EXECUTION COPY
Exhibit 10.6
TAX SHARING AND DISAFFILIATION AGREEMENT
BETWEEN
ALCAN INC.
AND
NOVELIS INC.
AND
ARCUSTARGET INC.
AND
ALCAN CORPORATION
AND
NOVELIS CORPORATION
Dated January 5, 2005
With effect as of the Effective Date
TABLE OF CONTENT
ARTICLE I - INTERPRETATION 3
1.01 Definitions.......................................................... 3
1.02 Schedules............................................................ 10
1.03 Headings............................................................. 10
1.04 Currency............................................................. 10
ARTICLE II - REPRESENTATIONS, WARRANTIES AND COVENANTS 10
2.01 Representations, Warranties and Covenants of Alcan in Favour
of Novelis........................................................ 10
2.02 Representations, Warranties and Covenants of Novelis in
Favour of Alcan and AC............................................ 12
2.03 Representations, Warranties and Covenants of AC in
Favour of AAC and Novelis......................................... 15
2.04 Representations, Warranties and Covenants of AAC in Favour
of AC and Alcan................................................... 16
2.05 Representations, Warranties and Covenants of Novelis and
Arcustarget in Favour of AC....................................... 17
2.06 Survival of Representations, Warranties and Covenants................ 18
ARTICLE III - INDEMNIFICATION 19
3.01 Indemnification by Alcan............................................. 19
3.02 Indemnification by Novelis........................................... 19
3.03 Indemnification in the Event of Mutual Breach........................ 19
3.04 Indemnification in the Event of a Triggering Event................... 19
3.05 Indemnification in Other Circumstances............................... 20
3.06 Event of Last Act.................................................... 20
ARTICLE IV - GENERAL LIABILITY FOR TAXES 20
4.01 General Liability.................................................... 20
ARTICLE V - ALLOCATION OF LIABILITIES FOR TRANSFER TAXES 21
5.01 General Allocation................................................... 21
ARTICLE VI - DISAFFILIATION 21
6.01 Year End............................................................. 21
6.02 Liabilities Relating to Pre-Disaffiliation Periods for Tax
Consolidated Groups............................................... 21
6.03 Exception............................................................ 24
ARTICLE VII - CONTROL OF TAX CHALLENGES 24
7.01 Control of Challenge of Tax Claims................................... 24
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ARTICLE VIII - COOPERATION, RECORD RETENTION AND CONFIDENTIALITY 26
8.01 Cooperation and Record Retention..................................... 26
8.02 Confidentiality...................................................... 27
ARTICLE IX - TAX RETURNS 28
9.01 Tax Returns.......................................................... 28
ARTICLE X - TRANSFER PRICING ISSUES 28
10.01 Transfer Pricing Issues.............................................. 28
ARTICLE XI - DISPUTE RESOLUTION 30
11.01 Dispute Resolution Agreement to Apply................................ 30
ARTICLE XII - MISCELLANEOUS 30
12.01 Effect on Other Tax Sharing Agreements............................... 30
12.02 Counterparts......................................................... 30
12.03 Entire Agreement..................................................... 31
12.04 Inconsistencies with Separation Agreement............................ 31
12.05 After-Tax Liability.................................................. 31
12.06 Governing Law........................................................ 31
12.07 Disclaimer Regarding Tax Attributes.................................. 32
12.08 Tax Services - Conflicts............................................. 32
12.09 Tax Liability........................................................ 32
12.10 Notices.............................................................. 32
12.11 Interest............................................................. 33
12.12 Assignability........................................................ 34
12.13 Severability......................................................... 34
12.14 Waivers of Default................................................... 34
12.15 Deadlines............................................................ 34
12.16 Amendments........................................................... 34
12.17 Further Assurances................................................... 34
LIST OF SCHEDULES
SCHEDULE 2.01 (G) Repayment Transactions............................. 36
SCHEDULE 2.02(D) Certain Additional Covenants of Novelis
and Arcustarget................................. 37
SCHEDULE 2.04(B)(III) Certain Additional Covenants of AAC................ 38
TAX SHARING AND DISAFFILIATION AGREEMENT entered into in the City of Montreal,
Province of Quebec dated January __, 2005 with effect as of the Effective Date
(as defined below).
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");
AND: ARCUSTARGET INC., a corporation incorporated under the Canada
Business Corporations Act ("ARCUSTARGET");
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AND: ALCAN CORPORATION, a corporation incorporated under the laws of the
State of Texas ("AC");
AND: NOVELIS CORPORATION (FORMERLY, ALCAN ALUMINUM CORPORATION), a
corporation incorporated under the laws of the State of
Texas ("AAC").
RECITALS:
WHEREAS Alcan Group (as defined below) currently conducts the Alcan Businesses
(as defined below);
WHEREAS Alcan intends to effect a spinoff of the Separated Businesses (as
defined below) to the holders of the Alcan Common Shares (as defined below);
WHEREAS such spinoff will be achieved through (i) the Reorganization (as defined
below), by which Alcan will transfer the Separated Businesses to Arcustarget;
and (ii) the Arrangement (as defined below), by which the holders of Alcan
Common Shares will become also shareholders of Novelis, Arcustarget will become
a Subsidiary (as defined below) of Novelis and Novelis and Arcustarget will
amalgamate;
WHEREAS Alcan and Novelis have agreed on the anticipated tax consequences of the
Reorganization and the Arrangement in the jurisdictions where the transactions
forming part of the Reorganization and the Arrangement will take place;
WHEREAS Alcan intends in particular, and Novelis accepts, that:
(i) certain transactions forming part of the Separation (as defined below), for
Canadian income tax purposes, be governed by paragraph 55(3)(b) of the Tax
Act (as defined below) and sections 85.1 and 86 of the Tax Act, such that
no gain will be realized by Alcan, Novelis and Alcan Common Shareholders
(as defined below);
(ii) the Separation qualify for United States federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code (as defined
below), pursuant to which no gain or loss will be recognized for United
States federal income tax purposes by Alcan, Novelis, AC, AAC or by the
shareholders of Alcan under Section 355 of the Code and the related
provisions thereunder; and
(iii) for United States federal income tax purposes, the Separation Agreement
(as defined below) be treated as a plan of reorganization within the
meaning of the Code;
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WHEREAS the Reorganization will result in certain entities ceasing to be part of
a group of entities that in certain jurisdictions were filing, lodging or
otherwise submitting their tax returns on a consolidated, combined, unitary or
other similar basis;
WHEREAS the Parties (as defined below) desire, in connection with the
Reorganization and the Arrangement, to (i) give each other certain
representations and warranties with respect to certain tax matters, (ii) confirm
that no representations and warranties are being given with respect to certain
other tax matters, (iii) set out certain rules which shall govern their conduct
after the Separation and (iv) allocate certain obligations with respect to
certain tax matters;
WHEREAS Alcan and Novelis have entered into the Separation Agreement (the
"SEPARATION AGREEMENT") and several ancillary agreements, as amended, modified,
supplemented or restated to complete the Separation (as defined below); and
WHEREAS this Agreement (as defined below) is an "Ancillary Agreement" for the
purposes of the Separation Agreement.
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 shall have the meanings ascribed to them as
set forth herein. Capitalized words and expressions and variations thereof
not defined in this Agreement shall have the meanings ascribed to them in
Schedule 1.01 - Definitions of the Separation Agreement.
"50% INTEREST" means with respect to any corporation (within the meaning of
the Code) stock or other equity interests of such corporation possessing at
least 50 percent of the total combined voting power of all classes of stock
or equity interests entitled to vote or at least 50 percent of the total
value of shares of all classes of stock or equity interests.
"AAC GROUP" means, for any taxable period, AAC and any Subsidiaries of AAC
as of that taxable period.
"AAC" has the meaning set forth in the recitals of this Agreement.
"AAC BUSINESS" means the active conduct of the trade or business (within
the meaning of Section 355(b)(1) of the Code) by AAC of producing aluminum
rolled products and ancillary activities as carried on immediately prior to
the Effective Time.
"AC" has the meaning set forth in the recitals of this Agreement.
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"AC BUSINESS" means the active conduct by AC of a trade or business (within
the meaning of Section 355(b)(1) of the Code) other than the AAC Business.
"AC GROUP" means, for any taxable period, AC and its Subsidiaries as of
that taxable period other than members of the AAC Group.
"AFFILIATE" of any Person means any other Person that directly or
indirectly through one or more intermediaries, Controls, is Controlled by,
or is under common Control, with such first Person.
"AGREEMENT" means this Tax Sharing and Disaffiliation Agreement between the
Parties, including all of the schedules hereto, and as the same may be
amended from time to time.
"ALCAN" has the meaning set forth in the recitals of this Agreement.
"ALCAN BUSINESSES" has the meaning set forth in the Separation Agreement.
"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 3.02 of
this Agreement.
"ALCAN PECHINEY CORPORATION" means Alcan Pechiney Corporation, a Texas
Corporation.
"ALCAN PRIMARY PRODUCTS CORPORATION" means Alcan Primary Products
Corporation, a Texas Corporation.
"ALCAN PRODUCTS CORPORATION" means Alcan Products Corporation, a Texas
Corporation.
"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
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and which are to be issued pursuant to the Arrangement to Alcan Common
Shareholders in exchange, in part, for the Alcan Common Shares.
"ALCAN TAX CONSOLIDATED GROUP" means a group of Persons that are Affiliates
of Alcan and that file, lodge or otherwise submit their Tax Returns on a
consolidated, combined, unitary or similar basis.
"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.
"ARCUSTARGET" has the meaning set forth in the recitals of this Agreement.
"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.
"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).
"CANADIAN TAX RULING" means the advance income tax ruling received by Alcan
from the CRA on December 15, 2004 and as may be further revised,
supplemented or modified at the request of Alcan confirming the Canadian
federal income tax consequences of certain aspects of the Arrangement and
certain other transactions.
"CBCA" means the Canada Business Corporations Act.
"CLAIM" means any assessment or reassessment, tax inquiry, audit,
examination, investigation, dispute, litigation or other proceeding
(including, for United States federal income tax purposes, a notice of a
potential Claim such as a Form 5701 Notice of Proposed Adjustment), made by
the CRA, a Provincial Revenue Authority, the IRS or any other Taxing
Authority, that would result in any Tax liability to an Indemnitor.
"CLOSING AGENDA" means the final closing agenda relating to the
Reorganization and the Arrangement.
"CODE" means the United States Internal Revenue Code of 1986, as amended.
"CONSTITUENT DOCUMENTS" means, with respect to any Person, (a) the articles
of incorporation, certificate of incorporation, constitution or certificate
of formation (or the equivalent organizational documents) of such Person,
(b) the by-laws, operating agreement (or the equivalent governing
documents) of such Person, (c) any document setting forth the manner of
election and duties of the directors or managing members of
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such Person (if any) and the designation, amount or relative rights,
limitations and preferences of any class or series of such Person's stock
and (d) with respect to any Person organized under the laws of Canada or
any province therein, any unanimous shareholders agreement.
"CONTROL" or "CONTROLLED" means, (a) for purposes of paragraph (a) of the
definition of Triggering Event, control for purposes of the Tax Act, and
(b) for any other purpose, the presence of one of the following: (i) the
legal, beneficial or equitable ownership, directly or indirectly, of more
than 50% (by vote or value) of the capital or voting stock (or other
ownership or voting interest, if not a corporation) of such Person or (ii)
the ability, directly or indirectly, to direct the voting of a majority of
the directors of such Person's board of directors or, if such Person does
not have a board of directors, a majority of the positions on any similar
body, whether through appointment, voting agreement or otherwise.
"CRA" means the Canada Revenue Agency.
"DATE OF THE U.S. INTERNAL DISTRIBUTION" means the date on which the U.S.
Internal Distribution occurs.
"DISAFFILIATION DATE" means, for any Former Member and its relevant Alcan
Tax Consolidated Group in respect of their mutual rights and obligations
under this Agreement, the date on which such Former Member ceases to be a
member of its relevant Alcan Tax Consolidated Group in the course of or as
a result of the Separation.
"DISAFFILIATION STRADDLE PERIOD" means any Period that begins before and
ends after the Disaffiliation Date.
"DISPUTE RESOLUTION AGREEMENT" means the Agreement with Respect to Dispute
Resolution dated the Effective Date, as amended, restated or modified from
time to time, and constituting an Ancillary Agreement to the Separation
Agreement.
"EFFECTIVE DATE" has the meaning set forth in the Separation Agreement.
"EFFECTIVE TIME" means 12:00:01 a.m. E.S.T. on the Effective Date.
"FINAL DETERMINATION" means with respect to any issue (a) a decision,
judgment, decree or other order by any court of competent jurisdiction,
which decision, judgment, decree or other order has become final and is not
subject to further appeal, (b) a closing agreement (in the United States,
whether or not entered into under Section 7121 of the Code) or any other
binding settlement agreement (in the United States, whether or not with the
IRS) entered into in connection with or in contemplation of an
administrative or judicial proceeding by a Taxing Authority, or (c) the
completion of the highest level of administrative proceedings if a judicial
contest is not or is no longer available.
"FIRST GROUP" has the meaning set forth in Section 10.01.
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"FISCAL YEAR 2004" means the period beginning January 1, 2004 and ending
December 31, 2004 or on the Disaffiliation Date if such date is prior to
December 31, 2004.
"FORM 10" means the registration statement on Form 10 (including the
related information statement) relating to the listing of Novelis Common
Shares on the New York Stock Exchange and the related registration of the
class of equity securities that includes the Novelis Common Shares under
Section 12(b) of the United States Securities Exchange Act of 1934, in the
form in which it was declared effective by the Securities and Exchange
Commission.
"FORMER MEMBER" means any Person that ceases to be part of an Alcan Tax
Consolidated Group in the course of or as a result of the Separation and
that is a member of the Novelis Group on or following the Effective Time.
"GOVERNMENTAL AUTHORITY" means any court, arbitration panel, governmental
or regulatory authority, agency, stock exchange, commission or body.
"GROUP" means AAC Group, AC Group, Alcan Group, Arcustarget Group or
Novelis Group, as the context requires.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7.01.
"INDEMNITOR" has the meaning set forth in Section 7.01.
"IRS" means the United States Internal Revenue Service.
"LIABILITIES" has the meaning set forth in the Separation Agreement.
"NOVELIS" means Novelis Inc., a corporation incorporated under the CBCA,
formed to acquire under the Arrangement and independently carry on the
Separated Businesses, and to be amalgamated with Arcustarget on the
Effective Date, and, for greater certainty, includes the corporation
resulting from the amalgamation of Novelis and Arcustarget and any
successors thereto.
"NOVELIS COMMON SHARES" means the voting common shares of Novelis to be
issued to holders of Alcan Special Shares pursuant to 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 3.01.
"PARTIES" means the parties to this Agreement and, in the singular, means
any of them.
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"PERIOD" means any taxable year or other taxable period.
"PERSON" means any individual, partnership, joint venture, corporation,
limited liability company, company, trust, unincorporated organization or
Governmental Authority.
"PLAN OF ARRANGEMENT" means the plan of arrangement set out as Schedule
1.01 - "PA" of the Separation Agreement, as the same may be amended from
time to time.
"POST-DISAFFILIATION PERIOD" means any Period that begins after the
Disaffiliation Date and, in the case of any Disaffiliation Straddle Period,
that part of the Disaffiliation Straddle Period that begins after the close
of the Disaffiliation Date.
"PRE-DISAFFILIATION PERIOD" means any Period that ends on or before the
Disaffiliation Date and, in the case of any Disaffiliation Straddle Period,
that part of the Disaffiliation Straddle Period through the close of the
Disaffiliation Date.
"PRE-SEPARATION PERIOD" means any Period that ends on or before the
Effective Date.
"POST-SEPARATION PERIOD" means any taxable year or other taxable period
that begins on or after the Effective Date.
"PROVINCIAL REVENUE AUTHORITY" has the meaning set forth in the Separation
Agreement.
"REORGANIZATION" means the transactions relating to the transfers of
property, directly or indirectly, to Arcustarget set out in Part I of the
Closing Agenda.
"REORGANIZATION DOCUMENTS" has the meaning set forth in the Separation
Agreement.
"SECOND GROUP" has the meaning set forth in Section 10.01.
"SEPARATED BUSINESSES" has the meaning set forth in the Separation
Agreement.
"SEPARATION" has the meaning set forth in the Separation Agreement.
"SEPARATION AGREEMENT" has the meaning set forth in the recitals of this
Agreement.
"STRADDLE PERIOD" means any Period that begins before and ends after 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. In determining whether a Subsidiary is a Subsidiary of AAC or
AC for any period, AAC and the Subsidiaries of AAC shall not be treated as
Subsidiaries of AC.
"TAX" or "TAXES" whether used in the form of a noun or adjective, means all
forms of taxation, whenever created or imposed, including, but not limited
to, taxes on or
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measured by income, capital, franchise, gross receipts, sales, use, excise,
payroll, personal property (tangible or intangible), real property,
ad-valorem, value-added, goods and services, leasing, leasing use or other
taxes, levies, imposts, duties, charges or withholdings of any nature
whether imposed by a country, locality, municipality, government, state,
province, federation, or other Governmental Authority, including any
penalties, fines and additions to tax and any interest on tax, compounded
or otherwise.
"TAX ACT" means the Income Tax Act (Canada), as amended.
"TAX RETURNS" means all reports, returns, information statements,
questionnaires or other documents or data (whether in printed, electronic
or other form) required to be filed or that may be filed for any period
with any Taxing Authority (whether domestic or foreign) in connection with
any Tax or Taxes (whether domestic or foreign).
"TAXING AUTHORITY" means any governmental entity imposing Taxes or
empowered or authorized to administer any Taxes imposed by any country,
locality, municipality, government, state, province, federation or other
Governmental Authority.
"TRANSFER TAXES" means any transfer, sales, use, real property transfer,
goods and services, value-added, stamp, filing, recordation and similar
taxes and fees imposed in connection with the Reorganization or the
Separation. For greater certainty, Transfer Taxes shall not include income
taxes (including taxes on capital gains).
"TREASURY REGULATIONS" means the regulations promulgated by the United
States Treasury Department under the Code.
"TRIGGERING EVENT" means:
(a) for the purposes of the Tax Act, an acquisition of Control of Novelis;
or
(b) for United States federal income tax purposes, any action or actions
of or involving any Person (other than Alcan or any Person that is an
Affiliate of Alcan immediately before or immediately after such action
or actions), or any omission or omissions of such Person of an action
or actions available to it, after the Date of the U.S. Internal
Distribution, if as a result of such action(s) or omission(s) a Final
Determination is made that the Separation is not Tax-free (i) by
failing to qualify as a distribution described in Sections 355 and
368(a)(1)(D) of the Code, (ii) because any stock or securities of AAC
distributed by AC in the U.S. Internal Distribution fail to qualify as
"qualified property" within the meaning of Section 355(c)(2) of the
Code, or (iii) because Section 355(e) of the Code applies to the
Separation.
"U.S. INTERNAL DISTRIBUTION" means the distribution by AC to Alcan of all
the shares of AAC in the course of the Separation.
"UNITED STATES" means the United States of America.
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1.02 SCHEDULES
The following schedules are attached to this Agreement and form part
hereof:
Schedule 2.01 (g) Repayment Transactions
Schedule 2.02 (d) Certain Additional Covenants of Novelis and Arcustarget
Schedule 2.04 (b)(iii) Certain Additional Covenants of AAC
1.03 HEADINGS
The article, section and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
1.04 CURRENCY
Unless otherwise indicated herein, all Dollar amounts referred to in this
Agreement refer to the lawful currency of the United States and all
payments must be made in such currency.
ARTICLE II -
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.01 REPRESENTATIONS, WARRANTIES AND COVENANTS OF ALCAN IN FAVOUR OF NOVELIS
(a) Alcan represents as at the date hereof and warrants to and in favour
of Novelis as at the date hereof (and acknowledges that Novelis is
relying upon such representations and warranties in connection with
the matters contemplated by this Agreement) as follows:
(i) to the best of Alcan's knowledge, there is no "specified
shareholder" of Alcan as such expression is defined for the
purposes of paragraph 55(3.1)(b) of the Tax Act; and
(ii) all the facts relating to Alcan that are disclosed in the
Canadian Tax Ruling are true and accurate in all material
respects;
(b) Alcan covenants that it shall not, and that it shall cause each other
member of the Alcan Group not to, enter into any transaction or permit
any transaction within its control to occur that would cause Alcan or
any other member of the Alcan Group that is a corporation to cease to
be a "specified corporation" (within the meaning of the Tax Act) on or
prior to the Effective Date, except as contemplated in the Canadian
Tax Ruling, and Alcan and each such member will fulfill, and will
cause any Person Controlled by it after the Effective Date to fulfill,
all
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representations or undertakings provided by it to the CRA in
connection with the Canadian Tax Ruling;
(c) Alcan covenants that it shall not, and that it shall cause each other
member of the Alcan Group not to, take any action, omit to take any
action or enter into any transaction that could cause the Arrangement
or any related transaction to be treated in a manner inconsistent with
the Canadian Tax Ruling;
(d) Alcan covenants that it shall, and that it shall cause each other
member of the Alcan Group that is required to file Canadian Tax
Returns to, file such Tax Returns (including, for greater certainty,
any election forms under section 85 of the Tax Act) in accordance with
the terms of the Plan of Arrangement and the Canadian Tax Ruling
following the Effective Date;
(e) Alcan covenants that it shall, and that it shall cause each other
member of the Alcan Group to, cooperate with Novelis and the relevant
other members of the Novelis Group in the preparation and filing of
all elections under the Tax Act as contemplated in the Reorganization,
the Canadian Tax Ruling, the Plan of Arrangement and this Agreement
(and of any similar elections that may be required under applicable
provincial or foreign legislation); such elections shall be made in
the form and within the time limits prescribed in the Tax Act (or
applicable provincial or foreign legislation); except that Alcan may
decide, in its sole discretion, to amend or late-file such elections,
in which case Alcan shall be liable to indemnify any Novelis
Indemnified Party for any late-filing penalties; where an agreed
amount is to be included in any such election, such amount will be
within the range contemplated by the Tax Act (or applicable provincial
or foreign legislation) and will be the amount contemplated by the
Canadian Tax Ruling, the Plan of Arrangement and this Agreement, where
such amount is specified therein and, in any other case, will be the
amount determined by Alcan in its sole discretion; and
(f) Alcan covenants that it shall not, and that it shall cause each other
member of the Alcan Group not to, take any action that would be
inconsistent with the Reorganization Documents;
(g) Alcan expressly acknowledges and agrees that for United States federal
income tax purposes the Reorganization (as that term is defined in the
Separation Agreement) is intended to be treated as a reorganization
within the meaning of Section 368(a)(1)(D) of the Code and the
subsequent distribution of the Novelis Common Shares to the
shareholders of Alcan is intended to be treated as a transaction
qualifying under Section 355 of the Code. Without limiting the
generality of the foregoing, Alcan expressly acknowledges and agrees
that the transfer of the Separated Entities and the Separated Assets
(as each of those terms are defined in the Separation Agreement) to
Alcan shall occur simultaneously and pursuant to a single, integrated,
plan of reorganization within the meaning of Section 368 of the Code.
Alcan expressly acknowledges and agrees that it will treat and it
hereby adopts the Separation Agreement, as supplemented by this
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Agreement, as the plan of reorganization within the meaning of Section
368 of the Code. Furthermore Alcan expressly covenants and agrees that
all consideration received by Alcan from Arcustarget other than the
shares of capital stock of Arcustarget (such consideration the
"Non-Stock Consideration") shall be immediately converted into cash,
in accordance with the various refinancing transactions that are a
part of this plan of reorganization, and Alcan shall use such cash
immediately upon its receipt to repay the creditors referred to in
SCHEDULE 2.01(G) and otherwise in accordance with the provisions of
Section 361(b)(3) of the Code. Alcan hereby expressly covenants and
agrees to (i) convert the "Non-Stock Consideration" into cash in
accordance with the terms of this Section 2.01(g), and (ii) cause the
repayment of the Alcan creditors referred to in SCHEDULE 2.01(G) in
accordance with the terms of this Section 2.01(g).
2.02 REPRESENTATIONS, WARRANTIES AND COVENANTS OF NOVELIS IN FAVOUR OF ALCAN AND
AC
(a) Novelis covenants that it shall, and that it shall cause each other
member of the Novelis Group to, use its commercially reasonable
efforts and do all things reasonably required of it to cause the
Reorganization to be completed within the time periods contemplated by
the Separation Agreement;
(b) Novelis covenants that it shall, and that it shall cause each other
member of the Novelis Group to, use its commercially reasonable
efforts and do all things reasonably required of it to cause the
Arrangement to become effective within the time periods contemplated
by the Separation Agreement;
(c) Novelis covenants that it shall not, and that it shall cause each
other member of the Novelis Group not to, enter into any transaction
or permit any transaction within its control to occur that would cause
Alcan or any other member of the Alcan Group that is a corporation to
cease to be a "specified corporation" (within the meaning of the Tax
Act) on or prior to the Effective Date, except as contemplated in the
Canadian Tax Ruling, and Novelis and each other member of the Novelis
Group will fulfill, and will cause any Person Controlled by it after
the Effective Date to fulfill, all representations or undertakings
provided by it to the CRA in connection with the Canadian Tax Ruling;
(d) Novelis covenants that it shall not, and that it shall cause each
other member of the Novelis Group not to, take any action, omit to
take any action or enter into any transaction that could cause the
Reorganization, the Arrangement or any related transaction to be
treated in a manner inconsistent with the Canadian Tax Ruling or that
could cause the Separation to be treated other than as a Tax-free
under the Code as contemplated in the recitals of this Agreement
(including but not limited to violating any of the specific covenants
enumerated in SCHEDULE 2.02(D));
(e) Novelis covenants that it shall, and that it shall cause each other
member of the Novelis Group that is required to file Canadian Tax
Returns to, file such Tax Returns (including, for greater certainty,
any election forms under section 85 of
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the Tax Act) in accordance with the terms of the Plan of Arrangement
and the Canadian Tax Ruling following the Effective Date. To the
extent allowed by Applicable Law, Novelis shall, and shall cause each
other member of the Novelis Group to, make adjustments to its stated
capital and paid-up capital accounts in accordance with the terms of
the Plan of Arrangement and the Canadian Tax Ruling following the
Effective Date in order that the Reorganization and the Separation are
implemented on a tax efficient basis for Alcan and the other members
of the Alcan Group;
(f) Novelis covenants that it shall, and that it shall cause each other
member of the Novelis Group to, use reasonable best efforts to apply
for such amendments to the Canadian Tax Ruling and make such
amendments to the Separation Agreement as may be necessary or
desirable to obtain the Canadian Tax Ruling or to implement the Plan
of Arrangement as may be desired by Alcan (i) to enable it to
implement arrangements or carry out transactions deemed advantageous
by it for the purposes of the Separation, or (ii) to achieve a tax
efficient treatment (to be determined in Alcan's discretion) of
transaction costs on a worldwide net basis;
(g) Novelis covenants that it shall, and that it shall cause each other
member of the Novelis Group to, cooperate with Alcan and the relevant
other members of the Alcan Group in the preparation and filing of all
elections under the Tax Act as contemplated in the Reorganization, the
Canadian Tax Ruling, the Plan of Arrangement and this Agreement (and
of any similar elections that may be required under applicable
provincial or foreign legislation); such elections shall be made in
the form and within the time limits prescribed in the Tax Act (or
applicable provincial or foreign legislation) except that Alcan may
decide, in its sole discretion, to amend or late-file such elections,
in which case Alcan Shall be liable to indemnify any Novelis
Indemnified Party for any late-filing penalties; where an agreed
amount is to be included in any such election, such amount will be
within the range contemplated by the Tax Act (or applicable provincial
or foreign legislation) and will be the amount contemplated by the
Canadian Tax Ruling, the Plan of Arrangement and this Agreement, where
such amount is specified therein and, in any other case, will be the
amount determined by Alcan in its sole discretion;
(h) Novelis covenants that it shall not, and that it shall cause each
other member of the Novelis Group not to, make any Tax election, pay
or cause to be paid any distribution from a member of the Novelis
Group or take any other action that could cause an actual increase in
the Taxes for which a member of the Alcan Group is responsible or that
will cause an actual reduction in the amount of any refund of Taxes
payable to a member of the Alcan Group other than as a result of the
Separation;
(i) Novelis represents as at the date hereof, warrants and covenants to
and in favour of Alcan and AC as follows:
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(i) for United States federal income tax purposes, Novelis has the
plan and intention to and will from the date of this Agreement
until two (2) years after the Effective Date (A) maintain AAC's
status as a corporation directly engaged in the active conduct of
the AAC Business, and (B) take all actions to carry out, and not
take any action that would prevent or be inconsistent with the
completion of, the transactions contemplated by the Separation
Agreement; and
(ii) there is no plan or intention to, and no Person will from the
date of this Agreement until two (2) years after the Effective
Date (A) take any action that would result in AAC ceasing to be
directly engaged in the active conduct of the AAC Business, (B)
redeem or otherwise repurchase (directly or through an Affiliate
of AAC, Arcustarget or Novelis or any of their respective
successors) any of AAC's, Arcustarget's or Novelis' outstanding
stock, other than as part of the Arrangement or through stock
purchases meeting the requirements of Section 4.05(1)(b) of
Revenue Procedure 96-30, 1996-1 C.B. 696, (C) amend the
Constituent Documents of AAC, Arcustarget or Novelis or any of
their respective successors or take any similar action that would
affect the relative voting rights of separate classes of their
respective stock or convert one class of AAC's, Arcustarget's or
Novelis' stock into another class of their respective stock, (D)
liquidate or partially liquidate AAC or its Subsidiaries, (E)
merge AAC, Arcustarget or Novelis with any other corporation
(otherwise than by the amalgamation of Arcustarget and Novelis as
part of the Arrangement) or sell or otherwise dispose of (other
than in the ordinary course of AAC's, Arcustarget's or Novelis'
respective businesses) the assets of AAC or its Subsidiaries, or
(F) take any other action or actions that in the aggregate would
likely have the effect that any Person (other than Novelis or
Arcustarget as part of the Plan of Arrangement) will acquire, as
part of a plan or series of related transactions, stock of AAC,
Arcustarget or Novelis (or any of their respective successors)
representing a 50% Interest in AAC, Arcustarget or Novelis (or
their respective successors); and
(j) Novelis covenants that it shall not, and that it shall cause each
other member of the Novelis Group not to, take any action that would
be inconsistent with the Reorganization Documents;
(k) Novelis expressly acknowledges and agrees that for United States
federal income tax purposes the Reorganization (as that term is
defined in the Separation Agreement) is intended to be treated as a
reorganization within the meaning of Section 368(a)(1)(D) of the Code
and the subsequent distribution of the Novelis Common Shares to the
shareholders of Alcan is intended to be treated as a transaction
qualifying under Section 355 of the Internal Revenue Code. Without
limiting the generality of the foregoing, Novelis expressly
acknowledges and agrees that the transfer of the Separated Entities
and the Separated Assets (as each of those terms are defined in the
Separation Agreement) to Novelis shall occur
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simultaneously and pursuant to a single, integrated, plan of
reorganization within the meaning of Section 368 of the Code. Novelis
expressly acknowledges and agrees that it will treat and it hereby
adopts the Separation Agreement as supplemented by this Agreement as
the plan of reorganization within the meaning of Section 368 of the
Code. Furthermore Novelis expressly covenants and agrees that all
consideration received by Alcan from Arcustarget other than the shares
of capital stock of Arcustarget shall be immediately converted into
cash, in accordance with the various refinancing transactions that are
a part of this plan of reorganization, and Alcan shall use such cash
immediately upon its receipt to repay the creditors referred to in
SCHEDULE 2.012.01(G) and otherwise in accordance with the provisions
of Section 361(b)(3) of the Code. Novelis hereby expressly covenants
and agrees to (i) convert the "Non-Stock Consideration" into cash in
accordance with the terms of this Section 2.02(k), and (ii) cause the
repayment of the Alcan creditors referred to in SCHEDULE 2.012.01(G)
in accordance with the terms of this Section 2.02(k).
2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF AC IN FAVOUR OF AAC AND
NOVELIS
AC represents as at the date hereof, warrants and covenants to and in
favour of AAC and Novelis as follows:
(a) to the fullest extent possible under United States federal income and
state Tax laws, it shall, and it shall cause its Affiliates to, treat
the Separation as tax-free under Sections 355 and 368(a)(1)(D) for all
United States federal and state Tax purposes;
(b) for United States federal income tax purposes,
(i) AC has the plan and intention to and will from the date of this
Agreement until two (2) years after the Effective Date (A)
maintain AC's status as a corporation directly engaged in the
active conduct of the AC Business, and (B) take all actions
necessary to carry out, and not take any action that would
prevent or be inconsistent with the completion of, the
transactions contemplated by the Separation Agreement; and
(ii) there is no plan or intention to, and no Person will from the
date of this Agreement until two (2) years after the Effective
Date (A) take any action that would result in AC ceasing to be
directly engaged in the active conduct of the AC Business, (B)
redeem or otherwise repurchase (directly or through an Affiliate
of AC or Alcan), any of AC's or Alcan's outstanding stock, other
than as part of the Arrangement or through stock purchases
meeting the requirements of Section 4.05(1)(b) of Revenue
Procedure 96-30, 1996-1 C.B. 696, (C) amend the Constituent
Documents of AC or Alcan or take any similar action that would
affect the relative voting rights of separate classes of their
respective stock or convert one class of AC's or Alcan's stock
into another class of their respective stock, (D) liquidate or
partially liquidate AC, (E) merge AC or Alcan with any
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other corporation or sell or otherwise dispose of (other than in
the ordinary course of business) the assets of the AC Business,
or (F) take any other action or actions that in the aggregate
would likely have the effect that any Person (other than pursuant
to the Separation Agreement) will acquire, as part of a plan or
series of related transactions, stock of AC or Alcan representing
a 50% Interest in AC or Alcan (or their respective successors);
(c) AC covenants that it shall not, and that it shall cause its Affiliates
not to, take any action that would be inconsistent with any of the
representations, warranties or covenants contained in this Section
2.03; and
(d) AC covenants that it shall not, and it shall cause each other member
of the AC Group not to, make any Tax election, pay or cause to be paid
any distribution from an Affiliate or take any other action that could
cause an actual increase in the Taxes for which a member of the AAC
Group is responsible or that will cause an actual reduction in the
amount of any refund of Taxes payable to a member of the AAC Group
other than as a result of transactions forming part of the Separation.
2.04 REPRESENTATIONS, WARRANTIES AND COVENANTS OF AAC IN FAVOUR OF AC AND ALCAN
AAC represents as at the date hereof, warrants and covenants to and in
favour of AC and Alcan as follows:
(a) to the fullest extent possible under United States federal income and
state Tax laws, it shall, and shall cause its Affiliates to, treat the
Separation as tax-free under Sections 355 and 368(a)(1)(D) for all
United States federal and state purposes;
(b) for United States federal income tax purposes,
(i) AAC has the plan and intention to and will from the date of this
Agreement until two (2) years after the Effective Date (A)
maintain AAC's status as a corporation directly engaged in the
active conduct of the AAC Business, and (B) take all actions
necessary to carry out, and not take any action that would
prevent or be inconsistent with the completion of, the
transactions contemplated by the Separation Agreement; and
(ii) there is no plan or intention to, and no Person will from the
date of this Agreement until two (2) years after the Effective
Date (A) take any action that would result in AAC ceasing to be
directly engaged in the active conduct of the AAC Business, (B)
redeem or otherwise repurchase (directly or through an Affiliate
of AAC, Arcustarget or Novelis, or any of their respective
successors) any of AAC's, Arcustarget's or Novelis' outstanding
stock, other than as part of the Arrangement or through stock
purchases meeting the requirements of Section 4.05(1)(b) of
Revenue Procedure 96-30, 1996-1 C.B. 696, (C) amend the
Constituent Documents
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of AAC, Arcustarget or Novelis or any of their respective
successors other than as part of the Arrangement, or take any
similar action that would affect the relative voting rights of
separate classes of their respective stock or convert one class
of AAC's, Arcustarget's or Novelis' stock into another class of
their respective stock, (D) liquidate or partially liquidate AAC
or its Subsidiaries, (E) merge AAC, Arcustarget or Novelis with
any other corporation (otherwise than by the amalgamation of
Arcustarget and Novelis as part of the Arrangement) or sell or
otherwise dispose of (other than in the ordinary course of AAC's,
Arcustarget's or Novelis' respective businesses) the assets of
AAC or its Subsidiaries, or (F) take any other action or actions
that in the aggregate would likely have the effect that any
Person (other than Novelis or Arcustarget pursuant to
Reorganization Documents and the Plan of Arrangement) will
acquire, as part of a plan or series of related transactions,
stock of AAC, Arcustarget or Novelis (or any of their respective
successors) representing a 50% Interest in AAC, Arcustarget,
Novelis (or their respective successors);
(iii) AAC shall not, and shall cause any Affiliate of AAC not to, take
any action, omit to take any action or enter into any transaction
that could cause the Separation to be treated other than as a
tax-free under the Code as contemplated in the recitals of this
Agreement (including but not limited to violating any of the
specific covenants enumerated in SCHEDULE 2.04(B)(III)).
(c) Novelis and AAC covenant that they shall not, and that they shall
cause each other member of the AAC Group not to, make any Tax
election, pay or cause to be paid any distribution from an Affiliate
or take any other action that could cause an actual increase in the
Taxes for which a member of the AC Group is responsible or that will
cause an actual reduction in the amount of any refund of Taxes payable
to a member of the AC Group other than as a result of transactions
forming part of the Separation; and
(d) AAC covenants that it shall not, and that it shall cause its
Affiliates not to, take any action that would be inconsistent with any
of the representations, warranties or covenants contained in this
Section 2.04.
2.05 REPRESENTATIONS, WARRANTIES AND COVENANTS OF NOVELIS AND ARCUSTARGET IN
FAVOUR OF AC
Novelis and Arcustarget represent as at the date hereof, warrant and
covenant to and in favour of AC as at the date hereof as follows:
(a) for United States federal income tax purposes,
(i) Novelis and Arcustarget have the plan and intention to and will
from the date of this Agreement until two (2) years after the
Effective Date (A) maintain AAC's status as a corporation engaged
in the active conduct
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of the AAC Business, and (B) take all actions necessary to carry
out, and not take any action that would prevent or be
inconsistent with the completion of, the transactions
contemplated by the Separation Agreement; and
(ii) there is no plan or intention to, and no Person will from the
date of this Agreement until two (2) years after the Effective
Date (A) take any action that would result in AAC ceasing to be
directly engaged in the active conduct of the AAC Business, (B)
redeem or otherwise repurchase (directly or through an Affiliate
of AAC, Arcustarget or Novelis, or any of their respective
successors) any of AAC's, Arcustarget's or Novelis' outstanding
stock, other than as part of the Arrangement or through stock
purchases meeting the requirements of Section 4.05(1)(b) of
Revenue Procedure 96-30, 1996-1 C.B. 696, (C) amend the
Constituent Documents of AAC, Arcustarget or Novelis or any of
their respective successors other than as part of the Arrangement
or take any similar action that would affect the relative voting
rights of separate classes of their respective stock or convert
one class of AAC's, Arcustarget's or Novelis' stock into another
class of their respective stock, (D) liquidate or partially
liquidate AAC or its Subsidiaries, (E) merge AAC, Arcustarget or
Novelis with any other corporation (otherwise than by the
amalgamation of Arcustarget and Novelis as part of the
Arrangement) or sell or otherwise dispose of (other than in the
ordinary course of AAC's, Arcustarget's or Novelis' respective
businesses) the assets of AAC or its Subsidiaries, or (F) take
any other action or actions that in the aggregate would likely
have the effect that any Person (other than Novelis or
Arcustarget pursuant to the Reorganization Documents and the Plan
of Arrangement) will acquire, as part of a plan or series of
related transactions, stock of AAC, Arcustarget or Novelis (or
any of their respective successors) representing a 50% Interest
in AAC, Arcustarget or Novelis (or their respective successors);
and
(b) Novelis and Arcustarget covenant that they shall not, and that they
shall cause their Affiliates not to, take any action that would be
inconsistent with any of the representations, warranties or covenants
contained in this Section 2.05.
2.06 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) The representations and warranties of the Parties contained in this
Article II shall survive the Effective Date until sixty (60) days
after the expiry of all applicable prescription periods or statutes of
limitation (giving effect to any waiver, mitigation or extension
thereof) after which no assessment, reassessment or other notice or
document assessing liability for Taxes for a taxation year or taxable
period (or other relevant period) may be issued to the relevant Party
pursuant to any Applicable Law.
(b) Except as otherwise expressly set out herein, the covenants under this
Article II shall survive indefinitely.
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ARTICLE III -
INDEMNIFICATION
3.01 INDEMNIFICATION BY ALCAN
Alcan shall indemnify, defend and hold harmless Novelis and each other
member of the 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 a breach of a representation, warranty or covenant of
Alcan or AC in this Agreement.
3.02 INDEMNIFICATION BY NOVELIS
Novelis shall indemnify, defend and hold harmless Alcan and each other
member of the Alcan Group and each of their respective directors, officers
and employees, and each of the heirs, executors, trustees, administrators,
successor 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 a
breach of a representation, warranty or covenant of Novelis, AAC or
Arcustarget in this Agreement.
3.03 INDEMNIFICATION IN THE EVENT OF MUTUAL BREACH
Notwithstanding Sections 3.01 and 3.02 of this Agreement, Alcan shall not
be liable to indemnify any Novelis Indemnified Party under Section 3.01,
and Novelis shall not be liable to indemnify any Alcan Indemnified Party
under Section 3.02, from and against a Liability, if such Liability is
caused by the combined and simultaneous action of both (i) one or more
members of the Alcan Group and (ii) one or more members of the Novelis
Group.
3.04 INDEMNIFICATION IN THE EVENT OF A TRIGGERING EVENT
If (i) the Tax consequences to the transactions described in the Canadian
Tax Ruling differ from those set out in the Canadian Tax Ruling or if the
Tax consequences to the Separation differ from those set out in the
recitals of this Agreement, (ii) Sections 3.01, 3.02 and 3.03 do not apply
and (iii) such different Tax consequences result from a Triggering Event,
then Novelis shall indemnify the Alcan Indemnified Parties from and against
any Liability relating to, arising out of or resulting from such different
Tax consequences under the Tax Act or any other similar or equivalent
Canadian federal or provincial Tax legislation or the Code, even if such
Triggering Event does not result from any action or omission of any member
of the Novelis Group.
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3.05 Indemnification in Other Circumstances
If (i) the Tax consequences to the transactions described in the Canadian
Tax Ruling differ from those set out in the Canadian Tax Ruling or if the
Tax consequences to the Separation differ from those set out in the
recitals of this Agreement and (ii) Sections 3.01, 3.02, 3.03 and 3.04 do
not apply, then no indemnity shall be provided for under this Agreement
except in the circumstances and to the extent provided for in Sections 4 to
6 and 10.
3.06 EVENT OF LAST ACT
For greater certainty:
(a) Alcan will be liable under Section 3.01 of this Article III and
Novelis will not be liable under Section 3.02 of this Article III even
though the action of the member of the Alcan Group that precipitated
the Liability of Alcan was preceded by one or more actions of one or
more members of the Novelis Group that, in and by themselves, would
not have precipitated the Liability of Novelis;
(b) Novelis will be liable under Section 3.02 of this Article III and
Alcan will not be liable under Section 3.01 of this Article III even
though the action of the member of the Novelis Group that precipitated
the Liability of Novelis was preceded by one or more actions of one or
more members of the Alcan Group that, in and by themselves, would not
have precipitated the Liability of Alcan;
(c) Novelis will be liable under Section 3.04 of this Article III and
Alcan will not be liable under Section 3.01 of this Article III even
though the last action that made a Triggering Event happen was
preceded by one or more actions of one or more members of the Alcan
Group that, in and by themselves, would not have precipitated the
Liability of Alcan.
ARTICLE IV -
GENERAL LIABILITY FOR TAXES
4.01 GENERAL LIABILITY
(a) Except as set forth in Sections 5.01 and 6.02, Novelis and the other
members of the Novelis Group shall be liable for and shall indemnify
and hold harmless any member of the Alcan Group against Taxes relating
to any Pre-Separation Period, Post-Separation Period or Straddle
Period of any Person that is a member of the Novelis Group on or
following the Effective Time.
(b) Except as set forth in Sections 5.01 and 6.02, Alcan and the other
members of the Alcan Group shall be liable for and shall indemnify and
hold harmless any member of the Novelis Group against Taxes relating
to any Pre-Separation
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Period, Post-Separation Period or Straddle Period of any Person that
is a member of the Alcan Group on or following the Effective Time.
ARTICLE V -
ALLOCATION OF LIABILITIES FOR TRANSFER TAXES
5.01 GENERAL ALLOCATION
Each Person that acquires property of any kind or to whom shares are issued
in the course of the Reorganization shall be liable for the Transfer Taxes
payable in respect of such acquisition of property or share issuance.
ARTICLE VI - DISAFFILIATION
6.01 YEAR END
To the extent permitted by Applicable Law or administrative practice, the
taxable year or taxable period of any Former Member whose taxable year or
taxable period does not end on or immediately before the Disaffiliation
Date, shall close on or immediately before the Disaffiliation Date; such
taxable year or taxable period shall be considered a Pre-Disaffiliation
Period.
6.02 LIABILITIES RELATING TO PRE-DISAFFILIATION PERIODS FOR TAX CONSOLIDATED
GROUPS
(a) Notwithstanding Section 4.01 and subject to Applicable Law:
(i) Novelis shall be liable for and shall indemnify and hold the
Alcan Group harmless against (A) any Tax liability of any Former
Member for any Pre-Disaffiliation Period, as determined in a
manner consistent with past practice and in accordance with the
Alcan Group's intragroup method of income tax allocation, or, in
the absence thereof, any other permissible allocation methodology
as determined by Alcan, and (B) any Tax liability resulting from
a Final Determination with respect to an adjustment attributable
to such Former Member for any Pre-Disaffiliation Period. Such
Former Member shall be entitled to any refund of, or credit for,
Taxes of such Former Member or amounts owed by such Former Member
or for which such Former Member is responsible under this
paragraph (i) of this Section 6.02(a). Any liability for Taxes
under this paragraph (i) of this Section 6.02(a) shall be
measured by the relevant Alcan Tax Consolidated Group's actual
liability for Taxes after applying Tax benefits otherwise
available to such Alcan Tax Consolidated Group other than Tax
benefits that such Alcan Tax Consolidated Group in good faith
determines would actually offset Tax liabilities of such Alcan
Tax Consolidated Group in other taxable years or periods. Any
right to refund under this paragraph (i) of this Section 6.02(a)
shall be measured by the actual refund or credit of such Alcan
Tax Consolidated Group attributable to the
-22-
adjustment without regard to offsetting Tax attributes or
liabilities of such Alcan Tax Consolidated Group; and
(ii) Alcan shall be liable for and shall hold any Former Member
harmless against any liability attributable to any member of an
Alcan Tax Consolidated Group (other than Persons who are members
of the Novelis Group on or following the Effective Time) for any
Pre-Disaffiliation Period, including any liability for Taxes
asserted against any member of an Alcan Tax Consolidated Group
under provisions that impose several liability on members of an
affiliated group of corporations that files returns on a
consolidated, combined, unitary or similar basis in respect of
Taxes of any member of such Alcan Tax Consolidated Group (other
than Persons who are members of the Novelis Group on or following
the Effective Time). Alcan shall be entitled to any refund of or
credit for Taxes for any periods that are attributable to such
Alcan Tax Consolidated Group or amounts owed by such Alcan Tax
Consolidated Group or for which such Alcan Tax Consolidated Group
is responsible under this paragraph (ii) of this Section 6.02(a).
(b) Alcan shall determine, and Novelis shall cause every Former Member to
pay, the final amount owed, if any, under clause (A) of Section
6.02(a)(i) for the Fiscal Year 2004 as follows:
(i) within sixty (60) days from the Disaffiliation Date, Novelis
shall, and shall cause such Former Member to, provide Alcan with
a complete information package for income tax purposes in the
customary Alcan format for such Former Member's Fiscal Year 2004,
setting forth the operating and nonoperating tax and financial
results in sufficient detail to enable Alcan to compute such
Former Member's Fiscal Year 2004 Tax liability;
(ii) Alcan will calculate in accordance with the principles of this
Agreement and consistent with past practice an estimate of such
Former Member's Fiscal Year 2004 Tax liability and submit the
calculation to such Former Member within thirty (30) days after
the date on which the tax package described in paragraph (i) of
this Section 6.02(b) is provided to Alcan;
(iii) the Former Member shall have the right to object in writing to
such calculation within thirty (30) days after the date on which
the tax package described in paragraph (i) of this Section
6.02(b) is provided to Alcan, on the grounds that there is
substantial authority that such calculation is incorrect;
provided that if the Former Member so objects:
(1) Alcan and the Former Member shall promptly submit the
dispute to an independent accounting or law firm acceptable
to both Alcan and the Former Member for prompt resolution,
whose decision shall be final and binding on Alcan and the
Former Member; and
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(2) the party that such accounting or law firm determines has
lost the dispute shall pay all of the fees and expenses
incurred in connection with submitting such dispute;
(iv) the Former Member shall pay to Alcan the amount determined
according to paragraphs (ii) and (iii) of this Section 6.02(b) at
least five (5) Business Days prior to the date on which such
amount is payable to the competent Tax Authority; and
(v) a determination of the final amount owed, if any, under
paragraphs (ii) and (iii) of this Section 6.02(b) by the Former
Member to Alcan shall be made when the Alcan Tax Consolidated
Group's Fiscal Year 2004 Tax Returns are filed and such final
amount shall be paid within thirty (30) days from the date Alcan
notifies the Former Member of any additional amounts due,
together with interest thereon from the date on which such Tax
Return is filed, and amounts owed by Alcan to the Former Member
as a refund of an overpayment shall be refunded by Alcan within
thirty (30) days, together with interest thereon from the date on
which Alcan receives a refund of such amount.
(c) To the extent permitted under applicable Tax laws, Novelis shall, and
shall cause each Former Member to, make the appropriate elections to
waive any option to carryback any net operating loss, any credits or
any similar item to Pre-Disaffiliation Periods in respect of any Tax
Returns that are filed by or for an Alcan Tax Consolidated Group. To
the extent such an election is not permitted under applicable Tax
laws, any Former Member shall be entitled to carryback any net
operating loss or other item from a Post-Disaffiliation Period to a
Disaffiliation Straddle Period or Pre-Disaffiliation Period, except to
the extent that Alcan determines in good faith that such action will
cause an actual increase in the Taxes for which the Alcan Group is
responsible or will cause an actual reduction in the amount of any
refund of Taxes payable to the Alcan Group. Any refund of Taxes
resulting from any such carryback by a Former Member shall be payable
to such Former Member not later than twenty (20) days after the
receipt or crediting of a refund, together with interest thereon from
the date on which the refund (together with the interest thereon) is
actually received or credited.
(d) Subject to paragraphs (a) to (c) of this Section 6.02, if, in the
course of or as a result of the Separation, a Former Member ceases to
be a part of an Alcan Tax Consolidated Group, the following rules
shall apply:
(i) the disaffiliation or deconsolidation of such Person from the
Alcan Tax Consolidated Group shall be treated according to
Applicable Law;
(ii) if, under Applicable Law, there is more than one method of
implementing or treating such disaffiliation or deconsolidation
or if elections can or are required to be made in connection with
such disaffiliation or deconsolidation, Alcan shall, in its sole
discretion, choose the proper
-24-
method or treatment and make the relevant election or decide how
any such election should be made, in which case, Novelis and the
other members of the Novelis Group shall be bound by Alcan's
choice, decision and elections. Novelis shall, and shall cause
all other members of the Novelis Group to, file all Tax Returns
consistent with Alcan's choice and elections and, where required,
join in the making of the relevant elections and otherwise
cooperate with Alcan; and
(iii) if Applicable Law is silent about such disaffiliation or
deconsolidation, Alcan shall decide, in its sole discretion, how
such disaffiliation or deconsolidation should be implemented or
treated, and Novelis and the other members of the Novelis Group
shall be bound by any decision made by Alcan in this respect and
shall be required to take whatever action is required to give
effect to such decision. Novelis shall, and shall cause all other
members of the Novelis Group to, file all Tax Returns consistent
with Alcan's choice and elections and, where required, join in
the making of the relevant elections and otherwise cooperate with
Alcan.
6.03 EXCEPTION
Sections 6.01 and 6.02 shall not apply to a Former Member that ceases to be
part of an Alcan Tax Consolidated Group in the course of or as a result of
the Separation if such Former Member and every other member of such Alcan
Tax Consolidated Group are members of the Novelis Group on or following the
Effective Time. For greater certainty, if a group of Persons forms a
sub-group within a larger Alcan Tax Consolidated Group, the exception set
forth in the preceding sentence shall apply only if all members of the
larger group are members of the Novelis Group on or following the Effective
Time.
ARTICLE VII -
CONTROL OF TAX CHALLENGES
7.01 CONTROL OF CHALLENGE OF TAX CLAIMS
(a) If a member of the Alcan Group or a member of the Novelis Group (the
"INDEMNIFIED PARTY") receives a Claim that could give rise to an
indemnification under this Agreement, the Indemnified Party, if a
member of the Alcan Group, shall promptly notify Novelis, and if a
member of the Novelis Group shall promptly notify Alcan, (in each case
the recipient of the notification being the "INDEMNITOR").
(b) The Indemnified Party agrees to contest any Claim and not to settle
any Claim without the prior written consent of the Indemnitor,
provided that within thirty (30) days after notice of a Claim by the
Indemnified Party to the Indemnitor:
(i) the Indemnitor requests in writing that such Claim be contested
by the Indemnified Party;
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(ii) the Indemnitor shall have provided an opinion of an independent
tax counsel, selected by the Indemnitor and reasonably acceptable
to the Indemnified Party, to the effect that it is more likely
than not that a Final Determination will be substantially
consistent with the Indemnitor's position relating to such Claim;
and
(iii) the Indemnitor agrees in writing to pay on demand and pays all
out-of-pocket costs, losses and expenses (including, but not
limited to, legal and accounting fees) paid or incurred by the
Indemnified Party in connection with contesting such Claim.
(c) Where a Claim is being contested, and regardless of whether the
Indemnified Party is a member of the Alcan Group or of the Novelis
Group, Alcan shall determine, in its sole discretion, the nature of
all actions to be taken to contest such Claim, including:
(i) whether any action to contest such Claim shall initially be by
way of judicial or administrative proceeding, or both;
(ii) whether any such Claim shall be contested by resisting payment
thereof or by paying the same and seeking a refund thereof; and
(iii) the court or other judicial body before which judicial action,
if any, shall be commenced.
(d) The Indemnitor shall be entitled to participate in contesting any such
Claim at its own expense. To the extent the Indemnitor is not
participating, the Indemnified Party shall keep the Indemnitor and,
upon written request by the Indemnitor, its counsel, informed as to
the progress of the contest.
(e) If the Indemnitor requests that the Indemnified Party accept a
settlement of a Claim offered by a Taxing Authority and if such Claim
may, in the reasonable discretion of the Indemnified Party, be settled
without prejudicing any claims a Taxing Authority may have with
respect to matters other than the transactions contemplated by the
Separation Agreement, the Indemnified Party shall either:
(i) accept such settlement offer; or
(ii) agree with the Indemnitor that the Indemnitor's liability with
respect to such Claim shall be limited to the lesser of (A) an
amount calculated on the basis of such settlement offer plus
interest owed to the Taxing Authority on the date of eventual
payment, or (B) the amount calculated on the basis of a Final
Determination.
(f) Except as provided below in this paragraph (f), the Indemnified Party
shall not settle a Claim that the Indemnitor is entitled to require
the Indemnified Party to contest under paragraph (b) of this Section
7.01, without the prior written consent of the Indemnitor. At any
time, whether before or after commencing to take any
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action pursuant to this Section 7.01 with respect to any Claim, the
Indemnified Party may decline to take action with respect to such
Claim and may settle such Claim without the prior written consent of
the Indemnitor by notifying the Indemnitor in writing that the
Indemnitor is released from its obligations to indemnify the
Indemnified Party with respect to such Claim (which notification shall
release the Indemnitor from such obligations except to the extent the
Indemnitor has previously agreed in writing that it would be willing
to have its liability calculated on the basis of a settlement offer in
accordance with paragraph (e) of this Section 7.01 with respect to any
Claim related to such Claim or based on the outcome of such Claim. If
the Indemnified Party settles any Claim or otherwise takes or fails to
take any action pursuant to this paragraph (f), the Indemnified Party
shall pay to the Indemnitor any amounts paid or advanced by the
Indemnitor with respect to such Claim (other than amounts payable by
the Indemnitor in connection with a settlement offer pursuant to
paragraph (e) of this Section 7.01)), plus interest attributable to
such amounts.
ARTICLE VIII -
COOPERATION, RECORD RETENTION AND CONFIDENTIALITY
8.01 COOPERATION AND RECORD RETENTION
(a) Alcan shall and shall cause each other member of the Alcan Group to,
and Novelis shall and shall cause each other member of the Novelis
Group to, cooperate with any member of the other Group in the conduct
of any audit or the proceedings in respect of a Pre-Separation Period
or Straddle Period. Alcan shall and shall cause each other member of
the Alcan Group to, and Novelis shall and shall cause each other
member of the Novelis Group to, execute and deliver such powers of
attorney and make available such other documents as are reasonably
necessary to carry out the intent of this Agreement. Alcan shall and
shall cause each other member of the Alcan Group to notify Novelis in
writing, and Novelis shall and shall cause each other member of the
Novelis Group to notify Alcan in writing, of any audit adjustments
which do not result in Tax liability but can be reasonably expected to
affect Tax Returns of a member of the other Group for any Period.
(b) Alcan shall and shall cause each other member of the Alcan Group to,
and Novelis shall and shall cause each other member of the Novelis
Group to, in accordance with their respective current record retention
policies and all Applicable Laws, retain records, documents,
accounting data and other information (including computer data)
necessary for the preparation, filing, review or audit of any Tax
Returns in respect of any Pre-Separation Period or Straddle Period.
(c) Alcan shall and shall cause each other member of the Alcan Group to,
and Novelis shall and shall cause each other member of the Novelis
Group to, provide to any member of the other Group reasonable access
to such records, documents,
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data and information and to personnel and premises and ensure the
cooperation of such personnel for the purpose of the review or audit
of any Tax Returns in respect of any Pre-Separation Period or Straddle
Period.
(d) Novelis shall, and shall cause each other member of the Novelis Group
to, provide to Alcan access to such records, documents, data,
information, personnel and premises of Novelis and of the other
relevant members of the Novelis Group as may be required by Alcan to
comply with the Canadian tax regime applicable to Canadian foreign
affiliates or to transfer pricing. Without limiting the generality of
the foregoing, Novelis shall cause each other member of the Novelis
Group that was a foreign affiliate (as defined in the Tax Act) of
Alcan before the Separation, upon request by Alcan, to:
(i) respond in full to the annual questionnaire of the CRA concerning
foreign affiliates (generally known as the "Foreign Affiliate
Reporting Package") within three (3) months of the receipt of
such questionnaire;
(ii) provide Alcan with complete financial statements;
(iii) respond to questions concerning Form T-106 within one (1) month
of receipt; and
(iv) respond promptly to other relevant questions for the purposes of
the foreign affiliate regime or the transfer-pricing regime in
all cases for any Pre-Separation Period or Straddle Period.
8.02 Confidentiality
(a) Alcan shall and shall cause each other member of the Alcan Group to
(i) treat in a confidential manner all information and data relating
to Novelis and every other member of the Novelis Group that it may
receive or have access to pursuant to the provisions of this Agreement
and (ii) not disclose any such information to any third party except
(A) to the extent required by Applicable Law or by an order from a
competent tribunal, (B) to the extent required to interpret, give
effect to or enforce this Agreement, (C) to tax, audit or legal
professionals on a need-to-know basis, or (D) with the prior written
consent of Novelis.
(b) Novelis shall and shall cause each other member of the Novelis Group
to (i) treat in a confidential manner all information and data
relating to Alcan and every other member of the Alcan Group that it
may receive or have access to pursuant to the provisions of this
Agreement and (ii) not disclose any such information to any third
party except (A) to the extent required by Applicable Law or by an
order from a competent tribunal, (B) to the extent required to
interpret, give effect to or enforce this Agreement, (C) to tax, audit
or legal professionals on a need-to-know basis, or (D) with the prior
written consent of Alcan.
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ARTICLE IX -
TAX RETURNS
9.01 TAX RETURNS
(a) Alcan shall prepare or cause to be prepared all Tax Returns with
respect to members of the Novelis Group, including those Tax Returns
that are filed on a consolidated, combined, unitary or similar basis,
that are required to be filed in respect of any Pre-Separation Period
or Straddle Period and Novelis shall file or shall cause such Tax
Returns to be filed by the member customarily responsible for the
filing of such Tax Returns within the period prescribed therefor.
(b) In respect of any Period other than a Pre-Separation Period or a
Straddle Period:
(i) Alcan shall, and shall cause each other responsible member of the
Alcan Group to, file or cause to be filed all Tax Returns with
respect to members of the Alcan Group; and
(ii) Novelis shall, and shall cause each other responsible member of
the Novelis Group to, file or cause to be filed all Tax Returns
with respect to members of the Novelis Group.
(c) No member of the Novelis Group shall amend any of its Tax Returns for
any Pre-Separation Period or Straddle Period without the prior written
consent of Alcan, such consent not to be unreasonably withheld or
delayed. For the purpose of the preceding sentence, it shall not be
unreasonable for Alcan to withhold its consent where such amendment
would negatively impact Alcan or any other member of the Alcan Group
as determined by Alcan in its sole discretion.
(d) For the purposes of paragraph (a) of this Section 9.01, Alcan shall be
entitled:
(i) to conclusively rely on any information or data supplied to it by
any member of the Novelis Group or by the auditors, advisors or
representatives of any member of the Novelis Group; and
(ii) subject to paragraph (b) of Section 6.02, make all determinations
or decisions that are of an elective or discretionary nature.
ARTICLE X -
TRANSFER PRICING ISSUES
10.01 TRANSFER PRICING ISSUES
(a) If any Taxing Authority proposes to increase the income of a member of
the Alcan Group or of the Novelis Group (the "FIRST GROUP") as a
result of the supply of property or services by such member of the
First Group to a member of
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the other group (the "SECOND GROUP") or by a member of the Second
Group to such member of the First Group on the basis of any
affiliation or other relationship between such persons. Alcan shall
cause the relevant member of the Alcan Group, and Novelis shall cause
the relevant member of the Novelis Group, to comply with the
principles set forth in paragraphs (b) to (g) of this Section 10.01.
(b) The relevant member of the First Group shall promptly notify the
relevant member of the Second Group as well as (i) Alcan if the
relevant member of the Second Group is a member of the Alcan Group or
(ii) Novelis if the relevant member of the Second Group is a member of
the Novelis Group.
(c) The relevant member of the First Group shall have the right to
challenge such proposed adjustment, in which the case the relevant
member of the Second Group shall cooperate with the relevant member of
the First Group including, if so requested by the relevant member of
the First Group, to (i) seek a determination in respect of such
proposed adjustment from the Taxing Authority in any jurisdiction in
which the relevant member of the Second Group is resident or carries
on business, or (ii) challenge such proposed adjustment in any such
jurisdiction. The relevant member of the First Group shall reimburse
the relevant member of the Second Group for all its reasonable
out-of-pocket expenses incurred for this purpose.
(d) Once a Final Determination has been made by the relevant Taxing
Authority with respect to the proposed adjustment, or if the relevant
member of the First Group decides not to challenge the proposed
adjustment, then the relevant member of the Second Group shall pay to
the relevant member of the First Group an amount equal to Tax savings
(including interest) or other relief that the relevant member of the
Second Group (or any other member of the Second Group, as allowed
under Applicable Law) will or may achieve or obtain as a result of
such adjustment. If the Tax savings or other relief are in the form of
a reduction of cash Taxes for the same Period or a preceding Period,
the amount payable by the relevant member of the Second Group shall be
equal to the amount of such Tax savings. In any other case, the amount
of the payment shall be equal to the net present value of such Tax
savings or other relief using an annual discount rate of 8%. Any such
payment shall be treated as a payment for the supply of property or
services by the relevant member of the First Group to the relevant
member of the Second Group which gave rise to the relevant adjustment.
In the event that the relevant member of the First Group disagrees
with the amount of the Tax savings achieved by the relevant member of
the Second Group in any jurisdiction as determined by the Taxing
Authority in such jurisdiction, paragraph (c) of this Section 10.01
shall apply mutatis mutandis.
(e) No member of the Novelis Group shall request or initiate any
adjustment described above without the prior written consent of Alcan.
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(f) The principles set out in this Article X shall apply to (i)
transactions that have already given rise to an adjustment or proposed
adjustment by a Taxing Authority, (ii) transactions completed before
the Effective Time that, as of the Effective Time, have not given rise
to an adjustment or proposed adjustment and (iii) transactions
completed on or after the Effective Time.
(g) For the purposes of this Article X, if a Person who would otherwise be
a member of the Alcan Group prior to the Effective Time is a member of
the Novelis Group on or following the Effective Time, such Person
shall be deemed, with respect to the period prior to the Effective
Time, (i) to be a member of the Novelis Group and (ii) not to be a
member of the Alcan Group.
ARTICLE XI -
DISPUTE RESOLUTION
11.01 DISPUTE RESOLUTION AGREEMENT TO APPLY
Save as provided for in paragraph (iii) of Section 6.02(b), the Dispute
Resolution Agreement among the Parties and other parties thereto shall
govern all disputes, controversies or claims (whether arising in contract,
delict, tort or otherwise) among 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), or the commercial or
economic relationship of the Parties relating hereto or thereto.
ARTICLE XII -
MISCELLANEOUS
12.01 EFFECT ON OTHER TAX SHARING AGREEMENTS
Except where Section 6.03 applies (i.e., where every member of an Alcan Tax
Consolidated Group becomes a member of the Novelis Group on or following
the Effective Time), any and all prior tax sharing agreements or practices
between any member of the Alcan Group and any Former Member shall be
terminated and superseded by this Agreement on the relevant Disaffiliation
Date for the parties to such tax sharing agreement or practice.
12.02 COUNTERPARTS
This 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 and
delivered to the other Parties.
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12.03 ENTIRE AGREEMENT
This Agreement and the Separation Agreement, 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.
12.04 INCONSISTENCIES WITH SEPARATION AGREEMENT
Where any inconsistency between a provision of this Agreement and a
provision of the Separation Agreement arises as regards to taxation
matters, the provisions of this Agreement shall prevail.
12.05 AFTER-TAX LIABILITY
The amount of any Liability for which indemnification is provided under
this Agreement or under the Separation Agreement and which is payable to an
Indemnified Party by the Indemnitor pursuant to this Agreement or by the
Indemnifying Party (as said term is defined in the Separation Agreement)
pursuant to the Separation Agreement, shall be adjusted to take into
account any tax benefit realized by the Indemnified Party or any of its
Affiliates by reason of the Liability for which indemnification is so
provided or the circumstances giving rise to such Liability. For purposes
of this Section, any tax benefit shall be taken into account at such time
as it is received by the Indemnified Party or its Affiliate. Conversely, if
any such indemnity payment received by an Indemnified Party pursuant to
this Agreement or pursuant to the Separation Agreement would constitute
income for tax purposes to such Indemnified Party, the Indemnitor or the
Indemnifying Party, as applicable, shall pay to the Indemnified Party such
additional amount as is necessary to place the Indemnified Party in the
same after tax position as it would have been in had the Liability out of
which such indemnity payment arose not occurred.
12.06 GOVERNING LAW
(a) Subject to paragraph (b) of this Section 12.06, this Agreement shall
be governed by, construed and interpreted in accordance with the laws
applicable in the Province of Quebec, irrespective of conflict of laws
principles under Quebec law, as to all matters, including matters of
validity, construction, effect, enforceability, performance and
remedies.
(b) The interpretation or application of this Agreement to matters
pertaining to Taxes that are assessed or payable in jurisdictions
other than Canada shall be governed by the laws of that other
jurisdiction irrespective of conflict of laws principles under the
laws of such jurisdiction, as to all matters, including matters of
validity, construction, effect, enforceability, performance and
remedies, and where such other jurisdiction is the United States, the
laws of the State of New York shall apply.
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12.07 DISCLAIMER REGARDING TAX ATTRIBUTES
Except as specifically provided in this Agreement, no representation or
warranty is being made by Alcan or any other member of the Alcan Group in
this Agreement regarding the tax attributes of the properties or entities
that are to be transferred, directly or indirectly, to Arcustarget or
Novelis as part of the Reorganization or the Arrangement.
12.08 TAX SERVICES - CONFLICTS
For a period of two (2) years following the Effective Date, Novelis shall
not, and shall cause each other member of the Novelis Group not to, use the
services in the area of taxation of any accounting or law firm that
rendered professional services in the area of taxation to Alcan or to any
other member of the Alcan Group in connection with the Separation, except
with the prior written consent of Alcan.
12.09 TAX LIABILITY
For the purposes of Articles IV, V, VI and X of this Agreement, when, under
Applicable Law, the primary liability for a Tax rests with one Person but
another Person is also liable to pay such Tax or any portion thereof (or an
amount equal to such Tax or any portion thereof) due to the relationship
between such Persons or as a result of a payment or other transaction
between such Persons, such Tax shall be considered as a Tax of the first
Person and not as a Tax of the second Person.
12.10 NOTICES
All notices and other communications under this Agreement shall be in
writing and shall be deemed to be duly given (a) on the date of delivery,
if delivered personally, (b) on the first Business Day following the day of
dispatch if delivered by a nationally recognized next-day courier service,
(c) on the date of actual receipt if delivered by registered or certified
mail, return receipt requested, postage prepaid or (d) if sent by facsimile
transmission, when transmitted and receipt is confirmed by telephone. All
notices hereunder shall be delivered as follows:
If to Alcan, to:
Alcan Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Legal Officer
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With a copy to:
Alcan Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Tax Officer
If to Novelis or Arcustarget, to:
Novelis Inc.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
If to AC, to:
Alcan Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
If to AAC, to:
Novelis Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇.▇.▇.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Any Party may, by notice to the other Parties, change the address or
facsimile number to which such notices are to be given.
12.11 INTEREST
Where in this Agreement an amount of interest is stipulated to be payable,
such interest shall be computed at an annual rate of 7% unless otherwise
specified, calculated on the basis of a year of 365 or 366 days, as
applicable, for the actual number of days elapsed, accrued from and
excluding the date on which the principal amount with respect to which such
interest is payable is due and payable, up to and including the date of
payment.
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12.12 ASSIGNABILITY
This 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 no Party hereto may assign its
respective rights or delegate its respective obligations under this
Agreement without the express prior written consent of the other Party, not
to be unreasonably withheld or delayed.
12.13 SEVERABILITY
If any provision of this 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 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 is not affected in any
manner adverse to any Party. 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.
12.14 WAIVERS OF DEFAULT
Waiver by any Party of any default by another Party of any provision of
this 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.
12.15 DEADLINES
Where in this Agreement a Person is required to send a notice, make a
decision or take any other action within a certain period of time or before
a certain date or deadline, Alcan and Novelis may, by mutual agreement to
be evidenced in writing, decide to extend or shorten such period of time or
forestall or postpone such date or deadline.
12.16 AMENDMENTS
No provisions of this 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.
12.17 FURTHER ASSURANCES
Each of the Parties will promptly do, make, execute or deliver, or cause to
be done, made, executed or delivered, all further acts, documents and
things as the other Parties to this Agreement may reasonably require from
time to time for the purpose of giving effect to this Agreement and will
use reasonable efforts and take any steps as may be reasonably within its
power to implement to their full extent the provisions of this Agreement.
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[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the Parties have caused this Tax Sharing and Disaffiliation
Agreement to be executed by their duly authorized representatives.
ALCAN INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name:
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Title:
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NOVELIS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name:
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Title:
-----------------------------
ARCUSTARGET INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name:
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Title:
-----------------------------
ALCAN CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name:
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Title:
-----------------------------
-▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name:
------------------------------
Title:
-----------------------------