Document:

Joint Petition of Settlement

 Exhibit 10.1 
 BEFORE THE 
 PENNSYLVANIA PUBLIC UTILITY COMMISSION 
  

					
	 Application of Duquesne Light Company for
 a Certificate
of Public Convenience Under
 Section 1102(a)(3) of the Public Utility
 Code Approving the Acquisition of
 Duquesne Light Holdings, Inc. by Merger
	 	 :
 :
 :
 :
 :
	  	Docket No. A-l10150F0035
			
	 Application of DQE Communications
 Network Services LLC
for a Certificate
 of Public Convenience Under Section
 1102(a)(3) of the Public Utility Code
 Approving the Acquisition of Duquesne
 Light Holdings, Inc. by Merger
	 	 :
 :
 :
 :
 :
 :
	  	Docket No. A-311233F0002

 JOINT PETITION FOR SETTLEMENT 
 TO ADMINISTRATIVE LAW JUDGE ROBERT P. MEEHAN: 
 This Joint Petition for
Settlement (“Settlement”) is submitted by the following parties in the above-captioned proceeding: Duquesne Light Company (“Duquesne”), DQE Communications Network Services LLC (“Network”),1 the Office of Trial Staff (“OTS”), the Office of Consumer Advocate (“OCA”), the Office of Small Business
Advocate (“OSBA”), the International Brotherhood of Electrical Workers, Local 29 (“IBEW 29”), Community Action Association of Pennsylvania (“CAAP”), Dominion Retail, Inc. (“Dominion”), Duquesne Industrial
Intervenors (“DII”), Retail Energy Supply Association (“RESA”),2 Strategic Energy, 

 

	 1
	 DQE Communications Network Services LLC (“Network”) holds a Certificate of Public Convenience
to provide service as a Competitive Access Provider throughout the Commonwealth of Pennsylvania. Network and its parents are wholly owned by DLH. Application of DQE Communications Network Services LLC for approval to offer, render, furnish or
supply telecommunication services as a Competitive Access Provider to the Public in the Commonwealth of Pennsylvania, Docket No. A-311233 (Order entered on November 23, 2004). 

	 2
	 RESA is joining in this settlement on its own behalf, and on behalf of two of its members, Direct Energy
Services, LLC and Hess Corporation. 

 LLC (“Strategic”) and Pennsylvania Large Energy Users Coalition
(“PALEUC”) (hereinafter collectively referred to as “Joint Petitioners”).3 
 The terms and conditions set forth in this Settlement represent a comprehensive settlement and resolve all issues pertaining to the above-captioned
Application. The Joint Petitioners aver that this comprehensive Settlement is in the public interest, and therefore, request that Administrative Law Judge Robert P. Meehan (the “ALJ”) and the Pennsylvania Public Utility Commission
(“Commission”): (1) approve without modification the proposed Settlement as set forth herein; and (2) issue the Certificates of Public Convenience and grant all necessary approvals to carry out the transactions in a lawful
manner. 
 In support of their request, the Joint Petitioners state as follows: 
 I. BACKGROUND 
 1. On September 6, 2006, Duquesne and Network filed, with
the Commission, a joint application (the “Application”) requesting all necessary approvals authorizing the transfer of control of their parent, Duquesne Light Holdings, Inc. (“DLH”) to the Macquarie Consortium, a group of six
investment funds, with the majority of the equity in the transaction provided by funds managed by the Macquarie Group. 
 2. As described in
further detail in the Application, the Macquarie Consortium owns DQE Holding LLC (“DQE Holdings”), a Delaware limited liability company. DQE Holdings has created DQE Merger Sub, Inc., a Pennsylvania corporation and wholly-owned subsidiary
of DQE Holdings. Under the proposed Merger, all of DLH’s common stock will be purchased by DQE Holdings, and DQE Merger Sub, Inc. will merge into and with DLH. As a result, DLH will continue as the surviving corporation and as the sole
wholly-owned subsidiary of DQE 
  

	 3
	 Citizen Power Inc. (“Citizen Power”) has authorized Joint Petitioners to state that Citizen
Power does not oppose this Settlement and that it will submit a letter of non-opposition to the Commission. 

  

 2 

 Holdings. Duquesne and Network will continue to be wholly-owned subsidiaries of DLH, and retain their separate corporate
identities and franchises. 
 3. The Application was docketed at A-110150F0035 and A-311233F0002. Notice of the filing of the Application was
published in the Pennsylvania Bulletin on September 16, 2006, 26 Pa.B. 5854. The notice specified that protests to the Application or Petitions to Intervene were to be filed on or before October 2, 2006. 
 4. OTS filed a Notice of Appearance. Timely protests and notices of intervention were filed by OCA and OSBA. In addition, timely Petitions to
Intervene/Protests were filed by IBEW 29, CAAP, Dominion, DII, RESA, Strategic, PALEUC and Citizen Power. 
 5. On September 15, 2006,
Duquesne and Network filed their direct testimony. 
 6. On November 28, 2006, a Prehearing Conference was held by the ALJ. No
objections were raised to any of the Protests/Petitions to Intervene, and all were granted party status. At the Prehearing Conference, various other procedural matters were addressed, including the establishment of a litigation schedule. 

7. Substantial discovery was undertaken by the parties, and direct, rebuttal and surrebuttal testimony was filed. 
 8. Extensive settlement negotiations and conferences were conducted among the parties, both jointly and on an individual basis. 
 9. Prior to the scheduled dates for hearings, the Joint Petitioners achieved a complete settlement of all issues, and hearings were canceled. 

 

 3 

 II. TERMS AND CONDITIONS 
 10. The Joint Petitioners agree to settle and resolve issues in the above-captioned proceeding on the following terms and conditions: 
  

	 	A.	Support For Settlement 

  

	 	1.	The Joint Petitioners agree to support approval of the Merger and Duquesne’s and Network’s Application for Certificates of Public Convenience will be approved, subject to
the conditions below. 

  

	 	 2
	 The Joint Petitioners agree that they will support or not oppose the Securities Certificate(s) to be filed forthwith by
Duquesne with the Commission requesting approval of a new 5-year Revolving Credit Agreement as described in the Application, in order to close on the transaction without delay.4 

  

	 	B.	Rate Issues 

  

	 	1.	Duquesne will not file a proposed general increase in distribution rates under Section 1308(d) of the Public Utility Code that would become effective after full suspension
prior to January 1, 2010, and Duquesne agrees that there shall be no general increase in distribution rates prior to January 1, 2010, unless there are substantial changes in regulation or federal tax rates or policy. This condition shall
not affect Duquesne’s ability to adjust its retail transmission rates or its Provider of Last Resort (“POLR”) rates on a timely basis. This condition shall not prohibit application of the State Tax Adjustment clause to recover
increases in state taxes prior to January 1, 2010. This provision also shall not prohibit Duquesne from seeking to recover universal service costs through a surcharge mechanism on or after January 1, 2010, or any party to this settlement
from opposing such a proposal. 

  

	 4
	 The Securities Certificate was filed with the Commission on February 2, 2007 and is docketed at
S-00061180. 

  

 4 

	 	2.	Joint Petitioners agree that all aspects of the acquisition premium and transaction costs, including third party consultants, financial advisory services and due diligence costs as
set forth in the response to OCA Set III-21, attached hereto as Appendix “A,” including all related tax effects, will be excluded from future distribution and transmission rates. 

  

	 	3.	Duquesne will not claim any increase in the cost of capital as a direct result of the transaction for a five (5) year period after closing. 

  

	 	a.	Duquesne shall not request a capital structure for ratemaking purposes which is outside of a reasonable range of that used by comparable companies. In any future base rate
proceeding, Duquesne must demonstrate that its claimed common equity ratio is reasonable and in the best interests of its customers; and 

  

	 	b.	Duquesne shall not claim, for 5 years following the closing, any increase in its cost of capital due to any downgrading of Duquesne debt as a direct result of the Merger.

  

	 	C.	Corporate Headquarters 

  

	 	1.	DQE Holdings and the Macquarie Consortium, and its investors, will continue to maintain Duquesne’s corporate headquarters in Pittsburgh, Pennsylvania. All of the corporate
functions will be performed and maintained at such headquarters so that Duquesne and its management team will continue to be locally based. DQE Holdings agrees not to move Duquesne’s headquarters outside Duquesne’s service territory
without advance approval of the Commission. 

  

 5 

	 	D.	Access To Books And Records 

  

	 	1.	Upon written request, Duquesne and its subsidiaries will provide the Commission, the OTS, the OCA and the OSBA reasonable access to the books and records, officials and staff of DLH
and its subsidiaries in Pittsburgh, Pennsylvania. However, nothing set forth herein shall constitute or be interpreted as a waiver by DLH or its subsidiaries of its right to raise traditional discovery objections to any such requests, including, but
not limited to, objections on the basis of relevance and privilege. In addition, before responding to any such requests, DLH and its subsidiaries shall be permitted to require the imposition of protections they deem necessary to prohibit disclosure
of proprietary or confidential information. 

  

	 	E.	Corporate Structure Protections, Financial Conditions And Governance 

  

	 	1.	From and after the effective date of this Settlement, Duquesne shall not: (1) guarantee the debt or credit instruments of DLH or any affiliate not regulated by the Commission,
except as approved by the Commission upon a determination that such guarantee provides net benefits to customers; (2) grant a mortgage or other lien on any property used and useful by Duquesne in providing retail utility service to the public
subject to the Commission’s jurisdiction, except for the financing needs of Duquesne; or (3) make any loan or otherwise extend credit to DLH or any affiliate not regulated by the Commission for a term of one year or more, except as
approved by the Commission upon a determination that such loan or credit extension provides net benefits to customers. 

  

 6 

	 	2.	DQE Holdings will not permit a change in ownership among the members of DQE Holdings without prior Commission approval if such change would result in a change in control under the
then-applicable Commission standards. 

  

	 	3.	Duquesne will seek Commission approval of all new or amended agreements with affiliates consistent with Chapter 21 of the Public Utility Code. 

  

	 	4.	Duquesne shall provide the OTS, OCA and OSBA with a copy of its annual reports filed with the Securities and Exchange Commission. 

  

	 	5.	Commencing March 31, 2008 and ending March 31, 2010, Duquesne will provide an annual report to the Commission as to the status of all commitments made in this Settlement.

  

	 	6.	Duquesne agrees to continue to have outstanding separately issued debt held by investors not affiliated with Duquesne or its affiliates, unless the Commission authorizes to the
contrary. 

  

	 	7.	DLH and its subsidiaries, including Duquesne, will provide, upon request, to OTS, OCA and OSBA access in connection with rate proceedings and other proceedings before the
Commission, where relevant, to presentations given by DLH and its subsidiaries to common stock, bond, or rating analysts. Such material will be accorded confidential treatment. 

  

	 	8.	Duquesne’s long term debt ratio as a percent of total capitalization shall not exceed 60% absent approval from the Commission. Any request for approval will be considered on an
expedited basis, if so requested. 

  

	 	9.	Duquesne shall notify the Commission of its intention to declare a special cash dividend to DLH, at least 30 days before declaring the dividend. 

  

 7 

	 	10.	The CEO of DLH will be a member of the board of DQE Holdings, and will also chair a management committee which will contain representatives of both the senior management team and
the Macquarie Consortium. 

  

	 	F.	Reliability And Customer Service 

  

	 	1.	Duquesne commits to its current planned funding levels of its infrastructure improvement plan for years 2006 and 2007. 

  

	 	2.	Duquesne agrees to the following Quality of Service Plan (“Service Plan”) during the period from January 1, 2007 through December 31, 2009. The Service Plan
establishes the following metrics and reporting requirements to allow for the monitoring of the quality of service provided by Duquesne and to identify any significant changes to Duquesne’s reliability and service levels:

  

			
	Quality of Service Plan
		
	Performance Area Index	  	Metrics
	
	Reliability
		
	SAIFI (12 Month)	  	1.17
	CAIDI (12 Month)	  	108
	
	Customer Service
		
	The percent calls answered within 30 seconds	  	76%
	The average busy out rate	  	0.5%
	The average call abandonment rate	  	4%
	 Percent of residential bills not rendered once every billing cycle
	  	0.01%

  

 8 

 Duquesne will provide a report each year to the Commission, OCA, OTS and OSBA identifying its performance
and the metrics in the Service Plan set forth in the above table. Duquesne will also include in its report its performance in the areas of: Number of Residential Customer disputes not issued a report within 30 days; Residential Termination Rate
(terminations per 1000 residential customers); Justified Residential Payment Arrangement Request Rate; and Justified Residential Consumer Complaint Rate. However, such reported metrics are not considered as part of the Service Plan for purposes of
this provision. 
 Duquesne agrees that, in any year during the effective period of the Service Plan, if its reliability or service levels are
not equal to or better than the reporting metrics set forth in the Service Plan, Duquesne will provide the Commission, OCA, OTS and OSBA with a report that will identify the reasons for the variance and identify any management actions that Duquesne
intends to undertake in response to any variation. Duquesne will then convene a collaborative with OCA, OTS and the OSBA to discuss such report. The Commission may, upon motion of any Party or upon its own motion, open a formal proceeding concerning
reliability or service. 
 If following such a collaborative, OTS, OCA or OSBA request a proceeding before the Commission, Duquesne will not
oppose the initiation of such a proceeding; however Duquesne reserves the right to oppose the proceeding if it is being initiated as a result of Duquesne exceeding one but not both of the reliability metrics set forth above. 
  

 9 

	 	3.	Nothing contained herein is intended to limit the authority of the Commission to consider quality of service pursuant to Sections 523 and 526 of the Public Utility Code in setting
Duquesne’s rates, or the Bureaus of the Commission from performing their duties and making recommendations, including recommendations regarding fines for failure of Duquesne to provide safe and reliable service. 

  

	 	4.	Duquesne will maintain operating locations and field offices in its territory, and staffing levels, as appropriate, to provide safe and reliable service, consistent with good
utility practices. In addition, Duquesne acknowledges that the change in ownership resulting from this transaction is not an extraordinary circumstance under the existing Collective Bargaining Agreement. 

  

	 	G.	Universal Service 

  

	 	1.	Duquesne will continue to fund its Customer Assistance Program (“CAP”) consistent with its needs analysis. 

  

	 	2.	Duquesne will continue to coordinate with administering agencies and community based organizations (“CBOs”) to administer low-income assistance programs. Duquesne will
convene a collaborative (“Universal Service Collaborative”) of local representatives of low income groups, CBOs and the OCA to consider universal service programs so as to enhance Duquesne’s programs within current funding levels,
including discussing increasing the involvement of CAAP and the PA Weatherization Task Force in referrals to and from Duquesne for its Low Income Usage Reduction Program (“LIURP” or “Smart Comfort”). The collaborative will meet
no less than once per year and will include a representative of CAAP and a representative from the Pennsylvania weatherization network providers. 

  

 10 

	 	3.	Duquesne will continue to fund LIURP consistent with the settlement reached in Docket No. R-00061346 by agreeing to fund the $1.531 million plus any carryover from 2006 on LIURP in
future program years during 2007 through 2009. Duquesne will increase the number of customers served under its Smart Comfort program from 2,250 customers per year to 3,000 customers per year for the period 2007 - 2009, except for 2008 where Duquesne
will commit to serving 4,000 customers and, on approval from the Commission’s Bureau of Consumer Services (“BCS”), target the additional 750 visits to customers with incomes between 150% and 200% of the federal poverty level.

  

	 	4.	Duquesne will agree not to transfer LIURP funds collected during the period 2007 through 2009 to other universal service programs. 

  

	 	5.	Duquesne agrees that it will make all reasonable efforts to expend LIURP funding available each calendar year. Subject to any necessary approval by the BCS, Duquesne will agree to
raise the income eligibility needs to 200%, and/or expanding outreach efforts, and/or increasing the numbers of customers served. Duquesne will advise the universal service collaborative of the status of LIURP expenditures on a quarterly basis
during the period 2007 through 2009. 

  

	 	6.	Subject to approval of its partners, Duquesne will agree to involve CAAP and the Pennsylvania Weatherization Task Force in its partnership regarding the provision of weatherization
services. 

  

 11 

	 	7.	Duquesne will continue its Stay Warm Program as needed for the winter of 2006/2007 and consistent with its needs analysis, in subsequent winter periods during the stay-out period
set forth in Paragraph 10.B.1. of this Agreement. 

  

	 	8.	Duquesne agrees to provide copies of its future Universal Service Plans to CAAP and the Pennsylvania Weatherization Task Force upon filing and will not object to CAAP’s or the
Pennsylvania Weatherization Task Force’s submission of comments regarding such universal service plans, including the Universal Service Plan to be filed in early 2007. 

  

	 	H.	Community Commitment 

  

	 	1.	For a period of five (5) years, Duquesne will provide corporate contributions and community support in southwestern Pennsylvania at least at levels substantially comparable to
the levels provided by the Company in 2006. (For 2006, that is approximately $2.9 million). In addition, Duquesne will continue to match customer contributions to the Dollar Energy Fund with shareholder dollars up to $375,000.

  

	 	2.	Duquesne will establish a competitively neutral Economic Development Program to attract and support expanding Pennsylvania industrial employers by offering a flat 50 MW block (7
days by 24 hours) of energy consumed at the new or expanded facility at a discount up to $3 per MWh below market for three years to commercial/industrial customers on Schedules HVPS and L that intend to add atleast 10 MW of new or expanding load and
create two new full time employment positions per MW of new load. Duquesne will also consider applications for funding for new or expanded load under Rate GL or, for customers on schedules 

  

 12 

 HVPS and L that do not meet the above two (2) criteria, if the applicant demonstrates that the new
or expanded load, while less than 10 MW, has other significant benefits, such as increasing off-peak power that could be utilized to a greater extent than on peak power, or providing attractive or improved load factor or power factor, or offers
significant new employment. The program will terminate on March 1, 2013 or earlier if the state adopts a state-wide economic development plan and will be funded solely by shareholder funds for the term of the program. To accomplish competitive
neutrality, Duquesne will not condition the discount upon the customer’s obtaining energy under the POLR service or purchase of energy from an affiliate of Duquesne and Duquesne will provide written notice to each grant applicant that the
discount is not conditioned on the purchase of energy from Duquesne or its affiliates, and that eligible customers may obtain 100% of their generation supply from Electric Generation Suppliers (“EGSs”) not affiliated with Duquesne.

  

	 	I.	Corporate Cost Allocations 

  

	 	1.	Duquesne’s corporate cost allocations will include a rent charge for the percentage of space occupied by employees who provide services to an affiliate, and a supplies charge
for supplies the employee may use in providing services to affiliates. 

  

	 	2.	Duquesne’s corporate cost allocations will provide that all costs incurred by DLH, including any costs allocated from Duquesne to DLH, will be allocated, to the extent
appropriate, to other Duquesne affiliates. 

  

 13 

	 	3.	Duquesne’s corporate cost allocations will include appropriate charges to all affiliates for costs incurred on their behalf by DLH for letters of credit and sureties and will
allocate appropriate charges associated with the DLH revolving credit agreement. 

  

	 	4.	Duquesne will provide a report, as part of its upcoming POLR IV filing, setting forth the specifics of these revisions to its corporate cost allocations. 

 

	 	J.	Competitive Markets 

  

	 	1.	Duquesne agrees to continue its support of the development of competitive retail electric market in its service territory consistent with all applicable Pennsylvania laws and
regulations. 

  

	 	2.	In addition to existing structural separation and cost allocation rules and procedures, DLH will provide the following: 

  

	 	a.	DLH at its expense, will arrange with an independent auditor/consultant with experience in cost allocations, to conduct an assessment to identify and quantify the cost of the
services and business functions provided to Duquesne Light Energy (“DLE”) by its affiliates and to provide for the remittance of compensation for services rendered to DLE (or any other affiliated EGS) by any other Duquesne companies.
Specifically, the independent auditor/consultant assessment will include : 

  

	 	(1)	The identification and quantification of the cost of the services and business functions provided to DLE by Duquesne (“Duquesne Costs”) or other Duquesne companies, other
than Power Procurement Services, and 

  

 14 

	 	(2)	The identification and quantification of the cost of Power Procurement Services. For the purposes of this paragraph, Power Procurement Services shall mean: 

 

	 	(i)	The cost of any credit support provided directly to DLE, or indirectly via credit support provided to Duquesne Power (“DP”) (or any other affiliate), and used for joint
power procurement; 

  

	 	(ii)	The reduced cost (if any) of purchased power (as compared to similar power procurement arrangements that might be made with a non-affiliate) realized by DLE as a result of its power
procurement arrangement with DP (or any other affiliate); 

  

	 	(iii)	The cost of power procurement support functions (such as, but not limited to, wholesale power procurement, hedging, scheduling, balancing, forecasting and RTO/ISO settlement
activities) provided directly to DLE or that DLE indirectly receives due to its power procurement arrangement with DP (or any other affiliate); and 

  

	 	(iv)	The cost of administrative support provided by other Duquesne companies directly to DLE or that DLE indirectly benefits from due to its power procurement arrangement with DP (or any
other affiliate). 

 With respect to Power Procurement Services the independent auditor/consultant also will quantify what the
cost of such Power Procurement Services would be if they were acquired by DLE independently 
  

 15 

 (hereinafter “Independent Acquisition Cost Analysis”); provided, however, that this
Independent Acquisition Cost Analysis will not be applied to : (1) credit support provided directly to DLE by DLH or Duquesne, if, for the calendar year 2006, a portion of the cost of such credit support was allocated to DLE as an intercompany
transfer; and (2) any Power Procurement Service costs where the service provided by the non-regulated affiliate is obtained from independent third parties. Notwithstanding the above, in no event will the Independent Acquisition Cost Analysis
include any costs incurred by Duquesne. 
  

	 	b.	The independent auditor/consultant described in paragraph 10.J.2.a. above, shall be selected from a list of three (3) qualified consultants identified by Duquesne and provided
to RESA. From this list RESA shall have the right to select the independent auditor/consultant, unless RESA reasonably determines that none of the consultants are in fact independent or qualified to conduct the required analysis, in which case the
parties will prepare a list of six (6) qualified consultants, three (3) of whom shall be identified by Duquesne (and none of whom were on Duquesne’s previous list) and three (3) of whom shall be identified by RESA. If the parties
can agree on a consultant from this list, that auditor/consultant will perform the study. If the parties cannot agree, then each party will rank the six auditor/consultants in descending order of preference, and the auditor/consultant with the
lowest overall score will be selected. 

  

 16 

	 	c.	The independent auditor/consultant selected above will perform an audit for calendar year 2007. The results of the non-confidential portion of the third party report will be made
available to RESA and Strategic. Confidential portions, including items such as contract provisions, pricing and salary information, shall not be shared with any suppliers except consistent with the Stipulated Protective Agreement executed in this
proceeding including Duquesne’s ability to redact information relative to pricing and load projections (subject to the supplier’s right to obtain an order from the Commission requiring production because such data is required to be
provided under the terms of that Stipulated Protective Agreement). In addition, the independent auditor/consultant, RESA and Strategic will not be provided with individual electric retail customer pricing and load information. The independent
auditor/consultant will conduct an internal audit to evaluate compliance with the accepted recommendations from the independent auditor/consultant and provide interested RESA members with the results of the audit. 

  

	 	d.	DLE will remit payment to appropriate other Duquesne companies for the Duquesne Costs or other Duquesne companies’ costs and Power Procurement Services costs as defined above
(and as determined in the independent third party report), of all services and business support functions provided by affiliate companies identified in the independent third party assessment described above and agreed to by DLH. DLH reserves the
right to reject assessment recommendations made by the 

  

 17 

 independent auditor/consultant. However, except for the limitation in paragraph “e”, below,
nothing in this Agreement shall limit the right of any of the parties from pursuing any available legal recourse, including the filing of a complaint or other request for relief with the Commission regarding any affiliated interest, inter-company
cross subsidy or competitive issue involving Duquesnc or any affiliate of Duquesne. No party shall be deemed to have adopted or accepted the cost allocation principles set forth herein as fair, reasonable or sufficient to avoid uncompetitive cross
subsidies for Duquesne or for any other public utility. 
  

	 	e.	Collectively RESA and independently its members Direct Energy Services, LLC, Hess Corporation and Strategic agree that this settlement resolves all issues relating to inter company
cost allocations in this proceeding and in Duquesne’s filing to establish POLR IV rates effective January 1, 2008. 

 III. CONDITIONS OF SETTLEMENT 
 11. This Settlement is conditioned upon the Commission’s approval of the terms and
conditions contained herein without modification. If the Commission modifies the Settlement, then any Joint Petitioner may elect to withdraw from this Settlement and may proceed with litigation and, in such event, this Settlement shall be void and
of no effect. Such election to withdraw must be made in writing, filed with the Secretary of the Commission and served upon all Joint Petitioners within five (5) business days after the entry of an order modifying the Settlement. This
Settlement is proposed by the Joint Petitioners to settle all issues among the Joint Petitioners in the instant proceeding. The Settlement is made without any admission against, or prejudice to, any position which any Joint Petitioner to this
Settlement may adopt in 
  

 18 

 the event of any subsequent litigation of this proceeding or any other proceeding, unless that proceeding involves
Duquesne or Network to the extent matters resolved by this Settlement are an issue in that proceeding. If the Commission does not approve the Settlement and the proceedings continue to further hearings, the Joint Petitioners reserve their respective
rights to conduct full cross-examination and briefing. 
 12. The consummation and closing of the Merger shall constitute conditions
precedent to the Settlement and all obligations of the Joint Petitioners hereunder, and Duquesne and the other Joint Petitioners shall not be bound by the terms hereof if Duquesne advises the Commission and the parties that the Merger will not close
and requests that the Commission cancel the Certificates of Public Convenience to be issued hereunder. 
 13. The Joint Petitioners agree
that this Settlement shall not constitute or be cited as controlling precedent in any other proceeding, including any other proceeding involving a merger or acquisition involving another Pennsylvania public utility, with the exception that the
Settlement, if adopted, will bind the Joint Petitioners in any future proceeding involving Duquesne or Network to the extent matters resolved by this Settlement are an issue in such proceeding. 
 14. If the ALJ adopts the Settlement without modification, the Joint Petitioners waive their rights to file exceptions. 
 IV. PUBLIC INTEREST REASONS IN SUPPORT OF SETTLEMENT 
 15. The Settlement, if approved by the Commission, will provide substantial public benefits. These
benefits5 include the following: 
  

	 5
	 The explanations provided below include summaries of Settlement provisions and do not modify in any
manner the specific provisions of the Settlement. 

  

 19 

	 	•	Duquesne has agreed to a provision that will provide customers with reasonable assurance of distribution rate stability to at least January 1, 2010. 

 

	 	•	All aspects of the acquisition premium and transaction costs will be excluded from future distribution and transmission rates. 

  

	 	•	Duquesne commits to provide annual reports to the Commission over the next three years regarding the status of all commitments under the Settlement. 

  

	 	•	Duquesne agrees to adopt a Quality of Service Plan that (i) establishes metrics and reporting requirements to enable the Commission and parties to monitor Duquesne’s
quality of service following the Merger and (ii) provides a process to address variances from the Quality of Service Plan. 

  

	 	•	The Merger will provide Duquesne with an opportunity to obtain more efficient access to capital. 

  

	 	•	The Merger will establish a competitively neutral Economic Development Plan to attract new and support expanding Pennsylvania industrial employers. 

  

	 	•	Duquesne commits to continue its substantial community commitments at least at levels substantially comparable to current levels. 

  

	 	•	Duquesne commits to retain its headquarters and all of its corporate functions in Pittsburgh and commits not to move its headquarters outside the service territory without prior
Commission approval. 

  

	 	•	The Settlement avoids the additional expenditure of time and funds that would be required to litigate this matter before the Commission. 

 16. The Joint Petitioners agree that the Merger, as amended by the Settlement, meets the affirmative benefits test as set forth in City of York v. Pa.
P.U.C., 449 Pa. 136, 295 A.2d 825 
  

 20 

 (1972) and also satisfies the ten specific public interest findings that the
Commission considered in its Order in Application of Penn Estates Utilities, Inc, Docket No. A-210072F0003, et al., Order entered October 2, 2006, as summarized next, and as set forth more specifically in the Settlement and
record.6 
  

	 	A.	Capital Will Continue To Be Expended For Ongoing Operations 

  

	 	•	Duquesne commits to its current planned funding levels of its infrastructure improvement plan. (Settlement Paragraph 10.F. 1.) 

  

	 	•	Duquesne’s agreement to adopt a Quality of Service plan demonstrates its commitment to continue to provide high quality service. (Settlement Paragraph 10.F.2)

  

	 	•	Duquesne’s current collective bargaining agreement will be honored, which provides that: “No regular full-time employee hired on or before June 1, 2005 shall be laid
off except under extraordinary circumstances . . . .” Duquesne further acknowledges under the Settlement that the Merger transaction is not an “extraordinary circumstance.” (DLC St. No. 1, p. 16; Settlement Paragraph 10.F.4.)

  

	 	•	Duquesne commits to continue and expand its universal service programs. (Settlement Paragraph 10.G.I, and 10.G.3.) 

  

	 	B.	Corporate Governance Will Not Be Impaired 

  

	 	•	DQE Holdings and the current CEO of DLH have executed an employment agreement providing that the CEO will continue to lead DLH. Further, the CEO of DLH will be a member of the board
of DQE Holdings. (Settlement Paragraph 10.E.10.) 

  

	 6
	 To the extent the following summary is supported by testimony and exhibits of Applicants, Joint
Petitioners other than Applicants do not necessarily join in such summary. 

  

 21 

	 	•	The CEO will chair a management committee which will contain representatives of the senior management team and the Macquarie Consortium. (Settlement Paragraph 10.E.10.)

  

	 	•	Duquesne will provide annual reports (10-K) filed with the Securities and Exchange Commission to OTS, OCA and OSBA. (Settlement Paragraph 10.E.4.) 

  

	 	C.	The Macquarie Consortium Anticipates A Long-Term Ownership Of DLH 

  

	 	•	The focus of the infrastructure investment funds that make up the Macquarie Consortium is the long-term ownership, management and development of important infrastructure assets.
(DLC St. No. 2, p. 3) 

  

	 	•	Public sector and corporate pension funds are large investors in the funds that make up the Macquarie Consortium. Such investors seek investments that produce long- term cash flows
to offset their long-term liabilities, and thus do not require a sale or defined exit strategy to achieve their investment goals. (DLC St. No. 2, pp. 9-10; DLC St. No. 2R, p. 2) 

  

	 	•	The Macquarie Consortium has a global track record demonstrating its commitment to the long term investment in Duquesne. (DLC St. No. 2, p. 10) 

  

	 	D.	The Macquarie Group Has Substantial Experience In Owning Utilities 

  

	 	•	The Macquarie Group manages funds that comprise approximately 64.3% of the equity in the Macquarie Consortium. In the United States, Macquarie Group’s investments in energy and
utilities include Aquarion Company, a New England water utility (pending acquisition, subject to regulatory approval), The Gas Company, a Hawaiian full service gas company, and Thermal Chicago, district energy businesses operating in Chicago and Las
Vegas. (DLC St. No. 2, p. 5) 

  

 22 

	 	•	Worldwide, Macquarie Group investments serve over 3.4 million gas distribution households, 4 million water households, and 550,000 electric distribution households.
Macquarie Group also invests in electric transmission facilities that serve over 4 million people. (DLC St. No. 2, p. 4) 

  

	 	•	Macquarie Group also has substantial investments in other “public service” sectors such as airports, toll roads and rail systems. (DLC St. No. 2, p. 4)

  

	 	•	Macquarie Group’s philosophy is to maintain existing management to continue existing operational excellence. This philosophy will be followed with respect to DQE Holdings. (DLC
St. No. 2, p. 3) 

  

	 	E.	Duquesne’s Existing Presence In The Pittsburgh Community Will Be Retained 

  

	 	•	Duquesne’s corporate headquarters will remain in Pittsburgh, and will not be moved outside of Duquesne’s service territory without advance approval of the Commission.
(Settlement Paragraph 10.C.1.) 

  

	 	•	Duquesne and DQE Holdings commit to maintain operating locations and field offices in its territory, and staffing levels, as appropriate, to provide safe and reliable service.
(Settlement Paragraph 10.C. 1.) 

  

	 	•	Duquesne will continue to coordinate with administering agencies and CBOs to administer its low income programs and will convene a collaborative of interested parties to consider
Duquesne’s universal service programs. (Settlement Paragraph 10.G.2.) 

  

	 	•	Duquesne commits to maintain corporate contributions and community support at least at levels comparable to the $2.9 million provided in 2006. (Settlement Paragraph 10.H.1.)

  

 23 

	 	•	Duquesne commits to match customer contributions to its hardship fund with shareholders dollars up to $375,000. 

  

	 	•	Duquesne will establish a new Economic Development Program through March 1, 2013, to attract and expand Pennsylvania industrial employers by offering a flat 50 MW block
(7x24) of energy consumed at the new or expanded facility at a discount up to $3/MWh below market. (Settlement Paragraph 10.H.2.) 

  

	 	F.	There Will Not Be Complex Affiliate Relationships Involved 

  

	 	•	The Macquarie Consortium consists of six investment funds, all with similar strategies of investing in long term infrastructure. As investment funds, the Macquarie Consortium will
not be providing services other than financing for DLH and Duquesne. (DLC St. No. 2, pp. 9-10; DLC St. No. 2R, pp. 5-7) 

  

	 	•	Funds managed by the Macquarie Group will hold 64.3% of the equity in DQE Holdings, thereby owning the majority of the equity in the investment group. (DLC St. No. 2, p. 5)

  

	 	G.	Fees Paid To And Services Performed By Affiliates 

  

	 	•	Services provided by other utilities in which the Macquarie Consortium has an interest will be provided only after the filing and approval of an affiliated interest agreement.
(Settlement Paragraph 10.E.3.) Such services are expected to be limited, and in the nature of sharing of best practices. (DLC St. No. 2R, p. 6) 

  

	 	•	There are no current plans to add new service corporations or similar affiliates to provide day to day services to Duquesne; however, Duquesne will have access to other utilities or
entities managed by the Macquarie Consortium. (DLC St. No. 2R, p. 6) 

  

 24 

	 	•	Duquesne will revise its corporate cost allocations to include a rent charge for space occupied by affiliates, and a supplies charge for supplies used by affiliate employees.
(Settlement Paragraph 10.I.1.) 

  

	 	•	Costs incurred by DLH will be allocated, as appropriate, to other Duquesne affiliates. (Settlement Paragraph 10.I.2.) 

  

	 	•	Duquesne’s cost allocations will include appropriate charges for letters of credit, sureties and the DLH revolving credit agreement. (Settlement Paragraph 10.I.3.)

  

	 	•	Duquesne will provide a report detailing its recent revisions to corporate cost allocations in the POLR IV filing. (Settlement Paragraph 10.I.4.) 

  

	 	H.	The Settlement Commits To Limits On Duquesne’s Use Of Leverage And Other Capital Structure Protections 

  

	 	•	The Settlement provides that Duquesne’s long-term debt ratio will not exceed 60% of total capitalization without Commission approval. (Settlement Paragraph 10.E.8.)

  

	 	•	Duquesne agrees to continue to have outstanding separately issued debt held by investors not affiliated with Duquesne or its affiliates, unless the Commission authorizes to the
contrary. (Settlement Paragraph 10.E.6.) 

  

	 	•	Duquesne commits to notify the Commission in advance if it intends to declare a special cash dividend to DLH. (Settlement Paragraph 10.E.9.) 

  

	 	•	Duquesne commits in any future base rate proceeding to demonstrate that its claimed common equity ratio is reasonable and in the best interest of consumers.

  

	 	I.	The Settlement Ensures Transparency On Corporate Structure Issues 

  

	 	•	Under the Settlement DLH and its subsidiaries agree to provide the Commission and various parties reasonable access to the books and records, officials and staff of DLH and its
subsidiaries. (Settlement Paragraph 10.D.1.) 

  

 25 

	 	•	Duquesne agrees not to guarantee debt of DLH or affiliates, grant liens upon its property, or to make loans or extend credit to DLH or any affiliate, without prior Commission
approval. (Settlement Paragraph 10.E.1.) 

  

	 	•	DLH and its subsidiaries will provide upon request to OTS, OCA and OSBA access, where relevant, to presentations given to the financial community. (Settlement Paragraph 10.E.7.)

  

	 	J.	The Macquarie Consortium Is Creditworthy 

  

	 	•	The Macquarie Group, which consists of Macquarie Bank Limited, its affiliates and investment vehicles managed by its affiliates, manages funds that own approximately 64.3% of the
equity in the transaction. (DLC St. No. 2, p. 1) 

  

	 	•	The Macquarie Group currently manages over $27 billion in equity invested in infrastructure and similar assets globally. (DLC St. No. 2, p. 4) 

  

	 	•	The other investors not affiliated with the Macquarie Group each individually manage several billion dollars of investments. (DLC St. No. 2, p. 8) 

  

	 	•	Over $1 billion will be invested by the Macquarie Consortium in financing the purchase. (DLC St. No. 2, p. 6) 

  

	 	•	As managers of large pools of investment funds, consisting largely of pension funds, the members of the Macquarie Consortium have substantial access to additional equity capital
under all market conditions. (DLC St. No. 2, pp. 8-9) 

 The Merger Does Not Harm And Will Advance Retail
Competition  
 17. In addition to the foregoing reasons in support, the Settlement and Merger satisfy the requirements of
Section 281 l(e) of the Public Utility Code, which directs the Commission to consider whether the proposed Merger “is likely to result in anticompetitive or discriminatory 
  

 26 

 conduct . . . which will prevent retail electricity customers in this Commonwealth from obtaining the benefits of a
properly functioning and workable retail electricity market . . . .” Under the Settlement, Duquesne has agreed to a series of conditions responsive to concerns of competitive marketers. These include: 
  

	 	•	Corporate cost allocation provisions described previously. (Settlement Paragraph 10.I.1-4.) 

  

	 	•	Duquesne agrees to continue its support of the development of competitive retail markets. (Settlement Paragraph 10.J.1.) 

  

	 	•	DLH agrees to arrange for an independent consultant to conduct an assessment to identify and quantify any costs for services and functions provided to non-regulated affiliates.
(Settlement Paragraph 10.J.2.) 

  

	 	•	The Economic Development Program, described previously, is available to customers without regard to the identity of their energy provider. (Settlement Paragraph 10.H.2.)

 18. In addition to the foregoing, further explanations of why the Settlement is in the public interest are provided in the
Statements in Support of the Settlement by Duquesne, Network, OTS, OCA, OSBA, IBEW 29, CAAP, Dominion, RESA, Strategic, DII and PALEUC, which will be submitted forthwith. 
  

 27 

 WHEREFORE, the Joint Petitioners, by their respective counsel, respectfully request as follows:

 (a) That the Honorable Administrative Law Judge Robert P. Meehan and the Commission approve this Settlement including all terms and
conditions thereof without modification. 
 (b) That the Commission issue certificates of public convenience evidencing approval under
Section 1102(a)(3) of the Public Utility Code of the acquisition, by merger, of Duquesne Light Holdings, Inc., the parent of Duquesne Light Company and DQE Communications Network Services LLC, by Macquarie Consortium and DQE Holdings, LLC and
grant all such other approvals deemed necessary. 
 Respectfully submitted, 
  

					
	 /s/ Michael W. Gang
	 		 	 /s/ Daniel G. Asmus

	 Michael W. Gang, Esquire
 David B. MacGregor,
Esquire
 Andrew S. Tubbs, Esquire
 Gary Jack, Esquire

For: Duquesne Light Company
	 		 	 Daniel G. Asmus, Esquire
 For: Office of Small
Business Advocate 

			
	 /s/ Charles Daniel Shields
	 		 	 /s/ Pamela C. Polacek

	 Charles Daniel Shields, Esquire
 Robert V. Eckenrod,
Esquire
 For: Office of Trial Staff
	 		 	 Pamela C. Polacek, Esquire
 Adam L. Benshoff,
Esquire
 For: Duquesne Industrial Intervenors

			
	 /s/ Darryl Lawrence
	 		 	 /s/ Daniel Clearfield

	 Tanya J. McCloskey, Esquire
 Darryl Lawrence,
Esquire
 Jennedy E. Santolla, Esquire
 For: Office of Consumer
Advocate
	 		 	 Daniel Clearfield, Esquire
 Kevin J. Moody,
Esquire
 For: Retail Energy Supply Association
 Hess
Corporation
 Direct Energy, LLC

			
		 		 	 /s/ Todd S. Stewart

		 		 	 Todd S. Stewart, Esquire
 For: Dominion Retail,
Inc.

 Date: 2/8/07 
  

 28 

	
	 /s/ Scott J. Rubin

	Scott J. Rubin, Esquire
	For: International Brotherhood of Electrical Workers Local 29
	
	 /s/ Joseph L. Vullo

	Joseph L. Vullo, Esquire
	For: Community Action Association of Pennsylvania
	
	 /s/ Erin Creahan

	 Erin Creahan, Esquire
 Julie Colletti, Esquire

For: Strategic Energy, LLC

	
	 /s/ Paul F. Forshay

	Theodore H. Jobes, Esquire
	Steven S. Goldenberg, Esquire
	Paul F. Forshay, Esquire
	For: Pennsylvania Large Energy Users Coalition

 Date: 2/09/07Enterprise Funding Agreement

 Exhibit 10(f) 
 

 
 Enterprise Funding Agreement 
 Alcoa Inc 
 Alumina Limited 
 Alcoa Australian Holdings Pty Ltd 
 Alcoa of Australia Limited 

Enterprise Funding Partnership 
  
 

 

 CONTENTS 
  

							
	1.	  	 INTERPRETATION
	  	2
				
		  	 1.1
	  	 Definitions
	  	2
		  	 1.2
	  	 Rules for interpreting this document
	  	9
			
	2.	  	 TERM OF AGREEMENT
	  	9
			
	3.	  	 AOFA DIVIDENDS
	  	10
				
		  	 3.1
	  	 Distribution of Dividends
	  	10
		  	 3.2
	  	 Limitations on Dividends
	  	10
		  	 3.3
	  	 Calculation and payment of Dividends
	  	12
		  	 3.4
	  	 Quarterly Dividends
	  	12
		  	 3.6
	  	 Restriction on capitalisation
	  	13
		  	 3.7
	  	 Provision of information
	  	13
		  	 3.8
	  	 Initial Dividends
	  	13
			
	4.	  	 FUNDING OF ENTERPRISE COMPANIES
	  	14
				
		  	 4.1
	  	 Calls by an Enterprise Company
	  	14
		  	 4.2
	  	 Requirements for Valid Calls
	  	15
		  	 4.3
	  	 Time for payment of Valid Calls
	  	15
		  	 4.4
	  	 Funding Valid Calls
	  	15
		  	 4.5
	  	 Enterprise Loans
	  	17
		  	 4.6
	  	 Tax Rulings
	  	17
		  	 4.7
	  	 Tax Events and Dissolution of Enterprise Funding Partnership
	  	18
		  	 4.8
	  	 Limits on Enterprise Loans to AofA Group
	  	18
		  	 4.9
	  	 Failure to pay
	  	19
		  	 4.10
	  	 Non-Enterprise Loan funding mechanisms
	  	19
		  	 4.11
	  	 Initial Calls
	  	20
		  	 4.12
	  	 Exclusivity and Prioritization; Related Party Borrowings and Use of Cash Balances and Cash Equivalents
	  	21
		  	 4.13
	  	 Treatment of loans and Enterprise Loan proceeds
	  	22
			
	5.	  	 OCCURRENCE OF A TAX EVENT
	  	23
				
		  	 5.1
	  	 Notice of a Tax Event
	  	23
		  	 5.2
	  	 Mitigating the effect of the Tax Event
	  	24
		  	 5.3
	  	 Consequences of a Tax Event
	  	24
		  	 5.4
	  	 Parties to act diligently
	  	25
		  	 5.5
	  	 Negotiation
	  	26
			
	6.	  	 RESOLUTION OF DISPUTES
	  	26
			
	7.	  	 TERMINATION
	  	26

  

 Page i 

							
		  	 7.1
	  	Termination events	  	26
		  	 7.2
	  	 Consequences of termination
	  	27
		  	 7.3
	  	 Review after 12 months
	  	27
		  	 7.4
	  	 Extension
	  	27
			
	8.	  	 REPRESENTATIONS AND WARRANTIES
	  	27
				
		  	 8.1
	  	 Representations and warranties by each party
	  	27
		  	 8.2
	  	 Reliance on representations and warranties
	  	28
			
	9.	  	 GST
	  	28
				
		  	 9.1
	  	 GST to be added to amount payable
	  	28
		  	 9.2
	  	 Liability net of GST
	  	28
		  	 9.3
	  	 GST obligations to survive termination
	  	28
		  	 9.4
	  	 Definitions
	  	28
			
	10.	  	 NOTICES
	  	29
			
	11.	  	 ASSIGNMENT AND ADDITION
	  	30
				
		  	 11.1
	  	 No assignment
	  	30
		  	 11.2
	  	 Addition of new Shareholder
	  	30
		  	 11.3
	  	 Addition of new Partner
	  	30
		  	 11.4
	  	 Control of Partners and Shareholders
	  	30
			
	12.	  	 GENERAL
	  	31
				
		  	 12.1
	  	 Governing law
	  	31
		  	 12.2
	  	 Amendment
	  	31
		  	 12.3
	  	 Liability for expenses
	  	31
		  	 12.4
	  	 Giving effect to this document
	  	31
		  	 12.5
	  	 Waiver of rights
	  	31
		  	 12.6
	  	 Operation of this document
	  	32
		  	 12.7
	  	 Costs and stamp duty
	  	33
		  	 12.8
	  	 Counterparts
	  	33
		  	 12.9
	  	 Attorneys
	  	33
		
	SCHEDULE 1	  	34
			
		  	 TERMS OF ENTERPRISE LOANS
	  	34

  

 Page ii 

 ENTERPRISE FUNDING AGREEMENT 
 DATE 18 September 2006 
 PARTIES 
 Alcoa Inc of Alcoa Corporate Center, 201 Isabella Street, Pittsburgh, Pennsylvania, United States of America (Alcoa) 
 Alumina Limited ABN 85 004 820 419 of Level 12, IBM Centre, 60 City Road, Southbank, Victoria, Australia (Alumina) 
 Alcoa Australian Holdings Pty Ltd ABN 33 096 987 370 of corner Davy and Marmion Streets, Booragoon, Western Australia, Australia (AAH)

 Alcoa of Australia Limited ABN 93 004 879 298 of corner Davy and Marmion Streets, Booragoon, Western Australia, Australia
(AofA) 
 Enterprise Funding Partnership between AAH and Alumina constituted by the Partnership Agreement dated on or about the
date of this document (Enterprise Funding Partnership) 
 RECITALS 
  

	A.	Alumina and Alcoa are participants in the unincorporated global venture known as Alcoa World Alumina and Chemicals (AWAC). The operations of AWAC are conducted by the
Enterprise Companies (including AofA) which are owned (directly or indirectly) as to 60% by Alcoa and 40% by Alumina. 

  

	B.	The AWAC Documents regulate the operations of AWAC and provide, amongst other things, for the distribution of the profits of AWAC to Alcoa and Alumina (directly or indirectly via
their respective Affiliates) and for the funding by Alcoa and Alumina (directly or indirectly via their respective Affiliates) of the activities of AWAC undertaken by the Enterprise Companies. 

  

	C.	AAH and Alumina are the shareholders of AofA and are partners in the Enterprise Funding Partnership, which has been formed to provide funding to AofA and other Enterprise Companies
for certain activities of AWAC. 

  

	D.	Under the Shareholders’ Agreement, the shareholders of AofA agreed to cause AofA to distribute by way of dividends at least 30% of the net income of AofA for each financial
year subject to the terms of that agreement. 

  

	E.	The parties wish to record their agreement with respect to the payment of dividends by AofA and the funding of certain activities of AWAC, as set out in this document.

  

 Page 1 

 OPERATIVE PROVISIONS 
  

	1.	
INTERPRETATION 

  

	1.1	
Definitions 

 The following definitions apply in this document. 
 1997 Act means the Income Tax Assessment Act 1997 (Cth). 
 Affiliate means, in relation to an entity (the first entity): 
  

	 	(a)	a Subsidiary of the first entity; 

  

	 	(b)	an entity of which the first entity is a Subsidiary; or 

  

	 	(c)	a Subsidiary of another entity of which the first entity is also a Subsidiary, 

 except that Alcoa’s Affiliates do not include the Enterprise Companies. 
 AofA Board means the
board of directors of AofA from time to time. 
 AofA Group means AofA and its Subsidiaries from time to time. 
 Auditor means the auditor of AofA from time to time, which at the Commencement Date and the date of this document is PricewaterhouseCoopers.

 Available Cash means, in relation to any Dividend, the projected Cash Balances and Cash Equivalents of the AofA Group at the
Dividend Payment Date as reasonably and in good faith estimated by Alcoa, after taking into account (by deduction): 
  

	 	(a)	its cash requirements to cover any projected negative Free Cash Flow of the AofA Group during the remainder of the then current Quarter and the next three Quarters, as reasonably
and in good faith estimated by Alcoa, as industrial leader of AWAC, under United States generally accepted accounting principles; and 

  

	 	(b)	AofA’s cash requirements for the payment of the next scheduled Dividend relating to a Minimum Dividend Amount, after taking into account any projected positive Free Cash Flow
of the AofA Group from the Dividend Payment Date for the relevant Dividend until the Dividend Payment Date for that next scheduled Dividend relating to a Minimum Dividend Amount as reasonably and in good faith estimated by Alcoa; and

  

	 	(c)	any scheduled repayment or payment on or before the Dividend Payment Date by AofA of an amount of principal outstanding, and any interest thereon, under an Enterprise Loan made to
AofA, in accordance with the terms of that Enterprise Loan. 

  

 Page 2 

 While the Tax Rulings are in effect and: 
  

	 	(i)	neither clause 4.7 nor clause 4.8 would prevent the making of a relevant Enterprise Loan to AofA; and 

  

	 	(ii)	the approval requirements for equity requests referred to in clause 4.4(b)(i) would not prevent a relevant equity contribution to AofA (either because the relevant requirements are
not applicable to the equity contribution, or because the relevant approval for the equity contribution is or will be provided), 

 Available Cash will be determined (including in respect of the calculation of Free Cash Flow in paragraphs (a) and (b) above) without having regard to any current or prospective growth and sustaining capital expenditure payments
and incremental working capital requirements of the AofA Group. 
 AWAC Documents means: 
  

	 	(a)	the agreements which established AWAC on 1 January 1995 and which govern its operation, including the Formation Agreement, the Charter and the LLC Agreement;

  

	 	(b)	the Shareholders’ Agreement and the letter agreement dated 16 May 1995 between Alumina and Alcoa; and 

  

	 	(c)	the constituent and governing documents of the Enterprise Companies, including the constitution of AofA. 

 Business Day means any day (other than Saturday or Sunday) on which registered banks are open for general business in Melbourne and New York.

 Call means a notice provided under clause 4.1 or 4.11. 
 Cash Balances and Cash Equivalents means cash on hand, demand deposits and financial investments that are convertible to cash, less at call borrowings. 
 Cash Flow from Operating Activities means cash flow from operating activities, as determined in accordance with United States generally accepted
accounting principles. 
 Charter means the Charter of the Strategic Council dated 21 December 1994 between Alcoa and Alumina.

 Commencement Date means 1 January 2006. 
 Contribution Amount means, in relation to a Valid Call (or part of a Valid Call), an amount equal to: 
  

	 	(a)	the amount of the Valid Call (or part of the Valid Call); less 

  

	 	(b)	the amount of cash held by the Enterprise Funding Partnership which is available to fund the Valid Call (or part of the Valid Call). 

  

 Page 3 

 Corporations Act means the Corporations Act 2001 (Cth). 
 Current Financial Year means, in relation to a Dividend, the Financial Year in which the Dividend is to be paid. 
 Dividend means a dividend (whether final or interim) declared by AofA from time to time and that is payable to each Shareholder in respect of each
of their shares in AofA (and in an equal amount per share for all of the Shareholders). 
 Dividend Payment Date means, in respect of a
Dividend, the date on which the Dividend is paid (or, if earlier, the latest date on which the Dividend is required to be paid). 
 Enterprise Company means each of those entities owned (directly or indirectly) by Alumina and Alcoa as part of AWAC. 
 Enterprise Funding Requirements means, in relation to an Enterprise Company for a given period, an amount equal to the aggregate of: 
  

	 	(a)	the growth and sustaining capital expenditure payments and incremental working capital requirements of the Enterprise Company during the relevant period; 

 

	 	(b)	the amount equal to any projected negative Cash Flow from Operating Activities of the Enterprise Company during the relevant period; and 

  

	 	(c)	where the Enterprise Company is Abalco S.A. or Omnia Minerios Ltda, the total amount of any outstanding loans provided to the Enterprise Company by any other Enterprise Company on
or after 1 August 2005 but before 31 December 2006 that is due to be repaid by the Enterprise Company during the relevant period, 

 less, in the case of an Enterprise Company that is not a member of the AofA Group, the Enterprise Company’s projected positive Cash Flow from Operating Activities (if any, and after deducting any scheduled
repayment or payment by such company during the relevant period of an amount of principal outstanding, and any interest thereon, under an Enterprise Loan made to it, in accordance with the terms of that Enterprise Loan) for the relevant period.

 Unless otherwise agreed by Alcoa and Alumina, capital requirements of an Enterprise Company for the acquisition of an existing bauxite or
alumina business or other existing business shall not be considered an Enterprise Funding Requirement and shall be outside the scope of this document. 
 Enterprise Loan means a loan from the Enterprise Funding Partnership to an Enterprise Company under an agreement between those entities that is substantially on the terms set out in Schedule 1 (except to the
extent otherwise agreed between Alumina and Alcoa) and otherwise as agreed between the Enterprise Funding Partnership and the relevant Enterprise Company. 
 Excess Dividends means all Dividends paid or to be paid by AofA after 1 January 2006 (other than Dividends paid or to be paid in respect of a Minimum Dividend Amount), including Quarterly Dividends and the
Dividend of $118 million (equivalent to 

  

 Page 4 

 
approximately US$85 million) paid in the first Quarter of 2006 (of a Total Dividend Amount of $364 million) and the Dividend of $270 million (equivalent to
approximately US$200 million) paid in the second Quarter of 2006. 
 Financial Year means the period from 1 January 2006 to
31 December 2006 and then each succeeding period from 1 January to the next 31 December (or, if earlier, the date of termination of this document in accordance with its terms). 
 Free Cash Flow means Cash Flow from Operating Activities, less capital expenditures. 
 Formation Agreement means the Formation Agreement dated as of 21 December 1994 between Alcoa, Alcoa International Holdings Company, ASC
Alumina Inc, Alumina, Alumina International Holdings Pty Ltd and Alumina (USA) Inc. 
 Funding Period means each period of three months
beginning on 1 February, 1 May, 1 August and 1 November in each Financial Year (or such lesser period ending on the date of termination of this document in accordance with its terms). 
 Initial AofA Funding Period means the period from the Commencement Date to 31 January 2007. 
 Initial Non-AofA Funding Period means the period from the Commencement Date to 31 October 2006. 
 Insolvency Event means: 
  

	 	(a)	in relation to any Australian party, the occurrence of any of the following: 

  

	 	(i)	it has proceedings commenced (other than proceedings that are frivolous, vexatious or lacking in good faith or that are dismissed within 90 days), a resolution passed or an order of
a court made under any bankruptcy, reorganisation or similar laws of Australia or any of its constituent states or territories by or against that party, or for the winding up, liquidation or dissolution of that party or its business, other than for
the purpose of a solvent reconstruction or amalgamation; 

  

	 	(ii)	it has proceedings commenced (other than proceedings that are frivolous, vexatious or lacking in good faith or that are dismissed within 90 days), a resolution passed or an order of
a court made for it to enter an arrangement, compromise or composition with or assignment for the benefit of its creditors, a class of them or any of them, other than for the purpose of a solvent reconstruction or amalgamation;

  

	 	(iii)	it has a receiver appointed for all or any of its assets; 

  

	 	(iv)	it stops or suspends or threatens to stop or suspend payment of all or a class of its debts, or otherwise admits in writing its inability to pay its debts as they become due; or

  

	 	(v)	it becomes insolvent or suffers any event similar or analogous to those set out in paragraphs (a)(i) to (iv) above; 

  

 Page 5 

	 	(b)	in relation to Alcoa, the occurrence of any of the following: 

  

	 	(i)	it has proceedings commenced (other than proceedings that are frivolous, vexatious or lacking in good faith or that are dismissed within 90 days), a resolution passed or an order of
a court made under any bankruptcy, reorganisation or similar laws of the United States of America or any of its constituent states by or against Alcoa, or for the winding up, liquidation or dissolution of Alcoa or its business, other than for the
purpose of a solvent reconstruction or amalgamation; 

  

	 	(ii)	it has proceedings commenced (other than proceedings that are frivolous, vexatious or lacking in good faith or that are dismissed within 90 days), a resolution passed or an order of
a court made for it to enter an arrangement, compromise or composition with or assignment for the benefit of its creditors, a class of them or any of them, other than for the purpose of a solvent reconstruction or amalgamation;

  

	 	(iii)	it has a receiver appointed for all or any of its assets; 

  

	 	(iv)	it stops or suspends or threatens to stop or suspend payment of all or a class of its debts, or otherwise admits in writing its inability to pay its debts as they become due; or

  

	 	(v)	it becomes insolvent or suffers any event similar or analogous to those set out in paragraphs (b)(i) to (iv) above; and 

  

	 	(c)	in relation to any other party from time to time, the party becomes insolvent or suffers any event similar or analogous to those set out in paragraphs (a)(i) to (iv).

 Interim Net Income means, in relation to a period, the amount of the after tax net income of AofA (before minorities)
for the period under United States generally accepted accounting principles, as reasonably and in good faith determined by AofA. 
 LLC
Agreement means the Amended and Restated Limited Liability Company Agreement of Alcoa World Alumina LLC dated as of 31 December 1994 between Alcoa, ASC Alumina Inc, Alumina International Holdings Pty Ltd and Alumina (USA) Inc. 

Minimum Dividend Amount means, in relation to a Dividend required to be paid in a given Financial Year in accordance with clauses 3.1(a) and
3.3, an amount equal to 30% of the net income of AofA for the preceding Financial Year, as determined under United States generally accepted accounting principles and certified by the Auditor. 
 Partners means the partners in the Enterprise Funding Partnership from time to time, which, as at the date of this document, are AAH and Alumina.

 Partnership Agreement means the Partnership Agreement dated on or about the date of this document between AAH and Alumina in
relation to and constituting the Enterprise Funding Partnership as amended from time to time. 
  

 Page 6 

 Quarter means each period of three months ending on 31 March, 30 June, 30 September
and 31 December in each Financial Year (or such lesser period ending on the date of termination of this document in accordance with its terms). 
 Quarterly Dividend means a Dividend paid or required to be paid by AofA in accordance with clauses 3.1(b), 3.3 and 3.4, or that is deemed to be a Quarterly Dividend under clause 3.8(a) for the purposes of clause 3.4. 
 Share means the proportionate interest (directly and indirectly) of Alcoa and Alumina in AWAC, which, as at the Commencement Date and the date of
this document, is 40% in the case of Alumina and 60% in the case of Alcoa, as adjusted from time to time in accordance with the AWAC Documents. 
 Shareholders means the holders of ordinary shares in AofA, which, as at the Commencement Date and the date of this document, are AAH and Alumina. 
 Shareholders’ Agreement means the agreement dated 10 May 1996 between AAH (as assignee of the rights and obligations of Alcoa International Holdings Company in accordance with the Deed of Accession
dated 1 November 2005) and Alumina (as amended), and includes that agreement as its interpretation and operation are modified by the letter agreement dated 16 May 1995 between Alumina and Alcoa. 
 Strategic Council means the AWAC Strategic Council formed pursuant to the Charter. 
 Subsidiary has the meaning given in the Corporations Act, but an entity will also be taken to be a Subsidiary of an entity if it is controlled by
that entity (as defined in section 50AA of the Corporations Act) and: 
  

	 	(a)	a trust may be a Subsidiary, for the purpose of which a unit or other beneficial interest will be regarded as a share; and 

  

	 	(b)	an entity may be a Subsidiary of a trust if it would have been a Subsidiary if that trust were a corporation. 

 Tax includes any tax, levy, impost, deduction, charge, rate, duty (including stamp duty), compulsory loan or withholding that is levied or imposed
by a government or a governmental, semi-governmental or judicial entity or authority, and any related interest, penalty, charge, fee or other amount. 
 Tax Event means: 
  

	 	(a)	the expiry, termination, withdrawal or other cessation of effect of a Tax Ruling where a substitute or replacement Tax Ruling, having an effect which is not materially less
favourable to the relevant recipient than the substituted or replaced Tax Ruling, has not been granted and is not reasonably anticipated to be granted within three months of the expiry, termination, withdrawal or other cessation of effect of the Tax
Ruling; or 

  

	 	(b)  	(i)     the introduction, commencement or repeal or amendment; or 

  

 Page 7 

	 	(ii)	the change in the interpretation, application or administration by any relevant Tax authority or regulatory body; or 

  

	 	(iii)	the change in the application, as result of the discovery and correction after the date of this document of a previously incorrect application, by Alcoa or any of its Affiliates
that is an entity resident in the United States for income tax purposes, 

 of any Tax law or regulation in any jurisdiction (in
the case of paragraphs (i) and (ii)) or in the United States (in the case of paragraph (iii)) after the date of this document (Tax Law Change Event) where: 
  

	 	(iv)	the Tax Law Change Event is applicable to Alcoa or any of its Affiliates (including AAH), Alumina or any of its Affiliates, the Enterprise Funding Partnership or an Enterprise
Company (or any other relevant person to the extent agreed by Alcoa and Alumina) with respect to any mechanism by which Valid Calls are funded (including Enterprise Loans) or the receipt or payment of Excess Dividends; and 

 

	 	(v)	in the case of a Tax Law Change Event that is applicable to a person who is a Partner, Shareholder or Enterprise Company, the Tax Law Change Event occurred after that person became
a Partner, Shareholder or first becomes the recipient of an Enterprise Loan or other relevant funding mechanism (as the case may be). 

 Tax Ruling Applications means the applications for binding private rulings submitted on behalf of AofA, AAH, Alumina and the Enterprise Funding Partnership by Deloitte Touche Tohmatsu Ltd to the Australian Deputy Commissioner of
Taxation on 16 August 2006. 
 Tax Rulings means the rulings issued after the date of this document by the Australian Commissioner
of Taxation in respect of, and having an effect which is not materially less favourable to any of the relevant recipients than the rulings requested in, the Tax Ruling Applications, or any substitute or replacement ruling or rulings having an effect
which is not materially less favourable to any of the relevant recipients than the substituted or replaced ruling or rulings. 
 Total
Dividend Amount means, in respect of a Dividend, the amount of the Dividend (on a per share basis) multiplied by the total number of shares in AofA in respect of which the Dividend is paid or required to be paid. 
 Valid Call means a Call that is valid under clause 4.2, 4.10(c) or 4.11. 
  

 Page 8 

	1.2	
Rules for interpreting this document 

 Headings are for convenience only, and do not affect
interpretation. The following rules also apply in interpreting this document, except where the context makes it clear that a rule is not intended to apply. 
  

	 	(a)	A reference to: 

  

	 	(i)	legislation (including subordinate legislation) is to that legislation as amended, re-enacted or replaced, and includes any subordinate legislation issued under it;

  

	 	(ii)	a document or agreement, or a provision of a document or agreement, is to that document, agreement or provision as amended, supplemented, replaced or novated;

  

	 	(iii)	a party to this document or to any other document or agreement includes a permitted substitute or a permitted assign of that party; 

  

	 	(iv)	a person includes any type of entity or body of persons, whether or not it is incorporated or has a separate legal identity, and any executor, administrator or successor in law of
the person; and 

  

	 	(v)	anything (including a right, obligation or concept) includes each part of it. 

  

	 	(b)	A singular word includes the plural, and vice versa. 

  

	 	(c)	A word which suggests one gender includes the other genders. 

  

	 	(d)	If a word is defined, another part of speech has a corresponding meaning. 

  

	 	(e)	If an example is given of anything (including a right, obligation or concept), such as by saying it includes something else, the example does not limit the scope of that thing.

  

	 	(f)	The word agreement includes an undertaking or other binding arrangement or understanding, whether or not in writing. 

  

	 	(g)	A reference to dollars or $ is to an amount in Australian currency. 

  

	 	(h)	A reference to US$ is to an amount in United States currency. 

  

	2.	
TERM OF AGREEMENT 

 The term of this document will commence on the Commencement Date and
continue until this document is terminated by operation of law or in accordance with its terms. 
  

 Page 9 

	3.	
AOFA DIVIDENDS 

  

	3.1	
Distribution of Dividends 

 Subject to clause 3.2, the Shareholders will, in relation to each
Financial Year, procure that AofA distributes by way of Dividends the aggregate of: 
  

	 	(a)	the Minimum Dividend Amount payable during the Financial Year in accordance with clause 3.3; and 

  

	 	(b)	the amount of each Quarterly Dividend payable during the Financial Year in accordance with clauses 3.3 and 3.4. 

  

	3.2	
Limitations on Dividends 

  

	 	(a)	Despite anything in this clause 3, the Shareholders do not intend to procure that AofA declares and pays (and must procure that AofA does not declare or pay) any Dividend to the
extent (and only to the extent) that: 

  

	 	(i)	the Dividend would be required to be paid other than out of the profits of AofA, within the meaning of section 254T of the Corporations Act; or 

  

	 	(ii)	the declaration or payment of the Dividend would cause AofA to be unable to pay all its debts as and when they become due and payable, taking into account the requirements of this
document and the Partnership Agreement in relation to the funding of AofA; or 

  

	 	(iii)	if the Dividend is an Excess Dividend: 

  

	 	(a)	the Dividend would not be able to be fully franked without AofA incurring franking deficit tax or over franking tax (as each of those terms is defined in the 1997 Act), taking into
account franking credits that would reasonably be expected to be generated or received by AofA by the end of the franking year (as defined in the 1997 Act) in which the Dividend would be paid; 

  

	 	(b)	payment of the Dividend would result in AofA having insufficient franking credits available to fully frank the next scheduled Dividend relating to a Minimum Dividend Amount, taking
into account franking credits that would reasonably be expected to be generated or received by AofA by the end of the franking year (as defined in the 1997 Act) in which that next scheduled Dividend would be paid; 

  

	 	(c)	payment of the Dividend would result in the aggregate amount of: 

  

	 	(A)	all Dividends (including Excess Dividends and Minimum Dividend Amounts) paid by AofA after 1 January 2006 (including the Dividend of $246 million (equivalent to approximately
US$177 million) paid in March 2006 with respect to the 2005 calendar year, out of a Total Dividend Amount of $364 million paid at that time); and 

  

 Page 10 

	 	(B)	if the Dividend is to be paid before the Minimum Dividend Amount payable during the Current Financial Year has been paid, the estimated amount of the Minimum Dividend Amount to be
paid during the Current Financial Year based on the Interim Net Income of AofA for the Financial Year immediately preceding the Current Financial Year, 

  

	 	exceeding	85% of the sum of: 

  

	 	(C)	the cumulative Interim Net Income of AofA for the period from 1 January 2006 to the end of the Financial Year immediately preceding the Current Financial Year; and

  

	 	(D)	the projected Interim Net Income of AofA for the Current Financial Year as reasonably and in good faith estimated by AofA; or 

  

	 	(d)	payment of the Dividend would reasonably be expected to result in debts of AofA exceeding the level of its “maximum allowable debt” amount for the purposes of section
820-90 or section 820-190 of the 1997 Act (whichever is applicable to AofA for the tax year in which the Dividend would be paid). 

  

	 	(b)	If, but for this clause 3.2(b), clause 3.2(a)(iii) would apply to preclude the payment of any Excess Dividend (whether wholly or in part), the parties will promptly negotiate in
good faith and use reasonable endeavours to procure that clause 3.2(a)(iii) does not so apply, or applies only to the minimum extent possible, including in the case of clause 3.2(a)(iii)(d) by: 

  

	 	(i)	using reasonable endeavours to investigate and undertake mitigating strategies to avoid debts of AofA exceeding the level of its “maximum allowable debt” amount; and

  

	 	(ii)	undertaking promptly at the request of Alumina (and at its sole cost) a valuation of the assets of the AofA Group in accordance with section 820-680 of the 1997 Act for the purposes
of determining the level of AofA’s “maximum allowable debt” amount for the purposes of section 820-90 or section 820-190 (as applicable) of the 1997 Act, in which case, AofA, AAH and Alcoa may not unreasonably refuse or delay their
assistance in such effort and will provide such information in their possession or control as may be reasonably requested for the valuation, 

 provided that, except as provided in subparagraph (ii) above, no party will be under any obligation to incur any cost or make any expenditure of funds in connection with the activities contemplated by this clause
3.2(b). 
  

 Page 11 

	3.3	
Calculation and payment of Dividends 

 The Shareholders will procure that AofA declares and pays
the Dividends required by clause 3.1 in relation to a given Financial Year as follows: 
  

			
	 Timing of Declaration and Payment
	  	 Total Dividend Amount of Dividends

	Within 180 days after the end of the preceding Financial Year	  	Amount equal to the Minimum Dividend Amount for the given Financial Year
	Declaration: By the 20th day of the first month of each
Quarter of the Financial Year	  	Amount of the Quarterly Dividend in relation to the relevant Quarter
		
	Payment: On or before the last Business Day of the first month of each Quarter of the Financial Year	  	

  

	3.4	
Quarterly Dividends 

  

	 	 (a)
	 No later than the 20th day of the first month of each Quarter, Alcoa and Alumina will inform each other and AofA of the receipt and details of all Valid Calls received by them which relate to the Funding Period commencing
during that Quarter. 

  

	 	(b)	Subject to clause 3.2, the Dividend that is the Quarterly Dividend for a Quarter will be equal to the lowest of the following amounts: 

  

									
		  		  		 	(i)	  	 (a)    55% of the sum of Interim Net Income for the most recently completed Quarter plus Interim Net Income of all prior
Quarters (if any) beginning January 1, 2006, less

					
		  		  		 		  	 (b)    the Total Dividend Amount of the Excess Dividends paid during the period beginning January 1, 2006 to the end
of the most recently completed Quarter; and

					
		  		  		 	(ii)	  	the aggregate amount of all Valid Calls made which relate to the Funding Period commencing during that Quarter plus the aggregate amount of all previous Valid Calls made since the Commencement
Date, less the Total Dividend Amount of the Excess Dividends paid with respect to all prior Quarters during the term of this document; and
					
		  		  		 	(iii)	  	the amount of Available Cash on the date of declaration by AofA of the Quarterly Dividend.

  

 Page 12 

	3.5	Franking of Dividends 

 The Shareholders must
procure that AofA ensures that, for Australian income tax purposes: 
  

	 	(a)	all Excess Dividends are fully franked; and 

  

	 	(b)	all Dividends that relate to a Minimum Dividend Amount are franked to the maximum extent possible without incurring “franking deficits tax” (as defined in the 1997 Act),
taking into account franking credits that would reasonably be expected to be generated or received by AofA by the end of the franking year (as defined in the 1997 Act) in which the Dividends would be paid. 

  

	3.6	
Restriction on capitalisation 

 The Shareholders will procure that, except as required by
generally accepted accounting principles, neither AofA nor the AofA Board capitalises, or resolves to capitalise, any of the profits of AofA (whether those profits relate to then current Financial Year or to any preceding Financial Year) without the
prior written consent of all of the Shareholders. 
  

	3.7	
Provision of information 

 AofA must provide (and the Shareholders will procure that AofA
provides) to each Shareholder: 
  

	 	(a)	within 60 days after the end of each Financial Year: 

  

	 	(i)	a schedule detailing AofA’s franking credit account as at the end of the Financial Year and all changes to it during that Financial Year; and 

  

	 	(ii)	a calculation of AofA’s “maximum allowable debt” amount for the purposes of section 820-90 or section 820-190 of the 1997 Act, whichever is applicable to AofA for the
relevant tax year; and 

  

	 	(b)	on the 20th day of the first month of each Quarter, details of the calculation of the amount of the relevant Dividend (if any), including (as relevant) details of the calculation of
the aggregate amount of Valid Calls, Available Cash and Interim Net Income. 

  

	3.8	
Initial Dividends 

  

	 	(a)	Despite clauses 3.1(b), 3.3 and 3.4, the parties agree that: 

  

	 	(i)	Quarterly Dividends will not be required to be declared or paid for the first three Quarters of 2006; 

  

 Page 13 

	 	(ii)	subject to clause 3.2, the Shareholders will procure that AofA declares and pays, on or before the last Business Day of the first month commencing after the date of this document, a
Dividend for which the Total Dividend Amount is equal to the lowest of the following amounts: 

  

	 	(a)	55% of the sum of the Interim Net Income for each of the first two Quarters of the 2006 Financial Year, less the Total Dividend Amount of the Excess Dividends paid prior to the
declaration by AofA of the Dividend; and 

  

	 	(b)	the aggregate amount of all Valid Calls made under clause 4.11(a), less the Total Dividend Amount of the Excess Dividends paid prior to the declaration of the Dividend; and

  

	 	(c)	the amount of Available Cash on the date of declaration by AofA of the Dividend; and 

  

	 	(iii)	subject to clause 3.2, the Shareholders will procure that AofA declares and pays, on 1 December 2006, a Dividend for which the Total Dividend Amount is equal to the lowest of
the following amounts: 

  

	 	(a)	55% of the sum of the Interim Net Income for each of the first three Quarters of the 2006 Financial Year, less the Total Dividend Amount of the Excess Dividends paid (including any
Dividend paid in accordance with clause 3.8(a)(ii)) prior to the declaration by AofA of the Dividend; and 

  

	 	(b)	the aggregate amount of all Valid Calls made under clause 4.11(b); and 

  

	 	(c)	the amount of Available Cash on the date of declaration by AofA of the Dividend; and 

  

	 	(iv)	Dividends paid or required to be paid under this clause 3.8 will be deemed to be Quarterly Dividends for the purposes of the calculation of subsequent Quarterly Dividends under
clause 3.4. 

  

	 	(b)	AofA must provide (and the Shareholders will procure that AofA provides) to each Shareholder, on the Dividend Payment Date for each Dividend paid or required to be paid in
accordance with clause 3.8(a), details of the calculation of the amount of the Dividend (including details of the calculation of the aggregate amount of Valid Calls, Available Cash and Interim Net Income). 

  

	4.	
FUNDING OF ENTERPRISE COMPANIES 

  

	4.1	
Calls by an Enterprise Company 

 Subject to clauses 4.2, 4.6, 4.10(b) and 4.11, Alcoa will from
time to time procure that an Enterprise Company, by notice in writing given by it or on its behalf to Alcoa and Alumina, requests each of Alcoa and Alumina to contribute its Share of the total amount specified in the Call for the purpose of funding
the Enterprise Funding Requirements of that Enterprise Company. 
  

 Page 14 

	4.2	
Requirements for Valid Calls 

 To be valid, a Call made under clause 4.1 must: 
  

	 	(a)	be delivered to Alcoa and Alumina not later than the first Business Day of the month before the commencement of the Funding Period to which it relates; 

  

	 	(b)	specify the Funding Period and the details of the expenditure to which the Call relates; 

  

	 	(c)	represent the Enterprise Funding Requirements of the relevant Enterprise Company for the Funding Period to which the Call relates; and 

  

	 	(d)	be for at least US$1 million. 

  

	4.3	
Time for payment of Valid Calls 

 Subject to clause 4.12, unless Alcoa and Alumina otherwise
agree either generally or in relation to a particular Valid Call, the amount specified in a Valid Call will be due and payable in accordance with this clause 4 to the relevant Enterprise Company by: 
  

	 	(a)	in the case of a Valid Call made under clause 4.11(a), the tenth day of the second month commencing after the date of this document; 

  

	 	(b)	in the case of a Valid Call made under clause 4.11(b), 11 December 2006; and 

  

	 	(c)	otherwise, the tenth day after the beginning of the Funding Period to which the Valid Call relates. 

  

	4.4	
Funding Valid Calls 

 Upon receipt of a Valid Call: 
  

	 	(a)	except as provided in clause 4.12, in the case of a Valid Call by any member of the AofA Group while the Tax Rulings are in effect and neither clause 4.7 nor clause 4.8 would
prevent the making of an Enterprise Loan to AofA: 

  

	 	(i)	the Valid Call will be funded by an Enterprise Loan to AofA in accordance with clause 4.5; and 

  

	 	(ii)	in circumstances where the Valid Call was made by a member of the AofA Group other than AofA, AofA will provide the applicable amount by way of loan, equity contribution or other
funding mechanism agreed between Alcoa and Alumina to the relevant Enterprise Company or, failing agreement prior to the making of the relevant Enterprise Loan to AofA under subparagraph (i) above, as determined by Alcoa; and

  

 Page 15 

	 	(b)	otherwise, Alcoa and Alumina shall use reasonable endeavours to agree the extent to which the Valid Call will be funded by an Enterprise Loan in accordance with clause 4.5 or by
another funding mechanism in accordance with clause 4.10(a). Failing agreement between Alcoa and Alumina by: 

  

	 	(1)	in the case of a Valid Call made under clause 4.11(a), the first day of the second month commencing after the date of this document; 

  

	 	(2)	in the case of a Valid Call made under clause 4.11(b), 1 December 2006; and 

  

	 	(3)	otherwise, the first Business Day of the relevant Funding Period for the Valid Call, 

 the Valid Call (or part of the Valid Call for which agreement has not been reached) will be funded in the manner determined by Alcoa, including by way of an equity contribution to the relevant Enterprise Company, and
each of Alcoa and Alumina will fund (or procure that its relevant respective Affiliates fund) its respective Share of the Valid Call (or part of the Valid Call for which agreement has not been reached) in accordance with clause 4.5 or clause 4.10(a)
(as the case may be), subject to: 
  

	 	(i)	in the case of equity contributions, the requirements of the provisions of the AWAC Documents referred to in clause 12.6(b)(ii) (including, in particular, the approval requirements
for equity requests on behalf of AWAC or the relevant Enterprise Company totalling in any one year more than US$1 billion (as such amount may be modified as provided in clause 12.6(b)(iii)), which approval is not given under this document); and

  

	 	(ii)	in the case of loans between Enterprise Companies (other than loans permitted under clause 4.12), the requirements of the provisions of section 4(v) of the Charter and corresponding
provisions of the other AWAC Documents (it being acknowledged that approval for the purposes of those provisions is not given under this document). 

 To the extent that the Valid Call is funded by loans between Enterprise Companies in accordance with this clause 4.4(b), payment of that Valid Call will be deemed for the purposes of this document to have been made by
Alcoa and Alumina. 
  

 Page 16 

	4.5	
Enterprise Loans 

  

	 	(a)	Subject to clauses 4.6, 4.7 and 4.8, if it is agreed or determined in accordance with clause 4.4 that a Valid Call (or part of a Valid Call) will be funded by an Enterprise Loan,
then each of the Partners must (in accordance with the Partnership Agreement): 

  

	 	(i)	make (and each of Alcoa and Alumina must procure that each of its Affiliates that is a Partner makes) a contribution of capital to the Enterprise Funding Partnership in an amount
equal to: 

  

	 	(a)	in the case of Partners that are Affiliates of Alcoa, collectively Alcoa’s Share of the Contribution Amount; and 

  

	 	(b)	in the case of Partners that are Affiliates of Alumina, collectively Alumina’s Share of the Contribution Amount; and 

  

	 	(ii)	procure (and each of Alcoa and Alumina must procure that each of its Affiliates that is a Partner procures) that the Enterprise Funding Partnership provides an Enterprise Loan to
the Enterprise Company for an amount equal to the Valid Call (or part of the Valid Call) not later than the time specified in clause 4.3. 

  

	 	(b)	Each of Alumina and Alcoa will promptly take (and will procure that each of its Affiliates who are Partners, and each relevant Enterprise Company, promptly takes) all steps within
its power that are necessary to ensure that the terms of the Enterprise Loans are observed by the Enterprise Funding Partnership and each relevant Enterprise Company, strictly in accordance with those terms (including the terms relating to
prepayment of the whole or any part of Enterprise Loans), and that the rights of the Enterprise Funding Partnership, and the obligations of the relevant Enterprise Companies under the Enterprise Loans, are enforced on a timely basis.

  

	4.6	
Tax Rulings 

 The parties agree: 
  

	 	(a)	that, unless the Tax Rulings requested in the Tax Ruling Applications have been issued, no member of the AofA Group will make a Call under this document, but will (until the Tax
Rulings requested in the Tax Ruling Applications have been issued or as otherwise provided in clause 4.11(d)) utilise the Cash Balances and Cash Equivalents (including Cash Flow from Operating Activities) of the AofA Group to fund its Enterprise
Funding Requirements; and 

  

 Page 17 

	 	(b)	to use reasonable endeavours to procure that: 

  

	 	(i)	the Tax Rulings requested in the Tax Ruling Applications are issued by the Commissioner of Taxation as soon as practicable after the date of this document; and

  

	 	(ii)	on or as soon as practicable after the expiration, termination or other cessation of effect of a Tax Ruling, a substitute or replacement Tax Ruling, having an effect which is not
materially less favourable to the relevant recipient than the substituted or replaced Tax Ruling, is granted. 

  

	4.7	
Tax Events and Dissolution of Enterprise Funding Partnership 

 If: 
  

	 	(a)	clause 5.3 applies in respect of a Tax Event which affects the making of new Enterprise Loans to some or all Enterprise Companies or affects some or all outstanding Enterprise
Loans; or 

  

	 	(b)	the Enterprise Funding Partnership is dissolved in accordance with clause 15 of the Partnership Agreement, 

 then the Partners will procure (and Alumina and Alcoa will procure that their respective Affiliates who are Partners procure) that the Enterprise Funding
Partnership will cease to provide any further funding to such Enterprise Companies by way of Enterprise Loan or will take appropriate action relating to any affected Enterprise Loan, but (except to the extent agreed in writing by Alumina and Alcoa)
this document will otherwise continue to apply. 
  

	4.8	
Limits on Enterprise Loans to AofA Group 

  

	 	(a)	The parties agree that, except as otherwise agreed between Alcoa and Alumina: 

  

	 	(i)	the aggregate of the amounts of principal outstanding under all Enterprise Loans made by the Enterprise Funding Partnership to members of the AofA Group must not at any time exceed
US$1 billion; and 

  

	 	(ii)	they will procure that Valid Calls made by members of the AofA Group are not funded by Enterprise Loans to the extent that the limit specified in clause 4.8(a)(i) would be exceeded
as a result. 

  

	 	(b)	The parties agree that, except as otherwise agreed between Alcoa and Alumina, they will procure that Valid Calls made by members of the AofA Group are not funded by Enterprise Loans
to the extent that such funding would result in debts of AofA exceeding the level of its “maximum allowable debt” amount for the purposes of section 820-90 or section 820-190 of the 1997 Act (whichever is applicable to AofA for the tax
year in which indebtedness is being determined). However, if, but for this sentence, this clause 4.8(b) would apply to preclude the making of Enterprise Loans (or the making of Enterprise Loans to a certain extent), the parties will promptly
negotiate in good faith and use reasonable endeavours to procure that this clause 4.8(b) does not so apply, or applies only to restrict the making of Enterprise Loans to the minimum extent possible, including: 

  

 Page 18 

	 	(i)	by using reasonable endeavours to investigate and undertake mitigating strategies to avoid debts of AofA exceeding the level of its “maximum allowable debt” amount; and

  

	 	(ii)	by undertaking promptly at the request of Alumina (and at its sole cost) a valuation of the assets of the AofA Group in accordance with section 820-680 of the 1997 Act for the
purposes of determining the level of AofA’s “maximum allowable debt” amount for the purposes of section 820-90 or section 820-190 (as applicable) of the 1997 Act, in which case, AofA, AAH and Alcoa may not unreasonably refuse or delay
their assistance in such effort and will provide such information in their possession or control as may be reasonably requested for the valuation, 

 provided that, except as provided in subparagraph (ii) above, no party will be under any obligation to incur any cost or make any expenditure of funds in connection with the activities contemplated by this clause
4.8(b). 
  

	4.9	
Failure to pay 

 If either Alcoa or Alumina fails to pay (or procure payment by its Affiliates
of) its Share of the funds requested in a Valid Call when due as required by this clause 4 (including by failing to make payment of a Contribution Amount to the Enterprise Funding Partnership), the parties agree that the consequences of such failure
will be the same as those that apply to a failure to make an equity contribution required by the Charter, as set out in section 8 of the Charter (as such section 8 may be modified as provided in clause 12.6(b)(iii)). 
  

	4.10	
Non-Enterprise Loan funding mechanisms 

  

	 	(a)	If it is agreed or determined in accordance with clause 4.4(b) that a Valid Call (or part of a Valid Call) will be funded by a mechanism other than an Enterprise Loan, then (unless
otherwise agreed between Alcoa and Alumina) each of Alcoa and Alumina must provide (or procure that one or more of its respective Affiliates provide) an amount equal to its Share of the Valid Call (or part of the Valid Call), not later than the time
specified in clause 4.3, by way of the mechanism agreed or determined in accordance with clause 4.4(b). 

  

	 	(b)	Alumina and Alcoa agree that an Enterprise Company may obtain funding in a manner consistent with the AWAC Documents, and not by way of Valid Calls made under this document:

  

	 	(i)	by external debt financing; or 

  

	 	(ii)	in the case of an Enterprise Company other than a member of the AofA Group, from its Cash Balances and Cash Equivalents (including Cash Flow from Operating Activities); or

  

 Page 19 

	 	(iii)	subject to paragraph (c), in the case of a member of the AofA Group, from the Cash Balances and Cash Equivalents (including Cash Flow from Operating Activities) of the AofA Group to
the extent that the actual Enterprise Funding Requirements of the AofA Group member for any Funding Period exceed the amount provided to the AofA Group member by way of funding of Valid Calls relating to the Enterprise Funding Requirements of the
AofA Group member for the relevant Funding Period. 

  

	 	(c)	If a member of the AofA Group funds or reasonably anticipates that it will fund any of its Enterprise Funding Requirements for a Funding Period in accordance with subparagraph
(b)(iii), the parties agree that the relevant AofA Group member will make a Call in accordance with clause 4.1 for an amount equal to the amount of such funding not later than the first Business Day of the month before the commencement of the next
Funding Period. The Call must specify the details of the expenditure to which the Call relates. The parties agree that a Call made in accordance with this clause 4.10(c) will be a Valid Call for the purposes of this document and will be deemed to
relate to the next Funding Period commencing after the Call is made. 

  

	4.11	
Initial Calls 

  

	 	(a)	At least 7 days prior to the end of the first month commencing after the date of this document, Alcoa, as industrial leader of AWAC, will procure that: 

  

	 	(i)	Alcoa World Alumina LLC, an Enterprise Company located in the United States, by notice in writing given by it or on its behalf to Alcoa and Alumina, requests each of Alcoa and
Alumina to contribute its Share of the total amount of all outstanding loans theretofore provided to it by Alcoa, as specified in the Call, to fund the prompt repayment of those loans; and 

  

	 	(ii)	each relevant Enterprise Company (not being a member of the AofA Group), by notice in writing given by it or on its behalf to Alcoa and Alumina, requests each of Alcoa and Alumina
to contribute its Share of the total amount specified in the Call for the purpose of funding the Enterprise Funding Requirements of that Enterprise Company for the Initial Non-AofA Funding Period, other than any Enterprise Funding Requirements in
respect of which any loan referred to in clause 4.11(a)(i), or in paragraph (c) of the definition of Enterprise Funding Requirements, was provided. 

  

	 	(b)	If the Tax Rulings requested in the Tax Ruling Applications have been issued by the Australian Commissioner of Taxation by 30 November 2006, Alcoa will procure that each
relevant member of the AofA Group, by notice in writing given by it or on its behalf to Alcoa and Alumina on 30 November 2006, requests each of Alcoa and Alumina to contribute its Share of the total amount specified in the Call for the purpose
of funding the Enterprise Funding Requirements of that Enterprise Company for the Initial AofA Funding Period. To be valid, the Call must specify the details of the expenditure to which the Call relates and, for expenditure not already incurred,
include a payment schedule. 

  

 Page 20 

	 	(c)	A Call made in accordance with this clause 4.11 will be deemed to be a Valid Call for the purposes of this document. It will (to the extent it relates to a particular Enterprise
Company) satisfy the requirement for that Enterprise Company to make a Call in accordance with clause 4.1 in respect of the relevant Enterprise Funding Requirements. The parties agree that Calls in respect of Enterprise Funding Requirements of each
member of the AofA Group for the Initial AofA Funding Period will be made only in accordance with clause 4.11(b) and not in accordance with clause 4.1. 

  

	 	(d)	If the Tax Rulings requested in the Tax Ruling Applications have not been issued by the Australian Commissioner of Taxation by 30 November 2006, Alcoa and Alumina must use all
reasonable endeavours to agree as soon as practicable after that date the means by which the Enterprise Funding Requirements of members of the AofA Group will be funded for the Initial AofA Funding Period and subsequent Funding Periods. Failing such
agreement by 31 January 2007, those Enterprise Funding Requirements of members of the AofA Group will be funded in accordance with the AWAC Documents. However, if at any time after 30 November 2006 the Tax Rulings requested in the Tax
Ruling Applications are issued by the Australian Commissioner of Taxation, then the Enterprise Funding Requirements of members of the AofA Group for all subsequent Funding Periods will be funded in accordance with the other provisions of this clause
4. 

  

	4.12	
Exclusivity and Prioritization; Related Party Borrowings and Use of Cash Balances and Cash Equivalents 

  

	 	(a)	Except as otherwise provided in clauses 4.6 and 4.10(b) with respect to funding by external borrowings and Cash Balances and Cash Equivalents (including Cash Flow from Operating
Activities), Alcoa will procure that all requests for funding in respect of Enterprise Funding Requirements are made by or on behalf of an Enterprise Company, and those Enterprise Funding Requirements are funded by the relevant Enterprise Company,
in accordance with this clause 4. 

  

	 	(b)	To the extent that the aggregate amount of all Valid Calls made in relation to a Funding Period exceeds the Total Dividend Amount of the Quarterly Dividend paid for the Quarter
during which that Funding Period commences, (i) the relevant Valid Calls (if any) of the Enterprise Company in Jamaica followed by (ii) the relevant Valid Calls (if any) of the Enterprise Companies in Brazil then (iii) the relevant
Valid Calls (if any) of all other non-AofA Group Enterprise Companies will be funded to the extent of the Total Dividend Amount of the relevant Quarterly Dividend before the relevant Valid Calls (if any) of members of the AofA Group are funded.
Without limiting any other mechanism by which such Valid Calls may be funded in accordance with clause 4.4(b), the parties expressly agree that the remainder (if any) of any such Valid Calls: 

  

	 	(i)	of an Enterprise Company other than a member of the AofA Group may be funded by loan from another Enterprise Company (other than a member of the AofA Group) for a term of not more
than 3 years, or by demand loan from AofA, from its Cash Balances and Cash Equivalents (including Cash Flow from Operating Activities); and 

  

 Page 21 

	 	(ii)	of a member of the AofA Group may be funded from the Cash Balances and Cash Equivalents (including Cash Flow from Operating Activities) of the AofA Group, 

in each case as determined by Alcoa in good faith after consultation with Alumina. To the extent that any such Valid Calls are funded in accordance
with paragraph (i) or (ii) above, payment of those Valid Calls will be deemed for the purpose of this document to have been made by Alcoa and Alumina. 
  

	 	(c)	To the extent that: 

  

	 	(i)	the Total Dividend Amount of the Quarterly Dividend paid for a Quarter exceeds the aggregate amount of all Valid Calls made in relation to the Funding Period commencing during that
Quarter; and 

  

	 	(ii)	all (or part) of a previous Valid Call of an Enterprise Company has been funded in accordance with clause 4.12(b)(i) or (ii) and not been refinanced in accordance with this
clause 4.12(c), 

 Alumina and Alcoa will procure that to the extent of the excess referred to in paragraph (i) above:

  

	 	(iii)	an equivalent amount will be provided to the relevant Enterprise Company or Enterprise Companies by way of an Enterprise Loan or other funding mechanism agreed or determined in
accordance with clause 4.4 (on the basis that a reference in clause 4.4 to a “Valid Call” is to that equivalent amount), in the following order of priority (as relevant): first, according to age of the relevant loans; and second, to the
Enterprise Company in Jamaica followed by the Enterprise Companies in Brazil followed by all other non-AofA Group Enterprise Companies followed by AofA; and 

  

	 	(iv)	in so far as an amount is provided to an Enterprise Company under paragraph (iii) above, the relevant loans made to that Enterprise Company under clause 4.12(b)(i) are promptly
repaid (in order of priority of age). 

  

	4.13	
Treatment of loans and Enterprise Loan proceeds 

 The parties agree that: 
  

	 	(a)	any repayment of principal or payment of interest in respect of an Enterprise Loan, or in respect of any loan by one Enterprise Company to another Enterprise Company, will not
constitute or be treated as a dividend or equivalent distribution for any purpose under this document or the AWAC Documents; and 

  

	 	(b)	no Enterprise Loan will be used to repay the principal or interest on any other Enterprise Loan. 

  

 Page 22 

	5.	
OCCURRENCE OF A TAX EVENT 

  

	5.1	
Notice of a Tax Event 

  

	 	(a)	If, as a result of a Tax Event, there is any increase, or reasonably anticipated increase, in the Tax cost (including any reduction in a Tax deduction, or reduction in availability
of a franking credit in the franking accounts of the relevant Shareholder on Excess Dividends, as relevant) to Alcoa or any of its Affiliates (including AAH), Alumina or any of its Affiliates, the Enterprise Funding Partnership, an Enterprise
Company or any other relevant person (as the case may be), then: 

  

	 	(i)	Alumina (in the case of a Tax Event affecting it or an Affiliate, the Enterprise Funding Partnership, or an Enterprise Company (or any other relevant person to the extent agreed by
Alumina and Alcoa for the purposes of this clause 5.1(a)(i))); or 

  

	 	(ii)	Alcoa (in the case of a Tax Event affecting it or an Affiliate (including AAH), the Enterprise Funding Partnership or an Enterprise Company (or any other relevant person to the
extent agreed by Alumina and Alcoa for the purposes of this clause 5.1(a)(ii))), 

 may give notice (initial notice) to
the other as soon as possible but in any event within 20 Business Days of the party becoming aware of the Tax Event. Notwithstanding the foregoing, an initial notice may only be given by Alcoa in the case of a Tax Event relating to a Tax Law Change
Event referred to in paragraph (b)(iii) of the definition of Tax Event where the increase, or reasonably anticipated increase, in Tax cost relates to a period after the occurrence of the Tax Event. 
  

	 	(b)	An initial notice must contain sufficient information to enable the receiving party to assess the nature and impact of the Tax Event on the entity affected by the Tax Event and,
without limitation, must contain reasonable details of the Tax Event, the estimated quantum of the associated Tax cost, reasonable details of any proposal that the party providing the initial notice may have to avoid or minimise the impact of the
Tax Event on the entity affected by the Tax Event and whether the notifying party, due to the occurrence of the Tax Event, elects to suspend the operation of any existing Enterprise Loan or other affected funding arrangement made under this document
and/or the making of any new Enterprise Loan and/or the payment of any Excess Dividend in accordance with clause 5.3(a). 

  

 Page 23 

	5.2	
Mitigating the effect of the Tax Event 

  

	 	(a)	Within 15 Business Days of the date of the initial notice, the party receiving the initial notice: 

  

	 	(i)	must advise (in writing) the party giving the notice whether the receiving party agrees to any proposal provided in the initial notice and the terms and conditions of its agreement;
and 

  

	 	(ii)	may present (in writing) to the party giving the initial notice any alternative proposal that the receiving party may have to avoid or minimise the impact of the Tax Event on the
entity affected by the Tax Event, which may include a proposal to compensate the entity affected by the Tax Event on a “make whole” basis (as assessed post tax). 

  

	 	(b)	Within 10 Business Days of receipt of an alternative proposal under clause 5.2(a)(ii), the other party must advise (in writing) the party presenting the alternative proposal whether
the other party agrees to the alternative proposal and the terms and conditions of its agreement. In circumstances where the alternative proposal is compensation of the entity affected by the Tax Event on a “make whole” basis (as assessed
post tax), the other party may not unreasonably withhold its agreement to the alternative proposal. 

  

	5.3	
Consequences of a Tax Event 

  

	 	(a)	A notifying party may indicate in its initial notice that the Tax Event has an effect described in clause 5.3(b)(i), (ii) or (iii) below and, on providing written
confirmation from its external taxation adviser that a Tax Event has occurred having the effect described in clause 5.3(b)(i), (ii) or (iii), may elect to suspend for a period of up to 20 Business Days actions required to be undertaken during
such period in respect of one or more affected outstanding Enterprise Loans or other affected funding arrangements, the payment of Excess Dividends and/or the making of any new Enterprise Loan, as relevant to the nature and effect of the Tax Event.
Immediately upon the receipt of such an initial notice, despite any other provision in this document, Alumina or Alcoa (as the case may be) will procure that their respective Affiliates who are Partners will procure that the Enterprise Funding
Partnership will take appropriate action in relation to such affected outstanding Enterprise Loans and/or cease to provide any further funding to the relevant Enterprise Companies by way of Enterprise Loan and/or Alumina and Alcoa will take other
appropriate action with respect to such other affected funding arrangements or Excess Dividends, as agreed by Alcoa and Alumina for the duration of the period of suspension. 

  

	 	(b)	If within 25 Business Days of the date of the initial notice, Alumina and Alcoa have been unable to reach an agreement as contemplated by clause 5.2 or if no written response to the
initial notice was given by the receiving party under clause 5.2, then: 

  

	 	(i)	 if the relevant Tax Event affects the making of new Enterprise Loans to some or all Enterprise Companies, the Partners will procure (and Alumina 

  

 Page 24 

	 	 
and Alcoa will procure that their respective Affiliates who are Partners will procure) that the Enterprise Funding Partnership will cease to provide any
further funding to the relevant Enterprise Companies by way of Enterprise Loan but except as otherwise agreed in writing by Alumina and Alcoa, this document will otherwise continue to apply; 

  

	 	(ii)	if the relevant Tax Event affects some or all outstanding Enterprise Loans, Alumina and Alcoa will co-operate with each other to procure the unwinding of, or other appropriate
action in relation to, such affected outstanding Enterprise Loans made to the relevant Enterprise Company (as well as any loans to any other Enterprise Company out of the proceeds of Enterprise Loans, but (except to the extent agreed in writing by
Alumina and Alcoa) this document will otherwise continue to apply; and 

  

	 	(iii)	if the relevant Tax Event affects or relates to any other arrangements entered into for the purpose of funding a Valid Call in accordance with clause 4, or any other matter, Alumina
and Alcoa will promptly negotiate in good faith and use reasonable endeavours to promptly investigate and undertake mitigating strategies to avoid or minimise the impact of the Tax Event on the entity affected by the Tax Event (including the
unwinding of the arrangements affected), or to agree any amendments to this document that may be necessary or desirable as a consequence of the occurrence of the Tax Event. 

  

	5.4	
Parties to act diligently 

 Each of Alumina and Alcoa: 
  

	 	(a)	agrees that it will exercise reasonable diligence in relation to its own affairs, and will procure that its Affiliates who are Partners, Shareholders or other relevant persons, and
the Enterprise Companies, exercise reasonable diligence in relation to their respective affairs, to identify the likely occurrence of an event or circumstance referred to in the definition of Tax Event at the earliest point in time; and

  

	 	(b)	acknowledges that it is not its intention to seek to terminate the Enterprise Loan or other funding arrangements or unwind any Enterprise Loans or other funding arrangements under
this clause 5 on the basis of immaterial increases in Tax cost to it, any of its Affiliates, the Enterprise Funding Partnership or any Enterprise Company. 

  

 Page 25 

	5.5	
Negotiation 

 If there is a disagreement whether a Tax Event has occurred, within 5 Business
Days of Alumina or Alcoa notifying the other in writing of the disagreement, a senior representative of each of Alumina and Alcoa must meet and use all reasonable endeavours acting in good faith to resolve the disagreement within 5 additional
Business Days. 
  

	6.	
RESOLUTION OF DISPUTES 

 All disputes and differences between Alcoa or any of its Affiliates,
on the one hand, and Alumina or any of its Affiliates, on the other hand, arising out of or in connection with this document will be resolved in accordance with the dispute resolution procedures set out in section 11 of the Charter and the
corresponding provisions of the other AWAC Documents. Notwithstanding any other provision of this document, the courts sitting in the State of Delaware will have exclusive jurisdiction over the parties with respect to the resolution of any disputes
involving judicial proceedings arising out of or in connection with this document. 
  

	7.	
TERMINATION 

  

	7.1	
Termination events 

 Unless otherwise agreed in writing by Alcoa and Alumina, this document
will terminate: 
  

	 	(a)	on 31 December 2010; or 

  

	 	(b)	if Alcoa, Alumina, AAH, the Enterprise Funding Partnership or AofA (a Defaulting Party) commits a material breach of this document and, if the breach is capable of remedy,
fails to remedy the breach within 7 Business Days after being required in writing by any other of those parties to do so, upon: 

  

	 	(i)	where the Defaulting Party is Alumina – Alcoa or AAH; and 

  

	 	(ii)	where the Defaulting Party is Alcoa, AAH, AofA or the Enterprise Funding Partnership – Alumina, 

 giving 5 Business Days’ notice to all of the other parties of termination of this document; or 
  

	 	(c)	if an Insolvency Event occurs in relation to Alcoa or Alumina, AAH or AofA (Insolvent Party) and, if the Insolvency Event is capable of cure, it is not cured within 7
Business Days after that is required in writing by any other of those parties by notice to the Insolvent Party, upon: 

  

	 	(i)	where the Insolvent Party is Alumina – Alcoa or AAH; and 

  

	 	(ii)	where the Insolvent Party is Alcoa, AAH or AofA – Alumina, 

 giving 5 Business Days’ notice to all of the other parties of termination of this document. 
  

 Page 26 

	7.2	
Consequences of termination 

  

	 	(a)	Termination of this document does not affect any accrued rights or remedies of any party. 

  

	 	(b)	On termination of this document any outstanding Enterprise Loans will not be terminated but will continue in accordance with their terms until repaid or otherwise terminated.

  

	 	(c)	Clauses 5 and 6 will survive termination of this document to the extent that the provisions of those clauses relate to any outstanding Enterprise Loans or other funding arrangements
continuing beyond termination of this document. 

  

	7.3	
Review after 12 months 

 Promptly after the expiry of 12 months after the date of this
document, Alcoa and Alumina must meet to review the operation of this document and discuss whether any amendments should be made to this document to ensure that its provisions (including those relating to the payment of Dividends by AofA and the
funding of Enterprise Companies) operate in a manner that reflects the intentions of the parties immediately prior to the date of this document. One of the subjects that the parties may choose to discuss during this review is whether to increase the
limit on Enterprise Loans set forth in clause 4.8(a)(i). 
  

	7.4	
Extension 

 It is the intent of the parties (in particular Alcoa and Alumina) that their
agreement, as reflected in this document, to cause the payment by AofA of Excess Dividends will, to the extent possible, continue to operate for successive five year periods after 31 December 2010. However, this clause 7.4 is without prejudice
to the parties’ rights of termination under clause 7.1, and nothing in this document will prevent any party from withholding its consent to such operation or from indicating a contrary intent in the future. 
  

	8.	
REPRESENTATIONS AND WARRANTIES 

  

	8.1	
Representations and warranties by each party 

 Each party represents and warrants to the others
that at the date of this document: 
  

	 	(a)	(formation) it is duly incorporated under the laws of the place of its incorporation or, in the case of the Enterprise Funding Partnership, it is duly constituted under the
Partnership Agreement; 

  

	 	(b)	(power and authority) it has the power and authority to sign this document and perform and observe all its terms; 

  

	 	(c)	(document enforceable) this document has been duly executed and is a legal, valid and binding agreement enforceable against it in accordance with its terms;

  

 Page 27 

	 	(d)	(transactions permitted) the execution and performance by it of this document and transaction contemplated under it did not and will not violate in any respect a provision
of: 

  

	 	(i)	a law or treaty or a judgment, ruling, order or decree of a government or a governmental, semi-governmental or judicial entity or authority that is binding on it;

  

	 	(ii)	its constitution or other constituent documents or, in the case of the Enterprise Funding Partnership, the Partnership Agreement; or 

  

	 	(iii)	any other document or agreement which is binding on it or its assets; and 

  

	 	(e)	(insolvency) none of the circumstances described in the definition of Insolvency Event applies to it or is threatened in relation to it. 

  

	8.2	
Reliance on representations and warranties 

 Each party acknowledges that the other parties
have entered into this document in reliance on the representations and warranties in this clause 8. 
  

	9.	
GST 

  

	9.1	
GST to be added to amount payable 

 If GST is payable on a Taxable Supply made under, by
reference to or in connection with this document, the party providing the Consideration for that Taxable Supply must also pay the GST Amount as additional Consideration. This clause 9 does not apply to the extent that the Consideration for the
Taxable Supply is expressly agreed to be GST inclusive. No payment of the GST Amount is required until the supplier has provided a Tax Invoice or Adjustment Note (as the case may be) to the recipient. 
  

	9.2	
Liability net of GST 

 Any reference in the calculation of Consideration or of any indemnity,
reimbursement or similar amount to a cost, expense or other liability incurred by a party, must exclude the amount of any Input Tax Credit entitlement of that party in relation to the relevant cost, expense or other liability. 
  

	9.3	
GST obligations to survive termination 

 This clause 9 will continue to apply after expiration
or termination of this document. 
  

	9.4	
Definitions 

 In this clause 9: 
 Adjustment Note, Consideration, GST, Input Tax Credit, Tax Invoice and Taxable Supply have the meanings given by
the GST Law. 
  

 Page 28 

 GST Amount means, in relation to a Taxable Supply, the amount of GST payable in respect of that
Taxable Supply. 
 GST Law has the meaning given by the A New Tax System (Goods and Services Tax) Act 1999 (Cth) or, if that Act
does not exist, any Act imposing or relating to the imposition or administration of a goods and services tax in Australia and any regulation made under that Act. 
  

	10.	
NOTICES 

  

	 	(a)	A notice, consent or other communication under this document is only effective if it is in writing, signed and either left at the addressee’s address or sent to the addressee
by mail or fax. If it is sent by mail, it is taken to have been received 3 Business Days after it is posted (if posted to an address in the same country) or 7 Business Days after the date of posting by air mail (if posted to an address in another
country). If it is sent by fax, it is taken to have been received on receipt by the sender of a transmission control report from the despatching machine showing the relevant number of pages and the correct destination fax machine number and
indicating that the transmission has been made without error. However, if the result of the foregoing is that a notice, consent or other communication would be taken to be given or made on a day which is not a business day in the place to which it
is sent or is later than 4.00 pm (local time) it will be taken to have been duly given or made at the commencement of business on the next business day in that place. 

  

	 	(b)	A person’s address and fax number are those set out below, or as the person notifies the sender in writing: 

  

			
	Alcoa	  	 
	Address:	  	 390 Park Avenue
 New York, New York 10022

United States of America

	Fax number:	  	+ 1 212 836 2802
	Attention:	  	 Group CFO
 Global Primary
Products

		
	Alumina	  	
	Address:	  	 Level 12, IBM Centre, 60 City Road
 Southbank,
Victoria, 3006
 Australia

	Fax number:	  	+ 61 3 8699 2699
	Attention:	  	General Counsel/Company Secretary
		
	AAH, AofA and Enterprise Funding Partnership	  	
	Address:	  	 Corner Davy and Marmion Streets
 Booragoon, Western
Australia, 6953
 Australia

	Fax number:	  	+ 61 8 9316 5343
	Attention:	  	Company Secretary

  

 Page 29 

	11.	
ASSIGNMENT AND ADDITION 

  

	11.1	
No assignment 

 Subject to clauses 11.2 and 11.3, a party may only assign, dispose of,
encumber, declare a trust over or otherwise create an interest in or deal with any of its rights or obligations under this document, or attempt or purport to do so, with the prior consent of each other party. 
  

	11.2	
Addition of new Shareholder 

 If a Shareholder (in accordance with the Shareholders’
Agreement) seeks to sell, assign or transfer some or all of its shares in AofA (or any interest in such shares) it must (without needing the consent of any other party) also, contemporaneously with that sale, assignment or transfer, procure that the
transferee enters into a document in a form reasonably satisfactory to the other Shareholders under which the Shareholder assigns absolutely to the transferee its rights as a Shareholder under this document, and the transferee assumes absolutely the
obligations of the Shareholder as a Shareholder under this document, to the same relative extent as the sale, assignment or transfer of the Shareholder’s shares in AofA (or any interest in such shares), such that the transferee is deemed to be
a party to this document in lieu of the Shareholder to that extent. 
  

	11.3	
Addition of new Partner 

 If a Partner (in accordance with the Partnership Agreement) seeks to
sell, assign or transfer some or all of its interest in the Partnership it must (without needing the consent of any other party) also, contemporaneously with that sale, assignment or transfer, procure that the transferee enters into a document in a
form reasonably satisfactory to the other Partners under which the Partner assigns absolutely to the transferee its rights as a Partner under this document, and the transferee assumes absolutely the obligations of the Partner as a Partner under this
document, to the same relative extent as the sale, assignment or transfer of the Partner’s interest in the Partnership, such that the transferee is deemed to be a party to this document in lieu of the Partner to that extent. 
  

	11.4	
Control of Partners and Shareholders 

  

	 	(a)	Alcoa must procure that, at all times during the term of this document, AAH and its permitted successors and assigns as Shareholder or Partner: 

  

	 	(i)	have the same ultimate holding company (within the meaning of section 9 of the Corporations Act); or 

  

	 	(ii)	where either the relevant Shareholder or the relevant Partner (but not both) does not have an ultimate holding company, the ultimate holding company of the other is that person; or

  

	 	(iii)	where both the relevant Shareholder and the relevant Partner do not have an ultimate holding company, the Shareholder and the Partner are the same person. 

 

 Page 30 

	 	(b)	Alumina must procure that, at all times during the term of this document, its permitted successors and assigns as Shareholder or Partner: 

  

	 	(i)	have the same ultimate holding company (within the meaning of section 9 of the Corporations Act); or 

  

	 	(ii)	where either the relevant Shareholder or the relevant Partner (but not both) does not have an ultimate holding company, the ultimate holding company of the other is that person; or

  

	 	(iii)	where both the relevant Shareholder and the relevant Partner do not have an ultimate holding company, the Shareholder and the Partner are the same person. 

 

	12.	
GENERAL 

  

	12.1	
Governing law 

 Except to the extent that the law in force in the State of Delaware (USA) will
govern the interpretation and operation of the dispute resolution procedures referred to in clause 6 (but not the substantive issues the subject of the relevant dispute or difference), this document is governed by the law in force in Victoria,
Australia. 
  

	12.2	
Amendment 

 This document can only be amended, supplemented, replaced or novated by another
document signed by the parties. 
  

	12.3	
Liability for expenses 

 Each party must pay its own expenses incurred in negotiating,
executing, stamping and registering this document. 
  

	12.4	
Giving effect to this document 

 Each party must do anything (including execute any document),
and must ensure that its employees and agents do anything (including execute any document), that the other party may reasonably require to give full effect to this document. 
  

	12.5	
Waiver of rights 

 A right may only be waived in writing, signed by the party giving the
waiver, and: 
  

	 	(a)	no other conduct of a party (including a failure to exercise, or delay in exercising, the right) operates as a waiver of the right or otherwise prevents the exercise of the right;

  

	 	(b)	a waiver of a right on one or more occasions does not operate as a waiver of that right if it arises again; and 

  

 Page 31 

	 	(c)	the exercise of a right does not prevent any further exercise of that right or of any other right. 

  

	12.6	
Operation of this document 

  

	 	(a)	This document, the AWAC Documents, the Partnership Agreement and the AWAC cash management proposal agreed between Alumina and Alcoa on or about September 2002 contain the entire
agreement between the parties about the subject matter of this document. Any previous understanding, agreement, representation or warranty relating to that subject matter (other than the AWAC Documents, the Partnership Agreement and the AWAC cash
management proposal) is replaced by this document and has no further effect. 

  

	 	(b)	Alcoa, Alumina and AAH acknowledge and agree (and will procure to the extent necessary that their respective Affiliates acknowledge and agree) that, except to the extent expressly
provided in this document, this document is without prejudice to, and does not exclude or limit or constitute a waiver or modification of, any right, power, obligation or remedy provided by any AWAC Document. Without limitation, Alcoa, Alumina and
AAH acknowledge and agree the following: 

  

	 	(i)	This document is without prejudice to, and does not exclude or limit or constitute a waiver or modification of, section 10 of the Charter, or any of the corresponding provisions of
the other AWAC Documents, including in particular the obligation to endeavour to distribute dividends above 30% of the net income of AWAC or the relevant Enterprise Company (as applicable). 

  

	 	(ii)	Subject to sub-paragraph (iii), this document is without prejudice to, and does not exclude or limit or constitute a waiver or modification of, section 4 or 8 of the Charter, or any
of the corresponding provisions of the other AWAC Documents, including in particular the approval requirements for equity requests on behalf of AWAC or the relevant Enterprise Company totalling in any one year more than US$1 billion, and the funding
obligations of Alcoa in respect of certain equity requests made to Alumina or any of its Affiliates, as set forth in section 8(a)(ii) of the Charter. 

  

	 	(iii)	Section 8 of the Charter and any of the corresponding provisions of the other AWAC Documents are modified during the term of this document as follows: 

 

	 	(a)	the requirement to give 60 days’ notice of equity calls under section 8(a) of the Charter will not apply in relation to the funding of Valid Calls; and

  

	 	(b)	the US dollar amounts “$500 million” referred to in section 8(a)(i) and (ii) of the Charter and “$1 billion” in section 8(a)(ii) and (iii) of the
Charter will each be increased by the amount of Quarterly Dividends paid in the relevant Financial Year with respect to Valid Calls that are funded by equity contributions (or if funded only in part by equity contributions, to the extent of such
equity funding) in accordance with clause 4.4(b). 

  

 Page 32 

	 	(iv)	The provision of Enterprise Loans by the Enterprise Funding Partnership to Enterprise Companies and loans between Enterprise Companies as contemplated in clause 4.12(b) have been
expressly agreed to by Alcoa and Alumina for the purposes of section 4(v) of the Charter, and any of the corresponding provisions of the other AWAC Documents. 

  

	 	(v)	Enterprise Loans, and loans by one Enterprise Company to another Enterprise Company, will not be taken into account for the purpose of determining compliance with the 30% leverage
requirements of section 9 of the Charter, and any of the corresponding provisions of the other AWAC Documents. 

  

	 	(c)	Subject to clause 12.6(b), if there is any inconsistency between the provisions of this document and a provision of any of the AWAC Documents, the provisions of this document during
its term will prevail to the extent of the inconsistency and the provisions of the relevant AWAC Document will be construed accordingly. 

  

	 	(d)	Any right that a person may have under this document is in addition to, and does not replace or limit, any other right that the person may have. 

  

	 	(e)	Any provision of this document which is unenforceable or partly unenforceable is, where possible, to be severed to the extent necessary to make this document enforceable, unless
this would materially change the intended effect of this document. 

  

	12.7	
Costs and stamp duty 

 Each party must bear its own costs arising out of the negotiation,
preparation and execution of this document. All stamp duty (including fines, penalties and interest) payable on or in connection with this document and any instrument executed under or any transaction evidenced by this document must be borne by
Alumina and Alcoa in proportion to their respective Shares. 
  

	12.8	
Counterparts 

 This document may be executed in counterparts. 
  

	12.9	
Attorneys 

 Each person who executes this document on behalf of a party under a power of
attorney declares that he or she is not aware of any fact or circumstance that might affect his or her authority to do so under that power of attorney. 
  

 Page 33 

 
SCHEDULE 1 
 
TERMS OF ENTERPRISE LOANS 
  

			
	Borrower:	  	Relevant Enterprise Company.
		
	Lender:	  	Enterprise Funding Partnership.
		
	Type of Loan:	  	Unsecured revolving multicurrency facility. Drawings are available in dollars or US dollars.
		
	Enterprise Loan Limit:	  	One billion US dollars (US$1,000,000,000) (or its equivalent in dollars).
		
	Financial Close:	  	The date on which all the conditions precedent to first drawdown under the Enterprise Loan Agreement are satisfied.
		
	Availability Period:	  	The Loan will be available for drawdown during the period commencing on Financial Close and ending on:
		
		  	 (a)    30 June 2011 (or, if that day is not a Business Day, on the Business Day immediately preceding that day);
or

		
		  	 (b)    such later date as the parties may agree.

		
	Repayment Term:	  	The period commencing on Financial Close and ending 15 June 2016 (or, if that day is not a Business Day, on the Business Day immediately preceding that day).
		
	Purpose of Enterprise
Loan:	  	To fund the Enterprise Funding Requirements of the Borrower or another Enterprise Company in accordance with this document (being the Enterprise Funding Agreement).
		
	Interest Rate:	  	BBSY ($ drawings) or LIBOR (US$ drawings), plus the Margin calculated on the daily drawn amount on the basis of a 360 day year and actual number of days elapsed.
		
		  	Interest will be calculated daily and will be payable semi-annually on 30 June and 31 December of each year, to the extent of available cash of the Borrower on the date of payment, and
otherwise will be capitalised.
		
	Margin:	  	0.4% per annum (where the Borrower is AofA) and otherwise an arm’s length rate per annum determined reasonably by the Lender by reference to the credit risk of the Borrower (including
country risk having regard to sovereign debt margins). The Lender may increase the Margin if a Credit Review Event occurs.
		
	Default Rate:	  	2.00% per annum plus the applicable Interest Rate.

  

 Page 34 

			
	Drawdown Amounts:	 	The Loan may be drawn in amounts of not less than US$1 million or its equivalent in dollars (as applicable) and in integral multiples of US$1 million or its equivalent in dollars (as
applicable).
		
	Establishment Fee:	 	US$50,000. This fee is payable on first drawdown of the Loan by the Borrower.
		
	Repayment:	 	 (a)    Each drawing will be repayable over the remaining Repayment Term. Subject to paragraph (b), a pro rata payment in
respect of each such drawing (each a Scheduled Payment) will be due on 31 January of each year and on the Final Repayment Date (each a Repayment Date).

		
		 	 (b)    If on any Repayment Date (other than the Final Repayment Date) the total amount of Scheduled Payments for that
Repayment Date exceeds 100% of the Borrower’s available cash on that Repayment Date, the Borrower will only be required to pay the Scheduled Payments to the extent of its available cash on that Repayment Date.

		
		 	 (c)    Scheduled Payments will be adjusted from time to time to reflect capitalised interest and the unpaid amount of any
previous Scheduled Payment.

		
		 	 (d)    Any amount outstanding on the Final Repayment Date must be repaid on that date.

		
	Voluntary Prepayment:	 	On any Repayment Date, with not less than 10 days’ prior written notice to the Lender, the Borrower may prepay:
		
		 	 (a)    an amount equal to the principal of the Scheduled Payment due on the last Repayment Date for the Enterprise Loan;
plus

		
		 	 (b)    25% of the outstanding balance of the Enterprise Loan as at the end of the Financial Year immediately preceding the
Repayment Date, provided that, where the Borrower is AofA only, it has distributed (or will have distributed by the Repayment Date) as Dividends in accordance with this document (being the Enterprise Funding Agreement) the Minimum Dividend Amount
payable during each Financial Year ending before the Repayment Date, plus Excess Dividends in aggregate equal to the lesser of:

		
		 	 (i)     55% of the cumulative Interim Net Income of AofA for the period from the Commencement Date to the end of the
Financial Year immediately preceding the Repayment Date; and

  

 Page 35 

			
		  	 (ii)    the aggregate amount of all Valid Calls made in accordance with this document (being the Enterprise Funding
Agreement) since the Commencement Date.

		
		  	The Enterprise Loan may not otherwise be prepaid in whole or in part at any time, except with the prior written consent of the Lender.
		
	Currency Fluctuation:	  	If, at any time, the US$ equivalent (as determined in good faith by the Lender by reference to prevailing exchange rates) of all outstanding drawings exceeds the Enterprise Loan Limit by more
than 5%, the Borrower shall reduce the drawings immediately so that the US$ equivalent does not exceed the Enterprise Loan Limit.
		
	Redraw:	  	Amounts repaid or prepaid can be redrawn.
		
	Cancellations:	  	If the Borrower wishes to cancel any undrawn commitment it shall be for a minimum of US$1 million and whole multiples of US$1 million. Any cancelled amounts may not be redrawn.
		
	Credit Review Event:	  	If a Credit Review Event occurs, the Lender may increase the Margin.
		
	Conditions Precedent to First Drawdown:	  	Standard conditions precedent, including the following.
		
		  	 (a)    Counterparts of the Enterprise Loan Agreement, duly executed by the parties.

		
		  	 (b)    A certified copy of:

		
		  	 (i)     the board resolutions of the Borrower authorising execution and performance of the Enterprise Loan Agreement
and the appointment of authorised officers;

		
		  	 (ii)    an executed power of attorney, duly stamped and registered (if required); and

		
		  	 (iii)  specimen signatures of all authorised officers.

		
		  	 (c)    The representations and warranties are true.

		
	Conditions Precedent to All Drawdowns:	  	Receipt by the Lender of a valid drawdown notice.
		
	Representations and Warranties:	  	Standard representations and warranties, including the following.
		
		  	 (a)    (Status) The Borrower is validly existing under the laws of its place of formation.

  

 Page 36 

			
		  	 (b)    (Corporate power and authorisation) The Borrower has the power to enter into and perform the Enterprise
Loan Agreement and has taken all necessary corporate and other action with respect to the Enterprise Loan Agreement.

		
		  	 (c)    (Document binding) The Enterprise Loan Agreement is the Borrower’s valid, binding and enforceable
obligation.

		
		  	 (d)    (Authorisations) All governmental authorisations have been obtained and are in full force and
effect.

		
	Undertakings:	  	Standard general undertakings, including the following.
		
		  	 (a)    (Negative pledge) Borrower not to create or allow to exist a security interest over its assets
except:

		
		  	 (i)     a lien arising by operation of law in the ordinary course of day to day trading and not securing financial
indebtedness where the Borrower duly pays the indebtedness secured by that lien other than indebtedness contested in good faith; and

		
		  	 (ii)    as agreed with the Lender.

		
		  	 (b)    (Corporate existence) Borrower to maintain its corporate existence in good standing.

		
	Events of Default:	  	Enterprise Loan Agreement to contain usual events of default, including the following.
		
		  	 (a)    (Obligations under Enterprise Loan Agreement) The Borrower fails:

		
		  	 (i)     to pay an amount payable by it under the Enterprise Loan Agreement when due (subject to a five Business Day
grace period); or

		
		  	 (ii)    to comply with any of its other obligations under the Enterprise Loan Agreement and if, in the reasonable opinion
of the Lender, that failure is capable of remedy within 28 days of receipt of a notice from the Lender, the Borrower does not remedy the failure within that period.

		
		  	 (b)    (Misrepresentation) Any representation or warranty in the Enterprise Loan Agreement is incorrect or
misleading in any material respect.

  

 Page 37 

			
	 	  	(c)    (Winding up, arrangements, insolvency etc) The Borrower is wound up, has an administrator
appointed to it, or some other form of insolvency proceeding occurs
or is applied for with respect to
it.
		
		  	 (d)    (Vitiation of Enterprise Loan Agreement)

		
		  	 (i)     All or any material part of the Enterprise Loan Agreement is terminated or is or becomes void, illegal,
invalid, unenforceable or of limited force and effect; or

		
		  	 (ii)    a party becomes entitled to terminate, rescind or avoid all or part of the Enterprise Loan
Agreement.

		
	Tax Event:	  	If, as a consequence of a Tax Event, clause 5.3 of this document (being the Enterprise Funding Agreement) applies to the Enterprise Loan:
		
		  	 (a)    Scheduled Payments may be adjusted unilaterally by the Lender; and/or

		
		  	 (b)    the Lender may terminate, or take other unilateral action in relation to, the Enterprise Loan
Agreement.

		
	Taxes:	  	If a law requires the Borrower to withhold or deduct any taxes from payment so the Lender would not actually receive the full amount provided for under the Enterprise Loan Agreement, the
Borrower and the Lender will negotiate in good faith as to whether the amount payable by the Borrower to the Lender should be increased on account of those deductions.
		
	Goods and Services Tax:	  	The Borrower will reimburse the Lender for any goods and services tax payable by the Lender in relation to taxable supplies made by the Lender to the Borrower.
		
	Legal and Other Costs and Expenses:	  	The Borrower will pay and/or reimburse the Lender on demand for all charges and expenses which the Lender may incur or become liable to pay in connection with the preparation, execution,
implementation or enforcement of the Enterprise Loan Agreement, including any stamp duty, debits tax, any other tax, duty or legal fees (on a full indemnity basis) and out-of-pocket expenses.
		
	Assignment:	  	Neither party may assign or transfer any of its rights or obligations under the Enterprise Loan Agreement.
		
	Governing Law:	  	Victoria, with submission to the non-exclusive jurisdiction of the Courts of Victoria.

  

 Page 38 

 Definitions 
 In this
Schedule 1, unless the context otherwise requires: 
  

	(a)	terms which are defined in clause 1.1 of this document (being the Enterprise Funding Agreement) apply; and 

  

	(b)	the following definitions apply: 

 BBSY, for a
period, means the arithmetic mean of the bid rates shown on the Reuters screen BBSY paid for $ bank accepted bills of exchange for a term equivalent to six months. 
 Credit Review Event means a material adverse change to the ability of the Borrower to service its debts. 
 Final Repayment Date means the last day of the Repayment Term. 
 Financial Year means the period from the date of
first drawdown to 31 December 2006 and then each succeeding period from 1 January to the next 31 December. 
 LIBOR, for a
period, means the arithmetic mean of the rates shown on the Reuters screen LIBO paid for US dollars for a term equivalent to six months. 
  

 Page 39 

 EXECUTED in counterpart as of the date first above written. 
  

					
	EXECUTED by Alcoa Inc:	 		 	
			
	 /s/ Bernt Reitan
	 		 	 /s/ Colette Martin

	Signature of authorized representative	 		 	Witness
			
	 Bernt Reitan
	 		 	 Colette Martin

	Name	 		 	Name
			
	EXECUTED by Alumina Limited:	 		 	
			
	 /s/ John Marlay
	 		 	 /s/ Stephen Foster

	Signature of director	 		 	Signature of secretary
			
	 John Marlay
	 		 	 Stephen Foster

	Name	 		 	Name
			
	EXECUTED by Alcoa Australian Holdings Pty Ltd:	 		 	
			
	 /s/ Wayne Geoffrey Osborn
	 		 	 /s/ Anthony T. Adams

	Signature of director	 		 	Signature of director
			
	 Wayne Geoffrey Osborn
	 		 	 Anthony T. Adams

	Name	 		 	Name

 EXECUTED by Alcoa of Australia 
 Limited: 

					
			
	 /s/ Wayne Geoffrey Osborn
	 		 	 /s/ Anthony T. Adams

	Signature of director	 		 	Signature of director
			
	 Wayne Geoffrey Osborn
	 		 	 Anthony T. Adams

	Name	 		 	Name
			
	 EXECUTED by the Enterprise Funding
 Partnership by its partners:
	 		 	
			
	Alcoa Australian Holdings Pty Ltd:	 		 	
			
	 /s/ Wayne Geoffrey Osborn
	 		 	 /s/ Anthony T. Adams

	Signature of director	 		 	Signature of director
			
	 Wayne Geoffrey Osborn
	 		 	 Anthony T. Adams

	Name	 		 	Name
			
	Alumina Limited:	 		 	
			
	 /s/ John Marlay
	 		 	 /s/ Stephen Foster

	Signature of director	 		 	Signature of secretary
			
	 John Marlay
	 		 	 Stephen Foster

	Name	 		 	Name

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00117-of-00352.parquet"}]]