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TRANSITIONAL SERVICES AGREEMENT BETWEEN ALCAN INC.

Transition Agreement

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Title: TRANSITIONAL SERVICES AGREEMENT BETWEEN ALCAN INC.
Date: 3/30/2005

TRANSITIONAL SERVICES AGREEMENT BETWEEN ALCAN INC., Parties: novelis inc. , alcan inc
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<PAGE>

                                                                  EXECUTION COPY

 

                                                                    Exhibit 10.7

 

                         TRANSITIONAL SERVICES AGREEMENT

 

                                      between

 

                                   ALCAN INC.

 

                                       and

 

                                  NOVELIS INC.

 

                              Dated January 3, 2005

<PAGE>

                                TABLE OF CONTENTS

 

<TABLE>

<S>                                                                            <C>

1.   DEFINITIONS AND INTERPRETATION.........................................     1

   1.1    Definitions.......................................................     1

   1.2    Currency..........................................................     5

 

2.   TRANSITION SERVICE SCHEDULES...........................................     5

 

3.   SERVICES...............................................................     5

    3.1    Services generally................................................     5

   3.2    Service levels....................................................     6

   3.3    Impracticability..................................................     6

   3.4    Additional resources..............................................     6

 

4.   OPERATING COMMITTEE....................................................     7

   4.1    Organization......................................................     7

   4.2    Decision making...................................................     7

   4.3    Meetings..........................................................     7

 

5.   TERM...................................................................     7

 

6.   COMPENSATION...........................................................     8

   6.1    Charges for Services..............................................     8

   6.2    Payment terms.....................................................     8

   6.3    Taxes.............................................................     9

   6.4    Set off...........................................................     9

   6.5    Performance under Ancillary Agreements............................     9

   6.6    Error correction; true-Ups; accounting............................     9

 

7.   GENERAL OBLIGATIONS; STANDARD OF CARE..................................    10

   7.1    Performance metrics: Alcan Group..................................    10

   7.2    Performance Metrics: Novelis Group................................    10

   7.3    Disclaimer of warranties..........................................    11

   7.4    Transitional nature of Services; changes..........................    11

   7.5    Responsibility for errors; delays.................................    11

   7.6     Cooperation; consents.............................................    11

   7.7    Alternatives......................................................    12

   7.8    Personnel.........................................................    13

   7.9    Insurance.........................................................    13

 

8.   TERMINATION............................................................    14

   8.1    Termination.......................................................    14

   8.2    Survival..........................................................    15

   8.3    Payment...........................................................    15

   8.4    User Ids, passwords...............................................    16

</TABLE>

<PAGE>

                                       -ii-

 

 

<TABLE>

<S>                                                                            <C>

9.   RELATIONSHIP BETWEEN THE PARTIES.......................................    16

 

10. SUBCONTRACTORS.........................................................    16

 

11. INTELLECTUAL PROPERTY..................................................    17

   11.1   Allocation of rights by Ancillary Agreements......................    17

   11.2   Existing ownership rights unaffected..............................    17

   11.3   Cross license to pre-existing works...............................    18

   11.4   Third Party software..............................................    18

   11.5   Termination of Licences...........................................    18

 

12. NO OBLIGATIONS.........................................................    19

 

13. CONFIDENTIALITY........................................................    19

 

14. LIMITATION OF LIABILITY AND INDEMNIFICATION............................    20

   14.1   Indemnification...................................................    20

   14.2   Limitation of Liability...........................................    22

   14.3   Exclusions........................................................    22

   14.4   Provisions applicable with respect to Indemnification

            Obligations....................................................    23

   14.5   Survival..........................................................    23

 

15. DISPUTE RESOLUTION.....................................................    23

 

16. ASSIGNMENT.............................................................    23

   16.1   Prohibition on Assignments........................................    23

   16.2   Assignment to Alcan Group Company.................................    23

 

17. MISCELLANEOUS..........................................................    23

   17.1   Construction......................................................    23

   17.2   Notices...........................................................    24

   17.3   Governing Law.....................................................    24

   17.4   Judgment Currency.................................................    24

   17.5   Entire Agreement..................................................    24

   17.6   Conflicts.........................................................    24

   17.7   Force Majeure.....................................................    25

   17.8   Waivers...........................................................    25

   17.9   Further Assurances................................................    25

</TABLE>

 

SCHEDULES

 

Schedule 1 - Form of Transition Service Schedule to Transitional Services

Agreement

<PAGE>

                         TRANSITIONAL SERVICES AGREEMENT

 

THIS AGREEMENT entered into in the City of Montreal, Province of Quebec, is

dated January 3, 2005.

 

BETWEEN:    ALCAN INC., a corporation organized under the Canada Business

           Corporations Act ("ALCAN");

 

AND:        NOVELIS INC., a corporation incorporated under the Canada Business

            Corporations Act ("NOVELIS").

 

RECITALS:

 

WHEREAS Alcan and Novelis have entered into a Separation Agreement pursuant to

which the Parties (as defined hereinafter) set out the terms and conditions

relating to the separation of the Separated Businesses from the Remaining Alcan

Businesses (each as defined therein) such that the Separated Businesses are to

be held, as at the Effective Time (as defined therein), directly or indirectly,

by Novelis (such agreement, as amended, restated or modified from time to time,

the "SEPARATION AGREEMENT").

 

WHEREAS in connection therewith, Novelis desires that Alcan and other members of

Alcan Group, as applicable, provide Novelis and other members of Novelis Group,

as applicable, with certain transitional services with respect to the operation

of Novelis Group following the Effective Date, subject to the terms and

conditions of this Agreement.

 

WHEREAS in connection therewith, Alcan desires that Novelis and other members of

Novelis Group, as applicable, provide Alcan and other members of Alcan Group, as

applicable, with certain transitional services with respect to the operation of

Alcan Group following the Effective Date, subject to the terms and conditions of

this Agreement.

 

WHEREAS the Parties have entered into this Agreement in order to set forth such

terms and conditions.

 

NOW THEREFORE, in consideration of the mutual agreements, covenants and other

provisions set forth in this Agreement, the Parties hereby agree as follows:

 

1.    DEFINITIONS AND INTERPRETATION

 

1.1   DEFINITIONS

 

     For the purposes of this Agreement, the following words and expressions and

     variations thereof, unless a clearly inconsistent meaning is required under

     the context, shall have the meanings specified or referred to in this

     Section 1.1:

 

     "AFFILIATE" of any Person means any other Person that, directly or

     indirectly, controls, is controlled by, or is under common control with

     such first Person as of the

<PAGE>

                                       -2-

 

 

     date on which or at any time during the period for when such determination

     is being made. For purposes of this definition, "CONTROL" means the

     possession, directly or indirectly, of the power to direct or cause the

     direction of the management and policies of such Person, whether through

     the ownership of voting securities or other interests, by contract or

     otherwise, and the terms "CONTROLLING" and "CONTROLLED" have meanings

     correlative to the foregoing.

 

     "AGREEMENT" has the meaning set forth in Article 2.

 

     "ALCAN" means Alcan Inc., a corporation organized under the Canada Business

     Corporations Act.

 

     "ALCAN CONFIDENTIAL INFORMATION" has the meaning set forth in Section 13.2.

 

     "ALCAN GROUP" means Alcan and its Subsidiaries from time to time after the

     Effective Time.

 

     "ALCAN GROUP COMPANY" means any Person forming part of the Alcan Group.

 

     "ALCAN INDEMNIFIED PARTIES" has the meaning set forth in Section 14.1.

 

     "ANCILLARY AGREEMENT" has the meaning ascribed thereto in the Separation

     Agreement.

 

     "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.

 

     "BUSINESS CONCERN" means any corporation, company, limited liability

     company, partnership, joint venture, trust, unincorporated association or

     any other form of association.

 

     "BUSINESS DAY" means any day excluding (i) Saturday, Sunday and any other

     day which, in the City of Montreal (Canada) or in the City of New York

     (United States), is a legal holiday or (ii) a day on which banks are

     authorized by Applicable Law to close in the City of Montreal (Canada) or

     in the City of New York (United States).

 

     "CHIEF REPRESENTATIVE" has the meaning set forth in Section 7.8(c).

 

     "COMMERCIALLY REASONABLE EFFORTS" means the efforts that a reasonable and

     prudent Person desirous of achieving a business result would use in similar

     circumstances to ensure that such result is achieved as expeditiously as

     possible in the context of commercial relations of the type envisaged by

     this Agreement; provided, however, that an obligation to use Commercially

     Reasonable Efforts under this Agreement does not require the Person subject

     to that obligation to assume any material obligations or pay any material

     amounts to a Third Party.

<PAGE>

                                       -3-

 

 

     "CONFIDENTIAL INFORMATION" has the meaning ascribed thereto in the

     Separation Agreement.

 

     "CONSENT" means any approval, consent, ratification, waiver or other

     authorization.

 

     "CONTRACT" means any contract, agreement, lease, license, commitment,

     consensual obligation, promise or undertaking (whether written or oral and

     whether express or implied) that is legally binding on any Person or any

     part of its property under Applicable Law.

 

     "DOLLARS" or "$" means the lawful currency of the United States of America.

 

     "EFFECTIVE DATE" means the effective date of the Separation Agreement as

     therein defined.

 

     "EFFECTIVE TIME" means 12:01 a.m. Montreal time on the Effective Date.

 

     "EVENT OF DEFAULT" has the meaning set forth in Section 8.1.

 

     "EXPIRATION DATE" has the meaning set forth in Article 5.

 

     "FORCE MAJEURE EVENT" has the meaning set forth in Section 17.7.

 

     "GOVERNMENTAL AUTHORITY" means any court, arbitration panel, governmental

     or regulatory authority, agency, stock exchange, commission or body.

 

     "GOVERNMENTAL AUTHORIZATION" means any Consent, license, certificate,

     franchise, registration or permit issued, granted, given or otherwise made

     available by, or under the authority of, any Governmental Authority or

     pursuant to any Applicable Law.

 

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

 

     "IMPRACTICABILITY" has the meaning set forth in Section 3.3.

 

     "INTELLECTUAL PROPERTY AGREEMENT" means, individually or collectively, the

     Intellectual Property Agreements by and between Alcan International Limited

     and Novelis, as amended, restated or modified from time to time, and

     constituting an Ancillary Agreement to the Separation Agreement.

 

     "LIABILITIES" has the meaning ascribed thereto in the Separation Agreement.

 

     "NOVELIS" means Novelis Inc., a corporation incorporated under the Canada

     Business Corporations Act.

 

     "NOVELIS CONFIDENTIAL INFORMATION" has the meaning set forth in Section

     13.2.

 

     "NOVELIS GROUP" means Novelis and its Subsidiaries from time to time after

     the Effective Time.

<PAGE>

                                       -4-

 

 

     "NOVELIS INDEMNIFIED PARTIES" has the meaning set forth in Section 14.1.

 

     "OPERATING COMMITTEE" has the meaning set forth in Section 4.1.

 

     "PARTY" means each of Alcan and Novelis as a party to this Agreement and

     "PARTIES" means both of them.

 

     "PERMITTED PURPOSE" has the meaning set forth in Section 13.3.

 

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

 

     "PRIME RATE" means the floating rate of interest established from time to

     time by the Royal Bank of Canada (the "BANK") as the reference rate of

     interest the Bank will use to determine rates of interest payable by its

     borrowers on US dollar commercial loans made by the Bank to such borrowers

     in Canada and designated by the Bank as its "prime rate" and which shall

     change from time to time as changed by the Bank.

 

     "SALES TAXES" means any sales, use, consumption, goods and services, value

     added or similar tax, duty or charge imposed pursuant to Applicable Law.

 

     "SEPARATION AGREEMENT" has the meaning set out in the Preamble to this

     Agreement.

 

     "SERVICE(S)" has the meaning set forth in Section 3.1.

 

     "SERVICE MANAGER" has the meaning set forth in Section 7.8(c).

 

     "SERVICE PROVIDER" means Alcan or a member of Alcan Group when it is

     providing a Service to Novelis or a member of Novelis Group hereunder in

     accordance with a Transition Service Schedule, and Novelis or a member of

     Novelis Group when it is providing a Service to Alcan or a member of Alcan

     Group hereunder in accordance with a Transition Service Schedule.

 

     "SERVICE RECIPIENT" means Novelis or a member of Novelis Group when it is

     receiving a Service from Alcan or a member of Alcan Group hereunder in

     accordance with a Transition Service Schedule, and Alcan or a member of

     Alcan Group when it is receiving a Service from Novelis or a member of

     Novelis Group hereunder in accordance with a Transition Service Schedule.

 

     "SUBCONTRACTOR" has the meaning set forth in Section 10.1.

 

     "SUBSIDIARY" of any Person means any corporation, partnership, limited

     liability entity, joint venture or other organization, whether incorporated

     or unincorporated, of which of 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.

<PAGE>

                                       -5-

 

 

     "TERM" has the meaning set forth in Article 5.

 

     "THIRD PARTY" means a Person that is not a Party to this Agreement, other

     than a member of Alcan Group or a member of Novelis Group and that is not

     an Affiliate of such Group.

 

     "THIRD PARTY CLAIM" has the meaning set forth in the Separation Agreement.

 

     "TRANSITION SERVICE SCHEDULE" has the meaning set forth in Article 2.

 

1.2   CURRENCY

 

     Except as otherwise specified in a Transition Service Schedule, all

     references to currency herein are to lawful money of the United States of

     America.

 

2.    TRANSITION SERVICE SCHEDULES

 

This Agreement will govern individual transitional Services as requested by

Novelis or any other member of Novelis Group, and provided by Alcan or any other

member of Alcan Group, the details of which are set forth in the Transition

Service Schedules attached to and forming part of this Agreement. This Agreement

will also govern individual transitional Services as requested by Alcan or any

other member of Alcan Group, and provided by Novelis or any other member of

Novelis Group, the details of which are set forth in the Transition Service

Schedules attached to and forming part of this Agreement. Each Service shall be

covered by this Agreement upon execution of a transition service schedule in the

form attached hereto (each transition service schedule, a "TRANSITION SERVICE

SCHEDULE").

 

For each Service, the Parties shall set forth in a Transition Service Schedule

substantially in the form of SCHEDULE 1 hereto, among other things, (i) the time

period during which the Service will be provided if different from the Term of

this Agreement; (ii) a summary of the Service to be provided; and (iii) the

method for determining the charge, if any, for the Service and any other terms

applicable thereto. Obligations regarding a Transition Service Schedule shall be

effective upon the later of the Effective Date of this Agreement or the date of

execution of the applicable Transition Service Schedule. This Agreement and all

the Transition Service Schedules shall be defined as the "AGREEMENT" and

incorporated herein wherever reference to it is made.

 

3.    SERVICES

 

3.1   SERVICES GENERALLY

 

     Except as otherwise provided herein, for the Term hereof, (a) Alcan shall

     provide to Novelis and the other members of Novelis Group, and shall cause

     the other applicable members of Alcan Group to provide or cause to be

     provided to Novelis and the other members of Novelis Group, and (b) Novelis

     shall provide to Alcan and the other members of Alcan Group, and shall

     cause the other applicable members of

<PAGE>

                                       -6-

 

 

     Novelis Group to provide or cause to be provided to Alcan and the other

     members of Alcan Group, the Services described in the Transition Service

     Schedule(s) attached hereto identified on such Schedules as Services to be

     provided by members of Alcan Group or Novelis Group, as applicable. The

     Service(s) described on a single Transition Service Schedule shall be

     referred to herein as a "SERVICE". Collectively, the services described on

     all the Transition Service Schedules shall be referred to herein as

     "SERVICES". Alcan and Novelis shall cause the members of their respective

     Groups to, if applicable, comply with the terms and conditions set forth in

     this Agreement or in the Transition Services Schedules.

 

3.2   SERVICE LEVELS

 

     Except as otherwise provided in a Transition Service Schedule for a

     specific service: (i) a Service Provider shall provide the Services only to

     the extent such Services are being provided by Alcan or any other member of

     Alcan Group or by Arcustarget Inc. or any of its Subsidiaries immediately

     prior to the Effective Date and at a level of service substantially similar

     to that provided by Alcan or any other member of Alcan Group or by

     Arcustarget Inc. or any of its Subsidiaries immediately prior to the

     Effective Date; and (ii) the Services will be available only for purposes

     of conducting the business of the Service Recipient substantially in the

     manner it was conducted prior to the Effective Time; provided, however,

     that nothing in this Agreement will require a Party to favor the other

     Party over its other business operations. Except as otherwise provided in a

     Transition Service Schedule in respect of a specific Service, the Parties

     will not be entitled to any new service.

 

3.3   IMPRACTICABILITY

 

     A Service Provider shall not be required to provide any Service to the

     extent the performance of such Service becomes impracticable as a result of

     a cause or causes outside the reasonable control of the Service Provider,

     including unfeasible technological requirements, or to the extent the

     performance of such Services would require the Service Provider to violate

     any Applicable Law, or would result in the breach of any license,

     Governmental Authorization or Contract (an "IMPRACTICABILITY").

 

3.4   ADDITIONAL RESOURCES

 

      In accordance with Section 7.8 below and except as specifically provided in

     a Transition Service Schedule for a specific Service, in providing the

     Services, a Service Provider shall not be obligated to: (i) hire any

     additional employees; (ii) maintain the employment of any specific

     employee; (iii) purchase, lease or license any additional facilities,

     equipment or software; or (iv) pay any costs related to the transfer or

     conversion of the Service Recipient's data to the Service Provider or any

     alternate supplier of Services.

<PAGE>

                                       -7-

 

 

4.    OPERATING COMMITTEE

 

4.1   ORGANIZATION

 

     The Parties shall create an operating committee (the "OPERATING COMMITTEE")

     and shall each appoint one (1) employee to the Operating Committee for the

     Term. The Operating Committee will oversee the implementation and

     application of this Agreement and shall attempt to resolve any dispute

     between the Parties. Each of the Parties shall have the right to change its

     Operating Committee member at any time with employees of comparable

     knowledge, expertise and decision-making authority.

 

4.2   DECISION MAKING

 

     All Operating Committee decisions shall be taken unanimously. If the

     Operating Committee fails to make a decision, resolve a dispute, agree upon

     any necessary action, or if a Party so requests, in the event of a material

     breach of this Agreement, a senior officer of Alcan and a senior officer of

     Novelis, neither of whom shall have any direct oversight or responsibility

     for the subject matter in dispute, shall attempt within a period of

     fourteen (14) days to conclusively resolve any such unresolved issue.

 

4.3   MEETINGS

 

     During the Term, the Operating Committee members shall meet, in person or

     via teleconference, at least once in each week. In addition, the Operating

     Committee shall meet as often as necessary in order to promptly resolve any

     disputes submitted to it by any representative of either Party.

 

5.    TERM

 

The term of this Agreement shall commence on the Effective Date and end on

December 31, 2005 (the "EXPIRATION DATE"), unless earlier terminated under

Article 8 or extended or earlier terminated as hereinafter provided, (the

"TERM"). The Parties shall be deemed to have extended this Agreement with

respect to a specific Service if the Transition Service Schedule for such

Service specifies a completion date beyond the Expiration Date. The Parties may

agree on an earlier expiration date respecting a specific Service by specifying

such date on the Transition Service Schedule for that Service. Services shall be

provided up to and including the date set forth in the applicable Transition

Service Schedule, subject to earlier termination as provided in Article 8. It

shall be the sole responsibility of the Service Recipient, upon and after

expiration or early termination of this Agreement with respect to a specific

Service, to perform, render and provide for itself (or to make arrangements with

one or more Third Party service providers to perform, render and provide) such

Service, and to do all necessary planning and make all necessary preparations in

connection therewith.

<PAGE>

                                       -8-

 

 

6.     COMPENSATION

 

6.1   CHARGES FOR SERVICES

 

     The Service Recipient shall pay the Service Provider the charges, if any,

     set forth on the Transition Service Schedules for each of the Services

     listed therein as adjusted, from time to time, in accordance with the

     processes and procedures established under Sections 7.1 and 7.2 hereof.

     Unless specifically indicated otherwise on a Transition Service Schedule,

     such fees shall be equal to the aggregate of all direct and indirect costs

      and expenses incurred by the Service Provider in providing the Services

     plus a margin equal to five percent (5%) of all such costs and expenses. No

     margin shall be added to the cost of services supplied by external

     suppliers or subcontractors required in order to render the Services. If

     there is any inconsistency between the Transition Service Schedule and this

     Section 6.1, the terms of the Transition Service Schedule shall govern. The

     Parties also intend, having regard to the reciprocal and transitional

     nature of this Agreement and other factors, for charges to be easy to

     administer and justify; and, therefore, they hereby acknowledge that it may

     be counterproductive to try to recover every cost, charge or expense,

     particularly those that are insignificant or de minimus.

 

6.2   PAYMENT TERMS

 

     Subject to Section 6.4 and except as otherwise specified in a Transition

     Service Schedule, the Service Provider shall invoice the Service Recipient

     monthly (or on such other basis as the Parties may mutually determine) for

     all charges pursuant to this Agreement. Such invoices shall specify the

     Services provided to the Service Recipient during the preceding month and

     identifying the Service fee applicable to each Service so specified, and

     shall be accompanied by reasonable documentation or other reasonable

     explanations supporting such charges. Except as otherwise specified in a

     Transition Service Schedule, the Service Recipient shall pay, net of

     applicable withholding tax, if any, the Service Provider for all Services

     provided hereunder within thirty (30) days after receipt of an invoice

     therefor by wire transfer of immediately available funds to the account

     designated by the Service Provider for this purpose. Late payments shall

     bear interest at a rate per annum equal to the Prime Rate plus 2%,

     calculated for the actual number of days elapsed, accrued from and

     excluding the date on which such payment was due up to and including the

     date of payment.

 

     For the purpose of the Interest Act (Canada) and disclosure thereunder,

     whenever interest to be paid hereunder is to be calculated on the basis of

     a year of 360 days or any other period of time that is less than a calendar

     year, the yearly rate of interest to which the rate determined pursuant to

     such calculation is equivalent is the rate so determined multiplied by the

     actual number of days in the calendar year in which the same is to be

     ascertained and divided by either 360 or such other period of time, as the

     case may be.

<PAGE>

                                       -9-

 

 

6.3   TAXES

 

     The fees and charges payable by the Service Recipient under this Agreement

     and set forth on the Transition Service Schedules shall be exclusive of any

     Sales Taxes or excise taxes or any customs or import charges or duties or

     any similar charges or duties which may be imposed by any Governmental

     Authority in connection with the purchase or delivery of the Services or

     materials to the Service Recipient. The Service Recipient shall remit to

     the Service Provider any Sales Taxes properly payable to the Service

     Provider pursuant to this Agreement. Applicable Sales Taxes shall be

     indicated by the Service Provider separately on all of the Service

     Provider's invoices. The Parties shall co-operate with each other to

     minimize each other's applicable Sales Taxes and each shall provide the

     other with any reasonable certificates or documents which are useful for

     such purpose.

 

6.4   SET OFF

 

     Unless otherwise agreed, neither Party shall be entitled to set off against

     any amounts due to the other under this Agreement any amounts due to it

     from such other Party under this Agreement.

 

     The Parties may, by decision of the Operating Committee or otherwise, agree

     to consolidate all or any of their respective monthly invoicing under

     Section 6.2 and may further agree that the corresponding invoices will be

     discharged by set off, with the debtor of the larger invoice making payment

     of the net amount owing after deduction of the amount invoiced by such

     debtor to the other Party. Such practice, if commenced, may be discontinued

     at any time at the request of either Party. Notwithstanding any such set

     off, any amount in respect of Sales Taxes required to be remitted by one

     Party to the other Party pursuant to this Agreement shall be remitted in

     full as if no set off had occurred.

 

6.5   PERFORMANCE UNDER ANCILLARY AGREEMENTS

 

     Notwithstanding anything to the contrary contained herein, a Service

     Recipient shall not be charged under this Agreement for any obligations

     that are specifically required to be performed under the Separation

     Agreement or any other Ancillary Agreement; and any such other obligations

     shall be performed and charged for (if applicable) in accordance with the

     terms of the Separation Agreement or such other Ancillary Agreement.

 

6.6   ERROR CORRECTION; TRUE-UPS; ACCOUNTING

 

     The Parties shall agree to develop, through the Operating Committee or

     otherwise, mutually acceptable reasonable processes and procedures for

     conducting internal audits and making adjustments to charges as a result of

     the movement of employees and functions between the Parties, the discovery

     of errors or omissions in charges, as well as a true-up of amounts owed. In

     no event shall such processes and procedures extend beyond eighteen (18)

     months after completion of a Service.

<PAGE>

                                      -10-

 

 

7.    GENERAL OBLIGATIONS; STANDARD OF CARE

 

7.1   PERFORMANCE METRICS: ALCAN GROUP

 

     Subject to Sections 3.2 to 3.4 and any other terms and conditions of this

     Agreement, Alcan shall maintain, and shall cause the relevant other members

     of Alcan Group to maintain, sufficient resources to perform their

     obligations hereunder. Specific performance metrics for Alcan for a

     specific Service may be set forth in the corresponding Transition Service

     Schedule. Where none is set forth, Alcan and the other relevant members of

     Alcan Group shall use Commercially Reasonable Efforts to provide Services,

      or to cause the Services to be provided, in accordance with Alcan's

     policies, procedures, service levels and practices in effect before the

     Effective Date and shall exercise the same care and skill as Alcan

     exercises in performing similar services for itself or for the other

     members of Alcan Group. In addition, to the extent within the possession

     and control of Alcan and the other relevant members of Alcan Group, Alcan

     shall provide, and shall cause the other relevant members of Alcan Group to

     provide, Novelis and the other relevant members of Novelis Group with

     information and documentation sufficient for


 
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