Common use of Equity Calls Clause in Contracts

Equity Calls. The cash flow of the Enterprise and borrowings shall be the preferred source of funding for the needs of the Enterprise. Should the aggregate annual capital budget of the Enterprise require an equity contribution from Alcoa and Alumina, an equity call can only be made upon 30 days’ notice and, if appropriate, a payment schedule shall be included. Subject to any duties at law or in equity to which a director may be bound, Alcoa and Alumina must procure that their representatives on the Board of the relevant Enterprise Company resolve to give effect to any equity call made under this section. The following limits apply to equity calls: (i) With respect to amounts up to $500 million in annual equity requested to be contributed in total by Alcoa and Alumina to the Enterprise (including amounts requested pursuant to subsections (ii) and (iii) below), each party shall contribute its proportionate share based on its current ownership in the Enterprise. Each party is required to make its proportional equity contribution for amounts up to $500 million of the equity requested regardless of the arrangements with respect to any further capital requirements of the Enterprise. If either party does not contribute all or part of its proportionate share, then the other party may contribute its own share and the share of the non-contributing party not contributed and, if it does so, the non-contributing party will thereby be diluted on the basis of the formula attached as Exhibit A. The dilution shall be proportional among all the Enterprise Companies. (ii) With respect to amounts in excess of $500 million but less than $1 billion in annual equity requested to be contributed in total by Alcoa and Alumina to the Enterprise, each party shall declare within thirty days of when the equity request is made if it has the ability to fund its share of the request and if so each party shall contribute its proportionate share based on its current ownership in the Enterprise. Should Alumina be unable to contribute the full amount of the equity in the year required, the parties will work together, to find alternative interim external financing arrangements reasonably acceptable to Alumina for the Enterprise or for Alumina. If alternative external financing is not acceptable to Alumina, Alumina may choose to be diluted or Alcoa may fund the Alumina proportionate share in U.S. dollars and this contribution shall be deemed to be an unsecured loan by Alcoa to Alumina. If Alumina issues an encumbrance or encumbrances over substantially all of its assets (other than the Enterprise Assets) to a third party creditor, it shall, to secure any loan from Alcoa under this section, grant to Alcoa, subject to any necessary consents (and notwithstanding Section 9(c)), a like encumbrance over its interest in the Enterprise. Alumina shall repay the amount contributed on its behalf plus interest in a period not to exceed one (1) year. The interest rate applied to this amount shall equal the then current one year T-xxxx rate plus a margin reflecting market spreads for companies having the same credit rating as Alumina as well as commercial underwriting and commitment fees to the extent that such fees are incurred by Alcoa as a result of Alcoa funding Alumina’s proportionate share of the equity call under this paragraph. If either party does not contribute all or part of its proportionate share pursuant to such alternative financing arrangements or if the Alcoa loan is not repaid, the other party may contribute its own share and the share of the non-contributing party not contributed and if it does the non-contributing party shall be diluted in the amount of its unmet share of the equity call in accordance with the formula set forth on Exhibit A, provided, however, if Alcoa does not fund Alumina’s proportionate share when the other conditions above have been met, Alumina will not be diluted in the amount of its unmet share of the equity call. (iii) With respect to amounts in excess of $1 billion in annual equity requested to be contributed in total by Alcoa and Alumina to the Enterprise and approved pursuant to Section 4(a)(iii) above, each party shall contribute its proportionate share, however, the parties will work together, should Alumina be unable to contribute the full amount of the equity in the year required, to find alternative financing arrangements reasonably acceptable to Alumina for the Enterprise or Alumina. If Alumina does not contribute the balance of its full proportionate share, Alcoa may make, and shall be compensated for, all or part of the remaining contribution in Alumina’s place; however, Alumina shall not be diluted to the extent of Alcoa’s contribution to the capital requirements in excess of US$1 billion. If Alcoa elects to proceed, Alcoa shall review with Alumina the mechanism to compensate Alcoa for its excess contribution, which may include, but is not limited to, a disproportionate allocation of the return associated with the excess contribution.

Equity Calls. The cash flow of the Enterprise and borrowings shall be the preferred source of funding for the needs of the Enterprise. Should the aggregate annual capital budget of the Enterprise require an equity contribution from Alcoa and Alumina, an equity call can only be made upon 30 days’ notice and, if appropriate, a payment schedule shall be included. Subject to any duties at law or in equity to which a director may be bound, Alcoa and Alumina must procure that their representatives on the Board of the relevant Enterprise Company resolve to give effect to any equity call made under this section. The following limits apply to equity calls: (i) With respect to amounts up to $500 million in annual equity requested to be contributed in total by Alcoa and Alumina to the Enterprise (including amounts requested pursuant to subsections (ii) and (iii) below), each party shall contribute its proportionate share based on its current ownership in the Enterprise. Each party is required to make its proportional equity contribution for amounts up to $500 million of the equity requested regardless of the arrangements with respect to any further capital requirements of the Enterprise. If either party does not contribute all or part of its proportionate share, then the other party may contribute its own share and the share of the non-contributing party not contributed and, if it does so, the non-contributing party will thereby be diluted on the basis of the formula attached as Exhibit A. The dilution shall be proportional among all the Enterprise Companies. (ii) With respect to amounts in excess of $500 million but less than $1 billion in annual equity requested to be contributed in total by Alcoa and Alumina to the Enterprise, each party shall declare within thirty days of when the equity request is made if it has the ability to fund its share of the request and if so each party shall contribute its proportionate share based on its current ownership in the Enterprise. Should Alumina be unable to contribute the full amount of the equity in the year required, the parties will work together, to find alternative interim external financing arrangements reasonably acceptable to Alumina for the Enterprise or for Alumina. If alternative external financing is not acceptable to Alumina, Alumina may choose to be diluted or Alcoa may fund the Alumina proportionate share in U.S. dollars and this contribution shall be deemed to be an unsecured loan by Alcoa to Alumina. If Alumina issues an encumbrance or encumbrances over substantially all of its assets (other than the Enterprise Assets) to a third party creditor, it shall, to secure any loan from Alcoa under this section, grant to Alcoa, subject to any necessary consents (and notwithstanding Section 9(c)), a like encumbrance over its interest in the Enterprise. Alumina shall repay the amount contributed on its behalf plus interest in a period not to exceed one (1) year. The interest rate applied to this amount shall equal the then current one year T-xxxx bill rate plus a margin reflecting market spreads for companies having the same credit rating as Alumina as well as commercial underwriting and commitment fees to the extent that such fees are incurred by Alcoa as a result of Alcoa funding Alumina’s proportionate share of the equity call under this paragraph. If either party does not contribute all or part of its proportionate share pursuant to such alternative financing arrangements or if the Alcoa loan is not repaid, the other party may contribute its own share and the share of the non-contributing party not contributed and if it does the non-contributing party shall be diluted in the amount of its unmet share of the equity call in accordance with the formula set forth on Exhibit A, provided, however, if Alcoa does not fund Alumina’s proportionate share when the other conditions above have been met, Alumina will not be diluted in the amount of its unmet share of the equity call. (iii) With respect to amounts in excess of $1 billion in annual equity requested to be contributed in total by Alcoa and Alumina to the Enterprise and approved pursuant to Section 4(a)(iii) above, each party shall contribute its proportionate share, however, the parties will work together, should Alumina be unable to contribute the full amount of the equity in the year required, to find alternative financing arrangements reasonably acceptable to Alumina for the Enterprise or Alumina. If Alumina does not contribute the balance of its full proportionate share, Alcoa may make, and shall be compensated for, all or part of the remaining contribution in Alumina’s place; however, Alumina shall not be diluted to the extent of Alcoa’s contribution to the capital requirements in excess of US$1 billion. If Alcoa elects to proceed, Alcoa shall review with Alumina the mechanism to compensate Alcoa for its excess contribution, which may include, but is not limited to, a disproportionate allocation of the return associated with the excess contribution.

Equity Calls. The cash flow of the Enterprise and borrowings shall be the preferred source of funding for the needs of the Enterprise. Should the aggregate annual capital budget of the Enterprise require an equity contribution from Alcoa and Alumina, an equity call can only be made upon 30 days’ notice and, if appropriate, a payment schedule shall be included. Subject to any duties at law or in equity to which a director may be bound, Alcoa and Alumina must procure that their representatives on the Board of the relevant Enterprise Company resolve to give effect to any equity call made under this section. The following limits apply to equity calls: (i) With respect to amounts up to $500 million in annual equity requested to be contributed in total by Alcoa and Alumina to the Enterprise (including amounts requested pursuant to subsections (ii) and (iii) below), each party shall contribute its proportionate share based on its current ownership in the Enterprise. Each party is required to make its proportional equity contribution for amounts up to $500 million of the equity requested regardless of the arrangements with respect to any further capital requirements of the Enterprise. If either party does not contribute all or part of its proportionate share, then the other party may contribute its own share and the share of the non-contributing party not contributed and, if it does so, the non-non- contributing party will thereby be diluted on the basis of the formula attached as Exhibit A. The dilution shall be proportional among all the Enterprise Companies. (ii) With respect to amounts in excess of $500 million but less than $1 billion in annual equity requested to be contributed in total by Alcoa and Alumina to the Enterprise, each party shall declare within thirty days of when the equity request is made if it has the ability to fund its share of the request and if so each party shall contribute its proportionate share based on its current ownership in the Enterprise. Should Alumina be unable to contribute the full amount of the equity in the year required, the parties will work together, to find alternative interim external financing arrangements reasonably acceptable to Alumina for the Enterprise or for Alumina. If alternative external financing is not acceptable to Alumina, Alumina may choose to be diluted or Alcoa may fund the Alumina proportionate share in U.S. dollars and this contribution shall be deemed to be an unsecured loan by Alcoa to Alumina. If Alumina issues an encumbrance or encumbrances over substantially all of its assets (other than the Enterprise Assets) to a third party creditor, it shall, to secure any loan from Alcoa under this section, grant to Alcoa, subject to any necessary consents (and notwithstanding Section 9(c)), a like encumbrance over its interest in the Enterprise. Alumina shall repay the amount contributed on its behalf plus interest in a period not to exceed one (1) year. The interest rate applied to this amount shall equal the then current one year T-xxxx rate plus a margin reflecting market spreads for companies having the same credit rating as Alumina as well as commercial underwriting and commitment fees to the extent that such fees are incurred by Alcoa as a result of Alcoa funding Alumina’s proportionate share of the equity call under this paragraph. If either party does not contribute all or part of its proportionate share pursuant to such alternative financing arrangements or if the Alcoa loan is not repaid, the other party may contribute its own share and the share of the non-contributing party not contributed and if it does the non-contributing party shall be diluted in the amount of its unmet share of the equity call in accordance with the formula set forth on Exhibit A, provided, however, if Alcoa does not fund Alumina’s proportionate share when the other conditions above have been met, Alumina will not be diluted in the amount of its unmet share of the equity call.each (iii) With respect to amounts in excess of $1 billion in annual equity requested to be contributed in total by Alcoa and Alumina to the Enterprise and approved pursuant to Section 4(a)(iii) above, each party shall contribute its proportionate share, however, the parties will work together, should Alumina be unable to contribute the full amount of the equity in the year required, to find alternative financing arrangements reasonably acceptable to Alumina for the Enterprise or Alumina. If Alumina does not contribute the balance of its full proportionate share, Alcoa may make, and shall be compensated for, all or part of the remaining contribution in Alumina’s place; however, Alumina shall not be diluted to the extent of Alcoa’s contribution to the capital requirements in excess of US$1 billion. If Alcoa elects to proceed, Alcoa shall review with Alumina the mechanism to compensate Alcoa for its excess contribution, which may include, but is not limited to, a disproportionate allocation of the return associated with the excess contribution.