SEPARATION AGREEMENT
Published on December 20, 2004
Exhibit 10.1
SEPARATION AGREEMENT
between
ALCAN INC.
and
NOVELIS INC.
Dated o, 2004
TABLE OF CONTENTS
-ii-
-iii-
-iv-
SEPARATION AGREEMENT (the "AGREEMENT") entered into in the City of Montreal,
Province of Quebec, dated o, 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);
2
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:
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
3
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
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.
4
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:
(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
5
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;
(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.
6
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.
(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
7
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
(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
8
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 perils") 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.
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.
9
3.03 EFFECTS OF THE REORGANIZATION TRANSACTIONS
After giving effect to the Reorganization Transactions, as of the
Reorganization Time:
(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.
(b) The provisions of Section 3.05(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
10
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;
(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).
11
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.
3.10 INTERCOMPANY ACCOUNTS BETWEEN ALCAN GROUP AND NOVELIS GROUP
Prior to the Effective Time, Alcan shall use commercially reasonable
efforts to cause all balances related to indebtedness, including any
intercompany indebtedness, loan, guaranty, receivable, payable or other
account 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 as described on 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. To the extent
that any Intercompany Account payable to Novelis or any other member of
Novelis Group has not been settled prior to the Effective Time, Alcan
shall cause it to be satisfied in full when due or when
12
necessary to offset an Intercompany Account then due and payable by
Novelis or any other member of Novelis Group.
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 1, 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.
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
13
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 5.01(b) contain all the
obligations of the Retaining Person vis-a-vis the Deferred
Beneficiary with respect to the Deferred Transfer Asset and
the Retaining Person shall not be bound vis-a-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.
(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,
14
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.
15
(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;
(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
16
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 o, 2004, the issued and outstanding
share capital without nominal or par value of Alcan consisted
of o Alcan Common Shares, 5,700,000 Alcan Series C Preference
Shares and 3,000,000 Alcan Series E Preference Shares;
(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
17
(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.
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
18
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:
(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 1, 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
19
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;
(iv) the Novelis Common Shares to be distributed pursuant
to the Arrangement shall have been accepted for
listing on the Toronto Stock Exchange and
20
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;
(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.
21
(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.
(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
22
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;
(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;
23
(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.
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
24
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.
(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
25
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.
(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.
26
(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.
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
27
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 9.08(A), 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.
(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
28
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.
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
29
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.
(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.
30
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
31
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.
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.
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.
32
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.
(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
33
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).
(b) Each Party shall maintain, and shall cause its respective
Group members to maintain, policies and procedures, and
develop such further policies and
34
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.
35
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.
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
36
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 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 nor rely upon information supplied,
positions adopted, or arguments raised, by the other Party in
the mediation.
(i) Subject to the right of the Parties to seek provisional or
interim 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, 12.03
and 12.04.
37
12.04 Arbitration
(a) Any Dispute which has not been resolved by negotiation or
mediation as provided herein, shall be referred to and finally
resolved by arbitration in accordance with the Arbitration
Rules of the London Court of International Arbitration then in
force.
(b) The arbitral tribunal shall consist of three arbitrators. The
place of arbitration shall be Montreal, Canada. The language
of the arbitration shall be English.
(c) The costs of the arbitration shall be fixed 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: (i) the fees
and disbursements of the arbitrators, (ii) reasonable travel
and other expenses of witnesses; (iii) the reasonable fees and
expenses of expert witnesses; and (iv) 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 provisional or interim measure 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 Montreal, 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 provisional or interim remedies as may be
obtained from a competent court, the arbitral tribunal shall
have full authority to grant provisional or interim remedies
and to award damages for the failure of any Party to respect
the arbitral tribunal's orders to that effect.
(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.
38
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
39
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").
(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.
(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
40
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.
(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
41
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.
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
42
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;
(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)
43
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.
(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.
44
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.
(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
45
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").
(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
46
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
47
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:
(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.
(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
48
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.
49
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;
(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;
50
(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.
51
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:
IF TO ALCAN, TO:
Alcan Inc.
1188 Sherbrooke Street West
Montreal, Quebec
H3A 3G2
Fax: 514-848-8115
Attention: Chief Legal Officer
52
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.
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.
53
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 presentes confirment leur volonte que cette convention de meme que
tous les documents, y compris tout avis, s'y rattachant, soient rediges
en anglais seulement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
54
IN WITNESS WHEREOF, the Parties have caused this Separation Agreement to be
executed by their duly authorized representatives.
ALCAN INC.
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
NOVELIS INC.
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
55
LIST OF SCHEDULES
56
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.
57
"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 to be
held on December 22, 2004 to consider the Plan of Arrangement, and any
adjournment or postponement thereof.
58
"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 to
be 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.
59
"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 Montreal (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 Montreal
(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
60
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).
61
"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 1, 2005.
"EFFECTIVE TIME" means 12:01 a.m. Montreal time 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).
62
"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
63
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.
64
"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).
65
"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 of Novelis 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.
66
"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.
67
"REORGANIZATION DATE" means the Effective Date, or such earlier 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 o (o time) 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.
68
"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
69
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 o, 2004 and o, 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 Section
14.04(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.
70
"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