EXECUTION COPY
MASTER AGREEMENT
Dated as of March 27, 2002
Between
ALSTOM TRANSPORTATION INC.
and
AAI CORPORATION
NY Master Agreement - Execution Copy
TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS....................................................1
1.1 Definitions......................................................1
ARTICLE 2 THE ASSIGNMENT OF CONTRACTS AND CONVEYANCE OF
RELATED ASSETS.................................................8
2.1 Assignment; Conveyance...........................................8
2.2 Transferred Assets...............................................8
2.3 Excluded Assets.................................................10
2.4 Purchase Price..................................................11
2.5 Adjustment to the Purchase Price................................11
2.6 Closing.........................................................12
2.7 Assurances......................................................13
2.8. Post Closing Adjustment.........................................13
ARTICLE 3 ASSUMPTION OF LIABILITIES.....................................15
3.1 Assumed Liabilities under Assigned
Contracts.......................................................15
3.2 Accounts Payable................................................16
3.3 Non-Assumption of Liabilities...................................16
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF AAI.........................18
4.1 Incorporation...................................................18
4.2 Corporate Power, Etc............................................18
4.3 No Conflict.....................................................18
4.4 Consents, Etc...................................................19
4.5 Financial Information...........................................19
4.6 Absence of Material Change......................................19
4.7 Transferred Assets..............................................20
4.8 Assigned Contracts..............................................21
4.9 Litigation; Compliance with Law.................................22
4.10 Intellectual Property; Technology;
Software........................................................23
4.11 Suppliers.......................................................24
4.12 No Brokers......................................................24
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ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ALSTOM......................25
5.1 Incorporation...................................................25
5.2 Corporate Power, Etc............................................25
5.3 No Conflict.....................................................25
5.4 Consents, Etc...................................................25
5.5 Absence of Litigation...........................................26
5.6 No Brokerage....................................................26
ARTICLE 6 COVENANTS.....................................................26
6.1 Performance of Assigned Contracts and
Preservation of Inventories.....................................26
6.2 Filings; Consents...............................................27
6.3 Access..........................................................28
6.4 Notification of Certain Matters.................................28
6.5 Updated Financial Information...................................28
6.6 Noncompetition..................................................28
6.7 Non-Solicitation of Employees...................................29
6.8 Press Releases..................................................29
6.9. Performance Bonds...............................................29
6.10. Conditions Precedent............................................30
6.11. Delivery of Software, Technology and
Intellectual Property...........................................30
6.12. License to CDS..................................................30
6.13. DBE.............................................................30
6.14. Liquidated Damages..............................................31
ARTICLE 7 CLOSING CONDITIONS............................................31
7.1 Conditions to Obligations of AAI................................31
7.2 Conditions to Obligations of ALSTOM.............................32
ARTICLE 8 INDEMNIFICATION...............................................34
8.1 Survival........................................................34
8.2 Indemnification by AAI..........................................34
8.3 Indemnification by ALSTOM.......................................35
8.4 Indemnification Procedures......................................35
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ARTICLE 9 TERM AND TERMINATION..........................................37
9.1 Term............................................................37
9.2 Effect of Termination...........................................37
ARTICLE 10 MISCELLANEOUS.................................................37
10.1 Bulk Sales Laws.................................................37
10.2 Access to Books and Records.....................................37
10.3 Binding Effect; Assignment......................................38
10.4 Expenses........................................................38
10.5 No Third Party Beneficiaries....................................38
10.6 Entire Agreement; Waiver or Modification........................38
10.7 Interpretation..................................................39
10.8 Notices.........................................................39
10.9 Governing Law...................................................40
10.10 Dispute Resolution..............................................40
10.11 Severability....................................................42
10.12 Remedies........................................................42
10.13 No Implied Warranties...........................................42
10.14 No Presumption..................................................42
10.15 Execution.......................................................42
NY Master Agreement - Execution Copy (iii)
SCHEDULES AND EXHIBITS
Schedule 1.1 Major Contracts
Schedule 2.2(a) Equipment
Schedule 2.2(f) Signing Inventory Valuation
Schedule 2.2(n) Other Documents
Schedule 2.4 Tax Allocation
Schedule 4.4 AAI Consents, Etc.
Schedule 4.6 Absence of Material Change
Schedule 4.7(b) Liens
Schedule 4.7(e) Pt. I Consignment Inventory
Schedule 4.7(e) Pt. II Addresses of Facilities and Warehouses
Schedule 4.7(e) Pt. III Material in Excess of Requirements
Schedule 4.8 Assigned Contracts
Schedule 4.8(a) Certain Exclusions from Assigned Contracts
Schedule 4.9(a) Investigations and Reviews
Schedule 4.9(b) Claims, Actions, Suits and Proceedings
Schedule 4.9(c) Judgments, Orders, Injunctions and Decrees
Schedule 4.10(b) AAI Infringement
Schedule 4.10(c) Third Party Infringement
Schedule 4.11 Supplier Developments
Schedule 5.4 Consents Required to be Obtained by ALSTOM
Schedule 6.9 Performance Bonds
Exhibit A Reference Date PFR
Exhibit B Signing POH
Exhibit C Form of Transitional Services Agreement
NY Master Agreement - Execution Copy (iv)
EXECUTION COPY
MASTER AGREEMENT
MASTER AGREEMENT, dated as of March 27, 2002, between ALSTOM
Transportation Inc., corporation organized under the laws of the State of New
York ("ALSTOM"), and AAI Corporation, a Maryland corporation ("AAI").
RECITALS
WHEREAS, AAI is party to the NJT Contract (as defined below) for the
overhaul of certain rail cars and the MMTA Contract (as defined below) for the
overhaul of certain subway cars;
WHEREAS, ALSTOM desires to acquire from AAI, and AAI desires to
assign to ALSTOM, all of AAI's right, title and interest in the NJT Contract and
the MMTA Contract, as well as certain related subcontracts and purchase orders;
WHEREAS, in connection therewith, AAI will transfer certain assets
and liabilities to ALSTOM;
WHEREAS, in connection with the transactions outlined herein, ALSTOM
and AAI will enter into a transitional services agreement relating to the
provision by AAI to ALSTOM of certain transitional services and personnel;
WHEREAS, ALSTOM and AAI desire to set forth in this Agreement
certain of their respective rights and obligations with respect to the
assignment of the contracts, the transfer of the assets and liabilities;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, the parties hereby
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Without limiting any other terms defined herein, as
used in this Agreement the following terms shall have the following respective
meanings:
"AAA" shall have the meaning set forth in Section 10.10 hereof.
"AAI Indemnified Party" shall have the meaning set forth in Section
8.3 hereof.
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"Accounting Firm" shall have the meaning set forth in Section 2.8(c)
hereof.
"Affiliate" shall mean, with respect to any Person, any other Person
controlling, controlled by or under common control with, such Person.
"Agreement" shall mean this Master Agreement, together with the
Schedules and Exhibits attached hereto, as the same may be amended from time to
time.
"ALSTOM Indemnified Party" shall have the meaning set forth in
Section 8.2 hereof.
"Assets" shall mean all properties, assets, privileges, rights,
interests and claims (whether real or personal, tangible or intangible) of every
type and description and wherever located and whether or not any of such Assets
have any value for accounting purposes or are carried or reflected on or
specifically referred to in the books or financial statements of AAI.
"Assigned Contracts" shall mean (a) the NJT Contract and the MMTA
Contract and (b) the other Contracts listed on Schedule 4.8 hereto, which relate
primarily to or are used primarily in connection with the performance of the NJT
Contract or the MMTA Contract, and (c) all other Contracts to which AAI is a
party or by which it is bound relating primarily to or used primarily in
connection with the Transferred Assets or by which any of the Transferred Assets
are bound or benefited, except for (x) any letter of intent, whether or not such
letter of intent is listed on Schedule 4.8 hereto (including any outstanding
letter of intent concerning any Disadvantaged Business Enterprise or Minority
Business Enterprise, as such terms are defined in the NJT Contract or the MMTA
Contract, as applicable) and (y) any Contract listed on Schedule 4.8 (a) hereto
.
"Assumed Liabilities" shall mean, collectively, the liabilities and
obligations assumed by ALSTOM pursuant to Sections 3.1 and 3.2 hereof.
"Business Day" means any day other than a day on which commercial
banks in the United States of America are required or authorized by applicable
law to be closed.
"Closing" shall have the meaning set forth in Section 2.6 hereof.
"Closing Date" shall have the meaning set forth in Section 2.6
hereof.
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"Closing PFR" shall mean the Project Fiscal Report of AAI to be
delivered by AAI to ALSTOM at the Closing, which shall be certified by the Chief
Financial Officer of AAI to be in compliance with the provisions of Section 6.5
hereof and which shall be as of a date within 10 days of the Closing Date.
"Code" shall mean the United States Internal Revenue Code of 1986,
as amended.
"Confidentiality Agreement" shall mean that certain confidentiality
agreement dated as of February 16, 2001 between ALSTOM and Parent.
"Contracts" shall mean all indentures, leases, instruments,
contracts, commitments, licenses, guarantees, purchase orders, subcontracts,
arrangements and agreements of every type and description.
"Environment" shall mean surface waters, ground water, land-surface,
subsurface strata, air, and plant ,animal and human life.
"Environmental Costs and Liabilities" means any and all losses,
liabilities, obligations, damages, fines, penalties, judgments, actions, claims,
costs and expenses (including, without limitation, fees, disbursements and
expenses of legal counsel, experts, engineers and consultants and the costs of
investigation and feasibility studies) arising at or prior to the Closing Date
from or under any Environmental Law.
"Environmental Law" means any federal, state, local (including
common law), statute, code, ordinance, rule, regulation or other requirement
relating to pollution or protection of the environment or natural resources, or
public or employee health and safety or exposure to Hazardous Material and
includes, but is not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. ss. 9601 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C.ss. 1801 et seq., the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C.ss. 6901 et seq., the Clean
Water Act 33 U.S.C.ss. 1251 et seq., the Clean Air Act ,33 U.S.C.ss. 2601 et
seq., the Toxic Substances Control Act, 15 U.S.C.ss. 2601 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.ss. 136 et seq., the Oil
Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq. and the Occupational Safety
and Health Act, 29 U.S.C.ss. 651 et seq., as such laws have been amended or
supplemented, and the regulations promulgated pursuant thereto, and all
analogous state or local statutes.
"Equipment" shall have the meaning set forth in Section 2.2(a)
hereof.
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"Excluded Assets" shall have the meaning set forth in Section 2.3
hereof.
"Facilities" shall mean all facilities of AAI whether or not used
with respect to the Assigned Contracts or the Transferred Assets.
"Final Closing PFR" shall have the meaning set forth in Section
2.8(b) hereof.
"Final Post Closing PFR" shall have the meaning set forth in Section
2.8(b) hereof.
"Fleet Agreement" shall mean that certain Loan and Security
Agreement dated as of June 28, 2001 among Fleet Capital Corporation, Parent, AAI
and certain other subsidiaries of Parent.
"GAAP" means generally accepted accounting principles in the United
States.
"Governmental Entity" shall mean any federal, state, local, foreign
or other governmental or administrative body, instrumentality, department or
agency or any court, tribunal, administrative hearing, arbitration panel,
commission or similar dispute resolving panel or body.
"Hazardous Material" means any substance, material or waste which is
regulated by any Governmental Entity including, without limitation, any
material, substance or waste which is defined as a "hazardous waste," "hazardous
material," "hazardous substance," "extremely hazardous waste," "restricted
hazardous waste," "contaminant," "toxic waste" or "toxic substance" under any
provision of Environmental Law, which includes, but is not limited to,
petroleum, petroleum products, asbestos, urea formaldehyde and polychlorinated
biphenyls.
"Indemnified Party" shall have the meaning set forth in Section
8.4(a).
"Indemnifying Party" shall have the meaning set forth in Section
8.4(b).
"Intellectual Property" shall mean all patents, patent rights,
inventor certificates, trademarks, service marks, trade names (including
corporate, assumed and fictitious business names and the logos associated
therewith), trade dress, copyrights, applications and registrations for the
foregoing.
"Inventories" shall have the meaning set forth in Section 2.2(f)
hereof.
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"Legal Requirements" shall mean all laws, ordinances, codes, rules,
regulations, standards, judgments, decrees, writs, injunctions, rulings, orders
and other requirements of all Governmental Entities.
"Lien" shall mean any lien, security interest, pledge, mortgage,
claim, restriction, reservation, encumbrance, charge, option, restraint on
transfer, any title defect of any nature whatsoever or any voting or other
similar restriction under any agreement or any similar lien or encumbrance.
"Losses" shall mean all losses, liabilities, damages and claims, and
all reasonable costs and expenses related thereto (including any and all
reasonable attorneys' fees and reasonable costs of investigation, litigation,
settlement, judgment, interest and penalties).
"Major Contracts" shall mean all of the Assigned Contracts listed on
Schedule 1.1 hereto.
"Material Adverse Effect" shall mean a circumstance, change or
effect (or series of related circumstances, changes or effects) which has or is
reasonably likely to result in a material adverse change in or have a material
adverse effect upon the performance, obligations or liabilities under any
Assigned Contracts, on the Transferred Assets, the revenues or cash flows to be
obtained under the Assigned Contracts, or the rights or obligations of any party
under the Assigned Contracts (other than any such changes or effects resulting
from or reasonably likely to result from, or related to, the transfer of the
performance of the Assigned Contracts out of the Facilities).
"MMTA" shall mean the Maryland Mass Transit Authority.
"MMTA Contract" shall mean the Maryland Mass Transit Authority
contract dated April 14, 2000 for the overhaul of 100 subway cars, including all
change orders thereto.
"NJT" shall mean the New Jersey Transit Authority.
"NJT Contract" shall mean the New Jersey Transit contract dated
February 1, 1999 for the overhaul and refurbishment of 116 COMETS II locomotive
hauled commuter cars, including all change orders thereto.
"Non-Assumed Liabilities" shall have the meaning set forth in
Section 3.3 hereof.
"Notice of Disagreement" shall have the meaning set forth in Section
2.8(b) hereof.
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"Option" shall mean Change Order 5 and Change Order 6 to the NJT
Contract.
"Owned Intellectual Property" shall mean all Intellectual Property
owned by AAI as of the Closing Date and employed by AAI primarily in connection
with the performance of the Assigned Contracts.
"Owned Software" shall mean all Software owned by AAI as of the
Closing Date and employed by AAI primarily in connection with the performance of
the Assigned Contracts.
"Owned Technology" shall mean all Technology owned by AAI as of the
Closing Date and employed by AAI primarily in connection with the performance of
the Assigned Contracts.
"Parent" shall mean United Industrial Corporation, the parent
company of AAI.
"Permits" shall mean licenses, certificates, authorizations,
consents, orders, permits, approvals or other actions of, or any filings,
registrations or qualifications with, any Governmental Entity used or held for
use in connection with the performance of the Assigned Contracts.
"Permitted Liens" shall mean statutory liens for Taxes and other
charges or costs not yet due and payable and Liens imposed in the ordinary
course of business, in each case that do not materially adversely affect the
full use, occupancy, operation or enjoyment of the asset subject thereto.
"Person" means any individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust or other entity of
a similar nature.
"Post-Closing Adjustment Date" shall mean (a) the first Business Day
following the 30th day after the day on which AAI is able to produce and deliver
to ALSTOM the Post-Closing PFR (which date of delivery shall in no event be
later than the 10th day after the Closing Date), or, (b) if a Notice of
Disagreement is timely delivered within the 30-day period specified in Section
2.8(b), the day after the date on which all disputes under Section 2.8 hereof
are finally determined.
"Post-Closing PFR" shall mean the Project Fiscal Report of AAI as of
the Closing Date to be delivered by AAI to ALSTOM as provided in Section 6.5
hereof, which shall be certified by the Chief Financial Officer of AAI to be in
accordance with the provisions of Section 6.5 hereof.
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"Purchase Price" shall have the meaning set forth in Section 2.4(a)
hereof.
"Receivables" shall have the meaning set forth in Section 2.2(g)
hereof.
"Reference Date" shall mean February 24, 2002.
"Reference Date PFR" shall mean the Project Fiscal Report of AAI
attached hereto as Exhibit A.
"Required Consents" shall mean any consents, authorizations,
approvals and waivers of any Third Party or Governmental Entity required to be
obtained for the consummation of the transactions contemplated by this
Agreement, all of which are set forth on Schedules 4.4 or 5.4 hereto.
"Rules" shall have the meaning set forth in Section 10.10 hereof.
"Signing Inventory Valuation" shall mean the list of Inventories,
together with the valuation thereof, as of March 26, 2002 delivered to ALSTOM by
AAI.
"Signing POH" shall mean the Purchase Order History of AAI attached
hereto as Exhibit B, dated as of March 26, 2002.
"Software" shall mean all computer software embodied in any form
(including source code, object code, job control language and other ancillary
programs and instructions); magnetic tape, disks and other media containing
copies thereof; related manuals, documentation, flow charts and other data
processing materials.
"Tax" shall means any federal, state, local, or foreign income,
withholding, provincial, capital, goods and services, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code Section 59A), customs duties,
capital stock, franchise, profits, social security (or similar), unemployment,
disability, real property, personal property, water, business, sales, use,
transfer, registration, value added, alternative or add on minimum, estimated
tax, or other tax of any kind whatsoever, including any interest, penalty or
addition thereto, whether disputed or not.
"Technology" shall mean all trade secrets, inventions, know-how,
formulae, processes, procedures, research records, records of inventions, test
information, market surveys and marketing know-how in any physical form or
media.
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"Third Party" shall mean any Person other than ALSTOM or any
Affiliate of ALSTOM or AAI or any Affiliate of AAI.
"Third Party Intellectual Property" shall mean all Intellectual
Property that is employed primarily in connection with the performance of the
Assigned Contracts and is licensed to AAI by a Third Party.
"Third Party Software" shall mean all Software that is employed
primarily in connection with the performance of the Assigned Contracts and is
licensed to AAI by a Third Party.
"Third Party Technology" shall mean all Technology that is employed
primarily in connection with the performance of the Assigned Contracts and is
licensed to AAI by a Third Party.
"Transferred Assets" shall have the meaning set forth in Section 2.2
hereof.
"Transitional Services Agreement" shall mean the agreement dated as
of the Closing Date, relating to the transitional services to be provided in
connection with the transactions contemplated hereunder, in the form attached
hereto as Exhibit C.
ARTICLE 2
THE ASSIGNMENT OF CONTRACTS AND CONVEYANCE OF RELATED ASSETS
2.1 Assignment; Conveyance. Upon the terms and subject to the
conditions of this Agreement, effective as of the Closing Date:
(a) AAI shall convey, grant, transfer, set over, assign and deliver
to ALSTOM all of AAI's right, title and interest in and to (1) the NJT Contract,
(2) the MMTA Contract and (3) all other Assigned Contracts free and clear of any
Liens (except for Permitted Liens); and ALSTOM shall acquire from AAI all of
AAI's right, title and interest in and to such NJT Contract, MMTA Contract and
other Assigned Contracts.
(b) AAI shall convey, grant, transfer, set over, assign and deliver
to ALSTOM all of AAI's right, title and interest in and to the Transferred
Assets free and clear of any Liens (except for Permitted Liens), and ALSTOM
shall acquire from AAI all of AAI's right, title and interest in and to such
Transferred Assets.
2.2 Transferred Assets. The "Transferred Assets" shall mean all of
the following personal property Assets (other than Excluded Assets) owned, used
or held for use by AAI (except as otherwise provided below) primarily in
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connection with the performance of the Assigned Contracts, wherever such Assets
are located and whether such Assets are tangible or intangible, including
without limitation all of the following Assets to the extent they are primarily
related to, or required, developed, manufactured or purchased in the performance
of, the Assigned Contracts:
(a) all special tools, dies, fixtures and spare parts owned, used or
held for use by AAI primarily in connection with the Assigned Contracts, or that
were charged (or should have been charged) as a cost under an Assigned Contract
per GAAP, including without limitation, the tangible assets and properties
described on Schedule 2.2(a) (the "Equipment");
(b) the rights described in Sections 4.10(a) and 6.12 hereof;
(c) [Reserved.]
(d) [Reserved.]
(e) [Reserved.]
(f) all inventories, including finished goods, work-in-progress, raw
materials, parts, accessories, packaging, manufacturing, administrative and
other supplies on hand, goods held for sale or lease or to be furnished under
Assigned Contracts and other inventories owned, used or held for use by AAI
primarily in connection with the Assigned Contracts (the "Inventories"),
including, without limitation, all the Inventories listed on the Signing
Inventory Valuation, attached hereto as Schedule 2.2(f), except for those used
or transferred in the course of performing the Assigned Contracts after the
Reference Date;
(g) all billed and unbilled accounts receivable and all notes
receivable of the Assigned Contracts (other than intercompany receivables
between AAI and Parent or any subsidiary or Affiliate of Parent) and all rights
to bill for work or serviced performed for any period prior to the Closing (the
"Receivables");
(h) all credits, prepaid expenses, deferred charges, advance
payments, security deposits and deposits owned, used or held for use by AAI in
connection with the performance of the Assigned Contracts;
(i) [Reserved.]
(j) to the extent assignable, all rights pursuant to any express or
implied warranties, indemnities, representations or guarantees made by
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suppliers furnishing goods or services to the extent furnished with respect to
the Assigned Contracts;
(k) rights to and under insurance claims made by AAI in respect of
the Assigned Contracts prior to the Closing, or the proceeds therefrom;
(l) all documents, books and records relating to the performance of
the Assigned Contracts and the ownership, use or possession of the Transferred
Assets at the Closing Date that are necessary or useful to the continued
performance of the Assigned Contracts or the ownership, use or possession of the
Transferred Assets after the Closing Date, including without limitation copies
of lists of customers and suppliers; records with respect to production,
engineering, product development, costs, Inventories, Equipment; drawings;
advertising matter, catalogues, correspondence, mailing lists, photographs,
sales materials and records; purchasing materials and records; manufacturing and
quality control records and procedures; research and development files, records,
data and laboratory books; media materials and plates; sales order files; plans,
specifications, surveys; information or documentation related to manuals and
training, in each case, whether in hard copy or magnetic format;
(m) all causes of action or claims of AAI against third parties
relating to the Assigned Contracts and/or the Transferred Assets, whether known
or unknown, existing as of the Closing Date (but not including the Receivables);
and
(n) for the convenience of the parties, notwithstanding any other
provision of this Agreement to the contrary, it is agreed that, to the extent
that the items set forth on Schedule 2.2(n) exist, and only in the forms or
formats in which each might exist, such scheduled items are also Transferred
Assets.
2.3 Excluded Assets. The following Assets (the "Excluded Assets")
are not included in the Transferred Assets, and AAI shall not convey, or cause
the conveyance, to ALSTOM, and ALSTOM shall not acquire from AAI, any rights in
the following:
(a) all prepaid Taxes and Taxes withheld by AAI as an employer or
vendor, which AAI is obligated to pay;
(b) all Assets of AAI that do not relate to the Assigned Contracts
or Transferred Assets;
(c) all right, title and interest of AAI in the Facilities;
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(d) all Contracts or other obligations of AAI to or relating to any
employees;
(e) all Permits;
(f) [Reserved.]
(g) all machinery and equipment, except to the extent that such
machinery and equipment is included as a Transferred Asset under Section 2.2(a)
above;
(h) all furniture;
(i) all fixtures other than those listed on Schedule 2.2(a);
(j) all personal computers and all software residing thereon (other
than the rights relating to Owned and Third Party Software described in Section
4.10(a)); and
(k) all intercompany receivables between AAI and Parent or any
subsidiary or Affiliate of Parent.
2.4 Purchase Price.
(a) Subject to the adjustments set forth in Sections 2.5 and 2.8,
the purchase price payable by ALSTOM for the Assigned Contracts and Transferred
Assets (such purchase price, as it may be adjusted pursuant to Sections 2.5 and
2.8 below, the "Purchase Price") shall be in an amount equal to US twenty-one
million four hundred thousand dollars ($21,400,000).
(b) ALSTOM and AAI shall agree to any allocation of the
consideration for tax purposes, which shall be in accordance with Section 1060
of the Code and the allocation schedule to be attached hereto promptly after the
date hereof as Schedule 2.4. ALSTOM and AAI and their respective Affiliates
shall file their respective income tax returns and all forms required by Section
1060 of the Code or any similar provision of state or local law in accordance
and consistent with such allocation.
(c) The Purchase Price shall be delivered at the Closing in cash via
wire transfer of immediately available funds to an account designated by AAI no
later than two days prior to Closing.
2.5 Adjustment to the Purchase Price. The Purchase Price shall be
subject to adjustment at the Closing as specified in this Section 2.5:
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(i) the Purchase Price shall be decreased by the amount of any
cash received by AAI after the Reference Date, and prior to the
Closing Date from NJT or MMTA under the NJT Contract or the MMTA
Contract; and
(ii) the Purchase Price shall be increased by an amount equal
to the difference between the "Contract Total" as set forth on the
Closing PFR and the "Contract Total" as set forth on the Reference
Date PFR.
2.6 Closing. The closing (the "Closing") of the transactions
contemplated hereby shall take place at a location and on a date agreed to by
ALSTOM and AAI, but in any event not later than five (5) Business Days following
the later of the date of (a) satisfaction or waiver of all conditions to the
obligations of the parties set forth in Article 7, or (b) on such other date as
the parties shall agree upon in writing. The date on which the Closing occurs is
referred to hereinafter as the "Closing Date." At the Closing the following
actions shall be taken:
(a) AAI shall deliver to ALSTOM:
(i) bills of sale and instruments of assignment, in forms
reasonably satisfactory to ALSTOM and AAI, to effectuate the
transfer to ALSTOM of the Transferred Assets and the Assigned
Contracts in accordance herewith, duly executed by AAI;
(ii) the Required Consents;
(iii) U.C.C. termination statements in recordable form and
other appropriate releases, in form and substance reasonably
satisfactory to ALSTOM, with respect to all recorded Liens on the
Transferred Assets or the Assigned Contracts (other than Permitted
Liens);
(iv) the certificates and other documents required to be
delivered by AAI pursuant to Section 7.2 hereof;
(v) all such other documents (including affidavits of title)
and instruments of conveyance as shall be reasonably necessary to
transfer to ALSTOM the Transferred Assets or the Assigned Contracts
in accordance herewith and, where necessary or appropriate, in
recordable form;
(vi) an executed counterpart of the Transitional Services
Agreement;
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(vii) a receipt for the Purchase Price;
(viii) the Closing PFR, certified by the Chief Financial
Officer of AAI to be in compliance with the provisions of Section
6.5 hereof; and
(ix) possession of the Transferred Assets and assignment of
the Assigned Contracts.
(b) ALSTOM shall deliver to AAI:
(i) the certificates and other documents required to be
delivered by ALSTOM pursuant to Section 7.1 hereof;
(ii) an executed counterpart of the Transitional Services
Agreement; and
(iii) the Purchase Price.
(c) AAI, on the one hand, and ALSTOM, on the other hand, shall enter
into Assignment and Assumption Agreements, in form and substance reasonably
satisfactory to ALSTOM, with respect to the Assumed Liabilities.
2.7 Assurances. After the Closing Date, at ALSTOM's cost, AAI shall
perform, or cause to be performed, all such other action and shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
all such assignments, transfers, consents and other documents as ALSTOM or its
counsel may reasonably request to vest in ALSTOM, and protect ALSTOM's right,
title and interest in, and enjoyment of, the Assigned Contracts and the
Transferred Assets. Without limiting the generality of the foregoing, AAI shall
use its commercially reasonable efforts to achieve the transfer of all Permits
and the receipt of any Required Consents, and shall consult with ALSTOM with
respect to all communications seeking such transfers or Required Consents (as
the case may be). ALSTOM shall similarly perform, or cause to be performed, all
such other action and shall execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, all such other documents as AAI or its
counsel may reasonably request to perfect and protect AAI's rights under this
Agreement.
2.8. Post Closing Adjustment. (a) On the Post-Closing Adjustment
Date,
(i) If a Notice of Disagreement (as defined below) is not
timely delivered, then either
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(x) if the "Contract Total" as set forth on the Post-Closing
PFR is greater than the "Contract Total" as set forth on the Closing
PFR, then ALSTOM shall pay to AAI an amount equal to the difference
between the "Contract Total" as set forth on the Post-Closing PFR
and the "Contract Total" as set forth on the Closing PFR, or
(y) if the "Contract Total" as set forth on the Closing PFR is
greater than the "Contract Total" as set forth on the Post-Closing
PFR, then AAI shall pay to ALSTOM an amount equal to the difference
between the "Contract Total" as set forth on the Closing PFR and the
"Contract Total" as set forth on the Post-Closing PFR.
(ii) If a Notice of Disagreement is timely delivered, then
(x) either (A) if the "Contract Total" as set forth on the
Final Closing PFR is greater than the "Contract Total" as set forth
on the Closing PFR, then ALSTOM shall pay to AAI an amount equal to
such difference, or (B) if the "Contract Total" as set forth on the
Final Closing PFR is less than the "Contract Total" as set forth on
the Closing PFR, then AAI shall pay to ALSTOM an amount equal such
difference; and
(y) either (A) if the "Contract Total" as set forth on the
Final Post-Closing PFR is greater than the "Contract Total" as set
forth on the Final Closing PFR, then ALSTOM shall pay to AAI an
amount equal to such difference, or (B) if the "Contract Total" as
set forth on the Final Post-Closing PFR is less than the "Contract
Total" as set forth on the Final Closing PFR, then AAI shall pay to
ALSTOM an amount equal such difference.
(b) During the 30-day period following ALSTOM's receipt of the
Post-Closing PFR, ALSTOM and its designated independent auditors, shall be
permitted to review (i) the working papers of AAI and, if relevant, its
independent accountants relating to the preparation of the Closing PFR and the
Post-Closing PFR and (ii) any books and records of AAI and other supporting
documentation relating to the preparation of the Closing PFR and the
Post-Closing PFR. The Closing PFR and the Post-Closing PFR shall become final
and binding upon the parties on the thirtieth day following delivery of the
Post-Closing PFR, unless ALSTOM gives written notice of disagreement with the
Closing PFR or the Post-Closing PFR (the "Notice of Disagreement") to AAI prior
to such date. Any Notice of Disagreement shall specify in reasonable detail the
nature of any disagreement asserted. If a Notice of Disagreement complying with
the preceding sentence is received by AAI in a timely manner, then the Closing
PFR and the Post-Closing PFR (as revised in accordance with clause (i) or (ii)
below)
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shall become final and binding upon the parties (the "Final Closing PFR" and the
"Final Post-Closing PFR", respectively) on the earlier of (i) the date AAI and
ALSTOM resolve in writing any differences they have with respect to the matters
specified in the Notice of Disagreement or (ii) the date any disputed matters
are finally resolved in writing by the Accounting Firm (as defined below).
(c) During the 30-day period following the delivery of a Notice of
Disagreement that complies with the preceding paragraph, AAI and ALSTOM shall
seek in good faith to resolve in writing any differences which they may have
with respect to the matters specified in the Notice of Disagreement. During such
period AAI and its independent auditors (if any) shall be permitted to review
(i) the working papers of ALSTOM and, if relevant, ALSTOM's designated
independent auditors (if any) relating to the preparation of the Notice of
Disagreement and (ii) any other supporting documentation relating to the
preparation of the Notice of Disagreement. If, at the end of such 30-day period,
the differences specified in the Notice of Disagreement are not resolved, AAI
and ALSTOM shall submit to an independent accounting firm (the "Accounting
Firm") for resolution of all matters which remain in dispute. The Accounting
Firm shall be a mutually acceptable independent public accounting firm agreed
upon by the parties. AAI and ALSTOM shall request that the Accounting Firm to
render a decision within thirty days of the submission of such matters to the
Accounting Firm. AAI and ALSTOM agree that judgment may be entered upon the
determination of the Accounting Firm in any court having jurisdiction over the
party against which such determination is to be enforced. Except as specified in
the following sentence, the cost of any dispute resolution procedure (including
the fees and expenses of the Accounting Firm) pursuant to this Section 2.8 shall
be equitably borne as determined by the Accounting Firm in its sole discretion.
AAI shall bear its own expenses in connection with the issuance of the Closing
PFR and the Post-Closing PFR, and ALSTOM shall bear its own expenses in
connection with its review of the Closing PFR and the Post-Closing PFR.
ARTICLE 3
ASSUMPTION OF LIABILITIES
3.1 Assumed Liabilities under Assigned Contracts. Except as set
forth in Section 3.3 hereof, ALSTOM shall assume as of the Closing Date (i) all
obligations of AAI to be performed after the Closing Date under the Assigned
Contracts, (ii) all of the product warranty claims (including but not limited to
fleet defects and design defects) and product liability claims relating to the
NJT Contract or the MMTA Contract, whether relating to the period prior to the
Closing Date or after the Closing Date, and (iii) the obligation to pay any
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liquidated damages that may be assessed under the NJT Contract or the MMTA
Contract after the Closing Date.
3.2 Accounts Payable. ALSTOM shall assume as of the Closing Date all
accounts payable of AAI relating solely to the Assigned Contracts and incurred
prior to the Closing Date in the ordinary course of performance of such
Contracts, but only if delivery for such payable has not occurred prior to the
Closing Date.
3.3 Non-Assumption of Liabilities.
(a) Notwithstanding Sections 3.1 and 3.2 hereof, ALSTOM shall not
assume (i) any liability under or with respect to any Assigned Contract for any
obligation required by the terms thereof to be discharged prior to the Closing
Date, (ii) any liability under any Assigned Contract incurred by AAI in
violation of the provisions of this Agreement or (iii) any liability arising out
of a breach or default by AAI at or prior to the Closing Date (including any
liability arising out of any event occurring at or prior to the Closing Date
that with the lapse of time or the giving of notice, or both, would become a
breach or default) under any Assigned Contract (except as set forth in Section
3.1). In addition, to the extent that a Required Consent has not been obtained
as of the Closing Date with respect to any Assigned Contract, such Assigned
Contract shall not be deemed transferred to or assumed by ALSTOM hereunder,
unless and until such Required Consent is obtained.
(b) ALSTOM shall not assume, undertake, accept, be bound by or
otherwise be responsible for any duties, responsibilities, claims, debts,
obligations or liabilities of AAI of any kind or nature whatsoever (whether
known, unknown, contingent or otherwise) other than the Assumed Liabilities (all
such duties, responsibilities, claims, debts, obligations and liabilities being
referred to herein as the "Non-Assumed Liabilities"). Without limiting the
generality of the foregoing, it is understood that ALSTOM shall not assume,
undertake, accept, be bound by or otherwise be responsible for, and AAI shall
retain, any duties, responsibilities, claims, debts, obligations or liabilities
of AAI (including, without limitation, any that exist at the Closing Date or
that may arise in the future with respect to matters occurring at or prior to
the Closing Date):
(i) which arise under any Legal Requirements (including,
without limitation, those relating to antitrust, civil rights,
health, safety, labor, discrimination and the Environment) relating
to the Assigned Contracts and the Transferred Assets with respect to
any condition existing or event occurring prior to the Closing Date;
(ii) except as otherwise expressly set forth herein, which
arise out of or relate to the performance of the Assigned
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Contracts prior to the Closing Date, including, without limitation,
any Losses arising out of or in connection with any claims for
personal injuries, property damages or consequential damages
(whether or not pending, threatened or asserted before or after the
Closing Date) relating to services provided, products sold or
manufactured or condition or operation of plant or premises;
(iii) to employees or former employees of AAI, or any of their
beneficiaries, heirs or assignees, including (x) any pension,
accrued vacation or other liabilities or benefits, and (y) any
arising by virtue of any collective bargaining relationship or
agreement or pursuant to the National Labor Relations Act or any
other labor relations law;
(iv) that arises out of or relates to the employment or
termination of employment of any employees, agents or independent
contractors by AAI;
(v) to the Pension Benefit Guaranty Corporation, Internal
Revenue Service, Department of Labor, Immigration and Naturalization
Service or any similar domestic or foreign organization, or to a
multi-employer plan, whether arising out of the employment by AAI of
any employees or former employees, the transactions contemplated by
this Agreement, or otherwise;
(vi) with respect to any Tax of AAI imposed upon or owed by
AAI or any of its Affiliates, arising from the ownership,
performance, use, or operation of the Assigned Contracts or
Transferred Assets at or prior to the Closing Date, or arising from
transactions contemplated by this Agreement (except as provided in
Section 10.4), including any such Tax which may be asserted against
ALSTOM as a successor or transferee or which could attach to the
Transferred Assets or Assigned Contracts;
(vii) which arise under any Contract of AAI other than those
expressly assumed under Assigned Contracts;
(viii) which relate to the business or Assets of AAI other
than those included in the Assigned Contracts and the Transferred
Assets;
(ix) which arise out of or relate to the activities (before or
after the Closing Date) of (i) any business of AAI (other than those
relating to the Assigned Contracts) which occupies or utilizes space
at a site or Facility where the Assigned Contracts are
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being performed or (ii) any other business of AAI with which ALSTOM
may share Assets, facilities or services at any time after the
Closing Date;
(x) which relate to any Environmental Costs and Liabilities of
AAI including, without limitation, any claim that relates to or
arises in connection with the Assigned Contracts or the Transferred
Assets (including, but not limited to facilities used for the
off-site disposal of waste), if the Environmental claim is based on
any act or omission of AAI, or relate to any condition existing on
or prior to the Closing Date; or
(xi) for any accounts payable of AAI for which delivery has
occurred prior to the Closing Date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AAI
AAI represents and warrants to ALSTOM as follows:
4.1 Incorporation. AAI was incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland, with the
corporate power to own or lease and operate its properties and to carry on its
businesses as now being conducted.
4.2 Corporate Power, Etc. AAI has the corporate power to execute,
deliver and perform this Agreement. The execution, delivery and performance of
this Agreement have been, and as of the Closing will have been, duly authorized
by all necessary corporate action. This Agreement has been, and as of the
Closing will have been, duly executed and delivered by AAI. This Agreement
constitutes, and as of the Closing will constitute, the valid and binding
agreements of AAI, enforceable against AAI in accordance with its terms, except
that (i) such enforceability may be limited by applicable Bankruptcy Laws or
similar laws affecting the enforcement of creditors' rights generally and (ii)
no representation or warranty is made as to the availability of any equitable
remedy in connection with the enforcement of any term hereof or thereof.
4.3 No Conflict. The execution, delivery and performance by AAI of
this Agreement do not, and will not, (i) conflict with or contravene the
certificate of incorporation, by-laws or similar constitutive documents of AAI;
(ii) conflict with, result in a breach of or entitle any party to terminate or
call a default with respect to, any material agreement or instrument to which
AAI is a
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party or by which AAI or any of its properties or assets are bound (subject to
obtaining the Required Consents); or (iii) conflict with or contravene any
order, arbitration award, judgment, injunction or decree against, or binding
upon, any of AAI or upon its properties or assets.
4.4 Consents, Etc. Except as disclosed on Schedule 4.4 hereto, no
consent, license, permit, approval, order or authorization of, or registration,
declaration, qualification or filing with (except for those which have been made
or obtained) any Governmental Entity or any Person will be required to be
obtained or made in connection with the execution, delivery or performance by
AAI of this Agreement.
4.5 Financial Information. AAI has delivered to ALSTOM copies of:
(i) the Reference Date PFR; and
(ii) the Signing POH.
The Reference Date PFR and the Signing POH are accurate, complete and correct in
all material respects, were derived on a reasonable basis from AAI's books and
records (which books and records are maintained in accordance with GAAP) and
have been prepared in accordance with AAI's books and records and past
practices, applied on a consistent basis.
4.6 Absence of Material Change. Since the Reference Date, except as
set forth on Schedule 4.6 hereto:
(a) there has not been, occurred or arisen (i) any action by AAI
which is inconsistent with the representations and agreements of AAI set forth
herein or (ii) any acquisition or disposition by AAI through the date hereof of
any right, title or interest in or to any Transferred Assets in any one
transaction or related series of transactions having a value of $50,000 or more;
(b) there has not been, occurred or arisen any damage, destruction
or like casualty loss to any Transferred Asset that, if such damage, destruction
or like casualty loss is insured, would, individually or in the aggregate, have
a Material Adverse Effect or, if such damage, destruction or like casualty loss
is not insured, would exceed, individually or in the aggregate, $100,000;
(c) AAI has not written down or written up (or failed to write down
or write up in accordance with GAAP consistent with past practice) the value of
any Inventories or Receivables or revalued any Transferred Assets other than in
the ordinary course of business consistent with past practice and in accordance
with GAAP;
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(d) AAI has not issued any sales orders or purchase orders with
respect to the Assigned Contracts or the Transferred Assets other than in the
ordinary course of business consistent with past practice;
(e) AAI has not made any material changes in the customary methods
of performance of the Assigned Contracts, including, without limitation,
practices and policies relating to manufacturing, purchasing, Inventories,
marketing, selling and pricing;
(f) AAI has not (i) disclosed any material secret or confidential
Owned Intellectual Property or Third Party Intellectual Property (except by way
of issuance of a patent) other than in the ordinary course of business
consistent with past practice or (ii) permitted to lapse or go abandoned any
Owned Intellectual Property or Third Party Intellectual Property or Permits (or
any registration or grant thereof or any application relating thereto) to which,
or under which, AAI has any right, title, interest or license;
(g) AAI has not amended, modified or consented to the termination of
any Major Contract or AAI's rights thereunder (other than in connection with the
Option); or
(h) there has not been, occurred or arisen any authorization,
approval, agreement or other commitment to do any of the foregoing.
4.7 Transferred Assets.
(a) Completeness. The Transferred Assets (including any Assets held
or used pursuant to any Contract included in the Transferred Assets) constitute
all the Assets owned, used or held for use by AAI in connection with, or
otherwise related to the performance of the Assigned Contracts (other than the
Excluded Assets).
(b) Title. As of the date of this Agreement, AAI has, and, at the
Closing, AAI will have and will convey to ALSTOM, good and valid title to all of
the Transferred Assets free and clear of any Liens other than Permitted Liens,
except for those Liens set forth on Schedule 4.7(b) hereto, which shall be
released as part of the Required Consents.
(c) Equipment. All Equipment is in all material respects in good
working order and has been maintained in accordance with AAI's standard
practices and procedures, normal wear and tear excepted.
(d) Receivables. All Receivables arose from, and the Receivables
existing on the Closing Date will have arisen from, the performance of the NJT
Contract and the MMTA Contract and the amounts thereof were
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properly reflected on the Reference Date PFR and will be properly reflected on
AAI's books and records in accordance with GAAP and consistent with past
practice.
(e) Inventories.
(i) Subject to amounts reserved therefor on the Signing
Inventory Valuation, the values at which all Inventories are carried
on the Signing Inventory Valuation reflect the historical inventory
valuation policy of AAI of stating such Inventories at the lower of
cost (determined on the average cost method) or market value. Except
as set forth on Schedule 4.7(e) Part I, the Inventories do not
consist of any items held on consignment. AAI is not under any
obligation or liability with respect to accepting returns of items
of Inventory or merchandise in the possession of its customers other
than in the ordinary course of the business consistent with past
practice. Schedule 4.7(e) Part II contains a complete list of the
addresses of all Facilities or other warehouses and facilities in
which the Inventories are located.
(ii) The Inventories are in good condition in all material
respects are suitable and usable in the performance of the Assigned
Contracts.
(iii) The material listed on Schedule 4.7(e) Part III hereto
is material that has been procured in excess of the production
requirements under the Assigned Contracts and, as of the Closing
Date, will not have been used to meet any production requirements
under the Assigned Contracts, and to the extent used to meet any
warranty requirements under the Assigned Contracts will be replaced.
(f) Taxes. There are no and, by reason of the consummation of the
transactions contemplated hereby, there will be no, Tax liabilities of AAI or
any of its Affiliates which could result in successor or transferee liability to
ALSTOM or which could attach to the Transferred Assets or the Assigned Contracts
(except as provided in Section 10.4).
4.8 Assigned Contracts. Schedule 4.8 hereto contains a complete and
correct list in all material respects of all Assigned Contracts, other than the
NJT Contract and the MMTA Contract, as of the date hereof. AAI has furnished or
made available to ALSTOM complete and correct copies of each Assigned Contract.
Each Assigned Contract is valid and binding upon AAI and, to the knowledge of
AAI, each other party thereto (subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium
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and similar laws affecting creditors' rights and remedies generally, and to
general principles of equity) and is in full force and effect. Subject to
obtaining the Required Consents, each Assigned Contract is fully and freely
assignable to ALSTOM without penalty or other adverse consequences, and such
assignment and the other transactions contemplated by this Agreement do not and
will not constitute an event that would, with the passage of time or the giving
of notice or both, without regard to any cure period, would (i) constitute a
default by AAI under any Assigned Contract (or, to the knowledge of AAI, any
other party thereto) (ii) permit modification, acceleration or termination of
any Assigned Contract by AAI (or, to the knowledge of AAI, any other party
thereto) or (iii) result in the creation of any Lien upon, or any person
obtaining any right to acquire, any of the Transferred Assets or Assigned
Contracts, and upon consummation of the transactions contemplated by this
Agreement, each Assigned Contract shall continue in full force and effect
without penalty or other adverse consequence. There is no default or claim of
default by AAI (or, to the knowledge of AAI, any other party thereto) under any
provision of any Assigned Contract and no event has occurred which, with the
passage of time or the giving of notice (or both), without regard to any cure
period would (i) constitute a default by AAI (or, to the knowledge of AAI, any
other party thereto) under any provision thereof, (ii) permit modification,
acceleration or termination of any Assigned Contract by AAI (or, to the
knowledge of AAI, any other party thereto) or (iii) result in the creation of
any Lien upon, or any person obtaining any right to acquire, any of the
Transferred Assets or Assigned Contracts, in each case except as would not have
a Material Adverse Effect. Except as listed on Schedule 4.8, 4.9(b) or 4.11
hereto, there are no material unresolved disputes under any Assigned Contract.
4.9 Litigation; Compliance with Law.
(a) Except as set forth on Schedule 4.9(a) hereto, no investigations
or reviews by any foreign, federal, state or local governmental or regulatory
body, agency or authority with respect to the Assigned Contracts, or any of the
Transferred Assets or Assumed Liabilities, are pending or, to the knowledge of
AAI, threatened, nor has any such governmental or regulatory body, agency or
authority indicated to AAI an intention to conduct the same, which, if concluded
in a manner adverse to AAI, would, individually or in the aggregate, constitute
a Material Adverse Effect.
(b) Schedule 4.9(b) hereto sets forth all claims, actions, suits and
proceedings pending or, to the knowledge of AAI, threatened against AAI in
connection with the performance of the Assigned Contracts or otherwise affecting
the Assigned Contracts or any of the Transferred Assets, at law or in equity,
before or by any foreign, federal, state or local court or governmental or
regulatory body, agency or authority, except for any matter as to which no
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injunctive or like equitable relief has been requested or granted and the amount
of damages claimed or threatened would not have a Material Adverse Effect.
(c) Except as set forth on Schedule 4.9(c) hereto, (i) there is no
outstanding judgment, order, injunction or decree of any foreign, federal, state
or local court, government or government agency against or affecting the
Assigned Contracts or any of the Transferred Assets and (ii) since the
commencement of performance of the Assigned Contracts, AAI has not been a party
to, or bound by, any such judgment, order, injunction or decree, except any such
matters involving the settlement or adjudication of claims by non-governmental
third parties where no injunctive or like equitable relief was granted and which
resulted in the payment of damages by AAI that would not have a Material Adverse
Effect.
(d) The Assigned Contracts as currently being performed are in
compliance with currently applicable Environmental Laws except to the extent
that any failure to comply with such Legal Requirements would not, individually
or in the aggregate, constitute a Material Adverse Effect. As regards Legal
Requirements applicable to the Assigned Contracts or the Transferred Assets
other than Environmental Laws, the Assigned Contracts are being performed in
compliance with all such Legal Requirements, except for any non-compliance that
would not, individually or in the aggregate, have a Material Adverse Effect.
4.10 Intellectual Property; Technology; Software.
(a) At Closing, ALSTOM shall have the right to use, solely in
connection with the performance of the NJT and MMTA Contracts, all Owned
Intellectual Property (including all applicable application and registration and
identification numbers), Owned Technology and Owned Software, and all Third
Party Intellectual Property, Third Party Technology and Third Party Software
used, held for use or intended to be used by AAI in, or necessary to, the
performance of the Assigned Contracts. All registrations of any such
Intellectual Property, Technology and Software have been maintained so as to
avoid a lapse, revocation or termination, except as would not have a Material
Adverse Effect.
(b) Except as expressly disclosed pursuant to or set forth on
Schedule 4.10(b) hereto, to the knowledge of AAI, the present use by AAI of the
Owned Intellectual Property, the Owned Technology and the Owned Software, and
all Third Party Intellectual Property, Third Party Technology and Third Party
Software, does not violate or infringe any rights of any Third Party, or
constitute a breach of any Contract, except as would not have a Material Adverse
Effect. Except as disclosed on Schedule 4.10(b) hereto, AAI has not received any
unresolved and currently effective written notice from any Third Party
pertaining to or challenging the right of AAI to use any such Owned Intellectual
Property,
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Third Party Intellectual Property, Owned Technology, Third Party Technology,
Owned Software or Third Party Software.
(c) Except as described pursuant to or set forth on Schedule 4.10(c)
hereto or as would not have a Material Adverse Effect, (i) AAI has not made any
claim of any violation or infringement by others of its rights to or in
connection with any Owned Intellectual Property, Owned Technology, Owned
Software, Third Party Intellectual Property, Third Party Technology or Third
Party Software (and, to the knowledge of AAI, there exist no circumstances
requiring the making of any such claim in order to adequately protect the rights
of ALSTOM therein), and (ii) there are no interferences, oppositions,
cancellations or other contested proceedings, either pending or, to the
knowledge of AAI, threatened, in the United States Copyright Office, the United
States Patent and Trademark office or any foreign, federal, state or local court
or before any other governmental agency or tribunal, relating to any pending
application or registration with respect to or covering the Owned Intellectual
Property, the Owned Technology or the Owned Software, in the case of each of
clauses (i) and (ii), which would negatively and materially affect the rights
granted to ALSTOM in Section 4.10(a) and in Section 6.12.
(d) AAI has the right to permit ALSTOM to use the Owned Intellectual
Property, the Owned Technology and the Owned Software, and all licenses to Third
Party Intellectual Property, Third Party Software and Third Party Technology,
and none of its rights to such Intellectual Property, Technology and Software
are or will be adversely affected by the use thereof as contemplated by this
Agreement.
(e) Notwithstanding anything in this Agreement to the contrary, AAI
reserves the right to exploit any or all of its intellectual property rights and
interests, provided, however, that such exploitation shall not negatively affect
the rights granted to ALSTOM in Section 4.10(a) and in Section 6.12.
4.11 Suppliers. Except as set forth on Schedule 4.11 hereto, AAI has
received no notice of any development, and, to the knowledge of AAI, no
development exists, which threatens to affect adversely and materially AAI's
arrangements with any customer or supplier (other than ALSTOM or its Affiliates)
under an Assigned Contract except as would not have a Material Adverse Effect.
4.12 No Brokers. Except for First Equity Development Inc., there is
no investment banker, broker, finder or other similar intermediary which has
been retained by AAI or is authorized to act on behalf of AAI or any of their
officers and directors who might be entitled to any fee or commission from AAI
upon consummation of the transactions contemplated by this Agreement. AAI is
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solely responsible the fees, commissions and expenses of First Equity
Development Inc.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ALSTOM
ALSTOM represents and warrants to AAI as follows:
5.1 Incorporation. ALSTOM was incorporated and is validly existing
as a corporation in good standing under the laws of the State of New York, with
the corporate power to own or lease and operate its properties and to carry on
its businesses as now being conducted.
5.2 Corporate Power, Etc. ALSTOM has the corporate power to execute,
deliver and perform this Agreement. The execution, delivery and performance of
this Agreement have been, and as of the Closing will have been, duly authorized
by all necessary corporate action. This Agreement has been, and as of the
Closing will have been, duly executed and delivered by ALSTOM. This Agreement
constitutes, and as of the Closing will constitute, the valid and binding
agreements of ALSTOM, enforceable against ALSTOM in accordance with their terms,
except that (i) such enforceability may be limited by applicable Bankruptcy Laws
or similar laws affecting the enforcement of creditors' rights generally and
(ii) no representation or warranty is made as to the availability of any
equitable remedy in connection with the enforcement of any term hereof or
thereof.
5.3 No Conflict. The execution, delivery and performance by ALSTOM
of this Agreement do not, and will not, (i) conflict with or contravene the
certificate of incorporation, by-laws or similar constitutive documents of
ALSTOM; (ii) conflict with, result in a breach of or entitle any party to
terminate or call a default with respect to, any material agreement or
instrument to which ALSTOM is a party or by which ALSTOM or any of its
properties or assets are bound; or (iii) conflict with or contravene any order,
arbitration award, judgment, injunction or decree against, or binding upon, any
of ALSTOM or upon its properties or assets.
5.4 Consents, Etc. Except as disclosed on Schedule 5.4 hereto, no
consent, license, permit, approval, order or authorization of, or registration,
declaration, qualification or filing with (except for those which have been made
or obtained) any Governmental Entity or any Person will be required to be
obtained or made in connection with the execution, delivery or performance by
ALSTOM of this Agreement.
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5.5 Absence of Litigation. There is no action, suit, litigation,
claim, governmental or other proceeding or investigation pending or, to the best
knowledge of ALSTOM, threatened against ALSTOM which is reasonably likely to
restrain, enjoin or otherwise prevent or materially delay the consummation of
the transactions contemplated by this Agreement or the full performance of the
obligations of ALSTOM hereunder.
5.6 No Brokerage. There is no investment banker, broker, finder or
other similar intermediary which has been retained by ALSTOM or is authorized to
act on behalf of ALSTOM or any of their officers and directors who might be
entitled to any fee or commission from ALSTOM upon consummation of the
transactions contemplated by this Agreement.
ARTICLE 6
COVENANTS
6.1 Performance of Assigned Contracts and Preservation of
Inventories. From the date hereof until the Closing Date, AAI shall (i) perform
the Assigned Contracts diligently, only in the ordinary course and substantially
in the same manner as heretofore conducted; (ii) obtain the consent of ALSTOM to
any transaction involving the Assigned Contracts outside of the ordinary course
of business or involving a change to any Assigned Contract which can be
reasonably expected to have a value of more than $50,000 (in each case other
than delivery of vehicles under the NJT Contract and the MMTA Contract) (such
consent not to be unreasonably withheld or delayed by ALSTOM); (iii) obtain the
consent of ALSTOM to any acquisition or disposition of any right, title or
interest in or to any Transferred Assets in any one transaction or related
series of transactions having a value of $50,000 or more (other than delivery of
vehicles under the NJT Contract and the MMTA Contract) (such consent not to be
unreasonably withheld or delayed by ALSTOM); (iv) notify ALSTOM of any sales
orders or purchase orders with respect to the Assigned Contracts or the
Transferred Assets that individually exceed $25,000; (v) notify ALSTOM of any
sales orders or purchase orders with respect to the Assigned Contracts or the
Transferred Assets that individually exceed $5,000 when the issuance of all
sales or purchase orders in the aggregate exceed $100,000; and (vi) perform all
acts to be performed by it pursuant to this Agreement and refrain from knowingly
taking or omitting to take any action that would violate AAI's representations
and warranties hereunder or render them inaccurate as of the date hereof or the
Closing or that in any way would prevent the consummation of the transactions
contemplated hereby or thereby. For the purposes of this Section 6.1, notice and
consent shall mean notice to and the consent of the Program Manager designated
by ALSTOM. Without limiting the foregoing:
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(a) AAI shall use its commercially reasonable efforts consistent
with past practice to preserve the goodwill of the suppliers, distributors,
customers and others having business relationships with respect to the Assigned
Contracts;
(b) AAI will give prompt notice to ALSTOM of (i) any material breach
or default (or notice thereof) of any Assigned Contract or (ii) any other event
that, individually or in the aggregate, may have a Material Adverse Effect;
(c) AAI will not shorten or lengthen the customary payment cycles
for any of its receivables with respect to the Assigned Contracts, and, if at
any time after the Closing Date any supplier of ALSTOM refuses to deliver to
ALSTOM under an Assigned Contract or requires such deliveries to ALSTOM to be
C.O.D. due solely to the failure of AAI to make a non-disputed payment to such
supplier with respect to an Assigned Contract within AAI's customary payment
cycle, AAI shall, within two Business Days of its receipt of written notice
thereof from ALSTOM, make such non-disputed payment to such supplier;
(d) on each of the 30th, 60th and 90th day following the Closing
Date, representatives from both AAI and ALSTOM shall meet to discuss all
Assigned Contracts under which an invoice was received and/or delivery was made
or attempted prior to the Closing Date, but which have not been paid by AAI in
accordance with their terms. ALSTOM shall determine, in its sole discretion,
what payments under such Assigned Contracts shall be made by AAI, and AAI shall
make such payments under such Assigned Contracts, provided however, that (i) AAI
shall not be required to make any such payments under any Assigned Contracts
with Wabco, and (ii) if ALSTOM requires AAI to pay for any goods, materials or
services as to which there is a bona fide dispute alleging that such goods,
services or materials are non-compliant and that are not reflected in the
Post-Closing PFR (or, if it has been finalized, the Final Post-Closing PFR),
ALSTOM shall (x) reimburse AAI for the amount of such payment and (y) indemnify
AAI from and against any Losses that may arise out of ALSTOM's use of any such
non-conforming goods, materials or services; and
(e) AAI will maintain the level, mix, and quality of the Inventories
consistent with past practice.
6.2 Filings; Consents. As promptly as practicable after the date
hereof, the parties hereto shall cooperate with one another and take such
actions as may be necessary to cause such notices, declarations, filings and
registrations to be filed with, and the Required Consents to be obtained from,
any Third Party or Governmental Entity in connection with the transactions
contemplated by this Agreement; provided however, that neither ALSTOM nor
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AAI shall have any obligation to give any guarantee or other consideration of
any nature in connection with any such Required Consent or to consent to any
change in the terms of any Assigned Contract which it in its sole and absolute
discretion may deem adverse to its interests.
6.3 Access. Between the date hereof and the Closing, AAI shall give
ALSTOM and its authorized representatives reasonable access during normal
business hours and on reasonable advance notice to AAI in order to complete its
review and investigation of the books, records, documents, properties, assets
and operations of AAI relating to the Assigned Contracts and Transferred Assets
(subject to AAI's normal security procedures) and shall furnish to ALSTOM all
such information concerning such matters as ALSTOM may reasonably request,
subject to appropriate confidentiality restrictions.
6.4 Notification of Certain Matters. Between the date hereof and the
Closing AAI and ALSTOM shall give prompt notice in writing to the other of (i)
any information that indicates that any representation or warranty of AAI or
ALSTOM, as applicable, contained in this Agreement was not true and correct in
all material respects as of the date hereof or will not be true and correct in
all material respects as of the Closing, (ii) the occurrence of any event which
will result, or has a reasonable prospect of resulting, in the failure to
satisfy a condition specified in Article 7, (iii) any notice or other
communication from any Third Party alleging that the consent of such Third Party
is or may be required in connection with the transactions contemplated by this
Agreement, and (iv) any emergency or other change in the performance of the
Assigned Contracts and of any material governmental complaints, investigations
or hearings (or communications indicating that the same may be contemplated) or
material adjudicatory proceedings involving such contracts.
6.5 Updated Financial Information. On the Closing Date, AAI shall
deliver the Closing PFR to ALSTOM, together with the certificate of the Chief
Financial Officer of AAI. On a date as soon as practicable following the Closing
(but in no event later than 10 days following the Closing), AAI shall deliver
the Post-Closing PFR to ALSTOM, together with the certificate of the Chief
Financial Officer of AAI. The Closing PFR and the Post-Closing PFR will be
accurate, complete and correct in all material respects, will be derived from
AAI's books and records (which books and records are and will be maintained in
accordance with GAAP), will be prepared in accordance with AAI's books and
records and past practices, applied on a consistent basis, and will be prepared
and calculated on the same basis and in the same manner as the Reference Date
PFR.
6.6 Noncompetition. AAI covenants and agrees that, for a period of
four years after the Closing Date it will not, and will cause its
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subsidiaries, Parent and the subsidiaries of Parent not to, directly or
indirectly, through equity ownership or otherwise, compete with ALSTOM in the
business of overhauling and/or refurbishment of subway or rail cars in the
United States, provided, however, that AAI may complete any contracts to engage
in such a competing business that were in effect as of the Reference Date or as
may be necessary or appropriate in obtaining the Required Consents, and
provided, further, that nothing herein shall be construed to prevent AAI or its
Affiliates from owning, as an investment, up to 5% of a class of equity
securities issued by any competitor of ALSTOM that is publicly traded and
registered under the Securities Exchange Act of 1934, as amended. The parties
intend that the covenant contained in the preceding sentence shall be construed
as a series of separate covenants, one for each city and county in the United
States and, except for geographic coverage, each such separate covenant shall be
deemed identical.
6.7 Non-Solicitation of Employees. (a) AAI agrees that, for a period
commencing on the date hereof and continuing to the date two years following
Closing Date, neither it, Parent, nor any of their subsidiaries will, without
the prior written consent of ALSTOM, solicit for employment any employee of
ALSTOM.
(b) ALSTOM agrees that (i) prior to the Closing Date neither it nor
any of its Affiliates will, without the prior written consent of AAI, solicit
for employment any employee of AAI, Parent or any subsidiary of Parent and (ii)
for a period of two years following the Closing Date neither it nor any of its
Affiliates will, without the prior written consent of AAI, solicit for
employment any employee of AAI, Parent or any subsidiary of Parent (x) that is
listed on a side letter to be executed by ALSTOM and AAI promptly after the
execution of this Agreement or (y) that is employed in AAI's Transportation
Division in a capacity not related to the NJT Contract or the MMTA Contract.
6.8 Press Releases. The parties hereto will use commercially
reasonable efforts to mutually agree on the form of any press release with
respect to this Agreement; provided however, that no party shall be required to
obtain the consent of the other party for any disclosure required by law or the
rules of any national securities exchange, but such party will consult with the
other party with respect to such required disclosure and will consider in good
faith the inclusion of the comments of the other party.
6.9. Performance Bonds. ALSTOM shall cause to be issued to the
parties identified on Schedule 6.9 surety bonds to replace the surety and
bonding obligations of Parent and/or AAI listed on such Schedule and to cause
Parent and AAI to be released from such obligations; provided, however, that if
ALSTOM shall fail to comply with this covenant, it is expressly understood that
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ALSTOM shall not be responsible for any consequential, indirect or incidental
damages, including but not limited to loss of profits.
6.10. Conditions Precedent. From and after the date hereof and until
the Closing Date, each party hereto shall use commercially reasonable efforts to
cause the conditions precedent to the consummation of the transactions
contemplated hereby to be satisfied.
6.11. Delivery of Software, Technology and Intellectual Property. No
later than the date of termination of the Transitional Services Agreement, or
such earlier date after the Closing Date as requested by ALSTOM, AAI shall:
(a) for the use described in Section 4.10(a), deliver
(electronically) to ALSTOM the Owned Software and Third Party
Software in object code and (if applicable) source code format; and
(b) for the use described in Section 4.10(a), deliver to
ALSTOM the Owned Technology, Owned Intellectual Property, Third
Party Technology and Third Party Intellectual Property in whatever
form it exists.
6.12. License to CDS. AAI shall cause NJT to make available to
ALSTOM all rights relating to the Central Diagnostic System which are granted by
AAI to NJT under a license agreement to be executed by AAI and NJT prior to
Closing.
6.13. DBE.
(a) ALSTOM agrees that, in connection with the preparation of
modifications to the Disadvantaged Business Enterprise ("DBE") plans previously
submitted to NJT and MMTA, it will commit in such plans to procure $1,000,000 of
additional DBE content for the performance of each of the NJT and MMTA Contracts
($2,000,000 in the aggregate), such content to be procured through DBE
distributors by the issuance of Contracts valued, in the aggregate, at
$3,333,333.
(b) AAI and ALSTOM shall jointly prepare and agree to the
modification to the DBE plans described in clause (a) above as part of the
modifications to be presented by AAI to NJT and MMTA, as applicable, for
approval, which additional modifications shall be reasonably acceptable to
ALSTOM (such plans, the "New DBE Plans"). In connection with procuring the
required consent of NJT and MMTA to such New DBE Plans, AAI (i) will not agree
to any fines, penalties, fees, concessions, restitution or any other remedies,
arrangements or agreements of any sort with NJT and/or MMTA that would
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create for ALSTOM any additional liability, obligation or responsibility of any
sort thereby relating to DBE requirements other than the obligation to comply
with the applicable approved New DBE Plan and (ii) will be responsible for any
fines, penalties, fees or other remedies of NJT or MMTA, as the case may be, for
any non-compliance with DBE requirements prior to the Closing Date.
6.14. Liquidated Damages. In connection with procuring the Required
Consents of NJT and MMTA to the New Project Delivery Schedules (as defined in
Section 7.2(g) below), AAI (a) will not agree to any fines, penalties, fees or
concessions or other arrangements or agreements of any sort with NJT and/or MMTA
that would create for ALSTOM any additional liability, obligation or
responsibility of any sort thereby relating to liquidated damages other than the
obligation to comply with the applicable New Project Delivery Schedules and (b)
will be responsible for any fines, penalties, fees or other remedies of NJT or
MMTA, as the case may be, with respect to any liquidated damages assessed prior
to the Closing Date.
ARTICLE 7
CLOSING CONDITIONS
7.1 Conditions to Obligations of AAI. The obligations of AAI to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction of, or waiver by AAI of, the following conditions at or before the
Closing:
(a) Representations and Warranties Correct. Each representation and
warranty of ALSTOM made or to be made in or pursuant to this Agreement shall be
true and correct in all material respects as of the Closing Date and as of the
date hereof, with the same force and effect as though made at and as of each
such date; provided, however, that if any such representation or warranty is
subject to any materiality qualification (including qualifications indicating
accuracy in all material respects) or "Material Adverse Effect" qualification
(including qualifications indicating accuracy with such exceptions as have not,
will not, would not, are not reasonably likely to, or would not reasonably be
expected to have or result in a material adverse effect), for purposes of
determining whether this condition has been satisfied, such representation or
warranty as so qualified shall be true and correct in all respects. AAI shall
have received from an appropriate officer or officers of ALSTOM a certificate or
certificates to such effect.
(b) Performance; No Default. ALSTOM shall have performed and
complied in all material respects with all obligations, agreements, conditions
and conditions required by this Agreement to be performed by it at or prior to
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the Closing, and AAI shall have received from an appropriate officer or officers
of ALSTOM a certificate or certificates to such effect.
(c) Required Consents. All Required Consents shall have been
obtained and AAI shall have been furnished with copies thereof.
(d) No Injunction. No action, suit or proceeding shall be pending
before any Governmental Entity (or shall be threatened by any such Governmental
Entity), and no investigation of any Governmental Entity shall have been
commenced (and be pending) seeking to restrain, enjoin, invalidate, prohibit or
delay (or questioning the validity or legality of) the transactions contemplated
hereby or seeking material damages in connection therewith.
(e) Performance Bonds. AAI and Parent shall have been released from
all of its obligations under all of the performance bonds relating to the NJT
Contract and the MMTA Contract that are set forth on Schedule 6.9.
(f) Release from NJT Contract and MMTA Contract. AAI shall have been
released from all of its obligations under the NJT Contract and the MMTA
Contract.
7.2 Conditions to Obligations of ALSTOM. The obligations of ALSTOM
to consummate the transactions contemplated by this Agreement are subject to the
satisfaction of, or waiver by ALSTOM of, the following conditions at or before
the Closing:
(a) Representations and Warranties Correct. Each representation and
warranty of AAI made or to be made in or pursuant to this Agreement shall be
true and correct in all material respects as of the Closing Date and as of the
date hereof, with the same force and effect as though made at and as of each
such date; provided, however, that if any such representation or warranty is
subject to any materiality qualification (including qualifications indicating
accuracy in all material respects) or "Material Adverse Effect" qualification
(including qualifications indicating accuracy with such exceptions as have not,
will not, would not, are not reasonably likely to, or would not reasonably be
expected to have or result in a material adverse effect), for purposes of
determining whether this condition has been satisfied, such representation or
warranty as so qualified shall be true and correct in all respects. ALSTOM shall
have received from an appropriate officer or officers of AAI a certificate or
certificates to such effect.
(b) Performance; No Default. AAI shall have performed and complied
in all material respects with all obligations, agreements, covenants and
conditions required by this Agreement to be performed by it at or prior to
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the Closing, and ALSTOM shall have received from an appropriate officer or
officers of AAI a certificate or certificates to such effect.
(c) Consents. All Required Consents shall have been obtained and
ALSTOM shall have been furnished with copies thereof.
(d) No Injunction. No action, suit or proceeding shall be pending
before any Governmental Entity (or shall be threatened by any such Governmental
Entity), and no investigation of any Governmental Entity shall have been
commenced (and be pending) seeking to restrain, enjoin, invalidate, prohibit or
delay (or questioning the validity or legality of) the transactions contemplated
by this Agreement, or seeking material damages in connection therewith.
(e) Assigned Contracts. (i) Each of the Major Contracts shall be
legal, valid and binding and in full force and effect in accordance with its
terms, (ii) AAI shall have performed all of the payment and other material
obligations required to be performed by it to date under the Major Contracts,
(iii) there shall be no payment default or any other material default by AAI
under any of the Major Contracts, (iv) there shall not exist any condition or
event which, after notice or lapse of time or both, would constitute or give
rise to a payment default or any other material default by AAI under any of the
Major Contracts, or would give to any Person any rights of termination,
cancellation or acceleration of any performance required thereunder or result in
the creation of any Lien (other than Permitted Liens) and there shall not exist
a payment default or any other material default under any Major Contract by any
party with whom AAI has entered into a Major Contract, (vi) the sale, transfer
and assignment of the Major Contracts shall not violate any Legal Requirement
and (vii) AAI shall not have modified any Major Contract in any material
respect.
(f) DBE, MBE, Buy America Act and Cargo Preference Relief. ALSTOM
shall have obtained relief, in form and substance satisfactory to ALSTOM in its
reasonable opinion, from NJT or MMTA, as applicable, with respect to any
applicable "Disadvantaged Business Enterprise", "Minority Business Enterprise",
"Buy America Act" or "Cargo Preference for US Flag Vessels" requirements or
similar requirements contained in the NJT Contract or the MMTA Contract, as
applicable.
(g) Each of NJT and MMTA shall have approved, with respect to the
NJT or MMTA Contract, respectively, a new project delivery schedule (each such
schedule, a "New Project Delivery Schedule"), which in each case shall be the
delivery schedule provided by ALSTOM to NJT and MMTA in the joint meetings among
AAI and ALSTOM with NJT and MMTA held in February, 2002, adjusted (i) on a
day-for-day basis from March 1, 2002, (ii) for deliveries made by
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AAI and (iii) with respect to the MMTA, to reflect a maximum of four cars per
month, and such New Project Delivery Schedules shall be a modification to the
NJT or MMTA Contract, as applicable.
ARTICLE 8
INDEMNIFICATION
8.1 Survival. All representations and warranties shall survive (and
not be affected in any respect by) the Closing or any investigation conducted by
any party or any information which any party may have from time to time, until
the second anniversary of the Closing Date. After a representation and warranty
has terminated and expired, no indemnification will or may be sought pursuant to
this Article 8 on the basis of that representation and warranty by any Person
who had not given notice that he would have been entitled pursuant to this
Article 8 to indemnification on the basis of that representation and warranty
prior to its termination and expiration.
8.2 Indemnification by AAI. AAI shall defend, indemnify and hold
harmless ALSTOM, its Affiliates, officers, directors, employees, agents,
successors and assigns (each, an "ALSTOM Indemnified Party"), from and against
any and all Losses arising out of, based upon or resulting from (i) any breach
by AAI of any representation, warranty, covenant or agreement contained in or
made pursuant to this Agreement, (ii) any and all Losses relating to the
liabilities assumed by ALSTOM pursuant to Section 3.1(ii), but only to the
extent (x) such Losses resulted from an action or inaction of AAI and (y) notice
of the claim in respect of such Losses is brought within 9 months of the Closing
Date; (iii) any claim by a Third Party arising out of any of the action,
inaction, event, condition, liability or obligation of AAI occurring or existing
prior to the Closing (excluding claims in connection with the Assumed
Liabilities set forth in clause (ii) of Section 3.1, except to the extent that
such claims would otherwise be indemnified by AAI pursuant to clause (ii) of
this Section 8.2), (iv) any liabilities of AAI, whether existing before or after
the Closing Date, that are not expressly assumed by ALSTOM pursuant to this
Agreement, including, without limitation, the Non-Assumed Liabilities and (v)
any breaches by AAI under the terms of the Transitional Services Agreement.
Notwithstanding the foregoing provisions of this Section 8.2, (x) with respect
to the indemnity under Section 8.2(i), AAI shall not be required to indemnify or
hold harmless any of the ALSTOM Indemnified Parties on account of any Losses
under Section 8.2(i) unless and until the liability of AAI in respect of such
Losses exceeds $250,000, in which case AAI shall be liable for all such Losses ,
and (y) with respect to the indemnity under Sections 8.2(i) and (ii), AAI shall
be required to indemnify or hold harmless any of the ALSTOM
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Indemnified Parties on account of any Losses under Sections 8.2(i) and (ii) only
up to a maximum aggregate amount of $4,250,000.
8.3 Indemnification by ALSTOM. ALSTOM shall defend, indemnify and
hold harmless AAI, its Affiliates, officers, directors, employees, agents,
successors and assigns (each, an "AAI Indemnified Party"), from and against any
and all Losses arising out of, based upon or resulting from (i) any breach by
ALSTOM of any representation, warranty, covenant or agreement contained in or
made pursuant to this Agreement, (ii) any claim by a Third Party arising out of
any of the action, inaction, event, condition, liability or obligation of ALSTOM
occurring after the Closing, (iii) any liabilities that are expressly assumed by
ALSTOM pursuant to this Agreement, but excluding Losses for which AAI would be
required to indemnify ALSTOM pursuant to Section 8.2(ii) and (iv) any breaches
by ALSTOM under the terms of the Transitional Services Agreement.
Notwithstanding the foregoing provisions of this Section 8.3, with respect to
the indemnity under Section 8.3(i), (x) ALSTOM shall not be required to
indemnify or hold harmless any of the AAI Indemnified Parties on account of any
Losses under Section 8.3(i) unless and until the liability of AAI in respect of
such Losses exceeds $250,000, in which case ALSTOM shall be liable for all such
Losses and (y) ALSTOM shall be required to indemnify or hold harmless any of the
AAI Indemnified Parties on account of any Losses under Section 8.3(i) only up to
a maximum aggregate amount of $4,250,000.
8.4 Indemnification Procedures.
(a) Promptly after receipt by any Person entitled to indemnification
under this Article 8 (an "Indemnified Party") of written notice of the
commencement (or threatened commencement) of any civil, criminal, administrative
or investigative claim, action or proceeding involving a claim in respect of
which the Indemnified Party will seek indemnification pursuant to this
Agreement, the Indemnified Party shall notify the Person that is obligated to
provide such indemnification (an "Indemnifying Party") thereof in writing,
provided that no failure to so notify the Indemnifying Party shall relieve it of
its obligations hereunder except to the extent that such Indemnifying Party has
been materially prejudiced thereby.
(b) The Indemnifying Party shall be entitled to have sole control
over the defense and/or settlement of such claim, provided that, within ten
Business Days of receipt of such written notice, the Indemnifying Party
acknowledges responsibility therefore and notifies the Indemnified Party in
writing of its election to so assume sole control; provided, however, that:
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(i) the Indemnified Party shall be entitled to participate in
the defense of such claim and to employ counsel at its own expense
to assist in the handling of such claim;
(ii) the Indemnifying Party shall obtain the prior written
approval of the Indemnified Party (not to be unreasonably withheld
or delayed) before entering into any settlement of such claim or
ceasing to defend against such claim if, pursuant to or as a result
of such settlement or cessation, injunctive or other relief would be
imposed against the Indemnified Party; and
(iii) the Indemnifying Party shall not consent to the entry of
any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by each claimant or
plaintiff to each Indemnified Party of a release from all liability
in respect of such claim.
After written notice by the Indemnifying Party to the Indemnified Party of its
election to assume sole control of the defense of any such claim, the
Indemnifying Party shall not be liable to such Indemnified Party for any legal
expenses incurred by such Indemnified Party in connection with the defense
thereof. In addition, the Indemnified Party shall make available to the
Indemnifying Party any books, records or other documents within its control that
are necessary or appropriate for such defense.
(c) If the Indemnifying Party does not assume sole control over the
defense of such claim as provided in Section 8.4, the Indemnifying Party may
participate in such defense at its own expense and the Indemnified Party shall
have the right to defend the claim in such manner as it may deem appropriate at
the reasonable cost and expense of the Indemnifying Party, and the Indemnifying
Party shall promptly reimburse the Indemnified Party therefor. If the
Indemnifying Party does not choose to assume sole control over or to participate
in the defense of such claim, it will make available to the Indemnified Party
any books, records or other documents within its control that are necessary or
appropriate for such defense. In no event shall an Indemnifying Party be
required to indemnify an Indemnified Party for any amount paid or payable by
such Indemnified Party in the settlement of any such action, claim or proceeding
agreed to without the written consent of the Indemnifying Party (not to be
unreasonably withheld or delayed).
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ARTICLE 9
TERM AND TERMINATION
9.1 Term. The term of this Agreement shall commence on the date
hereof and may be terminated at any time prior to Closing:
(a) by either party if the Closing shall not have taken place on or
prior to May 31, 2002; provided however, that such right to terminate shall not
be available to a party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or shall have resulted in, the failure
of the Closing to occur on or prior to such date;
(b) by ALSTOM if between the date hereof and the time scheduled for
Closing, an event or development shall occur or fail to occur that would have a
Material Adverse Effect on either the NJT Contract or the MMTA Contract; or
(c) by either party if any final and binding order, judgment,
injunction, award or decree that is not subject to further appeal shall have
been entered that enjoins, restrains or prohibits the consummation of the
transactions contemplated hereby.
9.2 Effect of Termination. If this Agreement is terminated pursuant
to Section 9.1, this Agreement shall forthwith cease to have effect between and
among the parties and all further obligations of the parties shall terminate
without further liability, except that (i) such termination shall not serve to
eliminate any liability arising out of conduct prior to the actual date of
termination and any party hereto may, following such termination, pursue such
remedies as may be available with respect to such liabilities and (ii) the
covenants and agreements contained in Section 10.4 shall survive such
termination. The termination of this Agreement shall not affect any rights or
obligations of any party under this Agreement which are intended by the parties
to survive such termination.
ARTICLE 10
MISCELLANEOUS
10.1 Bulk Sales Laws. ALSTOM waives compliance by AAI with the
provisions of any applicable bulk sales law.
10.2 Access to Books and Records. For a period of six years after
the Closing Date, ALSTOM shall provide AAI with access at reasonable times and
upon reasonable prior notice to (x) such books and records acquired by
NY Master Agreement - Execution Copy
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ALSTOM hereunder as are necessary for AAI's tax, accounting or legal purposes;
and AAI shall similarly provide ALSTOM with access at reasonable times and upon
reasonable prior notice to (x) such books and records relating to the Assigned
Contracts or Transferred Assets and not transferred to ALSTOM pursuant to this
Agreement as are necessary for ALSTOM's tax, accounting and legal purposes.
10.3 Binding Effect; Assignment. This Agreement shall inure to the
benefit of and be binding upon each of the parties hereto, upon such party's
execution and delivery hereof, and upon its successors and permitted assigns. No
party shall assign this Agreement or any of its rights or obligations hereunder
without the prior written consent of the other parties hereto. Any assignment or
purported assignment not made in strict compliance with this Agreement shall be
null and void ab initio.
10.4 Expenses. Except as otherwise expressly provided herein, each
party shall bear the costs and expenses incurred by it in negotiating, entering
into and performing any of its obligations under this Agreement. ALSTOM shall
pay (i) any sales and other transfer taxes and charges payable by reason of the
transfer of the Transferred Assets to ALSTOM and (ii) the costs of packing the
Inventory and other Transferred Assets and shipping the same to an ALSTOM
location.
10.5 No Third Party Beneficiaries. The parties agree that this
Agreement is for the benefit of the parties hereto (and their respective
successors and permitted assigns) and is not intended to confer any rights or
benefits on any Third Party, and that there are no third party beneficiaries to
this Agreement or any part or specific provision of this Agreement, except for
the rights of the Indemnified Parties.
10.6 Entire Agreement; Waiver or Modification. This Agreement, the
Transitional Services Agreement and the Confidentiality Agreement (and the
Schedules and Exhibits hereto and thereto) constitute the entire agreement
between the parties with respect to the subject matter hereof, notwithstanding
any provision of any of such documents to the contrary. This Agreement may be
amended, modified, or supplemented only by a written instrument duly executed by
each party hereto, which instrument shall specifically indicate that it is the
desire of the parties to amend, modify or supplement this Agreement, and
similarly may be waived only by a written instrument duly executed by the
waiving party. No omission or delay on the part of any party in requiring the
due and punctual fulfillment by another party of any of its obligations
hereunder or thereunder shall constitute a waiver by the omitting or delaying
party of any of its rights to require such due and punctual fulfillment of any
obligation
NY Master Agreement - Execution Copy
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hereunder or thereunder, whether similar or otherwise, or a waiver of any remedy
it may have hereunder, thereunder or otherwise.
10.7 Interpretation.
(a) The Article and Section headings in this Agreement are solely
for the convenience and reference of the parties hereto and are not intended to
be descriptive of the entire contents of, or to affect, any of the terms or
provisions hereof. Any provision of this Agreement which provides that a party
may not take a specified action without first obtaining the consent of another
party shall be deemed to permit the party from whom consent is sought to give or
withhold its consent in its sole discretion, unless such provision expressly
sets forth a different standard. The word "including" when used in this
Agreement shall mean "including without limitation" unless otherwise specified.
All pronouns and any variations thereof refer to the masculine, feminine or
neuter, singular or plural, as the context may require.
(b) The words "hereof," "herein" and "hereunder," and words of like
import refer to this Agreement as a whole and not any particular Article or
Section of the Agreement. Unless otherwise specified, references herein to
Articles, Sections, Exhibits and Schedules refer to the Articles, Sections,
Exhibits and Schedules to this Agreement.
10.8 Notices. Any notice, request or other communication under or
with respect to this Agreement shall be in writing and shall be deemed to have
been duly given to any party upon receipt of hand delivery, delivery by courier
service, certified or registered mail (return receipt requested, postage
prepaid), or telecopy transmission with confirmation of receipt, in each case to
such party at its address or telecopy number set forth below:
If to ALSTOM:
ALSTOM
One Transit Drive
Hornell, New York 14843
Attention: Alain Percet
Facsimile No.: (607) 324-4568
with a copy to:
ALSTOM
353 Lexington Avenue, Suite 800
New York, New York 10016
Attention: Doris L. Speer, Esq.
Facsimile No.: (212) 972-4404
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40
and:
Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, NY 10004
Attention: James H. Bluck, Esq.
Facsimile No.: (212) 422-4726
If to AAI:
AAI
P.O. Box 126
York Road and Industry Lane
Hunt Valley, MD 21030
Attention: James H. Perry
Facsimile No.: (410) 683-6498
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Ted S. Waksman, Esq.
Facsimile No.: (212) 310-8007
Any of the addresses set forth above may be changed from time to time by written
notice from the party requesting the change.
10.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ITS CONFLICT OF LAW RULES OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.
10.10 Dispute Resolution. In the event a dispute among the parties
in connection with this Agreement or the Transitional Services Agreement
(including any dispute as to its validity, meaning, effect or termination but
excluding any dispute to be resolved as provided in Section 2.8 hereof), cannot
be resolved among the parties, the parties agree to implement the provisions of
this Section.
(a) In the case a dispute remains unsettled, the matter shall be
brought to the management of each party. The management of the parties shall
negotiate in good faith to properly assign the disputed cost or responsibility
to a party or among the parties. If an amicable settlement cannot be reached
after a reasonable time has been allowed for negotiation, any party may request
that the issue be decided through mediation in accordance with the procedure set
forth in the following paragraph.
NY Master Agreement - Execution Copy
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(b) The parties agree that any controversy arising out of this
Agreement or any interpretation of this Agreement which the parties are not able
to resolve themselves through negotiation, as provided above, shall be submitted
to mediation before any other action is taken. The parties shall mutually agree
upon a third party mediator within a reasonable period of time after the request
for mediation. The costs and expenses of the mediation shall be borne equally by
all the parties. Mediation shall take place within a reasonable period of time
after the selection of the mediator unless extended by the mediator. In the
event mediation is not successful or has not taken place within the period set
forth above, the parties shall implement the provisions of the following
sections.
(c) In case of a dispute between the parties in connection with this
Agreement which the parties are unable to settle amicably as provided above,
such dispute shall be finally resolved by arbitration under the International
Arbitration Rules (the "Rules") of the American Arbitration Association ("AAA")
and the following provisions of this Section 10.10.
(d) The arbitration shall be conducted under the United States
Arbitration Act in the English language in the State of New York.
(e) There shall be three arbitrators chosen as follows: Each of the
parties to the dispute shall appoint one arbitrator, or, if there are more than
two parties to the dispute, each of the two parties with the largest amounts in
dispute will appoint one arbitrator, and the two so appointed shall appoint the
third arbitrator, who shall be an attorney admitted to the bar for at least ten
years, and who shall act as presiding arbitrator. If either party fails to
appoint an arbitrator within the time provided by the Rules, or if the two so
appointed fail to appoint the presiding arbitrator within sixty days of the
appointment of the second arbitrator, the arbitrator or arbitrators needed shall
be appointed by the AAA in accordance with the Rules.
(f) The award of the arbitrators shall be accompanied by a statement
of the reasons upon which the award is based. The award of the arbitrators shall
be final and unappealable, and judgment upon the award of the arbitrators may be
entered in any court having jurisdiction.
(g) Notices and written communications in connection with any
arbitration under this Section 10.10 may be sent in the manner provided for the
giving of notices pursuant to this Agreement.
(h) Nothing in this Section 10.10 shall prevent any party from
applying to a court that would otherwise have jurisdiction for interim or
provisional measures, including but not limited to preliminary injunctive
relief.
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Such an application shall not be considered inconsistent with or a waiver of the
right of any party to arbitration under this section.
(i) The parties hereto hereby waive all rights to punitive damages
upon resolution of any dispute arising out of or relating to this Agreement,
except that any Indemnifying Party shall be responsible for indemnifying any
Indemnified Party for punitive damages awarded to any Third Party pursuant to
any claim for indemnification relating to any claim made by such Third Party.
10.11 Severability. If any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby. To the extent permitted by applicable law,
each party waives any provision of law that renders any provision hereof
invalid, illegal or unenforceable in any respect. In the event any provision of
this Agreement shall be held to be invalid, illegal or unenforceable the parties
shall use their reasonable best efforts to substitute a valid, legal and
enforceable provision which, insofar as practical, implements the purposes
hereof.
10.12 Remedies. All remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to
any party at law, in equity or otherwise.
10.13. No Implied Warranties. The Assigned Contracts and the
Transferred Assets are being sold by AAI to ALSTOM hereunder on an "as-is" basis
except for the representations and warranties explicitly set forth in this
Agreement, and AAI makes no representation or warranties with respect thereto,
express or implied, except for the representations and warranties explicitly set
forth in this Agreement.
10.14 No Presumption. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.
10.15 Execution. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed on the date first above written.
ALSTOM TRANSPORTATION INC. AAI CORPORATION
By /s/ Stephan Rambaud-Measson By /s/ Richard R. Erkeneff
--------------------------------- ---------------------------------
Name: Stephan Rambaud-Measson Name: Richard R. Erkeneff
Title: Senior Vice President Title: President & CEO
Rolling Stock Americas
NY Master Agreement - Execution Copy
TRANSITIONAL SERVICES AGREEMENT
THIS AGREEMENT is made as of the ______ day of __________________,
2002, by and between ALSTOM Transportation Inc. a New York corporation
("ALSTOM"), having a business mailing address of One Transit Drive, Hornell, New
York 14843, and AAI Corporation, a Maryland corporation ("AAI"), with a
principal business mailing address of 124 Industry Lane, Hunt Valley, MD 21030,
effective as of the Commencement Date hereunder, which shall be that date which
is defined as the Closing Date in the Master Agreement dated March 27, 2002,
between the parties hereto (the "Master Agreement").
W I T N E S S E T H:
WHEREAS, pursuant to the Master Agreement, AAI has, inter alia,
transferred to ALSTOM the NJT Contract (as defined in the Master Agreement) for
the overhaul of certain rail cars and the MMTA Contract (as defined in the
Master Agreement) for the overhaul of certain subway cars, as well as certain
related subcontracts and purchase orders and certain assets and liabilities
(collectively, the "Transaction");
WHEREAS, AAI has a work force with special technical and professional
expertise, skills and knowledge in the field of refurbishment of transit
vehicles; and
WHEREAS, ALSTOM has identified the need for such workers in connection
with the Transaction, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth herein, the receipt and sufficiency of which is
acknowledged by the parties hereto, ALSTOM and AAI mutually agree as follows:
1. TEMPORARY ASSIGNMENT OF AAI EMPLOYEES.
ALSTOM hereby engages AAI to provide ALSTOM with certain AAI employees to the
extent (a) ALSTOM has identified a need it cannot fill with its own employees
for certain skill and expertise and (b) AAI has the requisite employees to
perform such requirements. Employees of AAI who, as of the Closing Date, have a
primary assignment to support either or both the NJT Contract or the MMTA
Contract (collectively referred to as the "Contracts") are set forth on Exhibit
A, and such employees shall be deemed available for support of ALSTOM during the
term of this Agreement to the extent provided herein. In furtherance thereof,
the parties agree as follows:
1.1 Initial Selection of AAI Employees for Temporary Support of ALSTOM. ALSTOM's
requirements to be filled by the AAI's employees shall be identified as follows:
AAI hereby represents to ALSTOM that all employees of AAI who have a primary
assignment to either or both Contracts are listed on Exhibit A, which is made a
part hereof by this reference. Exhibit A details AAI employee information by Job
Assignment, Name, Employee Number, Job Category
TRANSITIONAL SERVICES AGREEMENT
or Title, Start Date, Expected Duration, Standard Bill Rate, and, if applicable,
Overtime Bill Rate. At Closing, ALSTOM shall indicate in writing to AAI which of
the employees listed on Exhibit A will be required for post-closing support (all
such identified employees herein referred to as "AAI Employees"), and AAI shall
make each such person available during the term of this Agreement in accordance
with Sections 1.2, 1.3, 1.5, 1.6 and 1.7. The term "AAI Employee" shall mean
those individuals initially identified in writing from Exhibit A by ALSTOM at
Closing pursuant to this Section 1.1.
1.2 Termination of AAI Employee's Assignment.
(a) Termination of Assignment by AAI Without Cause. AAI shall not
terminate the assignment to ALSTOM of any AAI Employee without cause without
first procuring the consent of ALSTOM. In the event ALSTOM does not consent to
such termination of assignment within three (3) business days of a request from
AAI for such termination, AAI shall continue to provide such AAI Employee to
ALSTOM; provided, however, to the extent that AAI does not assign any of its own
work to that individual, ALSTOM shall be responsible for all Section 3.1 and 3.2
costs associated with the retention of that individual, such costs not to exceed
those applicable to a forty-hour (40) work week.
(b) Termination of Employee by AAI for Cause. AAI shall have the right,
without obtaining consent of ALSTOM, to terminate the employment of an AAI
Employee for cause, upon contemporaneous written notification to ALSTOM.
(c) Termination of Assignment by ALSTOM for Cause. ALSTOM may require
AAI to remove any AAI Employee from providing services under this Agreement for
cause, and AAI shall remove such employee from his assignment hereunder
immediately upon AAI's receipt of written notice therefor.
(d) Termination of Assignment by ALSTOM Without Cause. ALSTOM may
request that AAI terminate the assignment of any AAI Employee without cause with
notice to AAI of one (1) work-week. Beyond this minimal notice provision, no
expression of the anticipated duration of the assignment of any AAI Employee to
ALSTOM shall be interpreted as binding.
(e) Effect of Termination of Assignment. Once the assignment of an AAI
Employee is terminated in accordance with this Section 1.2, AAI shall have no
further obligation to make that individual available to ALSTOM to provide
post-closing support.
1.3. Voluntary Separation by AAI Employee. In the event that either ALSTOM or
AAI becomes aware that an AAI Employee desires voluntary separation from
employment with AAI, such party shall immediately notify the other party and, if
ALSTOM identifies such person as a key employee, AAI shall support ALSTOM to
determine if a stay package would successfully retain such employee and if so,
ALSTOM shall be responsible for the amount of such stay package.
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TRANSITIONAL SERVICES AGREEMENT
1.4 Relationship. AAI's role in providing AAI Employees to ALSTOM is only that
of a subcontractor. Accordingly, AAI shall not be deemed a partner or agent of
ALSTOM and no AAI Employee shall be deemed to be an employee or agent of ALSTOM.
AAI Employees shall be and remain employees of AAI for all purposes and under
all applicable laws (including, without limitation, workers compensation laws).
Any and all causes of action, claims of entitlement to benefits and wages,
damages or expenses which have accrued, or may have accrued prior to the
expiration or termination date hereof, whether known or unknown, and which arise
in connection with any conclusion of fact and/or law that the relationship
between ALSTOM and an AAI Employee is or was that of employer-employee or
master-servant are hereby forever waived, released and relinquished. Nothing
contained in this Agreement or otherwise shall be interpreted or construed in a
manner inconsistent with AAI Employees being and remaining employees of AAI. AAI
acknowledges and agrees that it shall pay all taxes and other costs related to
the provision of services under this Agreement including, but not limited to,
federal, state and local income taxes, payroll taxes, FICA taxes and
unemployment taxes and insurance. AAI agrees that it will indemnify ALSTOM, and
hold it harmless from claims (including penalty and interest) by any government,
AAI, AAI Employee or any third party for the nonpayment or untimely payment of
any local, state or federal income-related tax, withholding or benefit
pertaining to AAI Employees.
1.5 ALSTOM Supervision. As of the Closing, as assignee of the Contracts, ALSTOM
shall control the performance of the Contracts and, in accordance therewith,
shall direct AAI as its subcontractor with respect to the matters stated herein.
AAI shall cause all AAI Employees to comply with all such directions of ALSTOM.
ALSTOM is responsible to ensure that the range of duties assigned to each AAI
Employee is commensurate with the AAI Employee's training and job title/pay
rate. No movement to a different job title shall occur without agreement by the
parties hereto. ALSTOM shall be responsible to develop a detailed range of
duties that ALSTOM shall communicate to the AAI Employee. If the range of duties
or task is unclear, AAI Employees shall be directed by AAI to seek clarification
from the ALSTOM supervisor.
1.6 Location of Services. ALSTOM and AAI agree that the services to be provided
by an AAI Employee shall initially be in the Licensed Areas (as defined below),
and, at a later date during the term of this Agreement to be determined by
ALSTOM, at ALSTOM's facilities in Hornell, New York ("ALSTOM Facilities").
ALSTOM shall identify to AAI the AAI Employees whose services it wishes to use
in the ALSTOM Facilities and AAI agrees that shall use commercially reasonable
efforts to provide such personnel and to not take any action which could
reasonably be construed as intended to impede the usage of such identified AAI
Employees in the ALSTOM Facilities; provided however, that AAI shall not be
obligated to take any action or incur any cost different from or in addition to
its usual personnel, payroll, and expense policies and practices as of the date
hereof.
1.7 Provision of Services. AAI agrees that, with respect to any AAI Employee who
only has a primary assignment to either or both Contracts, and not an exclusive
assignment, it shall make
3
TRANSITIONAL SERVICES AGREEMENT
such persons available to ALSTOM during the term of this Agreement no less than
the amount of time AAI had used such persons prior to the date hereof on the
Contract(s), and shall not permit non-Contract work assignments to take
precedence over Contract work assignments.
1.8 Communication to AAI Employees, Etc. AAI will provide the appropriate
information regarding the requirements of this Agreement to AAI Employees and
its agents, invitees and representatives (including those assigned to work at
ALSTOM's Facilities and AAI's facilities), and shall take appropriate action to
reasonably ensure that such persons understand AAI's obligations under this
Agreement, including the obligation to comply with local work rules. ALSTOM
shall provide in writing to AAI any worksite specific rules and practices that
would apply to an AAI Employee supporting ALSTOM at the ALSTOM Facilities. AAI
Employees shall be given the opportunity to obtain clarification regarding their
obligations under this Agreement. AAI agrees that it has informed each AAI
Employee of, and that it has obtained their consent to, random drug and alcohol
screenings for the duration of their assignment at ALSTOM Facilities, and that
post-accident screening may be required, in each case consistent with applicable
law.
1.9 Communication to ALSTOM Employees, Etc. ALSTOM will provide the appropriate
information regarding the requirements of this Agreement to its employees,
agents, invitees, and representatives assigned to work at AAI's facilities, and
shall take appropriate action to reasonably ensure that such persons understand
their obligations under this Agreement, including the obligation to comply with
local work rules. AAI shall provide in writing to ALSTOM any worksite specific
rules and practices that would apply to an ALSTOM employee present in AAI's Hunt
Valley facilities. ALSTOM employees shall be given the opportunity to obtain
clarification regarding their obligations under this Agreement. ALSTOM agrees
that it has informed each ALSTOM employee of, and that it has obtained their
consent to random drug and alcohol screenings for the duration of their presence
at AAI's facilities, and that post-accident screening may be required, in each
case consistent with applicable law.
2. DATA AND PROPRIETARY RIGHTS.
2.1 Property of ALSTOM. All writings, inventions, improvements and discoveries
conceived or reduced to practice by any AAI Employee in the course of providing
services to ALSTOM and all writings, inventions, improvements and discoveries
conceived or reduced to practice by ALSTOM or any employee, officer, agent or
representative of ALSTOM arising out of or in connection with any services
provided by any AAI Employee to ALSTOM pursuant to this Agreement shall be and
remain the sole and exclusive property of ALSTOM. AAI has disclosed and will
promptly disclose all such writings, inventions, improvements and discoveries to
ALSTOM in writing, and will do all reasonable things and execute all documents
that ALSTOM believes are necessary or appropriate to vest in or assign to ALSTOM
all rights, title and interest in and to such writings, inventions, improvements
and discoveries, and to procure for ALSTOM and/or to assist ALSTOM to procure at
ALSTOM's expense, all trademarks, copyrights or patents covering such writings,
inventions, improvements and discoveries in the United States
4
TRANSITIONAL SERVICES AGREEMENT
or its commonwealths, territories or possessions, or internationally, as
directed by ALSTOM. ALSTOM shall have no obligation to file any patent
application or to enforce any patent issued on any writing, invention,
improvement or discovery which may result out of either party's performance
under this Agreement.
2.2 No Disclosure. Except as required by ALSTOM in the performance of the
services by an AAI Employee or as otherwise authorized in writing by ALSTOM, AAI
has not used, published, disseminated or disclosed and shall not use, publish,
disseminate or disclose any information of ALSTOM or any affiliate of ALSTOM
that ALSTOM reasonably determines to be confidential, proprietary or trade
secret information including, but not limited to, any and all technical and
engineering data, models, know-how, designs, drawings, inventions, improvements,
discoveries and intellectual property and any writings or other information; and
any information relating to the business or any contracts or agreements of
ALSTOM or any affiliate of ALSTOM including, but not limited to, marketing data,
business plans or forecasts, customers or prospects, pricing data and financial
information and data;, provided, however any information which is generally
known to the public shall not be subject to the restrictions herein; and
provided further, AAI may disclose any information as required by law, after
providing ALSTOM with advance notice thereof and the opportunity to dispute the
request or to protect the information requested, in which case ALSTOM agrees not
to unduly delay such process.
2.3 Delivery of Materials. AAI shall deliver to ALSTOM all writings, summaries
and excerpts (and copies thereof) resulting from, relating to, or obtained in
connection with, services performed for or on behalf of ALSTOM hereunder
promptly upon the creation of such writings, summaries and excerpts. AAI shall
not deliver any such writings, summaries and excerpts to any other person or
entity, and no such writings, summaries and excerpts shall be published (or
caused to be published) without the prior written consent of ALSTOM, except as
required by law.
3. COMPENSATION FOR AAI SERVICES.
The sums to be paid by ALSTOM comprise full and adequate compensation for the
services provided hereunder by AAI, and is the exclusive remuneration to be
received for such services unless otherwise accepted and approved in writing by
both parties. All AAI Employees shall be on the payroll of AAI throughout the
term of this Agreement, and AAI shall be responsible for the payment of all
their wages and benefits.
ALSTOM shall compensate AAI as follows:
3.1 Costs. For costs that are summarized (by program) on the Project Fiscal
Reports ("PFR's"), which have been incurred by AAI in the ordinary course of
business for the period for which payment is sought, which are the following:
the AAI Employee labor costs expended in performance of the respective programs
(categories below account numbers 9.120, and
5
TRANSITIONAL SERVICES AGREEMENT
employees who normally charge their time to an indirect account who have
recorded their actual time in performing under this Agreement) (excluding costs
of incentive payments that may have been payable to AAI Employees on or before
the Commencement Date, and excluding any such payments post-Commencement Date
unless authorized by ALSTOM in writing); and other direct costs (account numbers
9.120 until 9.149 )(including, but not limited to travel, which shall be billed
at the per diem rates established by the Federal Travel Regulations in effect at
the time of the travel); which shall include only those categories of cost that
are consistent with AAI past practices. Backup for all entries made on the PFR
submitted (including time cards submitted by AAI employees, summarizing the date
or dates work was performed and the number of hours rendered and expense
reports) shall be made available by AAI for ALSTOM's review or audit, upon
request.
3.2 Mark-up. AAI shall be compensated for any additional costs by a mark-up
applied to the costs set forth in Section 3.1, at a rate of ten percent (10 %).
3.3. Invoices/Payment Terms. AAI shall submit invoices to ALSTOM promptly
following the end of its employees' payment cycle. Payment shall be due and
payable in full, by wire transfer to an account to be designated by AAI, within
fifteen (15) days from ALSTOM's receipt of AAI's invoice.
3.4 Travel. AAI agrees to comply with ALSTOM rules and regulations regarding
travel that may be required in connection with the services being provided by
AAI Employees. Travel does not include commuting between AAI Employees' domicile
and the Leased Facility..
4. WORKERS COMPENSATION.
4.1 Workers' Compensation Insurance. AAI understands, acknowledges and agrees it
will make any required contributions or obtain workers' compensation insurance
for all AAI Employees. AAI shall maintain copies of such policies or
endorsements on file for a period of not less than five (5) years after
completion of the work for ALSTOM, which shall be provided to ALSTOM upon
request. AAI agrees to hold harmless and indemnify ALSTOM for any losses,
liabilities, damages and claims, and all reasonable costs and expenses related
thereto (including any and all reasonable attorneys' fees and reasonable costs
of investigation, litigation, settlement, judgment, interest and penalties)
("Losses") that may be payable as a result of AAI's failure to comply with this
Section 4.1 or any other federal, state or local law, rule or regulation arising
out of AAI's failure to provide for statutory workers compensation insurance for
AAI Employees. ALSTOM shall not pay any fines, penalties or other charges that
may be payable as a result of AAI's failure to comply with any such federal,
state or local law, rule or regulation. To the extent that any such amounts are
assessed against ALSTOM under any such law, AAI acknowledges and agrees that
ALSTOM has the unilateral right, in its discretion, to obtain reimbursement of
such amounts from AAI or to offset such amounts against any payments due and
payable to AAI pursuant to this Agreement.
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TRANSITIONAL SERVICES AGREEMENT
4.2 Disclaimer of ALSTOM Benefits. AAI, on behalf of itself its employees,
officers, directors, agents, representatives, affiliates, predecessors,
successors and assigns, hereby disclaims entitlement from ALSTOM to any and all
compensation (except as provided in Article 3), retirement or pension benefits,
health and/or welfare benefits, insurance or any other compensation or benefits
regardless of form, which might be deemed due and/or payable by AAI by federal,
state or local statute or otherwise in connection with the provision of services
by AAI Employees under this Agreement. AAI further understands and acknowledges
and agrees that, as a subcontractor to ALSTOM, AAI and AAI Employees are not
covered by ALSTOM's workers' compensation entitlement or insurance and AAI
Employees, officers, directors, agents, representatives, affiliates,
predecessors, successors and assigns (except as required by applicable law) will
not be entitled to claim or receive any workers' compensation benefits from
ALSTOM based on or arising out of any event that has occurred or may occur
during the term of this Agreement. AAI agrees to hold harmless and indemnify
ALSTOM for any Losses of ALSTOM relating to this Section 4.2.
5. INSURANCE OF AAI
AAI understands, acknowledges and agrees that, except as provided in Article 7
below, ALSTOM has not and will not provide any insurance coverage for AAI
Employees or for the benefit of AAI and its officers, directors, agents,
representatives, affiliates, predecessors, successors and assigns. AAI shall
maintain insurance coverage in the minimum amounts described in this Article 5
(on the basis of claims that accrued during the performance of this Agreement)
during the term of this Agreement.
5.1 Workers Compensation and Employer's Liability insurance in full compliance
with the laws of any state or country of jurisdiction in which the work is to be
performed or the state or country of hire (whichever is applicable). The
insurance policy shall be endorsed to provide that the insurers and underwriters
waive their right of subrogation against indemnified parties and shall include
an alternate employer's endorsement. The limits of liability of such insurance
shall not be less than One Million Dollars ($1,000,000) per occurrence.
5.2 Commercial General Liability (Occurrence) insurance, which shall include
coverage for premises and operations, products and completed operations,
contractual liability, broad form property damage and personal injury liability.
The insurance policy shall be endorsed to provide that the insurers and
underwriters waive their right of subrogation against indemnified parties and
adds ALSTOM as an additional insured including duty to defend. Territorial
limits of the policy shall include the areas in which the work is to be
performed. The limits of liability of such insurance shall be not less than One
Million Dollars ($1,000,000) per occurrence.
5.3 Automobile Liability insurance shall cover all owned, hired, and non-owned
automobiles used in the performance of this Agreement. The insurance policy
shall be endorsed to provide that the insurers and underwriters waive their
right of subrogation against indemnified parties and
7
TRANSITIONAL SERVICES AGREEMENT
adds ALSTOM as an additional insured. The limits of liability of such insurance
shall be not less than One Million Dollars ($1,000,000) per occurrence.
6. INDEMNIFICATION.
6.1 Indemnification by ALSTOM. ALSTOM agrees that it shall indemnify defend, and
hold harmless AAI, its officers, agents, successors and assigns from any and all
Losses (a) based upon, connected with or arising out of ALSTOM's supervision or
direction of (or failure to supervise and direct) AAI Employees' performance
under this Agreement, excluding Losses based upon, connected with or arising
from the negligence or willful misconduct of AAI Employees and (b) arising by
virtue of any breach by ALSTOM of any representation, warranty, agreement or
covenant of ALSTOM under this Agreement.
6.2 Identification by AAI. AAI agrees that it shall indemnify, defend and hold
harmless ALSTOM, its employees, officers, agents, successors and assigns from
and against all Losses (a) caused by or resulting from ALSTOM's presence at
AAI's facilities; provided that ALSTOM's employees work in compliance with AAI's
and ALSTOM's safety policies and procedures, (b) arising by virtue of any breach
by AAI of any representation, warranty, agreement or covenant of AAI under this
Agreement; (c) in respect of the employees listed on Exhibit A who are not AAI
Employees, (d) in respect of employment matters and the employment relationship
between AAI and the AAI Employees (and solely in respect of such) to the extent
attributable to an act, omission, event or condition occurring or existing prior
to the Commencement Date and (e) based upon, connected with or arising from the
negligence or willful misconduct of AAI Employees, excluding Losses based upon,
connected with or arising from the negligence or willful misconduct of ALSTOM.
6.3 Procedures for Indemnification. All claims by ALSTOM or AAI under Sections
6.2 or 6.3 of this Agreement shall be made in accordance with the provisions of
Section 8.4 of the Master Agreement, which provision is incorporated into this
Agreement by reference pursuant to Section 9.2 herein.
7. LICENSE TO USE FACILITY.
7.1 Grant of License. Subject to the terms and conditions of the lease agreement
(if any) between AAI and the facility landlord, and subject to any security or
safety policies and procedures (including visitor access procedures) established
by AAI for such facilities (each of which AAI shall provide to ALSTOM), AAI
grants ALSTOM an irrevocable (except as provided in Section 7.2), non-exclusive
license to use, for performance of the Assigned Contracts (as such term is
defined in the Master Agreement), that certain manufacturing/warehouse space
located in the particular Bays of the facility known as 300 Clubhouse Lane, as
indicated on Exhibit C-1, made a part hereof by this reference, and that certain
portion of manufacturing/warehouse space located in Building 111 of the AAI
facility located on Industry Lane, as indicated on Exhibit C-2, made a part
hereof by this reference, together with the non-exclusive use of existing
bathroom
8
TRANSITIONAL SERVICES AGREEMENT
and canteen facilities, and the use of associated utilities and fixtures in
place as of the Commencement Date (the "Licensed Areas"). AAI shall designate
the entry and exit doorways for ALSTOM. The Licensed Areas shall include
non-assigned, non-exclusive parking in the main parking areas for each facility,
as indicated on Exhibits C-1 and C-2. 7.2 No Lease; Termination of License. The
parties hereto acknowledge that this License is in lieu of, and shall not be
construed as a Lease for the described Licensed Areas. No rights are intended
for either party under landlord/tenant laws or regulations. This License shall
terminate upon the earliest to occur of the following: (a) the expiration of
this Agreement in accordance with Section 9.1, (b) the mutual agreement of the
parties (currently anticipated to be the point in time that ALSTOM shall no
longer have need of the Licensed Areas), it being understood that the provisions
herein relating to the AAI Employees may continue to be in force in such case,
(c) the expiration of the fifth business day following receipt by ALSTOM of
written notice from AAI of its breach of this Agreement if ALSTOM shall not have
commenced action to cure such breach during such five-business day period and
(d) the expiration of the tenth (10th) business day following receipt by ALSTOM
of written notice from AAI of its breach of this Agreement if ALSTOM shall have
commenced action to cure such breach and such cure not be fully implemented and
successful in remedying the matter within ten (10) business days of such notice
from AAI. Upon termination of the License, all of ALSTOM's rights in and to said
Licensed Areas shall cease and terminate.
7.3 Indemnification for Licensed Areas. Each party agrees to indemnify, defend,
and hold harmless the other party, its respective employees, officers, agents,
successors and assigns, from and against any and all Losses caused or resulting
from the use of said Licensed Areas during the term of this Agreement by such
first party, its employees, officers, agents, invitees, successors and assigns,
save and except to the extent that such Losses are solely attributable to the
acts, omissions, negligence or willful misconduct of the indemnified party.
ALSTOM and AAI respectively, while the other party's employees are at the first
party's site, shall provide for (a) reasonable private office space, including
desks, telephones, and access to copiers and telephone lines, at the expense of
the party providing the services, and (b) other special requirements at the
expense of the party receiving such services. Such use shall be only for
reasonable business use only during the times for which work is taking place.
This License shall not be recorded among any public records.
7.4 No Interference; Compliance with Laws. During the term of the Licence, AAI
shall not cause any unreasonable interference with or material adverse effect
upon ALSTOM's use of the Licensed Areas for the purposes permitted hereunder.
AAI represents that, as of the date hereof, the Licensed Areas comply in all
material respects with all applicable laws and covenants that it shall, at its
cost and expense, carry out any work necessary to ensure that the Licensed Areas
comply in all material respects with applicable laws during the term of the
License (including, without limitation, applicable building codes) and correct
any material deficiencies in the Licensed Areas or any part thereof not caused
or contributed to by the acts or omissions of ALSTOM. AAI represents that it has
valid, binding and enforceable rights to, and is in compliance with, all Permits
(as such term in defined in the Master Agreement). No event has
9
TRANSITIONAL SERVICES AGREEMENT
occurred and is continuing which permits, or after notice or lapse of time or
both would permit, any modification or termination of any such Permits, which
modifications or terminations would have in the aggregate a Material Adverse
Effect (as such term is defined in the Master Agreement).
8. INSURANCE OF ALSTOM.
ALSTOM understands, acknowledges and agrees that, except as provided in Article
5 above, AAI has not and will not provide any insurance coverage for ALSTOM's
employees or for the benefit of ALSTOM and its officers, directors, agents,
representatives, affiliates, predecessors, successors and assigns. ALSTOM
further understands, acknowledges and agrees that ALSTOM and ALSTOM's employees
are not covered by AAI's workers' compensation entitlement or insurance and
ALSTOM employees, officers, directors, agents, representatives, affiliates,
predecessors, successors and assigns will not be entitled to claim or receive
any workers' compensation benefits from AAI based on or arising out of any event
that has occurred or may occur during the term of this Agreement. ALSTOM shall
maintain insurance coverage in the minimum amounts described below (on the basis
of claims that accrued during the performance of this Agreement) during the term
of this Agreement. Certificates of insurance for the coverage indicated below
shall be provided to AAI prior to use of the Licensed Areas by ALSTOM, showing
the minimum insurance as required below and providing that the insurer provide
AAI at least thirty (30) days' written notice prior to any material policy
coverage change or cancellation.
8.1 ALSTOM's Workers Compensation Insurance. ALSTOM shall maintain Workers
Compensation and Employer's Liability insurance in full compliance with the laws
of any state or country of jurisdiction in which the work is to be performed or
the state or country of hire (whichever is applicable). The insurance policy
shall be endorsed to provide that the insurers and underwriters waive their
right of subrogation against indemnified parties and shall include an alternate
employer's endorsement. The limits of liability of such insurance shall not be
less than One Million Dollars ($1,000,000) per occurrence.
8.2 Commercial General Liability Insurance. ALSTOM shall maintain Commercial
General Liability (Occurrence) insurance, which shall include coverage for
premises and operations, products and completed operations, contractual
liability, broad form property damage and personal injury liability. The
insurance policy shall be endorsed to provide that the insurers and underwriters
waive their right of subrogation against indemnified parties and add AAI as an
additional insured including duty to defend. Territorial limits of the policy
shall include the areas in which the work is to be performed. The limits of
liability of such insurance shall be not less than One Million Dollars
($1,000,000) per occurrence.
8.3 Automobile Liability Insurance. ALSTOM shall maintain Automobile Liability
insurance to cover all owned, hired, and non-owned automobiles used in the
performance of this Agreement. The insurance policy shall be endorsed to provide
that the insurers and underwriters waive their right of subrogation against
indemnified parties and adds AAI as an additional
10
TRANSITIONAL SERVICES AGREEMENT
insured. The limits of liability of such insurance shall be not less than One
Million Dollars ($1,000,000) per occurrence.
9. SAFETY PRECAUTIONS AND COMPLIANCE WITH PROCEDURES.
9.1 ALSTOM's Safety Policies. AAI Employees shall act at all times in accordance
with ALSTOM's safety policies and procedures, and all laws, regulations, or
rules pertaining to it and them, whether they shall provide services at the
Licenced Areas or the ALSTOM Facilities. Certain work may require the use of
personal protective equipment such as vision and hearing protection. If any AAI
Employee is working in an area where the use of personal protective equipment is
required by ALSTOM, AAI Employees will be required to comply with such
provision. ALSTOM shall have the right, with written notice to AAI, to require
any AAI Employee who fails to comply with all provisions contained herein to
withdraw from the Licensed Areas or from the ALSTOM Facility.
9.2 AAI's Safety Policies. AAI shall provide ALSTOM AAI's safety and security
policies for the Licensed Areas, including any security restrictions imposed in
compliance with Department of Defense requirements. ALSTOM and ALSTOM's
employees shall act in accordance with ALSTOM's safety program for the Licensed
Areas, as well as any additional requirements that may be imposed by AAI's
safety and security policies, and shall be compliant with all laws, regulations
and rules pertaining to it and them while at the Licensed Areas, in order to
protect the interests of AAI (including, without limitation, security
restrictions imposed in compliance with Department of Defense requirements.) AAI
shall have the right, with written notice to ALSTOM, to require any ALSTOM
employee, officer, agent, director or representative who fails to comply with
all provisions contained herein to withdraw from the Licensed Areas.
9.3 Hazardous Substances. For any chemical substances, requested to be delivered
by ALSTOM to Licensed Areas, listed on the NIOCH Registry, and other chemicals
or substances which have yielded evidence of acute or chronic health hazards in
humans, animals, or biological testing, that will be introduced to the Licensed
Areas during the term of this Agreement, ALSTOM shall provide to the AAI Safety
Officer with a properly completed Material Safety Data Sheet (Form OSHA-20), at
least three (3) business days prior to such delivery of chemicals, substances or
goods in which the chemicals or substances are incorporated.
9.4 Necessary Precautions; Indemnification. ALSTOM and AAI shall take all
necessary precautions to prevent the occurrence of any injury to persons or
property during the term of this Agreement, and shall indemnify each other
against all Losses which may result, in any way from any act or omission of
ALSTOM or AAI, its respective agents, employees, or subcontractors except to the
extent that such injury or damage to property is due solely and directly to
negligence of the indemnified party's employees.
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TRANSITIONAL SERVICES AGREEMENT
10. GENERAL.
10.1 Agreement Term, Survival. The term of this Agreement shall be for a period
of six (6) months, commencing on the date of this Agreement. Thereafter, this
Agreement may be extended in writing by written agreement of the parties hereto.
Notwithstanding anything to the contrary herein, (a) ALSTOM shall have the right
to terminate this Agreement upon thirty (30) days' prior written notice to AAI
and (b) AAI shall have the right to terminate this Agreement on the third (3rd)
business day following notice to ALSTOM that ALSTOM has breached the provisions
of Article 3. Notwithstanding the foregoing, the provisions and obligations of
Articles/Paragraphs 1.4, 4, 6, 7.3, 9.4, and 10.2 of this Agreement shall
survive and continue after its expiration or termination and the provisions and
obligations of Article 2 shall survive and continue after the expiration or
termination of this Agreement for a period of two years following such
expiration or termination.
10.2 Incorporated Provisions. The provisions of the Master Agreement contained
in sections 10.3 (Binding Effect; Assignment), 10.5 (No Third Party
Beneficiaries), 10.6 (Entire Agreement; Waiver or Modification), 10.8 (Notices),
10.9 (Governing Law), 10.10 (Dispute Resolution), 10.11 (Severability) and 10.15
(Execution) shall apply to this Agreement with such changes as the circumstances
require and such provisions are hereby incorporated by reference into this
Agreement.
10.3 Non-Exclusivity. Nothing in this Agreement shall be construed as creating a
requirements contract or exclusive contract between ALSTOM and AAI. ALSTOM may
use entities or agencies other than AAI to retain subcontract workers. ALSTOM
may also directly hire its own employees to fulfill its requirements in lieu of
using AAI Employees. In no event shall ALSTOM be liable to AAI for loss of
anticipatory profits or consequential damages as a result of not using AAI
Employees.
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TRANSITIONAL SERVICES AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by each of their duly authorized officers as of the respective dates indicated
below:
ALSTOM Transportation Inc. AAI Corporation
By_______________________________ By_________________________________
Printed Name: __________________ Printed Name: ____________________
Title: _________________________ Title: ___________________________
13
TRANSITIONAL SERVICES AGREEMENT
EXHIBIT A
Dated __________, 2002
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NAME EMPLOYEE JOB TITLE/ START DATE EXPECTED ST BILL OT BILL
NUMBER ASSIGNMENT DURATION RATE RATE
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1. $ $
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2. $ $
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3. $ $
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4. $ $
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5. $ $
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6. $ $
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7. $ $
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8. $ $
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9. $ $
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10. $ $
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11. $ $
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12. $ $
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13. $ $
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14. $ $
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15. $ $
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16. $ $
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17. $ $
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18. $ $
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19. $ $
- ------------------------------------------------------------------------------------------------------------
20. $ $
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21. $ $
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22. $ $
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23. $ $
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24. $ $
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25. $ $
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26. $ $
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27. $ $
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28. $ $
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29. $ $
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30. $ $
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31. $ $
- ------------------------------------------------------------------------------------------------------------
For non-exempt employees, the agreed-upon rate shall be one and one-half times
the hourly rate for any overtime period. Overtime is defined as any time
exceeding forty (40) hours worked within seven (7) consecutive days. Holiday pay
will not be paid unless ALSTOM requires AAI Employee to work on a holiday that
is recognized by AAI. In such event, the rate of pay will be one and a half
times the AAI Employee's regular hourly pay for the hours actually worked.
Exempt AAI Employees, such as Plant Management, Field and Manufacturing
Engineering staff, as well as other AAI Employees with positions classified as
14
exempt from overtime pay, will be billed to ALSTOM on the basis of the hours
spent actually spent performing tasks as directed by ALSTOM, subject to a
maximum hours per day of eight and per week of forty (40).
ACCEPTED:
----------------------- ------------------- ------------
ALSTOM Corporation Title: Date:
----------------------- ------------------- ------------
AAI Corporation Title: Date:
15