Document:

Exhibit 10.30

PROMISSORY NOTE

	
$[_______]

	
November 29,  2010

 

FOR VALUE RECEIVED, pursuant to the terms of this Promissory Note (the “Promissory Note”), Essex Rental Corp. (the “Maker”) promises to pay to the order of [_____________] (the “Holder”) at the Holder’s address set forth in Section 18 hereof or at the Holder’s option, at such other place as may be designated, in writing, from time to time by the Holder, the principal sum of [_________________] dollars ($[_______]), together with interest, in lawful money of the United States of America,
payable as provided below.

 

1.           The principal portion of this Promissory Note shall bear interest at the rate of 10% per annum (the “Original Interest Rate”), subject to adjustment in accordance with Section 2 hereof.  Interest under this Promissory Note shall be calculated on the basis of a 360 day year for the actual number of days elapsed.  In no event shall the interest charged hereunder exceed the maximum interest rate permitted by law.

 

2.           Accrued but unpaid interest on this Promissory Note shall be due and payable annually in arrears on December 31st of each year (each an “Interest Payment Date”) until the Maker’s obligations hereunder shall have been satisfied in full.  In the event that the Maker shall fail to pay all or any portion of the accrued and unpaid interest on the applicable Interest Payment Date, the interest rate then in effect shall be increased by 100 bps for the 12 month period commencing on the date immediately following such Interest Payment Date; provided, however, that if the Maker shall pay the accumulated amount of accrued and unpaid interest at any time outstanding prior to the Maturity Date (as defined below), the interest rate in effect from and after such payment date shall revert to the Original Interest Rate; provided, further, if all or any part of this Promissory Note or any other amount due and payable hereunder is not paid when due on the Maturity Date (whether by reason of acceleration or otherwise), such unpaid amount shall, to the maximum extent permitted by applicable law, for each day during the period from the date of the Maturity Date until it shall be paid in full, accrue interest at an interest rate equal to 1800 basis points.

 

3.           The entire principal balance, plus all accrued and unpaid interest outstanding hereunder shall be due and payable on the earlier of (i) December 31, 2013, or (ii) the date any indebtedness evidenced by this Promissory Note and all other sums due under this Promissory Note shall become due and payable pursuant to Section 8 hereof (such earlier date, the “Maturity Date”).

 

4.           Unless otherwise specified by Holder, all payments with respect to any outstanding indebtedness hereunder will be applied first to reimburse Holder for any expenses, costs, fees, and disbursements (including attorneys’ fees and disbursements) incurred and due hereunder, second to the payment of accrued interest, and third (to the extent that the amount of such payment exceeds the amount of all such accrued interest) to the payment of principal. If any amount under this Promissory Note becomes due and payable on a Saturday, Sunday, or other day on
which banks are closed or may be permitted to close in New York City, the maturity of such payment shall be extended to the next succeeding Business Day. “Business Days” shall mean any days other than a Saturday, Sunday, or a day on which banks in New York City are closed or may be closed.

 

  

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Exhibit 10.30

 

5.           The Maker may prepay without premium or penalty of any kind all or any portion of the outstanding principal amount due under this Promissory Note, on any date or dates prior to the Maturity Date, provided, that such payment is accompanied by all accrued and unpaid interest on the principal so prepaid up to and including the date of such prepayment.

 

6.           The amount and date of each repayment of principal thereof shall be recorded by Holder on Schedule I attached hereto or a continuation thereof, and any such recordations shall constitute prima facie evidence of the information so recorded, absent manifest error; provided, however, that the failure of Holder to make any such recordations (or any error made in such recordations) shall not in any manner affect the obligation of Maker to repay the outstanding principal balance hereunder and all accrued

and unpaid interest thereon.

 

7.           All payments by the Maker of principal of, or interest on, any indebtedness evidenced by this Promissory Note and all other sums due under this Promissory Note shall be made free and clear of and without deduction for any setoff or counterclaims, or any taxes, fees, or other charges of any nature whatsoever imposed by any taxing authorities.

 

8.           If one or more of the following events (individually, an “Event of Default”, and collectively, “Events of Default”) shall occur and be continuing, whether such occurrences shall be (i) voluntary, (ii) involuntary, or (iii) effected by operation of law or pursuant to or in compliance with any judgment, decree, or order of any court or any order, rule, or regulation of any administrative or governmental body:

 

(a)         default shall be made in the due and punctual payment of the principal of, and interest on, this Promissory Note on the Maturity Date;

 

(b)         any representation or warranty to the Holder contained in this Promissory Note or (ii) set forth in that certain Agreement, dated as of October 29, 2010, between and among Knott Partners, L.P., Shoshone Partners, L.P., Mulsanne Partners, L.P., Knott Partners Offshore Master Fund, L.P., Knott Partners Offshore (SRI) Fund Limited, and the Maker (the “Debt Exchange Agreement”), in each case, shall be false in any material respect on or as of the date when made or deemed made;

 

(c)         the Maker shall breach any covenant or agreement made herein and any such breach shall continue unremedied for a period of more than ten (10) days after written notice thereof from the Holder to the Maker;

 

(d)         (i)  the Maker shall commence any case, proceeding, or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to the Maker or seeking to adjudicate the Maker as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to the Maker or its debts, or (B) seeking appointment of a receiver, trustee, custodian, or other similar official for the Maker or for all or any substantial part of its assets, or the Maker shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Maker any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) the Maker shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clauses (i) or (ii) above; or (iv) the Maker shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; and

 

  

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Exhibit 10.30

 

(e)         any “Event of Default” under (i) that certain Second Amended and Restated Loan and Security Agreement, dated as of March 6, 2008, between and among Essex Crane Rental Corp., as borrower, Essex Holdings, LLC, as guarantor, and the agents and lenders party thereto (as may be amended from time to time, the “Loan Agreement”), or (ii) any credit facility to be entered into by the Maker or any of its affiliates in connection with the Bid (as defined in the Debt Exchange Agreement), in each case, shall have occurred and be continuing;

 

then, (i) if such event is an Event of Default specified in paragraph (d) above with respect to the Maker, automatically any indebtedness evidenced by this Promissory Note and all other sums due under this Promissory Note shall immediately become due and payable, and (ii) if such event is any other Event of Default, the Holder shall have the right, exercisable at its absolute and sole discretion at any time thereafter, upon written notice thereof to the Maker, to declare any indebtedness evidenced by this Promissory Note and all other sums due under this Promissory Note to be due and payable forthwith, whereupon the same shall become immediately due and payable without presentment, demand, protest, or notice of any kind whatsoever, all of which are hereby expressly waived by the Maker.  Time for payment

extended by law shall be included in the computation of interest.

 

9.           The Maker hereby represents, warrants, and agrees that:

 

(a)         this Promissory Note is a valid and binding obligation of the Maker, enforceable against the Maker in accordance with and subject to its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law);

 

(b)         it will make indefeasible payment in full of all amounts due under this Promissory Note as and when due hereunder in accordance with and subject to the terms of this Promissory Note, without claiming or asserting any discount, defense, breach of warranty, breach of contract, setoff, counterclaim, or other right with respect to any of the contracts or arrangements entered into with or by the Holder or any of its affiliates;

 

(c)         the obligations represented by this Promissory Note are and shall be for all purposes and times absolute irrespective of any setoff, claim, counterclaim, defense, or other right which the Maker may have against anyone for any reason whatsoever;

 

(d)         the Guarantor (as defined in the Loan Agreement) and the Borrower (as defined in the Loan Agreement) have current capacity pursuant to Section 9.11 of the Loan Agreement to make a distribution to the Maker for purposes of paying the entire principal balance, plus all accrued and unpaid interest outstanding hereunder, as well as all other amounts due and payable hereunder, in each case, as if such amounts were due and payable on and as of the date hereof.

 

  

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Exhibit 10.30

 

10.         The Maker hereby covenants that it will cause to be promptly and duly taken, executed, acknowledged, or delivered all such further acts, conveyances, documents, and assurances as the Holder may from time to time reasonably request in order to carry out the intent and purposes of this Promissory Note. To the maximum extent permitted by law, the Maker hereby waives the benefit of any law or regulation to the extent inconsistent with any of the terms and conditions hereof.

 

11.         No failure by the Holder hereof to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by such Holder of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy.  The rights and remedies of the Holder hereof as herein specified are cumulative and not exclusive of any other rights or remedies which such Holder may otherwise have.

 

12.         No modification, rescission, waiver, forbearance, release or amendment of any provision of this Promissory Note shall be made, except by a written agreement duly executed by the Maker and the Holder.

 

13.         This Promissory Note is made in the State of New York and shall be governed by and construed in accordance with the laws of said State, without regard to conflict of laws principles. Any dispute arising out of or relating to this Promissory Note shall be resolved exclusively by state or federal courts sitting in New York County, State of New York. The Maker and the Holder hereby irrevocably submit to the jurisdiction of any such court and waive any objection to such jurisdiction, including, without limitation, the defenses of inconvenient forum and lack of personal jurisdiction.

 

14.         Maker hereby waives presentment, protest, notice of dishonor, and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Promissory Note.

 

15.         The Maker and, by its acceptance hereof, the Holder and each of their successors and assigns hereby irrevocably and unconditionally waive trial by jury in any legal action and/or proceeding arising on, out of or by reason of this Promissory Note, or any document entered into or in connection herewith or therewith.

 

16.         The Maker agrees to pay all collection and other expenses, court costs, and reasonable attorneys’ fees and disbursements (whether or not litigation is commenced) which may be incurred in connection with the collection or enforcement of this Promissory Note

 

17.         The Maker agrees to indemnify the Holder and to hold the Holder and any of its officers, directors, employees, or agents harmless from any loss, expense, cost, fees, or disbursements (including attorneys’ fees and disbursements) which such Holder may sustain or incur as a consequence of a default by the Maker whether in the payment when due of the principal amount of or interest on this Promissory Note.  The indemnity provisions of this Section 18 shall survive termination of this Promissory Note.

 

18.         Any notice called for hereunder shall be deemed properly given if (a) sent by certified mail, return receipt requested, (b) personally delivered, (c) sent by a nationally recognized courier service providing receipt of delivery, (d) sent by facsimile, to the address or facsimile number set forth below, or such other address or facsimile number as either the Maker or Holder may designate by providing written notice to the other party in accordance with this Section 18:

 

  

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Exhibit 10.30

 

If to the Maker:

 

Essex Rental Corp.

1110 Lake Cook Road, Suite 220

Buffalo Grove, IL 60089

Facsimile No.: (847) 215-6502

Attn: Chief Financial Officer

Facsimile No.: (847) 215-6535

 

With a copy to:

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, NY 10022

Attn: Todd J. Emmerman

Facsimile No.: (212) 894-5873

If to the Holder:

 

[                                     ]

 

With a copy to:

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, NY  10036

Attn: Douglas A. Rappaport

Facsimile No.: (212) 872-1002

 

20.         Any provision hereof which may be held invalid or unenforceable under any applicable law shall not affect the validity or enforceability of any other provision hereof, and to this extent the provisions hereof shall be severable.

 

21.         Except as expressly provided herein, this Promissory Note may not be amended or otherwise modified except by a written instrument signed by the Maker and the Holder.

 

22.         This Promissory Note is a registered promissory note as follows:

 

(a)         the Maker shall cause to be kept at the Maker’s principal office a register for the registration and transfer of the Promissory Note (the “Note Register”).  The names and addresses of the Holders, the transfer of this Promissory Note, and the names and addresses of the transferees of this Promissory Note shall be registered in the Note Register.

 

(b)         the Person in whose name this Promissory Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes of this Promissory Note and the Maker shall not be affected by any notice to the contrary, until due presentment of this Promissory Note for registration of transfer so provided in this Section 22. Payment of or on account of the principal, interest, and any other amount paid on this registered Promissory Note shall be made to (or based upon the written order of) such registered holder.

 

  

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Exhibit 10.30

 

(c)         Upon surrender of this Promissory Note for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder or its attorney duly authorized in writing and accompanied by the address for notices of each transferee of this Promissory Note or part thereof), the Maker shall duly execute and deliver, at such Maker’s expense, one or more new promissory notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of this surrendered Promissory Note.  Each such new promissory note shall be payable to such person as such holder may request
and shall be substantially in the form of this Promissory Note.  Each such new promissory note shall be dated the date of this surrendered Promissory Note.

 

[Signature Page Follows]

  

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Exhibit 10.30

 

IN WITNESS WHEREOF, the Maker has executed this Promissory Note as of the date first written above.

	 	
MAKER:

	 	  
	 	
ESSEX RENTAL CORP.

	 	  
	 	
By:

	  
	 	
Name:

	  
	 	
Title:

	  

Signature Page to Promissory Note

  

 

  

	 	
Title:

	  
	 	  	  
	 	  	  

 

  

 

  

Schedule I

 

PAYMENTS OF PRINCIPAL

 

	
Amount of Principal

Paid or Prepaid

	  	
Unpaid Principal

Balance

	  	
Notation Made ByExhibit 10.31

Execution Version

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of December 22, 2010, by Essex Rental Corp., a Delaware corporation (the “Company”), with Kirtland Capital Company III LLC (“KCC”) and Kirtland Capital Partners III L.P. (“KCP” and, together with KCC, “Kirtland”).

 

WHEREAS, Kirtland has requested that the Company register shares of Common Stock (as hereinafter defined) under the Securities Act (as hereinafter defined);

 

WHEREAS, on November 24, 2010, the Company completed a private placement of 3,300,000 shares (the “Private Placement Shares”) of Common Stock (the “Private Placement”);

 

WHEREAS, in connection with the Private Placement, the Company agreed to file a registration statement with the SEC (as hereinafter defined) to register for resale the shares of Common Stock issued to investors in the Private Placement no later than December 24, 2010;

 

WHEREAS, the Company desires to provide Kirtland with the right to register the shares of Common Stock owned by Kirtland as of the date hereof in connection with the registration of the Private Placement Shares.

 

NOW, THEREFORE, in consideration of the premises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.           REGISTRATION RIGHTS.

 

1.1           Definitions.  For purposes of this Agreement:

 

(a)           Common Stock.  The term “Common Stock” means the Company’s common stock, $0.0001 par value per share.

 

(b)           Exchange Act.  The term “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

 

(c)           Holder.  The term “Holder” means any person owning of record Registrable Securities or any assignee of record of such Registrable Securities to whom rights set forth herein have been duly assigned in accordance with this Agreement.

 

  

 

  

(d)           Registrable Securities.  The term “Registrable Securities” means all of the shares of Common Stock owned by Kirtland as of the date hereof and (ii) any shares of Common Stock of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, any shares of Common Stock described in clause (i).  As to any particular Registrable Securities, subject to Section 2.1, such securities shall cease to be Registrable Securities when:  (a) a registration statement with respect to the sale

of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such registration statement; (b) such securities shall have been transferred pursuant to Rule 144 of the Securities Act, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration under the Securities Act; or (c) such securities shall have ceased to be outstanding.

 

(e)           Registration.  The terms “register,” “registration” and “registered” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement.

 

(f)           SEC.  The term “SEC” or “Commission” means the U.S. Securities and Exchange Commission.

 

(g)           Securities Act.  The term “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.

 

1.2           Registrations on behalf of Holders.

 

(a)           Registration.  The Company shall include the Registrable Securities in the registration statement filed by the Company with the SEC to register the Private Placement Shares for resale (the “Mandatory Registration Statement”).  The Company shall use its commercially reasonable efforts to cause such Mandatory Registration Statement to be declared effective by the SEC as soon as reasonably practicable following the date of such filing.  The Mandatory Registration Statement shall provide for the resale from time to time, and pursuant to any method or combination of
methods legally available, by the Holders of any and all Registrable Securities (including, without limitation, an underwritten offering of the Registrable Securities).

 

(b)           Underwriting.

 

(1)           If the holders of a majority of the Private Placement Shares shall have notified the Company that they intend to distribute the Private Placement Shares by means of an underwritten offering, the Company shall promptly notify the Holders of the Registrable Securities of such intention and the Holders shall have a right to include their Registrable Securities in such underwritten offering.  All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting.  Notwithstanding any other provision of this Section 1.2(b)(1), if the underwriter(s) advise(s) the Company in writing that

marketing factors require a limitation of the number of securities to be underwritten then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be reduced as required by the underwriter(s) and allocated among the Holders of Registrable Securities and the holders of the Private Placement Shares to be included in such underwriting on a pro rata basis according to the number of Registrable Securities and Private Placement Shares then outstanding held by each Holder and each holder of Private Placement Shares requesting inclusion in the underwritten offering.

 

  

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(2)           Notwithstanding anything to the contrary in Section 1.2(b)(1), at any time, the holders of a majority of the Registrable Securities shall have the right to resell Registrable Securities by means of an underwritten offering conducted by an underwriter reasonably acceptable to the Company, in which case such Holders shall promptly notify the other Holders of the Registrable Securities and the Company of such intention and such other Holders and each of the other selling stockholders (the “Selling Stockholders”) identified in the Mandatory Registration Statement shall have a right to include their Registrable Securities and, in the case of such shareholders,
the shares being registered for resale by such selling stockholders pursuant to the Mandatory Registration Statement (such shares the “Selling Stockholder Shares”), in such underwritten offering.  All Holders and Selling Stockholders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting.  Notwithstanding any other provision of this Section 1.2(b)(2), if the underwriter(s) advise(s) the Company in writing that marketing factors require a limitation of the number of securities to be underwritten then the Company shall so advise all Holders of Registrable Securities and the Selling Stockholders that would otherwise be underwritten pursuant hereto, and the
number of Registrable Securities and Selling Stockholder Shares that may be included in the underwriting shall be reduced as required by the underwriter(s) and allocated among the Holders of Registrable Securities and the Selling Stockholders on a pro rata basis according to the number of Registrable Securities and Selling Stockholder Shares then outstanding held by each Holder and Selling Stockholder requesting inclusion in the underwritten offering.

 

(c)           Notwithstanding the foregoing, if the Company shall furnish to the selling Holders a certificate signed by the President or Chief Executive Officer of the Company stating that in the good faith judgment of the Board of Directors of the Company it would be detrimental to the Company and its shareholders to file the Mandatory Registration Statement because such filing would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange
Act, then the Company shall have the one-time right to defer such filing for a period of not more than forty-five (45) days after the date of delivery of such certificate; provided, however, the Company shall not register any securities for its own account or that of any other shareholder during such forty-five (45) day period other than in connection with a significant acquisition, corporate reorganization, or other similar transaction involving the Company.

 

(d)           Expenses.  All expenses incurred in connection with a registration pursuant to this Section 1.2, including without limitation all registration, qualification, printers’, accounting and Company counsel fees shall be borne by the Company, other than discounts, commissions or brokerage fees, which shall be borne by the selling Holders.

 

1.3           Reserved.

 

  

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1.4           Obligations of the Company.  When required to effect the registration of any Registrable Securities under this Agreement, the Company shall, subject to the provisions of Section 1.4(f) below, as expeditiously as reasonably possible:

 

(a)           Use its commercially reasonable efforts to prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective as soon as reasonably practicable, and to remain continuously effective for three years from the date of effectiveness or until no Registrable Securities are outstanding, whichever occurs earlier.

 

(b)           Prepare and file with the SEC (and promptly respond to any comments from the SEC in respect of) such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to keep the registration statement continuously effective, comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by such registration statement until such time as all of such Registrable Securities registered thereunder shall have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth in such registration statement.  In the case of amendments and supplements to a registration statement which are required to be filed pursuant to this Agreement by reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into such registration statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the Exchange Act report is filed which created the requirement for the Company to amend or supplement such registration statement.

 

(c)           Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of the Registrable Securities owned by them that are included in such registration statement.

 

(d)           Use reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. The Company shall promptly notify each selling Holder of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction in the United States or its receipt of actual

notice of the initiation or threatening of any proceeding for such purpose.

 

(e)           In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering and enter into such other customary agreements and take all such actions as such underwriter reasonably requests in order to expedite or facilitate the disposition of the Registrable Securities.  Each Holder participating in such underwriting hereby agrees to also enter into and perform its obligations under such an agreement.

 

  

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(f)           Notify each selling Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the occurrence of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and promptly prepare a supplement or amendment to such registration statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to each selling Holder (or such

other number of copies as such Holder may reasonably request).

 

(g)           Use its commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness of any registration statement prepared hereunder, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, (ii) if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify each Holder who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

 

(h)           Use its commercially reasonable efforts either to cause all the Registrable Securities covered by a registration statement prepared hereunder to be listed on each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 1.4(h).

 

(i)           Cooperate with the Holders who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a registration statement filed hereunder and enable such certificates to be in such denominations or amounts, as the case may be, as such Holders may reasonably request and registered in such names as such Holders may request.

 

(j)           If requested by a selling Holder, use its commercially reasonable efforts to (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as a selling Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any registration statement if reasonably requested by a selling Holder holding any Registrable Securities.

 

  

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(k)           Promptly make available for inspection by the selling Holders, any underwriter participating in any disposition of securities pursuant to such Registration Statement and any attorney or accountant or other agent retained by such Holders or such underwriters, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such Holders, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith; provided that such Holders and the Company shall have entered into confidentiality agreement with respect to any confidential or non-public information so provided in
form and substance mutually acceptable to the parties thereto.

 

(l)           Use commercially reasonable efforts to furnish, on or about the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, copies of (i) the opinion, if any, of the lead legal counsel representing the Company for the purposes of such registration issued pursuant to the underwriting agreement relating to the offering and addressed to the underwriters and (ii) the letter (including any “bring-downs” related thereto) from the independent certified public accountants of the Company issued pursuant to the underwriting agreement relating to the offering and addressed to the underwriters.

 

(m)         Notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed.

 

(n)           After such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

 

(o)           Notwithstanding any other provision of this Agreement, from and after the time a registration statement filed under this Section 1 covering Registrable Securities is declared effective, the Company shall have the right to suspend the registration statement and the related prospectus in order to prevent premature disclosure of any material non-public information related to corporate developments by delivering notice of such suspension to the Holders, provided, however, that the Company may exercise the right to such suspension only once in any 12-month period and for a period not to exceed forty-five (45) days.  From and after the date of a notice of suspension under this
Section 1.4(m), each selling Holder agrees not to use the registration statement or the related prospectus for resale of any Registrable Security until the earlier of (1) notice from the Company that such suspension has been lifted or (2) the 46th day following the giving of the notice of suspension.

 

(p)           Use commercially reasonable efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of Registrable Securities.

 

  

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1.5           Furnish Information.  It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 1.2 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them, and the intended method of disposition of such securities as shall be required to timely effect the registration of their Registrable Securities.

 

1.6           Delay of Registration.  No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1.

 

1.7           Indemnification.  In the event any Registrable Securities are included in a registration statement under Section 1.2:

 

(a)           By the Company.  To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, officers, directors, members, employees and agents of each Holder, any underwriter (as defined in the Securities Act) and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, the “Violations” and, individually, a “Violation”):

 

(1)           any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; or

 

(2)           the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or

 

(3)           any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any federal or state securities law in connection with the offering covered by such registration statement.

 

The Company will promptly reimburse each such Holder, partner, officer or director or controlling person for any legal or other expenses reasonably incurred by them, after a request for reimbursement has been received by the Company, in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the indemnity agreement contained in this Section 1.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration under this Agreement by such Holder, partner, officer, director or controlling person of such Holder.

 

  

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(b)           By Selling Holders.  To the extent permitted by law, each selling Holder will be required severally and not jointly to indemnify and hold harmless the Company, each of its directors, employees, agents, each of its officers who have signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors or officers or any person who controls such Holder within the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, partner or director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration under this Agreement.  Each such Holder will promptly reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, partner, officer, director or controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action after a request for reimbursement has been received by the indemnifying Holder; provided, however, that the indemnity agreement contained in this Section 1.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the selling Holder (which consent shall not be unreasonably withheld); and provided further, that the total amounts payable in indemnity by a selling Holder under this Section 1.7(b) in respect of any Violation shall not exceed the net proceeds received by such Holder in the registered offering out of which such Violation arises.

 

(c)           Notice.  Promptly after receipt by an indemnified party under this Section  1.7 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section  1.7, deliver to the indemnifying party a written notice of the commencement thereof.  The indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.7, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified

party otherwise than under this Section 1.7.

 

  

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(d)           Defect Eliminated in Final Prospectus.  The foregoing indemnity agreements of the Company and selling Holders are subject to the condition that, insofar as they relate to any Violation made in a preliminary prospectus but eliminated or remedied in the amended prospectus on file with the SEC at the time the registration statement in question becomes effective or the amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the “Final Prospectus”), such indemnity agreement shall not inure to the benefit of any person if a copy of the
Final Prospectus was furnished to the indemnified party prior to the sale of Registrable Securities to the person asserting the loss, liability, claim or damage and such Final Prospectus was not furnished to the person asserting the loss, liability, claim or damage at or prior to the time such action is required by the Securities Act.

 

(e)           Contribution.  If the indemnification provided for in this Section 1.7 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by such indemnified party with respect to such loss, liability, claim, damage or expense in the proportion that is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions that resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party pursuant to a registration under this Agreement, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  In any such case, (A) no such Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.

 

(f)           Conflict with Underwriting Agreement.  Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement will control.

 

(g)           Survival.  The obligations of the Company and selling Holders under this Section 1.7 shall survive the completion of any offering of Registrable Securities in a registration statement, and otherwise.

 

1.8           Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, the Company agrees to:

 

(a)           Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act;

 

(b)           Use reasonable efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

 

  

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(c)           So long as a Holder owns any Registrable Securities, to furnish to the Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144, and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such securities without registration.

 

1.9           No Stated Damages or Net Cash Settlement Value.  The Company will not be obligated to deliver securities, and there are no other contractual penalties for failure of a registration statement to become effective as contemplated under this Agreement.

 

1.10        Additional Shares.  The Company, at its option, may register, under any registration statement and any filings with any state securities commissions filed pursuant to this Agreement, any number of unissued shares of Common Stock of the Company or any shares of Common Stock or other securities of the Company owned by any other securityholder(s) of the Company.

 

1.11        Representation of Kirtland.  Kirtland hereby represents and warrants that, as of the date hereof, (i) the Registrable Securities consist of 3,294,700 shares of Common Stock that were acquired by Kirtland in open market or private purchases during the period commencing March 5, 2007 and ending on November 5, 2008 and (ii) Kirtland does not own any Common Stock other than the Registrable Securities.

 

2.           ASSIGNMENT AND AMENDMENT.

 

2.1           Assignment.  The registration rights of a Holder under Section 1 hereof may be assigned; provided, however that no party may assign any of the foregoing rights unless the Company is given written notice by the assigning party at the time of such assignment stating the name and address of the assignee and identifying the securities of the Company as to which the rights in question are being assigned; and 
provided further that any such assignee shall receive such assigned rights subject to all the terms and conditions of this Agreement, including without limitation the provisions of this Section 2.  

 

2.2           Amendment and Waiver of Rights.  Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders (and/or any of their permitted successors and assignors) holding a majority of all of the Registrable Securities, provided that the consent of the Holders shall not be required after such time as the Holders shall not hold any Registrable Securities.  Any amendment or waiver effected in accordance with this Section 2.2
shall be binding upon each Holder, each permitted successor or assignee of such Holder and the Company.

 

  

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3.           GENERAL PROVISIONS.

 

3.1           Notices.  Any and all notices required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed to provide such party sufficient notice under this Agreement on the earliest of the following:  (i) at the time of personal delivery, if delivery is in person; (ii) at the time of transmission by facsimile, addressed to the other party at its facsimile number specified herein (or hereafter modified by subsequent notice to the parties hereto), with confirmation of receipt made by

both telephone and printed confirmation sheet verifying successful transmission of the facsimile; (iii) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; or (iv) three (3) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries.

 

All notices not delivered personally or by facsimile will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address or facsimile number as follows, or at such other address or facsimile number as such other party may designate by one of the indicated means of notice herein to the other parties hereto as follows:

 

(a)           if to a Holder, at such Holder’s address as set forth on Exhibit A hereto or such other address provided by the Holder to the Company.

 

(b)           if to the Company, marked “Attention:  Martin Kroll, Chief Financial Officer”, at Essex Rental Corp., 1110 Lake Cook Road, Suite 220, Buffalo Grove, Illinois 60089.

 

3.2           Entire Agreement.  This Agreement and the documents referred to herein, together with all the Exhibits hereto, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

3.3           Governing Law; Jurisdiction.  This Agreement will be governed by and construed in accordance with the laws of the State of New York , without giving effect to that body of laws pertaining to conflict of laws.  Each of the parties hereto hereby irrevocably consents to the exclusive jurisdiction of the courts of the Second Department of the Supreme Court of the State of New York and the United States District Court for the Southern District of New York and waives trial by jury in any action or proceeding with respect to this Agreement.

 

3.4           Severability.  If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto.  If such clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this
Agreement.  Notwithstanding the forgoing, if the value of this Agreement based upon the substantial benefit of the bargain for any party is materially impaired, which determination as made by the presiding court or arbitrator of competent jurisdiction shall be binding, then both parties agree to substitute such provision(s) through good faith negotiations.

 

  

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3.5           Third Parties.  Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement.

 

3.6           Successors And Assigns.  Subject to the provisions of Section 2.1, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

 

3.7           Titles and Headings.  The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement.

 

3.8           Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

3.9           Further Assurances.  The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

3.10        Independent Nature of Holders’ Obligations and Rights.  The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder.  Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders

are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.

 

[Signature Page Follows]

 

  

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

 

	  	
ESSEX RENTAL CORP.

	  	  	  
	  	
By:

	
/s/ Martin Kroll

	  	  	
Name: Martin Kroll

	  	  	
Title:

	  	  	  
	  	
KIRTLAND CAPITAL PARTNERS III L.P.

	  	  	  
	  	
By:

	
Kirtland Partners Ltd., its general partner

	  	  	  
	  	
By:

	
/s/ Michael DeGrandis

	  	  	
Name: Michael DeGrandis

	  	  	
Title:

	  	  	  
	  	
KIRTLAND CAPITAL COMPANY III LLC

	  	  	  
	  	
By:

	
Kirtland Partners Ltd., its managing member

	 	 	 
	  	
By:

	
/s/ Michael DeGrandis

	  	  	
Name: Michael DeGrandis

	  	  	
Title:

 [Signature page to Registration Rights Agreement]

 

  

  

  

EXHIBIT A

Kirtland Capital Partners III L.P.

3201 Enterprise Parkway, Suite 200

Beachwood, Ohio  44122

Attn:  Michael DeGrandis

Kirtland Capital Company III LLC

3201 Enterprise Parkway, Suite 200

Beachwood, Ohio  44122

Attn:  Michael DeGrandis

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