PLEDGE AND ASSIGNMENT AGREEMENT
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PLEDGE AND ASSIGNMENT AGREEMENT dated as of the 2nd day of March, 2000
between XXXXXX X. XXXXX ("Pledgor") and TEREX CORORATION, a Delaware corporation
("Pledgee").
W I T N E S S E T H :
WHEREAS, Pledgee has made a loan (the "Loan") in the amount of $3,000,000
to Pledgor and Pledgor has executed and delivered to Pledgee that certain
Promissory Note (the "Promissory Note") dated as of the date hereof evidencing
the Loan; and
WHEREAS, as a condition to making the Loan Pledgee has required that
Pledgee as collateral security for the Loan (i) pledge shares of common stock,
par value $.01 (the "Shares"), of Terex Corporation and (ii) assign all of
Pledgor's right, title and interest in and to distributions from the Terex
Corporation 1999 Long Term Incentive (the "LTIP").
NOW, THEREFORE, the parties agree as follows:
(1) As collateral security for the due and punctual payment and performance
of all indebtedness, liabilities and obligations of Pledgor to Pledgee under the
Promissory Note and all of Pledgor's obligations under this Agreement and (all
of the foregoing indebtedness, liabilities and obligations are hereinafter
called the "Obligations"), Pledgor hereby pledges, assigns, transfers,
hypothecates, delivers and sets over to Pledgee and hereby grants to Pledgee a
first priority security interest in, and lien upon:
(a) 100,000 Shares (the "Pledged Stock") owned by Pledgor and in any
and all proceeds thereof and substitutions therefor, including, without
limitation, any dividends, distributions and proceeds received, receivable
or otherwise distributed or distributable in respect of or in exchange for
the Pledged Stock, and concurrently herewith delivers to Pledgee the
certificate(s) representing the Pledged Stock, together with stock powers
executed in blank, to be held by Pledgee as security; and
(b) Pledgor's right to receive any and all distributions payable to
Pledgor with respect to the LTIP (the "LTIP Collateral").
The Pledged Stock and the LTIP Collateral collectively referred to herein
as the Pledged Collateral.
(2) If Pledgor shall become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a stock
dividend or distribution in connection with any reclassification, increase or
reduction of capital), option or rights, whether as an addition to, in
substitution of, or in exchange for any shares of the Pledged Stock, Pledgor
shall accept any such instruments as Pledgee's agent, shall hold them in trust
for Pledgee, and shall deliver them forthwith to Pledgee in the exact form
received, with Pledgor's endorsement when necessary and/or appropriate stock
powers duly executed in blank, to be held by Pledgee, subject to the terms
hereof, as further collateral security for the Obligations.
(3) At any time after the occurrence, and during the continuance of, an
Event of Default (as hereinafter defined), any or all shares of the Pledged
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Stock held by Pledgee hereunder may be registered in the name of Pledgee or his
nominee. Unless and until an Event of Default shall have occurred, Pledgor shall
have the right to exercise all voting, consent and corporate rights at any
meeting of shareholders of Terex Corporation or otherwise included in the
Pledged Stock. Upon the occurrence and during the continuance of an Event of
Default, Pledgee shall have the right, without notice, in its sole discretion to
exercise all voting, consent and corporate rights at any meeting of shareholders
of Terex Corporation or otherwise included in the Pledged Stock and exercise any
and all rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any shares of the Pledged Stock as if he
were the absolute owner thereof, all without liability except to account for
property actually received by Pledgee. Pledgee shall have no duty to exercise
any of the aforesaid rights, privileges or options and shall not be responsible
for any failure to do so or delay in so doing. For the purposes of this
Agreement, "Event of Default" shall mean any event of default under the
Promissory Note or any other breach or default of any of the Obligations.
(4) In the event of the occurrence and during the continuance of any Event
of Default, Pledgee shall have the right to require that all dividends and other
distributions payable with respect to any part of the Pledged Stock be paid
directly to Pledgee and to be held by Pledgee as additional security hereunder
until applied to the Obligations, and, at any other time, Pledgor shall have the
right to receive and retain, free and clear of the lien of this Agreement, any
and all dividends and other distributions paid or payable by Terex Corporation.
(5) In the event of the occurrence and during the continuance of any Event
of Default, Pledgee may avail himself of any and all of the rights, powers and
remedies of a secured party under the Uniform Commercial Code as adopted by the
State of Connecticut (as said law may be amended) and all of the rights and
remedies set forth in the Promissory Note and this Agreement, and in connection
therewith and/or in addition thereto, Pledgee without demand of performance or
other demand, advertisement or notice of any kind to or upon Pledgor or any
other person (all and each of which demands, advertisements and/or notices are,
to the extent permitted by law, hereby expressly waived), may forthwith collect,
receive, appropriate and realize upon the Pledged Stock, or any part thereof,
and/or may forthwith sell, assign, give an option or options to purchase,
contract to sell or otherwise dispose of and deliver said Pledged Stock, or any
part thereof, in one or more parcels at public or private sale or sales, at any
securities exchange, broker's board or elsewhere at such prices and on such
terms (including, without limitation, a requirement that any purchase of all or
any part of the Pledged Stock shall be required to purchase the shares
constituting the Pledged Stock for investment and without any intention to make
a distribution thereof) as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk, with the right to Pledgee, or
any purchase upon any such sale or sales, whether public or private, to purchase
the whole or any part of the Pledged Stock so sold, free of any right or equity
of redemption in Pledgor, which right or equity is hereby expressly waived and
released.
(6) The proceeds of any collection, recovery, receipt, appropriation,
realization or sale as aforesaid, shall be applied as follows:
(a) First, to the costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any and
all of the Pledged Collateral or in any way relating to the rights of
Pledgee hereunder, including reasonable attorneys' fees and legal expenses;
(b) Second, to the satisfaction of the Obligations;
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(c) Third, to the payment of any other amounts required by applicable
law (including, without limitation, Section 9-504(1)(c) of the Uniform
Commercial Code); and
(d) Fourth, to Pledgor to the extent of the surplus proceeds, if any.
(7) Pledgor represents, warrants and covenants that:
(a) Pledgor is the direct and beneficial owner of each share of the
Pledged Collateral as of the date hereof.
(b) All of the Pledged Collateral and all of Pledgor's right, title
and interest in the Terex Corporation Deferred Compensation Plan is, and at
all times for so long as the Promissory Note shall be outstanding shall
continue to be, owned by Pledgor free and clear of any pledge, claim,
mortgage, hypothecation, lien, charge, encumbrance or any security interest
in such shares or the proceeds thereof except in the case of the Pledged
Collateral for the security interest granted to Pledgee hereunder; and
(c) This Pledge Agreement creates and grants a valid first lien on and
perfected security interest in the shares of the Pledged Collateral and the
proceeds thereof, subject to no prior or existing security interest, lien,
charge or encumbrance or to any agreement purporting to grant to any third
party a security interest in the Pledged Collateral.
(d) Pledgor has the legal capacity, power and authority to execute and
deliver the Promissory Note, this Agreement and all other documents and
instruments to be delivered by Pledgor hereunder, and to consummate the
transactions contemplated hereby and to take all other actions required to
be taken by him pursuant to the provisions hereof, and the Promissory Note,
this Agreement and all other documents and other agreements to be delivered
by Pledgors hereunder are the legal, valid and binding obligations of
Pledgor, enforceable against him in accordance with their respective terms.
(e) No consent, approval, authorization or notification of, or
declaration, filing or registration with, any governmental entity or third
party is required on behalf of or on the part of Pledgor in connection with
the execution, delivery or performance of this Agreement, or the
consummation of the transactions contemplated hereby. Neither the execution
and delivery of this Agreement by Pledgor nor the consummation of the
transactions contemplated hereby or thereby will with or without the giving
of notice, lapse of time, or both, constitute any violation or breach of or
conflict with (i) any judgment, order, writ, injunction, decree, statute,
rule or regulation to which Pledgor or any of his property is subject or
(ii) any provisions of, or constitute a default under any agreement or
instrument or other obligation to which Pledgor is a party or by which his
assets are otherwise bound.
(f) Pledgor hereby covenants that so long as the Obligations shall be
outstanding and unpaid, in whole or in part, Pledgor will not sell, convey,
transfer or otherwise dispose of any of the Pledged Collateral or any
interest therein, nor will Pledgor create, incur or permit to exist any
pledge, mortgage, lien, charge, encumbrance or any security interest
whatsoever with respect to any of the Pledged Collateral or the proceeds
thereof other than that created hereby. Notwithstanding the foregoing,
Pledgor may sell shares of Pledged Stock provided that 100% of the proceeds
of any such sale are used (i) first, to prepay amounts outstanding under
the Promissory Note and (ii) to pay any of the other Obligations.
(g) Pledgor warrants and will defend Pledgee's right, title, property
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and security interest in and to the Pledged Stock against the claims of any
person, firm, corporation or other entity.
(8) Pledgor shall at any time and from time to time upon the written
request of Pledgee, execute and deliver such further documents, including,
without limitation, one or more financing statements in form reasonably
satisfactory to Pledgee, and do such further acts and things as Pledgee may
reasonably request in order to effect the purposes of this Pledge Agreement,
including, without limitation, UCC-1 Financing Statements. Pledgor irrevocably
appoints Pledgee as its attorney-in-fact (coupled with an interest) to prepare,
execute and file financing statements covering the Pledged Collateral, either
without the signature of Pledgor or, where Pledgor's signature is required, by
signing as attorney-in-fact for Pledgor. A carbon, photographic or other
reproduction of this Agreement or any financing statement shall be sufficient as
a financing statement.
(9) Beyond the exercise of reasonable care to assure the safe custody of
the Pledged Stock while held hereunder, Pledgee shall have no duty or liability
to preserve rights pertaining thereto, and shall be relieved of all
responsibility for the Pledged Stock upon surrendering it to Pledgor or in
accordance with Pledgor's instructions.
(10) No course of dealing between Pledgor and Pledgee nor any failure to
exercise, nor any delay in exercising, on the part of Pledgee, any right, power
or privilege hereunder or under the Promissory Note or otherwise shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
(11) The rights and remedies herein provided, and provided in the
Promissory Note and all agreements, instruments and documents delivered pursuant
to the Promissory Note or this Agreement, are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law including, without
limitation, the rights and remedies of a secured party under the Uniform
Commercial Code.
(12) The provisions of this Agreement are severable, and if any clause or
provisions shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction and shall not in any
manner affect such clause or provision in any other Agreement in any
jurisdiction.
(13) Any and all out-of-pocket fees, costs and expenses, of whatever kind
or nature, including the reasonable attorneys' fees and legal expenses, incurred
by Pledgee in connection with the enforcing, foreclosing, retaking, holding,
storing, processing, selling or otherwise realizing upon the Pledged Collateral
and Pledgee's security interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions or proceedings arising out
of or related to the transaction to which this Agreement relates, shall be borne
and paid by Pledgor on demand by Pledgee.
(14) This Agreement and all obligations of Pledgor hereunder shall be
binding upon the assigns, heirs, legal representatives of Pledgor, and shall,
together with the rights and remedies of Pledgee hereunder, inure to the benefit
of Pledgee and his assigns, heirs and legal representatives. Pledgor may not
assign any of its rights or obligations hereunder without the consent of
Pledgee.
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(15) This Agreement shall be construed in accordance with the internal laws
of the State of Connecticut without regard to principles of conflict of laws.
(16) This Agreement or any provision hereof may only be changed, modified,
amended, waived or supplemented by a writing signed by the party to be charged
therewith.
IN WITNESS WHEREOF, the parties have caused these presents to be duly
executed and delivered the day and year first above written.
PLEDGOR:
_________________________
Xxxxxx X. XxXxx
PLEDGEE:
TEREX CORPORATION
By:______________________
Name:
Title:
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