials and supplies by Lessee on behalf of the Lessor
pursuant to the Construction Agreement followed or not by the “incorporation” of the
equipment, materials and supplies into the main construction, for which the Lessor will
acquire ownership at the same time as the main construction as described above.
	 
	 	(j)  	The absence of registration duties and any other taxes to be paid during the
transfer by Lessee to the Lessor of Assets constructed or acquired by Lessee prior to
and during the suspension of the project.
	 
	 	(k)  	The GIE will account for the Assets for an amount determined pursuant to the
Construction Agreement, i.e. the Construction Costs possibly increased by the Cost
Overruns.
	 
	 	(l)  	The Lease will be subject to a nominal registration duty of 4,000 FCFP, if the
Members are solely financial institutions or companies held at least 95% by these
financial institutions.
	 
	 	(m)  	The Lender is not liable to tax in New Caledonia.
	 
	 	(n)  	The Lease will not be characterized as a sale.
	 
	 	(o)  	The absence of T.S.S. (Taxe de Solidarité sur les Services, current rate at 4 %)
or any other duty or tax (whether I.R.C.D.C. or other) on the:






	 	(1)  	Construction Costs possibly increased by the Cost Overruns, invoiced by the
Lessee to the Lessor pursuant to the Construction Agreement (for the construction and
the delivery of a portion of the Plant fitted with the equipment necessary for its
operation, whether or not such equipment becomes immovable by destination or
incorporation);





Page 66




 









 









	 	(2)  	Rents and other amounts (i.e., the part of Rents corresponding to the
indemnification of the Lessor or the Tax Investors provided for by the Lease) due
under the Lease that will be paid to the Lessor by the Lessee;
	 
	 	(3)  	interest due by the Lessor to the Lender pursuant to the Loan Agreement and
paid by means of the Rent paid directly by the Lessee to the Lender pursuant to the
Rent Delegation), as the passing of a governmental decree is being contemplated in
order to extend to the Lessor the T.S.S. exemption currently granted to the Lessee
pursuant to article Lp 45 bis 3-4° of the Taxation Code;






	 	(p)  	T.S.S. will be due on the Implementation Costs.
	 
	 	(q)  	No T.O.F. (Taxe sur les Opérations Financières, current rate at 6 % rate) will be
due.
	 
	 	(r)  	The Delegation shall not have any tax consequences.
	 
	 	(s)  	The Lessor will be allowed to:






(i) account for and amortize all of the Assets, as one element, according to the
declining balance method over 12 years commencing as of the Substantial Completion
Date,




(ii) deduct the interest under the Loan Agreement as well as expenses to set up
the Transaction, and




(iii) deduct any commission or fee payable.




	 	(t)  	The payments made by the Lessor to the Lessee during the Construction Period,
pursuant to the Construction Agreement, will not attract any particular tax liability
and will not be construed as a non-interest bearing loan.
	 
	 	(u)  	The price set at one Euro for the acquisition by the Lessee of the statutory
rights of the Lessor shall not be questioned as long as the net situation of the Lessor
at the time of purchase of the rights is negative or nil, and the only registration
duty payable shall be the fixed duty of 4,000 F CFP.
	 
	 	(v)  	The forgiveness by the Tax Investors of their Tax Advances for the benefit of
the Lessor, with regard the Tax Loan Agreement, constitute a forgiveness of a financial
nature which is exempted from T.S.S.
	 
	 	(w)  	That no mortgage tax is payable in the event that the Mortgage entered into, if
the Tax Investors are exclusively financial institutions. Only the salary of the public
administration’s mortgage holder (salaire du conservateur des hypothèques) will be
payable on the recorded amount and will be computed as follows [(recorded amount x
0.0672%) + 1,209.6 FCFP] / 2.
	 
	 	(x)  	The application of Article Lp. 45 bis-9 II of the Tax Code to the Tax Advances
provided by the Tax Investors:





Page 67




 









 









	 	(i)  	the possibility for the Lessor to neutralise latent foreign
exchange gain or losses that may arise from Loan Agreement denominated in USD
granted by the Lender, and
	 
	 	(ii)  	the possibility for the Lessor to neutralise latent foreign
exchange gain or losses that may arise from the Tax Advance, and to recognise
these gains or losses only at their term, i.e. when they shall be forgiven.






	 	(w)  	The indemnities paid by the Lessee or reimbursed by the Lessee to Inco or to any other
shareholders of the Lessee to compensate the Lessor or the Tax Investors:






	 	•  	for the liability of the Lessor or of the Tax Investors for unexpected costs
resulting from a claim made by a third party relating to the construction, the
operation or the ownership of the Plant,
	 
	 	•  	for an increase in the existing taxes or the creation of a new tax or for the
denial of a tax benefit or of a currently available exemption,
	 
	 	•  	for the questioning, totally or partly, of the impossibility to make the
deductions allowed by virtue of the Girardin Law,
	 
	 	•  	and, generally, that any indemnity paid in order to compensate a loss for which
the parties agreed that it needs to be indemnified,






will be deductible from the tax result of the Lessee, and will not be taxable for the
Lessor if the Lessor pays out the indemnity to the Tax Investors, and will not be
subject to T.S.S.




	 	(y)  	No tax is payable in New Caledonia on any potential capital gain that might be
realized by the Tax Investors in the event of a transfer of their statutory rights in
the Lessor;
	 
	 	(z)  	The registration duties and taxes resulting from the following operation are
nominal: the partial sale by the Lessee to Lessor of its rights under the Long-term
Lease (liability for a 7% registration duty calculated on an amount equal to eight
times the annual rent and expenses, the 0.30% mortgage tax and the salary of the public
administration mortgage holder on the same basis as that used for calculating the
registration duties), considering the nominal amounts provided for both the rent under
the Long-term Lease and the acquisition price.
	 
	 	(aa)  	     The stabilisation system provided for by article Lp 45 bis 5 of the Tax Code
concerns equally the taxes or duties mentioned in the Tax Code and the custom duties
and import taxes.
	 
	 	(bb)  	     The provisions under which the results of the Lessor will be allocated among
the Members as provided under its by-laws shall not be questioned.
	 
	 	(cc)  	     That the Members/Tax Investors will not be subject to IFA in New Caledonia
(currently at a level of 100,000 F.CFP).
	 
	 	(dd)  	     As the Lease Term is less than 18 years in length, the Lease is not subject to
mortgage registration.





Page 68




 









 









	 	(ee)  	Supplemental rents for any centimes additionnels payable by the Lessor pursuant to article 872 of the
Tax Code in respect of business tax (“Contribution sur les patentes”) and pursuant to articles 872 and article 897
of the Tax Code in respect of property tax (see Article 3 of the
Government Order - Appendix 3 - Annex 11).





Page 69





 










 






Appendix 3 - Annex 0







	Corporate Investors Scheme closing Decembre 2004 Schema GIE de bangues mis en place
fin decembre 2004 Principal postponement of 2y + 10 % RV
Cout de Construction initial (hors taxe) / Initial Construction Cost (tax excluded) 501 000 000 USD
Commission to GNi / Commission a GNi Exchange rate EUR / USD Cout de Construction initial 10 000 00 USD i.e. 1,99601%
(TVA exclue) / Initial Construction Cost(VAT excluded) plus Cost Overrun / Depassement de 1,000 511 000 000 Euros 0 Euros pour : 0,0%
Cout paid at Delivery Cout de Construction Total (TVA exclue) / Total Construction Cost(VAT 511000000 Euros
excluded) 30-dec-04
Debut de construction 27,0% soit Euros 137970000 33,0%
Acompte 2004 / Construction 2004 Acompte 2005 / Construction 2005 Acompte 2006 / soit Euros 168 630 000 40,0%
Construction 2006 Date de Livraison / Substantial Completion Date            soit Euros 204400000 18-dec-07
Base de defiscalisation Eligible base Taux de defiscalisation “Pons Act” 100,00% soit Euros 511 000 000
deduction Deduction des abandons des Avances 0 1 94,13% soit Euros 481 000 000 481 000
impot sur les societes FR a 3,0% 3,3% Corporate Tax rate 000 USD NON 35,43% en 2004 34,93%
in Fiance en 2005 i 34,43% a partir de 2006
Plafonnement/Cap EUR I USD TSS (NC)Depot (deposit) GNi Depot Garanti (subordinated deposit) Non 4,00%
(GNi) Remuneration soit Euros 0 0,00% soit Euros 0 0,00% fan
Duree damortissemenf/Depreciation period Coeffic. d’amortissement/Depreciation coefficient 12 ans degressif 2,5
Impot sur les societes NC/Corporate Tax rate in NC TVA (VAT) Nouvelle Caledonie 30% 0,00%
Echeancier des loyers / Rents schedule Premier loyer semestriel (first rent)
Progressivite des loyers
Encours du Pret / Outstanding Debt at year 12 Option d’achat / Call option Value at year 12
Duree de location / Lease Term semestriel 29644182,49 Euros par semestriel
Taux pret bancaire / Debt Interest rate 10,00% soit Euros 51 100 000 10,00%
Taur de sortie sur 5 ans / IRR (5 years) soit Euros 51 100 000 12 ans /years
Reduction de cout GNi : NPVB fin 2004 Quote part GNi / Gain fiscal Global Taux 7,50% (taux de reference) 3,86% I’an
dactualisation (r) 3,79% semestriel Underwriting 28,10%
Apport des investisseurs net / Nef Equity 2004 (% MD) Apport des investisseurs net / Nef 100% 8 28,10%
Equity 2005 (% MD) Apport des investisseurs net / Nef Equity 2006 (% MD) 65% 9
Implementation Costs upfront / Frais de Transaction frontaux(*) Implementation Costs 28,10% 65% a
spreaded / Frais de Transaction etales (*) 0,00% soit Euros 0 2,75%
Frais juridique, Frais de gestion du GIE / Legal Fee, GIE Administration Fee (upfront) (*) soit Euros 13 227 500
(*) projected in % of Deductible Amount / previsionnellernent en % du Montant Deductible 0,30% soit Euros 443 000 14 670 500






Page 70









 








Appendix 3 - Annexe 1.




Projected Deductible Amounts







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Exchange Rate	 	 	 	 	 
	 	 	 	 	Deductible Amount	 	 	 	Assumption	 	 	 	Deductible Amount
	FYE	 	 	 	in USD	 	 	 	1 EUR = USD	 	 	 	in EUR
	 	 	 	 	 	 	 	 	 	 
	2004
	 	 	 	129 870 000,00	 	 	 	 	1,00	 	 	 	 	129 870 000,00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2005
	 	 	 	158 730 000,00	 	 	 	 	1,00	 	 	 	 	158 730 000,00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2006
	 	 	 	192 400 000,00	 	 	 	 	1,00	 	 	 	 	192 400 000,00	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	481 000 000,00	 	 	 	 	 	 	 	 	 	481 000 000,00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 








Page 71









 






Appendix 3 - Annexe 2.




Projected Loan Agreement schedule




Amount in USD







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Loan	 	 	 	Principal	 	 	 	 	 	 	 	 	 	 	 	 	 	Principal	 
	Date	 	 	Interest	 	 	 	Beg.	 	 	 	Drawing	 	 	 	Reimbursement	 	 	 	Outstanding	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	30/12/04
	 	 	 	 	 	 	 	 	 	 	 	 	 	104 626 454,70	 	 	 	 	 	 	 	 	 	104 626 454,70	 
	15/06/05
	 	 	 	0,00	 	 	 	 	104 626 454,70	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	104 626 454,70	 
	18/12/05
	 	 	 	-7 694 403,86	 	 	 	 	104 626 454,70	 	 	 	 	131 214 925,16	 	 	 	 	 	 	 	 	 	235 841 379,86	 
	15/06/06
	 	 	 	0,00	 	 	 	 	235 841 379,86	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	235 841 379,86	 
	18/12/06
	 	 	 	-17 933 771,59	 	 	 	 	235 841 379,86	 	 	 	 	167 655 615,59	 	 	 	 	 	 	 	 	 	403 496 995,45	 
	15/06/07
	 	 	 	0,00	 	 	 	 	403 496 995,45	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	403 496 995,45	 
	18/12/07
	 	 	 	-30 682 584,03	 	 	 	 	403 496 995,45	 	 	 	 	30 682 584,03	 	 	 	 	 	 	 	 	 	434 179 579,48	 
	18/06/08
	 	 	 	-16 553 096,47	 	 	 	 	434 179 579,48	 	 	 	 	 	 	 	 	 	 	 	 	 	 	434 179 579,48	 
	18/12/08
	 	 	 	-16 553 096,47	 	 	 	 	434 179 579,48	 	 	 	 	 	 	 	 	 	 	 	 	 	 	434 179 579,48	 
	18/06/09
	 	 	 	-16 462 642,39	 	 	 	 	434 179 579,48	 	 	 	 	 	 	 	 	 	 	 	 	 	 	434 179 579,48	 
	18/12/09
	 	 	 	-16 553 096,47	 	 	 	 	434 179 579,48	 	 	 	 	 	 	 	 	 	 	 	 	 	 	434 179 579,48	 
	18/06/10
	 	 	 	-16 462 642,39	 	 	 	 	434 179 579,48	 	 	 	 	 	 	 	 	 	-13 181 540,10	 	 	 	 	420 998 039,38	 
	18/12/10
	 	 	 	-16 050 550,25	 	 	 	 	420 998 039,38	 	 	 	 	 	 	 	 	 	-13 593 632,24	 	 	 	 	407 404 407,14	 
	18/06/11
	 	 	 	-15 447 417,10	 	 	 	 	407 404 407,14	 	 	 	 	 	 	 	 	 	-14 196 765,38	 	 	 	 	393 207 641,76	 
	18/12/11
	 	 	 	-14 991 041,34	 	 	 	 	393 207 641,76	 	 	 	 	 	 	 	 	 	-14 653 141,15	 	 	 	 	378 554 500,61	 
	18/06/12
	 	 	 	-14 432 390,34	 	 	 	 	378 554 500,61	 	 	 	 	 	 	 	 	 	-15 211 792,15	 	 	 	 	363 342 708,46	 
	18/12/12
	 	 	 	-13 852 440,76	 	 	 	 	363 342 708,46	 	 	 	 	 	 	 	 	 	-15 791 741,73	 	 	 	 	347 550 966,73	 
	18/06/13
	 	 	 	-13 177 974,16	 	 	 	 	347 550 966,73	 	 	 	 	 	 	 	 	 	-16 466 208,33	 	 	 	 	331 084 758,40	 
	18/12/13
	 	 	 	-12 622 606,41	 	 	 	 	331 084 758,40	 	 	 	 	 	 	 	 	 	-17 021 576,07	 	 	 	 	314 063 182,32	 
	18/06/14
	 	 	 	-11 908 229,00	 	 	 	 	314 063 182,32	 	 	 	 	 	 	 	 	 	-17 735 953,49	 	 	 	 	296 327 228,83	 
	18/12/14
	 	 	 	-11 297 475,60	 	 	 	 	296 327 228,83	 	 	 	 	 	 	 	 	 	-18 346 706,89	 	 	 	 	277 980 521,94	 
	18/06/15
	 	 	 	-10 540 094,79	 	 	 	 	277 980 521,94	 	 	 	 	 	 	 	 	 	-19 104 087,70	 	 	 	 	258 876 434,25	 
	18/12/15
	 	 	 	-9 869 664,06	 	 	 	 	258 876 434,25	 	 	 	 	 	 	 	 	 	-19 774 518,43	 	 	 	 	239 101 915,81	 
	18/06/16
	 	 	 	-9 115 760,54	 	 	 	 	239 101 915,81	 	 	 	 	 	 	 	 	 	-20 528 421,95	 	 	 	 	218 573 493,87	 
	18/12/16
	 	 	 	-8 333 114,45	 	 	 	 	218 573 493,87	 	 	 	 	 	 	 	 	 	-21 311 068,03	 	 	 	 	197 262 425,83	 
	18/06/17
	 	 	 	-7 479 533,65	 	 	 	 	197 262 425,83	 	 	 	 	 	 	 	 	 	-22 164 648,84	 	 	 	 	175 097 776,99	 
	18/12/17
	 	 	 	-6 675 602,75	 	 	 	 	175 097 776,99	 	 	 	 	 	 	 	 	 	-22 968 579,74	 	 	 	 	152 129 197,25	 
	18/06/18
	 	 	 	-5 768 232,06	 	 	 	 	152 129 197,25	 	 	 	 	 	 	 	 	 	-23 875 950,43	 	 	 	 	128 253 246,82	 
	18/12/18
	 	 	 	-4 889 655,04	 	 	 	 	128 253 246,82	 	 	 	 	 	 	 	 	 	-24 754 527,45	 	 	 	 	103 498 719,37	 
	18/06/19
	 	 	 	-3 924 326,44	 	 	 	 	103 498 719,37	 	 	 	 	 	 	 	 	 	-25 719 856,05	 	 	 	 	77 778 863,32	 
	18/12/19
	 	 	 	-2 965 319,16	 	 	 	 	77 778 863,32	 	 	 	 	 	 	 	 	 	-77 778 863,32	 	 	 	 	0,00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	-332 236 762	 	 	 	 	 	 	 	 	 	434 179 579	 	 	 	 	-434 179 579	 	 	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 








Page 72









 






Appendix 3 - Annexe 3.




Projected Rents




Amount in USD







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Interest	 	 	 	Principal	 	 	 	Total	 
	Date	 	 	Component	 	 	 	Component	 	 	 	Rent	 
	 	 	 	 	 	 	 	 	 	 
	30/12/04
	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 
	15/06/05
	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 
	18/12/05
	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 
	15/06/06
	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 
	18/12/06
	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 
	15/06/07
	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 
	18/12/07
	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 
	18/06/08
	 	 	 	16 553 096,47	 	 	 	 	 	 	 	 	 	16 553 096,47	 
	18/12/08
	 	 	 	16 553 096,47	 	 	 	 	 	 	 	 	 	16 553 096,47	 
	18/06/09
	 	 	 	16 462 642,39	 	 	 	 	 	 	 	 	 	16 462 642,39	 
	18/12/09
	 	 	 	16 553 096,47	 	 	 	 	 	 	 	 	 	16 553 096,47	 
	18/06/10
	 	 	 	16 462 642,39	 	 	 	 	13 181 540,10	 	 	 	 	29 644 182,49	 
	18/12/10
	 	 	 	16 050 550,25	 	 	 	 	13 593 632,24	 	 	 	 	29 644 182,49	 
	18/06/11
	 	 	 	15 447 417,10	 	 	 	 	14 196 765,38	 	 	 	 	29 644 182,49	 
	18/12/11
	 	 	 	14 991 041,34	 	 	 	 	14 653 141,15	 	 	 	 	29 644 182,49	 
	18/06/12
	 	 	 	14 432 390,34	 	 	 	 	15 211 792,15	 	 	 	 	29 644 182,49	 
	18/12/12
	 	 	 	13 852 440,76	 	 	 	 	15 791 741,73	 	 	 	 	29 644 182,49	 
	18/06/13
	 	 	 	13 177 974,16	 	 	 	 	16 466 208,33	 	 	 	 	29 644 182,49	 
	18/12/13
	 	 	 	12 622 606,41	 	 	 	 	17 021 576,07	 	 	 	 	29 644 182,49	 
	18/06/14
	 	 	 	11 908 229,00	 	 	 	 	17 735 953,49	 	 	 	 	29 644 182,49	 
	18/12/14
	 	 	 	11 297 475,60	 	 	 	 	18 346 706,89	 	 	 	 	29 644 182,49	 
	18/06/15
	 	 	 	10 540 094,79	 	 	 	 	19 104 087,70	 	 	 	 	29 644 182,49	 
	18/12/15
	 	 	 	9 869 664,06	 	 	 	 	19 774 518,43	 	 	 	 	29 644 182,49	 
	18/06/16
	 	 	 	9 115 760,54	 	 	 	 	20 528 421,95	 	 	 	 	29 644 182,49	 
	18/12/16
	 	 	 	8 333 114,45	 	 	 	 	21 311 068,03	 	 	 	 	29 644 182,49	 
	18/06/17
	 	 	 	7 479 533,65	 	 	 	 	22 164 648,84	 	 	 	 	29 644 182,49	 
	18/12/17
	 	 	 	6 675 602,75	 	 	 	 	22 968 579,74	 	 	 	 	29 644 182,49	 
	18/06/18
	 	 	 	5 768 232,06	 	 	 	 	23 875 950,43	 	 	 	 	29 644 182,49	 
	18/12/18
	 	 	 	4 889 655,04	 	 	 	 	24 754 527,45	 	 	 	 	29 644 182,49	 
	18/06/19
	 	 	 	3 924 326,44	 	 	 	 	25 719 856,05	 	 	 	 	29 644 182,49	 
	18/12/19
	 	 	 	2 965 319,16	 	 	 	 	26 678 863,32	 	 	 	 	29 644 182,49	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
	 	 	 	275 926 002	 	 	 	 	383 079 579	 	 	 	 	659 005 582	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 








Page 73









 






Appendix 3 - Annexe 4.




Projected Construction Agreement schedule of payments







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Payment	 	 	 	Exchange Rate	 	 	 	Payment	 
	 	 	 	(all taxes whatever included)	 	 	 	Assumption	 	 	 	(all taxes whatever included)	 
	Date	 	 	in EUR	 	 	 	1 EUR = USD	 	 	 	in USD	 
	 	 	 	 	 	 	 	 	 	 
	30/12/04
	 	 	 	137 970 000,00	 	 	 	 	1,00	 	 	 	 	137 970 000,00	 
	15/06/05
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/05
	 	 	 	168 630 000,00	 	 	 	 	1,00	 	 	 	 	168 630 000,00	 
	15/06/06
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/06
	 	 	 	204 400 000,00	 	 	 	 	1,00	 	 	 	 	204 400 000,00	 
	15/06/07
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/07
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/08
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/08
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/09
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/09
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/10
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/10
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/11
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/11
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/12
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/12
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/13
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/13
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/14
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/14
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/15
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/15
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/16
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/16
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/17
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/17
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/18
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/18
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/06/19
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	18/12/19
	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	511 000 000,00	 	 	 	 	 	 	 	 	 	511 000 000,00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 








Page 74









 






Appendix 3 - Annexe 5.




Projected Tax Advances







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	O/w	 	 	 	O/W	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	o/w	 	 	 	o/w	 	 	 	 	 	 	 	 	 	 
	 	 	 	Principal	 	 	 	 	 	 	 	 	Net Tax	 	 	 	Implementation	 	 	 	 	 	 	 	 	Principal	 	 	 	Exchange Rate	 	 	 	Principal	 	 	 	 	 	 	 	 	Net Tax	 	 	 	Implementation	 	 	 	 	 	 	 	 	Principal	 
	 	 	 	Bag.	 	 	 	Drawing	 	 	 	Advance	 	 	 	Costs and TSS	 	 	 	Forgiveness	 	 	 	Beg.	 	 	 	Assumption	 	 	 	Beg.	 	 	 	Drawing	 	 	 	Advance	 	 	 	Costs and TSS	 	 	 	Forgiveness	 	 	 	Beg.	 
	Date	 	 	in EUR	 	 	 	in EUR	 	 	 	in EUR	 	 	 	in EUR	 	 	 	in EUR	 	 	 	in EUR	 	 	 	1 EUR= USD	 	 	 	in USD	 	 	 	in USD	 	 	 	in USD	 	 	 	in USD	 	 	 	in USD	 	 	 	in USD	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	30/12/04
	 	 	 	 	 	 	 	 	40 064 895,00	 	 	 	 	33 343 545,30	 	 	 	 	6 721 349,70	 	 	 	 	0,00	 	 	 	 	40 064 895,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	40 064 895.00	 	 	 	 	33 343 545,30	 	 	 	 	6 721 349,70	 	 	 	 	0,00	 	 	 	 	40 064 895,00	 
	15/06/05
	 	 	 	40 064 895,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	40 064 895,00	 	 	 	 	1,00	 	 	 	 	40 064 895,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	40 064 895,00	 
	18/12/05
	 	 	 	40 064 895,00	 	 	 	 	48 968 205,00	 	 	 	 	45 109 478,70	 	 	 	 	3 858 726,30	 	 	 	 	0,00	 	 	 	 	89 033 100.00	 	 	 	 	1,00	 	 	 	 	40 064 895,00	 	 	 	 	48 968 205,00	 	 	 	 	45 109 478,70	 	 	 	 	3 858 726.30	 	 	 	 	0,00	 	 	 	 	89 033 100,00	 
	15/06/06
	 	 	 	89 033 100,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	89 033 100,00	 	 	 	 	1,00	 	 	 	 	89 033 100,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	89 033 100,00	 
	18/12/06
	 	 	 	89 033 100.00	 	 	 	 	59 355 400,00	 	 	 	 	54 678 156,00	 	 	 	 	4 677 244.00	 	 	 	 	0,00	 	 	 	 	148 388 500.00	 	 	 	 	1,00	 	 	 	 	89 033 100,00	 	 	 	 	59 355 400,00	 	 	 	 	54 678 156,00	 	 	 	 	4 677 244.00	 	 	 	 	0,00	 	 	 	 	148 388 500,00	 
	15/06/07
	 	 	 	148 388 500,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	148 388 500,00	 	 	 	 	1,00	 	 	 	 	148 388 500,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	148 388 500,00	 
	18/12/07
	 	 	 	148 388 500.00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	-80 439 607,26	 	 	 	 	67 948 892,74	 	 	 	 	1,00	 	 	 	 	148 388 500,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	-80 439 607,26	 	 	 	 	67 948 892.74	 
	18/06/08
	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 	 	 	 	1,00	 	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 
	18/12/08
	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 	 	 	 	1,00	 	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 
	18/06/09
	 	 	 	67 948 892.74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 	 	 	 	1,00	 	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 
	18/12/09
	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 	 	 	 	1,00	 	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 
	18/06/10
	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	67 948 892.74	 	 	 	 	1,00	 	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 
	18/12/10
	 	 	 	67 948 892.74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	67 948 892.74	 	 	 	 	1,00	 	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 
	18/06/11
	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 	 	 	 	1,00	 	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 
	18/12/11
	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 	 	 	 	1,00	 	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 
	18/06/12
	 	 	 	67 348 892,74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	67 948 892,74	 	 	 	 	1,00	 	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	67 948 892.74	 
	18/12/12
	 	 	 	67 948 892,74	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	-67 948 892.74	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	67 348 892,74	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	-67 948 892,74	 	 	 	 	0,00	 
	18/06/13
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/12/13
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/06/14
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/12/14
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	19/06/15
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/12/15
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	19/06/16
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	000	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/12/16
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/06/17
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/12/17
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/06/18
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	16/12/18
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/06/19
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	18/12/19
	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	1,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 	 	 	 	0,00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
	 	 	 	 	 	 	 	 	148 388 500	 	 	 	 	133 131 180	 	 	 	 	15 257 320	 	 	 	 	-148 388 500	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	148 388 500	 	 	 	 	133 131 180	 	 	 	 	15 257 320	 	 	 	 	-148 338 500	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 









Page 75









 






Appendix 3 - Annexe 6.




Projected Tax
Advance Forgiveness




Amount in EUR




	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	Tax Loan Forgiveness	 	 
	 	 	 	 	in EUR	 	 
	 	FYE	 	 	(for 100 %)	 	 
	 	 	 	 	 	 
	 	2004
	 	 	 	0,00	 	 
	 	2005
	 	 	 	0,00	 	 
	 	2006
	 	 	 	0,00	 	 
	 	2007
	 	 	 	80 439 607,26	 	 
	 	2008
	 	 	 	0,00	 	 
	 	2009
	 	 	 	0,00	 	 
	 	2010
	 	 	 	0,00	 	 
	 	2011
	 	 	 	0,00	 	 
	 	2012
	 	 	 	67 948 892,74	 	 
	 	 	 	 	 	 
	 	Total
	 	 	 	148 388 500,00	 	 
	 	 	 	 	 	 





Page 76




 









 








Appendix 3 - Annexe 7.




Projected Deductible Amounts and Tax Savings of the Members




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Projected Tax	 	 
	 	 	 	 	 	 	 	 	 	Exchange Rate	 	 	 	 	 	 	 	 	 	 	 	 	 	Saving of the	 	 
	 	 	 	 	Deductible Amount	 	 	 	Assumption	 	 	 	Deductible Amount	 	 	 	Projected French	 	 	 	Members in EUR (for	 	 
	 	      FYE	 	 	in USD	 	 	 	1 EUR = USD	 	 	 	in EUR	 	 	 	Corporate Tax Rate	 	 	 	100%)	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	2004
	 	 	 	129 870 000,00	 	 	 	 	1,0000	 	 	 	 	129 870 000,00	 	 	 	 	35,43%	 	 	 	 	46 017 270,00	 	 
	 	2005
	 	 	 	158 730 000,00	 	 	 	 	1,0000	 	 	 	 	158 730 000,00	 	 	 	 	34,93%	 	 	 	 	55 449 680,00	 	 
	 	2006
	 	 	 	192 400 000,00	 	 	 	 	1,0000	 	 	 	 	192 400 000,00	 	 	 	 	34,43%	 	 	 	 	66 249 733,33	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	    Total
	 	 	 	481 000 000,00	 	 	 	 	 	 	 	 	 	481 000 000,00	 	 	 	 	 	 	 	 	 	167 716 683,33	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





Page 77




 









 








Appendix 3 - Annexe B.



Projected taxable results of the Lessor in New-Caledonia and corporate tax




Amount in
F.CFP                                                                        0,008380




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Tax Result	 	 	 	Cumulated Tax Result	 	 	 	Tax rate	 	 	 	CorporateTax	 	 
	 	 	 	 	in F.CFP	 	 	 	in F.CFP	 	 	 	in	 	 	 	in F.CFP	 	 
	 	FYE	 	 	(for 100 %)	 	 	 	(for 100 %)	 	 	 	New-Caledonia	 	 	 	(for 100 %)	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	2004
	 	 	 	-802 070 369,93	 	 	 	 	-802 070 369,93	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2005
	 	 	 	-1 378 655 149,89	 	 	 	 	-2 180 725 519,82	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2006
	 	 	 	-2 698 211 884,63	 	 	 	 	-4 878 937 404,45	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2007
	 	 	 	4 878 937 404,45	 	 	 	 	0,00	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2008
	 	 	 	-12 483 305 295,90	 	 	 	 	-12 483 305 295,90	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2009
	 	 	 	-9 770 261 253,62	 	 	 	 	-22 253 566 549,52	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2010
	 	 	 	-4 619 956 779,62	 	 	 	 	-26 873 523 329,14	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2011
	 	 	 	-2 743 139 892,59	 	 	 	 	-29 616 663 221,73	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2012
	 	 	 	6 916 146 995,50	 	 	 	 	-22 700 516 226,23	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2013
	 	 	 	125 104 995,38	 	 	 	 	-22 575 411 230,85	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2014
	 	 	 	1 244 318 367,72	 	 	 	 	-21 331 092 863,12	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2015
	 	 	 	1 731 143 809,27	 	 	 	 	-19 599 949 053,85	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2016
	 	 	 	2 088 189 674,51	 	 	 	 	-17 511 759 379,34	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2017
	 	 	 	2 480 920 989,92	 	 	 	 	-15 030 838 389,42	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2018
	 	 	 	2 899 384 117,98	 	 	 	 	-12 131 454 271,44	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	2019
	 	 	 	12 131 454 271,44	 	 	 	 	0,00	 	 	 	 	30	%	 	 	 	0,00	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Total	 	 	 	0,00	 	 	 	 	 	 	 	 	 	 	 	 	 	 	0,00	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





Page 78





 









 






Appendix 3 – Annexe 9 Projected Reference Termination Values [NOTE: TWO

SCHEDULES OF TERMINATION VALUES HAVE NOT BEEN INCLUDED IN THIS

CONFORMED VERSION]




Page 79




 









 








Page 80




 









 







Appendix 3 — Annexe 10.

Projected Purchase Option price



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	Purchase Option	 	 
	 	 	 	 	 	 	 	 	 	Price	 	 
	 	 Assumption	 	 	Date	 	 	 	in USD	 	 
	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	30/12/04	 	 	 	 	 	 	 
	 	 
	 	 	 	15/06/05	 	 	 	 	 	 	 
	 	 
	 	 	 	18/12/05	 	 	 	 	 	 	 
	 	 
	 	 	 	15/06/06	 	 	 	 	 	 	 
	 	 
	 	 	 	18/12/06	 	 	 	 	 	 	 
	 	 
	 	 	 	15/06/07	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	Substantial Completion Date(*)
	 	 	 	18/12/07	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	18/06/08	 	 	 	 	 	 	 
	 	 
	 	 	 	18/12/08	 	 	 	 	 	 	 
	 	 
	 	 	 	18/06/09	 	 	 	 	 	 	 
	 	 
	 	 	 	18/12/09	 	 	 	 	 	 	 
	 	 
	 	 	 	18/06/10	 	 	 	 	 	 	 
	 	 
	 	 	 	18/12/10	 	 	 	 	 	 	 
	 	 
	 	 	 	18/06/11	 	 	 	 	 	 	 
	 	 
	 	 	 	18/12/11	 	 	 	 	 	 	 
	 	 
	 	 	 	18/06/12	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	Substantial Completion Date + 5 years (*)
	 	 	 	18/12/12	 	 	 	 	347 550 966,73	 	 
	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	18/06/13	 	 	 	 	331 084 758,40	 	 
	 	 
	 	 	 	18/12/13	 	 	 	 	314 063 182,32	 	 
	 	 
	 	 	 	18/06/14	 	 	 	 	296 327 228,83	 	 
	 	 
	 	 	 	18/12/14	 	 	 	 	277 980 521,94	 	 
	 	 
	 	 	 	18/06/15	 	 	 	 	258 876 434,25	 	 
	 	 
	 	 	 	18/12/15	 	 	 	 	239 101 915,81	 	 
	 	 
	 	 	 	18/06/16	 	 	 	 	218 573 493,87	 	 
	 	 
	 	 	 	18/12/16	 	 	 	 	197 262 425,83	 	 
	 	 
	 	 	 	18/06/17	 	 	 	 	175 097 776,99	 	 
	 	 
	 	 	 	18/12/17	 	 	 	 	152 129 197,25	 	 
	 	 
	 	 	 	18/06/18	 	 	 	 	128 253 246,82	 	 
	 	 
	 	 	 	18/12/18	 	 	 	 	103 498 719,37	 	 
	 	 
	 	 	 	18/06/19	 	 	 	 	77 778 863,32	 	 
	 	 
	 	 	 	18/12/19	 	 	 	 	0,00	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	TOTAL	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 


















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Appendix 3 - Annex 11

DSF Ruling and Customs Ruling [NOTE: RULINGS NOT INCLUDED IN THIS

CONFORMED VERSION]



Page 82




 









 








APPENDIX 4




ADJUSTMENT METHOD FOR CHANGE IN ASSUMPTIONS




(1) Reference Termination Value



The Amount of the Reference Termination Value (tax excluded) are stipulated in Annex 9 of
Appendix 3, subject to the Tax Loan Reference TV adjustments indicated in (3) and (4) of this
Appendix 4 and to the Applicable Exchange Rate, and subject to the Loan Reference Termination
adjustments based on the Loan Agreement, is equal, for each date, to the sum of the Loan
Reference Termination Value (denominated in US Dollars) and the Tax Loan Reference TV
(denominated in Euros). The Reference Termination Value is to be understood after complete
payment of the Rents.



The Loan Reference Termination Value will amount to the outstanding amount of the Loan
Agreement.



The Tax Loan Reference TV is computed as stated in Annex 9 of Appendix 3 and will correspond at
its maximum to the sum of the Projected Tax Saving of the Members (as such amounts are set out
in Appendix 3 – Annex 7).



(2) Purchase Option



The Purchase Option will be exercisable at the expiration of the Lease, i.e. twelve years after
the Substantial Completion Date for the amount stipulated in Annex 10 of Appendix 3.



It will also be exercisable after five years after the Substantial Completion Date and
thereafter on each semi-annual anniversary of the Substantial Completion Date for the amount
stipulated in the Annex 10 of Appendix 3.



(3) Change in French Corporate Income Tax:



If there is a change in the rate of French Corporate Income Tax affecting the Tax Investors
during any drawdown, the Tax Advances shall be adjusted by:



Change in Tax Advances i = 80 % * Deductible Amount i  *
(ISi - IS_Ai)



where



Deductible Amount i is the deductible amount in respect of fiscal year i.



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ISi is the effective rate of French Corporate Income Tax for fiscal year
i.



IS_Ai is the French Corporate Income Tax Assumption



For avoidance of doubt, it means an increase in the Tax Advance drawing in case of a higher tax
rate and conversely a decrease in the Tax Advance drawing in case of a lower tax rate.



Also, if there is a Change in Tax Advances, the Tax Loan Reference TV in Annex 9 of Appendix 3
will be adjusted proportionately as follows:

	
TaxLoanReferenceTV = UnadjstedTLRTVix x-1
j DeductibleAmountx x ISx
j x-1 DeductibleAmountx X IS_Ax









Where:



UnadjustedTLRTVi = Tax Loan Reference TV as shown in Annex 9 of Appendix 3 for
the Termination period i., and subsequently adjusted for (4) below



j = number of Tax Advances completed at the Termination period.



Note that the Total Reference Termination Value is equal to the Loan Reference TV plus the
Tax Loan Reference TV. To the extent there is a change in the Tax Loan Reference TV, Total
Reference Termination Value is also affected.



(4) Member Allocation of Less than 100% of the Deductible Amount



If less than 100% of the Deductible Amount is allocated to the Members during any of the
drawdowns, the Tax Advances of that year shall be reduced to:



Tax Advance i = Scheduled Tax Advance i * DAAi



Where



Scheduled Tax Advance i is the Advance indicated in column 2 of Annex 5
to Appendix 3.



DAAi is the percentage of the Deductible Amount i allocated to
the Members



Also, the corresponding Net Tax Advance will be adjusted proportionately.



Also, Implementation Costs payable by the Lessee are to be proportionately reduced for the
applicable year i as follows:



Reduction in Implementation Costi = 2.75% * Deductible Amounti *
(100%-DAAi)



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Also if there is a change in the rate of the French Corporate Income Tax, the changes as indicated
in (3) of this Appendix 4 shall apply after the changes indicated in this section (4).



For the avoidance of doubt, DAA2004 is equal to 100%, DAA2005
is higher than 65% and DAA2006 is higher than 65%.

	
TaxLoanReferenceTV = UnadjstedTLRTVixx=1
DAAx x DeductibleAmountnxISx
x=1DeductibleAmountxXIS_Ax










Tax Loan Reference TV in Annex 9 of Appendix 3 will be adjusted proportionately as follows:



Where:



UnadjustedTLRTVi = Tax Loan Reference TV as shown in Annex 9 of Appendix 3 for
the Termination period i. and subsequently adjusted for (3) above



j = number of Tax Advances completed at the Termination period.



(5)Temporary Delay in Tax Investors Scheduled Tax Deduction



To the extent a tranche (or part of it) of the Tax Deductible Amount is delayed at the
request of DGI, an additional amount (as calculated below) included in the supplemental rents
will become payable by the Lessee to the Lessor, such amount to be paid on December 31st
of the year following the year in which the relevant tranche was so delayed.



= 2.5% * (Tax Deductible Amount – Used Deductible Amount) * ISi



Where: Used Deductible Amount is the sum of the portions of the Tax Deductible Amount for which
the Members have taken a tax deduction.



(6) Delay in Substantial Completion Date:



To the extent that the Substantial Completion Date is later than December 31, 2007
(“Substantial Completion Assumption”) then an additional amount (as calculated below) included
in the supplemental rents will be paid by the Lessee to the Lessor, such amount to be paid on
the effective Substantial Completion Date:



= (1.5% * Used Deductible Amount (as defined above) * ISi * number of days
between the Substantial Completion Date and Substantial Completion Assumption) / 366



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For certainty, it is understood any amounts payable under (2) above fully satisfy any amounts
that may be calculated under (3) above and that the amounts calculated under (2) and (3) do not
apply to the same portion of the Tax Deductible Amount.



Page 86





 









 








APPENDIX 5




RENT PAYMENT SCHEDULE




SEE ANNEX 3 OF APPENDIX 3




Page 87




 









 








APPENDIX 6




LOAN AGREEMENT – OUTSTANDING




PRINCIPAL AMOUNT




SEE ANNEX 2 OF APPENDIX 3




Page 88




 









 








APPENDIX 7




TAX LOAN REFERENCE TV




SEE ANNEX 5 OF APPENDIX 3




Page 89




 









 








APPENDIX 8




COMPUTING OF THE RETROCESSION RATE




The computation of the retrocession rate will be made at the Closing Date. At that date, it will be
higher than 80 %.



It will not be used thereafter as a parameter.



Net Present Value Benefit (NPVB):

	
NPVB = 30 (Proceedsi-LeasePaymentsi)
i-0 (1+r)i




	
PVCFB=30(Deductible_Amounti *IS_Ai-Participation_Fee*IS_Ai)
i-0 (1+r)i








Where,



i = number of fiscal semesters since December 31, 2004.



r = Semi-annual rate corresponding to the rate of interest under the Loan Agreement,
adjusted to an all-in rate including a part of the Implementation Costs (0.10 % of
the Deductible Amount) and TSS on this considered Implementation Costs.



Computation
of r is shown in Appendix 8 - Annex 1.



This
calculation of NPVB is shown in Appendix 8 - Annexe 2.



Present Value of the Cost to French Budget (PVCFB):




Where, further to r defined above:








IS_Ai is the French Corporate Income Tax Assumption for Fiscal Year
ending i (see para B.(d) of Appendix 3).



Participation Fee is the fee paid to the Tax Investors for their participations in
the Transaction (see para A.(k) of Appendix 3).



Page 90



 









 








Deductible Amounti,in this case, is the deductible amount agreed to by
DGI (see para A.(f) of Appendix 3).



This
calculation of PVCFP is shown in Appendix 8 - Annex 3.



Retrocession Rate:



Retrocession Rate = NPVB / PVCFB



Such percentage calculated above to be greater than 80 %. This calculation of Retrocession
Rate is shown in Appendix 8 – Annex 2.




Page 91


 









 








APPENDIX 9




DGI FINAL APPROVAL [NOTE: FINAL




RULING NOT INCLUDED IN THIS




CONFORMED VERSION]




Page 92