GUARANTEE AND COLLATERAL AGREEMENT

dated as of

July 14, 2006,

among

TEREX CORPORATION,

 

Certain Subsidiaries of TEREX CORPORATION

from time to time party hereto

and

CREDIT SUISSE,

as Collateral Agent

 

[CS&M Ref No. 5865-285]

 

 

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TABLE OF CONTENTS

 

Page

ARTICLE I

 

Definitions

 

 

SECTION 1.01.

Credit Agreement

1

 

SECTION 1.02.

Other Defined Terms

2

 

ARTICLE II

 

Guarantee

 

 

SECTION 2.01.

Guarantee

6

 

SECTION 2.02.

Guarantee of Payment

6

 

SECTION 2.03.

No Limitations, Etc

7

 

SECTION 2.04.

Reinstatement

8

 

SECTION 2.05.

Agreement To Pay; Subrogation

8

 

SECTION 2.06.

Information

8

 

ARTICLE III

 

Pledge of Securities

 

 

SECTION 3.01.

Pledge

8

 

SECTION 3.02.

Delivery of the Pledged Collateral

9

 

SECTION 3.03.

Representations, Warranties and Covenants

10

 

SECTION 3.04.

Interests in Limited Liability Companies and Limited

 

 

Partnerships

11

 

SECTION 3.05.

Registration in Nominee Name; Denominations

12

 

SECTION 3.06.

Voting Rights; Dividends and Interest, Etc

12

 

ARTICLE IV

 

Security Interests in Personal Property

 

 

SECTION 4.01.

Security Interest

14

 

SECTION 4.02.

Representations and Warranties

16

 

SECTION 4.03.

Covenants

18

 

SECTION 4.04.

Other Actions

21

 

SECTION 4.05.

Covenants Regarding Patent, Trademark and Copyright

 

 

Collateral

23

 

 

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ARTICLE V

 

Remedies

 

 

SECTION 5.01.

Remedies upon Default

24

 

SECTION 5.02.

Application of Proceeds

26

 

SECTION 5.03.

Grant of License to Use Intellectual Property

27

 

SECTION 5.04.

Securities Act, Etc

27

 

ARTICLE VI

 

Indemnity, Subrogation and Subordination

 

 

SECTION 6.01.

Indemnity and Subrogation

28

 

SECTION 6.02.

Contribution and Subrogation

28

 

SECTION 6.03.

Subordination

29

 

ARTICLE VII

 

Miscellaneous

 

 

SECTION 7.01.

Notices

29

 

SECTION 7.02.

Security Interest Absolute

29

 

SECTION 7.03.

Survival of Agreement

29

 

SECTION 7.04.

Binding Effect; Several Agreement

30

 

SECTION 7.05.

Successors and Assigns

30

 

SECTION 7.06.

Collateral Agent’s Fees and Expenses; Indemnification

30

 

SECTION 7.07.

Collateral Agent Appointed Attorney-in-Fact

31

 

SECTION 7.08.

Applicable Law

32

 

SECTION 7.09.

Waivers; Amendment

32

 

SECTION 7.10.

WAIVER OF JURY TRIAL

32

 

SECTION 7.11.

Severability

33

 

SECTION 7.12.

Counterparts

33

 

SECTION 7.13.

Headings

33

 

SECTION 7.14.

Jurisdiction; Consent to Service of Process

33

 

SECTION 7.15.

Termination or Release

34

 

SECTION 7.16.

Additional Subsidiaries

35

 

SECTION 7.17.

Right of Setoff

35

 

 

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Schedules

 

Schedule I

Subsidiary Guarantors

 

 

Schedule II

Equity Interests; Pledged Debt Securities

 

Schedule III

Perfection Intellectual Property

 

 

Exhibits

 

Exhibit A

Form of Supplement

 

 

Exhibit B

Form of Perfection Certificate

 

 

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GUARANTEE AND COLLATERAL AGREEMENT dated as of July 14, 2006 (this “Agreement”),
among TEREX CORPORATION, a Delaware corporation (“Terex”), the Subsidiaries of
Terex from time to time party hereto and CREDIT SUISSE (“Credit Suisse”), as
collateral agent (in such capacity, the “Collateral Agent”).

PRELIMINARY STATEMENT

 

Reference is made to the Credit Agreement dated as of July 14, 2006 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Terex, New Terex Holdings UK Limited, a limited company organized under
the laws of England, Terex International Financial Services Company, a company
organized under the laws of the Republic of Ireland, Terex Mining Australia Pty
Ltd, a company organized under the laws of Australia and registered in New South
Wales, Australia, Terex Italia S.R.L., a company organized under the laws of the
Republic of Italy, the lenders from time to time party thereto (the “Lenders”)
and Credit Suisse, as administrative agent (in such capacity, the
“Administrative Agent”) and Collateral Agent.

The Lenders and the Issuing Banks (such term and each other capitalized term
used but not defined in this preliminary statement having the meaning given or
ascribed to it in Article I) have agreed to extend credit to the Borrowers
pursuant to, and upon the terms and conditions specified in, the Credit
Agreement. The obligations of the Lenders and the Issuing Banks to extend credit
to the Borrowers are conditioned upon, among other things, the execution and
delivery of this Agreement by Terex and each Subsidiary Guarantor. Each
Subsidiary Guarantor is an affiliate of the Borrowers, will derive substantial
benefits from the extension of credit to the Borrowers pursuant to the Credit
Agreement and is willing to execute and deliver this Agreement in order to
induce the Lenders and the Issuing Banks to extend such credit. Accordingly, the
parties hereto agree as follows:

ARTICLE I

 

Definitions

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and
not otherwise defined herein have the meanings set forth in the Credit
Agreement. All capitalized terms defined in the New York UCC (as such term is
defined herein) and not defined in this Agreement have the meanings specified
therein. All references to the Uniform Commercial Code shall mean the New York
UCC.

(b) The rules of construction specified in Section 1.02 of the Credit Agreement
also apply to this Agreement.

 

 

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SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Accounts Receivable” shall mean all Accounts and all right, title and interest
in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.

“Article 9 Collateral” shall have the meaning assigned to such term in
Section 4.01.

“Collateral” shall mean the Article 9 Collateral and the Pledged Collateral.

“Copyright License” shall mean any written agreement, now or hereafter in
effect, granting any right to any third person under any copyright now or
hereafter owned by any Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any copyright now or
hereafter owned by any third person, and all rights of such Grantor under any
such agreement.

“Copyrights” shall mean all of the following now owned or hereafter acquired by
any Grantor: (a) all copyright rights in any work subject to the copyright laws
of the United States or any other country, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office (or any
successor office or any similar office in any other country), including those
listed on Schedule III.

“Credit Agreement” shall have the meaning assigned to such term in the
preliminary statement.

“General Intangibles” shall mean all choses in action and causes of action and
all other intangible personal property of any Grantor of every kind and nature
(other than Accounts) now owned or hereafter acquired by any Grantor, including
Indebtedness of any Grantor whether evidenced by a promissory note or not, all
rights and interests in partnerships, limited partnerships, limited liability
companies and other unincorporated entities, corporate or other business
records, indemnification claims, contract rights (including rights under leases,
whether entered into as lessor or lessee, Hedging Agreements and other
agreements), Intellectual Property, goodwill, registrations, franchises, tax
refund claims and any letter of credit, guarantee, claim, security interest or
other security held by or granted to any Grantor to secure payment by an Account
Debtor of any of the Accounts.

“Grantors” shall mean Terex and the Subsidiary Guarantors.

 

 

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“Guarantors” shall mean the Subsidiary Guarantors and, to the extent that Terex
is not otherwise liable with respect to any Obligations, Terex.

“Intellectual Property” shall mean all intellectual and similar property of any
Grantor of every kind and nature now owned or hereafter acquired by any Grantor,
including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade
secrets, confidential or proprietary technical and business information,
know-how, show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.

“License” shall mean any Patent License, Trademark License, Copyright License or
other license or sublicense agreement to which any Grantor is a party, including
those listed on Schedule III.

“Loan Document Obligations” shall mean (a) the due and punctual payment of (i)
the principal of and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, (ii) each payment required to be made by any
Borrower under the Credit Agreement in respect of any Letter of Credit, when and
as due, including payments in respect of reimbursement of disbursements,
interest thereon and obligations to provide cash collateral, and (iii) all other
monetary obligations of any Borrower to any of the Secured Parties under the
Credit Agreement and each of the other Loan Documents, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), (b) the due and punctual
performance of all other obligations of each Borrower under or pursuant to the
Credit Agreement and each of the other Loan Documents, and (c) the due and
punctual payment and performance of all the obligations of each other Loan Party
under or pursuant to this Agreement and each of the other Loan Documents.

“Material Debt Security” shall mean any security evidencing Indebtedness held by
any Grantor on the date hereof or issued to any Grantor in the future that has
an aggregate principal amount in excess of $50,000,000 (other than any such
security evidencing Indebtedness of any other Grantor); provided that, for
purposes of determining whether such $50,000,000 threshold is exceeded, (i) all
securities evidencing Indebtedness between any two specified persons shall be
deemed to be one security and (ii) any trade debt between any two specified
persons shall be excluded from such determination. Notwithstanding anything in
any Loan Document to the contrary, no Grantor shall be required to have any such
Indebtedness evidenced by any security or instrument.

 

 

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“New York UCC” shall mean the Uniform Commercial Code as from time to time in
effect in the State of New York.

“Obligations” shall mean (a) the Loan Document Obligations and (b) the due and
punctual payment and performance of all obligations of each Loan Party under
each Hedging Agreement that (i) is in effect on the Closing Date with a
counterparty that is the Administrative Agent or a Lender or an Affiliate of the
Administrative Agent or a Lender as of the Closing Date or (ii) is entered into
after the Closing Date with any counterparty that is the Administrative Agent or
a Lender or an Affiliate of the Administrative Agent or a Lender at the time
such Hedging Agreement is entered into.

“Patent License” shall mean any written agreement, now or hereafter in effect,
granting to any third person any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third person, is in existence, and all rights of any Grantor under
any such agreement.

“Patents” shall mean all of the following now owned or hereafter acquired by any
Grantor: (a) all letters patent of the United States or the equivalent thereof
in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office (or any successor
or any similar offices in any other country), including those listed on
Schedule III, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.

“Perfection Certificate” shall mean a certificate substantially in the form of
Exhibit B, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by the chief legal officer or a
Responsible Officer of Terex.

“Perfection Intellectual Property” shall mean the Patents and Trademarks listed
on Schedule III hereto.

“Pledged Collateral” shall have the meaning assigned to such term in
Section 3.01.

“Pledged Debt Securities” shall have the meaning assigned to such term
in Section 3.01.

“Pledged Securities” shall mean any promissory notes, stock certificates or
other securities now or hereafter included in the Pledged Collateral, including
all certificates, instruments or other documents representing or evidencing any
Pledged Collateral.

 

 

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“Pledged Stock” shall have the meaning assigned to such term in Section 3.01.

“Secured Parties” shall mean (a) the Lenders, (b) the Administrative Agent, (c)
the Collateral Agent, (d) each Issuing Bank, (e) each counterparty to any
Hedging Agreement with a Loan Party that either (i) is in effect on the Closing
Date if such counterparty is the Administrative Agent or a Lender or an
Affiliate of the Administrative Agent or a Lender as of the Closing Date or (ii)
is entered into after the Closing Date if such counterparty is the
Administrative Agent or a Lender or an Affiliate of the Administrative Agent or
a Lender at the time such Hedging Agreement is entered into, (f) the
beneficiaries of each indemnification obligation undertaken by any Loan Party
under any Loan Document and (g) the successors and assigns of each of the
foregoing.

“Security ” shall have the meaning assigned to such term in Article 8 of the New
York UCC.

“Security Interest” shall have the meaning assigned to such term in
Section 4.01.

“Subsidiary Guarantors” shall mean (a) the Subsidiaries identified on Schedule I
hereto as Subsidiary Guarantors and (b) each other Subsidiary that becomes a
party to this Agreement as a Subsidiary Guarantor after the Closing Date.

“Trademark License” shall mean any written agreement, now or hereafter in
effect, granting to any third person any right to use any trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any trademark now or
hereafter owned by any third person, and all rights of any Grantor under any
such agreement.

“Trademarks” shall mean all of the following now owned or hereafter acquired by
any Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office (or
any successor office) or any similar offices in any State of the United States
or any other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule III, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.

“Uncertificated Foreign Security” shall mean an Equity Interest constituting a
Security at any time owned by any Grantor in any Material First Tier Foreign
Subsidiary, which Equity Interest is not represented by a certificate.

 

 

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6

 

 

“Uncertificated Limited Liability Company Interest” shall mean a limited
liability company membership interest at any time owned by any Grantor in any
Material Domestic Restricted Subsidiary or Material First Tier Foreign
Subsidiary which is a limited liability company and which limited liability
company membership interest is not a Security and not represented by a
certificate.

“Uncertificated Partnership Interest” shall mean a general partnership interest
or limited partnership interest at any time owned by any Grantor in any Material
Domestic Restricted Subsidiary or Material First Tier Foreign Subsidiary which
is a limited partnership and which general partnership interest or limited
partnership interest is not a Security and not represented by a certificate.

“Unfunded Advances/Participations” shall mean (a) with respect to the
Administrative Agent, the aggregate amount, if any (i) made available to any
Borrower on the assumption that each relevant Lender has made its portion of the
applicable Borrowing available to the Administrative Agent as contemplated by
Section 2.02(d) of the Credit Agreement and (ii) with respect to which a
corresponding amount shall not in fact have been returned to the Administrative
Agent by such Borrower or made available to the Administrative Agent by any such
Lender, (b) with respect to the Swingline Lender or an A/C Fronting Lender, the
aggregate amount, if any, of participations in respect of any outstanding
Swingline Loan and A/C Fronted Loans, respectively, that shall not have been
funded by the Revolving Credit Lenders in accordance with Section 2.22(e) and
2.24(e), respectively, of the Credit Agreement and (c) with respect to any
Issuing Bank (other than any Additional L/C Issuing Bank, with respect to any
Additional Letter of Credit), the aggregate amount, if any, of participations in
respect of any outstanding L/C Disbursement that shall not have been funded by
the Revolving Credit Lenders in accordance with Sections 2.23(d) and 2.02(f) of
the Credit Agreement.

ARTICLE II

 

Guarantee

SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with
the other Guarantors and severally, as a primary obligor and not merely as a
surety, the due and punctual payment and performance of the Obligations. Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Obligation. Each Guarantor waives presentment to, demand of payment from and
protest to any Borrower or any other Loan Party of any Obligation, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment.

SECTION 2.02. Guarantee of Payment. Each Guarantor further agrees that its
guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any security held for the payment
of the Obligations or to

 

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7

 

any balance of any Deposit Account or credit on the books of the Collateral
Agent or any other Secured Party in favor of any Borrower or any other person.

SECTION 2.03. No Limitations, Etc. (a) Except for termination of a Guarantor’s
obligations hereunder as expressly provided in Section 7.15, the obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise
affected by (i) the failure of the Collateral Agent or any other Secured Party
to assert any claim or demand or to enforce any right or remedy under the
provisions of any Loan Document or otherwise, (ii) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of, any Loan Document or any other agreement, including with respect to any
other Guarantor under this Agreement, (iii) the release of, or any impairment of
or failure to perfect any Lien on or security interest in, any security held by
the Collateral Agent or any other Secured Party for the Obligations or any of
them, (iv) any default, failure or delay, wilful or otherwise, in the
performance of the Obligations, or (v) any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations). Each Guarantor
expressly authorizes the Collateral Agent to take and hold security for the
payment and performance of the Obligations, to exchange, waive or release any or
all such security (with or without consideration), to enforce or apply such
security and direct the order and manner of any sale thereof in its sole
discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.

(b) To the fullest extent permitted by applicable law, each Guarantor waives any
defense based on or arising out of any defense of any Borrower or any other Loan
Party or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any Borrower or any
other Loan Party, other than the indefeasible payment in full in cash of all the
Obligations. The Collateral Agent and the other Secured Parties may, at their
election, foreclose on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such security in lieu
of foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any Borrower or any other Loan Party or exercise any other
right or remedy available to them against any Borrower or any other Loan Party,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations have been fully and indefeasibly
paid in full in cash. To the fullest extent permitted by applicable law, each
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against any Borrower or any other Loan Party, as the case may be, or any
security.

 

 

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SECTION 2.04. Reinstatement. Each Guarantor agrees that its guarantee hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by the Collateral Agent or any other Secured Party upon
the bankruptcy or reorganization of any Borrower, any other Loan Party or
otherwise.

SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of any Borrower or any other Loan Party to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Collateral Agent for
distribution to the applicable Secured Parties in cash the amount of such unpaid
Obligation. Upon payment by any Guarantor of any sums to the Collateral Agent as
provided above, all rights of such Guarantor against any Borrower or any other
Guarantor arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.

SECTION 2.06. Information. Each Guarantor assumes all responsibility for being
and keeping itself informed of each Borrower’s and each Guarantor’s financial
condition and assets and of all other circumstances bearing upon the risk of
nonpayment of the Obligations and the nature, scope and extent of the risks that
such Guarantor assumes and incurs hereunder, and agrees that neither the
Collateral Agent nor any other Secured Party will have any duty to advise such
Guarantor of information known to it or any of them regarding such circumstances
or risks.

ARTICLE III

 

Pledge of Securities

SECTION 3.01. Pledge. As security for the payment or performance, as the case
may be, in full of the Obligations, each Grantor hereby assigns and pledges to
the Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, and hereby grants to the Collateral Agent, its successors and
assigns, for the ratable benefit of the Secured Parties, a security interest in,
all of such Grantor’s right, title and interest in, to and under (a) the Equity
Interests of (i) each Material Domestic Restricted Subsidiary and Material First
Tier Foreign Subsidiary in existence on the date hereof and (x) in the case of
certificated Equity Interests constituting Securities, listed in Part A of
Schedule II hereto or (y) in the case of Uncertificated Foreign Securities,
Uncertificated Limited Liability Company Interests and Uncertificated
Partnership Interests, listed in Part B of Schedule II hereto, and (ii) each
Material Domestic Restricted Subsidiary and each Material First Tier Foreign
Subsidiary obtained in the future by such Grantor (including the Equity
Interests of each Subsidiary that becomes a Material Domestic Restricted
Subsidiary or Material First Tier Foreign Subsidiary in the future) and the
certificates representing all such Equity Interests (collectively referred to

 

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9

 

herein as the “Pledged Stock”); provided, however, that the Pledged Stock shall
not include (i) more than 65% of the issued and outstanding voting Equity
Interests of any Material First Tier Foreign Subsidiary or (ii) to the extent
that applicable law requires that a Subsidiary issue directors’ qualifying
shares, such qualifying shares, (b)(i) the Material Debt Securities held by such
Grantor on the date hereof (including all such Material Debt Securities listed
opposite the name of such Grantor in Part C of Schedule II), (ii) any Material
Debt Securities in the future issued to such Grantor and (iii) the promissory
notes and any other instruments evidencing such Material Debt Securities
(collectively referred to herein as the “Pledged Debt Securities”), (c) all
other property that may be delivered to and held by the Collateral Agent
pursuant to the terms of this Section 3.01, (d) subject to Section 3.06, all
payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of, in exchange for or upon the conversion of, and all other Proceeds
received in respect of, the securities referred to in clauses (a) and (b) above,
(e) subject to Section 3.06, all rights and privileges of such Grantor with
respect to the securities and other property referred to in clauses (a), (b),
(c) and (d) above, and (f) all Proceeds of any of the foregoing (the items
referred to in clauses (a) through (f) above being collectively referred to as
the “Pledged Collateral”).

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.

SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Grantor agrees
promptly to deliver or cause to be delivered to the Collateral Agent any and all
certificates, instruments or other documents representing or evidencing Pledged
Securities (other than Uncertificated Foreign Securities, Uncertificated Limited
Liability Company Interests and Uncertificated Partnership Interests).

(b) Upon delivery to the Collateral Agent, (i) any certificate, instrument or
document representing or evidencing Pledged Securities (other than
Uncertificated Foreign Securities, Uncertificated Limited Liability Company
Interests and Uncertificated Partnership Interests) shall be accompanied by
undated stock powers duly executed in blank or other undated instruments of
transfer satisfactory to the Collateral Agent and duly executed in blank and by
such other instruments and documents as the Collateral Agent may reasonably
request and (ii) all other property comprising part of the Pledged Collateral
(other than Uncertificated Foreign Securities, Uncertificated Limited Liability
Company Interests and Uncertificated Partnership Interests) shall be accompanied
by proper instruments of assignment duly executed by the applicable Grantor and
such other instruments or documents as the Collateral Agent may reasonably
request. Each delivery of Pledged Securities (other than Uncertificated Foreign
Securities, Uncertificated Limited Liability Company Interests and
Uncertificated Partnership Interests) shall be accompanied by a schedule
describing the securities, which schedule shall be attached hereto as Part A, B
or C, as applicable, of Schedule II and made a part hereof; provided that
failure to attach any such schedule hereto shall not

 

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affect the validity of the pledge of such Pledged Securities. Each schedule so
delivered shall supplement any prior schedules so delivered.

(c) Each Grantor pledging Uncertificated Limited Liability Company Interests or
Uncertificated Partnership Interests shall deliver to the Collateral Agent an
agreement among the issuer thereof, the Collateral Agent and such Grantor, in
form and substance satisfactory to the Collateral Agent, pursuant to which such
issuer agrees to comply with any and all instructions originated by the
Collateral Agent without further consent by such Grantor and not to comply with
instructions regarding such Uncertificated Limited Liability Company Interests
or Uncertificated Partnership Interests, as applicable, originated by any other
person other than a court of competent jurisdiction. The Collateral Agent agrees
with each Grantor that the Collateral Agent shall not give any such instructions
or directions to any such issuer unless an Event of Default has occurred and is
continuing.

SECTION 3.03. Representations, Warranties and Covenants. The Grantors jointly
and severally represent, warrant and covenant to and with the Collateral Agent,
for the benefit of the Secured Parties, that:

(a) Schedule II correctly sets forth the percentage of the issued and
outstanding shares of each class of the Equity Interests of the issuer thereof
represented by the Pledged Stock and includes all Equity Interests, debt
securities and promissory notes required to be pledged hereunder;

(b) the Pledged Stock and Pledged Debt Securities have been duly and validly
authorized and issued by the issuers thereof and (i) in the case of Pledged
Stock, are fully paid and nonassessable and (ii) in the case of Pledged Debt
Securities, are legal, valid and binding obligations of the issuers thereof;

(c) except for the security interests granted hereunder (or otherwise permitted
under the Credit Agreement), each Grantor (i) is and, subject to any transfers
made in compliance with the Credit Agreement, will continue to be the direct
owner, beneficially and of record, of the Pledged Securities indicated on
Schedule II as owned by such Grantor, (ii) holds the same free and clear of all
Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on, the Pledged
Collateral, other than transfers made in compliance with the Credit Agreement,
and (iv) subject to Section 3.06, will cause any and all Pledged Collateral
(other than Uncertificated Foreign Securities, Uncertificated Limited Liability
Company Interests and Uncertificated Partnership Interests), whether for value
paid by such Grantor or otherwise, to be forthwith deposited with the Collateral
Agent and pledged or assigned hereunder;

(d) except for restrictions and limitations imposed by the Loan Documents or
securities laws generally, the Pledged Collateral is and will continue to be
freely transferable and assignable, and none of the Pledged Collateral is or
will be subject to any option, right of first refusal, shareholders

 

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agreement, charter or by-law provisions or contractual restriction of any nature
that might prohibit, impair, delay or otherwise affect the pledge of such
Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or
the exercise by the Collateral Agent of rights and remedies hereunder;

(e) each Grantor (i) has the power and authority to pledge the Pledged
Collateral pledged by it hereunder in the manner hereby done or contemplated and
(ii) will defend its title or interest thereto or therein against any and all
Liens (other than the Lien created or permitted by the Loan Documents), however
arising, of all persons whomsoever;

(f) no consent or approval of any Governmental Authority, any securities
exchange or any other person was or is necessary to the validity of the pledge
effected hereby (other than such as have been obtained and are in full force and
effect);

(g) by virtue of the execution and delivery by each Grantor of this Agreement,
when (i) any Pledged Securities (other than Uncertificated Foreign Securities,
Uncertificated Limited Liability Company Interests and Uncertificated
Partnership Interests) are delivered to the Collateral Agent in accordance with
this Agreement, and (ii) the issuer of any Uncertificated Foreign Securities,
Uncertificated Limited Liability Company Interests or Uncertificated Partnership
Interests, as applicable, the relevant Grantor and the Collateral Agent have
executed an agreement described in Section 3.02(c), the Collateral Agent will
obtain a legal, valid and perfected first-priority lien upon and security
interest in such Pledged Securities, to the extent that the laws of the United
States or any state thereof govern the creation and perfection of any such
security interest, as security for the payment and performance of the
Obligations; and

(h) the pledge effected hereby is effective to vest in the Collateral Agent, for
the ratable benefit of the Secured Parties, the rights of the Collateral Agent
in the Pledged Collateral as set forth herein and all action by any Grantor
necessary or desirable to protect and perfect the Lien on the Pledged Collateral
has been duly taken.

SECTION 3.04. Interests in Limited Liability Companies and Limited Partnerships.
(a) Each Grantor acknowledges and agrees that (i) each interest in any limited
liability company or limited partnership which is a Subsidiary, pledged
hereunder and represented by a certificate shall be a Security and shall be
governed by Article 8 of the New York UCC and (ii) each such interest shall at
all times hereafter be represented by a certificate.

(b) Each Grantor further acknowledges and agrees that (i) each interest in any
limited liability company or limited partnership which is a Subsidiary, pledged
hereunder and not represented by a certificate shall not be a Security and shall
not be governed by Article 8 of the New York UCC, and (ii) such Grantor shall at
no time elect to treat any such interest as a Security or issue any certificate
representing such interest,

 

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unless such Grantor provides prior written notification to the Collateral Agent
of such election and immediately delivers any such certificate to the Collateral
Agent pursuant to the terms hereof.

SECTION 3.05. Registration in Nominee Name; Denominations. Upon the occurrence
and during the continuance of an Event of Default, the Collateral Agent, on
behalf of the Secured Parties, shall have the right (in its sole and absolute
discretion) to hold the Pledged Securities in its own name as pledgee, the name
of its nominee (as pledgee or as sub-agent) or the name of the applicable
Grantor, endorsed or assigned in blank or in favor of the Collateral Agent. Each
Grantor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities in its
capacity as the registered owner thereof. Upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall have the right to
exchange the certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.

SECTION 3.06. Voting Rights; Dividends and Interest, Etc. (a) Unless and until
an Event of Default shall have occurred and be continuing and the Collateral
Agent shall have given the Grantors notice of its intent to exercise its rights
under this Agreement (which notice shall be deemed to have been given
immediately upon the occurrence of an Event of Default under paragraph (g) or
(h) of Article VII of the Credit Agreement):

(i)          Each Grantor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms of this
Agreement, the Credit Agreement and the other Loan Documents; provided, however,
that such rights and powers shall not be exercised in any manner that could
materially and adversely affect the rights inuring to a holder of any Pledged
Securities or the rights and remedies of any of the Collateral Agent or the
other Secured Parties under this Agreement or the Credit Agreement or any other
Loan Document or the ability of the Secured Parties to exercise the same.

(ii)         The Collateral Agent shall execute and deliver to each Grantor, or
cause to be executed and delivered to each Grantor, all such proxies, powers of
attorney and other instruments as such Grantor may reasonably request for the
purpose of enabling such Grantor to exercise the voting and/or consensual rights
and powers it is entitled to exercise pursuant to paragraph (i) above and to
receive the cash dividends it is entitled to receive pursuant to paragraph (iii)
below.

(iii)        Each Grantor shall be entitled to receive and retain any and all
cash dividends, interest, principal and other distributions paid on or
distributed in respect of the Pledged Securities to the extent and only to the
extent that such dividends, interest, principal and other distributions are
permitted by, and otherwise paid or distributed in accordance with, the

 

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terms and conditions of the Credit Agreement, the other Loan Documents and
applicable law. All noncash dividends, interest and principal, and all
dividends, interest and principal paid or payable in cash or otherwise in
connection with a partial or total liquidation or dissolution, return of
capital, capital surplus or paid-in surplus, and all other distributions (other
than distributions referred to in the preceding sentence), whether resulting
from a subdivision, combination or reclassification of the outstanding Equity
Interests of the issuer of any Pledged Securities or received in exchange for
Pledged Securities or any part thereof, or in redemption thereof, or as a result
of any merger, consolidation, acquisition or other exchange of assets to which
such issuer may be a party or otherwise, shall be and become part of the Pledged
Collateral, and, except in the case of a transaction permitted under the Credit
Agreement, if received by any Grantor, shall not be commingled by such Grantor
with any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the ratable benefit of the Collateral
Agent and shall be forthwith delivered to the Collateral Agent in the same form
as so received (with any necessary endorsement or instrument of assignment).
This paragraph (iii) shall not apply to dividends between or among the
Borrowers, the Guarantors and any Subsidiaries only of property subject to a
perfected security interest under this Agreement; provided that the applicable
Borrower notifies the Collateral Agent in writing, specifically referring to
this Section 3.06 at the time of such dividend and takes any actions the
Collateral Agent specifies to ensure the continuance of its perfected security
interest in such property under this Agreement.

(b) Upon the occurrence and during the continuance of an Event of Default, after
the Collateral Agent shall have notified (or shall be deemed to have notified
pursuant to Section 3.06(a)) the Grantors of the suspension of their rights
under paragraph (a)(iii) of this Section 3.06, then all rights of any Grantor to
dividends, interest, principal or other distributions that such Grantor is
authorized to receive pursuant to paragraph (a)(iii) of this Section 3.06 shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to receive
and retain such dividends, interest, principal or other distributions. All
dividends, interest, principal or other distributions received by any Grantor
contrary to the provisions of this Section 3.06 shall be held in trust for the
benefit of the Collateral Agent, shall be segregated from other property or
funds of such Grantor and shall be forthwith delivered to the Collateral Agent
upon demand in the same form as so received (with any necessary endorsement or
instrument of assignment). Any and all money and other property paid over to or
received by the Collateral Agent pursuant to the provisions of this
paragraph (b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 5.02. After
all Events of Default have been cured or waived and each applicable Grantor has
delivered to the Administrative Agent certificates to that effect, the
Collateral Agent shall, promptly after all such Events of Default have been
cured or waived, repay to each applicable Grantor (without interest) all
dividends, interest, principal or other distributions that such Grantor

 

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14

 

would otherwise be permitted to retain pursuant to the terms of paragraph
(a)(iii) of this Section 3.06 and that remain in such account.

(c) Upon the occurrence and during the continuance of an Event of Default, after
the Collateral Agent shall have notified (or shall be deemed to have notified
pursuant to Section 3.06(a)) the Grantors of the suspension of their rights
under paragraph (a)(i) of this Section 3.06, then all rights of any Grantor to
exercise the voting and consensual rights and powers it is entitled to exercise
pursuant to paragraph (a)(i) of this Section 3.06, and the obligations of the
Collateral Agent under paragraph (a)(ii) of this Section 3.06, shall cease, and
all such rights shall thereupon become vested in the Collateral Agent, which
shall have the sole and exclusive right and authority to exercise such voting
and consensual rights and powers; provided that, unless otherwise directed by
the Required Lenders, the Collateral Agent shall have the right from time to
time following and during the continuance of an Event of Default to permit the
Grantors to exercise such rights. After all Events of Default have been cured or
waived, the applicable Grantor shall have the right to exercise the voting and
consensual rights and powers that it would otherwise be entitled to exercise
pursuant to the terms of paragraph (a)(i) of this Section 3.06.

(d) Any notice given by the Collateral Agent to the Grantors exercising its
rights under paragraph (a) of this Section 3.06 (i) may be given by telephone if
promptly confirmed in writing, (ii) may be given to one or more of the Grantors
at the same or different times and (iii) may suspend the rights of the Grantors
under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such
rights (as specified by the Collateral Agent in its sole and absolute
discretion) and without waiving or otherwise affecting the Collateral Agent’s
rights to give additional notices from time to time suspending other rights so
long as an Event of Default has occurred and is continuing.

ARTICLE IV

 

Security Interests in Personal Property

SECTION 4.01. Security Interest. (a) As security for the payment or performance,
as the case may be, in full of the Obligations, each Grantor hereby assigns and
pledges to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured Parties, a
security interest (the “Security Interest”), in all right, title or interest in
or to any and all of the following assets and properties now owned or at any
time hereafter acquired by such Grantor or in which such Grantor now has or at
any time in the future may acquire any right, title or interest (collectively,
the “Article 9 Collateral”):

 

(i)

all Accounts;

 

 

(ii)

all Chattel Paper;

 

 

(iii)

all cash and Deposit Accounts;

 

 

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15

 

 

 

(iv)

all Documents;

 

 

(v)

all Equipment;

 

 

(vi)

all General Intangibles;

 

 

(vii)

all Instruments;

 

 

(viii)

all Inventory;

 

 

(ix)

all Investment Property;

 

 

(x)

all Letter-of-Credit Rights;

 

(xi)

all Commercial Tort Claims;

 

(xii)

all books and records pertaining to the Article 9 Collateral; and

(xiii)      to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and guarantees given by
any person with respect to any of the foregoing.

Notwithstanding anything contained in this Section 4.01 to the contrary, in no
event shall the Article 9 Collateral include, and no Grantor shall be deemed to
have granted a Security Interest in, any right under any contract or agreement
constituting a General Intangible, but only to the extent that the granting of a
security interest therein or an assignment thereof would violate any applicable
law or any enforceable provision of such contract or agreement; provided that,
to the extent such security interest at any time hereafter shall no longer be
prohibited by law, or immediately upon such provision no longer being
enforceable, as the case may be, the Article 9 Collateral shall automatically
and without any further action include, and the Grantors shall be deemed to have
granted automatically and without any further action a Security Interest in,
such right as if such law had never existed or such provision had never been
enforceable, as the case may be.

(b) Each Grantor hereby irrevocably authorizes the Collateral Agent at any time
and from time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) with respect to the Article 9 Collateral
or any part thereof and amendments thereto that (i) indicate the Article 9
Collateral as all assets of such Grantor or words of similar effect, and (ii)
contain the information required by Article 9 of the Uniform Commercial Code of
each applicable jurisdiction for the filing of any financing statement or
amendment, including (A) whether such Grantor is an organization, the type of
organization and any organizational identification number issued to such Grantor
and (B) in the case of a financing statement filed as a fixture filing, a
sufficient description of the real property to which such Article 9 Collateral
relates. Each Grantor agrees to provide such information to the Collateral Agent
promptly upon request.

 

 

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Each Grantor also ratifies its authorization for the Collateral Agent to file in
any relevant jurisdiction any initial financing statements or amendments thereto
if filed prior to the date hereof.

The Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) such documents as may be necessary
or advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor, without the signature
of any Grantor, and naming any Grantor or the Grantors as debtors and the
Collateral Agent as secured party; provided, however, that the Collateral Agent
shall not file any such documents with respect to any Intellectual Property
other than the Perfection Intellectual Property.

(c) The Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Grantor with respect to or arising out of the
Article 9 Collateral.

SECTION 4.02. Representations and Warranties. The Grantors jointly and severally
represent and warrant to the Collateral Agent and the Secured Parties that:

(a) Each Grantor has good and valid rights in and title to the Article 9
Collateral with respect to which it has purported to grant a Security Interest
hereunder (except for Liens expressly permitted pursuant to the Loan Documents)
and has full power and authority to grant to the Collateral Agent, for the
ratable benefit of the Secured Parties, the Security Interest in such Article 9
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other person other than (i) any consent or approval that has been
obtained and (ii) any consent or approval the failure of which could not impair
or adversely affect the Security Interests intended to be granted hereunder.

(b) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein (including (x) the exact legal name of
each Grantor and (y) the jurisdiction of organization of each Grantor) is
correct and complete as of the Closing Date. Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the Article 9
Collateral have been prepared by the Collateral Agent based upon the information
provided to the Administrative Agent and the Secured Parties in the Perfection
Certificate for filing in each governmental, municipal or other office specified
in Schedule 6 to the Perfection Certificate (or specified by notice from Terex
to the Administrative Agent after the Closing Date in the case of filings,
recordings or registrations required by Sections 5.11 of the Credit Agreement),
which are all the filings, recordings and registrations (other than filings
required to be made in the United States Patent and Trademark Office and the
United States Copyright Office in order to perfect the Security Interest in the
Perfection Intellectual

 

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Property) that are necessary to publish notice of and protect the validity of
and to establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the ratable benefit of the Secured Parties) in respect of
all Article 9 Collateral (other than Intellectual Property that is not
Perfection Intellectual Property) in which the Security Interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of Uniform Commercial Code
continuation statements. Each Grantor represents and warrants that a fully
executed agreement in the form hereof (or a fully executed short form agreement
in form and substance satisfactory to the Collateral Agent) and, subject to
Section 4.01(b), containing a description of all Perfection Intellectual
Property have been delivered to the Collateral Agent for recording by the United
States Patent and Trademark Office and the United States Copyright Office
pursuant to 35 U.S.C. §261, 15 U.S.C. §1060 or 17 U.S.C. §205 and the
regulations thereunder, as applicable, and otherwise as may be required pursuant
to the laws of any other necessary jurisdiction (including the filing of Uniform
Commercial Code financing statements), to protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the ratable benefit of the Secured Parties) in respect of
all Perfection Intellectual Property in which a security interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than as provided under applicable law with
respect to the filing of Uniform Commercial Code continuation statements).

(c) The Security Interest constitutes (i) a legal and valid security interest in
all Article 9 Collateral securing the payment and performance of the
Obligations, (ii) subject to the filings described in Section 4.02(b), a
perfected security interest in all Article 9 Collateral (other than Intellectual
Property that is not Perfection Intellectual Property) in which a security
interest may be perfected by filing, recording or registering a financing
statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral (other
than Intellectual Property that is not Perfection Intellectual Property) in
which a security interest may be perfected upon the receipt and recording of
this Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, within the three month period
(commencing as of the date hereof) pursuant to 35 U.S.C. § 261 or 15 U.S.C. §
1060 or the one month period (commencing as of the date hereof) pursuant to 17
U.S.C. § 205. The Security Interest is and shall be prior to any other Lien on
any of the Article 9 Collateral, other than Liens expressly permitted pursuant
to Section 6.02 of the Credit Agreement that have priority as a matter of law.

 

 

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(d) The Article 9 Collateral is owned by the Grantors free and clear of any
Lien, except for Liens expressly permitted pursuant to Section 6.02 of the
Credit Agreement. No Grantor has filed or consented to the filing of (i) any
financing statement or analogous document under the Uniform Commercial Code or
any other applicable laws covering any Article 9 Collateral (except for
financing statements or analogous documents filed for precautionary reasons
relating to operating leases, consignments and other similar items, in each case
(x) in the ordinary course of business, and (y) as permitted under the Credit
Agreement), (ii) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Article 9 Collateral
with the United States Patent and Trademark Office or the United States
Copyright Office, (iii) any notice under the Assignment of Claims Act, or
(iv) any assignment in which any Grantor assigns any Article 9 Collateral or any
security agreement or similar instrument covering any Article 9 Collateral with
any foreign governmental, municipal or other office, which financing statement
or analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement. No Grantor holds any Commercial Tort
Claims except as indicated on the Perfection Certificate.

SECTION 4.03. Covenants. (a) Each Grantor agrees promptly to notify the
Collateral Agent in writing of any change in (i) its legal name, (ii) its
identity or type of organization or corporate structure, (iii) its Federal
Taxpayer Identification Number or organizational identification number or
(iv) its jurisdiction of organization. Each Grantor agrees promptly to provide
the Collateral Agent with certified organizational documents reflecting any of
the changes described in the first sentence of this paragraph. Each Grantor
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or otherwise
that are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected first priority
security interest in all the Article 9 Collateral (other than Intellectual
Property that is not Perfection Intellectual Property) in which a security
interest may be perfected by filing, recording or registering (A) a financing
statement or analogous document in the United States (or any political
subdivision thereof) and its territories and possessions pursuant to the Uniform
Commercial Code or other applicable law in such jurisdictions or (B) a security
interest in the Perfection Intellectual Property in the United States Patent and
Trademark Office or the United States Copyright Office, in each case, other than
with respect to Liens expressly permitted by Section 6.02 of the Credit
Agreement that have priority as a matter of law. Each Grantor agrees promptly to
notify the Collateral Agent if any material portion of the Article 9 Collateral
owned or held by such Grantor is damaged or destroyed.

(b) Each Grantor agrees to maintain, at its own cost and expense, such complete
and accurate records with respect to the Article 9 Collateral owned by it as is
consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged, but in any event to include complete
accounting records indicating all

 

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19

 

payments and proceeds received with respect to any part of the Article 9
Collateral, and, at such time or times as the Collateral Agent may reasonably
request, promptly to prepare and deliver to the Collateral Agent a duly
certified schedule or schedules in form and detail satisfactory to the
Collateral Agent showing the identity, amount and location of any and all
Article 9 Collateral.

(c) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to Section 5.04(a) of the Credit
Agreement, Terex shall deliver to the Collateral Agent a certificate executed by
its chief legal officer or a Responsible Officer of Terex certifying that all
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings recordings or registrations, including
all refilings, recordings and registrations, containing a description of the
Article 9 Collateral (other than in respect of Intellectual Property that is not
Perfection Intellectual Property) have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (a) of this Section 4.03 to the extent necessary
to protect and perfect the Security Interest for a period of not less than
18 months after the date of such certificate (except as noted therein with
respect to any continuation statements to be filed within such period).

(d) Each Grantor shall, at its own expense, take any and all commercially
reasonable actions necessary to defend title to the Article 9 Collateral against
all persons and to defend the Security Interest of the Collateral Agent in the
Article 9 Collateral and the priority thereof against any Lien not expressly
permitted pursuant to Section 6.02 of the Credit Agreement.

(e) Each Grantor agrees, at its own expense, promptly to execute, acknowledge,
deliver and cause to be duly filed all such further instruments and documents
and take all such actions as the Collateral Agent may from time to time
reasonably request to better assure, obtain, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the
payment of any fees and Taxes required in connection with the execution and
delivery of this Agreement, the granting of the Security Interest and the filing
of any financing or continuation statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable to any
Grantor under or in connection with any of the Article 9 Collateral shall be or
become evidenced by any promissory note or other instrument, such note or
instrument shall be promptly pledged and delivered to the Collateral Agent, duly
endorsed in a manner satisfactory to the Collateral Agent.

(f) The Collateral Agent and such persons as the Collateral Agent may reasonably
designate shall have the right, at the applicable Grantor’s own cost and
expense, to inspect, during normal business hours and on reasonable notice, the
Article 9 Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Article 9
Collateral is located (no more than two such inspections being permitted
annually under this Section 4.03(f) unless an Event of Default shall have
occurred and be continuing), to discuss the applicable Grantor’s affairs with
the officers of such Grantor and its independent accountants and to verify under
reasonable procedures the existence, validity, amount, quality, quantity, value,
condition

 

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and status of, or any other matter relating to, the Article 9 Collateral,
including, in the case of Accounts or other Article 9 Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Article 9 Collateral for the purpose of making such a
verification. The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured Party
(it being understood that any such information shall be deemed to be
“Information” subject to the provisions of Section 9.17 of the Credit
Agreement).

(g) At its option at any time after ten Business Days’ notice to the applicable
Grantor (or, to the extent the Collateral Agent deems it necessary to act prior
the end of such ten day notice period in order to preserve the Article 9
Collateral, the applicable Grantor’s rights to and use of the Article 9
Collateral or the Security Interest granted herein, any shorter notice period),
the Collateral Agent may discharge past due Taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Article 9 Collateral and not expressly permitted pursuant to Section 5.03 or
Section 6.02 of the Credit Agreement, and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Grantor fails to do
so as required by the Credit Agreement or this Agreement, and each Grantor
jointly and severally agrees to reimburse the Collateral Agent on demand for any
payment made or any expense incurred by the Collateral Agent pursuant to the
foregoing authorization; provided, however, that nothing in this paragraph shall
be interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to Taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.

(h) Each Grantor shall remain liable to observe and perform all the conditions
and obligations to be observed and performed by it under each contract,
agreement or instrument relating to the Article 9 Collateral, all in accordance
with the terms and conditions thereof, and each Grantor jointly and severally
agrees to indemnify and hold harmless the Collateral Agent and the Secured
Parties from and against any and all liability for such performance.

(i) No Grantor shall make or permit to be made an assignment, pledge or
hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral or permit any notice to be filed under the
Assignment of Claims Act, except, in each case, as expressly permitted by
Section 6.02 of the Credit Agreement. No Grantor shall make or permit to be made
any transfer of the Article 9 Collateral and each Grantor shall remain at all
times in possession or otherwise in control of the Article 9 Collateral owned by
it, except that (i) Inventory and Accounts Receivable may be sold in the
ordinary course of business, (ii) Accounts Receivable may be sold in connection
with the Receivables Program and (iii) unless and until the Collateral Agent
shall notify the Grantors that an Event of Default shall have occurred and be
continuing and that during the continuance thereof the Grantors shall not sell,
convey, lease, assign, transfer or otherwise dispose of any Collateral (which
notice may be given by telephone if promptly confirmed in writing), the Grantors
may use and dispose of the Collateral in any lawful manner not inconsistent with
the provisions of this Agreement, the Credit Agreement or

 

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any other Loan Document; provided that, notwithstanding anything contained in
this Section 4.03(i) to the contrary, each Grantor shall be permitted to deliver
Article 9 Collateral to, and store Article 9 Collateral with, a bailee or
warehouseman without obtaining an executed lien waiver in favor of the
Collateral Agent.

(j) No Grantor will, without the Collateral Agent’s prior written consent, which
consent shall not be unreasonably withheld, grant any extension of the time of
payment of any Accounts included in the Article 9 Collateral, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises, compoundings or settlements granted or made in the ordinary course
of business and consistent with its current and past practices and in accordance
with such commercially prudent and standard practice used in industries that are
the same as or similar to those in which such Grantor is engaged.

(k) Each Grantor, at its own expense, shall maintain or cause to be maintained
insurance covering physical loss or damage to the Inventory and Equipment in
accordance with the requirements set forth in Section 5.02 of the Credit
Agreement. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact)
for the purpose, upon the occurrence and during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Article 9
Collateral under policies of insurance, endorsing the name of such Grantor on
any check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect thereto. In the event that any Grantor at any time or times shall fail
to obtain or maintain any of the policies of insurance required hereby or under
the Credit Agreement or to pay any premium in whole or part relating thereto,
the Collateral Agent may, without waiving or releasing any obligation or
liability of any Grantor hereunder or any Default or Event of Default, in its
sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent
deems advisable. All sums disbursed by the Collateral Agent in connection with
this paragraph, including reasonable attorneys’ fees, court costs, expenses and
other charges relating thereto, shall be payable, upon demand, by the Grantors
to the Collateral Agent and shall be additional Obligations secured hereby.

(l) Each Grantor shall maintain, in form and manner reasonably satisfactory to
the Collateral Agent, records of its Chattel Paper and its books, records and
documents evidencing or pertaining thereto.

SECTION 4.04. Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Security Interest in the Article 9 Collateral, each Grantor agrees, in each
case at such Grantor’s own expense, to take the following actions with respect
to the following Article 9 Collateral:

 

 

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(a) Instruments. If any Grantor shall at any time hold or acquire any
Instruments (other than securities evidencing Indebtedness that are not Material
Debt Securities), such Grantor shall forthwith endorse, assign and deliver the
same to the Collateral Agent, accompanied by such undated instruments of
endorsement, transfer or assignment duly executed in blank as the Collateral
Agent may from time to time specify.

(b) Deposit Accounts. Terex shall maintain its existing lockbox arrangements for
the benefit of the Secured Parties with Bank of America, N.A. (the “Depositary
Bank”), pursuant to the Lockbox Deposit Account Control Agreement (or a
successor agreement substantially similar thereto) dated as of February 28,
2002, among Terex, Credit Suisse (formerly known as Credit Suisse First Boston),
and the Depositary Bank, or, at the request of the Collateral Agent, shall enter
into a substantially similar arrangement with Credit Suisse.

(c) Electronic Chattel Paper and Transferable Records. If any Grantor at any
time holds or acquires an interest in any Electronic Chattel Paper or any
“transferable record”, as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, such Grantor shall promptly notify the Collateral Agent thereof
and, at the request of the Collateral Agent, shall take such action as the
Collateral Agent may request to vest in the Collateral Agent control under
New York UCC Section 9-105 of such Electronic Chattel Paper or control under
Section 201 of the Federal Electronic Signatures in Global and National Commerce
Act or, as the case may be, Section 16 of the Uniform Electronic Transactions
Act, as so in effect in such jurisdiction, of such transferable record. The
Collateral Agent agrees with such Grantor that the Collateral Agent will
arrange, pursuant to procedures satisfactory to the Collateral Agent and so long
as such procedures will not result in the Collateral Agent’s loss of control,
for the Grantor to make alterations to the Electronic Chattel Paper or
transferable record permitted under UCC Section 9-105 or, as the case may be,
Section 201 of the Federal Electronic Signatures in Global and National Commerce
Act or Section 16 of the Uniform Electronic Transactions Act for a party in
control to allow without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by such Grantor with respect to such Electronic Chattel Paper or transferable
record.

(d) Letter-of-Credit Rights. If any Grantor is at any time a beneficiary under a
letter of credit (other than a letter of credit issued in the ordinary course of
business), with a face amount in excess of $10,000,000, now or hereafter issued
in favor of such Grantor, such Grantor shall promptly notify the Collateral
Agent thereof and, at the request and option of the Collateral Agent, such
Grantor shall, pursuant to an agreement in form and substance satisfactory to
the Collateral Agent, either (i) arrange for the issuer and any confirmer of
such letter of credit to consent to an assignment to the Collateral Agent of the
proceeds of any drawing under the letter of credit or (ii) arrange for the
Collateral Agent to become the

 

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transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be paid to the applicable Grantor unless an Event of Default has
occurred and is continuing.

(e) Commercial Tort Claims. If any Grantor shall at any time hold or acquire a
Commercial Tort Claim in an amount reasonably estimated to exceed $10,000,000,
the Grantor shall promptly notify the Collateral Agent thereof in a writing
signed by such Grantor including a summary description of such claim and grant
to the Collateral Agent, for the ratable benefit of the Secured Parties, in such
writing a security interest therein and in the proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
satisfactory to the Collateral Agent.

SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral.

(a) Each Grantor agrees that it will not, and will not permit any of its
licensees to, do any act, or omit to do any act, whereby any Patent that is
material to the conduct of such Grantor’s business may become invalidated or
dedicated to the public, and agrees that it shall continue to mark any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.

(b) Each Grantor (either itself or through its licensees or its sublicensees)
will, for each Trademark material to the conduct of such Grantor’s business,
(i) maintain such Trademark in full force free from any claim of abandonment or
invalidity for non-use, (ii) maintain the quality of products and services
offered under such Trademark, (iii) display such Trademark with notice of
Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.

(c) Each Grantor (either itself or through its licensees or sublicensees) will,
for each work covered by a material Copyright, continue to publish, reproduce,
display, adopt and distribute the work with appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws.

(d) Each Grantor shall notify the Collateral Agent promptly if it knows or has
reason to know that any Patent, Trademark or Copyright material to the conduct
of its business may become abandoned, lost or dedicated to the public, or of any
adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office
of any country) regarding such Grantor’s ownership of any Patent, Trademark or
Copyright, its right to register the same, or its right to keep and maintain the
same.

 

 

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(e) Each Grantor will take all commercially reasonable steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor’s business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancelation proceedings against third parties.

(f) In the event that any Grantor knows or has reason to believe that any
Article 9 Collateral consisting of a Patent, Trademark or Copyright material to
the conduct of any Grantor’s business has been or is about to be infringed,
misappropriated or diluted by a third person, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly sue for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Article 9 Collateral.

(g) Upon the occurrence and during the continuance of an Event of Default, each
Grantor shall use all commercially reasonable efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License, Patent License
or Trademark License to effect the assignment of all such Grantor’s right, title
and interest thereunder to the Collateral Agent, for the ratable benefit of the
Secured Parties, or its designee.

ARTICLE V

 

Remedies

SECTION 5.01. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Article 9 Collateral by the applicable Grantor to the Collateral Agent, or to
license or sublicense, whether general, special or otherwise, and whether on an
exclusive or nonexclusive basis, any such Article 9 Collateral throughout the
world on such terms and conditions and in such manner as the Collateral Agent
shall determine (other than in violation of any then-existing licensing
arrangements to the extent that waivers cannot be obtained), and (b) with or
without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to enter any premises where the Article 9 Collateral may
be

 

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located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default and subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker’s board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and appraisal
which such Grantor now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.

The Collateral Agent shall give each applicable Grantor ten Business Days’
written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent’s intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker’s board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Agreement, any Secured Party may bid for or purchase, free (to
the extent permitted by applicable law) from any right of redemption, stay,
valuation or appraisal on the part of any Grantor (all said rights being also
hereby waived and released

 

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to the extent permitted by applicable law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to such Secured Party from any Grantor as a credit against the
purchase price, and such Secured Party may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
to any Grantor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Obligations paid in full. As an alternative to exercising
the power of sale herein conferred upon it, the Collateral Agent may proceed by
a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this
Section 5.01 shall be deemed to conform to the commercially reasonable standards
as provided in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.

SECTION 5.02. Application of Proceeds. The Collateral Agent shall apply the
proceeds of any collection, sale, foreclosure or other realization upon any
Collateral, including any Collateral consisting of cash, as follows:

FIRST, to the payment of all reasonable costs and expenses incurred by the
Administrative Agent or the Collateral Agent (in their respective capacities as
such hereunder or under any other Loan Document) in connection with such
collection, sale, foreclosure or realization or otherwise in connection with
this Agreement, any other Loan Document or any of the Obligations, including all
court costs and the reasonable fees and expenses of its agents and legal
counsel, the repayment of all advances made by the Administrative Agent and/or
the Collateral Agent hereunder or under any other Loan Document on behalf of any
Grantor and any other reasonable out of pocket costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under any other
Loan Document;

SECOND, to the payment in full of Unfunded Advances/Participations (the amounts
so applied to be distributed between or among the Administrative Agent,
Swingline Lender and any Issuing Bank pro rata in accordance with the amounts of
Unfunded Advances/Participations owed to them on the date of any such
distribution);

THIRD, to the payment in full of all other Obligations (the amounts so applied
to be distributed among the Secured Parties pro rata in accordance with the
amounts of the Obligations owed to them on the date of any such distribution);
and

 

 

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FOURTH, to the Grantors, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.

The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.

SECTION 5.03. Grant of License to Use Intellectual Property. For the purpose of
enabling the Collateral Agent to exercise rights and remedies under this
Agreement at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, to the extent permitted to do so (and each
Grantor shall make all commercially reasonable efforts to obtain the consent to
license all Intellectual Property referred to below to the Collateral Agent
pursuant to this Section 5.03), each Grantor hereby grants to the Collateral
Agent an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to the Grantors), to use, license or sublicense
any of the Article 9 Collateral consisting of Intellectual Property now owned or
hereafter acquired by such Grantor, and wherever the same may be located, and
including in such license access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
may be exercised, at the option of the Collateral Agent, only upon the
occurrence and during the continuation of an Event of Default; provided,
however, that any license, sublicense or other transaction entered into by the
Collateral Agent in accordance herewith shall be binding upon each Grantor
notwithstanding any subsequent cure of an Event of Default.

SECTION 5.04. Securities Act, Etc. In view of the position of the Grantors in
relation to the Pledged Collateral, or because of other current or future
circumstances, a question may arise under the U.S. Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the “Federal Securities Laws”) with respect to any
disposition of the Pledged Collateral permitted hereunder. Each Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Collateral, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Collateral could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Collateral under applicable
“blue sky” or other state securities laws or similar laws analogous in purpose
or effect. Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Collateral for their own account, for

 

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investment, and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that in light of such restrictions and
limitations, the Collateral Agent, in its sole and absolute discretion (a) may
proceed to make such a sale whether or not a registration statement for the
purpose of registering such Pledged Collateral or part thereof shall have been
filed under the Federal Securities Laws and (b) may approach and negotiate with
a limited number of potential purchasers (including a single potential
purchaser) to effect such sale. Each Grantor acknowledges and agrees that any
such sale might result in prices and other terms less favorable to the seller
than if such sale were a public sale without such restrictions. In the event of
any such sale, the Collateral Agent shall incur no responsibility or liability
for selling all or any part of the Pledged Collateral at a price that the
Collateral Agent, in its sole and absolute discretion, may in good faith deem
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a limited number of
purchasers (or a single purchaser) were approached. The provisions of this
Section 5.04 will apply notwithstanding the existence of a public or private
market upon which the quotations or sales prices may exceed substantially the
price at which the Collateral Agent sells.

ARTICLE VI

 

Indemnity, Subrogation and Subordination

SECTION 6.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 6.03), each Borrower agrees that (a) in the event a payment
shall be made by any Guarantor under this Agreement on behalf of such Borrower,
such Borrower shall indemnify such Guarantor for the full amount of such payment
and such Guarantor shall be subrogated to the rights of the person to whom such
payment shall have been made to the extent of such payment and (b) in the event
any assets of any Guarantor shall be sold pursuant to this Agreement or any
other Security Document to satisfy in whole or in part a claim of any Secured
Party on behalf of such Borrower, such Borrower shall indemnify such Guarantor
in an amount equal to the greater of the book value or the fair market value of
the assets so sold.

SECTION 6.02. Contribution and Subrogation. Each Guarantor (a “Contributing
Guarantor”) agrees (subject to Section 6.03) that, in the event a payment shall
be made by any other Guarantor hereunder in respect of any Obligation, or assets
of any other Guarantor shall be sold pursuant to any Security Document to
satisfy any Obligation owed to any Secured Party, and such other Guarantor (the
“Claiming Guarantor”) shall not have been fully indemnified by the applicable
Borrower as provided in Section 6.01, the Contributing Guarantor shall indemnify
the Claiming Guarantor in an amount equal to (i) the amount of such payment or
(ii) the greater of the book value or the fair market value of such assets, as
the case may be, in each case multiplied by a fraction of which the numerator
shall be the net worth of the Contributing Guarantor on the date hereof and the
denominator shall be the aggregate net worth of all the Guarantors on the date
hereof (or, in the case of any Guarantor becoming a party

 

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hereto pursuant to Section 7.16, the date of the supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 6.02 shall be subrogated to the
rights of such Claiming Guarantor under Section 6.01 to the extent of such
payment.

SECTION 6.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantors under Sections 6.01 and 6.02 and
all other rights of indemnity, contribution or subrogation under applicable law
or otherwise shall be subordinated and junior to the indefeasible payment in
full in cash of the Obligations. No failure on the part of any Borrower or any
Guarantor to make the payments required by Sections 6.01 and 6.02 (or any other
payments required under applicable law or otherwise) shall in any respect limit
the obligations and liabilities of any Guarantor with respect to its obligations
hereunder, and each Guarantor shall remain liable for the full amount of its
obligations hereunder.

(b) Each Borrower and each Guarantor hereby agree that all Indebtedness and
other monetary obligations owned by it to any Borrower, any other Guarantor or
any Subsidiary shall be subordinated and junior to the indefeasible payment in
full in cash of the Obligations.

ARTICLE VII

 

Miscellaneous

SECTION 7.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Guarantor shall be given to it in care of Terex as provided in
Section 9.01 of the Credit Agreement.

SECTION 7.02. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor hereunder shall be
absolute and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Agreement, any
other Loan Document or any other agreement or instrument relating to the
foregoing, (c) except as otherwise expressly permitted under the Loan Documents
or effected pursuant thereto, any exchange, release or non-perfection of any
Lien on other collateral, or any release or amendment or waiver of or consent
under or departure from any guarantee, securing or guaranteeing all or any of
the Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor in respect of the
Obligations or this Agreement.

 

 

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SECTION 7.03. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
Lender or Issuing Bank or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under any Loan Document is outstanding and
unpaid or the aggregate L/C Exposure (other than with respect to Letters of
Credit that have been fully cash collateralized on terms satisfactory to the
Collateral Agent and the applicable Issuing Bank) does not equal zero and so
long as the Commitments have not expired or terminated.

SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall become
effective as to any Loan Party when a counterpart hereof executed on behalf of
such Loan Party shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Loan Party and the Collateral Agent
and their respective permitted successors and assigns, and shall inure to the
benefit of such Loan Party, the Collateral Agent and the other Secured Parties
and their respective successors and assigns, except that no Loan Party shall
have the right to assign or transfer its rights or obligations hereunder or any
interest herein or in the Collateral (and any such assignment or transfer shall
be void) except as expressly contemplated or permitted by this Agreement or the
Credit Agreement. This Agreement shall be construed as a separate agreement with
respect to each Loan Party and may be amended, modified, supplemented, waived or
released with respect to any Loan Party without the approval of any other Loan
Party and without affecting the obligations of any other Loan Party hereunder.

SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

SECTION 7.06. Collateral Agent’s Fees and Expenses; Indemnification. (a) The
parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.05 of
the Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan
Documents, each Grantor jointly and severally agrees to indemnify the Collateral
Agent and the other Indemnitees against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities, and related out of pocket
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of, the execution,
delivery or performance of this Agreement or any

 

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agreement or instrument contemplated hereby or any claim, litigation,
investigation or proceeding relating to any of the foregoing or to the
Collateral, regardless of whether any Indemnitee is a party thereto or whether
initiated by a third party or by a Loan Party or any Affiliate thereof;
provided, however, that such indemnity shall not, as to any Indemnitee, be
available for such losses, claims, damages, liabilities or related expenses (x)
to the extent determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee, (y) arising from such Indemnitee’s material
breach of this Agreement or any other Loan Document or (z) arising out of any
claim, litigation, investigation or proceeding that does not involve an act or
omission of any Borrower or any of its Affiliates and that is brought by an
Indemnitee against any other Indemnitee (other than the Administrative Agent,
the Collateral Agent or any bookrunner or lead arranger for the Credit
Facilities, in each case, in its capacity as such). To the extent permitted by
applicable law, no Grantor shall assert, and each Grantor hereby waives any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of proceeds thereof.

(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 7.06 shall be payable within ten Business Days of written demand
therefor and shall bear interest, on and from the date of demand, at the rate
specified in Section 2.06(a) of the Credit Agreement.

SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby
appoints the Collateral Agent as the attorney-in-fact of such Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent’s name or in the name of such Grantor (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof, (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral, (c) to sign the
name of any Grantor on any invoice or bill of lading relating to any of the
Collateral, (d) to send verifications of Accounts Receivable to any Account
Debtor, (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral, (f) to settle, compromise, compound, adjust or defend
any

 

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actions, suits or proceedings relating to all or any of the Collateral, (g) to
notify, or to require any Grantor to notify, Account Debtors to make payment
directly to the Collateral Agent, and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement in accordance with its terms, as fully and completely
as though the Collateral Agent were the absolute owner of the Collateral for all
purposes; provided, however, that nothing herein contained shall be construed as
requiring or obligating the Collateral Agent to make any commitment or to make
any inquiry as to the nature or sufficiency of any payment received by the
Collateral Agent, or to present or file any claim or notice, or to take any
action with respect to the Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby. The Collateral
Agent and the other Secured Parties shall be accountable only for amounts
actually received as a result of the exercise of the powers granted to them
herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence, wilful misconduct or bad faith.

SECTION 7.08. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.09. Waivers; Amendment. (a) No failure or delay by the Collateral
Agent, the Administrative Agent, any Issuing Bank or any Lender in exercising
any right or power hereunder or under any other Loan Document shall operate as a
waiver hereof or thereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the exercise
of any other right or power. The rights and remedies of the Collateral Agent,
the Administrative Agent, the Issuing Banks and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section 7.09, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice or demand on
any Loan Party in any case shall entitle any Loan Party to any other or further
notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Collateral Agent and the Loan Party or Loan Parties with respect to which
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.08 of the Credit Agreement.

SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN

 

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CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.

SECTION 7.11. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

SECTION 7.12. Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 7.04.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.

SECTION 7.13. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

SECTION 7.14. Jurisdiction; Consent to Service of Process. (a) Each of the
Grantors hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America, sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the Loan Parties hereby irrevocably and
unconditionally agrees that, to the extent permitted by law, all claims in
respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the Loan Parties agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Loan Document shall affect any right that the Collateral
Agent, the Administrative

 

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Agent, Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Grantor or its properties in the courts of any jurisdiction.

(b) Each of the Loan Parties hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (a) of this Section 7.14. Each of
the Loan Parties hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

(c) Each of the Loan Parties hereby irrevocably consents to service of process
in the manner provided for notices in Section 7.01. Nothing in this Agreement or
any other Loan Document will affect the right of the Collateral Agent to serve
process in any other manner permitted by law.

SECTION 7.15. Termination or Release. (a) This Agreement, the Guarantees, the
Security Interest, the pledge of the Pledged Collateral and all other security
interests granted hereby shall terminate (i) when all the Loan Document
Obligations have been indefeasibly paid in full and the Lenders have no further
commitment to lend under the Credit Agreement, the aggregate L/C Exposure (other
than with respect to Letters of Credit that have been fully cash collateralized
on terms satisfactory to the Collateral Agent and the applicable Issuing Bank)
has been reduced to zero and the Issuing Banks have no further obligations to
issue Letters of Credit under the Credit Agreement or (ii) in accordance with
Section 9.20 of the Credit Agreement.

(b) A Subsidiary Guarantor shall automatically be released from its obligations
hereunder and the Security Interests created hereunder in the Collateral of such
Subsidiary Guarantor shall be automatically released upon the consummation of
any transaction permitted by the Credit Agreement as a result of which such
Subsidiary Guarantor ceases to be a Subsidiary. Upon request of such Subsidiary
Guarantor, the Collateral Agent shall confirm such release in writing.

(c) Upon any sale or other transfer by any Grantor of any Collateral that is
permitted under the Credit Agreement to any person that is not Terex or a
Subsidiary Guarantor, or, upon the effectiveness of any written consent to the
release of the Security Interest granted hereby in any Collateral pursuant to
Section 9.08 of the Credit Agreement, the Security Interest in such Collateral
shall be automatically released. Upon request of such Grantor, the Collateral
Agent shall confirm such release in writing.

(d) In connection with any termination or release pursuant to paragraph (a), (b)
or (c) above or pursuant to Section 9.20 of the Credit Agreement, the Collateral
Agent shall promptly execute and deliver to any Grantor, at such Grantor’s
expense, all Uniform Commercial Code termination statements and similar
documents that such Grantor shall reasonably request to evidence such
termination or release. Any execution and delivery of documents pursuant to this
Section 7.15 shall be without

 

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recourse to or representation or warranty by the Collateral Agent or any Secured
Party. Without limiting the provisions of Section 7.06, the Borrowers shall
reimburse the Collateral Agent upon demand for all reasonable costs and out of
pocket expenses, including the fees, charges and expenses of counsel, incurred
by it in connection with any action contemplated by this Section 7.15.

SECTION 7.16. Additional Subsidiaries. Pursuant to Section 5.11 of the Credit
Agreement, each Material Domestic Restricted Subsidiary that was not (i) in
existence on the Closing Date or (ii) a Material Domestic Restricted Subsidiary
on the Closing Date is required to enter into this Agreement as a Guarantor and
a Grantor upon becoming a Material Domestic Restricted Subsidiary. Upon
execution and delivery by the Collateral Agent and such Subsidiary of a
supplement in the form of Exhibit A hereto, such Subsidiary shall become a
Subsidiary Guarantor and a Grantor hereunder with the same force and effect as
if originally named as a Subsidiary Guarantor and a Grantor herein. The
execution and delivery of any such instrument shall not require the consent of
any other Loan Party hereunder. The rights and obligations of each Loan Party
hereunder shall remain in full force and effect notwithstanding the addition of
any new Loan Party as a party to this Agreement.

SECTION 7.17. Right of Setoff. If an Event of Default shall have occurred and is
continuing, each Secured Party is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
Collateral (including any deposits (general or special, time or demand,
provisional or final)) at any time held and other obligations at any time owing
by such Secured Party to or for the credit or the account of any Grantor against
any and all of the obligations of such Grantor now or hereafter existing under
this Agreement and the other Loan Documents held by such Secured Party,
irrespective of whether or not such Secured Party shall have made any demand
under this Agreement or any other Loan Document and although such obligations
may be unmatured. The rights of each Secured Party under this Section 7.17 are
in addition to other rights and remedies (including other rights of setoff)
which such Secured Party may have.

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

TEREX CORPORATION,

by

 

 

 

Name:

 

Title:

 

 

EACH SUBSIDIARY OF TEREX CORPORATION LISTED ON SCHEDULE I HERETO,

by

 

 

 

Name:

 

Title:

 

 

CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Collateral Agent

by

 

 

 

Name:

 

Title:

 

by

 

 

 

Name:

 

Title:

 

 

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