Exhibit 10.1

 

GRAPHIC [g96561kk01i001.jpg]

 

Chengdu Tianqi Group Co., Ltd. and Tianqi Group HK Co., Limited

 

Sichuan Tianqi Lithium Industries, Inc. and Tianqi UK Limited

 

RT Lithium Limited

 

Windfield Holdings Pty Ltd

 

Shareholders Agreement

 

Allens

QV.1 Building

250 St Georges Terrace

Perth WA 6000

Tel  +61 8 9488 3700

Fax  +61 8 9488 3701

www.allens.com.au

 

©  Allens, Australia 2014

 

Allens is an independent partnership operating in alliance with Linklaters LLP.

 

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Shareholders Agreement

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Contents

 

 

 

1

Definitions and Interpretation

3

2

Windfield Share Capital and Adoption of Constitution

9

3

Implementation

10

4

Business and Management of Windfield

12

5

Board

14

6

Board Meetings and Resolutions of Directors

15

7

Composition of boards of other Windfield Group Entities

17

8

Deadlock

17

9

Financial Matters and Information

17

10

Distribution Policy

20

11

Shareholder Activities

20

12

Compliance Policies

20

13

Additional Funding

21

14

Non-solicitation of Windfield Group Employees

21

15

Lithium Distribution and Off-take Arrangements

21

16

Transfer of Shares and Shareholder Debt

23

17

Permitted Transfers to Certain Related Bodies Corporate

23

18

Permitted Transfer to Tianqi Listco UK

24

19

Right of First Refusal

24

20

Transfer on Event of Default

26

21

Terms and Consequences of Transfers of Shares

27

22

IPO Demand Right

30

23

Confidentiality

31

24

Mutual Representations and Warranties

33

25

Operation of Agreement

33

26

Relationship between the Shareholders

34

27

Duration and Termination

34

28

Notices

34

29

General

36

Schedule 1 — Deed of Accession

39

Schedule 2 — Deed of Cross Security

41

Schedule 3 — Special Majority Matters

42

Schedule 4 — Chemical Grade Off-take Agreement Terms

44

Schedule 5 — Technical Grade Distribution Agreement Terms

45

 

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This agreement is made on 31 March 2014

 

Parties

 

1

 

Chengdu Tianqi Group Co., Ltd., incorporated in China, of Building 2, 10 East
Gao Peng Road, Chengdu Hi-tech Zone, Chengdu 610041, China (Tianqi Parent) and
Tianqi Group HK Co., Limited (HK CR No. 1778886) of Room B, 14th Floor, Wah Hen
Commercial Centre, 383 Hennessy Road, Wanchai, Hong Kong, China (Tianqi HK and,
together with Tianqi Parent, Tianqi Group).

 

 

 

2

 

Sichuan Tianqi Lithium Industries, Inc., incorporated in China, of No. 2
Building, 10 East Gao Peng Road, Chengdu Hi-tech Zone, Chengdu 610041, China
(Tianqi Listco) and Tianqi UK Limited (UK Company No. 08960607) incorporated in
England and Wales, c/- Hackwood Secretaries Limited, One Silk Street, London,
EC2Y 8HQ, United Kingdom (Tianqi Listco UK and, together with Tianqi Listco,
Tianqi).

 

 

 

3

 

RT Lithium Limited (UK Company No. 08785002), incorporated in England and Wales,
of 400 Capability Green, Luton, Bedfordshire, England LU1 3AE, United Kingdom
(Rockwood UK).

 

 

 

4

 

Windfield Holdings Pty Ltd (ACN 160 456 164) of Level 4, 37 St Georges Terrace,
Perth WA 6000, Australia (Windfield).

 

 

 

Recitals

 

 

 

A

 

Windfield is the holding company of a corporate group that carries on a business
in Western Australia of mining spodumene to produce chemical and technical grade
lithium concentrates.

 

 

 

B

 

Tianqi HK is the registered holder and beneficial owner of approximately 65% of
all shares in the capital of Windfield. Leader is the registered holder and
beneficial owner of approximately 35% of all shares in the capital of Windfield.

 

 

 

C

 

All of the parties, except Tianqi Listco and Tianqi Listco UK, are parties to a
shareholders agreement dated 29 November 2013 (the Original Shareholders
Agreement). The Original Shareholders Agreement assumed the implementation of
certain transaction steps contemplated by an acquisition agreement dated
29 November 2013 (the Original Acquisition Agreement) between Rockwood UK,
Tianqi HK, Leader and Windfield the effect of which would be that Leader ceased
to be a shareholder in Windfield, Tianqi HK reduced its shareholding in
Windfield to 51% and Rockwood UK acquired a shareholding in Windfield of 49%.

 

 

 

D

 

On or about the date of this agreement, Tianqi Parent and Tianqi Listco agreed
(through a variation of an earlier agreement dated 7 June 2013) that Tianqi
Parent would cause Tianqi HK to sell its remaining (51%) shareholding in
Windfield to Tianqi Listco or a subsidiary of Tianqi Listco and Tianqi Listco
would buy or cause a subsidiary to buy that shareholding. Tianqi Listco has
nominated Tianqi Listco UK for this purpose.

 

 

 

E

 

On or about the date of this agreement, the parties to the Original Acquisition
Agreement agreed to amend and restate that agreement (as so amended and
restated, the Acquisition Agreement) including by changing the transaction steps
so that Rockwood UK would acquire a 49% shareholding in Windfield directly by
acquiring shares from Leader (35%) and Tianqi HK (14%).

 

 

 

F

 

The parties have agreed to replace the Original Shareholders Agreement so as to
give effect to the above developments.

 

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G

 

Tianqi Listco UK and Rockwood UK wish to operate Windfield as a company, and for
the Windfield Group to carry on the Business. This agreement regulates their
rights and obligations as Shareholders, and imposes obligations on Windfield in
relation to the Business.

 

 

 

H

 

Talison Lithium Australia will enter into the following agreements, each of
which will only take effect on and from Completion:

 

(a)                                 the Tianqi Chemical Grade Off-take Agreement
and the Tianqi Technical Grade Distribution Agreement with Tianqi Parent or, at
Tianqi Parent’s election, one of Tianqi Listco or a related body corporate of
Tianqi Parent or Tianqi Listco; and

 

(b)                                 the Rockwood Chemical Grade Off-take
Agreement and the Rockwood Technical Grade Distribution Agreement with
Rockwood UK (or one of its related bodies corporate).

 

It is agreed as follows.

 

1                                        Definitions and Interpretation

 

1.1                              Definitions

 

The following definitions apply unless the context requires otherwise.

 

Acceptance Notice has the meaning given in clause 19.3.

 

Acquisition Agreement has the meaning given in the recitals.

 

Anti-Corruption Law means each of the Bribery Act 2010 (UK), the Foreign Corrupt
Practices Act 1977 (15 U.S.C. § 78dd-1, et seq.), the Australian Criminal Code
Act 1995 (Cth) and any other similar laws that address corruption in other
applicable jurisdictions.

 

Board means the board of directors of Windfield.

 

Break Fee means the Tianqi Break Fee or the Rockwood Break Fee.

 

Budget and Business Plan means, at any particular time, the budget and business
plan for the Windfield Group approved in accordance with clause 9.3 and in force
at that time.

 

Business means the business of mining spodumene in Western Australia to produce
chemical and technical grade lithium concentrates.

 

Business Day means a day which is not a Saturday, Sunday, or a public holiday in
Chengdu, Frankfurt, New York or Perth.

 

Buyer has the meaning given in clause 21.1.

 

CEO has the meaning given in clause 4.4(a)(i).

 

CFO has the meaning given in clause 4.4(a)(ii).

 

A Change of Control, in relation to a Shareholder, occurs when a person (or
persons who are acting in concert in relation to the affairs of the Shareholder
or a holding company of the Shareholder), who did not control the Shareholder at
the time it became a Shareholder, begins to control the Shareholder except if
the Change of Control is caused solely by:

 

(a)                                 a bona fide acquisition of shares in the
capital of, or a bona fide reorganisation undertaken by, the ultimate holding
company of the Shareholder;

 

(b)                                 the Shareholder beginning to be controlled
by a subsidiary of its ultimate holding company; or

 

(c)                                  in the case of Tianqi Listco UK, it
beginning to be controlled by Mr. Weiping Jiang, Tianqi Parent or any subsidiary
of Tianqi Parent.

 

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Chemical Grade Off-take Agreement means the Tianqi Chemical Grade Off-take
Agreement or the Rockwood Chemical Grade Off-take Agreement.

 

Closing Date has the meaning given in clause 19.3.

 

Commercial Manager has the meaning given in clause 4.4(a)(iii).

 

Completion and Completion Date each has the meaning given in the Acquisition
Agreement.

 

Conditions Precedent has the meaning given in the Acquisition Agreement.

 

Confidential Information has the meaning given in clause 23.1.

 

Constitution means the constitution of Windfield.

 

Corporations Act means the Corporations Act 2001 (Cth).

 

Deadlock, Deadlock Notice and Deadlock Transfer Notice each have the meaning
given in clause 8.

 

Deed of Accession means a deed substantially in the form set out in Schedule 1
(or such other form as the Shareholders may approve).

 

Deed of Cross Security, in relation to:

 

(a)                                 each of Tianqi HK or Tianqi Listco UK (as
applicable based on which of them will be a Shareholder immediately after
Completion) and Rockwood UK, the deed of cross security to be entered into
between them on or about the Completion Date; and

 

(b)                                 any other Shareholder, the deed of cross
security entered into by it substantially in the form set out in Schedule 2 (or
such other form as the Shareholders may approve) before it became a Shareholder.

 

Default Notice has the meaning given in clause 20.2.

 

Defaulting Shareholder has the meaning given in clause 20.1.

 

Director means a person appointed or elected to the office of director of
Windfield in accordance with clause 5.1 and the Constitution and includes any
alternate director duly appointed and acting in the place of that director.

 

Drag-along Assets, Drag-along Debt, Drag-along Notice and Drag-along Shares each
has the meaning given in clause 19.4.

 

End Date has the meaning given in the Acquisition Agreement.

 

Event of Default has the meaning given in clause 20.1.

 

Fair Market Value, in relation to any Relevant Assets, means their fair market
value to be determined by reference to the following assumptions and bases:

 

(a)                                 on the basis of an arm’s length sale between
a willing seller and a willing buyer who are acting knowledgeably, prudently and
without compulsion;

 

(b)                                 if the Windfield Group is then carrying on
business as a going concern, on the assumption that it will continue to do so;

 

(c)                                  taking into account the Finance Debt of the
Windfield Group in accordance with customary valuation principles;

 

(d)                                taking into account the rights and other
restrictions attached to the Relevant Assets (including whether the Relevant
Assets do or do not (taken as a whole) confer any right of control of
Windfield); and

 

(e)                                 taking into account any other information
the Independent Expert considers relevant.

 

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Finance Debt means indebtedness (whether actual or contingent) in respect of
money borrowed or raised or other financial accommodation. It includes
indebtedness under or in respect of:

 

(a)                                 a guarantee of Finance Debt or a guarantee
given to a financier;

 

(b)                                 a finance lease;

 

(c)                                  a swap, option, hedge, forward, futures or
similar transaction;

 

(d)                                 an acceptance, endorsement or discounting
arrangement;

 

(e)                                  a redeemable share or redeemable stock; or

 

(f)                                   the deferred purchase price (for more than
90 days) of an asset or service,

 

or an obligation to deliver assets or services paid for in advance by a
financier or otherwise relating to a financing transaction.

 

Government Agency means a government or a governmental, semi-governmental or
judicial entity or authority. It also includes a self-regulatory organisation
established under statute or a securities exchange.

 

IFRS means the International Financial Reporting Standards, as amended and
updated during the term of this agreement.

 

Independent Expert means a person of appropriate reputation, standing and
relevant valuation experience in a top tier international accounting firm, who
has no direct or indirect personal interest in relation to the valuation of the
Relevant Assets and who otherwise satisfies any independence requirements under
applicable law, appointed under clause 20.4.

 

Insolvency Event in relation to a Shareholder means:

 

(a)                                the Shareholder stopping or suspending or
threatening to stop or suspend payment of all or a class of its debts;

 

(b)                                the Shareholder entering into or resolving to
enter into any arrangement, composition or compromise with or assignment for the
benefit of its creditors or any class of them in any relevant jurisdiction;

 

(c)                                  the Shareholder being unable to pay its
debts when they are due or being deemed under any statutory provision of any
relevant jurisdiction to be insolvent;

 

(d)                                 a liquidator or provisional liquidator being
appointed to the Shareholder or a receiver, receiver and manager, administrator,
trustee or similar official being appointed over any of the assets or
undertakings of the Shareholder, or an event analogous with any such event
occurring in any relevant jurisdiction; or

 

(e)                                  an application or order being made or a
resolution being passed for the winding up or dissolution of the Shareholder
(except for the purposes of a bona fide reconstruction or amalgamation).

 

Leader means Leader Investment Corporation, incorporated in China.

 

Liabilities means debts, obligations, liabilities, losses, expenses, costs and
damages of any kind and however arising, including penalties, fines, and
interest and including those which are prospective or contingent and those the
amount of which for the time being is not ascertained or ascertainable.

 

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Material Breach, in respect of a Shareholder, means a breach of a Transaction
Document by the Shareholder or a related body corporate of the Shareholder which
is material with regard to all relevant circumstances, including:

 

(a)                                 the nature of the relationship between the
Shareholders and the need for each Shareholder to maintain the confidence of the
others;

 

(b)                                 the nature of the breach (whether
intentional, negligent or otherwise); and

 

(c)                                  the consequences of the breach for the
Windfield Group and the other Shareholders.

 

Non-defaulting Shareholder has the meaning given in clause 20.1.

 

Offeror has the meaning given in clause 19.1.

 

Original Acquisition Agreement has the meaning given in the recitals.

 

Original Shareholders Agreement has the meaning given in the recitals.

 

Permitted Regulatory Condition means, in respect of a proposed Transfer, a
condition requiring that an approval or consent which the Offeror or the Buyer,
as the case may be, requires under applicable law, or the requirements of a
recognised securities exchange, in order to complete the Transfer, is obtained.

 

Permitted Security Interest means:

 

(a)                                 a charge or lien arising in favour of a
Government Agency by operation of statute unless there is default in payment of
money secured by that charge or lien;

 

(b)                                 any mechanics’, workmen’s or other like lien
arising in the ordinary course of business; or

 

(c)                                  any retention of title arrangement
undertaken on arm’s length terms and in the ordinary course of business.

 

PRC means the People’s Republic of China.

 

Related Transferor and Related Transferee each has the meaning given in
clause 17.

 

Relevant Assets, Relevant Notice and Relevant Time each has the meaning given in
clause 21.1.

 

Remaining Shareholder has the meaning given in clause 19.1.

 

Rockwood Break Fee means US$30 million.

 

Rockwood Chemical Grade Off-take Agreement has the meaning given in
clause 15.2(b).

 

Rockwood Technical Grade Distribution Agreement has the meaning given in
clause 15.1(b).

 

Sale Assets, Sale Debt and Sale Shares each has the meaning given in
clause 20.2.

 

Security Interest means any mortgage, pledge, lien or charge or any security or
preferential interest or arrangement of any kind. It includes:

 

(a)                                 anything which gives a creditor priority to
other creditors with respect to any asset; and

 

(b)                                 retention of title (other than on arm’s
length terms and in the ordinary course of business) and a deposit of money by
way of security.

 

It does not include:

 

(c)                                  an interest of the kind referred to in
section 12(3) of the Personal Property Securities Act 2009 (Cth) where the
transaction concerned does not, in substance, secure payment or performance of
an obligation; or

 

(d)                                 a Permitted Security Interest.

 

Selling Shareholder has the meaning given in clause 21.1.

 

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Share means an ordinary share in the capital of Windfield.

 

Shareholder means each party which holds Shares.

 

Shareholder Debt, in relation to a Shareholder, means at any time the aggregate
amount outstanding at that time in respect of all Finance Debt provided to any
Windfield Group Entity by the Shareholder or any related body corporate of the
Shareholder.

 

Simple Majority means more than 50% of the votes cast on the resolution
(including any casting vote) by or on behalf of those Directors present
(including those Directors not present but having their vote cast on their
behalf pursuant to clause 6.4(a)(ii)) and entitled to vote on the resolution
concerned.

 

Special Majority means more than two-thirds of the votes cast on the resolution
by or on behalf of those Directors present (including those Directors not
present but having their vote cast on their behalf pursuant to
clause 6.4(a)(ii)) and entitled to vote on the resolution concerned.

 

Special Majority Matter means each of the matters set out in Schedule 3.

 

Specified Proportion, in relation to a Shareholder, means a fraction, the
numerator of which is the total number of the Shares held by the Shareholder and
the denominator of which is the total number of all the Shares (including the
Shares held by that Shareholder) on issue, expressed as a percentage.

 

Tag-along has the meaning given in clause 19.1.

 

Tag-along Assets, Tag-along Debt, Tag-along Notice and Tag-along Shares each has
the meaning given in clause 19.3.

 

Talison means Talison Lithium Pty Ltd (ACN 140 122 078), incorporated in
Australia.

 

Talison Lithium Australia means Talison Lithium Australia Pty Ltd
(ACN 139 401 308), incorporated in Australia.

 

Technical Grade Distribution Agreement means the Tianqi Technical Grade
Distribution Agreement or the Rockwood Technical Grade Distribution Agreement.

 

Third Party Offer has the meaning given in clause 19.1.

 

Tianqi Break Fee means US$7.5 million.

 

Tianqi Chemical Grade Off-take Agreement has the meaning given in
clause 15.2(a).

 

Tianqi Technical Grade Distribution Agreement has the meaning given in
clause 15.1(a).

 

Transaction Document means:

 

(a)                                 this agreement;

 

(b)                                 the Constitution;

 

(c)                                  the Acquisition Agreement;

 

(d)                                 each Deed of Cross Security;

 

(e)                                  each Deed of Accession;

 

(f)                                   each Technical Grade Distribution
Agreement; and

 

(g)                                  each Chemical Grade Off-take Agreement.

 

Transfer in relation to a Share or any Shareholder Debt means:

 

(a)                                 to sell, transfer, assign or otherwise
dispose of or deal in;

 

(b)                                 to agree or offer (or grant any option
which, if exercised, would enable a person) to sell, transfer, assign or
otherwise dispose of or deal in;

 

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(c)                                  to declare oneself a trustee of or part
with the benefit of; or

 

(d)                                 to alienate any entitlement to, or legal or
beneficial or equitable interest or right in, or in respect of,

 

the Share (or any interest in it or any part of it) or Shareholder Debt (or any
interest in it or any part of it), whether done before, on or after the person
attains any interest in it, but does not include to grant or create a Security
Interest over or in respect of a Share.

 

Transfer Assets, Transfer Debt, Transfer Shares and Transferring Shareholder
each has the meaning given in clause 19.1.

 

Transfer Date has the meaning given in clause 21.2.

 

Transfer Notice and Transfer Offer each has the meaning given in clause 19.2.

 

Windfield Group means Windfield and each of its subsidiaries from time to time,
and a Windfield Group Entity means any one of them.

 

1.2                              Interpretation

 

Headings are for convenience only and do not affect interpretation.

 

(a)                                 Mentioning anything after includes,
including, for example, or similar expressions, does not limit what else might
be included.

 

(b)                                 Nothing in this agreement is to be
interpreted against a party solely on the ground that the party put forward this
agreement or a relevant part of it.

 

The following rules apply unless the context requires otherwise.

 

(c)                                  The singular includes the plural, and the
converse also applies.

 

(d)                                 A gender includes all genders.

 

(e)                                  If a word or phrase is defined, its other
grammatical forms have a corresponding meaning.

 

(f)                                   A reference to a person includes a
corporation, trust, partnership, unincorporated body or other entity, whether or
not it comprises a separate legal entity.

 

(g)                                  A reference to a recital, clause or
Schedule is a reference to a recital to, clause of or Schedule to this
agreement.

 

(h)                                A reference to an agreement or document
(including a reference to this agreement) is to the agreement or document as
amended, supplemented, novated or replaced, except to the extent prohibited by
this agreement or that other agreement or document.

 

(i)                                    A reference to writing includes any
method of representing or reproducing words, figures, drawings or symbols in a
visible and tangible form.

 

(j)                                    A reference to a party to this agreement
or another agreement or document includes the party’s successors, permitted
substitutes and permitted assigns (and, where applicable, the party’s legal
personal representatives).

 

(k)                                 A reference to legislation or to a provision
of legislation includes a modification or re-enactment of it, a legislative
provision substituted for it and a regulation or statutory instrument issued
under it.

 

(l)                                     A reference to an agreement includes any
undertaking, deed, agreement and legally enforceable arrangement, whether or not
in writing, and a reference to a document includes an agreement (as so defined)
in writing and any certificate, notice, instrument and document of any kind.

 

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(m)                             A reference to a right or obligation of Tianqi
Group, Tianqi Parent or Tianqi HK confers that right, or imposes that
obligation, as the case may be, on each of Tianqi Parent and Tianqi HK jointly
and severally, and an approval or consent of either of them is a consent or
approval of both of them.

 

(n)                                 A reference to a right or obligation of
Tianqi, Tianqi Listco or Tianqi Listco UK confers that right, or imposes that
obligation, as the case may be, on each of Tianqi Listco and Tianqi Listco UK
jointly and severally, and an approval or consent of either of them is a consent
or approval of both of them.

 

(o)                                 A reference to time is to Perth time.

 

(p)                                 A reference to commercially sensitive
information of a person is to any confidential information in the possession or
control of the person that the person believes (acting reasonably):

 

(i)                                    is or is likely to be of a commercially
sensitive nature; or

 

(ii)                                 the disclosure of which is prohibited by
law or is likely to be damaging to its legal interests (including the loss of
any legal privilege attaching to the information).

 

1.3                              Related bodies corporate

 

(a)                                 Subject to paragraph (c), an entity is a
related body corporate of a person if it is a holding company, a subsidiary or
another subsidiary of a holding company of that person.

 

(b)                                 Subject to paragraph (c), an entity is a
subsidiary of another person (its holding company) if that person, whether
directly or indirectly through one or more other subsidiaries:

 

(i)                                    holds a majority of the voting rights in
it;

 

(ii)                                 is a member or shareholder of it and has
the right to appoint or remove a majority of its board of directors or
equivalent managing body;

 

(iii)                              is a member or shareholder of it and controls
alone, or pursuant to an agreement with other members or shareholders, a
majority of the voting rights in it; or

 

(iv)                             has the right to exercise a dominant influence
over it, for example by having the right to give directions with respect to its
operating and financial policies, with which directions its directors or other
officers are obliged to comply.

 

(c)                                  In respect of the use of the terms related
body corporate, holding company and subsidiary in this agreement only, no
Windfield Group Entity is a related body corporate of a Shareholder and vice
versa, such that no Shareholder is a holding company of a Windfield Group Entity
and no Windfield Group Entity is a subsidiary of a Shareholder.

 

1.4                              Consents or approvals

 

If the doing of any act, matter or thing under this agreement is dependent on
the consent or approval of a party or is within the discretion of a party, the
consent or approval may be given or the discretion may be exercised
conditionally or unconditionally or withheld by the party in its absolute
discretion unless expressly provided otherwise.

 

2                                        Windfield Share Capital and Adoption of
Constitution

 

2.1                              Windfield share capital

 

Immediately following Completion, Shareholdings in Windfield will be as follows:

 

(a)                                 such number of shares in the capital of
Windfield as at that time represent 51% of all issued shares will be held by
Tianqi HK or Tianqi Listco UK; and

 

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(b)                                 such number of shares in the capital of
Windfield as at that time represent 49% of all issued shares will be held by
Rockwood UK.

 

2.2                              Status of Tianqi HK or Tianqi Listco UK as
Shareholder

 

(a)                                 The parties have negotiated this agreement
on the assumption that Tianqi HK and Tianqi Listco UK will complete the sale and
purchase of the 51% shareholding in Windfield before Completion such that,
immediately following Completion, Tianqi Listco UK and Rockwood UK will be the
only Shareholders.

 

(b)                                 If, contrary to the parties’ assumption,
Tianqi HK is a Shareholder immediately following Completion instead of Tianqi
Listco UK, then:

 

(i)                                    all of the obligations of Tianqi Listco,
Tianqi Listco UK and Tianqi under this agreement (except those under
clauses 3.2, 23, 24 and 29) will instead be obligations of Tianqi Parent,
Tianqi HK and Tianqi Group, respectively; and

 

(ii)                                 neither Tianqi Listco nor Tianqi Listco UK
will be subject to such obligations,

 

until such time as Tianqi Listco UK becomes a Shareholder.

 

2.3                              Elimination of non-voting shares

 

Immediately following Completion, the Shareholders will make such variations to
the rights attached to all non-voting shares in the capital of Windfield as are
necessary to cause those shares to become Shares which rank pari passu with all
other Shares. The Shareholders agree that any such variation(s) to the rights
attaching to such shares will not affect the position that immediately following
such variation(s):

 

(a)                                 Rockwood UK will hold and be able to
exercise voting rights in respect of 49% of the issued share capital of
Windfield; and

 

(b)                                 Tianqi HK or Tianqi Listco UK will hold and
be able to exercise voting rights in respect of 51% of the issued share capital
of Windfield.

 

2.4                              Adoption of Constitution

 

Immediately following Completion, the Shareholders will adopt a constitution
consistent with the terms of this agreement in replacement of the then existing
constitution of Windfield.

 

3                                        Implementation

 

3.1                              Original Shareholders Agreement

 

Tianqi Parent, Tianqi HK, Rockwood UK and Windfield terminate the Original
Shareholders Agreement with effect from the date of this agreement on the basis
that the termination does not affect any accrued rights or remedies of a party
which remain unsatisfied.

 

3.2                              Conditions Precedent

 

(a)                                 Each party must co-operate with each other
party and do all things reasonably necessary to procure that the Conditions
Precedent are fulfilled as soon as reasonably possible, and in any event on or
before the End Date.

 

(b)                                 Without limiting the generality of paragraph
(a), each party must:

 

(i)                                    make all necessary and appropriate
applications and supply all necessary and appropriate information for the
purpose of enabling the Condition Precedents to be fulfilled;

 

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(ii)                                 not withdraw or procure the withdrawal of
any application made or information supplied under paragraph (i) without the
consent of each/the other Shareholder;

 

(iii)                              not take any action that would or would be
likely to prevent or hinder the fulfilment of any Condition Precedent;

 

(iv)                             keep each/the other Shareholder informed of the
status of any discussions or negotiations with any Government Agency in
connection with any Condition Precedent, including by giving each/the other
Shareholder copies (or, in the case of oral communications, details) of any
material communication received from the Government Agency and notifying
each/the other Shareholder on becoming aware of the fulfilment of the Condition
Precedent or of it becoming incapable of being fulfilled; and

 

(v)                                give each/the other Shareholder drafts of any
application or other material communication it intends to send to a Government
Agency in connection with any Condition Precedent, afford the (other)
Shareholder a reasonable opportunity to comment on the draft and give the
(other) Shareholder a final draft of the communication before it is sent.

 

(c)                                 Windfield must not terminate the Acquisition
Agreement on account of a failure to fulfil a Condition Precedent unless each
Shareholder approves the termination.

 

(d)                                Windfield must ensure that no Windfield Group
Entity accepts any condition or gives any undertaking in connection with a
Condition Precedent unless each Shareholder approves the terms of the condition
or undertaking (acting reasonably).

 

(e)                                  If a Shareholder is requested to provide
any commercially sensitive information in connection with any Condition
Precedent, it may require reasonable arrangements to be implemented to protect
the information including by:

 

(i)                                    redacting commercially sensitive
information from any document it gives to another Shareholder or to a Windfield
Group Entity;

 

(ii)                                 giving commercially sensitive information
to a Government Agency directly; or

 

(iii)                              limiting disclosure of commercially sensitive
information to a person’s professional advisors only.

 

(f)                                   A Shareholder is not required to take any
action under this clause 3.2 in connection with a Condition Precedent (including
to accept any condition or give any undertaking or approve a Windfield Group
Entity accepting any condition or giving any undertaking) if it considers
(acting reasonably) that it is against its commercial interests to do so. Each
Shareholder acknowledges that it is not against its commercial interests to
approve the giving by any Windfield Group Entity of undertakings to the
Treasurer of the Commonwealth of Australia which are in substance similar to
those given by Tianqi Parent on 22 November 2012, or to itself give an
undertaking to the Treasurer that it will refrain from taking any action the
purpose of which is to cause that Windfield Group Entity to breach any such
undertakings.

 

3.3                              Break Fees

 

(a)                                 Rockwood UK must pay the Rockwood Break Fee
to Tianqi Parent if:

 

(i)                                  all Conditions Precedent have been
fulfilled or waived (other than those which have not been fulfilled as a result
of a breach by Rockwood UK of its obligations under clause 3.2); and

 

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(ii)                                 (A)                             Rockwood UK
fails to pay any amount when due in accordance with the Acquisition Agreement;
or

 

(B)                             Tianqi Group or Tianqi terminates this agreement
before Completion for a Material Breach by Rockwood UK or the occurrence of a
Rockwood Insolvency Event.

 

(b)                                 Tianqi Group must pay the Tianqi Break Fee
to Rockwood UK if:

 

(i)                                    all Conditions Precedent have been
fulfilled or waived (other than those which have not been fulfilled as a result
of a breach by Tianqi Group or Tianqi of its obligations under clause 3.2); and

 

(ii)                                 Rockwood UK terminates this agreement
before Completion for a Material Breach by Tianqi Group or Tianqi or the
occurrence of a Tianqi Insolvency Event.

 

(c)                                  If a Break Fee becomes payable, it must be
paid in clear funds, without set-off or withholding, within five Business Days
of demand by the party who is entitled to receive it. A Break Fee is only
payable once. The purpose of each Break Fee is to compensate a party for its
costs arising out of, and management time it has devoted to, the negotiation,
preparation and execution of the Transaction Documents and the opportunity costs
it has incurred in pursuing the transactions contemplated by the Transaction
Documents over other alternative transactions.

 

(d)                                 The payment of a Break Fee to a party does
not limit that party’s right to claim reimbursement of losses in excess of the
Break Fee in respect of any breach of a Transaction Document, including for any
costs referred to in paragraph (c).

 

3.4                              Operation prior to Completion

 

Only clauses 1, 15.1(c) and (d), 15.2(c), 23, 24, 27 (except paragraph (a)(i)),
28 and 29 bind the parties prior to Completion.

 

4                                        Business and Management of Windfield

 

4.1                              Scope of business

 

Unless the Shareholders otherwise agree, the business of the Windfield Group
will, following Completion, be limited to the conduct, maintenance, improvement
and extension of the Business.

 

4.2                              Conduct of business

 

Each Shareholder (in so far as it lawfully can do so) must exercise its powers
in relation to Windfield to ensure that each Windfield Group Entity carries on
and conducts the Business and its affairs generally:

 

(a)                                in a proper and efficient manner;

 

(b)                                in compliance with all applicable laws;

 

(c)                                  in accordance with the Transaction
Documents and sound business practice; and

 

(d)                                 so as to give effect to the Budget and
Business Plan.

 

4.3                              General policy determined by the Board

 

(a)                                 The Board is responsible for the overall
direction and control of the management of the Windfield Group, and the
formulation of the policies to be applied in the conduct of the Business.

 

(b)                                 The Board may delegate, on such conditions
as it thinks fit, such day-to-day management powers to Windfield Group
executives as it determines is appropriate from time to time.

 

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4.4                              Executive management

 

(a)                                 Following Completion, the executive
management of the Windfield Group shall include:

 

(i)                                    a chief executive officer (the CEO), who
will report to the Board and, subject to clause 4.3, have such duties as are
normally carried out by the chief executive officer of an Australian mining
group;

 

(ii)                                 a chief financial officer nominated by
Tianqi (the CFO), who will report to the Chief Executive Officer and, subject to
clause 4.3, have such duties as are normally carried out by the chief financial
officer of an Australian mining group; and

 

(iii)                              a commercial manager nominated by Rockwood UK
(the Commercial Manager), who will report to the CEO and, subject to clause 4.3,
be responsible for:

 

(A)                              the preparation of the market strategy for the
Business (including market analysis, competitor analysis, product portfolio
management, pricing and volume) for inclusion, following approval by the CEO, in
each draft Budget and Business Plan to be prepared and submitted to the Board
under clause 9.3(a)(ii);

 

(B)                              (1)                                execution of
the market strategy for the Business included in the Budget and Business Plan;
and

 

(2)                                marketing and promotion of the brands and
products of the Business, negotiation of sales contracts with third parties and
organisation of the order fulfilment process,

 

in each case, subject always to the Budget and Business Plan and relevant Board
policies and delegations.

 

(b)                                 The appointment and any material change to
the terms of employment (including termination) of the CEO will be by decision
of the Board, provided that a Shareholder with a Specified Proportion of 25% or
more may veto any decision by the Board to appoint a person as the CEO by giving
a notice to Windfield within five Business Days of the decision, but only in
circumstances where that Shareholder has formed the view, acting reasonably,
that:

 

(i)                                    the appointment of that person as CEO is
likely to cause harm to the Windfield Group; or

 

(ii)                                 that person is not appropriately qualified,
is not of good character or has a material personal conflict of interest.

 

(c)                                  The Shareholders agree to ensure that, if
he continues to be the chief executive officer of Talison at Completion, the
first CEO will be Lorry Mignacca.

 

(d)                                 Windfield Group executives shall be employed
by Talison Services Pty Ltd (ACN 125 608 684) or such other Windfield Group
Entity as the Board may approve from time to time. All compensation and other
benefits payable to Windfield Group executives will be paid by members of the
Windfield Group.

 

(e)                                  The CEO shall have the power to dismiss the
CFO or the Commercial Manager for cause subject to first consulting with the
Shareholder who nominated him. Otherwise:

 

(i)                                    the CFO may only be dismissed if Tianqi
approves; and

 

(ii)                                 the Commercial Manager may only be
dismissed if Rockwood UK approves.

 

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(f)                                   Tianqi (in the case of the CFO) and
Rockwood UK (in the case of the Commercial Manager) may require the dismissal of
the CFO or the Commercial Manager (as applicable) and the employment of a new
person nominated by it. In this case, Tianqi or Rockwood UK (as applicable) must
indemnify Windfield for all Liabilities incurred by a Windfield Group Entity in
connection with that dismissal other than the payment of accrued leave
entitlements.

 

5                                        Board

 

5.1                              Directors

 

(a)                                 The Board shall comprise four Directors of
which:

 

(i)                                    a Shareholder with a Specified Proportion
of more than 40% is entitled to appoint and replace from time to time two
Directors;

 

(ii)                                 a Shareholder with a Specified Proportion
of between 25% and 40% (inclusive) is entitled to appoint and replace from time
to time one Director; and

 

(iii)                              any remaining vacancies are to be filled by
the Board.

 

A Shareholder with a Specified Proportion of less than 25% is not entitled to
appoint any Directors.

 

(b)                                 While a Shareholder has a Specified
Proportion of more than 50%, it may designate that one of the Directors
appointed by it is the Chairman of the Board. Otherwise, the Chairman of the
Board may be any Director elected by the Board.

 

(c)                                  Subject to the approval of the Shareholder
who appointed him, a Director may appoint an alternate with all the powers and
rights of the Director.

 

(d)                                 Every appointment of a Director under this
clause 5.1 will take effect when a notice of appointment is given by the
appointing Shareholder and a consent to act is given by the appointee to
Windfield and every removal of such a Director will take effect when a notice of
removal is given by the appointing Shareholder to Windfield.

 

(e)                                 If the Specified Proportion of a Shareholder
changes such that the entitlement of that Shareholder to appoint Directors under
this clause 5.1 is reduced or lost, the Shareholders must do all things
necessary, including causing the resignation or removal of Directors (as the
case may be) to ensure that, at all times, the number of Directors reflects the
entitlement of the Shareholder to appoint Directors.

 

(f)                                  A Shareholder may by notice to Windfield
confer some or all of its Specified Proportion on another Shareholder for the
purpose of this clause 5.1 and clause 6.2, in which case the other Shareholder’s
Specified Proportion will be taken to include the amount conferred by the
Shareholder until such time as the Shareholder gives notice to Windfield
revoking the conferral.

 

5.2                              Nominee Directors

 

(a)                                 A Director appointed by a Shareholder may
take into account the interests of the Shareholder and may act on its wishes in
performing any of his duties or exercising any power, right or discretion as a
Director, except in any particular case where no honest and reasonable director
could have formed the view that, in so doing, the Director was acting in good
faith in the best interests of Windfield as a whole.

 

(b)                                 In giving instructions to a Director that it
has appointed, a Shareholder is not required to take into account the interests
of Windfield, the Windfield Group or any other Shareholder.

 

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5.3                              Director’s fees

 

Unless otherwise determined by a Special Majority, no director’s fees shall be
paid by Windfield and a Shareholder must bear all travelling and other expenses
incurred by a Director appointed by it in attending and returning from any Board
meetings and performing his duties as a Director.

 

5.4                              D&O Policy

 

(a)                                 In respect of each Director, Windfield must:

 

(i)                                    to the extent permitted by applicable
law;

 

(ii)                                 so far as is appropriate for a reasonably
prudent company in Windfield’s circumstances; and

 

(iii)                              consistent with generally accepted insurance
industry practices including as to applicable exclusions and conditions,

 

take out and maintain an insurance policy insuring against Liabilities incurred
by the Director in, or arising out of the conduct of the Business or any act or
omission in his capacity as an officer of a Windfield Group Entity while he
remains such an officer and for seven years after he ceases to be such an
officer.

 

(b)                                 A party must not do or permit to be done
anything which prejudices, and immediately rectify anything which might
prejudice, cover under any insurance policy taken out by Windfield pursuant to
paragraph (a).

 

6                                        Board Meetings and Resolutions of
Directors

 

6.1                              Board meetings

 

(a)                                 The Board shall meet at least quarterly.

 

(b)                                 The Chairman of the Board or any two other
Directors may call a Board meeting.

 

(c)                                  Reasonable notice shall be given to each
Director of all Board meetings. Each notice of meeting shall contain, among
other things, an agenda specifying in reasonable detail the matters to be
discussed at the relevant meeting and must be accompanied by any relevant papers
for discussion at that meeting. Unless otherwise agreed by each Director, a
Board meeting may only resolve matters specifically described in the agenda.

 

(d)                                 All Board meetings shall be held in Perth
unless otherwise agreed by each Director.

 

(e)                                  Windfield must use all its reasonable
endeavours to provide video, teleconference or such other communication
facilities so as to enable Directors to attend and participate in a Board
meeting remotely.

 

6.2                              Quorum

 

(a)                                 Subject to paragraph (c), a quorum for a
Board meeting is constituted by the attendance (in person, remotely or by
alternate) of at least two Directors who must include at least one Director
appointed by each Shareholder (if any) who has a Specified Proportion of more
than 40%.

 

(b)                                 No business is to be transacted at a Board
meeting unless a quorum is present.

 

(c)                                  If a quorum is not present within 30
minutes of the time specified in the notice of meeting, the meeting will stand
adjourned to the same day in the following week at the same time and place. If
within 30 minutes after the time appointed for the adjourned meeting a quorum is
not constituted, those Directors present at the adjourned meeting will
constitute quorum for the meeting.

 

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6.3                              Chairman

 

(a)                                 The Chairman of the Board is entitled to
preside at all Board meetings.

 

(b)                                 If the Chairman is not present at a Board
meeting, a Director appointed by the same Shareholder as the Chairman is
entitled to preside at the meeting, failing which those Directors present may
appoint one of their number to preside at the meeting.

 

6.4                              Voting entitlements

 

(a)                                 Each Director who is entitled to vote on a
resolution:

 

(i)                                    has one vote on that resolution;

 

(ii)                                 if that Director is present at a Board
meeting, an additional vote for any other Director who is appointed by the same
Shareholder who:

 

(A)                              is unable to vote on one or more resolutions or
who is not present at the Board meeting; and

 

(B)                              is either not represented by an alternate
Director or is represented by an alternate Director who is present, but that
alternate Director is unable to vote on one or more resolutions; and

 

(iii)                              if that Director is present at a Board
meeting, an additional vote for any vacant Directorship who the same Shareholder
is entitled to fill by appointment.

 

(b)                                 In the case of an equality of votes, the
Chairman of the Board (or any Director presiding at a Board meeting in his
place) has an additional casting vote.

 

(c)                                  Subject only to any applicable law to the
contrary, a Director is entitled to vote on any resolution or matter coming
before the Board.

 

6.5                              Voting thresholds; Special Majority Matters

 

(a)                                A decision by the Board in respect of any
matter (other than a Special Majority Matter) requires the approval of a Simple
Majority of the votes cast on the matter.

 

(b)                                A decision by the Board in respect of a
Special Majority Matter requires the approval of a Special Majority of the votes
cast on the matter.

 

(c)                                  A Special Majority Matter may not be
implemented without Board approval. Where a Special Majority Matter requires
shareholder approval under applicable law in order to be implemented, that
matter must not be submitted to Shareholders for approval unless it has first
been approved by the Board.

 

6.6                              Circular resolutions

 

Provided that notice has been given to all Directors, a written resolution
signed (including in counterparts) by such number of Directors who are entitled
to vote on the resolution as would together constitute:

 

(a)                                 quorum for a Board meeting;

 

(b)                                 in respect of any matter (other than a
Special Majority Matter), a Simple Majority of a Board meeting at which all
Directors are present; and

 

(c)                                  in respect of a Special Majority Matter, a
Special Majority of a Board meeting at which all Directors are present,

 

shall be as effective as a resolution passed at a Board meeting.

 

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7                                        Composition of boards of other
Windfield Group Entities

 

The composition of the boards of directors of Windfield Group Entities (other
than Windfield) after Completion shall:

 

(a)                                 be determined by Special Majority; or

 

(b)                                 if no decision is made prior to the date for
notification of directors under the Acquisition Agreement, comprise the
Directors,

 

and, except to the extent determined by Special Majority, clauses 5 and 6 shall
otherwise apply in respect of the affairs of each Windfield Group Entity (other
than Windfield) as if all references to ‘Board’ were to the board directors of
such Windfield Group Entity and all references to ‘Windfield’ were to such
Windfield Group Entity.

 

8                                       Deadlock

 

(a)                                 A Deadlock will occur if a Board resolution
to approve a Special Majority Matter is voted on by Directors but not adopted,
and Shareholders who appointed the Directors who voted to approve the proposal
give notice (a Deadlock Notice) within one month of that vote being held that
they wish to invoke the Deadlock procedures in this clause 8.

 

(b)                                 If the Deadlock procedures are invoked, the
Shareholders must consult in good faith for one month from the date the Deadlock
Notice is given with a view to reaching agreement on whether the proposal that
was the subject of the Board resolution should be implemented.

 

(c)                                  If the Deadlock procedures are invoked at
the end of the one month period after the Deadlock Notice has been given, a
Board resolution:

 

(i)                                    to adopt the proposal (whether in its
original form or as modified); or

 

(ii)                                 confirming that the proposal should not be
adopted,

 

has not been passed by a Special Majority, any Shareholder may give a notice (a
Deadlock Transfer Notice) to each other Shareholder, with a copy to Windfield,
in which it offers to sell all of its Shares and Shareholder Debt for Fair
Market Value. The procedures which apply in respect of a Deadlock Transfer
Notice shall be the same as those which apply to a Transfer Notice under
clauses 19.2 and 19.3 except that the Deadlock Transfer Notice will not contain
details of any Third Party Offer or trigger a Tag-along and the Transfer Assets
will comprise all of the Shareholder’s Shares and Shareholder Debt.

 

If acceptances are not received in respect of all of the Shares and Shareholder
Debt the subject of the Deadlock Transfer Notice, then the Shareholder who gave
the Deadlock Transfer Notice may, within one month after the expiry of the
notice period applying to the Deadlock Transfer Notice, give a notice to the
other Shareholders requiring that Windfield be wound up, following which the
Shareholders must take all necessary steps to wind up Windfield promptly (the
costs for which shall be borne by the Shareholders in their Specified
Proportions).

 

9                                        Financial Matters and Information

 

9.1                              Financial year

 

(a)                                 Each financial year of Windfield (other than
its first financial year which commenced on the date of its incorporation and
ended on 31 December 2013) shall commence on 1 January and end on 31 December.

 

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(b)                                 Windfield must use all its reasonable
endeavours to cause each other Windfield Group Entity to adopt a
31 December financial year-end (to the extent it has not already done so).

 

9.2                              Accounting principles

 

Windfield must:

 

(a)                                 cause written financial records to be kept
that correctly record and explain the transactions and financial position and
performance of the Windfield Group;

 

(b)                                 ensure that each financial statement
provided under clause 9.4(b):

 

(i)                                    complies with:

 

(A)                              IFRS, except to the extent disclosed in
them; and

 

(B)                              all applicable laws; and

 

(ii)                                 gives a true and fair view of the
consolidated financial position and performance of Windfield, at the date, and
for the period ending on the date, to which that statement is prepared.

 

9.3                              Budget and Business Plan

 

(a)                                 From Completion:

 

(i)                                    in respect of the then current financial
year, the then current budget and business plan of the Windfield Group will
apply as the Budget and Business Plan, subject to any modifications recommended
by the CEO and approved by the Board; and

 

(ii)                                 in respect of each financial year
thereafter, following timely consultation in good faith with each Shareholder,
the CEO shall cause a draft Budget and Business Plan, which conforms with good
corporate practice expected of an equivalent-sized Australian mining group, to
be prepared and submit it to the Board with his recommendation that it be
approved, in sufficient time so that it may be approved at least one month
before the commencement of that financial year.

 

(b)                                 Each Budget and Business Plan must:

 

(i)                                    accommodate the performance by each
relevant Windfield Group Entity of its obligations under the Transaction
Documents; and

 

(ii)                                 provide for Windfield Group employee and
contractor compensation, benefits and bonuses that are consistent with the
performance of the Business and market rates.

 

(c)                                  Subject to paragraph (e), the Board may
approve a draft Budget and Business Plan with or without amendment. Approval of
a Budget and Business Plan constitutes authority for the CEO to undertake all
relevant action and incur all approved expenditure contemplated by it, subject
to compliance with any condition of that approval.  Nothing in the Budget or
Business Plan will limit the operation of clause 4.3.

 

(d)                                 Board approval is required for each of the
following:

 

(i)                                    approval of a Budget and Business Plan,
or any material change to it;

 

(ii)                                 capital expenditure by a Windfield Group
Entity in any financial year if at the time aggregate capital expenditure by all
Windfield Group Entities in that year, not contemplated by the Budget and
Business Plan, has exceeded 10% of aggregate capital expenditure contemplated by
the Budget and Business Plan for that year (exclusive of GST); and

 

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(iii)                              operational expenditure by a Windfield Group
Entity in any financial year if at the time aggregate operational expenditure by
all Windfield Group Entities in that year, not contemplated by the Budget and
Business Plan, has exceeded 10% of aggregate operational expenditure
contemplated by the Budget and Business Plan for that year (exclusive of GST).

 

(e)                                  A Shareholder with a Specified Proportion
of 25% or more may veto any decision by the Board to approve any of the matters
referred to in paragraph (d) by giving a notice to each other Shareholder,
copied to Windfield, within five Business Days of the decision, but only in
circumstances where that Shareholder has formed the view, acting reasonably,
that implementation of the decision will or is likely to bring about a
fundamental change in the nature, operations or gearing of the Business, or
commencement of a new business, or if capital or operating expenditure is
significantly greater than that required in the ordinary course of the Business.
The veto may be applied in full or in part. If the veto is applied in part,
those aspects that are not vetoed may be implemented.

 

(f)                                   If in respect of any financial year, a
Budget and Business Plan is not approved, the Budget and Business Plan that was
last approved, adjusted for inflation, shall apply until a new Budget and
Business Plan is approved.

 

9.4                              Information

 

Windfield must provide to each Shareholder as soon as practicable:

 

(a)                                 after it is approved by the Board, each
Budget and Business Plan and any material modifications to it;

 

(b)                                 and in any event not later than four months
after the end of each financial year, the audited consolidated accounts of
Windfield in respect of that financial year;

 

(c)                                  and in any event not later than one month
after the end of each quarter of a financial year, unaudited management accounts
of the Windfield Group which must include detailed statements of financial
performance, financial position and cash-flow, details of any variances from the
Budget and Business Plan and such other financial information as the Board may
determine from time to time;

 

(d)                                 copies of all information and reports
provided by any Windfield Group Entity to:

 

(i)                                    its debt financiers (or prospective debt
financiers) or any securities exchange on which it listed; or

 

(ii)                                 any Government Agency, other than
information and reports of a routine nature incidental the Business;

 

(e)                                 any additional financial information the
Shareholder may reasonably request for the purpose of enabling the Shareholder
to reconcile any financial information of the Windfield Group to the accounting
principles and practices to which it is subject, but on the basis that no
Windfield Group Entity will be required to give any representations concerning
the accuracy of any such reconciliation; and

 

(f)                                  any other information the Shareholder may
reasonably require from time to time (subject to there being no unreasonable
prejudice to the day-to-day business operations of the Windfield Group in
providing such information).

 

9.5                              Shareholder financial audit

 

(a)                                 Windfield must, subject to a Shareholder
giving reasonable notice to Windfield, give that Shareholder and its employees,
auditors and advisers such access to the financial

 

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records and premises of any member of the Windfield Group as the Shareholder
reasonably requires for the purpose of the Shareholder satisfying its financial
or other reporting or compliance requirements under any law applicable to the
Shareholder, or satisfying the requirement of any Governmental Agency in respect
of such Shareholder.

 

(b)                                 A Shareholder may also (at its cost) employ
a person to assist it with its reporting and compliance requirements in respect
of its investment in the Windfield group, and such person will be allowed such
access on Business Days to the financial records and premises of the members of
the Windfield Group as the Shareholder reasonably requires for the purpose
referred to in paragraph (a) above, and will be provided with office
accommodation and reasonable administrative assistance by the Windfield Group.

 

9.6                              US tax election

 

The Windfield Group Entities must make any elections regarding entity status
under United States Treasury Regulation section 301.7701-3 and any other United
States federal, state and local income tax elections as directed by Rockwood UK.

 

10                                 Distribution Policy

 

Subject to:

 

(a)                                 any applicable law;

 

(b)                                 any contrary agreement between the
Shareholders;

 

(i)                                    any restrictions imposed by any external
financing arrangements entered into by a Windfield Group Entity; and

 

(ii)                                 the appropriation of reasonable reserves
for the working capital requirements of the Windfield Group,

 

Windfield must distribute all available cash and cash equivalents of the
Windfield Group either in the form of dividends or the pro rata repayment of
outstanding Shareholder Debt at least annually and in the most reasonably
practicable tax efficient manner.

 

11                                 Shareholder Activities

 

Subject to any express restrictions in the Transaction Documents, each
Shareholder acknowledges that each other Shareholder and its related bodies
corporate may engage directly or indirectly in activities which are or may be
competitive with the business of the Windfield Group.

 

12                                 Compliance Policies

 

12.1                       Anti-corruption and sanctions

 

(a)                                 Windfield must ensure that no Windfield
Group Entity and no person who performs services for or on behalf of a Windfield
Group Entity engages in any activity or conduct that has or will result in a
violation of:

 

(i)                                    any Anti-Corruption Laws; or

 

(ii)                                 any applicable laws relating to economic or
trade sanctions.

 

(b)                                 Windfield must adopt and maintain adequate
procedures for the Windfield Group to ensure compliance with its obligations
under paragraph (a), including the prevention of bribery within the meaning of
section 7(3) of the Bribery Act 2010 (UK) and any equivalent provision of any
other Anti-Corruption Law by any person who performs services for or on behalf
of any Windfield Group Entity.

 

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(c)                                  The procedures referred to in
paragraph (b) shall be in accordance with any official guidance published from
time to time pursuant to any Anti-Corruption Law or applicable laws relating to
economic or trade sanctions.

 

12.2                       Other compliance policies

 

If a Shareholder or the holding company of a Shareholder is required by its
applicable law (including applicable securities laws and regulations), or the
requirements of any recognised securities exchange which apply to it, to ensure
that Windfield establishes any internal regulatory and compliance policies and
procedures in addition to those referred to in clause 12.1(b), Windfield must
take all reasonable steps to establish such policies and procedures as are
requested by that Shareholder.

 

13                                 Additional Funding

 

(a)                                 Unless otherwise agreed by it, a Shareholder
has no obligation to provide any capital to Windfield or to give any guarantee
or indemnity in respect of the liabilities of any Windfield Group Entity.

 

(b)                                 Windfield’s ongoing funding requirements
shall be determined by the Board from time to time, provided that:

 

(i)                                    each Shareholder will be given a
reasonable opportunity to participate in any further debt or equity fundraising
in proportion to its Specified Proportion; and

 

(ii)                                 such further fundraisings will, insofar as
is reasonably practicable, be structured to be tax effective for each
Shareholder.

 

(c)                                  Each Shareholder acknowledges that it may
have its Specified Proportion reduced if it does not participate in any proposed
equity fundraising (or any debt fundraising involving the issue of securities
convertible into equity).

 

14                                 Non-solicitation of Windfield Group Employees

 

A Shareholder must not (and must ensure that none of its related bodies
corporate) agree to employ any person (or enter into any other arrangement which
is materially similar to an employment relationship):

 

(a)                                 while he is employed by any Windfield Group
Entity; and

 

(b)                                 for up to one year after he ceases to be
employed by any Windfield Group Entity,

 

without the approval of the Board.

 

15                                 Lithium Distribution and Off-take
Arrangements

 

15.1                       Technical grade lithium

 

(a)                                 Tianqi Parent must or, at its election, must
cause one of Tianqi Listco or a related body corporate of Tianqi Parent or
Tianqi Listco to enter into, and the parties must procure that Talison Lithium
Australia enters into, a distribution agreement substantially in the form set
out in Schedule 5 for the exclusive supply and distribution of technical-grade
lithium concentrates within the PRC, Hong Kong and Taiwan with effect from
Completion (the Tianqi Technical Grade Distribution Agreement).

 

(b)                                 Rockwood UK must or, at its election, must
cause one of its related bodies corporate to enter into, and the parties must
procure that Talison Lithium Australia enters into, a distribution agreement
substantially in the form set out in Schedule 5 for the exclusive supply and
distribution of technical-grade lithium concentrates outside the PRC, Hong

 

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Kong and Taiwan with effect from Completion (Rockwood Technical Grade
Distribution Agreement).

 

(c)                                  During the period between execution of this
Agreement and Completion, Tianqi Listco UK and Rockwood UK:

 

(i)                                    acknowledge that the distribution
arrangements for technical grade products between Talison Lithium Australia and
Tianqi Parent, Tianqi Listco and/or any of their related bodies corporate or
third parties shall continue in full force and effect; and

 

(ii)                                 agree that:

 

(A)                              such replacement distribution arrangements for
technical grade products as may be required may be entered into between Talison
Lithium Australia and Tianqi Parent, Tianqi Listco and/or any of their related
bodies corporate or third parties on the same material terms and conditions as
currently exist between Talison Lithium Australia and such entities, but not for
a period of more than 6 months, unless otherwise agreed between Tianqi Listco UK
and Rockwood UK;

 

(B)                              Talison Lithium Australia must not enter into
any new distribution agreements for technical grade products; and

 

(C)                              Talison Lithium Australia may enter into new
sales contracts, new short term orders or delivery arrangements for technical
grade products, provided that the aggregate volume of such products does not
exceed the budgeted volume by more than 10% for the first half of 2014.

 

(d)                                 During the period between execution of this
Agreement and Completion, Tianqi Group and Rockwood UK will use all reasonable
endeavours to transition any customer relationships in respect of technical
grade products.

 

(e)                                  On Completion, Tianqi Listco UK and
Rockwood UK must procure that Talison Lithium Australia, and Tianqi Listco UK
must (and must procure that Tianqi Parent, Tianqi Listco and their related
bodies corporate), terminate any arrangements contemplated by paragraph (c) that
are between Talison Lithium Australia and Tianqi Parent, Tianqi Listco or any of
their related bodies corporate. Any arrangements between Talison Lithium
Australia and third parties contemplated under paragraph (c) shall continue in
effect and expire in accordance with their terms.

 

15.2                       Chemical-grade lithium

 

(a)                                 Tianqi Parent must or, at its election, must
cause one of Tianqi Listco or a related body corporate of Tianqi Parent or
Tianqi Listco to enter into, and the parties must procure that Talison Lithium
Australia enters into, an agreement substantially in the form set out in
Schedule 4 for the supply of chemical-grade lithium concentrates with effect
from Completion (the Tianqi Chemical Grade Off-take Agreement).

 

(b)                                 Rockwood UK (or one of its related bodies
corporate) must enter into, and the parties must procure that Talison Lithium
Australia enters into, an agreement substantially in the form set out in
Schedule 4 for the supply of chemical-grade lithium concentrates with effect
from Completion (Rockwood Chemical Grade Off-take Agreement).

 

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(c)                                  During the period between execution of this
Agreement and Completion, Tianqi Listco UK and Rockwood UK:

 

(i)                                    acknowledge that any sales contracts
entered into between Talison Lithium Australia and Tianqi Parent, Tianqi Listco
and/or any of their related bodies corporate) or third parties shall continue in
full force and effect; and

 

(ii)                                 agree that Talison Lithium Australia shall
be entitled to enter into sales contracts in respect of any chemical grade
lithium concentrates with Tianqi Parent, Tianqi Listco and/or their related
bodies corporate or third parties on the same material terms and conditions as
currently exist between Talison Lithium Australia and such purchasing entities,
but for no longer than terms of six months unless otherwise agreed between
Tianqi Listco UK and Rockwood UK.

 

(d)                                 On Completion, Tianqi Listco UK and
Rockwood UK must procure that Talison Lithium Australia, and Tianqi Listco UK
must (and must procure that Tianqi Parent, Tianqi Listco and their related
bodies corporate), terminate any arrangements contemplated by this paragraph
(c) that are between Talison Lithium Australia and Tianqi Parent, Tianqi Listco
or any of their related bodies corporate. Any arrangements between Talison
Lithium Australia and third parties shall continue in effect and expire in
accordance with their term.

 

16                                 Transfer of Shares and Shareholder Debt

 

16.1                       Restriction on Transfer

 

After Completion, a Shareholder must not Transfer any Shares or Shareholder Debt
unless the Transfer is:

 

(a)                                to a wholly-owned subsidiary of its ultimate
holding company in accordance with clause 17;

 

(b)                                in the case of Tianqi HK (notwithstanding the
assumption in clause 2.2(a)), to Tianqi Listco UK or another wholly-owned
subsidiary of Tianqi Listco in accordance with clause 18;

 

(c)                                  to a Remaining Shareholder or Offeror in
accordance with clause 19;

 

(d)                                 required in connection with a Change of
Control, Material Breach or Insolvency Event of a Shareholder in accordance with
clause 20; or

 

(e)                                  to another Shareholder in accordance with
clause 8(c) a result of acceptance by that Shareholder of an offer in a Deadlock
Transfer Notice,

 

but in each case subject to any applicable requirements in clause 21 (including
the requirement in clause 21.6 that the Transferee, unless they are an existing
Shareholder, enters into a Deed of Accession and a Deed of Cross Security).

 

16.2                       Prohibition on Transfers to third parties in first 12
months

 

Despite clause 16.1(c), a Shareholder must not Transfer any Shares or
Shareholder Debt in reliance on that clause 16.1(c) until the first anniversary
of the date Completion occurs.

 

17                                 Permitted Transfers to Certain Related Bodies
Corporate

 

(a)                                 A Shareholder (the Related Transferor) may
Transfer any of its Shares and any Shareholder Debt to a wholly-owned subsidiary
of its ultimate holding company (the Related Transferee).

 

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(b)                                 Notwithstanding clause 27(a)(i), the Related
Transferor (but not a Related Transferor in any subsequent transfer pursuant to
this clause 17) shall remain a party with joint and several liability for the
obligations of the Related Transferee (and any subsequent Related Transferee)
until such time as all Related Transferees have ceased to be a party.

 

18                                 Permitted Transfer to Tianqi Listco UK

 

(a)                                Tianqi HK may Transfer any of its Shares and
any Shareholder Debt to Tianqi Listco UK or another wholly-owned subsidiary of
Tianqi Listco (Tianqi Listco Sub).

 

(b)                                If Tianqi HK Transfers all of its Shares to
Tianqi Listco UK then, subject to Tianqi Listco UK entering into a Deed of Cross
Security, Tianqi Listco is substituted for Tianqi Parent and Tianqi Listco UK is
substituted for Tianqi HK under this agreement.

 

(c)                                  If Tianqi HK Transfers all of its Shares to
a Tianqi Listco Sub then, subject to Tianqi Listco and the Tianqi Listco Sub
entering into a Deed of Accession and the Tianqi Listco Sub entering into a Deed
of Cross Security, Tianqi Listco is substituted for Tianqi Parent and the Tianqi
Listco Sub is substituted for Tianqi HK under this agreement.

 

19                                 Right of First Refusal

 

19.1                       Third Party Offer

 

Where a Shareholder (the Transferring Shareholder) has received a bona fide
arm’s-length offer from a third party (the Offeror) for any of its Shares (the
Transfer Shares) and any Shareholder Debt (the Transfer Debt and, together with
the Transfer Shares, the Transfer Assets), and that offer (the Third Party
Offer):

 

(a)                                 is irrevocable and unconditional except for
any Permitted Regulatory Condition;

 

(b)                                 states a cash price for the Transfer Assets;

 

(c)                                  contains all material terms and conditions
(including the price, intended completion date and Permitted Regulatory
Conditions); and

 

(d)                                 if the Specified Proportion of the Offeror
following the Transfer to it of all Shares which are then the subject of
outstanding Third Party Offers by it would exceed 75% or if the Transfer Shares
alone represent a Specified Proportion of 25% or more, includes an offer to
acquire all the Shares and any Shareholder Debt of the other Shareholder (the
Remaining Shareholder) at the same price as and on no less favourable terms than
those which apply in respect of the Transfer Assets (a Tag-along),

 

the Transferring Shareholder may accept that Third Party Offer, but only after
complying with the requirements of this clause 19.

 

19.2                       Issue of Transfer Notice to the Remaining
Shareholders

 

If the Transferring Shareholder determines that it wishes to accept the Third
Party Offer, it must give a notice (the Transfer Notice) to each Remaining
Shareholder, copied to Windfield, containing details of the Third Party Offer
(including the name of the Offeror, the cash price offered for the Transfer
Assets and all material terms and conditions) and upon giving the Transfer
Notice, the Transferring Shareholder is deemed to:

 

(a)                                 make an offer to sell the Transfer Assets to
each Remaining Shareholder (the Transfer Offer) at the same cash price as and on
no less favourable terms than those set out in the Third Party Offer; and

 

24

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(b)                                 provide confirmation that:

 

(i)                                    Windfield is the agent of the
Transferring Shareholder for the sale of the Transfer Assets; and

 

(ii)                                 the Remaining Shareholders may elect to
proceed in accordance with one of the options in clause 19.3.

 

19.3                       Choices open to the Remaining Shareholders

 

A Remaining Shareholder who is given a Transfer Notice may do one of the
following.

 

(a)                                 Accept the Transfer Offer

 

(i)                                    If a Remaining Shareholder wishes to
accept the Transfer Offer, it must give a notice (an Acceptance Notice) to the
Transferring Shareholder within 20 Business Days after the date the Transfer
Notice is given (the Closing Date), copied to Windfield, confirming its
acceptance of the Transfer Offer.

 

(ii)                                 A Remaining Shareholder may only accept a
Transfer Offer in respect of all of the Transfer Assets. If there is more than
one Remaining Shareholder who has given an Acceptance Notice in respect of a
Transfer Offer, each such Remaining Shareholder will be deemed to have accepted
the Transfer Offer in respect of that proportion of the Transfer Assets which
the number of Shares for the time being held by that Remaining Shareholder bears
to the total number of Shares held by the Remaining Shareholders who have given
an Acceptance Notice.

 

(iii)                              If a Remaining Shareholder does not wish to
accept the Transfer Offer, it may either give a notice to the Transferring
Shareholder, copied to Windfield, by the Closing Date declining the Transfer
Offer or do nothing in which case it will, on the Closing Date, be deemed to
have declined the Transfer Offer.

 

(iv)                             Within three Business Days after the Closing
Date, the Transferring Shareholder must notify Windfield of the names and
addresses of the Remaining Shareholders which have agreed to buy Transfer Assets
and the amount of Transfer Assets each Remaining Shareholder has agreed to buy
and notify each Remaining Shareholder of the amount of Transfer Assets it has
agreed to buy.

 

(v)                                If no Acceptance Notices are given to the
Transferring Shareholder, then no earlier than five Business Days after the
Closing Date the Transferring Shareholder is, subject to clause 19.4, free to
accept the Third Party Offer and sell all the Transfer Assets to the Offeror at
the same price as and on no more favourable terms than those set out in the
Third Party Offer, provided that such sale must be completed within three months
after the Closing Date (or such longer period which is necessary to satisfy any
Permitted Regulatory Condition to which such sale is subject, but in any event
no later than six months after the Closing Date).

 

(b)                                 Tag-along

 

(i)                                    If the Third Party Offer includes a
Tag-along and the Remaining Shareholder wishes to accept the Tag-along it may
give a notice (the Tag-along Notice) to the Transferring Shareholder by the
Closing Date, copied to Windfield, electing to sell all of its Shares (the
Tag-along Shares) and any Shareholder Debt (the Tag-along Debt and together with
the Tag-along Shares, the Tag-along Assets) to the Offeror, at the same cash
price as and on no less favourable terms than those contained in the Third Party
Offer.

 

25

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(ii)                                 The Transferring Shareholder is then
prohibited from selling the Transfer Assets to the Offeror unless the Offeror
agrees to purchase the Tag-along Assets at the same time, at the same cash price
as and on no less favourable terms than those contained in the Third Party
Offer.

 

19.4                       Drag-along

 

Subject to the right of the Remaining Shareholder to exercise their right of
first refusal under clause 19.3(a), if the Specified Proportion of the Offeror
following the Transfer to it of all Shares which are then the subject of
outstanding Third Party Offers by it would exceed 75%, then within three
Business Days of the date on which the Transferring Shareholder accepts the
Third Party Offer, the Transferring Shareholder may give a notice (the
Drag-along Notice) to the Remaining Shareholder requiring it to sell to the
Offeror on the terms of the Third Party Offer all (but not some only) of their
Shares (the Drag-along Shares) and any Shareholder Debt (the Drag-along Debt and
together with the Drag-along Shares the Drag-along Assets).

 

20                                 Transfer on Event of Default

 

20.1                       Event of Default

 

If:

 

(a)                                 a Change of Control occurs in respect of a
Shareholder without the prior consent of the other Shareholders;

 

(b)                                 a Shareholder commits a Material Breach that
remains unremedied one month after Windfield or another Shareholder gives it
notice of the breach; or

 

(c)                                  an Insolvency Event occurs in respect of a
Shareholder,

 

the relevant Shareholder (the Defaulting Shareholder) has committed an Event of
Default and must notify the other Shareholders (the Non-defaulting Shareholders)
immediately.

 

20.2                       Default Notice

 

(a)                                 Following an Event of Default, any
Non-defaulting Shareholder may give notice (a Default Notice) within one month
of it becoming aware of the Event of Default, in which case the Defaulting
Shareholder will be deemed to have offered to sell all of the Defaulting
Shareholder’s Shares (the Sale Shares) and any Shareholder Debt (the Sale Debt
and together with the Sale Shares, the Sale Assets) to each Non-defaulting
Shareholder, at the price referred to in clause 20.3 and subject to the
satisfaction or waiver of any Permitted Regulatory Condition set out in the
Default Notice.

 

(b)                                 If a Non-defaulting Shareholder wishes to
accept the offer, it must give a notice to all other Shareholders within one
month after the date the Default Notice is given, copied to Windfield,
confirming its acceptance of the offer.

 

(c)                                  A Non-defaulting Shareholder may only
accept the offer in respect of all of the Sale Assets. If there is more than one
Non-defaulting Shareholder who has accepted the offer, each such Non-defaulting
Shareholder will be deemed to have accepted the offer in respect of that
proportion of the Sale Assets which the number of Shares for the time being held
by that Non-defaulting Shareholder bears to the total number of Shares held by
the Non-defaulting Shareholders who have accepted the offer.

 

(d)                                 The sale and purchase of any Sale Assets
shall be made on the terms set out in clause 21.

 

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20.3                       Price

 

The price at which a Non-defaulting Shareholder is entitled to buy Sale Assets
is:

 

(a)                                 in the case of a Material Breach, an amount
equal to 90% of their Fair Market Value; and

 

(b)                                 in all other cases, an amount equal to their
Fair Market Value,

 

as determined in accordance with clause 20.4, less reasonable external fees and
expenses incurred by the Non-defaulting Shareholder in enforcing its rights
under this clause 21.

 

20.4                       Determination of Fair Market Value

 

(a)                                 The Shareholders shall have one month from
the date of the Default Notice to come to an agreement on the Fair Market Value
of the Sale Assets. If the Shareholders are unable to reach an agreement within
that time (or such other period as the Shareholders may agree), Windfield must
appoint an Independent Expert to value the Sale Assets.

 

(b)                                 The Independent Expert will be selected by
agreement between the Shareholders or, failing agreement between them within
five Business Days after they commence to discuss the selection of that
Independent Expert, by the President of The Institute of Arbitrators & Mediators
Australia.

 

(c)                                  Windfield must instruct the Independent
Expert to determine the Fair Market Value of the Sale Assets within one month of
his appointment.

 

(d)                                 The parties must supply the Independent
Expert with any information, assistance and co-operation which he may reasonably
request in connection with his determination, subject to such confidentiality
obligations as a disclosing party may consider appropriate.

 

(e)                                  The fees and expenses of the Independent
Expert will be borne by the Defaulting Shareholder.

 

(f)                                   The Independent Expert will act as an
expert and not as an arbitrator and his decision will, in the absence of
manifest error, be final and binding on the Shareholders and not subject to
review.

 

21                                Terms and Consequences of Transfers of Shares

 

21.1                       Definitions

 

In this clause 21:

 

(a)                                 Buyer means in the case of:

 

(i)                                    clause 8, if one or more Acceptance
Notices are given, each Remaining Shareholder buying Transfer Assets; or

 

(ii)                                 clause 19:

 

(A)                              if one or more Acceptance Notices are given,
each Remaining Shareholder buying Transfer Assets; or

 

(B)                              if a Tag-along Notice or a Drag-along Notice is
given, the Offeror; and

 

(iii)                              clause 20, a Non-defaulting Shareholder
electing to buy Sale Assets;

 

(b)                                 Relevant Assets means in the case of:

 

(i)                                    clause 8, all the Shares and any
Shareholder Debt of the Shareholder who gave the Deadlock Transfer Notice;

 

(ii)                                 clause 19, the Transfer Assets, the
Drag-along Assets or the Tag-along Assets; and

 

27

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(iii)                              clause 20, the Sale Assets;

 

(c)                                 Relevant Notice means in the case of:

 

(i)                                    clause 8, the Deadlock Transfer Notice;

 

(ii)                                 clause 19, the Transfer Notice; and

 

(iii)                              clause 20, the Default Notice;

 

(d)                                Relevant Time means in the case of:

 

(i)                                    clause 8, the date the Fair Market Value
is determined in accordance with clause 20.4;

 

(ii)                                 clause 19, the date the last Acceptance
Notice is given or, in the case of Drag-along Assets, the date the Drag-along
Notice is given or, in the case of Tag-along Assets, the date the Tag-along
Notice is given; and

 

(iii)                              clause 20, the date the Fair Market Value is
determined in accordance with clause 20.4; and

 

(e)                                  Selling Shareholder means in the case of:

 

(i)                                    clause 8, the Shareholder who gave the
Deadlock Transfer Notice;

 

(ii)                                 clause 19, the Transferring Shareholder
and, if a Tag-along Notice or Drag-along Notice is given, the Remaining
Shareholder; and

 

(iii)                              clause 20, the Defaulting Shareholder.

 

21.2                       Completion of certain Transfers

 

(a)                                 Any Transfer of Relevant Assets made under
the provisions of clauses 8, 19 and 20 shall be made in accordance with this
clause 21.2 and, in the case of a Transfer by a Transferring Shareholder or a
Remaining Shareholder to an Offeror, on terms agreed with the Offeror to the
extent those terms are not inconsistent with this clause 21.2.

 

(b)                                 The Selling Shareholder and the Buyer may
request the addition of any necessary Permitted Regulatory Conditions or
adjustments to existing Permitted Regulatory Conditions, but only to the extent
necessary to be able to complete the transfer of the Relevant Assets. Each of
the Selling Shareholder and the Buyer must use all its reasonable endeavours to
ensure the satisfaction of any Permitted Regulatory Condition applying to it as
soon as possible.

 

(c)                                  If any Permitted Regulatory Condition is
not satisfied or waived within six months after the Relevant Notice is given,
then the Relevant Notice lapses. If the Relevant Notice is a Transfer Notice,
then the Transfer Assets may be Transferred to the Offeror.

 

(d)                                 Completion of the transfer of the Relevant
Assets shall take place 10 Business Days after the Relevant Time or the date of
satisfaction or waiver of all Permitted Regulatory Conditions (whichever is the
later) (the Transfer Date) and at such reasonable time and place as the Selling
Shareholder and the Buyer agree or, failing agreement, at 11am (Perth time) at
the registered office of Windfield.

 

(e)                                  On or before the Transfer Date, the Selling
Shareholder must deliver to the Buyer in respect of the Relevant Assets:

 

(i)                                    duly executed instruments for transfer of
the Relevant Assets;

 

(ii)                                 any relevant share certificates (or provide
an express indemnity in a form satisfactory to the Buyer in the case of any
certificate found to be missing); and

 

28

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(iii)                              a power of attorney in such form and in
favour of such person as the Buyer may nominate to enable the Buyer to exercise
all rights of ownership including voting rights.

 

(f)                                   Against delivery of the documents referred
to in paragraph (e), the Buyer shall pay the total consideration due for the
Relevant Assets to the Selling Shareholder on the Transfer Date.

 

(g)                                  In the case of a Transfer of Relevant
Assets following an Event of Default under clause 21.1, upon performing its
obligations under paragraph (e), Tianqi will be discharged from all its
obligations under this agreement (including all accrued obligations) other than
clause 23.

 

21.3                       Failure to Transfer

 

If a Selling Shareholder fails or refuses to comply with its obligations to
transfer Relevant Assets on or before the Transfer Date for a reason other than
a failure to satisfy a Permitted Regulatory Condition:

 

(a)                                 Windfield may receive the purchase money in
trust for such Selling Shareholder (without any obligation to pay interest) and
cause a Buyer to be registered as the holder of the Relevant Assets being sold
(once any appropriate stamp duty has been paid). The receipt by Windfield of the
purchase money shall be a good discharge to a Buyer (who shall not be bound to
see to the application of those moneys). After a Buyer has been registered as
holder of the Relevant Assets being sold in exercise of these powers:

 

(i)                                    the validity of the transfer shall not be
questioned by any person; and

 

(ii)                                 the Selling Shareholder shall surrender its
share certificates (or an express indemnity in a form satisfactory to the Buyer
in the case of any certificate found to be missing) for the Relevant Assets to
Windfield and, on surrender, be entitled to the purchase money for the Relevant
Assets; and

 

(b)                                 the Selling Shareholder must not exercise
any of its powers or rights in relation to management of, and participation in
the profits of, Windfield under this Agreement, the Constitution or otherwise.

 

21.4                       Transfer terms

 

Any Transfer of Relevant Assets under this clause 21 shall be on terms that
those Relevant Assets:

 

(a)                                 are transferred free from all Security
Interests (other than those created under this agreement and the Constitution);
and

 

(b)                                 are transferred with the benefit of all
rights attaching to them as at the date of the relevant transfer,

 

and, if requested by the Buyer, on customary warranties by the Selling
Shareholder as to its capacity to Transfer, and its title to, the Relevant
Assets.

 

21.5                       Registration

 

Windfield must not approve a Transfer of Shares for registration unless this
agreement and the Constitution have been complied with. Any Transfer of Shares
which does not comply with this agreement and the Constitution is invalid.

 

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21.6                       Deed of Accession and Deed of Cross Security

 

The parties shall procure that no person other than an existing party acquires
(whether by transfer or subscription) any Shares unless it enters into a Deed of
Accession and a Deed of Cross Security. The parties agree that in entering into
a Deed of Accession and a Deed of Cross Security a person shall have the benefit
of the terms of, and shall be a party to, this agreement and such other
Transaction Documents as may be specified in the Deed of Accession.

 

21.7                       Removal of appointees

 

If a Shareholder ceases to be a Shareholder it must, and it must ensure that all
its appointees to the board of directors of any Windfield Group Entity, do all
things and sign all documents as may otherwise be necessary to ensure the
resignation or dismissal of the appointees from such appointments in a timely
manner.

 

21.8                       Power of Attorney

 

Each Shareholder irrevocably appoints Windfield as its attorney to execute,
deliver and/or issue:

 

(a)                                 any necessary document required to be
executed by it under clauses 19 and 20 and this clause 21, including any
instrument of transfer or other document which may be necessary to Transfer the
Relevant Assets; and

 

(b)                                 any Deed of Accession or Deed of Cross
Security entered into by any person pursuant to clause 21.6.

 

21.9                       Shareholder Debts and other obligations

 

Unless the other Shareholders otherwise agree, a Shareholder may not Transfer
any of its Shares except on the condition that prior to registration of the
Transfer:

 

(a)                                 other than Shareholder Debt (which is dealt
with under paragraph (b)), the Shareholder pays to each other Shareholder and to
each Windfield Group Entity all outstanding amounts which is payable by it to
any of them under the Transaction Documents or, if the Shareholder is not
transferring all its Shares, then that proportion of all outstanding amounts as
is the same proportion as the number of Shares being transferred bears to the
total number of Shares held by the Shareholder immediately before registration
of the Transfer; and

 

(b)                                 the Shareholder assigns or procures the
assignment to the transferee (or a related body corporate of the transferee) its
rights to the benefit of its Shareholder Debt or, if the Shareholder is not
transferring all its Shares, that proportion of Shareholder Debt as is the same
proportion as the number of Shares being transferred bears to the total number
of Shares held by the Shareholder immediately before registration of the
Transfer.

 

22                                 IPO Demand Right

 

A Shareholder who holds, or group of Shareholders who in aggregate hold, a
Specified Proportion of more than 75% may, at any time after the fourth
anniversary of Completion, give notice to all other Shareholders that they wish
for Windfield to seek admission to and quotation of the Shares on a recognised
securities exchange (with or without an initial public offering) in which case
each party must use all its reasonable endeavours to co-operate for the purposes
of effecting such admission and quotation, including by submitting to any escrow
requirements that are customarily imposed as a condition of listing or
quotation.

 

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23                                 Confidentiality

 

23.1                       Confidentiality

 

Subject to clause 23.2, a party must not disclose, or use for a purpose other
than contemplated by this agreement, any Confidential Information.

 

Confidential Information means:

 

(a)                                 the existence of and terms of any
Transaction Document; or

 

(b)                                 any unpublished information or documents
disclosed to the party by another party in connection with this agreement
(including information and documents supplied before the date of this agreement)
or by a Windfield Group Entity,

 

but excludes information or documents which:

 

(c)                                  at the time it was first disclosed to the
party, was already in the lawful possession of the party; or

 

(d)                                 becomes available to the party lawfully
through sources other than another party or a Windfield Group Entity.

 

23.2                      Permitted disclosure

 

(a)                                 A party may disclose any Confidential
Information:

 

(i)                                    on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 23, to its
officers, employees, professional advisors, related bodies corporate, or the
officers, employees or professional advisors of its related bodies corporate;

 

(ii)                                 in enforcing this agreement or in a
judicial or arbitral proceeding arising out of or in connection with this
agreement;

 

(iii)                              to the extent required by law or the rules of
any financial market regulator or securities exchange on which any securities of
the party or a related body corporate of the party are quoted;

 

(iv)                             to the extent required or permitted by this
agreement; or

 

(v)                                with the prior consent of the party which
originally supplied that Confidential Information (the disclosing party) in
connection with this agreement.

 

(b)                                 A party may disclose the existence or the
terms of this Agreement or the Confidential Information of the Windfield Group:

 

(i)                                    to the extent necessary in connection
with a capital raising by the party or a related body corporate of the party;

 

(ii)                                 on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 23, to:

 

(A)                              a bona fide proposed or prospective purchaser
of any Shares from the party;

 

(B)                              a bona fide current, proposed or prospective
financier of the party or a related body corporate of the party; or

 

(C)                              officers, employees or professional advisors of
such purchaser or financier.

 

31

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23.3                       Prior advice and related obligations

 

In the case of any disclosure of Confidential Information pursuant to
clause 23.2(a)(iii), the party must:

 

(a)                                 notify the disclosing party before or, if
this is not practical, as soon as the disclosure is made; and

 

(b)                                 use reasonable endeavours to (and assist the
disclosing party at the disclosing party’s expense to) restrict distribution of
the Confidential Information and otherwise take all reasonable steps to preserve
its confidentiality.

 

23.4                       Return or destruction

 

If a Shareholder ceases to be a Shareholder, the Shareholder on receipt of a
written demand from the other Shareholders or Windfield must, subject to
clause 23.5, promptly:

 

(a)                                 return or destroy all written Confidential
Information in its or any of its related bodies corporate’s possession or
control;

 

(b)                                 destroy all analyses, compilations, notes,
studies, memoranda or other documents in its or any of its related bodies
corporate’s possession or control to the extent they have been produced or
derived from Confidential Information of another Shareholder or the Windfield
Group; and

 

(c)                                  give the other Shareholders and Windfield a
certificate signed by any of its directors confirming that, to the best of his
knowledge, information and belief, having made all proper enquiries, the
requirements of this clause 23.4 have been fully complied with.

 

23.5                       Exceptions to return or destruction

 

Clause 23.4 does not apply:

 

(a)                                 to documents that the party or any of its
related bodies corporate are required by law to retain, for so long as they are
required to be retained;

 

(b)                                 in respect of a party’s or any of its
related body corporate’s board papers and minutes of meetings of its board of
directors or any committee of its board of directors to the extent such papers
or minutes contain a level of detail that is consistent with the normal
practices of the party or related body corporate; or

 

(c)                                  documents produced or derived by any
professional advisor to a party or any of its related bodies corporate, if the
documents are required to be held for the purposes of any relevant professional
standards, practices, codes or insurance policies applicable to the professional
advisor.

 

23.6                       Damages not an adequate remedy

 

Each party acknowledges that:

 

(a)                                 damages will not be an adequate remedy for
any breach of this clause 23; and

 

(b)                                 specific performance and injunctive relief
are appropriate remedies for any threatened or actual breach (without the need
to give an undertaking as to damages), in addition to any other remedies
available at law or in equity under or independently of this agreement.

 

23.7                       Survival of obligation

 

This clause 23 survives and continues to bind:

 

(a)                                 the parties for two years following
termination of this agreement; and

 

(b)                                 a party for two years after it ceases to be
a party.

 

32

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24                                 Mutual Representations and Warranties

 

Each party represents and warrants to each other party that (except as expressly
disclosed in this agreement or consented to by the other party) each of the
following statements is true and correct.

 

(a)                                 (status)  It is a corporation duly
incorporated and validly existing under the laws of the place of its
incorporation.

 

(b)                                 (power)  It has the power to enter into and
perform its obligations under each Transaction Document to which it is a party,
to carry out the transactions contemplated by those documents and to carry on
its business as now conducted or contemplated.

 

(c)                                  (corporate authorisations)  It has taken
all necessary corporate action to authorise the entry into and performance of
each Transaction Document to which it is a party and to carry out the
transactions contemplated by those documents.

 

(d)                                 (documents binding) Its obligations under
each Transaction Document to which it is a party are valid and binding
obligations on it enforceable in accordance with their terms, subject to any
necessary stamping and registration.

 

(e)                                  (transactions permitted)  The execution and
performance by it of each Transaction Document to which it is a party did not
and will not violate in any respect a provision of:

 

(i)                                    a law or treaty or a judgment, ruling,
order or decree of a government agency binding on it;

 

(ii)                                 its constituent documents; or

 

(iii)                              any other document or agreement which is
binding on it or its assets.

 

25                                 Operation of Agreement

 

25.1                       General

 

This agreement and the Constitution regulate the respective rights and
obligations of the Shareholders in relation to the Windfield Group and the
Business. The Shareholders agree to comply with the provisions of this agreement
and the Constitution which relate to them.

 

25.2                       Agreement to override the Constitution

 

(a)                                 If there is any inconsistency between the
provisions of this agreement and the Constitution, the provisions of this
agreement prevail to the extent of the inconsistency.

 

(b)                                 If it is necessary to amend the Constitution
to ensure that a provision of this agreement is effective in accordance with its
terms, the necessary amendment must be made.

 

25.3                       Shareholders to observe and implement the Transaction
Documents

 

Each Shareholder undertakes with each other Shareholder and Windfield to:

 

(a)                                 exercise all its votes, powers and rights
under the Constitution so as to give full force and effect to the provisions and
intentions of the Transaction Documents;

 

(b)                                 observe and comply fully and promptly with
the provisions of the Constitution so that each provision of the Constitution is
enforceable by the parties among themselves and in whatever capacity; and

 

(c)                                  exercise all its votes, powers and rights
in relation to Windfield so as to ensure that Windfield fully and promptly
observes, complies with and gives effect to the requirements and intentions of
the Transaction Documents.

 

33

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The obligations in this clause 25.3 include an obligation to exercise its powers
both as a Shareholder and (where applicable and to the extent permitted by law)
through any Director appointed by it and (to the extent permitted by law to
ensure that any Director appointed by it (whether alone or jointly with any
other person) obtains that matter or thing.

 

25.4                       Windfield to observe and implement the Transaction
Documents

 

Windfield must do all things necessary or desirable to give effect to the
provisions and intentions of each Transaction Document in accordance with its
terms and is bound by all provisions of this agreement which expressly or by
implication apply to it.

 

26                                 Relationship between the Shareholders

 

(a)                                 Neither this agreement nor the Constitution
is to be interpreted as constituting:

 

(i)                                    the relationship between the Shareholders
as a partnership, quasi-partnership, association or any other relationship in
which one or more of the Shareholders may (except as specifically provided for
in this agreement) be liable generally for the acts or omissions of any other
Shareholder; or

 

(ii)                                 any Shareholder as the general agent or
representative of any other Shareholder or of any Windfield Group Entity with
the exception of any powers of attorney specifically granted or contemplated by
this agreement.

 

(b)                                 No Shareholder has the authority to incur
any obligation or make any representation or warranty on behalf of, or to pledge
the credit of, any other Shareholder.

 

27                                 Duration and Termination

 

(a)                                 Subject to paragraph (b), this agreement:

 

(i)                                    ceases to apply to a party who is a
Shareholder (and to any other party with which it has joint and several
liability) which has transferred all its Shares as permitted by this agreement
and the Constitution;

 

(ii)                                 terminates automatically if, before
Completion, the Acquisition Agreement is terminated in accordance with its
terms; and

 

(iii)                              otherwise continues in full force and effect
until terminated by written agreement between the parties or any Shareholder
holds all Shares.

 

(b)                                 The termination of this agreement however
caused and the transfer by any Shareholder of all its Shares:

 

(i)                                    does not affect any accrued rights or
remedies of a party which remain unsatisfied; and

 

(ii)                                 does not affect any provision of this
agreement which is expressed to come into effect on, or to survive, that
termination or cessation.

 

28                                 Notices

 

Any notice, demand, consent or other communication (a Notice) given or made
under this agreement:

 

(a)                                 must be in writing in English and signed by
the sender or a person duly authorised by the sender (or in the case of email,
set out the full name and position or title of the sender or person duly
authorised by the sender);

 

(b)                                 must be delivered to the intended recipient
by prepaid post (if posted to an address in another country, by registered
airmail) or by hand, fax or email to the address, fax

 

34

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number or email address below or the address, fax number or email address last
notified by the intended recipient to the sender:

 

(i)                                     to Tianqi Group:

 

Address: Chengdu Tianqi Industry Co., Ltd., Building 2,
10 East Gao Peng Road, Chengdu Hi-tech Zone, Chengdu 610041, China

 

Fax No: +86 28 8518 3501

 

Email: vivianwu@tianqilithium.com

 

Attention: Vivian Wu

 

and

 

Address: Tianqi Group HK Co., Limited, Room B,
14th Floor, Wah Hen Commercial Centre, 383 Hennessy Road,
Wanchai, Hong Kong, China

 

Fax No: +86 28 8518 3501

 

Email: vivianwu@tianqilithium.com

 

Attention: Vivian Wu;

 

 

 

(ii)                                  to Tianqi

 

Address: Sichuan Tianqi Lithium Industries, Inc., Building 2,
10 East Gao Peng Road, Chengdu Hi-tech Zone, Chengdu 610041, China

 

Fax No: +86 28 8518 3501

 

Email: vivianwu@talisonlithium.com

 

Attention: Vivian Wu

 

and

 

Address: Tianqi UK Limited, c/- Hackwood Secretaries Limited, One Silk Street,
London, EC2Y 8HQ, United Kingdom

 

Fax No: +86 28 8518 3501

 

Email: vivianwu@talisonlithium.com

 

Attention: Vivian Wu;

 

 

 

(iii)                               to Rockwood UK:

 

Address: Denbigh Road, Bletchley, Milton Keynes, Buckinghamshire MK1 1PB, United
Kingdom

 

Fax No: +1 609 514 8722

 

Email: triordan@rocksp.com

 

Attention: Thomas J. Riordan;

 

 

 

(iv)                              to Windfield:

 

Address: Level 4, 37 St Georges Terrace, Perth WA 6000,
Australia

 

Fax No: +61 8 9202 1144

 

Email: lorry.mignacca@talisonlithium.com

 

Attention: Lorry Mignacca;

 

 

 

(v)                                 any other party:

 

as specified in its Deed of Accession; and

 

35

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(c)                                  will be conclusively taken to be duly given
or made:

 

(i)                                    in the case of delivery in person, when
delivered;

 

(ii)                                 in the case of delivery by post, two
business days after the date of posting (if posted to an address in the same
country) or seven business days after the date of posting (if posted to an
address in another country);

 

(iii)                              in the case of fax, on receipt by the sender
of a transmission control report from the despatching machine showing the
relevant number of pages and the correct destination fax number or name of
recipient and indicating that the transmission has been made without error; and

 

(iv)                             in the case of email, the earlier of:

 

(A)                              the time that the sender receives an automated
message from the intended recipient’s information system confirming delivery of
the email; and

 

(B)                              the time that the intended recipient, or an
employee or officer of the intended recipient acknowledges receipt,

 

but if the result is that a Notice would be taken to be given or made on a day
that is not a business day in the place specified by the intended recipient as
its postal address under paragraph (b), it will be conclusively taken to have
been duly given or made at the start of business on the next business day in
that place.

 

29                                 General

 

29.1                       Amendment

 

This agreement may be amended only by another agreement executed by all the
parties affected by the amendment.

 

29.2                       Assignment

 

A party must not assign any of its rights under this agreement, or attempt or
purport to do so, otherwise than in connection with a transfer of Shares in
accordance with this agreement and the Constitution.

 

29.3                       Costs and duty

 

Unless otherwise agreed between them, each party must bear its own costs arising
out of the negotiation, preparation and execution of this agreement. All duty
(including stamp duty and any fines, penalties and interest) payable on or in
connection with this agreement and any instrument executed under or any
transaction evidenced by this agreement must be borne by Windfield. For the
avoidance of doubt, any stamp duty payable in respect of, or arising from, the
acquisition by Tianqi Listco UK of 51% of the issued share capital of Windfield
must be borne by Tianqi Listco UK.

 

29.4                       Counterparts

 

This agreement may be executed in any number of counterparts. All counterparts
together will be taken to constitute one instrument.

 

29.5                       Entire agreement

 

This agreement contains the entire agreement between the parties as at the date
of this agreement with respect to its subject matter and supersedes all prior
agreements and understandings between the parties in connection with it.

 

36

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29.6                       Further assurances

 

At the reasonable request of another party, each party must do anything
necessary (including executing agreements and documents) to give full effect to
this agreement and the transactions contemplated by it.

 

29.7                       Governing law and jurisdiction

 

This agreement and related non contractual matters are governed by the laws of
Western Australia. Each party irrevocably submits to the non-exclusive
jurisdiction of the courts with jurisdiction in Western Australia, and waives
any right to object to the venue on any ground.

 

29.8                       Moratorium legislation

 

To the full extent permitted by law, all legislation that at any time directly
or indirectly:

 

(a)                                 lessens, varies or affects in favour of a
party any obligation under this agreement; or

 

(b)                                 delays, prevents or prejudicially affects
the exercise by a party of any right, power or remedy conferred by this
agreement,

 

is excluded from this agreement.

 

29.9                       No merger

 

The rights and obligations of the parties will not merge on the completion of
any transaction contemplated by this agreement. They will survive the execution
and delivery of any assignment or other document entered into for the purpose of
implementing a transaction.

 

29.10                No waiver

 

A failure to exercise or a delay in exercising any right, power or remedy under
this agreement does not operate as a waiver. A single or partial exercise or
waiver of the exercise of any right, power or remedy does not preclude any other
or further exercise of that or any other right, power or remedy. A waiver is not
valid or binding on the party granting that waiver unless made in writing.

 

29.11                Process agents

 

Each Shareholder:

 

(a)                                 irrevocably appoints each of the following
entities as its agent to accept service of process and other documents in any
action or proceedings arising out of or in any way related to this agreement or
its subject matter in the jurisdictions specified below with respect to that
entity:

 

(i)                                    Tianqi Group: Allens Corporate Services
Pty Ltd of Level 37, QV.1, 250 St Georges Terrace, Perth WA 6000, Australia;

 

(ii)                                 Tianqi: Allens Corporate Services Pty Ltd
of Level 37, QV.1, 250 St Georges Terrace, Perth WA 6000, Australia;

 

(iii)                              Rockwood UK: Clifford Chance of Level 7,
190 Georges Terrace, Perth WA 6000, Australia (Attention: Office Managing
Partner); and

 

(iv)                             any other Shareholder: as specified in its Deed
of Accession;

 

(b)                                 must ensure that at all times in each
relevant jurisdiction, the relevant agent or a replacement acceptable to the
other Shareholder remains present and authorised to accept service of process
and other documents on its behalf and, if there is a replacement, it must
immediately notify each other party and provide it with satisfactory evidence of
the replacement’s acceptance of its appointment; and

 

37

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(c)                                  agrees that service of any process or
documents on the agent (or any replacement) will be sufficient service on it.

 

29.12                Remedies cumulative

 

The rights, powers and remedies provided to a party in this agreement are in
addition to, and do not exclude or limit, any right, power or remedy provided by
law or equity or by any agreement.

 

29.13                Severability of provisions

 

Any provision of this agreement that is prohibited or unenforceable in any
jurisdiction is ineffective as to that jurisdiction to the extent of the
prohibition or unenforceability. That does not invalidate the remaining
provisions of this agreement nor affect the validity or enforceability of that
provision in any other jurisdiction.

 

38

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Schedule 1 — Deed of Accession

 

This deed poll is made on [*]

 

By

 

[*], incorporated in [*] of [*] (New Shareholder).

 

in favour of

 

each party to the Shareholders Agreement from time to time, including any person
who becomes a party to the Shareholders Agreement after the date of this deed
poll.

 

Recitals

 

A                                      New Shareholder has agreed to acquire
Sale Shares.

 

B                                      Clause 21.6 of the Shareholders Agreement
requires the parties to procure, among other things, that New Shareholder enter
into a Deed of Accession substantially in the form of this deed poll before it
acquires any Shares.

 

It is declared as follows.

 

1                                        Definitions and Interpretation

 

1.1                              Definitions

 

The following definitions and the definitions in the Shareholders Agreement
apply unless the context requires otherwise.

 

Applicable Transaction Document means the Shareholders Agreement[ or[*]].

 

Continuing Parties means each party to the Shareholders Agreement as at the
Effective Date[ other than Transferor].

 

Effective Date means the date on which New Shareholder is registered as a
shareholder of Windfield in respect of the Sale Shares.

 

Sale Shares means the [*] Shares to be acquired by New Shareholder[ from
Transferor].

 

Shareholders Agreement means the shareholders agreement dated [*] between [*].

 

[Transferor means [*].]

 

1.2                              Interpretation

 

Clauses 1.2, 1.3 and 1.4 of the Shareholders Agreement form part of this deed
poll as if set out at length in it (but as if the words ‘this agreement’ were
substituted for the words ‘this deed poll’ whenever appearing in those clauses.

 

2                                        Shareholders Agreement

 

New Shareholder acknowledges that it has received a copy of the Shareholders
Agreement.

 

3                                        Assumption of Obligations

 

From the Effective Date, New Shareholder agrees in favour of each Continuing
Party to observe, perform and be bound by all the obligations [of Transferor/a
Shareholder] under each Applicable Transaction Document which are required to be
performed on or after the Effective Date as if it had been named as a party in
that document.

 

39

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4                                        Representations and Warranties

 

New Shareholder acknowledges and agrees that each of the Continuing Parties is
entitled to rely upon the representations and warranties given by New
Shareholder under clause 24 of the Shareholders Agreement.

 

5                                        Notices

 

For the purposes of receiving any notice, demand, consent or other communication
given or made under each Applicable Transaction Document, the address, fax
number and email address of New Shareholder (until substituted by notification
in accordance with the terms of the Applicable Transaction Document) is:

 

Address:                                                [*]

 

Fax No:                                                   [*]

 

Email:                                                           [*]

 

Attention:                                        [*]

 

6                                        Process Agent

 

For the purpose of any appointment of an agent to accept service of process and
other documents in any action or proceedings arising out of or in any way
related to each Applicable Transaction Document which provides for the
appointment of such an agent, New Shareholder irrevocably appoints [*] of [*] as
such agent.

 

7                                        Governing Law and Jurisdiction

 

This deed poll and related non-contractual matters are governed by the laws of
Western Australia. New Shareholder irrevocably submits to the non-exclusive
jurisdiction of courts with jurisdiction in Western Australia, and waives any
right to object to the venue on any ground.

 

Executed and delivered as a Deed Poll in [*].

 

[Insert appropriate execution clause]

 

40

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Schedule 2 — Deed of Cross Security

 

Deed of Cross Security

 

GRAPHIC [g96561kk11i001.jpg]

 

Tianqi UK Limited

 

RT Lithium Limited

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

Particulars

1

 

 

Recitals

1

 

 

1

Definitions and interpretation

1

 

 

 

1.1

Definitions

1

1.2

Interpretation

3

1.3

Supremacy of interpretation

3

 

 

 

2

Limited Recourse

4

 

 

 

2.1

Limit and release

4

2.2

Exceptions (Fraud and negligence)

4

2.3

Unrestricted remedies

4

2.4

Restricted remedies

4

 

 

 

3

Security

5

 

 

 

3.1

Shareholder must perform the Secured Obligations

5

3.2

Grant of Security

5

3.3

Variations and Replacements

5

3.4

Registration

5

 

 

 

4

Nature of Security

5

 

 

 

4.1

Priority

5

4.2

Dealing with Secured Property

6

4.3

Subsequent Securities

6

4.4

Continuing security

6

4.5

Preference

6

4.6

Discharge

6

 

 

 

5

Enforcement

6

 

 

 

5.1

Enforcement by Non-Defaulter

6

5.2

Enforcement Administrator

7

5.3

Powers

7

5.4

Sale of Secured Property

7

5.5

Saving of power to appoint Enforcement Administrator

8

5.6

Withdrawal

8

 

 

 

6

Shares, loans and other interests

8

 

 

 

6.1

Non-Defaulter to retain all rights and dividends

8

6.2

Cessation of Defaulter rights

8

 

 

 

7

Protection of third parties

9

 

 

 

7.1

Dealings with Enforcer or Enforcement Administrator

9

7.2

Validity of receipt of Enforcer or Enforcement Administrator

9

 

 

 

8

Assignment

9

 

 

 

8.1

Assignment only as permitted by SHA

9

8.2

Release and replacement of Security on assignment

9

 

i

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9

Liability for loss and indemnity

9

 

 

 

9.1

Persons not liable to account

9

9.2

Persons not liable for entry into possession

9

9.3

Indemnity

10

 

 

 

10

Warranties and further assurance

10

 

 

 

10.1

Warranties

10

10.2

Further assurance

10

10.3

Power of Attorney

10

 

 

 

11

Application of PPSA to this deed

10

 

 

 

11.1

Enforcement

10

11.2

Confidentiality

11

11.3

Notices

11

11.4

Waiver of certain notices by Shareholder

11

11.5

Registration

11

 

 

 

12

Goods and services tax

11

 

 

 

13

Moratorium legislation

11

 

 

 

14

Notice not normally required

11

 

 

 

15

Notices

12

 

 

 

15.1

Form of Notice

12

15.2

When Notices are taken to have been given and received

12

 

 

 

16

Ancillary provisions

12

 

 

 

16.1

Entire agreement

12

16.2

Severability

12

16.3

Successors and permitted assigns

12

16.4

Exercise of rights

13

16.5

Waiver

13

16.6

Confidentiality

13

16.7

Remedies cumulative

13

16.8

Amendment

13

16.9

Counterparts

13

16.10

Applicable law

13

16.11

Costs

13

 

 

Schedule 1 - Pro Forma Financing Statement

14

 

 

Signing page

15

 

ii

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Particulars

 

Dated as of

2014

 

 

Shareholder 1

Name

Tianqi UK Limited

 

 

 

 

Registration No:

08960607

 

 

 

 

Address

c/o Hackwood Secretaries Limited, One Silk Street, London, EC2Y 8HQ, United
Kingdom

 

 

 

 

Fax

+86 28 8518 3501

 

 

 

 

Email

vivianwu@tianqilithium.com

 

 

 

 

Authorised Officer

Vivian Wu

 

 

 

Shareholder 2

Name

RT Lithium Limited

 

 

 

 

Registration No:

incorporated in England and Wales, Company No. 8785002

 

 

 

 

Address

400 Capability Green, Luton, Bedfordshire, England LU1 3AE

 

 

 

 

Fax

Bob Zatta +1 609 514 8721

 

Tom Riordan +1 609 514 8722

 

 

 

 

Email

RZatta@rocksp.com/ TRiordan@rocksp.com

 

 

 

 

Authorised Officer

Bob Zatta and Tom Riordan

 

 

 

Recitals

A.                      The parties to this deed are also parties to the
Shareholders Agreement (SHA).

 

 

 

B.                      The parties have agreed to enter into this deed to
secure performance of certain of their obligations to each other under the SHA.

 

The parties agree:

 

in consideration of, among other things, the mutual promises contained in this
deed:

 

1                               Definitions and interpretation

 

1.1                     Definitions

 

Unless set out below or the context otherwise requires, the definition of each
defined expression in this deed (including the Recitals) is the same as is
defined in the SHA, and in addition:

 

Authorised Officer means the person nominated by a party in its Particulars, or
any person replacing the nominated person as its authorised officer by notice
given in accordance with this deed.

 

Authority is any government department, local government council, government or
statutory authority or any other party under a Law which has a right to impose a
requirement or whose consent is required with respect to the SHA.

 

1

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Company means Windfield Holdings Pty Ltd (ACN 160 456 164), incorporated in
Australia.

 

Completion has the meaning given in the Shareholders Agreement.

 

Default means the failure by a Shareholder to perform, when due, any Secured
Obligations.

 

Defaulter means a Shareholder which has committed a Default.

 

Enforcement Administrator means, in relation to an Enforcer, the Enforcer, any
receiver, receiver and manager, administrator or attorney appointed under this
deed or any agent of the Enforcer which has entered into possession of the whole
or part of the Secured Property.

 

Enforcement Expenses means all costs, charges and expenses of the Enforcer and
the Enforcement Administrator (including its remuneration) incurred in or
incidental to the exercise or performance of any Power under this deed.

 

Enforcer means a party to this deed which has commenced enforcement proceedings
under this deed.

 

Financing Statement means a financing statement registerable under the PPSA
substantially in the form of the Pro Forma Financing Statement set out in
Schedule 1.

 

Law means legislation including regulations, by laws, and other subordinate
legislation, the requirements and guidelines of any Authority, including any
applicable listing rules, with which a party is legally required to comply, and
common law and equity.

 

Non-Defaulter means a Shareholder that is not a Defaulter.

 

Particulars mean the particulars of a party given on page 1 of this deed, as
amended by notice given in accordance with this deed.

 

Personal Property means all of the Secured Property that is personal property
(as defined in the PPSA) and to which the PPSA applies.

 

Power means any power, right, authority, discretion or remedy conferred on any
Shareholder or an Enforcement Administrator by this deed or by Law in relation
to this deed.

 

PPSA means the Personal Property Securities Act 2009 (Cth).

 

Prescribed Order means the order prescribed under this deed for the application
of all moneys received by an Enforcer or an Enforcement Administrator under or
by virtue of this deed, subject to any Law and notwithstanding agreement to the
contrary.

 

Proceeds means, in relation to any Secured Property, all proceeds realised as a
result of a Shareholder or its Enforcement Administrator taking possession of,
or exercising any of its Powers in relation to, the relevant Secured Property.

 

Secured Obligations means, in relation to each Shareholder, its obligations to
transfer shares in the Company and the benefit of any Shareholder Debt of the
Shareholder to the other Shareholder in accordance with clause 20 (Transfer on
Event of Default) of the SHA, clause 21 (Terms and Consequences of Transfers of
Shares) of the SHA and clause 19.4 (Drag-along) of the SHA, including payment of
liquidated or unliquidated damages under or in connection with those
obligations, or as a result of a breach of or default in performance of those
obligations under the SHA. It includes all such obligations that a Shareholder
would have been liable to perform but for its liquidation or some other reason.

 

Secured Property means, in relation to a Shareholder, all its present and future
interest in the following:

 

(a)                       all shares in the capital of, and any other securities
of, the Company held by the Shareholder;

 

(b)                       the benefit of any Shareholder Debt of the
Shareholder; and

 

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(c)                        all proceeds derived or arising from any of the
above.

 

Security means the Security Interests constituted or created by this deed.

 

Security Interest:

 

(a)                       in relation to any Personal Property, has the same
meaning as in the PPSA; and

 

(b)                       in relation to property other than Personal Property,
means any security for the payment of money or performance of obligations
including any security or preferential interest or arrangement of any kind, or
any other right of or arrangement with any creditor to have its claims satisfied
prior to other creditors with, or from the Proceeds of, any asset including,
without limitation, retention of title other than in the ordinary course of
business and any deposit of money by way of security.

 

Shareholder means each of Shareholder 1 and Shareholder 2.

 

Shareholders Agreement or SHA means the shareholders agreement dated 31
March 2014 between Chengdu Tianqi Group Co., Ltd, Sichuan Tianqi Lithium
Industries, Inc., Tianqi Group HK Co., Limited, Shareholder 1, Shareholder 2 and
the Company.

 

Shareholder Debt has the meaning given in the Shareholders Agreement.

 

1.2                     Interpretation

 

In this deed, unless the context otherwise requires:

 

(a)                       the singular includes the plural and vice-versa;

 

(b)                       headings do not affect the interpretation of this
deed;

 

(c)                        a reference to a party means a party to this deed as
listed on page 1 of this deed and includes that party’s executors,
administrators, substitutes, successors and permitted assigns;

 

(d)                       references to a part, clause, schedule, exhibit and
annexure refers to a part, clause, schedule, exhibit or annexure of, in or to
this deed;

 

(e)                        a reference to this deed includes all schedules,
exhibits and annexures to this deed;

 

(f)                         a reference to an agreement, deed, instrument or
other document includes the same as amended, novated, supplemented, varied or
replaced from time to time;

 

(g)                        a reference to a court is to an Australian court;

 

(h)                       a reference to any legislation or legislative
provision includes any statutory modification or re-enactment of, or legislative
provision substituted for, and any subordinated legislation issued under, that
legislation or legislative provision;

 

(i)                           a reference to a day, month or year is relevantly
to a calendar day, calendar month or calendar year;

 

(j)                          a reference to an amount for which a person is
contingently liable includes an amount which that person may become actually or
contingently liable to pay if a contingency occurs, whether or not that
liability will actually arise; and

 

(k)                       no rule of construction is to apply to the
disadvantage of a party on the basis that that party drafted the whole or any
part of this deed.

 

1.3                     Supremacy of interpretation

 

If there is any conflict between a provision of this deed and a provision of the
SHA, this deed shall prevail.

 

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2                               Limited Recourse

 

2.1                     Limit and release

 

(a)                       Subject to clause 2.2 but despite any other provision
of this deed, the liability of a Shareholder under or in connection with this
deed is limited to the total amount available to the other Shareholder as a
result of a realisation of the Secured Property in accordance with this deed
(after payment of Enforcement Expenses).

 

(b)                       Each Shareholder waives all claims (including in
respect of deceptive and misleading conduct) it may have against the other
Shareholder under or in connection with this deed in respect of which that other
Shareholder is not liable under paragraph (a).

 

2.2                                Exceptions (Fraud and negligence)

 

(a)                       Nothing in clause 2.1 limits the liability of the
Shareholder in respect of any loss, cost or expense suffered or incurred by the
other Shareholder arising from that Shareholder’s fraud or gross negligence
under or in connection with this deed.

 

(b)                       Failure by a Shareholder to pay all or any part of any
amount due under or in connection with this deed does not of itself constitute
fraud or gross negligence on its part.

 

2.3                     Unrestricted remedies

 

(a)                       Subject to sub-paragraph (b), nothing in clause 2.1
limits the other Shareholder in:

 

(i)                          exercising its rights or powers under this deed in
relation to the Secured Property;

 

(ii)                       obtaining an injunction or other order to restrain
any breach of this deed by any party; or

 

(iii)                    obtaining declaratory relief.

 

(b)                       In exercising any right, power or remedy under this
deed, neither the other Shareholder nor any Enforcement Administrator shall
incur, or have the authority to incur, any liability on behalf of or for the
account of the Shareholder except a liability which is itself subject to the
limitation in clause 2.1.

 

2.4                     Restricted remedies

 

Except as provided in clause 2.3, the other Shareholder shall not, in relation
to any liability for which the Shareholder is not liable under clause 2.1:

 

(a)                       obtain a judgment for the payment of money or damages
by the Shareholder;

 

(b)                       issue any demand under s459E(1) of the Corporations
Act 2001 (Cth) (or any analogous provision under any other law) against the
Shareholder;

 

(c)                        apply for the winding up of the Shareholder;

 

(d)                       levy or enforce any distress or other execution to, on
or against any asset of the Shareholder;

 

(e)                        apply for the appointment by a court of a receiver to
any of the assets of the Shareholder; and

 

(f)                         exercise or seek to exercise any set-off or
counterclaim against the Shareholder,

 

or take proceedings for any of the above and the other Shareholder waives its
rights in respect of those applications and proceedings.

 

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3                               Security

 

3.1                     Shareholder must perform the Secured Obligations

 

Each Shareholder agrees to perform the Secured Obligations in accordance with
the terms of the SHA and any other agreement in writing to do so.

 

3.2                     Grant of Security

 

For the purpose of securing its obligations to perform the Secured Obligations ,
each Shareholder charges all its present and future Secured Property by:

 

(a)                       granting a Security Interest in the Personal Property;
and

 

(b)                       charging by way of fixed charge Secured Property that
is not Personal Property, in favour of the other Shareholder.

 

3.3                     Variations and Replacements

 

(a)                       Each Shareholder acknowledges that the SHA may be
varied or replaced from time to time in accordance with its terms.

 

(b)                       Each Shareholder confirms that the Secured Obligations
include those obligations under the Shareholder Agreement as varied or replaced
and that this applies regardless of:

 

(i)                          how the Shareholder Agreement or this deed is
varied or replaced; or

 

(ii)                       the reasons for the variation or replacement; or

 

(iii)                    whether the Secured Obligations are decreased or
increased or whether the Shareholder Agreement is otherwise more or less onerous
as a result of the variation or replacement.

 

3.4                     Registration

 

Each Shareholder must:

 

(a)                       co-operate with each other Shareholder to
register Financing Statements under the PPSA in respect of each Security
Interest granted under this deed. Unless otherwise agreed by all Shareholders:

 

(i)                          the details to be included in each Financing
Statement must be substantially as set out in Schedule 1; and

 

(ii)                       no Shareholder is required to assist another
Shareholder to perfect its Security Interest under the PPSA by any means other
than registration of such Financing Statements; and

 

(b)                       co-operate with each other Shareholder to cause this
deed to be registered with Companies House in the United Kingdom.

 

4                               Nature of Security

 

4.1                     Priority

 

(a)                       The Security takes priority over all other mortgages,
pledges, liens, charges or other forms of Security Interest.

 

(b)                       The Security Interests in favour of each Shareholder
rank equally irrespective of the date the Security Interests were registered or
the date on which respective Secured Obligations became due.

 

(c)                        Where an item of the Secured Property is held or
owned by a Shareholder at the date of this deed, the Security has immediate
effect over it.

 

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(d)                       Where an item of Secured Property is acquired by a
Shareholder after the date of this deed, the Security has effect over it from
the time it is acquired by the Shareholder.

 

4.2                     Dealing with Secured Property

 

(a)                       Each Shareholder warrants to and covenants with each
other Shareholder that:

 

(i)                          as at the date of this deed there subsists no
Security affecting any of the Secured Property; and

 

(ii)                       it will not create or allow to exist any Security
Interest, over the whole or part of its Secured Property ranking in priority to,
equally with or after this security, except as permitted by the SHA.

 

(b)                       Except as permitted under the SHA and this deed:

 

(i)                          a Shareholder must not assign, or agree or attempt
to assign, or take any step towards assigning, or otherwise dealing with any
Secured Property; and

 

(ii)                       a Defaulting Shareholder must not assign, agree or
attempt to assign, or take any step towards assigning, or otherwise dealing with
any Secured Property.

 

4.3                     Subsequent Securities

 

Each Shareholder covenants with each other Shareholder that any other Security
Interest granted, entered into or incurred by it over the whole or any part of
the Secured Property, will acknowledge and provide for the priority of and be
subject to this Security.

 

4.4                     Continuing security

 

This Security is a continuing security notwithstanding any settlement of
account, intervening payment or any other matter or thing whatsoever and remains
in full force until a final discharge has been executed by all Shareholders.

 

4.5                     Preference

 

If a claim that any payment, transaction, conveyance or transfer during the
currency of the Security affecting or relating in any way to the Secured
Obligations is void or voidable under any Law relating to bankruptcy or winding
up or the protection of creditors is upheld, conceded or comprised (Preference):

 

(a)                       the Non-Defaulters will forthwith become entitled
against the Defaulter to all rights in respect of the Secured Obligations and
the Secured Property as they would have had if the Preference had not been made;
and

 

(b)                       the Defaulter must forthwith take all such steps and
sign all such documents as required by each Non-Defaulter as being necessary or
convenient to restore to the Non-Defaulter any Security Interest held by it
immediately prior to such Preference.

 

4.6                     Discharge

 

At the written request of either Shareholder, the other Shareholder must
discharge the Security if the relevant Shareholder has fully observed and
performed its respective Secured Obligations and the SHA has been terminated
under clause 27(a)(ii) or 27(a)(iii) (Duration and Termination) of the SHA.

 

5                               Enforcement

 

5.1                     Enforcement by Non-Defaulter

 

Without limiting the remedies available to any Shareholder under the SHA or
otherwise, on the occurrence of a Default in respect of a Shareholder, the other
Non-Defaulter may exercise any or all Powers provided in this deed to enforce
the Security granted by the Defaulter and use

 

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and apply any moneys realised from the exercise of any such power or remedy as
provided in this deed.

 

5.2                     Enforcement Administrator

 

(a)                       The Enforcer may at any time after its entitlement to
enforce arises:

 

(i)                          appoint any person or two or more persons jointly
and/or severally to be an Enforcement Administrator of all or any of the Secured
Property of the Defaulter;

 

(ii)                       remove any Enforcement Administrator and in the case
of the removal, retirement or death of any Enforcement Administrator may appoint
another in his place; and

 

(iii)                    fix the remuneration of any Enforcement Administrator.

 

(b)                       An Enforcement Administrator appointed under this
clause is deemed to be the agent of the Defaulter which is solely responsible
for his or her acts and defaults and for his or her remuneration.

 

(c)                        Except as otherwise provided in this deed, the
Non-Defaulter is not under any liability to the Enforcement Administrator for
Enforcement Expenses or otherwise.

 

5.3                     Powers

 

(a)                       Subject always to the SHA (other than the provisions
regulating transfer or assignment) and to any restriction in the terms of their
appointment, and in addition to any powers granted by Law, every Enforcer or
Enforcement Administrator has power without the need for any consent on the part
of a Defaulter to do anything in respect of the relevant Secured Property which
that Defaulter could do, including (without limitation, unless the terms of
appointment restrict an Enforcement Administrator’s powers):

 

(i)                          perform the Secured Obligations that the Defaulter
has failed to perform;

 

(ii)                       improve the Secured Property;

 

(iii)                    sell, transfer or otherwise dispose of the Secured
Property or any interest in it;

 

(iv)                   lease or licence the Secured Property or any interest in
it, or deal with any existing lease or licence (including allowing a surrender
or variation);

 

(v)                      take or give up possession of the Secured Property as
often as it chooses;

 

(vi)                   sever, remove and sell fixtures attached to the Secured
Property; or

 

(vii)                do anything else the Law allows as owner or an Enforcement
Administrator of the Secured Property to do.

 

Each of the above paragraphs must be construed independently. No one paragraph
limits the generality of any other paragraph.

 

(b)                       All provisions of any Law are deemed to be negatived
or varied in so far as they are inconsistent with the terms and provisions
expressed in this deed.

 

(c)                        Any dealing under any such power may be on such terms
and conditions as the Enforcer or Enforcement Administrator thinks fit.

 

5.4                     Sale of Secured Property

 

(a)                       The Enforcer or Enforcement Administrator may sell or
concur in selling any of the Secured Property in accordance with the following
provisions of this clause and subject to the SHA.

 

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(b)                       The Enforcer or Enforcement Administrator may sell or
concur in selling any of the Secured Property such sale to be made:

 

(i)                          by public auction or private treaty or by tender
for cash or on credit;

 

(ii)                       in one lot or in parcels;

 

(iii)                    either with or without special conditions or
stipulations as to title or time or mode of payment of purchase money or
otherwise;

 

(iv)                   with power to allow the whole or any part of the purchase
money to be deferred (whether with or without security);

 

(v)                      whether or not in conjunction with the sale of any
property by any person; and

 

(vi)                   upon such other terms and conditions as the Enforcer or
Enforcement Administrator may consider expedient.

 

(c)                        The Enforcer or Enforcement Administrator must give
to each Non-Defaulter not less than 30 days’ written notice of the Enforcer’s or
Enforcement Administrator’s intention to sell or offer for sale the Secured
Property of the Defaulter.

 

5.5                     Saving of power to appoint Enforcement Administrator

 

The power to appoint an Enforcement Administrator under this clause may be
exercised notwithstanding that at the time when such an appointment is made an
order has been made or a resolution passed for the winding up of, or the
appointment of an administrator to, the Defaulter, in which case the Enforcer or
Enforcement Administrator may not be able to act as the agent of the Defaulter.

 

5.6                     Withdrawal

 

The Enforcer or Enforcement Administrator may at any time give up possession of
the Defaulter’s Secured Property and may at any time withdraw from any
receivership or administration under this deed.

 

6                               Shares, loans and other interests

 

6.1                     Non-Defaulter to retain all rights and dividends

 

Until a Non-Defaulter becomes entitled to enforce its rights under this deed:

 

(a)                       a Shareholder is entitled to exercise all rights and
retain all dividends, interest and other returns in respect of shares, loans and
other interests forming part of the Secured Property;

 

(b)                       the Shareholder may exercise any voting power in
respect of such shares, loans and other interests as it sees fit; and

 

(c)                        an Enforcer or Enforcement Administrator may not
exercise any voting power in respect of such shares, loans and other interests
without the Shareholder’s consent.

 

6.2                     Cessation of Defaulter rights

 

Upon an Enforcer becoming entitled to enforce its rights under this deed, all
rights of the Defaulter under this clause cease and:

 

(a)                       the Defaulter must procure that all dividends,
interest and other returns in respect of shares, loans and other interests
forming part of the Secured Property are paid directly to the Enforcer or
Enforcement Administrator; and

 

(b)                       the Enforcer or Enforcement Administrator becomes
entitled to exercise all rights attaching to such shares, loans and other
interests.

 

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7                               Protection of third parties

 

7.1                     Dealings with Enforcer or Enforcement Administrator

 

Any person dealing with an Enforcer or Enforcement Administrator:

 

(a)                       need not enquire whether any event has occurred to
authorise the Enforcer or Enforcement Administrator to act;

 

(b)                       is not affected by express notice that any such
dealing is unnecessary or improper, and

 

(c)                        may accept the receipt of the Enforcer or the
Enforcement Administrator for any money as a discharge from any obligation of
being concerned to see to the application or being liable or accountable for any
loss or misapplication of that money

 

7.2                     Validity of receipt of Enforcer or Enforcement
Administrator

 

The receipt of the Enforcer or Enforcement Administrator is deemed to be
authorised and valid for the purpose of protecting any party to a dealing with
an Enforcer or Enforcement Administrator, notwithstanding any irregularity or
impropriety in any such dealing.

 

8                               Assignment

 

8.1                     Assignment only as permitted by SHA

 

A party must not assign or otherwise dispose of its rights and obligations under
this deed otherwise than to a person to which it is permitted to assign its
Shareholder interest under the SHA. Subject to that requirement, this deed is
binding upon and inures to the benefit of the parties to this deed and their
respective successors and permitted assigns.

 

8.2                     Release and replacement of Security on assignment

 

If a Shareholder which is not in breach of this deed or in default under the
SHA:

 

(a)                       completes an assignment or other disposition of all or
part of its Secured Property (the Assigned Secured Property) in accordance with
the SHA;

 

(b)                       provides to the other Shareholder an instrument
evidencing the grant of a Security Interest by the incoming assignee of the
Assigned Secured Property in the form contemplated by the SHA; and

 

(c)                        undertakes at the cost of the incoming assignee to
register, file or record such Security Interest,

 

then the other Shareholder must release and discharge the Security in respect of
the Assigned Secured Property.

 

9                               Liability for loss and indemnity

 

9.1                     Persons not liable to account

 

Neither a Non-Defaulter nor an Enforcement Administrator is answerable or
accountable for any loss of any kind whatever which may happen in or about the
exercise or attempted exercise of any of the Powers except where the
Non-Defaulter or an Enforcement Administrator has not conducted itself in good
faith or has committed fraud or gross negligence or wilful misconduct.

 

9.2                     Persons not liable for entry into possession

 

Neither an Enforcer nor an Enforcement Administrator is by reason of entering
into possession of any part of the Secured Property liable:

 

(a)                       to account as mortgagee in possession or for anything
except actual receipts; or

 

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(b)                       for any loss upon realisation or for any default or
omission for which a mortgagee in possession might be liable.

 

9.3                     Indemnity

 

(a)                       A Defaulter must, on demand, indemnify and keep
indemnified all Enforcers and Enforcement Administrators from and against all
Enforcement Expenses incurred in any way in enforcing the Security or in the
exercise or attempted exercise of any Power in relation to that Defaulter or its
Secured Property.

 

(b)                       An Enforcer or Enforcement Administrator may obtain
and pay out of any Proceeds in its, his or her hands all sums necessary to
effect such indemnity.

 

(c)                        Each indemnity in this deed is a continuing
obligation, separate and independent from the other obligations of the parties
and survives termination of this deed. It is not necessary for a party to incur
expense or make payment before enforcing a right of indemnity under this deed.

 

10                        Warranties and further assurance

 

10.1              Warranties

 

Each Shareholder warrants to each other Shareholder that it has, by its
constitution, adequate corporate powers and authority to enter into this deed
and to fulfil its obligations hereunder and that all necessary resolutions have
been passed, and all necessary other corporate action has been taken in order to
render this deed valid and binding on it.

 

10.2              Further assurance

 

Each Shareholder must from time to time do or cause to be done anything
reasonably requested by any other Shareholder:

 

(a)                       to ensure this deed and each Security Interest created
under it is fully effective, enforceable and perfected with the stated priority;

 

(b)                       for more satisfactorily mortgaging, assuring or
securing the relevant Secured Property to the other Shareholders; or

 

(c)                        for aiding in the execution or exercise of any Power,

 

including, without limitation, the obtaining of any consent, authorisation,
approval or exemption from any government or governmental agency or authority,
the execution of any other document or agreement or the delivery of documents or
evidence of title not inconsistent with this deed.

 

10.3              Power of Attorney

 

Each Shareholder for valuable consideration and by way of security irrevocably
appoints each other Shareholder (other than a Defaulter) and each of their
respective directors and secretaries severally its attorney to do all things
which that Shareholder is obliged to do (but does not do) under or in relation
to this deed and in relation to the performance of the Secured Obligations.

 

11                       Application of PPSA to this deed

 

11.1              Enforcement

 

The Shareholders agree that each of the provisions of the PPSA which section 115
of the PPSA permits parties to contract out of, other than sections 117 and 118
(relationship with land laws) and 134(1) and 135 (retention of collateral), do
not apply to the enforcement of this Security or any Security Interest under
this deed.

 

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11.2              Confidentiality

 

To the extent permitted by section 275 of the PPSA, the parties agree to keep
all information of the kind mentioned in section 275(1) of the PPSA confidential
and to not disclose that information to any other person, except where
disclosure is otherwise permitted or authorised under the SHA.

 

11.3              Notices

 

Notwithstanding anything in this deed, notices or documents required or
permitted to be given under this deed for the purposes of the PPSA must be given
in accordance with the PPSA.

 

11.4              Waiver of certain notices by Shareholder

 

Each Shareholder waives the right to receive any notice under the PPSA
(including notice of a verification statement) unless the notice is required by
the PPSA and cannot be excluded. However, upon request by a Shareholder, each
Shareholder agrees to provide to that first Shareholder copies of any
verification statements concerning registrations made by the second Shareholder
against that first Shareholder in the last 5 years preceding the request (or
such lesser period as is specified).

 

11.5              Registration

 

Each Shareholder consents to each other Shareholder effecting a registration of
a Financing Statement on the Personal Property Securities Register established
under the PPSA.

 

12                        Goods and services tax

 

If all or any part of any payment by a Shareholder under this deed is the
consideration for a taxable supply for GST purposes then, subject to the payee
first providing a tax invoice to that Shareholder, when making the payment the
Shareholder must pay to the payee an additional amount equal to that payment
multiplied by the appropriate rate of GST.

 

13                        Moratorium legislation

 

The provisions of any Law existing now or in the future which operate directly
or indirectly:

 

(a)                       to lessen, modify or vary in favour of a party its
obligations under this deed; or

 

(b)                       to delay, postpone, fetter or otherwise prevent or
prejudicially affect the exercise by a party to this deed of any of the Powers
conferred on it

 

are negatived and excluded from this deed, to the fullest extent that each party
may lawfully do so.

 

14                        Notice not normally required

 

(a)                       No Enforcer or Enforcement Administrator need give the
Defaulter any notice or demand or allow time to elapse before exercising a right
under this deed or conferred by Law (including a right to sell) unless the
notice, demand or lapse of time is required by Law and cannot be excluded.

 

(b)                       If the Law requires that a period of notice must be
given or a lapse of time must occur or be permitted before a right under this
deed or conferred by law may be exercised, then:

 

(i)                          when a period of notice or lapse of time is
mandatory, that period of notice must be given or that lapse of time must occur
or be permitted by the Enforcer; and

 

(ii)                       when the law provides that a period of notice or
lapse of time may be stipulated or fixed by this deed, one day is stipulated and
fixed as that period of notice or lapse of time including, if applicable, as the
period of notice or lapse of time during which:

 

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A.                          a Default must continue before a notice is given or
requirement otherwise made for performance of the Secured Obligations or the
observance of other obligations under this deed; and

 

B.                          a notice or request for performance of the Secured
Obligations or the observance of other obligations under this deed must remain
not complied with before the Enforcer may exercise rights.

 

15                        Notices

 

15.1              Form of Notice

 

Unless expressly stated otherwise in this deed, all notices, certificates,
consents, approvals, waivers and other communications in connection with this
deed (Notices) must be in writing, signed by the sender (if an individual) or an
Authorised Officer of the sender and marked for the attention of the person
identified in the Particulars or, if the recipient has notified otherwise, then
marked for attention in the last way notified.

 

15.2              When Notices are taken to have been given and received

 

(a)                       A Notice is regarded as given and received:

 

(i)                          if delivered by hand, when left at the address
given in the Particulars;

 

(ii)                       if sent by pre-paid post, on the 3rd day following
the date of postage;

 

(iii)                    if given by fax, on production of a transmission report
by the machine from which the fax was sent which indicates that the fax was sent
in its entirety to the recipient’s fax number, unless the recipient informs the
sender that the Notice is illegible or incomplete within 4 hours of it being
transmitted; and

 

(iv)                   if sent by email, at the time shown in the delivery
confirmation report generated by the sender’s email system.

 

(b)                       A Notice delivered or received other than on a day on
which trading banks are open for business in Chengdu, Frankfurt, New York and
Perth (Business Day) or after 5.00pm (recipient’s time and city) is regarded as
received at 9.00am on the following Business Day. A Notice delivered or received
before 9.00am (recipient’s time and city) is regarded as received at 9.00am.

 

16                        Ancillary provisions

 

16.1              Entire agreement

 

This deed contains everything the parties have agreed in relation to this deed.
No party can rely on an earlier written document or anything said or done by
another party, or by a director, officer, agent or employee of that party,
before this deed was executed, save as permitted by law.

 

16.2              Severability

 

If any of the provisions of this deed are held to be invalid or unenforceable,
the severance provisions of the SHA apply to such invalidity or
unenforceability.

 

16.3              Successors and permitted assigns

 

The provisions of this deed enure for the benefit of and are binding upon each
Shareholder and their respective successors and permitted assigns.

 

12

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16.4              Exercise of rights

 

Subject to any contrary express provision of this deed:

 

(a)                       an Enforcer or Enforcement Administrator may exercise
a Power at its discretion, and separately or concurrently with another Power;

 

(b)                       a single or partial exercise of a Power by the person
does not prevent a further exercise of that or an exercise of any other Power;
and

 

(c)                        failure by the person to exercise or delay in
exercising a Power does not prevent its exercise or operate as a waiver.

 

16.5              Waiver

 

A waiver of any right, power or remedy under this agreement must be in writing
signed by the party granting it. A waiver is only effective in relation to the
particular obligation or breach in respect of which it is given. It is not to be
taken as an implied waiver of any other obligation or breach or as an implied
waiver of that obligation or breach in relation to any other occasion.

 

16.6              Confidentiality

 

The provisions of the SHA relating to confidentiality apply to information
provided under this deed by one party to another as if set out in this deed.

 

16.7              Remedies cumulative

 

The rights and remedies provided in this deed are cumulative and not exclusive
of any rights or remedies provided by Law.

 

16.8              Amendment

 

No modification, variation or amendment of this deed is of any force unless it
is in writing and has been signed by each of the parties.

 

16.9              Counterparts

 

This deed may be executed in any number of counterparts and by different parties
in separate counterparts. Each counterpart when so executed is deemed an
original but all of which together constitute one and the same instrument.

 

16.10       Applicable law

 

(a)                       This deed is governed by and must be construed in
accordance with the laws of Western Australia.

 

(b)                       Without limiting sub-clause (a), to the extent
permitted by law the Security is governed by the laws of Western Australia.

 

(c)                        The parties submit irrevocably to the non-exclusive
jurisdiction of the Courts of Western Australia and all Courts competent to hear
appeals from those Courts.

 

16.11       Costs

 

Each party must pay its own costs of reviewing and executing this deed and any
other document provided for or contemplated by this deed.

 

13

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Schedule 1 - Pro Forma Financing Statement

 

Details for Financing Statement (Clause 3.4(a)):

 

Registration details

 

 

 

Collateral type:

commercial

 

 

Registration transitional:

no

 

 

secured party group number:

[insert relevant number]

 

 

earlier registration number:

N/A

 

 

Collateral Class

 

 

 

General property (all present and after acquired property):

With exceptions

 

 

Additional details

 

 

 

purchase money security interest applies:

N/A

 

 

Collateral description

 

 

 

Collateral is Grantor’s interest in shares, securities, loans and related
assets, and all other property described in any security agreement with Secured
Party. It excludes all other property and property expressly released. May be
subject to control. Grantor breaches a security agreement if, without Secured
Party’s consent or agreement, it disposes of collateral, including disposal in
the ordinary course of business in certain cases.

 

Proceeds

 

 

 

Yes: ‘all present and after acquired property.’

 

 

 

Duration of registration

 

 

 

No stated end time

 

 

 

Grantor

 

 

 

[insert relevant details]

 

 

14

--------------------------------------------------------------------------------

 

Executed as a deed

 

Signing page

 

SIGNED, SEALED and DELIVERED by

)

 

 

 

 

Tianqi UK Limited

)     

 

 

 

 

 

[g96561kk13i001.jpg]

 

Signature of Director

 

 

 

Name of Director

 

 

 

 

 

 

 

in the presence of:

 

 

 

 

 

 

Signature of witness

 

 

 

 

 

Name of witness

 

 

 

 

 

Address of witness

 

 

 

 

 

 

 

SIGNED, SEALED and DELIVERED by

)

 

 

 

 

RT Lithium Limited

)     

 

 

 

 

 

 

 

 

[g96561kk13i001.jpg]

 

Signature of Director

 

 

 

Name of Director

 

 

 

 

 

 

 

in the presence of:

 

 

 

 

 

 

Signature of witness

 

 

 

 

 

Name of witness

 

 

 

 

 

Address of witness

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Schedule 3 — Special Majority Matters

 

1                                        Acquisitions and Disposals; Material
Changes in the Business

 

Any of the following actions by a Windfield Group Entity, except to the extent
contemplated by the annual Budget and Business Plan.

 

(a)                                 Acquiring (whether by subscription, transfer
or otherwise) shares in any entity (other than a Windfield Group Entity),
acquiring interests in any trust or becoming a partner in any partnership.

 

(b)                                 Agreeing to any limitation on its freedom to
engage in any type of business or activity, including in competition with any
person or in any area.

 

(c)                                  Effecting any material change in the nature
of the Business or the commencement of any new business.

 

(d)                                 Merging or amalgamating with any entity
(other than another Windfield Group Entity).

 

(e)                                  Agreeing to pay a person remuneration
calculated by reference to a Windfield Group Entity’s income or profits.

 

(f)                                   The acquisition or disposal (whether by
sale, lease or the grant of a Security Interest) of any asset or related assets,
other than the acquisition of Business inputs or the disposal of Business
products on arm’s length terms and in the ordinary course of business, for a
price that exceeds:

 

(i)                                    A$10 million for any single transaction
(or related series of transactions); or

 

(ii)                                 A$50 million in aggregate for all
transactions in any five-year period during the term of this agreement, other
than those which have been approved by a Special Majority.

 

(g)                                  Providing financial accommodation
(including by way of guarantee) of more than A$2 million, except to:

 

(i)                                    Windfield or a wholly-owned subsidiary of
Windfield; or

 

(ii)                                 a trade creditor on arm’s length terms and
in the ordinary course of business.

 

2                                        Related Party Transactions

 

Entry into, termination or variation of any agreement between a Windfield Group
Entity and a Shareholder or a related body corporate of a Shareholder, except:

 

(a)                                 an agreement contemplated by the then
current annual Budget and Business Plan;

 

(b)                                 the entry into or termination of a Chemical
Grade Off-take Agreement or a Technical Grade Distribution Agreement, or the
entry into, termination or variation of any agreement contemplated by any of
them; or

 

(c)                                  an agreement (or related series of
agreements) which involve aggregate expenditure by all Windfield Group Entities
of less than A$500,000 in any financial year.

 

3                                        Arrangements Affecting Capital

 

(a)                                 Any reduction of share capital (including
through a share buy-back) by Windfield or any other Windfield Group Entity that
is not a wholly-owned subsidiary of Windfield.

 

(b)                                 Any issue of shares, or securities
convertible into shares, by a Windfield Group Entity except an issue of
securities by:

 

(i)                                    Windfield offered to Shareholders
pro-rata to their Specified Proportions; or

 

--------------------------------------------------------------------------------

 

(ii)                                 a Windfield Group Entity to another
Windfield Group Entity.

 

4                                        Finance Debt

 

(a)                                 Incurrence of Finance Debt by a Windfield
Group Entity (other than any Shareholder Debt incurred pursuant to clause 13) if
at the time the aggregate outstanding consolidated Finance Debt of Windfield
exceeds A$10 million or such higher amount as may be approved by the Board from
time to time.

 

(b)                                 Approval of any higher amount under
paragraph (a).

 

5                                        Accounting Matters

 

(a)                                 Appointment or removal of Windfield’s
auditors.

 

(b)                                 Change in Windfield’s financial year.

 

(c)                                  Change in Windfield’s accounting policies
except to the extent mandated by IFRS.

 

6                                        Constitution

 

Any change to the Constitution.

 

7                                        Winding Up

 

Any Windfield Group Entity applying, commencing any proceedings or taking any
other steps to wind up or dissolve, appoint an administrator or enter into an
arrangement, compromise or composition with or assignment for the benefit of its
creditors or shareholders, a class of them or any of them.

 

8                                        Minerals Conversion Plant

 

Any decision to undertake development of a minerals conversion plant, beyond
completion of Windfield’s current feasibility study.

 

--------------------------------------------------------------------------------

 

Schedule 4 — Chemical Grade Off-take Agreement Terms

 

[g96561kk15i001.jpg]

 

CLIFFORD CHANCE

 

EXECUTION VERSION

 

TALISON LITHIUM AUSTRALIA PTY LTD

 

ROCKWOOD LITHIUM GmbH

 

--------------------------------------------------------------------------------

 

OFF-TAKE AGREEMENT

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

CONTENTS

 

Clause

 

 

Page

 

 

 

 

DETAILS

 

1

 

 

 

GENERAL TERMS

 

2

 

 

 

1.

DEFINITIONS AND INTERPRETATION

 

2

1.1

Definitions

 

2

1.2

Related Bodies Corporate

 

5

1.3

Interpretation

 

6

 

 

 

 

2.

TERM

 

7

 

 

 

 

3.

QUANTITY

 

7

3.1

Production and Offtake Nominations

 

7

3.2

Obligation to Take and Deliver

 

9

3.3

Under and Over Production

 

9

 

 

 

 

4.

DELIVERY AND SHIPPING

 

10

4.1

Delivery

 

10

4.2

Deliveries of Out of Specification Concentrate

 

11

4.3

Transport and Shipping

 

11

4.4

FOB Loading Terms at Loading Port

 

12

4.5

Insurance

 

12

 

 

 

 

5.

WEIGHING AND SAMPLING

 

12

5.1

Loading Port

 

12

5.2

Documentation for Buyer

 

12

5.3

Discharge Port

 

13

 

 

 

 

6.

PRICE

 

13

6.1

Price

 

13

6.2

Penalties

 

14

 

 

 

 

7.

PAYMENT

 

14

7.1

Payment

 

14

7.2

Disputed Amounts

 

14

7.3

Evidence of Basis of Calculations

 

14

7.4

Interest

 

14

 

 

 

 

8.

SPECIFICATIONS

 

14

 

 

 

 

9.

TEMPORARY CLOSURE — CARE AND MAINTENANCE

 

15

 

 

 

 

10.

TITLE AND RISK

 

15

10.1

Risk

 

15

10.2

Title

 

15

 

 

 

 

11.

DISPUTE RESOLUTION

 

16

 

 

 

 

12.

FORCE MAJEURE

 

17

 

 

 

 

13.

TERMINATION

 

18

 

 

 

 

14.

LIMIT OF LIABILITY

 

19

 

 

 

 

15.

GOODS AND SERVICES TAX

 

19

 

i

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15.1

Interpretation

 

19

15.2

Consideration is GST Exclusive

 

19

15.3

Gross Up of Consideration

 

19

15.4

Reimbursements (Net Down)

 

20

15.5

Requirements for Tax Invoices

 

20

 

 

 

 

16.

VIENNA CONVENTION

 

20

 

 

 

 

17.

FAIRNESS

 

20

 

 

 

 

18.

OBLIGATIONS OF PRODUCER

 

20

 

 

 

 

19.

CONFIDENTIALITY

 

21

19.1

Confidentiality Restrictions

 

21

19.2

Permitted Disclosure

 

21

19.3

Prior Advice and Related Obligations

 

22

19.4

Damages Not an Adequate Remedy

 

22

19.5

Survival of Obligation

 

22

 

 

 

 

20.

GOVERNING LAW

 

22

 

 

 

 

21.

NOTICES

 

22

 

 

 

 

22.

MISCELLANEOUS

 

23

22.1

Assignment

 

23

22.2

Variation

 

24

22.3

Waiver

 

24

22.4

Costs

 

24

22.5

Further Assurance

 

24

22.6

Severance

 

24

22.7

Entire Agreement

 

24

22.8

Counterparts

 

24

 

 

 

 

SCHEDULE 1 — CONCENTRATE SPECIFICATIONS

 

25

 

 

 

SIGNING PAGE

 

26

 

ii

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DETAILS

 

Parties

 

Producer and Buyer

 

 

 

 

Producer

 

Name

Talison Lithium Australia Pty Ltd

 

 

 

 

 

 

ABN

39 139 401 308

 

 

 

 

 

 

Address

Level 4, 37 St Georges Terrace, Perth, Western Australia, 6000

 

 

 

 

 

 

Fax

+61 8 9202 1144

 

 

 

 

 

 

Email

Lorry.Mignacca@talisonlithium.com and Emma.Hall@talisonlithium.com

 

 

 

 

 

 

Attention

CEO and Commercial Manager

 

 

 

 

Buyer

 

Name

Rockwood Lithium GmbH

 

 

 

 

 

 

Incorporated in

Germany

 

 

 

 

 

 

Address

Industriepark Höchst, Gebaude G 879, D-65926, Frankfurt am

 

 

 

 

 

 

Fax

+49 69 401 26-7 26 01

 

 

 

 

 

 

Email

Marcus.Brune@rockwoodlithium.com

 

 

 

 

 

 

Attention

Chief Financial Officer

 

 

 

 

Recitals

 

A

The Producer and the Buyer have agreed to enter into this off-take agreement in
relation to the sale by the Producer and the purchase by the Buyer of a
percentage of production of Concentrate from the Mining Operations owned by the
Producer.

 

 

 

 

 

 

B

The Buyer shall have the right to take in each Contract Year during the Term a
percentage of production of Concentrate up to the Maximum Offtake.

 

 

 

 

Date

 

See Signing page

 

1

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GENERAL TERMS

 

1.                                     DEFINITIONS AND INTERPRETATION

 

1.1                              Definitions

 

In this Agreement:

 

“Acquisition Agreement” means the agreement entered into on 29 November 2013
between RT Lithium Limited, Tianqi Group HK Co., Limited, Leader Investment
Corporation and Windfield, as amended and restated on 31 March 2014.

 

“Agreed Offtake Amount” has the meaning set out in clause 3.2(a).

 

“Agreement” means this agreement and its schedules.

 

“Affected Party” has the meaning set out in clause 12(a).

 

“Bank Account” means the bank account nominated by the Producer to the Buyer in
writing from time to time into which payments to the Producer under this
Agreement are to be made.

 

“Business Day” means a day which is not a Saturday, Sunday, or a public holiday
in Chengdu, Frankfurt or Perth.

 

“Care and Maintenance Suspension” has the meaning set out in clause 9(a).

 

“Commencement Date” means the date on which Completion occurs.

 

“Completion” means completion as defined in the Acquisition Agreement.

 

“Concentrate” means chemical-grade concentrate or other grade lithium
concentrate produced by the Producer from its Mining Operations that meets the
Specifications and used to convert to lithium carbonate, lithium hydroxide or
other lithium chemicals.

 

“Confidential Information” means:

 

(a)                                the existence of and terms of this Agreement;
or

 

(b)                                any unpublished information or documents
disclosed to a Party by the other Party in connection with this Agreement
(including information and documents supplied before the date of this
Agreement),

 

but excludes information or documents which:

 

(c)                                 at the time it was first disclosed to the
Party, was already in the lawful possession of the Party; or

 

(d)                                becomes available to the Party lawfully
through sources other than the other Party or its related bodies corporate.

 

“Confirmed Production” has the meaning set out in clause 3.1(b).

 

2

--------------------------------------------------------------------------------

 

“Consequential Loss” means any loss or damage suffered by a party which is
indirect or consequential loss or damage within the meaning of the common law
including loss of profits, loss of goodwill or credit and loss of opportunity,
however arising.

 

“Contract Year” means:

 

(a)                                for the first year, the period between the
Commencement Date and 31 December of that year;

 

(b)                                subject to paragraph (c), for every year
thereafter, the period between 1 January and 31 December inclusive; and

 

(c)                                 for the final year, the period between 1
January of that year and the date on which this Agreement expires or is earlier
terminated.

 

“Corporations Law” means the Corporations Act 2001 (Cth).

 

“Deliver” means the Producer delivering Concentrate to the Buyer at the Loading
Port in accordance with the terms of this Agreement, including in accordance
with an Indicative Delivery Schedule.

 

“Discharge Port” means the destination port for a vessel carrying Concentrate.

 

“Dispute” has the meaning set out in clause 11(a).

 

“End of Life of the Mining Operations” means the date on which the Producer
ceases to extract lithium ore from the Mining Operations, on the basis that it
has decided, in good faith and on reasonable grounds, that the ore reserve at
the Mining Operations has been depleted to such a level that it would be no
longer economically feasible to continue to extract lithium ore.

 

“Estimated Production” has the meaning set out in clause 3.1(a).

 

“FOB” means “Free on Board” as that term is defined or described in Incoterms®
2010.

 

“Force Majeure Event” has the meaning set out in clause 12(a).

 

“Independent Expert” has the meaning set out in clause 11(b).

 

“Indicative Delivery Schedule” has the meaning set out in clause 4.1(a), as such
Indicative Delivery Schedule may be amended pursuant to clause 4.1(b) from time
to time.

 

“Interest Rate” means the rate per annum being the sum of the Reference Rate on
which the payment was due, plus a margin of 5%, calculated daily, where the
Reference Rate is the arithmetic mean of the rates displayed at or about 10.30am
(Perth time) on the Reuters screen LIBOR page for USD for a 3 month term and, if
there is none, the Reference Rate will be the rate selected by the Producer as
equivalent.

 

“IMO” means the International Maritime Organisation.

 

3

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“Loading Port” means the Port of Bunbury or the Port of Fremantle or such other
port nominated by the Producer for loading of Concentrate for delivery by the
Producer.

 

“Maximum Offtake” means a quantity of Concentrate that equals the Offtake
Percentage of the Confirmed Production attributable to the relevant Contract
Year and that is not contracted to be sold to a third party under a contract
entered into before the Commencement Date.

 

“Mining Operations” means the Producer’s lithium operation known as the Talison
Greenbushes Lithium Operations located at Greenbushes, Western Australia,
including the mine site and processing plants.

 

“Offtake Estimate” has the meaning set out in clause 3.1(c)(ii).

 

“Offtake Nomination” has the meaning set out in clause 3.1(c)(i).

 

“Offtake Percentage” means:

 

(a)                                for so long as the Buyer or a related body
corporate of the Buyer is a holder of shares in Windfield, 50% of the Producer’s
actual production of Concentrate from the Mining Operations; or

 

(b)                                if the Buyer or a related body corporate of
the Buyer ceases to be a holder of shares in Windfield, the lesser of:

 

(i)                                  the quantity of the Producer’s actual
production of Concentrate from the Mining Operations taken by the Buyer during
the two Supply Periods immediately prior to the Buyer or a related body
corporate of the Buyer ceasing to be a holder of shares in Windfield; and

 

(ii)                               50% of the Estimated Production for the
Contract Year in which the Buyer or a related body corporate of the Buyer ceases
to be a holder of shares in Windfield,

 

provided that the quantity of Concentrate determined in accordance with
paragraph (b)(i) or (b)(ii) must not be more than 50% of the Estimated
Production in any Contract Year after the Buyer or a related body corporate of
the Buyer ceases to be a holder of shares in Windfield.

 

“Other Buyer” means Tianqi Group HK Co., Limited.

 

“Other Offtake Agreement” means the offtake agreement, on substantially the same
terms as this Agreement, entered into by the Other Buyer and the Producer on the
date of this Agreement.

 

“Party” means either the Producer or the Buyer and “Parties” means both Producer
and Buyer.

 

“Payment Date” means the due date for payment as shown in an invoice issued by
the Producer under this Agreement.

 

4

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“Penalties” has the meaning set out in clause 6.2(a).

 

“Price” has the meaning set out in clause 6.1(a).

 

“Production Percentage” has the meaning set out in clause 3.3(a).

 

“Shareholders Agreement” means the shareholders agreement entered into on 31
March 2014 between Chengdu Tianqi Group Co., Ltd., Tianqi Group HK Co., Limited,
Sichuan Tianqi Lithium Industries, Inc., Tianqi UK Limited, RT Lithium Limited
and Windfield.

 

“Specifications” has the meaning given in clause 8(a).

 

“Supply Period” means, for the first Supply Period, the period between the
Commencement Date and 30 June 2014 and, thereafter, the periods between 1 July
and 31 December inclusive and 1 January and 30 June inclusive.

 

“Telegraphic Transfer” means the electronic transfer of money affected by a
sending bank and a receiving bank from one bank account to another bank account.

 

“Term” has the meaning set out in clause 2(a).

 

“Windfield” means Windfield Holdings Pty Ltd (ACN 160 456 164).

 

“Windfield Group” means Windfield and each of its subsidiaries from time to time
and “Windfield Group Entity” means any one of them.

 

1.2                              Related Bodies Corporate

 

(a)                                Subject to paragraph (c), an entity is a
related body corporate of a person if it is a holding company, a subsidiary or
another subsidiary of a holding company of that person.

 

(b)                                Subject to paragraph (c), an entity is a
subsidiary of another person (its holding company) if that person, whether
directly or indirectly through one or more other subsidiaries:

 

(i)                                  holds a majority of the voting rights in
it;

 

(ii)                               is a member or shareholder of it and has the
right to appoint or remove a majority of its board of directors or equivalent
managing body;

 

(iii)                            is a member or shareholder of it and controls
alone, or pursuant to an agreement with other members or shareholders, a
majority of the voting rights in it; or

 

(iv)                           has the right to exercise a dominant influence
over it, for example by having the right to give directions with respect to its
operating and financial policies, with which directions its directors or other
officers are obliged to comply.

 

5

--------------------------------------------------------------------------------

 

(c)                                 In respect of the use of the terms related
body corporate, holding company and subsidiary in this agreement, no Windfield
Group Entity is a related body corporate of the Buyer and vice versa, such that
the Buyer is not a holding company of a Windfield Group Entity and no Windfield
Group Entity is a subsidiary of the Buyer.

 

1.3                              Interpretation

 

The following rules apply to the interpretation of this Agreement:

 

(a)                                the singular includes the plural and vice
versa, and a gender includes other genders;

 

(b)                                another grammatical form of a defined word or
expression has a corresponding meaning;

 

(c)                                 a reference to a document or instrument
includes the document or instrument as novated, altered, supplemented or
replaced from time to time;

 

(d)                                a reference to USD is to the currency of the
United States of America;

 

(e)                                 a reference to AUD is to the currency of
Australia;

 

(f)                                  a reference to a party is to a Party to
this Agreement, and a reference to a party to a document includes the party’s
officers, employees, executors, administrators, successors and permitted assigns
and substitutes;

 

(g)                                 a reference to a person includes a natural
person, partnership, body corporate, association, governmental or local
authority or agency or other entity;

 

(h)                                a reference to a statute, ordinance, code or
other law includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of any of them;

 

(i)                                    the meaning of general words is not
limited by specific examples introduced by including, for example or similar
expressions;

 

(j)                                   any agreement, representation, warranty or
indemnity by two or more parties (including where two or more persons are
included in the same defined term) binds them jointly and severally;

 

(k)                                any agreement, representation, warranty or
indemnity in favour of two or more parties (including where two or more persons
are included in the same defined term) is for the benefit of them jointly and
severally;

 

(l)                                    a rule of construction does not apply to
the disadvantage of a Party because the Party was responsible for the
preparation of this Agreement or any part of it;

 

(m)                            if a day on or by which an obligation must be
performed or an event must occur is not a Business Day, the obligation must be
performed or the event must occur on or by the next Business Day;

 

6

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(n)                                headings are for ease of reference only and
do not affect interpretation; and

 

(o)                                a Party is to be taken to discharge an
obligation under this Agreement or to exercise any right under this Agreement if
the obligation is discharged or the right is exercised by a related body
corporate of that Party.

 

2.                                     TERM

 

(a)                                Subject to early termination under clauses
2(b) or 13, the term of this Agreement shall be the period commencing on the
Commencement Date and ending on the later of:

 

(i)                                     the date which is 20 years after the
Commencement Date; and

 

(ii)                                  the end of the term of the Shareholders
Agreement,

 

(Term).

 

(b)                                This Agreement shall automatically terminate
on the End of Life of the Mining Operations.

 

(c)                                 If the Buyer (or its related body corporate)
ceases to be the holder of shares in Windfield, then the Parties will negotiate
in good faith to make such amendments as are necessarily required to ensure
compliance with applicable laws (including competition laws).

 

3.                                     QUANTITY

 

3.1                              Production and Offtake Nominations

 

(a)                                In conjunction with the preparation of the
draft Budget and Business Plan to be prepared in accordance with the
Shareholders Agreement and, in any event by not later than 4 months prior to the
commencement of each Contract Year (and within 3 months after the Commencement
Date in the case of the first Contract Year), the Producer and the Buyer must
consult in good faith to determine the quantity of Concentrate that the Producer
estimates will be produced in that Contract Year and the following Contract Year
(Estimated Production).  Upon making such determination, the Producer must
provide notice to the Buyer setting out the amount of the Estimated Production
so determined, with such notice to provide a breakdown of the Estimated
Production for each calendar quarter during the applicable Contract Years.

 

(b)                                By not later than 30 September of each
Contract Year (or within 4 months after the Commencement Date in the case of the
first Contract Year), the Producer must provide notice to the Buyer of the
confirmed production volumes for Concentrate in the following Contract Year
(Confirmed Production), with such notice to provide a breakdown of the estimated
production for each calendar quarter during the applicable Contract Year.

 

(c)                                 By not later than 30 October and 30 April of
each Contract Year (and within 5 months after the Commencement Date in the case
of the first Contract Year), the Buyer must:

 

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(i)                                  notify the Producer of the quantity of
Concentrate that the Buyer proposes to purchase in the next Supply Period,
expressed on a quarterly basis (Offtake Nomination); and

 

(ii)                               provide the Producer with an estimate of the
quantity of Concentrate that the Buyer is likely to purchase in the period
following the Supply Period for which the relevant Offtake Nomination is made
(Offtake Estimate).

 

The Buyer must not make an Offtake Nomination for a quantity of Concentrate that
would exceed the total amount of Confirmed Production for the relevant Supply
Period.

 

(d)                                The Buyer must only make an Offtake
Nomination for a quantity of Concentrate that it (or its related bodies
corporate) requires for manufacture into lithium carbonate or lithium hydroxide
or other lithium chemicals.  In order to ensure that the Producer can
independently sell and market Concentrate to third parties as contemplated by
paragraph 3.1(g) below, where the Buyer and Other Buyer do not collectively
elect to acquire 100% of Confirmed Production, the Buyer agrees that any
Concentrate purchased under this Agreement must be used for the manufacture of
lithium carbonate or lithium hydroxide or other lithium chemicals or for resale
to one or more related bodies corporate on the condition that they only use the
Concentrate for manufacture into lithium carbonate or lithium hydroxide or other
lithium chemicals and for no other purpose.

 

(e)                                 Subject to any other provision of this
Agreement to the contrary, the Producer must treat the Buyer on the same basis
as the Other Buyer in relation to the sale and purchase of Concentrate provided
for in this Agreement.

 

(f)                                  If:

 

(i)                                  the Other Buyer does not contract with the
Producer to take its maximum offtake of Concentrate for a Supply Period under
the Other Offtake Agreement; and

 

(ii)                               the Buyer has made an Offtake Nomination for
a quantity that exceeds the Maximum Offtake under this Agreement for that same
Supply Period,

 

then the Buyer will be obliged to purchase an amount of the Other Buyer’s
uncontracted quantity that is equal to the difference between the Other Buyer’s
offtake nomination and its maximum offtake during the applicable Supply Period,
provided however that the Buyer will not be required to purchase more than its
Offtake Nomination.

 

(g)                                 If:

 

(i)                                  the Buyer makes an Offtake Nomination that
is less than the Maximum Offtake under this Agreement for a Supply Period; and

 

8

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(ii)                               the Other Buyer has not made an offtake
nomination under the Other Offtake Agreement which would oblige it to purchase
any uncontracted quantity under this Agreement,

 

the Producer may sell such uncontracted quantity to third parties for the
purposes of conversion to lithium carbonate or lithium hydroxide or other
lithium chemicals only and for no other purpose. The sale to the third party may
be upon whatever terms the Producer (acting reasonably) thinks fit, having
regard to the market price at that time and provided that the price paid by the
third party is not less than the price payable under this Agreement.  The
Producer must use reasonable endeavours to include a provision in any contracts
entered into with third parties that reflects the intention that the Concentrate
sold be used for the purposes of conversion to lithium carbonate or lithium
hydroxide or other lithium chemicals only.

 

3.2                              Obligation to Take and Deliver

 

(a)                                The Producer must sell to the Buyer, and the
Buyer must purchase from the Producer, the quantity of Concentrate that the
Buyer notifies as its Offtake Nomination for each Supply Period or such other
amount as may be determined in accordance with clause 3.1(f) (in either case,
Agreed Offtake Amount).

 

(b)                                If the Buyer does not wish to take any amount
of Concentrate that it is obliged to purchase during a Supply Period pursuant to
paragraph (a), then the Buyer must provide notice to the Producer with
sufficient time to enable the Producer to sell that amount of Concentrate to a
third party.  If the Buyer provides notice pursuant to this paragraph (b), then:

 

(i)                                  the Producer must use reasonable endeavours
to sell such amount of Concentrate to third parties.  The sale to the third
party may be on whatever terms the Producer (acting reasonably) thinks fit,
having regard to the market price at that time and provided that the price paid
by the third party is not less than the price payable under this Agreement. 
Quantities of Concentrate sold by the Producer pursuant to this paragraph
(b)(i) will be deemed to have been delivered to the Buyer for the purpose of
determining whether the Producer has fulfilled its obligations to Deliver
Concentrate to the Buyer under this Agreement; and

 

(ii)                               if, notwithstanding this paragraph (b), the
Producer is unable to sell any amount of Concentrate to which this paragraph
(b) applies, then the Buyer must purchase that amount of Concentrate on the
terms and conditions of this Agreement.

 

3.3                              Under and Over Production

 

(a)                                If the forecast production of Concentrate
from the Mining Operations is less than the Confirmed Production for the
relevant Contract Year, any quantity of Concentrate that may have been available
for sale to third parties under clause 3.1(g) is, if agreed by the Buyer and the
Other Buyer, to be made

 

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available to the Buyer (and the Other Buyer) under this clause and the quantity
of Concentrate that the Producer is obliged to Deliver to the Buyer will then be
determined by multiplying the Agreed Offtake Amount by the Production
Percentage, where the Production Percentage (expressed as a percentage) is
calculated as follows:

 

Production Percentage

 

=

 

Forecast Production for relevant Contract Year

 

x 100

Confirmed Production for relevant Contract Year

 

(b)                                If the forecast production of Concentrate
from the Mining Operations is more than the Confirmed Production for the
relevant Contract Year, the Producer must notify the Buyer (and the Other Buyer)
as soon as reasonably practicable of the over production and the Buyer may elect
to increase the quantity of Concentrate to be Delivered by the Producer. The
increased quantity of Concentrate nominated by the Buyer must not, unless
otherwise agreed between the Parties, exceed the amount determined by
multiplying the Agreed Offtake Amount by the Production Percentage.  No amount
of the excess of the actual production of Concentrate above the Confirmed
Production for the relevant Contract Year will be available for sale to third
parties until the Buyer (and the Other Buyer) has either elected to increase the
quantity of Concentrate to be delivered or has notified the Producer that it
does not wish to increase the quantity of Concentrate.

 

(c)                                 In order to determine whether the Producer
has delivered the Agreed Offtake Amount, the Producer must, upon request,
provide reasonable evidence and records to the Buyer at the end of each Contract
Year in relation to the total quantity of Concentrate produced in that Contract
Year.

 

4.                                     DELIVERY AND SHIPPING

 

4.1                              Delivery

 

(a)                                The Producer and the Buyer must consult in
good faith to determine an indicative delivery schedule for each Supply Period
(Indicative Delivery Schedule) in conjunction with the Offtake Nomination to be
made in respect of that Supply Period.  The Indicative Delivery Schedule must
specify the quantity of Concentrate anticipated to be Delivered each month
during the relevant Supply Period.

 

(b)                                Subject to clause 3.3, the Producer will use
all reasonable endeavours to Deliver Concentrate to the Buyer in accordance with
the Indicative Delivery Schedule. Each Party must inform the other Party as soon
as practicable after it becomes aware of any circumstances that may have a
material impact on the Indicative Delivery Schedule and the Parties agree to
negotiate in good faith to agree mutually acceptable amendments to the
Indicative Delivery Schedule.

 

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(c)                                 Prior to each calendar quarter (commencing 1
January, 1 April, 1 July and 1 October), the Producer must provide the Buyer
with a forecast of its anticipated production for the succeeding quarter, and
propose any necessary adjustment to the Indicative Delivery Schedule arising
from any difference in the then anticipated production compared with the
Confirmed Production provided under clause 3.1(b).

 

(d)                                Unless otherwise agreed by the Parties
(acting reasonably), Concentrate must be Delivered to the Buyer by the Producer
on an FOB basis to the Loading Port nominated in the Indicative Delivery
Schedule.

 

(e)                                 All packaging of Concentrate for Delivery
must be in bulk.  Delivery of Concentrate in smaller quantities will be to the
Buyer’s cost.

 

4.2                              Deliveries of Out of Specification Concentrate

 

(a)                                If at any time prior to the loading of a
vessel or truck for Delivery to the Buyer, the Producer determines that any
delivery of Concentrate will not meet the Specifications, the Producer must
provide notice of this to the Buyer as soon as practicable.

 

(b)                                Upon receipt of a notice pursuant to
paragraph (a), the Producer and the Buyer will meet to discuss in good faith the
most appropriate steps to be taken having regard to the interests of both
Parties.  If the Parties are unable to agree the most appropriate steps to be
taken within 30 days of the notice being given under paragraph (a), then the
Buyer may elect to reject the Concentrate the subject of the proposed delivery.

 

(c)                                 If the Buyer rejects any delivery of
Concentrate pursuant to paragraph (b):

 

(i)                                  the Producer must first offer to sell that
Delivery of Concentrate to the Other Buyer; or

 

(ii)                               if the Other Buyer does not elect to take
that Delivery of Concentrate, the Producer may offer to sell that Concentrate to
a third party,

 

in either case, and notwithstanding any other provision of this Agreement, at
such price as the Producer may determine in its sole discretion.

 

4.3                              Transport and Shipping

 

(a)                                The Producer will organise:

 

(i)                                  the transportation of Concentrate for
Delivery from the Mining Operations to the Loading Port, the cost of which will
be borne by the Producer; and

 

(ii)                               such other transportation, shipping and
logistics services from the Loading Port to the place of destination as may be
required by the Buyer, including arranging for vessels to transport Concentrate,
scheduling and notification of arrival of vessels, freight, packaging, handling
and storing of Concentrate and such other transportation and

 

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shipping logistics services from the Loading Port to the place of destination as
may be required by the Buyer on a full cost recovery basis.

 

(b)                                Subject to paragraph (c), if the Producer
enters into any arrangements with third parties for the provision of
transportation, shipping and logistics services from the Loading Port to the
place of destination for the purposes of any shipment of Concentrate to be
delivered to the Buyer pursuant to paragraph (a)(ii), then all risks relating
to, and any liabilities associated with, such arrangements shall be borne by the
Buyer.

 

(c)                                 Where any such transportation, shipping and
logistics services arrangements entered into with third parties are not used
solely for the purposes of Concentrate to be delivered to the Buyer, any risks
and liabilities to be borne by the Buyer under paragraph (b) shall be determined
based on the proportion that the amount of Concentrate to be delivered to the
Buyer bears to the aggregate of all amounts of Concentrate in respect of which
the applicable services are being used.

 

4.4                              FOB Loading Terms at Loading Port

 

The Producer is responsible for loading the Concentrate on to the carrying
vessel at the Loading Port at its own risk and expense.

 

4.5                              Insurance

 

The Producer must maintain with reputable insurance companies such insurances as
to cover the Mining Operations against such risks and perils and in such amounts
customary in the case of similar operations, including:

 

(a)                                public (third party) liability and property
damage to a limit of not less than AUD20,000,000 per event and in the aggregate;
and

 

(b)                                road transport and loading cargo insurance
for all Deliveries on an FOB basis to cover all cargo against loss, damage and
theft.

 

5.                                     WEIGHING AND SAMPLING

 

5.1                              Loading Port

 

At the Loading Port, the Producer (at the Producer’s expense) must, in
accordance with the Producer’s standard practice, weigh, sample and determine
the assay of the Concentrate loaded on to each carrying vessel for Delivery to
the Buyer.

 

5.2                              Documentation for Buyer

 

As soon as practicable after the loading of each carrying vessel for Delivery to
the Buyer, the Producer must provide to the Buyer:

 

(a)                                a certificate setting out details of the
weight, sample and assay of the Concentrate as determined by the Producer in
accordance with clause 5.1, such certificate to include analysis by reference to
the Specifications; and

 

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(b)                                a complete set of three original FOB bills of
lading.

 

The certificate provided by the Producer under paragraph (a) will be final and
binding in the absence of manifest error.

 

5.3                              Discharge Port

 

At the Discharge Port, the Buyer (at the Buyer’s expense) may conduct its own
weighing, sampling and determination of the assay of the Concentrate discharged
from each carrying vessel for delivery to the Buyer.  Such weighing, sampling
and determination of the assay of the Concentrate by the Buyer will not impact
upon the Producer’s determination of those matters in accordance with clause
5.1.

 

6.                                     PRICE

 

6.1                              Price

 

(a)                                The Parties will negotiate in good faith to
agree, by not later than 30 October and 30 April of each Contract Year, the
price payable for Concentrate to be sold and purchased under this Agreement for
the following Supply Period.  Such price must be an FOB price that is:

 

(i)                                  if there are sales to any person that is
not the Buyer or the Other Buyer (or their respective related bodies corporate),
based on the prevailing market price payable for Concentrate by third parties;
or

 

(ii)                               if there are no sales to third parties, based
on the last third party price paid for Concentrate produced by the Producer as
adjusted to reflect increases or decreases in the global lithium carbonate price
from time to time,

 

(in either case, the Price).

 

(b)                                If the Parties are unable to agree the Price
for a Supply Period within the time period specified in paragraph (a), then:

 

(i)                                  either Party has the right to request that
an Independent Expert provides a determination in accordance with the applicable
provisions of clause 11 that the information being discussed by the Parties for
the purposes of agreeing the Price is correct and accurate in all material
respects; and

 

(ii)                               until such time as the Parties are able to
agree a Price, the Price in the previous Supply Period will apply.

 

(c)                                 The Price for Concentrate purchased by the
Buyer under this Agreement will be the same as the price on an FOB basis paid by
the Other Buyer pursuant to the Other Offtake Agreement for Concentrate of the
same Specifications.

 

(d)                                Any sales of Concentrate to third parties
must be for a price that is not less than the price payable under this
Agreement.

 

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6.2                              Penalties

 

(a)                                The Producer and the Buyer must enter into
good faith discussions to determine the penalties that will apply if the
Concentrate Delivered by the Producer does not meet the Specifications
(Penalties).  For the purposes of this paragraph (a), each Party agrees that it
will not adopt positions during any good faith discussions that are intended to
create an economic advantage for that Party.

 

(b)                                No Penalty can apply to any Delivery of
Concentrate which meets the Specifications.

 

7.                                     PAYMENT

 

7.1                              Payment

 

(a)                              The Producer will issue an invoice for each
Delivery of Concentrate.  The amount of the invoice will be calculated on the
basis of the information stated in the certificate provided by the Producer in
accordance with clause 5.2 and the applicable Price.

 

(b)                              The Buyer must pay each invoice by Telegraphic
Transfer to the Bank Account in immediately available funds on or before the
Payment Date shown in the invoice (being no less than 60 days after the relevant
bill of lading).

 

7.2                              Disputed Amounts

 

If a Party disputes an amount payable by it under this clause 7, that Party
shall pay any undisputed amount in accordance with this clause 7.

 

7.3                              Evidence of Basis of Calculations

 

Upon request by the Buyer, the Producer shall provide the Buyer with all
documents or other information reasonably necessary to support the amount of any
invoice issued by the Producer.

 

7.4                              Interest

 

If the Buyer does not pay an amount payable by it under this Agreement by the
Payment Date for the relevant amount, then interest accrues on any unpaid amount
at the Interest Rate from the Payment Date until that amount is paid in full.
The right of the Producer to require payment of interest under this clause is
without prejudice to any other rights it may have against the Buyer at law or in
equity.

 

8.                                     SPECIFICATIONS

 

(a)                                Subject to paragraph (b), Concentrate
delivered by the Producer to the Buyer must meet the specifications set out in
Schedule 1, as such specifications may be adjusted in accordance with paragraph
(c) (Specifications).

 

(b)                                At all times, the Producer must ensure that
the moisture content of the Concentrate is at a level which ensures that the
Concentrate is capable of bulk

 

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shipment by vessel in accordance with IMO regulations, is free flowing and is
suitable for grab discharge and conveyor handling.

 

(c)                                 If, as a consequence of changes in the ore
body at the Mining Operations, Concentrate to be Delivered by the Producer to
the Buyer under this Agreement may not meet the Specifications, the Parties
agree to negotiate in good faith with a view to agreeing amendments to the
specifications set out in Schedule 1. Such negotiations are to be conducted in a
timely manner in order to ensure that the Parties can continue to perform their
obligations under this Agreement.

 

9.                                     TEMPORARY CLOSURE — CARE AND MAINTENANCE

 

(a)                                If the Producer, acting in good faith and on
reasonable grounds, determines that it is not economically feasible to operate
the Mining Operations, the Producer may temporarily suspend operations and is
relieved of its obligations to sell and deliver Concentrate under this Agreement
(Care and Maintenance Suspension) but only after providing the Buyer with no
less than 12 months prior written notice of its intention to suspend operations
for such period.

 

(b)                                If the Producer proposes to recommence
production at the Mining Operations following a Care and Maintenance Suspension
then:

 

(i)                                  the Producer must, as soon as practicable,
notify the Buyer in writing that it intends to recommence production at the
Mining Operations;

 

(ii)                               if the period of the Care and Maintenance
Suspension is greater than 3 months, the Buyer may, purchase Concentrate from
other sources until the Care and Maintenance Suspension longer applies; and

 

(iii)                            unless the Buyer terminates this Agreement, the
Producer is no longer relieved from its obligations to sell and deliver
Concentrate under this Agreement.

 

10.                              TITLE AND RISK

 

10.1                       Risk

 

All risk of loss or destruction of the Concentrate or damage to the Concentrate
in connection with each Delivery of Concentrate shall pass from the Producer to
the Buyer at the moment the Concentrate in that Delivery is fully loaded onto
the carrying vessel at the Loading Port.

 

10.2                       Title

 

Title to the Concentrate in each Delivery shall pass from the Producer to the
Buyer upon the Concentrate in that Delivery being fully loaded onto the carrying
vessel at the Loading Port.

 

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11.                              DISPUTE RESOLUTION

 

(a)                                If there is a dispute between the Parties
relating to the Agreement that is stated to be resolved by reference to an
Independent Expert (Dispute), senior representatives from each Party must first
meet promptly and use all reasonable endeavours acting in good faith to resolve
the Dispute by joint discussions.

 

(b)                                If the Parties are unable to resolve a
Dispute in accordance with paragraph (a), the Parties agree to resolve the
Dispute by referring the Dispute to an independent expert (Independent Expert).

 

(c)                                 The Independent Expert must be:

 

(i)                                  a person, agreed to by the Buyer and the
Producer, who is of good repute with expertise and extensive experience in the
lithium concentrate industry which expertise and extensive experience must be
relevant to the matters to be decided (and that person must have no direct or
indirect personal interest in the outcome of the dispute); or

 

(ii)                               if the Buyer and the Producer cannot agree
within 10 Business Days of either Party sending a notice to the other of a
Dispute, a person nominated by the Chairman of the Institute of Arbitrators &
Mediators Australia (Western Australian Chapter) or his or her nominee.

 

(d)                                Upon the appointment of an Independent
Expert, the Buyer and the Producer must each submit to the Independent Expert in
writing their positions in relation to the Dispute setting out in adequate
detail the reasons why their position is appropriate.

 

(e)                                 The Independent Expert must then promptly
determine the Dispute and provide the Parties with a written determination with
reasons.

 

(f)                                  In making his or her determination, the
Independent Expert is entitled to:

 

(i)                                  seek the assistance of an accountant,
lawyer, barrister or other expert where the Dispute involves a matter or
question which the Independent Expert is not qualified to consider;

 

(ii)                               make inquiries and receive further
information from the Parties as he or she may require for the purposes of the
determination, provided that both Parties must be copied on any such inquiry;
and

 

(iii)                            set a timeline and procedure to which the
Parties must adhere during the course of the Dispute process, including
confidentiality obligations, preparation of submissions and answers to
questions.

 

(g)                                 The Parties agree to cooperate fully in the
expeditious conduct of the Independent Expert’s determination and provide the
Independent Expert with access to all facilities, books, records, documents,
information and personnel necessary to make a fully informed decision in an
expeditious manner.

 

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(h)                                The Independent Expert shall have no ex parte
communications with any of the Parties concerning his or her determination.

 

(i)                                    A decision of the Independent Expert is
final and binding on the Buyer and the Producer, except in the case of manifest
error.

 

(j)                                   Unless the Independent Expert, in his or
her absolute discretion, determines that the conduct of any Party is such that
it should bear all or a greater proportion, the costs and fees of the
Independent Expert will be shared equally by the Buyer and the Producer.

 

12.                              FORCE MAJEURE

 

(a)                                If a Party is prevented in whole or in part
from carrying out its obligations under this Agreement (other than an obligation
to pay money) as a result of any strike, act of God, war, lockout, interference
of trade unions, act of government or government appointed agents, suspension of
labour, fire, earthquake, flood, storm, tempest, accident, interruption to power
or water supply, lack of freight facilities or delays on route, refusal of any
necessary import or export licence or any other cause (a “Force Majeure Event”)
beyond the reasonable control of the Party so prevented (the “Affected Party”),
then, subject to paragraph (b), and provided the Affected Party:

 

(i)                                     gives prompt written notice to the other
Party of the occurrence of the nature and expected duration of the Force Majeure
Event; and

 

(ii)                                  has taken all proper precautions, due care
and reasonable alternative measures with the object of avoiding and mitigating
the effects of the Force Majeure Event and of carrying out its obligations,

 

the obligations of the Affected Party which cannot be performed (other than an
obligation to pay money) shall be suspended during the period in which the Force
Majeure Event continues, provided that should a shipment be suspended for more
than 1 month after the giving of the notice referred to in sub-paragraph
(a)(i) either the Buyer or the Producer may at its option cancel the shipment or
delivery.

 

(b)                                The Affected Party agrees to use its
reasonable efforts to remedy any Force Majeure Event to the extent that it is
reasonably possible to do so, it being understood that it is not required under
paragraph (a) to settle any labour dispute against its will or to test the
validity or refrain from testing the validity of any law, order or regulation. 
Once any Force Majeure Event has been cured, the Producer will recommence supply
to the Buyer and the Other Buyer in priority to any other customers and in
proportion to their relevant unfulfilled supply obligations.

 

(c)                                 Subject to paragraph (d), where the Producer
has declared a Force Majeure Event and such Force Majeure Event has prevented it
from Delivering Concentrate under this Agreement, it shall be entitled to deduct
the amount of Concentrate which it was prevented from Delivering from the
quantity to which its obligation under clause 3.2(a) of this Agreement applies.

 

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(d)                                If the Force Majeure Event has prevented
Delivery of Concentrate but not prevented ore being mined from the Mining
Operations, the Producer shall not be entitled to deduct amount of Concentrate
as contemplated by paragraph (c).

 

(e)                                 If the Buyer is the Affected Party and the
Force Majeure Event prevents it from taking Delivery at the Loading Port, the
Producer will be entitled to sell Concentrate to third parties upon whatever
terms the Producer (acting reasonably) thinks fit, having regard to the relevant
Price.  Quantities of Concentrate sold in accordance with this paragraph are
deemed to have been delivered to the Buyer for the purpose of determining
whether the Producer has fulfilled its obligations to deliver Concentrate to the
Buyer under this Agreement.

 

(f)                                  If, despite reasonable efforts on the part
of the Affected Party to avoid or mitigate the effects of an Event of Force
Majeure, the circumstances described in paragraph (a) continue substantially
unabated for a period of 6 months from the date of the notice given under that
paragraph:

 

(i)                                   the Parties must negotiate in good faith
to find a resolution of the circumstances; and

 

(ii)                                if they are unable to agree upon a
resolution within 90 days after the expiry of the period of 6 months, either
Party may terminate this Agreement upon 30 days notice in writing without
prejudice to any other rights of the Parties accrued prior to the date of
termination.

 

13.                              TERMINATION

 

(a)                                Either Party may terminate this Agreement
immediately by notice to the other Party if the other Party commits a material
breach of this Agreement, unless:

 

(i)                                   the breach is capable of remedy, in which
case a Party may terminate this Agreement immediately by notice to the other
Party if the other Party fails to remedy the breach within 30 days after being
required in writing to do so; or

 

(ii)                                the breach relates to payment in respect of
which there is a bona fide dispute outstanding between the Parties as to the
quantum of a payment to be made.

 

(b)                                Each party’s further rights and obligations
cease immediately on termination of this Agreement but termination does not
affect:

 

(i)                                   a party’s accrued rights and obligations
at the date of termination; and

 

(ii)                                the continued existence and validity of the
rights and obligations of the parties under those clauses which are expressed to
survive termination and any provisions of this Agreement necessary for the
interpretation or enforcement of this Agreement.

 

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(c)                                 The termination of this Agreement does not
of itself give rise to any liability on the part of the Producer to pay any
compensation to the Buyer, including but not limited to, for loss of profits or
goodwill.

 

(d)                                The Producer is entitled to cancel all orders
placed by the Buyer prior to the date of termination which have been accepted by
the Producer without any liability of whatsoever nature to the Buyer.

 

14.                              LIMIT OF LIABILITY

 

(a)                                Despite any other provision in this Agreement
and to the maximum extent permitted by law, neither Party will have any
liability to the other for any Consequential Loss howsoever arising (including
as a result of negligence or breach of any statutory duty).

 

(b)                                Subject to paragraph (a), the Parties are
entitled to all remedies available to them (including damages) for breach of any
term of this Agreement.

 

15.                              GOODS AND SERVICES TAX

 

15.1                       Interpretation

 

Words or expressions used in this clause which are defined in the A New Tax
System (Goods and Services Tax) Act 1999 (Cth) or in the A New Tax System (Goods
and Services Tax) Regulations 1999 (Cth) have the same meaning in this clause.

 

15.2                       Consideration is GST Exclusive

 

Any consideration to be paid or provided to a Party for a supply made by that
Party under or in connection with this Agreement is stated exclusive of GST.

 

15.3                       Gross Up of Consideration

 

Despite any other provision in this Agreement, if a Party (Supplying Party)
makes a taxable supply under or in connection with this Agreement on which GST
is imposed:

 

(a)                                the consideration payable or to be provided
for that supply under this Agreement but for the application of this clause (GST
exclusive consideration) is increased by, and the recipient of the supply
(Receiving Party) must also pay to the Supplying Party, an amount equal to the
GST exclusive consideration multiplied by the rate of GST applicable to the
supply; and

 

(b)                                subject to the Supplying Party giving the
Receiving Party a Tax Invoice in relation to that supply, the amount by which
the GST exclusive consideration is increased must be paid to the Supplying Party
by the Receiving Party without set off, deduction or requirement for demand, on
or before the Payment Date shown on the tax invoice.

 

19

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15.4                       Reimbursements (Net Down)

 

If a payment to a Party under this Agreement is a reimbursement or
indemnification, calculated by reference to a loss, cost or expense incurred by
that Party, then the payment will be reduced by the amount of any input tax
credit to which that Party is entitled for that loss, cost or expense.

 

15.5                       Requirements for Tax Invoices

 

Where the Producer is required to provide a Tax Invoice to the Buyer, the Tax
Invoice must comply with the requirements of the GST Law (as a Tax Invoice) and
must, unless inconsistent with the GST Law, specify:

 

(a)                                the Producer’s Australian Business Number;

 

(b)                                the Price due to Producer and the basis of
its calculation;

 

(c)                                 the amount of any GST paid or payable by the
Producer with respect to the Price;

 

(d)                                the date of Delivery of the Concentrate to
which the Tax Invoice relates;

 

(e)                                 a description (including quantity) of the
Concentrate delivered;

 

(f)                                  if a discount is applicable, the discounted
Price; and

 

(g)                                 the Producer’s address for payment.

 

16.                              VIENNA CONVENTION

 

The Parties exclude any application of the United Nations Convention on
Contracts for the International Sale of Goods adopted at Vienna, Australia on 11
April 1980, as given effect by the Sale of Goods (Vienna Convention) Act 1986
(WA) or any accession to or adoption of that convention at any time hereafter by
the country in which the place of business of the Buyer is situated, to the sale
and purchase of Concentrate under this Agreement.

 

17.                              FAIRNESS

 

If there are changes in circumstances which the parties could not foresee at the
time of entering into this Agreement, the Party concerned must contact the other
Party and they will in good faith use their best endeavours to find an agreeable
solution.  However, failure to find an agreeable solution will not result in a
termination of this Agreement or relieve a Party from its obligations under this
Agreement.

 

18.                              OBLIGATIONS OF PRODUCER

 

(a)                                The Producer must not transfer legal
ownership of the Mining Operations (directly or indirectly) to another party
unless that party assumes all the rights and obligations under this Agreement by
means of a deed of novation or similar instrument on terms reasonably acceptable
to the Buyer.

 

20

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(b)                                The Producer shall use all reasonable
endeavours to conduct its operations in relation to its Mining Operations in a
good, workmanlike and commercially reasonable manner, in accordance with
suitable engineering, mining and processing methods and practices with a view
to:

 

(i)                                  maximising its profitability;

 

(ii)                               ensuring that the Buyer receives its Offtake
Percentage in each Supply Period; and

 

(iii)                            continuing to develop the Mining Operations in
a prudent commercial manner to maximise the value from the ore body taking into
account the Buyer’s long term view of the lithium market and taking into account
the current reserves statement,

 

and the Producer acknowledges that, if it undertakes further mining developments
or operations in the vicinity of the Mining Operations, any Concentrate produced
from ore recovered as a result of such further mining developments or operations
will be subject to the terms of this Agreement.

 

19.                              CONFIDENTIALITY

 

19.1                       Confidentiality Restrictions

 

Subject to clause 19.2, a Party must not disclose, or use for a purpose other
than contemplated by this agreement, any Confidential Information.

 

19.2                       Permitted Disclosure

 

(a)                                A Party may disclose any Confidential
Information:

 

(i)                                   on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 19, to its
officers, employees, professional advisors, related bodies corporate, or the
officers, employees or professional advisors of its related bodies corporate;

 

(ii)                                in enforcing this Agreement or in a judicial
or arbitral proceeding arising out of or in connection with this Agreement;

 

(iii)                             to the extent required by law or the rules of
any securities exchange on which any securities of the Party or a related body
corporate of the Party are quoted;

 

(iv)                            to the extent required or permitted by this
Agreement; or

 

(v)                               with the prior consent of the Party which
originally supplied that Confidential Information (the disclosing Party) in
connection with this agreement.

 

(b)                                A Party may disclose Confidential
Information:

 

21

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(i)                                  to the extent necessary in connection with
a capital raising by the Party or a related body corporate of the Party;

 

(ii)                               on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 19, to:

 

(A)                             a bona fide proposed or prospective purchaser of
any shares from the Party;

 

(B)                             a bona fide current, proposed or prospective
financier of the Party or a related body corporate of the Party; or

 

(C)                             officers, employees or professional advisors of
such purchaser or financier.

 

19.3                       Prior Advice and Related Obligations

 

In the case of any disclosure of Confidential Information pursuant to
clause 19.2(a)(iii), the Party must:

 

(a)                                notify the disclosing Party before or, if
this is not practical, as soon as the disclosure is made; and

 

(b)                                use reasonable endeavours to (and assist the
disclosing Party at the disclosing Party’s expense to) restrict distribution of
the Confidential Information and otherwise take all reasonable steps to preserve
its confidentiality.

 

19.4                       Damages Not an Adequate Remedy

 

Each Party acknowledges that:

 

(a)                                damages will not be an adequate remedy for
any breach of this clause 19; and

 

(b)                                specific performance and injunctive relief
are appropriate remedies for any threatened or actual breach (without the need
to give an undertaking as to damages), in addition to any other remedies
available at law or in equity under or independently of this agreement.

 

19.5                       Survival of Obligation

 

This clause 19 survives and continues to bind the parties for two years
following termination of this agreement.

 

20.                              GOVERNING LAW

 

This Agreement shall be governed by the law in force in Western Australia and
each Party submits to the exclusive jurisdiction of the courts of Western
Australia in relation to the Agreement.

 

21.                              NOTICES

 

Any notice, demand, consent or other communication (a Notice) given or made
under this Agreement:

 

22

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(a)                                must be in writing in English and signed by
the sender or a person duly authorised by the sender (or in the case of email,
set out the full name and position or title of the sender or person duly
authorised by the sender);

 

(b)                                must be delivered to the intended recipient
by prepaid post (if posted to an address in another country, by registered
airmail) or by hand, fax or email to the address, fax number or email address
set out on page 1 or the address, fax number or email address last notified by
the intended recipient to the sender;

 

(c)                                 will be conclusively taken to be duly given
or made:

 

(i)                                   in the case of delivery in person, when
delivered;

 

(ii)                               in the case of delivery by post, two business
days after the date of posting (if posted to an address in the same country) or
seven business days after the date of posting (if posted to an address in
another country);

 

(iii)                            in the case of fax, on receipt by the sender of
a transmission control report from the despatching machine showing the relevant
number of pages and the correct destination fax number or name of recipient and
indicating that the transmission has been made without error; and

 

(iv)                            in the case of email, the earlier of:

 

(A)                             the time that the sender receives an automated
message from the intended recipient’s information system confirming delivery of
the email; and

 

(B)                             the time that the intended recipient, or an
employee or officer of the intended recipient acknowledges receipt,

 

but if the result is that a Notice would be taken to be given or made on a day
that is not a business day in the place specified by the intended recipient as
its postal address under paragraph (b), it will be conclusively taken to have
been duly given or made at the start of business on the next business day in
that place.

 

22.                              MISCELLANEOUS

 

22.1                       Assignment

 

(a)                                Subject to paragraph (b), neither Party may
assign this Agreement nor their rights and obligations hereunder without the
prior written consent of the other Party, which must not be unreasonably
withheld.

 

(b)                                The Buyer may nominate a related body
corporate as the entity that is to purchase Concentrate under this Agreement,
provided that the Buyer will remain responsible for the performance of its
obligations under this Agreement.

 

23

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22.2                       Variation

 

Variation of any term of this Agreement must be in writing and signed by the
Parties.

 

22.3                       Waiver

 

(a)                                An election not to exercise of any right,
power, authority discretion or remedy arising upon default under this Agreement
must be in writing and signed by the Party making the election.

 

(b)                                A failure or delay in exercise, or partial
exercise, of a right, power, authority, discretion or remedy created or arising
upon default under this Agreement, does not result in a waiver of that right.

 

(c)                                 A Party is not entitled to rely on a delay
in the exercise or non-exercise of a right, power, authority, discretion or
remedy arising from a breach of this Agreement or on a default under this
Agreement as constituting a waiver of that right, power, authority, discretion
or remedy.

 

(d)                                A Party may not rely on any conduct of
another Party as a defence to exercise of a right, power, authority, discretion
or remedy by that other Party.

 

22.4                       Costs

 

Each Party must pay its own costs and expenses of negotiating, preparing,
executing and performing its obligations under this Agreement.

 

22.5                       Further Assurance

 

Each Party must do all things and execute all further documents necessary to
give full effect to the transactions contemplated by this Agreement.

 

22.6                       Severance

 

If any provision of this Agreement is invalid and not enforceable in accordance
with its terms, all other provisions which are self-sustaining and capable of
separate enforcement without regard to the invalid provision, shall be and
continue to be valid and forceful in accordance with their terms.

 

22.7                       Entire Agreement

 

This Agreement constitutes the entire agreement of the parties about its subject
matter and supersedes all previous agreements, understandings and negotiations
on that subject matter.

 

22.8                       Counterparts

 

This Agreement may be executed in counterparts.  All executed counterparts
constitute one document.

 

EXECUTED as an agreement.

 

24

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SCHEDULE 1 — CONCENTRATE SPECIFICATIONS

 

Chemical Grade Spodumene SC 6.0 or other grades of Spodumene for conversion  to
Lithium Carbonate or Lithium Hydroxide or other Lithium chemicals

 

Chemical Properties

 

Chemical compound

 

Guaranteed %

Li2O

 

6.0 min

Fe2O3

 

1.0 max

Moisture

 

8 max

 

25

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SIGNING PAGE

 

Dated:

 

 

 

 

 

 

 

 

 

EXECUTED by TALISON LITHIUM AUSTRALIA PTY LTD in accordance with section
127(1) of the Corporations Act 2001 (Cth) by authority of its directors:

 

 

 

 

 

 

 

 

 

 

 

Signature of director

 

Signature of director/company secretary*

 

 

*delete whichever is not applicable

 

 

 

 

 

 

 

 

 

Name of director (block letters)

 

Name of director/company secretary*

 

 

(block letters)

 

 

*delete whichever is not applicable

 

 

 

 

 

 

Signed for ROCKWOOD LITHIUM GmbH by its authorised representative in the
presence of:

 

 

 

 

 

 

 

Authorised Representative Signature

 

 

 

 

 

 

 

 

 

Witness Signature

 

Print Name

 

 

 

 

 

 

 

 

 

Print Name

 

Position

 

--------------------------------------------------------------------------------

 

[g96561kk21i001.jpg]

CLIFFORD CHANCE

 

 

EXECUTION VERSION

 

TALISON LITHIUM AUSTRALIA PTY LTD

TIANQI GROUP HK CO., LIMITED

 

--------------------------------------------------------------------------------

 

OFF-TAKE AGREEMENT

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

CONTENTS

 

Clause

 

Page

 

 

 

DETAILS

 

1

 

 

 

GENERAL TERMS

 

2

 

 

 

1.

DEFINITIONS AND INTERPRETATION

 

2

1.1

Definitions

 

2

1.2

Related Bodies Corporate

 

5

1.3

Interpretation

 

6

 

 

 

 

2.

TERM

 

7

 

 

 

 

3.

QUANTITY

 

7

3.1

Production and Offtake Nominations

 

7

3.2

Obligation to Take and Deliver

 

9

3.3

Under and Over Production

 

10

 

 

 

 

4.

DELIVERY AND SHIPPING

 

10

4.1

Delivery

 

10

4.2

Deliveries of Out of Specification Concentrate

 

11

4.3

Transport and Shipping

 

11

4.4

FOB Loading Terms at Loading Port

 

12

4.5

Insurance

 

12

 

 

 

 

5.

WEIGHING AND SAMPLING

 

12

5.1

Loading Port

 

12

5.2

Documentation for Buyer

 

13

5.3

Discharge Port

 

13

 

 

 

 

6.

PRICE

 

13

6.1

Price

 

13

6.2

Penalties

 

14

 

 

 

 

7.

PAYMENT

 

14

7.1

Payment

 

14

7.2

Disputed Amounts

 

14

7.3

Evidence of Basis of Calculations

 

14

7.4

Interest

 

14

 

 

 

 

8.

SPECIFICATIONS

 

15

 

 

 

 

9.

TEMPORARY CLOSURE — CARE AND MAINTENANCE

 

15

 

 

 

 

10.

TITLE AND RISK

 

15

10.1

Risk

 

15

10.2

Title

 

16

 

 

 

 

11.

DISPUTE RESOLUTION

 

16

 

 

 

 

12.

FORCE MAJEURE

 

17

 

 

 

 

13.

TERMINATION

 

18

 

 

 

 

14.

LIMIT OF LIABILITY

 

19

 

 

 

 

15.

GOODS AND SERVICES TAX

 

19

 

i

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15.1

Interpretation

 

19

15.2

Consideration is GST Exclusive

 

19

15.3

Gross Up of Consideration

 

19

15.4

Reimbursements (Net Down)

 

20

15.5

Requirements for Tax Invoices

 

20

 

 

 

 

16.

VIENNA CONVENTION

 

20

 

 

 

 

17.

FAIRNESS

 

20

 

 

 

 

18.

OBLIGATIONS OF PRODUCER

 

21

 

 

 

 

19.

CONFIDENTIALITY

 

21

19.1

Confidentiality Restrictions

 

21

19.2

Permitted Disclosure

 

21

19.3

Prior Advice and Related Obligations

 

22

19.4

Damages Not an Adequate Remedy

 

22

19.5

Survival of Obligation

 

22

 

 

 

 

20.

GOVERNING LAW

 

23

 

 

 

 

21.

NOTICES

 

23

 

 

 

 

22.

MISCELLANEOUS

 

24

22.1

Assignment

 

24

22.2

Variation

 

24

22.3

Waiver

 

24

22.4

Costs

 

24

22.5

Further Assurance

 

24

22.6

Severance

 

25

22.7

Entire Agreement

 

25

22.8

Counterparts

 

25

 

 

 

 

SCHEDULE 1 — CONCENTRATE SPECIFICATIONS

 

26

 

 

 

SIGNING PAGE

 

27

 

ii

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DETAILS

 

Parties

 

Producer and Buyer

 

 

 

 

 

Producer

 

Name

 

Talison Lithium Australia Pty Ltd

 

 

 

 

 

 

 

ABN

 

39 139 401 308

 

 

 

 

 

 

 

Address

 

Level 4, 37 St Georges Terrace, Perth, Western Australia, 6000

 

 

 

 

 

 

 

Fax

 

+61 8 9202 1144

 

 

 

 

 

 

 

Email

 

Lorry.Mignacca@talisonlithium.com and Emma.Hall@talisonlithium.com

 

 

 

 

 

 

 

Attention

 

CEO and Commercial Manager

 

 

 

 

 

Buyer

 

Name

 

Tianqi Group HK Co., Limited

 

 

 

 

 

 

 

Incorporated in

 

Hong Kong (Companies Registry No. 1778886)

 

 

 

 

 

 

 

Address

 

Room B, 14th Floor, Wah Hen Commercial Centre, 383 Henessy Road, Wanchai, Hong
Kong, China

 

 

 

 

 

 

 

Fax

 

+86 28 8518 3501

 

 

 

 

 

 

 

Email

 

vivianwu@tianqilithium.com

 

 

 

 

 

 

 

Attention

 

Vivian Wu

 

 

 

 

 

Recitals

 

A

 

The Producer and the Buyer have agreed to enter into this off-take agreement in
relation to the sale by the Producer and the purchase by the Buyer of a
percentage of production of Concentrate from the Mining Operations owned by the
Producer.

 

 

 

 

 

 

 

B

 

The Buyer shall have the right to take in each Contract Year during the Term a
percentage of production of Concentrate up to the Maximum Offtake.

 

 

 

 

 

Date

 

See Signing page

 

 

 

1

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GENERAL TERMS

 

1.                                     DEFINITIONS AND INTERPRETATION

 

1.1                              Definitions

 

In this Agreement:

 

“Acquisition Agreement” means the agreement entered into on 29 November 2013
between RT Lithium Limited, Tianqi Group HK Co., Limited, Leader Investment
Corporation and Windfield, as amended and restated on 31 March 2014.

 

“Agreed Offtake Amount” has the meaning set out in clause 3.2(a).

 

“Agreement” means this agreement and its schedules.

 

“Affected Party” has the meaning set out in clause 12(a).

 

“Bank Account” means the bank account nominated by the Producer to the Buyer in
writing from time to time into which payments to the Producer under this
Agreement are to be made.

 

“Business Day” means a day which is not a Saturday, Sunday, or a public holiday
in Chengdu, Frankfurt or Perth.

 

“Care and Maintenance Suspension” has the meaning set out in clause 9(a).

 

“Commencement Date” means the date on which Completion occurs.

 

“Completion” means completion as defined in the Acquisition Agreement.

 

“Concentrate” means chemical-grade concentrate or other grade lithium
concentrate produced by the Producer from its Mining Operations that meets the
Specifications and used to convert to lithium carbonate, lithium hydroxide or
other lithium chemicals.

 

“Confidential Information” means:

 

(a)                                the existence of and terms of this Agreement;
or

 

(b)                                any unpublished information or documents
disclosed to a Party by the other Party in connection with this Agreement
(including information and documents supplied before the date of this
Agreement),

 

but excludes information or documents which:

 

(c)                                 at the time it was first disclosed to the
Party, was already in the lawful possession of the Party; or

 

(d)                                becomes available to the Party lawfully
through sources other than the other Party or its related bodies corporate.

 

“Confirmed Production” has the meaning set out in clause 3.1(b).

 

2

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“Consequential Loss” means any loss or damage suffered by a party which is
indirect or consequential loss or damage within the meaning of the common law
including loss of profits, loss of goodwill or credit and loss of opportunity,
however arising.

 

“Contract Year” means:

 

(a)                                for the first year, the period between the
Commencement Date and 31 December of that year;

 

(b)                                subject to paragraph (c), for every year
thereafter, the period between 1 January and 31 December inclusive; and

 

(c)                                 for the final year, the period between 1
January of that year and the date on which this Agreement expires or is earlier
terminated.

 

“Corporations Law” means the Corporations Act 2001 (Cth).

 

“Deliver” means the Producer delivering Concentrate to the Buyer at the Loading
Port in accordance with the terms of this Agreement, including in accordance
with an Indicative Delivery Schedule.

 

“Discharge Port” means the destination port for a vessel carrying Concentrate.

 

“Dispute” has the meaning set out in clause 11(a).

 

“End of Life of the Mining Operations” means the date on which the Producer
ceases to extract lithium ore from the Mining Operations, on the basis that it
has decided, in good faith and on reasonable grounds, that the ore reserve at
the Mining Operations has been depleted to such a level that it would be no
longer economically feasible to continue to extract lithium ore.

 

“Estimated Production” has the meaning set out in clause 3.1(a).

 

“FOB” means “Free on Board” as that term is defined or described in Incoterms®
2010.

 

“Force Majeure Event” has the meaning set out in clause 12(a).

 

“Independent Expert” has the meaning set out in clause 11(b).

 

“Indicative Delivery Schedule” has the meaning set out in clause 4.1(a), as such
Indicative Delivery Schedule may be amended pursuant to clause 4.1(b) from time
to time.

 

“Interest Rate” means the rate per annum being the sum of the Reference Rate on
which the payment was due, plus a margin of 5%, calculated daily, where the
Reference Rate is the arithmetic mean of the rates displayed at or about 10.30am
(Perth time) on the Reuters screen LIBOR page for USD for a 3 month term and, if
there is none, the Reference Rate will be the rate selected by the Producer as
equivalent.

 

“IMO” means the International Maritime Organisation.

 

3

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“Loading Port” means the Port of Bunbury or the Port of Fremantle or such other
port nominated by the Producer for loading of Concentrate for delivery by the
Producer.

 

“Maximum Offtake” means a quantity of Concentrate that equals the Offtake
Percentage of the Confirmed Production attributable to the relevant Contract
Year and that is not contracted to be sold to a third party under a contract
entered into before the Commencement Date.

 

“Mining Operations” means the Producer’s lithium operation known as the Talison
Greenbushes Lithium Operations located at Greenbushes, Western Australia,
including the mine site and processing plants.

 

“Offtake Estimate” has the meaning set out in clause 3.1(c)(ii).

 

“Offtake Nomination” has the meaning set out in clause 3.1(c)(i).

 

“Offtake Percentage” means:

 

(a)                                for so long as the Buyer or a related body
corporate of the Buyer is a holder of shares in Windfield, 50% of the Producer’s
actual production of Concentrate from the Mining Operations; or

 

(b)                                if the Buyer or a related body corporate of
the Buyer ceases to be a holder of shares in Windfield, the lesser of:

 

(i)                                   the quantity of the Producer’s actual
production of Concentrate from the Mining Operations taken by the Buyer during
the two Supply Periods immediately prior to the Buyer or a related body
corporate of the Buyer ceasing to be a holder of shares in Windfield; and

 

(ii)                                50% of the Estimated Production for the
Contract Year in which the Buyer or a related body corporate of the Buyer ceases
to be a holder of shares in Windfield,

 

provided that the quantity of Concentrate determined in accordance with
paragraph (b)(i) or (b)(ii) must not be more than 50% of the Estimated
Production in any Contract Year after the Buyer or a related body corporate of
the Buyer ceases to be a holder of shares in Windfield.

 

“Other Buyer” means Rockwood Lithium GmbH.

 

“Other Offtake Agreement” means the offtake agreement, on substantially the same
terms as this Agreement, entered into by the Other Buyer and the Producer on the
date of this Agreement.

 

“Party” means either the Producer or the Buyer and “Parties” means both Producer
and Buyer.

 

“Payment Date” means the due date for payment as shown in an invoice issued by
the Producer under this Agreement.

 

4

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“Penalties” has the meaning set out in clause 6.2(a).

 

“Price” has the meaning set out in clause 6.1(a).

 

“Production Percentage” has the meaning set out in clause 3.3(a).

 

“Shareholders Agreement” means the shareholders agreement entered into on 31
March 2014 between Chengdu Tianqi Group Co., Ltd., Tianqi Group HK Co., Limited,
Sichuan Tianqi Lithium Industries, Inc., Tianqi UK Limited, RT Lithium Limited
and Windfield.

 

“Specifications” has the meaning given in clause 8(a).

 

“Supply Period” means, for the first Supply Period, the period between the
Commencement Date and 30 June 2014 and, thereafter, the periods between 1
July and 31 December inclusive and 1 January and 30 June inclusive.

 

“Telegraphic Transfer” means the electronic transfer of money affected by a
sending bank and a receiving bank from one bank account to another bank account.

 

“Term” has the meaning set out in clause 2(a).

 

“Windfield” means Windfield Holdings Pty Ltd (ACN 160 456 164).

 

“Windfield Group” means Windfield and each of its subsidiaries from time to time
and “Windfield Group Entity” means any one of them.

 

1.2                              Related Bodies Corporate

 

(a)                                Subject to paragraph (c), an entity is a
related body corporate of a person if it is a holding company, a subsidiary or
another subsidiary of a holding company of that person.

 

(b)                                Subject to paragraph (c), an entity is a
subsidiary of another person (its holding company) if that person, whether
directly or indirectly through one or more other subsidiaries:

 

(i)                                   holds a majority of the voting rights in
it;

 

(ii)                                is a member or shareholder of it and has the
right to appoint or remove a majority of its board of directors or equivalent
managing body;

 

(iii)                             is a member or shareholder of it and controls
alone, or pursuant to an agreement with other members or shareholders, a
majority of the voting rights in it; or

 

(iv)                            has the right to exercise a dominant influence
over it, for example by having the right to give directions with respect to its
operating and financial policies, with which directions its directors or other
officers are obliged to comply.

 

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(c)                                 In respect of the use of the terms related
body corporate, holding company and subsidiary in this Agreement

 

(i)                                   no Windfield Group Entity is a related
body corporate of the Buyer and vice versa, such that the Buyer is not a holding
company of a Windfield Group Entity and no Windfield Group Entity is a
subsidiary of the Buyer; and

 

(ii)                                Sichuan Tianqi Lithium Industries, Inc., and
its subsidiaries are deemed to be subsidiaries of Chengdu Tianqi Group Co., Ltd.
and Chengdu Tianqi Group Co., Ltd. a holding company of those entities.

 

1.3                              Interpretation

 

The following rules apply to the interpretation of this Agreement:

 

(a)                                the singular includes the plural and vice
versa, and a gender includes other genders;

 

(b)                                another grammatical form of a defined word or
expression has a corresponding meaning;

 

(c)                                 a reference to a document or instrument
includes the document or instrument as novated, altered, supplemented or
replaced from time to time;

 

(d)                                a reference to USD is to the currency of the
United States of America;

 

(e)                                 a reference to AUD is to the currency of
Australia;

 

(f)                                  a reference to a party is to a Party to
this Agreement, and a reference to a party to a document includes the party’s
officers, employees, executors, administrators, successors and permitted assigns
and substitutes;

 

(g)                                 a reference to a person includes a natural
person, partnership, body corporate, association, governmental or local
authority or agency or other entity;

 

(h)                                a reference to a statute, ordinance, code or
other law includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of any of them;

 

(i)                                    the meaning of general words is not
limited by specific examples introduced by including, for example or similar
expressions;

 

(j)                                   any agreement, representation, warranty or
indemnity by two or more parties (including where two or more persons are
included in the same defined term) binds them jointly and severally;

 

(k)                                any agreement, representation, warranty or
indemnity in favour of two or more parties (including where two or more persons
are included in the same defined term) is for the benefit of them jointly and
severally;

 

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(l)                                    a rule of construction does not apply to
the disadvantage of a Party because the Party was responsible for the
preparation of this Agreement or any part of it;

 

(m)                            if a day on or by which an obligation must be
performed or an event must occur is not a Business Day, the obligation must be
performed or the event must occur on or by the next Business Day;

 

(n)                                headings are for ease of reference only and
do not affect interpretation; and

 

(o)                                a Party is to be taken to discharge an
obligation under this Agreement or to exercise any right under this Agreement if
the obligation is discharged or the right is exercised by a related body
corporate of that Party.

 

2.                                     TERM

 

(a)                                Subject to early termination under clauses
2(b) or 13, the term of this Agreement shall be the period commencing on the
Commencement Date and ending on the later of:

 

(i)                                   the date which is 20 years after the
Commencement Date; and

 

(ii)                                the end of the term of the Shareholders
Agreement,

 

(Term).

 

(b)                                This Agreement shall automatically terminate
on the End of Life of the Mining Operations.

 

(c)                                 If the Buyer (or its related body corporate)
ceases to be the holder of shares in Windfield, then the Parties will negotiate
in good faith to make such amendments as are necessarily required to ensure
compliance with applicable laws (including competition laws).

 

3.                                     QUANTITY

 

3.1                              Production and Offtake Nominations

 

(a)                                In conjunction with the preparation of the
draft Budget and Business Plan to be prepared in accordance with the
Shareholders Agreement and, in any event by not later than 4 months prior to the
commencement of each Contract Year (and within 3 months after the Commencement
Date in the case of the first Contract Year), the Producer and the Buyer must
consult in good faith to determine the quantity of Concentrate that the Producer
estimates will be produced in that Contract Year and the following Contract Year
(Estimated Production).  Upon making such determination, the Producer must
provide notice to the Buyer setting out the amount of the Estimated Production
so determined, with such notice to provide a breakdown of the Estimated
Production for each calendar quarter during the applicable Contract Years.

 

(b)                                By not later than 30 September of each
Contract Year (or within 4 months after the Commencement Date in the case of the
first Contract Year), the Producer must provide notice to the Buyer of the
confirmed production volumes for

 

7

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Concentrate in the following Contract Year (Confirmed Production), with such
notice to provide a breakdown of the estimated production for each calendar
quarter during the applicable Contract Year.

 

(c)                                 By not later than 30 October and 30 April of
each Contract Year (and within 5 months after the Commencement Date in the case
of the first Contract Year), the Buyer must:

 

(i)                                   notify the Producer of the quantity of
Concentrate that the Buyer proposes to purchase in the next Supply Period,
expressed on a quarterly basis (Offtake Nomination); and

 

(ii)                                provide the Producer with an estimate of the
quantity of Concentrate that the Buyer is likely to purchase in the period
following the Supply Period for which the relevant Offtake Nomination is made
(Offtake Estimate).

 

The Buyer must not make an Offtake Nomination for a quantity of Concentrate that
would exceed the total amount of Confirmed Production for the relevant Supply
Period.

 

(d)                                The Buyer must only make an Offtake
Nomination for a quantity of Concentrate that it (or its related bodies
corporate) requires for manufacture into lithium carbonate or lithium hydroxide
or other lithium chemicals.  In order to ensure that the Producer can
independently sell and market Concentrate to third parties as contemplated by
paragraph 3.1(g) below, where the Buyer and Other Buyer do not collectively
elect to acquire 100% of Confirmed Production, the Buyer agrees that any
Concentrate purchased under this Agreement must be used for the manufacture of
lithium carbonate or lithium hydroxide or other lithium chemicals or for resale
to one or more related bodies corporate on the condition that they only use the
Concentrate for manufacture into lithium carbonate or lithium hydroxide or other
lithium chemicals and for no other purpose.

 

(e)                                 Subject to any other provision of this
Agreement to the contrary, the Producer must treat the Buyer on the same basis
as the Other Buyer in relation to the sale and purchase of Concentrate provided
for in this Agreement.

 

(f)                                  If:

 

(i)                                   the Other Buyer does not contract with the
Producer to take its maximum offtake of Concentrate for a Supply Period under
the Other Offtake Agreement; and

 

(ii)                                the Buyer has made an Offtake Nomination for
a quantity that exceeds the Maximum Offtake under this Agreement for that same
Supply Period,

 

then the Buyer will be obliged to purchase an amount of the Other Buyer’s
uncontracted quantity that is equal to the difference between the Other Buyer’s
offtake nomination and its maximum offtake during the applicable Supply

 

8

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Period, provided however that the Buyer will not be required to purchase more
than its Offtake Nomination.

 

(g)                                 If:

 

(i)                                   the Buyer makes an Offtake Nomination that
is less than the Maximum Offtake under this Agreement for a Supply Period; and

 

(ii)                                the Other Buyer has not made an offtake
nomination under the Other Offtake Agreement which would oblige it to purchase
any uncontracted quantity under this Agreement,

 

the Producer may sell such uncontracted quantity to third parties for the
purposes of conversion to lithium carbonate or lithium hydroxide or other
lithium chemicals only and for no other purpose. The sale to the third party may
be upon whatever terms the Producer (acting reasonably) thinks fit, having
regard to the market price at that time and provided that the price paid by the
third party is not less than the price payable under this Agreement.  The
Producer must use reasonable endeavours to include a provision in any contracts
entered into with third parties that reflects the intention that the Concentrate
sold be used for the purposes of conversion to lithium carbonate or lithium
hydroxide or other lithium chemicals only.

 

3.2                              Obligation to Take and Deliver

 

(a)                                The Producer must sell to the Buyer, and the
Buyer must purchase from the Producer, the quantity of Concentrate that the
Buyer notifies as its Offtake Nomination for each Supply Period or such other
amount as may be determined in accordance with clause 3.1(f) (in either case,
Agreed Offtake Amount).

 

(b)                                If the Buyer does not wish to take any amount
of Concentrate that it is obliged to purchase during a Supply Period pursuant to
paragraph (a), then the Buyer must provide notice to the Producer with
sufficient time to enable the Producer to sell that amount of Concentrate to a
third party.  If the Buyer provides notice pursuant to this paragraph (b), then:

 

(i)                                   the Producer must use reasonable
endeavours to sell such amount of Concentrate to third parties.  The sale to the
third party may be on whatever terms the Producer (acting reasonably) thinks
fit, having regard to the market price at that time and provided that the price
paid by the third party is not less than the price payable under this
Agreement.  Quantities of Concentrate sold by the Producer pursuant to this
paragraph (b)(i) will be deemed to have been delivered to the Buyer for the
purpose of determining whether the Producer has fulfilled its obligations to
Deliver Concentrate to the Buyer under this Agreement; and

 

(ii)                                if, notwithstanding this paragraph (b), the
Producer is unable to sell any amount of Concentrate to which this paragraph
(b) applies, then the

 

9

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Buyer must purchase that amount of Concentrate on the terms and conditions of
this Agreement.

 

3.3                              Under and Over Production

 

(a)                                If the forecast production of Concentrate
from the Mining Operations is less than the Confirmed Production for the
relevant Contract Year, any quantity of Concentrate that may have been available
for sale to third parties under clause 3.1(g) is, if agreed by the Buyer and the
Other Buyer, to be made available to the Buyer (and the Other Buyer) under this
clause and the quantity of Concentrate that the Producer is obliged to Deliver
to the Buyer will then be determined by multiplying the Agreed Offtake Amount by
the Production Percentage, where the Production Percentage (expressed as a
percentage) is calculated as follows:

 

Production
Percentage

 

=

 

Forecast Production for relevant Contract Year

 

x 100

Confirmed Production for relevant Contract Year

 

(b)                                If the forecast production of Concentrate
from the Mining Operations is more than the Confirmed Production for the
relevant Contract Year, the Producer must notify the Buyer (and the Other Buyer)
as soon as reasonably practicable of the over production and the Buyer may elect
to increase the quantity of Concentrate to be Delivered by the Producer. The
increased quantity of Concentrate nominated by the Buyer must not, unless
otherwise agreed between the Parties, exceed the amount determined by
multiplying the Agreed Offtake Amount by the Production Percentage.  No amount
of the excess of the actual production of Concentrate above the Confirmed
Production for the relevant Contract Year will be available for sale to third
parties until the Buyer (and the Other Buyer) has either elected to increase the
quantity of Concentrate to be delivered or has notified the Producer that it
does not wish to increase the quantity of Concentrate.

 

(c)                                 In order to determine whether the Producer
has delivered the Agreed Offtake Amount, the Producer must, upon request,
provide reasonable evidence and records to the Buyer at the end of each Contract
Year in relation to the total quantity of Concentrate produced in that Contract
Year.

 

4.                                     DELIVERY AND SHIPPING

 

4.1                              Delivery

 

(a)                                The Producer and the Buyer must consult in
good faith to determine an indicative delivery schedule for each Supply Period
(Indicative Delivery Schedule) in conjunction with the Offtake Nomination to be
made in respect of that Supply Period.  The Indicative Delivery Schedule must
specify the quantity of Concentrate anticipated to be Delivered each month
during the relevant Supply Period.

 

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(b)                                Subject to clause 3.3, the Producer will use
all reasonable endeavours to Deliver Concentrate to the Buyer in accordance with
the Indicative Delivery Schedule. Each Party must inform the other Party as soon
as practicable after it becomes aware of any circumstances that may have a
material impact on the Indicative Delivery Schedule and the Parties agree to
negotiate in good faith to agree mutually acceptable amendments to the
Indicative Delivery Schedule.

 

(c)                                 Prior to each calendar quarter (commencing 1
January, 1 April, 1 July and 1 October), the Producer must provide the Buyer
with a forecast of its anticipated production for the succeeding quarter, and
propose any necessary adjustment to the Indicative Delivery Schedule arising
from any difference in the then anticipated production compared with the
Confirmed Production provided under clause 3.1(b).

 

(d)                                Unless otherwise agreed by the Parties
(acting reasonably), Concentrate must be Delivered to the Buyer by the Producer
on an FOB basis to the Loading Port nominated in the Indicative Delivery
Schedule.

 

(e)                                 All packaging of Concentrate for Delivery
must be in bulk.  Delivery of Concentrate in smaller quantities will be to the
Buyer’s cost.

 

4.2                              Deliveries of Out of Specification Concentrate

 

(a)                                If at any time prior to the loading of a
vessel or truck for Delivery to the Buyer, the Producer determines that any
delivery of Concentrate will not meet the Specifications, the Producer must
provide notice of this to the Buyer as soon as practicable.

 

(b)                                Upon receipt of a notice pursuant to
paragraph (a), the Producer and the Buyer will meet to discuss in good faith the
most appropriate steps to be taken having regard to the interests of both
Parties.  If the Parties are unable to agree the most appropriate steps to be
taken within 30 days of the notice being given under paragraph (a), then the
Buyer may elect to reject the Concentrate the subject of the proposed delivery.

 

(c)                                 If the Buyer rejects any delivery of
Concentrate pursuant to paragraph (b):

 

(i)                                   the Producer must first offer to sell that
Delivery of Concentrate to the Other Buyer; or

 

(ii)                                if the Other Buyer does not elect to take
that Delivery of Concentrate, the Producer may offer to sell that Concentrate to
a third party,

 

in either case, and notwithstanding any other provision of this Agreement, at
such price as the Producer may determine in its sole discretion.

 

4.3                              Transport and Shipping

 

(a)                                The Producer will organise:

 

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(i)                                   the transportation of Concentrate for
Delivery from the Mining Operations to the Loading Port, the cost of which will
be borne by the Producer; and

 

(ii)                                such other transportation, shipping and
logistics services from the Loading Port to the place of destination as may be
required by the Buyer, including arranging for vessels to transport Concentrate,
scheduling and notification of arrival of vessels, freight, packaging, handling
and storing of Concentrate and such other transportation and shipping logistics
services from the Loading Port to the place of destination as may be required by
the Buyer on a full cost recovery basis.

 

(b)                                Subject to paragraph (c), if the Producer
enters into any arrangements with third parties for the provision of
transportation, shipping and logistics services from the Loading Port to the
place of destination for the purposes of any shipment of Concentrate to be
delivered to the Buyer pursuant to paragraph (a)(ii), then all risks relating
to, and any liabilities associated with, such arrangements shall be borne by the
Buyer.

 

(c)                                 Where any such transportation, shipping and
logistics services arrangements entered into with third parties are not used
solely for the purposes of Concentrate to be delivered to the Buyer, any risks
and liabilities to be borne by the Buyer under paragraph (b) shall be determined
based on the proportion that the amount of Concentrate to be delivered to the
Buyer bears to the aggregate of all amounts of Concentrate in respect of which
the applicable services are being used.

 

4.4                              FOB Loading Terms at Loading Port

 

The Producer is responsible for loading the Concentrate on to the carrying
vessel at the Loading Port at its own risk and expense.

 

4.5                              Insurance

 

The Producer must maintain with reputable insurance companies such insurances as
to cover the Mining Operations against such risks and perils and in such amounts
customary in the case of similar operations, including:

 

(a)                                public (third party) liability and property
damage to a limit of not less than AUD20,000,000 per event and in the aggregate;
and

 

(b)                                road transport and loading cargo insurance
for all Deliveries on an FOB basis to cover all cargo against loss, damage and
theft.

 

5.                                     WEIGHING AND SAMPLING

 

5.1                              Loading Port

 

At the Loading Port, the Producer (at the Producer’s expense) must, in
accordance with the Producer’s standard practice, weigh, sample and determine
the assay of the Concentrate loaded on to each carrying vessel for Delivery to
the Buyer.

 

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5.2                              Documentation for Buyer

 

As soon as practicable after the loading of each carrying vessel for Delivery to
the Buyer, the Producer must provide to the Buyer:

 

(a)                                a certificate setting out details of the
weight, sample and assay of the Concentrate as determined by the Producer in
accordance with clause 5.1, such certificate to include analysis by reference to
the Specifications; and

 

(b)                                a complete set of three original FOB bills of
lading.

 

The certificate provided by the Producer under paragraph (a) will be final and
binding in the absence of manifest error.

 

5.3                              Discharge Port

 

At the Discharge Port, the Buyer (at the Buyer’s expense) may conduct its own
weighing, sampling and determination of the assay of the Concentrate discharged
from each carrying vessel for delivery to the Buyer.  Such weighing, sampling
and determination of the assay of the Concentrate by the Buyer will not impact
upon the Producer’s determination of those matters in accordance with clause
5.1.

 

6.                                     PRICE

 

6.1                              Price

 

(a)                                The Parties will negotiate in good faith to
agree, by not later than 30 October and 30 April of each Contract Year, the
price payable for Concentrate to be sold and purchased under this Agreement for
the following Supply Period.  Such price must be an FOB price that is:

 

(i)                                   if there are sales to any person that is
not the Buyer or the Other Buyer (or their respective related bodies corporate),
based on the prevailing market price payable for Concentrate by third parties;
or

 

(ii)                                if there are no sales to third parties,
based on the last third party price paid for Concentrate produced by the
Producer as adjusted to reflect increases or decreases in the global lithium
carbonate price from time to time,

 

(in either case, the Price).

 

(b)                                If the Parties are unable to agree the Price
for a Supply Period within the time period specified in paragraph (a), then:

 

(i)                                   either Party has the right to request that
an Independent Expert provides a determination in accordance with the applicable
provisions of clause 11 that the information being discussed by the Parties for
the purposes of agreeing the Price is correct and accurate in all material
respects; and

 

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(ii)                                until such time as the Parties are able to
agree a Price, the Price in the previous Supply Period will apply.

 

(c)                                 The Price for Concentrate purchased by the
Buyer under this Agreement will be the same as the price on an FOB basis paid by
the Other Buyer pursuant to the Other Offtake Agreement for Concentrate of the
same Specifications.

 

(d)                                Any sales of Concentrate to third parties
must be for a price that is not less than the price payable under this
Agreement.

 

6.2                              Penalties

 

(a)                                The Producer and the Buyer must enter into
good faith discussions to determine the penalties that will apply if the
Concentrate Delivered by the Producer does not meet the Specifications
(Penalties).  For the purposes of this paragraph (a), each Party agrees that it
will not adopt positions during any good faith discussions that are intended to
create an economic advantage for that Party.

 

(b)                                No Penalty can apply to any Delivery of
Concentrate which meets the Specifications.

 

7.                                     PAYMENT

 

7.1                              Payment

 

(a)                                The Producer will issue an invoice for each
Delivery of Concentrate.  The amount of the invoice will be calculated on the
basis of the information stated in the certificate provided by the Producer in
accordance with clause 5.2 and the applicable Price.

 

(b)                                The Buyer must pay each invoice by
Telegraphic Transfer to the Bank Account in immediately available funds on or
before the Payment Date shown in the invoice (being no less than 60 days after
the relevant bill of lading).

 

7.2                              Disputed Amounts

 

If a Party disputes an amount payable by it under this clause 7, that Party
shall pay any undisputed amount in accordance with this clause 7.

 

7.3                              Evidence of Basis of Calculations

 

Upon request by the Buyer, the Producer shall provide the Buyer with all
documents or other information reasonably necessary to support the amount of any
invoice issued by the Producer.

 

7.4                              Interest

 

If the Buyer does not pay an amount payable by it under this Agreement by the
Payment Date for the relevant amount, then interest accrues on any unpaid amount
at the Interest Rate from the Payment Date until that amount is paid in full.
The right of

 

14

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the Producer to require payment of interest under this clause is without
prejudice to any other rights it may have against the Buyer at law or in equity.

 

8.                                     SPECIFICATIONS

 

(a)                                Subject to paragraph (b), Concentrate
delivered by the Producer to the Buyer must meet the specifications set out in
Schedule 1, as such specifications may be adjusted in accordance with paragraph
(c) (Specifications).

 

(b)                                At all times, the Producer must ensure that
the moisture content of the Concentrate is at a level which ensures that the
Concentrate is capable of bulk shipment by vessel in accordance with IMO
regulations, is free flowing and is suitable for grab discharge and conveyor
handling.

 

(c)                                 If, as a consequence of changes in the ore
body at the Mining Operations, Concentrate to be Delivered by the Producer to
the Buyer under this Agreement may not meet the Specifications, the Parties
agree to negotiate in good faith with a view to agreeing amendments to the
specifications set out in Schedule 1. Such negotiations are to be conducted in a
timely manner in order to ensure that the Parties can continue to perform their
obligations under this Agreement.

 

9.                                     TEMPORARY CLOSURE — CARE AND MAINTENANCE

 

(a)                                If the Producer, acting in good faith and on
reasonable grounds, determines that it is not economically feasible to operate
the Mining Operations, the Producer may temporarily suspend operations and is
relieved of its obligations to sell and deliver Concentrate under this Agreement
(Care and Maintenance Suspension) but only after providing the Buyer with no
less than 12 months prior written notice of its intention to suspend operations
for such period.

 

(b)                                If the Producer proposes to recommence
production at the Mining Operations following a Care and Maintenance Suspension
then:

 

(i)                                   the Producer must, as soon as practicable,
notify the Buyer in writing that it intends to recommence production at the
Mining Operations;

 

(ii)                                if the period of the Care and Maintenance
Suspension is greater than 3 months, the Buyer may, purchase Concentrate from
other sources until the Care and Maintenance Suspension longer applies; and

 

(iii)                            unless the Buyer terminates this Agreement, the
Producer is no longer relieved from its obligations to sell and deliver
Concentrate under this Agreement.

 

10.                              TITLE AND RISK

 

10.1                       Risk

 

All risk of loss or destruction of the Concentrate or damage to the Concentrate
in connection with each Delivery of Concentrate shall pass from the Producer to
the

 

15

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Buyer at the moment the Concentrate in that Delivery is fully loaded onto the
carrying vessel at the Loading Port.

 

10.2                       Title

 

Title to the Concentrate in each Delivery shall pass from the Producer to the
Buyer upon the Concentrate in that Delivery being fully loaded onto the carrying
vessel at the Loading Port.

 

11.                              DISPUTE RESOLUTION

 

(a)                                If there is a dispute between the Parties
relating to the Agreement that is stated to be resolved by reference to an
Independent Expert (Dispute), senior representatives from each Party must first
meet promptly and use all reasonable endeavours acting in good faith to resolve
the Dispute by joint discussions.

 

(b)                                If the Parties are unable to resolve a
Dispute in accordance with paragraph (a), the Parties agree to resolve the
Dispute by referring the Dispute to an independent expert (Independent Expert).

 

(c)                                 The Independent Expert must be:

 

(i)                                  a person, agreed to by the Buyer and the
Producer, who is of good repute with expertise and extensive experience in the
lithium concentrate industry which expertise and extensive experience must be
relevant to the matters to be decided (and that person must have no direct or
indirect personal interest in the outcome of the dispute); or

 

(ii)                               if the Buyer and the Producer cannot agree
within 10 Business Days of either Party sending a notice to the other of a
Dispute, a person nominated by the Chairman of the Institute of Arbitrators &
Mediators Australia (Western Australian Chapter) or his or her nominee.

 

(d)                                Upon the appointment of an Independent
Expert, the Buyer and the Producer must each submit to the Independent Expert in
writing their positions in relation to the Dispute setting out in adequate
detail the reasons why their position is appropriate.

 

(e)                                 The Independent Expert must then promptly
determine the Dispute and provide the Parties with a written determination with
reasons.

 

(f)                                  In making his or her determination, the
Independent Expert is entitled to:

 

(i)                                  seek the assistance of an accountant,
lawyer, barrister or other expert where the Dispute involves a matter or
question which the Independent Expert is not qualified to consider;

 

(ii)                               make inquiries and receive further
information from the Parties as he or she may require for the purposes of the
determination, provided that both Parties must be copied on any such inquiry;
and

 

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(iii)                            set a timeline and procedure to which the
Parties must adhere during the course of the Dispute process, including
confidentiality obligations, preparation of submissions and answers to
questions.

 

(g)                                 The Parties agree to cooperate fully in the
expeditious conduct of the Independent Expert’s determination and provide the
Independent Expert with access to all facilities, books, records, documents,
information and personnel necessary to make a fully informed decision in an
expeditious manner.

 

(h)                                The Independent Expert shall have no ex parte
communications with any of the Parties concerning his or her determination.

 

(i)                                    A decision of the Independent Expert is
final and binding on the Buyer and the Producer, except in the case of manifest
error.

 

(j)                                   Unless the Independent Expert, in his or
her absolute discretion, determines that the conduct of any Party is such that
it should bear all or a greater proportion, the costs and fees of the
Independent Expert will be shared equally by the Buyer and the Producer.

 

12.                              FORCE MAJEURE

 

(a)                                If a Party is prevented in whole or in part
from carrying out its obligations under this Agreement (other than an obligation
to pay money) as a result of any strike, act of God, war, lockout, interference
of trade unions, act of government or government appointed agents, suspension of
labour, fire, earthquake, flood, storm, tempest, accident, interruption to power
or water supply, lack of freight facilities or delays on route, refusal of any
necessary import or export licence or any other cause (a “Force Majeure Event”)
beyond the reasonable control of the Party so prevented (the “Affected Party”),
then, subject to paragraph (b), and provided the Affected Party:

 

(i)                                  gives prompt written notice to the other
Party of the occurrence of the nature and expected duration of the Force Majeure
Event; and

 

(ii)                               has taken all proper precautions, due care
and reasonable alternative measures with the object of avoiding and mitigating
the effects of the Force Majeure Event and of carrying out its obligations,

 

the obligations of the Affected Party which cannot be performed (other than an
obligation to pay money) shall be suspended during the period in which the Force
Majeure Event continues, provided that should a shipment be suspended for more
than 1 month after the giving of the notice referred to in sub-paragraph
(a)(i) either the Buyer or the Producer may at its option cancel the shipment or
delivery.

 

(b)                                The Affected Party agrees to use its
reasonable efforts to remedy any Force Majeure Event to the extent that it is
reasonably possible to do so, it being understood that it is not required under
paragraph (a) to settle any labour dispute against its will or to test the
validity or refrain from testing the validity of any law, order or regulation. 
Once any Force Majeure Event has been cured, the Producer will recommence supply
to the Buyer and the Other Buyer

 

17

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in priority to any other customers and in proportion to their relevant
unfulfilled supply obligations.

 

(c)                                 Subject to paragraph (d), where the Producer
has declared a Force Majeure Event and such Force Majeure Event has prevented it
from Delivering Concentrate under this Agreement, it shall be entitled to deduct
the amount of Concentrate which it was prevented from Delivering from the
quantity to which its obligation under clause 3.2(a) of this Agreement applies.

 

(d)                                If the Force Majeure Event has prevented
Delivery of Concentrate but not prevented ore being mined from the Mining
Operations, the Producer shall not be entitled to deduct amount of Concentrate
as contemplated by paragraph (c).

 

(e)                                 If the Buyer is the Affected Party and the
Force Majeure Event prevents it from taking Delivery at the Loading Port, the
Producer will be entitled to sell Concentrate to third parties upon whatever
terms the Producer (acting reasonably) thinks fit, having regard to the relevant
Price.  Quantities of Concentrate sold in accordance with this paragraph are
deemed to have been delivered to the Buyer for the purpose of determining
whether the Producer has fulfilled its obligations to deliver Concentrate to the
Buyer under this Agreement.

 

(f)                                  If, despite reasonable efforts on the part
of the Affected Party to avoid or mitigate the effects of an Event of Force
Majeure, the circumstances described in paragraph (a) continue substantially
unabated for a period of 6 months from the date of the notice given under that
paragraph:

 

(i)                                  the Parties must negotiate in good faith to
find a resolution of the circumstances; and

 

(ii)                               if they are unable to agree upon a resolution
within 90 days after the expiry of the period of 6 months, either Party may
terminate this Agreement upon 30 days notice in writing without prejudice to any
other rights of the Parties accrued prior to the date of termination.

 

13.                              TERMINATION

 

(a)                                Either Party may terminate this Agreement
immediately by notice to the other Party if the other Party commits a material
breach of this Agreement, unless:

 

(i)                                  the breach is capable of remedy, in which
case a Party may terminate this Agreement immediately by notice to the other
Party if the other Party fails to remedy the breach within 30 days after being
required in writing to do so; or

 

(ii)                               the breach relates to payment in respect of
which there is a bona fide dispute outstanding between the Parties as to the
quantum of a payment to be made.

 

(b)                                Each party’s further rights and obligations
cease immediately on termination of this Agreement but termination does not
affect:

 

18

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(i)                                     a party’s accrued rights and obligations
at the date of termination; and

 

(ii)                               the continued existence and validity of the
rights and obligations of the parties under those clauses which are expressed to
survive termination and any provisions of this Agreement necessary for the
interpretation or enforcement of this Agreement.

 

(c)                                 The termination of this Agreement does not
of itself give rise to any liability on the part of the Producer to pay any
compensation to the Buyer, including but not limited to, for loss of profits or
goodwill.

 

(d)                                The Producer is entitled to cancel all orders
placed by the Buyer prior to the date of termination which have been accepted by
the Producer without any liability of whatsoever nature to the Buyer.

 

14.                              LIMIT OF LIABILITY

 

(a)                                Despite any other provision in this Agreement
and to the maximum extent permitted by law, neither Party will have any
liability to the other for any Consequential Loss howsoever arising (including
as a result of negligence or breach of any statutory duty).

 

(b)                                Subject to paragraph (a), the Parties are
entitled to all remedies available to them (including damages) for breach of any
term of this Agreement.

 

15.                              GOODS AND SERVICES TAX

 

15.1                       Interpretation

 

Words or expressions used in this clause which are defined in the A New Tax
System (Goods and Services Tax) Act 1999 (Cth) or in the A New Tax System (Goods
and Services Tax) Regulations 1999 (Cth) have the same meaning in this clause.

 

15.2                       Consideration is GST Exclusive

 

Any consideration to be paid or provided to a Party for a supply made by that
Party under or in connection with this Agreement is stated exclusive of GST.

 

15.3                       Gross Up of Consideration

 

Despite any other provision in this Agreement, if a Party (Supplying Party)
makes a taxable supply under or in connection with this Agreement on which GST
is imposed:

 

(a)                                the consideration payable or to be provided
for that supply under this Agreement but for the application of this clause (GST
exclusive consideration) is increased by, and the recipient of the supply
(Receiving Party) must also pay to the Supplying Party, an amount equal to the
GST exclusive consideration multiplied by the rate of GST applicable to the
supply; and

 

(b)                                subject to the Supplying Party giving the
Receiving Party a Tax Invoice in relation to that supply, the amount by which
the GST exclusive consideration is

 

19

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increased must be paid to the Supplying Party by the Receiving Party without set
off, deduction or requirement for demand, on or before the Payment Date shown on
the tax invoice.

 

15.4                       Reimbursements (Net Down)

 

If a payment to a Party under this Agreement is a reimbursement or
indemnification, calculated by reference to a loss, cost or expense incurred by
that Party, then the payment will be reduced by the amount of any input tax
credit to which that Party is entitled for that loss, cost or expense.

 

15.5                       Requirements for Tax Invoices

 

Where the Producer is required to provide a Tax Invoice to the Buyer, the Tax
Invoice must comply with the requirements of the GST Law (as a Tax Invoice) and
must, unless inconsistent with the GST Law, specify:

 

(a)                                the Producer’s Australian Business Number;

 

(b)                                the Price due to Producer and the basis of
its calculation;

 

(c)                                 the amount of any GST paid or payable by the
Producer with respect to the Price;

 

(d)                                the date of Delivery of the Concentrate to
which the Tax Invoice relates;

 

(e)                                 a description (including quantity) of the
Concentrate delivered;

 

(f)                                  if a discount is applicable, the discounted
Price; and

 

(g)                                 the Producer’s address for payment.

 

16.                              VIENNA CONVENTION

 

The Parties exclude any application of the United Nations Convention on
Contracts for the International Sale of Goods adopted at Vienna, Australia on 11
April 1980, as given effect by the Sale of Goods (Vienna Convention) Act 1986
(WA) or any accession to or adoption of that convention at any time hereafter by
the country in which the place of business of the Buyer is situated, to the sale
and purchase of Concentrate under this Agreement.

 

17.                              FAIRNESS

 

If there are changes in circumstances which the parties could not foresee at the
time of entering into this Agreement, the Party concerned must contact the other
Party and they will in good faith use their best endeavours to find an agreeable
solution.  However, failure to find an agreeable solution will not result in a
termination of this Agreement or relieve a Party from its obligations under this
Agreement.

 

20

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18.                              OBLIGATIONS OF PRODUCER

 

(a)                                The Producer must not transfer legal
ownership of the Mining Operations (directly or indirectly) to another party
unless that party assumes all the rights and obligations under this Agreement by
means of a deed of novation or similar instrument on terms reasonably acceptable
to the Buyer.

 

(b)                                The Producer shall use all reasonable
endeavours to conduct its operations in relation to its Mining Operations in a
good, workmanlike and commercially reasonable manner, in accordance with
suitable engineering, mining and processing methods and practices with a view
to:

 

(i)                                     maximising its profitability;

 

(ii)                                  ensuring that the Buyer receives its
Offtake Percentage in each Supply Period; and

 

(iii)                            continuing to develop the Mining Operations in
a prudent commercial manner to maximise the value from the ore body taking into
account the Buyer’s long term view of the lithium market and taking into account
the current reserves statement,

 

and the Producer acknowledges that, if it undertakes further mining developments
or operations in the vicinity of the Mining Operations, any Concentrate produced
from ore recovered as a result of such further mining developments or operations
will be subject to the terms of this Agreement.

 

19.                              CONFIDENTIALITY

 

19.1                       Confidentiality Restrictions

 

Subject to clause 19.2, a Party must not disclose, or use for a purpose other
than contemplated by this agreement, any Confidential Information.

 

19.2                       Permitted Disclosure

 

(a)                                A Party may disclose any Confidential
Information:

 

(i)                                  on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 19, to its
officers, employees, professional advisors, related bodies corporate, or the
officers, employees or professional advisors of its related bodies corporate;

 

(ii)                               in enforcing this Agreement or in a judicial
or arbitral proceeding arising out of or in connection with this Agreement;

 

(iii)                            to the extent required by law or the rules of
any securities exchange on which any securities of the Party or a related body
corporate of the Party are quoted;

 

(iv)                           to the extent required or permitted by this
Agreement; or

 

21

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(v)                                 with the prior consent of the Party which
originally supplied that Confidential Information (the disclosing Party) in
connection with this agreement.

 

(b)                                A Party may disclose Confidential
Information:

 

(i)                                     to the extent necessary in connection
with a capital raising by the Party or a related body corporate of the Party;

 

(ii)                               on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 19, to:

 

(A)                              a bona fide proposed or prospective purchaser
of any shares from the Party;

 

(B)                              a bona fide current, proposed or prospective
financier of the Party or a related body corporate of the Party; or

 

(C)                              officers, employees or professional advisors of
such purchaser or financier.

 

19.3                       Prior Advice and Related Obligations

 

In the case of any disclosure of Confidential Information pursuant to
clause 19.2(a)(iii), the Party must:

 

(a)                                notify the disclosing Party before or, if
this is not practical, as soon as the disclosure is made; and

 

(b)                                use reasonable endeavours to (and assist the
disclosing Party at the disclosing Party’s expense to) restrict distribution of
the Confidential Information and otherwise take all reasonable steps to preserve
its confidentiality.

 

19.4                       Damages Not an Adequate Remedy

 

Each Party acknowledges that:

 

(a)                                damages will not be an adequate remedy for
any breach of this clause 19; and

 

(b)                                specific performance and injunctive relief
are appropriate remedies for any threatened or actual breach (without the need
to give an undertaking as to damages), in addition to any other remedies
available at law or in equity under or independently of this agreement.

 

19.5                       Survival of Obligation

 

This clause 19 survives and continues to bind the parties for two years
following termination of this agreement.

 

22

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20.                              GOVERNING LAW

 

This Agreement shall be governed by the law in force in Western Australia and
each Party submits to the exclusive jurisdiction of the courts of Western
Australia in relation to the Agreement.

 

21.                              NOTICES

 

Any notice, demand, consent or other communication (a Notice) given or made
under this Agreement:

 

(a)                                must be in writing in English and signed by
the sender or a person duly authorised by the sender (or in the case of email,
set out the full name and position or title of the sender or person duly
authorised by the sender);

 

(b)                                must be delivered to the intended recipient
by prepaid post (if posted to an address in another country, by registered
airmail) or by hand, fax or email to the address, fax number or email address
set out on page 1 or the address, fax number or email address last notified by
the intended recipient to the sender;

 

(c)                                 will be conclusively taken to be duly given
or made:

 

(i)                                     in the case of delivery in person, when
delivered;

 

(ii)                               in the case of delivery by post, two business
days after the date of posting (if posted to an address in the same country) or
seven business days after the date of posting (if posted to an address in
another country);

 

(iii)                            in the case of fax, on receipt by the sender of
a transmission control report from the despatching machine showing the relevant
number of pages and the correct destination fax number or name of recipient and
indicating that the transmission has been made without error; and

 

(iv)                              in the case of email, the earlier of:

 

(A)                              the time that the sender receives an automated
message from the intended recipient’s information system confirming delivery of
the email; and

 

(B)                              the time that the intended recipient, or an
employee or officer of the intended recipient acknowledges receipt,

 

but if the result is that a Notice would be taken to be given or made on a day
that is not a business day in the place specified by the intended recipient as
its postal address under paragraph (b), it will be conclusively taken to have
been duly given or made at the start of business on the next business day in
that place.

 

23

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22.                              MISCELLANEOUS

 

22.1                       Assignment

 

(a)                                Subject to paragraphs (b) and (c), neither
Party may assign this Agreement nor their rights and obligations hereunder
without the prior written consent of the other Party, which must not be
unreasonably withheld.

 

(b)                                The Buyer may nominate a related body
corporate as the entity that is to purchase Concentrate under this Agreement,
provided that the Buyer will remain responsible for the performance of its
obligations under this Agreement.

 

(c)                                 Subject to the applicable related body
corporate obtaining any necessary board or shareholder approvals and satisfying
any other requirements under any applicable law, the Buyer will be entitled to
assign this Agreement to that related body corporate without the consent of the
Producer.

 

22.2                       Variation

 

Variation of any term of this Agreement must be in writing and signed by the
Parties.

 

22.3                       Waiver

 

(a)                                An election not to exercise of any right,
power, authority discretion or remedy arising upon default under this Agreement
must be in writing and signed by the Party making the election.

 

(b)                                A failure or delay in exercise, or partial
exercise, of a right, power, authority, discretion or remedy created or arising
upon default under this Agreement, does not result in a waiver of that right.

 

(c)                                 A Party is not entitled to rely on a delay
in the exercise or non-exercise of a right, power, authority, discretion or
remedy arising from a breach of this Agreement or on a default under this
Agreement as constituting a waiver of that right, power, authority, discretion
or remedy.

 

(d)                                A Party may not rely on any conduct of
another Party as a defence to exercise of a right, power, authority, discretion
or remedy by that other Party.

 

22.4                       Costs

 

Each Party must pay its own costs and expenses of negotiating, preparing,
executing and performing its obligations under this Agreement.

 

22.5                       Further Assurance

 

Each Party must do all things and execute all further documents necessary to
give full effect to the transactions contemplated by this Agreement.

 

24

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22.6                       Severance

 

If any provision of this Agreement is invalid and not enforceable in accordance
with its terms, all other provisions which are self-sustaining and capable of
separate enforcement without regard to the invalid provision, shall be and
continue to be valid and forceful in accordance with their terms.

 

22.7                       Entire Agreement

 

This Agreement constitutes the entire agreement of the parties about its subject
matter and supersedes all previous agreements, understandings and negotiations
on that subject matter.

 

22.8                       Counterparts

 

This Agreement may be executed in counterparts.  All executed counterparts
constitute one document.

 

EXECUTED as an agreement.

 

25

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SCHEDULE 1 — CONCENTRATE SPECIFICATIONS

 

Chemical Grade Spodumene SC 6.0 or other grades of Spodumene for conversion to
Lithium Carbonate or Lithium Hydroxide or other Lithium chemicals

 

Chemical Properties

 

Chemical compound

 

Guaranteed %

Li2O

 

6.0 min

Fe2O3

 

1.0 max

Moisture

 

8 max

 

26

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SIGNING PAGE

 

 

Dated:

 

 

 

 

 

 

EXECUTED by TALISON LITHIUM AUSTRALIA PTY LTD in accordance with section
127(1) of the Corporations Act 2001 (Cth) by authority of its directors:

 

 

 

 

 

 

 

 

 

 

 

Signature of director

 

Signature of director/company secretary*

 

 

*delete whichever is not applicable

 

 

 

 

 

 

Name of director (block letters)

 

Name of director/company secretary*

 

 

(block letters)

 

 

*delete whichever is not applicable

 

Executed by TIANQI GROUP HK CO., LIMITED in the presence of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Witness Signature

 

Director Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

Print Name

 

Print Name

 

 

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Schedule 5 — Technical Grade Distribution Agreement Terms

 

[g96561kk27i001.jpg]

 

CLIFFORD CHANCE

 

 

EXECUTION VERSION

 

TALISON LITHIUM AUSTRALIA PTY LTD

 

ROCKWOOD LITHIUM GmbH

 

--------------------------------------------------------------------------------

 

DISTRIBUTION AGREEMENT

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

CONTENTS

 

Clause

 

Page

 

 

 

 

DETAILS

 

1

 

 

 

GENERAL TERMS

 

2

 

 

 

1.

DEFINITIONS AND INTERPRETATION

 

2

1.1

Definitions

 

2

1.2

Related Bodies Corporate

 

5

1.3

Interpretation

 

6

 

 

 

 

2.

APPOINTMENT

 

7

 

 

 

 

3.

TERM

 

7

 

 

 

 

4.

QUANTITY

 

7

4.1

Production and Offtake Nominations

 

7

4.2

Obligation to Take and Deliver

 

9

4.3

Under and Over Production

 

9

 

 

 

 

5.

DELIVERY AND SHIPPING

 

9

5.1

Delivery

 

9

5.2

Deliveries of Out of Specification Product

 

10

5.3

Transport and Shipping

 

10

5.4

FOB Loading Terms at Loading Port

 

11

5.5

Insurance

 

11

 

 

 

 

6.

WEIGHING AND SAMPLING

 

11

6.1

Loading Port

 

11

6.2

Documentation for Distributor

 

11

6.3

Discharge Port

 

12

 

 

 

 

7.

PRICE

 

12

7.1

Price

 

12

7.2

Penalties

 

13

 

 

 

 

8.

PAYMENT

 

13

8.1

Payment

 

13

8.2

Disputed Amounts

 

13

8.3

Evidence of Basis of Calculations

 

14

8.4

Interest

 

14

 

 

 

 

9.

SPECIFICATIONS

 

14

 

 

 

 

10.

DISTRIBUTOR’S OBLIGATIONS

 

14

 

 

 

 

11.

SUPPLIER’S OBLIGATIONS

 

16

 

 

 

 

12.

TEMPORARY CLOSURE — CARE AND MAINTENANCE

 

16

 

 

 

 

13.

TITLE AND RISK

 

16

13.1

Risk

 

16

13.2

Title

 

17

 

 

 

 

14.

DISPUTE RESOLUTION

 

17

 

 

 

 

15.

FORCE MAJEURE

 

18

 

i

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16.

TERMINATION

 

19

 

 

 

 

17.

LIMIT OF LIABILITY

 

20

 

 

 

 

18.

GOODS AND SERVICES TAX

 

20

18.1

Interpretation

 

20

18.2

Consideration is GST Exclusive

 

20

18.3

Gross Up of Consideration

 

20

18.4

Reimbursements (Net Down)

 

21

18.5

Requirements for Tax Invoices

 

21

 

 

 

 

19.

VIENNA CONVENTION

 

21

 

 

 

 

20.

FAIRNESS

 

21

 

 

 

 

21.

OBLIGATIONS OF SUPPLIER

 

22

 

 

 

 

22.

CONFIDENTIALITY

 

22

22.1

Confidentiality Restrictions

 

22

22.2

Permitted Disclosure

 

22

22.3

Prior Advice and Related Obligations

 

23

22.4

Damages Not an Adequate Remedy

 

23

22.5

Survival of Obligation

 

23

 

 

 

 

23.

GOVERNING LAW

 

24

 

 

 

 

24.

NOTICES

 

24

 

 

 

 

25.

MISCELLANEOUS

 

25

25.1

Assignment

 

25

25.2

Variation

 

25

25.3

Waiver

 

25

25.4

Costs

 

25

25.5

Further Assurance

 

25

25.6

Severance

 

25

25.7

Entire Agreement

 

26

25.8

Counterparts

 

26

 

 

 

 

SIGNING PAGE

 

27

 

ii

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DETAILS

 

Parties

 

Supplier and Distributor

 

 

 

Supplier

 

Name

 

Talison Lithium Australia Pty Ltd

 

 

 

 

 

 

 

ABN

 

39 139 401 308

 

 

 

 

 

 

 

Address

 

Level 4, 37 St Georges Terrace, Perth, Western Australia, 6000

 

 

 

 

 

 

 

Fax

 

+61 8 9202 1144

 

 

 

 

 

 

 

Email

 

Lorry.Mignacca@talisonlithium.com and Emma.Hall@talisonlithium.com

 

 

 

 

 

 

 

Attention

 

CEO and Commercial Manager

 

 

 

 

 

Distributor

 

Name

 

Rockwood Lithium GmbH

 

 

 

 

 

 

 

Incorporated in

 

Germany

 

 

 

 

 

 

 

Address

 

Industriepark Höchst, Gebaude G 879, D-65926, Frankfurt am Main

 

 

 

 

 

 

 

Fax

 

+49 69 401 26-7 26 01

 

 

 

 

 

 

 

Email

 

Marcus.Brune@rockwoodlithium.com

 

 

 

 

 

 

 

Attention

 

Chief Financial Officer

 

 

 

 

 

Recitals

 

A

 

The Supplier and the Distributor have agreed to enter into this distribution
agreement in relation to the sale by the Supplier and the purchase by the
Distributor of a percentage of production of Product from the Mining Operations
owned by the Supplier.

 

 

 

 

 

 

 

B

 

The Distributor shall have the right to take in each Contract Year during the
Term a percentage of Product up to the Maximum Offtake

 

 

 

 

 

Date

 

See Signing page

 

 

 

1

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GENERAL TERMS

 

1.                                     DEFINITIONS AND INTERPRETATION

 

1.1                              Definitions

 

In this Agreement:

 

“Acquisition Agreement” means the agreement entered into on 29 November 2013
between RT Lithium Limited, Tianqi Group HK Co., Limited, Leader Investment
Corporation and Windfield, as amended and restated on 31 March 2014.

 

“Agreed Offtake Amount” has the meaning set out in clause 4.2.

 

“Agreement” means this agreement and its schedules.

 

“Affected Party” has the meaning set out in clause 15(a).

 

“Bank Account” means the bank account nominated by the Supplier to the
Distributor in writing from time to time into which payments to the Supplier
under this Agreement are to be made.

 

“Business Day” means a day which is not a Saturday, Sunday, or a public holiday
in Chengdu, Frankfurt or Perth.

 

“Care and Maintenance Suspension” has the meaning set out in clause 12(a).

 

“Change of Control”, in relation to a Party, occurs when a person (or persons
who are acting in concert in relation to the affairs of the Party or a holding
company of the Party), who did not control the Party at the time it became a
Party, begins to control the Party except if the Change of Control is caused
solely by:

 

(a)                                a bona fide acquisition of shares in the
capital of, or a bona fide reorganisation undertaken by, the ultimate holding
company of the Party; or

 

(b)                                the Party beginning to be controlled by a
subsidiary of its ultimate holding company.

 

“Commencement Date” means the date on which Completion occurs.

 

“Completion” means completion as defined in the Acquisition Agreement.

 

“Confidential Information” means:

 

(a)                                the existence of and terms of this Agreement;
or

 

(b)                                any unpublished information or documents
disclosed to a Party by the other Party in connection with this Agreement
(including information and documents supplied before the date of this
Agreement),

 

but excludes information or documents which:

 

2

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(c)                                 at the time it was first disclosed to the
Party, was already in the lawful possession of the Party; or

 

(d)                                becomes available to the Party lawfully
through sources other than the other Party or its related bodies corporate.

 

“Confirmed Production” has the meaning set out in clause 4.1(b).

 

“Consequential Loss” means any loss or damage suffered by a party which is
indirect or consequential loss or damage within the meaning of the common law
including loss of profits, loss of goodwill or credit and loss of opportunity,
however arising.

 

“Contract Year” means:

 

(a)                                for the first year, the period between the
Commencement Date and 31 December of that year;

 

(b)                                subject to paragraph (c), for every year
thereafter, the period between 1 January and 31 December inclusive; and

 

(c)                                 for the final year, the period between 1
January of that year and the date on which this Agreement expires or is earlier
terminated.

 

“Corporations Law” means the Corporations Act 2001 (Cth).

 

“Deliver” means the Supplier delivering Product to the Distributor at the
Loading Port in accordance with the terms of this Agreement, including in
accordance with an Indicative Delivery Schedule.

 

“Discharge Port” means the destination port for a vessel carrying Product.

 

“Dispute” has the meaning set out in clause 14(a).

 

“End of Life of the Mining Operations” means the date on which the Supplier
ceases to extract lithium ore from the Mining Operations, on the basis that it
has decided, in good faith and on reasonable grounds, that the ore reserve at
the Mining Operations has been depleted to such a level that it would be no
longer economically feasible to continue to extract lithium ore to produce ore
suitable for the production of technical grade product in commercially
recoverable quantities.

 

“Estimated Production” has the meaning set out in clause 4.1(a).

 

“FOB” means “Free on Board” as that term is defined or described in Incoterms®
2010.

 

“Force Majeure Event” has the meaning set out in clause 15(a).

 

“Independent Expert” has the meaning set out in clause 14(b).

 

“Indicative Delivery Schedule” has the meaning set out in clause 5.1(a), as such
Indicative Delivery Schedule may be amended pursuant to clause 5.1(b) from time
to time.

 

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“Interest Rate” means the rate per annum being the sum of the Reference Rate on
which the payment was due, plus a margin of 5%, calculated daily, where the
Reference Rate is the arithmetic mean of the rates displayed at or about 10.30am
(Perth time) on the Reuters screen LIBOR page for USD for a 3 month term and, if
there is none, the Reference Rate will be the rate selected by the Supplier as
equivalent.

 

“IMO” means the International Maritime Organisation.

 

“Loading Port” means the Port of Bunbury or the Port of Fremantle or such other
port nominated by the Supplier for loading of Product for delivery by the
Supplier.

 

“Maximum Offtake” means a quantity of Product that equals the Offtake Percentage
of the Confirmed Production attributable to the relevant Contract Year and that
is not contracted to be sold to a third party under a contract entered into
before the Commencement Date.

 

“Mining Operations” means the Supplier’s lithium operation known as the Talison
Greenbushes Lithium Operations located at Greenbushes, Western Australia,
including the mine site and processing plants.

 

“Offtake Estimate” has the meaning set out in clause 4.1(c)(ii).

 

“Offtake Nomination” has the meaning set out in clause 4.1(c)(i).

 

“Offtake Percentage” means:

 

(a)                                for so long as the Distributor or a related
body corporate of the Distributor is a holder of shares in Windfield, 50% of the
Supplier’s actual production of Product from the Mining Operations; or

 

(b)                                if the Distributor or a related body
corporate of the Distributor ceases to be a holder of shares in Windfield, the
lesser of:

 

(i)                                  the quantity of the Supplier’s actual
production of Product from the Mining Operations taken by the Distributor during
the four Supply Periods immediately prior to the Distributor or a related body
corporate of the Distributor ceasing to be a holder of shares in Windfield; and

 

(ii)                               50% of the Estimated Production for the
Contract Year in which the Distributor or a related body corporate of the
Distributor ceases to be a holder of shares in Windfield,

 

provided that the quantity of Product determined in accordance with paragraph
(b)(i) or (b)(ii) must not be more than 50% of the Estimated Production in any
Contract Year after the Distributor or a related body corporate of the
Distributor ceases to be a holder of shares in Windfield.

 

“Other Distribution Agreement” means the distribution agreement, on
substantially the same terms as this Agreement, entered into by the Other
Distributor and the Supplier on the date of this Agreement.

 

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“Other Distributor” means Tianqi Group HK Co., Limited.

 

“Party” means either the Supplier or the Distributor and “Parties” means both
the Supplier and the Distributor.

 

“Payment Date” means the due date for payment as shown in an invoice issued by
the Supplier under this Agreement.

 

“Penalties” has the meaning set out in clause 7.2(a).

 

“Price” has the meaning set out in clause 7.1(a).

 

“Production Percentage” has the meaning set out in clause 4.3(a).

 

“Product” means any product produced by the Mining Operations that is not used
for conversion to lithium carbonate, lithium hydroxide or other lithium
chemicals.

 

“Reserved Territories” means the Peoples’ Republic of China, Hong Kong and
Taiwan.

 

“Shareholders Agreement” means the shareholders agreement entered into on 31
March 2014 between Chengdu Tianqi Group Co., Ltd., Tianqi Group HK Co., Limited,
Sichuan Tianqi Lithium Industries, Inc., Tianqi UK Limited, RT Lithium Limited
and Windfield.

 

“Specifications” has the meaning given in clause 9(a).

 

“Supply Period” means, for the first Supply Period, the period between the
Commencement Date and 31 March 2014 and, thereafter, the periods between 1
April and 30 June inclusive, 1 July and 30 September inclusive, 1 October and
31 December inclusive and 1 January and 31 March inclusive.

 

“Telegraphic Transfer” means the electronic transfer of money affected by a
sending bank and a receiving bank from one bank account to another bank account.

 

“Term” has the meaning set out in clause 3(a).

 

“Territory” means the world other than the Reserved Territories.

 

“Windfield” means Windfield Holdings Pty Ltd (ACN 160 456 164).

 

“Windfield Group” means Windfield and each of its subsidiaries from time to time
and “Windfield Group Entity” means any one of them.

 

1.2                              Related Bodies Corporate

 

(a)                                Subject to paragraph (c), an entity is a
related body corporate of a person if it is a holding company, a subsidiary or
another subsidiary of a holding company of that person.

 

(b)                                Subject to paragraph (c), an entity is a
subsidiary of another person (its holding company) if that person, whether
directly or indirectly through one or more other subsidiaries:

 

5

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(i)                                     holds a majority of the voting rights in
it;

 

(ii)                               is a member or shareholder of it and has the
right to appoint or remove a majority of its board of directors or equivalent
managing body;

 

(iii)                            is a member or shareholder of it and controls
alone, or pursuant to an agreement with other members or shareholders, a
majority of the voting rights in it; or

 

(iv)                           has the right to exercise a dominant influence
over it, for example by having the right to give directions with respect to its
operating and financial policies, with which directions its directors or other
officers are obliged to comply.

 

(c)                                 In respect of the use of the terms related
body corporate, holding company and subsidiary in this agreement, no Windfield
Group Entity is a related body corporate of the Distributor and vice versa, such
that the Distributor is not a holding company of a Windfield Group Entity and no
Windfield Group Entity is a subsidiary of the Distributor.

 

1.3                              Interpretation

 

The following rules apply to the interpretation of this Agreement:

 

(a)                                the singular includes the plural and vice
versa, and a gender includes other genders;

 

(b)                                another grammatical form of a defined word or
expression has a corresponding meaning;

 

(c)                                 a reference to a document or instrument
includes the document or instrument as novated, altered, supplemented or
replaced from time to time;

 

(d)                                a reference to USD is to the currency of the
United States of America;

 

(e)                                 a reference to AUD is to the currency of
Australia;

 

(f)                                  a reference to a party is to a Party to
this Agreement, and a reference to a party to a document includes the party’s
officers, employees, executors, administrators, successors and permitted assigns
and substitutes;

 

(g)                                 a reference to a person includes a natural
person, partnership, body corporate, association, governmental or local
authority or agency or other entity;

 

(h)                                a reference to a statute, ordinance, code or
other law includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of any of them;

 

(i)                                    the meaning of general words is not
limited by specific examples introduced by including, for example or similar
expressions;

 

6

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(j)                                   any agreement, representation, warranty or
indemnity by two or more parties (including where two or more persons are
included in the same defined term) binds them jointly and severally;

 

(k)                                any agreement, representation, warranty or
indemnity in favour of two or more parties (including where two or more persons
are included in the same defined term) is for the benefit of them jointly and
severally;

 

(l)                                    a rule of construction does not apply to
the disadvantage of a Party because the Party was responsible for the
preparation of this Agreement or any part of it;

 

(m)                            if a day on or by which an obligation must be
performed or an event must occur is not a Business Day, the obligation must be
performed or the event must occur on or by the next Business Day;

 

(n)                                headings are for ease of reference only and
do not affect interpretation; and

 

(o)                                a Party is to be taken to discharge an
obligation under this Agreement or to exercise any right under this Agreement if
the obligation is discharged or the right is exercised by a related body
corporate of that Party.

 

2.                                     APPOINTMENT

 

The Supplier appoints the Distributor as its distributor to import, market, sell
and distribute the Products in the Territory on the terms of this Agreement.

 

3.                                     TERM

 

(a)                                Subject to early termination under clauses
3(b) or 16, the term of this Agreement shall be the period commencing on the
Commencement Date and ending on the later of:

 

(i)                                     the date which is 20 years after the
Commencement Date; and

 

(ii)                                  the end of the term of the Shareholders
Agreement,

 

(Term).

 

(b)                                This Agreement shall automatically terminate
on the End of Life of the Mining Operations.

 

(c)                                 If the Distributor (or its related body
corporate) ceases to be the holder of shares in Windfield, then the Parties will
negotiate in good faith to make such amendments as are necessarily required to
ensure compliance with applicable laws (including competition laws).

 

4.                                     QUANTITY

 

4.1                              Production and Offtake Nominations

 

(a)                                In conjunction with the preparation of the
draft Budget and Business Plan to be prepared in accordance with the
Shareholders Agreement and, in any event by

 

7

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not later than 4 months prior to the commencement of each Contract Year (and
within 3 months after the Commencement Date in the case of the first Contract
Year), the Supplier and the Distributor must consult in good faith to determine
the quantity of Product that the Supplier estimates will be produced in that
Contract Year and the following Contract Year (Estimated Production).  Upon
making such determination, the Supplier must provide notice to the Distributor
setting out the amount of the Estimated Production so determined, with such
notice to provide a breakdown of the Estimated Production for each calendar
quarter during the applicable Contract Years.

 

(b)                                By not later than 30 September of each
Contract Year (or within 4 months after the Commencement Date in the case of the
first Contract Year), the Supplier must provide notice to the Distributor of the
confirmed production volumes for Product in the following Contract Year
(Confirmed Production), with such notice to provide a breakdown of the estimated
production for each calendar quarter during the applicable Contract Year.

 

(c)                                 By not later than 30 October, 31 January, 30
April and 31 July of each Contract Year (and within 5 months after the
Commencement Date in the case of the first Contract Year), the Distributor must:

 

(i)                                   notify the Supplier of the quantity of
Product that the Distributor proposes to purchase in the next Supply Period
(Offtake Nomination); and

 

(ii)                                provide the Supplier with an estimate of the
quantity of Product that the Distributor is likely to purchase in the following
three Supply Periods for which the relevant Offtake Nomination is made (Offtake
Estimate).

 

The Distributor must not make an Offtake Nomination for a quantity of Product
that would exceed the total amount of Confirmed Production for the relevant
Supply Period.

 

(d)                                Subject to any other provision of this
Agreement to the contrary, the Supplier must treat the Distributor on the same
basis as the Other Distributor in relation to the sale and purchase of Product
provided for in this Agreement.

 

(e)                                 If:

 

(i)                                  the Other Distributor does not contract
with the Supplier to take its maximum offtake of Product for a Supply Period
under the Other Distribution Agreement; and

 

(ii)                               the Distributor has made an Offtake
Nomination for a quantity that exceeds the Maximum Offtake under this Agreement
for that same Supply Period,

 

then the Distributor will be obliged to purchase an amount of the Other
Distributor’s uncontracted quantity that is equal to the difference between the
Other Distributor’s offtake nomination and its maximum offtake during the
applicable Supply Period, provided however that the Distributor will not be
required to purchase more than its Offtake Nomination.

 

8

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4.2                              Obligation to Take and Deliver

 

The Supplier must sell to the Distributor, and the Distributor must purchase
from the Supplier, the quantity of Product that the Distributor notifies as its
Offtake Nomination for each Supply Period or such other amount as may be
determined in accordance with clause 4.1(e) (in either case, Agreed Offtake
Amount).

 

4.3                              Under and Over Production

 

(a)                                If the forecast production of Product from
the Mining Operations is less than the Confirmed Production for the relevant
Contract Year, the quantity of Product to be made available to the Distributor
(and the Other Distributor) and the quantity of Product that the Supplier is
obliged to Deliver to the Distributor will then be determined by multiplying the
Agreed Offtake Amount by the Production Percentage, where the Production
Percentage (expressed as a percentage) is calculated as follows:

 

Production Percentage

=

Forecast Production for relevant Contract Year

x 100

Confirmed Production for relevant Contract Year

 

(b)                                If the forecast production of Product from
the Mining Operations is more than the Confirmed Production for the relevant
Contract Year, the Supplier must notify the Distributor as soon as reasonably
practicable of the over production and the Distributor may elect to increase the
quantity of Product to be Delivered by the Supplier. The increased quantity of
Product nominated by the Distributor must not, unless otherwise agreed, exceed
the amount determined by multiplying the Agreed Offtake Amount by the Production
Percentage.

 

(c)                                 In order to determine whether the Supplier
has delivered the Agreed Offtake Amount, the Supplier must, upon request,
provide reasonable evidence and records to the Distributor at the end of each
Contract Year in relation to the total quantity of Product produced in that
Contract Year.

 

5.                                     DELIVERY AND SHIPPING

 

5.1                              Delivery

 

(a)                                The Supplier and the Distributor must consult
in good faith to determine an indicative delivery schedule for each Supply
Period (Indicative Delivery Schedule) in conjunction with the Offtake Nomination
to be made in respect of that Supply Period.  The Indicative Delivery Schedule
must specify the quantity of Product anticipated to be Delivered each month
during the relevant Supply Period.

 

(b)                                Subject to clause 4.3, the Supplier will use
all reasonable endeavours to Deliver Product to the Distributor in accordance
with the Indicative Delivery Schedule. Each Party must inform the other Party as
soon as practicable after it becomes

 

9

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aware of any circumstances that may have a material impact on the Indicative
Delivery Schedule and the Parties agree to negotiate in good faith to agree
mutually acceptable amendments to the Indicative Delivery Schedule.

 

(c)                                 Prior to each calendar quarter (commencing 1
January, 1 April, 1 July and 1 October), the Supplier must provide the
Distributor with a forecast of its anticipated production for the succeeding
quarter, and propose any necessary adjustment to the Indicative Delivery
Schedule arising from any difference in the then anticipated production compared
with the Confirmed Production provided under clause 4.1(b).

 

(d)                                Unless otherwise agreed by the Parties
(acting reasonably), Product must be Delivered to the Distributor by the
Supplier on an FOB basis to the Loading Port nominated in the Indicative
Delivery Schedule.

 

(e)                                 All packaging of Product for Delivery must
be in bulk.  Delivery of Product in smaller quantities will be to the
Distributor’s cost.

 

5.2                              Deliveries of Out of Specification Product

 

(a)                                If at any time prior to the loading of a
vessel or truck for Delivery to the Distributor, the Supplier determines that
any delivery of Product will not meet the Specifications, the Supplier must
provide notice of this to the Distributor as soon as practicable.

 

(b)                                Upon receipt of a notice pursuant to
paragraph (a), the Supplier and the Distributor will meet to discuss in good
faith the most appropriate steps to be taken having regard to the interests of
both Parties.  If the Parties are unable to agree the most appropriate steps to
be taken within 30 days of the notice being given under paragraph (a), then the
Distributor may elect to reject the Product the subject of the proposed
delivery.

 

(c)                                 If the Distributor rejects any delivery of
Product pursuant to paragraph (b), the Supplier will negotiate in good faith
with the Distributor (and the Other Distributor) to find a third party buyer for
the relevant Delivery.

 

5.3                              Transport and Shipping

 

(a)                                The Supplier will organise:

 

(i)                                  the transportation of Product for Delivery
from the Mining Operations to the Loading Port, the cost of which will be borne
by the Supplier; and

 

(ii)                               such other transportation, shipping and
logistics services from the Loading Port to the place of destination as may be
required by the Distributor, including arranging for vessels to transport
Product, scheduling and notification of arrival of vessels, freight, packaging,
handling and storing of Product and such other transportation and shipping
logistics services from the Loading Port to the place of destination as may be
required by the Distributor on a full cost recovery basis.

 

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(b)                                Subject to paragraph (c), if the Supplier
enters into any arrangements with third parties for the provision of
transportation, shipping and logistics services from the Loading Port to the
place of destination for the purposes of any shipment of Product to be delivered
to the Distributor pursuant to paragraph (a)(ii), then all risks relating to,
and any liabilities associated with, such arrangements shall be borne by the
Distributor.

 

(c)                                 Where any such transportation, shipping and
logistics services arrangements entered into with third parties are not used
solely for the purposes of Product to be delivered to the Distributor, any risks
and liabilities to be borne by the Distributor under paragraph (b) shall be
determined based on the proportion that the amount of Product to be delivered to
the Distributor bears to the aggregate of all amounts of Product in respect of
which the applicable services are being used.

 

5.4                              FOB Loading Terms at Loading Port

 

The Supplier is responsible for loading the Product on to the carrying vessel at
the Loading Port at its own risk and expense.

 

5.5                              Insurance

 

The Supplier must maintain with reputable insurance companies such insurances as
to cover the Mining Operations against such risks and perils and in such amounts
customary in the case of similar operations, including:

 

(a)                                public (third party) liability and property
damage to a limit of not less than AUD20,000,000 per event and in the aggregate;
and

 

(b)                                road transport and loading cargo insurance
for all Deliveries on an FOB basis to cover all cargo against loss, damage and
theft.

 

6.                                     WEIGHING AND SAMPLING

 

6.1                              Loading Port

 

At the Loading Port, the Supplier (at the Supplier’s expense) must, in
accordance with the Supplier’s standard practice, weigh, sample and determine
the assay of the Products loaded on to each carrying vessel for Delivery to the
Distributor.

 

6.2                              Documentation for Distributor

 

As soon as practicable after the loading of each carrying vessel for Delivery to
the Distributor, the Supplier must provide to the Distributor:

 

(a)                                a certificate setting out details of the
weight, sample and assay of the Products as determined by the Supplier in
accordance with clause 6.1, such certificate to include analysis by reference to
the Specifications; and

 

(b)                                a complete set of three original FOB bills of
lading.

 

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The certificate provided by the Supplier under paragraph (a) will be final and
binding in the absence of manifest error.

 

6.3                              Discharge Port

 

At the Discharge Port, the Distributor (at the Distributor’s expense) may
conduct its own weighing, sampling and determination of the assay of the Product
discharged from each carrying vessel for delivery to the Distributor.  Such
weighing, sampling and determination of the assay of the Product by the
Distributor will not impact upon the Supplier’s determination of those matters
in accordance with clause 6.1.

 

7.                                     PRICE

 

7.1                              Price

 

(a)                                The price (Price) payable by the Distributor
to the Supplier for each type of Product to be sold and purchased under this
Agreement in each Contract Year shall be determined in accordance with the
following formula:

 

Price = CY Production Costs + Agreed Margin

 

Where:

 

“CY Production Costs” means the AUD estimate of the costs to be incurred in
connection with the production of the type of Product to be sold and purchased
in the applicable Contract Year as set out in the approved annual budget which
forms part of the approved Budget and Business Plan to be prepared in accordance
with the Shareholders Agreement, converted into USD based on the exchange rate
assumed in that budget; and

 

“Agreed Margin” means the USD amount calculated by deducting the 2013 Production
Costs for the relevant Product type from the Base Price for that Product type. 
For the purposes of this definition:

 

(i)                                  “Base Price” means the weighted average FOB
price (expressed in USD) received by the Supplier for each type of Product sold
during the 2013 calendar year or, if no Product of that type was produced in the
2013 calendar year, the most recent year in which that type of Product was
produced.  For the avoidance of doubt, if the relevant type of Product was sold
on a CIF, CFR or other non-FOB basis, then the FOB Price shall be determined by
deducting any component of the invoiced price for shipments of that Product type
that is attributable to freight and other non-FOB costs and charges; and

 

(ii)                               “2013 Production Costs” means the cost of
production for each type of Product sold during the 2013 calendar year or, if no
Product of that type was produced in the 2013 calendar year, the most recent
year in which that type of Product was produced, converted into USD where 1USD =
0.9345AUD.

 

For the avoidance of doubt, the Agreed Margin may be different for each type of
Product.

 

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(b)                                The Supplier shall provide notice of the
Price determined in accordance with paragraph (a) to the Distributor by not
later than one month prior to the commencement of each Calendar Year.

 

(c)                                 The Parties will meet annually to discuss in
good faith and agree whether the Agreed Margin in paragraph (a) should be
adjusted to reflect the current market price for that Product.  It is envisaged
that movements in the global lithium carbonate price will be the reference point
used to determine a change in the Agreed Margin.

 

(d)                                If the Parties are unable to agree to adjust
the pricing mechanism under as part of the good faith discussions contemplated
by paragraph (c), then until such time as the Parties are able to agree new
pricing mechanism, the Price will be determined in accordance with the mechanism
contained in paragraph (a).

 

(e)                                 The Price for Product purchased by the
Distributor under this Agreement will be the same as the price on an FOB basis
paid by the Other Distributor pursuant to the Other Distribution Agreement for
each Product type.

 

7.2                              Penalties

 

(a)                                The Supplier and the Distributor shall enter
into good faith discussions to determine the penalties that will apply if the
Product Delivered by the Supplier does not meet the Specifications (Penalties). 
For the purposes of this paragraph (a), each Party agrees that it will not adopt
positions during any good faith discussions that are intended to create an
economic advantage for that Party.

 

(b)                                No Penalty can apply to any Delivery of
Product which meets the Specifications.

 

8.                                     PAYMENT

 

8.1                              Payment

 

(a)                                The Supplier will issue an invoice for each
Delivery of Product.  The amount of the invoice will be calculated on the basis
of the information stated in the certificate provided by the Supplier in
accordance with clause 6.2 and the applicable Price.

 

(b)                                The Distributor must pay each invoice by
Telegraphic Transfer to the Bank Account in immediately available funds on or
before the Payment Date shown in the invoice (being no less than 60 days after
the relevant bill of lading).

 

8.2                              Disputed Amounts

 

If a Party disputes an amount payable by it under this clause 8, that Party
shall pay any undisputed amount in accordance with this clause 8.

 

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8.3                              Evidence of Basis of Calculations

 

Upon request by the Distributor, the Supplier shall provide the Distributor with
all documents or other information reasonably necessary to support the amount of
any invoice issued by the Supplier.

 

8.4                              Interest

 

If the Distributor does not pay an amount payable by it under this Agreement by
the Payment Date for the relevant amount, then interest accrues on any unpaid
amount at the Interest Rate from the Payment Date until that amount is paid in
full. The right of the Supplier to require payment of interest under this clause
is without prejudice to any other rights it may have against the Distributor at
law or in equity.

 

9.                                     SPECIFICATIONS

 

(a)                                Product delivered by the Supplier to the
Distributor must meet the specifications set out in the Talison Technical Grade
Product Specifications, as such specifications may be adjusted in accordance
with paragraph (b) (Specifications).

 

(b)                                If, as a consequence of changes in the ore
body at the Mining Operations, Product to be delivered by the Supplier to the
Distributor under this Agreement may not meet the specifications set out in the
Talison Technical Grade Product Specifications, the Parties agree to negotiate
in good faith with a view to agreeing amendments to such specifications. Such
negotiations are to be conducted in a timely manner in order to ensure that the
Parties can continue to perform their obligations under this Agreement

 

10.                              DISTRIBUTOR’S OBLIGATIONS

 

(a)                                The Distributor undertakes and agrees with
the Supplier at all times during the term of this Agreement:

 

(i)                                  to refrain from making active sales of the
Products to customers in the Reserved Territories. For these purposes, making
active sales shall be understood to mean actively approaching or soliciting
customers, including by way of the following actions:

 

(A)                              visits to customers;

 

(B)                              direct mail, including the sending of
unsolicited emails; and

 

(C)                              advertising;

 

(ii)                                to refrain from establishing or maintaining
any branch, sale outlet or distribution depot in the Reserved Territories for
the sale of the Products;

 

(iii)                               to refrain from actively selling the
Products in the Reserved Territories;

 

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(iv)                              if the Distributer so determines, to maintain
on its own account an inventory of the Products at levels which are appropriate
and adequate for the Distributor to meet all customer delivery for the Products
throughout the Territory;

 

(v)                                 to arrange at its own expense for the
advertising and promotion proposed in that programme;

 

(vi)                              not to:

 

(A)                              represent itself as an agent of the Supplier
for any purpose;

 

(B)                              pledge the Supplier’s credit;

 

(C)                              give any condition or warranty or make any
representation on the Supplier’s behalf or commit the Supplier to any contracts;
or

 

(D)                              otherwise incur any liability for or on behalf
of the Supplier;

 

(vii)                         to inform the Supplier immediately of any Change
of Control of the Distributor, and of any change in its organisation or method
of doing business which might be expected to affect the performance of the
Distributor’s duties under this Agreement;

 

(viii)                      to keep full and proper books of account and records
showing clearly all enquiries, quotations, transactions and proceedings relating
to the Products; and

 

(ix)                              to indemnify and forever hold harmless the
Supplier on demand against each loss, liability and cost which the Supplier may
incur or sustain arising out of the breach of the Distributor’s obligations
under this Agreement.

 

(b)                                The Distributor is responsible for obtaining
any necessary import licences or permits necessary for the entry of the Products
into the Territory or their delivery to the Distributor and for any and all
customs duties, clearance charges, taxes, brokers’ fees or other amounts payable
in connection with that importation and delivery.

 

(c)                                 The expenses, costs and charges incurred by
the Distributor in the performance of its obligations under this Agreement shall
be paid by the Distributor, unless the Supplier has expressly agreed beforehand
in writing to pay those expenses, costs and charges.

 

(d)                                The Distributor is solely responsible for the
collection, remittance and payments of any or all taxes, charges, levies,
assessments and other fees of any kind imposed by governmental or other
authority in respect of the purchase, sale, importation, lease or other
distribution of the Products.

 

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11.                              SUPPLIER’S OBLIGATIONS

 

The Supplier undertakes and agrees with the Distributor at all times during the
term of this Agreement:

 

(a)                                to supply the Products only to the
Distributor for resale and not itself to supply the Products to customers;

 

(b)                                to direct customer approaches made to it for
the supply of Products into the Territory to the Distributor;

 

(c)                                 to provide such technical or product or
market or customer information that the Distributor requests; and

 

(d)                                support the Distributor for 6 months from the
Commencement Date to transition existing marketing and sales activities (such as
joint visits, training of personnel on product and logistics) to the
Distributor.

 

12.                              TEMPORARY CLOSURE — CARE AND MAINTENANCE

 

(a)                                If the Supplier, acting in good faith and on
reasonable grounds, determines that it is not economically feasible to operate
the Mining Operations, the Supplier may temporarily suspend operations and is
relieved of its obligations to sell and deliver Product under this Agreement
(Care and Maintenance Suspension) but only after providing the Distributor with
no less than 12 months prior written notice of its intention to suspend
operations for such period.

 

(b)                                If the Supplier proposes to recommence
production at the Mining Operations following a Care and Maintenance Suspension
then:

 

(i)                                  the Supplier must, as soon as practicable,
notify the Distributor in writing that it intends to recommence production at
the Mining Operations;

 

(ii)                               if the period of the Care and Maintenance
Suspension is greater than 3 months, the Distributor may, purchase Product from
other sources until the Care and Maintenance Suspension longer applies; and

 

(iii)                            unless the Distributor terminates this
Agreement, the Supplier is no longer relieved from its obligations to sell and
deliver Product under this Agreement.

 

13.                              TITLE AND RISK

 

13.1                       Risk

 

All risk of loss or destruction of the Product or damage to the Product in
connection with each Delivery of Product shall pass from the Supplier to the
Distributor at the moment the Product in that Delivery is fully loaded onto the
carrying vessel at the Loading Port.

 

16

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13.2                       Title

 

Title to the Product in each Delivery shall pass from the Supplier to the
Distributor upon the Product in that Delivery being fully loaded onto the
carrying vessel at the Loading Port.

 

14.                              DISPUTE RESOLUTION

 

(a)                                If there is a dispute between the Parties
relating to the Agreement that is stated to be resolved by reference to an
Independent Expert (Dispute), senior representatives from each Party must first
meet promptly and use all reasonable endeavours acting in good faith to resolve
the Dispute by joint discussions.

 

(b)                                If the Parties are unable to resolve a
Dispute in accordance with paragraph (a), the Parties agree to resolve the
Dispute by referring the Dispute to an independent expert (Independent Expert).

 

(c)                                 The Independent Expert must be:

 

(i)                                     a person, agreed to by the Distributor
and the Supplier, who is of good repute with expertise and extensive experience
in the lithium Product industry which expertise and extensive experience must be
relevant to the matters to be decided (and that person must have no direct or
indirect personal interest in the outcome of the dispute); or

 

(ii)                                  if the Distributor and the Supplier cannot
agree within 10 Business Days of either Party sending a notice to the other of a
Dispute, a person nominated by the Chairman of the Institute of Arbitrators &
Mediators Australia (Western Australian Chapter) or his or her nominee.

 

(d)                                Upon the appointment of an Independent
Expert, the Distributor and the Supplier must each submit to the Independent
Expert in writing their positions in relation to the Dispute setting out in
adequate detail the reasons why their position is appropriate.

 

(e)                                 The Independent Expert must then promptly
determine the Dispute and provide the Parties with a written determination with
reasons.

 

(f)                                  In making his or her determination, the
Independent Expert is entitled to:

 

(i)                                  seek the assistance of an accountant,
lawyer, barrister or other expert where the Dispute involves a matter or
question which the Independent Expert is not qualified to consider;

 

(ii)                               make inquiries and receive further
information from the Parties as he or she may require for the purposes of the
determination, provided that both Parties must be copied on any such inquiry;
and

 

(iii)                            set a timeline and procedure to which the
Parties must adhere during the course of the Dispute process, including
confidentiality obligations, preparation of submissions and answers to
questions.

 

17

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(g)                                 The Parties agree to cooperate fully in the
expeditious conduct of the Independent Expert’s determination and provide the
Independent Expert with access to all facilities, books, records, documents,
information and personnel necessary to make a fully informed decision in an
expeditious manner.

 

(h)                                The Independent Expert shall have no ex parte
communications with any of the Parties concerning his or her determination.

 

(i)                                    A decision of the Independent Expert is
final and binding on the Distributor and the Supplier, except in the case of
manifest error.

 

(j)                                   Unless the Independent Expert, in his or
her absolute discretion, determines that the conduct of any Party is such that
it should bear all or a greater proportion, the costs and fees of the
Independent Expert will be shared equally by the Distributor and the Supplier.

 

15.                              FORCE MAJEURE

 

(a)                                If a Party is prevented in whole or in part
from carrying out its obligations under this Agreement (other than an obligation
to pay money) as a result of any strike, act of God, war, lockout, interference
of trade unions, act of government or government appointed agents, suspension of
labour, fire, earthquake, flood, storm, tempest, accident, interruption to power
or water supply, lack of freight facilities or delays on route, refusal of any
necessary import or export licence or any other cause (a “Force Majeure Event”)
beyond the reasonable control of the Party so prevented (the “Affected Party”),
then, subject to paragraph (b), and provided the Affected Party:

 

(i)                                  gives prompt written notice to the other
Party of the occurrence of the nature and expected duration of the Force Majeure
Event; and

 

(ii)                               has taken all proper precautions, due care
and reasonable alternative measures with the object of avoiding and mitigating
the effects of the Force Majeure Event and of carrying out its obligations,

 

the obligations of the Affected Party which cannot be performed (other than an
obligation to pay money) shall be suspended during the period in which the Force
Majeure Event continues, provided that should a shipment be suspended for more
than 1 month after the giving of the notice referred to in sub-paragraph
(a)(i) either the Distributor or the Supplier may at its option cancel the
shipment or delivery.

 

(b)                                The Affected Party agrees to use its
reasonable efforts to remedy any Force Majeure Event to the extent that it is
reasonably possible to do so, it being understood that it is not required under
paragraph (a) to settle any labour dispute against its will or to test the
validity or refrain from testing the validity of any law, order or regulation. 
Once any Force Majeure Event has been cured, the Supplier will recommence supply
to the Distributor and the Other Distributor in priority to any other customers
and in proportion to their relevant unfulfilled supply obligations.

 

18

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(c)                                 Subject to paragraph (d), where the Supplier
has declared a Force Majeure Event and such Force Majeure Event has prevented it
from Delivering Product under this Agreement, it shall be entitled to deduct the
amount of Product which it was prevented from Delivering from the quantity to
which its obligation under clause 4.2 of this Agreement applies.

 

(d)                                If the Force Majeure Event has prevented
Delivery of Product but not prevented ore being mined from the Mining
Operations, the Supplier shall not be entitled to deduct amount of Product as
contemplated by paragraph (c).

 

(e)                                 If the Distributor is the Affected Party and
the Force Majeure Event prevents it from taking Delivery at the Loading Port,
the Supplier will be entitled to sell Product in the Territory upon whatever
terms the Supplier (acting reasonably) thinks fit, having regard to the relevant
Price.  Quantities of Product sold in accordance with this paragraph are deemed
to have been delivered to Distributor for the purpose of determining whether the
Supplier has fulfilled its obligations to deliver Product to the Distributor
under this Agreement.

 

(f)                                  If, despite reasonable efforts on the part
of the Affected Party to avoid or mitigate the effects of an Event of Force
Majeure, the circumstances described in paragraph (a) continue substantially
unabated for a period of 6 months from the date of the notice given under that
paragraph:

 

(i)                                     the Parties must negotiate in good faith
to find a resolution of the circumstances; and

 

(ii)                                  if they are unable to agree upon a
resolution within 90 days after the expiry of the period of 6 months, either
Party may terminate this Agreement upon 30 days notice in writing without
prejudice to any other rights of the Parties accrued prior to the date of
termination.

 

16.                              TERMINATION

 

(a)                                Either Party may terminate this Agreement
immediately by notice to the other Party if the other Party commits a material
breach of this Agreement, unless:

 

(i)                                  the breach is capable of remedy, in which
case a Party may terminate this Agreement immediately by notice to the other
Party if the other Party fails to remedy the breach within 30 days after being
required in writing to do so; or

 

(ii)                               the breach relates to payment in respect of
which there is a bona fide dispute outstanding between the Parties as to the
quantum of a payment to be made.

 

(b)                                Each party’s further rights and obligations
cease immediately on termination of this Agreement but termination does not
affect:

 

(i)                                     a party’s accrued rights and obligations
at the date of termination; and

 

(ii)                               the continued existence and validity of the
rights and obligations of the parties under those clauses which are expressed to
survive termination

 

19

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and any provisions of this Agreement necessary for the interpretation or
enforcement of this Agreement.

 

(c)                                 On termination of this Agreement, the
Supplier may elect (by written notice to the Distributor) to repurchase the
stocks of Products as the Distributor may have at the time in store or under its
control.  If the Supplier does not make such an election, the Distributor is
permitted to sell and distribute those stocks of the Products as it may at the
time have in store or under its control to third parties.

 

(d)                                The termination of this Agreement does not of
itself give rise to any liability on the part of the Supplier to pay any
compensation to the Distributor, including but not limited to, for loss of
profits or goodwill.

 

(e)                                 The Supplier is entitled to cancel all
orders placed by the Distributor prior to the date of termination which have
been accepted by the Supplier without any liability of whatsoever nature to the
Supplier.

 

17.                              LIMIT OF LIABILITY

 

(a)                                Despite any other provision in this Agreement
and to the maximum extent permitted by law, neither Party will have any
liability to the other for any Consequential Loss howsoever arising (including
as a result of negligence or breach of any statutory duty).

 

(b)                                Subject to paragraph (a), the Parties are
entitled to all remedies available to them (including damages) for breach of any
term of this Agreement.

 

18.                              GOODS AND SERVICES TAX

 

18.1                       Interpretation

 

Words or expressions used in this clause which are defined in the A New Tax
System (Goods and Services Tax) Act 1999 (Cth) or in the A New Tax System (Goods
and Services Tax) Regulations 1999 (Cth) have the same meaning in this clause.

 

18.2                       Consideration is GST Exclusive

 

Any consideration to be paid or provided to a Party for a supply made by that
Party under or in connection with this Agreement is stated exclusive of GST.

 

18.3                       Gross Up of Consideration

 

Despite any other provision in this Agreement, if a Party (Supplying Party)
makes a taxable supply under or in connection with this Agreement on which GST
is imposed:

 

(a)                                the consideration payable or to be provided
for that supply under this Agreement but for the application of this clause (GST
exclusive consideration) is increased by, and the recipient of the supply
(Receiving Party) must also pay to the Supplying Party, an amount equal to the
GST exclusive consideration multiplied by the rate of GST applicable to the
supply; and

 

20

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(b)                                subject to the Supplying Party giving the
Receiving Party a Tax Invoice in relation to that supply, the amount by which
the GST exclusive consideration is increased must be paid to the Supplying Party
by the Receiving Party without set off, deduction or requirement for demand, on
or before the Payment Date shown on the tax invoice.

 

18.4                       Reimbursements (Net Down)

 

If a payment to a Party under this Agreement is a reimbursement or
indemnification, calculated by reference to a loss, cost or expense incurred by
that Party, then the payment will be reduced by the amount of any input tax
credit to which that Party is entitled for that loss, cost or expense.

 

18.5                       Requirements for Tax Invoices

 

Where the Supplier is required to provide a Tax Invoice to the Distributor, the
Tax Invoice must comply with the requirements of the GST Law (as a Tax Invoice)
and must, unless inconsistent with the GST Law, specify:

 

(a)                                the Supplier’s Australian Business Number;

 

(b)                                the Price due to the Supplier and the basis
of its calculation;

 

(c)                                 the amount of any GST paid or payable by the
Supplier with respect to the Price;

 

(d)                                the date of Delivery of the Product to which
the Tax Invoice relates;

 

(e)                                 a description (including quantity) of the
Product delivered;

 

(f)                                  if a discount is applicable, the discounted
Price; and

 

(g)                                 the Supplier’s address for payment.

 

19.                              VIENNA CONVENTION

 

The Parties exclude any application of the United Nations Convention on
Contracts for the International Sale of Goods adopted at Vienna, Australia on 11
April 1980, as given effect by the Sale of Goods (Vienna Convention) Act 1986
(WA) or any accession to or adoption of that convention at any time hereafter by
the country in which the place of business of the Distributor is situated, to
the sale and purchase of Product under this Agreement.

 

20.                              FAIRNESS

 

If there are changes in circumstances which the parties could not foresee at the
time of entering into this Agreement, the Party concerned must contact the other
Party and they will in good faith use their best endeavours to find an agreeable
solution.  However, failure to find an agreeable solution will not result in a
termination of this Agreement or relieve a Party from its obligations under this
Agreement.

 

21

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21.                              OBLIGATIONS OF SUPPLIER

 

(a)                                The Supplier must not transfer legal
ownership of the Mining Operations (directly or indirectly) to another party
unless that party assumes all the rights and obligations under this Agreement by
means of a deed of novation or similar instrument on terms reasonably acceptable
to the Distributor.

 

(b)                                The Supplier shall use all reasonable
endeavours to conduct its operations in relation to its Mining Operations in a
good, workmanlike and commercially reasonable manner, in accordance with
suitable engineering, mining and processing methods and practices with a view
to:

 

(i)                                     maximising its profitability;

 

(ii)                                  ensuring that the Distributor receives its
Offtake Percentage in each Supply Period; and

 

(iii)                            continuing to develop the Mining Operations in
a prudent commercial manner to maximise the value from the ore body taking into
account the Distributor’s long term view of the lithium market and taking into
account the current reserves statement,

 

and the Supplier acknowledges that, if it undertakes further mining developments
or operations in the vicinity of the Mining Operations, any Product produced
from ore recovered as a result of such further mining developments or operations
will be subject to the terms of this Agreement.

 

22.                              CONFIDENTIALITY

 

22.1                       Confidentiality Restrictions

 

Subject to clause 22.2, a Party must not disclose, or use for a purpose other
than contemplated by this agreement, any Confidential Information.

 

22.2                       Permitted Disclosure

 

(a)                                A Party may disclose any Confidential
Information:

 

(i)                                  on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 22, to its
officers, employees, professional advisors, related bodies corporate, or the
officers, employees or professional advisors of its related bodies corporate;

 

(ii)                               in enforcing this Agreement or in a judicial
or arbitral proceeding arising out of or in connection with this agreement;

 

(iii)                            to the extent required by law or the rules of
any securities exchange on which any securities of the Party or a related body
corporate of the Party are quoted;

 

(iv)                              to the extent required or permitted by this
Agreement; or

 

22

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(v)                                 with the prior consent of the Party which
originally supplied that Confidential Information (the disclosing Party) in
connection with this agreement.

 

(b)                                A Party may disclose Confidential
Information:

 

(i)                                     to the extent necessary in connection
with a capital raising by the Party or a related body corporate of the Party;

 

(ii)                                  on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 22, to:

 

(A)                              a bona fide proposed or prospective purchaser
of any shares from the Party;

 

(B)                              a bona fide current, proposed or prospective
financier of the Party or a related body corporate of the Party; or

 

(C)                              officers, employees or professional advisors of
such purchaser or financier.

 

22.3                       Prior Advice and Related Obligations

 

In the case of any disclosure of Confidential Information pursuant to
clause 22.2(a)(iii), the Party must:

 

(a)                                notify the disclosing Party before or, if
this is not practical, as soon as the disclosure is made; and

 

(b)                                use reasonable endeavours to (and assist the
disclosing Party at the disclosing Party’s expense to) restrict distribution of
the Confidential Information and otherwise take all reasonable steps to preserve
its confidentiality.

 

22.4                       Damages Not an Adequate Remedy

 

Each Party acknowledges that:

 

(a)                                damages will not be an adequate remedy for
any breach of this clause 22; and

 

(b)                                specific performance and injunctive relief
are appropriate remedies for any threatened or actual breach (without the need
to give an undertaking as to damages), in addition to any other remedies
available at law or in equity under or independently of this agreement.

 

22.5                       Survival of Obligation

 

This clause 22 survives and continues to bind the parties for two years
following termination of this agreement.

 

23

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23.                              GOVERNING LAW

 

This Agreement shall be governed by the law in force in Western Australia and
each Party submits to the exclusive jurisdiction of the courts of Western
Australia in relation to the Agreement.

 

24.                              NOTICES

 

Any notice, demand, consent or other communication (a Notice) given or made
under this Agreement:

 

(a)                                must be in writing in English and signed by
the sender or a person duly authorised by the sender (or in the case of email,
set out the full name and position or title of the sender or person duly
authorised by the sender);

 

(b)                                must be delivered to the intended recipient
by prepaid post (if posted to an address in another country, by registered
airmail) or by hand, fax or email to the address, fax number or email address
set out on page 1 or the address, fax number or email address last notified by
the intended recipient to the sender;

 

(c)                                 will be conclusively taken to be duly given
or made:

 

(i)                                     in the case of delivery in person, when
delivered;

 

(ii)                               in the case of delivery by post, two business
days after the date of posting (if posted to an address in the same country) or
seven business days after the date of posting (if posted to an address in
another country);

 

(iii)                            in the case of fax, on receipt by the sender of
a transmission control report from the despatching machine showing the relevant
number of pages and the correct destination fax number or name of recipient and
indicating that the transmission has been made without error; and

 

(iv)                              in the case of email, the earlier of:

 

(A)                              the time that the sender receives an automated
message from the intended recipient’s information system confirming delivery of
the email; and

 

(B)                              the time that the intended recipient, or an
employee or officer of the intended recipient acknowledges receipt,

 

but if the result is that a Notice would be taken to be given or made on a day
that is not a business day in the place specified by the intended recipient as
its postal address under paragraph (b), it will be conclusively taken to have
been duly given or made at the start of business on the next business day in
that place.

 

24

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25.                              MISCELLANEOUS

 

25.1                       Assignment

 

(a)                                Subject to paragraph (b), neither Party may
assign this Agreement nor their rights and obligations hereunder without the
prior written consent of the other Party, which must not be unreasonably
withheld.

 

(b)                                The Distributor may nominate a related body
corporate as the entity that is to purchase Product under this Agreement,
provided that the Distributor will remain responsible for the performance of its
obligations under this Agreement.

 

25.2                       Variation

 

Variation of any term of this Agreement must be in writing and signed by the
Parties.

 

25.3                       Waiver

 

(a)                                An election not to exercise of any right,
power, authority discretion or remedy arising upon default under this Agreement
must be in writing and signed by the Party making the election.

 

(b)                                A failure or delay in exercise, or partial
exercise, of a right, power, authority, discretion or remedy created or arising
upon default under this Agreement, does not result in a waiver of that right.

 

(c)                                 A Party is not entitled to rely on a delay
in the exercise or non-exercise of a right, power, authority, discretion or
remedy arising from a breach of this Agreement or on a default under this
Agreement as constituting a waiver of that right, power, authority, discretion
or remedy.

 

(d)                                A Party may not rely on any conduct of
another Party as a defence to exercise of a right, power, authority, discretion
or remedy by that other Party.

 

25.4                       Costs

 

Each Party must pay its own costs and expenses of negotiating, preparing,
executing and performing its obligations under this Agreement.

 

25.5                       Further Assurance

 

Each Party must do all things and execute all further documents necessary to
give full effect to the transactions contemplated by this Agreement.

 

25.6                       Severance

 

If any provision of this Agreement is invalid and not enforceable in accordance
with its terms, all other provisions which are self-sustaining and capable of
separate enforcement without regard to the invalid provision, shall be and
continue to be valid and forceful in accordance with their terms.

 

25

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25.7                       Entire Agreement

 

This Agreement constitutes the entire agreement of the parties about its subject
matter and supersedes all previous agreements, understandings and negotiations
on that subject matter.

 

25.8                       Counterparts

 

This Agreement may be executed in counterparts.  All executed counterparts
constitute one document.

 

EXECUTED as an agreement.

 

26

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SIGNING PAGE

 

Dated:

 

 

 

 

 

 

EXECUTED by TALISON LITHIUM AUSTRALIA PTY LTD in accordance with section
127(1) of the Corporations Act 2001 (Cth) by authority of its directors:

 

 

 

 

 

 

 

 

 

 

 

Signature of director

 

Signature of director/company secretary*

 

 

*delete whichever is not applicable

 

 

 

 

 

 

Name of director (block letters)

 

Name of director/company secretary*

 

 

(block letters)

 

 

*delete whichever is not applicable

 

 

 

 

 

 

Signed for ROCKWOOD LITHIUM GmbH by its authorised representative in the
presence of:

 

 

 

 

 

 

 

Authorised Representative Signature

 

 

 

 

 

 

 

 

 

Witness Signature

 

Print Name

 

 

 

 

 

 

 

 

 

Print Name

 

Position

 

--------------------------------------------------------------------------------

 

[g96561kk33i001.jpg]

 

CLIFFORD CHANCE

 

EXECUTION VERSION

 

TALISON LITHIUM AUSTRALIA PTY LTD

 

TIANQI GROUP HK CO., LIMITED

 

--------------------------------------------------------------------------------

 

DISTRIBUTION AGREEMENT

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

CONTENTS

 

Clause

 

Page

 

 

 

DETAILS

1

GENERAL TERMS

2

1.

DEFINITIONS AND INTERPRETATION

2

1.1

Definitions

2

1.2

Related Bodies Corporate

5

1.3

Interpretation

6

2.

APPOINTMENT

7

3.

TERM

7

4.

QUANTITY

8

4.1

Production and Offtake Nominations

8

4.2

Obligation to Take and Deliver

9

4.3

Under and Over Production

9

5.

DELIVERY AND SHIPPING

9

5.1

Delivery

9

5.2

Deliveries of Out of Specification Product

10

5.3

Transport and Shipping

10

5.4

FOB Loading Terms at Loading Port

11

5.5

Insurance

11

6.

WEIGHING AND SAMPLING

11

6.1

Loading Port

11

6.2

Documentation for Distributor

11

6.3

Discharge Port

12

7.

PRICE

12

7.1

Price

12

7.2

Penalties

13

8.

PAYMENT

13

8.1

Payment

13

8.2

Disputed Amounts

14

8.3

Evidence of Basis of Calculations

14

8.4

Interest

14

9.

SPECIFICATIONS

14

10.

DISTRIBUTOR’S OBLIGATIONS

14

11.

SUPPLIER’S OBLIGATIONS

16

12.

TEMPORARY CLOSURE — CARE AND MAINTENANCE

16

13.

TITLE AND RISK

16

13.1

Risk

16

13.2

Title

17

14.

DISPUTE RESOLUTION

17

15.

FORCE MAJEURE

18

 

i

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16.

TERMINATION

19

17.

LIMIT OF LIABILITY

20

18.

GOODS AND SERVICES TAX

20

18.1

Interpretation

20

18.2

Consideration is GST Exclusive

20

18.3

Gross Up of Consideration

20

18.4

Reimbursements (Net Down)

21

18.5

Requirements for Tax Invoices

21

19.

VIENNA CONVENTION

21

20.

FAIRNESS

21

21.

OBLIGATIONS OF SUPPLIER

22

22.

CONFIDENTIALITY

22

22.1

Confidentiality Restrictions

22

22.2

Permitted Disclosure

22

22.3

Prior Advice and Related Obligations

23

22.4

Damages Not an Adequate Remedy

23

22.5

Survival of Obligation

23

23.

GOVERNING LAW

24

24.

NOTICES

24

25.

MISCELLANEOUS

25

25.1

Assignment

25

25.2

Variation

25

25.3

Waiver

25

25.4

Costs

25

25.5

Further Assurance

25

25.6

Severance

26

25.7

Entire Agreement

26

25.8

Counterparts

26

SIGNING PAGE

27

 

ii

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DETAILS

 

Parties

 

Supplier and Distributor

 

 

 

Supplier

 

Name

 

Talison Lithium Australia Pty Ltd

 

 

 

 

 

 

 

ABN

 

39 139 401 308

 

 

 

 

 

 

 

Address

 

Level 4, 37 St Georges Terrace, Perth, Western Australia, 6000

 

 

 

 

 

 

 

Fax

 

+61 8 9202 1144

 

 

 

 

 

 

 

Email

 

Lorry.Mignacca@talisonlithium.com and Emma.Hall@talisonlithium.com

 

 

 

 

 

 

 

Attention

 

CEO and Commercial Manager

 

 

 

 

 

Distributor

 

Name

 

Tianqi Group HK Co., Limited

 

 

 

 

 

 

 

Incorporated in

 

Hong Kong (Companies Registry No. 1778886)

 

 

 

 

 

 

 

Address

 

Room B, 14th Floor, Wah Hen Commercial Centre, 383 Henessy Road, Wanchai, Hong
Kong, China

 

 

 

 

 

 

 

Fax

 

+86 28 8518 3501

 

 

 

 

 

 

 

Email

 

vivianwu@tianqilithium.com

 

 

 

 

 

 

 

Attention

 

Vivian Wu

 

 

 

 

 

Recitals

 

A

 

The Supplier and the Distributor have agreed to enter into this distribution
agreement in relation to the sale by the Supplier and the purchase by the
Distributor of a percentage of production of Product from the Mining Operations
owned by the Supplier.

 

 

 

 

 

 

 

B

 

The Distributor shall have the right to take in each Contract Year during the
Term a percentage of Product up to the Maximum Offtake

 

 

 

 

 

Date

 

See Signing page

 

 

 

1

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GENERAL TERMS

 

1.                                     DEFINITIONS AND INTERPRETATION

 

1.1                              Definitions

 

In this Agreement:

 

“Acquisition Agreement” means the agreement entered into on 29 November 2013
between RT Lithium Limited, Tianqi Group HK Co., Limited, Leader Investment
Corporation and Windfield, as amended and restated on 31 March 2014.

 

“Agreed Offtake Amount” has the meaning set out in clause 4.2.

 

“Agreement” means this agreement and its schedules.

 

“Affected Party” has the meaning set out in clause 15(a).

 

“Bank Account” means the bank account nominated by the Supplier to the
Distributor in writing from time to time into which payments to the Supplier
under this Agreement are to be made.

 

“Business Day” means a day which is not a Saturday, Sunday, or a public holiday
in Chengdu, Frankfurt or Perth.

 

“Care and Maintenance Suspension” has the meaning set out in clause 12(a).

 

“Change of Control”, in relation to a Party, occurs when a person (or persons
who are acting in concert in relation to the affairs of the Party or a holding
company of the Party), who did not control the Party at the time it became a
Party, begins to control the Party except if the Change of Control is caused
solely by:

 

(a)                                a bona fide acquisition of shares in the
capital of, or a bona fide reorganisation undertaken by, the ultimate holding
company of the Party; or

 

(b)                                the Party beginning to be controlled by a
subsidiary of its ultimate holding company.

 

“Commencement Date” means the date on which Completion occurs.

 

“Completion” means completion as defined in the Acquisition Agreement.

 

“Confidential Information” means:

 

(a)                                the existence of and terms of this Agreement;
or

 

(b)                                any unpublished information or documents
disclosed to a Party by the other Party in connection with this Agreement
(including information and documents supplied before the date of this
Agreement),

 

but excludes information or documents which:

 

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(c)                                 at the time it was first disclosed to the
Party, was already in the lawful possession of the Party; or

 

(d)                                becomes available to the Party lawfully
through sources other than the other Party or its related bodies corporate.

 

“Confirmed Production” has the meaning set out in clause 4.1(b).

 

“Consequential Loss” means any loss or damage suffered by a party which is
indirect or consequential loss or damage within the meaning of the common law
including loss of profits, loss of goodwill or credit and loss of opportunity,
however arising.

 

“Contract Year” means:

 

(a)                                for the first year, the period between the
Commencement Date and 31 December of that year;

 

(b)                                subject to paragraph (c), for every year
thereafter, the period between 1 January and 31 December inclusive; and

 

(c)                                 for the final year, the period between 1
January of that year and the date on which this Agreement expires or is earlier
terminated.

 

“Corporations Law” means the Corporations Act 2001 (Cth).

 

“Deliver” means the Supplier delivering Product to the Distributor at the
Loading Port in accordance with the terms of this Agreement, including in
accordance with an Indicative Delivery Schedule.

 

“Discharge Port” means the destination port for a vessel carrying Product.

 

“Dispute” has the meaning set out in clause 14(a).

 

“End of Life of the Mining Operations” means the date on which the Supplier
ceases to extract lithium ore from the Mining Operations, on the basis that it
has decided, in good faith and on reasonable grounds, that the ore reserve at
the Mining Operations has been depleted to such a level that it would be no
longer economically feasible to continue to extract lithium ore to produce ore
suitable for the production of technical grade product in commercially
recoverable quantities.

 

“Estimated Production” has the meaning set out in clause 4.1(a).

 

“FOB” means “Free on Board” as that term is defined or described in Incoterms®
2010.

 

“Force Majeure Event” has the meaning set out in clause 15(a).

 

“Independent Expert” has the meaning set out in clause 14(b).

 

“Indicative Delivery Schedule” has the meaning set out in clause 5.1(a), as such
Indicative Delivery Schedule may be amended pursuant to clause 5.1(b) from time
to time.

 

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“Interest Rate” means the rate per annum being the sum of the Reference Rate on
which the payment was due, plus a margin of 5%, calculated daily, where the
Reference Rate is the arithmetic mean of the rates displayed at or about 10.30am
(Perth time) on the Reuters screen LIBOR page for USD for a 3 month term and, if
there is none, the Reference Rate will be the rate selected by the Supplier as
equivalent.

 

“IMO” means the International Maritime Organisation.

 

“Loading Port” means the Port of Bunbury or the Port of Fremantle or such other
port nominated by the Supplier for loading of Product for delivery by the
Supplier.

 

“Maximum Offtake” means a quantity of Product that equals the Offtake Percentage
of the Confirmed Production attributable to the relevant Contract Year and that
is not contracted to be sold to a third party under a contract entered into
before the Commencement Date.

 

“Mining Operations” means the Supplier’s lithium operation known as the Talison
Greenbushes Lithium Operations located at Greenbushes, Western Australia,
including the mine site and processing plants.

 

“Offtake Estimate” has the meaning set out in clause 4.1(c)(ii).

 

“Offtake Nomination” has the meaning set out in clause 4.1(c)(i).

 

“Offtake Percentage” means:

 

(a)                                for so long as the Distributor or a related
body corporate of the Distributor is a holder of shares in Windfield, 50% of the
Supplier’s actual production of Product from the Mining Operations; or

 

(b)                                if the Distributor or a related body
corporate of the Distributor ceases to be a holder of shares in Windfield, the
lesser of:

 

(i)                                   the quantity of the Supplier’s actual
production of Product from the Mining Operations taken by the Distributor during
the four Supply Periods immediately prior to the Distributor or a related body
corporate of the Distributor ceasing to be a holder of shares in Windfield; and

 

(ii)                              50% of the Estimated Production for the
Contract Year in which the Distributor or a related body corporate of the
Distributor ceases to be a holder of shares in Windfield,

 

provided that the quantity of Product determined in accordance with paragraph
(b)(i) or (b)(ii) must not be more than 50% of the Estimated Production in any
Contract Year after the Distributor or a related body corporate of the
Distributor ceases to be a holder of shares in Windfield.

 

“Other Distribution Agreement” means the distribution agreement, on
substantially the same terms as this Agreement, entered into by the Other
Distributor and the Supplier on the date of this Agreement.

 

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“Other Distributor” means Rockwood Lithium GmbH.

 

“Party” means either the Supplier or the Distributor and “Parties” means both
the Supplier and the Distributor.

 

“Payment Date” means the due date for payment as shown in an invoice issued by
the Supplier under this Agreement.

 

“Penalties” has the meaning set out in clause 7.2(a).

 

“Price” has the meaning set out in clause 7.1(a).

 

“Production Percentage” has the meaning set out in clause 4.3(a).

 

“Product” means any product produced by the Mining Operations that is not used
for conversion to lithium carbonate, lithium hydroxide or other lithium
chemicals.

 

“Shareholders Agreement” means the shareholders agreement entered into on 31
March 2014 between Chengdu Tianqi Group Co., Ltd., Tianqi Group HK Co., Limited,
Sichuan Tianqi Lithium Industries, Inc., Tianqi UK Limited, RT Lithium Limited
and Windfield.

 

“Specifications” has the meaning given in clause 9(a).

 

“Supply Period” means, for the first Supply Period, the period between the
Commencement Date and 31 March 2014 and, thereafter, the periods between 1
April and 30 June inclusive, 1 July and 30 September inclusive, 1 October and
31 December inclusive and 1 January and 31 March inclusive.

 

“Telegraphic Transfer” means the electronic transfer of money affected by a
sending bank and a receiving bank from one bank account to another bank account.

 

“Term” has the meaning set out in clause 3(a).

 

“Territory” means Peoples’ Republic of China, Hong Kong and Taiwan.

 

“Windfield” means Windfield Holdings Pty Ltd (ACN 160 456 164).

 

“Windfield Group” means Windfield and each of its subsidiaries from time to time
and “Windfield Group Entity” means any one of them.

 

1.2                              Related Bodies Corporate

 

(a)                                Subject to paragraph (c), an entity is a
related body corporate of a person if it is a holding company, a subsidiary or
another subsidiary of a holding company of that person.

 

(b)                                Subject to paragraph (c), an entity is a
subsidiary of another person (its holding company) if that person, whether
directly or indirectly through one or more other subsidiaries:

 

(i)                                     holds a majority of the voting rights in
it;

 

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(ii)                               is a member or shareholder of it and has the
right to appoint or remove a majority of its board of directors or equivalent
managing body;

 

(iii)                            is a member or shareholder of it and controls
alone, or pursuant to an agreement with other members or shareholders, a
majority of the voting rights in it; or

 

(iv)                           has the right to exercise a dominant influence
over it, for example by having the right to give directions with respect to its
operating and financial policies, with which directions its directors or other
officers are obliged to comply.

 

(c)                                 In respect of the use of the terms related
body corporate, holding company and subsidiary in this Agreement:

 

(i)                                    no Windfield Group Entity is a related
body corporate of the Distributor and vice versa, such that the Distributor is
not a holding company of a Windfield Group Entity and no Windfield Group Entity
is a subsidiary of the Distributor; and

 

(ii)                                 Sichuan Tianqi Lithium Industries, Inc. and
it subsidiaries are deemed to be subsidiaries of Chengdu Tianqi Group Co., Ltd.
and Chengdu Tianqi Group Co., Ltd. a holding company of those entities.

 

1.3                              Interpretation

 

The following rules apply to the interpretation of this Agreement:

 

(a)                                the singular includes the plural and vice
versa, and a gender includes other genders;

 

(b)                                another grammatical form of a defined word or
expression has a corresponding meaning;

 

(c)                                 a reference to a document or instrument
includes the document or instrument as novated, altered, supplemented or
replaced from time to time;

 

(d)                                a reference to USD is to the currency of the
United States of America;

 

(e)                                 a reference to AUD is to the currency of
Australia;

 

(f)                                  a reference to a party is to a Party to
this Agreement, and a reference to a party to a document includes the party’s
officers, employees, executors, administrators, successors and permitted assigns
and substitutes;

 

(g)                                 a reference to a person includes a natural
person, partnership, body corporate, association, governmental or local
authority or agency or other entity;

 

(h)                                a reference to a statute, ordinance, code or
other law includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of any of them;

 

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(i)                                    the meaning of general words is not
limited by specific examples introduced by including, for example or similar
expressions;

 

(j)                                   any agreement, representation, warranty or
indemnity by two or more parties (including where two or more persons are
included in the same defined term) binds them jointly and severally;

 

(k)                                any agreement, representation, warranty or
indemnity in favour of two or more parties (including where two or more persons
are included in the same defined term) is for the benefit of them jointly and
severally;

 

(l)                                    a rule of construction does not apply to
the disadvantage of a Party because the Party was responsible for the
preparation of this Agreement or any part of it;

 

(m)                            if a day on or by which an obligation must be
performed or an event must occur is not a Business Day, the obligation must be
performed or the event must occur on or by the next Business Day;

 

(n)                                headings are for ease of reference only and
do not affect interpretation; and

 

(o)                                a Party is to be taken to discharge an
obligation under this Agreement or to exercise any right under this Agreement if
the obligation is discharged or the right is exercised by a related body
corporate of that Party.

 

2.                                     APPOINTMENT

 

The Supplier appoints the Distributor as its distributor to import, market, sell
and distribute the Products in the Territory on the terms of this Agreement.

 

3.                                     TERM

 

(a)                                Subject to early termination under clauses
3(b) or 16, the term of this Agreement shall be the period commencing on the
Commencement Date and ending on the later of:

 

(i)                                     the date which is 20 years after the
Commencement Date; and

 

(ii)                                  the end of the term of the Shareholders
Agreement,

 

(Term).

 

(b)                                This Agreement shall automatically terminate
on the End of Life of the Mining Operations.

 

(c)                                 If the Distributor (or its related body
corporate) ceases to be the holder of shares in Windfield, then the Parties will
negotiate in good faith to make such amendments as are necessarily required to
ensure compliance with applicable laws (including competition laws).

 

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4.                                     QUANTITY

 

4.1                              Production and Offtake Nominations

 

(a)                                In conjunction with the preparation of the
draft Budget and Business Plan to be prepared in accordance with the
Shareholders Agreement and, in any event by not later than 4 months prior to the
commencement of each Contract Year (and within 3 months after the Commencement
Date in the case of the first Contract Year), the Supplier and the Distributor
must consult in good faith to determine the quantity of Product that the
Supplier estimates will be produced in that Contract Year and the following
Contract Year (Estimated Production).  Upon making such determination, the
Supplier must provide notice to the Distributor setting out the amount of the
Estimated Production so determined, with such notice to provide a breakdown of
the Estimated Production for each calendar quarter during the applicable
Contract Years.

 

(b)                                By not later than 30 September of each
Contract Year (or within 4 months after the Commencement Date in the case of the
first Contract Year), the Supplier must provide notice to the Distributor of the
confirmed production volumes for Product in the following Contract Year
(Confirmed Production), with such notice to provide a breakdown of the estimated
production for each calendar quarter during the applicable Contract Year.

 

(c)                                 By not later than 30 October, 31 January, 30
April and 31 July of each Contract Year (and within 5 months after the
Commencement Date in the case of the first Contract Year), the Distributor must:

 

(i)                                  notify the Supplier of the quantity of
Product that the Distributor proposes to purchase in the next Supply Period
(Offtake Nomination); and

 

(ii)                               provide the Supplier with an estimate of the
quantity of Product that the Distributor is likely to purchase in the following
three Supply Periods for which the relevant Offtake Nomination is made (Offtake
Estimate).

 

The Distributor must not make an Offtake Nomination for a quantity of Product
that would exceed the total amount of Confirmed Production for the relevant
Supply Period.

 

(d)                                Subject to any other provision of this
Agreement to the contrary, the Supplier must treat the Distributor on the same
basis as the Other Distributor in relation to the sale and purchase of Product
provided for in this Agreement.

 

(e)                                 If:

 

(i)                                  the Other Distributor does not contract
with the Supplier to take its maximum offtake of Product for a Supply Period
under the Other Distribution Agreement; and

 

(ii)                               the Distributor has made an Offtake
Nomination for a quantity that exceeds the Maximum Offtake under this Agreement
for that same Supply Period,

 

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then the Distributor will be obliged to purchase an amount of the Other 
Distributor’s uncontracted quantity that is equal to the difference between the
Other Distributor’s offtake nomination and its maximum offtake during the
applicable Supply Period, provided however that the Distributor will not be
required to purchase more than its Offtake Nomination.

 

4.2                              Obligation to Take and Deliver

 

The Supplier must sell to the Distributor, and the Distributor must purchase
from the Supplier, the quantity of Product that the Distributor notifies as its
Offtake Nomination for each Supply Period or such other amount as may be
determined in accordance with clause 4.1(e) (in either case, Agreed Offtake
Amount).

 

4.3                              Under and Over Production

 

(a)                                If the forecast production of Product from
the Mining Operations is less than the Confirmed Production for the relevant
Contract Year, the quantity of Product to be made available to the Distributor
(and the Other Distributor) and the quantity of Product that the Supplier is
obliged to Deliver to the Distributor will then be determined by multiplying the
Agreed Offtake Amount by the Production Percentage, where the Production
Percentage (expressed as a percentage) is calculated as follows:

 

Production

=

Forecast Production for relevant Contract Year

     x 100

Percentage

Confirmed Production for relevant Contract Year

 

(b)                                If the forecast production of Product from
the Mining Operations is more than the Confirmed Production for the relevant
Contract Year, the Supplier must notify the Distributor as soon as reasonably
practicable of the over production and the Distributor may elect to increase the
quantity of Product to be Delivered by the Supplier. The increased quantity of
Product nominated by the Distributor must not, unless otherwise agreed, exceed
the amount determined by multiplying the Agreed Offtake Amount by the Production
Percentage.

 

(c)                                 In order to determine whether the Supplier
has delivered the Agreed Offtake Amount, the Supplier must, upon request,
provide reasonable evidence and records to the Distributor at the end of each
Contract Year in relation to the total quantity of Product produced in that
Contract Year.

 

5.                                     DELIVERY AND SHIPPING

 

5.1                              Delivery

 

(a)                                The Supplier and the Distributor must consult
in good faith to determine an indicative delivery schedule for each Supply
Period (Indicative Delivery Schedule) in conjunction with the Offtake Nomination
to be made in respect of that Supply Period.  The Indicative Delivery Schedule
must specify the

 

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quantity of Product anticipated to be Delivered each month during the relevant
Supply Period.

 

(b)                                Subject to clause 4.3, the Supplier will use
all reasonable endeavours to Deliver Product to the Distributor in accordance
with the Indicative Delivery Schedule. Each Party must inform the other Party as
soon as practicable after it becomes aware of any circumstances that may have a
material impact on the Indicative Delivery Schedule and the Parties agree to
negotiate in good faith to agree mutually acceptable amendments to the
Indicative Delivery Schedule.

 

(c)                                 Prior to each calendar quarter (commencing 1
January, 1 April, 1 July and 1 October), the Supplier must provide the
Distributor with a forecast of its anticipated production for the succeeding
quarter, and propose any necessary adjustment to the Indicative Delivery
Schedule arising from any difference in the then anticipated production compared
with the Confirmed Production provided under clause 4.1(b).

 

(d)                                Unless otherwise agreed by the Parties
(acting reasonably), Product must be Delivered to the Distributor by the
Supplier on an FOB basis to the Loading Port nominated in the Indicative
Delivery Schedule.

 

(e)                                 All packaging of Product for Delivery must
be in bulk.  Delivery of Product in smaller quantities will be to the
Distributor’s cost.

 

5.2                              Deliveries of Out of Specification Product

 

(a)                                If at any time prior to the loading of a
vessel or truck for Delivery to the Distributor, the Supplier determines that
any delivery of Product will not meet the Specifications, the Supplier must
provide notice of this to the Distributor as soon as practicable.

 

(b)                                Upon receipt of a notice pursuant to
paragraph (a), the Supplier and the Distributor will meet to discuss in good
faith the most appropriate steps to be taken having regard to the interests of
both Parties.  If the Parties are unable to agree the most appropriate steps to
be taken within 30 days of the notice being given under paragraph (a), then the
Distributor may elect to reject the Product the subject of the proposed
delivery.

 

(c)                                 If the Distributor rejects any delivery of
Product pursuant to paragraph (b), the Supplier will negotiate in good faith
with the Distributor (and the Other Distributor) to find a third party buyer for
the relevant Delivery.

 

5.3                              Transport and Shipping

 

(a)                                The Supplier will organise:

 

(i)                                  the transportation of Product for Delivery
from the Mining Operations to the Loading Port, the cost of which will be borne
by the Supplier; and

 

(ii)                               such other transportation, shipping and
logistics services from the Loading Port to the place of destination as may be
required by the

 

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Distributor, including arranging for vessels to transport Product, scheduling
and notification of arrival of vessels, freight, packaging, handling and storing
of Product and such other transportation and shipping logistics services from
the Loading Port to the place of destination as may be required by the
Distributor on a full cost recovery basis.

 

(b)                                Subject to paragraph (c), if the Supplier
enters into any arrangements with third parties for the provision of
transportation, shipping and logistics services from the Loading Port to the
place of destination for the purposes of any shipment of Product to be delivered
to the Distributor pursuant to paragraph (a)(ii), then all risks relating to,
and any liabilities associated with, such arrangements shall be borne by the
Distributor.

 

(c)                                 Where any such transportation, shipping and
logistics services arrangements entered into with third parties are not used
solely for the purposes of Product to be delivered to the Distributor, any risks
and liabilities to be borne by the Distributor under paragraph (b) shall be
determined based on the proportion that the amount of Product to be delivered to
the Distributor bears to the aggregate of all amounts of Product in respect of
which the applicable services are being used.

 

5.4                              FOB Loading Terms at Loading Port

 

The Supplier is responsible for loading the Product on to the carrying vessel at
the Loading Port at its own risk and expense.

 

5.5                              Insurance

 

The Supplier must maintain with reputable insurance companies such insurances as
to cover the Mining Operations against such risks and perils and in such amounts
customary in the case of similar operations, including:

 

(a)                                public (third party) liability and property
damage to a limit of not less than AUD20,000,000 per event and in the aggregate;
and

 

(b)                                road transport and loading cargo insurance
for all Deliveries on an FOB basis to cover all cargo against loss, damage and
theft.

 

6.                                     WEIGHING AND SAMPLING

 

6.1                              Loading Port

 

At the Loading Port, the Supplier (at the Supplier’s expense) must, in
accordance with the Supplier’s standard practice, weigh, sample and determine
the assay of the Products loaded on to each carrying vessel for Delivery to the
Distributor.

 

6.2                              Documentation for Distributor

 

As soon as practicable after the loading of each carrying vessel for Delivery to
the Distributor, the Supplier must provide to the Distributor:

 

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(a)                                a certificate setting out details of the
weight, sample and assay of the Products as determined by the Supplier in
accordance with clause 6.1, such certificate to include analysis by reference to
the Specifications; and

 

(b)                                a complete set of three original FOB bills of
lading.

 

The certificate provided by the Supplier under paragraph (a) will be final and
binding in the absence of manifest error.

 

6.3                              Discharge Port

 

At the Discharge Port, the Distributor (at the Distributor’s expense) may
conduct its own weighing, sampling and determination of the assay of the Product
discharged from each carrying vessel for delivery to the Distributor.  Such
weighing, sampling and determination of the assay of the Product by the
Distributor will not impact upon the Supplier’s determination of those matters
in accordance with clause 6.1.

 

7.                                     PRICE

 

7.1                              Price

 

(a)                                The price (Price) payable by the Distributor
to the Supplier for each type of Product to be sold and purchased under this
Agreement in each Contract Year shall be determined in accordance with the
following formula:

 

Price = CY Production Costs + Agreed Margin

 

Where:

 

“CY Production Costs” means the AUD estimate of the costs to be incurred in
connection with the production of the type of Product to be sold and purchased
in the applicable Contract Year as set out in the approved annual budget which
forms part of the approved Budget and Business Plan to be prepared in accordance
with the Shareholders Agreement, converted into USD based on the exchange rate
assumed in that budget; and

 

“Agreed Margin” means the USD amount calculated by deducting the 2013 Production
Costs for the relevant Product type from the Base Price for that Product type. 
For the purposes of this definition:

 

(i)                                  “Base Price” means the weighted average FOB
price (expressed in USD) received by the Supplier for each type of Product sold
during the 2013 calendar year or, if no Product of that type was produced in the
2013 calendar year, the most recent year in which that type of Product was
produced.  For the avoidance of doubt, if the relevant type of Product was sold
on a CIF, CFR or other non-FOB basis, then the FOB Price shall be determined by
deducting any component of the invoiced price for shipments of that Product type
that is attributable to freight and other non-FOB costs and charges; and

 

(ii)                               “2013 Production Costs” means the cost of
production for each type of Product sold during the 2013 calendar year or, if no
Product of that type

 

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was produced in the 2013 calendar year, the most recent year in which that type
of Product was produced, converted into USD where 1USD = 0.9345AUD.

 

For the avoidance of doubt, the Agreed Margin may be different for each type of
Product.

 

(b)                                The Supplier shall provide notice of the
Price determined in accordance with paragraph (a) to the Distributor by not
later than one month prior to the commencement of each Calendar Year.

 

(c)                                 The Parties will meet annually to discuss in
good faith and agree whether the Agreed Margin in paragraph (a) should be
adjusted to reflect the current market price for that Product.  It is envisaged
that movements in the global lithium carbonate price will be the reference point
used to determine a change in the Agreed Margin.

 

(d)                                If the Parties are unable to agree to adjust
the pricing mechanism under as part of the good faith discussions contemplated
by paragraph (c), then until such time as the Parties are able to agree new
pricing mechanism, the Price will be determined in accordance with the mechanism
contained in paragraph (a).

 

(e)                                 The Price for Product purchased by the
Distributor under this Agreement will be the same as the price on an FOB basis
paid by the Other Distributor pursuant to the Other Distribution Agreement for
each Product type.

 

7.2                              Penalties

 

(a)                                The Supplier and the Distributor shall enter
into good faith discussions to determine the penalties that will apply if the
Product Delivered by the Supplier does not meet the Specifications (Penalties). 
For the purposes of this paragraph (a), each Party agrees that it will not adopt
positions during any good faith discussions that are intended to create an
economic advantage for that Party.

 

(b)                                No Penalty can apply to any Delivery of
Product which meets the Specifications.

 

8.                                     PAYMENT

 

8.1                              Payment

 

(a)                                The Supplier will issue an invoice for each
Delivery of Product.  The amount of the invoice will be calculated on the basis
of the information stated in the certificate provided by the Supplier in
accordance with clause 6.2 and the applicable Price.

 

(b)                                The Distributor must pay each invoice by
Telegraphic Transfer to the Bank Account in immediately available funds on or
before the Payment Date shown in the invoice (being no less than 60 days after
the relevant bill of lading).

 

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8.2                              Disputed Amounts

 

If a Party disputes an amount payable by it under this clause 8, that Party
shall pay any undisputed amount in accordance with this clause 8.

 

8.3                              Evidence of Basis of Calculations

 

Upon request by the Distributor, the Supplier shall provide the Distributor with
all documents or other information reasonably necessary to support the amount of
any invoice issued by the Supplier.

 

8.4                              Interest

 

If the Distributor does not pay an amount payable by it under this Agreement by
the Payment Date for the relevant amount, then interest accrues on any unpaid
amount at the Interest Rate from the Payment Date until that amount is paid in
full. The right of the Supplier to require payment of interest under this clause
is without prejudice to any other rights it may have against the Distributor at
law or in equity.

 

9.                                     SPECIFICATIONS

 

(a)                                Product delivered by the Supplier to the
Distributor must meet the specifications set out in the Talison Technical Grade
Product Specifications, as such specifications may be adjusted in accordance
with paragraph (b) (Specifications).

 

(b)                                If, as a consequence of changes in the ore
body at the Mining Operations, Product to be delivered by the Supplier to the
Distributor under this Agreement may not meet the specifications set out in the
Talison Technical Grade Product Specifications, the Parties agree to negotiate
in good faith with a view to agreeing amendments to such specifications. Such
negotiations are to be conducted in a timely manner in order to ensure that the
Parties can continue to perform their obligations under this Agreement

 

10.                              DISTRIBUTOR’S OBLIGATIONS

 

(a)                                The Distributor undertakes and agrees with
the Supplier at all times during the term of this Agreement:

 

(i)                                  to refrain from making active sales of the
Products to customers anywhere other than in the Territory. For these purposes,
making active sales shall be understood to mean actively approaching or
soliciting customers, including by way of the following actions:

 

(A)                              visits to customers;

 

(B)                              direct mail, including the sending of
unsolicited emails; and

 

(C)                              advertising;

 

14

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(ii)                               to refrain from establishing or maintaining
any branch, sale outlet or distribution depot other than in the Territory for
the sale of the Products;

 

(iii)                            to refrain from actively selling the Products
other than in the Territory;

 

(iv)                           if the Distributer so determines, to maintain on
its own account an inventory of the Products at levels which are appropriate and
adequate for the Distributor to meet all customer delivery for the Products
throughout the Territory;

 

(v)                              to arrange at its own expense for the
advertising and promotion proposed in that programme;

 

(vi)                           not to:

 

(A)                              represent itself as an agent of the Supplier
for any purpose;

 

(B)                              pledge the Supplier’s credit;

 

(C)                              give any condition or warranty or make any
representation on the Supplier’s behalf or commit the Supplier to any contracts;
or

 

(D)                              otherwise incur any liability for or on behalf
of the Supplier;

 

(vii)                        to inform the Supplier immediately of any Change of
Control of the Distributor, and of any change in its organisation or method of
doing business which might be expected to affect the performance of the
Distributor’s duties under this Agreement;

 

(viii)                     to keep full and proper books of account and records
showing clearly all enquiries, quotations, transactions and proceedings relating
to the Products; and

 

(ix)                           to indemnify and forever hold harmless the
Supplier on demand against each loss, liability and cost which the Supplier may
incur or sustain arising out of the breach of the Distributor’s obligations
under this Agreement.

 

(b)                                The Distributor is responsible for obtaining
any necessary import licences or permits necessary for the entry of the Products
into the Territory or their delivery to the Distributor and for any and all
customs duties, clearance charges, taxes, brokers’ fees or other amounts payable
in connection with that importation and delivery.

 

(c)                                 The expenses, costs and charges incurred by
the Distributor in the performance of its obligations under this Agreement shall
be paid by the Distributor, unless the Supplier has expressly agreed beforehand
in writing to pay those expenses, costs and charges.

 

(d)                                The Distributor is solely responsible for the
collection, remittance and payments of any or all taxes, charges, levies,
assessments and other fees of any

 

15

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kind imposed by governmental or other authority in respect of the purchase,
sale, importation, lease or other distribution of the Products.

 

11.                              SUPPLIER’S OBLIGATIONS

 

The Supplier undertakes and agrees with the Distributor at all times during the
term of this Agreement:

 

(a)                                to supply the Products only to the
Distributor for resale and not itself to supply the Products to customers;

 

(b)                                to direct customer approaches made to it for
the supply of Products into the Territory to the Distributor;

 

(c)                                 to provide such technical or product or
market or customer information that the Distributor requests; and

 

(d)                                support the Distributor for 6 months from the
Commencement Date to transition existing marketing and sales activities (such as
joint visits, training of personnel on product and logistics) to the
Distributor.

 

12.                              TEMPORARY CLOSURE — CARE AND MAINTENANCE

 

(a)                                If the Supplier, acting in good faith and on
reasonable grounds, determines that it is not economically feasible to operate
the Mining Operations, the Supplier may temporarily suspend operations and is
relieved of its obligations to sell and deliver Product under this Agreement
(Care and Maintenance Suspension) but only after providing the Distributor with
no less than 12 months prior written notice of its intention to suspend
operations for such period.

 

(b)                                If the Supplier proposes to recommence
production at the Mining Operations following a Care and Maintenance Suspension
then:

 

(i)                                  the Supplier must, as soon as practicable,
notify the Distributor in writing that it intends to recommence production at
the Mining Operations;

 

(ii)                               if the period of the Care and Maintenance
Suspension is greater than 3 months, the Distributor may, purchase Product from
other sources until the Care and Maintenance Suspension longer applies; and

 

(iii)                            unless the Distributor terminates this
Agreement, the Supplier is no longer relieved from its obligations to sell and
deliver Product under this Agreement.

 

13.                              TITLE AND RISK

 

13.1                       Risk

 

All risk of loss or destruction of the Product or damage to the Product in
connection with each Delivery of Product shall pass from the Supplier to the
Distributor at the

 

16

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moment the Product in that Delivery is fully loaded onto the carrying vessel at
the Loading Port.

 

13.2                       Title

 

Title to the Product in each Delivery shall pass from the Supplier to the
Distributor upon the Product in that Delivery being fully loaded onto the
carrying vessel at the Loading Port.

 

14.                              DISPUTE RESOLUTION

 

(a)                                If there is a dispute between the Parties
relating to the Agreement that is stated to be resolved by reference to an
Independent Expert (Dispute), senior representatives from each Party must first
meet promptly and use all reasonable endeavours acting in good faith to resolve
the Dispute by joint discussions.

 

(b)                                If the Parties are unable to resolve a
Dispute in accordance with paragraph (a), the Parties agree to resolve the
Dispute by referring the Dispute to an independent expert (Independent Expert).

 

(c)                                 The Independent Expert must be:

 

(i)                                  a person, agreed to by the Distributor and
the Supplier, who is of good repute with expertise and extensive experience in
the lithium Product industry which expertise and extensive experience must be
relevant to the matters to be decided (and that person must have no direct or
indirect personal interest in the outcome of the dispute); or

 

(ii)                               if the Distributor and the Supplier cannot
agree within 10 Business Days of either Party sending a notice to the other of a
Dispute, a person nominated by the Chairman of the Institute of Arbitrators &
Mediators Australia (Western Australian Chapter) or his or her nominee.

 

(d)                                Upon the appointment of an Independent
Expert, the Distributor and the Supplier must each submit to the Independent
Expert in writing their positions in relation to the Dispute setting out in
adequate detail the reasons why their position is appropriate.

 

(e)                                 The Independent Expert must then promptly
determine the Dispute and provide the Parties with a written determination with
reasons.

 

(f)                                  In making his or her determination, the
Independent Expert is entitled to:

 

(i)                                  seek the assistance of an accountant,
lawyer, barrister or other expert where the Dispute involves a matter or
question which the Independent Expert is not qualified to consider;

 

(ii)                               make inquiries and receive further
information from the Parties as he or she may require for the purposes of the
determination, provided that both Parties must be copied on any such inquiry;
and

 

17

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(iii)                           set a timeline and procedure to which the
Parties must adhere during the course of the Dispute process, including
confidentiality obligations, preparation of submissions and answers to
questions.

 

(g)                               The Parties agree to cooperate fully in the
expeditious conduct of the Independent Expert’s determination and provide the
Independent Expert with access to all facilities, books, records, documents,
information and personnel necessary to make a fully informed decision in an
expeditious manner.

 

(h)                               The Independent Expert shall have no ex parte
communications with any of the Parties concerning his or her determination.

 

(i)                                   A decision of the Independent Expert is
final and binding on the Distributor and the Supplier, except in the case of
manifest error.

 

(j)                                  Unless the Independent Expert, in his or
her absolute discretion, determines that the conduct of any Party is such that
it should bear all or a greater proportion, the costs and fees of the
Independent Expert will be shared equally by the Distributor and the Supplier.

 

15.                              FORCE MAJEURE

 

(a)                               If a Party is prevented in whole or in part
from carrying out its obligations under this Agreement (other than an obligation
to pay money) as a result of any strike, act of God, war, lockout, interference
of trade unions, act of government or government appointed agents, suspension of
labour, fire, earthquake, flood, storm, tempest, accident, interruption to power
or water supply, lack of freight facilities or delays on route, refusal of any
necessary import or export licence or any other cause (a “Force Majeure Event”)
beyond the reasonable control of the Party so prevented (the “Affected Party”),
then, subject to paragraph (b), and provided the Affected Party:

 

(i)                                  gives prompt written notice to the other
Party of the occurrence of the nature and expected duration of the Force Majeure
Event; and

 

(ii)                               has taken all proper precautions, due care
and reasonable alternative measures with the object of avoiding and mitigating
the effects of the Force Majeure Event and of carrying out its obligations,

 

the obligations of the Affected Party which cannot be performed (other than an
obligation to pay money) shall be suspended during the period in which the Force
Majeure Event continues, provided that should a shipment be suspended for more
than 1 month after the giving of the notice referred to in sub-paragraph
(a)(i) either the Distributor or the Supplier may at its option cancel the
shipment or delivery.

 

(b)                               The Affected Party agrees to use its
reasonable efforts to remedy any Force Majeure Event to the extent that it is
reasonably possible to do so, it being understood that it is not required under
paragraph (a) to settle any labour dispute against its will or to test the
validity or refrain from testing the validity of any law, order or regulation. 
Once any Force Majeure Event has been cured, the Supplier will recommence supply
to the Distributor and the Other

 

18

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Distributor in priority to any other customers and in proportion to their
relevant unfulfilled supply obligations.

 

(c)                                Subject to paragraph (d), where the Supplier
has declared a Force Majeure Event and such Force Majeure Event has prevented it
from Delivering Product under this Agreement, it shall be entitled to deduct the
amount of Product which it was prevented from Delivering from the quantity to
which its obligation under clause 4.2 of this Agreement applies.

 

(d)                               If the Force Majeure Event has prevented
Delivery of Product but not prevented ore being mined from the Mining
Operations, the Supplier shall not be entitled to deduct amount of Product as
contemplated by paragraph (c).

 

(e)                                If the Distributor is the Affected Party and
the Force Majeure Event prevents it from taking Delivery at the Loading Port,
the Supplier will be entitled to sell Product in the Territory upon whatever
terms the Supplier (acting reasonably) thinks fit, having regard to the relevant
Price.  Quantities of Product sold in accordance with this paragraph are deemed
to have been delivered to Distributor for the purpose of determining whether the
Supplier has fulfilled its obligations to deliver Product to the Distributor
under this Agreement.

 

(f)                                 If, despite reasonable efforts on the part
of the Affected Party to avoid or mitigate the effects of an Event of Force
Majeure, the circumstances described in paragraph (a) continue substantially
unabated for a period of 6 months from the date of the notice given under that
paragraph:

 

(i)                                  the Parties must negotiate in good faith to
find a resolution of the circumstances; and

 

(ii)                               if they are unable to agree upon a resolution
within 90 days after the expiry of the period of 6 months, either Party may
terminate this Agreement upon 30 days notice in writing without prejudice to any
other rights of the Parties accrued prior to the date of termination.

 

16.                              TERMINATION

 

(a)                               Either Party may terminate this Agreement
immediately by notice to the other Party if the other Party commits a material
breach of this Agreement, unless:

 

(i)                                  the breach is capable of remedy, in which
case a Party may terminate this Agreement immediately by notice to the other
Party if the other Party fails to remedy the breach within 30 days after being
required in writing to do so; or

 

(ii)                               the breach relates to payment in respect of
which there is a bona fide dispute outstanding between the Parties as to the
quantum of a payment to be made.

 

(b)                               Each party’s further rights and obligations
cease immediately on termination of this Agreement but termination does not
affect:

 

(i)                                  a party’s accrued rights and obligations at
the date of termination; and

 

19

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(ii)                               the continued existence and validity of the
rights and obligations of the parties under those clauses which are expressed to
survive termination and any provisions of this Agreement necessary for the
interpretation or enforcement of this Agreement.

 

(c)                                On termination of this Agreement, the
Supplier may elect (by written notice to the Distributor) to repurchase the
stocks of Products as the Distributor may have at the time in store or under its
control.  If the Supplier does not make such an election, the Distributor is
permitted to sell and distribute those stocks of the Products as it may at the
time have in store or under its control to third parties.

 

(d)                               The termination of this Agreement does not of
itself give rise to any liability on the part of the Supplier to pay any
compensation to the Distributor, including but not limited to, for loss of
profits or goodwill.

 

(e)                                The Supplier is entitled to cancel all orders
placed by the Distributor prior to the date of termination which have been
accepted by the Supplier without any liability of whatsoever nature to the
Supplier.

 

17.                              LIMIT OF LIABILITY

 

(a)                               Despite any other provision in this Agreement
and to the maximum extent permitted by law, neither Party will have any
liability to the other for any Consequential Loss howsoever arising (including
as a result of negligence or breach of any statutory duty).

 

(b)                               Subject to paragraph (a), the Parties are
entitled to all remedies available to them (including damages) for breach of any
term of this Agreement.

 

18.                              GOODS AND SERVICES TAX

 

18.1                       Interpretation

 

Words or expressions used in this clause which are defined in the A New Tax
System (Goods and Services Tax) Act 1999 (Cth) or in the A New Tax System (Goods
and Services Tax) Regulations 1999 (Cth) have the same meaning in this clause.

 

18.2                       Consideration is GST Exclusive

 

Any consideration to be paid or provided to a Party for a supply made by that
Party under or in connection with this Agreement is stated exclusive of GST.

 

18.3                       Gross Up of Consideration

 

Despite any other provision in this Agreement, if a Party (Supplying Party)
makes a taxable supply under or in connection with this Agreement on which GST
is imposed:

 

(a)                               the consideration payable or to be provided
for that supply under this Agreement but for the application of this clause (GST
exclusive consideration) is increased by, and the recipient of the supply
(Receiving Party) must also pay to the Supplying Party, an amount equal to the
GST

 

20

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exclusive consideration multiplied by the rate of GST applicable to the supply;
and

 

(b)                               subject to the Supplying Party giving the
Receiving Party a Tax Invoice in relation to that supply, the amount by which
the GST exclusive consideration is increased must be paid to the Supplying Party
by the Receiving Party without set off, deduction or requirement for demand, on
or before the Payment Date shown on the tax invoice.

 

18.4                       Reimbursements (Net Down)

 

If a payment to a Party under this Agreement is a reimbursement or
indemnification, calculated by reference to a loss, cost or expense incurred by
that Party, then the payment will be reduced by the amount of any input tax
credit to which that Party is entitled for that loss, cost or expense.

 

18.5                       Requirements for Tax Invoices

 

Where the Supplier is required to provide a Tax Invoice to the Distributor, the
Tax Invoice must comply with the requirements of the GST Law (as a Tax Invoice)
and must, unless inconsistent with the GST Law, specify:

 

(a)                               the Supplier’s Australian Business Number;

 

(b)                               the Price due to the Supplier and the basis of
its calculation;

 

(c)                                the amount of any GST paid or payable by the
Supplier with respect to the Price;

 

(d)                               the date of Delivery of the Product to which
the Tax Invoice relates;

 

(e)                                a description (including quantity) of the
Product delivered;

 

(f)                                 if a discount is applicable, the discounted
Price; and

 

(g)                                the Supplier’s address for payment.

 

19.                              VIENNA CONVENTION

 

The Parties exclude any application of the United Nations Convention on
Contracts for the International Sale of Goods adopted at Vienna, Australia on 11
April 1980, as given effect by the Sale of Goods (Vienna Convention) Act 1986
(WA) or any accession to or adoption of that convention at any time hereafter by
the country in which the place of business of the Distributor is situated, to
the sale and purchase of Product under this Agreement.

 

20.                              FAIRNESS

 

If there are changes in circumstances which the parties could not foresee at the
time of entering into this Agreement, the Party concerned must contact the other
Party and they will in good faith use their best endeavours to find an agreeable
solution.

 

21

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However, failure to find an agreeable solution will not result in a termination
of this Agreement or relieve a Party from its obligations under this Agreement.

 

21.                              OBLIGATIONS OF SUPPLIER

 

(a)                               The Supplier must not transfer legal ownership
of the Mining Operations (directly or indirectly) to another party unless that
party assumes all the rights and obligations under this Agreement by means of a
deed of novation or similar instrument on terms reasonably acceptable to the
Distributor.

 

(b)                               The Supplier shall use all reasonable
endeavours to conduct its operations in relation to its Mining Operations in a
good, workmanlike and commercially reasonable manner, in accordance with
suitable engineering, mining and processing methods and practices with a view
to:

 

(i)                                 maximising its profitability;

 

(ii)                              ensuring that the Distributor receives its
Offtake Percentage in each Supply Period; and

 

(iii)                           continuing to develop the Mining Operations in a
prudent commercial manner to maximise the value from the ore body taking into
account the Distributor’s long term view of the lithium market and taking into
account the current reserves statement,

 

and the Supplier acknowledges that, if it undertakes further mining developments
or operations in the vicinity of the Mining Operations, any Product produced
from ore recovered as a result of such further mining developments or operations
will be subject to the terms of this Agreement.

 

22.                              CONFIDENTIALITY

 

22.1                       Confidentiality Restrictions

 

Subject to clause 22.2, a Party must not disclose, or use for a purpose other
than contemplated by this agreement, any Confidential Information.

 

22.2                       Permitted Disclosure

 

(a)                               A Party may disclose any Confidential
Information:

 

(i)                                  on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 22, to its
officers, employees, professional advisors, related bodies corporate, or the
officers, employees or professional advisors of its related bodies corporate;

 

(ii)                               in enforcing this Agreement or in a judicial
or arbitral proceeding arising out of or in connection with this agreement;

 

(iii)                            to the extent required by law or the rules of
any securities exchange on which any securities of the Party or a related body
corporate of the Party are quoted;

 

22

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(iv)                           to the extent required or permitted by this
Agreement; or

 

(v)                              with the prior consent of the Party which
originally supplied that Confidential Information (the disclosing Party) in
connection with this agreement.

 

(b)                               A Party may disclose Confidential Information:

 

(i)                                  to the extent necessary in connection with
a capital raising by the Party or a related body corporate of the Party;

 

(ii)                               on a need to know basis and under
corresponding obligations of confidence as imposed by this clause 22, to:

 

(A)                              a bona fide proposed or prospective purchaser
of any shares from the Party;

 

(B)                              a bona fide current, proposed or prospective
financier of the Party or a related body corporate of the Party; or

 

(C)                              officers, employees or professional advisors of
such purchaser or financier.

 

22.3                       Prior Advice and Related Obligations

 

In the case of any disclosure of Confidential Information pursuant to
clause 22.2(a)(iii), the Party must:

 

(a)                               notify the disclosing Party before or, if this
is not practical, as soon as the disclosure is made; and

 

(b)                               use reasonable endeavours to (and assist the
disclosing Party at the disclosing Party’s expense to) restrict distribution of
the Confidential Information and otherwise take all reasonable steps to preserve
its confidentiality.

 

22.4                       Damages Not an Adequate Remedy

 

Each Party acknowledges that:

 

(a)                               damages will not be an adequate remedy for any
breach of this clause 22; and

 

(b)                               specific performance and injunctive relief are
appropriate remedies for any threatened or actual breach (without the need to
give an undertaking as to damages), in addition to any other remedies available
at law or in equity under or independently of this agreement.

 

22.5                       Survival of Obligation

 

This clause 22 survives and continues to bind the parties for two years
following termination of this agreement.

 

23

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23.                              GOVERNING LAW

 

This Agreement shall be governed by the law in force in Western Australia and
each Party submits to the exclusive jurisdiction of the courts of Western
Australia in relation to the Agreement.

 

24.                              NOTICES

 

Any notice, demand, consent or other communication (a Notice) given or made
under this Agreement:

 

(a)                               must be in writing in English and signed by
the sender or a person duly authorised by the sender (or in the case of email,
set out the full name and position or title of the sender or person duly
authorised by the sender);

 

(b)                               must be delivered to the intended recipient by
prepaid post (if posted to an address in another country, by registered airmail)
or by hand, fax or email to the address, fax number or email address set out on
page 1 or the address, fax number or email address last notified by the intended
recipient to the sender;

 

(c)                                will be conclusively taken to be duly given
or made:

 

(i)                                  in the case of delivery in person, when
delivered;

 

(ii)                               in the case of delivery by post, two business
days after the date of posting (if posted to an address in the same country) or
seven business days after the date of posting (if posted to an address in
another country);

 

(iii)                            in the case of fax, on receipt by the sender of
a transmission control report from the despatching machine showing the relevant
number of pages and the correct destination fax number or name of recipient and
indicating that the transmission has been made without error; and

 

(iv)                           in the case of email, the earlier of:

 

(A)                            the time that the sender receives an automated
message from the intended recipient’s information system confirming delivery of
the email; and

 

(B)                              the time that the intended recipient, or an
employee or officer of the intended recipient acknowledges receipt,

 

but if the result is that a Notice would be taken to be given or made on a day
that is not a business day in the place specified by the intended recipient as
its postal address under paragraph (b), it will be conclusively taken to have
been duly given or made at the start of business on the next business day in
that place.

 

24

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25.                              MISCELLANEOUS

 

25.1                       Assignment

 

(a)                               Subject to paragraphs (b) and (c), neither
Party may assign this Agreement nor their rights and obligations hereunder
without the prior written consent of the other Party, which must not be
unreasonably withheld.

 

(b)                               The Distributor may nominate a related body
corporate as the entity that is to purchase Product under this Agreement,
provided that the Distributor will remain responsible for the performance of its
obligations under this Agreement.

 

(c)                                Subject to the applicable related body
corporate obtaining any necessary board or shareholder approvals and satisfying
any other requirements under any applicable law, the Distributor will be
entitled to assign this Agreement to that related body corporate without the
consent of the Supplier.

 

25.2                       Variation

 

Variation of any term of this Agreement must be in writing and signed by the
Parties.

 

25.3                       Waiver

 

(a)                               An election not to exercise of any right,
power, authority discretion or remedy arising upon default under this Agreement
must be in writing and signed by the Party making the election.

 

(b)                               A failure or delay in exercise, or partial
exercise, of a right, power, authority, discretion or remedy created or arising
upon default under this Agreement, does not result in a waiver of that right.

 

(c)                                A Party is not entitled to rely on a delay in
the exercise or non-exercise of a right, power, authority, discretion or remedy
arising from a breach of this Agreement or on a default under this Agreement as
constituting a waiver of that right, power, authority, discretion or remedy.

 

(d)                               A Party may not rely on any conduct of another
Party as a defence to exercise of a right, power, authority, discretion or
remedy by that other Party.

 

25.4                       Costs

 

Each Party must pay its own costs and expenses of negotiating, preparing,
executing and performing its obligations under this Agreement.

 

25.5                       Further Assurance

 

Each Party must do all things and execute all further documents necessary to
give full effect to the transactions contemplated by this Agreement.

 

25

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25.6                       Severance

 

If any provision of this Agreement is invalid and not enforceable in accordance
with its terms, all other provisions which are self-sustaining and capable of
separate enforcement without regard to the invalid provision, shall be and
continue to be valid and forceful in accordance with their terms.

 

25.7                       Entire Agreement

 

This Agreement constitutes the entire agreement of the parties about its subject
matter and supersedes all previous agreements, understandings and negotiations
on that subject matter.

 

25.8                       Counterparts

 

This Agreement may be executed in counterparts.  All executed counterparts
constitute one document.

 

EXECUTED as an agreement.

 

26

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SIGNING PAGE

 

Dated:

 

 

 

 

 

 

 

 

 

EXECUTED by TALISON LITHIUM AUSTRALIA PTY LTD in accordance with section
127(1) of the Corporations Act 2001 (Cth) by authority of its directors:

 

 

 

 

 

 

 

 

 

 

 

Signature of director

 

Signature of director/company secretary*

*delete whichever is not applicable

 

 

 

 

 

 

 

 

 

Name of director (block letters)

 

Name of director/company secretary*

(block letters)

*delete whichever is not applicable

 

 

Executed by TIANQI GROUP HK CO., LIMITED in the presence of:

 

 

 

 

 

 

 

 

 

 

 

Witness Signature

 

Director Signature

 

 

 

 

 

 

 

 

 

Print Name

 

Print Name

 

--------------------------------------------------------------------------------

 

Executed

 

 

 

 

 

 

 

Signed for Chengdu Tianqi Group, Co., Ltd. by its authorised representative in
the presence of:

 

/s/ JIANG WEIPING

 

 

Authorised Representative Signature

 

 

 

 

/s/ JIANG ANQI

 

Jiang Weiping

Witness Signature

 

Print Name

 

 

 

 

 

Jiang Anqi

 

Chairman

Print Name

 

Position

 

 

 

 

 

 

 

 

 

Executed by Tianqi Group HK Co., Limited in the presence of:

 

 

 

 

 

 

 

 

 

 

 

/s/ YU SONG

 

/s/ WU WEI

Witness Signature

 

Director Signature

 

 

 

 

 

Yu Song

 

Wu Wei

Print Name

 

Print Name

 

 

 

 

 

 

 

 

 

Signed for Sichuan Tianqi Lithium Industries, Inc. by its authorised
representative in the presence of:

 

/s/ WU WEI

 

 

Authorised Representative Signature

 

 

 

 

/s/ YU SONG

 

Wu Wei

Witness Signature

 

Print Name

 

 

 

 

 

Yu Song

 

General Manager

Print Name

 

Position

 

 

 

 

 

 

 

 

 

Executed by Tianqi UK Limited in the presence of:

 

 

 

 

 

 

 

 

 

 

/s/ YU SONG

 

/s/ WU WEI

Witness Signature

 

Director Signature

 

 

 

 

 

Yu Song

 

Wu Wei

Print Name

 

Print Name

 

 

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Signed for RT Lithium Limited by its authorised representative in the presence
of:

 

 

 

 

 

/s/ STEFFEN HABER

 

 

Authorised Representative Signature

 

 

 

 

/s/ MARCUS BRUNE

 

Dr. Steffen Haber

Witness Signature

 

Print Name

 

 

 

 

 

Dr. Marcus Brune

 

Director

Print Name

 

Position

 

 

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Executed in accordance with section 127 of the Corporations Act 2001 by
Windfield Holdings Pty Ltd:

 

 

 

 

 

 

 

 

 

 

 

/s/ PETER OLIVER

 

/s/ ROBERT VAN ERP

Director Signature

 

Director/Secretary Signature

 

 

 

 

Peter Oliver

 

Robert Van Erp

Print Name

 

Print Name

 

 

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