Exhibit 10.15: Form of Transitional Services Agreement between Alcan Inc. and
Novelis Inc.
TRANSITIONAL SERVICES AGREEMENT
between
ALCAN INC.
and
NOVELIS INC.
Dated o, 2004
TABLE OF CONTENTS
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
- ii -
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
SCHEDULES
Schedule 1 - Form of Transition Service Schedule to Transitional Services
Agreement
Schedule o - o
TRANSITIONAL SERVICES AGREEMENT
THIS AGREEMENT entered into in the City of Montreal, Province of Quebec, is
dated o, 2004.
BETWEEN: ALCAN INC., a corporation organized under the
Canada Business Corporations Act ("ALCAN");
AND: NOVELIS INC., a corporation incorporated under the
Canada Business Corporations Act ("NOVELIS").
RECITALS:
WHEREAS Alcan and Novelis have entered into a Separation Agreement dated o, 2004
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
- 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.
- 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.
- 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.
- 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
- 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.
- 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.
- 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.
- 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.
- 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 Novelis and the other relevant members of
Novelis Group to perform the Services they are obligated to perform
hereunder as they were performed before the Effective Date and shall
make available, as reasonably requested by Novelis or the other
relevant members of Novelis Group, sufficient resources and timely
decisions, approvals and acceptances in order that Novelis and the
other relevant members of Novelis Group may perform their obligations
hereunder in a timely manner.
7.2 PERFORMANCE METRICS: NOVELIS GROUP
Subject to Sections 3.2 to 3.4 and any other terms and conditions of
this Agreement, Novelis shall maintain, and shall cause the other
relevant members of Novelis Group to maintain, sufficient resources to
perform their obligations hereunder. Specific performance metrics for
Novelis for a specific Service may be set forth in the corresponding
Transition Service Schedule. Where none is set forth, Novelis and the
other relevant members of Novelis 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 Novelis exercises in performing
similar services for itself or for the other members of Novelis Group.
In addition, to the extent within the possession and control of Novelis
and the other relevant members of Novelis Group, Novelis shall provide,
and shall cause the other relevant members of Novelis Group to provide,
Alcan and the other relevant members of Alcan Group with information
and documentation sufficient for Alcan and the other relevant members
of Alcan Group to perform the Services they are obligated to perform
hereunder as they were performed before the Effective Date and shall
make available, as reasonably requested by Alcan or the other relevant
members of Alcan Group, sufficient resources and timely decisions,
approvals and
- 11 -
acceptances in order that Alcan and the other relevant members of Alcan
Group may perform their obligations hereunder in a timely manner.
7.3 DISCLAIMER OF WARRANTIES
Except as expressly provided in this Agreement, neither Alcan nor
Novelis makes any warranties or conditions, express, implied,
conventional or statutory, including but not limited to, the implied
warranties or conditions of merchantability, of quality or fitness for
a particular purpose, with respect to the Services or other items or
deliverables provided by it or any other member of its Group hereunder
or any transactions contemplated herein.
7.4 TRANSITIONAL NATURE OF SERVICES; CHANGES
The Parties acknowledge the transitional nature of the Services and
that a Service Provider may make changes from time to time in the
manner of performing the Services if the Service Provider is making
similar changes in performing similar services for itself and if the
Service Provider furnishes to the Service Recipient with reasonable
notice in the circumstances regarding such changes.
7.5 RESPONSIBILITY FOR ERRORS; DELAYS
Except in the case of Service Provider's gross negligence, bad faith or
wilful misconduct, a Service Provider's sole responsibility to a
Service Recipient:
(a) for errors or omissions in Services, shall be to furnish correct
information, payment and/or adjustment in the Services, at no
additional cost or expense to the Service Recipient; provided
that the Service Provider must promptly advise the Service
Recipient of any such error or omission of which it becomes aware
after using Commercially Reasonable Efforts to detect any such
errors or omissions in accordance with the standard of care set
forth in Sections 7.1 and 7.2; and
(b) for failure to deliver any Service because of Impracticability,
shall be to use Commercially Reasonable Efforts, subject to
Section 3.3, to make the Services available or to resume
performing the Services as promptly as reasonably practicable.
7.6 COOPERATION; CONSENTS
The Parties shall, and shall cause the other relevant members of their
respective Groups to, cooperate with each other in all matters relating
to the provision and receipt of Services. Such cooperation shall
include exchanging information, performing true-ups and adjustments,
and obtaining all Third Party Consents, licenses or sublicenses
necessary to permit each Party to perform its obligations hereunder
(including by way of example, not by way of limitation, rights to use
Third Party software needed for the performance of Services). Pursuant
to Section 11.4, the
- 12 -
costs of obtaining such Third Party Consents, licenses or sublicenses
shall be borne by the Service Recipient. The Parties shall maintain,
and shall cause the other relevant members of their respective Groups
to maintain, in accordance with its standard document retention
procedures, documentation supporting the information relevant to cost
calculations contained in the Transition Service Schedules.
With respect to those Services that, in the reasonable opinion of the
Service Recipient, relate to matters of internal control over financial
reporting and with respect to which Alcan or Novelis, as the case may
be, reasonably believes a SAS 70 Type II Report is necessary in order
to permit its management to perform an adequate assessment of internal
control over financial reporting (and to permit its auditors to audit
its internal control over financial reporting and management's
assessment thereof), upon reasonable request by Alcan or Novelis, as
the case may be, no later than 30 days before the end of the 2005
calendar year, the Service Provider shall provide to Alcan or Novelis,
as the case may be, a SAS 70 Type II Report within 45 days of the end
of such calendar year. Such SAS 70 Type II Report must be prepared by
the Service Provider's independent auditors in accordance with
Statement on Auditing Standards No. 70, Service Organizations ("SAS
70"), and must include an opinion with respect to the controls that are
in effect at the Service Provider over the practices and procedures
relating to the Service Provider's performance of such Services under
this Agreement. The Service Provider will, and will use Commercially
Reasonable Efforts to cause its external auditors to, provide
information to Alcan or Novelis and Alcan's or Novelis' external
auditors, as the case may be, in order to allow Alcan or Novelis, as
the case may be, and Alcan's or Novelis' respective external auditors,
as the case may be, to perform procedures with respect to the SAS 70
Type II Report delivered hereunder and the controls to which such
report relates that are required by generally accepted auditing
standards, including, without limitation, PCAOB Auditing Standard No.
2, and by Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules
promulgated thereunder. All expenditures incurred by a Service Provider
in performing its obligations under this paragraph shall be payable by
the Service Recipient.
7.7 ALTERNATIVES
If a Service Provider reasonably believes it is unable to provide any
Service because of a failure to obtain necessary Consents, licenses or
sublicenses pursuant to Section 7.6 or because of Impracticability, the
Parties shall cooperate to determine the best alternative approach.
Until such alternative approach is found or the problem otherwise
resolved to the satisfaction of the Parties, the Service Provider shall
use Commercially Reasonable Efforts subject to Sections 3.2, 3.3 and
3.4, to continue providing the Service. To the extent an agreed upon
alternative approach requires the occurrence of costs or expenditures
above and beyond that which is included in the Service Provider's
charge for the Service in question, such additional costs and
expenditures shall, unless otherwise agreed, be borne by the Service
Recipient.
- 13 -
7.8 PERSONNEL
(a) Right to designate and change personnel. The Service Provider
will make available such personnel as will reasonably be required
to provide the Services described in the Transition Service
Schedules. The Service Provider will have the right to designate
which personnel it will assign to perform the Services. The
Service Provider also will have the right to remove and replace
any such personnel at any time or designate any of its Affiliates
or a Subcontractor at any time to perform the Services, subject
to the provisions of Article 10; provided, however, that the
Service Provider will use Commercially Reasonable Efforts to
limit the disruption to the Service Recipient in the transition
of the Services to different personnel or to a Subcontractor. In
the event that personnel with the designated level of experience
are not then employed by the Service Provider, the Service
Provider will use Commercially Reasonable Efforts to provide such
personnel or Subcontractor personnel having an adequate level of
experience; provided, however, that the Service Provider will
have no obligation to retain any individual employee for the sole
purpose of providing the applicable Services.
(b) FINANCIAL RESPONSIBILITY. The Service Provider will pay for all
personnel expenses, including wages, of its employees performing
the Services.
(c) SERVICE MANAGERS AND CHIEF REPRESENTATIVES. During the Term of
this Agreement, each Party will appoint (i) one of its employees
(the "SERVICE MANAGER") who will have overall responsibility for
managing and coordinating the delivery of the Services and who
shall serve as that Party's representative on the Operating
Committee and (ii) one of its employees for each service as
indicated in each Transition Service Schedule (the "CHIEF
REPRESENTATIVE"). The Service Manager and the Chief
Representatives will coordinate and consult with the Service
Manager and the Chief Representatives of the other Party. Each
Party may, at its discretion, select other individuals to serve
in these capacities during the Term of this Agreement upon
providing notice to the other Party. For greater certainty, a
Chief Representative may serve as such in respect of one or more
Transition Service Schedules.
7.9 INSURANCE
Each Party shall obtain and maintain at its own expense insurance of
the type generally maintained in the ordinary course of its business.
Except as otherwise specified in a Transition Service Schedule, neither
Party shall be required to obtain and maintain any particular insurance
in relation to providing or receiving any Service.
- 14 -
8. TERMINATION
8.1 TERMINATION
A Service Recipient may terminate this Agreement, either with respect
to all or with respect to any one or more of the Services provided to
the Service Recipient hereunder, with or without cause, at any time
upon at least thirty (30) days prior notice to the Service Provider,
unless the specific Transition Service Schedule requires otherwise. To
the extent possible, the Service Recipient will give such notice of
termination at the beginning of a fiscal month to terminate the Service
as of the beginning of the next fiscal month to avoid the need to
prorate any monthly payment charges. As soon as reasonably practicable
following receipt of any such notice, the Service Provider shall advise
the Service Recipient as to whether termination of such Service will
(a) require the termination or partial termination of, or otherwise
affect the provision of, certain other Services, or (b) result in any
early termination costs, including those related to Subcontractors,
which in any event, shall be borne by the Service Recipient as set
forth in Section 8.3. If either will be the case, the Service Recipient
may withdraw its termination notice within five (5) Business Days. If
the Service Recipient does not withdraw the termination notice within
such period, such termination will occur in accordance with the
original notice.
In addition, the Parties agree that (a) this Agreement may be
terminated in its entirety immediately at the option of the
non-defaulting Party, in the event that an Event of Default occurs in
relation to the other Party, and such termination shall take effect
immediately upon the non-defaulting Party providing notice to the other
of the termination (except as otherwise specified in clause (e) below),
and that (b) either Party may terminate this Agreement (and the
corresponding Transition Service Schedule) with respect to a specific
Service upon providing notice to the other Party in the event that an
Event of Default occurs in relation to such other Party, and such
termination shall take effect immediately upon the non-defaulting Party
providing such notice to the other (except as otherwise specified in
clause (e) below).
For the purposes of this Agreement, each of the following shall
individually and collectively constitute an "EVENT OF DEFAULT":
(a) in relation to the Service Recipient, if the Service Recipient
defaults in payment to the Service Provider of any payments which
are due and payable by it to the Service Provider pursuant to
this Agreement, and such default is not cured within thirty (30)
days following receipt by the Service Recipient of notice of such
default;
(b) in relation to the Service Provider, if the Service Provider
defaults in payment to the Service Recipient of any payments
which are due and payable by it to the Service Recipient pursuant
to this Agreement (if any), and such default is not cured within
thirty (30) days following receipt by the Service Provider of
notice of such default;
- 15 -
(c) either Party breaches any of its material obligations to the
other Party pursuant to this Agreement (other than as set out in
paragraphs (a) and (b) above), and fails to cure it within thirty
(30) days after receipt of notice from the non-defaulting Party
specifying the default in reasonable detail and demanding that it
be rectified, provided that if such breach is not capable of
being cured within thirty (30) days after receipt of such notice
and the Party in default has diligently pursued efforts to cure
the default within the thirty (30) day period, no Event of
Default under this paragraph (c) shall occur;
(d) either Party breaches any representation or warranty, or fails to
perform or comply with any covenant, provision, undertaking or
obligation in or of the Separation Agreement;
(e) in relation to Novelis (1) upon the occurrence of a Non Compete
Breach (as defined in the Separation Agreement) and the giving of
notice of the termination of this Agreement by Alcan to Novelis
pursuant to Section 14.03(b) of the Separation Agreement, or (2)
upon the occurrence of a Change of Control Non Compete Breach (as
defined in the Separation Agreement) and the giving of notice of
the termination of this Agreement by Alcan to Novelis pursuant to
Section 14.04(e) of the Separation Agreement, in which event the
termination of this Agreement shall be effective immediately upon
Alcan providing Novelis notice pursuant to Section 14.03(b) or
Section 14.04(e) of the Separation Agreement; or
(f) either Party (i) is bankrupt or insolvent or takes the benefit of
any statute in force for bankrupt or insolvent debtors, or (ii)
files a proposal or takes any action or proceeding before any
court of competent jurisdiction for its dissolution, winding-up
or liquidation, or for the liquidation of its assets, or a
receiver is appointed in respect of its assets, which order,
filing or appointment is not rescinded within sixty (60) days.
8.2 SURVIVAL
Notwithstanding the foregoing, in the event of any termination or
expiration with respect to one or more Services, but less than all
Services, this Agreement shall continue in full force and effect with
respect to any Services not terminated or expired.
8.3 PAYMENT
Immediately following the Expiration Date, the Service Provider shall
cease, or cause the other members of the Group to which it belongs, or
its Subcontractors to cease, providing the Services, and the Service
Recipient shall promptly pay or cause the other members of the Group to
which it belongs, to promptly pay all fees accrued pursuant to Article
6 but unpaid to the Service Provider, provided, however, that in case
of earlier termination without cause, the Service Recipient,
notwithstanding
- 16 -
Article 2129 of the Civil Code of Quebec, shall reimburse the Service
Provider only to the extent of the reasonable termination costs
actually incurred by the Service Provider resulting from the Service
Recipient's early termination of such Services, including those owed to
Subcontractors. The Service Provider will use Commercially Reasonable
Efforts to mitigate such termination costs.
8.4 USER IDS, PASSWORDS
The Parties shall use Commercially Reasonable Efforts upon the
termination or expiration of this Agreement or of any specific Service
hereto to ensure that access by one Party to the other Party's systems
is cancelled.
9. RELATIONSHIP BETWEEN THE PARTIES
Each Party is and will remain at all times an independent contractor in the
performance of all Services hereunder. In all matters relating to this
Agreement, each Party will be solely responsible for the acts of its employees
and agents, and employees or agents of one Party shall not be considered
employees or agents of the other Party. Except as otherwise provided herein, no
Party will have any right, power or authority to create any obligation, express
or implied, on behalf of any other Party nor shall either Party act or represent
or hold itself out as having authority to act as an agent or partner of the
other Party, or in any way bind or commit the other Party to any obligations.
Nothing in this Agreement is intended to create or constitute a joint venture,
partnership, agency, trust or other association of any kind between the Parties
or Persons referred to herein, and each Party shall be responsible only for its
respective obligations as set forth in this Agreement. Neither Party nor its
employees shall be considered an employee or agent of the other Party for any
purpose, except as expressly agreed by the Parties. Each Party shall have sole
responsibility for the supervision, daily direction and control, payment of
salary (including withholding of income taxes and deductions at source),
worker's compensation, disability benefits and the like of its employees.
10. SUBCONTRACTORS
10.1 A Service Provider may, subject to Section 10.2, engage a
"SUBCONTRACTOR" to perform all or any portion of the Service Provider's
duties under this Agreement, provided that any such Subcontractor
agrees in writing to be bound by confidentiality obligations at least
as protective as the terms of Section 11.07 of the Separation Agreement
regarding confidentiality and non-use of information, and provided
further that the Service Provider remains responsible for the
performance of such Subcontractor and for paying the Subcontractor. As
used in this Agreement, "SUBCONTRACTOR" will mean any Person or entity
engaged to perform hereunder.
10.2 In the event of a Service Provider wishes to engage a Subcontractor to
perform all or any portion of the Service Provider's duties under this
Agreement, as a condition precedent to any such subcontracting: (a) the
Service Provider shall provide the Service Recipient with a notice of
its intention to do so and such notice shall set forth
- 17 -
with reasonable details the nature of the duties or Services the
Service Provider wishes a Subcontractor to perform, the identity of the
proposed Subcontractor as well as the specific terms and conditions of
such proposed subcontracting; and (ii) the Service Provider shall
obtain the written consent of the Service Recipient, which consent may
be withheld by the Service Recipient in its absolute discretion.
10.3 In the event of any subcontracting by a Service Provider to a
non-Affiliate of the Service Provider of all or any portion of the
Service Provider's duties under this Agreement, the Service Provider
shall assign and transfer to the Service Recipient the full benefit of
all such non-Affiliate subcontractor's performance covenants,
guarantees, warranties or indemnities (if any), to the extent same are
transferable or assignable, in respect of the portion of the Services
provided to the Service Recipient pursuant to such subcontracting; and
if any such guarantees, warranties, indemnities and benefits are not
assignable, the Service Provider shall use Commercially Reasonable
Efforts to procure the benefit of same for the Service Recipient
through other legal permissible means.
11. INTELLECTUAL PROPERTY
11.1 ALLOCATION OF RIGHTS BY ANCILLARY AGREEMENTS
This Agreement and the performance of this Agreement will not affect
the ownership of any patent, trademark or copyright or other
intellectual property rights allocated in the Separation Agreement or
any of the Ancillary Agreements.
11.2 EXISTING OWNERSHIP RIGHTS UNAFFECTED
Neither Party will gain, by virtue of this Agreement, any rights of
ownership of copyrights, patents, trade secrets, trademarks or any
other intellectual property rights owned by the other. Notwithstanding
the foregoing, any ideas, concepts or any results arising out of the
performance of the Services (the "RESULTS") by the Service Provider
hereunder shall be the exclusive property of the Service Recipient. The
Service Provider shall execute all documents and perform all other acts
necessary or desirable to confirm title in the name of the Service
Recipient in the Results in any jurisdiction of the world including all
copyrights, trade secrets and industrial designs, and provide
assistance, if necessary, to protect or enforce the Service Recipient's
rights under said intellectual property rights. Such obligation to
execute documents and provide assistance shall survive the expiration
or early termination of this Agreement.
The Service Recipient agrees to reimburse the Service Provider for any
reasonable out-of-pocket expenses arising out of the obligations under
this Section 11.2. The Service Provider hereby waives and shall cause
its employees to waive, the whole of its and their moral rights to any
copyright material developed under this Agreement.
- 18 -
11.3 CROSS LICENSE TO PRE-EXISTING WORKS
Alcan grants Novelis and the other members of Novelis Group during the
Term of this Agreement, a non-exclusive, worldwide, royalty-free,
non-transferable license to use, copy and make derivative works of,
distribute, display, perform and transmit Alcan's pre-existing
copyrighted works or other intellectual property rights solely to the
extent necessary to perform its obligations under this Agreement and
such copyrighted works or other intellectual property rights will
remain the property of Alcan or its Affiliates, as the case may be, and
Novelis and the other members of Novelis Group will have no rights or
interests therein, including no sublicensing right, except as may
otherwise be set forth in the Intellectual Property Agreement or in the
Separation Agreement.
Novelis grants Alcan and the other members of Alcan Group during the
Term of this Agreement, a non-exclusive, worldwide, royalty-free,
non-transferable license to use, copy and make derivative works of,
distribute, display, perform and transmit Novelis's pre-existing
copyrighted works or other intellectual property rights solely to the
extent necessary to perform its obligations under this Agreement and
such copyrighted works or other intellectual property rights will
remain the property of Novelis or its Affiliates, as the case may be,
and Alcan and the other members of Alcan Group will have no rights or
interests therein, including no sublicensing right, except as may
otherwise be set forth in the Intellectual Property Agreement or in the
Separation Agreement.
11.4 THIRD PARTY SOFTWARE
In addition to the consideration set forth elsewhere in this Agreement,
the Service Recipient shall also pay any amounts (and applicable Sales
Taxes) that are required to be paid to any licensors of software that
is used by the Service Provider in connection with the provision of any
Service hereunder, and any amounts (and applicable Sales Taxes) that
are required to be paid to any such licensors to obtain the Consent of
such licensors to allow the Service Provider to provide any of the
Services hereunder. Subject to the immediately preceding sentence and
to the terms of the Separation Agreement, the Service Provider will use
Commercially Reasonable Efforts to obtain any Consent that may be
required from such licensors in order to provide any of the transition
Services hereunder.
11.5 TERMINATION OF LICENCES
Any license granted hereunder by a Party shall terminate ipso facto
upon the expiration or early termination of this Agreement.
- 19 -
12. NO OBLIGATIONS
Neither Party assumes any responsibility or obligation whatsoever, other than
the responsibilities and obligations expressly set forth in this Agreement
(including the exhibits and schedules hereto), in the Separation Agreement or in
a separate written agreement between the Parties.
13. CONFIDENTIALITY
13.1 The terms of the Confidentiality provisions set forth in Sections 11.07
and 11.08 of the Separation Agreement shall apply to all Confidential
Information disclosed in the course of the Parties' interactions under
this Agreement. This Article 13 of the Agreement sets out additional
requirements regarding confidential information for the purposes of
this Agreement.
13.2 The terms "NOVELIS CONFIDENTIAL INFORMATION" and "ALCAN CONFIDENTIAL
INFORMATION" shall mean all data, documents and information, whether or
not explicitly designated as being confidential, disclosed or to be
disclosed by Novelis or any other member of Novelis Group to Alcan or
to any other member of Alcan Group, or by Alcan or any other member of
Alcan Group to Novelis or to any other member of Novelis Group,
concerning the business operations, assets or affairs of Novelis Group
or Alcan Group respectively (including information transmitted in
written, electronic, magnetic or other form, information transmitted
orally and information gathered by a Party through visual inspections
or observation or by any other means), and any and all information
which may be developed or created, in whole or in part, directly or
indirectly, from such information including all notes, summaries,
analyses, compilations and other writings, but does not include
information that: (a) at the time of delivery to the Service Provider
has been or subsequently becomes generally available to the public
other than as a result of disclosure by the Service Recipient; (b) is
or subsequently becomes available to the Service Provider on a
non-confidential basis from a source who is not bound by this Agreement
and is not otherwise under a legal obligation not to disclose such
information; or (c) is required to be disclosed by Applicable Law or
any Governmental Authority.
13.3 The term "PERMITTED PURPOSE" means the provision of a "SERVICE" by a
Service Provider to a Service Recipient under this Agreement.
13.4 The Novelis Confidential Information to be shared with Alcan Group, and
the Alcan Confidential Information to be shared with Novelis Group,
shall be limited to that which would be shared with a Third Party
service provider that is providing the particular Service to the
Service Recipient and shall not be used by a Service Provider for any
purpose other than a Permitted Purpose or in any way that is
detrimental to the Service Recipient. In particular,
(a) the Service Provider shall not disclose any Novelis Confidential
Information or Alcan Confidential Information, as the case may
be, to any employee of the
- 20 -
Service Provider who does not have a need to know such Novelis
Confidential Information or Alcan Confidential Information in
order to perform the Permitted Purpose;
(b) the Service Provider shall not disclose any Novelis Confidential
Information or Alcan Confidential Information, as the case may
be, to any employee of the Service Provider who has line
management authority related to a competing business of the
Service Recipient with respect to the Service in question;
(c) the Service Provider shall not use the Novelis Confidential
Information or the Alcan Confidential Information, as the case
may be, other than for such purposes as shall be expressly
permitted under this Agreement; and
(d) the Service Provider shall maintain a list of employees of the
Service Provider who need to have access to Novelis Confidential
Information or Alcan Confidential Information, as the case may
be, for a Permitted Purpose. The Chief Representative of the
Service Provider for each Transition Service shall be responsible
for maintaining this list.
13.5 The Novelis Confidential Information and the Alcan Confidential
Information, including any derivative documents prepared by Alcan Group
or Novelis Group, respectively, will be held in safe custody and kept
confidential on the terms set forth in this Agreement. Each Alcan Group
employee who is authorized to have or be aware of Novelis Confidential
Information, or Novelis Group employee who is authorized to have or be
aware of Alcan Confidential Information, will store that information in
his possession in separate paper and electronic files.
13.6 The obligations of the Parties under this Article 13 shall survive the
expiration or earlier termination of this Agreement.
14. LIMITATION OF LIABILITY AND INDEMNIFICATION
14.1 INDEMNIFICATION
Alcan shall indemnify, defend and hold harmless Novelis, each other
member of Novelis Group and each of their respective directors,
officers and employees, and each of the heirs, executors, trustees,
administrators, successors and assignors of any of the foregoing
(collectively, the "NOVELIS INDEMNIFIED PARTIES"), from and against any
and all Liabilities of the Novelis Indemnified Parties incurred by,
borne by or asserted against any of them relating to, arising out of or
resulting from any of the following items (without duplication);
(a) the breach or the failure of performance by Alcan of any of the
covenants, promises, undertakings or agreements which it is
obligated to perform under this Agreement;
- 21 -
(b) death of or injury of any person whomsoever, including but not
limited to directors, officers, employees, servants or agents of
Novelis, of another member of Novelis Group, or contractors to
the extent that such Liabilities are not covered by worker's
compensation;
(c) loss of, or damage to, or destruction of any property whatsoever,
including any loss of use thereof, including without limitation,
property of Novelis, of another member of Novelis Group, or their
respective directors, officers, employees, agents, subsidiaries
or subcontractors; or
(d) any claim or assertion that the execution or performance by
Novelis of its obligations under this Agreement violates or
interferes with any contractual or other right or obligation or
relationship of Alcan to or with any other Person,
caused by, arising out of, or in any way related to this Agreement, the
provision of Services as contemplated in this Agreement by Novelis, or
the other members of Novelis Group, their respective directors,
officers, employees, servants, agents, subsidiaries or subcontractors,
but subject however to the limitations of liability provided in this
Agreement.
Novelis shall indemnify, defend and hold harmless Alcan, each other
member of Alcan Group and each of their respective directors, officers
and employees, and each of the heirs, executors, trustees,
administrators, successors and assignors of any of the foregoing
(collectively, the "ALCAN INDEMNIFIED PARTIES"), from and against any
and all Liabilities of the Alcan Indemnified Parties incurred by, borne
by or asserted against any of them relating to, arising out of or
resulting from any of the following items (without duplication);
(a) the breach or the failure of performance by Novelis of any of the
covenants, promises, undertakings or agreements which it is
obligated to perform under this Agreement;
(b) death of or injury of any person whomsoever, including but not
limited to directors, officers, employees, servants or agents of
Alcan, of another member of Alcan Group, or contractors to the
extent that such Liabilities are not covered by worker's
compensation;
(c) loss of, or damage to, or destruction of any property whatsoever,
including any loss of use thereof, including without limitation,
property of Alcan, of another member of Alcan Group, or their
respective directors, officers, employees, agents, subsidiaries
or subcontractors; or
(d) any claim or assertion that the execution or performance by Alcan
of its obligations under this Agreement violates or interferes
with any contractual or other right or obligation or relationship
of Novelis to or with any other Person,
- 22 -
caused by, arising out of, or in any way related to this Agreement, the
provision of Services as contemplated in this Agreement by Alcan, or
the other members of Alcan Group, their respective directors, officers,
employees, servants, agents, subsidiaries or subcontractors, but
subject however to the limitations of liability provided in this
Agreement.
14.2 LIMITATION OF LIABILITY
Notwithstanding the provisions of Section 14.1, the total aggregate
liability of Alcan to Novelis for all events, acts or omissions of
Alcan under or in connection with this Agreement or the Services
provided by Alcan hereunder, and the total aggregate liability of
Novelis to Alcan for all events, acts or omissions of Novelis under or
in connection with this Agreement or the Services provided by Novelis
hereunder, in each case, whether based on an action or claim in
contract, warranty, equity, negligence, tort or otherwise, shall not
exceed (i) in the case of the liability of Alcan to Novelis, an amount
equal to the value of the Services payable by Novelis to Alcan under
this Agreement, or (ii) in the case of the liability of Novelis to
Alcan, an amount equal to the value of the Services payable by Alcan to
Novelis under this Agreement; provided that the foregoing limit shall
not apply (i) in the case of the liability of Alcan to Novelis, with
respect to any liability arising out of or relating to Alcan's gross
negligence or wilful misconduct or the gross negligence or wilful
misconduct of its personnel, mandataries or agents or other Persons for
which it is responsible under Applicable Law, or (ii) in the case of
the liability of Novelis to Alcan, with respect to any liability
arising out of or relating to Novelis's gross negligence or wilful
misconduct or the gross negligence or wilful misconduct of its
personnel, mandataries or agents or other Persons for which it is
responsible under Applicable Law.
In no event shall any member of Alcan Group or Novelis Group be liable
to any member of the other Group for any special, consequential,
indirect, collateral, incidental or punitive damages, lost profits, or
failure to realize expected savings, or other commercial or economic
loss of any kind, however caused and on any theory of liability,
(including negligence) arising in any way out of this Agreement,
whether or not such Person has been advised for the possibility of any
such damages; provided, however, that the foregoing limitations shall
not limit either Party's indemnification obligations for liabilities to
with respect to Third Party Claims as set forth in Article IX of the
Separation Agreement.
14.3 EXCLUSIONS
Notwithstanding any provision to the contrary in this Agreement, the
foregoing limitations in this Article 14 shall not apply to Alcan's
obligation to indemnify Novelis in respect of an intellectual property
right infringement claim instituted or made by a Third Party in
connection with Alcan's Services or software or to Novelis's obligation
to indemnify Alcan in respect of an intellectual property right
- 23 -
infringement claim instituted or made by a Third Party in connection
with Novelis's Services or software.
14.4 PROVISIONS APPLICABLE WITH RESPECT TO INDEMNIFICATION OBLIGATIONS
Sections 9.04, 9.05, 9.06, 9.07 and 9.09 of the Separation Agreement
shall apply mutatis mutandis with respect to any Liability subject to
indemnification or reimbursement pursuant to Article 14 of this
Agreement.
14.5 SURVIVAL
The rights and obligations of the Parties under this Article 14 shall
survive the expiration or earlier termination of this Agreement.
15. DISPUTE RESOLUTION
The Master Agreement with Respect to Dispute Resolution, effective on
the Effective Date, among the Parties and other parties thereto shall
govern all disputes, controversies or claims (whether arising in
contract, delict, tort or otherwise) between the Parties that may arise
out of, or relate to, or arise under or in connection with, this
Agreement or the transactions contemplated hereby (including all
actions taken in furtherance of the transactions contemplated hereby),
or the commercial or economic relationship of the Parties relating
hereto or thereto.
16. ASSIGNMENT
16.1 PROHIBITION ON ASSIGNMENTS
Neither Party shall assign or transfer this Agreement, in whole or in
part, or any interest or obligation arising under this Agreement except
as permitted by Section 7.8(a), Article 10 and Section 16.2, without
the prior written consent of the other Party.
16.2 ASSIGNMENT TO ALCAN GROUP COMPANY
With the consent of Novelis, such consent not to be unreasonably
withheld or delayed, Alcan may elect to have one or more of the Alcan
Group Companies assume the rights and obligations of Alcan under this
Agreement.
17. MISCELLANEOUS
17.1 CONSTRUCTION
The rules of construction and interpretation set forth in Section 16.04
of the Separation Agreement shall apply to this Agreement.
- 24 -
17.2 NOTICES
All notices and other communications hereunder shall be given in the
manner set forth in Section 16.10 of the Separation Agreement.
17.3 GOVERNING LAW
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the Province of Quebec and the laws of
Canada applicable therein, irrespective of conflict of laws principles
under Quebec law, as to all matters, including matters of validity,
construction, effect, enforceability, performance and remedies.
17.4 JUDGMENT CURRENCY
The obligations of a Party to make payments hereunder shall not be
discharged by an amount paid in any currency other than Dollars,
whether pursuant to a court order or judgment or arbitral award or
otherwise, to the extent that the amount so paid upon conversion to
Dollars and transferred to an account indicated by the Party to receive
such funds under normal banking procedures does not yield the amount of
Dollars due; and each Party hereby, as a separate obligation and
notwithstanding any such judgment, agrees to indemnify each other Party
against, and to pay to such Party on demand, in Dollars, any difference
between the sum originally due in Dollars and the amount of Dollars
received upon any such conversion and transfer.
17.5 ENTIRE AGREEMENT
This Agreement, the Separation Agreement and exhibits, schedules and
appendices 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 supersedes all previous
agreements, 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.
17.6 CONFLICTS
In case of any conflict or inconsistency between this Agreement and the
Separation Agreement, this Agreement shall prevail. In case of any
conflict or inconsistency between the terms and conditions of this
Agreement (excluding, for the purpose of this Section 17.6, any
Transition Service Schedule thereto) and the terms of any Transition
Service Schedule, the provisions of the Transition Service Schedule
shall prevail.
- 25 -
17.7 FORCE MAJEURE
No Party shall be deemed in default of this Agreement to the extent
that any delay or failure in the performance of its obligations under
this Agreement results from superior force ("force majeure") or any
act, occurrence or omission beyond its reasonable control and without
its fault or negligence, such as fires, explosions, accidents, strikes,
lockouts or labour disturbances, floods, droughts, earthquakes,
epidemics, seizures of cargo, wars (whether or not declared), civil
commotion, acts of God or the public enemy, action of any government,
legislature, court or other Governmental Authority, action by any
authority, representative or organisation exercising or claiming to
exercise powers of a government or Governmental Authority, compliance
with Applicable Law, blockades, power failures or curtailments,
inadequacy or shortages or curtailments or cessation of supplies of raw
materials or other supplies, failure or breakdown of equipment of
facilities or, in the case of computer systems, any failure in
electrical or air conditioning equipment (a "FORCE MAJEURE EVENT"). If
a Force Majeure Event has occurred and its effects are continuing,
then, upon notice by the Party who is delayed or prevented from
performing its obligations to the other Party, (i) the affected
provisions or other requirements of this Agreement shall be suspended
to the extent necessary during the period of such disability, (ii) the
Party which is delayed or prevented from performing its obligations by
a Force Majeure Event shall have the right to apportion its Services in
an equitable manner to all users and (iii) such Party shall have no
liability to the other Party or any other Person in connection
therewith. The Party which is delayed or prevented from performing its
obligations by the Force Majeure Event shall resume full performance of
this Agreement as soon as reasonably practicable following the
cessation of the Force Majeure Event (or the consequences thereof).
17.8 WAIVERS
No failure on the part of a Party to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power
or privilege under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The
remedies provided herein are cumulative and not exclusive of any
remedies provided by the Applicable Laws.
17.9 FURTHER ASSURANCES
Each Party agrees to use Commercially Reasonable Efforts to execute any
and all documents and to perform such other acts as may be necessary or
expedient to further the purposes of this Agreement and the relations
contemplated hereby. Without limiting the foregoing and the provisions
of the Separation Agreement (including Article XIV thereof) each Party
shall make available during normal business hours for inspection by the
other Party and such other Persons as the other
- 26 -
Party shall designate in writing, all books and records in the
possession which relate to the Services and which are necessary to
confirm the said Party's compliance with its obligations under this
Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
IN WITNESS WHEREOF, the Parties hereto have caused this Transitional Services
Agreement to be executed by their duly authorized representatives.
ALCAN INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
NOVELIS INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
SCHEDULE 1
FORM OF TRANSITION SERVICE SCHEDULE TO
TRANSITIONAL SERVICES AGREEMENT
TRANSITION SERVICE SCHEDULE: [NAME OF SERVICE]
----------------------------------------- --------------------------------------
1. SERVICE PROVIDER
----------------------------------------- --------------------------------------
2. RECIPIENT
----------------------------------------- --------------------------------------
3. DESCRIPTION OF SERVICES
(a) SUMMARY
(b) ACTIVITIES TO BE PERFORMED
(c) DELIVERABLES
(d) PROVIDER RESPONSIBILITIES
(e) RECIPIENT RESPONSIBILITIES
----------------------------------------- --------------------------------------
4. DURATION
----------------------------------------- --------------------------------------
5. COMPENSATION
(a) COST OF SERVICE
(b) TERMS OF PAYMENT
----------------------------------------- --------------------------------------
6. OTHER PARTICULARS (IF ANY)
----------------------------------------- --------------------------------------
7. CHIEF REPRESENTATIVES
Provider: ____________________________
([ ], [ ]) Date
Recipient: ___________________________
([ ], [ ]) Date
----------------------------------------- --------------------------------------
8. APPROVAL OFFICERS
Provider: ____________________________
([ ], [ ]) Date
Recipient: __________________________
([ ], [ ]) Date
----------------------------------------- --------------------------------------
NON-CONTRACTUAL INFORMATION
Please explain why the transition service will be required (eg: physically
impossible for Recipient to provide for itself on Effective Date; prohibitively
expensive for Recipient to be ready to provide by Effective Date; etc.). Please
provide details sufficient for reader to understand why impossible, too
expensive, etc.
Signed in ____________ (_________), on this _____ day of _____________, 200__.
ALCAN INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
NOVELIS INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title: