EXECUTION COPY

 

SEPARATION AGREEMENT
 

between
 

ALCAN INC.

and

NOVELIS INC.

 

 

 

 

 

 

 

 

 

 

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TABLE OF CONTENTS

Article I - INTERPRETATION

2

 

 

1.01        
Definitions.........................................................................................................................

2

1.02        
Schedules..........................................................................................................................

2

1.03        
Exhibits.............................................................................................................................

2

1.04        
Currency...........................................................................................................................

3

 

 

Article II - THE SEPARATION

3

 

 

2.01        
Separation.........................................................................................................................

3

2.02        
Implementation..................................................................................................................

3

2.03         Transfer of Separated Assets; Assumption of Assumed
Liabilities.......................................

3

2.04         Separated
Assets...............................................................................................................

4

2.05         Deferred Separated
Assets................................................................................................

5

2.06         Excluded
Assets................................................................................................................

5

2.07        
Liabilities...........................................................................................................................

6

2.08         Disclaimer of Representations and
Warranties....................................................................

7

2.09         Third-Party Consents and Government
Approvals..............................................................

7

 

 

Article III - THE REORGANIZATION 

8

 

 

3.01        
Reorganization...................................................................................................................

8

3.02         Reorganization
Transactions...............................................................................................

8

3.03         Effects of the Reorganization
Transactions..........................................................................

8

3.04         Arcustarget
Consideration..................................................................................................

8

3.05         Termination of
Agreements................................................................................................

8

3.06         Ancillary
Agreements.........................................................................................................

9

3.07        
Resignations....................................................................................................................

10

3.08         Sole Discretion of
Alcan..................................................................................................

10

3.09        
Cooperation....................................................................................................................

10

3.10         Intercompany accounts between Alcan Group and Novelis
Group....................................

10

 

 

Article IV - THE ARRANGEMENT     

11

 

 

4.01         Plan of
Arrangement........................................................................................................

11

4.02         Actions Prior to the Effective
Date...................................................................................

11

4.03         Sole Discretion of
Alcan..................................................................................................

11

4.04        
Cooperation....................................................................................................................

12

 

 

Article V - DEFERRED SEPARATION TRANSACTIONS

12

 

 

5.01         Deferred Transfer
Assets.................................................................................................

12

5.02         Unreleased
Liabilities.......................................................................................................

13

5.03        
Consideration..................................................................................................................

14

 

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- ii -

Article VI - REPRESENTATIONS AND WARRANTIES

14

 

 

6.01         Mutual Representations and
Warranties............................................................................

14

6.02         Representations and Warranties of
Alcan.........................................................................

15

6.03         Representations and Warranties of
Novelis.......................................................................

16

 

 

Article VII - COVENANTS

17

 

 

7.01         General
Covenants..........................................................................................................

17

7.02         Covenants of
Novelis.......................................................................................................

17

 

 

Article VIII - CONDITIONS

18

8.01         Actions Prior to the Completion of the
Arrangement.........................................................

18

 

 

Article IX - MUTUAL RELEASES; INDEMNIFICATION

20

 

 

9.01         Release of Pre-Separation
Claims....................................................................................

20

9.02         Indemnification by
Novelis...............................................................................................

23

9.03         Indemnification by
Alcan..................................................................................................

23

9.04         Method of Asserting Claims
Etc.......................................................................................

23

9.05         Adjustments to
Liabilities.................................................................................................

25

9.06        
Payments.........................................................................................................................

25

9.07        
Contribution....................................................................................................................

26

9.08        
Litigation.........................................................................................................................

26

9.09         Remedies
Cumulative.......................................................................................................

27

9.10         Survival of
Indemnities.....................................................................................................

27

 

 

Article X - INSURANCE

28

 

 

10.01       Insurance
Matters............................................................................................................

28

 

 

Article XI - EXCHANGE OF INFORMATION; CONFIDENTIALITY

29

 

 

11.01       Agreement for Exchange of Information;
Archives............................................................

29

11.02       Ownership of
Information................................................................................................

30

11.03       Compensation for Providing
Information...........................................................................

30

11.04       Record
Retention.............................................................................................................

30

11.05       Other Agreements Providing for Exchange of
Information.................................................

31

11.06       Production of Witnesses; Records;
Cooperation...............................................................

31

11.07      
Confidentiality..................................................................................................................

32

11.08       Protective
Arrangements..................................................................................................

33

11.09       Disclosure of Third Party
Information...............................................................................

34

 

 

Article XII - DISPUTE RESOLUTION  

34

 

 

12.01      
Disputes..........................................................................................................................

34

12.02      
Negotiation......................................................................................................................

34

 

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- iii -

12.03      
Mediation........................................................................................................................

34

12.04      
Arbitration.......................................................................................................................

36

 

 

Article XIII - FURTHER ASSURANCES

37

 

 

13.01       Further
Assurances..........................................................................................................

37

 

 

Article XIV - CERTAIN OTHER MATTERS

38

 

 

14.01       Auditors and Audits; Annual and Quarterly Financial Statements and
Accounting..............

38

14.02       Non-Solicitation of
Employees.........................................................................................

40

14.03      
Non-Competition............................................................................................................

41

14.04       Change of Control with respect to
Novelis.......................................................................

43

 

 

Article XV - TERMINATION

47

 

 

15.01      
Termination.....................................................................................................................

47

 

 

Article XVI -
MISCELLANEOUS                                                                                        

47

 

 

16.01       Limitation of
Liability........................................................................................................

47

16.02      
Counterparts...................................................................................................................

48

16.03       Entire
Agreement.............................................................................................................

48

16.04      
Construction....................................................................................................................

48

16.05      
Signatures........................................................................................................................

49

16.06      
Assignability....................................................................................................................

49

16.07       Third Party
Beneficiaries..................................................................................................

49

16.08       Payment
Terms................................................................................................................

50

16.09       Governing
Law................................................................................................................

50

16.10      
Notices...........................................................................................................................

50

16.11      
Severability......................................................................................................................

51

16.12      
Publicity..........................................................................................................................

51

16.13       Survival of
Covenants......................................................................................................

51

16.14       Waivers of
Default...........................................................................................................

52

16.15      
Amendments...................................................................................................................

52

16.16       Controlling
Documents.....................................................................................................

52

16.17      
Language.........................................................................................................................

52

 

 

LIST OF
SCHEDULES                                                                                                                 

54

 

 

SCHEDULE 1.01 -
DEFINITIONS                                                                                              

55

 

 

LIST OF
EXHIBITS                                                                                                                      

69

 

 

 

 

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SEPARATION AGREEMENT (the "Agreement") entered into in the City of Montréal,
Province of Quebec, dated as of December 31, 2004.

BETWEEN:

ALCAN INC., a corporation organized under the Canada Business Corporations Act
("Alcan");

 

 

 

AND:

NOVELIS INC., a corporation incorporated under the Canada Business Corporations
Act ("Novelis").

RECITALS:

WHEREAS Alcan Group (as defined below) currently conducts the Alcan Businesses
(as defined below);

WHEREAS Alcan has created Arcustarget Inc. (as defined below) in order to hold
the Separated Businesses (as defined below) after giving effect to the
Reorganization (as defined below);

WHEREAS it is proposed that, pursuant to a Plan of Arrangement (as defined
below) and after giving effect to the Reorganization, inter alia,
(i) Arcustarget would become a wholly-owned subsidiary of Novelis, (ii)  the
holders of outstanding Alcan Common Shares (as defined below) would, as of the
Effective Date (as defined below), exchange their Alcan Common Shares for an
equivalent number of Alcan Class A Common Shares and Alcan Special Shares (as
defined below), (iii) the holders of outstanding Alcan Special Shares would, as
of the Effective Date, exchange their Alcan Special Shares for a specified
number of Novelis Common Shares (as defined below), and (iv) Arcustarget and
Novelis would amalgamate;

WHEREAS the Parties (as defined below) wish to set forth in this Agreement the
terms on which, and the conditions subject to which, they wish to implement the
measures described above;

WHEREAS Alcan and Novelis (1) intend that the Reorganization will (i) qualify
for Canadian income tax purposes as a reorganization governed by
paragraph 55(3)(b) of the Tax Act (as defined below) and as exchanges of shares
by Alcan Common Shareholders (as defined below) pursuant to sections 85.1 and 86
of the Tax Act, such that no gain will be realized by Alcan, Novelis or Alcan
Common Shareholders and (ii) qualify for United States federal income tax
purposes as a reorganization within the meaning of Section 368(a)(1) of the
Internal Revenue Code (as defined below), pursuant to which no gain or loss will
be recognized for United States federal income tax purposes by Alcan, Novelis,
Alcan Corporation, Alcan Aluminum Corporation or to the shareholders of Alcan
under Section 355 of the Internal Revenue Code and the related provisions
thereunder and (2) will treat and hereby adopt the Agreement as a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code;

NOW THEREFORE, in consideration of the mutual agreements, covenants and other
provisions set forth in this Agreement, the Parties hereby agree as follows:

 

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2

Article I 
INTERPRETATION

1.01     Definitions

The capitalized words and expressions and variations thereof used in this
Agreement or in its schedules, unless a clearly inconsistent meaning is required
under the context, shall have the meanings ascribed to them in Schedule 1.01 -
Definitions.

1.02     Schedules

The following schedules are attached to this Agreement and form part hereof:

Schedule 1.01 -     

Definitions

Schedule 1.01 - "PA"

Plan of Arrangement

Schedule 1.01 - "SB"

Separated Businesses

Schedule 1.01 - "NBS"

Novelis Balance Sheet

Schedule 1.01 - "SE" 

Separated Entities

Schedule 2.04(a) 

Separated Assets

Schedule 2.06(a)   

Excluded Assets

Schedule 2.07(a)  

Assumed Liabilities

Schedule 2.07(b)  

Liabilities of Separated Entities

Schedule 2.07(c)  

Retained Liabilities

Schedule 2.07(g)          

Reorganization Documents

Schedule 3.01         

Reorganization Transactions

Schedule 3.05(b)   

Agreements Not Terminated

Schedule 3.06(q)    

Ancillary Agreements

Schedule 3.10       

Intercompany Accounts

Schedule 4.02     

Actions to be taken prior to Effective Time

Schedule 9.08(a)

Litigation Transferred to Novelis

Schedule 9.08(b)  

Litigation to be Defended by Alcan at Novelis's Expense

1.03      Exhibits

             The following exhibits are attached to this Agreement and form part
hereof:

Exhibit A         

Alumina Supply Agreement

Exhibit B         

By-laws of Novelis

Exhibit C         

Certificate of Incorporation of Novelis

Exhibit D         

Employee Matters Agreement

Exhibit E          

Energy Agreement

Exhibit F          

FoilStock Supply Agreement

Exhibit G         

Foil Supply Agreements

Exhibit H         

Foil Supply and Distribution Agreement

Exhibit I           

Intellectual Property Agreements

Exhibit J          

Joint Procurement of Goods and Services Protocol

Exhibit K         

Metal Supply Agreements

Exhibit L          

Neuhausen Agreements

 

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3

Exhibit M        

Ohle Agreement

Exhibit N         

Sierre Agreements

Exhibit O         

Tax Sharing and Disaffiliation Agreement

Exhibit P          

Technical Services Agreements

Exhibit Q         

Transitional Services Agreement

Exhibit R         

Non Compete Undertaking

 

1.04     Currency

All references to currency herein are to lawful money of the United States
unless otherwise specified.

Article II -
THE SEPARATION

2.01     Separation

Alcan and Novelis agree to implement the Separation for the purpose of causing
the Separated Businesses to be transferred to Novelis Group and the Remaining
Alcan Businesses to be held by Alcan or any other member of Alcan Group as of
the Effective Time, on the terms and subject to the conditions set forth in this
Agreement. The Parties acknowledge that the Separation is intended to result in
Novelis, directly or indirectly, operating the Separated Businesses, owning the
Separated Assets and assuming the Assumed Liabilities as set forth in this
Article II.

2.02     Implementation

The Separation shall be completed in accordance with the agreed general
principles, objectives and other provisions set forth in this Article II and
shall be implemented in the following manner:

(a)        through the completion of the Reorganization, as described in
Article III;

(b)        through the completion of the Arrangement, as described in
Article IV;

(c)        through the completion from time to time following the Effective Time
of the Deferred Transactions, as described in Section 13.01(a);

(d)        through the allocation from time to time following the Effective Time
of the Deferred Transfer Assets as described in Section 5.01; and

(e)        through the performance by the Parties of all other provisions of
this Agreement.

2.03     Transfer of Separated Assets; Assumption of Assumed Liabilities

On the terms and subject to the conditions set forth in this Agreement, and in
furtherance of the Separation, with effect as of the Effective Time:

 

 

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4

(a)     Alcan agrees to cause the Separated Assets to be contributed, assigned,
transferred, conveyed and delivered, directly or indirectly, to Novelis and
Novelis agrees to accept from Alcan all of the Separated Assets and all of
Alcan's rights, title and interest in and to all Separated Assets owned,
directly or indirectly, by Alcan which, except with respect to the Deferred
Separated Assets and Unreleased Liabilities, will result in Novelis owning,
directly or indirectly, the Separated Businesses;

(b)     Novelis agrees to accept, assume and faithfully perform, discharge and
fulfill all of the Assumed Liabilities in accordance with their respective
terms; and

(c)     Novelis agrees to jointly elect with Alcan, in prescribed form and in a
timely manner, to have the provisions of subsection 85(1) of Tax Act (and any
applicable corresponding Canadian provincial provision) apply to the operations
described in Section 2.03(a); the "agreed amount" for purposes of such election
shall be equal to the cost amount, for purposes of the Tax Act, of the
Arcustarget Common Shares at the time of the transfer of such shares to Novelis.

2.04     Separated Assets

For the purposes of this Agreement, "Separated Assets" shall mean, without
duplication, the following Assets used or held for use exclusively or primarily
in the conduct of the Separated Businesses or relating exclusively or primarily
to a Separated Business or to a Separated Entity:

(a)     all Assets expressly identified in this Agreement or in any Ancillary
Agreement or in any Schedule hereto or thereto, including those listed on
Schedule 2.04(a), as Assets to be transferred to, or retained by, Novelis or any
other member of Novelis Group;

(b)     the outstanding capital stock, units or other equity interests of the
Separated Entities, as listed on Schedule 1.01 - "SE", the transfer of which
pursuant to Section 2.03 will result in Novelis owning, directly or indirectly,
all of the ownership interests in the Separated Entities  that are currently
owned directly or indirectly by Alcan;

(c)      all Assets properly reflected on the Novelis Balance Sheet
(Schedule 1.01 - "NBS"), excluding Assets disposed of by Alcan or any other
member of Alcan Group subsequent to the date of the Novelis Balance Sheet;

(d)     all Assets that have been written off, expensed or fully depreciated by
Alcan or any other member of Alcan Group that, had they not been written off,
expensed or fully depreciated, would have been reflected on the Novelis Balance
Sheet in accordance with the same accounting principles and practices as those
under which the Novelis Balance Sheet was prepared;

 

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5

(e)     all Assets acquired by Alcan or any other member of Alcan Group after
the date of the Novelis Balance Sheet and that would be reflected on the balance
sheet of Novelis as of the Effective Date (the "Novelis Opening Balance Sheet"),
if such balance sheet were prepared using the same accounting principles and
practices as those under which the Novelis Balance Sheet was prepared; and

(f)      all Assets transferred to Novelis Group pursuant to Section 13.01(a);
provided, however, that any such transfer shall take effect under
Section 13.01(a) and not under this Section 2.04.

Notwithstanding the foregoing, there shall be excluded from the definition of
Assets under this Section 2.04 Business Records to the extent they are included
in or primarily related to any Excluded Asset or Retained Liability or Remaining
Alcan Business or their transfer is prohibited by Applicable Law or pursuant to
agreements between Alcan or any other member of Alcan Group and Third Parties or
otherwise would subject Alcan or any other member of Alcan Group to liability
for such transfer.

2.05     Deferred Separated Assets

Notwithstanding anything to the contrary contained in Section 2.04 or elsewhere
in this Agreement, Separated Assets shall not include the Deferred Separated
Assets. The transfer to Novelis (or any other member of Novelis Group) of any
such Deferred Separated Asset shall only be completed at the time, in the manner
and subject to the conditions set forth in Section 5.01.

2.06     Excluded Assets

(a)     Notwithstanding anything to the contrary contained in Section 2.04 or
elsewhere in this Agreement, the following Assets of Alcan or of any other
relevant member of Alcan Group that would otherwise be included among the
Separated Assets shall not be transferred to Novelis (or any other member of
Novelis Group), shall not form part of the Separated Assets and shall remain the
exclusive property of Alcan or the relevant member of Alcan Group on and after
the Effective Time (the "Excluded Assets"):

(i)       any Asset expressly identified on Schedule 2.06(a);

(ii)      any Asset referred to in Section 2.06(b); and

(iii)     any Asset transferred to Alcan or to any other relevant member of
Alcan Group pursuant to Section 13.01(a); provided, however, that any such
transfers shall take effect under Section 13.01(a) and not under this
Section 2.06.

(b)     For greater certainty, any Asset of Alcan or any other member of Alcan
Group that is used in or relates in any manner to a Remaining Alcan Business
shall not constitute a Separated Asset unless such Asset is specifically
identified as a Separated Asset pursuant to Section 2.04.

 

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6

(c)     Notwithstanding anything to the contrary in this Agreement, Excluded
Assets shall not include the Deferred Excluded Assets. The transfer to Alcan (or
to the relevant member of Alcan Group) of any such Asset shall be completed at
the time, in the manner and subject to the conditions set forth in Section 5.01.

2.07    Liabilities

For the purposes of this Agreement, Liabilities shall be identified as "Assumed
Liabilities" or as "Retained Liabilities" under the following order of priority:

(a)     any Liability of a Separated Entity, whether arising or accruing prior
to, on or after the Effective Time and whether the facts on which it is based
occurred on, prior to or after the Effective Time and whether or not reflected
on the Novelis Balance Sheet or on the Novelis Opening Balance Sheet, is an
Assumed Liability, unless it is expressly identified in this Agreement
(including on Schedule 2.07(b) or any other Schedule) or in any Ancillary
Agreement as a Liability to be assumed or retained by Alcan or any other member
of Alcan Group, in which case it is a Retained Liability;

(b)     any Liability relating to, arising out of, or resulting from the conduct
of, a Separated Business or any Rolled Products Business (as conducted at any
time prior to, on or after the Effective Time) or relating to a Separated Asset
or a Deferred Separated Asset and whether or not arising or accruing prior to,
on or after the Effective Time and whether the facts on which it is based
occurred on, prior to or after the Effective Time and whether or not reflected
on the Novelis Balance Sheet or the Novelis Opening Balance Sheet, is an Assumed
Liability, unless it is expressly identified in this Agreement (including on
Schedule 2.07(b) or any other Schedule) or in any Ancillary Agreement as a
Liability to be assumed or retained by Alcan or any other member of Alcan Group,
in which case it is a Retained Liability;

(c)     any Liability which is expressly identified on Schedule 2.07(a) is an
Assumed Liability and any Liability which is expressly identified on
Schedule 2.07(c) is a Retained Liability ;

(d)     any Liability which is reflected or otherwise disclosed as a liability
or obligation of Novelis Group on the Novelis Balance Sheet is an Assumed
Liability;

(e)     any Liability which would be reflected or otherwise disclosed on the
Novelis Opening Balance Sheet, if such balance sheet were prepared using the
same accounting principles and practices as those under which the Novelis
Balance Sheet was prepared is an Assumed Liability;

(f)      any Liability of a Remaining Alcan Entity, whether arising or accruing
prior to, on or after the Effective Time and whether the facts on which it is
based occurred on, prior to or after the Effective Time, is a Retained
Liability, unless it is determined to be an Assumed Liability pursuant to
clauses (a), (b), (c), (d) or (e) above, in which case it is an Assumed
Liability; and

 

 

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7

(g)      any Liability of Novelis or any other member of Novelis Group under
this Agreement, any Ancillary Agreement or any Reorganization Document is an
Assumed Liability and any Liability of Alcan or any other member of Alcan Group
under this Agreement, any Ancillary Agreement or any Reorganization Document is
a Retained Liability.

2.08    Disclaimer of Representations and Warranties

(a)     Each of the Parties (on behalf of itself and each other member of its
respective Group) understands and agrees that, except as expressly set forth
herein or in any Ancillary Agreement, no Party to this Agreement, any Ancillary
Agreement or any other agreement or document contemplated by this Agreement, any
Ancillary Agreement or otherwise, makes any representation or warranty, express
or implied, regarding any of the Separated Assets, Separated Entities, Separated
Businesses, Excluded Assets, Assumed Liabilities or Retained Liabilities
including any warranty of merchantability or fitness for a particular purpose,
or any representation or warranty regarding any Consents or Governmental
Authorizations required in connection therewith or their transfer, regarding the
value or freedom from Encumbrances of, or any other matter concerning, any
Separated Asset or Excluded Asset, or regarding the absence of any defense or
right of setoff or freedom from counterclaim with respect to any claim or other
Separated Asset or Excluded Asset, including any Account Receivable of either
Party, or as to the legal sufficiency of any assignment, document or instrument
delivered hereunder to convey title to any Separated Asset or Excluded Asset
upon the execution, delivery and filing hereof or thereof.

(b)     Except as may expressly be set forth herein or in any Ancillary
Agreement, all Separated Assets and Excluded Assets are being transferred on an
"as is, where is" basis, at the own risk ("aux risques et périls") of the
respective transferees without any warranty whatsoever on the part of the
transferor, formal or implicit, legal, statutory or conventional (and, in the
case of any Real Property, by means of a quitclaim or similar form deed or
conveyance) and the respective transferees shall bear the economic and legal
risks that (i) any conveyance shall prove to be insufficient to vest in the
transferee good and marketable title, free and clear of any Encumbrance, and
(ii) any necessary Third-Party Consent or Governmental Authorization is not
obtained or that any requirement of Applicable Law or any Order is not met.

2.09    Third-Party Consents and Government Approvals

To the extent that the Separation or any transaction contemplated thereby
requires a Consent from any Third-Party (a "Third-Party Consent") or any
Governmental Authorization, the Parties will use commercially reasonable efforts
to obtain all such Third-Party Consents and Governmental Authorizations prior to
the Effective Time. If the Parties fail to obtain any such Third-Party Consent
or Governmental Authorization prior to the Effective Time, the matter shall be
dealt with in the manner set forth in Section 5.01 or 5.02.

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8

Article III -
THE REORGANIZATION

3.01     Reorganization

            The Reorganization shall be implemented on the terms and subject to
the conditions set forth in this Article III.

3.02     Reorganization Transactions

Subject to Section 3.08, Alcan agrees to cause the Reorganization Transactions
to be completed substantially in the manner described on Schedule 3.01. Unless
otherwise specified on Schedule 3.01, the Reorganization Transactions shall be
completed on or before the Reorganization Date.

3.03     Effects of the Reorganization Transactions

After giving effect to the Reorganization Transactions:

(a)     all Separated Assets, other than the equity interests in the Separated
Entities (which are addressed in (e) below), will be held by one or several
Separated Entities;

(b)      all Assumed Liabilities will have been assumed or retained by one or
several Separated Entities;

(c)      all Excluded Assets held by one or several Separated Entities will have
been transferred to, or retained by, one or more Remaining Alcan Entities;

(d)      all Retained Liabilities incurred by any Separated Entity will have
been assumed by one or several Remaining Alcan Entities; and

(e)      all of Alcan's right, title and interest in the capital or common stock
of the Separated Entities (other than the shares of the share capital of
Arcustarget) will have been transferred to Arcustarget.

3.04    Arcustarget Consideration

In consideration of the implementation of the Reorganization Transactions,
Alcan, in addition to causing Arcustarget Group (or any member thereof) to
assume the Assumed Liabilities, shall cause Arcustarget to (i) issue to Alcan,
on or prior to the Reorganization Date, such number of Arcustarget common shares
and such promissory notes as shall be necessary to complete the Reorganization
Transactions and the Arrangement and (ii) issue to one or more Subsidiaries of
Alcan as specified on Schedule 3.01 such promissory notes as shall be necessary
to complete the Reorganization Transactions.

3.05     Termination of Agreements

(a)     Subject to Section 3.05(b), Novelis and Alcan agree that all agreements,
arrangements, commitments and understandings, whether or not in writing, between
any member or members of Novelis Group, on the one hand, and any member or
members of Alcan Group, on the other hand, shall terminate without further
action being required by any party thereto, with effect as of the Effective
Time. No such terminated agreement, arrangement, commitment or understanding
(including any provision thereof which purports to survive such termination)
will be of any further force or effect as of and from the Effective Time. Alcan
and Novelis shall sign all such documents and perform all such other acts, and
they shall cause each other member of their respective Groups to sign all such
documents and perform all such other acts, as may be necessary or desirable to
implement or confirm such terminations.

 

 

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9

(b)    The provisions of Section 305(a) shall not apply to any of the following
agreements, arrangements, commitments or understandings (or to any of the
provisions thereof): (i) this Agreement and the Ancillary Agreements (and each
other agreement or instrument expressly contemplated by this Agreement or any
Ancillary Agreement to be entered into by either Party hereto or any of the
members of their respective Groups); (ii) any agreement, arrangement, commitment
or understanding listed or described or set forth on Schedule 3.05(b); (iii) any
agreement, arrangement, commitment or understanding to which any Third Party is
a party; and (iv) any other agreements, arrangements, commitments or
understandings that this Agreement or any Ancillary Agreement contemplates will
be in force beyond the Effective Date.

3.06     Ancillary Agreements

On or prior to the Effective Date, the Parties shall execute and deliver or, as
applicable, cause the appropriate members of their respective Groups to execute
and deliver, each of the following agreements (collectively, the "Ancillary
Agreements"):

(a)

the Alumina Supply Agreement;

(b)

the Employee Matters Agreement;

(c)

the Energy Agreement;

(d)

the FoilStock Supply Agreement;

(e)

the Foil Supply Agreements;

(f)

the Foil Supply and Distribution Agreement;

(g)

the Intellectual Property Agreements;

(h)

the Joint Procurement of Goods and Services Protocol;

(i)

the Metal Supply Agreements;

(j)

the Nauhausen Agreements;

 

 

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(k)

the Ohle Agreement;

(l)

the Sierre Agreements;

(m)

the Tax Sharing and Disaffiliation Agreement;

(n)

the Technical Services Agreements;

(o)

the Transitional Services Agreement;

(p)

such other agreements and instruments as may relate to or be identified in any
of the foregoing agreements; and

(q)

the agreements and instruments identified on Schedule 3.06(q).

3.07     Resignations

(a)      Alcan agrees to cause each Person who is a director or an officer of
any Separated Entity and who will not become an employee of Novelis Group (or
any member thereof) on the Effective Date to resign from such position with
effect as of the Effective Date.

(b)     Novelis agrees to cause each Person who is a director or an officer of a
Remaining Alcan Entity and who will become an employee of Novelis Group (or any
member thereof) on the Effective Date to resign from such position with effect
as of the Effective Date.

(c)     Each of Alcan and Novelis agrees to obtain all such letters of
resignation or other evidence of such resignations as may be necessary or
desirable in performing their respective obligations under this Section 3.07.

3.08    Sole Discretion of Alcan

Notwithstanding any other provision of this Article III, Alcan shall have the
sole and absolute discretion:

(a)      to determine whether to proceed with all or any part of the
Reorganization, including any Reorganization Transaction, and to determine the
timing of and any and all conditions to the completion of the Reorganization or
any part thereof; and

(b)     to amend or otherwise change, delete or supplement, from time to time,
any term or element of the Reorganization, including any Reorganization
Transaction.

3.09    Cooperation

Novelis shall cooperate with Alcan in all aspects of the Reorganization and it
shall, at Alcan's request, sign all such documents and perform all such other
acts as may be necessary or desirable to give full effect to the Reorganization;
and Novelis shall cause each other member of Novelis Group to do likewise.

 

 

 

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3.10     Intercompany Accounts and Other Adjustments

Prior to the Effective Time, Alcan shall use commercially reasonable efforts to
cause all balances related to indebtedness, including any intercompany
indebtedness, loans, guarantees, receivables, payables or other accounts between
a member of Alcan Group and a member of Novelis Group (including Arcustarget and
its Subsidiaries), other than those balances related to indebtedness otherwise
specifically provided for in this Agreement or any Ancillary Agreement
(including those described in Schedule 3.10) ("Intercompany Accounts") to be
settled, including by being contributed to capital in its discretion. To the
extent that any Intercompany Account has not been settled or contributed to
capital by the Effective Time, Novelis agrees to cause any Intercompany Account
payable by any member of Novelis Group to be satisfied in full when due.
Intercompany Accounts not contributed to capital or otherwise settled by the
Effective Time shall be dealt with in the manner set forth in Schedule 3.10. 
The Parties shall also perform such cash-balance, working capital and surplus
asset adjustments as may be required as at the Effective Time in the manner set
forth in Schedule 3.10

Article IV -
THE ARRANGEMENT

4.01     PLAN OF ARRANGEMENT

Each of Alcan and Novelis shall use commercially reasonable efforts to carry out
the Plan of Arrangement and to cause the Arrangement to become effective on
January 6, 2005, or on such later date as Alcan may determine, provided that if
the Alcan Board decides to proceed with the Arrangement, Articles of Arrangement
must be filed on or before April 28, 2005.

4.02     ACTIONS PRIOR TO THE EFFECTIVE DATE

In addition to the covenants of Alcan provided for elsewhere in this Agreement,
Alcan covenants and agrees, subject to Sections 3.08 and 4.03, that it shall
cause the actions described on Schedule 4.02 to be taken prior to the Effective
Time.

4.03     SOLE DISCRETION OF ALCAN

Notwithstanding any other provision of this Article IV, Alcan shall have the
sole and absolute discretion:

(a)      to determine whether to proceed with all or any part of the Arrangement
and all the terms of the Plan of Arrangement and to determine the timing of and
any and all conditions to the completion of the Arrangement or any part thereof,
provided that if the Alcan Board decides to proceed with the Arrangement,
Articles of Arrangement must be filed on or before April 28, 2005; and

(b)      to amend or otherwise change, delete or supplement, from time to time,
any term or element of the Plan of Arrangement.

 

 

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Additionally, notwithstanding the adoption of the Arrangement Resolution by
Alcan Shareholders, the Arrangement shall take effect only at such time as
determined by further resolution of the Alcan Board, which shall also have the
authority to revoke the Arrangement Resolution at any time prior to the issuance
of the Certificate of Arrangement without further approval of the Alcan
Shareholders.  If the Alcan Board decides to proceed with the Arrangement,
Articles of Arrangement must be filed on or before April 28, 2005.

4.04     COOPERATION

Novelis shall cooperate with Alcan in all aspects of the Arrangement and it
shall, at Alcan's request, sign all such documents and perform all such other
acts as may be necessary or desirable to carry out the Plan of Arrangement and
give full effect to the Arrangement and Novelis shall cause each other member of
Novelis Group to do likewise.

Article V -
DEFERRED SEPARATION TRANSACTIONS

5.01     DEFERRED TRANSFER ASSETS

(a)     If the transfer to, or retention by, Novelis Group (or the relevant
member thereof) of any Asset (a "Deferred Separated Asset") that would otherwise
constitute a Separated Asset or the transfer to, or retention by, Alcan Group
(or the relevant member thereof) of any Asset (a "Deferred Excluded Asset", and
together with a Deferred Separated Asset, a "Deferred Transfer Asset") that
would otherwise constitute an Excluded Asset cannot be accomplished without
giving rise to a violation of Applicable Law, or without obtaining a Third-Party
Consent or a Governmental Authorization (collectively, a "Transfer Impediment")
and any such Third-Party Consent or Governmental Authorization has not been
obtained prior to the Effective Time, then such Asset shall be dealt with in the
manner described in this Section 5.01.

(b)     Pending removal of such Transfer Impediment, the Person holding the
Deferred Transfer Asset (the "Retaining Person") shall hold such Deferred
Transfer Asset for the use and benefit, insofar as reasonably possible, of the
Party to whom the transfer of such Asset could not be made at the Effective Time
(the "Deferred Beneficiary"). The Retaining Person shall use commercially
reasonable efforts to preserve such Asset and its right, title and interest
therein and take all such other action as may reasonably be requested by the
Deferred Beneficiary (in each case, at such Deferred Beneficiary's expense) in
order to place such Deferred Beneficiary, insofar as reasonably possible, in the
same position as it would be in if such Asset had been transferred to it or
retained by it with effect as of the Effective Time and so that, subject to the
standard of care set forth above, all the benefits and burdens relating to such
Deferred Transfer Asset, including possession, use, risk of loss, potential for
gain, and dominion, control and command over such Asset, are to inure from and
after the Effective Time to such Deferred Beneficiary and the members of the
Group to which it belongs. The provisions set forth in this Section 501(b)
contain all the obligations of the Retaining Person vis-à-vis the Deferred
Beneficiary with respect to the Deferred Transfer Asset and the Retaining Person
shall not be bound vis-à-vis the Deferred Beneficiary by the obligations imposed
by the Civil Code of Quebec on an administrator charged with the full
administration of the property of others or by any analogous provision of any
other Applicable Law.

 

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(c)     The Parties shall continue on and after the Effective Time to use
commercially reasonable efforts to remove all Transfer Impediments; provided,
however, that neither Party shall be required to make any unreasonable payment
or assume any material obligations therefor. As and when any Transfer Impediment
is removed, the relevant Deferred Transfer Asset shall forthwith be transferred
to its Deferred Beneficiary at no additional cost and in a manner and on terms
consistent with the relevant provisions of this Agreement and the Ancillary
Agreements, including without limitation Section 2.08(b) hereof, and any such
transfer shall take effect as of the date of its actual transfer.

(d)     Notwithstanding the foregoing or any provision of Applicable Law, a
Retaining Person shall not be obligated, in connection with the foregoing, to
expend any money in respect of a Deferred Transfer Asset unless the necessary
funds are advanced by the Deferred Beneficiary of such Deferred Transfer Asset,
other than reasonable attorneys' fees and recording or similar fees, all of
which shall be promptly reimbursed by the Deferred Beneficiary of such Deferred
Transfer Asset.

5.02    UNRELEASED LIABILITIES

If at any time on or after the Effective Time, any member of Alcan Group shall
remain obligated to any Third Party in respect of any Assumed Liability or any
member of Novelis Group shall remain obligated to any Third Party in respect of
any Retained Liability, the following provisions shall apply. The liabilities
referred to in this Section 5.02 are hereinafter referred to as the "Unreleased
Liabilities" and the Person remaining obligated for such liability in a manner
contrary to what is intended under this Agreement is hereinafter referred to as
the "Unreleased Person."

(a)     Each Unreleased Person shall remain obligated to Third Parties for such
Unreleased Liability as provided in the relevant Contract, Applicable Law or
other source for such Unreleased Liability and shall pay and perform such
Liability as and when required, in accordance with its terms.

(b)     Alcan shall indemnify, defend and hold harmless each Novelis Indemnified
Party that is an Unreleased Person against any Liabilities arising in respect of
each Unreleased Liability of such Person; and Novelis shall indemnify, defend
and hold harmless each Alcan Indemnified Party that is an Unreleased Person
against any Liabilities arising in respect of each Unreleased Liability of such
Person. Alcan and Novelis shall take, and shall cause the members of their
respective Groups to take, such other actions as may be reasonably requested by
the other in accordance with the provisions of this Agreement in order to place
Alcan and Novelis, insofar as reasonably possible, in the same position as they
would be in if such Unreleased Liability had been fully contributed, assigned,
transferred, conveyed, and delivered to, and accepted and assumed or retained,
as applicable, by the other Party (or any relevant member of the Group to which
it belongs) with effect as of the Effective Time and so that all the benefits
and burdens relating to such Unreleased Liability, including possession, use,
risk of loss, potential for gain, and dominion, control and command over such
Unreleased Liability, are to inure from and after the Effective Time to the
member or members of the Alcan Group or the Novelis Group, as the case may be.

 

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(c)     The Parties shall continue on and after the Effective Time to use
commercially reasonable efforts to cause each Unreleased Person to be released
from each of its Unreleased Liabilities.

(d)     If, as and when it becomes possible to delegate, novate or extinguish
any Unreleased Liability in favor of an Unreleased Person, the Parties shall
promptly sign all such documents and perform all such other acts, and shall
cause each member of their respective Groups, as applicable, to sign all such
documents and perform all such other acts, as may be necessary or desirable to
give effect to such delegation, novation, extinction or other release without
payment of any further consideration by the Unreleased Person.

5.03     Consideration

For the avoidance of doubt, the transfer or assumption of any Assets or
Liabilities under this Article V shall be effected without any additional
consideration by either Party hereunder.

Article VI -
REPRESENTATIONS AND WARRANTIES

6.01     Mutual Representations and Warranties

Each Party represents and warrants to and in favour of the other Party as
follows and acknowledges that the other Party is relying upon such
representations and warranties in connection with the matters contemplated by
this Agreement:

(a)      it is duly incorporated, amalgamated or continued and is validly
existing under the CBCA and has the corporate power and authority to own its
Assets and to conduct its businesses and to perform its obligations hereunder;

(b)     the execution and delivery of this Agreement, of the Ancillary
Agreements and of the Reorganization Documents by it and the completion by it of
the transactions contemplated herein, in the Ancillary Agreements, in the
Reorganization Documents, in the Plan of Arrangement and in the Tax Rulings do
not and will not result in the breach of, or violate any term or provision of,
its articles or by-laws;

 

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15

(c)      neither it nor, in the case of Novelis, any of its Group members is
subject to any outstanding injunction, judgment or order, of any Governmental
Authority which would prevent or materially delay the transactions contemplated
by this Agreement, the Ancillary Agreements, the Reorganization Documents, the
Plan of Arrangement or the Tax Rulings; there are no civil, criminal or
administrative claims, actions, suits, demands, proceedings, hearings or
investigations pending or, to the Party's knowledge,  threatened, at law, in
equity or otherwise, in, before, or by, any Governmental Authority which (if
successful) would prevent or materially delay the consummation of the
transactions contemplated by this Agreement, the Ancillary Agreements, the
Reorganization Documents, the Plan of Arrangement or the Tax Rulings;

(d)     the facts and other information which appear in the Rulings Applications
relevant to it are accurate in all material respects and there has been no
omission to state a material fact or to provide other material information
relating to it that would be relevant to the granting of the Tax Rulings;

(e)     no dissolution, winding up, bankruptcy, liquidation or similar
proceeding has been commenced, or is pending or proposed, in respect of it,
except as contemplated by the Plan of Arrangement; and

(f)      the execution and delivery of this Agreement, of the Ancillary
Agreements and of the Reorganization Documents and the completion of the
transactions contemplated herein, in the Ancillary Agreements and in the
Reorganization Documents, have been duly approved by its board of directors, and
this Agreement, the Ancillary Agreements and the Reorganization Documents
constitute legal, valid and binding obligations of such Party enforceable
against it in accordance with its terms, subject to legislation relating to
bankruptcy, insolvency, reorganization and other similar legislation of general
application and other laws affecting the enforcement of creditors' rights
generally, to general principles of equity and limitations upon the enforcement
of indemnification for fines or penalties imposed by law and to the
discretionary power of the courts as regards specific performance or injunctive
relief.

6.02     Representations and Warranties of Alcan

Alcan represents and warrants to and in favour of Novelis as follows, and
acknowledges that Novelis is relying upon such representations and warranties in
connection with the matters contemplated by this Agreement:

(a)     the authorized capital of Alcan consists of an unlimited number of Alcan
Common Shares and an unlimited number of preference shares issuable in series of
which two series have been authorized. As of November 19, 2004, the issued and
outstanding share capital without nominal or par value of Alcan consisted of
369,739,183 Alcan Common Shares, 5,700,000 Alcan Series C Preference Shares and
3,000,000 Alcan Series E Preference Shares;

 

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(b)     no Person holds any securities convertible into Alcan Common Shares or
any other shares of Alcan or has any agreement, warrant, option or any other
right capable of becoming an agreement, warrant or option for the purchase or
other acquisition of any unissued shares of Alcan, other than options granted
under the Alcan executive share option plan;

(c)      to the best of Alcan's knowledge, there is no "specified shareholder"
of Alcan (as such term is defined for the purposes of paragraph 55(3.1)(b) of
the Tax Act); and

(d)     the Alcan Proxy Circular, does not, as of its date, contain any untrue
statement of a material fact, omit to state any fact that, if publicly
disclosed, could reasonably be expected to have a material impact on the
decision of an Alcan Shareholder to vote in favour of the Plan of Arrangement,
or omit to state any material fact necessary in order to make the statements
therein not misleading; provided, however, that Alcan makes no representations
or warranties as to any statements of material fact concerning Novelis and the
Separated Businesses (excluding, for greater certainty, facts relating to Alcan
and the Remaining Alcan Businesses) that are made in the Alcan Proxy Circular.

6.03     Representations and Warranties of Novelis

Novelis represents and warrants to and in favour of Alcan as follows, and
acknowledges that Alcan is relying upon such representations and warranties in
connection with the matters contemplated by this Agreement:

(a)     the authorized capital of Novelis consists of an unlimited number of
Novelis Common Shares, an unlimited number of Novelis Special Shares, an
unlimited number of first preferred shares and an unlimited number of second
preferred shares none of which is currently issued and outstanding;

(b)     no Person holds any securities convertible into Novelis Common Shares or
any other shares of Novelis or has any agreement, warrant, option or any other
right capable of becoming an agreement, warrant or option for the purchase or
other acquisition of any unissued shares of Novelis except as contemplated by
this Agreement or the Tax Rulings; and

(c)     the Prospectus will not, as of the date the Registration Statement is
declared effective, contain any untrue statement of a material fact, omit to
state any fact that, if publicly disclosed, could reasonably be expected to have
a material impact on the market price or value of the Novelis Common Shares, or
omit to state any material fact necessary in order to make the statements
therein not misleading; provided, however, that Novelis makes no representations
or warranties as to any statements or omissions made in respect of Alcan
(excluding the Separated Businesses, the Separated Assets and the Assumed
Liabilities) and the Remaining Alcan Businesses.

 

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Article VII -
COVENANTS

7.01     General Covenants

Each Party covenants with and in favour of the other Party that it shall,
subject, in the case of Alcan, to Sections 3.08 and 4.03:

(a)     do and perform all such acts and things, and execute and deliver all
such agreements, assurances, notices and other documents and instruments as may
reasonably be required of it to facilitate the carrying out of the intent and
purpose of this Agreement;

(b)     cooperate with and assist the other Party, both before and after the
Effective Date, in dealing with transitional matters relating to or arising from
the Reorganization, this Agreement, the Ancillary Agreements or the Arrangement;

(c)     cooperate prior to the Effective Date in applying for such amendments to
the Tax Rulings, amending the Rulings Applications and making such amendments to
this Agreement as may be necessary to obtain the Tax Rulings or to implement the
Plan of Arrangement in the manner contemplated in the Tax Rulings or as may be
desired by Alcan to enable it to carry out transactions deemed advantageous by
it for the purposes of the Separation;

(d)     cooperate in preparing, and assisting Novelis in filing with the SEC,
the Registration Statement and filing with the securities regulatory authorities
in each of the provinces and territories of Canada the Prospectus, and such
amendments or supplements thereto, as may be necessary in order to cause the
same to become and remain effective as required by Applicable Law. Novelis shall
use commercially reasonable efforts to cause the Registration Statement and the
Prospectus to become effective under the Exchange Act and the applicable
securities laws as soon as practicable but in any event prior to the Effective
Time and will file any amendments to the Registration Statement as may be
required by the SEC or such amendments to the Prospectus as may be required by
the securities regulatory authorities in each of the provinces and territories
of Canada; and

(e)     cooperate in preparing and filing all documentation (i) to effect all
necessary applications, notices, petitions, filings and other documents; and
(ii) to obtain as promptly as reasonably practicable all Consents and
Governmental Authorizations necessary or advisable to be obtained from any Third
Party and/or any Governmental Authority in order to consummate the transactions
contemplated by this Agreement (including all approvals required under
applicable antitrust laws).

7.02    Covenants of Novelis

In addition to the covenants of Novelis provided for elsewhere in this
Agreement, Novelis covenants and agrees with and in favour of Alcan that it
shall:

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(a)      use commercially reasonable efforts and do all things reasonably
required of it to cause the Reorganization to be completed;

(b)     use commercially reasonable efforts and do all things reasonably
required of it to cause the Arrangement to become effective on January 6, 2005
or such other date as Alcan may determine;

(c)     not perform any act or enter into any transaction that could interfere
or be inconsistent with the completion of the Arrangement or the grant of the
Tax Rulings or their effective application to the Arrangement except as provided
in Section 7.02(d), and cause any other member of  Novelis Group to do likewise;

(d)     perform the obligations required to be performed by it under the Plan of
Arrangement and do all such other acts and things as may be necessary or
desirable and are within its power and control in order to carry out and give
effect to the Arrangement and any transactions necessary for the effectiveness
of the Tax Rulings, including co-operating with Alcan to obtain: (i) the Interim
Order and the Final Order; (ii) the approval for the listing of the Novelis
Common Shares on the New York Stock Exchange and the Toronto Stock Exchange; and
(iii) such other consents, rulings, orders, approvals and assurances as its
counsel may advise are necessary or desirable for the implementation of the
Arrangement, including those referred to in Section 8.01; and (iv) satisfaction
of the other conditions referred to in Section 8.01; and

(e)      perform and, as applicable, cause each member of Novelis Group to
perform each of its and their respective obligations under each Ancillary
Agreement.

Article VIII -
CONDITIONS

8.01     Actions Prior to the Completion of the Arrangement

(a)     In addition to, and without in any way limiting, Alcan's rights under
Sections 3.08 and 4.03, completion of the Arrangement is subject to the
fulfillment of each of the following conditions:

(i)      the Arrangement, either without amendment or with amendments approved
by the Alcan Board, shall have been approved at the Alcan Meeting in accordance
with the Interim Order;

(ii)      the Final Order shall have been obtained in form and substance
satisfactory to Alcan;

(iii)     the Registration Statement shall have been filed with and declared
effective by the SEC and the Prospectus shall have been filed with, and shall
have received the appropriate approval by, the securities regulatory authorities
in each of the provinces and territories of Canada and no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened by the SEC
and the actions and filings with regard to securities laws described in
Sections 7.01(d) and 7.02(d) shall have been taken and, where applicable, have
become effective or been accepted;

 

 

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(iv)     the Novelis Common Shares to be distributed pursuant to the Arrangement
shall have been accepted for listing on the Toronto Stock Exchange and the New
York Stock Exchange, Inc. subject to compliance with normal listing
requirements;

(v)     the Toronto Stock Exchange, the New York Stock Exchange, Inc., and the
London, Swiss and Euronext Paris stock exchanges shall have confirmed that the
redesignated New Alcan Common Shares will continue trading as the Alcan Common
Shares following the Effective Date;

(vi)     no Order or other legal restraint or prohibition preventing the
consummation of the Reorganization, the Arrangement or any of the transactions
contemplated by this Agreement or any Ancillary Agreement shall be threatened,
pending or in effect;

(vii)    the Tax Rulings, in form and substance satisfactory to Alcan, shall
have been received and remain in full force and effect;

(viii)   all of the transactions referred to in such Tax Rulings as occurring on
or prior to the Effective Time shall have occurred, and all conditions or terms
of such Tax Rulings shall have been satisfied;

(ix)     any Consents and Governmental Authorizations necessary to complete the
Arrangement shall have been obtained and be in full force and effect;

(x)      the Alcan Board shall have approved the Arrangement and shall not have
abandoned, deferred or modified the Arrangement at any time prior to the
Effective Date;

(xi)      the Reorganization Transactions shall have been completed in a manner
satisfactory to Alcan;

(xii)    each of the Ancillary Agreements shall have been duly executed and
delivered by the parties thereto and shall be in effect;

(xiii)   the Alcan Board shall have received written opinions acceptable to the
Alcan Board from Morgan Stanley & Co. Incorporated and from Lazard Canada
Corporation that the Distribution is fair, from a financial point of view, to
the Alcan Shareholders, which opinions shall not have been withdrawn or
modified;

 

 

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(xiv)   this Agreement will not have been terminated as provided herein; and

(xv)   the Alcan Board shall have received such other opinions or reports as the
Alcan Board may reasonably request in form and substance reasonably satisfactory
to the Alcan Board as to accounting, tax and legal matters from
PricewaterhouseCoopers LLP, Ernst & Young LLP, Sullivan & Cromwell LLP and
Ogilvy Renault.

(b)     The foregoing conditions are for the sole benefit of Alcan and shall not
give rise to or create any duty on the part of Alcan or the Alcan Board to waive
or not to waive such conditions or in any way limit Alcan's right to terminate
this Agreement as set forth in Article XV or alter the consequences of any such
termination from those specified in such Article XV. Any determination made by
Alcan prior to the Arrangement concerning the satisfaction or waiver of any or
all of the conditions set forth in this Section 8.01 shall be final and
conclusive.

Article IX -
MUTUAL RELEASES; INDEMNIFICATION

9.01    Release of Pre-Separation Claims

(a)      Except as provided in Section 9.01(c), effective as of the Effective
Time, Novelis does hereby, on behalf of itself and each other member of Novelis
Group, their respective Affiliates (other than any member of Alcan Group),
successors and assigns, and all Persons who at any time prior to the Effective
Time have been stockholders (other than any member of Alcan Group), directors,
officers, agents or employees of any member of Novelis Group (in each case, in
their respective capacities as such) (the "Novelis Releasors"), unequivocally,
unconditionally and irrevocably release and discharge each of Alcan, the other
members of Alcan Group, their respective Affiliates (other than any member of
Novelis Group), successors and assigns, and all Persons who at any time prior to
the Effective Time have been stockholders, directors, officers, agents or
employees of any member of Alcan Group (in each case, in their respective
capacities as such), and their respective heirs, executors, trustees,
administrators, successors and assigns (the "Alcan Parties"), from any and all
Actions, causes of action, choses in action, cases, claims, suits, debts, dues,
damages, judgments and liabilities, of any nature whatsoever, in law, at equity
or otherwise, whether direct, derivative or otherwise, which have been asserted
against an Alcan Party or which, whether currently known or unknown, suspected
or unsuspected, fixed or contingent, and whether or not concealed or hidden, the
Novelis Releasors ever could have asserted or ever could assert, in any
capacity, whether as partner, employer, agent or otherwise, either for itself or
as an assignee, heir, executor, trustee, administrator, successor or otherwise
for or on behalf of any other Person, against the Alcan Parties, relating to any
claims or transactions or occurrences whatsoever, up to but excluding the
Effective Time, including in connection with the transactions and all activities
to implement the Separation (the "Novelis Claims"); and the Novelis Releasors
hereby unequivocally, unconditionally and irrevocably agree not to initiate
proceedings with respect to, or institute, assert or threaten to assert, any
Novelis Claim.

 

 

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(b)     Except as provided in Section 9.01(c), effective as of the Effective
Time, Alcan does hereby, on behalf of itself and each other member of Alcan
Group, their respective Affiliates (other than any member of Novelis Group),
successors and assigns, and all Persons who at any time prior to the Effective
Time have been stockholders, directors, officers, agents or employees of any
member of Alcan Group (in each case, in their respective capacities as such)
(the "Alcan Releasors"), unequivocally, unconditionally and irrevocably release
and discharge each of Novelis, the other members of Novelis Group, their
respective Affiliates (other than any member of Alcan Group), successors and
assigns, and all Persons who at any time prior to the Effective Time have been
stockholders (other than any member of Alcan Group), directors, officers, agents
or employees of any member of Novelis Group (in each case, in their respective
capacities as such), and their respective heirs, executors, trustees,
administrators, successors and assigns (the "Novelis Parties"), from any and all
Actions, causes of action, choses in action, cases, claims, suits, debts, dues,
damages, judgments and liabilities, of any nature whatsoever, in law, at equity
or otherwise, whether direct, derivative or otherwise, which have been asserted
against a Novelis Party or which, whether currently known or unknown, suspected
or unsuspected, fixed or contingent, and whether or not concealed or hidden, the
Alcan Releasors ever could have asserted or ever could assert, in any capacity,
whether as partner, employer, agent or otherwise, either for itself or as an
assignee, heir, executor, trustee, administrator, successor or otherwise for or
on behalf of any other Person, against the Novelis Parties, relating to any
claims or transactions or occurrences whatsoever, up to but excluding the
Effective Time including in connection with the transactions and all activities
to implement the Separation (the "Alcan Claims"); and the Alcan Releasors hereby
unequivocally, unconditionally and irrevocably agree not to initiate proceedings
with respect to, or institute, assert or threaten to assert, any Alcan Claim.

(c)      Nothing contained in Section 9.01(a) or 9.01(b) shall impair any right
of any Person to enforce this Agreement, any Ancillary Agreement or any
agreement, arrangement, commitment or understanding that is specified in
Section 3.05(b) or in the applicable Schedules thereto, nor shall anything
contained in those sections be interpreted as terminating as of the Effective
Time any rights under any such agreements, contracts, commitments or
understandings. For purposes of clarification, nothing contained in
Section 9.01(a) or 9.01(b) shall release any Person from:

(i)       any Liability provided in or resulting from this Agreement or any of
the Ancillary Agreements;

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(ii)      any Liability provided in or resulting from any agreement among any
members of Alcan Group or Novelis Group that is specified in Section 3.05(b) or
in the applicable Schedules thereto as not terminating as of the Effective Time
(including for greater certainty, any Liability resulting or flowing from any
breaches of such agreements that arose prior to the Effective Time), or any
other Liability specified in such Section 3.05 as not to terminate as of the
Effective Time;

(iii)     (a) with respect to Novelis, any Assumed Liability and (b) with
respect to Alcan, any Retained Liability;

(iv)    any Liability that the Parties may have with respect to indemnification
or contribution pursuant to Article V or this Article IX of this Agreement for
Third-Party Claims;

(v)     any Liability for unpaid Intercompany Accounts; or

(vi)     any Liability the release of which would result in the release of any
Person other than a Person released pursuant to this Section 9.01.

In addition, nothing contained in Section 9.01(a) shall release Alcan from
honoring its existing obligations to indemnify any director, officer or employee
of Novelis who was a director, officer or employee of Alcan or any other member
of Alcan Group on or prior to the Effective Time, to the extent that such
director, officer or employee becomes a named defendant in any litigation
involving Alcan or any other member of Alcan Group and was entitled to such
indemnification pursuant to then existing obligations.

(d)     Novelis shall not make, and shall not permit any other member of Novelis
Group to make, any claim or demand, or commence any Action asserting any claim
or demand, including any claim of contribution or any indemnification, against
Alcan or any other member of Alcan Group or any other Person released pursuant
to Section 9.01(a), with respect to any Liabilities released pursuant to
Section 9.01(a). Alcan shall not make, and shall not permit any other member of
Alcan Group to make, any claim or demand, or commence any Action asserting any
claim or demand, including any claim of contribution or any indemnification,
against Novelis or any other member of Novelis Group or any other Person
released pursuant to Section 9.01(b), with respect to any Liabilities released
pursuant to Section 9.01(b).

(e)      It is the intent of Alcan and Novelis by virtue of the provisions of
this Section 9.01 to provide for a full and complete release and discharge of
all Liabilities existing or arising from all acts and events occurring or
failing to occur or alleged to have occurred or to have failed to occur and all
conditions existing or alleged to have existed before the Effective Time,
between or among Novelis or any other member of Novelis Group, on the one hand,
and Alcan or any other member of Alcan Group, on the other hand (including any
contractual agreements or arrangements existing or alleged to have existed
between or among any such members before the Effective Time), except as
expressly set forth in Section 9.01(c). At any time, at the request of any other
Party, each Party shall, and shall cause each member of its Group to, promptly
execute and deliver releases giving full effect to the provisions hereof.

 

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9.02     Indemnification by Novelis

Except as provided in Section 9.04 and subject to Section 16.01, Novelis shall,
and shall cause the other members of Novelis Group to, solidarily indemnify,
defend and hold harmless Alcan, each other member of Alcan Group and each of
their respective directors, officers and employees, and each of the heirs,
executors, trustees, administrators, successors and assigns of any of the
foregoing (collectively, the "Alcan Indemnified Parties"), from and against any
and all Liabilities of the Alcan Indemnified Parties relating to, arising out of
or resulting from any of the following items (without duplication):

(a)      any Separated Business, any Separated Entity, any Separated Asset, any
Assumed Liability or, subject to Section 5.01, any Deferred Separated Asset; and

(b)     any breach of, or any inaccuracy in, any representation or warranty or
any breach of, or failure to perform or comply with, any covenant, undertaking
or obligation of, this Agreement or any of the Ancillary Agreements, by Novelis
or any other member of Novelis Group.

9.03    Indemnification by Alcan

Except as provided in Section 9.04 and subject to Section 16.01, Alcan shall
indemnify, defend and hold harmless Novelis, each other member of Novelis Group
and each of their respective directors, officers and employees, and each of the
heirs, executors, trustees, administrators, successors and assigns of any of the
foregoing (collectively, the "Novelis Indemnified Parties"), from and against
any and all Liabilities of the Novelis Indemnified Parties relating to, arising
out of or resulting from any of the following items (without duplication):

(a)     any Remaining Alcan Business or any Retained Liability; and

(b)     any breach of, or any inaccuracy in, any representation or warranty or
any breach of, or failure to perform or comply with, any covenant, undertaking
or obligation of, this Agreement or any of the Ancillary Agreements, by Alcan or
any other member of Alcan Group.

9.04     Method of Asserting Claims Etc.

(a)     All claims for indemnification relating to a Third Party Claim by any
indemnified party (an "Indemnified Party") hereunder shall be asserted and
resolved as set forth in this Section 9.04.

 

 

 

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(b)     In the event that any written claim or demand for which an indemnifying
party (an "Indemnifying Party") may have liability to any Indemnified Party
hereunder, is asserted against or sought to be collected from any Indemnified
Party by a Third Party (a "Third Party Claim"), such Indemnified Party shall
promptly, but in no event more than ten (10) days following such Indemnified
Party's receipt of a Third Party Claim, notify the Indemnifying Party in writing
of such Third Party Claim, the amount or the estimated amount of damages sought
thereunder to the extent then ascertainable (which estimate shall not be
conclusive of the final amount of such Third Party Claim), any other remedy
sought thereunder, any relevant time constraints relating thereto and, to the
extent practicable, any other material details pertaining thereto (a "Claim
Notice"); provided, however, that the failure to timely give a Claim Notice
shall affect the rights of an Indemnified Party hereunder only to the extent
that such failure has a material prejudicial effect on the defenses or other
rights available to the Indemnifying Party with respect to such Third Party
Claim. The Indemnifying Party shall have thirty (30) days (or such lesser number
of days set forth in the Claim Notice as may be required by court proceeding in
the event of a litigated matter) after receipt of the Claim Notice (the "Notice
Period") to notify the Indemnified Party that it desires to defend the
Indemnified Party against such Third Party Claim.

(c)     In the event that the Indemnifying Party notifies the Indemnified Party
within the Notice Period that it desires to defend the Indemnified Party against
a Third Party Claim, the Indemnifying Party shall have the right to defend the
Indemnified Party by appropriate proceedings and shall have the sole power to
direct and control such defense, with counsel reasonably satisfactory to the
Indemnified Party at its expense. Once the Indemnifying Party has duly assumed
the defense of a Third Party Claim, the Indemnified Party shall have the right,
but not the obligation, to participate in any such defense and to employ
separate counsel of its choosing. The Indemnified Party shall participate in any
such defense at its expense unless (i) the Indemnifying Party and the
Indemnified Party are both named parties to the proceedings and the Indemnified
Party shall have reasonably concluded that representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them, or (ii) the Indemnified Party assumes the defense of a
Third Party Claim after the Indemnifying Party has failed to diligently pursue a
Third Party Claim it has assumed, as provided in the first sentence of this
Section 9.04(c). The Indemnifying Party shall not, without the prior written
consent of the Indemnified Party, settle, compromise or offer to settle or
compromise any Third Party Claim on a basis that would result in (i) the
imposition of a consent order, injunction or decree that would restrict the
future activity or conduct of the Indemnified Party or any of its Affiliates,
(ii) a finding or admission of a violation of Applicable Law or violation of the
rights of any Person by the Indemnified Party or any of its Affiliates or
(iii) a finding or admission that would have an adverse effect on other claims
made or threatened against the Indemnified Party or any of its Affiliates.

 

 

 

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(d)     If the Indemnifying Party (i) elects not to defend the Indemnified Party
against a Third Party Claim, whether by not giving the Indemnified Party timely
notice of its desire to so defend or otherwise or (ii) after assuming the
defense of a Third Party Claim, fails to take reasonable steps necessary to
defend diligently such Third Party Claim within ten (10) days after receiving
written notice from the Indemnified Party to the effect that the Indemnifying
Party has so failed, the Indemnified Party shall have the right but not the
obligation to assume its own defense; it being understood that the Indemnified
Party's right to indemnification for a Third Party Claim shall not be adversely
affected by assuming the defense of such Third Party Claim. The Indemnified
Party shall not settle a Third Party Claim without the consent of the
Indemnifying Party, which consent shall not be unreasonably withheld.

(e)     The Indemnified Party and the Indemnifying Party shall cooperate in
order to ensure the proper and adequate defense of a Third Party Claim,
including by providing access to each other's relevant business records and
other documents, and employees; it being understood that the reasonable costs
and expenses of the Indemnified Party relating thereto shall be Liabilities.

(f)      The Indemnified Party and the Indemnifying Party shall use commercially
reasonable efforts to avoid production of confidential information (consistent
with Applicable Law), and to cause all communications among employees, counsel
and others representing any party to a Third Party Claim to be made so as to
preserve any applicable attorney-client or work-product privileges.

9.05    Adjustments to Liabilities

(a)     If an Indemnified Party receives any payment from an Indemnifying Party
in respect of any Liabilities and the Indemnified Party could have recovered all
or a part of such Liabilities from a Third Party (a "Potential Contributor")
based on the underlying claim or demand asserted against such Indemnifying
Party, such Indemnified Party shall, to the extent permitted by Applicable Law,
assign such of its rights to proceed against the Potential Contributor as are
necessary to permit such Indemnifying Party to recover from the Potential
Contributor the amount of such payment.

(b)    If notwithstanding Section 9.05(a) an Indemnified Party receives an
amount from a Third Party in respect of a Liability that is the subject of
indemnification hereunder after all or a portion of such Liability has been paid
by an Indemnifying Party pursuant to this Article IX, the Indemnified Party
shall promptly remit to the Indemnifying Party the excess (if any) of (i) the
amount paid by the Indemnifying Party in respect of such Liability, plus the
amount received from the Third Party in respect thereof, less (ii) the full
amount of the Liability.

(c)     An insurer who would otherwise be obligated to pay any claim shall not
be relieved of the responsibility with respect thereto or, solely by virtue of
the indemnification provisions hereof, have any subrogation rights with respect
thereto, it being expressly understood and agreed that no insurer or any other
Third Party shall be entitled to a "wind-fall" (i.e., a benefit they would not
be entitled to receive in the absence of the indemnification provisions) by
virtue of the indemnification provisions hereof.

 

 

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9.06     Payments

The Indemnifying Party shall pay all amounts payable pursuant to this Article IX
by wire transfer of immediately available funds, promptly following receipt from
an Indemnified Party of a bill, together with all accompanying reasonably
detailed back-up documentation, for a Liability that is the subject of
indemnification hereunder, unless the Indemnifying Party in good faith disputes
the Liability, in which event it shall so notify the Indemnified Party. In any
event, the Indemnifying Party shall pay to the Indemnified Party, by wire
transfer of immediately available funds, the amount of any Liability for which
it is liable hereunder no later than three (3) days following any final
determination of such Liability and the Indemnifying Party's liability therefor.
A "final determination" shall exist when (i) the parties to the dispute have
reached an agreement in writing, (ii) a court of competent jurisdiction shall
have entered a final and non-appealable order or judgment, or (iii) an
arbitration or like panel shall have rendered a final non-appealable
determination with respect to disputes the parties have agreed to submit
thereto.

9.07      Contribution

If the indemnification provided for in this Article IX shall, for any reason, be
unavailable or insufficient to hold harmless the Indemnified Party hereunder in
respect of any Liability, then each Indemnifying Party shall, in lieu of
indemnifying such Indemnified Party, contribute to the amount paid or payable by
such Indemnified Party as a result of such Liability, in such proportion as
shall be sufficient to place the Indemnified Party in the same position as if
such Indemnified Party were indemnified hereunder, the Parties intending that
their respective contributions hereunder be as close as possible to the
indemnification under Sections 9.02 and 9.03. If the contribution provided for
in the previous sentence shall, for any reason, be unavailable or insufficient
to put the Indemnified Party in the same position as if it were indemnified
under Section 9.02 or 9.03, as the case may be, then the Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Liability, in such proportion as shall be appropriate to reflect
the relative benefits received by and the relative fault of the Indemnifying
Party on the one hand and the Indemnified Party on the other hand with respect
to the matter giving rise to the Liability.

9.08     Litigation

(a)     Litigation Transferred to Novelis.   Notwithstanding anything to the
contrary in this Article IX, at the Effective Time, responsibility for
management of the litigation identified on Schedule 09.08(a) at the cost and
expense of Novelis, which Schedule may be updated by Alcan on or prior to the
Effective Time, shall be transferred  from Alcan (or any other member of Alcan
Group) to Novelis. As of the Effective Time and thereafter, Novelis shall manage
the defense of each such litigation, or prosecute same as applicable, and shall
cause the applicable other members of Novelis Group to do the same. Alcan and
the other members of Alcan Group must first obtain the prior consent of Novelis
or the relevant member of Novelis Group for any action taken subsequent to the
Effective Time in connection with the litigation identified on Schedule 9.08(a),
which consent shall not be unreasonably withheld or delayed. All other matters
relating to such litigation, including but not limited to indemnification for
such claims, shall be governed by the provisions of Sections 9.01 through 9.07,
9.09 and 9.10.

 

 

 

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27

(b)    Litigation to be Defended by Alcan at Novelis's Expense.
   Notwithstanding any contrary provisions in this Article IX, Alcan shall
defend, and shall cause the relevant other members of Alcan Group to defend, or
prosecute same as applicable, the litigation identified on Schedule 9.08(b),
which Schedule may be updated by Alcan on or prior to the Effective Time, at the
cost and expense of Novelis. Novelis shall be responsible for promptly
reimbursing, or causing its Group members to promptly reimburse, to Alcan, or
upon the request of Alcan (or any other member of Alcan Group) promptly
advancing to Alcan (or any other member of Alcan Group), any of its costs,
including attorneys' fees, incurred in defending such litigation. All other
matters relating to such litigation, including but not limited to
indemnification for such claims, shall be governed by the provisions of
Sections 9.01 through 9.07, 9.09 and 9.10.

(c)     Cooperation.    Alcan and Novelis shall cooperate, and shall cause the
other members of their respective Groups to cooperate, with each other in the
defense of any litigation covered under this Section 9.08 and afford to each
other reasonable access upon reasonable advance notice to witnesses and
information that is reasonably required to defend or prosecute such litigation
as set forth in this Article IX. The foregoing agreement to cooperate includes,
but is not limited to, an obligation to provide access to qualified assistance,
information, witnesses and documents to respond to discovery requests in
specific lawsuits. In such cases, cooperation shall be timely so that the Party
responding to discovery may meet any court-imposed deadlines. In connection with
any matter contemplated by this Section 9.08, the Parties will enter into a
mutually acceptable joint defense agreement so as to maintain to the extent
practicable any applicable attorney-client privilege or work product immunity of
any member of any Group.

(d)     No Assignment.    Nothing in this Section 9.08 shall be considered or
interpreted as an assignment by Alcan or any other member of Alcan Group of any
rights of action in contravention of Article II hereof.

9.09    Remedies Cumulative

The remedies provided in this Article IX shall be cumulative and, subject to the
provisions of Article XII, shall not preclude assertion by any Indemnified Party
of any other rights or the seeking of any and all other remedies against any
Indemnifying Party.

9.10    Survival of Indemnities

The rights and obligations of each of Alcan and Novelis and their respective
Indemnified Parties under this Article IX shall survive the distribution, sale
or other transfer by any Party of any Assets or the delegation or assignment by
it of any Liabilities.

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Article X -
INSURANCE

10.01   Insurance Matters

(a)     Novelis does hereby, for itself and each other member of Novelis Group,
agree that no member of Alcan Group or any Alcan Indemnified Party shall have
any liability whatsoever as a result of the insurance policies and practices of
Alcan and its Affiliates as in effect at any time prior to the Effective Time,
including as a result of the level or scope of any such insurance, the
creditworthiness of any insurance carrier, the terms and conditions of any
policy, the adequacy or timeliness of any notice to any insurance carrier with
respect to any claim or potential claim or otherwise.

(b)     Alcan agrees to cause the interest and rights of Novelis and the other
members of Novelis Group as of the Effective Time as insureds or beneficiaries
or in any other capacity under occurrence‑based insurance policies and programs
(and under claims‑made policies and programs to the extent a claim has been
submitted prior to the Effective Time) of Alcan or any other member of Alcan
Group in respect of periods prior to the Effective Time to survive the Effective
Time for the period for which such interests and rights would have survived
without regard to the transactions contemplated hereby to the extent permitted
by such policies, and Alcan shall continue to administer such policies and
programs on behalf of Novelis and the other members of Novelis Group, subject to
Novelis reimbursement to Alcan and the other relevant members of Alcan Group for
the actual out-of-pocket costs of such ongoing administration and the internal
costs (based on the proportion of the amount of time actually spent on such
matter to such employee's normal working time) of any employee or agent of Alcan
of any other relevant member of Alcan Group who will be required to spend at
least ten percent of their normal working time over any ten (10) Business Days
working with respect to any such matter. Any proceeds received by Alcan of any
other member of Alcan Group after the Effective Time under such policies and
programs in respect of Novelis and the other members of Novelis Group shall be
for the benefit of Novelis and the other members of Novelis Group.
Notwithstanding the foregoing, such insurance proceeds payable in respect of
Novelis and the other members of Novelis Group for periods prior to the
Effective Time shall be for the benefit of Alcan and its Affiliates (excluding,
for greater certainty, Novelis and the other members of Novelis Group) to the
extent such proceeds relate to expenditures that have been made prior to the
Effective Time.

(c)     This Agreement is not intended as an attempted assignment of any policy
of insurance or as a contract of insurance and shall not be construed to waive
any right or remedy of any member of Alcan Group in respect of any insurance
policy or any other contract or policy of insurance.

 

 

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(d)     Nothing in this Agreement shall be deemed to restrict any member of
Novelis Group from acquiring at its own expense any other insurance policy in
respect of any Liabilities or covering any period.

Article XI -
EXCHANGE OF INFORMATION; CONFIDENTIALITY

11.01    Agreement for Exchange of Information; Archives

Without limiting any rights or obligations under any Ancillary Agreement between
the Parties and/or any other member of their respective Groups relating to
confidentiality, each of Alcan and Novelis agrees to provide, and to cause its
Representatives, its Group members and its respective Group members'
Representatives to provide, to the other Group and any member thereof (a
"Requesting Party"), at any time before, on or after the Effective Date, subject
to the provisions of Section 11.04 and as soon as reasonably practicable after
written request therefor, any Information within the possession or under the
control of such Party or one of such Persons which the Requesting Party
reasonably needs (i) to comply with reporting, disclosure, filing or other
requirements imposed on the Requesting Party (including under applicable
securities laws) by a Governmental Authority having jurisdiction over the
Requesting Party, (ii) for use in any other judicial, regulatory, administrative
or other proceeding or in order to satisfy audit, accounting, claims,
regulatory, litigation of the Requesting Party or similar requirements, in each
case other than claims or allegations that one Party to this Agreement or any of
its Group members has or brings against the other Party or any of its Group
members, or (iii) subject to the foregoing clause (ii) above, to comply with its
obligations under this Agreement or any Ancillary Agreement; provided, however,
that in the event that any Party determines that any such provision of
Information could be commercially detrimental, violate any Applicable Law or
agreement, or waive any attorney‑client privilege, the Parties shall take all
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such harm or consequence. More particularly, and without
limitation to the generality of the foregoing sentence, the Parties agree that
the provisions of the Tax Sharing and Disaffiliation Agreement shall govern with
respect to the sharing of Information relating to Tax and to the extent governed
thereby, the provisions of this Article XI shall not apply.

After the Effective Time, Novelis and the other members of Novelis Group shall
have access during regular business hours (as in effect from time to time), and
upon reasonable advance notice, to the documents and objects of historic
significance that relate to the Separated Businesses, the Separated Assets or
the Separated Entities and that are located in archives retained or maintained
by Alcan or any other member of Alcan Group. Novelis and the other members of
Novelis Group may obtain copies (but not originals) of documents for bona fide
business purposes and may obtain objects for exhibition purposes for
commercially reasonable periods of time if required for bona fide business
purposes, provided that Novelis shall cause any such objects to be returned
promptly, at Novelis's expense, in the same condition in which they were
delivered to Novelis or any other member of Novelis Group and Novelis and the
other members of Novelis Group shall comply with any rules, procedures or other
requirements, and shall be subject to any restrictions (including prohibitions
on removal of specified objects), that are then applicable to Alcan or such
other member of Alcan Group. In any event, the foregoing shall not be deemed to
restrict the access of Alcan or any other member of Alcan Group to any such
documents or objects. Nothing herein shall be deemed to impose any Liability on
Alcan or any other member of Alcan Group if documents or objects referred to in
this Section 11.01 are not maintained or preserved by Alcan or any other member
of Alcan Group.

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Alternatively, Alcan, acting reasonably, may request from Novelis and any other
member of Novelis Group that they provide it, with reasonable advance notice,
with a list of the requested Information that relates to the Separated
Businesses, the Separated Assets or the Separated Entities and Alcan shall use,
and shall cause the other members of Alcan Group who are in possession of the
Information requested to use, commercially reasonable efforts to locate all
requested Information that is owned or possessed by Alcan or any of its Group
members or Representatives. Alcan will make available all such Information for
inspection by Novelis or any other relevant member of Novelis Group during
normal business hours at the place of business reasonably designated by Alcan.
Subject to such confidentiality or security obligations as Alcan or the other
relevant members of its Group may reasonably deem necessary, Novelis and the
other relevant members of Novelis Group may have all requested Information
duplicated. Alternatively, Alcan or the other relevant members of Alcan Group
may choose to deliver to Novelis, at Novelis's expense, all requested
Information in the form reasonably requested by Novelis or any other member of
Novelis Group. At Alcan's request, Novelis shall cause such Information when no
longer needed to be returned to Alcan at Novelis's expense.

11.02   Ownership of Information

Any Information owned by a Party or any of its Group members and that is
provided to a requesting party pursuant to Section 11.01 shall be deemed to
remain the property of the providing party. Unless specifically set forth herein
or in any Ancillary Agreement, nothing contained in this Agreement shall be
construed as granting or conferring rights of license or otherwise in any such
Information.

11.03  Compensation for Providing Information

The Party requesting Information agrees to reimburse the other Party for the
reasonable costs, if any, of creating, gathering and copying such Information,
to the extent that such costs are incurred for the benefit of the Requesting
Party. Except as may be otherwise specifically provided elsewhere in this
Agreement, in the Ancillary Agreements, or in any other agreement between the
Parties, such costs shall be computed in accordance with the providing Party's
standard methodology and procedures.

 

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11.04   Record Retention

To facilitate the possible exchange of Information pursuant to this Article XI
and other provisions of this Agreement after the Effective Time, the Parties
agree to use commercially reasonable efforts to retain, and to cause the members
of their respective Group to retain, all Information in their respective
possession or control on the Effective Date in accordance with the policies of
Alcan Group as in effect on the Effective Date or such other policies as may be
reasonably adopted by the appropriate Party after the Effective Date.

No Party will destroy, or permit any member of its Group to destroy, any
Information which the other Party or any member of its Group may have the right
to obtain pursuant to this Agreement prior to the fifth (5th) anniversary of the
Effective Date without first using commercially reasonable efforts to notify the
other Party of the proposed destruction and giving the other Party the
opportunity to take possession of such Information prior to such destruction.

11.05   Other Agreements Providing for Exchange of Information

The rights and obligations granted or created under this Article XI are subject
to any specific limitations, qualifications or additional provisions on the
sharing, exchange, retention or confidential treatment of Information set forth
in any Ancillary Agreement.

11.06   Production of Witnesses; Records; Cooperation

(a)      After the Effective Time, but only with respect to a Third-Party Claim,
each Party hereto shall use commercially reasonable efforts to, and shall cause
the other relevant members of its Group to use commercially reasonable efforts
to, make available to the other Party or any member of the Group to which
belongs the other Party, upon written request, its then former and current
Representatives (and the former and current Representatives of its respective
Group members) as witnesses and any books, records or other documents within its
control (or that of its respective Group members) or which it (or its respective
Group members) otherwise has the ability to make available, to the extent that
any such person (giving consideration to business demands of such
Representatives) or books, records or other documents may reasonably be required
in connection with any Action in which the Requesting Party may from time to
time be involved, regardless of whether such Action is a matter with respect to
which indemnification may be sought hereunder. The Requesting Party shall bear
all costs and expenses in connection therewith.

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(b)     If a Party, being entitled to do so under this Agreement, chooses to
defend or to seek to settle or compromise any Third-Party Claim, the other Party
shall use commercially reasonable efforts to make available to such Party, upon
written request, its then former and current Representatives and those of its
respective Group members as witnesses and any books, records or other documents
within its control (or that of its respective Group members) or which it (or its
respective Group members) otherwise has the ability to make available, to the
extent that any such person (giving consideration to business demands of such
Representatives) or books, records or other documents may reasonably be required
in connection with such defense, settlement or compromise, as the case may be,
and shall otherwise cooperate in such defense, settlement or compromise, as the
case may be.

(c)     Without limiting the foregoing, the Parties shall cooperate and consult,
and shall cause their respective Group members to cooperate and consult, to the
extent reasonably necessary with respect to any Actions (except in the case of
an Action by one Party against the other).

(d)     The obligation of the Parties to provide witnesses pursuant to this
Section 11.06 is intended to be interpreted in a manner so as to facilitate
cooperation and shall include the obligation to provide as witnesses inventors
and other employees without regard to whether the witness or the employer of the
witness could assert a possible business conflict (subject to the exception set
forth in the first sentence of Section 11.06(a)).

(e)     In connection with any matter contemplated by this Section 11.06, the
Parties will enter into, and shall cause all other relevant members of their
respective Groups to enter into, a mutually acceptable joint defense agreement
so as to maintain to the extent practicable any applicable attorney-client
privilege or work-product privileges of any member of any Group.

 

11.07  Confidentiality

(a)     Subject to Section 11.08, each of Alcan and Novelis shall hold, and
shall cause its respective Group members and its respective Affiliates (whether
now an Affiliate or hereafter becoming an Affiliate) and its Representatives to
hold, in strict confidence, with at least the same degree of care that applies
to Alcan's confidential and proprietary Information pursuant to policies in
effect as of the Effective Date, all confidential and proprietary Information
concerning the other Group (or any member thereof) that is either in its
possession (including Information in its possession prior to the date hereof) or
furnished by the other Group (or any member thereof) or by any of its Affiliates
(whether now an Affiliate or hereafter becoming an Affiliate) or their
respective Representatives at any time pursuant to this Agreement or any
Ancillary Agreement or the transactions contemplated hereby or thereby (any such
Information referred to herein as "Confidential Information"), and shall not
use, and shall cause its respective Group members, Affiliates and
Representatives not to use, any such Confidential Information other than for
such purposes as shall be expressly permitted hereunder or thereunder.
Notwithstanding the foregoing, Confidential Information shall not include
Information that is or was (i) in the public domain other than by the breach of
this Agreement or by breach of any other agreement relating to confidentiality
between or among the Parties and/or their respective Group members, their
respective Affiliates or Representatives, (ii) lawfully acquired by such Party
(or any member of the Group to which such Party belongs or any of such Party's
Affiliates) from a Third Party not bound by a confidentiality obligation, or
(iii) independently generated or developed by Persons who do not have access to,
or descriptions of, any such confidential or proprietary Information of the
other Party (or any member of the Group to which such Party belongs).

 

 

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(b)     Each Party shall maintain, and shall cause its respective Group members
to maintain, policies and procedures, and develop such further policies and
procedures as will from time to time become necessary or appropriate, to ensure
compliance with this Section 11.07(a).

(c)     Each Party agrees not to release or disclose, or permit to be released
or disclosed, any Confidential Information to any other Person, except its
Representatives who need to know such Confidential Information (who shall be
advised of their obligations hereunder with respect to such Confidential
Information), except in compliance with Section 11.08. Without limiting the
foregoing, when any Information furnished by the other Party after the Effective
Time pursuant to this Agreement or any Ancillary Agreement is no longer needed
for the purposes contemplated by this Agreement or any Ancillary Agreement, each
Party will promptly, after request of the other Party and at the election of the
Party receiving such request, return to the other Party all such Information in
a printed or otherwise tangible form (including all copies thereof and all
notes, extracts or summaries based thereon) and destroy all Information in an
electronic or otherwise intangible form and certify to the other Party that it
has destroyed such Information (and such copies thereof and such notes, extracts
or summaries based thereon). Notwithstanding the foregoing, the Parties agree
that to the extent some Information to be destroyed or returned is retained as
data or records for the purpose of business continuity planning or is otherwise
not accessible in the Ordinary Course of Business, such data or records shall be
destroyed in the Ordinary Course of Business in accordance, if applicable, with
the business continuity plan of the applicable Party.

11.08   Protective Arrangements

In the event that any Party or any member of its Group or any Affiliate of such
Party or any of their respective Representatives either determines on the advice
of its counsel that it is required to disclose any Confidential Information (the
"Disclosing Party") pursuant to Applicable Law or receives any demand under
lawful process or from any Governmental Authority to disclose or provide
Confidential Information of the other Party (or any member of the Group to which
such Party belongs), the Disclosing Party shall, to the extent permitted by
Applicable Law, promptly notify the other Party prior to the Disclosing Party
disclosing or providing such Confidential Information and shall use commercially
reasonable efforts to cooperate with the Requesting Party so that the Requesting
Party may seek any reasonable protective arrangements or other appropriate
remedy and/or waive compliance with this Section 11.08. All expenses reasonably
incurred by the Disclosing Party in seeking a protective order or other remedy
will be borne by the Requesting Party. Subject to the foregoing, the Disclosing
Party may thereafter disclose or provide such Confidential Information to the
extent (but only to the extent) required by such Applicable Law (as so advised
by legal counsel) or by lawful process or by such Governmental Authority and
shall promptly provide the Requesting Party with a copy of the Confidential
Information so disclosed, in the same form and format as disclosed, together
with a list of all Persons to whom such Confidential Information was disclosed.

 

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11.09  Disclosure of Third Party Information

Novelis acknowledges that it and the other members of Novelis Group may have in
its or their possession confidential or proprietary Information of Third Parties
that was received under confidentiality or non-disclosure agreements with such
Third Party while part of Alcan Group. Novelis will hold, and will cause the
other members of its Group and its and their respective Representatives to hold,
in strict confidence the confidential and proprietary Information of Third
Parties to which Novelis or any other member of Novelis Group has access, in
accordance with the terms of any agreements entered into prior to the Effective
Time between one or more members of Alcan Group (whether acting through, on
behalf of, or in connection with, the Separated Businesses) and such Third
Parties.

Article XII -
DISPUTE RESOLUTION

12.01   Disputes

The provisions of this Article XII shall govern all disputes, controversies or
claims (whether arising in contract, delict, tort or otherwise) between the
Parties that may arise out of, or relate to, or arise under or in connection
with, this Agreement or the transactions contemplated hereby (including all
actions taken in furtherance of the transactions contemplated hereby on or prior
to the date hereof), or the commercial or economic relationship of the Parties
relating hereto or thereto (a "Dispute").

12.02   Negotiation

The Parties hereby undertake to attempt in good faith to resolve any Dispute by
way of negotiation between senior executives who have authority to settle such
Dispute. In furtherance of the foregoing, any Party may initiate the negotiation
by way of a notice (an "Escalation Notice") demanding an in-person meeting
involving representatives of the Parties at a senior level of management of the
Parties (or if the Parties agree, of the appropriate strategic business unit or
division within such Party). A copy of any Escalation Notice shall be given to
the Chief Legal Officer of each Party (which copy shall state that it is an
Escalation Notice pursuant to this Agreement). Any agenda, location or
procedures for such negotiation may be established by the Parties from time to
time; provided, however, that the negotiation shall be completed within thirty
(30) days of the date of the Escalation Notice or within such longer period as
the Parties may agree in writing prior to the expiration of the initial
thirty-day period.

 

 

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12.03   Mediation

(a)        If the Dispute has not been resolved by negotiation as provided in
Section 12.02 within thirty (30) days of the date of the Escalation Notice or
such extended period as may be agreed by the Parties, or should the Parties fail
to meet within the said thirty-day period, the Parties shall endeavour to settle
the Dispute by mediation. The Party wishing to refer a Dispute to mediation
shall give written notice to the other (the "Mediation Notice") describing the
Dispute, requiring that the Dispute be submitted to mediation and proposing the
name of a suitable person to be appointed mediator.

(b)       If the other Party rejects the proposed mediator and the Parties are
unable to agree on a mediator within fifteen (15) days of the Mediation Notice,
then either Party may request the CPR Institute for Dispute Resolution to
appoint a mediator from the CPR Panel of Distinguished Neutrals.

(c)        The mediator shall be entitled to make recommendations to the Parties
which, unless the Parties agree otherwise, shall not be binding upon them.

(d)       The mediation shall continue until the earliest to occur of the
following: (i) the Parties reach agreement as to the resolution of the Dispute,
(ii) the mediator makes a finding that there is no possibility of resolution
through mediation, or (iii) sixty (60) days have elapsed since the appointment
of the mediator.

(e)       Each Party shall bear its own costs in connection with the mediation;
the fees and disbursements of the mediator shall be borne equally by the
Parties.

(f)        If the Parties accept any recommendation made by the mediator or
otherwise reach agreement as to the resolution of the Dispute, such agreement
shall be recorded in writing and signed by the Parties, whereupon it shall
become binding upon the Parties and have, as between them, the authority of a
final judgment or arbitral award (res judicata).

(g)       The mediation shall be confidential and neither the Parties (including
their auditors and insurers) nor their counsel and any Person necessary to the
conduct of the mediation nor the mediator or any other neutral involved in the
mediation shall disclose the existence, content (including submissions made,
positions adopted and any evidence or documents presented or exchanged), or
outcome of any mediation hereunder without the prior written consent of the
Parties, except as may be required by Applicable Law or the applicable rules of
a stock exchange.

(h)       In the event that a Dispute is referred to arbitration in accordance
with Section 12.04 below, the mediator or any other neutral involved in the
mediation shall not take part in the arbitration, whether as a witness or
otherwise, and any recommendation made by him in connection with the mediation
shall not be relied upon by either Party without the consent of the other Party
and of the mediator or neutral, and neither Party shall make use or rely upon
information supplied, positions adopted, or arguments raised, by the other Party
in the mediation.

 

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(i)        Subject to the right of the Parties to seek interim or conservatory
relief from a court of competent jurisdiction, as provided below in
Section 12.04(e), neither Party shall be entitled to refer a Dispute to
arbitration unless the dispute has first been the subject of an Escalation
Notice and been referred to mediation in accordance with Sections 12.02 and
12.03.

12.04    Arbitration

(a)     Any Dispute which has not been resolved by negotiation or mediation as
provided herein shall, upon the request of either Party, be referred to and
finally resolved by arbitration in accordance with the Arbitration Rules of the
London Court of International Arbitration ("LCIA") then in force (the "LCIA
Rules").

(b)     The arbitral tribunal shall consist of three arbitrators. The place of
arbitration shall be Montréal, Canada.  The language of the arbitration shall be
English.

(c)     The costs of the arbitration shall be specified by the arbitral tribunal
and shall be borne by the unsuccessful Party, unless the arbitral tribunal, in
its discretion, determines a different apportionment, taking all relevant
circumstances into account. The costs of arbitration include, in addition to the
costs of the arbitration as determined by the LCIA Court under Article 28.1 of
the LCIA Rules, the legal and other costs incurred by the Parties, including:
(i) the reasonable travel and other expenses of witnesses; (ii) the reasonable
fees and expenses of expert witnesses; and (iii) the costs of legal
representation and assistance, to the extent that the arbitral tribunal
determines that the amount of such costs is reasonable.

(d)     The arbitral tribunal shall endeavour to issue its award within sixty
(60) days of the last hearing of the substantive issues in dispute between the
Parties; however, the arbitral tribunal shall not lose jurisdiction if it fails
to respect this delay.  The arbitral award shall be final and binding.

(e)     For the purposes of any interim or conservatory measure that may be
sought in aid of the arbitration proceedings, including for the purpose of
enforcing the non-solicitation and non-competition provisions and other
covenants of Sections 14.02, 14.03 and 14.04, the Parties hereby irrevocably
submit to the non-exclusive jurisdiction of the competent court in the judicial
district of Montréal, Canada, and waive any right to invoke, and they hereby
agree not to invoke, any claim of forum non conveniens, inconvenient forum, or
transfer or change of venue.  Without prejudice to such interim or conservatory
remedies as may be obtained from a competent court, the arbitral tribunal shall
have full authority to grant interim or conservatory remedies and to award
damages for the failure of any Party to respect the arbitral tribunal's orders
to that effect.

 

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(f)      Neither the Parties (including their auditors and insurers) nor their
counsel and any Person necessary to the conduct of the arbitration nor the
arbitrators shall disclose the existence, content (including submissions and any
evidence or documents presented or exchanged), or outcome of any arbitration
hereunder without the prior written consent of the Parties, except as may be
required by Applicable Law or the applicable rules of a stock exchange.

Article XIII -
FURTHER ASSURANCES

13.01  Further Assurances

(a)      Except as provided in Sections 3.08 and 4.03, each Party covenants with
and in favour of the other Party as follows:

(i)      prior to, on and after the Effective Date, each Party hereto shall, and
shall cause the other relevant members of its Group to, cooperate with the other
Party, and without any further consideration, but at the expense of the
requesting Party, to execute, acknowledge and deliver, or use commercially
reasonable efforts to cause to be executed and delivered, all instruments,
assurances or documents, including instruments of conveyance, assignments and
transfers, and to make all filings with, and to obtain all consents, approvals
or authorizations of, any Governmental Authority or any other Person under any
permit, license, agreement, indenture or other instrument (including any
Consents or Governmental Authorizations), and to take all such other actions as
such Party may reasonably be requested to take by the other Party hereto (or any
member of its Group) from time to time, consistent with the terms of this
Agreement and the Ancillary Agreements, in order to give effect to the
provisions, obligations and purposes of this Agreement and the Ancillary
Agreements and the transfers of the Separated Businesses and of the Separated
Assets and the assignment and assumption of the Assumed Liabilities and the
other transactions contemplated hereby and thereby;

(ii)      To the extent that Alcan or Novelis discovers at any time during the
two (2) years following the Effective Time any Asset with respect to which there
is clear and convincing evidence that such Asset  was intended to be transferred
to Novelis or any other member of Novelis Group pursuant to this Agreement was
not so transferred at the Effective Time, Alcan shall, or shall cause the other
relevant members of its Group to promptly, assign and transfer to Novelis or any
other member of Novelis Group reasonably designated by Novelis such Asset and
all right, title and interest therein in a manner and on the terms consistent
with the relevant provisions of this Agreement, including, without limitation,
Section 2.08(b). Similarly, to the extent that Alcan or Novelis discovers at any
time during the two (2) years following the Effective Time any Asset with
respect to which there is clear and convincing evidence that such Asset  was
intended to be retained by Alcan or any other member of Alcan Group was not so
retained at the Effective Time, Novelis shall, or shall cause the other relevant
members of its Group to promptly to, assign and transfer to Alcan or any other
member of Alcan Group reasonably designated by Alcan such Asset and all right,
title and interest therein in a manner and on the terms consistent with the
relevant provisions of this Agreement, including, without limitation,
Section 2.08(b). For the avoidance of doubt, the transfer of any Assets under
this paragraph (a) shall be effected without any additional consideration by
either Party hereunder (such deferred transfers being referred to as "Deferred
Transactions").

 

 

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(b)     On or prior to the Effective Date, Alcan and Novelis, in their
respective capacities as direct and indirect parent companies of the members of
their respective Groups, shall each approve or ratify any actions of the members
of their respective Groups as may be necessary or desirable to give effect to
the transactions contemplated by this Agreement and the Ancillary Agreements.

(c)     Prior to the Effective Date, if a Party identifies any commercial or
other service that is needed to assure a smooth and orderly transition of the
businesses in connection with the consummation of the transactions contemplated
hereby, and that is not otherwise governed by the provisions of this Agreement
or any Ancillary Agreement, the Parties will cooperate in determining whether
there is a mutually acceptable arm's-length basis on which the other Party can
provide such service.

Article XIV -
CERTAIN OTHER MATTERS

14.01   Auditors and Audits; Annual and Quarterly Financial Statements and
Accounting

Each Party agrees that during the one hundred and twenty (120) days following
the Effective Time and in any event solely with respect to the preparation and
audit of each of Alcan's and Novelis' financial statements for the year ended
December 31, 2004, the printing, filing and public dissemination of such
financial statements, the audit of Alcan's internal control over financial
reporting and management's assessment thereof and management's assessment of
Alcan's disclosure controls and procedures, in each case made as of December 31,
2004:

(a)     Date of Auditors' Opinion.   Novelis shall use commercially reasonable
efforts to enable Novelis's Auditors ("Novelis's Auditors") to complete their
audit such that they will date their opinion on Novelis's audited annual
financial statements on the same date that Alcan's auditors ("Alcan's Auditors")
date their opinion on Alcan's audited annual financial statements, and to enable
Alcan to meet its timetable for the printing, filing and public dissemination of
Alcan's annual financial statements.

 

 

 

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(b)    Annual Financial Statements.   Novelis shall provide to Alcan on a timely
basis all Information that Alcan reasonably requires to meet its schedule for
the preparation, printing, filing, and public dissemination of Alcan's annual
financial statements and for management's assessment of the effectiveness of
Alcan's disclosure controls and procedures and Alcan's internal control over
financial reporting in accordance with Items 307 and 308, respectively, of
Regulation S-K and Alcan's Auditors' audit of Alcan's internal control over
financial reporting and management's assessment thereof in accordance with
Section 404 of the Sarbanes-Oxley Act of 2002 and the SEC's and Public Company
Accounting Oversight Board's rules and auditing standards thereunder (such
assessments and audit being referred to as the "2004 Internal Control Audit and
Management Assessments"). Without limiting the generality of the foregoing,
Novelis will provide all required financial and other Information with respect
to Novelis and its Subsidiaries to Novelis's Auditors in a sufficient and
reasonable time and in sufficient detail to permit Novelis's Auditors to take
all steps and perform all reviews necessary to provide sufficient assistance to
Alcan's Auditors with respect to Information to be included or contained in
Alcan's annual financial statements and to permit Alcan's Auditors and Alcan's
management to complete the 2004 Internal Control Audit and Management
Assessments. Similarly, Alcan shall provide to Novelis on a timely basis all
Information that Novelis reasonably requires to meet its schedule for the
preparation, printing, filing, and public dissemination of Novelis's annual
financial statements. Without limiting the generality of the foregoing, Alcan
will provide all required financial Information with respect to Alcan and its
Subsidiaries to Alcan's Auditors in a sufficient and reasonable time and in
sufficient detail to permit Alcan's Auditors to take all steps and perform all
reviews necessary to provide sufficient assistance to Novelis's Auditors with
respect to Information to be included or contained in Novelis's annual financial
statements.

(c)     Access to Personnel and Books and Records.   Novelis shall authorize
Novelis's Auditors to make available to Alcan's Auditors both the personnel who
performed or are performing the annual audits of Novelis and work papers related
to the annual audits of Novelis, in all cases within a reasonable time prior to
Novelis's Auditors' opinion date, so that Alcan's Auditors are able to perform
the procedures they consider necessary to take responsibility for the work of
Novelis's Auditors as it relates to Alcan's Auditors' report on Alcan's
financial statements, all within sufficient time to enable Alcan to meet its
timetable for the printing, filing and public dissemination of Alcan's annual
financial statements. Similarly, Alcan shall authorize Alcan's Auditors to make
available to Novelis's Auditors both the personnel who performed or are
performing the annual audits of Alcan and work papers related to the annual
audits of Alcan, in all cases within a reasonable time prior to Alcan's
Auditors' opinion date, so that Novelis's Auditors are able to perform the
procedures they consider necessary to take responsibility for the work of
Alcan's Auditors as it relates to Novelis's Auditors' report on Novelis's
financial statements, all within sufficient time to enable Novelis to meet its
timetable for the printing, filing and public dissemination of Novelis's annual
financial statements. Novelis shall make available to Alcan's Auditors and
Alcan's management Novelis' personnel and Novelis books and records in a
reasonable time prior to Alcan's Auditors' opinion date and Alcan's management's
assessment date so that Alcan's Auditors and Alcan's management are able to
perform the procedures they consider necessary to conduct the 2004 Internal
Control Audit and Management Assessments.

 

 

 

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(d)     Reports Generally.   Each Novelis Group member that files information
with the SEC will deliver to Alcan a substantially final draft, as soon as the
same is prepared, of the first report to be filed with the SEC that includes
Novelis's audited financial statements for the year ended December 31, 2004 (the
"Novelis Annual Report"); provided, however, that Novelis may continue to revise
such Novelis Annual Report prior to the filing thereof in order to make
corrections and non-substantive changes which corrections and changes will be
delivered to Alcan as soon as practicable; provided, further, that Alcan's and
Novelis's personnel will actively consult with each other regarding any changes
(whether or not substantive) which Novelis may consider making to the Novelis
Annual Report and related disclosures prior to the anticipated filing with the
SEC, with particular focus on any changes which would have an effect upon
Alcan's financial statements or related disclosures.

Nothing in this Section 14.01 shall require Novelis to violate any agreement
with any Third Party regarding the confidentiality of confidential and
proprietary Information relating to that Third Party or its business; provided,
however, that in the event that Novelis is required under this Section 14.01 to
disclose any such Information, such Party shall use commercially reasonable
efforts to seek to obtain such Third Party Consent to the disclosure of such
Information.

14.02   Non-Solicitation of Employees

Each Party covenants, agrees and undertakes for itself and each other member of
the Group to which such Party belongs, that, except with the written approval of
the other Party, no Party nor any member of the Group to which such Party
belongs shall, for a period of two (2) years following the Effective Date,
(a) directly or indirectly solicit for employment or recruit the employees of
the other Party or the employees of any member of the Group to which such other
Party belongs, or induce or attempt to induce any employee of the other Party or
any employee of any member of the Group to which such other Party belongs, to
terminate or cease his or her relationship with such other Party or with such
member of the Group to which such other Party belongs, or (b) enter into any
employment, consulting, independent contractor or similar arrangement with any
employee or former employee of the other Party or employee or former employee of
any member of the Group to which such other Party belongs, until one (1) year
after the effective date of the termination of such employee's employment with
the other Party or with any member of the Group to which such other Party
belongs, provided that the foregoing subclause (b) shall not apply to former
employees whose employment has been terminated (x) by the employer (with or
without cause) or (y) by mutual agreement between the employee and employer. For
greater certainty, nothing herein shall prevent Novelis or any other member of
Novelis Group from employing employees in accordance with the terms of the
Employee Matters Agreement.

 

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The prohibition on solicitation and inducement set out in the foregoing
subclause (a) shall not apply to actions taken by a Party or by any member of
the Group to which such Party belongs (i) as a result of an employee's
affirmative response to a general recruitment effort carried out through a
public solicitation or a general solicitation for employment including through
the use of a recruitment agent provided that the name of a specific employee or
group of employees is not given to such agency or (ii) as a result of an
employee's initiative.

Each Party understands and agrees that the other Party shall suffer irreparable
and substantial harm in the event that such Party breaches any of its
obligations under this Section 14.02 and that monetary damages shall be
inadequate to compensate for the breach.  Accordingly, each Party agrees that,
in the event of a breach or threatened breach by such Party of any of the
provisions of this Section 14.02, the other Party, in addition to and not in
limitation of any other rights, remedies or damages available to the other Party
under Applicable Law or in equity, shall be entitled to equitable remedies,
including provisional, interlocutory and permanent injunctive relief in order to
prevent or to restrain any such breach by such Party or by any or all of such
Party's Group members, employees, agents, representatives and any and all
Persons directly or indirectly acting for, on behalf of or with such Party.

14.03   Non-Competition

(a)     Novelis covenants, agrees and undertakes, for itself and each other
member of Novelis Group (whether now a member of Novelis Group or hereafter
becoming a member of Novelis Group), and it shall cause any such member, not to
engage, directly or indirectly, in any manner whatsoever, in any of the
following businesses or activities, either alone or in concert or in conjunction
with any other Person, in any capacity whatsoever, including as a shareholder,
partner, provider of funds, advisor of, employer, principal, mandator, agent,
mandatary, joint venturer, consultant, supplier or through any form of Business
Concern in which it has an economic interest, during the Standstill Period and
the Restricted Period:

(i)        the Aerospace Products Business; and

(ii)       the Plate Business.

(b)     In the event that Novelis refuses, neglects or fails to comply with any
of its obligations pursuant to Section 14.03(a) and such default is not remedied
within forty-five (45) days following the receipt of a notice signed by Alcan
indicating the default complained of (a "Non Compete Breach"), then Alcan may,
at its option and without prejudice to any other recourse which may be available
to Alcan under Applicable Law or in equity by reason of the occurrence of a Non
Compete Breach, terminate any or all of the following, upon notice to Novelis,
and the termination shall take effect immediately upon Alcan providing such
notice to Novelis:

(i)       any or all of the Metal Supply Agreements;

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(ii)      any or all of the intellectual property licenses granted or to be
granted to Novelis or any other member of Novelis Group or any Affiliates of
Novelis in the Intellectual Property Agreements;

(iii)     the Transitional Services Agreement with respect to any one or more
specific Services (and the corresponding Transition Service Schedules) provided
by Alcan or any other member of Alcan Group or all of the Services provided by
Alcan or any other member of Alcan Group under the Transitional Services
Agreement; and

(iv)     any or all of the Technical Services Agreements.

(c)     Novelis understands and agrees that Alcan shall suffer irreparable and
substantial harm in the event that Novelis breaches any of its obligations under
this Section 14.03 and that monetary damages shall be inadequate to compensate
for the breach. Accordingly, Novelis agrees that, in the event of a breach or
threatened breach by Novelis of any of the provisions of this Section 14.03,
Alcan, in addition to and not in limitation of any other rights, remedies or
damages available to Alcan under Applicable Law or in equity, shall be entitled
to equitable remedies, including provisional, interlocutory and permanent
injunctive relief in order to prevent or to restrain any such breach by Novelis,
or by any or all of Novelis' Group members, partners, co-venturers, employees,
agents, representatives and any and all Persons directly or indirectly acting
for, on behalf of or with Novelis.

(d)    Novelis has carefully considered the nature and extent of the restrictive
covenants set forth in this Section 14.03 and agrees that the same are
reasonable, including with respect to duration and scope of activity, in light
of the circumstances as they exist on the date upon which this Agreement is
executed, including, but not limited to, Alcan's and Novelis's material economic
interest in the transactions contemplated in this Agreement, and that the
restrictive covenants set forth in this Section 14.03 are necessary to protect
Alcan's legitimate interests. Novelis acknowledges (i) that Alcan would not have
proceeded with the Arrangement had Novelis not agreed to the restrictive
covenants set forth in this Section 14.03, and (ii) that Alcan would be
irreparably damaged if Novelis were to breach the restrictive covenants set
forth in this Section 14.03.

(e)     In the event that a court of competent jurisdiction should conclude that
any of the covenants in Section 14.03(a) are too long in duration or too broad
in scope, the Parties hereto agree that said court may reduce its duration
and/or scope to the maximum duration and/or scope it deems reasonable to protect
the interests of Alcan instead of invalidating such covenant and as of such
ruling the said covenant shall be deemed to be modified accordingly.

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(f)      Without limiting the foregoing, the Parties agree that each of the
provisions in this Section 14.03 shall be deemed to be separate and distinct and
if, for any reason whatsoever, any of the provisions in this Section 14.03 are
held null or unenforceable by the final determination of a court of competent
jurisdiction and all appeals therefrom shall have failed or the time for such
appeals shall have expired, such provision shall be deemed deleted from this
Agreement without affecting the validity or enforceability of such provision in
any other jurisdiction or any other provision hereof which shall remain in full
force and effect.

14.04   Change of Control with respect to Novelis

(a)      For the purposes of this Section 14.04, the following terms shall have
the following meanings:

(i)      "Change of Control Event" means the acquisition by any Person or group
of Persons acting jointly or in concert, other than an Affiliate of such Person
(collectively or individually, the "Third Party Acquirer"), by way of
acquisition, exchange, lease, merger, amalgamation, consolidation or otherwise,
directly or indirectly, of any of the Designated Assets or of (A) with respect
to a corporation, a direct or indirect interest in more than 30% of the voting
securities (whether outstanding or from treasury and including securities
convertible into voting securities) or of direct or indirect rights to acquire
more than 30% of any such voting securities of, (B) with respect to a trust, a
partnership or any Person other than a partnership, the power to administer and
direct the business, management or policies of such trust, partnership or
Person, directly or indirectly, in any manner (including through one or more
trusts or one or more corporations, partnerships or other Persons Controlled by
such Person) or that a Person is entitled, directly or indirectly, to over 30%
of the profits or a share of over 30% of the losses of, or (C) all or
substantially all the assets of:

a.       Novelis,

b.       any other member of Novelis Group,

c.       any Business Concern which then owns, directly or indirectly, the
Separated Businesses or a material portion of the Separated Businesses (the
"Targeted Entity"),

d.      any successor (by way of merger, amalgamation, consolidation or
otherwise) to Novelis, any other member of Novelis Group, or the Targeted
Entity, or

e.       any successor (by way of merger, amalgamation, consolidation or
otherwise) to any Person in Control of Novelis, any other member of Novelis
Group, or the Targeted Entity.

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(ii)     "Control" means (i) with respect to a corporation at a given date, that
a Person beneficially owns (within the meaning of the CBCA), directly or
indirectly, in any manner (including through one or more trusts or one or more
corporations, partnerships or other Persons Controlled by such Person) other
than as a creditor, at least a majority of the securities having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors with respect to such corporation, and (ii) with respect to a trust, a
partnership or any Person other than a partnership, that a Person is empowered
to administer and direct the business, management or policies of such trust,
partnership or Person, directly or indirectly, in any manner (including through
one or more trusts or one or more corporations, partnerships or other Persons
Controlled by such Person) or that a Person is entitled, directly or indirectly,
to over thirty percent (30%) of the profits or a share of over thirty (30%) of
the losses of such trust, partnership or Person.

(b)     Novelis covenants, agrees and undertakes, for itself and each other
member of Novelis Group, and it shall cause any such member, not to create,
incur nor undergo a Change of Control Event during the Standstill Period.

(c)     Novelis covenants, agrees and undertakes, for itself and each other
member of Novelis Group and for their respective successors by way of
acquisition, merger, amalgamation, consolidation or otherwise, that, if a Change
of Control Event occurs during the Restricted Period, it shall provide to Alcan,
no later than thirty (30) days following the occurrence of the Change of Control
Event, (x) a written undertaking of the Third Party Acquirer (including, for
greater certainty, the Third Party Acquirer's successors by way of acquisition,
merger, amalgamation, consolidation or otherwise) that the Third Party Acquirer
shall be bound by the restrictive covenants set forth in Section 14.03 during
the Restricted Period or the remainder thereof, to the same extent as if the
Third Party Acquirer (including, for greater certainty, the Third Party
Acquirer's successors by way of acquisition, merger, amalgamation, consolidation
or otherwise) had been a signatory thereto, and (y) the written undertaking of
the Third Party Acquirer (1) to cause each of its Affiliates (including Novelis
and Novelis's Affiliates) to deliver to Alcan a similar covenant to be bound by
the restrictive covenants set forth in Section 14.03 during the Restricted
Period or the remainder thereof and (2) to cause each of the Persons who
thereafter at any time during the remainder of the Restricted Period becomes an
Affiliate of the Third Party Acquirer, to deliver to Alcan within a 30-day
period, undertakings similar to the ones set forth in subclauses (x) and (y) as
if such Person were the Third Party Acquirer, the whole for the purpose of
protecting the rights and interests of Alcan pursuant to this Agreement. The
undertaking required by this Section 14.04(c) shall be substantially in the form
attached hereto as Exhibit R (the "Non Compete Undertaking").

 

 

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45

(d)     Novelis covenants, agrees and undertakes, that, in the event of the
acquisition by any Person or group of Persons acting jointly or in concert,
other than an Affiliate of such Person, by way of acquisition, merger,
amalgamation, consolidation or otherwise, of Control of any Third Party Acquirer
or of all or substantially all of the assets that were acquired in the Change of
Control Event or any of the Designated Assets (the "Novelis COC Assets") during
the Restricted Period, it shall cause any such Person or group of Persons to
provide to Alcan, no later than thirty (30) days following the acquisition of
Control of any such Third Party Acquirer or of substantially all of the Novelis
COC Assets (which, for purposes of clarity, includes any of the Designated
Assets) by any such Person or Persons, (x) a written undertaking of such Person
or Persons that they (and their respective successors, by way of acquisition,
merger, amalgamation, consolidation or otherwise) (collectively or individually,
"Third Party Acquirer Controller") shall be bound by the restrictive covenants
set forth in Section 14.03 during the Restricted Period or the remainder
thereof, to the same extent as if they had been signatories thereto, and (y) the
written undertaking of the Third Party Acquirer Controller (1) to cause each of
its Affiliates to deliver to Alcan a similar covenant to be bound by the
restrictive covenants set forth in Section 14.03 during the Restricted Period or
the remainder thereof and (2) to cause each of the Persons who thereafter at any
time during the remainder of the Restricted Period becomes an Affiliate of the
Third Party Acquirer Controller, to deliver to Alcan within a 30-day period,
undertakings similar to the ones set forth in subclauses (x) and (y) as if any
such Person were the Third Party Acquirer Controller, the whole for the purpose
of protecting the rights and interest of Alcan pursuant to this Agreement. The
undertaking required by this Section 14.04(d) shall be substantially in the form
attached hereto as Exhibit R.

(e)     If a Change of Control Event occurs at any time during the Standstill
Period or the Restricted Period and (i) the Third Party Acquirer (or the Third
Party Acquirer's successors, as applicable, by way of acquisition, merger,
amalgamation, consolidation or otherwise) or any of its Affiliates (whether now
an Affiliate or hereafter becoming an Affiliate) fails or refuses, for whatever
reason or cause, to execute and deliver to Alcan the Non Compete Undertaking
within the 30-day period provided for in Section 14.04(c), or (ii) the Third
Party Acquirer (or the Third Party Acquirer's successors, as applicable, by way
of acquisition, merger, amalgamation, consolidation or otherwise) executes and
delivers to Alcan the Non Compete Undertaking within the said 30-day period but,
at any time during the remainder of the Restricted Period, the Third Party
Acquirer (or the Third Party Acquirer's successors, as applicable, by way of
acquisition, merger, amalgamation, consolidation or otherwise) or any of its
Affiliates (whether now an Affiliate or hereafter becoming an Affiliate)
(including Novelis and Novelis's Affiliates, whether now an Affiliate or
hereafter becoming an Affiliate) refuses, neglects or fails to comply with any
of its obligations pursuant to the Non Compete Undertaking, or (iii) the Third
Party Acquirer Controller, if any (or its successors, as applicable, by way of
acquisition, merger, amalgamation, consolidation or otherwise) or any of its
Affiliates (whether now an Affiliate or hereafter becoming an Affiliate) fails
or refuses, for whatever reason or cause, to execute and deliver to Alcan the
Non Compete Undertaking within the 30-day period provided for in
Section 14.04(d), or the Third Party Acquirer Controller (or its successors, as
applicable, by way of acquisition, merger, amalgamation, consolidation or
otherwise) executes and delivers to Alcan the Non Compete Undertaking within the
said 30-day period but, at any time during the remainder of the Restricted
Period, the Third Party Acquirer Controller (or the Third Party Acquirer
Controller's successors, as applicable, by way of acquisition, merger,
amalgamation, consolidation or otherwise) or any of its Affiliates (whether now
an Affiliate or hereafter becoming an Affiliate) refuses, neglects or fails to
comply with any of its obligations pursuant to the Non Compete Undertaking
(each, a "Change of Control Non Compete Breach"), then Alcan may, at its option
and without prejudice to any other recourse which may be available to Alcan
under Applicable Law or in equity by reason of the occurrence of the foregoing,
terminate any or all of the following, upon notice to Novelis, and the
termination shall take effect immediately upon Alcan providing such notice to
Novelis:

 

 

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46

(i)       any or all of the Metal Supply Agreements;

(ii)      any or all of the intellectual property licenses granted or to be
granted to Novelis or any other member of Novelis Group in the Intellectual
Property Agreements;

(iii)     the Transitional Services Agreement with respect to any one or more
specific Services (and the corresponding Transition Service Schedules) provided
by Alcan or any other member of Alcan Group or all of the Services provided by
Alcan or any other member of Alcan Group under the Transitional Services
Agreement; and

(iv)     any or all of the Technical Services Agreements.

(f)      Novelis understands and agrees that Alcan shall suffer irreparable and
substantial harm in the event that Novelis breaches any of its obligations under
this Section 14.04 and that monetary damages shall be inadequate to compensate
for the breach. Accordingly, Novelis agrees that, in the event of a breach or
threatened breach by Novelis of any of the provisions of this Section 14.04,
Alcan, in addition to and not in limitation of any other rights, remedies or
damages available to Alcan under Applicable Law or in equity, shall be entitled
to equitable remedies, including provisional, interlocutory and permanent
injunctive relief in order to prevent or to restrain any such breach by Novelis,
or by any or all of Novelis' Group members, Affiliates, partners, co-venturers,
employees, agents, representatives and any and all Persons directly or
indirectly acting for, on behalf of or with Novelis.

(g)    Novelis consents and agrees that any dispute, controversy or claim that
may arise out of, or relate to, or arise under or in connection with this
Section 14.04 or the Non Compete Undertaking, and involving a Third Party
Acquirer, a Third Party Acquirer Controller (including, for greater certainty,
the Third Party Acquirer' and the Third Party Acquirer Controller' respective
successors by way of acquisition, merger, amalgamation, consolidation or
otherwise), or an Affiliate (whether now an Affiliate or hereafter becoming an
Affiliate) of the Third Party Acquirer or of the Third Party Acquirer
Controller, shall be referred to and finally settled in a single, multi-party
arbitration by three (3) arbitrators, as provided in and in accordance with the
provision of, the Non Compete Undertaking.

 

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47

(h)     Novelis has carefully considered the nature and extent of the provisions
set forth in this Section 14.04 and agrees that the same are reasonable in light
of the circumstances as they exist on the date upon which this Agreement is
executed, including, but not limited to, Alcan's and Novelis's material economic
interest in the transactions contemplated in this Agreement, and that the
provisions set forth in this Section 14.04 are necessary to protect Alcan's
legitimate interests. Novelis acknowledges (i) that Alcan would not have
proceeded with the Arrangement had Novelis not agreed to the provisions set
forth in this Section 14.04, and (ii) that Alcan would be irreparably damaged if
Novelis were to breach the provisions set forth in this Section 14.04.

(i)      Each of the provisions in this Section 14.04 shall be deemed to be
separate and distinct and if, for any reason whatsoever, any of the provisions
in this Section 14.04 are held null or unenforceable by the final determination
of a court of competent jurisdiction and all appeals therefrom shall have failed
or the time for such appeals shall have expired, such provision shall be deemed
deleted from this Agreement without affecting the validity or enforceability of
such provision in any other jurisdiction or any other provision hereof which
shall remain in full force and effect.

Article XV -
TERMINATION

15.01   Termination

This Agreement and all Ancillary Agreements may be terminated and the
Arrangement may be amended, supplemented, modified or abandoned at any time
prior to the Effective Date by and in the sole and absolute discretion of Alcan
without the approval of Novelis or of the Alcan shareholders. In the event of
such termination, no Party shall have any liability of any kind to the other
Party or any other Person. After the Effective Date, this Agreement may not be
terminated except by an agreement in writing signed by the Parties.

Article XVI -
MISCELLANEOUS

16.01   Limitation of Liability

In no event shall any member of Alcan Group or Novelis Group be liable to any
member of the other Group for any special, consequential, indirect, collateral,
incidental or punitive damages or lost profits or failure to realize expected
savings or other commercial or economic loss of any kind, however caused and on
any theory of liability, (including negligence) arising in any way out of this
Agreement, whether or not such Person has been advised of the possibility of any
such damages; provided, however, that the foregoing limitations shall not limit
either Party's indemnification obligations for Liabilities with respect to
Third-Party Claims as set forth in Article IX or either Party's Liabilities for
the breach or failure to perform or comply with the covenants set forth in
Sections 14.02, 14.03 and 14.04.

 

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16.02   Counterparts

This Agreement and each Ancillary Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties thereto and delivered to the other party or parties.

16.03   Entire Agreement

This Agreement, the Ancillary Agreements, and the Schedules and Exhibits hereto
and thereto and the specific agreements contemplated herein or thereby contain
the entire agreement between the Parties with respect to the subject matter
hereof and supersede all previous agreements, oral or written, negotiations,
discussions, writings, understandings, commitments and conversations with
respect to such subject matter. No agreements or understandings exist between
the Parties other than those set forth or referred to herein or therein.

16.04   Construction

In this Agreement and each of the Ancillary Agreements, unless a clear contrary
intention appears:

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

(b)     reference to any Person includes such Person's successors and assigns
but, if applicable, only if such successors and assigns are not prohibited by
this Agreement or the relevant Ancillary Agreement, and reference to a Person in
a particular capacity excludes such Person in any other capacity or
individually;

(c)      reference to any gender includes each other gender;

(d)     reference to any agreement, document or instrument means such agreement,
document or instrument as amended, modified, supplemented or restated, and in
effect from time to time in accordance with the terms thereof subject to
compliance with the requirements set forth herein or in the relevant Ancillary
Agreement;

(e)     reference to any Applicable Law means such Applicable Law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder, and
reference to any section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision;

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(f)      "herein", "hereby", "hereunder", "hereof", "hereto" and words of
similar import shall be deemed references to this Agreement or to the relevant
Ancillary Agreement as a whole and not to any particular Article, Section or
other provision hereof or thereof;

(g)       "including" (and with correlative meaning "include") means including
without limiting the generality of any description preceding such term;

(h)       the Table of Contents and headings are for convenience of reference
only and shall not affect the construction or interpretation hereof or thereof;

(i)        with respect to the determination of any period of time, "from" means
"from and including" and "to" means "to but excluding"; and

(j)        references to documents, instruments or agreements shall be deemed to
refer as well to all addenda, exhibits, schedules or amendments thereto.

16.05  Signatures

Each Party acknowledges that it and the other Party (and the other members of
their respective Groups) may execute certain of the Ancillary Agreements by
facsimile, stamp or mechanical signature. Each Party expressly adopts and
confirms each such facsimile, stamp or mechanical signature made in its
respective name (or that of the applicable member of its Group) as if it were a
manual signature, agrees that it will not assert that any such signature is not
adequate to bind such Party to the same extent as if it were signed manually and
agrees that at the reasonable request of the other Party at any time it will as
promptly as reasonably practicable cause each such Ancillary Agreement to be
manually executed (any such execution to be as of the date of the initial date
thereof).

16.06   Assignability

Except as set forth in any Ancillary Agreement, this Agreement and each
Ancillary Agreement shall be binding upon and inure to the benefit of the
Parties hereto and thereto, respectively, and their respective successors and
assigns; provided, however, that except as specifically provided in any
Ancillary Agreement, no Party hereto or thereto may assign its respective rights
or delegate its respective obligations under this Agreement or any Ancillary
Agreement without the express prior written consent of the other parties hereto
or thereto.

16.07    Third Party Beneficiaries

Except for the indemnification rights under this Agreement of any Alcan
Indemnified Party or any Novelis Indemnified Party in their respective
capacities as such and for the release under Section 9.01 of any Person provided
therein and except as specifically provided in any Ancillary Agreement, (a) the
provisions of this Agreement and each Ancillary Agreement are solely for the
benefit of the parties hereto and thereto and their respective successors and
permitted assigns and are not intended to confer upon any Person, except the
parties hereto and thereto and their respective successors and permitted
assigns, any rights or remedies hereunder and (b) there are no third-party
beneficiaries of this Agreement or any Ancillary Agreement; and neither this
Agreement nor any Ancillary Agreement shall provide any Third Party with any
remedy, claim, liability, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement or any Ancillary
Agreement.

 

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16.08   Payment Terms

(a)     Any amount to be paid or reimbursed by one Party to the other under this
Agreement shall be paid or reimbursed hereunder within thirty (30) days after
presentation of an invoice or a written demand therefor and setting forth, or
accompanied by, reasonable documentation or other reasonable explanation
supporting such amount.

(b)     Except as expressly provided to the contrary in this Agreement or in any
Ancillary Agreement, any amount not paid when due pursuant to this Agreement
(and any amount billed or otherwise invoiced or demanded and properly payable
that is not paid within thirty (30) days of such bill, invoice or other demand)
shall bear interest at a rate per annum equal to the Prime Rate plus 2%,
calculated for the actual number of days elapsed, accrued from and excluding the
date on which such payment was due up to and including the date of the actual
receipt of payment.

For the purpose of the Interest Act (Canada) and disclosure thereunder, whenever
interest to be paid hereunder is to be calculated on the basis of a year of 360
days or any other period of time that is less than a calendar year, the yearly
rate of interest to which the rate determined pursuant to such calculation is
equivalent is the rate so determined multiplied by the actual number of days in
the calendar year in which the same is to be ascertained and divided by either
360 or such other period of time, as the case may be.

16.09   Governing Law

This Agreement and, unless expressly provided therein, each Ancillary Agreement,
shall be governed by and construed and interpreted in accordance with the laws
of the Province of Quebec and the laws of Canada applicable therein,
irrespective of conflict of laws principles under Quebec law, as to all matters,
including matters of validity, construction, effect, enforceability, performance
and remedies.

16.10   Notices

All notices or other communications under this Agreement and, unless expressly
provided therein, each Ancillary Agreement, shall be in writing and shall be
deemed to be duly given when  delivered in person or successfully transmitted by
facsimile, addressed as follows:

 

 

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If to Alcan, to:

Alcan Inc.
1188 Sherbrooke Street West
Montréal, Quebec
H3A 3G2
Fax: 514-848-8115

Attention:          Chief Legal Officer

If to Novelis, to:

Novelis Inc.
Suite 3800
Royal Bank Plaza, South Tower
P.O. Box 84
200 Bay Street
Toronto, Ontario  M5J 2Z4
Fax: 416-216-3930

Attention:  Chief Executive Officer

Any Party may, by notice to the other Party as set forth herein, change the
address or fax number  to which such notices are to be given.

16.11   Severability

If any provision of this Agreement or any Ancillary Agreement or the application
thereof to any Person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof or thereof, or the application of such provision to Persons or
circumstances or in jurisdictions other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall in no
way be affected, impaired or invalidated thereby, so long as the economic or
legal substance of the transactions contemplated hereby or thereby, as the case
may be, is not affected in any manner adverse to any party hereto or thereto.
Upon such determination, the Parties shall negotiate in good faith in an effort
to agree upon such a suitable and equitable provision to effect the original
intent of the Parties.

16.12   Publicity

Prior to the Effective Date, Alcan shall be responsible for issuing any press
releases or otherwise making public statements with respect to the
Reorganization, the Arrangement or any of the other transactions contemplated
hereby and Novelis shall not make such statements without the prior written
consent of Alcan. Prior to the Effective Date, Alcan and Novelis shall each
consult with the other prior to making any filings with any Governmental
Authority with respect thereto.

 

 

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16.13   Survival of Covenants

Except as expressly set forth in this Agreement or any Ancillary Agreement, the
covenants, representations and warranties contained in this Agreement and each
Ancillary Agreement, and liability for the breach of any representations,
warranties or obligations contained herein or therein, shall survive the
Reorganization and the Arrangement and shall remain in full force and effect.

16.14   Waivers of Default

Waiver by any Party of any default by the other Party of any provision of this
Agreement or any Ancillary Agreement shall not be deemed a waiver by the waiving
Party of any subsequent or other default, nor shall it prejudice the rights of
the other Party.  No failure or delay by any Party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

16.15   Amendments

No provisions of this Agreement or any Ancillary Agreement shall be deemed
waived, amended, supplemented or modified by any Party, unless such waiver,
amendment, supplement or modification is in writing and signed by the authorized
representative of the Party against whom it is sought to enforce such waiver,
amendment, supplement or modification.

16.16   Controlling Documents

To the extent that the provisions of the Alumina Supply Agreement, Employee
Matters Agreement, FoilStock Supply Agreement, Foil Supply Agreements, Foil
Supply and Distribution Agreement, Intellectual Property Agreements, Metal
Supply Agreements, Neuhausen Agreements, Ohle Agreement, Sierre Agreements, Tax
Sharing and Disaffiliation Agreement, Technical Services Agreements or
Transitional Services Agreement conflict with the provisions of this Agreement,
the provisions of such other agreement shall govern.

16.17   Language

The Parties confirm that it is their wish that this Agreement as well as all
other documents, including communications relating hereto, have been and shall
be drawn up in the English language only. Les parties aux présentes confirment
leur volonté que cette convention de même que tous les documents, y compris tout
avis, s'y rattachant, soient rédigés en anglais seulement.

 

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IN WITNESS WHEREOF, the Parties have caused this Separation Agreement to be
executed by their duly authorized representatives.

ALCAN INC.

By:       /s/ David
McAusland                                                        

            Name:  David McAusland
            Title:     Senior Vice President, Mergers and Acquisition
                        and Chief Legal Officer of Alcan Inc.

NOVELIS INC.

By:       /s/ Brian
Sturgell                                                                

            Name:  Brian Sturgell
            Title:     Chief Executive Officer of Novelis

 

 

 

 

 

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LIST OF SCHEDULES

Schedule 1.01 -     

Definitions

Schedule 1.01 - "PA"

Plan of Arrangement

Schedule 1.01 - "SB"

Separated Businesses

Schedule 1.01 - "NBS"

Novelis Balance Sheet

Schedule 1.01 - "SE" 

Separated Entities

Schedule 2.04(a) 

Separated Assets

Schedule 2.06(a)   

Excluded Assets

Schedule 2.07(a)  

Assumed Liabilities

Schedule 2.07(b)  

Liabilities of Separated Entities

Schedule 2.07(c)  

Retained Liabilities

Schedule 2.07(g)          

Reorganization Documents

Schedule 3.01         

Reorganization Transactions

Schedule 3.05(b)   

Agreements Not Terminated

Schedule 3.06(q)    

Ancillary Agreements

Schedule 3.10       

Intercompany Accounts

Schedule 4.02     

Actions to be taken prior to Effective Time

Schedule 9.08(a)

Litigation Transferred to Novelis

Schedule 9.08(b)  

Litigation to be Defended by Alcan at Novelis's Expense

 

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SCHEDULE 1.01 - DEFINITIONS

"2004 Internal Control Audit and Management Assessments" has the meaning set
forth in Section 14.01(b).

"Accounts Receivable" means in respect of any Person, (a) all trade accounts and
notes receivable and other rights to payment from customers and all security for
such accounts or rights to payment, including all trade accounts receivable
representing amounts receivable in respect of goods shipped or products sold or
otherwise disposed of or services rendered to customers, (b) all other accounts
and notes receivable and all security for such accounts or notes, and (c) any
claim, remedy or other right relating to any of the foregoing.

"Action" means any demand, action, suit, countersuit, arbitration, inquiry,
proceeding or investigation by any Person or any Governmental Authority or
before any Governmental Authority or any arbitration or mediation tribunal.

"Aerospace Industry" means the production of aircraft, spacecraft and satellites
and similar craft for manned or unmanned flight.

"Aerospace Products" means any product destined or intended for use in, or
principally related to, the Aerospace Industry.

"Aerospace Products Business" means any business engaged, in whole or in part,
in the manufacturing, production, marketing or sale of one or more Aerospace
Products.

"Affiliate" of any Person means any other Person that, directly or indirectly,
controls, is controlled by, or is under common control with such first Person as
of the date on which or at any time during the period for when such
determination is being made.  For purposes of this definition, "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or other interests, by contract or otherwise, and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

"Agreement" means this Separation Agreement, including all of the Schedules and
Exhibits hereto.

"Alcan" means Alcan Inc., a corporation organized under the CBCA.

"Alcan Board" means the board of directors of Alcan.

"Alcan Businesses" means the Separated Businesses and the Remaining Alcan
Businesses.

"Alcan Claims" has the meaning set forth in Section 9.01(b).

 

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"Alcan Class A Common Shares" or "New Alcan Common Shares" means the class A
common shares of Alcan which Alcan will be authorized to issue upon the
Arrangement becoming effective and which are to be issued under the Arrangement
to Alcan Common Shareholders in exchange, in part, for Alcan Common Shares, and
to be redesignated as Alcan common shares once the current Alcan Common Shares
have been deleted from the share capital of Alcan;

"Alcan Common Shareholders" means the holders of Alcan Common Shares.

"Alcan Common Shares" means the voting common shares of Alcan.

"Alcan Group" means Alcan and its Subsidiaries, whether held directly or
indirectly; for greater certainty, (i) prior to the Effective Time, "Alcan
Group" includes Arcustarget Group, (ii) on and after the Effective Time, "Alcan
Group" excludes Arcustarget Group, and (iii) in all circumstances "Alcan Group"
excludes Novelis.

"Alcan Indemnified Parties" has the meaning set forth in Section 9.02.

"Alcan Meeting" means the special meeting of Alcan Shareholders held on
December 22, 2004 to consider the Plan of Arrangement, and any adjournment or
postponement thereof.

"Alcan Parties" has the meaning set forth in Section 9.01(a).

"Alcan Preference Shareholders" means the holders of Alcan Preference Shares.

"Alcan Preference Shares" means the Alcan Series C Preference Shares and the
Alcan Series E Preference Shares of Alcan.

"Alcan Proxy Circular" means the management proxy circular of Alcan dated
November 23, 2004 sent to Alcan Shareholders in connection with the Alcan
Meeting.

"Alcan Releasors" has the meaning set forth in Section 9.01(b).

"Alcan's Auditors" has the meaning set forth in Section 14.01(a).

"Alcan Shareholders" means, collectively, the Alcan Common Shareholders and the
Alcan Preference Shareholders.

"Alcan Special Shares" means the non-voting, redeemable, retractable, special
shares of Alcan which Alcan will be authorized to issue upon the Arrangement
becoming effective and which are to be issued pursuant to the Arrangement to
Alcan Common Shareholders in exchange, in part, for Alcan Common Shares.

"Alumina Supply Agreement" means, individually or collectively, the Alumina
Supply Agreements substantially in the forms attached as Exhibit A.

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"Ancillary Agreements" has the meaning set forth in Section 3.06.

"Applicable Law" means any applicable law, statute, rule or regulation of any
Governmental Authority or any outstanding order, judgment, injunction, ruling or
decree by any Governmental Authority.

"Appurtenances" means, in respect of any Land, all privileges, rights,
easements, servitudes, hereditaments and appurtenances and similar interests
belonging to or for the benefit of such Land, including all easements and
servitudes appurtenant to and for the benefit of any Land (a "Dominant Parcel")
for, and as the primary means of, access between, the Dominant Parcel and a
public way, or for any other use upon which lawful use of the Dominant Parcel
for the purposes for which it is presently being used is dependent, and all
rights existing in and to any streets, alleys, passages and other rights-of-way
included therein or adjacent thereto.

"Arcustarget" means Arcustarget Inc., a wholly-owned subsidiary of Alcan
incorporated under the CBCA and designated by Alcan to own the Separated
Businesses on the Effective Date prior to its amalgamation to Novelis pursuant
to the Plan of Arrangement.

"Arcustarget Common Shares" means the voting common shares of Arcustarget to be
transferred by Alcan to Novelis in exchange for Novelis Special Shares pursuant
to the Plan of Arrangement.

"Arcustarget Group" means Arcustarget and its Subsidiaries, whether held
directly or indirectly.

"Arrangement" means the proposed arrangement under the provisions of section 192
of the CBCA on, and subject to, the terms and conditions set forth in the Plan
of Arrangement.

"Arrangement Resolution" means the plan of arrangement resolution, the text of
which is set out as a schedule to the Alcan Proxy Circular.

"Asset-Related Claims" means, in respect of any Asset, all claims of the owner
against Third Parties relating to such Asset, whether choate or inchoate, known
or unknown, absolute or contingent, disclosed or non-disclosed.

"Assets" means assets, properties and rights (including goodwill), wherever
located (including in the possession of owners or Third Parties or elsewhere),
whether real, personal or mixed, tangible or intangible, movable or immovable,
in each case whether or not recorded or reflected or required to be recorded or
reflected on the books and records or financial statements of a Person,
including the following:

(a)                Real Property;
(b)                Tangible Personal Property;
(c)                Inventories;
(d)                Accounts Receivable;
(e)                Contractual Assets;

 

 

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(f)                 Governmental Authorizations;
(g)                 Business Records;
(h)                 Intangible Property Rights;
(i)                  Insurance Benefits;
(j)                  Asset-Related Claims; and
(k)                 Deposit Rights.

"Assumed Liabilities" has the meaning set forth in Section 2.07.

"Business Concern" means any corporation, company, limited liability company,
partnership, joint venture, trust, unincorporated association or any other form
of association.

"Business Day" means any day excluding (i) Saturday, Sunday and any other day
which, in the City of Montréal (Canada) or in the City of New York (United
States) is a legal holiday or (ii) a day on which banks are authorized by
Applicable Law to close in the City of Montréal (Canada) or in the City of New
York (United States).

"Business Records" means, in respect of any Person, all data and Records
relating to such Person, including client and customer lists and Records,
referral sources, research and development reports and Records, cost
information, sales and pricing data, customer prospect lists, customer and
vendor data, production reports and Records, service and warranty Records,
equipment logs, operating guides and manuals, financial and accounting Records,
personnel Records (subject to Applicable Law), creative materials, advertising
materials, promotional materials, studies, reports, correspondence and other
similar documents and records.

"By-laws" means the By-laws of Novelis, substantially in the form attached
hereto as Exhibit B.

"CBCA" means the Canada Business Corporations Act.

"Certificate of Incorporation" means the Certificate of Incorporation of Novelis
in the form attached hereto as Exhibit C.

"Change of Control Event" has the meaning set forth in Section 14.04(a).

"Change of Control Non Compete Breach" has the meaning set forth in
Section 14.04(e).

"Claim Notice" has the meaning set forth in Section 9.04(b).

"Confidential Information" has the meaning set forth in Section 11.07(a)

"Consent" means any approval, consent, ratification, waiver or other
authorization.

 

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"Contract" means any contract, agreement, lease, purchase and/or commitment,
license, consensual obligation, promise or undertaking (whether written or oral
and whether express or implied) that is legally binding on any Person or any
part of its property under Applicable Law, including all claims or rights
against any Person, choses in action and similar rights, whether accrued or
contingent with respect to any such contract, agreement, lease, purchase and/or
commitment, license, consensual obligation, promise or undertaking, but
excluding this Agreement and any Ancillary Agreement save as otherwise expressly
provided in this Agreement or in any Ancillary Agreement.

"Contractual Asset" means, in respect of any Person, any Contract of, or
relating to, such Person, any outstanding offer or solicitation made by, or to,
such Person to enter into any Contract, and any promise or undertaking made by
any other Person to such Person, whether or not legally binding.

"Control" has the meaning set forth in Section 14.04(a).

"Court" means the Quebec Superior Court.

"CRA" means the Canada Revenue Agency.

"Deferred Beneficiary" has the meaning set forth in Section 5.01(b).

"Deferred Excluded Asset" has the meaning set forth in Section 5.01(a).

"Deferred Separated Asset" has the meaning set forth in Section 5.01(a).

"Deferred Transactions" has the meaning set forth in Section 13.01(a).

"Deferred Transfer Asset" has the meaning set forth in Section 5.01(a).

"Deposit Rights" means rights relating to deposits and prepaid expenses, claims
for refunds and rights of set-off in respect thereof.

"Designated Assets" means any of Novelis' rolling facilities at Oswego, New
York, Logan, Kentucky, Norf, Germany, Ulsan, Korea, Yeongju, Korea or
Pindamonhangaba, Brazil.

"Disclosing Party" has the meaning set forth in Section 11.08.

"Dispute" has the meaning set forth in Section 12.01.

"Distribution" means the pro rate distribution of New Alcan Common Shares and
Novelis Common Shares to Alcan Common Shareholders, as contemplated in the Plan
of Arrangement.

"Effective Date" means the effective date of the Arrangement, being the date
shown on the certificate of arrangement issued by the director under the CBCA
giving effect to the Arrangement, which date the Parties currently expect to be
January 6, 2005.

"Effective Time" means 12:00:01 a.m. E.S.T. on the Effective Date.

 

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"EHS Liabilities" means any Liability arising from or under any Environmental
Law or Occupational Health and Safety Law.

"Employee Matters Agreement" means the Employee Matters Agreement substantially
in the form attached hereto as Exhibit D.

"Encumbrance" means, with respect to any asset, mortgages, liens, hypothecs,
pledges, charges, security interests or encumbrances of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
Applicable Law.

"Energy Agreement" means the Energy Agreement substantially in the form attached
hereto as Exhibit E.

"Environmental Law" means any Applicable Law from any Governmental Authority
(A) relating to the protection of the environment (including air, water, soil
and natural resources) or (B) the use, storage, handling, release or disposal of
Hazardous Substances.

"Escalation Notice" has the meaning set forth in Section 12.02.

"Exchange Act" means the United States Securities Exchange Act of 1934.

"Excluded Assets" has the meaning set forth in Section 2.06(a).

"Final Order" means the final order of the Court made in connection with the
approval of the Arrangement and the fairness of the terms and conditions
thereof.

"Foilstock Supply Agreement" means, individually or collectively, the Foilstock
Supply Agreements substantially in the forms attached as Exhibit F.

"Foil Supply Agreement" means, individually or collectively, the Foil Supply
Agreements substantially in the forms attached as Exhibit G.

"Foil Supply and Distribution Agreement" means the Foil Supply and Distribution
Agreement substantially in the form attached as Exhibit H.

"Governmental Authority" means any court, arbitration panel, governmental or
regulatory authority, agency, stock exchange, commission or body.

"Governmental Authorization" means any Consent, license, certificate, franchise,
registration or permit issued, granted, given or otherwise made available by, or
under the authority of, any Governmental Authority or pursuant to any Applicable
Law.

"Ground Lease" means any long-term lease (including any emphyteotic lease) of
Land in which most of the rights and benefits comprising ownership of the Land
and the Improvements thereon or to be constructed thereon, if any, and the
Appurtenances thereto for the benefit thereof, are transferred to the tenant for
the term thereof.

 

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"Ground Lease Property" means, in respect of any Person, any Land, Improvement
or Appurtenance of such Person that is subject to a Ground Lease.

"Group" means Alcan Group or Novelis Group, as the context requires.

"Hazardous Substance" means any substance to the extent presently listed,
defined, designated or classified as hazardous, toxic or radioactive under any
applicable Environmental Law, including petroleum and any derivative or
by-products thereof.

"Improvements" means, in respect of any Land, all buildings, structures, plants,
fixtures and improvements located on such Land, including those under
construction.

"Indemnified Party" has the meaning set forth in Section 9.04(a).

"Indemnifying Party" has the meaning set forth in Section 9.04(b).

"Information" means any information, whether or not patentable or copyrightable,
in written, oral, electronic or other tangible or intangible forms, stored in
any medium, including studies, reports, test procedures, research, records,
books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, manufacturing techniques, manufacturing variables, designs,
specifications, drawings, blueprints, diagrams, models, prototypes, samples,
products, product plans, flow charts, data, computer data, disks, diskettes,
tapes, computer programs or other software, marketing plans, customer
information, customer services, supplier information, communications by or to
attorneys (including attorney-client privileged communications), memos and other
materials prepared by attorneys or under their direction (including attorney
work product), and other technical, financial, employee or business information
or data.

"Insurance Benefits" means, in respect of any Asset or Liability, all insurance
benefits, including rights to Insurance Proceeds, arising from or relating to
such Asset or Liability.

"Insurance Proceeds" means those monies (in each case net of any costs or
expenses incurred in the collection thereof and net of any applicable premium
adjustments (including reserves and retrospectively rated premium adjustments)):

(a)           received by an insured from an insurance carrier; or

(b)           paid by an insurance carrier on behalf of the insured.

"Intangible Property Rights" means, in respect of any Person, all intangible
rights and property of such Person, including IT Assets, going concern value and
goodwill.

"Intellectual Property Agreement" means, individually or collectively, the
Intellectual Property Agreements substantially in the forms attached hereto as
Exhibit I.

"Intercompany Accounts" has the meaning set forth in Section 3.10.

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"Interim Order" means the interim order of the Court dated November 22, 2004 in
connection with the approval of the Arrangement providing for, among other
things, the holding of the Alcan Meeting, as the same may be amended,
supplemented or varied by the Court.

"Internal Revenue Code" means the United States Internal Revenue Code of 1986.

"Inventories" means, in respect of any Person, all inventories of such Person
wherever located, including all finished goods, (whether or not held at any
location or facility of such Person or in transit to or from such Person), work
in process, raw materials, spare parts and all other materials and supplies to
be used or consumed by the Person in production of finished goods.

"IRS" means the United States Internal Revenue Service.

"IT Assets" means computers, computer software, firmware, middleware, servers,
workstations, routers, hubs, switches, data communications lines, all other
information technology equipments and all associated documentation.

"Joint Procurement of Goods and Services Protocol" means the Joint Procurement
of Goods and Services Protocol substantially in the form attached as Exhibit J.

"Land" means, in respect of any Person, all parcels and tracts of land in which
the Person has an ownership interest.

"Liability" means, with respect to any Person, any and all losses, claims,
charges, debts, demands, actions, causes of action, suits, damages, obligations,
payments, costs and expenses, sums of money, accounts, reckonings, bonds,
specialties, indemnities and similar obligations, exoneration covenants,
contracts, controversies, agreements, promises, doings, omissions, variances,
guarantees, make whole agreements and similar obligations, and other liabilities
and requirements, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, joint or several, whenever arising, and including
those arising under any Applicable Law, Action, threatened or contemplated
Action (including the costs and expenses of demands, assessments, judgments,
settlements and compromises relating thereto and attorneys' fees and any and all
costs and expenses, whatsoever reasonably incurred in investigating, preparing
or defending against any such Actions or threatened or contemplated Actions) or
Order of any Governmental Authority or any award of any arbitrator or mediator
of any kind, and those arising under any contract, commitment or undertaking, in
each case, whether or not recorded or reflected or otherwise disclosed or
required to be recorded or reflected or otherwise disclosed, on the books and
records or financial statements of any Person, including any Specified Financial
Liability, EHS Liability or Liability for Taxes.

"Mediation Notice" has the meaning set forth in Section 12.03(a).

"Metal Supply Agreement" means, individually or collectively, the Metal Supply
Agreements substantially in the forms attached as Exhibit K.

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"Neuhausen Agreement" means, individually or collectively, the agreements
substantially in the forms attached as Exhibit L.

"Non Compete Breach" has the meaning set forth in Section 14.03(b).

"Non Compete Undertaking" has the meaning set forth in Section 14.04(c).

"Notice Period" has the meaning set forth in Section 9.04(b).

"Novelis" means Novelis Inc., a corporation incorporated under the CBCA formed
to acquire under the Arrangement and independently carry on most of the aluminum
rolled products businesses operated by Alcan.

"Novelis Annual Report" has the meaning set forth in Section 14.01(d).

"Novelis Balance Sheet" means the audited combined balance sheet of "the Novelis
Group", including the notes thereto, as of September 30, 2004, substantially in
the form attached as Schedule 1.01 - "NBS".

"Novelis Claims" has the meaning set forth in Section 9.01(a).

"Novelis COC Assets" has the meaning set forth in Section 14.04(d).

"Novelis Common Shares" means the voting common shares of Novelis to be issued
to holders of Alcan Special Shares under the Arrangement in exchange for such
Alcan Special Shares.

"Novelis Group" means Novelis and its Subsidiaries, whether held directly or
indirectly; for greater certainty, (i) prior to the Effective Time, "Novelis
Group" excludes Arcustarget Group, and (ii) on and after the Effective Time,
"Novelis Group" includes Arcustarget Group.

"Novelis Indemnified Parties" has the meaning set forth in Section 9.03.

"Novelis Opening Balance Sheet" has the meaning set forth in Section 2.04(e).

"Novelis Parties" has the meaning set forth in Section 9.01(b).

"Novelis Releasors" has the meaning set forth in Section 9.01(a).

"Novelis Special Shares" means the non-voting redeemable, retractable, special
shares, Series 1, of Novelis which Novelis will be authorized to issue upon the
Arrangement becoming effective and which are to be issued by Novelis to Alcan in
consideration for the transfer by Alcan to Novelis of the Arcustarget Common
Shares, as contemplated by the Plan of Arrangement.

"Novelis's Auditors" has the meaning set forth in Section 14.01(a).

 

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"Occupational Health and Safety Law" means any Applicable Law designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (such as
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.

"Ohle Agreement" means the Agreement substantially in the form attached as
Exhibit M.

"Order" means any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Authority or arbitrator.

"Ordinary Course of Business" means any action taken by a Person that is in the
ordinary course of the normal, day-to-day operations of such Person and is
consistent with the past practices of such Person.

"Parties" means the parties to this Agreement and, in the singular, means either
of them.

"Person" means any individual, Business Concern or Governmental Authority.

"Plan of Arrangement" means the plan of arrangement set out as Schedule 1.01 -
"PA", as the same may be amended from time to time.

"Plate Business" means any business engaged, in whole or in part, in the
manufacturing, production, marketing or sale of Plate Products.

"Plate Product" means any rolled and/or cast aluminum products having a
thickness greater than 6.5 millimeters in the case of cast aluminum or 12
millimeters in the case of rolled aluminum, and that is not intended for further
rolling (reroll) to a gauge of 6.5 millimeters or less.

"Potential Contributor" has the meaning set forth in Section 9.05(a).

"Prime Rate" means the floating rate of interest established from time to time
by the Royal Bank of Canada (the "Bank") as the reference rate of interest the
Bank will use to determine rates of interest payable by its borrowers on [US]
dollar commercial loans made by the Bank to such borrowers [in Canada] and
designated by the Bank as its "prime rate" and which shall change from time to
time as changed by the Bank.

"Prospectus" means the amended preliminary non-offering prospectus filed with
the securities regulatory authorities in each of the provinces and territories
of Canada on November 23, 2004, and included as exhibit 99.1 of the Registration
Statement, together with all amendments or supplements thereto.

"Provincial Revenue Authority" means the applicable department or other division
of the provincial government of any relevant Canadian province that is charged
with the responsibility for the administration of provincial taxation statutes.

 

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"Real Property" means any Land and Improvements and all Appurtenances thereto
and any Ground Lease Property.

"Record" means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.

"Registration Statement" means the registration statement on Form 10, file
number 001‑32312, filed with the SEC under the Exchange Act, together with all
amendments or supplements thereto.

"Regulation S‑K" means Regulation S‑K of the General Rules and Regulations
promulgated by the SEC pursuant to the Securities Act.

"Remaining Alcan Businesses" means all Alcan Businesses other than the Separated
Businesses.

"Remaining Alcan Entity" means any Business Concern that is a member of Alcan
Group on and after the Effective Time.

"Reorganization" means the measures described in Article III, including the
Reorganization Transactions.

"Reorganization Date" means, unless otherwise indicated on the final closing
agenda relating to the Reorganization and the Arrangement, December 31, 2004, or
such earlier or later date as the Alcan Board may determine as the date by which
all of the Reorganization Transactions (other than non-material transactions the
performance of which shall have been waived by Alcan, with or without
conditions) shall have been completed.

"Reorganization Documents" means the agreements described on Schedule 2.07(g) of
this Agreement and, in the singular, means any one of them.

"Reorganization Time" means, unless otherwise indicated on the final closing
agenda relating to the Reorganization and the Arrangement, 11:59:59 p.m. E.S.T.
on the Reorganization Date.

"Reorganization Transactions" means the transactions described on Schedule 3.01
of this Agreement and, in the singular, means any one of them.

"Representatives" means, with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants or
attorneys.

"Requesting Party" has the meaning set forth in Section 11.01.

"Restricted Period" means the period of four (4) years commencing immediately
after the expiry of the Standstill Period.

"Retained Liabilities" has the meaning set forth in Section 2.07.

 

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"Retaining Person" has the meaning set forth in Section 5.01(b).

"Rolled Products Business" means the businesses and operations relating to the
manufacturing, production, research, development, marketing and sale of aluminum
sheet, light gauge products, automotive, can and lithographic sheet, plate and
foil stock, that will be owned by Novelis or any other member of Novelis Group
as of the Effective Time or that was but is no longer conducted by Alcan or any
other member of Alcan Group both as owned and operated by Novelis or any other
member of Novelis Group and as owned and operated by Alcan or any other member
of Alcan Group at any time prior to the Effective Time whether or not still
conducted at the date of this Agreement; provided, however, that in no event
shall "Rolled Products Business" include any business operated by Alcan Group
following the Effective Time.

"Rulings Applications" means all the applications for an advance tax ruling or
letter submissions made to the CRA, any Provincial Revenue Authority or the IRS
concerning the subject matter hereof (including, for greater certainty, any
aspect of the Plan of Arrangement) prior to the date of this Agreement, and all
such letter submissions made on or after the date hereof and prior to the
Effective Date.

"Securities Act" means the United States Securities Act of 1933.

"SEC" means the United States Securities and Exchange Commission.

"Separated Assets" has the meaning set forth in Section 2.04.

"Separated Businesses" means those Alcan Businesses specifically identified on
Schedule 1.01 - "SB" and, in the singular, means any one of them.

"Separated Entities" means those Business Concerns forming part of Alcan Group
which are identified on Schedule 1.01 - "SE" and which (i) on and after the
Reorganization Time form part of Arcustarget Group, and (ii) on and after the
Effective Time form part of Novelis Group.

"Separation" means the multi-step process by which the Separated Businesses
shall be  transferred, directly or indirectly, from Alcan to Novelis and
includes the Reorganization and the Arrangement.

"Services" has the meaning ascribed thereto in the Transitional Services
Agreement.

"Sierre Agreement" means the Sierre Master Agreement, including all individual
agreements referred to therein as forming part thereof, substantially in the
form attached hereto as Exhibit N.

"Specified Financial Liabilities" or "SFLs" mean, in respect of any Person, all
liabilities, obligations, contingencies, instruments and other Liabilities of a
financial nature with Third Parties of, or relating to, such Person, including
any of the following:

(a)                foreign exchange contracts;

 

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(b)               letters of credit;

(c)               guarantees of Third-Party loans;

(d)               surety bonds (excluding surety for workers' compensation
self-insurance);

(e)               interest support agreements on Third Party loans;

(f)                performance bonds or guarantees issued by Third Parties;

(g)               swaps or other derivatives contracts;

(h)               recourse arrangements on the sale of receivables or notes; and

(i)                indemnities for damages for any breach of, or any inaccuracy
in, any representation or warranty or any breach of, or failure to perform or
comply with, any covenant, undertaking or obligation.

"Standstill Period" means a period of twelve (12) months commencing on the
Effective Date.

"Subsidiary" of any Person means any corporation, partnership, limited liability
entity, joint venture or other organization, whether incorporated or
unincorporated, of which a majority of the total voting power of capital stock
or other interests entitled (without the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof, is at the time owned
or controlled, directly or indirectly, by such Person.

"Tangible Personal Property" means, in respect of any Person, all machinery,
equipment, tools, furniture, office equipment, supplies, materials, vehicles and
other items of tangible personal or movable property (other than Inventories and
IT Assets) of every kind and wherever located that are owned or leased by the
Person, together with any express or implied warranty by the manufacturers,
sellers or lessors of any item or component part thereof and all maintenance
Records and other documents relating thereto.

"Targeted Entity" has the meaning set forth in Section 14.04(a).

"Tax" means any income, profit, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium property, environmental, windfall
profit, customs, vehicle, airplane, boat, vessel or other title or registration,
capital, capital stock, franchise, employees' income withholding, foreign or
domestic withholding, social security, unemployment, disability, real property,
personal property, sales, use, goods and service, transfer, value added,
alternative, add-on, minimum and other tax, fee, assessment, levy, tariff,
charge, contribution to any governmental plan, or duty of any kind whatsoever
and any interest, penalty, addition or additional amount thereon imposed,
assessed or collected by or under the authority of any Governmental Authority or
payable under any tax-sharing agreement or any other Contract.

"Tax Act" means the Income Tax Act (Canada).

 

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"Tax Rulings" means the advance income tax ruling and opinions received by Alcan
from the CRA dated December 15, 2004 and December 23, 2004, and any similar
advance income tax rulings received by Alcan from a Provincial Revenue Authority
or the IRS, and any amendments thereto, confirming the Canadian federal income
tax consequences of certain aspects of the Arrangement and certain other
transactions.

"Tax Sharing and Disaffiliation Agreement" means the Tax Sharing and
Disaffiliation Agreement substantially in the form attached hereto as Exhibit O.

"Technical Services Agreement" means, individually or collectively, the
Technical Services Agreements substantially in the forms attached hereto as
Exhibit P.

"Third Party" means a Person that is not a Party to this Agreement, other than a
member of Alcan Group or a member of Novelis Group and that is not an Affiliate
thereof.

"Third Party Acquirer" has the meaning set forth in Section 14.04(a).

"Third Party Acquirer Controller" has the meaning set forth in Section14.04(d).

"Third Party Claim" has the meaning set forth in Section 9.04(b).

"Third Party Consent" has the meaning set forth in Section 2.09.

"Transfer Impediment" has the meaning set forth in Section 5.01(a).

"Transition Service Schedule" has the meaning set forth in the Transitional
Services Agreement.

"Transitional Services Agreement" means the Transitional Services Agreement
substantially in the form attached hereto as Exhibit Q.

"United States" means the United States of America.

"Unreleased Liabilities" has the meaning set forth in Section 5.02.

"Unreleased Person" has the meaning set forth in Section 5.02.

 

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LIST OF EXHIBITS

Exhibit A

Alumina Supply Agreement

Exhibit B

By-laws of Novelis

Exhibit C

Certificate of incorporation of Novelis

Exhibit D

Employee Matters Agreement

Exhibit E

Energy Agreement

Exhibit F

FoilStock Supply Agreement

Exhibit G

Foil Supply Agreements

Exhibit H

Foil Supply and Distribution Agreement

Exhibit I

Intellectual Property Agreements

Exhibit J

Joint Procurement of Goods and Services Protocol

Exhibit K

Metal Supply Agreements

Exhibit L

Neuhausen Agreements

Exhibit M

Ohle Agreement

Exhibit N

Sierre Agreements

Exhibit O

Tax Sharing and Disaffiliation Agreement

Exhibit P

Technical Services Agreements

Exhibit Q

Transitional Services Agreement

Exhibit R

Non Compete Undertaking

 

 

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