Document:

Exhibit 10.2

 

Exhibit 10.2

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (this “Agreement”) is entered into as of October 27, 2005, by
and among JLG Industries, Inc., a company incorporated under the laws of Pennsylvania with
its principal place of business located at 1 JLG Drive, McConnellsburg, Pennsylvania 17233 (“Buyer”
or “JLG”), Caterpillar S.A.R.L., a societe a responsabilite limitee organized under the
laws of Switzerland with its principal place of business located at 76 Route de Frontenex, P.O. Box
6000, Geneva 6, 1211, Switzerland (“CSARL”), Caterpillar (U.K.) Limited, a corporation
organized under the laws of England and Wales with its principal place of business located at
Peckleton Lane, Co. Desford, Leicester, England LE9 9JT, United Kingdom (“Cat UK”), Caterpillar
Poland Sp. z o.o., a Polish limited liability company with its principal place of business
located at U1. Lubielski 74, 23-300, Janow Lubelski, Poland (“Cat Poland”), Caterpillar Tosno,
L.L.C., a Russian limited liability company organized under the laws of Russia with its
principal place of business located at 1/1 Moskovskoye shosse, Leningradskaya Olbast, Tosno, Russia
187000 (“Cat Tosno”), Caterpillar Hungary Components Manufacturing Ltd.,  a
Hungarian corporation with its principal place of business located at 2117 Isaszeg Hrsz, 0185/3,
Hungary (“Cat Hungary”), and Caterpillar Inc., a company incorporated under the
laws of Delaware, United States, with its principal place of business located at 100 N.E. Adams
St., Peoria, Illinois U.S.A. 61629 (“Caterpillar”). In this Agreement, (i) CSARL, Cat UK, Cat
Poland, Cat Tosno, Cat Hungary and Caterpillar shall be collectively referred to as “Seller”, (ii)
CSARL and Caterpillar shall be collectively referred to as “Cat IP Seller”, (iii) Cat UK, Cat
Poland, Cat Hungary and Cat Tosno shall be collectively referred to as “Cat Tangible Personal
Property Seller”, and (iv) CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, Caterpillar, and
Buyer are sometimes called singularly a “Party” and collectively the “Parties.”

     WHEREAS, Caterpillar and JLG intend to establish a relationship in which Caterpillar and JLG
will cooperate in the joint design and distribution of telehandlers, Caterpillar will supply
certain components to JLG for the production and manufacture of telehandlers, and Caterpillar will
sell to JLG, and JLG will purchase, certain of Caterpillar’s assets used exclusively in telehandler
production; and

     WHEREAS, concurrently with the execution of this Agreement and in conjunction with such
intention, Caterpillar and JLG will execute that certain Strategic Alliance Agreement dated as of
the date hereof (the “Strategic Alliance Agreement”), pursuant to which Caterpillar and JLG have
agreed to cooperate in the area of telehandler design, manufacture, distribution, and product
support; and

     WHEREAS, concurrently with the execution of this Agreement and in conjunction with such
intention, Caterpillar and JLG will execute that certain Component Supply Agreement dated as of the
date hereof (the “Component Supply Agreement”), whereby Caterpillar shall supply to JLG and JLG
shall purchase from Caterpillar certain components and products manufactured by or for Caterpillar;
and

     WHEREAS, concurrently with the execution of the Strategic Alliance Agreement and the Component
Supply Agreement and in conjunction with such intention, the Parties have agreed to enter into this
Agreement whereby Seller shall sell to JLG, and JLG shall purchase from Seller, certain assets used
in the manufacture of Caterpillar’s B Series telehandlers and Compact Telehandlers.

     NOW, THEREFORE, in consideration of the mutual covenants, premises and agreements herein
contained, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to
be legally bound, hereby agree as follows:

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     Section 1. Definitions.

     “Accredited Investor” has the meaning set forth in Regulation D promulgated under the
Securities Act.

     “Acquired Assets” means the Caterpillar Tangible Personal Property and the Caterpillar
Intellectual Property.

     “Affiliate” means, with respect to a person, any legal entity directly or indirectly
controlling, controlled by, or under common control with such person; where “control” means a
direct or indirect ownership interest of more than 50% in such legal entity or person.

     “Alliance” means the cooperation between Caterpillar and JLG in the area of telehandler
design, manufacture, distribution, and product support.

     “Atlas II Assets” means the assets dedicated to and developed for use in the request for
proposal for the Atlas II Bid Solicitation.

     “Atlas II Bid Solicitation” means the bid solicitation for all-terrain telehandlers to replace
the current Atlas telehandlers used by the U.S. Army and for which the U.S. Army has requested
proposals.

     “B Series Telehandlers” means Seller’s B Series telehandler models TH220B, TH330B, TH340B,
TH350B, TH355B, TH360B, TH460B, TH560B and TH580B.

     “Business” means the business of the design, manufacture, and assembly of the Seller’s B
Series Telehandlers and Compact Telehandlers operated from locations at Desford and Stockton,
England, and Tosno, Russia.

     “Buyer” has the meaning set forth in the preamble above.

     “Buyer Note” has the meaning set forth in Section 2(c) below.

     “Cat Hungary’s Knowledge” means the Knowledge as of the date hereof of the senior managers of
Cat Hungary.

     “Cat Poland’s Knowledge” means the Knowledge as of the date hereof of the senior managers of
Cat Poland.

     “Cat Tosno’s Knowledge” means the Knowledge as of the date hereof of the senior managers of
Cat Tosno.

     “Cat UK’s Knowledge” means the Knowledge as of the date hereof of the senior managers and
legal department of Cat UK.

     “Caterpillar Tangible Personal Property” means the tangible personal property set forth in
attached Exhibit A, including any Atlas II Assets.

     “Caterpillar Intellectual Property” means the Intellectual Property set forth in attached
Exhibit A.

     “Caterpillar’s Knowledge” means the Knowledge as of the date hereof of the senior managers and
legal department of Caterpillar.

     “Closing” has the meaning set forth in Section 2(d) below.

     “Closing Date” has the meaning set forth in Section 2(d) below.

     “Common Intellectual Property” means that intellectual property identified as such on Exhibit
D of the Strategic Alliance Agreement and which Caterpillar Inc. will grant Buyer a non-exclusive,
worldwide license to use.

     “Compact Telehandlers” means Seller’s TH210 and TH215 compact telehandler models.

     “Component Supply Agreement” has the meaning set forth in the Recitals.

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     “CSARL’s Knowledge” means the Knowledge as of the date hereof of the senior managers and legal
department of CSARL.

     “Designated Purchaser” has the meaning set forth in Section 2(g) below.

     “Disclosure Schedule” has the meaning set forth in Section 3 below.

     “EAME Manufacturing Transition Date” shall have the meaning assigned to it in the Strategic
Alliance Agreement.

     “EAME Transition Date” shall have the meaning assigned to it in the Strategic Alliance
Agreement.

     “Employment Costs” means the cost of employing the relevant employees, including salary,
wages, contractual and non-contractual remuneration and/or benefits, allowances, statutory sick
pay, statutory maternity pay, holiday pay, commissions, bonuses or incentives (discretionary or
otherwise), National Insurance contributions, pension contributions, payments made under statute or
regulations, and the cost of supplying the benefits of employment.

     “Employee Representatives” means any recognized trade union, staff council or similar body, or
elected representative recognized by law or by the employer as representing the Employees.

     “Employees” means those employees employed in the Business in the United Kingdom.

     “Employment Liabilities” means all claims, damages, compensation, awards, penalties, fines,
interest, costs (including reasonable legal fees), expenses and any other liabilities whatsoever
arising from or connected with the employment of, or the holding of any directorship or other
office or position by, the relevant persons or the termination of such employment, office, position
or directorship.

     “Infringing Intellectual Property” has the meaning set forth in Section 8(c) below.

     “Intellectual Property” means any intellectual property rights of any kind including
inventions (whether patentable or not), patents, patent applications, know-how, trade secrets and
copyrights, including any and all rights with respect to the foregoing anywhere in the world.

     “JLG Common Platform” shall have the meaning assigned to it in the Strategic Alliance
Agreement.

     “Knowledge” means actual knowledge (i.e., applicable Party has no obligation to conduct an
independent investigation).

     “Losses” means losses, liabilities, costs, claims, damages, and reasonable attorney fees.

     “Material Adverse Effect” or “Material Adverse Change” means any effect or change that would
be materially adverse to the Alliance, taken as a whole, or to the ability of Seller to consummate
timely the transactions contemplated hereby; provided that none of the following shall be deemed to
constitute, and none of the following shall be taken into account in determining whether there has
been, a Material Adverse Effect or Material Adverse Change: (a) any adverse change, event,
development, or effect arising from or relating to (i) general business or economic conditions,
including such conditions related to the Alliance, (ii) national or international political or
social conditions, including the engagement by the United States, the United Kingdom or Switzerland
in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the
occurrence of any military or terrorist attack upon the United States, United Kingdom or
Switzerland, or any of their respective territories, possessions, or diplomatic or consular offices
or upon any military installation, equipment or personnel of the United States, United Kingdom or
Switzerland, (iii) financial, banking, or securities markets (including any disruption thereof and
any decline in the price of any security or any market index), (iv) changes in laws, rules,
regulations, orders, or other binding directives issued by any governmental entity, (v) the taking
of any action contemplated by this Agreement and the other agreements contemplated hereby or (vi)
the disclosure of this Agreement or the transactions contemplated hereby, and (b) any adverse
change in or effect on the Alliance that is

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cured by Seller, to the reasonable satisfaction of Buyer, before the earlier of (i) the
Closing Date and (ii) the date on which this Agreement is terminated pursuant to Section 9 hereof.

     “Ordinary Course of Business” means the ordinary course of business consistent with past
custom and practice (including with respect to quantity and frequency).

     “Parties” has the meaning set forth in the preamble above.

     “Party” has the meaning set forth in the preamble above.

     “Person” means an individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated organization, any
other business entity, or a governmental entity (or any department, agency, or political
subdivision thereof).

     “Purchase Price” has the meaning set forth in Section 2(c) below.

     “ROW Transition Date” means November 1, 2006.

     “Seller” has the meaning set forth in the preamble above.

     “Strategic Alliance Agreement” has the meaning set forth in the Recitals.

     “Tax” or “Taxes” means any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any
other manner, including any interest, penalty, or addition thereto, whether disputed or not.

     “Tax Return” means any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and including any
amendment thereof.

     “Transfer Regulations” means the Transfer of Undertakings (Protection of Employment)
Regulations 1981, as amended and any re-enactment, modification or extension thereof.

     “VAT” means value added tax or any similar sales or turnover tax.

     Section 2. Basic Transaction.

     (a) Purchase and Sale of Assets. On the basis of the representations,
warranties, covenants, and agreements, subject to the satisfaction or waiver of the conditions set
forth in this Agreement, and for the consideration specified in Section 2(c), and subject to the
information and consultation obligations of the Parties by operation of English and/or any other
applicable law of the European Union to consult with Caterpillar’s and/or its Affiliates employees
and/or employee representatives having been completed to Cat UK’s and Buyer’s reasonable
satisfaction (which the parties agree must be completed before Closing), Buyer agrees to purchase
from Cat IP Seller the Caterpillar Intellectual Property and from Cat Tangible Personal Property
Seller the Caterpillar Tangible Personal Property.

     (b) No Assumed Liabilities. Notwithstanding anything to the contrary
in this Agreement, Seller shall retain and discharge all liabilities of the Business and the Atlas
II Bid Solicitation and Buyer shall not assume any liability of Seller in respect of the Business
or otherwise.

     (c) Purchase Price. Buyer agrees to pay to Seller at the Closing
$51,400,000.00 (the “Purchase Price”) for the Acquired Assets by delivery of (i) its promissory
note (the “Buyer Note”) in the form of Exhibit B attached hereto in the principal amount of
$5,000,000.00 made payable to CSARL, which amount Buyer shall pay to CSARL on September 15, 2006
and (ii) cash to Seller in the amount of $46,400,000.00, with such cash portions payable by wire
transfer or delivery of other immediately available funds.

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     (d) The Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of Caterpillar Inc., in Peoria, Illinois
commencing at 9:00 a.m. local time on November 30, 2005, or, if not yet satisfied or waived by
November 30, 2005, as soon as possible after the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the respective Parties will take at the Closing itself) on a
date mutually determined by the Parties (the “Closing Date”).

     (e) Deliveries at the Closing. At the Closing,

     (i) Seller shall deliver to Buyer the various
certificates and documents referred to in Section 7(a) below;

     (ii) Buyer shall deliver to Seller the various
certificates and documents referred to in Section 7(b) below;

     (iii) Seller shall execute, acknowledge (if
appropriate), and deliver to Buyer (A) assignments in the forms attached hereto as Exhibits
C-1 through C-4 and (B) such other instruments of sale, transfer, conveyance, and assignment
as Buyer and its counsel may reasonably request; and

     (iv) Buyer shall deliver to Seller the consideration
specified in Section 2(c) above.

     (f) Allocation. Buyer and Seller shall, as soon as practicable,
mutually agree to an allocation, which Seller shall prepare, of the Purchase Price (and all other
capitalized costs) among the Acquired Assets in accordance with applicable state, local or foreign
law, as appropriate. Once agreed to by the Parties, the allocation shall be binding upon Buyer and
Seller. Seller and Buyer shall report, act, and file Tax Returns in all respects and for all
purposes consistent with such agreed allocation. Buyer shall timely and properly prepare, execute,
file, and deliver all such documents, forms, and other information as Seller may reasonably request
in preparing such allocation. Neither Seller nor Buyer shall take any position (whether in audits,
tax returns, or otherwise) that is inconsistent with such allocation unless required to do so by
applicable law.

     (g) Designated Purchasers. Seller acknowledges and agrees that, prior
to the Closing Date, Buyer may, upon prior written notice to Seller, assign its rights and
obligations, in whole or in part, under this Agreement to one or more of its wholly-owned
Affiliates (each such entity, a “Designated Purchaser”) for the purpose of carrying out the
transactions contemplated hereby, including to purchase and accept the Caterpillar Intellectual
Property and/or the Caterpillar Tangible Personal Property; provided, however, that Buyer shall be
and remain jointly and severally liable for all obligations of Buyer and any such Designated
Purchaser under this Agreement and under all documents and instruments to be executed and delivered
by Buyer or any such Designated Purchaser pursuant hereto.

     (h) Delivery of Caterpillar Tangible Personal Property and Drawings.
Within a reasonable amount of time after the EAME Manufacturing Transition Date, the Caterpillar
Tangible Personal Property will be made available “AS IS, WHERE IS” to Buyer. The Caterpillar
Tangible Personal Property located at Seller’s facilities will be made available to Buyer Ex Works
(Incoterms 2000) Seller’s facilities, while the Caterpillar Tangible Personal Property located at
Seller’s supplier’s facilities will remain at such supplier’s facilities until such time as Buyer
makes its own arrangements for shipping. After the Closing, Seller agrees to attach labels
indicating Buyer’s ownership, if provided by Buyer, to the Caterpillar Tangible Personal Property
that remains at Seller’s facilities by mutual agreement of the Parties, and Seller will notify in
writing those suppliers in possession of Caterpillar Tangible Personal Property of Buyer’s
ownership thereof. As soon as practicable, Seller will deliver to Buyer (i) electronic copies of
the drawings related to the Caterpillar Intellectual

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Property and the Common Intellectual Property, (ii) the original application files of Seller
(whether held by Seller or Seller’s intellectual property counsel) relating to the Caterpillar
Intellectual Property, (iii) technical files, testing files, CE certification and homologation
files, stress analysis documentation, supplier lists, and operator and service and parts manuals,
drawings, and technical specifications relating to the Caterpillar Intellectual Property, (iv) any
existing correspondence or other communication located at Caterpillar’s world headquarters relating
to any of the Caterpillar Intellectual Property that Seller and/or Seller’s intellectual property
counsel may receive from any patent or copyright office or other governmental agency or body
relating to the Caterpillar Intellectual Property, and (v) the other engineering assets identified
on Schedule 2(h). Caterpillar agrees to cooperate in good faith in (i) delivering all Caterpillar
Intellectual Property not included in the foregoing sentence of this Section or not available in
any tangible, transferable form (including employee know-how, as embodied in drawings, and trade
secrets) to JLG in a manner to be mutually agreed upon by the Parties, which in any event shall
include the assistance and access provided for in Section 6(c) and (ii) taking such other steps, at
JLG’s expense, as are reasonably necessary to transfer the Caterpillar Intellectual Property to
JLG.

     Section 3. Seller’s Representations and Warranties.

     Each of CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, and Caterpillar individually,
represents and warrants to Buyer as follows, except as set forth in any of the disclosure schedules
accompanying this Agreement and initialed by the Parties (the “Disclosure Schedule”). The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Section 3.

     (a) Organization. Each of CSARL, Cat UK, Cat Poland, Cat Tosno, Cat
Hungary, and Caterpillar is a corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its incorporation.

     (b) Authorization of Transaction Each of CSARL, Cat UK, Cat Poland,
Cat Tosno, Cat Hungary, and Caterpillar has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution, delivery, and
performance of this Agreement and the agreements contemplated hereby and the consummation of the
transactions contemplated hereby have been duly authorized by CSARL, Cat UK, Cat Poland, Cat Tosno,
Cat Hungary, and Caterpillar. This Agreement constitutes, and when executed and delivered, the
other documents and instruments to be executed and delivered by CSARL, Cat UK, Cat Poland, Cat
Tosno, Cat Hungary, and Caterpillar pursuant hereto will constitute, the valid and legally binding
obligations of each of CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, and Caterpillar,
enforceable in accordance with its terms and conditions.

     (c) Non-contravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will (i) violate any
statute, regulation, injunction, order, or other restriction of any governmental agency or court to
which CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar is subject or any provision
of the charter or bylaws of CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar; (ii)
result in a material breach of any material agreement (relating to the Business) to which CSARL,
Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar is a party or to which any of the
Acquired Assets is subject (or result in the imposition of any lien upon any of the Acquired
Assets); or (iii) require CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar to give
any notice to, make any filing with, or obtain any authorization of any governmental agency or
other third party in order for the Parties to consummate the transactions contemplated by this
Agreement.

     (d) Brokers’ Fees. None of CSARL, Cat UK, Cat Poland, Cat Tosno, Cat
Hungary, or Caterpillar has any liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this Agreement.

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     (e) Tooling and Drawings. To Seller’s Knowledge, the Acquired Assets
include all tooling and drawings unique to the B Series Telehandlers and Compact Telehandlers used
by Seller in the design and manufacture of same.

     (f) Title to Caterpillar Tangible Personal Property. Cat Tangible
Personal Property Seller has good and marketable title to the Caterpillar Tangible Personal
Property free and clear of any lien, encumbrance, license, right of any third party (other than
suppliers’ rights to continued use and possession for that Caterpillar Tangible Personal Property
currently in the possession of third party suppliers), or other restriction. To Cat UK’s
Knowledge, Cat Poland’s Knowledge, Cat Hungary’s Knowledge, and Cat Tosno’s Knowledge, Section 3(f)
of the Disclosure Schedule accurately sets forth the location of the tooling included in the
Acquired Assets and the identity of the party having possession of such tooling.

     (g) Telehandler Design. To CSARL’s Knowledge, Cat UK’s Knowledge, Cat
Poland’s Knowledge, Cat Tosno’s Knowledge, Cat Hungary’s Knowledge, and Caterpillar’s Knowledge the
designs of the B Series Telehandlers and Compact Telehandlers are free from material defects and
are materially compliant with applicable CE, homologation, and other governmental approvals and
safety standards.

     (h) Intellectual Property.

     (i) Cat IP Seller has good and marketable title to the Caterpillar Intellectual
Property free and clear of any lien, encumbrance, license, right of any third party (other
than suppliers’ rights to continued use and possession of certain Caterpillar Intellectual
Property for purposes of manufacturing components for B Series Telehandlers and Compact
Telehanders), or other restriction, except as identified in Section 3(h)(ii) of the
Disclosure Schedule. To CSARL’s and Caterpillar’s Knowledge, in operating the Business
neither CSARL nor Caterpillar has ever infringed upon, misappropriated, or violated any
material Intellectual Property rights of third parties in any material respect, and the
directors and officers of CSARL and Caterpillar have never received any claim or notice
alleging any such interference, infringement, misappropriation, or violation (including any
claim that CSARL or Caterpillar must license or refrain from using any Intellectual Property
rights of any third party). To CSARL’s and Caterpillar’s Knowledge, no third party has
interfered with, infringed upon, misappropriated, or violated any Caterpillar Intellectual
Property rights in any material respect.

     (ii) Exhibit A identifies each patent or registration that has been issued to Cat IP
Seller with respect to the Caterpillar Intellectual Property and identifies each pending
patent application or application for registration that Cat IP Seller has made with respect
to the Caterpillar Intellectual Property, and Section 3(h)(ii) of the Disclosure Schedule
identifies each material license, agreement, or other permission that Cat IP Seller has
granted to any third party with respect to the Caterpillar Intellectual Property (together
with any exceptions). Cat IP Seller will deliver to Buyer correct and complete copies of all
such patents, registrations, applications, licenses, agreements, and permissions (as amended
to date). Except as set forth in Section 3(h)(ii) of the Disclosure Schedule, with respect
to each item of Caterpillar Intellectual Property identified on Exhibit A:

     (A) Cat IP Seller possesses all right, title, and interest in and to the item,
free and clear of any lien, encumbrance, license, or other restriction;

     (B) the item is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;

     (C) no action, suit, claim, or demand is pending or, to CSARL’s or
Caterpillar’s Knowledge, is threatened that challenges the validity, enforceability,
use, or ownership of the item; and

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     (D) no expiration of the item is reasonably foreseeable, except for patents
expiring at the end of their statutory terms (and not as a result of any act or
omission by Cat IP Seller, including a failure by Cat IP Seller to pay any required
maintenance fees).

     (iii) Except with respect to Intellectual Property related to components to be sold by
Caterpillar Inc. or its Affiliates to Buyer pursuant to the Component Supply Agreement and
certain Intellectual Property not owned by Cat IP Seller as set forth in attached Exhibit D,
the Caterpillar Intellectual Property, together with the Common Intellectual Property,
comprise all of the material Intellectual Property currently utilized by Seller to
manufacture the B Series Telehandlers and Compact Telehandlers.

     (i) Contracts. Section 3(i) of the Disclosure Schedule lists all
written contracts and other written agreements (solely relating to the Business) (other than
purchase orders) to which CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar is a
party and the performance of which will involve consideration in excess of $100,000. CSARL, Cat UK,
Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar has made available to Buyer a correct and
complete copy of each contract or other agreement (as amended to date) listed in Section 3(i) of
the Disclosure Schedule.

     (j) Litigation. Section 3(j) of the Disclosure Schedule sets forth
each instance (relating to the B Series Telehandlers and/or Compact Telehandlers) in which CSARL,
Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar (i) is subject to any outstanding
injunction, judgment or order or (ii) is a party to any action, suit, arbitration, proceeding or
investigation pending before any court or administrative agency of any federal, state, local, or
foreign jurisdiction in the nature of product liability, such as actions, suits, arbitrations,
proceedings or investigations made in connection with an injury to person, damage to property, or
other damage arising from, caused by, or arising out of the design, manufacture, or assembly of B
Series Telehandlers or Compact Telehandlers.

     (k) Investment. Cat IP Seller (i) understands that the Buyer Note has
not been, and will not be, registered under the Securities Act, or under any state securities laws,
and is being offered in reliance upon federal and state exemptions for transactions not involving
any public offering, (ii) is acquiring the Buyer Note solely for its own account for investment
purposes, and not with a view to the distribution thereof, (iii) is a sophisticated investor with
knowledge and experience in business and financial matters, (iv) has received certain information
concerning Buyer and has had the opportunity to obtain additional information as desired in order
to evaluate the merits and the risks inherent in holding the Buyer Note, and (v) is able to bear
the economic risk and lack of liquidity inherent in holding the Buyer Note.

     (l) Employees. To Cat UK’s Knowledge the data disclosed in Section
3(l) of the Disclosure Schedule contains the material terms and conditions of employment and
collective agreements relating to the Employees or their Employee Representatives.

     (m) Historical Cost Data. Section 3(m) of the Disclosure Schedule
contains historical cost information that Buyer received from Seller (the “Cost Data”). The Cost
Data reflects all material costs of telehandler components and fabrications included in the B
Series Telehandlers. The Cost Data was prepared from the books and records of Seller and to
Seller’s Knowledge accurately represents the actual, total material cost paid to either an internal
Seller source or an external supplier for the noted part numbers as of the date the Cost Data was
prepared. Because the Cost Data shows the bill of material breakdowns certain part numbers
represent an arrangement, assembly, etc. level meaning the material costs are an accumulation of
the individual part number material costs which go into the arrangement, assembly, etc. part
number. The Cost Data was not prepared in accordance with generally accepted accounting
principles. For purposes of this Section 3(m), “material” is used to express the idea of goods as
opposed to significance.

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     (n) Product Retrofits and Recalls. Except as set forth in Section
3(n) of the Disclosure Schedule, to CSARL’s, Cat UK’s, and Caterpillar’s Knowledge, in the previous
three (3) years none of the B Series Telehandlers or Compact Telehandlers has been the subject of
any field fix, retrofit, or recall campaign and no such field fix, retrofit, or recall campaign is
currently planned, or, to CSARL’s, Cat UK’s, and Caterpillar’s Knowledge, necessary.

     (o) Disclaimer of Other Representations and Warranties. CSARL, Cat
UK, Cat Poland, Cat Tosno, Cat Hungary, and Caterpillar and their Affiliates make no
representations or warranties with respect to any projections, forecasts or forward-looking
statements provided to Buyer. There is no assurance that any projected or forecasted results will
be achieved. EXCEPT TO THE EXTENT OF THE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
SECTION 3, SELLER IS SELLING THE ACQUIRED ASSETS ON AN “AS IS, WHERE IS” BASIS AND DISCLAIMS ALL
OTHER WARRANTIES, REPRESENTATIONS AND GUARANTEES, WHETHER EXPRESS OR IMPLIED. SELLER AND ITS
AFFILIATES MAKE NO REPRESENTATIONS OR WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE AND NO IMPLIED WARRANTIES WHATSOEVER, AND DISCLAIM ALL SUCH REPRESENTATIONS AND
WARRANTIES. WITHOUT LIMITING THE FOREGOING, AND EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 3,
SELLER AND ITS AFFILIATES DISCLAIM ANY WARRANTY OF TITLE OR NON-INFRINGEMENT AND ANY WARRANTY
ARISING BY INDUSTRY CUSTOM OR COURSE OF DEALING. BUYER ACKNOWLEDGES AND AGREES THAT IT IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS SECTION 3. Seller, its Affiliates, their representatives or any other Person
will not have or be subject to any liability to Buyer or its representatives, except for fraud,
relating to the transactions contemplated by this Agreement, resulting from (i) any information
that is not included in this Agreement or the Schedules hereto, or (ii) the use of any such
information by Buyer or any of its agents, consultants, accountants, counsel or other
representatives.

     Section 4. Buyer’s Representations and Warranties. Buyer
represents and warrants to Seller as follows:

     (a) Organization of Buyer. Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

     (b) Authorization of Transaction. Buyer has full corporate power and
authority to execute and deliver this Agreement and to perform its obligations hereunder. The
execution, delivery, and performance of this Agreement and the agreements contemplated hereby and
the consummation of the transactions contemplated hereby have been duly authorized by Buyer. This
Agreement constitutes, and when executed and delivered, the other documents and instruments to be
executed and delivered by Buyer pursuant hereto will constitute, the valid and legally binding
obligations of Buyer, enforceable in accordance with its terms and conditions.

     (c) Non-contravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will (i) violate any
statute, regulation, injunction, order, or other restriction of any governmental agency or court to
which Buyer is subject or any provision of the charter or bylaws of Buyer; (ii) result in a
material breach of any material agreement to which Buyer is subject; or (iii) require Buyer to give
any notice to, make any filing with, or obtain any authorization of any governmental agency or
other third party in order for the Parties to consummate the transactions contemplated by this
Agreement.

     (d) Brokers’ Fees. Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the transactions contemplated
by this Agreement.

9

 

     (e) Financing. Buyer has internal resources or financing commitments
from responsible financial institutions available in connection with the acquisition of the
Acquired Assets which are in an aggregate amount sufficient to consummate the transactions
contemplated hereby.

     (f) Independent Investigation. In making the decision to enter into
this Agreement and to consummate the transactions contemplated hereby, other than reliance on the
representations and warranties of CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, and
Caterpillar set forth in Section 3, Buyer has relied solely on its own independent investigation,
analysis and evaluation of the Business and the Acquired Assets (including Buyer’s own estimate and
appraisal of the value, financial condition, operations and prospects of the Business and the
Acquired Assets). Buyer confirms to Seller that Buyer is sophisticated and knowledgeable about the
Business and is capable of evaluating the matters set forth above.

     Section 5. Pre-Closing Covenants.

     The Parties agree as follows with respect to the period between the execution of this
Agreement and the Closing:

     (a) General. Each of the Parties will use its reasonable best
efforts to take all actions and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the Closing conditions set forth in Section 7 below).

     (b) Notices and Consents. Seller shall give any notices to third
parties, and Seller shall use its reasonable best efforts to obtain any third party consents
referred to in Section 3(c) above and Section 3(c) of the Disclosure Schedule.

     (c) Operation of Business. From the date of this Agreement until the
Closing Date, Seller shall operate the Business in the Ordinary Course of Business and in a manner
consistent with past practice, except that, unless otherwise consented to by Buyer in writing,
Seller shall not sell, lease, encumber, or otherwise transfer any assets that, but for such sale,
lease, encumbrance, or other transfer, would constitute Acquired Assets.

     (d) Notice of Developments.

     (i) CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary,
and/or Caterpillar may elect at any time to notify Buyer of any development causing a
breach of any of its representations and warranties in Section 3 above. Unless Buyer has
the right to terminate this Agreement pursuant to Section 9(a)(ii) below by reason of the
development and exercises that right within the period of ten (10) business days referred
to in Section 9(a)(ii) below, the written notice pursuant to this Section 5(d)(i), unless
objected to by Buyer within ten (10) business days of such notice, will be deemed for all
purposes of this Agreement to have amended the Disclosure Schedule as of the date hereof,
to have qualified the representations and warranties contained in Section 3 above, and to
have cured any misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the development.

     (ii) Each Party will give prompt written notice to the other
Party of any material adverse development causing a breach of any of its representations
and warranties in Section 3 and Section 4 above. Except as otherwise provided in Section
5(d)(i), no disclosure by any Party pursuant to this Section 5(d)(ii), however, shall be
deemed to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation or breach of warranty.

10

 

     (e) Employee Information and Consultation. The Parties will use their
reasonable best efforts to promptly take all actions and do all things necessary, proper or
advisable in order to consummate and make effective the transactions contemplated by this Agreement
having regard to discussions and consultation with employees and employee representatives as
required under English and/or any other applicable law of the European Union.

     Section 6. Post-Closing Covenants.

     The Parties agree as follows with respect to the period following the Closing.

     (a) General. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, including the registration
and maintenance of the Caterpillar Intellectual Property, each of the Parties will take such
further action (including the execution and delivery of such further instruments and documents) as
any other Party reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under Section 8 below).

     (b) Transition. CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary,
and Caterpillar will take no action that is designed or intended to have the effect of discouraging
any licensor, customer or supplier of the Business from maintaining the same business relationships
with Buyer (with respect to the Acquired Assets) after the Closing as it maintained with CSARL, Cat
UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar prior to the Closing.

     (c) Technical Assistance.

     (i) For a period of twenty-four (24) months following the Closing, CSARL, Cat
UK, Caterpillar and/or their Affiliates, through the engineering manager referred to in
Section 5.1 of the Strategic Alliance Agreement, shall provide mutually agreed technical
assistance to Buyer regarding Buyer’s receipt and use of the Caterpillar Intellectual
Property.

     (ii) Until the EAME Transition Date, Caterpillar shall, upon reasonable prior
written notice, permit JLG and its employees to have reasonable access during normal
business hours to Caterpillar’s telehandler facilities and employees to reasonably enable
JLG to employ the Caterpillar Intellectual Property in a manner consistent with Seller’s use
of the Caterpillar Intellectual Property in respect of the Business.

     (d) Certain Provisions Regarding Assignments.

     (i) Anything in this Agreement to the contrary notwithstanding, this Agreement
shall not constitute an agreement to assign or transfer any contract or any claim or right
or any benefit or obligation thereunder or resulting therefrom if an assignment or transfer
thereof, without the consent of a third party thereto, would constitute a breach or
violation thereof or impose any obligation or liability on CSARL, Cat UK, Cat Poland, Cat
Tosno, Cat Hungary, and/or Caterpillar and such a consent is not obtained at or prior to the
Closing, in which case the provisions of Section 6(d)(ii) shall apply.

     (ii) If a consent is required by any third party to any contract that is
intended to be an Acquired Asset and is not obtained at or before the Closing or if an
attempted transfer, conveyance or assignment is ineffective, the Parties shall cooperate in
any commercially reasonable arrangement that provides to Buyer the benefits under, and
imposes on Buyer the obligations and liabilities under, such contract.

     (e) Caterpillar Intellectual Property Limitation. After the Closing,
Buyer will only use the Caterpillar Intellectual Property for designing, manufacturing, having
manufactured, marketing, promoting, offering to sell, selling, leasing, financing, importing and
exporting (i) Caterpillar Branded

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Telehandlers (as defined in the Strategic Alliance Agreement to be sold exclusively to
authorized Caterpillar Dealers), (ii) the JLG Common Platform, and (iii) Buyer’s excavator, aerial
work platform or telehandler products; provided, however, that except as provided in clause (i) of
this sentence, Buyer will not use the Acquired Assets to produce telehandlers that, but for
markings and trade dress, are substantially similar to the B Series Telehandlers or Compact
Telehandlers for a period of three years from the ROW Transition Date.

     (f) Surplus Production Material. Promptly following the ROW
Transition Date, Cat UK shall sell to Buyer, and Buyer shall purchase from Cat UK, on an “AS IS,
WHERE IS” basis, free and clear of any lien, encumbrance, license, right of any third party, or
other restriction, but otherwise without any warranty of any kind, all new and current surplus
production material for B Series Telehandlers and Compact Telehandlers then owned by Cat UK for a
price equal to Caterpillar’s latest purchase order price, on sixty (60) day payment terms;
provided, that Buyer shall have no obligation to purchase inventory in excess of 3 months of
anticipated future needs or obsolete inventory. Such surplus production material shall be made
available to Buyer Ex Works (Incoterms 2000) Seller’s facilities.

     (g) Infringement Cooperation. If Caterpillar suspects or determines
that any Caterpillar Intellectual Property is being infringed, misused, violated or misappropriated
by a third party’s activities, it shall promptly notify JLG in writing. To the extent JLG elects
to prosecute such infringement, misuse, violation or misappropriation, Caterpillar shall provide
reasonable assistance to JLG, at JLG’s expense, including providing access to relevant documents
and other evidence, making its employees available at reasonable business hours, and joining the
action to the extent reasonably necessary to allow JLG to maintain the action, establish
jurisdiction or standing, or otherwise seek or recover damages or obtain other relief.

     Section 7. Conditions to Obligation to Close.

     (a) Conditions to Buyer’s Obligation. Buyer’s obligation to
consummate the transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:

     (i) The representations and warranties set forth in Section
3 above shall have been accurate, true and correct in all material respects on and as of
the date of this Agreement and, except to the extent that any such representation or
warranty is made solely as of the date hereof or as of another date earlier than the
Closing Date, shall also be accurate, true and correct in all material respects on and as
of the Closing Date with the same force and effect as though made by CSARL, Cat UK, Cat
Poland, Cat Tosno, Cat Hungary, and/or Caterpillar (as applicable) on and as of the
Closing Date; provided, that if one or more of such representations or warranties is not
accurate, true and correct in all material respects on and as of any such date, the
conditions precedent in this Section 7(a)(i) shall nevertheless be deemed satisfied unless
the inaccuracy, falsity or incorrectness of such representations or warranties would
reasonably be expected to have a Material Adverse Effect.

     (ii) CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, and
Caterpillar shall have performed and complied with all of their covenants hereunder in all
material respects through the Closing, except to the extent that such covenants are
qualified by the term “material,” or contain terms such as “Material Adverse Effect” or
“Material Adverse Change,” in which case CSARL, Cat UK, Cat Poland, Cat Tosno, Cat
Hungary, and Caterpillar shall have performed and complied with all of such covenants (as
so written, including the term “material” or “Material”) in all respects through the
Closing;

     (iii) there shall not be any injunction, judgment, order or decree in
effect preventing consummation of any of the transactions contemplated by this Agreement;

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     (iv) CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, and Caterpillar
shall have delivered to Buyer a certificate to the effect that each of the conditions
specified above in Section 7(a)(i)-(iii) is satisfied in all respects;

     (v) Seller shall have informed Buyer in writing that it has
concluded to its satisfaction any required employee, employee representative and/or trade
union information and consultation obligations in accordance with applicable law and/or
relevant agreements; and

     (vi) JLG and its Affiliates satisfying any required employee,
employee representative and/or trade union information and consultation obligations in
accordance with applicable law and/or relevant agreements.

Buyer
may waive any condition specified in this Section 7(a) if it executes a writing so stating at
or prior to the Closing.

     (b) Conditions to Seller’s Obligation. Seller’s obligation to
consummate the transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:

     (i) the representations and warranties set forth in Section
4 above shall have been accurate, true and correct in all material respects on and as of
the date of this Agreement and, except to the extent that any such representation or
warranty is made solely as of the date hereof or as of another date earlier than the
Closing Date, shall also be accurate, true and correct in all material respects on and as
of the Closing Date with the same force and effect as though made by Buyer on and as of
the Closing Date;

     (ii) Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing, except to the extent
that such covenants are qualified by the term “material,” or contain terms such as
“Material Adverse Effect” or “Material Adverse Change,” in which case Buyer shall have
performed and complied with all of such covenants (as so written, including the term
“material” or “Material”) in all respects through the Closing;

     (iii) there shall not be any injunction, judgment, order or
decree in effect preventing consummation of any of the transactions contemplated by this
Agreement;

     (iv) Buyer shall have delivered to CSARL, Cat UK, Cat Poland,
Cat Tosno, Cat Hungary, and Caterpillar a certificate to the effect that each of the
conditions specified above in Section 7(b)(i)-(iii) is satisfied in all respects;

     (v) Seller obtaining any material third party consents
described on Section 3(c) of the Disclosure Schedule;

     (vi) Cat UK and its Affiliates satisfying any required
employee, employee representative and/or trade union information and consultation
obligations in accordance with applicable law and/or relevant agreements; and

     (v) JLG shall have informed Seller in writing that it has
concluded to its satisfaction any required employee, employee representative and/or trade
union information and consultation obligations in accordance with applicable law and/or
relevant agreements.

Seller may waive any condition specified in this Section 7(b) if it executes a writing so stating
at or prior to the Closing.

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     Section 8. Breach of Representations; Third Party Indemnity.

     (a) Survival. Save for the indemnification provided for in Section
8(d)(v), (viii), (ix), (xiii) and (xiv) which shall survive the Closing and shall not be
limited in time, the representations and warranties of the Parties contained herein, and all other
obligations of the Parties under this Agreement (including with respect to indemnification), shall
survive the Closing for a period of three (3) years after the Closing Date. None of CSARL, Cat UK,
Cat Poland, Cat Tosno, Cat Hungary, Caterpillar or Buyer shall have any liability with respect to
claims first asserted in connection with any representation, warranty, or obligation after the
termination of the survival period specified in this Section 8(a).

     (b) Remedy for Breach of Representations. Subject to Section 8(e), in
the event of any breach of or any inaccuracy in any representation or warranty made by a Party in
Section 3 or 4 (as applicable), the other Party may bring a contract claim or action against such
alleged breaching Party for such breach or inaccuracy; provided, that the other Party shall provide
written notice to such alleged breaching Party not later than the close of business on the third
anniversary of the Closing Date, in each case with each such notice specifying (in reasonably
sufficient detail) the matter giving rise to the claim, the nature of the claim and, so far as
practicable, the amount claimed.

     (c) Indemnification by Cat IP Seller. Subject to 8(h), Cat IP Seller
agrees to indemnify Buyer against, and agrees to hold Buyer harmless from, Losses incurred by Buyer
as a result of third party claims to the extent arising out of the Caterpillar Intellectual
Property infringing, misappropriating or violating the Intellectual Property rights of such third
party (“Infringing Intellectual Property”); provided that Buyer has used and is using the
Caterpillar Intellectual Property in accordance with the terms of this Agreement and the Strategic
Alliance Agreement; and, provided further, that Buyer shall provide written notice to Cat IP Seller
within three (3) years of the Closing Date, in each case with each such notice specifying (in
reasonably sufficient detail) the matter giving rise to the claim, the nature of the claim and, so
far as practicable, the amount claimed. Notwithstanding the foregoing, Cat IP Seller and their
Affiliates shall have no liability or obligation whatsoever to Buyer with respect to (i) any
infringement to the extent that such infringement is due to a modification or improvement to the
Caterpillar Intellectual Property by a Person other than Cat IP Seller or their Affiliates, (ii)
any use of the Caterpillar Intellectual Property in a manner other than the use permitted under
this Agreement, (iii) any infringement claim, on a pro rata basis, not resulting entirely from the
Caterpillar Intellectual Property, or (iv) any infringement claim relating to the Caterpillar
Intellectual Property not utilized by Seller in the production of B Series Telehandlers or Compact
Telehandlers.

     (d) Employees

     (i) The Parties agree that the Transfer Regulations apply to the transaction effected
by this Agreement to transfer the contracts of employment of the Employees employed in the
Business on the EAME Manufacturing Transition Date from Cat UK to Buyer’s Affiliate on the
EAME Manufacturing Transition Date.

     (ii) Cat UK and Buyer acknowledge and agree that, by reason of the intention of Buyer
to move the production of telehandlers to the facilities of Buyer’s Affiliate in
Maasmechelen, Belgium on and with effect from the EAME Manufacturing Transition Date,
Buyer will not, from the EAME Manufacturing Transition Date, require the Employees to
carry out work at their current place of work, which will give rise to a potential
redundancy situation as that term is defined in section 139 Employment Rights Act 1996.

     (iii) Buyer and Cat UK agree that it will be necessary to consult with Employee
Representatives prior to the EAME Manufacturing Transition Date about the proposed
redundancies of the Employees referred to in Section 8(d)(ii) above, pursuant to section
188 of the Trade Union and Labour Relations (Consolidation) Act 1992. Cat UK agrees that
it

14

 

will conduct such consultation process as Buyer’s agent on behalf of Buyer but will
at all times consult with Buyer about the process and seek Buyer’s prior approval (such
approval not to be unreasonably withheld or delayed) to any information to be provided to
Employees as part of that process.

     (iv) If and to the extent that, pursuant to Section 8(d)(vii), it becomes necessary
for Cat UK to give notice of termination to any Employees, on behalf of Buyer, before the
EAME Manufacturing Transition Date, the Parties agree that such dismissals will be on the
grounds of redundancy as defined by section 139(1)(a)(ii) of the Employment Rights Act
1996, which will constitute an economic, technical or organisational reason entailing
changes in the workforce of either Cat UK or Buyer in accordance with regulation 8(2) of
the Transfer Regulations.

     (v) Cat UK shall indemnify Buyer against Employment Liabilities arising from or
connected with its acts or omissions or vicarious liabilities and the acts or omissions or
vicarious liabilities of Cat UK and its Affiliates in respect of the Employees or their
Employee Representatives which occurred at any time prior to or on the EAME Manufacturing
Transition Date. For the avoidance of doubt, this includes any protective awards under
the Transfer Regulations and/or the Trade Union and Labour Relations (Consolidation) Act
1992 to the extent that such awards are claimed or made as a result of Cat UK’s own acts
and/or omissions and such acts and/or omissions are not caused by Buyer’s failure to
comply with its obligations under the Transfer Regulations, or any reasonable requests for
assistance with the consultation processes made by Cat UK.

     (vi) Buyer shall indemnify Cat UK and its Affiliates against any protective awards
claimed or made in respect of the Employees or their Employee Representatives under the
Transfer Regulations to the extent that such awards are claimed or made as a result of
Buyer’s failure to comply with its obligations under the Transfer Regulations (including
regulation 10(3)) and under the Trade Union and Labour Relations (Consolidation) Act 1992
to the extent that such awards are claimed or made as a result of Buyer’s failure to
comply with any reasonable requests for assistance with the consultation process made of
it by Cat UK.

     (vii) Prior to the EAME Manufacturing Transition Date Cat UK will either (i)
redeploy, whether to Cat UK (but not in the Business) or to any Affiliate of Cat UK, (ii)
redeploy (following consultation with Buyer and Buyer’s agreement thereto), to Buyer or
any Affiliate of Buyer, or (iii) on behalf of Buyer, give notice to terminate lawfully
with effect from, or one day after, the EAME Manufacturing Transition Date the employments
by reason of redundancy (as defined by Section 139 Employment Rights Act 1996) of those of
the Employees who continue to be employed in the Business on the EAME Manufacturing
Transition Date. Cat UK and Buyer agree to co-operate, in good faith, to properly address
the matter of the potential redeployment of the Employees within Cat UK or its Affiliates
or to Buyer or its Affiliates, to the extent that that matter arises during the collective
consultation process. Cat UK hereby agrees to pay to the Employees such sums as are
properly payable in relation to the termination of their employment on the grounds of
redundancy for and on behalf of Buyer but at the expense of Cat UK.

     (viii) Cat UK shall indemnify Buyer against all Employment Liabilities arising from
or connected with the terminations referred to in Section 8(d)(vii) above other than
Employment Liabilities incurred by Buyer directly as a result of Buyer being found by an
employment tribunal to have acted unfairly or unreasonably in not considering or
permitting the redeployment of any of the Employees to identified suitable available
vacancies with Buyer or any Affiliate of Buyer.

15

 

     (ix) In the event that any Employee alleges that notwithstanding Section 8(d)(vii)
his/her employment should have had effect with Buyer following the date on which the
employment of that Employee in the Business was terminated or a tribunal or court so
decides or Cat UK fails to comply with Section 8(d)(vii), the following provisions shall
apply:

     (A) Buyer may, subject to Section 8(d)(ix)(D), terminate such Employees’
employment forthwith. Section 8(d)(ix)(B) applies to this Section 8(d)(ix)(A).

     (B) Subject to Section 8(d)(ix)(C), Seller shall indemnify Buyer against
Employment Liabilities arising from or connected with any termination of employment
by Buyer pursuant to Section 8(d)(ix)(A) and Employment Costs incurred by Buyer in
respect of the relevant Employee(s)’ employment for the period beginning with the
EAME Manufacturing Transition Date and ending on the date of the termination of
employment pursuant to Section 8(d)(ix)(A) above.

     (C) The indemnity provided in Section 8(d)(ix)(B) above shall not apply to any
contractual commitment entered into by Buyer relating to or arising from such
termination and which is additional to the existing contractual entitlements of the
Employee as at the EAME Manufacturing Transition Date.

     (D) Buyer shall consult with Cat UK about any such proposed termination not
less than 3 days before any decision is made and Cat UK shall effect the termination
as agent for Buyer and on Buyer’s behalf but at all times in consultation with
Buyer.

     (x) Cat UK, acting as agent for and on behalf of Buyer (but at Cat UK’s expense),
shall up to the effective date of the termination of the employment of the Employees
pursuant to Sections 8(d) (vii) or 8(d)(ix)(A), procure that the Employees continue to
participate in any Cat UK or any Cat UK Affiliate scheme or plan in which they
participated prior to the EAME Manufacturing Transition Date and shall otherwise continue
to administer their employment as if they were Cat UK employees.

     (xi) Both Parties shall comply with their respective obligations under the Transfer
Regulations and the Trade Union and Labour Relations (Consolidation) Act 1992. This shall
include the obligations under regulation 10(3) of the Transfer Regulations which requires
Buyer to supply to Cat UK relevant details of the measures which it envisages taking in
respect of the Employees or, if no such measures are envisaged, that fact. Cat UK shall
seek Buyer’s prior approval (such approval not to be unreasonably withheld or delayed) to
any information to be provided to Employees in compliance with the said obligations.

     (xii) Cat UK and Buyer agree that, in the event that either of them is required to
indemnify the other in accordance with the provisions of this Section 8(d), the following
provisions will apply:

     (A) the indemnifying Party shall have conduct of the relevant litigation and
the indemnified Party shall comply with the reasonable requests of the indemnifying
Party in that respect;

     (B) the indemnified Party shall not, by act or omission, take any steps which
increases (or is likely to increase) the liability of the indemnifying Party under
the relevant indemnity without the prior written consent of the indemnifying Party;

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     (C) both Cat UK and Buyer shall co-operate in good faith (including responding
promptly to requests for assistance) regarding any Employment Liability including in
respect of the use and disclosure of documents, case preparation and the
availability of witnesses;

     (D) in the conduct of any litigation (or settlement thereof) both Cat UK and
Buyer will have regard to the effects of adverse publicity on their marketplace
reputations; and

     (E) in the event that the indemnified Party fails to comply with its
obligations under this Section 8(d)(xii), the relevant indemnity shall not apply in
respect of the particular Employment Liability in question.

     (xiii) The Parties agree that Buyer and Seller will agree and implement comparable
arrangements (limited to the extent required by national legislation) and indemnification
to those set out in Sections 8(d)(i) to 8(d)(xii) (inclusive) in respect of employees of
Seller or any Seller’s Affiliate employed outside the United Kingdom at the relevant date
if the Parties, having had the benefit of local legal advice, reasonably agree that
pursuant to the transactions envisaged by this Agreement relevant national legislation is
likely to apply to transfer the contracts of employment of any such employees on the EAME
Manufacturing Transition Date or at such other date from Seller or Seller’s Affiliate to
Buyer or Buyer’s Affiliate. Without prejudice to the generality of the foregoing, Seller
shall indemnify Buyer against Employment Costs and Employment Liabilities arising from
Seller’s acts or omissions or vicarious liabilities and the acts or omissions or vicarious
liabilities of any Seller’s Affiliate in respect of any such employees or their Employee
Representatives which occurred at any time prior to the EAME Manufacturing Transition Date
or such other date of transfer.

     (xiv) In the event that the Parties agree that relevant national legislation, as
referred to in Section 8(d)(xiii) above, would not be likely to apply to transfer the
contracts of employment of any employee of the applicable Seller employing such employee
(the “Applicable Seller”) outside the United Kingdom (the “Local Employees”) to Buyer or
Buyer’s Affiliate, but a Local Employee alleges that pursuant to the transactions
envisaged by this Agreement his/her employment has (or should have) so transferred to
Buyer or Buyer’s Affiliate on the EAME Manufacturing Transition Date or at such other
date, or a tribunal or court so decides, the following provisions shall apply:

     (A) both Applicable Seller, or Applicable Seller’s Affiliate, and Buyer, or
Buyer’s Affiliate, shall notify each other of such allegation or decision as soon as
reasonably practicable and, in any event, no later than 10 working days of it
becoming known to them;

     (B) Applicable Seller, or Applicable Seller’s Affiliate, shall within a further
10 working days of such notification make an offer of employment, in writing, to
such Local Employee on terms and conditions which are no less favourable than those
applicable to him/her as at immediately before the EAME Manufacturing Transition
Date or such other relevant date;

     (C) if either Applicable Seller, or Applicable Seller’s Affiliate, fails to
make an offer as described in Section 8(d)(xiv)(B) above, or such Local Employee has
not accepted such an offer within 10 working days of his/her receipt of it, or such
Local Employee accepts such offer but fails to join Applicable Seller’s (or
Applicable Seller’s Affiliate’s) employment within 5 working days of such
acceptance, Buyer (or Buyer’s Affiliate) may, subject to Section 8(d)(xiv)(G)
terminate such Local

17

 

Employee’s employment forthwith and the provisions of Sections 8(d)(xiv)(E) and
(F) shall apply;

     (D) if the relevant Local Employee accepts the offer referred to in Section
8(d)(xiv)(B) above within 10 working days of his/her receipt of it, the Parties
shall use their best endeavours to procure that within 5 working days of such
acceptance such Local Employee shall resign from the employment of Buyer (or Buyer’s
Affiliate) and commence employment with Applicable Seller (or Applicable Seller’s
Affiliate). If such Local Employee fails to resign from Buyer’s (or Buyer’s
Affiliate’s) employment within such 5 day period, Buyer (or Buyer’s Affiliate) may,
subject to Sections 8(d)(xiv)(G), terminate such Local Employee’s employment
forthwith and the applicable provisions of Sections 8(d)(xiv)(E) and (F) shall
apply;

     (E) Applicable Seller shall indemnify Buyer and keep it fully indemnified
against Employee Liabilities arising from or connected with any termination of
employment by Buyer (or Buyer’s Affiliate) pursuant to Sections 8(d)(xiv)(C) and (D)
above and all Employment Costs incurred by Buyer (or Buyer’s Affiliate) in respect
of the relevant Local Employee(s) employment for the period beginning with EAME
Manufacturing Transition Date or such other relevant date and ending on the date of
the termination of employment pursuant to Sections 8(d)(xiv)(C) and (D) above;

     (F) the indemnity provided in Section 8(d)(xiv)(E) above shall not apply to any
contractual commitment entered into by Buyer relating to or arising from such
termination and which is additional to the existing contractual entitlements of the
Local Employee as at the EAME Manufacturing Transition Date or such other relevant
date; and

     (G) Buyer, or Buyer’s Affiliate, shall consult with Applicable Seller, or
Applicable Seller’s Affiliate, about any such termination not less than 3 days
before any decision is made and Seller (or Seller’s Affiliate) shall effect the
termination as agent for Buyer and on Buyer’s behalf but at all times in
consultation with Buyer.

     (e) Limitations on Liability of Seller. Notwithstanding any other
provision of this Agreement:

     (i) Save for any Employment Liabilities and Employment Costs incurred under
Section 8(d) and which are addressed in Section 8(d), Buyer shall have the right to payment
by CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar (as applicable) for
Losses incurred or suffered by Buyer under or in any manner connected with this Agreement
only if, and only to the extent that, Buyer shall have incurred, as to all aggregated
successful contract actions based on breach of this Agreement under Section 8(b) or any
other provision of this Agreement, and indemnifiable third party claims under Section 8(c),
Losses in excess of $750,000.

     (ii) Seller shall have no liability under this Agreement in excess of
$20,000,000.00 in the aggregate (except for those indemnifiable Employment Liabilities and
Employment Costs set forth in Section 8(d), all of which are addressed in Section 8(d)).

     (iii) SAVE FOR ANY EMPLOYMENT LIABILITIES INCURRED UNDER SECTION 8(d), IN NO
EVENT SHALL CSARL, CAT UK, CAT POLAND, CAT TOSNO, CAT HUNGARY, CATERPILLAR OR BUYER HAVE ANY
LIABILITY UNDER THIS AGREEMENT OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
HEREBY FOR SPECIAL, SPECULATIVE, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES OR
FOR LOST PROFITS.

18

 

     (iv) THE SOLE AND EXCLUSIVE LIABILITY AND RESPONSIBILITY OF CSARL, CAT UK, CAT
POLAND, CAT TOSNO, CAT HUNGARY, AND CATERPILLAR TO BUYER UNDER OR IN CONNECTION WITH THE
ACQUIRED ASSETS, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING FOR ANY
SUCCESSFUL CONTRACT ACTION BASED ON BREACH OF THIS AGREEMENT OR INDEMNIFIABLE THIRD PARTY
CLAIMS UNDER THIS SECTION 8 OR FOR ANY OTHER REASON), AND THE SOLE AND EXCLUSIVE REMEDY OF
BUYER WITH RESPECT TO ANY OF THE FOREGOING, SHALL BE AS SET FORTH IN THIS SECTION 8. To the
extent that Buyer has any Losses for which it may assert any other right to indemnification,
contribution or recovery from CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or
Caterpillar (whether under this Agreement or under any common law theory or any statute or
other law), Buyer hereby waives, releases and agrees not to assert such right, and Buyer
agrees to cause each of its Affiliates to waive, release and agree not to assert such right,
regardless of the theory upon which any claim may be based, whether contract, equity, tort,
fraud, warranty, strict liability or any other theory of liability.

     (v) Seller shall have no liability under or otherwise in connection with this
Agreement or any document delivered at the Closing or the transactions contemplated hereby
or thereby for any Loss (A) to the extent arising as a result of any action taken or omitted
to be taken by Buyer, (B) to the extent arising from or relating to any matter disclosed on
the Schedules to this Agreement, and (C) to the extent arising from a change in law that
becomes effective after the Closing Date.

     (f) Notice of Third Party Claims; Assumption of Defense. Buyer shall
give notice as promptly as is reasonably practicable, but in any event no later than five (5)
business days after receiving notice thereof, to CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary,
or Caterpillar (as applicable) of the assertion of any claim, or the commencement of any suit,
action or proceeding, by any Person not a party hereto in respect of which indemnity may be sought
under this Agreement (which notice shall specify in reasonable detail the nature and amount of such
claim together with such information as may be necessary for CSARL, Cat UK, Cat Poland, Cat Tosno,
Cat Hungary, or Caterpillar (as applicable) to determine that the limitations in Section 8(e) have
been satisfied or do not apply); provided, that the failure of Buyer to give such notice shall not
relieve CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar (as applicable) of its
obligations under this Section 8 except to the extent (if any) that CSARL, Cat UK, Cat Poland, Cat
Tosno, Cat Hungary, or Caterpillar (as applicable) shall have been prejudiced thereby. CSARL, Cat
UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar (as applicable) may, at its own expense, (i)
participate in the defense of any such claim, suit, action or proceeding and (ii) upon notice to
Buyer, at any time during the course of any such claim, suit, action or proceeding, assume the
defense thereof with counsel of its own choice and in the event of such assumption, shall have the
exclusive right, subject to clause (i) of Section 8(g), to settle or compromise such claim, suit,
action or proceeding. If CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar (as
applicable) assumes such defense, Buyer shall have the right (but not the duty) to participate in
the defense thereof and to employ counsel, at its own expense, separate from the counsel employed
by CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar (as applicable). Whether or
not CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar (as applicable) chooses to
defend or prosecute any such claim, suit, action or proceeding, all of the Parties shall cooperate
in the defense or prosecution thereof.

     (g) Settlement or Compromise. Any settlement or compromise made or
caused to be made by Buyer (unless CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or
Caterpillar (as applicable) has the exclusive right to settle or compromise under clause (ii) of
Section 8(f)), CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar, as the case may
be, of any such claim, suit, action or proceeding of the kind referred to in Section 8(f) shall
also be binding upon CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, Caterpillar or Buyer, as
the case may be, in the same manner as if a final judgment or decree had been entered by a court of
competent jurisdiction in the

19

 

amount of such settlement or compromise; provided, that (i) no obligation, restriction or Loss
shall be imposed on Buyer as a result of such settlement or compromise without its prior written
consent, which consent shall not be unreasonably withheld, and (ii) Buyer will not compromise or
settle any claim, suit, action or proceeding without the prior written consent of CSARL, Cat UK,
Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar (as applicable), which consent shall not be
unreasonably withheld.

     (h) Remedy for Intellectual Property Infringement. With respect to the
Intellectual Property infringement indemnification obligation of Cat IP Seller under Section 8(c),
Cat IP Seller may, in its sole discretion, settle any such claim on a basis requiring Cat IP Seller
to substitute for the Infringing Intellectual Property (excluding third party intellectual
property) alternative, substantially equivalent non-infringing Intellectual Property. In the event
that any preliminary injunction, temporary restraining order, or final injunction shall be
obtained, Cat IP Seller shall promptly, at its sole option, either (i) obtain the right for
continued use of the Infringing Intellectual Property, (ii) modify the Infringing Intellectual
Property to avoid such infringement while obtaining substantially equivalent benefit and
functionality, (iii) substitute for the Infringing Intellectual Property alternative, substantially
equivalent Intellectual Property, or (iv) indemnify Buyer for its Losses pursuant to Section 8(c).

     (i) Time Limits. Any right to indemnification or other recovery
under this Section 8 shall only apply to Losses with respect to which the Party seeking recovery
shall have notified the other Party within the applicable time period set forth in this Section 8.
If any claim for indemnification or other recovery is timely asserted under this Section 8, the
Party seeking recovery shall have the right to bring an action, suit or proceeding with respect to
such claim within one (1) year after first giving the other Party notice thereof, but may not bring
any such action, suit or proceeding thereafter.

     (j) Knowledge. Notwithstanding anything contained herein to the
contrary, no Party shall have (i) any liability for any breach of or inaccuracy in any
representation or warranty by such Party, if the other Party or its officers, employees, counsel or
other representatives (A) had Knowledge at or before the Closing of the facts as a result of which
such representation or warranty was breached or inaccurate, or (ii) any liability after the Closing
for any breach of or failure to perform before the Closing any covenant or obligation of such Party
if the other Party or its officers, employees, counsel or other representatives had Knowledge at or
before the Closing of such breach or failure.

     (k) Net Losses and Subrogation.

     (i) Notwithstanding anything contained herein to the contrary, the amount of
any Losses incurred or suffered by any Party seeking indemnification or recovery under this
Section 8 (for the avoidance of doubt, including such Party’s Affiliates) shall be
calculated after giving effect to (A) any insurance proceeds received by the Party seeking
recovery with respect to such Losses, (B) any Tax benefit realized by the Party seeking
recovery arising from the facts or circumstances giving rise to such Losses and (C) any
recoveries obtained by the Party seeking recovery from any other third party. The Party
seeking recovery shall exercise commercially reasonable efforts to obtain such proceeds,
benefits or recoveries. If any such proceeds, benefits or recoveries are received by the
Party seeking recovery with respect to any Losses after the other Party has made a payment
to the Party seeking recovery with respect thereto, the Party seeking recovery shall pay to
the other Party the amount of such proceeds, benefits or recoveries (up to the amount of the
other Party’s payment).

     (ii) Upon making any payment to the Party seeking recovery in respect of any
Losses, the other Party will, to the extent of such payment, be subrogated to all rights of
the Party seeking recovery against any third party in respect of the Losses to which such
payment relates. The Parties will execute upon request all instruments reasonably necessary
to evidence or further perfect such subrogation rights.

20

 

     (l) Purchase Price Adjustments. To the extent permitted by law, any
amounts payable under Section 8(b), (c) or (d) shall be treated by Buyer and Seller as an
adjustment to the Purchase Price.

     Section 9. Termination.

     (a) Termination of Agreement. Certain of the Parties may terminate
this Agreement as provided below:

     (i) Buyer and Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;

     (ii) Buyer may terminate this Agreement by giving written
notice to CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, and Caterpillar at any time
prior to the Closing in the event (A) CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary,
or Caterpillar has within the then previous ten (10) business days given Buyer any notice
pursuant to Section 5(d)(i) above, and (B) the development that is the subject of the
notice has had a Material Adverse Effect;

     (iii) Buyer may terminate this Agreement by giving written
notice to CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, and Caterpillar at any time
prior to the Closing (A) in the event CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary,
or Caterpillar has breached any material representation, warranty, or covenant contained
in this Agreement (other than the representations and warranties in Section 3(i)-(k)
above) in any material respect, Buyer has notified CSARL, Cat UK, Cat Poland, Cat Tosno,
Cat Hungary, or Caterpillar (as applicable) of the breach, and the breach has continued
without cure for a period of thirty (30) days after the notice of breach or (B) if the
Closing shall not have occurred on or before March 1, 2006, by reason of the failure of
any condition precedent under Section 7(a) hereof (unless the failure results primarily
from Buyer itself breaching any representation, warranty, or covenant contained in this
Agreement); and

     (iv) CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, and
Caterpillar may terminate this Agreement by giving written notice to Buyer at any time
prior to the Closing (A) in the event Buyer has breached any material representation,
warranty, or covenant contained in this Agreement in any material respect, CSARL, Cat UK,
Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar has notified Buyer of the breach, and
the breach has continued without cure for a period of thirty (30) days after the notice of
breach or (B) if the Closing shall not have occurred on or before March 1, 2006, by reason
of the failure of any condition precedent under Section 7(b) hereof (unless the failure
results primarily from CSARL, Cat UK, Cat Poland, Cat Tosno, Cat Hungary, or Caterpillar
itself breaching any representation, warranty, or covenant contained in this Agreement).

     (b) Effect of Termination. If a Party terminates this Agreement
pursuant to Section 9(a) above, all rights and obligations of the Parties hereunder shall terminate
without any liability of a Party to the other Parties (except for any liability of a Party then in
breach).

     Section 10. Miscellaneous.

     (a) Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to the subject matter of this Agreement
prior to the Closing without the prior written approval of the other Parties; provided, however,
that any Party may make any public disclosure it believes in good faith is required by applicable
law or any listing or trading agreement concerning its publicly traded securities (in which case
the disclosing Party will use its reasonable best efforts to advise the other Parties prior to
making the disclosure).

21

 

     (b) No Third-Party Beneficiaries. Except as maybe specifically
provided in this Agreement with respect to Affiliates, this Agreement shall not confer any rights
or remedies upon any Person other than the Parties and their respective successors and permitted
assigns.

     (c) Entire Agreement. With the exception of the confidentiality
obligations found in the Confidentiality Agreement between Caterpillar Inc. and Buyer dated as of
March 29, 2005, as amended, which confidentiality obligations shall continue for a period of two
years after the Closing Date, this Agreement, the Strategic Alliance Agreement and the Component
Supply Agreement constitute the entire agreement between the Parties and supersede any prior
understandings, agreements (including the Letter of Intent between the Parties dated as of August
24, 2005), or representations by or between the Parties, written or oral, to the extent they relate
in any way to the subject matter hereof.

     (d) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and permitted assigns.
Except as otherwise provided herein, no Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval of the other
Parties; provided, however, that for the avoidance of doubt, CSARL, Cat UK, Cat Poland, Cat Tosno,
Cat Hungary, Caterpillar or Buyer may (i) assign any or all of its rights and interests hereunder
to one or more of its Affiliates, and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases CSARL, Cat UK, Cat Poland, Cat Tosno, Cat
Hungary, Caterpillar or Buyer, as the case may be, shall nonetheless remain responsible for the
performance of all of its obligations hereunder).

     (e) Counterparts. This Agreement may be executed in one or more
counterparts (including by means of facsimile), each of which shall be deemed an original but all
of which together will constitute one and the same instrument.

     (f) Construction. The recitals and section headings contained in
this Agreement are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

     (g) Notices. Any notice, request, instruction or other document to be
given hereunder by a Party shall be in writing and shall be deemed to have been given (a) when
received if given in person or by courier or a courier service, (b) on the date of transmission if
sent by telex, facsimile or other wire transmission (receipt confirmed) or (c) five (5) business
days after being deposited in the mail, certified or registered, postage prepaid:

If to Seller:

Caterpillar Hungary Components Manufacturing Ltd.

2117 Isaszeg Hrsz

0185/3, Hungary

Attn: Managing Director

Facsimile:

Caterpillar S.A.R.L.

76 Route de Frontenex

P.O. Box 6000

Geneva 6, 1211, Switzerland

Attn: Associate General Counsel

Facsimile: +41-22-849.4982

Caterpillar Poland Sp. z o.o.,

U1. Lubielski 74

23-300, Janow Lubelski, Poland

22

 

Attn: Managing Director

Facsimile: +48-15 8725160

Caterpillar Tosno, L.L.C.

1/1 Moskovskoye shosse

Leningradskaya Olbast

Tosno, Russia 187000

Attn: General Director

Facsimile: +7-812-953.9993

Caterpillar (U.K.) Limited

Peckleton Lane, Co. Desford

Leicester, England LE9 9JT, United Kingdom

Attn: Managing Director

Facsimile: +44 1733 584905

Caterpillar Inc.

100 N.E. Adams St.

Peoria, Illinois 61629-9600

Attn: Associate General Counsel

Facsimile: (309) 675-1795

If to Buyer:

JLG Industries, Inc.

13224 Fountainhead Plaza

Hagerstown, Maryland 21742-2678

Attn: Senior Vice President and General Counsel

Facsimile: (240) 313-1807

with a copy to:

Covington & Burling

1201 Pennsylvania Avenue, NW

Washington, DC 20004

Attn: W. Andrew Jack, Esq.

Facsimile: (202) 662-6291

or such other address as any Party may from time to time specify by notice to the other Parties.
Any Party may change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other Parties notice in the manner
herein set forth.

     (h) Applicable Law; Choice of Forum. This Agreement shall be governed
by and construed and enforced in accordance with the domestic laws of the State of Illinois without
giving effect to any choice or conflict of law provision or rule (whether of the State of Illinois
or of any other jurisdiction) that would cause the application of laws of any jurisdiction other
than the State of Illinois.

     (i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by CSARL, Cat UK, Cat
Poland, Cat Tosno, Cat Hungary, Caterpillar and Buyer. No waiver by a Party of any provision of
this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be valid unless the same shall be in writing and signed by CSARL,
Cat UK, Cat Poland, Cat Tosno, Cat Hungary, Caterpillar or Buyer (as applicable) making such
waiver, nor shall such waiver be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or

23

 

covenant hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.

     (j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other jurisdiction.

     (k) Expenses. Buyer and Seller will each bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby. Without limiting the generality of the foregoing, all transfer,
documentary, sales, use, stamp, registration and other such Taxes, and all conveyance fees,
recording charges and other fees and charges (including any penalties and interest) incurred in
connection with the consummation of the transactions contemplated by this Agreement shall be paid
by Buyer when due, and Buyer will, at its own expense, file all necessary Tax Returns and other
documentation with respect to all such Taxes, fees and charges, and, if required by applicable law,
the Parties will join in the execution of any such Tax Returns and other documentation.

     (l) 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. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. Unless the context requires otherwise, singular
includes plural and vice versa and any gender includes every gender, and where any word or phrase
is given a defined meaning, any other grammatical form of that word or phrase will have a
corresponding meaning. The word “including” shall mean “including without limitation”.

     (m) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a part hereof.

     (n) Bulk Transfer Laws. Buyer and Seller, on behalf of themselves
and their respective Affiliates, hereby waive compliance by the other Parties (and the other
Parties’ Affiliates) with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.

     (o) Remittances. All remittances, payments, mail and other
communications relating to the Acquired Assets received by Seller at any time after the Closing
Date shall be promptly turned over to Buyer by Seller. All remittances, payments, mail and other
communications relating to any asset that is not an Acquired Asset received by Buyer at any time
after the Closing Date shall be promptly turned over to Seller by Buyer.

     (p) VAT. The Purchase Price is exclusive of VAT. If any VAT is
payable by a Seller entity in respect of the sale of any of the Acquired Assets pursuant to this
Agreement, subject to provision of a VAT invoice for such amount in the form referred to below, an
additional amount shall be payable in respect of the purchase of such Acquired Assets equal to VAT
at the applicable rate on such part of the Purchase Price as is attributed to those Acquired Assets
pursuant to this Agreement. Such additional amount shall be payable to the relevant Seller entity
by the Designated Purchaser of the relevant Acquired Assets (or by Buyer if there is no Designated
Purchaser of those Acquired Assets). Any such additional amount shall be payable not later than 14
days after delivery to such Designated Purchaser (or to Buyer, if applicable) of a VAT invoice in
the prescribed form correctly issued by the relevant Seller entity to the relevant Designated
Purchaser (or to Buyer, if applicable). Section 10(k) shall have no application in relation to any
VAT which is covered by this clause.

24

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date first above
written.

	 	 	 	 	 	 	 
	 	 	JLG INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	CATERPILLAR S.A.R.L.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	CATERPILLAR (U.K.) LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Klaus O. Ukens	 	 
	 

	 	 	 	Title: Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	CATERPILLAR POLAND SP. Z O.O.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Klaus O. Ukens	 	 
	 

	 	 	 	Title: Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	CATERPILLAR TOSNO, L.L.C.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Klaus O. Ukens	 	 
	 

	 	 	 	Title: Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	CATERPILLAR HUNGARY COMPONENTS MANUFACTURING LTD	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Klaus O. Ukens	 	 
	 

	 	 	 	Title: Attorney-in-Fact	 	 
	 
	 	 	 	 	 	 
	 	 	CATERPILLAR INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Klaus O. Ukens	 	 
	 

	 	 	 	Title: Attorney-in-Fact	 	 

25exv10w1

 

Exhibit 10.1

THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT

     This Amendment, dated as of October 27, 2005, is made by and between ZILA NUTRACEUTICALS,
INC., an Arizona corporation (“ZN”), ZILA BIOTECHNOLOGY, INC., an Arizona corporation (“ZB”), ZILA
PHARMACEUTICALS, INC., a Nevada corporation (“ZP”), ZILA SWAB TECHNOLOGIES, INC., an Arizona
corporation (“ZS”), (collectively, jointly and severally the “Borrower”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION, acting through its WELLS FARGO BUSINESS CREDIT operating division (the
“Lender”).

Recitals

     The Borrower and the Lender are parties to a Credit and Security Agreement dated as of
February 6, 2004, as amended from time to time (the “Credit Agreement”). Capitalized terms used in
these recitals have the meanings given to them in the Credit Agreement unless otherwise specified.

     The Borrower has requested that certain amendments be made to the Credit Agreement, which the
Lender is willing to make pursuant to the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
herein contained, it is agreed as follows:

     1. Amendments. The Credit Agreement is hereby amended as follows:

	 	(a)	 	Sections 6.2(a) through 6.2(c) are hereby deleted and replaced as follows:
	 
	 	 	 	(a) Quarterly Net Worth. The Borrower covenants that as of
July 31, 2005, the Guarantor had a Book Net Worth of not less
than $51,721,950.00. The Borrower covenants that, commencing
with the fiscal quarter ending October 31, 2005 and
continuing each quarter thereafter, the Guarantor shall not
achieve a Book Net Worth decrease of more than the amounts
set forth below as measured from the last day of the
immediately preceding fiscal year.

	 	 	 	 	 
	Quarter Ending	 	Maximum Net Worth Decrease	 
	October 31, 2005
	 	 	($7,820,000.00	)
	January 31, 2006
	 	 	($11,820,000.00	)
	April 30, 2006
	 	 	($11,820,000.00	)
	July 31, 2006
	 	 	($14,570,000.00	)

	 	 	 	(b) Monthly Net Worth. The Borrower covenants that
commencing with the month ending July 31, 2005 and continuing
on the last day of each month thereafter, the Guarantor’s
Book Net Worth as of the last day of each such month shall
not be less than the amounts set forth below:

	 	 	 	 	 
	July, 2005
	 	$	39,000,000.00	 
	August, 2005 through October, 2005
	 	$	44,000,000.00	 
	November, 2005 through January, 2006
	 	$	40,000,000.00	 

-1-

 

	 	 	 	 	 
	February, 2006 through April, 2006
	 	$	40,000,000.00	 
	May, 2006 through July, 2006
	 	$	37,250,000.00	 

	 	 	 	(c) Capital Expenditures. The Borrower and the Guarantor
together will not incur or contract to incur Capital
Expenditures of more than $3,500,000.00 in the aggregate
during 2006 fiscal year.

     (b) Exhibit B of the Credit Agreement is hereby deleted and replaced with Exhibit B
attached hereto.

     2. No Other Changes. Except as explicitly amended by this Amendment, all of
the terms and conditions of the Credit Agreement shall remain in full force and effect and shall
apply to any advance or letter of credit thereunder.

     3. Conditions Precedent. This Amendment shall be effective when the Lender
shall have received an executed original hereof, together with each of the following, each in
substance and form acceptable to the Lender in its sole discretion:

     (a) The Acknowledgment and Agreement of Guarantor set forth at the end of this
Amendment, duly executed by the Guarantor and Subordinated Creditor.

     (b) A Certificate of the Secretary of the Borrower certifying as to (i) the
resolutions of the board of directors of the Borrower approving the execution and delivery of this
Amendment, (ii) the fact that the articles of incorporation and bylaws of the Borrower, which were
certified and delivered to the Lender pursuant to the Certificate of Authority of the Borrower’s
secretary or assistant secretary dated as of February 6, 2004 continue in full force and effect and
have not been amended or otherwise modified except as set forth in the Certificate to be delivered,
and (iii) certifying that the officers and agents of the Borrower who have been certified to the
Lender, pursuant to the Certificate of Authority of the Borrower’s secretary or assistant secretary
dated as of February 6, 2004, as being authorized to sign and to act on behalf of the Borrower
continue to be so authorized or setting forth the sample signatures of each of the officers and
agents of the Borrower authorized to execute and deliver this Amendment and all other documents,
agreements and certificates on behalf of the Borrower.

     (c) Such other matters as the Lender may require.

     4. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:

     (a) The Borrower has all requisite power and authority to execute this Amendment and
to perform all of its obligations hereunder, and this Amendment has been duly executed and
delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms.

     (b) The execution, delivery and performance by the Borrower of this Amendment has
been duly authorized by all necessary corporate action and do not (i) require any authorization,
consent or approval by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or
of any order, writ, injunction or decree presently in effect, having applicability to the Borrower,
or the articles of incorporation or by-laws of the Borrower, or (iii) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any other agreement, lease
or instrument to which the Borrower is a party or by which it or its properties may be bound or
affected.

-2-

 

     (c) All of the representations and warranties contained in Article V of the Credit
Agreement are correct on and as of the date hereof as though made on and as of such date, except to
the extent that such representations and warranties relate solely to an earlier date.

     5. References. All references in the Credit Agreement to “this Agreement”
shall be deemed to refer to the Credit Agreement as amended hereby; and any and all references in
the Security Documents to the Credit Agreement shall be deemed to refer to the Credit Agreement as
amended hereby.

     6. No Waiver. The execution of this Amendment and acceptance of any
documents related hereto shall not be deemed to be a waiver of any Default or Event of Default or
Default Period under the Credit Agreement or breach, default or event of default under any Security
Document or other document held by the Lender, whether or not known to the Lender and whether or
not existing on the date of this Amendment.

     7. Release. The Borrower and each Guarantor by signing the Acknowledgment
and Agreement of Guarantor each hereby absolutely and unconditionally releases and forever
discharges the Lender, and any and all participants, parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all
of the present and former directors, officers, agents and employees of any of the foregoing, from
any and all claims, demands or causes of action of any kind, nature or description, whether arising
in law or equity or upon contract or tort or under any state or federal law or otherwise, which the
Borrower or such Guarantor has had, now has or has made claim to have against any such person for
or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of
time to and including the date of this Amendment, whether such claims, demands and causes of action
are matured or unmatured or known or unknown.

     8. Costs and Expenses. The Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse the Lender on demand for all costs and expenses incurred
by the Lender in connection with the Loan Documents, including without limitation all reasonable
fees and disbursements of legal counsel. Without limiting the generality of the foregoing, the
Borrower specifically agrees to pay all fees and disbursements of counsel to the Lender for the
services performed by such counsel in connection with the preparation of this Amendment and the
documents and instruments incidental hereto. The Borrower hereby agrees that the Lender may, at
any time or from time to time in its sole discretion and without further authorization by the
Borrower, make a loan to the Borrower under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and expenses.

     9. Miscellaneous. This Amendment and the Acknowledgment and Agreement of
Guarantor may be executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.

-3-

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the date first written above.

	 	 	 	 	 
	 	ZILA NUTRACEUTICALS, INC., an Arizona corporation

 	 
	 	By  	/s/    Andrew A. Stevens
 	 
	 	 	 	 
	 	 	Its Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	ZILA BIOTECHNOLOGY, INC., an Arizona corporation

 	 
	 	By  	/s/    Andrew A. Stevens
 	 
	 	 	 	 
	 	 	Its Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	ZILA PHARMACEUTICALS, INC., a Nevada corporation

 	 
	 	By  	/s/    Andrew A. Stevens
 	 
	 	 	 	 
	 	 	Its Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	ZILA SWAB TECHNOLOGIES, INC., an Arizona corporation

 	 
	 	By  	/s/    Andrew A. Stevens
 	 
	 	 	 	 
	 	 	Its Vice President and Chief Financial Officer 	 

-4-

 

	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL
ASSOCIATION, acting through its

Wells Fargo Business Credit operating division

 	 
	 	By  	/s/  Darcy Della Flora
 	 
	 	 	 	 
	 	 	Its Vice President 	 

-5-

 

	 	 	 	 	 

ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS

     The undersigned, a guarantor of the indebtedness of the Borrower, as defined above (the
“Borrower”) to Wells Fargo Business Credit, Inc. (the “Lender”) pursuant to a Guaranty dated as of
February 6, 2004 (the “Guaranty”), hereby (i) acknowledges receipt of the foregoing Amendment; (ii)
consents to the terms (including without limitation the release set forth in paragraph 7 of the
Amendment) and execution thereof; (iii) reaffirms his or its obligations to the Lender pursuant to
the terms of his or its Guaranty; and (iv) acknowledges that the Lender may amend, restate, extend,
renew or otherwise modify the Credit Agreement and any indebtedness or agreement of the Borrower,
or enter into any agreement or extend additional or other credit accommodations, without notifying
or obtaining the consent of the undersigned and without impairing the liability of the undersigned
under the Guaranty for all of the Borrower’s present and future indebtedness to the Lender.

	 	 	 	 	 
	 	ZILA, INC., a Delaware corporation

 	 
	 	By  	/s/    Andrew A. Stevens
 	 
	 	 	 	 
	 	 	Its Vice President and Chief Financial Officer 	 

-6-

 

	 	 	 	 	 

Exhibit B to Credit and Security Agreement

Compliance Certificate

	 	 	 
	To:
	 	 
	 

	 	 
	 

	 	WELLS FARGO BANK, NATIONAL
ASSOCIATION, acting through its

Wells Fargo Business Credit operating division
	 

	 	 
	Date:

	 	_________, 2005
	 

	 	 
	Subject:

	 	ZILA NUTRACEUTICALS, INC., an
Arizona corporation,

ZILA BIOTECHNOLOGY, INC., an Arizona corporation,

ZILA PHARMACEUTICALS, INC., a Nevada corporation,

ZILA SWAB TECHNOLOGIES, INC., an Arizona corporation

Financial Statements

In accordance with our Credit and Security Agreement dated as of February 6, 2004 (the “Credit
Agreement”), attached are the financial statements of ZILA NUTRACEUTICALS, INC., an Arizona
corporation, ZILA BIOTECHNOLOGY, INC., an Arizona corporation, ZILA PHARMACEUTICALS, INC., a Nevada
corporation, ZILA SWAB TECHNOLOGIES, INC., an Arizona corporation (collectively, jointly and
severally the “Borrower”), as of and for ___, ___(the “Reporting Date”) and the
year-to-date period then ended (the “Current Financials”). All terms used in this certificate have
the meanings given in the Credit Agreement.

     I certify (as an officer of the Borrower, but not in my personal capacity) that the Current
Financials have been prepared in accordance with GAAP, subject to year-end audit adjustments, and
fairly present the Borrower’s financial condition and the results of its operations as of the date
thereof.

Events of Default. (Check one):

o       The undersigned does not have knowledge of the
occurrence of a Default or Event of Default under
the Credit Agreement except as previously reported
in writing to the Lender.

o       The undersigned has knowledge of the occurrence of a
Default or Event of Default under the Credit
Agreement not previously reported in writing to the
Lender and attached hereto is a statement of the
facts with respect to thereto. The Borrower
acknowledges that pursuant to Section 2.10(d) of the
Credit Agreement, the Lender may impose the Default
Rate at any time during the resulting Default
Period.

I hereby certify to the Lender as follows:

o       The Reporting Date does not mark the end of one of
the Borrower’s fiscal quarters, hence I am
completing only paragraph ___below.

o      The Reporting Date marks the end of one of the Borrower’s fiscal quarters,
hence I am completing all paragraphs below except paragraph _.

o      The Reporting Date marks the end of the Borrower’s fiscal year, hence I am
completing all paragraphs below.

Financial Covenants. I further hereby certify that (as an officer of the Borrower, but not
in my personal capacity) the Borrower is in compliance with the covenants set forth in Section 6(a)
through (c) of the Agreement, except as indicated below. The calculations made to determine
compliance are as follows:

-7-

 

Covenant 6.2(a) Quarterly Net Worth

	 	 	 	 	 	 	 	 	 
	Quarter Ending	 	Maximum Net Worth Decrease	 	 	Actual	 
	October 31, 2005
	 	 	($7,820,000.00	)	 	 	 	 
	January 31, 2006
	 	 	($11,820,000.00	)	 	 	 	 
	April 30, 2006
	 	 	($11,820,000.00	)	 	 	 	 
	July 31, 2006
	 	 	($14,570,000.00	)	 	 	 	 

Covenant 6.2(b) Monthly Net Worth

	 	 	 	 	 	 	 	 	 
	Month Ending	 	Minimum Net Worth Required	 	 	Actual	 
	July, 2005
	 	 	$39,000,000.00	 	 	 	 	 
	August, 2005 through October,
2005
	 	 	$44,000,000.00	 	 	 	 	 
	November, 2005 through
January, 2006
	 	 	$40,000,000.00	 	 	 	 	 
	February, 2006 through April,
2006
	 	 	$40,000,000.00	 	 	 	 	 
	May, 2006 through July, 2006
	 	 	$37,250,000.00	 	 	 	 	 

-8-

 

Covenant 6.2(c) Capital Expenditures

	 	 	 	 	 	 	 	 	 
	Year	 	Maximum Allowable Capital Expenditures	 	 	Actual	 
	2006
	 	$3,500,000.00	 	 	 	 	 

     Attached hereto are all relevant facts in reasonable detail to evidence, and the computations
of the financial covenants referred to above.

	 	 	 	 	 
	 	ZILA NUTRACEUTICALS, INC., an Arizona corporation

 	 
	 	By  	 	 
	 	 	 	 
	 	 	Its 	 
	 

	 	 	 	 	 
	 	ZILA BIOTECHNOLOGY, INC., an Arizona corporation

 	 
	 	By  	 	 
	 	 	 	 
	 	 	Its 	 
	 

	 	 	 	 	 
	 	ZILA PHARMACEUTICALS, INC., a Nevada corporation

 	 
	 	By  	 	 
	 	 	 	 
	 	 	Its 	 
	 

	 	 	 	 	 
	 	ZILA SWAB TECHNOLOGIES, INC., an Arizona corporation

 	 
	 	By  	 	 
	 	 	 	 
	 	 	Its 	 
	 

-9-

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