Exhibit 10.21


 


TRANSITION SERVICES AGREEMENT


 


This TRANSITION SERVICES AGREEMENT (together with the
Schedules hereto, the “Agreement”),
dated January 25, 2006, by and between Stewart & Stevenson LLC, a
Delaware limited liability company (“Buyer”),
and Stewart & Stevenson Services, Inc., a Texas corporation (“Parent”). Buyer and Parent may be
referred to herein collectively as the “Parties”
and individually as a “Party”.
Capitalized terms used herein but not defined herein shall have the meanings
ascribed to such terms in the PPD Purchase Agreement (as defined below).


 


WHEREAS, pursuant to the Asset
Purchase Agreement, dated September 27, 2005, among Parent and certain of
its subsidiaries party thereto, on the one hand, and Mr. Hushang Ansary (“Mr. Ansary”), on the other (as
amended, supplemented or otherwise modified from time to time by mutual
agreement of the parties thereto, the “EPD Purchase Agreement”),
Parent and certain of its subsidiaries have agreed to sell and assign, and Mr. Ansary
has agreed to acquire and assume, certain assets and liabilities of the
Business (as defined in the EPD Purchase Agreement);


 


WHEREAS, pursuant to the Asset
Purchase Agreement, dated as of October 24, 2005, among Parent and certain
of its subsidiaries party thereto, on the one hand, and Mr. Ansary, on the
other, (as amended, supplemented or otherwise modified from time to time by the
mutual agreements of the parties thereto, the “PPD
Purchase Agreement” and, together with the EPD Purchase
Agreement, the “Purchase Agreements”), Parent
and certain of its subsidiaries have agreed to sell and assign, and Mr. Ansary
has agreed to acquire and assume, certain assets and liabilities of the
Business (as defined in the PPD Purchase Agreement and, collectively with
Business (as defined in the EPD Purchase Agreement), the “Businesses”);


 


WHEREAS, the EPD Purchase
Agreement contemplated that at the closing thereunder Mr. Ansary and
Parent would enter into the Transition Services Agreement in the form attached
as Exhibit 2.9(a)(vii) to the EPD Purchase Agreement (the “EPD Transition Services Agreement”);


 


WHEREAS, the PPD Purchase
Agreement contemplated that at the closing thereunder the Parties would enter
into a Transition Services Agreement in form and substance to be agreed by
the Parties (the “PPD Transition Services Agreement”);


 


WHEREAS, consistent with and
subject to the terms and conditions of the Purchase Agreements, Mr. Ansary
has assigned his rights and his obligations under the Purchase Agreements to
Buyer and Stewart & Stevenson Power Products LLC, a Delaware limited
liability company;


 


WHEREAS, following the
consummation of the transactions contemplated by the Purchase Agreements, Buyer
will directly or indirectly own and operate the Businesses;


 

















 


WHEREAS, in lieu of entering
into the EPD Transition Services Agreement and the PPD Transition Services
Agreement and as a result of Buyer acquiring the Businesses, Buyer and Parent
desire to enter this Agreement in respect of transition services to be provided
between the Parties;


 


WHEREAS, Buyer has requested
that Parent or its Affiliates provide the Parent Support Services (as defined
below), subject to the terms and conditions set forth herein; and


 


WHEREAS, Parent has requested
that Buyer or its Affiliates provide the Buyer Support Services (as defined
below), subject to the terms and conditions set forth herein.


 


NOW, THEREFORE, in consideration
of the premises and the mutual agreements set forth herein, the Parties hereto
agree as follows:


 


1.                                       Provision
of Support Services.


 


(a)                            Following
the date hereof, Parent agrees to provide or cause to be provided to Buyer and
its subsidiaries, the services listed on Schedule 1 (the “Parent Support Services”), upon
receipt of an e-mail notice from one of the individuals designated on Schedule 1
(or any other individual designated by Buyer in a notice to Parent) to one of
the individuals designated on Schedule 2 (or any other individual
designated by Parent in a notice to Buyer) requesting any such Parent Support
Service. Each such notice shall provide reasonable detail as to the specific
Parent Support Service being requested.


 


(b)                           Following
the date hereof, Buyer agrees to provide or cause to be provided to Parent and
its subsidiaries, the services listed on Schedule 2 (the “Buyer Support Services” and,
together with the Parent Support Services, the “Support
Services” and each a “Support Service”)
upon receipt of an e-mail notice from one of the individuals designated on Schedule 2
(or any other individual designated by Parent in a notice to Buyer) to one of
the individuals designated on Schedule 1 (or any other individual
designated by Buyer in a notice to Parent) requesting any such Buyer Support
Service. Each such notice shall provide reasonable detail as to the specific
Buyer Support Service being requested.


 


(c)                            Subject
to the terms and conditions hereof, any requested modification in the provision
of any Support Service, including the provision of additional services, will
only be made if each Party in its sole discretion agrees in writing to the
provision of the Support Services as so modified.


 


(d)                           The
Parties acknowledge that Parent has prepaid certain maintenance, license and
other fees in respect of the contracts listed on Schedule 3 (the “Prepaid Fees”) and the Parties agree
that such amounts will be reimbursed to Parent in the manner described in Schedule 3.
The Parties recognize that in connection with the transfer to Buyer of the
assets listed in section 2.1(l) of the Seller Disclosure Letter to the PPD
Purchase Agreement (the


 


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“IT Assets”) and the transfer
to and assumption by Buyer of the Contracts listed on Schedule 3
and Buyer’s obligation to provide the Buyer Support Services certain fees have
been or will need to be paid to third parties to obtain consents and additional
licenses, which fees are set forth on Schedule 4 (the “Transition Fees”). The Parties agree
that the Transition Fees shall be borne equally by the Parties.


 


(e)                            During
the Transition Period (as defined in Section 7(a)), each Party agrees to
provide such advice and assistance relating to the use of the JD Edwards system
and associated software on an informal, cost-free basis (but not on a recurring
or unreasonable basis) and in a manner consistent with such advice and
assistance provided on an unallocated basis among the Parent and its divisions
prior to the date hereof.


 


(f)                              Upon
the earlier of the termination of this Agreement and the end of the Transition
Period, Buyer shall deliver to Parent electronic, usable and archivable copies
of all electronic records in its possession (including its electronic data
systems) relating to Parent and its Subsidiaries.


 


(g)                           Each
agreement, covenant and obligation of each Party in Schedules 1 and 2 shall be
binding upon such Party notwithstanding the fact that such agreement, covenant
or obligation may be present in the schedule of services to be
provided by the other Party.


 


2.                                       Force
Majeure; Emergency Situations.


 


In the event that war,
fire, explosion, flood, accident, strike, riot, act of governmental authority,
act of terrorism, act of God or other contingency beyond the reasonable control
of a party obligated to provide a Support Service (the “Providing
Party”) causes cessation or interruption of the Providing Party’s
or its subcontractor’s performance hereunder (a “Force
Majeure Event”), performance by the Providing Party shall be
temporarily excused for the period of the disability, without liability,
provided that the Providing Party shall promptly after it has actual knowledge
of the beginning of any excusable delay, notify the party for whom the Support
Service is being provided (the “Receiving Party”)
of such delay, the reason therefor, and the probable duration and consequence
thereof. The Providing Party shall use its commercially reasonable efforts to
resume performance of its obligations hereunder as soon as reasonably
practicable.


 


3.                                       Charges
for Support Services.


 


(a)                            Each
Party shall pay the other Party for the Support Services provided hereunder on
the basis of the charges set forth on Schedule 1 or Schedule 2,
as the case may be, plus,


 


(i)                                     the
reasonable out-of-pocket costs and expenses incurred by the Providing Party and
its Affiliates in connection with the travel of any Person to facilitate the
delivery of the Support Services and transition of such services to the
Businesses or to Parent, as the case may be; and


 


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(ii)                                  the
reasonable out-of-pocket costs and expenses incurred by the Providing Party and
its Affiliates to purchase and install new hardware and/or software reasonably
necessary to provide a Support Service or reasonably required by the Providing
Party for security and or confidentiality purposes.


 


(b)                           In
the event the Providing Party receives timely notice pursuant to Section 7(a) of
the Receiving Party’s request to terminate any Support Service or additional
service prior to the termination of this Agreement, the Receiving Party shall
not be charged for such Support Service or additional service for the remaining
term of this Agreement following the effective date of the termination of such
Support Service.


 


(c)                            The
Providing Party shall obtain the Receiving Party’s written consent prior to
incurring any cost or expense hereunder in excess of $5,000 if such incurrence
would obligate a party to share such cost or expense with the other Party
pursuant to Section 1(c) or reimburse the other Party pursuant to Section 3(a)(i),
3(a)(ii) or 4(g).


 


(d)                           In
no event shall either Party be responsible for (i) paying any salaries,
wages, withholding, severance payments or any other compensation or payments
with respect to employees of the other Party, (ii) overhead costs or (iii) matters
of any nature associated with the provision of Support Services, other than as
expressly provided in this Agreement.


 


(e)                            On
or before the last day of each month, the Providing Party shall invoice the
Receiving Party for the amount due for the period covered by that invoice
(each, an “Invoice”). Invoices shall be
sent in a format and containing a level of detail reasonably sufficient for the
Receiving Party to determine the accuracy of the computation of the amount
invoiced. If the Receiving Party does not dispute the amount payable pursuant
to the Invoice, then the full amount of the Invoice shall be paid on or before
the 30th day after which it was delivered. If the Receiving Party
disputes any amount payable pursuant to an Invoice, the Receiving Party shall
pay to the Providing Party the undisputed portion within the 30-day period
specified above. All amounts due under this Agreement that are not paid on or
before the due date and which are ultimately due and payable shall bear
interest at the rate of twelve percent (12%) per annum. The obligation to pay
for Support Services rendered shall survive the termination of this Agreement. No
Party shall have any right to setoff any amounts due and payable to the other
Party pursuant to this Agreement against any payments to be made pursuant to
this Agreement, the Purchase Agreements or otherwise. Notwithstanding anything
to the contrary in this Section 3(e), after a material Force Majeure Event
has continued for a thirty (30) consecutive day period with respect to any
Support Service, the monthly fee (or any portion thereof) for such Support
Service shall not accrue until the ability to provide such Support Service has
been restored, in which case the resumption of the monthly fee shall be
calculated by multiplying the monthly fee by the quotient of (x) the number of
days in the month in which the Support Service was capable of being provided, 


 


4

















 


divided by (y) the number of days in the month. By way of example, if a
material Force Majeure Event occurs on April 15 and continues until June 15,
Buyer will be invoiced one-half of the monthly fee for April, no fee for May,
one-half of the monthly fee for June and the monthly fee for July.


 


(f)                              All
payments made hereunder are exclusive of any and all sales and use taxes,
similar duties or levies assessed by applicable Governmental Bodies on the
payments hereunder. The Receiving Party agrees to pay or reimburse the
Providing Party for any such taxes or similar fees or duties for such Support
Service provided hereunder.


 


(g)                           Costs
for long distance, the MAN (Metropolitan Area Network) data circuit from the
Businesses to Parent, P-card, blackberry service, telephone services, travel
related services and other business expenses that have been paid by Parent and
charged directly to the Businesses, rather than charged to the Corporate
segment of Parent and allocated to the Businesses via an allocation mechanism,
shall continue to be paid by Parent and reimbursed by Buyer until the earlier
of (i) 120 days after the date hereof and (ii) such time as Buyer has
contracted for such services in Buyer’s name.


 


4.                                       Conduct
of the Business.


 


(a)                            Buyer
recognizes that the transfer of the IT Assets and the performance of the Buyer
Support Services will result in Buyer having access to confidential and
proprietary information of Parent and its Affiliates. Buyer hereby agrees and
covenants to comply with, and cause its employees, independent contractors and
other agents and representatives to comply with, usage rules and policies
at least as stringent as Parent’s usage rules and policies in effect
immediately prior to the date hereof, a copy of which is attached hereto as Schedule 5.


 


(b)                           Parent
shall comply with, and cause its employees, independent contractors and other
agents and representatives that will be accessing or otherwise using the Buyer
Support Services to comply in all material respects with Buyer’s usage rules and
policies, except to the extent Buyer’s usage rules and policies differ
from Parent’s rules and policies in Schedule 5 and such
difference would adversely affect the benefits to be received by Parent under
this Agreement.


 


(c)                            Buyer
and Parent hereby agree to enforce compliance with the usage rules and
policies using the same principles that Parent enforced and used immediately
prior to the Closing Date.


 


(d)                           Parent’s
obligation to provide the Parent Support Services is subject to Buyer’s
compliance with Buyer’s agreements in Sections 4(a) and (c). Parent shall
not be obligated to provide any Parent Support Services during any period in
which Buyer is in material breach of Section 4(a) or 4(c).


 


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(e)                            Buyer’s
obligation to provide the Buyer Support Services is subject to Parent’s
compliance with Parent’s agreements in Sections 4(b) and (c). Buyer shall
not be obligated to provide any Buyer Support Services during any period in
which Parent is in material breach of Section 4(b) or 4(c).


 


(f)                              Each
Party will have the sole authority to administer its information technology
network in accordance with its relevant practices and procedures so long as
such administration does not materially adversely affect such Party’s
performance of its obligations hereunder. All technical, security and policy
decisions relating to a Party’s information technology network and the Support
Services to be provided by such Party shall be made by such Party.


 


(g)                           Notwithstanding
anything to the contrary in Section 4(f) or elsewhere in this
Agreement, Buyer agrees with respect to Parent’s assets affected by this
Agreement to, and shall take all steps reasonably requested by Parent to, (i) safeguard
Parent’s assets against unauthorized acquisition, use or disposition and
provide reasonable assurance to Parent that Buyer has an internal control
process designed to prevent and timely detect unauthorized acquisition, use or
disposition of Parent’s assets, (ii) assist Parent in achieving its
objectives of maintaining (A) effectiveness and efficiency of its
operations, (B) reliability of financial reporting and (C) compliance
with applicable laws and regulations, (iii) provide Parent and its
representatives, including without limitation its independent registered public
accounting firm, reasonable access to monitor, evaluate and test Buyer’s
control systems for the limited purpose of assessing the status of the items in
clauses (A)-(C) above, and (iv) generally support Parent’s management’s
and Parent’s independent registered public accounting firm’s periodic
assessments that Parent and its subsidiaries maintain effective internal
control over financial reporting; provided, however, that, to the extent Buyer
incurs, in connection with the performance of its obligations under this Section 4(g),
any incremental, information technology or other costs, Seller will promptly
reimburse Buyer for such costs upon Buyer’s demand therefor.


 


5.                                       Standard
of Performance; Disclaimers; Limitation of the Parties’ Liability.


 


(a)                            Each
Party shall use its commercially reasonable efforts to provide or cause to be
provided the Support Services that it is required to provide with the same
degree of care, skill and prudence customarily exercised by it for its own
operations, and shall comply with all applicable Legal Requirements. Each Party
acknowledges, however, that neither Party nor any of its Affiliates is in the business
of providing the Support Services and that such Support Services are provided
solely as an accommodation as a result of the transactions contemplated by the
Purchase Agreements. Except in matters involving wilfull misconduct or gross
negligence, each Party’s sole and exclusive remedy and sole and exclusive
liability for any defect or error in Support Services provided to it shall be
either (i) the reperformance of such Support Services at no charge, or (ii) the
reimbursement of amounts paid by the recipient of such Support Services.


 


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(b)                           NO
PARTY MAKES ANY REPRESENTATION OR WARRANTY AS TO THE RESULTS OF ANY SUPPORT
SERVICES PROVIDED BY IT OR ITS AFFILIATES HEREUNDER AND HEREBY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE WITH RESPECT TO ITS OR ITS AFFILIATES PERFORMANCE HEREUNDER, EXCEPT
AS EXPRESSLY SET FORTH HEREIN. EACH PARTY SPECIFICALLY DISCLAIMS ANY IMPLIED
WARRANTY OF MERCHANTABILITY, QUALITY, ACCURACY AND FITNESS FOR A PARTICULAR
PURPOSE.


 


(c)                            EXCEPT
FOR THE OBLIGATIONS SET FORTH IN SECTION 5(a) AND EXCEPT FOR DAMAGES
ARISING FROM WILFULL MISCONDUCT OR GROSS NEGLIGENCE, NEITHER THE PARTIES NOR
THEIR AFFILIATES SHALL BE LIABLE TO EACH OTHER OR ANYONE ACTING BY, THROUGH OR
UNDER THE OTHER PARTY, UNDER ANY LEGAL THEORY (INCLUDING WITHOUT LIMITATION
BREACH OF CONTRACT, STRICT LIABILITY, NEGLIGENCE OR ANY OTHER LEGAL OR
EQUITABLE THEORY), FOR EXEMPLARY, SPECIAL, PUNITIVE, INDIRECT, REMOTE,
SPECULATIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO PERFORMANCE
OR NONPERFORMANCE OF SUPPORT SERVICES (EXCEPT TO THE EXTENT ANY SUCH PERSON
SUFFERS SUCH DAMAGES TO AN UNAFFILIATED THIRD PARTY IN CONNECTION WITH A THIRD
PARTY CLAIM, IN WHICH EVENT SUCH DAMAGES SHALL BE RECOVERABLE).


 


6.                                       Independent
Contractor; Subcontractors.


 


(a)                            In
the performance of all activities hereunder, each Party shall be an independent
contractor with the exclusive authority to control and direct the means, method
and manner of performance of the details of any Support Services. The
obligations of the Providing Party to the Receiving Party shall be those of an
independent contractor and not an employee, agent or servant of the Receiving
Party, and this Agreement does not create any partnership or joint venture
between Parent and Buyer.


 


(b)                           Each
Party expressly consents to the other Party’s use of subcontractors in
connection with the performance of Support Services hereunder.


 


7.                                       Term.


 


(a)                            With
respect to all of the Support Services, the term of this Agreement shall begin
on the date hereof and shall remain in full force for a period of twelve (12)
months (the “Transition Period”);
provided, however, that either Party may terminate this Agreement at any
time, in whole or with respect to any Support Service being provided to it at
such time, by providing written


 


7

















 


notice to the other Party at least thirty (30) days prior to such
termination, in which case this Agreement or any such Support Service being
terminated shall be terminated effective as of the end of the month in which
the thirty (30) day notice period expires. Charges for any Support Services so
terminated shall be reduced accordingly; provided, that the Receiving Party shall
be obligated to pay the Providing Party for any Support Service provided prior
to the effective date of termination of any such Support Service.


 


(b)                           So
long as Buyer is in full compliance with its obligations under this Agreement
and all amounts to be paid to Parent hereunder have been paid when due, Buyer
shall have the option to extend the Transition Period with respect to any
Parent Support Service up to an additional period of six (6) months with
respect to all or part of the Parent Support Services that have not been
terminated prior to the end of the Transition Period (the “Buyer
Extension Period”). Buyer may exercise its option to
initiate a Buyer Extension Period by delivery of a written notice to Parent no
later than sixty (60) days prior to the end of the Transition Period. Buyer’s
notice shall specify in reasonable detail the types and levels of Parent
Support Services to be provided by Parent during the Buyer Extension Period. If
Buyer initiates a Buyer Extension Period with respect to any Parent Support
Service, the fee, rate or amount to be charged to Buyer for the provision of
any Parent Support Service shall be increased by twenty-five percent (25%) from
the fee, rate or amount to be charged in accordance with Schedule 1.


 


(c)                            So
long as Parent is in full compliance with its obligations under this Agreement
and all amounts to be paid to Buyer hereunder have been paid when due, Parent
shall have the option to extend the Transition Period with respect to any Buyer
Support Service up to an additional period of six (6) months with respect
to all or part of the Buyer Support Services that have not been terminated
prior to the end of the Transition Period (the “Parent
Extension Period”). Parent may exercise its option to
initiate a Parent Extension Period by delivery of a written notice to Buyer no
later than sixty (60) days prior to the end of the Transition Period. Parent’s
notice shall specify in reasonable detail the types and levels of Buyer Support
Services to be provided by Buyer during the Parent Extension Period. If Parent
initiates a Parent Extension Period with respect to any Buyer Support Service,
the fee, rate or amount to be charged to Buyer for the provision of any Buyer
Support Service shall be increased by twenty-five percent (25%) from the fee,
rate or amount to be charged in accordance with Schedule 2.


 


(d)                           Notwithstanding
the provisions of Sections 7(a), (b) and (c), each Party reserves the
right to immediately terminate this Agreement by written notice to the other
Party in the event that:


 


(i)                                     the
other Party commits a material breach of the terms of this Agreement, which
breach remains uncured for a period of five (5) days after the
non-breaching Party has given written notice to the other Party of such breach
(the “Cure 


 


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Period”);
provided, that each Party expressly acknowledges
that the failure to pay any amount when due (following any Cure Period) and any
breach of Section 4(a), (b) or (c) shall be a material breach of
the terms of this Agreement; provided, however, that
neither contesting in good faith the quality or effectiveness of Support
Services nor the withholding of amounts owed hereunder in connection with a
good faith dispute concerning such Support Services shall be considered a
material breach for purposes of this subparagraph;


 


(ii)                                  the
other Party shall (A) apply for consent to the appointment of a receiver,
trustee or liquidator, (B) admit in writing an inability to pay debts as
they mature, (C) make a general assignment for the benefit of creditors, (D) file
a voluntary petition or have filed against it a petition for an order of relief
under the Federal Bankruptcy Code, as the same may be amended, so as to
take advantage of any insolvency laws or to file an answer admitting the
general obligations of an insolvency petition; or


 


(iii)                               the
other Party shall have been prevented from exercising normal managerial control
over all or any substantial part of its property by any person or agent or
by reason of the entry of any order, judgment or decree by any court or
governmental agency of competent jurisdiction approving a petition seeking the
reorganization of such Party, or appointment of a receiver’s trustee,
liquidator or the like of such Party or a substantial part of its assets.


 


(e)                            Upon
termination of this Agreement for any reason, unless otherwise specified in Article 12
of the PPD Purchase Agreement, each Party shall return to the other Party all
documents and other tangible objects containing or representing Confidential
Information of the other Party obtained in connection with this Agreement,
including all notes, records, extracts, summaries and permitted copies thereof,
which are in the possession or control of such Party.


 


(f)                              EACH
PARTY, AS RECEIVING PARTY, EXPRESSLY AGREES THAT A CONDITION TO THE PROVIDING
PARTY PROVIDING SUPPORT SERVICES IS THE RECEIVING PARTY’S AGREEMENT TO MAKE ALL
PAYMENTS TO THE PROVIDING PARTY WHEN DUE (FOLLOWING THE CURE PERIOD), AND THAT
BUT FOR RECEIVING PARTY’S AGREEMENT TO MAKE ANY SUCH PAYMENTS WHEN DUE
(FOLLOWING THE CURE PERIOD), THE PROVIDING PARTY WOULD NOT HAVE AGREED TO ENTER
INTO THIS AGREEMENT. EACH PARTY, AS RECEIVING PARTY, EXPRESSLY UNDERSTANDS AND
AGREES THAT IF IT FAILS TO MAKE ANY PAYMENT TO THE PROVIDING PARTY WHEN DUE
(FOLLOWING THE CURE PERIOD), THE PROVIDING PARTY SHALL HAVE THE RIGHT IN ITS
SOLE AND ABSOLUTE DISCRETION TO IMMEDIATELY TERMINATE THIS AGREEMENT AND CEASE
PROVIDING ANY SUPPORT SERVICES. ANY TERMINATION OF THIS AGREEMENT AND SUPPORT
SERVICES AS A RESULT OF THE RECEIVING PARTY’S FAILURE TO MAKE ANY


 


9

















 


PAYMENT TO THE PROVIDING PARTY WHEN DUE (FOLLOWING THE CURE PERIOD)
SHALL BE WITHOUT LIABILITY OF ANY KIND WHATSOEVER TO THE PROVIDING PARTY AND
ITS AFFILIATES. EACH PARTY, AS RECEIVING PARTY, EXPRESSLY UNDERSTANDS AND
AGREES THAT ANY SUCH TERMINATION OF SUPPORT SERVICES COULD HAVE A MATERIAL
ADVERSE EFFECT ON THE RECEIVING PARTY’S BUSINESS.


 


(g)                           Buyer’s
exercise of the option in the Lease Agreement (as defined in the EPD Purchase
Agreement) shall not affect the Parties’ obligations hereunder or be deemed to
result in the termination of this Agreement.


 


8.                                       Information
and Records. Each Party shall keep the other Party reasonably and promptly
informed as to all matters relevant to the performance of Support Services
hereunder. Each Party will maintain true and correct records of all receipts,
invoices, reports and such other documents relating to the Support Services
rendered hereunder as are customarily maintained by it for its own operations
or as reasonably requested by the other Party.


 


9.                                       Notices.
All notices, consents, waivers and other communications required or
permitted by this Agreement shall be in writing and shall be deemed given to a
Party when (a) delivered to the appropriate address by hand or by
nationally recognized overnight courier service (costs prepaid); (b) sent
by facsimile with confirmation of transmission by the transmitting equipment; (c) received
or rejected by the addressee, if sent by certified mail, return receipt
requested; or (d) if given pursuant to Section 1(a) pr 1(b),
sent by e-mail with confirmation of transmission by return email, in each case
to the following addresses, facsimile numbers and marked to the attention of
the person (by name or title) designated below (or to such other address or
facsimile number or person as a Party may designate by notice to the other
Party):


 


	
   

  	
  Parent:

  	
  Stewart & Stevenson Services, Inc.

  
	
   

  	
   

  	
  2707 North Loop West, Suite 800

  
	
   

  	
   

  	
  Houston, Texas 77008

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Facsimile:

  	
  (713) 868-2130

  
	
   

  	
   

  	
  Confirm:

  	
  (713) 868-7700

  
	
   

  	
   

  	
  E-mail:

  	
  s.biar@ssss.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a mandatory copy (which shall not constitute
  notice) to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fulbright & Jaworski L.L.P.

  
	
   

  	
   

  	
  1301 McKinney, Suite 5100

  
	
   

  	
   

  	
  Houston, Texas 77010-3095

  
	
   

  	
   

  	
  Attention:

  	
  Charles H. Still

  
	
   

  	
   

  	
  Facsimile:

  	
  (713) 651-5246

  
	
   

  	
   

  	
  Confirm:

  	
  (713) 651-5151

  



 


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  Buyer:

  	
  c/o Parman Capital
  Group, LLC

  
	
   

  	
   

  	
  1000 Louisiana, Suite 5900

  
	
   

  	
   

  	
  Houston, Texas 77002

  
	
   

  	
   

  	
  Attention:

  	
  Hushang Ansary

  
	
   

  	
   

  	
  Facsimile:

  	
  713-659-3137

  
	
   

  	
   

  	
  Confirm:

  	
  713-650-0071

  
	
   

  	
   

  	
  E-mail:
  email@hushangansary.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a mandatory copy
  (which shall not constitute notice) to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jones Day

  
	
   

  	
   

  	
  222 East 41st Street

  
	
   

  	
   

  	
  New York, NY 10017

  
	
   

  	
   

  	
  Attention:

  	
  William F. Henze II

  
	
   

  	
   

  	
  Facsimile:

  	
  212-755-7306

  
	
   

  	
   

  	
  Confirm:

  	
  212-326-3939

  



 


10.                                 Waiver.
No course of dealing and no delay on the part of either Party in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such Party’s rights, powers or remedies. No term or
condition of this Agreement shall be deemed to have been waived nor shall there
be any estoppel to enforce any provision of this Agreement except by written
agreement of the Party charged with such waiver or estoppel. The waiver of any
breach of any term, condition or provision of this Agreement shall not be
construed as a waiver of any prior, concurrent or subsequent breach of the same
or any other term, condition or provision hereof.


 


11.                                 Entire
Agreement. This Agreement and the Schedules attached to this Agreement and
the Purchase Agreements constitute the final and entire agreement between the
Parties concerning the subject matter hereof, and supersede all prior and
contemporaneous agreements and undertakings of the Parties in connection
therewith. This Agreement may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the Parties. There are no oral
agreements between the Parties.


 


12.                                 Successors
and Assigns. This Agreement shall inure to the benefit of and be binding
upon the Parties hereto and their respective successors and permitted assigns,
but neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by either Party without the prior written consent
of the other Party.


 


13.                                 Governing
Law. This Agreement and the performance hereof shall be governed by and
construed and enforced under, and any Dispute determined in accordance with,
the laws of the State of Texas, without regard to conflicts-of-law principles
that would require the application of the law of any other jurisdiction.


 


14.                                 Confidentiality.
The Parties agrees that this Agreement, including all information exchanged or
accessed pursuant to this Agreement and the Support Services provided


 


11

















 


hereunder, is subject to, and the Parties are bound
by, the terms and conditions in Section 12 of the PPD Purchase Agreement.


 


15.                                 Arbitration.
In the event there shall exist any dispute or controversy with respect to
this Agreement or the providing of Support Services hereto or the transactions
contemplated hereby, the Parties hereto agree to seek to resolve such dispute
in accordance with Section 13.4 of the PPD Purchase Agreement.


 


16.                                 Severability.
The invalidity or unenforceability of any provision of this Agreement shall
in no way affect the validity or enforceability of any other provision hereof.


 


17.                                 Captions.
The headings to Sections of this Agreement are inserted for convenience of
reference only and will not affect the meaning or interpretation of this
Agreement.


 


18.                                 Schedules.
All Schedules hereto which are referred to herein are hereby made a part hereof
and incorporated herein by such reference.


 


19.                                 No
Third Party Beneficiaries. This Agreement inures to the sole and exclusive
benefit of the Parties, their respective successors, legal representatives and
permitted assigns, and confers no benefit on any third party.


 


20.                                 Mutual
Cooperation; Further Assurances. Upon request by either Party from time to
time during the term of this Agreement, each Party agrees to execute and
deliver all such other and additional instruments, notices and other documents
and do all such other acts and things as may be necessary to carry out the
purposes of this Agreement and to more fully assure the Parties’ rights and
interests provided for hereunder.


 


21.                                 Amendments;
Changes; Modifications. This Agreement may not be effectively amended,
changed, modified or altered without the written consent of the Parties and
such consent shall be effective only in the specific instance and for the
specific purpose for which it is given.


 


12

















 


IN WITNESS WHEREOF, the Parties have duly executed
this Agreement as of the date first above written.


 


	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  STEWART & STEVENSON LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Hushang Ansary

  	
   

  
	
   

  	
  Name:

  	
  Hushang
  Ansary

  	
   

  
	
   

  	
  Title:

  	
  Chairman

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PARENT:

  
	
   

  	
   

  
	
   

  	
  STEWART & STEVENSON SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Carl B. King

  	
   

  
	
   

  	
  Name:

  	
  Carl
  B. King

  	
   

  
	
   

  	
  Title:

  	
  Senior
  Vice President, Secretary

  	
   

  
	
   

  	
   

  	
  and
  General Counsel

  	
   

  
							



 


13

















 


Schedules are
omitted in accordance with Item 601(b)(2) of Regulation S-K. Schedules
will be provided by the Company to the Securities Exchange Commission upon
request.