Hunter Litigation Chambers HUNTER/VOITH/BERARDINO /HARRIS

October 6,2006 File no: 1160.003

Via E-Mail commission.secretary@bcuc.com

Robert Pellatt, Comn~nission Secretary British Colulnbia Utilities Co~mnission P.O. Box 250 6th Floor, 900 Howe Street Va~lcouver, BC V6Z 2N3

Dear Mr. Pellatt:

Re: Intervenor Evidence on behalf of the District of Kitimat British Columbia Hydro and Power Authority ("BC Hydro") - Review of the 2006 Integrated Electricity Plan (IEP) and Approval of 2006 Long Term Acquisition Plan &TAP - BCUC Order G-37-06

Please find attached for filing wit11 the Commission, a sulnmary of the evidence on behalf of the District of Kitilnat in colmectioll with BC Hydro's Amended LTAP (Exhibit Bl-E). A copy is concun-ently being sent to BC Hydro and the otl~er li~tewenors by e-mail in accordance with the Doc~uneat Filing Protocols provided by the Colmnission.

Yours tl-Llly,

Hunter Litigation Chalnbers

+k Jolm J.L. Hunter

JJLHImso Encl. cc BC Hydro

Attention: Joaillla Sofield, Chief Requlatorv Officer

Registered Intervenors

Hunter Litigation Chambers Law Corporation John J.L. Hunter, Q.C. 2100 - 1040 West Georgia Street, V a n c o u ~ e r , BC V6E 41-11 direct: 604 891-2401 tel: 604 891-2400 fax: 604 647-4554 c: jhunter@litigationchambers.com ~vww.litigationchainbers.com PIWCTICE CONDUCTED THROUGH A PERSONAL LAW CORPORATION >

C37-3

EVIDENCE OF THE INTERVENOR

DISTRICT OF KITIMAT

BC HYDRO'S 2006 LTAP APPLICATION

I. Summary

1. As noted in its application to illtelvene, the interests of the District of Kitimat ("District")

in this proceeding are directly related and liinited to tlle amended and re-stated Long

Term Electricity P~lrchase Agreelnent ("LTEPA") between t l~e British Columbia Hydro

and Power Autllority ("BC Hydro") and Alcan h c . ("Alcan"). The anended and re-

stated LTEPA was recently alllounced by tlle Proviilce and Alcan and is expressly

referred to in BC Hydro's amended Long Tell11 Acquisitioil Plan ("LTAP") which fonns

the subject matter of this proceeding. Altl~ougl~ the amended and re-stated LTEPA has

not yet been finalized, a copy of tlle ten11 sheet negotiated by the BC Hydro and Alcan is

set out at Appendix N to the Anended LTAP.

The District's concenls regarding the a~nended and restated LTEPA flow from the origins

of Alcan's authority to use water fro111 the Necl~alto waterslled for the purposes of

gelleratiilg hydroelectric power at its Kemano facilities (the "Kema~lo Worlts"). These

rights, and the various agreemeilts, licences and pennits giving effect to the same, derive

from I~zdzutrinl Develop~nent Act, S.B.C. 1949, c. 3 1. The District says and will argue at

the hearing of this matter that the IDA and tlle agreeinellts entered illto tllereunder

between Alcan and the Province place certain limitations on Alca~l's light to sell power

and the power deliveries colltelnplated under the amended and re-stated LTEPA are

directly contrary to these limitations.

3. In its response to the District's h~forrnation Req~lests, BC Hydro states that the "anended

and re-stated LTEPA, if executed, would be a result of the LTAP" (See BC Hydro's

Response to the District's PR No. 3.1.2) The Distiict will argue that the power

deliveries by Alcan contemplated by the amended and re-stated LTEPA are illegal to the

extent that they contravelle the IDA and tlze various agreelneilts and pennits held by

Alcan pulrsuailt to the IDA. As sucl~, the LTAP sl~ould not be approved in its present

fornl as it would "res~~lt" in these illegal power sales.

4. The term sheet for the amended and restated LTEPA pays lip service to the ideals of the

IDA and the 1950 Agreement by stating that power is to be used first for al~unill~un

productioil and then any surplus would be available for BC Hydro. The Distiict's

conceln is that the q~lestion of what is " S L I ~ ~ L I S " is entirely within the discretion of Alcan.

Alcal has sole respoilsibility ~lllder the proposed amended and restated LTEPA for

setting the level of and the schedule for its power deliveries to BC Hydro.

5 . By Hydro's own admission (see BC Hydro's response to IR No. 3.1.4), there is no

minimum load specified for the Kitilnat sinelter in the LTEPA Tenn Sheet. What the

anleilded and restated LTEPA does, tl~erefore, is give Alcan a film lnarltet for wl~atever

power it decides it has available for sale at ally given time. This appears to be limited

only by the capacity of the transmission system connectiilg the Keinano Worlts to the

Provillcial power grid.

6. On a pure econoinic analysis of the amended and restated LTEPA, there is a greater

incel~tive for Alcan to increase it power deliveries uulder the amended and restated

LTEPA tllan there is for Alcail to use that same power for aluminum production. Alcan's

costs for producing power are fixed. For al~unil l~~nl prod~~ction, Alcan has the additional

costs of its raw inatelials, labour and other iilcideiltal expenses relating to production.

There is also the idlerent risk of fluctuatioas in the aluininum marltet.

7. In colltrast, there is no such iisk to Alcan wl~en it engages in power sales to BC Hydro

under the amended and restated LTEPA. It has a captive customer for its power and an

establislled price that far exceeds its cost for produciilg the power. There are also few

added costs, wit11 the result that Alcan llas a far greater margin on power sales than it

does on production. In other words, rather than an incentive to engage in the

developlnent of its aluininu~n sinelting operations there is a real and substantial econolnic

incentive for Alcan to maximize its power sales at the expense of its sinelter operations.

8. This was not the iiltelltioll of the rights granted to Alcan ~ ~ n d e r the IDA and the 1950

Agreement and it is fulldamentally iilcollsistellt with the express telms and collditioils

placed on those rights. As such, the District will argue that the Amended LTAP ougllt

not to be approved as requested by BC Hydro to the extent that it autl~olizes or otl~elwise

sanctions, either expressly or imnplicitly, these ~ulautholized power sales under the

amended and restated LTEPA.

Documentary Evidence

9. The District illtends to rely oil the followillg docuinelltary evidence and will seek to

illtroduce them as Exhibits at the hearing:

(a) I~zdzistr~inl Developnze~zt Act, S.B.C. 1949, c. 3 1 ;

(b) Agreement between the Govenzl~eilt of the Province of British Col~unbia and

Alulnilluin Comnpaily of Canada, Limited dated December 29, 1 95 0;

(c) Long-teiln Electi-icity Purchase Agreement between Alcan Alulniiluin Limited

and British Colulnbia Hydro and Power A~lthority dated February 27, 1990;

(d) Agreement between Her Majesty the Queen in Right of Blitisl~ Colulnbia and

Alcail Al~uninum Limited dated A~lgust 5, 1 997; and

(e) BCIAIC~II 1997 Agreeillellt Order being Order-in-Council 0977 dated A~lgust 4,

1997.

10. Copies of each of these documellts is appended as an Exhibit to this Evidence Swmnary.

EXHIBIT A

IrzcErcstvinl Developnzerzt Act, S.B.C. 1949, c. 31

EXHIBIT B

Agreement between the Government of the Province of British Columbia and

Aluminum Company of Canada, Limited dated December 29,1950

EXHIBIT C

Long-term Electricity Purchase Agreement between Alcan Aluminum Limited

and British Columbia Hydro and Power Authority dated February 27,1990

EXHIBIT D

Agreement between Her Majesty the Queen in Right of British Columbia

and Alcan Aluminum Limited dated August 5,1997

EXHIBIT E

BCIAlcan 1997 Agreement Order

Order-in-Council 0977 dated August 4,1997

.t z ~ . . L- - .: . An Act to promote [he Lndustrial Development

a . . $5- . % . .qr . -7-.. expansion of its industry, and the establishment of new centres of popu-

.-. -~.- .- 7c. -.,. -,.

lation within its boundaries: ' =. - ..-. .= . And whereas it is consequently in the best interest of the Province

that the establishment of ncw industries and the expansion of existing industries that require the development of water-power sites be encour-

.d aged to the fullest possible extent:

.- . . . And whereas the establishment in presently undeveloped sections of the Province of any permanent industry and in particular of an alumin- ium industry, which requires for its operations substantial quantities of electric power, involves extensive and costly preliminary investigations and engineering studies and the expenditure on the construction of . . hydro-electric works and industrial plants and facilities of very large

. . sums of money over an extended period of years: And whereas, in order to facilitate the establishment or expansion in

the Province of such permanent industries, it, is advisable that the Lieutenant-Governor in Council be empowered to make agreements respecting the use of natural resources:

Now, therefore, His Majesty, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:-

S ~ O I ? title. 1. This Act may be cited as the " Industrial Development Act."

fnLcrprctation. 2. " Minister" means the Minister of Lands and Forests o r such other Minister as may be designated from time to time by Order in Council.

i Powcrs v d c d in L'rurClorcmor in

3. ( 1 ) Notu,ithstmding any Ian. to thc contrary, the I-icutcnant- 'i Guodl. Governor in Council may d o any of Lhc following things:- 13

(a) Sell or leasc on such terms and for such prim or rental a s he I 2 I f i i

deems advisable to any person who proposes to establish o r I ; expand an aluminiun~ industry in tbe Province any Crown

! I.md or interest therein, and also on such teims and for such ,! : : . . : . . price or rental as he dwms advisable grant a licenu: to any

such person lo store or use any unrecorded watcr in the I':E .K . Province: I,$ : ( 6 ) Make such other arranzements regardinp the luturc o ~ ~ t i o n s

of such industry as he may deem to be in tbe best iptcrest of the Provincc:

(c) Make with such person such arrangements as he may deem

$2 made and constructed by such person, including arrangements - 9 . : ;

a:: as to the manner and extent of such taking, the determination !

.i of the compensation payable in connection therewith, and the j 11 ::

i{ 1 conditions governing the future supply of electric power from I . .:

i .;: i : I .. tbe development s o taken: I ; (d) Authorize the Minister to execute any agreement for the !I! .; - . >?! .

above purposes. I! -

I . (2) Subsection ( I ) shall not be construed s o as to authorize the Lieutenant-Governor in Council to grant to any such person financial assistance by way of loans, subsidies, or in any other manner.

(3) Any agreement entered into pursuant to tbe authority conferred by this Act shall provide for such protection as may be considered advisable by the Lieutenant-Governor in Council of any fisheries that would be injuriously affected.

Amcodmcot of agrccmcnu.

4- Any agreement made pursuant to this Act may from time to time be amended o r extended if deemed advisable by the Lieutenant- Governor in Council: Provided that the subject-matter of SLICE ~roer?d- 1 ment or extension could lawfully have been incorporated in the original agreement at the time i t was made. I

.,/

VICTORIA. B.C. Prinrcd b y Do* RICDIAIIF~ID. Prinlcr l o chc King's Mml Exc~llcoc Majesty

19x1

A C R E E H E N T

This is Exhibit " fj " referred to in the

Affidavit of ~ ~ ~ - ~ m

Sworn before me at v*di"Mda g c

Affidavits for British Columbia -

THIS AG- made the m h day or December 1.1)- 1950

EEmErl: . _ _. - - :

H7S HRJESlT KING in right of t h e h u L n c e of ari t i sh Colmnbia

(hereinafter called the COERKFB.T}, represented herein by th;e

Hiniste-r of L e s and Forests o f the said Province (hereinafter

called the KWIS?ZR) ddZy au?.horized by Order-bCouncFZ Hb. 2883"- , - . .

under the authority of the. "Industrial. Developnknt ActD,

. .

. - . ... -:. .. .: O F T H E r n T PART:

.. . -:

hl3MNUH -.COM€'ANll OF ~hNkDh, LTNIIED, a Company incorporated under

.:the l a b of Canada, h&hg it3 Head Office fn the City of. ?fontreal'

. h . t h e &&ce or Quebec and duly r e g i s t e k d i n the Province of

-Bfitisii-GI-bia, li&hng i n office in the C i t ~ of Vancouver, B d t -

i=h C & d ~ i a (he~I.&ft-er i & e d A&CAI?) and reppsented herein

. ..its;proper p f f i c + n duly au ih~r i zed b= resolution of its B o d .of . . .

I

m m m r n T : ,

hREREX5 t h e prosperity of BriUsh Colrrnrbia depends on the devel-

opment of its natural resaurces, tbe expansion of its industry and

Che establfshment of neu centres of popiliation vlth5.n t h e h d n c e ,

and

HHEIlEAS the renote unrecorded uaters h e r e i n a f t e r re fe r red t o a s

- t h e Eut- arid Tahtsa water power are natural resources capable of .

pmducing great quask i t i e s of e l e c t r i c S r , and

tk i= 0 to brovide and r i s k the wry

l a r g e sums ~r m e y required t o develop those .water powers .to produce

-r f o r )Thi&'m market nav exists, or can be foreseen except . --- '.through the cok t ruc t io t i of f a c i l i t i e s ' f o r t h e production of aluminum

in thc vicinity, and

WHEREbS t h e GOYERNHEtT des i res XLCAH to inves t iga te the p s s i b i l -

i t i e s of t he said w a t e r - v r s f o r alwduum production, t o develop t h e

na- resonrces of t h e Pmuince and t o e s t a b E s h an economically -

60- and prosperons business i n the h-ovince, and - WHEREkS A L W is willirrg to consider G e wnst ruc t ion of a large

a.l&um plant including the r e q d r e d power developsent at a loca t ion ?.< :

. where it vill have aqsu ran~ t h a t it may mntinue to import its raw . . . . . -

- ~ a k r i d ~ s , geneate low-cost e l e w e power to process such matehais ,& '. . * . - - .- ard w+ d l * ~ at s u f f i c i e n t l y low pr ices t o wmpete Kith . .

alundnum . - and &her material8 in distant and protected markets with a . .

reason?ble q c t a t i _ o n of adequate rewas8 for t h e r isks M e r e n t in ' . _

the busess, and - UHEIiWLS ALCAN has financed a d establ ished and is operating large

-

plants in prospcrum wnnmrnities f o r -the generation ard use of grcai

quant i t i e s of electric power t o process imported o re h t o d t h r m q

which is l a r g e l y sold abroad, and

#HEEELS t h e construction o f such an a l u m i n u m plan t a t o r near the

s i t e of the s a i d n t e r p M r would accomplish, without i n v e s b n t by -

o r risk to the CO-, the , d c v c l o p n t of p?ucr, tk e s t a b l i s h n

of a p r m a n c n t i n d u z t ~ , and the beginning of a new centrz of p p u l a -

tion, and

HHGREkS His Hajesty, by and with t h e a c e ud consent of tk

Legislative Assedly of the Fk-ovince of Bri t ish Coltinbiz, has auth-

orized the Limtenant-Gowrnopin-Comd to iodte, md the F i n i s t e r

to execute, an a p e m n t t o advane that end, on- such t e r n s as the

~eutenantyCovcroor-in-Council deems advisable and i n the best

M e r e s t o f the b v i n c e .

i NOU TlZEFDRE in consideration of these premises and of the

,. . . " nnrtual coveknts, provisions and cmdl t io ru here inaf t=r s e t forth

and pursuact to the powem d e r r c d upon the Lieutenult-Covrmor-

. .. . . . i n - C o u n c i l by the nIndustrial Developlmnt Actn, t h e p u t i e s he*&-

. . agree as rollom:

. . . . 1, LLcence and P e n d t

.The g m t s t o AI.W the right, and a Licence o r

. . Xcences and a permit o r pennits under the W a t e r Actn, to store

"

4 to me by .d i~ers ion and otherr ise , those unrecorded = t e n tilled: . .

the Eutsuk 4 T a h t s a 'water power and t o 'occupy all C m k n Lands pe-r-

... I . '. ,, t h e n t t o the &3 deqelopmrmt and operation o f t h s sa ld w a t e r power

. . *id, is ident i f ied and described in the 10- e n t i t l e d "Conditional

Water BcenceU and ~ ~ e r u d t authorfzing the'Occup~tiori of Cram Land"

acgnded hem& .& lrrade a part bereor,

, : .. - . ALCAN may in due course subn6t to- the COVEFWENT detailed p l k . -

s . .. . a i d des&&tions prepared by a qualified land &rveyvr showing exact-

. . . . ly the Cmwn &ds required by AU%N for flooding urd, or, o t h e r pur- . -

'* . . fises. in respect of t k e W o r b (zs hereinaf ter d e h e d in Section-3

.. . hesof ) and the ,parties hereto vill forthwith execute a supplementary

&-e=mebt iden tuy ing such plans a d descriptrons m c h agieement and

plan^ and descriptions s h a l l be appznded hereto and a d s a pzrt hereof.

The GoP&XENT hemby authorizes t h e Comptrollr r o f W a e r Rights

and the 145nister t o i s sue under the "Hater Act*, subject to the pro- - vis ion of Section l& hereof, t k s a i d l icencc o r l i cences and pcrmit

o r permits, and w i l l from time t o time execute and de l iver o r C J U S e t o

?x exccuted and d e l i w r e d any and a l l f u r t h ~ r instrunr?nts t h a t I L U d

may reasonably request'-tn d i r a o r h p l e m m t t h e r lr f ik, ~ & n c \ ':

and penults hereby granted-

2, Cancellation of ILcence and P e d t

V ltLCRW co-aces canstroction o f the Works ( h e r e i n d t e r de-

f inid) before 1 s t h e 1953, an3 FnstaIZs a t t h e Vorks generating

equipmrnt h h g a capacity of not less- thur 400,030 h o n e p r i e r

before 1st January 1963, J U C U I S r i g h t s k r e u n d e r (including ALCAN'S -

rights d e r the said l icence o r Ucaic~-s a r d p e d t o r & d t s In L

respect of the aforesaid water paver) nay not be reduced p r i o r to

k t J-ry 193 f o r argy cause other .than d e f a u l t by ALCRN Fn t h e . - - . --

perforrrence of its obugatio& under Sect ions t, ' 5 and 6 herpbr- If,

on kt Jan- 1983, t+e generating..equipwnt installed a t t h e Works- - . . . .. I

has a capadty of 750,000 horsepower.or mre ALCANIS sa id rights-

m a y not be reduced prior t o 31st December lw, f o r any cause o t h e i l . .

than -default by A L C h as aforesaid. On 31st December 1999, .a final . .

x c & c e be issued to ALCAH based on t h e g e n e r ~ t i n ' ~ capacity tB

I &tal led a t the )Torks, A t no t@re vill t h e said licence or l icenoes '

arid Grmrit o; permits be rancelled o r t h e quantity o r v a t e r that AWAN

5s airthorized t o atorr, diveif; and use or t h e area of. Crow Lands

mAN is authorized t o occupy be reduced below t h e quant i ty and area

required f o r $ h e . f u l l n t i i i z a t i o n of the then G s t d l e d generat ing . .

e'qaipment except i n ,case of -default by ALCXN as aforesaid,

If m, by reason of b a s k s s o r 6ther conditions, should re-

quest extemibns of the p e r i d sp=eUied 5x1 cannection ~ 5 t h the

wns t ruc t ion of the F r k s , t h e Erxister may grant such extensions t o

t he extent t h a t he s h a l l . c o ~ i d e r them reasoruble,

If b e f o s the installation a t t h e Works of @c=ra t ing cguipwnt

having a capadty of not less than 750,QbO horsepower ALCAN o r any

o f its subsidiar ies should begin construction elsewhere of a compar-

a b l e aludnum plant having an annud c ~ p a c i t ~ o f 725,OO tons o r mre

and a power d e w l o p e n t adequate to furnish the require 'mnh of such

p l a n t o r i f Alnminum Limited ( i f then a f f i l i a t e ? with XLUd), o r an.

df its then subsidiar ies should'begin construction of -such 3 p m j e t t

1 1

in Canada, the said rights and t h e I f c e n a o r zcenCe= and pemft o r

permits granted hereunder may be redaced to the extent that snch rip@

are not required f o r t h e full ukElizetion of the then installed F-

e r a t i n g equipent.

-the COVERHHEJSP should at any tirne redue s ~ l d r idts

hereunder, on atcannt of t h e portion uithdravn the CWERNSEKT n k l i n d u d e in anp Ilc&ce o r p e w i t thereafter granted t o -m otkr

than ALCAH a p m ~ & n f o r the payment to hJXUt of equi table conpen-

sation for arry tienefit derived from the constroction and operat ion of

tbe works by ALCAW,

3. 'Sale of'CrC,wnwnLds ' - -- - - - &

~ o f x f t ~ t a n d i n ~ Sections 46 o r 57 of the *Lud Actn, t h e COVEILK-

HEtJ7 wiU, i f o i timi & ti&, when reqPircd by A.LC.CN, s e l l and ccnpey,

, in l e e simple, to .ALCh such. C n m n lads as may be needed for t h e Work:

uN& are.hcreby.defined as dams, canals, tunnels, aqueducts, pen-

. stoc&, racewq-s, miks, powerbus&, spillw'ays, wharfs,

docks, townsite=, h y d r a a i c structures, r o a m , railways, cableways,

pipe l ines, flurres, transnrission.lines a d all other structures, G s t e

i . I) dump and other facilities capzble of -or useful in connection with

dleeiertGg,. ~torin'g, w a s a r f n g , conserving, c o n v e m o r u ~ h g t h e water

. . . of the Eutsnk'hiI Tahtsa wr t e r power end producing, measuring, t rzns-

. . mlt$ing o r using the: p&er to be generated t h e k w and plant sites, . .-

. - &@s, 'docks, tmhites, road- ~, ai lways, conrreyors and other. - structures, waste dump and o t h e r facil,Ltfes capable of o r nseTul ip

. . . . - +rg-ectfon - u i i i d d i en4 aL!er mterfals br using poker . - . . -

genera ted by the said water pouer.

Such s a l e s shaU be ~ d e at. price3 wt in excess of t h e present

minimum ScLces specified. in Sec t ion 47.or the "Land Act", No stumpage

o r royalty I& beiexacted on t imber which is damged, destroyed, or .

rem-md in connection w i t h the construction o r operrtion o f t h e struc-

tu res and f a c i l i t i e s enumerated in this vxtion, and rhich is n o t used

o r othervlsc gainfully disposcd of by AGCAH.

On all such l a d s and lands t o b e floodcd by t h e Works t h e CDVERK-

HEKl agree3 to mLTIta.in a reserve a g h t s t a g under thc " ? ¶ h e r .,

Actn , "Placer M n g A c t n and thf i 'Petmlcuin md Pl~tnral CS3 A c t "

specificdlly the reserve placed by Orders-in-huncF1 Nos, 413 and lJ.2,

of 6th fianh 1950 nnd to refrain' fmm alienating any such lads mti l

completion of construction and/or i loodbg d f e c t h g any portion there-

of, ~uring su31 pcrid AtCAH s h a l l bave prior right b.locate am3 re- -

cord c l b fo any mfneral d i s m r e d by ==on of tbe d e r r l o p n t o f -

t& ~ d d uater power. Subs~quent tr> cotupletLon of dmelqanznt of aqy

part of t h a Wolorla the COVERNENT vill maintain adequate reserves for

the protection-of t h a t pri2.of the said Works against encroachment,

The GOVERNEN7 will pendt to occnpg and t o f l o q l ~ u c h ..,

Cruwn Land3 zu m a p be regulred for tbe construction .and the operation

of the- Works but s h a l l not .be oblfgeted to sell to JXJXU a ~ l y Crown

- Landa that are reqdrcd only for the pnrpose o f flooding by AD3.N on

the rentel t e rns set forth Fn Section 6 hereof,'

Roads b u i l t by ALCAN t o provide access t o and between the vaxlo-t .

5ites of the Works cons t i t u t e part of the Works and Croun Lancb r e q ~ \

for such mads may be purhased by ALCAN is p d d e d in Section 3 .-

. - hereof, Howaver, ALCAN may In specific case3 w s t e d by ALChH and

subject to approval by the Kinister of Public &rks Fmpmre existing

mads, including supplementing them by t h e construction of new roads

without any ahargew by the e m &en CTDm Lards are irrP01~ed - and Milthoat vslmdng t k obllg&ionu o f o w n e ~ f i p or such improvemnts, .. :- - - . .

Any mad prntructe.d . by.kTXAN and located on i+ cmn property, cx-

cepting mads used cntirely in connection wlth the opention of we W o r b , may be declared a public mad d e n such act ian is considered by -

+n such event the W~~ vlll ktrswne the &ten&ce of the road

and A L W HLIl convey-to the GOVE- the: lard occupied by such road

uithout wmpmsetion.

4, Initial Rentela

ALCAN has paid to the Hin ia ter the sum of S20,OCO receipt of

which 13 hereby acknowledged and the Hinistcr wl l l , in-l1c.u 01 fux-&+r

- 7 - -

rent& o r other chzrges during tk =?rid p r i o r t o the generation of

power 2 t the Work~, accept ePidence t k r t A L U N h a made w t u r e s

on cngLneerlng a,tudi& of Br i t i sh CoPnbia water pwrs ard the d e s i p

ud specfficatiorm f o r the Works a t u, zverage r a t e f r o m Z s t June 1948,

o f not leas than $!+0,000 p e r pear up to an -gate munt o f a t l e a s t

$7'50,000. ALI=MI will de l iver tovthe COVWJWrr the rcports and pl-

p d u c e d by the said e&eering s tudies if a d *II. the said l i cence

- o r U-ce~ 4 p r m i t . o r permits a r e sukendercd o r -elled,

5. Rentals f o r h w r Generated

AtCAI3 will pay tbe OD- in respect of all Rydro-elzctric

energy g~nera ted by ALCI\IJ at t h e Wor3cs the follciwing nnnual r e n t i l s : _ _ _ -.-

(1) in respect of a.ll *electric energy used by ALCdN zmd

its subsidiaries (defined as compani$s controlled by A.LC3.N) engaged I n . . . :

processes contributory t o the, procluction o f aluminum o r s o l d as skcond-

ary power (%.em, enerm. f o r t h e pmd,uction o f s t e m o r otherwise in

direct competition with fue l ) AGCAN will pay zn annual rentiZ per horsc- .-. . .. p-r pear equal t o one two-thirds times t h e amrage p r i c e per p o w

( f .o.b. British Columb5a smelter) redl ized by ALULN on alrmbnum-producec . . I i . -

Bri t i eh Columbir and sold by ALCAN during t h e prcvions- calendar year; .. .

. ..

(5.5) 'in respect o f all other hydro-electric energV generated at :. . ., .

the HD&S L E A N wiii' pay an inr~ual rent+ based on the r e n t a l r a t e s . . . . . . . .. . 8 .

paid b y others in the Pravince for- t h e generation of e l e c t r i c energy

for similar pnrposes, t ak ing locr t ion and other- relevant f a c t o r s i n t o : .,. . :: . ; : ' ,..T z

consideration;

Pro8ided, however, t h a t t h e annual 3~nta31s f o r the firit p a r and

' subsequently ahall in no event k l e s s than 25 cents per borsepowr .?

y e a in respect of any hydrv-electric cnergy generated a t t h e Works,

6. Rentals -for Lmds Flooded

ALCM . w i i l , commencing with- t h c generation o f power a t ' t h e Works,

2ay the C?&hEXT an annual ren t@ i n r e s b c t of -crown Lands flooded - -

by the e.5C Hoiks except when occupied by so& p a r t y unrela ted to XLCZt

a t the rate 01 10 cents p e r acre of 'such lands; provided, however, t k z t

such rent& s h a l l be increased if and t o the ex ten t thp t two-thlrds. of

the average price of aluminum determined i n acwrdancc Kith t h e .. \

r i s lon or Section 5 hereof 5s in excess OK 20 cents per p o d ,

l'he GO- a y at it3 expense rennvc W timber on Ian33 t o

be flooded in connection with the H o r b ff a d to the extent that

such rewmal u i l l not delay ACCAH in &g b e n e f i d d l use o f the

uater, ALLAH will m t be reqnired to remve t imber fnna lznd f l d d

or to bk flooded except a~ bereinafter specified, No s t w e o r

myalty uill be exacted on tbber a c b is flooded o r which' Is n o t ,

used o r otherwise disposed of bg AGCAH.

- O n thg l a d s which are to be flooded & vill c l e a r - . and,nakc_

usable t o low water level. a l l public road' and trail mds, m t e r . . . . - . . ' trails between lakes and su& other a p a s as t h e CXJiWZNENT ET -

.. . . .

direct up to a total wst for a l , l clearing by AU:BJ not to exceed . .. . .

. wY),000. ALCAN re-=stabUsh,wharfs, lamih&s, docks and o t h e r . .

public approaches, o r .plbllc f a c i l i t i e s tha t &st d are i n use a t

. t h e tine of this agreement znd uill keep the water appmcches' t o sr -!

l i c i l i t i e s clear of debris, and!maintain navigability between them'to . I

the extent now enjoyed,

8, Incorporation of t c r w n s i t e s . . - . . Hh~never the Hnister of W c i @ Affairs o r ALEX s h a l l so

or upbn ;:petition d e r the provisions gr the Hunic ipd l i t i~ s - . . . .. -

h&&ration Act, the OJVERHMSHT will lnmrporzte into one or rmrc . . , i .+..

c i ty o r d i s t r i c t o r v i l lage d c i p d i t i e s all townsites o r other

centres ol: -&pallation developed o r to bz ddedopd h conraection with - . . . - .

the Works. Xlso t he -, with tk consent of the L&slature,

u U L inrorpcaate into anc o r m o r e TCndrt~trial Towrrrhips" juch areas . - r- . - - - of lznd as d m mar deiignate, and specif i&lly those arers o r t rac ts . . of land nhi& HIJ-be -tuned by ALCAN and which wilZ include the d m , - _ - - - _ tunnel;, transmission l ines, roads and all other prtions of t h e Wc~rks.

9. S d e of Povcr by AtCAN -

In order that tbe promtion d developwnt o r the district m d

or other industries in the vicini ty of the Woiks nq- h- encmu-aged,

h L E 3 may s e l l to others electric em,,? generated a t t h c Uom

s h a l l nc~t by xasm of snch sales bz deezed a plbLTc utFllty vithin

tk reaning of the OPublic M i l l t i e s Actn. Haxcver, t h e t e r m of

s d e s t o persons other than ALCAlJ1.5 own subsidiaries, employees and

tmants s h r l l be subject to t h e ju r i sd ic t ion of t h e Public ~ t i l i t i e s -

b d s s i o n , but said Conmission s h d U have no authority to require

U U N t o furnish serPice o ther than retail. d i s t r i b u t i o n and smjll

pwer s e d c e t o any one in t h e absence of an undertakLng so t o do - -

. . 3 the par t of MEAN-or to require 'ALCAN t o extend any service t h a t

it shall h2-r~- undertaken to furnish,

The rentals payable by llLCAN pursuant to Sections 4, 5 and 6

hereof s h i U be in l i e u of e, taxes and other charges of any nature .. .

h a t s o e ~ e r M s e d by o r under the zu thor i ty or t h e CDVERNMl3T on o r

i n respect 3f the Works or t h e lands appurtenant the re to i n c l u d i n g

' 11wde.d I d , o r t h e operation of t he works o; t h e e l e c t r i c energy

s n e r a t e d thereat ' except a) P m v i n c i a l Land and R-oiincial School . . Taxes on the v d u e or lards and &provements owned by ALCAN which rre

' .*, f _. .,f' not then within the ~ ~ e s of an organized municipality or -a s d d

. .. alh&st~dal Tovnshipn; b) Taxfh imposed by a d c i p a l i t p on property

.' ;&id by- m; c ) Provincial I+nd and hovincial S-1 Taxea .on tb% . .

. -roved of lards owned by ALCAN in an 'Industrial Townzhip"

.. . . .. , . .. ' inthin whiirh ALCk wiU. proride regdred publ ic 'serP-ices PmvincidL . .

- . &tandad=, and d) franchise and Income T-s, m e and consumption . .

. (except on e l e c t k c energy e m r a t e d and used by W. or its ' iubsidiar ies engaged in processes contributory to the production of

.tluminum) and t axes -o r a similar nature general ly applicable tor-

- p r a t i o n s d k b g bruiness i n tbe Province,

The (XIVEFUHE~T w & U no t impose or authorize d i s c r i d n a t o r y taxes . - o r charges of any nature whatsoever on or i n respect o f the Uarks,

e

tk operati3n o r the products of the Horks, o r t h e conduct o f t h e

b,usiness incident thereto.

11. Ik~?ndabKlity o f M r Sup~lp: \

It Is r e w g n i z e d t h a t ALCW is a party to this Agrcemznt s o l c L y ' I

. with the expectation t h a t it dl1 h 2 ~ e the contin* use of a l a r g e

quzntity of low cost e l e c t r i c energy h be ~ l o y e d according to its

needs for tk prodnctian o f dlmdmnn7 the cost of such energy be ing

in lzrge part predaterrrdned by the mnnt of the carrglng charges on . -

- its investment in the p f i i o n of the #~rkr p&clng t b e said energy, - It is, therefore, a p e d t h a t MXKN wW not be repairrd gr cum-

. pelled to supply to the I;OlEFWENT o r t r r - else any o f the paver

generzted a t the Horlc~, esjccept as prvvidsd in Sect ion 9 hereof,

12. Fcrce Hajenre - _ . --- If by reason of any w e n t mt reasonably' wit- its contml ,

shzll be delayed in t b e w-ce'ment o r prosecution .of the con-

s t r u c t i j n of the Works, the da tes s ~ c i f i e d i n Sect ion 2 hereof sJ&U

be extended by t h e perisd of such dzlay o r delays.

Nothing in this A p e m e n t s h a l l be deeraed t o restrict o r impair - the r i g h t of AtCAN s e l l , mortgage, c o A y , lease or oUenrise as-

'

&sz of o r transfer, in &ple o r in part, t h e W~rks, any associated

p&pzrty ovnkd by ALCAN or t h e r i g h t s and p r i m e 5 3 t h a t lUL4.N h&' . .

.&er:this ~ e - e m e n t and dll li-ces, permits and o t h e r ins t ruments

thzt here been or map:-be del ivered l o r the purpose of confLnubg o r

..&nple&nting the name; provided, however, t h a t kith the exception af

& l o b such s d e , mrtgage, am~pance, Peazie o r o t k i d3.spsZCik

o r trznsfel: shall h made expreszlj sab jec t t o the tenm of t h i s - ~ ~ r e ~ -

a 2nd provided f u r t h e r that, without t h e consent of the )Wster, 5

such s d e , mortgage, conveyance, l e a s e o r t r u r s f e r s h i l l be made

p r i o r t0 1st Jrnuary 1963, except ta a subsidiazy o r an d f i l i a t e of

I'Ullt31 2r tr.a a t r u s t e e . o r otherni'se a a n incident ta the finurdng

of th2 c ~ n s t r u c t i o n of the Works by ALCLN o r a subsidinry o r ul 73-

14. bzpl iwt ion of Sta tu tes - --- .- -. . .

She present provisions o f the "Water bctn s h i l l bc zppliczble t o

. .

this AgrcerPnt a d to t b e s a l d U m r . ~ cr licences and permit or per-

nnd mt in uxllXict k t h the t e r n of this Lgi-eewht, or of tbe

licence o r licences znd permit ~ = . ~ e & t s , Xrrg prbvision of this

Ag~ernrrnt or o f ' s d d . l i e n c e or l f c ~ n c e s m d permit or permits t h t

Ls in conflict vith ury present or futnrr statute of gene& appli&-

tion sh2U. not k . . h n k i d a t e c l by *reason of SKI& conf3.l c t . 15, Successors m d I s s i p 'z

This Lgreewnt shall be bl@ing.upon and in- t3 thc benefit of

t h e s u c c e z s o ~ &signs of U. . . - - -

I 3 NlTPlESS ~ F E O F the Hinlster of Lands and Fores t s hrs hereunto

s e t his hsnd ad s e a , am3 ALCZd h;as ienunto caused i t s Corporate s e d

to be a f f i x e d and this Agrc-nt to be signed by its President and ~ecrctaqy as 'of the :day .and yesr first above written,

- SIGNED, s m AND E I J X E D ) "SEAL". the K M s t e r of Lands aod)

Forests in the h e n c e of ) . . . 1 (signed) eE.T, ~ " , (~i&d-) IlG.S. WISHER" )

Attomep General.. . ) -I

and zutbori~~-d to store, &vcrt ard use water and t o m i t r u c t ,

and operate mrb as follows: I

(a) 'Ihe sources of water supply are the Nechako Rinr &re Grad Caqon and a l l the s t r e a m s and Lakes t r i bu t a ry thereto, SkLns Lake, and t h e NsnLka Ttiver ud a l l the stream znd lakes t r i bu t a rg . t he r r t o except the t&- tar ies which join the sa id . river more than t.m miles &- law gidprlce Lake,

(b) %e points of storage, diversion and use, and the Bctent of the etarage reservoi rs a.rz apprnXbately as shown on plan m k e d = b i t ."An which is attached hereto and - forms part hereof.

(c) The date from which this l icencc s h a l l have precedence - --- i s 3rd August 1949,

. . . (d)' The purposes fo r which the water is t o bz used ue s b r -

. . - age and polser as set f o r t h 5r1 an Agreement k t x e e n the Covernwnt an3 tk Licensee, d a t e d 2 9 h December 1950.

(e) . The maximum quanti ty of water wfiich m y be stored is 35,-000,0(Y3 acre f e e t , The r.zk o f diversion is ?,!XO cubic f e e t per s e c ~ n d .

(f) The period of t he yz* during uhich the wzter m y be stbred, diverted- and used is t h e .*ole year,

I

(g) me land upon-nfdch t he water is to be use3 a d to w N c h I t h i s licence is appurt-t is tha t 1 4 i&ich is reqnlr-

ed for the powr buses n f e r r e d to 5-n the s a id Agreenent and indicated on the s a i d plan marked =bi t "dm,

Dzpdrzent of WATER RIBITS BJ?J?J I~ laxls d Forests

(h) The mrks authorized to be constructed ere t be mrks rr- f e r h to in the'said Agrcarent and indicated on t h c s a i d plan -marked =b i t "An,

. . . .(i) lhe construction of the s a i d Works sh* -be cwmenced and

'

carried on in accordance with t h e tcnns set ioriir in Cne s a i d Agreement,

.. (j) - The I.ic&see shall furnish simultaneonslp- t o the Department of Fisheries of t h e Covermrznt of Canada, the Czme C & d s - =ion or the C o v e m t of Br i t i sh (%,lmnbia a d t he Comp- t r o l l e r of #ater.Rights copies of the plvcl and spccifica- t ions of a . works pmposcd to be cmstmcted &- b h m not

. ';:..comence the corutruct ion.of any vrrrks u n t i l the plans and -kpecificatioru thereof h a w been approved by the said hmptrdller,

(k) The -L icensee - she not s tore , fiver+ o r nse. my water i n any.fese.mir to be crcated nnder t h i ~ l iccnce until t h e plans for the construction of such w r k s have been subodtted to tfic Comptroller a d approved by him.

(1) This Licence i s i s sucd i n ~ccordance with the t e r m of thc sa id Agreement between t he Covernmcnt and the Licensee, dated 23th December 1950, an3 i s to bc attached thereto an3 fonn a p a r t thereof,

Cmptrollcr of f i t c r Riqhts

F i le I : Dateissued: 29 th h e m b c r l 7 5 0 Llccnce KJ-: 19847

Thc Coverrrmerrt o f tt2- Pro-rince of B r i t i s h C z l c - - i a

P_rRKIT UHIW 'IHE "WATER AC3,1935", AUlXOFUZMC

THi? OCCDPATION OF CRC'n7.1 LUTE

The IINYIW'K aEIPJm OF CXNAIIA, LIMTED, o f k n t r e d , Quebec k i n g

t h e holder'of (Snditiond Water Licence No. 19347 authorizing t h e s tbr-

rge, diversion ard use of t h e - w a t e r af t h e Nechako H m r , Skins Jake and

Hrnikr River 4 t h e i r t r i b u t a r i e s is hereby avthorlzed t o occupy by end

. i n connection with flo33ing those C r o w n h d s lying below t h e 282Q-rot

' (referred ts a bench-mark in Ootsa v i l l a g e established. bp. the Hater rtight3

b m c h of the Ikpartmznt of Lards and Fo'orrsts o f Brit ish ~olumbia) contour

.znurtd zrd rdjacent to t h e storage r e s e r v o i r t r ibu ta ry ta t h e ICechako River

aria Slbns Lxke, and b e l ~ w t h e 3120-foot ( e f e r r e d t o tbe above-nmntioned

ber.ch-nark) cantour around and adjacent t o the storage rese rvo i r t r i b u t q

t.3 the Hurikz Rivei as shown on =bit, aA' atteched hereto and forming

p u t her rof , and tb occupy by and i n connection Kith the construction,

naintenance a d operation of t h e wrh re fe r red t o in t he said conciiti?nal

l i p ~ c e thsse Q-oxrr Lands des-ted -5n an Agreement between the ~o~crnrrent

- q d - t h e Usensee dated 29th kc-r 199, t h e total having an area of soae

300 s q u u e miles the exrct a.&a and&script ion t o be determined a s - s t a t e d

i n the skid hgreement,

The Licensee i s authorized to use o r destroy the timber on t h ~ said'

lands by s-rgbg it o r o t k ~ s e in accordance &th the terms and con- .

diti- ~ i : the s2id P!reenent, - -

This permit is appurtenant to t h e lznd to lhich the r f o r e s d d Con-

ditional Hzter LLcence is appurtenant.

Its .c~+ticsls G l a t i v e t c the m\ts granted urder this are - -

i n pccordance with t h e terms of the said ~greemedt made between the k e r n -

ment 4 the ktens;e . dated . 29th December 1950 t o which this pernit is to . -

be ettrchod and..,fom a part thereof. . - -

Issued the 29th dzy of kcember 1950.

Number .... .3Cb9. ...... Fi le .................. : i . R . )f-=p ..............

.............. Ref . K3p

( ~ i p p c d ) "E-T. EiJ IEYn Kinis ter of hnls and Forests-

AUlAM ALUnfMIUn LIXIIIIED AMD BRITISH COLUMBIA HYDRO

AND POWER AUTHORIm

LONG TERM ELECTRICITp PURCEDSE AGREEMENT '

This is Exhibit 'I referred & in the

Affidavit of - P&tl~

Sworn before me at . & i ~ ~ ~ r a o 6-c

. . .

ALCAN A E U H f N f ~ LIMITED AND BRITISH COLUMBIA HYDRO AND POWER AUTHORITY

LONG TERn ELECTRICITY PURCHASE AGREEMENT -

-

Table of Contents

Definitions Buration Electricity Point of Delivery Sale and Purchase Schedule P r i c e &n-d Escalation B i l l i n g and Pament Rater Rentals and Taxes Metering .

Suspension of perf onnance Liability. Dispute Resolution and Specific Performance

Default Assignment General .

Appendix "A" Price Escalation 1988 - 1995

- R3-ELECTRIcTTY PURCHASE AGEEIIENT

THIS A G R E W N T is made as of the 27th day of February, 1990-,

A

ALCAN ALDMIPIO# LIMITED, a company lincorporated under the laws of Canada, having- its head office in the City of Hontreal, Quebec ("Alcan') and represented by its duly authorized agent ZIl;CBN SMELTERS AND CHEMICALS L I M I T E D -

OF THE FIRST PART

AND :

p-ETA KYDRO AND PORER AUTRORITY, a corporation established under the Kvdro and P o w e r Authoritv Act (British Columbia), having its head office in the City of vancower, British Columbia ("B.C. H y d r o " )

OF THE SECOND. PART.

WHEREAS :

A. A l c a n owns and operates an electrical generation-and

transmission system as an integral part of its aluminum manufacturing facilities in B r i t i s h Columbia;

<.' ' . ' ' B-' A&q$n is expanding its -elec;tricai" gwerat$oh and :-

-2,;'

-~,':..~;~.~-~.*,~.,- t ~ s m i s s i o n . . sys~e1:~5i).- ~ Y r & & , $ u t ~ & ~ ~ - s i o n of i t s ..r,.. =-:*.-> .,.,*!.:A . aluminum $anufactur~rr4';$aci'ir~t~es in British C o l u m b i a ;

C. U p o n completion of the expansion of its system, Alcan w i l l have electricity surplus t o i t s needs liiiti.1 required by

APc:iri. for its o h i n d u s t r i a l purposes; .

D. B.C. Hydro owns and operates an elecrrical generation,

transmission and distriburion system in British C o l p b i a ;

E, B . C - Hydro anticipates,it v i l l have a requirement for t h e

surplus electricity available from Alcan; and

F, Alcan and B.C. ~ y d r o wish to provide for the long-term sale

and purchase of electricity f r o m Alcan to 3. C. Hydro on the

terms and conditions of this Agreement;

NOW, THEREFORE, THIS AGREEXENT WITNESSES that in consideration of

the murual covenants and agreements hekein contained the parties

mutually covenant and agree as follows:

LCTXON 1 - DEFINITIONS -:/'=

1.1 For the purpose of this Agreement, the following words and

phrases shall have the folloving meanings:

1.1.1 "~lcan's System' means the electrical generation

and transmission system owned and op&;ated by - Alcan in British Columbia in accordance with the

1950 Agreement and the settlement Agreement;

. . 1-1.2 "Base Price' has the meaning set out in Section 7;

1.1-3 "B-C. ~ydro's System" means the electrical

generation, transmission and distribution system

owned and operated by B-C. Hydro in B r i c i s h

Columbia;

1.1.4 *Coordination Agreement" means the agreement,

betveen B.C. Hydro and Alcan, made as of the 27th

.. .

day of February, 1990 providing for t h e

coordination of B . C . .Hydro ' 6 System k d Alcan s

System ;

1-1.5 'Effective Date' means.1 Januaxy 1995, subject to

Section 11; 1

1.1.6 "electricity" means both electrical energy and

capacity;

1-1.7 'Kemano Completion Project * - means t h e planned

expansion of Alcan's e l e ~ t r i c a l generation and

transmission system in Brit ish Columbia scheduled to be completed in 1995;

1.1.8 " K i t h a t Substation" means the electrical

substation of Alcan at its smelter a t K i t i m a t ,

British Columbia;

1-1.9 "make available" or similar words when used i n

reference t o e l e c t r i c i t y means t o maintain or Zo

be willing and able t o maintain nomintil voltage and frequency at the PO& of Delivery;

1.1.10 '1950 Agreement" means the agreement dated 2 9

December 1950 between H e r Hajesty the Queen i n

Right of t h e Province of British Columbia and

Alcan under the authority of the Jndustrial

Development A c t (British Columbia), as amended;

1.1.11 'Point of Delivery- means the high voltage busbar

at the K i f i m a t Substation or other de l ivery points

agreed by the part ies ;

- 1.1.12 "Price' means- the price to be paid by B-C. Hydro

to Alcan for electricity made available to B .C.

~ y ' d r o under this Agreement, as detexmined from

time to time in accordance vith Section 7;

1.1.13 'Prudent Electrical Utility Practice' means =he a

standard practices, procedures, methods and acts

presently used by Alcan and B.C. Hydro on their

respective Systems, provided always that such

Prudent Electrical Utility Practice shall not at

any time fall-materially below generally accepted

practices, as exist fron time to time, of the

Uestern Systems Coordinating Council and the

Northwest Power Pool;

1-1-14 'Schedule" means a schedule for electricity to be ' i made available to B . C . H y d x o ih accordance w i t h

paragraph 6.1;

1.1.15 'Settlement Agreement" means the agreement dated

14 September 1 9 8 7 among H e r Majesty the Queen i n Right of Canada, Her Majesty the QueGn in Right of the Province of British Columbia and Alcan;

1-1-16 'Systemw shall include all water storage,

hydraulic, electrical generation, transmission and

distribution fac i l i t i e s comprising either Alcan's

System or B.C. Hydro's System, as the context

requires, and 'Systems " means both Alcan ' s System

and B - C - Hydro's System;

1.1.17 "Termination Date' means the date on which this

Agreement is terminated in accordance vith

paragraph 2.1; and

1.1.18 'year' means a calendar year unless the context

requires another meaning.

2.1 This Agreement shall commence as of the date first above

written and shall terminate on t h e Termination Date which

sha l l occur on the twentieth ann ive r saq of the Effective

Date or on such earlier date when termination occurs as

here in provided o r when the recar1 of all electricity

otherwise t o be made a v a i l a b l e t o I3.C- Hydro under this

Agreement is i n e f fec t under paragraph 5 . 4 .

2 If the Effective Date does not occur on o r b e f o r e

1 January 1 9 9 6 , either party may terminate this Agreement by

giving notice of termination t o the o t h e r party.

SECTION 3 - ELECTRICITY

3-1 -FOP the purpses of this Agreement, e l e c t r i c i t y s h a l l be in

the form of three phase alternating current, a t a nominal

frequency of 60 Hertz and at the nominal voltage existing a t

the Po in t of Delivery. The voltage var ia t ion at t h e Point

of Delivery s h a l l be not more than 5% f r o m the nominal

voltage except during contingency or emergency conditions.

Each party s h a l l make a l l reasonable efforts t o operate its

System i n such manner that any f l o w of r eac t ive power shall

not adversely affect the System of the other p a r t y , and for

t h i s purpose, sha l l provide f o r its reactive requi rements

i n c l u d i n g reserves. Alcan s h a l l make r e a s o n a b l e efforts t o

operate i t s System so chat e l ec t r i c i t y made avai lable t o

- -

B-C. Hydro under this Agreement shal l not have an adverse

effect on the vave form of electricity in the B - C. Hydro

System.

3.2 Alcan shal l make available to B.C. Hydro under t h i s

Agreement : a

3.2-1 285 annual average NW a t a load factor of 100% so

long a s t h e Systems are coordinated under the

Coordination Agreement; and

3.2-2 285 annual average )m -at .a load factor of 95% i f

and vhen the Systems are not so coordinated.

3 - 3 The amounts of elecrricity s e t out i n paragraph 3 . 2 s h a l l be

reduced by the amounts of electricity recal led by Alcan i n ' I

accordance with paragraph 5 - 4 ,

SECTION 4 - P O I N T OF DELIVERY

4-1 Subject to zhis Agreement, Alcan shal l make elettricity t o

be purchased by B.C. Hydro under t h i s Agreement available to

B.C. Hydro at the Point of Delivery.

SECTION 5 - SALE AND PmCKASE

5-1 Alcan sha l l sell t o B.C. Hydro, and B.C . Hydro shall

purchase f r o m A l c a n , electricity in accordance with this

Agreenenr -

.2 Notwithscanding Section 11, B .C . Hydro shall pay Alcan f o r

all electr ici ty made available by A l c a n to B.C. Hydro on and

I

-,

after the Effective Date in accordance with this Agreement,

whether or not ,such electricity is actually taken by B.C.

H y d r o , provided:

5-2-1 B.C. Hydro s h a l l not be obligated to pay Alcan for

electricity that Alcan does not make available to B-C- Hydro due to a recall of such electricity under paragraph 5 . 4 ; and

5 - 2 - 2 If Alcan is prevented from making electricity

available to B-C. Hydro due-to a cause excusing

Alcan from performance under Section 11, B-C.

Hydro shall not be obligated to make payment in respect of such eleiztricity until it is

subsequently made available to B.C- Hydro.

5.3 The Price payable by B.C. fiydro for electricity made

' i available by Alcan uqder this Agreement shall &.calculated

in accordance w i t h Section 7 .

5 . 4 For the purpose of using electricity generated by ~lcan's

System in accordance with the rights granted to Alcan by the

Government of the Province of BritLsh Columbia pursuant to

the 1950 Agreement, Alcan shall be entitled to recall from

sale all or any part of the electricity to be made evailable to B-C. Hydro under this Agreement, subject as follovs:

5 . 4 . 1 A t any tide, and from t i m e t o time, before the

tenth anniversary of the Effective Date, Alcan may give notice to B - C - Hydro that Alcan wishes to

recall from sale electricity to be made available

to B.C. Hydro under this Agreement- Alcan's

notice shall specify the amount of electricity

subject to recall and the date that Alcan wishes

the recall to commence- Following each such

notice, Alcan and B. C . H y d r o shal l enter Fnro

negotiations in good faith for an agreement to

provide for- recall i n accordance with Alcan's

notice under this subparagraph 5.4.1 on terms and

conditions agreeable to the parties, and, in each case, such recall shall become effective if such

.. -, agreement is reached by the pamies;

5.4.2 At any time, and from time to time, on or after

- the tenth anniversary of t h e Effective Date, Alcan

may give notice to B . C . Hydro recalling from sale

all or any part of the dlectricity to be.made available to B .C. Hydro under this Agreement

effective, in each case, on the fifth anniversary

of the date of Alcan's notice of recall- Each

such not ice shall specify the amount of

e lectr ic i ty subject to recall under that notice

and the date that the recall shall commence, and in each case, recall under t h i s subparagraph 5 . 4 - 2

shall become effective in accordance w i t h Alcan's

notice without further agreement between the

parties; and . .

5.4.3 Alcan may recall elec t r i .~ . igx underq.:,g_ub~~a~&avhs

5 - 4.1 and 5.4.2 ror Alcan's own industrial , , .' . , . -. . . . = .. purposes i n British Col.-ia including without . :.

limitation aluminum manufacturing. . <

SECTION 6 - SCHEDULE

6 1 In the event of termination of Systems coordination under

. che Coordination Agreement, the parties shall establish

I

Schedules for the electricity to be made available t~ B.C.

Hydro under this A g r e e m e n t and by mutual agreement such

schedules shall be arranged to accommodate minor maintenance

on either party's System.

SECTTON 7 - PRICE AND ESCALATION

The Price payable by B-C. Hydro for electricity made

available to B.C. Hydro under this Agreement shall be the

B a s e Price as increased by escalation .in-accordance with

paragraphs 7.3 and 7 . 4 ,

As of 1 January 1988, the Base Price for electricity to be

paid for by B . C . Hydro under this Agreement shall be

2.4t/KR.h.

.-j - , . 7-3 As of 1 January 1995, the B a s e P r i c e shal l be increased at

the lesser of the following rates from 1 January 1988 .to

1 January 1995 inclusive:

7-3.1 Gross Domestic Product inflation, as hetermined in Appendix "A"; or

7.3.2 Kemano Completion Project cost inflation, as

determined i n Appendix 'A'.

3 . 4 As of 1 January 1996 and as of every anniversary of t h a t

date t h e r e a f t e r , the 2rice- shall increase 3% over the P r i c e

i n e f f e c t for the immediately preceding year.

7.5 In no circumstance s h a l l the Price f a l l below t h e B a s e

Price -

SECTION 8 - BILLING AND PAYHENT -

8.1 As soon as practicable following the last day of each month,

Alcan shall send B.C. Hydro an invoice setting o u t t h e amount payable to Alcan by B.C. Hydro under this Agreement

for all elecrricity made available to B.C. B & ~ O d u r i n g such month. On or before the 20th day of next following month,

B - C. Hydro shall pay Alcan the amount. set out in such

invoice. Such amount shall be calculated by multiplying the

amount of electricity made -available to B . C; Hydro in accordance with this Agreement by the Price applicable in

accordance with Section 7 , and s h a l l be paid i n f u l l without

set-off or withholding except as expressly provided in this Agreement.

- L A11 payments by B.C. Hydro shall be made in Canadian funds c , I

at par to an o f f i c e or banker of Alcan, as A l c a n may direcrr,

at Vancouver, British Columbia.

8-3 Any payment to be made by B - C - Hydro remaining unpaid, in

whole or in part , vhen due s h a l l be subject to -late paymenc charge at an annual r a t e of interest equivalent to the Royal

Bank prime hending rare plus tvo percent cslculated on t h e amount unpaid from the due date of payment unt i l payment is made. F o r the purposes of this Agreement the Royal Bank

prime lending rate shall mean the m o s t favourable lending

rate from t ime t o time of The Royal Bank of Canada, Main

Branch, Vancouver, British Columbia on demand loans i n Canadian currency to the Bank's corporate borrowers, and

g e n e r a l l y described as the Bank's "prime rateu-

4 If any payment to be made by B.C. Hydro remains unpaid, in

whole or in part, when due then A l c a n may, afrer g i v i n g B,C.

I

Hydro not less than 10 days' notice, suspend or discontinue

the supply of electricity to B.C. Hydro but no such

6uspension or discontinuance by Alcan shall r e l i e v e B.C.

Hydro from any provision of this Agreement, including the obligation to make payment of any sum, nor shall any such

suspension or discontinuance constitute or be • deemed to

constitute rescission of this Agreement. The provisions of

this paragraph 8 - 4 are in addition to and not in

substitution for any other remedy available to Alcan, at law

or in equity. . -

SECTION 9 - WATER RENTALS AND TAXES

9 - 1 B.C. Hydro shall reimburse Alcan for all water rentals, or

other charges in place thereof, payable in respect of

electricity made available to and taken by B-C. Hydro under

- - ,/ this Agreement, and in respect of the generation or

provision thereof. Alcan shall invoice B.C. Hydro for the amount payable by B - C - Hydro to Alcan under this paragraph

9.1 as soon as practicable after payment of the

corresponding water r e n t a l s , or other charges -in place

thereof, by Alcan, and B.C. Hydro shall pay such amounc to

.&Iran in f u l l xithous setoff or withholding on or before the 20th day following the date of such invoice. B.C. Hydro's

obligations under this paragraph 9.1 shall continue

notwithstanding the termination of this Agreement.

9 . 2 B - C - H y d r o s h a l l be responsible for and shall pay all sales

taxes and similar charges payable by B.C. Hydro on

electricity made available to and taken by B.C- Hydro under

t h i s Agreement.

I

,SECT1 ON 10 - METERING -

10.1 If the Coordination Agreement is terminated during the continuation of this Agreement, the parties s h a l l establish

all metering operations necessary for t h e purposes of this Agreement - .

SECTION 11 - SUSPENSION OF PEWDRKANrE

11 -1 Subject to t h i s sect ion 11, i f . e i ther pa&Y i s prevented or delayed i n performing any obl igat ion under this Agreement by

any cause beyond its reasonable cohrrol, performance by t h a t

party of such obl igat ion s h a l l be excused to the extent that

i t i s s o prevented or delayed until such cause has been

removed or overcome, To t h e extent that such causes are

beyond the reasonable control of such party, those causes ,' shall include, without l imit ing the generality o f the

foregoing, flood, earthquake, storm, l ightning, fire, - epidemic, war, r i o t , civil disturbance, labour disturbance,

sabotage, and the act o r fa i lure to act by a court ,

administrative authority or other lawful authorl&; but such

causes shall not include lack of f inanc ia l means.

11.2 A party e x c u s e d under t h i s Section 11 from performance o f

any obligation, or reasonably ant ic ipat ing t h a t it will be

so excused, s h a l l give n o t i c e t o that e f f e c t promptly to the other party and sha l l make all reasonable efforts to remove

or overcome the cause of t h e prevention o r delay as soon a s ' i s practicable.

11.3 If prior to 1 January 1 9 9 5 ei,ther party gives n o t i c e to t h e

. other party as provided under paragraph 1 1 . 2 , then the

Ef fec t i ve Date s h a l l be postponed to the e x t e n t t h a t such .. .

party is so prevented or delayed, subject to termination

under paragraph 2 -2.

11-4 If any cause under this Section 11 excuses performance and

prevents B.C. Hydro f r o m taking electricitg made available

by Alcan in accordance with Section 3, A l c a n shall make all

reasonable efforts to make available. subsequ&t 1 aid at no

additional cosr to B.C. H y d r o the energy component of the electricity equal to such shortfall in accordance with a delivery schedule to be established by the parties for such

purpose.

11.5 If any cause under t h i s Section 11 excuses performance and

prevents Alcan fro* making electricity available to B.C-

Hydro in accordance with Section 3, Alcan s h a l l subsequently m a k e all reasonable efforts to make available t o B.C. Hydro

,I t h e energy component of the electricity equal to such s h o r t f a l l i n accordance vith a delivery schedule to be

established by the parties for such purpose and B . C . Hydro

t h e n shall pay- for such shortfall in -accordance with this

Agreement.

1 1 . 6 If any cause under r h i s Section 11 excuses performance and prevents Alcan f r o m satisfying both i t s own requirements for

electricity and the scheduled deliveries of electricity to

B.C. Hydro under this Agreement, then during the

continuation of such cause Alcan.rnay reduce the amount of

electricity it makes available to B.C. Hydro in proportion

to Alcan's reduct ion of its other firm loads . Alcan shall

subsequently make all reasonable efforts to make available

to B.C. Hydro the energy component of the electricity equal

t o such shortfall i n accordance u'ith a delivery schedule t o be established by the parties for such purpose and B.C.

Hydro then shall pay for such shorrfall in accordance with this Agseement .

SECTION 12 - .Lf ABILITY 1

12.1 Neither party, its servants or agents, shall be liable to the other party for any loss, injury, damage or expense of

the other party caused by or resulting from any suspension,

discontinuance or defect in the supply of electricity,

alleged or caused by an act or omissi-on-of--Alcan or B-C- Hydro, their servants or agents, whether such act or

omission is later found to be negligent or otherwise-

Except as otherwise provided in this Section 12, neither

party, i t s servants or agents, shall be liable to the other

party for any loss of revenue or profits or other indirect

,; loss whether such loss is caused by an act or omission later

found to be negligent or otherwise.

12.2 Paragraph 12.1 shall nor relieve B.C- Hydro from its

obligation to make any payment to Alcan under this Agreement

or prevent Alcan from exercising any remedy available to it

ar law or i n equity in respect of any non-payment by B.C.

Hydro hereunder.

B C T I D N 1 3 - DISPUTE RESOLUTION.AHD SPECIFIC PERFORNANCE

13.1 If the parties are unable t o agree on any matter under this

Agreement, such matter shall be referred.by the parties for

determination to t w o s e n i o r executives, and each party shall

appoint one of its senior executives for this purpose- If

those senior executives despite t h e i r best efforts are

unable to determine the matter within 30 days of its

reference t o them, t h e parties may by further agre-eent

refer t h e matter t o a single arbitrator f o r de te rmina t ion in

accordance with the Commercial Arbitration Act- TBritish

Columbia) .

13-2 T h e parties acbowledge that a declaxatozy judgment or

damages may provide an inadequate remedy forbany breach of any provision of this Agreement, and accordingly GZich part;y s h a l l be e n t i t l e d to seeb:t~p7~g:~P~~. peffa&iia&e or other

similar remedy t o ensure full and proper performance by the

other party of its obligations under this Agreement and such

remedy may be sought i n l i e u of o r i n addition to any other

remedy available a t l a w o r i n equi ty in respect of any s ~ c h

breach.

SECTION 14 - DEFAULT - I

1 4 . 1 Subject t o Section 11, i f either party defaul t s in the

performance o f ' i t s obligations under this Agreement, t h e

other pa r ty , i f it intends not to vaive the default, shall give notice ro the defaulting party r e q u i r i n g ft* t o remedy t h e default within:

14.1- 1 14 days where Alcan is in default of i ts

obligation under paragraph 3 .2 ;

14.1.2 14 days where B.C. Hydro is i n d e f a u l t of i ts

obligations under paragraph 5.2; or

14.1.3 90 days i n respect of any other default.

14-2 If a party in default does not remedy t h e default i n t h e

time specified under paragraph 14-1 the o t h e r party may

terminate this Agreement by giving notice of termination to

the party in default.

14.3 Termination of this Agreement under this Section 14 shall

not prevent either party from seeking any remedy at lav or in equity to which it may be entitled in respect of any breach of this Agreement by the o t h e r party prior t o the

. ~ermination Date-

SECTION 15 - ASSIGNMENT

15.1 A party may assign this Agreement only with the prior wri t ten consent of the other party, such consent nor to be

withheld unreasonably.

, I 15 - 2 The party assigning this Agreement shall require its assignee to agree in- writing to be bound by this Agreement and to execute-and deliver that agreement in writing to the

other party. Notwirhstanding such assignment, the party

assigning this Agreement shall continue to be liable for the

'full and proper observance and performance thereafter of all obligations on its part under this Agreement as if such

assignment had never occurred.

15.3 If a sale or other disposition, directly or indirectly, of a

party * s electrical &ration and transmission system or any

operationally significant part thereof is proposed and prior

ro the dare of such proposed sale or disposition the

prospective acquirer does no t enter into an agreement in

w r i t i n g w i t h the other party providing t h a t such electrical

generation and transmission system or part thereof shall be

operated in accordance with this Agreement, such other party

may terminate t h i s A g r e e m e n t in accordance w i t h subparagraph

14.1.3- Notwithstanding any such sale or disposition, rhe

party selling or otherwise disposing of i ts electrical generation i d transmission system or any opesationally

s i g n i f i c a n t part s h a l l remain liable t o the other party for the fu l l and proper observance and performance thereafter of a l l obl igat ions on i ts par t under this Agreement • as i f such

sale or d i spos i t i on had never occurred.

S E C T I O N 16 - GENErZAL

1 6 . 1 Subject to the provisions of this Agreement, each p a y

shall co-operate w i z h the orheir party and promptly take a l l

such further ac t ion and do a l l such furcher things as m a y be

neces saq to permit t h e performance of t h i s Agreement as herein contemplated.

1 - 16-2 N o waiver by e i t h e r party shall be effective unless made i n writing and delivered to the other party, and no waiver at

any time by e i ther party of its rights with r e s p e c t t o any defaulr by the orher party o r w i r h respect to any m a t t e r

arising i n connection with t h i s Agreement shali be

considered a waiver with respect t o any subsequent default

or m a t t e r -

16.3 Each party s h a l l designate a l l data and information vhich it

wishes r o keep conf ident ia l for the purpose of t h i s paragraph 1 6 . 3 and the other party, for a period of 10 years

thereafter, s h a l l not disclose any such data o r information

without the prior vritten consent of rhe designating party.

The parties s h a l l make all reasonable efforts to limit

disclosure of such data and information to on ly such of

their employees or agents who shall need t o have access to

such information for the performance o f t h i s Agreement and

shall take all reasonable precautions to ensure t h ~ any

employees or agents (and any third persons to whom one party

discloses confidential data and information with the consent

of the other) abide by the obligation of confidentiality

hereunder, The terms and conditions of this Agreement shall

be kept confidential by the parties in accor$ance w i s h this

paragraph 16.3. Neither party, its employees or agents,

shall use any confidential data or'infomation of the other

party to that party's detriment.

16 . 4 Notices or other communications between the parties may be

given by telecommunication (including facsimile

transmission) or may be in writing and delivered by hand or

sent by prepaid mail. Where a notice or other comunication

is given by telecommunication, -the party giving it shall, as

soon as practical after the giving of it, deliver to the

other party written confirmation of the contents of such i notice or other communication. Notices or other

communications given by telecommunication in legible fonn

shall be deemed to have been received on the same day they

are given. Notices or other comunications given in writing

and delivered shall be deemed to have been recGived when

delivered. Notices or other communications delivered by

prepaid mail shall be deemed to be received vhen delivered.

Notices or other communications shall be given to each party at the following addresses:

16.4 -1 to Alcan:

Alcan A l u m i n i u m ~ h k t e d

118 8 Sherbrooke Street west

Montreal, Quebec

Attention2 The Secretary

16-4.2 to B.C. Hydro:

B r i t i s h Columbia H y d r o and

Power A u t h o r i t y 970 Burrard Street

Vancouver, B . C . V6Z 1Y3

Attention: The S e c r e t a q

or to any other address of a party of which it-gives n o t i c e

to the other- During periods of disruption of postal

services, all notices or communications shall be given by

telecommunication or de l ivered - In the _ - event of emergency conditions, notice shall be given, orally or in writing, as

soon as practical and if given orally the notice shall be

confirmed in vriting as provided in this paragraph.

16.5 In t h e performance of this A g r e e m e n t , and i n a l l m a t r e r s

r e l a t e d thereto, each party shall observe and comply w i t h

a l l applicable laws and regulations and the other

requi rements of lawful authorities-

' 1 6 - 6 This A g r e e m e n t , and the ~bpendix attached hereto, conscirute

the entire agreement between the parties in respect of the

subject matter hereof and supersedes and replaces all prior

communications, understandings, representations, warranties

and agreements, whether oral o r written, between t h e parties

-in respect of the subject matter of this Agreement- -NO 1

representation or varranty shall apply or be deemed to apply to or i n respect of the subject m a z t e r of t h i s A g r e e m e n t or the performance by either party of any of its obligations

under t h i s Agreement unless such representation or warranty i s expressly s e t f o r t h or-acknowledged herein.

16-7 T h i s Agreement cannot be amended or modified except by

agreement in writing duly executed by both parties.

16. 8 This Agreement shall be governed by and construed i n

accordance with the laws of the Province of B r i t i s h

- L - S

i Columbia.

16.9 This Agreement -shall enure to the benefit of and be binding

on the successors and permitted assigns of the parties

hereto.

I N WITNESS WHEREOF the parties have executed t h i s Agreement as of

t h e day and year f i r s t above written-

ALW ALUMINIUM LIMITED by its duly authorized agent =AN SHELTERS AND CHEMICALS LIMITED

BRITISH COLUMBIA RPDRO AND POWER AUTHORITY

- LONG TERM ELECTRICITY PURCHASE AGREEKENT

APPENDIX 'A'

PRICE ESCALATION 198B - 1995

This Appendix sets our the procedures for derermining the

escalarion of the Base Price from 1 January 1 9 8 % to 1 Jmuary

1995.

The escalarion will be the lesser of che compound increase i n the

Gross Domestic Product implicit price index ( 'GDPI") and a

derived inflation index for zhe K e m a n o Completion Project

1 K he value of the indexes will be detemined from indexes recorded

by Statistics Canada in its Canadian Socioeconomic Information

Hanagemenr System database ( ' W S I n ' ) , and published, for the

years 1987 and 1994- -

GDPI(94) and GDPI(B7) represent the respective year end values of

=he GDPI for the j.SaiS 1994 and. 1 9 8 7 . The ratio of t h ~ s 2 t w ~

values vill be the measure of inflation of t h e G D P I for the 7

year per iod from 1 January 1988 to 1 January 1995.

KCPI (94) and KCPI(B7) represent the respective annual average

values of the inflation index for the KCPI f o r the years 1994 and

1987- The ratio of those two values will be the measure of

l n f l a t i o n of the KCPI for rhe 7 year period f r o m 1 January 1988

ro 1 January 1995. '

2 3 9 1 ,.. - A. The escala t ion f a c t o r (ESCF) vhich will be applied ro the Base

.rice v i l l be t h e lesser of those tvo r a t i o s , i - e.

ESCF = m i n (GDPT(94) ) or ( KCPZ194) )

( GDPI(87) KCPI(87) )

The GDPI is obtained f r o m the CANSIH database under matr ix

006 6 4 1, reference 020337, This index f 6 also published i n the

S t a t i s t i c s Canada publicarion: System of National Accounts - - ~ a t i o n a l Income and Expenditure Accounrg . ~atalogu; ~umbe; 13-.

001, Table 21.

The KCPI i s composed as shown i n Table 1. Except for Engineering

and Administration (CANSIX reference D482208) and Labour (CANSIM

reference D477504) vhich are given veighrs of 1 0 % and 40%

r e s p e c t i v e l y , index weightings are der ived from t h e composi t ion

of the price index f o r hydroe lec t r i c s t a t i o n s , index D482201,

after extracting i d e n t i f i a b l e labour and i n t e r e s t during

~nstruction and a d j u s t i n g t o an o v e r a l l v e i g h t i n g of 5 0 % (see - Jable 2). This index and i t s components are a v a i l a b l e on rrhe ;

CANSIH darabase under matr ix number 000118-

The labour cost component i s t h e average annual value of t h e

Index of Union Wage Races i n t h e Const ruc t ion Industry, Vancouver

composi te , including Supplements. T h i s index is available on the

CANSIX database under marrix number 0004 01, r e f e r e n c e D477504.

This index i s a l s o published i n t h e Statistics Canada

p u b l i c a t i o n : Construcrion Pr ice S t a t i s t i c s , Catalogue Number 62-

0 0 7 , Table 2 - 2 . The b a s e yea r f o r t h i s index i s 1981, thus the

index has t o be rebased to.1971 = 100 to be comparable to t h e

other indexes . The rebas ing i s done by dividing t h e value of the

index by i t s value in 1971 of 37.0 and by multiplying che r e s u l t

by 100-0, i . e .

- ' , -*he GDPI and-KCPI values for year 1 9 8 7 based upon the most I

current data published by Statistics Canada, and to be used for

illustrative purposes only, are computed as follows:

GDPI(87): 129.6 with base year 1981 = 100 RCPI(87): 358.3 with base year 1971 = 100 or

130.8 w i t h base year 1981 = 100 A

Details for the KCP index computation are provided in Table 3 -

below to serve as an example for future calculations of the final

values.

he index values to be used for both years 1987 and 1994 to make

rhe final escalation factor calculatibns vill be those available

at the time of publication of 1994 year end figures by Staristics Canada (available in the firs= half of 1 9 9 5 ) . This factor and

the resultant price for elecrricity shall be adjusted for any

&sequent revisions made and published by Scatistics Canada in 'the first half of 1996 bur no further changes will be made in the

e s c a l a t i o n f a c c o r a f t e r the first half of 1 9 9 6 .

If any index, or any part thereof, required for the purposes of

this Appendix - A " , ceases' to be published or is calc'ulated i n a

manner s i g n i f i c a n t l y differenr from that prevailing as of the

date of t h i s Agreensnt, the parties shall agree on a suitable-

s u b s r i t u t e index and failing such agreement, a suitable subsrirute index shall be d e r e m i n e d by a single arbitrator

appointed for that purpose in accordance with the comercia1

Arbitration A c t (British Columbia).

TABLE 1

I COMPOSITION OF KC? INDEX (KCPI]

WEIGHTS CANSlM d

I Nole: Weights sum to one

TABLE 2 -CONSTRUCTION PRICE INDEX

HYDRO-ELECTRIC GENERATING STATfONS

s t a r i r t ~ c r C l ~ 6 e f o h r c ---------------------- ------ --- Derk l l r __--- - ------_--- ---

S L b - l r d u Labour Otiirr --------- _--_---- --------- ---------------------------------- HTDRD-ELECTRIC CEYERATlYG SIAT IDYS

Pwethwsc Excavkt ion C ~ n c r e t e In place

P r h t ion at inforc ing s t e e l irrrrkl lmtion

Lrbour Materials

Forwork E r c c t i m Labour Materials

Concrctt pKbccmnt L~bour Eqviprrnt a r d o p r a t i m

Strvctura l r r c e l In plsre Povrrhouse f inlchlrg

Labour - r t s l e r i s l r

D s w , .Percrvoirc mrd Wsteruays C l c s r i n ~

L a b u r Equipncnr m r d ope ra r i a ,

Ercsv~ri~n m r d &ntp=nt Excavation E h n k m n t

Concrete i n p l r c e Prodocr ion Pcinlorcing r t c e l i n s t a l l a t i o n

Lebour Material

For-ort e r e c t i o n Labour Hs tc r i s l

Cmcrere p l a c m n r L s bour E q u i m n t r;d operation

P l a r t r rcc l placcncnt nechanicr 1 rqviphcnt E l e c t r i r r l cquiprrnt T w r r r y cwrr;cruction c q s

Canps Buildings E q u i p n r

Dperbtion Latour f i r r t r i r l r

F o c d Othcr ma tc r i a l t

I n t c r t r t &rirp crr rscrur lor r Enp imer im rrd r d n i n i c t r a t i m

Engimcrr t t chn lca l

7tchn!cianc Drrughrrmn

Cle r i ca l S t r u t u r e s E c p i m n t

lndrx Total LCCE I n t e t c s t During Cm-urrrrcr i o n

L.C=f=r *=-.?-LC mee.CC=

L A B W R 32.301 OTHEP COSTS S 9.700 5D.000 IuTEREST 8.000 ?or41 100 .~01

1

TABLE 3 b> 9 -- h - 3

SAMPLE CALCULATION FOR KCPI

WEIGHTS CANSIM B .

No~es: Dala available on June 6. 1989 Base year: 1971=100

YEAR 1981 -- W ElG KT

JNDEX 'INDEX

303.4 7.9890 206.5 4.7150 254-5 211dZ 267.8 1.5880 293~2 .0.4052 284.5 1.5607 253.3 1.4977 299-7 1.51 61 303-4 13.7521 325.8 1 1-6022 286.5 16.2038

' 254.5 1.1723 267.8 2.3775 293.2 0.9651 319.6 6.4669 298.2 26.2236 254-3 23.8539 261.1 11.4259 226.1 0-5207 286-1 5.2284

YEAR 1987 -- WEIGHT

INDEX 'INDEX

367-1 9.6664 3928 6.4644

27714 2-2503 301.0 1.7848 347.8 0.4806 353-0 '1.9365 332.7 1.9672 374.8 1.8960 367.8 16.671 1 465.8 16.5878 392.3 22.1 876 271.4 1.2502 301.0 2-6722 347.8 1.1448 338.2 6.8433 392-9 34-5515 318-9 29-9136 342.9 15-0055 282-3 0.6502 371.4 6.7872 259.4 1-1 840

270.3 108.1 081 357.0 142-8108 236.7 23.6700 336.0 33.6000

273.9 358.3

This Agreement is made the 5th day of August, 1997, -

BETWEEN:

HER MAJESTY THE QUEEN IN RIGHT O F THE PROVINCE OF BRITISH COLUMBIA, represented by the Minister of Education, Skills and Training

("Province")

OF THE FTRST PART

AND: L..

ALCAN ALUMINIUM LIMITED

OF THE SECOND PART-

WHEREAS the Province and Alcan wish to resolve all issues arising in connection with the action commenced by AIcan against the Province in the Supreme Court of British Columbia, Vknwuver ~ e ~ i s t r y ( ~ c t i o n No. C970386).

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the premises and of the covenants and agreements hereinafter set forth (the receipt and sufficiency of which is acknowledged by each of the parlies) the parties covenant and agree that:

1. Definitions and Interpretation

1.1 Words and phrases defined in Schedule 1 and used in this Agreement have the meanings given in Schedule 1.. Words and phrases used in a Schedule and defined therein have, for the purpose of the Schedule, the meanings given therein. - 1.2 Rules of interpretation set out in Schedule 1 apply to this Agreement.

1.3 The following Schedules are attached to this Agreement:

DOCUMENT: 256231 : 13

Definitions and Interpretation Replacement Electricity Supply Agreement LTEPA Memorandum

,-

1997 Amendment Final Water Licence Amended Permit Nechako Environmental ~nhanc&ent Fund Northern Development Fund Mutual Release i This is Exhibit " " referred to in the

Affidavit of 7-mw.5 L-c Sworn before me at \ d&-k

- I -

Affidavits for British Columbia

1 .4 Schcdule I - Definitions and Interpretation, Schcdule 4 - Necllako Environmental Enhancement Fund and Schedule 5 - Northern Development Fund form pafi hereof and the

p 5 5 remaining Schedules are allached hereto for reference purposes and arc being cnfered inlo pursuant hereto. ?7 2- Power Apreements

Pursuant to and concurrently with the execution and delivery of this Agreement, the Province and Alcan are entering into the Replacement Electricity Supply Agreement to provide Alcan, on the terms and conditions therein set out, with a source of electric power to replace in part the electric power Alcan would have generated from its'Kemano Completion Project if Alcan had completed that project.

2-2 LTEPA and L TEPA Memorandum

The Province for itselc and on behalf of BC Hydro, acknowledges that BC Hydro will abide, and AJcan acknowledges that it will abide, by the LTEPA, including the LTEPA Memorandum- Pursuant to and concurrently with the execution and delivery of this Agreement, BC Hydro and Alcan are entering into the LTEPA Memorandum.

3. 1997 Amendment, Final Water Licence and Amended Permit

Pursuant to and concurrently with the execution and delivery of this Agreement, the Province and AIcan are entering into the 1997 Amendment and the Province is issuing to Alcan the Final

- Water Licence and Amended Permit

4- Nechako Environmental Enhancement Fund

The parties agree to the arrangements relating to the Nechako Environmental Enh*cernent Fund described in Schedule 4.

5. Northern deve lo~menf Fund

The parties agree to the arrangements relaL6ng it ihe Noithem De;reloprnent Fund described in Schedule 5.

6- KCP Action

6.1 The consideration given by the Province under this Agreemenf me Concurrent Agreements, the Final Water Licence and the Amended Permit is, inter alia, for the release of the claim for loss by Alcan in Action No. C970386 in accordance with this Agreement

6.2 Concurreritly with the execution ahd deIivea-y of this Agreement, the parties are executing and delivering the Mutual Release. In section I thereof, the Mutual Release contains a condition that, if fhlfilled, renders the Mutual Release void ab initio.

DOCUMENT: 256231: 13

913 6.3 The parties shall forlhwilh take appropriate steps to place rllc Aclion in abeyance. Alcan shall have the right ro continue the Action only if the Mutual Release is rcndcrcd void ab inirio in accordance with section I thereof, and, if i t is not so rendcred void ab initio, the Province shall have the right to have the Action dismissed by consent without cosls lo either parly and Alcan hereby consents to such dismissal-

6.4 The parties agree that they will co-operate with each other and take all steps that may be required to ensure that either Alcan is able to continue with the Action if it were to become entitled to do so or the Action is dismissed by consent if Alcan were not entitled to do so, as the case may be.

6.5 This Agreement provides for the settlement of the Action, but nothing in this Agreement constitutes, or may be relied upon by any party as, an admission of any liability, fact or legal principle relative to the Action on the part of the Province or of Alcan.

.* . _ 7. Further Assurances

. . 7.1 General . . .

Each party will do all things necessary, within its lawful capacity, directly and indirectly, through its subsidiaries, agents and representatives, to validate, make effective and give full force and effect to this Agreement, and to implement the transactions contemplated by this Agreement. The foregoing does not require the Province to do an*-ng that would have the effect of fettering the exercise of any statutory power.

7.2 Dispute Resolution

If at any time before January 1,2012:

a) the Province, its agents, or any person acting under the authority of the Province or its agents exercise any executive power or authority, whether or not constituting a breach under the agreements and documents described in (i) to (iv)

. - below, which abrogates in whole or in part:

(I) the 1650 Apemen& as meode&

(2) the' 1987 SettIernent Agreement;

(3) the LTEPA, or

(4) this Agreement, any of the Concurrent Agreements, the Final Water Licence or the Amended Permit,

excluding, however, for greater certainty, the exercise in good faith by the: Province, ib agents or any person acting h d e r the auhority of the Province or its agents, of any executive power or authority regarding any approval, including without limitation the granting or failure to grant any regulatory approval, licence or permil., required for the New Smelter, or

._,*

DOCUMENT. 256231: 13

b) an action or proceeding is brought by a third pariy not assisted or supporled, 911 directly or indirectly, by Alcah or is brought by a regulatory or administrative body on it own initiative that results in a court or a regulatory or administrative body making a final order, in respect of which all rights of review or appeal have been exercised or exhausted or the time permitted therefor has expired, that the

99 Province or BC Hydro as applicable, lacked the authogty to enter into or to carry out their respective obligations under this Agreement, the Concurrent Agreements, the ~ i n a l Water Licence or the Amended Permit, provided that Alcan' vigorously defends any such adtion or proceeding to the extent that it is lawfi~liy entitled to do so,

then, at the request of Alcan, AIcan and the Province shall negotiate promptly and in good faith and endeavour to agree upon actions that may lawfblly be taken by the Province, or upon adjustments (the 'Agreement Adjustments") to this Agreement, the Concurrent Agreements (other than the Mutual Release), the Final .Water Licence o r the Amended Permif or upon another basis of resolution as the parties may agree, that are necessary to restore substantially the benefits thereunder that would have accrued to Alcan if the action described in (a) above had not been taken or the order described in @) above had not been made- If the parties are unable to agree upon appropriate fawfil actions by the Province, adjustments or other resolution within 90 days after Alcan's request to do so, then the settlement of the terms and conditions of the Agreement Adjustments shall be referred to and finally resolved by arbitration administered by the British Columbia International Commercial Arbitration Centre pursuant to its Rules. I f at the time that arbitration is commenced under this section the British Columbia International Commercial Arbitration Centre or its successor, does not exisf or its Rules do not provide for an administered arbitration, then that dispute shall k referred to and fmaIIy resolved by arbitration under the Commercial Arbitration Act, as revised &om time to time- The number of arbitrators is 3 and the place of arbihation is Vancouver, British Columbia. Notwithstanding the foregoing provisions of this section 72, nothing in this section prevents or restricts in any manner whatsoever a party commencing and continuing an action or proceeding against the other party for or in respect o f any breach, o r failure to comply with, any provision of any of the agreements and documents described in subparagraphs (a)@ to (iv) above, except only that, in the case of the exercise of any power or authority described in subparagraph (a) above'that may constitute a breach of; or failure to mmply with, any agmmernt or document d e s c n i in subparagraphs (a)(i) to (iv) above, Alcan must elect either to exercise its rights under that agreement or document or to exercise its rights under this section 7.2.

8. Status of Lepal Riphts and Apreements

The Province for itself, and as to the LTEPA on behalf of BC Hydro, and Alcan confirm that the 1950 Agreement, as amended, the 1987 Settlement ~ ~ r d e m e n t and the LTEPA are in full force and effect in accordance with their respective terms and conditions.

Alcan agrees that any nghts which Alcm may have been granted pursuant to the letter of September 2, 1987 from the Honourable Jack Davis, the then Minister of Energy, Mines and Petroleum Resources, on behalf of the Province to Alcan and the letter of September 3, 1987 from Alcan to the Province in response with reference to a replacement of the rights Alcan gave up under the 1987 Amendment to use water from the Nanika River are extinguished and of no further force or effect.

9. Announcement of New Srnelter/Restart of Idle Capacitv

Upon execution and delivery of this Agreement, Alcan shall announce publicly its intention to use all reasonable efforts, subject to market and economic conditions and force majeure, to construct, itself or in association with others, the New Smelter at Kitimat, B.C., ,and its decision !

to return any idle capacitjr at its existing smelter at =timat, B.C. to full capacity on a priority basis relative to other idle aluminum-smelting capacity controlled by Alcan, and, in any event, ,

not later than January 1, 1998.

10. General

i0.1 Governina Laws

This Agreement will be governed by and construed in accordance with the applicable laws of Canada and of the Province of British Columbia

,: 10-2 Entire Ameemenr

This Agreement, the Concurrent Agreements, the Final Water Licence and the Amended Permit are the entire agreement between the parties relative to the subject matter hereof.

10-3 Continuation ofAmeement

Except as herein provided, this Agreement will continue in full force aiid effect for the duration of the Final Water Licence, and of all further Licences, permits ind authorities issued or granted to Alcan or its successors or pemittd assigns.

10.4 Amendment

This Agreement may be amended only by an instrument in writing signed by the parties or their successors or permitted assigns.

10.5 Notices

All notices, requests and other communications required or permitted to be given under this Agreement must be in writing and delivered by hand as follows:

To Alcan:

Alcan Aluminium Limited 1 188 Shehrooke Street West Montreal, Quebec, H3A 3G2 Attention: Chief Legal Officer

To the Province:

Deputy Attorney General 1001 Douglas Street Victoria, British Columbia V8V 1x4

o r to such other address as may be given by notice as aforesaid by the particular party, and will be deemed to have been given on the date of delivery.

1 0.6 Non- Waiver

N o waiver of any provision of this Agreement is enforceable unless in writing and no s--.h waiver wiIl be deemed to, or will, constitute a waiver of any other provision of this Agreement, nor will any such waiver constitute a continu'ing waiver, unless otherwise expressly provided therein.

1 0.7 Jurisdiction

Subject to section 7.2 hereof, the courts of the Province of British Columbia, and courts to which appeals therefrom may be taken, have exclusive jurisdiction in respect o f any action, suit or proceeding arising out of or relating to this Agreemenf and the parties irrevocably and unconditionally attorn to the jurisdiction of those courts in respect of any such action, suit or proceeding. The foregoing does not affect any agreement to arbitrate contained in any Concurrent Agreement

If z y part of this Agrezment is declared o r held invalid for any reason, that invalid$ dm not affect the validity of the remainder which continues in full force and effect and must be construed as if this Agreement had been executed without the invalid portion and it is hereby decIared the intention of the parties that this Agreement would have been executed without reference to any portion which pay, for any reason, be hereafter declared or held invalid.

10.9 Cunencv

All amounts of money stated herein are expressed in Canadian dollars unless otherwise stated.

10.10 Time

Time is of the essence of this Agreement

, -

DOCUMENT: 25623 1 - 1 3

This Agreement is bind in^ upon and enures to the benefit of the Province and, its permitted 1 Ud-

assiPs-md is binding upon a d enures to the benefit of Alcan and its successors and permitted assigns. This Agreement may not be =signed by either party without the prior written consent of the other party, which consent may be arbitrarily withheld. The foregoing does not apply to the assignrnenl of any Concurrent Agreement ~ermitted in accordance with its terms. -

IN WITNESS WHEREOF this Agreement has been executed and delivered by the parties on the day and year first above written.

HER MAJESTY TKE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA, as represented by the Premier of British Columbia and by the Minister of Education, SkiIls and ~rainin'g

Premier of British Columbia

Per:

and Minister responsible for the Industrial Development Act

, Per:

Bougie, Presi ent and Chief ecutive Officer 4'

Address

DOCUMENT: 256231. 13

SCHEDULE I Q f " L .& .-/

DEFINITIONS AND ImRPRETATION

I . Definitions

"1950 Agrcemwt"means the agreement made Decemk 29, 1950 between the Province and Akan and includes.-

(a) Conditional Water Limce No. I 9847 issued Dccunba 29, 1950 as amcndcd by Amended Conditional Water Liccnce No- 19847 issued Ikcmbcr 29, 1987;

(b) Permit Authorizing the Occupation of Crown Land No. 3449 issued December 29, - 1950 as amended by Amended Permit Autborizbg the Occupation of Crown Land No. 3449 irmed December 29,1987; and

(c) any plans, dscrfptions and ofhcr dcw;umslts that., under tRc tcnns of thc agrcscmcnt as amended, are made part of it;

u1950 Agreement, as amended" means the 1950 Agreunent as amended by the 1987 Amendment and the 1997 Amendment;

"1987 Amendment" means tbe agreement authorized by Order in Council 2572/87 and made Decemh 29,1987 between the Province and Mcan;

"1987 Settlement Agreementm means the agnxmmt cntacd into betwccn Alcan, Her Majesty the Queen in Right of Canadq and thc Province, &tcd S~tembcr 14, 1987;

"1997 Amendmentn means the agreement autboxid by Onda in Coimtil 0977 and made Aagust 5, 1997 between. the Province and Alcan amending the 1950

. Agreanent, as mended by the 1987 Amendment, a copy of which is a&b&ed as Schedule 3A;

uAction" mans the action wmmced by h against the Prwim;e in the Suprunc Court of British Columbia, Vancouver R e g h y (Action No- C970386);

uAlcan'' means Alcan Aluminium Limited, a Canadian corporation (forrneriy named uAluminum Company of Canada, Limited"), and includes the swnssofs and pamitied -gm of Alcan Aluminium Limited and any person claiming through it or any of hem;

"Amended Pcrmit" means the Amended P d isued to Alcan purmant to the 1950 Agraplcn4 as amended, a copy of which is attached as Schedule 3C;

"BC Hydro" means British Columbia Hydro and Power Aulharitr,

"Concnrrcnl Agreemenism mcms the Regkement Electricity Strpply Agreemen4 the 1997 Amendment, the LITPA Memorandum, and the Mutual Release; 916

"Final Water Licence" mcans tbc Final Wata Licence issued pursuant to the 1950 Agreuncnt, as amended, a mpy ~f which is attached as Scbedulc 3B;

"Kemano Completion Project" means the Works and proposed Works comprised in the - hydroelectric project with that name, including .

(a) tbc plans, descriptions and other documents perlaining to components of that hydroelectric projed that arc filed with the Province by or on behalf of Alcan; and

(b) the Works and pmposed Works comprised in the Kenney Dam Release Facility (as defined in the 1987 S d a n m t Ag~eement);

LZTEPA" means the Long Term Electricity Purchase Agreanent between Alcan and BC - Hydro dated February 27,1990;

=LTEPA Memorandum" me;ms the memorandum o f wen date herewith e n t d into between BC Hydro and Akan under the LTEPA and pursuant to section 22 of this A g m e n t , a copy of which is attached as Schedule 233;

"Mutual Release" means thc mutual rclcasc of cven date herewith, a copy of which is attached as Schedule 6;

"Nechako River" means the Necbako =ver in British Columbia and includes all streams and lakes tributary thereto;

"New Smelter" means a ncw aJuminium smelting facility of approximately P5,000 tonndannum to be a n n o d by Alcan pursuant to section 9 of the Agreement and as further defined in the Replacanent Electricity Supply Agreanent;

_..5._---- "Replacement Electricity Supply Agrctmc~t" mcans tbc a-cnt of cvm date

herewith entered into beiwaar the Province aod &can pursuant to scction 2 1 of this A~crnent , a copy ofwhich is attachcd as Schedule 2A;

"~chedn1e" means a schcddc to his Agrcanent;

=Water Release Facility" meam a wat& rdease faciIity at or near the Kermey Dam that rnay be proposed for devclopment pursuant to Schedule 4.

Grammatical variations of any defined terms have similar rncanings; words importing the singular nurnba include the plural and vice versa where the context requires; the division of this Agreement into separalc sations, subsections and Schedules, and the insertion of headings, are for wnvenicncc of reference only and do not affect che interpretation of this Agreement. Refcrcncs lo a-sation within the agrmnent, or within a Schedule, mean a section of the agreement or thc Schedule, as thc casc rnay be, unless otherwise indicated.

DOCUMENT: 2SGU 1 . 13

I

SCHEDULE 2A

[Reference Section 2-11

REPLACEMENT ELECI'RICITY SUPPLY AGREEMENT

This Agreement made the 5th day of August, 1997,

BETWEEN:

HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA represented by the Minister of Education, Skills and Training

("Province")

OF'THE FIRST PART AND:

ALCAN ALUMINIUM LIMITED

("Alcan")

OF THE SECOND PART

WEREAS the parties are entering into this Agreement pursuant to the provisions of section 2 1 of the BUALCAN 1997 AGREEMENT;

NOW THEREFORE THIS AGREEMENT WTlNESSES THAT in consideration o f the premises and for other good and valuable consideration, ?he receipt and sufficiency of which is acknowledged by each of the parties, the parties agree thats

DEFINITIONS AND INTERPRETATION I - 4

1.1 Definitions Words and phrases defined in this section 1.1 and used in this Agreement ]have the meanings given in t h i s section 9.1,

(a) uAdapted Termsn means, with respect to each Eligible Sale, the price payable during the Substitution Period for electricity thereunder and all other terms and conditions appIicabIe thereto during that period, adapted in accordance with section 72.2(6), so that such price, terms and conditions, when applied hereunder during4he Substitution Period, are no more nor less favourable to the economic interests of the Province and BC Hydro than the price, terms and conditions of the Eligible Sale, provided however that in no event may any Adapted Terms extend the Supply Period beyond the date stated Fierein;

(b) "Alcan" means Alcan Aluminium Limited, a Canadian corporation (formerly named 'Aluminum Company of Canada, Limited"), and includes the successors and, if this Agreement is assigned, its Permitted Assign;

- I - - Documcnl: 253290: 18

3:s (c) "Mcan's System" means the electrical generation and transmission system

owned and operated by Ncan in British Columbia, and includes all modifications thereto and repairs and replacements thereof;

(d) "Applicable Factor" means, in each Year, -155, less, in the years 2003 to 2008 inclusive, the following:

(e) uA~MW" means average annual megawatts of energy;

(f) "Bank" means Royal Bank of Canada;

(g) "Base Electricity" means up to I I5 AvMW of elec?ricity delivered to Alcan by the Province under this Agreement;

(h) "Base Electricity Price" means the price payable for Base Electricity delivered hereunder, determined under section 7.21 or section 72.2, as applicable;

(i) "BUAlcan 1997 Agreementn means the agreement made the 5th day of August, 1997 between the Province and Alcan;

6) "BC Hydro" means British Columbia Hydro and Power Authority and its successors;

(k) "BC Hydro's Systemn means the eIectrical generation, transmission and distribution system owned and o@ed by BC Hydro iu British Columbia, and includes all modifications thereto and repairs and replacements thereof;

(l] "Basirness Day" means any day other than Saturday, Sunday or a &y that is recognized in British Columbia as a national or provincial holiday;

(m) "Designated Scheduling Representativesn means the person or persons designated under section 4.2;

(n) "Eligible Sale" means a sale of electricity meeting all the foIlowing conditions:

(i) the vendor of the electricity is the Province or any of its agents;

(ii) thc electricity is being sold to the owner or operator of a primary aluminum smelter operating in British Columbia for the purpose only of operating that smelter and related Facilities; and -

Q * . (iii) the sale is made under-an agreement with a term exceeding 10 years,

C, & . inclusive of all renewals exercisable at the option of the purchaser, and involving the delivery and purchase of more than 50 XvMW;

(0) YE~pert" means a person appointed in accordance with section 7.2.2(d) to determine Adapted Terms;

(p) "Force Majeuren means (i) acts of God, including without limitation earthquake, landslide, windstom, ice storm, lightning, volcanic eruption; (ii) interruptions of generation or transmission service; (iii) strikes, shutdowns in anticipation o f strikes, lock-outs and other labour disturbances; (iv) acts or omissions of a government or an agency or authority of government; (v) accidents, equipment breakdown, electrical disturbances and imbalances; (vi) riots, acts of sabotage, blockades, civil disobedience, fire, flood, wars, delays or interruptions in transportation; (vii) Forced Outage; (viii) &y court injunctiqn or order, or any other cause not reasonably anticipated or not within the control of the party claiming force majeure (including, in the case of force majeure claimed by the Province, a force rnajeure affecting BC Hydro), whether of the nature or subject matter herein enumerated or not, but excluding:

(ix) economic hardship or lack of financial means; and

(x) in the case of force majeure claiked by the Province or BC Hydro:

(A) acts o r omissions of the government of British Columbia or an agency o r authority thereofL, and

(El) a Single Contingency Outage.

(q) "Forced Outagen means the occurrence of component failure or similar condition which requires that a generating unit or other equivalent component, or both, be removed from service, but does not include a Single Contingency Outage;

(r) "Kemano Generating Stationn means the hydroelectric gmerating station of AEcm at #mano, British Columbia., and includes all modifications thereto and repairs and replacements thereof and all additional generating facilities made or constructed fiom time to time for the purpose of generating electricity using water held under Final Water Licence No. 102324, any amendmerit thereof or any licence issued in substitution or replacement thereofi-

(s) "Kitimat Substation" means the electrical substation of Alcan at its smelter at . Kitimat, British Columbia;

(t) "LME Pricen means, for each Month, the Canadian dollar equivalent, determined in accordance with section 7.2.3, of the average for the Month of the "official" 3 months' price per tonne for alurninurn, 99.7% purity, announced daily by the London Metals Exchange ("LME") and expressed in US . dollars, as set by the quotation committee o f the LME after the end of the second session of the Ring trading md published as bid and offer prices, provided that for tlre purpose of this

- 3 - Document: 262068: 0 1

Agreement the mid-point of -the daily bid and offer prices will be taken, and provided also that if for any reason the foregoing ceases to be determinable, the Canadian dollar equivalent of the published price for aluminum that, of all published prices then available. most closely reflects the equivalent of 'the foregoing, as determined by written agreement between the parties, or failing agreement by arbitration hereunder, will be used as "LME Price". For greater certainty the parties achowledge that the price per tome for aluminum described above is currently that price published on the Reuten Network under Reuters page reference MTLE in the London Financial Times against the Iine title "AM OfficiaI" on its commodities page report on prices;

(u) "Month* means a caIendar month;

(v) "MW" means megawatt;

(w) "MWhn means megawatt hour;

(x) "hlWhltn means megawatt hour per tonne;

"Nechako RiveP means the Nechako River in British Columbia and includes all streams and lakes tributaxy thereto;

(2) "New Smelter" means a new alunriaum smelting facility having a designed annual production capacity .of approximately 225,000 tomes owned andlor opemted by AIcan alone o r with others and located in Kitimat, British Columbia, and includes all modifications thereto and repairs and replacements thereof;

(aa) "Permitted Assignn means a person to whom this Agreement is assigned as permitted under section 12.4;

@b) "Point of Delivery" means the point where BC Hydro's 287 KV tnnsmksion line deadads on Alcan's 287 KV switching station structure immediately east of the road to the existing Kitimat smelter and south of Anderson Creek or such other point of deiivery as may be designated by written a-ereement between the parties;

(cc) "Powerexn means British Columbia Power Exchange Corporation and ik successors;

(dd) "Prime Rate" means the prime rate of interest announced h r n time to time by the Bank as a reference rate used by it for the purpose of determining rates of interest charged by it to commercial borrowers for Canadian dollar loans;

(ee) "Province* means Her Majesty the Queen in Right of the Province of British Columbia or, if this Agreement is assigned, its Permitted Assign;

(ff) "Prudent Utility Practicesn means any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or my of the practices, methods 2nd acts which in

13 3 1 the exercise of reasonable judgment in light of the facts known at the time the c -.A

decision was made, could have been expected to accomplish the desired result at a reasonabIe cost consistent with good business practices. reliability, safety and expedition. Prudent Utility Practices are not .intended to be limited to the optimum practices, methods, or acts to the exclusion of all others, but rather to be acceptable practices, methods, or act . generally accepted in the Western Systems Coordinating Council region-

(gg) "Replacement Electricity" means Base Electricity and Supplementary Electricity as required for the operations of the Smelting Facilities after utilization of all electricity generated by the Kemano Generating Station after allowance for station service, Kemano township service and transmission losses;

(hh) "Single Contingency Outagen means an outage, exceeding one hour in duration, of BC Hydro's System that has the effect of preventing, hindering or delaying the Province in delivering o r providing Replacement Electricity in accordance with this Agreement and that would not have had that effect i f BC Hydro's supply to Alcan were designed and constructed to a double contingency standard according to Prudent Utility Practices, but for greater certainty excludes an outage causeci by Alcan or by the manner in which Alcan's System is operated and maintained that would have caused the outage even if BC Hydro's supply to Alcan had been designed and conshucted to a double contingency - standard-

(ii) "Smelting Faciiitiesn means the existing aluminum melting facilities at Kitirnak B.C., and includes all modifications thereto and repairs and replacements thereof, and when constn~cteci, the New Smelter;

G) "Start-Up of the New Smel teP means the date of initial operation of the New Smelter at a load level which requires delivery hereunder of all or part of the Base Electricity to the Smelting Facilities in addition to utilization of a11 electricity generated at the Kernano Generating Station;

(kk) "Substitution Period" means the period commencing on the later of:

(0 the date of comaencement of delivery of electricity Plnder the Eligible Sale, or

the Supply Commencement Date,

until the earlier oE

, (iii) termination of the Eligible Sale; or

(iv) the date when Alcan has again exercised its right in respect of a subsequent Eligible Sale and the Substitution Period applicable thereto has commenced; or

(v) the expiration of the Supply Period;

i- <?

(11) "Supplementary Electricityn means electricity supplied as pan of the firrmng La - services provided by the Province through BC Hydm, as agent for [he Province, to Alcan, which is designed to increase Alcan's firm energy at Kitimat by 60 AvMW;

(mm) "Supplementary Electricity Price" means the price payable by AIcan to the Province for Supplementary Electricity pursuant to section 7.3;

(nn) "Supply Commencement Daten means a date specified by Alcan under section 5, but to be not earlier than January 1,2003-

(00) "Supply Period" means the p - o d fiom and including the Supply '' Commencement Date to and including the earlier of (i) December 31, 2023 and

(ii) the date when this Agreement is taminated;

(pp) "System" shall include all water storage, hydraulic, electrical generation, transmission and distribution facilities comprising either Alcan's System or BC Hydro's System, as the context requires, and "Systems" means both Alcan's System and BC Hydro's System;

(qq) "tn or " tonnen means a metric tonne; . .

(IT) uYear" means a calendar year. - 1 -2 Internretation, Grammatical variations of any defined terms have similar meaning; words importing the singular number include the plural and vice versa where the

- context requires; the division of this Agreement into separate sections, and subsections, and the insertion of headings, are for convenience of ref- onIy and do not affect the interpretation of this Agreement Words and phrases having well b o w n trade or technical meanings will be given those meanings, unless othemise defined herein.

2- GENERAL OBLIGATIONS

2.1 Suvvlv. Subject to the terms and conditions of this Agreement, the Province shall s~rpply Rqlaccment Elzciiicity, ~ ~ h i c h the Pm+kice assrkr Ncaii as bekg wntinuous!y available to Alcan to meet its load requirements for the Smelting Facilities, after giving effect to the provisions of section 2-6. The Province is not obliged to supply Replacement Electricity until Start-Up of the New Smelta occurs. The Province cod ims its appointment of BC Hydro as agent of the Province for the purpose of administering the performance of this Agreement by the Province. The Province may change its agent for this purpose with Alcan's written approval, mch approval not to be withheld or delayed unreasonably.

22 Specification. Replacement Electricity shall be in the form of 3 phase alternating current at a nominal frequency of 60 Hertz and at a nominal voltage of 287 kV. The voltage variation at the Point of Delivery shall be not more than 10% h m the nominal voltage, except during contingency or emergency conditions.

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2 -3 Protective and Control Equipment Alcan shall install, repair and maintain, at its cost, on the Alcan System protective and control equipment required in the reasonable opinion of BC Hydro and in accordance with Prudent Utility Practices.

2.4 Point of Deliverv. Subject to this Agreement, the Province shall make the Replacement Electricity available to Alcan at the Point of Delivery. :

2-5 - Title and Risk. Title to and risk of loss in respect of the Replacement Electricity shall pass &om the Province to Alcan at the Point of Delivery.

2.6 Use of Replacement Electricity. Alcan agrees that throughout the Supply Period:

(a) AIcan shall use all electricity generated at the Kemano Generating Station to meet the requirements of the Smelting Facilities prior to using any Base Electricity;

(b) AIcan shall use the h l l amount of the Base Electricity to meet the requirements of the Smelting FaciIities before using any of the Supplementary Electricity,

(c) Alcan shall use the full amount of the Base Elechicity to meet the requirements of the Smelting Facilities before using electricity obtained fiom any third party; and

(d) Ncan shall use the Replacement EIectsicity only to meet the requirements of the Smelting Facilities, and AIcan shall not sell. exchange or otherwise market any of the Replacement Electricity, without the prior written consent of the Province, which consent may be withheld arbitrarily and in the sole discretion of the Province.

2-7 Other Ameements. Alcan wanants that fiom and after the Supply Commencement Date it will not be bound by any agreement or commitment for the delivery of electricity generated at the Kemano Generating Station to any other person during the Supply Period that contravenes Alcan's obligations under section 2-6.

3. BASE ELECTRICITY

Subject to the terms of this Agreement, commencing on the Supply Commencement Date, and thereafter during the Supply Period, the Province shall make available for sale and delivery to Alcan, and, as Alcan requires, shall sell and deliver in accordance with Prudent Utility Practices, and Alcan shall p w b accept delivery of and pay. for, the Base Electricity at delivery rates not exceeding 115 h W and in consideratio" of payment of the amount determined under section 72. Nothing in this Agreement obliges Alcan to purchase, accept delivery of or pay for all or any part of the Base Electricity not taken by Alcan.

FIRMING SERVICES

4.1 Provision of Supplementaw Electricity. Subject to the terms of this peemen4 commencing on the Supply Commencement Date, and thereafter during the Supply

a :nod, the Province will provide Alcan with the Supplementary EIecmcity to firm up Alcan's

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I la- c$ 0 ;.! 4 . * .-

electric energy in accordance with the terms of this section 4 and in consideration of payment of the amount determined under section 7.3.

4.2 Generation Schedules Alcan shall deliver to BC Hydro a weekly schedule showing its anticipated generation at the Kemano Generating Station and its consequent requirements for Supplementary Electricity hereunder. in each case for the following week. Each party shall designate and id&tifjr to the other party a person or persons responsible for the deIivery and receipt of scheduling information-

4.3 Optimization. The Designated Scheduling - Representatives shall exchange scheduling information for the purpose of optimizing the combined generation output of the Systems in accordance with terms set out in this section 4 and Prudent Utility Practices.

4.4 Limited Authorihr. The Designated Scheduling Representatives have no authority to amend this Agreement or to determine any matter which affects the ownership of either of the Systems or the right of Alcan and BC Hydro at all times to Aave actual physical control and independent possession of their respective Systems.

4.5 Svstem Title/RisWRes~onsibiliiv. Each party continues to have titlc to, and risk and responsibility for, its own System, and the other party assumes no proprietary interest in, or risk or responsibility whatsoever for, the other party's System-

Province's Obligations for Supplementarv electric it^. The Province shall provide electicity to Alcan, at times, rates and in amounts as agreed by the parties, except that:

(a) during any hour the Province is not obligated to deliver any more than 60 MW; and

@) during the course of any Year the Province is not obligated. to provide more than 60 AvMW, less the amount of elecbicity generated at the Kemano Generating Station in accordance with section 4.7 that is in excess of 780 AvMW, or such other value as is agreed between the parties as representative of the firm capabiiity of the Kemano Generating Station-

4.7 Alcao Oblieah'ons, Alcan shall:

(a) make all reasonable efforts to adjust the timing of its generation, and to adjust its maintenance schedules, in response to requests from BC Hydro and to operate Alcan's System in a manner that permits optimization of the combined generating output of the Systems, all subject to requirements for public safety, flood control and fisheries protection, and to the provisions of Alcan's applicable licences and permits; and

(b) make ail reasonable efforts to maintain and repair Alcan's System in accordance with Prudent Utility Practices.

Document: 262068: 0 1

5. NOTICE OF COMMENCEMENT

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/I 3 5.1 Notice of S u ~ p l u Commencement Alcan may give the Province not later than January 1, 2007 notice specifying a Supply Commencement Date that is not earlier than January 1, 2003 and not later than January 1, 2010. Alcan may give the Province M e r notice at any time or &om time to time thereafter specifLing a change in the SuppIy Commencement Date to a date that is not more than !20 days earIier or later than the date first specified by Ncan pursuant to this section 5.1, If Alcan gives notice specifying a Supply Commencement Date and commences construction of the New Smelter and Start-Up of the New Smelter is delayed due solely to Force Majeure, of which Alcan gives prompt notice to the Province, then the Supply Commencement Date will be deferred to the extent of that delay.

5.2 Confirmation. Alcan shall confim~ the Supply Commencement Date by not less than 30 days' prior notice to the Province, and such notice shall include Alcan's estimate of its scheduling requirements during initial operation of the New Smelter.

5-3 Early Termination. This Agreement terminates with effect from January 1,20 1 0 1L2less:

(a) Start-Up of the New Smelter and the Supply Commencement Date occurs on or before January 1,201 0; or

(b) Alcan has cornrnenc~'construciion ofthe New Smelter on or before Janllary 1, 2007 and thereafter Start-Up of the New Smelter is delayed solely due to Force Majeure.

5.4 New Smelter Approval. If Alcan makes submissions to governmental authorities of the Province necessary to commence the process for approvals required for the New Smelter on or before December 31, 1998, and despite AIcan's best efforts to comply with all requirements for such approvals, the approvals are delayed beyond December 31, 2000, the Province agrees that it will review with Alcan the Replacement EIectricity schedule to identify - revisions that may be appropriate to accommodate that delay and both parties agree to negotiate in good faith such revisions.

6.1 Meterine. The Replacement Electricity delivered hereunder shall be determined and recorded for the purpose of this Agreement by meters and metering apparatus installed by BC Hydro,at a point of metering as determined by BC Hydro. Ncan shall provide BC Hydro with reasonable access to its premises, at BC Hydro's own risk and expense, for the installation and maintenance of the BC Hydro meters and metering apparatus. All amounts of electricity generated at and flowing out of the Kemano Generating Station shall be determind-and recorded for the purpose of this Agreement by meters and metering apparatus at the points of metering located a t the Kemano Generation Station All amounts of electricity flowing into and out o f the %timat Substation shall be determined and recorded for the purpose of this Agreement by meters and metering apparatus at the points of metering at that substation Measurement, directly or ndirectly, of the kiIovolt-amperes, kiIowatt hours, or other factors or quantities at the meters

- supplied by each of the parties shall be the responsibility of the parties supplying those meters.

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p:5 6.2 Meterine Standards. The Eie6city and Gas Impec!ion Act (Canada), as revised from time to time and the regulations made thereunder shall govern the metering camed out under this Agreement. The parties acknowledge that Alcan and BC Hydro may test, calibrate, remove and change their respective metering equipment at any reasonable time. Each party shall be entitled to have a representative present at any test or caribration by the other party.

6.3 Meter Failure. If the metering equipment supplied by either of the parties fails to register -correctly o r for any reason meter readings are unobtainable, the amount o f electricity shall be estimated by the party responsible for such equipment from the best information available and such estimate, except in the case of manifest error, shall for billing purposes have the same force and effect as an exact meter reading. Each of the parties will cooperale with the . other in providing access to their meters and metering apparatus for the purpose of periodic testing of accuracy and reliability.

7- PFUCE

7.1 Prices- The Base Electricity Price and Supplementary Electricity Pnce shall be determined, and the amount payable shall be calculated, in accordance with the provisions of this section 7.

7.2 Base ElectricitV Price

7-2- 1 LME Based Price- Subject to section 7.2-2, the Base Electricity Price is calculated as:

LME Pnce multiplied by the Applicable Factor 1 4 - 4 5 W t

Alcan shall pay the Province for Base Electricity delivered in each Month d ~ g the Supply Period an amount equal to the Base Electricity Price multiplied by the mount of Base Electricity taken by AIcan, expressed in MWh.

7-2.2 Most Favoured Nation Provision.

(a] If at any time after tEie date ofthis Agreement and before expixy of the Supply Period, an Eligible Sale is entered into, the Province shall give prompt notice to Alcan setting out the terms thereof.

@) Within 60 days after delivery of a notice under subparagraph (a) above, Alcan may give notice to the Province that Alcan wishes to take delivery of electricity under this Agreement on Adapted Terins, and setting out Alcan's proposed Adapted Terms.

(c) Within 60 days after receipt by the Province of notice under subparagraph (b), the Province shall give notice to Alcan of the Province's proposed Adapted Terms, if and to the extent different &om those proposed by Alcan.

(d) The parties shall negotiate promptly, reasonably and in good faith and endeavour to agree upc Adapted Temrs and io record them in writing in an agreement

between the parties and those Adjusted Terms shall apply to the delivery and provision of electricity under h i s Agreement for the duration of the Substitution Period. If the parties are unable to agree upon Adapted Terms within 60 days aEter notice is given by the Province to Alcan under subparagraph (c) above, all unresolved Adapted Terms .will be determined by a person (the "Expertn) appointed by written agreement between the parties, or if the parties do not so agree within 15 days after notice by one party to fie other party requesting such appointment and nominating a person for that purpose, then the Expert will be appoidted by a judge of the Supreme Court of British Columbia upon application of either party pursuant to the Commercial Arbitration Acr, as revised fiorn tirne to time.

(e) In deterkinkg Adapted Terms, the Expert

(i) shall establish procedures that the Expert considers necessary;

(ii) shall afford each party equal treatment and opportunity in the presentation of its position on matters to be resolved; and

(iii) shall make his or her determination at Vancouver British Columbia

(f) The parties shall: - (3 comply with the procedures esbbiished by the Expert; and

(ii) bear in equal proportions the fees a d expenses of the Expert and otherviise bear their own expenses incurred in relation to the establishment of the Adapted Terms-

(g) A determination of Adapted Terms by the Expert is binding on the parties, except as otherwise provided in subparagraph (i) below.

(h) For greater certainty the parties acknowledge and agree that any Adapted Tenns will include, for the benefit of Alcan, the u x m d k d value o f the discounts a-bed In &:OD l. l(d);

(i) Within 30 days after the Expert has determined Adapted Terms. and communicated that determination in writing to both parties, Alcan, by written notice to the Province, may eIect to revoke its notice under subparagraph (b) above, and failing delivery *thin that 30 day period of a notice of revocation, the Adapted Terms detennintd by the Expert shall apply to the delivery and provision of electricity under this Agreement for the duration of the Substitution P e r i d If

- notice of revocation is given as aforesaid, those Adapted Terms will not apply and this Agreement shall continue in full force and effect in accordance with the terms and conditions herein contained-

6) If Adapted Terms are not agreed or established in accordance with this Section 7-2.2 before the cornmencement of the Substitution Period, the parties shall continue to perform their respective obligations under this Agreement in

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accordance with the terms and conditions herein set out until the Adapted Terns are so agreed or established. whereupon the Adapted Terns will be applied 1 [ b retroactively to the beginning of the Substitution Period and the parties shall make whatever adjustments are necessary between them to 5 v e effqt thereto. Any such adjustments shall be included in and form part of the Adapted Terms.

(k) Upon expiry of the Substitution Period, and provided the Supply Penod is continuing, the parties shall continue to perform their obligations under this Agreement in accordance with the terms and conditions herein set out

7.2.3 Currenm Exchanee. For the purpose of determining the LME Price, a daily quoted price expressed in U S . dollars wilt be converted to Canadian dollars at the rate of exchange quoted by the Bank for same the day as the day for which the price is quoted, or if that day is not a Business Day, then for the next following Business Day.

Alcan shall pay the Province for Supplementq Electricity during the SuppIy Feriod the sum of CA? '375,000 per Month-

8. BILLING AND PAYMENT

8.1 Pavment Terms As soon as practicable following the last day of each Month, the Province shaIl send A l a n an invoice setting out the amount payable to the Province by Alcan for Replacement Electricity under this Agreement during the immediately preceding Month. On

- .- or before the 20th day of the next following Month (or if that day is not a Business Day, then on the Business Day next following that day), Alcan shall pay the Province the amount set out in such invoice- Payment shall be made in N 1 without set-off or withholding, except as expressly provided in this Agreement or agreed In writing between the parties.

8.2 Disputed Invoices If Alcan disputes all or any part of an invoice, Alcan shall .

pay the entire'invoice in full on the payment date specified in section 8-1, together with notice of dispute, including reasonable particulars. If' it is d e t e e d subseqbently by agreement or arbitration hereunder that ali or part of the invoice was not then due, the Province shall pay Alcan interest thereon at 2 hate per m u m equal to the Prime Rate plus 2%, calcuiated daily and compounded monthly, from the date of payment to the date on which payment was properly due or the date on which any overpayment is repaid to &an, whichever is earlier.

8 -3 Place of Pav men t All payments by AIcan for Replacement Electricity shall be made in Canadian dollars at par to an oGce or banker of the Province, as the Province may direct, at Vancouver, British Columbia;

8.4 Late Payment If any payment required to be made by Alcan hereunder is not paid when due, Alcan shaII pay to the Province interest thereon at a rate per annum equal to the Prime Rate pIus 2%, calculated daily and compounded monthly, fiom the due date of payment until payment is made.

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8-5 Taxes The Base Elecmcity Price and h e Supplementary Electricity Price are expressed herein exclusive of all applicable federal and provincial sales and excise taxes, and Alcan shall pay all such taxes in accordance with applicable law 6-om time to time.

9. FORCE iMAJEURE

9.1 Performance Excused- If either party is prevented hindered or delayed in performing any obligation under this Agreement by the occurrence of an event of Force Majeure, performance by that party of such obiigation shall be excused to the extent that it is so prevented, hindered or delayed until such cause has been removed or overcome.

9 -2 Notice. A party excused under this section 9 h r n performance of any obligation, o r reasonably anticipating that it will be so excused, shall give notice to that effect promptly to the other party-

9-3 Mitipation. A party prevented, hindered or delayed shall make reasonable ef f~r ts to remove or overcome the cause of the prevention, hindrance or delay as soon as is practicable- Nothing contained in this Agreement requires a party to settle any strike, lock-out or labour dispute in which it may be involved or to accept any permif licence, contract or authori~t ion necessary for the performance of this Agreement containing terms and conditions which a party determines, in its good faith and judgement, are unacceptable to i t

LIABILITY

-0.1 Alcan Default If Alcan fails to pay an amount awarded to the Province by way /fa final and binding award in an arbitration hereunder, or by way of a final judgement of a

- court of competent jurisdiction, in either case in respect of which a11 rights of appeal have been exercised and exhausted or the time for doing so has expired, and that failure continues for a period o f not less than 90 days after written notice thereof is given by the Province to Alcan, then the Province, without prejudice to, or restricting the exercise of, any other right or remedy available to the Province in respect of that failure, at any time t h d e r for so long as the failure continues, may, on not less than 5 days prior written notice, suspend the delivery and provision of Replacement Electricity hereunder, or, whether or not it has first so s&pended such delivery and provision o f Replacement Electricity, terminate this Agreement by written notice to Alcan-

10.2 Province Default If the Province fails to deiiver and provide Replacement Electricity in breach of this Agreement, then except to the extent caused or contributed to by Alcan's failure to exercise dl reasonable measures to mitigate its loss and damage, Alcan may recover from the Province the following loss and damage suffered or incurred by Alcan as a result o f that breach:

(a) damage to, or loss or destruction of, tangible property forming part of the Smelting Facilities;

(b) the incremental cost to Alcan of obtaining electricity to replace the Replacement Electricity that the Province fails to deliver or provide hereunder, and

(c) the actual cost to Alcan of lost production at the Smelting Facilities less the avoided costs of production thereof.

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i-! 3 Alcan will give the Province access to, and a reasonable opportunity to audit Alcan's records of t- a-

the foregoing loss and damage.

10.3 lndernnification for Third Partv Claims. Each parry (in this section 10.3 called the "inde-tor") shall indemnify and hold harmless rhe orher party, its employees and agents (in this section 10.3 called collectively the "indemnitee") for all clairns,,demands, actions. causes of action, suits, and proceeding brought against the indemni-tcc by any third person Tor darnages for personal injury or property damage caused by the negligent act or omission of, or breach of this agreement by, the indernnitor, its employees or agents while in, on or about the premises of the indenmitee under or in relation to this Agreement

10.4 Consequential Damapes Excluded. Except only as provided in section 10-2 but otherwise notwithstanding any other provision of &s Agreement, neither party is liable to the other party, in contract, tort (including but not limited to negligence) or under any other theory of law, under or in relation to this Agreement for any loss of production, reveque, profit, market or opportunity, or special, punitive, incidental, indirect or consequential damage sufiered or incurred by the other party.

10.5 Remedies Exclusive. Except as otherwise herein provided expressly, for any breach or default hereunder for which an express remedy or measure of damages is provided herein, that express remedy or measure of damages is the sole and exclusive remedy or measure of damages applicable to that breach or default, and all other remedies or damages at law or in equity are waived expressly by each party in respect ofthat breach or default

11- DISPUTE RESOLUTION

11.1 Arbitration. Subject to section 11.3, all disputes arising out of or in connection solely with this Agreement shall be referred to and finally resolved by arbitration administered by the British Columbia International Commercial Arbitration Centre pursuant to its Rules. The number of arbitrators is three. The place of arbitration is Vancouver, British Columbia.

11.2 Alternative Ad Hoe Arbitration. If at the time a dispute arises, the ~ r i & s h CoIumbia International Commercial Arbitration Centre or a successor, does not exist, or its Rules do not provide for an administered arbitration, then that dispute will be referred to and finally resolved by arbitration wder the Commercial Arbitration Act, as revised from time to time. The number of arbitrators is three and the place of arbitration is Vancouver, British Columbia

11.3 InterimlConservator~ Relief- The agreement of the parties to arbitrate disputes does not prevent a party, pending an arbitral award on the merits of the dispute, from recourse to any court of competent jurisdiction for the purpose only of obtaining interim and conservatory relief or enforcing any arbi tral award.

12. GENERAL

12.1 Notices. All notices, requests and other ~ o r n r n ~ c a t i o n s required or permitted to be given under this Agreement must be in writing and delivered by hand as follows:

To Alcan:

AIcan Alurninim Limited 1 1 88 Sherbrooke Street West Montreal, Quebec, H3A 3G2 Attention: Chief Legal Officer

To the Province:

Deputy Attorney General 1 00 1 Douglas Sticet Victoria, British Columbia V8V 1x4

and to:

British Columbia Hydro and Power Authority 333 Dunsmuir Street Vancouver, British Columbia V6B 5 R l Attention: General Counsel

Jr to such other address as may be given by notice as aforesaid by the particular party, and will be d&ed to have been given on the date of delivery.

12.2 Choice of Law. This Agreement will be governed by and construed in accordmce with the applicable laws of Canada and of the Province of British CoIumbia

12.3 Jurisdiction. For the purpose of section 113, the 'courts of the Province of British Columbia, and muxts to which appeals therefi-om may be takeri, have non-exclusive jurisdiction in respect of any action, suit or proceeding arising out of or reIating to this Ajp=emeinf and the paiiss Liocablly and uncondI6ondly attorn to the juridction of those courts in respect of any such action, suit or proceeding.

12.4 Assipn men t

12-4.1 This Agreement may not be assigned by either party without the prior written consent o f the other party, save and except that this Agreement may be assigned, on notice, but without consent:

(a) by the Province to BC Hydro or to Powerex;

(b) by Alcan to a lender or lenders by way of security to secure financing obtained for the purpose of the design, construction and operation of the New Smelter, and

(c) by Alcm to any person or-persons who acquire born Alcan all or a part of the Smelting Facilities.

12.4.2 The right of either party to assign h - s Agreement with consent or on notice only as provided in section 12.4.1 is subject to the condition that the assignee, concurrently with the assignment, shall have entered into an agreement with the nonlassigning party, in form and substance acceptable to the non-assigning party, acting reasonably, under which the assignee agrees to become a party to and bound by this Agreement.

12.4.3 No assignment to a Permined Assign relieves the assigning party of its IiabiIity for the performance and observance of its obligations hereunder by it and by the Pe

rmitted

Assignee, unless otherwise expressly agreed in Gvriting by the non-assigning party.

12.5 Severabililv. If m y part of this Agreement is declared or held invalid for any reascin, that invalidity does not affect the vaIidity of the remainder which continues in fbil force and effect and must be construed as if this Agreement had been executed without the invalid portion and it is hereby declared the intention of the parties that this Agreement would have been executed without reference to any portion which may, for any reason, be hereafter declared o r held invalid.

12.6' Non-Waiver. No waiver of any provision of this Agreement is enforceable, unless in writing and no such waiver will be deemed to, or will, constitute a waiver of any other provision of this Agreement, nor wiII any such waiv'er constitute a continuing waiver, unless otherwise expressly provided therein-

-.- 12.7 Furtber Assurances. Each party will do ail things necessary, within its Iawful capacity, directly and indirectly, through its subsidiaries, agents and representatives, to validate, make effective and give fill force and effect to this Agrement, and to impIement the ttansactions contemplated by this Agreement The foregoing does not require the Province to do anything that would have the effect of fettering any statutory power.

12.8 Com~liance with Applicable Law. Each party, in petforming their obligations under this Agreement, shall comply with a11 applicable laws of the Province of British Columbia and the laws of Canada appliab!e t!erein

12.9 Survival of Alcan Oblipations. Nothing in this Agreement reIieves Alcan of any obligation that it may now or hereafter have under any agreement or law binding upon Alcan to deliver electricity to, or othenvise assist B-C Hydro in emergency circumstances.

12.10 Currencv. Ml amounts of money stated herein are expressed in Canadian dollars unless otherwise stated.

12.1 1 En tire Aereemen t This Agreement is the entire agreement between the parties relative to the subject matter hereof.

12.12 Amendment This Agreement may be amended only by an instrument in writing signed by the parties.

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12.13 Eaurernent This Agreementis binding upon and en- to the benefit of the /a\ Province and its Permitted Assigns and is binding upon and enures to the benefit of Alcan its successors and Permitted Assigns.

IN WITNESS WHEREOF this Agreement has been executed and deIivered by the parties on the day and year lirst above written.

HER ~ T Y THE Q U E ~ IN RIGHT OF THE PROVINCE OF BRITISH COLUMBIA, as represented by the Minister o f Education, Skills arrd Training

P

- and Minister responsible for the Industrial Development Act

Perr J& ~ o u d p r e s i d e n t and Chief Gecutive officer

Address

SCHEDULE 2B

[Reference Section 2.21

MEMORANDUM OF CONSENT AND AGREEMENT PURSUANT TO THE LONGTERM ELECTRICITY PURCHASE AGREEMENT

Date: August 5, 1997

Parties: British Columbia Hydro and Power Authority ("BC Hydro") and Aican Aluminium Limited ("Alcan")

Reference: Long-Tern Electricity Purchase Agreement made as of February 27, 1990 ("Agreement")

1. Definitions. Words and phrases defined in the Agreement and used in this A4emorandum have the meanings given in the Agreemenf unless otherwise defined herein. 'North Coast Interconnect" means a point of delivery on BC Hydro's System that is south o r

- -- west of its Skeena substation, at transmission voltage (above 69kV), including Alcan's Kitimat busbar. "COB" means the California Oregon Border (COB) Interconnect, being a point on the interconnected transmission system in the United States where the high voltage AC transmission lines of the Pacific Northwest interconnect with those of California at the California - Oregon Border-

2. Aereement Confirmed. Purmant to section 16.1 of the- Agreement, the parties confirm that the Effective Date of the Agreement is January 1,1995, and that the Agreement is in fd1 force and effect in accordance with its terms and conditions. Each party will abide by the A p e m a t , including ih is~ewomduzn.

. .

3. Amount of Electricity Pursuant to section 6 of the Agreement, the parties achowledge and agree that each of them has fulfilled its respective obligations under the Agreement to and including December 3 1, 1996. The parties further acknowledge and agree that:

(a) the amount of electricity required to be purchased and sold under the Agreement during 1997 is 140 AvMW, and

(b) the amount of electricity required to be purchased and sold under the Agreement from and after January 1, 1W8 for the remaining term of the Agrezment is 307 AvMW, subject to the exercise of recall rights thereunder.

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5. Alternate 167MW Arran~ement. Pursuant to section 4 of the Agreement, BC Hydro will consent io an arrangement ("Alternate 167 Arrangement') under which 167 AvMW of I 23 ele~tricity're~uired to be sold and delivered by Alcan under the Agreement, forming part o f its total obligation of 307 AvMW, may, at the request of Alun, be supplied by another p e m n ("Alternate 167 Supplier") to BC Hydro at either COB or the North Coast Interconnect . subject to the following conditions:

(a) Alcan shall prepare a list of qualified and reliable proposed -Alternate 167 Suppliers for review with, and approval by, BC Hydro and BC Hydro will not unreasonably withhold, or delay by more than 5 business days, the approval of any proposed Alternate 167 Supplier;

(b) the Alternate 167 Supplier will be a person selected by Alcan fiom those on the list approved under subparagraph (a);

(c) the Alternate 167 Arrangement shall take effect at any time on or aEter January 1, 1998, and shall continue for the duration of the term of the Agreement;

(d) the Alternate 167 Arrangement may be made with no more than one Alternate 167 Supplier, unless otherwise agreed between BC Hydro and Alcan;

(e) if requested by BC Hydro, the Alternate 167 Supplier shall agree in writin2 with BC Hydro to be bound by the Ag-reement , subject to adjustments described in section 7;

(0 notwithstanding the Alternate 167 Arrangement, unless BC Hydro exercises its right under subparagraph (h) below, Alcan shall continue to be liable for the full and proper observance and performance h r n and after the date on which the Alternate 167 Anangement takes effect of all the obligations of Alcan and the Alternate 167 Supplier under the Agreement, including the Alternate 167 Arrangement;

(g) Alcan shall give BC Hydro not less than 30 days priorwritten notice of Alcan's intent to enter info the Alternate 167 Arrangement, including identification of the proposed Alternate 167 ~ u ~ ~ l i a a n d all terms and conditions of the proposed Alteiiiaie 167 Arramgemeni;

(h) BC Hydro, by written notice to Alcan given within 30 days after receipt of notice fiom Alcan under paragraph (g) above, may elect to require, in lieu of the Alternate 167 Arrangement, that Alcan's obligation to sell and deliver, and BC Hydro's obligation to purchase and pay for, 307 AvMW of electricity under the Agreement fiom and after the date of first delivery under the Alternate 167 Arrangement is reduced by an amount equal to 167 AvMW in consideration of the payment, on the same terms as apply to the Alternate 167 Arrangement, by BC Hydro to Alcan of an amount equal to the consideration that would have been payable by the Alternate 167 Supplier to Alcan under the Alternate 167 Anangement, plus CAD 9100,000 to be applied to compensate and reimburse the

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Altemate 167 Supplier in respect of costs incurred by i t in relation to the bidding, negotiation and settlement o f the Alternate 167 Amngement.

6. Alternate l4OMW Arraneernent. Pursuant to section 4 of the Agreement, BC Hydro confirms that it will consent to an arrangement ("Altemate 140 Arrangement") under which the Point of Delivery of 140 AvMW of electricity required to be sold and delivexed by Alcan under the Agreement, forming part of its total obligation of 307 AvMW, will be changed to COB and supplied by another person ("Alternate 140 Supplier") to BC Hydro at COB during a period commencing on a date ("140 Commencement Date.3 specified by Alcan, but not earlier than January 1,2003, and expiring December 3 1,2014, subject to the following conditions:

(a) AIcan shall prepare a list of qualified and reliable proposed Altemate 140 .Suppliers for review with, and approval by, BC Hydro and BC Hydro will not unreasonably withhold or delay by more than 5 business days the approval o f any proposed Alternate 140 Supplien;

. (b) Alcan will solicit bids fiom proposed Alternate 140 Suppliers on the list approved under sub-paragraph (a);

(c) Aican will give BC Hydro a copy of the request for bids, all addenda, and a copy of any bid received that Alcan intends to accept;

(d) the request for bids will require that, if requested by BC Hydro, the successfirl bidder shall agree in writing with BC Hydro to be bound by the Agreement, subject to adjustments desired in section 7;

(e) not later than November 1, 1999, Alcan shall give BC Hydro written notice of its intent either tor

(i) reject all bids received; or

(ii) accept one bid, and specifying the bid that AIcan intends to accept; - (f) if Alcan gives notice of its intent to reject all bids received, then Alcan shall

continue to sell and deliver, and BC Hydro shall continue to purchase and pay for, i40 AvM* ofeIeciricity at the Norih Coasi hierconnec~

(g) if Alcan gives notice of itr intent to accept a bid, then BC Hydro, by written notice to Alcan, given within 30 days after receipt of notice fiom Alcan, may elect to require that Alcan decline the bid that it intends to accept, in which case Alcan's obligation to sell and deliver, and BC Hydro's obligation to purchase and pay for electricity under the Agreement from and after the 140 Commencement Date is reduced by an amount equal lo 140 AvMW of electricity and BC Hydro shall pay to Alcan the amount that would have been payable to Alcan by the successful bidder, according to the terms of payment that would have been applicable to its bid, plus CADS100,000 to be applied to compensate and reimburse the successfirl bidder in respect of costs incurred by it in relation to bidding on the 140 Alternate Anangement;

-I il - (h) notwithstanding any Alternate 140 Arrangement, unless BC Hydm exercises its ' 'J '

right under subparagraph (g) above, Alcan shall continue to be liable for the Full and proper observance and performance from and after the date on which the Alternate 140 Arrangement that takes effect of all the obligations of Aican and the Alternate 140 Supplier under the Agreement, including the Altemate 140 Arrangement

7. Adapted Provisions. The parties shall negotiate in good faith and resolve by written agreement or failing agreement by arbitration under the Agreement adjustments necessary to the Agreement to accommodate any Alternate 167 Arrangement .or Alternate 140 Arrangement, ("Alternate Arrangement') including without limitation, provisions to the effect that:

(a) the recall provisions of section 5.4 of the Agreement will not apply to electricity supplied under an Alternate Arrangement

@) the combined load factor of the total amount of electriciiy supplied under the Agreement, including any Alternate Arrangement and before and after any recall rights are exercised under section 5.4 of the Agreement, will be 95%, as provided for in section 3.2.2 of the Agreement

(c) the scheduling provisions under section 6 of the Agreement will apply to any Altemate Arrangement;

(d) the water rental reimbursement provisions under section 9. I of the Agreement will not apply to any electricity supplied under an Alternate Anangernent, or to any electricity purchased by Alcan h m any third party for supply under the Agreement; and -

(e) the proportionate reduction provisions under section 11.6 of the Agreement will not apply to any Alternate Arrangement,

8. BC Hvdro Assi~nment Pursuant to section 15.1 of the Agreement, Alcan confirms its consent to any assignment by BC Hydro to another purchaser of the rights of BC Hydro to purchase and pay for electricity, if any, to be delivered at COB, provided that BC Hydro gives AIcan notice thereof and remains liable for the full and proper observance and performance fiom md after the date on which the assigmient takes effect ofall the obligations of BC Hydro and the assignee under the agree men^

9- Further Assurances. Pursuant to section 16.1 o f the Agreement, each party shall cooperate with the other and promptly take ail such hrther action and do all such fiuther things, including settlement of further provisions, as may be necessary to permit the performance hereof- .

ALCAN AL.lJMNWM LIMITED BRITISH COLUMBIA HYDRO AND POWER AUTHORITY

By: Name: ~CUZNL~S, &rw~,-7\~1;: Michael Costello, President

[Ref-cc Section 31

1997 AMENDMENT

d

This Agreement made the 5th day of August, 1 !297,

HER MAWXY THE QUEEN IN RIGHT OF TEE PROVINCE OF BRITISH COLUMBW reprerented by Ministcr of Ekkation, Skills and Training and Minister ~ ~ ' b l c for h e indushjal Development Act

OF THE FIRST PART

AND:

OF THE SECOND PART

A Pursuant to the Indusinhl Development Act, RS-B.C.1996, c220, (the -Act") and Orda in Council No. 2883 dated Deambcr 29, 1950 rnadt d e r the authority of tlie Act, the Province cntcrcd into an qgramcnt wiLh 'AT- dated December 29, 1950 (tbe "1950 Agrmncnt") pursuant to **ch the Proviwr granted lo Ncim certain rights, including without Limitation those rigbts rcpnsmted by Conditional Water Liceme No. 19847 and Permit to Occupy Crowp Lands No- 3449 both dated D-bez 29, 1950 to develop th= hydroel-c power potmtial of the Nahako and the Nanika Rivers in British Columbia;

B. I'urmmt to an agreement, the "1987 Settlement Agreanmt" dated Septnnber 14, 1987 h u m Alcaq the Provina and H a Majesty !.be Quctn in Right of Canada (the T c d d Cmwn") Aican agreed to abandon in part ngbts granted rmda the 1950 Agreement inter a h in

- order to protect thc sockcyc and chinook salmon m the Nahako and Nanika Rivers and to facilitate the expansion of permanent industries in British Columbia;

C. Pursuant to scdion 2 of the Act and Order-in-Council No- 2572 datcd Deccmbcr 24, 1987. thc 1950 Agrctrncnt was amended by an agreement dded December 29, 1987 (Lhe -1 987 Arncndment"), bctwcm the Province and Alcan;

E- The entering into of Pbis Agreement by the Province and the execution of the same by the .4 ;'r responsible Minister has been duly authorized by Order-in-Council No. 0977 dated August 4, c; L!

- 1 997.

MOW TMEIREFOE'THLS AGE- WITNESSES THAT in consideration of thc premises I ag

and the cov-enants and agreements hereinafter sd fwth (the receipt and sufficiency of which is h d y achwlcdgcd), the Provincc and Alcan h d y covenant and a m as follows:

I, Definitions

For the purposes of this'Agrcanenr

(a) "1987 Settlement Agreemcntn means the agreement cntcred into between Alcan, the Federal C m and the Provi~ft dated Septanber 14,1987;

@) "Kemano Completion Projecr mmns the Works and proposed Works comprised - - in the hydroelectric project wiih tbat name, including:

(3 the plans, dmptions and htber documents pertaining to components of that h y ~ l e c t ~ i c project that are filed with the Province by or on behalf of &can; and

tbc Works a d proposed Works comprised in the K m c y Dam Release Facility (as defrned in rht 1987 Sctricmmt Agreement);

(c) ' ~echako River" means the Necbako Riva in British Columbia and includes all - streams and lakes tributary thereto;

(6) 'Works" means "'Works" as defined m the 1950 Agreement, as amended by the - 1987 Amendment

Z Amendments

2-1 Ibe 1950 Agreement, as amended by lhc 1987 Amendment, is hereby further-amended as follows:

(a) the rights under thc Act m t e d by the Province to Alcan in the first paragraph of sedion I of the 1950 Agrecwmf as m m d d by the 11 987 Fm-5 hcI&g those rights represented-by the (lmditional Water Licence No. 19847 and Permit to Occupy Crown Lands No. 3449 are hereby amended such that Alcan shall be entitled to store and lo use by &-on or otherwise only those waters and to occupy only those Crown lands, identified and described in the Final Water Licence and Amended Permit appended hereto and made part hereof as Schedules "A" and "B", on the tarm and miiditions provided t h e e and in the 1950 Agreem~~pt, as amended by the 1987 Amendment and by this A-wement;

@) Ihc Province and Alcan a- that the FmI Water Licence to be issued pursuant - to section 2 of the 1950 Agccmmt, as amended by thc 1987 Amendment and by

- this Agreement, will be *qd tog&a with the Amended Permit in the forms atlarhd on the date of &txution of this ~ ~ & e n t instead of on December 3 1,

LW* 2 j- (c) the Province ha-cby authorizes rhc rtqmnsibk Minister to iuuc under thc Act the

Fd Wala Licence and Amended Psmit to Alcan in the attached forms; and Id?

(6) the Provbce and A l a n agree that thc assets tha& wcrc mnrtructed and pm-ally ~ m t n ~ c t e d as part of the Kcmano Cornplction h j e c t remain Works for the purposes of the 1950 Agrca~lcnt, as a m d t d by tbe 1987 Agreement and by this 'Agrament, d will o d y be uscd in a consistent with the ~ina1 Water Liceilcc

3, Alcan's Final Water Licence

3-11 The Province ad A h agree that tbe ri$k identified in the Find Water Licence rep-t the fdl extent of the water rights: ~ t e d to Ahan under the 1950 Agreement, as amended by the 1987 Agreanent and by this Agrcwent.

32 Mean agrec~ tbat it shall obsave and comply with the IimiIations imposed by this Agrmncnf and, for grcata certainty, the Final Wata Licence and the Amended P m i f upon-any rights under the Water A d RSJ3.C: 1948, C361, which have been conferred on Alcan pursuant to the 1950 Agreement, as amended by the 1987 Agreement and by this Agllxment

4-1 If any pmvkion of this Agrccmcnt is invalid or undorccable, such provision shall be severable and the runainda of this Agrccmcnt, and the 1950 Agreement, as amended by - the.1987 Ammhmt, and all rights of A l a n granted pursuant thereto, shall remain in

I full force and cffat

42 This Agreement amends the 1950 ~gnxzhent, as amended by the 1987 Arncndment, and - this Apemnent and the 1950 Agrcaucnt, as amended by the 1987 A m e h e n f shall

henceforth be rcad together and have effect as though all the provisions in the 1950 Agreement, as amended by the 1987 Amcndmcnt and by this Agreement were contained, mutatis mutan&, in one instrument In particular, a reference in rhe 1950 Agnxmcnt, as amended by b e 1B7 h e n h a to tlSre Lkmce or b e Permit or to the bmc.dd Licencc or lo the Amended Permit shall be deemed to be a rcfaence lo the Final Watcr Licence or the Amended Permi6 as the case may be-

4-3 ?he 1950 Agrameot, as arncnded by the 1987 Amendment and by this Agreement, shall continue in fill forcc and cffat and the Provincc and Alcan cach acknowledge that they arc bound by the lcrms and conditions of the 1950 Agreement, as amended by the 1987 Amendment and by this Agreement.

4-4 The Province and Alcan each hereby ratify and confirm lhe terms and conditions of the 1950 Agreement, as amended by the 1987 Amendment and by this Agreemenf and agree

to take whaL6ver M e r steps art necc3(;ary in order lo give full force and effed lo Lbe 19% Agreement, as amended by the 1987 Amendment and by this Agre~nent, and lo

f..! < c- this Agreement. q - -.

Dl WlTN?SS WHEREOF the Province and AJcan have each executed this Agreement, cad^ 1 '50 being duly authorized and empowered to execnte this Agreanent as of the day and year above written.

HER MAlES7Y THE QUEEN M RIGHT OF THE PROVMCE OF BRITISH COLUMByl as represented by the Minister of Education, Skills and Training

PeK azd TiaiNIig

and Minister respomrble for the L n d h a l Development Act

ALCAN A L W LIMZTED

Jacques Bougie ~fkfl-deni and Chief Executive Officer

Address

PROVINCE O F BRITISH COLULMBIA

l?IN.41L WATER LICENCE

ALCAN ALUMINUM LIMITED of Montreal, P.Q., is hereby amhorized to store, divert and use water and to construct, maintain and operate works as follows:

(a) The sources of water supply are the Nechako River above Grand Canyon and all the streams and lakes tributary thereto.

(b) The points of srorag-e, diversion and use, and rhe extenr of the Nechako Reservoir, are approximately as shown on the plan marked Exhibit "A" which is attached hereto and fonns part hereof

(c) The date f?om which this Licence shall have precedence is 3 August 1949.

(d) The purposes for which this Licence is. issued are storage and powei as set forth in an Agreement between the Govemmenr of British Columbia and the Licensee, dated 29 December 1950, a . amended on 29 December 1987, and further amended on August 5, 1997 (the "1950 Agreement, as amended"').

(e) (I) The maximum quamity of water which may be stored is 23,850 cubic- hectornetres, of xvhich 7100 cubic-hecrometres are live storage.

(2) The maximum rate of diversion and use for power purpose is 170 cubic-metres

.. --- per second.

(0 The works may be operated to divert and use warer for power purpose throughout the whole year. The w o r k may- be operated to collect \vater into storage throughout the whole year.

( ) This Licence is appurtenanr to the land required for the powerhouse indicated on Exhibit "K'.

(h) The works authorized under this Licence are those described in the 1950 Agreement, as amended.

(i) This Licence is issued in accordance with rhe terms of the 1950 Agreement, as amended, and supersedes Amended Conditional Water Licence No. 19847.

(j) At no time svill this Licence be cancelled, nor the quantity of water that the Licensee is authorized to store, divert and use be reduced below the quantiry set forth in this Licence, except in the case of default by Alcan in the performance of its obligations under sections 5 and 6 of the 1950 Agreement, as amended.

Docurncnr: 262060: 01

h

(k) In order to provide flows necessary for the protection of sockeye and chinook salmon. the 1 3 2 Licensee is authorized to make releases into the Nechako River in accordance with the "Short Term Annual Water Allocation" as defined in the 1987 Settlement Agreement dated I4 September 1987 among Her Majesty The Queen in Right of Canada, Her Majesty The Queen in Right of the Province of British Columbia and the Licensee.

Minister of Education, Skills and ~ ( a i n i n ~ and Minister responsible for the Industrial Development Act

Date Issued: August 5, 1997 Licence No- 1 02324 File: 0 1 79602

AMENDED PERMIT BROVPNCL OF BRITISH COL?JMBPA

INDUS7RL4L DEVELOPMUYTACT AMENDED PERMrr AUTHORJWNC THE OCCUPATION OF CROWN LAND

ALCAN AL- L I M m D of Montreal, P.Q, being the holderof Final Water L i c m No. 102324 authorizing the stotage, div-on and use of the water of tbc Nechako River and tnbuM-es whereby authwized to occupy by and in comedon with W i n g those Crown Lands lying below tbe 859-54 metre (z820 feet) entour around am3: adjacent to the storage resrmoir

- above Kenney Dam biutary to the Ntchako River, as shown on JZkhibit "A" aftachcd haeto and forming part bereof, and to occnpy by and in codon with tbe cmstmcti~.maintenance and operation of the works h e f d to in F i Water Liceace No. 10232.4 those tmasewm Lands, designated in zn Agreement between ?he Govmmcnt of Brjtfslh Columbia d the Licensee dated 29 Decwba 1950, as amended on 29 Daembzr 1987, and as firrther amiiiided on August 5,1997 (im Amended Permit collectively called the en?'), the total having an area of 53,384 hectares (131,915 acres)- .The Limmie is a~~ to use or destroy tbe timber on the said lands by submerging it or otherwise in accordance with the terms and mnditions of the Agreanent This A m d Permit is appurtenant to the Iand to which Final Water Licence No. 102324 is appmeuant The-conditions relative to the righlr granted under this Amended Parnit are in accordance witb the tenns of tbe Agreement, to which this Amended Permit is to be anached and forms a part thereof. Amended the 5th day of August, 1997-

Minister ofEhmion, Skils Ad Training '

and Mkiskr rsponsiible for the Industrial Development Ad

File: 0179602 Amended Permit No- 3449

ESTABLISHMENT AND ADMTMSlTCATION OF

THE NJKHAKO ENVIRONMENTAL ENHANCEMENT FUND . .

1. Establishment of the Nechako Environmental Enhancement Fund

The parties wiil estabIish and administer a Nechako &vironnjcntal cnhancancnl fund (the "Nechako Enn'mnrnental Enhancancot Fund") in accordance with Schcdulc

2.. Eshblishment of Environmental Fund Manapement Committee

- The parties will establish a managanent committee (the 'Management Comrnittecl') in aur>rdanct with this Schedule.

3- Structure of Maoaeernent Cornmitt-

Subjcd to &-on5 4 and 6, the Management Committee will be comprised of three persons: OEK: appointed by Alcan, one appointed by the Minister of Environment, Lands and Parks (the "Envimnrncnt Minisla'') and one appointed by the Federal Govcmment

4. Participation of tbe Federal Government

he par~cs will jointiy -at ibc ~ ~ d ~ r a l ~ovcmmcnt to participate in the Management Committee RJC r a p s t r ill rcrnain opcn if the Fcdcral Govenrment does not elect to pdrticipate initially- Lfthc Federal Govamnart cbooss lo participate initially by so elating within 60 days of the joint qarst, it mi be asked to sclcct and appoint an appmpriate Federal ofScial to the Managcmcnt Committee wbo will bc invited to chair but may elect to sit only as a member- If tbe Fed* Governmmt elccts to pdcipatc at a later dalc, it may then appoint such member and the number of mcmbers of Lhc Managcmcnt Cormnittee will be i n d h i n thrcc to four persons.

5. bupointmcnt within 90 dam.

The parties will each appoint their represcntativts within 90 days o f the execution of t l k A v m t K a p e j fi i!~ to ~ ~ l ? t iPs iiqmscntatk ~ 4 t h . b this h e +MI, W p&j will be deemed to have dslincd to appoint a representative, and the Management Comrnittct will p h with the ranairing members

6- Selection of the Tbird Member if no Initial Federal Partici~ation.

- I f the Federal Governmmt docs not c b to p h c i p a e in the Management Committee within 60 days of lhe joint request., then a third member wiIl be appointed as follows:

(a) the parties will first anmpt to sdcct h e third m c m k by consensus,

@) if the parties art unable lo agree on a mutually acceptable third mcrnber within 60 days, then the will.irnmediately h a d i c r request the 'chair of the Frma Basin Council to appoint an appropriate third member,

133'.

(c) ; the Chair of the Frasa Basin Council wil be rcqocstsd lo appoint, within 30 days, - i a ncutral individual with no affiliation to either party, who has appropriate

i experience with cnvironmcntal issues and with wnynsus-based decision-maldng, .: who will be asked to chair the Mauagcmcnt Commitlee;

- (d) in order to assist the Chair of the F- Basin Council in making the sedation, each party will provide to tbe Chair .of the Fraser Basin Council a list. of six potential manbas who meet the rcquiranolts of sub-section qc) and who art willing and able to sit as a m a n k , d

(e) if the selected person subseqncntSy b m c s unable to serve, then the p d g w3.I request the Chair of Lhc F- Basin Council to sclat a replacement member

- using the prokcss set out in this sation 6.

7. ,4vvointrneut/Re~iaccment of Chair-

I f no.memba accepts h e Chair on appointment or if the Chair -gns that position, tbe initial or replacement Chair will be s e l d by majority vote of the members.

8- Manarement Committee Work& Prorrdnrcs.

The Management Committee will develop and implement its internal working procedures and the terms under whi& the NethaLo Envbnmcntal Edmncement Frmd w?I be established and adminktend, subject to the following basic requixwnentr

(a) all meetings wiU be called by the Cbair or any two members and all mernbas must be given reasonable noti= of all meetings;

:. (b) a quorum of .tbc Management Cum-ttee will. be two membas, unless the 4 managcmcnt Committee consists of only one member, in which case quorum will ; bc onc; and

c the Mkgernent Committee will seek to reach decisions by consensus but if the majority w~tPudes th, despite rczwdle eforis, consar;us wmoi be &td. then decisions will be made by majority vote.

9. Costs of the Manaeemeut Cornmiff ee

Each party will be reqmmible for the costs of the participalion of its rcprcscntativc on the Management Cornminet and will share equally:

(a) the costs of opedon of the Managcrnent Committee; and

(b) - the costs of preparing the reporl referred to in section 12;

0 .") , c. 21-

up to an aggregate amount of S500.000, or such p t e r amount as may be agreed to in writing by the parties, provided that if any payment by the Province is delaycd due lo a need fi stal~tory approphation, AIcan's obligation 10 makc a payment hereunder, and the Federal Government's obligation should it choose Po participate, will be delayed for the m m n d i n g v-d If it chooses to participate, the F c d d Govcmrncnt wi!l also be rsponsibk for Ihc costs of the

- participation of its rcpnsentativc and a proportionate share of the costs under (a) and (b) above. However, if the third member must bc seledcd under the provisions of sation 6, th-a the p d e s will share equally the.r-ea~~nable costs of thc pdcipation of the third manber-

Tbe. purpose of the ~anagtrntnt Committee is to ~view, auss artd rcpoxt on options that may be available for the downrtrtam enhancement of the Necbako waleshed area T b s k options may imiudq by~iC-irpg~-limiIcd to, UE development of a water release k i l i t y at or near the Kenncy Dam, or &'u& b z ~ s h a k o Environmmtal Enhancement Fund for other downstream enhancement purposes,

-

11. Consultation Process.

The Management Committee will w d t with the Nechako Watashed Council, if formed, and any othm stakeholders that Lhc Management Committee wnsidas appropriate. The Management 'Corn-ttet may approve funding for consultation purposes up to an amount of

- f 100,000 a year. Alcan and the Province will sham equally the cost of such approved fimding the F e d d GOV~TIIIJXZI~ chooses to participate in tbe Managanent Comrmittet, in which

case the Federal Government will be responsible fw a proportionate share ofthe cost of approved fimding

12 Mana$emcnt Committee Rmortr

- As soon as practicable aft7 carrying out the consultation pmsuant to seen 11. the Managanent Committee will complete and deliver a @rt to the PIoviocc, Ncan and such other parlies as apprapriate, which report will inclnde:

(a) its decision on the appmpriatc options for downstream a b ~ ~ ~ ~ v t of the Nechako watershed area;

('bj a plim for the irnplmeniation of cach of fic selected m-ons, kltidkig the identification of thk apprvpria!e party or parties to implemcnl the options;

(c) - a . independent report for each selected option providing a ddailed estimale of the costs for implcmcntation of the option, including any ongoing costs associated with the option;

(d) a pmgrarn for thc m c of the finding described in section I5 below to mat the costs of each of the scledcd options &d to provide for ffnancial and project '

reporting.

Subject to the f i n d a l &gcmmts d e . i below in section 15, and the dher terms of this Schedule, the decisions . . of the . Ma~ggnent Cornmitte.. will be binding on the

?:E- .

14. Formation of the Necbako Watershed Council.

Immediately following Lhc execution of this Agreancnt, the Province will help to f&iitate tbe formalion of tbc NechaHo Watcrshcd Council (the Touncib, i;l orda to provide advice to the Management Committee on the uses and pr;Oritics of the Nechako Environmental Enhancement F 9 h . -.-.-/*-- .- . .

Funding of each of UIC selezkd options wiq be ckmn down as required to meet the cash flow n& of the cxpditurc pro- establishxi by thc Managcmart Committee for that option as provided in the rcport. Wiithin 7 days aiia each con~hSrsfi has Lm ride htc the Necbako Euvimmncntal IUximemcnt Fund by another pcrson of 50% of each draw down fir an option, Alcan will make a matching wntnbutim into the Nechako Envirowmtal Enbancement Fund .The aggregate and cumulative maximum of AJcan's contributions will be CAD 550,000,000 including any costs incurred by Alan under section 9 @) or rmda s d o n 1 I. Alcan will receive a &it a g a d its obligation to contribute to the Ncchako Environmental . -- ...,-. - . . . Enhancement Fund amount not exceeding, in the aggregate, CADS 10,000,000 for the total amount of fhc reduction or cIimination of &sts which would havc bam incurred m t& development or i"pi&enm-on of any of the seledrd optiom to the extent that such reduction or elhimtion is shown to be achieved by the use of any design or enginaxing shdics or rcp* -. ..-% .

; _ for Alcan prior lo the date &akof on the Kenry I)am R=lcas&~acil i i~ as pa~t.gfthe, "

Ka~a~oComplefion Project 7%- h d s will be d l b d in aaordanoc with the program fbr u the' Use- of hding developed by the ~aoagnn~nt -ttcc. T~C- ~ ~ s ~ o , o o o ~ o o o I; contribution by M c . represents its total contribution to downstrcam cnhanccmcnt under the ; program dewi'bed in this S c W e , including the capital k t s of any water relcasc facility which may be selected and, wtretha or not a wata release fscility is built, Alcan shall not be rtquired to contribute any fintha amount to a water dease facility or otha dowmtrcarn enhancemen< For grtata certaioty, this provision does not affixt any rsponsibiIity of Alcan

. that exists in respect of its ownaship of the Works.

16. 0 p e d o n and Maintenance o i n Releast Faality,

Lf a water release fadity is built under tbc program d e s c i i i in -.. this -.. .*, Schedul~. thcn once wmpletcd, Alcan will opaate, and manage the nkbitenanct of; the facility at it?;,soI_c cost and expcnse. Ncan will not be xesponsible for the costs of maintenance, other than as sd forth above?,' except to the exlent that tbose costs are in part paid for by AJcan thmugb its contribution to tht Nechako Environment Enhancanent Fund lmdet section 15 of this Schcdulc.

SCHEDULE 5

mcfcrmu Section 51

NORTHERN DEVELOPMENT FUND

1. - Ertablishrnent of B e Fund Thc Northern Devebpment Fund (the "Fund") will bt established and administered in accordance with the terms of this Schedule.

2. - Pnmose of the F u n d The plnpose of the Fund is to promote sustainable economic development in NMthwestcrn British Columbia, including through promoting and

- carrying out measures andlor pro^^^

(a) to _ ._. support .,_ .. . . investment m new or existing businesses; .- . - . . . . - .

@) to create new ernpIoyment or stabilize existing cmploymcn~ and _ -.i-.-_- ... _ _ _

[c) to support such otha goals umsikent .with tbt purpose of the Fund as the Minister ~ f & i l ~ ~ ~ ~ i t .. . a d % i i ~ ~ e i ~ i C&BZ "Mhkki~ may a i i G d ~ b & i i : ~

For purposes hercofl Northwestem British Columbia includcr the Nechako =vex b a s h -- '.. - -

. .- .

3- h n d Administered by the Minister, 'Ihc F d will bc administered by the Minister and payments out of the Fund will be made at the Minister's discretion and direction in a c c o ~ with this Scbeduic for mcasurcs or programmes meeting the purpose of the Fund The Minist& shall issue an annual report on Lhe a d m i ~ m - o n of the Fund

4. - Advice of the Northern Development Fund Advisory Board. Prior to approving any paymeals out of the Fund, the Minister will seek the recommendations of the Adr i soryI4 (as hcreinafta defined). The mxmmendatjo~s of tfic Advisory Board are to &vide guidance onJy and m11 not be binding on the Minister-

- 5- Payments into the Fhnd NGCII and the Provixicc will each contribute CAD 57,500,000 to the'~unr3, in accordance with the following provisions:

(a) . the &vinoc shall mntribuk CADSl?,500,000 on J~rmary 1 of 1998, 1999 and 2000 or, at its option, on a lata datc in each year,

@ fix b v i n c e shdi provide PLPcan with i4 days' prior ndice of the h i e of its contribution for each year, and

(c) AJcan shall contribute CADS2,500,000 each year on thc dale of the Province's contribution

6. Other Fundin? Soarcex Additional fimm5al: contributions to the Fund that may be made by any third party may be ar;cepted if donsidered by the Province to be in the .&it interests o f k E d ---.-. -- "--.

- 7. Pap.rments Held in C o n s d i d a t 4 Revenue Fund- The conhibutions of the partics required under section 5 and payments, if any, mceived horn Lhird ~ a r t i u undcr section 6. 0 - :7 ., will be made into. invested and disbursed from, the Province's Consolidaled Revenue Fund ' -

pursuant to the Financial Administration Act, or another mechanism or structun for holding and - snaking payments from the Fmd as th Provine may decide.

8. Establishment of the Northern Devehmmcnt Fsnd Advisorv Board. Prior to March 3 1 , - 1 ~ i I i e P&in&';vill estabtkh the Northem De~t=l~pm&lt'Fund .... Advisory h a r d (the "Adviswy Bod') .

. - . - -. - 9. A ~ ~ o i n t m e n t of Members- The Advisory Board wit1 be comprised of alt least.8 pasons from the Nort)rwestern region of British Columbia appointed by the Ministea. The Advisory Board shall include:

(a) one or mare representativ4s) of h z Province -

@) one or more local government represenMive(s);

(c) one or more business representative(s1, other than h r n Aican;

(d) one or more F i t Nations repmcntativc(s);

(e) ' one or more union representa!ive(s); and

(f) two persons nominated by Alcan as its qmsmtativcs;

(g) otha prisons rcprcscntative of the Northwestern region

10. - Desienation of Chair and Proctdnres. The Minister will designate onc sB tbe members other than a represenbe of either the Province or Alcan to bc the Chair of ihe Advisory B o d The Chair o f the Advisory Board, in consul--on with thc Minisla, will then sti-&fish the Advisory Board's working proceduns

11. Consnltation Process, To dcvclop raommcndafions for ihc Minister as to how the Fund should be u!ilized, as well as idcntIfying any gcncral or specific measures or programmes which might bc supported through thc Fund, thc Advisory Board may consult with residents of Northwcstan British Columbia

SCHEDULE 6

[Reference Section 61

MUTUAL RELEASE

KNOW ALL PERSONS BY THESE PRESENIS 'thaf, subjat to lhe condition set out in section 1 hereof:

(a) . Ncan AiuminiMl Limited ("Alcan") for and in considuation of the cxbcution and delivery by Her Majesty the Queen in Right of the Province of British Columbia

- (the "Province") of the BUAkan 1997 Agreement (the uApmncnt") bctwccn AJcan and the Province and of the Replacement EPeckicity Supply Agrcemenf tbc 1 9 7 Amendment, the P i Water Licence and the Amcndtd Pcrmit and the execution and delivery by British Columbia Hydro and Power Authority of Lhc

- LTEPA Mmorandum, all as defined in he Agnxmmt (=l!mtiydy p d e d the "'BUAlcan Agreunents"), and for and in comidaatjcw of the payment of 510.00, the full rcckpt and suffiiciency of which h c d y is ~howledged , does h a b y agree I?y these presents for itsey its subsidiarjes and their rnpativc directors, senior officers, agents, successors ahd a s s i p to &q release and forcvcr discbarge the h v i n c c and its ministers, officials, employees, agcnts, successors and assigns (hereinafter collectively called the "Province Releasee") of and h m any and ail claims, actions, causes of action, dcmands, rig& damagcs, costs, debts, expenses and compensation whatsoever, wbetber at law or in equity and whcihcr known or unknown, suspected or unsuspected, which Alcan, its subsidiaries or their rcqxdve diraton, senior of6cas or agents have arising as a direct or indirect consequence of, or in relation 10 the Kanano Cornplction Project as defined in the Agrcanmt ("KCPw) not proceeding, and, without limiting the generality of rbe foregoing, all claims and causes of action advanced, or which

- could be advancad, and all uimers arising out of and ref& to, in action number C970386, styled AIcan Aluminium Limited v- Hn Majesty Tbc Qubcn in Right of tbc Province ofBritish Columbia wmmenced in the Vancower Registry of the Supreme Coml of British Columbia (tbe "ActionX on the t ams and conditions hscinafter set o w and

(b) .the Broriw;c for and in c m ~ s i d ~ o n of the cxecution and dcl&cry by A k i n of the BUAlcan Apkcnts, and for and in conw'daation of the payment of 51 0-00, tbc fidl racipt and ~ c i c n c y of which'b~cby-'is acknowledged, does hereby agree by thcse prscnts for itself and its ministers, -or officiais, agents, succesbrs and assigns 'to m i s c , relcasc and T ~ w m discharge Alcan and its subsidiaries and thcir rnpcctivc dircrtors, officas, anployeq agents, successo~~ and assigns (bcrcinaAa co1Iativcly refand to as the "Alcan Releasee") of and from any and all claims, &ions, cauxs of actions, demands, rights, damages, costs, debts, Rcpcnses and compensation whatsocvcr, yhdher at law or in equity and whcthcr known or unknown, suspatcd or unsuspected, which the Province hzis arising as a dirnt or indirect consequence of, or in relation to KCP not

- 7:

causes of d o n s advanced in, or which could be advanad in. and d l mattas L' -.' '-' '

arising out of and referred to, in the Action. on the terms and conditions hcrknafta set out

1. IT IS FURTHER UNDERSTOOD and a g r d that it is a condition of this M u d

173 -

.Release that, if at any time before January I, 2 0 0 5 . a ~ Act of the Lejslahlrt of the Province of British Coiumbia is enacted that abrogates in whole or in part thc..1950 Agrroncnt, as amended, the 1987 Settlement Agreement, the 1997 Amendment. the Final Watcr Licnxc, the Amcnded Permit, the Replacement Electricity Supply Agrrcmcnt, the LTEPA, the LTEPA Manorandurn o r this Mutual Rel- all as defined in the Agrecrnmt, and within 90 days after any such A d is patted, AI- by written notice to the Province el- to tem$nate this Mutual Release and continue the Action, tbcn, unless the abrogation is rcscindcd or nullified by firrthcr mactmenl of the LegisIature within 90 days afier such notice, this Mutual Release is void ab inirio and of no fonc and effecb except only tbat the provisions of this section I continue to bind the parties Nothing in this paragraph prcvents Alcan fiom commencing a separate procteding cbdlcnging any legislation which abrogates, in whole or in part any of the agmments referred to herein 'This Mutud Reiease is irrevocabie, uncondiiionai aod I- a d runah so if - i . notice is iiet given by Alcm within the time hcmn pamined or, if Sven, if the abrogation is m i n d e d or ndliiied within the 90 day period The partia acknowledge that the effluxion of h e between the date hcnof and the datc on which the Mutual Release becomes void ab initio does not prcjudicc, or affect in my way, the cnforckent by a party of any right that could be enforced by it on or before the datc hcreof, and is not a waiver of or acquiescence in, any fact or cirrumstancc which forms the basis for any such right, except to the extent otberwisc provided in any of thc Agrmnent. any C o n c m t Agmmmb the Final Wa!er Liccncc or the Amcnded Pcrmit, all as defined in the Agreement, that are not arc so abrogatd

Z IT IS FURTHER UNDERSTOOD and aged that the settlement in respect of which this Mutual Release is entaed into is not an admission of liability and nothing herein contained., nor thc consideration given for this M u m Release, shall be construed as an admission of liability on the part of the Province or of AJcan

3, AND Alcan hereby covenants and agrees not to make any claim or take any proceeding whatsoever rclated to tbe matters herein released against any person, firm, corporation, association, partnership, government or govemrnentd authority which might result in a claim for contribution and indemnity or ohenvise against the Province RcIeasce and, if such ciairn or proceeding is taken or initiated by Ncan, hew N w dues h d y cov-i aid a p z e to save harmless and indemnify tbt5 Province Releasee horn any and all liabilities, damages, InPeses~, costs (iY1CIudh~lg l e g d fees and disbursements as between solicitor and own client], expens& and compensation of whatsoever kind in respect of any claim for contribution o r iudcmnity or otherwise.

4. AND the Province hereby covenants and agrees not lo make any'clairn or take any

. . proceeding whatsoever refaled lo the matters be& released against any person, fim corporation, association, partnership, government or govemmcntal authority which might result in a claim for contribution and indemnity or otherwise against the Alcan Releasee and, if such claim or proceeding is taken or initiaed by the Province, then the Province does hereby covenant and agree to &vt harmless and indemnify the Alcan Releasee fiorn any and all liabilities,

q - 2' damages, interest, costs (including legal fees and disburwrncnts as bctwccn solicitor and own ' ' 'I , client), expcnsts and cornpensadon of whatsoever kind in respert of any claim for contribution or indemnity or otherwise-

f 5. AND thc Province and AJcan hcnby declare that in entering into this Mutual 5; Rdcase tbey each understand and agrn that thcy rely fdly on thcir own judgment, belief and

ho\vledgc oithe n a m of this docurnat.

6- AND thc Province and Ncan each aclolowledge that the facts in respect of which this Mutual Rclcase is made may prove to be otber than or different h m the facts now known llrc Pmvinu d Alcan wcb cxprcssfy acccpt aDd assumt the risk of tht fscts being different and agret that all of the tams d conditions of this Mutual Release shall be effective and not subject to termination by any d i x o x r y of any difference in facts or any new facts, save and except only as provided in sation 1 hcrcof.

7. AND the Province and AIcan each further confirm, acknowledge and agree that in cntcring into: '

(a) the Agr~wenc and

(b) tbe Connnrent Agret~nents, the F d Water Liccncc and the Amcndcd Permit, all as defined in tbc Agreement,

all pmrniscs, qrcscntations, t o l l a t d warmtics or agmmcnts; whether oral, written, express or impGcd, not tbcrcin c x p d arc mcrgcd into the Agreement and are of no fiuther legal force or effect fiDm the date of a-on of the Agramcnt, unless tbis Mutual Release is r e n d d void ob initio .and of no f~rrr and cffcd pursuant to paragraph 1 hereof. Tbc consideradon stated herein is the sole and entire -dcdon for this Mutual Release

8- AND the Pro* htrcby represents and declares that the Province has not aaigocd any right of action concerning the matters bereby relcased to any person, corporation or other lcgal entity who might claim against the Alcan Rclcaxc.

9- AND Alcan h d y represents and dectares that Alcan has not assigned.any right of action concerning thc matters hereby released to any person, corporation or other legal entity who might claim against the ProProvioce Releasee-

I 0: WEREVER the singular is used throughout this Mutual Rclcasc, the same sMl be construed as meaning the phrsaa where the context requires.

1 I. THE Province and AIcan cach state that it has consulted with and has been advised by its own solicitors bcforc cntcring into this Mutual Relcasc and that it .hzs carefdly read this Mutual Release, knows the wntents h-f and s i p the samc as its own fi-ee act

.I 2. 'IHE te- of this Mutual Release are contractual and not mitals.

13. THIS MUTUAL ELME is govcmed by the laws of the Province of British Columbia and the Iaws of Canada apptcablt then&

5. IN WlTNESS WHEREOF the p d a bavc cxccuted this Mutual Release on the

5th day of August, 1997.

HER MAlESn THE QUEEN IN RIGHT OF THE PROVINCE OF BWilSH COLUMBIA, as rcpruented by tbe Minister of Ecbcdon, Skills and Tmithg

M i e r of Education, !&ills and l:hg and h h h e r resjmnsiblt for the Industrial

k

~ad$us Bougi& President and Chief , Extculivcofficcr

Ad& . .-

PROVINCE OF BRITISH COLUMBIA 1 76 ORDER OF THE LIEUTENANT GOVERNOR IN COUNCIL

0977

Ssvorn before me a

On the recornmendatio , by and wirh the advice and consent af the

Execurive Council. orders ~ ~ i ~ d ~ f c i ~ % @ ~ ( B & h @ b i a

BCIALCAN 1997 AGREEMENT ORDER

Dsfln Ition

I In this arder. "mlnfster" mcans rhe Mjnisrcr of Educarion. Skills and Training.

2 ' I l e minister is aurhorizcd ro cxccurc an bchalf of rhc Province [a) a1 agrecmenr with Alcw ~luminium Limired subsrantialiy in the form c f the artached draft agmrnenr

en~irtcd "BUAlcan I 997 Agrecmnr", (b) an agreemenr w i ~ h AIcan Aluminium Limird subsrantially in rhe form af the draft agrccmcnr set our

in Schedule 2A referred lo in Qc BC/Alcan 1997 Agreemnr arld cnrilltd "Rcplrssemenr Elcctticiry Supply Agrecmenl''.

(c) an agrcerncnr with Alcan ~lurninium Limited subsrantially in the form c;f me arrachd d ~ f r agrecmcnr scr out in Schcdulc 2A rcfcrred lo in rhc BOAlcan 1997 Agncmcnr and enritlcd "i 997 Amendmcnr", and

(d) ocher documents nccerrsarj. lo give cffccr ra rhc agnemcnts uuthorizcd cndcr paragffiphs (a) to (c).

Water llconcs and permit over Crown Irpd

3 . Concumn~ly with the erecurion and delivery of rhc BClAlcrur 1997 Agmmcnr, Alcan Aluminium Limited is granlcd a Final Water Licencc and an Amended ~cmie Auihopizing [he Occupation of Crown Land an4 rhc rninistcr i s ilerhoriZcd ro ~ssuc, and ro include in rhc agwmcnl aurhoriwl under rnis order.

(3) rhc Final W#rcr Eiccncc subsranrially in rhe form aiEr our in Schedule 3B rcfcmd to in the B U ~ l c m I997 Agreemcnl. and

(b) the Amended Pennil Aurharizing in the form set our in Schcduir 3C refcmd to in lhc

ff)iCIpart k for odmlnr~rmlw purpa~e~ d y and& nor pcm or/& OM#*)

T l i s @camant is made the r dky of July, 1997.

('?ro-") OF THS PIRST PART

AND:

("AIcan'D OF TI32 SBCDW PART.

WHEREAS the Provipco 4 hctm wiirh ~o resoIw JI irow M'aing in w n n d o n with rho action oamrncacod by Alcaa agajnst tha Prwinccr in lb S q m m Cauz't af British Colrunbii Vgocowar Rpgimy ( A C ~ O ~ No. C970386).

NOW THEREFORE TELS AGRBEMENT W S E S THAT in mad-on o f tha pranks and of the covcnmts md a hmhdkz act fanb (tho receipt oad ~ r f f i c i s w v of which in achawluigai by cw1 oft= thc p6ltics O Q Y ~ aeP rprco thru:

1,i Wo& ph-asw &End ie Sohuiula 3 spd used in ?his A p 3 t have the rnciahqg g i v m i a S c h ~ t 1. Wardrandphraaguscdb8~d~aaddo~tb&krrvc,fclrtbc pwposo of eha SeHEdvSe, the w e a h g ~ givm t b m b

I P o & u ' d o ~ m d J n w ~ ~ 2A RapManant Wocftioity Supply Apvcmm 2B LmATvlc- 3A I 9 9 7 h r n d ~ ~ ~ t ! 3B F W WmrLicurm 3C Amu3dcdPermit 4 NechakaEnmmW-artFuad -

I 2.

2,l . .

PU& to md cmmmntiy with fhtl s z w c i ~ l ~ ~ imd delivery of tbio ~gmum% the Pmvbu erwl AIcppm emtizing jn~o fizc Rqplrcammt -city Svpply Agswmem~ to pmvi& AIcn, on ~ t a m u u d c o ~ d i ~ ~ 1 4 ~ ~ 1 f , m f h 8 ~ c o f ~ p o c t ~ ~ ~ ~ ~ ~ ~ f ~ &mric power A I c a would h v c generated fmar itr Krmplr, CampIotiPa Aojba if Akm fua oomp~swd 'tbu prqjtcr

6.1 The ~ d ~ o n givcn by tbd Prow WUW thij A.punept, thO (2wwmU Apanm, thc Find Wares 1 - i w oad tho A m 4 P d f I I , Inte a/&. f q t?w rcltcua of the claim fm low by ~ l c a n 3n Acdon Irfp, C970386 ha LtcOrdsncd with thSrr Apumc!u.?-

6.2 [Cancumrdy w=i& tbc awiim d dsfitmy of this A m t , 9 s ,pdm m ex- and dcEvssiag mu Muwl Rslawu. Ie mrn'sn I t b ~ f , tbu M W ~l~ cantaim e condition rhm, iffulSlled, rrnda rbt M u m Ralcaw void nb hldo.)

6.3 me parries s N forthwftb MCO qpgqxir ta rrtcps tp p ' w &$oa ;sics shall have tko n@r ro contiaw tho Acdm opiy if fbs Muturl Rc l s~~c ia mdmcd void ab hftio in BcMrdmtco with S A o n 1 thtroof, fafUnO whkh Fho Pa* W h ' ~ o Mr t.o hrvc Q e Acricm dirmteoed by cons- wiFhout wst~ to dm p w rad AZFna IlQOby 6 ~ c e a tbat ir will da d t b a t i s ~ u i n d t o o b l 8 i n , l u t d h ~ ~ ~ r o , w l c b d i w i s s d . ]

6.4 f IhcpmdacapJuutheywi l l~owi tbeo l cboEharrPd CxbrrUr~sprthrrmrybo quirPd ID mm th81 either Aluua is &lo ba cQntjnw with tbe &?ion if it w m to bOcomc catitlcd to do so or thar f.hc Actioa is d h i r s e d by eonraat XMcpn wcrc not &:led lo do ro, 8s tho w e may I=.]

6.5 [This Agrcmcnr pton'dar &r tho scttlcmcat of tbs Action, bur n0thiz.g in thb AgtoQnsa~ ~ ~ t i n r c a s , m may be rclicd upm by aay party as, arn amnirsian o f my liabitiqy cn fwt mWvc to thc ~ c t i m nn the pan of LIK h v h o or of ACILD.]

Each party wilI do ail tblclgn n b ~ e i ~ ~ , Wi& ird BwN capL)Ci(y, diT1Xt.I~ urd b & d y I @mw& ita gubpi&Prri%~ agass and repPpseinad~~, b -6 W e eEcxtivc w r 1 give fiall fbrw a d affecr ro rbio Agrocmanc, ond to izPpkarcPO the --Jared by this ~gmemeart T b E f o ~ ~ d o c s m r q h ~ b ~ t ~ B Q ~ t h a t w a u l d ~ ~ k a f f a t o f ~ c r f i ~ fat aarrirsa of any rranirory powa.

(a) the Province sxffcim my arsurtiv~ power @w@ which does Rot orwutiw n bred under ths agmmmb d domma@ dmaibd m (i) to (iv) b b w bqt which m8itor b -18 h

(iv) this Agrcaospt, sy of rhs C o n c m t Agrcdllnm or tbo Find W v c r Li- or the Amaadad Permil,

excluding, bowaver, for grrphr CQflljn~y, rbc CLCIC~W in @ fai& b tbc mvh~s of my (aocuuva power or au~hority mg& BW appmvd. inchding wilhovt limiWm the gmitJns or Mluv P ~t my mp'l~ory rrpprovd ljccllcc or panit. rcquiral for tba New Smcllsltff or

(3) an acrlun ar p d g is bughr by n lhird p w nor rsaistod or supnod, diratly or Ldkonly. by A I m or im bmugbt by a roplmry body on it o m initiative thst m l t s in a wwt or ,r rcrcgulatatY body rrJdng 8 final ad=, in wect of which rll rigbpl of mvim ar l p p d have ban acrciled or ahvrslsd or the rime pcnnittcd fhonfor ha8 dxpW thal ths Nvincc or BC Hydm nr applicable. lllckd .uinmiry to kno io ~ u i iis ~b3g"a?ij;?; W d n lhil Agmmmt, the Con- Alpamafl, rbc Final Wutcr L i m a sr ihc m a d 4 P k h pmvjded tbat ALern vigoroluly defends ran such SU=fjcm or pmcccding to th. sxtmt rbnr ir ir lawNly atitled u do so.

then, ar Uw requnr of Alum, Ncaa~ md rhc Plwina ibtU nuip- pmmptly red in gwcl fairh and endcuvow m r p upao @on6 thU may 1nrfL11y bc QLcn by h e Pmvince, or upon @-urn- to this AgncmaL nl Fiad W W Licam, tho AmmW Permit or the Cunammt Agrmeatt (Mbs Ch8n T]w MuTrUd Re-), or upon anorha O&QT basir of resolution as b u p d a may a p , that rnrt m x a U Y UP reamre subrraodnlly h o barrrffv Wxumda Jm would luve rccnrcQ to Akan if rhs .ctiw dmcribed in (a) above had mt b m tukm or lbc order d c ~ ~ i b ~ d In (b) W c had booP mrdc. If the parties arc unable to q p upm rppmpriatc li~wRJ ;dw by h e Pxwincc, djwmena or ofha mlut ion within 90 day8 a fkr Alan's to do so. thcn the scnlmcnt of the term sTld coILL#fiw of the ~wmentb &dl bas r r f d to and finally rmol~ed by art>itr~don nr lminl~d by the Britiab C o l e Irr-oarrl C m m - d Arb~uaricm Cmtrc p m ur iu Ruler. If at rbe dm6 thu d~imuon i s fmmmzid under rhi8 man &a Brirish C%~umbia htcf&@ carnmczrird Arblmliaa C ~ a m or its wccmr, OW not exist, or its RuIw do not provide far aa a d m i n i m arbitcarion, rbcn thu d i r p ~ ~ dull be n f m to md W y w l v d b ) ~ trbimuaa wda thc ~ m m w ~ i a l R r b i i ~ w r ; AH, es rdZi3%-m tima ~o h e . ma u ~ m b sf -itrams is s and thc p l m of arbination b Vowouver, BdW CnImbis.

Tha Province for itscif wd w to tb L W A 081 bd&f odBC H y b , &dl M w 6~afbm zhw tbe 1950 Agmmm!., u mdcd, thm 1987 Smlamcat Agmm6PI ted d a I-TEPA rrs in MI knc8 and effect in iwxrrfancci Wirh th& e v e IF)(i cadi-

U p cxo~urion ond Mlvcry of tbir Agrranmt, A h a &dl prblklr itr fnrcQLton ul w r U n u a o r b b e i l b r u , m b j m ~ o ~ r o d ~ a ~ J o d ~ ~ c r a o . ~ o f3-i lwLfwk.CIACICtS~Ma ~ ~ & ! e k r t t r n ~ f).CT m bag& producrioau dya Jmmy 1,2004, bat W W C k m ~ ~ 1,28160, sod ito dmdsba LO rptwnrrpy i d l c c @ t y a ~ 1 ~ Q d ~ ~ t ~ ~ K i t f i a J , B . C . biiJIuprdcymrflmftykrSt ralujvo to other idle rlvdnrrm m e k g mty coatmllOQ by rab fir toy nm mt ba: than Janlury 1,1998.

No d ~ o f mypwvtsjm o f L h i d ~ c a t i r mforocabkuo(cnn in rVFitips a d no swh mivsr will bo ad m, w will, coardtura a miw of ray o h p f i m of W.8 AgToaa- aor *liU ra;v iYCh waivm ~ C I I M ~ ~ N F ~ s can-g Oniw, lmlaur omcrwiw apnsaly provided Lbandh

Tho cams of thc PTPvincc of Britkb COlmbh, BPd oom to whjch app;Jlt h d c n n may be talcan, b v o uxclurivr jutiodicdoa in tarpcct o f my ~~ dt or pr#.sa;liog Pigipg out of or rp-g to thh Agnuncar, iflad tho pwtb iam'ocabiy a d aadt ia3a l ly attom to fbc juridica'on of Z b b ~ COW in f e i q ~ ~ f of any d lAtit QT p w b The fireping docr n u t ~ ~ r m y o j p u n c n t torrt,itrrrtecoa#riatd.iatnyCcWtWoMAgtbcmdut

Si~nrnrrc Pa, -

(b) ~ c r a a i r A u h a r i z i D g ~ ~ ~ o f ~ J c l Z Y ; I N o . W 9 ~ ~ 2 9 , l 9 5 0 u r r n 4 a d c x t ~ ~ P d r A ~ ~ t b o ~ ~ o P C m w l , L r n d No. 3449 iwed D s d a a 29,l W, Rid

Z T E P A " r a a r r l r b m g T m E l e c n i W = m ~ 0 t b 4 ~ ~ ~ n a ~ b l ~ c Hydro ducd F@bnury 27, Zm,

WMrrtaJ Rdrurn lnarar Fho mllswlrl ral#ra o f 6vca due b-rrb, r copy of wln'eh ir u . € S & d € ! 3 ~ 8 6 ;

Grammatical mhdons of say ddinud tcnnrr h m dtrjlar tnwdap; w.* iFnporring tbc singulw number Mudc tho phml md vice vum vbere i b ~ context m q b q the division of tZJt Agrcalenr into SepPtatb WCtiorss, esb- rcia WOI, &mi tb i.Lweaim of twdqp , for wnveaiwo of mfwonoc oaJy nnri do not alm tb ~ u d ~ of tbio A$rammt. ~ e s t o a W o n w i ~ t h a ~ r s n a n o f f t , m ~ a S c ~ l s , m e s ~ a ~ o a o f t h t apwnmf or The !3&arkrla, rrs the c w m y be, rmlaia ulhcmis bdhtbb

Th is A p c m e n ~ made the r Qay of July, 199'7,

IlER M&mgJ"J' THE QUEEN ZN RIGEFT DP T"EE PROVINCE OF BIU"IIBH COLlMWW -a by Mink= of &hg~&~n, !%il.h &Cid T-&

C-viacd3

CF THE FarST PART

OF ?'HE SeCONQ PART

WHEREAS the partits am mmiag into AgrtC~3aat p m t to the prrtvisionr of wcrion 2.1 of tbc BUALCAM 1997 AG-; --. -,

NOW THEREFORE TIiIS A m = WrT?JESSES THAT in considcation of ['ha p d C 4 d for 0&c3 snd W~&!Q tho mpt sad S U ~ C ~ R I F Y 0f which ir acmlcdgcd by coch of chc p9xrira, The pppfim a p T.baC

1.1 -. Worrfi pbrrl9ar d a h s 4 In dhis secdos 1.1 andl wed in &is Agrmaot have b e rncaniapt givm ia rhis iwdo~ , 1.1.

(a) &Adaptod Ternu* ZUWIS, 4th r;Bpat to fligrbl~ Sdc, the price payablo during the Subetitunon Pdod Sir cIsFm'u~y r h m w m3 dl 0 t h term.$ rrad condiricrna opphcsblo ~ F U & r;huipp tbat dd adapted b ~ o i r l o n c a wirh section 7.2.21d), %a Cr rh;sf& p b , Kmu affd driw.8, wtrcp applied ~~ d m tba Subearrim Pdod, am no moro so Jcr# fPva.llr&Ia to tba cxomrnic int- of tbc plovincc: ond BC Byihr, tb6 p d ~ , tarms a n d copditiom of 5hc Eligible Srla, proddad h o ~ m thaf ia RU a ~ m t may A daptocI Torma cxtmd ltic Supply P d Q # b a y d tha drta aitut htrcip;

@) M ~ t ~ n mCaRIl MCllO Nmnm Wmitcd, r CPaadion wrpodcia (formariy aamAj "Ah.ld.Rw WW o f tb&, LbZdted'), .CIIllj b:had68 FhD ~UoCewors and, if this &pmmmt Is d g a e d , ira Pud&cd hurigr~;

{c) C(AIoRn?~ Syrtam" meam o t s b i c J pwadon mrl tnuusaiaafon 6yaca ownad and crpcpatd by Alcrrn in Brioisb Cnhunbia, and inc . luk dJ nt&ations &tmo aad rap& a n d r 8 p m t 8 IticfWf;

Cg) 6FBw EIecWh." rn- up b l lS AvMW of clecity dslivatod to Alum by the P r o w UIKkr ~ AgzcxzndSU;

6) uBC/~ca# 1997 AgmmcmC" mauu 3ro agrcmarr msds rho dry of July, I997 bawmIhs P r a e andA3caa;

(j) "BC Hydra" mcaa Bddrh CohOia Hydm and Fawar AFlrhority & itd mrcc WtAom;

(k) Hyd.re's gyrcm# m e w tho d0cttic-d gamaticrll, m&bn tnd didbudon rystcrr, owacd rrrd opcclusd by BC Hydro la 13rin'sb C o b b i n , and includw all modifIcofions t.hsma a d reptin Bad ~opiiuxpam hc4m5

(I) "Saslnness EPogF mease nay drry atbe th GotrrPdag., Slarbey or w clay PhBf is rtcogdzcd in British Columbia w r naW or proviwid bctliday;

(iil rha olbcaicify k b&g ~ l d to t b OW= LX o p a q ~ of a primary J- mubar in British Columbir firl. the pwposc only of ~ ~ t k U ~ ~ a a d r P l u d ~ d 0 r ; o a d

(iii) the srJcI8Faade d m 8 n rrgrteriwn'c ~ i t h a t f f m a m $ 10Ycam incIubiva of all mmalg caaiwtblt at the opt io~ of the p-, and inmlving the duliwq and pmhnao of mom than i 0 AYMW;

(o) MExpurn m w a punm sppobtd in DC&D ~ 3 1 h wtion 7.2.2(d) KO

dctcrmin~ Adapted T ~ ~ P D ;

(p) Y P ~ ~ e M 4 e w n IDHUW (i) acts ef GoQ including withv* Wtsa'en - d o , Iandslidt, wigdtdonn, ice atom, li@nhg, wIPT~G anrption; (ii) iatafuptiaor af g m d o n m e ~ s i o n d w ; (iii) Eaikee, s b u t & ~ w in andciparion of dba, lack-oerw 8a.l o&cr l h w QiBw=ea; Ov) ~2% er om_i, i%i~~s o f e gavernrnme or a wgaacy or O U ~ F ~ of gavoslrraent; (v) wcidato, qniprnmr brsakdom electrical di&ti&Wed apd bbalaarsw; (vi) no^, acts of sabotwgo, blockades, civil disobodiw fjm, flop4 wws, dcls;ys or inrermprians in n-tioa; {vii) Farced Qutage; (viii) my cam iqjrncTian or orda, ar any okn came not rwuonably w ~ 4 or mt witbia the csPtrol of rha p m c l h i n g b asqjwr~ [hIudiag, in the am sf f o ~ c mqjcuro cIaIared by tha PrcJvbx, BC Hydm), w 6 G k r af the ftirn;rrc or w@ject rrmc hcrtin ~1muzatod ur wt, but oxchrding:

(A) wts or offliuinat o f thc govanmant of Britinh Columbia or an sgmcy ot autbfity tbmf; tad

(q) "Yo& OnUgc" r n ~ a n o fh o~currcacc o f compoaent frilurt or similar ccxr&tisn which mquirra h s r s gmw~klg wit or other aquivulat wmponmr, or both, h ~emovcd from SCMW, but doas mt includc a Single Ckntiftgcncy Ourstgc;

(r) HKom.av ~nora t iag Sfrdnnw morn8 tho hyciroolat~.~ g m sration nf Alem at Kwnaao, &d~& Columbia, rrrrd bh&3 all nrrcrdificabcsna d x m o md rqarira an$ mplafemaats bereof d dl rtdrlitiod gcwatin$ faciIitiba mAda or conseuctcd tifie ta rims fix tha purport of gca-g olffuicity wing watar held uadcr Final W~tor Li- NO, 102324, any mr:ndmslrt thereof or any liconca iwuod i.n mMtutioa or raplacmnmt t h m f

(9) HKldrmt Sab8SrdW m e w the c-d mbrtorioq 01' Alcrrr at its smch ar Kirimgt, Bn'dsh C~lmbfn;

(I) *LME PricP mwm, fa wch Month. tho Cansdiaa Qlbr quivaltnr, dtrcrarined in accmbwx with &on 7.2.3, of the w m g ~ far Qla blaath of the ''nflfriul'' 3 monrba' price pst t a w c h ~~ 99.7% pwity, tauowed daily by thc hndm Naah Exchgny: (''11,1H3&'9 sad q m w d in U.S. dollars, a rot by rhe quosari~n wsrrnfttw of tbc WME aft# rh6 ad of thc mmd waion o f Fbo Ping tradiag aad p u b W rra bid anQ offer pm provided tb;n for the ~ ~ r p o s e of ma

Agrsanrcut @ dd-point af sha daily bid a d prices wilt ba t a l b . and pmvidui dso &N if fbr my tha f ~ q p i n g ctolru e> be d#smlaoblc, rhe Canadian d o k oqaivda of the publiabtd price far 11-~rm t b t , of all publiahad @em fhm availablq most clmuly ~ C C D I& of LBO faregoing, w dot&& by wim rgr~csncar bcfwton ~IK g9nioc, or w m g aperflmt by oibiUati0~ hmSUnda, be IWd aS tb8 ZhiE hb7'- For grc8W ccmkty the pBf0'68 ackuow1tdgu dl&$ the @GO pq Wnm fir ~ ~ I U Z ] dmaibed abovc is cuzmn!ly thy Prjcc publisb~d on ~B lWW% NetwclFk luxk ~ U V m pago roferarco MTLE in iba kmdm FimuciaZ T h # r &t the line Fitle "AM 0f"aari') on im comrPaSitioa gage npaiT m @;

I (u) *Moattrn mans 8 calmdm =-

1

1 (w) WTWb* IYWIW rpogaaratt how,

i (x) @'MWb/tm mcans mepWBn how par tpftnt;

Q wNtrbrka River" mums rho N e d d ~ River in Britidt Cohunbia and iucludcs al.I smarm and lakes nibumy rbcmm;

(2) ~NIW SmelfOP meau u MW al-urn m~lda Ws!y hSYing I dusigucd aMual ptodwtion caprscity of a p p x b n d y 225.060 ~ m m i owned and/or opvn~cd by Aloarz &no or wit4 otksto d l d in K i h ~ British Columbia. and includao all r n o d i f i d ~ o ~ ~ thPrato l ~ l d rcpairn and rvplscanrtr bmf,

(art) wPermlW Asmn muuu 8 pawn M ovhom thio ~~t i6 Higncd aa pcr=nincd under Section 12.4;

fbb) *Pofnr af Peltvc@' m m tha psinf wham BC Ryh'r 287 KV ~ e q i o n line dnadimds oa Alcan'a 287 W ndWhhg #&doxi fc~ucmx immarfiatcly cost af the mad to the a&dq Kim ~ 1 f b t ond mufh o f CWc or rwh oFha paint of dcUvery BS w y Be d=ipTlxeQ by writtaa alpccmcas b m m the parriss;

(CC) Y P ~ ~ ~ w x n DBB~E Brim Columbia PQWR &Ehangc Carprotion rrad its BU-2%;

cdd) "Prlnrc Iirtoq I I L ~ pzfuw ~PCO of fritcrrst iuuwwcd h r x t h o ~o tima by the Baolc sro a rcf~toncb me WOd by it fix tho pwrpareo of' d-nipg ma of inrcram cbargod by it ta c a v ~ c r c i n l bmwm f;w cimzdh dollar loons;

(ff) "Pma~nt U W y Pmcdcar) uwuu my ~f tb @wr, math* md ww cngagcct ia or opprovod by a ni@Ecazzt porda of rho altoPic uzility industry d w i q Ilw relevan~ b e p i a d , at any of tho p d t ~ 4 aad actn which in

h e exercise of rctwcmb10 j u d ~ m f j9 Zigb o f lb fiEg known at tba tirns shc dsciaioa was made, oould brva hem a q e c ~ 4 b accar-pm tht Qmhd d t af a -ruble cost & With good b u s h a mLi&il.ity, sdhy and axp#liricla UdUw P r a c d ~ ~ pro nor iptcad4d tcr k ZiraiM to tho opthum @c#, mdbwls, or rcto tc, tha uxclwioa of all ofhcts, but tother to bs rrcceptable pcu'a% rn- or wb gsmmBy wcqtd in tbt Wosrern Synoms CmrdhUing Cams ngioa

(d U R S ~ ~ ~ C ~ M P ~ EW* ILIW BW E I ~ U I Y suppim- E I ~ ~ W ae rcqrzind for thc qwaiuu8 af thc S m Fociliuw a f h utilizatiun of all eI&cjty ~~~ by the Kmew %ncdng Sm-oa atta dlowancc for sraa'an saniw, KsnunP tmwdip d w uud tmais~Wott lam;

(bh) 9fngIe Coat&tgazscy OnugQm mam an o q c , sxr- hew in dumiun, of BC H y h ' s S m that: bu tho of ~pnmtb& bind&& or dolaying tbc Province in Polivcriag cu pmviuaq sup- Blacrrlciw in rocorrimto wirb thim ~gmaneiat ad thu would not bvo had rhot iSkt if Bill Yydro'o rupply to Alcpn were bipd a.ud -to a doubt0 co-j ptpddad ceding to Prndsnr Utillty Practicer, fna t5r grsttar c#&ty mrclud# on o u a p wued by &can ar by rbcl rnamm in wUob A l u u ' 8 S p t m opamtcd &XI ~~ that w o ~ l d h o v c d C h e o ~ ~ ~ a 3 i f B C H y Q r o ' a n r p p ~ w A ) c ~ h r d b G b n daigncd d coarrauncd a0 a dWla m a a c y B@IXW&

(11) %mmg FKilirlaw mbplu tho cx~*ning f&miuum analriryZ fkilitica A Kidmt~ B.C., and iao1udca dl d d m tbem40 sad r r p d sad r~pl~carna~~u rknmf, nnd whar, curmrmcd, the Nuw hdkrr

llmil tho 5da of;

(iv) tb dw whm AlCBll hlCl lQtiCl oxmiPCd ifll rip1 in q c c t o f a rubsoqumt Bliglbla Salo and tbp B M S u t i o n Pariod ppliCbb10 h m o W cozrrsrrmcsd; or

(If) uSupplemcntwy E l s c ~ I ~ mcsm ckpicity suppliai a r b p w o f TIW firming stmica, provided by tbc Pra* throw BC Hydro, so agarit for r .b Pmviim, to Alan, which i s dcsigaed to iacrando Alcm's LIm cnurgy crq&ilify at Kithat by 60 AvMW;

(plm) '%uppImrca~~y ElociTWty Wet" rnm rha prim p p b k by Alcaa to fbc Pmvintx for S u p p I a m m ElClcfricity pumwut to section 7..3;

[nn) wSagpfy Co#uaaactmtat Dats* m a w a dsto ~gocified by Alcgn undw acctioa 5, bur to be not csriirsr Jmuary I, 2(333.

(00) C(6uppIy Periodw meam rha pcrjPd fiom 9ad hluding Svpply Co~mmrrmmt Dgm w dnd kh@.qg t b ~ ~la~licr of [i) Dwixmbar 31.2023 and (ii) tho d a c when this Agtoa~~czlt is WmhtWk

(pp)- uSysmm" -1 i a c l e aZ1 --a, h;ydrrurlic, ~1dd p r ~ a t i o n , n a d s s i o n and disRibWion $cfitieu c0WiP.g eirbar Am's Sysrem or BC Hydro's Syslem, as &c cou~0xf roquhm, aad "Syrmr" mu# both Alcm'e Sy~tcm and BC Hydro's Syrffam;

1.2 m. OrerrrRIad ydoti9na, of my dcfincd m s have similar maaning; words imponbg t h ~ sirsguiar number include tba p W and pice vma whcrc the contexr r-; tho divieion of thiP A p m l t n f inro s c p r a X ~ d o n s , and mbseclions, irnd the inscnj~n o f headings, are fm convdcaoa af mfiFenoc onJy and da na afftc: thc inresp~ration of this Afgccment. Wordo and phraocs baviag wcU h m #adt or tgchdcaI meaningo wiI1 bc @van thw rn0anin8o1 unlms orh&u blind h m h

2.1 Subject lo th temu and wndifio~ of W6 Agmmcn, rhs Pmviacc erW supply RepJammt Elecmci~y, which rkb Province awme Mam smr being mntiawlssly available to AIcm to meet iu lo& IW@ZWQW fof tfic Smelting FFlciliti- odtorr givby offccr to tbc provisiom of sccnoa 2.6. Tbc F m V b is 110t obliged to rnrppty Rq,lzaanent Elapiciry d Sm-Up o f t%c NBW Smwlrcr OCCWS. Tile PmYiffCG c c d m a ifO @ m r of BC H y b lu agm7 of he WYbW fa the pUrpOSC of wm cbe pwfirnnfi tw of w$ A-f by Tha Province. Thc PnsviPco m y c b p o iu qmr fbt t b i ~ purpoac with Alma's wriRen appmval, mcb approval not to be withbcld or ClaIayM ufmamr@ly.

1.2 -v RopLcanmt Bloctrididry rhll be in IJUJ b.m a f 3 pbnw .Itmaring curmt at a 15orniuaI fi-oquwy of 60 Hum and or a wmiml usrlftgu af 2U7 kV. Tho voItags veriatioa at thc Point of Dolivery WI be mt mam dun 1WA from the m d l j voltqo, oxccpt during contia8u;y or emf3rgancy condidw,

2.3 tnd~bnaal Eaniamanf. Alcnnh ~ p 8 i r a d o u i n t a ar its cost, an rhs A2can Sysm p k d i v e 8 ~ 4 control equijm~nt roquind in ttrc mWm5blc opiniaa of BC Hydm anri in a~cordonco with Pmclant Utility MCW.

2.4 SDaUvuv.cc~ r5 this A~W~~ICQL~ , ?he PTPrhcu Bhall &a rho Repleccmat Electricity m i l a b l ~ m Atan at th6 Point ~f Dtlivay.

2.5 Tifla zct ad risk of bsa in rwpcct of the Repjacrrncnr El83rfci1y ahall pass from the Provinw fo A l a pt the Point of Palivny.

(a) Alem rhaIl usa all clccrriciry g c n m u tko K c x u m Goavu&g Station W x-1 the rquircxnc~ul ~f thc Swhbg FI)CiliLicu prim ta using any :Bass Elecaicily;

@) Acm &dl use rho W mount o f b B w BfecUicisy to mwt rbc r c q u i r c m ~ o f tho Smelting Facilities Morn rrring my o f thc Supplora~ntt~~ eJtcRitity;

(d) A?cm abalJ wc the Rtpbaae@ Ektritiry only to raoct tbo quiamma of tha S m o l w Fwiliridq ;Zlpd a mt ad, or i X b w k ~ U ~ O I my of the Replocamm E1dcjty, wi926ut t& prior Writla m u a t of rhc Province, which wnimt m y bo withbold Rbitrsrily wd in lho rala d i d o n of the Pravirm.

2.7 -. ALcaO wammta fbal fiPrn Md after rh, Supply CnrnTPcncsmmt Rae it wlll not bc bPmd by any C C ~ # C L rx ccmmirmc~t for the dcliv~ay af electricity gwiarzrlcd tho Kcmano (hmxtkg SWm To c r ~ y othat penion duriw the Supply Paiod duu coauavmor Akrra'r obliaan'ons unQ wsctioa 2.6.

Subjw! to the tarms of this Apm~aat, canmacbiy rm tkc Supply Cornmencmmt Dar.0, and hereafter tho Supply Patiad tho Pmvbc shaU W e avnilrble far sale and dcIivuy ro Alcrm, ~4 A l c ~ S@KS, d4-I MU aad deliver in PCCO- wirh h d m t Udlity Prscricea, snd Ahm rh;FU piacbarq mt drrUvay of and pay fpr; Buc Elccujcity a dolivory ram not ucsediqg 115 MW and in caruidaotSon of psymmt of tk arnorarr &&ob un& section 7.2. Nothing in We Apwmm obligca Acnn rn pruchw, aoccgr delivery of or pay for alI a w p m of lfic Baeo ElcGniciry rwr tiJran by Mew.

4.1 1 Svbjm m ibe torspa of tkio Apcmcnt, commwrclng an rha Supply C - m Dot4 Md k a a f h durin~ &a Supply yerid, fbe h v i n c o will provide Alcm Wlh tha Supplunatary Bl&c:iry m firm up h e

gmcnuing capability of & Kmaar, Gcneratbq~ Slotion in a c c a d t i r ~ ~ wilh tbc tcrmn oE ohis stction 4 aad in c o p s k t i o r ~ of paymart of mt amorrat cbcrmiacd under sa:tian 7.3.

42 S e a A)crm &Uva ~r BC Hydro a wbawy ~ ~ b a t u l o 5howiryg its anWpsffad g m d m st tho Kcmarro OaRemting Sm~ian snd itar c~~=fusrat ~quirQnan~s for S~pplmonwsy ElccPicity bcru&md~, in & catk fo rW foilowing wak. aYWCh party shall dtsignats and identify to ths oact pBty a pmm crr p c ~ ~ m b l c fm &CJ dclivury and rnceipt ctf schcdulkg i a F i o a

4.3 Dbdmi#dan. The Dwigna##f %Wiu#ng Fibprwmt~&frn m.chrqe whoduling informtion for #a pqose uf ~ s p f i ~ ~ i x f a ~ !be cmbined wmthl orwput RRE' h e .. Systms in & C C O ~ ~ M wirh tormr set out in this d o n 4 ad Prudant Utility Pradwr.

4.4 Tbs DC!iigmcd ~cdu1iu.g RrpsemWvw h ~ v ? autharity to ma4 !his A ~ I W I T L ~ ~ or t~ dof&t atry ~ ~ ~ l t c r wbicb affk~Q fkc o m & i p of tither of me S y a m i or thzr rigbr ~f Ahan aaad BC E m # dl We6 ta laavo actW pE,y;;5rd conno1 and indqardwt porwuon o f tbcir -w S y a t ~

4.5 c. Eacbprly 00- to lave title to, md if& ad r~uuib i f i ty f o ~ , itB OWIL SYllfCIII, id tbo orhn pacry WMU~@~ no pp5ctnry inmag in, or risk or mpmibil .hy whalxwuvcrl: for, tbE otfia pw'u Synkm.

(a) ~ a n y k o u r c f b o P r o ~ i e n o t a b l i ~ ~ b E ~ a t ~ r p c a t t h a a 6 0 ~ ;

@) tkd pBLSim m y a~yct for co-ordindm prtrposcss m incruosc the B Z Z I B ~ ~ I of dcctricity lrbOvt tho 60 MW; wd

(c) duriq~ rbc coprrrc af my Y w th AOvirrca is not ~bVguc4 rp pmvide me% t i h i 60 AvMW, I= tbc amounr of clctn'dty geacrattd at cht Kaamo Gcfoeaati8g S t a m in acw- wfth section 4.7 that i s ia a ~ t s a of 780 AvMW, or wch ohm vdw ac is agree4 lboeweart OBe pa-tieo po zqmsmtstiw crf tha firm cqwhility 0f r h ~ -g

(a) makrr dl rcwnablc cffiuco ~ L I S Z thc thi~ o f i B $ramuon, and to p4iue its min~cUimc4 rchodulU8, b rtSpOW W ~ U W S f Im3 BC HyPm apd b o p ~ c Alw's S y m m ia B msrmr &a pmia q d m i z n t i a of the r~~ m n g owput of h e S y a m , r3L subjm TO rr;qnbuuw public d k y , flax3 mm1 BPd fi&ihbCjas pmtdGtion, ud t~ tho plavirious o f hloan's upplicoblc licenccza and pCmit8; 4

5.1 1 &am m y give rtra l?mvirzc not latu Lhm January 1,2007 nadco epccjfying a S ~ p g b ~ ~ ~ n r n ~ D#c that is mt mlia ~anuary 1,2003 not lam tbsa Janurrry 1,2010. a m m y g i ~ s dw & ~ ' h c e fbhz norice at any t ime or b m time lo d n c @ms&er p i f y i n g w c b @ e in tbe Supply C o m m m c n t Date to a dara is not m m than 90 days corliw m latPr hm the datc Snt spci6cd by &can pumant FO thig section 5.1. I f 41m givea noria spoclq.tng a Supply Coulmarcerncnt Date and c ~ a s r a u w wia.%.:c~mi ~f mt. New Smaitcr am.! Stat-Up of kbe M m Smeltw ic dclaycd dm solcly rn F m Majeim2 of whEh Aim givw prnnlpt notica po thQ Provkcs, @a !he Supply Cammcacaent Pare will be deferred to W axteat of thst dulay.

I 5.2 -:- A ~ W shdl & W h Eba S w i y Chwna;mai Dar; by i~-i ;6 . than 30 days' prior aon'cc w-~@c Pmvince, and aruch norice sball iacIWt Alcaa'a stimar~ or its srhduling requis~mcnts duriag initial aptfarian of the New Smrlrsr.

5.3 Eufv. Thirr Ager;unmr ts3minstcs wiFfi offcct b m J w w 1.2010 unless: " - , J - '

a ,,I.,

a ) SW--Up ~f tbc New Smdm W the S w & Corn-1m Data occurs on ar huh Jaatmy 1,20 10; or

, 3 -

@) Alcm baa wmpfi,gced c o m c f i v n o f thc New SmcItu no or bcforc January 1. 2007 and thawafter Sraet-Up o f rb Now Smelter frr dclaycd solely dut to PDXC Majcurc.

6.1 The Rcplsccmmt EIcmiciry dclivacd hcrFsundcr shall be detamincd and rcmrdcd for tho purpose of 'this Ag~mopt by wtm maatrig appmtus installed by BC Hydro at a point of mewing as & d w d by ?3C Hydro. AIcan 8hal.I provide BC Kydro wirh s ~ a a b l e scccir to irs promicm, ac B€ Hydrola awn riuk and cxpaac, for the i d h i a n and mainten- of h BC Hydro mutun BLad mat* qqxmus. AU m o w of ~Iccthiciv gcnaatcd at and flowing out o f rbt Kwnsae, G m m h g StsA'rm Wl ba d~tem%-d end mded f i the purponc of this Agraamcnt by rnm and motariag ~ppwtw # ~hg pinu o f maering located at chc Reraano Maation Staim. All wlountr o f cIcctriciv flowing inm wnd out ~f tht Kidmat Substation shall be detmnhui and mdCd fm tb pwpow of this. Agrccsnant by lnnna and metering spparstw tit the pin& of mewing at thaf subotatioa- M-mr, k t or indirerly, of rho kilovoIt-amp~cs, kilowatt bow or vthR $cwn or qurcntia'cs at the, rncrtcrs supplied by w h of the pirnib~ aM1k tbc r @ b i E ~ o f the porR'w supplying &ow rnnsrw

6.2 hfrtcrinn Thckdd& and G P ~ Xmpxflon Acr (Csmada), as revi~ed fram timv lo time imd rho ~ p i a f i ~ 1 1 6 m d c dleraunda du)U govern W rncrcriw camid QUE W ~ R rbls Agmmixlt. The psafioa ocbowlcdga that A3can a d BC Hydm may tm~, calibmc, rcmova and ohango thoir ~ e s p d v o nMurhg quipmernt ut my roawaablo tim~. Exh parry shall ba catiUcd rn havo a r w p ~ e ~ ~ v o pmml at any test or 4ibmion by the orha pirrty.

6.3 Meter If tho quipart w.pplicd by eitbar of tho pMics faildi to rcgisr~r comtly for any rrrrsorl m a &go arc w b W l e , tbc am ow^ of alcoDicIty

Ehall bc e$hiatcd by the pany mipcmibl~ fbr EUCb oquiprnrn f b n ~ IhQ besf informarion availabk and mch SWU, txcepc in !be csco of mPnjfo5t mr, #ball for bi- p u r p o s have h e w e fofcc xrtd cEar as en cxact meter Eacb o f the psrtiw will coapaatc with the othar in p v i d h g smw U, Wu metem rrd !&.ctc&S -8- for th: p r e d p d d c W a g of accur;tcy and rcli~W@.

7. PRICE

7: 1 The Bana Elffftifi~y PrW aid Suppimm~y Elwtrici~ Prim shall be Wrminad, and *p amount payable &aSP 'w d&* ki - witlr the pmvjeiw of 1Ms sacrion 7. ,.. .

I I.ME muftiplicd by tho A$plicnblc Fa~tar 1 4 . 4 S W t

Acan rrbaU pay tbc Province lk BUK E l d d t y d c l i v d ifl cach Mouth during rhc Supply Pcn'od an mDunr equal lo ?be B i w El- PSjw aulripLicd by Iht mount of Base F l e c q i ~ i ~ taken by NCILTL, r~pttSBtd in hWL

(a) If a m y h s attcr b d m o f Fbir Apxmun~ and Worn wiry pf ther Supply Paiod, an ElipbIo Solo fa cntuzd into, r b ~ Aovinca whPll givo prorapt notj~o 10

hlcm 6&8 OUt rka tsrmS

@) Wtrhin 60 Qys after doUvby of a mdco rtadar oubpimgnrph (a) above, Alum may givo mdw to tho Pz~viPca Wt Alclul Wi- to t u b dclivay of dccnicity undur thi6 Ageurncut on +tbP T w , and sMng out Akan's proposed Mzpteb Ta-ms.

(c) Wirhh 60 Bftcr mdpt by tJw Pmincc o f mucc urxk avbp8fagrpph (b), rhc Rovincc sMl give notice to Alcm of &a h W ' 8 p~pastd Adapted Tcnns, if and to tho ntmt Qffcrmt tiom thmc ~ c d by AIcan.

[d) The pPtcisp PbrZI nsgariuo pra#lptly, mswnably 4 iu p r d faith and mdavaur t o a $ p t u ~ ~ ) n A d O p t t d T m a R d ~ r o c M d c h ~ b ~ i t i n g i n a a s g r s e p l m c between t b p d c s d thaw A4justd T m ahPll qaly w tbc duIivmy and pmvldon of o l d c i t y undte thw AgmamF for tho rkffan'-on of &c Subdmtion Period- If she panim pre unable 8 g m u p *tad 'Trsnu wlthirlm uays after m i c e is @vua by the PmvincP r9 Nwn Undat rnbgiaagnrgh (c) above, a11 mnzmlvcd Jukptod Team Wilj bC dntcrrnincd by a pmm (tht %rpcn?) qpiatcd by wllittcn agrromant 'batwoan tbo partia, or E # I c p d s do not ao a ~ w i W 1 5 d r y i J k r n o d c s b y o a a p ~ ~ f i e a t h e 7 p f f ' s ~ y ~ b q w ~ r m c h

/ appiomrmt and noarlnaring R p a w n fur rbat purpose, tkm dx? E m will bo

appointad by r judgs of the Supfano CPW o f British Colrmbia upCm applicgdon of c i w party pmW rn tho ~ m m d Arhinqidn Rcr. as && b m t h e s rimc.

I (i) shall cBtabliah &um tbst the Expart corniden .naca~ary;

(ii) s b a a& pay q d aeaaamt oppQ~tunity h tho pmenrarion of irsr posiQoa sa m m w b rctsalvod; anb

I (iii) 8hslI &8 hin or her 4loWrmhn'os at Vsnmvvm Bdcfsh Columbia.

I (Q nc pmice shall:

(i) comply with r b ~ pmctdms tsFabliShcb by Fhc

(ii) boar kr equal pruportioarr %C fm nod axpsnrr~s~ of rhe Expuzt and o?hsnvk@ bcar tW own oxpanoclr incmd in relation to tbe cmblishmmr o f the Adaptsd T m

(g) A dotorinimfiun of Adapfad Tdnns by the E x p a t is bindiqg an tbc pIWb, nrctpt as othdtwiso provided in subprrra~ragh (i) blow.

(h) For g w e r casrainty b e pdarr B C ~ ~ I U W ~ Q ~ ~ Smd a p tht sw Adqtcd Tcrms wiU include, far rho benefit of the u m d b d ~ ~ a l n a o f the dhcaunm d ~ b o d in secuon 1.1 {d);

(i) Within 30 days nibr tho Bxg#t bar A-r#;t Terms and commuai& &at d m n a r i o n ia wn'm to bah pmica, A l c q by Pvrirrm notico to thc Fron'ncc, nzuy 910~f 10 r w o b j~ UILdOT s u b p m h (b) abovc, a d fnilin ddtvcry withirr bat 30 dry p(oriad ~f n nbtiw o f rcvocRtion, the Adqttd Tcnaa dctcaPined by the WT rrpply w tba dalfvary and. pmvision of oi&city wdcr skh Ap-B fbr Vko of the ~ ~ n t t i a n P a i d , U notice of rovdoa ia givcll as atbrmnid, hlle A&ptbd Ttrrar will not spply pad fhiu A p e m a t &PlJ cmiztue in fWI fm md c f k t in accardanco wifh b terms and conditiorr~ hmin

~ j ) If ~dapftd T a w are ngrood c~tabli&hcd in mrdrmcc with this S d o p 7,Z.Z b c f o ~ r9e carttmaRcammt of tln Sub&ituu.on Period, sIull mntinuo to pafbrm thpis wp#iva abH04flm wdcr this Agmmm in wcordaaco witk the termd ad mnditiolllr hqcin sot uut wtil a o Mqgod T m am so agroad or csublisbad, whamupon tko A&pW Tcrmg will ba applj~d ~ a c t i v d y fbc boginrrizly o f tho Ssbadartion Pcric>d th4 pard- Wl I& whatever I s d j ~ u a ~ am noc- WOWZ than tP give c#Fst thmto. h y such djusan~nu Ehall be incIuded in a d farm put of rhe lidaptad T eemg.

(It) Upcu cxpiry of tiao Substmrtia Period, and pron'dcd tb Supply Pcriod ia continuing, tho p d e s Wl mthuc; to paform their obligativns unda this Agrccmcat in wcmiimca with tha WEIS and conditions fic;rcin wt out.

7-2.3 7 FDT tbc purpPsa of d-g tbrj LMle Price, a daily quoted psis expressed ia U.S. dolkml wtil be C O R Y ~ to CIxakdian doUeR iu ube rare of exchange quoted by &c Bank tor spmo tho dry BI. the &y fix which the price ia qu0rn or if that day i s nor a Business Pay, rhm fm the next f~fbzwiqBusincsa Dw.

Alcan shaIl pay the Pfb~incu for S y p p ~ m m w ~ W r i c l ~ y d d g he Supply Pixiod tha sum of CAD 375,W p-Mtai*&

8.1 Aa w n a.6 p z m k b l n folIowiag x b hn day of PPCb Man* rhc Mviwr shaU scncf Am aa invoice Emiag CWT tbrr adl~W pay&Ie to the hvirrcl: by Alcan for Replacuu~nt Elaaiciry undcr this A.paacnt duMg tbe ilmnsdistcly prccding Month. On or before the 2Qlh day of rha ncrrr fafbwing Month (m if $lor day ir not a Bwhcris my, rhmz an rhe Busintss Day next following that day}, Alw a h a pay b hvince tht omow sct our in sucb invoice. Paymcnr shall bc made in full wiwnt s c t 4 or wimhaldin& except as q r ~ s l y pmvidcd in this Agnxmcnt or aqpcd jaWTiTb3.g buW@an the putk

8.2 If N~tcap ditiputm sll or any part o f aa ismica, A l w &all pay rho m r i ~ ~ kvoico in W1. on f)ro paymoat dato spa;ifiad in #%dm 8.1, togorbur with notica o f dispute, iacluding teamnabla psrticulanr. If k ia da&Cd urbsoquady by apumcnt or arbitmion hoFsuads Lhat 41 ar pan of ihe hvctice wat aot thsn dno, the Pr i rVfwx rholl pay AIcan i n m a (hsPon pt B w o per axmwa eqrral to tha Prirslo Rpso phrr 2% dculoted &i3y end compounded mnWy, fmm the dats of paymeat to tka dare an wMch paysnant ww pmpcrly due ar tbe dote on which any overpapm~ is wpdcl to A l w , whiawot i s oarli w.

8.3 BI pmmw by AIcrul for Rqlrrcoprcat Elffpjciv shall bc m d a in CPmadian & U r n af par to SI offiM or of WJ Fi~Vincq the h.rincc may direcr, at Vanwuum, British Columbia;

8.4 Lfaaypaymrarrrequimdbbsdby PcCcan-ismt paid whcn due, AIcan shall pay to the P m d io-f r b ~ n at a n W pet mum equal to the Prirnc Ram plrrs 2%, ~?lcul ir tal daily wd w m p o ~ monthly, fiom rhea dvrc dak o f paymcar WUJ paymms 53 mae.

8.5 TIIP1. The B w EI~ctficiry Prim nnd tkn S ~ p p l a n q r WacRicrry mce exprcdsad hmdn uxcluivc o f all qplicablc fodcrsl BIvl pvizx5.d snles and trxci~ csx~s, & AIw ahall pay dl such raxw In awrdanw witb ipphcablu kmr time to time.

9.1 cithcr pazly is prwenrod, hitdared or dcdayad in Emrfamring any obligr>sion mdu tbio Apumont by the of BFC mfmf af Fmce MFtjnrzr,

paf~mance by that pprmy of rwh oblipsion W bc cxnrobj ro rho am! that it is ia p m a t d . , hinderad or delay& uutil such w e h a brrn m v o d ut ovcrcornc.

9.2 w. A party atwed under tbis aatioa 9 &m porffrrmw of say obligation, or rcaroaably auzrkipatizq thar ir will be w EXC@ shdt giw notice to dwl Facct p m ~ ~ I y to the otber party.

9.3 m. A parry p~evcace4, Wurcd or delayed sh#l make teasonablc efforts to rmisvt or overcome rhe cause of tiat pyr=~a6~& iPiadraaec BP dolay @s sam w is pdcab!e . N o w crrataincd h rbiu ~gmmmt raq- a party im acttlc my ~tdIcd, Iock..our; QF labour ~ ~ S X ) U T C in whlch ir may be involved or to accept my p d t , lic8zrc-e, ccnaact or authorization iiEa-i fa @e jxdcnne~lca of L&B aratainhg a d cccui&iona which 8 party dcrcrmincs, in its good faith d judgcmmt, aro rmacctpsable TO i~

10. I e. If Alcw fids w pay as m w t a w d d (a Zhe Province by way of a h a 1 and binding award ia an srbimcdlln hamrmck, or by way of a final judgment of a cow of cwaperear jruindicticm, in c i t h a cw h ~t of which olJ rigs ~f appeal bvc bccn exercised BnP cxbawCg or the t I m ~ fir dOhg so hBd c~pW aud that fail- coatinucrr for a period of nor less rhan 90 day8 aflbr wrim noucc t k w f Sr; @vm by rbo I?rovincc to Ncm, thm

Provirrcc, without prcjudiw to, or nsoicring tb6 o x d ~ of, my odcr right or m e d y available to tho Pmuinto in wect o f rhru fiilurr, ar my drne WWtcv fiw w lung as h c fajlure continues, may, an mirot lcirs rbon 5 &ya prior written noti* mcpund thC dtLivmy md pravirjon of R c p l m a t BIecViciw hm~llPQer, or, whcthcr or nof it hw f7m so mrepnsdcd such dolivery and proviaion of Replacerrrat Eicr;aidry, -aa~a tlrk Agwnmt by wrin~l mcica to Alcan.

10.2 DefiPlt tbe Province faiLO to daliva and p v i d e Replaomcar EIau-icity in breach of this AgttcnrcnL tSm cxcmpl to tb c m ~ d or wntributalfo by AlCan's failurr: ro aswise all nwnablc meawrrPrs ro m i m a i ts Jos aald damage, d c a a m y rccuvcr fFom tho Provf~cc fJm f o U o m Iosa and d.funaga Md at incurred by AIcm ~s a mult of rha k w h :

(a) dftmaLIa to, DT low W dmUu~bn RZ tf~@blo grogcrrlr forming p a of rhc Srnclm$ Faciliucn;

(b) thc krcrnnmtal WSF to Alcm o f obtahing eIwlricity m r r p k tf3c Rcplsccmmt Elcctriciv tfiat tho Pmvinw f8ih tO deliver m p v i d s hmmdac and

(c) the mJ cost co Alw of bst: p d ~ * ~ m 3t the Smdbg Pacilinm Icss rho avoided msw of psduGtjon thorwf.

Alcan will giva rha Province accMs to, d a rea6-l~ 0ppwRmily W audit.rilam's m r d a of the tbrcgoiag Ioss and darrr8ga.

10.3 0. Tblrd paty (b thia swtion 10.3 call4 tho *r'nddtor1') &ohrJl incionrnifY and hbld bmnlw Fho orharpmy, iu eclphyeca and agents (in tbig s g t i ~ 10,3 caIIod ~ i l ~ l i v e l y lb ' ' h k n n i ~ " ) f a UU clnirrls, draFuznds, scticms, caum of adan, mils, and piwWqt brought zgoiast Wn#faxitct by my W pawn fbt damaga for

panrand injury or P ~ ~ P C F ~ Y diimugc; c#Med by the mg~caat 64 or oarhim aft cr bmwh of We ~&seemwt by, tht innhnnimr, irs mplalrba, m rgmp W e ia, on or abo~n the prabws of chc iademnit6c uadw or in mfgdon to this Apwmdl~

10.4 4. 0xcopt Wy ns prodded in scctim 8-2 but o t f m v i ~ aorwiWmding my othar pmvbi~11 of tl.tia Ap-?an6fft, n d k pasty is Wls m rh6 other party, in cantract, tart (imludbg but no4 Mted t~ wgmw) oz WI&K ury otbe rhtary of lawa lmdat eb in mWm to tbh A g z v ~ ~ ~ t fk way IPW of prodPC* F W ~ ~ U B , pfit, mprLct ar oppcrtwity, or pi& puniri~q b%mt& hdkcl 0s cc;ars6%awtirl danap d i or inc& by the othcrparrr. . * 1 u,S - - = r -, B m t gi -$& h d ~ pwk!@ c~p-mdy, far my b m b or rn lnp- mouUIo of dUlla@ b Pg:.jod haroin, thrrt mpm d y ar m8aswm o f &l#gW h tho # d o rad QL&VB r ~ m d y or mcasurc af dm- applioabks to that b z ~ ~ 9 at doWt, rod dl athw m d w or m a at law cn in quity am waivad wprcmly by w h patry in rPspaef of thof M or ddmR

11.1 -. Subject to sbFtion 113, dl ilIaputar out of OZ ia axmcaian mlefy with this A p m o n t WJ be p$?nud to md rwa1vbQ by afbitdon ~ t r a d by rhs Bridh Columbia I # a d d Ccmmucid Arbitz8li9n Cartm pumraat ta i t8 h l w . Thc numbs of arbluu~om io tbnm Tbe pkca of srbiMon ir V ~ W Y C T , Britirla Colmbir.

11.2 1- J f B t PI h e t Wtpr* PriEIu?, the BtitiRh Calmbin I r t d o P a l Cornmcr~M Arbitdon Caatre: nr a RICCOIKlf, &a wt exist, or iw Rules do mt pmvidc fbr adarinirm iAt,i&m tb4 diqW WW bo rdkmd ra Pnd finally r s o l v 4 by a b i ~ ~ d o a unr%r tho C o ~ c @ l A r b W o ~ Act, M awW from I ~ W m rims. nK numbur of arbimton i s chrrsa sRd rhc place o f arbimim Is V-mI BlirirR Colmbk.

11.3 T& lal. oftho p d w to whim d . t ~ C k l AQF PIWWI~ O P@QP m u & ' t d ~ w d a ~ ~ h h b 6 f ~ any cow o f j on fbr tho purpora only of obtpiaiag mliof or c n f i h ~ my arbit4 msnL

To tho Pmvincc:

a c p u ~ Auarrrsy W 1001 Doufjla8 S t r h Vicma, Britirrh Coturnbirr VSV 1 X4

and to:

Britigh Columbia Hydra and Powa AWbrity 333 l3lmlluir S u m Vapcouvcr, Brld& Colrmrbia V6B SR3 Atlernd~n: Gttneral Counsel

or to such orka a d d r o ~ a m y br givm by ndcb a6 masid by tha partic* p w , Pacl will ba deemed FO h v o been givm on the dntc of delivary.

12.2 -. This Apun#aRr wilJ be govarnod by and ~nstrutd in accnmce witb tbe applicable law of C#liu?a and of rbcr A n d of Bdtioh 13lumbim.

12.3 -. Fqr rbe: pmpooo of d o n 11.3, tho 09rrrP ~f Zbo RvvirrEc of British Colmbiq and coum €o which my ba hive m u ~ x c l ~ v e jMdcTian in rwsptc:t of my @Xion, d o i ~ 8 out o f QI rrlafiaS bo thia ~ p a e n r , and ihc panim kmvocrbly unconditionally ro fht j~uisdicrion o f rhssc c o w in rrspco~ of any such rum, suit or procd@.

12.4.1 Tbis Agronzlant m8y not be? asaimcd by ci@m p w wirho~rt tbo prior wn'nan consat of &hm other pruty, w o aad exc~pt b t thia Agrmaffo may be ui3sQpsd, on node, but withclut mmont;

@) by AIM to a l~ndsr w Irmdcus by w8Y of sGcltrity TO ww f i a . d ~ P b M for tha pwpo~e of the ca~uraueti~n d qxmtiop of b New Smelru; a d

- JUL-=I 997 21 ; ;?s man LRRSRDUJE

(c) by Alcan to my pmon or pmon~ w h scquirc fiom Nc;= all or a pm of ihe Smelting FsriIitia.

12.4.2 The right of dtha pany ro asaip tbis A p m a with coasmt ar on noticc only os provikd in sccdou 12.4,l is aubjw to thc caartition that tbe assirnee, concwantly with x h ~signmmt, shall have entered im sn wifi tkF nan-aad&-, puny, in form and subaance acceprriblc TCI fhs ixri-assigning party, acting d l y , rtndcr which thc assignee ageos 10 bc~omo a parry to md bound by Wr

12.4.3 No ossigammt to rt hip ~ & ? V C B wzlignkg paly of its liabiliry for me pnfbrmance and obsavanca af its obligstiana knwndar by it and by the Pcnaind A~stpczt; d c s s oihenvZ6c ~.xpreseIy agreed in w7iw by m-assigning parry.

12.5 SrvvrbillfY. I f any pm of This ~~IEUMU u dcclsrrQ or held invdid for any rcaeon, tkat inddity dos;s not &W 6 s Widity of thC r c t m h d ~ wbjch ccsarlnras ha ftll farce and effm nnd must be co~awed as if WE bad bottl axo~uf~;d wirhaU tho inidid portion and it iti hmby declared, tbc bmf ion o f tho p a n i ~ 8 tbat this ~~ would bavc bccn sxccutai wirhout mfamsu to apy prfim ~h.ir;b my, fbr my rca9on, be b m d u declared or held mvalid.

12.6 m. No wdvcr af my provisim of Vlio Agrsanml is cPforceablc, wlw in and no mch waiver will ba dwead b, or wiU, mnstima a wtivar of any o&cr provitrion of this Agmmcaf, wr will ~ r ) ' such wd~cr CQIJ~UW a ~ ~ n l j D u b g w a i v e unless otheNYisc oxpmsly provided t f i e

12.7 -. E+ pwtyarryvY do dl rhingr ~csccgsray, withia it8 IswfUl capacity. dirtctly and I n W y , FhtPugh 1t.a 8ubnck~6lr, agaru d ropmtativas, validara, d o ef&r.ive arid give fuU fom snd afffft fo thia Agrmcmt, and to impllcoscnt the wnsacdops wnremplarad by this Agroamcnr. Tbe fmnipa d m aot q i i r u tho Arrviacc to do anything that would have fhc tffbct o f fotrcring any W t a r y power.

12.8 1- AnplIElblr pEefh, in ptsribrrciin(Z their ob6gations under t h i ~ Apemen& &all comply with dl gppficablc lsws afePlo Pr0viwc.e af British CoIwbla Emd the laws of Coa& applicable th&.

12.9 -Alcrn ObHPrrdwr.0- in tkl8 Apznml raUorcr Alcaa of my obligation tbat it may now or hansftu b y 0 undm any &&puma ar law binding upon Ncm ta deliver tlataicity to, or a&&& &t BC Hydro ia c;msgcnsy cimmmsrrcos.

12.1 1 &U~&WDW -cut i s fha uxtira a.grwwa5 bcrwear the parrim nlariva to the subjact mans Reowf.

12.22 -. Thio ~grossmcat may bu amd4 only by oa imummt in writing signed by the partien.

Br- --

JU-i19-1997 51:25 FROM LRIXfiPDW

Witma: aER MA,?IS'ZIT THE Qm RIGH3' OF THE P ~ ~ C E 018 BRITISH C O L W U I , a8 mpv=utcd by

Sigmtm oflSdwmioar,lQriItr~l[toi&ag

PaKiES: British Colmblu Hydm aad Power Authority ('%C Hydro") arkd AIcan Aluminium Lbxdted C'A.km3

Reference: brig-Tnm Elccuicity hxhaao Agmmcat made no of Fcbrwuy 27, 1990 ("AglI3€ummt1')

1. Drnai$ona. Worda aad pbraesa defined in the Ag~csmmt a d uscd in Cbis Memorandurn havc rhe rncmbqp givua m A-CILF, d t r b ~thc rw i l l ~ dcf ind hemin. 'TJ9n.h Coast Inrcrconncct" mcana a poinr o f Wvay oa BC Hydro'e 8yott;ll tbor ir mum or west of its Slcebna cubrnon, ar trarrmrissicua v o l e ( ~ V O 691sV), iaclvilbg Alcan'a K i t h bubar. "COB" means tIro Wfomin O r o ~ p ~ p h r c k (COB) I a t e a ~ ~ ~ + boiag tt poim on &a intcn;onnccttd mmmission wtwm k rJbe UPil.4 !%M where the bigh valtaqpe GC trimsmiaaion l j ~ ~ w of thc Pacific Northwm i n r m t c c wirh thosa o f Ca l l fda at the C M a - Oregon fiodurv

2. -. Punwt to HOII 16.1 o f rho Agrclcmunt, rhc paniec; canfirm that the Effwdve Date of &e A.gmmwt is 1,1995, and that 131c Agreement i s in fir11 force and effect in accardnaca witb ifs tams rud wndilioas. EaEb puny wiU abide by thc Agreement, inchding ?hi6 Mrmornndrun.

3- - PWWII~ to d o g 6 pf rfia Agrclotnmt, sha pmim aJ;aowfcdge snd agrw chnt o f haa WfiUod its m p x i v u obIi,gatioas u n d a the Agemaat to and hclYding D - h 31,1996. lb partha APthu ~EmawIcdp and a g ~ s thRt:

N--29-3397 21: 26 FROM UrlBGMXUI.6 TO "" 17b

1.1 ltre o m o w o i elemicily required to b phrrsod il mrcld u m h rho A w m r during 1997 is 140 A m and

1.2 t3M ~rm)wt of A d c i t y required tn be purhmd and sold idrr che Agmmenx @XR .nd .fta Jaaerry 1.1998 fir the t b c g rum of dm Agr~mmt iir 307 AvMW, oubftctro r h c x w c i o a a f n e a U f i ~ ~ a .

of . Pwnroat ta mtion 4 o f tho Agrcamh A l a by h r t q 2

:&ice ~=C;YBR~~WO 0x1 or bofam SsptmM 30.1997. m&y OIst ID -0 ths Polat of Dolivmy l m d a r b o &mema w fhP( 08mtiv~ lanurry 1,1998 167 AvMW i~ C H v d DT COB. This righf my be exsrcud o w e oaly and upoa m.n5sc, ir mwoFabk. u d a i BC Hydro snd Aican atborwjia 8piw ;+s;i;?;,tio;;.

5. 5 I m M W ~ ~ o n 4 d t h o A ~ a n ~ B C H ~ will consent t~ an arraagrrarw ~M~~ 167 lmangunam") u d a which 167 AvMW of olecuiciry r o q W TO be wId irn4 &lived by AJwn wdo lhe framing porx af its t d obligation of 307 A Y W , my. .t the q w e Q f of by mother paron rA.ltac~t 167 S u p p l i d ' ) to BE Hydm .t rriW COB or the Nmth Ceur &Wfamzect. subject to tho foIlowing wadidom:

1.1 Alan shall prep= a lirt of qualified and m b b k pmporod A~torrwrrc 167 Suppliers Zor mvim wltR srrd sppmvd by, fK1 Hydm md 31C Hyh wiLl nor w-abh. wirhhold, or dcby by rams rhoa 5 bwlnai days, b appmvaf of any propod AlVmsto 167 S U ~ ~ U W

2 t b o P U t ~ ~ 1 6 7 S u p p l i n t w i f l ~ a ~ o n l ~ b y A l r ~ h m ~ ~ o n ~ list agpn.3~4 undra Mbpnra~tsph (a);

1 rhc Al~anaatO 167 &mngansrrt m y ba mada w i t . oo more 2k-m one &hmuc J 67 Supplieo, ualcss o t h M s a p e d b e a t BC and Mean;

1 .S if requ8arod by BC Hydro, b A 2 W 167 Supplier Wl BFSC in writiag wirb BC Hydro to be bound by the Agccrna, rubjm tr, a4urftnsack &&bad in section 7;

1,6 mNb'imWg the AImwtc 167 - ~ G ' ~ c u B2 HydtO axcrcfau its right uar&r mbpmgqb Ch) blow, 4.km.W mntirmc E:, be liable far the frill &proper OW- ~~~~ hm nnd a h n ~ c r r dam onwhicb the

167 Armgmm1 wkclo clfoM of all tho ob#guicrpo of Alcm md the ~lm 167 Suppllar w x k k AgwmW, iac;1udirrg t b ~ Al- 167 AXmngomat;

1.7 &can shall giM BC Hydro aot la# tba 30 days prior m'uon nsW of Aim's intant to into the AltamaFe 167 Armqcuwh frrcW.iq iduuifiwtio~ o f f i ~

propod A ] ~ u ~ w 167 Sppplior and all tarma and oon4idols of the pmp~aed A1 tamato 1 67 mmaftt;

1.8 BC Hydra, by wrim notice ta Alan given WWII 39 dayt afmmipt of notice h Akpn uadm (@ #MY@, Rlry 8kZ Fb TQ~W h U@U of AI~cmatc: 167 rbar Alcm's obligsdm to roU rPxd dulivc~. ;zed BC Hydro's abligatima fo prckam ad pay fbrI 307 AvMW of c;lcctricity &cr rhc A g r a a n m ~ m u u l a f b r t & e d a $ e o f ~ b c ~ ~ t h E A l ~ 167 Amngemcmf is W#U& by an pnotrPt aqunI SO 167 A v W ia ~&d@orr af dae p a y m ~ , a n ~ s s r i r h a ~ m a p p ~ t o ~ e ~ ~ 1 6 7 h n a a g ~ b b y B @ H y ~ t a A l c P r r d ~ ~ u n t ~ m $ r D ~ a u t b i t t w o w l d h a v o l x r o n ..m,.aLIe bv f& PJ-• J - ~ 7 ~ ~ 367 mlkr rn A~XB u n d ~ tbs GItan~rto I67 Armgumcat, pIw CAD $100,000 to be opplid ta aaqmm~ and rcdmbwra Altarwe 167 SumW in rcspat pf CWU immui by jt in whim ?o tha bidding, ao~otiption snd rarJcspent of thG AliuraW 167

6, c. ~ P I P a P r n t 4 r a t i o a f o f & ~ B C H y b ~ n . & t & ~ i t f l c U I % U U t t o ~ u n m g ~ c a t ( " ~ b m & ~ 1#-UDdQtwhichh PoinF o f Dotivary of 140 AvMW af olachi~ity r e q W to be w1d d - e c r s d by Ncnn under tho ~ m m t . forming p a t of is tokcl pbliptbn of307 A v W , wiU be chosgcd to COB uud ruppriod by anom ~#rwra ("A]- I40 sappm Fo &~b rrt CCB dUriag a period wmmsacfns on r data r140 hue'') wpiiilld by Alauu, lm not earlier IIXUI J a n w I, 2003, and ~ g D t c d m b a t 3 1 , 2 0 1 4 , oubftct to F R o b ~ ~ t i o n a :

1.1 Alcaa ahlIprppmJ 8 list ofqudi fk i rPd mud314 pmpcd Al-0 14-0 Suppliuu for mi- with, d rppoavsl by, BC Wybn, md BC Hymb will not muwonably witbbld or delay by rtua 5 buriRou dryr tbo rpprovd o f aay p m p d f u m 140 S ~ p p ~ ;

I ,J lU~aawill$v~BCH~ocogryofbrwi[rreo?fooM&,631sl~pz;derwpr of aay bid dd cbPt Akm intanda to Wqt; -

1.4 rber raqucst fir bids will r#luim thnf, if ~cqwntd by BC Hydm, rhc succsasftl biddcr MI qpw i.a Mtiq wfth BC F[rrOro to bo bound 'by tbt r " l g m a ~ subjm w adj- dtsirod iR wGtiaa 7;

ii) ~ t ~ b i d , m d ~ i f y b r l l t h p b i d S b r r C A l c g a i l U m x i ~ t ~ ~ ~ ;

1.6 if Alcss gives aatico o f irs irrsat a mjjoct dl bidr ~ v c d , rhar Alcta &dl continua to =I1 lEICi &liver3 BC Hych chall crratinuc to p u r c W snd pay for, 140 AvMW of elcctrki~ t t h Narih Corot folimmm~

1.7 if At;llll givm muco of Itr b?m m a=upt Q 64, tbm BC HyQtcr, by wrium notice ta Ncm, g i m prithb 30 d#yr d k RW$ of mtiw from AJEQZS, uw elwt to raquir. W d c r a &cUne L o bid OUI it iD~ ldr fn gtapg in whicb c u e Alcan'u abligstion IU IQU md duliwz, +ad BC Hyb'r &~&~ISPCI to p b md p y far ~ 1 ~ c i s y uQda thu Aqcmmaot imm rrad dkr 140 V c n ~ Dats ia t o d u d by t~ rmorxat cqaol to 140 AvMW of ~1&cfw and BC Hydro s b s Z I p ~ ~ f 0 A I ~ t h O 1 ~ ~ ~ f b 8 t w a u l d h w a b b o n p a y a b k r r o A I h ~ bythe riwaiifi Sic?&, smxdhg to W tmm of pay~iunt th3 would have baan qtplicrrb3a to irs bid, plw Cnz)Slo0,0oo to bo qrplicd to cum- rpd -burst rho WWXYM# biddcr in reopgct nf corp izrmrmt by i t irr zcluion t~ Dlading on rhu 140 ~~

1.8 notwjtbrtpadiag rray A1tmW.0 140 Wee0 BC Hydro acrcireti its right under eubp913mIs (@ nbom Alcrrr PbolI cadme to b liable fix thc fbll and propor obcmmct wd pcr fbwm fhw~ Oftet tbs &IS on which the AItonratb 140 Axrmgcans;at thsf WM ufbx of pll the abliptians of Alc.m and Fha A~tmwito 140 Sym,?isr rradar rbd Agr#lmmt, &cldq: the fitana?a 140 - F t .

1.8.2 rhe comblzld f o d &tor of tbr mfal a a m ~ t ar" alocmsiry auppticd unda tbc A %rc my- sndbbilbRd[Of%r my sacsJJ rim M uCCDj8cd uwb mtim 5.4 a f tfid Agre~~nmt. will be 95*%, as pmvidcd fix in m o a 3.22 of r$c Agmmalv,

1.8.3 tho rckduling pviutm u a d ~ 6 of .$la Aglc~pca d l rpply DJ any NtcsnUa kmngumg

1.8.4 tho waco mtal ]pmvldar~ tmder 9.1 of h e Apmumt will not rpply t~ way cklricity mpp1it-d uniicc m Altanu~tc Wcmtaat, or tp my electrkity pudwxf by Am fmrn my thini party fPr supply undue tb AgmsPaG

8, BC Hvdro~u~~anlr~rmtom 15.1 o f t h o ~ m r m ~ ~ c o ~ i u c m m t o m y u u ~ byBCHydmtaamkpumlusaoflhc~t8 ofBCHydmm purcbsar, md pay tbr dtctrkity, if my, w br d p g d 8.t COB, pmvidori tbrPF BC Hydm givw ~IcaaOOti~~thmf8tld~~10&3161~d~&m=PPd@-&m 6 n d a A 4 f t h o d r r e o u W h i ~ b ~ ~ ~ t ~ o ~ t o f a l f t h o & l i ~ 1 u o f B C R ~ s n d ~ c assi~W~rbcAlpenaoat.

g. -. i+amiuU fa 16.1 of tho .4&mmw eac& pmy -11 wopaaw with y h V&B Cid pmmptly Wm dl -W tlzfhw uth rad do a l l W War things, includiq mnlemcnz of- pmbim, W balea~##csay pmi;t,?a p o r f ~ m m kcntof.

By: By: ., [Offie] *, C ~ W I

l?ds Agmznsrf d c the day o f July. 1997,

AND:

C.AIcm")

OF THX SECOND PART

A. hrre;uanc m rho I , h . i p l DBvgiopment Ad, RS.B.C.tM, c.220, (cko ''Act'') md Order in Couacil No. 2883 &rod bar 29, 1950 mods W tho rturh~ry af the Act, the Pmvince ~ l l t u d into an with AI- drtrtd D-bsF 29, 1950 (h "1950 A ~ m t ' " ) ~ t to whicb the bw gmltd to Akrn axlain rim iRchLdiing wifhoul bmication tbcsc righu reptarcnttd $Y Cmdirid Wgts L i c a ~ ~ u NO. 19847 and T ro Qccupy Cmwn hmb No. 3449 borb darcd D m b u 29, 1950 K, dwclop ihF h ~ c l c m i c pwur po&aI of tho Ntchalco arid tbE Nmib Rim m Bririqb C o l d i o ;

B. Pmmt ro an agpcarncsn, rbb "1987 Softl8nmt Agcuntut" djrb-i Scptcmkr 14, 1 98 7 bctwban Alcm, the Provinca and 8c~ M4w thO in Sght of Canada (tbe 'Fcdd Cmwn") Alcan ra abandon in p a l rights graatd w& the 1950 A;-art, inwr wlisr, in d a LO pmroct #M m k c y b and chlnnok sa41un in tbu NOQhalcO ad Nmikt~ Rivm and ro faijitaw thc apancrion of pcmummt innwtrierr in Bridrh Caluprbia;

C. l'ursmt 1~ mdon 2 o f thu Act arrd O c d ~ - h I C o ~ l No. 2572 dored Dacss~lbfn 24, 1987, tbc 1950 Apmvmt wu sUPQRdod by WI qmnmt dad Dwcrnkr 29, 1987 (rhc " 1987 Am&c~t''), bmw the Provko and Alan;

B. 7316 paw info of this Agnzcm~~t by tho R- and tho 6xeeudoa of rhe name by ihb reapomble Miaigtcr has bcca duly autbrizDd by CMa-#u-Councfl No. - daM

,1997,

NOW TEEREFORE THE AQREEMBNT WTNESSBS 'THAT Jrr conridai~ion o f cha prsarieaa and the ~bvemmb md agmmantr harmer M f d (sbA mdpt and d c i m c y of wscb is hnoby wknow~odgod), the Aovkw pnd Ncm W ~ b y cavaaoat saP a p e ps follows:

(a) "1987 Sanlarnmr Apcmml" m m a IM ~~ fnro bcnwm A ~ z I , tho Falad Crown sad tbb h v h m ctatod Sg,md= 14,1987;

(b) "&mm Completion Pmject" m w thO Wokl llRd propodad Wow ocnvpriscd in tho bydTPelemc prpje~t wiuh lhatS&ISlB, bl0W:

(i) t h ~ p l w , deEccSpdonr wnP oths docurnonu prtahbg to COW- of ChRt bYdTOSI~c pjaf that am 61td witb the AoviwEu by or on behalf of luu ix d

(c) Wcchako RiYd' mtuur ths N e o m R i v e in British Cdmbia d L.rcludcs pI1 sourrnslladloLcrm'b~rbatto;

(d) "Woskg" m a w ''WorLa" d e W ia 1950 Agree;mfint, ra ameadsd by ibe 1987 A ~ U X ~ C R L

(a) b e rights under tb6 An paNed by fbc Pfcrvhw to Alcnn iu tho f h p m p p h of d o n 1 of * 1950 A$mmsmt, ~i rrawdd by thcr 1987 Aar-t, khrdiag thw rights rqvcsmd by tbc Cod~a Wptts L i m NO. 19847 and Pnmi? t o O c E u p y C r o w a ~ N o . W 9 r r r c r ~ ~ P u o k t b a t A J ~ s h a l I b entitled ro nom and ~o ubo by d i w o n ot otharwlw ady #ore watm W to occupy only Wre Cmwn kid& idantiffod o ~ d . dacdxd in F W Ware L ~ C W ~ WCI m~~19d ~nmir oppondod WI l301~0f~ swrer~ "A" and 'ZI", on thc tsans pld cunditiw pwVidd bmtb and in tbcr 1950 ~grwrrrat%urrrnrmdd~thalM7Amcsndarartdbyfhir~cpt;

(b) t b o A o v i a c s m d N ~ ~ ~ ~ W L b ~ P i D J W ~ L I C d O C P t ~ b c i o r u # l p r z n w o a r to sccdrm 2 of rha L950 Agnmoat, pr rmandcd by tho 1987 hmcadrnmt IQB by this Agreanmt, will ba togarhor with tbs Amen&! P d t In ~c fbrmr; a f f a c h a d a n t k e 4 s t t r o t ~ d o n o f ~ s ~ t M t a d o f ~ o ~ ~ 3 1 , 1999;

(c) t h s P r o ~ ~ y u r ~ r b e ~ S b l # M E a i r t c r t o f p ; n r a r i a d c r b k c t r h o P i d 'Wafs Licrncd and Amdcd Panait to Ucan in tho uk~chod W; r&aQ

(d) rhc Pr0vi.w~ and Alc~n qmc tbot tho wa tbr w m carrr- ond ptrpliJ1y cowwcd ao part o f tho K m C o T l I p ~ ~ Fmjscr: rcntain WPrlco far the purposes UP-* lOZO 44&i-c554 u mead& ~3 !9%? A p e m a sad by abir Agrmmcat and wiU ouly be wed Ip r mawam c&-I rbe Fiaai Warn Licoam.

3.1 Tbe hviacc and Alan u p s that the &bta idmtifjc4 in aa F W W w L i w trpCUiORt tbt W cxtart of tho watw n'ghti gntntcd b AJcan rmQor the 1950 Ag;roema#, as m a a d d by the 1987 Apemmt and by thia Aptanem.

3 2 AJcm q p c a Uia? it shall obscm and comply with tko Wwm iarposcd by th's Agrwmau. aaQ. fbr p a ? a K#~~SY, the F W W w Liwiw md rb8 Amend& PGamir upon 8ny righ(s d c r the Wu#wAct ES3.C. 1948, C.361, whfch W e beat MO f d un Alcan pursuant to tho 3 950 Apmort , u rmaada

4.1 If my proviidon of' rbir -cat ia hvdd Or undbx+ablo, m=h pruridozs bc ~ d 1 6 sad tho m a of this A p m u a , iad tho 1950 Agrwmcsrr, rn mcded by the 1987 Ammdanent, and all r@R a f Alcon pntod prmmt fhlm Shall m d n in fW force md sfFecr.

4.2 This Agrtamernr mads @n 2940 Agcumarrt, ad ~~mmxlad by iha 198'7 Amcntbucat, and Sris Agrcnrrmr aad rhc 1950 Agramcrrf, as mcardcd by the 1987 ~ z n - a t , h c n c c f ~ be d toSnfircr uztd haw cffnct nr ?b6@ dl the prvvitionr ia tho i95O Qramt~f, aa mmhd by tbc 1987 Amwdmmt und by thir Agmauzmt were niuraris mrrrandk, iR OM b a t . h prddlf, a re- b tZln 1950 Agr~ament, u arneadcd by rhd 1987 h.wadumt, to W m tbo Panuit or to the mwed Lic~mtotblr~adsdP#zni~obaUbrrddmbaflsfCD6J3r=8mtb6~iaal~u~ ~ i c c 2 l c a a r I b c A m c P d c d P d ~ a r b ~ a m a y b s ~ h ~ .

4.4 The ~ m v i n ~ b end Alw cach hemby rw and d m tha ~orarsr caditima af thc

19~0ngrsaaab,uuxncokdb~ 1 9 8 7 A r n ~ e n 9 U d b y ~ ~ l ~ ~ . I d ~ to whamcr furlbst sup8 ao nmmry k ode o @v@ fldl $me ad effsst to tbc 1950 Agmmmt, as lmeadrd by Oe L987 AmsSdmoDt d by Sir m e n $ lad to

H E R ~ T s r ~ ~ p t R I G H T O F THB PROVINCE OF BRIRSH C Q L W L A

. .

PIN& WATER WmNC&

ALUMEMUM of MbntmJ, P.Q., i i bestby d- ra ~tora, divert and we watar and to consftuct, mainwin and op- wrkr u fblkmw:

(a) ?Ihc solourcur 05 waicr 4uppIy me *W ?T~&&D Evpr bbvs &?A Ckayan a d all the SlIcums and laJrss nibutary liuma.

@) The pins of rrrorsgq divmim a d UU% @Id I)re of Fks N-o R~rtrvolr, aro q , $ x h w l y 8.u ilamnl on the pm morw Maiiit "A" wWch is saachod haem sad f o m parr beof.

(c) Tho a t e from which this Limw &all hrnc pmd- ir 3 Augunt 1949.

(d) The pupown far which thir Li.ice~cct ir iiuuod ara rtarepa and, pwar af set &rtb in an Agreamat becwaen the QPvar~mmt of C=ohR.&da and rhcr Licazoot. d a d 29 I)scm 1950, u amuruled on 29 P a m b m 1987, tlbd fmhar BIRU on July 1997 (rbc "1950 t l p a n a $ 4 s unCBded").

(c) (I) Thc ramhm qudry af wIWT wbicb m y b6 m d 14 23,850 cubir;- hectornettea, of which 7100 cubic-hoctwretm nrp liw mmp.

(I) 7716 worb mr), bo o p W ~CJ divert ord usa vatsr fm pawor ptupo.o rtaou@out w h l e yew. 3x1 wwlro may bs Is ~~llocrt ~ l ~ g l f i7W r b ~ u g b ~ t tho whole yw.

Is) ' Ih ia Liccncc is app-1 UJ iha lsPd roqukdl &Ir rko paworhouoa indics~od on Exhibit "A".

(i) This Liccwcc is iwd in eEcardaRco with lho W w o f the 1950 &.~.~cmcot, as mdd, Puprrrrradw ATnCFICiPd Conditiod Wo~ra Licmm No. 19847.

cxwpt in (ho m a oidcthtcby &an in ibo pafbmwm of ia obfi&m rnda acai.011~ 5 &ud 6 o f tho 1950 ,%.pun- as mrardd

&) I n o r d a ~ p V i & O w ~ o a ~ r y b O T m O ~ ~ o f ~ W ~ L w l m e n , rbc L ~ ~ ~ ~ w T I U I U S I O ~ ~ ~ N ~ C ~ P ~ O ~ ~ ~ Z ~ ~ ~ ~ ~ ~ ~ E ''SM Tasm AaauaJ WBW Allocadmw a &#id in the 19S7 Wtl~~1~af A m d s a d 1 4 ~ t a m h 1 9 8 7 ~ H w ~ ~ ~ ~ h ~ t o f C P u a 4 ~ m Mt$6ty Thc Qym ia Rigbt dB. PloW rrlBxWh Cubbia a d tho Li-eu-

C - . . _ NuuoFa ofE&di% %ilk m.d =j&g

P I I K ~ ~ ~ K & JU]Y*.1!297 L i w No. 1023%

SLL-29-1997 21: 30 fm W R -

ALCAN ~~ LlMIlZP of MontrW, P.Q., beiug tha bnldrrr of Firrd Warn Licrrnca Na. 1623% authoriziug the mngq r k ' v d ~ l l rrod us8 nf vba wuPr of rkn NecMco River snd Rjbutariu is hmby autb&%d to occupy by raQ in ooua#ina wirb flooding b a s Cmwa krnPB Iying below rha 859.54 moas (2,820 fb@) coatwr Mnmd rrrd e ~ c o n t M fhc stomgt: rcemoir abrrvc K m c y Dam tributary a, tbc N& E v e , ar oa Bxhibit "A" #tm lamto pnd f ~ ~ p a r t h a r o o & a a d b o c c u p y b y a n d f f t c 4 n n ~ w S t k @ o ~ m ~ m a i a s s r w m c e a a d uperahop of tho W Q ~ r o f i m in Find W W I ~ . I w Na. 1W24 b~c Quwn Lands dtsignated k) rm Agreumant bQFwbca t40 (javmma~lt af M ~ i a h CPlmMu md &.a Liccmsae d a d 29 Qaah 1950, sir amtnrlcd err 29 D~ccmbcr 1987, Pnd ar fizrrhtr mdtd on rn July 1997 (in rhis Amended P d t mliectivcly caII.ed thrt nA&Cbamsrrf3, rha cncal baving gn pn;a of 53,384 bm (131,915 -1.

Ttria Amd(;d Pormir i s app- ta the Iszrd ra Fhd Wa@r L i c a ~ No. I02324 i s w-

Amended Eha day o f July, 1997.

File: 0179602

mnnM Pen#it No. 3449

I Ihe p h will etabliih lm4 ubnidsa aNcduko anvtr0aambnW etihmcaent

I fund (me "NschaLo en^^^ lkbmmamt Fund") in B C C ~ ~ witb llria Schdulc.

Subfa tn acrtiozlrr 4 and 6, the Mmgmolf Comminoo \viII bc cumprimxt of tbnc pa6op.s: aaa appoinrd by AJEaG one ryrpointod by the hlinim of Erwimmt, Lands andParks (me "En-sot M i n i m and arw mimod by rho FsdGlnl ~uvanmmt.

Tko parcia wfU joWy ruqw tho Pcdaal chmrmonr co prrrricipusu in the m g m m t C o d - Tho toquw~ will rcmaiu opan if tba F e d 4 Gwaarrrarr docs mt olm to pwticipata illiridly. If If FZ;odsrd C 3 o ~ o o t C~POIP~C (O pdcipuc initially by ~a electing witbin ISO daya of'ths joint r#luwt, it will bo nrkd to w h t pnd appoid nia appnqnkte F o d d official to the hfiW.pn&lt C d m wbo ba Mrcd. W cb& but m y a h & to sit ady u a member. If the Fdmd Gavmmm~ CJcW to PBFljQ'pt0 U a I8.W d@@, it m y tha a$paftLf ouch member ruzd the numbcr of manbm of the Nw#rgaslmr Conrminas will bt i w w e d 8orn b to faurpclnm.8.

Tho will each appoinr ~ m p m a c a ~ m withfa 90 days crf thrr execution of 'llis A- Wa party hi18 rn ajpint irs r q r ~ t i v p w f M Wa pairxi, mat pany *xi11 bc dcbm#l w hwc d o c W to w i n t n m v q a d tbo 'Mpqpnmt CoraJaittcc will pzrocd with !he r d n g nmnbm

I f r b o F o d c r a l G o v ( 7 ~ ~ w t d w e a o t a h b ~ d p i a ~ ~ r ~ t Coranritrw within 60 dapi ~f the joint rcquo$t, r rS3rd t c t p ~ n b u r wiU bo rlppohEEd a follows;

0) if che psrdss ate aaable to agrw on r mutually rrccPcprrrb1a thi.d mcmbar wi*n 60 daya, rbsl the p d w will Immddiatow thataAcr roqaat thc W of thp Fmm B d c h r m c i l to sppoirrt P1 qprpp*tkirdmbor,

kc] the Qrair of the Frrvrer Basda COW dU bo r # 2 d to sppbt, witbin 30 dqg , a neutral iarlividwl wirh no nffflirnsiw Co 6- m, wbo h~ m r i a t t e~pnimca wiJl bn-cpDl iwol tnd with -bad Wion-r-, who wifl ba &ccd ra chrk Fhb Manogcrza~$ cxxnMm

(d) In order to wirt tk Cbair of 0 c Fnsscr Baria Co f* mj=+on, ea-b party will pmvid~ ta the W of tb Frarrw BaRin r%uncil a list ef jrix potential rnearbm wha meet the mquirtmaats of nrbccti0~a 6(c) ad who xre wilIiag aaQ able UI sit w a r u d e r , end

(@I if the 89- p f % ~ n subabguantly becan- &lo to sews, tbr;n the panics will mqueut tbft Chair of !he Fmw EIaria Ccnracil to oolwt a rq~laccmw% member using the p m out in fkJs &an 6.

Ifao rndurtzccepts t)LC CZlRiF~8ppoin~mt or ifTbe QlDiEmigaa WtjsoIsitiw1,zb0 initial ur q ~ l ~ a l t Chair wiU ba ralcctd by 4~rity vote of tha rncmbm.

(4) P 1 1 m ~ w i l l b e c a l l e d b y 5 b a ~ ~ n a y ~ o ~ b . o n ~ ~ m ~ ~ must be g i v a mwmable r#rm of dl amtinp

@I 8 qa- of rha w m n t Ccmmiffoo viU h two mcmkra. lmJaL8 & rnwmc~t CQnrrmttw comi8td of only rft k, which w e qLlsmal wjfl ?M one; and

fc) fbc M11~188rno~t fid~ MU a& ta mncb decisiarrrr by com8w.w but if tho mqjority concl* @at, dcspiro m m u b l n u r n , COMWLI~ cmwt bc &an docisionn will bc d c by mrrjoriry vale.

h c h prrrty will bu nspcmi'bla for tb C-WD nf tho parti~ipUli~n of its req,msmtative m the baagmmi Ckmaaittco cpd WilJ abam 0qUayr:

(a) dae costa of qmuion of tha ldim.q6113cuat C u e - and

up ro a~ iggrupwo fmom of SIiOQ,Mn], or Nfh tpato u ~ u m aa mry k i~gtrod to inwririop by tho @ee, pmvidod tho if any p~ymaat by thu Fmvlacc ir dclayDd 4up to a nccd fm siuwtory apprupzi~tio~ Aim's obligstion lo d c o a pa- hllmmdn, and rbs Fc4aa.l (~VWI 's obliprion should ir choopo to putidpan, wfil b dubycd l% Ihc cmmpadfng paid. If it chooxr to paticiparo, the Pm$cd C o v ~ m t will .*o bo mjm&& fbr tho mu of rhe panicipnion of iu q m c w l ~ v e md a ppdrdonrrto thu. of rho D D ~ UI& (a) and (h) Bbova. Howcvct, if the rhird rnmburmwt b w W a i undur (ha pmvirioar of loctian 6, then the purdpsldu will &am qualIy rhc mwnablc corn of sh6 pwciPtprtian aPtM Wrd rnmk

T b e p u r f o r a o f b M ~ ~ ~ CornsriWirtohn'crw, uww P n d m on opticmi may be wdjabia far IIX ~ ~ I W W ? rrf !.!I@ Nw~&Q watmt;H nca. Those oprions m y iwlude, but we nss Iiznircd W, dwclopmmt of a wakn mlsars facility at o r n w t h e ~ ~ a q o r t h e w o f S b ~ ~ c o h a t c o ~ ~ ~ C n t Fuad f o r ~ t h f X tafi-cnt pwrpoeea G or both];

As awn rur pwticablo sfta CEII& out tbr: cclpSJW pumwt to &on 1 I, the Manqmmt cwrurti~a y#ll wap1cM debfar r ngmF pa thn ~rovinca, Mcm aad ouch a h r pwtis ss 8ppmpristq wscb qat Wfll W a d e :

(a) iff daision on tka -rim opft'orix fbr &WmiUWa cah&Wanm of tba Nacbako w a s n k d 8no;

@) a plan for tho implanrantatigl af aach of tha edemd cpdm, including the idcnrificotion of thr, 8ppmprirrto psRty or pnrcioa m hplancnt tba options;

(c) an i n d w I WBab k ~b Q ~ D C W q t i c w ) p v i d h q a M I g d drnt&a of the costs fbr impIdatmtadan of tho rrpu'on, hJUWag any onping cusu assaciaml with ifra ~ptlan;

Subjocr m tb i.kmdJ ~ ~ ~ B ~ Q L I U dcmiIkd bokw in W m IS, OL#j rt.lo tattin ram of this S-O, tba d~cioioftrr of tk M- Commim will be biding an thc partif3fJ.

Immdliotoly followkg tbo C B L ~ ~ of this Apwwat, tb PTP- w i U heEp rp kiiitata tb f d n of the Nechah Wuathal Caw (W 'Councilm'j, in oDder pmvids advice to dl0 ~~t (2cmaliu8c asr th* u a a pn'mitim of tho Nw;brLo m t a l E4hmmmant mud.

I ~ o f c o c r b a f t b o d ~ @ ~ ~ ~ b d r c I S w a ~ ~ ~ ' * t ~ m ~ I ths caah flow abods of mo axpendim p l p o m r a r a b w by rbo N I ~ ~ Colwnictaa far I thsroprioututptovidtdinthc~ W i d s b 7 d c y l r f t n r d ~ t i n h a r b a a n ~ o i n r o 1 ib N s c W En\hmrnial Enlrwm Ptad p W l of SW; of each W &urn I far an @on, ~ k m will mokr r nastdrbg Eaatributim LYCO fbp N w

lhfmwmmt Puad T b md ~u01-e mJriciPnrm ~f Akam'r ponuiWons will k CAD S S O , ~ , O Q O including my o o m ~ wxbr wctim 9 @), Mum wi l l mutvo & &t q#mt its obllgetiun to wntributa to tb NcchaLo E n v b a ~ W Pund in an r;mw not erxcadng, irr i b ~ aggmggte, CADS10,000,000 &r tho W t d rmorna af tho ruhwion or climbatinn o f wm which w d d hvu bOaL iaorJncd h tb W&pmmt or InrplommMiua of ~ o f t h t w b t o d o p t i ~ t a t b e ~ Q U t ~ ~ ~ ~ o ~ O f i P l i P l l t i O B j l u b ~ ~ ~ l m f l O aobiwcd by &a w of ury d w i ~ or cq iam@Ma$ rnnpx~PfOPIROd h:Alcmprior to tho data bawf on Cho K ~ M W PM B o r n F&U@ u pact of ttn TroRFIRo Coropldon F%qiact. ~ A r n r k w i l l W d i & ~ i n ~ w i t R t k r ~ b r W m o f ~ d o v & p + n by he maneat C~nuniw. Thr CAWSO,W,MM ~ u d c i n by Alcpl quwms llu ow mnibutim to &- f3fhmmw rmdar rba pnqmm tbacmui fn this !kbumc, inchrd iag~c tp i l a lcwnro f raywr~or rc2o~1~rywk ic rharqrb lc lcc tPd~saQw~or uorowstm~cau f b i l i ~ y i r bullt,AJcurrbJInorbrmquWrown~rib~~cpry Ambcrmatug to a water m I w fd t r w otha dmwkmn -1 For &maur fxminfy, W8 provirion d m mt sffact any rqmdbility of Atcra in n q ~ af it8 We.]

flawatffrelcassfkilityir builtvndrrbpmpmdoorribed ip Wa Scbsdu4 than oncp coaJpJeta& Alcna wiU o a d n m q a t b c ~ ~ f , thc f idif l ,8t ib mk ~~~mtlaxpanrt, A l ~ w 3 1 C m b o ~ b l O ~ t h 9 ~ o 0 ~ 0 f ~ 0 ~ ~ ~ ~ ~ ~ f o r t b a b o v ~ ~ ~ c c p t m t h s ~ t t h w t b a ~ ~ t t o i r r p u t p a i d f o t ~ y N c a r ~ u g b i w wn~butim to tho Ndvko !!avb-l Rnhml.amsnf PPrzd rmdcp Wctiou IS of& W u l o .

1. nrtbc N I h o Dm@- Plmd (tho '.FMd") win bt atablishdl sad W d in txa~sLtaar;o wi# tbg offbin S&duie.

(a) to mppmt invdmm~ in UW w existinp b-w;

(c) to Support ouch 0thcF goo d r r t G n t with tho purpaso of m 'Puarl w the Minirrtfl o f Employrncaf arrd I n m t (b TWhb?ctn) m y c d d c r dabbIc.

For p~p06os -$ N0nZl.w- BEitirh Cotpmbfa iacludclo ths Ncuhnko Rivn. bdn. \

3. \, T h ~ F U d T h c ~ b ~ b o # c m d b y t h o Miaistor a14 p~ymeam put o f rhc Fund will bs mule at tbt Minbfs d l d ~ a m d d i d o n in accordanca Wih Ebia S c W c fix momdm or pgroarmm TabGting tho pupom of Fuad T h ~ M i a i a t a r s h s l l i ~ r m ~ l r ~ m r h a ~ o f ~ F u n d

5. Akm an8 bet Prcvko will each wntrihks CAD

(a) ThO Rr,viacc PMI c m m i i WS2,SOC),ODb on J P F I ~ ~ 'I o f 1998. 1!W9 aAd 2000 m; rrritrrapti~a, ona in aaob yerrr;

(b) rkt PTPvinm shaU prOvids Alcao with 14 days' prior notice of ma dm of ita consibueiwr for osrckyar; mu!

(c) AlCIYI Ohall cnacribyta CAL)f2,500,000 oacb y c a ~ on the dara of tho Provincc'p cozlrribud~

6. Wtioaai fiarrncid w~~tnburiow to tbo Pmd &at may h mads by w m m t # i if c o m l d d by rhP Prow to be in tfre besr intcmai of the Fund.

7, mu m~tributio~l~ of tht pPrde~ r E ~ W parti08 rndsr rtcrian 6, will be mu& W, h v W pad Qiabussad hm, thv Pmiwe'Io CoascrIidrtod EL4vaous Fund pursuant to Jle F M q t AWm3crgdon Au, ur ~~ m m or slrucnuo fot holding aad m a b g paymmdo h m tho Fund aa the Pmviuco muy dPcrido,

9. -. The Adviroay B a d will bb Maagriaod of at lcasc 8 peamiis &am tb Nor3$wesfa mgiw t f Britjwb Colmbia P ~ W by &c &Gnimx. T h o Adviaory Bosrd Wl kh&:

(a) one or m m zqnwcm?.advc(s) uf rho Ruviu~a

@) snu Qr mom local gour;r~uaulc rqrm~~WdM6);

(c) on8 or more buairrcnn rspmwvo(6], otba 'Ehon iiPpr AIcan;

(d) one or mom Pinrt Nations r q m d v c ( a ) ;

(c) one or mcuu mioa rq~maotativN8); rad

(g) obcr prmm npmmtativo af tho Northw- region.

10. n#IPartioa el MiniaTbr will daignatrc aao of dre memb#a othm thut a rqrmo~~tntjvo of citbar tho Pmvirrto ox Alcoa t a bo &Q Chair of tho Advi~ory Board The Chair af ths Adviwry Bormf, in cmsultarian with tho Wrtar, wilil, than efirrablish fho Adviwry Bead's wak@ procad-.

11. To dwelop zvwxm&eiom fw rha lMiaiotw os oa Bow Eba F d &odd be utilized, ~II wwoU ibw my gmW or ipcoijio m e or programmes which ba ~~ppPrkrd through rbc Firad, the A d v i m B o d m y coaNIt wifb residenu of N a r t h m Briti& CoZumbia

KNOW ALL PERSONS BY THBSE PRBSENTS &&I, subject to the condition set o a h II!m 1 bmCJf;

(8) Alcaq l u m i n i w Limited ("Alcan") fix and in consideration o f the cxecutinn an4 delivery by Ha Majesty rhe Qum iu Right of the A.ovbxo of Britkb Colymbia (&c w ~ ~ M 3 0 f 3 s BWNcm 1937 A@-~-mt (&G ' 'Apmni ' ' ) bersm Alcan and &c Province srad of tho *XepI~mmt E l h c i p $upply Agmomcnr" curb the ''1997 A m ~ o n c " , nll aa d e a d in the Agroaraeat, and tht execution and dcslivcay by B*sh Columbia Hydro aad POW= Aulbaity ~f the "LTEPA Mbmorandwm': all as d e w in tho A p m t n t .Aad of even dato b d t h (callecnvely called the 6%BC/can Apa~nents'3, aad $k Blnd in wmidsration of the paymenr af $10.04 tho firll roceipr and mfEeicatcy of which hscby ie h w J e d g d , b s hmby a p by thew praa0nt.a fkv itelf; ib ntbsidirPicis aad rheL m i p e i v s dixbcwm, scaior ommi?, agcrru, ruccc- rpld w 8 i p Fo SaRiIu, relms~ apd fmer d i m e uha Province aud iar wsm, officiaJs, mployccs, apnts, succoos~rs d wip (hmimftar caildvuly callcd the ' P m i n c o R o l ~ t c w ) af and from any md all oloimr, ac- causes o f ootion, dtmaads, rights, damtzgse, corn, deblo, nxp~secs Wrct ~#lpensMSon w~ha~aprm, w M o r a$ Isw or in 6quily and whdhtr known c# urkknown, awpcctcd or urmupmad, which Alcaa, im subidirulca ~r their rospcctivc dkccors , s d o r c t m m or agmtg havc ariaiag as a k t or bdirwr w ~ q u s n c s of', or iu rcladon to thc Kama+lo Coqldon Pmjcct an dsfinod in thc Agrtwcaf CnKCP#) pot parxling, and. without Emiring tho g d f y of B c farcgoQ, all claim^ md CBUW of acrioa adurncad, or which CPUM bc sdvw and ail nwwn wining out of and mf- to, in action numkr C970386, styled Alcun A l d m Limir.ed v. Her MBCjcsty The Queen in Ri@ o f The Aavh.~~ o f Bridsb Culumbb ~ommcacsd in the %T~~GOUV(A Reg iw of tbs Suprwnt ~ o # ofBritiah Columbia (tho ''Actionn), on Ihc rarns Iurd couditionr bmi98Ast tat out; a d

(b) tho Prayhe for wj in connidcuathn of tho ox00~tioa and deliwry by Atcaa ~f the BUAJcan -R, and fbr 8nd h mdamr~'on of d3o payrneuf o f $1 0.00, tho fuU rocdpt rrrd ~ufBdmxy of which bcrzby is acLnowIcdgod, docs bacby agroP by there prrsaU fox itself aud its miaisrm rraZi0.r officialo, agmm, sluccasscm and nssignn to d q m l w o d ~QWCT discharge Alcan wd its evbsidiariw d th& ~ ~ W U V C &TWO% officers, ~mploytw, aaclrts, succaasors a d assignq (hrrinafter ca1lac;ti~oly r o f d to w tb ''Alc8R Rolbaoao'') of aaQ from my imd dZ chim~, acrionq c a w o f ocdc,'~~, dcanau& righm, d a m g ~ ~ , corn, debtu, crxpwnbs and c o e s a whrusoevcr, whetlux at law or in e c p i ~ and whotkcr lrnQwn nr unb.lwvn, au8pW.d QT tumqm& wbich thc Pravince has arieing ao e c b o t OT indirect wnscquanco oR or in reladan. to KCP not

pmwdiw, and, without limiting tbc gmaality of tbe foregrhg, aU claim and csuscs of BEUOAS B d v w d in, as which csuld be advancd in, and all mattcrn arising out of and ref- ID, in the Acfion, on tbt tams and c ~ n d i d a ~ hereinaRa set out.

1. IT IS FURTHZR UNDERSTOOD and a p e d rhaf it is a condition. of this M u W blaasc thab if tit any tijao b f o s January 1,2005 ua net of thc k@sburrc of rbc Province o f Srirish Columbia ia cmcteb rhar 8bmgMoo in wholo or in part tho "1950 Aparncnt", the "1987 Salancnt Alpcczncnt", thc "1997 Am-', the ''Final Water Licmca", ?ha "Am.ded Pnmir", ibc "Rrplsccznent ElecRiciry Supply A@mncnt", the *'&TEPA1', the 'ZTEPA Momsrandum" or tfiis Mutual Rolcasa, dl aa d&cd in rbc Agreernczar, and within 90 days 8fkz wy gxch &t is -redT .Mc-w by Mum zetim fo f!a ,hYiace C I ~ W [Q w m h m rhn'e Mwwl Relsasc and cantiuuu tho Action, thcq, mlsss the abrogarion is mciadcd or nuJlificd by fSutbcr cnacuncnt of the Legis1anq-e within 90 days after such norim, tbis Murusl R d a e is vcid ab inlrto snd ofno f m c and eEwF, antEapt DRIY tha rPe pvislm ofrhia secdon 1 wnrinw to biad the panica. Noihing in tbis parapyh provcats Acan h m commencing a s4parat4 pmwdi~g chatlaping my lcgisiatian which abrogsrtw, in whole or in part, any o f rke A$reemcnre refenmi to hercia Tbis Mutual Pcleasc is irrcvocablt, rurcondiri~ and fW asd remains so if Uutz nodm in not givm by AICAI~ wiW thc time h& p d n d or, if givon, rhc rrbTogatioa is rcscincbd or nullified wiThin the 90 day parid Tho p e r ncbowloclga that tbo omurion of time b#wocn tbc dato homf aad tho &us Qn wgch rbe Mum1 Rclaasa bccomcxr void ab initlo does not pncjudice, or sffern in any way, tho fx6xcanw.t by % party of a.ny right that wuld be c n f o ~ ~ a l by it ou or b~fcnc tho date hcmof: md is not a waiver of, or acQuicscwo in. my f i c r or circumflance wbich forms tba bwiq for my ouch right, c x q r to .tfia w n f ~ t h a m i ~ e pxovidsd in the Agreunml, my "Caacurrenr Agraomcnt", the 'Tina Water Licence" os rhe "Ameodcd Pormitn, aU as dcfmed in !lac Agrtcmcnt, [unltss my o f @an an 60 abmga~cd].

2. IT IS W T I i R UNDEBSTOP and agreed that tha sut-tlomwt in rpsptct of wbich !his Mwwl Rdcasc irjr cpsaed hfo is not t u ~ s4mjssim of Uabiliry d noehi.rqj hncin conrsined, xwr tba cornidasdon givcn for this Mutual R~Iowt, W ba conu- as an

o f liability on tho p# o f the Province or of Alcm

3. AMll Alcan hueby coveaanra and sgma nor ro araka any claim or fakc my procwdwg w b ~ t n e r wlarcd to fhc m~trw hutin reJwod a@st any pama, hrm, corp~raioo, asmcis~on, par~~mship, govmunt ar gavernmcrrtal authority which might result ia a claim &r mvtiibutian and iadamnib or othcrwiso w&wt thc Pmvinca Rdaum and, if twb claim or grocccdiag is tdcn or iuitiatcd by Allran, thcn ALfm docs hemby covenant and g g ~ c to save h d s a a md indemnify tho APvinca Ralorrsoa from my and dl tiabilitiors, h a g a n , intcrcst, cosrs (i-irctu- Ccgd fcm and disbrmo~nam aa ~CIWCCZI wIi~.ic~r sad own climt), expmm and cornpc~auion o f w h a ~ o c v s kjad in rcsptcr of my clairrr br ~ ~ q i b d ~ n m i a d d r y or ~133;lawiaa.

4. ANP the Provinca h e b y muanant9 and agcoas not to md);u any c 1 h or taka any pmccding whawever relafed to the v ~ r n hacia nlewoQ qaiast any ps~~on, h, mrp~ration, arrsociadun, prtrmmEp, lpvanfncat or p~mcntrl ~ W r i v wgcb mighf ruult ia a claim for tontn3utian and indaamity or oth~rwiao against rbo Alcaa Rtloarrcla saA, if guch dairn or pro- i a talrar rn iairiated by the FmviElce, rbea tb9 Awince dew hereby cqvmanr

and am to save hmorrs wd indcami@ tha Alcm ReIeasaa from. my Bnd dl liabilities, damagur, intcrcat, couts (including Itgal fees aud disbursam~n~ as botwx; solicitor aad own clianr), c x p c ~ ~ c s and cnmp~lasuon of wba~sdaver Lind in r ~ p s c t o f my GI& for cuntn'bution or indamniv ar nthoiwiw,

5 . AND the Provincte and Alcarx h8&y delura rbat in iato T&x Mucud Relam rhey cach undcmmd and u p m thut they rely fully on their own judgmcnr, bcticf and bwlcdgc offhc nsRVc of rhia docmenf.

6, AND rbc Pmvincc arrd &can aacb aclmsawlcrdga rbst ?.b~ &cta iu respect af which th i~ Mutual Roloa~a i s mado m y pmvt to bc orbe thm or diffmt hrrr the facts now known. The Aavinw an4 Alcan oacrh sx_pmwly accopt and arumci tho risk of the fms bbrng diffmmt aTLd that all of tba tannrr md candiuonn of !his MunJal Rclcffso 6halI bo cficdvo and nor subjccr ro mninofion by my d i m m y of any diffDn?a~b in facts or my new facrq gnvs d excepr Qaly aa pmvicZad Ih atdon 1 hmof.

7. APJD the Pravincu and Alcaa each firrthvr mnfirm, Aclmowlcdga aod a m that in enruing into:

@) ttw "Co-mt &rmnmrs'', lho "Fiarl Warm Licowo'' iuad tho Pnmit". dl B8 d e w iu the Apemalt,

dl prOmj~mi, r e p e ~ u a t ~ t i o ~ ~ ~ , ~1latr;sal m n e a ar a g r t e m t 8 , whcfie~ ml, writtan. ocpms or implid not tha-cin rrxprc8W art magsd into CRc ~ & f ~ c m t ~ f [ a ] and ae of DO f u n b form or effect fium tho dRta of oxoc~t.ion of tbo A g h ~ n t r [ s J W!CW rhis M W ~ ~ C Z L S C mdd void ab iniriu 8ZSd af nc f ~ x o gnd aUbct pwswnl to pan%raph 1 lmr~~f, Tha considemion mud bmpb is The wlo sad autiro considorau'on fw vhi4 M u W Roirsoso.

8. ANP rho Province hereby repromtu and daclamo Chat the Province has not assjgnad any ri&t of acdon w d g Cbo mattore haftby dansbd to any pcrson, corporation or orbcr legal cntiry who #tight claim againat the Alcan Relerssaa,

9. AND af Wi ha&y ~ ~ t S snd dsc!a~s~ b! A h l bsa =I 3~8igacd Wy right of action concoming thc manm h a b y ~2cascd ro any p ~ t a ~ a , corporarios. or oUlor lopal catity wbo might c b againat rbo FroYirrce R s l ~ w c .

19. WHEREVER &el a wed rhrougbov~ tfris M u W Rt1eu.s~~ tha -o bo coasaued R.E m c ~ tho pIm1 Mcru tha mm mqukw.

11. T5IE Province and Alw nnch m e b u ir hae cowlred with and brrs b c a adviabd by ib own mlicimrs bofom wtaing b rkir MUMI Reteam md thrtt it boa cmfizlJy rcsd 15s Mutual R c l w , W w e &e am tan^ hmwf nnd lipw the somb ata ia awn tkes sct.

13. THIS MUTUAL RELRASB i o gov& by tha h w 4th ProvLlccI of Britiih Columbia 4 thu h a of Canods appUcablo thco'~ ia.

IN WITNESS WHBRWF p d u h v a uccxuted tbir Mutual hlaaw on a e . day of July, 1997.

Tho Cotponw Ssal o f I ALCANAL-IC- w c o h e r ~ ~ c d i u

1 1

rh0pwancoof: 1 1