September 12, 2010 David W. Couch Managing Director METRO Solutions Metropolitan Transit Authority of Harris County 1900 Main Street Post Office Box 61429 Houston, Texas 77208-1429 Re: Notice of Suspension of Work — Contract for Supply of Light Rail Vehicles for Metropolitan Transit Authority of Harris County, Texas (“METRO”) GRT Corridors Project, Contract No. CTO800138 (“VS Contract it Rail Vehicles for ETRO”) GRT and Notice of Suspension of Work ~ Contract for Supply of Li Metropolitan Transit Authority of Harris County, Texas (* Corridors Project. Contract No. CT0900044 Ladies and Gentlemen: We refer to the Notices of Suspension of Work dated September 8, 2010 (the “Notices”) and the contracts referred to above (the “Contracts”). We also refer to the Decision Letter of the Federal Transit Administration (the “FTA”) dated September 7, 2010 addressed to Paula J. Alexander of the Metropolitan Transit Authority of Harris County, Texas (“METRO”) and the related letter of the same date from Peter Rogoff of the FTA addressed to Messrs. Gareia and Greanias of METRO and FTA Report of Investigation dated September 3, 2010 (collectively, the “FTA Determination”), We acknowledge receipt of the Notices and are taking steps to abide by the Notices and the relevant terms of the Contracts with regard to such ordered suspensions. We of course strongly disagree with both METRO’s decision to issue the Notices and the FTA Determination. The FTA Determination is wrong as to the relevant facts and law, and we will be secking reconsideration of the FTA Determination. Our papers seeking such reconsideration will be filed promptly with the FTA. ‘The FTA Determination is not only wrong, it also is ill-advised. If upheld, and if METRO abides by the FTA Determination, it will result in Houston and its citizens bearing further delay hardship, frustration and additional cost in connection with METRO’s continuing efforts to provide first class light rail service to the Houston region.David W. Couch Page 2 September 12, 2010 Our goal is to be a valued partner with METRO, the FTA and the US Department of Transportation in the development of modern transit systems in Houston and elsewhere in compliance with applicable law, including the FTA’s Buy America requirements, and the directions of our customers and prospective customers in the procurement, bidding and contracting processes that govern such projects. For these reasons, and based on our continuing commitment to serve in the US transportation market, we have, among other things, invested in significant facilities and employment in the United States. We have acted in accordance with these principles in connection with the Contracts. We also strenuously avoid unnecessary disputes with persons such as the FTA and METRO, who we deem to be our partners. However, the effect of the Notices and the FTA Determination on CAF USA, Ine. and its employees in the United States is such that we have no choice to put METRO on notice that we will protect our rights under the Contracts and at law. Under the circumstances, it is apparent that METRO had no basis for either \g the Notices, nor does it have any basis for considering a termination of the Contracts, for default. As stated above, the FTA Determination is wrong as to both the faets and the law. As METRO is fully aware from its first-hand involvement throughout the process, CAF USA, Inc. is in compliance with applicable Buy America requirements. And it is important to note that even the FTA Determination makes it clear that during the bidding and negotiating process CAF USA, Inc. abided by the requests and instructions of METRO with regard to Buy America. Further, we and our subcontractors have relied ~ for more than a year and to our significant detriment — on the existence and validity of the Contracts in connection with our performance thereunder and other business decisions related to, among other things, managing capacity in our US facilities to perform under the Contracts rather than other assignments, Unless the Notices are promptly rescinded, CAF USA, Ine. will have no choice but to make claims for equitable adjustment and otherwise under the Contracts and applicable law to recover damages resulting from the issuance of the Notices. Of course, CAF USA, Inc. and its subcontractors will suffer far more extensive damages should the Contracts be terminated, and in that event CAF USA, Inc. will seck appropriate redress. For the reasons summarized above, the issuance of the Notices was, and any potential termination of the Contracts would be, for the convenience of METRO, giving rise to substantial claims by CAF USA, Inc. and its subcontractors. We hereby demand that METRO (1) immediately cure the wrongfill issuance of the Notices by rescinding them and (2) refrain from terminating the Contracts. As noted above, we are preparing filings with the FTA designed to ensure that the FTA Determination is reconsidered, and we urge METRO and other parties interested in this project and its prompt and cost-effective completion to join us in that effort. Given the many erroneous conclusions of fact and law reflected in the FTA Determination, we are confident that once FTA is more fully informed, it will be eager to ensure that there are no further delays to the implementation of the Contracts with the attendant increased costs and loss of jobs in Houston and elsewhere. The right result is for CAF USA, Inc. and METRO to abide by the Contracts so that CAF USA, Ine. may continue its manufacturing activities in the US, get the light railDavid W. Couch Page 3 September 12, 2010 vehicles we are manufacturing for METRO on the rails and start transporting people as soon as possible. We are ready to meet with you at your earliest convenience to discuss this matter and ensure that we can together deliver a light rail solution to the people of Houston, Very truly yours. HOUSTON LRV 100 LLC wan | wp Lau? Virginih Verde} CAF USA, Inc. Vice President - Sales and Secretary as Managing Member of Houston LRV 100 LLC ce: Bryan Pennington, Senior Vice President Engineering & Construction George Greanias, METRO, Acting President and CEO Paula J. Alexander, METRO, General Counsel Douglas P. Reehl, P.E., Parsons Transportation Group, Ine, Metropolitan Transit Authority of Harris County 1900 Main Street Post Office Box 61429 Houston, Texas 77208-1429