Document:

Ex.10-16

 

EXECUTION COPY

 

SEPARATION AGREEMENT

 

between

 

ALCAN INC.

and

NOVELIS INC.

 

 

 

 

 

 

 

 

 

 

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

 

 

- 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

 

- 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

	

 

				
			 

 

 

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:

 

 

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

	 

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:

 

 

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;

 

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.

 

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 

 

 

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.

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.

 

 

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;

			

 

 

10

		(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.

 

 

 

11

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.

 

 

12

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.

 

13

 

(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. 

 

14

(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;

 

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;

 

16

(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.

 

17

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:

18

(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;

 

 

19

(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;

 

 

20

(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.

 

 

21

(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;

22

(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.

 

 

 

24

(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.

 

 

 

25

(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. 

 

 

26

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.

 

 

 

 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.

28

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.

 

 

29

(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.

30

 

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.

 

 31

 

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.

32

(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).

 

 

 33

 

(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.

 

34

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.

 

 

35

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.

 

36

(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.

 

37

(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").

 

 

38

(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.

 

 

 

39

(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.

 

 

 

40

(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.

 

41

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;

42

(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.

43

(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.

44

(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").

 

 

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:

 

 

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.

 

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.

 

48

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;

49

(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.

 

50

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:

 

 

51

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.

 

 

52

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.

 

[The remainder of this page is intentionally blank.] 

53

 

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
  

 

 

 

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

 

 

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).

 

 

"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.

 

"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;

 

 

 

(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.

 

 

"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.

 

 

"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.

 

 

"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.

 

"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.

 

"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).

 

 

"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.

 

 

"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.

 

 

"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;

 

 

(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).

 

 

"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.

 

 

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 UndertakingExhibit 10.9.4

Exhibit 10.9.4

SIXTH
MODIFICATION AGREEMENT

BY THIS
SIXTH MODIFICATION AGREEMENT (the "Agreement"), made and entered into as of the
13th day of May, 2004, WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative
agent (the "Administrative Agent") for the Banks listed in the hereinafter
defined Credit Agreement (the "Banks") and as the Issuing Bank and the Swing
Line Lender, and KNIGHT TRANSPORTATION, INC., an Arizona corporation (the
"Company") and all present and future Significant Subsidiaries of the Company
(with the Company, the "Borrower"), in consideration of the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, hereby confirm and agree as
follows:

SECTION
1.     RECITALS;
ACKNOWLEDGEMENTS.

1.1     The
Borrower and the Administrative Agent and the Banks entered into that Credit
Agreement dated April 6, 2001 (as amended from time to time, the "Credit
Agreement") to provide financial accommodations to the Borrower as provided
therein. The Credit Agreement was previously amended by that Modification
Agreement dated as of June 5, 2001, that Second Modification Agreement dated as
of November 19, 2001, that Third Modification Agreement dated as of February 13,
2003, that Fourth Modification Agreement dated as of September 15, 2003 and that
Fifth Modification Agreement dated as of December 15, 2003.

 

1.2     Borrower
and the Administrative Agent, with the consent of the Banks, desire to modify
the Credit Agreement as set forth herein.

1.3     All
undefined capitalized terms used herein shall have the meaning given them in the
Credit Agreement.

SECTION
2.    CREDIT
AGREEMENT.

 

2.1     The following
definitions in Section 1.1 of the Credit Agreement are hereby amended to read as
follows:

    "Letter of
Credit Commitment" shall mean $11,000,000.00.

    "Maximum RLC
Commitment" shall mean $11,000,000.00.

2.2     Schedule
2.1 of the Credit Agreement is hereby amended to read as attached
hereto.

2.3     All
references in the Note to "10,000,000.00" or to "Ten Million and NO/100 Dollars"
are hereby amended to read "11,000,000.00" and "Eleven Million and NO/100
Dollars," respectively.

SECTION
3.     OTHER
MODIFICATIONS, RATIFICATIONS AND AGREEMENTS.

3.1     All
references to the Credit Agreement in the other Loan Documents are hereby
amended to refer to the Credit Agreement as hereby amended.

3.2     Borrower
hereby reaffirms to the Banks each of the representations, warranties, covenants
and agreements of Borrower set forth in the Credit Agreement, with the same
force and effect as if each were separately stated herein and made as of the
date hereof.

3.3     Borrower
hereby ratifies, reaffirms, acknowledges, and agrees that the Notes and the
Credit Agreement represent valid, enforceable and collectible obligations of
Borrower, and that there are no existing claims, defenses, personal or
otherwise, or rights of setoff whatsoever with respect to any of these documents
or instruments. Borrower further acknowledges and represents that no event has
occurred and no condition exists that, after notice or lapse of time, or both,
would constitute a default under this Agreement, the Notes or the Credit
Agreement.

3.4     All terms,
conditions and provisions of the Credit Agreement are continued in full force
and effect and shall remain unaffected and unchanged except as specifically
amended hereby. The Credit Agreement, as amended hereby, is hereby ratified and
reaffirmed by Borrower, and Borrower specifically acknowledges the validity and
enforceability thereof.

SECTION
4.     GENERAL.

 

4.1     This
Agreement in no way acts as a release or relinquishment of those rights securing
payment of the Loans. Such rights are hereby ratified, confirmed, renewed and
extended by Borrower in all respects.

4.2     The
modifications contained herein shall not be binding upon the Banks until the
Administrative Agent shall have received all of the following:

	 	
      (a)
	
      An
      original of this Agreement fully executed by the
  Borrower.

	 	
      (b)
	
      Such
      resolutions or authorizations and such other documents as the
      Administrative Agent may require relating to the existence and good
      standing of the Borrower and the authority of any person executing this
      Agreement or other documents on behalf of the
Borrower.

4.3     Borrower
shall execute and deliver such additional documents and do such other acts as
the Banks may reasonably require to fully implement the intent of this
Agreement.

4.4     Borrower
shall pay all costs and expenses, including, but not limited to, reasonable
attorneys' fees incurred by the Administrative Agent in connection herewith,
whether or not all of the conditions described in Paragraph 4.2 above are
satisfied. Banks, at their option, but without any obligation to do so, may
advance funds to pay any such costs and expenses that are the obligation of the
Borrower, and all such funds advanced shall bear interest at the highest rate
provided in the Notes and shall be due and payable upon demand.

4.5     Notwithstanding
anything to the contrary contained herein or in any other instrument executed by
Borrower, the Administrative Agent or the Banks, or in any other action or
conduct undertaken by Borrower, the Administrative Agent or the Banks on or
before the date hereof, the agreements, covenants and provisions contained
herein shall constitute the only evidence of the Banks' consent to modify the
terms and provisions of the Credit Agreement. Accordingly, no 

2

express
or implied consent to any further modifications involving any of the matters set
forth in this Agreement or otherwise shall be inferred or implied by the Banks'
consent to this Agreement. Further, the Banks' consent to this Agreement shall
not constitute a waiver (either express or implied) of the requirement that any
further modification of the Credit Agreement shall require the express written
consent of the Bank; no such consent (either express or implied) has been given
as of the date hereof.

4.6     Time is
hereby declared to be of the essence hereof of the Credit Agreement, and Banks
require, and Borrower agrees to, strict performance of each and every covenant,
condition, provision and agreement hereof, of the Credit Agreement.

4.7     This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their heirs, personal representatives, successors and
assigns.

4.8     This
Agreement is made for the sole protection and benefit of the parties hereto, and
no other person or entity shall have any right of action hereon.

4.9     This
Agreement shall be governed by and construed according to the laws of the State
of Arizona.

    IN WITNESS
WHEREOF, these presents are executed as of the date indicated
above.

	 	
      WELLS
      FARGO BANK, NATIONAL ASSOCIATION

	 	
       

       

      By:
      
	
       

       

      /s/
      Keri Tignini

	 	
      Name:
	
      Keri
      Tignini

	 	
      Its:
	
      Vice
      President

	 	 
	 	 	
      ADMINISTRATIVE
      AGENT

	 	 
	 	
      KNIGHT
      TRANSPORTATION, INC.

	 	
       

       

      By:
      
	
       

       

      /s/
      Tim Kohl

	 	
      Name:
	
      Tim
      Kohl

	 	
      Its:
	
      Treasurer

	 	 
	 	
      QUAD-K
      LEASING, INC., an Arizona corporation

	 	
       

       

      By:
      
	
       

       

      /s/
      Tim Kohl

	 	
      Name:
	
      Tim
      Kohl

	 	
      Its:
	
      President

	 	 
	 	 	
      BORROWER

	 	 	 
	 	 	 

3

CONSENT
OF THE BANKS 

Re: Knight
Transportation, Inc.

The
following:

(a)     is a Bank
named in that Credit Agreement dated April 6, 2001 between Knight
Transportation, Inc., an Arizona corporation (the "Company"), all present and
future Significant Subsidiaries of the Company (the "Borrower"), Wells Fargo
Bank, National Association, as administrative agent for the Banks (the
"Administrative Agent"), and the Banks; and

(b)     consents
to that Sixth Modification Agreement dated May 13,
2004
entered into between the Borrower and the Administrative Agent.

	 	
      WELLS
      FARGO BANK, NATIONAL ASSOCIATION

	 	
       

       

      By:
      
	
       

       

      /s/
      Keri Tignini

	 	
      Name:
	
      Keri
      Tignini

	 	
      Its:
	
      Vice
      President

	 	 
	 	 	
      "Bank"

SCHEDULE
2.1

COMMITMENTS
OF BANKS

as to the
Facility

as of
___________, 2004

	 	 	
                      
      Bank
	 	% 	 	
      $
	 
	 	 	 	 	 	 	 	 
	1.
	 	 	
      Wells
      Fargo Bank,

      National
      Association
	 	 	
      100%
	 
	 
	
      $11,000,000.00
	 
	 

       
	 	 	
       

      Maximum
      RLC

      Commitment 
	 	 	
      100%
	 
	 
	
      $11,000,000.00
	 

Addresses:

	
      1.
	
      100
      West Washington 

      Commercial
      Banking 

      MAC
      S4101-251 

      Phoenix,
      Arizona 85003 

      Attention:
      Keri Tignini 

      Phone:
      602-378-4593 

      Fax:
      602-378-4758

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}]]