Contract
Exhibit 10.32
*** Indicates materials have been omitted pursuant to a Confidential Treatment Request filed with
the Securities and Exchange Commission. A complete copy of this Agreement has been filed with the
Securities and Exchange Commission.
March 4, 2005
Xx. Xxxx X. Xxxxx, CPM
Staff Sourcing Specialist
Texas Xxxxx, XX
00000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Staff Sourcing Specialist
Texas Xxxxx, XX
00000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Subject:
|
*** Aluminum BethGon® II Railcars for Texas Xxxxx, XX. | |
| FreightCar America Inc. Proposal No. 04153 Revision A |
Dear Xx. Xxxxx:
In response to your inquiry, FreightCar America, Inc. (“FreightCar”) would be pleased to sell ***
new Aluminum BethGon® II Railcars (the “Railcars”) to Texas Xxxxx, XX (“Purchaser”), per the
details listed below:
| Quantity | Car Type | Specification / Date | Price Per Railcar | |||
***
|
Aluminum BethGon® II Railcars |
X-04153 / February 14, 2005 | $*** | |||
***
|
Aluminum BethGon® II Railcars |
X-04153 / February 14, 2005 | $*** | |||
***
|
Aluminum BethGon® II Railcars |
X-04153 / February 14, 2005 | $*** | |||
***
|
Aluminum BethGon® II Railcars |
X-04153 / February 14, 2005 | $*** |
The above price is FOB FreightCar’s Plant. Switching and transportation charges are not included
in the price, but can be prepaid by FreightCar and added to your invoice at your request.
The requirements of the Association of American Railroads (AAR) and the United States Department of
Transportation (DOT) are incorporated in the Specification for the Railcars. Should these
requirements be changed, or should any other regulatory requirements be imposed prior to delivery
of the Railcars, the above price will be adjusted upward or downward accordingly.
FRA 49 CFR 224 Reflectorization of Rail Freight Rolling Stock is scheduled to go into effect for
all Railcars delivered after May 31, 2005. As of the date of this letter, the Railcar design
offered herein complies with 49 CFR 224 as currently defined by the FRA. Any additional costs
associated with the ongoing interpretation of 49 CFR 224 are for the account of the Purchaser.
The above proposal price is based upon our ability to obtain certain aluminum, steel, specialties
and other components used in the construction of the Railcars at the costs included in our
estimate. In the unforeseen instance that a supplier is unable to provide the specified material,
specialties and
other components at the costs included in our estimate, and substitute material, specialties and
other
Xx. Xxxx X. Xxxxx, CPM
March 4, 2005
Page 2
March 4, 2005
Page 2
components are supplied the Price per Railcar will be adjusted accordingly. The material, and
casting and steel surcharge costs shown on Exhibit A are included in the Price per Railcar and
reflect our current estimate of the cost of these items. The Price per Railcar will be adjusted
upward or downward to reflect the actual cost of the items shown on Exhibit A used to manufacture
the Railcars. Texas Xxxxx, XX will be provided the documentation necessary to verify the actual
cost of these items.
DELIVERY: Subject to receipt of prior orders FreightCar can begin delivery of the first ***
Aluminum
BethGon®
II Railcars during the first week of *** 2006. Subject to receipt of prior
orders FreightCar can begin delivery of the remaining *** Aluminum BethGon® II Railcars during the
last week of *** 2006. The cars are scheduled to be produced at *** .
This schedule is subject to the availability of castings and other components. Given the tightness
in the availability of castings and other components, there is reason to be concerned that
suppliers may not be able to maintain delivery schedules.
TERMS: Net due upon receipt of invoice.
This proposal is valid for 70 calendar days and is subject to all respects to the attached Terms
and Conditions of Sale.
Please confirm your acceptance of this proposal by having an authorized officer of Texas Xxxxx, XX
execute this letter agreement and the attached Terms and Conditions of Sale and returning a copy to
my attention within 70 calendar days from the date of this letter.
FreightCar America, Inc. very much appreciates the opportunity to build these Railcars for Texas
Xxxxx, XX. Should you have any questions concerning this transaction, please contact me at
000-000-0000.
Very truly yours,
JOHNSTOWN AMERICA CORPORATION
/s/ Xxx
Xxxxxxx
By: Xxx Xxxxxxx
Its: Vice President Sales — Western Region
Its: Vice President Sales — Western Region
ACCEPTANCE BY PURCHASER:
Texas Xxxxx, XX hereby acknowledges its acceptance of the offer to acquire the Railcars described
above, at the price and upon the terms and conditions set forth herein and in the attached Terms
and Conditions of Sale.
Texas Xxxxx, XX
By: |
||||
Its: |
||||
Date: |
||||
Quantity of Railcars:
Attachments:
|
EXHIBIT A | |
| Texas Xxxxx, XX RFQ | ||
| Specification X-04153 | ||
| Terms and Conditions | ||
| Specialty Component List | ||
| Xxxxx Xxxx | ||
| EJW, WCH, plm, file |
EXHIBIT A
BethGon® II
BethGon® II
Material Cost Subject to Adjustment Included in Per Car Price
| Item | Weight/lbs. | $/lbs. | Cost | |||||||
| COST OF RAW MATERIALS | ||||||||||
| Steel | *** |
$ | *** | $ | *** | |||||
| Aluminum | *** |
$ | *** | $ | *** | |||||
| Estimated Cost of Raw Materials at Time of Delivery | $ | *** | ||||||||
| MAJOR SPECIALTIES | ||||||||||
| Castings | $ | *** | ||||||||
| Forgings | $ | *** | ||||||||
| Airbrake (Includes Hoses) | $ | *** | ||||||||
| Miscellaneous Specialties | $ | *** | ||||||||
| Polymers | $ | *** | ||||||||
| Coatings | $ | *** | ||||||||
| Fasteners | $ | *** | ||||||||
| *Wheel Sets | $ | *** | ||||||||
| Estimated Cost of Major Specialties on Date of Proposal | $ | *** | ||||||||
| SURCHARGES ON RAW MATERIALS | ||||||||||
| Steel | $ | *** | ||||||||
| Aluminum | $ | *** | ||||||||
| Estimated Surcharges on Raw Material at Time of Delivery | $ | |||||||||
| SURCHARGES ON MAJOR SPECIALTIES | ||||||||||
| Castings | $ | *** | ||||||||
| Wheels | $ | *** | ||||||||
| Axles | $ | *** | ||||||||
| Roller Bearings | $ | *** | ||||||||
| Springs | $ | *** | ||||||||
| Brake System | $ | *** | ||||||||
| Forgings | $ | *** | ||||||||
| Brake Beams | $ | *** | ||||||||
| Fasteners | $ | *** | ||||||||
| Miscellaneous | ||||||||||
| Estimated Surcharges on Major Specialties at Time of Delivery | $ | *** | ||||||||
| Estimated Component and Surcharge Cost Included in Per Car Price | $ | *** | ||||||||
| * | Wheel Set Complete Includes Wheels, Axle, Bearings & Mounting |
***
FREIGHTCAR AMERICA, INC.
TERMS AND CONDITIONS OF SALE
FOR PROPOSAL NO.: 04153 Revision A
FOR PROPOSAL NO.: 04153 Revision A
These Terms and Conditions of Sale are incorporated into and made a part of the Proposal Letter
dated March 4, 2005 (the “Proposal Letter”) from FreightCar America, Inc. (“FreightCar”) to Texas
Genco II, LP (“Purchaser”). These Terms and Conditions of Sale, the Proposal Letter and the
Specifications and Specialty Component List (such Specifications and Specialty Component List being
collectively referred to as the “Specifications”) described therein are hereinafter referred to as
this “Agreement.”
Inspection and Acceptance: FreightCar shall give Purchaser, and/or its designated agent, reasonable
opportunity to inspect FreightCar’s manufacturing procedures prior to commencement of the start of
production of the first Railcar and during production and the Railcars during the construction
process at FreightCar’s manufacturing facility in Danville, Illinois ( “FreightCar’s Plant”) during
normal operating hours or at such other time as may be mutually agreed. Purchaser shall have its
representative present for inspection of the Railcars at FreightCar’s Plant prior to the start of
production of the first Railcar. Upon completion of each Railcar, Purchaser shall use its best
efforts to arrange to conduct a final inspection of such Railcar prior to the time such Railcar is
removed from the Final QA Acceptance Building at FreightCar’s Plant. Such inspection will comply
with the safety and inspection procedures specified by FreightCar and will be conducted so as not
to interfere unreasonably with FreightCar’s operations, and acceptance of the Railcars by Purchaser
will be made before removal of such Railcars from the Final QA Acceptance Building at FreightCar’s
Plant. All storage, transportation and other costs incurred by FreightCar as a result of any delay
by Purchaser in inspecting or accepting the Railcars shall be for Purchaser’s account. Purchaser,
or its designated agent, shall execute a certificate of inspection and acceptance (“Certificate of
Acceptance”) in the form of Exhibit A hereto covering all Railcars found to be completed in
accordance with the Specifications and shall deliver the executed Certificate(s) of Acceptance to
FreightCar. If, upon inspection of the Railcars by Purchaser, the Railcars appear not to conform
to the Specifications, Purchaser will immediately notify FreightCar in writing of the condition and
give FreightCar a reasonable opportunity to correct the condition. Such correction shall not
relieve FreightCar of its obligation to adhere to the production schedule agreed upon by the
parties. Each designated agent and representative selected by Purchaser to inspect the Railcars
must be reasonably acceptable to FreightCar. Prior to the inspection described herein, Purchaser
shall notify FreightCar of the name and company of the designated agent and representative selected
by Purchaser, and if such person(s) are not reasonably acceptable to FreightCar, FreightCar shall
promptly notify Purchaser. FreightCar shall pre-register the Railcars in UMLER and shall, at the
reasonable request of Purchaser (and at no cost to FreightCar), make any other required initial
filings and registrations of the Railcars.
Price: The purchase price to be paid by Purchaser to FreightCar for each Railcar purchased by
Purchaser pursuant to this Agreement is set forth in the Proposal Letter and is based upon
FreightCar’s ability to obtain certain aluminum, steel, specialties and other components used in
the construction of the Railcars. In the unforeseen instance that a supplier is unable to provide
the specified material, specialties and other components and substitute material, specialties and
other components are supplied the price per Railcar will be adjusted accordingly. The material and
casting and steel surcharge costs shown on Exhibit A to the Proposal Letter are included in the
price per Railcar and reflect FreightCar’s current estimate of these items. The price per Railcar
will be adjusted upward or downward to reflect the actual cost of the items shown on Exhibit A to
the Proposal Letter used to manufacture the Railcar. Upon Purchaser’s request from time to time,
FreightCar shall provide to Purchaser any updated price information relating to the Railcars. If
the purchase price of the Railcars exceeds by more than ***% the purchase price for such Railcars
contained in the Proposal Letter, Purchaser shall, upon
notice to FreightCar, within ten (10) days
of being notified of such purchase price increase, have the right to
cancel this Agreement with respect to the Railcars subject to such price adjustment, without cost
or penalty to Purchaser or FreightCar.
If the final purchase price (after application of the aforementioned adjustment) is different than
the price set forth in the Proposal Letter, upon Purchaser’s request, the final purchase price is
subject to confirmation by an independent auditor acceptable to both parties (“Auditor”). Such
confirmation will take place at a mutually acceptable time. The parties agree that information
used to determine the final purchase price (“Information”) is the confidential and proprietary
property of FreightCar and such Information shall be made available only to the Auditor, subject to
the Auditor’s execution of a confidentiality agreement acceptable to FreightCar, solely for the
purpose of confirming such final purchase price. The Auditor shall not disclose any Information to
Purchaser, but shall confirm its agreement with FreightCar’s calculation of the final purchase
price, or in the event it disagrees with such calculation, shall provide to both parties a revised
final purchase price with such revised final purchase price being binding on both parties. The
cost of the Auditor shall be borne by Purchaser unless the final
purchase price is more than
*** lower than the adjusted purchase price originally submitted by
FreightCar, in which case the cost of the Auditor will be borne by FreightCar.
Payment: Following delivery by Purchaser to FreightCar of a Certificate of Acceptance for a
Railcar, title to such Railcar shall pass to Purchaser, and FreightCar shall deliver to Purchaser a
bill of sale for such Railcar which shall retain for FreightCar a security interest in such Railcar
as further described in the following sentence. FreightCar shall retain, and Purchaser does hereby
grant to FreightCar, as security for payment of such accepted Railcars and fulfillment of its
obligations to FreightCar hereunder, a purchase money security interest in such Railcars and the
rentals, earnings, products, proceeds and accessions of and to any of such Railcars, together with
all right, title and interest of Purchaser therein and all rights and remedies which Purchaser
might exercise with respect thereto but for the execution of this Agreement. Purchaser
acknowledges that this Agreement shall constitute a security agreement between the parties and that
FreightCar shall be vested with all of the rights and remedies available to a secured party under
the Uniform Commercial Code in effect in the State in which FreightCar’s Plant is located upon a
default by Purchaser hereunder, including, without limitation, the right to foreclose upon and take
possession of the Railcars pursuant to public or private sale. Prior to delivery of any of such
Railcars to Purchaser, Purchaser will execute and return to FreightCar a Memorandum of Railcar
Security Agreement (“Memorandum”) covering the Railcars in form satisfactory to FreightCar and
suitable for filing with the Surface Transportation Board (“STB”). Following receipt by FreightCar
of payment for a Railcar, FreightCar will file with the STB a termination of the Memorandum with
respect to such Railcar and deliver such other evidence of clear title as Purchaser shall
reasonably request. Not less than five (5) days prior to the completion of the final Railcar in a
trainset, FreightCar shall invoice Purchaser for the Railcars in such trainset and Purchaser shall
pay the purchase price for the Railcars in such trainset, as hereinafter provided, upon acceptance,
by Purchaser at FreightCar’s Plant, of the final Railcar in such trainset. Purchaser shall make
such payment of the purchase price for such Railcars in the form of a wire transfer of immediately
available U.S. funds, in accordance with the instructions from FreightCar, provided that Purchaser
shall make such wire transfer no later than (i) the business day following the day on which
Purchaser receives, before 2:00 p.m. Central Time, the Certificate of Acceptance for the final
Railcar in such trainset (the “Final Certificate”) or (ii) the second business day following the
day on which Purchaser receives, after 2:00 p.m. Central Time, the Final Certificate; provided
further that FreightCar shall have no obligation to deliver such Railcars to the Connection Point
(as hereinafter defined) until FreightCar has confirmed receipt of such wire payment. If all or
any portion of the purchase price for the Railcars is not paid to FreightCar when due, such
nonpayment shall result in the additional obligation on the part of Purchaser to pay interest to
FreightCar
on the unpaid amount, on demand, at the applicable Prime Rate, as reported by The Wall Street
Journal. If Purchaser shall not make payment as aforesaid, Xxxxxxxxx agrees to execute such
instruments and to take such other action as shall be reasonably requested by FreightCar to vest in
FreightCar or its designee good and
marketable title to such Railcars, free and clear of all liens,
claims and encumbrances arising by, through or under Purchaser, and, at FreightCar’s option,
possession and control of the Railcars, whereupon FreightCar may, at its election, terminate this
Agreement and sell, lease, retain or otherwise dispose of such Railcars.
Credit Approval: If, subsequent to the date hereof, a material adverse change in Purchaser’s
creditworthiness, financial condition or prospects occurs, as reasonably determined by FreightCar,
FreightCar may cease the ordering or accepting of materials to build the Railcars and cease the
manufacture of the Railcars until FreightCar has received from Purchaser a monetary deposit of up
to ***, as requested by FreightCar, or other assurances of payment satisfactory to FreightCar.
Delivery: Following Purchaser’s delivery of a Certificate of Acceptance, at the request of
Purchaser, FreightCar shall arrange to deliver such accepted Railcars from FreightCar’s Plant to
the railroad connection contiguous to FreightCar’s Plant (the “Connection Point”). The purchase
price set forth in this Agreement is FOB FreightCar’s Plant. All movement of the Railcars,
following their initial delivery by FreightCar to the Connection Point, shall be at the cost and
risk of Purchaser. Delayed delivery of the Railcars due to an event of Force Majeure (as defined
below) shall be without penalty or cost to FreightCar. Notwithstanding any other provision to the
contrary, FreightCar acknowledges that Purchaser is purchasing the Railcars to replace certain
railcars that Purchaser currently leases, and that said lease, and Purchaser’s right to use the
railcars pursuant thereto expires in conjunction with Purchaser’s purchase of the Railcars from
FreightCar. Should FreightCar fail to deliver any Railcar by the thirtieth (30) day after the date
shown on Exhibit B, and such failure is not excused by an event of Force Majeure,
FreightCar shall, at its option, (i) pay any reasonable costs associated with Purchaser securing
temporary replacement railcars or (ii) supply Purchaser with replacement railcars at FreightCar’s
sole expense.
Specifications and Changes: The Railcars shall be constructed in accordance with the
Specifications. The Specifications shall comply with the applicable published requirements of the
Federal Railroad Administration (“FRA”) and the Association of American Railroads (“AAR”) in effect
on the date of manufacture of the Railcars. If it shall become impossible or impracticable for
FreightCar to secure the materials required for the manufacture of the Railcars in exact accordance
with the Specifications, including without limitation by reason of any subsequent interpretation of
or changes to such FRA or AAR requirements, FreightCar may, upon notice to Purchaser, make changes
in the Specifications not materially affecting the strength, size, capacity or efficiency of the
Railcars for railroad use and interchange, provided that FreightCar shall not substitute any of the
materials identified in FreightCar’s Specialty Component List without Purchaser’s consent. If such
change will result in an increase in the cost to FreightCar over the anticipated cost to produce
the Railcar without giving effect to such change, the purchase price for the Railcars shall be
adjusted to reflect such increased cost, provided that FreightCar shall obtain the prior written
consent of Purchaser to such adjustment. If Purchaser fails to consent to such adjustment,
FreightCar shall have the right to cancel this Agreement without penalty to either party. Any
other changes in the Specifications desired by either party must be requested in writing and
specify the amount of any adjustment in the purchase price (as determined by FreightCar), and must
be approved in writing by the other party. Each party agrees that it will not unreasonably
withhold its consent to
any requested change by the other. FreightCar is under no obligation to arrange for shipment and
acceptance of any required materials in advance of FreightCar’s needs.
Permissible Tolerances: Except in the particulars specified by Purchaser and expressly agreed to
in writing by FreightCar, all Railcars will be manufactured in accordance with FreightCar’s
standard practices and will be subject to tolerances and variations consistent with usages of the
trade and regular practices including deviations from tolerances and variations consistent with
practical testing and inspection methods.
Force Majeure: An event of “Force Majeure” shall include extraordinary and unforeseeable
occurrences such as strikes, lockouts or other labor disturbances, shortages or late delivery of
material (due to no fault of FreightCar); unavailability, interruptions or inadequacy of fuel
supplies; acts of God; war, preparation for war or other acts or interventions of naval or military
personnel or other agencies of government; governmental rules or regulations (or interpretation of
or changes to the existing rules or regulations); priorities given to defense orders; riot,
embargoes, sabotage, act of terrorism, vandalism, malicious mischief, landslides, floods,
hurricanes, earthquakes, collisions, fires or other calamities; delays of carriers (due to no fault
of FreightCar); shortages of labor, non-delivery and/or late delivery of any Purchaser-furnished
supplies, material, equipment or labor, including plans, drawings or engineering; delays due to
changes by Purchaser in drawings or specifications or any circumstance or cause beyond the
reasonable control of FreightCar in the conduct of its business. Notwithstanding the foregoing,
FreightCar shall, during any period of Force Majeure, exercise such diligence as the circumstances
reasonably require.
Risk of Loss: FreightCar shall bear all risks of physical loss of the Railcars at FreightCar’s
Plant and until receipt by FreightCar of the Certificate of Acceptance from Purchaser for such
Railcars (such date of receipt being hereinafter referred to as the “Transfer Date”) and delivery
of Railcars to the Connection Point. From and after the Transfer Date for a Railcar, and after
delivery of a Railcar to the Connection Point, Purchaser shall bear all risk of loss of such
Railcar. Notwithstanding the foregoing, FreightCar shall not be responsible for any loss or
damages to property (including the Railcars) or injury to or death of any person arising out of or
in connection with any Railcar (including, without limitation, any inspection of such Railcar)
prior to the Transfer Date when such loss, damage or death is caused by the actions of Purchaser’s
or any of Purchaser’s affiliated corporation’s officers, managers, directors, employees,
inspectors, representatives or agents. If, for any reason, FreightCar does not receive a
Certificate of Acceptance for a Railcar, then the Transfer Date for such Railcar shall mean the
date on which such Railcar is first delivered by FreightCar to the Connection Point.
Warranty:
(a) FreightCar warrants that all goods and services sold hereunder or pursuant hereto will be
free of any claims of any nature by any third person (other than claims, liens, security interests
and encumbrances arising by, through or under Purchaser) and that, upon delivery of the Bill of
Sale with respect to a Railcar, FreightCar will convey to Purchaser good and marketable title to
such Railcar, free and clear of all claims, liens, security interests, encumbrances and rights of
others of any nature whatsoever (other than claims, liens, security interests and encumbrances
arising by, through or under Purchaser).
(b) FreightCar warrants that each Railcar will be free from defects in material and
workmanship under normal use and service for a period of *** from the Transfer Date of
such Railcar by Purchaser. With respect to parts and materials manufactured by others and
incorporated by FreightCar in the Railcars, such parts
and material shall be covered only by the warranty, if any, of the manufacturer thereof, and
FreightCar shall assign to Purchaser any such warranty, to the extent assignable by FreightCar, and
FreightCar will cooperate with Purchaser to assist in enforcing any such warranty not so assigned
at its own expense. FreightCar shall not provide any other relief or warranty with respect to such
parts and materials. FreightCar’s obligations with respect to any Railcar for breach of this
warranty, whether or not due to FreightCar’s negligent acts or omissions, is limited to either
replacement or repair, which option shall be mutually agreed upon by the parties and which
Purchaser shall not unreasonably withhold agreement, of such non-conforming or defective component
(or Railcar) on Purchaser’s normal route of railcar movement, but at all time subject to
FreightCar’s prior approval of the respective repair shop or facility. FreightCar’s agreement set
forth above to repair or replace defective parts and materials (other than with respect to parts
and materials manufactured by others and incorporated by FreightCar in the Railcars, the remedy for
which is provided for above in this Warranty section) shall be Purchaser’s sole and exclusive
remedy with respect to the Railcars that are defective in any respect or
that fail to conform to the Specifications or to any express or implied warranty, and
FreightCar will not in any event be liable for the cost of any transportation charges expended on
or in connection with the repair, replacement or return of any component (or Railcar) or for any
special, indirect, incidental or consequential damages. FreightCar’s warranty set forth in this
Warranty section shall be void and of no force and effect if repairs made to the Railcar are not
made in conformity with FreightCar’s Specifications or, if in the process of making repairs to the
Railcar, parts originally manufactured by FreightCar (including, without limitation, all car body
components, such as side stakes, top chords, side xxxxx, end posts, tubs, gate systems, etc.) are
removed and not replaced with like parts manufactured by FreightCar. FreightCar shall provide to
Purchaser copies of the warranties received by FreightCar on parts and materials purchased by
FreightCar from the manufacturers and suppliers listed on Exhibit C hereto and any
manufacturers or suppliers substituted therefore after the date of this Agreement.
THIS WARRANTY IS EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. PURCHASER ACKNOWLEDGES THAT ITS
SOLE REMEDY FOR BREACH OF THIS WARRANTY BY FREIGHTCAR IS AS PROVIDED ABOVE AND FREIGHTCAR SHALL NOT
BE LIABLE IN TORT, FOR NEGLIGENCE OR STRICT LIABILITY OR FOR LOSS OR INTERRUPTION OF USE, PROFIT OR
BUSINESS OR ANY OTHER INCIDENTAL OR CONSEQUENTIAL INJURY OR DAMAGE, ALL OF WHICH ARE EXPRESSLY
WAIVED AND RELEASED BY PURCHASER.
FREIGHTCAR’S OBLIGATIONS UNDER THIS WARRANTY ARE CONDITIONED UPON COMPLIANCE BY PURCHASER AND ALL
OTHER USERS OF THE RAILCARS WITH OPERATION, LOADING, USE, HANDLING, MAINTENANCE AND STORAGE IN
ACCORDANCE WITH GOOD COMMERCIAL PRACTICES OF THE RAILROAD INDUSTRY. FREIGHTCAR SHALL NOT BE
RESPONSIBLE FOR FAILURES CAUSED BY MISLOADING, OVERLOADING, OVERHEATING, IMPROPER CLEANING,
PHYSICAL ABUSE, ACCIDENT, DERAILMENT OR FOR OTHER DAMAGE CAUSED BY FIRE, FLOOD OR OTHER EXTERNAL
CONDITIONS UNRELATED TO THE MANUFACTURE OF THE RAILCAR OR FOR NORMAL WEAR AND TEAR.
Representations and Warranties:
(a) FreightCar represents and warrants that the Railcars manufactured pursuant to this
Agreement will meet all published U.S. laws, rules and regulations governing the manufacture of
railcars in effect on the date of manufacture of the Railcars, including, but not limited to, the
applicable published requirements of the Federal Railway Administration and the Association of
American Railroads. FreightCar represents that it is in material compliance with all such laws,
regulations and orders applicable to FreightCar.
(b) FreightCar and Purchaser each hereby represent and warrant to the other that: (a) it is
incorporated or registered and existing in good standing as a corporation or limited partnership,
as the case may be, under the laws of the state in which it is organized and all states in which it
is authorized to do business, with full corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; (b) neither the execution and delivery of this
Agreement by it, nor the performance of its obligations hereunder, will result in any violation of
its certificate of incorporation or bylaws, or its Certification of Formation on limited
partnership agreement, as applicable; and (c) this Agreement constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency and other similar laws affecting creditors’ rights generally, and to
equitable principals of general applicability.
(c) The representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement, subject to the applicable statute of
limitations period.
Non-Disclosure: The parties each agree that the provisions of this Agreement shall not be
disclosed to any person other than the parties’ directors, managers, officers, employees,
affiliates, agents (including consultants, auditors and accountants, but excluding any manufacturer
of railcars or components or affiliate thereof) or legal counsel (herein “Purchaser’s or
FreightCar’s representatives”), who shall be subject to the non-disclosure provisions contained
herein; except (i) upon the written consent of the other party, (ii) to any federal, state or local
governmental agency to whose jurisdiction a party is subject pursuant to regulation, regulatory
body policy, order of court or order of administrative judge or hearing examiner (provided,
however, that unless specifically required by law, neither party shall provide the Price for the
Railcars or any other terms of conditions of sale to the STB, including without limitation in any
filing made with the STB), (iii) in response to warrant, subpoena, interrogatory, investigative
demand or other legal process in any legal proceeding, including a proceeding for enforcement of
this Agreement, (iv) to any third party or parties for the purpose of financing the Railcars or the
debt of the Purchaser, provided, that, prior to such disclosure each such party agrees to be bound
by the terms of this agreement of non-disclosure, and provided, further, that any breach by such
third party shall be deemed to be a breach by Purchaser of this Agreement, or (v) in connection
with any filings made to the Securities and Exchange Commission. In situations (ii), (iii)
or (v) above, when disclosure is to be made to any person other than Purchaser’s or FreightCar’s
representatives, the disclosing party shall use reasonable efforts to notify the other party of its
intent to disclose such information so that the other party may, if it so elects, seek an
appropriate protective order or other appropriate relief to avoid or limit such disclosure. In
situation (iv) above, no disclosure by Purchaser shall be made to any manufacturer of railcars or
components or affiliate thereof.
Drawings: All drawings and technical material, including specifications, descriptions and
tolerances relating to the Railcars or any components thereof supplied by FreightCar to Purchaser
pursuant to the Specifications (the “Drawings”) are the exclusive property of FreightCar and
contain confidential and proprietary information. By accepting the Drawings from FreightCar,
Xxxxxxxxx agrees to limit its use of the Drawings solely to matters relating to Purchaser’s use of
the Railcars, including the repair and maintenance of the Railcars. Purchaser further agrees not
to disclose the Drawings, or to disclose any information contained in or derived from the Drawings,
to any person, including, but not limited to, any other manufacturer of railcars or components or
affiliate thereof; provided, however, that Purchaser may provide the Drawings to a car repair shop
for the sole purpose of maintaining and repairing the Railcars, provided that such car repair shop
agrees in advance in writing to be bound by the terms of the confidentiality provisions contained
herein and, provided further, that any breach of such agreement by such car repair shop shall be
deemed a breach by Purchaser of this Agreement.
Sales Tax: Notwithstanding anything herein this Agreement to the contrary, Purchaser shall pay,
and shall indemnify and hold FreightCar harmless against, all state or local sales, use or related
taxes arising out of this transaction which FreightCar may be required to pay or collect with
respect to this Agreement.
Order Cancellation: The Railcars to be manufactured by FreightCar for Purchaser pursuant to this
Agreement are to be built to order and Purchaser’s purchase commitment contained herein is
non-cancellable. Notwithstanding the foregoing, if Purchaser, for whatever reason, cancels its
order, it shall upon demand pay to FreightCar, as liquidated damages and not as a penalty, all
costs theretofore incurred by FreightCar in the manufacture of the Railcars, including, without
limitation, labor costs, and the costs of material, components and supplies ordered by FreightCar
to fulfill this Agreement (net of the fair market salvage value of such material, components or
partially manufactured Railcars), together with FreightCar’s lost profits, if any, attributable to
the cancellation of Purchaser’s purchase commitment (provided, however, that FreightCar shall not
be entitled to any such lost profits if FreightCar sells the Cars to a third party for a purchase
price which
equals or exceeds the purchase price for the Cars which would have been paid by Purchaser had
Purchaser not cancelled this Agreement), all as reasonably calculated by FreightCar.
Patents: FreightCar will indemnify Purchaser against any judgment for damages and costs which may
be rendered against Purchaser in any suit brought as a result of the alleged infringement of any
United States patent by any Railcar supplied by FreightCar, unless made in accordance with
materials, designs or specifications furnished or designated by Purchaser, in which case Purchaser
will indemnify FreightCar against any judgment for damages and costs which may be rendered against
FreightCar in any suit brought as a result of the alleged infringement of any United States patent
by such Railcar as a consequence of such materials, designs or specifications; provided that prompt
written notice be given to the party from whom indemnity is sought and that an opportunity be given
to that party to settle or defend such action as that party may see fit and that each party render
to the other party every reasonable assistance in settling or defending such action. Neither party
will be liable to the other for special, indirect, incidental or consequential damages arising out
of or resulting from infringement of patents. In the event the Railcars are held to constitute
infringement for which FreightCar has agreed to indemnify Purchaser hereunder and the use of the
Railcars, or any part thereof, is enjoined, FreightCar shall, at its option and expense, either
procure for Purchaser the right to continue using said Railcar, replace same with non-infringing
equipment of like kind and quality, modify said Railcar so that it becomes non-infringing or refund
the purchase price of said Railcar (following the return of such Railcar by Purchaser to
FreightCar’s Plant).
Assignment: Neither FreightCar nor Purchaser may assign all or any portion of its rights or
obligations under this Agreement without the prior written approval of the other party, which shall
not be unreasonably withheld; provided, however, that notwithstanding the foregoing, FreightCar may
assign its right to receive any or all payments due hereunder to a third party without the approval
of Purchaser. In connection with Purchaser’s financing of the Railcars, Purchaser shall provide to
FreightCar sufficient opportunity to review and approve any assignment documents which the
financing source requests be executed by FreightCar. Such assignment documents shall provide that
(i) Purchaser shall remain liable to FreightCar in accordance with this Agreement (including,
without limitation, the obligation to pay the purchase price for the Railcars) to the extent such
obligations are not fully and timely performed by such assignee, and (ii) nothing contained in such
assignment shall be deemed to modify FreightCar’s rights or obligations under this Agreement.
Binding Effect: This Agreement shall be binding upon and inure to the benefit of FreightCar and
Purchaser and to their respective successors and permitted assigns.
Notices: All notices, demands, requests and other communications required or permitted under this
Agreement shall be in writing or by a telecommunications device capable of creating a written
record, and shall become effective: (a) upon personal delivery thereof, including, without
limitation, by overnight mail and courier service, (b) five (5) days after the date on which it
shall have been mailed by United States mail (certified mail, postage prepaid, return receipt
requested), or (c) in the case of a communication by a telecommunications device, when properly
transmitted during normal business hours (or if not, then on the following business day)
addressed to each party at its address or facsimile number set forth on the signature page of the
body of this Agreement or at such other address or facsimile number as such party may have
specified previously by notice delivered in accordance with this section.
Entire Agreement; No Third Party Beneficiaries: This Agreement (which includes these Terms and
Conditions of Sale, the Proposal Letter and the Specifications and the exhibits and attachments
hereto and thereto) contains the entire agreement of FreightCar and Purchaser with respect to the
subject matter hereof and supersedes all prior written or oral agreements of the parties. This
Agreement is not intended to confer upon
any person other than the parties hereto, any rights or remedies, and shall not be enforceable by
any person or entity who or which is not a party hereto.
Professional Fees and Brokerage Fees: Each party to this Agreement shall be responsible for all
professional fees and brokerage fees, if any, incurred by such party in connection with the
transaction evidenced by this Agreement.
Disclaimer of Special or Punitive Damages: Notwithstanding anything in this Agreement to the
contrary, in no event shall any party to this Agreement be obligated to any other party for any
punitive or special damages arising from any breach or violation of this Agreement.
Severability: Any provision of this Agreement that is inoperative, unenforceable or invalid in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of the operation,
unenforceability or invalidity without affecting the remaining provisions of this Agreement or
affecting the operation, enforceability or validity of that provision in any other jurisdiction.
Amendments, Waiver: None of the terms of this Agreement may be waived or modified except in
writing signed by both FreightCar and Purchaser. Any additional or different terms or conditions
proposed by Purchaser are rejected unless expressly assented to in writing by FreightCar. No
waiver of any of the provisions of this Agreement by either party shall constitute a waiver of any
other provision nor shall any such waiver constitute a continuing waiver.
Miscellaneous: The section headings contained in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or interpretation of this
Agreement. This Agreement may be executed in multiple counterpart copies, all of which taken
together shall be deemed one original for all purposes.
Governing Law and Jurisdiction: This Agreement shall be governed by, and construed according to,
the laws of the State of Illinois, without regard to its conflict of laws doctrine. FreightCar and
Purchaser hereby submit to the jurisdiction of, and waive any venue objections against, the United
States District Court for the Northern District of Illinois (or any court of the State of Illinois
located in such district) in any litigation arising out of this Agreement.
Interpretation: To the extent there is a conflict between the provisions of the Proposal Letter
and these Terms and Conditions of Sale, the provisions of the Proposal Letter shall govern.
[SIGNATURE PAGE TO FOLLOW]
ACCEPTANCE:
FreightCar and Purchaser hereby acknowledge their acceptance of the above described Terms and
Conditions of Sale.
| FREIGHTCAR AMERICA, INC. | TEXAS GENCO II, LP | |||||||||
| By: | New Xxxxx XX, LLC, its general partner | |||||||||
By:
|
/s/ Xxxx Xxxxxxxxx | By: | /s/ Xxxx Xxxxx | |||||||
Its:
|
Its: | |||||||||
Date:
|
October 5, 2005 | Date: | September 30, 2005 | |||||||
Address:
|
Address: | |
FreightCar America, Inc.
|
Texas Genco II, LP | |
00 Xxxxx Xxxxxx
|
0000 XxXxxxxx, Xxxxx 0000 | |
Johnstown, PA 15901
|
Houston, TX 77010 | |
Attention: Xxxx Xxxxxxxxx, Product Line Manager
|
Attention: Xxxxx Xxxx, Transportation Specialist | |
Fax: 814/000-0000
|
Fax: 713/000-0000 |
EXHIBIT A
CERTIFICATE OF ACCEPTANCE
Type of Railcars: |
||||
Place Accepted: |
||||
Date Accepted: |
||||
Number of Railcars: |
||||
Reporting Marks: |
||||
| Car Numbers | Car Weights | Car Numbers | Car Weights | |||
I have been appointed as the duly authorized representative of TEXAS GENCO II, LP (“Purchaser”) for
the purpose of inspecting and accepting the units of railroad equipment described above (the
“Railcars”), which are referred to in the agreement dated as of ___, 2005 (the
“Agreement”), between FREIGHTCAR AMERICA, INC. (“Builder”) and Purchaser.
I hereby certify that with respect to the Railcars:
| A. | Each Railcar has been inspected and is in good order. | ||
| B. | Based on my determination that each Railcar is in compliance with all applicable Specifications (as defined in the Agreement), each Railcar is hereby accepted for all purposes of the Agreement. |
| Authorized Representative of Purchaser |
EXHIBIT B
FINAL DELIVERY DATE FOR THE RAILCARS
***
EXHIBIT C
COMPONENT WARRANTIES
Attached are copies of warranties from the following manufacturers and suppliers:
ASF-Keystone, Inc.
ZefTek, Inc.
Xxxxxxxx Westinghouse Co./Universal Railway Devices Co.
X. Xxxxxx Company
New York Air Brake Corporation
Miner Enterprises Inc.
Xxxxxxxx Equipment, Inc.
Strato
Xxxxxxx Industries, Inc. d/b/a Xxxxxxx Hand Brake Company
Union Spring & Manufacturing Corp.
Holland
Brenco
Standard Forged Products, Inc.
ZefTek, Inc.
Xxxxxxxx Westinghouse Co./Universal Railway Devices Co.
X. Xxxxxx Company
New York Air Brake Corporation
Miner Enterprises Inc.
Xxxxxxxx Equipment, Inc.
Strato
Xxxxxxx Industries, Inc. d/b/a Xxxxxxx Hand Brake Company
Union Spring & Manufacturing Corp.
Holland
Brenco
Standard Forged Products, Inc.
Additional warranties may be added from time to time.
August 31, 2005
FreightCar America Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Re:
|
Aluminum BethGon® II Railcars for Texas Genco II, LP., | |
| FreightCar America Inc. Proposal No. 04153 Revision A |
Gentlemen:
Texas Genco II, LP (“Texas Genco”) hereby confirms that it intends to purchase (the
“Transaction”) from FreightCar America Inc. (“FreightCar America”, and together with Texas Genco,
the “Parties”, and each, a “Party”) an additional *** Aluminum Outside Stake BethGon II® open top
coal railcars conforming to Specification X-04153 dated February 14, 2005 (“Specification”), and
provided by FreightCar America (f/k/a Johnstown America Corporation) to Texas Genco, for a total of
*** railcars. The price per railcar shall be as outlined in your proposal dated March 4, 2005, FOB
FreightCar America’s plant in *** . Delivery shall begin no later than the first week of
*** 2006 for the first *** railcars. An additional delivery of *** railcars shall occur in *** and *** 2006. An additional delivery of *** railcars and a final delivery of *** railcars shall
be completed by *** 2006 and *** 2007, respectively.
The Transaction is subject to mutual agreement between Texas Genco and FreightCar America on
the terms and conditions of the Transaction, including pricing on, and changes to, the Specialty
Component List. Accordingly, the Parties intend that no legally binding obligations shall arise
between them under this letter. Such obligations shall arise only to the extent set forth in a
purchase agreement duly executed and delivered by each Party. Notwithstanding the foregoing,
unless and until the negotiations required by the following sentence have been had and
discontinued, FreightCar America shall not enter into any agreement that would require it to
deliver railcars to any third party on a schedule that would prevent it from delivering the
railcars contemplated by this letter to Texas Genco on the schedule set forth above.
Notwithstanding the aforementioned required board approval, Texas Genco and FreightCar America
shall use commercially reasonable efforts to negotiate and agree on the terms and conditions within
30 days of the date of this letter. Should the Parties fail to enter into such terms and
conditions within 30 days of the date of this letter, FreightCar America shall not be barred from
entering into an agreement that would require it to deliver railcars to a third party on a schedule
that would prevent it from delivering the railcars according to the schedule contemplated by the
Parties.
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Please confirm by signing a copy of this letter in the space provided below and returning it
to the undersigned that this letter of intent is sufficient to allow FreightCar America to take all
action required to assure that the railcars that are the subject of the Transaction can be
delivered on the schedule set forth above.
Please call if you have any questions or would like to discuss the matter.
| FREIGHTCAR AMERICA INC. | TEXAS GENCO II, LP | |||||||||
| By: New Xxxxx XX, LLC, its general partner | ||||||||||
By:
|
/s/Xxx Xxxxxxx | By: | /s/Xxxxx Xxxxxx | |||||||
| Name: Xxx Xxxxxxx | Name: Xxxxx Xxxxxx | |||||||||
| Title: VP — Sales, Western Region | Title: 8/31/05 | |||||||||
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