Exhibit 10.1

 

EXECUTION VERSION

 

Scheme Implementation Agreement

 

Talison Lithium Limited

Talison

 

Rockwood Holdings, Inc.

Bidder

 

Clayton Utz

Lawyers

Level 27, QV1 Building 250 St Georges Terrace Perth WA 6000 Australia

GPO Box P1214 Perth WA 6844

T +61 8 9426 8000 F +61 8 9481 3095

 

www.claytonutz.com

 

Our reference 60067/17115/80123998

 

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Contents

 

1.

Definitions and interpretation

1

 

 

 

 

1.1

Definitions

1

 

1.2

Best and reasonable endeavours

11

 

1.3

Business Day

12

 

1.4

Knowledge of Talison

12

 

1.5

Interpretation

12

 

 

 

 

2.

Obligations in relation to Scheme and Option Scheme

13

 

 

 

 

2.1

Talison to propose Scheme and Option Scheme

13

 

2.2

Talison and Bidder to Implement Scheme and Option Scheme

13

 

 

 

 

3.

Conditions precedent

13

 

 

 

 

3.1

Conditions to Scheme

13

 

3.2

Conditions to Option Scheme

15

 

3.3

General obligations in relation to Conditions

15

 

3.4

Obligations in relation to Regulatory Conditions

16

 

3.5

Notice in relation to satisfaction of Conditions

17

 

3.6

Waiver of Conditions

17

 

3.7

Failure of Conditions

18

 

 

 

 

4.

Implementation of Scheme and Option Scheme

18

 

 

 

 

4.1

Talison’s obligations

18

 

4.2

Bidder’s obligations

22

 

4.3

Dispute as to Explanatory Memorandum

23

 

4.4

Reconstitution of Talison Board

24

 

4.5

Responsibility statement

24

 

 

 

 

5.

Scheme Consideration and Option Scheme Consideration

24

 

 

 

 

5.1

Bidder’s covenant in respect of the Scheme Consideration

24

 

5.2

Bidder’s covenant in respect of the Option Consideration

25

 

 

 

 

6.

Treatment of Talison Warrants, LTIP Shares and Special Voting Share

25

 

 

 

 

6.1

Warrant Commitments

25

 

6.2

Talison obligations in respect of Talison Warrants

25

 

6.3

LTIP Shares

26

 

6.4

Special Voting Share

26

 

 

 

 

7.

Conduct of business and co-operation

27

 

 

 

 

7.1

Conduct of Talison’s business

27

 

7.2

Requests for access

27

 

7.3

GAM Arrangements

28

 

7.4

Cooperation

28

 

 

 

 

8.

Recommendation, intentions and announcements

29

 

 

 

 

8.1

Talison Board Recommendation and Voting Intention

29

 

8.2

Confirmation

29

 

8.3

Announcement

29

 

 

 

 

9.

Exclusivity arrangements

30

 

 

 

 

9.1

No shop

30

 

9.2

No talk and no due diligence

30

 

9.3

Notice of Competing Proposal

30

 

9.4

Matching right

30

 

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9.5

Normal provision of information

31

 

 

 

 

10.

Talison Break Fee

31

 

 

 

 

10.1

Payment of costs

31

 

10.2

Talison Break Fee payable

32

 

10.3

Talison Break Fee not payable

32

 

10.4

Compliance with law

33

 

10.5

Other claims

33

 

 

 

 

11.

Bidder Break Fee

33

 

 

 

 

11.1

Payment of costs

33

 

11.2

Bidder Break Fee payable

34

 

11.3

Bidder Break Fee not payable

34

 

11.4

Compliance with law

34

 

11.5

Other claims

34

 

 

 

 

12.

Liability of directors and employees

34

 

 

 

 

12.1

Liability of directors and employees

34

 

12.2

Directors’ and officers’ insurance

34

 

12.3

Obligations in relation to directors’ and officers’ insurance

35

 

 

 

 

13.

Representations, warranties and indemnities

35

 

 

 

 

13.1

Representations and warranties by Bidder

35

 

13.2

Qualification of Bidder Warranties

37

 

13.3

Bidder indemnity

37

 

13.4

Representations and warranties by Talison

37

 

13.5

Qualification of Talison Warranties

39

 

13.6

Talison indemnity

40

 

13.7

Notifications

40

 

13.8

Status of representations and warranties

40

 

13.9

Status and enforcement of indemnities

40

 

13.10

Acknowledgements

40

 

 

 

 

14.

Confidentiality and communications

41

 

 

 

 

14.1

Confidentiality Deed

41

 

14.2

Survival of obligations

41

 

14.3

Disclosure on termination of agreement

41

 

14.4

Required disclosure

41

 

 

 

 

15.

Termination

41

 

 

 

 

15.1

Limited termination events

41

 

15.2

Termination by Bidder

41

 

15.3

Termination by Talison

42

 

15.4

Effect of termination

42

 

15.5

Remedies

43

 

 

 

 

16.

Notices

43

 

 

 

 

16.1

How notice to be given

43

 

16.2

When notice taken to be received

44

 

 

 

 

17.

GST

44

 

 

 

 

17.1

Interpretation

44

 

17.2

Reimbursements and similar payments

45

 

17.3

GST payable

45

 

 

 

 

18.

Entire agreement

45

 

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19.

General

45

 

 

 

 

19.1

No representation or reliance

45

 

19.2

Amendments

46

 

19.3

Assignment

46

 

19.4

Consents

46

 

19.5

Costs

46

 

19.6

Counterparts

46

 

19.7

Further acts and documents

46

 

19.8

No merger

46

 

19.9

Severance

46

 

19.10

Waivers

46

 

 

 

 

20.

Governing law, jurisdiction and service of process

47

 

 

 

 

20.1

Governing law

47

 

20.2

Jurisdiction

47

 

 

 

 

Schedule 1 Timetable

48

 

 

Schedule 2 Talison Options

49

 

 

Annexure A Scheme

 

 

 

Annexure B Deed Poll

 

 

 

Annexure C Option Scheme

 

 

 

Annexure D Option Scheme Deed Poll

 

 

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Scheme implementation agreement dated 23 August 2012

 

Parties                                                                                        
Talison Lithium Limited ACN 140 122 078 of Level 4, 37 St Georges Terrace,
Perth, Western Australia (Talison)

 

Rockwood Holdings, Inc. of 100 Overlook Center, Princeton, New Jersey, 08540,
United States of America (Bidder)

 

Background

 

A.                                                    Bidder proposes that one
or more wholly owned, related or other entities or bodies (Bidder Subsidiary)
will acquire all of the Talison Shares and all of the Talison Options pursuant
to schemes of arrangement under section 411 of the Corporations Act between
Talison and the holders of Talison Shares and Talison Options respectively.

 

B.                                                    Talison has agreed to
propose the Scheme and the Option Scheme and issue the Explanatory Memorandum at
the request of Bidder, and Talison and Bidder have agreed to implement the
Scheme and the Option Scheme on the terms and conditions of this agreement.

 

Operative provisions

 

1.                                                      Definitions and
interpretation

 

1.1                                               Definitions

 

In this agreement:

 

Aggregate Scheme Consideration means the aggregate amount of the Scheme
Consideration payable to Scheme Shareholders under the Scheme.

 

Aggregate Option Scheme Consideration means the aggregate amount of the Option
Scheme Consideration payable to Scheme Optionholders under the Option Scheme.

 

AIFRS means International Financial Reporting Standards as adopted in Australia,
as at the date of this agreement.

 

Announcement has the meaning given to that term in clause 8.3(a).

 

ASIC means the Australian Securities and Investments Commission.

 

Associate has the meaning given in section 12 of the Corporations Act.

 

Bidder Board means the board of directors of Bidder.

 

Bidder Break Fee means C$7 million.

 

Bidder Information means all information regarding Bidder and its Related Bodies
Corporate and the Scheme Consideration and Option Scheme Consideration that is
required by the Corporations Act, the Regulatory Guides and Canadian Securities
Law to be included in the Explanatory Memorandum including all the information
that would be required under sections 636(1)(c), (f), (h), (i), (k), (l) and
(m) of the Corporations Act to be included in a bidder’s statement if Bidder
Subsidiary were offering the Scheme Consideration and Option Scheme
Consideration as consideration under takeover bids, and any other information
that the parties agree is Bidder Information for the purposes of this agreement,
but does not include the Talison Information or the Independent Expert’s Report.

 

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Bidder Indemnified Parties means Bidder and its Related Bodies Corporate and
their respective directors, officers and employees.

 

Bidder Subsidiary has the meaning given in Recital A.

 

Bidder Warranties means the warranties made by Bidder in clause 13.1.

 

Budget means the “2013 Budget and Five Year Business Plan” which was formally
adopted by the Talison Board on 6 June 2012.

 

Business Day means a day that is not a Saturday, Sunday or public holiday and on
which banks are open for business generally in Perth, Western Australia and
Princeton, New Jersey.

 

Canadian Securities Laws means all applicable Canadian provincial and
territorial securities laws and the rules and regulations thereunder, together
with all applicable published instruments, notices and orders of the securities
regulatory authorities and the rules and policies of the TSX.

 

Circuit MOU means the memorandum of understanding between GAM and Talison dated
28 June 2012 relating to the installation of a tantalum circuit in Talison’s
lithium concentrate production facility at Greenbushes.

 

Competing Proposal means a proposed transaction or arrangement (whether by way
of takeover, share acquisition, scheme of arrangement, capital reconstruction,
acquisition of assets or otherwise) under which a person other than Bidder or
any of its Related Bodies Corporate would, if the proposed transaction or
arrangement is entered into or completed substantially in accordance with its
terms:

 

(a)                                                  acquire, whether alone or
together with its Associates, an interest or a Relevant Interest in 20% or more
of Talison Shares;

 

(b)                                                  directly or indirectly
acquire, have a right to acquire or otherwise acquire an economic interest in
all, or a substantial part, of the business, assets or undertaking of the
Talison Group;

 

(c)                                                   acquire Control of
Talison; or

 

(d)                                                  merge with Talison
(including reverse takeover bid, reverse scheme of arrangement or dual listed
company or similar structure).

 

Condition means a condition to the Scheme specified in clause 3.1 and/or a
condition to the Option Scheme specified in clause 3.2, as the case may be.

 

Confidentiality Deed means the Confidentiality Deed between Bidder and Talison
dated 25 June 2012.

 

Control has the meaning given in the Corporations Act.

 

Corporations Act means the Corporations Act 2001 (Cth).

 

Corporations Regulations means Corporations Regulations 2001 (Cth).

 

Court means the Federal Court of Australia or such other court of competent
jurisdiction as Talison and Bidder agree in writing.

 

Deed Poll means a deed poll to be executed by Bidder and Bidder Subsidiary in
favour of the Scheme Shareholders, substantially in the form set out in Annexure
B or in such other form as Talison and Bidder agree in writing.

 

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Due Diligence Material means the information disclosed by or on behalf of
Talison and its Subsidiaries, including:

 

(a)

in management presentations and interviews and management discussions with
directors, employees and advisors of Bidder;

 

 

(b)

in responses to requests for information; and

 

 

(c)

in written correspondence between Talison’s advisers, directors and employees
and Bidder’s advisers, directors and employees,

 

to Bidder and its Representatives on or prior to the date of this agreement.

 

EBITDA means consolidated earnings of the Talison Group before interest, tax,
depreciation and amortisation calculated on the basis of AIFRS.

 

Effective means, when used in relation to the Scheme or the Option Scheme, the
coming into effect, pursuant to section 411(10) of the Corporations Act, of the
order of the Court made under section 411(4)(b) of the Corporations Act in
relation to the Scheme or the Option Scheme respectively.

 

Effective Date means the date on which the Scheme (or the Option Scheme, as the
context requires) becomes Effective.

 

Encumbrance means a mortgage, charge, pledge, lien, encumbrance, security
interest, title retention, preferential right, trust arrangement, contractual
right of set-off, or any other security agreement or arrangement in favour of
any person, whether registered or unregistered, including any Security Interest.

 

End Date means 31 January 2013 or such other date agreed in writing between
Talison and Bidder.

 

Exclusivity Period means the period commencing on the date of this agreement and
ending on the earliest of:

 

(a)

the End Date;

 

 

(b)

the date this agreement is terminated in accordance with its terms; and

 

 

(c)

the Implementation Date.

 

Explanatory Memorandum means the explanatory memorandum to be prepared by
Talison pursuant to section 412 of the Corporations Act in respect of the Scheme
and the Option Scheme, including and comprising a management information
circular to be prepared in accordance with applicable Canadian Securities Laws,
in accordance with the terms of this agreement and to be dispatched to the
Talison Shareholders and Talison Optionholders.

 

First Court Date means the first day of the hearing of an application made to
the Court for an order pursuant to section 411(1) of the Corporations Act
convening the Scheme Meeting and the Option Scheme Meeting or, if the hearing of
such application is adjourned for any reason, means the first day of the
adjourned hearing.

 

GAM means Global Advanced Metals Pty Ltd ACN 139 987 465.

 

Implementation Date means the date which is 3 Business Days after the Record
Date or such other date as Talison and Bidder agree in writing.

 

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Independent Expert means the independent expert to be engaged by Talison to
express an opinion on whether the Scheme and the Option Scheme is in the best
interests of the Talison Shareholders and Talison Optionholders respectively.

 

Independent Expert’s Report means the report from the Independent Expert in
respect of the Scheme and the Option Scheme.

 

Insolvency Event means in relation to an entity:

 

(a)

the entity resolving that it be wound up or the making of an application or
order for the winding up or dissolution of the entity, other than where the
application or order (as the case may be) is set aside within 14 days;

 

 

(b)

a liquidator or provisional liquidator of the entity being appointed;

 

 

(c)

a court making an order for the winding up of the entity;

 

 

(d)

an administrator of the entity being appointed;

 

 

(e)

the entity ceasing, or threatening to cease to, carry on the business that it
conducts as at the date of this agreement;

 

 

(f)

the entity being or becoming unable to pay its debts when they fall due;

 

 

(g)

the entity executing a deed of company arrangement; or

 

 

(h)

a receiver, or a receiver and manager, being appointed in relation to the
entity, or a substantial part, of the property of the entity.

 

Law includes any constitution or provision, treaty, decree, convention, statute,
Act, regulation, rule, ordinance, proclamation, subordinate legislation,
delegated legislation, by-law, judgment, rule of common law or equity, rule,
ruling or guideline by a competent entity exercising jurisdiction in the
relevant matter (including any government, Regulatory Authority or
self-regulatory authority, including the TSX), including a rule, ruling or
guideline of any Regulatory Authority.

 

LTIP Shares has the meaning given in clause 13.4(g)(i).

 

LTIP Trust means the Talison Long Term Incentive Plan Trust established under
the Trust Deed.

 

Material Adverse Change means any event, change, matter, thing or condition
which individually or when aggregated with other such events, changes, matters,
things or conditions has had, or is reasonably likely to have, the effect of a
diminution in:

 

(a)

the consolidated net assets of the Talison Group by A$20 million or more, or

 

 

(b)

EBITDA by A$10m or more for the 12 month period commencing on the date after the
date on which the event, change, matter, thing or condition occurs provided that
the event, change, matter, thing or condition is likely to persist and is
incapable of being (or reasonably unlikely to be) rectified or off-set over a
reasonable period of time,

 

 

other than:

 

 

(c)

an event, occurrence or matter required to be done or procured by Talison
pursuant to this agreement or the Scheme or Option Scheme;

 

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(d)

an event, occurrence or matter to the extent that it was fairly disclosed in the
Due Diligence Material or in documents that were publicly available prior to the
date of this agreement from public filings of Talison with SEDAR;

 

 

(e)

any change to legislation or regulation, any judicial or administrative
interpretation of the law or any practice or policy of a Regulatory Authority
(whether or not retrospective in effect), including in relation to Tax;

 

 

(f)

any change or disruption to the existing financial markets or economic
conditions of Australia, the European Union, the United States of America, Hong
Kong, Canada or China;

 

 

(g)

an event, occurrence or matter which affects the lithium market generally;

 

 

(h)

any change to currency exchange or commodity market conditions;

 

 

(i)

any outbreak or escalation of hostilities or armed conflict; or

 

 

(j)

an event, change, matter, thing or condition that is reasonably likely to have
resulted from, been caused by or occurred in response to, the Transaction or its
announcement.

 

Option Scheme means the creditors’ scheme of arrangement under Part 5.1 of the
Corporations Act between Talison and the Scheme Optionholders, substantially in
the form set out in Annexure C or in such other form as Talison and Bidder agree
in writing, pursuant to which all Scheme Options will be transferred to Bidder
on the Implementation Date.

 

Option Scheme Consideration means the consideration to be provided to Scheme
Optionholders under the terms of the Option Scheme, being for each Scheme Option
C$6.50 less the exercise price for that Scheme Option.

 

Option Scheme Deed Poll means a deed poll to be executed by Bidder and Bidder
Subsidiary in favour of Scheme Optionholders, substantially in the form set out
in Annexure D or in such other form as Talison and Bidder agree in writing.

 

Option Scheme Meeting means the meeting or meetings to be convened by the Court
in relation to the Option Scheme pursuant to section 411(1) of the Corporations
Act.

 

Policy means the directors and officers insurance policy in place for Talison at
the date of this agreement.

 

Prescribed Occurrence means the occurrence of, or agreement to do, any of the
following events:

 

(a)

Talison converts all or any of its securities into a larger or smaller number of
securities;

 

 

(b)

Talison or another member of the Talison Group (other than a wholly-owned
Subsidiary of Talison) resolves to reduce its capital in any way or resolves to
re-classify, combine, split, redeem or re-purchase directly or indirectly any of
its shares;

 

 

(c)

Talison or another member of the Talison Group (other than a wholly-owned
Subsidiary of Talison):

 

 

 

(i)

enters into a buy-back agreement; or

 

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(ii)

resolves to approve the terms of a buy-back agreement under the Corporations
Act;

 

 

(d)

any member of the Talison Group issues shares, or grants an option over its
shares or agrees to make such an issue or grant such an option (other than upon
exercise of a Talison Option granted before the date of this agreement);

 

 

(e)

any member of the Talison Group issues, or agrees to issue, convertible notes or
any other security convertible into shares or debt securities;

 

 

(f)

any member of the Talison Group agrees to pay, declares or pays a dividend or
any other form of distribution of profits or return of capital to its members,
other than to Talison or a wholly-owned Subsidiary of Talison;

 

 

(g)

any member of the Talison Group disposes of the whole, or a substantial part, of
its business or property;

 

 

(h)

any member of the Talison Group creates any Encumbrance over, or declares itself
the trustee of, the whole, or a substantial part, of its business or property;

 

 

(i)

an Insolvency Event occurs in relation to a member of the Talison Group;

 

 

(j)

any member of the Talison Group acquires or disposes of or leases, or agrees to
acquire or dispose of or lease, any assets, business or shares other than as
contemplated in the Budget that would require the approval of, or would
customarily be referred to, the Talison Board under existing delegations and
practices or in excess of A$1,000,000 in value for any individual item or
A$2,000,000 in aggregate value;

 

 

(k)

the commitment by any member of the Talison Group to capital expenditure not
provided for in the Budget in excess of A$500,000, in aggregate;

 

 

(l)

the constitution of Talison or any other member of the Talison Group is amended
or replaced or any member of the Talison Group states its intention to or makes
any change to its constitution;

 

 

(m)

any member of the Talison Group settles any legal proceedings, claim,
investigation, arbitration or other like proceeding where the amount claimed by
or against a member of the Talison Group exceeds A$1,000,000;

 

 

(n)

any member of the Talison Group enters, or proposes to enter, into or amends, or
proposes to amend, in any material respect any joint venture or partnership
agreement with any person other than a member of the Talison Group involving or
reasonably likely to involve expenditure or other commitment on the part of the
Talison Group in excess of A$750,000;

 

 

(o)

any member of the Talison Group incurs any indebtedness or issues any debt
securities, where doing so would result in the value of the indebtedness
incurred or debt issued by members of the Talison Group following the date of
this agreement exceeding A$1,500,000 in aggregate, other than:

 

 

 

 

(i)

any draw down within existing limits of any existing debt facility in the
ordinary course of business;

 

 

 

 

(ii)

trade credit in the ordinary course of business; or

 

 

 

 

(iii)

indebtedness to a member of the Talison Group;

 

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(p)

any member of the Talison Group enters into, terminates, extends, renews or
varies any commitment (including any non-contractual commitment or undertaking
but excluding any sales contract) which has a value or involves a liability,
expenditure or revenue, as the case may be, of A$1,000,000 or more when
aggregated with related transactions;

 

 

(q)

any member of the Talison Group exercises a contractual right or other option
which has a value or involves a liability or expenditure, as the case may be, of
A$1,000,000 or more when aggregated with related transactions;

 

 

(r)

any member of the Talison Group enters into any long term commitment (including
any non-contractual commitment or undertaking) with any customers which (i) has
a duration of more than 12 months, or (ii) is inconsistent in a material respect
with typical arrangements;

 

 

(s)

any member of the Talison Group enters into any commitment (including any
non-contractual commitment or undertaking) with any customer which has a volume
rebate or similar arrangement with a value or aggregate value of A$200,000 or
more;

 

 

(t)

any member of the Talison Group enters into a new employment contract or
increases the remuneration of, or otherwise varies the existing employment
arrangements with, any of its directors or executives or any other employees
which employee’s total annual employment cost is in excess of A$250,000;

 

 

(u)

any member of the Talison Group pays or agrees to pay any bonus to any of its
directors or executives or any other employees where such payment, if made,
would result in the aggregate value of the bonuses paid or agreed to be paid by
members of the Talison Group following execution of this agreement being in
excess of A$200,000 (provided that any bonus already accrued as at the date of
this agreement or which is provided for in the Budget shall be excluded for the
purposes of this paragraph);

 

 

(v)

any member of the Talison Group accelerates the rights of any of its directors
or executives or any employee to benefits of any kind (other than under any
executive or employee share plans) or enters into a commitment to pay a director
or executive a termination payment (including a “golden parachute”);

 

 

(w)

any member of the Talison Group enters into any guarantee or indemnity on behalf
of any member of the Talison Group or provides security for the obligations of
any member of the Talison Group in relation to amounts greater than A$1,000,000;

 

 

(x)

any member of the Talison Group provides financial accommodation to any Talison
Director or any employee or officer of any member of the Talison Group;

 

 

(y)

any member of the Talison Group surrenders a mining tenement granted to or
applied for by a member of the Talison Group under the Mining Act 1978 (WA)
which is material in the context of the Talison Group (other than a surrender or
expiry that is required by law); or

 

 

(z)

any member of the Talison Group authorises, commits or agrees to do any of the
matters set out above,

 

 

other than an event:

 

 

(aa)

required to be undertaken or procured by the Talison Group pursuant to the
Transaction Documents;

 

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(bb)

to which Bidder has provided its prior written consent; or

 

 

(cc)

fairly disclosed in the Due Diligence Material or any public filings of Talison
with SEDAR regarding the Talison Group prior to the parties entering into this
agreement.

 

Recommendation has the meaning in clause 8.1(a)(i).

 

Record Date means:

 

(a)

if no date is set pursuant to clause 6.1(b), 5.00 pm (Perth time) on the date
which is 5 Business Days after the Effective Date;

 

 

(b)

if a time and date is set pursuant to clause 6.1(b), that time and date; or

 

 

(c)

in each case, such other time and date agreed in writing between Bidder and
Talison.

 

Regulator’s Draft has the meaning given in clause 4.1(g).

 

Regulatory Authority means:

 

(a)

any government or local authority, any department, minister or agency of any
government and any other governmental, administrative, fiscal, monetary or
judicial body; and

 

 

(b)

any other authority, agency, commission or similar entity having powers or
jurisdiction under any law or regulation or the listing rules of any recognised
stock or securities exchange,

 

in any part of the world.

 

Regulatory Condition means:

 

(a)

in relation to the Scheme, the conditions in clause 3.1(b) and 3.1(c); and

 

 

(b)

in relation to the Option Scheme, the condition in clause 3.2(a).

 

Regulatory Guides means all regulatory guides published by ASIC and in force at
the date of this agreement.

 

Regulatory Review Period means the period from the date on which Talison
provides the Regulator’s Draft to ASIC in accordance with clause 4.1(g) to the
date on which ASIC provides a letter indicating whether or not it proposes to
appear to make submissions, or will intervene to oppose the Scheme, when the
application made to the Court for orders under section 411(1) of the
Corporations Act convening the Scheme Meeting to consider the Scheme is heard.

 

Related Body Corporate of a corporation means a related body corporate of that
corporation within the meaning of section 50 of the Corporations Act, and in
relation to Bidder includes Bidder Subsidiary.

 

Relevant Interest has the meaning given in the Corporations Act.

 

Representatives means, in relation to a party, all officers, employees,
professional advisers, Related Bodies Corporate and agents of the party or of
its Related Bodies Corporate.

 

Rival Bidder has the meaning given to that term in clause 9.3.

 

8

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Scheme means a scheme of arrangement under Part 5.1 of the Corporations Act
between Talison and the Scheme Shareholders substantially in the form set out in
Annexure A or in such other form as Talison and Bidder agree in writing.

 

Scheme Consideration means, for each Scheme Share held by a Scheme Shareholder,
C$6.50.

 

Scheme Meeting means the meeting of Talison Shareholders to be convened by the
Court in relation to the Scheme pursuant to section 411(1) of the Corporations
Act.

 

Scheme Option means each Talison Option on issue as at the Record Date.

 

Scheme Optionholder means each person who is registered as the holder of Scheme
Options as at the Record Date.

 

Scheme Share means a Talison Share on issue as at the Record Date.

 

Scheme Shareholder means a person who is registered as the holder of Scheme
Shares as at the Record Date.

 

Second Court Date means the first day of hearing of an application made to the
Court for an order pursuant to section 411(4)(b) of the Corporations Act
approving the Scheme and the Option Scheme or, if the hearing of such
application is adjourned for any reason, means the first day of the adjourned
hearing.

 

Security Interest has the meaning given in section 12 of the Personal Property
Securities Act 2009 (Cth).

 

SEDAR means the System for Electronic Document Analysis and Retrieval described
in National Instrument 13-101 - System for Electronic Document Analysis and
Retrieval (SEDAR) of the Canadian Securities Administrators available to the
public for viewing at www.sedar.com.

 

Shared Services Term Sheet means the shared services agreement (including
binding term sheets) dated 13 November 2009 between GAM and Talison relating to
the provision of services by Talison to GAM.

 

Special Voting Share means the special voting share in the capital of Talison,
issued in connection with the issue of exchangeable shares as part of the merger
between Talison Lithium Limited and Salares Lithium Inc pursuant to an
arrangement agreement dated 12 August 2010.

 

Subleases means the subleases over certain areas of the Greenbushes operation
between Talison Lithium Australia Pty Ltd, as sub-lessor, and Global Advanced
Metals Greenbushes Pty Ltd, as sub-lessee.

 

Subsidiary means a subsidiary within the meaning given to that term in the
Corporations Act.

 

Superior Proposal means a bona fide Competing Proposal which, in the
determination of the Talison Board acting in good faith and after receiving
advice from its external legal and external financial advisors, would, if it is
completed, be more favourable to Talison Shareholders (as a whole) than the
Transaction, taking into account all aspects of the Competing Proposal,
including:

 

(a)

the value of the consideration payable to Talison Shareholders under the
Competing Proposal and the Tax consequences related to payment of that
consideration (as compared to the consideration available under the
Transaction);

 

9

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(b)

the conditions of the Competing Proposal, the likelihood of those conditions
being satisfied and the level of certainty in respect of the funding required
for the Competing Proposal; and

 

 

(c)

the likely timing required to implement or complete the Competing Proposal.

 

Talison Board means the board of directors of Talison.

 

Talison Break Fee means C$7 million.

 

Talison Director means a director of Talison.

 

Talison Group means Talison and each of its Subsidiaries.

 

Talison Indemnified Parties means Talison and its Related Bodies Corporate and
their respective directors, officers and employees.

 

Talison Information means all information included in the Explanatory
Memorandum, other than the Bidder Information and the Independent Expert’s
Report.

 

Talison Option means an option to subscribe for a Talison Share.

 

Talison Optionholder means each person who is registered in the Talison Option
Register as the holder of a Talison Option.

 

Talison Option Register means the register of holders of Talison Options
maintained by or on behalf of Talison in accordance with section 168(1) of the
Corporations Act.

 

Talison Share Register means the register of members of Talison maintained by or
on behalf of Talison in accordance with section 168(1) of the Corporations Act.

 

Talison Share Registry means Computershare Investor Services Pty Limited ACN 078
279 277.

 

Talison Shareholder means a person who is registered in the Talison Share
Register as a holder of Talison Shares.

 

Talison Shares means fully paid ordinary shares in the capital of Talison.

 

Talison Warrantholder means each holder of Talison Warrants.

 

Talison Warrant means a warrant to subscribe for a Talison Share at an exercise
price of C$0.90 on the terms set out in certificates dated 22 September 2010.

 

Talison Warranties means the warranties made by Talison in clause 13.4.

 

Tax means any tax, levy, excise, duty, charge, surcharge, contribution,
withholding tax (including royalty withholding tax), impost or withholding
obligation of whatever nature, whether direct or indirect, (including any tax
payable under a country’s foreign source income attribution or anti-tax-deferral
rules) by whatever method collected or recovered, together with any fees,
penalties, fines, interest or statutory charges in any country or jurisdiction
but excluding any stamp duty payable on any transfer of the Talison Shares.

 

Third Party means a person other than Bidder, Talison, or their respective
Related Bodies Corporate.

 

Timetable means the indicative timetable in relation to the Scheme set out in
Schedule 1, or such other indicative timetable as Talison and Bidder agree in
writing.

 

10

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Transaction means the acquisition by Bidder Subsidiary of the Scheme Shares for
the Scheme Consideration pursuant to the Scheme and the acquisition by Bidder
Subsidiary of the Scheme Options for the Option Scheme Consideration pursuant to
the Option Scheme.

 

Transaction Documents means:

 

(a)

this agreement;

 

 

(b)

the Scheme;

 

 

(c)

the Deed Poll;

 

 

(d)

the Option Scheme; and

 

 

(e)

the Option Scheme Deed Poll.

 

Trust Account means a Canadian dollar denominated trust account operated by
Talison (or a depositary appointed by Talison) as trustee for the Scheme
Shareholders and Scheme Optionholders, as nominated by Talison and notified to
Bidder at least 5 Business Days prior to the Implementation Date, being the
account into which Bidder Subsidiary will deposit the Aggregate Scheme
Consideration in accordance with clauses 5.2(b) and 5.1(b).

 

Trust Deed means the trust deed in respect of the Talison Long Term Incentive
Plans between Talison and the Trustee dated 7 June 2011.

 

Trustee means Talison Services Pty Ltd ACN 125 608 684.

 

TSX means the Toronto Stock Exchange.

 

Voting Intention has the meaning in clause 8.1(a)(ii).

 

Warrant Commitment means an agreement between Bidder, Talison and a Talison
Warrantholder pursuant to which:

 

(a)

a Talison Warrantholder commits to exercise all of their Talison Warrants with
effect on the Effective Date so as to permit participation of the Talison
Warrantholder in the Scheme; or

 

 

(b)

subject to all necessary approvals, a Talison Warrantholder agrees to the
cancellation of all of their Talison Warrants in consideration for Bidder paying
C$5.60 per Talison Warrant,

 

such agreement to be subject to the Scheme becoming Effective and otherwise in a
form reasonably acceptable to Bidder.

 

1.2                                               Best and reasonable endeavours

 

Any provision of this agreement which requires a party to use best endeavours or
all reasonable endeavours to procure that something is performed or occurs or
does not occur does not include any obligation:

 

(a)

to pay any money or to provide any financial compensation, valuable
consideration or any other incentive to or for the benefit of any person except
for payment of any applicable fee for the lodgement or filing of any relevant
application with any Regulatory Authority; or

 

 

(b)

to commence any legal action or proceeding against any person,

 

11

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except where that provision expressly specifies otherwise.

 

1.3                                               Business Day

 

If the day on which any act to be done under this agreement is a day other than
a Business Day, that act must be done on the immediately preceding Business Day
except where this agreement expressly specifies otherwise.

 

1.4                                               Knowledge of Talison

 

If any Talison Warranty is qualified by Talison’s knowledge, the facts of which
Talison is aware or that are within Talison’s knowledge are taken to be all
facts of which any one of the Chief Executive Officer, the Chief Executive
Officer’s direct reports (as at the date of this agreement) and the General
Manager Greenbushes Lithium Operations is actually aware at the relevant time.

 

1.5                                               Interpretation

 

In this agreement headings are for convenience only and do not affect
interpretation and, unless the contrary intention appears:

 

(a)

a word importing the singular includes the plural and vice versa, and a word of
any gender includes the corresponding words of any other gender;

 

 

(b)

the word including or any other form of that word is not a word of limitation;

 

 

(c)

if a word or phrase is given a defined meaning, any other part of speech or
grammatical form of that word or phrase has a corresponding meaning;

 

 

(d)

a reference to a person includes an individual, the estate of an individual, a
corporation, an authority, an association or parties in a joint venture, a
partnership and a trust;

 

 

(e)

a reference to a party includes that party’s executors, administrators,
successors and permitted assigns, including persons taking by way of novation
and, in the case of a trustee, includes any substituted or additional trustee;

 

 

(f)

a reference to a document (including this agreement) is to that document as
varied, novated, ratified or replaced from time to time;

 

 

(g)

a reference to a party, clause, schedule, exhibit, attachment, or annexure is a
reference to a party, clause, schedule, exhibit, attachment, or annexure to or
of this agreement, and a reference to this agreement includes all schedules,
exhibits, attachments, and annexures to it;

 

 

(h)

a reference to an agency or body if that agency or body ceases to exist or is
reconstituted, renamed or replaced or has its powers or function removed
(obsolete body), means the agency or body which performs most closely the
functions of the obsolete body;

 

 

(i)

a reference to a statute includes any regulations or other instruments made
under it (delegated legislation) and a reference to a statute or delegated
legislation or a provision of either includes consolidations, amendments,
re-enactments and replacements;

 

 

(j)

a reference to C$ or Canadian dollar is to Canadian currency and a reference to
A$ or Australian dollar is to Australian currency;

 

12

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(k)                 if a word or phrase is not given a defined meaning in clause
1.1 but is defined in or for the purposes of the Corporations Act, it has the
same meaning when used in this agreement;

 

(l)                  a reference to a date or time is to that date or time in
Perth, Western Australia; and

 

(m)               this agreement must not be construed adversely to a party just
because that party prepared it or caused it to be prepared.

 

2.                  Obligations in relation to Scheme and Option Scheme

 

2.1                Talison to propose Scheme and Option Scheme

 

(a)                 Talison agrees to propose the Scheme and the Option Scheme
on and subject to the terms and conditions of this agreement.

 

(b)                 Bidder agrees to assist Talison to propose the Scheme and
the Option Scheme on and subject to the terms and conditions of this agreement.

 

2.2                Talison and Bidder to Implement Scheme and Option Scheme

 

Talison and Bidder agree to implement the Scheme and the Option Scheme on and
subject to the terms and conditions of this agreement, subject in each case to
the scheme of arrangement becoming Effective.

 

3.                  Conditions precedent

 

3.1                Conditions to Scheme

 

Subject to this clause 3, the Scheme will not become Effective, and the
obligations of the Bidder under clauses 4.2(k) and 5.1 and Talison under clause
4.1(u) are not binding, until each of the conditions listed in the first column
of the following table are either satisfied or waived in accordance with clause
3.6:

 

Condition

 

Right to
benefit and
waive

 

Responsibility
to satisfy

(a)   (No Material Adverse Change) no Material Adverse Change occurs or becomes
known to Bidder between the date of this agreement and 8:00 am on the Second
Court Date

 

Bidder

 

Talison

 

 

 

 

 

(b)   (FIRB approval) before 8.00 am on the Second Court Date, the Treasurer of
the Commonwealth of Australia:

 

(i)    gives an approval to the proposed acquisition by Bidder Subsidiary of all
the Talison securities and that approval is not subject to conditions, or is
subject only to conditions that Bidder, acting reasonably, considers to be
acceptable; or

 

(ii)   has issued a notice stating that the

 

None

 

Bidder and Talison

 

13

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Condition

 

Right to
benefit and
waive

 

Responsibility
to satisfy

Commonwealth Government does not object to Bidder Subsidiary acquiring all the
Talison securities and that notice is not subject to conditions, or is subject
only to conditions that Bidder, acting reasonably, considers to be acceptable;
or

 

(iii)  has become, or is precluded from making an order in respect of the
acquisition of the Talison securities by Bidder Subsidiary,

 

under the Foreign Acquisitions and Takeovers Act 1975 (Cth)

 

 

 

 

 

 

 

 

 

(c)   (Regulatory approvals) on or before 8.00 am on the Second Court Date, all
approvals from ASIC required to implement the Scheme are granted or obtained and
those regulatory approvals are not withdrawn, cancelled or revoked. To avoid
doubt, this includes ASIC having issued or provided such consents or approvals
or having done such other acts which Bidder and Talison agree are reasonably
necessary to implement the Scheme notwithstanding that a condition or conditions
may have been attached to any such regulatory approval, if that condition (or
conditions) is acceptable to Bidder and Talison (acting reasonably)

 

Bidder and Talison

 

Bidder and Talison

 

 

 

 

 

(d)   (Prescribed Occurrence) no Prescribed Occurrence has occurred or becomes
known to Bidder after the date of this agreement and before 8.00 am on the
Second Court Date

 

Bidder

 

Talison

 

 

 

 

 

(e)   (Talison Shareholder approval) Talison Shareholders approve the Scheme by
the majorities required under section 411(4)(a)(ii) of the Corporations Act

 

None

 

Talison

 

 

 

 

 

(f)    (Court approval) the Court approves the Scheme in accordance with section
411(4)(b) of the Corporations Act

 

None

 

Bidder and Talison

 

 

 

 

 

(g)   (Option Scheme Effective) the Court approves the Option Scheme in
accordance with section 411(4)(b) of the Corporations Act

 

Bidder

 

Bidder and Talison

 

14

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3.2                Conditions to Option Scheme

 

Subject to this clause 3, the Option Scheme will not become Effective, and the
obligations of the Bidder under clauses 4.2(l) and 5.2 and Talison under clause
4.1(v) are not binding, until each of the conditions listed in the first column
of the following table are either satisfied or waived in accordance with clause
3.6:

 

Condition

 

Right to
benefit and
waive

 

Responsibility
to satisfy

(a)   (Regulatory approvals) on or before 8.00 am on the Second Court Date, all
approvals from ASIC required to implement the Option Scheme are granted or
obtained and those regulatory approvals are not withdrawn, cancelled or revoked.
To avoid doubt, this includes ASIC having issued or provided such consents or
approvals or having done such other acts which Bidder and Talison agree are
reasonably necessary to implement the Option Scheme notwithstanding that a
condition or conditions may have been attached to any such regulatory approval,
if that condition (or conditions) is acceptable to Bidder and Talison (acting
reasonably)

 

Bidder and Talison

 

Bidder and Talison

 

 

 

 

 

(b)   (Scheme Effective) the Scheme becomes Effective

 

Bidder

 

Bidder and Talison

 

 

 

 

 

(c)   (Talison Optionholder approval) Talison Optionholders approve the Option
Scheme by the majorities required under section 411(4)(a)(ii) of the
Corporations Act

 

None

 

Talison

 

 

 

 

 

(d)   (Court approval) the Court approves the Option Scheme in accordance with
section 411(4)(b) of the Corporations Act

 

None

 

Bidder and Talison

 

3.3                General obligations in relation to Conditions

 

Without prejudice to any other obligations of the parties under this agreement,
in respect of any given Condition:

 

(a)                 if one party is specified in the third column of the table
in clause 3.1 or 3.2 opposite that Condition, that party must use its best
endeavours to procure the satisfaction of that Condition as soon as practicable
after the date of this agreement and continues to be satisfied at all times up
until the last time it is to be satisfied (as the case may require);

 

(b)                 if both parties are specified in the third column of a table
in clause 3.1 or 3.2 opposite that Condition, both parties must, to the extent
that it is within their respective control or influence, use their best
endeavours to procure the satisfaction of that Condition as soon as practicable
after the date of this agreement and

 

15

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continues to be satisfied at all times up until the last time it is to be
satisfied (as the case may require); and

 

(c)                 each party must, to the extent that it is within its
respective control or influence, use its best endeavours to procure that there
is no occurrence that would prevent the Condition being satisfied and no party
shall take any action that will or is likely to hinder or prevent the
satisfaction of the Condition except to the extent that such action is required
to be done or procured pursuant to the Transaction Documents or is required by
Law.

 

3.4               Obligations in relation to Regulatory Conditions

 

Each party must use its best endeavours to ensure that the Regulatory Conditions
are satisfied as soon as practicable after the date of this agreement and, in
particular, the party that is specified in the third column of the table in
clause 3.1 opposite a Regulatory Condition (or both parties, if both parties are
so specified) must use its best endeavours to ensure that the Regulatory
Conditions are satisfied as soon as practicable after the date of this agreement
and in any event before the scheduled date for the Scheme Meeting in the
Timetable and, in particular, each party must:

 

(a)                 as soon as practicable prepare and, subject to
clause 3.4(c), lodge, each notice or application required to be given by that
party for the purposes of procuring the satisfaction of the Regulatory
Conditions (as applicable) and take all procedural steps it is responsible for
as part of such approval process, including responding to requests for
information at the earliest practicable time and use best endeavours to obtain
such approvals as soon as practicable after the date of this agreement;

 

(b)                 furnish, on a timely basis, all information as may
reasonably be required by another party or by any Regulatory Authority to ensure
the Regulatory Conditions are satisfied, and each covenants that, to its
knowledge, no information so furnished by it in writing shall contain any
material misrepresentation;

 

(c)                 consult with the other party, in advance, in relation to all
communications with any Regulatory Authority relating to any such regulatory
approval (other than those of a purely mechanical or housekeeping type);

 

(d)                 keep the other party informed of progress in relation to
each such regulatory approval and of any material matters raised by, or
conditions or other arrangements proposed by, or to, any Regulatory Authority
which relate to any such regulatory approval; and

 

(e)                 provide copies of all documents provided to and received
from each relevant Regulatory Authority in relation to each such regulatory
approval (including before the date of this agreement), on a confidential basis,
to the other party,

 

provided that, in each case:

 

(f)                                                    the party applying for
the approval may withhold or redact information or documents if and to the
extent that they are confidential to a third party or commercially sensitive and
confidential to the applicant;

 

(g)                 nothing in this clause 3.4 or any other provision of this
agreement requires a party to disclose materially commercially sensitive
information to the other party; and

 

(h)                 the party applying for the approval will not be prevented
from taking procedural steps or communicating with or providing documents to a
Regulatory Authority if the other party has not responded promptly under clause
3.4(c).

 

16

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The other party must provide the applicant for a Regulatory Approval with all
assistance and information reasonably requested by the applicant in connection
with the application for and obtaining the approval.

 

3.5                Notice in relation to satisfaction of Conditions

 

Each party must:

 

(a)                 keep the other party promptly and reasonably informed of the
steps it has taken and of its progress towards satisfaction of the Conditions;

 

(b)                 in relation to any Condition, promptly notify the other
party in writing upon becoming aware of:

 

(i)                  the satisfaction of that Condition, in which case the
notifying party must also provide reasonable evidence that the Condition has
been satisfied; or

 

(ii)                 any fact or circumstance that it becomes aware of which
results in, or may result in, that Condition becoming incapable of satisfaction
or may result in that Condition not being satisfied in accordance with its
terms; and

 

(c)                 in relation to any Condition, immediately notify the other
party in writing of a breach or non-fulfilment of a Condition or any occurrence
or event that will prevent a Condition from being satisfied and where a party is
entitled to waive that Condition upon receipt or delivery of such a notice (as
applicable) that party must notify the other party in accordance with clause 3.6
as soon as possible, (in any event before 5.00 pm on the Business Day before the
Second Court Date) as to whether the party waives the breach or non-fulfilment
of the Condition resulting from the occurrence or event.

 

If there occurs a breach or non-fulfilment of a Condition or any occurrence or
event that will prevent a Condition from being satisfied, the parties will
consult in good faith for 5 Business Days to determine whether an alternative
solution can be agreed.

 

3.6                Waiver of Conditions

 

(a)                 A Condition is only for the benefit of:

 

(i)                  if one party is specified in the second column of the
tables in clause 3.1 and 3.2 opposite that Condition, that party; or

 

(ii)                 if both parties are specified in the second column of the
tables in clause 3.1 and 3.2 opposite that Condition, both parties.

 

(b)                 A Condition may be waived and may only be waived:

 

(i)                  if one party is specified in the second column of the
tables in clause 3.1 and 3.2 opposite that Condition, by that party by written
notice to the other party; or

 

(ii)                 if both parties are specified in the second column of the
tables in clause 3.1 and 3.2 opposite that Condition, by written agreement
between the parties.

 

17

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(c)                 A party entitled to waive or to agree to waive a Condition
under this clause 3.6 may do so in its absolute discretion subject to the
provision of written notice to the other party.

 

(d)                 A party that waives or agrees to waive a Condition is not
prevented from bringing a claim against any other party in respect of any breach
of this agreement that caused that Condition not to be satisfied.

 

(e)                 Waiver of a breach or non-fulfilment in respect of one
Condition does not constitute:

 

(i)                  a waiver of breach or non-fulfilment of any other Condition
resulting from the same event; or

 

(ii)                 a waiver of breach or non-fulfilment of that Condition
resulting from any other event.

 

3.7                Failure of Conditions

 

A party is entitled to terminate this agreement by notice to the other party at
any time before the Effective Date:

 

(a)                 if any Condition has become incapable of satisfaction and
that Condition has not been waived in accordance with clause 3.6 within 5
Business Days after the other party is given a notice under clauses
3.5(b)(ii) or 3.5(c) of the occurrence of the fact, matter or circumstance which
caused that Condition to become incapable of satisfaction and no alternative
solution has been agreed under clause 3.5;

 

(b)                 if any Condition has not been satisfied or waived in
accordance with clause 3.6 before the End Date; or

 

(c)                 if any Condition, having been satisfied on or before the End
Date ceases to be satisfied before the Effective Date,

 

except where the relevant Condition has become incapable of satisfaction, has
not been satisfied, or ceases to be satisfied, as a direct result of a failure
by the party seeking to terminate to comply with its obligations under clause 4
or this clause 3.

 

4.                  Implementation of Scheme and Option Scheme

 

4.1                Talison’s obligations

 

Talison must take all steps reasonably necessary to implement the Scheme and the
Option Scheme as soon as is reasonably practicable after the date of this
agreement and so as to complete the Transaction substantially in accordance with
the Timetable (unless otherwise agreed by the parties acting reasonably and in
good faith), and in particular Talison must:

 

(a)                 (Explanatory Memorandum) as soon as practicable after the
date of this agreement, prepare the Explanatory Memorandum (excluding Bidder
Information and the Independent Expert’s Report) in accordance with all
applicable Law and in particular the requirements of the Corporations Act, the
Corporations Regulations, the Regulatory Guides and Canadian Securities Law;

 

(b)                 (Review of the Bidder Information) as soon as practicable
after receiving a draft of the Bidder Information pursuant to clause 4.2(a),
review and provide comments on the form and content of the Bidder Information to
Bidder;

 

18

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(c)                 (Independent Expert) promptly appoint the Independent Expert
and provide all assistance and information reasonably requested by the
Independent Expert in connection with the preparation of the Independent
Expert’s Report for inclusion in the Explanatory Memorandum;

 

(d)                 (Provide draft Explanatory Memorandum to Bidder) provide
drafts of the Explanatory Memorandum to Bidder, consult with Bidder in relation
to the content of those drafts and (acting reasonably and in good faith) take
into account any comments from Bidder and its Representatives on those drafts;

 

(e)                 (Provide draft Independent Expert’s Report) provide a draft
of the Independent Expert’s Report to Bidder no later than 2 Business Days prior
to provision of the Regulator’s Draft to ASIC;

 

(f)                 (Approval of draft Explanatory Memorandum) procure that a
meeting of the Talison Board is convened to approve the draft Explanatory
Memorandum to be provided to ASIC for its review;

 

(g)                 (ASIC review) as soon as reasonably practicable provide an
advanced draft of the Explanatory Memorandum (Regulator’s Draft) to ASIC, for
its review and approval for the purposes of section 411(2) of the Corporations
Act, and to Bidder, and:

 

(i)                  liaise with ASIC as necessary during the Regulatory Review
Period; and

 

(ii)                 promptly notify, and consult with, Bidder in relation to
any matters raised by ASIC in connection with the Explanatory Memorandum or the
Scheme and any presentation or submission to, or at any proposed meeting with,
ASIC, and co-operate and consult with Bidder to resolve any such matters;

 

(h)                 (Section 411(17)(b) statement) apply to ASIC for the
production of:

 

(i)                  an indication of intent letter stating that it does not
intend to appear before the Court on the First Court Date; and

 

(ii)                 a statement in writing pursuant to section 411(17)(b) of
the Corporations Act stating that ASIC has no objection to the Scheme or the
Option Scheme;

 

(i)                  (Court documents): consult with Bidder in relation to the
content of the documents required for the purposes of the Court hearings held
for the purposes of sections 411(1) and 411(4)(b) of the Corporations Act in
relation to the Scheme and the Option Scheme (including originating process,
affidavits, submissions and draft minutes of Court orders) and consider in good
faith comments on, and suggested amendments to, those documents from Bidder and
its Representatives;

 

(j)                  (First Court hearing) lodge all documents with the Court
and take all other reasonable steps to ensure that an application is heard by
the Court for an order under section 411(1) of the Corporations Act directing
Talison to convene the Scheme Meeting and the Option Scheme Meeting;

 

(k)                (Approval of Explanatory Memorandum) procure that a meeting
of the Talison Board is convened to approve the Explanatory Memorandum for
registration with ASIC and dispatch to Talison Shareholders;

 

19

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(l)                 (Due diligence and verification) Talison must undertake
appropriate due diligence and verification processes in relation to the
Explanatory Memorandum (other than the Bidder Information and the Independent
Expert’s Report);

 

(m)               (Register Explanatory Memorandum) request ASIC that the
explanatory statement included in the Explanatory Memorandum in relation to the
Scheme and the Option Scheme be registered in accordance with section 412(6) of
the Corporations Act;

 

(n)                 (Compliance with Court orders) take all reasonable steps
necessary to comply with the orders of the Court including, as required,
dispatching the Explanatory Memorandum to Talison Shareholders and Talison
Optionholders and convening and holding the Scheme Meeting and the Option Scheme
Meeting;

 

(o)                 (Obtain Bidder’s consent) before dispatch of the Scheme
Booklet to Talison Shareholders, Talison must obtain the written consent of
Bidder to inclusion of the Bidder Information in the Scheme Booklet in the form
and context in which it appears (such consent not to be unreasonably withheld or
delayed);

 

(p)                 (Update Explanatory Memorandum) if it becomes aware of
information after the date of dispatch of the Explanatory Memorandum, which is
required to be disclosed to Talison Shareholders or Talison Optionholders under
any applicable Law, as expeditiously as practicable:

 

(i)                  inform Talison Shareholders and/or Talison Optionholders of
the information in an appropriate and timely manner, and in accordance with
applicable Law; and

 

(ii)                 to the extent it is reasonably practicable to do so,
provide Bidder with drafts of any documents that it proposes to issue to Talison
Shareholders and/or Talison Optionholders under this clause 4.1(p) , consult
with Bidder in relation to the content of those drafts and (acting reasonably
and in good faith) take into account any comments from Bidder and its
Representatives on those drafts;

 

(q)                 (Keep informed) from the First Court Date until the
Implementation Date, promptly inform Bidder if it becomes aware that the
Explanatory Memorandum contains a statement which is misleading or deceptive in
a material respect or contains a material omission;

 

(r)                  (Court approval application) if the resolutions submitted
to the Scheme Meeting and the Option Scheme Meeting in relation to the Scheme
and the Option Scheme respectively are approved by the majorities required under
section 411(4)(a)(ii) of the Corporations Act and subject to all other
Conditions (other than the Condition in clause 3.1(f)) being satisfied or waived
in accordance with this agreement, apply (and, to the extent necessary,
re-apply) to the Court for orders approving the Scheme and the Option Scheme;

 

(s)                 (Information) provide all information, or procure that the
Talison Share Registry provides all information, to Bidder, in each case in a
form reasonably requested by Bidder, about the Transaction and the Talison
Shareholders and Talison Optionholders which Bidder reasonably requires in order
to canvass agreement to the Scheme and the Option Scheme by Talison Shareholders
and Talison Optionholders respectively;

 

(t)                  (Certificate) at or before the hearing on the Second Court
Date, provide to the Court a certificate (or such other evidence as the Court
may request) confirming (in

 

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respect of matters within its knowledge) whether or not the conditions set out
in clauses 2.1(a) and 2.1(b) of the Scheme and of the Option Scheme
(respectively) have been satisfied.  Talison must provide a draft of that
certificate to Bidder by 5.00 pm on the Business Day prior to the Second Court
Date;

 

(u)                                                 (Implementation of Scheme)
if the Conditions to the Scheme are satisfied or waived:

 

(i)                                                    lodge with ASIC an office
copy of the orders approving the Scheme in accordance with section 411(10) of
the Corporations Act as soon as practicable after such office copy is received
but in any event no later than 5.00 pm on the Business Day after the date on
which the Court makes those orders or such other Business Day as Talison and
Bidder agree in writing;

 

(ii)                                                 use reasonable endeavours
to procure that TSX suspends trading in Talison Shares promptly following the
Scheme becoming Effective;

 

(iii)                                             close the Talison Share
Register as at the Record Date and determine entitlements to the Scheme
Consideration in accordance with the Scheme;

 

(iv)                                             provide to Bidder all
information about the Scheme Shareholders that Bidder reasonably requires in
order for Bidder Subsidiary to provide, or procure the provision of, the Scheme
Consideration in accordance with the Scheme;

 

(v)                                                subject to Bidder satisfying
its obligations under clause 5.1(b), on the Implementation Date (or as soon as
practicable thereafter) register all transfers of Scheme Shares to Bidder
Subsidiary in accordance with the Scheme; and

 

(vi)                                             promptly do all other things
contemplated by or necessary to give effect to the Scheme and the orders of the
Court approving the Scheme; and

 

(v)                                                 (Implementation of Option
Scheme) if the Conditions to the Option Scheme are satisfied or waived:

 

(i)                                                    lodge with ASIC an office
copy of the orders approving the Option Scheme in accordance with section
411(10) of the Corporations Act as soon as practicable after such office copy is
received but in any event no later than 5.00 pm on the Business Day after the
date on which the Court makes those orders or such other Business Day as Talison
and Bidder agree in writing;

 

(ii)                                                 close the Talison Option
Register as at the Record Date and determine entitlements to the Option Scheme
Consideration in accordance with the Option Scheme;

 

(iii)                                             promptly pass all board
resolutions necessary to allow the transfer of the Talison Options in accordance
with the Option Scheme;

 

(iv)                                             provide to Bidder all
information about the Scheme Optionholders that Bidder reasonably requires in
order for Bidder Subsidiary to provide, or procure the provision of, the Option
Scheme Consideration in accordance with the Option Scheme;

 

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(v)                                                 subject to Bidder satisfying
its obligations under clause 5.2(b), on the Implementation Date (or as soon as
practicable thereafter) register all transfers of Scheme Options to Bidder
Subsidiary in accordance with the Option Scheme; and

 

(vi)                                              promptly do all other things
contemplated by or necessary to give effect to the Option Scheme and the orders
of the Court approving the Option Scheme; and

 

(w)                                              (Other things necessary)
promptly do all other things reasonably within its power to lawfully give effect
to the Scheme and the Option Scheme.

 

4.2                                               Bidder’s obligations

 

Bidder must take all steps reasonably necessary to assist Talison to implement
the Scheme and the Option Scheme as soon as is reasonably practicable and so as
to complete the Transaction substantially in accordance with the Timetable
(unless otherwise agreed by the parties acting reasonably and in good faith),
and in particular Bidder must:

 

(a)                                                  (draft of the Bidder
Information) provide to Talison a draft of the Bidder Information as soon as
reasonably practicable after the date of this agreement and consult with Talison
in relation to the content of drafts of the Bidder Information and (acting
reasonably and in good faith) take into account any comments from Talison and
its Representatives on those drafts;

 

(b)                                                  (final form of Bidder
Information) provide to Talison the Bidder Information in a form appropriate for
inclusion in the Explanatory Memorandum;

 

(c)                                                   (review Explanatory
Memorandum) review the drafts of the Explanatory Memorandum provided by Talison
and provide comments on those drafts promptly and in good faith;

 

(d)                                                  (Due diligence and
verification) undertake appropriate due diligence and verification processes in
relation to the Bidder Information, and provide to Talison all evidence of such
processes as may be reasonably requested;

 

(e)                                                   (Independent Expert)
subject to the Independent Expert entering into arrangements with Bidder as to
confidentiality in a form reasonably acceptable to Bidder, promptly provide all
assistance and information reasonably requested by the Independent Expert to
enable it to prepare its report for inclusion in the Explanatory Memorandum;

 

(f)                                                    (Approval of Bidder
Information) as soon as reasonably practicable after receipt from Talison of the
draft of the Explanatory Memorandum that Talison proposes to dispatch to Talison
Shareholders and Talison Optionholders, either:

 

(i)                                                     confirm in writing to
Talison that the Bidder Information (other than to the extent it consists of
information relating to Talison that was provided by or on behalf of Talison) in
the form and context in which it appears in the draft of the Explanatory
Memorandum is in all material respects, not misleading or deceptive in any
material respect and does not contain any material omission and is in a form
appropriate for dispatch to the Talison Shareholders and Talison Optionholders
(subject to the approval of the Court); or

 

(ii)                                                 provide to Talison the
changes required to ensure that the Bidder Information (other than to the extent
it consists of information relating to

 

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Talison that was provided by or on behalf of Talison) in the form and context in
which it appears in the Explanatory Memorandum is not misleading or deceptive in
any material respect and does not contain any material omission and is in a form
appropriate for dispatch to the Talison Shareholders and Talison Optionholders
(subject to the approval of the Court);

 

(g)                                                 (Keep Talison informed)
promptly inform Talison if it becomes aware from the First Court Date until the
Implementation Date that the Bidder Information (other than to the extent that
it consists of information relating to Talison that was provided by or on behalf
of Talison) in the form and context in which it appears in the Explanatory
Memorandum contains a material misrepresentation, is or has become misleading or
deceptive in any material respect or contains any material omission, and provide
such further or new information as is required to ensure that such information
is no longer misleading or deceptive in any material respect or contains any
material omission;

 

(h)                                                 (Deed Poll) no later than
the Business Day prior to the First Court Date, enter into the Deed Poll and the
Option Scheme Deed Poll and deliver the executed versions to Talison;

 

(i)                                                    (Second Court Hearing)
procure that it is represented by counsel at the Court hearing convened for the
purposes of section 411(4)(b) of the Corporations Act, at which, through its
counsel, Bidder will undertake (if requested by the Court) to do all such things
and take all such steps within its power as may be reasonably necessary in order
to ensure the fulfilment of its obligations under this agreement and the Scheme
and Option Scheme;

 

(j)                                                    (Certificate) at or
before the hearing on the Second Court Date, provide to the Court a certificate
(or such other evidence as the Court may request) confirming (in respect of
matters within its knowledge) whether or not the conditions (set out in clauses
2.1(a) and 2.1(b) of the Scheme and of the Option Scheme (respectively) have
been satisfied.  Bidder must provide a draft of that certificate to Talison by
5:00 pm on the Business Day prior to the Second Court Date;

 

(k)                                                 (Implementation of Scheme)
if the Scheme becomes Effective, procure that Bidder Subsidiary provides the
Aggregate Scheme Consideration on the Implementation Date in accordance with
clause 5.1(b) and the terms of the Scheme;

 

(l)                                                    (Implementation of Option
Scheme) if the Option Scheme becomes Effective, procure that Bidder Subsidiary
provides the Aggregate Option Scheme Consideration on the Implementation Date in
accordance with clause 5.2(b) and the terms of the Option Scheme; and

 

(m)                                             (Other things necessary)
promptly do all other things reasonably within its power to lawfully give effect
to the Scheme and the Option Scheme.

 

4.3                                               Dispute as to Explanatory
Memorandum

 

If, after a reasonable period of consultation, the parties, each acting
reasonably and in good faith, are unable to agree on the form or content of the
Explanatory Memorandum, then:

 

(a)                                                  if the disagreement relates
to the form or content of the Bidder Information (or any information solely
derived from, or prepared solely in reliance on, the Bidder Information),
Talison will, acting in good faith, make such amendments to that information in
the Explanatory Memorandum as Bidder may reasonably require; and

 

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(b)                                                  if the disagreement relates
to the form or content of the Talison Information (or any information solely
derived from, or prepared solely in reliance on, information provided by or on
behalf of Talison), Talison will, acting in good faith, decide the final form of
that information in the Explanatory Memorandum.

 

4.4                                               Reconstitution of Talison
Board

 

On the Implementation Date, but subject to Bidder Subsidiary having provided the
Scheme Consideration and the Option Scheme Consideration in accordance with
clause 5.1(b) and clause 5.2(b), Talison must:

 

(a)                                                  cause the appointment to
the Talison Board and to the boards of each Subsidiary of Talison of such number
of persons as nominated by Bidder, subject to those persons being appointed
having provided a consent to act as directors of the relevant companies;

 

(b)                                                  procure that all Talison
Directors and the directors of each subsidiary of Talison (other than, in each
case, those that may be nominated in writing by Bidder and those appointed
pursuant to clause 4.4(a)) resign from the Talison Board and the board of each
subsidiary of Talison; and

 

(c)                                                   procure that the service
contracts for all Talison Directors and the directors of each Subsidiary of
Talison (other than, in each case, those that may be nominated in writing by
Bidder and those appointed pursuant to clause 4.4(a)) terminate with effect from
the Implementation Date.

 

4.5                                               Responsibility statement

 

The Explanatory Memorandum will contain a responsibility statement to the effect
that:

 

(a)                                                  Bidder is responsible for
the Bidder Information contained in the Explanatory Memorandum (other than to
the extent that it consists of information relating to the Talison Group that
was provided by or on behalf of Talison); and

 

(b)                                                  Talison is responsible for
the Talison Information contained in the Explanatory Memorandum.

 

5.                                                      Scheme Consideration and
Option Scheme Consideration

 

5.1                                               Bidder’s covenant in respect
of the Scheme Consideration

 

(a)                                                  Subject to the Scheme
becoming Effective, Bidder covenants and agrees in favour of Talison (in
Talison’s own right and separately as trustee for each of the Scheme
Shareholders) that in consideration of the transfer to Bidder Subsidiary of each
Scheme Share held by a Scheme Shareholder under the terms of the Scheme, Bidder
will procure that Bidder Subsidiary:

 

(i)                                                     accepts that transfer;
and

 

(ii)                                                  provides, or procure the
provision of, the Scheme Consideration to that Scheme Shareholder for each of
their Scheme Shares in accordance with the terms of the Scheme.

 

(b)                                                  Before the Scheme Shares
are to be transferred to Bidder Subsidiary under the Scheme, Bidder Subsidiary
must, at or prior to 12:00 noon on the Implementation Date, deposit an amount
equal to the Aggregate Scheme Consideration in cleared

 

24

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funds into the Trust Account.  Bidder must procure that Bidder Subsidiary makes
such deposit.

 

5.2                                               Bidder’s covenant in respect
of the Option Consideration

 

(a)                                                  Subject to the Option
Scheme becoming Effective, Bidder covenants and agrees in favour of Talison (in
Talison’s own right and separately as trustee for each of the Scheme
Optionholders) that in consideration of the transfer to Bidder Subsidiary of
each Scheme Option held by a Scheme Optionholder under the terms of the Option
Scheme, Bidder will procure that Bidder Subsidiary:

 

(i)                                                    accepts that transfer;
and

 

(ii)                                                 provides, or procure the
provision of, the Option Scheme Consideration to that Scheme Optionholder for
each of their Scheme Options in accordance with the terms of the Option Scheme.

 

(b)                                                 Before the Scheme Options
are to be transferred to Bidder Subsidiary under the Option Scheme, Bidder
Subsidiary must, at or prior to 12:00 noon on the Implementation Date, deposit
an amount equal to the Aggregate Option Scheme Consideration in cleared funds
into the Trust Account.  Bidder must procure that Bidder Subsidiary makes such
deposit.

 

6.                                                      Treatment of Talison
Warrants, LTIP Shares and Special Voting Share

 

6.1                                               Warrant Commitments

 

(a)                                                  The parties must each use
their best endeavours to ensure that, as soon as reasonably practicable and, in
any event, by the First Court Date, each Talison Warrantholder enters into a
Warrant Commitment in a form reasonably acceptable to Bidder.  To avoid doubt:

 

(i)                                                    the satisfaction of this
clause 6.1 is not a condition of the Scheme; and

 

(ii)                                                 if a Talison Warrantholder
has not entered into a Warrant Commitment by the date prescribed by this clause
6.1, the parties must continue to use their best endeavours to ensure that the
Talison Warrantholder does so as soon as practicable thereafter.

 

(b)                                                 If, by the First Court Date,
all Talison Warrantholders have not either entered into a Warrant Commitment or
exercised all of their Talison Warrants, the parties agree that, if so requested
by Bidder, the Record Date will be 5:00pm (Perth time) on 4 December 2012.

 

6.2                                               Talison obligations in respect
of Talison Warrants

 

(a)                                                  Talison undertakes to grant
any consent or approval and use its best endeavours to take any further action
as may be required in connection with any proposed transaction under a Warrant
Commitment, including by:

 

(i)                                                    issuing Talison Shares,
and entering such Talison Shares in the Talison Share Register, promptly upon
the due exercise of a Talison Warrant (and in any event prior to the Record
Date); and

 

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(ii)                                                 doing such things as may be
reasonably necessary in order to give effect to any cancellation of Talison
Warrants that may be contemplated by a Warrant Commitment.

 

(b)                                                 Without derogating from
clause 6.2(a), whenever a Talison Warrant is validly exercised (whether pursuant
to a Warrant Commitment or otherwise), Talison must ensure that a Talison Share
is issued to the person that exercised the Talison Warrant such that the person
is registered as the holder of the Talison Share in the Talison Share Register
before the Record Date.

 

(c)                                                  From the date of this
agreement up to and including the Implementation Date, Talison shall not cause
or permit any amendment of the terms of any Talison Warrants without the consent
of Bidder.

 

6.3                                               LTIP Shares

 

(a)                                                 Until the First Court Date,
the parties must use their best endeavours to investigate structures for dealing
with, or making arrangements in relation to, the LTIP Shares in an efficient or
desirable manner (from Bidder’s perspective) (Structure).

 

(b)                                                 Subject to clause 6.3(c), if
a Structure is identified by Bidder as being desirable for implementation, the
parties will negotiate in good faith the necessary amendments to the Scheme
and/or the Option Scheme, and if necessary this agreement, so as to give effect
to the Structure, and otherwise do all things necessary to give effect to the
Structure.

 

(c)                                                  Talison will not be
required to do anything to implement the Structure if it would:

 

(i)                                                    have an adverse effect on
any member of the Talison Group (other than the Trustee in its capacity as
trustee of the LTIP Trust) or the Transaction or the prospects for its
implementation; or

 

(ii)                                                 result in a requirement to
obtain any additional approvals not contemplated in clause 3.1.

 

(d)                                                 Whenever a Talison Option is
validly exercised after the date of this agreement:

 

(i)                                                    Talison will notify the
Trustee that it wishes the Trustee to settle such exercise by delivering a LTIP
Share to the person that exercised the Talison Option, subject only to the
Trustee holding a LTIP Share at the relevant time (to avoid doubt, the LTIP
Shares must be used to settle valid exercises of Talison Options to the fullest
extent possible); and

 

(ii)                                                 without derogating from
clause 6.3(d)(i), Talison must ensure that a Talison Share is transferred or
issued to the person that exercised the Talison Option such that the person is
registered as the holder of the Talison Share in the Talison Share Register
before the Record Date.

 

6.4                                               Special Voting Share

 

Prior to the Implementation Date, Talison will use its best endeavours to
procure that Computershare Trust Company of Canada gives a legally binding
commitment to do all things necessary after the Implementation Date to transfer
the Special Voting Share to Bidder (or otherwise as directed by Bidder) or to
facilitate the cancellation of the Special Voting Share.

 

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7.                                                      Conduct of business and
co-operation

 

7.1                                               Conduct of Talison’s business

 

(a)                                                 Subject to clause 7.1(b),
from the date of this agreement up to and including the Implementation Date,
Talison must:

 

(i)                                                    procure that each member
of the Talison Group:

 

A.                                                   conducts its businesses and
operations in the ordinary and usual course and substantially consistent
(subject to any applicable Law) with the manner in which each such business and
operation is conducted prior to the date of this agreement and in a manner
consistent in all material respects with the Budget; and

 

B.                                                   conducts its businesses and
operations in accordance with all applicable Laws in all material respects; and

 

C.                                                   use reasonable endeavours
to obtain consents from third parties to any change of control provision which
Bidder reasonably requests in contracts or arrangements to which a member of the
Talison Group is a party; and

 

(ii)                                                 ensure that no Prescribed
Occurrence occurs.

 

(b)                                                 The obligations of Talison
under clause 7.1(a) do not apply to any action undertaken by Talison:

 

(i)                                                    in relation to any matter
required to be done or procured by Talison or another member of the Talison
Group pursuant to, or which is otherwise expressly permitted by, the Transaction
Documents;

 

(ii)                                                 for which the Bidder has
provided its prior written consent (such consent not to be unreasonably withheld
or delayed);

 

(iii)                                             which arises as result of
court or Regulatory Authority order, injunction or undertaking or otherwise
required in order to comply with applicable Law;

 

(iv)                                             which is in accordance with
contractual obligations that existed as at the date of this agreement, provided
such obligations have been fairly disclosed in the Due Diligence Material; or

 

(v)                                                in accordance with
clause 7.3.

 

(c)                                                  For the avoidance of doubt,
nothing in this clause 7.1 restricts the ability of Talison to respond to a
Competing Proposal.

 

7.2                                               Requests for access

 

From the date of this agreement to the Implementation Date, Talison will in good
faith, on request from Bidder (and must procure that each of its Related Bodies
Corporate), provide to Bidder reasonable access at reasonable times to:

 

(a)                                                 members of the Talison Board
or senior management and to such other personnel of the Talison Group as are
requested by Bidder (acting reasonably); and

 

27

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(b)                                                  records, books, documents,
financial statements/accounts and premises of the Talison Group, unless the
provision of any such access is prohibited by law or by the terms of any
confidentiality undertaking provided by Talison to a third party prior to the
date of this agreement,

 

in all cases only for proper purposes, which purposes shall include:

 

(c)                                                  Bidder preparing for
implementation of the Transaction; and

 

(d)                                                 Bidder obtaining an
understanding, or furthering its understanding, of the Talison Group in order to
plan for the period following implementation of the Transaction.

 

7.3                                               GAM Arrangements

 

(a)                                                 Notwithstanding anything
else in this agreement, a member of the Talison Group may enter into legally
binding and definitive agreements with GAM to give effect to the matters
contemplated in the Shared Services Term Sheet provided that such agreements are
not inconsistent in a material respect with the provisions contemplated by the
Shared Services Term Sheet.

 

(b)                                                 Notwithstanding anything
else in this agreement, Talison and its Representatives may negotiate in good
faith the terms of legally binding and definitive agreements with GAM to give
effect to the matters contemplated in the Circuit MOU provided that no member of
the Talison Group may execute any such agreements without the prior consent of
Bidder (consent not to be unreasonably withheld).

 

(c)                                                  Talison will use its best
endeavours to ensure that the Subleases are executed by the parties thereto
prior to the Implementation Date.  Talison may proceed to negotiate the terms of
the Subleases, and may cause the Subleases to be executed by the relevant
Talison Group Member, without Bidder’s consent provided that the Subleases are
on terms no less favourable to Talison than the draft Subleases disclosed to
Bidder as part of the Due Diligence Material.

 

(d)                                                 To avoid doubt, anything
done by Talison in accordance with this clause 7.3 shall not constitute a
Prescribed Occurrence or a breach of any Talison Warranty.

 

7.4                                               Cooperation

 

From the date of this agreement to the Implementation Date, Talison must
promptly provide reasonable cooperation to Bidder and its Representatives (and
must procure that each of its Subsidiaries promptly provides such cooperation),
for the purposes of:

 

(a)                                                 the implementation of the
Transaction; and

 

(b)                                                 assisting Bidder to:

 

(i)                                                    plan for the integration
of the Talison Group and the Bidder Group following the implementation of the
Scheme;

 

(ii)                                                 engage with Talison’s
transactional banking and derivative instrument counterparties for the purposes
of obtaining consents, managing the prepayment or repayment of those
counterparties on or about the Implementation Date and/or the termination of any
contractual arrangements with any such counterparty; and

 

(iii)                                             prepare for any filings that
may be required to be made by Bidder with the U.S. Securities and Exchange
Commission after the Implementation

 

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Date, including by providing such information as may be reasonably required by
Bidder to make such filings.

 

8.                                                     Recommendation,
intentions and announcements

 

8.1                                               Talison Board Recommendation
and Voting Intention

 

(a)                                                  Talison must ensure that
the Announcement and the Explanatory Memorandum state (on the basis of
confirmations made to Talison by each Talison Director) that each Talison
Director:

 

(i)                                                    recommends that Talison
Shareholders vote in favour of the Scheme and Talison Optionholders vote in
favour of the Option Scheme (Recommendation); and

 

(ii)                                                 intends to cause any
Talison Shares and Talison Options in which they have a Relevant Interest to be
voted in favour of the Scheme and the Option Scheme respectively (Voting
Intention),

 

which statements must not be qualified in any way other than by words to the
effect of “in the absence of a Superior Proposal” and (in the case of the
Announcement only) “subject to the Independent Expert concluding that the Scheme
is in the best interests of Talison Shareholders”.

 

(b)                                                 Bidder acknowledges that
each Talison Director may, subject to the terms of this agreement, publicly (or
otherwise) withdraw, change or in any way qualify their Recommendation or Voting
Intention if:

 

(i)                                                    a Superior Proposal is
made; or

 

(ii)                                                 the Independent Expert
concludes in the Independent Expert’s Report (either in its initial report or
any subsequent update of its report) that the Scheme is not in the best
interests of the Talison Shareholders.

 

8.2                                               Confirmation

 

Talison represents and warrants to Bidder that each Talison Director has
confirmed their agreement not to do anything inconsistent with their
Recommendation and Voting Intention (including withdrawing, changing or in any
way qualifying their Recommendation or Voting Intention) other than in the
circumstances referred to in clauses 8.1(b)(i) and 8.1(b)(ii).

 

8.3                                               Announcement

 

(a)                                                 Immediately after the
execution of this agreement Talison must publicly announce the Transaction in
the form of the announcement approved by Bidder (acting reasonably) prior to the
execution of this agreement (Announcement).

 

(b)                                                 To the extent reasonably
practicable and subject to clause 14.4, any announcement of the Transaction by
Bidder will be in a form approved by Talison (acting reasonably).

 

(c)                                                  Talison and Bidder agree to
co-operate and consult in good faith in the preparation of any announcements,
presentations or briefings regarding the Transaction.

 

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9.                                                      Exclusivity arrangements

 

9.1                                               No shop

 

During the Exclusivity Period, Talison must not, and must ensure that its
Representatives do not directly or indirectly solicit, invite, initiate any
Competing Proposal or any inquiry, expression of interest, offer, proposal,
negotiations or discussions by or with any Third Party in relation to, or that
may reasonably be expected to lead to the making of, an actual or potential
Competing Proposal, or communicate any intention to any person to do any of
those things.

 

9.2                                               No talk and no due diligence

 

During the Exclusivity Period, Talison must not, and must ensure that its
Representatives do not, except with the prior written consent of Bidder,
directly or indirectly:

 

(a)                                                 enter into, continue or
participate in any negotiations or discussions with, or accept or enter into, or
offer to accept or enter into, any agreement, arrangement or understanding with,
any Third Party in relation to, or that may reasonably be expected to lead to, a
Competing Proposal;

 

(b)                                                 make available to any Third
Party, or permit any Third Party to receive, any non-public information relating
to any member of the Talison Group in connection with such Third Party
formulating, developing or finalising, or assisting in the formulation,
development or finalisation of, a Competing Proposal; or

 

(c)                                                  communicate any intention
to any person to do anything referred to in this clause 9.2,

 

unless the Talison Board determines, in good faith and having taken advice from
the external legal and financial advisers of the Talison Board, that the
Competing Proposal is, or may reasonably be expected to lead to, a Superior
Proposal and where failing to do so would be reasonably likely to constitute a
breach of their fiduciary or statutory duties and provided that the Competing
Proposal was not solicited, invited or initiated by Talison or its
Representatives in contravention of clause 9.1.

 

9.3                                               Notice of Competing Proposal

 

During the Exclusivity Period, Talison must promptly notify Bidder if it or any
of its Representatives receives a bona fide expression of interest, offer or
proposal from any person (Rival Bidder) which is or may reasonably be expected
to lead to a Competing Proposal.  Such notification will include the price and
material conditions contemplated in the offer or proposal from the Rival Bidder,
but not the identity of the Rival Bidder.

 

9.4                                               Matching right

 

Without limitation to any other part of this agreement, Talison must not enter
into a binding implementation agreement which relates to a Competing Proposal
(or any other agreement in relation to a Competing Proposal which provides for
the payment of a break fee (or similar payment) to a Third Party) (Binding
Agreement) and ensure that each member of the Talison Board does not change its
Recommendation or Voting Intention as a consequence of receiving a Competing
Proposal, unless Talison has:

 

(a)                                                  notified Bidder in writing
of the material terms of the Competing Proposal, including the identity of the
Third Party making the Competing Proposal (it being acknowledged by the parties
that the information subject to the notification is

 

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subject to the Confidentiality Deed and will only be disclosed to those
Representatives of Bidder that have a genuine need to know);

 

(b)                                                  confirmed to Bidder its
intention to enter into the Binding Agreement; and

 

(c)                                                   provided Bidder with 5
clear Business Days to submit a written proposal to revise the Transaction.

 

If Bidder submits a written proposal to revise the Transaction within the period
in paragraph (c), Talison must ensure that the Talison Board considers in good
faith, and receives advice from Talison’s external legal and financial advisers
in relation to, whether the proposed revisions would make the revised
Transaction at least as favourable to Talison Shareholders as the Competing
Proposal.  If it would, the parties must each use best endeavours to, as soon as
practicable, agree the necessary amendments to this agreement, and take all
other necessary steps, to give effect to the change to the Transaction.

 

9.5                                               Normal provision of
information

 

Nothing in this clause 9 prevents Talison from:

 

(a)                                                 providing information to its
Representatives;

 

(b)                                                 providing information to any
Regulatory Authority;

 

(c)                                                  providing information to
its auditors, advisers, financiers, customers, joint venturers and suppliers
acting in that capacity in the ordinary course of business;

 

(d)                                                 providing information
required to be provided by law or any Regulatory Authority; or

 

(e)                                                  making presentations to
brokers, portfolio investors, analysts and other Third Parties in the ordinary
course of business.

 

10.                                               Talison Break Fee

 

10.1                                        Payment of costs

 

(a)                                                  Talison and Bidder believe
that the Scheme and the Transaction will provide benefits to Talison and its
shareholders and Bidder, and acknowledge that if the parties enter into this
agreement and the Scheme and the Transaction are subsequently not implemented,
Bidder will incur significant costs.

 

(b)                                                  In the circumstances
referred to in clause 10.1(a):

 

(i)                                                     Bidder requested that
provision be made for the Talison Break Fee, without which it would not have
entered into this agreement; and

 

(ii)                                                  the Talison Board believes
that it is appropriate to agree to the Talison Break Fee in order to secure
Bidder’s participation.

 

(c)                                                   Talison and Bidder
acknowledge that the Talison Break Fee is intended by the parties to be strictly
compensatory in nature and represents a reasonable estimate of the compensation
so as to compensate Bidder for the following:

 

(i)                                                     advisory costs
(including costs of advisors);

 

(ii)                                                  financing costs;

 

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(iii)                                               costs of management and
directors’ time;

 

(iv)                                              out of pocket expenses; and

 

(v)                                                 reasonable opportunity costs
in pursuing the Transaction or not pursuing other alternative acquisitions or
strategic initiatives.

 

10.2                                        Talison Break Fee payable

 

(a)                                                  Subject to clause 10.3,
Talison must pay Bidder the Talison Break Fee, without withholding or set off,
in the following circumstances:

 

(i)                                                     if a Competing Proposal
is announced or made before the date on which this agreement is terminated and,
within 6 months from the date of this agreement, the Third Party who announced
or made the Competing Proposal or any Associate of that Third Party:

 

A.                                                    completes, implements or
consummates that Competing Proposal (or a Competing Proposal which is
substantially similar); or

 

B.                                                    without limiting clause
10.2(a)(i)A, acquires (either alone or in aggregate) a Relevant Interest in more
than 50% of Talison Shares or Control of Talison;

 

(ii)                                                  if any Talison Director
changes, withdraws or modifies their Recommendation or Voting Intention, except
where the Independent Expert concludes (either in its initial report or any
subsequent update of its report, and other than because of the existence of a
Superior Proposal) that the Scheme is not in the best interests of Talison
Shareholders;

 

(iii)                                               if, before the date on which
this agreement is terminated, any Talison Director recommends that Talison
Shareholders accept, vote in favour of or otherwise support a Competing Proposal
which is announced or made after the date of this agreement;

 

(iv)                                              if Bidder has terminated this
agreement pursuant to any of clauses 15.2(b)(i) to 15.2(b)(iii); or

 

(v)                                                 a Prescribed Occurrence
occurs which, alone or together with one or more other Prescribed Occurrences or
breaches of this agreement by Talison, represents a material breach of this
agreement or would be likely to have a material adverse effect on the business
of the Talison Group.

 

(b)                                                  Talison must pay Bidder the
Talison Break Fee without withholding or set off within 5 Business Days of
receiving a written demand from Bidder for payment of the Talison Break Fee made
after the occurrence of an event referred to in clause 10.2(a), failing which
the due amount shall be subject to interest payable by Talison to Bidder at a
rate of 3% above the Reserve Bank of Australia’s published overnight cash rate,
from the 10th Business day after Bidder’s demand was made, until payment of the
amount referred to in clause 10.2(a) (plus interest payable under this clause)
has been received by Bidder.

 

10.3                                        Talison Break Fee not payable

 

Despite any other term of this agreement:

 

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(a)                                                  the Talison Break Fee will
not be payable to Bidder if the Scheme becomes Effective; and

 

(b)                                                  the Talison Break Fee is
only payable once.

 

10.4                                        Compliance with law

 

If a court or the Australian Takeovers Panel determines that any part of the
Talison Break Fee:

 

(a)                                                  constitutes, or would if
performed constitute:

 

(i)                                                     a breach of the
fiduciary or statutory duties of the Talison Board; or

 

(ii)                                                  unacceptable circumstances
within the meaning of the Corporations Act; or

 

(b)                                                  would, if paid, be unlawful
for any reason,

 

then Talison will not be obliged to pay such part of the Talison Break Fee and,
if the Talison Break Fee has already been paid, then Bidder must within 5
Business Days after receiving written demand from Talison refund that part of
the Talison Break Fee to Talison.

 

10.5                                        Other claims

 

The maximum aggregate amount which Talison is required to pay in relation to a
breach of this agreement is the Talison Break Fee, and in no event will the
aggregate liability of Talison under or in connection with this agreement exceed
the Talison Break Fee.

 

11.                                               Bidder Break Fee

 

11.1                                        Payment of costs

 

(a)                                                  Talison and Bidder believe
that the Scheme and the Transaction will provide benefits to Talison and its
shareholders, and Bidder, and acknowledge that if the parties enter into this
agreement and the Scheme and the Transaction are subsequently not implemented,
Talison will incur significant costs.

 

(b)                                                  In the circumstances
referred to in clause 11.1(a):

 

(i)                                                     Talison requested that
provision be made for the Bidder Break Fee, without which it would not have
entered into this agreement; and

 

(ii)                                                  the Bidder Board believes
that it is appropriate to agree to the Bidder Break Fee in order to secure
Talison’s participation.

 

(c)                                                   Talison and Bidder
acknowledge that the Bidder Break Fee is intended by the parties to be strictly
compensatory in nature and represents a reasonable estimate of the compensation
so as to compensate Talison for the following:

 

(i)                                                     advisory costs
(including costs of advisors);

 

(ii)                                                  costs of management and
directors’ time;

 

(iii)                                               out of pocket expenses; and

 

(iv)                                              reasonable opportunity costs
in pursuing the Transaction or not pursuing other alternative acquisitions or
strategic initiatives.

 

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11.2                                        Bidder Break Fee payable

 

(a)                                                  Subject to clause 11.3,
Bidder must pay Talison the Bidder Break Fee, without withholding or set off, if
Bidder is in material breach of this agreement (including a Bidder Warranty) and
the circumstances giving rise to the breach have not been remedied by the end of
the period specified in clause 15.3(a)(ii)A and Talison terminates this
agreement as a result.

 

(b)                                                  Bidder must pay Talison the
Bidder Break Fee without withholding or set off within 5 Business Days of
receiving a written demand from Talison for payment of the Bidder Break Fee made
in the circumstances contemplated in clause 11.2(a) , failing which, the due
amount shall be subject to interest payable by Bidder to Talison at a rate of 3%
above the Reserve Bank of Australia’s published overnight cash rate, from the
10th Business day after Talison’s demand was made, until payment of the amount
referred to in clause 11.2(a) (plus interest payable under this clause) has been
received by Talison.

 

11.3                                       Bidder Break Fee not payable

 

Despite any other term of this agreement:

 

(a)                                                  the Bidder Break Fee will
not be payable to Talison if the Scheme becomes Effective; and

 

(b)                                                  the Bidder Break Fee is
only payable once.

 

11.4                                        Compliance with law

 

If a court determines that any part of the Bidder Break Fee would, if paid, be
unlawful for any reason, then Bidder will not be obliged to pay such part of the
Bidder Break Fee and, if the Bidder Break Fee has already been paid, then
Talison must within 5 Business Days after receiving written demand from Bidder
refund that part of the Bidder Break Fee to Bidder.

 

11.5                                        Other claims

 

The maximum aggregate amount which Bidder is required to pay in relation to a
breach of this agreement is the Bidder Break Fee, and in no event will the
aggregate liability of Bidder under or in connection with this agreement exceed
the Bidder Break Fee.

 

12.                                               Liability of directors and
employees

 

12.1                                        Liability of directors and employees

 

Each party releases all rights against, and agrees that it will not make any
claim against, each past or present director and employee of the other party in
relation to information provided to the first party or otherwise in relation to
the transactions contemplated by this agreement to the extent that such director
or employee has acted in good faith and has not engaged in wilful misconduct.

 

12.2                                        Directors’ and officers’ insurance

 

Subject to the Scheme becoming Effective, Talison must by no later than the
Implementation Date arrange for the cover provided under the Policy to be
amended so as to provide run off cover in accordance with the terms of the
Policy for a 7 year period from the end of the term of the Policy, and pay all
premiums required so as to ensure that insurance cover is provided under the
Policy on those terms until that date.

 

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12.3                                        Obligations in relation to
directors’ and officers’ insurance

 

From the Implementation Date, Talison must not:

 

(a)                                                  vary or cancel the Policy;
or

 

(b)                                                  unless required under the
Policy, commit any act or omission that may prejudice any claim by a director or
officer of Talison under the Policy as extended pursuant to clause 12.2 above.

 

13.                                               Representations, warranties
and indemnities

 

13.1                                        Representations and warranties by
Bidder

 

Bidder represents and warrants to Talison (on its own behalf and separately as
trustee for each of the Talison Indemnified Parties):

 

(a)                                                  on each date from the date
of this agreement until (and including) the Second Court Date that:

 

(i)                                                     it is a company properly
incorporated and validly existing under the laws of its place of incorporation;

 

(ii)                                                  Bidder has full corporate
power and lawful authority to execute and deliver the Transaction Documents to
which Bidder is party and to perform or cause to be performed its obligations
under such Transaction Documents;

 

(iii)                                               the Transaction Documents to
which Bidder is party constitute legal, valid and binding obligations on it and
do not conflict with or result in a breach of or default under:

 

A.                                                    the constitution or
equivalent constituent documents of Bidder or any of its Subsidiaries; or

 

B.                                                    any writ, order or
injunction, judgment, law, rule or regulation to which Bidder or any of its
Subsidiaries is party, or by which Bidder or any of its Subsidiaries is bound;
and

 

(iv)                                              other than as expressly
contemplated by clause 3, no regulatory approvals are required to be obtained by
Bidder Group in order for it to execute and perform its obligations under the
Transaction Documents to which it is a party;

 

(b)                                                  on each date from the date
of this agreement until (and including) the Implementation Date that none of the
following events has occurred in relation to Bidder:

 

(i)                                                     a receiver, receiver and
manager, liquidator, provisional liquidator, administrator or trustee is
appointed in respect of Bidder or any of its assets or anyone else is appointed
who (whether or not as agent for Bidder) is in possession, or has control, of
any of the Bidder’s assets for the purpose of enforcing an Encumbrance;

 

(ii)                                                  an application is made to
court or a resolution is passed or an order is made for the winding up or
dissolution of Bidder;

 

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(iii)                                               Bidder proposes or takes any
steps to implement a scheme of arrangement or other compromise or arrangement
with its creditors or any class of them; or

 

(iv)                                              Bidder stops paying its debts
when they become due or is declared or taken under any applicable Law to be
insolvent or Bidder’s board of directors resolves that it is, or is likely to
become at some future time, insolvent.

 

(c)                                                   on the First Court Date
and the Second Court Date:

 

(i)                                                     the Bidder Information
has been prepared (other than to the extent that it consists of information
relating to the Talison Group that was provided by or on behalf of Talison) and
included in the Explanatory Memorandum in good faith and on the understanding
that Talison and its directors, officers and employees have relied on that
information for the purposes of considering and approving the Talison
Information in the Explanatory Memorandum and that the Independent Expert has
relied on the information for the purposes of preparing the Independent Expert’s
Report;

 

(ii)                                                  the Bidder Information
complies in all material respects with relevant Laws (including the Corporations
Act, relevant Regulatory Guides and Canadian Securities Law), and includes all
information regarding Bidder, its Related Bodies Corporate and the Scheme
Consideration and Option Scheme Consideration that is required by the
Corporations Act, Regulatory Guides and Canadian Securities Law to be included
in the Explanatory Memorandum, including all the information that would be
required under sub-sections 636(1)(c), (f), (h), (i), (k), (l) and (m) of the
Corporations Act to be included in a bidder’s statement if Bidder Subsidiary
were offering the Scheme Consideration and Option Scheme Consideration as
consideration under a takeover bid;

 

(iii)                                               the Bidder Information
(other than to the extent that it consists of information relating to the
Talison Group that was provided by or on behalf of Talison, or has been
extracted from announcements made by Talison to the public regarding the Talison
Group) in the form and context in which it appears in the Explanatory Memorandum
does not contain a material misrepresentation or is not otherwise misleading or
deceptive in any material respect and does not contain any material omission;

 

(iv)                                              Bidder has complied in all
material respects with its obligations under clause 4.2(g);

 

(v)                                                 as at 8:00 am on the Second
Court Date, Bidder will have sufficient cash on its balance sheet, or financial
commitments available to it on an unconditional basis (other than conditions
relating to the approval of the Court and related procedural matters or
documentary requirements which, by their terms or nature, can only be satisfied
or performed after the Second Court Date), to ensure that the Scheme
Consideration and Option Scheme Consideration is paid to Scheme Shareholders and
Scheme Optionholders (as applicable) in accordance with the terms of this
agreement, the Scheme, the Option Scheme, the Deed Poll and the Option Deed Poll
(as applicable); and

 

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(vi)                                              Bidder will have available to
it on the Implementation Date sufficient cash amounts (including debt
facilities) to ensure that the Scheme Consideration and Option Scheme
Consideration is paid to Scheme Shareholders and Scheme Optionholders (as
applicable) in accordance with the terms of this agreement, the Scheme, the
Option Scheme, the Deed Poll and the Option Deed Poll (as applicable); and

 

(d)                                                  no shareholder approval of
Bidder is required to complete the Transaction.

 

13.2                                        Qualification of Bidder Warranties

 

The Bidder Warranties and the indemnity under clause 13.3, are qualified and
Bidder shall not be in breach of a Bidder Warranty to the extent that the fact,
matter, circumstance or act giving rise to the breach of a Bidder Warranty:

 

(a)                                                  has been fairly disclosed
in writing to Talison prior to entry into this agreement;

 

(b)                                                  was required to be done by
Bidder under the Transaction Documents; or

 

(c)                                                   was approved by Talison in
writing (prior to the fact, matter, circumstance or act occurring).

 

13.3                                        Bidder indemnity

 

(a)                                                  Bidder acknowledges that in
entering into this agreement Talison and the Talison Indemnified Parties have
relied on the Bidder Warranties.

 

(b)                                                  Subject to clause 11.5,
Bidder indemnifies Talison (on its own behalf and separately as trustee for each
of the Talison Indemnified Parties) against any loss suffered or incurred by
reason of any breach of any of the Bidder Warranties.

 

13.4                                        Representations and warranties by
Talison

 

Talison represents and warrants to Bidder (on its own behalf and separately as
trustee for each of the Bidder Indemnified Parties):

 

(a)                                                  on each date from the date
of this agreement until (and including) the Second Court Date:

 

(i)                                                     it is a company properly
incorporated and validly existing under the laws of its place of incorporation;

 

(ii)                                                  the execution and delivery
by Talison of the Transaction Documents to which Talison is party has been
properly authorised by all necessary corporate action and Talison has full
corporate power and lawful authority to execute and deliver such Transaction
Documents and to perform or cause to be performed its obligations under such
Transaction Documents;

 

(iii)                                               the Transaction Documents to
which Talison is party constitute legal, valid and binding obligations on it and
do not conflict with or result in a breach of or default under:

 

A.                                                    the constitution or
equivalent constituent documents of Talison or any of its Subsidiaries; or

 

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B.                                                    any writ, order or
injunction, judgment, law, rule or regulation to which Talison or any of its
Subsidiaries is party, or by which Talison or any of its Subsidiaries is bound; 
and

 

(iv)                                              other than as expressly
contemplated by clause 3, no shareholder or Regulatory Authority approvals are
required to be obtained by the Talison Group in order for Talison to execute and
perform its obligations under the Transaction Documents to which it is a party;

 

(b)                                                  that as at the date of this
agreement, there are 112,446,801 Talison Shares on issue, 6,382,536 Talison
Options having the exercise prices set out in Schedule 2 (Current Talison
Options) on issue and 246,878 Talison Warrants (Current Talison Warrants) on
issue and Talison has not issued (and is not required to issue) any other
securities, instruments or rights which are still outstanding (or may become
outstanding) and which may convert into Talison securities other than in
connection with the satisfaction of Current Talison Options or Current Talison
Warrants;

 

(c)                                                   on the First Court Date
and the Second Court Date:

 

(i)                                                     the Talison Information
has been prepared and included in the Explanatory Memorandum in good faith;

 

(ii)                                                  the Talison Information in
the Explanatory Memorandum does not contain a statement which is misleading or
deceptive in any material respect and does not contain any material omission;

 

(iii)                                               the Talison Information
complies in all material respects with relevant laws (including the Corporations
Act, relevant Regulatory Guides and Canadian Securities Laws); and

 

(iv)                                              Talison has complied in all
material respects with its obligations under clause 4.1(q);

 

(d)                                                  on the date of this
agreement, the First Court Date, the Scheme Meeting and the Second Court Date:

 

(i)                                                     following the making by
Talison of an announcement to the public pursuant to clause 8.3 and assuming the
filing of a material change report within 10 days of this agreement, Talison has
complied in all material respects with its disclosure obligations under Canadian
Securities Laws;

 

(ii)                                                  all documents filed by
Talison with SEDAR are complete and accurate and not misleading in any material
respect and no amendments have been made to any agreements filed with SEDAR
other than as disclosed in the Due Diligence Materials;

 

(iii)                                               Talison has not
intentionally withheld from Bidder any information in relation to the Talison
Group or its assets which Talison knows is material to the value of Talison; and

 

(iv)                                              the Due Diligence Materials
have been provided to Bidder in good faith and are accurate in all material
respects,

 

(e)                                                   in the period between the
date of this agreement and the Second Court Date, no member of the Talison
Group:

 

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(i)                                                     has incurred any
indebtedness under any bank facility or other arrangement providing financial
accommodation of any description other than under existing facilities in place
at the date of this agreement or leasing of cars or equipment in the ordinary
course of the business; and

 

(ii)                                                  other than as a
consequence of the Transaction, no event has occurred which would entitle any
counterparties to any Talison bank facility to require the repayment of any
borrowings of the Talison Group which are repayable on demand or require any
borrowings of the Talison Group to be repaid before their due date for any
reason;

 

(f)                                                    on the date of this
agreement, Talison’s draft management accounts for the 12 months ended 30 June
2012 in the form disclosed to Bidder prior to the date of this agreement are
materially accurate and not misleading in any material respect and have been
prepared in accordance with AIFRS;

 

(g)                                                   on the date of this
agreement, the Trustee:

 

(i)                                                     is the registered holder
of 4,299,367 Talison Shares (LTIP Shares) and holds all of the LTIP Shares as
trustee of the LTIP Trust and on and subject to the terms of the Trust Deed;

 

(ii)                                                  will not, at any time
prior to implementation of the Scheme:

 

A.                                                    in any way deal or attempt
or purport to deal in or with any Trust Shares except for dealings involving the
transfer of Trust Shares pursuant to clause 5.1 of the Trust Deed; or

 

B.                                                    directly or indirectly
acquire, apply or subscribe for or agree to acquire, apply or subscribe for any
Talison Shares;

 

(h)                                                  no amendments to the Trust
Deed will be made or agreed at any time prior to the Implementation Date;

 

(i)                                                      to the best of
Talison’s knowledge, as at the date of this agreement and each date up to the
Implementation Date, no member of the Talison Group or any of their Officers or
agents have directly or indirectly taken any action that would violate, or cause
the Bidder to violate, the United States Foreign Corrupt Practices Act of 1977
(FCPA), if applicable, or any other anti-corruption or anti-bribery law or
regulations applicable to them (collectively with the FCPA, the Anti-corruption
Laws) and there has been no investigation or request for information from a
Talison Group member by any Regulatory Authority in relation to Anti-corruption
Laws; and

 

(j)                                                     to the best of Talison’s
knowledge, as at the date of this agreement and each date up to the
Implementation Date, no member of the Talison Group or any of their Officers or
agents have directly taken any action that would make the Talison Group or any
of their Representatives subject to any sanctions administered by the Office of
Foreign Assets Control of the United States Department of the Treasury (OFAC)
and there has been no investigation or request for information from a Talison
Group member by OFAC.

 

13.5                                        Qualification of Talison Warranties

 

The Talison Warranties and the indemnity under clause 13.6, are qualified and
Talison shall not be in breach of a Talison Warranty to the extent that the
fact, matter, circumstance or act giving rise to the breach of a Talison
Warranty:

 

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(a)                                                  has been fairly disclosed
in the Due Diligence Material or Talison’s public filings with SEDAR regarding
the Talison Group prior to entry into this agreement;

 

(b)                                                  was required to be done by
Talison under the Transaction Documents; or

 

(c)                                                   was approved by Bidder in
writing (prior to the fact, matter, circumstance or act occurring).

 

13.6                                        Talison indemnity

 

(a)                                                  Talison acknowledges that
in entering into this agreement Bidder and the Bidder Indemnified Parties have
relied on the Talison Warranties.

 

(b)                                                  Subject to clause 10.5,
Talison indemnifies Bidder (on its own behalf and separately as trustee for each
of the Bidder Indemnified Parties) against any loss suffered or incurred by
reason of any breach of any of the Talison Warranties.

 

13.7                                        Notifications

 

Each party will promptly advise the other in writing if it becomes aware of any
fact, matter or circumstance which constitutes or may constitute a breach of any
of the representations or warranties given by it under this clause 13.

 

13.8                                        Status of representations and
warranties

 

Each representation and warranty in this clause 13:

 

(a)                                                  is severable;

 

(b)                                                  subject to clause 13.8(c),
will survive the termination of this agreement;

 

(c)                                                   will expire and be
terminated on the Implementation Date; and

 

(d)                                                  is given with the intent
that liability thereunder will not be confined to breaches which are discovered
prior to the date of termination of this agreement.

 

13.9                                        Status and enforcement of
indemnities

 

(a)                                                  Each indemnity in this
agreement is a continuing obligation, separate and independent from the other
obligations of the parties, and survives termination, completion or expiration
of this agreement.

 

(b)                                                  It is not necessary for a
party to incur expense or to make any payment before enforcing a right of
indemnity conferred by this agreement.

 

13.10                                 Acknowledgements

 

Each party acknowledges that, subject only to the rights which that party has
under clause 10 or clause 11 (as appropriate), any breach of any Talison
Warranty or any Bidder Warranty (as appropriate) will only give that party a
right to terminate this agreement in accordance with clause 15.2 or clause 15.3
(as appropriate) and will not give rise to any other right to make a claim,
demand or cause of action against the other party in respect of a breach of a
Talison Warranty or a Bidder Warranty (as appropriate) for damages or loss under
the law of contract, tort or otherwise and that party unconditionally and
irrevocably waives any right which it may have otherwise had to make such claim,
demand or cause of action.

 

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14.                Confidentiality and communications

 

14.1             Confidentiality Deed

 

(a)                 Each party acknowledges and agrees that it continues to be
bound by the Confidentiality Deed after the date of this agreement.

 

(b)                 The parties acknowledge and agree that the terms of this
agreement will prevail over the terms of the Confidentiality Deed to the extent
of any inconsistency.

 

14.2             Survival of obligations

 

The rights and obligations of the parties under the Confidentiality Deed survive
termination of this agreement.

 

14.3             Disclosure on termination of agreement

 

The parties agree that, if this agreement is terminated under clause 15, any
party may disclose:

 

(a)                 the fact that this agreement has been terminated, where such
disclosure is required by the relevant listing rules or is in the reasonable
opinion of that party required to ensure that the market in its securities is
properly informed; and

 

(b)                 the fact that this agreement has been terminated to ASIC.

 

14.4             Required disclosure

 

Nothing in this agreement or the Confidentiality Deed prevents Bidder from
making a public announcement in relation to the Scheme and/or Option Scheme if
disclosure of that information is required to be made by law or the rules of any
Regulatory Authority provided that the Bidder will use its best endeavours (to
the extent permitted by law) to provide a draft of any announcement to Talison
prior to its release.

 

15.                Termination

 

15.1             Limited termination events

 

This agreement may only be terminated by either party in the circumstances
contemplated by clauses 15.2 and 15.3, or if the parties agree in writing to
terminate this agreement.

 

15.2             Termination by Bidder

 

Bidder may terminate this agreement at any time before 8.00 am on the Second
Court Date:

 

(a)                 in accordance with clause 3.7; or

 

(b)                 by notice in writing to Talison if:

 

(i)                  Talison is in material breach of any clause of this
agreement (other than clause 8 or the Talison Warranties), provided that Bidder
is only entitled to terminate if it has given notice to Talison setting out the
relevant circumstances and stating an intention to terminate and the relevant
circumstances have continued to exist 5 Business Days (or any shorter period
ending at 5.00 pm on the day one Business Day before the Second Court Date) from
the time such notice is received by Talison;

 

(ii)                 Talison is in breach of clause 8;

 

41

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(iii)                                               there is a material breach
of any of the Talison Warranties;

 

(iv)                                              a Prescribed Occurrence
occurs;

 

(v)                                                 any Talison Director
publicly changes or withdraws their Recommendation or Voting Intention or
publicly recommends a Competing Proposal, for any reason, whether or not
permitted to do so under this agreement; or

 

(vi)                                              if the Scheme has not become
Effective by the End Date, or becomes incapable, for any reason of becoming
Effective by the End Date.

 

15.3             Termination by Talison

 

Talison may terminate this agreement:

 

(a)                 at any time before 8.00 am on the Second Court Date:

 

(i)                  in accordance with clause 3.7; or

 

(ii)                 by notice in writing to Bidder if:

 

A.                                                    Bidder is in material
breach of any clause of this agreement (other than the Bidder Warranties)
provided that Talison is only entitled to terminate if it has given notice to
Bidder setting out the relevant circumstances and stating an intention to
terminate and the relevant circumstances have continued to exist 5 Business Days
(or any shorter period ending at 5.00 pm on the day one Business Day before the
Second Court Date) from the time such notice is received by Bidder; or

 

B.                                                    if a majority of the
Talison Board publicly changes or withdraws their Recommendation or Voting
Intention or publicly recommends a Superior Proposal, but only where such
change, withdrawal or recommendation occurs or is made in accordance with the
rights and obligations of Talison and the Talison Board pursuant to the terms of
this agreement; or

 

C.                                                    there is a material breach
of any of the Bidder Warranties.

 

(b)                 at any time if there is a material breach of the Bidder
Warranty in clause 13.1(c)(v) and 13.1(c)(vi).

 

(c)                 if the Scheme has not become Effective by the End Date, or
becomes incapable, for any reason of becoming Effective by the End Date

 

15.4             Effect of termination

 

If this agreement is terminated:

 

(a)                 the provisions of this agreement shall cease to have effect
except for the provisions of clauses 1, 10, 11, 12.1, 13.10, 14, 15.4, 15.5 and
16 to 20 (inclusive) which will survive termination; and

 

(b)                 each party retains the rights it has against the others in
respect of any breach of this agreement occurring before termination.

 

42

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15.5             Remedies

 

(a)                 The parties acknowledge that damages may not be a sufficient
remedy for breach of this agreement.  Specific performance, injunctive relief or
any other remedies which would otherwise be available in equity or law are
available as a remedy for a breach or threatened breach of this agreement by any
party, notwithstanding the ability of the other party to terminate this
agreement or seek damages for such a breach or threatened breach or to demand
payment of a break fee except in relation to any breach or threatened breach of
the warranties in clauses 13.1(c)(v) and 13.1(c)(vi).

 

(b)                 Neither party (Restrained Party) will be considered to be in
breach of this agreement (including for the purposes of clauses 15.2(b)(i),
15.2(b)(ii) or 15.3(a)(ii)A), and no party may make a claim against the
Restrained Party for breach of this agreement, in circumstances where the
Restrained Party is prevented by an order of an Australian court from performing
an obligation under this agreement.

 

16.                Notices

 

16.1             How notice to be given

 

Each communication (including each notice, consent, approval, request and
demand) under or in connection with this agreement:

 

(a)                 may be given by personal service, post or facsimile or
email;

 

(b)                 must be in writing;

 

(c)                 must be addressed as follows (or as otherwise notified by
that party to each other party from time to time):

 

(i)

 

if to Talison:

Talison Lithium Limited

 

 

 

 

 

 

Address:

Level 4, 37 St Georges Terrace

 

 

 

Perth, Western Australia 6000

 

 

 

 

 

 

Fax number:

+61 8 9202 1144;

 

 

 

 

 

 

Attention:

Chief Executive Officer

 

 

 

 

 

 

Email:

Peter.Oliver@talisonlithium.com

 

 

 

 

 

 

with a copy in each case to:

 

 

 

 

 

 

Email:

hlewis@claytonutz.com

 

 

 

 

(ii)

 

if to Bidder:

Rockwood Holdings, Inc.

 

 

 

 

 

 

Address:

100 Overlook Center

 

 

 

Princeton, New Jersey, 08540

 

 

 

United States of America

 

 

 

 

 

 

Email:

triordan@roscksp.com; rzatta@rocksp.com;

 

 

 

 

 

 

Attention:

Attention: Thomas J. Riordan

 

 

 

 

 

 

with a copy in each case to:

 

43

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

 

 

 

Email:

pcook@gtlaw.com.au; dclee@gtlaw.com.au

 

(d)                 (in the case of personal service, post or facsimile) must be
signed by the party making it or (on that party’s behalf) by the solicitor for,
or any attorney, director, secretary or authorised agent of, that party; and

 

(e)                 (in the case of email) must be in pdf or other format that
is a scanned image of the original of the communication, including a handwritten
signature, and be attached to an email that states that the attachment is a
communication under this agreement; and

 

(f)                 must be delivered by hand or posted by prepaid post to the
address, sent by fax to the number, or sent by email to the email address, of
the addressee, in accordance with this clause 16.1.

 

16.2             When notice taken to be received

 

Each communication (including each notice, consent, approval, request and
demand) under or in connection with this agreement is taken to be received by
the addressee:

 

(a)                 (in the case of prepaid post sent to an address in the same
country) on the third day after the date of posting;

 

(b)                 (in the case of prepaid post sent to an address in another
country) on the fifth day after the date of posting by airmail;

 

(c)                 (in the case of fax) at the time in the place to which it is
sent equivalent to the time shown on the transmission confirmation report
produced by the fax machine from which it was sent; and

 

(d)                 (in the case of delivery by hand) on delivery; and

 

(e)                 (in the case of email) unless the party sending the email
knows or reasonably ought to suspect that the email and the attached
communication were not delivered to the addressee’s domain specified in the
email address notified for the purposes of clause 16.1, 24 hours after the email
was sent,

 

but if the communication would otherwise be taken to be received on a day that
is not a working day or after 5.00 pm, it is taken to be received at 9.00 am on
the next working day (“working day” meaning a day that is not a Saturday, Sunday
or public holiday and on which banks are open for business generally, in the
place to which the communication is posted, sent or delivered).

 

17.                GST

 

17.1             Interpretation

 

(a)                 Except where the context suggests otherwise, and subject to
clause 17.1(b), terms used in this clause have the meanings given to those terms
by the A New Tax System (Goods and Services Tax) Act 1999 (as amended from time
to time).

 

(b)                 “Input tax credit” has the meaning given by the A New Tax
System (Goods and Services Tax) Act 1999 and a reference to an input tax credit
entitlement of an entity includes an input tax credit for an acquisition made by
that entity but to which another member of the same GST group is entitled.

 

44

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

 

(c)                 Any part of a supply that is treated as a separate supply
for GST purposes (including attributing GST payable to tax periods) will be
treated as a separate supply for the purposes of this clause.

 

(d)                 Any consideration for a supply that is specified to be
inclusive of GST must not be taken into account in calculating the GST payable
in relation to that supply for the purpose of this clause.

 

17.2             Reimbursements and similar payments

 

Any payment or reimbursement required to be made under this agreement that is
calculated by reference to a cost, expense, or other amount paid or incurred
will be limited to the total cost, expense or amount less the amount of any
input tax credit to which an entity is entitled for the acquisition to which the
cost, expense or amount relates.

 

17.3             GST payable

 

(a)                 If GST is payable in relation to a taxable supply made under
or in connection with this agreement then any party (Recipient) that is required
to provide consideration to another party (Supplier) for that supply must,
subject to clause 17.1(d), pay an additional amount to the Supplier equal to the
amount of that GST at the same times as other consideration is to be provided
for that supply.

 

(b)                 No payment of any amount pursuant to clause 17.3(a) is
required until the Supplier has provided a valid tax invoice to the Recipient.

 

(c)                 Where additional amounts are payable between parties to this
agreement pursuant to clause 17.3(a), amounts so payable, to the extent they are
equivalent in amount, shall be set off against each other as if paid and each
party shall be obliged only to provide the tax invoice referred to in
clause 17.3(b) no later than the time at which any consideration is to be first
provided for that supply.

 

(d)                 If the GST payable in relation to a supply made under or in
connection with this agreement varies from the additional amount paid by the
Recipient under clause 17.3(a) then the Supplier must promptly issue an
adjustment note to the Recipient and will provide a corresponding refund or
credit to, or will be entitled to receive the amount of that variation from, the
Recipient.  Any payment, credit or refund under this paragraph is deemed to be a
payment, credit or refund of the additional amount payable under clause 17.3(a).

 

18.                Entire agreement

 

The Transaction Documents and the Confidentiality Deed constitute the entire
agreement between the parties in relation to their subject matter and supersede
all previous agreements and understandings between the parties in relation to
their subject matter.

 

19.                General

 

19.1             No representation or reliance

 

(a)                 Each party acknowledges that no party (nor any person acting
on its behalf) has made any representation or other inducement to it to enter
into this agreement, except for representations or inducements expressly set out
in this agreement and (to the maximum extent permitted by law) all other
representations, warranties and conditions implied by statute or otherwise in
relation to any matter relating to this

 

45

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

 

agreement, the circumstances surrounding the parties’ entry into it and the
transactions contemplated by it are expressly excluded.

 

(b)                 Each party acknowledges and confirms that it does not enter
into this agreement in reliance on any representation or other inducement by or
on behalf of any other party, except for any representation or inducement
expressly set out in this agreement.

 

19.2                                        Amendments

 

This agreement may only be varied by a document signed by or on behalf of each
party.

 

19.3                                        Assignment

 

A party may not assign, novate or otherwise transfer any of its rights or
obligations under this agreement without the prior written consent of the other
party.

 

19.4                                        Consents

 

Unless this agreement expressly provides otherwise, a consent under this
agreement may be given or withheld in the absolute discretion of the party
entitled to give the consent and to be effective must be given in writing.

 

19.5                                        Costs

 

Except as otherwise provided in this agreement, each party must pay its own
costs and expenses in connection with negotiating, preparing, executing and
performing each Transaction Document.

 

19.6                                        Counterparts

 

This agreement may be executed in any number of counterparts and by the parties
on separate counterparts.  Each counterpart constitutes an original of this
agreement, and all together constitute one agreement.

 

19.7                                        Further acts and documents

 

Each party must promptly do all further acts and execute and deliver all further
documents (in form and content reasonably satisfactory to that party) required
by law or reasonably requested by another party to give effect to this
agreement.

 

19.8                                       No merger

 

A party’s rights and obligations do not merge on completion of any transaction
under this agreement.

 

19.9                                        Severance

 

If any provision or part of a provision of this agreement is held or found to be
void, invalid or otherwise unenforceable (whether in respect of a particular
party or generally), it will be deemed to be severed to the extent that it is
void or to the extent of violability, invalidity or unenforceability, but the
remainder of that provision will remain in full force and effect.

 

19.10                                 Waivers

 

Without limiting any other provision of this agreement, the parties agree that:

 

46

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

 

(a)                 failure to exercise or enforce, or a delay in exercising or
enforcing, or the partial exercise or enforcement of, a right, power or remedy
provided by law or under this agreement by a party does not preclude, or operate
as a waiver of, the exercise or enforcement, or further exercise or enforcement,
of that or any other right, power or remedy provided by law or under this
agreement;

 

(b)                 a waiver given by a party under this agreement is only
effective and binding on that party if it is given or confirmed in writing by
that party; and

 

(c)                 no waiver of a breach of a term of this agreement operates
as a waiver of another breach of that term or of a breach of any other term of
this agreement.

 

20.                                               Governing law, jurisdiction
and service of process

 

20.1                                        Governing law

 

This agreement is governed by the law applying in Western Australia.

 

20.2                                        Jurisdiction

 

Each party irrevocably:

 

(a)                 submits to the non exclusive jurisdiction of the courts of
Western Australia, Commonwealth courts having jurisdiction in that state and the
courts competent to determine appeals from those courts, with respect to any
proceedings that may be brought at any time relating to this agreement; and

 

(b)                 waives any objection it may now or in the future have to the
venue of any proceedings, and any claim it may now or in the future have that
any proceedings have been brought in an inconvenient forum, if that venue falls
within clause 20.2(a).

 

47

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Schedule 1

Timetable

 

Event

 

Date

First Court Date

 

September 2012

Scheme Meeting and Option Meeting

 

October 2012

Second Court Date

 

November 2012

Effective Date

 

November 2012

Implementation Date

 

November 2012

 

48

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Schedule 2

Talison Options

 

Exercise Price

 

Number of Talison Options

 

C$

0.57

 

124,555

 

C$

1.69

 

320,283

 

C$

1.86

 

9,889

 

C$

3.50

 

5,404,809

 

C$

3.65

 

239,000

 

C$

3.79

 

50,000

 

C$

3.82

 

70,000

 

C$

4.13

 

147,000

 

C$

4.60

 

17,000

 

Total

 

6,382,536

 

 

49

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

 

Executed as an agreement.

 

 

Executed by
Talison Lithium Limited
ACN 140 122 078 in accordance with section 127 of the Corporations Act 2001
(Cth):

 

 

 

 

 

/s/ Peter Robinson

 

/s/ Peter Oliver

Signature of director

 

Signature of company secretary/director

 

 

 

Peter Charles Robinson

 

Peter Oliver

Full name of director

 

Full name of director

 

 

Signed for and on behalf of
Rockwood Holdings, Inc. by its duly authorised signatory in the presence of:

 

 

 

 

 

/s/ Peter Oliver

 

/s/ Seifi Ghasemi

Signature of witness

 

Signature of authorised signatory

 

 

 

Peter R Oliver

 

Seifi Ghasemi

Full name of witness

 

Full name of authorised signatory

 

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

 

Annexure A
Scheme

 

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

 

[g190231kg13i001.jpg]

 

Scheme of Arrangement

Pursuant to section 411 of the Corporations Act

 

Talison Lithium Limited

 

Talison

 

The holders of fully paid ordinary shares in
Talison Lithium Limited

 

Clayton Utz

Lawyers

Level 27 QV.1  250 St Georges Terrace Perth WA 6000 Australia

GPO Box P1214  Perth WA 6844

T +61 8 9426 8000  F +61 8 9481 3095

 

www.claytonutz.com

 

Our reference 60067/17196/80123998

 

ii

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

 

Contents

 

 

 

 

 

1.

Definitions and interpretation

i

 

 

 

 

 

1.1

Definitions

i

 

1.2

Interpretation

iii

 

1.3

Business Day

iv

 

 

 

 

2.

Conditions

iv

 

 

 

 

 

2.1

Conditions to this Scheme

iv

 

2.2

Certificates in relation to Conditions

iv

 

2.3

Termination of Scheme Implementation Agreement

v

 

 

 

 

3.

Scheme

v

 

 

 

 

 

3.1

Effective Date of Scheme

v

 

3.2

End Date

v

 

 

 

 

4.

Implementation of Scheme

v

 

 

 

 

 

4.1

Lodgement

v

 

4.2

Transfer of Scheme Shares

v

 

4.3

Provision of Scheme Consideration

vi

 

 

 

 

5.

Scheme Consideration

vi

 

 

 

 

 

5.1

Satisfaction of payment obligation

vi

 

5.2

Payment to Scheme Shareholders

vi

 

5.3

Joint holders

vii

 

5.4

Unclaimed moneys

vii

 

 

 

 

6.

Dealings in Talison Shares

vii

 

 

 

 

 

6.1

Determination of Scheme Shareholders

vii

 

6.2

Talison Share Register

vii

 

6.3

Information to be made available to Bidder

vii

 

6.4

Effect of share certificates and holding statements

viii

 

6.5

No disposals after Record Date

viii

 

6.6

Listing and trading of Talison Shares

viii

 

 

 

 

7.

General provisions

viii

 

 

 

 

 

7.1

Effect of Scheme

viii

 

7.2

Appointment of agent and attorney

viii

 

7.3

Enforcement of Deed Poll

viii

 

7.4

Scheme Shareholders’ agreement and consent

viii

 

7.5

Transfer with clear title and warranty by Scheme Shareholders

ix

 

7.6

Title to Scheme Shares

ix

 

7.7

Appointment of BidCo as sole proxy

ix

 

7.8

Alterations or conditions

x

 

7.9

Notices

x

 

7.10

Further assurances

x

 

7.11

Stamp duty

x

 

7.12

Fees and charges

x

 

7.13

Governing law

x

 

7.14

Limitation of liability

x

 

i

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Scheme of Arrangement made under section 411 of the Corporations Act 2001
(Commonwealth)

 

Parties                              Talison Lithium Limited ACN 140 122 078 of
Level 4, 37 St Georges Terrace, Perth, Western Australia (Talison)

 

Each Scheme Shareholder

 

Recitals

 

C.                 Talison is a public company incorporated in the state of
Western Australia and is listed on the TSX.

 

D.                 Rockwood Holdings, Inc. (Bidder) is a corporation registered
in the United States of America and is listed on the NYSE.

 

E.                  [·] (BidCo) is a [·].

 

F.                  Talison and Bidder have entered into a Scheme Implementation
Agreement dated 23 August 2012 (Scheme Implementation Agreement) pursuant to
which, amongst other things, Talison has agreed to propose this Scheme to
Talison Shareholders, and each of Talison and Bidder has agreed to take certain
steps to give effect to this Scheme.

 

G.                 If this Scheme becomes Effective, then:

 

(c)                 all of the Scheme Shares will be transferred to BidCo and
the Scheme Consideration will be provided to the Scheme Shareholders in
accordance with the provisions of this Scheme; and

 

(d)                 Talison will enter the name and address of BidCo in the
Talison Share Register as the holder of all of the Scheme Shares.

 

H.                 Bidder and BidCo have entered into the Deed Poll for the
purpose of, in the case of BidCo, covenanting in favour of Scheme Shareholders
to perform the obligations contemplated of it under this Scheme, and, in the
case of Bidder, procuring that BidCo performs the obligations contemplated of it
under this Scheme.

 

1.                  Definitions and interpretation

 

1.1                Definitions

 

In this Scheme, unless the contrary intention appears or the context requires
otherwise:

 

ASIC means the Australian Securities and Investments Commission.

 

BidCo has the meaning given in Recital C.

 

Bidder has the meaning given in Recital B.

 

Business Day means a day that is not a Saturday, Sunday or public holiday and on
which banks are open for business generally in Perth, Western Australia and
Princeton, New Jersey.

 

Condition means a condition to this Scheme set out in clause 2.1.

 

Corporations Act means the Corporations Act 2001 (Cth).

 

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

 

Court means the Federal Court of Australia or such other court of competent
jurisdiction as Talison and Bidder agree in writing.

 

Deed Poll means the deed poll dated [·] executed by Bidder and BidCo in favour
of the Scheme Shareholders.

 

Effective means the coming into effect, pursuant to section 411(10) of the
Corporations Act, of the order of the Court made under section 411(4)(b) of the
Corporations Act in relation to this Scheme.

 

Effective Date means the date on which this Scheme becomes Effective.

 

Encumbrance means a mortgage, charge, pledge, lien, encumbrance, security
interest, title retention, preferential right, trust arrangement, contractual
right of set-off, or any other security agreement or arrangement in favour of
any person, whether registered or unregistered, including any Security Interest.

 

End Date means 31 January 2013 or such later date as is agreed by Talison and
Bidder in writing.

 

Implementation Date means the date which is 3 Business Days after the Record
Date, or such other date as Talison and Bidder agree in writing.

 

NYSE means the New York Stock Exchange.

 

Option Scheme means the scheme of arrangement under Part 5.1 of the Corporations
Act between Talison and the holders of options to subscribe for fully paid
ordinary shares in Talison, as contemplated in the Scheme Implementation
Agreement.

 

Record Date means:

 

(a)                 if no date is set pursuant to clause 6.1(b) of the Scheme
Implementation Agreement, 5.00 pm (Perth time) on the date which is 5 Business
Days after the Effective Date;

 

(b)                 if a time and date is set pursuant to clause 6.1(b) of the
Scheme Implementation Agreement, that time and date; or

 

(c)                 in each case, such other date agreed in writing between
Talison and Bidder.

 

Registered Address means, in relation to a Talison Shareholder, the address of
that Talison Shareholder shown in the Talison Share Register as at the Record
Date.

 

Related Body Corporate has the meaning given in section 9 of the Corporations
Act.

 

Scheme means the scheme of arrangement under Part 5.1 of the Corporations Act
between Talison and Scheme Shareholders as set out in this document, subject to
any alterations or conditions made or required by the Court pursuant to
section 411(6) of the Corporations Act and approved in writing by Bidder and
Talison.

 

Scheme Consideration means the consideration to be provided to Scheme
Shareholders under the terms of this Scheme, being C$6.50 cash for each Scheme
Share.

 

Scheme Implementation Agreement has the meaning given in Recital D.

 

Scheme Meeting means the meeting of Talison Shareholders ordered by the Court in
relation to this Scheme convened under section 411(1) of the Corporations Act.

 

Scheme Share means each Talison Share on issue as at the Record Date.

 

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

 

Scheme Shareholder means each person registered in the Talison Share Register as
the holder of Scheme Shares as at the Record Date.

 

Scheme Transfer means one or more proper instruments of transfer in respect of
the Scheme Shares for the purposes of section 1071B of the Corporations Act,
which may be or include a master transfer of all or part of the Scheme Shares.

 

Second Court Date means the first day of hearing of an application made to the
Court for an order pursuant to section 411(4)(b) of the Corporations Act
approving this Scheme or, if the hearing of such application is adjourned for
any reason, means the first day of the adjourned hearing.

 

Security Interest has the meaning given in section 12 of the Personal Property
Securities Act 2009 (Cth).

 

Talison Share means a fully paid ordinary share in the capital of Talison.

 

Talison Share Register means the register of members of Talison maintained by or
on behalf of Talison in accordance with section 168(1) of the Corporations Act.

 

Talison Shareholder means a person who is registered in the Talison Share
Register as a holder of Talison Shares.

 

TSX means the Toronto Stock Exchange.

 

1.2                Interpretation

 

In this Scheme headings are for convenience only and do not affect
interpretation and, unless the contrary intention appears:

 

(a)                 a word importing the singular includes the plural and vice
versa, and a word of any gender includes the corresponding words of any other
gender;

 

(b)                 the word including or any other form of that word is not a
word of limitation;

 

(c)                 if a word or phrase is given a defined meaning, any other
part of speech or grammatical form of that word or phrase has a corresponding
meaning;

 

(d)                 a reference to a person includes an individual, the estate
of an individual, a corporation, an authority, an association or parties in a
joint venture, a partnership and a trust;

 

(e)                 a reference to a party includes that party’s executors,
administrators, successors and permitted assigns, including persons taking by
way of novation and, in the case of a trustee, includes any substituted or
additional trustee;

 

(f)                 a reference to a document (including this agreement) is to
that document as varied, novated, ratified or replaced from time to time;

 

(g)                 a reference to a party, clause, schedule, exhibit,
attachment, or annexure is a reference to a party, clause, schedule, exhibit,
attachment, or annexure to or of this agreement, and a reference to this
agreement includes all schedules, exhibits, attachments, and annexures to it;

 

(h)                 a reference to an agency or body if that agency or body
ceases to exist or is reconstituted, renamed or replaced or has its powers or
function removed (obsolete body), means the agency or body which performs most
closely the functions of the obsolete body;

 

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

 

(i)                  a reference to a statute includes any regulations or other
instruments made under it (delegated legislation) and a reference to a statute
or delegated legislation or a provision of either includes consolidations,
amendments, re-enactments and replacements;

 

(j)                  a reference to C$ or Canadian dollar is to Canadian
currency;

 

(k)                 if a word or phrase is not given a defined meaning in clause
1.1 but is defined in or for the purposes of the Corporations Act, it has the
same meaning when used in this agreement;

 

(l)                  a reference to a date or time is to that date or time in
Perth, Western Australia; and

 

(m)               this Scheme must not be construed adversely to a party just
because that party prepared it or caused it to be prepared.

 

1.3                Business Day

 

Except where otherwise expressly provided, where under this Scheme the day on
which any act, matter or thing is to be done is a day other than a Business Day,
such act, matter or thing shall be done on the immediately following Business
Day.

 

2.                  Conditions

 

2.1                Conditions to this Scheme

 

This Scheme is conditional upon, and will have no force or effect until, the
satisfaction of each of the following conditions, and the provisions of clauses
3, 4 and 5 will not come into effect unless and until each of these conditions
has been satisfied:

 

(a)                 as at 8.00 am on the Second Court Date each of the
conditions set out in clause 3.1 of the Scheme Implementation Agreement (other
than the conditions relating to the approval of the Court set out in clauses
3.1(f) and 3.1(g) of the Scheme Implementation Agreement) have been satisfied or
waived in accordance with the terms of the Scheme Implementation Agreement;

 

(b)                 as at 8.00 am on the Second Court Date neither the Scheme
Implementation Agreement nor the Deed Poll has been terminated;

 

(c)                 the Court approves this Scheme and the Option Scheme under
section 411(4)(b) of the Corporations Act with or without such alterations as
are acceptable to Bidder and Talison;

 

(d)                 such other conditions made or required by the Court under
section 411(6) of the Corporations Act in relation to this Scheme as are
acceptable to Bidder and Talison have been satisfied; and

 

(e)                 the coming into effect, pursuant to section 411(10) of the
Corporations Act, of the orders of the Court made under section 411(4)(b) of the
Corporations Act (and, if applicable, section 411(6) of the Corporations Act) in
relation to this Scheme.

 

2.2                Certificates in relation to Conditions

 

(a)                 At or before the Court hearing on the Second Court Date,
Talison and Bidder will each provide to the Court a certificate (or such other
evidence as the Court may request) confirming (in respect of matters within
their knowledge) whether or not

 

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

 

the Conditions set out in clauses 2.1(a) and 2.1(b) of this Scheme have been
satisfied.

 

(b)                 The certificates given by Talison and Bidder constitute
conclusive evidence that the relevant Conditions have been satisfied.

 

2.3                Termination of Scheme Implementation Agreement

 

Without limiting any rights under the Scheme Implementation Agreement, in the
event that the Scheme Implementation Agreement is terminated in accordance with
its terms before 8.00 am on the Second Court Date, Talison, Bidder and BidCo are
each released from:

 

(a)                 any further obligation to take steps to implement this
Scheme; and

 

(b)                 any liability with respect to this Scheme.

 

3.                  Scheme

 

3.1                Effective Date of Scheme

 

Subject to clause 3.2, this Scheme will take effect on and from the Effective
Date.

 

3.2                End Date

 

This Scheme will lapse and be of no further force or effect if the Effective
Date has not occurred on or before the End Date.

 

4.                  Implementation of Scheme

 

4.1                Lodgement

 

If the Conditions (other than the Condition in clause 2.1(e)) are satisfied,
Talison must lodge with ASIC in accordance with section 411(10) of the
Corporations Act an office copy of the Court orders approving this Scheme as
soon as practicable after such office copy is received, and in any event by no
later than 5.00 pm on the Business Day after the date on which the Court makes
those orders (or such other Business Day as Talison and Bidder agree in
writing).

 

4.2                Transfer of Scheme Shares

 

On the Implementation Date:

 

(a)                 subject to the provision of the Scheme Consideration in the
manner contemplated by clause 5.1, all of the Scheme Shares will, together with
all rights and entitlements attaching to the Scheme Shares, be transferred to
BidCo without the need for any further act by any Scheme Shareholder (other than
acts performed by Talison as attorney or agent for Scheme Shareholders under
this Scheme), by:

 

(i)                  Talison delivering to BidCo a duly completed and executed
Scheme Transfer (executed by Talison (as transferor) as the attorney and agent
of each Scheme Shareholder under clause 7.2); and

 

(ii)                 BidCo duly executing the Scheme Transfer (as transferee)
and delivering it to Talison for registration; and

 

(b)                 as soon as possible after receipt of the Scheme Transfer
under clause 4.2(a)(ii), Talison must enter, or procure the entry of, the name
and address of BidCo in the Talison Share Register as the holder of all of the
Scheme Shares.

 

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

 

4.3                Provision of Scheme Consideration

 

BidCo will provide (or procure the provision of) the Scheme Consideration in
accordance with clause 5.1.

 

5.                  Scheme Consideration

 

5.1                Satisfaction of payment obligation

 

BidCo will, before 12.00 noon on the Implementation Date, deposit in cleared
funds the aggregate Scheme Consideration payable to all Scheme Shareholders into
a Canadian dollar denominated trust account nominated by Talison (the details of
which must be notified by Talison to BidCo not less than 5 Business Days prior
to the Implementation Date), such amount to be held on trust by Talison or a
depositary appointed by Talison for the Scheme Shareholders (except that any
interest on the amount will be for the account of BidCo).

 

5.2                Payment to Scheme Shareholders

 

(a)                 Subject to clauses 5.1 and 5.3, Talison will pay or procure
the payment of the Scheme Consideration to each Scheme Shareholder on the
Implementation Date by:

 

(i)                  delivery or effecting the delivery to each Scheme
Shareholder by pre-paid airmail post at their Registered Address a pre printed
cheque drawn on a bank considered appropriate by Talison in the name of that
Scheme Shareholder for the Scheme Consideration payable to that Scheme
Shareholder in accordance with this Scheme; or

 

(ii)                 depositing or procuring the deposit into a bank account
with any Australian ADI (as defined in the Corporations Act) or an equivalent
financial institution in an overseas jurisdiction notified to Talison by the
Scheme Shareholder prior to the Implementation Date the Scheme Consideration
payable to that Scheme Shareholder in accordance with this Scheme.

 

(b)                 The cheques sent by Talison, or a depositary appointed by
Talison, pursuant to clause 5.2(a) may be drawn, and the deposit made, at the
discretion of Talison, in Canadian dollars, in Australian dollars or in the
local currency of the country in which the relevant Scheme Shareholder’s
Registered Address appears on the Talison Share Register as at the Record Date.

 

(c)                 Talison is authorised to effect any conversion of the Scheme
Consideration in such manner as it deems appropriate (acting reasonably) and to
deduct any costs, charges or expenses associated with such conversion from the
amount paid to the relevant Scheme Shareholder.

 

(d)                 Talison, or a depositary appointed by Talison, must deduct
and withhold from any amount payable to any person as a consequence of this
Scheme, such amounts as Talison determines, acting reasonably, are required to
be deducted and withheld with respect to such payments under any applicable law.

 

(e)                 To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes under this Scheme as having been paid
to the person in respect of which such deduction and withholding was made,
provided that such withheld amounts are actually remitted to the appropriate
taxing agency.

 

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

 

5.3                Joint holders

 

In the case of Scheme Shares held in joint names, any cheque required to be paid
to Scheme Shareholders will be payable to the joint holders and will be
forwarded to the holder whose name appears first in the Talison Share Register
as at the Record Date.

 

5.4                Unclaimed moneys

 

In the event that Talison believes that a Scheme Shareholder is not known at the
Scheme Shareholder’s Registered Address, Talison may credit the amount payable
to the relevant Scheme Shareholder to a separate bank account of Talison to be
held on trust by Talison, or a depositary appointed by Talison, for the Scheme
Shareholder until the Scheme Shareholder claims the amount or the amount is
dealt with in accordance with any applicable unclaimed money legislation (except
that any interest accruing on the amount will be for the account of BidCo).  An
amount credited to the account is to be treated as having been paid to the
Scheme Shareholder when credited to the account.  Talison must maintain records
of the amounts paid, the persons who are entitled to the amounts and any
transfer of the amounts.

 

6.                  Dealings in Talison Shares

 

6.1                Determination of Scheme Shareholders

 

For the purposes of establishing who are Scheme Shareholders, dealings in
Talison Shares will be recognised by Talison provided that:

 

(a)                 in the case of dealings of the type to be effected on the
TSX, the transferee is registered in the Talison Share Register as the holder of
the relevant Talison Shares at or before the Record Date; and

 

(b)                 in all other cases, registrable transfers or transmission
applications in respect of those dealings are received at the place where the
Talison Share Register is kept at or before the Record Date,

 

and Talison will not accept for registration, or recognise for the purpose of
establishing who are Scheme Shareholders, any transmission application or
transfer in respect of Talison Shares received after the Record Date.

 

6.2                Talison Share Register

 

Talison will, until the Scheme Consideration has been deposited into the account
nominated by Talison pursuant to clause 5.1 and BidCo has been entered in the
Talison Share Register as the holder of all of the Scheme Shares, maintain, or
procure the maintenance of, the Talison Share Register in accordance with the
provisions of this clause 6 and the Talison Share Register in this form and the
terms of this Scheme will solely determine entitlements to the Scheme
Consideration.

 

6.3                Information to be made available to Bidder

 

Talison must procure that as soon as practicable following the Record Date (and,
in any event, no later than 24 hours thereafter), details of the names,
registered addresses and holdings of Talison Shares of every Scheme Shareholder
shown in the Talison Share Register as at the Record Date are made available to
BidCo in electronic form or such other form as reasonably requested by Bidder
prior to the Record Date.

 

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

 

6.4                                               Effect of share certificates
and holding statements

 

As from the time at which the Scheme Consideration is deposited into the account
nominated by Talison pursuant to clause 5.1, all share certificates and holding
statements for the Scheme Shares will cease to have effect as documents of
title, and each entry on the Talison Share Register at that time and date (other
than entries in respect of BidCo and its successors in title) will cease to have
any effect other than as evidence of entitlement to the Scheme Consideration.

 

6.5                                               No disposals after Record Date

 

If this Scheme becomes Effective, a Scheme Shareholder, and any person claiming
through that Scheme Shareholder, must not dispose of or purport or agree to
dispose of any Scheme Shares or any interest in them after the Record Date.

 

6.6                                               Listing and trading of Talison
Shares

 

(a)                 Application will be made to suspend trading in Talison
Shares on the TSX as at the close of trading (Toronto time) on the Effective
Date.

 

(b)                 On or before the Implementation Date, Talison will apply to
delist the Talison Shares from the TSX, provided that delisting may not occur
before implementation of the Scheme.

 

7.                                                      General provisions

 

7.1                                               Effect of Scheme

 

This Scheme binds Talison and all of the Scheme Shareholders (including those
who did not attend the Scheme Meeting or who did not vote at that meeting or who
voted against this Scheme at that meeting) and, to the extent permitted by law,
overrides the constitution of Talison.

 

7.2                                               Appointment of agent and
attorney

 

On this Scheme becoming Effective, each Scheme Shareholder, without the need for
any further act, is deemed to have irrevocably appointed Talison as its agent
and attorney for the purpose of:

 

(a)                 executing any document or form or doing any other act
necessary to give effect to the terms of this Scheme including, without
limitation, the execution of the Scheme Transfer; and

 

(b)                 enforcing the Deed Poll against Bidder and BidCo,

 

and Talison accepts such appointment.  Talison, as agent and attorney of each
Scheme Shareholder, may sub-delegate its functions, authorities or powers under
this clause 7.2 to all or any of its directors and officers (jointly, severally,
or jointly and severally).

 

7.3                                               Enforcement of Deed Poll

 

Talison undertakes in favour of each Scheme Shareholder that it will enforce the
Deed Poll against Bidder and BidCo on behalf of and as agent and attorney for
the Scheme Shareholders.

 

7.4                                               Scheme Shareholders’ agreement
and consent

 

Each Scheme Shareholder irrevocably:

 

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

 

(a)                 agrees to the transfer of its Scheme Shares, together with
all rights and entitlements attaching to those Scheme Shares, to BidCo in
accordance with the terms of this Scheme and agrees to the variation,
cancellation or modification of the rights attached to their Scheme Shares
constituted by or resulting from this Scheme;

 

(b)                 consents to Talison and BidCo doing all things and executing
all deeds, instruments, transfers or other documents as may be necessary,
incidental or expedient to the implementation and performance of this Scheme;
and

 

(c)                 acknowledges that this Scheme binds all Scheme Shareholders.

 

7.5                                               Transfer with clear title and
warranty by Scheme Shareholders

 

(a)                 To the extent permitted by law, the Scheme Shares
transferred to BidCo under this Scheme will be transferred free from all
mortgages, charges, liens, Encumbrances and interests of third parties of any
kind, whether legal or otherwise.

 

(b)                 Each Scheme Shareholder is deemed to have warranted to
Talison, in its own right and for the benefit of BidCo, that all their Scheme
Shares (including any rights and entitlements attaching to those shares) will,
at the date of the transfer of them to BidCo, be fully paid and free from all
mortgages, charges, liens, Encumbrances and interests of third parties of any
kind, whether legal or otherwise, and restrictions on transfer of any kind, and
that they have full power and capacity to sell and to transfer their Scheme
Shares to BidCo under this Scheme.

 

7.6                                               Title to Scheme Shares

 

On and from the Implementation Date, BidCo will be beneficially entitled to the
Scheme Shares transferred to it under this Scheme pending registration by
Talison of BidCo in the Talison Share Register as the holder of the Scheme
Shares.

 

7.7                                               Appointment of BidCo as sole
proxy

 

From the time at which the Scheme Consideration is provided in accordance with
clause 5.1 until Talison registers BidCo as the holder of all of the Scheme
Shares in the Talison Share Register, each Scheme Shareholder:

 

(a)                 appoints BidCo as attorney and agent (and directs BidCo in
each capacity) to appoint any director, officer, secretary or agent nominated by
BidCo as its sole proxy and where applicable, corporate representative, to
attend shareholders’ meetings of Talison, exercise the votes attaching to the
Scheme Shares registered in its name and sign any shareholders resolution;

 

(b)                 undertakes not to otherwise attend or vote at any of those
meetings or sign any resolutions, whether in person, by proxy or by corporate
representative (other than pursuant to this clause 7.7(a);

 

(c)                 must take all other actions in the capacity of the
registered holder of Scheme Shares as BidCo directs; and

 

(d)                 acknowledges and agrees that in exercising the powers
conferred in clause 7.7(a), BidCo and any director, officer, secretary or agent
nominated by BidCo under that clause may act in the best interests of BidCo as
the intended registered holder of the Scheme Shares.

 

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

 

7.8                                               Alterations or conditions

 

Talison may, by its counsel or solicitors, and with the consent of BidCo,
consent on behalf of all persons concerned, including a Scheme Shareholder, to
any alteration or condition to this Scheme which the Court thinks fit to make or
impose.

 

7.9                                               Notices

 

(a)                 Where a notice, transfer, transmission application,
direction or other communication referred to in this Scheme is sent by post to
Talison, it will for all purposes be deemed to be received on the date (if any)
on which it is actually received at Talison’s registered office (and it will not
be deemed to be received in the ordinary course of post) or at the place where
the Talison Share Register is kept.

 

(b)                 The accidental omission to give notice of the Scheme Meeting
to any Talison Shareholder, or the non-receipt of such a notice by any Talison
Shareholder, will not, unless ordered by the Court, invalidate this Scheme or
the proceedings at the Scheme Meeting.

 

7.10                                        Further assurances

 

(a)                 Each of the Scheme Shareholders consents to Talison doing
all things necessary or incidental to give full effect to the implementation of
this Scheme and the transactions contemplated by it.

 

(b)                 Talison must do all things and execute all documents
necessary to give full effect to this Scheme and the transactions contemplated
by it.

 

7.11                                        Stamp duty

 

BidCo will pay any duty (under the Duties Act 2008 (WA) or otherwise) payable on
the transfer by Scheme Shareholders of the Scheme Shares to BidCo.

 

7.12                                        Fees and charges

 

Talison must pay all filing, application or similar fees due in relation to this
Scheme.

 

7.13                                        Governing law

 

This Scheme is governed by the laws of the State of Western Australia.  Each
party irrevocably and unconditionally submits, in connection with this Scheme,
to the non-exclusive jurisdiction of the Court and any courts which have
jurisdiction to hear appeals from the Court and waives any right to object to
any proceedings being brought in these courts.

 

7.14                                        Limitation of liability

 

None of Talison, Bidder nor BidCo nor any director, officer or secretary of any
of them is liable for anything done or omitted to be done in the performance of
this Scheme or the Deed Poll in good faith.

 

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

 

Annexure B
Deed Poll

 

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

 

[g190231kg15i001.jpg]

 

Deed Poll
(in respect of the Scheme)

 

Rockwood Holdings, Inc.

Bidder

 

[·]

BidCo

 

In favour of each Scheme Shareholder

 

Clayton Utz

Lawyers

Level 27 QV.1  250 St Georges Terrace  Perth  WA  6000  Australia

GPO Box P1214  Perth  WA  6844

T +61 8 9426 8000  F +61 8 9481 3095

 

www.claytonutz.com

 

Our reference 60067/17196/80123998

 

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

 

Contents

 

1.

Definitions and interpretations

2

 

 

 

 

 

1.1

Definitions

2

 

1.2

Interpretation

2

 

1.3

Nature of deed poll

2

 

 

 

 

2.

Condition

3

 

 

 

 

 

2.1

Condition

3

 

2.2

Termination

3

 

2.3

Consequences of termination

3

 

 

 

 

3.

Obligation to pay Scheme Consideration

3

 

 

 

 

4.

Warranties

3

 

 

 

 

5.

Continuing obligations

4

 

 

 

 

6.

General

4

 

 

 

 

 

6.1

Notices

4

 

6.2

Duty

5

 

6.3

Waiver

5

 

6.4

Variation

6

 

6.5

Cumulative rights

6

 

6.6

Assignment

6

 

6.7

Further action

6

 

6.8

Governing law and jurisdiction

6

 

i

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

 

Deed poll made on

2012   

 

Parties

 

Rockwood Holdings, Inc. of 100 Overlook Center, Princeton, New Jersey, 08540,
United States of America (Bidder)

 

 

 

 

 

[·] of [·] (BidCo)

 

 

 

In favour of

 

Each Scheme Shareholder

 

Recitals

 

I.                                                        Talison and Bidder
have entered into a Scheme Implementation Agreement dated [•] August 2012
(Scheme Implementation Agreement) to provide for the implementation of the
Scheme and the Option Scheme.

 

J.                                                        The effect of the
Scheme will be that BidCo acquires all of the Scheme Shares from Scheme
Shareholders in exchange for the Scheme Consideration.

 

K.                                                   Each of Bidder and BidCo is
entering into this deed poll to covenant in favour of Scheme Shareholders that,
in the case of BidCo, it will observe and perform the obligations contemplated
of it under the Scheme, and, in the case of Bidder, that it will procure that
BidCo observes and performs the obligations contemplated of it under the Scheme.

 

8.                                                      Definitions and
interpretations

 

8.1                                               Definitions

 

In this deed poll:

 

(a)                 Scheme means the proposed scheme of arrangement under
Part 5.1 of the Corporations Act between Talison and the Scheme Shareholders, as
contemplated by the Scheme Implementation Agreement; and

 

(b)                 capitalised terms have the meanings given to them in the
Scheme or the Scheme Implementation Agreement (as applicable), unless the
context requires otherwise.

 

8.2                                               Interpretation

 

Clause 1.5 of the Scheme Implementation Agreement applies to the interpretation
of this deed poll, except that references to “this agreement” are to be read as
references to “this deed poll”.

 

8.3                                               Nature of deed poll

 

Each of Bidder and BidCo acknowledges that:

 

(a)                 this deed poll may be relied on and enforced by any Scheme
Shareholder in accordance with its terms even though the Scheme Shareholders are
not party to it; and

 

(b)                 under the Scheme, each Scheme Shareholder irrevocably
appoints Talison as its agent and attorney to enforce this deed poll against
Bidder and BidCo.

 

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

 

9.                                                      Condition

 

9.1                                               Condition

 

The obligations of each of Bidder and BidCo under this deed poll are subject to
the Scheme becoming Effective.

 

9.2                                               Termination

 

Unless Talison, Bidder and BidCo agree otherwise, if the Scheme Implementation
Agreement is terminated or the Scheme does not become Effective on or before the
End Date, the obligations of each of Bidder and BidCo under this deed poll
automatically terminate and the terms of this deed poll will be of no further
force or effect.

 

9.3                                               Consequences of termination

 

If this deed poll is terminated under clause 9.2 then, in addition and without
prejudice to any other rights, powers or remedies available to it:

 

(a)                 each of Bidder and BidCo is released from its obligations to
further perform this deed poll except those obligations under clause 13.2; and

 

(b)                 each Scheme Shareholder retains the rights they have against
Bidder and/or BidCo (as the case may be) in respect of any breach of this deed
poll which occurs before termination.

 

10.                                               Obligation to pay Scheme
Consideration

 

Subject to clause 9:

 

(a)                                                  BidCo undertakes in favour
of each Scheme Shareholder that it will:

 

(i)                  deposit the aggregate amount of the Scheme Consideration
payable to all Scheme Shareholders in cleared funds into the trust account
nominated by Talison in accordance with clause 5.1 of the Scheme; and

 

(ii)                 undertake all other actions attributed to it under the
Scheme,

 

in accordance with the Scheme; and

 

(b)                                                  Bidder undertakes in favour
of each Scheme Shareholder that it will procure that BidCo observes and performs
all obligations contemplated of BidCo under the Scheme in accordance with the
Scheme.

 

11.                                               Warranties

 

(a)                                                  Bidder represents and
warrants that:

 

(i)                  it is a corporation validly existing under the laws of its
place of registration;

 

(ii)                 the execution and delivery by it of this deed poll has been
(or prior to the Scheme becoming Effective, will be) properly authorised by all
necessary corporate action and it has full corporate power and lawful authority
to perform or cause to be performed its obligations under this

 

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

 

deed poll and to carry out or cause to be carried out the transactions
contemplated by this deed poll; and

 

(iii)                this deed poll will constitute legally valid and binding
obligations on it enforceable in accordance with its terms (subject to any
necessary stamping) and does not conflict with or result in a breach of a
default under:

 

A.                                                    its constituent documents;
or

 

B.                                                    any writ, order or
injunction, judgment, law, rule or regulation to which it is party, or by which
it is bound.

 

(b)                                                  BidCo represents and
warrants that:

 

(i)                  BidCo is a [·];

 

(ii)                 the execution and delivery by it of this deed poll has been
(or prior to the Scheme becoming Effective, will be) properly authorised by all
necessary action and it has full power and lawful authority to perform or cause
to be performed its obligations under this deed poll and to carry out or cause
to be carried out the transactions contemplated by this deed poll; and

 

(iii)                this deed poll will constitute legally valid and binding
obligations on it enforceable in accordance with its terms (subject to any
necessary stamping) and does not conflict with or result in a breach of a
default under:

 

A.                                                    its constituent or
equivalent documents; or

 

B.                                                    any writ, order or
injunction, judgment, law, rule or regulation to which it is party, or by which
it is bound.

 

12.                                               Continuing obligations

 

This deed poll is irrevocable and, subject to clause 9, remains in full force
and effect until:

 

(a)                 each of Bidder and BidCo has fully performed its obligations
under this deed poll; or

 

(b)                 the earlier termination of this deed poll under clause 9.2.

 

13.                                              General

 

13.1                                        Notices

 

(a)                                                  All notices or other
communication to Bidder or BidCo in respect of this deed poll must be:

 

(i)                  in writing;

 

(ii)                 signed by the sender or by a person duly authorised by the
sender;

 

(iii)                addressed in the manner and delivered or sent by prepaid
ordinary post to the address, or sent by fax to the fax number, relevantly
described below:

 

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

 

Address:

 

100 Overlook Center Princeton,
New Jersey, 08540
United States of America

 

 

 

Facsimile:

 

+1 609 734-6406

 

 

 

For the attention of:

 

Thomas J. Riordan

 

 

 

With a copy to:

 

Gilbert + Tobin

 

 

 

Address:

 

2 Park Street, Sydney, 2000 Australia

 

 

 

Facsimile:

 

+61 2 9263 4111

 

 

 

For the attention of:

 

Peter Cook and David Clee

 

(b)                                                  Any notice or other
communication given in accordance with clause 13.1(a) will be deemed to have
been duly given as follows:

 

(i)                  if delivered by hand, on delivery at the address of the
addressee, unless that delivery is made on a non-Business Day, or after 5.00 pm
on a Business Day, in which case that communication will be deemed to be
received at 9.00 am on the next Business Day;

 

(ii)                 if sent by pre-paid mail, on the third Business Day after
posting; and

 

(iii)                if sent by facsimile, at the local time (in the place of
receipt of the facsimile) which then equates to the time at which that facsimile
is sent as shown on the transmission report which is produced by the machine
from which that facsimile is sent and which confirms transmission of that
facsimile in its entirety, unless that local time is a non-Business Day, or
after 5.00 pm on a Business Day, in which case that communication will be deemed
to be received at 9.00 am on the next Business Day.

 

13.2                                        Duty

 

BidCo will:

 

(a)                 pay or procure the payment of all transaction duties and any
related fines and penalties in respect of this deed poll, the performance of
this deed poll and each transaction effected by or made under this deed poll
(including in connection with the transfer of Scheme Shares to BidCo in
accordance with the terms of the Scheme); and

 

(b)                 indemnify each Scheme Shareholder against any liability
arising from failure to comply with clause 13.2(a).

 

13.3                                        Waiver

 

(a)                 Waiver of any right arising from a breach of this deed poll
or of any right, power, authority, discretion or remedy arising upon default
under this deed poll must be in writing and signed by the party granting the
waiver.

 

(b)                 A failure or delay in exercise, or partial exercise, of:

 

(i)                                                     a right arising from a
breach of this deed poll; or

 

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

 

(ii)                                                  a right, power, authority,
discretion or remedy created or arising upon default under this deed poll,

 

does not result in a waiver of that right, power, authority, discretion or
remedy.

 

(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 deed poll or on a default
under this deed poll 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 the exercise of a right, power,
authority, discretion or remedy by that other party.

 

(e)                                                   This clause 13.3 may not
itself be waived except in writing.

 

13.4                                        Variation

 

This deed poll may be amended only by another deed poll entered into by Bidder
and BidCo, and then only if the amendment is agreed to by Talison and, if after
the First Court Date, the Court indicates that the amendment would not preclude
approval of the Scheme.

 

13.5                                        Cumulative rights

 

The rights, powers and remedies of Bidder, BidCo and each Scheme Shareholder
under this deed poll are cumulative and do not exclude any other rights, powers
or remedies provided by the law independently of this deed poll.

 

13.6                                        Assignment

 

The rights and obligations of each of Bidder and BidCo and the rights of each
Scheme Shareholder under this deed poll are personal and must not be assigned,
charged or otherwise dealt with at law or in equity.

 

13.7                                        Further action

 

Bidder and BidCo will promptly do all things and execute and deliver all further
documents required by law to give effect to this deed poll and the transactions
contemplated by it.

 

13.8                                        Governing law and jurisdiction

 

(a)                                                  This deed poll is governed
by the laws of the state of Western Australia.

 

(b)                                                  Each of Bidder and BidCo
irrevocably and unconditionally submits to the non-exclusive jurisdiction of the
courts of the state of Western Australia for any proceedings in connection with
this deed poll and waives any right it may have to object to an action being
brought in those courts including by claiming that the action has been brought
in an inconvenient forum.

 

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Executed as a deed poll.

 

 

Executed by
Rockwood Holdings, Inc.
in accordance with its constituent documents and the laws of the place of its
incorporation or registration, and in the presence of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature of [·]

 

 

Signature of [·]

 

 

 

 

 

 

 

 

Name of [·]

 

 

Name of [·]

 

 

Executed by
[·]:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature of [·]

 

 

Signature of [·]

 

 

 

 

 

 

 

 

Name of [·]

 

 

Name of [·]

 

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

 

Annexure C
Option Scheme

 

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[g190231kg17i001.jpg]

 

Scheme of Arrangement

Pursuant to section 411 of the Corporations Act

 

Talison Lithium Limited

 

Talison

 

The holders of options to subscribe for fully paid ordinary shares in
Talison Lithium Limited

 

Clayton Utz

Lawyers

Level 27 QV.1  250 St Georges Terrace Perth WA 6000  Australia

GPO Box P1214  Perth WA 6844

T +61 8 9426 8000  F +61 8 9481 3095

 

www.claytonutz.com

 

Our reference 60067/17196/80123998

 

ii

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Contents

 

1.

Definitions and interpretation

2

 

 

 

 

 

1.1

Definitions

2

 

1.2

Interpretation

4

 

1.3

Business Day

5

 

 

 

 

2.

Conditions

5

 

 

 

 

 

2.1

Conditions to this Option Scheme

5

 

2.2

Certificates in relation to Conditions

6

 

2.3

Termination of Scheme Implementation Agreement

6

 

 

 

 

3.

Option Scheme

6

 

 

 

 

 

3.1

Effective Date of Option Scheme

6

 

3.2

End Date

6

 

 

 

 

4.

Implementation of Option Scheme

6

 

 

 

 

 

4.1

Lodgement

6

 

4.2

Transfer of Scheme Options

6

 

4.3

Provision of Option Scheme Consideration

7

 

 

 

 

5.

Option Scheme Consideration

7

 

 

 

 

 

5.1

Satisfaction of payment obligation

7

 

5.2

Payment to Scheme Optionholders

7

 

5.3

Joint holders

8

 

5.4

Unclaimed moneys

8

 

 

 

 

6.

Exercise of Talison Options

8

 

 

 

 

 

6.1

Issue of Talison Shares

8

 

6.2

Talison Option Register

8

 

6.3

Information to be made available to Bidder

9

 

6.4

Effect of option certificates

9

 

6.5

No disposals after Record Date

9

 

 

 

 

7.

General provisions

9

 

 

 

 

 

7.1

Effect of Option Scheme

9

 

7.2

Appointment of agent and attorney

9

 

7.3

Enforcement of Deed Poll

9

 

7.4

Scheme Optionholders’ agreement and consent

10

 

7.5

Transfer with clear title and warranty by Scheme Optionholders

10

 

7.6

Title to Scheme Options

10

 

7.7

BidCo directions

10

 

7.8

Alterations or conditions

10

 

7.9

Notices

10

 

7.10

Further assurances

11

 

7.11

Stamp duty

11

 

7.12

Fees and charges

11

 

7.13

Governing law

11

 

7.14

Limitation of liability

11

 

i

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Scheme of Arrangement made under section 411 of the Corporations Act 2001
(Commonwealth)

 

Parties                                                                                       
Talison Lithium Limited ACN 140 122 078 of Level 4, 37 St Georges Terrace,
Perth, Western Australia (Talison)

 

Each Scheme Optionholder

 

Recitals

 

L.                                                     Talison is a public
company incorporated in the state of Western Australia and listed onthe TSX.

 

M.                                                 Rockwood Holdings, Inc.
(Bidder) is a corporation registered in the United States of America and is
listed on the NYSE.

 

N.                                                    [·] (BidCo) is a [·].

 

O.                                                    Talison and Bidder have
entered into a Scheme Implementation Agreement dated 23 August 2012 (Scheme
Implementation Agreement) pursuant to which, amongst other things, Talison has
agreed to propose this Option Scheme to Talison Optionholders, and each of
Talison and Bidder has agreed to take certain steps to give effect to this
Option Scheme.

 

P.                                                      If this Option Scheme
becomes Effective, then:

 

(a)                                                  all of the Scheme Options
will be transferred to BidCo and the Option Scheme Consideration will be
provided to the Scheme Optionholders in accordance with the provisions of this
Option Scheme; and

 

(b)                                                  Talison will enter the name
and address of BidCo in the Talison Option Register as the holder of all of the
Scheme Options.

 

Q.                                                    Bidder and BidCo have
entered into the Deed Poll for the purpose of, in the case of BidCo, covenanting
in favour of Scheme Optionholders to perform the obligations contemplated of it
under this Option Scheme, and, in the case of Bidder, procuring that BidCo
performs the obligations contemplated of it under this Option Scheme.

 

14.                                               Definitions and interpretation

 

14.1                                        Definitions

 

In this Option Scheme, unless the contrary intention appears or the context
requires otherwise:

 

ASIC means the Australian Securities and Investments Commission.

 

BidCo has the meaning given in Recital C.

 

Bidder has the meaning given in Recital B.

 

Business Day means a day that is not a Saturday, Sunday or public holiday and on
which banks are open for business generally in Perth, Western Australia and
Princeton, New Jersey.

 

Condition means a condition to this Option Scheme set out in clause 2.1.

 

Corporations Act means the Corporations Act 2001 (Cth).

 

2

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Court means the Federal Court of Australia or such other court of competent
jurisdiction as Talison and Bidder agree in writing.

 

Deed Poll means the deed poll dated [·] executed by Bidder and BidCo in favour
of the Scheme Optionholders.

 

Effective means, when used in relation to this Option Scheme, the coming into
effect, pursuant to section 411(10) of the Corporations Act, of the order of the
Court made under section 411(4)(b) (and, if applicable, section 411(6)) of the
Corporations Act in relation to this Option Scheme.

 

Effective Date means the date on which the Option Scheme becomes Effective.

 

Encumbrance means a mortgage, charge, pledge, lien, encumbrance, security
interest, title retention, preferential right, trust arrangement, contractual
right of set-off, or any other security agreement or arrangement in favour of
any person, whether registered or unregistered, including any Security Interest.

 

End Date means 31 January 2013 or such later date as is agreed by Talison and
Bidder in writing.

 

Implementation Date means the date which is 3 Business Days after the Record
Date, or such other date as Talison, Bidder and BidCo agree in writing.

 

NYSE means the New York Stock Exchange.

 

Option Scheme means the scheme of arrangement under Part 5.1 of the Corporations
Act between Talison and Scheme Optionholders as set out in this document,
subject to any alterations or conditions made or required by the Court pursuant
to section 411(6) of the Corporations Act and approved in writing by Bidder and
Talison.

 

Option Scheme Consideration means the consideration to be provided to Scheme
Optionholders under the terms of this Option Scheme, being for each Scheme
Option C$6.50 cash less the exercise price for that Scheme Option.

 

Option Scheme Meeting means the meeting of Talison Optionholders ordered by the
Court in relation to this Option Scheme convened under section 411(1) of the
Corporations Act.

 

Record Date means:

 

(a)                                                  if no date is set pursuant
to clause 6.1(b) of the Scheme Implementation Agreement, 5.00 pm (Perth time) on
the date which is 5 Business Days after the Effective Date;

 

(b)                                                  if a time and date is set
pursuant to clause 6.1(b) of the Scheme Implementation Agreement, that time and
date; or

 

(c)                                                   in each case, such other
time and date agreed in writing between Talison and Bidder.

 

Registered Address means, in relation to a Talison Optionholder, the address of
that Talison Optionholder shown in the Talison Option Register as at the Record
Date.

 

Related Body Corporate has the meaning given in section 9 of the Corporations
Act.

 

Scheme Implementation Agreement has the meaning given in Recital D.

 

Scheme Option means each Talison Option on issue as at the Record Date.

 

3

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Scheme Optionholder means each person registered in the Talison Option Register
as the holder of Scheme Options.

 

Scheme Transfer means one or more proper instruments of transfer in respect of
the Scheme Options for the purposes of section 1071B of the Corporations Act,
which may be or include a master transfer of all or part of the Scheme Options.

 

Second Court Date means the first day of hearing of an application made to the
Court for an order pursuant to section 411(4)(b) of the Corporations Act
approving this Option Scheme or, if the hearing of such application is adjourned
for any reason, means the first day of the adjourned hearing.

 

Security Interest has the meaning given in section 12 of the Personal Property
Securities Act 2009 (Cth).

 

Share Scheme means the scheme of arrangement under Part 5.1 of the Corporations
Act between Talison and the holders of shares in Talison, as contemplated in the
Scheme Implementation Agreement.

 

Talison Option means an option to subscribe for Talison Share.

 

Talison Option Register means the register of optionholders of Talison
maintained by or on behalf of Talison in accordance with section 168(1) of the
Corporations Act.

 

Talison Optionholder means a person who is registered in the Talison Option
Register as a holder of Talison Options.

 

Talison Share means an ordinary share in the capital of Talison.

 

TSX means the Toronto Stock Exchange.

 

14.2                                        Interpretation

 

In this Option Scheme headings are for convenience only and do not affect
interpretation and, unless the contrary intention appears:

 

(a)                                                  a word importing the
singular includes the plural and vice versa, and a word of any gender includes
the corresponding words of any other gender;

 

(b)                                                  the word including or any
other form of that word is not a word of limitation;

 

(c)                                                   if a word or phrase is
given a defined meaning, any other part of speech or grammatical form of that
word or phrase has a corresponding meaning;

 

(d)                                                  a reference to a person
includes an individual, the estate of an individual, a corporation, an
authority, an association or parties in a joint venture, a partnership and a
trust;

 

(e)                                                   a reference to a party
includes that party’s executors, administrators, successors and permitted
assigns, including persons taking by way of novation and, in the case of a
trustee, includes any substituted or additional trustee;

 

(f)                                                    a reference to a document
(including this agreement) is to that document as varied, novated, ratified or
replaced from time to time;

 

(g)                                                   a reference to a party,
clause, schedule, exhibit, attachment, or annexure is a reference to a party,
clause, schedule, exhibit, attachment, or annexure to or of this agreement, and
a reference to this

 

4

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

 

agreement includes all schedules, exhibits, attachments, and annexures to it;

 

(h)                                                  a reference to an agency or
body if that agency or body ceases to exist or is reconstituted, renamed or
replaced or has its powers or function removed (obsolete body), means the agency
or body which performs most closely the functions of the obsolete body;

 

(i)                                                      a reference to a
statute includes any regulations or other instruments made under it (delegated
legislation) and a reference to a statute or delegated legislation or a
provision of either includes consolidations, amendments, re-enactments and
replacements;

 

(j)                                                     a reference to C$ or
Canadian dollar is to Canadian currency;

 

(k)                                                  if a word or phrase is not
given a defined meaning in clause 1.1 but is defined in or for the purposes of
the Corporations Act, it has the same meaning when used in this agreement;

 

(l)                                                      a reference to a date
or time is to that date or time in Perth, Western Australia; and

 

(m)                                              this Option Scheme must not be
construed adversely to a party just because that party prepared it or caused it
to be prepared.

 

14.3                                        Business Day

 

Except where otherwise expressly provided, where under this Option Scheme the
day on which any act, matter or thing is to be done is a day other than a
Business Day, such act, matter or thing shall be done on the immediately
following Business Day.

 

15.                                               Conditions

 

15.1                                        Conditions to this Option Scheme

 

This Option Scheme is conditional upon, and will have no force or effect until,
the satisfaction of each of the following conditions, and the provisions of
clauses 3, 4 and 5 will not come into effect unless and until each of these
conditions has been satisfied:

 

(a)                                                  as at 8.00 am on the Second
Court Date each of the conditions set out in clause 3.2 of the Scheme
Implementation Agreement (other than the condition relating to the approval of
the Court and the condition relating to the Effectiveness of the Share Scheme,
as set out in clause 3.2(d) and clause 3.2(b) respectively of the Scheme
Implementation Agreement) have been satisfied or waived in accordance with the
terms of the Scheme Implementation Agreement;

 

(b)                                                  as at 8.00 am on the Second
Court Date neither the Scheme Implementation Agreement nor the Deed Poll has
been terminated;

 

(c)                                                   the Court approves this
Option Scheme and the Share Scheme under section 411(4)(b) of the Corporations
Act with or without such alterations as are acceptable to Bidder and Talison;

 

(d)                                                  such other conditions made
or required by the Court under section 411(6) of the Corporations Act in
relation to this Option Scheme as are acceptable to Bidder and Talison have been
satisfied; and

 

5

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(e)                                                   the coming into effect,
pursuant to section 411(10) of the Corporations Act, of the orders of the Court
made under section 411(4)(b) of the Corporations Act (and, if applicable,
section 411(6) of the Corporations Act) in relation to this Option Scheme and
the Share Scheme.

 

15.2                                        Certificates in relation to
Conditions

 

(a)                                                  At or before the Court
hearing on the Second Court Date, Talison and Bidder will each provide to the
Court a certificate (or such other evidence as the Court may request) confirming
(in respect of matters within their knowledge) whether or not all of the
Conditions set out in clause 15.1(a) and 15.1(b) of this Option Scheme have been
satisfied.

 

(b)                                                  The certificates given by
Talison and Bidder constitute conclusive evidence that the conditions have been
satisfied.

 

15.3                                        Termination of Scheme Implementation
Agreement

 

Without limiting any rights under the Scheme Implementation Agreement, in the
event that the Scheme Implementation Agreement is terminated in accordance with
its terms before 8.00 am on the Second Court Date, Talison, Bidder and BidCo are
each released from:

 

(a)                                                  any further obligation to
take steps to implement this Option Scheme; and

 

(b)                                                  any liability with respect
to this Option Scheme.

 

16.                                               Option Scheme

 

16.1                                        Effective Date of Option Scheme

 

Subject to clause 3.2, this Option Scheme will take effect on and from the
Effective Date.

 

16.2                                        End Date

 

This Option Scheme will lapse and be of no further force or effect if the
Effective Date has not occurred on or before the End Date.

 

17.                                               Implementation of Option
Scheme

 

17.1                                        Lodgement

 

If the Conditions (other than the Condition in clause 15.1(e)) are satisfied,
Talison must lodge with ASIC in accordance with section 411(10) of the
Corporations Act an office copy of the Court order approving this Option Scheme
as soon as practicable after such office copy is received, and in any event by
no later than 5.00 pm on the Business Day after the date on which the Court
makes those orders (or such other Business Day as Talison and Bidder agree in
writing).

 

17.2                                        Transfer of Scheme Options

 

On the Implementation Date:

 

(a)                                                  subject to the provision of
the Option Scheme Consideration in the manner contemplated by clause 18.1, all
of the Scheme Options will, together with all rights and entitlements attaching
to the Scheme Options, be transferred to BidCo without the need for any further
act by any Scheme Optionholder (other than acts performed

 

6

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by Talison as attorney or agent for Scheme Optionholders under this Option
Scheme), by:

 

(i)                  Talison delivering to BidCo a duly completed and executed
Scheme Transfer (executed by Talison (as transferor) as the attorney and agent
of each Scheme Optionholder under clause 20.2); and

 

(ii)                 BidCo executing the Scheme Transfer (as transferee) and
delivering it to Talison for registration; and

 

(b)                 as soon as possible after receipt of the Scheme Transfer
under clause 17.2(a)(ii), Talison must enter, or procure the entry of, the name
and address of BidCo in the Talison Option Register as the holder of all of the
Scheme Options.

 

17.3                                        Provision of Option Scheme
Consideration

 

BidCo will provide (or procure the provision of) the Option Scheme Consideration
in accordance with clause 18.1.

 

18.                                               Option Scheme Consideration

 

18.1                                        Satisfaction of payment obligation

 

BidCo will, before 12.00 noon on the Implementation Date, deposit in cleared
funds the aggregate Option Scheme Consideration payable to all Scheme
Optionholders into Canadian dollar denominated account nominated by Talison (the
details of which must be notified by Talison or a depositary appointed by
Talison to BidCo not less than 5 Business Days prior to the Implementation
Date), such amount to be held on trust by Talison for the Scheme Optionholders
(except that any interest on the amount will be for the account of BidCo).

 

18.2                                        Payment to Scheme Optionholders

 

(a)                 Subject to clauses 5.1 and 5.3, Talison will pay or procure
the payment of the Option Scheme Consideration to each Scheme Optionholder on
the Implementation Date by:

 

(i)                  delivery or effecting the delivery to each Scheme
Optionholder by pre-paid airmail post at their Registered Address a pre-printed
cheque drawn on a bank considered appropriate by Talison in the name of that
Scheme Optionholder for the Option Scheme Consideration payable to that Scheme
Optionholder in accordance with this Option Scheme; or

 

(ii)                 depositing or procuring the deposit into a bank account
with any Australian ADI (as defined in the Corporations Act) or an equivalent
financial institution in an overseas jurisdiction notified to Talison by the
Scheme Optionholder prior to the Implementation Date the Option Scheme
Consideration payable to that Scheme Optionholder in accordance with this Option
Scheme.

 

(b)                 The cheques sent by Talison, or a depositary appointed by
Talison, under this clause may be drawn, and the deposit made, at the discretion
of Talison, in Canadian dollars, in Australian dollars or in the local currency
of the country in which the relevant Scheme Optionholder’s Registered Address
appears on the Talison Option Register as at the Record Date.

 

(c)                 Talison is authorised to effect any conversion of the Option
Scheme Consideration in such manner as it deems appropriate (acting reasonably)
and to deduct any costs,

 

7

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

 

charges or expenses associated with such conversion from the amount paid to the
relevant Scheme Optionholder.

 

(d)                 Talison, or a depositary appointed by Talison, must deduct
and withhold from any amount payable to any person as a consequence of this
Option Scheme, such amounts as Talison determines, acting reasonably, are
required to be deducted and withheld with respect to such payments under any
applicable law.

 

(e)                 To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes under this Option Scheme as having
been paid to the person in respect of which such deduction and withholding was
made, provided that such withheld amounts are actually remitted to the
appropriate taxing agency.

 

18.3                                        Joint holders

 

In the case of Scheme Options held in joint names, any cheque required to be
paid to Scheme Optionholders will be payable to the joint holders and will be
forwarded to the holder whose name appears first in the Talison Option Register
as at the Record Date.

 

18.4                                        Unclaimed moneys

 

In the event that Talison believes that a Scheme Optionholder is not known at
the Scheme Optionholder’s Registered Address, Talison may credit the amount
payable to the relevant Scheme Optionholder to a separate bank account of
Talison to be held on trust by Talison, or a depositary appointed by Talison,
for the Scheme Optionholder until the Scheme Optionholder claims the amount or
the amount is dealt with in accordance with any applicable unclaimed money
legislation (except that any interest accruing on the amount will be for the
account of BidCo). An amount credited to the account is to be treated as having
been paid to the Scheme Optionholder when credited to the account.  Talison must
maintain records of the amounts paid, the persons who are entitled to the
amounts and any transfer of the amounts.

 

19.                                               Exercise of Talison Options

 

19.1                                        Issue of Talison Shares

 

(a)                 Talison will issue Talison Shares in accordance with any
valid notice of exercise of a Talison Option which is received on or before
12.00 noon on the Business Day prior to the Record Date.

 

(b)                 Talison will not accept for registration or recognise for
any purpose any notice of exercise of a Talison Option received after 12.00 noon
on the Business Day prior to the Record Date and, after such time, the Talison
Options shall not be capable of exercise notwithstanding any terms on which such
Talison Options were granted.

 

(c)                 Each Scheme Optionholder acknowledges and agrees that,
without limiting clauses 19.1(a) and 19.1(b), where a Talison Share is issued to
a Talison Optionholder pursuant to the exercise of a Talison Option, that
Talison Share shall be transferred to BidCo under the Share Scheme and the
Talison Optionholder shall be bound by the terms of the Share Scheme in respect
of any and all Talison Shares held as at the record date for the Share Scheme.

 

19.2                                        Talison Option Register

 

Talison will, until the Option Scheme Consideration has been deposited into the
account nominated by Talison pursuant to clause 18.1 and BidCo has been entered
in the Talison Option Register as the holder of all of the Scheme Options,
maintain, or procure the

 

8

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

 

maintenance of, the Talison Option Register in accordance with the provisions of
this clause 19 and the Talison Option Register in this form and the terms of
this Option Scheme will solely determine entitlements to the Option Scheme
Consideration.

 

19.3                                        Information to be made available to
Bidder

 

Talison must procure that as soon as practicable following the Record Date (and,
in any event, no later than 24 hours thereafter), details of the names,
registered addresses and holdings of Talison Options of every Scheme
Optionholder shown in the Talison Option Register as at the Record Date are made
available to BidCo in electronic form or such other form as reasonably requested
by Bidder prior to the Record Date.

 

19.4                                        Effect of option certificates

 

As from the time at which the Option Scheme Consideration is deposited into the
account nominated by Talison pursuant to clause 18.1, all option certificates
for the Scheme Options will cease to have effect as documents of title, and each
entry on the Talison Option Register at that time and date (other than entries
in respect of BidCo and its successors in title)will cease to have any effect
other than as evidence of entitlement to the Option Scheme Consideration.

 

19.5                                        No disposals after Record Date

 

If this Option Scheme becomes Effective, a Scheme Optionholder, and any person
claiming through that Scheme Optionholder, must not dispose of or purport or
agree to dispose of any Scheme Options or any interest in them after the Record
Date.

 

20.                                               General provisions

 

20.1                                        Effect of Option Scheme

 

This Option Scheme binds Talison and all of the Scheme Optionholders (including
those who did not attend the Option Scheme Meeting or who did not vote at that
meeting or who voted against this Option Scheme at that meeting) and, to the
extent permitted by law, overrides the constitution of Talison and the terms of
the Talison Options.

 

20.2                                        Appointment of agent and attorney

 

On this Scheme becoming Effective, each Scheme Optionholder, without the need
for any further act, is deemed to have irrevocably appointed Talison as its
agent and attorney for the purpose of:

 

(a)                 executing any document or form or doing any other act
necessary to give effect to the terms of this Option Scheme including, without
limitation, the execution of the Scheme Transfer; and

 

(b)                 enforcing the Deed Poll against Bidder and BidCo,

 

and Talison accepts such appointment.  Talison, as agent and attorney of each
Scheme Optionholder, may sub-delegate its functions, authorities or powers under
this clause 20.2 to all or any of its directors and officers (jointly,
severally, or jointly and severally).

 

20.3                                        Enforcement of Deed Poll

 

Talison undertakes in favour of each Scheme Optionholder that it will enforce
the Deed Poll against Bidder and BidCo on behalf of and as agent and attorney
for the Scheme Optionholders.

 

9

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20.4                                        Scheme Optionholders’ agreement and
consent

 

Each Scheme Optionholder irrevocably:

 

(a)                 agrees to the transfer of its Scheme Options, together with
all rights and entitlements attaching to those Scheme Options, to BidCo in
accordance with the terms of this Option Scheme and agrees to the variation,
cancellation or modification of the rights attached to their Scheme Options
constituted by or resulting from this Option Scheme;

 

(b)                 consents to Talison and BidCo doing all things and executing
all deeds, instruments, transfers or other documents as may be necessary,
incidental or expedient to the implementation and performance of this Option
Scheme; and

 

(c)                 acknowledges that this Option Scheme binds all of the Scheme
Optionholders.

 

20.5                                        Transfer with clear title and
warranty by Scheme Optionholders

 

(a)                 To the extent permitted by law, the Scheme Options
transferred to BidCo under this Option Scheme will be transferred free from all
mortgages, charges, liens, Encumbrances and interests of third parties of any
kind, whether legal or otherwise.

 

(b)                 Each Scheme Optionholder is deemed to have warranted to
Talison, in its own right and for the benefit of BidCo, that all their Scheme
Options (including any rights and entitlements attaching to those options) will,
at the date of the transfer of them to BidCo, be free from all mortgages,
charges, liens, Encumbrances and interests of third parties of any kind, whether
legal or otherwise, and restrictions on transfer of any kind, and that they have
full power and capacity to sell and to transfer their Scheme Options to BidCo
under this Option Scheme.

 

20.6                                        Title to Scheme Options

 

On and from the Implementation Date, BidCo will be beneficially entitled to the
Scheme Options transferred to it under this Option Scheme pending registration
by Talison of BidCo in the Talison Option Register as the holder of the Scheme
Options.

 

20.7                                        BidCo directions

 

From the time at which the Option Scheme Consideration is provided in accordance
with clause 18.1 until Talison registers BidCo as the holder of all of the
Scheme Options in the Talison Option Register, each Scheme Optionholder must
take all actions in the capacity of the registered holder of Talison Options as
BidCo directs.

 

20.8                                        Alterations or conditions

 

Talison may, by its counsel or solicitors, and with the consent of Bidder and
BidCo, consent on behalf of all persons concerned, including a Scheme
Optionholder, to any alteration or condition to this Option Scheme which the
Court thinks fit to make or impose.

 

20.9                                        Notices

 

(a)                 Where a notice, transfer, transmission application,
direction or other communication referred to in this Scheme is sent by post to
Talison, it will for all purposes be deemed to be received on the date (if any)
on which it is actually received at Talison’s registered office (and it will not
be deemed to be received in the ordinary course of post) or at the place where
the Talison Option Register is kept.

 

10

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(b)                 The accidental omission to give notice of the Option Scheme
Meeting to any Talison Optionholder, or the non-receipt of such a notice by any
Talison Optionholder, will not, unless ordered by the Court, invalidate the
Option Scheme or the proceedings at the Option Scheme Meeting.

 

20.10                                 Further assurances

 

(a)                 Each of the Scheme Optionholders consents to Talison doing
all things necessary or incidental to give full effect to the implementation of
this Option Scheme and the transactions contemplated by it.

 

(b)                 Talison must do all things and execute all documents
necessary to give full effect to this Option Scheme and the transactions
contemplated by it.

 

20.11                                 Stamp duty

 

BidCo will pay any duty (under the Duties Act 2008 (WA) or otherwise) payable on
the transfer by Scheme Optionholders of the Scheme Options to BidCo.

 

20.12                                 Fees and charges

 

Talison must pay all filing, application or similar fees due in relation to this
Option Scheme.

 

20.13                                 Governing law

 

This Option Scheme is governed by the laws of the State of Western Australia. 
Each party irrevocably and unconditionally submits, in connection with this
Scheme, to the non-exclusive jurisdiction of the Court and any courts which have
jurisdiction to hear appeals from the Court and waives any right to object to
any proceedings being brought in these courts.

 

20.14                                 Limitation of liability

 

None of Talison, Bidder nor BidCo nor any director, officer, secretary of any of
them is liable for anything done or omitted to be done in the performance of
this Option Scheme or the Deed Poll in good faith.

 

11

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Annexure D

Option Scheme Deed Poll

 

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[g190231kg19i001.jpg]

 

Deed Poll
(in respect of the Option Scheme)

 

Rockwood Holdings, Inc.

Bidder

 

[·]

BidCo

 

In favour of each Scheme Optionholder

 

Clayton Utz

Lawyers

Level 27 QV.1  250 St Georges Terrace  Perth  WA  6000  Australia

GPO Box P1214  Perth  WA  6844

T +61 8 9426 8000  F +61 8 9481 3095

 

www.claytonutz.com

 

Our reference 60067/16697/80108485

 

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Contents

 

1.

Definitions and interpretations

2

 

 

 

 

1.1

Definitions

2

 

1.2

Interpretation

2

 

1.3

Nature of deed poll

2

 

 

 

 

2.

Condition

 

3

 

 

 

 

 

2.1

Condition

3

 

2.2

Termination

3

 

2.3

Consequences of termination

3

 

 

 

 

3.

Obligation to pay Option Scheme Consideration

3

 

 

 

4.

Warranties

3

 

 

 

5.

Continuing obligations

4

 

 

 

6.

General

 

4

 

 

 

 

 

6.1

Notices

4

 

6.2

Duty

5

 

6.3

Waiver

5

 

6.4

Variation

6

 

6.5

Cumulative rights

6

 

6.6

Assignment

6

 

6.7

Further action

6

 

6.8

Governing law and jurisdiction

6

 

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Option Scheme Deed poll made on

 

2012

 

Parties                               Rockwood Holdings, Inc. of 100 Overlook
Center, Princeton, New Jersey, 08540, United States of America (Bidder)

 

[·] of [·] (BidCo)

 

In favour of                     Each Scheme Optionholder

 

Recitals

 

R.                 Talison and Bidder have entered into a Scheme Implementation
Agreement dated [·] 2012 (Scheme Implementation Agreement) to provide for the
implementation of the Scheme and the Option Scheme.

 

S.                  The effect of the Option Scheme which will be that BidCo
acquires all of the Scheme Options from Scheme Optionholders in exchange for the
Option Scheme Consideration.

 

T.                  Each of Bidder and BidCo is entering into this deed poll to
covenant in favour of Scheme Optionholders that, in the case of BidCo, it will
observe and perform the obligations contemplated of it under the Option Scheme,
and, in the case of Bidder, that it will procure that BidCo observes and
performs the obligations contemplated of it under the Option Scheme.

 

21.                Definitions and interpretations

 

21.1             Definitions

 

In this deed poll:

 

(a)                 Option Scheme means the proposed scheme of arrangement under
Part 5.1 of the Corporations Act between Talison and the Scheme Optionholders as
contemplated by the Scheme Implementation Agreement; and

 

(b)                 capitalised terms have the meanings given to them in the
Option Scheme or the Scheme Implementation Agreement (as applicable), unless the
context requires otherwise.

 

21.2             Interpretation

 

Clause 1.5 of the Scheme Implementation Agreement applies to the interpretation
of this deed poll, except that references to “this agreement” are to be read as
references to “this deed poll”.

 

21.3             Nature of deed poll

 

Each of Bidder and BidCo acknowledges that:

 

(a)                 this deed poll may be relied on and enforced by any Scheme
Optionholder in accordance with its terms even though the Scheme Optionholders
are not party to it; and

 

(b)                 under the Option Scheme, each Scheme Optionholder
irrevocably appoints Talison as its agent and attorney to enforce this deed poll
against Bidder and BidCo.

 

2

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22.                Condition

 

22.1             Condition

 

The obligations of each of Bidder and BidCo under this deed poll are subject to
the Option Scheme becoming Effective.

 

22.2             Termination

 

If the Scheme Implementation Agreement is terminated or the Option Scheme does
not become Effective on or before the End Date, the obligations of each of
Bidder and BidCo under this deed poll automatically terminate and the terms of
this deed poll will be of no further force or effect.

 

22.3             Consequences of termination

 

If this deed poll is terminated under clause 9.2 then, in addition and without
prejudice to any other rights, powers or remedies available to it:

 

(a)                 each of Bidder and BidCo is released from its obligations to
further perform this deed poll except those obligations under clause 26.2; and

 

(b)                 each Scheme Optionholder retains the rights they have
against Bidder and/or BidCo (as the case may be) in respect of any breach of
this deed poll Bidder which occurs before termination.

 

23.                Obligation to pay Option Scheme Consideration

 

Subject to clause 9:

 

(a)                 BidCo undertakes in favour of each Scheme Optionholder that
it will:

 

(i)                  deposit the aggregate amount of the Option Scheme
Consideration payable to all Scheme Optionholders in cleared funds into the
trust account nominated by Talison in accordance with clause 5.1 of the Option
Scheme; and

 

(ii)                 undertake all other actions attributed to it under the
Option Scheme,

 

in accordance with the Option Scheme; and

 

(b)                 Bidder undertakes in favour of each Scheme Optionholder that
it will procure that BidCo observes and performs all obligations contemplated of
BidCo under the Option Scheme in accordance with the Option Scheme.

 

24.               Warranties

 

(a)                 Bidder represents and warrants that:

 

(i)                  it is a corporation validly existing under the laws of its
place of registration;

 

(ii)                 the execution and delivery by it of this deed poll has been
(or, prior to the Option Scheme becoming Effective, will be) properly authorised
by all necessary corporate action and it has full corporate power and lawful
authority to perform or cause to be performed its obligations under this

 

3

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deed poll and to carry out or cause to be carried out the transactions
contemplated by this deed poll; and

 

(iii)                this deed poll will constitute legally valid and binding
obligations on it enforceable in accordance with its terms (subject to any
necessary stamping) and does not conflict with or result in a breach of a
default under:

 

A.                  its constituent documents; or

 

B.                  any writ, order or injunction, judgment, law, rule or
regulation to which it is party, or by which it is bound.

 

(b)                 BidCo represents and warrants that:

 

(i)                  BidCo is a [·];

 

(ii)                 the execution and delivery by it of this deed poll has been
(or prior to the Scheme becoming Effective, will be) properly authorised by all
necessary action and it has full power and lawful authority to perform or cause
to be performed its obligations under this deed poll and to carry out or cause
to be carried out the transactions contemplated by this deed poll; and

 

(iii)                this deed poll will constitute legally valid and binding
obligations on it enforceable in accordance with its terms (subject to any
necessary stamping) and does not conflict with or result in a breach of a
default under:

 

A.                  its constituent or equivalent documents; or

 

B.                  any writ, order or injunction, judgment, law, rule or
regulation to which it is party, or by which it is bound.

 

25.                Continuing obligations

 

This deed poll is irrevocable and, subject to clause 9, remains in full force
and effect until:

 

(a)                 each of Bidder and BidCo has fully performed its obligations
under this deed poll; or

 

(b)                 the earlier termination of this deed poll under clause 9.2.

 

26.                General

 

26.1             Notices

 

(a)                 All notices or other communication to Bidder or BidCo in
respect of this deed poll must be:

 

(i)                  in writing;

 

(ii)                 signed by the sender or by a person duly authorised by the
sender;

 

(iii)                addressed in the manner and delivered or sent by prepaid
ordinary post to the address, or sent by fax to the fax number, relevantly
described below:

 

4

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Address:

 

100 Overlook Center
Princeton, New Jersey, 08540
United States of America

 

 

 

Facsimile:

 

+1 609 734-6406

 

 

 

Attentions:

 

Thomas J. Riordan

 

 

 

With a copy to:

 

Gilbert + Tobin

 

 

 

Address:

 

2 Park Street, Sydney, 2000
Australia

 

 

 

Facsimile:

 

+61 2 9263 4111

 

 

 

Attention:

 

Peter Cook and David Clee

 

(b)                 Any notice or other communication given in accordance with
clause 26.1(a) will be deemed to have been duly given as follows:

 

(i)                  if delivered by hand, on delivery at the address of the
addressee, unless that delivery is made on a non-Business Day, or after 5.00 pm
on a Business Day, in which case that communication will be deemed to be
received at 9.00 am on the next Business Day;

 

(ii)                 if sent by pre-paid mail, on the third Business Day after
posting; and

 

(iii)                if sent by facsimile, at the local time (in the place of
receipt of the facsimile) which then equates to the time at which that facsimile
is sent as shown on the transmission report which is produced by the machine
from which that facsimile is sent and which confirms transmission of that
facsimile in its entirety, unless that local time is a non-Business Day, or
after 5.00 pm on a Business Day, in which case that communication will be deemed
to be received at 9.00 am on the next Business Day.

 

26.2             Duty

 

BidCo will:

 

(a)                 pay or procure the payment of all transaction duties and any
related fines and penalties in respect of this deed poll, the performance of
this deed poll and each transaction effected by or made under this deed poll
(including in connection with the transfer of Scheme Options to BidCo in
accordance with the terms of the Option Scheme); and

 

(b)                 indemnify each Scheme Optionholder against any liability
arising from failure to comply with clause 13.2(a).

 

26.3             Waiver

 

(a)                 Waiver of any right arising from a breach of this deed poll
or of any right, power, authority, discretion or remedy arising upon default
under this deed poll must be in writing and signed by the party granting the
waiver.

 

(b)                 A failure or delay in exercise, or partial exercise, of:

 

(i)                  a right arising from a breach of this deed poll; or

 

5

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(ii)                 a right, power, authority, discretion or remedy created or
arising upon default under this deed poll,

 

does not result in a waiver of that right, power, authority, discretion or
remedy.

 

(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 deed poll or on a default under this deed poll 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 the exercise of a right, power, authority, discretion or remedy by
that other party.

 

(e)                 This clause 26.3 may not itself be waived except in writing.

 

26.4             Variation

 

This deed poll may be amended only by another deed poll entered into by Bidder
and BidCo, and then only if the amendment is agreed to by Talison and, if after
the First Court Date,  the Court indicates that the amendment would not preclude
approval of the Option Scheme.

 

26.5             Cumulative rights

 

The rights, powers and remedies of Bidder, BidCo and each Scheme Optionholder
under this deed poll are cumulative and do not exclude any other rights, powers
or remedies provided by the law independently of this deed poll.

 

26.6             Assignment

 

The rights and obligations of each of Bidder and BidCo and the rights of each
Scheme Optionholder under this deed poll are personal and must not be assigned,
charged or otherwise dealt with at law or in equity.

 

26.7             Further action

 

Bidder and BidCo will promptly do all things and execute and deliver all further
documents required by law to give effect to this deed poll and the transactions
contemplated by it.

 

26.8             Governing law and jurisdiction

 

(a)                 This deed poll is governed by the laws of the state of
Western Australia.

 

(b)                 Each of Bidder and BidCo irrevocably and unconditionally
submits to the non-exclusive jurisdiction of the courts of the state of Western
Australia for any proceedings in connection with this deed poll and waives any
right it may have to object to an action being brought in those courts including
by claiming that the action has been brought in an inconvenient forum.

 

6

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Executed as a deed poll.

 

 

Executed by
Rockwood Holdings, Inc.
in accordance with its constituent documents and the laws of the place of its
incorporation or registration, and in the presence of:

 

 

 

 

 

 

 

 

Signature of [·]

 

Signature of [·]

 

 

 

 

 

 

Name of [·]

 

Name of [·]

 

 

 

 

 

 

Executed by
[·]:

 

 

 

 

 

 

 

 

Signature of [·]

 

Signature of [·]

 

 

 

 

 

 

Name of [·]

 

Name of [·]

 

7

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