Exhibition 10.3
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the “Agreement”) is made effective as of
November 1, 2005 (the “Effective Date”) by and between A.S.V., Inc., a Minnesota
corporation (“ASV”), and Caterpillar Inc., a Delaware corporation
(“Caterpillar”). ASV and Caterpillar are sometime referred to herein
collectively as the “parties” and individually as a “party.”
Recitals

  A.   Since 1998, ASV has issued to Caterpillar the Shares (as defined below).
    B.   Simultaneous to executing this Agreement, the parties are executing a
Purchase Agreement under which ASV will supply undercarriages to Caterpillar
(the “Purchase Agreement”).

In consideration of the Purchase Agreement, the promises contained therein and
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree hereto as
follows:
SECTION 1. GENERAL
1.1 Definitions. As used in this Agreement the following terms shall have the
following respective meanings:

  (a)   “Affiliate” shall mean any person or entity controlling, controlled by
or under common control with another entity or person. For the purposes of this
definition, “control” shall have the meaning presently specified for that word
in Rule 405 promulgated by the SEC under the Securities Act.     (b)   “Board”
means the board of directors of ASV.     (c)   “Common Stock” means ASV’s common
stock, $.01 par value per share.     (d)   “Exchange Act” means the Securities
Exchange Act of 1934, as amended.     (e)   “Form S-3” means such form under the
Securities Act as in effect on the date hereof or any successor or similar
registration form under the Securities Act subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by reference to
other documents filed by ASV with the SEC.     (f)   “Person” means an
individual, corporation, partnership, limited liability company, limited
liability partnership, syndicate, person, trust, association, organization or
other entity, including any governmental authority, and including any successor,
by merger or otherwise, of any of the foregoing.     (g)   “Register,”
“registered,” and “registration” refer to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act, and
the declaration or ordering of effectiveness of such registration statement or
document.     (h)   “Registrable Securities” means (1) the Shares and (2) any
Common Stock issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is

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      issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Shares; provided, however, that
Registrable Securities shall not include any shares which have been distributed
or sold to the public pursuant to an offering registered under an effective
registration statement under the Securities Act or which Caterpillar has sold
pursuant to SEC Rule 144 or any similar or analogous rule promulgated under the
Securities Act.     (i)   “Registration Expenses” means all expenses incurred by
ASV in complying with Sections 2.1, 2.3 and 2.5 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
fees and disbursements of counsel for ASV, underwriters (excluding discounts and
commissions), other reasonable fees and disbursements, blue sky fees and
expenses and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of ASV
which shall be paid in any event by ASV), and, with respect to a registration
pursuant to Section 2.2, the increase in the SEC filing fees based upon the
number of Registrable Securities being registered.     (j)   “Registration
Request” means a written request by Caterpillar that ASV register the
Registrable Securities under the Securities Act pursuant to the applicable
registration statement under Section 2, which request in no event may be made
prior to the earlier of (i) April 1, 2008 and (ii) the date of expiration or
termination of the Purchase Agreement.     (k)   “SEC” or “Commission” means the
U.S. Securities and Exchange Commission.     (l)   “Securities Act” means the
Securities Act of 1933, as amended.     (m)   “Shares” means 6,080,138 shares of
Common Stock held by Caterpillar and/or its permitted assigns as of the
Effective Date.     (n)   “Special Registration Statement” means a registration
statement relating to (i) any employee benefit plan or (ii) with respect to any
corporate reorganization or other transaction under Rule 145 of the Securities
Act.     (o)   “Subsidiary” means any corporation more than 50% of whose
outstanding voting stock shall at the time be owned directly or indirectly by
ASV or by one or more Subsidiaries or by ASV and one or more Subsidiaries.

SECTION 2. REGISTRATION
2.1 Demand Registration.

  (a)   ASV shall register the Shares requested in Caterpillar’s Registration
Request pursuant to a registration statement filed under the Securities Act
within 45 days following the date of such Registration Request.     (b)  
Notwithstanding the foregoing, ASV shall not be obligated to take any action to
effect or complete (i) more than three registration statements pursuant to this
Section 2.1, (ii) any registration statement pursuant to this Section 2.1 if the
resale of the Shares to be covered by the required registration statement could
be registered on Form S-3 or (iii) if ASV shall furnish to Caterpillar a
certificate signed by the Chief Executive Officer of ASV stating that in the
good faith judgment of the Board it would be materially detrimental to

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      ASV or its shareholders for a registration statement to be filed in the
near future, in which case ASV’s obligation to register Shares under this
Section 2.1 shall be deferred for a period not to exceed 60 days from the date
of receipt of the Registration Request from Caterpillar, provided that ASV may
not exercise this deferral right more than once per 12-month period.

2.2 Piggyback Registrations.

  (a)   Except in the case of Special Registration Statements, ASV shall notify
Caterpillar in writing at least 30 days prior to the filing of any registration
statement for purposes of a public offering of ASV equity securities on or after
the date on which Caterpillar is permitted to deliver a Registration Request
under this Agreement (each a “Company Registration Statement”). ASV will allow
Caterpillar to include in such registration statement all or part, in
Caterpillar’s sole discretion, of its Registrable Securities. Caterpillar must
notify ASV within 15 business days after the above-described notice from ASV of
its desire to register all or any portion of its Registrable Securities under a
Company Registration Statement by delivering a Registration Request to ASV.
Caterpillar’s right to include any Registrable Securities in any subsequent
Company Registration Statement will continue until Caterpillar no longer holds
Shares.     (b)   If the registration of which ASV gives notice is for a
registered public offering involving an underwriting, ASV shall so advise
Caterpillar as part of the written notice given pursuant to Section 2.2(a)
above. In such event, the right of Caterpillar to registration pursuant to this
Section 2.2 shall be conditioned upon Caterpillar’s participation in such
underwriting, and the inclusion of Registrable Securities in the underwriting
shall be limited to the extent provided herein.     (c)   Caterpillar shall
(together with ASV and all the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by ASV.
Notwithstanding any other provision of this Section 2.2, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the managing underwriter may limit the Registrable
Securities to be included in such registration to an amount no less than 30% of
all shares to be included in such offering. If Caterpillar disapproves of the
terms of any such underwriting, it may elect to withdraw therefrom by written
notice to ASV.     (d)   ASV shall have the right to terminate or withdraw any
Company Registration Statement prior to the effectiveness of such registration
whether or not Caterpillar has elected to include securities in such
registration.

2.3 Form S-3 Registration.

  (a)   Subject to the conditions of Sections 2.3(a) and (b), Caterpillar may
request, under a Registration Request, that ASV effect a registration on Form
S-3 (or any successor to Form S-3) and all such qualifications and compliances
as may be requested or required in connection therewith (a “Form S-3
Registration”). Subject to Section 2.3(b), within 30 days following such
request, ASV shall effect a Form S-3 Registration and all such qualifications
and compliances as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of Caterpillar’s Registrable
Securities as are specified in such request.

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  (b)   ASV shall have the right to delay a Form S-3 Registration if ASV shall
furnish to Caterpillar a certificate signed by the Chief Executive Officer of
ASV stating that in the good faith judgment of the Board it would be materially
detrimental to ASV or its shareholders for a registration statement to be filed
in the near future, in which case ASV’s obligation to register Shares under this
Section 2.3(b) shall be deferred for a period not to exceed 30 days from the
date of receipt of the Registration Request from Caterpillar, provided that ASV
may not exercise this deferral right more than once per 12-month period Further,
notwithstanding Section 2.3(a), ASV shall not be obligated to effect a Form S-3
Registration:

  (1)   if Form S-3 is not available for such offering requested by Caterpillar;
or     (2)   if ASV has, within the 12-month period preceding the date of such
request, already effected two (2) Form S-3 Registrations for Caterpillar
pursuant to this Section 2.3.

  (c)   Form S-3 Registrations shall not be counted as requests for registration
under Sections 2.1 or 2.2.

2.4 Expenses of Registration. Except as specifically provided herein, all
pre-approved Registration Expenses reasonably incurred, and evidenced by copies
of true and complete receipts delivered to Caterpillar by ASV in connection with
the preparation of a registration statement initiated by Caterpillar under
Sections 2.1 or 2.3 herein, shall be borne by Caterpillar unless additional
holders of common stock, including, but not limited to, ASV, include their
shares of common stock in such registration, in which case, registration
expenses shall be borne by all such parties in proportion to the number of
shares each stockholder registers. ASV shall be liable for all other
registration expenses and costs for qualifications and compliance. In addition,
for a registration statement initiated by ASV pursuant to Section 2.2,
Caterpillar shall pay the increase in SEC filing fees for such registration
which fees resulted from ASV registering the Registrable Securities under
Section 2.2. ASV shall also be liable for all expenses and costs incurred in
connection with any withdrawn registration statement, whether or not such
registration statement was initiated under Section 2.1, 2.2 or 2.3 or otherwise,
unless the withdrawal was requested by Caterpillar pursuant to a notice under
Section 7.4. If ASV, or its agent, withdraws any registration statement in which
Caterpillar’s Registrable Securities are included, unless such withdrawal was
requested by Caterpillar pursuant to a notice under Section 7.4, then ASV shall
reimburse Caterpillar for any and all costs incurred by Caterpillar in
connection with such registration statement.
2.5 Obligations of ASV. Whenever required to effect the registration of any
Registrable Securities, ASV shall:

  (a)   Within 45 days following the date of a Registration Request, ASV shall
prepare and file with the SEC a registration statement with respect to such
Registrable Securities and use its commercially reasonable efforts to cause such
registration statement to become effective as soon as possible, but in no event
later than 150 days after the date of the Registration Request (“Registration
Deadline”) and shall remain effective for at least 180 days or until the
distribution described in the registration statement has been completed;
provided, that in the case of any registration of Registrable Securities which
are intended to be offered on a delayed or continuous basis, such 180 day period
shall be extended until all such Registrable Securities are sold or become
salable pursuant to Rule 144(k) under the Securities Act; provided further, that
at least five (5) business days before filing a registration statement or
prospectus or any amendments or supplements thereto, ASV will furnish
Caterpillar’s counsel copies of all such documents proposed to

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      be filed, which documents will be subject to the review of such counsel.
ASV shall respond promptly to any and all comments made by the staff of the SEC
on the registration statement, and shall submit to the SEC, within two
(2) business days after ASV learns that no review of the registration statement
will be made by the staff of the SEC or that the staff of the SEC has no further
comments on the registration statement, as the case may be, a request for
acceleration of the effectiveness of the registration statement to a time and
date not later than 48 hours after the submission of such request.     (b)  
Promptly prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement for the period set forth in Section 2.5(a) above.     (c)
  Furnish to Caterpillar as soon as practicable such number of copies of a
prospectus, including a preliminary prospectus and any amendments and
supplements to such prospectus, in conformity with the requirements of the
Securities Act, and such other documents as Caterpillar may reasonably request
in order to facilitate the disposition or sale of Caterpillar’s Registrable
Securities.     (d)   Use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by Caterpillar; provided that ASV shall not be required in connection
therewith or as a condition thereto to qualify to do business, file a general
consent to service of process or subject itself to taxation in any such states
or jurisdictions.     (e)   Use best efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement, or the lifting
of any suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction, at the earliest possible moment.     (f)   In the
event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter(s) of such offering and, to the extent reasonably
requested by the managing underwriters of any underwritten offering, instruct
appropriate officers of ASV to attend “road shows” scheduled in connection with
any such registration.     (g)   Notify Caterpillar at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing. ASV will amend or supplement such prospectus in
order to cause such prospectus not to include any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
then existing.     (h)   Furnish, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, (1) an opinion, dated as of such date, of the counsel
representing ASV for the purposes of such registration, in form and substance as
is customarily given to underwriters in an underwritten public offering,

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      addressed to the underwriters, if any, and (2) a letter dated as of such
date, from the independent certified public accountants of ASV, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering addressed to the underwriters.  
  (i)   Cause all securities covered by such registration statement to be listed
on each securities exchange on which securities of the same class are then
listed.     (j)   Provide a transfer agent and registrar (which may be the same
entity) for its Common Stock no later than the effective date of such
registration statement.     (k)   Make available for inspection by Caterpillar,
any underwriter participating in a disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by Caterpillar
or underwriter, all financial and other records, pertinent corporate documents
and properties of ASV, and cause ASV’s officers, directors and employees to
supply all information reasonably requested by Caterpillar, underwriter,
attorney, accountant or agent in connection with such registration statement.  
  (l)   Take such other actions as shall be reasonably requested by Caterpillar
consistent with the terms herein.

Caterpillar agrees that, upon receipt of any notice from ASV of the occurrence
of any event of the kind described in paragraph (g) of this Section 2.5,
Caterpillar will forthwith discontinue its disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until Caterpillar’s receipt of the copies of the supplemented or amended
prospectus contemplated by paragraph (g) of this Section 2.5 and, if so directed
by ASV, will deliver to ASV (at ASV’s expense) all copies, other than permanent
file copies, then in Caterpillar’s possession of the prospectus relating to such
Registrable Securities current at the time of receipt of such notice. In the
event ASV shall give any such notice, the period mentioned in paragraph (g) of
this Section 2.5 shall be extended by the length of the period from and
including the date when each seller of any Registrable Securities covered by
such registration statement shall have received such notice to the date on which
each such seller has received the copies of the supplemented or amended
prospectus contemplated by paragraph (g) of this Section 2.5.
2.6 Indemnification. In the event any Registrable Securities are included in a
registration statement, including all amendments thereto, under Sections 2.1,
2.2 or 2.3:

  (a)   To the extent permitted by law, ASV will indemnify and hold harmless
Caterpillar and its officers, directors, shareholders, employees and agents and
any underwriter (as defined in the Securities Act) for Caterpillar and each
person, if any, who controls Caterpillar or such underwriter within the meaning
of the Securities Act or the Exchange Act (collectively, the “Caterpillar
Indemnified Parties” and each an “Caterpillar Indemnified Party”), against any
losses, claims, damages, or liabilities (joint or several) and expenses
(including, without limitation, attorneys’ fees and disbursements)
(collectively, “Damages”) to which they may become subject under the Securities
Act, the Exchange Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof, whether or not
such indemnified party is a party thereto) arise out of or are based upon:
(1) any act or omission to act by ASV or its employees or agents; (2) a breach
of this Agreement by ASV or its employees; or (3) any of the following
statements, omissions or violations (collectively, a “Violation”) by ASV:
(A) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus

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      contained therein or any amendments or supplements thereto, (B) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or (C) any violation or
alleged violation by ASV of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by such registration statement. ASV will pay as incurred to each
Caterpillar Indemnified Party for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any action for
Damages; provided, however, that the indemnity agreement contained in this
Section shall not apply to amounts paid in settlement of any such Damages if
such settlement is effected without the consent of ASV, which consent shall not
be unreasonably withheld or delayed, nor shall ASV be liable to Caterpillar in
any such case for any Damages to the extent that such damages arise out of or is
based upon a Violation which occurs in sole reliance upon and in full conformity
with written information furnished expressly for use in connection with such
registration by the Caterpillar.     (b)   To the extent permitted by law,
Caterpillar will, if Registrable Securities held by Caterpillar are included in
the securities as to which such registration qualifications or compliance is
being effected, indemnify and hold harmless ASV, each of its directors, its
officers and any underwriter (the “Company Indemnified Parties”) under such
registration statement, against any Damages to which ASV or any such director,
officer or underwriter become subject under the Securities Act, the Exchange Act
or other federal or state law, to the extent (and only to the extent) that such
Violation occurs solely in reliance upon and in conformity with written
information furnished by Caterpillar expressly for use in connection with the
registration pursuant to Section 2.6(a) provided, however, that Caterpillar
shall not be liable in any such case to the extent that Caterpillar has
furnished to ASV in writing within a reasonable period of time prior to the
filing of any registration statement, information expressly for use in such
registration statement which corrected or made not misleading information
previously furnished to ASV and ASV failed to include such information therein;
and Caterpillar will pay as incurred any legal or other expenses reasonably
incurred by ASV Indemnified Parties in connection with investigating or
defending any such loss, claim, damage, liability or action if it is judicially
determined that there was such a Violation; provided, however, that the
indemnity agreement contained in this Section shall not apply to amounts paid in
settlement of any Damages if such settlement is effected without the consent of
Caterpillar, which consent shall not be unreasonably withheld or delayed;
provided, further, that in no event shall any indemnity under this Section
exceed the net proceeds from the offering received by Caterpillar.     (c)  
Promptly after receipt by an indemnified party under this Section 2.6 of notice
of the commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 2.6, deliver to the indemnifying party a
written notice of the commencement thereof; provided, however, that the failure
to so notify the indemnifying party shall not relieve the indemnify party from
any obligation or liability except to the extent that the indemnifying party has
been materially prejudiced by such failure. The indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own

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      counsel, with the fees and expenses to be paid by the indemnifying party,
if representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. No indemnifying party will consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation.     (d)
  If the indemnification provided for in this Section 2.6 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any losses, claims, damages or liabilities referred to herein, the indemnifying
party, in lieu of indemnifying such indemnified party thereunder, shall to the
extent permitted by applicable law contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the Violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by a court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the indemnifying party or by the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, that in no event shall any contribution by Caterpillar hereunder
exceed the net proceeds from the offering received by Caterpillar.         The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. 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.     (e)   The obligations of ASV
and Caterpillar under this Section 2.6 shall survive completion of any offering
of Registrable Securities in a registration statement and the termination of
this Agreement.

2.7 Limitation on Subsequent Registration Rights. After the date of this
Agreement, without the consent of Caterpillar, ASV may grant to any holder of
securities of ASV registration rights inferior to those granted hereunder. ASV
shall not enter into any agreement granting any holder or prospective holder of
any securities of ASV registration rights superior to or on a pari passu basis
with the rights granted to Caterpillar hereunder without the written consent of
Caterpillar.
2.8 Rule 144. With a view to making available to Caterpillar the benefits of
certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, ASV agrees to use its
commercially reasonable best efforts to:

  (a)   Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the Effective Date;

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  (b)   File with the SEC, in a timely manner, all reports and other documents
required of ASV under the Exchange Act; and     (c)   So long as Caterpillar
owns any Registrable Securities, furnish to Caterpillar forthwith upon request:
a written statement by ASV as to its compliance with the reporting requirements
of said Rule 144 of the Securities Act, and of the Exchange Act; and such other
reports and documents as Caterpillar may reasonably request in availing itself
of any rule or regulation of the SEC allowing it to sell any such securities
without registration.

2.9 Termination of Registration Rights. The rights granted pursuant to
Sections 2.1, 2.2 and 2.3 above shall terminate upon the date Caterpillar is
able to sell publicly without registration all Registrable Securities then held
by Caterpillar, if any, within a 90-day period pursuant to Rule 144 under the
Securities Act or a similar exemption.
SECTION 3. COVENANT OF ASV
3.1 Board Representation. Caterpillar shall be entitled to designate a number of
director nominees (the “Caterpillar Nominees”) such that the ratio of the number
of director nominees designated by Caterpillar to the number of directors on the
Board is substantially equal to Caterpillar’s percentage ownership of the
outstanding Common Stock of ASV, on a fully diluted basis (the “Caterpillar
Board Seats”). For example, as of the date hereof, Caterpillar owns
approximately 23% of the outstanding shares of Common Stock and therefore
Caterpillar is entitled to designate the nominees for two of the nine director
positions on the Board. If Caterpillar’s ownership of the outstanding Common
Stock of ASV increases such that Caterpillar would be entitled pursuant to this
Section 3.1 to designate additional director nominees, ASV shall take such steps
as promptly as possible as are necessary to cause such additional director
nominees designated by Caterpillar to be elected to the Board including, without
limitation, increasing the size of the Board or amending its articles of
incorporation or bylaws.
SECTION 4. COVENANT OF CATERPILLAR
4.1 Standstill Obligations. Caterpillar covenants, so long as ASV is not in
breach of the Purchase Agreement and such agreement remains in effect, not to,
directly or indirectly, offer, sell, pledge, contract to sell (including any
short sale), grant any option to purchase or otherwise dispose of, or enter into
any hedging transaction relating to, any Shares until January 1, 2009, other
than sales or other transfers to one or more Affiliates; provided, however, that
such Affiliates shall thereafter continue to be bound by the restrictions set
forth in this Section 4.1. The obligations set forth in this Section 4.1 shall
continue in full force and effect notwithstanding the effectiveness of a
registration statement filed by ASV pursuant to a Registration Request delivered
by Caterpillar in accordance with this Agreement prior to January 1, 2009.
SECTION 5. REMEDIES
Remedy upon Registration Default. Without limitation of any other equitable
remedy available to Caterpillar under applicable law or otherwise, (i) if a
registration statement filed by ASV pursuant to Section 2.1, 2.2 or 2.3 is not
declared effective by the SEC on or before the Registration Deadline, (ii) ASV
fails to perform any of its obligations hereunder and as a result of such
failure Caterpillar has not been able to sell its Registrable Securities
following the Registration Deadline, or (iii) ASV acts or fails to act in any
manner which delays Caterpillar’s sale or distribution of its Registrable
Securities following the Registration Deadline, which delay is not expressly
permitted by this Agreement (each a “Registration Default”), then ASV shall pay
to Caterpillar liquidated damages in an amount equal to 1% of the average
closing sale price of ASV Common Stock at the end of regular trading on the
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the trading days occurring during the 150-day period following the date of
Caterpillar’s Registration Request, multiplied by the number of Shares subject
to such registration statement, for each 30-day period in which a Registration
Default exists (prorated for any period of less than thirty days). If, following
a Registration Request, ASV Common Stock is delisted from the Nasdaq Stock
Market, then ASV shall pay to Caterpillar liquidated damages in an amount equal
to 1% of the average closing sale price of ASV Common Stock at the end of
regular trading on the Nasdaq Stock Market for the trading days occurring during
the period beginning on the date following Caterpillar’s Registration Request
and ending on the last trading day prior to such delisting, multiplied by the
number of Shares subject to such registration statement, for each 30-day period
in which ASV Common Stock continues to be delisted. Each such payment of
liquidated damages shall be made within five (5) business days following the
last day of the calendar month in which a Registration Default or a delisting of
ASV Common Stock, as the case may be, occurs.
SECTION 6. REPRESENTATIONS
6.1 ASV represents and warrant to Caterpillar as follows:

  (a)   The execution, delivery and performance of this Agreement by ASV have
been duly authorized by all requisite corporate action and will not violate any
provision of law, any order of any court or other agency of government, the
Articles of Incorporation or Bylaws of ASV or any provision of any indenture,
agreement or other instrument to which it or any of its properties or assets is
bound, conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of
ASV.     (b)   This Agreement has been duly executed and delivered by ASV and
constitutes the legal, valid and binding obligation of ASV, enforceable in
accordance with its terms, subject to (1) applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and moratorium laws and other laws of
general application affecting enforcement of creditors’ rights generally and
(2) the availability of equitable remedies as such remedies may be limited by
equitable principles of general applicability (regardless of whether enforcement
is sought in a proceeding in equity or at law).

SECTION 7. MISCELLANEOUS
7.1 Governing Law. This Agreement, and the rights of the parties hereto, shall
be governed and construed in accordance with the laws of the State of Minnesota
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Illinois or any other jurisdiction) that would cause
the application of the law of any jurisdiction other than the State of
Minnesota.
7.2 Successors and Assigns. ASV may not assign this Agreement without the
express prior written consent of Caterpillar. The rights granted to Caterpillar
hereunder may be assigned by Caterpillar to an Affiliate of Caterpillar;
provided, however, that (a) Caterpillar shall, within a reasonable time after
such transfer, furnish to ASV written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned and (b) such transferee shall agree to be
subject to all restrictions set forth in this Agreement. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto and shall inure to the benefit of and be
enforceable by each person who shall be a holder of shares which have been
transferred from time to time, directly or indirectly, by Caterpillar.

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7.3 Delays or Omissions. Subject to applicable statutes of limitations, it is
agreed that no delay or omission to exercise any right, power, or remedy
accruing to any Caterpillar, upon any breach, default or noncompliance of ASV
under this Agreement shall impair any such right, power, or remedy, nor shall it
be construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of any similar breach, default or noncompliance
thereafter occurring. It is further agreed that any waiver, permit, consent, or
approval of any kind or character on any Caterpillar’s part of any breach,
default or noncompliance under the Agreement or any waiver on such Caterpillar’s
part of any provisions or conditions of this Agreement must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement, by law, or otherwise afforded to
Caterpillars, shall be cumulative and not alternative.
7.4 Notices. When written notice is required by this Agreement, it shall be sent
by certified mail, by courier, or by such method as will permit the sender to
verify delivery, to the addresses set forth below:

         
 
  For Caterpillar:   For ASV:
 
       
 
  Caterpillar Inc.   A.S.V., Inc.
 
  5000 Womack Road   840 Lily Lane
 
  Sanford, North Carolina 27330   Grand Rapids, Minnesota 55744-4089
 
  Attn: SSL/MTL Product Manager   Attn: Chief Financial Officer
 
  Fax: (919) 777-2032   Fax: (218) 327-9123
 
       
 
  With a copy to:   With a copy to:
 
       
 
  Caterpillar Inc.   Dorsey & Whitney LLP
 
  100 N.E. Adams Street   50 South Sixth Street, Suite 1500
 
  Peoria, Illinois 61629   Minneapolis, Minnesota 55402
 
  Attn: General Counsel   Attn: Philip E. Bauer, Esq.
 
  Fax: (309) 675-6620   Fax: (612) 340-2868

Written notice may also be sent by facsimile to the numbers listed above, but
such notice shall be effective upon the sender receiving electronic confirmation
that the notice was faxed successfully. Notice shall be deemed received when
actually delivered to the recipient as demonstrated by shipping records of a
nationally recognized courier, the electronic confirmation or when delivered in
person. The addresses and transmittal numbers set forth above can be changed
only by written notice that complies with the requirements of this Section.
7.5 Attorneys’ Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
7.6 Entire Agreement. This Agreement and the Purchase Agreement constitute the
entire agreement and understanding between the parties with respect to the
subject matters herein and therein, and supersede and replace any and all prior
agreements and understandings, whether oral or written, between them with
respect to such matters.
7.7 Survival. The representations, warranties, covenants, and agreements made
herein shall survive any investigation made by any party and the closing of the
transactions contemplated hereby. All

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statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of ASV pursuant hereto in connection with
the transactions contemplated hereby shall be deemed to be representations and
warranties by ASV hereunder solely as of the date of such certificate or
instrument. In addition, Sections 2.5, 2.6, 2.10, 3, 4 and 5 shall survive the
termination or expiration of this Agreement.
7.8 Further Assurances. ASV agrees to execute and deliver such additional
instruments and other documents and shall take such further actions as may be
necessary or appropriate to effectuate, carry out and comply with all of the
terms of this Agreement and the transactions contemplated hereby, which actions
may include, but not be limited to, amending ASV’s Second Restated Articles of
Incorporation or Restated Bylaws.
7.9 Amendment and Waiver. The provisions of this Agreement may be waived,
altered, amended, or repealed in whole or in part only upon the written
agreement of ASV and Caterpillar. The waiver by either party of any breach of
this Agreement shall not be deemed or construed as a waiver of any other breach,
whether prior, subsequent or contemporaneous, to this Agreement.
7.10 Change in Ownership and Control. A change in the ownership in ASV shall not
affect the rights of Caterpillar or obligations of ASV or its successors and/or
assigns. ASV shall not sell, transfer, convey or otherwise dispose of all or
substantially all of its assets unless the buyer(s) agrees to be bound by all of
the terms set forth herein. ASV shall not merge or consolidate ASV into or with
another Person, or enter into a similar business combination of ASV and another
Person, other than with a wholly-owned subsidiary of ASV, or enter into any
agreement to take such action, without the prior consent of Caterpillar.
7.11 Severability; Injunctive Relief. Invalidation of any of the provisions
contained herein, or the application of such invalidation thereof to any person,
by legislation, judgment or court order shall in no way affect any of the other
provisions hereof or the application thereof to any other person, and the same
shall remain in full force and effect, unless enforcement as so modified would
be unreasonable or grossly inequitable under all the circumstances or would
frustrate the purposes hereof. The parties acknowledge that monetary damages may
not be adequate to protect Caterpillar from ASV’s breach of Section 2 or
Section 3 of this Agreement and accordingly acknowledge that Caterpillar shall
be entitled to seek, in addition to any other remedies it may have, specific
performance, temporary and permanent injunctive relief or such other equitable
remedies as may be available from any court of competent jurisdiction without
the necessity of proving actual damage.
7.12 Public Disclosures. Neither ASV nor Caterpillar shall issue any press
release or make any other public disclosure (including disclosure to public
officials) with respect to this Agreement, except as required by law, without
the prior written approval of the other party. If disclosure is required by law,
the disclosing party shall use commercially reasonable efforts to provide the
other party with a copy of such disclosure for review and comment prior to its
publication.
7.13 Construction. The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
7.14 Section Headings. Section headings contained herein are for ease of
reference only and shall not be given substantive effect.

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7.15 Counterparts; Signatures. This Agreement may be signed in one or more
counterparts, each to be effective as an original.
[The remainder of this page is intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
signed by their duly authorized representatives as of the Effective Date.

                 
Caterpillar
  Inc.       A.S.V.,   Inc.
 
               
By:
  /s/ Edward J. Rapp       By:   /s/ Gary D. Lemke
 
               
Name:
  Edward J. Rapp       Name:   Gary D. Lemke
Title:
  Vice President -       Title:   Chief Executive Officer
 
  Building Construction Products Division            

[Signature Page to Registration Rights Agreement]

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