Exhibit 10.3

TERM NOTE

 

$2,000,000.00    October 6, 2008 Due Date: November 10, 2016   

FOR VALUE RECEIVED, MANITEX INTERNATIONAL, INC. (“Manitex”), a Michigan
corporation, having an address at 7402 West 100th Place, Bridgeview, Illinois
60455, (formerly known as Veri-Tek International, Corp.) (the “Borrower”),
unconditionally promises to pay to the order of TEREX CORPORATION, a Delaware
corporation (“Terex”), the original principal sum of TWO MILLION DOLLARS AND NO
CENTS ($2,000,000.00) in lawful money of the United States of America in
immediately available funds.

Borrower shall make annual principal payments to Terex of Two Hundred and Fifty
Thousand Dollars ($250,000.00) commencing March 1, 2009 and on each year
thereafter through March 1, 2016. At Borrower’s option, up to $150,000.00 of the
$250,000.00 annual principal payment may be made in shares of common stock of
Borrower having a market value (as determined below) of $150,000.00 so long as
the common stock of Borrower is listed for trading on the NASDAQ or other
national stock exchange. For the purposes of determining the market value of the
shares of common stock of Borrower, the value of each share of common stock of
Borrower shall be the average of the closing prices on the NASDAQ as reported in
The Wall Street Journal (national edition) (or if not reported thereby, any
other authoritative source) for the twenty (20) consecutive trading days ending
on the trading day immediately prior to the date of such payment.

Borrower shall repay all outstanding amounts under this Note on November 10,
2016, the final maturity date of this Note.

The interest accrued hereunder shall be payable quarterly commencing January 1,
2009. The unpaid principal balance hereof shall bear interest at the rate per
annum equal to six percent (6.0%) (the “Note Rate”). Interest shall be
calculated for the actual number of days elapsed, using a daily rate determined
by dividing the annual rate by 360. Upon an Event of Default (as defined below),
interest on the then due and outstanding principal balance and all accrued and
unpaid interest shall accrue from the due date of said event of default until
actual payment is made at a rate per annum equal to the Note Rate plus two
percent (2%). In no event will the interest rate charged or received hereunder
at any time exceed the maximum interest rate permitted by applicable law.
Payments received by Terex hereunder which would otherwise cause the interest
rate to exceed such maximum interest rate will, to the extent of such excess,
hereby be deemed to be prepayments of principal and applied as such as herein
provided. All payments hereunder shall be applied first to the payment of
accrued interest before being applied to the payment of principal.

If any payment under this Note becomes due and payable on a Saturday, Sunday or
other day on which commercial banks in New York City, New York are authorized or
required by law to close, the payment shall be extended to the next succeeding
business day.

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If any of the following events occur (each an “Event of Default”), then the
entire unpaid principal amount of, and accrued and unpaid interest on, this Note
shall immediately be due and payable:

 

  •  

Borrower fails to pay the principal or interest of this Note when due and such
failure to pay continues for 30 days; or

 

  •  

Borrower commences any voluntary proceeding under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, receivership,
dissolution, or liquidation law or statute, of any jurisdiction, whether now or
subsequently in effect; or Borrower is adjudicated insolvent or bankrupt by a
court of competent jurisdiction; or Borrower petitions or applies for,
acquiesces in, or consents to, the appointment of any receiver or trustee of
Borrower or for all or substantially all of its property or assets; or Borrower
makes an assignment for the benefit of its creditors; or Borrower admits in
writing its inability to pay its debts as they mature; or

 

  •  

There is commenced against Borrower any proceeding relating to Borrower under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute, of any jurisdiction,
whether now or subsequently in effect, and the proceeding remains undismissed
for a period of ninety (90) days or Borrower by any act indicates its consent
to, approval of, or acquiescence in, the proceeding; or a receiver or trustee is
appointed for Borrower or for all or substantially all of its property or
assets, and the receivership or trustee remains undischarged for a period of
ninety (90) days; or a warrant of attachment, execution or similar process is
issued against any substantial part of the property or assets of Borrower, and
the warrant or similar process is not dismissed or bonded within ninety
(90) days after the levy; or

 

  •  

Borrower and/or Crane & Machinery, Inc. (collectively, the “Borrower Parties”)
defaults under that certain Restructuring Agreement dated as of the date of this
Note (the “Restructuring Agreement”) or any of the other agreements contemplated
by the Restructuring Agreement, or any mortgage, security agreement or other
document securing the obligations hereunder (collectively, the “Transaction
Documents”), or there is a breach by any of the Borrower Parties of any of its
representations, warranties or covenants under the Restructuring Agreement or
any of the other agreements between Borrower Parties and Terex or its
affiliates; or

 

  •  

Borrower (i) sells, conveys, leases all or substantially all of its assets; or
(ii) another entity merges into Borrower or Borrower consolidates with or merges
into any other entity and Borrower is not the surviving entity and/or the
shareholders of the Borrower do own less than a majority of the economic and
voting rights of the surviving entity; or (iii) any “person” or “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities
and Exchange Act of 1934, directly or indirectly, of more than 50% of the total
voting power of the Voting Stock of Borrower, whether as a result of issuance of
securities of Borrower, any

 

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merger, consolidation, liquidation or dissolution of the Company, any direct or
indirect transfer of securities or otherwise; or (iv) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of Borrower (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of 60% of the directors of
Borrower then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of
Borrower then in office.

 

  •  

Any event or condition shall occur which results in the acceleration of the
maturity of any obligation of Borrower or enables (or, with the giving of notice
or lapse of time or both, would enable) the holder of such obligation or any
person acting on such holder’s behalf to accelerate the maturity thereof; or

 

  •  

A final judgment or order for the payment of money in excess of Two Hundred
Fifty Thousand Dollars ($250,000) shall be rendered against Borrower and shall
remain unpaid for a period of thirty (30) days after final appeal.

This Note constitutes the “Note” issued pursuant to that certain Restructuring
Agreement. This Note is made for a commercial purpose and is secured by, among
other things, the collateral granted to Terex under the terms of a Security
Agreement by and among Crane & Machinery, Inc. and Terex dated as of the date
hereof.

Without affecting the liability of the Borrower, or any indorser, surety or
guarantor, Terex may, without notice, renew or extend the time for payment,
accept partial payments, release or impair any collateral security for the
payment of this Note, or agree not to sue any party liable on it. The Borrower
and all endorsers, sureties and guarantors hereby waive presentment, protest,
demand and notice of dishonor.

No delay in the right of Terex in exercising any of its options, powers or
rights nor any partial or single exercise of its options, powers or rights shall
constitute a waiver thereof or of any other option, power or right, and no
waiver on the part of Terex of any of its options, powers or rights shall
constitute a waiver of any other option, power or right. Failure of Terex to
assert any right herein shall not be deemed to be a waiver thereof.

Borrower shall pay upon demand all costs and expenses incurred by Terex in
connection with the Transaction Documents, including, without limitation, all
losses, costs and expenses in connection with the exercise, enforcement,
protection and preservation of Terex’s rights or remedies under the Transaction
Documents, or in connection with legal advice relating to thereto (including,
without limitation, court costs, attorney’s fees and expenses of accountants and
appraisers). Borrower will indemnify and save Terex harmless from and against
any loss or expense which Terex sustains or incurs as a consequence of an Event
of Default.

This Note may be amended, modified or canceled only by the written agreement of
Borrower and Terex.

 

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This Note shall be governed by and construed in accordance with the internal
laws of the State of New York, without regard for any conflict of law provision
of that jurisdiction or any jurisdiction.

TO INDUCE TEREX TO ACCEPT THIS NOTE, THE BORROWER IRREVOCABLY AGREES THAT ALL
ACTIONS ARISING, DIRECTLY OR INDIRECTLY, AS A RESULT OR CONSEQUENCE OF THIS
NOTE, THE RESTRUCTURING AGREEMENT, OR ANY OTHER AGREEMENT WITH TEREX, SHALL BE
INSTITUTED AND LITIGATED ONLY IN COURTS HAVING THEIR SITUS IN NEW YORK COUNTY,
NEW YORK. THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE
OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN SAID COUNTY, AND WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS. THE BORROWER HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY
BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE BORROWER AS
SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF
COURT OR OTHERWISE.

THIS TERM NOTE is executed as of the date set forth above, by:

 

MANITEX INTERNATIONAL, INC., a Michigan corporation By:  

/s/ Andrew Rooke

Name:   Andrew Rooke Title:   President

 

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