ALBEMARLE CORP (Form: 10-Q, Received: 08/07/2019 16:59:12)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

_________________________________________________

FORM 10-Q

_________________________________________________



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended June 30, 2019



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-12658

_________________________________________________

ALBEMARLE CORPORATION

(Exact name of registrant as specified in its charter)

_________________________________________________



Virginia		54-1692118
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4250 Congress Street, Suite 900

Charlotte, North Carolina 28209

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code - (980) 299-5700

_________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
COMMON STOCK, $.01 Par Value	ALB	New York Stock Exchange

Number of shares of common stock, $.01 par value, outstanding as of July 31, 2019: 105,986,264

Table of Contents

ALBEMARLE CORPORATION

INDEX – FORM 10-Q




		Page Number(s)
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Consolidated Statements of Income - Three Months and Six Months Ended June 30, 2019 and 2018	3

	Consolidated Statements of Comprehensive Income - Three Months and Six Months Ended June 30, 2019 and 2018	4

	Condensed Consolidated Balance Sheets - June 30, 2019 and December 31, 2018	5

	Consolidated Statements of Changes in Equity - Three Months and Six Months Ended June 30, 2019 and 2018	6

	Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2019 and 2018	7

	Notes to the Condensed Consolidated Financial Statements	8-24

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24-41

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41

Item 4.	Controls and Procedures	42

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 6.	Exhibits	43

SIGNATURES		44

EXHIBITS

Table of Contents

PART I. FINANCIAL INFORMATION



Item 1.	Financial Statements (Unaudited).

ALBEMARLE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

(Unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net sales	$	885,052		$	853,874		$	1,717,116		$	1,675,503
Cost of goods sold	559,138			542,518			1,107,716			1,059,168
Gross profit	325,914			311,356			609,400			616,335
Selling, general and administrative expenses	126,715			123,637			240,070			225,007
Research and development expenses	13,462			16,074			28,439			37,060
Gain on sale of business	—			(218,705		)	—			(218,705		)
Operating profit	185,737			390,350			340,891			572,973
Interest and financing expenses	(11,601		)	(13,308		)	(24,187		)	(26,846		)
Other (expenses) income, net	(7,065		)	(5,223		)	4,226			(35,699		)
Income before income taxes and equity in net income of unconsolidated investments	167,071			371,819			320,930			510,428
Income tax expense	30,411			80,102			67,925			100,463
Income before equity in net income of unconsolidated investments	136,660			291,717			253,005			409,965
Equity in net income of unconsolidated investments (net of tax)	38,310			18,969			73,491			39,646
Net income	174,970			310,686			326,496			449,611
Net income attributable to noncontrolling interests	(20,772		)	(8,225		)	(38,729		)	(15,390		)
Net income attributable to Albemarle Corporation	$	154,198		$	302,461		$	287,767		$	434,221
Basic earnings per share	$	1.46		$	2.76		$	2.72		$	3.94
Diluted earnings per share	$	1.45		$	2.73		$	2.71		$	3.90
Weighted-average common shares outstanding – basic	105,961			109,671			105,880			110,176
Weighted-average common shares outstanding – diluted	106,316			110,659			106,336			111,263

See accompanying Notes to the Condensed Consolidated Financial Statements.

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ALBEMARLE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands)

(Unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net income	$	174,970		$	310,686		$	326,496		$	449,611
Other comprehensive income (loss), net of tax:
Foreign currency translation	10,544			(150,857		)	(311		)	(85,966		)
Pension and postretirement benefits	6			23			13			26
Net investment hedge	(3,037		)	22,989			267			8,568
Interest rate swap	641			642			1,282			1,284
Total other comprehensive income (loss), net of tax	8,154			(127,203		)	1,251			(76,088		)
Comprehensive income	183,124			183,483			327,747			373,523
Comprehensive income attributable to noncontrolling interests	(20,799		)	(7,962		)	(38,709		)	(15,313		)
Comprehensive income attributable to Albemarle Corporation	$	162,325		$	175,521		$	289,038		$	358,210

See accompanying Notes to the Condensed Consolidated Financial Statements.

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ALBEMARLE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)



	June 30,			December 31,
	2019			2018
Assets
Current assets:
Cash and cash equivalents	$	398,183		$	555,320
Trade accounts receivable, less allowance for doubtful accounts (2019 – $4,513; 2018 – $4,460)	624,808			605,712
Other accounts receivable	105,207			52,059
Inventories	814,022			700,540
Other current assets	94,417			84,790
Total current assets	2,036,637			1,998,421
Property, plant and equipment, at cost	5,248,994			4,799,063
Less accumulated depreciation and amortization	1,858,369			1,777,979
Net property, plant and equipment	3,390,625			3,021,084
Investments	541,014			528,722
Other assets	186,592			80,135
Goodwill	1,566,464			1,567,169
Other intangibles, net of amortization	373,082			386,143
Total assets	$	8,094,414		$	7,581,674
Liabilities And Equity
Current liabilities:
Accounts payable	$	558,839		$	522,516
Accrued expenses	268,666			257,323
Current portion of long-term debt	490,691			307,294
Dividends payable	38,733			35,169
Current operating lease liability	19,441			—
Income taxes payable	23,611			60,871
Total current liabilities	1,399,981			1,183,173
Long-term debt	1,398,419			1,397,916
Postretirement benefits	46,025			46,157
Pension benefits	279,342			285,396
Other noncurrent liabilities	609,209			526,942
Deferred income taxes	387,035			382,982
Commitments and contingencies (Note 9)
Equity:
Albemarle Corporation shareholders’ equity:
Common stock, $.01 par value, issued and outstanding – 105,971 in 2019 and 105,616 in 2018	1,059			1,056
Additional paid-in capital	1,373,213			1,368,897
Accumulated other comprehensive loss	(349,411		)	(350,682		)
Retained earnings	2,775,940			2,566,050
Total Albemarle Corporation shareholders’ equity	3,800,801			3,585,321
Noncontrolling interests	173,602			173,787
Total equity	3,974,403			3,759,108
Total liabilities and equity	$	8,094,414		$	7,581,674

See accompanying Notes to the Condensed Consolidated Financial Statements.

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ALBEMARLE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)



(In Thousands, Except Share Data)						Additional Paid-in Capital			Accumulated Other Comprehensive (Loss) Income			Retained Earnings			Total Albemarle Shareholders’ Equity			Noncontrolling Interests			Total Equity
	Common Stock
	Shares		Amounts
Balance at March 31, 2019	105,950,011		$	1,059		$	1,368,069		$	(357,538	)	$	2,660,684		$	3,672,274		$	191,765		$	3,864,039
Net income												154,198			154,198			20,772			174,970
Other comprehensive income									8,127						8,127			27			8,154
Cash dividends declared, $0.3675 per common share												(38,942		)	(38,942		)	(38,962		)	(77,904		)
Stock-based compensation						4,930									4,930						4,930
Exercise of stock options	11,781		—			529									529						529
Issuance of common stock, net	16,713		—			—									—						—
Shares withheld for withholding taxes associated with common stock issuances	(7,041	)	—			(315		)							(315		)				(315		)
Balance at June 30, 2019	105,971,464		$	1,059		$	1,373,213		$	(349,411	)	$	2,775,940		$	3,800,801		$	173,602		$	3,974,403

Balance at March 31, 2018	110,756,114		$	1,107		$	1,855,321		$	(174,739	)	$	2,118,621		$	3,800,310		$	143,120		$	3,943,430
Net income												302,461			302,461			8,225			310,686
Other comprehensive loss									(126,940		)				(126,940		)	(263		)	(127,203		)
Cash dividends declared, $0.335 per common share												(36,437		)	(36,437		)	(7,378		)	(43,815		)
Stock-based compensation						4,991									4,991						4,991
Exercise of stock options	16,226		—			642									642						642
Shares repurchased	(2,354,133	)	(24		)	(249,976		)							(250,000		)				(250,000		)
Issuance of common stock, net	38,487		1			(1		)							—						—
Shares withheld for withholding taxes associated with common stock issuances	(15,331	)	—			(1,451		)							(1,451		)				(1,451		)
Balance at June 30, 2018	108,441,363		$	1,084		$	1,609,526		$	(301,679	)	$	2,384,645		$	3,693,576		$	143,704		$	3,837,280

Balance at January 1, 2019	105,616,028		$	1,056		$	1,368,897		$	(350,682	)	$	2,566,050		$	3,585,321		$	173,787		$	3,759,108
Net income												287,767			287,767			38,729			326,496
Other comprehensive income (loss)									1,271						1,271			(20		)	1,251
Cash dividends declared, $0.735 per common share												(77,877		)	(77,877		)	(38,962		)	(116,839		)
Stock-based compensation						12,197									12,197						12,197
Exercise of stock options	125,909		1			3,204									3,205						3,205
Issuance of common stock, net	356,824		3			(3		)							—						—
Increase in ownership interest of noncontrolling interest						(513		)							(513		)	68			(445		)
Shares withheld for withholding taxes associated with common stock issuances	(127,297	)	(1		)	(10,569		)							(10,570		)				(10,570		)
Balance at June 30, 2019	105,971,464		$	1,059		$	1,373,213		$	(349,411	)	$	2,775,940		$	3,800,801		$	173,602		$	3,974,403

Balance at January 1, 2018	110,546,674		$	1,105		$	1,863,949		$	(225,668	)	$	2,035,163		$	3,674,549		$	143,147		$	3,817,696
Net income												434,221			434,221			15,390			449,611
Other comprehensive loss									(76,011		)				(76,011		)	(77		)	(76,088		)
Cash dividends declared, $0.67 per common share												(73,540		)	(73,540		)	(14,756		)	(88,296		)
Cumulative adjustment from adoption of income tax standard update (Note 1)												(11,199		)	(11,199		)				(11,199		)
Stock-based compensation						10,728									10,728						10,728
Exercise of stock options	28,966		—			1,288									1,288						1,288
Shares repurchased	(2,354,133	)	(24		)	(249,976		)							(250,000		)				(250,000		)
Issuance of common stock, net	357,927		4			(4		)							—						—
Shares withheld for withholding taxes associated with common stock issuances	(138,071	)	(1		)	(16,459		)							(16,460		)				(16,460		)
Balance at June 30, 2018	108,441,363		$	1,084		$	1,609,526		$	(301,679	)	$	2,384,645		$	3,693,576		$	143,704		$	3,837,280

See accompanying Notes to the Condensed Consolidated Financial Statements.

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ALBEMARLE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)



	Six Months Ended June 30,
	2019			2018
Cash and cash equivalents at beginning of year	$	555,320		$	1,137,303
Cash flows from operating activities:
Net income	326,496			449,611
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	102,231			100,804
Gain on sale of business	—			(218,705		)
Gain on sale of property	(11,079		)	—
Stock-based compensation and other	10,136			8,076
Equity in net income of unconsolidated investments (net of tax)	(73,491		)	(39,646		)
Dividends received from unconsolidated investments and nonmarketable securities	60,291			30,045
Pension and postretirement expense (benefit)	1,055			(1,793		)
Pension and postretirement contributions	(7,778		)	(7,089		)
Unrealized gain on investments in marketable securities	(577		)	(625		)
Deferred income taxes	3,570			30,708
Working capital changes	(223,238		)	(91,189		)
Other, net	11,672			(36,340		)
Net cash provided by operating activities	199,288			223,857
Cash flows from investing activities:
Acquisitions, net of cash acquired	—			(7,643		)
Capital expenditures	(415,626		)	(280,945		)
Cash proceeds from divestitures, net	—			416,711
Proceeds from sale of property and equipment	10,356			—
Sales of marketable securities, net	908			(439		)
Investments in equity and other corporate investments	(2,549		)	(1,979		)
Net cash (used in) provided by investing activities	(406,911		)	125,705
Cash flows from financing activities:
Other borrowings (repayments), net	183,052			(211,833		)
Dividends paid to shareholders	(74,313		)	(72,484		)
Dividends paid to noncontrolling interests	(38,962		)	(7,378		)
Repurchases of common stock	—			(250,000		)
Proceeds from exercise of stock options	3,205			1,288
Withholding taxes paid on stock-based compensation award distributions	(10,570		)	(16,460		)
Other	(445		)	—
Net cash provided by (used in) financing activities	61,967			(556,867		)
Net effect of foreign exchange on cash and cash equivalents	(11,481		)	(21,854		)
Decrease in cash and cash equivalents	(157,137		)	(229,159		)
Cash and cash equivalents at end of period	$	398,183		$	908,144

See accompanying Notes to the Condensed Consolidated Financial Statements.

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Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1—Basis of Presentation:

In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Albemarle Corporation and our wholly-owned, majority-owned and controlled subsidiaries (collectively, “Albemarle,” “we,” “us,” “our” or “the Company”) contain all adjustments necessary for a fair statement, in all material respects, of our condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018, our consolidated statements of income, consolidated statements of comprehensive income and consolidated statements of changes in equity for the three-month and six-month periods ended June 30, 2019 and 2018 and our condensed consolidated statements of cash flows for the six-month periods ended June 30, 2019 and 2018. All adjustments are of a normal and recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the Securities and Exchange Commission (“SEC”) on February 27, 2019. The December 31, 2018 condensed consolidated balance sheet data herein was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles (“GAAP”) in the United States (“U.S.”). The results of operations for the three-month and six-month periods ended June 30, 2019 are not necessarily indicative of the results to be expected for the full year. The six-month period ended June 30, 2018 includes an $11.2 million cumulative adjustment to decrease Retained earnings due to the adoption of accounting guidance that eliminated the deferral of tax effects of intra-entity asset transfers other than inventory.

Effective January 1, 2019, we adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” and all related amendments using the modified retrospective method. Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of $139.1 million as of January 1, 2019. Comparative periods have not been restated and are reported in accordance with our historical accounting. The standard did not have an impact on our consolidated Net income or cash flows. In addition, as a result of the adoption of this new standard, we have implemented internal controls and system changes to prepare the financial information.

As part of this adoption, we have elected the practical expedient relief package allowed by the new standard, which does not require the reassessment of (1) whether existing contracts contain a lease, (2) the lease classification or (3) unamortized initial direct costs for existing leases; and have elected to apply hindsight to the existing leases. Additionally, we have made accounting policy elections such as exclusion of short-term leases (leases with a term of 12 months or less and which do not include a purchase option that we are reasonably certain to exercise) from the balance sheet presentation, use of portfolio approach in determination of discount rate and accounting for non-lease components in a contract as part of a single lease component for all asset classes.

See Note 2, “Leases” and Note 17, “Recently Issued Accounting Pronouncements,” for additional information. In addition, see below for a description of our updated lease accounting policy.

Leases

We determine if an arrangement is a lease at inception. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As an implicit rate for most of our leases is not determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease payments for the initial measurement of lease ROU assets and lease liabilities include fixed and variable payments based on an index or a rate. Variable lease payments that are not index or rate based are recorded as expenses when incurred. Our variable lease payments typically include real estate taxes, insurance costs and common-area maintenance. The operating lease ROU asset also includes any lease payments made, net of lease incentives. The lease term is the non-cancelable period of the lease, including any options to extend, purchase or terminate the lease when it is reasonably certain that we will exercise that option. We amortize the operating lease ROU assets on a straight-line basis over the period of the lease and the finance lease ROU assets on a straight-line basis over the shorter of their estimated useful lives or the lease terms. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.

NOTE 2—Leases:

We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms generally range from 1 to 30 years for real estate leases, and from 2 to 15 years for non-real estate leases. Leases with an initial

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Notes to the Condensed Consolidated Financial Statements

(Unaudited)

term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.

Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The following table provides details of our lease contracts for the three-month and six-month periods ended June 30, 2019 (in thousands):



	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Operating lease cost	$	8,381	$	17,802
Finance lease cost:
Amortization of right of use assets	136		314
Interest on lease liabilities	32		65
Total finance lease cost	168		379

Short-term lease cost	1,869		3,835
Variable lease cost	1,432		2,518
Total lease cost	$	11,850	$	24,534

Supplemental cash flow information related to our lease contracts for the six months ended June 30, 2019 is as follows (in thousands):



	Six Months Ended
	June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	15,775
Operating cash flows from finance leases	65
Financing cash flows from finance leases	341
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	526

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Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at June 30, 2019 is as follows (in thousands, except as noted):



	June 30, 2019
Operating leases:
Other assets	$	124,872

Current operating lease liability	19,441
Other noncurrent liabilities	106,788
Total operating lease liabilities	126,229
Finance leases:
Net property, plant and equipment	4,089

Current portion of long-term debt	691
Long-term debt	3,459
Total finance lease liabilities	4,150
Weighted average remaining lease term (in years):
Operating leases	11.7
Finance leases	6.2
Weighted average discount rate (%):
Operating leases	3.87		%
Finance leases	2.89		%

Maturities of lease liabilities as of June 30, 2019 were as follows (in thousands):



	Operating Leases		Finance Leases
Remainder of 2019	$	12,495	$	408
2020	21,003		771
2021	12,685		682
2022	10,649		682
2023	10,246		682
Thereafter	93,748		1,364
Total lease payments	160,826		4,589
Less imputed interest	34,597		439
Total	$	126,229	$	4,150

As of December 31, 2018, future non-cancelable minimum lease payments were $25.6 million in 2019; $17.9 million in 2020; $12.5 million in 2021; $10.8 million in 2022; $10.1 million in 2023; and $87.1 million thereafter.

NOTE 3—Goodwill and Other Intangibles:

The following table summarizes the changes in goodwill by reportable segment for the six months ended June 30, 2019 (in thousands):



	Lithium			Bromine Specialties		Catalysts			All Other		Total
Balance at December 31, 2018	$	1,354,779		$	20,319	$	185,485		$	6,586	$	1,567,169
Foreign currency translation adjustments	(626		)	—		(79		)	—		(705		)
Balance at June 30, 2019	$	1,354,153		$	20,319	$	185,406		$	6,586	$	1,566,464

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Notes to the Condensed Consolidated Financial Statements

(Unaudited)

The following table summarizes the changes in other intangibles and related accumulated amortization for the six months ended June 30, 2019 (in thousands):



	Customer Lists and Relationships			Trade Names and Trademarks^(a)			Patents and Technology			Other			Total
Gross Asset Value
Balance at December 31, 2018	$	428,372		$	18,453		$	55,801		$	43,708		$	546,334
Foreign currency translation adjustments and other	940			(12		)	(46		)	(84		)	798
Balance at June 30, 2019	$	429,312		$	18,441		$	55,755		$	43,624		$	547,132
Accumulated Amortization
Balance at December 31, 2018	$	(95,797	)	$	(8,176	)	$	(35,248	)	$	(20,970	)	$	(160,191	)
Amortization	(11,695		)	—			(707		)	(1,319		)	(13,721		)
Foreign currency translation adjustments and other	(252		)	8			23			83			(138		)
Balance at June 30, 2019	$	(107,744	)	$	(8,168	)	$	(35,932	)	$	(22,206	)	$	(174,050	)
Net Book Value at December 31, 2018	$	332,575		$	10,277		$	20,553		$	22,738		$	386,143
Net Book Value at June 30, 2019	$	321,568		$	10,273		$	19,823		$	21,418		$	373,082


(a)	Net Book Value includes only indefinite-lived intangible assets.

NOTE 4—Income Taxes:

The effective income tax rate for the three-month and six-month periods ended June 30, 2019 was 18.2% and 21.2%, respectively, compared to 21.5% and 19.7% for the three-month and six-month periods ended June 30, 2018, respectively. The Company’s effective income tax rate fluctuates based on, among other factors, its level and location of income. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three-month and six-month periods ended June 30, 2019 and 2018 was impacted by a variety of factors, primarily stemming from the location in which income was earned. Income tax expense for the three-month and six-month periods ended June 30, 2018 included discrete tax adjustments of $42.0 million for the disposition of the polyolefin catalysts and components portion of our Performance Catalyst Solutions (“PCS”) business (“Polyolefin Catalysts Divestiture”) and $8.5 million for a valuation allowance recorded due to a foreign restructuring plan, partially offset by an $8.0 million benefit for tax accounting method changes. In addition, Income tax expense for the six-month period ended June 30, 2018 included discrete tax benefits related to adjustments recorded for the U.S. Tax Cuts and Jobs Act (“TCJA”) and excess tax benefits realized from stock-based compensation arrangements.

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Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 5—Earnings Per Share:

Basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2019 and 2018 are calculated as follows (in thousands, except per share amounts):



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Basic earnings per share
Numerator:
Net income attributable to Albemarle Corporation	$	154,198	$	302,461	$	287,767	$	434,221
Denominator:
Weighted-average common shares for basic earnings per share	105,961		109,671		105,880		110,176
Basic earnings per share	$	1.46	$	2.76	$	2.72	$	3.94

Diluted earnings per share
Numerator:
Net income attributable to Albemarle Corporation	$	154,198	$	302,461	$	287,767	$	434,221
Denominator:
Weighted-average common shares for basic earnings per share	105,961		109,671		105,880		110,176
Incremental shares under stock compensation plans	355		988		456		1,087
Weighted-average common shares for diluted earnings per share	106,316		110,659		106,336		111,263
Diluted earnings per share	$	1.45	$	2.73	$	2.71	$	3.90

At June 30, 2019, there were 214,904 common stock equivalents not included in the computation of diluted earnings per share because their effect would have been anti-dilutive.

On February 26, 2019, the Company increased the regular quarterly dividend by 10% to $0.3675 per share. On May 8, 2019, the Company declared a cash dividend of $0.3675 per share, which was paid on July 1, 2019 to shareholders of record at the close of business as of June 14, 2019. On July 24, 2019, the Company declared a cash dividend of $0.3675 per share, which is payable on October 1, 2019 to shareholders of record at the close of business as of September 13, 2019.

NOTE 6—Inventories:

The following table provides a breakdown of inventories at June 30, 2019 and December 31, 2018 (in thousands):



	June 30,		December 31,
	2019		2018
Finished goods^(a)	$	574,880	$	482,355
Raw materials and work in process^(b)	172,607		158,290
Stores, supplies and other	66,535		59,895
Total	$	814,022	$	700,540


(a)	Increase primarily due to the build-up of inventory in our Lithium and Catalysts segments to meet higher projected sales during the remainder of 2019.


(b)	Included $69.6 million and $71.4 million at June 30, 2019 and December 31, 2018, respectively, of work in process in our Lithium segment. Raw materials increased primarily in Lithium to meet higher projected sales during the remainder of 2019.

NOTE 7—Investments:

The Company holds a 49% equity interest in Windfield Holdings Pty. Ltd. (“Windfield”), where the ownership parties share risks and benefits disproportionate to their voting interests. As a result, the Company considers Windfield to be a variable interest entity (“VIE”), however this investment is not consolidated as the Company is not the primary beneficiary. The carrying amount of our 49% equity interest in Windfield, which is our most significant VIE, was $358.7 million and $349.6 million at June 30, 2019 and December 31, 2018, respectively. The Company’s aggregate net investment in all other entities which it considers to be VIEs for which the Company is not the primary beneficiary was $8.2 million and $8.1 million at June 30, 2019 and December 31, 2018, respectively. Our unconsolidated VIEs are reported in Investments on the condensed consolidated

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balance sheets. The Company does not guarantee debt for, or have other financial support obligations to, these entities, and its maximum exposure to loss in connection with its continuing involvement with these entities is limited to the carrying value of the investments.

NOTE 8—Long-Term Debt:

Long-term debt at June 30, 2019 and December 31, 2018 consisted of the following (in thousands):



	June 30,		December 31,
	2019		2018
1.875% Senior notes, net of unamortized discount and debt issuance costs of $2,355 at June 30, 2019 and $2,841 at December 31, 2018	$	444,287	$	444,155
4.15% Senior notes, net of unamortized discount and debt issuance costs of $2,641 at June 30, 2019 and $2,884 at December 31, 2018	422,359		422,116
4.50% Senior notes, net of unamortized discount and debt issuance costs of $439 at June 30, 2019 and $589 at December 31, 2018	174,777		174,626
5.45% Senior notes, net of unamortized discount and debt issuance costs of $3,927 at June 30, 2019 and $4,004 at December 31, 2018	346,073		345,996
Commercial paper notes	490,000		306,606
Variable-rate foreign bank loans	7,464		7,216
Finance lease obligations	4,150		4,495
Total long-term debt	1,889,110		1,705,210
Less amounts due within one year	490,691		307,294
Long-term debt, less current portion	$	1,398,419	$	1,397,916

Current portion of long-term debt at June 30, 2019 consisted primarily of commercial paper notes with a weighted-average interest rate of approximately 2.67% and a weighted-average maturity of 32 days.

The carrying value of our 1.875% Euro-denominated senior notes has been designated as an effective hedge of our net investment in certain foreign subsidiaries where the Euro serves as the functional currency, and gains or losses on the revaluation of these senior notes to our reporting currency are recorded in accumulated other comprehensive loss. During the three-month and six-month periods ended June 30, 2019, (losses) gains of ($3.0) million and $0.3 million (net of income taxes), respectively, and during the three-month and six-month periods ended June 30, 2018, gains of $23.0 million and $8.6 million (net of income taxes), respectively, were recorded in accumulated other comprehensive loss in connection with the revaluation of these senior notes to our reporting currency.

NOTE 9—Commitments and Contingencies:

Environmental

We had the following activity in our recorded environmental liabilities for the six months ended June 30, 2019 (in thousands):



Beginning balance at December 31, 2018	$	49,569
Expenditures	(3,133		)
Accretion of discount	567
Additions and changes in estimates	1,070
Foreign currency translation adjustments and other	(1,269		)
Ending balance at June 30, 2019	46,804
Less amounts reported in Accrued expenses	9,654
Amounts reported in Other noncurrent liabilities	$	37,150

Environmental remediation liabilities included discounted liabilities of $38.6 million and $40.4 million at June 30, 2019 and December 31, 2018, respectively, discounted at rates with a weighted-average of 3.7%, with the undiscounted amount totaling $72.1 million and $74.5 million at June 30, 2019 and December 31, 2018, respectively. For certain locations where the

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Company is operating groundwater monitoring and/or remediation systems, prior owners or insurers have assumed all or most of the responsibility.

The amounts recorded represent our future remediation and other anticipated environmental liabilities. These liabilities typically arise during the normal course of our operational and environmental management activities or at the time of acquisition of the site, and are based on internal analysis as well as input from outside consultants. As evaluations proceed at each relevant site, changes in risk assessment practices, remediation techniques and regulatory requirements can occur, therefore such liability estimates may be adjusted accordingly. The timing and duration of remediation activities at these sites will be determined when evaluations are completed. Although it is difficult to quantify the potential financial impact of these remediation liabilities, management estimates (based on the latest available information) that there is a reasonable possibility that future environmental remediation costs associated with our past operations, could be an additional $10 million to $30 million before income taxes, in excess of amounts already recorded. The variability of this range is primarily driven by possible environmental remediation activity at a formerly owned site where we indemnify the buyer through a set cutoff date in 2024.

We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis although any such sum could have a material adverse impact on our results of operations, financial condition or cash flows in a particular quarterly reporting period.

Litigation

We are involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings seeking remediation under environmental laws, such as the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, products liability, breach of contract liability and premises liability litigation. Where appropriate, we may establish financial reserves for such proceedings. We also maintain insurance to mitigate certain of such risks. Costs for legal services are generally expensed as incurred.

As previously reported in 2018, following receipt of information regarding potential improper payments being made by third party sales representatives of our Refining Solutions business, within our Catalysts segment, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the Foreign Corrupt Practices Act and other potentially applicable laws. Based on this internal investigation, we have voluntarily self-reported potential issues relating to the use of third party sales representatives in our Refining Solutions business, within our Catalysts segment, to the U.S. Department of Justice (“DOJ”), the SEC, and the Dutch Public Prosecutor (“DPP”), and are cooperating with the DOJ, the SEC, and DPP in their review of these matters. In connection with our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures.

At this time, we are unable to predict the duration, scope, result or related costs associated with any investigations by the DOJ, the SEC, or DPP. We are unable to predict what, if any, action may be taken by the DOJ, the SEC, or DPP, or what penalties or remedial actions they may seek to impose. Any determination that our operations or activities are not in compliance with existing laws or regulations could result in the imposition of fines, penalties, disgorgement, equitable relief, or other losses. We do not believe, however, that any fines, penalties, disgorgement, equitable relief or other losses would have a material adverse effect on our financial condition or liquidity.

Indemnities

We are indemnified by third parties in connection with certain matters related to acquired and divested businesses. Although we believe that the financial condition of those parties who may have indemnification obligations to the Company is generally sound, in the event the Company seeks indemnity under any of these agreements or through other means, there can be no assurance that any party who may have obligations to indemnify us will adhere to their obligations and we may have to resort to legal action to enforce our rights under the indemnities.

The Company may be subject to indemnity claims relating to properties or businesses it divested, including properties or businesses of acquired businesses that were divested prior to the completion of the acquisition. In the opinion of management, and based upon information currently available, the ultimate resolution of any indemnification obligations owed to the Company or by the Company is not expected to have a material effect on the Company’s financial condition, results of operations or cash flows. The Company had approximately $29.0 million and $45.3 million at June 30, 2019 and December 31, 2018, respectively, recorded in Other noncurrent liabilities, and $21.4 million recorded in Accrued expenses at June 30, 2019, related to the indemnification of certain income and non-income tax liabilities associated with the Chemetall Surface Treatment entities sold, as well as the proposed settlement of an ongoing audit of a previously disposed business in Germany.

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Other

We have contracts with certain of our customers, which serve as guarantees on product delivery and performance according to customer specifications that can cover both shipments on an individual basis as well as blanket coverage of multiple shipments under certain customer supply contracts. The financial coverage provided by these guarantees is typically based on a percentage of net sales value.

NOTE 10—Segment Information:

Our three reportable segments include: (1) Lithium; (2) Bromine Specialties; and (3) Catalysts. Each segment has a dedicated team of sales, research and development, process engineering, manufacturing and sourcing, and business strategy personnel and has full accountability for improving execution through greater asset and market focus, agility and responsiveness. This business structure aligns with the markets and customers we serve through each of the segments. This structure also facilitates the continued standardization of business processes across the organization, and is consistent with the manner in which information is presently used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions.

Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the fine chemistry services business that does not fit into any of our core businesses.

The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and OPEB service cost (which represents the benefits earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments, All Other, and Corporate, whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes intersegment transfers of raw materials at cost and allocations for certain corporate costs.

The Company’s chief operating decision maker uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources. The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted on a consistent basis for certain non-recurring or unusual items in a balanced manner and on a segment basis. These non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges, non-operating pension and OPEB items and other significant non-recurring items. In addition, management uses adjusted EBITDA for business planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. The Company has reported adjusted EBITDA because management believes it provides transparency to investors and enables period-to-period comparability of financial performance. Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, U.S. GAAP. Adjusted EBITDA should not be considered as an alternative to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, or any other financial measure reported in accordance with U.S. GAAP.

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	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
	(In thousands)
Net sales:
Lithium	$	324,758		$	317,563		$	616,644		$	615,595
Bromine Specialties	255,433			220,514			504,485			446,153
Catalysts	266,301			284,966			517,949			545,683
All Other	38,560			30,748			78,038			67,913
Corporate	—			83			—			159
Total net sales	$	885,052		$	853,874		$	1,717,116		$	1,675,503

Adjusted EBITDA:
Lithium	$	141,779		$	141,617		$	257,395		$	272,631
Bromine Specialties	81,332			69,367			159,929			139,336
Catalysts	66,875			75,102			126,946			142,932
All Other	11,240			(101		)	18,483			3,761
Corporate	(39,326		)	(27,423		)	(74,986		)	(51,380		)
Total adjusted EBITDA	$	261,900		$	258,562		$	487,767		$	507,280

See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):

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	Lithium			Bromine Specialties		Catalysts			Reportable Segments Total			All Other			Corporate			Consolidated Total
Three months ended June 30, 2019
Net income (loss) attributable to Albemarle Corporation	$	117,303		$	69,616	$	54,124		$	241,043		$	9,118		$	(95,963	)	$	154,198
Depreciation and amortization	24,365			11,716		12,751			48,832			2,122			1,994			52,948
Acquisition and integration related costs^(a)	—			—		—			—			—			4,990			4,990
Interest and financing expenses	—			—		—			—			—			11,601			11,601
Income tax expense	—			—		—			—			—			30,411			30,411
Non-operating pension and OPEB items	—			—		—			—			—			(676		)	(676		)
Other^(b)	111			—		—			111			—			8,317			8,428
Adjusted EBITDA	$	141,779		$	81,332	$	66,875		$	289,986		$	11,240		$	(39,326	)	$	261,900
Three months ended June 30, 2018
Net income (loss) attributable to Albemarle Corporation	$	117,292		$	59,673	$	280,887		$	457,852		$	(2,079	)	$	(153,312	)	$	302,461
Depreciation and amortization	24,325			9,694		12,920			46,939			1,978			1,557			50,474
Gain on sale of business^(c)	—			—		(218,705		)	(218,705		)	—			—			(218,705		)
Acquisition and integration related costs^(a)	—			—		—			—			—			6,510			6,510
Interest and financing expenses	—			—		—			—			—			13,308			13,308
Income tax expense	—			—		—			—			—			80,102			80,102
Non-operating pension and OPEB items	—			—		—			—			—			(2,204		)	(2,204		)
Legal accrual^(d)	—			—		—			—			—			10,416			10,416
Albemarle Foundation contribution^(e)	—			—		—			—			—			15,000			15,000
Other^(f)	—			—		—			—			—			1,200			1,200
Adjusted EBITDA	$	141,617		$	69,367	$	75,102		$	286,086		$	(101	)	$	(27,423	)	$	258,562
Six months ended June 30, 2019
Net income (loss) attributable to Albemarle Corporation	$	210,472		$	137,096	$	101,983		$	449,551		$	14,324		$	(176,108	)	$	287,767
Depreciation and amortization	46,457			22,833		24,963			94,253			4,159			3,819			102,231
Acquisition and integration related costs^(a)	—			—		—			—			—			10,274			10,274
Gain on sale of property^(g)	—			—		—			—			—			(11,079		)	(11,079		)
Interest and financing expenses	—			—		—			—			—			24,187			24,187
Income tax expense	—			—		—			—			—			67,925			67,925
Non-operating pension and OPEB items	—			—		—			—			—			(1,259		)	(1,259		)
Other^(b)	466			—		—			466			—			7,255			7,721
Adjusted EBITDA	$	257,395		$	159,929	$	126,946		$	544,270		$	18,483		$	(74,986	)	$	487,767
Six months ended June 30, 2018
Net income (loss) attributable to Albemarle Corporation	$	225,626		$	119,209	$	336,547		$	681,382		$	(319	)	$	(246,842	)	$	434,221
Depreciation and amortization	48,390			20,127		25,090			93,607			4,080			3,117			100,804
Gain on sale of business^(c)	—			—		(218,705		)	(218,705		)	—			—			(218,705		)
Acquisition and integration related costs^(a)	—			—		—			—			—			8,712			8,712
Interest and financing expenses	—			—		—			—			—			26,846			26,846
Income tax expense	—			—		—			—			—			100,463			100,463
Non-operating pension and OPEB items	—			—		—			—			—			(4,401		)	(4,401		)
Legal accrual^(d)	—			—		—			—			—			28,044			28,044
Environmental accrual^(h)	—			—		—			—			—			15,597			15,597
Albemarle Foundation contribution^(e)	—			—		—			—			—			15,000			15,000
Other^(f)	(1,385		)	—		—			(1,385		)	—			2,084			699
Adjusted EBITDA	$	272,631		$	139,336	$	142,932		$	554,899		$	3,761		$	(51,380	)	$	507,280


(a)	Included acquisition and integration related costs relating to various significant projects. For the three-month and six-month periods ended June 30, 2019, $5.0 million and $10.3 million was recorded in Selling, general and administrative expenses. For the three-month

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and six-month periods ended June 30, 2018, $1.0 million and $1.9 million was recorded in Cost of goods sold, respectively, and $5.5 million and $6.8 million was recorded in Selling, general and administrative expenses, respectively.


(b)	Included amounts for the three months ended June 30, 2019 recorded in:


▪	Cost of goods sold - $0.1 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.


▪	Selling, general and administrative expenses - Expected severance payments to be made in 2019 as part of a business reorganization plan of $4.8 million, with the unpaid balance recorded in Accrued expenses as of June 30, 2019, and $1.0 million of shortfall contributions for our multiemployer plan financial improvement plan.


▪	Other (expenses) income, net - $2.5 million of a net loss primarily resulting from the revision of indemnifications related to previously disposed businesses.

Included amounts for the six months ended June 30, 2019 recorded in:


▪	Cost of goods sold - $0.5 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.


▪	Selling, general and administrative expenses - Expected severance payments to be made in 2019 as part of a business reorganization plan of $5.3 million, with the unpaid balance recorded in Accrued expenses as of June 30, 2019, and $1.0 million of shortfall contributions for our multiemployer plan financial improvement plan.


▪	Other (expenses) income, net - $0.9 million of a net loss primarily resulting from the revision of indemnifications and other liabilities related to previously disposed businesses.


(c)	Gain related to the sale of the Polyolefin Catalysts Divestiture, which closed in the second quarter of 2018.

(d)

Included in Other (expenses) income, net for the three-month and six-month periods ended June 30, 2018 is a $10.4 million expense resulting from a settlement of a legal matter related to guarantees from a previously disposed business. Also included in Other (expenses) income, net, for the six months ended June 30, 2018 is a $17.6 million expense resulting from a jury rendered verdict against Albemarle related to certain business concluded under a 2014 sales agreement for products that Albemarle no longer manufactures.

(e)

Included in Selling, general and administrative expenses is a charitable contribution, using a portion of the proceeds received from the Polyolefin Catalysts Divestiture, to the Albemarle Foundation, a non-profit organization that sponsors grants, health and social projects, educational initiatives, disaster relief, matching gift programs, scholarships and other charitable initiatives in locations where our employees live and operate. This contribution is in addition to the ordinary annual contribution made to the Albemarle Foundation by the Company, and is significant in size and nature in that it is intended to provide more long-term benefits in the communities where we live and operate.


(f)	Included amounts for the three months ended June 30, 2018 recorded in:


▪	Other (expenses) income, net - $1.2 million related to the revision of previously recorded expenses of disposed businesses.

Included amounts for the six months ended June 30, 2018 recorded in:


▪	Cost of goods sold - $1.1 million for the write-off of fixed assets related to a major capacity expansion in our Jordanian joint venture.


▪	Selling, general and administrative expenses - $1.4 million gain related to a refund from Chilean authorities due to an overpayment made in a prior year.


▪	Other (expenses) income, net - $1.0 million related to the revision of previously recorded expenses of disposed businesses.


(g)	Gain recorded in Other (expenses) income, net related to the sale of land in Pasadena, Texas not used as part of our operations.


(h)	Increase in environmental reserve to indemnify the buyer of a formerly owned site recorded in Other (expenses) income, net. As defined in the agreement of sale, this indemnification has a set cutoff date in 2024, at which point we will no longer be required to provide financial coverage.

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NOTE 11—Pension Plans and Other Postretirement Benefits:

The components of pension and postretirement benefits cost (credit) for the three-month and six-month periods ended June 30, 2019 and 2018 were as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Pension Benefits Cost (Credit):
Service cost	$	1,123		$	1,259		$	2,253		$	2,527
Interest cost	8,220			8,016			16,540			16,043
Expected return on assets	(9,445		)	(10,760		)	(18,897		)	(21,524		)
Amortization of prior service benefit	6			24			12			46
Total net pension benefits credit	$	(96	)	$	(1,461	)	$	(92	)	$	(2,908	)
Postretirement Benefits Cost (Credit):
Service cost	$	25		$	30		$	49		$	59
Interest cost	549			542			1,098			1,084
Expected return on assets	—			(2		)	—			(4		)
Amortization of prior service benefit	—			(12		)	—			(24		)
Total net postretirement benefits cost	$	574		$	558		$	1,147		$	1,115
Total net pension and postretirement benefits cost (credit)	$	478		$	(903	)	$	1,055		$	(1,793	)

All components of net benefit cost (credit), other than service cost, are included in Other (expenses) income, net on the consolidated statements of income.

During the three-month and six-month periods ended June 30, 2019, we made contributions of $3.8 million and $6.5 million, respectively, to our qualified and nonqualified pension plans. During the three-month and six-month periods ended June 30, 2018, we made contributions of $2.8 million and $5.9 million, respectively, to our qualified and nonqualified pension plans.

We paid $0.4 million and $1.3 million in premiums to the U.S. postretirement benefit plan during the three-month and six-month periods ended June 30, 2019, respectively. During the three-month and six-month periods ended June 30, 2018, we paid $0.7 million and $1.2 million, respectively, in premiums to the U.S. postretirement benefit plan.

NOTE 12—Fair Value of Financial Instruments:

In assessing the fair value of financial instruments, we use methods and assumptions that are based on market conditions and other risk factors existing at the time of assessment. Fair value information for our financial instruments is as follows:

Long-Term Debt—the fair values of our senior notes are estimated using Level 1 inputs and account for the difference between the recorded amount and fair value of our long-term debt. The carrying value of our remaining long-term debt reported in the accompanying condensed consolidated balance sheets approximates fair value as substantially all of such debt bears interest based on prevailing variable market rates currently available in the countries in which we have borrowings.



	June 30, 2019				December 31, 2018
	Recorded Amount		Fair Value		Recorded Amount		Fair Value
	(In thousands)
Long-term debt	$	1,895,365	$	1,962,915	$	1,712,003	$	1,731,271

Foreign Currency Forward Contracts—we enter into foreign currency forward contracts in connection with our risk management strategies in an attempt to minimize the financial impact of changes in foreign currency exchange rates. These derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. The fair values of our foreign currency forward contracts are estimated based on current settlement values. At June 30, 2019 and December 31, 2018, we had outstanding foreign currency forward contracts with notional values totaling $895.2 million and $626.5 million, respectively, hedging our exposure to various currencies including the Euro, Chinese Renminbi, Chilean Peso

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and Australian Dollar. Our foreign currency forward contracts outstanding at June 30, 2019 and December 31, 2018 have not been designated as hedging instruments under ASC 815, Derivatives and Hedging. The following table summarizes the fair value of our foreign currency forward contracts included in the condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018 (in thousands):



	June 30,		December 31,
	2019		2018
Foreign currency forward contracts - Other accounts receivable	$	—	$	431
Foreign currency forward contracts - Accrued expenses	$	87	$	—

Gains and losses on foreign currency forward contracts are recognized currently in Other (expenses) income, net; further, fluctuations in the value of these contracts are generally expected to be offset by changes in the value of the underlying exposures being hedged, which are also reported in Other (expenses) income, net. The following table summarizes these net gains (losses) recognized in our consolidated statements of income during the three-month and six-month periods ended June 30, 2019 and 2018 (in thousands):



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Foreign currency forward contracts gains (losses)	$	2,099	$	(17,650	)	$	(8,316	)	$	(12,831	)

In addition, for the six-month periods ended June 30, 2019 and 2018, we recorded losses of $8.3 million and $12.8 million, respectively, related to the change in the fair value of our foreign currency forward contracts, and net cash settlements of $7.8 million and $18.0 million, respectively, in Other, net, in our condensed consolidated statements of cash flows.

The counterparties to our foreign currency forward contracts are major financial institutions with which we generally have other financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties. However, we do not anticipate nonperformance by the counterparties.

NOTE 13—Fair Value Measurement:

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:



Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3	Unobservable inputs for the asset or liability

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We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 (in thousands):



	June 30, 2019		Quoted Prices in Active Markets for Identical Items (Level 1)		Quoted Prices in Active Markets for Similar Items (Level 2)		Unobservable Inputs (Level 3)
	June 30, 2019				Quoted Prices in Active Markets for Similar Items (Level 2)		Unobservable Inputs (Level 3)
Assets:
Investments under executive deferred compensation plan^(a)	$	25,961	$	25,961	$	—	$	—
Private equity securities^(b)	$	30	$	30	$	—	$	—
Private equity securities measured at net asset value^(b)(c)	$	7,178	$	—	$	—	$	—

Liabilities:
Obligations under executive deferred compensation plan^(a)	$	25,961	$	25,961	$	—	$	—
Foreign currency forward contracts^(d)	$	87	$	—	$	87	$	—



	December 31, 2018		Quoted Prices in Active Markets for Identical Items (Level 1)		Quoted Prices in Active Markets for Similar Items (Level 2)		Unobservable Inputs (Level 3)
	December 31, 2018				Quoted Prices in Active Markets for Similar Items (Level 2)		Unobservable Inputs (Level 3)
Assets:
Investments under executive deferred compensation plan^(a)	$	26,292	$	26,292	$	—	$	—
Private equity securities^(b)	$	26	$	26	$	—	$	—
Private equity securities measured at net asset value^(b)(c)	$	7,195	$	—	$	—	$	—
Foreign currency forward contracts^(d)	$	431	$	—	$	431	$	—

Liabilities:
Obligations under executive deferred compensation plan^(a)	$	26,292	$	26,292	$	—	$	—

(a)

We maintain an Executive Deferred Compensation Plan (“EDCP”) that was adopted in 2001 and subsequently amended. The purpose of the EDCP is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain of our employees. The EDCP is intended to aid in attracting and retaining employees of exceptional ability by providing them with these benefits. We also maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of the EDCP, subject to the claims of our creditors in the event of our insolvency. Assets of the Trust are consolidated in accordance with authoritative guidance. The assets of the Trust consist primarily of mutual fund investments (which are accounted for as trading securities and are marked-to-market on a monthly basis through the consolidated statements of income) and cash and cash equivalents. As such, these assets and obligations are classified within Level 1.


(b)	Primarily consists of private equity securities classified as available-for-sale and are reported in Investments in the condensed consolidated balance sheets. The changes in fair value are reported in Other (expenses) income, net, in our consolidated statements of income.


(c)	Holdings in certain private equity securities are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy.

(d)

As a result of our global operating and financing activities, we are exposed to market risks from changes in foreign currency exchange rates, which may adversely affect our operating results and financial position. When deemed appropriate, we minimize our risks from foreign currency exchange rate fluctuations through the use of foreign currency forward contracts. Unless otherwise noted, these derivative financial instruments are not designated as hedging instruments under ASC 815, Derivatives and Hedging. The foreign currency forward contracts are valued using broker quotations or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within Level 2.

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ALBEMARLE CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

NOTE 14—Accumulated Other Comprehensive (Loss) Income:

The components and activity in Accumulated other comprehensive (loss) income (net of deferred income taxes) consisted of the following during the periods indicated below (in thousands):



	Foreign Currency Translation			Pension and Postretirement Benefits^(a)			Net Investment Hedge			Interest Rate Swap^(b)			Total
Three months ended June 30, 2019
Balance at March 31, 2019	$	(418,454	)	$	(152	)	$	75,641		$	(14,573	)	$	(357,538	)
Other comprehensive income (loss) before reclassifications	10,544			—			(3,037		)	—			7,507
Amounts reclassified from accumulated other comprehensive loss	—			6			—			641			647
Other comprehensive income (loss), net of tax	10,544			6			(3,037		)	641			8,154
Other comprehensive income attributable to noncontrolling interests	(27		)	—			—			—			(27		)
Balance at June 30, 2019	$	(407,937	)	$	(146	)	$	72,604		$	(13,932	)	$	(349,411	)
Three months ended June 30, 2018
Balance at March 31, 2018	$	(192,864	)	$	(18	)	$	32,130		$	(13,987	)	$	(174,739	)
Other comprehensive (loss) income before reclassifications	(150,857		)	—			22,989			—			(127,868		)
Amounts reclassified from accumulated other comprehensive loss	—			23			—			642			665
Other comprehensive (loss) income, net of tax	(150,857		)	23			22,989			642			(127,203		)
Other comprehensive loss attributable to noncontrolling interests	263			—			—			—			263
Balance at June 30, 2018	$	(343,458	)	$	5		$	55,119		$	(13,345	)	$	(301,679	)
Six months ended June 30, 2019
Balance at December 31, 2018	$	(407,646	)	$	(159	)	$	72,337		$	(15,214	)	$	(350,682	)
Other comprehensive (loss) income before reclassifications	(311		)	—			267			—			(44		)
Amounts reclassified from accumulated other comprehensive loss	—			13			—			1,282			1,295
Other comprehensive (loss) income, net of tax	(311		)	13			267			1,282			1,251
Other comprehensive loss attributable to noncontrolling interests	20			—			—			—			20
Balance at June 30, 2019	$	(407,937	)	$	(146	)	$	72,604		$	(13,932	)	$	(349,411	)
Six months ended June 30, 2018
Balance at December 31, 2017	$	(257,569	)	$	(21	)	$	46,551		$	(14,629	)	$	(225,668	)
Other comprehensive (loss) income before reclassifications	(85,966		)	—			8,568			—			(77,398		)
Amounts reclassified from accumulated other comprehensive loss	—			26			—			1,284			1,310
Other comprehensive (loss) income, net of tax	(85,966		)	26			8,568			1,284			(76,088		)
Other comprehensive loss attributable to noncontrolling interests	77			—			—			—			77
Balance at June 30, 2018	$	(343,458	)	$	5		$	55,119		$	(13,345	)	$	(301,679	)


(a)	The pre-tax portion of amounts reclassified from accumulated other comprehensive loss consists of amortization of prior service benefit, which is a component of pension and postretirement benefits cost (credit). See Note 11, “Pension Plans and Other Postretirement Benefits,” for additional information.


(b)	The pre-tax portion of amounts reclassified from accumulated other comprehensive loss is included in interest expense.

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ALBEMARLE CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

The amount of income tax benefit (expense) allocated to each component of Other comprehensive income (loss) for the three-month and six-month periods ended June 30, 2019 and 2018 is provided in the following tables (in thousands):



	Three Months Ended June 30,
	2019											2018
	Foreign Currency Translation			Pension and Postretirement Benefits		Net Investment Hedge			Interest Rate Swap			Foreign Currency Translation			Pension and Postretirement Benefits			Net Investment Hedge			Interest Rate Swap
Other comprehensive income (loss), before tax	$	10,544		$	6	$	(3,951	)	$	834		$	(150,858	)	$	27		$	29,864		$	834
Income tax benefit (expense)	—			—		914			(193		)	1			(4		)	(6,875		)	(192		)
Other comprehensive income (loss), net of tax	$	10,544		$	6	$	(3,037	)	$	641		$	(150,857	)	$	23		$	22,989		$	642

	Six Months Ended June 30,
	2019											2018
	Foreign Currency Translation			Pension and Postretirement Benefits		Net Investment Hedge			Interest Rate Swap			Foreign Currency Translation			Pension and Postretirement Benefits			Net Investment Hedge			Interest Rate Swap
Other comprehensive (loss) income, before tax	$	(310	)	$	13	$	348		$	1,668		$	(85,967	)	$	30		$	11,130		$	1,668
Income tax (expense) benefit	(1		)	—		(81		)	(386		)	1			(4		)	(2,562		)	(384		)
Other comprehensive (loss) income, net of tax	$	(311	)	$	13	$	267		$	1,282		$	(85,966	)	$	26		$	8,568		$	1,284

NOTE 15—Related Party Transactions:

Our consolidated statements of income include sales to and purchases from unconsolidated affiliates in the ordinary course of business as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Sales to unconsolidated affiliates	$	5,372	$	11,033	$	9,663	$	15,638
Purchases from unconsolidated affiliates^(a)	$	55,617	$	57,059	$	119,116	$	125,975


(a)	Purchases from unconsolidated affiliates primarily relate to purchases from our Windfield joint venture.

Our condensed consolidated balance sheets include accounts receivable due from and payable to unconsolidated affiliates in the ordinary course of business as follows (in thousands):



	June 30, 2019		December 31, 2018
Receivables from unconsolidated affiliates	$	3,698	$	14,348
Payables to unconsolidated affiliates	$	57,031	$	68,357

NOTE 16—Supplemental Cash Flow Information:

Supplemental information related to the condensed consolidated statements of cash flows is as follows (in thousands):



	Six Months Ended June 30,
	2019		2018
Supplemental non-cash disclosure related to investing activities:
Capital expenditures included in Accounts payable	$	170,776	$	95,080

Other, net within Cash flows from operating activities on the condensed consolidated statements of cash flows for the six months ended June 30, 2019 and 2018 included $14.4 million and $33.9 million, respectively, representing the reclassification

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ALBEMARLE CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

of the current portion of the one-time transition tax resulting from the enactment of the TCJA, from Other noncurrent liabilities to Income taxes payable within current liabilities.

NOTE 17—Recently Issued Accounting Pronouncements:

In February 2016, the Financial Accounting Standards Board (“FASB”) issued accounting guidance that requires assets and liabilities arising from leases to be recorded on the balance sheet. Additional disclosures are required regarding the amount, timing, and uncertainty of cash flows from leases. In July 2018, the FASB issued an amendment which would allow entities to initially apply this new standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of Retained earnings. The Company adopted this standard on January 1, 2019 using this transition method. See Note 1, “Basis of Presentation,” for further details.

In June 2016, the FASB issued accounting guidance that, among other things, changes the way entities recognize impairment of financial assets by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of the financial asset. Additional disclosures are required regarding an entity’s assumptions, models and methods for estimating the expected credit loss. This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and is to be applied using a modified retrospective approach. Early adoption is permitted. We currently do not expect this guidance to have a significant impact on our financial statements.

In January 2017, the FASB issued accounting guidance to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a reporting unit to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit has been acquired in a business combination. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. This guidance will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and is to be applied on a prospective basis. Early adoption is permitted for goodwill impairment tests performed after January 1, 2017. We expect to adopt this guidance on January 1, 2020 and do not expect it to have a significant impact on our financial statements.

In August 2017, the FASB issued accounting guidance to better align an entity’s risk management activities with hedge accounting, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. This guidance will make more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess effectiveness. In October 2018, the FASB issued additional guidance that permits the use of the Overnight Index Swap Rate based on the Secured Overnight Financing Rate as a U.S. benchmark interest rate for hedge accounting purposes under ASC 815, Derivatives and Hedging. These new requirements became effective on January 1, 2019 and did not have a significant impact on our financial statements.

In August 2018, the FASB issued accounting guidance that requires implementation costs incurred in a cloud computing arrangement that is a service contract to be capitalized. Entities will be required to recognize the capitalized implementation costs to expense over the noncancellable term of the cloud computing arrangement. As allowed by its provisions, we early-adopted this new guidance in the first quarter of 2019. The adoption of this new guidance did not have a significant impact on our financial statements.



Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-looking Statements

Some of the information presented in this Quarterly Report on Form 10-Q, including the documents incorporated by reference, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on our current expectations, which are in turn based on assumptions that we believe are reasonable based on our current knowledge of our business and operations. We have used words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “would,” “will” and variations of such words and similar expressions to identify such forward-looking statements.

These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. There can be no assurance that our actual results will not differ materially from the results and expectations expressed or implied in the forward-looking statements.

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Factors that could cause actual results to differ materially from the outlook expressed or implied in any forward-looking statement include, without limitation:


•	changes in economic and business conditions;


•	changes in financial and operating performance of our major customers and industries and markets served by us;


•	the timing of orders received from customers;


•	the gain or loss of significant customers;


•	competition from other manufacturers;


•	changes in the demand for our products or the end-user markets in which our products are sold;


•	limitations or prohibitions on the manufacture and sale of our products;


•	availability of raw materials;


•	increases in the cost of raw materials and energy, and our ability to pass through such increases to our customers;


•	changes in our markets in general;


•	fluctuations in foreign currencies;


•	changes in laws and government regulation impacting our operations or our products;


•	the occurrence of regulatory actions, proceedings, claims or litigation;


•	the occurrence of cyber-security breaches, terrorist attacks, industrial accidents, natural disasters or climate change;


•	hazards associated with chemicals manufacturing;


•	the inability to maintain current levels of product or premises liability insurance or the denial of such coverage;


•	political unrest affecting the global economy, including adverse effects from terrorism or hostilities;


•	political instability affecting our manufacturing operations or joint ventures;


•	changes in accounting standards;


•	the inability to achieve results from our global manufacturing cost reduction initiatives as well as our ongoing continuous improvement and rationalization programs;


•	changes in the jurisdictional mix of our earnings and changes in tax laws and rates;


•	changes in monetary policies, inflation or interest rates that may impact our ability to raise capital or increase our cost of funds, impact the performance of our pension fund investments and increase our pension expense and funding obligations;


•	volatility and uncertainties in the debt and equity markets;


•	technology or intellectual property infringement, including through cyber-security breaches, and other innovation risks;


•	decisions we may make in the future;


•	the ability to successfully execute, operate and integrate acquisitions and divestitures; and


•	the other factors detailed from time to time in the reports we file with the Securities and Exchange Commission (“SEC”).

We assume no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws. The following discussion should be read together with our condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q.

The following is a discussion and analysis of our results of operations for the three-month and six-month periods ended June 30, 2019 and 2018. A discussion of our consolidated financial condition and sources of additional capital is included under a separate heading “Financial Condition and Liquidity” on page 37.

Overview

We are a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals that are designed to meet our customers’ needs across a diverse range of end markets. The end markets we serve include energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, crop protection and custom chemistry services. We believe that our commercial and geographic diversity, technical expertise, innovative capability, flexible, low-cost global manufacturing base, experienced management team and strategic focus on our core base technologies will enable us to maintain leading market positions in those areas of the specialty chemicals industry in which we operate.

Secular trends favorably impacting demand within the end markets that we serve combined with our diverse product portfolio, broad geographic presence and customer-focused solutions will continue to be key drivers of our future earnings

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growth. We continue to build upon our existing green solutions portfolio and our ongoing mission to provide innovative, yet commercially viable, clean energy products and services to the marketplace. We believe our disciplined cost reduction efforts and ongoing productivity improvements, among other factors, position us well to take advantage of strengthening economic conditions as they occur, while softening the negative impact of the current challenging global economic environment.

Second Quarter 2019

During the second quarter of 2019:


•	Our board of directors declared a quarterly dividend of $0.3675 per share on May 8, 2019, which was paid on July 1, 2019 to shareholders of record at the close of business as of June 14, 2019.


•	Our net sales for the quarter were $885.1 million, up 4% from net sales of $853.9 million in the second quarter of 2018.


•	Diluted earnings per share were $1.45. This represented a decrease from second quarter 2018 results of $2.73 per diluted share, which included the $176.7 million, or $1.60 per diluted share, after tax gain on sale of business.

•

Announced a revised agreement with Mineral Resources Limited (“MRL”) to acquire 60% ownership of MRL’s Wodgina hard rock lithium mine in Western Australia and form a 60-40 joint venture with MRL to operate the mine and battery grade lithium hydroxide production facilities. Albemarle will pay $820 million in cash and transfer a 40% interest in certain lithium hydroxide conversion assets being built in Kermerton, Western Australia.

Outlook

The current global business environment presents a diverse set of opportunities and challenges in the markets we serve. In particular, the market for lithium battery and energy storage continues to accelerate, providing the opportunity to continue to develop high quality and innovative products while managing the high cost of expanding capacity. The other markets we serve continue to present various opportunities for value and growth as we have positioned ourselves to manage the impact on our business of changing global conditions, such as slow and uneven global growth, currency exchange volatility, crude oil price fluctuation, a dynamic pricing environment, an ever-changing landscape in electronics, the continuous need for cutting edge catalysts and technology by our refinery customers and increasingly stringent environmental standards. Amidst these dynamics, we believe our business fundamentals are sound and that we are strategically well-positioned as we remain focused on increasing sales volume, optimizing and improving the value of our portfolio primarily through pricing and product development, managing costs and delivering value to our customers and shareholders. We believe that our businesses remain well-positioned to capitalize on new business opportunities and long-term trends driving growth within our end markets and to respond quickly to changes in economic conditions in these markets.

Lithium: We expect strong year-over-year growth for the remainder of 2019 in Lithium, led by continued strong demand in battery-grade applications and increased conversion capacity.

On a longer term basis, we believe that demand for lithium will continue to grow as new lithium applications advance and the use of plug-in hybrid electric vehicles and full battery electric vehicles increases. This demand for lithium is supported by a favorable backdrop of steadily declining lithium ion battery costs, increasing battery performance and favorable global public policy toward e-mobility/renewable energy usage. Our outlook is also bolstered by long-term supply agreements with key strategic customers, reflecting our standing as a preferred global lithium partner, highlighted by our scale, access to geographically diverse, low-cost resources and long-term track record of reliability of supply and operating execution.

Bromine Specialties: We expect to see continued growth in net sales and profitability in 2019, due to healthy demand and pricing for our flame retardants and other derivatives. However, with sustained low oil prices, we expect stable, albeit low, drilling completion fluid demand throughout the year. While it is possible oil prices could continue to rebound some in 2019, the short-term impact will be to increase raw material costs. Offshore well completions lag oil pricing, so any benefit in completion fluid volume would likely extend throughout the year.

On a longer term basis, we continue to believe that improving global standards of living, widespread digitization, increasing demand for data management capacity and the potential for increasingly stringent fire safety regulations in developing markets are likely to drive continued demand for fire safety products. Absent an increase in regulatory pressure on offshore drilling, we would expect this business to follow a long-term growth trajectory once oil prices recover from prevailing levels as we expect that deep water drilling will continue to increase around the world. We are focused on profitably growing our globally competitive bromine and derivatives production network to serve all major bromine consuming products and markets. We believe the global supply/demand gap could tighten as demand for existing and possible new uses of bromine expands over time. The combination of solid, long-term business fundamentals, with our strong cost position, product

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innovations and effective management of raw material costs will enable us to manage our business through end market challenges and to capitalize on opportunities that are expected with favorable market trends in select end markets.

Catalysts: We believe increased global demand for transportation fuels, new refinery start-ups and ongoing adoption of cleaner fuels will be the primary drivers of growth in our Catalysts business. We believe delivering superior end-use performance continues to be the most effective way to create sustainable value in the refinery catalysts industry. We believe our technologies continue to provide significant performance and financial benefits to refiners challenged to meet tighter regulations around the world, including those managing new contaminants present in North America tight oil, and those in the Middle East and Asia seeking to use heavier feedstock while pushing for higher propylene yields. Longer term, we believe that the global crude supply will get heavier and more sour, a trend that bodes well for our catalysts portfolio. With superior technology and production capacities, and expected growth in end market demand, we believe that Catalysts remains well-positioned for the future. In Performance Catalyst Solutions (“PCS”), we expect growth on a longer term basis in our organometallic business due to growing global demand for plastics driven by rising standards of living and infrastructure spending.

All Other: The fine chemistry services business will continue to be reported outside the Company’s reportable segments as it does not fit in the Company’s core businesses. We expect the near future prospects for the fine chemistry services business to be impacted by a challenging agriculture industry environment and the timing of customer orders in pharmaceuticals. We continue to work to reinvigorate the pipeline of new products and services to these markets.

Corporate: In the first quarter of 2019, we increased our quarterly dividend rate to $0.3675 per share. We continue to focus on cash generation, working capital management and process efficiencies. We expect our global effective tax rate for 2019 to be approximately 20%; however, our rate will vary based on the locales in which income is actually earned and remains subject to potential volatility from changing legislation in the U.S., including the U.S. Tax Cuts and Jobs Act (“TCJA”), and other tax jurisdictions.

We remain committed to evaluating the merits of any opportunities that may arise for acquisitions or other business development activities that will complement our business footprint. Additional information regarding our products, markets and financial performance is provided at our website, www.albemarle.com. Our website is not a part of this document nor is it incorporated herein by reference.

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Results of Operations

The following data and discussion provide an analysis of certain significant factors affecting our results of operations during the periods included in the accompanying consolidated statements of income.

Second Quarter 2019 Compared to Second Quarter 2018

Selected Financial Data (Unaudited)



	Three Months Ended June 30,						Percentage Change
	2019			2018			2019 vs. 2018
	(In thousands, except percentages and per share amounts)
NET SALES	$	885,052		$	853,874		4	%
Cost of goods sold	559,138			542,518			3	%
GROSS PROFIT	325,914			311,356			5	%
GROSS PROFIT MARGIN	36.8		%	36.5		%
Selling, general and administrative expenses	126,715			123,637			2	%
Research and development expenses	13,462			16,074			(16	)%
Gain on sale of business	—			(218,705		)	(100	)%
OPERATING PROFIT	185,737			390,350			(52	)%
OPERATING PROFIT MARGIN	21.0		%	45.7		%
Interest and financing expenses	(11,601		)	(13,308		)	(13	)%
Other expenses, net	(7,065		)	(5,223		)	35	%
INCOME BEFORE INCOME TAXES AND EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS	167,071			371,819			(55	)%
Income tax expense	30,411			80,102			(62	)%
Effective tax rate	18.2		%	21.5		%
INCOME BEFORE EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS	136,660			291,717			(53	)%
Equity in net income of unconsolidated investments (net of tax)	38,310			18,969			102	%
NET INCOME	174,970			310,686			(44	)%
Net income attributable to noncontrolling interests	(20,772		)	(8,225		)	153	%
NET INCOME ATTRIBUTABLE TO ALBEMARLE CORPORATION	$	154,198		$	302,461		(49	)%
PERCENTAGE OF NET SALES	17.4		%	35.4		%
Basic earnings per share	$	1.46		$	2.76		(47	)%
Diluted earnings per share	$	1.45		$	2.73		(47	)%

Net Sales

For the three-month period ended June 30, 2019, we recorded net sales of $885.1 million, an increase of $31.2 million, or 4%, compared to net sales of $853.9 million for the three-month period ended June 30, 2018. The increase was driven by $26.0 million of favorable pricing impacts in each of our reportable segments and higher volume in Lithium and Bromine Specialties. Partially offsetting this was $19.5 million in lower Catalysts volume, driven by the impact on Fluid Catalytic Cracking, or FCC catalysts, of lighter global crude, and $16.2 million of unfavorable currency exchange resulting from the stronger U.S. Dollar against various currencies.

Gross Profit

For the three-month period ended June 30, 2019, our gross profit increased $14.6 million, or 5%, from the corresponding 2018 period. The increase was primarily due to favorable pricing impacts in each of our reportable segments and higher volume in Bromine Specialties and fine chemistry services. This was partially offset by the higher tolled product costs in our Lithium segment and higher raw material costs in our Catalysts segment. Overall, these factors contributed to a gross profit margin for the three-month period ended June 30, 2019 of 36.8%, up from 36.5% in the corresponding period in 2018.

Selling, General and Administrative Expenses

For the three-month period ended June 30, 2019, our selling, general and administrative (“SG&A”) expenses increased $3.1 million, or 2%, from the three-month period ended June 30, 2018. SG&A expenses for the three-month period ended June

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30, 2018 included a $15.0 million contribution to the Albemarle Foundation to further support the communities in which we operate, while the three-month period ended June 30, 2019 included $4.8 million of severance payments as part of a business reorganization plan. Excluding the impact of these charges, SG&A expenses increased $13.3 million, primarily due to higher professional fees to support planned projects and higher compensation-related spend. As a percentage of net sales, SG&A expenses were 14.3% for the three-month period ended June 30, 2019, compared to 14.5% for the corresponding period in 2018.

Research and Development Expenses

For the three-month period ended June 30, 2019, our research and development (“R&D”) expenses decreased $2.6 million, or 16%, from the three-month period ended June 30, 2018 due to the lower second quarter spend in our Lithium and Catalysts segments. As a percentage of net sales, R&D expenses were 1.5% and 1.9% for the three-month periods ended June 30, 2019 and 2018, respectively.

Gain on Sale of Business

In the second quarter of 2018, we closed the sale of the polyolefin catalysts and components portion of the PCS business (“Polyolefin Catalysts Divestiture”) and recorded a gain before income taxes of $218.7 million.

Interest and Financing Expenses

Interest and financing expenses for the three-month period ended June 30, 2019 decreased $1.7 million to $11.6 million from the corresponding 2018 period. This decrease is primarily due to the impact of higher capitalized interest from a continued increase in capital expenditures in 2019, partially offset by higher commercial paper loan balances in 2019.

Other Expenses, Net

Other expenses, net, for the three-month period ended June 30, 2019 was $7.1 million compared to $5.2 million for the corresponding 2018 period. During the three-month period ended June 30, 2018, we recorded a $10.4 million legal expense relating to a previously disposed business. The remaining difference was primarily due to an increase in foreign exchange losses of $8.1 million and a decrease in interest income.

Income Tax Expense

The effective income tax rate for the second quarter of 2019 was 18.2% compared to 21.5% for the second quarter of 2018. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three months ended June 30, 2019 and 2018 was impacted by a variety of factors, primarily stemming from the location in which income was earned. The decrease in the effective tax rate for the three month period ended June 30, 2019 compared to the same period last year was primarily driven by a change in the geographic mix of earnings.

Equity in Net Income of Unconsolidated Investments

Equity in net income of unconsolidated investments was $38.3 million for the three-month period ended June 30, 2019 compared to $19.0 million in the same period last year. This increase of $19.3 million was primarily due to higher equity income reported by our Lithium segment joint venture, Windfield Holdings Pty. Ltd., as well as an increase in equity income in our Catalysts segment.

Net Income Attributable to Noncontrolling Interests

For the three-month period ended June 30, 2019, net income attributable to noncontrolling interests was $20.8 million compared to $8.2 million in the same period last year. This increase of $12.5 million was primarily due to an increase in consolidated income related to our Jordan Bromine Company (“JBC”) joint venture from higher sales volume in the quarter.

Net Income Attributable to Albemarle Corporation

Net income attributable to Albemarle Corporation decreased to $154.2 million in the three-month period ended June 30, 2019, from $302.5 million in the three-month period ended June 30, 2018. The three-month period ended June 30, 2018 included an after tax gain of $176.7 million related to the Polyolefin Catalysts Divestiture. Excluding this gain, Net income attributable to Albemarle Corporation increased due to favorable pricing impacts in each of our reportable segments, increased volume in Lithium and Bromine Specialties and a lower effective tax rate in 2019. This was partially offset by higher input costs in Lithium, higher raw material costs in Catalysts and unfavorable currency exchange impacts resulting from the stronger U.S. Dollar against various currencies. In addition, during the three-month period ended June 30, 2018, we recorded a $15.0 million charitable contribution to the Albemarle Foundation and a $10.4 million legal expense relating to a previously disposed business.

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Other Comprehensive Income (Loss), Net of Tax

Total other comprehensive income (loss), after income taxes, was $8.2 million for the three-month period ended June 30, 2019 compared to ($127.2) million for the corresponding period in 2018. The majority of these amounts are the result of translating our foreign subsidiary financial statements from their local currencies to U.S. Dollars. In the 2019 period, other comprehensive income from foreign currency translation adjustments was $10.5 million, primarily as a result of favorable movements in the Euro of approximately $12 million and various other currencies totaling approximately $5 million, partially offset by an unfavorable variance in the Chinese Renminbi of approximately $6 million. Also included in total other comprehensive income for the 2019 period is a loss of $3.0 million in connection with the revaluation of our Euro-based 1.875% Senior notes, which have been designated as a hedge of our net investment in foreign operations. In the 2018 period, other comprehensive loss from foreign currency translation adjustments was $150.9 million, mainly as a result of unfavorable movements in the Euro of approximately $110 million, the Chinese Renminbi of approximately $14 million, the Brazilian Real of approximately $12 million and a net unfavorable variance in various other currencies totaling approximately $15 million. Also included in total other comprehensive loss for the 2018 period is income of $23.0 million in connection with the revaluation of our Euro-based 1.875% Senior notes.

Segment Information Overview. We have identified three reportable segments according to the nature and economic characteristics of our products as well as the manner in which the information is used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions. Our reportable business segments consist of: (1) Lithium, (2) Bromine Specialties and (3) Catalysts.

Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the fine chemistry services business, that does not fit into any of our core businesses.

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	Three Months Ended June 30,										Percentage Change
	2019			%		2018			%		2019 vs. 2018
	(In thousands, except percentages)
Net sales:
Lithium	$	324,758		36.7	%	$	317,563		37.2	%	2	%
Bromine Specialties	255,433			28.9	%	220,514			25.8	%	16	%
Catalysts	266,301			30.1	%	284,966			33.4	%	(7	)%
All Other	38,560			4.3	%	30,748			3.6	%	25	%
Corporate	—			—	%	83			—	%	(100	)%
Total net sales	$	885,052		100.0	%	$	853,874		100.0	%	4	%

Adjusted EBITDA:
Lithium	$	141,779		54.1	%	$	141,617		54.8	%	—	%
Bromine Specialties	81,332			31.1	%	69,367			26.8	%	17	%
Catalysts	66,875			25.5	%	75,102			29.0	%	(11	)%
All Other	11,240			4.3	%	(101		)	—	%	*
Corporate	(39,326		)	(15.0	)%	(27,423		)	(10.6	)%	43	%
Total adjusted EBITDA	$	261,900		100.0	%	$	258,562		100.0	%	1	%

* Percentage calculation is not meaningful.



	Lithium		Bromine Specialties		Catalysts			Reportable Segments Total			All Other			Corporate			Consolidated Total
Three months ended June 30, 2019
Net income (loss) attributable to Albemarle Corporation	$	117,303	$	69,616	$	54,124		$	241,043		$	9,118		$	(95,963	)	$	154,198
Depreciation and amortization	24,365		11,716		12,751			48,832			2,122			1,994			52,948
Acquisition and integration related costs^(a)	—		—		—			—			—			4,990			4,990
Interest and financing expenses	—		—		—			—			—			11,601			11,601
Income tax expense	—		—		—			—			—			30,411			30,411
Non-operating pension and OPEB items	—		—		—			—			—			(676		)	(676		)
Other^(b)	111		—		—			111			—			8,317			8,428
Adjusted EBITDA	$	141,779	$	81,332	$	66,875		$	289,986		$	11,240		$	(39,326	)	$	261,900
Three months ended June 30, 2018
Net income (loss) attributable to Albemarle Corporation	$	117,292	$	59,673	$	280,887		$	457,852		$	(2,079	)	$	(153,312	)	$	302,461
Depreciation and amortization	24,325		9,694		12,920			46,939			1,978			1,557			50,474
Gain on sales of business^(c)	—		—		(218,705		)	(218,705		)	—			—			(218,705		)
Acquisition and integration related costs^(a)	—		—		—			—			—			6,510			6,510
Interest and financing expenses	—		—		—			—			—			13,308			13,308
Income tax expense	—		—		—			—			—			80,102			80,102
Non-operating pension and OPEB items	—		—		—			—			—			(2,204		)	(2,204		)
Legal accrual^(d)	—		—		—			—			—			10,416			10,416
Albemarle Foundation contribution^(e)	—		—		—			—			—			15,000			15,000
Other^(f)	—		—		—			—			—			1,200			1,200
Adjusted EBITDA	$	141,617	$	69,367	$	75,102		$	286,086		$	(101	)	$	(27,423	)	$	258,562


(a)	Included acquisition and integration related costs relating to various significant projects. For the three-month period ended June 30, 2019, $5.0 million was recorded in SG&A expenses. For the three-month period ended June 30, 2018, $1.0 million was recorded in Cost of goods sold and $5.5 million was recorded in SG&A expenses.


(b)	Included amounts for the three months ended June 30, 2019 recorded in:

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▪	Cost of goods sold - $0.1 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.


▪	Selling, general and administrative expenses - Expected severance payments to be made in 2019 as part of a business reorganization plan of $4.8 million, with the unpaid balance recorded in Accrued expenses as of June 30, 2019 and $1.0 million of shortfall contributions for our multiemployer plan financial improvement plan.


▪	Other expenses, net - $2.5 million of a net loss primarily resulting from the revision of indemnifications related to previously disposed businesses.


(c)	See “Gain on Sale of business” on page 29 for a description of this gain.


(d)	Included in Other expenses, net is a $10.4 million expense resulting from a settlement of a legal matter related to guarantees from a previously disposed business.

(e)

Included in SG&A expenses is a charitable contribution, using a portion of the proceeds received from the Polyolefin Catalysts Divestiture, to the Albemarle Foundation, a non-profit organization that sponsors grants, health and social projects, educational initiatives, disaster relief, matching gift programs, scholarships and other charitable initiatives in locations where our employees live and operate. This contribution is in addition to the ordinary annual contribution made to the Albemarle Foundation by the Company, and is significant in size and nature in that it is intended to provide more long-term benefits in the communities where we live and operate.


(f)	Included Other expenses, net is $1.2 million related to the revision of previously recorded expenses of disposed businesses.

Lithium

Lithium segment net sales for the three-month period ended June 30, 2019 were $324.8 million, up $7.2 million, or 2%, compared to the corresponding period of 2018. The increase was primarily driven by $8.3 million of favorable pricing impacts, mainly on lithium hydroxide and $6.0 million of higher sales volume, primarily in battery grade salts. This was partially offset by $7.3 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies. Adjusted EBITDA for Lithium increased $0.2 million, to $141.8 million for the three-month period ended June 30, 2019, compared to the corresponding period of 2018, primarily driven by favorable pricing impacts and higher sales volumes. This was partially offset by increased cost of goods sold, mainly related to higher tolling product costs, and investments to support future operational savings.

Bromine Specialties

Bromine Specialties segment net sales for the three-month period ended June 30, 2019 were $255.4 million, up $34.9 million, or 16%, compared to the corresponding period of 2018. The increase was primarily driven by $24.7 million in higher sales volume in flame-retardants and other bromine derivatives due to continued strong demand, and $13.7 million in favorable pricing due to high demand, partially offset by $3.4 million of unfavorable currency translation resulting from the stronger U.S. Dollar. Adjusted EBITDA for Bromine Specialties was up 17%, or $12.0 million, to $81.3 million for the three-month period ended June 30, 2019, compared to the corresponding period of 2018. This increase was primarily due to the higher sales volume and favorable pricing and $2.1 million of unfavorable currency translation.

Catalysts

Catalysts segment net sales for the three-month period ended June 30, 2019 were $266.3 million, a decrease of $18.7 million, or 7%, compared to the corresponding period of 2018. This decrease was primarily due to $19.5 million of lower volume driven by the impact on FCC catalysts of lighter global crude, and $5.4 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies. This decrease was partially offset by favorable pricing impacts of $6.3 million driven by refining catalyst products. Catalysts adjusted EBITDA decreased 11%, or $8.2 million, to $66.9 million for the three-month period ended June 30, 2019 in comparison to the corresponding period of 2018. This decrease was primarily due to lower sales volume, higher raw material costs and $2.3 million of unfavorable currency translation, partially offset by favorable pricing impacts.

All Other

All Other net sales for the three-month period ended June 30, 2019 were $38.6 million, an increase of $7.8 million, or 25%, compared to the three-month period ended June 30, 2018. This increase was primarily due to higher sales volume and favorable pricing impacts in our fine chemistry services business. All Other adjusted EBITDA increased $11.3 million for the three-month period ended June 30, 2019 in comparison to the corresponding period of 2018. This increase was primarily due to increased sales volume and favorable pricing impacts, partially offset by higher material costs in our fine chemistry services business.

Corporate

Corporate adjusted EBITDA was a charge of $39.3 million for the three-month period ended June 30, 2019, compared to a charge of $27.4 million for the corresponding period of 2018. The change was primarily due to higher SG&A spending related to professional fees to support planned projects and $8.1 million of unfavorable currency exchange impacts.

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Six Months 2019 Compared to Six Months 2018

Selected Financial Data (Unaudited)



	Six Months Ended June 30,						Percentage Change
	2019			2018			2019 vs 2018
	(In thousands, except percentages and per share amounts)
NET SALES	$	1,717,116		$	1,675,503		2	%
Cost of goods sold	1,107,716			1,059,168			5	%
GROSS PROFIT	609,400			616,335			(1	)%
GROSS PROFIT MARGIN	35.5		%	36.8		%
Selling, general and administrative expenses	240,070			225,007			7	%
Research and development expenses	28,439			37,060			(23	)%
Gain on sale of business	—			(218,705		)	(100	)%
OPERATING PROFIT	340,891			572,973			(41	)%
OPERATING PROFIT MARGIN	19.9		%	34.2		%
Interest and financing expenses	(24,187		)	(26,846		)	(10	)%
Other income (expenses), net	4,226			(35,699		)	(112	)%
INCOME BEFORE INCOME TAXES AND EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS	320,930			510,428			(37	)%
Income tax expense	67,925			100,463			(32	)%
Effective tax rate	21.2		%	19.7		%
INCOME BEFORE EQUITY IN NET INCOME OF UNCONSOLIDATED INVESTMENTS	253,005			409,965			(38	)%
Equity in net income of unconsolidated investments (net of tax)	73,491			39,646			85	%
NET INCOME	326,496			449,611			(27	)%
Net income attributable to noncontrolling interests	(38,729		)	(15,390		)	152	%
NET INCOME ATTRIBUTABLE TO ALBEMARLE CORPORATION	$	287,767		$	434,221		(34	)%
PERCENTAGE OF NET SALES	16.8		%	25.9		%
Basic earnings per share	$	2.72		$	3.94		(31	)%
Diluted earnings per share	$	2.71		$	3.90		(31	)%

Net Sales

For the six-month period ended June 30, 2019, we recorded net sales of $1.72 billion, an increase of $41.6 million, or 2%, compared to net sales of $1.68 billion for the six-month period ended June 30, 2018. Excluding the impact of $27.1 million related to the Polyolefin Catalysts Divestiture and $29.5 million of unfavorable currency exchange resulting from a stronger U.S. Dollar, net sales increased $98.2 million driven by $49.5 million of favorable pricing impacts in each of our reportable segments and $48.7 million of higher volume primarily in Bromine Specialties.

Gross Profit

For the six-month period ended June 30, 2019, our gross profit decreased $6.9 million, or 1%, from the corresponding 2018 period. Excluding the impact of $10.7 million in gross profit related to the Polyolefin Catalysts Divestiture, gross profit increased by $3.8 million, primarily due to favorable pricing impacts in each of our reportable segments and higher volume in Bromine Specialties. This was partially offset by higher input costs in our Lithium segment, higher raw material costs primarily in our Bromine Specialties and Catalysts segments and unfavorable currency exchange impacts resulting from the stronger U.S. Dollar against various currencies. Overall, these factors contributed to a gross profit margin for the six-month period ended June 30, 2019 of 35.5%, down from 36.8% for the corresponding period in 2018.

Selling, General and Administrative Expenses

For the six-month period ended June 30, 2019, our SG&A expenses increased $15.1 million, or 7%, from the six-month period ended June 30, 2018. The six-month period ended June 30, 2018 included a $15.0 million contribution to the Albemarle Foundation to further support the communities in which we operate, while the six-month period ended June 30, 2019 included

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$5.3 million of severance payments as part of a business reorganization plan and $3.5 million of increased acquisition and integration related costs. Excluding the impact of these charges, SG&A expenses increased $21.3 million, primarily due to higher professional fees to support planned projects and higher compensation-related spend. As a percentage of net sales, SG&A expenses were 14.0% for the six-month period ended June 30, 2019, compared to 13.4% for the corresponding period in 2018.

Research and Development Expenses

For the six-month period ended June 30, 2019, our R&D expenses decreased $8.6 million, or 23%, from the six-month period ended June 30, 2018 due to the lower spend in our Lithium and Catalyst segments. As a percentage of net sales, R&D expenses were 1.7% and 2.2% for the six-month periods ended June 30, 2019 and 2018, respectively.

Gain on Sale of Business

The six-month period ended June 30, 2018 includes a gain before income taxes of $218.7 million related to the Polyolefin Catalysts Divestiture, which closed in the second quarter of 2018.

Interest and Financing Expenses

Interest and financing expenses for the six-month period ended June 30, 2019 decreased $2.7 million to $24.2 million from the corresponding 2018 period. This decrease is primarily due to the impact of higher capitalized interest from a continued increase in capital expenditures in 2019, partially offset by higher commercial paper loan balances in 2019.

Other Income (Expenses), net

Other income (expenses), net, for the six-month period ended June 30, 2019 was $4.2 million compared to ($35.7) million for the corresponding 2018 period. During the six-month period ended June 30, 2019, we recorded a gain of $11.1 million related to the sale of land in Pasadena, Texas. During the six-month period ended June 30, 2018, we recorded $28.0 million of legal expenses, related to products that Albemarle no longer manufactures and a previously disposed business and $15.6 million of environmental charges related to a site formerly owned by Albemarle. The remaining difference was primarily due to an increase in foreign exchange losses of $10.6 million and a decrease in interest income.

Income Tax Expense

The effective income tax rate for the first six months of 2019 was 21.2% compared to 19.7% for the first six months of 2018. The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the six-months ended June 30, 2019 and 2018 was impacted by a variety of factors, primarily stemming from the location in which income was earned. The increase in the effective tax rate for the six-month period ended June 30, 2019 compared to the same period last year was primarily driven by a change in the geographic mix of earnings and discrete net tax expenses primarily related to uncertain tax positions for the six-month period ended June 30, 2019, compared to discrete tax benefits for TCJA adjustments and excess tax benefits from stock-based compensation arrangements for the six-month period ended June 30, 2018.

Equity in Net Income of Unconsolidated Investments

Equity in net income of unconsolidated investments was $73.5 million for the six-month period ended June 30, 2019 compared to $39.6 million in the same period last year. This increase of $33.8 million was primarily due to higher equity income reported by our Lithium segment joint venture, Windfield Holdings Pty. Ltd., as well as an increase in equity income in our Catalysts segment.

Net Income Attributable to Noncontrolling Interests

For the six-month period ended June 30, 2019, net income attributable to noncontrolling interests was $38.7 million compared to $15.4 million in the same period last year. This increase of $23.3 million was primarily due to an increase in consolidated income related to our JBC joint venture from higher sales volume in the current year.

Net Income Attributable to Albemarle Corporation

Net income attributable to Albemarle Corporation decreased to $287.8 million in the six-month period ended June 30, 2019, from $434.2 million in the six-month period ended June 30, 2018. The six-month period ended June 30, 2018 included an after tax gain of $176.7 million related to the Polyolefin Catalysts Divestiture. Excluding this gain, Net income attributable to Albemarle Corporation increased due to favorable pricing impacts in each of our reportable segments and increased volume in Bromine Specialties, partially offset by higher input costs in Lithium, increased SG&A spend to support planned projects, unfavorable currency exchange impact and a higher effective income tax rate in 2019. In addition, during the six-month period ended June 30, 2018, we recorded $28.0 million of legal expenses related to products that Albemarle no longer manufactures and a previously disposed business, $15.6 million of environmental charges related to a site formerly owned by Albemarle and a $15.0 million charitable contribution to the Albemarle Foundation.

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Other Comprehensive Income (Loss), Net of Tax

Total other comprehensive income (loss), after income taxes, was $1.3 million for the six-month period ended June 30, 2019 compared to ($76.1) million for the corresponding period in 2018. The majority of these amounts are the result of translation our foreign subsidiary financial statements from their local currencies to U.S. Dollars. In the six-month period ended June 30, 2019, other comprehensive loss from foreign currency translation adjustments was $0.3 million, primarily as a result of unfavorable movements in the Euro of approximately $2 million and various other currencies totaling less than $1 million, partially offset by a favorable variance in the Japanese Yen of approximately $2 million, partially offset by a net favorable variance in various other currencies totaling approximately $1 million. Also included in total other comprehensive income for the 2019 period is income of $0.3 million in connection with the revaluation of our Euro-based 1.875% Senior notes, which have been designated as a hedge of our net investment in foreign operations. In the corresponding 2018 period, other comprehensive loss from foreign currency translation adjustments was $86.0 million, primarily as a result of unfavorable movements in the Euro of approximately $63 million, the Brazilian Real of approximately $12 million, the Chinese Renminbi of approximately $4 million and a net unfavorable variance in various other currencies totaling approximately $7 million. Also included in total other comprehensive loss for the 2018 period is income of $8.6 million in connection with the revaluation of our Euro-based 1.875% Senior notes.

Segment Information Overview. Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the fine chemistry services business, that does not fit into any of our core businesses.



	Six Months Ended June 30,										Percentage Change
	2019			%		2018			%		2019 vs. 2018
	(In thousands, except percentages)
Net sales:
Lithium	$	616,644		35.9	%	$	615,595		36.7	%	—	%
Bromine Specialties	504,485			29.4	%	446,153			26.6	%	13	%
Catalysts	517,949			30.2	%	545,683			32.6	%	(5	)%
All Other	78,038			4.5	%	67,913			4.1	%	15	%
Corporate	—			—	%	159			—	%	(100	)%
Total net sales	$	1,717,116		100.0	%	$	1,675,503		100.0	%	2	%

Adjusted EBITDA:
Lithium	$	257,395		52.8	%	$	272,631		53.7	%	(6	)%
Bromine Specialties	159,929			32.8	%	139,336			27.5	%	15	%
Catalysts	126,946			26.0	%	142,932			28.2	%	(11	)%
All Other	18,483			3.8	%	3,761			0.7	%	391	%
Corporate	(74,986		)	(15.4	)%	(51,380		)	(10.1	)%	46	%
Total adjusted EBITDA	$	487,767		100.0	%	$	507,280		100.0	%	(4	)%

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	Lithium			Bromine Specialties		Catalysts			Reportable Segments Total			All Other			Corporate			Consolidated Total
Six Months Ended June 30, 2019
Net income (loss) attributable to Albemarle Corporation	$	210,472		$	137,096	$	101,983		$	449,551		$	14,324		$	(176,108	)	$	287,767
Depreciation and amortization	46,457			22,833		24,963			94,253			4,159			3,819			102,231
Acquisition and integration related costs^(a)	—			—		—			—			—			10,274			10,274
Gain on sale of property^(b)	—			—		—			—			—			(11,079		)	(11,079		)
Interest and financing expenses	—			—		—			—			—			24,187			24,187
Income tax expense	—			—		—			—			—			67,925			67,925
Non-operating pension and OPEB items	—			—		—			—			—			(1,259		)	(1,259		)
Other^(c)	466			—		—			466			—			7,255			7,721
Adjusted EBITDA	$	257,395		$	159,929	$	126,946		$	544,270		$	18,483		$	(74,986	)	$	487,767
Six Months Ended June 30, 2018
Net income (loss) attributable to Albemarle Corporation	$	225,626		$	119,209	$	336,547		$	681,382		$	(319	)	$	(246,842	)	$	434,221
Depreciation and amortization	48,390			20,127		25,090			93,607			4,080			3,117			100,804
Gain on sale of business^(d)	—			—		(218,705		)	(218,705		)	—			—			(218,705		)
Acquisition and integration related costs^(a)	—			—		—			—			—			8,712			8,712
Interest and financing expenses	—			—		—			—			—			26,846			26,846
Income tax expense	—			—		—			—			—			100,463			100,463
Non-operating pension and OPEB items	—			—		—			—			—			(4,401		)	(4,401		)
Legal accrual^(e)	—			—		—			—			—			28,044			28,044
Environmental accrual^(f)	—			—		—			—			—			15,597			15,597
Albemarle Foundation contribution^(g)	—			—		—			—			—			15,000			15,000
Other^(h)	(1,385		)	—		—			(1,385		)	—			2,084			699
Adjusted EBITDA	$	272,631		$	139,336	$	142,932		$	554,899		$	3,761		$	(51,380	)	$	507,280


(a)	Included acquisition and integration related costs relating to various significant projects. For the six-month period ended June 30, 2019, $10.3 million was recorded in SG&A expenses. For the six-month period ended June 30, 2018, $1.9 million was recorded in Cost of goods sold and $6.8 million was recorded in SG&A expenses.


(b)	Gain recorded in Other income (expenses), net related to the sale of land in Pasadena, Texas not used as part of our operations.


(c)	Included amounts for the six months ended June 30, 2019 recorded in:


▪	Cost of goods sold - $0.5 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.


▪	Selling, general and administrative expenses - Expected severance payments to be made in 2019 as part of a business reorganization plan of $5.3 million, with the unpaid balance recorded in Accrued expenses as of June 30, 2019 and $1.0 million of shortfall contributions for our multiemployer plan financial improvement plan.


▪	Other income (expenses), net - $0.9 million of a net loss primarily resulting from the revision of indemnifications and other liabilities related to previously disposed businesses.


(d)	See “Gain on Sale of Business” on page 34 for a description of this gain.


(e)	Included in Other income (expenses), net is a $17.6 million expense resulting from a jury rendered verdict against Albemarle related to certain business concluded under a 2014 sales agreement for products that Albemarle no longer manufactures and a $10.4 million expense resulting from a settlement of a legal matter related to guarantees from a previously disposed business.


(f)	Increase in environmental reserve to indemnify the buyer of a formerly owned site recorded in Other income (expenses), net. As defined in the agreement of sale, this indemnification has a set cutoff date in 2024, at which point we will no longer be required to provide financial coverage.

(g)


(h)	Included amounts for the six months ended June 30, 2018 recorded in:


▪	Cost of goods sold - $1.1 million for the write-off of fixed assets related to a major capacity expansion in our Jordanian joint venture.

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▪	Selling, general and administrative expenses - $1.4 million gain related to a refund from Chilean authorities due to an overpayment made in a prior year.


▪	Other income (expenses), net - $1.0 million related to the revision of previously recorded expenses of disposed businesses.

Lithium

Lithium segment net sales for the six-month period ended June 30, 2019 were $616.6 million, up $1.0 million compared to the corresponding period of 2018. The increase was primarily driven by $13.9 million of favorable pricing impacts, partially offset by $13.0 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies. The sales volume was flat compared to the corresponding period of 2018, as it was negatively impacted by a disruption due to a rain event in Chile at the beginning of the year. Adjusted EBITDA for Lithium was down 6%, or $15.2 million, to $257.4 million for the six-month period ended June 30, 2019, compared to the corresponding period of 2018, primarily driven by increased cost of goods sold, mainly related to higher input costs, and lower sales volume. This was partially offset by the favorable pricing impacts and $2.2 million of favorable currency translation.

Bromine Specialties

Bromine Specialties segment net sales for the six-month period ended June 30, 2019 were $504.5 million, up $58.3 million, or 13%, compared to the corresponding period of 2018. The increase was primarily driven by $39.1 million in higher sales volume in flame-retardants and other bromine derivatives due to continued strong demand, and $25.8 million in favorable pricing impacts due to high demand, partially offset by $6.5 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies. Adjusted EBITDA for Bromine Specialties was up 15%, or $20.6 million, to $159.9 million for the six-month period ended June 30, 2019, compared to the corresponding period of 2018. This increase was primarily due to the higher sales volume and favorable pricing impacts, which was partially offset by higher production and raw material costs and $4.8 million of unfavorable currency translation.

Catalysts

Catalysts segment net sales for the six-month period ended June 30, 2019 were $517.9 million, a decrease of $27.7 million, or 5%, compared to the corresponding period of 2018. This decrease was primarily due to the $27.1 million impact of the Polyolefin Catalysts Divestiture and $10.0 million of unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies, partially offset by favorable pricing impacts of $8.1 million. Catalysts adjusted EBITDA decreased 11%, or $16.0 million, to $126.9 million for the six-month period ended June 30, 2019 in comparison to the corresponding period of 2018. This decrease was primarily due to the $10.9 million impact of the Polyolefin Catalysts Divestiture, higher raw material costs and $4.8 million of unfavorable currency translation, partially offset by favorable pricing impacts.

All Other

All Other net sales for the six-month period ended June 30, 2019 were $78.0 million, an increase of $10.1 million, or 15%, compared to the six-month period ended June 30, 2018. This increase was primarily due to higher sales volume and favorable pricing impacts in our fine chemistry services business. All Other adjusted EBITDA increased $14.7 million for the six-month period ended June 30, 2019 in comparison to the corresponding period of 2018. This increase was primarily due to increased sales volume and favorable pricing impacts in our fine chemistry services business.

Corporate

Corporate adjusted EBITDA was a charge of $75.0 million for the six-month period ended June 30, 2019, compared to a charge of $51.4 million for the corresponding period of 2018. The change was primarily due to higher SG&A spending related to professional fees to support planned projects and $10.6 million of unfavorable currency exchange impacts.

Financial Condition and Liquidity

Overview

The principal uses of cash in our business generally have been capital investments and resource development costs, funding working capital and service of debt. We also make contributions to our defined benefit pension plans, pay dividends to our shareholders and repurchase shares of our common stock. Historically, cash to fund the needs of our business has been principally provided by cash from operations, debt financing and equity issuances.

We are continually focused on working capital efficiency particularly in the areas of accounts receivable and inventory. We anticipate that cash on hand, cash provided by operating activities, proceeds from divestitures and borrowings will be sufficient to pay our operating expenses, satisfy debt service obligations, fund capital expenditures and other investing activities, fund pension contributions and pay dividends for the foreseeable future.

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Cash Flow

During the first six months of 2019, cash on hand, cash provided by operations and commercial paper note borrowings funded $415.6 million of capital expenditures for plant, machinery and equipment, and dividends to shareholders of $74.3 million. Our operations provided $199.3 million of cash flows during the first six months of 2019, as compared to $223.9 million for the first six months of 2018, with the decrease primarily arising from a higher working capital outflow and lower cash earnings in Catalysts. This was partially offset by higher dividends received from unconsolidated investments, as well as increased cash earnings in Bromine Specialties. Our outflow from working capital changes in 2019 of $223.2 million was primarily due to the build-up of inventory in the Lithium and Catalysts segments to meet higher projected sales during the remainder of 2019, the timing on collection of certain receivables and higher cash taxes paid. Overall, our cash and cash equivalents decreased by $157.1 million to $398.2 million at June 30, 2019 from $555.3 million at December 31, 2018.

Capital expenditures for the six-month period ended June 30, 2019 of $415.6 million were associated with plant, machinery and equipment. We expect our capital expenditures to approximate between $900 million to $1 billion in 2019 for Lithium growth and capacity increases, as well as productivity and continuity of operations projects in all segments. Of the total capital expenditures, our projects related to the continuity of operations are expected to remain in the range of 4-6% of net sales, similar to prior years.

Net current assets were $636.7 million and $815.2 million at June 30, 2019 and December 31, 2018, respectively. The decrease is primarily due to the increase in commercial paper notes outstanding and the reduction in cash and cash equivalents used primarily to fund the increase in capital expenditures during 2019. Additional changes in the components of net current assets are primarily due to the timing of the sale of goods and other ordinary transactions leading up to the balance sheet dates, are not the result of any policy changes by the Company, and do not reflect any change in either the quality of our net current assets or our expectation of success in converting net working capital to cash in the ordinary course of business.

On February 26, 2019, we increased our quarterly dividend rate to $0.3675 per share, a 10% increase from the quarterly rate of $0.335 per share paid in 2018.

At June 30, 2019 and December 31, 2018, our cash and cash equivalents included $385.2 million and $525.8 million, respectively, held by our foreign subsidiaries. The majority of these foreign cash balances are associated with earnings that we have asserted are indefinitely reinvested and which we plan to use to support our continued growth plans outside the U.S. through funding of capital expenditures, acquisitions, research, operating expenses or other similar cash needs of our foreign operations. From time to time, we repatriate cash associated with earnings from our foreign subsidiaries to the U.S. for normal operating needs through intercompany dividends, but only from subsidiaries whose earnings we have not asserted to be indefinitely reinvested or whose earnings qualify as “previously taxed income” as defined by the Internal Revenue Code. During the first six months of 2019 and 2018, we repatriated $7.4 million and $611.3 million, respectively, of cash as part of these foreign earnings cash repatriation activities.

In August 2019, we entered into an amended agreement to acquire a 60% interest in MRL's Wodgina hard rock lithium mine project (“Wodgina Project”) and 60% interest in Wodgina Lithium Operations Pty. Ltd., which will manage the Wodgina Project and Kemerton assets, for a total purchase price of $1.3 billion. The purchase price will be comprised of $820 million in cash, subject to certain adjustments, and the transfer of 40% interest in certain lithium hydroxide conversion assets being built by Albemarle in Kermerton, Western Australia, valued at $480 million. This transaction is subject to customary closing conditions, and is expected to close in the second half of 2019.

While we continue to closely monitor our cash generation, working capital management and capital spending in light of continuing uncertainties in the global economy, we believe that we will continue to have the financial flexibility and capability to opportunistically fund future growth initiatives. Additionally, we anticipate that future capital spending, including business acquisitions, share repurchases and other cash outlays, should be financed primarily with cash flow provided by operations and cash on hand, with additional cash needed, if any, provided by borrowings. The amount and timing of any additional borrowings will depend on our specific cash requirements.

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Long-Term Debt

We currently have the following senior notes outstanding:



Issue Month/Year	Principal (in millions)	Interest Rate	Interest Payment Dates		Maturity Date
December 2014	€393.0	1.875%	December 8		December 8, 2021
November 2014	$425.0	4.15%	June 1	December 1	December 1, 2024
November 2014	$350.0	5.45%	June 1	December 1	December 1, 2044
December 2010	$175.3	4.50%	June 15	December 15	December 15, 2020

Our senior notes are senior unsecured obligations and rank equally with all our other senior unsecured indebtedness from time to time outstanding. The senior notes are effectively subordinated to any of our existing or future secured indebtedness and to the existing and future indebtedness of our subsidiaries. As is customary for such long-term debt instruments, each senior note outstanding has terms that allow us to redeem the notes before its maturity, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of the senior notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semi-annual basis using the comparable government rate (as defined in the indentures governing the senior notes) plus between 25 and 40 basis points, depending on the note, plus, in each case, accrued interest thereon to the date of redemption. Holders may require us to purchase such notes at 101% upon a change of control triggering event, as defined in the indentures. The senior notes are subject to typical events of default, including bankruptcy and insolvency events, nonpayment and the acceleration of certain subsidiary indebtedness of $40 million or more caused by a nonpayment default.

Our revolving, unsecured credit agreement dated as of June 21, 2018 (the “2018 Credit Agreement”) currently provides for borrowings of up to $1.0 billion and matures on June 21, 2023. Borrowings under the 2018 Credit Agreement bear interest at variable rates based on an average London inter-bank offered rate (“LIBOR”) for deposits in the relevant currency plus an applicable margin which ranges from 0.910% to 1.500%, depending on the Company’s credit rating from Standard & Poor’s Ratings Services, Moody’s Investors Services and Fitch Ratings. The applicable margin on the facility was 1.125% as of June 30, 2019. There were no borrowings outstanding under the 2018 Credit Agreement as of June 30, 2019.

Borrowings under the 2018 Credit Agreement are conditioned upon satisfaction of certain conditions precedent, including the absence of defaults. The Company is subject to one financial covenant, as well as customary affirmative and negative covenants. The financial covenant requires that the Company’s consolidated funded debt to consolidated EBITDA ratio (as such terms are defined in the 2018 Credit Agreement) to be less than or equal to 3.50:1, subject to adjustments in accordance with the terms of the 2018 Credit Agreement relating to a consummation of an acquisition where the consideration includes cash proceeds from issuance of funded debt in excess of $500 million. The 2018 Credit Agreement also contains customary default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants and cross-defaults to other material indebtedness. The occurrence of an event of default under the 2018 Credit Agreement could result in all loans and other obligations becoming immediately due and payable and the credit facility being terminated.

On May 29, 2013, we entered into agreements to initiate a commercial paper program on a private placement basis under which we may issue unsecured commercial paper notes (the “Commercial Paper Notes”) from time-to-time up to a maximum aggregate principal amount outstanding at any time of $750.0 million. The proceeds from the issuance of the Commercial Paper Notes are expected to be used for general corporate purposes, including the repayment of other debt of the Company. Our 2018 Credit Agreement is available to repay the Commercial Paper Notes, if necessary. Aggregate borrowings outstanding under the 2018 Credit Agreement and the Commercial Paper Notes will not exceed the $1.0 billion current maximum amount available under the 2018 Credit Agreement. The Commercial Paper Notes will be sold at a discount from par, or alternatively, will be sold at par and bear interest at rates that will vary based upon market conditions at the time of issuance. The maturities of the Commercial Paper Notes will vary but may not exceed 397 days from the date of issue. The definitive documents relating to the commercial paper program contain customary representations, warranties, default and indemnification provisions. At June 30, 2019, we had $490.0 million of Commercial Paper Notes outstanding bearing a weighted-average interest rate of approximately 2.67% and a weighted-average maturity of 32 days. The Commercial Paper Notes are classified as Current portion of long-term debt in our condensed consolidated balance sheets at June 30, 2019 and December 31, 2018.

The non-current portion of our long-term debt amounted to $1.40 billion at June 30, 2019 and December 31, 2018. In addition, at June 30, 2019, we had availability to borrow $510.0 million under our commercial paper program and the 2018 Credit Agreement, and $583.0 million under other existing lines of credit, subject to various financial covenants under our 2018 Credit Agreement. We have the ability and intent to refinance our borrowings under our other existing credit lines with

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borrowings under the 2018 Credit Agreement, as applicable. Therefore, the amounts outstanding under those credit lines, if any, are classified as long-term debt. We believe that as of June 30, 2019, we were, and currently are, in compliance with all of our long-term debt covenants.

Off-Balance Sheet Arrangements

In the ordinary course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, including bank guarantees and letters of credit, which totaled approximately $79.5 million at June 30, 2019. None of these off-balance sheet arrangements has, or is likely to have, a material effect on our current or future financial condition, results of operations, liquidity or capital resources.

Other Obligations

Our contractual obligations have not significantly changed based on our ordinary business activities and projected capital expenditures from the information we provided in our Annual Report on Form 10-K for the year ended December 31, 2018.

Total expected 2019 contributions to our domestic and foreign qualified and nonqualified pension plans, including our SERP, should approximate $12 million. We may choose to make additional pension contributions in excess of this amount. We have made contributions of $6.5 million to our domestic and foreign pension plans (both qualified and nonqualified) during the six-month period ended June 30, 2019.

The liability related to uncertain tax positions, including interest and penalties, recorded in Other noncurrent liabilities totaled $26.4 million at June 30, 2019 and $22.9 million at December 31, 2018. Related assets for corresponding offsetting benefits recorded in Other assets totaled $12.3 million at June 30, 2019 and $13.0 million at December 31, 2018. We cannot estimate the amounts of any cash payments associated with these liabilities for the remainder of 2019 or the next twelve months, and we are unable to estimate the timing of any such cash payments in the future at this time.

We are subject to federal, state, local and foreign requirements regulating the handling, manufacture and use of materials (some of which may be classified as hazardous or toxic by one or more regulatory agencies), the discharge of materials into the environment and the protection of the environment. To our knowledge, we are currently complying and expect to continue to comply in all material respects with applicable environmental laws, regulations, statutes and ordinances. Compliance with existing federal, state, local and foreign environmental protection laws is not expected to have a material effect on capital expenditures, earnings or our competitive position, but the costs associated with increased legal or regulatory requirements could have an adverse effect on our operating results.

Among other environmental requirements, we are subject to the federal Superfund law, and similar state laws, under which we may be designated as a potentially responsible party (“PRP”), and may be liable for a share of the costs associated with cleaning up various hazardous waste sites. Management believes that in cases in which we may have liability as a PRP, our liability for our share of cleanup is de minimis. Further, almost all such sites represent environmental issues that are quite mature and have been investigated, studied and in many cases settled. In de minimis situations, our policy generally is to negotiate a consent decree and to pay any apportioned settlement, enabling us to be effectively relieved of any further liability as a PRP, except for remote contingencies. In other than de minimis PRP matters, our records indicate that unresolved PRP exposures should be immaterial. We accrue and expense our proportionate share of PRP costs. Because management has been actively involved in evaluating environmental matters, we are able to conclude that the outstanding environmental liabilities for unresolved PRP sites should not have a material adverse effect upon our results of operations or financial condition.

Liquidity Outlook

We anticipate that cash on hand and cash provided by operating activities, divestitures and borrowings will be sufficient to pay our operating expenses, satisfy debt service obligations, fund any capital expenditures and share repurchases, make acquisitions, make pension contributions and pay dividends for the foreseeable future. Our main focus over the next three years, in terms of uses of cash, will be investing in growth of the businesses and the return of value to shareholders. Additionally, we will continue to evaluate the merits of any opportunities that may arise for acquisitions of businesses or assets, which may require additional liquidity. For example, we expect that the cash portion of the purchase price for the announced 60% ownership of MRL’s Wodgina hard rock mine and processing facility in Western Australia of $820 million will primarily be funded with new debt borrowings.

Our cash flows from operations may be negatively affected by adverse consequences to our customers and the markets in which we compete as a result of moderating global economic conditions and reduced capital availability.

While we maintain business relationships with a diverse group of financial institutions, an adverse change in their credit standing could lead them to not honor their contractual credit commitments, decline funding under existing but uncommitted lines of credit, not renew their extensions of credit or not provide new financing. While the global corporate bond and bank

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loan markets remain strong, periods of elevated uncertainty related to global economic and/or geopolitical concerns may limit efficient access to such markets for extended periods of time. If such concerns heighten, we may incur increased borrowing costs and reduced credit capacity as our various credit facilities mature. When the U.S. Federal Reserve or similar national reserve banks in other countries decide to tighten the monetary supply in response, for example, to improving economic conditions, we may incur increased borrowing costs as interest rates increase on our variable rate credit facilities, as our various credit facilities mature or as we refinance any maturing fixed rate debt obligations, although these cost increases would be partially offset by increased income rates on portions of our cash deposits.

Overall, with generally strong cash-generative businesses and no significant long-term debt maturities before 2020, we believe we have, and will maintain, a solid liquidity position.

At this time, we are unable to predict the duration, scope, result or related costs associated with any investigations by the DOJ, the SEC, or DPP. We are unable to predict what, if any, action may be taken by the DOJ, the SEC, or DPP, or what penalties or remedial actions they may seek to impose. Any determination that our operations or activities are not in compliance with existing laws or regulations could result in the imposition of fines, penalties, disgorgement, equitable relief or other losses. We do not believe, however, that any fines, penalties, disgorgement, equitable relief or other losses would have a material adverse effect on our financial condition or liquidity.

We had cash and cash equivalents totaling $398.2 million at June 30, 2019, of which $385.2 million is held by our foreign subsidiaries. This cash represents an important source of our liquidity and is invested in bank accounts or money market investments with no limitations on access. The cash held by our foreign subsidiaries is intended for use outside of the U.S. We anticipate that any needs for liquidity within the U.S. in excess of our cash held in the U.S. can be readily satisfied with borrowings under our existing U.S. credit facilities or our commercial paper program.

Summary of Critical Accounting Policies and Estimates

Effective January 1, 2019, we adopted ASU 2016-12, “Leases.” As a result, we have updated our lease accounting policy, see Item 1 Financial Statements – Note 1, “Basis of Presentation,” for additional details. There have been no other significant changes in our critical accounting policies and estimates from the information we provided in our Annual Report on Form 10-K for the year ended December 31, 2018.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, see Item 1 Financial Statements – Note 17, “Recently Issued Accounting Pronouncements.”



Item 3.	Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes in our interest rate risk, foreign currency exchange rate exposure, marketable securities price risk or raw material price risk from the information we provided in our Annual Report on Form 10-K for the year ended December 31, 2018.

We had variable interest rate borrowings of $497.5 million outstanding at June 30, 2019, bearing a weighted average interest rate of 2.63% and representing approximately 26% of our total outstanding debt. A hypothetical 10% change (approximately 26 basis points) in the interest rate applicable to these borrowings would change our annualized interest expense by approximately $1.3 million as of June 30, 2019. We may enter into interest rate swaps, collars or similar instruments with the objective of reducing interest rate volatility relating to our borrowing costs.

Our financial instruments which are subject to foreign currency exchange risk consist of foreign currency forward contracts with an aggregate notional value of $895.2 million and with a fair value representing a net liability position of $0.1 million at June 30, 2019. Fluctuations in the value of these contracts are generally offset by the value of the underlying exposures being hedged. We conducted a sensitivity analysis on the fair value of our foreign currency hedge portfolio assuming an instantaneous 10% change in select foreign currency exchange rates from their levels as of June 30, 2019, with all other

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variables held constant. A 10% appreciation of the U.S. Dollar against foreign currencies that we hedge would result in a decrease of approximately $32.4 million in the fair value of our foreign currency forward contracts. A 10% depreciation of the U.S. Dollar against these foreign currencies would result in an increase of approximately $29.3 million in the fair value of our foreign currency forward contracts. The sensitivity of the fair value of our foreign currency hedge portfolio represents changes in fair values estimated based on market conditions as of June 30, 2019, without reflecting the effects of underlying anticipated transactions. When those anticipated transactions are realized, actual effects of changing foreign currency exchange rates could have a material impact on our earnings and cash flows in future periods.



Item 4.	Controls and Procedures.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

The Company has begun the implementation of a new enterprise resource platform system to increase the overall efficiency and productivity of our processes, which will result in changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) throughout the implementation process in 2019. There have been no other changes during the second quarter ended June 30, 2019 to our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION



Item 1.	Legal Proceedings.

We are involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings seeking remediation under environmental laws, such as Superfund, products liability, breach of contract liability and premises liability litigation. Where appropriate, we may establish financial reserves for such proceedings. We also maintain insurance to mitigate certain of such risks. Additional information with respect to this Item 1 is contained in Note 9 to the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.



Item 1A.	Risk Factors.

While we attempt to identify, manage and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. The risk factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018 describes some of the risks and uncertainties associated with our business. These risks and uncertainties have the potential to materially affect our results of operations and our financial condition. We do not believe that there have been any material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018.



Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.

NONE



Item 6.	Exhibits.

(a) Exhibits



3.1			Amended and Restated Bylaws, effective July 23, 2019, of Albemarle Corporation

10.1			Form of Letter Agreement, dated June 13, 2019, among Wodgina Lithium Pty Ltd, Albemarle Wodgina Pty Ltd, Mineral Resources Limited and the Company

10.2			Form of Amendment Deed to Asset Sale and Share Subscription Agreement, dated August 1, 2019, among Wodgina Lithium Pty Ltd, Albemarle Wodgina Pty Ltd, Mineral Resources Limited and the Company

10.3			Form of MRL Kemerton Asset Sale Agreement among Wodgina Lithium Pty Ltd, Albemarle Wodgina Pty Ltd, Mineral Resources Limited, Albemarle Lithium Pty Ltd and the Company

10.4			Form of break fee letter, dated August 1, 2019, between the Company and Mineral Resources Limited

31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a).

31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a).

32.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350.

32.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350.

101			Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended June 30, 2019, furnished in XBRL (eXtensible Business Reporting Language)).

Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Consolidated Statements of Income for the three and six months ended June 30, 2019 and 2018, (ii) the Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2019 and 2018, (iii) the Condensed Consolidated Balance Sheets at June 30, 2019 and December 31, 2018, (iv) the Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2019 and 2018, (v) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2019 and 2018 and (vi) the Notes to the Condensed Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




		ALBEMARLE CORPORATION
		(Registrant)

Date:	August 7, 2019	By:	/S/ SCOTT A. TOZIER
			Scott A. Tozier
			Executive Vice President and Chief Financial Officer
			(principal financial officer)

Exhibit 3.1

ALBEMARLE CORPORATION

AMENDED AND RESTATED BYLAWS

(Effective July 23, 2019)

ARTICLE I

Meeting of Shareholders

Section 1. Places of Meetings. All meetings of the shareholders shall be held at such place, either within or without the Commonwealth of Virginia, as may, from time to time, be fixed by the Board of Directors (the “Board”). The Board may, in its sole discretion, permit shareholders to participate in any meeting of shareholders by means of remote communication as authorized by the Virginia Stock Corporation Act (the “VSCA”) and subject to any guidelines and procedures as may be adopted by the Board.

Section 2. Organization and Order of Business. The Chairman of the Board or, in the Chairman of the Board’s absence, the Chief Executive Officer, shall preside over all meetings of the shareholders as chairman of the meeting. In the absence of the Chairman of the Board and the Chief Executive Officer, the Chair of the Nominating and Governance Committee shall preside. In the absence of the Chair of the Nominating and Governance Committee, the Chair of the Audit and Finance Committee shall preside. In the absence of the Chair of the Audit and Finance Committee, the Chair of the Executive Compensation Committee shall preside. In the absence of all of the foregoing, a majority of the shares entitled to vote at a meeting may appoint any person entitled to vote at the meeting to act as chairman of the meeting.

The Secretary or, in the Secretary’s absence, an Assistant Secretary shall act as secretary at all meetings of the shareholders. In the event that neither the Secretary nor an Assistant Secretary is present, the chairman of the meeting may appoint any person to act as secretary of the meeting.

The chairman of the meeting shall have the authority to make such rules and regulations, to establish such procedures and to take such steps as he or she may deem necessary or desirable for the proper conduct of each meeting of the shareholders, including, without limitation, the authority to make the agenda and to establish procedures for (i) dismissing of business not properly presented, (ii) maintaining order and safety, (iii) placing limitations on the time allotted to questions or comments on the affairs of the Company, (iv) placing restrictions on attendance at a meeting by persons or classes of persons who are not shareholders or their proxies, (v) restricting entry to a meeting after the time prescribed for the commencement thereof and (vi) commencing, conducting and closing voting on any matter.

Section 3. Annual Meetings. The annual meeting of the shareholders, for the election of directors and transaction of such other business as may properly come before

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Exhibit 3.1

the meeting, shall be held each year at such date and time as the Board may designate from time to time.

Section 4. Special Meetings. Special meetings of shareholders for any purpose or purposes may be called at any time by the Chief Executive Officer, the President, the Chairman of the Board or a majority of the Board. At a special meeting, no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting.

Section 5. Notice of Meetings. Except as otherwise required by the VSCA or these Bylaws, written or printed notice stating the date, time and place of every meeting of the shareholders, and in case of a special meeting, the purpose or purposes for which the meeting is called, shall be mailed, or transmitted by means of electronic transmission, not less than ten nor more than 60 days before the date of the meeting to each shareholder of record entitled to vote at such meeting, at his or her address which appears in the share transfer books of the Company. Without limiting the manner by which notice otherwise may be given effectively to shareholders, any notice to a shareholder given by the Company may be given by a form of electronic transmission consented to by the shareholder to whom the notice is given. Any such consent shall be revocable by the shareholder by written or electronic notice to the Company. Any such consent shall be deemed revoked (i) if the Company is unable to deliver by electronic transmission two consecutive notices given by the Company in accordance with such consent and (ii) such inability becomes known to the Secretary or Assistant Secretary of the Company or to the transfer agent or other person responsible for the giving of notice, provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. For purposes of these Bylaws, “electronic transmission” means any form or process of communication, not directly involving the physical transfer of paper or other tangible medium that (i) is suitable for the retention, retrieval and reproduction of information by the recipient, and (ii) is either (A) retrievable in paper form by the recipient through an automated process used in conventional commercial practice or (B) retrievable in perceivable form and the sender and the recipient have consented in writing to the use of such form of electronic transmission.

Section 6. Quorum. At all meetings of the shareholders, unless a greater number or voting by classes is required by the VSCA, a majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting, unless a new voting record date is set for that meeting. If a quorum is present, action on a matter is approved if the votes cast favoring the action exceed the votes cast opposing the action, unless the vote of a greater number or voting by classes is required by the VSCA or the Articles of Incorporation, and except for the election of directors which is set forth in Article II, Section 3. The chairman of the meeting or a majority of the shares represented at the meeting may adjourn the meeting from time to time, without notice other than by announcement at the meeting, whether or not there is a quorum.

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Exhibit 3.1

Section 7. Voting. At any meeting of the shareholders, each shareholder of a class entitled to vote on the matters coming before the meeting shall have one vote, in person or by proxy, for each such share standing in his or her name on the books of the Company at the record date for such meeting, provided that the record date shall not be more than 70 days prior to the meeting.

Section 8. Written Authorization. A shareholder or a shareholder’s duly authorized attorney-in-fact may execute a writing authorizing another person or persons to act for him or her as proxy. Execution may be accomplished by the shareholder or such shareholder’s duly authorized attorney-in-fact or authorized officer, director, employee or agent signing such writing or causing such shareholder’s signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature.

Section 9. Electronic Authorization. The Chief Executive Officer or the Secretary may approve procedures to enable a shareholder or a shareholder’s duly authorized attorney-in-fact to authorize another person or persons to act for him or her as proxy by transmitting or authorizing the transmission of a telegram, cablegram, internet transmission, telephone transmission or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such transmission must either be set forth or submitted with information from which the inspectors of election can determine that the transmission was authorized by the shareholder or the shareholder’s duly authorized attorney-in-fact. If it is determined that such transmissions are valid, the inspectors shall specify the information upon which they relied. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this Section 9 may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

Section 10. Shareholder Proposals.

(a) Annual Meetings of Shareholders.

(i) Nominations of persons for election to the Board and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders only:

(A) pursuant to the Company’s notice of meeting (or any supplement thereto),

(B) by or at the direction of the Board,

(C) by any shareholder of the Company who (1) was a shareholder of record of the Company (and, with respect to any beneficial owner, if different,

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Exhibit 3.1

on whose behalf such nominations or proposal of other business are made, only if such beneficial owner was the beneficial owner of shares of the Company) at the time the notice provided for in this Section 10 is delivered to the Secretary and at the time of the annual meeting, (2) is entitled to vote at the meeting, and (3) complies with the notice procedures set forth in this Section 10 or

(D) by an Eligible Shareholder (as defined in Article I, Section 10(c)) whose Shareholder Nominee (as defined in Article I, Section 10(c)) is included in the Company’s proxy materials for the relevant annual meeting.

For the avoidance of doubt, the foregoing Article I, Section 10(a)(i)(C) and (D) shall be the exclusive means for a shareholder to present proposals (except proposals submitted in accordance with the eligibility and procedural requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and included in the Company’s proxy statement) for consideration by the shareholders at any annual meeting of shareholders.

(ii) For nominations or other business to be properly brought before an annual meeting by a shareholder pursuant to Article I, Section 10(a)(i)(C), the shareholder must have given timely notice thereof in writing to the Secretary and any such proposed business other than the nominations of persons for election to the Board must constitute a proper matter for shareholder action. To be timely, a shareholder’s notice shall be delivered to the Secretary at the principal executive offices of the Company not later than the close of business on the 90^th day nor earlier than the close of business on the 120^th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 70 days after such anniversary date, notice by such shareholder must be so delivered not earlier than the close of business on the 120^th day prior to such annual meeting and not later than the close of business on the later of the 90^th day prior to such annual meeting or the 10^th day following the day on which public announcement of the date of such meeting is first made by the Company. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period, or extend any time period, for the giving of a shareholder’s notice as described above. To be in proper form, a shareholder’s notice to the Secretary must:

(A) set forth, as to the shareholder giving the notice, the beneficial owner, if any, on whose behalf the nomination or proposal is made:

(1) the (I) name and address of such shareholder, as they appear on the Company’s books, of such beneficial owner, if any, and of each affiliate or person acting in concert with such shareholder or beneficial owner and (II) name of each director, executive officer or general partner of such shareholder or beneficial owner or any such affiliate or person with which such shareholder or beneficial owner is acting in concert of such shareholder or beneficial owner, if any (each, an “Associated Person”).

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Exhibit 3.1

(2) (I) the class or series and number of shares of the Company which are, directly or indirectly owned beneficially and of record by such shareholder, such beneficial owner, if any, or any Associated Person (II) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Company or with a value derived in whole or in part from the value of any class or series of shares of the Company, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Company or otherwise directly or indirectly owned beneficially by such shareholder, such beneficial owner and any Associated Person and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Company (a “Derivative Instrument”), (III) any proxy, contract, arrangement, understanding, or relationship pursuant to which such shareholder, such beneficial owner and any Associated Person has a right to vote any shares of any security of the Company, (IV) any short interest in any security of the Company held, directly or indirectly, by such shareholder, such beneficial owner and any Associated Person (for purposes of this Section 10 a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (V) any rights to dividends on the shares of the Company owned beneficially by such shareholder, such beneficial owner and any Associated Person that are separated or separable from the underlying shares of the Company, (VI) any proportionate interest in shares of the Company or Derivative Instruments held, directly or indirectly, by a general or limited partnership or limited liability company in which such shareholder, such beneficial owner and any Associated Person is a general partner or manager or, directly or indirectly, beneficially owns an interest, and (VII) any performance-related fees (other than an asset-based fee) that such shareholder, such beneficial owner and any Associated Person is entitled to based on any increase or decrease in the value of shares of the Company or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such shareholder and such beneficial owner’s immediate family sharing the same household (which information shall be supplemented by such shareholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date),

(3) any other information relating to such shareholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder,

(4) a statement whether such shareholder or any other person known to the shareholder will deliver a proxy statement and form of proxy to holders of

July 23, 2019

Exhibit 3.1

at least the percentage of the Company’s voting shares required under the VSCA to carry the proposal and

(5) a representation that the shareholder is a holder of record of stock of the Company entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to make the nomination or propose such business specified in the notice before the meeting;

(B) if the notice relates to any business other than a nomination of a director or directors that the shareholder proposes to bring before the meeting, set forth:

(1) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such shareholder and beneficial owner, if any, in such business,

(2) the complete text of any resolutions intended to be presented at the meeting and in the event that such business includes a proposal to amend these Bylaws, the language of the proposed amendment and

(3) a description of all agreements, arrangements and understandings between such shareholder, beneficial owner, if any, and any Associated Person and any other person or persons (including their names) in connection with the proposal of such business by such shareholder;

(C) set forth, as to each person, if any, whom the shareholder proposes to nominate for election or reelection to the Board:

(1) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and

(2) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such shareholder, the beneficial owner, if any, and any Associated Person, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K under the Exchange Act if the shareholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any Associated Person, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registration; and

July 23, 2019

Exhibit 3.1

(D) with respect to each nominee for election or reelection to the Board, include a completed and signed questionnaire, representation and agreement required by Article I, Section 11.

The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee. Notwithstanding the foregoing, no disclosure shall be required with respect to ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is proposing business solely as a result of being the shareholder of record or nominee holder that is directed to prepare and submit the shareholder’s notice required by these Bylaws on behalf of a beneficial owner.

The foregoing notice requirements shall be deemed satisfied by a shareholder if the shareholder has notified the Company of such shareholder’s intention to present a proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act and such shareholder’s proposal has been included in a proxy statement that has been prepared by the Company to solicit proxies for such annual meeting. The Company may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Company.

(iii) Notwithstanding anything in the second sentence of Article I, Section 10(a)(ii) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public announcement by the Company naming the nominees for the additional directorships at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a shareholder’s notice required by this Section 10 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Company not later than the close of business on the 10^th day following the day on which such public announcement is first made by the Company.

(b) Special Meetings of Shareholders. Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Company’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Company’s notice of meeting (i) by or at the direction of the Board or (ii) provided that the Board has determined that directors shall be elected at such meeting, by any shareholder of the Company who is a shareholder of record at the time the notice provided for in this Section 10 is delivered to the Secretary, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 10. In the event the Company calls a special meeting of shareholders for the purpose of electing one or more directors to the Board, any such shareholder entitled to

July 23, 2019

Exhibit 3.1

vote in such election of directors may nominate a person or persons, as the case may be, for election to such position(s) as specified in the Company’s notice of meeting, if the shareholder’s notice required by Article I, Section 10(a)(ii) is delivered to the Secretary at the principal executive offices of the Company not earlier than the close of business on the 120^th day prior to such special meeting, and not later than the close of business on the later of the 90^th day prior to such special meeting or the 10^th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period, or extend any time period, for giving of a shareholder’s notice as described above.

(c) Proxy Access for Director Nominees. The Company shall include in its proxy statement for any annual meeting of shareholders the name, together with the Required Information (as defined below), of any person nominated for election to the Board (a “Shareholder Nominee”) identified in a timely notice (the “Notice”) that satisfies this Section 10(c) delivered to the principal office of the Company, addressed to the Secretary, by one or more shareholders who at the time the request is delivered satisfy the ownership and other requirements of subsections (a)(i), (a)(ii) and (c) of this Section 10 (such shareholder or shareholders, and any Associated Person of such shareholder or shareholders, the “Eligible Shareholder”), and who expressly elects to have its nominee included in the Company’s proxy materials pursuant to this Section 10(c). To be timely for purposes of this Section 10(c), the Notice must be received by the Secretary at the principal executive offices of the Company not later than the close of business on the 120^th day nor earlier than the close of business on the 150^th day prior to the anniversary date of the immediately preceding mailing date for the notice of annual meeting of shareholders.

(i) For purposes of this Section 10(c), the “Required Information” that the Company will include in its proxy statement is (A) the information concerning the Shareholder Nominee and the Eligible Shareholder that, as determined by the Company, is required to be disclosed in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission (the “SEC”), and (B) if the Eligible Shareholder so elects, a Statement (as defined below).

(ii) The number of Shareholder Nominees (including any Shareholder Nominee elected to the Board at either of the two preceding annual meetings who is being renominated by the Board to stand for reelection and any Shareholder Nominees submitted by an Eligible Shareholder for inclusion in the Company’s proxy materials pursuant to this Section 10(c) but either are subsequently withdrawn or that the Board or any committee designated by the Board decides to nominate for election to the Board (a “Board Nominee”)) appearing in the Company’s proxy materials with respect to a meeting of shareholders shall not exceed the greater of (A) two and (B) 20% of the number of directors in office as of the last day on which the Notice may be delivered, or if such amount is not a whole number, the closest whole number below 20%; provided, however, that the number of Shareholder Nominees appearing in the Company’s proxy materials pursuant to this

July 23, 2019

Exhibit 3.1

Section 10(c) may be reduced, in the sole discretion of the Board, by the number of director candidates for which the Secretary of the Company receives a notice that a shareholder has nominated a director candidate for election to the Board pursuant to the requirements of subsection (a) of this Section 10 and does not expressly elect at the time of providing the notice to have its nominee included in the Company’s proxy materials pursuant to this Section 10(c). In the event that the number of Shareholder Nominees submitted by Eligible Shareholders pursuant to this Section 10(c) exceeds this maximum number, each Eligible Shareholder shall select one Shareholder Nominee for inclusion in the Company’s proxy materials until the maximum number is reached, going in the order of the amount (largest to smallest) of shares of the Company’s stock eligible to vote in the election of directors each Eligible Shareholder disclosed as owned in the Notice. If the maximum number is not reached after each Eligible Shareholder has selected one Shareholder Nominee, this selection process shall continue as many times as necessary, following the same order each time, until the maximum number is reached.

(iii) An Eligible Shareholder must have owned (as defined below) 3% or more of the outstanding shares of the Company’s stock eligible to vote in the election of directors continuously for at least three years (the “Required Shares”) as of both the date the Notice is delivered to the Company and the record date for determining shareholders entitled to vote at the meeting and must continue to own the Required Shares through the meeting date. For purposes of satisfying the foregoing ownership requirement under this Section 10(c), (A) the shares of stock of the Company owned by one or more shareholders, or by the person or persons who own shares of the Company’s stock and on whose behalf any shareholder is acting, may be aggregated, provided that the number of shareholders and other persons whose ownership of shares is aggregated for such purpose shall not exceed 20, and further provided that the group of shareholders shall have provided to the Secretary of the Company as a part of providing the Notice a written agreement executed by each of its members designating one of the members as the exclusive member to interact with the Company for purposes of this Section 10 on behalf of all members, and (B) two or more funds that are (1) under common management and investment control, (2) under common management and funded primarily by the same employer, or (3) a “group of investment companies,” as such term is defined in Section 12(d)(1)(G)(ii) of the Investment Company Act of 1940, as amended, shall be treated as one shareholder or beneficial owner. The inspectors of election shall not give effect to the Eligible Shareholder’s votes with respect to the election of directors if the Eligible Shareholder does not comply with each of the representations in clause (D) below. Within the time period specified for providing the Notice, an Eligible Shareholder must provide the following information in writing to the Secretary of the Company (in addition to the information required to be provided by subsection (a) of this Section 10):

(A) one or more written statements from the record holder of the shares (and from each intermediary through which the shares are or have been held during the requisite three-year holding period) verifying that, as of a date within seven calendar days prior to the date the Notice is delivered to or mailed and received by the Company, the Eligible Shareholder owns, and has owned continuously for the preceding

July 23, 2019

Exhibit 3.1

three years, the Required Shares, and the Eligible Shareholder’s agreement to provide, within five business days after the record date for the meeting, written statements from the record holder and intermediaries verifying the Eligible Shareholder’s continuous ownership of the Required Shares through the record date,

(B) the written consent of each Shareholder Nominee to be named in the proxy statement as a nominee and to serve as a director if elected,

(D) a representation that the Eligible Shareholder:

(1) acquired the Required Shares in the ordinary course of business and not with the intent to change or influence control of the Company, and does not presently have such intent,

(2) has not nominated and will not nominate for election to the Board at the meeting any person other than the Shareholder Nominee(s) being nominated pursuant to this Section 10(c),

(3) has not engaged and will not engage in, and has not and will not be, a “participant” in another person’s “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the meeting other than its Shareholder Nominee(s) or a Board Nominee,

(4) will not distribute to any shareholder any form of proxy for the meeting other than the form distributed by the Company,

(5) will continue to own the Required Shares through the date of the meeting, and

(6) will provide facts, statements and other information in all communications with the Company and its shareholders that are or will be true and correct in all material respects and do not and will not omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading,

(E) an undertaking that the Eligible Shareholder agrees to

(1) assume all liability stemming from any legal or regulatory violation arising out of the Eligible Shareholder’s communications with the Company’s shareholders or out of the information that the Eligible Shareholder provided to the Company,

(2) indemnify and hold harmless the Company and each of its directors, officers and employees individually against any liability, loss or damages in

July 23, 2019

Exhibit 3.1

connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the Company or any of its directors, officers or employees arising out of any nomination submitted by the Eligible Shareholder pursuant to this Section 10(c),

(3) file with the SEC all soliciting and other materials as required under subdivision (viii) of this Section 10(c), and

(4) comply with all other applicable laws, rules, regulations and listing standards with respect to any solicitation in connection with the meeting, and

(F) written disclosure of any transactions between the Eligible Shareholder and the Shareholder Nominee or the Board Nominee within the preceding five years.

(iv) For purposes of this Section 10(c), an Eligible Shareholder shall be deemed to “own” only those outstanding shares of the Company’s stock as to which a shareholder who is the Eligible Shareholder or is included in the group that constitutes the Eligible Shareholder possesses both (A) the full voting and investment rights pertaining to the shares and (B) the full economic interest in (including the opportunity for profit and risk of loss on) such shares; provided that the number of shares calculated in accordance with clauses (A) and (B) shall not include any shares (1) sold by or on behalf of such shareholder in any transaction that has not been settled or closed, (2) borrowed by or on behalf of such shareholder for any purpose or purchased by such shareholder pursuant to an agreement to resell or (3) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or similar agreement entered into by or on behalf of such shareholder whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares of the Company’s stock, in any such case which instrument or agreement has, or is intended to have, the purpose or effect of (x) reducing in any manner, to any extent or at any time in the future, such shareholder’s full right to vote or direct the voting of any such shares, and/or (y) hedging, offsetting or altering to any degree gain or loss arising from the full economic ownership of such shares by such shareholder. A shareholder shall “own” shares held in the name of a nominee or other intermediary so long as the shareholder retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A shareholder’s ownership of shares shall be deemed to continue during (A) any period in which the shareholder has delegated any voting power by means of a proxy, power of attorney or other instrument or arrangement that is revocable at any time by the shareholder, or (B) has loaned such shares, provided that the person has the power to recall such loaned shares on not more than five business days’ notice and (i) such person repossesses the loaned shares within five business days of being notified that its Shareholder Nominee will be included in the Company’s proxy statement for the relevant annual meeting and (ii) such person holds the recalled shares through the relevant annual meeting. Whether outstanding shares of the Company’s stock are “owned” for these

July 23, 2019

Exhibit 3.1

purposes shall be determined by the Board, which determination shall be conclusive and binding on the Company and its shareholders, including the Eligible Shareholder.

(v) The Eligible Shareholder may provide to the Secretary of the Company, within the time period specified for providing the Notice, a written statement for inclusion in the Company’s proxy statement for the meeting, not to exceed 500 words, in support of the Shareholder Nominee’s candidacy (the “Statement”). Notwithstanding anything to the contrary contained in this Section 10, the Company may omit from its proxy materials any information or statement that it believes would violate any applicable law, rule, regulation or listing standard.

(vi) The Company shall not be required to include, pursuant to this Section 10(c), a Shareholder Nominee in its proxy materials:

(A) if the Eligible Shareholder who has nominated such Shareholder Nominee has engaged in or is currently engaged in, or has been or is a “participant” in another person’s, “solicitation” within the meaning of Rule 14a-1(l) under the Exchange Act in support of the election of any individual as a director at the meeting other than its Shareholder Nominee(s) or a Board Nominee;

(B) who is not independent under the listing standards of the principal exchange upon which the Company’s stock is traded, any applicable rules of the SEC and any publicly disclosed standards used by the Board in determining and disclosing the independence of the Company’s directors, as determined by the Board;

(C) whose election as a member of the Board would cause the Company to be in violation of these By-Laws, the Company’s Articles of Incorporation, the listing standards of the principal exchange upon which the Company’s stock is traded, or any applicable state or federal law, rule or regulation;

(D) who is or has been, within the past three years, an officer or director of a competitor, as defined in Section 8 of the Clayton Antitrust Act of 1914;

(E) who is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in such a criminal proceeding within the past 10 years;

(F) who is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended;

(G) if such Shareholder Nominee or the applicable Eligible Shareholder shall have provided information to the Company in respect to such nomination that was untrue in any material respect or omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, as determined by the Board;

July 23, 2019

Exhibit 3.1

(H) if the Eligible Shareholder who has nominated such Shareholder Nominee has filed a Schedule 13D with respect to the Company within the past year; or

(I) if the Eligible Shareholder or applicable Shareholder Nominee otherwise breaches any of its or their obligations, agreements or representations under this Section 10.

(vii) Notwithstanding anything to the contrary set forth herein, the chairman of the meeting shall declare a nomination by an Eligible Shareholder to be invalid, and such nomination shall be disregarded notwithstanding that proxies in respect of such vote may have been received by the Company, if the Shareholder Nominee(s) and/or the applicable Eligible Shareholder shall have breached its or their obligations, agreements or representations under this Section 10, as determined by the Board or the chairman of the meeting.

(viii) The Eligible Shareholder shall file with the SEC any solicitation communication with the Company’s shareholders relating to the meeting at which the Shareholder Nominee will be nominated, regardless of whether any such filing is required under Regulation 14A of the Exchange Act, or whether any exemption from filing is available for such solicitation communication under Regulation 14A of the Exchange Act.

(ix) No person may be a member of more than one group of persons constituting an Eligible Shareholder under this Section 10(c).

(x) Any Shareholder Nominee who is included in the Company’s proxy materials for a particular meeting of shareholders but either (A) withdraws from or becomes ineligible or unavailable for election at the meeting, or (B) does not receive at least 25% of the votes cast in favor of the Shareholder Nominee’s election, shall be ineligible to be a Shareholder Nominee pursuant to this Section 10(c) for the next two annual meetings of shareholders following the meeting for which the Shareholder Nominee has been nominated for election.

(d) General.

(i) Only such persons who are nominated in accordance with the procedures set forth in this Section 10 shall be eligible at an annual or special meeting of shareholders of the Company to serve as directors and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 10. Except as otherwise provided by the VSCA, the chairman of the meeting shall have the power and duty:

(A) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 10 (including whether the shareholder or beneficial owner, if any, on whose behalf the nomination or proposal is

July 23, 2019

Exhibit 3.1

made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such shareholder’s nominee or proposal in compliance with such shareholder’s representation as required by Article I, Section 10(a)(ii)(C) and (D)) and

(B) to declare that such nomination shall be disregarded or that such proposed business shall not be transacted.

Notwithstanding the foregoing provisions of this Section 10, if the shareholder (or a designated representative of the shareholder) does not appear at the annual or special meeting of shareholders of the Company to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Company.

(ii) For purposes of this Section 10, “public announcement” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Company with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(iii) Notwithstanding the foregoing provisions of this Section 10, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 10. Nothing in this Section 10 shall be deemed to affect any rights of (A) shareholders to request inclusion of proposals in the Company’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (B) the holders of any series of preferred stock, if any, to elect directors pursuant to any applicable provisions of the Articles of Incorporation.

(iv) A shareholder must further update and supplement the notices required by this Section 10, if necessary, so that the information provided or required to be provided in such notice shall be true and correct as of the record date for determining the shareholders entitled to notice of the meeting and as of the date that is 10 business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to the Secretary not later than five business days after the record date for determining the shareholders entitled to notice of the meeting (in the case of the update and supplement required to be made as of such record date), and not later than five business days prior to the date of the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed (in the case of the update and supplement required to be made as of 10 business days prior to the meeting or any adjournment or postponement thereof).

Section 11. Submission of Questionnaire, Representation and Agreement. To be eligible to be a nominee for election or reelection as a director of the Company, a person must deliver (60 days prior to the mailing of the Company’s proxy statement with respect to such election or reelection) to the Secretary at the principal executive offices of the Company a written questionnaire with respect to the background and qualification of such

July 23, 2019

Exhibit 3.1

person (which questionnaire shall be provided by the Secretary upon written request) and (prior to the mailing of the Company’s proxy statement with respect to such election or reelection) a written representation and agreement (in the form provided by the Secretary upon written request) (the “Agreement”), which Agreement (a) shall provide that such person (i) is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Company, will act or vote on any issue or question or that could limit or interfere with such person’s ability to comply with such person’s fiduciary duties under applicable law (a “Voting Commitment”), (ii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director nominee that has not been disclosed to the Company and, if such person is elected as a director of the Company, is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director of the Company, and (iii) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Company, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Company (copies of which shall be provided by the Secretary upon written request) (subject to any waivers or exemptions granted pursuant to a resolution of the majority of the disinterested members of the Board) and (b) if such person is at the time a director or is subsequently elected as a director of the Company, shall include such person’s irrevocable resignation as a director if such person is found by a court of competent jurisdiction to have breached the Agreement in any material respect.

Section 12. Inspectors. The Company shall appoint one or more inspectors to act at a meeting of shareholders of the Company and make a written report of the inspector’s determinations. The Company may designate one or more persons as alternate inspector to replace any inspector who fails to act. If no inspector or alternate is able to act at any meeting of shareholders, the chairman of such meeting shall appoint one or more inspectors to act at the meeting. Each inspector shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspectors shall (a) ascertain the number of shares outstanding and the voting power of each, (b) determine the shares represented at the meeting and the validity of proxies and ballots, (c) count all votes, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting and their count of all votes. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.

ARTICLE II

July 23, 2019

Exhibit 3.1

Directors

Section 1. General Powers. The property, affairs and business of the Company shall be managed under the direction of the Board, and except as otherwise expressly provided by the VSCA, the Articles of Incorporation or these Bylaws, all of the powers of the Company shall be vested in such Board.

Section 2. Number of Directors. The Board shall consist of at least seven and no more than 13 members, the exact number to be determined by resolution adopted by the Board from time to time.

Section 3. Election of Directors.

(a) Directors shall be elected each year at the annual meeting of shareholders. A nominee for director shall be elected to the Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election; provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of the shareholders if, as of the tenth day preceding the date the Company first mails its notice of meeting for such meeting to the shareholders of the Company, the number of nominees for director exceeds the number of directors to be elected (a “contested election”). If directors are to be elected by a plurality of the votes cast, the shareholders shall not be permitted to vote against a nominee.

(b) Directors shall hold their offices until the next annual meeting of the shareholders and until their successors are elected. Any director may be removed from office as set forth in the Articles of Incorporation.

(c) Any vacancy occurring in the Board may be filled by the affirmative vote of the majority of the remaining directors though less than a quorum of the Board.

(d) A majority of the number of directors fixed by these Bylaws shall constitute a quorum for the transaction of business. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board.

Section 4. Meetings of Directors.

(a) Meetings of the Board shall be held at places within or without the Commonwealth of Virginia and at times fixed by resolution of the Board or upon call of the Chief Executive Officer or the Chairman of the Board, and the Secretary or officer performing the Secretary’s duties shall give not less than twenty-four (24) hours’ notice by letter, telegraph, telephone, in person, or other form of electronic transmission of all meetings of the directors, provided that notice need not be given of regular meetings held at times and places fixed by resolution of the Board. An annual meeting of the Board shall be held as soon as practicable after the adjournment of the annual meeting of shareholders. Meetings may be held at any time without notice if all of the directors are present, or if

July 23, 2019

Exhibit 3.1

those not present waive notice in writing either before or after the meeting. Directors may be allowed, by resolution of the Board, a reasonable fee and expenses for attendance at meetings.

(b) The Board may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present at the meeting.

(c) Action required to be taken at a Board’s meeting may be taken without a meeting if the action is taken by all directors. The action shall be evidenced by one or more consents stating the action taken, signed by each director either before or after the action taken, and included in the minutes or filed with the corporate records reflecting the action taken. Any consent and the signing thereof may be accomplished by one or more electronic transmissions, as provided by VSCA §13.1-610D, as amended from time to time.

ARTICLE III

Committees

Section 1. Executive Committee.

(a) On recommendation of the Nominating & Governance Committee, the Board shall, by vote of a majority of the number of directors fixed by these Bylaws, designate an Executive Committee. The members of the Executive Committee shall serve until their successors are designated by the Board, until removed or until the Executive Committee is dissolved by the Board. All vacancies on the Executive Committee shall be filled by the Board.

(b) When the Board is not in session, the Executive Committee shall have all power vested in the Board by law, the Articles of Incorporation or these Bylaws, except as otherwise provided in the VSCA. The Executive Committee shall report at the next regular or special meeting of the Board all action which the Executive Committee may have taken on behalf of the Board since the last regular or special meeting of the Board.

Section 2. Executive Compensation Committee.

(a) On recommendation of the Nominating & Governance Committee, the Board, at its regular annual meeting, shall designate an Executive Compensation Committee, which shall consist of three or more directors who shall not be eligible for bonus, stock option or stock appreciation rights and each of whom shall satisfy the independence requirements of the New York Stock Exchange (“NYSE”), as amended from time to time. The responsibilities of the Executive Compensation Committee shall be set forth in its charter as approved by the Board.

(b) The Executive Compensation Committee shall fix its own rules of procedure. The Committee shall keep minutes of its meetings, and all action taken shall be reported

July 23, 2019

Exhibit 3.1

to the Board. Vacancies on the Executive Compensation Committee shall be filled by the Board, and members shall be subject to removal by the Board at any time.

Section 3. Audit and Finance Committee.

(a) On recommendation of the Nominating & Governance Committee, the Board, at its regular annual meeting, shall designate an Audit and Finance Committee, which shall consist of three or more directors whose membership on the Committee shall meet the requirements set forth in the rules of the NYSE, as amended from time to time. The responsibilities of the Audit and Finance Committee shall be set forth in its charter as approved by the Board.

(b) The Audit and Finance Committee shall fix its own rules of procedure. The Committee shall keep minutes of all of its meetings, and all action taken shall be reported to the Board. Vacancies on the Audit and Finance Committee shall be filled by the Board, and members shall be subject to removal by the Board at any time.

Section 4. Nominating & Governance Committee.

(a) On recommendation of the Nominating & Governance Committee, the Board shall, at its regular annual meeting, designate a Nominating & Governance Committee, which shall consist of three or more directors each of whom shall satisfy the independence requirements of the NYSE, as amended from time to time. The responsibilities of the Nominating & Governance Committee shall be set forth in its charter as approved by the Board.

(b) The Nominating & Governance Committee shall fix its own rules of procedure. The Committee shall keep minutes of its meetings, and all action taken shall be reported to the Board. Vacancies on the Nominating & Governance Committee shall be filled by the Board, and members shall be subject to removal by the Board at any time.

Section 5. Other Committees of the Board. The Board, by resolution duly adopted, may establish such other committees of the Board as it may deem advisable and the members, terms and authority of such committees shall be as set forth in the resolutions establishing the same.

Section 6. Notice of Committee Meetings; Quorum. Meetings of any Committee shall be held at such places and at such times fixed by resolution of the Committee, or upon call of the Chief Executive Officer, the Chairman of the Board or the Chairman of the Committee. Not less than 12 hours’ notice shall be given by letter, telegraph, telephone, in person, or, in the manner provided in Article II, Section 4, electronically, of all meetings of any Committee, provided that notice need not be given of regular meetings held at times and places fixed by resolution of the Committee and meetings may be held at any time without notice if all of the members of the Committee are present or if those not present waive notice in writing either before or after the meeting. A majority of the members of the

July 23, 2019

Exhibit 3.1

Committee then serving shall constitute a quorum for the transaction of business at any meeting.

ARTICLE IV
Officers

Section 1. Election. The officers of the Company may consist of a Chief Executive Officer, a Chairman of the Board, a Vice Chairman of the Board, a President, one or more Vice Presidents (any one or more of whom may be designated as Executive Vice Presidents or Senior Vice Presidents), a Secretary and a Treasurer. In addition, such other officers may from time to time be elected by the Board, including, without limitation, one or more Assistant Secretaries and Assistant Treasurers. All officers shall hold office until the next annual meeting of the Board or until their successors are elected. The Chairman of the Board and the Vice Chairman of the Board shall be chosen from among the directors. Any two offices may be combined in the same person as the Board may determine.

Section 2. Removal of Officers; Vacancies. Any officer of the Company may be removed summarily with or without cause, at any time by a resolution passed at any meeting by affirmative vote of a majority of the number of directors fixed by these Bylaws. Vacancies may be filled at any meeting of the Board.

Section 3. Duties. The officers of the Company shall have such duties as generally pertain to their offices, respectively, as well as such powers and duties as are hereinafter provided and as from time to time shall be conferred by the Board. The Board may require any officer to give such bond for the faithful performance of his duties as the Board may see fit.

Section 4. Duties of the Chief Executive Officer. The Chief Executive Officer shall be responsible for the execution of the policies of the Board and shall have supervision over the business of the Company and its several officers, subject to the authority of the Board. Unless the Board provides otherwise, the Chief Executive Officer also shall be the President of the Company. The Chief Executive Officer may sign and execute in the name of the Company deeds, mortgages, bonds, contracts or other instruments, except in cases where the signing and the execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Company or shall be required by law otherwise to be signed or executed. In addition, he shall perform all duties incident to the office of the Chief Executive Officer and such other duties as from time to time may be assigned to him by the Board.

Section 5. Chairman of the Board.

(a) The Chairman of the Board shall preside at all meetings of shareholders, the Board and, unless there is a Chairman of the Executive Committee, the Executive Committee.

July 23, 2019

Exhibit 3.1

(b) The Chairman of the Board may sign and execute in the name of the Company deeds, mortgages, bonds, contracts or other instruments, except in cases where the signing and the execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Company or shall be required by law otherwise to be signed or executed. In addition, he shall perform all duties incident to the office of the Chairman of the Board and such other duties as from time to time may be assigned to him by the Board.

Section 6. Duties of the Vice Chairman of the Board. The Vice Chairman of the Board shall perform all duties incident to the office of the Vice Chairman of the Board and shall have such other powers and duties as may from time to time be assigned to him by the Board, the Chief Executive Officer or the Chairman of the Board. The Vice Chairman of the Board may sign and execute in the name of the Company deeds, mortgages, bonds, contracts and other instruments, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Company or shall be required by law otherwise to be signed or executed.

Section 7. Duties of the President. The President shall have direct supervision over the business of the Company subject to the authority of the Board, the Chief Executive Officer (if the President is not also Chief Executive Officer) and the Chairman of the Board. The President may sign and execute in the name of the Company deeds, mortgages, bonds, contracts or other instruments, except in cases where the signing and the execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Company or shall be required by law otherwise to be signed or executed. In addition, he shall perform all duties incident to the office of the President and such other duties as from time to time may be assigned to him.

Section 8. Duties of the Vice Presidents. Each Vice President of the Company (including any Executive Vice President and Senior Vice President) shall have powers and duties that are customary for that office and such other powers and duties as may from time to time be assigned to him. Any Vice President of the Company may sign and execute in the name of the Company deeds, mortgages, bonds, contracts and other instruments, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Company or shall be required by law otherwise to be signed or executed.

Section 9. Duties of the Treasurer. The Treasurer shall have charge and custody of and be responsible for all funds and securities of the Company, and shall cause all such funds and securities to be deposited in such banks and depositories as the Board from time to time may direct. He shall maintain adequate accounts and records of all assets, liabilities and transactions of the Company in accordance with generally accepted accounting practices; shall exhibit his accounts and records to any of the directors of the Company at any time upon request at the office of the Company; shall render such statements of his accounts and records and such other statements to the Board and officers as often and in such manner as they shall require; and shall make and file (or supervise

July 23, 2019

Exhibit 3.1

the making and filing of) all tax returns required by law. He shall in general perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him.

Section 10. Duties of the Secretary. The Secretary shall act as secretary of all meetings of the Board and the shareholders of the Company, and shall keep the minutes thereof in the proper book or books to be provided for that purpose. He shall see that all notices required to be given by the Company are duly given and served; shall have custody of the seal of the Company and shall affix the seal or cause it to be affixed to all certificates for stock of the Company and to all documents the execution of which on behalf of the Company under its corporate seal is duly authorized in accordance with the provisions of these Bylaws; shall have custody of all deeds, leases, contracts and other important corporate documents; shall have charge of the books, records and papers of the Company relating to its organization and management as a Company; shall see that the reports, statements and other documents required by law (except tax returns) are properly filed; and shall, in general, perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him.

Section 11. Other Duties of Officers. Any officer of the Company shall have, in addition to the duties prescribed herein or by law, such other duties as from time to time shall be prescribed.

ARTICLE V

Capital Stock

Section 1. Certificates. The shares of capital stock of the Company may be certificated or uncertificated as provided under the VSCA. All certificates representing shares of capital stock of the Company shall be in such forms as prescribed by the Board and executed by the Chief Executive Officer or the Chairman of the Board and by the Secretary or an Assistant Secretary and stating thereon the information required by law. Transfer agents and/or registrars for one or more classes of the stock of the Company may be appointed by the Board and may be required to countersign certificates representing stock of such class or classes. In the event that any officer whose signature or facsimile thereof shall have been used on a stock certificate shall for any reason cease to be an officer of the Company and such certificate shall not then have been delivered by the Company, the Board may nevertheless adopt such certificate and it may then be issued and delivered as though such person had not ceased to be an officer of the Company. Within a reasonable time after the issuance or transfer of uncertificated shares of the Company, the Company shall send, or cause to be sent, to the holder a written statement that shall include the information required by law to be set forth on certificates for shares of capital stock.

Section 2. Lost, Destroyed and Mutilated Certificates. Holders of the stock of the Company in certificated form shall immediately notify the Company of any loss, destruction or mutilation of the certificate therefor, and the Board may, in its discretion, cause one or more new certificates or evidence of such holder’s ownership of such shares

July 23, 2019

Exhibit 3.1

in uncertificated form for the same number of shares in the aggregate to be issued to such shareholder upon the surrender of the mutilated certificate or upon satisfactory proof of such loss or destruction, and the deposit of a bond in such form and amount and with such surety as the Board may require.

Section 3. Transfer of Stock. The stock of the Company shall be transferable or assignable only on the books of the Company by the holders in person or by attorney, and in the case of shares of stock of the Company represented by a certificate, on surrender of the certificate for such shares duly endorsed and, if sought to be transferred by attorney, accompanied by a written power of attorney to have the same transferred on the books of the Company. Uncertificated shares shall be transferable or assignable only on the books of the Company upon proper instruction from the holder of such shares. The Company will recognize the exclusive right of the person registered on its books as the owner of shares to receive dividends and to vote as such owner.

Section 4. Fixing Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of the shareholders or any adjournment thereof, or entitled to receive payment for any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than 70 days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. Except as otherwise required by the VSCA, when a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this Section 4, such determination shall apply to any adjournment thereof.

ARTICLE VI

Miscellaneous Provisions

Section 1. Seal. The seal of the Company shall consist of a flat-face circular die, of which there may be any number of counterparts, on which there shall be engraved in the center the words “Albemarle Corporation.”

Section 2. Fiscal Year. The fiscal year of the Company shall end on December 31st of each year.

Section 3. Books and Records. The Company shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders and Board. The Company shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar a record of its shareholders, giving the names and addresses of all shareholders, and the number, class and series of the shares being held.

July 23, 2019

Exhibit 3.1

Section 4. Checks, Notes and Drafts. Checks, notes, drafts and other orders for the payment of money shall be signed by such persons as the Board from time to time may authorize. When the Board so authorizes, however, the signature of any such person may be a facsimile.

Section 5. Amendment of Bylaws. These Bylaws may be amended or altered at any meeting of the Board. The shareholders entitled to vote in respect of the election of directors, however, shall have the power to rescind, alter, amend or repeal any Bylaws and to enact Bylaws which, if expressly so provided, may not be amended, altered or repealed by the Board.

Section 6. Voting of Stock Held. The Chief Executive Officer, the Chairman of the Board or such other officer or officers as may be designated by the Board or the Executive Committee shall from time to time appoint an attorney or attorneys or agent or agents of this Company, in the name and on behalf of this Company, to cast the vote which this Company may be entitled to cast as a shareholder or otherwise in any other company any of whose stock or securities may be held in this Company, at meetings of the holders of the stock or other securities of such other company, or to consent in writing to any action by any of such other company, and shall instruct the person or persons so appointed as to the manner of casting such votes or giving such consent and may execute or cause to be executed on behalf of this Company and under its corporate seal or otherwise, such written proxies, consents, waivers or other instruments as may be necessary or proper in the premises; or, in lieu of such appointment, the Chief Executive Officer, the Chairman of the Board or any such designated officer or officers may attend in person any meetings of the holders of stock or other securities of any such other company and there vote or exercise any or all power of this Company as the holder of such stock or other securities of such other company.

Section 7. Control Share Acquisition Statute. Article 14.1 of the VSCA (“Control Share Acquisitions”) shall not apply to acquisitions of shares of stock of the Company.

Section 8. Exclusive Forum. Unless the Company consents in writing to the selection of an alternative forum, the United States District Court for the Eastern District of Virginia, Alexandria Division, or in the event that court lacks jurisdiction to hear such action, the Circuit Court of the County of Fairfax, Virginia, shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a legal duty owed by any current or former director, officer or other employee or agent of the Company to the Company or the Company’s shareholders, (iii) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the VSCA or the Articles of Incorporation or these Bylaws (as either may be amended from time to time), or (iv) any action asserting a claim against the Company or any current or former director or officer or other employee or agent of the Company governed by the internal affairs doctrine.

July 23, 2019

Exhibit 10.1

Albemarle Corporation

4250 Congress Street

Suite 900

Charlotte, North Carolina 28209

13 June 2019

Mark Wilson

Wodgina Lithium Pty Ltd; Mineral Resources Limited

1 Sleat Road

Applecross WA 6153 Australia

BY EMAIL: Mark.Wilson@mineralresources.com.au

Copy: nick.rohr@mineralresources.com.au

Dear Mr Wilson

Asset Sale and Share Subscription Agreement – Conditions Precedent Date amendments


1.	We refer to the Asset Sale and Share Subscription Agreement between Mineral Resources Limited, Wodgina Lithium Pty Ltd, Albemarle Wodgina Pty Ltd and Albemarle Corporation dated 14 December 2018 (Agreement). Capitalised terms used in this letter have the meaning given to them in the Agreement.


2.	As you are aware, under the Agreement the Conditions Precedent Date is 14 June 2019, and, as all the Conditions have not yet been satisfied, the parties have agreed in lieu of one or other of the Buyer or Seller giving notice to the other to extend the Conditions Precedent Date to 15 December 2019, to do so by agreement under this letter.


3.	Accordingly, with effect on and from the date of execution of this letter, the parties agree the Agreement is amended by:


(a)	deleting clause 2.3;


(b)	in clause 2.6(a)(ii), deleting the words 'Final Conditions Precedent Date' and replacing them with the words 'Conditions Precedent Date';


(c)	deleting the definition of 'Conditions Precedent Date' in Schedule 1 and replacing it with the following:

'Conditions Precedent Date means 15 December 2019 or such other date as the parties may agree in writing.'; and


(d)	deleting the definition of 'Final Conditions Precedent Date' in Schedule 1.


4.	The parties agree that the Agreement:


(a)	will be read and constructed subject to this letter; and


(b)	except as amended in this letter, the Agreement continues in full force and effect.


5.	The parties acknowledge that:


(a)	the terms of this letter effect an amendment to the Agreement in accordance with the requirements of clause 27.6 of the Agreement; and


(b)	the amendments to the Agreement in accordance with this letter result in a variation of the Agreement and not a cancellation, termination or replacement of the Agreement.


6.	This letter may be executed in counterparts. All executed counterparts constitute one document.


7.	Please sign the enclosed copy of this letter to evidence Wodgina Lithium Pty Ltd and Mineral Resources Limited's agreement to the terms of this letter.

Yours faithfully

Eric Norris

President, Lithium

for and on behalf of Albemarle Wodgina Pty Ltd; Albemarle Corporation

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

By signing below, we hereby agree to the terms set out in the letter above:

EXECUTED as a deed.



Executed by Wodgina Lithium Pty Ltd ACN 611 488 932 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)



Executed by Albemarle Wodgina Pty Ltd ACN 630 509 303 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)



Executed by Mineral Resources Limited ACN 118 549 910 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)



Executed by Albemarle Corporation in the presence of:


Signature of witness		Signature of authorised signatory

Name of witness (print)		Name of authorised signatory (print)

Page 2

Exhibit 10.2




	Amendment Deed Asset Sale and Share Subscription Agreement Wodgina Project ⎯ Wodgina Lithium Pty Ltd Albemarle Wodgina Pty Ltd Mineral Resources Limited Albemarle Corporation ⎯



Level 22 Waterfront Place 1 Eagle Street Brisbane Qld 4000 Australia DX 102 Brisbane T +61 7 3119 6000 F +61 7 3119 1000 minterellison.com

Amendment Deed

Asset Sale and Share Subscription Agreement



Details	3
Agreed terms	4
1. Defined terms & interpretation	4
2. Variation to Agreement	4
3. Continued force and effect of Agreement	4
4. Miscellaneous	4
Signing page	6
Annexure A – Amendments to Agreement	7
Annexure B	16
Schedule 15 - Kemerton Incomplete Infrastructure Commissioning	16
Schedule 17 – Construction Costs Statement	33
Schedule 18 – Amendments to JVA	35



Amendment Deed to Asset Sale and Share Subscription Agreement MinterEllison \| Ref: SFS 1225164	Page 2

Details



Date

Parties



Name	Wodgina Lithium Pty Ltd ACN 611 488 932
Short form name	Seller
Notice details	Delivery Address: 1 Sleat Road, Applecross WA 6153 Postal Address: Locked Bag 3, Canning Bridge, Applecross WA 6153 Email: cosec@mineralresources.com.au Attention: Company Secretary



Name	Albemarle Wodgina Pty Ltd ABN 69 630 509 303
Short form name	Buyer
Notice details	Delivery Address: 4250 Congress Street, Suite 900, Charlotte NC 28209 Postal Address: 4250 Congress Street, Suite 900, Charlotte NC 28209 Email: legal_notices@albemarle.com Attention: General Counsel



Name	Mineral Resources Limited ACN 118 549 910
Short form name	Seller Guarantor
Notice details	Delivery Address: 1 Sleat Road, Applecross WA 6153 Postal Address: Locked Bag 3, Canning Bridge, Applecross WA 6153 Email: cosec@mineralresources.com.au Attention: Company Secretary



Name	Albemarle Corporation
Short form name	Buyer Guarantor
Notice details	Delivery Address: 4250 Congress Street, Suite 900, Charlotte NC 28209 Postal Address: 4250 Congress Street, Suite 900, Charlotte NC 28209 Email: legal_notices@albemarle.com Attention: General Counsel

Recitals


A	The Seller, Buyer, Seller Guarantor and Buyer Guarantor are party to the Agreement.


B	The parties have agreed to amend the terms of the Agreement in accordance with this deed.



Amendment Deed to Asset Sale and Share Subscription Agreement MinterEllison \| Ref: SFS 1225164	Page 3

Agreed terms


1.	Defined terms & interpretation


1.1	Defined terms

In this deed unless the context otherwise requires:

Agreement means the 'Asset Sale and Share Subscription Agreement – Wodgina Project' between the Seller, the Buyer, the Seller Guarantor and the Buyer Guarantor dated 14 December 2018.

Break Fee Letter means the letter deed between the Seller Guarantor and the Buyer Guarantor dated on or about the date of this deed.

Effective Date means the date that the last party executes this deed.


1.2	Terms used in the Agreement

Terms defined in the Agreement, where used in this deed, have the meaning given to them in the Agreement.


1.3	Interpretation

This deed must be interpreted in accordance with the rules in clause 1 of the Agreement.


2.	Variation to Agreement

With effect on and from the Effective Date, the Agreement is amended in accordance with Annexure A to this deed.


3.	Continued force and effect of Agreement


(a)	The parties agree that the Agreement:


(i)	will be read and construed subject to this deed; and


(ii)	except as amended under clause 2, the Agreement continues in full force and effect.


(b)	The parties acknowledge that:


(i)	the terms of this deed effect an amendment to the Agreement in accordance with the requirements of clause 27.6 of the Agreement; and


(ii)	the amendments to the Agreement in accordance with this deed result in a variation of the Agreement and not a cancellation, termination or replacement of the Agreement.


4.	Miscellaneous


4.1	Alterations

This deed may be altered or varied only in writing signed by each party.


4.2	Costs

Each party must pay its own costs of negotiating, preparing and executing this deed.



Amendment Deed to Asset Sale and Share Subscription Agreement MinterEllison \| Ref: SFS 1225164	Page 4


4.3	Survival

Any indemnity or any obligation of confidence under this deed is independent and survives termination of this deed. Any other term by its nature intended to survive termination of this deed survives termination of this deed.


4.4	Counterparts

This deed may be executed in counterparts. All executed counterparts constitute one document.


4.5	Entire Agreement

This deed constitutes the entire agreement between the parties in connection with its subject matter and supersedes all previous agreements or understanding between the parties in connection with its subject matter.


4.6	Severability

A term or a part of term of this deed that is illegal or unenforceable may be severed from this deed and the remaining terms or parts of term of this deed continue in force.


4.7	Waiver

A party does not waive a right, power or remedy if it fails to exercise or delays in exercising the right, power or remedy. A single or partial exercise of a right, power or remedy does not prevent another or further exercise of that right or another right, power or remedy. A waiver of a right, power or remedy must be in writing and signed by the party giving the waiver.


4.8	Governing law and jurisdiction

This deed is governed by the law of Western Australia and each party irrevocably submits to the exclusive jurisdiction of the courts of Western Australia.



Amendment Deed to Asset Sale and Share Subscription Agreement MinterEllison \| Ref: SFS 1225164	Page 5

Signing page

EXECUTED as a deed.



Executed by Wodgina Lithium Pty Ltd ACN 611 488 932 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)



Executed by Albemarle Wodgina Pty Ltd ACN 630 509 303 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)



Executed by Mineral Resources Limited ACN 118 549 910 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)



Executed by Albemarle Corporation in the presence of:


Signature of witness		Signature of authorised signatory

Name of witness (print)		Name of authorised signatory (print)



Amendment Deed to Asset Sale and Share Subscription Agreement MinterEllison \| Ref: SFS 1225164	Page 6

Annexure A – Amendments to Agreement


1.	Background

The Background of the Agreement is amended by deleting paragraph C and replacing it with the following:


"C	The Buyer has agreed to subscribe for, and the Seller has agreed to procure that WLOPL will allot and issue, the Subscription Shares on the terms and conditions set out in this agreement such that on and from Completion, the Buyer will hold 60% and the Seller will hold 40% of the Ordinary Shares in WLOPL."


2.	Clause 2 – Conditions to Completion

Clause 2 of the Agreement is deleted and replaced with the following:

"2.1 Conditions precedent

Clauses 3, 4 and 7 do not become binding on the parties and are of no force and effect until each of the following Conditions have been satisfied or waived in accordance with clauses 2.2 and 2.4:

(a) Regulatory approvals:

(i) either:


(A)	the Buyer receiving notice in writing from the Federal Treasurer or his or her agent to the effect that there are no objections under the Australian Government's foreign investment policy or under FATA to the Buyer acquiring the Sale Interest and the Subscription Shares in accordance with this agreement; or


(B)	the Treasurer being, by reason of lapse of time, no longer empowered to make an order under FATA in respect of the acquisition contemplated by this agreement; and

(ii) either:

(A)

a merger filing, if required, having been made by the parties to, and accepted by, SAMR pursuant to the Anti-Monopoly Law and SAMR having issued a decision confirming that it will not conduct further review of the transactions evidenced by this agreement or it will allow the transactions evidenced by this agreement to proceed without conditions or, subject to clause 2.2(b) on conditions reasonably acceptable to the parties; or


(B)	that all applicable waiting periods under the Anti-Monopoly Law in respect of the review of the transaction contemplated by this agreement have expired.


(b)	Ministerial consent for Mining Tenements: the Seller and the Buyer have received all necessary consents and approvals by the Minister under the Mining Act to the transfer of the Mining Tenements (to the extent of the Sale Interest) on terms reasonably acceptable to the Seller and Buyer.

(c)

Title Agreements: the consents or approvals of all Counterparties which are required under or pursuant to the Title Agreements in relation to the transactions evidenced by this agreement have been obtained on terms reasonably acceptable to the Buyer and the Seller, including the provision of duly executed unconditional and irrevocable releases of caveats, mortgages and other encumbrances over the Tenements the subject of the Title Agreements.



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(d)	Transfer of Kemerton Sale Interest: The condition precedent to transfer the Kemerton Sale Interest to the Seller set out in clause 2.1(a) of the MRL Kemerton ASA has been satisfied or waived.


(e)	Transfer of Albemarle Kemerton Interest: The condition precedent to transfer the Albemarle Kemerton Interest to the Buyer set out in paragraph 1 of the Albemarle Kemerton ASA has been satisfied or waived.

2.2 Satisfaction of the Conditions


(a)	The Buyer must use all reasonable endeavours to satisfy the Condition in clause 2.1(a)(i) by the Conditions Precedent Date.

(b)

Each of the Buyer and the Seller must use all reasonable endeavours to satisfy the Conditions in clauses 2.1(a)(ii), 2.1(b) 2.1(c) and 2.1(d) by the Conditions Precedent Date, provided that in respect of the Condition in clause 2.1(a)(ii), neither party will be required to offer, propose or agree to any conditions to SAMR’s approval of the transaction evidenced by this agreement until the impact on the Project of such conditions have been agreed between the parties and the Transaction Documents have been revised to reflect such impact, if necessary, on terms reasonably satisfactory to each party.


(c)	The Buyer and the Seller must cooperate with each other in doing anything reasonably necessary to satisfy the Conditions.


(d)	The Seller must duly seek all necessary consents and approvals by the Minister under the Mining Act in connection with the Condition in clauses 2.1(b) within 10 Business Days following the Execution Date.


(e)	The Buyer must use all reasonable endeavours to satisfy the Condition in clause 2.1(e).


(f)	The Buyer must make an amendment to its existing application (or if required, a new application) to the Federal Treasurer to seek the approval referred to in clause 2.1(a)(i)(A) by the date that is 10 Business Days after the Amendment Date in connection with the transactions contemplated by this agreement.


(g)	The Buyer must, if required, make a merger filing with SAMR as referred to in clause 2.1(a)(ii)(A) by the date that is 30 Business Days after the Amendment Date in connection with the transactions contemplated by this agreement.


(h)	The following principles apply to the application and filing contemplated by the Conditions in clause 2.1(a):


(i)	the Buyer will have sole control of the strategy for the application and filing, including preparing, lodging and managing the application and filing;


(ii)	the Buyer will consult with the Seller regarding the strategy for the application and filing and any other subsequent submissions and will consider the Seller's views regarding such strategy to the extent they are reasonable (provided that nothing in this clause 2.2(h) obliges the Buyer to alter its proposed strategy for the application or filing);


(iii)	without limiting clause 2.2(c), the Seller must provide all assistance reasonably requested by the Buyer for the application and filing, including providing any information and signing all documents required; and

(iv)

for the filings contemplated by the Conditions in clauses 2.1(a)(i) and 2.1(a)(ii) respectively, prior to the submission of those filings and any other subsequent submissions to FIRB or SAMR made in connection with clauses 2.1(a)(i) and 2.1(a)(ii) respectively, the Buyer will provide the Seller with a draft of the relevant filings or subsequent submissions (which copy may redact matters which are confidential or commercially sensitive) allowing for a reasonable time in which to provide comments (which comments must be provided promptly) and will consider reasonable amendments to the filing and submissions requested by the Seller (provided that the Buyer is not obliged to amend the filing to account for the Seller's requested amendments).



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2.3 Extension of the Conditions Precedent Date


(a)	If a Condition has not been satisfied, or is unlikely to be satisfied, by the Conditions Precedent Date, the Seller or the Buyer may, by giving a written notice (Extension Notice) to the other party at any time prior to the Conditions Precedent Date, extend the Conditions Precedent Date in respect of that Condition to any date on or before 31 March 2020.


(b)	Without limiting clause 2.3(c), the Seller and the Buyer may only issue one Extension Notice each and provided that the date specified in any Extension Notice is no later than 31 March 2020.


(c)	If a Condition has not been satisfied, or is unlikely to be satisfied, by the Conditions Precedent Date, the Seller may, by giving a further Extension Notice, extend the Conditions Precedent Date in respect of that Condition to any date on or before the Final Conditions Precedent Date.

2.4 Waiver


(a)	The Conditions in clause 2.1(a), 2.1(b), 2.1(d) and 2.1(e) are for the benefit of both the Seller and the Buyer and may only be waived by written agreement between the Seller and the Buyer.


(b)	The Condition in clause 2.1(c) is for the benefit of both the Seller and the Buyer and may be waived by either the Seller or the Buyer.

2.5 Notice

The Buyer and the Seller must:


(a)	keep the other party fully informed (by notices in writing) in relation to progress towards the satisfaction of the Conditions; and


(b)	promptly notify the other in writing if it becomes aware that a Condition is satisfied or incapable of being satisfied before the Conditions Precedent Date.

2.6 Termination and failure to Complete


(a)	This agreement is terminated automatically on termination of the MRL Kemerton ASA.


(b)	Without limiting clause 2.6(a), the Buyer or the Seller may terminate this agreement before Completion by giving written notice to the other of the Buyer or the Seller (as the case may be) if:

(i) a Condition is not satisfied or waived by the Conditions Precedent Date;


(ii)	a Condition (which has not been waived) becomes incapable of being satisfied by the Conditions Precedent Date;


(iii)	the parties agree that a Condition cannot be satisfied by the Conditions Precedent Date (unless that Condition is satisfied before termination of this agreement); or


(iv)	the other of the Buyer or the Seller (as is relevant) suffers an Insolvency Event,

and provided that the terminating party is not in breach of a material obligation under this agreement (including that the terminating party must have complied with its obligations in clause 2.2).

(c)

Provided the Conditions have been satisfied or waived, if either the Seller Group or the Buyer Group (Defaulting Party) does not Complete when required to do so under this agreement, other than as a result of default by the other group (Non-Defaulting Party), the Non-Defaulting Party may give the Defaulting Party notice requiring it to Complete within 10 Business Days of receipt of the notice. When a notice is given under this clause 2.6(c), time will be of the essence under this agreement in all respects.



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(d)	If either the MRL Group (as that term is defined in the MRL Kemerton ASA) on the one hand or the Albemarle Group (as that term is defined in the MRL Kemerton ASA) on the other hand gives a notice under clause 2.5(c) of the MRL Kemerton ASA then a notice will be deemed to be given under clause 2.6(c) of this agreement by:


(i)	in the case of the MRL Group, the Seller Group, or


(ii)	in the case of the Albemarle Group, the Buyer Group.


(e)	If the Defaulting Party does not Complete within the period specified in clause 2.6(c), the Non-Defaulting Party may choose either to seek specific performance or terminate this agreement, without limitation to any accrued rights.


(f)	If this agreement is terminated, then:


(i)	if any Transaction Document does not automatically terminate in accordance with its terms on termination of this agreement, the parties will procure that each other Transaction Document that has been executed is terminated;


(ii)	each party is released from its obligations to further perform its obligations under this agreement and each Transaction Document, except those expressed to survive termination; and


(iii)	each party retains the rights it has against the other in respect of any breach of this agreement occurring before termination (except, in relation to the rights of the Seller and the Seller Guarantor, in the circumstances set out in clause 3 the Break Fee Letter)."


3.	Clause 3.1 – Registration of WLOPL

Clause 3.1 of the Agreement is deleted and replaced with the following:

'3.1 Registration of WLOPL

The parties acknowledge and agree that the Seller will procure the registration of WLOPL under the Corporations Act on a date to be agreed in writing between the Seller and the Buyer and, if not agreed, on a date between five (5) and two (2) Business Days prior to Completion.'


4.	Clause 4.3 – Purchase Price

Clause 4.3 of the Agreement is deleted and replaced with the following:

'4.3 Purchase Price


(a)	The consideration for the sale and purchase of the Sale Interest is the Purchase Price.


(b)	The parties acknowledge and agree that:


(i)	the transfer of the Kemerton Sale Interest by Albemarle Lithium to the Seller under and (subject to the terms of the MRL Kemerton ASA) at completion of the MRL Kemerton ASA; and


(ii)	the performance of the obligations set out in clauses 2.1 and 2.2 of Schedule 15,

are collectively in satisfaction of and offset US$480 million (exclusive of GST) of the total Purchase Price leaving only the Cash Consideration payable by the Buyer to the Seller at Completion under clause 4.3(a)."



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5.	Clause 5.2 - CCC Handover

Clause 5.2(b)(ii) of the Agreement is amended by deleting the words '50%' and replacing them with the words '60%'.


6.	Clause 6 – Interim Period

Clause 6 of the Agreement is amended by:


(a)	in clause 6.5(a), deleting the words '60 days of the Execution Date' and replacing them with the words '90 days of the Amendment Date'; and


(b)	deleting clause 6.6 and replacing it with the following:

'6.6 General Conduct – WLOPL


(a)	Subject to clause 6.6(b), the Seller must procure that WLOPL takes any actions approved in writing by both the Seller and the Buyer (each acting reasonably) as are necessary for Completion and the commencement of the joint venture under the JVA from Completion.


(b)	Except as expressly provided in, or permitted or contemplated by this agreement or as consented to by the Buyer in writing, the Seller must not take any action in respect of WLOPL, and must procure that WLOPL does not take any action, prior to Completion except as expressly authorised by this agreement or a Transaction Document and must not, and must procure that WLOPL does not:


(i)	issue any shares, options or securities that are convertible into shares in WLOPL;

(ii) buy back any of WLOPL's shares;


(iii)	trade or undertake any activity or enter into any agreement except as agreed by both the Seller and the Buyer (each acting reasonably) or as expressly authorised by this agreement or a Transaction Document; or

(iv) alter the WLOPL Constitution.'


7.	Clause 7 – Completion

Clause 7 of the Agreement is amended by:


(a)	deleting clause 7.3(a) and replacing it with the following:


'(a)	pay to the Seller the Cash Consideration in accordance with clause 4.5;';


(b)	deleting clause 7.5 and replacing it with the following:

"7.5 Interdependence


(a)	The obligations of:

(i) the Buyer and the Seller under this clause 7;


(ii)	Albemarle Lithium and the Seller under clause 5 of the MRL Kemerton ASA; and


(ii)	Albemarle Lithium and the Buyer under clause 4 of the Albemarle Kemerton ASA,

are all interdependent.


(b)	Unless otherwise stated, all actions required to be performed by a party at Completion and completion of the MRL Kemerton ASA and Albemarle Kemerton ASA are taken to have occurred simultaneously at Completion.


(c)	Completion will not occur unless all of the obligations of:



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(i)	the Buyer and the Seller to be performed at Completion under this clause 7;


(ii)	Albemarle Lithium and the Seller under clause 5 of the MRL Kemerton ASA; and


(iii)	Albemarle Lithium and the Buyer under clause 4 of the Albemarle Kemerton ASA,

are complied with and fully effective."; and


(c)	in clause 7.6(b) deleting each reference to '50%' and replacing them with '60%'.


8.	Clause 9 – Conduct after Completion

Clause 9 of the Agreement is amended by:


(a)	deleting clause 9.4(a) and replacing it with the following:


'(a)	The Buyer must, as soon as reasonably practicable, but no more than 30 days after the Completion Date, make an application as required by section 47 of the Petroleum Pipelines Act for:

(i) approval of the dealings evidenced by the JVA; and

(ii) the entry of such dealings into the register maintained under the Petroleum Pipelines Act.'; and


(b)	inserting a new clause 9.6 as follows:

'9.6 Royalties


(a)	The parties acknowledge and agree that the Seller retains, accepts and assumes responsibility for:


(i)	any Royalties payable in connection with Product sold in the period prior to Completion; and


(ii)	without limiting clause 9.6(a)(i), any Royalties payable in connection with Contracted Product,

and the Seller will pay the amount of those Royalties as required by the Mining Act and indemnifies the Buyer from and against all Liabilities arising from or in connection with those Royalties.


(b)	Clause 9.6(a) applies notwithstanding that the amount of such Royalties may be included in the Completion Adjustment in accordance with Schedules 13 and 14.'.


9.	Clause 10.3 - Third Party Agreements

Clause 10.3 of the Agreement is amended by deleting the words '50%' and replacing them with the words '60%'.


10.	Clause 11.2 – Benefit of pre-existing warranties, representations and indemnities

Clause 11.2(b) of the Agreement is amended by deleting each reference to '50%' and replacing them each with '60%'.


11.	Clause 14.11 – Maximum liability

Clause 14.11(a) of the Agreement is amended by deleting the words 'Purchase Price' and replacing them with the words 'Cash Consideration'.



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12.	Clause 26.2 – Particulars for delivery

Clause 26.3 of the Agreement is amended by:


(a)	deleting clause 26.3(a)(ii) and replacing it with the following:

"(v) in the case of the Buyer and the Buyer Guarantor:

Delivery address: 4250 Congress Street, Suite 900, Charlotte, NC 28209

Postal address: 4250 Congress Street, Suite 900, Charlotte, NC 28209

Email: legal_notices@albemarle.com

Attention: General Counsel"; and


(b)	deleting clause 26.3(a)(iv).


13.	Clause 27.2 – Entire Agreement

Clause 27.2 of the Agreement is deleted and replaced with the following:

"27.2 Entire agreement


(a)	Other than the Break Fee Letter, this agreement is the entire agreement between the parties about its subject matter and replaces all previous agreements, understandings, representations and warranties about that subject matter.


(b)	Each party represents and warrants that it has not relied on any representations or warranties about the subject matter of this agreement except as expressly provided in this agreement."


14.	Schedule 1 – Dictionary

Schedule 1 of the Agreement is amended by:


(a)	inserting the following definitions in alphabetical order:

"Albemarle Kemerton ASA has the meaning given in the MRL Kemerton ASA.

Albemarle Lithium means Albemarle Lithium Pty Ltd ACN 618 095 471.

Amendment Date means 1 August 2019.

Break Fee Letter means the letter deed between the Seller Guarantor and the Buyer Guarantor dated on or about the Amendment Date.

Cash Consideration means US$820 million.

FIRB means the Foreign Investment Review Board.

Kemerton Project has the meaning given in the MRL Kemerton ASA.

Kemerton Sale Interest has the meaning given in the MRL Kemerton ASA.

MRL Kemerton ASA means the 'MRL Kemerton ASA' between Albemarle Lithium, the Seller, the Buyer, the Seller Guarantor and the Buyer Guarantor dated on or about the Amendment Date."


(b)	deleting the definition of 'Completion' and replacing it with the following:

"Completion means completion of the sale and purchase of the Sale Interest and the allotment of the Subscription Shares under clause 7.";


(c)	deleting the definition of 'Completion Date' and replacing it with the following:

"Completion Date means the date which is 10 Business Days after the last of the Conditions are satisfied or waived in accordance with clause 2 or such other date as the parties may agree in writing.";


(d)	deleting the definition of 'Conditions Precedent Date' and 'Final Conditions Precedent Date' replacing them in alphabetical order in Schedule 1 with the following:



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"Conditions Precedent Date means 15 December 2019, subject to extension under clause 2.3, or such other date as the parties may agree in writing."

"Final Conditions Precedent Date means 30 June 2020."


(e)	deleting the definition of 'Economic Effective Date' and replacing it with the following:

'Economic Effective Date means 1 April 2019.';


(f)	deleting the definition of 'JVA' and replacing it with the following:

"JVA means the unincorporated joint venture agreement between the Seller, the Buyer and WLOPL in relation to the Project and the Kemerton Project substantially in the form set out in Attachment A.";


(g)	deleting the definition of 'Purchase Price' and replacing it with the following:

'Purchase Price means US$1.3 billion.';


(h)	in the definition of 'Sale Interest', deleting the words '50%' and replacing them with the words '60%'.


(i)	deleting the definition of 'Subscription Amount' and replacing it with the following:

'Subscription Amount means $60.';


(j)	deleting the definition of 'Subscription Shares' and replacing it with the following:

'Subscription Shares means that number of Ordinary Shares equal to 60% of Ordinary Shares on issue at the time of the subscription referred to in clause 3.'; and


(k)	in the definition of 'Transfer Instruments', deleting the words '50%' and replacing them with the words '60%'.


15.	Schedule 2 – Seller Group Warranties

Schedule 2 of the Agreement is amended by:


(a)	in clause 1.4(b)(i), deleting the words '50%' and replacing them with the words '60%';


(b)	in clause 1.4(b)(ii), deleting each reference to '50%' and replacing them with '40%';


(c)	in clause 1.6(a), deleting the words '50%' and replacing them with the words '60%'; and


(d)	in clause 3(a), deleting the words '50%' and replacing them with the words '60%'.


16.	Schedule 12 – Share Subscription Application

Schedule 12 of the Agreement is amended by:


(a)	deleting the words '50 shares' and replacing them with the word '60 shares'; and


(b)	deleting each reference to '$50' and replacing them '$60'.


17.	Schedule 13 – Completion Adjustment

Schedule 13 of the Agreement is amended by deleting clause 1 and replacing it with the following:

'1 Calculation

The Completion Adjustment will be determined as the following calculation, to be made in accordance with the principles set out in this Schedule 13, and provided that the Completion Adjustment cannot be less than negative US$25 million or more than positive US$25 million:

Completion Adjustment = 0.6 x [EBITDA - Inventory]

where



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EBITDA means the sum of all income earned less all expenses incurred by the Seller in respect of the Project during the period between the Economic Effective Date and the Completion Date (and including sales of Contracted Product and statutory Royalties payable on such Product sales); and

Inventory means an amount equal to the sum of:


(a)	the value of all operational spares at Completion minus the value of all operational spares at the Economic Effective Date, in each case to the extent that the operational spares are for use in connection with the Project;


(b)	the value of all Ore and Product on the Stockpile as at the Economic Effective Date (valued at cost); and


(c)	the value of all oil, diesel, greases, lubricants, hydraulic fluids, cleaning products, explosives and all other consumables used in connection with the Project as at the Economic Effective Date (valued at cost).'


18.	Schedule 14 – Completion Adjustment pro-forma

Schedule 14 of the Agreement is amended by:


(a)	deleting the row entitled 'Stock Adjustment' and replacing it with the following:



Stock Adjustment
Stock Adjustment	Excluded	To be consistent with life of mine model. Stock is owned by 40% WLPL and 60% Albemarle	Yes


(b)	deleting the row entitled 'Royalties' and replacing it with the following:



Royalties
Royalties	Statutory royalty return calculation	To include Royalty payable on all Product sales included in the Completion Adjustment (including Contracted Product)	Yes


19.	Schedules 15 to 17 – Kemerton Incomplete Infrastructure Commissioning

The Agreement is amended by inserting new Schedules 15, 16 and 17 as set out in Annexure B to this deed and the parties agree to be bound by Schedules 15, 16 and 17 on and from the Effective Date.



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Annexure B

Schedule 15 - Kemerton Incomplete Infrastructure Commissioning


1.	Definitions and interpretation


1.1	Definitions

In Schedules 15, 16 and 17 capitalised terms have the meaning given in the MRL Kemerton ASA (or, if not defined in the MRL Kemerton ASA, the meaning given in Schedule 1) and:

C5 Commissioning means the date on which performance testing has been completed (in accordance with customary performance testing procedures used in the construction industry for the commissioning of facilities similar to the Trains) to demonstrate that the Train has achieved 100% of nameplate capacity for a single eight-hour shift, as determined by the Buyer (acting reasonably and in good faith) and notified in writing to the Seller.

Commissioned (and or Commissioning or Commission) means with respect to each item of the Kemerton Incomplete Infrastructure, that:


(a)	the relevant item is complete, ready for use, having all necessary approvals (as set out in clause 2.1(c) of this Schedule 15) and not requiring any further construction steps (except for non-essential repairs or rectifications which are not necessary for the start of operations);


(b)	the relevant item has satisfied all applicable performance tests and is ready for use in accordance with all applicable design parameters;


(c)	the relevant item is ready for handover to WLOPL (on behalf of the Buyer and Seller);


(d)	in relation to the Trains:


(i)	the relevant Train (and all equipment and components necessary for the operation of the Train) is commissioned to the point where all equipment is verified in working order and is operational to design parameters with power and water on; and


(ii)	the relevant Train is ready for the initial introduction of process materials and chemicals into the Train.

Construction Costs Adjustment has the meaning given in 2.5(h) of this Schedule 15.

Construction Costs Statement has the meaning given in clause 2.5(b) of this Schedule 15.

Construction Costs Dispute Notice has the meaning given in clause 2.5(e) of this Schedule 15.

Debottlenecking Project has the meaning given in clause 2.1(h)(i) of this Schedule 15.

Forecast Construction Costs has the meaning given in clause 2.5(a) of this Schedule 15.

Inventory means, in relation to Train 1, Train 2 and the Kemerton Shared Assets (as applicable) an amount equal to the sum of:


(a)	the value of all oil, diesel, greases, lubricants, hydraulic fluids, cleaning products and all other consumables used in connection with Train 1, Train 2 or the Kemerton Shared Assets (as applicable) that are not included in the Total Construction Costs (valued at cost); and


(b)	the value of all direct or indirect materials required to produce lithium hydroxide monohydrate, to the extent the direct or indirect materials are for use in connection with Train 1, Train 2 and the Kemerton Shared Assets (as applicable) that are not included in the Total Construction Costs (valued at cost).



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KCCC Handover has the meaning given in clause 2.2(a) of this Schedule 15.

KCCC(SA) Handover has the meaning given in clause 2.2(a) of this Schedule 15.

Kemerton Incomplete Infrastructure means the facilities, installations and assets specified in Schedule 16.

Kemerton Transition has the meaning given in clause 1.1 of Schedule 17.

Total Construction Costs has the meaning given in clause 1.1 of Schedule 17.

Train means Train 1 or Train 2 or both Trains 1 and Train 2 (as applicable).

Train 1 means the proposed processing train (initially with nameplate capacity of 20,000ktpa lithium hydroxide processing capacity, and following completion of the Debottlenecking Project, with expected capacity of 25,000ktpa lithium hydroxide processing capacity) forming part of the Kemerton Project comprised of those components of the Kemerton Transferring infrastructure detailed as forming part of Train 1 in Schedule 16.

Train 2 means the proposed processing train (initially with nameplate capacity of 20,000ktpa lithium hydroxide processing capacity, and following completion of the Debottlenecking Project, with expected capacity of 25,000ktpa lithium hydroxide processing capacity) forming part of the Kemerton Project comprised of those components of the Kemerton Transferring infrastructure detailed as forming part of Train 2 in Schedule 16.


2.	Kemerton Incomplete Infrastructure


2.1	Construction and commissioning by Albemarle Lithium


(a)	Subject to clause 2.2(c) of this Schedule 15, the Buyer must, or must procure that Albemarle Lithium must, at the Buyer's cost construct and successfully Commission, or must procure the construction and successful Commissioning of, all Kemerton Incomplete Infrastructure.


(b)	The Buyer must, or must procure that Albemarle Lithium must, use all reasonable endeavours to complete the construction and successful Commissioning, or to procure the completion of the construction and successful Commissioning, of all Kemerton Incomplete Infrastructure by:


(i)	for Train 1, 18 March 2021;


(ii)	for Train 2, 25 July 2021; and


(iii)	for the Kemerton Shared Assets, as soon as reasonably practicable in order to facilitate commissioning and operation of Train 1 and Train 2 from the relevant KCCC Handover,

or, if not reasonably possible by those dates for Train 1 and Train 2, as soon as reasonably possible after those dates.


(c)	The Buyer must, or must procure that Albemarle Lithium must, at the Buyer's cost, take all steps required to obtain the Kemerton Approvals required for the construction and operation of the Kemerton Incomplete Infrastructure up to the relevant KCCC Handover or KCCC(SA) Handover (as applicable).

(d)

Following KCCC Handover of the relevant Train and KCCC(SA) Handover of the item of the Kemerton Shared Assets, the Buyer must, or must procure that Albemarle Lithium must, at the Buyer's cost continue to support (principally as a technical advisor, using the Albemarle Process Technology group) WLOPL, the Seller and the Buyer's further commissioning of Train 1, Train 2 and the Kemerton Shared Assets through to C5 Commissioning, provided during this period the Buyer's obligation to provide such support at the Buyer's cost does not include any operating expenses for the Kemerton Project (including spodumene concentrate, utilities, consumables and operating labour).


(e)	The parties acknowledge and agree that WLOPL (as agent for the Buyer and the Seller) will be responsible for ensuring that spodumene concentrate meeting the required quality characteristics will be delivered to the Kemerton Project in time for commissioning.



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(f)

To the extent that title to a part of the Kemerton Incomplete Infrastructure has not transferred to the Seller under the MRL Kemerton ASA at completion of the MRL Kemerton ASA then, without limiting clause 2.1(a) of this Schedule 15, from Completion, the Buyer must, or must procure that Albemarle Lithium must, and they are authorised to, construct and Commission (at the Buyer's cost) the Kemerton Incomplete Infrastructure for and on behalf of the Buyer (as to 60%) and the Seller (as to 40%) together (including that title will be held by the Buyer (as to 60%) and the Seller (as to 40%) in such Kemerton Incomplete Infrastructure), and entering into any (and holding any existing) Kemerton Construction Contracts for and on behalf of the Buyer and the Seller (whether as disclosed or undisclosed agent).

(g)

Without limiting any other provision of this clause 2 of Schedule 15, the Buyer must, and must procure Albemarle Lithium must, indemnify and hold harmless the Seller from and against any Claim by a Third Party against the Seller, its Related Bodies Corporate and their Representatives arising from or in connection with the relevant item of the Kemerton Incomplete Infrastructure, including any Kemerton Construction Contracts in respect to the period prior to:


(i)	in respect of a Train, KCCC Handover of the relevant Train; and


(ii)	in respect of the Kemerton Shared Assets, the last KCCC Handover of a Train,

and the conduct of any such Claims will be determined in accordance with clause 10.14(c) of the MRL Kemerton ASA (as though the reference to "Claim" in clause 10.14 was a reference to a Claim contemplated by this clause 2.1(g) of Schedule 15).


(h)	The parties acknowledge and agree that:

(i)

Albemarle Lithium's capital budget for the Kemerton Project includes an allocation of US$25 million (in total for Train 1 and Train 2) for the implementation of a planned debottlenecking for each of Train 1 and Train 2 with the aim of achieving (once Train 1 and Train 2 are fully commissioned after the debottlenecking) an increase from 20,000 ktpa to 25,000 ktpa lithium hydroxide processing capacity per Train (Debottlenecking Project);


(ii)	the estimated costs (of US$25 million) of implementing the Debottlenecking Project are included in the Forecast Construction Costs and the costs of the construction work in relation to the Debottlenecking Project when it occurs will be Total Construction Costs;


(iii)	the Debottlenecking Project will be based on a plan for a debottlenecking project at one of the Buyer Guarantor's Related Bodies Corporate's lithium hydroxide plants in China, which will be carried out before the Debottlenecking Project is implemented at the Kemerton Project, which will enable any learnings from the China debottlenecking project to be leveraged in the Debottlenecking Project;


(iv)	the presently anticipated timing to commence the Debottlenecking Project is estimated to be around August 2021 for Train 1 and Train 2 (after the KCCC Handover of each Train) and it is anticipated it will take approximately 6-12 months per Train to complete;


(v)	a number of variables, including the China debottlenecking project implementation learnings, differences in the characteristics (including the impurity profiles) of the Greenbushes Concentrate and the Product and the suitability of Concentrate to the Kemerton Project, could impact the timing of implementation and the incremental capacity increase associated with the Debottlenecking Project;

(vi)

the Debottlenecking Project is not expected to be undertaken prior to the Trains being Commissioned under this clause 2 of Schedule 15, and that the Buyer will, or will procure that Albemarle Lithium will, undertake the Debottlenecking Project as soon as reasonably practicable following the KCCC Handover for each Train (and taking account of the progress with the debottlenecking at the China plant referred to in clause 2.1(h)(iii)) at the Buyer's cost and under Buyer's control on the same basis as the obligation to initially construct and Commission the Trains. The Buyer and the Seller will procure WLOPL to take all steps required to ensure



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the Buyer (or Albemarle Lithium, as applicable) is able to undertake the Debottlenecking Project in accordance with this Schedule 15; and

(vii)

the undertaking of the Debottlenecking Project may impact operations at the Kemerton Plant and neither the Buyer nor Albemarle Lithium will have any Liability (including, without limiting clause 14.5, for Consequential Loss) to WLOPL or WLPL for or in connection with any interruptions to the operation of Train 1 or Train 2 or the Kemerton Project more broadly during or as a consequence of the implementation of the Debottlenecking Project.


(i)	The parties acknowledge and agree that:


(i)	the design for the Kemerton Project (including Train 1 and Train 2) is based on the use of Greenbushes Concentrate in Train 1 and Train 2, including the spodumene concentrate having a lithium content of 6%;


(ii)	the Buyer and the Seller will, from the Amendment Date, work together (subject to and in compliance with any competition and anti-trust laws) to complete appropriate technical pilot work to ensure that Train 1 and Train 2 are prepared for the use of Product in the Trains; and

(iii)

as part of commissioning following KCCC Handover of each Train, it is expected that the Buyer and the Seller will need to undertake optimisation of the Trains for use of Product (even where the recorded characteristics of the Product are not materially different to the Greenbushes Concentrate) to account for differences between the Product and Greenbushes Concentrate (including for example their respective impurity profiles).


2.2	KCCC Handover

(a)

On completion of construction and successful Commissioning of Train 1 and Train 2, and the Kemerton Shared Assets, the Buyer must, or must procure that Albemarle Lithium must, hand over care, custody and control of (in relation to the Trains) the relevant Train of the Kemerton Incomplete Infrastructure to WLOPL (KCCC Handover), and in relation to each item of the Kemerton Shared Assets of Kemerton Incomplete Infrastructure to WLOPL (KCCC(SA) Handover). The parties acknowledge that, under the Plant Services Agreement, Albemarle Lithium will continue to have care, custody and control of the Kemerton Incomplete Infrastructure and area of the Kemerton Lease following the relevant KCCC Handover and KCCC(SA) Handover for and on behalf of WLOPL.


(b)	At the later of Completion or the date of KCCC Handover for Train 1 and Train 2 and the KCCC(SA) Handover for the Kemerton Shared Assets (as applicable):

(i)

to the extent that title in any part of Train 1 or Train 2 or the Kemerton Shared Assets (as the case may be) has not already transferred to the Seller (or is not otherwise already owned by the Seller) under the MRL Kemerton ASA or otherwise (including under clause 2.1(f) of this Schedule 15), the Buyer must, or must procure that Albemarle Lithium must, transfer title to the relevant Train or the Kemerton Shared Assets (as applicable) to the Seller (and the Seller must take that title) in proportion to the Kemerton Sale Interest; and


(ii)	the Seller and the Buyer will procure that WLOPL undertakes the further commissioning (including introduction of chemicals to the Train(s)) to complete final commissioning and operational ramp up of the relevant Train or the Kemerton Shared Assets (as applicable).

(c)

Without limiting clause 2.1(a), in respect of each item of Kemerton Incomplete Infrastructure (including to satisfy clause 2.2(d)), the Buyer is, or must procure that Albemarle Lithium is, solely responsible for rectifying or procuring the rectification of any defects (including omissions) in the construction and supply of goods, materials and equipment incorporated within the Kemerton Incomplete Infrastructure that exist or become apparent prior to the later of Completion and the date of KCCC Handover or KCCC(SA) Handover (as applicable) of the Kemerton Incomplete Infrastructure.


(d)	In order to be considered to have been constructed and successfully Commissioned, each item of Kemerton Incomplete Infrastructure must meet the requirements and pass



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the commissioning tests described in the definition of 'Commissioned' to the extent applicable to that item of Kemerton Incomplete Infrastructure.


(e)	Following the KCCC Handover of each Train, Seller must reimburse the Buyer for 40% of the cost of the Inventory related to the Train (determined as of the KCCC Handover date), which must be paid within 10 Business Days following invoicing by the Buyer to the Seller.


(f)	Following the last KCCC Handover, Seller must reimburse the Buyer for 40% of the cost of the Inventory related to the Kemerton Shared Assets, determined as of that KCCC Handover date, plus the value of any Inventory consumed between the first KCCC Handover the last KCCC Handover, which must be paid within 10 Business Days following invoicing by the Buyer to the Seller.


2.3	Warranties from suppliers and manufacturers

(a)

Without limiting clause 2.1(e) of this Schedule 15, on or about the relevant date of the KCCC Handover for Train 1 and Train 2 and (as applicable), the Buyer must, or must procure that Albemarle Lithium must, assign or use all reasonable endeavours to procure the assignment of the benefit of all guarantees, representations, warranties and indemnities given in favour of Albemarle Lithium or its Related Bodies Corporate (or which Albemarle Lithium or its Related Bodies Corporate have a right to assignment of) and which are capable of assignment in respect of the relevant Train from those subcontractors, manufacturers and suppliers which provide plant, equipment and materials incorporated into the relevant Train (Kemerton Subcontractors) (including, if applicable, where such warranties continue to operate beyond the expiration of any applicable defects liability period), to WLOPL which guarantees, representations, warranties and indemnities may, at the direction of the Seller be, held on trust by WLOPL for the Seller and the Buyer (or to the extent not able to be assigned or transferred to WLOPL, held on trust by Albemarle Lithium or its Related Bodies Corporate). The Buyer and the Seller agree to review the guarantees, representations, warranties and indemnities and agree prior to Completion which such guarantees, representations, warranties and indemnities need not be assigned and rather will be held for or on behalf of WLOPL (as if not able to be assigned for the purposes of paragraph (c) below taking account of the materiality and number of contracts). For the avoidance of doubt, where the parties have not agreed that a particular guarantee, representation, warranty or indemnity need not be assigned to WLOPL, the Buyer must continue to, or must procure that Albemarle Lithium continues to, use all reasonable endeavours to procure the assignment of the benefit of such guarantees, representations, warranties and indemnities to WLOPL.

(b)

The Buyer must, or must procure that Albemarle Lithium must, use all reasonable endeavours to procure that the agreements entered into with Kemerton Subcontractors after the Amendment Date allow for all guarantees, representations, warranties and indemnities (including guarantees, representations, warranties and indemnities given by the Kemerton Subcontractors' contractors) to be directly enforced by the Seller, the Buyer and/or WLOPL against the parties giving the warranties.

(c)

For any guarantees, representations, warranties and indemnities not able to be assigned or transferred to WLOPL under clause 2.3(a) of this Schedule 15, the Buyer must, or must procure that Albemarle Lithium or its Related Bodies Corporate (as applicable) must, for and on behalf of WLOPL, pursue and seek to enforce its rights against under those guarantees, representations, warranties and indemnities in good faith and acting reasonably (and taking account of the Seller's and WLOPL's interest under this clause 2 of Schedule 15).


2.4	Seller assistance

On and from the Amendment Date, the Seller and the Buyer will (and the Buyer must procure that Albemarle Lithium will) liaise with each other to explore opportunities for the Seller (or its Related Bodies Corporate) to assist with the construction and successful Commissioning of the Kemerton Incomplete Infrastructure (including to reduce the costs of such construction and successful Commissioning of the Kemerton Incomplete Infrastructure).



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2.5	Balancing payment for construction costs


(a)	The parties acknowledge and agree that the anticipated Total Construction Cost is US$1.2 billion (Forecast Construction Costs).


(b)	The Buyer must, or must procure that Albemarle Lithium must, within 40 Business Days of the later to occur of:


(i)	the last KCCC Handover


(ii)	the last KCCC(SA) Handover; and


(iii)	the last C5 Commissioning,

provide the Seller with a written statement containing the Total Construction Costs and, if applicable, giving the Buyer's calculation of the final amount of the Construction Costs Adjustment (Construction Costs Statement).


(c)	The Construction Costs Statement must be prepared honestly and in good faith, and the Total Construction Costs and Construction Costs Adjustment (if applicable) calculated, in accordance with Schedule 17.

(d)

The Buyer must, or must procure that Albemarle Lithium must, provide the Seller with such information and documents as are reasonably requested by the Seller to support the Construction Costs Statement and the Seller has the right (at the Seller's cost) to request an audit be performed by an internationally recognised and qualified auditor registered in accordance with Part 9.2 of the Corporations Act in which such auditor reports to the Seller and the Buyer that it has examined the Construction Costs Statement (and, subject to the auditor agreeing to a confidentiality agreement with the Buyer and Albemarle Lithium, any supporting information and documents provided to the Seller under this clause 2.5(d) of this Schedule 15 or otherwise reasonably requested by the auditor) and is reasonably satisfied as to its accuracy or, if the auditor is not so satisfied, the reasons why the auditor is not so satisfied.

(e)

The Seller may, within 30 Business Day after receipt of the Construction Costs Statement or where an auditor has been appointed by the Seller under clause 2.5(d) of this Schedule 15 then within 60 Business Day after receipt of the Construction Costs Statement, issue a notice (Construction Costs Dispute Notice) to the Buyer that it disagrees with the amount of the Total Construction Costs set out in the Construction Costs Statement.


(f)	If the Seller does not issue a Construction Costs Dispute Notice with the period set out in clause 2.5(e) of this Schedule 15, then the Construction Costs Statement (and the Total Construction Costs nominated in it) shall become final and binding.


(g)	If the Seller issues a Construction Costs Dispute Notice with the period set out in clause 2.5(e) of this Schedule 15:


(i)	the Seller and the Buyer must use all reasonable endeavours to seek to agree on the amount of the Total Construction Costs; and


(ii)	clause 8.3 will apply, with each reference to:


(A)	Completion Adjustment read as Total Construction Costs;


(B)	Completion Adjustment Dispute Notice read as Construction Costs Dispute Notice; and


(C)	Completion Statement read as Construction Costs Statement.


(h)	If the Total Construction Costs are:


(i)	less than the Forecast Construction Costs, then the Seller will be entitled to 40% of the difference between the Total Construction Costs and the Forecast Construction Costs (Construction Costs Adjustment); or


(ii)	more than the Forecast Construction Costs, then, without limiting this clause 2 of Schedule 15, the Buyer will be solely responsible for the costs in excess of the Forecast Construction Costs (and the Seller will not be entitled to any payment in respect of the Total Construction Costs under this agreement).



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(i)	Payment of any Construction Costs Adjustment must be made within 10 Business Days after the Construction Costs Statement is final and binding or otherwise following agreement or determination of the Total Construction Costs under clause 2.5(g) of this Schedule 15.

(j)

The Buyer and the Seller agree that to the extent the Total Construction Costs in the finally determined Construction Costs Statement includes any provision or prospective amount that has not been finally determined, the Buyer must promptly notify the Seller on such amount being finally determined and the Buyer and the Seller agree to promptly calculate and make any adjusting payment as required as if the finally determined amount had been included in the Construction Costs Statement (and which may include a refund of any amount paid as the Construction Costs Adjustment by the Buyer to the Seller where the amount finally determined exceeds the provision or prospective amount or a payment or additional payment as the Construction Costs Adjustment to the Seller by the Buyer where the provision or prospective amount exceeded the amount finally determined).


(k)	Any Construction Costs Adjustment received by the Seller after Completion will be treated as an increase in the Purchase Price and any refund of such Construction Costs Adjustment will be treated as a decrease in the Purchase Price.


3.	Insurance for Kemerton Incomplete Infrastructure


3.1	Insurance


(a)	In this clause 3 of Schedule 15, Insurances means all the insurance policies taken out in respect of the Kemerton Incomplete Infrastructure by the Buyer (or Albemarle Lithium or any of their Related Bodies Corporate) prior to the Completion Date.


(b)	The parties acknowledge and agree that the principles with respect to Insurances for the Kemerton Incomplete Infrastructure are that:


(i)	the Buyer will (or will procure Albemarle Lithium will) undertake the construction and Commissioning contemplated by clause 2 of this Schedule 15 and in doing so will continue to hold and maintain the Insurances in respect of that construction and Commissioning until the KCCC Handover or KCCC(SA) Handover (as applicable) of each relevant item of Kemerton Incomplete Infrastructure;

(ii)

to the extent that the proceeds of Insurance relating to the Kemerton Incomplete Infrastructure are received by the parties (including Albemarle Lithium) in relation to the period prior to the KCCC Handover or KCCC(SA) Handover (as applicable) of each relevant item of Kemerton Incomplete Infrastructure, the Buyer (and Albemarle Lithium) will be entitled to the proceeds and the Buyer will (or will procure Albemarle Lithium will) apply those proceeds to the reinstatement and make good of the Kemerton Incomplete Infrastructure (or the reimbursement for reinstatement or make-good);


(iii)	nothing in this clause 3 of Schedule 15 is intended to limit the indemnity in favour of the Seller under clause 2.1(g) of Schedule 15; and

(iv)

to the extent the Buyer, the Seller or Albemarle Lithium receives any proceeds of Insurance (including in relation to an item of Kemerton Incomplete Infrastructure) and the Buyer or Albemarle Lithium did not incur any costs or liability related to those proceeds (including under the indemnity in clause 2.1(g) of Schedule 15 or costs in reinstating the relevant item of Kemerton Incomplete Infrastructure), the Seller and the Buyer will be entitled to the benefit of those proceeds in proportion to their interest in the JVA.

(c)

The Buyer must (or must procure Albemarle Lithium or its Related Bodies Corporate other than WLOPL) must) procure and maintain in force (or procure and maintain as appropriate) the Insurances (in all material respects on the same terms and similar level of cover prevailing at the Completion Date) from the Completion Date until the KCCC Handover or KCCC(SA) Handover (as applicable) of each relevant item of Kemerton Incomplete Infrastructure, save that Albemarle Lithium or its Related Bodies Corporate may amend the Insurances maintained for the benefit of Albemarle Lithium if such



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amended policies are substantially the same as those generally applicable to the Albemarle Group as a whole in relation to similar circumstances (provided reasonable prior notice to any such change is given to the Seller).


(d)	The parties acknowledge that from Completion, to the extent not covered by the Insurances, the Buyer and the Seller will, or will procure WLOPL will be responsible for arranging insurance coverage for their respective rights and interests in the Joint Venture and Joint Venture Assets (including as contemplated by this Schedule 15).


3.2	Making of claims

The Buyer must, or must procure Albemarle Lithium must, use all reasonable endeavours to make (or procure that its Related Bodies Corporate make) all claims under the Insurances in respect of losses or liabilities covered by such policies arising in the period after the Completion Date and until KCCC Handover or KCCC(SA) Handover (as applicable) of each relevant item of Kemerton Incomplete Infrastructure, at the cost of Albemarle Lithium, promptly and in accordance with the requirements of the relevant policy.


3.3	Proceeds of insurance – pre-handover

(a)

To the extent that Albemarle Lithium (or its Related Bodies Corporate) receives the proceeds of any claim under the Insurances that relate to the period after Completion and prior to the KCCC Handover or KCCC(SA) Handover (as applicable) of each relevant item of Kemerton Incomplete Infrastructure (and to the extent the Seller and the Buyer receive any such proceeds, they must be promptly paid to Albemarle Lithium), the Buyer must, or must procure Albemarle Lithium must, use all reasonable endeavours to apply (or procure that the Related Body Corporate applies) the proceeds to, as appropriate:


(i)	repair the damage or otherwise replace or reinstate the property;


(ii)	extinguish or reduce the relevant first party loss; or


(iii)	discharge the relevant liability,

(and to reimburse Albemarle Lithium to the extent it had met those costs and liabilities) and to the extend not so applied, the remaining proceeds will be for the benefit of Albemarle Lithium.


(b)	At Albemarle Lithium's cost, the Seller and the Buyer shall co-operate fully with Albemarle Lithium in respect of any claim under the Insurances, including giving all assistance requested by Albemarle Lithium (including the provision of information and the execution of documents and the assignment of the benefit of any such claim).

(c)

Without limiting clause 3.3(a) of this Schedule 15, if Albemarle Lithium incurs costs in relation to the construction and Commissioning contemplated by clause 2 of this Schedule 15 of the Kemerton Incomplete Infrastructure including in reinstating or replacing an item of Kemerton Incomplete Infrastructure damaged or destroyed prior to the KCCC Handover or KCCC(SA) Handover (as applicable), the Seller and the Buyer will ensure that Albemarle Lithium may (at its cost, including the amount of any deductible) make and pursue such insurance claim in the name of Albemarle Lithium, the Seller and the Buyer (as applicable) and Albemarle Lithium shall be entitled to benefit from the proceeds of any insurance claim for those costs.


3.4	Proceeds of insurance – post-handover

To the extent that Albemarle Lithium (or its Related Bodies Corporate (other than WLOPL)) receives the proceeds of any claim under the Insurances that relate to the period after the KCCC Handover or KCCC(SA) Handover (as applicable) of each relevant item of Kemerton Incomplete Infrastructure, the Buyer must, or must procure Albemarle Lithium must, use all reasonable endeavours to apply (or procure that such Related Body Corporate applies) the proceeds to, as appropriate:


(a)	repair the damage or otherwise replace or reinstate the property;


(b)	extinguish or reduce the relevant first party loss; or



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(c)	discharge the relevant liability,

(and to reimburse Albemarle Lithium to the extent it had met those costs and liabilities) and to the extend not so applied, the remaining proceeds, less Albemarle Lithium’s reasonable costs in pursuing the relevant claim and any costs or liabilities incurred by the Buyer or Albemarle Lithium in relation to the indemnity in clause 2.1(g) of this Schedule 15, will be for the benefit of the Seller and the Buyer together in accordance with their respective rights and interests and will, if received by Albemarle Lithium (or its Related Bodies Corporate), be paid to the Seller (in proportion to the Kemerton Sale Interest) and Buyer (in proportion to the Albemarle Kemerton Interest).


4.	Amendments to Transaction Documents

The Buyer and the Seller will make such amendments as are reasonably necessary to the Transaction Documents to take into account the change of ownership percentages in the Project (from 50% for each of the Buyer and the Seller to 60% for the Buyer and 40% for the Seller) and the transfer of the Kemerton Sale Interest to the Seller and the Albemarle Sale Interest to the Buyer, including that:


(a)	the intellectual property agreement described in paragraph (i) of the definition of Transaction Documents will apply to the Kemerton Project and the Project;


(b)	the logistics contract described in paragraph (g) of the definition of Transaction Documents will only apply to the transport of Product from the Wodgina Lithium mine site to customers and will not apply to:


(i)	any internal logistics (including the transport of any other product from the Wodgina Lithium mine site to the Kemerton Project), which the Buyer and the Seller agree will separately be arranged by WLOPL); or


(ii)	the transport of any other product from the Kemerton Project to customers;


(c)	the marketing agreement described in paragraph (g) of the definition of Transaction Documents will apply to both Product and any other product produced under the JVA (including lithium hydroxide monohydrate from the Kemerton Project, whether produced from Product or another product);


(d)	the interim marketing agreement dated 18 April 2019 (IMA) between the Seller and Albemarle U.S., Inc. will be:


(i)	amended to remove the obligation on the Seller to pay the ‘Marketing Fee’ (as defined in clause 5(b) of the IMA) for any month in which there are no sales of ‘Product’ (as defined in the IMA); and


(ii)	extended to apply for the period until the earlier of Completion or termination of this agreement;


(e)	the JVA will be amended to reflect the principles set out in Schedule 18 including, if considered necessary, to:


(i)	amend the Deed of Cross Security attached to the JVA; and


(ii)	require that the Buyer and Seller (as Participants under the JVA) provide a mortgage over the Kemerton Lease or the Kemerton Sublease (as the case requires) (Mortgage) in registrable form together with all things (including consents, documents, evidence of payment of Taxes or registration fees) necessary to register the Mortgage in the relevant jurisdiction; and


(f)	the WLOPL Shareholders Agreement will be amended to change the initial shareholdings in WLOPL to 60 shares for the Buyer and 40 shares for the Seller.



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Schedule 17 – Construction Costs Statement


1.	Total Construction Costs


1.1	Definitions

Kemerton Upscaling Costs means any costs, expenses and liabilities incurred or suffered by the Buyer or Albemarle Lithium or any Related Body Corporate of either of them, in relation to acquisition, design, procurement, construction or Commissioning of the Kemerton Incomplete Infrastructure to the extent that those costs exceed the costs which would have been incurred to acquire, design, procure, construct or commission the Kemerton Incomplete Infrastructure with a capacity limited only to that required for the operation of two trains, being Train 1 and Train 2, except for:


(a)	any costs, expenses and liabilities incurred or suffered by Buyer or Albemarle Lithium or any Related Body Corporate of either of them in relation to the land preparations for the Kemerton Lease and Kemerton Easement area (including any clearing and earthworks undertaken) as at the Amendment Date;


(b)	any costs, expenses or liabilities incurred or suffered by Buyer or Albemarle Lithium or any Related Body Corporate of either of them in relation to the Kemerton Transition,

(and the costs, expenses and liabilities referred to each of (a) and (b)above, are, for the avoidance of doubt, included in the Total Construction Costs).

Kemerton Transition means the scaling down ('descoping') of the acquisition, design, procurement, construction on the Kemerton Lease from three lithium hydroxide processing trains to only Train 1 and Train 2, including to the Kemerton Shared Assets.

Total Construction Costs means the total costs, expenses and liabilities incurred or suffered (including prior to the date of this agreement) by the Buyer or Albemarle Lithium or any Related Body Corporate of either of them, in relation to:


(a)	the acquisition, design, procurement, construction and successful commissioning (including for Commissioning and C5 Commissioning) of the Kemerton Incomplete Infrastructure;


(b)	the Debottlenecking Project (including, where not yet completed, a provision of US$25 million);


(c)	the Kemerton Lease (including amounts payable under the Kemerton Lease);


(d)	the Kemerton Transition;


(e)	the Kemerton Approvals;


(f)	the Kemerton Contracts and Kemerton Construction Contracts;


(g)	the Kemerton Easement; and


(h)	the provision of support in the further commissioning in accordance with clause 2.1(d) of Schedule 15,

and includes (without limitation):


(i)	the costs, expenses and liabilities of acquisition, design, procurement, construction and Commissioning of the power station /transformers/substation for the Kemerton Project;


(j)	land preparations (including clearing and earthworks) on or in relation to the Kemerton Lease and Kemerton Easement area;


(k)	the amount of claims and variations made by any contractor or third party, including as a result of the Kemerton Transition and legal costs and settlements, contract termination and variation payments;


(l)	provisions and prospective amounts (including for amounts not yet incurred or suffered or finally determined), including for example relating to prospective variation claims or contractor or principal claims for which the amount has not yet been finally determined



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(including where the variation claims may be prospective), and in such case, the amount the Buyer reasonably determines as such amount will be finally determined;


(m)	costs of rectification of defects (including as referred to in clause 2 of Schedule 15);


(n)	contractor fee adjustments and any bonuses and incentive compensation;


(o)	project insurances; and


(p)	project overhead costs and external project costs (including, accommodation, mobilisation and demobilisation and site office running expenses),

calculated in accordance with this Schedule 17, but excluding the Kemerton Upscaling Costs.


1.2	Specific principles, policies and procedures

The following specific principles, policies and procedures will apply to the preparation of the Construction Costs Statement, used to determine the Total Construction Costs and the Construction Costs Adjustment:


(a)	where the Seller has paid for any item of Inventory under clauses 2.2(e) or (f), the amount of such item of Inventory shall not be included in the Total Construction Costs;


(b)	no item shall be included more than once;


(c)	no item shall be included or excluded solely on the grounds of materiality;


(d)	all amounts in a currency other than US dollars are to be converted to US dollars:


(i)	where the amount has already been incurred, at the rate used by the Buyer on the date the amount was incurred, in accordance with Albemarle's foreign exchange practices; otherwise


(ii)	at the closing Reserve Bank of Australia rate on the date of the last to occur of the last of the KCCC Handover, KCCC(SA) Handover or C5 Commissioning of any of the Kemerton Incomplete Infrastructure, or as otherwise agreed between the parties.


2.	Construction Costs Adjustment calculation

If applicable, the Construction Costs Adjustment will be determined as the following calculation:

Construction Costs Adjustment = 0.4 x [Forecast Construction Costs – Total Construction Costs]



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Schedule 18 – Amendments to JVA



Clause	Principle for amendment
Clause 2.1	• Amend initial Joint Venture Interests to account for WLPL holding 40% and AWPL holding 60%.
Clause 2.2	• Amend clause 2.2(b) to account for the “Initial Refinery Plant” (being the Kemerton Incomplete Infrastructure) already being under construction / constructed. • Amend to clarify that the operation of the Kemerton Incomplete Infrastructure is a Joint Venture activity. • Amend to allow use of the Kemerton Incomplete Infrastructure to process non-Wodgina spodumene (subject to special resolution).
Clause 2.5	• Amend to account for transfer of Kemerton Incomplete Infrastructure into the JVA.
Clause 2.8(d)	• Amend clause 2.8(d) to recognise use of Refinery Plant (to extent there is one) for spodumene and, as agreed otherwise, including to accommodate potential spodumene swap arrangements.
Clause 2.8(e)	• Remove clause 2.8(e).
Clause 2.13	• Amend to include the Kemerton Sublease and Access Licence.
Clause 2.14	• Amend to include the Kemerton Sublease.
Clause 3.1	• Amend to allow for the continued operation of the Refinery Plant after the depletion of economically recoverable reserves from the Mine. • Amend JVA to allow the JV to continue for the purpose of processing non-Wodgina spodumene.
Clause 3.2	• Amend to allow for termination of mining operations but continued operation of the Refinery Plant.
Clause 4.3	• Amend to provide for a new regime relating to a material default by WLOPL (while under majority ownership by AWPL) which will: o require notice to be given by WLPL or AWPL requiring the default to remedied; o allow WLOPL a reasonable period to propose a remediation plan and if possible, remedy the breach; o result in the Joint Venture Operations being suspended until the first to occur of: ¤ WLPL and AWPL are reasonably satisfied with a remediation plan proposed by WLOPL; ¤ WLPL and AWPL are reasonably satisfied that WLOPL will not commit the breach again; ¤ the breach is remedied; or ¤ a replacement manager appointed; and o allow WLPL to nominate a replacement operations manager to oversee the activities of WLOPL until the first to occur of: ¤ WLPL and AWPL are reasonably satisfied with a remediation plan proposed by WLOPL; ¤ WLPL and AWPL are reasonably satisfied that WLOPL will not commit the breach again; or ¤ the breach is remedied.
Clause 5.1(b)(iv)	• Amend to include the Kemerton Sublease and Access Licence.



Amendment Deed to Asset Sale and Share Subscription Agreement MinterEllison \| Ref: SFS 1225164	Page 35



Clause 5.1(b)(xii)(A)	• Amend monetary limits for disposal of Project Facilities to provide that only items with a book value of more than $250,000 but less than $500,000 require ordinary resolution (except where the disposal has been approved in a Business Plan).
Clause 5.1(b)(xii)(B)	• Amend monetary limits for disposal of Project Facilities to provide that only items with a book value of more than $500,000 require special resolution (except where the disposal has been approved in a Business Plan).
Clause 5.8(b)	• Amend to include reference to the Mining Services Agreement and Plant Services Agreement being entered into by the parties.
Clause 5.9(d)(ii)	• Amend monetary limits for entry into contracts with third parties to provide that contracts: o that have not been approved in a Business Plan and have a value of more than $1 million and not greater than $20 million, require ordinary resolution; o have been approved in a Business Plan but the value of the contract exceeds $5 million and not greater than $20 million, require ordinary resolution; o have been approved in a Business Plan but the value of the contract exceeds $20 million, require special resolution. • For the avoidance of doubt, the above obligation will not apply to the "Kemerton Construction Contracts".
Clause 5.9(d)(iii)	• Amend monetary limits for entry into multi-year contracts with third parties to provide that contracts: o that have not been approved in a Business Plan and have a value of more than $1 million annualised; or o have been approved in a Business Plan but the value of the contract exceeds $10 million annualised, require special resolution. • For the avoidance of doubt, the above obligation will not apply to the "Kemerton Construction Contracts".
New clause 5.13	• Provided, in both of AWPL and WLPL's opinion (each acting reasonably), it is in the best economic interests of each of WLPL and AWPL and the Joint Venture and provided WLPL or its Related Bodies Corporate (as applicable) meet the Manager's supplier qualification requirements, the Manager must use reasonable endeavours to engage or otherwise utilise WLPL’s (or its Related Bodies Corporate) plant, equipment and personnel at the Project Facilities, which WLPL must (or must procure that its Related Bodies Corporate) provide such plant, equipment and personnel at cost and otherwise on terms to be agreed. Nothing in this clause constitutes a right of first refusal for WLPL (or its Related Bodies Corporate) or requires the Manager to offer or negotiate exclusively with WLPL or its Related Bodies Corporate. • For the "Kemerton Incomplete Infrastructure", the above obligation will only apply after the last KCCC Handover or KCCC(SA) Handover (as applicable).
Clause 6.1(b)	• Amend to include the words “(as set out in clause 2.2)” after the words “scope of the Joint Venture” in clause 6.1(b).
Clause 6.6(c)	• Amend to provide that AWPL will appoint the initial chairperson.
Clause 6.7(a), (b) and (f)	• Amend to make clear that if a party holds a majority interest, they appoint both the CEO and CFO of WLOPL.
Clause 6.7(c)	• Amend to remove obligation to pay the CEO and CFO equal amounts.
Clause 6.11	• Amend to remove clause 6.11.
Clause 6.12	• Amend to account for Initial Refinery Plant (being the Kemerton Incomplete Infrastructure) already being constructed and to remove procedure for a decision to construct an Initial Refinery Plant. • Remove clauses 6.12(b) to (q), and make other necessary amendments to remove concept of a 'Stage 2 Decision'.
Clause 8.6(e)	• Amend to provide that the opening of a bank account by the Manager only requires ordinary resolution.



Amendment Deed to Asset Sale and Share Subscription Agreement MinterEllison \| Ref: SFS 1225164	Page 36



Schedule 1 – Definitions	• Amend definition of 'Joint Venture Area' to include reference to the Kemerton Incomplete Infrastructure and Kemerton Sublease. • Amend definitions of 'Initial Refinery Plant' and 'Refinery Plant' to account for the plant being the Kemerton Incomplete Infrastructure. • Amend definition of 'Refinery Plant Business Plan' to recognise that the Refinery Plant will already be constructed. • Amend definition of 'Joint Venture Assets' to reference all assets being transferred by Albemarle under the MRL Kemerton ASA including the Kemerton Sublease and Access Licence. • Amend definition of 'Project Facilities’ to reference the facilities described in the MRL Kemerton ASA. • Amend definition of 'Approvals’ to reference that the Kemerton Approvals described in the MRL Kemerton ASA, will become 'Approvals' under the JVA once transferred to the AWPL and WLPL as contemplated by the MRL Kemerton ASA. • Amend definition of 'Third Party Agreements’ to reference that any Kemerton Contracts under the MRL Kemerton ASA, will become 'Third Party Agreements' under the JVA once transferred to the AWPL and WLPL as contemplated by the MRL Kemerton ASA. • Amend definition of 'Product’ to include non-Wodgina concentrate and Lithium Hydroxide.
Schedule 3	• Remove paragraphs (d), (e), (h) and (i) as matters requiring special resolution (and will require only ordinary resolution). • Amend to include the following matters as requiring special resolution: o the processing of non-Wodgina spodumene in the Refinery Plant; and o the terms of any tolling arrangements to apply in respect of the tolling of non-Wodgina spodumene in the Refinery Plant. • Amend paragraph (l) to: o refer to agency proceedings; o change references from 'total claim amount' to 'total amount in controversy (exclusive of interest, costs, and attorneys’ fees)'; and o increase the monetary limit to $1 million.



Amendment Deed to Asset Sale and Share Subscription Agreement MinterEllison \| Ref: SFS 1225164	Page 37

Exhibit 10.3




		MRL Kemerton Asset Sale Agreement


		Wodgina Lithium Pty Ltd (WLPL) Mineral Resources Limited (MRL) Albemarle Wodgina Pty Ltd (AWPL) Albemarle Corporation (Albemarle Corporation) Albemarle Lithium Pty Ltd (Albemarle Lithium)



	Level 22 Waterfront Place 1 Eagle Street Brisbane Qld 4000 Australia DX 102 Brisbane T +61 7 3119 6000 F +61 7 3119 1000 minterellison.com

MRL Kemerton Asset Sale Agreement


Details	6


Agreed terms	7


1.	Defined terms and interpretation 7


1.1	Definitions 7


1.2	Interpretation 7


2.	Conditions to Completion 7


2.1	Conditions precedent 7


2.2	Satisfaction of the Conditions 8


2.3	Waiver 8


2.4	Notice 8


2.5	Termination 8


3.	Sale and purchase of Kemerton Sale Interest 9


3.1	Sale and purchase 9


3.2	Kemerton Consideration 10


3.3	Payments to reduce Kemerton Consideration 10


3.4	Method of making payments 10


4.	Interim Period 10


4.1	Consent to Kemerton Sublease 10


4.2	Information and access 13


4.3	General Conduct – Kemerton Sale Interest and Kemerton Project 14


4.4	Compliance with clause 4 and Permitted Acts 15


4.5	Kemerton Transaction Documents 15


4.6	Swap arrangement for Greenbushes Concentrate and Product 18


4.7	Acquisition or development of non-Australian processing assets 18


4.8	Tax Notice 18


5.	Completion 18


5.1	Date and place for Completion 18


5.2	Obligations of Albemarle Lithium at Completion 18


5.3	WLPL's obligations at Completion 19


5.4	Security Interest 19


5.5	Interdependence 19


5.6	Completion of Albemarle Kemerton ASA 19


5.7	Effect of Completion – title and risk 19


6.	Conduct after Completion 20


6.1	Duty 20


6.2	Registration 20


6.3	Kemerton Approvals 20


7.	Kemerton Contracts 20


8.	Liabilities 20


8.1	Acknowledgment 20


8.2	Retained Liabilities 21


8.3	Indemnity by Albemarle Lithium in respect of Retained Liability 21


9.	Insurance 21

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 2


9.1	Kemerton Insurance 21


9.2	Making of claims 22


9.3	Provision of information relevant to future insurances 22


10.	Albemarle Group Warranties and limitations of Claims 22


10.1	Definition 22


10.2	Giving of Albemarle Group Warranties 22


10.3	Matters disclosed 23


10.4	No liability 23


10.5	Consequential Loss 24


10.6	Tax or other benefit 24


10.7	Disclaimer 24


10.8	Exclusion of warranties and statutory actions 25


10.9	Notice and time limits on Claims 25


10.10	Minimum amount of Claims 26


10.11	Maximum liability 26


10.12	No double recovery 26


10.13	Disclosure regarding Third Party Claims 26


10.14	Conduct in respect of Third Party Claims 26


10.15	Recovery 27


10.16	Insured Claim or loss 27


10.17	Duty to mitigate 27


10.18	Independent limitations 28


10.19	Damages only remedy 28


10.20	No knowledge of breach 28


11.	WLPL Warranties 28


11.1	WLPL Warranties 28


11.2	Reliance 28


11.3	Independent WLPL Warranties 28


11.4	Survival 29


12.	MRL Warranties 29


12.1	MRL Warranties 29


12.2	Reliance 29


12.3	Independent MRL Warranties 29


12.4	Survival 29


12.5	Indemnity 29


13.	Albemarle Corporation Warranties 29


13.1	Albemarle Corporation Warranties 29


13.2	Reliance 30


13.3	Independent Albemarle Corporation Warranties 30


13.4	Survival 30


13.5	Indemnity 30


14.	Confidentiality 30


14.1	Confidentiality obligation 30


14.2	Exceptions 30


14.3	Information Recipient's obligations 31


14.4	Media announcement 31


15.	WLPL Guarantee and indemnity 31

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 3


15.1	Consideration 31


15.2	WLPL Guarantee 31


15.3	Indemnity 32


15.4	Extent of WLPL Guarantee and indemnity 32


15.5	Payments 32


15.6	Continuing guarantee and indemnity 32


15.7	Enforcement against MRL 33


15.8	Limitation 33


16.	Albemarle Guarantee and indemnity 33


16.1	Consideration 33


16.2	Albemarle Guarantee 33


16.3	Indemnity 33


16.4	Extent of Albemarle Guarantee and indemnity 33


16.5	Payments 34


16.6	Continuing guarantee and indemnity 34


16.7	Enforcement against Albemarle Corporation 34


16.8	Limitation 34


17.	Dispute resolution 34


17.1	Dispute Notice 34


17.2	Continuance of Contract 35


18.	Duty, costs and expenses 35


18.1	Duty 35


18.2	Costs and expenses 35


18.3	Costs of performance 35


19.	GST 35


19.1	Interpretation 35


19.2	GST Gross Up of Taxable Supplies 35


20.	Foreign resident capital gains withholding 36


20.1	Application of foreign resident capital gains withholding 36


20.2	Clearance Certificate given by Albemarle Lithium 37


20.3	WLPL entitled to withhold 37


20.4	WLPL's obligation to pay Withholding Amount to the Commissioner 37


20.5	Payment of the Withholding Amount after Completion 37


20.6	Discharge of liability 37


20.7	Definitions and interpretation 37


21.	PPS Act registration 37


21.1	Protecting interests 37


21.2	Notices 38


22.	Notices 38


22.1	General 38


22.2	How to give a communication 38


22.3	Particulars for delivery 38


22.4	Communications by post 39


22.5	Communications by email 39


22.6	Process service 39


22.7	After hours communications 39


23.	General 40

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 4


23.1	Consents and approvals 40


23.2	Entire agreement 40


23.3	Further assurances 40


23.4	Rights cumulative 40


23.5	Survival and merger 40


23.6	Variation 40


23.7	Waiver 40


23.8	Governing law 40


23.9	Counterparts 40


23.10	Default interest 40


23.11	Interest payable on overdue amounts 41


23.12	Invalidity 41


23.13	Operation of indemnities 41


23.14	Payments 41


23.15	Relationship 41


23.16	Assignment, novation and other dealings 41


23.17	Third party rights 42


Schedule 1 – Dictionary	43


Schedule 2 - Albemarle Group Warranties	47


Schedule 3 - Kemerton Contracts	54


Schedule 4 - Permitted Security Interest	55


Schedule 5 – Kemerton Approvals	56


Schedule 6 – Calculation of Kemerton Consideration	57


Schedule 7 - Kemerton Incomplete Infrastructure	58


Signing page	66


Annexure A – Map of Kemerton Project	68

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 5

Details



Date

Parties



Name	Albemarle Lithium Pty Ltd ACN 618 095 471
Short form name	Albemarle Lithium



Name	Albemarle Wodgina Pty Ltd ABN 69 630 509 303
Short form name	AWPL



Name	Wodgina Lithium Pty Ltd ACN 611 488 932
Short form name	WLPL



Name	Mineral Resources Limited ACN 118 549 910
Short form name	MRL



Name	Albemarle Corporation
Short form name	Albemarle Corporation

Background


A	Albemarle Lithium is the beneficial and (except where expressly provided in this agreement) legal owner of the Kemerton Sale Interest.


B	Albemarle Lithium has agreed to sell to WLPL, and WLPL has agreed to purchase from Albemarle Lithium, the Kemerton Sale Interest on the terms and conditions of this agreement.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 6

Agreed terms


1.	Defined terms and interpretation


1.1	Definitions

A term or expression starting with a capital letter:


(a)	which is defined in the Dictionary in Schedule 1, has the meaning given to it in the Dictionary;


(b)	which is not defined in this agreement has the meaning given to it in the Wodgina ASSSA, applied mutatis mutandis;


(c)	which is defined in the Corporations Act, but is not defined in the Dictionary or the Wodgina ASSSA, has the meaning given to it in the Corporations Act; and


(d)	which is defined in the GST Law, but is not defined in the Dictionary, the Wodgina ASSSA or the Corporations Act, has the meaning given to it in the GST Law.


1.2	Interpretation


(a)	The interpretation clause in clause 1.2 of the Wodgina ASSSA sets out rules of interpretation for this agreement, applied mutatis mutandis.


(b)	A reference to so far as Albemarle Lithium is aware, or words to that effect, in relation to a fact, matter or circumstance is to the actual knowledge of any of the following persons as at the Execution Date having made due and proper enquiries prior to 5.00 pm (Perth time) on the day prior to the Execution Date:


(i)	Luke Kissam;


(ii)	Karen Narwold;


(iii)	Jennifer Morningstar;


(iv)	Stephen Buras


(v)	Eric Norris; and


(vi)	Jac Fourie.


2.	Conditions to Completion


2.1	Conditions precedent

Clauses 3 and 5 do not become binding on the parties and are of no force and effect until each of the following Conditions have been satisfied or waived in accordance with clauses 2.2 and 2.3:


(a)	Regulatory approval:

either:

(i)

a merger filing, if required, having been made by the parties to, and accepted by, SAMR pursuant to the Anti-Monopoly Law and SAMR having issued a decision confirming that it will not conduct further review of the transactions evidenced by the Wodgina ASSSA and this agreement or it will allow the transactions evidenced by the Wodgina ASSSA and this agreement to proceed without conditions or, subject to clause 2.2(a), on conditions reasonably acceptable to the parties; or


(ii)	that all applicable waiting periods under the Anti-Monopoly Law in respect of the review of the transaction contemplated by the Wodgina ASSSA and this agreement have expired.


(b)	Transfer of Sale Interest: The condition precedent to transfer the Sale Interest to AWPL set out in clauses 2.1(a), (b) and (c) of the Wodgina ASSSA have been satisfied or waived.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 7


(c)	Transfer of Albemarle Kemerton Interest: The condition precedent to transfer the Albemarle Kemerton Interest to AWPL set out in paragraph 1 of clause 2.1 under the Albemarle Kemerton ASA has been satisfied or waived.


2.2	Satisfaction of the Conditions

(a)

Each of Albemarle Lithium and WLPL must use all reasonable endeavours to satisfy the Conditions in clauses 2.1(a) and 2.1(b) by the Conditions Precedent Date, provided that in respect of the Condition in clause 2.1(a), neither party will be required to offer, propose or agree to any conditions to SAMR’s approval of the transaction evidenced by this agreement until the impact on the Project and the Kemerton Project together of such conditions have been agreed between the parties and the Transaction Documents and the Kemerton Transaction Documents have been revised to reflect such impact, if necessary, on terms reasonably satisfactory to each party.


(b)	Albemarle Lithium and AWPL must each use all reasonable endeavours to satisfy the Condition in clause 2.1(c) by the Conditions Precedent Date.


(c)	Albemarle Lithium and WLPL must cooperate with each other in doing anything reasonably necessary to satisfy the Conditions.


(d)	Albemarle Lithium must, if required, make a merger filing with SAMR as referred to in clause 2.1(a) by the date that is 30 Business Days after the Execution Date in connection with the transactions contemplated by this agreement.


(e)	The following principles apply to the SAMR merger filing contemplated by the Condition in clause 2.1(a):


(i)	Albemarle Lithium will have sole control of the strategy for the filing, including preparing, lodging and managing the filing;


(ii)	Albemarle Lithium will consult with WLPL regarding the strategy for the filing and any other subsequent submissions and will consider WLPL's views regarding such strategy to the extent they are reasonable (provided that nothing in this clause 2.2(e) obliges Albemarle Lithium to alter its proposed strategy for the filing);


(iii)	without limiting clause 2.2(c), WLPL must provide all assistance reasonably requested by Albemarle Lithium for the filings, including providing any information and signing all documents required; and

(iv)

for the filing contemplated by the Condition in clause 2.1(a), prior to the submission of that filing and any other subsequent submissions to SAMR made in connection with clause 2.1(a), Albemarle Lithium will provide WLPL with a draft of the filing or subsequent subsmissions (which copy may redact matters which are confidential or commercially sensitive) allowing for a reasonable time in which to provide comments (which comments must be provided promptly) and will consider reasonable amendments to the filing and submissions requested by WLPL (provided that Albemarle Lithium is not obliged to amend the filing to account for WLPL's requested amendments).


2.3	Waiver

The Conditions in clause 2.1 are for the benefit of both WLPL and Albemarle Lithium and may only be waived by written agreement between WLPL and Albemarle Lithium.


2.4	Notice

Albemarle Lithium and WLPL must:


(a)	keep the other party fully informed (by notices in writing) in relation to progress towards the satisfaction of the Conditions; and


(b)	promptly notify the other in writing if it becomes aware that a Condition is satisfied or incapable of being satisfied before the Conditions Precedent Date.


2.5	Termination


(a)	This agreement is terminated automatically on termination of the Wodgina ASSSA.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 8


(b)	Without limiting clause 2.5(a), Albemarle Lithium or WLPL may terminate this agreement before Completion by giving written notice to the other of Albemarle Lithium or WLPL (as the case may be) if:


(i)	a Condition is not satisfied or waived by the Conditions Precedent Date;


(ii)	a Condition (which has not been waived) becomes incapable of being satisfied by the Conditions Precedent Date;


(iii)	the parties agree that a Condition cannot be satisfied by the Conditions Precedent Date (unless that Condition is satisfied before termination of this agreement); or


(iv)	the other of Albemarle Lithium or WLPL (as is relevant) suffers an Insolvency Event,

and provided that the terminating party is not in breach of a material obligation under this agreement (including that the terminating party must have complied with its obligations in clause 2.2).

(c)

Provided the Conditions have been satisfied or waived, if either the MRL Group or the Albemarle Group (Defaulting Party) does not Complete when required to do so under this agreement, other than as a result of default by the other group (Non-Defaulting Party), the Non-Defaulting Party may give the Defaulting Party notice requiring it to Complete within 10 Business Days of receipt of the notice. When a notice is given under this clause 2.5(c), time will be of the essence under this agreement in all respects.


(d)	If either the Seller Group (as that term is defined in the Wodgina ASSSA) on the one hand or the Buyer Group (as that term is defined in the Wodgina ASSSA) on the other hand gives a notice under clause 2.6(c) of the Wodgina ASSSA then a notice will be deemed to be given under clause 2.5(c) of this agreement by:


(i)	in the case of the Seller Group, the MRL Group; or


(ii)	in the case of the Buyer Group, the Albemarle Group.


(e)	If the Defaulting Party does not Complete within the period specified in clause 2.5(c) , the Non-Defaulting Party may choose either to seek specific performance or terminate this agreement, without limitation to any accrued rights.


(f)	If this agreement is terminated, then:


(i)	if any Kemerton Transaction Document does not automatically terminate in accordance with its terms on termination of this agreement, the parties will procure that each other Kemerton Transaction Document that has been executed is terminated;


(ii)	each party is released from its obligations to further perform its obligations under each other Kemerton Transaction Document, except those expressed to survive termination; and


(iii)	each party retains the rights it has against the other in respect of any breach of this agreement occurring before termination (except, in relation to the rights of WLPL and MRL, in the circumstances set out in clause 3 of the Break Fee Letter).


3.	Sale and purchase of Kemerton Sale Interest


3.1	Sale and purchase

Albemarle Lithium agrees to sell the Kemerton Sale Interest to WLPL and WLPL agrees to buy the Kemerton Sale Interest:


(a)	for the Kemerton Consideration;


(b)	with effect from Completion;


(c)	free from any Security Interest (other than a Permitted Security Interest); and


(d)	on the terms and conditions of this agreement.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 9


3.2	Kemerton Consideration


(a)	The consideration for the sale and purchase of the Kemerton Sale Interest is the Kemerton Consideration.


(b)	Albemarle Lithium must notify WLPL of the amount of the Kemerton Consideration prior to Completion.


(c)	Albemarle Lithium directs WLPL to offset (as set out in clause 4.3(b) of the Wodgina ASSSA) the payment of the Kemerton Consideration against any amounts owing by AWPL to WLPL pursuant to the Wodgina ASSSA, instead of paying that amount to Albemarle Lithium, and WLPL agrees that WLPL will comply with that direction.


(d)	Albemarle Lithium acknowledges that, by offsetting amounts as described in clause 3.2(c), WLPL will satisfy its obligation to pay Albemarle Lithium the Kemerton Consideration.


(e)	WLPL acknowledges, by offsetting amounts as described in clause 3.2(c), AWPL will satisfy its obligation to WLPL, to the extent of the amount offset.


3.3	Payments to reduce Kemerton Consideration

Any payment received by WLPL after Completion in relation to any breach by Albemarle Lithium of a Albemarle Group Warranty or under an Indemnity must be treated as a reduction in and refund of the Kemerton Consideration.


3.4	Method of making payments


(a)	All payments required to be made under this agreement must be paid without deduction or set-off in Immediately Available Funds to the bank account or accounts nominated in writing before the due date for payment by the party to whom the payment is due.


(b)	Any nomination referred to in clause 3.4(a) must be made at least 2 Business Days before the payment is due.


4.	Interim Period


4.1	Consent to Kemerton Sublease


(a)	The parties acknowledge and agree that:


(i)	the none of the arrangements contemplated by this clause 4.1 will be effective unless and until Completion occurs; and


(ii)	without limiting clause 4.1(a)(i), on obtaining the consent and approval specified in clauses 4.1(b)(i) and 4.1(b)(ii), the parties will enter into the Kemerton Sublease, the Kemerton Access Licence or any alternate arrangement contemplated by this clause 4.1 (as applicable).


(b)	On and from the Execution Date, the parties must use all reasonable endeavours to:


(i)	obtain the consent of LandCorp (in accordance with the terms of the Kemerton Lease and the Kemerton Easement) to:


(A)	the entry into the Kemerton Sublease and Kemerton Access Licence by Albemarle Lithium, AWPL and WLPL; and


(B)	the grant of the Deed of Cross Security over the Kemerton Sublease,

on terms reasonably acceptable to Albemarle Lithium, AWPL and WLPL (each acting reasonably); and


(ii)	obtain the approval of the Western Australian Planning Commission to the sublease of a portion of the Lease Land for the purposes of the grant of the Kemerton Sublease on terms acceptable to Albemarle Lithium, AWPL and WLPL (each acting reasonably).


(c)	If either:

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 10


(i)	the consent of LandCorp under clause 4.1(b)(i) or the consent of the Western Australian Planning Commission under clause 4.1(b)(ii) is refused or not granted by 31 December 2020; or


(ii)	the terms of either such consent are not acceptable to Albemarle Lithium, WLPL or AWPL (each acting reasonably),

then the parties will consult and use all reasonable endeavours to promptly agree and document a revised arrangement in accordance with the following principles (including seeking and obtaining the necessary consents and approvals):


(iii)	the parties will enter into the Kemerton Access Licence for the Kemerton Easement;


(iv)	the parties will enter into the Kemerton Sublease which will be in respect of all the area of the Lease Land;

(v)

under the revised Kemerton Sublease referred to in clause 4.1(c)(iv) above, Albemarle Lithium will be granted the option (for consideration of US$10), to elect (at its sole discretion and at any time during the term of the Kemerton Sublease subject only to the requirement to obtain (to the extent required) the approvals under clause 4.1(b)(i)) to cause the partial surrender of the Kemerton Sublease to exclude the Kemerton Expansion Capacity Area; and


(vi)	if, during the term of the Kemerton Sublease, Albemarle Lithium exercises its option to cause the partial surrender of the Kemerton Sublease as contemplated by clause 4.1(c)(iv) and (to the extent required), the approvals under clause 4.1(b)(i) are obtained, AWPL and WLPL will grant a non-exclusive access licence to Albemarle Lithium in accordance with the following principles:


(A)	the licence will be effective from the date of exercise of the surrender option contemplated by clause 4.1(c)(iv) and will run for the duration of the Kemerton Sublease;


(B)	the consideration for the licence will be US$1.00;


(C)	the licence will cover the area of the Kemerton Lease (excluding the area the subject of the Kemerton Trains 1 and 2 Infrastructure);


(D)	the licence applies to all Kemerton Shared Assets and any other infrastructure located at the Kemerton Project (other than the Trains) and not forming part of the Kemerton Expansion Capacity;


(E)	AWPL and WLPL will, to the extent AWPL and WLPL hold any Kemerton Approvals and Kemerton Contracts:


(I)	hold and maintain the Kemerton Approvals and Kemerton Contracts for WLPL and AWPL (to the extent of the Kemerton Expansion Capacity);


(II)	operate and maintain the Kemerton Shared Assets (subject to the Plant Services Agreement); and


(III)	use all reasonable endeavours to secure and maintain any necessary future approvals and contracts for Albemarle Lithium (and under reasonable direction from Albemarle Lithium) related to the Kemerton Expansion Capacity,

and:


(IV)	the cost (including costs for operation and replacement) of the Kemerton Approvals and Kemerton Contracts (and any future approvals and contracts) will be borne by Albemarle Lithium to the extent of the Kemerton Expansion Capacity or the Kemerton Expansion Capacity Area; and


(V)	Albemarle Lithium will indemnify WLPL and AWPL for any Liabilities suffered or incurred by WLPL and AWPL arising from or in connection with the Kemerton Approvals and Kemerton

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 11

Contracts and any future approvals and contracts to the extent of the Kemerton Expansion Capacity or the Kemerton Expansion Capacity Area;


(F)	all costs (including fixed and variable costs) and Liabilities related solely to:


(I)	the Kemerton Train 1 and 2 Infrastructure, will be borne by WLPL and AWPL in accordance with their proportionate interests under the JVA; and


(II)	the Kemerton Expansion Capacity, will be borne by Albemarle Lithium;


(G)	all other costs of operating and maintaining the Kemerton Shared Assets (including costs of repair and replacement) will be borne by Albemarle Lithium on the one hand and WLPL and AWPL on the other hand in proportion to the capacity at the Kemerton Project; and


(H)	the utilities to be provided to Albemarle Lithium for operation of the Kemerton Expansion Capacity and Kemerton Shared Assets will be passed through at cost based on consumption attributable to Albemarle Lithium,

and the parties will use all reasonable endeavours to seek the consents contemplated by clause 4.1(b) to the revised arrangement contemplated by this clause 4.1(c) as soon as reasonably practicable.


(d)	If, for the revised arrangement contemplated by clause 4.1(c), either:


(i)	the consent of LandCorp under clause 4.1(b)(i) or the consent of the Western Australian Planning Commission under clause 4.1(b)(ii) is refused or not granted by 31 December 2020; or


(ii)	the terms of either such consent are not acceptable to Albemarle Lithium, WLPL or AWPL (each acting reasonably),


(iii)	the parties will enter into the Kemerton Access Licence for the Kemerton Easement;


(iv)	the parties will enter into the Kemerton Sublease which will be in respect of all the area of the Lease Land;

(v)

under the revised Kemerton Sublease referred to in clause 4.1(d)(iv) above, Albemarle Lithium will be granted the option (for consideration of US$10), to elect (at its sole discretion and at any time during the term of the Kemerton Sublease) to be granted a sub-sublease of the Kemerton Expansion Capacity Area (on substantially the same terms of the Kemerton Sublease, applied mutatis mutandis); and

(vi)

if, during the term of the Kemerton Sublease, Albemarle Lithium exercises its option to be granted a sub-sublease of the Kemerton Expansion Capacity Area as contemplated by clause 4.1(d)(v), AWPL and WLPL will grant an access licence to Albemarle Lithium in accordance with the principles outlined in clause 4.1(d)(vi) (except that the access licence will be effective from the date of exercise of the subsub-lease option contemplated by clause 4.1(d)(v)),

and, if required, the parties will use all reasonable endeavours to seek the consents contemplated by clause 4.1(b) to the revised arrangement contemplated by this clause 4.1(d) as soon as reasonably practicable.


(e)	If, for the revised arrangement contemplated by clause 4.1(d), either:

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 12


(i)	the consent of LandCorp under clause 4.1(b)(i) or the consent of the Western Australian Planning Commission under clause 4.1(b)(ii) is refused or not granted by 31 December 2020; or


(ii)	the terms of either such consent are not acceptable to Albemarle Lithium, WLPL or AWPL (each acting reasonably),


(iii)	the parties will enter into the Kemerton Access Licence for the Kemerton Easement;


(iv)	Albemarle Lithium will grant AWPL and WLPL an access licence, substantially in accordance with the principles outlined in clause 4.1(c)(v), applied mutatis mutandis;


(v)	the parties will make such amendments to the relevant agreements to put the parties in the position that they would have been had the consents contemplated by clause 4.1(b) been obtained;


(vi)	without limiting clause 4.1(e)(v), Albemarle Lithium, WLPL and AWPL will seek to grant a form of security in favour of WLPL and AWPL as parties to the JVA, such form of security to be agreed between Albemarle Lithium, WLPL and AWPL (each acting reasonably); and


(vii)	the revised arrangement must not breach the terms of the Kemerton Lease, the Kemerton Approvals or any applicable law,

and the parties will use all reasonable endeavours to seek the consents contemplated by clause 4.1(b) to the revised arrangement contemplated by this clause 4.1(e) as soon as reasonably practicable.

(f)

If the revised arrangement contemplated by clause 4.1(e) is not entered into for any reason (including because the consent of Landcorp or the Western Australian Planning Commission is required to such arrangement and such consent has not been obtained), Albemarle Lithium and WLPL will consult and use all reasonable endeavours to promptly identify an alternative proposal to such arrangement reasonably satisfactory to each party, which arrangement must as far as possible put the parties in the position they would have been had the consents contemplated by clause 4.1(b) been obtained, provided that such arrangement must not breach the terms of the Kemerton Lease, the Kemerton Easement, the Kemerton Approvals or any applicable law.


(g)	Without limiting clauses 4.1(b) to 4.1(f), if at the Completion Date, the consents contemplated by clause 4.1(b) have not been obtained for any of the arrangements then Albemarle Lithium will permit AWPL and WLPL to enter upon and access the Lease Land under the terms of the Kemerton Lease until a revised arrangement is entered into in accordance with clauses 4.1(b) to 4.1(f) (as applicable).


4.2	Information and access

(a)

Albemarle Lithium must provide to WLPL, as soon as reasonably practicable after it becomes aware of the information, details (including copies where relevant) of all material information in relation to the Kemerton Project and the Kemerton Sale Interest that Albemarle Lithium, its Related Bodies Corporate or Representatives become aware of during the Interim Period (including copies of all notices in respect of the Kemerton Project and the Kemerton Sale Interest received during the Interim Period, including from Government Agencies, contract counterparties or any other party).


(b)	During the Interim Period, Albemarle Lithium must, to the extent permitted by law and subject to clauses 4.2(c) and 14:


(i)	give WLPL and its Representatives reasonable access to the Kemerton Sale Interest during normal business hours and on reasonable notice (provided that WLPL complies with Albemarle Lithium's reasonable safety requirements); and

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 13

(ii)

provide information relating to the Kemerton Project and the Kemerton Sale Interest as WLPL reasonably requires to enable WLPL to become familiar with the Kemerton Project (and WLPL may make copies of such information) provided that nothing in this clause 4.2(b)(ii) constitutes a licence to WLPL to use such information for any purpose and access to and copying of information relating to the design of the lithium hydroxide plant may be subject to restrictions, including such information not being made available to certain persons.


(c)	WLPL may only exercise its rights under clause 4.2(b) to the extent it does not unreasonably interfere with the conduct of the activities and operations of Albemarle Lithium.

(d)

During the Interim Period, two Representatives of each of WLPL and Albemarle Lithium must meet not less than once every fortnight at such time and place (which may be by teleconference) agreed between WLPL and Albemarle Lithium to discuss the Kemerton Sale Interest (including the progress regarding the construction of the Kemerton Incomplete Infrastructure). The Representatives of WLPL and Albemarle Lithium must be the same as the Representatives of WLPL and AWPL attending the meetings under clause 6.2(d) of the Wodgina ASSSA and the meetings are to take place at the same time as the meetings under clause 6.2(d) of the Wodgina ASSSA.


(e)	Nothing in this clause 4.1 obliges Albemarle Lithium to provide information to WLPL in relation to sales of Product.


4.3	General Conduct – Kemerton Sale Interest and Kemerton Project

During the Interim Period, except as expressly provided in, or permitted or contemplated by this agreement or as consented to by WLPL in writing, Albemarle Lithium must, and must procure that Albemarle Lithium's other Related Bodies Corporate involved in the operation of the Kemerton Project, use all reasonable endeavours to carry on the Kemerton Project (including construction and successful Commissioning of the Kemerton Incomplete Infrastructure in accordance with the Wodgina ASSSA), and hold the Kemerton Sale Interest, in the ordinary course, in good faith and substantially consistent with past practice and must:


(a)	comply with all applicable laws in relation to the Kemerton Sale Interest and the material terms and conditions of the Kemerton Approvals in relation to the Kemerton Sale Interest and the Kemerton Lease;

(b)

not, and not take any steps to, surrender or relinquish the Kemerton Approvals in relation to the Kemerton Sale Interest or the Kemerton Lease, or agree to a variation of the terms of such Kemerton Approvals to the extent of the Kemerton Sale Interest or the Kemerton Lease, except to the extent required by law, they are no longer required for the operation of the Kemerton Project or are being surrendered or relinquished in order to be replaced;


(c)	not transfer, grant or permit the registration of any Security Interest over (other than a Permitted Security Interest) or otherwise deal with the Kemerton Sale Interest or Kemerton Lease or its interest in them;


(d)	not vary in a material manner, voluntarily terminate, take any action that might give rise to a termination right or waive any right under a Kemerton Contract or the Kemerton Lease;


(e)	comply with its material obligations under the Kemerton Contracts;


(f)	not enter into any joint venture, partnership, unincorporated association, alliance or similar arrangement with any person in respect of the Kemerton Sale Interest or the Kemerton Project;


(g)	not take any steps which would materially frustrate, impede or reduce the benefit of any Kemerton Transaction Document;

(h)

without limiting clause 2.4 of Schedule 15 of the Wodgina ASSSA, other than where solely relating to the period prior to the relevant KCCC Handover Dates, for Train 1 and Train 2 (as applicable) and to the extent of the Kemerton Incomplete Infrastructure handed over from time to time, not enter into, amend or terminate (or agree to enter into, amend or terminate) a contract or commitment in respect of the Kemerton Sale Interest or the Kemerton Project where such contract or commitment involves aggregate annual receipts or expenditure in excess of $1,000,000, otherwise than in the ordinary course of business;

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 14

(i)

other than where solely relating to the period prior to the relevant KCCC Handover Dates, for Train 1 and Train 2 (as applicable) and date of the Kemerton Incomplete Infrastructure hand over from time to time, not enter into or amend (or agree to enter into or amend) a contract or commitment with a Related Body Corporate of Albemarle Lithium in respect of the Kemerton Sale Interest or the Kemerton Project; and


(j)	not enter into any agreement otherwise than on arm's length or enter into any abnormal or unusual transaction, in each case in respect of the Kemerton Sale Interest or the Kemerton Project.


4.4	Compliance with clause 4 and Permitted Acts


(a)	In complying with its obligations under clause 4, Albemarle Lithium:


(i)	is not required to do, to omit to do, or allow to be done anything which would breach, or would reasonably be expected to breach:


(A)	any law or regulation (including any competition or anti-trust laws); or


(B)	a Kemerton Contract; and


(ii)	may take such action as is:


(A)	required to reasonably and prudently respond to an emergency or disaster (including a situation giving rise to a risk of personal injury or damage to property);


(B)	required to comply with its obligations to construct and Commission the Kemerton Incomplete Infrastructure under the Wodgina ASSSA;


(C)	authorised by a Transaction Document or Kemerton Transaction Document; or


(D)	agreed in writing between WLPL and Albemarle Lithium.


(b)	WLPL must not unreasonably withhold or delay any consent required under clause 4.3.

(c)

WLPL and Albemarle Lithium must each ensure that at all times during the Interim Period it has nominated one or more persons as its Representative (each a WLPL's Nominee or Albemarle Lithium's Nominee, as is relevant) for the purpose of clause 4.2(d) (which person must be the same person as nominated under clause 6.2(d) of the Wodgina ASSSA). WLPL's Nominee and Albemarle Lithium's Nominee shall have authority to act on behalf of WLPL and Albemarle Lithium (respectively) in relation to any queries, consents or approvals required under clause 4.3.


(d)	The parties agree that clauses 4.3(c), 4.3(d), 4.3(e), 4.3(h), 4.3(i) and 4.3(j) do not apply to the Kemerton Construction Contracts.


4.5	Kemerton Transaction Documents


(a)	Albemarle Lithium and WLPL must use all reasonable endeavours acting in good faith to negotiate, agree and execute such detailed, definitive and legally binding agreements as is necessary to fully record the terms of the Kemerton Transaction Documents as soon as reasonably practicable after the Execution Date and in any case by no later than Completion.


(b)	Albemarle Lithium and WLPL must devote appropriate resources to the negotiations of the Kemerton Transaction Documents and Albemarle Lithium and WLPL shall make themselves and their advisers available for negotiations and meetings in relation to agreement of the Kemerton Transaction Documents.

(c)

The parties acknowledge and agree that the Plant Services Agreement, Kemerton Access Licence and Kemerton Sublease will reflect the following principles and will otherwise contain such other reasonable and customary terms as are included in similar agreements taking into account the below principles and the nature of the Project and the Kemerton Project (and the proposed ownership interests in the Project and the Kemerton Project):

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 15


(i)	for the Plant Services Agreement will, without double counting for the allocation of costs and liabilities under the Kemerton Sublease and the Kemerton Access Licence:

(A)

be subject to clause 2 of Schedule 15 of the Wodgina ASSSA and otherwise provide for Albemarle Lithium (as holder of the Kemerton Approvals (until agreed otherwise)) to, as agent for WLOPL, have control over the Lease Land and the Kemerton Incomplete Infrastructure and to use its reasonable endeavours to implement the Kemerton Project as directed by WLOPL (including in relation to compliance with the terms of the Kemerton Lease), and the parties agree no value is attributed to Albemarle Lithium maintaining the control contemplated by this clause 4.5(c)(i)(A);


(B)	provide for WLOPL (as agent for WLPL and AWPL) to hold Albemarle Lithium harmless from and indemnified for all costs, expenses and liabilities suffered or incurred, excluding to the extent related to the:


(I)	Kemerton Expansion Capacity; and

(II)

from the commencement of use of the relevant Kemerton Shared Assets, in relation to access for and construction and operation of lithium hydroxide production facilities on the Kemerton Expansion Capacity, the actual costs for the Kemerton Expansion Capacity (or if actual or actual share of use is not able to be determined, the proportionate share based on installed or under construction capacity at the Kemerton Project);


(C)	provide for Albemarle Lithium to hold the Kemerton Contracts in accordance with clause 7 and provide for a process for the Kemerton Contracts to be progressively transferred to WLOPL once those contracts are not required to be held by Albemarle Lithium;


(D)	provide for the parties to agree a process to determine whether, following the Interim Period, Albemarle Lithium will enter into any contracts that are not Kemerton Contracts, but would be Kemerton Contracts except for the fact they were entered into after the Interim Period; and


(E)	provide for Albemarle Lithium to hold the Kemerton Approvals in accordance with clause 6.3 and provide for a process for the Kemerton Approvals to be progressively transferred to WLOPL once those approvals are not required to be held by Albemarle Lithium.


(ii)	for the Kemerton Access Licence:


(A)	the licence will be irrevocable (subject to the terms of the Kemerton Easement) and run for the duration of the Kemerton Sublease;


(B)	the licence will be non-exclusive and will cover the area of the Kemerton Easement;


(C)	the licence will be for US$10.00 consideration;

(D)

the licence will provide for a pass through of costs and liabilities associated with the maintenance of the Kemerton Easement on an indemnity basis and apportioned between the capacity and use of the Kemerton Train 1 and 2 Infrastructure by AWPL and WLPL (shared in proportion to their individual interests in the JVA) and the capacity and use of the Kemerton Expansion Capacity by Albemarle Lithium;

(E)

WLPL and AWPL will, in accordance with AWPL’s and WLPL’s proportionate interests in the JVA, indemnify Albemarle Lithium from and against all Liability suffered or incurred by Albemarle Lithium arising under the Kemerton Easement to the extent that Liability relates to the Kemerton Incomplete Infrastructure or any activities of the WLPL and AWPL on or in the vicinity of the Kemerton Easement; and

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 16

(F)

Albemarle Lithium will indemnify WLPL and AWPL from and against all Liability suffered or incurred by WLPL and AWPL arising under the Kemerton Easement to the extent that Liability relates to the Kemerton Expansion Capacity or any activities of Albemarle Lithium on or in the vicinity of the Kemerton Easement (except for any Liability arising as a result of Albemarle Lithium’s capacity as operator under the Plant Services Agreement);


(iii)	for the Kemerton Sublease:


(A)	the Kemerton Sublease will be executed as a deed, for nil consideration;


(B)	subject to clause 4.5(c)(iii)(C) the Kemerton Sublease will be a back-to-back sublease of the Kemerton Lease, amended as necessary to reflect the fact that the Kemerton Sublease will be granted in respect of part of the area of the Kemerton Lease, including adequate access rights over necessary areas outside the area of the Kemerton Sublease;


(C)	the Kemerton Sublease:


(I)	will be for the entire term of the Kemerton Lease, and WLPL and AWPL will have the right to require Albemarle Lithium to exercise any options to extend the Kemerton Lease;


(II)	Albemarle Lithium will not be permitted to assign or transfer the Kemerton Lease without the prior written consent of WLPL and AWPL;


(III)	Albemarle Lithium will not require AWPL or WLPL to contribute to the bank guarantee provided under the Kemerton Lease, provided that the parties will discuss in good faith arrangements regarding the Kemerton Lease bank guarantee following the last KCCC Handover; and


(D)	subject to clause 4.1, the area of the Kemerton Sublease is as indicatively marked as the sub-lease area on the plan in Annexure A, and will include only the exclusive areas of the Kemerton Incomplete Infrastructure and will exclude the Kemerton Expansion Capacity Area;


(E)	subject to clause 4.5(c)(iii)(C), the boundaries of area of the Kemerton Sublease will be agreed by the parties, acting reasonably;


(F)	the Kemerton Sublease will be on such terms and in such form as required by LandCorp, and otherwise (subject to this clause 4.5(c)(iii)) on substantially the same terms and conditions as the Kemerton Lease (including prorata financial terms based on use from time to time);


(G)	without limiting clauses 4.5(c)(iii)(B) or 4.5(c)(iii)(F), there will be no change to the fundamental terms of the Kemerton Lease other than as contemplated in this clause 4.5(c)(iii);


(H)	WLPL and AWPL will indemnify Albemarle Lithium from and against all Liability suffered or incurred by Albemarle Lithium arising under or in connection with the Kemerton Lease to the extent that Liability relates to the Kemerton Incomplete Infrastructure, the land the subject of the Kemerton Sublease or any activities of the WLPL and AWPL on or in the vicinity of the Kemerton Lease;

(I)

Albemarle Lithium will indemnify WLPL and AWPL from and against all Liability suffered or incurred by WLPL and AWPL arising under or in connection with the Kemerton Lease to the extent that Liability relates to the Kemerton Expansion Capacity Area or any activities of Albemarle Lithium on or in the vicinity of the Kemerton Lease (except for any Liability arising as a result of Albemarle Lithium’s capacity as operator under the Plant Services Agreement); and

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 17


(J)	the parties will use all reasonable endeavours to include the terms of the indemnities in this clauses 4.5(c)(iii) in the Kemerton Sublease, but to the extent that it is not so included (including due to the requirements of LandCorp), WLPL, AWPL and Albemarle Lithium will execute a separate indemnity document for that purpose.


4.6	Alternative arrangements for spodumene concentrate


(a)	Subject to clause 4.6(b), from the Execution Date the parties will (subject to and in compliance with any competition and anti-trust laws) consult with each other in relation to the potential opportunity to implement either or both of the following arrangements:


(i)	subject to clause 4.6(b), for AWPL and WLPL to swap Product that would otherwise have been processed in the Kemerton Incomplete Infrastructure for Greenbushes Concentrate; and/or


(ii)	to use Product in other lithium hydroxide processing facilities (including facilities which are based outside Australia and which are owned by Albemarle Corporation or its Related Bodies Corporate).

(b)

The parties acknowledge that any such swap arrangement implemented by the parties (as contemplated in clause 4.6(a)(i)) must not adversely impact Albemarle Lithium's (or any of its Related Body Corporate's) economic position, including that there must be no material adverse differences in the quality (including the lithium content and other quality characteristics) of the Product compared to Greenbushes Concentrate.


4.7	Acquisition or development of non-Australian processing assets

From the Execution Date, AWPL and WLPL will (subject to any competition and anti-trust laws) liaise with each other in relation to opportunities to acquire or develop non-Australian lithium hydroxide processing facilities for the purpose of processing Product with a view to whether (subject to all necessary competition approvals) those assets could be potentially form part of the 'Joint Venture Assets' (as that term is defined in the JVA) under the JVA, or otherwise be owned and operated by AWPL and WLPL or their Related Bodies Corporate.


4.8	Tax Notice

To the extent any part of the Kemerton Sale Interest constitutes capital works within the meaning of Division 43 of the Tax Act, Albemarle Lithium must give WLPL, within the time required by section 262A(4AJA)(c) of the Tax Act, a notice under section 262A(4AJA) of the Tax Act that contains enough information about Albemarle Lithium’s holding of that part of the Kemerton Sale Interest to enable WLPL to determine how Division 43 of the Tax Act will apply in respect of that part of the Kemerton Sale Interest.


5.	Completion


5.1	Date and place for Completion

Subject to clause 2, Completion will take place simultaneously with (and at the same place as) completion of the Wodgina ASSSA and Albemarle Kemerton ASA.


5.2	Obligations of Albemarle Lithium at Completion

At Completion, Albemarle Lithium must give WLPL:


(a)	Transfer Instruments duly executed by Albemarle Lithium and AWPL (as applicable);


(b)	the documents and information referred to in clause 5.4;

(c)

any other documents required to register the transfer or assignment to WLPL of any component of the Kemerton Sale Interest, provided that Albemarle Lithium will not be required to deliver instruments of title where they are already lodged with the relevant Government Agency for the registration of other dealings provided Albemarle Lithium gives an undertaking to WLPL to so deliver on receipt of possession or control of such documents; and

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 18


(d)	a Tax Invoice for the payment of the Kemerton Consideration in respect of the Kemerton Sale Interest; and


(e)	signed original counterparts of each Kemerton Transaction Document duly executed by Albemarle Lithium and AWPL (as applicable), but only to the extent the relevant Kemerton Transaction Document is agreed in accordance with clause 4.5 and, for the Kemerton Sublease and Kemerton Access Licence subject to clause 4.1.


5.3	WLPL's obligations at Completion

At Completion, WLPL must give Albemarle Lithium signed original counterparts of each Kemerton Transaction Document duly executed by WLPL, WLOPL or the relevant MRL Group Member that is party thereto, but only to the extent the relevant Kemerton Transaction Document is agreed in accordance with clause 4.5 and, for the Kemerton Sublease and Kemerton Access Licence subject to clause 4.1.


5.4	Security Interest

Albemarle Lithium must in respect of each PPS Security Interest over the Kemerton Sale Interest (other than a Permitted Security Interest) which is registered on the PPS Register immediately before Completion, give to WLPL at Completion a deed executed by the person named in the PPS Register as the Secured Party in relation to the PPS Security Interest releasing the PPS Security Interest over the Kemerton Sale Interest with effect from Completion and an undertaking to procure the removal of the PPS Security Interest over the Kemerton Sale Interest from the PPS Register as soon as practicable and in any event no later than 5 Business Days after Completion.


5.5	Interdependence


(a)	The obligations of:


(i)	Albemarle Lithium and WLPL under this clause 5;


(ii)	AWPL and WLPL under clause 7 of the Wodgina ASSSA; and


(iii)	Albemarle Lithium and AWPL under clause 4 of the Albemarle Kemerton ASA,

are all interdependent.


(b)	Unless otherwise stated, all actions required to be performed by a party at Completion and completion of the Wodgina ASSSA and Albemarle Kemerton ASA are taken to have occurred simultaneously at Completion.


(c)	Completion will not occur unless all of the obligations of:


(i)	Albemarle Lithium and WLPL to be performed at Completion under this clause 5;


(ii)	AWPL and WLPL under clause 7 of the Wodgina ASSSA; and


(i)	Albemarle Lithium and AWPL under clause 4 of the Albemarle Kemerton ASA,

are complied with and fully effective.


5.6	Completion of Albemarle Kemerton ASA

Albemarle Lithium and AWPL must procure that completion of the Albemarle Kemerton ASA occurs simultaneously with Completion.


5.7	Effect of Completion – title and risk


(a)	Subject to clause 5.7(b), risk in, possession of and title to the Kemerton Sale Interest passes to WLPL upon Completion.


(b)	Risk in, possession of and title to any part of the Kemerton Incomplete Infrastructure that at Completion, Albemarle Lithium does not hold title to, is not in existence or is not capable of passing by delivery at the places where it is located, passes to WLPL (to the extent of the Kemerton Sale Interest) as provided for in Schedule 15 of the Wodgina ASSSA.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 19


6.	Conduct after Completion


6.1	Duty


(a)	Albemarle Lithium must, on behalf of WLPL and AWPL, lodge the Transfer Instruments for assessment of Duty (and must pay the Duty assessed) within the time required under the relevant legislation (Duty Lodgement).


(b)	Albemarle Lithium will lodge the stamped Transfer Instruments and any other instrument contemplated by this agreement at Western Australia Land Information Authority (Landgate) for registration against the Kemerton Lease as soon as reasonably practicable after payment of the Duty assessment.


(c)	Albemarle Lithium will pay all costs associated with the Duty Lodgement, including the costs of registering the Transfer Instruments at Western Australia Land Information Authority (Landgate).

(d)

Prior to each lodgement of the Transfer Instruments under clauses 6.1(a) and 6.1(b), Albemarle Lithium will provide WLPL with a draft of the lodgments (which copy may redact matters which are confidential or commercially sensitive) and will have regard to reasonable amendments to the lodgments requested by WLPL (provided that Albemarle Lithium is not obliged to amend the lodgments to account for WLPL's requested amendments).


(e)	WLPL must provide all assistance reasonably requested by Albemarle Lithium for the lodgement of the Transfer Instruments under clauses 6.1(a) and 6.1(b), including providing any information and signing all documents reasonably required.


(f)	Albemarle Lithium indemnifies WLPL from and against any Liabilities suffered or incurred by WLPL arising from, or in connection with, any Duty payable under this agreement or the Duty Lodgement.


6.2	Registration

Albemarle Lithium must notify WLPL as soon as reasonably practicable, and in any case within 5 Business Days, after Albemarle Lithium becomes aware that registration of the Transfer Instruments has occurred.


6.3	Kemerton Approvals

After Completion, Albemarle Lithium will hold the Kemerton Approvals for WLPL and AWPL (to the extent of the Kemerton Train 1 and 2 Infrastructure and Kemerton Shared Assets) in accordance with the Plant Services Agreement, which agreement will, if required, authorise WLOPL to act under the Kemerton Approvals.


7.	Kemerton Contracts

In respect of the Kemerton Contracts, the parties acknowledge and agree that Albemarle Lithium will hold those contracts for WLPL and AWPL (in relation to the Kemerton Incomplete Infrastructure) in accordance with the Plant Services Agreement and the costs of those Kemerton Contracts will be borne by WLPL and AWPL (in proportion to their participating interests in the JVA) as provided under the Plant Services Agreement.


8.	Liabilities


8.1	Acknowledgment

WLPL, Albemarle Lithium and AWPL acknowledge that, subject to and as set out in this agreement, Liabilities incurred in relation to the Kemerton Project (including the Kemerton Incomplete Infrastructure) on and from Completion will be addressed under the JVA, Schedule 16 of the Wodgina ASSSA and the Plant Services Agreement.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 20


8.2	Retained Liabilities

Albemarle Lithium retains, accepts and assumes responsibility for and must assume, pay, perform and discharge any and all Liability in relation to the Kemerton Project (including the Kemerton Incomplete Infrastructure) arising from or in connection with:


(a)	any conduct by Albemarle Lithium or any Related Body Corporate (other than WLOPL) or Representative of Albemarle Lithium:


(i)	in breach of any law, Kemerton Approval or condition of the Kemerton Lease in the ALB Ownership Period; and


(ii)	in breach of a Kemerton Contract or other agreement with a Third Party in relation to the Kemerton Project or the Kemerton Incomplete Infrastructure in the ALB Ownership Period; and


(b)	any Claim by a Third Party relating to the Kemerton Project or the Kemerton Incomplete Infrastructure to the extent related to the ALB Ownership Period,

(Retained Liability).


8.3	Indemnity by Albemarle Lithium in respect of Retained Liability


(a)	From Completion, Albemarle Lithium indemnifies WLPL, its Related Bodies Corporate and their Representatives from and against all Liabilities to the extent suffered or incurred by WLPL, its Related Bodies Corporate and their Representatives:


(i)	arising from or in connection with any Retained Liability; or


(ii)	arising from or in connection with Albemarle Lithium failing to comply with clause 8.2.


(b)	Without limitation, if WLPL or any person on behalf of WLPL pays, performs or discharges a Retained Liability, Albemarle Lithium must reimburse or compensate WLPL for the Retained Liability within 5 Business Days after Albemarle Lithium receives evidence of that payment, performance or discharge.


9.	Insurance


9.1	Kemerton Insurance

(a)

Albemarle Lithium must procure, or ensure that its Related Bodies Corporate procure, and maintain in force (or procure and maintain as appropriate) the Kemerton Insurances (in all material respects on the same terms and similar level of cover prevailing at the Execution Date) until the Completion Date, save that Albemarle Lithium or its Related Bodies Corporate may amend the Kemerton Insurances maintained for the benefit of Albemarle Lithium if such amended policies are substantially the same as those generally applicable to the Albemarle Group as a whole in relation to similar circumstances (provided reasonable prior notice to any such change is given to WLPL).


(b)	Albemarle Lithium must, within 10 Business Days of the Execution Date, provide WLPL with a copy of the certificates of currency of the Kemerton Insurances.


(c)	In the Interim Period, AWPL and WLPL will:


(i)	at times mutually agreed by the parties, meet to discuss; and


(ii)	use all reasonable endeavours to agree,

the insurances for the Kemerton Incomplete Infrastructure to be maintained by WLOPL on and from Completion.

(d)

From the Execution Date, Albemarle Lithium will use all reasonable endeavours to ensure AWPL and WLPL are covered in the Interim Period for their respective rights and interests (as contemplated by this agreement and Schedule 15 of the Wodgina ASSSA) in the Kemerton Incomplete Infrastructure under the Kemerton Insurances that provide coverage in respect of contract works, project cargo and public liability.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 21


9.1	Making of claims


(a)	Albemarle Lithium must use all reasonable endeavours to make (or procure that its Related Bodies Corporate make) all claims under the Kemerton Insurances in respect of losses or liabilities covered by such policies arising in the Interim Period, at the cost of Albemarle Lithium, promptly and in accordance with the requirements of the relevant policy.

(b)

To the extent that Albemarle Lithium (or its Related Bodies Corporate) receives the proceeds of any claim under the Kemerton Insurances prior to Completion (and to the extent WLPL and AWPL receive any such proceeds, they must be promptly paid to Albemarle Lithium), Albemarle Lithium must use all reasonable endeavours to apply (or procure that the Related Body Corporate applies) the proceeds to, as appropriate:


(i)	repair the damage or otherwise replace or reinstate the property;


(ii)	extinguish or reduce the relevant first party loss; or


(iii)	discharge the relevant liability,

(and to reimburse Albemarle Lithium to the extent it had met those costs and liabilities) and to the extend not so applied, the remaining proceeds, less Albemarle Lithium’s reasonable costs in pursuing the relevant claim, will be for the benefit of WLPL and AWPL together in accordance with their respective rights and interests and will, if received by Albemarle Lithium (or its Related Bodies Corporate), be paid to WLPL (in proportion to the Kemerton Sale Interest) and AWPL (in proportion to the Albemarle Kemerton Interest).


(c)	At Albemarle Lithium's cost, WLPL and AWPL shall co-operate fully with Albemarle Lithium in respect of any claim under the Kemerton Insurances, including giving all assistance requested by Albemarle Lithium (including the provision of information and the execution of documents and the assignment of the benefit of any such claim).

(d)

Without limiting clause 9.2(a), if Albemarle Lithium incurs costs in the Interim Period in reinstating or replacing an item of Kemerton Incomplete Infrastructure damaged or destroyed prior to the Completion Date, Albemarle Lithium may (at its cost, including the amount of any deductible) make and pursue such insurance claim in the name of Albemarle Lithium, the Seller and the Buyer (as applicable) and Albemarle Lithium shall be entitled to benefit from the proceeds of any insurance claim for those costs.


9.2	Provision of information relevant to future insurances

In the Interim Period, Albemarle Lithium must, within a reasonable time of a request by WLPL, provide (or procure the provision of) the following to enable WLPL to arrange insurance coverage from the Completion Date for the Kemerton Sale Interest:


(a)	loss histories in respect of the Kemerton Sale Interest;


(b)	insurance notifications and claims histories (including, for the avoidance of doubt, current claims) for Albemarle Lithium in connection with the Kemerton Insurances which provide cover for liabilities; and


(c)	declarations of written complaints or written claims by third parties in respect of Albemarle Lithium or the Kemerton Sale Interest


10.	Albemarle Group Warranties and limitations of Claims


10.1	Definition

For the purposes of this clause 10 a reference to “Claim” means a Claim for breach of a Albemarle Group Warranty.


10.2	Giving of Albemarle Group Warranties


(a)	Albemarle Lithium:


(i)	warrants to WLPL that each of the Albemarle Group Warranties:

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 22


(A)	is true, accurate and complete and not misleading as at the Execution Date; and


(B)	will be true, accurate and complete and not misleading as at the Completion Date; and


(ii)	acknowledges that WLPL has entered into this agreement in reliance on the Albemarle Group Warranties.


(b)	Each Albemarle Group Warranty must be construed independently and is not limited by reference to another Albemarle Group Warranty.


(c)	The Albemarle Group Warranties survive Completion of this agreement.


10.3	Matters disclosed


(a)	The Albemarle Group Warranties are given subject to and are qualified by, and the Liability of Albemarle Lithium in respect of any breach of any Albemarle Group Warranty or for any Claim or Loss by WLPL in respect of an Albemarle Group Warranty, will be reduced or extinguished (as the case may be) to the extent that the facts, matter or circumstance giving rise to the breach:


(i)	arise in connection with the transactions contemplated or authorised by this agreement or the Transaction Documents or the Kemerton Transaction Documents;


(ii)	have been fairly disclosed to WLPL in the information contained in the Disclosure Material;


(iii)	are within the actual knowledge of WLPL Individuals;


(iv)	would have been disclosed to WLPL had WLPL conducted searches in respect of AWPL, Albemarle Corporation or Albemarle Lithium (Identified Group) of records open to public inspection maintained by:


(A)	ASIC and which are available as a current company extract, or as part of the insolvency notices publication website only in respect of any member of the Identified Group;


(B)	the Australian Financial Security Authority on the PPS Register only in respect of any member of the Identified Group;


(C)	IP Australia only in respect of trade marks, patents and designs in respect of any member of the Identified Group;


(D)	the Western Australian Land Information Authority (or Landgate); and


(E)	the High Court of Australia, the Federal Court of Australia, the Supreme Court of Western Australia and the District Court of Western Australia only in respect of any member of the Identified Group,

in each case, at the Cut-off Time.

(b)

To the extent any of the Albemarle Group Warranties are given in relation to facts, matters or circumstances occurring prior to the commencement of the ALB Ownership Period, such Albemarle Group Warranties are given subject to and are qualified by Albemarle Lithium's awareness of the relevant matter as at the Execution Date (on the basis that Albemarle Lithium's awareness of the relevant matter is deemed to include such awareness as Albemarle Lithium would have had if Albemarle Lithium had made reasonable enquiries in relation to the matter for a person in the position of Albemarle Lithium as the owner or seller of the Kemerton Sale Interest).


10.4	No liability

Albemarle Lithium is not liable to WLPL for any Claim or Loss under this agreement:


(a)	to the extent that the Claim or Loss would not have arisen but for anything done or not done after Completion by WLPL or a Related Body Corporate of WLPL or any person acting, or purporting to act, on behalf of WLPL or a Related Body Corporate of WLPL including any failure by WLPL or a Related Body Corporate of WLPL after Completion to

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 23

seek to mitigate its Loss, except to the extent the things done or not done were required by law or a contractual obligation to a third party arising prior to Completion to be done or not done, as the case may be;


(b)	to the extent that the Claim or the Loss would not have arisen but for:


(i)	the enactment or amendment of any legislation or regulations;


(ii)	a change in the judicial or administrative interpretation of the law; or


(iii)	a change in the practice or policy of any Government Agency,

after the Execution Date, including legislation, regulations, amendments, interpretation, practice or policy that has a retrospective effect;


(c)	to the extent that WLPL recovers any amount in respect of the Claim or Loss or from the circumstances out of which the Claim or Loss arises (net of costs of the recovery) from any third party (including under any insurance policy);


(d)	to the extent that the Claim or Loss would not have arisen but for an act, omission, transaction or arrangement carried out by Albemarle Lithium with the express written approval of WLPL before Completion; or


(e)	except in relation to any Indemnity, if the Liability for that Claim or Loss is a contingent liability, unless and until the Liability is an actual liability and is due and payable.


10.5	Consequential Loss

Notwithstanding any other provision of this agreement and to the maximum extent permitted by law, neither Albemarle Lithium or WLPL are liable for or with respect to any Consequential Loss arising in connection with this agreement, except:


(a)	in the case of fraud of Albemarle Lithium or WLPL; or


(b)	if the Defaulting Party does not Complete within the period specified in clause 2.5(c) and the Non-Defaulting party has elected to terminate this agreement in accordance with clause 2.5(e).


10.6	Tax or other benefit

In calculating the Loss of WLPL in relation to a Claim under, in relation to or arising out of this agreement, there must be taken into account:


(a)	any benefit received by WLPL or any of its Related Bodies Corporate (including any Tax Relief obtained by WLPL or any of its Related Bodies Corporate and any amount by which any Tax or Duty for which WLPL or any of its Related Bodies Corporate is liable to be assessed or accountable is reduced or extinguished); and


(b)	any Tax that would be payable in relation to the payment to be made by Albemarle Lithium to WLPL in relation to the Loss under this agreement,

arising as a result of the subject matter of that Claim.


10.7	Disclaimer

WLPL acknowledges that, in considering whether or not to enter into this agreement and to purchase the Kemerton Sale Interest, it did so on the basis that all the information it received from or on behalf of Albemarle Lithium concerning the Kemerton Sale Interest (including without limitation the Disclosure Material) expressly excluded any reliance on information given to WLPL or statements or representations of Albemarle Lithium (whether verbal or written), other than the Albemarle Group Warranties. WLPL acknowledges that:


(a)	in entering into this agreement and proceeding to Completion, it did not rely and is not relying on any statement, representation, warranty, forecast, opinion or statement of belief made by or on behalf of Albemarle Lithium or its Representatives, other than the Albemarle Group Warranties;


(b)	it has had the opportunity to review the materials in the Disclosure Material;

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 24


(c)	it understands the risks and uncertainties of the mining and lithium industries and the general economic, regulatory and other risks that impact on or could impact on the Kemerton Sale Interest, and its results, operations, financial position and prospects;


(d)	any estimates, budgets or forecasts made, or opinion expressed, in relation to the prospects of the Kemerton Sale Interest (whether written or oral) were made or expressed to and accepted by WLPL, and this agreement is entered into, on the basis and condition that, except as provided for in the Albemarle Group Warranties:


(i)	neither Albemarle Lithium nor its Representatives have made nor makes any representation or warranty as to the accuracy or completeness of such estimate, budget, forecast or expression of opinion or that any such estimate, budget, forecast or expression of opinion will be achieved; and


(ii)	neither Albemarle Lithium nor its Representatives will be liable to WLPL or its Representatives in the event that, for whatever reason, such estimate, budget, forecast or expression of opinion is or becomes inaccurate, incomplete or misleading in any respect; and


(e)	neither Albemarle Lithium nor its Officers, agents, employees or advisers has made or makes any representation or warranty as to the accuracy or completeness of the disclosures regarding the Kemerton Sale Interest (including, the information, forecasts and statements of intent contained in the Disclosure Material), other than as contained in the Albemarle Group Warranties.


10.8	Exclusion of warranties and statutory actions

WLPL agrees that:

(a)

any Claim by WLPL must be based solely on and limited to express provisions of this agreement and, to the maximum extent permitted by law, all terms and conditions that may be implied by law or under statute in any jurisdiction and which are not expressly set out in this agreement are excluded (and to the extent that any terms and conditions of this type cannot be excluded then WLPL irrevocably waives all rights and remedies that it may have in relation to, and releases Albemarle Lithium from, any terms and conditions of this type); and

(b)

to the maximum extent permitted by law, WLPL will not make and waives any right it may have to make any Claim against Albemarle Lithium under the Australian Consumer Law (including sections 4, 18 and 29 of the Australian Consumer Law), the Corporations Act (including section 1041H of that Act), the Australian Securities and Investments Commission Act 2001 (Cth) or the corresponding provision of any other federal, state or territory legislation, or a similar provision under any applicable law, for any act or omission concerning the transactions contemplated by this agreement or for any statement or representation concerning any of those things.


10.9	Notice and time limits on Claims


(a)	WLPL must notify Albemarle Lithium in writing of any Claim it has against Albemarle Lithium under this agreement (including any breach of any Albemarle Group Warranty), setting out reasonable details of the facts, matters or circumstances giving rise to the Claim and the nature of the Claim as soon as practicable after it becomes aware of it.

(b)

WLPL may not make, and Albemarle Lithium is not liable for, any Claim for a breach of a Albemarle Group Warranty unless full details of the Claim have been notified to Albemarle Lithium within 15 months after the Completion Date. For the purposes of this clause, WLPL may give details of a Claim even if that Claim is contingent, or if WLPL is temporarily prevented from making a Claim under another clause of this agreement.


(c)	A Claim will not be enforceable against Albemarle Lithium and is to be taken for all purposes to have been withdrawn unless legal proceedings in connection with the Claim are commenced within 12 months after written notice of the Claim is served on WLPL in accordance with clause 10.9.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 25


10.10	Minimum amount of Claims

Albemarle Lithium is not liable for any Claim unless:


(a)	the amount finally agreed or determined to be payable in respect of that Claim or a series of related Claims exceeds US$1,000,000 (each such Claim, a Permitted Claim); and


(b)	the aggregate amount of all such Permitted Claims against Albemarle Lithium exceeds US$5,000,000,

in which event Albemarle Lithium is liable for the full amount of the Permitted Claims, and not just the amount in excess of US$1,000,000 or US$5,000,000 (as applicable).


10.11	Maximum liability


(a)	Subject to clause 10.11(b), Albemarle Lithium's total Liability for Loss (in aggregate) arising in respect of all Claims under or in connection with this agreement is limited in aggregate to the amount of US$240 million.


(b)	Albemarle Lithium's total Liability for Loss or damage arising in respect of a breach of an Albemarle Group Warranty in items 1, 8(a), 8(b) and 8(c) of Schedule 2 is limited in aggregate to US$480 million.


10.12	No double recovery

WLPL is not entitled to recover Loss or obtain payment, reimbursement, restitution or Indemnity more than once in respect of any one Liability or Loss.


10.13	Disclosure regarding Third Party Claims


(a)	WLPL must notify Albemarle Lithium if:


(i)	a Third Party Claim is made against WLPL; or


(ii)	WLPL becomes aware of any events, matters or circumstances (including any potential threatened Third Party Claim) against WLPL that may give rise to a Claim against Albemarle Lithium.


(b)	WLPL must include in a notice under clause 10.13(a) all relevant details (including the amount) then known to WLPL of:


(i)	the Third Party Claim; and


(ii)	the events, matters or circumstances giving rise or which may give rise to the Claim (as appropriate).


(c)	WLPL must also include in a notice given under clause 10.13(a) an extract of:


(i)	any part of a Demand that identifies the Liability or amount to which the Claim relates or other evidence of the amount of the Demand to which the Claim relates; and


(ii)	if available or relevant, any corresponding part of any adjustment sheet or other explanatory material issued by a Government Agency that specifies the basis for the Demand to which the Claim relates or other evidence of that basis.


(d)	WLPL must provide a copy of any document referred to in clause 10.13(c) to Albemarle Lithium as soon as practicable and, in any event, within 10 Business Days after the receipt of that document by WLPL.


(e)	WLPL must also, on an ongoing basis, keep Albemarle Lithium informed of all developments in relation to the Claim notified under clause 10.13(a).


10.14	Conduct in respect of Third Party Claims


(a)	Subject to Albemarle Lithium first accepting liability for and agreeing to indemnify WLPL without limit in relation to a Third Party Claim, WLPL will not:


(i)	accept, compromise or pay;


(ii)	agree to arbitrate, compromise or settle; or

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 26


(iii)	make any admission or take any action in relation to,

a Third Party Claim without Albemarle Lithium's prior written approval (which must not be unreasonably withheld or delayed).


(b)	Following receipt of a notice in respect of a Claim which arises from or involves a Third Party Claim, Albemarle Lithium may, by written notice to WLPL, assume the conduct of the defence of the Third Party Claim.


(c)	If Albemarle Lithium advises WLPL that Albemarle Lithium AWPL wishes to assume the conduct of the defence of the Third Party Claim:


(i)	provided that Albemarle Lithium provides WLPL with an Indemnity against all Liabilities which WLPL shall incur or which may result from the Third Party Claim, WLPL must take all action reasonably requested by Albemarle Lithium to avoid, contest, compromise or defend the Third Party Claim; and


(ii)	in conducting any proceedings or actions in respect of that Third Party Claim, Albemarle Lithium must:


(A)	act in good faith;


(B)	liaise with WLPL in relation to the defence of the Third Party Claim; and


(C)	provide WLPL with reasonable access to a copy of any notice, correspondence or other document relating to the Third Party Claim.


(d)	If Albemarle Lithium advises WLPL that Albemarle Lithium does not wish to assume the conduct of the defence of the Third Party Claim, then WLPL must:


(i)	act in good faith;


(ii)	liaise with Albemarle Lithium in relation to the defence of the Third Party Claim; and


(iii)	provide Albemarle Lithium with reasonable access to a copy of any notice, correspondence or other document relating to the Third Party Claim.


10.15	Recovery

Where WLPL is or may be entitled to recover from some other person any sum in respect of any matter or event which could give rise to a Claim, WLPL must co-operate with Albemarle Lithium and:


(a)	use all reasonable endeavours to recover that sum before making the Claim;


(b)	keep Albemarle Lithium at all times fully and promptly informed of the conduct of such recovery; and


(c)	reduce the amount of the Claim to the extent that sums are recovered.

If the recovery is delayed until after the Claim has been paid by Albemarle Lithium to WLPL, the recovered sum will be paid to Albemarle Lithium to the extent that the Claim would have been reduced under this clause 10.15 had the recovery occurred prior to the payment of the Claim by Albemarle Lithium and less the costs (including reasonable legal costs and disbursements of WLPL's lawyers) incurred by WLPL in relation to the Claim.


10.16	Insured Claim or loss

Albemarle Lithium will not be liable for any claim under or in relation to or arising out of this agreement including a breach of any Albemarle Group Warranty to the extent WLPL has the right to claim under any insurance policy held by WLPL to cover that claim, unless and until that claim has been denied in whole or partly by the relevant insurer, or if the claim is allowed by the relevant insurer, to the extent the claim is paid by the insurer.


10.17	Duty to mitigate

Each party is under a duty to act reasonably to mitigate its Loss in relation to any Claim and Albemarle Lithium's Liability in respect of any breach of any Albemarle Group Warranty or in

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 27

respect of an Indemnity will be reduced or extinguished (as the case may be) to the extent that WLPL has failed to so act.


10.18	Independent limitations

Each qualification and limitation in this clause 10 is to be construed independently of the others and is not limited by any other qualification or limitation.


10.19	Damages only remedy

If any of the Albemarle Group Warranties are incorrect, untrue or misleading, WLPL's only remedy is in damages and WLPL may not rescind, terminate or revoke the agreement.


10.20	No knowledge of breach

WLPL:


(a)	has not already formulated an intention to make a Albemarle Group Warranty Claim; and


(b)	does not presently have actual knowledge (except as disclosed in the Disclosure Material) of any circumstances which it believes may entitle it to make a Claim in respect of a Albemarle Group Warranty.


11.	WLPL Warranties


11.1	WLPL Warranties

WLPL represents and warrants to Albemarle Lithium that each of the following statements is true, accurate and complete and not misleading, as at the Execution Date and will be true, accurate and complete and not misleading as at the Completion Date:


(a)	it is duly incorporated and validly exists under the law of its place of incorporation;


(b)	the execution and delivery of this agreement has been properly authorised by all necessary corporate action of WLPL;


(c)	it has full corporate power and lawful authority to execute and deliver this agreement and to consummate and perform or cause to be performed its obligations under this agreement;


(d)	this agreement constitutes a legal, valid and binding obligation of WLPL enforceable in accordance with its terms;


(e)	the execution, delivery and performance by WLPL of this agreement does not or will not (with or without the lapse of time, the giving of notice or both) contravene, conflict with or result in a breach of or default under:


(i)	any provision of the constitution of WLPL;


(ii)	any material term or provision of any security arrangement (including any Security Interest), undertaking, agreement or agreement to which it is bound;


(iii)	any writ, order or injunction, judgement, or law to which it is a party or is subject or by which it is bound;


(f)	no Insolvency Event has occurred in relation to WLPL; and


(g)	so far as it is aware, there are no facts, matters or circumstances which give any person the right to apply to liquidate or wind up WLPL.


11.2	Reliance

WLPL acknowledges that Albemarle Lithium has entered into this agreement in reliance on the WLPL Warranties.


11.3	Independent WLPL Warranties

Each WLPL Warranty must be construed independently and is not limited by reference to another WLPL Warranty.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 28


11.4	Survival

The WLPL Warranties survive Completion of this agreement.


12.	MRL Warranties


12.1	MRL Warranties

MRL represents and warrants to Albemarle Lithium that each of the following statements is true, accurate and complete and not misleading, as at the Execution Date and will be true, accurate and complete and not misleading as at the Completion Date:


(a)	it is duly incorporated and validly exists under the law of its place of incorporation;


(b)	the execution and delivery of this agreement has been properly authorised by all necessary corporate action of MRL;


(c)	it has full corporate power and lawful authority to execute and deliver this agreement and to consummate and perform or cause to be performed its obligations under this agreement;


(d)	this agreement constitutes a legal, valid and binding obligation of MRL enforceable in accordance with its terms;


(e)	the execution, delivery and performance by MRL of this agreement does not or will not (with or without the lapse of time, the giving of notice or both) contravene, conflict with or result in a breach of or default under:


(i)	any provision of the constitution of MRL;


(ii)	any material term or provision of any security arrangement (including any Security Interest), undertaking, agreement or agreement to which it is bound;


(iii)	any writ, order or injunction, judgement, or law to which it is a party or is subject or by which it is bound;


(f)	no Insolvency Event has occurred in relation to MRL; and


(g)	so far as it is aware, there are no facts, matters or circumstances which give any person the right to apply to liquidate or wind up MRL.


12.2	Reliance

MRL acknowledges that Albemarle Lithium has entered into this agreement in reliance on the MRL Warranties.


12.3	Independent MRL Warranties

Each MRL Warranty must be construed independently and is not limited by reference to another MRL Warranty.


12.4	Survival

The MRL Warranties survive Completion of this agreement.


12.5	Indemnity

MRL indemnifies Albemarle Lithium against any Loss which Albemarle Lithium may incur to the extent caused by any breach of the MRL Warranties.


13.	Albemarle Corporation Warranties


13.1	Albemarle Corporation Warranties

Albemarle Corporation represents and warrants to WLPL that each of the following statements is true, accurate and complete and not misleading, as at the Execution Date and will be true, accurate and complete and not misleading as at the Completion Date:

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 29


(a)	it is duly incorporated and validly exists under the law of its place of incorporation;


(b)	the execution and delivery of this agreement has been properly authorised by all necessary corporate action of Albemarle Corporation;


(c)	it has full corporate power and lawful authority to execute and deliver this agreement and to consummate and perform or cause to be performed its obligations under this agreement;


(d)	this agreement constitutes a legal, valid and binding obligation of Albemarle Corporation enforceable in accordance with its terms;


(e)	the execution, delivery and performance by Albemarle Corporation of this agreement does not or will not (with or without the lapse of time, the giving of notice or both) contravene, conflict with or result in a breach of or default under:


(i)	any provision of the constitution of Albemarle Corporation;


(ii)	any material term or provision of any security arrangement (including any Security Interest), undertaking, agreement or agreement to which it is bound;


(iii)	any writ, order or injunction, judgement, or law to which it is a party or is subject or by which it is bound;


(f)	no Insolvency Event has occurred in relation to Albemarle Corporation; and


(g)	so far as it is aware, there are no facts, matters or circumstances which give any person the right to apply to liquidate or wind up Albemarle Corporation.


13.2	Reliance

Albemarle Corporation acknowledges that WLPL has entered into this agreement in reliance on the Albemarle Corporation Warranties.


13.3	Independent Albemarle Corporation Warranties

Each Albemarle Corporation Warranty must be construed independently and is not limited by reference to another Albemarle Corporation Warranty.


13.4	Survival

The Albemarle Corporation Warranties survive Completion of this agreement.


13.5	Indemnity

Albemarle Corporation indemnifies WLPL against any Loss which WLPL may incur to the extent caused by any breach of the Albemarle Corporation Warranties.


14.	Confidentiality


14.1	Confidentiality obligation

Each party (Information Recipient):


(a)	may use Confidential Information of a Disclosing Party only for the purposes of this agreement and the transactions contemplated by this agreement; and


(b)	must keep confidential all Confidential Information of each Disclosing Party except for disclosures permitted under clause 14.2.


14.2	Exceptions

Clause 14.1 does not apply to an Information Recipient to the extent that the relevant disclosure or use:


(a)	has the prior written consent of the Disclosing Party;


(b)	is a media announcement in the form agreed between Albemarle Lithium and WLPL in accordance with clause 14.4;

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 30


(c)	is to its Officers, employees, professional advisers, consultants, financiers and Related Bodies Corporate to whom (and to the extent to which) it is necessary to disclose the information in order to properly perform its obligations under this agreement;


(d)	is necessary to enforce its rights or to defend any Claim or Action under this agreement or for use in legal proceedings regarding this agreement or the transaction contemplated by this agreement;


(e)	is necessary to obtain any consent or approval contemplated by this agreement; or

(f)

is necessary to comply with any applicable law, legal process, any order or rule of any Government Agency, the rules of a recognised stock exchange or in a prospectus or other document with statutory content requirements prepared for a transaction involving a party, after first consulting with the other party to the extent practicable having regard to those obligations about the form and content of the disclosure,

and provided that, before disclosure:


(g)	in the case of the Information Recipient's (and their Related Body Corporate's) Officers and employees, those persons have been directed by the Information Recipient to keep confidential all Confidential Information of the Disclosing Party; and


(h)	in the case of other persons (except those disclosures under clauses 14.2(b), 14.2(d), 14.2(e) and 14.2(f)), those persons have agreed in writing with the Information Recipient to comply with substantially the same obligations in respect of Confidential Information of the Disclosing Party as those imposed on the Information Recipient under this agreement,

(each a Direction).


14.3	Information Recipient's obligations

An Information Recipient must:


(a)	ensure that each person to whom it discloses Confidential Information of a Disclosing Party under clause 14.2 complies with its Direction; and


(b)	notify the Disclosing Party of, and take all reasonable steps to prevent or stop, any suspected or actual breach of a Direction.


14.4	Media announcement


(a)	No party may, before or after Completion, make or send a public announcement, communication or circular concerning this agreement or the transactions referred to in this agreement unless it has first obtained the written consent of the other party, which consent is not to be unreasonably withheld or delayed.

(b)

Clause 14.4(a) does not apply to a public announcement, communication or circular required by law or the requirements of a regulatory body (including the ASX and any other relevant stock exchange), if the party required to make or send it has, if practicable, first consulted and taken into account the reasonable requirements of the other parties, provided that the party must only disclose such information necessary to comply with the requirements of law or the applicable regulatory body.


15.	WLPL Guarantee and indemnity


15.1	Consideration

MRL acknowledges that Albemarle Lithium is acting in reliance on MRL incurring obligations and giving rights under this WLPL Guarantee.


15.2	WLPL Guarantee


(a)	MRL unconditionally and irrevocably guarantees to Albemarle Lithium the due and punctual performance by WLPL of all its obligations under this agreement, including each obligation to pay money (the WLPL Guaranteed Obligations).

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 31


(b)	If WLPL fails to perform the WLPL Guaranteed Obligations in full and on time, MRL agrees to comply with the WLPL Guaranteed Obligations on demand from Albemarle Lithium. A demand may be made whether or not Albemarle Lithium has made demand on WLPL.


15.3	Indemnity


(a)	MRL:

(i)

unconditionally and irrevocably indemnifies Albemarle Lithium against any Loss or Claim which may be incurred or sustained by Albemarle Lithium arising from or in relation to any default or delay by WLPL in the due and punctual performance of any of the WLPL Guaranteed Obligations, including any Loss or Claim incurred or sustained by Albemarle Lithium arising from or in relation to the enforcement of this WLPL Guarantee; and


(ii)	agrees to pay amounts due under this clause 15.3 on demand from Albemarle Lithium.


(b)	Albemarle Lithium need not incur expense or make payment before enforcing this right of indemnity.


15.4	Extent of WLPL Guarantee and indemnity


(a)	MRL will be responsible to Albemarle Lithium in respect of the WLPL Guaranteed Obligations in the same manner as if MRL was WLPL under this agreement.


(b)	The rights given to Albemarle Lithium pursuant to this WLPL Guarantee, and MRL’s liability under it, are not affected by any act, omission or other thing which might otherwise affect it in law or in equity including one or more of the following:


(i)	an Insolvency Event affecting a person or the death of a person;


(ii)	a change in the constitution, membership, or partnership of a person;


(iii)	the partial performance of WLPL Guaranteed Obligations;


(iv)	the WLPL Guaranteed Obligations not being enforceable at any time against any person other than MRL;


(v)	Albemarle Lithium granting any time or other indulgence or concession to, compounding or compromising with, or wholly or partially releasing WLPL or MRL of an obligation;


(vi)	any novation of a right of Albemarle Lithium;


(vii)	acquiescence, delay, acts, omissions or mistakes on the part of Albemarle Lithium; or


(viii)	the occurrence of any other thing which might otherwise release, discharge or affect the obligations of MRL under this agreement, except to the extent that that thing also releases, discharges or affects the obligations of WLPL to Albemarle Lithium.


15.5	Payments

MRL agrees to make payments under this clause 15:


(a)	in full without set-off or counterclaim, and without any deduction in respect of Taxes unless prohibited by law; and


(b)	in the currency in which the payment is due, and otherwise in Australian dollars, in Immediately Available Funds.


15.6	Continuing guarantee and indemnity

This clause 15:


(a)	extends to cover this agreement as amended, varied or replaced, whether with or without the consent of MRL;

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 32


(b)	is a principal obligation and is not to be treated as ancillary or collateral to another right or obligation;


(c)	is independent of and not in substitution for or affected by any other security interest or guarantee or other document or agreement which Albemarle Lithium may hold concerning the WLPL Guaranteed Obligations; and

(d)

is a continuing guarantee and indemnity despite any intervening payment, settlement or other thing and extends to all of WLPL’s obligations arising from or in relation to this agreement and, despite Completion, remains in full force and effect for so long as WLPL has any liability or obligation to Albemarle Lithium under this agreement and until all of those liabilities or obligations have been fully discharged.


15.7	Enforcement against MRL

MRL waives any right it has of first requiring Albemarle Lithium to commence proceedings or enforce any other right against WLPL or any other person before claiming from MRL under this WLPL Guarantee.


15.8	Limitation

In no event will MRL's Liability under this agreement exceed the amount that would have been recoverable from WLPL in respect of the same subject matter.


16.	Albemarle Guarantee and indemnity


16.1	Consideration

Albemarle Corporation acknowledges that WLPL is acting in reliance on Albemarle Corporation incurring obligations and giving rights under this Albemarle Guarantee.


16.2	Albemarle Guarantee


(a)	Albemarle Corporation unconditionally and irrevocably guarantees to WLPL the due and punctual performance by Albemarle Lithium of all its obligations under this agreement, including each obligation to pay money (the Albemarle Guaranteed Obligations).


(b)	If Albemarle Lithium fails to perform the Albemarle Guaranteed Obligations in full and on time, Albemarle Corporation agrees to comply with the Albemarle Guaranteed Obligations on demand from WLPL. A demand may be made whether or not WLPL has made demand on Albemarle Lithium.


16.3	Indemnity


(a)	Albemarle Corporation:

(i)

unconditionally and irrevocably indemnifies WLPL against any Loss or Claim which may be incurred or sustained by WLPL arising from or in relation to any default or delay by Albemarle Lithium in the due and punctual performance of any of the Albemarle Guaranteed Obligations, including any Loss or Claim incurred or sustained by WLPL arising from or in relation to the enforcement of this Albemarle Guarantee; and


(ii)	agrees to pay amounts due under this clause 16.3 on demand from WLPL.


(b)	WLPL need not incur expense or make payment before enforcing this right of indemnity.


16.4	Extent of Albemarle Guarantee and indemnity


(a)	Albemarle Corporation will be responsible to WLPL in respect of the Albemarle Guaranteed Obligations in the same manner as if Albemarle Corporation was Albemarle Lithium under this agreement.


(b)	The rights given to WLPL pursuant to this Albemarle Guarantee, and Albemarle Corporation’s liability under it, are not affected by any act, omission or other thing which might otherwise affect it in law or in equity including one or more of the following:

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 33


(i)	an Insolvency Event affecting a person or the death of a person;


(ii)	a change in the constitution, membership, or partnership of a person;


(iii)	the partial performance of the Albemarle Guaranteed Obligations;


(iv)	the Albemarle Guaranteed Obligations not being enforceable at any time against any person other than Albemarle Corporation;


(v)	WLPL granting any time or other indulgence or concession to, compounding or compromising with, or wholly or partially releasing Albemarle Lithium or Albemarle Corporation of an obligation;


(vi)	any novation of a right of WLPL;


(vii)	acquiescence, delay, acts, omissions or mistakes on the part of WLPL; or


(viii)	the occurrence of any other thing which might otherwise release, discharge or affect the obligations of Albemarle Corporation under this agreement, except to the extent that that thing also releases, discharges or affects the obligations of Albemarle Lithium to WLPL.


16.5	Payments

Albemarle Corporation agrees to make payments under this clause 16:


(a)	in full without set-off or counterclaim, and without any deduction in respect of Taxes unless prohibited by law; and


(b)	in the currency in which the payment is due, and otherwise in Australian dollars, in Immediately Available Funds.


16.6	Continuing guarantee and indemnity

This clause 16:


(a)	extends to cover this agreement as amended, varied or replaced, whether with or without the consent of Albemarle Corporation;


(b)	is a principal obligation and is not to be treated as ancillary or collateral to another right or obligation;


(c)	is independent of and not in substitution for or affected by any other security interest or guarantee or other document or agreement which WLPL may hold concerning the Albemarle Guaranteed Obligations; and

(d)

is a continuing guarantee and indemnity despite any intervening payment, settlement or other thing and extends to all of Albemarle Lithium's obligations arising from or in relation to this agreement and, despite Completion, remains in full force and effect for so long as Albemarle Lithium has any liability or obligation to WLPL under this agreement and until all of those liabilities or obligations have been fully discharged.


16.7	Enforcement against Albemarle Corporation

Albemarle Corporation waives any right it has of first requiring WLPL to commence proceedings or enforce any other right against Albemarle Lithium or any other person before claiming from Albemarle Corporation under this Albemarle Guarantee.


16.8	Limitation

In no event will Albemarle Corporation's Liability under this agreement exceed the amount that would have been recoverable from Albemarle Lithium in respect of the same subject matter.


17.	Dispute resolution


17.1	Dispute Notice


(a)	If a Dispute arises then either party may give to the other party a Dispute Notice.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 34


(b)	Within 14 days after service of a Dispute Notice, the parties’ Representatives must meet at least once and confer in good faith to attempt to resolve the Dispute.

(c)

If the parties' Representatives cannot resolve the Dispute, then each party shall within 21 days after service of a Dispute Notice refer the Dispute to their respective Chief Executive Officers to settle the Dispute. The Chief Executive Officers must meet within 14 days of the Dispute being referred to them (or such longer period agreed in writing) and confer in good faith until such time that they resolve the Dispute.


(d)	If the Chief Executive Officers have met but not resolved the Dispute, or otherwise fail to meet, within 2 months from the date the Dispute was referred to them (or such longer period agreed in writing) either party may commence legal proceedings.


17.2	Continuance of Contract


(a)	Compliance with this clause 17 is a condition precedent to a party being entitled to commence legal proceedings in any court in respect of a Dispute except for proceedings seeking urgent injunctive relief.


(b)	Prior to the resolution of a Dispute, the parties must continue to perform their respective obligations in this agreement insofar as those obligations are not the subject matter of the Dispute.


18.	Duty, costs and expenses


18.1	Duty

All Duty which may be payable on or in connection with this agreement and any instrument executed under or in connection with or any transaction evidenced by this agreement is payable by Albemarle Lithium.


18.2	Costs and expenses

Subject to clause 18.1, each party must pay its own costs and expenses of negotiating, preparing, signing, delivering and registering this agreement and any other agreement or document entered into or signed under this agreement (including each novation or assignment agreement or agreement).


18.3	Costs of performance

A party must bear the costs and expenses of performing its obligations under this agreement, unless otherwise provided in this agreement.


19.	GST


19.1	Interpretation

In this clause 19:


(a)	a reference to a GST liability or Input Tax Credit of a party includes a GST liability or Input Tax Credit of the Representative Member of any GST Group of which that party is a Member; and


(b)	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 19.


19.2	GST Gross Up of Taxable Supplies


(a)	Any consideration or amount payable under this agreement, including any non-monetary consideration (as reduced in accordance with clause 19.2(e) if required) (Consideration) is exclusive of GST.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 35


(b)	If GST is or becomes payable on a Supply made by a party (Supplier) under or in connection with this agreement, an additional amount (Additional Amount) is payable by the party providing the Consideration for the Supply (Recipient) equal to the amount of GST payable on that Supply as calculated by the Supplier in accordance with the GST Law.


(c)	Subject to clause 19.2(f)(iii), the Additional Amount payable under clause 19.2(b) is payable without set off, demand or deduction at the same time and in the same manner as the Consideration for the Supply, and the Supplier must provide the Recipient with a Tax Invoice as a pre-condition to payment of the Additional Amount.


(d)	If for any reason (including, without limitation, the occurrence of an Adjustment Event) the Additional Amount paid under this agreement (taking into account any Decreasing or Increasing Adjustments in relation to the Supply) varies from the Supplier's actual GST liablity on that Supply:


(i)	the Supplier must provide a refund or credit to the Recipient, or the Recipient must pay a further amount to the Supplier, as appropriate;


(ii)	the refund, credit or further amount (as the case may be) will be calculated by the Supplier in accordance with the GST Law; and


(iii)	the Supplier must issue to the Recipient an Adjustment Note within 10 Business Days of becoming aware of any Adjustment Event. Any refund or credit must accompany such notification or the Recipient must pay any further amount within 7 days after receiving such notification, as appropriate.


(e)	Despite any other provision in this agreement:

(i)

if an amount payable under or in connection with this agreement (whether by way of reimbursement, indemnity or otherwise) is calculated by reference to an amount incurred by a party, whether by way of cost, expense, outlay, disbursement or otherwise (Amount Incurred), the amount payable must be reduced by the amount of any Input Tax Credit to which that party is entitled in respect of that Amount Incurred; and


(ii)	no Additional Amount is payable under clause 19.2(b) in respect of a Supply made under or in connection with this agreement to which section 84-5 of the GST Act applies.


(f)	The parties acknowledge and agree that:


(i)	the Supply of the Kemerton Sale Interest by Albemarle Lithium to WLPL and the undertakings by AWPL to WLPL in respect of the Kemerton Incomplete Infrastructure in accordance with clause 2 of Schedule 15 of the Wodgina ASSSA will be Taxable Supplies for the purposes of the GST Law;


(ii)	on Completion:


(A)	Albemarle Lithium will issue a Tax Invoice to WLPL for the supply of the Kemerton Sale Interest; and


(B)	AWPL will issue, or will procure that Albemarle Lithium issues, a Tax Invoice for the supply of the Kemerton Incomplete Infrastructure in accordance with clause 2 of Schedule 15 of the Wodgina ASSSA; and


(iii)	the Additional Amount payable in respect of the Supplies noted in clause 19.2(f)(ii) must be paid by the Recipient to the Supplier no later than the 19th day of the month following the end of the Tax Period in which the Supplier issues a Tax Invoice to the Recipient for each of those Supplies.


20.	Foreign resident capital gains withholding


20.1	Application of foreign resident capital gains withholding

Clauses 20.3 to 20.6 do not apply if:

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 36


(a)	the sale of the Kemerton Sale Interest is a transaction that is excluded under section 14-215(1); or


(b)	Albemarle Lithium gives to WLPL a Clearance Certificate for a period covering the Completion Date on or before the date that is 5 Business Days before Completion.


20.2	Clearance Certificate given by Albemarle Lithium

If clause 20.1(b) applies, WLPL acknowledges and agrees that:


(a)	WLPL is not required to pay a Withholding Amount; and


(b)	WLPL may not withhold a Withholding Amount from the Kemerton Consideration payable on Completion to Albemarle Lithium.


20.3	WLPL entitled to withhold

If WLPL is required to pay an amount to the Commissioner under section 14-200, WLPL is entitled to withhold from the Kemerton Consideration payable on Completion an amount equal to the Withholding Amount.


20.4	WLPL's obligation to pay Withholding Amount to the Commissioner

At Completion, WLPL must either:


(a)	give to Albemarle Lithium a copy of a receipt showing that the Withholding Amount has been paid to the Commissioner before Completion; or


(b)	produce a cheque, drawn on a Bank, payable to the Commissioner for an amount equal to the Withholding Amount.


20.5	Payment of the Withholding Amount after Completion

If clause 20.4(b) applies, WLPL must:


(a)	pay the Withholding Amount to the Commissioner, by mailing or delivering the cheque to the Commissioner, before the end of the first Business Day after Completion; and


(b)	provide to Albemarle Lithium within 2 Business Days after Completion, evidence showing that the Withholding Amount has been paid to the Commissioner.


20.6	Discharge of liability

On the payment of the Withholding Amount to the Commissioner, WLPL is discharged from all liability to pay the Withholding Amount to Albemarle Lithium.


20.7	Definitions and interpretation

For the purposes of this clause 19.2:


(a)	all section references are to those provisions of Schedule 1 to the Taxation Administration Act 1953 (Cth);


(b)	Clearance Certificate means a certificate issued by the Commissioner under section 14-220 that applies to Albemarle Lithium and is for a period covering the time that the transaction is entered into;


(c)	Commissioner means the Commissioner of Taxation of Australia; and


(d)	Withholding Amount means an amount that WLPL is required to pay to the Commissioner, determined in accordance with section 14-200(3).


21.	PPS Act registration


21.1	Protecting interests


(a)	The parties agree to do all things as may be reasonably necessary including:


(i)	providing information and executing or ensuring the execution of documents; and

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 37


(ii)	ensuring that relevant third parties do all things reasonably necessary,

to protect the interests of a party to this agreement as a result of the application of the PPS Law to this agreement or the transactions the subject of this agreement, including, without limitation to ensure that a PPS Security Interest created under or in connection with this agreement is enforceable, perfected in accordance with the PPS Law and otherwise effective.


(b)	A grantor of a PPS Security Interest under or in connection with this agreement consents to the registration of the PPS Security Interest on any relevant register and any notification made or given in respect of that PPS Security Interest.


21.2	Notices

A party need not give any notice under the PPS Law (including notice of a verification statement) to the other party unless the notice is required by the PPS Law and cannot be excluded.


22.	Notices


22.1	General

A notice, demand, certification, process or other communication relating to this agreement must be in writing in English and may be given by an agent of the sender.


22.2	How to give a communication

In addition to any other lawful means, a communication may be given by being:


(a)	personally delivered;


(b)	left at the party’s current delivery address for notices;


(c)	sent to the party’s current postal address for notices by pre-paid ordinary mail or, if the address is outside Australia, by pre-paid airmail;


(d)	sent by email to the party’s current email address for notices; or


(e)	sent by such other form of communication as the parties may from time to time agree.


22.3	Particulars for delivery


(a)	The particulars for delivery of notices are initially:


(i)	in the case of WLPL:

Delivery address: 1 Sleat Road

APPLECROSS, WA 6153

Postal address: Locked Bag 3, Canning Bridge

APPLECROSS, WA 6153

Email: cosec@mineralresources.com.au

Attention: Company Secretary


(ii)	in the case of AWPL:

Delivery address: 4250 Congress Street, Suite 900, Charlotte, NC 28209

Postal address: 4250 Congress Street, Suite 900, Charlotte, NC 28209

Email: legal_notices@albemarle.com

Attention: General Counsel


(iii)	in the case of MRL:

Delivery address: 1 Sleat Road

APPLECROSS, WA 6153

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 38

Postal address: Locked Bag 3, Canning Bridge

APPLECROSS, WA 6153

Email: cosec@mineralresources.com.au

Attention: Company Secretary


(iv)	in the case of Albemarle Corporation:

Delivery address: 4250 Congress Street, Suite 900, Charlotte, NC 28209

Postal address: 4250 Congress Street, Suite 900, Charlotte, NC 28209

Email: legal_notices@albemarle.com

Attention: General Counsel


(v)	in the case of Albemarle Lithium:

Delivery address: 4250 Congress Street, Suite 900, Charlotte, NC 28209

Postal address: 4250 Congress Street, Suite 900, Charlotte, NC 28209

Email: legal_notices@albemarle.com

Attention: General Counsel


(b)	Each party may change its particulars for delivery of notices by notice to each other party.


22.4	Communications by post

Subject to clause 22.7, a communication is given if posted:


(a)	within Australia to an Australian postal address, three (3) Business Days after posting; or


(b)	outside of Australia to an Australian postal address or within Australia to an address outside of Australia, ten (10) Business Days after posting.


22.5	Communications by email


(a)	Subject to clause 22.7, a communication is given if sent by email, upon the earlier of:


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


(ii)	the time that the email is first opened or read by the intended recipient, or an employee or Officer of the intended recipient; and


(iii)	four (4) hours after the time the email is sent (as recorded on the device from which the sender sent the email) unless the sender receives, within that four (4) hour period, an automated message that the email has not been delivered.


(b)	Despite anything to the contrary in this agreement, a notice given under clause 2.6 must not be given by email.


22.6	Process service

Any process or other document relating to litigation, administrative or arbitral proceedings in relation to this agreement may be served by any method contemplated by this clause 22 or in accordance with any applicable law.


22.7	After hours communications

If a communication is given:


(a)	after 5.00 pm in the place of receipt; or


(b)	on a day which is a Saturday, Sunday or bank or public holiday in the place of receipt,

it is taken to have been given at 9.00am on the next day which is not a Saturday, Sunday or bank or public holiday in that place.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 39


23.	General


23.1	Consents and approvals

Except as expressly provided in this agreement, a party may conditionally or unconditionally in its absolute discretion give or withhold any consent or approval under this agreement.


23.2	Entire agreement


(a)	Other than the Break Fee Letter, this agreement is the entire agreement between the parties about its subject matter and replaces all previous agreements, understandings, representations and warranties about that subject matter.


(b)	Each party represents and warrants that it has not relied on any representations or warranties about the subject matter of this agreement except as expressly provided in this agreement.


23.3	Further assurances

Except as expressly provided in this agreement, each party must, at its own expense, do all things reasonably necessary to give full effect to this agreement and the matters contemplated by it.


23.4	Rights cumulative

Except as expressly provided in this agreement, the rights of a party under this agreement are cumulative and are in addition to any other rights of that party.


23.5	Survival and merger


(a)	No term of this agreement merges on completion of any transaction contemplated by this agreement.


(b)	Clauses 14, 18, 19, 22 and 23 survive termination or expiry of this agreement together with any other term which by its nature is intended to do so.


23.6	Variation

No variation of this agreement is effective unless made in writing and signed by each party.


23.7	Waiver


(a)	No waiver of a right or remedy under this agreement is effective unless it is in writing and signed by the party granting it. It is only effective in the specific instance and for the specific purpose for which it is granted.


(b)	A single or partial exercise of a right or remedy under this agreement does not prevent a further exercise of that or of any other right or remedy.


(c)	Failure to exercise or delay in exercising a right or remedy under this agreement does not operate as a waiver or prevent further exercise of that or any other right or remedy.


23.8	Governing law


(a)	This agreement is governed by the laws of Western Australia.


(b)	Each party irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of Western Australia including, for the avoidance of doubt, the Federal Court of Australia sitting in Western Australia.


23.9	Counterparts

This agreement may be executed in any number of counterparts and all counterparts taken together constitute one document.


23.10	Default interest


(a)	If a party fails to pay any amount payable under this agreement on the due date for payment, that party must pay interest on the amount unpaid at the higher of:

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 40


(i)	the Interest Rate; or


(ii)	the rate of interest per annum (if any) fixed or payable under any judgment or other thing into which the liability to pay the amount becomes merged.


(b)	The interest payable under clause 23.10(a):


(i)	accrues from day to day from and including the due date for payment up to the actual date of payment, before and, as an additional and independent obligation, after any judgment or other thing into which the liability to pay the amount becomes merged; and


(ii)	may be capitalised by the person to whom it is payable at monthly intervals.


(c)	The right to require payment of interest under this clause is without prejudice to any other rights the non-defaulting party may have against the defaulting party at law or in equity.


23.11	Interest payable on overdue amounts

If any party fails to pay the whole or part of any amount payable under this agreement on or before the due date, such defaulting party must, on demand, pay to the party entitled to receive payment interest on such unpaid amount at the Interest Rate calculated on daily balances, and capitalised monthly, from (and including) the due date for payment to (but excluding) the date of actual payment.


23.12	Invalidity


(a)	If a provision of this agreement or a right or remedy of a party under this agreement is invalid or unenforceable in a particular jurisdiction:


(i)	it is read down or severed in that jurisdiction only to the extent of the invalidity or unenforceability; and


(ii)	it does not affect the validity or enforceability of that provision in another jurisdiction or the remaining provisions in any jurisdiction.


(b)	This clause is not limited by any other provision of this agreement in relation to severability, prohibition or enforceability.


23.13	Operation of indemnities


(a)	Each Indemnity contained in this agreement is an additional, separate and independent obligation and no one Indemnity limits the generality of another Indemnity.


(b)	Each Indemnity contained in this agreement survives Completion under this agreement.


23.14	Payments

Except as expressly provided for in this agreement, a payment which is required to be made under this agreement must be in cash or by bank cheque or in other Immediately Available Funds and in Australian dollars.


23.15	Relationship

Except as expressly provided in this agreement:


(a)	nothing in this agreement is intended to constitute a relationship of employment, trust, agency or partnership or any other fiduciary relationship between the parties; and


(b)	no party has authority to bind any other party.


23.16	Assignment, novation and other dealings


(a)	Subject to clause 23.16(b), a party must not assign or novate this agreement or otherwise deal with the benefit of it or a right under it, or purport to do so, without the prior written consent of each other party which consent may be withheld at the absolute discretion of the party from whom consent is sought.


(b)	Clause 23.16(a) does not apply to any benefit or right under a Kemerton Transaction Document from Completion.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 41


23.17	Third party rights

Except as expressly provided in this agreement:


(a)	each person who executes this agreement does so solely in its own legal capacity and not as agent or trustee for or a partner of any other person; and


(b)	only those persons who execute this agreement have a right or benefit under it.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 42

Schedule 1 – Dictionary


1.	Dictionary

In this agreement:

Albemarle Corporation Warranties means the representations and warranties set out in clause 13.1.

Albemarle Kemerton ASA means the asset sale agreement dated on or about the Execution Date between AWPL and Albemarle Lithium for the transfer of the Albemarle Kemerton Interest from Albemarle Lithium to AWPL.

Albemarle Group means Albemarle Corporation and Albemarle Lithium.

Albemarle Group Warranty means the warranties in Schedule 2.

Albemarle Guarantee means the guarantee and indemnity in clause 16.

Albemarle Guaranteed Obligations has the meaning given in clause 16.2(a).

Albemarle Kemerton Interest means a 60% legal and beneficial interest as tenant in common in the Kemerton Assets.

Albemarle Lithium means Albemarle Lithium Pty Ltd ACN 618 095 471.

ALB Ownership Period means the period from 13 December 2018 to Completion.

Amount Incurred has the meaning given in clause 19.2(e)(i).

Commissioned has the meaning given in Schedule 15 of the Wodgina ASSSA.

Completion means completion of the sale and purchase of the Kemerton Sale Interest under clause 5.

Completion Date means the date of completion of the Wodgina ASSSA.

Condition means a condition precedent set out in clause 2.1.

Consideration has the same meaning as it does in clause 19.2(a).

Corporations Act means the Corporations Act 2001 (Cth).

Counterparty means a counterparty to a Kemerton Contract.

Cut-off Time means 10.00am (Perth time) on 30 July 2019.

Defaulting Party has the meaning given in clause 2.5(b).

Disclosure Letter means the letter from Albemarle Lithium addressed to WLPL and dated and delivered to it on or prior to the Execution Date, disclosing matters in relation to the Albemarle Group Warranties, in the form agreed between Albemarle Lithium and WLPL and includes all of its schedules and annexures (as relevant).

Disclosure Material means the written information relating to the Kemerton Sale Interest provided to WLPL on or prior to the Execution Date, comprising:


(a)	all written information and data provided or communicated to a WLPL Individual (whether by electronic mail, portable electronic advice or in any other manner) by Representatives of Albemarle Lithium (directly or indirectly) prior to the Cut-off Time;


(b)	the Disclosure Letter; and


(c)	this agreement, including the schedules and annexures thereto, and all documents referred to therein.

Execution Date means the date that the last party executes this agreement.

Greenbushes Concentrate means spodumene concentrate from the Greenbushes mine (located in Greenbushes, Western Australia and owned by Talison Lithium Pty Ltd).

Indemnity means an indemnity given under this agreement.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 43

Information Recipient has the meaning given in clause 14.1.

Interim Period means the period from (and including) the Execution Date up to Completion or the earlier termination of this agreement.

Kemerton Access Licence means a licence granted by Albemarle Lithium to WLPL and AWPL to use the access rights accociated with the Kemerton Easement on terms to be agreed by the parties acting reasonably (and in accordance with the principles in clause 4.5(c)(ii)).

Kemerton Approvals means those approvals specified in Schedule 5 and any licence, consent, approval, permit, registration, accreditation, certification or other authorisation (or any variations thereof) given or issued by any Government Agency or any other person held by Albemarle Lithium which relates to the Kemerton Incomplete Infrastructure or the Kemerton Sale Interest.

Kemerton Assets means, to the extent title is held by Albemarle Lithium, and in existence and capable of passing at Completion by delivery at the places where it is located, on the Completion Date any part of the:


(a)	Kemerton Train 1 and 2 Infrastructure; and


(b)	Kemerton Shared Assets,

but excludes the Kemerton Excluded Assets.

Kemerton Consideration means the aggregate of the consideration for each part of the Kemerton Assets which Albemarle Lithium holds (or will hold) title to at Completion and is (or will be) in existence at Completion and capable of passing by delivery at the places where it is located, as determined on the date that is 5 Business Days prior to the Completion Date in accordance with Schedule 6 (exclusive of GST).

Kemerton Construction Contracts means any agreements entered into by Albemarle Lithium in respect of the construction and Commissioning of the Kemerton Incomplete Infrastructure, including any such agreements entered into during the Interim Period.

Kemerton Construction Equipment means all plant, assets and equipment used exclusively in connection with the construction of the Kemerton Incomplete Infrastructure (but not operation of that infrastructure once complete), including any mobile vehicles and equipment used for such construction.

Kemerton Contracts means each of the agreements specified in Schedule 3 and any additional agreements entered into by Albemarle Lithium in respect of the Kemerton Project during the Interim Period but excluding the Kemerton Construction Contracts.

Kemerton Easement means the deed of easement dated 13 December 2018 granted by LandCorp in favour of Albemarle Lithium over that part of Lot 253 on Deposited Plan 411027 comrpised in Certificate of Title Volume 2945 Folio 681 which is marked as 'A' on Deposited Plan 415498.

Kemerton Excluded Assets means the:


(a)	Kemerton Lease;


(b)	Kemerton Easement


(c)	Kemerton Approvals;


(d)	Kemerton Contracts and Kemerton Construction Contracts;


(e)	Kemerton Intellectual Property Rights;


(f)	Kemerton Construction Equipment;


(g)	Kemerton Expansion Capacity; and


(h)	any other assets, plant, equipment, machinery, facilities or infrastructure that is not part of the Kemerton Incomplete Infrastructure or located outside of the area of the Kemerton Sublease.

Kemerton Expansion Capacity means any capacity to expand the Kemerton Project to include an additional three trains of lithium hydroxide processing capability in excess of the capacity of the Kemerton Train 1 and 2 Infrastructure.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 44

Kemerton Expansion Capacity Area means the part of the Lease Land on which any additional trains in excess of the Kemerton Train 1 and 2 Infrastructure is (or will be) located, as indicatively shown on the map attached at Annexure A.

Kemerton Incomplete Infrastructure means the Kemerton Train 1 and 2 Infrastructure and the Kemerton Shared Assets.

Kemerton Insurances means all current insurance policies taken out in respect of the Kemerton Incomplete Infrastructure.

Kemerton Intellectual Property Rights means all intellectual property and proprietary rights (whether registered or unregistered) including any confidential information, trade secrets, copyright, letters patent, trade marks, service marks, trade names, designs, business names or other similar industrial, commercial or intellectual property rights, used in connection with the Kemerton Project.

Kemerton Lease means the lease dated 13 December 2018 granted by Western Australian Land Authority trading as LandCorp in favour of Albemarle Lithium over the Lease Land.

Kemerton Project means the project to develop and operate, in accordance with this agreement, the Transaction Documents and the Kemerton Transaction Documents, the lithium hydroxide conversion plant known as the Albemarle Lithium Hydroxide Manufacturing Plant, located in the Kemerton Strategic Industrial Area, Western Australia.

Kemerton Sale Interest means a 40% legal and beneficial interest as tenant in common in the Kemerton Assets.

Kemerton Shared Assets means the infrastructure described as such in Schedule 7 and as indicatively shown on the map attached at Annexure A.

Kemerton Sublease means a back-to-back sublease of the Kemerton Lease to be granted by Albemarle Lithium to WLPL and AWPL over the Lease Land indicatively marked as the sub-lease area on the plan in Annexure A and on which the Kemerton Incomplete Infrastructure (but excluding the Kemerton Expansion Capacity Area) is, or will be located, the final form of which will be negotiated by the parties (with regard to the principles in clauses 4.1 and 4.5(c)(iii)).

Kemerton Trains 1 and 2 Infrastructure means the infrastructure described as such in in Schedule 7 and as indicatively shown on the map attached at Annexure A.

Kemerton Transaction Documents means, collectively:


(a)	the Plant Services Agreement;


(b)	the Kemerton Sublease; and


(c)	the Kemerton Access Licence.

LandCorp means the Western Australian Land Authority.

Lease Land means that part of Lot 253 on Deposited Plan 411027 comprised in Certificate of Title Volume 2945 Folio 681 which is shown on the plan annexed to the Kemerton Lease.

MRL Group means MRL and WLPL.

MRL Warranties means the representations and warranties set out in clause 12.1.

Non-Defaulting Party has the meaning given in clause 2.5(b).

Permitted Security Interest means the permitted security interests specified in Schedule 4.

Plant Services Agreement means the plant services agreement for the provision of services for the operation and maintenance of the Kemerton Incomplete Infrastructure between WLOPL and Albemarle Lithium, to be entered into at Completion in accordance with the principles described in clause 4.5.

Recipient has the meaning given in clause 19.2(b).

Retained Liabilities has the meaning given in clause 8.2.

Supplier has the meaning given in clause 19.2(b).

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 45

Third Party Claim means any Claim brought by a person or entity (other than WLPL or Albemarle Lithium) which may give rise, or otherwise relates, to a Claim by WLPL against Albemarle Lithium.

Transfer Instruments means a sublease in registerable form (subject to stamping) which effects or records WLPL's 40% interest and AWPL's 60% interest in the Kemerton Sublease.

WLPL Guaranteed Obligations has the meaning given in clause 15.2(a).

WLPL Individuals means:


(a)	Chris Ellison;


(b)	Mark Wilson;


(c)	Tim Williams; and


(d)	Nick Rohr.

WLPL Warranties means the representations and warranties set out in clause 11.1.

Wodgina ASSSA means the 'Asset Sale and Share Subscription Agreement – Wodgina Project' between WLPL, AWPL, MRL and Albemarle Corporation dated 14 December 2018, as amended.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 46

Schedule 2 - Albemarle Group Warranties


1.	General


1.1	Incorporation

Albemarle Lithium is duly incorporated and validly exists under the law of its place of incorporation.


1.2	Capacity


(a)	Albemarle Lithium has full corporate power and authority to own the Kemerton Incomplete Infrastructure, the Kemerton Sale Interest and to sell and transfer the Kemerton Sale Interest.


(b)	The execution and delivery of this agreement has been properly authorised by all necessary corporate action of Albemarle Lithium.


(c)	Albemarle Lithium has full corporate power and lawful authority to execute and deliver this agreement and, subject to clause 2, to consummate and perform or cause to be performed its obligations under this agreement.


(d)	This agreement constitutes a legal, valid and binding obligation of Albemarle Lithium, enforceable in accordance with its terms.


1.3	No default


(a)	The execution, delivery and (subject to satisfaction of the Conditions) performance by Albemarle Lithium of this agreement does not or will not (with or without the lapse of time, the giving of notice or both) contravene, conflict with or result in a breach of or default under:


(i)	any agreement or instrument to which Albemarle Lithium is a party;


(ii)	any provision of the constitution of Albemarle Lithium; and


(iii)	any writ, order or injunction, judgement, or law to which it is a party or is subject or by which it is bound.


1.4	Ownership


(a)	There are no Security Interests over the Kemerton Sale Interest (other than a Permitted Security Interest).


(b)	Except as expressly provided in this agreement, Albemarle Lithium has not granted any option or right of pre-emption or first refusal in respect of any of the Kemerton Sale Interest to any other person and subject to clause 2.2 of Schedule 15 of the Wodgina ASSSA and clause 2.2, Albemarle Lithium will:


(i)	at Completion be able to transfer legal and beneficial ownership and title to all of the Kemerton Sale Interest to WLPL other than the Kemerton Incomplete Infrastructure in each case which are not yet legally owned by Albemarle Lithium, but in respect of which Albemarle Lithium will transfer ownership of and a 40% beneficial interest; and


(ii)	at Completion be able to transfer legal and beneficial ownership and title to all of the Kemerton Sale Interest to AWPL other than the Kemerton Incomplete Infrastructure in each case which are not yet legally owned by Albemarle Lithium, but in respect of which Albemarle Lithium will transfer ownership of and a 60% beneficial interest.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 47


1.5	Insolvency


(a)	No Insolvency Event has occurred in relation to Albemarle Lithium.


(b)	So far as Albemarle Lithium is aware, there are no facts, matters or circumstances which give any person the right to apply to liquidate or wind up Albemarle Lithium.


2.	Operation of the assets


2.1	Licences, authorisations and consents


(a)	Albemarle Lithium has all material licences, authorisations and consents required for the activities it carries on in respect of the Kemerton Project and Albemarle Lithium has not received a written notice that it is in default under any such licence, authorisation or consent.

(b)

So far as Albemarle Lithium is aware, the Kemerton Approvals specified in Schedule 5 comprise all of the material licences and authorisations which were used by Albemarle Lithium in activities in respect of the Kemerton Project as conducted immediately prior to Completion including, without limitation, all material licences and authorisations which are necessary for Albemarle Lithium to discharge in all material respects its contractual obligations which it owed to any third party immediately prior to Completion (but excluding any licences and authorisations which are held by third parties as required by applicable law).


(c)	The Kemerton Approvals are valid and in good standing and Albemarle Lithium has paid all fees in respect of the Kemerton Approvals.


(d)	Albemarle Lithium has not done, or omitted to do, and is not aware of any act or thing that might prejudice the continuance, renewal, issue or extension of any Kemerton Approval after Completion to the extent required for the continued operation of the Kemerton Incomplete Infrastructure in the usual course from Completion.


2.2	Compliance with laws and regulations

Albemarle Lithium has not received written notice from any Government Agency that it is in violation of (or, so far as Albemarle Lithium is aware, is being investigated for violations of) any applicable law or regulation or any order or judgment of any court with respect to its activities in respect of the Kemerton Project where such violation would have a material adverse effect on the assets or financial position of Albemarle Lithium.


2.3	Litigation


(a)	Except as claimant in the collection of debts arising in the ordinary course of business, as at the Execution Date, there is no litigation, arbitration, prosecution, mediation, administrative proceeding or other proceeding that:


(i)	is current;


(ii)	so far as Albemarle Lithium is aware, is pending or threatened,

with respect to any asset that forms part of the Kemerton Sale Interest, the Kemerton Project or the Kemerton Lease and which is material in relation to Albemarle Lithium.

(b)

So far as Albemarle Lithium is aware, there is no material pending, threatened or unsatisfied judgment, order, arbitral award, ruling, declaration, decree or decision of any court, tribunal, arbitrator or Government Agency, or unsatisfied settlement of proceedings in any court, tribunal or arbitration, which could reasonably be expected to materially adversely affect the Kemerton Project, the Kemerton Sale Interest or the Kemerton Lease.


(c)	So far as Albemarle Lithium is aware, there are no Claims or investigations in respect of the Kemerton Project, the Kemerton Sale Interest or the Kemerton Lease which could be reasonably expected to:


(i)	have a material adverse effect on the Kemerton Project; or

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 48


(ii)	result in litigation, prosecution, arbitration, mediation, or other proceedings which could have a material adverse effect on the Kemerton Project.


3.	Existing Security Interests


(a)	So far as Albemarle Lithium is aware:


(i)	all Security Interests in respect of the Kemerton Sale Interest held by Albemarle Lithium as the Secured Party have (if required by law) been registered in accordance with law on each applicable register.


(ii)	all PPS Security Interests in respect of the Kemerton Sale Interest held by Albemarle Lithium as the Secured Party have been perfected in accordance with PPS Law.


(b)	So far as Albemarle Lithium is aware, there is no action by any other person which would materially adversely affect the registration, enforcement or priority of any PPS Security Interest in respect of the Kemerton Sale Interest held by Albemarle Lithium as the Secured Party.


4.	Sale Interest


(a)	Save for the Kemerton Excluded Assets and the Kemerton Approvals, at Completion, there are no material assets owned by Albemarle Lithium or any of its Related Bodies Corporate which are not included in the Kemerton Sale Interest and are required for the production of lithium hydroxide monohydrate at the site of the Kemerton Project.


(b)	So far as Albemarle Lithium is aware, the Kemerton Incomplete Infrastructure and, once granted and entered into in accordance with clause 4.1, the Kemerton Sublease and Kemerton Access Licence, will be the only assets necessary to conduct Train 1 and Train 2 on and from KCCC Handover.


(c)	The Albemarle Group Warranties in this paragraph 4 are given only at Completion.


5.	Disclosure


5.1	Disclosure

So far as Albemarle Lithium is aware, the Disclosure Material:


(a)	was submitted in, and (where the information was subject to judgments, estimates or assumptions of Albemarle Lithium) prepared in, good faith;


(b)	other than the information referred to in the parentheses in paragraph (a) above, as at the Execution Date, is true and accurate in all material respects.


5.2	Factual information

The factual information relating to the Kemerton Sale Interest set out in this agreement is accurate in all material respects and no facts have been omitted which would render such factual information inaccurate or misleading in any material respect.


6.	Contracts


(a)	Aside from the Kemerton Contracts and the Kemerton Construction Contracts, there are no agreements, arrangements or understandings to which Albemarle Lithium is party which are material to the operation of the Kemerton Sale Interest having regard to their state of completion as at the Execution Date.


(b)	As at the Execution Date, Albemarle Lithium has not received any notice of termination, rescission or, invalidation or claim pursuant to any actual or alleged breach or default of any Kemerton Contract to which Albemarle Lithium is a party or any claim by any party to

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 49

be able to terminate, rescind or invalidate any contract to which Albemarle Lithium is a party by reason of any actual or alleged breach of that contract.


(c)	So far as Albemarle Lithium is aware:


(i)	all Kemerton Contracts then in existence are in full force and effect and binding in accordance with their terms (subject to any applicable insolvency laws);


(ii)	as at the Execution Date, there is no material default or material breach of any Kemerton Contract which may have a material adverse effect on the Kemerton Sale Interest;


(iii)	it is not in material default or material breach of any Kemerton Contracts which may have a material adverse effect on the Kemerton Sale Interest; and


(iv)	as at the Execution Date, there are no current or threatened material disputes or material claims in respect of any Kemerton Contracts.


7.	Environmental


(a)	In this warranty 7:


(i)	Dangerous Substance means any natural or artificial substance likely to cause significant damage to the environment; and


(ii)	Environmental Licence means any permit, licence, authorisation, consent or other approval required under or in relation to any Environmental Law.


(b)	As at the Execution Date, Albemarle Lithium has not given, and is not aware of requiring to give, any bond or security deposits in favour of any Government Agency in connection with any Environmental Licence which relates to the Kemerton Project carried on by Albemarle Lithium or the land the subject of the Kemerton Lease or damage to the Environment.


(c)	Albemarle Lithium has all Environmental Licences necessary to own and operate the Kemerton Sale Interest in the state they exist as at the Execution Date and Albemarle Lithium has not received written notice that it is materially in default under any such licence and, so far as Albemarle Lithium is aware, there are no circumstances likely to give rise to such material default.


(d)	As at the Execution Date, Albemarle Lithium has not received any notice that it is in violation of any Environmental Law where such violation would have a material adverse effect on the Kemerton Project, the Kemerton Sale Interest or the Kemerton Lease.

(e)

As at the Execution Date, Albemarle Lithium is not engaged in any litigation, arbitration or administrative proceeding concerning Environmental Law or Dangerous Substances which is in progress and which is material in relation to the Kemerton Incomplete Infrastructure or the Kemerton Sale Interest nor, as far as Albemarle Lithium is aware, has any such proceeding been threatened in writing by or against Albemarle Lithium.


8.	Kemerton Sale Interest


(a)	Albemarle Lithium is entitled to become the legal and beneficial owner of the Kemerton Incomplete Infrastructure.


(b)	There will be no Security Interest (other than a Permitted Security Interest) over or affecting any Kemerton Incomplete Infrastructure and Albemarle Lithium is not party to any agreement to grant any Security Interest over the Kemerton Sale Interest.


(c)	So far as Albemarle Lithium is aware, no person has a continuing claim of an entitlement to a Security Interest (other than a Permitted Security Interest) over or affecting the Kemerton Sale Interest other than as provided for in the Kemerton Contracts.


(d)	Each item of the Kemerton Incomplete Infrastructure, to the extent they are complete and operational:

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 50


(i)	is as at the Execution Date in a good and safe state of repair and condition and is in satisfactory working order for its age; and


(ii)	between the Execution Date and Completion, has in all material respects been operated and maintained in accordance with the standard that would reasonably be expected of persons operating and maintaining equipment similar to the Kemerton Incomplete Infrastructure in the mining or lithium hydroxide monohydrate industry in Australia.


9.	Industrial matters


(a)	As at the Execution Date, Albemarle Lithium has not been involved in an industrial dispute with an employee, trade union or employees’ association in relation to the Kemerton Project.


(b)	As at the Execution Date, Albemarle Lithium is not party to any agreement with any union or industrial or employees’ organisation in relation to the Kemerton Project.


10.	Real property


(a)	Albemarle Lithium does not own, lease, sub-lease, licence or otherwise have any interest (other than the Kemerton Lease and the Kemerton Easement) in any real property in connection with the Kemerton Project.


(b)	Albemarle Lithium has exclusive occupation and quiet enjoyment of the land which is the subject of the Kemerton Lease and enjoys the benefit of the Kemerton Easement for the conduct of the Kemerton Project.


(c)	Albemarle Lithium has not received any outstanding notices or orders which may result in a notice or order:


(i)	for the compulsory acquisition or resumption of any part of the land which is the subject of the Kemerton Lease;


(ii)	requiring work to be done or expenditure to be made on the Kemerton Lease; or


(iii)	which may materially adversely affect the Kemerton Lease or the use of it by Albemarle Lithium or AWPL for the Kemerton Project.


(d)	There is no dedication to or use by the public of any right of way or other easement over any part of the Kemerton Lease.


(e)	Albemarle Lithium is not in arrears with the payment of rent or any other money payable under the Kemerton Lease.


(f)	There are no subsisting breaches of lease covenants which entitle the lessor to terminate the Kemerton Lease.


(g)	The lessor has not taken any action to re-enter the Kemerton Lease.


(h)	The lessor has not called on any personal guarantees, bank guarantees or security bonds provided by Albemarle Lithium to satisfy a breach of the Kemerton Lease by Albemarle Lithium.


(i)	Albemarle Lithium has obtained the insurances required under the Kemerton Lease and otherwise complied with Albemarle Lithium’s obligations in relation to insurance under the Kemerton Lease.


(j)	Other than in relation to the Kemerton Sublease, Albemarle Lithium has not agreed to assign, sublease or otherwise deal with Albemarle Lithium’s interest in the Kemerton Lease to any other person other than AWPL.


(k)	As at the Execution Date, Albemarle Lithium:


(i)	has not purported to:


(A)	terminate the Kemerton Lease; or

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 51


(B)	claim a right to an abatement of rent and other money under the Kemerton Lease,

on the basis of resumption, damage or destruction to the Kemerton Lease; and


(ii)	is not aware of any damage or destruction of the Kemerton Lease which would give either Albemarle Lithium or the lessor a right to terminate the Kemerton Lease.


(l)	Nothing has occurred which may or would entitle Albemarle Lithium to make or maintain a claim or demand against the lessor under the Kemerton Lease.


11.	Kemerton Intellectual Property Rights


(a)	So far as Albemarle Lithium is aware, Albemarle Lithium has valid and continuing rights to use the Kemerton Intellectual Property Rights as used as part of the Kemerton Project.

(b)

So far as Albemarle Lithium is aware, Albemarle Lithium's use of any Kemerton Intellectual Property Rights in connection with the Kemerton Incomplete Infrastructure which are material in the context of the Kemerton Project as a whole, does not infringe, breach an obligation of confidence or wrongfully use any confidential information, trade secrets, copyright, letters patent, trademarks, service marks, trade names, designs, business names or other similar industrial, commercial or intellectual property rights of any corporation or person.


(c)	So far as Albemarle Lithium is aware, the Kemerton Intellectual Property Rights comprises all the intellectual property necessary or convenient for carrying on the Kemerton Project in the manner and to the extent which it is presently conducted.


(d)	So far as Albemarle Lithium is aware, as at the Execution Date, no Claims have been asserted challenging Albemarle Lithium's use of the Kemerton Intellectual Property Rights.

(e)

So far as Albemarle Lithium is aware, each director, manager, employee and independent contractor of Albemarle Lithium who, either alone or with others, has created, developed or invented Kemerton Intellectual Property Rights which the Kemerton Project uses or might use has entered into a written agreement with Albemarle Lithium which obliges disclosure and assignment of those rights to Albemarle Lithium.


12.	Anti-bribery and corruption


(a)	So far as Albemarle Lithium is aware, neither Albemarle Lithium nor any of its Representatives has, in relation to the Kemerton Project:

(i)

offered, paid, promised to pay, or authorised the payment of any money, or has offered, given, promised to give, or authorised the giving of anything of value, including, but not limited to, cash, cheques, wire transfers, tangible and intangible gifts, favours, services, and those entertainment and travel expenses, to any Governmental Authority, political party or candidate for government office, nor provided or promised anything of value or which may constitute an undue advantage to any other person while knowing that all or a portion of that thing of value would or will be offered, given, or promised, directly or indirectly, to any Governmental Authority, political party or candidate for government office, for the purpose of improperly:


(A)	influencing any act or decision of such official, party or candidate in his official capacity, inducing such official, party or candidate to do or omit to do any act in violation of their lawful duty, or securing any improper advantage; or


(B)	inducing such official, party or candidate to use his influence with his government or instrumentality to affect or influence any act or decision of such government or instrumentality, in order to assist in obtaining or retaining business for or with, or directing business to, any person;


(ii)	violated any applicable anti-corruption laws;

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 52


(iii)	violated any applicable anti-money laundering laws; or


(iv)	otherwise made, offered, sought, provided or received any bribe, payoff, influence payment, kickback, or other similar unlawful payment or an undue advantage to obtain favourable treatment in securing business for Albemarle Lithium or the Kemerton Project.

(b)

Without limiting the foregoing, there are and have been no enforcement actions or, investigations (internal or governmental) involving or, so far as Albemarle Lithium is aware, allegations or disclosures to, Governmental Authorities, related to actual or potential violations of any anti-corruption or anti-money laundering laws or regulations relating to any improper conduct of Albemarle Lithium in relation to the Kemerton Project or the Kemerton Sale Interest, and so far as Albemarle Lithium is aware there are no circumstances likely to give rise to any Claim relating to any such improper conduct of Albemarle Lithium in relation to the Kemerton Project or the Kemerton Sale Interest. Albemarle Lithium has not received any notice, request, or citation for any actual or potential non-compliance with any of the foregoing in this Warranty 12(b) as it relates to the Kemerton Project or the Kemerton Sale Interest.


(c)	Albemarle Lithium maintains and utilises controls procedures and internal accounting control systems that are consistent with the requirements of any applicable anti-corruption laws.


13.	Insurance


(a)	Each Kemerton Insurance policy is currently in full force and effect.

(b)

There are no outstanding threatened or pending claims under a Kemerton Insurance policy in respect of the Kemerton Project, the Kemerton Sale Interest or the Kemerton Lease which verbal or written communication has been given or received by Albemarle Lithium nor, so far as Albemarle Lithium is aware, are there any facts, matters or circumstances which may give rise to such a claim (or an entitlement to make such a claim).


(c)	As far as Albemarle Lithium is aware, no insurance claim in respect of the Kemerton Project, the Kemerton Sale Interest or the Kemerton Lease has been refused or settled for an amount less than that claimed (other than an amount not recoverable from an insurer by way of an excess, deductible or self-insured retention).


(d)	Any circumstances within the knowledge of Albemarle Lithium which could reasonably be expected to give rise to an insurance claim have been disclosed to AWPL.


(e)	So far as Albemarle Lithium is aware, as at the Execution Date, nothing has been done or omitted to be done that would make any Kemerton Insurance void or voidable or that would permit an insurer to cancel the Kemerton Insurance or refuse or materially reduce a claim.


(f)	The Kemerton Project, Kemerton Sale Interest and Kemerton Lease are all insured against all risks normally insured against by companies carrying on a similar business or having similar assets:


(i)	for the full amount required by law (where applicable);


(ii)	with respect to the Kemerton Project, Kemerton Sale Interest and the Kemerton Lease, for their full replacement or reinstatement value; and


(iii)	from a reputable insurer.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 53


14.	Taxes and Duty

Any Taxes or Duty which are due and payable by Albemarle Lithium, including without limitation, Tax or Duty on the Kemerton Lease (but not including any Taxes or Duty payable as a result of this agreement, the Wodgina ASSSA, the Albemarle Kemerton ASA, any Kemerton Transaction Document or any Transaction Document), have been paid in full in accordance with the Tax Act or other relevant Act.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 54

Schedule 6 – Calculation of Kemerton Consideration

The consideration for each part of the Kemerton Incomplete Infrastructure which is (or will be) in existence as at the Completion Date and capable of passing by delivery at the places where it is located will be determined as follows:

Consideration = 0.4 x Book Value

Where:

Book Value is the value, in US dollars, of the relevant part of the Kemerton Incomplete Infrastructure as (or as is reasonably expected to be in) recorded in the financial records of Albemarle Lithium as at the date of acquisition of such part of the Kemerton Incomplete Infrastructure as determined in accordance with Albemarle Lithium’s normal accounting practices.

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 57

Signing page

EXECUTED as an agreement.



Executed by Wodgina Lithium Pty Ltd ACN 611 488 932 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)



Executed by Albemarle Wodgina Pty Ltd ACN 630 509 303 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)



Executed by Mineral Resources Limited ACN 118 549 910 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)



Executed by Albemarle Corporation in the presence of:


Signature of witness		Signature of authorised signatory

Name of witness (print)		Name of authorised signatory (print)

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 66



Executed by Albemarle Lithium Pty Ltd ACN 618 095 471 in accordance with Section 127 of the Corporations Act 2001


Signature of director		Signature of director/company secretary (Please delete as applicable)

Name of director (print)		Name of director/company secretary (print)

Minter Ellison | Ref: SFS: AZO 1225164 MRL Kemerton Asset Sale Agreement | page 67

Exhibit 10.4

Albemarle Corporation

4250 Congress Street

Suite 900

Charlotte, North Carolina 28209

1 August 2019

The Directors
Mineral Resources Limited
1 Sleat Road
Applecross WA 6153
Australia

Dear Directors

Payment of break fee

This letter deed is in reference to:


•	the Asset Sale and Share Subscription Agreement between Mineral Resources Limited (MRL), Wodgina Lithium Pty Ltd (Wodgina Lithium), Albemarle Wodgina Pty Ltd (Albemarle Wodgina) and Albemarle Corporation (Albemarle) dated 14 December 2018 (as amended from time to time) (Wodgina ASSSA);


•	the Amendment Deed in relation to the Wodgina ASSSA between Wodgina Lithium, Albemarle Wodgina, MRL and Albemarle dated on or around the date of this letter deed (Amendment Deed); and


•	the MRL Kemerton Asset Sale Agreement between Wodgina Lithium, MRL, Albemarle Wodgina, Albemarle and Albemarle Lithium Pty Ltd (Albemarle Lithium) dated on or around the date of this letter deed (MRL Kemerton ASA).

Unless otherwise defined, capitalised terms in this letter deed have the definition given in the Wodgina ASSSA.


1	Introduction


1.1	Albemarle acknowledges that if the transactions contemplated under the Wodgina ASSSA and the MRL Kemerton ASA are not completed in accordance with their terms, MRL will have incurred significant costs, including significant opportunity costs.


1.2	Albemarle acknowledges that MRL would not have entered into the Amendment Deed and the MRL Kemerton ASA without the benefit of this letter deed and it would not have entered into and continued the negotiations leading up to the execution of the Amendment Deed and the MRL Kemerton ASA unless MRL had a reasonable expectation that Albemarle would agree to enter into a letter deed of this kind.


2	Payment of Break Fee


2.1	Subject to paragraph 2.2, Albemarle must pay MRL (or such other entity as directed by MRL) US$100,000,000 (Break Fee) into an account designated by MRL by way of electronic transfer of Immediately Available Funds, without set-off or withholding and within 10 Business Days after receipt of a written demand from MRL, if:


(a)	Wodgina Lithium or Albemarle Wodgina terminates the Wodgina ASSSA under clause 2.6(b)(i) of the Wodgina ASSSA; or


(b)	Wodgina Lithium terminates the Wodgina ASSSA under clause 2.6(e) of the Wodgina ASSSA.


2.2	The Break Fee in paragraph 2.1 is not payable if the Wodgina ASSSA is terminated under clause 2.6(b)(i) of the Wodgina ASSSA where either:


(a)	a Condition under the Wodgina ASSSA was not satisfied or waived by the Conditions Precedent Date because either Wodgina Lithium or MRL have breached or repudiated their obligations under the Wodgina ASSSA or the MRL Kemerton ASA; or


(b)	the Condition in clause 2.1(a)(i) of the Wodgina ASSSA was not satisfied or waived by the Conditions Precedent Date because the Federal Treasurer proposed or imposed a condition on his or her clearance or approval which Albemarle Wodgina was willing to accept but Wodgina Lithium was not prepared to accept.


3	Limitation

3.1

Subject to paragraph 3.2, MRL and Albemarle acknowledge and agree that payment of the Break Fee by Albemarle in accordance with this letter deed will be in full and final satisfaction of any Claim by MRL or Wodgina Lithium (or any of their Representatives or Related Bodies Corporate) against Albemarle, Albemarle Wodgina or Albemarle Lithium (or any of their Representatives or Related Bodies Corporate) in relation to Completion not occurring under the Wodgina ASSSA or MRL Kemerton ASA. MRL must procure that Wodgina Lithium and the Representatives and Related Bodies Corporate of MRL and Wodgina Lithium do not make any such Claim.


3.2	The limitation contained in paragraph 3.1 will not apply if:


(a)	the Break Fee was paid or payable for the reasons described in paragraph 2.1(b) of this letter deed;


(b)	Albemarle or Albemarle Wodgina are in breach of a material obligation under the Wodgina ASSSA (including the obligations in clause 2.2 of the Wodgina ASSSA) or the MRL Kemerton ASA (including the obligations in clause 2.2 of the MRL Kemerton ASA); or


(c)	Albemarle or Albemarle Wodgina have otherwise repudiated their obligations under the Wodgina ASSSA or the MRL Kemerton ASA.

3.3

Without limiting paragraph 3.1, MRL agrees, and must procure that Wodgina Lithium (and each of their Representatives or Related Bodies Corporate) agree, that if the Break Fee has been paid by Albemarle in accordance with paragraph 2.1, then in relation to any Claim by MRL or Wodgina Lithium (or any of their Representatives or Related Bodies Corporate) against Albemarle, Albemarle Wodgina or Albemarle Lithium (or any of their Representatives or Related Bodies Corporate) in relation to Completion not occurring under the Wodgina ASSSA or MRL Kemerton ASA (including in relation to the breaches or repudiation referred to in paragraph 3.2), the payment of the Break Fee will be taken into account and offset to the extent of the amount of the Break Fee against any compensation liability of Albemarle, Albemarle Wodgina or Albemarle Lithium (or any of their Representatives or Related Bodies Corporate) to MRL or Wodgina Lithium (or any of their Representatives or Related Bodies Corporate).


4	Assignment

Neither party to this letter deed may assign, novate or otherwise deal with the benefit of it or any right under it, or purport to do so, without the prior written consent of the other party.


5	General

Clauses 18.1 (Confidentiality), 21 (Dispute Resolution), 26 (Notices), 27.3 (Further assurances), 27.4 (Rights cumulative), 27.6 (Variation), 27.7 (Waiver), 27.8 (Governing law), 27.9 (Counterparts), 27.10 (Default interest) and 27.11 (Interest payable on overdue amounts) of the Wodgina ASSSA apply mutatis mutandis to this letter deed.

Please confirm your agreement to the terms of this deed, by executing in the space provided below.

Yours sincerely,

Albemarle Corporation

Name:

Title:

By signing below, we hereby agree to the terms set out in the letter above:

Executed as a deed.



Signed, sealed and delivered by Mineral Resources Limited in accordance with section 127 of the Corporations Act 2001 (Cth) by:
Signature of director		Signature of director/secretary
Name of director (print)		Name of director/secretary (print)



Signed, sealed and delivered by Albemarle Corporation by:
Signature of witness		Signature of authorised signatory
Name of witness (print)		Name of authorised signatory (print)

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Luther C. Kissam IV, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Albemarle Corporation for the period ended June 30, 2019;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:	August 7, 2019

/s/ LUTHER C. KISSAM IV

Luther C. Kissam IV

Chairman, President and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Scott A. Tozier, certify that:


1.	I have reviewed this Quarterly Report on Form 10-Q of Albemarle Corporation for the period ended June 30, 2019;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:	August 7, 2019

/s/ SCOTT A. TOZIER

Scott A. Tozier

Executive Vice President and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Albemarle Corporation (the “Company”) for the period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Luther C. Kissam IV, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ LUTHER C. KISSAM IV

Luther C. Kissam IV

Chairman, President and Chief Executive Officer

August 7, 2019

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Albemarle Corporation (the “Company”) for the period ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott A. Tozier, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ SCOTT A. TOZIER

Scott A. Tozier

Executive Vice President and Chief Financial Officer

August 7, 2019