Exhibit 10.1

 

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Execution Version

CONFIDENTIAL TREATMENT REQUESTED BY USG CORPORATION—

CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND

HAVE BEEN SEPARATELY FILED WITH THE COMMISSION

Deed

USG Boral Building Products

Shareholders agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANZ Tower 161 Castlereagh Street Sydney NSW 2000 Australia

GPO Box 4227 Sydney NSW 2001 Australia

  

T +61 2 9225 5000 F +61 2 9322 4000

herbertsmithfreehills.com DX 361 Sydney

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Contents

 

  Table of contents

 

  

 

1   Introduction      3      1.1    Objectives of agreement      3      1.2   
Business      3      1.3    Territory      4      1.4    Compliance with
agreement      4    2   Structure of agreement      5    3   Definitions and
interpretation      6      3.1    Definitions and interpretation      6      3.2
   Agreement components      6      3.3    Inclusive expressions      6      3.4
   Business Day      6    4   Consistency      6    5   Board and senior
management      8      5.1    Board composition      8      5.2    Appointment
and removal of directors      8      5.3    No alternate directors      10     
5.4    Chair      10      5.5    Remuneration and expenses      10      5.6   
Committees      10      5.7    Executives      11    6   Board and Shareholder
decision making      12      6.1    Board quorum      12      6.2    Notice of
Board meetings      13      6.3    Frequency and conduct of Board meetings     
13      6.4    Voting entitlements      14      6.5    Circulating resolutions
of directors      15      6.6    Board resolutions - general      16      6.7   
Shareholder approval matters      16      6.8    Shareholder meetings      18   
  6.9    Voting at Shareholder meetings      19      6.10    Related party
dealings      19      6.11    Delegation      21      6.12    Subsidiaries     
21      6.13    De minimis Shareholder      21    7   Deadlock      22      7.1
   Deadlock      22      7.2    Escalation process      23      7.3    Sale
process      24      7.4    Appointment of investment bank      24      7.5   
Acceptance of Best Offer      26      7.6    Support to Sale Agent      27     
7.7    Failure of process      28   

 

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Contents

 

8   Conduct of business      30      8.1    Strategic Plan and Budget      30   
  8.2    Conduct of business      30      8.3    Tax      31      8.4   
Periodic reports      32      8.5    Access to information      33      8.6   
Auditor      33      8.7    Dividends      34      8.8    Insurance      34     
8.9    Further funding      35      8.10    Anti-dilution      37      8.11   
Guarantees      38      8.12    Related party dealings      38    9   Branding
and IP      38      9.1    Branding      38      9.2    IP Licence Agreements   
  39      9.3    Protection of JV IP      39    10   Exclusivity and commitment
     39      10.1    Parties      39      10.2    Definitions      40      10.3
   Restrictive covenants      41      10.4    Permitted Activities      43     
10.5    No restriction on USG or Boral conducting businesses outside the
Territory      44      10.7    Acknowledgment      44    11   Disposal - general
     46      11.1    Standstill Period      46      11.2    Disposals following
Standstill Period      46      11.3    Security Interests over JV Shares      47
     11.4    Intra-group transfers      47      11.5    No avoidance      48   
  11.6    Adherence Deed and registration of transfers      48    12  
Pre-emptive provisions      49      12.1    General      49      12.2    Notice
of Sale      49      12.3    Offer to purchase Sale Shares      49      12.4   
Recipient does not offer to purchase      50      12.5    Recipient offers to
purchase      51      12.6    Offer is accepted      51      12.7    Offer is
rejected      51      12.8    Last Right      52      12.9    Tag Right      53
     12.10    Time periods      54    13   Events of Default      54      13.1
   Events of Default      54      13.2    Change of Control      55      13.3   
Insolvency Events      57      13.4    Notice      57   

 

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Contents

 

14   Effect of Events of Default      58      14.1    Call Option      58     
14.2    Assessment of Fair Market Value – initial phase      58      14.3   
Binding determination of Fair Market Value      59      14.4    Failure of
expert process      60      14.5    Exercise of options      61      14.6   
Time periods      62    15   Completion of transfer of JV Shares between
Shareholders      62      15.1    Definitions      62      15.2    Contract for
sale and purchase      62      15.3    Transfer      63      15.4    Transferee
Shareholder to assume guarantees      64    16   Termination      64      16.2
   Survival      65    17   Operations of Shareholders      67      17.1   
Definitions      67      17.2    Restrictions on USG      67    18  
Confidentiality and publicity      67      18.1    Definition      67      18.2
   Confidentiality      68      18.3    Permitted disclosure      68      18.4
   Disclosure to a prospective purchaser      69      18.5    USG Confidential
Information      69      18.6    Boral Confidential Information      71     
18.7    Third Party IP      72    19   Stapling      72      19.1    JVC 1
Shares and JVC 2 Shares are Stapled      72      19.2    Restrictions on
dealings in JVC 1 Shares      72      19.3    Restrictions on dealings in JVC 2
Shares      73      19.4    Transfers      73      19.5    Boral Holders –
special provisions      73      19.6    Administrative matters      73      19.7
   Allocation of subscription amounts      74      19.8    Saving      74    20
  Guarantor provisions      74      20.1    Boral guarantee      74      20.2   
USG guarantee      76    21   Representations and warranties      77      21.1
   Warranties      77      21.2    Notification of breach      77    22   Rights
and obligations of Boral Holders      78      22.1    Joint and several parties
     78      22.2    Holdings to be aggregated      78      22.3    Operation of
pre-emptive provisions      78      22.4    Operation of default provisions     
79   

 

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Contents

 

  22.5    Operation of Deadlock provisions      79      22.6    Issues of
securities      80      22.7    Operation limited to this agreement      80   
23   Notices      80      23.2    How Notice must be given and when Notice is
received      80      23.3    Notice must not be given by electronic
communication      81    24   General      81      24.1    Costs and expenses   
  81      24.2    Entire agreement      81      24.3    Assignment of rights   
  82      24.4    Governing law and jurisdiction      82      24.5    Service of
process      82      24.6    Waivers      82      24.7    Variation      82     
24.8    Counterparts      82      24.9    Further assurances      83      24.10
   Prohibition and enforceability      83      24.11    Relationship of parties
     83      24.12    Exercise of rights      83      24.13    Remedies
cumulative      83      24.14    Survival of clauses      83      Schedules     
Schedule 1      Definitions and interpretation      85      Schedule 2     
Director Appointment Forms      100      Schedule 3      Board and Shareholder
meeting schedule      102      Schedule 4      Board Fundamental Matters     
103      Schedule 5      Major Fundamental Matters      105      Schedule 6     
Minor Fundamental Matters      107   

 

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Contents

 

  Schedule 7      Expert valuation procedures      109      Schedule 8      High
Risk Jurisdictions      110      Schedule 9      Committee charters      116   
  Schedule 10      Third party arrangements      121      Schedule 11      Loan
Terms      122      Schedule 12      Adherence Deed      133      Schedule 13   
  Notice details      141      Signing page      144      Attachment 1      148
  

 

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Shareholders agreement

 

 

 

Date  u    28 February 2014 Between the parties    Boral   

Boral International Pty Limited

 

ACN 000 341 239 of Level 3, 40 Mount Street

North Sydney, NSW 2060 Australia

 

(Boral Holder 1)

 

Boral Building Materials Pty Limited

 

ACN 090 736 888 of Level 3, 40 Mount Street

North Sydney, NSW 2060 Australia

 

(Boral Holder 2)

USG   

USG Netherlands Global Holdings B.V.

 

Commercial Register No. 58458670, Muiderstraat 9, 1011PZ Amsterdam

 

(USG)

Companies   

USG Boral Building Products Pte Limited

A company incorporated under the laws of Singapore

with registered number 201401466N of 8 Boon Lay Way, #08-14 TradeHub 21,
Singapore 609964

 

(JVC 1)

 

USG Boral Building Products Pty Limited

(formerly Boral Australian Gypsum Pty Limited)

 

ACN 004 231 976 of Level 3, 40 Mount Street

North Sydney, NSW 2060 Australia

 

(JVC 2)

Boral Guarantor   

Boral Limited

 

ACN 008 421 761 of Level 3, 40 Mount Street

North Sydney, NSW 2060 Australia

 

(Boral Guarantor)

USG Guarantor   

USG Corporation

 

of 550 West Adams Street, Chicago

Illinois 60661, United States of America

 

(USG Guarantor)

 

 

 

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Recitals   

1       Boral and USG wish to establish and operate a joint venture through the
Companies to conduct the Business.

 

2       The parties wish to set out in this agreement the terms that will govern
the relationship of Boral and USG as shareholders of the Companies, their
relationship to the Companies and the terms on which the joint venture will be
managed.

 

3       Boral Guarantor has agreed to guarantee the obligations of Boral under
this agreement and USG Guarantor has agreed to guarantee the obligations of USG
under this agreement.

 

4       The Companies have agreed to be bound by, and to comply with, all of the
provisions of this agreement which relate to the Companies.

 

5       At the date of this Agreement, each of Boral Holder 1 and USG hold 50%
of the JVC 1 Shares and each of Boral Holder 2 and USG hold 50% of the JVC 2
Shares, such that Boral’s Shareholding Percentage is 50% and USG’s Shareholding
Percentage is 50%.

 

6       Each JVC 1 Share and each JVC 2 Share on issue at the date of this
Agreement is Stapled on the terms set out in this agreement.

 

 

This deed witnesses as follows:

 

 

 

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1 Introduction

 

 

 

1.1 Objectives of agreement

This agreement regulates the relationship of the Shareholders and sets out the
arrangements between the Shareholders, and where applicable between the
Shareholders and the Companies, for the ownership, governance and operation of
the Companies (and the broader JV Group) and the conduct of the business and the
affairs of the Companies (and the broader JV Group).

 

1.2 Business

 

  (a) The Business is to:

 

  (1) manufacture, distribute and sell the Products, to mine raw gypsum and to
purchase and sell natural and synthetic gypsum (in each case in the Territory);
and

 

  (2) undertake such other activities and operations as the Shareholders
determine from time to time in accordance with this agreement.

 

  (b) Specifically, but without limiting clause 1.2(a), it is contemplated that
the JV Group will (consistently with this agreement):

 

  (1) enter into long term contracts for the supply of raw materials and invest
in and own associated assets, including gypsum quarries;

 

  (2) operate existing product manufacturing and distribution facilities and
acquire or develop new product manufacturing and distribution facilities;

 

  (3) develop and implement a brand and trademark strategy;

 

  (4) create new products, systems and services to develop markets for the JV
Group’s products;

 

  (5) undertake various distribution structures including wholly-owned,
franchised or partly-owned structures in partnership with third parties;

 

  (6) develop product and wall and ceiling system specification skills and
construction quality assurance skills;

 

  (7) implement the technology licensed to the JV Group by the Boral Group and
the USG Group; and

 

  (8) develop the ability to inspect site installation and to accept performance
liability for systems constructed in accordance with the JV Group’s
specifications.

 

  (c) The Business will not include the JV Group undertaking installation work
except to the extent that the Shareholders pass a Unanimous Resolution that this
is necessary to develop a particular market, provided that this does not apply
to restrict operations in Australia consistent with the business conducted by
JVC 2 and its Subsidiaries prior to the date of this agreement.

 

  (d) The Business will be conducted in the best interests of the JV Group in
accordance with sound commercial profit making principles and with the aim of
generating the maximum achievable sustainable profitability.

 

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  (e) Despite the foregoing, the parties agree that the Business will not
include the JV Group doing anything (and the Companies must not do anything)
contrary to the undertakings in relation to the JV Group in clause 10.3(c).

 

1.3 Territory

 

  (a) The initial Territory for the purposes of this agreement will be the
following countries and regions (on the basis that a reference to any country or
region listed in this clause 1.3(a) includes any successor jurisdiction or
jurisdictions encompassing all or part of the same geographical area):
Afghanistan, Australia, Bangladesh, Bahrain, Bhutan, Brunei, Cambodia, China,
East Timor, Egypt, Hong Kong, India, Indonesia, Iraq, Israel, Japan, Jordan,
Kuwait, Laos, Lebanon, Macau, Malaysia, Maldives, Mongolia, Myanmar, Nepal, New
Zealand, Oman, Pakistan, Papua New Guinea, Philippines, the Primorsky Krai
region of Russia, Qatar, Saudi Arabia, Singapore, South Korea, Sri Lanka,
Taiwan, Thailand, Vietnam, United Arab Emirates and other South West Pacific
jurisdictions.

 

  (b) The Shareholders may amend or supplement the list of countries and regions
in clause 1.3(a) by agreement at any time and from time to time by giving
written notice to the Companies (signed on behalf of both Shareholders) stating
the agreed changes to be made. Any such notice will (despite clause 24.7) be
taken to vary clause 1.3(a) accordingly with immediate effect.

 

  (c) The parties acknowledge that. as at the date of this agreement, the Boral
Group and the USG Group each have existing arrangements with third parties
relevant to the Territory, all of which are listed in Schedule 10.

 

  (d) Unless the Shareholders agree otherwise in writing in a particular
instance:

 

  (1) the JV Group may not manufacture, distribute or sell Products (or
otherwise export Products) directly, or indirectly through another person,
outside the Territory or distribute or sell Products in the Territory with the
knowledge or having reason to believe that those Products will be sold outside
the Territory;

 

  (2) damages alone may not be adequate to compensate a Shareholder for any
breach by a JV Group Member of clause 1.3(d)(1);

 

  (3) without limiting the relief that a Shareholder is entitled to seek or any
right it may have under this agreement, a Shareholder may seek an injunction if
a JV Group Member is in breach of or threatens to breach, or if a Shareholder
reasonably believes that a JV Group Member will breach, the provisions of
clause 1.3(d)(1); and

 

  (4) no JV Group Member will make any submission or contention in any
proceeding at which a Shareholder seeks an injunction in relation to any breach,
or any alleged, threatened or apprehended breach, of clause 1.3(d)(1) to the
effect that granting an injunction is not appropriate because the payment of
damages alone would be adequate to compensate the Shareholder or Shareholders.

 

1.4 Compliance with agreement

 

  (a) Each Shareholder, acknowledging its commitment to the Business, will
comply with this agreement and, to the extent within its power, procure that:

 

  (1) each Company complies with this agreement; and

 

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  (2) each director the Shareholder appoints to either Board exercises his or
her voting rights so as to ensure that each Company complies with this
agreement.

 

  (b) Each Company will comply with this agreement and will procure that each JV
Group Member complies with this agreement. To the extent (if any) that any
obligation on either Company is invalid as a fetter on that Company’s statutory
powers, clause 1.4(a) will apply to require the Shareholders to procure (in the
manner contemplated by that clause) the relevant Company does the things it is
stated in this agreement to be required to do.

 

  (c) In the event of any future change to any Legal Requirement which changes
or imposes residency or similar requirements in relation to who can be appointed
as a director of either Company (for example any change to the requirement
referred to in clause 5.1(b)), the parties will agree in good faith how to
satisfy those changed requirements, on the principle that the burden of
satisfying them should be borne consistently with the principle adopted in
clause 5.1(b).

 

2 Structure of agreement

 

 

This agreement regulates the relationship of the Shareholders and sets out the
arrangements between the Shareholders for the ownership, governance and
operation of the Companies and the conduct of the businesses and affairs of the
Companies. This agreement is divided into the following parts:

 

Part A    Governance    The governance structure of the JV Group including such
things as Board composition and decision-making, as well as deadlock provisions.
Part B    Business operations    Key terms for the commercial operation of the
Business including planning and reporting, intellectual property issues and
exclusivity provisions. Part C    Shareholder exit and default provisions   
Restrictions on Disposal, pre-emptive provisions, and a default regime. Part D
   Miscellaneous    General provisions in relation to the joint venture and the
operation of this agreement. Schedules and Attachment    Various    Further
details of processes, procedures and arrangements relating to the JV Group which
are described throughout the body of the agreement

 

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3 Definitions and interpretation

 

 

3.1 Definitions and interpretation

 

  (a) In this agreement, capitalised expressions have the meanings set out in
Schedule 1. This agreement must be interpreted in accordance with Schedule 1.

 

  (b) This document is intended to take effect as a deed and a reference to
‘this agreement’ is a reference to ‘this deed’.

 

3.2 Agreement components

This agreement includes any schedule and any attachment which is not itself an
agreement.

 

3.3 Inclusive expressions

Specifying anything in this agreement after the words ‘include’ or ‘for example’
or similar expressions does not limit what else is included.

 

3.4 Business Day

Where the day on or by which any thing is to be done is not a Business Day, that
thing must be done by the following Business Day.

 

4 Consistency

 

 

  (a) If there is an inconsistency between this agreement and either or both of
the Constitutions, the parties intend that this agreement prevails to the extent
of the inconsistency.

 

  (b) On receipt of a request in writing from another party, each party must
take all necessary steps (including each Shareholder exercising its voting
rights as a Shareholder) to amend any provision or provisions of a Constitution
that is inconsistent with this agreement so as to remove the inconsistency and
ensure that the terms of this agreement prevail.

 

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Part A – Governance

 

 

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5 Board and senior management

 

 

5.1 Board composition

 

  (a) Each Shareholder:

 

  (1) has the right to appoint one director to the JVC 1 Board for every 12.5%
of the Shareholder’s Shareholding Percentage at any one time; and

 

  (2) has the right to appoint one director to the JVC 2 Board for every 12.5%
of the Shareholder’s Shareholding Percentage at any one time.

 

  (b) The Shareholders acknowledge that Singapore law requires at least one
director of JVC 1 to be ordinarily resident in Singapore (and subject to this
clause 5.1(b) the Shareholders agree that both will appoint such directors, so
that the burden of satisfying the relevant legal requirement is shared). Subject
to clause 5.5(d), each Major Shareholder must ensure that it appoints an
additional director to the JVC 1 Board (in addition to those it is entitled to
appoint under clause 5.1(a)) who satisfies the applicable residency requirement
(such additional director being the Shareholder’s Singapore Nominee). During any
period in which a Shareholder is a Minor Shareholder, such Shareholder may but
is not obliged to appoint a Singapore Nominee in addition to the directors it is
entitled to appoint under clause 5.1(a).

 

  (c) For the avoidance of doubt a Shareholder will not be entitled to appoint a
director to either Board (including any Singapore Nominee) at any time during
which that Shareholder’s Shareholding Percentage is less than 12.5%.

 

  (d) A director may (other than to the extent prohibited by applicable law from
time to time), have an interest arising from any duty he or she may owe (whether
at law or otherwise) to, or any economic interest from or in, the Shareholder
who appointed him or her as a director, or any Affiliate or Parent of that
Shareholder (as applicable).

 

  (e) To the extent permitted by applicable law a director:

 

  (1) who has an interest in a matter and who declares that interest to the
relevant Board may vote in respect of that matter if it comes before the
relevant Board and be counted as part of the quorum;

 

  (2) may enter into contracts with, or otherwise have dealings with, any member
of the JV Group; and

 

  (3) may hold offices in any member of the JV Group.

 

  (f) To the extent permitted by applicable law, a director may consider, and
act in, the interests of the Shareholder that appointed the director (or,
without limiting the foregoing, in the interests of the other Company) in
performing his or her duties or exercising any power, right or discretion as a
director of either of the Companies.

 

5.2 Appointment and removal of directors

 

  (a)

A Shareholder entitled to make an appointment pursuant to clause 5.1(a) or
obliged to make an appointment under clause 5.1(b) may appoint a director by
written notice to the relevant Company in the form set out in Part 1 of Schedule
2 specifying the identity of the person to be

 

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  appointed as a director. A Shareholder who appoints an individual as a
director of JVC 1 must also concurrently appoint the same individual as a
director of JVC 2, except in the case of a Singapore Nominee (who will only be
appointed as a director of JVC 1).

 

  (b) Subject to the Constitutions and any applicable laws, the appointment
takes effect on the later of:

 

  (1) receipt of such notice by the relevant Company; and

 

  (2) receipt by each of JVC 1 and JVC 2 (or in the case of a Singapore Nominee,
JVC 1 only) of a consent to act as a director of the relevant Company (in the
form set out in Part 2 of Schedule 2, as amended from time to time to the extent
necessary to conform with any applicable Legal Requirements in relation to any
such consent, and in the case of JVC 1 in the form of Singapore Form 45 or such
other applicable form from time to time) signed by the appointee director,

provided always that (except in the case of a Singapore Nominee) an individual’s
appointment as a director of one of the Companies will not take effect unless
and until he or she is effectively appointed as a director of the other Company.

 

  (c) A Shareholder may at any time remove a director that the Shareholder has
appointed to either Board (including a Singapore Nominee, provided that if a
Major Shareholder removes its Singapore Nominee that Major Shareholder must
immediately appoint another Singapore Nominee in accordance with clause 5.1(b))
by written notice to the relevant Company specifying the identity of the
director to be removed. A Shareholder who removes an individual as a director of
JVC 1 must also concurrently remove the same individual as a director of JVC 2,
except in the case of a Singapore Nominee (who will only be removed as a
director of JVC 1). For the avoidance of doubt a notice of removal may be
accompanied by notice of appointment of a replacement director in accordance
with clause 5.2(a) (and may be given subject to the replacement appointment
taking effect).

 

  (d) A director appointed by a Shareholder may only be replaced or removed by
that Shareholder, except that if the number of directors on either Board
appointed by a Shareholder exceeds the number of directors which that
Shareholder is entitled to appoint at any given time under clause 5.1 for more
than 2 consecutive Business Days the other Shareholder may on the next Business
Day following that period remove the excess director or directors with immediate
effect by written notice to the relevant Company, which selects the director or
directors to be removed (provided that the other Shareholder’s Singapore Nominee
may not be removed in this way).

 

  (e) Any removal of a director or directors pursuant to clause 5.2(d) is
without limitation to a Shareholder’s right to appoint, remove or replace any
individual as a director in accordance with clause 5.1 and 5.2.

 

  (f) If at any time a Shareholder transfers all of its JV Shares to the other
Shareholder or to a third party in accordance with this agreement, then without
limiting any other term of this agreement, that Shareholder must procure that
its appointed directors resign or are removed immediately.

 

  (g) A Shareholder who is entitled to make an appointment, removal or
replacement of a director pursuant to this clause may, to the extent such action
requires the approval of a Company’s members under applicable law, at any time
convene a general meeting of the Companies (or either of them as the case may
be) to approve that appointment, removal or replacement by ordinary resolution
and each other Shareholder must vote in favour of that resolution at that
meeting.

 

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5.3 No alternate directors

Directors may not appoint alternate directors.

 

5.4 Chair

 

  (a) Subject to clause 5.4(b):

 

  (1) USG has the right to appoint the Chair of each Board for the period until
31 December 2015; and

 

  (2) the right to appoint one of its nominee directors as Chair of each Board
will thereafter alternate between the Shareholders every 2 years,

(but so that the same person will act as Chair of both Boards).

 

  (b) During any period that a Shareholder’s Shareholding Percentage is more
than 50%, that Shareholder will have the sole right to appoint the Chair of both
Boards.

 

  (c) The initial Chair will be Jennifer Scanlon or such other USG Director who
is notified by USG to Boral prior to entry into this agreement (who will be
taken to have been duly appointed in accordance with this clause 5.4).

 

  (d) The Shareholder having the right to appoint the Chair at any given time
under this clause 5.4 must appoint, and may replace, the Chair by written notice
to the Companies specifying the director to be appointed as Chair (or, as
applicable, replace the current Chair). Subject to the Constitutions and any
applicable laws, the appointment or, as applicable, replacement of the Chair
takes effect immediately on receipt of the relevant notice by the Companies.

 

  (e) The Chair will not have a casting vote at meetings of either Board (or in
respect of circulating resolutions of the directors).

 

  (f) If the Chair is absent from a meeting of either Board, or is unwilling
act, the directors at the meeting appointed by the same Shareholder who
appointed the Chair may nominate any director present to act as Chair of the
meeting.

 

5.5 Remuneration and expenses

 

  (a) The Companies must reimburse each director’s reasonable costs associated
with travelling to and attending Board meetings.

 

  (b) Clause 8.8(a) will apply in relation to insurance cover for directors.

 

  (c) Subject to clause 5.5(d), directors will not be entitled to any fees from
the JV Group for serving as a director.

 

  (d) Where a Shareholder’s Singapore Nominee is a ‘professional’ director
appointed via a third party corporate services provider (or similar) in
circumstances where the relevant services provider requires a direct
relationship with JVC 1, the Shareholders must ensure that JVC 1:

 

  (1) promptly upon request by the nominating Shareholder executes any standard
form engagement terms and associated indemnity with the services provider or the
Singapore Nominee (or both) (subject to such terms being consistent with market
practice in Singapore for such engagements); and

 

  (2) pays the services provider or the Singapore Nominee (or both, as the case
may be) such fees and other amounts required under the relevant engagement in
accordance with the terms of that engagement (provided that if required by the
Board of JVC 1 the nominating Shareholder must reimburse JVC 1 in respect of all
such fees and other amounts).

 

5.6 Committees

 

  (a) The parties agree that the JV Group will establish a Finance Committee and
a Technical Committee to provide additional oversight and assistance to
management of the JV Group. The initial charters for these committees will be as
set out in Schedule 9.

 

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  (b) The Finance Committee will comprise up to eight members, with each
Shareholder having the right to appoint and remove four members, and so that the
members appointed will collectively have expertise in the areas of accounting,
treasury, financial analysis and tax. The appointment proportions will be
adjusted equitably (on the same principle as applies to appointment of directors
under clause 5.1(a)) if the parties’ Shareholding Percentages cease to be 50/50.

 

  (c) The Technical Committee will be comprise up to six members (plus an ex
officio chair as contemplated by the charter for the Technical Committee), with
each Shareholder having the right to appoint and remove three members and so
that the members appointed will collectively have expertise and responsibility
in the technology areas of manufacturing, engineering, research, product
development, and intellectual property. The appointment proportions will be
adjusted equitably (on the same principle as applies to appointment of directors
under clause 5.1(a)) if the parties’ Shareholding Percentages cease to be 50/50.

 

  (d) The members appointed to the Finance Committee or the Technical Committee
may, but need not be, directors of the Companies. However the members appointed
to the Finance Committee must not be employees of the JV Group.

 

  (e) The Boards may by Super Resolution of both Boards disband the Finance
Committee or the Technical Committee at any time after the third anniversary of
the date of this agreement if it considers that performance of either of those
committee’s functions is no longer required by the JV Group.

 

  (f) Each Board may establish (and disband) other committees from time to time
as it sees fit.

 

5.7 Executives

 

  (a) The Companies must appoint:

 

  (1) Frederic de Rougemont as the initial chief executive officer of the JV
Group;

 

  (2) Paul Monzella as the initial chief financial officer of the JV Group;

in each case on the appointment terms agreed between the Shareholders before the
date of this agreement.

 

  (b) The Shareholders agree that the chief executive officer will report to and
serve under the direction of both Boards, and be responsible for:

 

  (1) the day to day management of the Business and affairs of the JV Group in
accordance with this agreement, the Strategic Plan, the Budget and policies
approved by both Boards; and

 

  (2) the selection and appointment of all other officers and employees of the
JV Group as necessary for the proper administration of the Business (other than
the chief financial officer, the Senior Vice President-Technology, the Vice
President -Product Adjacencies and the members of the Finance Committee or the
Technical Committee),

subject always (where relevant) to clause 6.6 and clause 6.7 and to limits of
authority approved by both Boards from time to time.

 

  (c) The Shareholders agree that the chief financial officer will report to and
serve under the direction of the chief executive officer, and be responsible for
managing the financial affairs of the JV Group on a day to day basis in
accordance with this agreement, the Strategic Plan, the Budget and policies
approved by both Boards, subject always (where relevant) to clause 6.6 and
clause 6.7 and to limits of authority approved by both Boards from time to time.

 

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  (d) At any time (and from time to time) after expiry of the 18 month period
commencing on the date of this agreement either Shareholder may serve written
notice on the Companies and the other Shareholder stating that it requires the
chief executive officer or the chief financial officer to be dismissed (a
Dismissal Notice). A Dismissal Notice must state the desired date for the
dismissal to take effect, which must not be less than 3 months after the date of
the Dismissal Notice unless both Shareholders agree in writing to an earlier
date.

 

  (e) On receipt of a Dismissal Notice, the parties must ensure that the
services of the chief executive officer or the chief financial officer (as
applicable) are terminated from the date specified in the Dismissal Notice
provided that nothing in this clause is intended to require the Companies to act
in breach of the employment contract of the relevant executive or applicable
Legal Requirements (including as to required contractual notice periods).

 

  (f) Where the Chief Executive Officer or Chief Financial Officer is removed
under this clause 5.7, or his or her employment is otherwise terminated, both
Shareholders may nominate a replacement candidate or candidates for
consideration by the Boards. For the avoidance of doubt any new appointment
requires approval by both Boards as a Board Fundamental Matter in accordance
with clause 6.6.

 

  (g) The Companies must also appoint:

 

  (1) Joseph Holmes as the initial Senior Vice President-Technology of the JV
Group; and

 

  (2) William Hogan as the initial Vice President -Product Adjacencies of the JV
Group,

in each case on the appointment terms agreed between the Shareholders before the
date of this agreement. Any replacement appointments to either role must be of
individuals with the requisite skills and experience for their respective roles
nominated by USG and approved by both Boards. At any time after the fourth
anniversary of this agreement, the Boards may by Super Resolution of both Boards
dispense with the Senior Vice President-Technology and the Vice President
-Product Adjacencies roles if the Boards consider they are no longer required by
the JV Group.

 

6 Board and Shareholder decision making

 

 

 

6.1 Board quorum

 

  (a) No matter or business may be transacted at a meeting of directors of
either Company unless a quorum of directors is present at the time the matter or
business is dealt with (including, for the avoidance of doubt, at the time the
relevant Board votes on any resolution proposed in respect to that matter or
business).

 

  (b) Subject to clause 6.10, the quorum for a meeting of either Board is at
least one director appointed by each Major Shareholder (who is not a Singapore
Nominee) present in person or by any telephonic or electronic means permitted by
the Constitutions.

 

  (c)

If a quorum is not present at a Board meeting within 2 hours of the time
appointed for that Board meeting, the relevant meeting must be adjourned for a
period of at least 24 hours (First Adjourned Board Meeting), with notice to be

 

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  given immediately (and in any event at least 24 hours before the scheduled
time) to all directors of the time and place for the First Adjourned Board
Meeting.

 

  (d) If a quorum is not present at the First Adjourned Board Meeting, the First
Adjourned Board Meeting must be adjourned until the next Business Day following
a period of at least 10 days (Second Adjourned Board Meeting). At least 10 days’
notice must be given to all directors of the time and place for the Second
Adjourned Board Meeting.

 

  (e) If a quorum is not present at the Second Adjourned Board Meeting, without
limiting a party’s rights under any other provision of this agreement, the Board
will reconvene at the next scheduled Board meeting or as otherwise agreed.

 

  (f) For the avoidance of doubt, in no circumstances may the Board pass a Super
Resolution unless a quorum meeting the requirements in clause 6.1(b) (as
modified where applicable by clause 6.10) is present.

 

6.2 Notice of Board meetings

 

  (a) Subject to clause 6.2(b), unless all the directors agree otherwise:

 

  (1) directors must receive at least 21 days’ notice in writing of a meeting of
either Board that specifies the date, time and place of meeting, the agenda
specifying in reasonable detail the matters to be discussed at the meeting and
the resolutions to be considered (attaching all documents to be tabled at that
meeting); and

 

  (2) a Board cannot pass a resolution or transact any business unless the
subject of that resolution or that business was specifically described in the
notice of meeting or unless approved by Super Resolution of the relevant Board.

 

  (b) Where a matter is urgent, a meeting of a Board may be convened on less
than 21 days’ notice if:

 

  (1) a majority of directors including at least one director (who is not a
Singapore Nominee) appointed by each Major Shareholder and one director (who is
not a Singapore Nominee) appointed by each Minor Shareholder (if any) have
agreed to the shorter notice; and

 

  (2) the requirements of clause 6.2(a) are otherwise satisfied,

provided that this does not apply to notice of an adjourned meeting under
clause 6.1(c) or clause 6.1(d).

 

  (c) Subject to applicable law, notices of Board meetings (or accompanying
documents, or both) need not be sent to a Singapore Nominee where the relevant
director has indicated to JVC 1 in writing that he or she does not require such
material.

 

6.3 Frequency and conduct of Board meetings

 

  (a) Unless all Shareholders who have appointed one or more directors to either
Board agree in writing in any given case, JVC 1 Board meetings and JVC 2 Board
meetings must be convened so that they take place concurrently at the same time
and the same place. Singapore Nominees are permitted to attend JVC 2 Board
meetings to the extent they are held concurrently with JVC 1 Board meetings.

 

  (b) The Boards must meet at least six times in each Financial Year in
accordance with:

 

  (1) for the first 12 months after the date of this agreement, the meeting
schedule in Schedule 3; and

 

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  (2) for each year thereafter in accordance with a schedule approved by the
Boards 3 months prior to the end of the previous year.

 

  (c) Additional Board meetings must be scheduled if:

 

  (1) agreed by a majority of both Boards; or

 

  (2) requested by either Shareholder by notice in writing to the Companies.

 

  (d) A matter may at any time be referred for consideration of the relevant
Board by any director (provided that, for the avoidance of doubt, all Board
Fundamental Matters must be referred for consideration by both Boards at the
same time), in which event the directors must ensure that it is included in the
agenda for the next scheduled Board meeting (provided the referral has been made
at least 7 days before the notices and agendas in respect of that meeting are
scheduled for despatch to the directors).

 

  (e) A meeting of either Board may be convened at any time by any director by
giving notice in accordance with clause 6.2 (provided always that clause 6.3(a)
is complied with).

 

  (f) Meetings will be held in such locations as approved by both Boards.
Subject to any applicable Legal Requirements directors may participate in Board
meetings in person or via telephone, videoconference or similar telephonic or
electronic means.

 

  (g) Board meetings will be conducted in English and minutes of the meetings
will be kept in English (in addition to any other language required by
applicable law from time to time).

 

  (h) Within 21 days after each meeting, the chair must give each director a
copy of the meeting’s minutes (provided that, subject to applicable law, minutes
need not be given to a Singapore Nominee where the relevant director has
indicated to JVC 1 in writing that he or she does not require such minutes).

 

  (i) Subject to clause 6.1(c) or clause 6.1(d) or otherwise as expressly
permitted in this agreement (or required by applicable law), a meeting of either
Board at which a quorum is present in accordance with this agreement cannot be
adjourned unless approved by Super Resolution.

 

6.4 Voting entitlements

 

  (a) For the purposes of this clause 6.4 and clauses 6.5 and 6.6:

 

  (1) a Boral Director is an Eligible Boral Director for the purposes of any
resolution unless this agreement (including for the avoidance of doubt clause
6.10) or any applicable law does not permit the director to vote on the
resolution; and

 

  (2) a USG Director is an Eligible USG Director for the purposes of any Board
resolution unless this agreement (including for the avoidance of doubt clause
6.10) or any applicable law does not permit the director to vote on the
resolution.

 

  (b) At any meeting of the JVC 1 Board, each Boral Director appointed to the
JVC 1 Board who is present and is an Eligible Boral Director for the purposes of
a resolution before the JVC 1 Board can exercise in relation to that resolution
a number of votes equal to:

 

  (1) the maximum number of Boral Directors which Boral is entitled to appoint
to the JVC 1 Board at the relevant time under clause 5.1 including the Singapore
Nominee (whether or not that number of Boral Directors is in fact in office);

 

  (2) divided by the number of Boral Directors actually present who are Eligible
Boral Directors for the purposes of the relevant resolution.

 

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  (c) At any meeting of the JVC 1 Board, each USG Director who is present and is
an Eligible USG Director for the purposes of a resolution before the JVC 1 Board
can exercise in relation to that resolution a number of votes equal to:

 

  (1) the maximum number of USG Directors which USG is entitled to appoint to
the JVC 1 Board at the relevant time under clause 5.1(a) including the Singapore
Nominee (whether or not that number of USG Directors is in fact in office);

 

  (2) divided by the number of USG Directors actually present who are Eligible
USG Directors for the purposes of the relevant resolution.

 

  (d) At any meeting of the JVC 2 Board, each Boral Director appointed to the
JVC 2 Board who is present and is an Eligible Boral Director for the purposes of
a resolution before the JVC 2 Board can exercise in relation to that resolution
a number of votes equal to:

 

  (1) the maximum number of Boral Directors which Boral is entitled to appoint
to the JVC 2 Board at the relevant time under clause 5.1 (whether or not that
number of Boral Directors is in fact in office);

 

  (2) divided by the number of Boral Directors actually present who are Eligible
Boral Directors for the purposes of the relevant resolution.

 

  (e) At any meeting of the JVC 2 Board, each USG Director who is present and is
an Eligible USG Director for the purposes of a resolution before the JVC 2 Board
can exercise in relation to that resolution a number of votes equal to:

 

  (1) the maximum number of USG Directors which USG is entitled to appoint to
the JVC 2 Board at the relevant time under clause 5.1(a) (whether or not that
number of USG Directors is in fact in office);

 

  (2) divided by the number of USG Directors actually present who are Eligible
USG Directors for the purposes of the relevant resolution.

 

  (f) Fractional votes must be counted.

 

  (g) The preceding provisions of this clause 6.4 do not apply to circulating
resolutions of a Board under clause 6.5.

 

6.5 Circulating resolutions of directors

 

  (a) A Board will validly pass a resolution (that is not a Super Resolution) as
a circulating resolution if:

 

  (1) a notice containing the resolution is sent to each director of the
relevant Company (provided that, subject to applicable law, the notice need not
be sent to a Singapore Nominee where the relevant director has indicated to JVC
1 in writing that he or she does not require to be sent such notices); and

 

  (2) the notice states that a response is required within a specified period,
which unless the directors otherwise consent may not be less than 21 days after
the notice is received (or deemed received under the Constitutions); and

 

  (3) a simple majority of directors of the relevant Company, excluding any
directors who are not Eligible Boral Directors or Eligible USG Directors for the
purposes of the resolution, signify their assent to the resolution (or, where a
greater majority is required under any law to which either of the Companies is
subject, such greater majority signify their assent to the resolution), provided
that if:

 

  (A) Boral has a Shareholding Percentage of at least 50% at the relevant time
and there is more than one Eligible Boral Director in respect of the resolution,
such majority must include at least one Eligible Boral Director who is not a
Singapore Nominee; and

 

  (B) USG has a Shareholding Percentage of at least 50% at the relevant time and
there is more than one Eligible USG Director in respect of the resolution, such
majority must include at least one Eligible USG Director who is not a Singapore
Nominee.

and a single notice can for these purposes constitute a circulating resolution
of both Boards if assented to by the requisite number of directors of both
Companies.

 

  (b) A Board will validly pass a Super Resolution as a circulating resolution
if:

 

  (1) a notice containing the resolution is sent to each director of the
relevant Company; and

 

  (2) the notice states that a response is required within a specified period,
which unless the directors otherwise consent may not be less than 21 days after
the notice is received (or deemed received under the Constitutions); and

 

  (A) if both Shareholders are Major Shareholders at the relevant time:

 

  •   each director of the relevant Company (if any) who is an Eligible Boral
Director for the purposes of the relevant resolution and who is not a Singapore
Nominee; and

 

  •   each director of the relevant Company (if any) who is an Eligible USG
Director for the purposes of the relevant resolution and who is not a Singapore
Nominee,

  signifies his or her assent to the resolution; or

 

  (B) if only one Shareholder is a Major Shareholder at the relevant time, a
simple majority of directors of the relevant Company who:

 

  •   are Eligible Boral Directors or Eligible USG Directors for the purposes of
this relevant resolution; and

 

  •   are not Singapore Nominees,

  signify their assent to the resolution,

and a single notice can for these purposes constitute a circulating resolution
of both Boards if assented to by the requisite number of directors of both
Companies.

 

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  (c) A director who does not signify his or her assent to the relevant
resolution by the date specified in the notice is taken to have voted against
it.

 

  (d) If the required number of the directors assent to the resolution, the
resolution is passed on the last day and at the last time at which the document
was assented to by a director so that the requisite majority was satisfied.

 

6.6 Board resolutions - general

 

  (a) Despite any contrary provision in this agreement, a decision in relation
to any of the Board Fundamental Matters may be made only by Super Resolution of
both Boards (provided that this applies subject to any applicable legal
requirements, so that if a decision in relation to any Board Fundamental Matter
requires any higher majority to be obtained (or any additional requirement to be
met, including a requirement for shareholder approval) to be valid under any
applicable law that requirement must be satisfied in addition to a Super
Resolution of both Boards).

 

  (b) A Super Resolution of a Board will be passed where the resolution is
proposed at a duly convened meeting of the relevant Board and:

 

  (1) if both Shareholders are Major Shareholders at the relevant time:

 

  (A) each director present (if any) who is an Eligible Boral Director for the
purposes of the relevant resolution and who is not a Singapore Nominee; and

 

  (B) each director present (if any) who is an Eligible USG Director for the
purposes of the relevant resolution and who is not a Singapore Nominee,

votes in favour of the resolution; or

 

  (2) if only one Shareholder is a Major Shareholder at the relevant time, a
simple majority of votes that may be cast on the resolution (applying clause
6.4) are cast in favour of the resolution, provided that (unless none of the
directors appointed by the Major Shareholder is an Eligible Boral Director or an
Eligible USG Director for the purposes of the relevant resolution) the majority
must include a vote in favour by at least one director appointed by the Major
Shareholder who is not a Singapore Nominee.

 

  (c) Except for:

 

  (1) Board Fundamental Matters;

 

  (2) where otherwise provided expressly in this agreement; and

 

  (3) matters where a greater majority is required under any law to which either
of the Companies is subject,

a resolution of a Board is passed at a Board meeting if a simple majority of the
votes that may be cast on the resolution are cast in favour of it, provided that
if:

 

  (4) Boral has a Shareholding Percentage of at least 50% at the relevant time
and there is more than one Eligible Boral Directors in respect of the resolution
present at the meeting, such majority must include at least one Eligible Boral
Director who is not a Singapore Nominee; and

 

  (5) USG has a Shareholding Percentage of at least 50% at the relevant time and
there is more than one Eligible USG Directors in respect of the resolution
present at the meeting, such majority must include at least one Eligible USG
Director who is not a Singapore Nominee.

 

  (d) If a director other than a Singapore Nominee is not permitted to vote on a
resolution under any law applying to one of the Companies, he or she will be
taken to be not permitted to vote on the resolution in relation to either of the
Companies.

 

  (e) Without limiting clause 6.7, if a resolution of the shareholders of JVC 1
or JVC 2 (or both) is required under an applicable law to give effect to (or to
cause either or both of the Companies to give effect to) a resolution passed by
the Board of the relevant Company, each Shareholder must:

 

  (1) attend any shareholders’ meeting that is convened to consider any such
shareholders resolution; and

 

  (2) vote in favour of that resolution.

 

6.7 Shareholder approval matters

 

  (a) Subject to clauses 6.7(b) and 6.13, but otherwise despite any contrary
provision in this agreement, the Major Fundamental Matters are reserved to the
Major Shareholders and the Minor Fundamental Matters are reserved to the Major
Shareholders and the Minor Shareholders (if any). Subject to clauses 6.7(b) and
6.13 a decision in relation to any of the Fundamental Matters may be made only
by Unanimous Resolution of Shareholders in accordance with:

 

  (1) clause 6.7(e) and 6.7(f); or

 

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  (2) clause 6.7(g),

and the Companies must (and each Shareholder, to the extent within its power,
must procure that the Companies) comply with any such decision in relation to
any Fundamental Matter.

 

  (b) Clause 6.7(a) applies subject to any applicable legal requirements and so
that if a resolution in relation to any Fundamental Matter requires any higher
shareholder majority to be obtained (or any additional requirement to be met) to
be valid under any applicable law that requirement must be satisfied in addition
to the requirements in clause 6.7(a).

 

  (c) A Board may propose a resolution in relation to any of the Fundamental
Matters by written notice to the Shareholders (whether pursuant to
clause 6.7(e)(1) or clause 6.8(b)(1)) and must do so where requested by either
of the Shareholders.

 

  (d) The Companies and the Boards must not take, and must procure that no JV
Group Member takes, any action or decision or enter into any transaction which
would constitute a Fundamental Matter without a Unanimous Resolution of
Shareholders being passed in accordance with this agreement approving such
action or decision or the entry into such transaction.

 

  (e) A Unanimous Resolution of Shareholders will be passed where:

 

  (1) a notice containing the resolution is sent to each Shareholder by the
Companies stating that a response is required within a specified period (which
unless the Shareholders agree otherwise in writing may not be less than 21 days
after the notice is received (or deemed received under the Constitutions)); and

 

  (2) it is in respect to a Major Fundamental Matter and all Major Shareholders
(or where required by applicable law for the relevant resolution to be
effective, all Shareholders) signify their assent to the resolution by signing
and returning it to the Companies (provided that a Shareholder which does not
signify its assent to the relevant resolution by the date specified in the
notice is taken to have voted against it); or

 

  (3) it is in respect to a Minor Fundamental Matter and all Major Shareholders
and all Minor Shareholders (if any) (or where required by applicable law for the
relevant resolution to be effective, all Shareholders) signify their assent to
the resolution by signing and returning it to the Companies (provided that a
Shareholder which does not signify its assent to the relevant resolution by the
date specified in the notice is taken to have voted against it).

 

  (f) If the required number of Shareholders assent to a resolution in
accordance with clause 6.7(e)(2) or 6.7(e)(3) (as the case may be) that
resolution is passed as a Unanimous Resolution on the last day and at the last
time at which the document was assented to by a Shareholder so that the
requisite number of supporting Shareholders was satisfied.

 

  (g) Without limiting the foregoing, a Unanimous Resolution of Shareholders
will be passed where the resolution is proposed at a meeting of Shareholders
convened in accordance with clause 6.8 and:

 

  (1) where it is in respect to any matter other than a Minor Fundamental
Matter, all Major Shareholders vote in favour of such resolution; or

 

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  (2) where it is in respect to a Minor Fundamental Matter, all Major
Shareholders and Minor Shareholders (if any) vote in favour of such resolution.

 

  (h) For the avoidance of doubt, to the extent any Board Fundamental Matters
include or relate to Fundamental Matters, these will require approval by a
Unanimous Resolution of Shareholders.

 

6.8 Shareholder meetings

 

  (a) Unless there are no Fundamental Matters requiring consideration by the
Shareholders, whenever a Board meeting has been convened a meeting of the
Shareholders must also be convened in accordance with this clause 6.8 for the
time immediately following the relevant Board meeting (and in the same place as
the Board meeting). Additional Shareholder meetings must be convened in
accordance with this clause 6.8 if:

 

  (1) agreed by a majority of both Boards; or

 

  (2) requested by either Shareholder by notice in writing to the Companies.

 

  (b) Unless all the Shareholders agree otherwise in writing:

 

  (1) the Shareholders must receive at least 21 days’ notice in writing of a
meeting of the Shareholders that specifies the date, time and place of meeting,
the agenda specifying in reasonable detail the matters to be discussed at the
meeting and the resolutions to be proposed (including in respect to any
Fundamental Matters) and attaching all documents to be tabled at that meeting;

 

  (2) the Shareholders cannot pass a resolution or transact any business unless
the subject of that resolution or that business was specifically described in
the notice of meeting.

 

  (c) Meetings of the Shareholders will constitute general meetings of the
members of each Company, which will be held concurrently with each other.

 

  (d) No matter or business may be transacted at a meeting of Shareholders
unless a quorum of Shareholders is present at the time the matter or business is
dealt with (including, for the avoidance of doubt, at the time the Shareholders
vote on any resolution proposed in respect to that matter or business).

 

  (e) A quorum for a Shareholders’ meeting is constituted by the attendance (in
person or by proxy) of each Major Shareholder and (to the extent the business of
the meeting includes any Minor Fundamental Matter) each Minor Shareholder.

 

  (f) If a quorum is not present, the scheduled Shareholders’ meeting must be
adjourned in accordance with the procedure for adjournment of directors meetings
specified in clauses 6.1(c), 6.1(d), and 6.1(e).

 

  (g) For the avoidance of doubt, in no circumstances may the Shareholders pass
a Unanimous Resolution unless a quorum meeting the requirements in clause 6.8(e)
is present.

 

  (h) A Shareholder may appoint a person (including any director it has
appointed to either Board) as a proxy to attend and vote for the Shareholder at
any Shareholders meeting by submitting a written appointment to the Companies
that is signed by the Shareholder and contains the following information:

 

  (1) the Shareholder’s name and address;

 

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  (2) the Companies’ names;

 

  (3) the proxy’s name or the name of the office held by the proxy;

 

  (4) the meetings at which the appointment may be used (provided that the
appointment may be a standing one).

 

  (i) Shareholder meetings will be conducted in English and minutes of the
meetings will be kept in English (in addition to any other language required by
applicable law from time to time). The secretary of each meeting must distribute
a copy of such minutes to each Shareholder as soon as practicable after the
meeting

 

6.9 Voting at Shareholder meetings

 

  (a) Each Shareholder is entitled to that number of votes at a meeting of each
Company that is equivalent to its JVC 1 Percentage or its JVC 2 Percentage (as
applicable).

 

  (b) Except for Fundamental Matters or where otherwise expressly provided in
this agreement, and subject to any applicable law requiring a greater majority
in respect to a particular matter, approval of any matter by the Shareholders
requires a simple majority of votes cast on the resolution.

 

6.10 Related party dealings

 

  (a) For any matter before either Board that requires the Board to determine
whether any JV Group Member should bring a Company Claim against a Boral
Respondent, provided that USG’s Shareholding Percentage at the relevant time is
at least 12.5%:

 

  (1) the USG Directors have the power to cause the relevant JV Group Member to
bring that Company Claim (and may pass a Super Resolution of the Board in
relation to the relevant matter to the extent required by this agreement);

 

  (2) the quorum for any relevant Board meeting, while considering that matter,
will be the presence of at least one USG Director only (other than in the case
of JVC 1 a Singapore Nominee); and

 

  (3) the Boral Directors may not be present while that matter is considered and
may not vote on that matter.

 

  (b) For any matter before either Board that requires the Board to determine
whether any JV Group Member should bring a Company Claim against a USG
Respondent, provided that Boral’s Shareholding Percentage at the relevant time
is at least 12.5%:

 

  (1) the Boral Directors have the power to cause the relevant JV Group Member
to bring that Company Claim (and may for the avoidance of doubt pass a Super
Resolution of the Board in relation to the relevant matter to the extent
required by this agreement);

 

  (2) the quorum for any relevant Board meeting, while considering that matter,
will be the presence of at least one Boral Director only (other than in the case
of JVC 1 a Singapore Nominee); and

 

  (3) the USG Directors may not be present while that matter is considered and
may not vote on that matter.

 

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  (c) Any Shareholder whose nominated directors cause a JV Group Member to bring
a Company Claim under this clause 6.10 must indemnify that Company against any
cost or loss incurred by that Company to the extent that such cost or loss
arises as a direct result of the Company not succeeding in such Company Claim.

 

  (d) Clauses 6.10(a) and 6.10(b) also apply (as applicable, depending on
whether the seller of the relevant Sale Business is a Boral Respondent or a USG
Respondent) in relation to:

 

  (1) any decision by either Board whether, and if so on what terms, the
Companies (or any other JV Group Member) should make an offer to buy the
relevant Sale Business in the circumstances contemplated by clauses 10.4(b) and
10.4(c), including any decision approving a final binding offer; and

 

  (2) any decision by either Board in relation to any associated matters,
including conduct of due diligence in relation to the relevant Sale Business and
all matters relating to the implementation and completion of any acquisition
transaction,

as if references to a Company Claim in clauses 6.10(a) and 6.10(b) were
references to the relevant matter.

 

  (e) In relation to any Boral IP Option Matter:

 

  (1) provided that Boral’s Shareholding Percentage at the relevant time is at
least 12.5%, the Boral Directors have the power to take all relevant decisions
of either Board in relation to the Boral IP Option Matter (and may for the
avoidance of doubt pass a Super Resolution of the Board in relation to the
relevant matter to the extent required by this agreement);

 

  (2) the quorum for any relevant Board meeting, while considering any Boral IP
Option Matter, will be the presence of at least one Boral Director only (other
than in the case of JVC 1 a Singapore Nominee); and

 

  (3) the USG Directors may not be present while that matter is considered and
may not vote on that matter,

(provided that for the avoidance of doubt nothing in this clause 6.10(e) is
intended to fetter the rights of any relevant USG Group Member to conduct
negotiations as the counterparty in respect of the relevant Boral IP Option
Matter).

 

  (f) In relation to any USG IP Option Matter:

 

  (1) provided that USG’s Shareholding Percentage at the relevant time is at
least 12.5%, the USG Directors have the power to take all relevant decisions of
either Board in relation to the USG IP Option Matter (and may for the avoidance
of doubt pass a Super Resolution of the Board in relation to the relevant matter
to the extent required by this agreement);

 

  (2) the quorum for any relevant Board meeting, while considering any USG IP
Option Matter, will be the presence of at least one USG Director only (other
than in the case of JVC 1 a Singapore Nominee); and

 

  (3) the Boral Directors may not be present while that matter is considered and
may not vote on that matter,

(provided that for the avoidance of doubt nothing in this clause 6.10(f) is
intended to fetter the rights of any relevant Boral Group Member to conduct
negotiations as the counterparty in respect of the relevant USG IP Option
Matter).

 

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  (g) For clarity:

 

  (1) this clause 6.10 will not restrict involvement by a Shareholder’s
appointed directors in the ordinary day-to-day management of the Companies to
the extent permitted by this agreement; and

 

  (2) clauses 6.10(d), 6.10(e) and 6.10(f) do not permit the directors appointed
by a Shareholder to commit the Companies to expenditure or conduct that would be
a Fundamental Matter without the approval of a Unanimous Resolution of
Shareholders.

 

6.11 Delegation

 

  (a) Subject to clause 6.11(b) the directors may delegate any of their powers
to a committee of directors or executives of the JV Group as they think fit.

 

  (b) Decisions requiring Super Resolution of a Board must be approved by the
relevant Board and cannot be delegated.

 

6.12 Subsidiaries

Each party agrees, and must do all things reasonably necessary and within their
power to ensure, that (except as otherwise agreed by the Shareholders in
writing, and subject to any applicable shareholders agreements or similar
obligations to third parties where the relevant JV Group Member is itself a
joint venture entity):

 

  (a) the board and operation of each JV Group Member operate consistently with
the decisions of the Boards and the Shareholders; and

 

  (b) each JV Group Member must not effect any matter which would be a:

 

  (1) Board Fundamental Matter unless both Boards have passed the appropriate
resolution in accordance with clause 6.6; or

 

  (2) Fundamental Matter unless the Shareholders have passed the appropriate
resolution in accordance with clause 6.7.

 

6.13 De minimis Shareholder

Notwithstanding any other provision of this agreement, during any period in
which a Shareholder’s Shareholding Percentage is less than 12.5% (so that the
other Shareholder’s Shareholding Percentage is more than 87.5%), all Fundamental
Matters will be treated as Board Fundamental Matters so that:

 

  (a) clause 6.6(a) will apply to all decisions in relation to such matters for
the duration of that period; and

 

  (b) clause 6.7(a) will not apply to decisions in relation to such matters for
the duration of that period.

 

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7 Deadlock

 

 

 

7.1 Deadlock

For the purposes of this clause 7 a Deadlock will occur if any of (a), (b) or
(c) below applies:

 

  (a) Both Boards or the Shareholders (as relevant having regard to the nature
of the relevant matter) fail to pass a resolution for or against a particular
matter by the requisite majority required by this agreement either:

 

  (1) at 3 or more consecutive Board or Shareholder meetings (as relevant) at
which the particular matter is the subject of a resolution proposed in
accordance with this agreement (and for the avoidance of doubt any adjournments
of a Board or Shareholder meeting will count for these purposes as forming part
of the original meeting); or

 

  (2) within 6 months after the relevant matter is first the subject of a
resolution proposed to both Boards or Shareholders (unless withdrawn within that
period by the proponent party or director),

and, in either case, in the reasonable opinion of either Shareholder (acting in
good faith) doing, or not doing, the thing or things with which the relevant
matter is concerned:

 

  (3) would or may have a material adverse effect on the consolidated earnings
before interest, tax, depreciations and amortisation of the JV Group (determined
in accordance with the JV Group’s usual accounting policies at the relevant
time) for any Financial Year of more than US$40 million or 20% of the previous
year, whichever is higher;

 

  (4) would involve a material change in the overall nature of the Business; or

 

  (5) would or may have a material adverse impact on the reputation of any JV
Group Member or of either Shareholder (or a Parent or any Related Corporation of
a Shareholder) in any jurisdiction in which the relevant entity is registered or
conducts material operations.

 

  (b) Each of the following applies:

 

  (1) a decision or action in relation to a Board Fundamental Matter or a
Fundamental Matter has been taken by a JV Group Member without a Unanimous
Resolution of Shareholders or a Super Resolution of both Boards (as relevant);

 

  (2) the relevant decision or action is reasonably capable of reversal or
remedy; and

 

  (3) within 45 days after the matter is first brought before both Boards or the
Shareholders (as relevant):

 

  (A) the decision or action has not been ratified by Super Resolution of both
Boards or Unanimous Resolution of Shareholders (as relevant);

 

  (B)

no resolution has been passed by Super Resolution of both Boards or Unanimous
Resolution of Shareholders (as relevant) in relation to the action to be taken
to reverse or

 

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  remedy the relevant decision or action (or to the effect that the Boards or
Shareholders (as relevant) consider that no such action is required in the
circumstances); and

 

  (C) the relevant decision or action has not otherwise been reversed or
remedied to the reasonable satisfaction of both Shareholders.

 

  (c) Each of the following applies:

 

  (1) a JV Group Member has breached clause 1.3(d)(1) of this agreement,
clause 8.2(e) of this agreement or any IP Licence Agreement (in each case) in
any material respect;

 

  (2) the relevant breach is reasonably capable of reversal or remedy; and

 

  (3) within 45 days after the matter is first brought to the attention of the
Shareholders (which must by written notice from one Shareholder to the other, or
by the Companies to the Shareholders, specifying that the notice is for the
purposes of this clause 7.1(c)):

 

  (A) the Shareholders have not agreed in writing to the action to be taken to
reverse or remedy the breach (or to the effect that the Shareholders consider
that no such action is required in the circumstances); and

 

  (B) the relevant breach has not otherwise been reversed or remedied to the
reasonable satisfaction of both Shareholders.

 

7.2 Escalation process

 

  (a) If a Deadlock occurs, without limiting any other right a Shareholder may
have under this agreement and subject to clause 7.2(e), either Shareholder may
give the other Shareholder a written notice (Deadlock Notice) setting out the
matter in question (the Disputed Matter), its position on the matter and its
reasons for adoption of such position.

 

  (b) Following the issue of a Deadlock Notice, the parties must procure that
the Chief Executive Officers of Boral Guarantor and USG Guarantor meet and use
all reasonable endeavours in good faith to resolve the Disputed Matter as soon
as possible.

 

  (c) If the Disputed Matter remains unresolved within 21 days’ after the date
of the Deadlock Notice, the parties must procure that the matter is referred to
a ‘panel’ comprising the Chief Executive Officer and the lead independent
director of USG Guarantor on the USG side and the Chief Executive Officer and
the chairman of Boral Guarantor on the Boral side (or such other persons as the
Shareholders may agree) and that the ‘panel’ meets and uses all reasonable
endeavours in good faith to resolve the Disputed Matter as soon as possible.

 

  (d) If the Disputed Matter remains unresolved by the date (the Submission
Date) which is 21 days’ after referral to the ‘panel’ contemplated by
clause 7.2(c), the dispute must be submitted to mediation, on the following
basis:

 

  (1) the mediation must be conducted in Sydney, Australia in accordance with,
and subject to, The Institute of Arbitrators & Mediators Australia Mediation
Rules (at the date of this agreement), except where those rules conflict with
this clause 7.1(b);

 

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  (2) if the Shareholders have not agreed upon the mediator within 7 days’ after
the Submission Date the mediator is a person nominated by The Institute of
Arbitrators & Mediators Australia acting on the request of either Shareholder
(and multiple nominations may be requested to the extent necessary to identify a
mediator willing to act on the matter); and

 

  (3) the Shareholders must pay the mediator’s remuneration in equal shares.
Each party must pay its own costs of the mediation.

 

  (e) In the event a Deadlock also constitutes an Event of Default and a
Non-Defaulting Shareholder issues a Default Notice in accordance with
clause 14.2(a), then the Default Notice and the provisions of clause 14 will
prevail over this clause 7 and the Deadlock procedure contemplated by this
clause 7.1(b) and the remainder of clause 7 will immediately cease.

 

7.3 Sale process

If clause 7.2(d) requires the disputed matter to be submitted to mediation and
either:

 

  (a) the Disputed Matter remains unresolved by the date which is 6 weeks after
the matter is first referred to a mediator agreed or nominated under
clause 7.2(d); or

 

  (b) the Shareholders agree in writing that the mediation will not be
successful in resolving the dispute,

then, at any time during the period of 14 days’ following the date referred to
in clause 7.3(a) (or, if earlier, the agreement in writing referred to in
clause 7.3(b)), either Shareholder may, provided it is a Major Shareholder or a
Minor Shareholder at the relevant time, serve a written notice (Sale Notice) on
the other parties which states that the Shareholder requires a sale process to
be undertaken in accordance with the remaining provisions of this clause 7.

 

7.4 Appointment of investment bank

 

  (a) If a Shareholder issues a Sale Notice in accordance with clause 7.3, the
Shareholders and (unless the Shareholders agree that there will be no sale of
the Business) the Companies (the applicable parties being, in this clause, the
Appointing Parties) must use their best endeavours to appoint an investment bank
of international standing (Sale Agent) to conduct a trade sale process as
contemplated below.

 

  (b) If the Shareholders cannot agree on the identity of the Sale Agent within
14 days after the date of service of the Sale Notice, the Sale Agent will be an
investment bank drawn by lot from the following list by the Chair of the Boards
for the time being:

 

  (1) Goldman Sachs (or its successor entity)

 

  (2) Citi (or its successor entity)

 

  (3) Credit Suisse (or its successor entity)

 

  (4) UBS (or its successor entity)

 

  (5) Deutsche Bank (or its successor entity)

 

  (6) JP Morgan (or its successor entity)

 

  (7) Bank of America (or its successor entity)

 

  (8) Morgan Stanley (or its successor entity)

 

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and so that if the selected bank is unable or unwilling to accept the
appointment, another name will be drawn by lot by the Chair until a bank accepts
the appointment (and each party authorises the Chair for the time being to act
accordingly).

 

  (c) Subject always to clause 7.4(e), the Appointing Parties must execute an
engagement letter on reasonable market terms with the Sale Agent selected in
accordance with the preceding clauses and instruct and authorise the Sale Agent
to conduct a trade sale process seeking binding offers to buy:

 

  (1) all or substantially all of the Business; or

 

  (2) all of the JV Shares on issue at the relevant time,

(the JV Enterprise).

 

  (d) Subject always to clause 7.4(e), the Appointing Parties must instruct and
authorise the Sale Agent to conduct the trade sale process so as to maximise the
value received for the JV Enterprise. Without limiting the foregoing, the
Appointing Parties must instruct the Sale Agent to:

 

  (1) adopt a competitive tender process which is consistent with market
practice for the sale of companies or businesses of a similar size as the JV
Group and its Business, and which operate in similar industries;

 

  (2) solicit and initiate negotiations with potential offerors who may include
the Shareholders, the Parents or their respective Affiliates;

 

  (3) use all reasonable endeavours to obtain the maximum possible offer price
for the JV Enterprise within 180 days after the date of the Sale Notice
(provided that an offer from an existing Shareholder will be considered on the
basis that that Shareholder is only required to purchase the part of the JV
Enterprise it does not already own and that the price offered would be reduced
proportionately);

 

  (4) prepare commercially reasonable terms of sale for the JV Enterprise
(having regard to market practice) and negotiate and agree, as necessary, any
amendment to those terms requested by potential offerors to the extent that the
Sale Agent considers that the amendment is commercially reasonable and
consistent with market practice for commercial transactions of substantially
similar nature and complexity (provided that the terms must be such as to allow
termination without liability to the vendors in the circumstances contemplated
by clause 7.7(a)(5));

 

  (5) use all reasonable endeavours to ensure that potential purchasers deal
exclusively with the Sale Agent in respect of the sale of the JV Enterprise (and
not the Shareholders or any JV Group Members);

 

  (6) ensure that potential offerors (other than the Shareholders, their Parents
or Affiliates) are not given access to JV Information or Shareholder Information
in relation to any Shareholder unless the relevant person first enters into a
deed poll in favour of the parties to this agreement whereby it agrees to comply
with provisions substantially similar to those contained in clause 18; and

 

  (7) act in the best interests of each Shareholder in performing the functions
in this clause 7.4 and clause 7.5, and not prefer the interests of one
Shareholder over the other.

 

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  (e) The Appointing Parties must instruct the Sale Agent as follows:

 

  (1) if the Shareholders provide warranties or indemnities to a purchaser of
the JV Enterprise in respect of the Companies or the Business, the Sale Agent
must ensure that the liability of the Shareholders under any such warranty or
indemnity is apportioned between the Shareholders in proportion to their
Shareholding Percentages;

 

  (2) the Sale Agent must have regard to the terms of the Share Sale and
Subscription Agreements at the completion of which this agreement was entered
into (the Sale Agreements) and so that:

 

  (A) the liability regime governing the liability of the Companies (in the case
of a sale of the Business) or a Shareholder (in the case of a sale of the JV
Shares) to a purchaser of the JV Enterprise (both in terms of financial
thresholds and caps as a percentage of purchase price, and general limitations
and exclusions) must not be materially more onerous than the corresponding
regime applicable to the parties under the Sale Agreements; and

 

  (B) a Shareholder must not without its prior written consent be bound by any
material undertaking or obligation in relation to the transaction unless a
reasonably corresponding provision was applicable in relation to vendor parties
under the Sale Agreements;

 

  (3) the sale documents agreed with the potential purchaser will include an
enforceable regime limiting the operations of the JV Group and the conduct of
its Business to the Territory (provided that this is not intended to limit any
party’s obligations under clause 10 of this agreement); and

 

  (4) a Shareholder must not, without its prior written consent, be bound by any
undertaking or obligation which would restrict the Shareholder (or its Parent or
Affiliates) from carrying on or otherwise having an interest in, or engaging in,
any business (provided that this is not intended to limit any party’s
obligations under clause 10 of this agreement).

 

  (f) The Appointing Parties must instruct and authorise the Sale Agent to
report to the Appointing Parties at the conclusion of the sale process
detailing:

 

  (1) the binding offers received for the JV Enterprise;

 

  (2) the offer (including identity of the offeror, the price and full terms of
sale and purchase) which in the Sale Agent’s opinion represents the highest
value for the JV Enterprise in all the circumstances, including having regard to
conditionality and the ability of the offeror to conclude the transaction (the
Best Offer),

provided that the Sale Agent may only nominate an offer as the Best Offer if the
Sale Agent is satisfied the terms of the offer are consistent with the
requirements of clause 7.4(d)(4) and if clause 7.4(e) is complied with in
relation to the offer.

 

7.5 Acceptance of Best Offer

 

  (a) Either Shareholder may within 14 days of receipt of the Sale Agent’s
nomination of the Best Offer (the First Response Period) give written notice to
the other Shareholder and the Companies to the effect that it requires the Best
Offer to be accepted (an Execution Notice).

 

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  (b) If neither Shareholder gives an Execution Notice within the First Response
Period, clause 7.7 will apply.

 

  (c) If a Shareholder gives an Execution Notice within the First Response
Period, the other Shareholder will have the right (Call Right) by notice to the
first Shareholder and the Companies within a further 14 days after receipt of
the Execution Notice (the Second Response Period) to purchase the JV Enterprise
on the terms of the Best Offer in accordance with the remaining provisions of
this clause 7.5. If both Shareholders give an Execution Notice within the First
Response Period only the first notice issued (measured by time of receipt by the
Companies) will be valid for the purposes of this clause 7.5.

 

  (d) If a Shareholder exercises it Call Right within the Second Response Period
(Exercising Shareholder), the relevant parties must within 45 days after
exercise enter into a binding agreement for the sale of the JV Enterprise to the
Exercising Shareholder at the price and on the terms of the Best Offer (or on
such other terms as the Shareholders may agree in writing), provided that:

 

  (1) if the Best Offer contemplates the acquisition of all JV Shares (as
opposed to the Business) the terms will be amended to the extent reasonably
required to ensure that the Exercising Shareholder is only required to purchase
the JV Shares it does not already own (and the price will be reduced
proportionately); and

 

  (2) the terms will be amended to include conditions precedent in relation to
material Consents identified by the Exercising Shareholder.

 

  (e) Where an agreement is entered into pursuant to clause 7.5(d) but
terminates before closing of the sale as a result of failure to obtain any
Consent identified by the Exercising Shareholder, then to the extent the Best
Offer remains open for acceptance the Appointing Parties must instruct and
authorise the Sale Agent to accept the Best Offer on their behalf within 60 days
from the termination, to execute the transaction on their behalf in accordance
with the terms of the Best Offer, and to remit the proceeds to the Shareholders
or the Companies (as applicable including in light of whether a Shareholder
submitted the Best Offer).

 

  (f) If a Shareholder gives an Execution Notice within the First Response
Period and the other Shareholder does not exercise its Call Right within the
Second Response Period, the Appointing Parties must instruct and authorise the
Sale Agent to accept the Best Offer on their behalf, to execute the transaction
on their behalf in accordance with the terms of the Best Offer, and to remit the
proceeds to the Shareholders or the Companies (as applicable including in light
of whether a Shareholder submitted the Best Offer).

 

  (g) If the sale of the JV Enterprise under this clause 7.5 involves the sale
of all or substantially all of the Business, the parties must take all
reasonable steps to ensure that the net proceeds of the sale are returned to
Shareholders in proportion with their respective Shareholding Percentages as
soon as reasonably possible.

 

7.6 Support to Sale Agent

 

  (a) Each Appointing Party must appoint the Sale Agent as its agent to perform
the functions specified in clauses 7.4 and 7.5, and must do all things
reasonably necessary to authorise the Sale Agent to perform those functions (and
do all other things which the Sale Agent considers necessary or incidental to
those functions) on its behalf, including executing any document reasonably
requested by the Sale Agent for the purpose of providing such authority.

 

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  (b) Each party must cooperate with, and provide all reasonable access and
assistance required by the Sale Agent and potential purchasers in relation to
the sale of the JV Enterprise, including access to due diligence materials and
personnel involved in the management of the JV Group and the Business.

 

  (c) The Shareholders must bear the fees and disbursements charged by the Sale
Agent in respect of the sale of the JV Enterprise (and any indemnities under the
Sale Agent’s customary engagement terms) in proportion to their Shareholding
Percentages.

 

7.7 Failure of process

 

  (a) This clause 7.7 will apply if a Shareholder issues a Sale Notice in
accordance with clause 7.3 but any of the following occurs (each a Failure
Event):

 

  (1) the parties do not agree on a Sale Agent and no investment bank specified
in clause 7.4(b) is willing or able to accept the appointment;

 

  (2) a Sale Agent is appointed but no credible offers for the JV Enterprise are
received within 180 days after the Sale Agent’s appointment or the Sale Agent is
unwilling or unable to identify a Best Offer which meets the requirements of
clause 7.4(f) within 180 days after the Sale Agent’s appointment;

 

  (3) a Best Offer is identified but neither Shareholder gives an Execution
Notice within the First Response Period;

 

  (4) clause 7.5(e) applies, but the Best Offer is withdrawn, the relevant
counterparty defaults or the transaction is otherwise not concluded on the Best
Offer terms within the timeframe required by that clause;

 

  (5) the JV Enterprise otherwise remains unsold 12 months after the date of the
Sale Notice (whether because an agreement to sell the JV Enterprise has been
entered into but fails to close within that timeframe or for any other reason).

 

  (b) If this clause 7.7 applies in respect of a Sale Notice no party will have
any further right or obligation in relation to the sale of the JV Enterprise
after the relevant Failure Event unless a further Sale Notice is given in
respect of a Deadlock in accordance with this agreement. However this does not
prevent either Shareholder subsequently serving a Deadlock Notice (or by
extension a Sale Notice) on the other in respect of the Deadlock that gave rise
to the original Sale Notice to the extent that:

 

  (1) if that Deadlock occurred under clause 7.1(a), both Boards or the
Shareholders (as relevant having regard to the nature of the relevant matter)
have not by the time of the Failure Event passed a resolution for or against a
particular matter by the requisite majority required by this agreement

 

  (2) if that Deadlock occurred under clause 7.1(b), clauses 7.1(b)(3)(A),
(B) and (C) continue to apply in relation to the relevant decision or action at
the time of the Failure Event; and

 

  (3) if that Deadlock occurred under clause 7.1(c), clauses 7.1(c)(3)(A)
continue to apply in relation to the relevant decision or action at the time of
the Failure Event.

 

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Part B – Business operations

 

 

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8 Conduct of business

 

 

8.1 Strategic Plan and Budget

 

  (a) The agreed initial Strategic Plan for the period to 30 June 2018 is
attached to this agreement as Attachment 1.

 

  (b) The parties must use their respective best endeavours to ensure that no
later than 2 months before the commencement of:

 

  (1) each Financial Year the Boards are in a position to consider, and if
thought fit, resolve to adopt under clause 6.6 an annual Budget for the
following Financial Year and a rolling 5 year Strategic Plan for the following 5
Financial Years; and

 

  (2) each calendar year the Boards are in a position to consider and if thought
fit, resolve to adopt under clause 6.6 an annual Budget for the following
calendar year.

 

  (c) The Strategic Plan or Budget (or both) may be amended or replaced at any
time and from time to time as a Board Fundamental Matter.

 

  (d) The Shareholders must use all reasonable endeavours to ensure that the JV
Group conducts the Business in accordance with the Strategic Plan and Budget
from time to time (but this does not oblige any Shareholder to provide any form
of funding or financial assistance).

 

8.2 Conduct of business

Each of the Companies must ensure that, and each party must use its reasonable
endeavours to ensure that:

 

  (a) books and records: each JV Group Member keeps books of account and make
true and complete entries in them of all its dealings and transactions, and
ensure that such books of account and other records of the relevant entity are
maintained in accordance with applicable laws;

 

  (b) government requirements: each JV Group Member complies with the
requirements of any Government Agency relating to the conduct of the Business
and its assets;

 

  (c) complies with law and Transaction Documents: each JV Group Member complies
with all applicable Legal Requirements and with the terms of each Transaction
Document to which it is party;

 

  (d) complies with sanctions: each JV Group Member complies with any sanction,
embargo or other trade restriction or disclosure requirement imposed by virtue
of the involvement of either Shareholder as holders of JV Shares or parties to
this agreement (provided such matters have been advised to the Companies by the
affected Shareholder);

 

  (e) anti bribery: without limiting the foregoing:

 

  (1) each JV Group Member at all times conducts its business, and is otherwise,
in compliance with:

 

  (A) all Anti-Corruption Laws to which the JV Group Member is subject from time
to time; and,

 

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  (B) without limiting the foregoing and during any period which a USG Group
Member’s Shareholding Percentage is 37.5% or more, the United States Foreign
Corrupt Practices Act 1977;

 

  (2) no JV Group Member nor any of their Representatives nor any other person
acting on their behalf:

 

  (A) takes any action directly or indirectly that would result in a violation
of any applicable Anti-Corruption Law (including anti-money laundering laws);

 

  (B) comes under administrative, regulatory, civil or criminal investigation,
indictment, audit or internal investigation with respect to any suspected,
alleged or actual violation of any Anti-Corruption Law;

 

  (C) makes any offer, payment or promise or authorises the payment of any
money, or other property, gift, promise to give, or authorisation of the giving
of, anything of value, directly or indirectly, to: (i) any Government Official;
(ii) any person while having reason to believe that all or a portion of such
money or thing of value will be offered, given, or promised, directly or
indirectly, to a Government Official; or (iii) any other person if, in any such
case, such payment or transfer would violate the laws of the country in which it
is made or the laws of any other relevant jurisdiction; or

 

  (D) accepts or receives any improper or unlawful contributions, payments,
gifts, or expenditures in connection with the operation of their businesses;

 

  (3) no payments or transfers of value are made directly or indirectly by any
JV Group Member, their respective Representatives or any other person or entity
acting on behalf of any of them, having the purpose or effect of public or
commercial bribery, acceptance of or acquiescence in extortion, kickbacks, or
other unlawful or improper means of obtaining or retaining business or securing
improper business advantage.

 

  (f) codes of conduct: complies with any codes of conduct or policies approved
by the Boards as a Super Resolution;

 

  (g) safety: complies with industry best practice in relation to safety issues
in the conduct of its operations; and

 

  (h) corporate existence: maintains its corporate existence (except in the case
of a winding up or deregistration approved in accordance with this agreement).

 

8.3 Tax

Each party to this agreement acknowledges and agrees:

 

  (a) to cooperate with the USG Group in good faith to ensure that the ownership
of entities by the JV Group are structured to enable the USG Group to maintain
the level of ownership required by section 902 of the Code;

 

  (b) that the shares and assets owned by the following entities are subject to
a gain recognition agreement filed with the U.S. government and that the JV
Group will not sell or cause to be sold the shares or assets of these businesses
prior to January 1, 2019:

 

  (1) USG Manufacturing Worldwide Ltd;

 

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  (2) USG ChinaLux S.a.r.l.;

 

  (3) Star-USG Building Materials Co., Ltd;

 

  (4) USG Asia Pacific Holdings Pte. Ltd;·

 

  (5) USG Interiors Pacific Ltd;

 

  (6) USG Interiors Australia Pty Ltd; and·

 

  (7) USG Cayman Holdings Ltd;

 

  (c) that the USG Guarantor, as a US-based multinational, is subject to various
detailed reporting requirements (as amended from time to time) and to comply
with these reporting requirements the USG Group will require, and the Companies
will provide (and will procure that each JV Group Member provides):

 

  (1) detailed information regarding the computation of earnings and profits of
each JV Group Member and the nature of those earnings;

 

  (2) receipts evidencing foreign taxes paid by each JV Group Member; and

 

  (3) any other information the USG Group requires in respect to the JV Group in
order to comply with its reporting obligations to a Government Agency;

 

  (d) that the Boral Guarantor, as an Australian-based multinational, is subject
to various detailed reporting requirements (as amended from time to time) and to
comply with these reporting requirements the Boral Group will require, and the
Companies will provide (and will procure that each JV Group Member provides) any
information the Boral Group requires in respect to the JV Group in order to
comply with its reporting obligations to a Government Agency;

 

  (e) that the JV Group will make any tax election with respect to any matters
relating to taxation in the United States of America that a USG Group Member
reasonably requests provided it does not create any detrimental effect to the
entity making the election or to the JV Group or the Boral Group.

 

8.4 Periodic reports

Without limiting clause 8.3, the Companies must ensure that, and each
Shareholder must use its reasonable endeavours to ensure that, the Companies
provide reasonable information and updates to Shareholders in relation to the
operations and performance of the JV Group, including:

 

  (a) as soon as practicable after the end of each quarter of a Financial Year,
but no later than 7 days after the end of that quarter:

 

  (1) a profit and loss statement and quarterly cash flow statement for the
quarter and for the current Financial Year to date; and

 

  (2) a balance sheet as at the end of the quarter,

each prepared in accordance with IFRS (reconciled with US GAAP) and a quarterly
review will be completed and provided to Deloitte Chicago in accordance with its
specified processes no later than 12 business days (based on business days in
Chicago) after the end of the quarter;

 

  (b) as soon as practicable following the end of each Financial Year, an
audited profit and loss statement, cash flow statement and balance sheet for
that Financial Year, prepared in accordance with IFRS (reconciled with US GAAP);

 

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  (c) as soon as practicable following 31 December in each calendar year (and in
any event no later than 25 days after 31 December), an audited profit and loss
statement, cash flow statement and balance sheet for the 12 month period ending
on that date, prepared in accordance with IFRS (reconciled with US GAAP);

 

  (d) as soon as practicable (and in any event no later than 7 days) after the
end of each calendar month, unaudited management accounts, which must include a
detailed statement of financial performance, statement of financial position and
cash-flow statement and an analysis of sales and other revenues; and

 

  (e) any other information reasonably requested by any Shareholder (at its
cost) to satisfy any local or overseas reporting requirement to any Government
Agency or regulatory body which has jurisdiction over the Shareholder,

and that, without limiting any of the time periods specified above, so far as
practicable the timing of delivery of such information takes into account the
reporting obligations of each Shareholder (and their respective Parents).

 

8.5 Access to information

 

  (a) Subject to clause 18, each Shareholder may, at its own expense (but
subject to providing reasonable advance notice of at least 2 Business Days and
not unduly interfering with the operations of the Business):

 

  (1) inspect and make copies of all Records; and

 

  (2) have access to personnel, assets and operations of each JV Group Member,

including for the purposes of a Shareholder conducting an external audit of the
JV Group.

 

  (b) The Companies must (and must procure that each JV Group Member)
co-operates fully in any such inspection, including by providing appropriate and
secure office facilities in the relevant premises, providing copies of any
Records and making appropriate personnel available to answer questions.

 

  (c) Each director may provide its appointing Shareholder with any information
acquired by the director in his or her capacity as a director of either of the
Companies (or of any other JV Group Member). For the avoidance of doubt
clauses 10 and 18 apply in relation to use and disclosure of such information by
the Shareholders.

 

8.6 Auditor

 

  (a) The parties agree that the JV Group will appoint:

 

  (1) KPMG as auditor in respect of JVC 2 and its Subsidiaries for the Financial
Year ending 30 June 2014;

 

  (2) Deloitte as auditor in respect of JVC 1 and its Subsidiaries for the
Financial Year ending 30 June 2014.

 

  (b) In respect of subsequent Financial Years Deloitte must be appointed as
sole auditor for the JV Group unless otherwise agreed as a Major Fundamental
Matter by Unanimous Resolution of Shareholders.

 

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  (c) Audits must be conducted in accordance with:

 

  (1) the standards of the Public Company Accounting Oversight Board (United
States) and the U.S. Securities and Exchange Commission; and

 

  (2) the Corporations Act 2001, Australian Accounting Standards and the
Corporations Regulations 2001 (Cth),

provided that, in the event of any inconsistency, the Shareholders will discuss
in good faith an appropriate solution.

 

8.7 Dividends

 

  (a) The Companies’ Dividend policy will be to target distribution of 50% of
the combined after tax profit of the JV Group to Shareholders (in proportion to
each Shareholders’ Shareholding Percentage at the relevant time), with the
balance to be retained for reinvestment into the business, unless the
Shareholders decide to adopt a different policy by Unanimous Resolution.

 

  (b) Despite clause 8.7(a) (and subject to clause 8.7(c)), profits of the JV
Group must not be distributed and must be retained to the extent necessary:

 

  (1) to ensure that the financing facilities of the JV Group from time to time
are complied with;

 

  (2) to ensure that a sufficient amount has been set aside for working capital,
investment and expansion as specified in the Strategic Plan for the relevant
period;

 

  (3) to ensure that any distribution by a Company does not exceed the amount
legally available for distribution by that Company; and

 

  (4) to ensure that the each JV Group Member is able meet any capital adequacy
or solvency requirements, and is able to pay its debts as and when they fall
due.

 

  (c) If JVC 2:

 

  (1) has profits that may be paid as fully franked dividends consistently with
the Dividend policy in force at the relevant time; but

 

  (2) is not permitted to distribute those profits under clause 8.7(b),

JVC 2 may distribute those profits as fully franked dividends on condition that
each Shareholder agrees to forthwith subscribe an equivalent amount for new JV
Shares on a pro-rata basis proportionate to its Shareholding Percentage at the
time (and the Boards may determine the respective subscription prices per JVC 1
Share and JVC 2 Share on the basis that they need not be the same).

 

  (d) The Boards may by Super Resolution of both Boards cause either or both
Companies to declare and pay a Dividend subject to and in accordance with
clauses 8.7(a) to 8.7(c).

 

8.8 Insurance

 

  (a) Unless otherwise agreed by the Shareholders, each Shareholder must
independently purchase and maintain customary insurance for each of their
nominee directors on either Board for any liability incurred by the director as
a director of either of the Companies (or of any other JV Group Member).

 

  (b) Subject to clause 8.8(a), the Companies must ensure that, and each
Shareholder must use its reasonable endeavours to ensure that, the JV Group
maintains such customary insurances for such amounts as are generally maintained
by companies undertaking similar business to that of the JV Group.

 

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8.9 Further funding

 

  (a) In the event that the JV Group requires additional funding, the parties
agree that such funding should be sourced in the following order of preference:

 

  (1) first from operating cash flows of the JV Group;

 

  (2) second, from third party financiers utilising the JV Group’s borrowing
capacity; and

 

  (3) third, from capital calls to Shareholders in accordance with the remaining
provisions of this clause 8.9.

 

  (b) The Shareholders agree that the Companies will not call for any capital
from the Shareholders unless the Companies have used all reasonable endeavours
to raise sufficient funds from third party financiers (to the extent operating
cash flows are insufficient) and there remains a funding shortfall.

 

  (c) Unless the Shareholders agree otherwise in relation to any individual
call, the parties must ensure that any call for capital:

 

  (1) is approved by a Unanimous Resolution of Shareholders as a Major
Fundamental Matter;

 

  (2) is limited to the amount required to fund the relevant shortfall (as
referred to in clause 8.9(b));

 

  (3) (subject always to clause 8.9(f)) specifies the form in which capital is
to be provided (being JV Shares, other securities or debt) and the key terms of
such provision;

 

  (4) is offered to each Shareholder on a pro-rata basis proportionate to its
Shareholding Percentage and on the same terms; and

 

  (5) specifies an agreed valuation basis for the purposes of any dilution of a
Shareholder’s Shareholding Percentage in the circumstances contemplated by
clause 8.10,

or is made in accordance with clause 8.9(h).

 

  (d) A call for capital must be made by notice in writing from the Companies to
each Shareholder (given no later than 21 days after the date of approval of the
relevant call, or in accordance with clause 8.9(h) where applicable) which
confirms the details in clauses 8.9(c)(1) to 8.9(c)(5) above (or clauses
8.9(h)(3) to 8.9(h)(6) in the case of a call made under clause 8.9(h)) and
specifies the date by which the capital call is to be satisfied, which shall be:

 

  (1) no earlier than 30 days after the date of the notice; and

 

  (2) a Business Day,

(such a notice being a Valid Funding Notice)

 

  (e) For the avoidance of doubt, no Shareholder has any obligation to fund in
response to a Valid Funding Notice or other capital call. Where the Companies
issue a Valid Funding Notice:

 

  (1) to the extent either Shareholder contributes capital in response to the
call within the time period specified in the Valid Funding Notice, the Companies
must issue JV Shares to that Shareholder (in accordance with clause 19) or
otherwise comply with the terms of the Valid Funding Notice; and

 

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  (2) if one Shareholder contributes in full its Shareholding Percentage of the
call in the time period specified in the Valid Funding Notice but there is a
shortfall in capital provided in response to the Valid Funding Notice because
the other Shareholder (the Non-Funding Shareholder) has not contributed in full
(or at all) its Shareholding Percentage of the call in the time period specified
in the Valid Funding Notice (with the unpaid amount being the Shortfall Capital)
then the Companies must immediately notify the other Shareholder and the other
Shareholder may elect to contribute all (but not some only) of the Shortfall
Capital in accordance with clause 8.9(f),

and for the avoidance of doubt if there is a funding shortfall because neither
Shareholder has satisfied the call in proportion to its Shareholding Percentage
(whether or not either has funded a portion) neither party will be entitled to
fund the other’s shortfall.

 

  (f) If a Shareholder elects to contribute all of the Shortfall Capital under
clause 8.9(e)(2) that Shareholder must contribute the relevant amount within 7
days after the Shareholder is notified of the Shortfall Capital by the relevant
Company (and otherwise it will be taken to have elected not to contribute the
relevant funds). Any such contribution will be:

 

  (1) to the extent that the terms set out in the Valid Funding Notice did not
include subscription and issue of JV Shares (that is the funding is not dilutive
to any Shareholder’s Shareholding Percentage), on the terms set out in the Valid
Funding Notice; and

 

  (2) subject to clause 8.9(g), otherwise on the terms below:

 

  (A) the Shortfall Capital will initially be contributed as separate unsecured
loans to the Companies (in proportion to the relative amounts required to be
subscribed for JVC 1 Shares and JVC 2 Shares under the Valid Funding Notice),
each on the Loan Terms or on such other terms as the Shareholders may agree in
the circumstances (each a Shortfall Loan);

 

  (B) if the Non-Funding Shareholder contributes the relevant Restoration Amount
within the Catch-Up Period pursuant to clause 8.10, the proceeds of such
contribution must immediately be applied in satisfaction of the Shortfall Loans;
and

 

  (C) if the Non-Funding Shareholder fails to contribute the relevant
Restoration Amount within the Catch-Up Period pursuant to clause 8.10, the
outstanding amounts of the Shortfall Loans (including accrued interest) must be
satisfied by applying them so that the Shareholder that elected to contribute
all of the Shortfall Capital subscribes for and is issued JV Shares at the price
per share set out in the Valid Funding Notice (and otherwise on the terms set
out in the Valid Funding Notice, to the extent applicable in the circumstances).

 

  (g) If the Shortfall Capital is less than US$25 million (or its equivalent in
any other currency), unless all Major Shareholders agree in writing,
irrespective of the terms of the relevant Valid Funding Notice, any contribution
of Shortfall Capital by a Shareholder must take the form of loan finance, to be
provided on arm’s length market terms (with no subscription for equity).

 

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  (h) Notwithstanding the foregoing, if during any period in which there are two
Major Shareholders:

 

  (1) a proposed capital call on Shareholders has been put forward for approval
and a Unanimous Resolution of Shareholders approving such capital call has not
been passed within 30 days (in circumstances where clause 8.9(b) has been
complied with); and

 

  (2) in the reasonable opinion of a Major Shareholder (acting in good faith),
either Company is likely to suffer an Insolvency Event within 60 days if funding
is not provided,

that Major Shareholder may, acting in good faith, by notice to the Companies and
the other Shareholders require the Companies to issue a funding notice on terms
specified by that Major Shareholder provided that such terms must:

 

  (3) be limited to the amount of funding required to avoid the apprehended
Insolvency Event;

 

  (4) specify the form in which the funding is to be provided (being JV Shares,
other securities or debt) and the key terms of such provision;

 

  (5) be offered to each Shareholder on a pro-rata basis proportionate to its
Shareholding Percentage and on the same terms;

 

  (6) specify a valuation basis for the purposes of any dilution of a
Shareholder’s Shareholding Percentage in the circumstances contemplated by
clause 8.10, which is based on a good faith valuation of each of the Companies
at the relevant time,

and the Companies must comply with such a request within 10 days (in which case
the relevant funding notice will constitute a Valid Funding Notice for the
purposes of this clause 8.9).

 

  (i) For the avoidance of doubt where a Valid Funding Notice has been issued in
accordance with this agreement, any further issues of securities or entry into
loan arrangements required under this clause 8.9 or clause 8.10 will not require
further approval as a Board Fundamental Matter or Fundamental Matter.

 

8.10 Anti-dilution

 

  (a) This clause 8.10 applies in circumstances where:

 

  (1) the relevant Valid Funding Notice required capital to be contributed in
the form of subscription for JV Shares; and

 

  (2) there is a Non-Funding Shareholder and the other Shareholder is entitled
to, and does, contribute all of the Shortfall Capital under clause 8.9(e)(2).

 

  (b) Where this clause 8.10 applies, the Non-Funding Shareholder will have 90
days from the date of contribution of the Shortfall Capital (Catch-Up Period)
during which it may contribute, by way of subscription for JV Shares all (but
not less than) the amount (the Restoration Amount) equal to:

 

  (1) the amount of the Shortfall Capital; plus

 

  (2) the amount of accrued interest under the relevant Shortfall Loans as at
the relevant date.

 

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  (c) If the Non-Funding Shareholder contributes the Restoration Amount in full
within the relevant period, the Companies must allot and issue JV Shares (in
accordance with clause 19) to the Non-Funding Shareholder on the basis that:

 

  (1) the same number of JV Shares will be issued as would have been issued to
the Non-Funding Shareholder had the Non-Funding Shareholder contributed in full
its Shareholding Percentage of the relevant call in the time period specified in
the original Valid Funding Notice; but

 

  (2) the subscription price per share in each Company will be increased (so
that the effective price per share in each Company is the relevant proportion of
the Restoration Amount divided by the number of shares issued to the Non-Funding
Shareholder, rather than the price per share specified in the original Valid
Funding Notice).

 

  (d) The above will apply with appropriate modifications to the extent that
only a portion of the Valid Funding Notice related to subscription for JV Shares
(such that only the relevant portion of the overall amount of the Shortfall
Capital was contributed under clause 8.9(e)(2)).

 

8.11 Guarantees

 

  (a) Neither Shareholder (and neither Shareholder’s Parent or Affiliates) will
have any obligation to guarantee or provide similar surety or credit support in
relation to the obligations of any JV Group Member.

 

  (b) If any such guarantees are agreed to be given, they will (unless otherwise
agreed between all Shareholders in writing) be on a several basis pro rata to
the Shareholders’ respective Shareholding Percentages, with appropriate cross
indemnity arrangements.

 

8.12 Related party dealings

Each Shareholder must ensure that any arrangement or transaction between the JV
Group and that Shareholder or an Affiliate of that Shareholder is:

 

  (a) on commercial terms and on an arm’s length basis; and

 

  (b) terms that are otherwise not unfairly prejudicial to the interests of the
JV Group or either Shareholder (or its Affiliates).

 

9 Branding and IP

 

 

 

9.1 Branding

 

  (a) The Shareholders must procure that (unless the Shareholders agree
otherwise):

 

  (1) the Companies trade as ‘USG-Boral Building Products’; and

 

  (2) that the name ‘USG-Boral Building Products’ or another trade mark forming
part of the JV IP appears on all products manufactured or sold by the JV Group.

 

  (b) The brand and trademark strategy (and any changes to the brand and
trademark strategy) developed and implemented by the JV Group is a Major
Fundamental Matter.

 

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  (c) Each JV Group Member will ensure that all products manufactured or sold by
the JV Group in the Territory will be sold on the condition that such products
are for sale and use only within the Territory and shall not to be sold, offered
for sale, supplied for or used outside the Territory.

 

9.2 IP Licence Agreements

The parties acknowledge that certain Related Corporations of the Shareholders
have entered into the IP Licence Agreements licensing certain Intellectual
Property Rights to the Companies and establishing other obligations and rights
among the parties to those agreements in relation to the relevant Intellectual
Property Rights.

 

9.3 Protection of JV IP

 

  (a) Schedule 8 sets out:

 

  (1) in Part 1, the initial list of High Risk Jurisdictions for the purposes of
clause 14.2(a) of each of the Boral Umbrella Intellectual Property Licence
Agreements and the USG Umbrella Intellectual Property Licence Agreements as at
the date of this agreement; and

 

  (2) in Part 2, the initial High Risk Procedures for the purposes of
clause 14.2(b) of each of the Boral Umbrella Intellectual Property Licence
Agreements and the USG Umbrella Intellectual Property Licence Agreements as at
the date of this agreement.

 

  (b) Jurisdictions may be added to or removed from the list of High Risk
Jurisdictions in Part 1 of Schedule 8 at any time and from time to time by
Unanimous Resolution of Shareholders (as Minor Fundamental Matter).

 

  (c) The High Risk Procedures in Part 2 of Schedule 8 may be modified at any
time and from time to time by a Unanimous Resolution of Shareholders (as Minor
Fundamental Matter).

 

10 Exclusivity and commitment

 

 

 

10.1 Parties

This clause 10 applies only as between USG Guarantor and Boral Guarantor. It is
not intended that any other person named as a party to this agreement will have
any rights, powers, obligations or liabilities under this clause 10.

 

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10.2 Definitions

The meanings of the terms used in this clause 10 are set out below:

 

Term

  

Meaning

Group   

in relation to a party to this clause 10:

 

•    where the party is Boral Guarantor, the Boral Group; and

 

•    where the party is USG Guarantor, the USG Group.

JV Restricted Business    as at any given date, any business or undertaking
comprising or forming part of the Parent Businesses at that date. JV Restricted
Period    any period while USG and Boral both hold any interest in JV Shares. JV
Restricted Territory   

each of the following (it being recognised that in some circumstances these
areas may overlap or be concurrent with each other):

 

1       each country or region outside the Territory for the purposes of this
agreement at any relevant time;

 

2       North America;

 

3       Central America;

 

4       South America;

 

5       Europe;

 

6       Africa (except for jurisdictions and regions falling within the
Territory for the purposes of this agreement at the relevant time);

 

7       the United States of America;

 

8       Mexico;

 

9       Canada.

Parent Businesses    means the businesses of manufacturing, distributing and
selling the Products which are conducted by either the USG Group or the Boral
Group in any geographical area outside the Territory. Restricted Business    as
at any given date, any business or undertaking comprising or forming part of the
Business at that date. Restricted Employee    an employee, director or officer
of any JV Group Member or of a Boral Group Member or a USG Group Member.

 

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Term

  

Meaning

Restricted Period   

in respect of a Guarantor, each of the following (it being recognised that in
some circumstances these periods may overlap or be concurrent with each other):

 

1       any period while a member of that Guarantor’s Group holds any interest
in JV Shares;

 

2       the period from the date of this agreement until the 10th anniversary of
the date of this agreement;

 

3       the period from the date of this agreement until the 9th anniversary of
the date of this agreement;

 

4       the period from the date of this agreement until the 8th anniversary of
the date of this agreement;

 

5       the period from the date of this agreement until the 7th anniversary of
the date of this agreement;

 

6       the period from the date of this agreement until the 6th anniversary of
the date of this agreement;

 

7       the period from the date of this agreement until the 5th anniversary of
the date of this agreement;

 

8       the period from the date of this agreement until the 4th anniversary of
the date of this agreement;

 

9       the period from the date of this agreement until the date which is 3
years from the date on which that Guarantor’s Group ceases to hold any interest
in JV Shares;

 

10     the period from the date of this agreement until the date which is 2
years from the date on which that Guarantor’s Group ceases to hold any interest
in JV Shares;

 

11     the period from the date of this agreement until the date which is 1 year
from the date on which that Guarantor’s Group ceases to hold any interest in JV
Shares;

 

12     the period from the date of this agreement until the date which is 6
months from the date on which that Guarantor’s Group ceases to hold any interest
in JV Shares.

Restricted Persons   

1       in relation to Boral Guarantor, each Affiliate of Boral Guarantor from
time to time;

 

2       in relation to USG Guarantor, each Affiliate of USG Guarantor from time
to time; and

 

3       in relation to the Companies, their respective Subsidiaries from time to
time.

Restricted Territory    each country or region forming part of the Territory for
the purposes of this agreement at the relevant time.

 

10.3 Restrictive covenants

 

  (a) Subject to the third party arrangements in place at the date of this
agreement that are listed in Schedule 10, USG Guarantor and Boral Guarantor
agree that the JV Group will have the exclusive right (as against USG Guarantor,
Boral Guarantor and their respective Restricted Persons) to conduct the Business
in the Territory, on the terms set out in this clause 10.

 

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  (b) Boral Guarantor must not, and must procure that its Restricted Persons
will not, during any period which is a Restricted Period in respect of Boral,
and USG Guarantor must not, and must procure that its Restricted Persons do not,
during any period which is a Restricted Period in respect of USG, do, or attempt
to do any of the following within any Restricted Territory without the prior
written consent of both USG Guarantor and Boral Guarantor:

 

  (1) No competing business: directly or indirectly carry on or otherwise have
an interest in, or be engaged in any business that is the same as or
substantially similar to or that competes with a Restricted Business (including
by manufacturing, distributing, supplying or otherwise providing the same or
similar products or services) (except, for the avoidance of doubt, to the extent
contemplated by Schedule 10);

 

  (2) No poaching customers: solicit or persuade any person who the relevant
Guarantor (or its relevant Restricted Person, as the case maybe) is aware is a
customer or client of a Restricted Business in the Territory, to cease doing
such business with any JV Group Member or reduce the amount of business that the
customer or client would normally do or otherwise have done with any JV Group
Member in the Territory; or

 

  (3) No poaching staff: solicit, entice or persuade, or attempt to solicit,
entice or persuade any person who the relevant Guarantor (or its relevant
Restricted Person, as the case may be) is aware is a Restricted Employee to
terminate his or her employment with his or her employer, whether or not that
person would breach his or her service agreement. For clarity, this will not
prohibit a person from employing a Restricted Employee who responds to a bona
fide public advertisement concerning a vacant position that is not targeted
specifically at that Restricted Employee.

 

  (c) USG Guarantor and Boral Guarantor must, to the extent within their
respective power, procure that the Companies do not, and that the Companies
procure that their respective Restricted Persons will not, during the JV
Restricted Period do, or attempt to do any of the following within any JV
Restricted Territory without the prior written consent of both USG Guarantor and
Boral Guarantor:

 

  (1) No competing business: directly or indirectly carry on or otherwise have
an interest in, or be engaged in any business that is the same or is
substantially similar to or that competes with a JV Restricted Business
(including by manufacturing, distributing, supplying or otherwise providing the
same or similar products or services as the Business but outside the Territory);

 

  (2) No poaching customers: solicit or persuade any person who the Companies
(or their relevant Restricted Persons, as the case may be) are aware is a
customer or client of a Parent Business outside the Territory, to cease doing
business with any Boral Group Member or USG Group Member or reduce the amount of
business that the customer or client would normally do or otherwise have done
with any Boral Group Member or USG Group Member outside the Territory; or

 

  (3) No poaching staff: solicit, entice or persuade, or attempt to solicit,
entice or persuade any person who the Companies (or their relevant Restricted
Person, as the case may be) is aware is a Restricted Employee to terminate his
or her employment with his or her employer, whether or not that person would
breach his or her service agreement. For clarity, this will not prohibit a
person from employing a Restricted Employee who responds to a bona fide public
advertisement concerning a vacant position that is not targeted specifically at
that Restricted Employee.

 

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  (d) USG Guarantor and Boral Guarantor agree that for these purposes the
Restricted Periods are intended to operate separately in relation to each
Restricted Territory, and the JV Restricted Periods are intended to operate
separately in relation to each JV Restricted Territory, so that if any
Restricted Period is held to be unenforceable in relation to activities in any
particular Restricted Territory, or any JV Restricted Period is held to be
unenforceable in relation to activities in any particular JV Restricted
Territory, it is not intended to affect the application of the Restricted Period
in relation to any other Restricted Territory or the JV Restricted Period in
relation to any other JV Restricted Territory (as applicable).

 

10.4 Permitted Activities

 

  (a) Clauses 10.3(a) and 10.3(b)(1) do not prevent Boral Guarantor or USG
Guarantor or any of their Restricted Persons from:

 

  (1) owning or controlling directly or indirectly shares or other securities of
a company or trust listed on a recognised stock exchange, provided the aggregate
holding owned or controlled by the relevant Guarantor and its Restricted Persons
does not exceed 5% of any class of the relevant entity’s securities;

 

  (2) acquiring by purchase, merger or otherwise, an interest in a business
which is engaged or involved in a Restricted Business in a Restricted Territory,
provided that:

 

  •   the Restricted Business in the Restricted Territory accounts for no more
than 25% of revenue of the acquired business; and

 

  •   the Restricted Business in the Restricted Territory is closed or (subject
to clause 10.4(b)) divested to the JV Group or a bona fide third party within 6
months after the acquisition.

 

  (b) If clause 10.4(a)(2) applies and the relevant Guarantor (Restricted
Business Seller) (or any of its Restricted Persons, as the case may be) proposes
to divest, rather than close, the relevant Restricted Business (for the purposes
of this clause 10.4(b), the Sale Business) then the relevant Restricted Business
Seller must not (or if applicable must ensure that the relevant Restricted
Person or Persons do not) divest or commit to divest the Sale Business unless:

 

  (1) the other Guarantor and the Companies have been given a notice in writing
(a Divestment Notice) specifying:

 

  •   the details of the Sale Business;

 

  •   the price at which the Restricted Business Seller (or relevant Restricted
Persons as the case may be) is prepared to sell the Sale Business; and

 

  •   the other terms and conditions on which the Restricted Business Seller (or
relevant Restricted Persons as the case may be) is prepared to sell the Sale
Business;

 

  (2) the Companies have been given at least 60 days (the Assessment Period) to
conduct due diligence investigations and make an offer to buy the Sale Business
on the terms set out in the Divestment Notice; and

 

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  (3) clause 10.4(c) has been complied with.

 

  (c) If:

 

  (1) the Companies (or any JV Group Member nominated by the Companies) make an
offer to buy the Sale Business on the terms set out in the Divestment Notice
within the Assessment Period, the Restricted Business Seller must ensure that
the offer is accepted and the sale completed in accordance with the relevant
terms; or

 

  (2) the Companies do not make such an offer within the Assessment Period, the
Sale Business can be sold to a bona fide third party within the time period
required by clause 10.4(a)(2) provided the price and other terms are not
materially more favourable to the third party buyer than the terms set out in
the Divestment Notice.

 

10.5 No restriction on USG or Boral conducting businesses outside the Territory

For the avoidance of doubt nothing in clause 10.3(a) or 10.3(b)(1) is intended
to prevent (and does not prevent) either Guarantor or any of their respective
Affiliates acquiring, carrying on or otherwise having an interest in, or being
engaged in, any business whatsoever at any time in any geographical area outside
the Territory, including any business that is the same as or substantially
similar to (or that competes with) a Restricted Business.

 

10.6 Severability

 

  (a) The parties agree that the restrictions set out in this clause 10 are to
be regarded as separate, distinct and severable so that the unenforceability of
any restriction will in no way affect the enforceability of any other
restriction.

 

  (b) If any of the restrictions in this clause 10 is void as unreasonable for
the protection of the interests of any party and would be valid, if:

 

  (1) part of the wording was deleted;

 

  (2) the period of the restriction was reduced;

 

  (3) the area of the restriction was reduced;

 

  (4) the scope of the definition of ‘Restricted Business’ or the ‘JV Restricted
Business’ (as relevant) was narrowed; or

 

  (5) any combination of the foregoing,

the restraint will apply with the minimum modifications necessary to make it
effective.

 

10.7 Acknowledgment

Each party acknowledges:

 

  (a) that all the restrictions in this clause 10 are reasonable in the
circumstances and necessary to protect the goodwill of the Business (including
the businesses of the various members of the JV Group) or the Parent Businesses,
as the case may be, and are intended to operate to the maximum possible extent;
and

 

  (b) the remedy of damages may be inadequate to protect the interests of a
Guarantor (or other members of its Group) in the event of the breach or
threatened breach of an applicable provision of this clause 10 and that a
Guarantor (or other member of its Group) is entitled to seek and obtain
injunctive relief, or any other relief.

 

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Part C – Shareholder exit and default provisions

 

 

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11 Disposal - general

 

 

11.1 Standstill Period

 

  (a) For the purposes of this agreement the Standstill Period means the period
commencing on the date of this agreement and ending on the 7th anniversary of
the date of this agreement.

 

  (b) Subject to clauses 11.1(c) and 11.1(d), a Shareholder must not Dispose of
any JV Shares during the Standstill Period except with the prior written consent
of the other Shareholder.

 

  (c) a Shareholder may Dispose of all of its JV Shares (being, for the
avoidance of doubt, all of its JVC 1 Shares and all of its JVC 2 Shares) at any
time during the Standstill Period:

 

  (1) if an Event of Default occurs in respect of the other Shareholder and the
Disposal occurs under clauses 14 and 15; or

 

  (2) if the Disposal occurs in accordance with clause 7.

 

  (d) JV Shares may be Disposed of during the Standstill Period in accordance
with clause 11.4.

 

  (e) During the Standstill Period a Shareholder must not, and must ensure that
its Parent, Affiliates, agents and adviser do not:

 

  (1) offer to Dispose of any JV Shares (or, for the avoidance of doubt any JVC
1 Shares separately to any JVC 2 Shares and vice versa);

 

  (2) solicit, invite, encourage or initiate offers or proposals in relation to
the Disposal of any JV Shares (or, for the avoidance of doubt any JVC 1 Shares
separately to any JVC 2 Shares and vice versa); or

 

  (3) participate in or continue any negotiations or discussions with respect to
any Disposal or potential Disposal of any JV Shares (or, for the avoidance of
doubt any JVC 1 Shares separately to any JVC 2 Shares and vice versa).

except with the prior written consent of the other Shareholder or to the extent
necessary to enable the Shareholder to comply with any provision of this
agreement.

 

11.2 Disposals following Standstill Period

Following expiry of the Standstill Period, a Shareholder must not Dispose of its
JV Shares unless (without limiting clause 19(b)):

 

  (a) the other Shareholder gives its prior written consent;

 

  (b) the Shareholder complies with clause12;

 

  (c) an Event of Default occurs in respect of the other Shareholder and the
Disposal occurs under clauses 14 and 15; or

 

  (d) the Disposal occurs in accordance with clause 7,

provided that JV Shares may at any time be Disposed of during the Standstill
Period in accordance with clause 11.4.

 

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11.3 Security Interests over JV Shares

Despite anything in clauses 11.1 and 11.2 a Shareholder must not at any time
create a Security Interest over a JV Share unless the other Shareholder gives
its prior written consent.

 

11.4 Intra-group transfers

 

  (a) JV Shares may be Disposed of (and JVC 1 Shares and JVC 2 Shares may
separately be Disposed of) at any time if each of the following is satisfied
(and the remainder of this clause 11.4 is complied with):

 

  (1) the Disposal consists of:

 

  (A) in relation to JVC 1 Shares held by Boral Holder 1, the sale, transfer or
assignment of its entire interest in all (but not some only) of its JVC 1 Shares
to a transferee that is a Wholly Owned Subsidiary of Boral Guarantor;

 

  (B) in relation to JVC 2 Shares held by Boral Holder 2, the sale, transfer or
assignment of its entire interest in all (but not some only) of its JVC 2 Shares
to a transferee that is a Wholly Owned Subsidiary of Boral Guarantor; or

 

  (C) in relation to JV Shares held by USG, the sale, transfer or assignment of
its entire interest in all (but not some only) of its JVC 1 Shares or its JVC 2
Shares (or both) to a transferee that is a Wholly Owned Subsidiary of USG
Guarantor; and

 

  (2) the Disposal has been approved by the other Shareholder (being USG where
clause 11.4(a)(1)(A) or 11.4(a)(1)(B) applies and Boral where
clause 11.4(a)(1)(C) applies), such approval not to be unreasonably withheld or
delayed where:

 

  (A) the Disposal does not adversely affect such other Shareholder’s risk or
cost profile in relation to its interest in the JV Group (having regard in
particular to the identity of the acquiring entity and its jurisdiction of
incorporation); and

 

  (B) in the case of a proposed sale, transfer or assignment of USG’s JVC 1
Shares only (or its JVC 2 Shares only) this agreement has been amended to the
extent necessary to reflect that two separate USG entities will be holding JV
Shares (with approval of either party to such amendments not to be unreasonably
withheld or delayed).

 

  (b) Before any sale, transfer or assignment is effected in reliance on
clause 11.4(a) the existing holder of the relevant JV Shares (the Transferor)
must ensure that the proposed buyer, transferee or assignee transferee (the
Transferee) enters into an Adherence Deed agreeing to be bound by this agreement
as if named as a party (and specifically as if named as ‘Boral Holder 1’, ‘Boral
Holder 2’ or ‘USG’, as the case may be).

 

  (c) Subject always to clause 11.4(d) a Transferee under this clause 11.4 may
itself subsequently sell, transfer or assign its JV Shares (or its JVC 1 Shares
or JVC 2 Shares) under this clause to a Wholly Owned Subsidiary of its Parent,
provided the requirements of clauses 11.4(a) and 11.4(b)are satisfied.

 

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  (d) A Transferee that becomes a holder of JV Shares under any application of
this clause 11.4 must transfer, and the relevant guarantor party (being Boral
Guarantor where that is the Transferor’s Parent and USG Guarantor where that is
the Transferor’s Parent) must ensure that it sells, transfers or assigns all its
JV Shares to another Wholly Owned Subsidiary of the Transferor’s Parent before
that Shareholder ceases to be a Wholly Owned Subsidiary of the Transferor’s
Parent, and for the avoidance of doubt clause 11.4(b) will apply in relation to
any such transfer.

 

  (e) Nothing in this clause 11.4 is intended to affect clause 13.1(c) or
clause 19 as it applies to all other Disposals of JV Shares.

 

11.5 No avoidance

 

  (a) It is the intention of the parties that no Shareholder Disposes of or
otherwise parts with or deals in any JV Shares or the economic benefits deriving
from any JV Shares, other than under clauses 7, 11.4 or 14 of this agreement
(and clause 15 to the extent invoked by those clauses), unless clause 12 has
been complied with in respect of those JV Shares.

 

  (b) Without limiting clause 11.5(a), unless the Shareholders agree otherwise
in writing, a Shareholder may not (nor may it attempt to) Dispose of all or any
of its JV Shares except by transfer of the entire legal and beneficial interest
in those JV Shares free from all Security Interests.

 

  (c) No party may employ any device or technique or participate in any
transaction designed to circumvent this intention.

 

11.6 Adherence Deed and registration of transfers

 

  (a) JVC 1 will not recognise and must not register any transfer of JVC 1
Shares (or any interest in or right to acquire JVC 1 Shares) and JVC 2 will not
recognise and must not register any transfer of JVC 2 Shares (or any interest in
or right to acquire JVC 2 Shares) if this agreement has not been complied with
and any purported Disposal in breach of this agreement is void.

 

  (b) JVC 1 must register a transfer of JVC 1 Shares and JVC 2 must register a
transfer of JVC 2 Shares made in compliance with this agreement.

 

  (c) A Shareholder must not Dispose of JV Shares or any interest in or right to
acquire JV Shares, JVC 1 must not issue JVC 1 Shares, and JVC 2 must not issue
JVC 2 Shares, to any person who is not a Shareholder at the time at which they
acquire or are issued JV Shares, unless that person agrees in writing to become
a party to, and to be bound by the provisions of this agreement by signing an
Adherence Deed prior to or contemporaneously with such transfer or issue.

 

  (d) Subject to clause 11.6(e), each party to this agreement from time to time
agrees that any person who executes an Adherence Deed is bound by the terms of
this agreement, and has rights under this agreement, with effect from the date
of the relevant transfer or issue of the JV Shares as if that person were named
as a party to this agreement in the relevant capacity, in accordance with the
terms of the Adherence Deed.

 

  (e) A person who executes an Adherence Deed as the result of a transfer of JV
Shares to that person will not be liable under this Agreement for any breach of
the transferor that occurred before the date of the transfer, or for any
liability of the transferor under this agreement that was incurred before the
date of the transfer.

 

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  (f) Without limiting the foregoing, to the extent JV Shares (or any other
equity securities) are:

 

  (1) issued to anyone other than an existing Shareholder; or

 

  (2) transferred to anyone other than an existing Shareholder;

in circumstances where there are additional shareholders to Boral and USG in the
Companies, the parties must, before that issue or transfer, ensure that the
relevant third party enters into an Adherence Deed agreeing to be bound by this
agreement amended as reasonably required by the Shareholders and agreed with the
third party.

 

12 Pre-emptive provisions

 

 

12.1 General

After expiry of the Standstill Period a Shareholder may transfer its entire
interest in all (but not some only) of its JV Shares if it complies with this
clause 12.

 

12.2 Notice of Sale

 

  (a) A Shareholder (the Seller) wishing to transfer its JV Shares under this
clause 12 must give a written notice to that effect to the other Shareholder
(the Recipient). The notice (a Notice of Sale) must specify:

 

  (1) the JV Shares that the Seller proposes to sell, which must be all of the
JV Shares held by the Seller (the Sale Shares);

 

  (2) the minimum sale price for the Sale Shares (as a parcel), which must be a
cash price expressed in US dollars (the Floor Price);

 

  (3) the proposed terms on which the Seller proposes to sell the Sale Shares
(the Sale Terms), in the form of draft sale documentation; and

 

  (4) a statement to the effect that the Recipient may offer to purchase all
(but not part of) the Sale Shares at the Floor Price and on the Sale Terms if
the Recipient complies with clause 12.3.

 

  (b) A Notice of Sale is irrevocable (except with the written consent of the
Recipient).

 

  (c) The Sale Terms specified in a Notice of Sale must not include:

 

  (1) conditions to the sale or obligations on the purchaser which by their
nature are not capable of being complied with by or in relation to the
Recipient, its Parent or Affiliates. For the avoidance of doubt this does not
apply to any obligation to pay the purchase price; or

 

  (2) conditions to the sale which the satisfaction or non-satisfaction of which
are within the sole control of the Seller or its Parent or Affiliates.

 

12.3 Offer to purchase Sale Shares

The Recipient may offer to purchase the Sale Shares at the price and on the
terms set out in the Notice of Sale by giving notice to that effect (an Offer
Notice) to the Seller within 45 days after receipt of the Notice of Sale (the
Response Period).

 

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12.4 Recipient does not offer to purchase

 

  (a) If the Recipient does not give an Offer Notice to the Seller within the
Response Period, or advises the Seller in writing within the Response Period
that it does not wish to give an Offer Notice, the Seller may sell all (but not
some only) of the Sale Shares to a third party buyer (Third Party Buyer)
provided that:

 

  (1) the aggregate sale price for the Sale Shares is a cash price in US dollars
that is equal to or higher than the Floor Price;

 

  (2) the terms of the sale are not materially more favourable to the Third
Party Buyer than the Sale Terms and are such as to permit compliance with
clause 12.4(e)(2) should that clause apply;

 

  (3) the sale is to a single Third Party Buyer who is a bona fide third party
buyer (not being a Parent or Affiliate of the Seller) on an arm’s length basis;

 

  (4) the Seller enters into a legally binding agreement with the Third Party
Buyer in relation to the sale within 90 days from expiry of the Response Period;

 

  (5) the sale of the Sale Shares to the Third Party Buyer is completed as soon
as reasonably practicable and in any event within 12 months from expiry of the
Response Period; and

 

  (6) the Seller has complied with clause 12.4(c) and clause 12.9(b).

 

  (b) The Seller must ensure that there is no agreement, arrangement or
understanding between the Seller and the Third Party Buyer (or, in each case,
their respective Parents or Affiliates) conditional on, or in connection with,
the sale by the Seller of the Sale Shares such as to confer a benefit or
advantage or potential benefit or advantage on the Third Party Buyer (or a
Related Corporation or Affiliate) which was not capable of being extended to the
Recipient under the terms contained in the Notice of Sale.

 

  (c) The Seller must not sell the Sale Shares to a Third Party Buyer pursuant
to this clause 12.4 unless:

 

  (1) the Seller has first given notice in writing to the Recipient (a Sale
Terms Notice), specifying:

 

  •   the identity of the Third Party Buyer;

 

  •   the aggregate sale price for which the Third Party Buyer is willing to
purchase all of the Sale Shares;

 

  •   the terms on which the Third Party Buyer is willing to purchase the Sale
Shares, in the form of draft sale documentation;

 

  •   written confirmation that the proposed transaction complies with clauses
12.4(a)(1) to 12.4(a)(3) and clause 12.4(b); and

 

  •   a statement to the effect that the Recipient has the right (Tag Right) to
require that its JV Shares are included as part of any sale transaction if the
Recipient complies with clause 12.9(a); and

 

  (2) the Recipient has not exercised its Tag Right within 21 days after receipt
of the Sale Terms Notice (or has given confirmation in writing to the Seller
within that period that it does not propose to exercise its Tag Right).

 

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  (d) The Seller must give to the Recipient a copy of any agreement with the
Third Party Buyer relating to the Sale Shares within 7 days after execution of
the agreement.

 

  (e) (Without limiting the remedies of any party if any purported sale to a
Third Party Buyer does not comply with this clause 12.4) if:

 

  (1) the Seller does not enter into a legally binding agreement with the Third
Party Buyer in relation to the sale within the period required by
clause 12.4(a)(4); or

 

  (2) the sale of the Sale Shares to the Third Party Buyer is not completed
within the period required by clause 12.4(a)(5),

the Seller must not sell the Sale Shares to the Third Party Buyer (or any other
person) without complying again with this clause 12 (unless the sale occurs
pursuant to any other provision of this agreement which permits the relevant
Disposal).

 

12.5 Recipient offers to purchase

If the Recipient gives an Offer Notice to the Seller within the Response Period:

 

  (a) the Seller may accept the Recipient’s offer by notice in writing to the
Recipient to that effect within 15 days after the date of receipt of the Offer
Notice (the Acceptance Period), in which case clause 12.6 will apply; or

 

  (b) the Seller may reject the Recipient’s offer by notice in writing to the
Recipient to that effect within the Acceptance Period, in which case clause 12.7
will apply,

provided that if the Seller does not give notice accepting or rejecting within
the Acceptance Period it will be taken to have rejected the Recipient’s offer
and clause 12.7 will apply accordingly.

 

12.6 Offer is accepted

If this clause 12.6 applies, the Seller must sell to the Recipient all of its JV
Shares and the Recipient must purchase those JV Shares at the Floor Price and on
and subject to the Sale Terms, and clause 15 will apply.

 

12.7 Offer is rejected

 

  (a) If this clause 12.7 applies the Seller may for a period of up to 180 days
from expiry of the Acceptance Period (the Marketing Period) market the Sale
Shares to potential third party buyers on terms that would enable the Seller to
give a Second Notice of Sale in relation to the transaction which complies with
the requirements of clause 12.7(b).

 

  (b) If the Seller finds a third party buyer (Third Party Buyer) to which it
wishes to sell all the Sale Shares the Seller may at any time (but only once)
during the Marketing Period give a further notice of sale (Second Notice of
Sale) to the Recipient, specifying:

 

  (1) the identity of the Third Party Buyer;

 

  (2) the aggregate sale price for which the Third Party Buyer is willing to
purchase all of the Sale Shares, which must be a cash price expressed in US
dollars which is higher than the Floor Price;

 

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  (3) the terms on which the Third Party Buyer is willing to purchase the Sale
Shares, in the form of draft sale documentation, which must not be materially
more favourable to the Third Party Buyer than the Sale Terms, must comply with
clause 12.2(c) and must be such as to permit compliance with clause 12.8(d)(2)
should that clause apply;

 

  (4) written confirmation that the Third Party Buyer is a single buyer who is a
bona fide prospective purchaser (not being a Parent or Affiliate of the Seller)
on an arm’s length basis who has made an offer to purchase the Sale Shares at
the price and on the terms set out in the Second Notice of Sale;

 

  (5) written confirmation that that there is no agreement, arrangement or
understanding between the Seller and the Third Party Buyer (or, in each case,
their respective Parents or Affiliates) conditional on, or in connection with,
the sale by the Seller of the Sale Shares such as to confer a benefit or
advantage or potential benefit or advantage on the Third Party Buyer (or its
Related Body Corporate or Affiliate) which is not capable of being extended to
the Recipient under the terms contained in the Second Notice of Sale; and

 

  (6) a statement to the effect that the Recipient:

 

  •   has an option (Last Right) to purchase all the Sale Shares at the cash
price and on the terms set out in the Second Notice of Sale if the Recipient
complies with clause 12.8; and

 

  •   has the right (Tag Right) to require that its JV Shares are included as
part of any sale transaction if the Recipient complies with clause 12.9(a).

 

  (c) A Second Notice of Sale is irrevocable (except with the written consent of
the Recipient).

 

  (d) If on expiry of the Marketing Period the Seller has not given a Second
Notice of Sale in relation to the Sale Shares which complies with the
requirements of clause 12.7(b), the Seller must cease its marketing of the Sale
Shares and must not sell the Sale Shares without complying again with this
clause 12 unless:

 

  (1) the sale occurs pursuant to any other provision of this agreement which
permits the relevant Disposal; or

 

  (2) the Recipient remains willing to purchase the Sale Shares in accordance
with its offer given during the Acceptance Period pursuant to clause 12.5(a) (in
which case the Seller may accept that offer and clause 12.6 will apply).

 

12.8 Last Right

 

  (a) If a Second Notice of Sale is given by the Seller, the Recipient (may
exercise its Last Right to purchase the Sale Shares at the cash price and on the
terms set out in the Second Notice of Sale by giving notice to the Seller to
that effect within 21 days after the date of receipt of the Second Notice of
Sale (the Decision Period), with such notice to confirm that the Recipient does
not exercise its Tag Right. For the avoidance of doubt, the Recipient cannot
exercise its Last Right if it has already exercised its Tag Right.

 

  (b) If the Recipient exercises its Last Right within the Decision Period in
accordance with clause 12.8(a), the Seller must sell to the Recipient all of its
JV Shares and the Recipient must purchase those JV Shares at the price and on
and subject to the terms set out in the Second Notice of Sale and clause 15 will
apply

 

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  (c) If the Recipient does not exercises its Last Right or its Tag Right within
the Decision Period then the Seller may sell all (but not some only) of the Sale
Shares to the Third Party Buyer identified in the Second Notice of Sale provided
that:

 

  (1) the sale is at the price and on the terms specified in the Second Notice
of Sale;

 

  (2) the Seller enters into a legally binding agreement with the Third Party
Buyer in relation to the sale within 60 days from expiry of the Decision
Period);

 

  (3) the sale of the Sale Shares to the Third Party Buyer is completed as soon
as practicable and in any event within 12 months from expiry of the Decision
Period.

 

  (d) In the event:

 

  (1) the Seller does not enter into a legally binding agreement with the Third
Party Buyer in relation to the sale within the periods required by
clause 12.8(c)(2); or

 

  (2) the sale of the Sale Shares to the Third Party Buyer is not completed
within the periods required by clause 12.8(c)(3),

the Seller must not sell the Sale Shares to the Third Party Buyer (or any other
person) without complying again with this clause 12 (unless the sale occurs
pursuant to any other provision of this agreement which permits the relevant
Disposal).

 

12.9 Tag Right

 

  (a) The Recipient may exercise its Tag Right in relation to a proposed sale of
Sale Shares by the Seller:

 

  (1) if a Sale Terms Notice is given by the Seller under clause 12.4(c), by
giving notice to the Seller to that effect within 21 days after receipt of the
Sale Terms Notice; or

 

  (2) if a Second Notice of Sale is given by the Seller under clause 12.7(b), by
giving notice to the Seller to that effect within the Decision Period referred
to in clause 12.8(a) with such notice to confirm that it does not exercise its
Last Right (for the avoidance of doubt, the Recipient cannot exercise its Tag
Right if it has already exercised its Last Right).

 

  (b) If the Recipient exercises its Tag Right in relation to a proposed sale in
accordance with clause 12.9(a), then the Seller may only proceed to sell the
Sale Shares to the relevant Third Party Buyer if the Third Party Buyer
concurrently purchases all of the Recipient’s JV Shares at the price and on the
terms set out in the Sale Terms Notice or Second Sale Notice (as the case may
be), but modified as necessary to:

 

  (1) ensure that the rights and liabilities of the Seller and the Recipient are
several and pro rata; and

 

  (2) to reflect the identity of the Recipient as the seller of the Recipient’s
JV Shares,

or on such other terms as the Recipient, Seller and Third Party Buyer may agree.

 

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  (c) If the Recipient exercises its Tag Right but the sale of the Sale Shares
and the Recipient’s JV Shares to the relevant Third Party Buyer has not been
completed on terms which comply with this clause 12.9 within 12 months after the
date of exercise of the Tag Right, the Seller must not sell the Sale Shares to
the Third Party Buyer (or any other person) without complying again with this
clause 12 (unless the sale occurs pursuant to any other provision of this
agreement which permits the relevant Disposal).

 

12.10 Time periods

The Shareholders may by agreement in writing extend (or shorten) any time period
applicable under this clause 12 in relation to any given transaction.

 

13 Events of Default

 

 

 

13.1 Events of Default

An Event of Default occurs in relation to a Shareholder if:

 

  (a) material breach: (without limiting clause 13.1(e) or 13.1(f) where that is
the relevant breach) the Shareholder (or its Parent) commits a material breach
of a material term of this agreement and that breach:

 

  (1) is incapable of remedy; or

 

  (2) (without limiting clause 13.1(b)) if capable of remedy, is not remedied to
the satisfaction of the other Shareholder (acting reasonably and in good faith):

 

  •   within 60 days; or

 

  •   if the breach occurs within 6 months after the Shareholder or its Parent
has materially breached the same term, within 30 days,

after being notified in writing by the other Shareholder of the breach;

 

  (b) repeated breach: the Shareholder (or its Parent):

 

  (1) commits a material breach of a material term of this agreement in
circumstances where:

 

  •   the breach is capable of remedy; but

 

  •   the Shareholder or its Parent has materially breached the same term on two
or more occasions during the preceding 12 months; or

 

  (2) materially and persistently breaches any term of this agreement, whether
or not that breach is capable of remedy;

 

  (c) Change of Control: a Change of Control occurs in respect of the
Shareholder or of any Relevant Affiliate of the Shareholder;

 

  (d) Insolvency Event: an Insolvency Event occurs in relation to the
Shareholder or any Relevant Affiliate of the Shareholder;

 

  (e) Disposal of Shares: the Shareholder Disposes, or purports to Dispose, of
any JV Shares in breach of either Constitution or this agreement;

 

  (f) Shareholder loans: clause 17 is breached in relation to the Shareholder;

 

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  (g) failure to attend Board meetings: in circumstances where both Shareholders
are Major Shareholders, a failure by all directors appointed by the Shareholder
to the Board of a Company to attend a duly convened meeting of the Board of that
Company 3 or more times in succession, where the subject matter of any
resolution to be considered at the meeting needs to be passed by Super
Resolution of the Board. For the avoidance of doubt for these purposes an
adjournment of a Board meeting will not constitute a separate Board meeting in
its own right;

 

  (h) failure to attend Shareholder meetings: a failure by the Shareholder or
proxy of the Shareholder to attend a duly convened meeting of Shareholders 3 or
more times in succession, where the subject matter of any resolution to be
considered at the meeting needs to be passed by a Unanimous Resolution of
Shareholders and the vote of the relevant Shareholder is required in order for
such a resolution to be passed. For the avoidance of doubt for these purposes an
adjournment of a Shareholder meeting will not constitute a separate Shareholder
meeting in its own right;

 

  (i) breach by JV Group: a JV Group Member has breached in any material respect
clause 1.3(d)(1) of this agreement, clause 8.2(e)) of this agreement, or any IP
Licence Agreement and each of the following applies:

 

  (1) the breach has been notified to the Shareholder (for the avoidance of
doubt the Defaulting Shareholder in this context for the purposes of clause 14)
in writing by the Companies or by the other Shareholder, specifying that the
notice is for the purposes of this clause 13.1(i) (JV Breach Notice);

 

  (2) the relevant breach is reasonably capable of reversal or remedy;

 

  (3) the other Shareholder (for the avoidance of doubt the Non-Defaulting
Shareholder in this context for the purpose of clause 14) has proposed to the
Defaulting Shareholder in writing and in good faith a reasonable and
proportionate course of action to reverse or remedy the breach notified in the
JV Breach Notice, and either:

 

  (A) the Defaulting Shareholder has not within 30 days after the date of the JV
Breach Notice itself proposed in good faith an alternative reasonable and
proportionate cause of action to reverse or remedy the breach; or

 

  (B) the Defaulting Shareholder or the directors it has appointed to either
Board is or are wilfully preventing the passing of a Board (or, if a Fundamental
Matter is involved, Shareholder) resolution in relation to the Non-Defaulting
Shareholder’s proposal in circumstances where there is no bona fide dispute
between the directors (or Shareholders, as applicable) as to the appropriate
action to be taken in relation to the breach; and

 

  (4) the relevant breach has not otherwise been reversed or remedied to the
reasonable satisfaction of both Shareholders.

 

13.2 Change of Control

 

  (a) For the purposes of clause 13.1(c) a Change of Control occurs in respect
of USG or a Relevant Affiliate of USG:

 

  (1) in the case of USG, if it ceases to be a Wholly Owned Subsidiary of USG
Guarantor;

 

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  (2) in the case of any other Relevant Affiliate of USG (other than USG
Guarantor itself), if the relevant entity ceases to be a Wholly Owned Subsidiary
of USG Guarantor; or

 

  (3) in the case of USG Guarantor, if a person (or group of associated persons)
who did not previously do so acquires or holds directly or indirectly:

 

  (A) securities in USG Guarantor conferring 50% or more of the voting or
economic interests in USG Guarantor; or

 

  (B) the power to control the appointment or dismissal of the majority of USG
Guarantor’s directors,

or any person enters into any agreement or arrangement performance of which
would result in such an acquisition or holding.

 

  (b) For the purposes of clause 13.1(c) a Change of Control occurs in respect
of Boral or a Relevant Affiliate of Boral:

 

  (1) in the case of Boral, if it ceases to be a Wholly Owned Subsidiary of
Boral Guarantor;

 

  (2) in the case of any other Relevant Affiliate of Boral (other than Boral
Guarantor itself), if the relevant entity ceases to be a Wholly Owned Subsidiary
of Boral Guarantor; or

 

  (3) in the case of Boral Guarantor, if a person (or group of associated
persons) who did not previously do so acquires or holds directly or indirectly:

 

  (A) securities in Boral Guarantor conferring 50% or more of the voting or
economic interests in Boral Guarantor; or

 

  (B) the power to control the appointment or dismissal of the majority of Boral
Guarantor’s directors,

or any person enters into any agreement or arrangement performance of which
would result in such an acquisition or holding.

 

  (c) For the avoidance of doubt, a Change of Control in respect of either USG
or a Relevant Affiliate of USG, or Boral or a Relevant Affiliate of Boral
(Controlled Person), does not include:

 

  (1) a reconstruction of the Controlled Person or an amalgamation of the
Controlled Person with another entity where the entity involved or arising
following the reconstruction or amalgamation and which holds the shares in the
Controlled Person is beneficially owned solely by an entity of which the
Controlled Person was a Wholly Owned Subsidiary prior to the reconstruction or
amalgamation or any Wholly Owned Subsidiary of such entity; or

 

  (2) any transfer of shares in the Controlled Person to any Wholly Owned
Related Corporation, provided that such Wholly Owned Related Corporation remains
a part of the relevant Shareholder Group of the Controlled Person after the date
of the transfer.

 

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13.3 Insolvency Events

For the purposes of clause 13.1(d) an Insolvency Event occurs in relation to a
person or entity (the Relevant Person) if any of the following occurs:

 

  (a) controller: any of the following occur:

 

  (1) a controller (as defined in section 9 of the Corporations Act) is
appointed; or

 

  (2) a resolution to appoint controller is passed,

to the Relevant Person or over an asset of the Relevant Person unless, in the
case of an appointment, the other Shareholder is satisfied that the appointment
of the controller is capable of being set aside, and it is set aside, within 7
days of the appointment being made;

 

  (b) winding up: any of the following occur:

 

  (1) an order is made; or

 

  (2) a resolution is passed,

for the winding up of the Relevant Person;

 

  (c) administration: any of the following occur:

 

  (1) an administrator is appointed to the Relevant Person; or

 

  (2) a resolution to appoint an administrator to the Relevant Person is passed;

 

  (d) deregistration: the Relevant Person is deregistered;

 

  (e) suspends payment: the Relevant Person suspends payment of its debts
generally;

 

  (f) insolvency: the Relevant Person is:

 

  (1) unable to pay its debts when they are due; or

 

  (2) presumed to be insolvent under the Corporations Act;

 

  (g) arrangements: the Relevant Person enters into or resolves to enter into
any arrangement, composition or compromise with, or assignment for the benefit
of, any of its creditors;

 

  (h) ceasing business: the Relevant Person ceases to carry on business; or

 

  (i) analogous event: anything analogous to or having a substantially similar
effect to any of the events specified in clauses 13.3(a) to 13.3(h) happens in
relation to the Relevant Person under the laws of any jurisdiction.

 

13.4 Notice

If either of the Companies becomes aware of an Event of Default occurring in
respect of a Shareholder, the relevant Company will promptly notify the other
parties.

 

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14 Effect of Events of Default

 

 

 

14.1 Call Option

 

  (a) If an Event of Default occurs in respect of a Shareholder (the Defaulting
Shareholder), then immediately on the occurrence of an Event of Default the
other Shareholder (the Non-Defaulting Shareholder) has an option to purchase all
(but not part only) of the Defaulting Shareholder’s JV Shares at the Fair Market
Value of those JV Shares in accordance with this clause 14 (a Call Option).

 

  (b) A Call Option and the right to exercise it is without prejudice to any
other right that the Non-Defaulting Shareholder may have in respect of the
relevant Event of Default.

 

  (c) The Non-Defaulting Shareholder’s Call Option in respect of any Event of
Default will lapse if:

 

  (1) the Non-Defaulting Shareholder does not give a Default Notice in respect
of the Event of Default within the period required by clause 14.2(a); or

 

  (2) the Call Option is not exercised within the period specified in
clause 14.5(a).

However this does not affect any additional Call Options becoming exercisable in
the event of any further Events of Default.

 

14.2 Assessment of Fair Market Value – initial phase

 

  (a) At any time within 90 days of the Non-Defaulting Shareholder becoming
aware of the occurrence of the Event of Default, the Non-Defaulting Shareholder
may serve a written notice on the Defaulting Shareholder setting out the details
of the Event of Default and stating that it requires that the Fair Market Value
of the Defaulting Shareholder’s JV Shares be determined (a Default Notice).

 

  (b) If the Non-Defaulting Shareholder gives a Default Notice within the period
required by clause 14.2(a) then the Shareholders must enter into good faith
negotiations and use all reasonable endeavours to agree the Fair Market Value of
the Defaulting Shareholder’s JV Shares.

 

  (c) If the Shareholders cannot agree the Fair Market Value of the Defaulting
Shareholder’s JV Shares within 28 days after delivery of the Default Notice then
the matter must be referred (via two separate referrals) to two firms or persons
(being the Initial Experts for the purposes of the remaining provisions of this
clause 14.2) for assessment. The Initial Experts will be selected as follows:

 

  (1) each Shareholder must nominate one firm from the list below:

 

  (A) PwC (or its successor entity);

 

  (B) Deloitte (or its successor entity);

 

  (C) KPMG (or its successor entity);

 

  (D) Ernst & Young (or its successor entity); and

 

  (2)

if two Initial Experts are not appointed as a result of nominations under
clause 14.2(c)(1) (whether because either or both Shareholders refuses to
nominate, because both Shareholders nominate the same firm or because either or
both firms nominated refuse the

 

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  appointment) then unless the Shareholders agree on the firms to be appointed
firms must be drawn by lot by the Chair of the Boards (in the presence of a
representative of USG and Boral) from the list in clause 14.2(c)(1) or where
that does not result in two Initial Experts being appointed (because an
insufficient number of firms have accepted appointments), from the following
additional list until two Initial Experts are able to be appointed:

 

  (A) Houlihan Lokey (or its successor entity);

 

  (B) Duff & Phelps (or its successor entity);

 

  (C) Grant Samuel (or its successor entity);

 

  (D) BDO (or its successor entity);

 

  (E) Grant Thornton (or its successor entity);

 

  (F) PKF (or its successor entity),

provided always that in any given case the Shareholders may by agreement in
writing appoint any two firms or persons they consider to be appropriate
(whether or not appearing on any list above) as the Initial Experts for the
purposes of this clause 14.2.

 

  (d) The Shareholders must jointly instruct each of the Initial Experts to:

 

  (1) accept submissions from each Shareholder made within 14 days after the
date of appointment of the relevant Initial Expert (provided that if a
Shareholder does not provide a submission within the time period, the Expert may
proceed in accordance with this clause);

 

  (2) assess the Fair Market Value of the Defaulting Shareholder’s JV Shares in
accordance with the valuation procedures set out in Schedule 7; and

 

  (3) issue to each Shareholder and the Companies a certificate (the Initial
Expert’s Certificate) specifying the Fair Market Value of the JV Shares as
assessed by the relevant Initial Expert,

within the shortest practicable time.

 

  (e) The Shareholders agree that:

 

  (1) in assessing the Fair Market Value of the relevant JV Shares, the Initial
Experts act as an expert not an arbitrator;

 

  (2) the Defaulting Shareholder must bear the costs of both Initial Experts.

 

  (f) The parties must promptly provide all information and assistance
reasonably requested by any Initial Expert.

 

14.3 Binding determination of Fair Market Value

 

  (a) (Unless the Fair Market Value of the Defaulting Shareholder’s JV Shares
has already been agreed between the Shareholders at any stage), once both
Initial Experts have issued their Initial Expert’s Certificates the Shareholders
must again enter into good faith negotiations and use all reasonable endeavours
to agree the Fair Market Value of the Defaulting Shareholder’s JV Shares.

 

  (b) If the Shareholders still cannot agree the Fair Market Value of the
Defaulting Shareholder’s JV Shares within 14 days after both Initial Expert’s
Certificates have been issued the matter must be referred to:

 

  (1) a suitably qualified and independent person that is agreed between the
Shareholders for the purpose; or

 

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  (2) failing agreement within the 14 day period referred to above, a firm drawn
by lot by the Chair of the Boards (in the presence of a representative of USG
and Boral) from the list in clause 14.2(c)(1) (ignoring any distinction between
the groups of firms set out in that clause but excluding any firm appointed as
an Initial Expert),

such person or firm being the Determining Expert for the purposes of the
remaining provisions of this clause 14.3.

 

  (c) The Shareholders must instruct the Determining Expert to do each of the
following within the shortest practicable time:

 

  (1) accept submissions from each Shareholder made within 14 days after the
date of appointment of the Determining Expert (provided that if a Shareholder
does not provide a submission within the time period, the Determining Expert may
proceed in accordance with this clause);

 

  (2) determine the Fair Market Value of the Defaulting Shareholder’s JV Shares
in accordance with the valuation procedures set out in Schedule 7, but subject
to the requirements that Fair Market Value determined by the Determining Expert:

 

  (A) must not exceed the higher of the two Fair Market Values determined in the
Initial Expert’s Certificates; and

 

  (B) must not be less than the lower of the two Fair Market Values determined
in the Initial Expert’s Certificates (unless the only reason the valuation is
lower is because of the operation of paragraph (b)(2) of Schedule 7 in relation
to any Dividend paid or declared after the date of the relevant Initial Expert’s
Certificate); and

 

  (3) issue to each Shareholder and the Companies a certificate (the Final
Certificate) specifying the Fair Market Value of the JV Shares as determined by
the Determining Expert.

 

  (d) The Shareholders agree that:

 

  (1) in determining the Fair Market Value of the relevant JV Shares, the
Determining Expert acts as an expert not an arbitrator;

 

  (2) the decision of the Determining Expert, as detailed in the Final
Certificate, is final and binding on each of them in the absence of fraud or
manifest error; and

 

  (3) the Defaulting Shareholder must bear the costs of the Determining Expert.

 

  (e) The parties must promptly provide all information and assistance
reasonably requested by the Determining Expert.

 

14.4 Failure of expert process

 

  (a) If clause 14.2 requires the assessment of the Fair Market Value of the
Defaulting Shareholder’s JV Shares to be referred to Initial Experts but Initial
Expert’s Certificates are not issued by two Initial Experts because:

 

  (1) USG and Boral do not agree on the identity of the Initial Experts and none
(or not enough) of the firms selected as potential Initial Experts under the
process in clause 14.2(c) agrees to the accept the appointment;

 

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  (2) two Initial Experts are appointed but either or both Initial Experts
subsequently withdraw or advise that they are for any reason unable to make an
assessment; or

 

  (3) for any other reason,

and USG and Boral cannot within a further 14 days agree on the appointment of
alternative Initial Experts, then the expert determination process will be taken
to have failed and any party may commence proceedings in a court of competent
jurisdiction in relation to the determination of the Fair Market Value of the
Defaulting Shareholder’s JV Shares.

 

  (b) If two Initial Expert’s Certificates are issued and clause 14.3 requires
the determination of the Fair Market Value of the Defaulting Shareholder’s JV
Shares to be referred to a Determining Expert but no expert determination on the
matter is possible because:

 

  (1) USG and Boral do not agree on the identity of the Determining Expert and
none of the firms selected as potential Determining Experts agree to accept the
appointment;

 

  (2) a Determining Expert is appointed but the Determining Expert subsequently
withdraws or advises that it is for any reason unable to make a determination;
or

 

  (3) for any other reason,

the Fair Market Value of the Defaulting Shareholder’s JV Shares will (in the
absence of manifest error in either such certificate, in which case any party
may commence proceedings in a court of competent jurisdiction in relation to the
determination) be deemed to be the mid point between the Fair Market Values
assessed for those JV Shares in the two Initial Expert’s Certificates.

 

14.5 Exercise of options

 

  (a) The Non-Defaulting Shareholder may exercise its Call Option within 28 days
after:

 

  (1) receipt of the Final Certificate (or if clause 14.4 applies the date the
Fair Market Value Fair of the Defaulting Shareholder’s JV Shares is definitively
determined by a court of competent jurisdiction or deemed determined by
application of clause 14.4(b)); or

 

  (2) if earlier, the date the Shareholders agree in writing the Fair Market
Value of the Defaulting Shareholder’s JV Shares for the purposes of the Call
Option,

by giving written notice to that effect to the Defaulting Shareholder.

 

  (b) If the Non-Defaulting Shareholder gives a Default Notice within the period
required by clause 14.2(a), the Companies must provide to the Non-Defaulting
Shareholder all information and assistance reasonably required by the
Non-Defaulting Shareholder in order for it to consider and, if it so determines,
exercise its Call Option (including all information and assistance reasonably
required for due diligence investigations on the JV Group) and the
Non-Defaulting Shareholder may despite clause 18 disclose any such information
on a confidential basis to its Parent and Related Corporations and their
respective advisers and financiers.

 

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  (c) If the Non-Defaulting Shareholder exercises the Call Option within the
time period required by clause 14.5(a), the Defaulting Shareholder must sell to
the Non-Defaulting Shareholder all of its JV Shares and the Non-Defaulting
Shareholder must purchase those JV Shares at their Fair Market Value (as agreed,
determined or deemed determined in accordance with this clause 14), and
clause 15 will apply.

 

14.6 Time periods

The Shareholders may by agreement in writing extend (or shorten) any time period
applicable under this clause 14 in relation to any given Event of Default.

 

15 Completion of transfer of JV Shares between Shareholders

 

 

 

15.1 Definitions

The meanings of the terms used in this clause 15 are set out below.

 

Term

  

Meaning

Transferor Shareholder

  

means a Shareholder who is a:

 

1       Defaulting Shareholder; or

 

2       Seller.

Transferee Shareholder

   means where the Shareholder who is not the Transferor Shareholder.

Relevant Date

  

means, where the Transferor Shareholder is a:

 

1       Defaulting Shareholder; the date the Non-Defaulting Shareholder
exercises its Call Option; or

 

2       Seller, the date the Seller accepts the Recipient’s offer pursuant to
clause 12.5(a) or the date the Recipient exercises its Last Right under
clause 12.8(a) (as relevant).

 

15.2 Contract for sale and purchase

Where any clause of this agreement provides that this clause 15 is to apply to
the sale and purchase of a Shareholder’s JV Shares, then with effect from the
applicable Relevant Date the Shareholders will be bound by a contract for the
sale and purchase of the relevant JV Shares on and subject to:

 

  (a) the terms set out in this clause 15; and

 

  (b) where the Transferor Shareholder is a Seller, the relevant Sale Terms or
the terms set out in the relevant Second Notice of Sale (as applicable),

but so that to the extent of any inconsistency the provisions of this clause 15
will prevail.

 

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15.3 Transfer

 

  (a) The Transferor Shareholder will be deemed to warrant in favour of the
Transferee Shareholder (at the Relevant Date and at closing of the transfer of
the JV Shares pursuant to this clause 15) that it is:

 

  (1) the sole legal and beneficial owner of its JV Shares;

 

  (2) has full right, power and authority to sell and transfer its JV Shares to
the Transferee Shareholder;

 

  (3) that the Transferor Shareholder transfers to the Transferee Shareholder
free clear and unencumbered legal title to its JV Shares free of any Security
Interests and free of any third party rights,

and for the avoidance of doubt where the Transferor Shareholder is a Seller will
also give any other warranties required under the relevant Sale Terms or the
terms set out in the relevant Second Notice of Sale (as applicable).

 

  (b) Within 7 days of the Relevant Date the Transferee Shareholder may notify
the Transferor Shareholder in writing of all Consents it requires in order to
proceed with the purchase of the JV Shares (failing which the Transferee
Shareholder will be taken to have notified that no Consents are required).

 

  (c) Each party must use its best endeavours to ensure that each Consent
notified under clause 15.3(b) is obtained as expeditiously as possible
including, but not limited to, providing all reasonable assistance to the other
parties as is necessary to obtain each Consent.

 

  (d) The purchase price payable for the Transferor Shareholder’s JV Shares (as
specified in this Agreement) is payable in Immediately Available Funds on the
closing of the purchase and sale, which must take place on the day which is 14
days after the later of:

 

  (1) the Relevant Date; and

 

  (2) the date on which all Consents (if any) notified under clause 15.3(b) have
been received by the Transferee Shareholder (or waived at the Transferee
Shareholder’s absolute discretion),

or, where the Transferor Shareholder is a Seller, if later the date required
under the relevant Sale Terms or the terms set out in the relevant Second Notice
of Sale (as applicable).

 

  (e) At the closing of the purchase and sale, the Transferor Shareholder must
deliver to the Transferee Shareholder:

 

  (1) the share certificates and an executed transfer for the Transferor
Shareholder’s JV Shares;

 

  (2) a written resignation from each director of the Companies appointed by the
Transferor Shareholder;

 

  (3) a duly executed notice irrevocably appointing the Transferee Shareholder
as the Transferor Shareholder’s proxy in respect of the Transferee Shareholder’s
JV Shares until such time as those shares are registered in the name of the
Transferee Shareholder,

and where the Transferor Shareholder is a Seller, the parties must for the
avoidance of doubt each do the things required to be done at closing under the
relevant Sale Terms or the terms set out in the relevant Second Notice of Sale
(as applicable).

 

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  (f) The Transferee Shareholder indemnifies the Transferor Shareholder against
any claim, action, damage, loss, liability, cost, charge, expense, outgoing, or
payment that the Transferor Shareholder pays, suffers or incurs or is liable for
in respect of any action taken by the Transferee Shareholder as the Transferor
Shareholder’s proxy under clause 15.3(e)(3).

 

  (g) If each Consent (if any) notified under clause 15.3(b) is not satisfied or
waived by the Transferee Shareholder within 12 months after the date of service
of the notice under clause 15.3(b) then (without prejudice to any other right
that a Shareholder may have under this agreement and without prejudice to any
termination rights under any terms applicable under clause 15.2(b)):

 

  (1) either Shareholder may by notice to the other terminate the contract of
sale and purchase constituted under this agreement on the Relevant Date; and

 

  (2) upon such termination the Transferor Shareholder will have no further
obligation to sell its JV Shares to the Transferee Shareholder under this
clause 15.

 

15.4 Transferee Shareholder to assume guarantees

 

  (a) Each of the Shareholders must take all reasonable steps to ensure that,
effective from closing of the sale and purchase of JV Shares pursuant to this
clause 15, the Transferor Shareholder and its Parent or Related Corporations are
released from any actual, contingent or accrued liabilities under any Support
Commitments. For these purposes ‘reasonable steps’ includes the Transferee
Shareholder or a Related Corporation providing the relevant third party
beneficiary with a replacement guarantee or other arrangement (as the case may
be) on terms the same or substantially the same as the terms of the existing
Support Commitment.

 

  (b) To the extent the Transferor Shareholder or any Related Corporation has
not been released from a Support Commitment by closing of the relevant sale, and
to the extent the parties have not already implemented appropriate cross
indemnities under clause 8.11, the Transferee Shareholder must indemnify the
relevant entity in respect of any loss, liability or expense that it pays,
suffers, incurs or is liable for under or in relation to that Support Commitment
after closing. The Transferor Shareholder holds the benefit of this indemnity on
trust for its Related Corporations.

 

16 Termination

 

 

 

16.1 Term

 

  (a) The Shareholders may terminate this agreement at any time by agreement in
writing.

 

  (b) Subject to clause 16.2, this agreement:

 

  (1) ceases to apply to a Shareholder that has transferred all its JV Shares as
permitted by this agreement; and

 

  (2) terminates when any Shareholder holds all the issued JV Shares.

 

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16.2 Survival

The occurrence of any event specified in clause 16.1 will not affect:

 

  (a) any accrued rights and obligations of the parties in respect of any breach
of this agreement prior to the occurrence of that event; or

 

  (b) any provision of this agreement which is expressed to come into effect on,
or survive, the occurrence of that event.

 

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Part D – Miscellaneous

 

 

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17 Operations of Shareholders

 

 

17.1 Definitions

The meanings of the terms used in this clause 17 are set out below:

 

  (a) Boral Intercompany Loan means any loan provided at any time by any Boral
Group Member (as lender) to Boral Holder 1 or to Boral Holder 2 ;and

 

  (b) USG Intercompany Loan means any loan provided at any time by any USG Group
Member (as lender) to USG.

 

17.2 Restrictions on USG

Notwithstanding the terms of any USG Intercompany Loan:

 

  (a) USG Guarantor must ensure that no USG Group Member demands repayment of;
and

 

  (b) USG must not (and USG Guarantor must ensure that USG does not) repay or
prepay,

any amount of principal, interest or other amount under or in connection with
any USG Intercompany Loan if such repayment or prepayment would or would be
reasonably likely to result in an Insolvency Event occurring with respect to
USG.

 

17.3 Restrictions on Boral

Notwithstanding the terms of any Boral Intercompany Loan:

 

  (a) Boral Guarantor must ensure that no Boral Group Member demands repayment
of; and

 

  (b) a Boral Holder must not (and USG Guarantor must ensure that each Boral
Holder does not) repay or prepay,

any amount of principal, interest or other amount under or in connection with
any Boral Intercompany Loan if such repayment or prepayment would or would be
reasonably likely to result in an Insolvency Event occurring with respect to
Boral Holder 1 or Boral Holder 2.

 

18 Confidentiality and publicity

 

 

18.1 Definition

For the purposes of this clause 18:

 

  (a) JV Information means any information relating to the Business or the
operations, assets or affairs of any JV Group Member; or

 

  (b) Shareholder Information means, in relation to a Shareholder:

 

  (1) any information relating to the business, assets or affairs of that
Shareholder or any Parent or Affiliate of that Shareholder (to the extent
disclosed in the course of the transactions contemplated by this agreement or
the Transaction Documents); and

 

  (2) the terms of this agreement or any transactions contemplated by it.

 

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18.2 Confidentiality

 

  (a) Subject to clause 18.3, each Shareholder (and its respective Parent) must
not, and must (in addition to the confidentiality obligations contained in any
other Transaction Document) ensure that its directors, officers, employees,
agents, representatives and Affiliates do not:

 

  (1) disclose any JV Information or any Shareholder Information in relation to
the other Shareholder;

 

  (2) use any JV Information, or Shareholder Information in relation to the
other Shareholder, in any manner which may cause or is calculated to cause loss
to any JV Group Member or any other party; or

 

  (3) make any public announcement or issue any press release regarding this
agreement or the transactions contemplated by it (unless the form of the
announcement or release has been agreed by both Shareholders).

 

  (b) Subject to clause 18.3, each Company must not, and must ensure (in
addition to the confidentiality obligations contained in any other Transaction
Document) that its officers (other than directors nominated by individual
Shareholders), employees, agents, representatives and Subsidiaries do not:

 

  (1) disclose any JV Information, except to the extent the disclosure has been
approved by the Boards or the Shareholders in accordance with this Agreement;

 

  (2) disclose any Shareholder Information in relation to either Shareholder;

 

  (3) use any Shareholder Information in relation to either Shareholder, in any
manner which may cause or is calculated to cause loss to any JV Group Member or
any other party; or

 

  (4) make any public announcement or issue any press release regarding this
agreement or the transactions contemplated by it (unless the form of the
announcement or release has been agreed by both Shareholders).

 

18.3 Permitted disclosure

Subject to law (including legal restrictions on the use and disclosure of
personal information) a party may disclose, and may permit its Parent,
directors, officers, employees, agents, representatives and Affiliates to
disclose, any JV Information or Shareholder Information in relation to a
Shareholder:

 

  (a) with the prior written consent of:

 

  (1) in the case of JV Information, the Boards or the Shareholders in
accordance with this Agreement; or

 

  (2) in the case of Shareholder Information, the relevant Shareholder; or

 

  (b) if it is required to do so:

 

  (1) by law or a Government Agency; or

 

  (2) (in the case of a Parent only) by any regulatory authority or recognised
stock exchange on which its shares or other securities are listed in compliance
with the disclosure requirements of the relevant authority or stock exchange,

 

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provided, in respect to Shareholder Information, that the recipient has to the
extent possible having regard to the required timing of the disclosure consulted
with the provider of the information as to the form and content of the
disclosure.

 

  (c) to the party’s directors, officers, employees, bankers, auditors,
professional advisers, ratings agencies or to the party’s Related Corporations
(or their respective directors, officers, employees, bankers, auditors, rating
agencies or professional advisers) provided that the recipient must keep the
relevant information confidential and so that the party making the disclosure
will be responsible for any breach of confidentiality by the relevant recipient,
or any use of JV Information or Shareholder Information by the recipient that is
incompatible with clause 18.2(a)(2) (or clause 18.2(b)(3) as applicable), unless
the recipient has entered into an agreement or deed of the nature contemplated
by clause 18.4;

 

  (d) if the relevant information is in the public domain at the time of the
relevant disclosure, other than by a breach of this clause 18;

 

  (e) (in the case of a Shareholder only and subject to clause 18.4) the
information is disclosed to a bona fide prospective purchaser of the party’s JV
Shares in circumstances where clause 12 permits the recipient to market its JV
Shares to the relevant person provided, in respect to Shareholder Information,
sufficient advanced notice is given to permit the relevant Shareholder to object
to any disclosure it considers to be in breach of this agreement;

 

  (f) the disclosure is made to an Initial Expert or Determining Expert as
contemplated by clause 14.2 or 14.3 provided such disclosure is on a
confidential basis;

 

  (g) (in the case of a Shareholder only) the disclosure is made in order for
the party to seek a Consent for a transaction contemplated by this agreement,
and (to the extent possible) is made on a confidential basis;

 

  (h) to a Sale Agent on a confidential basis in the course of an appointment
under clause 7.4 (and subject to clause 7.4(d)(6) the Sale Agent will for the
avoidance of doubt be permitted to disclose JV Information and Shareholder
Information to bona fide prospective purchasers of the JV Enterprise in the
course of discharging the Sale Agent’s role) provided, in respect to Shareholder
Information, sufficient advanced notice is given to permit the relevant
Shareholder to object to any disclosure it considers to be in breach of this
agreement; or

 

  (i) the disclosure is expressly permitted or required under any provision of
this agreement or any Transaction Document.

 

18.4 Disclosure to a prospective purchaser

Any party that makes or permits a disclosure of JV Information or Shareholder
Information in relation to any Shareholder under clause 18.3(e) must ensure that
the prospective purchaser first enters into a deed poll in favour of the parties
whereby it agrees to comply with provisions substantially similar to those
contained in this clause 18.

 

18.5 USG Confidential Information

 

  (a) Notwithstanding anything to the foregoing, no Boral Group Member or JV
Group Member is permitted to use or disclose any Confidential Information (as
that term is defined in the USG Umbrella Intellectual Property Agreements) other
than in accordance with those documents (or the associated specific
confidentiality agreements pursuant to those documents), provided that:

 

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  (1) Boral may disclose Confidential Information to a bona fide prospective
purchaser of Boral’s JV Shares in circumstances where clause 12 permits Boral to
market its JV Shares to the relevant person;

 

  (2) Boral may disclose Confidential Information to an Initial Expert or
Determining Expert as contemplated by clause 14.2 or 14.3; and

 

  (3) a Sale Agent may disclose Confidential Information to bona fide
prospective buyers of the JV Enterprise in the course of an appointment under
clause 7.4;

but in each case:

 

  (4) provided that in no event shall Boral or a Sale Agent disclose Trade
Secrets (as that term is defined in the USG Umbrella Intellectual Property
Agreement) owned by one or more USG Group Members or one or more JV Group
Members without written permission in advance from the USG Group Member or USG
Group Members (at their discretion), and such permission if granted may include
limitations on the recipients of such disclosures, limitation on their use, and
safe guards to protect the Trade Secrets taking into account their value and
sensitivity to a USG Group Member or the JV Group;

 

  (5) only to the extent that the disclosure is reasonably required to assist
the relevant recipient to meaningfully evaluate the value of the JV Group and
the relevant JV Shares (or the JV Enterprise, as the case may be);

 

  (6) only to the extent that the disclosure does not and is not likely to
jeopardise any Trade Secrets or proprietary information of any USG Group Member
or JV Group Member, or pending applications for, patents, trademark
registrations, copyright registrations or domain name registrations being
prosecuted by any USG Group Member or JV Group Member; and

 

  (7) (without limiting clause 7.4(d)(6) in the case of a Sale Agent) only to
the extent that Boral or the Sale Agent, as the case may be, has first ensured
that the relevant recipient has entered into a deed poll in favour of USG, USG
Guarantor and the relevant USG Group Member whereby it agrees not to use or
disclose such Confidential Information (other than for the express purpose of
evaluating the value of the JV Group and the relevant JV Shares (or the JV
Enterprise, as the case may be) and where applicable making a decision whether
or not to acquire them and on what terms); and

 

  (8) Boral or the Sale Agent (as applicable) provides USG and the relevant USG
Group Member with a copy of the proposed Confidential Information that is to be
disclosed 3 Business Days prior to disclosure (in order that USG and the USG
Group Member may reasonably object to any disclosure it considers to be in
breach of this clause),

and the Companies may disclose Confidential Information to Boral or a Sale Agent
to the extent Boral or the Sale Agent is entitled to disclose such Confidential
Information as set out above.

 

  (b) Boral Guarantor and Boral indemnify any affected USG Group Member for any
loss suffered by the USG Group Member a result of any disclosure of Confidential
Information in accordance with this clause 18.5.

 

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18.6 Boral Confidential Information

 

  (a) Notwithstanding anything to the foregoing, no USG Group Member or JV Group
Member is permitted to use or disclose any Confidential Information (as that
term is defined in the Boral Umbrella Intellectual Property Agreements) other
than in accordance with that document or the associated specific confidentiality
agreements, provided that:

 

  (1) USG may disclose Confidential Information to a bona fide prospective
purchaser of USG’s JV Shares in circumstances where clause 12 permits USG to
market its JV Shares to the relevant person; and

 

  (2) USG may disclose Confidential Information to an Initial Expert or
Determining Expert as contemplated by clause 14.2 or 14.3; and

 

  (3) a Sale Agent may disclose Confidential Information to bona fide
prospective buyers of the JV Enterprise in the course of an appointment under
clause 7.4;

but in each case:

 

  (4) provided that in no event shall USG or a Sale Agent disclose Trade Secrets
(as that term is defined in the Boral Umbrella Intellectual Property Agreement)
owned by one or more Boral Group Members or one or more JV Group Members without
written permission in advance from the Boral Group Member (at its discretion),
and such permission if granted may include limitations on the recipients of such
disclosures, limitation on their use, and safe guards to protect the trade
secrets taking into account their value and sensitivity to the Boral Group
Member;

 

  (5) only to the extent that the disclosure is reasonably required to assist
the relevant recipient to meaningfully evaluate the value of the JV Group and
the relevant JV Shares (or the JV Enterprise, as the case may be);

 

  (6) only to the extent that the disclosure does not and is not likely to
jeopardise any trade secrets or proprietary information of any Boral Group
Member or JV Group Member, or pending applications for, patents, trademark
registrations, copyright registrations or domain name registrations being
prosecuted by any Boral Group Member or JV Group Member; and

 

  (7) (without limiting clause 7.4(d)(6) in the case of a Sale Agent) only to
the extent that USG or the Sale Agent, as the case may be, has first ensured
that the relevant recipient has entered into a deed poll in favour of Boral and
Boral Guarantor (and any other relevant Boral Group Member) whereby it agrees
not to use or disclose such Confidential Information (other than for the express
purpose of evaluating the value of the JV Group and the relevant JV Shares (or
the JV Enterprise, as the case may be) and where applicable making a decision
whether or not to acquire them and on what terms); and

 

  (8) USG or the Sale Agent (as applicable) provides Boral (and any other
relevant Boral Group Member) with a copy of the proposed Confidential
Information that is to be disclosed 3 Business Days prior to disclosure (in
order that Boral may reasonably object to any disclosure it considers to be in
breach of this clause),

 

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and the Companies may disclose Confidential Information to USG or a Sale Agent
to the extent USG or the Sale Agent is entitled to disclose such Confidential
Information as set out above.

 

  (b) USG Guarantor and USG indemnify any affected Boral Group Member for any
loss suffered by the Boral Group Member a result of any disclosure of
Confidential Information in accordance with this clause 18.6.

 

18.7 Third Party IP

 

  (a) The parties acknowledge that the JV Group holds know how and other
proprietary information licensed to it by third parties (Third Party IP) and
that the JV Group is subject to obligations in relation to the disclosure and
use of the Third Party IP. Accordingly, to the extent the Third Party IP is
identified to Boral and USG in writing by the JV Group:

 

  (1) USG Guarantor and USG undertake to put appropriate processes in place to
preserve the confidentiality of the Third Party IP that the JV Group has
identified to them in writing and that Third Party IP is not communicated by any
USG officers or employees (or otherwise) to any USG Group Member, and is not
used by any USG Group Member to violate the legal rights of the relevant third
party or third parties; and

 

  (2) Boral Guarantor and Boral undertake to put appropriate processes in place
to preserve the confidentiality of the Third Party IP that the JV Group has
identified to them in writing and that Third Party IP is not communicated by any
Boral officers or employees (or otherwise) to any Boral Group Member, and is not
used by any Boral Group Member to violate the legal rights of the relevant third
party or third parties.

 

  (b) Clause 18.7(a) does not apply to a party to the extent:

 

  (1) the relevant Third Party IP is in the public domain; or

 

  (2) that party reasonably forms the view that the Third Party IP is infringing
it or its Affiliates’ Intellectual Property.

 

19 Stapling

 

 

 

19.1 JVC 1 Shares and JVC 2 Shares are Stapled

Each JV Share is made up of one JVC 1 Share and one JVC 2 Share that are Stapled
to one another in accordance with this clause 19.

 

19.2 Restrictions on dealings in JVC 1 Shares

Without limiting any provision of this agreement restricting the Disposal of any
JV Shares (but subject always to clause 11.4 and clause 19.5), JVC 1 must not
(and the Shareholders must use all reasonable endeavours to ensure that JVC 1
does not):

 

  (a) issue a JVC 1 Share unless JVC 2 issues a JVC 2 Share to the same person
at the same time and on terms that the JVC 1 Share is Stapled to the JVC 2 Share
immediately on issue;

 

  (b) cancel (whether by buy-back, redemption or otherwise) a JVC 1 Share unless
JVC 2 cancels the JVC 2 Share Stapled to that JVC 1 Share at the same time;

 

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  (c) make a call on, forfeit or accept the surrender of any partly-paid JVC 1
Share unless JVC 2 makes a call on, forfeits or accepts the surrender of the
partly-paid JVC 2 Share Stapled to that JVC 1 Share at the same time;

 

  (d) convert JVC 1 Shares into a larger or smaller number of JVC 1 Shares
unless JVC 2 converts the JVC 2 Shares Stapled to those JVC 1 Shares into the
same larger or smaller number of JVC 2 Shares at the same time;

 

  (e) agree or offer to do any of the above, or invite a person to participate
in any of the above transactions unless JVC 2 agrees, offers or invites a
person, to participate in the corresponding transaction;

 

  (f) do any of the above in relation to any other type of equity security
convertible into JVC 1 Shares, including for the avoidance of doubt, any options
to subscribe for JVC 1 Shares, unless JVC 2 does the same time at the same time
on the same terms (and on the basis that the resulting JVC 1 security is Stapled
to the resulting JVC 2 security); or

 

  (g) vary the terms of any equity securities issued by JVC 1 unless JVC 2 makes
the corresponding variation to the terms of the JVC 2 equity securities to which
they are Stapled.

 

19.3 Restrictions on dealings in JVC 2 Shares

Clause 19.2 applies in relation to JVC 2 mutatis mutandis as if all reference in
that clause to ‘JVC 1’ and ‘JVC 2’ were reversed and all references to a ‘JVC 1
Share’ and a ‘JVC 2 Share’ were reversed.

 

19.4 Transfers

Subject always to clause 11.4 and clause 19.5:

 

  (a) JVC 1 must not register any transfer of a JVC 1 Share unless JVC 2
registers the transfer of the JVC 2 Share Stapled to that JVC 1 Share to the
same person at the same time; and

 

  (b) JVC 2 must not register any transfer of a JVC 2 Share unless JVC 1
registers the transfer of the JVC 1 Share Stapled to that JVC 2 Share to the
same person at the same time.

 

19.5 Boral Holders – special provisions

For the purposes of clauses 19.2, 19.3 and 19.4 Boral Holder 1 and Boral Holder
2 are to be regarded as the same person, so that (without limitation):

 

  (a) an issue will satisfy clause 19.2(a) if an issue of a JVC 1 Share to Boral
Holder 1 occurs concurrently with an issue of a JVC 2 Share to Boral Holder 2;
and

 

  (b) a transfer will satisfy clause 19.4 if a transfer of a JVC 1 Share to
Boral Holder 1 occurs concurrently with a transfer of a JVC 2 Share to Boral
Holder 2.

 

19.6 Administrative matters

 

  (a) The Companies must:

 

  (1) maintain a register of holders of JV Shares and record all details of, and
dealings in, JV Shares and the JVC 1 Shares and JVC 2 Shares comprising them in
that register; and

 

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  (2) ensure that the register of holders of JV Shares is entirely consistent
with the members’ registers maintained by JVC 1 and JVC 2.

 

  (b) The Companies must issue joint certificates to each holder of JV Shares.

 

19.7 Allocation of subscription amounts

 

  (a) The Companies must allocate:

 

  (1) the subscription amount received on issue of JV Share between its JVC 1
Share component and JVC 2 Share component; and

 

  (2) the amount payable on cancellation (whether on repurchase, redemption,
buy-back or otherwise) of any JV Share between its JVC 1 Share component and JVC
2 Share component,

on the basis of the relative fair values of those components as agreed by the
Shareholders before the relevant issue or cancellation (or where applicable in
accordance with any values specified in any Valid Funding Notice).

 

  (b) If a JV Share is not issued fully-paid, the Companies must allocate:

 

  (1) the unpaid amount;

 

  (2) any amount received on payment of a call on the JV Share; and

 

  (3) any amount received on sale of forfeited JV Shares,

between its JVC 1 Share component and JVC 2 component in the same proportions as
they would allocate any subscription amount received on issue of that JV Share.

 

  (c) Clause 19.7(a) applies with appropriate modifications to any issue of
equity securities by JVC 1 and JVC 2 other than JV Shares.

 

19.8 Saving

Nothing in this clause 19 is intended to exclude or limit the need to comply
with the relevant provisions of this agreement or applicable law (including
Shareholder or Board approval requirements) in relation to the issue or transfer
of securities or any other relevant action.

 

20 Guarantor provisions

 

 

 

20.1 Boral guarantee

 

  (a) Boral Guarantor:

 

  (1) unconditionally and irrevocably guarantees to each other party on demand,
the due and punctual performance of Boral’s obligations under this agreement;
and

 

  (2) as a separate and additional liability, indemnifies each other party
against all Loss, actions, proceedings and judgments of any nature, incurred by,
brought, made or recovered against the party arising from any default or delay
in the due and punctual performance of Boral’s obligations under this agreement.

 

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  (b) The liability of Boral Guarantor under this clause 20.1 is not affected by
anything which, but for this clause 20.1, might operate to release or exonerate
Boral Guarantor in whole or in part from its obligations including any of the
following, whether with or without the consent of Boral Guarantor:

 

  (1) the grant to Boral, Boral Guarantor or any other person of any time,
waiver or other indulgence, or the discharge or release of Boral, Boral
Guarantor or any other person from any liability or obligation;

 

  (2) any transaction or arrangement that may take place between any party, any
Related Corporation of a party, the Buyer Guarantor or any other person;

 

  (3) any other party exercising or refraining from exercising its rights under
any security or any other rights, powers or remedies against Boral, Boral
Guarantor or any other person;

 

  (4) the amendment, replacement, extinguishment, unenforceability, failure,
loss, release, discharge, abandonment or transfer either in whole or in part and
either with or without consideration, of any security now or in the future held
by any party or any Related Corporation of a party from Boral, Boral Guarantor
or any other person or by the taking of or failure to take any security;

 

  (5) the failure or omission or any delay by any party to give notice to Boral
Guarantor of any default by Boral or any other person under this agreement; and

 

  (6) any legal limitation, disability, incapacity or other circumstances
related to the Boral, Boral Guarantor or any other person.

 

  (c) This clause 20.1 is a principal obligation and is not to be treated as
ancillary or collateral to any other right or obligation and extends to cover
this agreement as amended, varied, supplemented, renewed or replaced.

 

  (d) This clause 20.1 is a continuing obligation of Boral Guarantor, and
remains in full force and effect for so long as Boral has any liability or
obligation to any other party under this agreement and until all of those
liabilities or obligations have been fully discharged.

 

  (e) Boral Guarantor must make all payments which become due under this clause
20.1, free and clear and without deduction of all present and future
withholdings (including taxes, duties, levies, imposts, deductions and charges
of Australia or any other jurisdiction). If Boral is compelled by law to deduct
any withholding, then, in addition to any payment under this clause 20.1, it
must pay to the relevant beneficiary party such amount as is necessary to ensure
that the net amount received by that party after withholding equals the amount
the party would otherwise be entitled to if not for the withholding.

 

  (f) Boral Guarantor must pay all moneys that it becomes liable to pay under
this clause 20.1 in the currency in which they are payable under this agreement
and free of any commissions and expenses relating to foreign currency conversion
or any other charges or expenses.

 

  (g) Boral Guarantor has no right to set off, deduct or withhold any moneys
which it may be or become liable to pay under this clause 20.1 , against any
moneys that any other party may be, or become, liable to pay to a Boral Group
Member whether under this agreement or otherwise.

 

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20.2 USG guarantee

 

  (a) USG Guarantor:

 

  (1) unconditionally and irrevocably guarantees to each other party on demand,
the due and punctual performance of USG’s obligations under this agreement; and

 

  (2) as a separate and additional liability, indemnifies each other party
against all Loss, actions, proceedings and judgments of any nature, incurred by,
brought, made or recovered against the party arising from any default or delay
in the due and punctual performance of USG’s obligations under this agreement.

 

  (b) The liability of USG Guarantor under this clause 20.2 is not affected by
anything which, but for this clause 20.2, might operate to release or exonerate
USG Guarantor in whole or in part from its obligations including any of the
following, whether with or without the consent of USG Guarantor:

 

  (1) the grant to USG, USG Guarantor or any other person of any time, waiver or
other indulgence, or the discharge or release of USG, USG Guarantor or any other
person from any liability or obligation;

 

  (2) any transaction or arrangement that may take place between any party, any
Related Corporation of a party, the Buyer Guarantor or any other person;

 

  (3) any other party exercising or refraining from exercising its rights under
any security or any other rights, powers or remedies against USG, USG Guarantor
or any other person;

 

  (4) the amendment, replacement, extinguishment, unenforceability, failure,
loss, release, discharge, abandonment or transfer either in whole or in part and
either with or without consideration, of any security now or in the future held
by any party or any Related Corporation of a party from USG, USG Guarantor or
any other person or by the taking of or failure to take any security;

 

  (5) the failure or omission or any delay by any party to give notice to USG
Guarantor of any default by USG or any other person under this agreement; and

 

  (6) any legal limitation, disability, incapacity or other circumstances
related to the USG, USG Guarantor or any other person.

 

  (c) This clause 20.2 is a principal obligation and is not to be treated as
ancillary or collateral to any other right or obligation and extends to cover
this agreement as amended, varied, supplemented, renewed or replaced.

 

  (d) This clause 20.2 is a continuing obligation of USG Guarantor, and remains
in full force and effect for so long as USG has any liability or obligation to
any other party under this agreement and until all of those liabilities or
obligations have been fully discharged.

 

  (e) USG Guarantor must make all payments which become due under this
clause 20.2, free and clear and without deduction of all present and future
withholdings (including taxes, duties, levies, imposts, deductions and charges
of Australia or any other jurisdiction). If USG is compelled by law to deduct
any withholding, then, in addition to any payment under this clause 20.2, it
must pay to the relevant beneficiary party such amount as is necessary to ensure
that the net amount received by that party after withholding equals the amount
the party would otherwise be entitled to if not for the withholding.

 

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  (f) USG Guarantor must pay all moneys that it becomes liable to pay under this
clause 20.2 in the currency in which they are payable under this agreement and
free of any commissions and expenses relating to foreign currency conversion or
any other charges or expenses.

 

  (g) USG Guarantor has no right to set off, deduct or withhold any moneys which
it may be or become liable to pay under this clause 20.2, against any moneys
that any other party may be, or become, liable to pay to a USG Group Member
whether under this agreement or otherwise.

 

21 Representations and warranties

 

 

 

21.1 Warranties

 

  (a) Each party represents and warrants to each other party:

 

  (1) it is duly incorporated and validly existing under the laws of the place
of its incorporation;

 

  (2) it has full corporate power to execute, deliver and perform its
obligations under this agreement and to carry out the transactions contemplated
by this agreement;

 

  (3) the execution, delivery and performance of this agreement:

 

  •   has been properly authorised by it; and

 

  •   does not constitute a breach of any law or obligation, or cause or result
in a default under any agreement or Security Interest by which it is bound and
that would prevent it from entering into and performing its obligations under
this agreement;

 

  (4) this agreement constitutes a legal, valid and binding obligation of it
enforceable in accordance with its terms by appropriate legal remedy;

 

  (5) there are no actions, claims, proceedings or investigations pending or to
the best of its knowledge threatened against it or by it that may have a
material adverse effect on its ability to perform its obligations under this
agreement;

 

  (b) Each party will be deemed to represent and warrant the matters specified
in clause 21.1(a) throughout the duration of this agreement.

 

  (c) Each representation and warranty in clause 21.1(a) is to be treated as a
separate representation and warranty. The interpretation of any statement made
may not be restricted by reference to or inference from any other statement.

 

21.2 Notification of breach

Each party undertakes to give written notice immediately to each other party of
any matter or event coming to its attention that:

 

  (a) shows any of the representations and warranties given by it in this
agreement to be or to have been untrue or misleading or breached; or

 

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  (b) constitutes or is reasonably likely to constitute (with the passage of
time, the giving of notice, the making of any determination hereunder or any
combination thereof) an Event of Default.

 

22 Rights and obligations of Boral Holders

 

 

 

22.1 Joint and several parties

Subject to this clause 22, in this agreement a reference to the party ‘Boral’ is
to be read as a reference to Boral Holder 1 and Boral Holder 2 jointly and
severally so that:

 

  (a) all obligations and liabilities of, and all agreements, undertakings and
acknowledgements by, Boral under this agreement are taken to be assumed and
given by each of the Boral Holders, jointly and severally;

 

  (b) to the extent that an amount is payable by Boral under this agreement,
that amount is payable by the Boral Holders jointly and severally;

 

  (c) a right or power conferred on Boral under this agreement may be exercised
by either Boral Holder acting alone (and any such exercise will be taken to have
been by, and will bind, both of them). Without limiting the foregoing, any
consent, approval or exercise of discretion by either Boral Holder will
constitute a consent, approval or exercise of discretion by both of them for the
purposes of this agreement;

 

  (d) a notice given pursuant to clause 23 by either Boral Holder will be taken
to be a notice given by, and will bind, both of them;

 

  (e) receipt by either Boral Holder of any payment, notice or other document
that any other party has to pay or give Boral under this agreement operates to
discharge that other party in relation to each Boral Holder (but for the
avoidance of doubt in relation to any payment, only to the extent of the
relevant amount paid);

 

  (f) a reference to an Affiliate or Related Corporation of Boral is a reference
to an Affiliate or Related Corporation of either Boral Holder; and

 

  (g) all obligations or liabilities of other parties to Boral are owed to the
Boral Holders jointly,

and any reference to a ‘Shareholder’ will where that Shareholder is Boral apply
on the same basis.

 

22.2 Holdings to be aggregated

Boral’s JVC 1 Percentage, JVC 2 Percentage and Shareholding Percentage are for
the avoidance of doubt to be determined using the aggregate number of JVC 1
Shares and JVC 2 Shares held by the Boral Holders.

 

22.3 Operation of pre-emptive provisions

 

  (a) If the Shareholder giving a Notice of Sale under clause 12 is Boral, that
Notice of Sale must be in respect of all JVC 1 Shares and JVC 2 Shares held by
both Boral Holders at the relevant time. The Boral Holders will be the Seller
for the purposes of that clause (on the joint and several basis described in
clause 23.1, but so that each will separately transfer the JVC 1 Shares or JVC 2
Shares of which it is the registered holder).

 

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  (b) If the Shareholder receiving a Notice of Sale under clause 12 is Boral,
the Boral Holders will be the Recipient for the purposes of that clause on the
joint and several basis described in clause 22.1, but so that:

 

  (1) any sale of the relevant Seller’s JV Shares to the Recipient under any
provision of clause 12 will (unless the Shareholders agree otherwise in writing)
be on the basis that the Seller’s JVC 1 Shares will be transferred to Boral
Holder 1 and the Seller’s JVC 2 Shares will be transferred to Boral Holder 2,
and:

 

  •   the relevant Sale Terms

 

  •   (if applicable) the terms set out in any Second Notice of Sale,

will be taken to be modified to the extent to permit this to occur if the
Recipient is the ultimate buyer of the Sale Shares; and

 

  (2) if the Boral Holders as Recipient exercise a Tag Right in relation to a
proposed sale of the relevant Sale Shares, the modifications to the applicable
sale terms under clause 12.9(b) will include such modifications as necessary to
reflect that the Boral Holders have joint rights and liabilities but will
transfer their JV Shares as two separate entities.

 

22.4 Operation of default provisions

 

  (a) An Event of Default is taken to have occurred in relation to Boral if an
Event of Default occurs in relation to either or both of the Boral Holders.

 

  (b) If an Event of Default occurs in relation to Boral, the Defaulting
Shareholder for the purposes of clause 14 will be the Boral Holders on the joint
and several basis described in clause 22.1, so that:

 

  (1) at the closing of any sale resulting from the exercise of the
Non-Defaulting Shareholder’s Call Option each Boral Holder will separately
transfer the JVC 1 Shares or JVC 2 Shares of which it is the registered holder;
and

 

  (2) the proxies contemplated by clause 15.3(b) will be given separately by
each Boral Holder in respect of the JVC 1 Shares or JVC 2 Shares of which it is
the registered holder,

and for the avoidance of doubt the Call Option of the Non-Defaulting Shareholder
will apply in respect to the total number of JVC 1 Shares and JVC 2 Shares held
by both Boral Holders.

 

  (c) If an Event of Default occurs in relation to USG, the Boral Holders will
be the Non-Defaulting Shareholder for the purposes of any application of
clause 14, on the joint and several basis described in clause 22.1 , but so that
(unless the Shareholders agree otherwise in writing) at the closing of any sale
resulting from the exercise of the Non-Defaulting Shareholder’s Call Option the
Defaulting Shareholder’s JVC 1 Shares will be transferred to Boral Holder 1 and
its JVC 2 Shares will be transferred to Boral Holder 2.

 

22.5 Operation of Deadlock provisions

 

  (a) If the Shareholder that exercises its Call Right pursuant to clause 7.5(c)
is USG in circumstances where the relevant Best Offer contemplates the
acquisition of all JV Shares (as opposed to the Business), the Boral Holders
will be the selling parties for the purposes of that clause (on the joint and
several basis described in clause 22.1) but so that each Boral Holder will agree
to separately transfer all of the JVC 1 Shares or JVC 2 Shares of which it is
the registered holder to USG.

 

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  (b) If the Shareholder that exercises the Call Right pursuant to clause 7.5(c)
is Boral, the Boral Holders will be the Exercising Shareholder for the purposes
of that clause (on the joint and several basis described in clause 22.1) and so
that if the Best Offer contemplates the acquisition of JV Shares (as opposed to
the Business), the terms of the Best Offer will be taken to be amended so that
Boral Holder 1 will acquire the JVC 1 Shares it does not already own and Boral
Holder 2 will acquire the JVC 2 Shares it does not already own.

 

22.6 Issues of securities

Unless the Shareholders agree otherwise in writing, to the extent this agreement
entitles Boral to subscribe for additional JV Shares (or any other equity
securities issued by the Companies in accordance with this agreement), then
without limiting clause 22.1(b):

 

  (a) Boral Holder 1 must subscribe for any component of the entitlement
comprising JVC 1 Shares (or other JVC 1 securities); and

 

  (b) Boral Holder 2 must subscribe for any component of the entitlement
comprising JVC 2 Shares (or other JVC 2 securities).

 

22.7 Operation limited to this agreement

For the avoidance of doubt nothing in this clause 22 is intended to:

 

  (a) render Boral Holder 1 and Boral Holder 2 jointly and severally liable to
any person in respect of any obligation or liability except as expressly set out
in this agreement; or

 

  (b) limit the operation of clause 19 other than as expressly set out in that
clause.

 

23 Notices

 

 

 

23.1 Form of Notice

A notice or other communication to a party under this agreement (Notice) must
be:

 

  (a) in writing and in English and signed on behalf of the sending party; and

 

  (b) addressed to that party in accordance with the details nominated in
Schedule 13 (or any alternative details nominated to the sending party by
Notice).

 

23.2 How Notice must be given and when Notice is received

 

  (a) A Notice must be given by one of the methods set out in the table below.

 

  (b) A Notice is regarded as given and received at the time set out in the
table below.

However, if this means the Notice would be regarded as given and received
outside the period between 9.00am and 5.00pm (addressee’s time) on a Business
Day (Business Hours Period), then the Notice will instead be regarded as given
and received at the start of the following Business Hours Period.

 

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Method of giving Notice

 

When Notice is regarded as given and received

By hand to the nominated address   When delivered to the nominated address

By a globally recognized courier to the nominated address

 

When confirmed delivered by the courier:

 

1       by 5.00 pm (local time in the place of receipt) on a Business Day – on
that day; or

 

2       after 5.00 pm (local time in the place of receipt) on a Business Day, or
on a day that is not a Business Day – on the next Business Day.

By email to the nominated email address   When the email (including any
attachment) comes to the attention of the recipient party or a person acting on
its behalf.

 

23.3 Notice must not be given by electronic communication

A Notice must not be given by electronic means of communication (other than
email as permitted in clause 23.2).

 

24 General

 

 

24.1 Costs and expenses

 

  (a) Each of USG, USG Guarantor, Boral and Boral Guarantor must pay its own
costs (including legal costs) and expenses in connection with the negotiation,
preparation, execution and delivery of this agreement. Boral Guarantor must pay
the costs (including legal costs) and expenses in connection with the
negotiation, preparation, execution and delivery of this agreement that are
incurred by either of the Companies (or their Subsidiaries or any other entity
in which the Companies have an interest).

 

  (b) For the avoidance of doubt the JV Group is responsible for its own costs
and expenses in respect of the performance of any JV Group Member’s obligations
under this agreement (or any Transaction Document) moving forward other than the
transaction costs contemplated above.

 

24.2 Entire agreement

This agreement (with the Constitutions) states all the express terms agreed by
the parties in respect of its subject matter. It supersedes all prior
discussions, negotiations, understandings and agreements in respect of its
subject matter.

 

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24.3 Assignment of rights

Except as expressly contemplated by any Adherence Deed rights arising out of or
under this agreement are not assignable by a party without the prior written
consent of the other parties except as expressly permitted by this agreement.

 

24.4 Governing law and jurisdiction

 

  (a) This agreement is governed by the laws in force in New South Wales.

 

  (b) Each party irrevocably submits to the (non-exclusive, as between the two)
jurisdiction of:

 

  (1) courts exercising jurisdiction in New South Wales, Australia and courts of
appeal from them; and

 

  (2) courts exercising jurisdiction in Illinois, United States of America, and
courts of appeal from them,

in relation to any proceedings arising out of or in connection with this
agreement, and no party submits to the jurisdiction of any other courts in
relation to any such proceedings.

 

24.5 Service of process

Without preventing any other mode of service, any document in an action
(including without limitation, any writ of summons or other originating process
or any third or other party notice) may be served on any party by being
delivered to or left for that party at its address for service of notices under
clause 22.

 

24.6 Waivers

 

  (a) No party to this agreement may rely on the words or conduct of any other
party as a waiver of any right unless the waiver is in writing and signed by the
party granting the waiver.

 

  (b) In this clause 24.6:

 

  (1) conduct includes delay in the exercise of a right;

 

  (2) right means any right arising under or in connection with this agreement
and includes the right to rely on this clause.

 

  (3) waiver includes an election between rights and remedies, and conduct which
might otherwise give rise to an estoppel.

 

24.7 Variation

A variation of any term of this agreement must be writing and signed by the
parties.

 

24.8 Counterparts

This agreement may be executed in any number of counterparts that together will
constitute one instrument. A party may execute this agreement by signing any
counterpart.

 

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24.9 Further assurances

Each party must do all things and execute all further documents necessary to
give full effect to this agreement and their obligations under it.

 

24.10 Prohibition and enforceability

 

  (a) Any provision of, or the application of any provision of, this agreement
or any right, power, authority, discretion or remedy conferred by this agreement
that is prohibited in any jurisdiction is, in that jurisdiction, ineffective
only to the extent of that prohibition.

 

  (b) Any provision of, or the application of any provision of, this agreement
that is void, illegal or unenforceable in any jurisdiction does not affect the
validity, legality or enforceability of that provision in any other jurisdiction
or of the remaining provisions in that or any other jurisdiction.

 

24.11 Relationship of parties

 

  (a) Nothing in this agreement gives a party authority to bind any other party
in any way, except as expressly stated in this agreement.

 

  (b) Nothing in this agreement imposes any fiduciary duties on a party in
relation to any other party or is to be construed as constituting a partnership
between the parties, except as expressly stated in this agreement.

 

  (c) The rights, duties, obligations and liabilities of Boral and USG arising
out of this agreement are several in proportion to their Shareholding Percentage
and are neither joint nor joint and several.

 

24.12 Exercise of rights

 

  (a) Unless expressly required by the terms of this agreement, a party is not
required to act reasonably in giving or withholding any consent or approval or
exercising any other right, power, authority, discretion or remedy, under or in
connection with this agreement.

 

  (b) A party may (without any requirement to act reasonably) impose conditions
on the grant by it of any consent or approval, or any waiver of any right,
power, authority, discretion or remedy, under or in connection with this
agreement. Any conditions must be complied with by the party relying on the
consent, approval or waiver.

 

24.13 Remedies cumulative

Except as provided in this agreement and permitted by law, the rights, powers
and remedies provided in this agreement are cumulative with and not exclusive to
the rights, powers or remedies provided by law independently of this agreement.

 

24.14 Survival of clauses

Clauses 9, 10, 16, 18, 20, 22, 23 and 24 and each indemnity in this agreement,
survive termination of this agreement.

 

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Schedules

Table of contents

 

 

Definitions and interpretation

     85   

Director Appointment Forms

     100   

Board and Shareholder meeting schedule

     102   

Board Fundamental Matters

     103   

Major Fundamental Matters

     105   

Minor Fundamental Matters

     107   

Expert valuation procedures

     109   

High Risk Jurisdictions

     110   

Committee charters

     116   

Third party arrangements

     121   

Loan Terms

     122   

Adherence Deed

     133   

Notice details

     141   

 

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Schedule 1

Definitions and interpretation

 

 

1 Definitions

 

The meanings of the terms used in this document are set out below.

 

Term

  

Meaning

Acceptance Period    is defined in clause 12.5(a).

Adjacent Intellectual

Property Option

   has the meaning provided in the USG Umbrella Intellectual Property
Agreements. Adherence Deed    a deed substantially in the form of Schedule 12.
Affiliate   

in relation to a party:

 

1       a Related Corporation of the party;

 

2       an entity the party Controls;

 

3       an entity that Controls the party (other than a Parent); and

 

4       an entity that is Controlled by an entity that Controls the party, but
so that no JV Group Member will be regarded as an Affiliate of a Boral Group
Member or a USG Group Member (and vice versa).

Anti-Corruption Law    the United States Foreign Corrupt Practices Act 1977, the
United Kingdom Bribery Act 2010, the Malaysian Anti-Corruption Commission Act
2009 and the Australian Criminal Code Amendment (Bribery of Foreign Public
Officials) Act 1999 (Cth) (in each case, as amended from time to time) and all
other Legal Requirements that prohibit bribery, the provision of or acceptance
of unlawful gratuities, facilitation payments or other benefits to or from any
Government Agency or any other person, as well as any such prohibitions of an
international funding institution. Appointing Parties    is defined in
clause 7.4(a). Best Offer    is defined in clause 7.4(f).

 

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Term

  

Meaning

Board    the board of directors JVC 1 or the board of directors of JVC 2 as the
context requires. Board Fundamental Matters    each matter set out in Schedule
4. Boral    both the Boral Holders on the basis described in clause 22. Boral
Director    a director of JVC 1 or JVC 2 appointed by Boral under clause 5.2.
Boral Group    Boral Guarantor and each Related Corporation of Boral Guarantor
from time to time, not including any member of the JV Group (and Boral Group
Member means any member of the Boral Group). Boral Holders    Boral Holder 1 and
Boral Holder 2. Boral IP Option Matter   

1       any decision by either Company to exercise on any given occasion (and
any exercise of):

 

•   an Adjacent Intellectual Property Option pursuant to either of the USG
Umbrella Intellectual Property Agreements;

 

•   a Breakthrough Intellectual Property Option pursuant to either of the USG
Umbrella Intellectual Property Agreements;

 

•   any right of either Company under clause 13.1 of either of the USG Umbrella
Intellectual Property Agreements to distribute products in the Territory; or

 

•   any right of either Company under clause 3.2(c) of either of the USG
Umbrella Intellectual Property Agreements to terminate a USG Contributed
Intellectual Property Licence Agreement; and

 

2       the negotiation of the royalty and other relevant terms of the resulting
arrangements with the relevant USG Group Member in accordance with and subject
to the terms of the USG Umbrella Intellectual Property Agreements.

Boral Respondent    Boral, its Parent and Affiliates

Boral Umbrella

Intellectual Property

Licence Agreements

  

the Umbrella Intellectual Property Licence Agreements dated on or about the date
of this agreement between (respectively):

 

1       Boral Limited, Boral Holder 1 and JVC 1; and

 

2       Boral Limited, Boral Holder 2 and JVC 2.

 

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Term

  

Meaning

Breakthrough Intellectual Property Option    has the meaning provided in the USG
Umbrella Intellectual Property Agreements. Budget    the budget, comprising
separate revenue and capital budgets, for the JV Group (or any part of it, as
the context requires) in respect of a Financial Year or a calendar year (as
relevant). Business    is defined in clause 1.2(a). Business Day    a day (not
being a Saturday, Sunday or public holiday in the relevant jurisdiction) on
which trading banks are open for business in Sydney, Australia, Singapore and
Chicago, USA. Call Option    is defined in clause 14.1(a). Call Right    is
defined in clause 7.5(b). Catch-Up Period    Is defined in clause 8.10(b).
Control    has the meaning given in s50AA of the Corporations Act. Chair    the
chairperson of both Boards for the time being. Change of Control    has the
meaning given to that term in clause 13.2. Code    the United States Internal
Revenue Code of 1986, as amended. Companies    JVC 1 and JVC 2 and Company means
either of them as the context requires. Company Claim   

a claim of a Company or any other JV Group Member against a Respondent:

 

1       for breach of any agreement between the JV Group Member and the
Respondent; or

 

2       to enforce a right against the Respondent in relation to a liability,
loss, cost, charge or expense paid, suffered or incurred by any JV Group Member
from an act or omission of the Respondent.

 

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Term

  

Meaning

Consents

  

in relation to any sale and purchase of JV Shares to which clause 15 applies,
approvals and other consents identified by the relevant Transferee Shareholder
that are required from any Government Agency or any third party so that the sale
and purchase of the relevant JV Shares:

 

1       does not involve a breach by any JV Group Member, the purchasing
Shareholder or any of the purchasing Shareholder’s Related Corporations (each a
Relevant Person) of any law or a condition of a material licence held by the
Relevant Person; and

 

2       does not breach a term of any material contract or agreement to which a
Relevant Person is party, cause a default under any such material contract or
agreement or allow any counterparty to any such material contract or agreement
(other than a Relevant Person) to terminate or to impose or require the adoption
of terms that are less favourable to the Relevant Person than the current terms.

Constitution   

1       in relation to JVC 1, the Memorandum and Articles of Association of JVC
1; and

 

2       in relation to JVC 2, the Constitution of JVC 2.

Corporations Act    the Corporations Act 2001 (Cth). Deadlock    is defined in
clause 7.1. Deadlock Notice    is defined in clause 7.2(a). Decision Period   
is defined in clause 12.8(a). Default Notice    is defined in clause 14.2(a).
Defaulting Shareholder    is defined in clause 14.1(a). Determining Expert    is
defined in clause 14.3(b).

 

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Term

  

Meaning

Dispose   

in relation to JV Shares includes to:

 

1       sell, transfer, assign, gift, create a trust or option over, or
otherwise deal in any legal or beneficial interest in;

 

2       alienate the right to exercise the vote attached to;

 

3       grant a Security Interest over or any right to acquire;

 

4       decrease any economic interest in; or

 

5       agree to do any of the above in relation to,

 

any JVC 1 Share or JVC 2 Share.

Disputed Matter    is defined in clause 7.2(a). Divestment Notice    is defined
in clause 10.4(b). Dividend    Includes a dividend, bonus or other distribution
in kind or cash Employee Benefit Plans    benefit plans offered in any
jurisdiction to employees, directors, officers, consultants or independent
contractors of a JV Group Member, including severance, separation, salary
continuation, supplemental pension, bonus, incentive, profit participation,
share option, phantom share, share purchase, share appreciation right, deferred
compensation, retirement, profit sharing, leave of absence, layoff, day or
dependent care, legal services, life, health, accident, disability, workers’
compensation, supplemental unemployment, change in control or retention plans,
policies, practices, programs, funds or arrangements of any kind. Eligible Boral
Director    is defined in clause 6.4(a)(1) Eligible USG Director    Is defined
in clause 6.4(a)(2) Event of Default    any event specified in clause 13.1.
Execution Notice    is defined in clause 7.5(a). Exercising Shareholder    Is
defined in clause 7.5(d) Fair Market Value    in relation to a parcel of JV
Shares, their value assessed in accordance with the principles set out in
Schedule 7. Final Certificate    is defined in clause 14.3(c). Financial Year   
the financial year of the JV Group, being each 12 month period commencing 1 July
and ending on the subsequent 30 June (unless varied by Unanimous Resolution of
Shareholders in accordance with this agreement).

 

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Term

  

Meaning

First Adjourned Board

Meeting

   is defined in clause 6.1(c) First Response Period    is defined in
clause 7.5(a). Floor Price    is defined in clause 12.2(a). Fundamental Matters
   the Major Fundamental Matters and the Minor Fundamental Matters. Government
Agency    any government or any governmental, semi-governmental, administrative,
fiscal or judicial body, department, commission, authority, tribunal, agency or
similar entity having powers or jurisdiction under any law or regulation or the
listing rules of any recognised stock or securities exchange in any part of the
world. Government Official   

any officer, representative, employee of or person acting in an official
capacity for:

 

1       any Government Agency;

 

2       public international organisation or monetary fund;

 

3       any government-owned or government-controlled corporation; or

 

4       any political party, party official or candidate for public office

Guarantor    Boral Guarantor or USG Guarantor, as the context requires.

High Risk

Jurisdictions

   the jurisdictions in which it has been determined that use of any JV IP
licensed pursuant to an IP Licence Agreement poses a high risk to the integrity,
value or enforceability of such licensed JV IP, including as a result of
misappropriation, as listed in Part 1 of Schedule 8, as amended from time to
time in accordance with clause 9.3(b). High Risk Procedures    the procedures
that are to be implemented and maintained in the High Risk Jurisdictions, as
listed in Part 2 of Schedule 8, as amended from time to time in accordance with
clause 9.3(c).

 

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Term

  

Meaning

IFRS    International Financial Reporting Standards, as issued by the
International Accounting Standards Board.

Immediately Available

Funds

  

1       cash;

 

2       bank cheque; or

 

3       telegraphic or other electronic means of transfer of cleared funds into
a bank account nominated in advance by the payee.

Initial Expert    is defined in clause 14.2(c).

Initial Expert’s

Certificate

   is defined in clause 14.2(d). Insolvency Event    is defined in clause 13.3.

Intellectual Property

Rights

   has the meaning provided in the USG Umbrella Intellectual Property
Agreements. IP Licence Agreements   

1       the USG Umbrella Intellectual Property Agreements and each agreement
contemplated by the schedules to those agreements; and

 

2       the Boral Umbrella Intellectual Property Agreements and each agreement
contemplated by the schedules to those agreements.

JV Enterprise    is defined in clause 7.4(c). JV Group    each of JVC 1, JVC 2
and their respective Subsidiaries from time to time (and JV Group Member means
any member of the JV Group). JV IP    all Intellectual Property Rights owed by,
or licensed to, any member of the JV Group from time to time (including all
Intellectual Property Rights licensed under the IP Licence Agreements). JV Share
   a security in the JV Group, being one JVC 1 Share and one JVC 2 Share that
are Stapled to each other. JVC 1 Board    the board of directors of JVC 1

 

Shareholders agreement    page 91

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Term

  

Meaning

JVC 1 Percentage    in relation to a Shareholder at any time, the number of JVC
1 Shares held by the Shareholder expressed as a percentage of the total number
of JVC 1 Shares on issue at the relevant time. JVC 1 Share    an ordinary share
in the capital of JVC 1. JVC 2 Board    the board of directors of JVC 2 JVC 2
Percentage    in relation to a Shareholder at any time, the number of JVC 2
Shares held by the Shareholder expressed as a percentage of the total number of
JVC 2 Shares on issue at the relevant time. JVC 2 Share    an ordinary share in
the capital of JVC 2. Last Right    is defined in clause 12.7(b). Legal
Requirement    any international, national, federal, state, local, municipal,
foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, order, edict, decree, rule, regulation, treaty,
ruling or requirement issued, enacted, adopted, implemented or otherwise put
into effect by, or under the authority of, any Government Agency or any public
international organisation in any jurisdiction. Loan Terms    the terms set out
in Schedule 11. Marketing Period    is defined in clause 12.7(a). Major
Fundamental Matters    each matter set out in Schedule 5. Major Shareholder   
each Shareholder whose Shareholding Percentage is 37.5% or more at the relevant
time. Minor Fundamental Matters    each matter set out in Schedule 6. Minor
Shareholder    each Shareholder whose Shareholding Percentage is 12.5% or higher
but less than 37.5% at the relevant time.

 

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Term

 

Meaning

Non-Defaulting Shareholder   is defined in clause 14.1(a). Non-Withdrawing
Shareholder   is defined in clause 7.6(a). Notice   is defined in clause 23.1.
Notice of Sale   is defined in clause 12.2(a). Offer Notice   is defined in
clause 12.3. Parent   1   in the case of Boral or any other Boral Group Member,
Boral Guarantor; and   2   in the case of USG or any other USG Group Member, USG
Guarantor. Products   products for wall, ceiling, floor lining and exterior
systems that utilise gypsum, plasterboard, mineral fibre ceiling tiles, mineral
wool, steel grid, studs and track, plastic beads, cement board, gypsum
fibreboard, fibre cement, joint compound, jointing tapes, plaster and other
materials (such as geopolymer or other pozzolanic materials) and ancillary
products and related tools. Recipient   is defined in clause 12.2(a). Records  
all books, records, accounts, reports, correspondence, files and other documents
and information or data (whether in printed, electronic or other form) in the
possession of a JV Group Member relating to the Business or the businesses,
assets or affairs of that JV Group Member or its clients, including any
statutory books and registers, minute books, books of account, trading and
financial records, employee records, tax returns and related correspondence and
customer lists, supplier lists, price lists, pricing models and sales and
marketing materials. Related Corporation   in relation to an entity, each body
corporate:   1   that is a Subsidiary of that entity;   2   of which the entity
is a Subsidiary (other than, where the relevant entity is a Boral Group Member
or a USG Group Member, a Parent); or   3   that is a Subsidiary of a company of
which the entity is also a Subsidiary.

 

Shareholders agreement    page 93

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Term

 

Meaning

  but so that no JV Group Member will be regarded as a Related Corporation of a
Boral Group Member or a USG Group Member (and vice versa). Relevant Affiliate  
in relation to a Shareholder:   1   that Shareholder’s Parent;   2   any Related
Corporation of the Shareholder’s Parent that Controls the Shareholder; and   3  
any Related Corporation of the Shareholder’s Parent that is a party to an IP
Licence Agreement,   but not including for the avoidance of doubt any JV Group
Member. Representative   in relation to any entity, a director, officer, agent,
consultant employee or contractor of that entity. Respondent   a USG Respondent
or a Boral Respondent. Response Period   is defined in clause 12.3. Relevant
Person   is defined in clause 13.3. Restricted Business   is defined in
clause 10.2. Restricted Employee   is defined in clause 10.2. Restricted Period
  is defined in clause 10.2. Restricted Persons   is defined in clause 10.2.
Restricted Territory   is defined in clause 10.2. Sale Agent   is defined in
clause 7.4(a). Sale Business   is defined in clause 10.4(b).

 

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Term

 

Meaning

Sale Notice   is defined in clause 7.3. Sale Shares   is defined in
clause 12.2(a). Sale Terms  

is defined in clause 12.2(a).

Sale Terms Notice   is defined in clause 12.4(c). Second Adjourned Board Meeting
  is defined in clause 6.1(d). Second Notice of Sale   is defined in
clause 12.7(b). Second Response Period   is defined in clause 7.5(b). Securities
  shares, debentures, convertible notes, or other instruments convertible into
shares or debentures, options or other equity or debt securities. Security
Interest   any legal or equitable interest or power:   1   reserved in or over
an asset (or any interest in any asset) including, but not limited to, any
retention of title; or   2   created or otherwise arising in or over any
interest in any asset under a bill of sale, mortgage, charge, lien, pledge,
trust or power,   by way of security for the payment of a debt or any other
monetary obligation or the performance of any other obligation and includes:   3
  any agreement to grant or create any of the above; and   4   a security
interest within the meaning of section 12(1) of the Personal Property Securities
Act 2009 (Cth). Seller   is defined in clause 12.2(a). Shareholder   Boral or
USG. Shareholder Group   the Boral Group or the USG Group. Shareholding
Percentage   in relation to a Shareholder at any time, the mean average of its
JVC 1 Percentage and its JVC 2 Percentage at the relevant time (and so that each
Shareholder’s Shareholding Percentage at the date of this agreement is 50%).

 

Shareholders agreement    page 95

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Term

 

Meaning

Singapore Nominee   a director appointed to the JVC 1 Board under clause 5.1(b).
Standstill Period   is defined in clause 11.1(a). Stapled   the linking together
of a JVC 1 Share and a JVC 2 Share in accordance with clause 19. Strategic Plan
  the strategic plan of the JV Group (or any part of it, as the context
requires) as approved by the Boards under clause 8.1. Subsidiary   has the
meaning given in the Corporations Act. Super Resolution  

in relation to a Board resolution, a resolution of the relevant Board passed as
a Super Resolution in accordance with clause 6.5(b) or clause 6.6(b).

Support Commitments   in relation to any person, any guarantees or similar
surety or credit support arrangements given by that person in relation to the
obligations of any JV Group Member as contemplated by clause 8.11. Tag Right  
the right referred to in clause 12.4(c) or clause 12.7(b), as the context
requires. Territory   is defined in clause 1.3. Third Party Buyer   has the
meaning given in clause 12.4(a) or 12.7(b), as the context requires.

 

Shareholders agreement    page 96

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Term

  

Meaning

Third Party IP

   has the meaning provided in clause 18.7.

Transaction Documents

  

1       this agreement;

 

2       the IP Licence Agreements;

 

3       the Transitional and Ongoing Services Agreements entered into on or
about the date of this agreement between the Companies and (respectively)
certain USG Group Members and certain Boral Group Members.

Unanimous Resolution

  

in relation to a resolution of Shareholders:

 

1       in the case of a Major Fundamental Matter, a resolution of Shareholders
that has been approved by each Major Shareholder in accordance with:

 

•    clauses 6.7(e) and 6.7(f); or

 

•    clause 6.7(g); and

 

2       in the case of Minor Fundamental Matters, a resolution of Shareholders
that has been approved by each Major Shareholder and each Minor Shareholder (if
any) in accordance with a;

 

•    clauses 6.7(e) and 6.7(f); or

 

•    clause 6.7(g).

USG Director

   a director of JVC 1 or JVC 2 appointed by USG under clause 5.2.

USG Group

   USG Guarantor and each Related Corporation of USG Guarantor from time to
time, not including any member of the JV Group (and USG Group Member means a
member of the USG Group).

USG IP Option Matter

  

1       any decision by either Company to exercise on any given occasion (and
any exercise of) a Breakthrough Intellectual Property Option pursuant to either
of the Boral Umbrella Intellectual Property Agreements; and

 

2       the negotiation of the royalty and other relevant terms of the resulting
arrangements with the relevant Boral Group Member in accordance with and subject
to the terms of the Boral Umbrella Intellectual Property Agreements.

USG Respondent

   USG, its Parent or Affiliates.

 

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Term

  

Meaning

USG Umbrella Intellectual Property Agreements   

the Umbrella Intellectual Property Licence Agreements dated on or about the date
of this agreement between (respectively):

 

1       USG Corporation, USG Netherlands Global Holding BV and JVC 1; and

 

2       USG Corporation, USG Foreign Investment Ltd and JVC 2.

Valid Funding Notice    is defined in clause 8.9(c). Withdrawing Shareholder   
is defined in clause 7.6(a)(5). Wholly Owned Related Corporation    has the
meaning given to the term related body corporate in the Corporations Act but on
the basis that subsidiary means (including in the definition of holding company
in the Corporations Act) Wholly Owned Subsidiary. Wholly Owned Subsidiary    in
relation to an entity, a wholly-owned subsidiary of that entity as defined in
section 9 of the Corporations Act.

 

2 Interpretation

 

 

In this agreement:

 

  (a) Headings, bold type and the entirety of clause 2 of this agreement are for
convenience only and do not affect the interpretation of this agreement.

 

  (b) The singular includes the plural and the plural includes the singular.

 

  (c) Words of any gender include all genders.

 

  (d) Other parts of speech and grammatical forms of a word or phrase defined in
this agreement have a corresponding meaning.

 

  (e) An expression importing a person includes any company, partnership, joint
venture, association, trust, corporation or other body corporate and any
Government Agency as well as an individual.

 

  (f) A reference to a clause, party, schedule, attachment or exhibit is a
reference to a clause of, and a party, schedule, attachment or exhibit to, this
agreement and a reference to this agreement includes any schedule, attachment or
exhibit.

 

  (g) A reference to any legislation includes all delegated legislation made
under it and amendments, consolidations, replacements or re-enactments of any of
them.

 

  (h) A reference to a document includes all amendments or supplements to, or
replacements or novations of, that document.

 

  (i) A reference to a party to a document includes that party’s successors and
permitted assignees.

 

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  (j) A reference to an agreement other than this agreement includes a deed and
any legally enforceable undertaking, agreement, arrangement or understanding,
whether or not in writing.

 

  (k) No provision of this agreement will be construed adversely to a party
because that party was responsible for the preparation of this agreement or that
provision.

 

  (l) A reference to a body, other than a party to this agreement (including an
institute, association or authority), whether statutory or not:

 

  (1) which ceases to exist; or

 

  (2) whose powers or functions are transferred to another body,

is a reference to the body which replaces it or which substantially succeeds to
its powers or functions.

 

  (m) A reference to $ is to US Dollars.

 

Shareholders agreement    page 99

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Schedule 2

Director Appointment Forms

 

PART 1 (SHAREHOLDER NOTICE)

Notice of appointment of a director pursuant to Clause 5.2(a) of Shareholders
Agreement

 

To: [USG Boral Building Products Pty Limited (ACN 004 231 976/USG Boral Building
Products Pte Limited] (Company)

 

From: [Insert Shareholder] (Shareholder)

This letter constitutes notice pursuant to clause 5.2(a) of the Shareholders
Agreement between Boral Limited, USG Corporation, the Shareholder, the Company
et al of the appointment by the Shareholder of [insert individual’s full name]
as a director of the Company (Director).

The Director [is/is not] appointed as the Shareholder’s Singapore Nominee (as
that term is defined in clause 5.1(b) of the Shareholders Agreement).

Date:

Signature:                                         

 

Shareholders agreement    page 100

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PART 2 (CONSENT TO ACT)

Consent to Act as Director

I, [insert full name], consent to act as a director of [USG Boral Building
Products Pty Limited (ACN 004 231 976/USG Boral Building Products Pte Limited]
(Company) and provide the following information:

 

FULL NAME:   FORMER NAMES:   RESIDENTIAL ADDRESS:   DATE OF BIRTH:   PLACE OF
BIRTH:   DATED:  
________________________________________________________________ SIGNED:  
________________________________________________________________

 

Shareholders agreement    page 101

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Schedule 3

Board and Shareholder meeting schedule

 

 

2014 Calendar

  

Proposed Location

  

Status

  

Key Topics

1)      Tuesday 28 January

   KL    Committed   

•   Governance

•   Use of Committee Structure

•   2Q results

•   Capital Plan and Approval of key 2014 – 2015 projects

•   Integration Plan

2)      Tuesday 11 March

   Sydney    Committed   

•   3Q Guidance / Annual Strategic Planning / Integration Update

3)      Wednesday 30 April

   Hong Kong    Committed   

•   3Q Results / 2015 FY Budget Approval / Integration Update / Director
Education plant visit

4)      Monday 21 July

   Chicago or Los Angeles    Committed   

•   2014 FY Early Results / 2015 FY Plan / HR Succession Planning

5)      Thursday 2 October

   KL    Committed   

•   2014 FY Final Results / Integration Update

6)      Tuesday 18 November

   Hong Kong    Committed   

•   Capital Plan and Approval of key 2015-2015 projects

•   1Q Results / Integration Update

 

Shareholders agreement    page 102

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Schedule 4

Board Fundamental Matters

 

 

(a) Strategic Plan and Budget: approval of the Strategic Plan and Budget and any
material changes to or departures from the Strategic Plan or Budget (except, for
the avoidance of doubt, to the extent the Strategic Plan or Budget involves a
Fundamental Matter).

 

(b) Financial accommodation: any JV Group Member entering into external
borrowings or other financial accommodation (other than drawdowns under working
capital facilities in effect as at the date of this agreement) in excess of US$3
million

 

(c) Financial policies: the establishment of (or any material changes to) the
financial policies of the JV Group in relation to:

 

  (1) application of cash flow; and

 

  (2) hedging.

 

(d) Mergers: the merger or amalgamation of any member of the JV Group with any
other member of the JV Group) or any consolidation, restructuring or other
reorganisation of the JV Group which occurs solely within the JV Group.

 

(e) Guarantees: any JV Group Member entering into or becoming liable under any
guarantee or similar arrangement under which the relevant entity might incur
liability in respect of the financial obligation of any other JV Group Member.
This does not apply to performance guarantees in the ordinary course of
business.

 

(f) Security Interests: the creation of any Security Interest over assets of any
JV Group Member in favour of any other JV Group Member, other than in the
ordinary course of the business of the JV Group.

 

(g) Provision of loans: the provision of any loan or financial accommodation by
any JV Group Member to any person (other than another JV Group Member).

 

(h) Material contracts: any JV Group Member entering into, materially varying,
or terminating any agreement or arrangement involving:

 

  (1) transactions that are not on bona fide arms’ length terms or otherwise
outside the ordinary course of business;

 

  (2) any non-compete undertakings, exclusivity provisions or similar
restrictive covenants; or

 

  (3) any JV Group Member assuming any ‘take or pay’ or similar obligations
exceeding US$1 million in aggregate,

or otherwise effecting any material, non-ordinary course business transaction or
actions, except in each case as set forth in the then most recent Strategic Plan
or Budget.

 

(i) Ordinary course business contracts: subject to paragraph (h), any JV Group
Member entering into, materially varying, or terminating any agreement or
arrangement involving consideration to or from the JV Group of more than:

 

  (1) US$10 million, in the case of customer or supplier agreements; or

 

  (2) US$5 million in any other case;

 

Shareholders agreement    page 103

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(j) Assets: the sale, transfer, lease, assignment, disposal or acquisition of
assets in any transaction or series of related transactions by any JV Group
Member or any agreement to do so where the market value of such assets or the
consideration in respect of the sale or acquisition of such assets is in excess
of US$2 million (except, for the avoidance of doubt, to the extent the relevant
transaction involves a Fundamental Matter), but excluding the sale or purchase
of inventory, raw material materials, finished product and similar items in the
ordinary course of the business.

 

(k) Derivatives: any JV Group Member purchasing or entering into foreign
currency swaps or other derivative instruments other than hedges entered into in
accordance with a hedging policy approved under (c) above.

 

(l) Dividends: the declaration or payment of any Dividend by either Company.

 

(m) Accounting policies: any significant change in accounting policies or
practices of the JV Group.

 

(n) Litigation: the commencement or settlement by any JV Group Member of any
litigation, arbitration or other proceedings other than a Company Claim, which
will cause, or is likely to cause, the JV Group to incur liabilities, losses,
damages, costs or expenses (including legal costs) in excess of US$2 million.

 

(o) Chief executive officer: the appointment (including the terms of
appointment), or (subject to clauses 5.7(d) and 5.7(e)) termination of the
appointment, of the chief executive officer of the JV Group, or any variation in
his or her remuneration or terms of appointment.

 

(p) Chief financial officer: the appointment (including the terms of
appointment), or (subject to clauses 5.7(d) and 5.7(e)) termination of the
appointment, of the chief financial officer of the JV Group, or any variation in
his or her remuneration or terms of appointment.

 

(q) Employee Benefit Plans: creating any Employee Benefit Plans, amending any
existing Employee Benefit Plans or granting or approving any benefits to
employees, independent contractors or consultants of the JV Group other than in
accordance with the Employee Benefit Plans.

 

(r) Directors of subsidiaries: the appointment or removal of any director of any
Subsidiary of either of the Companies, or of any other body corporate or entity
(including any joint venture entity) in relation to which any member of the JV
Group has the power to appoint or remove a director.

 

Shareholders agreement    page 104

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Schedule 5

Major Fundamental Matters

 

 

(a) New issues: the issue of Securities of any JV Group Member to the extent not
a Minor Fundamental Matter.

 

(b) Capital Calls: any call for capital from Shareholders (as contemplated by
clause 8.9), other than pursuant to clause 8.9(h).

 

(c) Debt to equity ratio: the establishment of (or any material changes to) the
JV Group’s financial policy in relation to its debt to equity ratio.

 

(d) Change to business: any of the following:

 

  (1) the acquisition by a JV Group Member of any business or of shares or other
equity securities in any entity (other than another JV Group Member);

 

  (2) the disposal by a JV Group Member of any business or of shares or other
equity securities in any entity;

 

  (3) establishment by any JV Group Member of any new Subsidiary, branch or
representative office; or

 

  (4) entry by a JV Group Member into a partnership, joint venture or profit or
revenue sharing arrangement with any entity.

 

(e) Mergers: the merger or amalgamation of any member of the JV Group (other
than the Companies) with any other entity (other than another member of the JV
Group) or any consolidation, restructuring or other reorganisation of the JV
Group (other than the Companies and other than solely within the JV Group).

 

(f) Guarantees: any JV Group Member entering into or becoming liable under any
guarantee or similar arrangement under which the relevant entity might incur
liability in respect of the financial obligation of any other person (other than
another JV Group Member).

 

(g) Security Interests: the creation of any Security Interest over assets of any
JV Group Member in favour of any person, other than another JV Group Member,
other than in the ordinary course of the business of the JV Group.

 

(h) IP disposal: any JV Group Member:

 

  (1) granting a licence or sublicence in respect of, or transferring,
conveying, pledging or otherwise encumbering or disposing (or agreeing to do any
of the preceding things in respect of), any JV IP to any other person (other
than another JV Group Member); or

 

  (2) sharing any JV Confidential Information with, or disclosing any JV
Confidential Information to, any other person (other than another JV Group
Member),

except (in each case) as expressly contemplated by this agreement or as
permitted by any other Transaction Document (provided that, for the avoidance of
doubt, nothing in this paragraph (h) gives any JV Group Member a right in
respect to JV IP that is licensed to it pursuant to an IP Licence Agreement,
which is not expressly granted in that IP Licence Agreement).

 

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(i) Assets: the sale, transfer, lease, assignment, disposal or acquisition of
assets in any transaction or series of related transactions by any JV Group
Member or any agreement to do so where the market value of such assets or the
consideration in respect of the sale or acquisition of such assets is in excess
of US$25 million, but excluding the sale or purchase of inventory, raw material
materials, finished product and similar items in the ordinary course of the
business.

 

(j) Brand and Trade Mark Strategy: the brand and trade mark strategy developed
and implemented by the JV Group and any changes to this strategy.

 

(k) Financial Year: any change to the Financial Year.

 

(l) Auditor: the removal of either Company’s auditor and the appointment of any
replacement.

 

Shareholders agreement    page 106

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Schedule 6

Minor Fundamental Matters

 

 

(a) New issues: the issue of:

 

  (1) Securities of any JV Group Member (including for the avoidance of doubt JV
Shares), except:

 

  (A) to another JV Group Member; or

 

  (B) pursuant to a Valid Funding Notice issued in accordance with clause 8.9;
or

 

  (2) voting securities of JVC 1 or JVC 2 other than JVC 1 Shares or JVC 2
Shares.

 

(b) Variation of rights: any variation to the rights attaching to or the class
of any Securities or the redemption, buy-back or cancellation of any issued
Securities.

 

(c) Change to business: any of the following:

 

  (1) any cessation of, or any material change in, the Business;

 

  (2) entry by any JV Group Member into any new business, including the
establishment of business in any jurisdiction in which the JV Group does not
have existing operations as at the date of this agreement;

 

(d) Mergers: the merger or amalgamation of either Company with any other entity
or any consolidation, restructuring or other reorganisation of the capital of
either Company.

 

(e) Dividends: any change to or departure from the Dividend policy specified in
clause 8.7 and the determining or declaring or paying any Dividends on the JV
Shares other than in proportion to all Shareholders’ Shareholding Percentage.

 

(f) IP protection:

 

  (1) use of any JV IP licensed pursuant to an IP Licence Agreement, except in
each case as expressly provided in the relevant IP Licence Agreement;

 

  (2) approval for the purposes of clause 9.2 of protection measures and
safeguards in relation to the use of JV IP in High Risk Jurisdictions; or

 

  (3) any changes to the list of High Risk Jurisdictions in Schedule 8.

 

(g) Related party agreements: except for the entry into the Transaction
Documents (and any documents or agreements required to be entered into pursuant
to the terms of any Transaction Document), and except for conduct falling within
clause 6.10, any JV Group Member entering into or varying any contract,
agreement or arrangement (whether oral or in writing) with a Shareholder or a
Parent or an Affiliate of a Shareholder (or their respective officers, directors
or employees) (Related Party Arrangements), except where each of the following
is satisfied:

 

  (1) the Related Party Arrangement relates to the ad hoc provision of
assistance or services to a JV Group Member by a Shareholder or a Parent or an
Affiliate of a Shareholder;

 

Shareholders agreement    page 107

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  (2) the Related Party Arrangement has been approved by the chief executive
officer and the chief financial officer of the JV Group; and

 

  (3) the total value of the amount payable (or other consideration to be
provided) by the JV Group in respect of the Related Party Arrangement does not
exceed:

 

  •   US$500,000 for the individual Related Party Arrangement; or

 

  •   US$1 million when taken together with all other Related Party Arrangements
entered into in the same Financial Year with the same Shareholder (or its Parent
or Affiliates).

 

(h) Assets: the sale, transfer, lease, assignment, disposal or acquisition of
assets in any transaction or series of related transactions by any JV Group
Member or any agreement to do so where the market value of such assets or the
consideration in respect of the sale or acquisition of such assets is in excess
of US$100 million, but excluding the sale or purchase of inventory, raw material
materials, finished product and similar items in the ordinary course of the
business.

 

(i) Winding up: the making of an application or the commencement of any
proceedings or the taking of any other steps for the winding up, dissolution, or
appointment of an administrator of any JV Group Member or the entering into by
any JV Group Member of an arrangement, compromise or composition with or
assignment for the benefit of its creditors, a class of them or any of them;

 

(j) Constituent documents: any amendment to either of the Constitutions.

 

(k) Special resolutions: any matter which any applicable law requires to be
approved or authorised by:

 

  (1) special resolution of the shareholders of JVC 1 (within the meaning of the
Singapore Companies Act) or of JVC 2 (within the meaning of the Corporations
Act) (or both); or

 

  (2) any other special majority of the shareholders of JVC 1 or JVC 2 (or both)
in excess of a simple majority, including unanimity.

 

Shareholders agreement    page 108

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Schedule 7

Expert valuation procedures

 

An Initial Expert appointed under clause 14.2(c) or Determining Expert appointed
under clause 14.3(b) must determine the Fair Market Value of the Defaulting
Shareholder’s JV Shares as at the date of service of the relevant Default Notice
under clause 14.2(a) applying the following methodology (but subject always to
clause 14.3(c)(2) in the case of a determination by a Determining Expert):

 

(a) The Expert must first determine the fair market value of all JV Shares on
issue at the relevant time as on an arm’s length sale between a willing but not
anxious seller and a willing but not anxious buyer:

 

  (1) taking into account all the circumstances at that time that the Expert
considers to be relevant to the value of the JV Group and the JV Shares;

 

  (2) employing appropriate valuation methodologies including a discounted cash
flow basis;

 

  (3) on the basis that any loan from a Shareholder is a liability of the JV
Group; and

 

  (4) on the assumption that all JV Shares are capable of being transferred
without restriction.

 

(b) The Fair Market Value of the Defaulting Shareholder’s JV Shares will be:

 

  (1) the Shareholder’s Shareholding Percentage of the total value of all JV
Shares determined under (a) above, without any premium or discount being
attributable to the percentage of the total number of JV Shares that they
represent; less

 

  (2) the gross amount of any Dividends paid (or irrevocably declared with a
record date before the sale of the Defaulting Shareholder’s JV Shares such that
it will remain entitled to receipt of the relevant Dividend) on any of the
Defaulting Shareholder’s JV Shares at any time on or after the date of service
of the relevant Default Notice under clause 14.2(a) is deducted from the
valuation.

 

Shareholders agreement    page 109

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Schedule 8

High Risk Jurisdictions

 

Part 1     List of High Risk Jurisdictions

In determining whether a Jurisdiction is considered a High Risk Jurisdiction for
the purposes of protecting the Intellectual Property licensed to the JV Group
pursuant to the IP Licence Agreements, the Shareholders may consider risk
factors such as geopolitical issues, governmental reports regarding the
enforceability of intellectual property rights, such as the Special 301 Report
prepared annually by the Office of the United States Trade Representative and
the number of enforcement actions brought by a judicial or executive agency.

The High Risk Procedures of Part 2 of Schedule 8 must be implemented in High
Risk Jurisdictions where manufacturing or mining technology is deployed at the
date of signing of the Agreement (marked “High Risk” in Table 1) and in those
Jurisdictions where manufacturing or mining technology is deployed at a future
date (marked in “High Risk” in Table 2) prior to or on the date of such
implementation. In those Jurisdictions where the risk identified in Tables 1 and
2 is “Regular” or where there are no manufacturing or mining assets,
commercially reasonable intellectual property protection measures must be used.

TABLE 1

 

Jurisdictions with

Manufacturing or Mining

Assets

  

Intellectual Property Risk

Category

Australia    Regular China    High Risk India    High Risk Indonesia    High
Risk Malaysia    Regular New Zealand    Regular Oman (in progress)    Regular
South Korea    Regular Thailand    High Risk Vietnam    High Risk

Key to Table 1—IP Risk Categories

High Risk means Jurisdiction requiring implementation of High Risk Procedures
(Part 2, Schedule 8).

Regular means Jurisdiction requiring commercially reasonable intellectual
property protection measures.

 

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TABLE 2

 

Jurisdictions

Currently without

Manufacturing or

Mining Assets

  

Intellectual Property

Risk Category

Afghanistan    High Risk Bangladesh    High Risk Bahrain    High Risk Bhutan   
High Risk Brunei    High Risk Cambodia    High Risk East Timor    High Risk
Egypt    High Risk Hong Kong    High Risk Iraq    High Risk Israel    High Risk
Japan    Regular Jordan    High Risk Kuwait    High Risk Laos    High Risk
Lebanon    High Risk Macau    High Risk Malaysia    Regular Mongolia    High
Risk Myanmar    High Risk Nepal    High Risk Pakistan    High Risk Papua New
Guinea    High Risk Philippines    High Risk Qatar    High Risk Russia    High
Risk Singapore    Regular Sri Lanka    High Risk Taiwan    Regular United Arab
Emirates    High Risk

Key to Table 2—IP Risk Category

High Risk means Jurisdiction requiring commercially reasonable intellectual
property protection measures, unless and until manufacturing or mining
technology is deployed in the country, by which time the High Risk Procedures
must be implemented and the Jurisdiction moved to TABLE 1 (see Part 2 of
Schedule 8).

Regular means Jurisdiction requiring commercially reasonable intellectual
property protection measures.

 

Shareholders agreement    page 111

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Part 2 High Risk Procedures

These principles must be updated from time to time as new best practices arise
or are implemented.

 

I. Physical Access Protections

 

  A. Physical access to the plant is controlled.

 

  1. Access to plant property is limited only to authorized employees, visitors,
vendors contractors and suppliers.

 

  2. All non-employees are required to check in, with a record of time arriving
and departing, and purpose of visit and employee responsible for them.

 

  B. Areas of the plant and property are identified as:

 

  1. Unrestricted – such as parking lots, exterior loading docks and the
reception area of plants.

 

  2. Limited Access – such as general offices, warehouses, bulk raw material
delivery areas, plant operating areas where widely available equipment is used
and where individuals with a business need are permitted access within the
plant.

 

  3. Restricted – such as plant operating areas where confidential information
may be available or found, where trade secret equipment is used or visible, and
offices where financial or HR information may be found.

 

  4. Highly Sensitive – such areas where high value and highly sensitive trade
secrets and other proprietary information can be found or are being researched
and developed, such as product formulations, engineering drawings, IT servers or
other central computer systems.

 

  C. Highly Sensitive areas must be physically secured with locked doors,
cabinets or other physical barriers (walls, curtains or other barriers)
preventing access to unauthorized employees or non-employees. Electronic access
with keycards containing employee identifying information should be implemented
if practicable, and a record kept (for at least one month) of the identity and
time at which each authorized individual accessed the Highly Sensitive area.

 

  D. Non-employees and employees must be authorized for each level of security
for which they have access, and are not permitted access to areas for which they
do not have authorization.

 

  E. No recording devices of any type are permitted in Limited Access areas
without the Plant Manager’s approval, and none at all are permitted in
Restricted or Highly Sensitive areas, without prior written authorization by
Regional Manager or Legal.

 

  F. No mobile telephones are permitted in Restricted or Highly Sensitive areas,
and areas where mobile telephones may be used must be designated in Unrestricted
access areas.

 

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II. Document Protections

 

  A. The Plant Manager must ensure that all documents in the plant are correctly
identified, marked and protected if they contain any Restricted or Highly
Sensitive information.

 

  B. Documents must be marked with copyright notices and confidentiality legends
using the above levels of sensitivity. Documents also must be marked with a “no
copying or distribution without authorization” identifier. Markings should be in
English and the local language.

 

  C. Documents that are Unrestricted and Limited Access may be copied solely to
further a business purpose as determined by a department manager.

 

  D. Restricted and Highly Sensitive documents cannot be disclosed without
permission from the Plant Manager.

 

  E. Hard copies of Restricted and Highly Sensitive documents must be kept in a
locked cabinet or other secure locations.

 

  F. Electronic copies of Restricted and Highly Sensitive documents must be kept
secure using appropriate IT protections as outlined below, which may include
document level encryption.

 

  G. Hard copies of Restricted and Highly Sensitive documents must be shredded
before disposal.

 

  H. Copying facilities must be available in Restricted and Highly Sensitive
areas, to avoid removal of any such documents from those areas. Such copying
facilities must be password locked and usable only with access codes. Records
must be kept of the access code used to enable the copier, so as to determine
who (or under whose authority) the copying was undertaken.

 

III. IT Protections

 

  A. All IT systems must require passwords that are unique to each individual
accessing the systems.

 

  B. Individual computers on which Restricted or Highly Sensitive information is
stored or accessed must have password protection and hard drive encryption as
permitted by local laws.

 

  C. There should be click through warnings and reminders of confidentiality
obligations when employees access systems that contain Restricted or Highly
Sensitive information.

 

  D. Digital rights management solutions, which may include document level
encryption, should be used to protect Restricted or Highly Sensitive
information.

 

  E. When and where practicable, use of real time monitoring systems which can
detect and/or prevent uploading, downloading, emailing or other types of
movement of documents that contain Highly Sensitive information is strongly
recommended.

 

  F. All Highly Sensitive Information maintained on a network should be subject
to a digital rights/document management system, which restricts access to the
document and maintains a record of any employee who accesses that document (and
the time and duration of that access).

 

Shareholders agreement    page 113

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IV. Employee Protections

 

  A. Training. Employees must be trained on the importance of identifying and
protecting intellectual property and methods that can be used. Training on
aspects of the importance of, and methods for, IP protection must be undertaken
twice a year.

 

  B. Non-disclosure agreements. Employees exposed to Restricted or Highly
Sensitive information must execute written non-disclosure agreements
commensurate with their level of exposure and their level of employment.

 

  C. Non-compete agreements. Where legally enforceable and appropriate given
their exposure to Restricted or Highly Sensitive information, management
employees (e.g. plant managers, sales or accounting managers, engineering
managers, etc.) should enter into non-compete agreements preventing or limiting
their employment with a competitor or potential competitor under terms that will
protect the Restricted or Highly Sensitive information, and subject to other
conditions necessary to permit the enforcement of the non-compete agreement.

 

  D. Selective disclosure of information. Employees should only be exposed to
information that they need to know to perform their functions. No one employee
should be allowed access to all Restricted or Highly Sensitive information.

 

V. Third Party Protections

 

  A. The above principles should be used when dealing with third parties, with a
particular emphasis on the following:

 

  B. Non-disclosure agreements. Confidentiality agreements must be used when
disclosing Restricted or Highly Sensitive information. Agreements should contain
restrictions and obligations commensurate with the level and scope of
disclosure.

 

  C. Selective disclosure of information. Third parties should only be exposed
to information that they need to know to perform the tasks for which they are
being engaged. No one party should be allowed access to all Restricted or Highly
Sensitive information about any one system. Should any copies of Restricted or
Highly Sensitive information be shown to a third party, prior written
authorization from the Plant Manager must be obtained. No copies of any Highly
Sensitive Information may be provided to a third party or taken off the premises
without prior written authorization from Legal.

 

  D. Escorting of third party personnel. Even if other protections are in place,
no third party personnel should be allowed access to Restricted or Highly
Sensitive areas or information without escort by an employee who has
authorization to access such areas or information.

 

VI. Reporting and improvements to the protocol

 

  A. Twice annually, the Plant Manager must ensure a review is conducted of the
criteria used to determine if documents contain Restricted or Highly Sensitive
information to confirm that documents with such information are identified by
the criteria.

 

  B. Annually, the Plant Manager must ensure a physical review is conducted of
the plant to ensure that there is no Restricted or Highly Sensitive Information
found or embodied outside Restricted or Highly Sensitive areas.

 

Shareholders agreement    page 114

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  C. Once a year, the Plant Manager must ensure an audit is conducted of access
to, use of and management of Restricted and Highly Sensitive Information, and
provide a report to the Regional Manager outlining the sufficiency of the
existing protections, any breaches of protocol and any proposed improvements to
the protocol.

 

Shareholders agreement    page 115

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Schedule 9

Committee charters

 

Agreed initial charters attached behind this page.

 

Shareholders agreement    page 116

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CHARTER OF THE

FINANCE COMMITTEE

Corporate Authorization and Purpose

The Finance Committee is one of the two standing committees specified under the
Shareholders Agreement to which this charter forms a schedule. Such Committee
shall provide oversight and advice regarding the JV Group’s (JVC’s) financing
requirements and programs to obtain funds; relations with banks, bondholders and
other creditors; operating and capital expenditure budgets; dividend policy;
accounting policy; tax policy and acquisitions, divestitures and significant
transactions affecting the JVC’s capital structure or ownership. The Committee
shall be accountable to the Boards and Shareholders and may make recommendations
to, and consider such other matters as may be referred to it from time to time
by, the Boards and the Shareholders.

Organization

The Finance Committee shall consist of up to 8 members, in accordance with
clause 5.6(b) of the Shareholders Agreement. The Chief Financial Officer of the
JV Group shall be a standing participant but not a member of the Committee. The
Committee may form one or more subcommittees, each of which may take such
actions as may be specified by the Committee.

Responsibilities and Duties

As its responsibilities and duties, the Committee shall review and advise the
Boards and the Shareholders regarding the following JVC matters:

 

  1. Financial policies and practices

 

  2. Monthly financials (* maybe using the existing flag report)

 

  3. Financing requirements and funding programs, including debt financing;

 

  4. Operating and capital expenditures budgets;

 

  5. Internal Audit plan and reports

 

  6. Review annual audit plan and fees/expenses for external auditors

 

  7. Acquisitions, divestitures, capital projects and other significant
transactions

 

  8. Relations with banks, bondholders and other creditors;

 

  9. Capital authority accomplishments;

 

  10. Dividend policy; and

 

  11. And such other matters as may be referred to it from time to time by the
Boards and Shareholders.

FINANCE COMMITTEE AGENDA CHECKLIST

I. COMPOSITION AND MEETINGS

1. Confirm expertise of committee members

2. Establish number and schedule of meetings

3. JVC to establish meeting agenda for approval by Committee (see II below)

4. Record minutes

5. Report to Boards and Shareholders

 

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II. COMMITTEE RESPONSIBILITIES AND DUTIES

1. Review annual financial results

2. Review year-to-date financial results and forecast

3. Review annual plan, capital budget and financing plan for current year

4. Monitor and review financial policies and practices throughout the JVC

5. Review significant transactions that affect capital structure including debt
financing

6. Review annual Dividends

7. Review Shareholder proposals regarding corporate financial policy

8. Review significant capital authorities as necessary

9. Review annual review of changes in bank relationships

10. Review monthly financial reports

11. Review Shareholder cost of service plans

12. Review capital authority accomplishment report

13. Review multi-year profit & loss, balance sheet, cash flow forecast and
capital structure plan

14. Review annual Internal Audit plan and audit reports

15. Review annual audit plan and fees for external auditors

 

Shareholders agreement    page 118

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CHARTER OF THE

TECHNICAL COMMITTEE

Corporate Authorization and Purpose

The Technical Committee is one of the two standing committees specified under
the Shareholders Agreement to which this charter forms a schedule. The Committee
shall provide advice, assistance, recommendations, and review regarding JV Group
technology decisions, implementation and needs, and Intellectual Property
protections.

Organization

The Technical Committee shall consist of up to six members appointed in
accordance with clause 5.6(c) of the Shareholders Agreement plus a Committee
Chair who will be USG’s Chief Technology Officer. The Technical Committee also
may call on subject matter experts from USG or Boral for assistance as may be
needed by the JV Group.

Responsibilities and Duties

As its responsibilities and duties, the Committee shall:

 

  1. Meet on a regularly scheduled basis with the JV Group’s senior
manufacturing, technical service, engineering, and research managers. The
Committee will meet at least four times per year, with at least one meeting in
person, and the other meetings by telephone and internet or other suitable
means.

 

  2. Review the JV Group’s progress on technology implementation and
initiatives, and provide recommendations to assist the Joint Venture in meeting
implementation deadlines and performance objectives;

 

  3. Work with the JV Group to resolve issues that inhibit or interfere with
technology implementation or implementation schedules;

 

  4. Review and provide recommendations on JV Group technology strategy and
organizational development;

 

  5. Review and assist with recommendations concerning research, technology, and
capital expenditures budgets;

 

  6. Review and assist with recommendations on acquisitions, divestitures,
capital projects, and other significant transactions affecting the JV Group’s
Intellectual Property and technology base within limits approved by management;

 

  7. Work with the JV Group to implement and maintain Intellectual Property
protection protocols and procedures;

 

Shareholders agreement    page 119

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  8. Assist the JV Group in identifying and protecting JV Group developed
Intellectual Property;

 

  9. Advise and assist the JV Group on licensing, cooperative development and
other opportunities with third parties involving Intellectual Property issues;

 

  10. Assist the JV Group with Intellectual Property infringement and other
enforcement issues;

 

  11. Consider such other matters as may be referred to it from time to time by
the Boards or by management; and

 

  12. Perform an annual assessment of the JV Group’s technology and Intellectual
Property base.

 

TECHNICAL COMMITTEE AGENDA CHECKLIST I. INITIAL STEPS AND MEETING PROCEDURES 1.
Confirm Committee members 2. Establish number and locations of meetings 3.
Committee Chair to establish meeting agenda with management 4. Record minutes 5.
Report to management II. COMMITTEE AGENDA FORMAT AND REPORTING 1. Review
technology implementation status, progress and issues 2. Review technology
strategy and initiatives 3. Review technology assistance needs and technology
organizational development 4. Review technology and capital budgets and
expenditures 5. Review technology development and capital planning and proposals
6. Review status of Intellectual Property protections and issues 7. Review
status of Intellectual Property portfolio, and Intellectual Property licensing,
cooperative development and other Intellectual Property opportunities and
agreements, 8. Establish workflows, timelines and accountabilities 9. Report on
recommendations to management

 

Shareholders agreement    page 120

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Schedule 10

Third party arrangements

 

***1

 

 

 

 

 

 

1 Schedule 10 consists of one page redacted and filed separately with the
Commission pursuant to USG Corporation’s request for confidential treatment.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION ***

 

Shareholders agreement    page 121

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Schedule 11

Loan Terms

 

Date u

Between the parties

 

Borrower    [Insert details of JVC 1/JVC 2] Lender    [Insert details of funding
Shareholder] Recitals   

1.      The parties are parties to the Shareholders Agreement.

 

2.      The Borrower has made a capital call on the Shareholders by issuing a
Valid Funding Notice and clause 8.9(e) of the Shareholders Agreement applies.

 

3.      As contemplated by clause 8.9(e) of the Shareholders Agreement, the
Lender has agreed to make available the Loan to the Borrower on the terms and
conditions contained in this agreement.

The parties agree    as set out in the operative part of this agreement, in
consideration of, among other things, the mutual promises contained in this
agreement.

 

Shareholders agreement    page 122

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1 Definitions and interpretation

 

 

1.1 Shareholders Agreement definitions

Terms defined in the Shareholders Agreement have the same meaning when used in
this agreement unless otherwise defined in clause 1.2, and for the avoidance of
doubt in this context:

 

  (a) Valid Funding Notice means the notice dated [to insert] issued by the
Borrower to the Shareholders pursuant to clause 8.9(c) of the Shareholders
Agreement;

 

  (b) the Non-Funding Shareholder is the Shareholder that has not contributed in
full (or at all) its Shareholding Percentage of the total capital call amount
specified in the Valid Funding Notice being [to insert];

 

  (c) the Shortfall Capital is an amount equal to the amount of the Loan and in
the same currency as the amount of the Loan;

 

  (d) the Restoration Amount at any given date is an amount equal to the
aggregate of:

 

  (1) the amount of the Shortfall Capital; and

 

  (2) the amount of accrued interest under this agreement as at the relevant
date; and

 

  (e) the Catch-Up Period is the period of 90 days commencing on the date of the
Advance under this agreement,

and the Loan under this agreement is the relevant Shortfall Loan for the
purposes of clauses 8.9 and 8.10 of the Shareholders Agreement.

 

1.2 Definitions

The meanings of the other terms used in this document are set out below.

 

Term

  

Meaning

Advance    the drawing of the Loan under this agreement. Catch-Up Date    the
date that is 90 days from the date of this agreement. Currency    the currency
specified in the Valid Funding Notice. Event of Default    an event specified as
such in clause 6.1.

 

Shareholders agreement    page 123

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Term

  

Meaning

Excluded Tax   

a Tax imposed by any jurisdiction on the net income of the Lender but not a Tax:

 

1       calculated on or by reference to the gross amount of any payment
(without allowance for any deduction) derived by the Lender under this
agreement; or

 

2       imposed as a result of the Lender being considered a resident of or
organised or doing business in that jurisdiction solely as a result of it being
a party to this agreement.

GST    the goods and services tax levied under the GST Act. GST Act    the A New
Tax System (Goods and Services Tax) Act 1999 (Cth). Interest Period    a period
determined under clause 3. Interest Rate    in respect of an Interest Period,
LIBOR for that Interest Period plus the Margin. LIBOR   

1.      on any Rate Set Date, the rate percent per annum determined by the
Lender by taking the rates quoted in the relevant Bank Data section of the page
entitled ‘BBAM 1’ on the Bloomberg System or any replacement page at or about
11.00am (London time) two Business Days prior to the Rate Set Date as the rates
for deposits in the relevant Currency for a term corresponding to the Interest
Period commencing on that Rate Set Date; and

 

2.      if, in respect of any Rate Set Date, LIBOR cannot be determined in
accordance with item 1 of this definition, the rate percent per annum
conclusively determined in good faith by the Lender at about 11.00 am (in the
time zone in which the Lender is located) one Business Day prior to the Rate Set
Date, to be the Lender’s cost of funding the Loan for a term corresponding to
the Interest Period commencing on that Rate Set Date.

 

All calculations of rates for the purposes of this definition will be expressed
as a yield percent per annum to maturity, and if necessary rounded up to the
nearest fourth decimal place.

Loan    the amount of [insert amount] and Currency] to be provided by the Lender
to the Borrower in accordance with this agreement.

 

Shareholders agreement    page 124

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Term

  

Meaning

Margin    5.00% per annum. Officer    in relation to a party, a director or
secretary, or a person notified to be an authorised officer, of the party.
Potential Event of Default    any event, thing or circumstance which would
become an Event of Default on the giving of notice (whether or not notice is
actually given), the expiry of time, the satisfaction or non-satisfaction of any
condition, the making of a determination or any combination of the above. Power
   any right, power, authority, discretion or remedy conferred on the Lender by
this agreement or any applicable law. Principal Outstanding    at any time, the
aggregate amount of the Loan outstanding at that time. Rate Set Date    the
first day of an Interest Period. Shareholders Agreement    the agreement titled
‘Shareholders Agreement’ dated [to insert] between Boral Building Materials Pty
Limited, Boral International Pty Limited, USG Netherlands Global Holdings B.V.,
JVC 1, JVC 2, Boral Limited and USG Corporation. Tax   

1       any tax, including GST, any levy, charge, impost, duty, fee, deduction,
compulsory loan or withholding; and

 

2       any income, stamp or transaction duty, tax or charge,

 

which is assessed, levied, imposed or collected by any Government Agency and
includes any interest, fine, penalty, charge, fee or other amount imposed on or
in respect of any of the above.

 

1.3 Interpretation

 

  (a) The principles of interpretation in Clause 2 of Schedule 1 to the
Shareholders Agreement apply to the interpretation of this agreement as if
references to ‘this agreement’ in clause 2 of Schedule 1 to the Shareholders
Agreement were references to this agreement, except that a reference to $ is to
the Currency.

 

  (b) The words “including”, “for example” or “such as” when introducing an
example, do not limit the meaning of the words to which the example relates to.

 

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1.4 Business Day

Where the day on or by which any thing is to be done is not a Business Day, that
thing must be done on or by the next Business Day.

 

2 Loan

 

 

  (a) The Lender agrees to provide the Loan to the Borrower on the date of this
agreement on the terms and conditions contained in this agreement.

 

  (b) The Lender is only required to make the Loan available in a single Advance
by deposit into a bank account agreed in writing by the Borrower and the Lender.

 

  (c) The Borrower undertakes to apply the proceeds of the Advance only for the
purpose for which the Valid Funding Notice was issued, and the Borrower must
provide evidence reasonably satisfactory to the Lender of compliance with this
requirement promptly upon request by the Lender.

 

3 Interest

 

 

  (a) Interest accrues on the Principal Outstanding and on the balance of
accrued interest on the last day of each Interest Period and will be calculated
on daily balances on the basis of a 365 day year and for the actual number of
days elapsed, from and including the first day of each Interest Period to but
excluding the last day of the Interest Period.

 

  (b) The rate at which interest accrues under clause 3(a) is the Interest Rate.

 

  (c) Accrued interest is not payable until the date on which the Principal
Outstanding becomes due and payable (or is converted to equity) under clause 4
or the date on which the Principal Outstanding otherwise becomes due and payable
under this agreement. In the event that the Principal Outstanding is not repaid
in full on its due date, interest will continue to accrue on the Principal
Outstanding and on the balance of accrued interest at the Interest Rate in the
same manner and on the same terms as the interest referred to in clause 3(a)
accrues.

 

  (d) The first Interest Period is the period commencing on the date of this
agreement and ending on the date that is 30 days thereafter.

 

  (e) Each subsequent Interest Period will commence from (but excluding) the
last day of the immediately preceding Interest Period and end on the date that
is 30 days thereafter.

 

4 Repayment

 

 

  (a) If the Non-Funding Shareholder contributes the Restoration Amount to the
Borrower in full during the Catch-Up Period as contemplated by clause 8.10(c) of
the Shareholders Agreement, the Borrower must apply the Restoration Amount on
the date the Borrower receives it in the following order of priority:

 

  (1) to repay in full the Principal Outstanding to the Lender together with all
accrued interest (after first deducting any amount required to be deducted or
withheld by the Borrower pursuant to clause 5.3(a) and then adding any amounts
payable by the Borrower to the Lender under clause 5.3(d)); and

 

Shareholders agreement    page 126

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  (2) to pay to the relevant Government Agency any amount deducted or withheld
by the Borrower under clause 4(a)(1) in accordance with clause 5.4.

 

  (b) If the Non-Funding Shareholder fails to contribute the Restoration Amount
by the end of the Catch-Up Period, the Principal Outstanding together with all
accrued interest will be converted to equity in the Borrower on the Business Day
following the last day of the Catch-Up Period so that:

 

  (1) the Lender will subscribe for shares in the Borrower and the Borrower will
issue shares to the Lender having an aggregate issue price equal to the
Principal Outstanding together with all accrued interest (and such issue of
shares will be at the price per share set out in the Valid Funding Notice (and
otherwise on the terms set out in the Valid Funding Notice, to the extent
applicable in the circumstances). ;

 

  (2) the Borrower will apply (and the Lender directs the Borrower to apply) the
issue price of those shares to repay the Principal Outstanding together with all
accrued unpaid interest; and

 

  (3) if the Borrower is required to deduct or withhold any amount from the
repayment of the Principal Outstanding and accrued interest under clause 4(a)(1)
pursuant to clause 5.3(a) then:

 

  (A) subject to the issue of the shares in the Borrower for the issue price
specified in clause 4(b)(1), no additional amount will be payable by the
Borrower to the Lender under clause 5.3(d) in respect of that withholding or
deduction; and

 

  (B) the Borrower will pay to the relevant Government Agency the amount so
withheld or deducted in accordance with clause 5.4; and

 

  (4) if the Lender is required to make a payment of any Tax (other than an
Excluded Tax) in respect of the repayment of the Principal Outstanding and
accrued interest pursuant to clause 5.3(b)) then, the Borrower must pay to the
Lender on demand all additional amounts payable under clause 5.3(d) in respect
of the payment of that Tax by the Lender.

 

5 Payment

 

 

5.1 Payments

All payments by the Borrower to the Lender under this agreement must be made:

 

  (a) in immediately available funds;

 

  (b) in the Currency;

 

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  (c) on or before 11am on the due date (in the time zone in which the Borrower
is located),

to the account specified in writing by the Lender to the Borrower or in such
other manner as the Lender directs in writing from time to time.

 

5.2 Payments in gross

All payments which the Borrower is required to make to the Lender under this
agreement must be:

 

  (a) without any set off, counterclaim or condition; and

 

  (b) without any deduction or withholding for any Tax or any other reason,
unless the Borrower is required to make a deduction or withholding by applicable
law.

 

5.3 Additional payments

If:

 

  (a) the Borrower is required by applicable law to make a deduction or
withholding in respect of Tax (other than Excluded Tax) from any payment to be
made to the Lender under this agreement; or

 

  (b) the Lender is required by applicable law to pay any Tax (other than
Excluded Tax) in respect of any payment it receives from the Borrower under this
agreement,

the Borrower:

 

  (c) indemnifies the Lender against that Tax; and

 

  (d) must pay to the Lender on demand all additional amounts which the Lender
determines to be necessary to ensure that the Lender receives when due a net
amount that is equal to the full amount it would have received if a deduction or
withholding or payment of Tax had not been made.

The indemnity in this clause 5.3 survives termination of this agreement and
repayment of the Principal Outstanding to the Lender together with all accrued
interest.

 

5.4 Tax deduction procedures

 

  (a) If clause 5.3(a) applies, the Borrower must promptly pay the amount it has
deducted or withheld to the appropriate Government Agency as required by law
and:

 

  (1) use reasonable endeavours to obtain a payment receipt from the Government
Agency (and any other documentation ordinarily provided by the Government Agency
in connection with such payment); and

 

  (2) deliver copies of the documents referred to in clause 5.4(a)(1) to the
Lender within 5 Business Days of receipt.

 

  (b) If clause 5.3(b) applies, the Lender must promptly pay the amount of Tax
it is required to pay to the appropriate Government Agency as required by law
and:

 

  (1) use reasonable endeavours to obtain a payment receipt from the Government
Agency (and any other documentation ordinarily provided by the Government Agency
in connection with such payment); and

 

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  (2) deliver copies of the documents referred to in clause 5.4(a)(1) to the
Borrower within 5 Business Days of receipt.

 

5.5 Payments on demand

If any amount payable to the Lender under this agreement is not expressed to be
payable on a specified date that amount is payable by the Borrower on demand by
the Lender.

 

6 Events of Default

 

 

6.1 Events of Default

It is an Event of Default, whether or not it is within the control of the
Borrower, if any of the following occurs:

 

  (a) failure to pay: the Borrower fails to pay or repay any amount due under
this agreement when due;

 

  (b) Insolvency Event: an Insolvency Event occurs in relation to the Borrower;

 

  (c) breach of undertaking: the Borrower breaches the undertaking in
clause 2(c) and does not remedy the breach after 7 days of a written request
from the Lender; or

 

  (d) failure to comply with other obligation: the Borrower fails to comply with
any other obligations under this agreement and does not remedy that breach
within 14 days of a written request from the Lender.

 

6.2 Effect of Event of Default

 

  (a) If an Event of Default occurs, the Lender may, at any time after its
occurrence and while it continues, by notice to the Borrower declare that the
Principal Outstanding (together with any accrued interest on the Principal
Outstanding and any accrued additional amounts payable under clause 5.3) is
immediately due and payable.

 

  (b) The Borrower must immediately repay the amounts due and payable under
clause 6.2(a) on receipt of a notice under clause 6.2(a).

 

6.3 Indemnity

The Borrower must indemnify the Lender on demand against any liability, loss,
cost and expense (including legal costs on a full indemnity basis) it incurs in
connection with or as a result of an Event of Default, Potential Event of
Default or actual or contemplated enforcement of this agreement.

 

6.4 Set-off

If the Borrower does not pay an amount when due, the Lender may (but is not
required to) apply any amount payable to the Borrower by the Lender under any
other agreement in payment of that amount.

 

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6.5 Statement

A written statement by the Lender as to any amount due under this agreement will
be sufficient evidence of that amount unless the Borrower proves it wrong.

 

7 Tax, costs and expenses

 

 

  (a) The Borrower must pay any Tax other than an Excluded Tax in respect of the
Lender, which is payable in respect of the execution, delivery, performance,
release, discharge, amendment, enforcement or attempted enforcement of this
agreement, any transaction contemplated under this agreement and any payment
made or received in respect of this agreement.

 

  (b) Each party must bear its own costs in relation to this agreement.

 

8 General

 

 

8.1 Notices

Clause 23 of the Shareholders Agreement applies in relation to notices or other
communications under this agreement.

 

8.2 Governing law and jurisdiction

 

  (a) This agreement is governed by the laws of New South Wales.

 

  (b) Each party irrevocably submits to the (non-exclusive, as between the two)
jurisdiction of:

 

  (1) courts exercising jurisdiction in New South Wales, Australia and courts of
appeal from them; and

 

  (2) courts exercising jurisdiction in Illinois, United States of America, and
courts of appeal from them,

 

  (c) in relation to any proceedings arising out of or in connection with this
agreement, and no party submits to the jurisdiction of any other courts in
relation to any such proceedings. Without preventing any other mode of service,
any document in an action (including without limitation, any writ of summons or
other originating process or any third or other party notice) may be served on
any party by being delivered to or left for that party at its address for
service of notices applicable under clause 8.1.

 

8.3 Other matters

 

  (a) No failure to exercise and no delay in exercising any Power operates as a
waiver. No waiver of a Power is effective unless made in writing.

 

  (b) A variation of any term of this agreement must be in writing and signed by
the parties.

 

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  (c) The Powers are cumulative and do not exclude any other right, power,
authority, discretion or remedy of the Lender.

 

  (d) The Borrower must not transfer or assign any of its rights and obligations
under this agreement without the prior consent of the Lender. The Lender must
not transfer or assign any of its rights or obligations under this agreement
without the prior consent of the Borrower.

 

  (e) This agreement may be executed in any number of counterparts. All
counterparts, taken together, constitute one instrument. A party may execute
this agreement by signing any counterpart.

 

  (f) Each of the attorneys executing this agreement states that the attorney
has no notice of the revocation of the power of attorney appointing that
attorney.

 

  (g) Each party must do all things and execute all further documents necessary
to give full effect to this agreement.

 

  (h) This agreement and the Shareholders Agreement states all the express terms
agreed by the parties in respect of its subject matter. It supersedes all prior
discussions, negotiations, understandings and agreements in respect of its
subject matter.

 

  (i) Any provision of, or the application of any provision of, this agreement
or any right, power, authority, discretion or remedy conferred by this agreement
that is prohibited in any jurisdiction is, in that jurisdiction, ineffective
only to the extent of that prohibition.

 

  (j) Any provision of, or the application of any provision of, this agreement
that is void, illegal or unenforceable in any jurisdiction does not affect the
validity, legality or enforceability of that provision in any other jurisdiction
or of the remaining provisions in that or any other jurisdiction.

 

Shareholders agreement    page 131

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Signing page

Executed as an agreement

 

 

Shareholders agreement    page 132

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Schedule 12

Adherence Deed

 

 

Date u

  

Between the parties

  

Continuing Parties

  

Each person specified in Schedule 1 as a Continuing Party

(each a Continuing Party)

 

   

New Shareholder

  

[New Shareholder]

 

[insert ACN or other identifier if applicable] of [insert address]

 

Recitals

  

3       The Continuing Parties [and the Departing Shareholders] are parties to
the Shareholders Agreement.

 

4       The New Shareholder has agreed to become a party to the Shareholders
Agreement and to be bound by the terms of that agreement on and from the
Effective Time.

 

5       [The Departing Shareholders will cease to be parties to the Shareholders
Agreement on and from the Effective Time.]

 

 

This deed witnesses as follows:

 

 

 

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1 Definitions, interpretation and deed components

 

 

 

1.1 Definitions

The meanings of certain terms used in this deed are set out below.

 

   Term    Meaning    Effective Time    the time at which any Securities in the
Companies are issued or transferred to the New Shareholder.   

[Departing

Shareholders

  

Each person specified in Schedule 1 as a Departing Shareholder

(each a Departing Shareholder)]

   Securities    equity securities in the Companies, including JV Shares.   

Shareholders

Agreement

   the agreement in the form attached as Attachment 1.

 

1.2 Definitions and interpretation in Shareholders Agreement

Unless expressly defined in this deed, terms defined in the Shareholders
Agreement have the same meaning where used in this deed. Clause 2 of Schedule 1
of the Shareholders Agreement applies to this deed.

 

2 Admission of New Shareholder

 

 

2.1 Application

This clause 2 applies where:

 

  (a) the only Securities that the New Shareholder will hold are JV Shares; and

 

  (b) the New Shareholder will hold the JV Shares as a result of the transfer to
the New Shareholder by a Departing Shareholder of all of the JV Shares held by
the Departing Shareholder.

 

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2.2 Accession

With effect from the Effective Time, the Continuing Parties and New Shareholders
agree to be bound by the Shareholders Agreement as if the New Shareholder were a
party and [‘Boral Holder 1’ / ‘Boral Holder 2’ / ‘USG’] for the purposes of the
Shareholders Agreement. The New Shareholder acknowledges that it has received a
copy of the Shareholders’ Agreement together with all other information it has
required in connection with this deed and the Shareholders’ Agreement.

 

2.3 New Shareholder’s rights and obligations

With effect from the Effective Time, the New Shareholder:

 

  (a) must comply with, and perform all obligations under, the Shareholders
Agreement that apply to a party of the type identified in clause 2.2 above; and

 

  (b) has and may exercise all the rights, powers and discretions under the
Shareholders Agreement that a party of the type identified in clause 2.2 above
has.

 

2.4 Notice

Notice may be given to the New Shareholder under the Shareholders Agreement at
the address set out at the commencement of this deed.

 

2.5 Compliance with constitution

The New Shareholder acknowledges that the New Shareholder is bound by each
Company’s Constitution.

 

2.6 Breaches occurring and liability incurred before the Effective Time

Each party to this deed agrees with each other party to this deed that the New
Shareholder is not liable:

 

  (a) for any breach by the Departing Shareholder of the Shareholders Agreement
that occurred before the Effective Time; or

 

  (b) for any liability of the Departing Shareholder under the Shareholders
Agreement that was incurred before the Effective Time.

 

2.7 Warranties – natural person

Where the New Shareholder is a natural person, the New Shareholder represents
and warrants to each Continuing Party that neither the execution and performance
by the New Shareholder of this document, nor any transaction contemplated under
the Shareholders Agreement, will breach in any respect any provision of:

 

  (a) any document, agreement or other arrangement binding upon the New
Shareholder or his or her assets; or

 

  (b) any law or direction of any Government Agency.

 

2.8 Warranties – body corporate or trustee of trust

Where the New Shareholder is a is a body corporate or trustee of a trust, the
New Shareholder represents and warrants to each Continuing Party that:

 

Shareholders agreement    page 135

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  (a) it has the power to enter into and perform its obligations under this deed
and the Shareholders Agreement;

 

  (b) it has taken all necessary action to authorise the entry into and
performance of its obligations under this deed and the Shareholders Agreement;

 

  (c) its obligations under this deed are valid and binding;

 

  (d) the entry into and performance of its obligations under this deed and the
Shareholders Agreement will not breach in any respect any provision of its
constituent documents (including any constitution or any trust deed), any other
document, agreement or other arrangement binding upon it or its assets, or any
law or direction of any Government Agency.

 

3 Amendments to Shareholders Agreement

 

 

3.1 Application

This clause 3 applies except in the circumstances identified in clause 2.1.

 

3.2 Amendments

 

  (a) The Continuing Parties and the New Shareholder have agreed to certain
amendments to the Shareholders Agreement as set out in Attachment 1.

 

  (b) With effect from the Effective Time, the Shareholders Agreement is amended
as set out in Attachment 1. For the avoidance of doubt, in relation to the
amendments shown to the Shareholders Agreement in Attachment 1:

 

  (1) any word, letter or punctuation mark containing a line through it is
regarded as deleted from the Shareholders Agreement; and

 

  (2) any word, letter or punctuation mark underlined is regarded as added to
the Shareholders Agreement,

and the Shareholders Agreement is to be interpreted and reproduced as if all
deletions are excluded from the Shareholders Agreement and all additions are
included in the Shareholders Agreement.

 

3.3 Amendments not to affect validity, rights, obligations

 

  (a) This deed is intended only to vary the Shareholders Agreement and not to
terminate, discharge, rescind or replace it.

 

  (b) The amendments to the Shareholders Agreement do not affect the validity or
enforceability of the Shareholders Agreement.

 

  (c) Nothing in this deed:

 

  (1) prejudices or adversely affects any right, power, authority, discretion or
remedy which arose under or in connection with the Shareholders Agreement before
the date of this deed; or

 

  (2) discharges, releases or otherwise affects any liability or obligation
which arose under or in connection with the Shareholders Agreement before the
date of this deed.

 

Shareholders agreement    page 136

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3.4 Confirmation

With effect from the Effective Time, the Continuing Parties and the New
Shareholder are bound by the Shareholders Agreement as amended by this deed.

 

3.5 General

 

  (a) This deed is governed by the laws of New South Wales. The parties
irrevocably submit to the non-exclusive jurisdiction of the courts of New South
Wales (and courts of appeal from them) and the courts exercising jurisdiction in
Illinois, United States of America (and courts of appeal from them).

 

  (b) Each party must do all things and execute all further documents necessary
to give full effect to this deed.

 

  (c) This deed supersedes all previous agreements in respect of its subject
matter.

 

  (d) This deed may be executed in any number of counterparts. All counterparts,
taken together, constitute one instrument. A party may execute this deed by
signing any counterpart. A party who executes a counterpart of this deed is
bound by this deed and may enforce it against other parties who execute
counterparts of this deed.

 

  (e) Each of the attorneys executing this deed states that the attorney has no
notice of the revocation of the power of attorney appointing that attorney.

 

Shareholders agreement    page 137

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Schedule 1

Continuing Parties [and Departing Shareholders]

 

 

[list of then current parties to be inserted at relevant time]

 

Shareholders agreement    page 138

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LOGO [g680881img002.jpg]  

 

Signing page

Executed as a deed

 

 

[appropriate execution blocks to be inserted at the relevant time]

 

Shareholders agreement    page 139

--------------------------------------------------------------------------------

LOGO [g680881img002.jpg]  

 

Attachment 1

Shareholders Agreement

 

 

[copy of then current document to be attached at relevant time]

 

Shareholders agreement    page 140

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LOGO [g680881img002.jpg]  

 

Schedule 13

Notice details

 

 

Boral and Boral Guarantor    Boral Limited, Boral International Pty Limited and
Boral Building Materials Pty Limited Address   

Level 3

40 Mount Street

Sydney, NSW 2060

Australia

Attention   

Group General Counsel

with a copy to

Company Secretary

Phone    +61 2 9220 6365 Fax    +61 2 9233 3724 Email   

Damien.sullivan@boral.com.au

with a copy to

Dominic.millgate@boral.com.au

 

USG and USG Guarantor    USG Netherlands Global Holdings B.V. and USG
Corporation Address    550 West Adams Street, Chicago, Illinois 60661, United
States of America Attention   

Stanley Ferguson, Executive Vice President, General Counsel and Secretary, USG
Corporation

 

with a copy to

 

Jennifer F Scanlon, President, Senior Vice President and President,
International, USG Corporation

Phone    312-436-5387 Fax    Email   

sferguson@usg.com

 

with a copy to

 

jscanlon@usg.com

 

 

Shareholders agreement    page 141

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LOGO [g680881img002.jpg]   Notice details

 

JVC 1    USG Boral Building Products Pte Limited Address   

8 Boon Lay Way,

#08-14 TradeHub 21

Singapore 609964

Attention   

Group General Counsel (Boral);

 

Stanley Ferguson, Executive Vice President, General Counsel and
Secretary, USG Corporation; and

 

Paul Monzella

 

with a copy to

 

Company Secretary (Boral); and

 

Jennifer F Scanlon, President, Senior Vice President and President,
International, USG Corporation

Phone   

+61 2 9220 6365 (Boral)

 

312-436-5387 (USG)

 

312-436-4007 (Paul Monzella)

Fax    +61 2 9233 3724 (Boral) Email   

damien.sullivan@boral.com.au

 

sferguson@usg.com

 

pmonzella@usg.com

 

with a copy to

 

dominic.millgate@boral.com.au

 

jscanlon@usg.com

 

JVC 2    USG Boral Building Products Pty Limited Address   

Level 3

40 Mount Street

Sydney, NSW 2060

Australia

Attention   

Group General Counsel (Boral);

 

Stanley Ferguson, Executive Vice President, General Counsel and
Secretary, USG Corporation; and

 

Trevor Fox

 

with a copy to

 

Company Secretary (Boral); and

 

Jennifer F Scanlon, President, Senior Vice President and President,
International, USG Corporation

Phone   

+61 2 9220 6365 (Boral)

 

312-436-5387 (USG)

 

+61 2 9898 7989 (Trevor Fox)

 

Shareholders agreement    page 142

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LOGO [g680881img002.jpg]   Notice details

 

Fax    +61 2 9233 3724 (Boral) Email   

damien.sullivan@boral.com.au

 

sferguson@usg.com

 

trevor.fox@boral.com.au

 

with a copy to

 

dominic.millgate@boral.com.au;

 

jscanlon@usg.com

 

Shareholders agreement    page 143

--------------------------------------------------------------------------------

LOGO [g680881img002.jpg]   Signing page

 

Signing page

Executed as a deed

 

 

    

Signed sealed and delivered for

Boral Building Materials Pty Limited

by its attorneys

         

sign here u

  

/s/ Dominic Millgate

     

/s/ Damien Sullivan

   Attorney       Attorney

print name

  

Dominic Millgate

     

Damien Sullivan

   in the presence of      

sign here u

  

/s/ Miriam Gathercole

     

/s/ Miriam Gathercole

   Witness       Witness

print name

  

Miriam Gathercole

     

Miriam Gathercole

    

Signed sealed and delivered for

Boral International Pty Limited

by its attorneys

         

sign here u

  

/s/ Dominic Millgate

     

/s/ Damien Sullivan

   Attorney       Attorney

print name

  

Dominic Millgate

     

Damien Sullivan

   in the presence of      

sign here u

  

/s/ Miriam Gathercole

     

/s/ Miriam Gathercole

   Witness       Witness

print name

  

Miriam Gathercole

     

Miriam Gathercole

 

Shareholders agreement    page 144

--------------------------------------------------------------------------------

LOGO [g680881img002.jpg]   Signing page

 

  

Signed sealed and delivered for

USG Netherlands Global Holdings B.V.

by USG Foreign Investments, Ltd., its Managing Director

   LOGO [g6808813.jpg]      

sign here u

  

/s/ Stella Lee

     

/s/ Stanley Ferguson

   Witness       Authorised signatory

print name

  

Stella Lee

     

Stanley Ferguson

 

Shareholders agreement    page 145

--------------------------------------------------------------------------------

LOGO [g680881img002.jpg]   Signing page

 

    

Signed, sealed and delivered for

USG Boral Building Products Pte Limited

 

by its authorised attorneys

             LOGO [g6808811.jpg]       LOGO [g6808812.jpg] sign here u   

/s/ Dominic Millgate

     

/s/ Stanley Ferguson

   Attorney       Attorney print name   

Dominic Millgate

     

Stanley Ferguson

   in the presence of      

sign here u

  

/s/ Miriam Gathercole

     

/s/ Stella Lee

   Witness       Witness print name   

Miriam Gathercole

       

Stella Lee

 

Shareholders agreement    page 146

--------------------------------------------------------------------------------

LOGO [g680881img002.jpg]   Signing page

 

    

Signed sealed and delivered for

USG Boral Building Products Pty Limited (formerly, Boral Australian Gypsum Pty
Limited)

by its attorneys

sign here u

  

/s/ Dominic Millgate

     

/s/ Damien Sullivan

   Attorney       Attorney

print name

  

Dominic Millgate

     

Damien Sullivan

   in the presence of      

sign here u

  

/s/ Miriam Gathercole

     

/s/ Miriam Gathercole

   Witness       Witness

print name

  

Miriam Gathercole

     

Miriam Gathercole

    

Signed sealed and delivered for

Boral Limited

by its attorneys

         

sign here u

  

/s/ Dominic Millgate

     

/s/ Damien Sullivan

   Attorney       Attorney

print name

  

Dominic Millgate

     

Damien Sullivan

   in the presence of      

sign here u

  

/s/ Miriam Gathercole

     

/s/ Miriam Gathercole

   Witness       Witness

print name

  

Miriam Gathercole

     

Miriam Gathercole

    

Signed sealed and delivered by

USG Corporation

by

         

sign here u

  

/s/ Stanley Ferguson

         Authorised Representative      

print name

  

Stanley Ferguson

     

 

Shareholders agreement    page 147

--------------------------------------------------------------------------------

LOGO [g680881img002.jpg]  

 

Attachment 1

Initial Strategic Plan

 

 

***2

 

 

 

 

 

2 Attachment 1 consists of 19 pages redacted and filed separately with the
Commission pursuant to USG Corporation’s request for confidential treatment.

*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION ***

 

Shareholders agreement    page 148