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EXHIBIT 10.03
FORM OF
AMENDED AND RESTATED
SHAREHOLDERS AGREEMENT
DATED AS OF
JUNE ___, 1996
AMONG
GRADALL INDUSTRIES, INC.,
MLGA FUND II, L.P., AND ITS AFFILIATES,
JACK D. RUTHERFORD,
DAVID T. SHELBY,
THE MANAGERS
AND
THE INSTITUTIONAL INVESTORS
2
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
1.1 Definitions..............................................................1
ARTICLE 2
IPO TRANSACTIONS
2.1 Selling Stockholders.....................................................3
2.2 Redemption of Preferred Shares...........................................4
2.3 Effective Date...........................................................4
2.4 Waiver...................................................................4
ARTICLE 3
RESTRICTIONS ON TRANSFER
3.1 General..................................................................4
3.2 Legend on Certificates...................................................4
3.3 Permitted Transferees....................................................5
ARTICLE 4
REGISTRATION RIGHTS
4.1 Demand Registration......................................................5
4.2 Incidental Registration..................................................7
4.3 Holdback Agreements......................................................8
4.4 Registration Procedures..................................................8
4.5 Indemnification by the Company..........................................10
4.6 Indemnification by Holders..............................................11
4.7 Conduct of Indemnification Proceedings..................................11
4.8 Contribution............................................................11
4.9 Participation in Public Offering........................................13
ARTICLE 5
CONFIDENTIALITY
5.1 Confidentiality.........................................................13
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ARTICLE 6
MISCELLANEOUS
6.1 Entire Agreement........................................................14
6.2 Binding Effect; Benefit.................................................14
6.3 Assignability...........................................................14
6.4 Information.............................................................14
6.5 Notices.................................................................14
6.6 Headings................................................................16
6.7 Counterparts............................................................16
6.8 Applicable Law..........................................................16
6.9 Specific Enforcement....................................................16
6.10 Consent to Jurisdiction................................................16
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FORM OF AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
This Amended and Restated Shareholders Agreement dated as of August
___, 1996, but effective on the "Effective Date" as defined in Section 2.3
hereof, among Gradall Industries, Inc., a Delaware corporation (the "Company"),
MLGA Fund II, L.P., a Delaware limited partnership ("MLGA") and its affiliates
whose names are set forth on the signature pages hereof (collectively the "MLGA
Entities"), Jack D. Rutherford and David T. Shelby (collectively, the "Minority
Shareholders"), and the managers of The Gradall Company whose names are set
forth on the signature pages hereof (individually, a "Manager" and collectively
the "Managers").
WITNESSETH:
WHEREAS, the MLGA Entities, the Minority Shareholders and the Managers
(the "Shareholders") are parties to a Shareholders Agreement dated as of October
13, 1995 (the "Shareholders Agreement") together with The Marlborough Capital
Investment Fund, L.P. and Mellon Ventures, Inc. (collectively the "Institutional
Investors");
WHEREAS, the Company is planning an initial underwritten public
offering of its Common Stock and in connection therewith the Company and the
Shareholders desire to amend and restate the Shareholders Agreement on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. The following terms, as used herein, have the
following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person, provided that no stockholder of the Company shall be deemed an
Affiliate of any other stockholder solely by reason of any investment in the
Company. For the purpose of this definition, the term "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Board" means the board of directors of the Company.
"Bylaws" means the bylaws of the Company, as amended from time to time.
"Common Stock" means the common stock, par value $.001 per share, of
the Company.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company, as amended from time to time.
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"Effective Date" means the date determined in accordance with the
provisions of Section 2.3 hereof.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Gradall" means The Gradall Company, an Ohio corporation.
"Initial Public Offering" or "IPO" means the first Public Offering of
the Company with respect to approximately 3,500,000 Shares, underwritten by the
Underwriters, as described in a Registration Statement on Form S-1 filed with
the SEC on June 25, 1996.
"Institutional Investors" has the meaning set forth in the recitals
hereto.
"Minority Shareholders" has the meaning set forth in the recitals
hereto and "Minority Shareholder" means any of the Minority Shareholders.
"MLGA Entities" means MLGA, any partner of MLGA, any Affiliate of MLGA
and any Affiliate of any partner of MLGA and "MLGA Entity" means any one of such
Persons.
"Permitted Transferee" means:
(a) in the case of any Minority Shareholder or Manager (i) a Person to
whom Shares are transferred from such Shareholder by will or the laws of descent
and distribution, (ii) the issue or spouse of such Shareholder, (iii) a trust
that is for the exclusive benefit of such Shareholder or such Shareholder's
Permitted Transferees under (i) and (ii) above; and
(b) in the case of MLGA or any MLGA Entity, any MLGA Entity.
"Person" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Preferred Shares" means at any time all shares of Series A Preferred
Stock, par value $.01 per share of the Company, held by the Minority
Shareholders or any of their Permitted Transferees at such time.
"Public Offering" means an underwritten public offering of Registrable
Stock of the Company pursuant to an effective registration statement under the
Securities Act.
"Recapitalization Agreement" means the Recapitalization Agreement dated
as of September 15, 1995 among the Company, MLGA and the Minority Shareholders.
"Registrable Stock" means any shares of Common Stock until (i) a
registration statement covering such shares of Common Stock has been declared
effective by the SEC and such shares have been disposed of pursuant to such
effective registration statement, (ii) such shares are freely transferable by
the holder thereof pursuant to Rule 144 (or any similar provisions then in
force) under the Securities Act are met or (iii) such shares are otherwise
transferred, the Company has
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delivered a new certificate or other evidence of ownership for such shares not
bearing the legend required pursuant to this Agreement and such shares may be
resold without subsequent registration under the Securities Act.
"Registration Expenses" means with respect to any Registrable Stock,
(i) all SEC registration and filing fees, (ii) fees and expenses of compliance
with state securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Shares), (iii) printing expenses, (iv) reasonable fees of counsel for the
Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters requested pursuant to Section
4.4(g) hereof), (v) the reasonable fees and expenses of one counsel (who shall
be reasonably acceptable to the Company) for all Shareholders participating in
the offering selected by the holders of a majority of Shares to be sold for the
account of all Shareholders participating in the offering, (vii) fees payable to
the National Association of Securities Dealers, Inc. and (viii) fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities; but shall not include any underwriting fees, discounts or
commissions attributable to the sale of Registrable Stock, or any out-of-pocket
expenses of the Shareholders (or the agents who manage their accounts) or any
fees and expenses of underwriter's counsel.
"Rule 144" means Rule 144 (or any successor provisions) under the
Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholder" means each Person (other than the Company) who shall be a
party to or bound by this Agreement, whether in connection with the execution
and delivery hereof as of the date hereof, pursuant to Section 6.3 or otherwise,
so long as such Person shall beneficially own any Shares.
"Shares" means at any time all shares of Common Stock held by the
Shareholders or any of their Permitted Transferees at such time.
"Transfer" has the meaning set forth in Section 3.1.
"Underwriters" means Dillon, Read & Co., Inc. and McDonald & Company
Securities, Inc.
ARTICLE 2
IPO TRANSACTIONS
2.1 Selling Stockholders. Each party identified on Exhibit A hereto (a)
shall sell that number of Shares as is set forth after such parties' name on
Exhibit A to the Underwriters on the basis provided in an underwriting agreement
to be entered into by and between the Company and the Underwriters in connection
with the IPO and (b) shall complete and execute all
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questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required in connection with the IPO.
2.2 Redemption of Preferred Shares. Upon the closing of the IPO, the
Company shall purchase all outstanding Preferred Shares at a per share purchase
price of $14,285.71 payable in cash. On or before the Effective Date, the
Minority Shareholders shall deliver to the Company the certificates representing
the Preferred Shares, together with executed stock powers transferring all
interest in the Preferred Shares to the Company, free and clear of all liens,
claims and encumbrances.
2.3 Effective Date. This Agreement shall become effective upon the
SEC's declaration of the effectiveness of the Registration Statement on Form S-1
filed with the SEC in connection with the IPO, (the "Effective Date"), provided
that the IPO is consummated in accordance with the terms and conditions of the
underwriting agreement by and between the Company and the Underwriters. If the
Registration Statement does not become effective or if the IPO is not
consummated by September 31, 1996, this Agreement shall be void and of no force
or effect, and the Shareholders Agreement shall remain in full force and effect,
without modification.
2.4 Waiver. Each of the Shareholders hereby waive any and all notices
required to be given by the Company under the terms of the Shareholders
Agreement in connection with the filing of the Registration Statement on Form
S-1 with the SEC and the IPO and, except as provided in Section 2.1 hereof,
waive any rights it may have to have Registrable Stock held by it included in
such Registration Statement.
SECTION 3
RESTRICTIONS ON TRANSFER
3.1 General. None of the Shareholders or their Permitted Transferees
will directly or indirectly, offer, sell, assign, transfer, grant a
participation in, pledge or otherwise dispose of ("transfer") any Shares, except
(i) in compliance with the Securities Act or (ii) pursuant to the exemption from
registration provided under Rule 144 under the Securities Act.
3.2 Legend on Certificates. (a) In addition to any other legend that
may be required, each certificate for Shares that is issued to any Shareholder
shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS AND MAY NOT BE OFFERED
OR SOLD EXCEPT IN COMPLIANCE THEREWITH."
(b) If any Shares shall cease to be Registrable Stock, the Company
shall, upon the written request of the holder thereof, issue to such holder a
new certificate evidencing such Shares without the legend required by Section
3.2(a) endorsed thereon.
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3.3 Permitted Transferees. Notwithstanding anything in this Agreement
to the contrary, each of the Shareholders may at any time transfer any or all of
its Securities to one or more of its Permitted Transferees without the consent
of the Board or any other Shareholder or group of Shareholders so long as (a)
such Permitted Transferee shall have agreed in writing to be bound by the terms
of this Agreement and (b) the transfer to such Permitted Transferee is not in
violation of applicable federal or state or foreign securities laws.
ARTICLE 4
REGISTRATION RIGHTS
4.1 Demand Registration. (a) The MLGA Entities holding a majority of
the total shares of Registrable Stock held by the MLGA Entities shall be
entitled to request the Company to register under the Securities Act, at any
time and from time to time, all or a portion of the Registrable Stock held by
any MLGA Entity substantially on the terms and conditions provided below, except
that Section 4.1(a)(x) and Section 4.1(a)(y) shall not apply. After the first
anniversary of the Effective Date, upon the written request of the Minority
Shareholders or their Permitted Transferees holding a majority of the total
shares of Registrable Stock held by the Minority Shareholders and their
Permitted Transferees (the parties making the request hereinafter referred to as
the "Selling Shareholders"), requesting that the Company effect the registration
under the Securities Act of all or a portion of such Registrable Stock, and
specifying the intended method of disposition thereof, the Company will promptly
give written notice of such requested registration to all other Shareholders at
least 30 days prior to the intended effectiveness of such registration
statement, and thereupon will use its best efforts to effect, as expeditiously
as possible, the registration under the Securities Act of:
(i) the Registrable Stock which the Company has been so
requested to register by the Selling Shareholders; and
(ii) all other Registrable Stock which the Company has been
requested to register by any other Shareholder or their Permitted
Transferees (together with the Selling Shareholders, the "Holders") by
written request received by the Company within fifteen (15) days after
the giving of such written notice by the Company (which request shall
specify the intended method of disposition of such Registrable Stock),
all to the extent necessary to permit the disposition (in accordance with the
intended method thereof as aforesaid) of the Registrable Stock so to be
registered; provided that
(x) the Company shall not be obligated to file a registration
statement relating to a registration request made by any Selling
Shareholders under this Section 4.1(a) within a period of six months
after the effective date of any other registration statement of Common
Stock other than any registration statement relating to Common Stock
issuable upon exercise of employee stock options or in connection with
any employee benefit or similar plan of the Company or in connection
with an acquisition by the Company of a business or assets,
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(y) subject to Section 4.1(f) hereof, the Company shall not be
obligated to effect more than one registration pursuant to a request by
the Minority Shareholders and their Permitted Transferees under this
Section 4.1.
Promptly after the expiration of the fifteen (15) day period referred to in
Section 4.1(a)(ii) hereof, the Company will notify all the Holders to be
included in the registration of the other Holders and the number of shares of
Registrable Stock requested to be included therein. The Selling Shareholders
requesting a registration under this Section 4.1(a) may, at any time prior to
the effective date of the registration statement relating to such registration,
revoke such request, without liability (except as set forth in Section 4.1(b)
hereof) to any of the other Holders or the Company, by providing a written
notice to the Company revoking such request, but, if such revocation occurs
after the registration statement is filed with the SEC, the Company shall be
deemed to have effected one registration pursuant to the request of such Selling
Shareholder for the purpose of satisfying its obligation under clause (y) above.
Notwithstanding anything contained in this Agreement to the contrary, nothing
herein shall be construed as requiring the Company to register any of its
securities other than shares of Registrable Stock.
(b) Except as otherwise provided, the Company will pay all Registration
Expenses in connection with any registration which is requested pursuant to this
Section 4.1. The Company shall not be liable for Registration Expenses in
connection with a registration that shall not have become effective due to a
revocation by the Selling Shareholders requesting such registration under this
Section 4.1. In such event, the obligation to pay the Registration Expenses in
connection with such revoked registration shall be due and payable by the
Selling Shareholders.
(c) Except as otherwise indicated herein, a registration requested
pursuant to this Section 4.1 shall not be deemed to have been effected unless
the registration statement relating thereto (i) has become effective under the
Securities Act and (ii) has remained effective for a period of at least 90 days
in the aggregate (or such shorter period in which all Registrable Stock of the
Holders included in such registration have actually been sold thereunder);
provided that if after any registration statement requested pursuant to this
Section 4.1 becomes effective (i) such registration statement is interfered with
by any stop order, injunction or other order or requirement of the SEC or other
governmental agency or court primarily due to the actions or omissions to act of
the Company and (ii) less than 75% of the Registrable Stock included in such
registration has been sold thereunder, such registration statement shall be at
the sole expense of the Company and shall not be considered a registration
requested pursuant to Section 4.1 hereof.
(d) If any requested registration pursuant to this Section 4.1 is in
the form of a Public Offering, the Board shall have the right, subject to the
approval of MLGA, which approval shall not be unreasonably withheld, to select
their manager or co-managers that will administer the offering. The Company may
require the offering pursuant to such Demand Registration to be in the form of a
firm commitment underwritten offering. In that event, all Registrable Stock to
be registered shall be registered for sale only in such underwritten offering.
(e) If a requested registration pursuant to this Section 4.1 involves a
Public Offering and the managing underwriter shall advise the Company that, in
its view, (i) the number of shares of Common Stock requested to be included in
such registration (including any Common
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Stock which the Company requests to be included), exceeds the largest number of
shares of Common Stock and/or the largest number of Shares owned by
Shareholders, as the case may be, which can be sold without having an adverse
effect on such offering, including the price at which such shares can be sold
(the "Maximum Offering Size"), the Company will include in such registration, in
the priority listed below, up to the Maximum Offering Size:
(i) first, all shares of Registrable Stock requested to be
included in such registration by any Holder or otherwise proposed to be
included in such registration (allocated, if necessary for the offering
not to exceed the Maximum Offering Size, among such Holders in the
proportion (expressed as a percentage) that such Holder's ownership of
Shares bears to all outstanding Shares owned by all Holders who desire
to participate in such registration; and
(ii) second, all shares of Common Stock proposed to be
registered by the Company.
(f) If Registrable Stock representing at least 50% of the number of
shares of Common Stock requested to be registered by the Selling Shareholders is
not included in any registration requested pursuant to Section 4.1(a), then the
Selling Shareholders shall be granted one additional registration under Section
4.1(a).
4.2 Incidental Registration. If the Company proposes to register any
shares of its Common Stock under the Securities Act for its own account (other
than a registration (A) on Form S-8 or S-4 or any successor or similar forms,
(B) relating to Common Stock issuable upon exercise of employee stock options or
in connection with any employee benefit or similar plan of the Company, (C) in
connection with a direct or indirect acquisition by the Company of a business or
assets or (D) pursuant to a registration under Section 4.1 hereof) in a manner
which would permit registration of Registrable Stock for sale to the public
under the Securities Act, it will each such time, subject to the provisions of
Section 4.2(b) hereof, give prompt written notice to the Shareholders of its
intention to do so and of such Shareholders' rights under this Section 4.2, at
least 20 days prior to the anticipated filing date of the registration statement
relating to such registration. Any such notice shall offer each Shareholder the
opportunity to include in such registration statement such number of shares of
Registrable Stock as each such Shareholder may request (an "Incidental
Registration"). Upon the written request of any such Shareholder made within ten
(10) days after the receipt of notice from the Company (which request shall
specify the number of shares of Registrable Stock intended to be disposed of by
such Shareholder), the Company will use its best efforts to effect the
registration under the Securities Act of all Registrable Stock Act which the
Company has been so requested to register by the Shareholders; provided that (i)
if such registration involves a Public Offering, all Shareholders requesting to
be included in the Company's registration must sell their Registrable Stock to
the underwriters selected by the Company on the same terms and conditions as
apply to the Company (or other party requesting the registration) and (ii) if,
at any time after giving written notice of its intention to register any stock
pursuant to this Section 4.2(a) and prior to the effective date of the
registration statement filed in connection with such registration, it shall be
determined for any reason not to register such stock, the Company shall give
written notice to all Shareholders and, thereupon, shall be relieved of its
obligation to register any Registrable Stock in connection with such
registration. No registration effected under this Section 4.2 shall
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relieve the Company of its obligations to effect a registration upon request to
the extent required by Section 4.1 hereof. The Company will pay all Registration
Expenses in connection with each registration of Registrable Stock requested
pursuant to this Section 4.2.
(b) If a registration pursuant to this Section 4.2 involves a Public
Offering and the managing underwriter advises the Company that, in its view, the
number of shares of Common Stock intended to be included in such registration
exceeds the Maximum Offering Size, the Company will include in such
registration, in the following priority, up to the Maximum Offering Size:
(i) first, all shares of Common Stock proposed to be
registered by the Company; and
(ii) second, all shares of Registrable Stock requested to be
included in such registration by any Shareholder (allocated, if
necessary for the offering not to exceed the Maximum Offering Size,
among such Shareholders in the proportion (expressed as a percentage)
that such Shareholder's ownership of Shares bears to all outstanding
Shares owned by such Shareholders at such time).
4.3 Holdback Agreements. If any registration of Registrable Stock shall
be in connection with a Public Offering, each Shareholder agrees not to effect
any public sale or distribution, including any sale pursuant to Rule 144, or any
successor provision, under the Securities Act, of any Registrable Stock, and not
to effect any such public sale or distribution of any other Common Stock of the
Company or of any stock convertible into or exchangeable or exercisable for any
Common Stock of the Company (in each case, other than as part of such Public
Offering) during the fourteen (14) days prior to, an during the 180 day period
(or such shorter period as requested by any underwriter) which begins on the
effective date of such registration statement (except as part of such
registration), provided that each Shareholder has received written notice of
such registration at least two business days prior to the anticipated beginning
of the fourteen-day period referred to above.
4.4 Registration Procedures. Whenever any shares of Registrable Stock
are requested to be registered pursuant to Section 4.1 or 4.2 hereof, the
Company will, subject to the provisions of such Sections, use its best efforts
to effect the registration and the sale of such Registrable Stock in accordance
with the intended method of disposition thereof as quickly as practicable, and
in connection with any such request:
(a) The Company will as expeditiously as possible prepare and
file with the SEC a registration statement on any form for which the Company
then qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of the Registrable Stock to be registered
thereunder in accordance with the intended method of distribution thereof, and
use its best efforts to cause such registration statement to become and remain
effective for a period of not less than 90 days.
(b) The Company will, if requested, prior to filing a
registration statement or prospectus or any amendment or supplement thereto,
furnish to each Holder and each underwriter, if any, of the Registrable Stock
covered by such registration statement copies of
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such registration statement as proposed to be filed, and thereafter the Company
will furnish to such Holder and underwriter, if any, such number of copies of
such registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference therein),
the prospectus included in such registration statement (including each
preliminary prospectus and such other documents as such Holder or underwriter
may reasonably request in order to facilitate the disposition of the Registrable
Stock owned by such Holder.
(c) After the filing of the registration statement, the
Company will promptly notify each Holder of any stop order issued or threatened
by the SEC and take all reasonable actions required to prevent the entry of such
stop order or to remove it if entered.
(d) The Company will use its best efforts to (i) register or
qualify the Registrable Stock under such other securities or blue sky laws of
such jurisdictions in the United States as any Holder reasonably (in light of
such Holder's intended plan of distribution) requests and (ii) cause such
Registrable Stock to be registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition of the Registrable Stock owned by such Holder' provided that the
Company will not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (d), (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction.
(e) The Company will immediately notify each Holder, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Stock, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and promptly prepare and make available to each Holder any such supplement or
amendment.
(f) The Board may select, subject to the approval of MLGA,
which approval shall not be unreasonably withheld, such underwriter or
underwriters as it may deem appropriate. The Company will enter into customary
agreements (including an underwriting agreement in customary form) and take such
other actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Stock.
(g) The Company will furnish to each Holder and to each
underwriter, if any, a signed counterpart, addressed to such underwriter, of (i)
an opinion or opinions of counsel to the Company and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as a majority of the Holders or
the managing underwriter therefor reasonably requests.
(h) The Company will otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC, and make available to its
security holders, as soon
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as reasonably practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act.
The Company may require each Holder to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required in connection with such
registration.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 4.4(e)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4.4(e) hereof, and, if so directed by
the Company, such Holder will deliver to the Company all copies, other than any
permanent file copies then in such Holder's possession, of the most recent
prospectus covering such Registrable Stock at the time of receipt of such
notice. In the event that the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective by the number of days during the period from and including the date of
the giving of notice pursuant to Section 4.4(e) hereof to the date when the
Company shall make available to the Holders a prospectus supplemented or amended
to conform with the requirements of Section 4.4(e) hereof.
4.5 Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder holding Registrable Stock covered by a registration
statement, its officers, directors and agents, and each person, if any, who
controls such Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Stock (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished in writing
to the Company by such Holder or on such Holder's behalf expressly for use
therein; provided that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, or in
any prospectus, as the case may be, the indemnity agreement contained in this
paragraph shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a current copy of the
prospectus, as amended or supplemented, was not sent or given to the person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable Stock to such person if it
is determined that the Company has provided such prospectus and such prospectus
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. The Company also agrees to indemnify any underwriters of the
Registrable Stock, their officers and directors and each person who controls
such underwriters on substantially the same basis as that of the indemnification
of the Holders provided in this Section 4.5.
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4.6 Indemnification by Holders. Each Holder holding Registrable Stock
included in any registration statement agrees, severally but not jointly, to
indemnify and hold harmless the Company, its officers, directors and agents and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to such Holder, but only with
respect to information furnished in writing by such Holder or on such Holder's
behalf expressly for use in any registration statement or prospectus relating to
the Registrable Stock, or any amendment or supplement thereto, or any
preliminary prospectus. Each such Holder also agrees to indemnify and hold
harmless the underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 4.6. As a condition to including Registrable Stock in any registration
statement filed in accordance with Article 4 hereof, the Company may require
that it shall have received an undertaking reasonably satisfactory to it from
any underwriter to indemnify and hold it harmless to the extent customarily
provided by underwriters with respect to similar securities.
4.7 Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sough pursuant to
Article 4, such person (an "Indemnified Party") shall promptly notify the person
against whom such indemnity may be sought (the "Indemnifying Party") in writing
and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party;
provided that the failure of any Indemnified Party so to notify the Indemnifying
Party shall not relieve the Indemnifying Party of its obligations hereunder
except to the extent that the Indemnifying Party is materially prejudiced by
such failure to notify. In any such proceeding, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (ii) in the reasonable judgment of such counsel representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Parties, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Indemnified Parties, such firm shall be designated in
writing by the Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability arising out of such proceeding.
4.8 Contribution. If the indemnification provided for in this Article 4
is unavailable to the Indemnified Parties in respect of any losses, claims,
damages or liabilities referred to
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herein, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (i)
as between the Company and the Holders holding Registrable Stock covered by a
registration statement on the one hand and the underwriters on the other, in
such proportion as is appropriate to reflect the relative benefits received by
the Company and such Holder on the one hand and the underwriters on the other,
from the offering of the Registrable Securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits but also the relative fault of the Company and such
Holders on the one hand and of the underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and (ii) as
between the Company on the one hand and each such Holder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
each such Holder in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and such Holders on the one hand and the underwriters on the other shall
be deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and the Holders bear to the total underwriting discounts
and commissions received by the underwriters, in each case as set forth in the
table on the cover page of the prospectus. The relative fault of the Company and
the Holders on the one hand and of the underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and the Holders
or by the underwriters and such parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The relative fault of the Company on the one hand and of each Holder on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4.8 were determined by pro
rata allocation (even if the underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.8, no Holder shall be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities of such Holder were offered to the public
exceeds the amount of any damages which such Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Each Holder's obligation to contribute pursuant to this
Section 4.8 is several in the proportion that the proceeds of the
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offering received by such Holder bears to the total proceeds of the offering
received by all the Holders and not joint.
4.9 Participation in Public Offering. No person may participate in any
Public Offering hereunder unless such person (a) agrees to sell such person's
securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and these Registration Rights.
ARTICLE 5
CONFIDENTIALITY
5.1 Confidentiality. (a) Each Shareholder agrees that it will use
Confidential Information only in connection with its investment in the Company
and not in any way to the competitive disadvantage of the Company. Each
Shareholder further acknowledges and agrees that he or it will not disclose any
Confidential Information to any Person; provided that Confidential Information
may be disclosed (i) to such Shareholder's Representatives (as defined below)
only in connection with advising the Shareholders in connection with its
investment in the Company, (ii) to the extent required by applicable law, rule
or regulation (including complying with any oral or written questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process to which a Shareholder is subject),
(iii) to any Person to whom such Shareholder is contemplating a transfer of his
or its Shares, provided that such transfer would not be in violation of the
provisions of this Agreement and as long as such Person is advised of the
confidential nature of such information and agrees to be bound by a
confidentiality agreement in form and substance satisfactory to the Company.
Nothing contained herein shall prevent the use of Confidential Information in
connection with the assertion or defense of any claim by or against the Company
or any Shareholder.
(b) "Confidential Information" means any information
concerning the Company, its financial condition, business, operations or
prospects in the possession of or to be furnished to any Shareholder; provided
that the term "Confidential Information" does not include information which (i)
was or becomes generally available publicly other than as a result of a
disclosure by a Shareholder or his or its partners, directors, officers,
employees, agents, counsel, investment advisers or representatives (all such
persons being collectively referred to as "Representatives") in violation of the
Recapitalization Agreement, this Agreement or any confidentiality agreement
executed in accordance herewith or (ii) becomes available to a Shareholder on a
nonconfidential basis from a source other than the Company, any regulatory
entity, or another Shareholder or his or its Representatives, provided that such
source is not, to the best of such Shareholder's knowledge, bound by a
confidentiality agreement with the Company or another Person.
(c) Each Shareholder agrees that money damages would not be a
sufficient remedy for any breach of this Section 5.1 by such Shareholder or any
of his or its Representatives and that, in addition to all other remedies which
may be available, the Company shall be entitled to specific performance and
injunctive or other equitable relief as a remedy for any such breach. It is
further understood and agreed that no failure or delay by the Company
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in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege.
ARTICLE 6
MISCELLANEOUS
6.1 Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto and supersedes all prior agreements and understandings,
oral and written, among the parties and hereto with respect to the subject
matter hereof.
6.2 Binding Effect; Benefit. Upon the occurrence of the Effective Date,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, successors, legal representatives and
permitted assigns. Nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties hereto, and their respective
heirs, successors, legal representatives and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
6.3 Assignability. This Agreement shall not be assignable by any party
hereto, except (i) this Agreement shall be binding upon and inure to the benefit
of all transferees that are Affiliates of MLGA and (ii) that any Person
acquiring Shares who is required by the terms of this Agreement to become a
party hereto shall execute and deliver to the Company an agreement to be bound
by this Agreement and shall thenceforth be a "Shareholder," and any Shareholder
who ceases to beneficially own any Shares or Preferred Shares shall cease to be
bound by the terms hereof.
6.4 Information. The Company shall provide each Shareholder with annual
audited and quarterly unaudited financial statements.
6.5 Notices. All notices and other communications given or made
pursuant hereto or pursuant to any other agreement among the parties, unless
otherwise specified, shall be in writing and shall be deemed to have been duly
given or made if sent by fax (with confirmation in writing), delivered
personally or sent by registered or certified mail (postage prepaid, return
receipt requested) to the parties at the fax number or address set forth below
or at such other addresses as shall be furnished by the parties by like notice,
and such notice or communication shall be deemed to have been given or made upon
receipt:
if to the Company:
Gradall Industries, Inc.
406 Mill Avenue S.W.
New Philadelphia, Ohio 44663
Attention: Barry Phillips
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if to an MLGA Entity:
c/o MLGA Fund II, L.P.
2 Greenwich Plaza
Greenwich, Connecticut 06830
Attention: Sangwoo Ahn
Fax: (203) 3554
with a copy to (such copy not to constitute notice):
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: William L. Rosoff
Fax: (212) 450-4800
if to the Minority Shareholders:
Jack D. Rutherford
11679 Briarwood Lane
Burr Ridge, Illinois 60525
and
David T. Shelby
559 Oak Street
Winnetka, Illinois 60093
Fax: (708) 441-8969
with a copy to (such copy not to constitute notice):
Laser, Pokorny, Schwartz, Friedman & Economos
205 N. Michigan Avenue
Suite 3800
Chicago, Illinois 60601
Attention: Bruce M. Friedman
Fax: (312) 540-0610
if to the Managers:
c/o The Gradall Company
406 Mill Avenue S.W.
New Philadelphia, Ohio 44663
Attention: Name of Manager
Any Person who becomes a Shareholder shall provide its address and fax
number to the Company, which shall promptly provide such information to each
other Shareholder.
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6.6 Headings. The headings contained in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
6.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
6.8 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SUCH STATE.
6.9 Specific Enforcement. Each party hereto acknowledges that the
remedies at law of the other parties for a breach or threatened breach of this
Agreement would be inadequate and, in recognition of this fact, any party to
this Agreement, without posting any bond, shall be entitled to obtain equitable
relief in the form of specific performance, a temporary restraining order, a
temporary or permanent injunction or any other equitable remedy which may then
be available.
6.10 Consent to Jurisdiction. Each party hereto irrevocably submits to
the non-exclusive jurisdiction of any State or Federal court sitting in Delaware
over any suit, action or proceeding arising out of or relating to this Agreement
and waives, to the fullest extent permitted by law, any objection it may now or
hereafter have to the laying of venue of any such suite, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in such a court has been brought in any inconvenient forum.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
GRADALL INDUSTRIES, INC.
By:_________________________________
Title:
MLGA FUND II, L.P.
By: MLGAL Partners, as General Partner
By:___________________________
Title:
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- ------------------------------------
Sangwoo Ahn
- ------------------------------------
Perry J. Lewis
- ------------------------------------
John A. Morgan
- ------------------------------------
William C. Ughetta, Jr.
- ------------------------------------
Ira Starr
- ------------------------------------
The Nippon Credit Bank, Inc.
MINORITY SHAREHOLDERS:
- ------------------------------------
Jack D. Rutherford
- ------------------------------------
David T. Shelby
MANAGERS:
- ------------------------------------
Barry L. Phillips
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- ------------------------------------
David S. Williams
- ------------------------------------
Bruce A. Jonker
- ------------------------------------
James C. Cahill
- ------------------------------------
Joseph H. Keller
- ------------------------------------
Ky Kuehling
- ------------------------------------
Michael Haberman
- ------------------------------------
Matthew Stear
- ------------------------------------
John Arnold
- ------------------------------------
Phillip Keller
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