Transition Supply Agreement

          This Transition Supply Agreement ("Agreement") is made and entered
into as of February 3, 2006, between JLG Industries, Inc., a Pennsylvania
corporation ("Buyer") and Alamo Group (OH) Inc., a Delaware corporation
("Seller").

RECITALS

Contemporaneous with the execution of this Agreement, an affiliate of Buyer
("Buyer's Affiliate") sold substantially all of its business to Seller,
including the manufacture and delivery of the Products. 

Buyer and Seller wish to enter into an agreement pursuant to which Buyer will
purchase from Seller certain of Buyer's requirements of those Products which are
manufactured by Seller. 

            Therefore, the parties agree as follows:

1.       SALE AND PURCHASE

1.1       Subject to the terms and conditions of this Agreement, Seller agrees
to sell to Buyer, and Buyer agrees to purchase from Seller, the Products, so
long as Seller remains consistent in quality and delivery, as Buyer and Buyer's
affiliate experienced prior to the date of this Agreement.  Product description,
specifications, price, quantity, term and other specifics agreed between the
parties regarding a particular product are to be provided in the "Product
Schedule" attached hereto as Exhibit A. The Products shall be branded solely by
JLG in its discretion without any branding of or reference to Seller. During the
term of this Agreement, Seller will provide said Products exclusively to Buyer,
and will make no attempt at offering said Products to other entities.

1.2       Seller and Buyer agree that as to each Product so designated on the
Product Schedule, this is a "sole source" contract until the earlier of (i) the
expiration or termination of this Agreement or (ii) Buyer's transition of such
Product to another supplier. In the event that any Product is transitioned to
another supplier, Seller will supply Products in respect of all open Purchase
Orders for such Product until the Product is moved to the new supplier.

1.3       Products may be added to the Product Schedule by agreement of the
parties. 

1.4       Products may be deleted from the Product Schedule by Buyer. 

1.5       Upon execution of this Agreement, Buyer shall provide Seller a means
to obtain a forecast (the "Forecast"). The Forecast is available via an Internet
portal. It will be the Seller's responsibility to retrieve the Forecast as
required. The Forecast shall specify a non-binding estimated amount of each
Product on the Product Schedule that Buyer anticipates purchasing during the
first 90 days of the term of this Agreement.  The form of Purchase Order to be
utilized by Buyer for all Products is attached as Exhibit B.  To the extent a
Purchase Order is inconsistent with the terms of this Agreement, the terms of
this Agreement shall control.  In addition, to assist Seller in planning, Buyer
shall provide Seller with a non-binding 52 week rolling forecast of anticipated
demand for each Product on the Product Schedule.  Forecasts shall continue to be
made available for each Product until the term of this Agreement is terminated
as to each Product. 

 

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1.6       Notwithstanding the terms of any Forecast, the parties agree that all
projections or commitments for Products (by part number) submitted by Buyer to
Seller shall be firm commitments when such commitments are 30 days or less from
scheduled delivery dates.  The parties further agree that projections or
commitments for Products (by part number) that are presented 31 to 60 days and
61 to 90 days from estimated delivery dates will become firm orders for such
Products (by part number) plus or minus 10% and 30%, respectively, for such
Products. 

2.       MINIMUM FINANCIAL OBLIGATION OF BUYER

2.1       As noted in the Recitals to this Agreement, this Agreement serves as a
transition between a buyer and a seller of an operating business.  Buyer needs a
source for the Products but wants flexibility as it considers transitioning to
other suppliers of such Products, and Seller has assumed a workforce predicated
on receiving a minimum number of orders for such Products from Buyer. 

2.2       In order to accommodate the intention of the parties reflected in
Section 2.l, subject to Section 2.5 below, during the six months following the
date of this Agreement, Buyer agrees that either through the purchase of
Products or direct payment to Seller in lieu of Product purchases, Buyer will
compensate Seller for the equivalent of 60,000 clock-hours of work (the
"Clock-hour Minimum").  Seller will track clock-hours of work in producing all
Products.  At the end of such 6-month period, the aggregate of all clock-hours
expended on Products bought by Buyer from Seller shall be subtracted from
60,000.  The positive difference, if any, shall be multiplied by $102.39 (being
110% of the agreed blended average fully burdened labor plus overhead hourly
rate of a Seller employee otherwise engaged in the manufacture of Products),
which, subject to dispute by Buyer as provided under this Section 2.2, shall be
the amount payable by Buyer to Seller (the "Make-up Payment").  Within 15 days
after the expiration of such six-month period, Seller shall provide Buyer with
its determination of the Make-up Payment, if any, at the expiration of such
six-month period, together with reasonable supporting documentation evidencing
Seller's calculation of the Make-up Payment.  If Buyer does not notify Seller of
its disagreement with Seller's calculation of the Make-up Payment within 15 days
following Buyer's receipt of such supporting documentation, Seller's
determination of the Make-up Payment shall be deemed final, conclusive and
binding on the parties, and shall be paid by Buyer to Seller within 30 days
after the expiration of such six-month period.  However, if Buyer disagrees with
Seller's calculation of the Make-up Payment, then Buyer shall inform Seller on
or before the last day of such 15-day period by delivering a written notice to
Seller ("Buyer's Objection") setting forth a specific description of the basis
of Buyer's Objection and the adjustments to the Make-up Payment that Buyer
believes should be made.  With Buyer's Objection, Buyer shall remit the
uncontested portion of the Make-up Payment to Seller.  Seller shall then have 10
days to review and respond to Buyer's Objection.  Seller and Buyer shall seek in
good faith to resolve in writing any differences that they may have with respect
to the matters specified in Buyer's Objection, and Seller shall have access to
documentation prepared by Buyer in connection with Buyer's preparation of
Buyer's Objection.

2.3       If Seller and Buyer are unable to resolve their disagreements with
respect to the determination of the Make-up Payment within 20 days following the
completion of Seller's review of Buyer's Objection, then either Seller or Buyer
shall have the right to refer the disagreement to the Independent Auditor
selected under the Asset Purchase Agreement executed by the parties and certain
of their respective affiliates on substantially even date herewith (the
"Purchase Agreement"), which Independent Auditor shall, acting as experts and
not as arbitrators, determine, with respect to the remaining disagreements so
submitted by Buyer to Seller, whether and to what extent, if any, Seller's
determination of the Make-up Payment requires adjustment.  The calculation of
the Make-up Payment by the Independent Auditor in accordance with this Section
2.3 shall be neither higher than the highest calculation of the Make-up Payment
nor lower than the lowest calculation of the Make-up Payment, in each case, that
is submitted by Buyer or Seller to the other in accordance with Section 2.2. 
Buyer and Seller shall direct the Independent Auditor to use its best efforts to
render its determination within 30 days.  The Independent Auditor's
determination shall be conclusive and binding upon Buyer and Seller.  Buyer and
Seller shall make readily available to the Independent Auditor all relevant
books and records and any work papers relating to each party's respective
determination of the Make-up Payment and all other items reasonably requested by
the Independent Auditor.  The fees and expenses of the Independent Auditor shall
be shared equally by Seller and Buyer.  Any amount of the Make-up Payment that
remains due and owing based on the conclusion of the Independent Auditor shall
be paid within five days after the parties receive the decision of the
Independent Auditor. 

 

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2.4       Upon the expiration or earlier termination of this Agreement, Buyer
shall (i) purchase all Products subject to outstanding Purchase Orders; (ii)
purchase, at Seller's cost (or book value, if lower), all applicable Tooling and
specialized machinery owned by Seller relating solely to the Products; and (iii)
pay to Seller the cost (or book value, if lower) of Seller's then-existing
inventory of finished goods, work in process, and raw materials specially
purchased by Seller for manufacture of the Products (for purposes of this
Section 2.4, collectively, "inventory") but not otherwise used in production of
Products; provided, that (A) Seller maintains its inventory consistent with the
past practices of Buyer's Affiliate and the Forecasts delivered to Seller under
Section 1.5; (B) such inventory is not otherwise usable by Seller in the
ordinary course of business; and (C) such inventory is new, current and usable
in its then-present condition by Buyer.  For avoidance of doubt, each of Buyer
and Seller hereby agrees that any inventory purchased by Seller from Buyer's
Affiliate under the Purchase Agreement shall be deemed new, current and usable
for purposes of clause (C) of the preceding sentence.  Buyer shall be
responsible for the cost of shipping such purchased inventory.

2.5       Notwithstanding anything to the contrary in this Agreement, in the
event of (i) a termination of this Agreement by Buyer pursuant to Section 8.3,
(ii) the failure of Seller to manufacture or supply Buyer with Products with
respect to which Buyer takes any action set forth in Section 7.1, or (iii) the
occurrence of any event described in Section 9.1 that prevents Seller from
manufacturing or supplying Products to Seller for a period of greater than 21
days, the Make-up Payment shall be adjusted as set forth in this Section 2.5.  

2.5.1    Buyer shall have no obligation to pay the Make-up Payment in the event
that this Agreement is terminated pursuant to Section 8.3 as a result of a
material breach by Seller.

2.5.2    To the extent that, pursuant to Section 7.1, Buyer manufactures
Products itself or contracts with Third Party Manufacturers to manufacture
Products, the Make-up Payment owed by Buyer to Seller under Section 2.2 shall be
reduced by the amount that Buyer would have paid Seller according to the pricing
reflected on Exhibit A had Buyer purchased such Products from Seller rather than
from the applicable Third Party Manufacturer.

2.5.3    In the event of Seller's failure to manufacture or supply to Buyer any
Products due to the occurrence of any event described in Section 9.1, the
Make-up Payment owed by Buyer to Seller under Section 2.2 shall be reduced
beginning with the 22nd day following the occurrence of such event by reducing
the Clock-hour Minimum on a pro rata basis, based on the number of days
beginning on such 22nd day and ending on the earlier of the date that Seller
notifies Buyer it is capable of manufacturing and supplying such Products for
Buyer or the date on which Buyer terminates this Agreement pursuant to Section
8.3.

 

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3.       DELIVERY INVOICING AND PAYMENT

3.1.      Seller will deliver the Products per Buyer's routing instructions. 
Terms of payment will be as specified on Exhibit A.  Each packing slip, bill of
lading and invoice will bear the applicable Purchase Order number, item number,
pattern number, and the location of the plant or other designation to which the
Products are to be shipped, all consistent with the past practices of Buyer's
Affiliate. Invoices must be submitted to the addresses set forth on the
individual Purchase Orders.  Buyer will pay from the invoice only. Each invoice
must reference the specific Purchase Order number.  Seller shall send Buyer an
invoice for the price of the Product after the Product is delivered to Buyer. 
Buyer shall pay each invoice pursuant to the payment terms reflected on Exhibit
A. 

3.2.      Buyer shall be entitled to set off amounts payable under any Purchase
Order against any and all indebtedness or liability of Seller to Buyer arising
under any other Purchase Order or otherwise under this Agreement.

4.       QUALITY CRITERIA:  WARRANTIES AND INDEMNIFICATIONS

4.1.      Seller must maintain quality and delivery standards consistent with
the quality and delivery standards existing prior to the date of this Agreement
between Buyer and Buyer's Affiliate.  

4.2.      Seller agrees that Products shall be composed only of originally
manufactured parts.  No remanufactured or used parts are permitted, unless
expressly authorized in writing by Buyer.

4.3.      The Warranty as to each Product is attached as Exhibit C. 
Notwithstanding the foregoing, Products included as the inventory or work in
process of Seller as of the date of this Agreement are deemed to comply with the
Warranty.   

4.4.      The Warranty may be revised and amended only with Seller's prior
written consent.

4.5.      Seller agrees to notify Buyer immediately in the event Seller becomes
aware that Seller may be incapable of delivering Products which conform to the
Warranty. 

4.6.      Seller agrees that Buyer will not be responsible for the inspection of
Products before assembly and/or resale to Buyer's customers and that all
warranties shall survive inspection, installation, assembly, acceptance and
payment by Buyer as provided in the Warranty. 

4.7.      Seller represents and warrants that, in the execution and performance
of this Agreement (i) it will comply with all applicable provisions of federal,
state and local laws, ordinances, rules, codes and regulations and (ii) upon
payment of the invoiced amounts, the Products are and will be free and clear of
all liens and encumbrances of any kind.

4.8.      Buyer may, during normal business hours, and upon reasonable notice,
make inspections, at such intervals as Buyer deems necessary, of the facilities
where Seller manufactures Products. Inspection will be made by Buyer, or an
approved Buyer representative. The Buyer's representative will be required to
adhere to Seller's confidentiality policy, including execution of Seller's form
of confidentiality agreement. 

 

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4.9.      Each party (as applicable, the "Indemnitor") agrees to defend,
indemnify and hold harmless the other party (as applicable, the "Indemnitee"),
its employees and agents against any and all liability, damages, loss, fines,
penalties or costs and expenses (including reasonable attorney's fees, expert
fees and court costs) of any nature arising out of or resulting from any
lawsuits, proceedings, actions, or claims relating to (i) Indemnitor's breach of
any covenant, obligation, representation or warranty hereunder or (ii) any
personal injury (including death) or property damage resulting solely from
Indemnitor's breach of or Indemnitor's performance or non-performance under this
Agreement (collectively, "Damages").  Indemnitee will have the right, not the
obligation, to participate, as it deems necessary, in the handling, adjustment
or defense of any such matter at its expense; provided that if Indemnitor fails
to assume its obligations under this Section 4.9, Indemnitee will have the
right, but not the obligation, to proceed on Indemnitee's behalf to defend
itself and to require from Indemnitor reimbursement and indemnification for any
and all costs and expenses in connection with such matter.

4.10.     Further, in the event Seller delivers defective or non-conforming
Products or otherwise breaches the terms of this Agreement or the Warranty,
Buyer may, at its election, (a) return the Products freight collect for full
credit for the purchase price, (b) purchase or manufacture similar items, (c)
accept or retain the Products and equitably reduce their price, (d) repair or
have the Products repaired, or (e) require Seller to promptly replace or correct
the Products.  Notwithstanding the terms of Sections 4.9 and 4.10, Seller shall
not be responsible for indirect or consequential damages, lost profits, or,
except as set forth in Section 7.1, damages associated with "cover" as
contemplated in the Uniform Commercial Code.   

4.11.    To the extent consistent with the practices between Buyer and Buyer's
Affiliate that previously provided the Products: (i) components received by
Buyer from Seller shall have an easily identifiable code or other suitable
tracking method showing, at a minimum, the month and year of manufacture and
serial number, and (ii) Seller agrees to identify by JLG Part Number (to the
extent possible and commercially practical), all Products in accordance with any
other identification specifications required by Buyer. In addition, Seller
agrees to identify work in progress related to the Products as well as the
finished Products as goods produced pursuant to this Agreement between Seller
and Buyer.

4.12.    Risk of Loss - Seller assumes the following risks: (a) all risks of
loss or damage to all Products, goods, work in process, materials and other
things at F.O.B. Seller's Plant (b) all risks of loss or damage to third persons
and their property at F.O.B. Seller's Plant; (c) all risks of loss or damage to
any property received by Seller from or held by Seller or its supplier for the
account of Buyer, F.O.B. Seller's Plant, and (d) all risks of loss or damage to
any of the Products or part thereof rejected by Buyer because such Products do
not conform to the Warranty.  Notwithstanding the foregoing, the risk of loss is
assumed by Buyer to the extent the loss or damage is due to actions or
activities of employees or representatives of Buyer or its Affiliates at
Seller's Plant.

4.13.    Feedback - Seller agrees that in the event Seller becomes aware of any
circumstance that would cause Seller to believe that any of its representations
and warranties provided herein are not correct, Seller will immediately inform
the Buyer in writing of the problem and the extent of such problem. 

 

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5.       PROPRIETARY RIGHTS AND CONFIDENTIAL INFORMATION

5.1.       [Intentionally left blank].

5.2.      All information including, but not limited to, information concerning
methodologies, records, documents, technical and non technical data, formulae,
patterns, programs, methods, techniques, processes, plans, drawings disclosed by
either party to the other which the disclosing party designates in writing as
"Confidential", "Proprietary" or "Secret" or which a reasonable person would
consider proprietary or confidential shall be deemed Confidential Information. 
Such designation, if applicable, may be made by an appropriate stamp or legend
on written disclosures or, if information is disclosed orally or otherwise made
available by non-written means, the disclosing party shall state at the time of
disclosure that such information is "Confidential", "Proprietary" or "Secret"
and shall thereafter, within thirty (30) days of such disclosure, confirm to the
receiving party in writing that the disclosing party considers the information
Confidential Information.

5.3.      Except as expressly provided otherwise herein, the receiving party
agrees that it shall not disclose to any third party, or use for itself (except
for the sole purpose of performing its obligations under this Agreement), or use
on behalf of any third party any Confidential Information without the prior
written consent of the disclosing party.  The foregoing restrictions shall not
apply to Confidential Information:

a)          which is in or enters the public domain through no fault of the
receiving party; or

b)         which was in the receiving party's possession prior to disclosure by
the disclosing party, as demonstrated by credible written evidence (and not
subject to written restrictions on use of such information); or

c)         which is disclosed to the receiving party by a third party not under
obligation to the disclosing party to hold the information in confidence; or

d)         which is independently developed by the receiving party, as
demonstrated by credible written evidence.

5.4.      Disclosures made under this Agreement shall not be deemed to be within
one of the foregoing exceptions merely because they are embraced by more general
information within the exception.  In addition, any combination of features
shall not be deemed to be within one of the foregoing exceptions merely because
individual features are within the exception, but only if the combination itself
is within the exception.

5.5.      Either party shall have the right to transmit information in its
possession in response to formal inquiries from the government or governmental
agencies or to an order from a court of competent jurisdiction.  A party that
has received Confidential Information disclosed hereunder will promptly notify
the disclosing party if the receiving party is requested or required to disclose
such Confidential Information.  The disclosing party may, at its sole cost and
expense, seek an appropriate court order to take other reasonable steps, with
regard to the government, government agency or court, as it deems appropriate
and necessary to maintain the confidentiality of such Confidential Information. 
If, in the absence of a protective order or other remedy, the receiving party is
compelled to disclose Confidential Information, the receiving party may, without
liability hereunder, disclose such Confidential Information. Confidential
Information disclosed hereunder may be introduced as evidence in any legal
proceedings, suits, or actions between Seller and Buyer, but only after Seller
or Buyer, as applicable, is afforded the opportunity to take reasonable steps,
such as seeking the entry of protective orders, to protect the confidentiality
of the Confidential Information in such proceedings, suits or actions.

 

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5.6.      Each party agrees that it will, upon demand or otherwise upon
termination of this Agreement, return all documents or other written material
and all copies thereof made by it which contain Confidential Information
disclosed to it by the other party.  In the event Confidential Information
disclosed by the other party has been incorporated by a party into other
documents which contain other information which such party considers proprietary
and/or confidential, the party shall certify the destruction of such documents
to the other party.  Notwithstanding the provisions of this section, each party
may keep in the files of its law department (or external legal counsel) one set
of all documents or other written material containing the Confidential
Information of the other party, provided that reasonable measures are taken to
limit access to such files, for the sole purpose of resolving future disputes
concerning this Agreement.

5.7.      Except as expressly provided herein, disclosures made under this
Agreement do not constitute or imply a license or other permission by either
party to the other to use or practice the Confidential Information, except for
the sole purpose of performing the obligations created under this Agreement.

5.8.      The parties acknowledge that Confidential Information disclosed
hereunder may include trade secrets.  The provisions of Sections 5.3, 5.4 and
5.5 of this Agreement shall survive and continue to apply such trade secrets for
as long as such Confidential Information remain a trade secret under applicable
law, notwithstanding the intervening termination, expiration or cancellation of
this Agreement.  The provisions of Sections 5.3, 5.4 and 5.5 of this Agreement
shall survive and continue to apply any other item of Confidential Information,
not deemed to be a trade secret, for a period of five (5) years after the date
of termination, expiration or cancellation of this Agreement.

5.9.       [Intentionally Omitted]

5.10.    The parties acknowledge that violation of the confidentiality
obligations herein will cause irreparable harm to the disclosing party and,
therefore, each party acknowledges that in the event of a breach or threatened
breach of this Section 5 by one party, without limiting any other remedies
provided hereunder or under applicable law, the other party may seek, without
bond, the imposition of a preliminary or permanent injunction against such
party.

6.       DESIGN CHANGES AND TOOLING

6.1.      [Intentionally Omitted]

6.2.      Any design or process changes by Buyer affecting the Products' Form,
Fit, or Function will be at the expense of Buyer, and Buyer will be responsible
for schedule delays and any increased Product costs as a direct result of any
such changes. 

6.3.      Samples, when required to prove an existing tool, tool transfer or
tool change, will be supplied at a reasonable production unit cost.

 

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6.4.      Any patterns, tooling, dies, molds, jigs and fixtures ("Tooling")
furnished to Seller by Buyer pursuant to this Agreement, or specifically paid
for by Buyer, shall be the property of Buyer and shall be returned to Buyer at
the expiration, cancellation or termination of this Agreement, shall be used
only lawfully and to supply Products to Buyer and held by Seller at its sole
risk, and shall otherwise be governed by the terms contained in Exhibit D
hereto. 

7.       CONTINUITY OF SUPPLY

7.1.      Should Seller fail to manufacture or supply any Product to be
delivered under an accepted Purchase Order at any time during the term of this
Agreement for any reason, then (a) after providing Seller with written notice of
such failure, and Seller's failure to cure such breach within 10 days
thereafter, Buyer may manufacture such Products itself or contract with one or
more replacement manufacturers ("Third Party Manufacturers") to manufacture such
Products, and (b) Seller shall promptly (but not later than 3 days after notice
of such decision is provided by Buyer) provide the Tooling, intellectual
property, licenses, designs, tools, materials layouts, masks, source code and
documentation necessary to enable Buyer or such Third Party Manufacturers to
manufacture and supply such Products.  The parties hereto recognize that the
pricing reflected on Exhibit A may reflect pricing below the price that Products
might be available from Third Party Manufacturers.  Thus, if Buyer is required
to "cover," damages will be limited to an amount not to exceed the price of any
such Product on Exhibit A. 

8.       CANCELLATION OR TERMINATION

8.1.      The term of this Agreement will commence on the date hereof and will
continue for six months from the date of this Agreement, unless terminated
earlier as provided in this Agreement or extended by mutual written agreement of
the parties.  Notwithstanding the foregoing, if Buyer submits a Purchase Order
for a Product and production or delivery of such Product will extend beyond the
term of this Agreement, Seller is under no obligation to accept such Purchase
Order, but Seller may accept such Purchase Order, in which case, this Agreement
shall be applicable to such Purchase Order.  Purchase Orders that effectively
extend the term of this Agreement for any Product shall not be counted or
credited in determining the Clock-hour Minimum; provided, however, that Buyer
shall have the right to change delivery for such Products to a date within the
term of this Agreement, and, to the extent such modification is accepted by
Seller, such Products shall be included in the determination of the Clock-hour
Minimum under Section 2. 

8.2.      [Intentionally omitted.]

8.3.      In addition to any rights or remedies Buyer may have under this
Agreement, in law or in equity, Buyer may terminate this Agreement:

8.3.1.   Notwithstanding any other provision herein, if Seller breaches this
Agreement in any regard, and fails to cure such breach within 30 days after
receipt of written notice from Seller detailing the breach.

8.3.2.   If a petition in bankruptcy is filed by or against Seller under any
section of the Bankruptcy Act, or Seller becomes insolvent, or makes any
assignment for the benefit of creditors or has a receiver appointed for it.

8.4.      In addition to any rights or remedies Seller may have under this
Agreement, in law or in equity, Seller may terminate this Agreement:

 

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8.4.1.   Immediately if Buyer breaches its financial obligations under this
Agreement. 

8.4.2.   If Buyer breaches this Agreement in any regard (other than for a
monetary default), and fails to cure such breach within 30 days after receipt of
written notice from Seller detailing the breach.

8.4.3.   If a petition in bankruptcy is filed by or against Buyer under any
section of the Bankruptcy Act, or Buyer becomes insolvent, or makes any
assignment for the benefit of creditors or has a receiver appointed for it. 

8.5.      Upon expiration, cancellation or termination of this Agreement the
following will occur:

8.5.1.   Seller will (a) immediately make available Buyer's property, including
any Tooling owned by Buyer, for Buyer or its representative to remove from
Seller's premises or (b) return to Buyer, at Buyer's expense, all Buyer's
property, including Tooling owned by Buyer, within sixty (60) days, unless
otherwise notified in writing by Buyer;

8.5.2.    Seller will discontinue all work under this Agreement, unless
otherwise directed by Buyer;

8.5.3.    Seller will take all reasonable actions necessary to protect Buyer's
property or any property in which Buyer has an interest;

8.5.4.    Buyer shall pay all outstanding invoices; and

8.5.5.    If this Agreement is terminated pursuant to Section 8.4, Buyer shall
pay the Make-up Payment to Seller.

9.       MISCELLANEOUS

9.1.      Neither party shall be liable for delays or failures in manufacturing
and/or shipping Products or the failure to perform any obligation hereunder,
when (and to the extent that) such delays or failures are not greater than 21
days in duration and are occasioned by war, labor actions, strikes, riots,
fires, flood, explosion, sabotage, action of any governmental authority or any
other cause beyond the reasonable control of the affected party.  The party
affected by any such event shall give prompt written notice to the other, such
notice to include a description of the applicable event, the date on which such
event occurred, and the anticipated period of delay or failure.    

9.2.      Unless otherwise expressly agreed to in writing by Buyer, Seller will
procure and maintain products liability insurance, with an insurer satisfactory
to Buyer, with limits not less than $1,000,000 per occurrence for property
damage, bodily injury or death to any number of persons, and other adequate
insurance, which will contain an endorsement by which insurer extends the
coverage thereunder to include the contractual liability of Seller arising by
reason of the indemnity provisions set forth in this Agreement.  A broad form
endorsement will be maintained in such insurance policy with Buyer as an
additional insured, requiring Seller's insurance to be the primary policy with
respect to any loss.  Seller agrees to provide Buyer with a copy of such
certificate of insurance evidencing compliance with this Agreement.  Seller and
its insurer will provide Buyer thirty (30) days prior written notice of
non-renewal, cancellation or other changes in Seller's coverage which may impair
Buyer's rights hereunder.  Additionally, Seller shall provide Buyer appropriate
waivers of subrogation from Seller's insurers consistent with the terms of this
Section 9.2.

 

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9.3.      Neither party's rights and obligations under this Agreement may be
assigned, delegated or transferred, by operation of law or otherwise, without
the prior written consent of the other party, which consent shall not be
unreasonably withheld.

9.4.      The responsibilities of the parties to each other set forth in
Sections 2, 4, 5, 6.4, 7, 8, and 9 will survive expiration, termination or
cancellation of this Agreement.

9.5.      This Agreement supersedes all previous agreements, and constitutes the
entire Agreement between the parties as to the production, purchase and sale of
Products, and all transactions between the parties with respect to Products will
be governed exclusively by this Agreement and Buyer's Purchase Orders as issued
from time to time.  It is the intention of the parties that the terms of this
Agreement, together with any Purchase Orders submitted by Buyer to Seller, will
be interpreted to be consistent with each other.  However, in the event of any
irreconcilable conflict of terms, the terms of this Agreement will prevail. 

9.6.      All communications and notices required to be given under this
Agreement will be made in writing and will be deemed to have been given when
personally delivered the next business day, sent by facsimile with return
confirmation of receipt, next business day after sent by overnight courier
service with signature verification, or three (3) business days after or when
deposited for mailing by first class registered or certified mail, return
receipt requested, with proper postage prepaid, the notice shall be addressed as
follows:

If to Seller         Alamo Group (OH) Inc.

Alamo Group (OH) Inc.

406 Mill Avenue, S.W.

New Philadelphia, Ohio 44663

Attn: Mike A. Haberman

 

with a copy to:

 

Alamo Group Inc.

1502 E. Walnut

Seguin, Texas 78155

Attn: Ronald A. Robinson, President & CEO

Facsimile: (830) 372-9683

 

                  If to Buyer:       JLG Industries, Inc.

                                    1 JLG Drive

                                    McConnellsburg, PA 17233-9533

                                    Attn: Peter Bonafede

                                    Facsimile: (240) 313-1807

                                    E-mail: pbonafede@jlg.com

Buyer or Seller may change their respective address provided above by following
the procedures of this Section.

9.7.      This Agreement does not create any agency, joint venture or
partnership between Seller and Buyer.  Neither party will impose or create any
obligation or responsibility, express or implied, or make any promises,
representations or warranties on behalf of the other party, other than as
expressly provided herein.

 

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9.8.      This Agreement and the exhibits and/or attachments hereto will be
governed by the laws of the State of Ohio, and the parties to this Agreement
agree that any litigation arising out of the matters set forth above will be
litigated in the State or Federal courts of the State of Ohio.

9.9.      This Agreement may be executed in two or more counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but such
counterparts together shall constitute but one agreement.  Delivery of an
executed counterpart of a signature page of this Agreement by facsimile or other
electronic transmission shall be effective as delivery of a manually executed
original counterpart of this Agreement.

[Signatures Follow]

 

 

 

 

 

 

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

SELLER:

ALAMO GROUP (OH) INC.

By:  ___________________________

       Ronald A. Robinson, President

 

 

BUYER:

JLG INDUSTRIES, INC.

By:  ___________________________

       Thomas D. Singer, Senior Vice President
and General Counsel

 

 

 

Signature Page to Transition Supply Agreement

 

 

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Exhibit A

Product Schedule

Product

Pricing

Category A Telescopic Material Handler Components - Major Weldments

The sum of Seller's (i) material costs (without markup or premium) plus (ii)
fully burdened labor and overhead costs multiplied by 110% during the Term.

Category B Telescopic Material Handler Components - Detail Components

The sum of Seller's (i) material costs (without markup or premium) plus (ii)
fully burdened labor and overhead costs multiplied by 110% during the Term.

Category C Telescopic Material Handler Components - Outsource Ready Detail
Components

The sum of Seller's (i) material costs (without markup or premium) plus (ii)
fully burdened labor and overhead costs multiplied by 105% during the Term.

Category D JLG 600SC Boom Lift Chassis

The sum of Seller's (i) material costs (without markup or premium) plus (ii)
fully burdened labor and overhead costs multiplied by 105% during the Term.

Payment Terms:

Payment will be made 30 days from the date of invoice by wire transfer as
instructed by Seller in writing. 

Repricing: 

Notwithstanding the pricing reflected above, within three months from the date
of this Agreement, Seller shall provide Buyer with pricing information on
designated Products for consideration and agreement if manufacturing of such
Products is to continue pursuant to this Agreement or a successor agreement.

Term:

The term of this Agreement shall be six months from February 4, 2006. 

 

 

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Exhibit B - Purchase Order

 

[See attached]

 

 

 

 

 

 

 

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Exhibit C -The Warranty

Limited Warranty

            This Limited Warranty supplements the terms of that certain
Transition Supply Agreement, dated February 3, 2006 (the "Agreement"), by and
between JLG Industries, Inc. ("Buyer") and Alamo Group (OH) Inc. ("Seller").

            Seller warrants to Buyer as follows:

            1.         All Products sold under the Agreement will be
manufactured pursuant to drawings and specifications provided by Buyer to
Seller. 

            2.         The Products manufactured by Seller under this Agreement
will be free from defects in material and workmanship at the time of delivery. 

            In the event Seller breaches the terms of this Warranty, Buyer's
sole remedies are set forth in Section 4.10 of the Agreement.  As to any
Product, this Warranty shall expire one year after such Product is delivered to
Buyer. 

            EXCEPT AS HEREIN PROVIDED, SELLER HAS NOT MADE AND MAKES NO WARRANTY
OR REPRESENTATION OF ANY KIND, DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PRODUCTS, INCLUDING (WITHOUT LIMITATION) AS TO THEIR DESIGN OR
SPECIFICATIONS, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE.  IN NO
EVENT SHALL SELLER BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES
OR LOST PROFITS RELATING TO THE PRODUCTS.    

 

 

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Exhibit D - Tooling

1.   Buyer may elect to purchase from Seller required Tooling and or capital
equipment. The total purchase price and delivery will be negotiated between
Buyer and Seller.

2.   Buyer may elect to provide to Seller the Tooling and/or capital equipment
for the Products involved.

3.   Seller shall in order to maximize life of the Tooling and/or capital
equipment, provided by Buyer to Seller, utilize said Tooling and/or capital
equipment exclusively for the Products.  Exceptions to be approved by Buyer in
writing prior to the exception being implemented.

4.   Seller is responsible for all maintenance of Tooling and/or capital
equipment.  Buyer will pay for any Tooling charges related to component design
changes initiated by Buyer or its customers (with the prior written consent of
Buyer). Payment of any Tooling and/or capital equipment charges related to
component design changes initiated by Seller to achieve cost reduction or
improve productivity will be negotiated on an individual basis prior to any
Tooling and or capital equipment modifications.  Seller's reimbursement of the
cost for replacement tooling necessitated by the Tooling reaching or exceeding
its useful life will be negotiated on an individual basis prior to any
replacement work beginning and will be dependent on future component
requirements, program longevity, or any other relative circumstances Buyer and
Seller deem relevant.  Seller will not be authorized to make any Tooling
modifications without the advanced written approval of the Buyer. 

5.   Seller will properly maintain, house, care for, repair or if necessary
replace any Tooling, and will bear the risk of loss or damage, including normal
wear and tear for such Tooling.  Seller will, at Buyer's expense, maintain,
house, care for, and repair Tooling provided by Buyer.  With regard to such
Tooling, Buyer bears the risk of loss or damage, including normal wear and
tear.  If such Tooling needs to be replaced, replacement shall be arranged and
funded by Buyer.  Seller hereby acknowledges that compliance with this provision
or any other provision, hereof, will in no way give Seller any rights, interest
or claims of any nature whatsoever to the Tooling and /or capital equipment
provided by Buyer. The Tooling and/or capital equipment provided by Buyer will
be marked "Property of  JLG Industries, Inc." by Seller and will be painted an
identifying color specified by Buyer, will not be mixed with the property of
Seller or with that of a third person and will not be moved from Seller's
premises without Buyer's approval.  Seller will, upon Buyer's request,
immediately deliver Buyer's Tooling and/or capital equipment properly packed and
marked in accordance with the requirements of the carrier selected by Buyer to
transport such property, to Buyer either (a) F.O.B. trucks at Seller's plant, or
(b) upon request of Buyer, at any other location designated by Buyer, in which
event Buyer will pay to Seller the cost of delivering such Tooling and/or
capital equipment to such other location.   Buyer shall have the right to enter
onto Seller's premises at all reasonable times to inspect such Tooling and/or
capital equipment and Seller's records with respect thereto or to take
possession of and remove Buyer's Tooling and/or capital equipment.

6.   Seller will not modify, lend, transfer, scrap, sell or otherwise dispose of
Buyer's Tooling and/or capital equipment without the prior written consent of
Buyer. Further, Seller shall keep Buyer's Tooling free and clear of any security
interests, liens, claims, pledges, mortgages and encumbrances of any kind of any
third party to this Agreement.

 

 

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7.   Seller when requested by Buyer will transfer / ship Buyer's Tooling and/or
capital equipment to another location as directed by the Buyer within five (5)
days of being notified unless there are open Purchase Order requirements.  In
such event, as may be directed by the Buyer, Seller will ship said Tooling
and/or capital equipment within five (5) days after the Products have shipped. 
In the event that Buyer elects to cancel open Purchase Orders, shipment will be
made within five (5) days after agreement is reached between Buyer and Seller. 
Buyer's expenses of shipment of such Tooling and/or capital equipment will be
limited to actual packaging and shipment costs.

8.   Any patterns, dies, molds, jigs and fixtures furnished to Seller by Buyer
pursuant to this Agreement, or specifically paid for by Buyer, shall be the
property of Buyer and shall subject to removal by Buyer at the expiration,
cancellation or termination of this Agreement, and shall be used only to supply
Products to Buyer and held by Seller at its sole risk.