Document:

exv10wk

 

ELECTRICITY SUPPLY AGREEMENT

DATED 28 OCTOBER 2004

ENERCAL

and

GORO NICKEL

(acting through and on behalf of its New Caledonian branch)

 

 

CONTENTS

	 	 	 	 	 	 	 
	Clause	 	 	 	Page	 
	 
	 	 	 	 	 	 
	1.
	 	Definitions and Interpretations	 	 	1	 
	2.
	 	[not used]	 	 	14	 
	3.
	 	Duration and Term	 	 	14	 
	4.
	 	Funnel Mechanism	 	 	15	 
	5.
	 	Sale and Purchase of Capacity and Electricity	 	 	18	 
	6.
	 	Extra Electricity	 	 	18	 
	7.
	 	Electricity Before the Start Date	 	 	19	 
	8.
	 	Payments	 	 	19	 
	9.
	 	Adjustments	 	 	19	 
	10.
	 	Billing and Payment	 	 	21	 
	11.
	 	TSS and other Taxes	 	 	22	 
	12.
	 	Metering	 	 	23	 
	13.
	 	Additional rights and obligations of the parties	 	 	25	 
	14.
	 	Changes in Law	 	 	29	 
	15.
	 	ESA Coordinating Committee	 	 	33	 
	16.
	 	Force Majeure	 	 	34	 
	17.
	 	Termination	 	 	37	 
	18.
	 	Confidentiality	 	 	43	 
	19.
	 	Representations and Warranties	 	 	44	 
	20.
	 	Permits and Other Approvals	 	 	45	 
	21.
	 	Assignment	 	 	46	 
	22.
	 	Liabilities	 	 	46	 
	23.
	 	Insurance	 	 	47	 
	24.
	 	Indemnification	 	 	48	 
	25.
	 	Waiver	 	 	49	 
	26.
	 	Variation	 	 	49	 
	27.
	 	Entire Agreement	 	 	49	 
	28.
	 	Severability	 	 	49	 
	29.
	 	Notices	 	 	49	 
	30.
	 	Further Assurance	 	 	50	 
	31.
	 	Announcements	 	 	51	 
	32.
	 	Costs and Expenses	 	 	51	 
	33.
	 	Counterparts	 	 	51	 
	34.
	 	Language	 	 	51	 
	35.
	 	Third Party Rights	 	 	51	 
	36.
	 	Governing Law	 	 	51	 
	37.
	 	Expert Determination	 	 	51	 
	38.
	 	Arbitration	 	 	52	 
	 
	 	 	 	 	 	 
	Schedule	 	 	 	 
	 
	 	 	 	 	 	 
	1.
	 	Availability Charge	 	 	54	 
	2.
	 	Fuel charge and variable operation and maintenance charge	 	 	56	 
	3.
	 	Delivery Points and Switchroom	 	 	60	 
	4.
	 	[NOT USED]	 	 	62	 
	5.
	 	Coal Specification	 	 	63	 
	6.
	 	Meter Testing Procedures	 	 	65	 
	7.
	 	Electricity Specification	 	 	66	 
	8.
	 	Scheduling Procedures	 	 	71	 
	9.
	 	Penalties	 	 	75	 
	10.
	 	Insurance	 	 	77	 
	11.
	 	Early Electricity Price	 	 	78	 
	12.
	 	AC Present Value	 	 	79	 

 

 

THIS AGREEMENT is made the 28th day of October, 2004

BETWEEN:

	(1)  	ENERCAL a company incorporated under the laws of France and registered in Nouméa, New
Caledonia with registered number B015 255 whose registered office is at 87 avenue du Général
de Gaulle, 98800 Nouméa, New Caledonia (Enercal); and

	(2)  	GORO NICKEL a company incorporated under the laws of France with registered number 313954570
RCS Paris whose registered office is at 38 Rue du Colisée, 75008, Paris, France (acting
through and on behalf of its New Caledonian branch whose office is at 7 bis, rue Suffren,
BP218, 98845 Nouméa Cedex, New Caledonia) (Goro Nickel).

WHEREAS:

	(A)  	Enercal is responsible for generating, transporting, dispatching and distributing electricity
in New Caledonia.
	 
	(B)  	Goro Nickel holds certain concessions pursuant to which Goro Nickel is entitled to explore
for, develop and mine certain minerals, among which are nickel and cobalt, in a specified area
in New Caledonia (the Concession).
	 
	(C)  	Goro Nickel, having discovered a mineral deposit containing nickel and cobalt within the
Concession, intends to procure and construct a complete and operable mining and metallurgical
processing complex, together with supporting infrastructure, to produce nickel and cobalt (the
Nickel Mine).
	 
	(D)  	Goro Nickel is a purchaser of and wishes to buy Electricity for the purposes of carrying out
the Nickel Mine project, and Enercal agrees to sell Electricity on the terms set out in this
Agreement.

IT IS AGREED as follows:

	1.  	DEFINITIONS AND INTERPRETATIONS
	 
	1.1  	Definitions
	 
	   	In this Agreement:
	 
	   	ACFC has the meaning given to it in schedule 1 (Availability Charge);
	 
	   	ACOM has the meaning given to it in schedule 1 (Availability Charge);
	 
	   	AC Present Value has the meaning given to it in schedule 12 (AC Present Value);
	 
	   	Actual Capacity means, in respect of any Hour, the Electricity Delivered in that Hour
except where the Electricity Delivered in that Hour is affected by a Goro Nickel Event which
causes a reduction in the Electricity available to Enercal in which case the Actual Capacity
for that Hour will be increased by the amount of such reduction or, if Enercal in good faith
determines that such amount cannot be easily and readily measured or determined, the Actual
Capacity for that Hour will be the Target Net Capacity for that Hour;
	 
	   	Actual Monthly Availability means, in any Month, the Actual Monthly Availability
calculated in accordance with clause 9.2 (Availability factors);

1

 

	   	Affiliate means, in relation to a company:

	 	(a)  	any other company (Other Company) which, either directly or indirectly,
controls or is controlled by it; and
	 
	 	(b)  	any other company directly or indirectly controlled by any such Other Company,

	   	in each case as such control is determined within the purpose of Art. L.233-3 of the
French commercial code;
	 
	   	Agreed Form means, in relation to any document, the form of that document which has
been initialled for the purposes of identification by or on behalf of Enercal and Goro
Nickel;
	 
	   	Agreed Index means, in each case where such term is used, an index agreed by the
Parties (or, in the absence of agreement, as determined by an Expert) which index:

	 	(a)  	is published by a reliable independent source;
	 
	 	(b)  	is available on a timely basis;
	 
	 	(c)  	is publicly available (or available for a reasonable fee);
	 
	 	(d)  	is based on costs other than those which are primarily a Party’s own costs;
	 
	 	(e)  	accurately approximates the changes in the amount to be indexed or adjusted
using the index; and
	 
	 	(f)  	appropriately relates to the amount to be so indexed or adjusted,

	   	and which index, for the avoidance of doubt, may be different in each such case;
	 
	   	Applicable Law means any applicable national, territorial, municipal, provincial or
state statute, ordinance or other law (including in relation to Tax), regulation, by-law,
order or decree, any form of delegated legislation, any treaty or international convention
and any regulation or resolution of France or New Caledonia or any part thereof or the
European Union, or the United Nations or its Security Council and includes for the avoidance
of doubt, the IC Permit;
	 
	   	Availability Charge means, in any Month, the Availability Charge calculated in
accordance with schedule 1 (Availability Charge);
	 
	   	Availability Credit means, in any Month, the Availability Credit calculated in
accordance with clause 9.3(b) (Availability Credit);
	 
	   	Availability Credit Electricity has the meaning given to it in clause 9.3(a)
(Availability Credit);
	 
	   	Availability Penalty has the meaning given to it in clause 9.1 (Availability Penalty);
	 
	   	Backup Metering System means all meters, metering equipment, infrastructure and
measurement transformers (both voltage, current or combination units) and any other
measuring equipment and apparatus which may be installed by Goro Nickel at the Nickel Mine
for backup metering of Electricity delivered pursuant to this Agreement;

2

 

	   	Business Day means a Day (other than a Saturday or Sunday) on which banks are generally
open in Nouméa, New Caledonia for normal business;
	 
	   	Change in Law means any of the following events occurring after the date of this
Agreement:

	 	(a)  	the repeal, amendment, making or enactment of any Applicable Law having the
force of law including any Applicable Law relating to Tax;
	 
	 	(b)  	the change in the judicial or administrative interpretation of any Applicable
Law having the force of law including any Applicable Law relating to Tax; and
	 
	 	(c)  	Enercal is required to implement any action under the IC Permit which action is
not expected to require implementation as at the date of this Agreement and which
action is not required to be implemented as at the date the IC Permit is first issued;

	   	Change Notice has the meaning given to it in clause 14.2(a) (Addition or amendment to
electricity generating unit);
	 
	   	Claimant has the meaning given to it in Clause 38.2 (Formation of tribunal);
	 
	   	Coal Specification means the coal specification set out in schedule 5 (Coal
Specification);
	 
	   	Competent Authority means any national, territorial, federal, regional, state, local,
European Union or other court, arbitral tribunal, administrative agency or commission or
other governmental, administrative or regulatory body, authority, agency or instrumentality;
	 
	   	Concession has the meaning given to it in recital (B);
	 
	   	Confidential Information has the meaning set out in clause 18 (Confidentiality);
	 
	   	Consequential Loss means any loss of production, loss of profit, loss of revenue, loss
of contract, loss of goodwill, loss of use or liability under other agreements or indirect
or consequential loss resulting from the performance or non-performance of any obligation
hereunder, any act of negligence, breach of contract or otherwise by either Party and
whether or not such Party knew, or ought to have known, that such losses would be likely to
be suffered as a result of the same;
	 
	   	Construction Services Agreement means the agreement so named dated 3 June 2004 between
Prony and Goro Nickel;
	 
	   	Contract Limits has the meaning given to it in paragraph 4(c) of the Scheduling
Procedures;
	 
	   	Contract Period means the period commencing on the Start Date and, subject to clause
3.2 (Extensions to the Contract Period) and clause 17 (Termination), expiring on the
twenty-fifth (25th) anniversary of the Start Date;
	 
	   	Costs has the meaning given to it in clause 37.3(f) (Role of Expert);
	 
	   	Credit Support Documents means each Inco Guarantee, any replacement of an Inco
Guarantee and any Enercal Credit Support Document;
	 
	   	Day means a period of twenty-four (24) consecutive Hours starting at 00:00 on any day
and ending at 00:00 on the next day;

3

 

	   	Deadline means 31 December 2008 or such later date agreed or determined in accordance
with clause 4.2;
	 
	   	Deemed Actual Capacity has the meaning given to it in clause 9.2(b) (Availability
factors);
	 
	   	Defaulting Party has the meaning set out in clauses 17.1(a),(b) and (c) (Events of
Default) (as applicable);
	 
	   	Definitive Acceptance means the date that each of the following has occurred:

	 	(a)  	Nickel Mine Completion has been achieved;
	 
	 	(b)  	the Nickel Mine has produced, over a continuous period of 30 days occurring
within 15 months after Nickel Mine Completion, a total of at least 2,600 tonnes of
contained nickel in oxide form and 220 tonnes of contained cobalt (such amounts
representing 60% of the Nickel Mine’s capacity and the amount of 220 tonnes of cobalt
being adjusted to reflect any difference between the grade of cobalt in the ore
actually mined and the grade assumed by Inco in setting such figure in the Project
Design Criteria); and
	 
	 	(c)  	Goro Nickel has given notice of (a) and (b) to Enercal;

	   	Delivery Points means the points of interconnection of the Enercal System to the 33kV
feeders connected to the Nickel Mine within the Switchroom, the precise details of which are
set out in part A of schedule 3 (Delivery Points and Switchroom);
	 
	   	Disruption Process has the meaning given to it in the Multipartite Agreement;
	 
	   	Dollar means the lawful currency of the United States of America;
	 
	   	Early Electricity has the meaning given to it in clause 7(a) (Electricity before the
Start Date);
	 
	   	Early Electricity Price means the Early Electricity Price determined in accordance with
schedule 11 (Early Electricity Price);
	 
	   	Early Termination Date has the meaning set out in clause 17.2(a) (Termination right),
clause 16.2(f) (Consequences of Force Majeure) and clause 14.4(a) (Change in Law costs) (as
the case may be);
	 
	   	Electricity means electrical energy meeting the Electricity Specification produced,
flowing, or supplied by an electric circuit during a time interval and being an integral
with respect to the time of instantaneous power, exchanged in units of kWh;
	 
	   	Electricity Delivered means Electricity measured by the Metering System (expressed in
kW) as being delivered to Goro Nickel as an average load over a one Hour period;
	 
	   	Electricity Specification means the specification for Electricity set out at schedule 7
(Electricity Specification);
	 
	   	Emissions Protocol means the agreement so named to be entered into between Goro Nickel
and Prony on terms substantially similar to the Emissions Protocol letter of intent in the
Agreed Form;

4

 

	   	Enercal Credit Support Document means any standby letter of credit or other form of
credit support document issued in favour of Goro Nickel pursuant to clause 13.1(b)
(Enercal’s additional obligations);
	 
	   	Enercal Schedule has the meaning given to it in paragraph 1(b) of the Scheduling
Procedures;
	 
	   	Enercal System means the Transmission System, the Switchroom and each electricity
generation facility connected to the Transmission System;
	 
	   	EPC Contracts means the Engineering, Procurement, Erection and Commissioning Contract
between Prony, Alstom Power Limited and Alstom Power Turbomachines dated 3 June 2004 and the
General Agreement for Civil Works between Prony and Vinci Construction Grands Projets dated
3 June 2004 in the Agreed Form;
	 
	   	ESA Coordinating Committee has the meaning given to it in clause 15.1 (ESA Coordinating
Committee);
	 
	   	Escrow Account means any account established, from time to time, bearing interest at
commercial rates at an independent bank not otherwise used by the Parties in the name of a
third party who will release the proceeds therein to the appropriate Party only upon
satisfaction of the applicable conditions provided in this Agreement and any escrow
agreement that may be agreed upon and executed by the Parties;
	 
	   	Euro means the lawful currency of the member states of the European Union that have
adopted or that adopt the single currency in accordance with the treaty establishing the
European Community, as amended by the Treaty on European Union;
	 
	   	Event of Default has the meaning given to it in clause 17.1 (Events of Default);
	 
	   	Excluded Tax has the meaning given to it in clause 14.3(a) (Tax change in law);
	 
	   	Excusing Factor means:

	 	(a)  	Force Majeure affecting Enercal;
	 
	 	(b)  	a Goro Nickel Event;
	 
	 	(c)  	any act or failure to act of any third party (other than any contractor or
sub-contractor of Goro Nickel);

	   	Expected Actual Capacity, in respect of any Hour, means the total amount of Electricity
(expressed in kW) which Enercal expects to be made available at the Delivery Points on a
continuous and reliable basis, as declared (or deemed to be declared) by Enercal to Goro
Nickel (excluding, for the avoidance of doubt, any Extra Electricity expected to be
delivered in that Hour);
	 
	   	Expert means an appropriately qualified independent expert selected by the ESA
Coordinating Committee who is not a current or former director, officeholder or an employee
of, or directly or indirectly retained (either currently or formerly) as a consultant to,
any Party (or any Affiliate of any Party) and who is not a current or former holder of shares in any Party (or in the Affiliate of any Party); provided, however, that if the ESA
Coordinating Committee is unable to select an Expert within twenty-one (21) Business Days
because of a deadlock between the representatives, the Expert shall be an appropriately
qualified independent person

5

 

	   	who is not a current or former director, officeholder or an employee of, or directly or
indirectly retained (either currently or formerly) as a consultant to, any Party (or any
Affiliate of any Party) and who is not a current or former holder of shares in any Party (or
in the Affiliate of any Party) appointed by the International Centre for Expertise of the
International Chamber of Commerce in accordance with the ICC Rules for Expertise and the
Parties shall share the costs of such procedure equally;
	 
	   	Extension Notice has the meaning given to it in clause 3.2 (Extensions to the Contract
Period);
	 
	   	Extension Period has the meaning given to it in clause 3.2 (Extensions to the Contract
Period);
	 
	   	Extra Electricity has the meaning given to that term in clause 6 (Extra Electricity);
	 
	   	Extra Electricity Charge means, in any Month, the amount calculated in accordance with
clause 6(f) (Extra Electricity);
	 
	   	Extra Electricity Price has the meaning given to it in paragraph 1(c) of the Scheduling
Procedures;
	 
	   	Facility means the pulverised coal fired power station to be constructed under the EPC
Contracts at Prony Bay, New Caledonia together with the supporting infrastructure and
associated facilities;
	 
	   	Finance Documents means all documents relating to the financing of the Facility;
	 
	   	Force Majeure means any external event or circumstance that is beyond the control of
the affected Party which it could not reasonably have avoided or overcome and which makes it
impossible to perform any of its obligations under this Agreement, but excluding:

	 	(a)  	any Insolvency Event affecting either Party or any of their contractors;
	 
	 	(b)  	any failure to perform by either Party’s contractors save to the extent such
failure (i) is caused by an event which would have constituted Force Majeure under this
Agreement had it occurred in relation to such Party and (ii) also satisfies the
requirements for such Party to rely on the same as an event of Force Majeure for its
own performance under this Agreement; and
	 
	 	(c)  	any strikes by a Party’s own workforce save to the extent they are part of a
general strike;

	   	Force Majeure Notice has the meaning given to it in clause 16.2(a) (Consequences of
Force Majeure);
	 
	   	Force Majeure Plan has the meaning given to it in clause 16.2(c) (Consequences of Force
Majeure);
	 
	   	Fuel Charge means, in any Month, the Fuel Charge calculated in accordance with schedule
2 (Fuel Charge and Variable Operation and Maintenance Charge);
	 
	   	General Agreement means the agreement so named dated 14 January 2004 between Inco, Goro
Nickel, Prony and Enercal (as amended);

6

 

	   	Goro Force Majeure means any external event or circumstance that is beyond the control
of Goro Nickel which it could not reasonably have avoided or overcome and which makes it
impossible for Goro Nickel to perform all or substantially all of the construction
activities of the Nickel Mine, but excluding:

	 	(a)  	any Insolvency Event affecting Goro Nickel or any of its contractors;
	 
	 	(b)  	any failure to perform by Goro Nickel’s contractors save to the extent such
failure (i) is caused by an event which would have constituted Goro Force Majeure had
it occurred in relation to Goro Nickel and (ii) also satisfies the requirements for
Goro Nickel to rely on the same as an event of Goro Force Majeure for its own
performance under this Agreement; and
	 
	 	(c)  	any strikes by Goro Nickel’s own workforce save to the extent they are part of
a general strike;

	   	Goro Nickel Event means:

	 	(a)  	a breach by Goro Nickel of the Utilities and Services Agreement, the
Construction Services Agreement or articles 2, 3, 4 or 7 of the Transfer Agreement; or
	 
	 	(b)  	Goro Nickel being unable to provide utilities or services (or only being able
to provide a reduced level of utilities or services) under the Utilities and Services
Agreement as a result of Force Majeure as defined thereunder; or
	 
	 	(c)  	Goro Nickel providing no or a reduced level of Key Services under the Utilities
and Services Agreement as a result of a Permitted Outage or a Planned Outage
thereunder;

	   	Goro Nickel Schedule has the meaning given to it in paragraph 1(a) of the Scheduling
Procedures;
	 
	   	Goro Nickel Termination Payment has the meaning given to it in clause 17.4(c)(i)(B)
(Termination Payment);
	 
	   	Hour means a period of sixty (60) consecutive minutes starting on the hour;
	 
	   	IAS means International Accounting Standards published by the International Accounting
Standards Board or such other generally accepted accounting principles adopted by Prony in
its audited annual financial accounts;
	 
	   	IC Permit means the ‘autorisation d’exploiter une installation classée’ which is
required by Prony under Applicable Laws to operate the Facility;
	 
	   	Inco means Inco Limited, a company organised under the laws of Canada and having its
registered address at 145 King Street West, Toronto, ON, M5H 4B7;
	 
	   	Inco Guarantee means each guarantee to be given by Inco on or about (but no later than)
the date of this Agreement in the Agreed Form;
	 
	   	Independent Party has the meaning given to it in clause 12.4 (Sealing of the Metering
System);
	 
	   	Insolvency Event has the meaning given to it in clause 17.1 (Events of Default);

7

 

	   	Invoice Notice Date has the meaning given to it in clause 10.7(a) (Failure to issue
invoice);
	 
	   	Key Service has the meaning given to it in the Utilities and Services Agreement;
	 
	   	kW means kilowatt;
	 
	   	kWh means kilowatt hours;
	 
	   	Late Payment Rate means a rate of interest per annum equal to the lesser of:

	 	(a)  	LIBOR plus three per cent. (3%) per annum; or
	 
	 	(b)  	the maximum rate of interest allowed by Applicable Law;

	   	Lender means any entity which provides or which may provide (directly or indirectly)
financial products or support to Goro Nickel in relation to the Nickel Mine project;
	 
	   	Level Three Disruption Process has the meaning given to it in the Multipartite
Agreement;
	 
	   	LIBOR means:

	 	(a)  	the British Bankers Association Interest Settlement Rate for the Relevant
Currency displayed on the appropriate page of the Reuters screen; or
	 
	 	(b)  	(if no screen rate is available for the Relevant Currency) the arithmetic mean
(rounded upwards to four (4) decimal places) of the rates quoted by the Reference Banks
to leading banks in the London interbank market,

	   	as of 11.00 a.m. London time on the date two (2) London Business Days prior to the date on
which an amount becomes due under this Agreement for the offering of deposits in the
Relevant Currency for a period of three (3) Months;
	 
	   	London Business Day means a Day (other than a Saturday or Sunday) on which banks are
generally open in London for normal business;
	 
	   	Make-up Amount means the sum of, for each Hour during the Contract Period that
Enercal’s ability to make available Electricity has been affected by Force Majeure, the
difference between the Deemed Actual Capacity in that Hour and the amount that would have
been the Actual Capacity in that Hour had clause 9.2 (Availability Factors) not applied plus
the sum of, for each Hour during the Contract Period that Goro Nickel’s ability to take
Electricity has been affected by Force Majeure affecting Goro Nickel only, the difference
between the expected Scheduled Net Capacity for that Hour most recently (determined at that
Hour) notified to Enercal in accordance with the Scheduling Procedures prior to the Force
Majeure affecting Goro Nickel and the Scheduled Net Capacity in that Hour;
	 
	   	Make-up Period means the number of whole Days (rounded to the nearest Day) calculated
as the Make-up Amount (calculated on the first Day of the Make-up Period) divided by
1,200,000kW;
	 
	   	Material Adverse Change has the meaning given to it in clause 14.2(a) (Addition or
amendment to electricity generating unit);
	 
	   	Metering Specification means the specifications for the Metering System as agreed by
the ESA Coordinating Committee;

8

 

	   	Metering System means all meters, metering equipment, infrastructure and measurement
transformers (both voltage, current or combination units) and any other measuring equipment
and apparatus owned by Enercal (including the Transmission Metering System), the precise
location and details of which are set out in part B of schedule 3 (Metering Systems);
	 
	   	Meter Testing Procedures means those procedures set out at schedule 6 (Meter Testing
Procedures);
	 
	   	Month means a calendar month;
	 
	   	Multipartite Agreement means an agreement so named granting Goro Nickel specified
rights in respect of the operation and maintenance of the Facility in certain circumstances,
the parties to which will include Goro Nickel, Enercal and Prony;
	 
	   	Nickel Mine has the meaning given to that term in recital (C);
	 
	   	Nickel Mine Completion means the date prior to the start-up of the Nickel Mine when:

	 	(a)  	the Nickel Mine has been built in accordance with the Project Design Criteria
and when all of its necessary systems and facilities are ready to accept feed for
start-up operations and are capable of production;
	 
	 	(b)  	all necessary materials and equipment have been installed in accordance with
the plans, drawings and specifications, and checked and tested for alignment,
lubrication, rotation, hydrostatic or pneumatic pressure integrity, and the process,
ancillary and appropriate infrastructure facilities have been flow tested with water;
	 
	 	(c)  	all necessary tests for mechanical integrity and continuity of electric
circuitry, piping and process controls have been satisfactorily completed;
	 
	 	(d)  	all necessary operating units, systems and subsystems are determined to be
complete and capable of operation; and
	 
	 	(e)  	a punch list of incomplete items related to the Nickel Mine and all operating
units, systems or subsystems has been established and agreed upon by Goro Nickel;

	   	Non-Defaulting Party means the Party which is not the Defaulting Party;
	 
	   	Notice has the meaning given to it in clause 37.2 (Referral to Expert);
	 
	   	Other Approval means any permission, permit, approval, consent, licence, authority or
right of way other than a Permit, which is required by Enercal to enable it to perform its
obligations under this Agreement;
	 
	   	Other Company has the meaning given to it in this clause 1.1;
	 
	   	Outage means any event, other than Force Majeure, which affects Enercal’s ability to
make Electricity available to Goro Nickel under this Agreement;
	 
	   	Party means one or other of the parties to this Agreement;
	 
	   	Permit means any permission, licence, authority, approval or consent of any Competent
Authority and, where a Competent Authority is authorised to prohibit a proposal, the passing
of the time limited for such prohibition without the proposal being prohibited;

9

 

	   	Planned Outage means an Outage for planned maintenance, testing and or inspection of
any part of the Enercal System as notified to Goro Nickel through Enercal’s nominations of
Expected Actual Capacity given in accordance with the Scheduling Procedures;
	 
	   	PPA means the term sheet for the Contrat De Vente Et D’Achat D’Electricité in the
Agreed Form between Enercal and Prony dated 12 October 2004, any agreement entered into
pursuant to that term sheet and the Contrat De Vente Et D’Achat D’Electricité in the Agreed
Form between Enercal and Prony dated 3 June 2004 as amended (including any amendment in
accordance with the term sheet referred to in this definition) together pursuant to which
Enercal agrees to purchase from Prony the entire capacity of the Power Station for a period
at least equal to the Contract;
	 
	   	PQM Systems means the power quality measuring systems, the general details of which are
described in paragraph 7 of the Electricity Specifications and the precise details of which
are agreed by the ESA Coordinating Committee;
	 
	   	Project Agreements means:

	 	(a)  	this Agreement, the General Agreement, the Utilities and Services Agreement,
the Water Supply Agreement, the Multipartite Agreement, the Transfer Agreement, the
PPA, the Emissions Protocol, the Construction Services Agreement, the EPC Contracts and
the Finance Documents; and
	 
	 	(b)  	any other material agreement relating to the Facility to which Enercal or Prony
is a party and a breach of which would be likely to have a material adverse effect on:

	 	(i)  	the ability of Enercal to perform any material obligation under
this Agreement; or
	 
	 	(ii)  	the operation, maintenance or ownership of the Facility;

	   	Project Design Criteria means Goro Nickel’s written project design criteria (as amended
from time to time);
	 
	   	Prony means Prony Energies S.A.S, a company incorporated under the laws of France and
registered in Nouméa, New Caledonia with registered number B651927 and a registered office
at 29, rue Jules Ferry, 98800, Nouméa Cedex, New Caledonia;
	 
	   	Public Utilities Obligations means Enercal’s statutory obligation to supply electricity
to the public of New Caledonia;
	 
	   	Reasonable and Prudent Operator means a person seeking in good faith to perform its
contractual obligations and, in so doing and in the general conduct of its undertaking,
exercising that degree of skill, diligence, prudence and foresight which would reasonably
and ordinarily be expected from a skilled and experienced entity engaged in the same type of
undertaking under the same or similar circumstances or conditions and with obligations to
provide electricity on a continuous and reliable basis;
	 
	   	Reduced Capacity means in respect of any Reduced Capacity Hour, 50,000kW minus the
amount of Electricity nominated by Goro Nickel in respect of that Reduced Capacity Hour in
the Goro Nickel Schedule;
	 
	   	Reduced Capacity Hour has the meaning given to it in paragraph 1(a)(i) of the
Scheduling Procedures;

10

 

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

11

 

	   	Target Monthly Availability means, in any Month, the Target Monthly Availability
calculated in accordance with clause 9.2(c) (Availability factors);
	 
	   	Target Net Capacity for each Hour means 50,000kW minus:

	 	(a)  	if that Hour is a Reduced Capacity Hour set by Goro Nickel in accordance with
paragraph 1(c) of the Scheduling Procedures, the Reduced Capacity in respect of that
Reduced Capacity Hour;
	 
	 	(b)  	any amount of Surrendered Electricity which the Parties have agreed in respect
of that Hour in accordance with the Scheduling Procedures; and
	 
	 	(c)  	the amount by which Electricity generation to be made available to Goro Nickel
must be reduced in that Hour by virtue of the Emissions Protocol;

	   	Target Start Date means 9th January, 2008 as the same may be extended by any
Excusing Factor (the duration of any such extension being as agreed between the Parties or,
in the absence of agreement, as determined in accordance with clause 37 (Expert
Determination));
	 
	   	Tax means any tax, levy, impost, duty, royalty or other charge or withholding of a
similar nature (including any penalty or interest payable in connection with any failure to
pay or any delay in paying any of the same) including income tax and corporation tax;
	 
	   	Tax Change in Law means any of the following events occurring after the date of this
Agreement:

	 	(a)  	the repeal, amendment, making or enactment of any Applicable Law having the
force of law relating to Tax (excluding, for the purposes of this definition, any
penalty or interest payable in connection with any failure to pay or any delay in
paying any of the same); and
	 
	 	(b)  	the change in the judicial or administrative interpretation of any Applicable
Law having the force of law relating to Tax (excluding, for the purposes of this
definition, any penalty or interest payable in connection with any failure to pay or
any delay in paying any of the same);

	   	Technical Dispute has the meaning given to it in clause 37.2 (Referral to Expert);
	 
	   	Termination Payment has the meaning given to it in clause 17.4(a) (Termination
Payment), clause 16.2(f) (Consequences of Force Majeure) and clause 14.4(b) (Change in Law
costs) (as the case may be);
	 
	   	Termination Payment Date has the meaning given to in clause 17.4(e) (Termination
Payment), clause 14.4(e) (Change in Law costs) and 16.2(i) (Consequences of Force Majeure)
(as the case may be);
	 
	   	Transfer Agreement means the agreement so named dated 3 June 2004 between Prony, Inco
and Goro Nickel;
	 
	   	Transmission Metering System means all meters, metering equipment, infrastructure and
measurement transformers (both voltage, current or combination units) and any other
measuring equipment and apparatus owned by Enercal and installed at or near the point at
which electricity is delivered from the Facility to the Transmission System (the precise
location and details of which are set out in part B of schedule 3 (Metering Systems));

12

 

	   	Transmission System means the high voltage national grid system owned and operated by
Enercal for the transmission of electricity in New Caledonia;
	 
	   	TSS means ‘taxe sur les services‘;
	 
	   	Unavailable means, in relation to an insurance policy required to be effected and
maintained under this Agreement, either that:

	 	(a)  	such insurance policy is not available in the worldwide insurance market with
reputable insurers of good standing; or
	 
	 	(b)  	the insurance premium payable for such insurance policy is at such a level that
the risk covered by such insurance policy is not generally being insured against in the
worldwide insurance market with reputable insurers of good standing;

	   	Unsuccessful has the meaning given to it in the Multipartite Agreement;
	 
	   	Unused Capacity Price has the meaning given to it in paragraph 1(c) of the Scheduling
Procedures;
	 
	   	Utilities and Services Agreement means the agreement so named dated 28 October 2004
between Goro Nickel and Prony;
	 
	   	Variable Operation and Maintenance Charge means, in any Month, the Variable Operation
and Maintenance Charge calculated in accordance with schedule 2 (Fuel Charge and Variable
Operation and Maintenance Charge);
	 
	   	Water Supply Agreement means an agreement to be entered into for the supply of water
from the Yate reservoir in New Caledonia to the Nickel Mine, the parties to which will
include Enercal and Goro Nickel; and
	 
	   	Week means each week commencing on 00:00 on Monday and ending on 24:00 on the following
Sunday.
	 
	1.2  	Interpretation
	 
	   	In this Agreement:

	 	(a)  	any reference, express or implied, to an enactment includes references to:

	 	(i)  	that enactment as amended, extended or applied by or under any
other enactment before or after the date of this Agreement;
	 
	 	(ii)  	any enactment which that enactment re-enacts (with or without
modification); and
	 
	 	(iii)  	any subordinate legislation made (before or after the date of
this Agreement) under any enactment, including one within clause 1.2(a)(i) or
(ii) above;

	 	(b)  	any reference to a clause or schedule, is a reference to a clause or schedule
of this Agreement and any reference to a paragraph is to a paragraph of the schedule in
which the term is used or to the schedule noted where the term is used;
	 
	 	(c)  	words in the singular may be interpreted as including the plural, and vice
versa;

13

 

	 	(d)  	any reference to the words include or including shall be construed without
limitation;
	 
	 	(e)  	unless otherwise specified, any reference to time shall be a reference to time
in Nouméa, New Caledonia;
	 
	 	(f)  	any reference to a year shall be a reference to a calendar year;
	 
	 	(g)  	unless a contrary indication appears, any reference in this Agreement to:

	 	(i)  	any Party shall be construed so as to include its successors in
title, permitted assigns and permitted transferees;
	 
	 	(ii)  	this Agreement or any other agreement or instrument is a
reference to this Agreement (including each schedule to this Agreement) or
other agreement or instrument as amended, supplemented or novated from time to
time in accordance with, and subject to, any requirements of this Agreement;
	 
	 	(iii)  	a person includes any individual, firm, company, corporation,
unincorporated organisation, government, state or agency of a state or any
association, trust or partnership (whether or not having separate legal
personality) or any other entity;
	 
	 	(iv)  	a regulation includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of any
governmental, intergovernmental or supranational body, agency, department or
regulatory, self-regulatory or other authority or organisation;
	 
	 	(v)  	words of any gender include each other gender;
	 
	 	(vi)  	the term hereof and similar words refer to this entire
Agreement and not to any particular clause or schedule or any other subdivision
of this Agreement; and
	 
	 	(vii)  	any capitalised words, terms, phrases and abbreviations used
specifically in any schedule shall have the meanings set forth in such
schedule, as the case may be; and

	 	(h)  	clause and schedule headings are for ease of reference only.

	2.  	[NOT USED]
	 
	3.  	DURATION AND TERM
	 
	3.1  	Duration and term
	 
	   	This Agreement shall come into force on the date of this Agreement and, subject to
clause 3.3 (Survival of rights), shall automatically expire at the end of the Contract
Period (unless terminated earlier in accordance with its terms).

14

 

	3.2  	Extensions to the Contract Period

	 	(a)  	Goro Nickel may:

	 	(i)  	at least (2) two years before the twenty-fifth
(25th) anniversary of the Start Date; and
	 
	 	(ii)  	at least (1) one year before the expiration of any Extension
Period,

	 	   	serve a notice upon Enercal to extend the Contract Period by a further five (5)
years (such period of extension being referred to as an Extension Period) (Extension
Notice). Following service of an Extension Notice, the Contract Period shall be
automatically extended until the end of the Extension Period referred to in that
Extension Notice. Goro Nickel may issue a maximum of (5) five Extension Notices.
	 
	 	(b)  	Unless Goro Nickel notifies Enercal otherwise, the Contract Period will
automatically be extended by one Make-up Period which extension will follow on
immediately from:

	 	(i)  	the expiry of the final Extension Period; or
	 
	 	(ii)  	if Goro Nickel does not issue any Extension Notice, the
twenty-fifth (25th) anniversary of the Start Date.

	 	(c)  	Notwithstanding any other provision of this Agreement, during any Make-up
Period no Availability Charge will be payable to Enercal however during any Month of a
Make-up Period, to the extent that Goro Nickel has not already paid ACOM in respect of
the period giving rise to the Make-up Period, Goro Nickel shall pay Enercal ACOM for
that Month.

	3.3  	Survival of rights

	 	(a)  	Except as otherwise expressly provided in this Agreement, termination of this
Agreement shall not affect any rights or obligations of either of the Parties which may
have accrued prior to such termination and shall not affect continuing obligations of
either of the Parties under this Agreement.
	 
	 	(b)  	Save as otherwise provided in clause 16.2(e) (Consequences of Force Majeure),
clause 4.2(b) (Start Date notices), this clause 3.3, clause 37, clause 38 and any other
clause expressed to survive termination shall survive termination of this Agreement.

	4.  	FUNNEL MECHANISM
	 
	4.1  	Anticipated Start Date

	 	(a)  	The Parties acknowledge that the Start Date is anticipated to occur on 9
January 2008 and can not occur before 9 January 2008 (or such other date as may be
agreed by the Parties).
	 
	 	(b)  	In the event that the Start Date does not occur by the Target Start Date,
Enercal must pay Goro Nickel the Start Date LD Amount each Day as liquidated damages
from the Target Start Date to the Start Date. The total sum of the Start Date LD
Amounts payable by Enercal pursuant to the proviso to the definition of “Amount” in
Part B of Schedule 9 (Penalties – Start Date LD Amount) will not exceed €1,456,289 and
the

15

 

	 	   	total sum of all other Start Date LD Amounts payable by Enercal will not exceed
€4,959,000.
	 
	 	(c)  	Enercal shall pay any Start Date LD Amount which becomes due to Goro Nickel
under this clause 4 in respect of any Month within thirty (30) Days of the start of the
following Month.

	4.2  	Start Date notices

	 	(a)  	Enercal must give Goro Nickel non-binding estimates of the anticipated Start
Date as follows:

	 	(i)  	not less than three (3) Months in advance of the beginning of
the Month in which Enercal expects the Start Date will occur;
	 
	 	(ii)  	not less than four (4) Weeks in advance of the beginning of the
Week in which Enercal expects the Start Date will occur; and
	 
	 	(iii)  	not less than forty-eight (48) Hours in advance of the
beginning of the Day on which Enercal expects the Start Date will occur.

	 	(b)  	If:

	 	(i)  	the Start Date has not occurred by the Deadline; or
	 
	 	(ii)  	in any complete Month in the period from the date falling 5
months after the Target Start Date to the Deadline, Enercal supplies less than
seventy-five per cent. (75%) of the Target Monthly Availability (except to the
extent Enercal’s inability to supply such proportion of the Target Monthly
Availability is as a direct result of a Goro Nickel Event),

	 	   	then Goro Nickel shall be entitled at any time thereafter to terminate this
Agreement upon written notice to Enercal, provided that the Start Date has still not
occurred by the date on which such notice is given by Goro Nickel to Enercal. Upon
such termination, neither Party will have any rights or liabilities under this
Agreement except that Enercal shall be required to indemnify Goro Nickel for all
losses, damages and reasonable and demonstrable costs suffered by Goro Nickel as a
result of the early termination of this Agreement (such amount not to exceed the
Relevant Cap). The Relevant Cap is 20,000,000 Dollars if paragraph (i) or (ii)
above (as the case may be) occurs as a result of Enercal’s wilful disregard of Goro
Nickel’s need to have Electricity and 10,000,000 Dollars in any other case.
	 
	 	(c)  	If as a direct result of a Goro Nickel Event, the effects of which Enercal
could not have avoided or overcome and which makes it impossible for Enercal to give
notice of the Start Date by the Deadline, Enercal will give notice to Goro Nickel
setting out the following:

	 	(i)  	the details of the relevant Goro Nickel Event;
	 
	 	(ii)  	the effect that such Goro Nickel Event will have on Enercal’s
ability to achieve the Start Date by the Deadline and the date to which Enercal
would propose that the Deadline be extended; and

16

 

	 	(iii)  	the attempts that Enercal has made to avoid or overcome the
effects of the Goro Nickel Event.

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

	4.3  	Start Date LD information
	 
	   	Enercal will promptly notify Goro Nickel:

17

 

	 	(a)  	if it believes that the Start Date will not occur by the Target Start Date,
giving reasons for its belief; and
	 
	 	(b)  	of the extent to which it is liable to pay Start Date LD Amounts solely due to
delays in completion of the civil works relating to the second generating unit of the
Facility.

	5.  	SALE AND PURCHASE OF CAPACITY AND ELECTRICITY
	 
	5.1  	Availability and delivery obligation
	 
	   	Subject to and in accordance with the terms of this Agreement, during the Contract
Period, Enercal shall in each Hour:

	 	(a)  	make available to Goro Nickel, the Target Net Capacity for that Hour; and
	 
	 	(b)  	deliver to Goro Nickel the Electricity associated with the Scheduled Net
Capacity for that Hour.

	5.2  	Delivery
	 
	(a)  	The Electricity to be supplied by Enercal to Goro Nickel under this Agreement shall be
delivered at the Delivery Points.
	 
	(b)  	Title and risk of loss with respect to all Electricity shall pass to Goro Nickel at the
Delivery Points upon delivery by Enercal of such Electricity to the Delivery Points.
	 
	5.3  	Obligations under Scheduling Procedures and Electricity Specification
	 
	   	The Parties must comply with their respective obligations contained in the Scheduling
Procedures and any obligations contained in the Electricity Specification.
	 
	6.  	EXTRA ELECTRICITY
	 
	(a)  	Subject to clauses 6(b) to 6(d), Goro Nickel shall be entitled to request at any time during
the Contract Period delivery of Electricity (Extra Electricity) in excess of the Target Net
Capacity in any Hour or the Contract Limit in paragraph 4(b) of the Scheduling Procedures in
any year.
	 
	(b)  	Where Goro Nickel requests Extra Electricity, such request must be in accordance with the
Scheduling Procedures, in writing and must specify the amount of Extra Electricity required
and the period in which such Extra Electricity is required to be delivered.
	 
	(c)  	Enercal must use all reasonable endeavours to satisfy any request for Extra Electricity made
by Goro Nickel in accordance with clause 6(b).
	 
	(d)  	Where Goro Nickel has not previously requested Extra Electricity in any Hour in accordance
with the Scheduling Procedures and Goro Nickel requires Extra Electricity in that Hour, then
Enercal will provide that Extra Electricity to Goro Nickel if such Extra Electricity is
available.
	 
	(e)  	Extra Electricity must be made available at the Delivery Points.
	 
	(f)  	The Extra Electricity Charge in any Month m, ECm, will be calculated as follows:

18

 

	   	ECm = The sum of, for each Extra Electricity generation source used to
deliver Extra Electricity in that Month, the Extra Electricity Price in Month m for that
Extra Electricity generation source x the number of kWh of Extra Electricity delivered by
Enercal from that Extra Electricity generation source to the Delivery Points in Month m.
	 
	7.  	ELECTRICITY BEFORE THE START DATE
	 
	(a)  	If Goro Nickel requests Electricity in any Hour prior to the Start Date (Early Electricity),
Enercal agrees to:

	 	(i)  	make available in that Hour up to 20,000kW of the Electricity purchased by
Enercal under the PPA; and
	 
	 	(ii)  	give Goro Nickel priority to any further Electricity purchased by Enercal under
the PPA so long as Enercal can meet its Public Utilities Obligations after using all
available generation sources on the Enercal System to satisfy such Public Utilities
Obligations.

	(b)  	If Goro Nickel requests Early Electricity in any Hour and Enercal is unable to satisfy that
request for Early Electricity in part or in full in accordance with clause 7(a), Enercal will
endeavour to make available Electricity from other generation sources to satisfy such request
of Goro Nickel if possible.
	 
	(c)  	If the Start Date has not occurred by 1 July 2008, then from 1 July 2008 until the Start
Date, Enercal must in each Hour, make available the Scheduled Net Capacity for that Hour.
Enercal must use all best endeavours to ensure that it is able to fulfil its obligation under
this clause 7(c) including by obtaining Electricity from the Transmission System or by
obtaining supplemental Electricity generation equipment. The price for any Early Electricity
delivered from 1 July 2008 until the Start Date will be the lower of the Early Electricity
Price and the price had such Electricity been delivered after the Start Date under this
Agreement.
	 
	(d)  	Within thirty (30) Days after receipt of an invoice for Early Electricity delivered in any
Month, Goro Nickel must pay the Early Electricity Price for all Electricity Delivered to Goro
Nickel in any Month before the Start Date.
	 
	8.  	PAYMENTS
	 
	   	Goro Nickel shall, in respect of each Month, from the Start Date until the end of the
Contract Period (and in accordance with the terms of this Agreement) pay to Enercal:

	 	(a)  	the Availability Charge for that Month;
	 
	 	(b)  	the Fuel Charge for that Month;
	 
	 	(c)  	the Variable Operation and Maintenance Charge for that Month; and
	 
	 	(d)  	any Extra Electricity Charge for that Month.

	9.  	ADJUSTMENTS
	 
	9.1  	Availability Penalty

	 	(a)  	At the end of each Month of the Contract Period, Enercal shall calculate the
Actual Monthly Availability for that Month. If in any such Month the Actual Monthly

19

 

	 	   	Availability is less than the Target Monthly Availability, Enercal shall pay to Goro
Nickel an amount (Availability Penalty) calculated in accordance with part A of
schedule 9 (Penalties — Availability Penalty).
	 
	 	(b)  	Any Availability Penalty payable pursuant to this clause 9.1 in any Month
during the Contract Period must be included in an invoice issued in respect of that
Month under clause 10 (Billing and Payment) and must be paid by Enercal within thirty
(30) Days of the date of that invoice.

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

20

 

	10.  	BILLING AND PAYMENT
	 
	10.1  	Metering System
	 
	   	The Metering System shall be used to determine the amount of Electricity Delivered in
each Hour during each Month. In the event that the Metering System is not in service as a
result of maintenance repairs or testing, then, if Goro Nickel has installed a Backup
Metering System, such system shall be used to determine the amount of Electricity Delivered
in each Hour during each Month.
	 
	10.2  	Invoices
	 
	(a)  	No later than the tenth (10th) Business Day of each Month, Enercal shall submit an original
invoice or invoices to Goro Nickel showing, in respect of the immediately preceding Month:

	 	(i)  	the Availability Charge, the Fuel Charge, the Variable Operation and
Maintenance Charge, any Extra Electricity Charge, any Availability Credit and the
amount of any Availability Penalty as separate figures; and
	 
	 	(ii)  	any other amounts payable by Enercal or Goro Nickel pursuant to this Agreement.

	(b)  	Enercal shall also provide, with appropriate supporting documentation, full details of the
calculation of all amounts to be included in an invoice submitted in accordance with clause
10.2(a).
	 
	(c)  	Invoiced amounts shall be due and payable within thirty (30) Days following receipt of the
invoice.
	 
	(d)  	Invoices shall be denominated, as to all amounts, other than the Fuel Charge, in Euro, and as
to the components of the Fuel Charge, in Dollars and in Euro (as the case may be).
	 
	10.3  	Payment
	 
	   	All payments pursuant to this Agreement shall be made by wire transfer to one or more
New Caledonian bank accounts designated by the Party to receive such payment. All payments
shall be made in full, without deduction or withholding on account of any other amount,
whether by way of set-off or otherwise, except as expressly provided in this Agreement.
Payments shall be considered made when the full amount due is credited to the account of the
recipient.
	 
	10.4  	Payment of disputed amounts
	 
	(a)  	If a Party that receives an invoice from the other Party in good faith disputes any amount
provided on the invoice delivered by the other Party, the invoiced Party shall pay the other
Party the undisputed invoiced amounts on the date due. The invoiced Party may withhold any
disputed amounts, provided the invoiced Party shall have notified the other Party in writing
of such dispute and the reasons therefore no later than thirty (30) Days after the invoiced
Party received such invoice. Any dispute pursuant to this clause 10.4(a) shall be resolved in
accordance with clause 10.4(b).
	 
	(b)  	Upon receipt of any notice of dispute pursuant to clause 10.4(a), the Parties shall
immediately submit such dispute to the ESA Coordinating Committee. If, after thirty (30)
Business Days, the ESA Coordinating Committee is unable to resolve the dispute to the mutual
satisfaction of each Party, the Parties shall immediately submit the dispute to an Expert with
experience in

21

 

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

22

 

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

23

 

	   	functioning improperly, then the correct amount of Electricity Delivered in any Hour to Goro
Nickel or the electricity delivered to the Transmission System for the actual period during
which inaccurate measurements were made, if any, shall be determined as follows:

	 	(a)  	first, in respect of Electricity Delivered to Goro Nickel only, if a Backup
Metering System has been installed, the readings of the Backup Metering System shall be
utilised to calculate the correct amount of Electricity Delivered in any such Hour,
unless a test of the Backup Metering System, reveals that the Backup Metering System is
inaccurate by more than one-fifth of one per cent. (0.2%) or is otherwise functioning
improperly;
	 
	 	(b)  	in respect of Electricity Delivered to Goro Nickel when no Backup Metering
System has been installed or the Backup Metering System is found to be inaccurate by
more than one-fifth of one per cent. (0.2%) or is otherwise functioning improperly and
in respect of electricity delivered to the Transmission System, the Parties shall
jointly prepare an estimate of the correct reading on the basis of all available
information and such guidelines as may have been agreed to by the ESA Coordinating
Committee; and
	 
	 	(c)  	if the period of inaccuracy cannot be accurately determined, or if the Parties
cannot agree on an estimate of the correct reading, the Metering System inaccuracy
shall be deemed to have commenced on the date which is midway between the date the
Metering System was found to be inaccurate and the date of the last Metering System
reading accepted by the Parties as accurate. In no event, however, shall any such
adjustment be made for any period prior to the date on which any component of the
Metering System required to be accurate to within plus or minus one-fifth of one per
cent. (±0.2%) under this Agreement was last tested and found to be accurate within plus
or minus one-fifth of one per cent. (±0.2%) and not otherwise functioning improperly,

	   	and any previous payments made by Goro Nickel or Enercal during the period of
inaccuracy shall be adjusted based on the adjustments to the Metering System readings
provided for in this clause 12.3 and the amount so determined shall be offset against or
added to the relevant amount payable under the next invoice delivered by Enercal under this
Agreement as appropriate.
	 
	12.4  	Sealing of Metering System
	 
	(a)  	The Metering System and any Backup Metering System shall be jointly and doubly sealed. Seals
on the Metering System and any Backup Metering System shall be broken by Enercal personnel or
Goro Nickel personnel, but only in the presence of one another, or if required by the ESA
Coordinating Committee, only in the presence of an independent party, unrelated, directly or
indirectly to either Party and mutually agreeable to the Parties (Independent Party) and only
when the Metering System or any Backup Metering System is to be inspected, tested or adjusted
in accordance with the terms of this Agreement.
	 
	(b)  	Either Enercal or Goro Nickel, as the case may be, shall be given at least forty-eight (48)
hours advance notice of the breaking of seals on the Metering System or any Backup Metering
System. Such notice will specify the date and time at which a Metering System seal is to be
broken. In the event that either Party and/or the Independent Party (if determined by the ESA
Coordinating Committee) is not present at the time specified in such notice, the Party present
may break both seals on whichever of the Metering System or the Backup Metering System that it
owns, and such Party may inspect, test and calibrate the same, in which case the metering of
Electricity Delivered in any Hour shall be determined from that Party’s

24

 

	   	Metering System or Backup Metering System (as the case may be) until the other Party
schedules a reinspection of the Metering System and any Backup Metering System (as
applicable).
	 
	(c)  	If the ESA Coordinating Committee has decided that it is appropriate to appoint an
Independent Party to be present when the Metering System or any Backup Metering System is to
be inspected, tested or adjusted in accordance with the terms of this Agreement, then Enercal
and Goro Nickel (as the case may be) shall each provide access for the Independent Party to
its Metering System or Backup Metering System (as the case may be) at all reasonable times for
the purpose of carrying out any such inspection, test or adjustment provided that such access
shall not interfere with the normal business operations of Enercal or Goro Nickel.
	 
	12.5  	Repair, replacement or recalibration of Metering System
	 
	   	When any component of the Metering System required to be accurate to within plus or
minus one-fifth of one per cent. (±0.2%) under this Agreement, is found to be inaccurate by
more than plus or minus one-fifth of one per cent. (±0.2%) or otherwise not functioning
properly, Enercal shall immediately repair, recalibrate or replace such component of the
Metering System or the Metering System as a whole, as the case may be, at its expense
(except as otherwise provided herein). Upon the completion of any examination, maintenance,
repair or recalibration of, or replacement of any component in, the Metering System such
metering system shall be sealed in the presence of representatives of the Parties and/or the
Independent Party (as decided by the ESA Coordinating Committee).
	 
	13.  	ADDITIONAL RIGHTS AND OBLIGATIONS OF THE PARTIES
	 
	13.1  	Enercal’s additional obligations
	 
	(a)  	Enercal must procure that, unless required by any Applicable Law, the Enercal System is not
altered in any manner which would adversely affect the ability of Enercal to perform its
obligations under this Agreement.
	 
	(b)  	If Competent Authorities of France at any time cease to control (indirectly through any
majority owned Affiliate or Competent Authority or directly), or to own more than fifty per
cent. (50%) of the voting share capital of, Enercal, Enercal shall notify Goro Nickel of such
occurrence and shall:

	 	(i)  	within thirty (30) Days of such occurrence, procure that a bank acceptable to
Goro Nickel provides Goro Nickel with an irrevocable on-demand standby letter of credit
or an entity acceptable to Goro Nickel provides some other form of credit support (in
either case in a form and substance satisfactory to Goro Nickel) in respect of its
liabilities under this Agreement in an amount equal to 10,000,000 Euros; and
	 
	 	(ii)  	thereafter ensure that Goro Nickel has the benefit of such credit support
document or letter of credit from such entity or bank at all times during the Contract
Period.

	13.2  	Reasonable and Prudent Operator
	 
	   	Enercal must act at all times as a Reasonable and Prudent Operator with a view to
ensuring that Electricity is available up to the Target Net Capacity at all times during the
Contract Period other than periods of Planned Outage or as the result of Force Majeure.

25

 

	13.3  	Goro Nickel financing
	 
	 	If any Lender requires Enercal and/or any entity which has provided Enercal with
financial products or support to enter into any documentation in relation to any financial
product or support to be provided by that Lender to Goro Nickel, then Enercal will (at Goro
Nickel’s cost) provide all reasonable assistance to such Lenders and Goro Nickel so that
such financial products or support can be provided and such documentation can be executed.
Nothing in this clause 13.3 shall require Enercal to provide any assistance or enter into
any document that would:

	 	(a)  	be inconsistent with; or
	 
	 	(b)  	adversely affect the rights of Enercal or any such entity under,

any document to which Enercal or such entity is a party.

	13.4  	Expansion of Electricity supply obligation
	 
	(a)  	Subject to clause 13.4(b), Enercal must procure that:

	 	(i)  	the Facility is designed so that it can at all times, following a request by
Goro Nickel, be expanded by the construction of an additional 50MW electricity
generating unit; and
	 
	 	(ii)  	a portion of land immediately adjacent to the Facility is made available so
that the Facility can be expanded in accordance with clause 13.4(a)(i).

	(b)  	Where Goro Nickel gives Enercal notice of a request for an expansion of the Facility in
accordance with clause 13.4(a):

	 	(i)  	Enercal undertakes to co-operate with Goro Nickel in co-ordinating all aspects
related to the expansion including the financing and construction arrangements;
	 
	 	(ii)  	Enercal acknowledges that, where Prony does not obtain financing for any such
expansion requested by Goro Nickel, Goro Nickel will be entitled to, in accordance with
its rights and obligations under the Utilities and Services Agreement, use its own
funds to construct such expansion on the land referred to in clause 13.4(a)(ii) (which
land is to be made available to Goro Nickel by Prony); and
	 
	 	(iii)  	the Parties shall meet to determine any amendments that are required to this
Agreement and to each Project Agreement and shall implement any amendments agreed
following such meeting.

	(c)  	Goro Nickel may only give Enercal a request for an expansion of the Facility in accordance
with clause 13.4(a) once.
	 
	13.5  	Replacement of an Inco Guarantee
	 
	(a)  	If an entity other than Inco acquires a direct or indirect interest in Goro Nickel, Enercal
acknowledges that an Inco Guarantee (and any other guarantee provided in accordance with this
clause 13.5) may be replaced with:

	 	(i)  	a new guarantee from Inco in the same form as that Inco Guarantee save that the
amount guaranteed under such new guarantee will be at least the proportion of the

26

 

	 	   	amount guaranteed under that Inco Guarantee representing Inco’s then proportional
ownership interest in the total number of ordinary shares in the capital of Goro
Nickel; and
	 
	 	(ii)  	one or more guarantees with the same legal effect as that Inco Guarantee (or
other form of credit support agreed by Enercal, such agreement not to be unreasonably
withheld) provided that any entity giving any such replacement guarantee or other form
of credit support document has a credit rating of at least Baa3 from Moody’s Investors
Services, Inc or BBB- from Standard & Poor’s, a division of The McGraw-Hill Companies,

	   	provided that:

	 	(iii)  	the total sum of the amounts guaranteed (on a several basis) under each
guarantee and other credit support documents provided under this clause 13.5 and in
place at any time will equal the amount guaranteed under that Inco Guarantee; and
	 
	 	(iv)  	at no time will the total number of such guarantees and other credit support
documents which replace that Inco Guarantee exceed five (5) (unless Enercal consents to
an increase in the permitted number of guarantees or other credit support documents,
such consent not to be unreasonably withheld).

	(b)  	Enercal agrees to execute each guarantee or agreed credit support document which complies
with the requirements of this clause 13.5 and which Goro Nickel requires Enercal to enter
into.
	 
	(c)  	Notwithstanding clause 13.5(a)(i):

	 	(i)  	from the date of this Agreement until the date of Definitive Acceptance, Goro
Nickel must procure that the proportion of the amount guaranteed by Inco under the Inco
Guarantee in effect until the date of Definitive Acceptance will be at least sixty six
and two thirds per cent. (66 2/3%) of the total amount of that Inco Guarantee as at the
date of that guarantee; and
	 
	 	(ii)  	from the date of Definitive Acceptance until 5 years from the date of
Definitive Acceptance, Goro Nickel must procure that the proportion of the amount
guaranteed by Inco under the Inco Guarantee in effect from the date of Definitive
Acceptance will be at least fifty and one tenth per cent (50.1%) of the total amount of
that Inco Guarantee as at the date of that guarantee.

	13.6  	Acknowledgements and commitment
	 
	(a)  	Enercal acknowledges that it is its intention to endeavour to inform Goro Nickel of any
material event or circumstance which may affect the ability of Enercal to perform its
obligations under this Agreement. For the avoidance of doubt, Goro Nickel acknowledges that
failure by Enercal to comply with this clause 13.6(a) shall not be a material breach of this
Agreement under clause 17.1(a)(iii) (Events of Default).
	 
	(b)  	Enercal shall ensure that the PPA or any alternative arrangement agreed to in writing by Goro
Nickel (such agreement not to be unreasonably withheld where such arrangement will allow
Enercal to continue to perform its obligations under this Agreement) will at all times
continue to be in full force and effect in a form which will allow Enercal to continue to
perform its obligations under this Agreement.

27

 

	13.7  	Notification
	 
	(a)  	Where an event of default occurs under any Project Agreement (other than this Agreement),
Enercal must notify Goro Nickel of the details of such event of default and Enercal’s view of
the effect that such event of default is likely to have on:

	 	(i)  	the ability of Enercal to perform any material obligation under this Agreement;
and
	 
	 	(ii)  	the operation, maintenance or ownership of the Facility.

	(b)  	If Goro Nickel requests further reasonable information in relation to any event of default
referred to in clause 13.7(a), Enercal must procure that such information is promptly provided
to Goro Nickel.
	 
	(c)  	Where Enercal delivers a notice under clause 13.7(a):

	 	(i)  	Enercal and Goro Nickel will meet with a view to defining any action required
from either party to minimise any effect on:

	 	(A)  	Enercal’s ability to perform any material obligation under this
Agreement; or
	 
	 	(B)  	the operation, maintenance or ownership of the Facility,

	 	   	as a result of the event of default detailed in that notice; and
	 
	 	(ii)  	Enercal will use its best endeavours to ensure that Goro Nickel is able to
participate in any discussion with Enercal and/or third parties related to such event
of default.

	(d)  	For the avoidance of doubt, Enercal acknowledges that the rights and obligations of the
Parties under this clause 13.7 are without prejudice to clauses 17.1(b)(ii) and 17.2(b)
(Termination right).
	 
	13.8  	Goro Nickel documentation
	 
	(a)  	Subject to clause 13.8(b), Goro Nickel shall provide Enercal with any existing document
relating to the Nickel Mine project that is determined by Goro Nickel to be reasonably
requested by Enercal and required by Enercal in order to effect the financing of the Facility
under the Finance Documents.
	 
	(b)  	Enercal must procure that the contents of any document provided by Goro Nickel in accordance
with clause 13.8(a) are kept confidential and that any such document is only provided to an
entity that has entered into a form of confidentiality agreement acceptable to Goro Nickel and
to which Goro Nickel is a party and requiring that entity to keep such document and its
contents confidential.
	 
	13.9  	Construction activities at the Nickel Mine
	 
	   	Goro Nickel will, within 30 days after the end of each calendar quarter, provide
Enercal with a report setting out:

	 	(a)  	the construction activities carried out at the Nickel Mine in that quarter;
	 
	 	(b)  	whether those activities were substantially those proposed to be carried out in
that quarter (given brief details of the reasons for any discrepancies); and

28

 

	 	(c)  	the construction activities proposed to be carried out at the Nickel mine in
the next quarter,

	   	in each case in a manner which will enable Enercal to determine whether or not the
condition specified in clause 17.1(c)(i) has been satisfied.

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

29

 

	14.2  	Addition or amendment to electricity generating unit
	 
	(a)  	In the event that any Change in Law requires a material addition to or modification of the
Facility or a modification of the operation of the Facility in order to bring the Facility
into compliance with Applicable Laws (as changed by the Change in Law) (Required Works) and
the Required Works are likely to materially increase Enercal’s costs of complying with its
obligations under this Agreement (and would not otherwise be passed through to Goro Nickel
automatically through the indexation or adjustment of amounts payable by Goro Nickel in
accordance with this Agreement) (Material Adverse Change), then Enercal may within one (1)
Month following the Change in Law giving rise to the Required Works and the Material Adverse
Change give notice (Change Notice) to Goro Nickel setting out, to the extent then available
(having procured the relevant information from Prony where required):

	 	(i)  	the details of the Change in Law, the Required Works (including the period by
which the Required Works must be implemented) and the Material Adverse Change; and
	 
	 	(ii)  	Prony’s and Enercal’s proposed remedial works, programme and budget to carry
out the Required Works including the additional costs associated with making available
Electricity during the period that the Required Works are being implemented.

	(b)  	To the extent that the information required to be delivered in accordance with clause 14.2(a)
is not all available at the time a Change Notice is given pursuant to clause 14.2(a), such
information shall be provided to Goro Nickel as soon as it becomes available.
	 
	(c)  	After receipt of the Change Notice, Goro Nickel shall be entitled to serve a notice on
Enercal requiring Enercal to provide (having procured the relevant information from Prony
where required) further information to support the contents of the Change Notice.
	 
	(d)  	Enercal and Goro Nickel shall, within thirty (30) Days of Enercal’s receipt of the notice
given by Goro Nickel under clause 14.2(c) (or such longer period as is nominated by Goro
Nickel taking into account the Required Works), use reasonable endeavours to agree upon the
remedial works, programme and budget to carry out the Required Works, failing which agreement
either Party shall be entitled to refer any matter which is not agreed to an Expert with
experience in resolving such disputes or disputes of a similar nature. For the avoidance of
doubt, if the Expert is unable to resolve the dispute to the mutual satisfaction of the
Parties, the dispute shall be resolved in accordance with clause 38 (Arbitration).
	 
	(e)  	Following approval or determination of the remedial works, programme and budget to carry out
the Required Works, Enercal shall procure that the Required Works are carried out promptly and
diligently and shall notify Goro Nickel of the date on which the Required Works are complete.
	 
	(f)  	If Enercal does not serve a Change Notice in accordance with clause 14.2(a), Goro Nickel will
not be obliged to compensate Enercal in relation to the Required Works or the Material Adverse
Change.
	 
	(g)  	In each Month from the date of commencement of operation of the Required Works until the
earlier of the end of the Contract Period and end of the weighted average depreciable life of
the Required Works, an amount, CIL, will be included in the Availability Charge for that
Month, where CIL equals:

30

 

	   	
	 
	   	Where:

	 	A   	is half of the total capital costs of implementing the Required Works
(as set out in the agreed or determined budget for the Remedial Works)
(Required Works Cost);
	 
	 	B   	is the total number of Years of weighted average depreciable life of the
Required Works determined in accordance with IAS (as in effect at the time of the
Material Adverse Change);
	 
	 	b   	is B x 12;
	 
	 	I   	is 150 basis points over the rate published by Reuters appearing in the
3rd column on the ISDAFIX2 page entitled “ISDA BENCHMARK RATES”,
corresponding to the fixing at 11.00 a.m. Frankfurt time (on relevant date) the
maturity of which is B x 2/3, rounded to the nearest whole number. If B x 2/3
(rounded to the nearest whole number) falls in between the published periods then I
shall be calculated as 150 basis points over the rate determined by linear
interpolation of the rates published; and
	 
	 	i   	is I/12.

	(h)  	Goro Nickel shall not be obliged to make any further payment in respect of the Required Works
in respect of the period after the Contract Period.
	 
	(i)  	For the avoidance of doubt, the Parties acknowledge that the formula for determining CIL in
clause 14.2(g) will apply only in the circumstances that the Facility comprises two
electricity generating units. If the Facility is expanded in accordance with clause 13.4
(Expansion of Electricity supply obligation), the Parties will meet to determine those
amendments that are required to reflect such expansion in accordance with clause 13.4(b)(iii)
(Expansion of Electricity supply obligation).
	 
	(j)  	If as a result of the Required Works, Enercal would be required to incur additional ongoing
increased operating and maintenance costs which costs would not otherwise be passed through to
Goro Nickel automatically through the indexation or adjustment of amounts payable by Goro
Nickel in accordance with this Agreement (including for the avoidance of doubt in this clause
14.2) and Enercal has taken all reasonable steps to minimise such additional costs, then Goro
Nickel and Enercal shall meet to determine a mechanism to adjust, as appropriate:

	 	(A)  	the ACOM component of the Availability Charge;
	 
	 	(B)  	the Variable Operating and Maintenance Charge; and
	 
	 	(C)  	the Fuel Charge,

	   	or to reimburse Enercal by some other agreed reimbursement mechanism such that in the
Months during the Contract Period in which the adjustment or reimbursement is made, Enercal
shall be able to recover half of the additional operating and maintenance costs which were
directly attributable to the Required Works (but, for the avoidance of doubt, no return
thereon).

31

 

	14.3  	Tax Change in Law
	 
	(a)  	For the purposes of this clause 14.3, Excluded Tax shall mean income tax, corporation tax,
capital tax, dividend tax, branch tax, interest withholding tax or similar tax or deduction.
	 
	(b)  	Subject to clauses 14.3 (c) to (e) inclusive below, in the event that:

	 	(i)  	Enercal incurs material additional costs or savings in performing its
obligations under this Agreement as a result of a Tax Change in Law; and
	 
	 	(ii)  	such costs or savings would not otherwise be passed through to Goro Nickel
automatically through the indexation or adjustment of amounts payable by Goro Nickel in
accordance with this Agreement,

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

32

 

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

33

 

	   	listed in clause 15.3(e), and this Agreement shall prevail in the event of any conflict
between this Agreement and the procedures adopted by the ESA Coordinating Committee.
	 
	(d)  	Without limiting the foregoing, the ESA Coordinating Committee shall not have any authority
to amend this Agreement.
	 
	(e)  	The functions of the ESA Coordinating Committee shall include those functions set out in this
Agreement and the following:

	 	(i)  	defining the internal procedures of the ESA Coordinating Committee; and
	 
	 	(ii)  	establishing day-to-day communication methods, including communications
procedures for the delivery of and payment for Electricity.

	(f)  	For the avoidance of doubt, nothing in this clause 15 can be interpreted as granting any
authority to the ESA Coordinating Committee which would detract from Enercal’s right to make
decisions as a Reasonable and Prudent Operator in carrying out its obligations under this
Agreement.
	 
	16.  	FORCE MAJEURE
	 
	16.1  	Relief from liability
	 
	(a)  	The Parties agree that the provisions of Art. 1148 of the French civil code will not apply to
the provisions of this Agreement. As a result, neither Party shall be relieved from liability
under this Agreement for failure to perform any of its obligations under this Agreement to the
extent that such failure results from or is caused by (a) “force majeure” or (b) “cas fortuit”
as each of those two terms is defined under Art. 1148 of the French civil code
	 
	(b)  	Notwithstanding clause 16.1(a) and subject to the provisions of this clause 16, a Party
shall, except where otherwise specified in this Agreement, be relieved from liability under
this Agreement for breach of any of its obligations under this Agreement if and to the extent
that such a breach results from or is caused by Force Majeure.
	 
	(c)  	For the avoidance of doubt:

	 	(i)  	Goro Nickel’s obligation to pay ACFC in any Month prior to any Extension Period
will not be affected by Force Majeure affecting either Party;
	 
	 	(ii)  	where in any Hour of any Month during the Contract Period, Enercal’s ability to
make available Electricity is affected by Force Majeure (as specified in the Force
Majeure Notice given in respect of the Force Majeure) the provisions of clause 9.2(b)
(Availability factors) will apply; and
	 
	 	(iii)  	where in any Hour of any Month during the Contract Period, Goro Nickel’s
ability to take Electricity made available by Enercal is affected, Goro Nickel’s
obligations to make payment of the Availability Charge in that Month will not be
affected.

	16.2  	Consequences of Force Majeure
	 
	(a)  	Where a Party’s performance of its obligations under this Agreement has been affected by
Force Majeure, that Party shall promptly (and in any event no later than five (5) Days of
becoming aware of the Force Majeure) give a notice to the other Party (Force Majeure Notice).

34

 

	(b)  	A Force Majeure Notice shall (to the extent that such information is reasonably available)
state:

	 	(i)  	a description of the Force Majeure, including the date of the commencement of
the Force Majeure and the extent of such Force Majeure;
	 
	 	(ii)  	the anticipated date of removal of such Force Majeure;
	 
	 	(iii)  	the cause of such Force Majeure;
	 
	 	(iv)  	where Enercal is giving the Force Majeure Notice, the effect that such Force
Majeure has had and will have on:

	 	(A)  	the ability of Enercal to make Electricity available; and
	 
	 	(B)  	Enercal’s daily nominations of Expected Actual Capacity given
in respect of each Hour it has been or expects to be affected by Force Majeure;

	 	(v)  	the steps the Party giving the Force Majeure Notice proposes to take to remove
or mitigate the effects of such Force Majeure on the performance of its obligations
under this Agreement and to mitigate the effects of the non-performance of its
obligations on the other Party as a result of the Force Majeure; and
	 
	 	(vi)  	such other details as may be reasonably requested by the other Party.

	   	To the extent that such information is not reasonably available at the time a Force Majeure
Notice is given pursuant to clause 16.2(a), such information shall be notified to the other
Party as soon as it becomes reasonably available.
	 
	(c)  	Where the Force Majeure Notice indicates that the anticipated date of cessation of the
effects of the Force Majeure on the performance of the affected Party’s obligations under this
Agreement is more than five (5) Days from the commencement of the Force Majeure, the Parties
will meet with a view to:

	 	(i)  	agreeing a plan detailing the steps to be taken by the Party affected by the
Force Majeure to remove or mitigate the effects of such Force Majeure on the
performance of its obligations under this Agreement and to mitigate the effects of the
non-performance of its obligations on the other Party as a result of the Force Majeure
(Force Majeure Plan); or
	 
	 	(ii)  	agreeing that the Force Majeure cannot be remedied or cannot be remedied within
180 Days.

	   	If the Parties cannot reach agreement under clause 16.2(c)(i) or (ii), the Parties
shall submit the dispute to an Expert with experience in resolving such disputes or disputes
of a similar nature. The Expert shall be required to resolve the dispute by:

	 	(iii)  	if the Expert considers that the Force Majeure can be remedied within 180
Days, taking into account the submissions of the Parties and determining the most
effective Force Majeure Plan; or
	 
	 	(iv)  	determining that the Force Majeure cannot be remedied or cannot be remedied
within 180 Days.

35

 

	   	For the avoidance of doubt, if the Expert is unable to resolve the dispute to the
mutual satisfaction of the Parties, the dispute shall be resolved in accordance with clause
38 (Arbitration).
	 
	(d)  	If the Parties agree a Force Majeure Plan or the Expert (or arbitrator) determines a Force
Majeure Plan, the Party whose obligations have been affected by such Force Majeure shall:

	 	(i)  	implement the Force Majeure Plan;
	 
	 	(ii)  	take all other reasonable steps to mitigate the effects of such Force Majeure
on the performance of its obligations under this Agreement and to mitigate the effects
of the non-performance of its obligations on the other Party as a result of the Force
Majeure;
	 
	 	(iii)  	give regular updates to the other Party setting out the progress of the
implementation of the Force Majeure Plan and the likely date or dates on which the
performance of each of its affected obligations will resume; and
	 
	 	(iv)  	resume the performance of such obligations as soon as reasonably practicable
and notify the other Party of such resumption accordingly.

	(e)  	If the Parties do not agree a Force Majeure Plan and agree (or the Expert or arbitrator
determines) that the Force Majeure cannot be remedied or cannot be remedied within 180 Days,
then either Party shall be entitled to terminate this Agreement on written notice to the
other. Upon such termination, subject to clause 16.2(f), neither Party will have any rights or
liabilities under this Agreement other than those under clause 18 (Confidentiality) which
shall continue for a period of five (5) years after such termination. For the avoidance of
doubt, Goro Nickel shall have no right to:

	 	(i)  	terminate this Agreement pursuant to this clause 16.2(e); or
	 
	 	(ii)  	claim that the performance of its obligations under this Agreement are affected
by Force Majeure,

	   	solely on the basis that it is unable to use Electricity which is made available to it by
Enercal on the terms of this Agreement.

	(f)  	If Goro Nickel elects to terminate this Agreement pursuant to clause 16.2(e) (the date of
such termination being the Early Termination Date) Goro Nickel will pay Enercal a termination
payment (the Termination Payment),

	 	(i)  	if the Early Termination Date falls before the twenty-fifth (25th)
anniversary of the Start Date, the amount required to indemnify Enercal for all losses,
damages and reasonable and demonstrable costs suffered by Enercal as a result of the
early termination of this Agreement such amount being equal to the AC Present Value
(calculated as of the Early Termination Date); and
	 
	 	(ii)  	if the Early Termination Date falls after the twenty-fifth (25th)
anniversary of the Start Date, the amount required to indemnify Enercal for all losses,
damages and reasonable and demonstrable costs suffered by Enercal as a result of the
early termination of this Agreement up to twenty per cent. (20%) of the demonstrable
fixed costs of operating and maintaining the second generating unit at the Facility
(calculated as of the Early Termination Date in respect of the period from the Early
Termination Date to the end of the Extension Period in which the Early Termination Date
falls).

36

 

	(g)  	On, or as soon as reasonably practicable after, the Early Termination Date of which notice is
given under clause 16.2(e), Enercal shall in good faith calculate the Termination Payment.
	 
	(h)  	Enercal shall notify Goro Nickel of the Termination Payment including detailed support for
the Termination Payment calculation.
	 
	(i)  	Goro Nickel shall pay the Termination Payment to Enercal within ten (10) Business Days of
invoice or notification of the Termination Payment amount (the Termination Payment Date),
which amount shall bear interest in accordance with clause 10.6 (Late payments).
	 
	(j)  	Enercal may, at its option, set off the Termination Payment against any or all other amounts
owing (whether or not matured, contingent or invoiced) between the Parties under this
Agreement. The right of set off shall be without prejudice and in addition to any right of
set off, combination of accounts, lien, charge or other right to which any Party is at any
time otherwise entitled (whether by operation of law, by contract or otherwise). If an amount
is unascertained, Enercal may reasonably estimate the amount to be set off. The Parties shall
make any adjustment payment required within three (3) Business Days of the amount becoming
ascertained.
	 
	(k)  	Disputed amounts under this clause 16.2 shall be paid by Goro Nickel subject to refund with
interest calculated in accordance with clause 10.6 (Late payments) if the dispute is resolved
in favour of Goro Nickel.
	 
	17.  	TERMINATION
	 
	17.1  	Events of Default
	 
	   	Event of Default means:

	 	(a)  	the occurrence at any time after the Start Date with respect to a Party (the
Defaulting Party) of any of the following events:

	 	(i)  	(Insolvency) the Party:

	 	(A)  	is dissolved or is in a state of ceasing
payments (“état de cessation de paiements”);
	 
	 	(B)  	is subject to a procedure of amicable
settlement (“réglement amiable”) or generally makes a general
assignment, arrangement or composition with or for the benefit of its
creditors;
	 
	 	(C)  	institutes or has instituted against it an
insolvency or liquidation (“redressement ou liquidation judiciaire”)
proceeding or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, that proceeding or petition:

	 	I.  	results in such Party being
declared insolvent (“en état de cessation de paiements”) or
being liquidated or in the making of an order for its
winding-up or liquidation; or
	 
	 	II.  	is not withdrawn, dismissed,
discharged, stayed or restrained in each case within thirty
(30) Days of the institution or presentation of that proceeding
or petition;

37

 

	 	(D)  	has a resolution passed for its dissolution or
liquidation (other than pursuant to a merger);
	 
	 	(E)  	has a secured party take possession of all or
substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or
against all or substantially all its assets and that secured party
maintains possession, or that process is not withdrawn, dismissed,
discharged, stayed or restrained, in each case within thirty (30) Days
of that event;
	 
	 	(F)  	causes or is subject to any event with respect
to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses
17.1(a)(i)(A) to 17.1(a)(i)(E) (inclusive); or
	 
	 	(G)  	takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts referred to in this clause 17.1(a)(i),

	 	   	(each of the foregoing events an Insolvency Event);
	 
	 	(ii)  	(Non-Payment) the Party fails to pay any amount when due and
payable under this Agreement, and that failure is not remedied on or before the
thirtieth (30th) Business Day after the Non-Defaulting Party gives
the Party notice of that failure;
	 
	 	(iii)  	(Material Obligations) the Party, where not affected by Force
Majeure, fails to perform a material obligation or material obligations under
this Agreement (other than an obligation referred to in clause 17.1(a)(ii) or
17.1(b)(i) or an obligation to deliver Electricity), which failure has a
material adverse effect on the rights of the other Party under this Agreement
and that failure is not remedied:

	 	(A)  	within thirty (30) Business Days where the
Defaulting Party cannot demonstrate (within thirty (30) Business Days
following the Non-Defaulting Party giving the Defaulting Party notice
of that failure) to the Non-Defaulting Party’s satisfaction (determined
by the Non-Defaulting Party acting reasonably) that the Defaulting
Party is diligently pursuing a remedy for that failure; or
	 
	 	(B)  	within sixty (60) Business Days (or such other
period of time agreed by the Non-Defaulting Party) where the Defaulting
Party demonstrates (within thirty (30) Business Days following the
Non-Defaulting Party giving the Party notice of that failure) to the
Non-Defaulting Party’s satisfaction (determined by the Non-Defaulting
Party acting reasonably) that the Defaulting Party is diligently
pursuing a remedy for that failure;

	 	(b)  	the occurrence at any time with respect to Enercal (the Defaulting Party) of
any of the following events:

	 	(i)  	(Insurance) any insurance which is agreed to be required under
this Agreement, or which is required under Applicable Laws, to be effected and
maintained by Enercal is not so effected and maintained, becomes voidable

38

 

	 	   	(whether for lack of disclosure, breach of condition or otherwise) or is
cancelled and:

	 	(A)  	Enercal cannot demonstrate to Goro Nickel’s
satisfaction that Enercal is diligently pursuing a remedy for such
failure; or
	 
	 	(B)  	Enercal demonstrates to Goro Nickel’s
satisfaction that Enercal is diligently pursuing a remedy for that
failure and such failure is not remedied on or before the thirtieth
(30th) Business Day following such failure;

	 	(ii)  	(Default) the occurrence of any event of default (save to the
extent that such event of default is caused by Goro Nickel) under any Project
Agreement (other than this Agreement):

	 	(A)  	which is notified by Enercal to Goro Nickel
under clause 13.7 (Notification); or
	 
	 	(B)  	which ought to have been notified by Enercal to
Goro Nickel under clause 13.7 (Notification),

	 	   	which has not been waived by each non-defaulting party to that Project
Agreement and any non-defaulting party indicates that it intends to, or
actually seeks to, initiate any form of enforcement proceeding under such
Project Agreement which:

	 	(A)  	Enercal agrees;
	 
	 	(B)  	Goro Nickel demonstrates; or
	 
	 	(C)  	an Expert determines,

	 	   	will adversely affect:

	 	(A)  	the ability of Enercal to perform any material
obligation under this Agreement; or
	 
	 	(B)  	the operation, maintenance or ownership of the
Facility where such effect may have a material effect on Goro Nickel’s
rights under this Agreement; and

	 	(iii)  	(Level Three Disruption Process) a Level Three Disruption
Process is Unsuccessful;
	 
	 	(iv)  	(Two Level Three Disruption Processes in 12 months) a Level
Three Disruption Process is Successful but another Level Three Disruption
Process occurs within 12 months thereafter;
	 
	 	(v)  	(Prevention of Disruption Process) Enercal or Prony wilfully
prevent the implementation of a Disruption Process;
	 
	 	(vi)  	(Representation or Warranty) any representation or warranty
made by Enercal in clause 19 (Representations and Warranties) of this
Agreement proves to have been false or misleading at the time it was made in a
way that

39

 

	 	   	materially adversely affects the rights of Goro Nickel under this Agreement
unless remedied to the satisfaction of Goro Nickel;
	 
	 	(vii)  	(Credit Support) any Credit Support Document relating to
Enercal’s obligations under this Agreement expires or terminates or fails or
ceases to be in full force and effect for the purposes of this Agreement (in
any case other than in accordance with its terms where, if so required by this
Agreement, a replacement is immediately provided) prior to the satisfaction of
all obligations of Enercal under this Agreement without the written consent of
Goro Nickel; and
	 
	 	(viii)  	(Force Majeure) Enercal fails to comply with any Force Majeure Plan agreed
between the Parties or determined by an Expert (or arbitrator); and

	 	(c)  	(Abandonment) at any time prior to the date of Definitive Acceptance, (i) Goro
Nickel (the (Defaulting Party) voluntarily ceases to perform all or substantially all
construction activities of the Nickel Mine without interruption for a period of 180
days, (ii) Enercal has issued (at the end of such period) a notice requesting a
certificate from Goro Nickel to the effect that Goro Nickel intends to resume or cause
to be resumed all or substantially all such construction activities and (iii) Goro
Nickel has either not delivered such a certificate within 180 days of receipt of such
notice from Enercal or, having so delivered such a certificate, Goro Nickel has not
resumed all or substantially all construction activities at the Nickel Mine within a
period of 180 days of the date of such certificate. For the purposes of this clause
17.1(c), Goro Nickel shall be deemed not to have voluntarily ceased to perform
construction activities at the Nickel Mine if such cessation:

	 	(A)  	is caused by Goro Force Majeure;
	 
	 	(B)  	is directly caused by a failure by Prony or
Enercal to perform any of their obligations under the Project
Agreements or otherwise by an absence of power or water and provided
that such failure or absence is not caused by Goro Nickel;
	 
	 	(C)  	is at a time that either Enercal or Prony is
affected by an Insolvency Event provided that such Insolvency Event has
not been caused by Goro Nickel; or
	 
	 	(D)  	follows an abandonment of the Facility by Prony
regardless of the cause of such abandonment provided that such
abandonment was not caused by Goro Nickel;

	 	(d)  	the occurrence at any time with respect to Goro Nickel (the Defaulting Party)
of any of the following events:

	 	(i)  	(Prevention of Disruption Process) once a Disruption Process
has been initiated, Goro Nickel wilfully prevents the implementation of the
same;
	 
	 	(ii)  	(Representation or Warranty) any representation or warranty
made by Goro Nickel in clause 19 (Representations and Warranties) of this
Agreement proves to have been false or misleading at the time it was made in a
way that materially adversely affects the rights of Enercal under this
Agreement unless remedied to the satisfaction of Enercal;

40

 

	 	(iii)  	(Credit Support) any Credit Support Document relating to Goro
Nickel’s obligations under this Agreement expires or terminates or fails or
ceases to be in full force and effect for the purposes of this Agreement (in
any case other than in accordance with its terms where, if so required by this
Agreement, a replacement is immediately provided) prior to the satisfaction of
all obligations of Enercal under this Agreement without the written consent of
Enercal; and
	 
	 	(iv)  	(Force Majeure) Goro Nickel fails to comply with any Force
Majeure Plan agreed between the Parties or determined by an Expert (or
arbitrator).

	   	If an Expert is to be selected to make a determination in accordance with clause
17.1(b)(ii) (Default), then the reference to twenty-one (21) Business Days in the definition
of Expert in clause 1.1 (Definitions) will be deemed to be two (2) Business Days.
	 
	17.2  	Termination right
	 
	(a)  	If, at any time, an Event of Default (other than an Event of Default under clause 17.1(b)(ii)
(Default)) has occurred and is continuing, the Non-Defaulting Party may designate a Business
Day as an early termination date with respect to this Agreement (the Early Termination Date)
by giving not less than thirty (30) Days’ notice to the Defaulting Party. This notice shall
specify the relevant Event of Default.
	 
	(b)  	If, at any time, an Event of Default under clause 17.1(b)(ii) (Default) has occurred, the
Non-Defaulting Party may designate a Business Day as an early termination date with respect to
this Agreement (the Early Termination Date) by giving notice to the Defaulting Party. This
notice shall specify the relevant Event of Default.
	 
	(c)  	The rights under clauses 17.2(a) and 17.2(b) are in addition to any other remedies available
under this Agreement or at law.
	 
	17.3  	Early Termination Date
	 
	   	If notice designating an Early Termination Date is given under clause 17.2 (Termination
right), the Early Termination Date will occur on the date so designated unless the
circumstances giving rise to the Event of the Default are no longer continuing on the Early
Termination Date.
	 
	17.4  	Termination Payment
	 
	(a)  	On, or as soon as reasonably practicable after, the Early Termination Date of which notice is
given under clause 17.2, the Non-Defaulting Party shall in good faith calculate the
termination payment (the Termination Payment), in accordance with this clause 17.4.
	 
	(b)  	Where Enercal is the Defaulting Party, the Termination Payment will be the amount required to
indemnify Goro Nickel for all losses, damages and reasonable and demonstrable costs suffered
by Goro Nickel as a result of the early termination of this Agreement such amount not to
exceed the Applicable Cap. The Applicable Cap is 20,000,000 Dollars if the Early Termination
Date occurs as a result of Enercal’s wilful disregard of Goro Nickel’s need to have
Electricity and 10,000,000 Dollars in any other case.
	 
	(c)  	Where Goro Nickel is the Defaulting Party, then:

	 	(i)  	the Termination Payment will be:

41

 

	 	(A)  	if the Early Termination Date falls before the Start Date, the
amount required to indemnify Enercal for all losses, damages and reasonable and
demonstrable costs suffered by Enercal as a result of the early termination of
this Agreement up to the amount determined as at the Early Termination Date in
accordance with the payment schedule set out in Annex 1 of the Inco Guarantee
in place as at the Early Termination Date;
	 
	 	(B)  	if the Early Termination Date falls on or after the Start Date
but before the twenty-fifth (25th) anniversary of the Start Date,
the amount required to indemnify Enercal for all losses, damages and reasonable
and demonstrable costs suffered by Enercal as a result of the early termination
of this Agreement such amount (the Goro Nickel Termination Payment) being equal
to the AC Present Value (calculated as of the Early Termination Date); and
	 
	 	(C)  	if the Early Termination Date falls after the twenty-fifth
(25th) anniversary of the Start Date, the amount required to
indemnify Enercal for all losses, damages and reasonable and demonstrable costs
suffered by Enercal as a result of the early termination of this Agreement up
to twenty per cent. (20%) of the demonstrable fixed costs of operating and
maintaining the second generating unit at the Facility (calculated as of the
Early Termination Date in respect of the period from the Early Termination Date
to the end of the Extension Period in which the Early Termination Date falls);

	 	(ii)  	any payment of or on account of a Termination Payment made under any Inco
Guarantee shall constitute pro tanto satisfaction of Goro Nickel’s obligation to pay
such Termination Payment;
	 
	 	(iii)  	where clause 17.4(c)(i)(A) or (C) above applies, Enercal will use all
reasonable endeavours to minimise the amount of its losses, damages and costs; and
	 
	 	(iv)  	where clause 17.4(c)(i)(A) applies and the amount paid under the relevant Inco
Guarantee exceeds the actual amount of Enercal’s losses, damages and costs, Enercal
will pay an amount equal to the excess to Goro Nickel within 30 days of such actual
amount being finally agreed between the Parties or in the absence of agreement
determined in accordance with clause 38 (Arbitration).

	(d)  	The Non-Defaulting Party shall notify the Defaulting Party of the Termination Payment
including detailed support for the Termination Payment calculation.
	 
	(e)  	The Defaulting Party shall pay the Termination Payment to the Non-Defaulting Party within ten
(10) Business Days of invoice or notification of the Termination Payment amount (the
Termination Payment Date), which amount shall bear interest in accordance with clause 10.6
(Late payments).
	 
	(f)  	The Non-Defaulting Party may, at its option, set off the Termination Payment against any or
all other amounts owing (whether or not matured, contingent or invoiced) between the Parties
under this Agreement. The right of set off shall be without prejudice and in addition to any
right of set off, combination of accounts, lien, charge or other right to which any Party is
at any time otherwise entitled (whether by operation of law, by contract or otherwise). If an
amount is unascertained, the Non-Defaulting Party may reasonably estimate the amount to be set
off. The Parties shall make any adjustment payment required within three (3) Business Days of
the amount becoming ascertained.

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	(g)  	Disputed amounts under this clause 17.4 shall be paid by the Defaulting Party subject to
refund with interest calculated in accordance with clause 10.6 (Late payments) if the dispute
is resolved in favour of the Defaulting Party.
	 
	(h)  	The rights and obligations of the Parties under this clause 17.4 shall survive termination of
this Agreement.
	 
	17.5  	Reimbursement of Termination Payment
	 
	(a)  	If Goro Nickel makes a Termination Payment (or a Termination Payment is made on Goro Nickel’s
behalf pursuant to a Credit Support Document) following an Early Termination Date in
accordance with this clause 17 or clause 16, Enercal must use its best endeavours to operate
the Enercal System in a manner that will allow any reimbursement of the Termination Payment
paid by Goro Nickel (or on Goro Nickel’s behalf pursuant to a Credit Support Document) to be
maximised in accordance with clause 17.5(b) up to the amount of the Termination Payment.
	 
	(b)  	If, in respect of any Hour from the Early Termination Date referred to in clause 17.5(a)
until the end of the Contract Period:

	 	(i)  	the Transmission Metering System records that electricity in excess of 50,000kW
was delivered to the Transmission System in that Hour; and
	 
	 	(ii)  	the full amount of the Termination Payment has not already been fully accrued,

	 	   	then Goro Nickel shall be entitled to a Reimbursement Credit in respect of any such
excess electricity so recorded (Reimbursement Credit Electricity). For the purposes of
this clause 17.5 only, the end of the Contract Period will be determined as if the
Early Termination Date had not occurred and will be:

	 	(A)  	if the Early Termination Date does not fall within an Extension
Period, the 25th anniversary of the Start Date; or
	 
	 	(B)  	if the Early Termination Date falls within an Extension Period,
the date of expiration of that Extension Period.

	(c)  	The Reimbursement Credit in any Month m, RCRm, will be calculated as follows:
	 
	   	RCRm = The Reimbursement Credit Amount x the amount of Reimbursement Credit
Electricity (measured in units of kWh) recorded by the Transmission Metering System in Month
m.
	 
	(d)  	Any entitlement to a Reimbursement Credit pursuant to this clause 17.5 in respect of any
Month will be payable by Enercal to Goro Nickel by the fifteenth (15th) Business
Day of the following Month.
	 
	(e)  	This clause 17.5 shall survive termination of this Agreement.
	 
	18.  	CONFIDENTIALITY
	 
	(a)  	The Parties shall treat the terms of this Agreement and all information provided under or in
connection with this Agreement (Confidential Information) as confidential and shall not
disclose Confidential Information without the prior written consent of the other Party, save
that consent shall not be required for disclosure:

43

 

	 	(i)  	to directors, employees or Affiliates of a Party, provided that they in turn
are required by that Party to treat the Confidential Information as confidential in
favour of the other Party on terms substantially the same as those set out in this
clause 18;
	 
	 	(ii)  	to persons professionally engaged by a Party to the extent required in relation
to such engagement, provided that they in turn are required by that Party to treat the
Confidential Information as confidential in favour of the other Party on terms
substantially the same as those set out in this clause 18;
	 
	 	(iii)  	to the extent required by any Competent Authority having jurisdiction over
that Party;
	 
	 	(iv)  	to any bank, other financial institution or rating agency to the extent
required in relation to the financing of a Party’s business activities, provided that
the bank, or other financial institution or rating agency, as the case may be, is
required by that Party to treat the Confidential Information as confidential in favour
of the other Party on terms substantially the same as those set out in this clause 18;
	 
	 	(v)  	to the extent required by any Applicable Law, judicial process or the rules and
regulations of any recognised stock exchange, or to any Expert or arbitrator to the
extent necessary for the resolution of any dispute arising under this Agreement;
	 
	 	(vi)  	to any intending assignee of the rights and interests of a Party under this
Agreement or to a person intending to acquire an interest in a Party or that Party’s
Affiliate provided that the intending assignee or acquirer in turn is required by that
Party to treat the Confidential Information as confidential in favour of the other
Party on terms substantially the same as those set out in this clause 18; and
	 
	 	(vii)  	to the extent that the Confidential Information is in or lawfully comes into
the public domain other than by breach of this clause 18.

	(b)  	The rights and obligations of the Parties under this clause 18 shall survive termination of
this Agreement and shall continue for a period of five (5) years after such termination.
	 
	19.  	REPRESENTATIONS AND WARRANTIES
	 
	   	Each Party represents and warrants to the other Party that, (save in the case of clause
19(d)) as of the date of this Agreement and (in the case of clause 19(d)) as of the date
that Electricity is first required to be delivered under this Agreement:

	 	(a)  	(Status) it is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation (and, if relevant under those laws,
in good standing);
	 
	 	(b)  	(Power) it has the power:

	 	(i)  	to execute this Agreement and any other documentation relating
to this Agreement to which it is a party;
	 
	 	(ii)  	to deliver this Agreement and any other documentation relating
to this Agreement that it is required by this Agreement to deliver; and
	 
	 	(iii)  	to perform its obligations under this Agreement and has taken
all necessary action to authorise that execution, delivery and performance;

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	 	(c)  	(No Violation or Conflict) the execution, delivery and performance referred to
in clause 19(b) do not violate or conflict with any law applicable to it, any provision
of its constitutional documents, any order or judgment of any court or other Competent
Authority applicable to it or any of its assets or any contractual restriction binding
on or affecting it or any of its assets;
	 
	 	(d)  	(Required Authorisations) all governmental and other licences, authorisations,
permits, consents, contracts and other approvals (if any) that are required to enable
the Party to fulfil any of its obligations under this Agreement which it is required to
perform on the date that Electricity is first required to be delivered under this
Agreement (Required Authorisations) have been obtained and are in full force and effect
and all conditions of any Required Authorisations have been complied with;
	 
	 	(e)  	(Obligations Binding) its obligations under this Agreement constitute its
legal, valid and binding obligations, enforceable in accordance with their respective
terms subject to applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors’ rights generally and subject, as to enforceability,
to equitable principles of general application (regardless of whether enforcement is
sought in a proceeding in equity or at law);
	 
	 	(f)  	(No Event of Default) no Event of Default, or event which with notice and/or
lapse of time would constitute an Event of Default, has occurred with respect to it and
no such event would occur as a result of its entering into or performing its
obligations under this Agreement;
	 
	 	(g)  	(No Litigation) no litigation, arbitration or administrative suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency, official
or arbitrator is pending or, so far as it is aware, threatened against it which would
result in a material adverse change in such Party’s financial condition or its ability
to perform its obligations under this Agreement, or that is likely to affect the
legality, validity or enforceability against it of this Agreement;
	 
	 	(h)  	(No Reliance) it is not relying upon any representations of the other Party
other than those expressly set out in this Agreement;
	 
	 	(i)  	(Principal) other than in the case of Goro Nickel acting through and on behalf
of its New Caledonian branch, it has negotiated, entered into and executed this
Agreement as principal (and not as agent or in any other capacity, fiduciary or
otherwise);
	 
	 	(j)  	(Risk Assumption) it has entered into this Agreement with a full understanding
of the material terms and risks of this Agreement and it is capable of assuming those
risks; and
	 
	 	(k)  	(No Advice) the other Party is not acting as a fiduciary or an adviser for it,
nor has the other Party given to it any advice, representation, assurance or guarantee
as to the expected performance, benefit or result of this Agreement.

	20.  	PERMITS AND OTHER APPROVALS
	 
	20.1  	Responsibility for Permits and Other Approvals

	 	(a)  	Without prejudice to clause 20.2 (Assistance with obtaining and maintaining
Permits and Other Approvals) Enercal shall be solely and fully responsible for
obtaining and

45

 

	 	   	maintaining all Permits and Other Approvals necessary for carrying out its
obligations under this Agreement.
	 
	 	(b)  	For the avoidance of doubt, any failure or refusal of a third party to issue a
Permit or Other Approval will not be an Excusing Factor for the purposes of this
Agreement and will not relieve Enercal from any obligation under this Agreement to
obtain such Permit or Other Approval.

	20.2  	Assistance with obtaining and maintaining Permits and Other Approvals
	 
	   	Upon receiving a written request from Enercal so to do, Goro Nickel shall take such
steps as are reasonable in the circumstances to assist Enercal to obtain and/or maintain any
of the Permits and any Other Approval provided that, where Enercal makes any such request of
Goro Nickel, Enercal shall:

	 	(a)  	prior to the date upon which its request to Goro Nickel in accordance with this
clause 20.2 is submitted, have done all such things as it is reasonable for Enercal,
acting as a Reasonable and Prudent Operator, to have done and as are necessary to
obtain and/or maintain any Permit or Other Approval which is the subject of such
request;
	 
	 	(b)  	notwithstanding the making of a request of Goro Nickel in accordance with this
clause 20.2, continue diligently to pursue the grant and/or the maintenance of any
Permit or Other Approval which is the subject of such a request;
	 
	 	(c)  	at the same time that it submits its request to Goro Nickel, disclose to Goro
Nickel full details of the steps which Enercal has, prior to the date of the written
request, taken to obtain and/or maintain the Permit or Other Approval which is the
subject of the request and of the steps it is continuing to take with respect to the
grant and/or maintenance of such Permit or Other Approval;
	 
	 	(d)  	provide Goro Nickel with such assistance and information as Goro Nickel may
reasonably request in connection with Enercal’s request; and
	 
	 	(e)  	bear all costs relating to the obtaining and/or maintaining of any Permit or
Other Approval and shall indemnify Goro Nickel in respect of the same.

	21.  	ASSIGNMENT
	 
	21.1  	Prohibition of assignment
	 
	   	Subject to clause 21.2 (Assignment by way of security), neither Party shall assign or
transfer to any person any of its rights or obligations in respect of this Agreement
(including, for the avoidance of doubt, as part of any statutory merger or “fusion”) without
the written consent of the other Party (which consent shall not be unreasonably withheld or
delayed).
	 
	21.2  	Assignment by way of security
	 
	   	Either Party may assign its rights under this Agreement by way of security to or in
favour of any bank or financial institution in relation to the financing of that Party’s
business activities.
	 
	22.  	LIABILITIES
	 
	22.1  	Consequential Loss

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	   	Except as specifically provided in this Agreement, neither Party shall be liable to the
other Party for any matter arising out of or in connection with this Agreement in respect of
any Consequential Loss suffered by the other Party.
	 
	22.2  	Limitation on liability
	 
	(a)  	Subject to clause 22.2(b), the liability of each Party to the other for breach of this
Agreement (including for the avoidance of doubt, any liability to pay an Availability Penalty)
is limited to an amount of four million (4,000,000) Euros per year (as such amount will be
adjusted each year from the date of this Agreement in accordance with the Agreed Index).
	 
	(b)  	The annual limit referred to clause 22.2(a) shall not apply to:

	 	(i)  	any indemnity under clause 20 or clause 24 of this Agreement;
	 
	 	(ii)  	any amounts payable on a termination of this Agreement; and
	 
	 	(iii)  	any amount payable in accordance with clause 4.1(b) (such amounts being
limited, for the avoidance of doubt, to the amount set out in clause 4.1(b)).

	22.3  	Reasonable pre-estimate
	 
	   	Each Party acknowledges that the payment obligations in clauses 4 (Funnel Mechanism)
and 9 (Adjustments) are reasonable in light of the anticipated harm and the difficulty of
estimation or calculation of actual damages upon early termination of this Agreement or upon
the other events referred to in those provisions. Each Party waives the right to contest
those payments as an unreasonable penalty.
	 
	23.  	INSURANCE
	 
	23.1  	Insurance policies
	 
	(a)  	Subject to clause 23.1(b), Enercal shall or shall procure that its Affiliate shall, at its
sole cost and expense, effect and maintain on a primary and non-contributory basis the
insurance policies and the levels of deductibles described in schedule 10 (Insurance) in the
amounts and on the terms provided herein and therein with insurers deemed acceptable by Goro
Nickel (acting reasonably); provided, however, that such amounts and terms may be changed from
time to time with the prior written consent of Goro Nickel, which consent shall not be
unreasonably withheld. Nothing shall prevent Enercal, at its costs and expense, and for its
exclusive benefit, from procuring insurance coverage in addition to the minimum coverages
specified in schedule 10 (Insurance). Prior to placing the initial insurance policies
described in schedule 10 (Insurance) Enercal shall obtain Goro Nickel approval of such
policies.
	 
	(b)  	Enercal shall not be required to effect and maintain any insurance policy which is
Unavailable.
	 
	(c)  	If any insurance policy described in schedule 10 (Insurance) and required to be effected and
maintained by Enercal is not so effected and maintained, becomes voidable (whether for lack of
disclosure, breach of condition or otherwise) or is cancelled, Enercal will notify Goro Nickel
of such occurrence. Upon receipt of such notice, Goro Nickel will, at Enercal’s expense, use
reasonable endeavours to assist Enercal to effect and maintain the required insurance policy.
For the avoidance of doubt, while Goro Nickel continues to assist Enercal in accordance with
this clause, Enercal will not be a Defaulting Party for the purposes of clause 17.1(b)(i)
(Events of Default).

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	23.2  	Endorsements
	 
	(a)  	Enercal shall cause its insurers to provide the following endorsement items in its
comprehensive or commercial general liability insurance policies:

	 	(i)  	Goro Nickel, Inco Australia Management Limited and Inco and the employees of
each of them shall be additional insured under such policies;
	 
	 	(ii)  	the insurance shall be primary with respect to the interest of the employees of
each of Goro Nickel, Inco Australia Management Limited and Inco and any other insurance
maintained by them is excess and not contributory with such policies;
	 
	 	(iii)  	such policies shall include standard cross liability clauses; and
	 
	 	(iv)  	notwithstanding any provision of the policies, the policies may not be
cancelled, non-renewed or materially changed by the insurer without the insurer giving
thirty (30) Days’ prior written notice or in the case of cancellation for non-payment
of any premium, thirty (30) Days’ prior written notice to the insured party.

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

48

 

	   	account of injury, bodily or otherwise, to, or death of, persons or for damages to, or
destruction of, property, in each case resulting from, arising out of, or in connection
with, such indemnifying Party’s negligence or wilful misconduct.
	 
	25.  	WAIVER
	 
	   	No waiver by either Party of any breach by the other of this Agreement shall operate
unless expressly made in writing, and any such waiver shall not be construed as a waiver of
any other breach.
	 
	26.  	VARIATION
	 
	   	No variation to the provisions of this Agreement shall be valid unless it is in writing
and signed by each Party.
	 
	27.  	ENTIRE AGREEMENT
	 
	(a)  	This Agreement constitutes the entire agreement and understanding of the Parties with respect
to its subject matter and supersedes and extinguishes any agreements, understandings and/or
representations previously given or made with respect thereto other than those included in
this Agreement, provided that nothing in this clause 27 shall limit or exclude any liability
for fraud in relation to those agreements, understandings and/or representations.
	 
	(b)  	For the avoidance of doubt, notwithstanding clause 27(a), the terms of the General Agreement
continue to apply to the extent such provisions are expressed to survive execution of this
Agreement.
	 
	28.  	SEVERABILITY
	 
	   	The provisions contained in each clause of this Agreement shall be enforceable
independently of each of the others and their validity shall not be affected if any of the
others are invalid. If any of those provisions is void but would be valid if some part of
the provision were deleted, the provision in question shall apply with such modification as
may be necessary to make it valid.
	 
	29.  	NOTICES
	 
	29.1  	Address for notices
	 
	   	Any notice or other formal communication given under this Agreement must be in writing
(which, for the purposes of this clause 29, includes fax, but not electronic mail) and may
be delivered or sent by post or fax to the Party to be served at its address as follows:

	 	(a)  	to Enercal at:
	 
	 	   	87 avenue du Général de Gaulle

98800 Nouméa, New Caledonia
	 
	 	   	Fax: +687 250 253

Marked for the attention of

Directeur Général

	 	(b)  	to Goro Nickel at:
	 
	 	   	38 rue du Colisee

75008, Paris, France
	 
	 	   	Fax: +33 1 45 63 29 97

Marked for the attention of the

Directeur General Délégué
	 
	 	   	And copied to:

49

 

	 	   	7 bis, rue Suffren, BP218

98845 Nouméa Cedex, New Caledonia
	 
	 	   	Fax: +687 273 710

Marked for the attention of the

Président Directeur General
	 
	 	   	And also copied to:
	 
	 	   	Inco Limited

145 King Street West,

Toronto, ON, M5H 4B7
	 
	 	   	Fax: +1 41 6361 7788

Marked for the attention of Office of

the Secretary

	   	or at such other address or fax number as it may have notified to the other Party in
accordance with this clause 29. Any notice or other document sent by post shall be sent by
registered mail with return receipt requested (if within New Caledonia) or by registered
airmail with return receipt requested (if elsewhere).
	 
	29.2  	Delivery of notices
	 
	   	Any notice or other formal communication shall be deemed to have been given:

	 	(a)  	if hand delivered, at the time of delivery;
	 
	 	(b)  	if posted, by registered mail with return receipt requested (courrier
recommandé avec accusé de reception), at 10.00 a.m. on the second (2nd)
Business Day after it was put into the post;
	 
	 	(c)  	if posted by registered airmail with return receipt requested, at 10.00 a.m. on
the tenth (10th) Business Day after it was put into the post; or
	 
	 	(d)  	if sent by fax, on the Day of transmission, if transmitted before 3.00 p.m. on
any Business Day, and in any other case on the Business Day following the date of
transmission.

	29.3  	Proof of service
	 
	   	In proving service of a notice or other formal communication, it shall be sufficient to
prove that delivery was made or that the envelope containing the communication was properly
addressed and posted either by registered mail with return receipt requested (courrier
recommandé avec accusé de reception) or by registered airmail with return receipt requested
(as the case may be) or that the fax was properly addressed and transmitted.
	 
	30.  	FURTHER ASSURANCE
	 
	   	Each Party shall upon request, at its own expense, at all times from the date of this
Agreement do or procure the doing of all things as may be required to give full effect to
this Agreement, including the execution or provision of all deeds and documents.

50

 

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

51

 

	   	period that the Dispute is of a technical nature (a Technical Dispute), an Expert shall be
appointed and the Technical Dispute shall be referred to an independent Expert with
experience in resolving such Technical Disputes or Technical Disputes of a similar nature
for determination.
	 
	37.3  	Role of Expert
	 
	   	The Expert appointed under clause 37.2 (Referral to Expert) shall act on the following
basis:

	 	(a)  	on his or her appointment, the Expert shall confirm his or her neutrality,
independence and the absence of conflicts in determining the Technical Dispute;
	 
	 	(b)  	the Expert shall comply with the terms of this Agreement and shall act as an
expert and not as an arbitrator;
	 
	 	(c)  	if the ESA Coordinating Committee has selected the Expert, the Expert’s
determination shall (in the absence of manifest error) be final and binding on the
Parties and not subject to appeal (unless expressly stated otherwise in this
Agreement);
	 
	 	(d)  	the Expert shall decide the procedure to be followed in the determination in
accordance with this Agreement and in consultation with the Parties and shall be
requested to make his or her determination in writing within twenty-five (25) Business
Days after his or her appointment or as soon as practicable thereafter;
	 
	 	(e)  	any amount payable by either Party to the other as a result of the Expert’s
determination shall be due and payable within five (5) Business Days of the Expert’s
determination being notified to the Parties. Any action required by the Expert as a
result of the Expert’s determination shall be implemented within ten (10) Business
Days following the Expert’s determination being notified to the Parties or as specified
within the determination; and
	 
	 	(f)  	the Expert shall decide how and by whom the costs of the determination,
including the fees and expenses of the Expert (but excluding the Parties’ own costs
which shall be borne by the Party incurring those costs) (the Costs), are to be paid.
Pending the Expert’s decision as to the Costs of the determination, the Costs shall be
borne equally by the Parties.
	 
	 	(g)  	For the avoidance of doubt, if the ESA Coordinating Committee has not selected
the Expert, a Party may refer any Technical Dispute which is not resolved to its
satisfaction to arbitration as a Dispute to be conducted in accordance with clause 38
(Arbitration).

	38.  	ARBITRATION
	 
	38.1  	Dispute
	 
	   	The Parties shall use reasonable efforts to resolve any Dispute through negotiations.
Either Party may at any time refer a Dispute to one senior executive from each of Enercal
and Goro Nickel by giving a notice to the other that such Party desires a Dispute to be
decided by executives under this clause 38. Upon receipt of such notice of referral, the
executives of the Parties shall meet and attempt to resolve any such Dispute. If the
executives fail to resolve the Dispute within thirty (30) Days after such Dispute is
referred to them, then, except as otherwise provided in this Agreement, such Dispute shall
be finally and exclusively settled by

52

 

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

53

 

SCHEDULE 1

AVAILABILITY CHARGE

1. Availability Charge prior to any Extension Period

The Availability Charge for Month m prior to any Extension Period shall be calculated as
follows:

ACm = (ACOMm + ACFC + CIL) - ARm

Where:

	 	 	 
	ACm

	 	Availability Charge for Month m in Euro
	 
	 	 
	ACFC

	 	1,103,728.41 Euros
	 
	 	 
	ACOMm

	 	Fixed Operation and Maintenance Charge Rate for Month m in Euro
	 
	 	 
	ARm

	 	Availability Reduction
	 
	 	 
	CIL

	 	The amount determined in accordance with clause 14.2(g) (if any)

The Fixed Operation and Maintenance Charge Rate for Month m shall be calculated as follows:

ACOMm = 147,114.49 Euros + (198,071.01 Euros x
INDEXLABm/INDEXLABb) + (116,735.94 Euros x
INDEXMTCm/INDEXMTCb) + (91,236.27 Euros x
INDEXGENm/INDEXGENb)

Where:

INDEXLAB = the Agreed Index for labour component of ACOMm;

INDEXMTC = the Agreed Index for maintenance and material component of
ACOMm;

INDEXGEN = the Agreed Index for general component of ACOMm;

INDEXLABm = INDEXLAB in Month m;

INDEXLABb = INDEXLAB as at the date of this Agreement;

INDEXMTCm = INDEXMTC in Month m;

INDEXMTCb = INDEXMTC as at the date of this Agreement;

INDEXGENm = INDEXGEN in Month m; and

INDEXGENb = INDEXGEN as at the date of this Agreement,

however, if in any Hour of any Month m during the Contract Period, Enercal’s ability to make
available Electricity is affected by Force Majeure (as specified in the Force Majeure Notice given
in respect of that Force Majeure) (Force Majeure Hour), then ACOM in that Month m will be reduced
by the proportion being the number of Force Majeure Hours in that Month divided by the total number
of Hours in that Month.

The Availability Reduction, ARm, shall be calculated as follows:

54

 

ARm = ADm x (ACOMm + ACFC +CIL)/ Sum of Target Net Capacity
for each Hour in that Month m.

Where:

	 	 	 
	ADm
	 	The sum of TMSh in respect of each Hour of Month m.

	 
	 	 

	TMSh
	 	In respect of any Hour is (Target Net Capacity for that Hour - Actual Capacity for that
Hour) (which amount if negative will be equal to nil (0)).

2. Availability Charge during any Extension Period

The Availability Charge for Month m during any Extension Period shall be calculated as
follows:

ACm = ACOMm x 1.20 — AREPm + CIL

Where:

AREPm = ADm x (ACOMm x 1.20)/ Target Monthly Availability

However, if AREPm is nil in any Month during any Extension Period then ACm
= ACOMm x 1.25.

55

 

SCHEDULE 2

FUEL CHARGE AND VARIABLE OPERATION AND MAINTENANCE CHARGE

SECTION A: FUEL CHARGE:

The Fuel Charge for Month m shall be calculated as follows:

$ECFCm = EDm  x Cmcoal x HRCm  + $ADJHFO

Where:

	 	 	 	 	 
	EDm:	 	The sum of Electricity Delivered during each Hour in Month m
(as measured by the Metering System) in kWh
	 
	 	 	 	 

	Cmcoal:	 	is the cost of Coal + cost of shipping in
month m in Dollars per thousand Joules($/kJ).
	 
	 	 	 	 

	 	 	Where:
	 	 

	 
	 	 	 	 

	 	 	Cmcoal = (Pmcoal + SRm )/SEmcoal
	 
	 	 	 	 

	 	 	SEmcoal
	 	Specific energy of Coal in Month m expressed in kJ/tonnes, which
value cannot be less than 25 300 kJ/tonnes pursuant to schedule 5 (Coal
Specification).

	 
	 	 	 	 

	 	 	Pmcoal
	 	Price of Coal for Month m in Dollars per tonne as
defined in the relevant Coal Purchase Agreement (as defined in the Utilities
and Services Agreement) corrected in accordance with section C of this schedule 2.

	 
	 	 	 	 

	 	 	SRm
	 	Shipping rate in Month m $US/tonne defined in the relevant Coal
shipping contract corrected in accordance with section C of this schedule 2.

	 
	 	 	 	 

	HRCm	 	Heat Rate Coefficient (efficiency of converting thermal energy to
electrical energy) for Month m in kJ/kWh calculated as follows:
	 
	 	 	 	 

	 	 	HRCm = HRCb x DF x PLAFm
	 
	 	 	 	 

	 	 	Where:
	 	 

	 
	 	 	 	 

	 	 	HRCb
	 	Heat Rate Coefficient (efficiency) of the Facility at the date of
this Agreement being 11 191kJ/kWh

	 
	 	 	 	 

	 	 	DF
	 	Degradation Factor being the average loss of efficiency of the
Facility over the Contract Period calculated as 1.025 + CL

	 
	 	 	 	 

	 	 	 	 	where:

	 
	 	 	 	 

	 	 	 	 	CL is the coal loss from spillage, drainage runoff, airborne loss
(not efficiency) at the date of this Agreement being 1.005.

56

 

	 	 	 	 	 
	 	 	PLAFm
	 	Part Load Adjustment Factor in Month m is indicative of the
efficiency of the Facility when operated at less than 100% load, as set out in
the table below.

	 
	 	 	 	 

	 	 	FL
	 	Partial Load Factor means in any Hour the actual total
electricity output of the Facility divided by 100MW and expressed as a
percentage.

	 	 	 	 	 	 	 	 
	 
	 	FL (%)	 	 	PLAFm	 	 
	 	100%
	 	 	 	1.0000	 	 
	 	95%<or= FL < 100%
	 	 	 	1.0052	 	 
	 	90% <or= FL < 95%
	 	 	 	1.0142	 	 
	 	85% <or= FL <90%
	 	 	 	1.0231	 	 
	 	80% <or= FL <85%
	 	 	 	1.0365	 	 
	 	75% <or= FL <80%
	 	 	 	1.0499	 	 
	 	70% <or= FL <75%
	 	 	 	1.0678	 	 
	 	65% <or= FL <70%
	 	 	 	1.0901	 	 
	 	60% <or= FL <65%
	 	 	 	1.1125	 	 
	 	55% <or= FL < 60%
	 	 	 	1.1393	 	 
	 	50% <or= FL <55%
	 	 	 	1.1687	 	 
	 	45% <or= FL <50%
	 	 	 	1.2019	 	 
	 

	 	 	 
	$ADJHFO
	 	Fuel Charge Adjustment is, the costs associated with using heavy fuel oil (HFO) instead of Coal. $ADJHFO
will be set at zero (0) to the extent that the use of HFO at the Facility exceeds 3286 tonnes per annum. However, if the Facility consumption is less
than 3286 tpa, all under-runs will be determined in accordance with section B (Fuel Charge Adjustment).

SECTION B — FUEL CHARGE ADJUSTMENT

$ADJHFO = (QmHFO x EDm/Emtot) x (PmHFO - Pmcoal x (SEmcoal / SEmHFO))

Where:

	 	 	 	 	 
	 	 	PmHFO
	 	Price of HFO in Month m according to the Utilities and Services Agreement
in Dollars per tonnes, corrected in accordance with part C.

	 
	 	 	 	 

	 	 	SEmHFO
	 	Specific energy of Heavy Fuel Oil (HFO) in Month m expressed in kJ/tonnes
which value can not be less than 41,570 kJ/tonnes pursuant to the Utilities and
Services Agreement (HFO Specification)).

	 
	 	 	 	 

	 	 	Emtot 
	 	Total amount of electricity produced by Prony in Month m at the Facility
in kWh.

	 
	 	 	 	 

	 	 	QmHFO 
	 	Quantity of HFO consumed by Prony at the Facility in Month m in tonnes.

57

 

SECTION C — INVENTORY CORRECTION FOR Pmcoal, SEmcoal, SRm
SEmHFO, PmHFO

As both fuel storage facilities will be at any point in time, after receipt of the second shipment
of HFO or Coal as the case may be, comprised of an inventory of differing values
(Pmcoal, SEmcoal, SRm SEmHFO, PmHFO),
Prony and Goro Nickel will maintain a log to update these values at the agreed monthly billing date
according to the following example.

Example of Coal Cost using Weighted Average Calculation

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Tonnes	 	 	 	 
	 	 	 	 	Shipment	 	(1000’s)	 	 	$/T	 
	Month 1	 	Opening balance
	 	 	 	 	—	 	 	 	—	 
	 
	 	 	Monthly Purchases
	 	1	 	 	60	 	 	$	35.00	 
	 	 	 
	 	2	 	 	45	 	 	$	27.00	 
	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	105	 	 	 	 	 
	 	 	Total Available
	 	 	 	 	105	 	 	$	31.57	 
	 
	 	 	Monthly Consumption
	 	 	 	 	70	 	 	$	31.57	 
	 
	 	 	Balance
	 	 	 	 	35	 	 	$	31.57	 
	 
	Month 2	 	Opening balance
	 	 	 	 	35	 	 	$	31.57	 
	 
	 	 	Monthly Purchases
	 	3	 	 	60	 	 	$	26.00	 
	 	 	 
	 	4	 	 	45	 	 	$	35.00	 
	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	105	 	 	 	 	 
	 	 	Total Available
	 	 	 	 	140	 	 	$	30.29	 
	 
	 	 	Monthly Consumption
	 	 	 	 	90	 	 	$	30.29	 
	 	 	 
	 	 	 	 	 	 	 	 
	 	 	C/Bal
	 	 	 	 	50	 	 	$	30.29	 
	 
	Month 3	 	Opening balance
	 	 	 	 	50	 	 	$	30.29	 
	 
	 	 	Monthly Purchases
	 	5	 	 	50	 	 	$	34.00	 
	 	 	 
	 	6	 	 	40	 	 	$	37.00	 
	 	 	 
	 	7	 	 	35	 	 	$	40.00	 
	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	125	 	 	 	 	 
	 	 	Total Available
	 	 	 	 	175	 	 	$	34.82	 
	 
	 	 	Monthly Consumption
	 	 	 	 	110	 	 	$	34.82	 
	 	 	 
	 	 	 	 	 	 	 	 
	 	 	C/Bal
	 	 	 	 	65	 	 	$	34.82	 

Others values (including SEmcoal) will be calculated in a similar manner to that
set out in the table above.

58

 

SECTION D: Variable Operation and Maintenance Charge

The Variable Operation and Maintenance Charge for Month m shall be calculated as follows:

ECOMm = ECOMRm x EDm

Where:

	 	 	 
	ECOMm
	 	Variable Operation and Maintenance Charge for Month m in Euro

	 
	 	 

	EDm
	 	The sum of the Electricity Delivered in each Hour during Month m (as measured by the Metering
Systems) in kWh

	 
	 	 

	ECOMRm
	 	Variable Operation and Maintenance Charge Rate for Month m in Euro per kWh

The Variable Operation and Maintenance Charge Rate for Month m shall be calculated as follows:

ECOMRm = 0.0004888 Euros x INDEXLABm/INDEXLABb + 0.00114 Euros x INDEXMTCm/INDEXMTCb 

Where:

INDEXLAB = the Agreed Index for labour component of ECOMRm;

INDEXMTC = the Agreed Index for maintenance and material component of
ECOMRm;

INDEXLABm = INDEXLAB in Month m;

INDEXLABb = INDEXLAB as at the date of this Agreement;

INDEXMTCm = INDEXMTC in Month m;

INDEXMTCb = INDEXMTC as at the date of this Agreement

The parties agree that the numeric figures in relation to HRCb, CL and PLAFm
(the Moving Numbers) in this schedule 2 shall not be fixed on the date of this Agreement and
are subject to further revision in accordance with this paragraph. Enercal will procure that Prony
will perform relevant tests to determine the actual value of the Moving Numbers, under conditions
which are agreed with Goro Nickel, as soon as practicable after the Start Date and intermittently
until the end of the period two years from the Start Date (the Fixing Date). The Parties agree
that the Moving Numbers shall be fixed on and shall not be subject to any further changes by either
Party at the Fixing Date.

59

 

SCHEDULE 3

PART A

DELIVERY POINTS AND SWITCHROOM

[NOTE: DELIVERY POINTS AND SWITCHROOM PLANS NOT PROVIDED IN THIS VERSION]

60

 

PART B

METERING SYSTEMS

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

61

 

SCHEDULE 4

[NOT USED]

62

 

SCHEDULE 5

COAL SPECIFICATION

Table 1: Proximate Analysis

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Parameter	 	 	Units	 	 	Typical	 	 	Range	 
	 	The following Values can
only be altered with the
agreement of both
Enercal and Goro Nickel
	 	 	 	 	 	 	 	 	 	 
	 	Total Moisture
	 	 	% ar	 	 	11.19	 	 	8.8 – 11.2	 
	 	Ash
	 	 	% ar	 	 	11.63	 	 	11.6 – 14.0	 
	 	Volatile Matter
	 	 	% ar	 	 	23.53	 	 	20.88 – 23.60	 
	 	Sulphur
	 	 	% ar	 	 	 	 	 	0.45 Max	 
	 	LHV
	 	 	kJ/kg	 	 	25,329	 	 	25,300 - 27,200	 
	 	 
	 	 	 	 	 	 	 	 	 	 
	 	The following values are
forecasted to meet
Environmental limits.
Enercal may alter these
as required.
	 	 	 	 	 	 	 	 	 	 
	 	Cadmium and Compounds
	 	 	ppm Wt/Wt	 	 	1.20	 	 	400 Max	 
	 	Mercury and Compounds
	 	 	ppm Wt/Wt	 	 	0.04	 	 	0.45 Max	 
	 	Thallium
	 	 	ppm Wt/Wt	 	 	0.00	 	 	100 Max	 
	 	Cd + Hg + Tl
	 	 	ppm Wt/Wt	 	 	 	 	 	 	 
	 	Arsenic and Compounds
	 	 	ppm Wt/Wt	 	 	23.80	 	 	500 Max	 
	 	Selenium and Compounds
	 	 	ppm Wt/Wt	 	 	0.65	 	 	3.0 Max	 
	 	Tellurium
	 	 	ppm Wt/Wt	 	 	0.00	 	 	100 Max	 
	 	As + Se + Te
	 	 	ppm Wt/Wt	 	 	 	 	 	 	 
	 	Lead and Compounds
	 	 	ppm Wt/Wt	 	 	24.20	 	 	2,500 Max	 
	 	Antimony and Compounds
	 	 	ppm Wt/Wt	 	 	2.30	 	 	20 Max	 
	 	Chromium Total
	 	 	ppm Wt/Wt	 	 	31.60	 	 	200 Max	 
	 	Cobalt and Compounds
	 	 	ppm Wt/Wt	 	 	11.40	 	 	100 Max	 
	 	Copper and Compounds
	 	 	ppm Wt/Wt	 	 	1.20	 	 	20 Max	 
	 	Tin
	 	 	ppm Wt/Wt	 	 	1.20	 	 	20 Max	 
	 	Manganese and Compounds
	 	 	ppm Wt/Wt	 	 	53.40	 	 	300 Max	 
	 	Nickel
	 	 	ppm Wt/Wt	 	 	24.00	 	 	100 Max	 
	 	Vanadium
	 	 	ppm Wt/Wt	 	 	5.00	 	 	50 Max	 
	 	Zinc and Compounds
	 	 	ppm Wt/Wt	 	 	20.00	 	 	100 Max	 
	 	Sb+Cr+Co+Cu+Sn+Mn+Ni+V+Zn
	 	 	ppm Wt/Wt	 	 	 	 	 	 	 
	 

63

 

ppm Wt/Wt = Part per Million by Weight in Coal as Delivered

Table 2: Physical Properties

(The following Values can only be altered with the agreement of both Enercal and Goro Nickel)

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Parameter	 	 	Units	 	 	Reference	 	 	Range	 
	 	Hardgrove Grindability Index
	 	 	—	 	 	47	 	 	40 – 75	 
	 	Top Size
	 	 	Mm	 	 	 	 	 	50 Max	 
	 	Part greater than 25mm
	 	 	%	 	 	 	 	 	15 Max	 
	 	Part less than 3mm
	 	 	%	 	 	 	 	 	20 Max	 
	 

64

 

SCHEDULE 6

METER TESTING PROCEDURES

	1.  	METERING DATA
	 
	1.1  	The Metering System will be comprised of several components that shall each be to an
international standard and providing a measured accuracy of (including each voltage or current
transformer which forms part of the Metering System) plus or minus one-fifth of one per cent.
(±0.2%). Unless otherwise mutually agreed, the design standard shall be commensurate to ANSI
C 12.1-1995.
	 
	   	The metering data will be comprised of:

	 	(a)  	signals from the Metering System required for establishing the Electricity
Delivered in any Hour, any Availability Penalty, any Availability Credit and for
determining any other payment or penalty amount under this Agreement; and
	 
	 	(b)  	separate, identical and electrically independent signals from the Metering
System to Enercal’s and Goro Nickel’s operations centres.

	2.  	TESTING
	 
	2.1  	The calibration of the Metering System will be checked and verified to ensure that the
accuracy remains within the specified limits.
	 
	   	The method of calibration and frequency of tests will be agreed by the ESA Coordinating
Committee, based on knowledge of the performance and the design of the installed Metering
System and the manufacturers’ recommendations.
	 
	   	Enercal will provide:

	 	(a)  	certificates of accuracy to an international standard for the Metering System
it supplies; and
	 
	 	(b)  	certificates of accuracy to a mutually agreed international standard for the
existing current and voltage transformers. If replacement current or voltage
transformers are required for the metering locations, they will be supplied by Enercal,
along with certificates of accuracy to an international standard.

	2.2  	Testing of the Metering System shall be performed in-situ, using portable equipment traceable
to a mutually agreed international standard, without interrupting the delivery of Electricity
from the Enercal System to the Nickel Mine.
	 
	2.3  	Testing and calibration of the Metering System shall be carried out by Enercal.
	 
	2.4  	Testing and calibration of any Backup Metering System shall be carried out by Goro Nickel.

65

 

SCHEDULE 7

ELECTRICITY SPECIFICATION

The Electricity delivered to Goro Nickel under this Agreement shall comply with the
specifications set out in this schedule 7. Without prejudice to any provision of the Multipartite
Agreement, in the event that electricity delivered to Goro Nickel under this Agreement does not
comply with the specifications set out in this schedule 7, such failure will be referred to the ESA
Coordinating Committee which will determine the appropriate actions to be undertaken by Enercal to
ensure that the failure is rectified and any further such failure is prevented. For the avoidance
of doubt, such a failure will not be a breach of a material obligation under this Agreement for the
purposes of clause 17.1(a)(iii) (Events of Default).

	1.  	GORO NICKEL INTERCONNECTION AND GENERATORS
	 
	(a)  	The Electricity interconnection from the Delivery Points to the Nickel Mine will be by two
independent 33 kV feeders from the dual bus 33 kV switchboard in the Facility Switchroom to
the Goro Nickel 33kV switchboard as shown in part A of schedule 3 (Delivery Points and
Switchroom).
	 
	(b)  	The two feeders will each be rated for 1,200 Amp in order to accept the transfer of real (MW)
and reactive (MVar) Electricity associated with the Target Net Capacity to which Goro Nickel
is entitled.

Note: Enercal must procure that until such time that 33kV/33kV isolation transformers are
installed, the 33kV Facility interconnection to the EEC network is only used for black start of the
Facility or the Goro Nickel oil fired steam and power plant (OFSPP) (when the 150kV link is lost).

	2.  	ELECTRICITY QUALITY
	 
	2.1  	Voltage
	 
	(a)  	Nominal Voltage: 33 kV (normal operating voltage 34 kV)
	 
	(b)  	Steady state (long term) voltage variation: +/- 4% from 34 kV
	 
	(c)  	Transient voltage variation: +/- 10% (from 33 kV) for periods of up to 60 seconds based on 33
kV
	 
	(d)  	Short Term Voltage Dips: Voltage dips of 10-100% to be limited to 300 half-cycles (3 sec).
It is expected that such voltage dips will not be more frequent than twice per year on average
and that single pole reclosing of the 150 kV line will limit the total loss of Electricity
from such occurrences to once every two years on average. These frequencies are not
guaranteed but are to be used as performance targets. Enercal is to take remedial action to
improve reliability of Electricity supply in the event that these targets are significantly
exceeded. Enercal must procure that any exposed connection (e.g. overhead line) of the 33kV
system at the Facility to any system or network outside the Facility or Nickel Mine is through
a 33/33kV isolation transformer.
	 
	2.2  	Frequency
	 
	(a)  	Nominal Frequency: 50Hz

66

 

	(b)  	Steady state (long term) frequency variation: +/- 1% (0.5Hz)
	 
	(c)  	Transient frequency variation: +/- 2% (1Hz)
	 
	2.3  	Voltage Unbalance
	 
	   	Voltage Unbalance: 2% (expressed as the ratio of negative to positive sequence
voltages).
	 
	2.4  	Harmonics
	 
	(a)  	Total Harmonic Voltage Distortion (THD), evaluated for 2nd to 40th order components: 8%
continuously with up to 12% for 15 seconds in any 150 second period. Individual harmonics
should not exceed the limits given in IEC 61000-3-6.
	 
	(b)  	Goro Nickel must ensure that all electrical equipment used in the Nickel Mine and connected
to the Nickel Mine electricity distribution system is designed and manufactured in accordance
with current good practice, in order to limit THD to acceptable levels.
	 
	(c)  	If the THD is exceeded at the Delivery Points resulting in adverse affects to Prony, Goro
Nickel or the Transmission System, appropriate modifications (which may include the addition
of harmonic filters) will be carried out by Goro Nickel and/or Enercal to reduce the levels to
within the THD, as follows:-

	 	•  	where only one Party’s contribution exceeds 50% of the THD at the Delivery Points,
it will reduce its contribution until the adverse effects are eliminated; or
	 
	 	•  	where both Parties’ contributions exceed 50% of the agreed level at the Delivery
Points, both Parties will reduce their contribution in proportion with their excess
above 50% of the THD.

	2.5  	Power Factor
	 
	   	Goro Nickel acknowledges that Enercal will be relieved from its requirement to deliver
Electricity at any time, if at that time the power factor of the Electricity delivered to
Goro Nickel is less than 0.8.
	 
	3.  	FAULT LEVEL AND PROTECTION
	 
	(a)  	Fault Level: The three phase short circuit sub-transient fault current during a fault at the
Delivery Points must not exceed 31.5kA for one (1) second. In order to ensure this fault level
is not exceeded, Goro Nickel will not, and Enercal will procure that together with Prony it
will not, exceed individual short circuit fault level contributions of 12kA and 19.5kA
respectively, without prior notification and agreement of the other Party.
	 
	(b)  	Fault duration: In order to maintain discrimination with the downstream protection relays and
clear fault within one (1) second, Enercal will procure that high speed protection techniques
incorporating logic blocking schemes will be used for the Facility and similarly Goro Nickel
will install compatible systems in the Nickel Mine electricity distribution system. The
Parties acknowledge that engineering design coordination between Goro Nickel, Enercal and
Prony will be required to ensure the integrity of all electrical systems and avoid tripping of
the Facility, or Nickel Mine (inclusive of OFSPP).

67

 

	4.  	SYSTEM STABILITY
	 
	(a)  	For short term voltage deviations of 20% maximum for less than 100ms, resulting from
disturbances on the Transmission System or any other transmission grid, (which should not have
an adverse effect on the Nickel Mine operation) Enercal must procure that the Facility is able
to recover without loss of Goro Nickel’s on-line plant.
	 
	(b)  	For short term faults of greater voltage deviation which may result in loss of a significant
portion of the Nickel Mine and which originate from outside the Nickel Mine the frequency of
occurrence shall be as defined in ‘Short Term Voltage Dips’ detailed above. In the event of
such faults, Enercal must procure that the Facility retains stability by single pole reclosing
of the 150- kV line or islanding of the Facility to allow re-starting of the Nickel Mine
without delay if it has tripped. The target frequency for total loss of Electricity from such
occurrences is again defined in ‘Short Term Voltage Dips’ detailed above.
	 
	(c)  	Enercal must procure that Electricity voltage and frequency remain stable and within the
transient values nominated above for instantaneous load rejections within the Nickel Mine of
up to 15 MW. Maximum instantaneous load increases within the Nickel Mine are expected to be
generated from DOL (Direct On Line) starting of motors up to 2.0 MW and resistance starting
(or other reduced current starting methods) of slip ring (or other types of) motors up to 6.0
MW. Again, Enercal must procure that Electricity voltage and frequency remain stable and
within the transient values under such load increases.
	 
	5.  	EARTHING
	 
	(a)  	Enercal must procure that:

	 	(i)  	the earthing system at the Facility is designed, constructed and installed in
accordance with Applicable Laws for such an installation;
	 
	 	(ii)  	touch voltages during fault conditions meet the design codes for the earthing
system at the Facility and are lower than safety curves given in the NFC 15-100;
	 
	 	(iii)  	a comprehensive equipotential bonding type of earthing system is installed in
the Facility; and
	 
	 	(iv)  	a combined high voltage and low voltage earthing system is installed for the
Facility with maximum 1 Ohm earth resistance.

	(b)  	Goro Nickel must ensure that:

	 	(i)  	the earthing system at the Nickel Mine is designed, constructed and installed
in accordance with Applicable Laws for such an installation;
	 
	 	(ii)  	touch voltages during fault conditions meet the design codes for the earthing
system at the Nickel Mine and are lower than safety curves given in the NFC 15-100;
	 
	 	(iii)  	a comprehensive equipotential bonding type of earthing system is installed in
the Nickel Mine; and
	 
	 	(iv)  	a combined high voltage and low voltage earthing system is installed for the
Nickel Mine with maximum 1 Ohm earth resistance.

68

 

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

69

 

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

70

 

SCHEDULE 8

SCHEDULING PROCEDURES

	1.  	ANNUAL SCHEDULE
	 
	(a)  	On and from three (3) Months prior to the earlier of the Start Date and the Target Start
Date, and thereafter six (6) Months prior to the commencement of each year, Goro Nickel must
send Enercal a notification (the Goro Nickel Schedule) which shall contain:

	 	(i)  	a nomination of certain of those Hours during the following year where Goro
Nickel requires an availability of less than 50,000kW (Reduced Capacity Hour) and the
amount of Electricity which Goro Nickel requires to be made available in each Reduced
Capacity Hour;
	 
	 	(ii)  	a total of at least 26,280,000kWh of Reduced Capacity;
	 
	 	(iii)  	an indication of Goro Nickel’s expected requirements for Extra Electricity for
each Hour in that following year;
	 
	 	(iv)  	an indication of when Goro Nickel expects that Surrendered Electricity could be
available to Enercal should Enercal require Surrendered Electricity in that following
year; and
	 
	 	(v)  	Goro Nickel’s suggested prices per kWh of Availability Credit Electricity
during that following year.

	   	If Goro Nickel would be required to prepare a Goro Nickel Schedule prior to the Contract
Period at any time between 1 April and 31 September in any year, the Goro Nickel Schedule
prepared at that time will contain the information set out above in respect of the period
from earlier of the Start Date or the Target Start Date until the end of the year following
the year in which the Start Date or the Target Start Date falls (as the case may be). In
that circumstance, the amount in paragraph 1(a)(ii) included in that Goro Nickel Schedule
will be increased proportionally to reflect the period from the earlier of the Start Date
and the Target Start Date and the end of the following year.
	 
	(b)  	Within ten (10) Business Days of receipt of the Goro Nickel Schedule in respect of a year,
Enercal shall send Goro Nickel a notification (the Enercal Schedule) which shall contain:

	 	(i)  	Enercal’s notifications of each Planned Outage for that year;
	 
	 	(ii)  	Enercal’s notifications of Expected Actual Capacity for each Hour in that year
(taking into account each Planned Outage for that year);
	 
	 	(iii)  	any request for Surrendered Electricity in any Hour of that year; and
	 
	 	(iv)  	Enercal’s suggested price per kWh of Extra Electricity delivered during that
year from each potential Extra Electricity generation source.

	(c)  	Within two (2) Weeks after Enercal has delivered the Enercal Schedule in respect of a year,
the Parties shall meet together to discuss the details contained in the Goro Nickel Schedule
and the Enercal Schedule and within two Weeks following such discussions (which discussions
shall not last longer than two Weeks), Goro Nickel must:

71

 

	 	(i)  	give notice to Enercal of the actual Reduced Capacity Hours for that year and
the amount of Electricity which Goro Nickel requires to be made available by Enercal in
each Reduced Capacity Hour during that year (provided that the sum of the Reduced
Capacity for each such Reduced Capacity Hour must equal at least 26,280,000kWh); and
	 
	 	(ii)  	give notice to Enercal of the prices per kWh of Availability Credit Electricity
during the course of that year (Unused Capacity Price),

	   	and Enercal must give notice to Goro Nickel of the price per kWh of Extra Electricity
during the course of that year from each potential Extra Electricity generation source (each
an Extra Electricity Price).
	 
	(d)  	Where Goro Nickel agrees:

	 	(i)  	to provide any Surrendered Electricity requested by Enercal; and
	 
	 	(ii)  	a price for that Surrendered Electricity,

	   	in the discussions held in accordance with paragraph 2(a) below or otherwise in respect
of any year then Enercal will be obliged to pay Goro Nickel the agreed price for that
Surrendered Electricity. Within thirty (30) Days after receipt of an invoice for Surrendered
Electricity agreed in respect of any Month, Enercal must pay Goro Nickel the agreed price
for all such Surrendered Electricity.
	 
	2.  	MONTHLY AND WEEKLY UPDATES
	 
	(a)  	Goro Nickel shall, seven (7) days prior to the earlier of the Start Date and the Target Start
Date, and thereafter seven (7) days prior to the commencement of each Month, notify Enercal
of:

	 	(i)  	its expected Scheduled Net Capacity for each Hour of the following Month; and
	 
	 	(ii)  	any amendment to any requirement for Extra Electricity for each Hour of the
following Month as set out in the Goro Nickel Schedule for that Month.

	(b)  	Goro Nickel shall, seven (7) days prior to the earlier of the Start Date and the Target Start
Date, (Anticipated Start Date) and thereafter seven (7) days prior to the commencement of each
Week, Goro Nickel shall notify Enercal of:

	 	(i)  	any amendments to the previously notified expected Scheduled Net Capacity for
each Hour of the following Week; and
	 
	 	(ii)  	any amendment to any requirement for Extra Electricity for each Hour of the
following Week as set out in the Goro Nickel Schedule for that Week.

	(c)  	Within two (2) Business Days of receipt of a notice under paragraph 2(a) or 2(b) above,
Enercal shall notify Goro Nickel of any amendment to its notification of Expected Actual
Capacity for any Hour of such following Month or Week (as the case may be) as set out in the
Goro Nickel Schedule for that Month or Week as the case may be.
	 
	   	For the avoidance of doubt, the Target Net Capacity will not be increased by any
notification given in accordance with this paragraph 2 unless mutually agreed by the
Parties.

72

 

	3.  	DAILY NOTIFICATIONS
	 
	(a)  	By 10:00am on each Day, Goro Nickel shall notify Enercal of its expected Scheduled Net
Capacity for each Hour of the following Day and any amendment to any requirement for Extra
Electricity for each Hour of the following Day as set out in the Goro Nickel Schedule for that
Day.
	 
	(b)  	By 11.00 a.m. on each Day, Enercal shall notify Goro Nickel:

	 	(i)  	whether or not it anticipates any operational problem with providing any Extra
Electricity in any Hour requested by Goro Nickel in respect of the following Day; and
	 
	 	(ii)  	of the Expected Actual Capacity for each Hour of such following Day.

	4.  	SCHEDULED NET CAPACITY
	 
	(a)  	The Scheduled Net Capacity in respect of any Hour may not exceed the Target Net Capacity for
that Hour.
	 
	(b)  	The total sum of the Scheduled Net Capacity and the Surrendered Electricity for each Hour in
any year during the Contract Period may not exceed 394,200,000 kWh.
	 
	(c)  	The limitations in paragraphs 4(a) and 4(b) above are the Contract Limits.
	 
	(d)  	For the avoidance of doubt:

	 	(i)  	if the Contract Period spans any partial year, the Contract Limit in paragraph
4(b) above and the amount set out in paragraph 1(a)(ii) will be reduced proportionally
in respect of that year; and
	 
	 	(ii)  	in any leap year during the Contract Period the Contract Limit in paragraph
4(b) above will be increased by 1,080,000kWh in respect of that year and the amount set
out in paragraph 1(a)(ii) above will be increased to 26,352,000kWh.

	5.  	FORCED OUTAGE NOTIFICATIONS
	 
	   	Enercal shall notify Goro Nickel immediately if it anticipates any operational problem
with providing either the lower of the Target Net Capacity and the Expected Actual Capacity
notified in respect of any Hour pursuant to paragraph 2 above or any Extra Electricity in
respect of any Hour in the following Day.
	 
	6.  	SHORTFALL
	 
	(a)  	If at any time the notification of Expected Actual Capacity for any Hour is less than the
expected notification of Scheduled Net Capacity for that Hour, then the Parties shall
investigate whether:

	 	(i)  	Enercal is able to adjust demand, supply and maintenance in the Enercal System
so as to make good any shortfall; or
	 
	 	(ii)  	Goro Nickel could either make good the shortfall from its own generation
sources or could avoid the shortfall by rearranging (in a manner acceptable to Goro
Nickel) its planned production and maintenance programmes at the Nickel Mine.

73

 

	(b)  	If, at any time:

	 	(i)  	the Parties agree that Enercal will make good an expected shortfall of
Scheduled Net Capacity in respect of any Hour, it shall do so; and
	 
	 	(ii)  	the Parties agree that, in respect of any Hour, Goro Nickel will make good the
shortfall from its own generation sources (at a price agreed by Enercal) or will avoid
the shortfall by rearranging (in a manner acceptable to Goro Nickel) its planned
production and maintenance programmes at the Nickel Mine, then:

	 	(A)  	Goro Nickel shall do so and to the extent that Goro Nickel
agrees to do so, Goro Nickel will reduce its expected Scheduled Net Capacity in
that Hour by the amount of Electricity which Goro Nickel will make available
from its own generation sources (and will reflect that amount in the Scheduled
Net Capacity in the relevant Hour) or will not require as a result of its
arranging its planned production and maintenance programmes at the Nickel Mine;
and
	 
	 	(B)  	where during the Contract Period only, Goro Nickel agrees to
make good the shortfall from its own generation sources and Enercal has agreed
a price, Enercal shall, within 30 days of demand, reimburse Goro Nickel for the
costs (at the agreed price) that Goro Nickel incurs in using its own generation
sources.

	7.  	EXTRA ELECTRICITY
	 
	   	If Enercal agrees that it can provide any amount of Extra Electricity in any period, it
shall use all reasonable endeavours do so.

74

 

SCHEDULE 9

PENALTIES

PART A — AVAILABILITY PENALTY

	(a)  	The Availability Penalty in Month m prior to any Extension Period will be calculated as
follows:
	 
	   	APm = (Target Monthly Availability - (Actual Monthly Availability +
Remaining Outage Allowance)) x 0.381 Euro (as such amount is adjusted from the
date of this Agreement in accordance with the Agreed Index).
	 
	(b)  	The Availability Penalty in Month m during any Extension Period will be calculated as
follows:
	 
	   	APm = (Target Monthly Availability - (Actual Monthly Availability +
Remaining Outage Allowance)) x 0.381 Euro (as such amount is adjusted from the
date of this Agreement in accordance with the Agreed Index),
	 
	   	provided that if any payment of an Availability Penalty, APm, in respect of
a Month during any Extension Period would cause the sum of each Availability Penalty,
APm, paid during that Extension Period to exceed the sum of each Availability
Charge paid during that Extension Period, then no Availability Penalty, APm, will
be payable in respect of that Month.

Where APm: The amount of the Availability Penalty in Month m in Euro (which amount
if negative will be equal to nil (0)).

The Remaining Outage Allowance in relation to any Month is 2,900,000kWh less the aggregate of
all Outages that have already occurred in previous Months in that year. For the avoidance of doubt,
if the Contract Period spans any partial year, the amount of 2,900,000kWh set out in this paragraph
will be reduced proportionally in respect of that year. This amount of 2,900,000kWh shall be
increased to 2,907,945kWh in any leap year during the Contract Period..

If Enercal notifies its intention to carry out any major Planned Outage in any year during the
Contract Period in accordance with the Scheduling Procedures, the amount of 2,900,000kWh in the
immediately preceding paragraph will be replaced with an amount of 4,100,000kWh in the year in
respect of which such Planned Outage is notified. Enercal may only notify a major Planned Outage
twice in each six (6) year period during the Contract Period, the first such six (6) year period
commencing on the Start Date. In the first year of the Contract Period, the amount of 2,900,000kWh
in the immediately preceding paragraph will be replaced with an amount of 5,800,000kWh. The Parties
agree that the ESA Coordinating Committee may agree to extend the six (6) year period referred to
in this paragraph to a period of up to eight (8) years to reflect the actual major Planned Outage
requirements of Enercal.

For the avoidance of doubt, any balance of the Remaining Outage Allowance remaining at the end
of any year will not be carried forward to the next year.

PART B —  START DATE LD AMOUNT

The Start Date LD Amount payable on any Day d, SDLDAd, will be calculated as
follows:

75

 

SDLDAd = Amount x (1 - ((Sum of Actual Capacity for each Hour in that Day)/(Sum of
Target Net Capacity for each Hour in that Day)).

Where:

	 	 	 
	Amount:
	 	If the Day, d, is a Day:

	 
	 	 

	(i)
	 	between the Target Start Date and the Step-Up Date (both dates inclusive), is
€20,000; and

	 
	 	 

	(ii)
	 	after the Step-Up Date, is €35,000;

PROVIDED THAT, if, on any such Day, the Start Date LD Amount is payable solely due to delays in
completion of the civil works relating to the second generating unit of the Facility, Amount shall
be €10,922 on such Day (instead of the figures in (i) and (ii) above). The Step-Up Date means the
date on which Prony is entitled to receive a higher level of delay liquidated damages from its
contractors under the EPC Contracts.

76

 

SCHEDULE 10

INSURANCE

	(a)  	Workers Compensation coverage, or similar insurance as per Applicable Laws for
all employees working for those companies related to or existing within the Enercal
System;

	(b)  	Comprehensive Third Party Liability Insurance insuring against bodily injury,
death and property damage to minimum policy limits of ten million Dollar
(US$10,000,000.00) per occurrence.

	(c)  	Automobile Liability Insurance, insuring against liabilities arising from
bodily injury, death, property damage, with policy limits as required by Applicable
Laws for any and all motor vehicles, owned, leased, rented, operated or used by or on
behalf of parties owning, leasing and/or operating any part of the Enercal System
and/or any contractor, subcontractor or agents for the Enercal System and/or parties
related thereto;

	(d)  	“All Risks” Property/Boiler & Machinery and Business Interruption insurance
insuring against direct physical loss or damage to the Enercal System to its full
replacement value, including but not limited to the coal conveying system from the coal
stockpile to the electricity generating facility and the related business interruption
arising there from, including but not limited to extra expense and expediting costs,
caused by all risks, including but not limited to machinery and equipment breakdown,
with policy limits adequate to insure the Enercal System property of every description
to full replacement cost and Enercal System business interruption on a gross profits
basis with an indemnity period of at least 12 months;

	(e)  	“All Risks” Cargo Insurance, insuring against direct physical loss or damage to
all incoming cargo being transported for use by the Enercal System, including but not
limited to shipments of coal and equipment.

	(f)  	Charterer’s Liability, insuring against liability arising from the chartering
by any of the Enercal System companies of any marine vessel, with minimum policy limits
of at least ten million Dollars (US$10,000,000) per Occurrence or the amount required
by the vessel owner.

77

 

SCHEDULE 11

EARLY ELECTRICITY PRICE

The Early Electricity Price per kWh for any Early Electricity delivered to Goro Nickel will be
determined as follows:

For Early Electricity sold to Enercal under the PPA- The price per kWh paid by Enercal to
Prony in respect of that Early Electricity as sold by Prony to Enercal under the PPA and delivered
to Goro Nickel under this Agreement.

For other Early Electricity  — The price per kWh set by Enercal when it confirms that such
Early Electricity is available for delivery to Goro Nickel.

78

 

SCHEDULE 12

AC PRESENT VALUE

AC Present Value means

Where:

PVRate = 0.8127% (which amount, for the avoidance of doubt, is equivalent to an annual rate of ten
and one fifth per cent. (10.2%)).

RMonths = The number of months between the Early Termination Date and the 25th anniversary of the
Start Date.

79

 

In witness whereof this Agreement has been executed by the Parties as a Deed on the date appearing
on page 1.

	 	 	 
	EXECUTED AS A DEED by

ENERCAL

Acting by: Jean-Claude Hirel

	 	)

)

)

Director /s/ Jean-Claude Hirel
 
	

	 	 
	

	 	Director/Secretary
	 
	 	 
	EXECUTED AS A DEED by

GORO NICKEL

(acting through and on behalf of its

New Caledonian branch

Acting by: Yves Roussel

	 	)

)

)

)
)

Director /s/ Yves Roussel
 
	

	 	 
	

	 	Director/Secretary

80exv10wl

 

30 December 2004

GNiFi

(as Lessor)

GORO NICKEL S.A.

(as Lessee)

 

	 

LEASE AGREEMENT

(Contrat de Crédit-Bail)

	 

 

TABLE OF CONTENTS

	 	 	 	 	 
	CLAUSE	 	PAGE
	1. DEFINITIONS

	 	 	2	 
	 

	 	 	 	 
	2. PURPOSE AND TERM OF THIS LEASE

	 	 	2	 
	 

	 	 	 	 
	3. UNDERTAKINGS OF THE LESSOR

	 	 	3	 
	 

	 	 	 	 
	4. DEFECTS

	 	 	3	 
	 

	 	 	 	 
	5. TERMS AND CONDITIONS OF OCCUPATION

	 	 	4	 
	 

	 	 	 	 
	6. RENT AND OTHER CHARGES

	 	 	6	 
	 

	 	 	 	 
	7. WORK PERFORMED DURING THE LEASE TERM

	 	 	8	 
	 

	 	 	 	 
	8. LIABILITIES AND RECOURSE

	 	 	9	 
	 

	 	 	 	 
	9. INSPECTIONS

	 	 	10	 
	 

	 	 	 	 
	10. ENVIRONMENTAL RISKS

	 	 	10	 
	 

	 	 	 	 
	11. SAFETY AND SECURITY

	 	 	12	 
	 

	 	 	 	 
	12. INSURANCES

	 	 	12	 
	 

	 	 	 	 
	13. TOTAL AND PARTIAL LOSS

	 	 	15	 
	 

	 	 	 	 
	14. PARTIAL EXPROPRIATION

	 	 	16	 
	 

	 	 	 	 
	15. TEMPORARY REQUISITION

	 	 	17	 
	 

	 	 	 	 
	16. TRANSFER

	 	 	17	 
	 

	 	 	 	 
	17. LIENS

	 	 	17	 
	 

	 	 	 	 
	18. NO WAIVER

	 	 	18	 
	 

	 	 	 	 
	19. REPRESENTATIONS

	 	 	18	 
	 

	 	 	 	 
	20. TERMINATION EVENTS

	 	 	21	 
	 

	 	 	 	 
	21. TERMINATION

	 	 	24	 

Page I

 

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

	 	 	26	 
	 

	 	 	 	 
	23. ADD-BACK INDEMNITY

	 	 	27	 
	 

	 	 	 	 
	24. COLLATERALISATION

	 	 	29	 
	 

	 	 	 	 
	25. INDEMNIFICATION

	 	 	31	 
	 

	 	 	 	 
	26. PURCHASE OPTION

	 	 	35	 
	 

	 	 	 	 
	27. DGI PROCESS

	 	 	36	 
	 

	 	 	 	 
	28. CONDITIONS PRECEDENT

	 	 	37	 
	 

	 	 	 	 
	29. CONSENT RIGHTS

	 	 	38	 
	 

	 	 	 	 
	30. WAIVER OF RECOURSE

	 	 	39	 
	 

	 	 	 	 
	31. AMENDMENTS

	 	 	39	 
	 

	 	 	 	 
	32. PARTIAL INVALIDITY

	 	 	39	 
	 

	 	 	 	 
	33. CONFIDENTIALITY

	 	 	40	 
	 

	 	 	 	 
	34. CHOICE OF LAW - JURISDICTION CLAUSE

	 	 	40	 
	 

	 	 	 	 
	35. COSTS AND EXPENSES

	 	 	41	 
	 

	 	 	 	 
	36. NOTICES

	 	 	41	 
	 

	 	 	 	 
	APPENDIX 1 DEFINITIONS

	 	 	45	 
	 

	 	 	 	 
	APPENDIX 2 DESCRIPTION OF THE ASSETS

	 	 	60	 
	 

	 	 	 	 
	APPENDIX 3 ASSUMPTIONS

	 	 	61	 
	 

	 	 	 	 
	APPENDIX 4 ADJUSTMENT METHOD FOR CHANGE IN ASSUMPTIONS

	 	 	83	 
	 

	 	 	 	 
	APPENDIX 5 RENT PAYMENT SCHEDULE SEE ANNEX 3 OF APPENDIX 3

	 	 	87	 
	 

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

	 	 	88	 
	 

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

	 	 	89	 
	 

	 	 	 	 
	APPENDIX 8 COMPUTING OF THE RETROCESSION RATE

	 	 	90	 

Page II

 

	 	 	 	 	 
	APPENDIX 9 DGI FINAL APPROVAL

	 	92

Page III

 

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

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

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

WHEREAS:

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

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

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

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

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

NOW THEREFORE, THE PARTIES AGREES AS FOLLOWS:

Page 1

 

1. Definitions

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

1.2 In this Lease

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

2. Purpose and Term of this Lease

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

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

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

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

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

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

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

Page 2

 

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

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

3. Undertakings of the Lessor

3.1 The Lessor undertakes:

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

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

4. Defects

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

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

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

Page 3

 

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

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

5. Terms and Conditions of Occupation

5.1 Authorised use of the Assets

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

5.2 Operating permits

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

5.3 Compliance with standard practice

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

Page 4

 

5.4 Easements (if any)

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

5.5 Modifications

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

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

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

5.6 Lessee financial information

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

Page 5

 

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

6. Rent and Other Charges

6.1 Rent and Termination Value

	(a)  	Description of Rent

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

	(b)  	Determination, due date and payment of Rent

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

Page 6

 

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

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

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

6.2 Payment of cost, charges and Taxes

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

Page 7

 

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

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

6.3 Supplemental Rent

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

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

6.4 Costs and charges

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

7. Work performed during the Lease Term

7.1 Maintenance / repairs

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

7.2 Liability of the Lessee by reason of the work

Page 8

 

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

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

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

8. Liabilities and recourse

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

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

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

Page 9

 

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

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

9. Inspections

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

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

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

10. Environmental Risks

10.1 Obligations of the Lessee

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

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

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

Page 10

 

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

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

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

10.2 Administrative requirements

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

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

Page 11

 

11. Safety and Security

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

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

12. Insurances

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

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

12.2 The Lessee shall cause each Insurance Policy to:

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

Page 12

 

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

12.3 In respect of the Insurance Policies:

	(a)  	Notwithstanding Clause 12.2(b),

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

Page 13

 

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

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

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

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

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

Page 14

 

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

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

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

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

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

13. Total and Partial Loss

13.1 Total Loss

Page 15

 

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

13.2 Partial Loss and Repair

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

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

14. Partial Expropriation

14.1 Partial expropriation

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

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

Page 16

 

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

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

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

14.2 Rights of the Lessee

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

15. Temporary requisition

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

16. Transfer

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

17. Liens

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

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

Page 17

 

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

18. No Waiver

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

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

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

19. Representations

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

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

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

Page 18

 

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

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

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

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

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

Page 19

 

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

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

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

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

Page 20

 

20. Termination Events

20.1 Lessor Termination Events

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

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

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

	(h)  	Insurance: either:

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

Page 21

 

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

(i) Environmental proceedings:

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

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

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

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

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

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

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

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

Page 22

 

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

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

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

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

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

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

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

20.2 Lessee Termination Events

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

Page 23

 

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

21. Termination 

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

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

Page 24

 

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

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

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

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

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

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

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

Page 25

 

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

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

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

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

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

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

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

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

Page 26

 

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

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

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

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

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

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

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

23. Add-Back Indemnity

23.1 General Principles and Computation

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

Page 27

 

23.2 Payment of Add-Back Indemnity

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

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

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

23.3 Exclusions

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

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

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

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

23.4 Conduct of claims

Page 28

 

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

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

23.5 Specification

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

24. Collateralisation

24.1 General Principles of Collateralisation

	(a)  	Procedures for Posting Lessee Collateral

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

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

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

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

	(c)  	Use of Lessee Collateral

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

Page 29

 

 

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

	(d)  	Release of Lessee Collateral

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

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

such date being the “Lessee Collateral Release Date”.

	(e)  	Maximum amount of collateral

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

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

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

	(f)  	Investment of Lessee Collateral

Page 30

 

 

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

25. Indemnification

25.1 General Indemnity

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

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

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

	 	(i)  	the amount of such Operational Loss; less

Page 31

 

 

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

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

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

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

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

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

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

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

Page 32

 

 

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

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

	25.2  	Tax Indemnity

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

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

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

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

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

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

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

Page 33

 

 

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

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

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

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

	25.3  	Conduct of claims

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

	25.4  	Mitigation

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

	25.5  	Specification

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

Page 34

 

 

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

	25.6  	Consequences of syndication

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

	   	26. Purchase Option

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

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

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

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

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

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

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

Page 35

 

 

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

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

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

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

27. DGI Process

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

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

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

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

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

Page 36

 

 

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

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

28. Conditions Precedent

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

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

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

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

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

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

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

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

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

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

Page 37

 

 

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

29. Consent Rights

29.1 Consent Rights Regarding Management of the Lessor

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

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

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

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

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

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

	(f)  	settlement of litigation or claims.

29.2 Lessor financial information

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

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

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

Page 38

 

 

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

30. Waiver of Recourse 

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

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

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

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

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

31. Amendments

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

32. Partial Invalidity

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

Page 39

 

 

33. Confidentiality

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

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

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

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

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

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

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

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

34. Choice of Law - Jurisdiction Clause

34.1 This Lease is governed by French law.

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

Page 40

 

 

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

35. Costs and Expenses

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

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

	(a)  	to the Tax Investors:

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

	(b)  	to the Lender:

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

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

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

36. Notices

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

Lessor:

BNP Paribas Nouvelle Calédonie

37 avenue Henri Lafleur

BP K3, 98800 Nouméa cedex, Nouvelle Calédonie

Page 41

 

 

Fax: +687.25.84.59

Attention: Bernard Monteilh

And copied to

BNP Paribas-Capstar Partners

37 place du Marché Saint Honoré

75031 Paris Cedex 01, France

Facsimile number: +33 1 42 98 12 03

Attention: Khalid Ammari

Lessee:

Goro Nickel S.A.

7 bis, rue Suffren, BP218

98845 Nouméa Cedex, New Caledonia

Fax number: +687 273 710

Attention: Président Directeur Général

And copied to

Goro Nickel

38, rue du Colisée

75008 Paris, France

Attention: Directeur Général Délégué

Facsimile number: +33 1 45 63 29 97

And copied to:

Address: Inco Limited

145 King Street West

Toronto, ON, M5H 4B7, Canada

Fax number: +1 416 361 7788

Attention: Office of the Secretary

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

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

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

Page 42

 

 

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

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

Page 43

 

 

Made and executed in Paris,

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

On December 30, 2004.

	 	 	 
	/s/ Yves Roussel

	 	   /s/ Khalid Ammari
	 
	 	 
	 

	 	 
	 
	 	 
	Goro Nickel S.A.

	 	GNiFi
	 
	 	 
	Name: Yves ROUSSEL

	 	Name: Khalid AMMARI
	 
	 	 
	Position: Directeur Général Délégué

	 	Position:

Page 44

 

 

APPENDIX 1

DEFINITIONS

	 	 	 
	Abandonment

	 	means:

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

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

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

Page 45

 

 

	 	   	Notice”),

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

	 	 	 
	Add-Back Indemnity

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

	 	means the amount determined as:

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

	 	 	 
	

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

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

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

Page 46

 

 

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

	 	 	 
	

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

	 	 	 
	Administrative
	 	 
	Authorisations

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

	 	means an appendix to this Lease.
	 
	 	 
	Applicable Law

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

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

	 	means the assumptions set out in Appendix 3.
	 
	 	 
	Authorised Activities

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

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

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

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

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

	 	means the Code Général des Impôts.

Page 47

 

 

	 	 	 
	Change in Law

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

	 	means a clause of this Lease.
	 
	 	 
	Closing Date

	 	means 30 December 2004.
	 
	 	 
	Consent Right

	 	has the meaning given to it in Clause 29.1.

	 
	 	 
	Construction

Agreement

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

Agreement

Termination Event

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

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

Acceptance

Certificate

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

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

	 	means the French Direction Générale des Impôts.
	 
	 	 
	DGI Final Approval

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

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

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

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

Page 48

 

 

	 	 	 
	Early Option Date

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

	 	means:

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

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

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

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

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

	 	 	 
	Environmental Law

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

	 	means:
	Overnight Index
	 	 

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

Page 49

 

 

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

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

	 	 	 
	Equipment

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

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

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

	 	has the meaning given to it in the Construction Agreement.

	 
	 	 
	First
Demand
Guarantee

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

	 	
	 
	 	 
	French Civil Code

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

Code

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

	 
	 	 
	French Corporate

Income Tax

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

Page 50

 

 

	 	 	 
	General Indemnity

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

Guarantor

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

means Inco and each New Participant.
	 
	 	 
	Guarantor Event of
Default

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

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

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

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

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

Amount

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

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

Intercreditor

Agreement

	 	means the insurance policies
specified in Clause 12.1.

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

Land

	 	has the meaning given to it in the Loan Agreement.

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

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

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

	 	means a Lessee Termination Event or a Lessor Termination

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	Event

	 	Event.
	 
	 	 
	Lender

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

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

Release Date

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

	 	means:

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

	 	 	 
	Lessee Termination

Event

	 	has the meaning given to it in Clause 20.2.
	 
	 	 
	Lessor

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

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

Event

	 	has the meaning given to it in Clause 20.1.

Page 52

 

 

	 	 	 
	LIBOR

	 	means:

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

	 	 	 
	Lien

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

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

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

Member

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

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

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

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

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

	 	has the meaning given to it in the Construction Agreement.

Page 53

 

 

	 	 	 
	Partial Loss

	 	has the meaning given to it in Clause 13.2
	 
	 	 
	Permitted Liens

	 	means:

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

	 	 	 
	Person

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

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

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

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

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

	 	means the Trésor Public.
	 
	 	 
	Purchase Option

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

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

Page 54

 

 

	 	 	 
	Put Option Agreement

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

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

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

	 	means the schedule set out in Appendix 5.
	 
	 	 
	Rentals Delegation

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

	 
	 	 
	Request for DGI

Final Approval

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

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

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

Completion

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

Completion Date

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

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

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

Page 55

 

 

	 	 	 
	

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

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

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

	 	means the indemnity provided under Clause 25.2.
	 
	 	 
	Tax Investors

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

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

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

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

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

	 	means the earliest to occur of:
	Compensation Payment

Date
	 	 

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

Page 56

 

 

	 	   	and

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

	 	 	 
	Termination Date

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

	 	 	 
	Termination Value

	 	shall be equal to the aggregate of:

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

	 	 	 
	

	 	in each case:

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

	 	 	 
	Termination Value

	 	means the delegation of claims (acte de délégation

Page 57

 

 

	 	 	 
	Delegation

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

	 	means:

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

	 	 	 
	

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

	 	means the transaction comprising:

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

	 	 	 
	Transaction Documents

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

	 	has the meaning given to it in Clause 16.

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	TSS

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

Dollars

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

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

Page 59

 

 

APPENDIX 2

DESCRIPTION OF THE ASSETS

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

Page 60

 

 

APPENDIX 3

ASSUMPTIONS

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

A. Overall assumptions:

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

     The projected annual deductible amounts are:

Page 61

 

 

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

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

Page 62

 

 

B. Assets assumptions:

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

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

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

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

Page 63

 

 

	 	(e)  	Other Taxes:

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

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

Page 64

 

 

C. New Caledonian assumptions:

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

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

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

Page 65

 

 

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

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

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

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

Page 66

 

 

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

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

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

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

(iii) deduct any commission or fee payable.

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

Page 67

 

 

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

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

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

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

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

Page 68

 

 

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

Page 69

 

 

Appendix 3 - Annex 0

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

Page 70

 

Appendix 3 - Annexe 1.

Projected Deductible Amounts

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

Page 71

 

Appendix 3 - Annexe 2.

Projected Loan Agreement schedule

Amount in USD

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

Page 72

 

Appendix 3 - Annexe 3.

Projected Rents

Amount in USD

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

Page 73

 

Appendix 3 - Annexe 4.

Projected Construction Agreement schedule of payments

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

Page 74

 

Appendix 3 - Annexe 5.

Projected Tax Advances

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

Page 75

 

Appendix 3 - Annexe 6.

Projected Tax
Advance Forgiveness

Amount in EUR

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

Page 76

 

 

Appendix 3 - Annexe 7.

Projected Deductible Amounts and Tax Savings of the Members

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

Page 77

 

 

Appendix 3 - Annexe B.

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

Amount in
F.CFP                                                                        0,008380

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

Page 78

 

 

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

SCHEDULES OF TERMINATION VALUES HAVE NOT BEEN INCLUDED IN THIS

CONFORMED VERSION]

Page 79

 

 

Page 80

 

 

Appendix 3 — Annexe 10.

Projected Purchase Option price

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

Page 81

 

 

Appendix 3 - Annex 11

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

CONFORMED VERSION]

Page 82

 

 

APPENDIX 4

ADJUSTMENT METHOD FOR CHANGE IN ASSUMPTIONS

(1) Reference Termination Value

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

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

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

(2) Purchase Option

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

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

(3) Change in French Corporate Income Tax:

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

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

where

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

Page 83

 

 

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

IS_Ai is the French Corporate Income Tax Assumption

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

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

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

Where:

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

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

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

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

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

Tax Advance i = Scheduled Tax Advance i * DAAi

Where

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

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

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

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

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

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

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

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

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

Where:

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

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

(5)Temporary Delay in Tax Investors Scheduled Tax Deduction

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

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

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

(6) Delay in Substantial Completion Date:

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

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

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

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APPENDIX 5

RENT PAYMENT SCHEDULE

SEE ANNEX 3 OF APPENDIX 3

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APPENDIX 6

LOAN AGREEMENT – OUTSTANDING

PRINCIPAL AMOUNT

SEE ANNEX 2 OF APPENDIX 3

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APPENDIX 7

TAX LOAN REFERENCE TV

SEE ANNEX 5 OF APPENDIX 3

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APPENDIX 8

COMPUTING OF THE RETROCESSION RATE

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

It will not be used thereafter as a parameter.

Net Present Value Benefit (NPVB):

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

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

Where,

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

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

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

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

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

Where, further to r defined above:

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

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

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

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

Retrocession Rate:

Retrocession Rate = NPVB / PVCFB

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

Page 91

 

 

APPENDIX 9

DGI FINAL APPROVAL [NOTE: FINAL

RULING NOT INCLUDED IN THIS

CONFORMED VERSION]

Page 92

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