Exhibit 10(h)

 

 

ACQUISITION AGREEMENT

between

ALCOA INC.

and

RANK GROUP LIMITED

Dated as of December 21, 2007

 

 

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ACQUISITION AGREEMENT

TABLE OF CONTENTS

 

          Page ARTICLE I Definitions ARTICLE II Transfer of U.S. Country Unit

SECTION 2.01.

   Transfer of Shares and Acquired Assets of U.S. Country Unit    8

SECTION 2.02.

   Assumption of Assumed Liabilities of U.S. Country Unit    12

SECTION 2.03.

   Excluded Assets and Excluded Liabilities    14 ARTICLE III Transfer of
Foreign Country Units

SECTION 3.01.

   Transfer of Foreign Country Units After the Initial Closing    14

SECTION 3.02.

   Transfer of Foreign Country Units    14

SECTION 3.03.

   Excluded Assets and Excluded Liabilities    15 ARTICLE IV Closings; Purchase
Price Adjustments

SECTION 4.01.

   Initial Closing    15

SECTION 4.02.

   Foreign Country Unit Closing    16

SECTION 4.03.

   Purchase Price Adjustments    17 ARTICLE V Conditions to Closing

SECTION 5.01.

   Conditions to Purchaser’s Obligation on the Initial Closing Date    22

SECTION 5.02.

   Conditions to Seller’s Obligation on the Initial Closing Date    23

SECTION 5.03.

   Conditions to Foreign Country Unit Closings    23

SECTION 5.04.

   Frustration of Closing Conditions    24

 

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ARTICLE VI Representations and Warranties of Seller

SECTION 6.01.

   Organization, Standing and Authority    25

SECTION 6.02.

   No Violation; Consents and Approvals    26

SECTION 6.03.

   Transferred Subsidiaries’ Equity Interests    27

SECTION 6.04.

   Financial Statements    27

SECTION 6.05.

   Absence of Changes or Events    28

SECTION 6.06.

   Brokers    28

SECTION 6.07.

   Taxes    28

SECTION 6.08.

   Title to Assets    29

SECTION 6.09.

   Contracts    29

SECTION 6.10.

   Litigation    31

SECTION 6.11.

   Employee and Related Matters; ERISA    32

SECTION 6.12.

   Compliance with Laws    35

SECTION 6.13.

   Labor Matters    35

SECTION 6.14.

   Environmental Matters    36

SECTION 6.15.

   Permits    36

SECTION 6.16.

   Intellectual Property    37

SECTION 6.17.

   Transactions with Affiliates    37

SECTION 6.18.

   Real Estate    38

SECTION 6.19.

   Sufficiency of Assets    39

SECTION 6.20.

   Insurance    39

SECTION 6.21.

   No Other Representations or Warranties    39 ARTICLE VII Covenants of Seller

SECTION 7.01.

   Access    40

SECTION 7.02.

   Ordinary Conduct    40

SECTION 7.03.

   Post-Signing Restructuring Actions    43

SECTION 7.04.

   Confidentiality    44

SECTION 7.05.

   Resignations    44

SECTION 7.06.

   Insurance    44

SECTION 7.07.

   Certain Financial Information    45

SECTION 7.08.

   Termination of Outstanding Powers of Attorney    45

SECTION 7.09.

   Title to Intellectual Property    45

SECTION 7.10.

   Additional Books and Records    45

SECTION 7.11.

   Joint Ventures    45

SECTION 7.12.

   Certain Assets of Transferred Subsidiaries    46

SECTION 7.13.

   Supplier-Financing Programs    46

SECTION 7.14.

   Lien Removal    46

 

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ARTICLE VIII Representations and Warranties of Purchaser

SECTION 8.01.

   Organization, Standing and Authority    47

SECTION 8.02.

   No Violation; Consents and Approvals    47

SECTION 8.03.

   Brokers    48

SECTION 8.04.

   Availability of Funds    48

SECTION 8.05.

   Securities Act    48

SECTION 8.06.

   Financing    48

SECTION 8.07.

   No Additional Representations    49 ARTICLE IX Covenants of Purchaser

SECTION 9.01.

   Confidentiality    49

SECTION 9.02.

   Performance of Obligations by Purchaser After the Closing Dates    50

SECTION 9.03.

   Bulk Transfer Laws    50

SECTION 9.04.

   Name of Certain Entities    50

SECTION 9.05.

   Access    50

SECTION 9.06.

   Replacement of Credit Support    51

SECTION 9.07.

   Purchaser Payment in the Event of a Subsequent Third Party Sale    51

SECTION 9.08.

   Insurance    52 ARTICLE X Mutual Covenants

SECTION 10.01.

   Consents    53

SECTION 10.02.

   Publicity    54

SECTION 10.03.

   Reasonable Best Efforts    54

SECTION 10.04.

   Regulatory Matters    54

SECTION 10.05.

   Intracompany and Intercompany Arrangements    55

SECTION 10.06.

   Further Assurances    57

SECTION 10.07.

   Other Transaction Agreements    57

SECTION 10.08.

   Purchase Price Allocation    57

SECTION 10.09.

   Debt Financing.    59

SECTION 10.10.

   Non-Solicitation; Non-Competition.    61

SECTION 10.11.

   Migration Services    62

SECTION 10.12.

   New Purchaser Entities    62

SECTION 10.13.

   Mutual Non-Assert    62

SECTION 10.14.

   Pre-Closing Transition Planning    63

 

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SECTION 10.15.

   Japanese Subsidiary    63 ARTICLE XI Other Transaction Agreements

SECTION 11.01.

   Scrap Metal Agreement    63

SECTION 11.02.

   Metal Supply Agreement    64

SECTION 11.03.

   Intellectual Property Assignments    64 ARTICLE XII Employee Matters

SECTION 12.01.

   General    64

SECTION 12.02.

   Special U.S. Provisions    71

SECTION 12.03.

   Special Non-U.S. Provisions    76

SECTION 12.04.

   Assumed Pension Plans    77

SECTION 12.05.

   Administration    79 ARTICLE XIII Indemnification

SECTION 13.01.

   Tax Indemnification    80

SECTION 13.02.

   Other Indemnification by Seller    83

SECTION 13.03.

   Other Indemnification by Purchaser    84

SECTION 13.04.

   Losses Net of Insurance, etc    85

SECTION 13.05.

   Termination of Indemnification    85

SECTION 13.06.

   Procedures Relating to Indemnification (Other Than Tax Claims)    86

SECTION 13.07.

   Procedures Relating to Indemnification of Tax Claims    88

SECTION 13.08.

   Exclusive Remedy    89

SECTION 13.09.

   Tax Treatment of Certain Payments    89

SECTION 13.10.

   No Duplicative Payments    89 ARTICLE XIV Tax Matters

SECTION 14.01.

   Tax Returns; Tax Payments    89

SECTION 14.02.

   Certain Tax Covenants    91

SECTION 14.03.

   Cooperation on Tax Matters    92

SECTION 14.04.

   Tax Sharing Agreements    92

 

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SECTION 14.05.

   Transfer Taxes    92

SECTION 14.06.

   FIRPTA Affidavit    93

SECTION 14.07.

   Loss Disallowance Rule    93

SECTION 14.08.

   Tax Matter Disputes    93

SECTION 14.09.

   Mexican Restructuring    94 ARTICLE XV Survival of Representations

SECTION 15.01.

   Survival of Representations    94 ARTICLE XVI Termination

SECTION 16.01.

   Termination    95

SECTION 16.02.

   Other Transaction Agreements; Material To Be Returned    95

SECTION 16.03.

   Effect of Termination    96 ARTICLE XVII General Provisions

SECTION 17.01.

   Assignment; Successors    96

SECTION 17.02.

   No Third Party Beneficiaries.    97

SECTION 17.03.

   Expenses    97

SECTION 17.04.

   Amendments    98

SECTION 17.05.

   Waivers    98

SECTION 17.06.

   Notices    98

SECTION 17.07.

   Exhibits and Schedules; Interpretation    100

SECTION 17.08.

   Counterparts    101

SECTION 17.09.

   Entire Agreement    101

SECTION 17.10.

   Severability    101

SECTION 17.11.

   Consent to Jurisdiction    101

SECTION 17.12.

   Governing Law    102

SECTION 17.13.

   Waiver of Jury Trial    102

SECTION 17.14.

   Time of the Essence    102

 

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ANNEX

     

Annex 1

   -      Definitions

Annex 2

   -      Transfer of Shares by Country Unit

Annex 3

   -      Transfer of Acquired Assets and Assumed Liabilities by Country Unit

Annex 4

   -      Transferred Subsidiaries

Annex 5

   -      Allocation Schedule EXHIBITS

Exhibit A

   -      Form of Foreign Asset Transfer Agreement

Exhibit B

   -      Form of Foreign Stock Transfer Agreement

Exhibit C

   -      Form of Scrap Metal Agreement

Exhibit D

   -      Transition Services Agreement

Exhibit E

   -      Form of Metal Supply Agreement

Exhibit F-1

   -      Form of U.S. Patents and Patent Applications Assignment

Exhibit F-2

   -      Form of Foreign Patents and Patent Applications Assignment

Exhibit F-3

   -      Form of U.S. Trademark Assignment

Exhibit F-4

   -      Form of Foreign Trademark Assignment

Exhibit F-5

   -      Form of Copyright Assignment

Exhibit F-6

   -      Form of Domain Name Assignment

 

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ACQUISITION AGREEMENT (this “Agreement”) dated as of December 21, 2007, between
ALCOA INC., a Pennsylvania corporation (“Seller”), and RANK GROUP LIMITED, a New
Zealand company (“Purchaser”).

RECITALS

1. Seller and Purchaser desire that Purchaser purchase from Seller and Seller
sell to Purchaser Seller’s Packaging & Consumer business. This business (the
“Business”) consists of the design, manufacture, distribution and sale of
closure and packaging products through the “Consumer Products”, “Flexible
Packaging”, “Reynolds Food Packaging” and “Closure Systems International”
divisions of Seller and Seller’s Subsidiaries, including:

(a) In the United States,

(i) Seller’s “Consumer Products” operations currently conducted at Appleton
(Wisconsin), Beacon Falls (Connecticut), Carrollton (Texas), Hot Spring
(Arkansas), Lewiston (Utah), Louisville (Kentucky), Richmond (Virginia), South
Boston (Virginia) and Weyauwega (Wisconsin);

(ii) Seller’s “Flexible Packaging” operations currently conducted at Avenel (New
Jersey), Bellwood (Virginia), Downingtown (Pennsylvania), Grottoes (Virginia),
Hazelton (Pennsylvania), Louisville (Kentucky) and Richmond (Virginia);

(iii) Seller’s “Reynolds Food Packaging” operations currently conducted at
Avenel (New Jersey), Grant Park (Illinois), Grove City (Pennsylvania), Hazelton
(Pennsylvania), Manteno (Illinois), Rogers (Minnesota), Shephardsville
(Kentucky), Visalia (California) and Wakefield (Massachusetts); and

(iv) Seller’s “Closure Systems International” operations currently conducted at
Crawfordsville (Indiana), Olive Branch (Mississippi), Kilgore (Texas) and
Randolph (New York);

(b) Outside the United States,

(i) Seller’s “Consumer Products” operations currently conducted in Stara Zagora
(Bulgaria) and Amersham (United Kingdom);

(ii) Seller’s “Reynolds Food Packaging” operations currently conducted in Laval
(Canada), Rexdale (Canada), Summerstown (Canada), Apodaca (Mexico), Sedgefield
(United Kingdom) and Barcelona (Spain);

(iii) Seller’s “Closure Systems International” operations currently conducted in
Feversham (Canada), Ensenada (Mexico), Saltillo (Mexico), Cartago (Costa Rica),
Buenos Aires (Argentina), Alphaville (São Paulo, Brazil), Itapissuma (Brazil),
Santiago (Chile), Santa Fe de Bogota (Colombia), Lima

 

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(Peru), Valencia (Venezuela), West Bromwich (United Kingdom), Barcelona (Spain),
Worms (Germany), Székesfehérvár (Hungary), Moscow Oblast (Russia), 6th of
October City (Egypt), Manama (Bahrain), Makwampur District (Nepal), Choongbuk
(Korea), Hangzhou (China), Tianjin (China), Nogi (Japan) and Laguna
(Philippines); and

(iv) the selling activities of Seller’s “Consumer Products”, “Flexible
Packaging”, “Reynolds Food Packaging” and “Closure Systems International”
operations that are conducted through Seller’s Affiliates in Canada, Mexico, the
United Kingdom, Switzerland, Italy, Hong Kong and Japan.

2. Seller and the Subsidiaries of Seller set forth in the column labeled “Stock
Selling Company” in Annex 2 (the “Stock Selling Companies”) will transfer all of
the outstanding capital stock and other equity interests of the First Tier
Transferred Subsidiaries (with respect to each First Tier Transferred
Subsidiary, its “Shares”, and collectively with respect to all First Tier
Transferred Subsidiaries, the “Shares”) referenced in Annex 2 to Purchaser or an
Affiliate of Purchaser on the terms and subject to the conditions of this
Agreement.

3. Seller and the Subsidiaries of Seller set forth in the column labeled “Asset
Selling Company” in Annex 3 (the Seller and such Subsidiaries, collectively, the
“Asset Selling Companies”) will transfer the Acquired Assets and the Assumed
Liabilities (other than liabilities of the Transferred Subsidiaries that
constitute Assumed Liabilities) to Purchaser and Purchaser will acquire the
Acquired Assets and assume such Assumed Liabilities, in each case on the terms
and subject to the conditions of this Agreement.

Accordingly, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

The defined terms set forth in Annex 1, when used in this Agreement (unless
otherwise expressly provided herein), shall have the meanings ascribed thereto
in Annex 1.

ARTICLE II

Transfer of U.S. Country Unit

SECTION 2.01. Transfer of Shares and Acquired Assets of U.S. Country Unit.
(a) On the terms and subject to the conditions set forth in this Agreement, at
the Initial Closing, (i) Seller shall, or shall cause the applicable Stock
Selling Company to, transfer and deliver, or cause to be transferred and
delivered, to Purchaser or a direct or indirect Subsidiary of Purchaser the
Shares of the First Tier Transferred Subsidiaries which are part of the U.S.
Country Unit (as outlined in Annex 2), and (ii) Seller shall, or shall cause the
applicable Asset Selling Company to, transfer and deliver, or cause to be

 

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transferred and delivered, to Purchaser or a direct or indirect Subsidiary of
Purchaser all assets constituting the Acquired Assets of the U.S. Country Unit
held by it or the applicable Asset Selling Companies with respect to the U.S.
Country Unit, including those assets specifically referenced in Annex 3 with
respect to the U.S. Country Unit.

(b) The term “Acquired Assets” shall mean all the right, title and interest of
Seller and the other Asset Selling Companies in, to and under all the following
assets, in each case excluding the Excluded Assets:

(i) office and other supplies and vehicles primarily used or held for use in the
operation or conduct of the Business;

(ii) tangible assets (excluding Inventory, Business Properties and Acquired
Books and Records) that are located at an Operating Location and primarily used
or held for use in the operation or conduct of the Business;

(iii) other tangible assets (excluding Inventory, Business Properties and
Acquired Books and Records) that are exclusively used or held for use by the
Covered Employees in the operation or conduct of the Business;

(iv) the Inventory;

(v) the Acquired Books and Records;

(vi) all Contracts of the Asset Selling Companies (other than those which have
no continuing rights or unperformed obligations) that are primarily used or held
for use in the operation or conduct of the Business, including those set forth
in Section 2.01(b)(vi) of the Seller Disclosure Letter (the “Assigned
Contracts”);

(vii) all rights to the name, trade name and trademarks containing the name
“Reynolds” or a name specified in Section 2.01(b)(vii) of the Seller Disclosure
Letter (collectively, the “Acquired Marks”) and all other Intellectual Property
of any Asset Selling Company exclusively used or held for use in the operation
or conduct of the Business, including the Intellectual Property set forth in
Section 2.01(b)(vii) of the Seller Disclosure Letter (the “Acquired Intellectual
Property”);

(viii) all trade secrets, confidential information, inventions, know-how,
formulae, processes, procedures, research records, records of inventions, test
information, market surveys, marketing know-how, computer software, designs,
industrial models and product specifications of any Asset Selling Company that
are exclusively used or held for use in the operation or conduct of the Business
(the “Acquired Technology”);

(ix) all customer lists and Business specific web sites that are exclusively
used or held for use in the operation or conduct of the Business;

 

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(x) all permits, licenses, approvals, qualifications, product registrations,
safety certifications and other similar authorizations issued to any Asset
Selling Company by Governmental Entities, in each case which are primarily used
or held for use in the operation or conduct of the Business and solely to the
extent legally assignable or transferable from such Asset Selling Company (the
“Acquired Permits”);

(xi) all goodwill to the extent arising from the Business;

(xii) the interests of the applicable Asset Selling Company in the Business
Properties, in each case together with all the applicable Asset Selling
Company’s right, title and interest in all buildings, improvements and fixtures
thereon and all other appurtenances thereto;

(xiii) all Benefit Plan Assets;

(xiv) any asset reflected in a finally determined Closing Statement;

(xv) all telephone numbers primarily used or held for use in the operation or
conduct of the Business;

(xvi) all insurance proceeds required to be remitted to Purchaser pursuant to
Section 7.06;

(xvii) all claims, causes of action, choses in action, rights of recovery,
rights of set-off and other rights of every nature and description (including,
without limitation, (A) all rights arising under warranties, representations and
guarantees made to Seller or any Asset Selling Company and all rights,
regardless of whether asserted, under investigation or otherwise and (B) all
rights to sue for and remedies against past infringements of Acquired
Intellectual Property or Acquired Technology), and all benefits arising
therefrom (collectively, “Rights and Claims”), in each case to the extent
arising from the Business and not otherwise the subject of this Section 2.01;

(xviii) all Transferred Personnel Files; and

(xix) all Intracompany Arrangements and Applicable 30 Days’ Trade Accounts
Receivable.

(c) The term “Excluded Assets” shall mean all the following assets of the
entities specified below which shall be excluded from the Acquired Assets and
shall not be sold, conveyed, assigned, transferred or delivered to Purchaser
pursuant to this Agreement or any Other Transaction Agreement:

(i) Unless specifically stated otherwise in the definition of Acquired Assets,
the business, properties, assets, agreements, contracts, goodwill and rights of
whatever kind and nature, real or personal, tangible or intangible, that are
owned, leased or licensed by any Asset Selling Company and primarily used or

 

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held for use in the operation or conduct of any business of any Asset Selling
Company other than the Business;

(ii) all right, title and interest in, to or under (x) owned or leased real
property of Seller and its Subsidiaries (other than the Transferred
Subsidiaries) other than the interests of the applicable Asset Selling Company
in the Business Properties and (y) any Closed Facility;

(iii) all Rights and Claims of Seller and its Subsidiaries to the extent arising
from any Excluded Liability or any Excluded Asset;

(iv) all assets of and all assets with respect to the Seller Benefit Plans, in
each case, of Seller and its Subsidiaries, other than the Benefit Plan Assets;

(v) all personnel files of Seller and its Subsidiaries to the extent that they
relate to the employees of the Business, other than the Transferred Personnel
Files;

(vi) all records of Seller and its Subsidiaries specifically prepared for use in
connection with the sale of the Business;

(vii) all corporate records of each applicable Selling Company and all financial
and Tax records that form a part of the general ledger of any Selling Company;

(viii) those assets of Seller and its Subsidiaries (except as otherwise
specified in Section 2.01(c)(viii) of the Seller Disclosure Letter) described in
Section 2.01(c)(viii) of the Seller Disclosure Letter that are contemplated to
be used by Seller and its Subsidiaries to provide services to Purchaser after
the Initial Closing pursuant to the Transition Services Agreement;

(ix) (A) all names, trade names and trademarks of Seller and its Subsidiaries
containing the names “Aluminum Company of America” or “Alcoa” or variations
thereof (collectively, the “Excluded Marks”), (B) all Seller’s and its
Subsidiaries’ proprietary software that is not used exclusively at an Operating
Location, (C) (x) the names, trade names and trademarks of Seller and its
Subsidiaries “Reynolux”, “Reynobond” and “Reynolite” and (y) variations
utilizing the “Reyno” prefix (other than the name “Reynolds” or a name specified
in Section 2.01(b)(vii) of the Seller Disclosure Letter) in the building and
construction industries (together with the Excluded Marks, the “Seller Marks”)
and (D) all other Intellectual Property of Seller and its Subsidiaries other
than Transferred Intellectual Property;

(x) all rights of Seller and its Subsidiaries (other than the Transferred
Subsidiaries) under the Transaction Agreements;

(xi) all Intercompany Arrangements due to Seller or its Subsidiaries (other than
Applicable 30 Days’ Trade Accounts Receivable);

 

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(xii) all insurance policies and rights and recoveries under insurance policies
of Seller and its Subsidiaries (other than the Transferred Subsidiaries);

(xiii) all Tax losses and Tax loss carry forwards of any Selling Company and
rights to receive funds, credits and credit carry forwards with respect to any
Taxes of any Selling Company, to the extent attributable to a Pre-Closing Date
Tax Period, including interest thereon, whether or not the foregoing is derived
from the Business;

(xiv) all cash and cash equivalents and marketable securities (except to the
extent included in the Net Cash Balance), including bank accounts, of Seller and
its Subsidiaries (other than the Transferred Subsidiaries); and

(xv) the other assets of Seller or any of its Subsidiaries listed in
Section 2.01(c)(xv) of the Seller Disclosure Letter.

SECTION 2.02. Assumption of Assumed Liabilities of U.S. Country Unit. (a) On the
terms and subject to the conditions set forth in this Agreement, at the Initial
Closing, Purchaser shall assume and agree to pay, honor, perform and discharge,
all obligations and liabilities constituting Assumed Liabilities of the U.S.
Country Unit, including the obligations and liabilities related to or arising
out of the assets, or otherwise referenced, in Annex 3 with respect to the U.S.
Country Unit.

(b) The term “Assumed Liabilities” shall mean all of the obligations and
liabilities, whether absolute or contingent, known or unknown, of Seller or the
other Asset Selling Companies, to the extent arising from the operation or
conduct of the Business, and of the Transferred Subsidiaries, in each case other
than the Excluded Liabilities, including the following:

(i) all obligations and liabilities to the extent arising out of any Acquired
Asset;

(ii) all obligations and liabilities reflected in a finally determined Closing
Statement;

(iii) the Covered Employee Liabilities;

(iv) all obligations and liabilities to the extent arising from the operation or
conduct of the Business on the Business Properties at any time and arising out
of Environmental Law or Releases of Hazardous Substances (including Releases on
or under the Business Properties or in connection with wastes generated or
transported off-site from the Business Properties);

(v) all obligations and liabilities with respect to any indebtedness for
borrowed money of any Transferred Subsidiary to any third party;

(vi) all obligations and liabilities to the extent arising out of any
Intracompany Arrangements and all obligations and liabilities to the extent
arising

 

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out of any of the Applicable 30 Days’ Trade Accounts Payable of any Country
Unit; and

(vii) all other obligations and liabilities to the extent arising from the
operation or conduct of the Business whether before or after the applicable
Closing Date.

(c) The term “Excluded Liabilities” shall mean (i) the following obligations and
liabilities, whether absolute or contingent, known or unknown, of Seller or the
other Asset Selling Companies:

(A) all obligations and liabilities to the extent arising from the operation or
conduct of any business other than the Business;

(B) all obligations and liabilities to the extent arising out of any Excluded
Asset;

(C) all obligations and liabilities with respect to any indebtedness for
borrowed money of any Asset Selling Company to any third party;

(D) all obligations and liabilities with respect to Taxes of any Selling Company
(whether or not related to the Business) or with respect to any Acquired Asset
for a Pre-Closing Date Tax Period, including, in each case, interest thereon;

(E) all obligations and liabilities with respect to any employee of the
Business, other than the Covered Employee Liabilities to the extent arising from
the operation or conduct of the Business before the applicable Closing Date; and

(F) all obligations and liabilities to the extent arising out of any
Intercompany Arrangements (other than the Applicable 30 Days’ Trade Accounts
Payable);

(ii) all obligations and liabilities, whether absolute or contingent, known or
unknown, of the Transferred Subsidiaries to the extent (A) constituting a Former
Site Environmental Liability, (B) arising from the operation or conduct of any
business other than the Business, (C) expressly retained, or agreed to be paid,
by Seller pursuant to this Agreement or (D) such obligations and liabilities are
obligations and liabilities with respect to any employee of the Business, other
than the Covered Employee Liabilities, to the extent arising from the operation
or conduct of the Business before the applicable Closing Date;

(iii) all obligations and liabilities of Seller and its Subsidiaries in respect
of (x) those litigations listed in Section 2.02(c)(iii) of the Seller Disclosure
Letter and (y) any Seller SFP or Seller SFP Payable (other than Purchaser’s
payment obligation under Article IV in respect of Recalculated Seller SFP
Payables).

 

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SECTION 2.03. Excluded Assets and Excluded Liabilities. The Excluded Assets of
the U.S. Country Unit shall not be sold, conveyed, assigned, transferred or
delivered to Purchaser pursuant to this Agreement or any Other Transaction
Agreement, and the Excluded Liabilities of the U.S. Country Unit shall not be
assumed by Purchaser pursuant to this Agreement or any Other Transaction
Agreement.

ARTICLE III

Transfer of Foreign Country Units

SECTION 3.01. Transfer of Foreign Country Units After the Initial Closing. (a)
The parties expect that the transfer to Purchaser of the Foreign Country Units
(including, as applicable, any Acquired Assets, Assumed Liabilities, Shares and
Covered Employees relating thereto) may take place after the Initial Closing.
Notwithstanding anything to the contrary contained in this Agreement, until the
date that the Foreign Country Units are transferred to Purchaser, none of the
assets, liabilities, Transferred Subsidiaries’ Equity Interests, or employees of
such Country Units shall be considered to be, as applicable, any Acquired
Assets, Assumed Liabilities, Shares or Transferred Employees, respectively.

(b) From time to time after the Initial Closing, after all of the conditions set
forth in Article V with respect to a Foreign Country Unit Closing have been
satisfied or waived, the parties shall hold a Foreign Country Unit Closing in
respect of the applicable Foreign Country Unit on the last calendar day of the
month in which such conditions are satisfied (each such closing, a “Foreign
Country Unit Closing”); provided that (i) if such day is not a Business Day, the
Foreign Country Unit Closing shall occur on the immediately preceding Business
Day, (ii) if such Foreign Country Unit Closing would otherwise occur on the last
day of Seller’s fiscal quarter, it shall be postponed until the first Business
Day of Seller’s next fiscal quarter (a “Deferred Foreign Closing”) and (iii) if
such Foreign Country Unit Closing would otherwise occur within five days of the
satisfaction of such conditions, it shall be postponed to the last day of the
next calendar month.

(c) If all the conditions set forth in Article V to a Foreign Country Unit
Closing have been satisfied or waived as of the Initial Closing with respect to
a Foreign Country Unit, such Foreign Country Unit shall be transferred to
Purchaser at an applicable Foreign Country Unit Closing on the same date as the
Initial Closing.

SECTION 3.02. Transfer of Foreign Country Units. The transfer to Purchaser of
the Foreign Country Units (including, as applicable, any Acquired Assets,
Assumed Liabilities, Shares and Covered Employees relating thereto) will be
effected pursuant to foreign transfer agreements (the “Foreign Transfer
Agreements”) on a country-by-country basis. Each Foreign Transfer Agreement
shall be in substantially the same form as either Exhibit A or Exhibit B to this
Agreement, as applicable, in each case except (as Purchaser and Seller shall
reasonably agree) for (i) the deletion of provisions which are inapplicable to
such Foreign Country Unit, (ii) such changes as may be necessary to satisfy the
requirements of applicable local law, (iii) such changes as may be

 

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reasonably agreed upon by Seller and Purchaser regarding employees and employee
benefits matters in order to adapt such agreement to the particular
circumstances of the relevant Foreign Country Unit and country (provided that
such changes shall be consistent with the principles underlying the
corresponding provisions of this Agreement) and (iv) such other changes as may
be agreed upon by Seller and Purchaser.

SECTION 3.03. Excluded Assets and Excluded Liabilities. The Excluded Assets of
any Foreign Country Unit shall not be sold, conveyed, assigned, transferred or
delivered to Purchaser pursuant to this Agreement or any Other Transaction
Agreement, and the Excluded Liabilities of any Foreign Country Unit shall not be
assumed by Purchaser pursuant to this Agreement or any Other Transaction
Agreement. At the Initial Closing and at each Foreign Country Unit Closing, the
Excluded Assets and the Excluded Liabilities of each Country Unit shall be
determined for purposes of such closing with reference to the portion of the
Business conducted by such Country Unit and the assets and Shares of such
Country Unit to be transferred at such closing. The Excluded Assets and the
Excluded Liabilities shall ultimately be determined for all Closings with
reference to all portions of the Business and all assets and Shares that have
been sold to Purchaser.

ARTICLE IV

Closings; Purchase Price Adjustments

SECTION 4.01. Initial Closing. (a) The closing (the “Initial Closing”) of the
purchase and sale of the U.S. Country Unit shall be held at 10:00 a.m. (New York
time) on February 29, 2008; provided that (i) if the conditions set forth in
Article V to the Initial Closing (excluding those conditions intended to be
satisfied at the Initial Closing) shall not have been satisfied or waived by
such date, then the Initial Closing shall be held at 10:00 a.m. (New York time)
on the last Business Day of the month during which such conditions shall have
been satisfied or waived, (ii) if the Initial Closing would otherwise occur on
the last day of Seller’s fiscal quarter, it shall be postponed until the first
Business Day of Seller’s next fiscal quarter (a “Deferred Initial Closing” and,
together with a Deferred Foreign Closing, a “Deferred Closing”) and (iii) in no
event shall the Initial Closing Date be a date earlier than the fifth Business
Day following the last day of the Debt Marketing Period, unless otherwise agreed
by each of Seller and Purchaser.

(b) The Initial Closing shall take place at the offices of Cravath, Swaine &
Moore LLP, Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019, and
each other Closing shall take place at such location or at such other location
as may be reasonably designated by Seller with Purchaser’s consent, which
consent will not be unreasonably withheld.

(c) At the Initial Closing, (i) Purchaser shall pay or cause to be paid to
Seller, in immediately available funds by wire transfer to one or more bank
accounts (designated in writing by Seller at least two Business Days prior to
the Initial Closing Date), cash in U.S. dollars in an aggregate amount equal to
the Initial Closing Purchase Price, and (ii) Purchaser shall deliver or cause to
be delivered to Seller all assumption

 

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agreements and other instruments as may be required under applicable law and
such other documents as Seller may reasonably request to effect the assumption
of the Assumed Liabilities of the U.S. Country Unit (and, if applicable, any
Foreign Country Unit to be transferred at the Initial Closing, in which case the
Initial Closing shall also constitute a Foreign Country Unit Closing) or to
demonstrate satisfaction of the conditions and compliance with the covenants set
forth in, and to carry out the purposes of, this Agreement (provided that in the
case of (i) and (ii) Purchaser shall not be required to enter into any such
requested document that expands or waives any of the representations,
warranties, rights or obligations of the parties set forth in the Transaction
Agreements).

(d) At the Initial Closing, Seller shall, and shall cause the applicable Selling
Company to, deliver to Purchaser (i) such appropriately executed special
warranty deeds, or their equivalent in local jurisdictions (in recordable form),
bills of sale, assignments, stock certificates, stock powers or stock transfer
forms duly endorsed in blank, and other instruments of transfer relating to the
Acquired Assets and Shares of the U.S. Country Unit (and any Foreign Country
Unit to be transferred at the Initial Closing) in form and substance required by
applicable Law and reasonably satisfactory to Purchaser, and (ii) such other
documents as Purchaser may reasonably request to demonstrate satisfaction of the
conditions and compliance with the covenants set forth in, and to carry out the
purposes of, this Agreement (provided that Seller shall not in the case of
(i) and (ii) be required to enter into any such requested document that expands
or waives any of the representations, warranties, rights or obligations of the
parties set forth in the Transaction Agreements).

SECTION 4.02. Foreign Country Unit Closing. (a) At each Foreign Country Unit
Closing, (i) Purchaser shall pay or cause to be paid to Seller, in immediately
available funds by wire transfer to one or more bank accounts (designated in
writing by Seller at least two Business Days prior to such Foreign Country Unit
Closing), cash in U.S. dollars (or in such other foreign currency equivalent,
converted at the current exchange rate, as may be agreed in writing by Seller
and Purchaser) in an aggregate amount equal to the portion of the Worldwide
Purchase Price allocated to the Foreign Country Units to be transferred at such
Foreign Country Unit Closing (which amount shall be calculated based on the
Appraisal conducted pursuant to Section 10.08) and (ii) Purchaser shall deliver
or cause to be delivered to Seller the applicable Foreign Transfer Agreements,
all assumption agreements and other instruments as may be required under
Applicable Law, and such other documents as Seller may reasonably request to
effect the assumption of the Assumed Liabilities of the Foreign Country Units to
be transferred at such Foreign Country Unit Closing or to demonstrate
satisfaction of the conditions and compliance with the covenants set forth in,
and to carry out the purposes of, this Agreement (provided that in the case of
(i) and (ii) Purchaser shall not be required to enter into any such requested
document that expands or waives any of the representations, warranties, rights
or obligations of the parties set forth in the Transaction Agreements).

 

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(b) At each Foreign Country Unit Closing, Seller shall deliver or cause to be
delivered the applicable Foreign Transfer Agreements and, to the extent
applicable, the documentation set forth in Section 4.01(d) above.

(c) Seller and Purchaser shall mutually agree on a location outside the United
States for each Foreign Country Unit Closing; provided that, with respect to any
Foreign Country Unit Closing, if a location is not agreed upon by Seller and
Purchaser, such Foreign Country Unit Closing shall take place (i) in the case of
a transfer of Shares of a First Tier Transferred Subsidiary, in the country of
organization of such First Tier Transferred Subsidiary, and (ii) in the case of
a transfer of Acquired Assets and Assumed Liabilities, in the country where the
portion of the Business conducted by such Country Unit is primarily conducted.

SECTION 4.03. Purchase Price Adjustments. (a) Closing Statement Procedure.
Within 45 days after each Closing, Seller shall prepare and deliver to Purchaser
a statement for each Country Unit transferred on such Closing (with respect to
such Country Unit, the “Closing Statement”) setting forth for such Country Unit
its Working Capital, as well as the Net Cash Balance, Indebtedness Balance,
Recalculated Seller SFP Payables and Workers Comp Accrual (with respect to such
Country Unit, its “Closing Working Capital”, “Closing Net Cash Balance”,
“Closing Indebtedness”, “Closing Recalculated Seller SFP Payables” and “Closing
Workers Comp Accrual”, respectively), as of 11:59 p.m. on the applicable Closing
Date (provided that (x) if the applicable Closing Date is the first Business Day
of Seller’s fiscal quarter, the foregoing amounts shall be determined as of
11:59 p.m. on the last day of the month immediately proceeding the month of such
Closing Date and (y) if the applicable Closing Date is neither the first
Business Day of Seller’s fiscal quarter nor the last calendar day of the month,
the foregoing amounts shall be determined as of 11:59 p.m. on the last calendar
day of the month in which such Closing occurs; provided further that in either
case such calculations shall be made on a pro forma basis to take into account
any applicable changes occurring as a result of the consummation of the
transactions contemplated by this Agreement on the applicable Closing Date,
including the settlement of Intercompany Arrangements as referred to in clause
(F) of Section 4.03(c)). Purchaser shall provide Seller and its independent
auditors reasonable access upon reasonable notice during regular business hours
to the personnel, properties, books and records of the Business to facilitate
Seller’s preparation of each Closing Statement.

(b) Purchaser Review and Disagreement Procedures. During the 30-day period
following Purchaser’s receipt of a Closing Statement, Purchaser and its
independent auditors shall be permitted to review the non-proprietary working
papers of Seller relating to such Closing Statement. Each Closing Statement
shall become binding upon the parties and deemed finally determined on the
thirtieth day following delivery thereof unless Purchaser delivers a notice of
its disagreement to Seller with respect to such Closing Statement (the “Notice
of Disagreement”). Any Notice of Disagreement shall specify with reasonable
detail and specificity the nature of any disagreement so asserted and shall
include only disagreements based on mathematical errors or based on Closing
Working Capital, Closing Net Cash Balance, Closing Indebtedness, Closing
Recalculated Seller SFP Payables or Closing Workers Comp

 

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Accrual set forth on such Closing Statement not being calculated in accordance
with this Section 4.03 or mathematical error; provided that in no event shall
Purchaser dispute an amount of less than the WC Minimum Claim Amount with
respect to any individual account balance (and such amount of less than the WC
Minimum Claim Amount shall not be aggregated for purposes of
Section 4.03(d)(i)(C)); provided further that one or more items arising by
virtue of the same circumstances shall for these purposes be treated as one
item. During the 30-day period following the delivery of a Notice of
Disagreement, Seller and Purchaser shall seek in good faith to resolve in
writing any differences that they may have with respect to the matters specified
in the Notice of Disagreement and agree on a final determination of Closing
Working Capital, Closing Net Cash Balance, Closing Indebtedness, Closing
Recalculated Seller SFP Payables and Closing Workers Comp Accrual. During such
period, Seller and its independent auditors shall have access to the
non-proprietary working papers of Purchaser prepared in connection with the
Notice of Disagreement. At the end of such 30-day period, Seller and Purchaser
shall submit to an internationally recognized, independent public accounting
firm (the “Accounting Firm”) for resolution any and all matters that remain in
dispute and that were properly included in the Notice of Disagreement, in the
form of a written brief. The Accounting Firm shall be jointly selected by Seller
and Purchaser or, if Seller and Purchaser are unable to agree on such selection,
Seller and Purchaser shall each select an independent public accounting firm and
such accounting firms shall jointly select the Accounting Firm. Seller and
Purchaser shall jointly request that the Accounting Firm’s work be conducted in
an expedited manner, and Seller and Purchaser shall use reasonable efforts to
cause the Accounting Firm to render a determination resolving the matters
submitted thereto within 30 days after submission. The determination of the
Accounting Firm shall be final and binding on the parties, and judgment may be
entered upon the determination of the Accounting Firm in any court having
jurisdiction over the party against which such determination is to be enforced.
The fees and expenses of the Accounting Firm incurred pursuant to this
Section 4.03 shall be borne 50% by Seller and 50% by Purchaser.

(c) Definitions. The term “Working Capital” shall mean, as of any date with
respect to any Country Unit, (x) the sum of the account balances for the
accounts listed in Section 4.03(c)(i) of the Seller Disclosure Letter related to
(A) accounts receivable (including Applicable 30 Days’ Trade Accounts
Receivable, but excluding Intracompany Arrangements and Applicable Intercompany
Arrangements terminated pursuant to Section 10.05(b)(i)), (B) inventory
(excluding LIFO reserves, but including Inventory Reserves), and (C) prepaid and
other current assets, less (y) the sum of the account balances for the accounts
listed in Section 4.03(c)(i) of the Seller Disclosure Letter related to
(A) accounts payable (including Applicable 30 Days’ Trade Accounts Payable, but
excluding any Seller SFP Payables, Intracompany Arrangements and Applicable
Intercompany Arrangements terminated pursuant to Section 10.05(b)(i)) and
(B) current accrued liabilities (which shall not include any amounts in respect
of (1) any Closing Workers Comp Accrual or (2) any claims for which the Seller
shall be responsible under Section 12.01(g)(ii) and any claims described in
Section 12.01(g)(ii) to the extent that such claims are covered by insurance
paid by Seller and its Affiliates and under which Purchaser will become the
beneficiary as set forth in Section 12.01(g)(ii)(A)), calculated consistent
(i) first with the accounting policies and

 

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procedures for such accounts employed in the preparation of the audited
financial statements for December 31, 2006 referred to in Section 6.04,
(ii) second, to the extent any circumstance relevant to such calculation as of
the applicable Closing was not substantially addressed by such policies and
procedures so employed for such audited financial statements, Seller’s
applicable accounting policies and procedures to the extent such policies and
procedures are compliant with GAAP and (iii) third, to the extent Seller does
not have an applicable accounting policy and/or procedure or such policy and/or
procedure is not compliant with GAAP, an applicable policy and/or procedure
selected by Seller that is compliant with GAAP, except that inventory will be
valued on an average-cost or standard cost basis rather than a last-in,
first-out basis. The specific accounts which will be included in the calculation
of Working Capital are presented in Section 4.03(c)(i) of the Seller Disclosure
Letter. The term “Net Cash Balance” shall mean, as of any date with respect to
any Country Unit, all cash, cash equivalents and cash receipts of such Country
Unit as of the close of business on such date, including checks received (to the
extent such check is honored) and electronic funds transfer payments initiated
at or prior to the close of business on such date but not yet credited for value
(to the extent already received) and payments from customers not yet applied to
specific invoices of the Business, less outstanding checks (checks issued but
not yet presented for payment). The term “Indebtedness Balance” shall mean, as
of any date with respect to any Country Unit, the unpaid principal amount of,
and accrued interest on, all indebtedness for borrowed money of all Transferred
Subsidiaries that are part of such Country Unit to any third party as of the
close of business on such date, and all capital leases that had previously been
classified by Seller as capital leases in the Audited Financial Statements;
provided that Closing Indebtedness shall not include expenses, breakage,
attorneys’ fees and other fees and prepayment penalties, if any, payable by
Seller or any Subsidiary to the extent not payable by a Transferred Subsidiary
to repay such indebtedness as of the applicable Closing. The specific accounts
included in the Indebtedness Balance and the Net Cash Balance are presented in
Section 4.03(c)(ii) of the Seller Disclosure Letter. For the avoidance of doubt,
the foregoing notwithstanding, (A) Working Capital with respect to any Country
Unit shall not include any amounts included in the Net Cash Balance or
Indebtedness Balance with respect to such Country Unit, (B) neither Working
Capital nor the Indebtedness Balance for any Country Unit shall include any
assets or liabilities related to Taxes (other than liabilities for U.S. federal,
state, local and foreign payroll Taxes) or any Seller Pension Plans, (C) Working
Capital shall not include any asset or liability retained by Seller and its
Subsidiaries (other than the Transferred Subsidiaries) hereunder, (D) the Target
Working Capital and the Closing Working Capital with respect to any JV Entity
sold pursuant to Section 7.11 shall be equal to zero, (E) if any Shares of a JV
Entity are sold by Seller or its Subsidiaries pursuant to Section 7.11, no
adjustment shall be made pursuant to this Section 4.03 with respect to such JV
Entity, (F) Net Cash Balance and Indebtedness Balance for any Country Unit shall
be calculated following the settlement prior to or as of the applicable Closing
of Intercompany Arrangements for such Country Unit pursuant to Section 10.05
(other than, for the avoidance of doubt, Applicable 30 Days’ Trade Accounts
Receivable and Applicable 30 Days’ Trade Accounts Payable) and (G) with respect
to any Transferred Subsidiary that is not owned 100% by a Selling Company as of
the applicable Closing, the Net Cash Balance and Indebtedness Balance

 

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applicable thereto shall be the percentage of such amounts as is equal to the
percentage of the outstanding equity or entitlement to earnings of such
Transferred Subsidiary as is owned by such Selling Company. With respect to any
Country Unit, Closing Working Capital, Closing Net Cash Balance, Closing
Indebtedness Balance and Closing Recalculated Seller SFP Payables any amounts
denominated in foreign currencies will be translated into U.S. dollars as of the
applicable Closing at the month-end exchange rates in accordance with GAAP. The
foregoing principles are referred to in this Agreement as the “Closing Statement
Principles”. The scope of the disputes to be resolved by the Accounting Firm
shall be limited to whether calculations were done in accordance with the
Closing Statement Principles and whether there were mathematical errors in the
Closing Statement, and the Accounting Firm is not authorized or permitted to
make any other determination. Without limiting the generality of the foregoing,
the Accounting Firm is not authorized or permitted to make any determination as
to the accuracy of Section 6.04 or any other representation or warranty in this
Agreement or as to compliance by any Selling Company or Transferred Subsidiary
with any of the covenants in this Agreement (other than this Section 4.03). Any
determinations by the Accounting Firm, and any work or analyses performed by the
Accounting Firm, in connection with its resolution of any dispute under this
Section 4.03 may be admitted but shall not be dispositive evidence of any breach
by Seller in any suit, action or proceeding between the parties other than to
the extent necessary to enforce the resolution of the Accounting Firm.

(d) Adjustment of Worldwide Purchase Price. The Worldwide Purchase Price shall
be adjusted as follows:

(i) Working Capital.

(A) If the Closing Working Capital within all Country Units acquired on the same
Closing Date exceeds the Target Working Capital within all such Country Units,
then Purchaser shall, within 5 Business Days after the Closing Statement becomes
final and binding on the parties, pay to Seller by wire transfer of immediately
available funds to a bank account designated by Seller cash (in U.S. dollars) in
an amount equal to such excess amount, together with interest thereon at the
Applicable Interest Rate from and including the Closing Date on which such
Country Units were transferred to but not including the date of such payment.

(B) If the Target Working Capital within all Country Units acquired on the same
Closing Date exceeds the Closing Working Capital within all such Country Units
acquired on the same Closing Date, then Seller shall, within 5 Business Days
after the Closing Statement becomes final and binding on the parties, pay to
Purchaser by wire transfer of immediately available funds to a bank account
designated by Purchaser cash (in U.S. dollars) in an amount equal to such excess
amount, together with interest thereon at the Applicable Interest Rate from and
including the Closing Date on which such Country Units were transferred to but
not including the date of such payment.

 

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(C) Notwithstanding the foregoing provisions of this Section 4.03(d)(i), no
adjustment to the Worldwide Purchase Price pursuant to Sections 4.03(d)(i)(A) or
4.03(d)(i)(B) shall be made unless the aggregate amount of all such adjustments
(whether an increase or a decrease) would exceed the WC Threshold Amount (on a
cumulative basis), in which case the full amount of the adjustment, inclusive of
such WC Threshold Amount, shall be made.

(ii) Closing Net Cash Balance, Closing Indebtedness Balance, Estimated Accrued
German Pension Liability and Closing Recalculated Seller SFP Payables.

(A) If the sum of (1) the Closing Net Cash Balance (which shall be considered a
positive number), (2) the Closing Indebtedness Balance (which shall be
considered a negative number), (3) the Estimated Accrued German Pension
Liability (if any) (which shall be considered a negative number) and (4) the
Closing Recalculated Seller SFP Payables (which shall be considered a positive
number) within a Country Unit is positive, the Worldwide Purchase Price shall be
deemed increased by such amount, and Purchaser shall, within 5 Business Days
after the Closing Statement becomes final and binding on the parties, pay to
Seller by wire transfer of immediately available funds to a bank account
designated by Seller cash in an amount equal to such increase, together with
interest thereon at the Applicable Interest Rate from and including the Closing
Date on which such Country Unit was transferred to but not including the date of
such payment.

(B) If the sum of (1) the Closing Net Cash Balance (which shall be considered a
positive number), (2) the Closing Indebtedness Balance (which shall be
considered a negative number), (3) the Estimated Accrued German Pension
Liability (if any) (which shall be considered a negative number) and (4) the
Closing Recalculated Seller SFP Payables (which shall be considered a positive
number) within a Country Unit is negative, the Worldwide Purchase Price shall be
deemed decreased by such amount, and Seller shall, within 5 Business Days after
the Closing Statement becomes final and binding on the parties, pay to Purchaser
by wire transfer of immediately available funds to a bank account designated by
Purchaser cash in an amount equal to such decrease, together with interest
thereon at the Applicable Interest Rate from and including the Closing Date on
which such Country Unit was transferred to but not including the date of such
payment.

(iii) There shall be no adjustment to the Worldwide Purchase Price with respect
to the Closing Workers Comp Accrual, and the parties acknowledge that it has
been included on the Closing Statement only for the purpose of applying
Section 12.01(g)(iii).

 

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ARTICLE V

Conditions to Closing

SECTION 5.01. Conditions to Purchaser’s Obligation on the Initial Closing Date.
The obligation of Purchaser to consummate the Initial Closing is subject to the
satisfaction (or waiver by Purchaser) as of the Initial Closing of the following
conditions:

(i) (A) The representations and warranties of Seller set forth in Sections 6.03,
6.08, 6.09(b), 6.15(c), 6.16(b), 6.16(f) and 6.18 shall be true and correct in
all material respects as of the Initial Closing Date as though made on such date
(or, in each case, as of any earlier date as to which such representation and
warranty speaks), and (B) all other representations and warranties of Seller
made in this Agreement (without regard to any qualifications therein as to
materiality or Business Material Adverse Effect) shall be true and correct as of
the date of this Agreement and as of the Initial Closing Date as though made on
such date (or, in each case, as of any earlier date as to which such
representation and warranty speaks); provided that clause (B) of this condition
shall be deemed satisfied unless the failure of any such other representations
and warranties to be true and correct, individually or in the aggregate, on any
such date has had, or is reasonably likely to have, a Business Material Adverse
Effect. Seller shall have delivered to Purchaser a certificate dated the Initial
Closing Date and signed by an authorized officer of Seller on behalf of Seller
confirming the foregoing.

(ii) Seller shall have performed, or shall have caused its Subsidiaries to have
performed, in all material respects the covenants required by the Transaction
Agreements to be performed by Seller or its Subsidiaries, as the case may be, by
the time of the Initial Closing. Seller shall have delivered to Purchaser a
certificate dated as of the Initial Closing Date and signed by an authorized
officer of Seller on behalf of Seller confirming the foregoing.

(iii) No preliminary or permanent injunction or order that would prohibit the
consummation of the Initial Closing shall be in effect, and there shall be no
proceeding pending or threatened by any Governmental Entity that is reasonably
likely to result in such a prohibition.

(iv) The waiting periods applicable to the transaction contemplated by the
Transaction Agreements under the antitrust or trade regulation laws and
regulations in the jurisdictions set forth in Section 5.01(iv) of the Seller
Disclosure Letter shall have expired or been terminated.

(v) Since the date of this Agreement, there shall have been no facts, changes,
events, developments, circumstances or conditions which have had, or are
reasonably likely to have, individually or in the aggregate, a Business Material
Adverse Effect.

 

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(vi) In connection with Seller’s Avenel, New Jersey, facility and compliance
with the New Jersey Industrial Site Recovery Act, Seller shall have obtained
from the New Jersey Department of Environmental Protection either (A) an
approval of Seller’s Remediation in Progress Waiver application pursuant to
N.J.A.C. 7:26B-5.4 or (B) a Remediation Agreement pursuant to N.J.A.C.
7:26B-4.1.

SECTION 5.02. Conditions to Seller’s Obligation on the Initial Closing Date. The
obligation of Seller to consummate the Initial Closing is subject to the
satisfaction (or waiver by Seller) as of the Initial Closing of the following
conditions:

(i) The representations and warranties of Purchaser made in this Agreement
(without regard to any qualifications therein as to materiality or Purchaser
Material Adverse Effect) shall be true and correct as of the date of this
Agreement and as of the Initial Closing Date as though made on such date (or, in
each case, as of any earlier date as to which such representation and warranty
speaks); provided that this condition shall be deemed satisfied unless the
failure of any such representations and warranties to be true and correct,
individually or in the aggregate, as of such date has had, or is reasonably
likely to have, a Purchaser Material Adverse Effect. Purchaser shall have
delivered to Seller a certificate dated the Initial Closing Date and signed by
an authorized officer of Purchaser on behalf of Purchaser confirming the
foregoing.

(ii) Purchaser shall have performed in all material respects the covenants
required by the Transaction Agreements to be performed by Purchaser, as the case
may be, by the time of the Initial Closing. Purchaser shall have delivered to
Seller a certificate dated as of the Initial Closing Date and signed by an
authorized officer of Purchaser on behalf of Purchaser confirming the foregoing.

(iii) No preliminary or permanent injunction or order that would prohibit the
consummation of the Initial Closing shall be in effect, and there shall be no
proceeding pending or threatened by any Governmental Entity that is reasonably
likely to result in such a prohibition.

(iv) The waiting periods applicable to the transaction contemplated by the
Transaction Agreements under the antitrust or trade regulation laws and
regulations in the jurisdictions set forth in Section 5.01(iv) of the Seller
Disclosure Letter shall have expired or been terminated.

SECTION 5.03. Conditions to Foreign Country Unit Closings. (a) The obligation of
Purchaser to consummate the Foreign Country Unit Closing with respect to any
Foreign Country Unit is subject to the satisfaction (or waiver by Purchaser) as
of such Foreign Country Unit Closing of the following conditions as they relate
to the applicable Foreign Country Unit Closing:

(i) No preliminary or permanent injunction or order that would prohibit the
consummation of the transfer of such Foreign Country Unit at such Foreign

 

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Country Unit Closing shall be in effect, and there shall be no proceeding
pending or threatened by any Governmental Entity that is reasonably likely to
result in such a prohibition.

(ii) All material authorizations, consents, orders or approvals of, or material
declarations or filings with, or expirations of material waiting periods imposed
by, any Governmental Entity legally required for the consummation of the
applicable Foreign Country Unit Closing shall have been obtained or filed or
shall have occurred.

(b) The obligation of Seller to consummate the Foreign Country Unit Closing with
respect to any Foreign Country Unit is subject to the satisfaction (or waiver by
Seller) as of such Foreign Country Unit Closing of the following conditions as
they relate to the applicable Foreign Country Unit Closing:

(i) No preliminary or permanent injunction or order that would prohibit the
consummation of the transfer of such Foreign Country Unit at such Foreign
Country Unit Closing shall be in effect, and there shall be no proceeding
pending or threatened by any Governmental Entity that is reasonably likely to
result in such a prohibition.

(ii) All material authorizations, consents, orders or approvals of, or material
declarations or filings with, or expirations of material waiting periods imposed
by, any Governmental Entity legally required for the consummation of the
applicable Foreign Country Unit Closing shall have been obtained or filed or
shall have occurred.

(iii) For purposes of a Closing with respect to any Transferred Subsidiary that
is a JV Entity, each stockholder or other equity interest holder of such
Transferred Subsidiary shall have waived any and all consent and pre-emptive or
similar rights that would otherwise be exercisable by such stockholder or equity
interest holder in connection with the purchase by Purchaser or its Affiliates
of interests in such JV Entity or such rights shall have expired by their terms.

SECTION 5.04. Frustration of Closing Conditions. Neither Purchaser nor Seller
may rely on the failure of any condition set forth in this Article V to be
satisfied if such failure was caused by such party’s failure to act in good
faith or to use its reasonable best efforts to cause each Closing to occur, as
required by Section 10.03.

ARTICLE VI

Representations and Warranties of Seller

Except as set forth in the disclosure letter of Seller delivered to Purchaser
immediately prior to the execution and delivery of this Agreement, which letter
shall refer to the relevant Articles and Sections of this Agreement (provided
that disclosure of any fact or item in any portion of the letter with respect to
a particular Article or Section of this Agreement shall, should the existence of
the fact or item be reasonably apparent to

 

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relate to any other Article or Section of this Agreement, be deemed to be
disclosed with respect to such other Article or Section of this Agreement to
which it relates) (such disclosure letter, the “Seller Disclosure Letter”),
Seller hereby represents and warrants to Purchaser as follows:

SECTION 6.01. Organization, Standing and Authority. (a) Seller. Seller is, and,
as of each Foreign Country Unit Closing will be, a corporation duly organized,
validly existing and in good standing under the laws of the State of
Pennsylvania. Seller has all requisite corporate power and authority to conduct
the Business in the United States in all material respects as it is currently
conducted and to own, lease and operate the assets and properties used in
connection therewith. Seller has all requisite corporate power and authority to
enter into the Transaction Agreements to which it is a party and to consummate
the transactions contemplated thereby. As of each Foreign Country Unit Closing,
Seller will have all requisite corporate power and authority to consummate the
transactions contemplated by the Transaction Agreements to occur on such date.
All corporate acts and other proceedings required to be taken by Seller to
authorize the execution, delivery and performance of the Transaction Agreements
to which it is a party and the consummation of the transactions contemplated
thereby have been duly and properly taken. This Agreement has been, and each of
the Other Transaction Agreements to which Seller is a party will be, duly
executed and delivered by Seller and this Agreement constitutes, and upon
execution each Other Transaction Agreement will constitute, the legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, subject as to enforceability to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws affecting
creditors’ rights generally from time to time in effect.

(b) Other Selling Companies. As of each applicable Closing, each relevant
Selling Company (other than Seller) (i) will be, duly organized and validly
existing and (except to the extent that the failure to be so organized and
validly existing would not adversely affect the ability to consummate the
transactions contemplated hereby on the applicable Closing Date and except to
the extent that applicable law in the relevant jurisdiction does not recognize
such a concept) in good standing under the laws of its jurisdiction of
organization, (ii) will have, all requisite corporate or organizational power
and authority to conduct the part of the Business currently conducted by it in
all material respects as it is currently conducted and to own, lease and operate
the assets and properties used in connection therewith, (iii) will have all
requisite corporate or organizational power and authority to enter into the
Transaction Agreements to which it is or is contemplated to be a party and to
consummate the transactions contemplated thereby, and (iv) will have all
corporate or organizational acts and other proceedings required to be taken by
each relevant Selling Company (other than Seller) to authorize the execution,
delivery and performance of the Transaction Agreements to which it is or is
contemplated to be a party and the consummation of the transactions contemplated
thereby shall have been duly and properly taken. Each of the Transaction
Agreements to which a Selling Company (other than Seller) is or is contemplated
to be a party when duly executed and delivered by the relevant Selling Company
shall constitute the legal, valid and binding obligation of such Selling
Company, enforceable against such Selling Company in accordance with its terms,
subject as to enforceability to applicable

 

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bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws affecting creditors’ rights generally from time to time in effect.

(c) Transferred Subsidiaries. As of the applicable Closing each relevant
Transferred Subsidiary (i) will be, duly organized and validly existing under
the laws of its jurisdiction of organization, (ii) will have, all requisite
corporate or organizational power and authority to conduct the part of the
Business currently conducted by it in all material respects as it is currently
conducted and to own, lease and operate the assets and properties used in
connection therewith, and (iii) will be (A) in good standing under the law of
its jurisdiction of organization (in so far as applicable law in the relevant
jurisdiction recognizes such a concept) and (B) duly qualified to do business in
each jurisdiction (where its conduct of the Business requires such
qualification), except for any failure to be in good standing or so qualified
which, individually or in the aggregate, is not reasonably likely to have a
Business Material Adverse Effect. Seller has made available to Purchaser true
and complete copies of the organizational documents, in each case as in effect
on the date of this Agreement, of each Transferred Subsidiary.

SECTION 6.02. No Violation; Consents and Approvals. (a) The execution and
delivery of this Agreement by Seller does not, and the execution and delivery by
each of the Selling Companies of the Other Transaction Agreements to which it is
a party, and the consummation of the transactions contemplated hereby and
thereby and compliance with the terms hereof and thereof will not, (i) conflict
with or result in any violation of any provision of the certificate of
incorporation or by-laws of Seller or the comparable organizational documents of
any other Selling Company, (ii) materially conflict with, result in a material
violation or breach of, or constitute a material default, or give rise to any
material right of termination, revocation, modification, cancellation or
acceleration (whether after the filing of notice, the lapse of time or both)
under, any Material Contract or result in the creation of any material Lien on
any of the assets or properties of the Business or the Transferred Subsidiaries,
or (iii) conflict with or result in a violation of any Law applicable to any of
the Selling Companies or the Transferred Subsidiaries or to the property or
assets of any of the Selling Companies, except for any such conflict or
violation which, individually or in the aggregate, is not or is not reasonably
likely to be material.

(b) No consent, approval, license, permit, order or authorization of,
registration, declaration or filing with, or notice to, any domestic or foreign
court, administrative or regulatory agency or other governmental authority
(each, a “Governmental Entity”) is required to be obtained or made by or with
respect to any of the Selling Companies or Transferred Subsidiaries in
connection with the execution and delivery of the Transaction Agreements or the
consummation of the transactions contemplated thereby, other than (i) those
required to be made or obtained pursuant to the HSR Act or any other antitrust
or competition law or regulation, (ii) compliance with and filings under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, (iii) compliance with and filings or notices required by
the rules and regulations of the New York Stock Exchange, (iv) those that may be
required solely by reason of Purchaser’s (as opposed to any third party’s)
participation in the transactions contemplated by the Transaction Agreements and
(v) such other

 

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consents, approvals, licenses, permits, orders, authorizations, registrations,
declarations or filings the failure of which to be obtained or made,
individually or in the aggregate, is not or is not reasonably likely to be
material.

SECTION 6.03. Transferred Subsidiaries’ Equity Interests. (a) Except as set
forth in Section 6.03(a) of the Seller Disclosure Letter, after giving effect to
the transactions contemplated by the Transaction Agreements, Purchaser will own
as of the applicable Closing, directly or indirectly, all equity interests in
each Transferred Subsidiary, including the Shares, free and clear of Liens
(other than those created by Purchaser). As of the applicable Closing, all of
the Transferred Subsidiaries’ Equity Interests will be validly issued, fully
paid and non-assessable. All of the Transferred Subsidiaries are set forth in
Annex 4 to this Agreement.

(b) As of the applicable Closing, no relevant Transferred Subsidiaries’ Equity
Interests shall have been issued in violation of, or shall be subject to, any
preemptive or subscription rights. As of the applicable Closing, except as
contemplated by this Agreement, there will be no outstanding warrants, options,
convertible or exchangeable securities, subscriptions, contracts or other
rights, commitments or agreements pursuant to which any relevant Transferred
Subsidiary is or may become obligated to issue, transfer, sell, purchase,
return, redeem or retire any shares of capital stock or other equity securities
of any Transferred Subsidiary. As of the applicable Closing, the relevant
Transferred Subsidiaries’ Equity Interests will not be subject to any voting
trust or other contract, agreement, arrangement or commitment, including any
such contract, agreement, arrangement or commitment restricting or otherwise
relating to the voting, dividend rights or disposition of the Transferred
Subsidiaries’ Equity Interests, other than as contemplated by this Agreement.

SECTION 6.04. Financial Statements. Attached to Section 6.04 of the Seller
Disclosure Letter are the following financial statements of the Business
(including, in the case of the Audited Financial Statements, the footnotes
thereto): (i) for each of (A) the “Closure Systems International” division and
(B) the “Consumer Products”, “Flexible Packaging” and “Reynolds Food Packaging”
divisions (on a combined basis), the audited balance sheets as of December 31,
2006 and 2005, and the related audited statements of income, comprehensive
income and enterprise capital and cash flows for each of the two years in the
period ended December 31, 2006, which financial statements have been reported on
by, and are accompanied by the report of, PricewaterhouseCoopers LLP
(collectively, the “Audited Financial Statements”), and (ii) for each of (A) the
“Closure Systems International” division and (B) the “Consumer Products”,
“Flexible Packaging” and “Reynolds Food Packaging” divisions (on a combined
basis), the unaudited balance sheet as of June 30, 2007, and the related
unaudited statement of income for the six-month period ended June 30, 2007
(collectively, the “Unaudited Financial Statements”). The Audited Financial
Statements have been prepared in accordance with GAAP, consistently applied, and
fairly present in all material respects the financial position of the Business
as of December 31, 2006 and 2005, and the results of its operations and its cash
flows for each of the two years in the period ended December 31, 2006. The
Unaudited Financial Statements fairly present in all material respects the
financial position and results of operations of the Business as of the date and
for the period set forth therein, as

 

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prepared in accordance with the Basis of Financial Statement Presentation set
forth in Section 6.04 of the Seller Disclosure Letter, consistently applied,
which conforms with GAAP, except as set forth in Section 6.04 of the Seller
Disclosure Letter.

SECTION 6.05. Absence of Changes or Events. Since June 30, 2007 to the date of
this Agreement, there have been no facts, changes, events, developments,
circumstances or conditions which have had, or are reasonably likely to have,
individually or in the aggregate, a Business Material Adverse Effect. Since
June 30, 2007 to the date of this Agreement, the Selling Companies and the
Transferred Subsidiaries have carried on the Business, in all material respects,
in the ordinary course of business (except for the devotion of management time
and attention to meetings and presentations in connection with the sale of the
Business or as otherwise expressly contemplated by the Transaction Agreements).
Neither Seller nor any of its Subsidiaries has taken any action between June 30,
2007 and the date of this Agreement that, if taken after the date of this
Agreement, would constitute a breach of any of clauses (i), (iii), (xii),
(xiii) and (xv) of Section 7.02; provided, however, that in the case of
Section 7.02(iii), no such increases in compensation or benefits shall be deemed
to constitute a breach of Section 7.02(iii), unless such increases in
compensation or benefits are material. Neither Seller nor any of its
Subsidiaries has taken any action between September 30, 2007, and the date of
this Agreement that, if taken after the date of this Agreement, would constitute
a breach of clause (iv) of Section 7.02.

SECTION 6.06. Brokers. No broker, investment banker, financial advisor or other
person, other than Lehman Brothers, the fees and expenses of which will be paid
by Seller, is entitled to any broker’s, finder’s, financial advisor’s or other
similar fee or commission in connection with the Transaction Agreements or the
transactions contemplated thereby based upon arrangements made by or on behalf
of any Selling Company or Transferred Subsidiary.

SECTION 6.07. Taxes. Except as set forth in Section 6.07 of the Seller
Disclosure Letter, (i) each of the Transferred Subsidiaries has timely filed, or
caused to be timely filed on its behalf, all material Tax Returns required to be
filed by it, and each such Tax Return is true, correct and complete in all
material respects, (ii) each of the Transferred Subsidiaries has timely paid all
material Taxes shown as due and payable on all Tax Returns described in
clause (i) above, (iii) no material claim for Taxes has been asserted or
threatened in writing with respect to the Transferred Subsidiaries or the
Acquired Assets, (iv) no extension or waiver of the statute of limitations has
been granted for any material Tax Returns reflecting the income of any
Transferred Subsidiary, which statute (after giving effect to such extension or
waiver) has not yet expired, (v) as of the date of this Agreement, none of the
Transferred Subsidiaries or any Asset Selling Company is subject to any current
audit, action, suit or proceedings with respect to any material Taxes or
material Tax Returns, (vi) there are no material Tax allocation, Tax
indemnification or Tax sharing agreements to which any Transferred Subsidiary is
a party or that constitutes an Acquired Asset or Assumed Liability, (vii) none
of the Transferred Subsidiaries is required to make any material adjustments
pursuant to Section 481(a) of the Code or any similar provision of foreign,
state or local law by reason of a change in accounting method or has a request
pending with any Taxing Authority for permission to

 

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make any material change in accounting methods, and (viii) none of the
Transferred Subsidiaries has participated in a “listed transaction” within the
meaning of Treasury Regulations Section 1.6011-4(b)(2).

SECTION 6.08. Title to Assets. (a) As of the applicable Closing, Seller, another
Selling Company or a Transferred Subsidiary will have good and valid title to
(or valid leases in respect of) and, in the case of Seller or another Selling
Company, will convey to Purchaser title to the assets reflected on the unaudited
balance sheet dated as of June 30, 2007 included in the Unaudited Financial
Statements or thereafter acquired, except for assets sold or otherwise disposed
of in the ordinary course of business, in each case free and clear of all liens,
options, charges, security interests, pledges, mortgages and other encumbrances
(“Liens”) except (i) mechanics’, carriers’, workmen’s, repairmen’s or other
similar liens arising or incurred in the ordinary course of business on which
payment is not delinquent, except for such delinquencies that occur from time to
time in the ordinary course of business, (ii) conditional sales contracts and
equipment leases entered into in the ordinary course of business, (iii) Liens
for Taxes, assessments and other governmental charges which are not due and
payable or which may thereafter be paid without penalty or which are being
contested in good faith and (iv) other Liens which do not materially impair the
continued use and operation of an asset as it is currently used and operated in
the conduct of the Business as currently conducted (the Liens described above,
together with the Liens referred to in clauses (ii) through (vi) of
Section 6.18, are referred to collectively as “Permitted Liens”).

(b) This Section 6.08 does not relate to matters with respect to Transferred
Contracts, which are the subject of Section 6.09, Transferred Permits, which are
the subject of Section 6.15, Transferred Intellectual Property, which is the
subject of Section 6.16, and real estate, which is the subject of Section 6.18.

SECTION 6.09. Contracts. (a) Section 6.09 of the Seller Disclosure Letter sets
forth a true and complete and correct list, as of the date of this Agreement, of
each Transferred Contract (other than the Transaction Agreements and any
agreements, leases and commitments expressly contemplated by the Transaction
Agreements) that is:

(i) an employment, severance, change of control, consulting or similar plan,
program or agreement with a Covered Employee (other than any such plan, program
or agreement that is described in clause (i) or (ii) of Section 6.11(a)) which
is not terminable at will without penalty or liability and which requires the
payment of an amount (other than ordinary severance pay) in excess of $500,000
(or the equivalent amount in any other currency based on the Applicable Spot
Rate as of the date five Business Days prior to the date of this Agreement) per
annum;

(ii) an agreement containing a covenant that following the applicable Closing
would by its terms (A) limit the freedom of a Transferred Subsidiary or a
purchaser of the Business to compete in any line of business with any person or
(B) contains exclusivity obligations or restrictions binding on a Transferred
Subsidiary or a purchaser of the Business;

 

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(iii) an agreement under which any Selling Company or Transferred Subsidiary has
borrowed or loaned any money or issued any note, bond, indenture or other
evidence of indebtedness or directly or indirectly guaranteed or issued a letter
of credit with respect to indebtedness, liabilities or obligations of others,
and any other note, bond, indenture or other evidence of indebtedness of any
Selling Company or Transferred Subsidiary, in each case for an amount in excess
of $1,000,000 (in each case other than endorsements for the purpose of
collection in the ordinary course of business, the issuance of trade credit in
the ordinary course of business and indebtedness relating to conditional sales
contracts and equipment leases entered into in the ordinary course of business);

(iv) an agreement granting a Lien (other than a Permitted Lien) on any material
Acquired Asset;

(v) an agreement with a third party with respect to a joint venture,
partnership, limited liability company or other similar agreement or
arrangement;

(vi) an agreement for the purchase of supplies or materials providing for annual
payments in excess of $25,000,000;

(vii) an agreement for the sale of goods or providing for annual payments in
excess of $25,000,000;

(viii) an agency, sales representation, distribution or other similar agreement
providing for annual payments in excess of $25,000,000;

(ix) (A) a material license or other similar agreement with respect to material
Intellectual Property exclusively used or held for use in the operation or
conduct of the Business or (B) any agreement for material computer hardware or
computer software maintenance or other outsourcing agreements relating to
material information technology systems exclusively used or held for use in the
operation or conduct of the Business;

(x) an agreement or contract for the sale of any material Acquired Asset or the
grant of any preferential rights to purchase any material Acquired Asset, in
each case outside the ordinary course of business;

(xi) an agreement, license, lease or commitment not made in the ordinary course
of business with respect to which the aggregate amount reasonably expected to be
received or paid thereunder after the date of this Agreement exceeds $5,000,000
(or the equivalent amount in any other currency based on the Applicable Spot
Rate as of the date five Business Days prior to the date of this Agreement) for
any calendar year; and

(xii) a collective bargaining agreement required to be listed in Section 6.13 of
the Seller Disclosure Letter.

 

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Each such Transferred Contract required to be listed in Section 6.09 of the
Seller Disclosure Letter (collectively, the “Material Contracts”) is valid,
binding and in full force and effect and is enforceable by a Selling Company or
Transferred Subsidiary, as applicable, in accordance with its terms, except for
any such failure to be valid, binding, in full force and effect or enforceable
that, individually or in the aggregate, is not reasonably likely to have a
Business Material Adverse Effect, subject as to enforceability to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws affecting creditors’ rights generally from time to time in effect.
As of the date of this Agreement, the Asset Selling Companies and Transferred
Subsidiaries and, to Seller’s knowledge, the applicable counterparties, are in
compliance with their obligations under each Material Contract, except for
possible instances of noncompliance that, individually or in the aggregate, are
not reasonably likely to have a Business Material Adverse Effect. As of the date
of this Agreement, none of Seller, any of the other Selling Companies or any
Transferred Subsidiary has received any written notice of termination under any
Material Contract. As of the date of this Agreement, complete and correct copies
of all the Material Contracts, together with all modifications and amendments
thereto to the date of this Agreement, have been made available to Purchaser or
its Representatives, except, in the case of Material Contracts described in
Section 6.09(a)(i), to the extent that Seller or any of its Subsidiaries is
prohibited from making such contracts available as a result of applicable laws
regarding the safeguarding of data privacy or any other obligation to maintain
the confidentiality of such contract in accordance with applicable law (provided
that the parties will cooperate to disclose to Purchaser such information
regarding any such Material Contract as would not violate any applicable Law).

(b) Except as set forth in Section 6.09(b) of the Seller Disclosure Letter, the
Transferred Contracts are free and clear of Liens (other than Permitted Liens).

SECTION 6.10. Litigation. (a) Section 6.10(a) of the Seller Disclosure Letter
sets forth a complete and correct list, as of the date of this Agreement, of all
judicial, administrative and regulatory proceedings pending or, to the knowledge
of Seller, threatened in writing during the 12-month period ending on the date
of this Agreement, by or against any Selling Company or Transferred Subsidiary
affecting the Business or a Business Property which involves an amount in
controversy in excess of $5,000,000 (or the equivalent amount in any other
currency based on the Applicable Spot Rate as of the date five Business Days
prior to the date of this Agreement).

(b) Section 6.10(b) of the Seller Disclosure Letter sets forth a complete and
correct list, as of the date of this Agreement, of (i) each judicial,
administrative and regulatory proceeding pending or threatened in writing since
January 1, 2007, that seeks injunctive or other equitable relief that, if
granted, would be material to the Business, (ii) all settlement agreements or
similar written agreements with any Governmental Entity which, individually or
in the aggregate, are reasonably likely to have a Business Material Adverse
Effect, and (iii) all outstanding orders, judgments, stipulations, decrees,
injunctions, determinations or awards issued by any Governmental Entity which,
individually or in the aggregate, are reasonably likely to have a Business
Material Adverse Effect.

 

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(c) This Section 6.10 does not relate to matters with respect to Taxes, which
are the subject of Section 6.07, employee benefit matters, which are the subject
of Section 6.11, labor matters, which are the subject of Section 6.13,
environmental matters, which are the subject of Section 6.14, or matters with
respect to Transferred Intellectual Property, which are the subject of
Section 6.16.

SECTION 6.11. Employee and Related Matters; ERISA. (a) Each employment agreement
to which a Covered Employee is a party, and each “employee pension benefit plan”
(as defined in Section 3(2) of ERISA), “employee welfare benefit plan” (as
defined in Section 3(1) of ERISA) and each other plan, arrangement, agreement,
or policy relating to stock options, stock purchases, other equity-based
compensation, compensation, bonus, incentive, deferred compensation, employment,
severance, termination, fringe benefits, disability, medical, life, vacation,
relocation plan or policy, employee loan, supplemental unemployment or other
employee benefits or benefits provided under a collective bargaining agreement,
in each case sponsored, maintained or contributed to or required to be
sponsored, maintained or contributed to by the Selling Companies or any
Transferred Subsidiary for the benefit of any Covered Employee or with respect
to which a Selling Company (with respect to the Covered Employees) or a
Transferred Subsidiary has any direct or indirect liability whether contingent
or otherwise or that constitutes a Covered Employee Liability, other than any
“multiemployer plan” (within the meaning of Section 3(37) of ERISA) or any plan,
arrangement or policy mandated by applicable Law, is herein referred to as a
“Seller Benefit Plan”; provided, however, that in no event shall any of the
following be considered a Seller Benefit Plan: (i) any plan, arrangement,
agreement or policy that primarily relates to benefits in the event of a change
in control of Seller or (ii) any agreement or plan pursuant to which a Covered
Employee may become entitled to a retention bonus payable by Seller or any of
its Subsidiaries as of the applicable Closing, in each case, solely to the
extent the liabilities and obligations under any such plan, arrangement,
agreement or policy is payable by Seller or any of its Subsidiaries (other than
a Transferred Subsidiary) and is not a Covered Employee Liability.
Section 6.11(a) of the Seller Disclosure Letter contains a list, as of the date
of this Agreement, of each material Seller Benefit Plan (for the avoidance of
doubt, individual loans under any employee loan plan or policy in connection
with any U.S. tax-qualified defined contribution plan or any relocation plan or
policy, need not be listed as a material Seller Benefit Plan). Seller has made
available to Purchaser a current, complete and accurate copy (or, with respect
to any oral material Seller Benefit Plan, a written description) of each
material Seller Benefit Plan document and any amendments thereto and copies of
(A) for each material Assumed Benefit Plan (1) the most recent summary plan
description (or similar document, to the extent available) and summary of
material modifications (to the extent available), (2) the trust agreement (other
than the Alcoa Inc Retirement Plan Master Trust, the Alcoa Inc Savings Plan
Master Trust and the master trust agreement with respect to any Canadian Seller
Pension Plan) any insurance contracts or other funding arrangements with respect
to such plan and (3) to the extent applicable, the most recent annual report on
Form 5500 (including any applicable schedules and attachments thereto) filed
with the IRS or any similar material reports filed by Seller, any of its
Subsidiaries or any Seller Benefit Plan with a Governmental Entity in any
non-U.S. jurisdiction bearing authority over the Assumed Benefit Plan (if any
such

 

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report was required by applicable Law), (B) the most recently received
determination or opinion letter from the IRS, or similar approval under
applicable non-U.S. Law, for each material Assumed Benefit Plan (if any), and
(C) the most recently prepared actuarial valuation report and audited financial
statements in connection with each material Assumed Benefit Plan for which such
actuarial valuation report or audited financial statements are required to be
prepared under applicable Law.

(b) Except as set forth in Section 6.11(b) of the Seller Disclosure Letter or as
is not reasonably likely to have a Business Material Adverse Effect, all
employer and employee contributions to each Assumed U.S. Benefit Plan have been
timely made or, if applicable, accrued in accordance with GAAP, consistently
applied. Each Assumed Benefit Plan has been administered in accordance with its
terms and in compliance with the applicable provisions of ERISA, the Code, all
other applicable Laws and the terms of all applicable collective bargaining
agreements, except where the failure to be so administered, individually or in
the aggregate, is not reasonably likely to have a Business Material Adverse
Effect. There are no investigations by any Governmental Entity, termination
proceedings or other claims (except routine claims for benefits payable) or
proceedings pending or, to the knowledge of Seller, threatened against or
involving any Assumed Benefit Plan or asserting any rights to or claims for
benefits under any Assumed Benefit Plan that, individually or in the aggregate,
are reasonably likely to have a Business Material Adverse Effect.

(c) Each Assumed U.S. Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter on a
timely basis from the IRS covering all provisions of the Code applicable to such
Assumed U.S. Benefit Plan for which determination letters are currently
available that such Assumed U.S. Benefit Plan is so qualified, and the master
trust that holds the assets with respect to each such Assumed U.S. Benefit Plan
has received a determination letter from the IRS that it is exempt from U.S.
federal income taxation under Section 501(a) of the Code, and Seller knows of no
set of circumstances that would reasonably be expected to materially adversely
affect such qualification or exemption or result in disqualification or loss of
exemption. None of the Selling Companies nor any Transferred Subsidiary is
subject to any material liability under Title IV of ERISA (other than for
premiums payable to the Pension Benefit Guaranty Corporation (the “PBGC”) or
obligations to pay benefits when due under any U.S. Transferred Subsidiary DB
Plan) with respect to any Assumed U.S. Benefit Plan that would reasonably be
expected to become a liability of Purchaser and its Affiliates after the
applicable Closing Date.

(d) The only “multiemployer plan” (within the meaning of Section 3(37) of ERISA)
to which Seller and its Affiliates are obligated to contribute on behalf of any
Covered Employees is the Teamsters Local No. 35 Pension Plan (the “Teamsters
Pension Plan”). None of Seller or any of its Subsidiaries participates in a
“multiple employer plan” within the meaning of section 4063 or 4064 of ERISA
with respect to any Covered Employee. No condition exists that would reasonably
be expected to subject Purchaser or the Transferred Subsidiaries to any
liability because Seller or any ERISA Affiliate has at any time during the last
six years contributed to or been obligated to contribute to any multiemployer or
multiple employer plan (other than the Teamsters Pension Plan). To

 

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the knowledge of Seller, (i) the Teamsters Pension Plan is not in
“reorganization” or “insolvent”, and (ii) as of the date hereof, no condition
exists and no event has occurred with respect to the Teamsters Pension Plan that
presents a material risk of a complete or partial withdrawal under subtitle E of
Title IV of ERISA. The aggregate withdrawal liability of Seller with respect to
all Covered Employees under the Teamsters Pension Plan on the date hereof does
not constitute a Business Material Adverse Effect.

(e) Except as set forth in Section 6.11(e) of the Seller Disclosure Letter or as
is not reasonably likely to have a Business Material Adverse Effect, (i) all
employer and employee contributions to each Assumed Foreign Benefit Plan
required by applicable Law or the terms of such Assumed Foreign Benefit Plan
have been timely made or, if applicable, accrued in accordance with GAAP (or if
GAAP is not applicable, the generally accepted accounting principles applicable
to such Assumed Foreign Benefit Plan), consistently applied, and (ii) each
Assumed Foreign Benefit Plan that is required to be registered with the
applicable Governmental Entity (A) has been maintained in good standing with
such Governmental Entity and (B) Seller knows of no set of circumstances that
would reasonably be expected to adversely affect such good standing. Except as
is not reasonably likely to have a Business Material Adverse Effect, no fact or
set of circumstances exists and no event has occurred that would reasonably be
expected to result in any Assumed Foreign Benefit Plan being required to pay any
material tax or penalty under applicable Law. Except as set forth in
Section 6.11(e) of the Seller Disclosure Letter, there are no material unfunded
liabilities or deficiencies with respect to any Assumed Foreign Benefit Plan
that is a defined benefit plan or defined contribution plan, as determined
pursuant to GAAP (or if GAAP is not applicable, determined pursuant to the
generally accepted accounting principles applicable to such Assumed Foreign
Benefit Plan), consistently applied, or on any other basis (i.e., solvency, wind
up, going concern) on which Seller, any of its Subsidiaries or such Assumed
Foreign Benefit Plan is currently required to report to a Governmental Entity
with respect to such Assumed Foreign Benefit Plan or on which Seller or any of
its Subsidiaries is currently required to fund such Assumed Foreign Benefit Plan
under applicable Law.

(f) Except as set forth in Section 6.11(f) of the Seller Disclosure Letter, the
execution, delivery and performance of this Agreement by Seller and its
Subsidiaries and the consummation by Seller and its Subsidiaries of the
transactions contemplated by this Agreement will not (alone or in combination
with any other event) result in an increase in the amount of compensation or
benefits or the acceleration of the vesting or timing of the payment of any
compensation or benefits payable to or in respect of any Covered Employee or any
increased or accelerated funding obligation with respect to any Assumed Benefit
Plan, in each case other than any compensation, benefits or funding obligation
for which Seller or the Selling Companies shall be solely responsible and retain
all liability after the applicable Closing. No payment or deemed payment by
Seller or any of its Subsidiaries or required under any Assumed Benefit Plan
will arise or be made as a result (alone or in combination with any other event)
of the execution, delivery and performance of this Agreement by Seller, or the
consummation by Seller of the transactions contemplated by this Agreement, that
would constitute an “excess parachute payment” for purposes of Section 280G of
the Code.

 

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(g) Each Assumed U.S. Benefit Plan that is a “nonqualified deferred compensation
plan” (as defined in Section 409A(d)(1) of the Code) that is subject to
Section 409A of the Code has been operated since January 1, 2005 in good faith
compliance with Section 409A of the Code, the applicable regulations and
guidance thereunder, other than any such instances of non-compliance that would
not, individually or in the aggregate, be reasonably likely to be material to
the Business.

SECTION 6.12. Compliance with Laws. (i) The Business is in compliance with all
existing laws, rules, regulations, ordinances, orders, judgments and decrees
that are applicable and material to the Business as it is currently conducted,
(ii) as of the date of this Agreement, none of the Selling Companies or
Transferred Subsidiaries has received any written communication during the
12-month period ending on the date of this Agreement from a Governmental Entity
that alleges that the Business is not in compliance in any material respect with
any material existing laws, rules, regulations, ordinances, orders, judgments or
decrees applicable to the Business as it is currently conducted and (iii) as of
the date of this Agreement, none of the Selling Companies or Transferred
Subsidiaries has received any written notice that any material investigation or
review by any Governmental Entity with respect to any Acquired Asset or the
Business is pending or that any such investigation or review is contemplated.
This Section 6.12 does not relate to matters with respect to Taxes, which are
the subject of Section 6.07, employee matters, which are the subject of
Section 6.11, labor matters, which are the subject of Section 6.13,
environmental matters, which are the subject of Section 6.14, or matters with
respect to Transferred Intellectual Property, which are the subject of
Section 6.16.

SECTION 6.13. Labor Matters. As of the date of this Agreement, (i) there is not
any, and during the 12-month period ending on the date of this Agreement, there
has not been any and, to the knowledge of Seller, there exists no set of
circumstances that would reasonably be expected to result in any, labor strike,
slow down, work stoppage or lockout with respect to the Business, (ii) none of
the Selling Companies or any Transferred Subsidiary is engaged in any unlawful
employment practice in connection with the conduct of the Business, (iii) the
Business (including all Transferred Subsidiaries) is in compliance with all
applicable Laws governing or concerning labor relations, employment, union and
collective bargaining, immigration, fair employment practices, employment
discrimination and harassment, terms and conditions of employment, workers’
compensation, occupational safety and health, plant closings, and wages and
hours, and with respect to the Covered Employees, any other applicable Law that
relates to the employment of the Covered Employees, (iv) there are not any
unfair labor practice charges against any Selling Company or Transferred
Subsidiary pending before or, to the knowledge of Seller, threatened, by the
National Labor Relations Board or any similar foreign, state or local agency in
connection with the conduct of the Business and (v) there are not any
proceedings in connection with the conduct of the Business pending before the
Equal Employment Opportunity Commission or any similar foreign, state or local
agency responsible for the prevention of unlawful employment practices or
enforcement of labor and employment laws, except, in the case of each of
clauses (i), (ii), (iii), (iv) and (v) above, for any such action, conduct,
practice or proceeding which, individually or in the aggregate, is not
reasonably likely to have a

 

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Business Material Adverse Effect. Section 6.13 of the Seller Disclosure Letter
sets forth a true and complete list of each material collective bargaining
agreement or other material agreement with a labor union or any employees’
representative (including any applicable works council but excluding any
mandatory national collective bargaining agreement or any mandatory national
works council or trade union agreement) that, as of the date of this Agreement,
is in effect and to which Covered Employees are subject.

SECTION 6.14. Environmental Matters. Except for any matters that, individually
or in the aggregate, are not reasonably likely to have a Business Material
Adverse Effect, as of the date of this Agreement, (i) (A) the Selling Companies
and the Transferred Subsidiaries hold and are in compliance with all material
permits, licenses, authorizations and approvals required under Environmental
Laws for the operations of the Business as currently conducted and (B) all
material Permits required under Environmental Laws for the operations of the
Business and necessary to conduct the Business as it is currently conducted
(other than any such Permit that will be held by a Transferred Subsidiary
immediately following the applicable Closing) are disclosed in Section 6.14 of
the Seller Disclosure Letter, (ii) the operations of the Business since
January 1, 2007, have been and are in compliance with all applicable
Environmental Laws and, since January 1, 2005, none of the Selling Companies or
Transferred Subsidiaries has received any written notice from any Governmental
Entity or other person that alleges that the Business is not in compliance with,
or has any liability under, any applicable Environmental Law, (iii) no Hazardous
Substances have been Released on, under or from any facility of the Business in
violation of any Environmental Law or requiring investigation or remedial
action, (iv) no facility of the Business is listed or formally proposed for
listing on the National Priorities List under CERCLA or any similar state list,
and (v) there are no proceedings pending or, to the knowledge of Seller,
threatened by or against any Selling Company or any Transferred Subsidiary
affecting the Business arising under any Environmental Law.

SECTION 6.15. Permits. (a) Section 6.15(a) of the Seller Disclosure Letter sets
forth as of the date of this Agreement in general terms all material Permits
that are necessary to conduct the Business as it is currently conducted (other
than any such Permit that will be held by a Transferred Subsidiary immediately
following the applicable Closing).

(b) As of the date of this Agreement, (i) all material Transferred Permits are
validly held by a Selling Company or Transferred Subsidiary, and such Selling
Company or Transferred Subsidiary has complied in all material respects with all
terms and conditions thereof, and (ii) during the 12-month period ending on the
date of this Agreement, none of the Selling Companies or Transferred
Subsidiaries has received written notice of any proceedings relating to the
revocation of any such Transferred Permit the loss of which is reasonably likely
to have a Business Material Adverse Effect. This Section 6.15 does not relate to
environmental matters, which are the subject of Section 6.14.

(c) Except as set forth in Section 6.15(c) of the Seller Disclosure Letter, the
Transferred Permits are free and clear of Liens (other than Permitted Liens).

 

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SECTION 6.16. Intellectual Property. (a) Section 6.16(a) of the Seller
Disclosure Letter sets forth as of the date of this Agreement all material
Transferred Intellectual Property (including its owner) that is applied for or
registered with a Government Entity.

(b) Except as set forth in Section 6.16(b) of the Seller Disclosure Letter, a
Selling Company or a Transferred Subsidiary owns, free and clear of Liens (other
than Permitted Liens), or has the right to make, use, sell, offer to sell,
execute, reproduce, display, perform, modify, enhance, distribute, prepare
derivative works of and sublicense, without payment to any other person, the
material Transferred Intellectual Property, and the consummation of the
transactions contemplated hereby do not and will not conflict with, alter or
impair any such rights.

(c) To the knowledge of Seller, the conduct of the Business as it is currently
conducted does not violate or infringe the intellectual property rights of any
other person and no other third party violates or infringes the Transferred
Intellectual Property or any trade secrets included in the Transferred
Technology, in each case except for any such violations or infringements that,
individually or in the aggregate, are not reasonably likely to have a Business
Material Adverse Effect; provided, however, that in making this representation
Seller is entitled to rely entirely on representations or warranties made to any
Seller or any of its Subsidiaries by third parties with respect to products,
supplies, parts or components supplied to Seller or its Subsidiaries by third
parties. As of the date of this Agreement, (i) no proceedings are pending
against any Selling Company or Transferred Subsidiary by any person with respect
to the ownership, validity, enforceability, effectiveness or use in the Business
of any Transferred Intellectual Property or the use in the Business of any
Transferred Technology and (ii) during the 12-month period ending on the date of
this Agreement, Seller and its Subsidiaries have not received any written notice
alleging that the conduct of the Business during such period violated or
infringed any intellectual property rights of any person, other than proceedings
or allegations which, individually or in the aggregate, are not reasonably
likely to have a Business Material Adverse Effect.

(d) All confidential Transferred Technology that is material to the Business has
been maintained in confidence in accordance with Seller’s customary protection
procedures.

(e) Each person who has developed any of the material Transferred Intellectual
Property since January 1, 2007, has validly assigned all of his, her or its
rights in and to such intellectual property to the relevant Asset Selling
Company or Transferred Subsidiary.

(f) To the knowledge of Seller, none of the Transferred Subsidiaries or any
Asset Selling Company has pledged any rights it may have to any trade secret
included in the Transferred Technology.

SECTION 6.17. Transactions with Affiliates. (a) Section 6.17(a) of the Seller
Disclosure Letter sets forth (i) all material services currently provided to the

 

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Business by Seller or its Subsidiaries (other than the Transferred
Subsidiaries), and (ii) all written material Contracts between Seller or any of
its Subsidiaries (other than a Transferred Subsidiary), on the one hand, and any
Asset Selling Company or Transferred Subsidiary, on the other hand, in effect
from and after June 30, 2007 (other than Tax sharing and cash management
agreements that will be terminated upon the Initial Closing).

(b) As of the Initial Closing Date, other than as contemplated by the
Transaction Agreements or as set forth in Section 6.17(b) of the Seller
Disclosure Letter, no contract, agreement, arrangement or commitment shall be in
effect between Seller or any other Selling Company that is being retained by
Seller, on the one hand, and any Transferred Subsidiary (other than any
Transferred Subsidiary that is not transferred at the Initial Closing), on the
other hand.

(c) As of the applicable Foreign Country Unit Closing Date, other than as
contemplated by the Transaction Agreements or as set forth in Section 6.17(c) of
the Seller Disclosure Letter, no contract, arrangement or commitment shall be in
effect between Seller or any other Selling Company that is being retained by
Seller, on the one hand, and any Transferred Subsidiary that is transferred as
of such Closing Date, on the other hand.

SECTION 6.18. Real Estate. Section 6.18 of the Seller Disclosure Letter sets
forth as of the date of this Agreement a complete list of all material real
property and interests in real property owned in fee by any Asset Selling
Company or Transferred Subsidiary that is primarily used or held for use in the
operation or conduct of the Business (individually, an “Owned Property”).
Section 6.18 of the Seller Disclosure Letter also sets forth as of the date of
this Agreement a complete list of all material real property and interests in
real property leased by any Asset Selling Company or Transferred Subsidiary that
is primarily used or held for use in the operation or conduct of the Business
(individually, a “Leased Property”). An Asset Selling Company or a Transferred
Subsidiary has good and valid fee title to and, in the case of an Asset Selling
Company, will convey to Purchaser title to all Owned Property and an Asset
Selling Company or a Transferred Subsidiary has good and valid title to and, in
the case of an Asset Selling Company, will convey to Purchaser title to the
leasehold estates in all Leased Property (an Owned Property or Leased Property
being sometimes referred to herein, individually, as a “Business Property”), in
each case free and clear of all Liens, except (i) Liens described in clause (i),
(ii), (iii) or (iv) of Section 6.08(a), (ii) Liens securing or created by or in
respect of any of the Assumed Liabilities, and such Liens as are set forth in
Section 6.18 of the Seller Disclosure Letter, (iii) leases, subleases and
similar agreements set forth in Section 6.18 of the Seller Disclosure Letter,
(iv) easements, covenants, rights-of-way and other similar restrictions of
record, (v) any minor title defects, and any conditions that may be shown by a
current, accurate survey or physical inspection of any Business Property and
(vi) (A) zoning, building and other similar restrictions, (B) Liens that have
been placed by any developer, landlord or other third party on property over
which any Selling Company or Transferred Subsidiary has easement rights or on
any Leased Property and subordination or similar agreements relating thereto and
(C) unrecorded easements, covenants, rights-of-way and other similar

 

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restrictions. None of the items set forth in clauses (iv), (v) and (vi) above,
individually or in the aggregate, materially impairs, or would reasonably be
expected to materially impair, the continued use and operation of the Business
Property to which they relate as it is currently used and operated in the
conduct of the Business as presently conducted.

SECTION 6.19. Sufficiency of Assets. (a) Upon (i) the purchase and acquisition
of the Shares and the Acquired Assets in accordance with this Agreement,
(ii) the receipt by Purchaser of the services and benefits available or
otherwise offered by Seller to Purchaser under the Transaction Agreements,
(iii) the acquisition or other receipt by Purchaser of all consents or approvals
of a third party required for the transfer of the Restricted Assets, (iv) the
acquisition or other receipt by Purchaser of all licenses and permits and other
governmental authorizations and approvals required to operate the Business and
perform the obligations under the Transferred Contracts, (v) the provision by
Purchaser, any of its Affiliates or any third party of all corporate level and
country headquarters level services of the type currently provided by Seller and
the Selling Companies and (vi) the provision by Purchaser, any of its Affiliates
or any third party of the services described in Section 6.19 of the Seller
Disclosure Letter, Purchaser shall have, directly or indirectly, the assets and
properties (tangible or intangible) and services sufficient for the conduct in
all material respects of the Business immediately following the Closings in
substantially the same manner as currently conducted.

(b) No Subsidiary of Seller, other than the Selling Companies and the
Transferred Subsidiaries, is (i) engaged in any material respect in the conduct
of the Business or (ii) holds any assets that would constitute material Acquired
Assets but for the fact that they are held by such Affiliate rather than Seller
or an Asset Selling Company.

SECTION 6.20. Insurance. Section 6.20 of the Seller Disclosure Letter lists all
current, material casualty and property insurance policies (including fidelity
bonds and other similar instruments) that may be available (assuming such
policies remain in effect as of the Closing) to pay proceeds to Purchaser as
provided in Section 7.06.

SECTION 6.21. No Other Representations or Warranties. Except for the
representations and warranties contained in Article VIII or in any certificate
delivered by Purchaser in connection with a Closing, Seller acknowledges that
neither Purchaser nor any other person on behalf of Purchaser makes or has made
any other express or implied representation or warranty with respect to the
transactions contemplated by the Transaction Agreements, with respect to
Purchaser or with respect to any other information provided or made available to
Seller by Purchaser in connection with the transactions contemplated by this
Agreement.

ARTICLE VII

Covenants of Seller

Seller covenants and agrees as follows:

 

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SECTION 7.01. Access. (a) Other than with respect to Tax records which are the
subject of Section 7.01(b), prior to the applicable Closing for each Country
Unit, Seller shall, and shall cause its applicable Subsidiaries to, give
Purchaser and its employees, counsel, accountants, environmental consultants,
financing sources (provided such financing sources agree to keep confidential
the confidential information of the Business) and other representatives and
advisors (collectively, “Representatives”) reasonable access, during normal
business hours and upon reasonable notice, to all manufacturing facilities,
offices, warehouses and other facilities used in the operation of the Business
in, and personnel of, such Country Unit and to all books, records, agreements,
documents, information, data and files to the extent relating to the operation
of the Business in such Country Unit (other than proprietary customer and
supplier information and other than information the disclosure of which is
legally or contractually prohibited); provided that such access shall not
include any environmental sampling work and shall not disrupt the normal
operations of Seller or its Subsidiaries.

(b) Seller shall, and shall cause its applicable Subsidiaries to, give Purchaser
and its Representatives reasonable access, during normal business hours and upon
reasonable notice, to (and upon reasonable request, furnish copies of) all Tax
Returns filed by any Transferred Subsidiary; provided that Seller shall not be
required to provide any consolidated, combined or unitary Tax Returns (or copies
thereof) other than any pro forma return of any Transferred Subsidiary.

SECTION 7.02. Ordinary Conduct. Except as otherwise contemplated or permitted by
Section 7.03 or the Transaction Agreements or set forth in Section 7.02 of the
Seller Disclosure Letter, from the date of this Agreement to the applicable
Closing Date for each Country Unit, unless Purchaser otherwise consents (such
consent not to be unreasonably withheld or delayed), Seller shall cause the
Business conducted by such Country Unit to be conducted in all material respects
in the ordinary course and shall make all reasonable efforts to preserve the
relationships of such Country Unit with its customers, suppliers, employees and
others having relationships with such Country Unit. In addition, during such
period, insofar as the Business conducted by such Country Unit is concerned,
except as otherwise contemplated or permitted by the Transaction Agreements or
set forth in Section 7.02 of the Seller Disclosure Letter, unless Purchaser
otherwise consents (which consent shall not be unreasonably withheld), Seller
shall not, and shall not permit any of its Subsidiaries to:

(i) issue, sell or deliver any shares of capital stock of any class of a
Transferred Subsidiary included in such Country Unit or any option, warrant,
convertible security or other right of any kind to acquire any shares of such
capital stock;

(ii) adopt or amend in any material respect any Seller Benefit Plan to the
extent applicable to Covered Employees, except (A) as may be required by
applicable Law (including any amendments required to be adopted prior to the
applicable Closing Date to the extent necessary to reflect the requirements of
Section 409A of the Code) or required under existing agreements, (B) as effected
in the ordinary course of business and consistent with past practice, (C) as
would

 

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relate to a substantial number of other similarly situated employees of the
Selling Companies in any country or (D) for any changes for which the Selling
Companies will be solely liable, provided in each case that no such adoption or
amendment materially increases the cost to Purchaser or its Affiliates of any
Assumed Benefit Plan;

(iii) grant to any Covered Employee any increase in compensation or benefits, or
enter into, adopt or amend any employment agreement or other agreement that may
increase the obligations to any Covered Employee, including upon termination of
employment, in each case except (A) as may be required under existing
agreements, (B) as effected in the ordinary course of business and consistent
with past practice, (C) as would relate to a substantial number of other
similarly situated employees of the Selling Companies in any country, (D) to the
extent required by applicable Law, (E) in the event that, during such period,
such employee receives a promotion based on job performance or workplace
requirements, (F) with respect to newly hired Covered Employees or (G) for any
such increases for which the Selling Companies will be solely liable; provided
that no such increase in compensation or benefits or other obligations
materially increases the cost to Purchaser and its Affiliates of such
compensation, benefits and obligations, in the aggregate;

(iv) transfer employment of any person engaged primarily in the Business to any
other business of Seller and its Affiliates or transfer the employment of any
person engaged primarily in the business of Seller and its Affiliates (other
than the Business) to the Business, in each case, other than transfers in the
ordinary course of business consistent with past practice of employees not
described in Section 7.02(iv)(1) of the Seller Disclosure Letter; provided that
the foregoing provisions shall not be construed as a restriction on the ability
to transfer employment of the employees listed in Section 7.02(iv)(2) of the
Seller Disclosure Letter or to change the entity that employs an employee (so
long as such change does not result in a change in such employee’s engagement in
the Business);

(v) subject any of the material Acquired Assets or Transferred Subsidiaries’
Equity Interests to any Lien other than Permitted Liens;

(vi) waive any claims or rights of substantial value relating to the Business
conducted by such Country Unit (other than pursuant to Section 10.05) except in
the ordinary course of business, consistent with past practice;

(vii) acquire or agree to acquire (whether by merger, consolidation, purchase of
capital stock or of a substantial portion of assets or otherwise) any business
which is material, individually or in the aggregate, to the Business if a
substantial portion of the assets of such business would constitute Acquired
Assets;

 

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(viii) sell, lease, abandon, license, transfer or otherwise dispose of any of
the material Acquired Assets (including any material Transferred Intellectual
Property or Transferred Technology) or material assets of any of the Transferred
Subsidiaries outside the ordinary course of business, consistent with past
practice;

(ix) with respect to any Transferred Subsidiary, make or change any Tax
election, amend any Tax Return or settle or compromise any Tax audit or
controversy that could have an adverse effect (other than an immaterial one) on
Purchaser, any Transferred Subsidiary or any Affiliate thereof after the
applicable Closing (other than the filing of Tax Returns in the ordinary course
of business, consistent with past practice unless an inconsistency is required
by applicable Tax laws);

(x) make outside of the ordinary course of business consistent with past
practice any loans, advances or capital contributions to, or investment in, any
other person (other than any Transferred Subsidiary) to the extent such loan,
advance or capital contribution is made by a Transferred Subsidiary or would
constitute Acquired Assets;

(xi) materially adversely change any rights, coverage or obligations of the
Business and the Acquired Assets under insurance policies covering the Business
in a manner inconsistent with any changes in rights, coverage or obligations
made by Seller with respect to its businesses (other than the Business);

(xii) settle any legal proceeding where the terms or impact of such settlement
would impose any material non-monetary obligation on the Business after the
Initial Closing Date or include an admission of liability material to the
Business;

(xiii) amend the organizational documents of the Transferred Subsidiaries;

(xiv) except in the ordinary course of business, enter into, materially modify,
renew, extend or terminate any Material Contract or enter into any Contract that
would have been a Material Contract if such Contract existed on the date of this
Agreement;

(xv) engage in any material transaction with a Selling Company or Transferred
Subsidiary outside the ordinary course of business, consistent with past
practice, including, without limitation, with respect to the collection of
intercompany receivables and the payment of intercompany payables, except as
contemplated by Section 10.05;

(xvi) incur any indebtedness for borrowed money (other than capital leases),
except for any indebtedness that is by its terms repayable at or prior to the
applicable Closing; or

(xvii) agree, whether in writing or otherwise, to do any of the foregoing.

 

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SECTION 7.03. Post-Signing Restructuring Actions. (a) Notwithstanding anything
in Section 7.02 to the contrary, Seller shall have the right, after the date of
this Agreement and prior to the applicable Closing Date, to undertake, at its
own expense, those restructuring steps or other transactions in respect of any
Acquired Asset or Transferred Subsidiary (including transfers of Acquired Assets
or stock of Transferred Subsidiaries) or make those Tax elections in respect of
any Acquired Asset or Transferred Subsidiary (including any entity
classification election, effective prior to or on the applicable Closing Date,
under Treasury Regulation Section 301.7701-3) that are set forth in Section 7.03
of the Seller Disclosure Letter (each such step, transaction or Tax election, a
“Post-Signing Restructuring Action”); provided, however, that (i) Seller shall
use its reasonable best efforts to complete the Post-Signing Restructuring
Actions in Mexico and China as set forth in Section 7.03 of the Seller
Disclosure Letter, (ii) Seller shall not include any rights of indemnification
of Seller or any of its Affiliates (other than a Transferred Subsidiary) against
a Transferred Subsidiary (other than those rights set forth in Article XIII of
this Agreement) in any agreement or conveyance document to be entered into in
connection with any Post-Signing Restructuring Action and (iii) to the extent
any Post-Signing Restructuring Action transfers any assets or liabilities
between entities, such transfers shall not result in Purchaser receiving (either
directly or through a Transferred Subsidiary) fewer assets or greater
liabilities than Purchaser would have received had such Post-Signing
Restructuring Action not been undertaken, other than changes in the amount of
cash or intercompany payables and receivables and other than changes in the
legal entities conveyed at an applicable Closing.

(b) To the extent the aggregate Closing Net Cash Balance of the Transferred
Subsidiaries exceeds $10,000,000 (the “Total Excess Cash”), then
(notwithstanding Section 4.03) any such excess shall be excluded from the
Closing Net Cash Balance (and for the avoidance of doubt Working Capital) and
the adjustment of the Worldwide Purchase Price at the applicable Closing. To the
extent that any cash is distributed to Purchaser or any of its Affiliates (other
than a Transferred Subsidiary) from any Transferred Subsidiary (up to the amount
of the Closing Net Cash Balance of such Transferred Subsidiary) (a “Covered
Distribution”), Purchaser shall pay to the Seller the amount of such
distribution, provided that (i) no Covered Distributions shall give rise to a
payment under this Section 7.03(b) except to extent the aggregate Covered
Distributions exceed $10 million and (ii) no further payments shall be made to
Seller pursuant to this Section 7.03(b) once the total payments to Seller under
this Section 7.03(b) plus the total Repatriation Costs equals the Total Excess
Cash. “Repatriation Costs” shall mean any out-of-pocket costs (other than
Taxes), withholding Taxes and U.S. Taxes arising from any Covered Distribution
payable (less Repatriation Costs) to Seller under this Section 7.03(b). After an
applicable Closing, Purchaser shall use reasonable best efforts (i) to cause the
Transferred Subsidiaries acquired at or after such Closing to make sufficient
Covered Distributions to the Purchaser so that the total payments actually made
under this Section 7.03(b) to Seller plus the Repatriation Cost equal the Total
Excess Cash and (ii) to minimize the Repatriation Costs attributable to any
Covered Distribution payable to Seller under this Section 7.03(b), it being
understood that Section 13.01(a)(ix) does not apply if and to the extent this
Section 7.03(b) applies. Seller and Purchaser shall cooperate in good faith in
respect of any Post-Signing Restructuring Action.

 

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(c) Upon written request by Purchaser, Seller shall deliver without undue delay
copies of all agreements and conveyance documents (including any notes) executed
in connection with any Post-Signing Restructuring Action.

SECTION 7.04. Confidentiality. Except as otherwise provided in the Transaction
Agreements, from and after the applicable Closing Date for each Country Unit,
Seller shall keep confidential and shall cause its Subsidiaries and instruct its
and their Representatives to keep confidential all nonpublic information
relating to the Business conducted by such Country Unit, except for information
(i) required by law or administrative process to be disclosed, (ii) available to
the public on the applicable Closing Date, or thereafter becomes available to
the public other than as a result of a breach of this Section 7.04, (iii) that
becomes available to any Selling Company on a non-confidential basis from a
source other than Purchaser or any Transferred Subsidiary or (iv) disclosed in
connection with the exercise of any remedies provided in any Transaction
Agreement or any suit, action or proceeding relating to the Transaction
Agreements or the enforcement of rights thereunder. The covenant set forth in
this Section 7.04 shall terminate three years after the Initial Closing Date.

SECTION 7.05. Resignations. On the applicable Closing Date, Seller shall cause
to be delivered to Purchaser duly signed resignations, effective immediately
after the applicable Closing, of all directors of the relevant Transferred
Subsidiaries or shall take such other action as is necessary to cause such
persons to no longer be directors of any relevant Transferred Subsidiary, as the
case may be, immediately after the applicable Closing.

SECTION 7.06. Insurance. (a) If (i) any Losses are suffered between the date
hereof and the applicable Closing with respect to an asset of a Transferred
Subsidiary (that is not an Excluded Asset) or an asset that would constitute an
Acquired Asset as of such Closing and such asset is not repaired or replaced as
of such Closing or (ii) any Losses arise prior to or following the applicable
Closing that constitute Assumed Liabilities (any Loss described in clause (i) or
(ii), a “Covered Matter”), and claims with respect to a Covered Matter may be
made against insurance policies related to the Business (other than Seller’s
directors’ and officers’ liability insurance policy) which were arranged and
continue to be retained by Seller or its Affiliates and in effect following the
Closing, including any policies issued by any captive insurance Affiliate of
Seller (other than a Transferred Subsidiary), then Seller shall use its
commercially reasonable efforts to file, provide notices regarding such claims
and otherwise continue to pursue such claims on behalf of and with the
cooperation of Purchaser or its Affiliates under the terms of such policies to
the extent of a Covered Matter. To the extent the proceeds are not paid directly
to any third party or used to repair or replace the applicable asset, as
applicable, Seller agrees to promptly pay to Purchaser any such amounts or
assign to Purchaser any benefits (in each case, net of any out-of-pocket costs
or expenses incurred by Seller) that Seller or its Affiliates may receive in
respect of such Losses under such insurance policies to the extent such amounts
or benefits arise from such Covered Matter; provided that, with respect to each
claim, any amount paid or benefit assigned to Purchaser shall be limited to the
amount of the related Covered Matter for which such claim was made.

 

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(b) If any insurance policies are claims-made policies and an extended reporting
period is commercially and reasonably available for Seller or its Affiliates to
purchase, and if Purchaser requests, Seller shall cause to be purchased (at
Purchaser’s expense), an extended reporting period with respect to such
insurance policy for the benefit of Purchaser as an insured. From time to time,
Seller will reasonably cooperate with Purchaser to provide Purchaser (at
Purchaser’s expense) with historical insurance claims information regarding the
Business (including workers’ compensation experience) to the extent reasonably
necessary to enable Purchaser to establish loss experience in establishing new
insurance arrangements with new carriers.

SECTION 7.07. Certain Financial Information. (a) As soon as practicable
following Seller’s public earning release for a fiscal quarter, Seller shall
deliver to Purchaser an unaudited management financial report of the Business,
as of and for such fiscal quarter, commencing with the fiscal quarter ended
September 30, 2007, and for each fiscal quarter ended more than 45 days prior to
the Initial Closing Date.

(b) Within 30 days following the completion of any month between December 2007
through and including the month in which the Initial Closing occurs, Seller
shall deliver to Purchaser copies of such monthly financial reports regarding
the Business as it may prepare in the ordinary course of business.

SECTION 7.08. Termination of Outstanding Powers of Attorney. On the applicable
Closing Date, Seller shall cause to be delivered to Purchaser evidence of
termination of the outstanding powers of attorney executed on behalf of the
Transferred Subsidiaries to be transferred on such Closing Date and identified
by Purchaser prior to the Initial Closing Date.

SECTION 7.09. Title to Intellectual Property. Prior to the Initial Closing Date,
Seller shall, at its own expense, record, or shall cause its Affiliates to
record, all necessary documents with the pertinent intellectual property offices
to reflect the applicable Asset Selling Company or Transferred Subsidiary as the
record owner of the Intellectual Property set forth in Section 7.09 of the
Seller Disclosure Letter; provided that in the event that any such scheduled
Intellectual Property is registered in the name of a Transferred Subsidiary
except that such registration does not correctly reflect the current name of
such Transferred Subsidiary, then Seller shall not be required to update such
registrations to reflect such current name of the Transferred Subsidiary if
Purchaser will be required to rename such entity following the applicable
Closing because such entity’s current name includes the name “Alcoa”.

SECTION 7.10. Additional Books and Records. Seller shall provide copies of any
of its books of account, ledgers and general, financial and accounting records
and files that are primarily used or held for use in the Business and are not
located at an Operating Location to Purchaser to the extent reasonably requested
by Purchaser in connection with Purchaser’s post-Closing conduct of the
Business.

SECTION 7.11. Joint Ventures. If any third party which owns Shares exercises its
right, triggered as a result of the transactions contemplated by this

 

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Agreement, to purchase at or prior to the applicable Closing the Shares owned by
Seller or its Subsidiaries, Seller shall remit to Purchaser on the later of
(i) the Closing Date or (ii) within 5 days of receipt any amounts received by
Seller or its Subsidiaries as consideration for the sale of such Shares on the
applicable Closing Date.

SECTION 7.12. Certain Assets of Transferred Subsidiaries. Subject to clause
(ii) of Section 17.03(a), prior to the Initial Closing Date, Seller shall have
the right upon notice to Purchaser to remove from any Transferred Subsidiary any
Excluded Assets and any other specific assets identified by Seller prior to the
Initial Closing that are not and have not since January 1, 2005 been primarily
used or held for use in the operation or conduct of the Business and that are
material to the operation or conduct of another business of Seller or its
Subsidiaries as such business is currently conducted; provided that the
foregoing shall not include any real estate assets.

SECTION 7.13. Supplier-Financing Programs. Any Seller sponsored
supplier-financing programs (the “Seller SFP”) for the benefit of the
Transferred Subsidiaries or any Asset Selling Company, to the extent arising
from the Business, shall be terminated on or before the applicable Closing Date.

SECTION 7.14. Lien Removal. (a) Without limiting the closing condition in
Section 5.01(i)(A), Seller shall, and shall cause its Subsidiaries to, (i) use
reasonable best efforts to remove prior to or as of the Initial Closing Date any
Liens on Shares or assets (other than Permitted Liens on assets) set forth in
Section 7.14 of the Seller Disclosure Letter, and (ii) use commercially
reasonable efforts to remove prior to or as of the Initial Closing Date any
Liens (other than Permitted Liens on assets) that may be identified by Purchaser
prior to the Initial Closing Date (that are not set forth in Section 7.14 of the
Seller Disclosure Letter) on the Shares, the Acquired Assets or the assets of
Transferred Subsidiaries. It is agreed that to the extent that the removal of a
Lien requires the repayment of indebtedness of a Transferred Subsidiary, Seller
agrees to cooperate prior to the applicable Closing in arranging for the
repayment of such indebtedness; provided that only such repayment shall occur on
the applicable Closing Date using funds provided by Purchaser (it being agreed
that in such event the amount of such funds provided by Purchaser shall reduce
the Worldwide Purchase Price by an equal amount and such indebtedness shall not
be included in the calculation of the Indebtedness Balance).

(b) Following the Initial Closing and without limiting the indemnification
obligations of Seller, Seller agrees to reasonably cooperate, at the reasonable
request of Purchaser, in the removal of any Liens (other than Permitted Liens on
assets) identified by Purchaser after the Initial Closing Date on the Shares,
the Acquired Assets or the assets of Transferred Subsidiaries.

ARTICLE VIII

Representations and Warranties of Purchaser

Purchaser hereby represents and warrants to Seller as follows:

 

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SECTION 8.01. Organization, Standing and Authority. (a) Purchaser. Purchaser is
a company duly organized and validly existing under the laws of New Zealand.
Purchaser has all requisite corporate power and authority to enter into the
Transaction Agreements to which it is a party and to consummate the Debt
Financing and the transactions contemplated by the Transaction Agreements. All
corporate and shareholder acts and other proceedings required to be taken by or
with respect to Purchaser to authorize the execution, delivery and performance
of the Transaction Agreements to which it is a party and the consummation of the
Debt Financing and the transactions contemplated by the Transaction Agreements
have been duly and properly taken. Each of the Transaction Agreements to which
Purchaser is a party has been duly executed and delivered by Purchaser and
constitutes the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, subject as to enforceability to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws affecting creditors’ rights generally from time
to time in effect.

(b) Subsidiaries and Affiliates. Each of the Subsidiaries and Affiliates of
Purchaser that will enter into any Other Transaction Agreement (together with
Purchaser, the “Purchaser Entities”) will, as of the applicable Closing Date and
as of any earlier date on which such Purchaser Entity shall have executed and
delivered any Other Transaction Agreement, (i) be duly organized and validly
existing under the laws of its jurisdiction of organization and (ii) have all
requisite corporate or organizational power and authority to enter into the
Other Transaction Agreements to which it is a party and to consummate the
transactions contemplated thereby, and as of such dates all corporate or
organizational acts and other proceedings required to be taken by such Purchaser
Entities to authorize the execution, delivery and performance of such
Transaction Agreements and the consummation of the transactions contemplated
thereby shall have been duly and properly taken. Each of the Transaction
Agreements when duly executed and delivered by the relevant Purchaser Entities
(other than Purchaser) shall constitute the legal, valid and binding obligation
of such Purchaser Entities, enforceable against such Purchaser Entities in
accordance with its terms, subject as to enforceability to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws affecting creditors’ rights generally from time to time in effect.

SECTION 8.02. No Violation; Consents and Approvals. (a) The execution and
delivery of this Agreement by Purchaser does not, and the execution and delivery
by each of Purchaser and the other Purchaser Entities of the Other Transaction
Agreements to which it is a party, and the consummation of the Debt Financing
and the transactions contemplated by the Transaction Agreements and compliance
with the terms of the Transaction Agreements will not, (i) conflict with or
result in any violation of any provision of the certificate of incorporation or
by-laws or comparable organizational documents of Purchaser or any other
Purchaser Entity, (ii) conflict with, result in a violation or breach of, or
constitute a default, or give rise to any right of termination, revocation,
cancellation or acceleration, under, any note, bond, mortgage, indenture, deed
of trust, license, lease, contract, commitment or agreement to which Purchaser
or any other Purchaser Entity is a party, except for any such conflict,
violation, breach, default or right which, individually or in the aggregate, is
not reasonably likely to have a material

 

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adverse effect on the ability of Purchaser and the other Purchaser Entities to
consummate the material transactions contemplated by the Transaction Agreements
(a “Purchaser Material Adverse Effect”) or (iii) conflict with or result in a
violation of any Law applicable to Purchaser or any other Purchaser Entity or to
the property or assets of Purchaser or any other Purchaser Entity, except for
any such conflict or violation which, individually or in the aggregate, is not
reasonably likely to have a Purchaser Material Adverse Effect.

(b) No consent, approval, license, permit, order or authorization of,
registration, declaration or filing with, or notice to, any Governmental Entity
is required to be obtained or made by or with respect to Purchaser or any other
Purchaser Entity in connection with the execution and delivery of the
Transaction Agreements or the consummation of the Debt Financing and the
transactions contemplated by the Transaction Agreements, other than (i) those
required to be made or obtained pursuant to the HSR Act or any other antitrust
or competition law or regulation and (ii) such other consents, approvals,
licenses, permits, orders, authorizations, registrations, declarations or
filings the failure of which to be obtained or made, individually or in the
aggregate, is not reasonably likely to have a Purchaser Material Adverse Effect.

SECTION 8.03. Brokers. No broker, investment banker, financial advisor or other
person, other than Credit Suisse and Lazard Frères, the fees and expenses of
which will be paid by Purchaser, is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission in connection with the
Transaction Agreements or the transactions contemplated thereby based upon
arrangements made by or on behalf of Purchaser or any of its Affiliates.

SECTION 8.04. Availability of Funds. The Debt Financing and Purchaser’s cash on
hand will provide funds at the Initial Closing sufficient to effect the Closings
on the terms contemplated hereby.

SECTION 8.05. Securities Act. The capital stock and other equity interests of
the Transferred Subsidiaries are being acquired for investment only and not with
a view to any public distribution thereof, and Purchaser shall not offer to sell
or otherwise dispose of the capital stock and other equity interests of any of
the Transferred Subsidiaries in violation of any of the registration
requirements of the Securities Act of 1933, as amended, and the rules and
regulations existing thereunder.

SECTION 8.06. Financing. Complete and correct executed copies of the Financing
Commitments have been delivered to Seller on or prior to the date of this
Agreement. There are no conditions or other similar contractual contingencies
limiting the obligations of the lenders to fund the Debt Financing other than
those contained in the Financing Commitments (or in replacement commitments
obtained by Purchaser in compliance with this Agreement). Except to the extent
permitted by Section 10.09, the Financing Commitments (or any of the replacement
commitments obtained by Purchaser in compliance with this Agreement) have not
been amended, supplemented, replaced or otherwise modified by Purchaser and, as
of the date hereof, the commitments contained in the Financing Commitments (or
the commitments contained in replacement

 

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commitments obtained by Purchaser in compliance with this Agreement) have not
been reduced, terminated, withdrawn or rescinded in any respect. As of the date
hereof, the Financing Commitments are in full force and effect and are the
legal, valid and binding obligations of Purchaser and, to Purchaser’s knowledge,
the applicable counterparties thereto. As of the date hereof, no event has
occurred which, with or without notice, lapse of time or both, would constitute
a default or breach on the part of Purchaser under any term or condition of the
Financing Commitments. Purchaser has fully paid any commitment fees or other
fees incurred in connection with the Debt Financing that have become due and
payable. As of the date of this Agreement, Purchaser has no knowledge that any
of the conditions or other contingencies to the Debt Financing will not be
satisfied upon the satisfaction or waiver of the conditions set forth in
Sections 5.01 and 5.02 or that the Debt Financing will not be available to
Purchaser at the Closing.

SECTION 8.07. No Additional Representations. Except as set forth in Article VI,
Purchaser further acknowledges that none of Seller, its Representatives or any
other person has made any representation or warranty, express or implied, with
respect to the Business or with respect to any information furnished or made
available to Purchaser and its Representatives in connection with the
transactions contemplated hereby, and none of Seller, its Representatives or any
other person shall have or be subject to any liability or indemnification
obligation to Purchaser or any other person resulting from the distribution to
Purchaser, or Purchaser’s use of, any such information, including any
information, documents or material made available in any “data rooms” or
management presentations or in any other form in expectation of the transactions
contemplated hereby. Purchaser acknowledges that, upon the occurrence of any
Closing, Purchaser shall acquire the Shares and Acquired Assets transferred at
such Closing without any representation or warranty, including in respect of the
Acquired Assets as to merchantability or fitness for any particular purpose (or,
in the case of the Transferred Intellectual Property transferred at such
Closing, as to the enforceability or validity thereof), in an “as is” condition
and on a “where is” basis, except as otherwise expressly represented or
warranted in Article VI.

ARTICLE IX

Covenants of Purchaser

Purchaser covenants and agrees as follows:

SECTION 9.01. Confidentiality. (a) Purchaser acknowledges that the information
provided or to be provided to it by or on behalf of Seller in connection with
the transactions contemplated by the Transaction Agreements is subject to the
terms of the confidentiality agreement dated May 11, 2007 (the “Confidentiality
Agreement”), between Purchaser and Seller, the terms of which are incorporated
herein by reference; provided that the Confidentiality Agreement shall not
prohibit any disclosure as may be reasonably required in connection with
arranging the Debt Financing (subject to customary confidentiality
arrangements). The Confidentiality Agreement shall terminate as of the Initial
Closing Date.

 

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(b) Notwithstanding Section 9.01(a), Purchaser agrees that any Evaluation
Material, whether oral or written, relating to Seller or any of its Subsidiaries
(other than information relating to the Business) which is obtained, directly or
indirectly, by Purchaser or any of its Affiliates or any of their
Representatives, including through any transfer to the Transferred Subsidiaries
of Covered Employees, shall be kept confidential thereby and promptly returned
to Seller or, at the request of Seller, destroyed. The covenant set forth in
this Section 9.01(b) shall terminate three years after the Initial Closing Date.

SECTION 9.02. Performance of Obligations by Purchaser After the Closing Dates.
From and after the applicable Closing, Purchaser shall cause the Transferred
Subsidiaries to duly, promptly and faithfully pay, honor, perform and discharge
all the Assumed Liabilities with respect to each Country Unit transferred at
such Closing.

SECTION 9.03. Bulk Transfer Laws. Purchaser hereby waives, for itself and on
behalf of its Subsidiaries, compliance by Seller and its Subsidiaries with the
provisions of any so-called “bulk transfer law” or similar law of any
jurisdiction in connection with the transfers contemplated by the Transaction
Agreements.

SECTION 9.04. Name of Certain Entities. (a) Neither Purchaser nor any of its
Subsidiaries shall have a corporate name, or do business using a name, that
includes as part of its name “Alcoa” or “Aluminum Company of America” or any
derivative thereof. Without limiting the generality of the foregoing, as soon as
practicable following the applicable Closing, Purchaser shall cause the names of
the Transferred Subsidiaries to be changed to names that do not include as part
of their name “Alcoa” or “Aluminum Company of America”.

(b) Notwithstanding anything to the contrary contained in this Agreement,
Purchaser shall, for a period of 180 days following the Initial Closing Date, be
entitled to use the Excluded Marks to (i) package and sell products of the
Business in any packaging material included in the assets transferred to
Purchaser under this Agreement (notwithstanding that such packaging material
contains one or more Excluded Marks), (ii) use stationery, signage, invoices,
receipts, forms and like materials containing one or more Excluded Marks, and
(iii) sell products of the Business from inventory that have the Excluded Marks
or related marks embedded therein or imprinted thereon; provided, however, that
notwithstanding clauses (i) through (iii) above, Purchaser may, for a period of
two years following the Initial Closing Date, continue to manufacture and sell
products of the Business from inventory (either existing at the time of the
Initial Closing or manufactured thereafter) that have one or more Excluded Marks
embedded therein or imprinted thereon so long as Purchaser discontinues such
usage on individual products upon replacing any printing plates and molds
relating to such products. At the end of the applicable periods set forth in
this Section 9.04, Purchaser agrees that it will destroy or return to Seller any
remaining packaging material containing any Excluded Marks.

SECTION 9.05. Access. Without limiting the rights of access afforded by
Section 4.03, after the applicable Closing for each Country Unit, Purchaser
will, and will

 

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cause its Subsidiaries to, give Seller and its Subsidiaries and their
Representatives reasonable access, during normal business hours and upon
reasonable notice, to all management personnel of the Business and all books,
documents, information, data, files and other records relating to (i) Seller’s
operation of the Business conducted by such Country Unit prior to such Closing,
(ii) the Transferred Employees, (iii) the Excluded Assets or (iv) the Excluded
Liabilities, and to furnish copies thereof, which Seller or its Subsidiaries or
their Representatives reasonably request, including in connection with claims,
proceedings, actions, investigations, audits, and other regulatory or legal
proceedings involving (w) the operation of the Business conducted by such
Country Unit prior to such Closing, (x) the Transferred Employees, (y) the
Excluded Assets or (z) the Excluded Liabilities, and Purchaser shall furnish
reasonable assistance (including access to personnel) to Seller and its
Subsidiaries and their Representatives in connection with such claims and other
proceedings. Purchaser shall not, and shall not permit any of the Purchaser
Entities (other than Purchaser) to, destroy any such records prior to the
seventh anniversary of the applicable Closing, and in any event will not destroy
or permit the destruction of any such records without providing Seller with
notice detailing the contents of such records, and providing Seller with the
opportunity to obtain such records, at least 120 days prior to the destruction
thereof.

SECTION 9.06. Replacement of Credit Support. Purchaser shall arrange, at its
sole cost and expense, for replacement arrangements, effective as of the
applicable Closing, for all guarantees, covenants, indemnities, surety bonds,
letters of credit, comfort letters or similar assurances of credit support
provided by Seller or any of its Affiliates for the benefit of the Business that
are in existence as of such Closing (“Seller Guarantees”) and identified in
Section 9.06 of the Seller Disclosure Letter, and shall obtain releases
indicating that Seller and its Affiliates have no further liability with respect
thereto, in each case reasonably satisfactory to Seller. Purchaser shall
indemnify and hold harmless Seller and its Affiliates from and against any
Losses suffered or incurred by them in connection with any Seller Guarantees.

SECTION 9.07. Purchaser Payment in the Event of a Subsequent Third Party Sale.
(a) If within a period of 18 months from the date of the Initial Closing,
Purchaser consummates any Third Party Sale Transaction and the Enterprise Value
represented by such transaction exceeds the Worldwide Purchase Price allocated
to the Business or to the Substantial Part of the Business sold (the “Applicable
Purchase Price”) by more than 10% of such allocated portion of the Worldwide
Purchase Price (the “Threshold”), then Purchaser shall pay Seller, with respect
to such Third Party Sale Transaction, 50% of the amount by which the Enterprise
Value exceeds the sum of the Applicable Purchase Price and the Threshold.

(b) The term “Enterprise Value” shall mean (i) in the case of a sale of assets
or shares or securities, the sum of the cash consideration received by Purchaser
(including (A) amounts paid into escrow or similar accounts on Purchaser’s
behalf, (B) amounts received in respect of a non-compete obligation and
(C) amounts received pursuant to earn-out or other similar provisions, in each
case with respect to such sale of assets or shares or securities) plus any
indebtedness assumed by the third party as part of the Third Party Sale
Transaction, or (ii) in the case of a merger or other transfer involving

 

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an exchange or redemption of shares or securities, the sum of the amount paid by
the third party to purchase such assets (including (A) amounts paid into escrow
or similar accounts on Purchaser’s behalf, (B) amounts received in respect of a
non-compete obligation and (C) amounts received pursuant to earn-out or other
similar provisions, in each case with respect to such merger or other transfer
involving an exchange or redemption of shares or securities), plus the fair
market value of any assets of Purchaser which are retained by or otherwise
distributed to its stockholders or Affiliates in anticipation of or in
connection with the Third Party Sale Transaction, plus any indebtedness assumed
by such third party as part of the Third Party Sale Transaction.

(c) The term “Substantial Part of the Business” shall mean (i) any of the
“Consumer Products”, the “Closure Systems International”, the “Reynolds Food
Packaging” or the “Flexible Packaging” business units as operated by Seller
prior to the Initial Closing Date, (ii) equity ownership interests or assets
representing an interest in or comprising 50% or more of the revenue of any such
business unit, measured as of the date of the Third Party Sale Transaction, or
(iii) equity ownership interests or assets representing an interest in or
comprising 25% or more of the revenue of the Business, measured as of the date
of the Third Party Sale Transaction.

(d) The term “Third Party Sale Transaction” shall mean the divestiture to an
entity that is not a Specified Affiliate (i) of 50% or more of the equity
ownership interest of Purchaser (through a sale of such equity ownership
interest, assets, merger, consolidation or similar transaction) in the Business
or a Substantial Part of the Business, or (ii) of a majority of the business or
assets of Purchaser in a single transaction or a series of related transactions.

SECTION 9.08. Insurance. If (i) any Losses are suffered with respect to an
Excluded Asset or (ii) any Losses arise prior to or following the applicable
Closing that constitute Excluded Liabilities (any Loss described in clause
(i) or (ii), a “Recoverable Matter”), and claims with respect to a Recoverable
Matter may be made against insurance policies of a Transferred Subsidiary that
remain in effect following the applicable Closing or that otherwise were
transferred to Purchaser or its Affiliates, then Purchaser shall use its
commercially reasonable efforts to file, provide notices regarding such claims
and otherwise continue to pursue such claims on behalf of and with the
cooperation of Seller or its Affiliates under the terms of such policies to the
extent of a Recoverable Matter. To the extent the proceeds are not paid directly
to any third party, Purchaser agrees to promptly pay to Seller any such amounts
or assign to Seller any benefits (in each case, net of any out-of-pocket costs
or expenses incurred by Purchaser) that Purchaser or its Affiliates may receive
in respect of such Losses under such insurance policies to the extent such
amounts or benefits arise from such Recoverable Matter; provided that, with
respect to each claim, any amount paid or benefit assigned to Seller shall be
limited to the amount of the related Recoverable Matter for which such claim was
made.

 

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ARTICLE X

Mutual Covenants

Each of Seller and Purchaser covenants and agrees as follows:

SECTION 10.01. Consents. Notwithstanding anything in any of the Transaction
Agreements to the contrary, none of the Transaction Agreements shall constitute
an agreement to assign or transfer any interest in any Assigned Contract,
Acquired Intellectual Property, Acquired Permit or other asset, claim, right or
benefit the transfer of which is otherwise contemplated hereby if such an
assignment or transfer or attempt to make such an assignment or transfer without
the consent or approval of a third party would constitute a breach or other
contravention of the rights of such third party, or affect adversely the rights
of any party hereto or any of their Affiliates, as the case may be, thereunder
(such assets being collectively referred to herein as “Restricted Assets”); and
any transfer or assignment by any Selling Company of any interest under any such
Restricted Asset shall be made subject to such consent or approval being
obtained. Subject to the other terms and conditions of this Section 10.01,
(i) Seller and Purchaser each shall use reasonable best efforts, and shall cause
their Affiliates to use reasonable best efforts, to obtain such consents or
approvals prior to the applicable Closing and (ii) in the event any such consent
or approval is not obtained prior to the applicable Closing, (A) Seller shall
continue at Purchaser’s request to use reasonable best efforts to cooperate with
Purchaser in Purchaser attempting to obtain any such consent or approval, and
(B) to the extent practicable, Seller and Purchaser agree to negotiate in good
faith with respect to alternative arrangements (such as a license, sublease or
operating agreement) (each, an “Alternative Arrangement”) until such time as
such consent or approval has been obtained which result in Purchaser or any of
its Affiliates receiving all the benefits and bearing all the costs, liabilities
and burdens with respect to any such Restricted Asset; provided that (x) subject
to clauses (vi) and (vii) of Section 13.03, Seller shall bear all costs,
expenses, obligations and liabilities incurred in connection with the obtaining
of consents for (and in connection with any Alternative Arrangement for) the
leases for the Leased Properties and (y) Purchaser shall bear all costs,
expenses, obligations and liabilities incurred in connection with the obtaining
of consents from (and in connection with any Alternative Arrangement for) any
customers or suppliers of the Business. Purchaser and Seller each shall
undertake to pay or satisfy one-half of all costs, expenses, obligations and
liabilities incurred by Seller or any of its Subsidiaries in connection with any
Alternative Arrangement except to the extent such Alternative Arrangement arises
from obtaining a consent for any lease for the Leased Properties or from any
customer or supplier of the Business as provided above. Notwithstanding anything
in the Transaction Agreements to the contrary, unless and until any such consent
or approval with respect to any Restricted Asset is obtained, such Restricted
Asset shall not constitute an Acquired Asset and any associated liability shall
not constitute an Assumed Liability for any purpose under the Transaction
Agreements, and, without limiting any other closing condition set forth herein,
the failure of any such consent or approval to be obtained or the failure of any
such Restricted Asset to constitute an Acquired Asset or any circumstances
resulting therefrom shall not, individually or in the aggregate, constitute a
Business Material Adverse Effect or a breach by any of Seller or any of its
Subsidiaries

 

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of any representation or warranty (other than to the extent there is a breach of
Section 6.02(a)), covenant or agreement under any of the Transaction Agreements
except to the extent of any breach by Seller of Section 10.03.

SECTION 10.02. Publicity. Seller and Purchaser each agree that no public release
or announcement concerning the transactions contemplated by the Transaction
Agreements shall be issued by such party or any of its Affiliates or any of
their Representatives without the prior written consent of the other such party,
except as, and then only to the extent, required by applicable law or the rules
or regulations of any United States or foreign securities exchange on which
securities of such party are listed, in which case the party that is required
(or whose Affiliates or Representatives are required) to make the release or
announcement shall allow the other such party reasonable time to comment on such
release or announcement in advance of such issuance; provided, however, that
each of Seller and Purchaser may make internal announcements to their respective
employees that are consistent with the parties’ prior public disclosures
regarding the transactions contemplated hereby after reasonable prior notice to
and consultation with such other party.

SECTION 10.03. Reasonable Best Efforts. Subject to the terms and conditions set
forth in this Agreement, including Section 10.01, each of Seller and Purchaser
shall use its reasonable best efforts to cause each Closing to occur, including
using its reasonable best efforts to obtain all material consents, permits,
authorizations and approvals of, and to make all necessary filings,
notifications or registrations with, all Governmental Entities and other persons
which are necessary for the consummation of the transactions contemplated by the
Transaction Agreements. Further, if the Initial Closing occurs and any Foreign
Country Unit has not been transferred to Purchaser, each of Seller and Purchaser
shall use its reasonable best efforts to cause such Foreign Country Units to be
transferred as promptly as practicable thereafter. The parties agree that the
obligations of Seller under this Section 10.03 and under Section 10.04 shall not
require it to spend any material amount of money or make any material economic
concessions in connection with (i) the Debt Financing, (ii) obtaining consents
for which Purchaser bears the costs, expenses, obligations and liabilities under
Section 10.01 and (iii) obtaining approvals required by the HSR Act or any other
antitrust or competition law or regulation; provided, however, that Seller shall
pay the costs, fees and expenses (x) imposed on Seller in connection with the
making of all filings, notifications or registrations with all Governmental
Entities which are necessary for the consummation of the transactions
contemplated by the Transaction Agreements and (y) incurred by Seller in
furnishing any information and assistance as may be reasonably requested by
Purchaser as provided in Section 10.04.

SECTION 10.04. Regulatory Matters. Without limiting the generality of
Section 10.03, each of Seller and Purchaser shall (i) as promptly as practicable
make any filing with the FTC and the DOJ required under the HSR Act with respect
to the transactions contemplated by the Transaction Agreements, (ii) as promptly
as practicable make or cause their Affiliates to make any filing or notice
required under any other antitrust or competition law or other law or regulation
applicable to the Transaction Agreements or the transactions contemplated
thereby and (iii) provide any supplemental

 

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information requested in connection with the HSR Act or such other antitrust,
competition or other laws or regulations as promptly as practicable after such
request is made. Each of Seller and Purchaser shall, and shall cause their
Affiliates to, furnish to the other such information and assistance as the other
may reasonably request in connection with its preparation of any filing or
submission which is necessary under the HSR Act or such other laws or
regulations or which is otherwise requested by the FTC or DOJ or other
Governmental Entity in the course of any review of the transactions contemplated
by the Transaction Agreements. Seller and Purchaser shall keep each other
apprised of the status of any communications with, and inquiries or requests for
additional information from, the FTC and DOJ or other Governmental Entity.
Without limiting the generality of Section 10.03, each of Seller and Purchaser
shall use its reasonable best efforts to obtain any clearance or approvals
required under the HSR Act or such other laws or regulations for the
consummation of the transactions contemplated by the Transaction Agreements. For
purposes of Sections 10.03 and 10.04 of this Agreement, the “reasonable best
efforts” of Purchaser shall include a proffer of its willingness to accept an
order to divest any Shares or Acquired Assets and to hold separate such Shares
or Acquired Assets pending such divestiture (and the execution of a consent
decree or other agreement giving effect thereto).

SECTION 10.05. Intracompany and Intercompany Arrangements. (a) Intracompany
Arrangements. Seller and Purchaser acknowledge and agree that, except as
specifically agreed by them in writing, each Intracompany Arrangement shall
remain outstanding and shall not be settled (other than settlements that occur
in the ordinary course) until Purchaser has acquired all the Country Units that
are parties to such arrangement, notwithstanding the terms of such arrangement.

(b) Intercompany Arrangements.

(i) Seller and Purchaser acknowledge and agree that, except as specifically
agreed by them in writing, prior to the Closing for each Country Unit, all
Applicable Intercompany Arrangements for such Country Unit shall be terminated
and all related intercompany balances shall be settled, except for Applicable 30
Days’ Trade Accounts Payable and Applicable 30 Days’ Trade Accounts Receivable
for such Country Unit which shall remain outstanding; provided that in the event
that Seller cannot terminate and settle any Applicable Intercompany Arrangement
in respect of a Country Unit (other than any Applicable 30 Days’ Trade Accounts
Payable or any Applicable 30 Days’ Trade Accounts Receivable) prior to the
Closing of such Country Unit, Seller shall use reasonable best efforts to
terminate and settle such Applicable Intercompany Arrangement post-Closing on
the same basis as if it had been terminated and settled prior to the applicable
Closing (it being understood and agreed that to the extent a Country Unit after
the Closing of such Country Unit makes any payment to Seller or its Subsidiaries
(other than the Transferred Subsidiaries) pursuant to such an unterminated
Intercompany Arrangement (other than an Applicable 30 Days’ Trade Accounts
Payable) or receives from Seller or its Subsidiaries (other than the Transferred
Subsidiaries) any payment pursuant to such an unterminated Intercompany
Arrangement (other than an Applicable 30 Days’ Trade Accounts

 

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Receivable), there shall be a net cash settlement between Purchaser and Seller
to fully reverse such payments promptly following such Closing in connection
with the settlement and termination of such Applicable Intercompany Arrangement.

(ii) Notwithstanding anything in this Agreement to the contrary, Seller and
Purchaser acknowledge and agree that (A) all Intercompany Arrangements to which
a Country Unit for which there has not been a Closing is a party shall remain in
full force and effect until the Closing for such Country Unit and (B) Purchaser
shall, or shall cause any Country Unit for which a Closing has occurred to,
enter into any arrangement with Seller or any of its Subsidiaries consistent
with past practice, in each case to the extent necessary to allow Seller to
conduct the Business in the ordinary course through each Country Unit for which
there has not been a Closing until the applicable Closing with respect to such
Country Unit.

(c) Definitions. (i) The term “Intracompany Arrangement” shall mean any account
or arrangement between, among or within one or more Country Units, including
(i) between a Transferred Subsidiary and any other Transferred Subsidiary,
(ii) between a Transferred Subsidiary and an Asset Selling Company (to the
extent that such account or arrangement arises from the Business), (iii) between
an Asset Selling Company and any other Asset Selling Company (to the extent that
such account or arrangement arises from the Business) or (iv) within an Asset
Selling Company (to the extent that such account or arrangement arises from the
Business).

(ii) The term “Intercompany Arrangement” shall mean any account or arrangement
between a Country Unit (including an Applicable Asset Selling Company or an
Applicable Transferred Subsidiary), on the one hand, and Seller or any of its
Subsidiaries (other than any Applicable Asset Selling Company or Applicable
Transferred Subsidiary), on the other hand.

(iii) The term “Applicable Asset Selling Company” shall mean, in respect of a
Country Unit, an Asset Selling Company which transfers Acquired Assets and
Assumed Liabilities in respect of the Business of such Country Unit to Purchaser
on the applicable Closing Date for such Country Unit.

(iv) The term “Applicable Transferred Subsidiary” shall mean, in respect of a
Country Unit, a Transferred Subsidiary which is transferred to Purchaser on the
applicable Closing Date in respect of such Country Unit.

(v) The term “Applicable Intercompany Arrangement” shall mean, with respect to a
Country Unit, an Intercompany Arrangement to which an Applicable Transferred
Subsidiary or an Applicable Asset Selling Company of such Country Unit is a
party.

(vi) The term “Applicable 30 Days’ Trade Accounts Payable” shall mean, in
respect of a Country Unit, trade accounts payable by such Country Unit to Seller
or its Subsidiaries (other than an Applicable Asset Selling Company or an

 

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Applicable Transferred Subsidiary of such Country Unit) and outstanding for 30
days or less prior to the applicable Closing Date for such Country Unit.

(vii) The term “Applicable 30 Days’ Trade Accounts Receivable” shall mean, in
respect of a Country Unit, trade accounts receivable by such Country Unit from
Seller or its Subsidiaries (other than an Applicable Asset Selling Company or an
Applicable Transferred Subsidiary of such Country Unit) and outstanding for 30
days or less prior to the applicable Closing Date for such Country Unit.

SECTION 10.06. Further Assurances. From time to time after the applicable
Closing, and for no further consideration, each of Seller and Purchaser shall,
and shall cause their respective Affiliates to, execute, acknowledge and deliver
such assignments, transfers, consents, assumptions and other documents and
instruments and take such other actions as may reasonably be requested to more
effectively convey to, transfer to or vest in Purchaser, the Shares, the
Acquired Assets and the Assumed Liabilities contemplated by this Agreement to be
transferred or assumed at such Closing (including (i) transferring back to the
relevant Selling Company any asset or liability which is not an Acquired Asset
or Assumed Liability, respectively, and which asset or liability was transferred
to Purchaser and (ii) transferring to Purchaser any Acquired Asset or Assumed
Liability contemplated by this Agreement to be transferred to Purchaser which
was not so transferred).

SECTION 10.07. Other Transaction Agreements. Subject to the terms and conditions
hereof, each of Seller and Purchaser shall cause its Affiliates who are parties
to Other Transaction Agreements to perform, pay and satisfy all of their
respective obligations and liabilities thereunder as and when due.

SECTION 10.08. Purchase Price Allocation. (a) As of the date of this Agreement,
Seller and Purchaser have agreed to allocate the Worldwide Purchase Price
(including all Assumed Liabilities) among (i) the “Consumer Products” division,
(ii) the “Flexible Packaging” division, (iii) the “Reynolds Food Packaging”
division, (iv) the “Closure Systems International” division and (v) the covenant
given by Seller in Section 10.10, as set forth in Annex 5 (the “Allocation
Schedule”), which allocation shall be final and binding on Seller and Purchaser.

(b) At or prior to the date of this Agreement, Seller shall engage KPMG as
independent appraisal firm (the “Appraisal Firm”) to perform, based upon and
consistent with the Allocation Schedule, an appraisal to determine the detailed
allocation of the Worldwide Purchase Price (including all Assumed Liabilities)
among the Country Units, the Shares and the Acquired Assets (as finalized in
accordance with this Section 10.08, the “Appraisal”) for Tax purposes.

(c) Seller shall (i) furnish to the Appraisal Firm and Purchaser all information
reasonably requested by the Appraisal Firm in connection with the Appraisal,
(ii) control and supervise the Appraisal Firm, (iii) keep Purchaser reasonably
informed about drafts of the Appraisal and provide copies of any such drafts to
Purchaser, (iv) give

 

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Purchaser the opportunity to provide written comments on such drafts,
(v) consider, and cause the Appraisal Firm to consider, any such comments of
Purchaser in good faith, and (vi) give Purchaser a reasonable opportunity to
participate in, listen to, or be copied on all material communications with the
Appraisal Firm. For the avoidance of doubt, all material information provided to
the Appraisal Firm by Seller shall also be provided to Purchaser.

(d) Not later than February 15, 2008, the Appraisal Firm shall deliver the
Appraisal, which shall be binding upon Seller and Purchaser for all Tax
purposes; provided that, notwithstanding anything else contained herein, in the
event of a disagreement between Seller and Purchaser about a material item in
any draft appraisal, the Appraisal Firm shall not deliver the Appraisal until
such disagreement is resolved by the parties.

(e) Seller shall be responsible for 50% of the fees and expenses of the
Appraisal Firm, and Purchaser shall be responsible for 50% of such fees and
expenses.

(f) Seller shall prepare, or cause its respective Affiliates to prepare, IRS
Form 8594 (and any similar forms under applicable state, local or foreign Tax
laws) in accordance with the Appraisal and applicable Tax laws (the “Proposed
Purchase Price Allocation”). Seller shall present such Proposed Purchase Price
Allocation to Purchaser for review as soon as reasonably practicable after the
receipt of the Appraisal. Except as provided in Section 10.08(g) and (h), at the
close of business on the 30th day after delivery of the Proposed Purchase Price
Allocation, the Proposed Purchase Price Allocation shall become binding upon
Purchaser and Seller and shall be the final allocation (the “Final Purchase
Price Allocation”).

(g) Purchaser shall raise any objection to the Proposed Purchase Price
Allocation in writing within 30 days of the delivery of the Proposed Purchase
Price Allocation. Seller and Purchaser shall negotiate in good faith to resolve
any difference for 30 days after delivery of any objection by Purchaser. If
Purchaser and Seller reach written agreement amending the Proposed Purchase
Price Allocation, then the Proposed Purchase Price Allocation, as so amended,
shall become binding upon Purchaser and Seller and shall be the Final Purchase
Price Allocation.

(h) If Seller and Purchaser cannot agree on the appropriate allocation within
the 30-day period set forth in Section 10.08(g) above, then all remaining
disputed items shall be submitted for resolution by an accounting firm mutually
selected by Seller and Purchaser (the “Allocation Accounting Firm”). The
Allocation Accounting Firm shall make a final determination as to the disputed
items within 30 days after such submission. Such determination shall be limited
to determining whether the Proposed Purchase Price Allocation is both reasonable
and reasonably likely to be sustained in an IRS audit and shall be final,
binding and conclusive on Seller and Purchaser and shall be the Final Purchase
Price Allocation. The fees and expenses of the Allocation Accounting Firm shall
be shared equally between Seller and Purchaser.

 

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(i) Except as required by Law, Seller and Purchaser shall not take, or permit
any of their respective Affiliates to take, any Tax position inconsistent with
the Appraisal or the Final Purchase Price Allocation.

(j) If, as a result of a change in circumstances (including indemnity payments
under Article XIII) after the preparation of the Final Purchase Price
Allocation, the Worldwide Purchase Price will be adjusted, then the Appraisal
and Final Purchase Price Allocation shall be adjusted accordingly.

SECTION 10.09. Debt Financing.

(a) (i) Seller shall, and shall cause its Subsidiaries to, and shall request
that its and its Subsidiaries’ independent auditors, legal counsel and other
advisors, provide reasonable cooperation in connection with the arrangement of
the Debt Financing as may be reasonably requested by Purchaser or its
Affiliates, including:

(A) participating in a reasonable number of management presentations and due
diligence sessions for the benefit of Purchaser’s Debt Financing sources;
provided that the persons participating in such management presentations shall
be limited to Covered Employees;

(B) providing Purchaser and its financing sources with all financial and other
pertinent information regarding the Business as may be reasonably requested by
the lenders of Purchaser that is of the type and form customarily included in
private placement memoranda relating to private placements under Rule 144A of
the Securities Act of 1933, as amended; provided that Seller shall have no
obligation to provide audited financial information other than the Audited
Financial Statements that have been provided as of the date of this Agreement;

(C) using reasonable efforts to obtain accountants’ comfort letters,
accountants’ reports and accountants’ consents reasonably necessary in
connection with the Debt Financing;

(D) reasonably cooperating with Purchaser’s facilitation of the delivery in
connection with the Debt Financing of collateral security, surveys and title
insurance with respect to the Business; and

(E) reasonably cooperating with surety bond and letter of credit providers with
respect to the Debt Financing;

provided that (x) such requested cooperation does not unreasonably interfere
with the ongoing operations of Seller and its Subsidiaries, (y) neither Seller
nor any of its Subsidiaries shall be required to pay any commitment or other
similar fee or incur any other liability (for which it is not indemnified by
Purchaser) in connection with the Debt Financing and (z) Seller and its
representatives shall not be required to deliver any certificates or legal
opinions in connection with the Debt Financing. Purchaser shall

 

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reimburse Seller for reasonable out-of-pocket costs incurred in connection with
the Debt Financing.

(ii) Seller shall have the right to consent (not to be unreasonably withheld) to
the use of the logos and trademarks of the Business in connection with the Debt
Financing.

(b) (i) Purchaser shall, and shall cause its Affiliates to, use reasonable best
efforts to take, or cause to be taken, all appropriate action, do, or cause to
be done, all things reasonably necessary, proper or advisable under applicable
laws, and to execute and deliver, or cause to be executed and delivered, such
instruments and documents as may be required, to arrange and consummate the Debt
Financing on or prior to the Initial Closing on the terms and subject only to
the conditions contained in the Financing Commitments (or replacement
commitments obtained by Purchaser in compliance with this Agreement), including
using its reasonable best efforts to cause the conditions in the Financing
Commitments (or replacement commitments obtained by Purchaser in compliance with
this Agreement) that are within Purchaser’s control to be satisfied. For the
avoidance of doubt and notwithstanding anything to the contrary in this
Section 10.09, Purchaser acknowledges and agrees that its obligation to
consummate the transactions contemplated by this Agreement on the terms and
subject to the conditions set forth herein are not conditioned upon the
availability or consummation of the Debt Financing or receipt of the proceeds
therefrom.

(ii) Purchaser shall not agree to any material amendment, supplement or other
modification of, or waive any of its rights under, the Financing Commitments (or
replacement commitments obtained by Purchaser in compliance with this Agreement)
or the definitive agreements relating to the Debt Financing without Seller’s
prior written consent, except that Purchaser may amend, supplement or otherwise
modify or replace the Financing Commitments (or replacement commitments obtained
by Purchaser in compliance with this Agreement) if such amendment, supplement or
other modification or replacement (A) does not contain additional or modified
conditions or other similar contractual contingencies limiting the obligation of
the lenders to fund the Debt Financing relative to those contained in the
Financing Commitments (or replacement commitments obtained by Purchaser in
compliance with this Agreement) and (B) is otherwise not reasonably likely to
impair or delay the funding of the Debt Financing or the Closings (it being
understood that, subject to the requirements of this clause (ii), such
amendment, supplement or other modification of the Financing Commitments (or
replacement commitments obtained by Purchaser in compliance with this Agreement)
may provide for the assignment of a portion of the Financing Commitments (or
replacement commitments obtained by Purchaser in compliance with this Agreement)
to additional agents or arrangers and grant such persons approval rights with
respect to certain matters as are customarily granted to additional agents or
arrangers).

(iii) If any portion of the Debt Financing becomes unavailable on the terms and
conditions contained in the Financing Commitments (or any

 

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replacement commitments obtained by Purchaser in compliance with this
Agreement), Purchaser shall promptly notify Seller, and Purchaser shall have the
right but not the obligation to seek and obtain replacement commitments for
financing on such terms as may be available. If such replacement commitments are
obtained, copies of such replacement commitments will promptly be provided to
Seller. For the avoidance of doubt and notwithstanding anything to the contrary
in this Section 10.09, Purchaser acknowledges and agrees that its obligation to
consummate the transactions contemplated by this Agreement on the terms and
subject to the conditions set forth herein are not conditioned upon the
availability or consummation of the Debt Financing, the availability of any such
replacement commitments or receipt of the proceeds therefrom.

(c) Purchaser shall, upon request by Seller, update Seller regarding the status
of the Debt Financing.

SECTION 10.10. Non-Solicitation; Non-Competition.

(a) (i) Seller agrees that for the period commencing on the Initial Closing Date
and expiring on the first anniversary thereof, unless otherwise agreed to by
Seller and Purchaser, neither Seller nor any of its Subsidiaries will directly
or indirectly (i) induce or encourage any Covered Employee holding a management
or executive level position to reject Purchaser’s offer of employment or accept
any other position or employment, (ii) solicit for employment or any similar
arrangement any Transferred Employee who holds a management or executive level
position with Purchaser or any of its Affiliates after the Initial Closing Date
or (iii) employ or assist any other person in employing any such Transferred
Employee; provided, however, that this Section 10.10(a)(i) shall not prohibit
(x) a general solicitation to the public or the hiring of someone who responds
to such general solicitation or (y) the hiring of any employee who is terminated
by Purchaser and its Affiliates. Purchaser shall, and shall cause its Affiliates
to, render full cooperation to Seller in Seller’s efforts to solicit for
employment or any similar arrangement, or employ or otherwise retain, any
Transferred Employee who is terminated by Purchaser and its Affiliates after the
Initial Closing Date.

(ii) Purchaser agrees that for the period commencing on the Initial Closing Date
and expiring on the first anniversary thereof, unless otherwise agreed to by
Seller and Purchaser, neither Purchaser nor any of its Affiliates will directly
or indirectly (i) solicit for employment or any similar arrangement any employee
of Seller or its Affiliates who holds a management or executive level position
with Seller or any of its Affiliates after the Initial Closing Date or
(ii) employ or assist any other person in employing any such employee of Seller
or its Affiliates; provided, however, that this Section 10.10(a)(ii) shall not
prohibit (x) a general solicitation to the public or the hiring of someone who
responds to such general solicitation or (y) the hiring of any employee who is
terminated by Seller and its Affiliates.

(b) (i) From the date of this Agreement to the third anniversary of the Initial
Closing Date, neither Seller nor any of its Subsidiaries shall directly or
indirectly

 

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engage in any business that competes in any material respect with the Business
as conducted on the Initial Closing Date (a “Prohibited Business”); provided
that “Prohibited Business” shall not include any business (other than the
Business) that is conducted by Seller or its Subsidiaries on the date of this
Agreement.

(ii) Section 10.10(b)(i) shall be deemed not breached as a result of the
ownership by Seller or any of its Affiliates of (i) less than an aggregate of
20% of any class of equity interests in a person engaged, directly or
indirectly, in a Prohibited Business, (ii) less than 20% of the aggregate
principal amount of indebtedness of a person engaged, directly or indirectly, in
a Prohibited Business or (iii) a person that engages, directly or indirectly, in
a Prohibited Business if such Prohibited Business accounts for less than 20% of
such person’s consolidated annual revenues or earnings.

SECTION 10.11. Migration Services. In the event that Purchaser requires any
migration services (the “Migration Services”) in respect of the Business to
Purchaser or designated third parties, Purchaser shall submit a written request
describing such services to Seller, and the parties shall meet to discuss and
mutually agree, each party acting reasonably, on the scope of the Migration
Services (it being understood that Purchaser shall desire to execute such
Migration Services as soon as practicable). Seller will then provide the
Migration Services pursuant to the timing schedule and terms that are mutually
established. By way of example, Section 10.11 of the Seller Disclosure Letter
lists the Migration Services that Seller will provide to facilitate Purchaser’s
migration. Seller shall pay for all of its internal costs and expenses
associated with the Migration Services. Purchaser shall pay for all third-party
costs and expenses, including Seller’s out-of-pocket expenses, associated with
the Migration Services.

SECTION 10.12. New Purchaser Entities. Seller agrees that, prior to the Initial
Closing Date, Purchaser shall have the right to use the name “Reynolds” as part
of the company name of one or more legal entities organized for the purpose of
consummating the transactions contemplated by the Transaction Agreements (each,
a “New Purchaser Entity”); provided that (i) no New Purchaser Entity shall
engage in any business activity prior to the Initial Closing Date (other than
activities associated with obtaining Permits needed to commence the operation
and conduct of the Business following the applicable Closing) and (ii) in the
event of any termination of this Agreement, Purchaser shall, as soon as
practicable, cause the corporate name of each New Purchaser Entity to be changed
to a name that does not include as part of its name “Reynolds”.

SECTION 10.13. Mutual Non-Assert. (a) Purchaser agrees that it will not assert
against Seller any claims founded in the Transferred Technology or Transferred
Intellectual Property, it being acknowledged that Seller and its Subsidiaries
shall have the right to use such items in the conduct of its business; provided,
however, that the foregoing does not apply to Transferred Technology or
Transferred Intellectual Property that is as of the applicable Closing
exclusively used by Seller and its Subsidiaries in the conduct of Business as of
such Closing unless such Transferred Technology or Transferred Intellectual
Property has been used in a business (other than the Business) of

 

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Seller or its Subsidiaries within the three years prior to the date of this
Agreement; provided, however, that the foregoing does not apply to Purchaser’s
rights to the Acquired Marks.

(b) Seller agrees that it will not assert against Purchaser any claims that are
founded in Seller’s intellectual property rights that are used in the conduct of
the Business and existing as of the Initial Closing Date, it being acknowledged
that Purchaser and its Subsidiaries shall have the right to use such items in
the conduct of its business; provided, however, that the foregoing does not
apply to Seller’s rights to the Seller Marks or the intellectual property listed
in Section 10.13(b) of the Seller Disclosure Letter.

SECTION 10.14. Pre-Closing Transition Planning. From time to time prior to the
Initial Closing, representatives of Seller and Purchaser shall have in person or
telephonic meetings to discuss the transition of material commercial
arrangements of the Business to Purchaser, including the transitioning of
third-party payments to the account of Purchaser, the establishing of new bank
accounts for Transferred Subsidiaries and the replacement of bonds and powers of
attorney, all with the intent of minimizing disruption to the Business
immediately following the Initial Closing. Seller agrees to provide notices to
third parties requested by Purchaser in such form as may be agreed by Seller and
Purchaser. Seller also agrees to use reasonable commercial efforts to identify
with greater detail any material Permits that are described in general terms on
Section 6.15.

SECTION 10.15. Japanese Subsidiary. (a) Purchaser shall, with the reasonable
assistance of Seller and its Subsidiaries, and in accordance with applicable
Law, prepare to launch a tender offer for the purchase by Purchaser or any of
its Affiliates of all of the issued and outstanding shares of capital stock of
Alcoa Closure Systems Japan, Ltd. (the “Japanese Subsidiary”), including,
without limitation, all shares of the Japanese Subsidiary owned by the
applicable Stock Selling Company (the “Tender Offer”). Purchaser need not launch
the Tender Offer until the date of the Initial Closing.

(b) Notwithstanding anything herein to the contrary, Seller and Purchaser agree
that (i) in no event shall a Foreign Country Unit Closing occur in respect of
the Foreign Country Unit located in Japan prior to the valid and legal tender of
shares by the applicable Stock Selling Company in the Tender Offer in accordance
with applicable Law and (ii) the aggregate consideration to paid by Purchaser or
its Affiliates in the Tender Offer for shares of the Japanese Subsidiary owned
by Seller or its Affiliates shall not exceed the purchase price allocated to the
Foreign Country Unit located in Japan (which shall be calculated based on the
Appraisal or as the parties may otherwise agree).

ARTICLE XI

Other Transaction Agreements

SECTION 11.01. Scrap Metal Agreement. On the Initial Closing Date, Purchaser and
Seller agree that a Scrap Metal Agreement, substantially in the form attached as
Exhibit C hereto (the “Scrap Metal Agreement”) will be executed by the parties
thereto.

 

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SECTION 11.02. Metal Supply Agreement. On the Initial Closing Date, Purchaser
and Seller agree that a Metal Supply Agreement with respect to the provision of
aluminum from Seller or its Affiliates to Purchaser, substantially in the form
attached as Exhibit E hereto (the “Metal Supply Agreement”) will be executed by
the parties thereto.

SECTION 11.03. Intellectual Property Assignments. On the Initial Closing Date,
Purchaser and Seller agree that a U.S. Patents and Patent Applications
Assignment, substantially in the form attached as Exhibit F-1 hereto, Foreign
Patents and Patent Applications Assignment, substantially in the form attached
as Exhibit F-2 hereto, U.S. Trademark Assignment, substantially in the form
attached as Exhibit F-3 hereto, Foreign Trademark Assignment, substantially in
the form attached as Exhibit F-4 hereto, Copyright Assignment, substantially in
the form attached as Exhibit F-5 hereto, and Domain Name Assignment,
substantially in the form attached as Exhibit F-6 hereto (collectively, the
“Intellectual Property Assignments”) will be executed by the parties hereto.

ARTICLE XII

Employee Matters

SECTION 12.01. General. (a) Offer of Employment; Continuation of Employment;
Credited Service; Cooperation. (i) A reasonable time prior to the Initial
Closing Date, Seller shall make available to Purchaser a true and complete list
of each Covered Employee, as well as documentation regarding each Covered
Employee’s current salary or wages, employer, years of service with Seller and
its Affiliates, location, and other information regarding each Covered
Employee’s variable/incentive/bonus pay opportunities and employee benefits and
Terms and Conditions of Employment reasonably necessary for Purchaser to
determine and comply, in each case in all material respects, with its
obligations under this Article XII and, with respect to Covered Employees whose
employment does not transfer automatically to Purchaser or its Affiliates either
pursuant to applicable Law or as a result of the transfer to Purchaser of the
Shares, commission, accrued vacation, benefit/entitlements and other information
reasonably necessary for Purchaser to determine in all material respects the
terms and conditions of such employee’s employment with Purchaser following the
applicable Closing Date and offer employment to such employee as provided in
Section 12.01(a) of this Agreement, but only to the extent that Seller and its
Subsidiaries are not prohibited from making such information available as a
result of applicable Laws regarding the safeguarding of data privacy or any
other obligation to maintain the confidentiality of such information (in which
case the parties will cooperate to disclose to Purchaser such information in
accordance with applicable Law). Except where a Covered Employee’s employment
transfers automatically to Purchaser or its Affiliates upon the sale of the
Business either pursuant to applicable Law or as a result of the transfer to
Purchaser of the Shares, or as otherwise provided under this Section 12.01(a)
with respect to an Employee on Disability Leave, Purchaser shall, or shall cause
its Affiliates to, offer employment, effective as of 12:01 a.m. on the
applicable Closing Date (which offers shall be made in compliance with
Purchaser’s covenants set forth in this Article XII), to each

 

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Covered Employee, other than any Employee on Disability Leave (each such Covered
Employee, an “Active Employee”) with job responsibilities that are substantially
similar to such Covered Employee’s job responsibilities immediately prior to
such applicable Closing Date. In the case of each Covered Employee who is an
Active Employee and whose employment transfers to Purchaser or its Affiliates
automatically under applicable Law upon the applicable Closing Date, effective
as of 12:01 a.m. on the applicable Closing Date, Purchaser shall continue such
Covered Employee’s employment with job responsibilities that are substantially
similar to such Covered Employee’s job responsibilities immediately prior to the
applicable Closing Date. For purposes of this Agreement, any Covered Employee
who is not actively at work on the applicable Closing Date due to a leave of
absence (including due to vacation, holiday, sick leave, family leave, workers’
compensation, maternity or paternity leave, military leave, jury duty,
bereavement leave or injury) in compliance with the applicable policies of the
Selling Companies, other than any Employee on Disability Leave, shall be
considered an Active Employee. With respect to any Employee on Disability Leave,
effective as of the date on which such Employee on Disability Leave presents
himself or herself to Purchaser for active employment following the applicable
Closing Date, provided such Employee on Disability Leave presents himself or
herself to Purchaser for active employment within one year following the
applicable Closing Date or such longer period otherwise required by applicable
Law or a collective bargaining agreement identified in Section 6.13 of the
Seller Disclosure Letter, (A) in the case of any such Employee on Disability
Leave who was employed by a Transferred Subsidiary immediately prior to the date
such employee’s disability leave began, Purchaser shall cause such Transferred
Subsidiary to continue the employment of such Employee on Disability Leave, and
(B) in the case of any such Employee on Disability Leave who was employed by an
Asset Selling Company immediately prior to the date such employee’s disability
leave began, Purchaser shall, or shall cause its Affiliates to, make an offer of
employment (which offer shall be made in compliance with Purchaser’s covenants
set forth in this Article XII) to such Employee on Disability Leave, in the case
of both of the foregoing clauses (A) and (B), (x) with job responsibilities that
are substantially similar to such employee’s job responsibilities with the Asset
Selling Companies or the Transferred Subsidiaries, as applicable, immediately
prior to the date such Employee on Disability Leave commenced disability leave,
and (y) to the same extent, if any, as the Asset Selling Companies or
Transferred Subsidiaries would have been required to re-employ or continue the
employment of, as applicable, such employee under applicable Law and any
applicable collective bargaining agreement if the transactions contemplated by
this Agreement had not occurred. Seller shall and shall cause each of the
Selling Companies and Transferred Subsidiaries to use all reasonable efforts to
encourage the Covered Employees to make available their employment services to
Purchaser as set forth above.

(ii) Offers of employment made by Purchaser pursuant to Section 12.01(a)(i)
shall be sufficient in all material respects to avoid statutory and contractual
or other severance or separation obligations (including avoiding any enhanced
retirement obligations under the Seller Benefit Plans listed in Section 6.11(a)
of the Seller Disclosure Letter), other than where such severance or separation
obligations (“Automatic Obligations”) arise either (A) solely as a result of the
consummation of the transactions contemplated by this Agreement or

 

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(B) as a result of a Covered Employee’s refusal to accept the offer of
employment made by, or voluntary termination of employment with, Purchaser or
one of its Affiliates, notwithstanding in the case of each of clauses (A) and
(B), that the offer of continued employment and the terms and conditions of such
offer comply with the applicable provisions of this Article XII, pursuant to
applicable Law or pursuant to any applicable plan or policy, any applicable
employment agreement, collective bargaining agreement, Seller Benefit Plan or
otherwise. Purchaser and its Affiliates shall assume all obligations,
liabilities and commitments in respect of claims made by any Covered Employee
for severance or other termination benefits (including claims for wrongful
dismissal, notice of termination of employment or pay in lieu of notice) arising
out of, relating to or in connection with Purchaser’s failure to offer
employment to, or continue the employment of, any Covered Employee in accordance
with the applicable provisions of this Article XII. The costs relating to claims
made by Covered Employees for Automatic Obligations shall be allocated between
Seller and Purchaser in the following manner: (1) each of Seller and Purchaser
shall be responsible for 50% of the cost relating to claims made by Covered
Employees for Automatic Obligations that are required to be paid under
applicable Law, (2) Purchaser and its Affiliates shall be responsible for 100%
of the cost relating to claims made by Covered Employees for Automatic
Obligations that are required to be paid under a collective bargaining agreement
identified in Section 6.13 of the Seller Disclosure Letter and (3) Seller and
its Affiliates shall be responsible for 100% of the cost relating to all other
claims made by Covered Employees for Automatic Obligations. Each Covered
Employee who accepts employment with Purchaser and its Affiliates as of the
applicable Transfer Time, or whose employment continues with Purchaser and its
Affiliates as of the applicable Transfer Time, shall be referred to herein as a
“Transferred Employee”.

(iii) From and after the applicable Transfer Time, Purchaser shall, or shall
cause its Affiliates to, give each Transferred Employee full credit for such
Transferred Employee’s service with Seller and its Affiliates (and with any
predecessor employer) (such service, “Pre-Closing Service”) for all purposes
(including for purposes of eligibility to participate, level of benefits, early
retirement eligibility and early retirement subsidies and vesting), except to
the extent specifically provided in this Agreement, under any employee benefit
plan, arrangement, collective bargaining agreement and employment-related
entitlements provided, sponsored, maintained or contributed to by Purchaser or
its Affiliates, in each case, to the same extent recognized by Seller and its
Affiliates immediately prior to the applicable Transfer Time, except to the
extent such credit would result in duplication of benefits for the same period
of service. Notwithstanding the foregoing, and except to the extent required by
applicable Law or any applicable collective bargaining agreement identified in
Section 6.13 of the Seller Disclosure Letter, Purchaser and its Affiliates shall
only be required to provide Transferred Employees with credit for Pre-Closing
Service for benefit accrual purposes under a defined benefit pension plan or
post-employment medical plan if such plan is an Assumed Benefit Plan or if such
plan has assumed

 

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the liabilities that relate to such Transferred Employee under any Seller
Benefit Plan.

(iv) Purchaser shall, and shall cause its Affiliates to, render full good faith
cooperation to Seller in providing in due time all information required by law
or reasonably requested by applicable works councils, labor unions and employee
representatives with respect to (A) Purchaser and its Affiliates, (B) the sale
of the Business, (C) the transfer of the Covered Employees to Purchaser and its
Affiliates, (D) the material consequences of the transaction to the Covered
Employees and (E) the compensation and benefits to be provided to Covered
Employees following the applicable Closing Date. In addition, Purchaser shall,
and shall cause its Affiliates to, provide Seller with any other information
that may be required by applicable Law to respond to any reasonable questions
posed by employees, works councils, labor unions, employee representatives or
any other persons or entities with respect to the transactions contemplated by
this Agreement. Purchaser shall, and shall cause its Affiliates to, render full
good faith cooperation to Seller, and Seller shall render full cooperation to
Purchaser, in each case in any negotiations with works councils or unions or
employee representatives that are required or initiated to accomplish the
transfer of any Covered Employees to Purchaser as contemplated by this
Agreement.

(b) Continuation of Benefits. Without limiting the generality of
Section 12.01(a), and except as specifically provided otherwise in this
Article XII, Purchaser shall, or shall cause its Affiliates to, provide for the
duration of the Continuation Period (as defined below) each Transferred Employee
with (i) base salary or wages at a rate not less than that provided to such
Transferred Employee immediately prior to the applicable Transfer Time,
(ii) variable/incentive/bonus pay opportunities that are substantially
comparable in the aggregate (excluding (x) any equity-based compensation but
including any value attributable to such equity-based compensation, (y) any
change in control or special compensation arrangement related to the
transactions contemplated herein (including, but not limited to, any plan,
program or agreement that is described in clause (i) or (ii) of Section 6.11(a))
or (z) any compensation that is forfeited by the Transferred Employee in
connection with the consummation of the transactions contemplated by this
Agreement) to the value of such Transferred Employee’s variable/incentive/bonus
pay opportunities immediately prior to the applicable Transfer Time (it being
understood that Purchaser will not, and shall not be obligated to, offer
equity-based compensation to any Transferred Employees), and (iii) employee
benefits that are substantially comparable in the aggregate to those provided to
such Transferred Employee immediately prior to the applicable Transfer Time;
provided, however, that such substantially comparable benefits need not include
(x) any particular plan or benefit that was provided to or maintained for
Transferred Employees prior to the Transfer Time or (y) any defined benefit
pension plan or any post-retirement medical benefits, except in the case of
clauses (x) and (y) to the extent required under applicable Law, as required by
any applicable collective bargaining agreement identified in Section 6.13 of the
Seller Disclosure Letter or as otherwise expressly provided in this Article XII.
For purposes of this Agreement, “Continuation Period” means the one-year period
immediately following the applicable Closing Date.

 

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(c) Severance. Notwithstanding anything in this Agreement to the contrary,
Purchaser shall provide, or shall cause its Affiliates to provide, to each
Covered Employee whose employment is terminated at or following the Transfer
Time and prior to the expiration of the Continuation Period, with severance and
other separation benefits (including any enhanced retirement benefits and taking
into account for such purpose such Covered Employee’s service and compensation
with Seller and its Affiliates prior to the applicable Transfer Time and any
additional service or compensation with Purchaser and its Affiliates from and
after the applicable Transfer Time) that are no less favorable than those
severance and other separation benefits applicable to such Transferred Employee
under the severance or separation benefit plans, programs, policies, agreements
or arrangements of Seller and its Affiliates as in effect immediately prior to
the applicable Transfer Time and identified in Section 6.09 or 6.11(a) of the
Seller Disclosure Letter or, to the extent not required to be identified in
Section 6.09 or 6.11(a) of the Seller Disclosure Letter, provided to Purchaser
prior to the Initial Closing Date in accordance with Section 12.01(a).

(d) Annual Bonus for Year of Applicable Closing Date. (i) Except as set forth in
Section 12.01(d)(ii) with respect to any Transferred Incentive Plan, as soon as
administratively practicable after the applicable Closing Date and to the extent
that Seller determines that it shall pay bonuses with respect to the calendar
year in which the applicable Closing Date occurs, Seller shall make a prorated
annual bonus payment to each Transferred Employee who is not an Employee on
Disability Leave and who remains employed through the applicable Closing Date,
the amount (if any) of which shall equal the product of the applicable
Transferred Employee’s annual bonus amount (as described in the next sentence)
multiplied by a fraction, the numerator of which is the number of days that
elapse prior to the applicable Closing Date in the calendar year during which
the applicable Closing Date occurs, and the denominator of which is 366. Seller
shall determine the annual bonus amount using any good faith methodology (which
need not be the same for each Transferred Employee), including by basing such
amount upon target bonus or upon actual performance through the applicable
Closing Date. Such prorated bonuses (if any) shall be paid no later than the
date on which Seller pays annual bonuses to similarly situated other employees
of Seller and its Affiliates, but no later than two-and-a-half months after the
end of the calendar year in which the applicable Closing Date occurs. In the
case of any Employee on Disability Leave who becomes a Transferred Employee,
Seller and its Affiliates shall comply with all applicable Laws and any
applicable provision of any applicable plan relating to the payment to such
employee of a prorated annual bonus with respect to the period that precedes the
applicable Closing Date.

(ii) Notwithstanding any provision of the foregoing Section 12.01(d)(i) to the
contrary, in the event that the treatment of any annual incentive plan or
variable pay plan described in Section 12.01(d)(i) is not permitted under
applicable Law or pursuant to the terms of any collective bargaining agreement
identified in Section 6.13 of the Seller Disclosure Letter or in the event that
Seller and Purchaser mutually agree that any other annual incentive or variable
pay plan will not be covered by Section 12.01(d)(i) (each such plan described in
this Section 12.01(d)(ii), a “Transferred Incentive Plan”), then Purchaser or
its

 

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Subsidiaries shall be responsible for the payment of such annual bonus amounts
with respect to Transferred Employees pursuant to such Transferred Incentive
Plan with respect to the full calendar year in which the applicable Closing Date
occurs in accordance with the terms of the applicable Transferred Incentive Plan
and the applicable collective bargaining agreement or applicable Law. Following
the date on which any payments of the annual bonus amounts have been made to
Transferred Employees under a Transferred Incentive Plan, Purchaser shall
provide Seller with an invoice that sets forth the aggregate amount of the
annual bonuses that were paid to the Transferred Employees under such
Transferred Incentive Plan with respect to the year in which the applicable
Closing occurred. Within 30 days following Seller’s receipt of each such
invoice, Seller shall make a cash payment to Purchaser in an amount equal to the
aggregate amount of such annual bonuses multiplied by a fraction, the numerator
of which is the number of days elapsed prior to the applicable Closing Date
during the year in which the applicable Closing Date occurs and the denominator
of which is 366.

(e) Collective Bargaining Agreements. Purchaser or one of its Affiliates shall
assume and agree to be bound by the collective bargaining agreements identified
in Section 6.13 of the Seller Disclosure Letter effective as of 12:01 a.m. on
the applicable Closing Date (including the obligation to honor the terms and
conditions thereof and any obligations thereunder requiring a successor to
recognize a particular labor union as authorized representative or authorized
bargaining agent of an employee group or for any other purpose). As of 12:01
a.m. on the applicable Closing Date, Purchaser and its Affiliates shall be the
“employer” for purposes of each such collective bargaining agreements and
Purchaser and its Affiliates shall, subject to the next succeeding sentence,
have sole responsibility for all obligations, liabilities and commitments
arising under the collective bargaining agreements, and shall indemnify and hold
harmless Seller and its Affiliates with respect to the collective bargaining
agreements. Following 12:01 a.m. on the applicable Closing Date, any employee
benefit that is required pursuant to any collective bargaining agreement to be
provided to any Transferred Employee pursuant to a Seller Benefit Plan (except
as specifically provided in this Article XII, other than in respect to benefits
accrued and vested as of the Closing under any Seller Benefit Plan that is not
an Assumed Benefit Plan) shall instead be provided pursuant to an employee
benefit plan maintained by Purchaser or one of its Affiliates.

(f) Assumption of Assumed Benefit Plans. From and after the applicable Closing
Date, Purchaser shall, or shall cause its Affiliates to, assume and honor the
Assumed Benefit Plans identified in Section 12.01(f) of the Seller Disclosure
Letter or otherwise expressly assumed under this Article XII, as in effect as of
the applicable Closing Date and all obligations, liabilities and commitments
thereunder, regardless of whether such obligations, liabilities or commitments
arise before, on or after the applicable Closing Date. Except as otherwise
specifically provided in this Agreement, each Covered Employee shall, effective
as of the applicable Transfer Time, cease to accrue any additional benefits in
any Seller Benefit Plan that is not an Assumed Benefit Plan. Except as
specifically provided in this Article XII, Seller shall retain all obligations,
liabilities and commitments with respect to Seller Benefit Plans and all other
employment and employee compensation and benefit plans, policies, agreements and

 

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arrangements of Seller and its Subsidiaries (other than any plan, arrangement or
policy of the Business mandated by applicable Law), in each case that are not
Assumed Benefit Plans.

(g) Certain Welfare Benefit Plan Matters. (i) Without limiting the generality of
Section 12.01(f), a Covered Employee shall cease participation in the employee
welfare benefit plans of Seller that are not Assumed Benefit Plans effective as
of the applicable Transfer Time. Without limiting the generality of
Section 12.01(b), no later than the applicable Closing Date, Purchaser shall, or
shall cause its Affiliates to, have in effect welfare benefit plans that provide
an appropriate level (as determined by Purchaser and sufficient to satisfy any
applicable collective bargaining agreement assumed by Purchaser pursuant to this
Agreement) of life insurance, health care, dental care, accidental death and
dismemberment insurance, disability and other group welfare benefits (the
“Purchaser Welfare Plans”) for Transferred Employees (and their eligible
dependents). Purchaser shall, and shall cause its third party insurance
providers to, (A) waive or deem satisfied all limitations as to preexisting
conditions, exclusions and waiting periods and actively-at-work requirements
with respect to participation and coverage requirements applicable to the
Transferred Employees (and their eligible dependents) under the Purchaser
Welfare Plans to the extent waived or satisfied under the applicable
corresponding Seller Benefit Plans immediately prior to the applicable Transfer
Time and (B) provide each Transferred Employee and his or her eligible
dependents with credit under Purchaser Welfare Plans for any co-payments and
deductibles paid under corresponding Seller Benefit Plans prior to the
applicable Transfer Time in the calendar year in which the applicable Transfer
Time occurs for purposes of satisfying any applicable deductible or
out-of-pocket requirements under any Purchaser Welfare Plans in which the
Transferred Employee participates.

(ii) Except as otherwise required under applicable Law and notwithstanding any
other provision of this Agreement to the contrary, Seller shall be responsible,
in accordance with its applicable welfare plans in effect prior to the
applicable Closing Date, for all reimbursement claims (such as medical and
dental claims) for expenses incurred, and for all non-reimbursement claims (such
as life insurance claims) incurred, by a Transferred Employee (or, if
applicable, such Transferred Employee’s eligible dependents) under such plans
prior to such Transferred Employee’s Transfer Time, except that Purchaser shall
be responsible for such claims to the extent (A) such claims are insured under
an insurance policy in respect of which Purchaser or one of its Affiliates
becomes the beneficiary and for which the premium has been paid by Seller and
its Affiliates or (B) such claims relate to an Assumed Benefit Plan. Except as
otherwise required under applicable Law, Purchaser shall be responsible in
accordance with the applicable Purchaser Welfare Plans for all reimbursement
claims (such as medical and dental claims) for expenses incurred, and for all
non-reimbursement claims (such as life insurance claims) incurred by a
Transferred Employee (or, if applicable, such Transferred Employee’s eligible
dependents), from and after such Transferred Employee’s Transfer Time. Except as
otherwise provided under applicable Law, for purposes of this
Section 12.01(g)(ii), a claim shall be deemed to be incurred as follows:
(1) life, accidental death and dismemberment and

 

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business travel accident insurance benefits, upon the death, accident or illness
giving rise to such benefits and (2) health, dental and prescription drug
benefits (including in respect of any hospital confinement), upon provision of
the related services, materials or supplies.

(iii) Seller and its Affiliates shall be responsible for all claims for workers’
compensation benefits that are incurred prior to the applicable Closing Date by
Transferred Employees that are payable under the terms and conditions of
Seller’s workers’ compensation programs (“Workers Comp Claims”), except that
Purchaser and its Affiliates shall be responsible for Workers Comp Claims to the
extent such claims (or a reserve related thereto) are reflected on the relevant
Closing Statement as a Closing Workers Comp Accrual, regardless of whether the
actual amount of such claims is greater or less than the value of the reserve
related thereto that is reflected on the relevant Closing Statement as a Closing
Workers Comp Accrual. Purchaser and its Affiliates shall be responsible for all
claims for workers’ compensation benefits that are incurred from and after the
applicable Closing Date by Transferred Employees, including with respect to
claims by Transferred Employees who became eligible for workers’ compensation
benefits prior to the applicable Closing Date. A claim for workers’ compensation
benefits shall be deemed to be incurred when the event giving rise to the claim
occurs (a “Workers’ Compensation Event”). Subject to the first sentence of this
Section 12.01(g)(iii), if a Workers’ Compensation Event occurs over a period
both preceding and following the applicable Closing Date, the claim shall be the
joint responsibility and liability of Seller and Purchaser and shall be
equitably apportioned between Seller and Purchaser based upon the relative
periods of time that the Workers’ Compensation Event transpired preceding and
following the applicable Closing Date.

(h) Vacation. For purposes of determining the number of vacation days to which
each Transferred Employee shall be entitled during the calendar year in which
the applicable Transfer Time occurs, Purchaser shall, or shall cause its
Affiliates to, honor all vacation days earned but not yet taken by such
Transferred Employee as of the applicable Transfer Time. Without limiting the
generality of the foregoing provision or of Section 12.01(b), following the
applicable Transfer Time and during the Continuation Period, Purchaser and its
Affiliates shall maintain for the benefit of each Transferred Employee a
vacation policy or program that is no less favorable to such Transferred
Employee than the vacation policy or program of Seller or its Affiliates that
was applicable to such Transferred Employee immediately prior to the applicable
Closing Date (taking into account for such purpose such Transferred Employee’s
service with Seller and its Affiliates prior to the applicable Transfer Time and
any additional service with Purchaser and its Affiliates from and after the
applicable Transfer Time).

SECTION 12.02. Special U.S. Provisions. Notwithstanding the provisions of
Section 12.01, references to “Covered Employees” and “Transferred Employees” in
this Section 12.02 shall refer to Covered Employees or Transferred Employees, as
the case may be, who, immediately prior to the applicable Closing Date, are
primarily based in the United States (including Puerto Rico).

 

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(a) Defined Contribution Plans. Without limiting the generality of
Section 12.01(b), effective as of the applicable Closing Date, Purchaser shall,
or shall cause its Affiliates to, have in effect a defined contribution plan
that includes a qualified cash or deferred arrangement within the meaning of
Section 401(k) of the Code (the “Purchaser 401(k) Plan”) providing benefits as
of the applicable Transfer Time to the Transferred Employees participating in
any tax-qualified defined contribution plan sponsored by Seller or any of its
Affiliates (collectively, the “Seller 401(k) Plan”) immediately prior to the
applicable Transfer Time. As soon as practicable following (i) the presentation
to Seller of (A) an Internal Revenue Service letter of determination that the
Purchaser 401(k) Plan meets the requirements for qualification under
Section 401(a) of the Code and (B) a certificate, in form and substance
reasonably satisfactory to Seller, certifying that (1) the aforementioned letter
of determination has not been revoked and (2) to the knowledge of Purchaser, no
event has occurred or is reasonably expected to occur that would cause the
Purchaser 401(k) Plan to cease to satisfy the requirements of Section 401(a) of
the Code or cause the trust forming a part thereof to cease to satisfy the
requirements of Section 501(a) of the Code, (ii) the completion of all blackout
periods for the Seller 401(k) Plan and (iii) the presentation to Seller of
instructions for the transfer of the assets of the Seller 401(k) Plan to the
trustee of the Purchaser 401(k) Plan, Seller shall cause to be transferred to
the Purchaser 401(k) Plan the assets and liabilities from the Seller 401(k) Plan
for the Transferred Employees (excluding those employees who retired effective
on or prior to the date of transfer, except as otherwise elected by said
retiree) in accordance with applicable requirements of the Code. Purchaser shall
administer the accounts of Transferred Employees in the Purchaser 401(k) Plan in
accordance with all applicable requirements of the Code. Such transfer of assets
shall consist of cash, cash equivalents or participant loan receivables equal to
all the accrued benefit liabilities in the Seller 401(k) Plan for the
Transferred Employees and their respective beneficiaries, including accrued
benefit liabilities arising under any applicable qualified domestic relations
order. Purchaser shall direct the trustee of the Purchaser 401(k) Plan to accept
such transfer of assets and liabilities from the Seller 401(k) Plan. Upon such
transfer of assets, the Purchaser 401(k) Plan shall assume the accrued benefit
liabilities under the Seller 401(k) Plan solely with respect to the amount of
the transferred accrued benefits with respect to the Transferred Employees and
Seller shall not have any further accrued benefit liability under the Seller
401(k) Plan with respect to the amount of accrued benefits transferred to the
Purchaser 401(k) Plan for said Transferred Employees and their respective
beneficiaries; provided, however, that Purchaser shall not assume, and Seller
shall retain, all liabilities with respect to the Seller 401(k) Plan other than
such accrued benefit liabilities. In order to implement this Section 12.02(a),
Purchaser and Seller shall cooperate in the exchange of information,
notification to Transferred Employees, and in the preparation of any
documentation required to be filed with any governmental agency. Without
limiting the generality of the foregoing, Seller shall promptly provide
Purchaser with such documents and other information as Purchaser shall
reasonably request to assure itself that the trust-to-trust transfer described
herein may be accepted into the Purchaser 401(k) Plan in accordance with
applicable Law. For the avoidance of doubt, Seller shall 100% vest or cause to
be 100% vested, as of the applicable Closing Date, the accounts under the Seller
401(k) Plan for all Transferred Employees.

 

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(b) Nonqualified Deferred Compensation Plans. Notwithstanding any other
provision of this Agreement to the contrary, Seller shall retain all
liabilities, obligations and commitments with respect to the Covered Employees
under any defined benefit or defined contribution plan that is a nonqualified
deferred compensation plan sponsored, maintained or contributed to by Seller and
its Affiliates as of the applicable Closing Date (a “Nonqualified Deferred
Compensation Plan”). Seller and its Affiliates shall 100% vest or cause to be
100% vested, as of the applicable Closing Date, the benefits under each
Nonqualified Deferred Compensation Plan for each Transferred Employee, but only
to the extent that such Nonqualified Deferred Compensation Plan is a defined
contribution plan. Seller shall make payments to Covered Employees with vested
rights under any Nonqualified Deferred Compensation Plan promptly following the
applicable Transfer Time, unless the timing of such payments must be delayed
under the terms of the applicable Nonqualified Deferred Compensation Plan.
Notwithstanding the foregoing, all payments described in this Section 12.02(b)
shall be made at a time and in a manner that complies with Section 409A of the
Code, to the extent applicable, and all other applicable Laws.

(c) U.S. Transferred Subsidiary DB Plans. Effective as of 12:01 a.m. on the
applicable Closing Date, Purchaser will cause the relevant Transferred
Subsidiary to continue the sponsorship of each Seller Pension Plan set forth in
Section 12.02(c) of the Seller Disclosure Letter that is maintained by a
Transferred Subsidiary as of the Initial Closing Date (each, a “U.S. Transferred
Subsidiary DB Plan”). Prior to the Initial Closing Date, Seller shall establish
a stand-alone trust with respect to the U.S. Transferred Subsidiary DB Plans
(the “U.S. Transferred Subsidiary Pension Trust”) for purposes of holding the
assets of each U.S. Transferred Subsidiary DB Plan and shall transfer the assets
of each U.S. Transferred Subsidiary DB Plan to the U.S. Transferred Subsidiary
Pension Trust in accordance with ERISA. As of the applicable Closing Date, the
assets held by the U.S. Transferred Subsidiary Pension Trust shall consist
solely of cash, cash equivalents and marketable securities in accordance with
the asset allocation methodology specified in Section 12.02(c) of Seller’s
Disclosure Letter.

(d) Other Defined Benefit Plans. Prior to the Initial Closing Date, Seller shall
cause each U.S. tax-qualified or nonqualified defined benefit pension plan
sponsored by the Transferred Subsidiaries that is not a U.S. Transferred
Subsidiary DB Plan to be transferred from the Transferred Subsidiary to the
Seller or one or more of its Subsidiaries other than the Transferred
Subsidiaries and to cause all Transferred Subsidiaries to cease to be a sponsor
of all U.S. tax-qualified defined benefit pension plans and all defined benefit
plans that are Nonqualified Deferred Compensation Plans, other than the U.S.
Transferred Subsidiary DB Plans. Each Transferred Employee who is an active
participant as of the applicable Closing Date in a U.S. tax-qualified or
nonqualified defined benefit pension plan sponsored by Seller or its Affiliates
that is not a U.S. Transferred Subsidiary DB Plan (each, a “U.S. Retained DB
Plan”) shall, as of the applicable Transfer Time, cease accruing benefits under
such U.S. Retained DB Plan, and service with any employer following the
applicable Transfer Time shall not be taken into account for any purpose under
such U.S. Retained DB Plan. Notwithstanding any other provision in this
Agreement to the contrary, following the applicable Transfer Time, Seller or its
Affiliates shall retain, or shall cause the U.S. Retained DB Plans to retain,
all

 

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assets (if any) and liabilities that relate to benefits accrued by Transferred
Employees prior to the applicable Transfer Time under the U.S. Retained DB Plans
and shall make payments to Transferred Employees with vested rights thereunder,
in accordance with the terms of the applicable U.S. Retained DB Plan. Each of
Seller and Purchaser agrees to take the actions described in Section 12.02(d) of
the Seller Disclosure Letter.

(e) Teamsters Pension Plan. (i) Purchaser, Seller and their respective
Affiliates shall take all steps necessary under Section 4204 of ERISA so that
the transactions contemplated by this Agreement will not constitute a partial or
complete withdrawal from the Teamsters Pension Plan. Purchaser and Seller
acknowledge and agree that the sale of the Business constitutes a bona fide,
arm’s length sale of assets between unrelated parties, and the parties intend
that this Agreement be covered by and satisfy all of the requirements of
Section 4204 of ERISA. In accordance with Section 4202 of ERISA, from and after
the applicable Closing Date, Purchaser will be obligated to contribute to the
Teamsters Pension Plan for substantially the same number of contribution base
units for which Seller and its Affiliates had an obligation to contribute
thereto prior to the applicable Closing Date. Purchaser shall, or shall cause
its Affiliates to, make such contributions on a timely basis.

(ii) During the period commencing on the first day of the plan year of the
Teamsters Pension Plan following the applicable Closing Date and ending on the
expiration of the fifth such plan year (the “Contribution Period”), Purchaser
shall, or shall cause its Affiliates to, provide to the Teamsters Pension Plan
either a bond, letter of credit or an escrow in an amount and manner meeting the
requirements of Section 4204(a)(1)(B) of ERISA. Notwithstanding anything
contained herein to the contrary, Purchaser and its Affiliates shall not be
obligated to provide any bond, letter of credit or escrow required herein in the
event and to the extent Purchaser and its Affiliates satisfy the criteria
necessary for a variance under 29 U.S.C. § 4204.12 or 4204.13, or obtain from
the PBGC a proper variance or exemption under Section 4204(c) of ERISA and the
applicable regulations thereunder, provided that any and all requirements of
such variance or exemption are met. Seller agrees to cooperate with Purchaser in
connection with any application for such a variance or exemption made by
Purchaser to the PBGC, and in connection with any attempt by Purchaser to
demonstrate to the Teamsters Pension Plan that the criteria for a variance have
been satisfied.

(iii) If, at any time during the Contribution Period, Purchaser withdraws from
the Teamsters Pension Plan in a complete withdrawal, or a partial withdrawal
with respect to operations covered by the applicable collective bargaining
agreement, Purchaser will be primarily liable to the Teamsters Pension Plan and
Seller will be secondarily liable for any withdrawal liability Seller would have
had to the Teamsters Pension Plan with respect to the operations (but for the
provisions of Section 4204 of ERISA) if the withdrawal liability of Purchaser
with respect to the Teamsters Pension Plan is not paid, it being understood that
any such liability would constitute an Assumed Liability with respect to which
Seller would be entitled to full indemnification from Purchaser. Purchaser
agrees to provide Seller with reasonable advance notice of any action or event
which

 

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could result in the imposition of withdrawal liability contemplated herein, and
in any event Purchaser shall immediately furnish Seller with a copy of any
notice of withdrawal liability it may receive with respect to the Teamsters
Pension Plan, together with all the pertinent details. If any such withdrawal
liability is assessed against Purchaser, Purchaser further agrees to provide
Seller with reasonable advance notice of any intention on the part of Purchaser
not to make full payment of any withdrawal liability when the same becomes due.

(f) U.S. Welfare Benefits Matters. (i) Seller and its Affiliates shall retain
all obligations, liabilities and commitments, if any, of Seller and its
Affiliates to Transferred Employees and their eligible dependents, in respect of
health insurance under the Consolidated Omnibus Budget Reconciliation Act of
1985, the Health Insurance Portability and Accountability Act of 1996,
Sections 601 et seq. and Sections 701 et seq. of ERISA, Section 4980B and
Sections 9801 et seq. of the Code and applicable state or similar applicable
Laws, but only to the extent that such obligations, liabilities and commitments
are as a result of a loss of health care coverage arising from qualifying events
occurring prior to the applicable Transfer Time. Purchaser and its Affiliates
shall be responsible for all such obligations, liabilities and commitments that
are as a result of a loss of health care coverage arising from qualifying events
occurring on or after the applicable Transfer Time.

(ii) Seller agrees to allow each Retiree Welfare Retained Employee to
participate in, and receive benefits from, the post-retirement health, dental
and life insurance plans of Seller and its Affiliates (collectively, the “Seller
Retiree Welfare Plans”) upon such employee’s eligibility to commence benefits in
accordance with the terms of such plans as in effect from time to time.
Notwithstanding any provision of this Agreement to the contrary, (1) nothing
herein shall prohibit Seller from amending, modifying or terminating any Seller
Retiree Welfare Plan or prevent the application of any such amendment,
modification or termination to any Retiree Welfare Retained Employee,
(2) Purchaser shall provide, or cause its Affiliates to provide, the Retiree
Welfare Retained Employees with welfare benefit coverage under Purchaser’s
active employee welfare benefit plans on the same basis as such coverage is
provided to other similarly situated Transferred Employees for so long as such
Retiree Welfare Retained Employees remain actively employed with Purchaser or
any of its Affiliates, (3) if the employment of any Retiree Welfare Retained
Employee is involuntarily terminated, such Retiree Welfare Retained Employee
shall be entitled to post-employment welfare benefit coverage pursuant to
Purchaser’s severance plan that is applicable to such Retiree Welfare Retained
Employee on the same basis as such coverage is provided to other similarly
situated Transferred Employees who have been terminated, and (4) while a Retiree
Welfare Retained Employee remains eligible for coverage under Purchaser’s plans
in accordance with the preceding clauses (2) and (3), such Retiree Welfare
Retained Employee shall not be permitted to receive post-retirement welfare
benefits pursuant to the Seller Retiree Welfare Plans. None of Purchaser, any of
its Affiliates or any benefit plan or arrangement maintained by Purchaser or its
Affiliates will have

 

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any liabilities or obligations to provide post-retirement welfare benefits to
Covered Employees who retire prior to the applicable Closing Date.

(g) WARN. Purchaser shall assume liability for, and shall fully indemnify and
hold harmless Seller and its Affiliates with respect to, any liabilities
incurred by Seller and its Affiliates pursuant to the Worker Adjustment and
Retraining Notification Act, as amended, and any similar statute in connection
with any Covered Employee, to the extent such liability arises from actions of
Purchaser or its Affiliates.

(h) Employment Tax Reporting Responsibility. Purchaser and Seller hereby agree
to follow the alternate procedure for United States employment tax withholding
as provided in Section 5 of Rev. Proc. 2004-53, I.R.B. 2004-35. Accordingly,
Seller shall have no United States employment tax reporting responsibilities,
and Purchaser shall have full United States employment tax reporting
responsibilities, for Transferred Employees following the close of business on
the applicable Closing Date.

SECTION 12.03. Special Non-U.S. Provisions. Notwithstanding the provisions of
Section 12.01, references to “Transferred Employees” in this Section 12.03 shall
refer to Transferred Employees who, immediately prior to the applicable Closing
Date, are primarily based outside the United States.

(a) Continuation of Compensation and Benefits. Notwithstanding Section 12.01 or
any other provision of this Agreement, in the event that the applicable Laws of
any country or any applicable works council agreement or collective bargaining
agreement require Purchaser or its Affiliates (i) to maintain the same Terms and
Conditions of Employment (as defined below) that relate to any Transferred
Employee following the applicable Transfer Time or (ii) to continue or cause to
be continued any employment contract of any Transferred Employee, in the case of
clauses (i) and (ii), Purchaser shall maintain, or cause to be maintained, the
same Terms and Conditions of Employment that relate to such Transferred Employee
or shall continue, or cause to be continued, such Transferred Employee’s
employment contract for the period required under applicable Law. “Terms and
Conditions of Employment” shall mean the rights of Transferred Employees
according to their individual terms and conditions of employment with Seller and
its Affiliates immediately prior to the applicable Transfer Time and, where
applicable, under collective agreements, including any collective bargaining,
company or shop agreements and any arrangements based on works customs and
unilateral undertakings, if and to the extent they provide to a Transferred
Employee direct and enforceable causes of action against the employer.

(b) Assumed Foreign Pension Plans. Effective as of 12:01 a.m. on the applicable
Closing Date, Purchaser or one of its Affiliates shall assume sponsorship of, or
Purchaser shall cause the relevant Transferred Subsidiary to continue the
sponsorship of, as applicable, the Assumed Pension Plans set forth in
Section 12.03(b) of the Seller Disclosure Letter and each other Seller Pension
Plan that is sponsored by a Transferred Subsidiary (each, an “Assumed Foreign
Pension Plan”), and Seller shall assign or cause to be assigned to Purchaser or
one of its Affiliates each stand-alone trust or other funding

 

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arrangement (and all related assets) that does not transfer to Purchaser or its
Affiliates automatically under applicable Law (including as a result of the
acquisition by Purchaser of all the outstanding capital stock and other equity
interests of a Transferred Subsidiary) with respect to an Assumed Foreign
Pension Plan.

(c) Assumption of Canadian Plan Assets Invested in Master Trust. The parties
acknowledge that the assets of the Canadian Transferred Pension Plans are
invested in a master trust fund maintained by Seller (the “Canadian Master Trust
Fund”). Prior to the Closing Date, Seller shall cause the interests held in the
Canadian Master Trust Fund which are referable to the Canadian Transferred
Pension Plans to be redeemed by the participating trust funds maintained for the
Canadian Transferred Pension Plans in cash or, with the consent of both Seller
and Purchaser, in specie, calculated in accordance with the usual rules for
determining redemption values applicable to other pension plans administered by
Seller and which are invested in the Canadian Master Trust Fund in effect and in
existence at the time of the redemption. As of the applicable Closing Date, the
assets held by the Canadian Pension Trusts shall consist solely of cash, cash
equivalents and marketable securities in accordance with the asset allocation
methodology specified in Section 12.03(c) of the Seller Disclosure Letter.
Forthwith after the applicable Closing Date, Seller shall provide to the
Purchaser such books, records and other pertinent data and information as
Purchaser may reasonably require to operate and administer the Canadian
Transferred Pension Plans and to review the determination of unit values under
the Canadian Master Trust Fund.

SECTION 12.04. Assumed Pension Plans. (a) Seller shall deliver to Purchaser a
statement setting forth the Estimated Accrued German Pension Liability on or
prior to the date that the applicable Closing Statement is delivered by Seller
to Purchaser in accordance with Section 4.03(a).

(b) The Actual Accrued Pension Liability in respect of each Assumed Pension Plan
shall be determined by a qualified actuary designated by Seller (the “Seller
Actuary”) and shall be delivered to Purchaser, together with the information set
forth on Section 12.04(b) of the Seller Disclosure Letter (such calculation and
information, the “Pension Calculation Information”), not later than 90 days
following the applicable Closing Date. Purchaser shall have the right to appoint
an independent actuary (the “Purchaser Actuary”) for the purpose of verifying
the calculation of the Actual Accrued Pension Liability in respect of such
Assumed Pension Plan. Within 15 days following receipt of the Pension
Calculation Information, the Purchaser Actuary shall notify the Seller Actuary
in writing if any portion of the Pension Calculation Information is missing. If
Seller Actuary does not receive such written notice from the Purchaser Actuary
during such period, then the Purchaser Actuary shall be deemed to have received
all Pension Calculation Information on the date that the Pension Calculation
Information was delivered to Purchaser. The Seller Actuary shall promptly (and
in any event within 15 days following the date of a request) deliver to the
Purchaser Actuary such additional supporting documents and information as the
Purchaser Actuary may reasonably request. Within the later of (i) 60 days
following receipt by the Purchaser Actuary of all Pension Calculation
Information, and (ii) 15 days after receipt of all additional supporting
documents requested within 30 days after the receipt of all Pension Calculation

 

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Information, Purchaser shall notify Seller in writing if the Purchaser Actuary
disagrees with the determination of the Seller Actuary. If any such disagreement
is not resolved to the satisfaction of Seller and Purchaser within 30 days of
Seller’s receipt of such written notification from Purchaser (or within such
longer period as Seller and Purchaser shall mutually agree), a Corporate Vice
President (or higher level officer) of each party shall endeavor to resolve the
dispute during the 30-day period that follows the end of such 30-day (or longer)
period. Except as otherwise set forth in this Section 12.04(b), if such dispute
remains unresolved at the end of such 30-day period, either Seller or Purchaser
may elect to have the calculation submitted for arbitration by a third
independent actuary mutually acceptable to Seller and Purchaser, who shall be
entitled to the privileges and immunities of an arbitrator, and whose
determination shall be conclusive, final and binding and have the force and
effect of an arbitral award. The fees and expenses of such third independent
actuary will be shared equally by Purchaser and Seller. Notwithstanding any of
the foregoing provisions relating to arbitration of disputes, in the event that,
after the Actual Accrued Pension Liability calculations with respect to all
Assumed Pension Plans in any country have been delivered by the Seller Actuary
to the Purchaser Actuary, the aggregate amount in controversy is less than 5% of
the aggregate Actual Accrued Pension Liability with respect to all such Assumed
Pension Plans, then any dispute that remains unresolved following the last
30-day period referenced in this Section 12.04(b) shall not be submitted to
arbitration and instead, the parties shall be deemed to have agreed to settle
the dispute for an amount equal to one-half of the amount in controversy.

(c) In the event that the Actual Pension Amount in respect of an Assumed Pension
Plan is a negative number, Seller shall make a cash payment to Purchaser in an
amount equal to the absolute value of such Actual Pension Amount. In the event
that the Actual Pension Amount in respect of an Assumed Pension Plan is a
positive number, Purchaser shall make a cash payment to Seller in an amount
equal to such Actual Pension Amount. In each case, the payment shall be made
within 30 days following the final date on which the determination with respect
to the Actual Accrued Pension Liability with respect to such Assumed Pension
Plan is made in accordance with Section 12.04(b), and the party entitled to
receive the payment with respect to such Actual Pension Amount shall also be
entitled to interest on such amount in respect of the applicable Pension
Interest Period at a rate equal to the rate of interest used to determine the
Accrued Pension Liability with respect to such Assumed Pension Plan. In the case
of any Assumed Pension Plan the assets of which are held by a trust or other
funding vehicle, in the event that the Actual Pension Amount with respect to
such Assumed Pension Plan is a negative number, Purchaser shall be required to
contribute the absolute value of such Actual Pension Amount plus the interest
received with respect thereto to the trust or other funding vehicle with respect
to such Assumed Pension Plan at the earliest time(s) as may be so contributed
without disallowance of any otherwise available tax deduction or credit or other
tax asset; provided, however, that the portion of the absolute value of the
negative Actual Pension Amount and interest relating thereto that Purchaser
shall be required to contribute to such trust or other funding vehicle shall be
reduced by the amount (if any) that Purchaser contributes to the applicable
trust or other funding vehicle in respect of the Accrued Pension Liability prior
to the date on which payment with

 

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respect to the Actual Pension Amount is made by Seller in accordance with this
Section 12.04(c).

(d) On and after the applicable Closing Date, Seller and its Subsidiaries shall
have no further obligation to provide any participant in an Assumed Pension Plan
with benefits with respect to such Assumed Pension Plan. Without limiting the
generality of Section 12.01(b), during the Continuation Period, Purchaser shall
maintain, or shall cause its Affiliates to maintain, each Assumed Pension Plan
on terms (including, but not limited to, benefit accrual formulas and
eligibility for retirement and early retirement subsidies) at least as favorable
with respect to each Transferred Employee who participated in such Assumed
Pension Plan immediately prior to the applicable Transfer Time as those in
effect with respect to such Transferred Employee as of the applicable Transfer
Time. In all events in which a transfer of the assets from a trust or other
funding arrangement with respect to a Seller Benefit Plan is made under this
Section 12.04 to a trust or other funding arrangement with respect to an Assumed
Pension Plan, (i) Purchaser shall not cause a reversion of such assets for a
period of three years following the applicable Closing Date or, if longer, the
period during which such reversion is prohibited under applicable Law and
(ii) Purchaser shall not take any action to reduce any vested benefits that
accrued prior to the applicable Closing Date under any Assumed Pension Plan.

(e) Seller and its Affiliates shall be responsible for satisfying any and all
governmental reporting and disclosure requirements applicable to each Assumed
Pension Plan with respect to plan years ending prior to the applicable Closing
Date and Purchaser and its Affiliates shall be responsible for satisfying any
and all governmental reporting and disclosure requirements with respect to plan
years ending on or after the applicable Closing Date.

SECTION 12.05. Administration. (a) Following the date of this Agreement, Seller
and Purchaser shall reasonably cooperate in all matters reasonably necessary to
effect the transactions contemplated by this Article XII, including exchanging
information and data relating to workers’ compensation, employee benefits and
employee benefit plan coverages (except to the extent prohibited by applicable
Law), and in obtaining any governmental approvals or the approval of unions,
staff associations or any other body representing employees that is recognized
by Seller and its Affiliates, in each case to the extent required hereunder.

(b) From and after the date hereof and prior to the applicable Closing Date,
Seller shall provide Purchaser with reasonable access to Covered Employees
(including permitting Purchaser to meet with or make presentations to Covered
Employees in groups) for purposes of communicating with such Covered Employees
regarding compensation and benefits to be provided by Purchaser and its
Affiliates to such Covered Employees (and their eligible dependents and
beneficiaries) from and after the applicable Closing, and permitting Transferred
Employees to enroll in post-Closing benefit plans; provided that (i) Purchaser
shall provide to Seller a reasonable opportunity to review and comment upon all
written communications to Covered Employees during such pre-Closing period,
(ii) Seller shall be permitted to be present for each meeting

 

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between Purchaser and any Covered Employee that occurs prior to the applicable
Closing Date, (iii) Purchaser shall provide Seller with reasonable notice in
advance of any such meeting and (iv) such access shall occur at times that are
reasonably acceptable to Seller. Seller shall, if so requested by Purchaser,
encourage Covered Employees to attend any such meetings.

ARTICLE XIII

Indemnification

SECTION 13.01. Tax Indemnification. (a) From and after the applicable Closing,
Seller shall indemnify Purchaser and its Affiliates (including the Transferred
Subsidiaries) against and hold them harmless from any Loss to the extent
attributable to:

(i) any Taxes imposed on or with respect to any Transferred Subsidiary (or for
which any Transferred Subsidiary is otherwise liable), as the case may be, with
respect to any Pre-Closing Date Tax Period (including, for the avoidance of
doubt, any interest, penalty or addition to Tax accruing after the Closing Date
on any Taxes for which Seller is liable under this Section 13.01(a)(i)),
including any such liability arising under principles of transferee or successor
liability,

(ii) Taxes, including Taxes arising under the provisions of Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign Law),
arising by virtue of any Transferred Subsidiary, on or prior to the applicable
Closing Date, having been a member of a consolidated, affiliated, combined or
unitary group that had a common parent of Alcoa, Inc. or any Affiliate thereof
(other than a Transferred Subsidiary),

(iii) Income Taxes arising from any Transferred Subsidiary including any income
or gain in any Post-Closing Date Tax Period under Section 453 of the Code (or
any similar provision of state, local or foreign Law) in respect of any
transaction occurring prior to the applicable Closing,

(iv) Taxes arising from or attributable to any Post-Signing Restructuring Action
other than (A) any such Taxes for a Post-Closing Date Tax Period arising from or
attributable to Purchaser or any of its Affiliates (including any Transferred
Subsidiary) having a lower Tax basis in any Acquired Asset or in the stock of
any Transferred Subsidiary than would otherwise have existed if no Post-Signing
Restructuring Actions had been undertaken, (B) any such Taxes for a Post-Closing
Date Tax Period that would not have arisen but for any action taken by the
Purchaser or any of its Affiliates (including any Transferred Subsidiary) other
than in the ordinary course of business (and, for the avoidance of doubt, any
restructuring conducted by Purchaser or any of its Affiliates (including any
Transferred Subsidiary) after the applicable Closing shall not be in the
ordinary course) and (C) any such Taxes for a taxable period (or portion
thereof) beginning after December 31, 2008,

 

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(v) withholding Taxes imposed on the payment of any consideration (including
through the assumption of debt or any amount treated as an adjustment to the
Worldwide Purchase Price for Tax purposes) by Purchaser or any of its Affiliates
to Seller or any of its Affiliates pursuant to this Agreement or any other
Transaction Agreement which Purchaser failed to withhold or any other Taxes
arising from the transactions contemplated by Section 7.12, 10.05 or 10.06 of
this Agreement,

(vi) Taxes arising from any adjustment under Section 481 of the Code (or any
similar provision of state, local or foreign Law) arising from the manner in
which any item was reported for a taxable period (or portion thereof) ending on
or prior to the applicable Closing,

(vii) Taxes of any Selling Company (other than non-Income Taxes with respect to
any Acquired Asset for a Post-Closing Date Tax Period) or with respect to any
Acquired Asset for a Pre-Closing Date Tax Period,

(viii) Taxes arising as a result of any inclusion under Section 951(a) of the
Code (or any similar or corresponding provision of state or local Tax law) with
respect to any Transferred Subsidiary attributable to (A) “subpart F income,”
within the meaning of Section 952 of the Code (or any similar or corresponding
provision of state or local Tax law), received or accrued on or prior to the
applicable Closing Date or (B) the holding of “United States property,” within
the meaning of Section 956 of the Code (or similar or corresponding provision of
state or local Tax Law), on or prior to the applicable Closing Date, computed,
in each case, based on the amount of such Taxes that would be payable with
respect to any Transferred Subsidiary if the relevant Tax period ended on the
applicable Closing Date,

(ix) Taxes resulting from a breach of any Tax-related covenants contained in
this Agreement (including, for the avoidance of doubt, the covenants contained
in Section 7.03) by Seller or any Affiliate of Seller (other than any
Transferred Subsidiary), or, prior to the applicable Closing, by any Transferred
Subsidiary,

(x) incremental U.S. Taxes arising from any Acquired Asset of the U.S. Country
Unit having a “carryover” Tax basis due to the application of Treasury
Regulation § 1.338-8(f) (but only if and to the extent the application of such
Treasury Regulation § 1.338-8(f) attributable to any action occurring before the
applicable Closing),

(xi) any obligation to indemnify or hold harmless any Person (other than a
Transferred Subsidiary) for Taxes (A) pursuant to any M&A Contract to which any
Transferred Subsidiary was a party on or prior to the applicable Closing Date or
(B) pursuant to any M&A Contract assumed or assigned to Purchaser or any of its
Affiliates under this Agreement or under any other Transaction Agreement, and

 

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(xii) Taxes arising from the purchase and sale hereunder of a 5% interest in
Grupo Alcoa, S. de R.L. de C.V. and any Taxes arising from the Mexican 338
Elections.

Purchaser and Seller agree that the amount of Seller’s and its Affiliates’
obligations under this Section 13.01(a) shall (i) not be reduced as a result of
any net operating loss, net capital loss or other Tax credit or benefit of any
Transferred Subsidiary that is attributable to, arises from or relates to any
Post-Closing Date Tax Period and (ii) be reduced as a result of any net
operating loss, net capital loss or other Tax credit or benefit of any
Transferred Subsidiary that is attributable to, arises from or relates to any
Pre-Closing Date Tax Period (but only if and to the extent that any such Tax
benefit actually reduces any Tax for which Seller is otherwise responsible under
this Section 13.01(a)).

Notwithstanding anything contained in this Section 13.01, Seller shall not be
liable under this Section 13.01 for any liability to the extent attributable to
or resulting from (i) Taxes covered by Section 14.05 or (ii) a breach by
Purchaser or an Affiliate of Purchaser (other than the Transferred
Subsidiaries), or, after the applicable Closing, by any of the Transferred
Subsidiaries, of any Tax-related covenant contained in this Agreement. Purchaser
and Seller further agree with respect to this Section 13.01(a) that Seller shall
not indemnify Purchaser and its Affiliates (including the Transferred
Subsidiaries) against and hold them harmless against any Loss attributable to
U.S. federal, state, local and foreign payroll Taxes to the extent of the actual
dollar amount of such Taxes included in Working Capital.

(b) From and after the applicable Closing, Purchaser shall cause the Transferred
Subsidiaries to indemnify Seller and its Affiliates against and hold them
harmless from any Loss to the extent attributable to (i) any Taxes imposed on or
with respect to the Transferred Subsidiaries (or for which any Transferred
Subsidiary is otherwise liable) for any Post-Closing Date Tax Period, (ii) any
Taxes resulting from a breach of any Tax-related covenant contained in this
Agreement by Purchaser or any Affiliate of Purchaser (other than the Transferred
Subsidiaries) or, after the applicable Closing, by any Transferred Subsidiary
and (iii) any Taxes relating solely to the Acquired Assets for any Post-Closing
Date Tax Periods.

Notwithstanding anything contained in this Section 13.01, Purchaser shall not be
liable under this Section 13.01 for any liability to the extent attributable to
(i) Taxes covered by Section 14.05, (ii) Losses for which indemnity is required
under Section 13.01(a) or 13.02, (iii) any Taxes for which a gross-up payment is
required by Seller under Section 13.04(ii) (or which are otherwise taken into
account under Section 13.04), or (iv) a breach by Seller or any Affiliate of
Seller (other than a Transferred Subsidiary), or, prior to the applicable
Closing, any Transferred Subsidiary, or any covenant contained in Section 14.02.

(c) In the case of any Taxes that are payable for a Straddle Tax Period, to the
extent permitted by law or administrative practice, the taxable year of a
Transferred Subsidiary that includes the applicable Closing Date shall be
treated as closing on (and

 

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including) such Closing Date, so long as doing so does not have any material
adverse impact on such Transferred Subsidiary. In the case of any Tax that is
payable for a Straddle Tax Period that is not treated under the preceding
sentence as closing on the applicable Closing Date, the portions of such Tax
that relate to the Pre-Closing Date Tax Period shall be deemed to be:

(i) in the case of any property Tax, the amount of such Tax for the Straddle Tax
Period multiplied by a fraction the numerator of which is the number of days in
the Straddle Tax Period on or prior to the applicable Closing Date, and the
denominator of which is the number of all days in the entire Straddle Tax
Period; and

(ii) in the case of any Tax (other than any property Tax), the amount that would
be payable if the relevant Tax period ended on the applicable Closing Date.

For the avoidance of doubt, for purposes of Section 13.01(c)(ii), in the case of
any Income Tax attributable to the ownership of an entity that is taxed as a
partnership or of any other entity that is treated as a “flow-through” entity
for Tax purposes (excluding a “controlled foreign corporation” within the
meaning of Section 957(a) of the Code), the portion of such Income Tax that
relates to the Pre-Closing Date Tax Period shall be deemed to be the amount that
would be payable if the relevant Tax period of such “flow-through” entity ended
on the applicable Closing Date.

SECTION 13.02. Other Indemnification by Seller. From and after the Initial
Closing, Seller shall, or shall cause the relevant Selling Companies to,
indemnify Purchaser and its Affiliates against and hold them harmless from any
Loss (other than any relating to the matters covered by the indemnification
provisions set forth in Section 13.01) to the extent arising from (i) subject to
Section 15.01, any breach of any representation or warranty of any Selling
Company contained in this Agreement, it being understood that (x) such
representations and warranties shall be interpreted (other than Sections 6.02,
6.04, 6.08, 6.10(b), 6.11(a), 6.15(a), 6.16(a), 6.17(a), 6.18, 6.19 and 6.20,
the first sentence of Section 6.05, the final sentence of Section 6.13, clause
(i)(B) of Section 6.14 and the definition of Material Contracts in Section 6.09)
without giving effect to any limitations or qualifications of “materiality”
(including the word “material”) or Business Material Adverse Effect set forth
therein and (y) Purchaser and its Affiliates shall be deemed to not have
incurred a Loss in connection with any such breach so long as and to the extent
that the existence of such Loss was reflected in (A) the unaudited balance sheet
of the “Closure Systems International” division as of June 30, 2007 or the
combined unaudited balance sheet of the “Consumer Products”, “Flexible
Packaging” and “Reynolds Food Packaging” divisions as of June 30, 2007 (each of
which is a part of the Financial Statements) or (B) the finally determined
Closing Statements; (ii)(A) any breach of any covenant of any Selling Company
requiring performance prior to the Initial Closing or (B) any breach of any
covenant of any Selling Company contained in this Agreement requiring
performance after the Initial Closing; or (iii) any of the Excluded Liabilities;
provided, however, that (w) the Selling Companies shall not be required to
indemnify or hold harmless any person, and shall not have any liability, under
clause (i) above (A) unless the aggregate of all Losses relating thereto for
which the Selling

 

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Companies would, but for this proviso, be liable exceeds on a cumulative basis
an amount equal to 1.5% of the Worldwide Purchase Price (the “Basket”), and then
only to the extent of any such excess, (B) for any individual items where the
Loss relating thereto is less than the Indemnification Minimum Claim Amount (and
such items shall not be aggregated for purposes of clause (A) above) and (C) for
any Loss in excess of 20% of the Worldwide Purchase Price (the “Cap”), (x) the
foregoing limitations provided in clause (w) shall not apply to any Losses
related to any breach of any representation or warranty contained in
Section 6.03(a), Section 6.08(a), Section 6.09(b), Section 6.15(c),
Section 6.16(b), 6.16(f) or Section 6.18(a), provided that the Selling Companies
shall not be required to indemnify or hold harmless any person, and shall not
have any liability, under such Sections unless the aggregate of all Losses
relating thereto for which the Selling Companies would, but for this proviso, be
liable exceeds on a cumulative basis the Deductible, and then only to the extent
of any such excess, (y) the Selling Companies shall not be required to indemnify
or hold harmless Purchaser or its Affiliates, and shall not have any liability
to Purchaser or its Affiliates, with respect to matters arising under
Environmental Laws to the extent (A) such liability arises out of any invasive
investigation of environmental conditions (including drilling or sampling)
undertaken by or on behalf of Purchaser other than as required by Environmental
Laws or by a Governmental Entity or as reasonably required in connection with a
third party claim or to respond to an emergency or (B) Purchaser or its
Affiliates perform a remediation of environmental conditions otherwise
indemnifiable under this Section 13.02 in excess of industrial cleanup standards
or other applicable minimum standards, including, where applicable, standards
based upon environmental land use restrictions and engineering controls (so long
as such restrictions and controls do not unreasonably interfere with operations
being conducted and are acceptable to the Governmental Entity overseeing the
resolution of any environmental issue), or incurs costs in excess of those
reasonably necessary to bring a condition into compliance with Environmental
Laws or to satisfy the requirements of a Governmental Entity, and (z) the total
amount in respect of which Seller and the Selling Companies shall be liable
under this Agreement to indemnify Purchaser and its Affiliates shall not exceed
the Worldwide Purchase Price. For the avoidance of doubt, any indemnification
payment made by Purchaser to Seller and its Affiliates hereunder shall not be
deemed a Loss for which Seller or any other Selling Company must indemnify
Purchaser or its Affiliates.

SECTION 13.03. Other Indemnification by Purchaser. From and after the Initial
Closing, Purchaser shall indemnify Seller and its Affiliates (and, with respect
to clause (v) of this Section 13.03, their respective directors, officers,
employees and representatives) against and hold them harmless from any Loss
(other than any such Loss relating to the matters covered by the indemnification
provisions set forth in Section 13.01) to the extent arising from (i) subject to
Section 15.01, any breach of any representation or warranty of Purchaser or any
of its Affiliates contained in this Agreement, (ii) any breach of any covenant
of Purchaser or any of its Affiliates contained in this Agreement (including any
failure to offer employment to, or continue the employment of, a Covered
Employee in accordance with Section 12.01(a)), (iii) any of the Assumed
Liabilities, (iv) the amendment, suspension or discontinuance of any Assumed
Benefit Plan after the applicable Closing Date, (v) a Third Party Claim against
Seller or any of its Affiliates or any of their respective directors, officers,
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representatives in connection with the arrangement of the Debt Financing or any
information utilized in connection therewith, (vi) any breach of any sublease
entered into between Seller or its Subsidiaries and Purchaser with respect to
any Leased Property or (vii) Seller’s payment of Purchaser’s obligations in
respect of any Leased Property; provided, however, that (i) the total amount in
respect of which Purchaser and its Affiliates shall be liable under this
Agreement to indemnify Seller and its Affiliates shall not exceed the Worldwide
Purchase Price and (ii) for the avoidance of doubt, any indemnification payment
made by Seller or the relevant Selling Company to Purchaser and its Affiliates
hereunder shall not be deemed a Loss for which Purchaser or its Affiliates must
indemnify Seller or its Affiliates. Notwithstanding anything in this Agreement
to the contrary, Seller and its Affiliates shall be exculpated from, and shall
have no obligation under Section 13.02 in respect of, any Loss of Purchaser or
any of its Affiliates to the extent arising from any Third Party Claim against
Purchaser or any of its Affiliates related to or arising from Seller’s or its
Affiliates’ cooperation with, or provision of information to, Purchaser or
Purchaser’s Affiliates in connection with the Debt Financing or any refinancing
thereof.

SECTION 13.04. Losses Net of Insurance, etc. The amount of any, Loss for which
indemnification is provided under this Article XIII shall be (i) net of any
amounts actually recovered or recoverable by the indemnified party under
insurance policies with respect to such Loss, (ii) increased by any Tax cost
(other than by reason of a loss of Tax basis) incurred by the indemnified party
as a result of the receipt of the respective indemnity payment (as increased
pursuant to this Section 13.04(ii)), and (iii) reduced to take account of any
net Tax Benefit realized by the indemnified party arising from the incurrence or
payment of any such Loss, which shall be computed by taking into account any
loss of Tax basis resulting from the receipt of the related indemnification
payments. In computing the amount of any such Tax Benefit, the indemnified party
shall be deemed to recognize all other items of income, gain, loss, deduction or
credit before recognizing any item arising from the receipt of any indemnity
payment hereunder or the incurrence or payment of any indemnified loss,
liability, cost or expense. The adjustments under this Section 13.04 shall be
taken into account in determining whether the Cap and Basket have been met.

SECTION 13.05. Termination of Indemnification. The obligations to indemnify and
hold harmless any party (i) pursuant to Section 13.01, shall terminate 60 days
after expiration of the applicable statute of limitations with respect to the
Tax liabilities in question (giving effect to any waiver or extension thereof),
(ii) pursuant to clause (i) of each of Sections 13.02 and 13.03, shall terminate
when the applicable representation or warranty terminates pursuant to
Section 15.01, (iii) pursuant to clause (ii)(A) of Section 13.02, shall
terminate on the first anniversary of the Initial Closing Date, and
(iv) pursuant to the other clauses of Sections 13.02 and 13.03, shall not
terminate; provided, however, that such obligations to indemnify and hold
harmless shall not terminate with respect to any item as to which the person to
be indemnified shall have, before the expiration of the applicable period,
previously made a specific claim by delivering to the party claimed to be
providing the indemnification a notice of such claim pursuant to Section 13.06
or 13.07, as the case may be, stating in reasonable detail the basis of such
claim.

 

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SECTION 13.06. Procedures Relating to Indemnification (Other Than Tax Claims).
(a) In order for a person (the “indemnified party”) to be entitled to any
indemnification pursuant to this Article XIII (other than under Section 13.01)
in respect of, arising out of or involving a claim or demand made by any person
against the indemnified party (a “Third Party Claim”), such indemnified party
must notify the indemnifying party in writing of (and in reasonable detail
regarding) the Third Party Claim promptly, and in any event within 30 Business
Days, after receipt by such indemnified party of notice of the Third Party
Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided under this Agreement except to the extent
the indemnifying party shall have been actually prejudiced as a result of such
failure. Thereafter, the indemnified party shall deliver to the indemnifying
party promptly, and in any event within 10 Business Days, after the indemnified
party’s receipt thereof, copies of all notices and documents (including court
papers) received by the indemnified party relating to the Third Party Claim
(other than internal notices and documents or documents and notices between the
indemnified party and its legal counsel).

(b) If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume and control the defense thereof with counsel
selected by the indemnifying party reasonably acceptable to the indemnified
party. Should the indemnifying party so elect to assume the defense of a Third
Party Claim, the indemnifying party shall not be liable to the indemnified party
for legal expenses subsequently incurred by the indemnified party in connection
with the defense thereof. If the indemnifying party assumes such defense, the
indemnified party shall have the right to participate in the defense thereof and
to employ at its own expense counsel not reasonably objected to by the
indemnifying party separate from the counsel employed by the indemnifying party,
it being understood that the indemnifying party shall control such defense and
shall be empowered to make any settlement with respect to such Third Party
Claim, subject to the remaining terms of this Section 13.06(b). The indemnifying
party shall be liable for the reasonable fees and expenses of counsel employed
by the indemnified party for any period during which the indemnifying party has
not assumed the defense thereof (other than the period prior to the day on which
the indemnified party gives notice of the Third Party Claim as provided above).
If the indemnifying party chooses to defend or prosecute any Third Party Claim,
all the parties hereto shall cooperate and shall cause their Affiliates to
cooperate in the defense or prosecution thereof. Such cooperation shall include
the retention and (upon the indemnifying party’s request) the provision to the
indemnifying party of records and information that are reasonably relevant to
such Third Party Claim, and making employees available on any basis reasonably
requested by the indemnifying party to provide additional information and
explanation of any material provided hereunder or otherwise relating to the
Third Party Claim, in each case subject to reimbursement of reasonable
out-of-pocket expenses incurred in connection therewith. Whether or not the
indemnifying party assumes the defense of a Third Party Claim, the indemnified
party shall not admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the indemnifying party’s prior written
consent (which consent shall not be unreasonably withheld). If the indemnifying
party assumes the defense of a Third Party Claim, the

 

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indemnified party shall agree to any settlement, compromise or discharge of such
Third Party Claim that the indemnifying party may recommend and that by its
terms (or pursuant to a binding commitment of the indemnifying party) obligates
the indemnifying party to pay the full amount of the liability in connection
with such Third Party Claim, in each case without admission of liability of the
indemnified party or the grant of any relief other than money damages.
Notwithstanding the foregoing, the indemnifying party shall not be entitled to
assume the defense of any Third Party Claim (and shall be liable for the
reasonable fees and expenses of counsel incurred by the indemnified party in
defending such Third Party Claim) if the Third Party Claim seeks an order,
injunction or other equitable relief or relief for other than money damages
against the indemnified party that the indemnified party reasonably determines,
after conferring with its outside counsel, cannot reasonably be separated from
any related claim for money damages. If such equitable relief or other relief
portion of the Third Party Claim can be so separated from that for money
damages, the indemnifying party shall be entitled to assume the defense of the
portion relating to money damages.

(c) In the event any indemnified party should have an indemnification claim
against any indemnifying party under the Transaction Agreements that does not
involve a Third Party Claim being asserted against or sought to be collected
from such indemnified party, the indemnified party shall deliver notice of such
claim to the indemnifying party with reasonable promptness after an officer of
the indemnified party has actual knowledge of the facts giving rise to such
claim. The failure by any indemnified party to so notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may have to
such indemnified party, except to the extent that the indemnifying party has
been actually prejudiced by such failure. Without limiting the right of an
indemnified party to seek immediate equitable relief, if the indemnifying party
disputes its liability with respect to such claim, the indemnifying party and
the indemnified party shall proceed in good faith to negotiate a resolution of
such dispute and, if not resolved through negotiations within 30 days, such
dispute shall be resolved by litigation in an appropriate court of competent
jurisdiction.

(d) Seller and Purchaser shall cooperate with each other with respect to
resolving any claim or liability with respect to which either such party is
obligated to indemnify such other party hereunder or an Affiliate thereof,
including by making commercially reasonable efforts to mitigate or resolve any
such claim or liability. In the event that Seller or Purchaser shall fail to
make such commercially reasonable efforts to mitigate or resolve any claim or
liability, then, notwithstanding anything else to the contrary contained herein,
the other party shall not be required to indemnify any person to the extent of
any loss, liability, claim, damage or expense that could reasonably be expected
to have been avoided if Purchaser or Seller, as the case may be, had made such
efforts.

(e) Notwithstanding anything herein to the contrary, with respect to any
litigation, demand or claim that is an Excluded Liability listed in
Section 2.02(c)(iii) of the Seller Disclosure Letter, Seller shall have sole
control of the defense of such litigation, demand or claim and Purchaser shall
not be entitled to participate in such defense.

 

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(f) Tax Claims shall be governed by Section 13.07 and not by this Section 13.06.

SECTION 13.07. Procedures Relating to Indemnification of Tax Claims. (a) Each
party entitled to an indemnity payment pursuant to Section 13.01 (a “Tax
Indemnified Party”) agrees to give written notice to the indemnifying party (the
“Tax Indemnitor”) of the receipt of any written notice by the Tax Indemnified
Party or an Affiliate of such Tax Indemnified Party (including, in the case
where Purchaser is the Tax Indemnified Party, any Transferred Subsidiary) which
involves the assertion of any claim, or the commencement of any audit, suit,
action or proceeding (collectively, a “Tax Claim”) in respect of which indemnity
may be sought (an “Indemnifiable Tax”) within 30 Business Days of such receipt
or such earlier time as would allow the Tax Indemnitor to timely respond to such
Tax Claim; provided, however, that failure to give such notification shall not
affect the indemnification provided under this Agreement except to the extent
the Tax Indemnitor shall have been actually prejudiced as a result of such
failure.

(b) The Tax Indemnitor shall, at its own expense, assume control of the defense
of any Tax Claim for any Indemnifiable Tax. The Tax Indemnitor shall (i) notify
the Tax Indemnified Party of significant developments with respect to such Tax
Claim and keep the Tax Indemnified Party reasonably informed and consult with
the Tax Indemnified Party with respect to any issue that reasonably could be
expected to have an adverse effect on the Tax Indemnified Party or any of its
Affiliates (including by giving rise to an indemnity obligation of the Tax
Indemnified Party or any of its Affiliates), (ii) give to the Tax Indemnified
Party a copy of any Tax adjustment proposed in writing with respect to such Tax
Claim and copies of any other material correspondences with the relevant Taxing
Authority with respect to such Tax Claim, and (iii) otherwise permit the Tax
Indemnified Party to participate in all aspects of any proceedings relating to
such Tax Claim at the Tax Indemnified Party’s own expense. The Tax Indemnitor
shall not pay or compromise any Tax liability asserted with respect to any Tax
Claim for any Indemnifiable Tax without the prior written consent of the Tax
Indemnified Party, which consent shall not be unreasonably withheld, delayed or
conditioned.

(c) Without limiting the generality of Section 14.03, the Tax Indemnified Party
shall give the Tax Indemnitor such information with respect to any Tax Claim as
the Tax Indemnitor may reasonably request. In addition, if, and to the extent
required, the Tax Indemnified Party shall promptly execute and deliver, or cause
to be executed and delivered by the relevant taxpayer, reasonable powers of
attorney or other documents authorizing the Tax Indemnitor to defend and settle
such Tax Claim in accordance with this Section 13.07.

(d) If a Tax Claim potentially involves both Taxes for which Seller would be
required to indemnify Purchaser and its Affiliates (including the Transferred
Subsidiaries) pursuant to Section 13.01 and other Taxes for which Seller would
not be required to indemnify Purchaser and its Affiliates (including the
Transferred Subsidiaries), Purchaser and Seller shall jointly control such Tax
Claim, and cooperate in good faith in such control.

 

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(e) The Tax Indemnitor may discharge, at any time, its indemnity obligations by
paying the Tax Indemnified Party the amount of the applicable loss, (calculated
as of the date that such payment can be made by the Tax Indemnified Party to the
relevant Taxing Authority), so long as the Tax Indemnitor is actually able to
satisfy the underlying Tax Claim by paying such amount to the relevant Taxing
Authority.

SECTION 13.08. Exclusive Remedy. (a) Each party acknowledges and agrees that
from and after the Initial Closing Date, other than in the case of actual fraud,
the sole and exclusive remedy of such party and its Affiliates with respect to
any and all claims under the Transaction Agreements (other than the Transition
Services Agreement, the Metal Supply Agreement and the Scrap Metal Agreement)
and the transactions contemplated thereby shall be pursuant to the
indemnification provisions set forth in this Article XIII. In furtherance of the
foregoing, each party hereby waives, and agrees to cause its Affiliates to
waive, any and all rights, claims and causes of action they may have against any
other party or any Affiliate thereof arising under or based upon any statutory
or common law or otherwise (except pursuant to the indemnification provisions
set forth in this Article XIII or in the case of actual fraud) to the extent
relating to the transactions contemplated by the Transaction Agreements (other
than the Transition Services Agreement, the Metal Supply Agreement and the Scrap
Metal Agreement).

(b) No party shall be responsible for any indirect, incidental, punitive,
special or consequential damages which arise out of, relate to or are a
consequence of, the performance or nonperformance by such party under this
Agreement (including, but not limited to, with respect to loss of profits,
goodwill, business interruptions, anticipated savings or claims of customers),
even if advised of the possibility of such damages, in each case except as may
be payable to a claimant in a Third Party Claim.

SECTION 13.09. Tax Treatment of Certain Payments. Any indemnity payment
hereunder and any payment made pursuant to Sections 7.06, 7.11, 9.07 or 9.08
shall be treated as an adjustment to the Worldwide Purchase Price for Tax
purposes unless there is no reasonable basis for doing so under the applicable
Tax law.

SECTION 13.10. No Duplicative Payments. Notwithstanding anything to the contrary
in this Agreement, it is intended that the provisions of this Agreement will not
result in a duplicative payment of any amount required to be paid under this
Agreement, and this Agreement shall be construed accordingly.

ARTICLE XIV

Tax Matters

SECTION 14.01. Tax Returns; Tax Payments. (a) Seller shall prepare and, to the
extent permitted by law, file, or cause to be prepared and, to the extent
permitted by law, filed, all Tax Returns required to be filed by the Transferred
Subsidiaries after the applicable Closing Date with respect to any Tax period
that actually ends on or before such Closing Date.

 

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(b) Following the applicable Closing, Purchaser shall prepare and file, or cause
to be prepared and filed, all Tax Returns for Straddle Tax Periods required to
be filed by the Transferred Subsidiaries.

(c) Purchaser shall prepare and file, or cause to be prepared and filed, all
other Tax Returns required to be filed by the Transferred Subsidiaries after the
applicable Closing Date with respect to any Post-Closing Date Tax Period.

(d) Any refund (including interest paid thereon, to the extent received by the
Transferred Subsidiary) paid or credited to a Transferred Subsidiary with
respect to a Tax period that actually ends on or prior to the applicable Closing
Date shall be for Seller’s account, except for any such refund attributable to
any post-Closing deduction, loss, credit or similar benefit. The portion of any
refund (including interest paid thereon, to the extent received by the
Transferred Subsidiary) paid or credited to a Transferred Subsidiary and
attributable to the pre-Closing portion of any Straddle Tax Period shall be for
Seller’s account, except for any refund attributable to any post-Closing
deduction, loss, credit or similar benefit. All other refunds shall be for
Purchaser’s account. Purchaser or its Affiliates (including any Transferred
Subsidiary) shall pay (or cause to be paid) to Seller the amount of any refund
that is for Seller’s account, within five days after receipt thereof by
Purchaser or any of its Affiliates (including the Transferred Subsidiaries). Any
such payment shall be net of any incremental cost incurred by or Tax imposed on
Purchaser or any of its Affiliates (including the Transferred Subsidiaries) in
connection with receipt of such refund, and Seller shall, to the extent
necessary, reimburse Purchaser or the applicable Transferred Subsidiary for any
such incremental cost or Tax. If Seller determines that any of the Transferred
Subsidiaries is entitled to file or make a formal or informal claim for a refund
or an amended Tax Return providing for a refund with respect to a Tax period
that actually ends on or prior to the Closing Date, Seller shall be entitled to
file or make such claim or amended Tax Return on behalf of the applicable
Transferred Subsidiary and shall control the prosecution of such refund claim
(so long as such refund is for the account of Seller), provided that Purchaser
shall have the rights given to a Tax Indemnified Party under Section 13.07(b)
with respect to such claim. The parties shall cooperate in making a formal or
informal claim for any refund attributable to a Straddle Tax Period.

(e) Except to the extent required by law, Purchaser shall not permit any
Transferred Subsidiary to file any amended Tax Return for any Pre-Closing Date
Tax Period without the prior written consent of Seller, which consent shall not
be unreasonably withheld, conditioned or delayed.

(f) Each Tax Return described in Section 14.01(a) or (b) shall be prepared by
Purchaser or Seller in a manner consistent with past practice, including as to
Tax elections and Tax accounting methods, unless such inconsistency (i) could
not have a material detrimental effect on the other party, (ii) is required
under any Transaction Agreement or (iii) is required by applicable law.

(g) Each party responsible for the preparation of a Tax Return described in this
Section 14.01(a) or (b) shall submit such Tax Return to the other party
(together

 

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with schedules, statements and, to the extent required by such other party,
supporting documentation) at least 40 days prior to the due date (including
extensions) of such Tax Return; provided that neither Seller nor Purchaser shall
be required to submit any consolidated, combined, or unitary Tax Return that
includes entities other than the Transferred Subsidiaries but shall be required
to submit the relevant pro forma Tax Returns related to the Transferred
Subsidiaries. If such other party objects to any item on any such Tax Return, it
shall, within 30 days after delivery of such Tax Return, notify the party
responsible for the preparation of such Tax Return in writing that it so
objects, specifying with particularity any such item and stating the specific
factual or legal basis for any such objection. If a notice of objection is duly
delivered, Purchaser and Seller shall negotiate in good faith and use their
reasonable best efforts to resolve such items; provided that if the parties do
not resolve such items, such items shall be submitted to the Tax Referee
pursuant to Section 14.08.

(h) For the avoidance of doubt, if any Tax Return described in Section 14.01(a)
is filed by Seller after the applicable Closing Date, Seller shall deliver to
Purchaser, within 30 days of filing such Tax Return, a copy of any such Tax
Return (or portion thereof) that Purchaser would have been entitled to receive
under Section 7.01(b) had such Tax Return been filed on or before such Closing
Date. If Purchaser files any Tax Return for a Straddle Tax Period described in
Section 14.01(b) after the applicable Closing Date, Purchaser shall deliver to
Seller, within 30 days of filing such Tax Return, a copy of any such Tax Return.

(i) To the extent any amount for which Seller is responsible pursuant to
Section 13.01(a) is required to be paid after the applicable Closing, Seller
shall either (i) pay such amount to the applicable Taxing Authority at or before
the time at which payment of such amount is due (including estimated Taxes), and
furnish Purchaser or the applicable Transferred Subsidiary with evidence of such
payment, or (ii) pay such amount to Purchaser or the applicable Transferred
Subsidiary at least five Business Days before payment of such amount is due
(including estimated Taxes).

(j) Seller’s consolidated federal Income Tax Return for the taxable period that
includes the Closing Date shall be filed in accordance with Treasury Regulations
Sections 1.1502-76(b)(2)(i) and 1.1502-76(b)(2)(vi) (determined using the
closing of the books method), with no election under Treasury Regulations
Section 1.1502-76T(b)(2)(ii)(D).

SECTION 14.02. Certain Tax Covenants. (a) Purchaser covenants that, without the
prior written consent of Seller, it will not, and will not cause or permit any
Transferred Subsidiary or any other Affiliate of Purchaser to take any action on
the applicable Closing Date other than in the ordinary course of business,
including but not limited to the sale of any assets or the distribution of any
dividend or the effectuation of any redemption, that could give rise to any Tax
liability of Seller or any Affiliate of Seller, or indemnification obligation of
Seller under Section 13.01.

(b) After the applicable Closing Date, Purchaser shall not make, and shall not
permit any of its Affiliates to make, any election pursuant to Section 338(g) of
the

 

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Code (or any similar provision of applicable state or local Tax laws) with
respect to any Transferred Subsidiary.

(c) After the Initial Closing Date, none of Purchaser, Seller or their
respective Affiliates (including the Transferred Subsidiaries) will, without the
prior written consent of the other party, agree to the waiver or extension of
the statute of limitations relating to any Taxes of any Transferred Subsidiary
for any Pre-Closing Date Tax Period or any Straddle Tax Period; provided that
Purchaser may (to the extent permitted by law) extend the time for filing any
Tax Return for a Straddle Tax Period.

SECTION 14.03. Cooperation on Tax Matters. (a) Purchaser and Seller agree to
furnish, or cause to be furnished, to each other, upon request, in a timely
manner, such information (including access to books and records) and assistance
relating to the Transferred Subsidiaries as is reasonably necessary for the
filing of any Tax Return, for the preparation of any audit, and for the
prosecution or defense of any claim, suit or proceeding relating to any proposed
adjustment.

(b) Purchaser and Seller shall cooperate with each other in the conduct of any
audit or other proceedings involving any Transferred Subsidiary for any Tax
purposes and each shall execute and deliver such powers of attorney and other
documents as are necessary to carry out the intent of this Section 14.03.

(c) Seller shall retain, or cause to be retained, all Tax and accounting books
and records (including all computerized books and records, and any such
information stored on any other form of media) of the Transferred Subsidiaries
or their Subsidiaries relevant for Taxes for all Pre-Closing Date Tax Periods
and Straddle Tax Periods until the applicable period for assessment under
applicable law, including assessments regarding the utilization of Tax losses
and credits generated during a Pre-Closing Date Tax Period or Straddle Tax
Period (giving effect to any and all extensions or waivers) has expired
(“Retention Period”), and to abide by all record retention agreements entered
into with any Taxing Authority. Seller agrees to give Purchaser and the
Transferred Subsidiaries reasonable notice of the opportunity to receive such
books and records after such Retention Period, prior to discarding or destroying
any such books and records.

SECTION 14.04. Tax Sharing Agreements. Any and all existing Tax sharing
agreements between any Transferred Subsidiary, on the one hand, and Seller or
any Affiliate of Seller (other than the Transferred Subsidiaries), on the other
hand, shall be terminated as of the applicable Closing Date. After such date,
none of the Transferred Subsidiaries, Seller or any Affiliate of Seller shall
have any further rights or liabilities thereunder. Any and all existing powers
of attorney with respect to Taxes or Tax Returns to which any Transferred
Subsidiary is a party shall be terminated as of the applicable Closing Date.

SECTION 14.05. Transfer Taxes. (a) All stock transfer, real property transfer,
documentary, sales, use, registration, value-added and other similar Taxes
incurred, directly or indirectly, by virtue of Purchaser’s acquisition of any
Acquired Asset

 

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or Transferred Subsidiary on the applicable Closing (each such Tax, a “Transfer
Tax”) shall be borne 50% by Purchaser and 50% by Seller, and each party shall
indemnify the other party for any such Taxes incurred by such other party as a
result of the first party’s failure to timely pay such Taxes. Except as
otherwise required by applicable Tax laws, the party that is obligated by law to
file any Tax Returns that relate to Transfer Taxes shall prepare and file all
such Tax Returns, and provide the other party with a copy of any such filed Tax
Return. In the event that both Seller or its Affiliates (other than a
Transferred Subsidiary) and Purchaser or its Affiliates (including a Transferred
Subsidiary) are required to file such Tax Returns under applicable Tax law,
Purchaser shall be required to prepare and file such Tax Returns. The parties
hereto shall cooperate in the preparation and filing of any such Tax Returns.

(b) In the event that either party is aware that an exemption from an applicable
Transfer Tax is available, such party shall deliver to the other party any
applicable exemption certificate, duly signed and executed, or any other
applicable documentation required by applicable Tax law in connection with such
Transfer Tax exemption.

(c) For the avoidance of doubt, this Section 14.05 shall not apply to any Taxes
arising from any Post-Signing Restructuring Action for which Seller is
responsible pursuant to Section 13.01(a)(iv).

SECTION 14.06. FIRPTA Affidavit. Seller shall deliver to Purchaser at the
applicable Closing an affidavit (the “FIRPTA Affidavit”), duly executed and
acknowledged, certifying that Seller or the relevant Selling Company is a
“domestic corporation” within the meaning of Sections 7701(a)(3) and (4) of the
Code and Section 1.897-1(j) of the applicable Treasury Regulations. To the
extent necessary or advisable, Seller or the relevant Selling Company shall
deliver to Purchaser other FIRPTA Affidavits permitted by the applicable
Treasury Regulations.

SECTION 14.07. Loss Disallowance Rule. If (i) Proposed Treasury Regulation
Section 1.1502-36 becomes effective (whether or not changes are made thereto)
(as so effective, the “New LDR Rules”), (ii) the New LDR Rules are applicable to
any transfer (or deemed transfer) of any Transferred Subsidiary effected at or
prior to the applicable Closing and (iii) the New LDR Rules permit any election
(or protective election to reduce the Tax basis in the shares of a first-tier
Transferred Subsidiary in order to prevent any reduction of any Tax basis or
attributes of any Transferred Subsidiary, then Seller shall make such election.
The parties further agree to take such actions as are required to give effect to
the intent of the parties that the Tax basis and Tax attributes of the
Transferred Subsidiary be preserved to the maximum extent permitted by law even
if such preservation requires a reduction or disallowance of any loss otherwise
available to any Seller.

SECTION 14.08. Tax Matter Disputes. If, after negotiating in good faith,
Purchaser and Seller are unable to reach an agreement relating to any Tax matter
under this Article XIV, the dispute shall be submitted to a nationally
recognized law firm (the “Tax Referee”), chosen and mutually acceptable to both
parties within 30 Business Days

 

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of the date on which the need to select such a Tax Referee arises. The Tax
Referee shall resolve any disputed items within 30 Business Days of having the
item referred to it, pursuant to such procedures as it may require. The parties
shall promptly act to implement the decision of the Tax Referee. The fees and
expenses of the Tax Referee shall be borne by each party to the extent the
position of the other party is upheld by the Tax Referee.

SECTION 14.09. Mexican Restructuring. Seller will (prior to the Closing Date for
the Mexican Country Unit) file (or cause to be filed) valid elections pursuant
to Section 301.7701-3(c) of the Treasury Regulations treating each of CSI Mexico
LLC and Closure Systems Mexico Holdings LLC as an association taxable as a
corporation effective on the date of formation of CSI Mexico LLC or Closure
Systems Mexico Holdings LLC, as applicable and to validly join in the filing of
Seller’s U.S. federal consolidated income tax return. Notwithstanding anything
else contained herein, (i) elections shall be made under Section 338(h)(10) of
the Code with respect to the purchase pursuant to this Agreement of CSI Mexico
LLC and Closure Systems Mexico Holdings LLC (the “Mexican 338 Elections”),
(ii) Purchaser shall cause Grupo Alcoa, S. de R.L. de C.V. to alter the vote and
value percentages of its shares in accordance with Mexican law to maintain
Mexican tax consolidation, and (iii) Purchaser shall elect to treat either or
both of CSI Mexico LLC and Closure Systems Mexico Holdings LLC as a partnership
or as disregarded as an entity separate from its owner for federal income tax
purposes, and such elections shall be effective on or after the Closing Date for
the Mexican Country Unit. Seller shall, and shall cause its Affiliates
(including, prior to the applicable Closing, any Transferred Subsidiary) to,
take any action reasonably requested by Purchaser to enable the transactions
described in clauses (ii) and (iii) above to preserve Mexican tax consolidation
for Grupo Alcoa, S. de R.L. de C.V. (and its Affiliates) and to qualify CSI
Mexico LLC and Closure Systems Mexico Holdings LLC as a partnership or as
disregarded as an entity separate from its owner for U.S. federal income tax
purposes.

ARTICLE XV

Survival of Representations

SECTION 15.01. Survival of Representations. The representations and warranties
in this Agreement shall survive the Initial Closing solely for purposes of
Article XIII hereof and shall terminate on the first anniversary of the Initial
Closing Date; provided, however, that (i) the representations and warranties
contained in Section 6.11 that relate to Assumed Benefit Plans that are subject
to ERISA shall survive the Initial Closing solely for purposes of Article XIII
hereof and shall terminate on the expiration of the applicable statute of
limitations, (ii) the representations and warranties contained in Section 6.14
shall survive the Initial Closing solely for purposes of Article XIII hereof and
shall terminate on the third anniversary of the Initial Closing Date, (iii) the
Tax representations and warranties set forth in Section 6.07 shall not survive
the Initial Closing for any purpose, and (iv) the representations and warranties
contained in Sections 6.03(a) and Section 6.08(a) shall survive in respect of
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interests or assets to which such provisions relate until the expiration of the
applicable statute of limitations in the jurisdiction where such equity interest
or asset is located.

ARTICLE XVI

Termination

SECTION 16.01. Termination. Notwithstanding anything in this Agreement to the
contrary, this Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Initial Closing Date:

(i) by mutual written consent of Seller and Purchaser;

(ii) by Purchaser upon written notice to Seller if any of the conditions to the
Initial Closing set forth in Section 5.01 shall have become incapable of
fulfillment and shall not have been waived in writing by Purchaser;

(iii) by Seller upon written notice to Purchaser if any of the conditions to the
Initial Closing set forth in Section 5.02 shall have become incapable of
fulfillment and shall not have been waived in writing by Seller; or

(iv) by either Seller or Purchaser upon written notice to the other such party
if the Initial Closing does not occur on or prior to May 1, 2008 (as such date
may be extended in accordance with this Section 16.01, the “Termination Date”);
provided that (A) Seller may elect by written notice to Purchaser to extend the
Termination Date to the first day of the next succeeding month if Seller has not
provided on or prior to the second Business Day prior to the applicable
Termination Date all information required to be provided upon request to the
lenders of Purchaser pursuant to clause (ii) of the definition of “Debt
Marketing Period” (despite Seller acting in good faith to satisfy such request)
and (B) Purchaser may elect by written notice to Seller to extend the
Termination Date to the first day of the next succeeding month, but in no event
later than June 1, 2008, if (x) Seller has not provided on or prior to the
second Business Day prior to the applicable Termination Date all information
required to be provided upon request to lenders of Purchaser pursuant to clause
(ii) of the definition of “Debt Marketing Period” and (y) the Financing
Commitments (or replacement commitments obtained by Purchaser in compliance with
this Agreement) shall continue by their written terms (a copy of which shall
have been provided to Seller) in full force and effect until the new Termination
Date as so extended;

provided, however, that the party seeking termination pursuant to clause (ii),
(iii) or (iv) is not then in breach in any material respect of any of its
representations, warranties, covenants or agreements contained in the
Transaction Agreements such that the other party would not be obligated to
consummate the Initial Closing;

SECTION 16.02. Other Transaction Agreements; Material To Be Returned. (a) In the
event that this Agreement is terminated by Seller or Purchaser

 

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pursuant to Section 16.01, the transactions contemplated by the Transaction
Agreements shall be terminated, without further action by any party hereto.

(b) Furthermore, in the event that this Agreement is terminated as provided
herein:

(i) Purchaser shall return all documents and other material received from Seller
or its Subsidiaries or any of their Representatives relating to the Business or
the transactions contemplated by the Transaction Agreements, whether obtained
before or after the execution of this Agreement, to Seller; and

(ii) Purchaser agrees that all confidential information received by Purchaser or
its Affiliates or their Representatives with respect to the Business, Seller or
its Subsidiaries, the Transaction Agreements or the transactions contemplated
thereby shall be treated in accordance with the Confidentiality Agreement which
shall remain in full force and effect notwithstanding the termination of this
Agreement.

SECTION 16.03. Effect of Termination. Upon the termination hereof, this
Agreement shall become void and of no further force and effect, except for the
provisions of (i) Sections 6.06 and 8.03 relating to brokers, (ii) Section 9.01
relating to the obligation of Purchaser to keep confidential certain
information, (iii) Section 10.02 relating to publicity, (iv) this Article XVI
and (v) Article XVII. Nothing in this Article XVI shall be deemed to release
either party from any liability for any willful and material breach of any
obligation hereunder or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreement.

ARTICLE XVII

General Provisions

SECTION 17.01. Assignment; Successors. This Agreement and the rights and
obligations hereunder may not be assigned or otherwise transferred by any party
(including by operation of law) without the prior written consent of the other
party, and any assignment or transfer without such consent shall be null and
void and of no effect. Notwithstanding the foregoing, (a) Purchaser may, without
the consent of Seller, assign all of its rights hereunder solely for collateral
purposes to any lender providing the Debt Financing to Purchaser, (b) Purchaser
may designate one or more of its direct or indirect Subsidiaries or other
Affiliates to purchase Shares or all or a portion of the Acquired Assets (and
assume the applicable Assumed Liabilities) or assign to them any other rights or
obligations contained in any Transaction Agreement, and in such event such
assignee will be deemed to be the Purchaser in respect of such assigned rights
or obligations provided that Rank Group Limited remains liable for the
obligations so assigned and (c) Purchaser may assign to any transferee of a
portion of the Business or a Business Property the benefit of the non-assertion
covenant in Section 10.13(b) as it relates to such portion of the Business or
Business Property so transferred. Subject to the foregoing, this

 

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Agreement will be binding upon, inure to the benefit of and be enforceable by,
the parties and their respective successors or assigns.

SECTION 17.02. No Third Party Beneficiaries.

(a) This Agreement is for the sole benefit of the parties and their permitted
assigns and nothing herein expressed or implied shall give or be construed to
give to any person, other than the parties and such permitted assigns, any legal
or equitable rights hereunder, whether as third party beneficiaries or
otherwise, except for indemnified parties as set forth in Article XIII.

(b) Notwithstanding anything to the contrary contained in this Agreement, no
provision under this Agreement, whether express or implied, shall (i) constitute
or create an employment agreement with any Transferred Employee, (ii) be treated
as an amendment or other modification of any Seller Benefit Plan or Assumed
Benefit Plan or other benefit plan or arrangement, or (iii) except as
specifically provided in Sections 12.01(c), 12.02(c) and 12.03(b), limit the
right of Purchaser, Seller or any of their respective Affiliates to amend,
terminate or otherwise modify any Seller Benefit Plan, Assumed Benefit Plan or
other benefit or employment plan or arrangement following the Initial Closing
Date.

(c) Seller and Purchaser acknowledge and agree that all provisions contained in
this Agreement with respect to Transferred Employees are included for the sole
benefit of Seller, Purchaser and their respective Affiliates, and that nothing
in this Agreement, whether express or implied, shall create any third-party
beneficiary or other rights (i) in any other person, including, without
limitation, any current or former Transferred Employees, any participant in any
existing benefit plan or arrangement, or any dependent or beneficiary thereof,
or (ii) to continued employment with Seller, Purchaser or any of their
respective Affiliates.

SECTION 17.03. Expenses. (a) Whether or not the transactions contemplated by
this Agreement are consummated, and except as otherwise expressly provided
herein, all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
costs or expenses; provided, however, that (i) all costs, fees and expenses
incurred by Seller in connection with the delivery of the financial information
referenced in Section 7.07 shall be borne by Purchaser, (ii) all costs, fees and
expenses (including Taxes) incurred by Purchaser or a Transferred Subsidiary in
connection with the transfer back to Seller of any Excluded Assets (including
pursuant to Section 7.12) shall be borne by Seller, and (iii) all third-party
costs, fees and expenses, including Seller’s out-of-pocket expenses, associated
with the Migration Services described in Section 10.11 shall be borne by
Purchaser.

(b) Any costs and expenses arising pre- or post-Closing in connection with
discharging obligations under a Remediation in Progress Waiver or Remediation
Agreement referred to in Section 5.01(vi) or otherwise in complying with the New
Jersey Industrial Site Recovery Act for the Avenel facility shall be borne by
Purchaser; provided

 

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that any such costs and expenses in excess of $20,000 per annum shall be borne
by Seller for a period of seven years following the Initial Closing Date.

(c) Without limiting the obligations of Seller described in the next sentence,
Purchaser will bear all the costs of preparing the Business post-closing to
operate on its own from an information technology perspective, including costs
for establishing its own data center, capital leases for hardware, labor for
converting e-mail, security, file and print sharing, establishing a Windows
domain, re-staging PCs to the buyer’s operating environment, building a global
WAN environment, paying third party consulting costs for Oracle and to establish
payroll services, mid-tier systems, licensing programs, treasury and banking
services, electronic data interface services, and travel and expense. Seller’s
cooperation with the foregoing shall be limited to the transfer of certain
software licenses pursuant to Section 10.01, Seller’s obligations under
Section 10.11 and the provision of transitional services under the Transition
Services Agreement.

SECTION 17.04. Amendments. No amendment to this Agreement shall be effective
unless it shall be in writing and signed by each party.

SECTION 17.05. Waivers. No failure or delay of any party in exercising any right
or remedy under this Agreement shall operate as a waiver hereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise hereof or the exercise of any other right or power. Subject to
Section 13.08, the rights and remedies of the parties under this Agreement are
cumulative and are not exclusive of any rights or remedies which the parties
would otherwise have hereunder. This Agreement (or any provision hereof) may not
be waived except pursuant to a writing executed by the waiving party. The
representations and warranties of the Seller on the one hand, and the Purchaser,
on the other hand, that are contained in this Agreement (as brought down on the
applicable Closing Date) shall not be affected or deemed waived by reason of any
investigation made by or on behalf of the Purchaser or the Seller, as the case
may be, (including but not limited to by any of their advisors, consultants or
representatives) or by reason of the fact that the Purchaser or the Seller, as
the case may be, or any of their respective, advisors, consultants or
representatives knew or should have known that any such representation or
warranty is or might be inaccurate; provided that if Purchaser asserts a
post-Closing claim for actual fraud as contemplated by Section 13.08, this
sentence shall be disregarded for purposes of allowing Seller to defend such
claim.

SECTION 17.06. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by facsimile or email or sent, postage prepaid, by registered,
certified or express mail or reputable overnight courier service and shall be
deemed given when so delivered by hand or facsimile or email, or if mailed,
three days after mailing (one Business Day in the case of express mail or
overnight courier service) to the parties at the following addresses or
facsimiles or email addresses (or at such other address for a party as shall be
specified by like notice):

 

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(a) if to Seller:

Alcoa Inc. Legal Department

390 Park Avenue

New York, NY 10022-4608

U.S.A.

Attention: Office of General Counsel

Facsimile: (212) 836-2844 and (412) 553-4064

email: Max.Laun@alcoa.com

with a copy (which shall not constitute notice) to:

Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, New York 10019

U.S.A.

Attention: Scott A. Barshay, Esq.

Facsimile: (212) 474-3700

email: sbarshay@cravath.com

and

Attention: Thomas E. Dunn, Esq.

Facsimile: (212) 474-3700

email: tdunn@cravath.com

(b) if to Purchaser:

Rank Group Limited

Level Nine

148 Quay Street

P.O. Box 3515

Auckland, New Zealand

Attention: Mr. Greg Cole

Facsimile: (64-9) 366-6263

email: Greg.Cole@rankgroup.co.nz

with a copy (which shall not constitute notice) to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

U.S.A.

 

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Attention: Jeffrey J. Rosen, Esq.

Facsimile: (212) 909-6836

email: jrosen@debevoise.com

and

Attention: Kevin M. Schmidt, Esq.

Facsimile: (212) 909-6836

email: kmschmidt@debevoise.com

Notices delivered by facsimile shall have the same legal effect as if such
notice had been delivered in person.

SECTION 17.07. Exhibits and Schedules; Interpretation. The headings contained in
this Agreement or in any exhibit or schedule hereto and in the table of contents
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any matter set forth in any provision,
subprovision, section or subsection of any schedule shall be deemed set forth in
such other provisions of the schedules to the extent the applicability thereto
is reasonably apparent for all purposes of the schedules. All exhibits and
schedules annexed to this Agreement are hereby incorporated herein and made a
part of this Agreement as if set forth in full herein. Each capitalized term
used in any schedule or exhibit but not otherwise defined therein, has the
meaning specified in this Agreement. For all purposes hereunder, (a) definitions
of terms shall apply equally to the singular and plural forms of the terms
defined, (b) whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms, (c) the terms “include”,
“includes” and “including” shall be deemed followed by the words “without
limitation”, (d) the words “hereof”, “herein” and “hereunder” and words of
similar import shall refer to this Agreement as a whole and not to any
particular provision and (e) the word “extent” in the phrase “to the extent”
shall mean the degree to which a subject or other thing extends, and shall not
simply mean “if”. Any reference to an “applicable Closing” in any provision
shall be deemed to be a reference to the Initial Closing; provided that if the
Foreign Country Unit (or the Acquired Assets, Assumed Liabilities, Shares or
Covered Employees relating thereto) which is the subject of such provision shall
not have been transferred to Purchaser at or prior to the Initial Closing, such
reference shall be deemed to refer to the applicable Foreign Country Unit
Closing with respect to such Foreign Country Unit. Any reference to an
“applicable Closing Date” in any provision shall be deemed to be a reference to
the date of the applicable Closing. Any reference to any date or time with
respect to any Country Unit shall be a reference to the local time at the
contemplated place of the Closing with respect to such Country Unit. In the
event of any conflict between this Agreement and any Foreign Transfer Agreement,
the terms of this Agreement shall control.

The parties have participated jointly in the negotiating and drafting of this
Agreement. If an ambiguity or a question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the parties, and no
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burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provision. This Agreement is in the English language only,
which shall be controlling in all respects. No translation, if any, of this
Agreement into any other language shall be of any force or effect in the
interpretation of this Agreement or in a determination of the intent of any
party.

SECTION 17.08. Counterparts. This Agreement may be executed in one or more
counterparts, all of which, when taken together, shall be considered one and the
same agreement, and shall become effective when one or more such counterparts
have been signed by each of the parties and delivered to the other party. Each
party to this Agreement need not sign the same counterpart. Delivery of an
executed counterpart of a signature page by facsimile transmission shall be
effective as delivery of a manually executed counterpart. Once signed, any
reproduction of this Agreement made by reliable means (for example, photocopy or
facsimile) is considered an original, to the extent permissible under applicable
law, and all products and services referred to herein are subject to it.

SECTION 17.09. Entire Agreement. This Agreement, including the schedules,
exhibits and attachments hereto, together with the Other Transaction Agreements
and the Confidentiality Agreement, contain the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings relating to such subject
matter.

SECTION 17.10. Severability. If any provision or the application of any such
provision to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, to the extent
permitted by applicable law, such invalidity, illegality or unenforceability
shall not affect any other provision. Upon such determination that any term or
other provision is invalid, illegal or unenforceable, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.

SECTION 17.11. Consent to Jurisdiction. Each party irrevocably submits to the
exclusive jurisdiction of (i) the Supreme Court of the State of New York,
New York County, and (ii) the United States District Court for the Southern
District of New York, for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby (and each
agrees that no such action, suit or proceeding relating to this Agreement shall
be brought by it or any of its Affiliates except in such courts). Each party
further agrees that service of any process, summons, notice or document by U.S.
registered mail to such person’s respective address set forth herein shall be
effective service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction as set forth in
the immediately preceding sentence. Each party irrevocably and unconditionally
waives (and agrees not to plead or claim) any objection to the laying of venue
of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the Supreme Court of the State of
New York, New York County or (ii) the United States District Court for the
Southern District of New York or that any such action, suit

 

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or proceeding brought in any such court has been brought in an inconvenient
forum. Each party shall cause its Subsidiaries to stipulate that, for purposes
of any such suit, action or other proceeding, the Foreign Transfer Agreements
shall be deemed governed by, and to be construed in accordance with, the
internal laws of the State of New York applicable to agreements made and to be
performed entirely within such State.

SECTION 17.12. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York applicable to
agreements made and to be performed entirely within such State.

SECTION 17.13. Waiver of Jury Trial. Each party hereby waives to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of, under or in
connection with this Agreement. Each party (i) certifies that no Representative
of any other party has represented, expressly or otherwise, that such other
party would not, in the event of litigation, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other party hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 17.13.

SECTION 17.14. Time of the Essence. Time is of the essence in the performance of
all obligations under this Agreement.

[Remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

 

ALCOA INC., By  

/s/ Barbara S. Jeremiah

Name:   Barbara S. Jeremiah Title:   Executive Vice President Corporate
Development RANK GROUP LIMITED, By  

/s/ Helen Golding

Name:   Helen Golding Title:   Director By  

/s/ Robert Bailey

Name:   Robert Bailey Title:   Director

 

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ANNEX 11

Definitions

The following terms shall have the following meanings:

“Accounting Firm” shall have the meaning specified in Section 4.03(b).

“Accrued Pension Liability” shall have the meaning specified in Section 12.04(a)
of the Seller Disclosure Letter.

“Acquired Assets” shall have the meaning specified in Section 2.01(b).

“Acquired Books and Records” shall mean all books of account, ledgers and
general, financial and accounting records and files of any Asset Selling Company
that are located at an Operating Location and primarily used or held for use in
the Business; provided that Acquired Books and Records shall not include any
personnel files, other than the Transferred Personnel Files.

“Acquired Intellectual Property” shall have the meaning specified in
Section 2.01(b)(vii).

“Acquired Marks” shall have the meaning specified in Section 2.01(b)(vii).

“Acquired Permits” shall have the meaning specified in Section 2.01(b)(x).

“Acquired Technology” shall have the meaning specified in Section 2.01(b)(viii).

“Acquisition Agreement” shall mean the Acquisition Agreement to which this Annex
1 is attached.

“Active Employee” shall have the meaning specified in Section 12.01(a)(i).

“Actual Accrued Pension Liability” shall mean, with respect to any Assumed
Pension Plan, the Accrued Pension Liability as agreed by Seller and Purchaser in
accordance with Section 12.04(b).

“Actual Pension Amount” shall mean (i) with respect to each Assumed Pension Plan
other than the German Pension Plan, the fair market value of the Assumed Pension
Assets (if any) as of the close of business on the last business day immediately
prior to the applicable Closing Date minus the absolute value of the Actual
Accrued

 

 

1

When a reference is made to a Section or Article, such reference shall be to a
Section or Article of the Acquisition Agreement to which this Annex 1 is
attached.

 

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Pension Liability and (ii) with respect to the German Pension Plan, the absolute
value of the Estimated Accrued German Pension Liability minus the absolute value
of the Actual Accrued Pension Liability. The Actual Pension Amount may be a
positive or negative number.

“Affiliate” shall mean, with respect to any person, any other person directly or
indirectly Controlling, Controlled by or under common Control with such first
person.

“Allocation Accounting Firm” shall have the meaning specified in
Section 10.08(h).

“Allocation Schedule” shall have the meaning specified in Section 10.08(a).

“Alternative Arrangement” shall have the meaning specified in Section 10.01.

“Applicable 30 Days’ Trade Accounts Payable” shall have the meaning specified in
Section 10.05(c)(vi).

“Applicable 30 Days’ Trade Accounts Receivable” shall have the meaning specified
in Section 10.05(c)(vii).

“Applicable Asset Selling Company” shall have the meaning specified in
Section 10.05(c)(iii).

“Applicable Intercompany Arrangement” shall have the meaning specified in
Section 10.05(c)(v).

“Applicable Interest Rate” shall mean, as of any date of determination, with
respect to amounts denominated in U.S. dollars, LIBOR.

“Applicable Purchase Price” shall have the meaning specified in Section 9.07(a).

“Applicable Spot Rate” shall mean, with respect to any non-U.S. currency and any
Business Day, the exchange rate published in The Financial Times (or such other
authority agreed by Seller and Purchaser) on such Business Day as the mid-point
closing U.S. dollar exchange rate with respect to such currency for the most
recent prior day.

“Applicable Transferred Subsidiary” shall have the meaning specified in
Section 10.05(c)(iv).

“Appraisal” shall have the meaning specified in Section 10.08(b).

“Appraisal Firm” shall have the meaning specified in Section 10.08(b).

 

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“Asset Selling Companies” shall have the meaning specified in the recitals of
the Acquisition Agreement.

“Assigned Contracts” shall have the meaning specified in Section 2.01(b)(vi).

“Assumed Benefit Plan” shall mean each Seller Benefit Plan (i) sponsored by a
Transferred Subsidiary as of the Closing Date, (ii) that Purchaser or any of its
Affiliates has explicitly agreed to assume pursuant to Article XII of the
Acquisition Agreement or (iii) that Purchaser or any of its Affiliates is
required to assume under applicable Law or any applicable collective bargaining
agreement, in each case other than Seller Benefit Plans that Seller and its
Affiliates have expressly agreed to retain pursuant to Article XII.

“Assumed Foreign Benefit Plan” shall mean each Assumed Benefit Plan that is not
an Assumed U.S. Benefit Plan.

“Assumed Foreign Pension Plan” shall have the meaning specified in
Section 12.03(b).

“Assumed Liabilities” shall have the meaning specified in Section 2.02(b).

“Assumed Pension Assets” shall mean, with respect to any Assumed Pension Plan,
the assets of such Assumed Pension Plan which are held by a trust or other
funding vehicle as of the applicable Closing Date.

“Assumed Pension Plan” shall mean each U.S. Transferred DB Plan and each Assumed
Foreign Pension Plan.

“Assumed U.S. Benefit Plan” shall mean each Assumed Benefit Plan that is
sponsored, maintained or contributed to by a Selling Company or any Transferred
Subsidiary primarily for the benefit of Covered Employees based primarily in the
United States (including Puerto Rico).

“Audited Financial Statements” shall have the meaning specified in Section 6.04.

“Basket” shall have the meaning specified in Section 13.02.

“Benefit Plan Assets” shall mean all assets with respect to any Seller Benefit
Plan that (i) are transferred to Purchaser, any of its Affiliates or any
employee benefit plan or trust maintained by Purchaser or any of its Affiliates,
as expressly provided in Article XII of the Acquisition Agreement, (ii) are held
with respect to any Assumed Benefit Plan, (iii) transfer automatically to
Purchaser or any of its Affiliates in connection with the assumption of any
Assumed Benefit Plan or (iv) are Assumed Pension Assets.

 

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“Business” shall have the meaning specified in the recitals of the Acquisition
Agreement. For the avoidance of doubt, the Business shall not include the
businesses of Seller and/or its Subsidiaries described in Section 1.01(c) of the
Seller Disclosure Letter.

“Business Day” shall mean any day other than (a) a Saturday or Sunday, or
(b) any other day on which commercial banks in New York City are authorized or
required by law to close.

“Business Material Adverse Effect” shall mean a material adverse effect on the
business, financial condition or results of operations of the Business, taken as
a whole, or on the ability of the Selling Companies to consummate the material
transactions contemplated by the Transaction Agreements, other than any fact,
change, event, development, circumstance, condition or effect to the extent
arising from (i) general economic conditions or capital or financial markets
generally (including interest rate and exchange rate fluctuations), (ii) the
pendency or announcement of the Transaction Agreements or the performance of any
obligations thereunder (including any loss of employees, any cancellation of or
delay in customer orders or any disruption in supplier, distributor, partner or
similar relationships), (iii) any fact, change, event, development,
circumstance, condition or effect relating generally to companies operating in
businesses similar to the Business, except to the extent such fact, change,
event, development, circumstance, condition or effect has a materially
disproportionate effect on the Business, taken as a whole, (iv) any natural
disaster or any acts or threats of terrorism, military action or war or any
escalation or worsening thereof, except to the extent such event or act involves
the properties or assets of the Business, (v) the failure of the Business to
meet projections or forecasts, in and of itself (for the avoidance of doubt, any
underlying facts of cause for any such failure shall not be excluded by this
clause (v)) or (vi) changes (after the date of the Acquisition Agreement) in
GAAP or applicable laws or regulations.

“Business Property” shall have the meaning specified in Section 6.18.

“Canadian Master Trust Fund” shall have the meaning specified in
Section 12.03(c).

“Canadian Pension Trusts” shall mean the individual trusts for each of the
Canadian Transferred Pension Plans.

“Canadian Transferred Pension Plans” shall mean the Canadian Assumed Pension
Plans listed on Section 6.11(e) of Seller’s Disclosure Letter.

“Cap” shall have the meaning specified in Section 13.02.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.

 

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“Closed Facility” shall mean (i) any facility which is currently inactive and at
which Seller or any of its Subsidiaries ceased operations prior to June 30,
2007, or (ii) any facility listed in Section 1.01(d) of the Seller Disclosure
Letter.

“Closing” shall mean the Initial Closing or any Foreign Country Unit Closing, as
applicable.

“Closing Date” shall mean the date on which a Closing shall actually occur.

“Closing Indebtedness” shall have the meaning specified in Section 4.03(a).

“Closing Net Cash Balance” shall have the meaning specified in Section 4.03(a).

“Closing Recalculated Seller SFP Payables” shall have the meaning specified in
Section 4.03(a).

“Closing Statement” shall have the meaning specified in Section 4.03(a).

“Closing Statement Principles” shall have the meaning specified in
Section 4.03(c).

“Closing Working Capital” shall have the meaning specified in Section 4.03(a).

“Closing Workers Comp Accrual” shall have the meaning specified in
Section 4.03(a).

“Code” shall mean the United States Internal Revenue Code of 1986, as amended.

“Confidentiality Agreement” shall have the meaning specified in Section 9.01(a).

“Confidentiality Agreement Representatives” shall mean Purchaser’s directors,
officers, employees, agents or advisors (including attorneys, accountants,
consultants, bankers, financing sources, financial advisors and any
representatives of Purchaser’s advisors).

“Continuation Period” shall have the meaning specified in Section 12.01(b).

“Contract” shall mean any written or unwritten agreement, contract, purchase
order, lease, license, evidence of debt, mortgage, instrument or other legally
binding commitment, obligation or arrangement.

 

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“Contribution Period” shall have the meaning specified in Section 12.02(e)(ii).

“Control” shall mean the power to direct the affairs of a person by reason of
ownership of voting stock, by contract or otherwise.

“Country Unit” shall mean the U.S. Country Unit or, with respect to any country
other than United States of America, the Acquired Assets located in such
country, the Assumed Liabilities related to the operation of the Business in
such country and the Transferred Subsidiaries’ Equity Interests of any
Transferred Subsidiary which is organized in such country.

“Covered Distribution” shall have the meaning specified in Section 7.03(b).

“Covered Employee” shall mean an employee of Seller or any of its Subsidiaries
who, as of the applicable Closing Date (or such other time as is specified in
the context where used), is primarily employed in the Business; provided,
however, that the term “Covered Employee” shall exclude (i) all individuals
listed in Section 7.02(iv)(2) of the Seller Disclosure Letter, (ii) all Former
Employees and (iii) all individuals whose work is primarily dedicated to the
Excluded Assets, solely in the case of this clause (iii), unless the parties
agree that such individual shall be considered a “Covered Employee”.

“Covered Employee Liabilities” shall mean (A) all employment and employee
benefits-related liabilities, obligations and commitments relating to the
Covered Employees (or any dependent or beneficiary of any Covered Employee) that
(i) arise out of or are incurred at or after the applicable Closing Date in
connection with such employee’s employment with Purchaser or any of its
Affiliates, (ii) arise out of or are incurred on or before the applicable
Closing Date in connection with such employee’s employment with Seller and its
Affiliates (other than the employment and employee benefits-related liabilities,
obligations and commitments relating to the Covered Employees that Seller and
its Affiliates have expressly agreed to retain pursuant to Article XII (it being
understood that the rights and obligations of the parties in respect of the
employment and employee benefits-related liabilities, obligations and
commitments relating to the Covered Employees that are the subject of Article
XII are expressly set forth in Article XII)), (iii) the parties to the
Acquisition Agreement have explicitly agreed that Purchaser or any of its
Affiliates shall assume pursuant to the Acquisition Agreement, (iv) relate to an
Assumed Benefit Plan to the extent expressly assumed pursuant to this
Acquisition Agreement, (v) transfer automatically to Purchaser or any of its
Affiliates under applicable Law (including as a result of the acquisition by
Purchaser of all the outstanding capital stock and other equity interests of the
Transferred Subsidiaries), (vi) relate to the obligation pursuant to
Section 12.01(a) to rehire or reinstate any Employee on Disability Leave or
other Covered Employee who is not actively at work on the applicable Closing
Date or (vii) are reflected on a Closing Statement, in each case, other than
liabilities, obligations and commitments (1) that Seller and its Affiliates have
expressly agreed to retain pursuant to Article XII, (2) that arise

 

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pursuant to any plan, arrangement, agreement or policy that primarily relates to
benefits in the event of a change in control of Seller or any plan, arrangement,
agreement or policy pursuant to which a Covered Employee may become entitled to
a retention bonus payable by Seller or any of its Subsidiaries (other than any
Transferred Subsidiary) as of the applicable Closing or (3) that arise pursuant
to any Seller Benefit Plan or any other plan, arrangement, agreement or policy
of Seller or its Affiliates, other than any (x) plan, arrangement, agreement or
policy mandated by applicable Law or (y) Assumed Benefit Plan, (B) all
liabilities, obligations, commitments, claims and losses relating to the Assumed
Pension Plans, whether arising before, on or after the applicable Closing Date,
and (C) all liabilities, obligations, commitments, claims and losses relating to
the grievances and other arbitration proceedings of former employees of the
Business that are listed in Section 6.13(b) of the Seller Disclosure Letter or
that arise after the date of this Agreement in the ordinary course of business.

“Covered Matter” shall have the meaning specified in Section 7.06(a).

“Debt Financing” shall mean the debt financing described in the Financing
Commitments (or any replacement commitments obtained by Purchaser in compliance
with this Agreement).

“Debt Marketing Period” shall mean a period of 21 consecutive days which shall
commence upon the later of (i) the date, no earlier than February 1, 2008, on
which (A) all the conditions (other than Section 5.01(iv)) to the obligation of
Purchaser to consummate the Initial Closing are satisfied (excluding those
conditions intended to be satisfied at the Initial Closing) and (B) all filings
applicable to the transaction contemplated by the Transaction Agreements under
the antitrust or trade regulation laws and regulations set forth in
Section 5.01(iv) of the Seller Disclosure Letter shall have been made and
(ii) the date, no earlier than February 1, 2008, on which Seller shall have
furnished to Purchaser (A) the financial statements referred to in Section 7.07
that are to be provided prior to the Initial Closing and (B) such other
financial and other pertinent information regarding the Business as may be
reasonably requested by the lenders of Purchaser that is of the type and form
customarily included in private placement memoranda relating to private
placements under Rule 144A of the Securities Act of 1933, as amended (it being
understood and agreed that providing audited financial statements other than the
Audited Financial Statements shall not be a reasonable request).

“Deductible” shall have the meaning specified in Section 13.02 of the Seller
Disclosure Letter.

“Deferred Closing” shall have the meaning specified in Section 4.01(a).

“Deferred Initial Closing” shall have the meaning specified in Section 4.01(a).

“Deferred Foreign Closing” shall have the meaning specified in Section 3.01(b).

“DOJ” shall mean the United States Department of Justice.

 

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“Employee on Disability Leave” shall mean any Covered Employee who is employed
primarily in the United States and who, as of the applicable Closing Date, is on
short-term or long-term disability leave; provided, however, that the term
“Employee on Disability Leave” shall exclude any Covered Employee whose
employment is required to transfer as of the applicable Closing Date to
Purchaser or its Affiliates pursuant to any applicable collective bargaining
agreement.

“Enterprise Value” shall have the meaning specified in Section 9.07(b).

“Environmental Laws” shall mean any foreign, federal, state, local or municipal
law (including common law), regulation, statute, ordinance or binding order of
any Governmental Entity regulating or imposing liability or standards of conduct
relating to protection, contamination or remediation of the environment or
exposure to Hazardous Substances.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

“ERISA Affiliate” means any entity, which together with the Seller, would be
treated as a single employer under Section 4001 of ERISA or Section 414 of the
Code.

“Estimated Accrued German Pension Liability” shall have the meaning specified in
Section 12.04(a) of the Seller Disclosure Letter.

“Evaluation Material” shall mean any information concerning the Business, that
is furnished to Purchaser by or on behalf of Seller or its Subsidiaries, whether
furnished before or after the date of the Acquisition Agreement, together with
analyses, compilations, studies or other documents prepared by Purchaser or the
Confidentiality Agreement Representatives to the extent they contain or
otherwise reflect such information; provided, however, that “Evaluation
Material” does not include information that Purchaser can demonstrate (i) was or
becomes generally available to the public other than as a result of a disclosure
by Purchaser or the Confidentiality Agreement Representatives or (ii) was or
becomes available to Purchaser on a non-confidential basis from a source other
than Seller or its Subsidiaries or their advisors, provided that such source was
not known by Purchaser to be bound by any agreement with Seller or its
Subsidiaries to keep such information confidential, or otherwise prohibited from
transmitting the information to Purchaser by a contractual, legal or fiduciary
obligation.

“Excluded Assets” shall have the meaning specified in Section 2.01(c).

“Excluded Liabilities” shall have the meaning specified in Section 2.02(c).

“Excluded Marks” shall have the meaning specified in Section 2.01(c)(ix)(A).

“FAS 87” shall mean the Statement of Financial Accounting Standards No. 87.

 

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“Final Purchase Price Allocation” shall have the meaning specified in
Section 10.08(f).

“Financial Statements” shall mean the Audited Financial Statements and the
Unaudited Financial Statements.

“Financing Commitments” shall mean the commitment letter dated December 21,
2007, pursuant to which Credit Suisse, Calyon Australia Limited, BOS
International (Australia) Limited and Australia and New Zealand Banking Group
Limited have issued lending commitments to Purchaser, the proceeds of which will
be used to pay a portion of the Worldwide Purchase Price and the fees and
expenses relating to the transactions contemplated by the Transaction
Agreements.

“FIRPTA Affidavit” shall have the meaning specified in Section 14.06.

“First Tier Transferred Subsidiaries” shall mean the entities set forth in the
column labeled with the heading “First Tier Transferred Subsidiary” in Annex 2
to the Acquisition Agreement.

“Foreign Country Unit” shall mean any Country Unit other than the U.S. Country
Unit.

“Foreign Country Unit Closing” shall have the meaning specified in
Section 3.01(b).

“Foreign Transfer Agreements” shall have the meaning specified in Section 3.02.

“Former Employee” shall mean an employee whose work is or was principally
dedicated to performing services for the Business and whose employment with the
Selling Companies or the Transferred Subsidiaries terminates prior to the
applicable Closing Date.

“Former Site Environmental Liability” shall mean any obligation or liability
arising under Environmental Laws relating to facilities or properties that, as
of the Initial Closing Date, were formerly owned, leased or operated in
connection with the Business by any Transferred Subsidiary or predecessor
thereto (including in connection with any operations conducted at, or wastes
generated or transported off-site from, such facilities or properties).

“FTC” shall mean the Federal Trade Commission.

“GAAP” shall mean United States generally accepted accounting principles applied
on a consistent basis (including for the avoidance of doubt, concepts of
materiality that are part of such principles).

“German Pension Plan” shall mean the Pension Plan of Alcoa Deutschland GmbH.

 

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“Governmental Entity” shall have the meaning specified in Section 6.02(b).

“Hart Group” shall mean (i) Graeme Hart, (ii) his spouse and members of his
immediate family (including siblings, children, grandchildren and children and
grandchildren by adoption), and (iii) in the event of incompetence or death of
any of the persons described in clauses (i) and (ii) hereof, such person’s
transferee by will, estate, executor, administrator, committee or other personal
representative.

“Hazardous Substances” shall mean any petroleum or petroleum products, including
crude oil or any fraction thereof, asbestos in any form, and any other
substances, materials or wastes regulated under, or defined as “pollutant”,
“contaminant”, “hazardous”, “radioactive” or “toxic” under, any Environmental
Law.

“HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

“Income Tax” shall mean any income, franchise, gains, withholding or similar Tax
imposed on or measured by net income, profits, gains or similar items (including
U.S. Federal Income Tax) and any interest, additional amounts, additions to tax,
penalties or similar items with respect thereto.

“Indebtedness Balance” shall have the meaning specified in Section 4.03(c).

“Indemnifiable Tax” shall have the meaning specified in Section 13.07(a).

“Indemnification Minimum Claim Amount” shall have the meaning specified in
Section 13.02 of the Seller Disclosure Letter.

“indemnified party” shall have the meaning specified in Section 13.06(a).

“Initial Closing” shall have the meaning specified in Section 4.01(a).

“Initial Closing Date” shall mean the date on which the Initial Closing shall
actually occur.

“Initial Closing Purchase Price” shall mean an amount equal to the portion of
the Worldwide Purchase Price allocated to the U.S. Country Unit and any Foreign
Country Unit transferred at the Initial Closing, which shall be calculated based
on the Appraisal conducted pursuant to Section 10.08.

“Intellectual Property” shall mean all patents, patent applications, trademarks,
trademark registrations, trademark applications, servicemarks, trade names,
logos, copyrights, copyright registrations and domain names.

“Intellectual Property Assignments” shall have the meaning specified in
Section 11.03.

 

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“Intercompany Arrangement” shall have the meaning specified in
Section 10.05(c)(ii).

“Intracompany Arrangement” shall have the meaning specified in
Section 10.05(c)(i).

“Inventory” shall mean all raw materials, work in process, finished goods and
supplies, in each case owned by any of the Asset Selling Companies, primarily
used or held for use in the operation or conduct of the Business and either
(i) located at an Operating Location or (ii) previously purchased and held for
use in another facility of Seller or any of its Affiliates or held pursuant to a
consignment arrangement.

“Inventory Reserves” shall mean any calculated reserves for excess, slow-moving
or obsolete inventory at all locations; provided that (i) for the non-LIFO
locations, such reserves shall be calculated on a basis consistent with the
methodology in the Audited Financial Statements and (ii) for the LIFO locations,
such reserves shall be calculated on a basis consistent with the methodology in
the Unaudited Financial Statements.

“IRS” shall mean the United States Internal Revenue Service.

“Japanese Subsidiary” shall have the meaning specified in Section 10.15(a).

“JV Entity” shall mean Alcoa Closure Systems International (Korea) Ltd., Gulf
Closures W.L.L., Alcoa Closure Systems International Nepal Private Limited and
Multiplastics Europe Ltd.

“knowledge of Seller” shall mean the actual knowledge as of the date of the
Acquisition Agreement of the persons set forth in Section 1.01(b) of the Seller
Disclosure Letter.

“Law” shall mean any law, statute, order, ordinance, rule, regulation, judgment,
injunction, order or decree.

“Leased Property” shall have the meaning specified in Section 6.18.

“LIBOR” shall mean the London interbank offered rate for U.S. dollar deposits
for a period of three months as fixed by the British Bankers Association each
Business Day at 11:00 a.m. London time, and is determined according to the
applicable Reuters screen at 11:00 a.m. London time on the date for rate
setting. In the event that date is not a Business Day, then the next succeeding
Business Day is to be used. In the event that the Reuters screen is not
available, then LIBOR is determined according to the applicable Bloomberg screen
at 11:00 a.m. London time on the date for rate setting. If neither the Bloomberg
nor the Reuters screen is available, then the parties will determine LIBOR based
on the rate at which deposits in U.S. dollars are offered by four major banks in
the London interbank market at 11:00 a.m. London time to prime banks in the
London interbank market on the date for rate setting. The parties will request
the

 

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principal London office of each such bank to provide a quotation of its rate. If
at least two such quotations are provided, LIBOR for that rate setting date will
be the arithmetic mean of such quotations.

“Liens” shall have the meaning specified in Section 6.08(a).

“Losses” shall mean all losses, liabilities, claims, causes of action, costs or
expenses (including reasonable attorneys’ fees, accountants’ fees and costs of
investigation), whether or not arising from a third party claim.

“M&A Contract” shall mean any contract to dispose of any business, any portion
thereof or any entity and, if applicable, any indemnity agreement relating
thereto.

“Material Contracts” shall have the meaning specified in Section 6.09.

“Metal Supply Agreement” shall have the meaning specified in Section 11.02.

“Migration Services” shall have the meaning specified in Section 10.11.

“Net Cash Balance” shall have the meaning specified in Section 4.03(c).

“New LDR Rules” shall have the meaning specified in Section 14.07.

“Nonqualified Deferred Compensation Plan” shall have the meaning specified in
Section 12.02(b).

“Notice of Disagreement” shall have the meaning specified in Section 4.03(b).

“Operating Location” shall mean the location or locations set forth in the
column labeled with the heading “Operating Location” in Annex 3 to the
Acquisition Agreement.

“Other Transaction Agreements” shall mean all the Transaction Agreements other
than the Acquisition Agreement.

“Owned Property” shall have the meaning specified in Section 6.18.

“PBGC” shall have the meaning specified in Section 6.11(c).

“Pension Calculation Information” shall have the meaning set forth in
Section 12.04(b).

“Pension Interest Period” shall mean (i) with respect to each Assumed Pension
Plan other than the German Pension Plan, the period beginning on and including
the applicable Closing Date and ending on (but not including) the date that the
cash payment is made in respect of the Actual Pension Amount in accordance with
Section 12.04(c), and (ii) with respect to the German Pension Plan, the period
beginning on and

 

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including the date that the applicable purchase price adjustment payment is made
in accordance with Section 4.02(d)(ii) and ending on (but not including) the
date that the cash payment is made in respect of the Actual Pension Amount in
accordance with Section 12.04(c).

“Permits” shall mean all permits, licenses, approvals, qualifications, product
registrations, safety certifications and other similar authorizations issued by
a Governmental Entity.

“Permitted Liens” shall have the meaning specified in Section 6.08(a).

“person” shall mean any natural person, corporation, limited liability company,
partnership, joint venture, trust, business association, Governmental Entity or
other entity.

“Post-Closing Date Tax Periods” shall mean, with respect to any Transferred
Subsidiary that is part of a Country Unit, all Tax periods beginning after the
applicable Closing Date with respect to such Country Unit, and the portion of
any Straddle Tax Period beginning after such applicable Closing Date.

“Post-Signing Restructuring Action” shall have the meaning specified in
Section 7.03(a).

“Pre-Closing Date Tax Periods” shall mean, with respect to any Transferred
Subsidiary that is part of a Country Unit or any Acquired Asset with respect to
any Country Unit, all Tax periods ending on or before the applicable Closing
Date with respect to such Country Unit, and the portion of any Straddle Tax
Period ending on such applicable Closing Date.

“Pre-Closing Service” shall have the meaning specified in Section 12.01(a)(iii).

“Prohibited Business” shall have the meaning specified in Section 10.10(b)(i).

“Proposed Purchase Price Allocation” shall have the meaning specified in
Section 10.08(f).

“Purchaser” shall have the meaning specified in the introductory paragraph of
the Acquisition Agreement.

“Purchaser Actuary” shall have the meaning specified in Section 12.04(b).

“Purchaser Entities” shall have the meaning specified in Section 8.01(b).

“Purchaser 401(k) Plan” shall have the meaning specified in Section 12.02(a).

 

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“Purchaser Material Adverse Effect” shall have the meaning specified in
Section 8.02(a).

“Purchaser Welfare Plans” shall have the meaning specified in
Section 12.01(g)(i).

“Recalculated Seller SFP Payables” shall mean, as of any date with respect to
any Country Unit, an amount of Seller SFP Payables equal to the amount of
payables of the applicable Country Unit included in Seller SFP Payables that
would be outstanding if (1) such payables had not been paid under the applicable
Seller SFP and (2) the applicable Country Unit were on payment terms with each
supplier included in Seller SFP in accordance with the contractual or invoice
terms that existed prior to the supplier’s inclusion in the Seller SFP.

“Recoverable Matter” shall have the meaning specified in Section 9.08.

“Release” shall have the meaning specified in Section 101(22) of CERCLA.

“Repatriation Costs” shall have the meaning specified in Section 7.03(b).

“Representatives” shall have the meaning specified in Section 7.01(a).

“Restricted Assets” shall have the meaning specified in Section 10.01.

“Retention Period” shall have the meaning specified in Section 14.03(c).

“Retiree Welfare Retained Employee” shall mean each Transferred Employee
employed primarily in the U.S. who, immediately prior to the relevant Transfer
Time, has satisfied the eligibility criteria to receive benefits under the
Seller Retiree Welfare Plans.

“Rights and Claims” shall have the meaning specified in Section 2.01(b)(xvii).

“Scrap Metal Agreement” shall have the meaning specified in Section 11.01.

“Seller” shall have the meaning specified in the introductory paragraph of the
Acquisition Agreement.

“Seller Actuary” shall have the meaning specified in Section 12.04(b).

“Seller Benefit Plan” shall have the meaning specified in Section 6.11(a).

“Seller Disclosure Letter” shall have the meaning specified in the first
paragraph of Article VI.

“Seller 401(k) Plan” shall have the meaning specified in Section 12.02(a).

 

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“Seller Guarantees” shall have the meaning specified in Section 9.06.

“Seller Marks” shall have the meaning specified in Section 2.01(c)(ix).

“Seller Pension Plan” shall mean any Seller Benefit Plan that is a defined
benefit pension plan sponsored, maintained or contributed to by Seller or any of
its Subsidiaries for the benefit of any Covered Employee (including, without
limitation, any retirement indemnity plan, any termination indemnity plan or any
other plan to which Seller applies the FAS 87 methodology in Seller’s annual
financial statements for financial disclosure purposes).

“Seller Retiree Welfare Plans” shall have the meaning specified in
Section 12.02(f)(ii).

“Seller SFP” shall have the meaning specified in Section 7.13.

“Seller SFP Payables” shall mean, with respect to any Country Unit, any
balances, to the extent arising from the Business, which remain outstanding as
of the applicable Closing Date under the Seller SFP for the benefit of a
Transferred Subsidiary or Asset Selling Company which is part of such Country
Unit.

“Selling Companies” shall mean the Stock Selling Companies and the Asset Selling
Companies.

“Shares” shall have the meaning specified in the recitals of the Acquisition
Agreement.

“Specified Affiliate” shall mean a person (i) that is directly, or indirectly
through one or more intermediaries, Controlled by the Hart Group and (ii) of
which the Hart Group directly or indirectly owns 50% or more of any class of
equity interests.

“Stock Selling Companies” shall have the meaning specified in the recitals of
the Acquisition Agreement.

“Straddle Tax Period” shall mean, with respect to any Transferred Subsidiary
that is part of a Country Unit, any complete Tax period that includes but does
not end on the applicable Closing Date with respect to such Country Unit.

“Subsidiary” of any person shall mean any other person (i) more than 50% of
whose outstanding shares or securities representing the right to vote for the
election of directors or other managing authority of such other person are, now
or hereafter, owned or Controlled, directly or indirectly, by such first person,
but such other person shall be deemed to be a Subsidiary only so long as such
ownership or Control exists or (ii) which does not have outstanding shares or
securities with such right to vote, as may be the case in a partnership, joint
venture or unincorporated association, but more than 50% of whose ownership
interest representing the right to make the decisions for such other person is,
now or hereafter, owned or Controlled, directly or indirectly, by such first
person, but

 

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such other person shall be deemed to be a Subsidiary only so long as such
ownership or Control exists.

“Substantial Part of the Business” shall have the meaning specified in
Section 9.07(c).

“Target Working Capital” shall mean, with respect to any Country Unit, the
amount set forth opposite such Country Unit and under the heading “Target
Working Capital” in Section 1.01(a) of the Seller Disclosure Letter.

“Tax” shall mean all income, profits, franchise, gross receipts, capital, net
worth, sales, use, withholding, turnover, value added, ad valorem, registration,
general business, employment, social security, disability, occupation, real
property, personal property (tangible and intangible), stamp, transfer
(including real property transfer or gains), conveyance, severance, production,
excise and other taxes, withholdings, duties, levies, imposts, license and
registration fees and other similar charges and assessments (including any and
all fines, penalties, and additions attributable to or otherwise imposed on or
with respect to any such taxes, charges, fees, levies or other assessments, and
interest thereon) imposed by or on behalf of any Governmental Entity.

“Tax Benefit” with respect to any event or adjustment for any person shall mean
the positive excess, if any, of the Tax liability of such person without regard
to such event or adjustment over the Tax liability of such person taking into
account such event or adjustment, including the making of any indemnification
payment hereunder, with all other circumstances remaining unchanged.

“Tax Claim” shall have the meaning specified in Section 13.07(a).

“Tax Indemnified Party” shall have the meaning specified in Section 13.07(a).

“Tax Indemnitor” shall have the meaning specified in Section 13.07(a).

“Tax Referee” shall have the meaning specified in Section 14.08.

“Tax Return” shall mean any return, statement, report or form, including in each
case any amendments thereto, required to be filed with any Taxing Authority with
respect to Taxes.

“Taxing Authority” shall mean any governmental or regulatory authority, body or
instrumentality exercising any authority to impose, regulate or administer the
imposition of Taxes.

“Teamsters Pension Plan” shall have the meaning specified in Section 6.11(d).

“Tender Offer” shall have the meaning specified in Section 10.15(a).

 

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“Termination Date” shall have the meaning specified in Section 16.01(iv).

“Terms and Conditions of Employment” shall have the meaning specified in
Section 12.03(a).

“Third Party Claim” shall have the meaning specified in Section 13.06(a).

“Third Party Sale Transaction” shall have the meaning specified in
Section 9.07(d).

“Threshold” shall have the meaning specified in Section 9.07(a).

“Total Excess Cash” shall have the meaning specified in Section 7.03(b).

“Transaction Agreements” shall mean the Acquisition Agreement, the Foreign
Transfer Agreements, the Transition Services Agreement, the Metal Supply
Agreement, the Scrap Metal Agreement, the Intellectual Property Assignments and
any other agreements entered into by one or more Selling Companies, on the one
hand, and Purchaser, on the other hand, related to any of the transactions
contemplated by any of the aforementioned agreements.

“Transfer Tax” shall have the meaning specified in Section 14.05(a).

“Transfer Time” shall mean (i) in the case of each Covered Employee who is not
an Employee on Disability Leave, 12:01 a.m. on the applicable Closing Date, and
(ii) in the case of each Covered Employee who is an Employee on Disability Leave
and who accepts the offer of employment of Purchaser or its Affiliates, as
provided in Section 12.01, 12:01 a.m. on the date that such Employee on
Disability Leave actually begins active employment with Purchaser or its
Affiliates.

“Transferred Contracts” shall mean all the Assigned Contracts and all the
Contracts (other than those which have no continuing rights or unperformed
obligations) of the Transferred Subsidiaries.

“Transferred Employee” shall have the meaning specified in Section 12.01(a)(ii).

“Transferred Incentive Plan” shall have the meaning specified in
Section 12.01(d)(ii).

“Transferred Intellectual Property” shall mean all Acquired Intellectual
Property and all Intellectual Property of any Transferred Subsidiary.

“Transferred Permits” shall mean all Acquired Permits and all Permits issued to
any Transferred Subsidiary for use in the Business.

“Transferred Personnel Files” shall mean all personnel files that relate to a
Transferred Employee, other than information contained in such files to the
extent that

 

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Seller and the Selling Companies are prohibited from making such information
available as a result of applicable Laws regarding the safeguarding of data
privacy or any other legal obligation to maintain the confidentiality of such
information.

“Transferred Subsidiaries” shall mean the entities which are being transferred
to Purchaser directly or indirectly upon the Initial Closing or a Foreign
Country Unit Closing, as applicable.

“Transferred Subsidiaries’ Equity Interests” shall mean all of the authorized,
issued and outstanding capital of each Transferred Subsidiary, including with
respect to each First Tier Transferred Subsidiary, the Shares.

“Transferred Technology” shall mean all Acquired Technology and all trade
secrets, confidential information, inventions, know-how, formulae, processes,
procedures, research records, records of inventions, test information, market
surveys, marketing know-how, computer software, designs, industrial models,
product specifications, databases and intellectual property similar to any of
the foregoing (including but not limited to rights to use for and remedies
against past, present and future infringements thereof, and all tangible
embodiments thereof) of any Transferred Subsidiary.

“Transition Services Agreement” shall mean the Transition Services Agreement
executed contemporaneously with this Agreement and attached as Exhibit D hereto,
as such agreement may be amended from time to time.

“Treasury Regulations” shall mean the treasury regulations promulgated under the
Code, as amended.

“Unaudited Financial Statements” shall have the meaning specified in
Section 6.04.

“U.S. Country Unit” shall mean the Acquired Assets located in the United States
of America, the Assumed Liabilities related to the operation of the Business in
the United States of America and the Transferred Subsidiaries’ Equity Interests
of any First Tier Transferred Subsidiary which is organized in the United States
of America.

“U.S. Retained DB Plan” shall have the meaning specified in Section 12.02(d).

“U.S. Transferred Subsidiary DB Plan” shall have the meaning specified in
Section 12.02(c).

“U.S. Transferred Subsidiary Pension Trust” shall have the meaning specified in
Section 12.02(c).

“WC Minimum Claim Amount” shall have the meaning specified in Section 4.03(b) of
the Seller Disclosure Letter.

 

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“WC Threshold Amount” shall have the meaning specified in Section 4.03(b) of the
Seller Disclosure Letter.

“Workers Comp Accrual” shall mean, as of any date with respect to any Country
Unit, the reserve for Workers Comp Claims prepared in the same way as, and using
the same methodology applied, in the Audited Financial Statements.

“Workers Comp Claims” shall have the meaning specified in Section 12.01(g)(iii).

“Working Capital” shall have the meaning specified in Section 4.03(c).

“Workers’ Compensation Event” shall have the meaning specified in
Section 12.01(g)(iii).

“Worldwide Purchase Price” shall mean $2,700,000,000.

 

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ANNEX 2

Transfers of Shares by Country Unit

 

Country Unit

  

Stock Selling

Company

  

Interest in

Transferred
Subsidiary being

Transferred

  

First Tier

Transferred

Subsidiary

  

Interests held by First Tier
Transferred Subsidiary

U.S.    Alcoa Inc.    100%    IPC Inc.   

- 100% of Alcoa Kama, Inc.

- 100% of CFI Industries, Inc., which owns:

- 100% of CFI Recycling Inc.

- 100% of Plastofilm Industries, Inc., which owns:

- 8.4% of Alcoa Packaging LLC

- 100% of Crystal Thermoplastics, Inc., which owns:

- 5% of Alcoa Packaging LLC

- 100% of Ultra Pac, Inc., which owns:

- 15.44% of Reynolds Food Packaging LLC

- 23.6% of Reynolds Food Packaging LLC:

- 99.99% of Max Pack, S. de R.L. de C.V.

- 100% of Reynolds Food Packaging Canada Inc.

- 44.59% of Multiplastics (Europe) Ltd

   Reynolds Metals Company    100%    Baker’s Choice Products, Inc.   

 

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Country Unit

  

Stock Selling

Company

  

Interest in

Transferred
Subsidiary being
Transferred

  

First Tier

Transferred

Subsidiary

  

Interests held by First Tier
Transferred Subsidiary

   Reynolds Metals Company    100%    Reynolds Consumer Products, Inc.      
Reynolds Metals Company    53.44%    Reynolds Food Packaging LLC       Reynolds
Metals Company    100%    Mt. Vernon Plastics Corporation   

- 0.6% of Alcoa Packaging LLC

- 7.52% of Reynolds Food Packaging LLC

   Reynolds Metals Company    86%    Alcoa Packaging LLC       Alcoa
Domestic LLC    100%    Southern Plastics, Inc.       Alcoa Domestic LLC    100%
   Alcoa Closure Systems International, Inc.       Alcoa Securities Corporation
   100%    Alcoa Packaging Machinery, Inc.    Mexico    Reynolds Metals Company
   99%    Reynolds Metals Company de Mexico, S. de R.L. de C.V.   

- 0.01% of Max Pack, S. de R.L. de C.V.

   RMC Delaware Inc.    1%    Reynolds Metals Company de Mexico, S. de R.L. de
C.V.       Alcoa Securities Corporation    52.27%    Grupo Alcoa, S.
de R.L. de C.V.   

- 99.99% of Alcoa Servicios, S. de R.L. de C.V.

   Alcoa International Holdings Company    47.73%    Grupo Alcoa,
S. de R.L. de C.V.   

-99.99% of Alcoa CSI de Mexico en Ensenada, S. de R.L. de C.V.

-99.99% of Alcoa CSI de Mexico en Saltillo, S. de R.L. de C.V.

- 0.01% of Alcoa Servicios, S. de R.L. de C.V.

- 0.01% of Alcoa CSI de Mexico en Ensenada, S. de R.L. de C.V.

 

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Country Unit

  

Stock Selling

Company

  

Interest in

Transferred
Subsidiary being
Transferred

  

First Tier

Transferred

Subsidiary

  

Interests held by First Tier
Transferred Subsidiary

   Alcoa Securities Corporation    0.01%    Alcoa CSI de Mexico en Saltillo, S.
de R.L. de C.V.    Costa Rica    Alcoa International Holdings Company    100%   
Alcoa CSI de Centro America, S.A.    (South America, excluding Brazil)    Alcoa
Inc.    100%    Alcoa Latin American Holdings Corporation   

- 95% of Alusud Argentina SrL

- 99.31% of Alusud Embalajes Chile Ltda.

- 99.99% of Alusud Embalajes Colombia Ltda.

- 99.99% of Alusud Peru S.A.

- 100% of Alusud Venezuela S.A.

Argentina    Companhia Geral de Minas    5%    Alusud Argentina SrL    Chile   
Companhia Geral de Minas    0.69%    Alusud Embalajes Chile Ltda.    Colombia   
Companhia Geral de Minas    0.01%    Alusud Embalajes Colombia Ltda.    Peru   
Companhia Geral de Minas    0.01%    Alusud Peru S.A.    Brazil    Alcoa
Alumínio S.A.    100%    New Brazil Ltda    United Kingdom    Alcoa UK Holdings
Limited    100%    IVEX Holdings Ltd.   

- 100% of Kama Europe, Ltd.

 

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Country Unit

  

Stock Selling

Company

  

Interest in

Transferred
Subsidiary being
Transferred

  

First Tier

Transferred

Subsidiary

  

Interests held by First Tier
Transferred Subsidiary

   Alcoa Manufacturing (GB) Limited    100%    BACO Consumer Products Limited   
Spain    Alcoa Inversiones España S.L.    100%    Reynolds Food Packaging
(Spain) S.L.       Alcoa Inversiones España S.L.    100%    Alcoa CSI España,
S.L.    Germany    Alcoa Automotive GmbH    100%    Alcoa Deutschland GmbH   

- 90% of Alcoa Deutschland Real Estate GmbH & Co. KG

   Alcoa Inc.    10%    Alcoa Deutschland Real Estate GmbH & Co. KG    Hungary
   Alcoa Hungary Holding Kft.    100%    CSI-Alba Kft.    Bulgaria    Alcoa
Inversiones España S.L.    100%    Alcoa Packaging Bulgaria EOOD    Russia   
Alcoa International Holdings Company    100%    Alcoa CSI Vostok Ltd.    Egypt
   Alcoa International Holdings Company    99%    Alcoa Closure Systems
International Egypt LLC       Alcoa Closure Systems International, Inc.    1%   
Alcoa Closure Systems International Egypt LLC    Bahrain    Alcoa Inc.    49%   
Gulf Closures W.L.L.    Nepal    Alcoa International Holdings Company    76%   
Alcoa Closure Systems International Nepal Private Limited    Alcoa Closure
Systems International (Hangzhou) Co., Ltd.

 

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Country Unit

  

Stock Selling

Company

  

Interest in

Transferred
Subsidiary being
Transferred

  

First Tier

Transferred

Subsidiary

  

Interests held by First Tier
Transferred Subsidiary

China    Alcoa International Holdings Company    100%    Closure Systems
International (Hong Kong) Limited   

Alcoa Closure Systems International (Tianjin) Co., Ltd.

   Reynolds International, Inc.    100%    Reynolds Metals (Shanghai) Ltd.   
Korea    Alcoa International Holdings Company    51%    Alcoa Closure Systems
International (Korea), Ltd.    Japan    Alcoa Inc.    71%    Alcoa Closure
Systems Japan, Ltd.       Alcoa Closures Holding Company, LLC    28%    Alcoa
Closure Systems Japan, Ltd.    Philippines    Alcoa International Holdings
Company    100%    Alcoa Closure Systems International (Philippines), Inc.   

 

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ANNEX 3

Transfer of Acquired Assets and Assumed Liabilities by Country Unit

 

Country Unit

  

Asset Selling Company

  

Assets and Liabilities Being Transferred

  

Operating Location

U.S.    Reynolds Metals Company    All Acquired Assets and Assumed Liabilities
associated with the Consumer Products operations at the applicable Operating
Location    Hot Spring, Louisville and Richmond    Reynolds Metals Company   
All Acquired Assets and Assumed Liabilities associated with the Flexible
Packaging operations at the applicable Operating Location    Louisville and
Richmond Canada    Alcoa Ltd. and Alcoa-Lauralco Management Company/Compagnie de
Gestion    All Acquired Assets and Assumed Liabilities associated with the
Reynolds Food Packaging operations at the applicable Operating Location   
Rexdale    Alcoa Ltd. and Alcoa-Lauralco Management Company/Compagnie de Gestion
   All Acquired Assets and Assumed Liabilities associated with the Closure
Systems International operations at the applicable Operating Location   
Feversham United Kingdom    Alcoa Manufacturing (GB) Limited and Alcoa Closure
Systems International (UK) Limited    All Acquired Assets and Assumed
Liabilities associated with the Closure Systems International operations at the
applicable Operating Location    West Bromwich Hong Kong    Alcoa International
(Asia) Limited (Hong Kong)    All Acquired Assets and Assumed Liabilities
associated with the Closure Systems International operations    Italy    Alcoa
Trasformazioni S.r.L. (Italy)    All Acquired Assets and Assumed Liabilities
associated with the Closure Systems International operations       Alcoa Servizi
S.p.A. (Italy)    All Acquired Assets and Assumed Liabilities associated with
the Closure Systems International operations    Brazil    Reyco Ltda (Brazil)   
All Acquired Assets and Assumed Liabilities associated with the Consumer
Products operations   

 

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Country Unit

  

Asset Selling Company

  

Assets and Liabilities Being Transferred

  

Operating Location

Switzerland    Alcoa Europe S.A. - Hold Co    All Acquired Assets and Assumed
Liabilities associated with the Closure Systems International operations   
Malaysia    Pactuco Containers (Asia) Sdn. Bhd. (Malaysia)    All Acquired
Assets and Assumed Liabilities associated with the Flexible Packaging operations
  

 

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ANNEX 4

Transferred Subsidiaries

 

IPC Inc. Baker’s Choice Products, Inc. Plastofilm Industries, Inc. Alcoa Kama,
Inc. CFI Industries, Inc. CFI Recycling Inc. Crystal Thermoplastics, Inc. Ultra
Pac, Inc. Reynolds Consumer Products, Inc. Reynolds Food Packaging, LLC Mt.
Vernon Plastics Corporation Alcoa Packaging LLC Southern Plastics, Inc. Alcoa
Closure Systems International, Inc. Alcoa Packaging Machinery, Inc. Reynolds
Food Packaging Canada Inc. Max Pack, S. de R.L. de C.V. Reynolds Metals Company
de Mexico, S. de R.L. de C.V. Grupo Alcoa, S. de R.L. de C.V. Alcoa Servicios,
S. de R.L. de C.V. Alcoa CSI de Mexico en Ensenada, S. de R.L. de C.V. Alcoa CSI
de Mexico en Saltillo, S. de R.L. de C.V. Alcoa CSI de Centro America, S.A.
Alcoa Latin American Holdings Corporation Alusud Argentina SrL Alusud Embalajes
Chile Ltda. Alusud Embalajes Colombia Ltda. Alusud Peru S.A. Alusud Venezuela
S.A. IVEX Holdings Ltd. Kama Europe, Ltd. BACO Consumer Products Limited
Multiplastics (Europe) Ltd. Reynolds Food Packaging (Spain) S.L. Alcoa CSI
España, S.L. Alcoa Deutschland GmbH Alcoa Deutschland Real Estate GmbH & Co. KG
CSI-Alba Kft. Alcoa Packaging Bulgaria EOOD Alcoa CSI Vostok Ltd.

 

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Alcoa Closure Systems International Egypt LLC Gulf Closures W.L.L. Alcoa Closure
Systems International Nepal Private Limited Alcoa Closure Systems International
(Hangzhou) Co., Ltd. Alcoa Closure Systems International (Tianjin) Co., Ltd.
Reynolds Metals (Shanghai) Ltd. Alcoa Closure Systems International (Korea),
Ltd. Alcoa Closure Systems Japan, Ltd. Alcoa Closure Systems International
(Philippines), Inc. Closure Systems International (Hong Kong) Limited 9163-7660
Quebec Inc. (in process of dissolution in Quebec)

 

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ANNEX 5

Allocation Schedule

 

     

Allocation of Worldwide Purchase Price

Consumer Products division    $1,382,000,000 Flexible Packaging division   
$102,000,000 Reynolds Food Packaging division    $87,000,000 Closure Systems
International division    $1,128,000,000 Seller Covenant set forth in
Section 10.10    $1,000,000

 

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