##### 



ELECTRICITY SUPPLY AGREEMENT DATED 28 OCTOBER 2004 ENERCAL and GORO NICKEL
(acting through and on behalf of its New Caledonian branch)




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CONTENTS Clause
    
    
    
    Page1.
    
    Definitions and Interpretations
    
    
    12.
    
    [not used]
    
    
    143.
    
    Duration and Term
    
    
    144.
    
    Funnel Mechanism
    
    
    155.
    
    Sale and Purchase of Capacity and Electricity
    
    
    186.
    
    Extra Electricity
    
    
    187.
    
    Electricity Before the Start Date
    
    
    198.
    
    Payments
    
    
    199.
    
    Adjustments
    
    
    1910.
    
    Billing and Payment
    
    
    2111.
    
    TSS and other Taxes
    
    
    2212.
    
    Metering
    
    
    2313.
    
    Additional rights and obligations of the parties
    
    
    2514.
    
    Changes in Law
    
    
    2915.
    
    ESA Coordinating Committee
    
    
    3316.
    
    Force Majeure
    
    
    3417.
    
    Termination
    
    
    3718.
    
    Confidentiality
    
    
    4319.
    
    Representations and Warranties
    
    
    4420.
    
    Permits and Other Approvals
    
    
    4521.
    
    Assignment
    
    
    4622.
    
    Liabilities
    
    
    4623.
    
    Insurance
    
    
    4724.
    
    Indemnification
    
    
    4825.
    
    Waiver
    
    
    4926.
    
    Variation
    
    
    4927.
    
    Entire Agreement
    
    
    4928.
    
    Severability
    
    
    4929.
    
    Notices
    
    
    4930.
    
    Further Assurance
    
    
    5031.
    
    Announcements
    
    
    5132.
    
    Costs and Expenses
    
    
    5133.
    
    Counterparts
    
    
    5134.
    
    Language
    
    
    5135.
    
    Third Party Rights
    
    
    5136.
    
    Governing Law
    
    
    5137.
    
    Expert Determination
    
    
    5138.
    
    Arbitration
    
    
    52Schedule1.
    
    Availability Charge
    
    
    542.
    
    Fuel charge and variable operation and maintenance charge
    
    
    563.
    
    Delivery Points and Switchroom
    
    
    604.
    
    [NOT USED]
    
    
    625.
    
    Coal Specification
    
    
    636.
    
    Meter Testing Procedures
    
    
    657.
    
    Electricity Specification
    
    
    668.
    
    Scheduling Procedures
    
    
    719.
    
    Penalties
    
    
    7510.
    
    Insurance
    
    
    7711.
    
    Early Electricity Price
    
    
    7812.
    
    AC Present Value
    
    
    79




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THIS AGREEMENTis made the 28th day of October, 2004 BETWEEN:  (1)
    ENERCALa company incorporated under the laws of France and registered in Nouméa, New
Caledonia with registered number B015 255 whose registered office is at 87 avenue du Général
de Gaulle, 98800 Nouméa, New Caledonia (Enercal); and  (2)
    GORO NICKELa company incorporated under the laws of France with registered number 313954570
RCS Paris whose registered office is at 38 Rue du Colisée, 75008, Paris, France (acting
through and on behalf of its New Caledonian branch whose office is at 7 bis, rue Suffren,
BP218, 98845 Nouméa Cedex, New Caledonia) (Goro Nickel). WHEREAS:  (A)
    Enercal is responsible for generating, transporting, dispatching and distributing electricity
in New Caledonia.(B)
    Goro Nickel holds certain concessions pursuant to which Goro Nickel is entitled to explore
for, develop and mine certain minerals, among which are nickel and cobalt, in a specified area
in New Caledonia (the Concession).(C)
    Goro Nickel, having discovered a mineral deposit containing nickel and cobalt within the
Concession, intends to procure and construct a complete and operable mining and metallurgical
processing complex, together with supporting infrastructure, to produce nickel and cobalt (the
Nickel Mine).(D)
    Goro Nickel is a purchaser of and wishes to buy Electricity for the purposes of carrying out
the Nickel Mine project, and Enercal agrees to sell Electricity on the terms set out in this
Agreement. IT IS AGREEDas follows:  1.
    DEFINITIONS AND INTERPRETATIONS1.1
    DefinitionsIn this Agreement:ACFChas the meaning given to it in schedule 1 (Availability Charge);ACOMhas the meaning given to it in schedule 1 (Availability Charge);AC Present Valuehas the meaning given to it in schedule 12 (AC Present Value);Actual Capacitymeans, in respect of any Hour, the Electricity Delivered in that Hour
except where the Electricity Delivered in that Hour is affected by a Goro Nickel Event which
causes a reduction in the Electricity available to Enercal in which case the Actual Capacity
for that Hour will be increased by the amount of such reduction or, if Enercal in good faith
determines that such amount cannot be easily and readily measured or determined, the Actual
Capacity for that Hour will be the Target Net Capacity for that Hour;Actual Monthly Availabilitymeans, in any Month, the Actual Monthly Availability
calculated in accordance with clause 9.2 (Availability factors); 1




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Affiliatemeans, in relation to a company:  (a)
    any other company (Other Company) which, either directly or indirectly,
controls or is controlled by it; and(b)
    any other company directly or indirectly controlled by any such Other Company,  in each case as such control is determined within the purpose of Art. L.233-3 of the
French commercial code;Agreed Formmeans, in relation to any document, the form of that document which has
been initialled for the purposes of identification by or on behalf of Enercal and Goro
Nickel;Agreed Indexmeans, in each case where such term is used, an index agreed by the
Parties (or, in the absence of agreement, as determined by an Expert) which index:  (a)
    is published by a reliable independent source;(b)
    is available on a timely basis;(c)
    is publicly available (or available for a reasonable fee);(d)
    is based on costs other than those which are primarily a Partys own costs;(e)
    accurately approximates the changes in the amount to be indexed or adjusted
using the index; and(f)
    appropriately relates to the amount to be so indexed or adjusted,  and which index, for the avoidance of doubt, may be different in each such case;Applicable Lawmeans any applicable national, territorial, municipal, provincial or
state statute, ordinance or other law (including in relation to Tax), regulation, by-law,
order or decree, any form of delegated legislation, any treaty or international convention
and any regulation or resolution of France or New Caledonia or any part thereof or the
European Union, or the United Nations or its Security Council and includes for the avoidance
of doubt, the IC Permit;Availability Chargemeans, in any Month, the Availability Charge calculated in
accordance with schedule 1 (Availability Charge);Availability Creditmeans, in any Month, the Availability Credit calculated in
accordance with clause 9.3(b) (Availability Credit);Availability Credit Electricityhas the meaning given to it in clause 9.3(a)
(Availability Credit);Availability Penaltyhas the meaning given to it in clause 9.1 (Availability Penalty);Backup Metering Systemmeans all meters, metering equipment, infrastructure and
measurement transformers (both voltage, current or combination units) and any other
measuring equipment and apparatus which may be installed by Goro Nickel at the Nickel Mine
for backup metering of Electricity delivered pursuant to this Agreement; 2




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Business Daymeans a Day (other than a Saturday or Sunday) on which banks are generally
open in Nouméa, New Caledonia for normal business;Change in Lawmeans any of the following events occurring after the date of this
Agreement:  (a)
    the repeal, amendment, making or enactment of any Applicable Law having the
force of law including any Applicable Law relating to Tax;(b)
    the change in the judicial or administrative interpretation of any Applicable
Law having the force of law including any Applicable Law relating to Tax; and(c)
    Enercal is required to implement any action under the IC Permit which action is
not expected to require implementation as at the date of this Agreement and which
action is not required to be implemented as at the date the IC Permit is first issued;  Change Noticehas the meaning given to it in clause 14.2(a) (Addition or amendment to
electricity generating unit);Claimanthas the meaning given to it in Clause 38.2 (Formation of tribunal);Coal Specificationmeans the coal specification set out in schedule 5 (Coal
Specification);Competent Authoritymeans any national, territorial, federal, regional, state, local,
European Union or other court, arbitral tribunal, administrative agency or commission or
other governmental, administrative or regulatory body, authority, agency or instrumentality;Concessionhas the meaning given to it in recital (B);Confidential Informationhas the meaning set out in clause 18 (Confidentiality);Consequential Lossmeans any loss of production, loss of profit, loss of revenue, loss
of contract, loss of goodwill, loss of use or liability under other agreements or indirect
or consequential loss resulting from the performance or non-performance of any obligation
hereunder, any act of negligence, breach of contract or otherwise by either Party and
whether or not such Party knew, or ought to have known, that such losses would be likely to
be suffered as a result of the same;Construction Services Agreementmeans the agreement so named dated 3 June 2004 between
Prony and Goro Nickel;Contract Limitshas the meaning given to it in paragraph 4(c) of the Scheduling
Procedures;Contract Periodmeans the period commencing on the Start Date and, subject to clause
3.2 (Extensions to the Contract Period) and clause 17 (Termination), expiring on the
twenty-fifth (25th) anniversary of the Start Date;Costshas the meaning given to it in clause 37.3(f) (Role of Expert);Credit Support Documentsmeans each Inco Guarantee, any replacement of an Inco
Guarantee and any Enercal Credit Support Document;Daymeans a period of twenty-four (24) consecutive Hours starting at 00:00 on any day
and ending at 00:00 on the next day; 3




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Deadlinemeans 31 December 2008 or such later date agreed or determined in accordance
with clause 4.2;Deemed Actual Capacityhas the meaning given to it in clause 9.2(b) (Availability
factors);Defaulting Partyhas the meaning set out in clauses 17.1(a),(b) and (c) (Events of
Default) (as applicable);Definitive Acceptancemeans the date that each of the following has occurred:  (a)
    Nickel Mine Completion has been achieved;(b)
    the Nickel Mine has produced, over a continuous period of 30 days occurring
within 15 months after Nickel Mine Completion, a total of at least 2,600 tonnes of
contained nickel in oxide form and 220 tonnes of contained cobalt (such amounts
representing 60% of the Nickel Mines capacity and the amount of 220 tonnes of cobalt
being adjusted to reflect any difference between the grade of cobalt in the ore
actually mined and the grade assumed by Inco in setting such figure in the Project
Design Criteria); and(c)
    Goro Nickel has given notice of (a) and (b) to Enercal;  Delivery Pointsmeans the points of interconnection of the Enercal System to the 33kV
feeders connected to the Nickel Mine within the Switchroom, the precise details of which are
set out in part A of schedule 3 (Delivery Points and Switchroom);Disruption Processhas the meaning given to it in the Multipartite Agreement;Dollarmeans the lawful currency of the United States of America;Early Electricityhas the meaning given to it in clause 7(a) (Electricity before the
Start Date);Early Electricity Pricemeans the Early Electricity Price determined in accordance with
schedule 11 (Early Electricity Price);Early Termination Datehas the meaning set out in clause 17.2(a) (Termination right),
clause 16.2(f) (Consequences of Force Majeure) and clause 14.4(a) (Change in Law costs) (as
the case may be);Electricitymeans electrical energy meeting the Electricity Specification produced,
flowing, or supplied by an electric circuit during a time interval and being an integral
with respect to the time of instantaneous power, exchanged in units of kWh;Electricity Deliveredmeans Electricity measured by the Metering System (expressed in
kW) as being delivered to Goro Nickel as an average load over a one Hour period;Electricity Specificationmeans the specification for Electricity set out at schedule 7
(Electricity Specification);Emissions Protocolmeans the agreement so named to be entered into between Goro Nickel
and Prony on terms substantially similar to the Emissions Protocol letter of intent in the
Agreed Form; 4




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Enercal Credit Support Documentmeans any standby letter of credit or other form of
credit support document issued in favour of Goro Nickel pursuant to clause 13.1(b)
(Enercals additional obligations);Enercal Schedulehas the meaning given to it in paragraph 1(b) of the Scheduling
Procedures;Enercal Systemmeans the Transmission System, the Switchroom and each electricity
generation facility connected to the Transmission System;EPC Contractsmeans the Engineering, Procurement, Erection and Commissioning Contract
between Prony, Alstom Power Limited and Alstom Power Turbomachines dated 3 June 2004 and the
General Agreement for Civil Works between Prony and Vinci Construction Grands Projets dated
3 June 2004 in the Agreed Form;ESA Coordinating Committeehas the meaning given to it in clause 15.1 (ESA Coordinating
Committee);Escrow Accountmeans any account established, from time to time, bearing interest at
commercial rates at an independent bank not otherwise used by the Parties in the name of a
third party who will release the proceeds therein to the appropriate Party only upon
satisfaction of the applicable conditions provided in this Agreement and any escrow
agreement that may be agreed upon and executed by the Parties;Euromeans the lawful currency of the member states of the European Union that have
adopted or that adopt the single currency in accordance with the treaty establishing the
European Community, as amended by the Treaty on European Union;Event of Defaulthas the meaning given to it in clause 17.1 (Events of Default);Excluded Taxhas the meaning given to it in clause 14.3(a) (Tax change in law);Excusing Factormeans:  (a)
    Force Majeure affecting Enercal;(b)
    a Goro Nickel Event;(c)
    any act or failure to act of any third party (other than any contractor or
sub-contractor of Goro Nickel);  Expected Actual Capacity, in respect of any Hour, means the total amount of Electricity
(expressed in kW) which Enercal expects to be made available at the Delivery Points on a
continuous and reliable basis, as declared (or deemed to be declared) by Enercal to Goro
Nickel (excluding, for the avoidance of doubt, any Extra Electricity expected to be
delivered in that Hour);Expertmeans an appropriately qualified independent expert selected by the ESA
Coordinating Committee who is not a current or former director, officeholder or an employee
of, or directly or indirectly retained (either currently or formerly) as a consultant to,
any Party (or any Affiliate of any Party) and who is not a current or former holder of shares in any Party (or in the Affiliate of any Party); provided, however, that if the ESA
Coordinating Committee is unable to select an Expert within twenty-one (21) Business Days
because of a deadlock between the representatives, the Expert shall be an appropriately
qualified independent person 5




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who is not a current or former director, officeholder or an employee of, or directly or
indirectly retained (either currently or formerly) as a consultant to, any Party (or any
Affiliate of any Party) and who is not a current or former holder of shares in any Party (or
in the Affiliate of any Party) appointed by the International Centre for Expertise of the
International Chamber of Commerce in accordance with the ICC Rules for Expertise and the
Parties shall share the costs of such procedure equally;Extension Noticehas the meaning given to it in clause 3.2 (Extensions to the Contract
Period);Extension Periodhas the meaning given to it in clause 3.2 (Extensions to the Contract
Period);Extra Electricityhas the meaning given to that term in clause 6 (Extra Electricity);Extra Electricity Chargemeans, in any Month, the amount calculated in accordance with
clause 6(f) (Extra Electricity);Extra Electricity Pricehas the meaning given to it in paragraph 1(c) of the Scheduling
Procedures;Facilitymeans the pulverised coal fired power station to be constructed under the EPC
Contracts at Prony Bay, New Caledonia together with the supporting infrastructure and
associated facilities;Finance Documentsmeans all documents relating to the financing of the Facility;Force Majeuremeans any external event or circumstance that is beyond the control of
the affected Party which it could not reasonably have avoided or overcome and which makes it
impossible to perform any of its obligations under this Agreement, but excluding:  (a)
    any Insolvency Event affecting either Party or any of their contractors;(b)
    any failure to perform by either Partys contractors save to the extent such
failure (i) is caused by an event which would have constituted Force Majeure under this
Agreement had it occurred in relation to such Party and (ii) also satisfies the
requirements for such Party to rely on the same as an event of Force Majeure for its
own performance under this Agreement; and(c)
    any strikes by a Partys own workforce save to the extent they are part of a
general strike;  Force Majeure Noticehas the meaning given to it in clause 16.2(a) (Consequences of
Force Majeure);Force Majeure Planhas the meaning given to it in clause 16.2(c) (Consequences of Force
Majeure);Fuel Chargemeans, in any Month, the Fuel Charge calculated in accordance with schedule
2 (Fuel Charge and Variable Operation and Maintenance Charge);General Agreementmeans the agreement so named dated 14 January 2004 between Inco, Goro
Nickel, Prony and Enercal (as amended); 6




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Goro Force Majeuremeans any external event or circumstance that is beyond the control
of Goro Nickel which it could not reasonably have avoided or overcome and which makes it
impossible for Goro Nickel to perform all or substantially all of the construction
activities of the Nickel Mine, but excluding:  (a)
    any Insolvency Event affecting Goro Nickel or any of its contractors;(b)
    any failure to perform by Goro Nickels contractors save to the extent such
failure (i) is caused by an event which would have constituted Goro Force Majeure had
it occurred in relation to Goro Nickel and (ii) also satisfies the requirements for
Goro Nickel to rely on the same as an event of Goro Force Majeure for its own
performance under this Agreement; and(c)
    any strikes by Goro Nickels own workforce save to the extent they are part of
a general strike;  Goro Nickel Eventmeans:  (a)
    a breach by Goro Nickel of the Utilities and Services Agreement, the
Construction Services Agreement or articles 2, 3, 4 or 7 of the Transfer Agreement; or(b)
    Goro Nickel being unable to provide utilities or services (or only being able
to provide a reduced level of utilities or services) under the Utilities and Services
Agreement as a result of Force Majeure as defined thereunder; or(c)
    Goro Nickel providing no or a reduced level of Key Services under the Utilities
and Services Agreement as a result of a Permitted Outage or a Planned Outage
thereunder;  Goro Nickel Schedulehas the meaning given to it in paragraph 1(a) of the Scheduling
Procedures;Goro Nickel Termination Paymenthas the meaning given to it in clause 17.4(c)(i)(B)
(Termination Payment);Hourmeans a period of sixty (60) consecutive minutes starting on the hour;IASmeans International Accounting Standards published by the International Accounting
Standards Board or such other generally accepted accounting principles adopted by Prony in
its audited annual financial accounts;IC Permitmeans the autorisation dexploiter une installation classéewhich is
required by Prony under Applicable Laws to operate the Facility;Incomeans Inco Limited, a company organised under the laws of Canada and having its
registered address at 145 King Street West, Toronto, ON, M5H 4B7;Inco Guaranteemeans each guarantee to be given by Inco on or about (but no later than)
the date of this Agreement in the Agreed Form;Independent Partyhas the meaning given to it in clause 12.4 (Sealing of the Metering
System);Insolvency Eventhas the meaning given to it in clause 17.1 (Events of Default); 7




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Invoice Notice Datehas the meaning given to it in clause 10.7(a) (Failure to issue
invoice);Key Servicehas the meaning given to it in the Utilities and Services Agreement;kWmeans kilowatt;kWhmeans kilowatt hours;Late Payment Ratemeans a rate of interest per annum equal to the lesser of:  (a)
    LIBOR plus three per cent. (3%) per annum; or(b)
    the maximum rate of interest allowed by Applicable Law;  Lendermeans any entity which provides or which may provide (directly or indirectly)
financial products or support to Goro Nickel in relation to the Nickel Mine project;Level Three Disruption Processhas the meaning given to it in the Multipartite
Agreement;LIBORmeans:  (a)
    the British Bankers Association Interest Settlement Rate for the Relevant
Currency displayed on the appropriate page of the Reuters screen; or(b)
    (if no screen rate is available for the Relevant Currency) the arithmetic mean
(rounded upwards to four (4) decimal places) of the rates quoted by the Reference Banks
to leading banks in the London interbank market,  as of 11.00 a.m. London time on the date two (2) London Business Days prior to the date on
which an amount becomes due under this Agreement for the offering of deposits in the
Relevant Currency for a period of three (3) Months;London Business Daymeans a Day (other than a Saturday or Sunday) on which banks are
generally open in London for normal business;Make-up Amountmeans the sum of, for each Hour during the Contract Period that
Enercals ability to make available Electricity has been affected by Force Majeure, the
difference between the Deemed Actual Capacity in that Hour and the amount that would have
been the Actual Capacity in that Hour had clause 9.2 (Availability Factors) not applied plus
the sum of, for each Hour during the Contract Period that Goro Nickels ability to take
Electricity has been affected by Force Majeure affecting Goro Nickel only, the difference
between the expected Scheduled Net Capacity for that Hour most recently (determined at that
Hour) notified to Enercal in accordance with the Scheduling Procedures prior to the Force
Majeure affecting Goro Nickel and the Scheduled Net Capacity in that Hour;Make-up Periodmeans the number of whole Days (rounded to the nearest Day) calculated
as the Make-up Amount (calculated on the first Day of the Make-up Period) divided by
1,200,000kW;Material Adverse Changehas the meaning given to it in clause 14.2(a) (Addition or
amendment to electricity generating unit);Metering Specificationmeans the specifications for the Metering System as agreed by
the ESA Coordinating Committee; 8




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Metering Systemmeans all meters, metering equipment, infrastructure and measurement
transformers (both voltage, current or combination units) and any other measuring equipment
and apparatus owned by Enercal (including the Transmission Metering System), the precise
location and details of which are set out in part B of schedule 3 (Metering Systems);Meter Testing Proceduresmeans those procedures set out at schedule 6 (Meter Testing
Procedures);Monthmeans a calendar month;Multipartite Agreementmeans an agreement so named granting Goro Nickel specified
rights in respect of the operation and maintenance of the Facility in certain circumstances,
the parties to which will include Goro Nickel, Enercal and Prony;Nickel Minehas the meaning given to that term in recital (C);Nickel Mine Completionmeans the date prior to the start-up of the Nickel Mine when:  (a)
    the Nickel Mine has been built in accordance with the Project Design Criteria
and when all of its necessary systems and facilities are ready to accept feed for
start-up operations and are capable of production;(b)
    all necessary materials and equipment have been installed in accordance with
the plans, drawings and specifications, and checked and tested for alignment,
lubrication, rotation, hydrostatic or pneumatic pressure integrity, and the process,
ancillary and appropriate infrastructure facilities have been flow tested with water;(c)
    all necessary tests for mechanical integrity and continuity of electric
circuitry, piping and process controls have been satisfactorily completed;(d)
    all necessary operating units, systems and subsystems are determined to be
complete and capable of operation; and(e)
    a punch list of incomplete items related to the Nickel Mine and all operating
units, systems or subsystems has been established and agreed upon by Goro Nickel;  Non-Defaulting Partymeans the Party which is not the Defaulting Party;Noticehas the meaning given to it in clause 37.2 (Referral to Expert);Other Approvalmeans any permission, permit, approval, consent, licence, authority or
right of way other than a Permit, which is required by Enercal to enable it to perform its
obligations under this Agreement;Other Companyhas the meaning given to it in this clause 1.1;Outagemeans any event, other than Force Majeure, which affects Enercals ability to
make Electricity available to Goro Nickel under this Agreement;Partymeans one or other of the parties to this Agreement;Permitmeans any permission, licence, authority, approval or consent of any Competent
Authority and, where a Competent Authority is authorised to prohibit a proposal, the passing
of the time limited for such prohibition without the proposal being prohibited; 9




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Planned Outagemeans an Outage for planned maintenance, testing and or inspection of
any part of the Enercal System as notified to Goro Nickel through Enercals nominations of
Expected Actual Capacity given in accordance with the Scheduling Procedures;PPAmeans the term sheet for the Contrat De Vente Et DAchat DElectricité in the
Agreed Form between Enercal and Prony dated 12 October 2004, any agreement entered into
pursuant to that term sheet and the Contrat De Vente Et DAchat DElectricité in the Agreed
Form between Enercal and Prony dated 3 June 2004 as amended (including any amendment in
accordance with the term sheet referred to in this definition) together pursuant to which
Enercal agrees to purchase from Prony the entire capacity of the Power Station for a period
at least equal to the Contract;PQM Systemsmeans the power quality measuring systems, the general details of which are
described in paragraph 7 of the Electricity Specifications and the precise details of which
are agreed by the ESA Coordinating Committee;Project Agreementsmeans:  (a)
    this Agreement, the General Agreement, the Utilities and Services Agreement,
the Water Supply Agreement, the Multipartite Agreement, the Transfer Agreement, the
PPA, the Emissions Protocol, the Construction Services Agreement, the EPC Contracts and
the Finance Documents; and(b)
    any other material agreement relating to the Facility to which Enercal or Prony
is a party and a breach of which would be likely to have a material adverse effect on:  (i)
    the ability of Enercal to perform any material obligation under
this Agreement; or(ii)
    the operation, maintenance or ownership of the Facility;  Project Design Criteriameans Goro Nickels written project design criteria (as amended
from time to time);Pronymeans Prony Energies S.A.S, a company incorporated under the laws of France and
registered in Nouméa, New Caledonia with registered number B651927 and a registered office
at 29, rue Jules Ferry, 98800, Nouméa Cedex, New Caledonia;Public Utilities Obligationsmeans Enercals statutory obligation to supply electricity
to the public of New Caledonia;Reasonable and Prudent Operatormeans a person seeking in good faith to perform its
contractual obligations and, in so doing and in the general conduct of its undertaking,
exercising that degree of skill, diligence, prudence and foresight which would reasonably
and ordinarily be expected from a skilled and experienced entity engaged in the same type of
undertaking under the same or similar circumstances or conditions and with obligations to
provide electricity on a continuous and reliable basis;Reduced Capacitymeans in respect of any Reduced Capacity Hour, 50,000kW minus the
amount of Electricity nominated by Goro Nickel in respect of that Reduced Capacity Hour in
the Goro Nickel Schedule;Reduced Capacity Hourhas the meaning given to it in paragraph 1(a)(i) of the
Scheduling Procedures; 10




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Reference Banksmeans the principal London offices of Banque Nationale de
Paris/Paribas, Calyon, Barclays Bank plc, HSBC Bank plc and JP Morgan Chase or such other
banks or financial institutions as the Parties may agree from time to time;Reimbursement Credithas the meaning given to it in clause 17.5 (Reimbursement of
Termination Payments);Reimbursement Credit Electricityhas the meaning given to it in clause 17.5
(Reimbursement of Termination Payments);Reimbursement Credit Amountmeans ACFC/36,500,000;Relevant Change in Lawhas the meaning given to it in clause 14.1(a) (Illegality or
unenforceability);Relevant Currencymeans the currency of the applicable unpaid amount;Request for Arbitrationhas the meaning given to it in clause 38.2 (Formation of
tribunal);Required Authorisationshas the meaning given to it in clause 19(d) (General);Required Workshas the meaning given to it in clause 14.2(a) (Addition or amendment to
electricity generating unit);Required Works Costhas the meaning given to it in clause 14.2(g) (Addition or
amendment to electricity generating unit);Respondenthas the meaning given to it in clause 38.2 (Formation of tribunal);Ruleshas the meaning given to it in clause 38.1 (Dispute);Scheduled Net Capacitymeans, in respect of any Hour, the total amount of Electricity
(expressed in kW and not to exceed the Target Net Capacity for that Hour) which Goro Nickel
requires to be made available at the Delivery Points on a continuous and reliable basis;Scheduling Proceduresmeans the procedures for scheduling delivery of Electricity under
this Agreement as set out in schedule 8 (Scheduling Procedures);Start Datemeans the time at which the second Electricity generating unit of the
Facility is completed, commissioned and fully operational, as determined by Enercal acting
as a Reasonable and Prudent Operator and notified in writing to Goro Nickel pursuant to
clause 4 (Funnel Mechanism);Start Date LD Amounthas the meaning given to it in part B of schedule 9 (Penalties);Successfulhas the meaning given to it in the Multipartite Agreement;Surrendered Electricitymeans, in respect of any Hour, Electricity to which Goro Nickel
is entitled under this Agreement, which is within the Contract Limits and which Goro Nickel
has agreed to surrender to Enercal in consideration for the amount agreed for such
Electricity in accordance with the Scheduling Procedures in that Hour;Switchroommeans the switchroom owned by Prony, the precise location and details of
which are set out and circled at grid reference 12:C in Part A of schedule 3 (Delivery
Points and Switchroom); 11




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Target Monthly Availabilitymeans, in any Month, the Target Monthly Availability
calculated in accordance with clause 9.2(c) (Availability factors);Target Net Capacityfor each Hour means 50,000kW minus:  (a)
    if that Hour is a Reduced Capacity Hour set by Goro Nickel in accordance with
paragraph 1(c) of the Scheduling Procedures, the Reduced Capacity in respect of that
Reduced Capacity Hour;(b)
    any amount of Surrendered Electricity which the Parties have agreed in respect
of that Hour in accordance with the Scheduling Procedures; and(c)
    the amount by which Electricity generation to be made available to Goro Nickel
must be reduced in that Hour by virtue of the Emissions Protocol;  Target Start Datemeans 9th January, 2008 as the same may be extended by any
Excusing Factor (the duration of any such extension being as agreed between the Parties or,
in the absence of agreement, as determined in accordance with clause 37 (Expert
Determination));Taxmeans any tax, levy, impost, duty, royalty or other charge or withholding of a
similar nature (including any penalty or interest payable in connection with any failure to
pay or any delay in paying any of the same) including income tax and corporation tax;Tax Change in Lawmeans any of the following events occurring after the date of this
Agreement:  (a)
    the repeal, amendment, making or enactment of any Applicable Law having the
force of law relating to Tax (excluding, for the purposes of this definition, any
penalty or interest payable in connection with any failure to pay or any delay in
paying any of the same); and(b)
    the change in the judicial or administrative interpretation of any Applicable
Law having the force of law relating to Tax (excluding, for the purposes of this
definition, any penalty or interest payable in connection with any failure to pay or
any delay in paying any of the same);  Technical Disputehas the meaning given to it in clause 37.2 (Referral to Expert);Termination Paymenthas the meaning given to it in clause 17.4(a) (Termination
Payment), clause 16.2(f) (Consequences of Force Majeure) and clause 14.4(b) (Change in Law
costs) (as the case may be);Termination Payment Datehas the meaning given to in clause 17.4(e) (Termination
Payment), clause 14.4(e) (Change in Law costs) and 16.2(i) (Consequences of Force Majeure)
(as the case may be);Transfer Agreementmeans the agreement so named dated 3 June 2004 between Prony, Inco
and Goro Nickel;Transmission Metering Systemmeans all meters, metering equipment, infrastructure and
measurement transformers (both voltage, current or combination units) and any other
measuring equipment and apparatus owned by Enercal and installed at or near the point at
which electricity is delivered from the Facility to the Transmission System (the precise
location and details of which are set out in part B of schedule 3 (Metering Systems)); 12




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Transmission Systemmeans the high voltage national grid system owned and operated by
Enercal for the transmission of electricity in New Caledonia;TSSmeans taxe sur les services;Unavailablemeans, in relation to an insurance policy required to be effected and
maintained under this Agreement, either that:  (a)
    such insurance policy is not available in the worldwide insurance market with
reputable insurers of good standing; or(b)
    the insurance premium payable for such insurance policy is at such a level that
the risk covered by such insurance policy is not generally being insured against in the
worldwide insurance market with reputable insurers of good standing;  Unsuccessfulhas the meaning given to it in the Multipartite Agreement;Unused Capacity Pricehas the meaning given to it in paragraph 1(c) of the Scheduling
Procedures;Utilities and Services Agreementmeans the agreement so named dated 28 October 2004
between Goro Nickel and Prony;Variable Operation and Maintenance Chargemeans, in any Month, the Variable Operation
and Maintenance Charge calculated in accordance with schedule 2 (Fuel Charge and Variable
Operation and Maintenance Charge);Water Supply Agreementmeans an agreement to be entered into for the supply of water
from the Yate reservoir in New Caledonia to the Nickel Mine, the parties to which will
include Enercal and Goro Nickel; andWeekmeans each week commencing on 00:00 on Monday and ending on 24:00 on the following
Sunday.1.2
    InterpretationIn this Agreement:  (a)
    any reference, express or implied, to an enactmentincludes references to:  (i)
    that enactment as amended, extended or applied by or under any
other enactment before or after the date of this Agreement;(ii)
    any enactment which that enactment re-enacts (with or without
modification); and(iii)
    any subordinate legislation made (before or after the date of
this Agreement) under any enactment, including one within clause 1.2(a)(i) or
(ii) above;  (b)
    any reference to a clauseor schedule, is a reference to a clause or schedule
of this Agreement and any reference to a paragraphis to a paragraph of the schedule in
which the term is used or to the schedule noted where the term is used;(c)
    words in the singular may be interpreted as including the plural, and vice
versa; 13




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(d)
    any reference to the words includeor includingshall be construed without
limitation;(e)
    unless otherwise specified, any reference to timeshall be a reference to time
in Nouméa, New Caledonia;(f)
    any reference to a yearshall be a reference to a calendar year;(g)
    unless a contrary indication appears, any reference in this Agreement to:  (i)
    any Partyshall be construed so as to include its successors in
title, permitted assigns and permitted transferees;(ii)
    this Agreement or any other agreement or instrument is a
reference to this Agreement (including each schedule to this Agreement) or
other agreement or instrument as amended, supplemented or novated from time to
time in accordance with, and subject to, any requirements of this Agreement;(iii)
    a personincludes any individual, firm, company, corporation,
unincorporated organisation, government, state or agency of a state or any
association, trust or partnership (whether or not having separate legal
personality) or any other entity;(iv)
    a regulationincludes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of any
governmental, intergovernmental or supranational body, agency, department or
regulatory, self-regulatory or other authority or organisation;(v)
    words of any gender include each other gender;(vi)
    the term hereofand similar words refer to this entire
Agreement and not to any particular clause or schedule or any other subdivision
of this Agreement; and(vii)
    any capitalised words, terms, phrases and abbreviations used
specifically in any schedule shall have the meanings set forth in such
schedule, as the case may be; and  (h)
    clause and schedule headings are for ease of reference only.  2.
    [NOT USED]3.
    DURATION AND TERM3.1
    Duration and termThis Agreement shall come into force on the date of this Agreement and, subject to
clause 3.3 (Survival of rights), shall automatically expire at the end of the Contract
Period (unless terminated earlier in accordance with its terms). 14




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3.2
    Extensions to the Contract Period  (a)
    Goro Nickel may:  (i)
    at least (2) two years before the twenty-fifth
(25th) anniversary of the Start Date; and(ii)
    at least (1) one year before the expiration of any Extension
Period,  serve a notice upon Enercal to extend the Contract Period by a further five (5)
years (such period of extension being referred to as an Extension Period) (Extension
Notice). Following service of an Extension Notice, the Contract Period shall be
automatically extended until the end of the Extension Period referred to in that
Extension Notice. Goro Nickel may issue a maximum of (5) five Extension Notices.(b)
    Unless Goro Nickel notifies Enercal otherwise, the Contract Period will
automatically be extended by one Make-up Period which extension will follow on
immediately from:  (i)
    the expiry of the final Extension Period; or(ii)
    if Goro Nickel does not issue any Extension Notice, the
twenty-fifth (25th) anniversary of the Start Date.  (c)
    Notwithstanding any other provision of this Agreement, during any Make-up
Period no Availability Charge will be payable to Enercal however during any Month of a
Make-up Period, to the extent that Goro Nickel has not already paid ACOM in respect of
the period giving rise to the Make-up Period, Goro Nickel shall pay Enercal ACOM for
that Month.  3.3
    Survival of rights  (a)
    Except as otherwise expressly provided in this Agreement, termination of this
Agreement shall not affect any rights or obligations of either of the Parties which may
have accrued prior to such termination and shall not affect continuing obligations of
either of the Parties under this Agreement.(b)
    Save as otherwise provided in clause 16.2(e) (Consequences of Force Majeure),
clause 4.2(b) (Start Date notices), this clause 3.3, clause 37, clause 38 and any other
clause expressed to survive termination shall survive termination of this Agreement.  4.
    FUNNEL MECHANISM4.1
    Anticipated Start Date  (a)
    The Parties acknowledge that the Start Date is anticipated to occur on 9
January 2008 and can not occur before 9 January 2008 (or such other date as may be
agreed by the Parties).(b)
    In the event that the Start Date does not occur by the Target Start Date,
Enercal must pay Goro Nickel the Start Date LD Amount each Day as liquidated damages
from the Target Start Date to the Start Date. The total sum of the Start Date LD
Amounts payable by Enercal pursuant to the proviso to the definition of Amount in
Part B of Schedule 9 (Penalties  Start Date LD Amount) will not exceed 1,456,289 and
the 15




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total sum of all other Start Date LD Amounts payable by Enercal will not exceed
4,959,000.(c)
    Enercal shall pay any Start Date LD Amount which becomes due to Goro Nickel
under this clause 4 in respect of any Month within thirty (30) Days of the start of the
following Month.  4.2
    Start Date notices  (a)
    Enercal must give Goro Nickel non-binding estimates of the anticipated Start
Date as follows:  (i)
    not less than three (3) Months in advance of the beginning of
the Month in which Enercal expects the Start Date will occur;(ii)
    not less than four (4) Weeks in advance of the beginning of the
Week in which Enercal expects the Start Date will occur; and(iii)
    not less than forty-eight (48) Hours in advance of the
beginning of the Day on which Enercal expects the Start Date will occur.  (b)
    If:  (i)
    the Start Date has not occurred by the Deadline; or(ii)
    in any complete Month in the period from the date falling 5
months after the Target Start Date to the Deadline, Enercal supplies less than
seventy-five per cent. (75%) of the Target Monthly Availability (except to the
extent Enercals inability to supply such proportion of the Target Monthly
Availability is as a direct result of a Goro Nickel Event),  then Goro Nickel shall be entitled at any time thereafter to terminate this
Agreement upon written notice to Enercal, provided that the Start Date has still not
occurred by the date on which such notice is given by Goro Nickel to Enercal. Upon
such termination, neither Party will have any rights or liabilities under this
Agreement except that Enercal shall be required to indemnify Goro Nickel for all
losses, damages and reasonable and demonstrable costs suffered by Goro Nickel as a
result of the early termination of this Agreement (such amount not to exceed the
Relevant Cap). The Relevant Capis 20,000,000 Dollars if paragraph (i) or (ii)
above (as the case may be) occurs as a result of Enercals wilful disregard of Goro
Nickels need to have Electricity and 10,000,000 Dollars in any other case.(c)
    If as a direct result of a Goro Nickel Event, the effects of which Enercal
could not have avoided or overcome and which makes it impossible for Enercal to give
notice of the Start Date by the Deadline, Enercal will give notice to Goro Nickel
setting out the following:  (i)
    the details of the relevant Goro Nickel Event;(ii)
    the effect that such Goro Nickel Event will have on Enercals
ability to achieve the Start Date by the Deadline and the date to which Enercal
would propose that the Deadline be extended; and 16




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(iii)
    the attempts that Enercal has made to avoid or overcome the
effects of the Goro Nickel Event.  (d)
    Following receipt of any notice in accordance with clause 4.2(c), Goro Nickel
will meet with Enercal with a view to resetting the Deadline, if required, to take into
account the effects that the Goro Nickel Event has had on Enercals ability to give
notice of the Start Date by the Deadline.(e)
    If the Parties agree that it is required to extend the Deadline in the meeting
held in accordance with clause 4.2(d) and agree to an extended Deadline, the Deadline
will be extended to the date so agreed.(f)
    If the Parties are unable to agree that the Deadline is required to be extended
or, if required, the date to which the Deadline should be so extended in accordance
with clause 4.2(e), the issue will be submitted to an Expert for determination. The
appointed Expert will be required to set the Deadline taking into account the effects
that the Goro Nickel Event has had on Enercals ability to give notice of the Start
Date by the Deadline, the attempts that Enercal has taken to overcome or mitigate such
effects and the submissions of the Parties.(g)
    The Parties agree that any decision of the Expert in accordance with this
clause 4.2 shall be (in the absence of manifest error) final and binding on the Parties
and not subject to appeal.(h)
    For the purposes of this clause 4.2 and for the avoidance of doubt, direct
result will include any impact on Prony as a direct result of the Goro Nickel Event
which affects Enercals ability to supply Electricity.(i)
    On, or as soon as reasonably practicable after, any termination of this
agreement pursuant to clause 4.2(b), Goro Nickel shall in good faith calculate any
payment owing to it by Enercal pursuant to clause 4.2(b) and shall notify Enercal of
the amount of such payment (including detailed support for the amount).(j)
    Enercal shall pay the amount calculated pursuant to clause 4.2(i) to Goro
Nickel within ten (10) Business Days of invoice or notification of such amount, which
amount shall bear interest in accordance with clause 10.6 (Late payments).(k)
    Goro Nickel may, at its option, set off any amount payable in accordance with
clause 4.2(j) against any or all other amounts owing (whether or not matured,
contingent or invoiced) between the Parties under this Agreement. The right of set off
shall be without prejudice and in addition to any right of set off, combination of
accounts, lien, charge or other right to which any Party is at any time otherwise
entitled (whether by operation of law, by contract or otherwise). If an amount is
unascertained, Goro Nickel may reasonably estimate the amount to be set off. The
Parties shall make any adjustment payment required within three (3) Business Days of
the amount becoming ascertained.(l)
    Disputed amounts under this clause 4.2 shall be paid by Enercal subject to
refund with interest calculated in accordance with clause 10.6 (Late payments) if the
dispute is resolved in favour of Enercal.  4.3
    Start Date LD informationEnercal will promptly notify Goro Nickel: 17




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(a)
    if it believes that the Start Date will not occur by the Target Start Date,
giving reasons for its belief; and(b)
    of the extent to which it is liable to pay Start Date LD Amounts solely due to
delays in completion of the civil works relating to the second generating unit of the
Facility.  5.
    SALE AND PURCHASE OF CAPACITY AND ELECTRICITY5.1
    Availability and delivery obligationSubject to and in accordance with the terms of this Agreement, during the Contract
Period, Enercal shall in each Hour:  (a)
    make available to Goro Nickel, the Target Net Capacity for that Hour; and(b)
    deliver to Goro Nickel the Electricity associated with the Scheduled Net
Capacity for that Hour.  5.2
    Delivery(a)
    The Electricity to be supplied by Enercal to Goro Nickel under this Agreement shall be
delivered at the Delivery Points.(b)
    Title and risk of loss with respect to all Electricity shall pass to Goro Nickel at the
Delivery Points upon delivery by Enercal of such Electricity to the Delivery Points.5.3
    Obligations under Scheduling Procedures and Electricity SpecificationThe Parties must comply with their respective obligations contained in the Scheduling
Procedures and any obligations contained in the Electricity Specification.6.
    EXTRA ELECTRICITY(a)
    Subject to clauses 6(b) to 6(d), Goro Nickel shall be entitled to request at any time during
the Contract Period delivery of Electricity (Extra Electricity) in excess of the Target Net
Capacity in any Hour or the Contract Limit in paragraph 4(b) of the Scheduling Procedures in
any year.(b)
    Where Goro Nickel requests Extra Electricity, such request must be in accordance with the
Scheduling Procedures, in writing and must specify the amount of Extra Electricity required
and the period in which such Extra Electricity is required to be delivered.(c)
    Enercal must use all reasonable endeavours to satisfy any request for Extra Electricity made
by Goro Nickel in accordance with clause 6(b).(d)
    Where Goro Nickel has not previously requested Extra Electricity in any Hour in accordance
with the Scheduling Procedures and Goro Nickel requires Extra Electricity in that Hour, then
Enercal will provide that Extra Electricity to Goro Nickel if such Extra Electricity is
available.(e)
    Extra Electricity must be made available at the Delivery Points.(f)
    The Extra Electricity Charge in any Month m, ECm, will be calculated as follows: 18




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ECm = The sum of, for each Extra Electricity generation source used to
deliver Extra Electricity in that Month, the Extra Electricity Price in Month m for that
Extra Electricity generation source x the number of kWh of Extra Electricity delivered by
Enercal from that Extra Electricity generation source to the Delivery Points in Month m.7.
    ELECTRICITY BEFORE THE START DATE(a)
    If Goro Nickel requests Electricity in any Hour prior to the Start Date (Early Electricity),
Enercal agrees to:  (i)
    make available in that Hour up to 20,000kW of the Electricity purchased by
Enercal under the PPA; and(ii)
    give Goro Nickel priority to any further Electricity purchased by Enercal under
the PPA so long as Enercal can meet its Public Utilities Obligations after using all
available generation sources on the Enercal System to satisfy such Public Utilities
Obligations.  (b)
    If Goro Nickel requests Early Electricity in any Hour and Enercal is unable to satisfy that
request for Early Electricity in part or in full in accordance with clause 7(a), Enercal will
endeavour to make available Electricity from other generation sources to satisfy such request
of Goro Nickel if possible.(c)
    If the Start Date has not occurred by 1 July 2008, then from 1 July 2008 until the Start
Date, Enercal must in each Hour, make available the Scheduled Net Capacity for that Hour.
Enercal must use all best endeavours to ensure that it is able to fulfil its obligation under
this clause 7(c) including by obtaining Electricity from the Transmission System or by
obtaining supplemental Electricity generation equipment. The price for any Early Electricity
delivered from 1 July 2008 until the Start Date will be the lower of the Early Electricity
Price and the price had such Electricity been delivered after the Start Date under this
Agreement.(d)
    Within thirty (30) Days after receipt of an invoice for Early Electricity delivered in any
Month, Goro Nickel must pay the Early Electricity Price for all Electricity Delivered to Goro
Nickel in any Month before the Start Date.8.
    PAYMENTSGoro Nickel shall, in respect of each Month, from the Start Date until the end of the
Contract Period (and in accordance with the terms of this Agreement) pay to Enercal:  (a)
    the Availability Charge for that Month;(b)
    the Fuel Charge for that Month;(c)
    the Variable Operation and Maintenance Charge for that Month; and(d)
    any Extra Electricity Charge for that Month.  9.
    ADJUSTMENTS9.1
    Availability Penalty  (a)
    At the end of each Month of the Contract Period, Enercal shall calculate the
Actual Monthly Availability for that Month. If in any such Month the Actual Monthly 19




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Availability is less than the Target Monthly Availability, Enercal shall pay to Goro
Nickel an amount (Availability Penalty) calculated in accordance with part A of
schedule 9 (Penalties  Availability Penalty).(b)
    Any Availability Penalty payable pursuant to this clause 9.1 in any Month
during the Contract Period must be included in an invoice issued in respect of that
Month under clause 10 (Billing and Payment) and must be paid by Enercal within thirty
(30) Days of the date of that invoice.  9.2
    Availability factors(a)
    Subject to clause 9.2(b), the Actual Monthly Availability for any Month shall be equal to the
sum of the Actual Capacity for each Hour in that Month. For the avoidance of doubt it is
acknowledged that the Actual Monthly Availability for any Month will be reduced if electricity
made available to Goro Nickel by Enercal in any Hour in respect of that Month does not comply
with the Electricity Specification and to the extent that Enercal is unable to make available
the quantity of Electricity which it is required to make available to Goro Nickel in
accordance with this Agreement in any Hour during that Month.(b)
    Where in any Hour of any Month during the Contract Period, Enercals ability to make
available Electricity is affected by Force Majeure (as specified in the Force Majeure Notice
given in respect of the Force Majeure), the Actual Capacity for that Hour will be determined
as if the Electricity Delivered in that Hour was not affected by the Force Majeure detailed in
the Force Majeure Notice (Deemed Actual Capacity).(c)
    The Target Monthly Availability for any Month shall be equal to the sum of the Scheduled Net
Capacity for each Hour in that Month.9.3
    Availability Credit(a)
    If, in respect of any Hour during the Contract Period the Transmission Metering System
records that electricity in excess of (50,000kW + Surrendered Electricity in that Hour) was
delivered to the Transmission System in that Hour then Goro Nickel shall be entitled to an
Availability Credit in respect of any such excess electricity so recorded in any year in
excess of the first 39,420,000kWh (Availability Credit Electricity). For the avoidance of
doubt, if the Contract Period spans any partial year, the amount of 39,420,000 kWh set out in
this clause 9.3(a) will be reduced proportionally in respect of that year and this same amount
shall be increased to 39,528,000kWh in any leap year.(b)
    The Availability Credit in any Month m, AVCRm, will be calculated as follows:AVCRm = The Unused Capacity Price in Month m x the amount of Availability
Credit Electricity (measured in units of kWh) recorded by the Transmission Metering System
in Month m.(c)
    Any entitlement to an Availability Credit pursuant to this clause 9.3 in any Month will be
deducted from the Availability Charge for that Month and included in the invoice issued in
respect of that Month under clause 10 (Billing and Payment). 20




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10.
    BILLING AND PAYMENT10.1
    Metering SystemThe Metering System shall be used to determine the amount of Electricity Delivered in
each Hour during each Month. In the event that the Metering System is not in service as a
result of maintenance repairs or testing, then, if Goro Nickel has installed a Backup
Metering System, such system shall be used to determine the amount of Electricity Delivered
in each Hour during each Month.10.2
    Invoices(a)
    No later than the tenth (10th) Business Day of each Month, Enercal shall submit an original
invoice or invoices to Goro Nickel showing, in respect of the immediately preceding Month:  (i)
    the Availability Charge, the Fuel Charge, the Variable Operation and
Maintenance Charge, any Extra Electricity Charge, any Availability Credit and the
amount of any Availability Penalty as separate figures; and(ii)
    any other amounts payable by Enercal or Goro Nickel pursuant to this Agreement.  (b)
    Enercal shall also provide, with appropriate supporting documentation, full details of the
calculation of all amounts to be included in an invoice submitted in accordance with clause
10.2(a).(c)
    Invoiced amounts shall be due and payable within thirty (30) Days following receipt of the
invoice.(d)
    Invoices shall be denominated, as to all amounts, other than the Fuel Charge, in Euro, and as
to the components of the Fuel Charge, in Dollars and in Euro (as the case may be).10.3
    PaymentAll payments pursuant to this Agreement shall be made by wire transfer to one or more
New Caledonian bank accounts designated by the Party to receive such payment. All payments
shall be made in full, without deduction or withholding on account of any other amount,
whether by way of set-off or otherwise, except as expressly provided in this Agreement.
Payments shall be considered made when the full amount due is credited to the account of the
recipient.10.4
    Payment of disputed amounts(a)
    If a Party that receives an invoice from the other Party in good faith disputes any amount
provided on the invoice delivered by the other Party, the invoiced Party shall pay the other
Party the undisputed invoiced amounts on the date due. The invoiced Party may withhold any
disputed amounts, provided the invoiced Party shall have notified the other Party in writing
of such dispute and the reasons therefore no later than thirty (30) Days after the invoiced
Party received such invoice. Any dispute pursuant to this clause 10.4(a) shall be resolved in
accordance with clause 10.4(b).(b)
    Upon receipt of any notice of dispute pursuant to clause 10.4(a), the Parties shall
immediately submit such dispute to the ESA Coordinating Committee. If, after thirty (30)
Business Days, the ESA Coordinating Committee is unable to resolve the dispute to the mutual
satisfaction of each Party, the Parties shall immediately submit the dispute to an Expert with
experience in 21




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resolving such disputes or disputes of a similar nature. The Expert shall be required to
resolve the dispute within ten (10) Business Days.(c)
    The amount, if any, determined by the Expert to be due under the disputed invoice shall
become due and payable ten (10) Business Days after such determination, without prejudice to
each Partys right to arbitration pursuant to clause 38 (Arbitration). If, after ten (10)
Business Days, the Expert is unable to resolve the dispute to the mutual satisfaction of the
Parties, the disputed amount shall be paid into an Escrow Account within ten (10) Days after
the Experts decision was required pursuant to clause 10.4(b) and the dispute shall be
resolved in accordance with clause 38 (Arbitration). Upon resolution of such dispute, the
funds placed into the Escrow Account (together with any interest accrued thereon) shall be
disbursed in accordance with the determined resolution of the dispute and any balance
remaining shall be paid to the Party which placed the funds in the Escrow Account.10.5
    Set-offGoro Nickel shall be entitled to set-off amounts owed by Enercal under this Agreement
against amounts owed by Goro Nickel under this Agreement provided, however, that no set-off
shall be made unless the amount to be set-off is liquidated and is due or acknowledged in an
invoice issued by Enercal, a written acknowledgement by Enercal, a final determination of an
Expert appointed under this Agreement, or an arbitral award made in accordance with this
Agreement. Goro Nickel shall also be entitled to set off judicial awards, if any, made by
the courts of France provided, however, that nothing herein shall be construed in derogation
of clause 38 (Arbitration). The rights and obligations of the Parties under this clause 10.5
shall survive termination of this Agreement.10.6
    Late paymentsAny default in payment by either Party beyond any date for payment established under
this Agreement shall accrue interest (without duplication) on the unpaid amount at the Late
Payment Rate from the date upon which payment was due until the date payment is made in full
by or on behalf of the relevant Party. The rights and obligations of the Parties under this
clause 10.6 shall survive termination of this Agreement.10.7
    Failure to issue invoice(a)
    If Enercal fails to issue an invoice in accordance with clause 10.2 (Invoices), then Goro
Nickel may serve a notice on Enercal requiring Enercal to issue the invoice within five (5)
Business Days from and including the date of receipt of such notice by Enercal (such fifth
(5th) Business Day being the Invoice Notice Date). Where Enercal fails to issue
the invoice by the Invoice Notice Date, Enercal appoints Goro Nickel as its attorney to issue
the invoice and, once issued, that invoice shall be treated as an invoice issued by Enercal
for the purposes of this Agreement.(b)
    Failure by Enercal to issue an invoice within the time period specified in clause 10.2(a)
(Invoices) shall not affect the rights and obligations of the Parties under this Agreement and
shall not be a material breach of this Agreement under clause 17.1(a)(iii) (Events of Default).11.
    TSS AND OTHER TAXES11.1
    TSSAll amounts referred to in this Agreement are exclusive of any applicable TSS. 22




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11.2
    Other TaxesSubject to each Partys obligations relating to TSS, each Party shall cause all
royalties, taxes, duties and other sums (including any stamp duty, other documentary taxes,
climate change levy or other environmental tax or levy) legally payable by that Party
arising in connection with this Agreement to be paid.12.
    METERING12.1
    Metering and PQM Systems(a)
    Enercal shall pay for and install the Metering System which will be comprised of several
components that shall each be in accordance with the Metering Specification and accurate
(including each voltage or current transformer which forms part of the Metering System) at all
times to within plus or minus one-fifth of one per cent. (±0.2%). Enercal shall also pay for,
install, own, operate and maintain the PQM Systems (other than the power quality metering
equipment installed on the 33kV connection from the Facility to the Nickel Mine which
equipment shall be installed, owned and operated by Goro Nickel at its expense). Goro Nickel
may, but is not obliged to, install a Backup Metering System. Enercal shall own and maintain
the Metering System and Goro Nickel shall own and maintain any Backup Metering System.(b)
    The Metering System shall be installed and located in such a manner as to provide both
Enercal and Goro Nickel free and unfettered access. The PQM Systems shall be located in
strategic locations and shall be used to monitor the quality of Electricity. The PQM Systems
shall be used to monitor compliance with the Electricity Specification and Enercal must ensure
that those of the PQM Systems owned by Enercal must be capable of isolating the Nickel Mine
from the Enercal System during periods when the Electricity quality does not meet the
Electricity Specification. The use of the PQM Systems will be determined by the ESA
Coordinating Committee.12.2
    Testing of Metering System(a)
    The Metering System shall be tested and calibrated in accordance with the Meter Testing
Procedures.(b)
    Enercal shall test the Metering System for accuracy at intervals determined by the ESA
Coordinating Committee. The direct costs of such tests shall be borne in equal portions by the
Parties.(c)
    In addition, Goro Nickel may require, upon five (5) Business Days prior written notice to
Enercal that Enercal test the Metering System or any part of the Metering System. The costs
of any such additional test shall be borne in equal portions by the Parties, unless such test
indicates that each component of the Metering System required to be accurate to within plus or
minus one-fifth of one per cent. (±0.2%) under this Agreement is accurate to within plus or
minus one-fifth of one per cent. (±0.2%), in which case Goro Nickel shall bear the cost of
such test.12.3
    Inaccuracies in Metering SystemWhen, as the result of a Metering System test conducted pursuant to clause 12.2
(Testing of Metering System), any component of the Metering System required to be accurate
to within plus or minus one-fifth of one per cent. (±0.2%) under this Agreement is
determined to be inaccurate by more than plus or minus one-fifth of one per cent. (±0.2%) or
is otherwise 23




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functioning improperly, then the correct amount of Electricity Delivered in any Hour to Goro
Nickel or the electricity delivered to the Transmission System for the actual period during
which inaccurate measurements were made, if any, shall be determined as follows:  (a)
    first, in respect of Electricity Delivered to Goro Nickel only, if a Backup
Metering System has been installed, the readings of the Backup Metering System shall be
utilised to calculate the correct amount of Electricity Delivered in any such Hour,
unless a test of the Backup Metering System, reveals that the Backup Metering System is
inaccurate by more than one-fifth of one per cent. (0.2%) or is otherwise functioning
improperly;(b)
    in respect of Electricity Delivered to Goro Nickel when no Backup Metering
System has been installed or the Backup Metering System is found to be inaccurate by
more than one-fifth of one per cent. (0.2%) or is otherwise functioning improperly and
in respect of electricity delivered to the Transmission System, the Parties shall
jointly prepare an estimate of the correct reading on the basis of all available
information and such guidelines as may have been agreed to by the ESA Coordinating
Committee; and(c)
    if the period of inaccuracy cannot be accurately determined, or if the Parties
cannot agree on an estimate of the correct reading, the Metering System inaccuracy
shall be deemed to have commenced on the date which is midway between the date the
Metering System was found to be inaccurate and the date of the last Metering System
reading accepted by the Parties as accurate. In no event, however, shall any such
adjustment be made for any period prior to the date on which any component of the
Metering System required to be accurate to within plus or minus one-fifth of one per
cent. (±0.2%) under this Agreement was last tested and found to be accurate within plus
or minus one-fifth of one per cent. (±0.2%) and not otherwise functioning improperly,  and any previous payments made by Goro Nickel or Enercal during the period of
inaccuracy shall be adjusted based on the adjustments to the Metering System readings
provided for in this clause 12.3 and the amount so determined shall be offset against or
added to the relevant amount payable under the next invoice delivered by Enercal under this
Agreement as appropriate.12.4
    Sealing of Metering System(a)
    The Metering System and any Backup Metering System shall be jointly and doubly sealed. Seals
on the Metering System and any Backup Metering System shall be broken by Enercal personnel or
Goro Nickel personnel, but only in the presence of one another, or if required by the ESA
Coordinating Committee, only in the presence of an independent party, unrelated, directly or
indirectly to either Party and mutually agreeable to the Parties (Independent Party) and only
when the Metering System or any Backup Metering System is to be inspected, tested or adjusted
in accordance with the terms of this Agreement.(b)
    Either Enercal or Goro Nickel, as the case may be, shall be given at least forty-eight (48)
hours advance notice of the breaking of seals on the Metering System or any Backup Metering
System. Such notice will specify the date and time at which a Metering System seal is to be
broken. In the event that either Party and/or the Independent Party (if determined by the ESA
Coordinating Committee) is not present at the time specified in such notice, the Party present
may break both seals on whichever of the Metering System or the Backup Metering System that it
owns, and such Party may inspect, test and calibrate the same, in which case the metering of
Electricity Delivered in any Hour shall be determined from that Partys 24




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Metering System or Backup Metering System (as the case may be) until the other Party
schedules a reinspection of the Metering System and any Backup Metering System (as
applicable).(c)
    If the ESA Coordinating Committee has decided that it is appropriate to appoint an
Independent Party to be present when the Metering System or any Backup Metering System is to
be inspected, tested or adjusted in accordance with the terms of this Agreement, then Enercal
and Goro Nickel (as the case may be) shall each provide access for the Independent Party to
its Metering System or Backup Metering System (as the case may be) at all reasonable times for
the purpose of carrying out any such inspection, test or adjustment provided that such access
shall not interfere with the normal business operations of Enercal or Goro Nickel.12.5
    Repair, replacement or recalibration of Metering SystemWhen any component of the Metering System required to be accurate to within plus or
minus one-fifth of one per cent. (±0.2%) under this Agreement, is found to be inaccurate by
more than plus or minus one-fifth of one per cent. (±0.2%) or otherwise not functioning
properly, Enercal shall immediately repair, recalibrate or replace such component of the
Metering System or the Metering System as a whole, as the case may be, at its expense
(except as otherwise provided herein). Upon the completion of any examination, maintenance,
repair or recalibration of, or replacement of any component in, the Metering System such
metering system shall be sealed in the presence of representatives of the Parties and/or the
Independent Party (as decided by the ESA Coordinating Committee).13.
    ADDITIONAL RIGHTS AND OBLIGATIONS OF THE PARTIES13.1
    Enercals additional obligations(a)
    Enercal must procure that, unless required by any Applicable Law, the Enercal System is not
altered in any manner which would adversely affect the ability of Enercal to perform its
obligations under this Agreement.(b)
    If Competent Authorities of France at any time cease to control (indirectly through any
majority owned Affiliate or Competent Authority or directly), or to own more than fifty per
cent. (50%) of the voting share capital of, Enercal, Enercal shall notify Goro Nickel of such
occurrence and shall:  (i)
    within thirty (30) Days of such occurrence, procure that a bank acceptable to
Goro Nickel provides Goro Nickel with an irrevocable on-demand standby letter of credit
or an entity acceptable to Goro Nickel provides some other form of credit support (in
either case in a form and substance satisfactory to Goro Nickel) in respect of its
liabilities under this Agreement in an amount equal to 10,000,000 Euros; and(ii)
    thereafter ensure that Goro Nickel has the benefit of such credit support
document or letter of credit from such entity or bank at all times during the Contract
Period.  13.2
    Reasonable and Prudent OperatorEnercal must act at all times as a Reasonable and Prudent Operator with a view to
ensuring that Electricity is available up to the Target Net Capacity at all times during the
Contract Period other than periods of Planned Outage or as the result of Force Majeure. 25




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13.3
    Goro Nickel financingIf any Lender requires Enercal and/or any entity which has provided Enercal with
financial products or support to enter into any documentation in relation to any financial
product or support to be provided by that Lender to Goro Nickel, then Enercal will (at Goro
Nickels cost) provide all reasonable assistance to such Lenders and Goro Nickel so that
such financial products or support can be provided and such documentation can be executed.
Nothing in this clause 13.3 shall require Enercal to provide any assistance or enter into
any document that would:  (a)
    be inconsistent with; or(b)
    adversely affect the rights of Enercal or any such entity under,
any document to which Enercal or such entity is a party.  13.4
    Expansion of Electricity supply obligation(a)
    Subject to clause 13.4(b), Enercal must procure that:  (i)
    the Facility is designed so that it can at all times, following a request by
Goro Nickel, be expanded by the construction of an additional 50MW electricity
generating unit; and(ii)
    a portion of land immediately adjacent to the Facility is made available so
that the Facility can be expanded in accordance with clause 13.4(a)(i).  (b)
    Where Goro Nickel gives Enercal notice of a request for an expansion of the Facility in
accordance with clause 13.4(a):  (i)
    Enercal undertakes to co-operate with Goro Nickel in co-ordinating all aspects
related to the expansion including the financing and construction arrangements;(ii)
    Enercal acknowledges that, where Prony does not obtain financing for any such
expansion requested by Goro Nickel, Goro Nickel will be entitled to, in accordance with
its rights and obligations under the Utilities and Services Agreement, use its own
funds to construct such expansion on the land referred to in clause 13.4(a)(ii) (which
land is to be made available to Goro Nickel by Prony); and(iii)
    the Parties shall meet to determine any amendments that are required to this
Agreement and to each Project Agreement and shall implement any amendments agreed
following such meeting.  (c)
    Goro Nickel may only give Enercal a request for an expansion of the Facility in accordance
with clause 13.4(a) once.13.5
    Replacement of an Inco Guarantee(a)
    If an entity other than Inco acquires a direct or indirect interest in Goro Nickel, Enercal
acknowledges that an Inco Guarantee (and any other guarantee provided in accordance with this
clause 13.5) may be replaced with:  (i)
    a new guarantee from Inco in the same form as that Inco Guarantee save that the
amount guaranteed under such new guarantee will be at least the proportion of the 26




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amount guaranteed under that Inco Guarantee representing Incos then proportional
ownership interest in the total number of ordinary shares in the capital of Goro
Nickel; and(ii)
    one or more guarantees with the same legal effect as that Inco Guarantee (or
other form of credit support agreed by Enercal, such agreement not to be unreasonably
withheld) provided that any entity giving any such replacement guarantee or other form
of credit support document has a credit rating of at least Baa3 from Moodys Investors
Services, Inc or BBB- from Standard & Poors, a division of The McGraw-Hill Companies,  provided that:  (iii)
    the total sum of the amounts guaranteed (on a several basis) under each
guarantee and other credit support documents provided under this clause 13.5 and in
place at any time will equal the amount guaranteed under that Inco Guarantee; and(iv)
    at no time will the total number of such guarantees and other credit support
documents which replace that Inco Guarantee exceed five (5) (unless Enercal consents to
an increase in the permitted number of guarantees or other credit support documents,
such consent not to be unreasonably withheld).  (b)
    Enercal agrees to execute each guarantee or agreed credit support document which complies
with the requirements of this clause 13.5 and which Goro Nickel requires Enercal to enter
into.(c)
    Notwithstanding clause 13.5(a)(i):  (i)
    from the date of this Agreement until the date of Definitive Acceptance, Goro
Nickel must procure that the proportion of the amount guaranteed by Inco under the Inco
Guarantee in effect until the date of Definitive Acceptance will be at least sixty six
and two thirds per cent. (66 2/3%) of the total amount of that Inco Guarantee as at the
date of that guarantee; and(ii)
    from the date of Definitive Acceptance until 5 years from the date of
Definitive Acceptance, Goro Nickel must procure that the proportion of the amount
guaranteed by Inco under the Inco Guarantee in effect from the date of Definitive
Acceptance will be at least fifty and one tenth per cent (50.1%) of the total amount of
that Inco Guarantee as at the date of that guarantee.  13.6
    Acknowledgements and commitment(a)
    Enercal acknowledges that it is its intention to endeavour to inform Goro Nickel of any
material event or circumstance which may affect the ability of Enercal to perform its
obligations under this Agreement. For the avoidance of doubt, Goro Nickel acknowledges that
failure by Enercal to comply with this clause 13.6(a) shall not be a material breach of this
Agreement under clause 17.1(a)(iii) (Events of Default).(b)
    Enercal shall ensure that the PPA or any alternative arrangement agreed to in writing by Goro
Nickel (such agreement not to be unreasonably withheld where such arrangement will allow
Enercal to continue to perform its obligations under this Agreement) will at all times
continue to be in full force and effect in a form which will allow Enercal to continue to
perform its obligations under this Agreement. 27




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13.7
    Notification(a)
    Where an event of default occurs under any Project Agreement (other than this Agreement),
Enercal must notify Goro Nickel of the details of such event of default and Enercals view of
the effect that such event of default is likely to have on:  (i)
    the ability of Enercal to perform any material obligation under this Agreement;
and(ii)
    the operation, maintenance or ownership of the Facility.  (b)
    If Goro Nickel requests further reasonable information in relation to any event of default
referred to in clause 13.7(a), Enercal must procure that such information is promptly provided
to Goro Nickel.(c)
    Where Enercal delivers a notice under clause 13.7(a):  (i)
    Enercal and Goro Nickel will meet with a view to defining any action required
from either party to minimise any effect on:  (A)
    Enercals ability to perform any material obligation under this
Agreement; or(B)
    the operation, maintenance or ownership of the Facility,  as a result of the event of default detailed in that notice; and(ii)
    Enercal will use its best endeavours to ensure that Goro Nickel is able to
participate in any discussion with Enercal and/or third parties related to such event
of default.  (d)
    For the avoidance of doubt, Enercal acknowledges that the rights and obligations of the
Parties under this clause 13.7 are without prejudice to clauses 17.1(b)(ii) and 17.2(b)
(Termination right).13.8
    Goro Nickel documentation(a)
    Subject to clause 13.8(b), Goro Nickel shall provide Enercal with any existing document
relating to the Nickel Mine project that is determined by Goro Nickel to be reasonably
requested by Enercal and required by Enercal in order to effect the financing of the Facility
under the Finance Documents.(b)
    Enercal must procure that the contents of any document provided by Goro Nickel in accordance
with clause 13.8(a) are kept confidential and that any such document is only provided to an
entity that has entered into a form of confidentiality agreement acceptable to Goro Nickel and
to which Goro Nickel is a party and requiring that entity to keep such document and its
contents confidential.13.9
    Construction activities at the Nickel MineGoro Nickel will, within 30 days after the end of each calendar quarter, provide
Enercal with a report setting out:  (a)
    the construction activities carried out at the Nickel Mine in that quarter;(b)
    whether those activities were substantially those proposed to be carried out in
that quarter (given brief details of the reasons for any discrepancies); and 28




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(c)
    the construction activities proposed to be carried out at the Nickel mine in
the next quarter,  in each case in a manner which will enable Enercal to determine whether or not the
condition specified in clause 17.1(c)(i) has been satisfied.  14.
    CHANGES IN LAW14.1
    Illegality or unenforceability(a)
    Where clause 14.2 (Addition or amendment to electricity generating unit) does not apply in
respect of the Change in Law, in the event that any Change in Law renders, or any proposed
Change in Law could likely render, the performance of this Agreement (in whole or in part)
illegal or materially unenforceable by either Party (a Relevant Change in Law), then clauses
14.1(b) to 14.1(f) (inclusive) shall apply.(b)
    Neither Party shall be in breach of this Agreement to the extent such breach is caused by the
Relevant Change in Law.(c)
    It shall not be a basis for terminating this Agreement that any Relevant Change in Law shall
have occurred.(d)
    The Parties shall meet within ten (10) Business Days of notice by either Party to discuss
and, acting in good faith, agree upon any amendments that may be required to the terms of this
Agreement in order to take account of the Relevant Change in Law such that each Party can
continue to comply with the terms of this Agreement and on the understanding that any such
amendments shall not affect the commercial balance of this Agreement. If a dispute or
difference shall arise between the Parties as to whether such amendments are required or as to
the amendments so required (and a dispute or difference shall be deemed to have arisen if the
Parties have not reached agreement within thirty (30) Days of the written request pursuant to
this clause 14.1(d)) such dispute or difference will be referred to an Expert with experience
in resolving such disputes or disputes of a similar nature to resolve in a manner which
enables each Party to continue to comply with the terms of this Agreement and, for the
avoidance of doubt, the Expert shall be authorised to determine amendments to the terms of
this Agreement in resolving such a dispute (which amendments shall not, so far as practicable,
affect the commercial balance of this Agreement). For the avoidance of doubt, if the Expert is
unable to resolve the dispute to the mutual satisfaction of the Parties, the dispute shall be
resolved in accordance with clause 38 (Arbitration).(e)
    During the period from the date upon which a Relevant Change in Law becomes effective to the
date upon which agreement between the Parties is reached or the Expert or arbitrator makes a
decision, all obligations of the Parties under this Agreement shall be suspended except to the
extent that any obligation is unaffected by the Relevant Change in Law and is able to continue
to be performed (in whole or in part) without affecting the commercial balance of this
Agreement (taking into account each obligation of a Party which is able to so continue to be
performed). Any obligation which is suspended in accordance with this clause 14.1(e) will be
replaced with a replacement obligation to the extent that such replacement obligation is
agreed by the Parties.(f)
    The Parties will use reasonable endeavours to agree replacement obligations in accordance
with clause 14.1(e) (taking into account all reasonable representations made by each Party)
and acknowledge that such replacement obligations will be as similar to the suspended
obligations as is practicable having regard to the nature of the Relevant Change in Law. 29




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14.2
    Addition or amendment to electricity generating unit(a)
    In the event that any Change in Law requires a material addition to or modification of the
Facility or a modification of the operation of the Facility in order to bring the Facility
into compliance with Applicable Laws (as changed by the Change in Law) (Required Works) and
the Required Works are likely to materially increase Enercals costs of complying with its
obligations under this Agreement (and would not otherwise be passed through to Goro Nickel
automatically through the indexation or adjustment of amounts payable by Goro Nickel in
accordance with this Agreement) (Material Adverse Change), then Enercal may within one (1)
Month following the Change in Law giving rise to the Required Works and the Material Adverse
Change give notice (Change Notice) to Goro Nickel setting out, to the extent then available
(having procured the relevant information from Prony where required):  (i)
    the details of the Change in Law, the Required Works (including the period by
which the Required Works must be implemented) and the Material Adverse Change; and(ii)
    Pronys and Enercals proposed remedial works, programme and budget to carry
out the Required Works including the additional costs associated with making available
Electricity during the period that the Required Works are being implemented.  (b)
    To the extent that the information required to be delivered in accordance with clause 14.2(a)
is not all available at the time a Change Notice is given pursuant to clause 14.2(a), such
information shall be provided to Goro Nickel as soon as it becomes available.(c)
    After receipt of the Change Notice, Goro Nickel shall be entitled to serve a notice on
Enercal requiring Enercal to provide (having procured the relevant information from Prony
where required) further information to support the contents of the Change Notice.(d)
    Enercal and Goro Nickel shall, within thirty (30) Days of Enercals receipt of the notice
given by Goro Nickel under clause 14.2(c) (or such longer period as is nominated by Goro
Nickel taking into account the Required Works), use reasonable endeavours to agree upon the
remedial works, programme and budget to carry out the Required Works, failing which agreement
either Party shall be entitled to refer any matter which is not agreed to an Expert with
experience in resolving such disputes or disputes of a similar nature. For the avoidance of
doubt, if the Expert is unable to resolve the dispute to the mutual satisfaction of the
Parties, the dispute shall be resolved in accordance with clause 38 (Arbitration).(e)
    Following approval or determination of the remedial works, programme and budget to carry out
the Required Works, Enercal shall procure that the Required Works are carried out promptly and
diligently and shall notify Goro Nickel of the date on which the Required Works are complete.(f)
    If Enercal does not serve a Change Notice in accordance with clause 14.2(a), Goro Nickel will
not be obliged to compensate Enercal in relation to the Required Works or the Material Adverse
Change.(g)
    In each Month from the date of commencement of operation of the Required Works until the
earlier of the end of the Contract Period and end of the weighted average depreciable life of
the Required Works, an amount, CIL, will be included in the Availability Charge for that
Month, where CIL equals: 30




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(EQUATION)Where:  A
    is half of the total capital costs of implementing the Required Works
(as set out in the agreed or determined budget for the Remedial Works)
(Required Works Cost);B
    is the total number of Years of weighted average depreciable life of the
Required Works determined in accordance with IAS (as in effect at the time of the
Material Adverse Change);b
    is B x 12;I
    is 150 basis points over the rate published by Reuters appearing in the
3rd column on the ISDAFIX2 page entitled ISDA BENCHMARK RATES,
corresponding to the fixing at 11.00 a.m. Frankfurt time (on relevant date) the
maturity of which is B x 2/3, rounded to the nearest whole number. If B x 2/3
(rounded to the nearest whole number) falls in between the published periods then I
shall be calculated as 150 basis points over the rate determined by linear
interpolation of the rates published; andi
    is I/12.  (h)
    Goro Nickel shall not be obliged to make any further payment in respect of the Required Works
in respect of the period after the Contract Period.(i)
    For the avoidance of doubt, the Parties acknowledge that the formula for determining CIL in
clause 14.2(g) will apply only in the circumstances that the Facility comprises two
electricity generating units. If the Facility is expanded in accordance with clause 13.4
(Expansion of Electricity supply obligation), the Parties will meet to determine those
amendments that are required to reflect such expansion in accordance with clause 13.4(b)(iii)
(Expansion of Electricity supply obligation).(j)
    If as a result of the Required Works, Enercal would be required to incur additional ongoing
increased operating and maintenance costs which costs would not otherwise be passed through to
Goro Nickel automatically through the indexation or adjustment of amounts payable by Goro
Nickel in accordance with this Agreement (including for the avoidance of doubt in this clause
14.2) and Enercal has taken all reasonable steps to minimise such additional costs, then Goro
Nickel and Enercal shall meet to determine a mechanism to adjust, as appropriate:  (A)
    the ACOM component of the Availability Charge;(B)
    the Variable Operating and Maintenance Charge; and(C)
    the Fuel Charge,  or to reimburse Enercal by some other agreed reimbursement mechanism such that in the
Months during the Contract Period in which the adjustment or reimbursement is made, Enercal
shall be able to recover half of the additional operating and maintenance costs which were
directly attributable to the Required Works (but, for the avoidance of doubt, no return
thereon). 31




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14.3
    Tax Change in Law(a)
    For the purposes of this clause 14.3, Excluded Tax shall mean income tax, corporation tax,
capital tax, dividend tax, branch tax, interest withholding tax or similar tax or deduction.(b)
    Subject to clauses 14.3 (c) to (e) inclusive below, in the event that:  (i)
    Enercal incurs material additional costs or savings in performing its
obligations under this Agreement as a result of a Tax Change in Law; and(ii)
    such costs or savings would not otherwise be passed through to Goro Nickel
automatically through the indexation or adjustment of amounts payable by Goro Nickel in
accordance with this Agreement,  then such costs or savings will be passed on to Goro Nickel by means of an adjustment to the
amounts payable to Enercal in accordance with clause 8 (Payments) or by some other
reimbursement mechanism agreed between the Parties.(c)
    Any increase or decrease in the amount of an Excluded Tax payable by Enercal shall not be
passed on to Goro Nickel under clause 14.3(b).(d)
    Enercal shall use reasonable endeavours, acting as a Reasonable and Prudent Operator, to
minimise any increased costs and maximise any savings in relation to each Tax Change in Law.(e)
    In the event that the Parties are unable to agree on an adjustment to the amounts payable to
Enercal in accordance with clause 8 (Payments) or by some other agreed reimbursement
mechanism, the matter shall be referred for resolution to an Expert. For the avoidance of
doubt, if the Expert is unable to resolve the dispute to the mutual satisfaction of the
Parties, the dispute shall be resolved in accordance with clause 38 (Arbitration).14.4
    Change in Law costs(a)
    If, as a result of the operation of this clause 14, the amount agreed or determined to be
reimbursable by Goro Nickel to Enercal or which would be required to be passed on by Enercal
to Goro Nickel would result in the total amount payable under clause 8 in any Month, being
twenty per cent. (20%) greater in that Month than the amount of that payment had this clause
14 not been operative, then Goro Nickel shall have the option at any time thereafter to
terminate this Agreement upon written notice to Enercal specifying a termination date (Early
Termination Date).(b)
    On, or as soon as reasonably practicable after, the Early Termination Date of which notice is
given under clause 14.4(a), Enercal shall in good faith calculate the termination payment (the
Termination Payment), in accordance with this clause 14.4(c).(c)
    The Termination Payment will be the remaining depreciated net book value of the second
generating unit of the Facility, with depreciation calculated on a twenty-five year straight
line basis (determined as at the Early Termination Date).(d)
    Enercal shall notify Goro Nickel of the Termination Payment including detailed support for
the Termination Payment calculation. 32




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(e)
    Goro Nickel shall pay the Termination Payment to Enercal within ten (10) Business Days of
invoice or notification of the Termination Payment amount (the Termination Payment Date),
which amount shall bear interest in accordance with clause 10.6 (Late payments).(f)
    Enercal may, at its option, set off the Termination Payment against any or all other amounts
owing (whether or not matured, contingent or invoiced) between the Parties under this
Agreement. The right of set off shall be without prejudice and in addition to any right of
set off, combination of accounts, lien, charge or other right to which any Party is at any
time otherwise entitled (whether by operation of law, by contract or otherwise). If an amount
is unascertained, Enercal may reasonably estimate the amount to be set off. The Parties shall
make any adjustment payment required within three (3) Business Days of the amount becoming
ascertained.(g)
    Disputed amounts under this clause 14.4 shall be paid by Goro Nickel subject to refund with
interest calculated in accordance with clause 10.6 (Late payments) if the dispute is resolved
in favour of Goro Nickel.15.
    ESA COORDINATING COMMITTEE15.1
    Establishment of ESA Coordinating CommitteeEnercal and Goro Nickel shall create a committee made up of three (3) representatives
of Enercal and three (3) representatives of Goro Nickel (ESA Coordinating Committee).15.2
    Meetings of ESA Coordinating Committee(a)
    The ESA Coordinating Committee shall meet as often as it determines is necessary and no less
frequently than quarterly.(b)
    A quorum of the ESA Coordinating Committee shall exist when at least one (1) representative
of each Party is present.(c)
    The ESA Coordinating Committee may conduct its meetings by telephone.15.3
    ESA Coordinating Committee procedures and functions(a)
    Promptly following appointment of the members of the ESA Coordinating Committee pursuant to
clause 15.1 (Establishment of ESA Coordinating Committee), the ESA Coordinating Committee
shall meet to define its internal procedures, which shall, among other things, provide for one
(1) vote for each of Enercal and Goro Nickel, which may be cast by one (1) or by each of a
Partys representatives on the ESA Coordinating Committee.(b)
    In the event the ESA Coordinating Committee is unable to take action as a result of a
deadlock among the representatives, the dispute causing such deadlock shall be referred to the
senior management of the Parties. If the dispute can still not be resolved, it shall be
resolved by an Expert with experience in resolving such disputes or disputes of a similar
nature. For the avoidance of doubt, if the Expert is unable to resolve the dispute to the
mutual satisfaction of the Parties, the dispute shall be resolved in accordance with clause 38
(Arbitration).(c)
    The ESA Coordinating Committee shall define procedures to govern the day-to-day relationship
between Enercal and Goro Nickel. The procedures adopted by the ESA Coordinating Committee in
all respects shall be subject to and consistent with the terms of this Agreement and the scope
of the ESA Coordinating Committees specific responsibilities 33




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listed in clause 15.3(e), and this Agreement shall prevail in the event of any conflict
between this Agreement and the procedures adopted by the ESA Coordinating Committee.(d)
    Without limiting the foregoing, the ESA Coordinating Committee shall not have any authority
to amend this Agreement.(e)
    The functions of the ESA Coordinating Committee shall include those functions set out in this
Agreement and the following:  (i)
    defining the internal procedures of the ESA Coordinating Committee; and(ii)
    establishing day-to-day communication methods, including communications
procedures for the delivery of and payment for Electricity.  (f)
    For the avoidance of doubt, nothing in this clause 15 can be interpreted as granting any
authority to the ESA Coordinating Committee which would detract from Enercals right to make
decisions as a Reasonable and Prudent Operator in carrying out its obligations under this
Agreement.16.
    FORCE MAJEURE16.1
    Relief from liability(a)
    The Parties agree that the provisions of Art. 1148 of the French civil code will not apply to
the provisions of this Agreement. As a result, neither Party shall be relieved from liability
under this Agreement for failure to perform any of its obligations under this Agreement to the
extent that such failure results from or is caused by (a) force majeure or (b) cas fortuit
as each of those two terms is defined under Art. 1148 of the French civil code(b)
    Notwithstanding clause 16.1(a) and subject to the provisions of this clause 16, a Party
shall, except where otherwise specified in this Agreement, be relieved from liability under
this Agreement for breach of any of its obligations under this Agreement if and to the extent
that such a breach results from or is caused by Force Majeure.(c)
    For the avoidance of doubt:  (i)
    Goro Nickels obligation to pay ACFC in any Month prior to any Extension Period
will not be affected by Force Majeure affecting either Party;(ii)
    where in any Hour of any Month during the Contract Period, Enercals ability to
make available Electricity is affected by Force Majeure (as specified in the Force
Majeure Notice given in respect of the Force Majeure) the provisions of clause 9.2(b)
(Availability factors) will apply; and(iii)
    where in any Hour of any Month during the Contract Period, Goro Nickels
ability to take Electricity made available by Enercal is affected, Goro Nickels
obligations to make payment of the Availability Charge in that Month will not be
affected.  16.2
    Consequences of Force Majeure(a)
    Where a Partys performance of its obligations under this Agreement has been affected by
Force Majeure, that Party shall promptly (and in any event no later than five (5) Days of
becoming aware of the Force Majeure) give a notice to the other Party (Force Majeure Notice). 34




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(b)
    A Force Majeure Notice shall (to the extent that such information is reasonably available)
state:  (i)
    a description of the Force Majeure, including the date of the commencement of
the Force Majeure and the extent of such Force Majeure;(ii)
    the anticipated date of removal of such Force Majeure;(iii)
    the cause of such Force Majeure;(iv)
    where Enercal is giving the Force Majeure Notice, the effect that such Force
Majeure has had and will have on:  (A)
    the ability of Enercal to make Electricity available; and(B)
    Enercals daily nominations of Expected Actual Capacity given
in respect of each Hour it has been or expects to be affected by Force Majeure;  (v)
    the steps the Party giving the Force Majeure Notice proposes to take to remove
or mitigate the effects of such Force Majeure on the performance of its obligations
under this Agreement and to mitigate the effects of the non-performance of its
obligations on the other Party as a result of the Force Majeure; and(vi)
    such other details as may be reasonably requested by the other Party.  To the extent that such information is not reasonably available at the time a Force Majeure
Notice is given pursuant to clause 16.2(a), such information shall be notified to the other
Party as soon as it becomes reasonably available.(c)
    Where the Force Majeure Notice indicates that the anticipated date of cessation of the
effects of the Force Majeure on the performance of the affected Partys obligations under this
Agreement is more than five (5) Days from the commencement of the Force Majeure, the Parties
will meet with a view to:  (i)
    agreeing a plan detailing the steps to be taken by the Party affected by the
Force Majeure to remove or mitigate the effects of such Force Majeure on the
performance of its obligations under this Agreement and to mitigate the effects of the
non-performance of its obligations on the other Party as a result of the Force Majeure
(Force Majeure Plan); or(ii)
    agreeing that the Force Majeure cannot be remedied or cannot be remedied within
180 Days.  If the Parties cannot reach agreement under clause 16.2(c)(i) or (ii), the Parties
shall submit the dispute to an Expert with experience in resolving such disputes or disputes
of a similar nature. The Expert shall be required to resolve the dispute by:  (iii)
    if the Expert considers that the Force Majeure can be remedied within 180
Days, taking into account the submissions of the Parties and determining the most
effective Force Majeure Plan; or(iv)
    determining that the Force Majeure cannot be remedied or cannot be remedied
within 180 Days. 35




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For the avoidance of doubt, if the Expert is unable to resolve the dispute to the
mutual satisfaction of the Parties, the dispute shall be resolved in accordance with clause
38 (Arbitration).(d)
    If the Parties agree a Force Majeure Plan or the Expert (or arbitrator) determines a Force
Majeure Plan, the Party whose obligations have been affected by such Force Majeure shall:  (i)
    implement the Force Majeure Plan;(ii)
    take all other reasonable steps to mitigate the effects of such Force Majeure
on the performance of its obligations under this Agreement and to mitigate the effects
of the non-performance of its obligations on the other Party as a result of the Force
Majeure;(iii)
    give regular updates to the other Party setting out the progress of the
implementation of the Force Majeure Plan and the likely date or dates on which the
performance of each of its affected obligations will resume; and(iv)
    resume the performance of such obligations as soon as reasonably practicable
and notify the other Party of such resumption accordingly.  (e)
    If the Parties do not agree a Force Majeure Plan and agree (or the Expert or arbitrator
determines) that the Force Majeure cannot be remedied or cannot be remedied within 180 Days,
then either Party shall be entitled to terminate this Agreement on written notice to the
other. Upon such termination, subject to clause 16.2(f), neither Party will have any rights or
liabilities under this Agreement other than those under clause 18 (Confidentiality) which
shall continue for a period of five (5) years after such termination. For the avoidance of
doubt, Goro Nickel shall have no right to:  (i)
    terminate this Agreement pursuant to this clause 16.2(e); or(ii)
    claim that the performance of its obligations under this Agreement are affected
by Force Majeure,  solely on the basis that it is unable to use Electricity which is made available to it by
Enercal on the terms of this Agreement.  (f)
    If Goro Nickel elects to terminate this Agreement pursuant to clause 16.2(e) (the date of
such termination being the Early Termination Date) Goro Nickel will pay Enercal a termination
payment (the Termination Payment),  (i)
    if the Early Termination Date falls before the twenty-fifth (25th)
anniversary of the Start Date, the amount required to indemnify Enercal for all losses,
damages and reasonable and demonstrable costs suffered by Enercal as a result of the
early termination of this Agreement such amount being equal to the AC Present Value
(calculated as of the Early Termination Date); and(ii)
    if the Early Termination Date falls after the twenty-fifth (25th)
anniversary of the Start Date, the amount required to indemnify Enercal for all losses,
damages and reasonable and demonstrable costs suffered by Enercal as a result of the
early termination of this Agreement up to twenty per cent. (20%) of the demonstrable
fixed costs of operating and maintaining the second generating unit at the Facility
(calculated as of the Early Termination Date in respect of the period from the Early
Termination Date to the end of the Extension Period in which the Early Termination Date
falls). 36




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(g)
    On, or as soon as reasonably practicable after, the Early Termination Date of which notice is
given under clause 16.2(e), Enercal shall in good faith calculate the Termination Payment.(h)
    Enercal shall notify Goro Nickel of the Termination Payment including detailed support for
the Termination Payment calculation.(i)
    Goro Nickel shall pay the Termination Payment to Enercal within ten (10) Business Days of
invoice or notification of the Termination Payment amount (the Termination Payment Date),
which amount shall bear interest in accordance with clause 10.6 (Late payments).(j)
    Enercal may, at its option, set off the Termination Payment against any or all other amounts
owing (whether or not matured, contingent or invoiced) between the Parties under this
Agreement. The right of set off shall be without prejudice and in addition to any right of
set off, combination of accounts, lien, charge or other right to which any Party is at any
time otherwise entitled (whether by operation of law, by contract or otherwise). If an amount
is unascertained, Enercal may reasonably estimate the amount to be set off. The Parties shall
make any adjustment payment required within three (3) Business Days of the amount becoming
ascertained.(k)
    Disputed amounts under this clause 16.2 shall be paid by Goro Nickel subject to refund with
interest calculated in accordance with clause 10.6 (Late payments) if the dispute is resolved
in favour of Goro Nickel.17.
    TERMINATION17.1
    Events of DefaultEvent of Defaultmeans:  (a)
    the occurrence at any time after the Start Date with respect to a Party (the
Defaulting Party) of any of the following events:  (i)
    (Insolvency) the Party:  (A)
    is dissolved or is in a state of ceasing
payments (état de cessation de paiements);(B)
    is subject to a procedure of amicable
settlement (réglement amiable) or generally makes a general
assignment, arrangement or composition with or for the benefit of its
creditors;(C)
    institutes or has instituted against it an
insolvency or liquidation (redressement ou liquidation judiciaire)
proceeding or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, that proceeding or petition:  I.
    results in such Party being
declared insolvent (en état de cessation de paiements) or
being liquidated or in the making of an order for its
winding-up or liquidation; orII.
    is not withdrawn, dismissed,
discharged, stayed or restrained in each case within thirty
(30) Days of the institution or presentation of that proceeding
or petition; 37




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(D)
    has a resolution passed for its dissolution or
liquidation (other than pursuant to a merger);(E)
    has a secured party take possession of all or
substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or
against all or substantially all its assets and that secured party
maintains possession, or that process is not withdrawn, dismissed,
discharged, stayed or restrained, in each case within thirty (30) Days
of that event;(F)
    causes or is subject to any event with respect
to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses
17.1(a)(i)(A) to 17.1(a)(i)(E) (inclusive); or(G)
    takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts referred to in this clause 17.1(a)(i),  (each of the foregoing events an Insolvency Event);(ii)
    (Non-Payment) the Party fails to pay any amount when due and
payable under this Agreement, and that failure is not remedied on or before the
thirtieth (30th) Business Day after the Non-Defaulting Party gives
the Party notice of that failure;(iii)
    (Material Obligations) the Party, where not affected by Force
Majeure, fails to perform a material obligation or material obligations under
this Agreement (other than an obligation referred to in clause 17.1(a)(ii) or
17.1(b)(i) or an obligation to deliver Electricity), which failure has a
material adverse effect on the rights of the other Party under this Agreement
and that failure is not remedied:  (A)
    within thirty (30) Business Days where the
Defaulting Party cannot demonstrate (within thirty (30) Business Days
following the Non-Defaulting Party giving the Defaulting Party notice
of that failure) to the Non-Defaulting Partys satisfaction (determined
by the Non-Defaulting Party acting reasonably) that the Defaulting
Party is diligently pursuing a remedy for that failure; or(B)
    within sixty (60) Business Days (or such other
period of time agreed by the Non-Defaulting Party) where the Defaulting
Party demonstrates (within thirty (30) Business Days following the
Non-Defaulting Party giving the Party notice of that failure) to the
Non-Defaulting Partys satisfaction (determined by the Non-Defaulting
Party acting reasonably) that the Defaulting Party is diligently
pursuing a remedy for that failure;  (b)
    the occurrence at any time with respect to Enercal (the Defaulting Party) of
any of the following events:  (i)
    (Insurance) any insurance which is agreed to be required under
this Agreement, or which is required under Applicable Laws, to be effected and
maintained by Enercal is not so effected and maintained, becomes voidable 38




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(whether for lack of disclosure, breach of condition or otherwise) or is
cancelled and:  (A)
    Enercal cannot demonstrate to Goro Nickels
satisfaction that Enercal is diligently pursuing a remedy for such
failure; or(B)
    Enercal demonstrates to Goro Nickels
satisfaction that Enercal is diligently pursuing a remedy for that
failure and such failure is not remedied on or before the thirtieth
(30th) Business Day following such failure;  (ii)
    (Default) the occurrence of any event of default (save to the
extent that such event of default is caused by Goro Nickel) under any Project
Agreement (other than this Agreement):  (A)
    which is notified by Enercal to Goro Nickel
under clause 13.7 (Notification); or(B)
    which ought to have been notified by Enercal to
Goro Nickel under clause 13.7 (Notification),  which has not been waived by each non-defaulting party to that Project
Agreement and any non-defaulting party indicates that it intends to, or
actually seeks to, initiate any form of enforcement proceeding under such
Project Agreement which:  (A)
    Enercal agrees;(B)
    Goro Nickel demonstrates; or(C)
    an Expert determines,  will adversely affect:  (A)
    the ability of Enercal to perform any material
obligation under this Agreement; or(B)
    the operation, maintenance or ownership of the
Facility where such effect may have a material effect on Goro Nickels
rights under this Agreement; and  (iii)
    (Level Three Disruption Process) a Level Three Disruption
Process is Unsuccessful;(iv)
    (Two Level Three Disruption Processes in 12 months) a Level
Three Disruption Process is Successful but another Level Three Disruption
Process occurs within 12 months thereafter;(v)
    (Prevention of Disruption Process) Enercal or Prony wilfully
prevent the implementation of a Disruption Process;(vi)
    (Representation or Warranty) any representation or warranty
made by Enercal in clause 19 (Representations and Warranties) of this
Agreement proves to have been false or misleading at the time it was made in a
way that 39




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materially adversely affects the rights of Goro Nickel under this Agreement
unless remedied to the satisfaction of Goro Nickel;(vii)
    (Credit Support) any Credit Support Document relating to
Enercals obligations under this Agreement expires or terminates or fails or
ceases to be in full force and effect for the purposes of this Agreement (in
any case other than in accordance with its terms where, if so required by this
Agreement, a replacement is immediately provided) prior to the satisfaction of
all obligations of Enercal under this Agreement without the written consent of
Goro Nickel; and(viii)
    (Force Majeure) Enercal fails to comply with any Force Majeure Plan agreed
between the Parties or determined by an Expert (or arbitrator); and  (c)
    (Abandonment) at any time prior to the date of Definitive Acceptance, (i) Goro
Nickel (the (Defaulting Party) voluntarily ceases to perform all or substantially all
construction activities of the Nickel Mine without interruption for a period of 180
days, (ii) Enercal has issued (at the end of such period) a notice requesting a
certificate from Goro Nickel to the effect that Goro Nickel intends to resume or cause
to be resumed all or substantially all such construction activities and (iii) Goro
Nickel has either not delivered such a certificate within 180 days of receipt of such
notice from Enercal or, having so delivered such a certificate, Goro Nickel has not
resumed all or substantially all construction activities at the Nickel Mine within a
period of 180 days of the date of such certificate. For the purposes of this clause
17.1(c), Goro Nickel shall be deemed not to have voluntarily ceased to perform
construction activities at the Nickel Mine if such cessation:  (A)
    is caused by Goro Force Majeure;(B)
    is directly caused by a failure by Prony or
Enercal to perform any of their obligations under the Project
Agreements or otherwise by an absence of power or water and provided
that such failure or absence is not caused by Goro Nickel;(C)
    is at a time that either Enercal or Prony is
affected by an Insolvency Event provided that such Insolvency Event has
not been caused by Goro Nickel; or(D)
    follows an abandonment of the Facility by Prony
regardless of the cause of such abandonment provided that such
abandonment was not caused by Goro Nickel;  (d)
    the occurrence at any time with respect to Goro Nickel (the Defaulting Party)
of any of the following events:  (i)
    (Prevention of Disruption Process) once a Disruption Process
has been initiated, Goro Nickel wilfully prevents the implementation of the
same;(ii)
    (Representation or Warranty) any representation or warranty
made by Goro Nickel in clause 19 (Representations and Warranties) of this
Agreement proves to have been false or misleading at the time it was made in a
way that materially adversely affects the rights of Enercal under this
Agreement unless remedied to the satisfaction of Enercal; 40




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(iii)
    (Credit Support) any Credit Support Document relating to Goro
Nickels obligations under this Agreement expires or terminates or fails or
ceases to be in full force and effect for the purposes of this Agreement (in
any case other than in accordance with its terms where, if so required by this
Agreement, a replacement is immediately provided) prior to the satisfaction of
all obligations of Enercal under this Agreement without the written consent of
Enercal; and(iv)
    (Force Majeure) Goro Nickel fails to comply with any Force
Majeure Plan agreed between the Parties or determined by an Expert (or
arbitrator).  If an Expert is to be selected to make a determination in accordance with clause
17.1(b)(ii) (Default), then the reference to twenty-one (21) Business Days in the definition
of Expert in clause 1.1 (Definitions) will be deemed to be two (2) Business Days.17.2
    Termination right(a)
    If, at any time, an Event of Default (other than an Event of Default under clause 17.1(b)(ii)
(Default)) has occurred and is continuing, the Non-Defaulting Party may designate a Business
Day as an early termination date with respect to this Agreement (the Early Termination Date)
by giving not less than thirty (30) Days notice to the Defaulting Party. This notice shall
specify the relevant Event of Default.(b)
    If, at any time, an Event of Default under clause 17.1(b)(ii) (Default) has occurred, the
Non-Defaulting Party may designate a Business Day as an early termination date with respect to
this Agreement (the Early Termination Date) by giving notice to the Defaulting Party. This
notice shall specify the relevant Event of Default.(c)
    The rights under clauses 17.2(a) and 17.2(b) are in addition to any other remedies available
under this Agreement or at law.17.3
    Early Termination DateIf notice designating an Early Termination Date is given under clause 17.2 (Termination
right), the Early Termination Date will occur on the date so designated unless the
circumstances giving rise to the Event of the Default are no longer continuing on the Early
Termination Date.17.4
    Termination Payment(a)
    On, or as soon as reasonably practicable after, the Early Termination Date of which notice is
given under clause 17.2, the Non-Defaulting Party shall in good faith calculate the
termination payment (the Termination Payment), in accordance with this clause 17.4.(b)
    Where Enercal is the Defaulting Party, the Termination Payment will be the amount required to
indemnify Goro Nickel for all losses, damages and reasonable and demonstrable costs suffered
by Goro Nickel as a result of the early termination of this Agreement such amount not to
exceed the Applicable Cap. The Applicable Capis 20,000,000 Dollars if the Early Termination
Date occurs as a result of Enercals wilful disregard of Goro Nickels need to have
Electricity and 10,000,000 Dollars in any other case.(c)
    Where Goro Nickel is the Defaulting Party, then:  (i)
    the Termination Payment will be: 41




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(A)
    if the Early Termination Date falls before the Start Date, the
amount required to indemnify Enercal for all losses, damages and reasonable and
demonstrable costs suffered by Enercal as a result of the early termination of
this Agreement up to the amount determined as at the Early Termination Date in
accordance with the payment schedule set out in Annex 1 of the Inco Guarantee
in place as at the Early Termination Date;(B)
    if the Early Termination Date falls on or after the Start Date
but before the twenty-fifth (25th) anniversary of the Start Date,
the amount required to indemnify Enercal for all losses, damages and reasonable
and demonstrable costs suffered by Enercal as a result of the early termination
of this Agreement such amount (the Goro Nickel Termination Payment) being equal
to the AC Present Value (calculated as of the Early Termination Date); and(C)
    if the Early Termination Date falls after the twenty-fifth
(25th) anniversary of the Start Date, the amount required to
indemnify Enercal for all losses, damages and reasonable and demonstrable costs
suffered by Enercal as a result of the early termination of this Agreement up
to twenty per cent. (20%) of the demonstrable fixed costs of operating and
maintaining the second generating unit at the Facility (calculated as of the
Early Termination Date in respect of the period from the Early Termination Date
to the end of the Extension Period in which the Early Termination Date falls);  (ii)
    any payment of or on account of a Termination Payment made under any Inco
Guarantee shall constitute pro tantosatisfaction of Goro Nickels obligation to pay
such Termination Payment;(iii)
    where clause 17.4(c)(i)(A) or (C) above applies, Enercal will use all
reasonable endeavours to minimise the amount of its losses, damages and costs; and(iv)
    where clause 17.4(c)(i)(A) applies and the amount paid under the relevant Inco
Guarantee exceeds the actual amount of Enercals losses, damages and costs, Enercal
will pay an amount equal to the excess to Goro Nickel within 30 days of such actual
amount being finally agreed between the Parties or in the absence of agreement
determined in accordance with clause 38 (Arbitration).  (d)
    The Non-Defaulting Party shall notify the Defaulting Party of the Termination Payment
including detailed support for the Termination Payment calculation.(e)
    The Defaulting Party shall pay the Termination Payment to the Non-Defaulting Party within ten
(10) Business Days of invoice or notification of the Termination Payment amount (the
Termination Payment Date), which amount shall bear interest in accordance with clause 10.6
(Late payments).(f)
    The Non-Defaulting Party may, at its option, set off the Termination Payment against any or
all other amounts owing (whether or not matured, contingent or invoiced) between the Parties
under this Agreement. The right of set off shall be without prejudice and in addition to any
right of set off, combination of accounts, lien, charge or other right to which any Party is
at any time otherwise entitled (whether by operation of law, by contract or otherwise). If an
amount is unascertained, the Non-Defaulting Party may reasonably estimate the amount to be set
off. The Parties shall make any adjustment payment required within three (3) Business Days of
the amount becoming ascertained. 42




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(g)
    Disputed amounts under this clause 17.4 shall be paid by the Defaulting Party subject to
refund with interest calculated in accordance with clause 10.6 (Late payments) if the dispute
is resolved in favour of the Defaulting Party.(h)
    The rights and obligations of the Parties under this clause 17.4 shall survive termination of
this Agreement.17.5
    Reimbursement of Termination Payment(a)
    If Goro Nickel makes a Termination Payment (or a Termination Payment is made on Goro Nickels
behalf pursuant to a Credit Support Document) following an Early Termination Date in
accordance with this clause 17 or clause 16, Enercal must use its best endeavours to operate
the Enercal System in a manner that will allow any reimbursement of the Termination Payment
paid by Goro Nickel (or on Goro Nickels behalf pursuant to a Credit Support Document) to be
maximised in accordance with clause 17.5(b) up to the amount of the Termination Payment.(b)
    If, in respect of any Hour from the Early Termination Date referred to in clause 17.5(a)
until the end of the Contract Period:  (i)
    the Transmission Metering System records that electricity in excess of 50,000kW
was delivered to the Transmission System in that Hour; and(ii)
    the full amount of the Termination Payment has not already been fully accrued,  then Goro Nickel shall be entitled to a Reimbursement Credit in respect of any such
excess electricity so recorded (Reimbursement Credit Electricity). For the purposes of
this clause 17.5 only, the end of the Contract Period will be determined as if the
Early Termination Date had not occurred and will be:  (A)
    if the Early Termination Date does not fall within an Extension
Period, the 25th anniversary of the Start Date; or(B)
    if the Early Termination Date falls within an Extension Period,
the date of expiration of that Extension Period.  (c)
    The Reimbursement Credit in any Month m, RCRm, will be calculated as follows:RCRm = The Reimbursement Credit Amount x the amount of Reimbursement Credit
Electricity (measured in units of kWh) recorded by the Transmission Metering System in Month
m.(d)
    Any entitlement to a Reimbursement Credit pursuant to this clause 17.5 in respect of any
Month will be payable by Enercal to Goro Nickel by the fifteenth (15th) Business
Day of the following Month.(e)
    This clause 17.5 shall survive termination of this Agreement.18.
    CONFIDENTIALITY(a)
    The Parties shall treat the terms of this Agreement and all information provided under or in
connection with this Agreement (Confidential Information) as confidential and shall not
disclose Confidential Information without the prior written consent of the other Party, save
that consent shall not be required for disclosure: 43




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(i)
    to directors, employees or Affiliates of a Party, provided that they in turn
are required by that Party to treat the Confidential Information as confidential in
favour of the other Party on terms substantially the same as those set out in this
clause 18;(ii)
    to persons professionally engaged by a Party to the extent required in relation
to such engagement, provided that they in turn are required by that Party to treat the
Confidential Information as confidential in favour of the other Party on terms
substantially the same as those set out in this clause 18;(iii)
    to the extent required by any Competent Authority having jurisdiction over
that Party;(iv)
    to any bank, other financial institution or rating agency to the extent
required in relation to the financing of a Partys business activities, provided that
the bank, or other financial institution or rating agency, as the case may be, is
required by that Party to treat the Confidential Information as confidential in favour
of the other Party on terms substantially the same as those set out in this clause 18;(v)
    to the extent required by any Applicable Law, judicial process or the rules and
regulations of any recognised stock exchange, or to any Expert or arbitrator to the
extent necessary for the resolution of any dispute arising under this Agreement;(vi)
    to any intending assignee of the rights and interests of a Party under this
Agreement or to a person intending to acquire an interest in a Party or that Partys
Affiliate provided that the intending assignee or acquirer in turn is required by that
Party to treat the Confidential Information as confidential in favour of the other
Party on terms substantially the same as those set out in this clause 18; and(vii)
    to the extent that the Confidential Information is in or lawfully comes into
the public domain other than by breach of this clause 18.  (b)
    The rights and obligations of the Parties under this clause 18 shall survive termination of
this Agreement and shall continue for a period of five (5) years after such termination.19.
    REPRESENTATIONS AND WARRANTIESEach Party represents and warrants to the other Party that, (save in the case of clause
19(d)) as of the date of this Agreement and (in the case of clause 19(d)) as of the date
that Electricity is first required to be delivered under this Agreement:  (a)
    (Status) it is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation (and, if relevant under those laws,
in good standing);(b)
    (Power) it has the power:  (i)
    to execute this Agreement and any other documentation relating
to this Agreement to which it is a party;(ii)
    to deliver this Agreement and any other documentation relating
to this Agreement that it is required by this Agreement to deliver; and(iii)
    to perform its obligations under this Agreement and has taken
all necessary action to authorise that execution, delivery and performance; 44




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(c)
    (No Violation or Conflict) the execution, delivery and performance referred to
in clause 19(b) do not violate or conflict with any law applicable to it, any provision
of its constitutional documents, any order or judgment of any court or other Competent
Authority applicable to it or any of its assets or any contractual restriction binding
on or affecting it or any of its assets;(d)
    (Required Authorisations) all governmental and other licences, authorisations,
permits, consents, contracts and other approvals (if any) that are required to enable
the Party to fulfil any of its obligations under this Agreement which it is required to
perform on the date that Electricity is first required to be delivered under this
Agreement (Required Authorisations) have been obtained and are in full force and effect
and all conditions of any Required Authorisations have been complied with;(e)
    (Obligations Binding) its obligations under this Agreement constitute its
legal, valid and binding obligations, enforceable in accordance with their respective
terms subject to applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors rights generally and subject, as to enforceability,
to equitable principles of general application (regardless of whether enforcement is
sought in a proceeding in equity or at law);(f)
    (No Event of Default)no Event of Default, or event which with notice and/or
lapse of time would constitute an Event of Default, has occurred with respect to it and
no such event would occur as a result of its entering into or performing its
obligations under this Agreement;(g)
    (No Litigation) no litigation, arbitration or administrative suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency, official
or arbitrator is pending or, so far as it is aware, threatened against it which would
result in a material adverse change in such Partys financial condition or its ability
to perform its obligations under this Agreement, or that is likely to affect the
legality, validity or enforceability against it of this Agreement;(h)
    (No Reliance) it is not relying upon any representations of the other Party
other than those expressly set out in this Agreement;(i)
    (Principal) other than in the case of Goro Nickel acting through and on behalf
of its New Caledonian branch, it has negotiated, entered into and executed this
Agreement as principal (and not as agent or in any other capacity, fiduciary or
otherwise);(j)
    (Risk Assumption) it has entered into this Agreement with a full understanding
of the material terms and risks of this Agreement and it is capable of assuming those
risks; and(k)
    (No Advice) the other Party is not acting as a fiduciary or an adviser for it,
nor has the other Party given to it any advice, representation, assurance or guarantee
as to the expected performance, benefit or result of this Agreement.  20.
    PERMITS AND OTHER APPROVALS20.1
    Responsibility for Permits and Other Approvals  (a)
    Without prejudice to clause 20.2 (Assistance with obtaining and maintaining
Permits and Other Approvals) Enercal shall be solely and fully responsible for
obtaining and 45




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maintaining all Permits and Other Approvals necessary for carrying out its
obligations under this Agreement.(b)
    For the avoidance of doubt, any failure or refusal of a third party to issue a
Permit or Other Approval will not be an Excusing Factor for the purposes of this
Agreement and will not relieve Enercal from any obligation under this Agreement to
obtain such Permit or Other Approval.  20.2
    Assistance with obtaining and maintaining Permits and Other ApprovalsUpon receiving a written request from Enercal so to do, Goro Nickel shall take such
steps as are reasonable in the circumstances to assist Enercal to obtain and/or maintain any
of the Permits and any Other Approval provided that, where Enercal makes any such request of
Goro Nickel, Enercal shall:  (a)
    prior to the date upon which its request to Goro Nickel in accordance with this
clause 20.2 is submitted, have done all such things as it is reasonable for Enercal,
acting as a Reasonable and Prudent Operator, to have done and as are necessary to
obtain and/or maintain any Permit or Other Approval which is the subject of such
request;(b)
    notwithstanding the making of a request of Goro Nickel in accordance with this
clause 20.2, continue diligently to pursue the grant and/or the maintenance of any
Permit or Other Approval which is the subject of such a request;(c)
    at the same time that it submits its request to Goro Nickel, disclose to Goro
Nickel full details of the steps which Enercal has, prior to the date of the written
request, taken to obtain and/or maintain the Permit or Other Approval which is the
subject of the request and of the steps it is continuing to take with respect to the
grant and/or maintenance of such Permit or Other Approval;(d)
    provide Goro Nickel with such assistance and information as Goro Nickel may
reasonably request in connection with Enercals request; and(e)
    bear all costs relating to the obtaining and/or maintaining of any Permit or
Other Approval and shall indemnify Goro Nickel in respect of the same.  21.
    ASSIGNMENT21.1
    Prohibition of assignmentSubject to clause 21.2 (Assignment by way of security), neither Party shall assign or
transfer to any person any of its rights or obligations in respect of this Agreement
(including, for the avoidance of doubt, as part of any statutory merger or fusion) without
the written consent of the other Party (which consent shall not be unreasonably withheld or
delayed).21.2
    Assignment by way of securityEither Party may assign its rights under this Agreement by way of security to or in
favour of any bank or financial institution in relation to the financing of that Partys
business activities.22.
    LIABILITIES22.1
    Consequential Loss 46




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Except as specifically provided in this Agreement, neither Party shall be liable to the
other Party for any matter arising out of or in connection with this Agreement in respect of
any Consequential Loss suffered by the other Party.22.2
    Limitation on liability(a)
    Subject to clause 22.2(b), the liability of each Party to the other for breach of this
Agreement (including for the avoidance of doubt, any liability to pay an Availability Penalty)
is limited to an amount of four million (4,000,000) Euros per year (as such amount will be
adjusted each year from the date of this Agreement in accordance with the Agreed Index).(b)
    The annual limit referred to clause 22.2(a) shall not apply to:  (i)
    any indemnity under clause 20 or clause 24 of this Agreement;(ii)
    any amounts payable on a termination of this Agreement; and(iii)
    any amount payable in accordance with clause 4.1(b) (such amounts being
limited, for the avoidance of doubt, to the amount set out in clause 4.1(b)).  22.3
    Reasonable pre-estimateEach Party acknowledges that the payment obligations in clauses 4 (Funnel Mechanism)
and 9 (Adjustments) are reasonable in light of the anticipated harm and the difficulty of
estimation or calculation of actual damages upon early termination of this Agreement or upon
the other events referred to in those provisions. Each Party waives the right to contest
those payments as an unreasonable penalty.23.
    INSURANCE23.1
    Insurance policies(a)
    Subject to clause 23.1(b), Enercal shall or shall procure that its Affiliate shall, at its
sole cost and expense, effect and maintain on a primary and non-contributory basis the
insurance policies and the levels of deductibles described in schedule 10 (Insurance) in the
amounts and on the terms provided herein and therein with insurers deemed acceptable by Goro
Nickel (acting reasonably); provided, however, that such amounts and terms may be changed from
time to time with the prior written consent of Goro Nickel, which consent shall not be
unreasonably withheld. Nothing shall prevent Enercal, at its costs and expense, and for its
exclusive benefit, from procuring insurance coverage in addition to the minimum coverages
specified in schedule 10 (Insurance). Prior to placing the initial insurance policies
described in schedule 10 (Insurance) Enercal shall obtain Goro Nickel approval of such
policies.(b)
    Enercal shall not be required to effect and maintain any insurance policy which is
Unavailable.(c)
    If any insurance policy described in schedule 10 (Insurance) and required to be effected and
maintained by Enercal is not so effected and maintained, becomes voidable (whether for lack of
disclosure, breach of condition or otherwise) or is cancelled, Enercal will notify Goro Nickel
of such occurrence. Upon receipt of such notice, Goro Nickel will, at Enercals expense, use
reasonable endeavours to assist Enercal to effect and maintain the required insurance policy.
For the avoidance of doubt, while Goro Nickel continues to assist Enercal in accordance with
this clause, Enercal will not be a Defaulting Party for the purposes of clause 17.1(b)(i)
(Events of Default). 47




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23.2
    Endorsements(a)
    Enercal shall cause its insurers to provide the following endorsement items in its
comprehensive or commercial general liability insurance policies:  (i)
    Goro Nickel, Inco Australia Management Limited and Inco and the employees of
each of them shall be additional insured under such policies;(ii)
    the insurance shall be primary with respect to the interest of the employees of
each of Goro Nickel, Inco Australia Management Limited and Inco and any other insurance
maintained by them is excess and not contributory with such policies;(iii)
    such policies shall include standard cross liability clauses; and(iv)
    notwithstanding any provision of the policies, the policies may not be
cancelled, non-renewed or materially changed by the insurer without the insurer giving
thirty (30) Days prior written notice or in the case of cancellation for non-payment
of any premium, thirty (30) Days prior written notice to the insured party.  (b)
    Enercal must procure that each insurance policy required to be effected and maintained under
this clause 23 is not cancelled, non-renewed or materially changed by the insurer without Goro
Nickel being given thirty (30) Days prior written notice or in the case of cancellation for
non-payment of any premium, thirty (30) Days prior written notice.(c)
    Enercal shall cause its insurers to waive all rights of subrogation against Goro Nickel, Inco
Australia Management Limited and Inco and against the employees, directors, agents,
shareholders and contractors of each of Goro Nickel, Inco Australia Management and Inco in
respect of a claim arising under its insurance policies, unless such claim arises from wilful
misconduct or gross negligence of the other Party or of the other Partys employees,
directors, agents, shareholders or contractors.23.3
    Insurance certificatesEnercal shall cause its insurers or agents to provide Goro Nickel with certificates of
insurance evidencing the policies and terms specified in this clause 23 and schedule 10
(Insurance). Failure by Enercal to obtain the insurance coverage or certificates of
insurance required by this clause 23 and schedule 10 (Insurance) shall not relieve Enercal
of the insurance requirements provided herein or therein or in any way relieve or limit
Enercals obligations and liabilities under any other provision of this Agreement. If
Enercal shall fail to procure or maintain any insurance required pursuant to this clause 23
and schedule 10 (Insurance), Goro Nickel shall have the right to procure such insurance at
Enercals expense, provided Goro Nickel shall have given thirty (30) Days prior written
notice to Enercal of its intention to exercise such right unless such intention arises from
Enercals non-payment of premiums for existing insurance in which case Goro Nickel shall
have given at least five (5) Days prior written notice of such intention.24.
    INDEMNIFICATIONEach Party shall indemnify and hold harmless the other Party and each of its Affiliates
and each of their respective directors, officers, shareholders, controlling persons,
partners, employees, agents, contractors, subcontractors and representatives and each of
their respective heirs, successors, and assigns from and against any and all damages,
claims, losses, liabilities, actions, causes of action, costs, expenses, and obligations
(including all reasonable attorneys fees), whether arising in contract, tort, or otherwise,
to third parties for or on 48




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account of injury, bodily or otherwise, to, or death of, persons or for damages to, or
destruction of, property, in each case resulting from, arising out of, or in connection
with, such indemnifying Partys negligence or wilful misconduct.25.
    WAIVERNo waiver by either Party of any breach by the other of this Agreement shall operate
unless expressly made in writing, and any such waiver shall not be construed as a waiver of
any other breach.26.
    VARIATIONNo variation to the provisions of this Agreement shall be valid unless it is in writing
and signed by each Party.27.
    ENTIRE AGREEMENT(a)
    This Agreement constitutes the entire agreement and understanding of the Parties with respect
to its subject matter and supersedes and extinguishes any agreements, understandings and/or
representations previously given or made with respect thereto other than those included in
this Agreement, provided that nothing in this clause 27 shall limit or exclude any liability
for fraud in relation to those agreements, understandings and/or representations.(b)
    For the avoidance of doubt, notwithstanding clause 27(a), the terms of the General Agreement
continue to apply to the extent such provisions are expressed to survive execution of this
Agreement.28.
    SEVERABILITYThe provisions contained in each clause of this Agreement shall be enforceable
independently of each of the others and their validity shall not be affected if any of the
others are invalid. If any of those provisions is void but would be valid if some part of
the provision were deleted, the provision in question shall apply with such modification as
may be necessary to make it valid.29.
    NOTICES29.1
    Address for noticesAny notice or other formal communication given under this Agreement must be in writing
(which, for the purposes of this clause 29, includes fax, but not electronic mail) and may
be delivered or sent by post or fax to the Party to be served at its address as follows:  (a)
    to Enercal at:87 avenue du Général de Gaulle
98800 Nouméa, New CaledoniaFax: +687 250 253
Marked for the attention of
Directeur Général
 (b)
    to Goro Nickel at:38 rue du Colisee
75008, Paris, FranceFax: +33 1 45 63 29 97
Marked for the attention of the
Directeur General DéléguéAnd copied to:
   49




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7 bis, rue Suffren, BP218
98845 Nouméa Cedex, New CaledoniaFax: +687 273 710
Marked for the attention of the
Président Directeur GeneralAnd also copied to:Inco Limited
145 King Street West,
Toronto, ON, M5H 4B7Fax: +1 41 6361 7788
Marked for the attention of Office of
the Secretary
    or at such other address or fax number as it may have notified to the other Party in
accordance with this clause 29. Any notice or other document sent by post shall be sent by
registered mail with return receipt requested (if within New Caledonia) or by registered
airmail with return receipt requested (if elsewhere).29.2
    Delivery of noticesAny notice or other formal communication shall be deemed to have been given:  (a)
    if hand delivered, at the time of delivery;(b)
    if posted, by registered mail with return receipt requested (courrier
recommandé avec accusé de reception), at 10.00 a.m. on the second (2nd)
Business Day after it was put into the post;(c)
    if posted by registered airmail with return receipt requested, at 10.00 a.m. on
the tenth (10th) Business Day after it was put into the post; or(d)
    if sent by fax, on the Day of transmission, if transmitted before 3.00 p.m. on
any Business Day, and in any other case on the Business Day following the date of
transmission.  29.3
    Proof of serviceIn proving service of a notice or other formal communication, it shall be sufficient to
prove that delivery was made or that the envelope containing the communication was properly
addressed and posted either by registered mail with return receipt requested (courrier
recommandé avec accusé de reception) or by registered airmail with return receipt requested
(as the case may be) or that the fax was properly addressed and transmitted.30.
    FURTHER ASSURANCEEach Party shall upon request, at its own expense, at all times from the date of this
Agreement do or procure the doing of all things as may be required to give full effect to
this Agreement, including the execution or provision of all deeds and documents. 50




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31.
    ANNOUNCEMENTSNo Party shall make (or permit any of its Affiliates to make) any announcement
concerning this Agreement or any ancillary matter before, on or after the date of this
Agreement except as required by law, or any regulatory body or with the prior written
approval of the other Party, such approval not to be unreasonably withheld or delayed.32.
    COSTS AND EXPENSESEach Party shall pay the costs and expenses incurred by it in connection with the
entering into and completion of this Agreement.33.
    COUNTERPARTSThis Agreement may be executed in any number of counterparts, all of which, taken
together, shall constitute one and the same agreement, and any Party (including any duly
authorised representative of a Party) may enter into this Agreement by executing a
counterpart.34.
    LANGUAGEThe language of this Agreement and the transactions envisaged by it is English and all
notices, demands, requests, statements, certificates or other documents or communications
shall be in English unless, in respect of administrative, accounting, operational, financial
and technical documents only, the ESA Coordinating Committee determines otherwise or unless
agreed in writing between the Parties. If this Agreement or any other related documents
originally prepared in English are translated into another language, the English version
shall prevail.35.
    THIRD PARTY RIGHTSSubject to the rights that may accrue to any successor or permitted assigns of the
Parties, no provision of this Agreement shall be construed as creating any rights
enforceable by a third party and all third party rights implied by law are, to the extent
permissible by law, excluded from this Agreement.36.
    GOVERNING LAWThis Agreement shall be governed by and construed in accordance with the laws of
France.37.
    EXPERT DETERMINATION37.1
    DisputeAny dispute, claim or controversy arising out of or in connection with this Agreement
(a Dispute) shall, if the Parties agree in writing that it is of a technical nature, be
resolved in accordance with this clause 37. In any other case, the Dispute shall be
resolved in accordance with clause 38 (Arbitration).37.2
    Referral to ExpertEither Party may give at any time notice in writing to the other Party that a Dispute
of a technical nature has arisen (a Notice). If such Dispute is not resolved by agreement
in writing between the Parties within ten (10) Business Days of the Notice being given, and
the Parties agree in writing within five (5) Business Days of the expiry of the ten (10)
Business Day 51




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period that the Dispute is of a technical nature (a Technical Dispute), an Expert shall be
appointed and the Technical Dispute shall be referred to an independent Expert with
experience in resolving such Technical Disputes or Technical Disputes of a similar nature
for determination.37.3
    Role of ExpertThe Expert appointed under clause 37.2 (Referral to Expert) shall act on the following
basis:  (a)
    on his or her appointment, the Expert shall confirm his or her neutrality,
independence and the absence of conflicts in determining the Technical Dispute;(b)
    the Expert shall comply with the terms of this Agreement and shall act as an
expert and not as an arbitrator;(c)
    if the ESA Coordinating Committee has selected the Expert, the Experts
determination shall (in the absence of manifest error) be final and binding on the
Parties and not subject to appeal (unless expressly stated otherwise in this
Agreement);(d)
    the Expert shall decide the procedure to be followed in the determination in
accordance with this Agreement and in consultation with the Parties and shall be
requested to make his or her determination in writing within twenty-five (25) Business
Days after his or her appointment or as soon as practicable thereafter;(e)
    any amount payable by either Party to the other as a result of the Experts
determination shall be due and payable within five (5) Business Days of the Experts
determination being notified to the Parties. Any action required by the Expert as a
result of the Experts determination shall be implemented within ten (10) Business
Days following the Experts determination being notified to the Parties or as specified
within the determination; and(f)
    the Expert shall decide how and by whom the costs of the determination,
including the fees and expenses of the Expert (but excluding the Parties own costs
which shall be borne by the Party incurring those costs) (the Costs), are to be paid.
Pending the Experts decision as to the Costs of the determination, the Costs shall be
borne equally by the Parties.(g)
    For the avoidance of doubt, if the ESA Coordinating Committee has not selected
the Expert, a Party may refer any Technical Dispute which is not resolved to its
satisfaction to arbitration as a Dispute to be conducted in accordance with clause 38
(Arbitration).  38.
    ARBITRATION38.1
    DisputeThe Parties shall use reasonable efforts to resolve any Dispute through negotiations.
Either Party may at any time refer a Dispute to one senior executive from each of Enercal
and Goro Nickel by giving a notice to the other that such Party desires a Dispute to be
decided by executives under this clause 38. Upon receipt of such notice of referral, the
executives of the Parties shall meet and attempt to resolve any such Dispute. If the
executives fail to resolve the Dispute within thirty (30) Days after such Dispute is
referred to them, then, except as otherwise provided in this Agreement, such Dispute shall
be finally and exclusively settled by 52




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arbitration in accordance with rules of arbitration of the International Chamber of Commerce
then in effect (the Rules), except as those rules may be modified herein. The arbitration
shall be held in Paris. The arbitration proceedings shall be conducted, and the award shall
be rendered, in the English language.38.2
    Formation of tribunalThere shall be three arbitrators, of whom each Party shall select one. At any time
after the expiration of the thirty (30) Day period referred to in clause 38.1 (Dispute),
either Party (the Claimant) may serve a request for arbitration (the Request for
Arbitration), in person or by registered mail, upon the other Party (the Respondent).
Within twenty (20) Days of the Respondents receipt of the Request for Arbitration, the
Respondent shall serve on the Claimant its answer to the Request for Arbitration and any
counterclaims. Should either Party fail to select an arbitrator, the chairperson at the
International Chamber of Commerce shall make such appointment. Within fifteen (15) Days of
the selection of the second arbitrator, the two arbitrators thus appointed shall select a
third arbitrator to act as chairman of the tribunal. If the two Party-appointed arbitrators
fail to agree on a third arbitrator, the chairperson of the International Chamber of
Commerce shall make such appointment.38.3
    Applicable LawAny arbitration proceeding or award rendered hereunder and the validity, effect, and
interpretation of this clause 38.3 shall be governed by the laws of France.38.4
    Waiver of appealThe Parties hereby waive any rights of application or appeal to the courts of France to
the fullest extent permitted by law in connection with any question of law arising in the
course of the arbitration or with respect to any award made.38.5
    Award finalThe arbitrators shall provide written reasons for their award. The award shall be
final and binding upon the Parties, and shall be the sole and exclusive remedy between the
Parties regarding any claims, counterclaims, issues, or accounting presented to the arbitral
tribunal. Judgment upon any award may be entered in any court having jurisdiction.38.6
    EffectThis Agreement and the rights and obligations of the Parties shall remain in full force
and effect pending the award in any arbitration proceeding hereunder and, except as
expressly provided in this Agreement, the Parties shall continue to perform their respective
obligations pursuant to this Agreement notwithstanding the existence of any dispute,
disagreement, or dispute resolution proceeding that may exist from time to time.38.7
    Binding on transfereeThis agreement to arbitrate shall be binding upon the successors, permitted assigns,
and any trustee or receiver of each Party. 53




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SCHEDULE 1 AVAILABILITY CHARGE 1. Availability Charge prior to any Extension Period The Availability Charge for Month m prior to any Extension Period shall be calculated as
follows: ACm = (ACOMm + ACFC + CIL) - ARm Where: ACm
    
    Availability Charge for Month m in EuroACFC
    
    1,103,728.41 EurosACOMm
    
    Fixed Operation and Maintenance Charge Rate for Month m in EuroARm
    
    Availability ReductionCIL
    
    The amount determined in accordance with clause 14.2(g) (if any)
 The Fixed Operation and Maintenance Charge Rate for Month m shall be calculated as follows: ACOMm = 147,114.49 Euros + (198,071.01 Euros x
INDEXLABm/INDEXLABb) + (116,735.94 Euros x
INDEXMTCm/INDEXMTCb)+ (91,236.27 Euros x
INDEXGENm/INDEXGENb) Where: INDEXLAB = the Agreed Index for labour component of ACOMm; INDEXMTC=the Agreed Index for maintenance and material component of
ACOMm; INDEXGEN=the Agreed Index for general component of ACOMm; INDEXLABm = INDEXLAB in Month m; INDEXLABb = INDEXLAB as at the date of this Agreement; INDEXMTCm = INDEXMTC in Month m; INDEXMTCb = INDEXMTC as at the date of this Agreement; INDEXGENm = INDEXGEN in Month m; and INDEXGENb = INDEXGEN as at the date of this Agreement, however, if in any Hour of any Month m during the Contract Period, Enercals ability to make
available Electricity is affected by Force Majeure (as specified in the Force Majeure Notice given
in respect of that Force Majeure) (Force Majeure Hour), then ACOM in that Month m will be reduced
by the proportion being the number of Force Majeure Hours in that Month divided by the total number
of Hours in that Month. The Availability Reduction, ARm, shall be calculated as follows: 54




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ARm =ADm x (ACOMm + ACFC +CIL)/ Sum of Target Net Capacity
for each Hour in that Month m. Where: ADm
    
    The sum of TMSh in respect of each Hour of Month m.TMSh
    
    In respect of any Hour is (Target Net Capacity for that Hour - Actual Capacity for that
Hour) (which amount if negative will be equal to nil (0)).
 2. Availability Charge during any Extension Period The Availability Charge for Month m during any Extension Period shall be calculated as
follows: ACm = ACOMm x 1.20  AREPm + CIL Where: AREPm = ADm x (ACOMm x 1.20)/ Target Monthly Availability However, if AREPmis nil in any Month during any Extension Period then ACm= ACOMm x 1.25. 55




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SCHEDULE 2 FUEL CHARGE AND VARIABLE OPERATION AND MAINTENANCE CHARGE SECTION A: FUEL CHARGE: The Fuel Charge for Month m shall be calculated as follows: $ECFCm= EDmx Cmcoalx HRCm+ $ADJHFO Where: EDm:
    
    The sum of Electricity Delivered during each Hour in Month m
(as measured by the Metering System) in kWhCmcoal:
    
    is the cost of Coal + cost of shipping in
month m in Dollars per thousand Joules($/kJ).Where:Cmcoal = (Pmcoal+ SRm)/SEmcoalSEmcoal
    
    Specific energy of Coal in Month m expressed in kJ/tonnes, which
value cannot be less than 25 300 kJ/tonnes pursuant to schedule 5 (Coal
Specification).Pmcoal
    
    Price of Coal for Month m in Dollars per tonne as
defined in the relevant Coal Purchase Agreement (as defined in the Utilities
and Services Agreement) corrected in accordance with section C of this schedule 2.SRm
    
    Shipping rate in Month m $US/tonne defined in the relevant Coal
shipping contract corrected in accordance with section C of this schedule 2.HRCm
    
    Heat Rate Coefficient (efficiency of converting thermal energy to
electrical energy) for Month m in kJ/kWh calculated as follows:HRCm= HRCbx DF x PLAFmWhere:HRCb
    
    Heat Rate Coefficient (efficiency) of the Facility at the date of
this Agreement being 11 191kJ/kWhDF
    
    Degradation Factor being the average loss of efficiency of the
Facility over the Contract Period calculated as 1.025 + CLwhere:CL is the coal loss from spillage, drainage runoff, airborne loss
(not efficiency) at the date of this Agreement being 1.005.
 56




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PLAFm
    
    Part Load Adjustment Factor in Month m is indicative of the
efficiency of the Facility when operated at less than 100% load, as set out in
the table below.FL
    
    Partial Load Factor means in any Hour the actual total
electricity output of the Facility divided by 100MW and expressed as a
percentage.
 FL (%)
    
    
    PLAFm100%
    
    
    
    1.000095%<or= FL < 100%
    
    
    
    1.005290% <or= FL < 95%
    
    
    
    1.014285% <or= FL <90%
    
    
    
    1.023180% <or= FL <85%
    
    
    
    1.036575% <or= FL <80%
    
    
    
    1.049970% <or= FL <75%
    
    
    
    1.067865% <or= FL <70%
    
    
    
    1.090160% <or= FL <65%
    
    
    
    1.112555% <or= FL < 60%
    
    
    
    1.139350% <or= FL <55%
    
    
    
    1.168745% <or= FL <50%
    
    
    
    1.2019
 $ADJHFO
    
    Fuel Charge Adjustment is, the costs associated with using heavy fuel oil (HFO) instead of Coal. $ADJHFOwill be set at zero (0) to the extent that the use of HFO at the Facility exceeds 3286 tonnes per annum. However, if the Facility consumption is less
than 3286 tpa, all under-runs will be determined in accordance with section B (Fuel Charge Adjustment).
 SECTION B  FUEL CHARGE ADJUSTMENT $ADJHFO= (QmHFOx EDm/Emtot) x (PmHFO- Pmcoalx (SEmcoal/ SEmHFO)) Where: PmHFO
    
    Price of HFO in Month m according to the Utilities and Services Agreement
in Dollars per tonnes, corrected in accordance with part C.SEmHFO
    
    Specific energy of Heavy Fuel Oil (HFO) in Month m expressed in kJ/tonnes
which value can not be less than 41,570 kJ/tonnes pursuant to the Utilities and
Services Agreement (HFO Specification)).Emtot
    
    Total amount of electricity produced by Prony in Month m at the Facility
in kWh.QmHFO
    
    Quantity of HFO consumed by Prony at the Facility in Month m in tonnes.
 57




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SECTION C  INVENTORY CORRECTION FOR Pmcoal, SEmcoal, SRmSEmHFO,PmHFO As both fuel storage facilities will be at any point in time, after receipt of the second shipment
of HFO or Coal as the case may be, comprised of an inventory of differing values
(Pmcoal,SEmcoal,SRm SEmHFO,PmHFO),
Prony and Goro Nickel will maintain a log to update these values at the agreed monthly billing date
according to the following example. Example of Coal Cost using Weighted Average Calculation TonnesShipment
    
    (1000s)
    
    
    $/TMonth 1
    
    Opening balance
    
    
    
    
    
    
    
    
    Monthly Purchases
    
    1
    
    
    60
    
    
    $
    35.002
    
    
    45
    
    
    $
    27.00105Total Available
    
    
    
    
    105
    
    
    $
    31.57Monthly Consumption
    
    
    
    
    70
    
    
    $
    31.57Balance
    
    
    
    
    35
    
    
    $
    31.57Month 2
    
    Opening balance
    
    
    
    
    35
    
    
    $
    31.57Monthly Purchases
    
    3
    
    
    60
    
    
    $
    26.004
    
    
    45
    
    
    $
    35.00105Total Available
    
    
    
    
    140
    
    
    $
    30.29Monthly Consumption
    
    
    
    
    90
    
    
    $
    30.29C/Bal
    
    
    
    
    50
    
    
    $
    30.29Month 3
    
    Opening balance
    
    
    
    
    50
    
    
    $
    30.29Monthly Purchases
    
    5
    
    
    50
    
    
    $
    34.006
    
    
    40
    
    
    $
    37.007
    
    
    35
    
    
    $
    40.00125Total Available
    
    
    
    
    175
    
    
    $
    34.82Monthly Consumption
    
    
    
    
    110
    
    
    $
    34.82C/Bal
    
    
    
    
    65
    
    
    $
    34.82
 Others values (including SEmcoal) will be calculated in a similar manner to that
set out in the table above. 58




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##### 



SECTION D: Variable Operation and Maintenance Charge The Variable Operation and Maintenance Charge for Month m shall be calculated as follows: ECOMm = ECOMRm x EDm Where: ECOMm
    
    Variable Operation and Maintenance Charge for Month m in EuroEDm
    
    The sum of the Electricity Delivered in each Hour during Month m (as measured by the Metering
Systems) in kWhECOMRm
    
    Variable Operation and Maintenance Charge Rate for Month m in Euro per kWh
 The Variable Operation and Maintenance Charge Rate for Month m shall be calculated as follows: ECOMRm = 0.0004888 Euros x INDEXLABm/INDEXLABb + 0.00114 Euros x INDEXMTCm/INDEXMTCb Where: INDEXLAB = the Agreed Index for labour component of ECOMRm; INDEXMTC=the Agreed Index for maintenance and material component of
ECOMRm; INDEXLABm = INDEXLAB in Month m; INDEXLABb = INDEXLAB as at the date of this Agreement; INDEXMTCm = INDEXMTC in Month m; INDEXMTCb = INDEXMTC as at the date of this Agreement The parties agree that the numeric figures in relation to HRCb,CL and PLAFm(the Moving Numbers) in this schedule 2 shall not be fixed on the date of this Agreement and
are subject to further revision in accordance with this paragraph. Enercal will procure that Prony
will perform relevant tests to determine the actual value of the Moving Numbers, under conditions
which are agreed with Goro Nickel, as soon as practicable after the Start Date and intermittently
until the end of the period two years from the Start Date (the Fixing Date). The Parties agree
that the Moving Numbers shall be fixed on and shall not be subject to any further changes by either
Party at the Fixing Date. 59




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SCHEDULE 3 PART A DELIVERY POINTS AND SWITCHROOM [NOTE: DELIVERY POINTS AND SWITCHROOM PLANS NOT PROVIDED IN THIS VERSION] 60




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##### 



PART B METERING SYSTEMS [NOTE: METERING SYSTEMS PLANS NOT PROVIDED
IN THIS VERSION] 61




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##### 



SCHEDULE 4 [NOT USED] 62




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##### 



SCHEDULE 5 COAL SPECIFICATION Table 1: Proximate Analysis Parameter
    
    
    Units
    
    
    Typical
    
    
    RangeThe following Values can
only be altered with the
agreement of both
Enercal and Goro NickelTotal Moisture
    
    
    % ar
    
    
    11.19
    
    
    8.8  11.2Ash
    
    
    % ar
    
    
    11.63
    
    
    11.6  14.0Volatile Matter
    
    
    % ar
    
    
    23.53
    
    
    20.88  23.60Sulphur
    
    
    % ar
    
    
    
    
    
    0.45 MaxLHV
    
    
    kJ/kg
    
    
    25,329
    
    
    25,300 - 27,200The following values are
forecasted to meet
Environmental limits.
Enercal may alter these
as required.Cadmium and Compounds
    
    
    ppm Wt/Wt
    
    
    1.20
    
    
    400 MaxMercury and Compounds
    
    
    ppm Wt/Wt
    
    
    0.04
    
    
    0.45 MaxThallium
    
    
    ppm Wt/Wt
    
    
    0.00
    
    
    100 MaxCd + Hg + Tl
    
    
    ppm Wt/WtArsenic and Compounds
    
    
    ppm Wt/Wt
    
    
    23.80
    
    
    500 MaxSelenium and Compounds
    
    
    ppm Wt/Wt
    
    
    0.65
    
    
    3.0 MaxTellurium
    
    
    ppm Wt/Wt
    
    
    0.00
    
    
    100 MaxAs + Se + Te
    
    
    ppm Wt/WtLead and Compounds
    
    
    ppm Wt/Wt
    
    
    24.20
    
    
    2,500 MaxAntimony and Compounds
    
    
    ppm Wt/Wt
    
    
    2.30
    
    
    20 MaxChromium Total
    
    
    ppm Wt/Wt
    
    
    31.60
    
    
    200 MaxCobalt and Compounds
    
    
    ppm Wt/Wt
    
    
    11.40
    
    
    100 MaxCopper and Compounds
    
    
    ppm Wt/Wt
    
    
    1.20
    
    
    20 MaxTin
    
    
    ppm Wt/Wt
    
    
    1.20
    
    
    20 MaxManganese and Compounds
    
    
    ppm Wt/Wt
    
    
    53.40
    
    
    300 MaxNickel
    
    
    ppm Wt/Wt
    
    
    24.00
    
    
    100 MaxVanadium
    
    
    ppm Wt/Wt
    
    
    5.00
    
    
    50 MaxZinc and Compounds
    
    
    ppm Wt/Wt
    
    
    20.00
    
    
    100 MaxSb+Cr+Co+Cu+Sn+Mn+Ni+V+Zn
    
    
    ppm Wt/Wt
 63




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##### 



ppm Wt/Wt = Part per Million by Weight in Coal as Delivered Table 2: Physical Properties (The following Values can only be altered with the agreement of both Enercal and Goro Nickel) Parameter
    
    
    Units
    
    
    Reference
    
    
    RangeHardgrove Grindability Index
    
    
    
    
    
    47
    
    
    40  75Top Size
    
    
    Mm
    
    
    
    
    
    50 MaxPart greater than 25mm
    
    
    %
    
    
    
    
    
    15 MaxPart less than 3mm
    
    
    %
    
    
    
    
    
    20 Max
 64




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##### 



SCHEDULE 6 METER TESTING PROCEDURES  1.
    METERING DATA1.1
    The Metering System will be comprised of several components that shall each be to an
international standard and providing a measured accuracy of (including each voltage or current
transformer which forms part of the Metering System) plus or minus one-fifth of one per cent.
(±0.2%). Unless otherwise mutually agreed, the design standard shall be commensurate to ANSI
C 12.1-1995.The metering data will be comprised of:  (a)
    signals from the Metering System required for establishing the Electricity
Delivered in any Hour, any Availability Penalty, any Availability Credit and for
determining any other payment or penalty amount under this Agreement; and(b)
    separate, identical and electrically independent signals from the Metering
System to Enercals and Goro Nickels operations centres.  2.
    TESTING2.1
    The calibration of the Metering System will be checked and verified to ensure that the
accuracy remains within the specified limits.The method of calibration and frequency of tests will be agreed by the ESA Coordinating
Committee, based on knowledge of the performance and the design of the installed Metering
System and the manufacturers recommendations.Enercal will provide:  (a)
    certificates of accuracy to an international standard for the Metering System
it supplies; and(b)
    certificates of accuracy to a mutually agreed international standard for the
existing current and voltage transformers. If replacement current or voltage
transformers are required for the metering locations, they will be supplied by Enercal,
along with certificates of accuracy to an international standard.  2.2
    Testing of the Metering System shall be performed in-situ, using portable equipment traceable
to a mutually agreed international standard, without interrupting the delivery of Electricity
from the Enercal System to the Nickel Mine.2.3
    Testing and calibration of the Metering System shall be carried out by Enercal.2.4
    Testing and calibration of any Backup Metering System shall be carried out by Goro Nickel. 65




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SCHEDULE 7 ELECTRICITY SPECIFICATION The Electricity delivered to Goro Nickel under this Agreement shall comply with the
specifications set out in this schedule 7. Without prejudice to any provision of the Multipartite
Agreement, in the event that electricity delivered to Goro Nickel under this Agreement does not
comply with the specifications set out in this schedule 7, such failure will be referred to the ESA
Coordinating Committee which will determine the appropriate actions to be undertaken by Enercal to
ensure that the failure is rectified and any further such failure is prevented. For the avoidance
of doubt, such a failure will not be a breach of a material obligation under this Agreement for the
purposes of clause 17.1(a)(iii) (Events of Default).  1.
    GORO NICKEL INTERCONNECTION AND GENERATORS(a)
    The Electricity interconnection from the Delivery Points to the Nickel Mine will be by two
independent 33 kV feeders from the dual bus 33 kV switchboard in the Facility Switchroom to
the Goro Nickel 33kV switchboard as shown in part A of schedule 3 (Delivery Points and
Switchroom).(b)
    The two feeders will each be rated for 1,200 Amp in order to accept the transfer of real (MW)
and reactive (MVar) Electricity associated with the Target Net Capacity to which Goro Nickel
is entitled. Note: Enercal must procure that until such time that 33kV/33kV isolation transformers are
installed, the 33kV Facility interconnection to the EEC network is only used for black start of the
Facility or the Goro Nickel oil fired steam and power plant (OFSPP) (when the 150kV link is lost).  2.
    ELECTRICITY QUALITY2.1
    Voltage(a)
    Nominal Voltage: 33 kV (normal operating voltage 34 kV)(b)
    Steady state (long term) voltage variation: +/- 4% from 34 kV(c)
    Transient voltage variation: +/- 10% (from 33 kV) for periods of up to 60 seconds based on 33
kV(d)
    Short Term Voltage Dips: Voltage dips of 10-100% to be limited to 300 half-cycles (3 sec).
It is expected that such voltage dips will not be more frequent than twice per year on average
and that single pole reclosing of the 150 kV line will limit the total loss of Electricity
from such occurrences to once every two years on average. These frequencies are not
guaranteed but are to be used as performance targets. Enercal is to take remedial action to
improve reliability of Electricity supply in the event that these targets are significantly
exceeded. Enercal must procure that any exposed connection (e.g. overhead line) of the 33kV
system at the Facility to any system or network outside the Facility or Nickel Mine is through
a 33/33kV isolation transformer.2.2
    Frequency(a)
    Nominal Frequency: 50Hz 66




---



##### 



(b)
    Steady state (long term) frequency variation: +/- 1% (0.5Hz)(c)
    Transient frequency variation: +/- 2% (1Hz)2.3
    Voltage UnbalanceVoltage Unbalance: 2% (expressed as the ratio of negative to positive sequence
voltages).2.4
    Harmonics(a)
    Total Harmonic Voltage Distortion (THD), evaluated for 2nd to 40th order components: 8%
continuously with up to 12% for 15 seconds in any 150 second period. Individual harmonics
should not exceed the limits given in IEC 61000-3-6.(b)
    Goro Nickel must ensure that all electrical equipment used in the Nickel Mine and connected
to the Nickel Mine electricity distribution system is designed and manufactured in accordance
with current good practice, in order to limit THD to acceptable levels.(c)
    If the THD is exceeded at the Delivery Points resulting in adverse affects to Prony, Goro
Nickel or the Transmission System, appropriate modifications (which may include the addition
of harmonic filters) will be carried out by Goro Nickel and/or Enercal to reduce the levels to
within the THD, as follows:-  
    where only one Partys contribution exceeds 50% of the THD at the Delivery Points,
it will reduce its contribution until the adverse effects are eliminated; or
    where both Parties contributions exceed 50% of the agreed level at the Delivery
Points, both Parties will reduce their contribution in proportion with their excess
above 50% of the THD.  2.5
    Power FactorGoro Nickel acknowledges that Enercal will be relieved from its requirement to deliver
Electricity at any time, if at that time the power factor of the Electricity delivered to
Goro Nickel is less than 0.8.3.
    FAULT LEVEL AND PROTECTION(a)
    Fault Level: The three phase short circuit sub-transient fault current during a fault at the
Delivery Points must not exceed 31.5kA for one (1) second. In order to ensure this fault level
is not exceeded, Goro Nickel will not, and Enercal will procure that together with Prony it
will not, exceed individual short circuit fault level contributions of 12kA and 19.5kA
respectively, without prior notification and agreement of the other Party.(b)
    Fault duration: In order to maintain discrimination with the downstream protection relays and
clear fault within one (1) second, Enercal will procure that high speed protection techniques
incorporating logic blocking schemes will be used for the Facility and similarly Goro Nickel
will install compatible systems in the Nickel Mine electricity distribution system. The
Parties acknowledge that engineering design coordination between Goro Nickel, Enercal and
Prony will be required to ensure the integrity of all electrical systems and avoid tripping of
the Facility, or Nickel Mine (inclusive of OFSPP). 67




---



##### 



4.
    SYSTEM STABILITY(a)
    For short term voltage deviations of 20% maximum for less than 100ms, resulting from
disturbances on the Transmission System or any other transmission grid, (which should not have
an adverse effect on the Nickel Mine operation) Enercal must procure that the Facility is able
to recover without loss of Goro Nickels on-line plant.(b)
    For short term faults of greater voltage deviation which may result in loss of a significant
portion of the Nickel Mine and which originate from outside the Nickel Mine the frequency of
occurrence shall be as defined in Short Term Voltage Dips detailed above. In the event of
such faults, Enercal must procure that the Facility retains stability by single pole reclosing
of the 150- kV line or islanding of the Facility to allow re-starting of the Nickel Mine
without delay if it has tripped. The target frequency for total loss of Electricity from such
occurrences is again defined in Short Term Voltage Dips detailed above.(c)
    Enercal must procure that Electricity voltage and frequency remain stable and within the
transient values nominated above for instantaneous load rejections within the Nickel Mine of
up to 15 MW. Maximum instantaneous load increases within the Nickel Mine are expected to be
generated from DOL (Direct On Line) starting of motors up to 2.0 MW and resistance starting
(or other reduced current starting methods) of slip ring (or other types of) motors up to 6.0
MW. Again, Enercal must procure that Electricity voltage and frequency remain stable and
within the transient values under such load increases.5.
    EARTHING(a)
    Enercal must procure that:  (i)
    the earthing system at the Facility is designed, constructed and installed in
accordance with Applicable Laws for such an installation;(ii)
    touch voltages during fault conditions meet the design codes for the earthing
system at the Facility and are lower than safety curves given in the NFC 15-100;(iii)
    a comprehensive equipotential bonding type of earthing system is installed in
the Facility; and(iv)
    a combined high voltage and low voltage earthing system is installed for the
Facility with maximum 1 Ohm earth resistance.  (b)
    Goro Nickel must ensure that:  (i)
    the earthing system at the Nickel Mine is designed, constructed and installed
in accordance with Applicable Laws for such an installation;(ii)
    touch voltages during fault conditions meet the design codes for the earthing
system at the Nickel Mine and are lower than safety curves given in the NFC 15-100;(iii)
    a comprehensive equipotential bonding type of earthing system is installed in
the Nickel Mine; and(iv)
    a combined high voltage and low voltage earthing system is installed for the
Nickel Mine with maximum 1 Ohm earth resistance. 68




---



##### 



(c)
    Goro Nickel will provide Enercal with data from an overall Nickel Mine earth study to assist
with design of the earthing system for the Facility. A study of the lightning protection
system calculated to an approved standard and in accordance with the requirements of the
overall site will be carried out by Goro Nickel and the results shall be provided to Enercal.
Enercal must procure that aircraft warning lights to an approved standard including access for
maintenance shall be installed at the Facility if required by Applicable Laws.(d)
    The Parties acknowledge that for safety reasons the earthing systems of the Facility and
Nickel Mine will be connected. Means will be provided to disconnect the systems for testing or
other exceptional purposes.6.
    LOSS OF GENERATION(a)
    In the event of total loss of generation (zero (0) voltage on the buses of both the Facility
and Goro Nickel 33kV switchboards), both the Facility and Nickel Mine will provide their own
emergency electricity from dedicated diesel generators.(b)
    Following a total loss of generation and restoration of supply within 30 minutes from the 150
kV system or back feeding of the EEC 33kV line, the maximum period for restoration of Target
Net Capacity to Goro Nickel by Enercal must not exceed three Hours.(c)
    In the event that the loss of generation is for a period longer than 30 minutes then the
target times for restoration of the Target Net Capacity to Goro Nickel by Enercal shall be
proportionately increased until the period reaches 7 hours at which time it shall be
considered to be a cold start.(d)
    In a cold start condition, following the receipt of external black start electricity
(sufficient only for a black start of the OFSPP), the target for the supply from the OFSPP
will be 5MW to the Facility (if unavailable from the 150kV system) within 5 hours and 10MW to
the Nickel Mine within 6 hours. The target for supply of Goro Nickel by Enercal from the
Facility will be 25MW within 6 hours and 50MW within 8 hours.(e)
    Irrespective of the times stated above, operating procedures will be developed by the ESA
Coordinating Committee to guarantee the most expedient restoration of Electricity, given the
performance specifications of the critical equipment within the Facility. These procedures
will reflect the priority of provision of Electricity to the Nickel Mine. Export or sale of
Electricity to other consumers by Enercal will not recommence until Goro Nickels requirements
for Electricity have been met (up to the Target Net Capacity).7.
    QUALITY MEASUREMENTSIn order to confirm that these Electricity Specifications are being achieved the PQM
Systems shall comprise of a power quality meter (owned by Goro Nickel) on the 33kV
connection from the Facility to the Nickel Mine and one or more power quality meters (owned
directly or indirectly by Enercal) capable of monitoring either 33kV bus on the Facility
33kV switchboard. The PQM Systems will measure and record all the nominated quality
criteria set out in this Electricity Specification such as frequency, voltage, imbalance and
harmonics.8.
    ELECTRICITY QUALITY CONTROL(a)
    If it is determined that this Electricity Specification is not being met due to poor
electricity quality on the 150kV system (and the quality is causing problems for the Nickel
Mine), the Nickel Mine and an operating 50MW coal fired generating unit shall be isolated from
the Transmission System and operate in island mode. The power quality meter installed on
the 69




---



##### 



33 kV connection from the Facility to the Nickel Mine would be used to determine when an
unacceptable electricity quality had been reached and would activate a relay which would
provide an alarm in the Facility control room. On activation of this relay Enercal shall
procure that Prony shall also be capable of isolating the Nickel Mine as set out above.(b)
    Such an activation system would initially be manual and would be dependent upon being able to
determine whether the source of Electricity quality disturbance was from the Transmission
System. If in the future, the ESA Coordinating Committee is satisfied that automatic
activation can be feasibly performed (ie without creating system instability) and decides that
it requires the activation system to be automatic, then Enercal shall procure that it is made
automatic. The values and times that will be used to activate the isolation relay will be
outside the Electricity Specification values defined above but will be below the limits at
which problems are likely to occur in the Nickel Mine. The two systems will be
re-synchronised as soon as the Electricity from the Transmission System is within the limits
set out in this Electricity Specification. This condition will be determined by the power
quality meter on the 150 kV connection between the Facility and the Transmission System. 70




---



##### 



SCHEDULE 8 SCHEDULING PROCEDURES  1.
    ANNUAL SCHEDULE(a)
    On and from three (3) Months prior to the earlier of the Start Date and the Target Start
Date, and thereafter six (6) Months prior to the commencement of each year, Goro Nickel must
send Enercal a notification (the Goro Nickel Schedule) which shall contain:  (i)
    a nomination of certain of those Hours during the following year where Goro
Nickel requires an availability of less than 50,000kW (Reduced Capacity Hour) and the
amount of Electricity which Goro Nickel requires to be made available in each Reduced
Capacity Hour;(ii)
    a total of at least 26,280,000kWh of Reduced Capacity;(iii)
    an indication of Goro Nickels expected requirements for Extra Electricity for
each Hour in that following year;(iv)
    an indication of when Goro Nickel expects that Surrendered Electricity could be
available to Enercal should Enercal require Surrendered Electricity in that following
year; and(v)
    Goro Nickels suggested prices per kWh of Availability Credit Electricity
during that following year.  If Goro Nickel would be required to prepare a Goro Nickel Schedule prior to the Contract
Period at any time between 1 April and 31 September in any year, the Goro Nickel Schedule
prepared at that time will contain the information set out above in respect of the period
from earlier of the Start Date or the Target Start Date until the end of the year following
the year in which the Start Date or the Target Start Date falls (as the case may be). In
that circumstance, the amount in paragraph 1(a)(ii) included in that Goro Nickel Schedule
will be increased proportionally to reflect the period from the earlier of the Start Date
and the Target Start Date and the end of the following year.(b)
    Within ten (10) Business Days of receipt of the Goro Nickel Schedule in respect of a year,
Enercal shall send Goro Nickel a notification (the Enercal Schedule) which shall contain:  (i)
    Enercals notifications of each Planned Outage for that year;(ii)
    Enercals notifications of Expected Actual Capacity for each Hour in that year
(taking into account each Planned Outage for that year);(iii)
    any request for Surrendered Electricity in any Hour of that year; and(iv)
    Enercals suggested price per kWh of Extra Electricity delivered during that
year from each potential Extra Electricity generation source.  (c)
    Within two (2) Weeks after Enercal has delivered the Enercal Schedule in respect of a year,
the Parties shall meet together to discuss the details contained in the Goro Nickel Schedule
and the Enercal Schedule and within two Weeks following such discussions (which discussions
shall not last longer than two Weeks), Goro Nickel must: 71




---



##### 



(i)
    give notice to Enercal of the actual Reduced Capacity Hours for that year and
the amount of Electricity which Goro Nickel requires to be made available by Enercal in
each Reduced Capacity Hour during that year (provided that the sum of the Reduced
Capacity for each such Reduced Capacity Hour must equal at least 26,280,000kWh); and(ii)
    give notice to Enercal of the prices per kWh of Availability Credit Electricity
during the course of that year (Unused Capacity Price),  and Enercal must give notice to Goro Nickel of the price per kWh of Extra Electricity
during the course of that year from each potential Extra Electricity generation source (each
an Extra Electricity Price).(d)
    Where Goro Nickel agrees:  (i)
    to provide any Surrendered Electricity requested by Enercal; and(ii)
    a price for that Surrendered Electricity,  in the discussions held in accordance with paragraph 2(a) below or otherwise in respect
of any year then Enercal will be obliged to pay Goro Nickel the agreed price for that
Surrendered Electricity. Within thirty (30) Days after receipt of an invoice for Surrendered
Electricity agreed in respect of any Month, Enercal must pay Goro Nickel the agreed price
for all such Surrendered Electricity.2.
    MONTHLY AND WEEKLY UPDATES(a)
    Goro Nickel shall, seven (7) days prior to the earlier of the Start Date and the Target Start
Date, and thereafter seven (7) days prior to the commencement of each Month, notify Enercal
of:  (i)
    its expected Scheduled Net Capacity for each Hour of the following Month; and(ii)
    any amendment to any requirement for Extra Electricity for each Hour of the
following Month as set out in the Goro Nickel Schedule for that Month.  (b)
    Goro Nickel shall, seven (7) days prior to the earlier of the Start Date and the Target Start
Date, (Anticipated Start Date) and thereafter seven (7) days prior to the commencement of each
Week, Goro Nickel shall notify Enercal of:  (i)
    any amendments to the previously notified expected Scheduled Net Capacity for
each Hour of the following Week; and(ii)
    any amendment to any requirement for Extra Electricity for each Hour of the
following Week as set out in the Goro Nickel Schedule for that Week.  (c)
    Within two (2) Business Days of receipt of a notice under paragraph 2(a) or 2(b) above,
Enercal shall notify Goro Nickel of any amendment to its notification of Expected Actual
Capacity for any Hour of such following Month or Week (as the case may be) as set out in the
Goro Nickel Schedule for that Month or Week as the case may be.For the avoidance of doubt, the Target Net Capacity will not be increased by any
notification given in accordance with this paragraph 2 unless mutually agreed by the
Parties. 72




---



##### 



3.
    DAILY NOTIFICATIONS(a)
    By 10:00am on each Day, Goro Nickel shall notify Enercal of its expected Scheduled Net
Capacity for each Hour of the following Day and any amendment to any requirement for Extra
Electricity for each Hour of the following Day as set out in the Goro Nickel Schedule for that
Day.(b)
    By 11.00 a.m. on each Day, Enercal shall notify Goro Nickel:  (i)
    whether or not it anticipates any operational problem with providing any Extra
Electricity in any Hour requested by Goro Nickel in respect of the following Day; and(ii)
    of the Expected Actual Capacity for each Hour of such following Day.  4.
    SCHEDULED NET CAPACITY(a)
    The Scheduled Net Capacity in respect of any Hour may not exceed the Target Net Capacity for
that Hour.(b)
    The total sum of the Scheduled Net Capacity and the Surrendered Electricity for each Hour in
any year during the Contract Period may not exceed 394,200,000 kWh.(c)
    The limitations in paragraphs 4(a) and 4(b) above are the Contract Limits.(d)
    For the avoidance of doubt:  (i)
    if the Contract Period spans any partial year, the Contract Limit in paragraph
4(b) above and the amount set out in paragraph 1(a)(ii) will be reduced proportionally
in respect of that year; and(ii)
    in any leap year during the Contract Period the Contract Limit in paragraph
4(b) above will be increased by 1,080,000kWh in respect of that year and the amount set
out in paragraph 1(a)(ii) above will be increased to 26,352,000kWh.  5.
    FORCED OUTAGE NOTIFICATIONSEnercal shall notify Goro Nickel immediately if it anticipates any operational problem
with providing either the lower of the Target Net Capacity and the Expected Actual Capacity
notified in respect of any Hour pursuant to paragraph 2 above or any Extra Electricity in
respect of any Hour in the following Day.6.
    SHORTFALL(a)
    If at any time the notification of Expected Actual Capacity for any Hour is less than the
expected notification of Scheduled Net Capacity for that Hour, then the Parties shall
investigate whether:  (i)
    Enercal is able to adjust demand, supply and maintenance in the Enercal System
so as to make good any shortfall; or(ii)
    Goro Nickel could either make good the shortfall from its own generation
sources or could avoid the shortfall by rearranging (in a manner acceptable to Goro
Nickel) its planned production and maintenance programmes at the Nickel Mine. 73




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(b)
    If, at any time:  (i)
    the Parties agree that Enercal will make good an expected shortfall of
Scheduled Net Capacity in respect of any Hour, it shall do so; and(ii)
    the Parties agree that, in respect of any Hour, Goro Nickel will make good the
shortfall from its own generation sources (at a price agreed by Enercal) or will avoid
the shortfall by rearranging (in a manner acceptable to Goro Nickel) its planned
production and maintenance programmes at the Nickel Mine, then:  (A)
    Goro Nickel shall do so and to the extent that Goro Nickel
agrees to do so, Goro Nickel will reduce its expected Scheduled Net Capacity in
that Hour by the amount of Electricity which Goro Nickel will make available
from its own generation sources (and will reflect that amount in the Scheduled
Net Capacity in the relevant Hour) or will not require as a result of its
arranging its planned production and maintenance programmes at the Nickel Mine;
and(B)
    where during the Contract Period only, Goro Nickel agrees to
make good the shortfall from its own generation sources and Enercal has agreed
a price, Enercal shall, within 30 days of demand, reimburse Goro Nickel for the
costs (at the agreed price) that Goro Nickel incurs in using its own generation
sources.  7.
    EXTRA ELECTRICITYIf Enercal agrees that it can provide any amount of Extra Electricity in any period, it
shall use all reasonable endeavours do so. 74




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SCHEDULE 9 PENALTIES PART A  AVAILABILITY PENALTY  (a)
    The Availability Penalty in Month m prior to any Extension Period will be calculated as
follows:APm = (Target Monthly Availability - (Actual Monthly Availability +
Remaining Outage Allowance)) x 0.381 Euro (as such amount is adjusted from the
date of this Agreement in accordance with the Agreed Index).(b)
    The Availability Penalty in Month m during any Extension Period will be calculated as
follows:APm = (Target Monthly Availability - (Actual Monthly Availability +
Remaining Outage Allowance)) x 0.381 Euro (as such amount is adjusted from the
date of this Agreement in accordance with the Agreed Index),provided that if any payment of an Availability Penalty, APm, in respect of
a Month during any Extension Period would cause the sum of each Availability Penalty,
APm, paid during that Extension Period to exceed the sum of each Availability
Charge paid during that Extension Period, then no Availability Penalty, APm, will
be payable in respect of that Month. Where APm: The amount of the Availability Penalty in Month m in Euro (which amount
if negative will be equal to nil (0)). The Remaining Outage Allowancein relation to any Month is 2,900,000kWh less the aggregate of
all Outages that have already occurred in previous Months in that year. For the avoidance of doubt,
if the Contract Period spans any partial year, the amount of 2,900,000kWh set out in this paragraph
will be reduced proportionally in respect of that year. This amount of 2,900,000kWh shall be
increased to 2,907,945kWh in any leap year during the Contract Period.. If Enercal notifies its intention to carry out any major Planned Outage in any year during the
Contract Period in accordance with the Scheduling Procedures, the amount of 2,900,000kWh in the
immediately preceding paragraph will be replaced with an amount of 4,100,000kWh in the year in
respect of which such Planned Outage is notified. Enercal may only notify a major Planned Outage
twice in each six (6) year period during the Contract Period, the first such six (6) year period
commencing on the Start Date. In the first year of the Contract Period, the amount of 2,900,000kWh
in the immediately preceding paragraph will be replaced with an amount of 5,800,000kWh. The Parties
agree that the ESA Coordinating Committee may agree to extend the six (6) year period referred to
in this paragraph to a period of up to eight (8) years to reflect the actual major Planned Outage
requirements of Enercal. For the avoidance of doubt, any balance of the Remaining Outage Allowance remaining at the end
of any year will not be carried forward to the next year. PART B   START DATE LD AMOUNT The Start Date LD Amount payable on any Day d, SDLDAd, will be calculated as
follows: 75




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SDLDAd = Amount x (1 - ((Sum of Actual Capacity for each Hour in that Day)/(Sum of
Target Net Capacity for each Hour in that Day)). Where: Amount:
    
    If the Day, d, is a Day:(i)
    
    between the Target Start Date and the Step-Up Date (both dates inclusive), is
20,000; and(ii)
    
    after the Step-Up Date, is 35,000;
 PROVIDED THAT, if, on any such Day, the Start Date LD Amount is payable solely due to delays in
completion of the civil works relating to the second generating unit of the Facility, Amount shall
be 10,922 on such Day (instead of the figures in (i) and (ii) above). The Step-Up Datemeans the
date on which Prony is entitled to receive a higher level of delay liquidated damages from its
contractors under the EPC Contracts. 76




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SCHEDULE 10 INSURANCE  (a)
    Workers Compensation coverage, or similar insurance as per Applicable Laws for
all employees working for those companies related to or existing within the Enercal
System;  (b)
    Comprehensive Third Party Liability Insurance insuring against bodily injury,
death and property damage to minimum policy limits of ten million Dollar
(US$10,000,000.00) per occurrence.  (c)
    Automobile Liability Insurance, insuring against liabilities arising from
bodily injury, death, property damage, with policy limits as required by Applicable
Laws for any and all motor vehicles, owned, leased, rented, operated or used by or on
behalf of parties owning, leasing and/or operating any part of the Enercal System
and/or any contractor, subcontractor or agents for the Enercal System and/or parties
related thereto;  (d)
    All Risks Property/Boiler & Machinery and Business Interruption insurance
insuring against direct physical loss or damage to the Enercal System to its full
replacement value, including but not limited to the coal conveying system from the coal
stockpile to the electricity generating facility and the related business interruption
arising there from, including but not limited to extra expense and expediting costs,
caused by all risks, including but not limited to machinery and equipment breakdown,
with policy limits adequate to insure the Enercal System property of every description
to full replacement cost and Enercal System business interruption on a gross profits
basis with an indemnity period of at least 12 months;  (e)
    All Risks Cargo Insurance, insuring against direct physical loss or damage to
all incoming cargo being transported for use by the Enercal System, including but not
limited to shipments of coal and equipment.  (f)
    Charterers Liability, insuring against liability arising from the chartering
by any of the Enercal System companies of any marine vessel, with minimum policy limits
of at least ten million Dollars (US$10,000,000) per Occurrence or the amount required
by the vessel owner. 77




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SCHEDULE 11 EARLY ELECTRICITY PRICE The Early Electricity Price per kWh for any Early Electricity delivered to Goro Nickel will be
determined as follows: For Early Electricity sold to Enercal under the PPA- The price per kWh paid by Enercal to
Prony in respect of that Early Electricity as sold by Prony to Enercal under the PPA and delivered
to Goro Nickel under this Agreement. For other Early Electricity   The price per kWh set by Enercal when it confirms that such
Early Electricity is available for delivery to Goro Nickel. 78




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SCHEDULE 12 AC PRESENT VALUE AC Present Valuemeans (FORMULA) Where: PVRate = 0.8127% (which amount, for the avoidance of doubt, is equivalent to an annual rate of ten
and one fifth per cent. (10.2%)). RMonths = The number of months between the Early Termination Date and the 25th anniversary of the
Start Date. 79




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In witness whereof this Agreement has been executed by the Parties as a Deed on the date appearing
on page 1. EXECUTED AS A DEED byENERCAL
Acting by: Jean-Claude Hirel
    
    )
)
)
Director /s/ Jean-Claude HirelDirector/SecretaryEXECUTED AS A DEED byGORO NICKEL
(acting through and on behalf of its
New Caledonian branch
Acting by: Yves Roussel
    
    )
)
)
))
Director /s/ Yves RousselDirector/Secretary
 80