Amendment and restatement of the Aluminium Project Framework Shareholders Agreement between SAUDI ARABIAN MINING COMPANY (MA'ADEN) and ALCOA INC (ALCOA)

EXHIBIT 10.3

 

 

Amendment and restatement of the

Aluminium  Project  Framework Shareholders Agreement

 

 

between

 

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

 

and

 

ALCOA INC (ALCOA)

 

 

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THIS AMENDMENT AND RESTATEMENT AGREEMENT (hereinafter referred to as the "Agreement"),  is made and entered into on [          ] in the Hejerian calendar, corresponding to the [          ] day of [          ] [          ] in the Gregorian calendar, by and between:

 

 

(hereinafter jointly referred to as the "Parties" or individually as a "Party").

 

RECITALS

 

 

 

 

 

NOW, IT IS  HEREBY AGREED  as follows:

 

1.DEFINITIONS AND INTERPRETATION

 

 

In this Agreement:

 

"Original Agreement" means the Aluminium Project Framework Shareholders Agreement that was entered into on on 3/1/1431 H corresponding to the 20th day of December 2009G between the  Parties as amended by the Signing Side Letter of even date (as such terms are defined in the Original Agreement).

 

"Entire Agreement" means the Original Agreement as modified by the Signing Side Letter and the First Supplemental Agreement;

 

"First Supplemental Agreement" means the First Supplemental Agreement entered into between the Parties  on 14/4/1431H, corresponding to 30th March 2010 G

 

"Parties" means the signatories to this Amendment and Restatement Agreement; and

 

 

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Subject to clause 1.1, unless the context otherwise requires, words and expressions defined and references contained in the Original Agreement have the same meanings and construction in this Agreement.

 

 

 

The Parties hereby agree to amend and restate the Entire Agreement in the form as set out in Appendix l to this Agreement and that such amendments shall be deemed to take effect as from the date of execution of this Agreement as if such amendments had been included in the Entire Agreement from such time.

 

 

 

The Provisions of the Entire Agreement shall, except where expressly amended and restated under the provisions of clause 2.1 of this Agreement, continue in full force and effect in accordance with their terms.

 

 

 

Any notices to be given under or in connection with this Agreement shall be given in accordance with the requirements set out in Clause 23.1 of the Entire Agreement.

 

 

This Agreement may be executed in any number of counterparts and by the parties to it on separate counterparts and each such counterpart shall constitute an original of this Agreement but  all of which together constitute one and the same instrument. This Agreement shall not be effective until each party has executed at least one counterpart.

 

 

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This Amendment shall be governed by, construed and interpreted according to English law and, for the avoidance of doubt, the dispute mechanisms in Article 21 of the Entire Agreement shall apply to this Amendment as though incorporated herein.

 

 

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its duly authorized representative as of the date first above written.

 

 

SUDI ARABIAN MINING COMPANY ALCOA INC (MA'ADEN)

 

 

 

 

 

 

     By    ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ – President     By      ▇▇▇ ▇▇▇▇▇▇▇▇                              

 

 

     Signed   /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇           Signed /s/ ▇▇▇ ▇▇▇▇▇▇▇▇                      

 

 

 

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APPENDIX 1

AMENDED AND RESTATED

ALUMINIUM PROJECT FRAMEWORK SHAREHOLDERS' AGREEMENT

 

 

ALUMINIUM PROJECT FRAMEWORK SHAREHOLDERS' AGREEMENT

 

 

between

 

 

SAUDI ARABIAN MINING COMPANY (MA'ADEN)

 

 

and

 

 

ALCOA INC.

 

 

 

 

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ALUMINIUM  PROJECT  FRAMEWORK AGREEMENT

THIS  FRAMEWORK  AGREEMENT  (hereinafter  referred  to as the "Agreement"),  is made and entered into on                         H, corresponding to the          day of          2009 G, by and between:

 

 

(hereinafter jointly referred to as the "Parties" or individually as a "Party").

RECITALS:

 

 

 

 

 

 

 

 

NOW, THEREFORE, in consideration of the covenants contained herein, the Parties hereto agree as follows:

 

 

 

Whenever used herein and written in initial capital letters, the following terms shall have the meanings respectively defined:

 

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"Act of Insolvency" means, in respect of any person, the occurrence of one or more of the following events (or any event analogous to the following events in any jurisdiction):

 

 

 

 

 

 

 

and such action, legal proceedings or other procedure or step is acquiesced to by such person or shall result in the entry of an order for relief or shall remain undismissed for sixty (60) days;

 

"Additional Pre-Incorporation Costs" shall bear the meaning given in Clause 13.l(a):

 

"Additional Term" shall bear the meaning set out in Clause 2.2(b):

 

"Adherence Agreement" shall bear the meaning set out in Clause 4.8;

 

"Affiliate" means, in relation to any person, any entity which Controls, or is directly or indirectly Controlled by or under common Control with, such person, provided that (i) no Company shall be deemed to be an Affiliate of any Party, and (ii) no person shall be deemed to be an Affiliate of another person solely because both persons are under common Control of the Government of the Kingdom;

 

"Agent" means any person engaged to obtain business or regulatory advantage, develop customer relationships, or interface with Governmental Authorities and/or Government Officials;

 

"Agreed Form" means a form of document which has been agreed by or on behalf of the parties thereto and initialled by or on behalf of the parties thereto for the purposes of identification;

 

"Agreed Pre-Incorporation Costs" shall bear the meaning given in Clause 13.(a);

 

"Agreement" means this Framework Agreement;

 

"Alcoa" has the meaning set out in the parties clause;

 

"Alcoa Existing Project Assets" shall bear the meaning set out in Clause 6.2;

 

"Alcoa LOC" shall bear the meaning given in Clause 5.12(c):

 

"Alumina" means alumina produced by the Refinery as described in Clause 3.6(b)(ii):

 

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"Aluminium" means aluminium produced by the Smelter (and does not include the products of the Rolling Mill) as described in Clause 3.6(b)(iii);

 

"Applicable Laws" means all legally binding and applicable laws, decrees, directives, orders, regulations or rules of any Governmental Authority, including (for the avoidance of doubt) laws relating to the prohibition of the corruption of public officials which are applicable to the relevant Party, Shareholder, Affiliate or Company (as the case may be) such as the U.S. Foreign Corrupt Practices Act;

 

"Ancillary Agreements" means the agreements set out in Part 1 of Schedule 9 and any other agreements that the Parties may agree to identify as Ancillary Agreements from time to time;

"Annual Programme and Budget" shall bear the meaning set out in Clause 12.8(a);

 

"Approved Accounting Firm" means an internationally recognised accounting firm as mutually agreed between the Parties or, failing agreement within five (5) Business Days of being required to agree such firm, any firm from among the largest four international accounting firms at the relevant time;

 

"Articles of Association" means the articles of association of a particular Company in effect from time to time;

 

"Auditors" means an Approved Accounting Firm providing audit services that has been appointed in accordance with this Agreement to audit the financial statements of a particular Company and otherwise to perform the functions of an auditor as set out herein;

 

"Base Case Model" means the base case financial model for each of the Phases which is to be developed and approved by the Parties or, following incorporation of a particular Company, the Board of Managers of that Company by the milestone dates therefor set out in Schedule 15, as the same may be amended, modified, implemented or replaced from time to time in accordance with this Agreement;

 

"Bauxite" means bauxite extracted from the Mine as described in Clause 3.6;

 

"Board of Managers" or "Board" means the board of managers from time to time of a particular Company appointed in accordance with this Agreement and the Articles of Association;

 

"Break-Off Project" shall bear the meaning set out in Clause 5.10(a);

"Break-Off Project Notice" shall bear the meaning set out in Clause 5.10(a);

 

"Break-Off Right" shall bear the meaning set out in Clause 5.10(a);

 

"Break-Off  Project Company" shall bear the meaning set out in Clause 5.10(a);

 

"Budget" means the Project Budget, an Annual Programme and Budget or a Special Programme and Budget and "approved Budget" means a Budget of a particular Company that is approved by the Parties and/or the Board of Managers of that Company (as applicable) in accordance with this Agreement;

 

"Business Day" means any day on which banks in the Kingdom and New York, U.S.A. are generally open for business and on which instructions to transfer same-day funds can be executed;

 

"Calculation Date" shall bear the meaning set out in Clause 13.l(a):

 

"Call Date" shall bear the meaning set out in Clause 14.3(a)(i);

 

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"Cash Call" means all calls for (a) Equity Subscriptions and (b) if determined by the Parties in accordance with this Agreement, advances under Shareholder Loans, made by the relevant Board of Managers to the Parties in their respective Shareholder Percentages in accordance with Clause 4;

 

"Cast House" means the casting facilities owned and operated by the Smelter, in accordance with the Cast House Users' Agreement substantially in the form of Schedule 6.

 

"Chairman" means the chairman of the relevant Board of Managers;

 

"Closing Date" shall bear the meaning set out in Clause 14.3(a)(iv);

 

"Commercial Production Date" means the later of, (a) in respect of the Mine, the Refinery and the Smelter, the last day of the period of the first three (3) months of continuous and stable operations of each of the Mine, the Refinery and the Smelter at not less than ninety percent (90%) capacity, as determined by the Parties on written advice from each relevant Board of Managers; and (b) in respect of the Rolling Mill, after all major pieces of equipment and all instrumentation and systems related to process and quality control successfully complete acceptance testing, the date at which the first customer has given acceptance of qualification for supply of beverage can stock, provided that for the purpose of Clauses 8.5(b)(iv), l 2.3(d)(iii) and l 8.4(c) it shall mean the above date applicable to the relevant Company;

 

"Commercial Register" means the commercial register at the Ministry;

 

"Commercial Registration" means registration of a particular Company on the Commercial Register;

 

"Commission Rate" means a commission rate which is calculated as being equivalent to:

 

 

 

 

"Commitment Date" shall bear the meaning set out in Clause 3.3(b):

 

"Companies11 and "Company" shall each bear the meaning set out in Recital D;

 

"Company Law" means the Saudi Arabian Regulations for Companies, Royal Decree No. M/6 dated 22/3/1385H, as amended from time to time;

 

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"Company Policies" shall bear the meaning set out in Clause 8.9;

 

"Completion Agreements" means any and all completion debt service undertakings and/or obligations to fund construction cost overruns up to an agreed maximum amount granted by the Parties or members of their respective groups for the benefit of Senior Lenders in connection with the Senior Debt for the Project;

 

"Complex" means the manufacturing facility to be constructed by the Companies for the production of the Products, at Ras Az Zawr in the Kingdom, including the Refinery, Smelter and Rolling Mill together with certain related facilities to be owned by each relevant Company, as further described and defined in Schedule 7:

 

"Confidentiality & Non-Disclosure Agreement" means the confidentiality and non-disclosure agreement dated 26/4/1430 H, corresponding to 22/4/2009 G, between Ma'aden and Alcoa;

 

"Construction Agreement" means (i) any engineering, procurement and construction contract entered into by a particular Company in respect of any material component of the Project or any relevant Expansion, (ii) any engineering, procurement and construction management (EPCM) contract entered into by a particular Company in respect of any material component of the Project or any relevant Expansion or (iii) any contract, agreement or arrangement substantially similar to the foregoing;

 

"Control" shall mean in relation to any non-natural person (the "First Person"), the right of another person or persons acting together, whether in law or in fact (including by way of contract), to secure by means of the holding of shares bearing fifty percent (50%) or more of the voting rights attaching to all the shares in the First Person, or by having the power to control the composition of the board of managers/directors or other governing body of the First Person, that all or a substantial proportion of the affairs of the First Person are conducted in accordance with the wishes of that person or persons acting together, and the expressions "Controls" or "Controlled" shall be construed accordingly;

 

"Cure Period" shall bear the meaning set out in Clause 14.4(e)(ii):

 

"Deadlock" shall bear the meaning set out in Clause 9.1(a):

 

"Deadlock Committee" shall bear the meaning set out in Clause 9.2(b)(i):

 

"Deadlock Referral Notice" shall bear the meaning set out in Clause 9.2(a):

 

"Deadlock Resolution Procedure" shall bear the meaning set out in Clause 9.2(b):

 

"Default Amount" shall bear the meaning set out in Clause 14.1(a);

 

"Default Commission" shall bear the meaning set out in Clause 4.5;

 

"Default Notice" shall bear the meaning set out in Clause 14.4(a);

 

"Defaulting Party" shall bear the meaning set out in Clause 14.1;

 

"Development Committee" shall bear the meaning set out in Clause 3.1;

 

"Development Committee Funding Call" shall bear the meaning set out in Clause 4.2(a);

 

"Distribution" means: (i) any Share Distribution; (ii) any payment by a particular Company to any of its Shareholders or any of that Shareholder's Affiliates in respect of any Shareholder Loan; or (iii) any payment by a particular Company of any other amount (including by way of loan) to any of its

 

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Shareholders or any of that Shareholder's Affiliates (other than pursuant to the terms of any Project Agreement);

 

"DZIT" means the Department of Zakat and Income Tax of the Kingdom;

"EBIT" means earnings before interest and taxes;

 

"Effective Date" shall mean the date determined in accordance with Clause 2.1;

 

"Encumbrance" means any interest or equity of any person (including any right to acquire, option or right of pre emption) and any mortgage, charge, pledge, lien (other than liens arising by operation of law and securing indebtedness arising in the ordinary course of business not more than seven (7) days overdue), assignment, hypothecation or other priority interest, deferred purchase,  title retention, rental, hire purchase, conditional sale, trust, leasing, sale and repurchase and sale and leaseback arrangements, rights of set off and any other agreement or arrangement whatsoever having the same commercial or economic effect as security (including any hold back or "flawed asset" arrangement) over or in any property, asset or right of whatsoever nature and including any agreement for any of the foregoing;

 

"Entry Payment" shall bear the meaning set out in Clause 13.1(b):

 

"Equity Subscription" means the subscription by the Parties (or any of them) directly or through any of their respective Affiliates for additional Shares on the basis of a subscription price of ten thousand Saudi Riyals (SR10,000) per Share, or such other basis as may be approved by the relevant Board in accordance with this Agreement and the Applicable Laws of the Kingdom;

 

"Estimate of Project Costs" means the Parties' estimate as at the Effective Date of the Project Costs, as may be amended from time to time by mutual agreement of the Parties, as more fully described in Part 1 of Schedule 10 and which shall be superseded by the Project Budget;

"Event of Default" shall bear the meaning set out in Clause 14.1;

 

"Excess Alumina" means, in any period, any Alumina produced at the Refinery that is not required for the production of Aluminium at the Smelter and/or to maintain normal Alumina inventory levels during such period;

 

"Expansion"  shall bear the meaning set out  in Clause 5.9(a);

 

"Fair Market Value" shall bear the meaning set out in Clause 18.1;

 

"Financial Close" means the date on which all conditions precedent to first draw down under the Financing Agreements for the relevant Phase of the Project have been satisfied or, if capable of waiver, waived;

 

"Financial Year" means the financial year of a particular Company from January 1 to December 31 each year;

 

"Financing Agreements" means the credit agreements and associated documents entered into or to be entered into by a particular Company pursuant to which credit facilities will be made available to such Company in connection with the Project;

 

"Financing Completion Date" shall mean the date on which the Financing Agreements are signed on behalf of each relevant Company and the Senior Lenders for the relevant Phase;

 

"Financing Longstop Date" means 31 December 2010 being the date by which the Parties require the Financing Completion Date for Phase I to have occurred as may be extended in accordance with Clause  15.1(a);

 

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"Financing Plan" means the financing plan to be developed by the Parties for each Phase and which is intended to be approved by the Parties by the milestone date therefor set out in Schedule 15;

"Foreign Investment Licence" means the foreign investment licence issued by SAGIA authorizing the formation of a particular Company, as the same may be amended from time to time;

 

"Free Cash" in respect of each relevant Financial Year, means (i) the net profit after allowing for Income Tax and Zakat of a particular Company for such Financial Year as reflected in the audited financial statements of that Company for such Financial Year, (ii) plus depreciation and amortization, (iii) plus adjustments for movement between opening and closing working capital, (iv) less amounts disbursed in the Financial Year on account of capital expenditures, (v) less amounts paid by that Company in respect of such Financial Year pursuant to Clause 11.3, and (vi) less amounts paid or reserved for repayment of debt, (vii) plus cumulative undistributed Free Cash from previous Financial Years;

 

"Funding Deadline" shall bear the meaning set out in Clause 4.4(a)(ii);

 

"Funding Default" shall bear the meaning set out in Clause 14.1(a);

 

"Gas Allocation Letter" means the gas allocation letter dated 28/10/1430 H, corresponding to 17/10/2009 G, reference 3157/P/F, as may be amended from time to time, in respect of the Project from Saudi Aramco (based on the authorisation of the Ministry of Petroleum) to Ma'aden and SWCC, a copy of the current version of which is attached at Schedule 4;

 

"Gate 3 Review" means the formal review of the final feasibility report produced at the completion of the stage 2 engineering for each component of the Project in accordance with the agreed stage gate process. This report shall describe the basic engineering of the facilities, class 1 cost estimate within a range of +/- ten percent (10%) (or such other level as agreed by the Parties), HAZOP study, technical and financial risk assessment, constructability and operability review, operational readiness review, level I master schedule, value improving processes, final project execution plan, EPC/EPCM contract documentation and any other items as agreed by the Parties;

 

"GCC countries" means Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates and any other country which may be designated as a Gulf Cooperative Country from time to time;

 

"Governmental Authority" means any court or governmental authority, department, commission, board, agency or other instrumentality of any country or jurisdiction or any part thereof having jurisdiction over this Agreement, a Company, a Shareholder, a Party or any asset or transaction contemplated by this Agreement;

 

"Government Official" means an employee, officer or representative of, or any person otherwise acting in an official capacity for or on behalf of a Governmental Authority;

 

"IFRS" shall bear the meaning set out in Clause 12.1;

 

"Initial Term" shall bear the meaning set out in Clause 2.2(a);

 

"Intellectual Property" means rights in and in relation to confidential information, trade marks, service marks, trade and business names, logos and get up (including any and all goodwill associated with or attached to any of the same), domain names, patents, inventions (whether or not patentable), registered designs, design rights, copyrights (including rights in software) and moral rights, database rights, semi-conductor topography rights, utility models and all rights or forms of protection having an equivalent or similar nature or effect anywhere in the world, whether enforceable, registered, unregistered or registrable (including, where applicable, all applications for registration) and the right to ▇▇▇ for damages for past and current infringement (including passing off and unfair competition) in respect of any of the same;

 

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"IP Information" shall bear the meaning set out in Clause 26.4(d):

"Joint Venture" shall bear the meaning set out in Recital A;

"Kingdom" means the Kingdom of Saudi Arabia;

 

"KSA Controlled Transferee" shall bear the meaning set out in Clause 17.3(a):

 

"LME" means the London Metals Exchange;

 

"London Banking Day" means any day on which banks in London, England are generally open for business;

 

"Ma'aden" has the meaning set out in the parties clause;

 

"Ma'aden  Existing Project Assets" shall bear the meaning set out in Clause 6.l(a):

 

"Ma'aden LOC" shall bear the meaning given in Clause 5.12(a):

 

"Manager" means a member from time to time of the relevant Board of Managers;

 

"Material Adverse Effect" means any effect or result which is, or is reasonably likely to be, materially adverse to the business, operations, assets, liabilities, properties, financial condition, effective management, results or prospects of a particular Company or a subsidiary Controlled by such Company (if any);

 

"Material Breach" shall bear the meaning set out in Clause 14. l(d);

 

"Mine" means the Al Ba'itha mine in the Kingdom for extracting approximately 4,000,000 tpa of bauxite as more fully described in Schedule 8. as modified pursuant to any Expansion that may occur in accordance with this Agreement;

 

"Mining & Refining Company" shall bear the meaning set out in Clause 3.5 (c);

 

"Mining Licenses" means the mining and quarrying licenses in respect of the Mine referred to in Schedule 8 and included in Schedule 11;

 

"Ministry" means the Ministry of Commerce and Industry of the Kingdom;

 

"Ministry of Petroleum" means the Ministry of Petroleum and Mineral Resources of the Kingdom;

 

"MOU" shall bear the meaning set out in Recital B;

 

"Non-Defaulting Party" means the Party who is not the Defaulting Party;

 

"Notice of the Right to Match the Offer" shall bear the meaning set out in Clause 17.6:

"NTP for Phase l" means an irrevocable written notice to proceed in full or substantially in full with construction or similar steps given by the relevant Company pursuant to the Construction Agreements in respect of Phase 1 in accordance with Clause 3.3;

 

"Offer" shall bear the meaning set out in Clause 17.4;

 

"Offtake Agreements" means the offtake agreements in the Agreed Form in respect of Aluminium and the Excess Alumina to be entered into by the relevant Companies with each of the Parties;

"Other Project Agreements" means the Project Agreements set out in Part 2 of Schedule 9;

 

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"Paid In Capital" means the aggregate amount of money paid by each Party directly or through any of their respective Affiliates to a Company in connection with the subscription for Shares by such Party or Affiliates in that Company from time to time in accordance with this Agreement including the amount of money set out under the headings "Paid In Capital" in Clause 4.1;

 

"Phase" means Phase 1 or Phase 2, as the case may be and "Phases" means both  Phase 1 and Phase 2;

 

"Phase l" means (following the Gate 3 Review) the design, construction and operation of the Smelter and the Rolling Mill;

 

"Phase 2" means (following the Gate 3 Review) the design, construction and operation  of  the  Mine and  the Refinery;

 

"Pre-Financing Budget" means the development budget for the Project detailing the Project Costs which the Parties have incurred and estimate will be likely to be incurred on the Project up to Financial Close for each Phase, including an appropriate level of contingency, as attached in Part 2 of Schedule 10;

 

"Pre-Incorporation Costs" means the aggregate of the costs properly incurred by a Party prior to the incorporation of each Company in accordance with Clause 13;

 

"Pre-Incorporation Materials" means the relevant documents and materials developed by the Parties jointly or otherwise provided by a Party for the purposes of the Project prior to the incorporation of the Companies;

 

"President" means the president of a particular Company as appointed in accordance with Clause 8.3(a);

 

"Product" or "Products" means Alumina, Aluminium and Rolling Mill products produced at the Complex as described in Clause 3.6;

 

"Project" shall bear the meaning set out in Recital A;

 

"Project Account" means the joint bank account set up by the Parties for the purposes of funding Project costs approved by the Parties through the Development Committee prior to the incorporation of each particular Company and appointment of the Board of such Company;

 

"Project Agreements" means the agreements entered into or to be entered into by a particular Company and/or the Parties and/or either of the Parties (on behalf of that Company) in connection with the Project, with the inclusion of the Anci11ary Agreements, the Other Project Agreements, the Financing Agreements and any other agreements which are identified as Project Agreements in accordance with the terms of this Agreement;

 

"Project Budget" means the overall budget of the Project Costs for the Project to be developed and approved by the Parties by the milestone date therefor set out in Schedule 15, as may be amended, modified, implemented or replaced from time to time pursuant to a resolution of the Parties pursuant to Clause 7.2 and which shall supersede the Pre-Financing Budget and the Estimate of Project Costs;

 

"Project Costs" means the total costs of the Project, including direct project costs, contingency, owner's development costs, penalties for delay to implement the Project by required deadlines, interest due on construction and other financing costs and net working capital funding requirements;

 

"Project Model" means the financial model for the Project at the Effective Date referred to in Part 3 of Schedule 10 from which the Base Case Model will be developed by the Parties;

"Project Steering Committee" shall bear the meaning set out in Clause 8.10;

 

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"Proposed Resolution" shall bear the meaning set out in Clause 9.l(a);

 

"Ras Az Zawr Site" means that portion of the industrial area at Ras Az Zawr as described in Schedule 7;

 

"Refinery" means the refinery to be constructed in Ras Az Zawr in the Kingdom initially to produce approximately 1,800,000 tpa of alumina, as more fully described in Schedule 7, as modified pursuant any Expansion that may take place in accordance with this Agreement;

 

"Remaining Party(s)" shall bear the meaning set out in Clause 17.5;

 

"Required Shareholder Funding" shall bear the meaning set out in Clause 4.2;

 

"Right to Match the Offer Period" shall bear the meaning set out in Clause 17.7(a):

 

"Rolling Company" shall bear the meaning set out in Clause 3.5 (c);

 

"Rolling Mill" means the rolling mill to be constructed at Ras Az Zawr in the Kingdom initially to produce approximately 250,000 tpa, which may be increased to 460,000 tpa of rolling mill product, as more fully described in Schedule 7. as modified pursuant to any Expansion that may take place in accordance with this Agreement;

 

"SAGIA" means the Saudi Arabian General Investment Authority;

 

"Saudi Riyal" or "SR" means the lawful currency of the Kingdom;

 

"Security Interest" shall bear the meaning set out in Clause 4.7;

 

"Selling Party" shall bear the meaning set out in Clause 17.4;

 

"Senior Debt" means the financing provided by the Senior Lenders for the Project;

 

"Senior Lenders" means one or more commercial banks, Islamic finance participants, Saudi Arabian public financing institutions and other financial institutions and/or capital markets investors (which for the avoidance of doubt, may include one or more of the Parties and any of their Affiliates) providing debt finance in respect of the Project other than in respect of Shareholder Loans;

 

"Senior Lenders Commitment Letters" means the letters issued by prospective Senior Lenders evidencing a commitment to provide Senior Debt to the relevant Companies undertaking the relevant Phase of the Project;

 

"Senior Officers" means the President and other senior officers of a particular Company as set out in Clause 8.3(a);

 

"Share" means  any share  of  SRI0,000  each in the  capital of any Company, and "Shareholding"

shall be construed accordingly;

 

"Share Capital" means the capital which constitutes the Paid In Capital from time to time of a Company as set out in its Articles of Association;

 

"Share Distribution" means any dividend (in cash, property or otherwise) or any other distribution or payment made by a particular Company on or in respect of its Shares, including any distribution of the distributable profits of such Company, or any distribution of the assets of such Company upon any liquidation or winding up of such Company;

 

"Shared Services Agreement" shall have the meaning set out in Clause 5.10(b):

 

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"Shareholder" means any person directly holding Shares from time to time in accordance with the terms of this Agreement;

 

"Shareholder Loan" means a subordinated interest free loan by a Shareholder or its Affiliate to a Company pursuant to a Shareholder Loan Agreement;

 

"Shareholder Loan Agreements" shall bear the meaning set out in Clause 4.3;

 

"Shareholder Percentage" means, in respect of a Party, the amount (expressed as a percentage) equal to (a) the total Paid In Capital by such Party or its Affiliate in a Company at such time, divided by (b) the total Paid In Capital by all the Shareholders in such Company at such time, and "Shareholder Percentages" collectively refers to the Shareholder Percentage of each of the Parties, which, at the time of formation of a Company, are as set out in Clause 4.1;

 

"Smelter" means the smelter to be constructed in Ras Az Zawr in the Kingdom initially to produce approximately 740,000 tpa of aluminium, as more fully described in Schedule 7. as modified pursuant any Expansion that may take place in accordance with this Agreement;

 

"Smelter Onsite Services Agreement" or "Smelter OSA" means the agreement for the provision of onsite services to the Company by Rio Tinto Alcan Inc. relating to aluminium smelting technologies, as more fully described in Part 2 of Schedule 9;

 

"Smelter Technology Transfer Agreement" or "Smelter TT A" means the agreement for the licensing of certain of Aluminium Pechiney's Intellectual Property in aluminium smelting technologies and provision of related services to a particular Company, as more fully described in Part 2 of Schedule 9;

 

"Smelting Company" shall bear the meaning set out in Clause 3.5 (c):

 

"SOCPA" shall bear the meaning set out in Clause 12.1;

 

"Special Programme and Budget" shall bear the meaning set out in Clause 12.8(a);

 

"SWCC" means the Saline Water Conversion Corporation in the Kingdom;

 

"Transfer Date" means, in respect of any transfer of Shares, the date of signature before the competent notary public in the Kingdom of the amendment of the Articles of Association necessary to give effect to such transfer in accordance with Clause 17.9;

 

"Transferable Interests" means, in respect of any Party, all Shares and Shareholder Loans held by such Party and its Affiliates;

 

"Transfer Notice" shall bear the meaning set out in Clause 17.5;

 

"US Dollar" or "US$" shall mean the lawful currency of the United States of America;

"Value Added Project" means any capital investment project to be implemented after the date of this  Agreement  and   which  is  intended   to  be  located  within  the  Kingdom   which  relates to

(a)downstream add-on products which could be produced using outputs generated by the Project (for  the  avoidance  of  doubt,  not  including  the   Rolling  Mill   or  any  Expansions  thereto) or

 

"Valuer" shall bear the meaning set out in Clause 18.2; and

 

"year", "month", "week" and "day" mean a calendar year, calendar week. calendar month and a calendar day respectively of the Gregorian calendar.

 

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In this Agreement:

 

 

 

 

 

 

 

 

 

Except insofar as this Agreement expressly provides that a third party may in his own right enforce a term of this Agreement, a person who is not a party to this Agreement has no right to rely upon or enforce any term of this Agreement.

 

Effective Date

 

 

 

 

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Alcoa shall procure the issuance by its ultimate parent company of a parent company guarantee in respect of its Affiliates that are Shareholders in a Company in the form set out in Schedule 1. Such parent company guarantee shall be issued to Ma'aden prior to or simultaneously with the first issuance of Shares to any Alcoa Affiliate.

 

 

 

The Parties shall proceed to incorporate each Company and appoint the relevant Board of Managers as soon as possible after the Effective Date. If it is not practicable to incorporate a Company immediately following the Effective Date then, for the period between the Effective Date and the incorporation of such Company and appointment of its Board of Managers, a project development committee (the "Development Committee") shall be formed by the Parties for the overall co­ ordination of the development of the project in the period up to incorporation of such Company and appointment of its Board of Managers. The Development Committee shall have the authority and duties and shall act in accordance with the procedures set out in Part 1 of Schedule 13.

 

The Development Committee shall be subject to the same Company Policies as described in Clause 8.9 of the Agreement once such policies are determined by the Parties.

 

 

Prior to the Effective Date, the Parties have agreed on:

 

(i)the Estimate of Project Costs;

 

(ii)the Project Model; and

 

(iii)the Pre-Financing Budget.

 

 

 

 

 

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after the Parties have consented thereto, such consent not to be unreasonably withheld, conditioned or delayed. Promptly following approval of the Articles of Association by the Ministry, the Parties will cause the authorized representatives of the relevant Shareholders to execute the Articles of Association before the competent notary public in the Kingdom and thereafter shall take such further actions as shall be necessary to complete the incorporation and registration of each Company in the Commercial Register as soon as possible, and in accordance with the requirements of Clauses 3.5, 3.6 and 4.1 (a).

 

The Parties acknowledge and agree that:

 

 

 

 

 

 

 

 

 

 

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(i) In the case of the Mining & Refining Company:

 

 

(iii)In the case of the Rolling Company:

 

 

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In the event that the Parties determine that a Cash Call issued by a particular Board of Managers should comprise in whole or part Shareholder Loans, the Parties shall procure that the Shareholders shall each, and shall also procure that such Company shall, within fifteen (15) days of the request by the Board of Managers to do so, execute one or more subordinated loan agreements between the relevant Shareholders and such Company (the "Shareholder Loan Agreements") requiring the relevant Shareholders, conditional on achieving the Financing Completion Date for the relevant Phase, to advance amounts to such Company  pursuant  to  Cash  Calls  in  accordance  with  Clause 4.2(b).

 

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If a Shareholder fails to pay or advance an amount in accordance with this Clause 4 by the Funding Deadline or the deadline specified in Clause 4.2(a) (in the case of a Development Committee Funding Call), the unpaid amount of such Required Shareholder Funding or under such Development Committee Funding Call (as the case may be) shall bear a commission  (the "Default

 

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Commission") from and after the date due to the date such amount is paid at a rate per annum equal to the Commission Rate plus two percent (2%), payable upon demand by the relevant Company or the non-defaulting Shareholder or, failing such demand, monthly in arrears. Any calculation of Default Commission under this Clause 4.5 shall be made on the basis of the actual number of days elapsed and a three hundred and sixty (360) day year.

 

No Party, nor any of its Affiliates that are Shareholders in a particular Company, shall be under any obligation to provide  funding,  directly or  indirectly,  to a Company  except  pursuant  to this Clause 4 or Clause 10.

 

Except as required pursuant to, and subject to, the terms of the Financing Agreements, no Shareholder may pledge, mortgage, charge or grant any other security interest ("Security Interest") over all or any part of its Shares or Shareholder Loans unless such Shareholder obtains the prior written consent of the other Shareholder to such Security Interest.

 

 

Subject to Clause 4.9(b), a person who is not a Shareholder shall not acquire, or be permitted to acquire, any Shares or Shareholder Loans in a Company: (1) other than in accordance with and pursuant to the provisions of this Agreement; and (2) unless such person shall have first executed an Adherence Agreement to this Agreement in the form attached hereto as Schedule 5 ("Adherence Agreement") on or prior to the completion of such acquisition of any Shares or Shareholder Loans. Without limiting the foregoing, Alcoa intends to hold its Shares in each of the Companies through an Affiliate and shall procure that each such Affiliate shall enter into an Adherence Agreement on or prior to the issuance of any Shares to such Affiliate. The Parties acknowledge that on receipt of an Adherence Agreement in accordance with the terms of this Agreement, a New Shareholder (as defined in the form of the Adherence Agreement) shall be deemed to have been added as a party to this Agreement and all references to Shareholder or Shareholders, shall include the New Shareholder.

 

 

 

 

 

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The organization, development, and operation of each Company and the Project will capitalize on the strengths and experience brought by each of the Parties, who will provide such assistance pursuant to the terms of this Agreement and the Ancillary Agreements.

 

 

 

Alcoa acknowledges and agrees that Ma'aden possesses extensive experience and know-how in respect of mining, infrastructure, local regulatory compliance, local procurement of goods and services, land related matters and project development in the Kingdom. Accordingly, the Parties shall ensure that each Company shall consult with Ma'aden, and Ma'aden (or as the case may be, its Affiliates) shall provide assistance and support to such Company and, as applicable, shall perform other specified services and obligations, with respect to such matters in the manner provided in, and upon and subject to the terms and conditions of, this Agreement and the relevant Ancillary Agreements entered into by Ma'aden (or as the case may be, its Affiliates) in the Agreed Forms, in accordance with Schedule 9. Such assistance and support and other obligations shall be performed on an "at cost" basis except where an arm's length Ancillary Agreement is to be entered into in accordance with Schedule 9. For the purposes of this Clause 5.2, "at cost" means: in relation to services and support provided by Ma'aden's or its Affiliates' personnel, the costs attributable to base salary plus benefits and burdens of such personnel for the periods in which such services and support are being performed; and in relation to other services and support, the actual direct costs properly incurred by Ma'aden or its Affiliates to third parties in performing the same.

 

Ma'aden acknowledges and agrees that Alcoa possesses extensive experience and know-how with respect to bauxite mining, alumina refining, aluminium smelting and rolling mill operations. Accordingly, the Parties shall ensure that each Company shall consult with Alcoa, and Alcoa (or, as the case may be, its Affiliates) shall provide assistance and support to such Company and, as applicable, shall perform other specified services and obligations, with respect to such matters provided in, and upon and subject to the terms and conditions of, this Agreement and the relevant Ancillary Agreements entered into by Alcoa (or its Affiliates) in the Agreed Forms, as more particularly described in Schedule 14. Such assistance and support and other obligations shall be performed on an "at cost" basis except where an arm's length Ancillary Agreement is to be entered into in accordance with Schedule 9. For the purposes of this Clause 5.3 and Clause 16.4, "at cost" means: in relation to services and support provided by Alcoa's or its Affiliates' personnel, the costs attributable to base salary plus benefits and burdens of such personnel for the periods in which such services and support are being performed and subject to grossing up such costs to the extent that withholding tax is payable in respect of such costs; and in relation to other services and support, the actual direct costs properly incurred by Alcoa or its Affiliates to third parties in performing the same.

 

 

 

29

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pro rata share (based on their Shareholder Percentage) of each type of Aluminium product produced by the Smelting Company.

 

 

 

 

 

 

 

 

 

 

 

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under the relevant Construction Agreements for the Break-Off Project is not given within eighteen (18) months of the date of the Break-Off Project Notice. For the avoidance of doubt, if any Break-Off Right so terminates, the proposed Expansion (or any Expansion substantially similar to such proposed Expansion) must again be submitted to the relevant Company in accordance with Clause 5.9.

 

 

 

 

 

 

 

 

 

 

For the purpose of this Clause 5.10(b)(iii). services, leases, easements and utilities shall be provided on a "full cost" basis (including capital and operating costs). If so required by the Break-Off Project, any intermediate Products, intellectual property licences or other rights and facilities shall be provided on a reasonable basis to be agreed with reference to the cost to the relevant Company of providing such, as well as to the advantage to the Break-Off Project in receiving rather than resorting to a third party provider (if available).

 

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The Parties shall ensure that the Shared Services Agreement shall contain provisions requiring the Break-Off Project Company to comply with detailed reporting requirements, including as regards submitting to the relevant Company monthly progress reports during the  pre-commercial operation phase of the Break-Off Project and quarterly operations reports post commercial operation of the Break-Off Project. All  reports shall be  in such  form  and  provide such  information  as is customary and shall further contain such additional information  as  the  relevant  Company  may  reasonably request  from time to time.

 

 

 

 

 

 

 

 

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that Party, Shareholder or Company, as the case may be, shall promptly inform the Board of the relevant Company.

 

 

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compliance or regulatory requirement of such Company or Party under Applicable Laws, the Parties shall co-operate with one another and the Company in relation to that enquiry or request for information. Upon request by a Party or a Company, as the case may be, the other Party (or Parties in the case of a request made by a Company) shall provide all reasonable information and assistance required by such Party or Company in respect of such enquiry or request for information.

 

 

 

 

 

 

 

 

 

 

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The Shareholders shall act through general meetings and resolutions duly held and adopted in accordance with the terms and conditions of this Agreement, the Articles of Association and Applicable Laws in the Kingdom. To the extent permitted by Applicable Laws in the Kingdom, a Shareholder may participate in Shareholders' Meetings in person or by video conference or tele­ conference, and/or may appoint a proxy or proxies to represent it in such meetings.

 

 

 

 

 

 

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The resolutions of the meeting of Shareholders shall be laid down in writing in the Arabic language and the English language. For purposes of any proceedings conducted pursuant to Clause 21.3 the English language version of any such resolution shall prevail.

 

 

 

 

 

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The Party or its Affiliate being a Shareholder who appointed a Manager (or an alternate) may remove that Manager (or such alternate) at any time by written notice to the relevant Company and the other Party. In the event that a Manager is removed or resigns or becomes incapacitated or otherwise unable to serve for any reason, the Party or its Affiliate being a Shareholder who appointed him shall promptly appoint a replacement. Any Party or its Affiliate being a Shareholder removing a Manager appointed by it or them in accordance with the relevant provisions of the Articles of Association shall be responsible for and shall hold harmless the other Party and the relevant Company from and against any claim for unfair or wrongful dismissal arising out of such removal and any reasonable costs and expenses incurred in defending such proceedings, including, but without prejudice to the generality of the foregoing, legal costs actually incurred.

 

 

 

 

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remove such Senior Officer. If the Parties cannot agree on the review or removal of such Senior Officer, the Deadlock provisions of Clause 9 shall apply for a period not to exceed one (1) year; and thereafter, if the loss of faith in such Senior Officer continues, he or she will be removed from the present position, and the Party entitled to nominate such Senior Officer will nominate a replacement.

 

 

 

 

 

 

 

 

 

 

 

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The resolutions of each Board of Managers shall be written in the English language and, if Ma'aden so requires and at its cost, in the Arabic language. For the purposes of any proceedings conducted pursuant to Clause 21.3, the English language version of any such resolution shall prevail.

 

A Manager shall be entitled to supply details of any business transacted at Board meetings or committee meetings and any other information obtained by him in his capacity as a Manager, to the Shareholder by whom he was appointed or to the professional advisers of such Shareholder, subject always to the provisions of Clause 22.

 

 

The Parties and any Affiliate being a Shareholder shall endeavour to procure that the Managers and Senior Officers of each Company shall, in carrying out their responsibilities, act honestly, ethically, in good faith and in the best interests of such Company. Each Party and any Affiliate being a Shareholder shall procure that its Managers and Senior Officers do not act or fail to act in a way which would prevent any Company from exercising any right or enforcing any remedy under any Ancillary Agreement or other Project Agreement.

 

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The Parties, through the relevant Board of Managers shall procure that each Company shall adopt and be operated in accordance with the Company's policies relating to accounting, environmental matters, health and safety, corporate social responsibility, financing, cash management and disbursements, Share Distributions, procurement, human resources, hedging and risk management and business conduct as promulgated and amended by the Board of Managers from time to time (the "Company Policies").

 

In this regard, among other things:

 

 

 

 

 

 

 

 

 

 

 

The Parties shall fonn a multi-disciplinary working group (the "Project Steering Committee") for each Company which shall be responsible for advising such Company in respect of various elements of the Project. The Project Steering Committee shall be headed by the President and consist of representatives of each Party and various third party consultants to the Project. The Project Steering Committee shall report to the Board of each Company and co-ordinate with its Senior Officers in the performance of its functions. The initial charter and duties of the Project Steering Committee are set forth in Schedule 13.

 

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The Parties agree that their obligations and any Completion Agreements shall be several only and the Parties shall not be obliged to enter into any such obligations on a joint or joint and several basis.

It is the intention of the Parties in founding each Company that each Company shall be liable for its own liabilities, and that neither the Parties nor the relevant Shareholders shall assume liability for the debts and obligations of any Company except to the extent required for the procurement of limited recourse financing in connection with the Project, in accordance with the Completion Agreements and pursuant to the Financing Agreements and as may be required by Applicable Laws.

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comply with the terms of any Financing Agreements or credit facilities to which such Company is a party. If losses are incurred they shall be carried over to the next Financial Year and no profits shall be distributed until the losses are fully covered.

 

 

 

 

 

 

 

 

 

 

 

The Parties will ensure that each Company shall keep and maintain an accounting and cost accounting system allowing efficient control and allocation of all costs involved, and shall regularly

 

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report to the Parties in accordance with the requirements of all Applicable Laws of the Kingdom and a system acceptable to the relevant Board of Managers, based on generally accepted accounting standards and applicable rules and regulations applied by the Saudi Organisation for Certified Public Accountants ("SOCPA") in the Kingdom and also in the International Financial Reporting Standards as issued by the International Accounting Standards Board from time to time ("IFRS").

 

 

All reports and financial information provided to Parties and relevant Shareholders pursuant to this Clause 12 shall be prepared in Arabic and English.

 

The Parties shall procure that each Company prepares the following:

 

 

 

 

 

 

 

 

The accounting books prepared by each Company shall be in conformity with Clause 12.1 above. Each Party and each Shareholder shall be entitled to inspect the books and conduct an audit of the (i) financial affairs of a Company using its own internal audit resources or an Approved Accounting Firm, or (ii) regulatory compliance of a Company using their external legal resources, provided that such inspection and/or audit shall not unduly interfere with the operations of the relevant Company or the development and construction of the Project or any Expansion or Value Added Project pursued by such Company, and subject to such Party or Shareholder first obtaining reasonable undertakings of confidentiality from the Approved Accounting Firm or law firm conducting the inspection and/or audit. The expenses of any such inspection and/or audit shall be borne by  the Party or  Shareholder  conducting  the inspection  and/or  audit  unless the  inspection  and/or audit

 

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identifies a material error or omission in such books, financial affairs or any financial statements delivered by a Company to such Party or Shareholder in accordance with this Agreement, in which case the expenses of the Approved Accounting Firm (where so appointed) carrying out such inspection and/or audit shall be borne by such Company.

 

 

In addition to the financial statements prepared by each Company pursuant to Clause 12.3 above, the Parties shall procure that each Company prepares and files with the relevant Governmental Authorities in the Kingdom such financial information, accounts, financial statements, reports and other documents in respect of its business and activities in accordance with Applicable Laws of the Kingdom.

 

 

 

 

 

 

Nothing in this Clause 12 shall be deemed to limit the right of any Manager under Applicable Laws of the Kingdom (i) to request, obtain and examine any information relating to the business or affairs of the Company to which he has been appointed a Manager or (ii) to gain access to the premises and facilities of such Company.

 

 

 

 

 

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The following shall constitute an "Event of Default" in respect of a Party or its Affiliate holding Shares (the "Defaulting Party") for the purposes of this Agreement:

 

 

 

 

 

(14) days of a written notice thereof from the Non-Defaulting Party to the Defaulting Party.

 

 

 

The Project is an integrated project and, for the avoidance of doubt, the Parties agree that an Event of Default in respect of any Company shall be considered to be an Event of Default in respect of all Companies. If an Event of Default has occurred and is continuing in relation to the Defaulting Party then, without prejudice to the Defaulting Party's obligations under this Agreement or the remaining provisions of this Clause 14, upon written notice by the Non-Defaulting Party to the Defaulting Party:

 

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as determined (in the case of sub-clauses (iii) and (iv)) by the Valuers in accordance with the provisions of Clause 18 which provisions shall apply mutatis mutandis; and the Parties hereby acknowledge and agree that any discount contemplated by this paragraph (b) does not (and shall not be construed to) constitute a penalty imposed on Alcoa and that such discount reflects the Parties' genuine pre-estimate of the damages that Ma'aden would suffer in the circumstances contemplated by this Clause 14. In each case, any amount of accrued and unpaid Default Commission shall be deducted from the amounts otherwise payable to Alcoa. For the avoidance of doubt, the Entry Payment shall not be reimbursed in the event of any purchase of Alcoa's Transferable Interests pursuant to this Clause 14.3.

 

 

 

 

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and the application of such funds shall be deemed to discharge in full the obligations of the relevant Company to the Defaulting Party in respect of any such Share Distribution.

 

 

 

 

 

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(ii) the sum equal to the application of the Commission Rate on the Default Amount from the date of payment by the Non-Defaulting Party until the date of reimbursement by the Defaulting Party.

 

 

 

 

 

 

 

 

 

 

 

 

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Clause 14.4(f)(iii). elect to sell all (but not less than all) of its Transferable Interests to Ma'aden; and

 

 

 

 

 

 

as determined (in the case of sub-paragraph (iii)) by the Valuers in accordance with the provisions of Clause 18 which provisions shall apply mutatis mutandis. In each case, any amount of accrued and unpaid Default Commission by Alcoa shall be deducted from the amounts otherwise payable to Alcoa. For the avoidance of doubt, the Entry Payment shall not be reimbursed in the event of any purchase of Alcoa's Transferable Interests pursuant to this Clause 14.5.

 

 

 

 

 

 

If an Event of Default has occurred prior to the incorporation of any Company, the following shall apply in respect of any of the Companies which is not incorporated at such time:

 

 

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The rights, consequences and remedies as provided for in this Clause 14 shall be in addition to and not in substitution for any other remedies that may be available to a Shareholder hereunder arising pursuant to any default or failure by any Shareholder to comply with its obligations hereunder or an Event of Default or by operation of Applicable Laws (including, for the avoidance of doubt, the right of any Non-Defaulting Party to claim damages if it has suffered a loss). The exercise of such rights shall not relieve the Defaulting Party from any obligations accrued prior to the date on which the transfer(s) of Alcoa's Transferable Interests is effected, nor shall the exercise or failure to exercise such rights relieve the Defaulting Party from any liability for damages to any Non­ Defaulting Party for breach of this Agreement.

 

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Ma'aden, and Ma'aden has the obligation to purchase, all of Alcoa's Transferable Interests pursuant to Clause 15. l(b) as the case may be, the following shall apply:

 

 

 

 

 

 

 

 

 

 

 

This Agreement shall remain in full force and effect until the earlier of:

 

 

 

 

 

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Without prejudice to Clause 16.1, this Agreement shall terminate as between a Party that transfers its Transferable Interests to the other Party or to a third party in accordance with this Agreement, and the other Parties (if any), on the relevant Transfer Date, provided that the party to which such Shares have been transferred has become (or was already) a party to this Agreement.

 

 

Following termination of this Agreement pursuant to Clause 2.2, there shall be an orderly liquidation of the assets of each Company, following which each Company shalt be dissolved.

 

 

 

 

 

 

and in each case in such a manner so as to facilitate an orderly handover of activities undertaken by Alcoa personnel engaged in the Project.

 

 

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Transferable Interests in the Mining & Refining Company 60% (or more) by Alcoa and 40% by Alumina Limited);

 

 

 

 

 

A Party or its Affiliate which is a Shareholder, may transfer, or procure the transfer of, all but not less than all of its Shares and all but not less than all of its Shareholder Loans together to an Affiliate, and the provisions of Clauses 17.4 to 17.7 shall not apply to such transfer, provided that:

 

 

 

 

 

 

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Affiliate under this Clause 17.2 (but not, for the avoidance of doubt, in respect of a KSA Controlled Transferee under Clause 17.3).

 

 

(30) days' prior written notice to Alcoa of such a proposed transfer including details of the proposed KSA Controlled Transferee. Ma'aden shall procure that, as a condition to such transfer, the KSA Controlled Transferee sha11 agree to be bound by all the terms of this Agreement and shall execute an Adherence Agreement.

 

 

 

Other than as provided in Clause 17.2 and Clause 17.3 and subject to Clause 17.8, at any time after the fifth anniversary of the Commercial Production Date, any Party on behalf of itself and any Affiliate that is a Shareholder (the "Selling Party") may transfer all but not less than all of its Shares and all of the Shareholder Loans held by such Party and its Affiliates (if applicable) to a third party ("Third Party Offeror") only if it receives an offer (the "Offer") from such Third Party Offeror which:

 

 

 

 

 

and in circumstances in which the Selling Party complies with the remaining provisions of this Clause 17.

 

 

 

 

 

The Selling Party may not proceed with a sale to the approved Third Party Offeror without first giving written notice (the "Notice of the Right to Match the Offer") to the Remaining Party giving the Remaining Party the right to match the Offer (the "Right to Match the Offer"). This Notice of

 

 

 

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the Right to Match the Offer should include full details of all terms and conditions of the Offer, including the price, and a copy of the Offer.

 

 

 

 

 

All transfers of Transferable Interests pursuant to this Agreement shall be subject:

 

 

 

 

 

 

 

 

The transfer of Transferable Interests pursuant to this Agreement shall be made on the following terms:

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The Parties shall keep each Company informed, at all times, of the issue and contents of any notice(s) served pursuant to this Clause 17 and any election or acceptance relating to those notices.

 

 

The Parties shall take such action as may reasonably be required to give effect to any transfer of Shares permitted pursuant to this Clause 17 or under Clauses 14 or 15, including cooperating in obtaining approvals required from all relevant Governmental Authorities. If a Party that is entitled to acquire Shares pursuant to this Clause 17 would, as a result of such acquisition, become the only Shareholder in any Company, such Party shall have the right to designate an Affiliate to acquire a portion of the Shares which such Party is entitled to acquire.

 

 

 

 

 

 

 

 

 

 

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(3) Business Days prior to the Put Option Completion Date or the Call Option Completion Date (as applicable).

 

 

 

The Parties shall act in good faith to determine the Option Consideration and, in doing so, shall follow the approach and apply the valuation methods set out below.

 

In the event that the Parties are unable to agree the Option Consideration within fifteen (15) days of the date of the Call Option Notice or the Put Option Notice (as the case may be), the Parties shall refer the valuation to a panel of independent experts with appropriate experience in the aluminium industry (each a "Valuer"). The panel shall consist of three Valuers, one of whom shall be appointed by each Party and the third of whom, who shall act as chairman of the panel, shall be jointly nominated by the two Valuers nominated by the Parties. Failing agreement as to the identity of the third Valuer within five (5) Business Days of being required to do so, such third Valuer shall be nominated by the International Centre for Expertise in accordance with the provisions for the appointment of experts under the Rules of Expertise of the International Chamber of Commerce (who shall be instructed to nominate only a Valuer experienced in valuing rolling ▇▇▇▇▇, aluminium  smelters, alumina refineries, bauxite mines and/or associated facilities, and shall have experience in, and relevant knowledge of the Kingdom and the GCC region).

 

 

The Valuers shall be instructed to collectively submit a single Option Consideration valuation  to  the Parties within sixty (60) days of the appointment  of  the third Valuer (or

 

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such longer time as the Parties may agree) and such valuation shall be final and binding upon the Parties. The Option Consideration shall be determined on a fair value basis in accordance with Clause l 7. l 2(d) below.

 

 

In valuing the Transferable Interests which are the subject of the Put Option or Call Option, as the case may be, the Valuers:

 

 

 

 

 

 

 

 

 

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Ma'aden LOC under the Gas Allocation Letter), Ma'aden's Shareholder Percentage shall be deemed to include as between Ma'aden and Alcoa, any such Shares and Shareholder Loans held by such Saudi public companies or public funds. The Parties hereby agree to take any action which may reasonably be required in order to implement the provisions of this Clause 17.13 including (without limitation) cooperating as necessary to amend the relevant Company's foreign investment licence, articles of association and commercial registration so as to formalize the transfer of the Shares."

 

 

 

Where a provision of this Agreement calls for a determination of the "Fair Market Value" of Alcoa's Transferable Interests, the Parties shall act in good faith to make such determination and, in doing so, shall apply commonly accepted valuation methods.

 

 

In the event that the Parties are unable to agree the Fair Market Value of Alcoa's Transferable Interests within fifteen (15) days of the relevant Chairman requesting them to do so, the Parties shall refer the valuation to a panel of independent experts with appropriate experience in the aluminium industry (each a "Valuer"). The panel shall consist of three Valuers, one of whom shall be appointed by each Party and the third of whom, who shall act as chairman of the panel, shall be jointly nominated by the two Valuers nominated by the Parties. Failing agreement as to the identity of the third Valuer within five Business Days of being required to do so, such third Valuer shall be nominated by the International Centre for Expertise in accordance with the provisions for the appointment of experts under the Rules of Expertise of the International Chamber of Commerce (who shall be instructed to nominate only a Valuer experienced in valuing rolling ▇▇▇▇▇, aluminiwn smelters, alumina refineries, bauxite mines and associated facilities).

 

 

The Valuers shall be instructed to collectively submit a single Fair Market Value valuation to the Parties within thirty (30) days of the appointment of the third Valuer (or such longer time as the Parties may agree) and such valuation shall be final and binding upon the Parties. The Fair Market Value shall be determined on a fair market basis as between a willing and not anxious seller and a willing buyer on arms' length terms in accordance with Clause 18.4.

 

 

In valuing Alcoa's Transferable Interests, the Valuers:

 

 

 

 

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Except as otherwise provided in this Agreement, no Party shall have the right to assign its rights and/or transfer its obligations under this Agreement to any other person and/or be released from its obligations under this Agreement unless, such Party is simultaneously transferring its Transferable Interests to such person in accordance with Clause 17.

 

 

Each Party hereby warrants and undertakes to the other Party on its behalf and on behalf of any Affiliate being a Shareholder that:

 

 

 

 

 

 

 

 

 

 

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This Agreement shall be governed by and construed and interpreted according to English law.

 

 

Prior to referring any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach, termination or invalidity thereof, (for the purposes of this Clause 21 a "dispute"), other than proceedings to enforce an agreement reached between the Parties under this Clause 21.2, to arbitration pursuant to Clause 21.3 below, the Party (which shall include any Affiliate of such Party being a Shareholder) wishing to or considering making such reference shall notify in writing the other Party of the nature of the dispute and its background (for the purposes of this Clause 21, a "dispute notice") and its proposed basis for settlement of such dispute and the other Party shall respond to such dispute notice within fourteen (14) days of receipt, setting out any clarification it may feel relevant and including its proposed basis for settlement. The  chief executives or presidents of the ultimate parent companies of each Party or their designees shall then meet within thirty (30) days of the issue of the dispute notice to attempt a reconciliation and settlement of the dispute. No statement as to a Party's proposed basis for settlement nor any discussions or communications between the Parties (or their ultimate parent companies) pursuant to this Clause 21.2 (except for the terms of any agreed settlement between the Parties) may be relied upon or referred to in later court, arbitration, enforcement or appeal proceedings.

 

 

 

 

 

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shall decide such dispute in accordance with the substantive laws of England applicable hereto.

 

If a dispute is referred to arbitration pursuant to Clause 21.3 above, unless the arbitrators rule otherwise, the obligations of the Parties shall not be suspended and the provisions of this Agreement shall continue to be carried out by the Parties.

 

 

 

 

 

Each Party that is not incorporated and registered under the laws of England and Wales will appoint a process agent in the United Kingdom to receive legal process served under this Agreement. Each Party agrees that service of process in respect of it upon such agent, together with written notice of such service given to it as provided in Clause 23.1, shall be deemed to be effective  service of process upon it in any such action, suit or proceeding. Each Party agrees that the failure of such agent to give notice to it of any such service shall not impair or affect the validity of such service or any judgment rendered in any action, suit or proceeding based thereon. If for any reason such agent shall cease to be available to act as such, each such Party agrees to designate a new agent in the City of London, on the tenns and for the purposes of this Clause. Nothing herein shall be deemed to limit the ability of any Party to serve any such legal process in any other manner, to obtain jurisdiction over any other Party or to bring any action, suit or proceeding against any other Party in such other jurisdictions, and in any other manner as may be permitted or required by Applicable Laws.

 

 

 

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action, suit or proceeding brought in the courts of England, and to execute such documentation as may reasonably be required by such agent in connection with its appointment.

 

 

This Agreement and the agreements contemplated herein are to be executed in Arabic and in English. The English language shall be the governing language despite translation into any other language(s), and the English versions shall prevail over any translated versions in the event of conflict. No translation, if any, of this Agreement into any other language shall be of any force or effect in the interpretation of this Agreement or in a determination of the intent of each Party.

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate's directors, officers, employees, professional advisers or consultants, or financial institution from whom the Party is seeking finance, on the terms set out in this Clause 22.

 

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A Manager shall be entitled to supply detail of any business transacted at Board of Managers meetings or committee meetings and any other information obtained by him in his capacity as a Manager, to the Party or Shareholder by whom he was appointed or to the professional advisers of such Party or Shareholder, subject always to the provisions of this Clause 22.

 

 

Each Party shall notify the other Party and the relevant Company of its intent to issue any press release or other public announcement with respect to the Company and its activities and, except as required by any competent legal or regulatory authority or any internationally recognized stock exchange, shall not issue any such release or announcement without the prior consent of the other Party and the Company, which consent shall not be unreasonably withheld. Such consent shall not, however, be required in order for a Party to include a reference to its ownership interest in the relevant Company in its annual reports and similar publications.

 

 

The Parties' obligations under this Clause 22 shall survive any termination or expiry of this Agreement for a period of five (5) years from the date of such termination or expiry and shall be without prejudice to any other confidentiality obligations imposed on the Parties or any Company by the Confidentiality & Non-Disclosure Agreement (in respect of the period prior to the signing of this Agreement) or any of the Project Agreements.

 

 

 

All notices, approvals, consents or other communications in connection with this Agreement shall be given in writing by an authorized officer of the Party (or an Affiliate being a Shareholder) providing any such notice, approval, consent of other communication and shall either be left at the address of the addressee which is specified below, sent by reputable international courier to the address of the addressee specified below, hand delivered to the address of the addressee which is specified below or sent by facsimile to the number specified below, provided in each case that if the addressee notifies the other Party and the relevant Company of another address or facsimile number then such other address or facsimile number shall be deemed to replace that set out below.

 

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The Parties and any Affiliate being a Shareholder hereby agree to execute and deliver promptly all powers of attorney, consents and additional instruments, and to take any such further action which may reasonably be required in order to consummate the transactions anticipated by this Agreement, including without  limitation  any  transfer of Shares  in any Company  pursuant  to Clauses  14, 15 or 17.

 

 

The Parties agree that, in relation to the development of the Project and the subsequent business and operation of each Company, they shall (and shall procure that each Company shall):

 

 

 

 

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The Parties acknowledge that the Parties and their Affiliates are engaged in, or may become engaged in, bauxite mining, alumina refining, aluminium smelting, rolling mill operations and other businesses that may compete with the Project.

 

 

Subject to Clauses 5.10, 5.11 and 25.3, neither Party (nor any of its Affiliates) shall have any obligation to offer or provide to any Company or the other Party (or any such other Party's Affiliate) any option or other right or opportunity to pursue or acquire any right, title or interest in any corporate opportunity or business venture prior to pursuing such opportunity or venture for such Party's (or such Party's Affiliate's) own benefit.

 

 

In the event of termination of this Agreement, other than where Ma'aden is the Defaulting Party in accordance with Clause 14.5, Alcoa shall not itself or through any Affiliate develop, construct, operate or otherwise implement or participate in whether itself, in partnership, joint venture or any such other relationship with any other person, in any project in any of the Kingdom, GCC Countries or Iran, which would compete with the Project, prior to the date that is (i) if the termination occurs prior to the Commercial  Production  Date, three (3)  years after termination of  this Agreement; or (ii) if the termination occurs after the Commercial Production Date but prior to the fifth anniversary of the Commercial Production Date, two (2) years after termination of this Agreement. The foregoing restrictions shall not apply to any bauxite mining, alumina refining, aluminium smelting, rolling mill operations and other businesses that may compete with the Project (A) in which the Defaulting Party is engaged as of the date of termination of this Agreement; or (B) in which the Defaulting Party owns a direct or indirect interest of fifteen percent (15%) or less or otherwise with the prior written consent of Ma'aden.

 

 

 

If any provision or term (or part thereof) of this Agreement shall be, or be found by any authority or court of competent jurisdiction to be, invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the other provisions or terms (or parts thereof) in that jurisdiction or the whole of the Agreement in any other jurisdiction, all of which shall remain in full force and effect. As regards the provision or term (or part thereof) which is or has been found to be invalid, illegal or unenforceable, the Parties shall negotiate in good faith in order to agree the terms of a mutually satisfactory provision to be substituted for the invalid, illegal or unenforceable provision and which as closely as possible validly gives effect to the Parties' intentions as expressed herein.

 

 

The failure, delay or forbearance of any Party or any Affiliate being a Shareholder to insist upon, exercise or enforce any right or remedy conferred by this Agreement shall not be or be deemed to be or be construed as a waiver of the right or remedy or of any other rights or remedies nor shall such failure, delay or forbearance operate as a bar to the exercise or enforcement of the right or remedy at any time or times thereafter.

 

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This Agreement constitutes the complete and exclusive statement of the terms of the contract between the Parties and any Affiliate being a Shareholder (together with  the  Adherence Agreements) with reference to the subject matter hereof, and supersedes all prior agreements, promises, proposals, representations, understandings and negotiations, whether or not reduced to writing, between the Parties and any Affiliate being a Shareholder respecting the subject matter hereof. No statements or agreements, oral or written, made prior to or at the signing hereof shall vary or modify the written terms hereof (provided that this Clause shall not have effect to limit or excuse liability for any fraudulent act).

 

 

 

 

 

 

for the purpose of improperly obtaining or rewarding favourable treatment in connection with this Agreement or any of the other agreements contemplated by this Agreement.

 

 

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The English language shall be used and be the official language for written communications (including, but not limited to, the reporting of results of operations and forecasts of same) between and among the Parties, any Affiliate being a Shareholder and each Company and otherwise under this Agreement.

 

 

No variation or amendment to this Agreement shall be effective unless in writing signed by duly authorised officers or representatives of each Party on behalf of itself and any Affiliate being a Shareholder.

 

 

Nothing contained or implied in this Agreement shall constitute or be deemed to constitute a partnership between the Parties or any Affiliates being Shareholders (or any of them) and none of the Parties (or an Affiliate of a Party being a Shareholder) shall have any authority to bind or commit any other Party in any way, save as expressly set out herein.

 

In the event of conflict or inconsistency between this Agreement and any of the Articles of Association, the terms and conditions of this Agreement shall prevail.

 

Each Party and any Affiliate being a Shareholder unconditionally and irrevocably agrees that the execution, delivery and performance by it of this Agreement constitutes private and commercial acts, and to the extent that a Party or Shareholder or any of its revenues, assets or properties shall be entitled, with respect to any proceeding relating to enforcement of this Agreement or any award thereunder at any time brought against such Party or Shareholder or any of its revenues, assets or properties, to any sovereign or other immunity from suit, from jurisdiction, from attachment prior to judgment, from attachment in aid of execution of a judgment, from execution of a judgment or from any other legal or judicial process or remedy, and to the extent that in any jurisdiction there shall be attributed such an immunity, such Party or Shareholder irrevocably agrees not to claim and irrevocably waives such immunity.

 

 

Notwithstanding anything in this Agreement, no Party or any of its Affiliates being a Shareholder shall have any liability to the other Party (whether in contract, tort or otherwise) for any consequential, incidental, special or indirect losses (including loss of anticipated profits) arising from or relating to this Agreement, whether out of any Event of Default, other breach of this Agreement, indemnity, any fault or negligence on the part of a Party or its Affiliates (or their respective employees) or otherwise.

 

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IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its duly authorized representative as of the date first written above.

 

 

 

 

 

 

 

By

 

SAUDI ARABIAN MINING COMPANY (MA’ADEN)

▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President and CEO

 

 

 

 

Signed:

 

 

 

 

 

By

 

ALCOA INC.

▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President and CEO

 

 

 

 

Signed:

 

 

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