OMNIQUIP INTERNATIONAL, INC.
Common Stock
($0.01 Par Value Per Share)
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT made this 11th day of March, 1998,
by and among OmniQuip International, Inc., a Delaware corporation (the
"Company"), Harbour Group Investments III, L.P., a Delaware limited partnership,
Uniquip-HGI Associates, L.P., a Delaware limited partnership, and X. Xxxxx Stiff
(collectively, the "Selling Stockholders").
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of 1933, as amended
(the "Act"), a Registration Statement (as finally declared effective, the
"Registration Statement") on Form S-1 (File No. 333-46543) pursuant to which the
Selling Stockholders propose to sell to the public an aggregate of 3,600,000
shares of the Company's Common Stock through several underwriters led by Xxxxxx
Xxxxxxx & Co. Incorporated, Credit Suisse First Boston Corporation, Xxxxxxxx &
Co. Inc. and Xxxxxx X. Xxxxx & Co. Incorporated and certain of their respective
affiliates (collectively the "Underwriters"), in connection with an offering
pursuant to an underwriting agreement (the "Underwriting Agreement") to be
entered into by the Company, the Selling Stockholders and the Underwriters. In
addition, the Selling Stockholders propose to grant the Underwriters an option
to purchase up to an additional 506,669 shares of the Company's Common Stock
solely to cover over-allotments.
WHEREAS, the Underwriting Agreement contains certain provisions
with respect to the obligations and liabilities between the Company and the
Selling Stockholders on the one hand and the Underwriters on the other.
WHEREAS, the Underwriters require the Selling Stockholders to
agree to indemnify the Company and the Underwriters for certain liabilities.
WHEREAS, that certain Letter Agreement dated September 30, 1996
(the "Registration Rights Agreement") between the Company and the Selling
Stockholders requires the Company and the Selling Stockholders to indemnify each
other for certain liabilities.
WHEREAS, the Company and the Selling Stockholders desire to set
forth the obligations and liabilities between and among each other arising out
of their respective obligations and liabilities under the Underwriting Agreement
and the Registration Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. The Company agrees to indemnify and hold harmless the
Selling Stockholders and each person, if any, who controls each Selling
Stockholder within the meaning of the Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), against any losses, claims, damages or
liabilities, joint or several, to which any such person may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the forms of prospectus first filed with the
Commission pursuant to
and in accordance with Rule 424(b) under the Act or (if no such filing is
required) the prospectus contained in the Registration Statement, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon 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; and the Company will reimburse each Selling Stockholder
and each such controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Selling Stockholder or any
controlling person thereof specifically for use therein; and provided further
that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus, the indemnity
agreement contained in this Section 1 shall not inure to the benefit of any
entity or firm or any controlling person thereof from whom the person asserting
such losses, claims, damages or liabilities purchased the shares of Common Stock
concerned, to the extent that any such loss, claim, damage or liability of such
entity, firm or controlling person results from the fact that there was not sent
or given to such person, at or prior to the written confirmation of the sale of
such shares of Common Stock to such person, a copy of the Prospectus, if
required by the Act.
2. Each Selling Stockholder agrees, severally and not
jointly, to indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the Registration Statement and each person, if
any, who controls the Company within the meaning of the Act or the Exchange Act
against any losses, claims, damages or liabilities,
joint or several, to which any such person may become subject, under the Act or
otherwise insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, the
forms of prospectus first filed with the Commission pursuant to and in
accordance with Rule 424(b) under the Act or (if no such filing is required) the
prospectus contained in the Registration Statement, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon 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; in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by the Selling Stockholder specifically for use therein; and the Selling
Stockholder will reimburse any legal and other expenses reasonably incurred by
the Company, any such director, officer or controlling person thereof in
connection with investigating or defending any such loss, claim, damage or
liability or action as such expenses are incurred; provided, however, that with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus, the indemnity agreement contained
in this Section 2 shall not inure to the benefit of any entity or firm or any
controlling person thereof from whom the person asserting such losses, claims,
damages or liabilities purchased the shares of Common Stock concerned, to the
extent that any such loss, claim, damage or liability of such entity, firm or
controlling person results from the fact that there was not sent or given to
such person, at or prior to the written confirmation of the sale of such shares
of Common Stock to such person, a copy of the Prospectus, if required by the
Act.
3. Promptly after receipt by an indemnified party under
this Agreement of notice of the commencement of any action, such indemnified
party will, if a claim in respect
thereof is to be made against any indemnifying party under this Agreement,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve it from liability which it may
have to any indemnified party pursuant to Sections 1 or 2 of this Agreement,
except to the extent that it was unaware of such action and has been materially
prejudiced by such failure, or from any liability which it may have to any
indemnified party otherwise than pursuant to Sections 1 and 2 of this Agreement.
In case any such action is brought against any indemnified party and it notifies
an indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein, and, to the extent the indemnifying party
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In no event shall the indemnifying party be liable for
the fees and expenses of more than one counsel (in addition to any local
counsel) for all such indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same set of allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
4. If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under Sections
1 or 2 above, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in Section 1 or 2 above (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
on the one hand and the indemnified party on the other from the offering of the
Common Stock or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the indemnifying party on the one hand and the indemnified party on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the indemnifying party and the indemnified party. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omissions or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by any
party as a result of the losses, claims, damages, or liabilities referred to in
the first sentence of this Section shall be deemed to include any legal or other
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim which is the subject of this Section. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
5. The obligations of the Company and the Selling
Stockholders under this Agreement shall be in addition to any liability which
the Company and the Selling Stockholders may otherwise have.
6. It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth herein, including
the amounts of any requested reimbursement payments and the method of
determining such amounts, shall be settled by arbitration conducted under the
provisions of the Constitution and Rules of the Board of Governors of the New
York Stock Exchange, Inc. or pursuant to the Code of Arbitration Procedure of
the NASD or, if any such arbitration procedure is unavailable, pursuant to the
rules of the American Arbitration Association. Any such arbitration must be
commenced by service of a written demand for arbitration or written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the event
the party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions contained in Section 3 hereof
and would not resolve the ultimate propriety or enforceability of the obligation
to reimburse expenses which is created by the provisions of such Section 3
hereof.
7. In the event the Company and the Selling Stockholders
shall be liable to reimburse the Underwriters for out-of-pocket expenses
incurred by the Underwriters as a consequence of the refusal, failure or
inability by the Company or any Selling Stockholder to perform any undertaking
or obligation required to be performed by the Underwriting Agreement, the
Company and each of the Selling Stockholders agree that the person who
fails to perform its respective obligations shall be liable to the party who has
not defaulted in its obligations under the Underwriting Agreement for all
amounts required to be paid by the Company and the Selling Stockholders pursuant
to the Underwriting Agreement.
8. Any notice, claim or demand hereunder shall be made in
writing and shall be sufficient if given as provided in the Underwriting
Agreement.
9. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective
heirs, executors, administrators, successors and assigns.
10. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to such
jurisdiction's conflicts of laws principles.
11. This Agreement may be executed by one or more parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all of which shall be deemed to be one and the same instrument.
12. Except as otherwise specifically defined herein, all
capitalized terms used in this Agreement shall have the meanings assigned such
terms in the Underwriting Agreement.
IN WITNESS WHEREOF, the parties below have caused the foregoing
to be executed on their behalf this 11th day of March, 1998.
OMNIQUIP INTERNATIONAL, INC.
By: /s/ X. Xxxxx Stiff
X. Xxxxx Stiff
President and Chief Executive Officer
HARBOUR GROUP INVESTMENTS III, L.P.
By: HARBOUR GROUP III MANAGEMENT
CO., L.P., General Partner
By: HGM III CO., General Partner
By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
President
UNIQUIP-HGI ASSOCIATES, L.P.
By: HARBOUR GROUP INDUSTRIES, INC.,
General Partner
By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Vice President - Operations
X. Xxxxx Stiff
/s/ X. Xxxxx Stiff
