Document:

EX-4(C)

 

Exhibit 4(c)

English Translation

 

Agreement on the Planned Acquisition of

Abengoa, S.A. Shares by Company Executives

 

(Form of) Agreement between Executive and Abengoa

 

 

Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	Parties
	 	 	 	 	3	 
	 
	 	 	 	 	 	 
	Statements
	 	 	 	 	3	 
	 
	 	 	 	 	 	 
	Clauses
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	1.
	 	Acquisition of Shares	 	 	4	 
	2.
	 	Legal Framework re: Shares	 	 	5	 
	3.
	 	Repurchase option	 	 	6	 
	4.
	 	Definition of objectives	 	 	7	 
	5.
	 	Achievement of objectives and legal effects	 	 	7	 
	6.
	 	Failure to achieve objectives and legal effects	 	 	8	 
	7.
	 	Other instances provoking termination of the agreement	 	 	9	 
	8.
	 	Tax issues	 	 	9	 
	9.
	 	Notices	 	 	10	 
	10.
	 	General Clauses	 	 	11	 
	11.
	 	Applicable Law and Jurisdiction	 	 	12	 

 

 

February, 2, 2006

Attending:

	I.	 	The first party,

XXX

identification / passport number 0

Shares number (the Shares): xxx

acts on his own behalf (hereafter referred to as the “Beneficiary”).

	II.	 	And the second party, Mr. Don José
Marcos Romero, with D.N.I. 27.883.847
and D. Miguel Ángel Jiménez-Velasco
Mazarío, with D.N.I. 28.874.696, acts
on behalf of the Spanish trading
company Abengoa, S.A. located in
Seville and registered in the Trade
Register of Seville, with company tax
number A-41002288 hereafter referred to
as the “Company”.

The Beneficiary and the Company will be hereafter referred to individually as a Party and together
as the Parties of this Agreement.

Statements

	I.	 	At the company’s management board meeting held ___, Abengoa S.A. agreed, in accordance
with the delegation of the General Shareholders Committee of said company, to implement a plan
for company executives to acquire Shares of Abengoa S.A. (hereafter referred to as the Share
Acquisition Plan). The parties are familiar with the contents of this plan.
	 
	II.	 	The Share Acquisition Plan is intended for specific employees
(hereafter referred to as the Beneficiary/ies) provided that they
remain with the company to whom they provide their services or in any
other subsidiary belonging to the same business group, and contribute
to the accomplishment of individual established objectives, to
purchase Abengoa shares on the stock market by means of a personal
loan (hereafter referred to as the Loan) to be granted by Banco
Sabadell S.A. (hereafter referred to as the Financial Institution).
	 
	III.	 	The Beneficiary currently maintains a working relationship with the
Company or subsidiary, which belongs to the group headed by the
“Company”, and in which he/she is responsible for its own functions.
The position held by the Beneficiary is included among those intended
to benefit from the Share Acquisition Plan.
	 
	IV.	 	The Beneficiary will acquire at the end of this agreement and by
means of a personal loan managed by the Financial Institution the
full control of the property of the Shares in Abengoa, S.A., totally
paid out and free of charges and encumbrances, represented by account
annotations and hereafter referred to as “the Shares”.

 

 

	V.	 	The Company has offered the Beneficiary the opportunity to participate in the Share
Acquisition Plan and the Beneficiary has agreed to participate in that plan. Thus, the parties
have drawn up this agreement (hereafter referred to as the Agreement) with attention to the
legal security requirements that must be met for the acquisition of Shares in order to ensure
proper conditions for the Beneficiary and for the guarantee granted by the Company which are
subject to the following:

Clauses

First.- Acquistion of Shares

	1.1	 	To be debited against the Loan granted in his favour, the Beneficiary will acquire the Shares
(ordinary Shares of Abengoa S.A.) through a purchase order to a Financial Institution at the
best exchange possible and with a maximum medium price of 20.71 euros per share. The
Beneficiary is aware of and accepts that, in accordance with the Share Acquisition Plan to
which he has full access, this purchase order will be treated together with and indistinctly
from the orders of other executives of the Company referred to in the same Plan. Furthermore,
the Beneficiary is aware and accepts that the acquisition price will be identical for all
persons involved and equivalent to the average cost of acquisition for all shares purchased by
the Financial Institution in executing the Share Acquisition Plan.
	 
	1.2	 	The Financial Institution will assign a purchase price for the Shares equalling the average
resulting cost of all of the Shares that it purchases on the market during the execution of
the Share Acquisition Plan in the course of the acquisition period (also including the shares
acquired by other Beneficiaries in the same situation) . The process of purchasing these
shares is extended from today until the number of Shares stated in this document is reached or
until 31 December 2006, whichever comes first, and can be acheived in several successive
actions.
	 
	1.3	 	The principal of the Loan will be equal to the unitary price of acquisition of the Shares
(the above-mentioned average price), multiplied by the number of Shares assigned for
acquisition by the Beneficiary, plus purchase costs, interests and brokerage fees, set-up
commissions if necessary, and loan fees and expenses. The Loan will expire on 30/06/2011.
	 
	1.4	 	To ensure that the Loan is duly repaid, the Beneficiary is obligated, as the only form of
guarantee of the loan and without any recourse against his personal assets, to establish a
security interest pledge in favour of the Financial Institution for each and every share of
the Company acquired through this agreement.
	 
	1.5	 	If the security interest pledge is exercised, any difference that may exist between the sale
price of the Shares and the amount of the debt owed to the Financial Institution will be
covered by the Company in accordance with agreements between the Company and the Financial
Institution and without any recourse against the Beneficiary’s personal assets. In this
event, the Company will compensate the Beneficiary for the fiscal effect that the action may
have on his personal tax situation.
	 
	1.6	 	The Beneficiary renounces his right to make any claim against the Financial Institution
derived from this Agreement unless the cause is attributable from that

 

 

	 	 	institution. Any differences that may arise must be resolved directly with the Company in
accordance with that stipulated in clause 11 of this agreement.

Second.- Legal Framework re: Shares

	2.1	 	The Beneficiary may not transfer, sell, exchange, borrow against, dispose of or carry out any
administrative act of disposition of the redeemable Shares before 1 July 2011, unless such a
transaction takes place under the security interest pledge established for the Shares by the
Beneficiary in favour of the Financial Institution. Additionally, such a transaction is
permissible if the repurchase option right established in favour of the Company is exercised
in accordance with the contents of the third clause of this agreement.
	 
	2.2	 	The Beneficiary holds all the political and economic rights of the Shares as set out in the
security interest pledge.
	 
	2.3	 	Dividends or other benefits that the Beneficiary may receive from redeemable Shares will be
used toward the repayment of the Loan, its interest, costs, commissions and principal as is
stipulated in the loan agreement with the Financial Institution.
	 
	2.4	 	Should an increase in capital occur, the Beneficiary will proceed to sell the preemptive
subscription rights which will be applied toward the repayment of the Loan, after the
corresponding fiscal effect of that sale has been deducted.

 

 

Third.- Repurchase option.

	3.1	 	With this agreement, the Beneficiary grants the Company a repurchase option right for each
and every share that is acquired by means of this agreement until 30 June 2011.
	 
	3.2	 	The repurchase option laid out in this agreement will take effect upon the Beneficiary’s
reception of the Shares and the notarization of a security interest pledge in favour of the
Financial Institution.
	 
	3.3	 	If the Company exercises its repurchase option right, the purchase price will be the sum of
the price at which the Beneficiary acquired the Shares plus costs and commissions
corresponding to the Shares in question imposed by the Financial Institution, plus any
interest yielded in the favour of the Financial Institution corresponding to the indicated
Shares (less dividends paid corresponding to the Shares and the sale of preemptive
subscription rights; dividends will be in any case applied to the partial amortization of the
credit).
	 
	3.4	 	The Company will remit this price entirely in cash at the moment of acquisition which will be
realized in private, outside the market, market laws permitting. The price will be credited
directly to the Beneficiary’s loan account and the total will go entirely toward the partial
or total repayment of the loan, whatever the case may be.
	 
	3.5	 	The repurchase option granted in this contract may be exercised in any of the following
cases:

	 	a)	 	At any time during the validity of this agreement if the Financial Institution
executes the security interest pledge. In this case the repurchase rights will be
applicable to all Shares subject to the execution of the said pledge.
	 
	 	b)	 	On any date during the course of this agreement if the Beneficiary does not fulfil
each and every objective laid out in the attached description and established in
accordance with this agreement and with respect to the Shares.
	 
	 	c)	 	At any moment during the validity of this agreement if the working relationship
between the Company and the Beneficiary terminates as a result of the death of the
Beneficiary. In this case the repurchase option will be extended to all Shares possessed
by the Beneficiary at the moment of his death, and until this date, except with respect to
Shares for which the Company has not exercised or has not been able to exercise the
repurchase option due to application of that described in letter b) above.
	 
	 	d)	 	At any moment during the valididty of this agreement if the working relationship
between the Company and the Beneficiary terminates as a result of the retirement or
permanent incapacity of the Beneficiary. In this case the repurchase option will be
extended to all Shares possessed by the Beneficiary at the moment of his retirement or
declaration of incapacity and until this date, except with respect to Shares for which the
Company has not exercised or has not been able to exercise the repurchase option due to
application of that described in letter b) above.
	 
	 	e)	 	At any moment during the validity of this agreement if the working relationship
between the Company and the Beneficiary terminates as a result of illegal dismissal. In
this case the repurchase option will be extended to all Shares

 

 

	 	 	 	possessed by the Beneficiary at the moment his working relationship with the Company is
terminated except with respect to Shares for which the Company has not exercised or has not
been able to exercise the repurchase option due to application of that described in letter
b) above.
	 
	 	f)	 	At any moment during the validity of this agreement if the working relationship
between the Company and the Beneficiary terminates as a result of unjustifiable dismissal.
In this case the repurchase option will be extended to all Shares possessed by the
Beneficiary at the moment his working relationship with Company is terminated. In
exceptional cases, the consolidated Shares possessed by the Beneficiary until the date of
his dismissal may be maintained upon approval by the Company’s Committee of Retributions
and Appointments.

	3.6	 	The repurchase option right on the Shares that the Beneficiary or his heirs hold on 30 June
2011 will terminate that day with the simultaneous complete repayment of the Loan by the
Beneficiary and the cancellation of the pledge contained in this agreement. The Shares will
be at the Beneficiary’s disposal and free of charges or encumbrances.
	 
	3.7	 	In the event that the Company exercises its purchase option in accordance with that
established in clasue 3.5 above, the Company will compensate the Beneficiary for the fiscal
effect that such an action may have on his personal tax situation.

Fourth. Definition of Objectives

	4.1	 	This agreement and with it the credit facility granted by the Financial Institution (the
Loan, share pledge and other documentation) is based on the annual accomplishment by the
Beneficiary of annual management objectives set for the Beneficiary by the management of the
Company where he is employed for each year commencing with 2006. The accomplishment of these
objectives will determine the right of the Beneficiary to receive the annual variable
compensation or annual bonus established for the Beneficiary. The objectives are considered
accomplished if the conditions for the reception of these (i.e. the annual compensation or
bonus) have been met.

Fifth.- Achievement of objectives and effects

	5.1	 	The objectives will be considered accomplished if the Beneficiary has the right to receive
the variable compensation assigned to him (annual bonus)
	 
	5.2	 	The degree of accomplishment is analyzed annually, coinciding with the submission of the
unqualified audit report of the Company employing the Beneficiary, estimated to take place on
30 April of following fiscal year.
	 
	5.3	 	The Company will annually submit the Financial Institution with certification affirming the
accomplishment of the objectives, if that is the case. This certification is to be submitted
in the period of one month from the finalization of the first quarter of every fiscal year or
within one month from the submission of the unqualified audit report, whichever comes later
(from 2007 to 2011).
	 
	5.4	 	Should the Beneficiary retire upon reaching 65 years of age before the expiration of this
Agreement, the Agreement will remain valid, along with the Loan, until its expiration,
(especially with reference to the obligation to refrain from selling consolidated Shares until
the expiration of this Agreement) or, alternatively, the

 

 

	 	 	Beneficiary may freely dispose of the Shares toward payment of the total loan or toward
freedom from obligations assumed by the company relative to the Financial Institution.
	 
	 	 	For calculation purposes and for the purpose of determining the fulfillment of annual
objectives, the fiscal year extending until 31 December in which the Beneficiary reaches 65
years of age will be considered. However, the liquidation will be carried out in April of the
follwoing year once the unqualified Audit Report for the appropriate Company has been
submitted.
	 
	5.5	 	In the event that the Beneficiary should change his employment position among differing
business groups of the Company, the Shares corresponding to the fiscal years closed before
that change in position will be consolidated (if the stipulated objectives have been met) and
new objectives will be set for the remaining fiscal years according to the tasks and
requirements of the new position.

Sixth.- Failure to achieve objectives and effects

	6.1	 	The annual failure to accomplish objectives and the consequential impossibility to
consolidate the percentage of Shares defined in this Agreement will be considered by the
Financial Institution as a diminishment in the Beneficiary’s solvency and therefore may have
an effect on the partial amortization of the Loan. As a consequence, the Financial
Institution may proceed with the anticipated sale of some or all of the Shares, amortizing the
relevant part of the Loan in advance according to the following percentages:

	 	 	 
	2006

	 	30% of Shares
	2007

	 	30% “
	2008

	 	15% “
	2009

	 	15% “
	2010

	 	10% “

Should a failure to accomplish the objectives occur every year, the above percentages will
represent Non-consolidated Shares.

	6.2	 	Termination of the working relationship between the Beneficiary and the Company’s group as a
result of a unilateral decision – unless expressly agreed otherwise – or his legitimate,
illegitimate, or unchallenged dismissal, or serious neglect of business and commercial
obligations with respect to loyalty and professional diligence according to the Stock Market
Code of Conduct and Conduct Regulations, or of the agreements that may have been arranged
between the parties relative to the exclusive dedication and non-competition will result in
the inability to consolidate Shares. The Financial Institution will consider this as a
diminishment in the Beneficiary’s solvency, and as such, it will cause the partial advance
expiration of the Loan, giving the Financial Institution the authority to proceed with the

 

 

	 	 	resolution of the Loan and, to that end, to proceed with the sale of the Shares, applying the
amount received from the sale toward the cancellation of the Loan.
	 
	6.3	 	The Company is obligated to submit accredited certification to the Financial Institution in
the case of any non-compliance regulated in this agreement. Non-compliance will not be
acknowledged without explicit notification.

Senventh .- Other instances provoking termination of the agreement.

	7.1	 	The present agreement will become automatically null and void upon the death of the
Beneficiary. All Shares consolidated up to the time of death shall be transferred to the
heirs of the Beneficiary. The Beneficiary’s heirs will be obligated to proceed with an
anticipated amortization of the Loan.
	 
	7.2	 	In the case of an invalid dismissal, if the Beneficiary opts to discontinue his working
relationship with the Company, the present agreement will become automatically null and void
upon the date of termination of the relationship. All Shares consolidated up to the referred
date shall remain his property. If he decides to rejoin the Company, this agreement will
maintain its validity.

Eighth.- Tax issues.

	8.1	 	As established in clause 2.3, dividends of any type that may be paid by the Company during
the validity of this Agreement and the sale of the preemptive or preferential subscription
rights will be applied to the total or partial amoritzation of the loan, interest, commissions
and costs, and principal.
	 
	 	 	Nevertheless, a portion of the total amount will be deducted in order to compensate the
Beneficiary for taxes due on the dividend and the sale of rights as part of his annual
income tax declaration.
	 
	8.2	 	The Beneficiary will communicate to the Company with sufficient advance notice the exact or
estimated amount of his fiscal taxes according to his income tax declaration as well as the
account number in which it must be deposited. He will also communicate the final amount of
those taxes once his annual income tax declaration has been processed. The Company will keep
an individualized register of payments and balances relative to the payment of dividends and
the sale of rights and compensated taxes or taxes pending compensation in coming fiscal years.
	 
	8.3	 	Furthermore, if the Financial Institution proceeds with the sale of some or all of the Shares
pursuant to Article 6.1 due to noncompliance, giving rise to the anticipated expiration of the
Loan in whole or in part (i.e. excluding ordinary expiration after five years) the Financial
Instititution will apply the amount obtained through the sale of the Shares to the
amortization of the Loan. However, it will deduct the amount equivalent to the tax due on
the capital gains generated on the Shares, which will be credited to the Beneficiary. If the
sale generates a loss in capital, compensation will be considered in relation to future gains
if they occur.

 

 

	8.4	 	The same provision will be applied in accordance with fiscal legislation applicable to every
Beneficiary.
	 
	8.5	 	It will be the Beneficiary’s obligation to diligently comply with the statements laid out in
this agreement in order to facilitate the verification, treatment, and correct distribution of
the dividend payment by the Company.
	 
	8.6	 	If, due to the operating procedures of the dividend paying body, it is not possible to
deposit the amount of each dividend into two separate accounts, the amount of the dividend
will be paid into the Loan account with instructions to the Financial Institution to transfer
the corresponding part to the account indicated by the Beneficiary.
	 
	8.7	 	If the amount received as a result of the sale of the Shares by the Beneficiary after the
stipulated five years and six months does not entirely cover the total amount owed to the
Financial Institution plus the fiscal effect of the capital gains, the Company will compensate
for that with the necessary amount to meet that total.
	 
	8.8	 	The fiscal effect of the capital gains generated by the sale of the Shares upon expiration of
the loan is the responsibility of the Beneficiary.
	 
	8.9	 	The Company will assume the fiscal effect that the Beneficiary may incur due to any other
cause related to this Agreement, except the fiscal effect that is the result of the sale of
the Shares upon expiration of the loan.

Ninth.- Notices.

	9.1	 	Form: All communication among parties relative to this agreement will be realized in
writing by means of post or fax, unless the law demands another means.
	 
	9.2	 	Addresses: The Parties designate as addresses for the purposes of communication those
that officially appears in this document.
	 
	 	 	Change of address: The affected Party must notify the other Party of any change in the above
information in the manner stipulated in this clause.

Tenth. General clauses.

	10.1	 	This Agreement encompasses the entire arrangement between the Parties in relation to its
subject and makes any previous agreements null and void.
	 
	10.2	 	For purposes of clarity, one complete year is understood to be a calendar year. The first
complete year begins on the first day of January 2006 and ends on 31 December of the same
year, as do successive years. The completion of one year is understood to be the course of
one calendar year. However, compliance with the conditions fixed in this Agreement will be
carried out from the date of the unqualified audit report submitted by the Company’s
statuatory auditor, forecasted for 30 April of the fiscal year following every calendar year.

 

 

	10.3	 	This Agreement and the credit facility granted to the Beneficiary are based on the mutual
trust, loyalty, diligence, legality and professionalism between the Beneficiary and the
Company.
	 
	10.4	 	The Beneficiary’s rights and obligations derived from this Agreement are of a personal
nature. They are non-transferable and non-negotiable and they serve to ensure that the
commitments between the Beneficiary and the Financial Institution, as well as the commitments
in this agreement achieve a positive outcome.
	 
	10.5	 	Assignment: Neither of the Parties may assign the rights and obligations derived
from this Agreement without the previous written consent of the other Party.
	 
	10.6	 	Working days: For the purposes of this Agreement a working day is understood to be an
open day on the Madrid stock market and a day in which financial institutions are open to the
public. Should any of the dates stipulated in this Agreement fall on a non-working day, said
date will be postponed until the next working day.
	 
	10.7	 	Duration: This Agreement is valid until June 30, 2011, without detriment to any
extentions that the Parties may expressly arrange for the purpose of surpassing that period.
With regard to the fifth year, the Agreement will be maintained in force until the
submission of the audit report of that year, estimated to take place on 30 April of the
following year, in order to be able to ascertain the degree of compliance achieved in the
fifth year. At the end of that year, every Beneficiary must repay the Financial Institution
the amount owed on the Loan. To that purpose, before the expiration of the Agreement and at
least 30 days in advance, the Beneficiary must indicate in writing to the Company if he will
sell some or all of the Shares.

Eleventh.-Applicable Law and Jurisdiction.

	11.1	 	Applicable Law: This agreement is to be governed and interpreted in accordance with
Spanish law. This Agreement is of a commercial character and is governed by that which is
stipulated within it, or, in its absence, by the regulations of the Commercial Code, special
laws, commercial uses, and ultimately, by the Civil Code.
	 
	11.2.	 	Jurisdiction: Renouncing any other jurisdiction that may apply to them, the Parties,
should any discrepancy relative to the compliance, validity or termination of this Agreement
arise, expressly yield to legal arbitration held in Seville, by only one arbitrator who will
be designated by the Dean of the Bar Association of Seville or, in his absence, by an
authorized substitute. The judgment will be obligatorily adhered to by the Parties and will
be issued within a period of one month from the arbitrator’s acceptance. Should the
discrepancy lead to formal arbitration, the Parties expressly renounce any other jurisdiction
that may apply to them and subject themselves to the courts of the city of Seville.

This Agreement shall be formalized through a Notary as required by the pertinent regulations,
including those stipulated in article 517 of the Civil Indictment Act, article 56 of the Limited
Public Company Act and any other relevant legislation.

The Parties taking part in this Agreement indicate their conformity and approval of its contents as
it appears here in writing, they execute and sign it with my intervention, in

 

 

three original and authentic copies, one to be kept by each of them and one copy to be kept in my
files.

	 	 	 
	 

 

	 	 

	 

 

	 	 

	The Beneficiary
	 	Abengoa,
S.AExhibit 10.1

Transition Supply Agreement

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

RECITALS

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

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

            Therefore, the parties agree as follows:

1.      
SALE AND PURCHASE

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

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

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

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

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

 

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

2.      
MINIMUM FINANCIAL OBLIGATION OF
BUYER

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

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

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

 

2

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

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

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

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

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

 

3

3.       DELIVERY
INVOICING AND PAYMENT

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

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

4.       QUALITY
CRITERIA:  WARRANTIES AND INDEMNIFICATIONS

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

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

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

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

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

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

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

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

 

4

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

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

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

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

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

 

5

5.       PROPRIETARY
RIGHTS AND CONFIDENTIAL INFORMATION

5.1.       [Intentionally left blank].

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

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

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

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

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

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

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

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

 

6

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

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

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

5.9.       [Intentionally Omitted] 

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

6.       DESIGN
CHANGES AND TOOLING

6.1.      [Intentionally Omitted] 

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

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

 

7

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

7.      
CONTINUITY OF SUPPLY 

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

8.      
CANCELLATION OR TERMINATION

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

8.2.      [Intentionally omitted.]

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

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

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

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

 

8

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

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

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

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

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

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

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

8.5.4.    Buyer shall pay all outstanding invoices; and

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

9.       MISCELLANEOUS

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

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

 

9

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

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

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

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

If to Seller         Alamo
Group (OH) Inc.

Alamo Group (OH) Inc.

406 Mill Avenue, S.W.

New Philadelphia, Ohio 44663

Attn: Mike A. Haberman

 

with a copy to:

 

Alamo Group Inc.

1502 E. Walnut

Seguin, Texas 78155

Attn: Ronald A. Robinson,
President & CEO 

Facsimile: (830) 372-9683

 

                  If to Buyer:       JLG Industries, Inc.

                                    1
JLG Drive

                                    McConnellsburg,
PA 17233-9533

                                    Attn:
Peter Bonafede

                                    Facsimile:
(240) 313-1807

                                    E-mail:
pbonafede@jlg.com

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

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

 

10

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

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

[Signatures
Follow]

 

 

 

 

 

 

11

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

SELLER:

ALAMO GROUP
(OH) INC.

By: 
___________________________

       Ronald
A. Robinson, President

 

 

BUYER:

JLG
INDUSTRIES, INC.

By: 
___________________________

       Thomas
D. Singer, Senior Vice President

and General Counsel

 

 

 

Signature Page to Transition Supply Agreement

 

 

Exhibit A

Product Schedule

	
  Product

  	
  Pricing

  
	
  Category A Telescopic Material Handler Components
  - Major Weldments

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

  
	
  Category B Telescopic Material Handler Components
  - Detail Components

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

  
	
  Category C Telescopic Material Handler Components
  - Outsource Ready Detail Components

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

  
	
  Category D JLG 600SC Boom Lift Chassis

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

  

Payment Terms:

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

Repricing: 

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

Term:

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

 

 

Exhibit B - Purchase Order

 

[See attached]
 
 
 
 
 
 
 

  

Exhibit C -The Warranty

Limited Warranty

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

            Seller
warrants to Buyer as follows:

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

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

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

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

 

 

Exhibit D - Tooling

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

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

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

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

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

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

 

 

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

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

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