________________________________________________
SUBSIDIARY SECURITY AND PLEDGE AGREEMENT
among
THE CORPORATIONS LISTED ON THE SIGNATURE
PAGES HEREOF
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Collateral Agent
Dated as of May 9, 1995
________________________________________________
TABLE OF CONTENTS
Page
1. Definitions 1
2. Creation of Security Interest, etc. 11
3. Representations and Warranties 13
3.1 Validity, Perfection and Priority 13
3.2 No Liens; Other Financing Statements 14
3.3 Chief Executive Office 15
3.4 Location of Inventory and Equipment 15
3.5 Fair Labor Standards Act 15
3.6 Tradenames; Prior Names 15
3.7 Certificate of Title 15
3.8 Pledged Securities 16
3.9 Receivables 17
3.10 Intellectual Property 17
4. Covenant 19
4.1 Books and Records 19
4.2 Further Assurances 20
4.3 Change of Chief Executive Office 20
4.4 Change of Location of Inventory and Equipment 21
4.5 Change of Name; Identity or Corporate Structure 22
4.6 Subsequently Acquired Pledged Securities, etc. 22
4.7 Delivery of Instruments 23
4.8 Delivery of Chattel Paper 23
4.9 Right of Inspection 23
4.10 Insurance 24
4.11 Warehouse Receipts Non-negotiable 27
4.12 Motor Vehicles 27
4.13 Compliance with Laws 28
4.14 Payment of Obligations 28
4.15 No Impairment 28
4.16 Negative Pledge 28
4.17 Limitations on Dispositions of Collateral 29
4.18 Maintenance of Equipment 29
4.19 Provisions Regarding Receivables 29
4.20 Intellectual Property 31
4.21 Notice 32
4.22 Performance by Collateral Agent of Company's
Obligations; Reimbursement 32
5. Appointment of Sub-Agents 33
6. Voting, etc. 33
7. Payments and Other Distributions 34
8. Collateral Account 35
8.1 Collateral Account 35
8.2 Deposit of Proceeds 35
8.3 Investment of Balance in Collateral Account 36
9. Power of Attorney 36
9.1 Collateral Agent's Appointment as Attorney-in-Fact 36
10. Remedies 39
10.1 Rights and Remedies Generally 39
10.2 Proceeds 40
10.3 Direct Companies to Dispose of Collateral 41
10.4 Collateral Account 42
10.5 Possession of Collateral 42
10.6 Disposition of the Collateral 43
10.7 Voting of Pledged Securities etc. 44
10.8 Registration Rights; Private Sales 45
10.9 Provisions Regarding Receivables 47
10.10 Recourse 48
10.11 Expenses; Attorneys' Fees 48
10.12 Preventing Impairment of the Collateral 48
10.13 Limitation on Duties Regarding Preservation of
Collateral 49
10.14 Waiver of Claims 49
10.15 Discontinuance of Proceedings 51
10.16 Intellectual Property License 51
11. Additional Collateral; etc. 51
12. Compensation and Indemnification 52
12.1 Compensation 52
12.2 Indemnity, etc. 52
12.3 Indemnity Obligations Secured by Collateral;
Survival 54
13. Governing Law; Submission to Jurisdiction 54
14. Limitation of Liability 55
15. Notices 55
16. Successors and Assigns 56
17. Waivers and Amendments 56
18. No Waiver; Remedies Cumulative 56
19. Termination; Release 56
20. Counterparts 57
21. Headings Descriptive 57
22. Marshalling 57
23. Severability 57
24. Survival 58
25. Powers Coupled with an Interest 58
26. Authority of Collateral Agent 58
27. Waiver 58
28. Obligations Absolute 58
29. Limitation on Secured Party Rights 59
SUBSIDIARY SECURITY AND PLEDGE AGREEMENT
THIS SUBSIDIARY SECURITY AND PLEDGE AGREEMENT, dated as of May 9,
1995 is entered into among EACH OF THE CORPORATIONS LISTED ON THE SIGNATURE
PAGES HEREOF (each, together with its permitted successors and assigns, a
"Company", and collectively, the "Companies"), and UNITED STATES TRUST COMPANY
OF NEW YORK, a New York corporation, as collateral agent (together with its
successors and assigns, the "Collateral Agent").
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, covenant and agree as follows:
1. Definitions. Unless the context hereof clearly requires
otherwise:
(a) words and terms defined in the Indenture and not defined
herein shall have the same meanings herein as therein provided; and
(b) the following words and terms shall have the following
meanings:
"Account Debtor" shall mean the person who is obligated on a
Receivable.
"Accounts" shall mean "accounts" as such term is defined in Section
9-106 of the UCC.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Chattel Paper" shall mean "chattel paper" as such term is defined in
Section 9-105(b) of the UCC.
"Collateral" shall have the meaning assigned to it in Section 2
hereof.
"Collateral Account" shall mean the collective reference to one or
more accounts (which may be securities accounts) established and maintained
pursuant to Section 8 of this Security Agreement by the Collateral Agent,
entitled "Terex Corporation Subsidiary Collateral Account, United States Trust
Company of New York, as collateral agent, secured party" (with such other
designation the Collateral Agent may add thereto), and all funds, securities
and other property or other items from time to time credited to such accounts
and all interest, income and distributions thereon.
"Collateral Records" shall mean books, records, computer software,
computer printouts, customer lists, blueprints, technical specifications,
manuals, and similar items which relate to any Collateral other than such items
obtained under license or franchise agreements that prohibit assignment or
disclosure of such items.
"Congress Intercreditor Agreement" shall mean that certain
Intercreditor Agreement dated as of May 9, 1995, between Congress Financial
Corporation and Foothill Capital Corporation, individually and as Revolving
Loan Agent, and the Collateral Agent, as the same may be amended, modified,
supplemented or restated from time to time.
"Copyright Licenses" means, with respect to any Company, all of such
Company's right, title, and interest in and to any and all agreements providing
for the granting of any right in or to Copyrights (whether such Company is
licensee or licensor thereunder) including, without limitation, each agreement
referred to under such Company's name in Item B of Schedule VI.
"Copyrights" means, with respect to any Company, all of such
Company's right, title, and interest in and to all United States and foreign
copyrights and all semiconductor chip product mask works, whether registered or
unregistered, now or hereafter in force throughout the world, all registrations
and applications therefor including, without limitation, the copyright and mask
work registrations and applications referred to under such Company's name in
Item A of Schedule VI, all rights corresponding thereto throughout the world,
all extensions and renewals of any thereof, the right to xxx for past
infringements of any of the foregoing, and all proceeds of the foregoing,
including, without limitations, license, royalties, income, payments, claims,
damages, and proceeds of suit.
"Distributions" shall mean all dividends, distributions, payments of
interest and principal and other amounts (whether consisting of cash,
securities, personalty or other property) from time to time received,
receivable or otherwise distributed in respect of or in exchange or
substitution for any of the Pledged Securities.
"Documents" shall mean "documents" as such term is defined in Section
9-105(f) of the UCC.
"Equipment" shall mean "equipment" as such term is defined in Section
9-109(2) of the UCC and shall include, without limitation and in any event, all
machinery, manufacturing and assembly equipment, data processing equipment,
motor vehicles not constituting Inventory of each Company, computers, office
equipment, furniture, appliances, tools, dies and material handling equipment.
"Exempt Instruments" shall have the meaning provided in Section
3.8(b) of this Security Agreement.
"Existing Notes" shall mean the collective reference to each
promissory note and Instrument identified on Schedule II hereto.
"Fixtures" shall mean "fixtures" as such term is defined in Section
9-313 of the UCC.
"General Intangibles" shall mean "general intangibles" as such term
is defined in Section 9-106 of the UCC, including, without limitation and in
any event, rights to the payment of money, Trademarks, Copyrights, Patents, and
contracts, licenses and franchises (except in the case of licenses and
franchises in respect of which any Company is the licensee or franchisee if,
and for so long as, the agreement in respect of such license or franchise
prohibits by its terms any assignment or grant of a security interest therein),
limited and general partnership interests and joint venture interests, federal
income tax refunds, trade names, distributions on certificated securities (as
defined in Section 8-102(1)(a) of the UCC) and uncertificated securities (as
defined in Section 8-102(1)(b) of the UCC), computer programs and other
computer software, inventions, designs, trade secrets, goodwill, proprietary
rights, customer lists, supplier contracts, sale orders, correspondence,
advertising materials, payments due in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any property, reversionary
interests in pension and profit-sharing plans and reversionary, beneficial and
residual interests in trusts, credits with and other claims against any Person,
together with any collateral for any of the foregoing and the rights under any
security agreement granting a security interest in such collateral.
"Hedging Agreements" shall mean interest rate, currency or commodity
protection or hedging arrangements, including without limitation, caps,
collars, floors, forwards and any other similar or dissimilar interest rate,
currency or commodity exchange agreements or other interest rate, currency or
commodity hedging arrangements.
"Indenture" shall mean that certain Indenture, dated as of the date
hereof, among Terex, the Guarantors named therein and the Trustee, as the same
may be amended, modified, supplemented or restated from time to time.
"Instruments" shall mean "instruments" as such term is defined in
Section 9-105(1)(i) of the UCC.
"Insurance Policies" shall mean insurance policies procured by or on
behalf of any Company relating to the Collateral identified in clauses (i)
through (xvi), inclusive, and (xviii) of Section 2 hereof.
"Intellectual Property Collateral" means, collectively, the
Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the
Trademarks, the Trademark Licenses, and the Trade Secrets Collateral.
"Inventory" shall mean "inventory" as such term is defined in Section
9-109(4) of the UCC, including without limitation and in any event, all goods
(whether such goods are in the possession of any Company or of a lessee, bailee
or other Person for sale, lease, storage, transit, processing, use or otherwise
and whether consisting of whole goods, spare parts, components, supplies,
materials or consigned or returned or repossessed goods) which are held for
sale or lease or are to be furnished (or which have been furnished) under any
contract of service or which are raw materials or work in progress or materials
used or consumed in any Company's or any of its Subsidiaries' business.
"Majority Holders" shall mean the Holder or Holders of a majority in
aggregate principal amount of the outstanding Notes.
"Mortgaged Property" shall mean all property and assets in which a
Lien is granted under the Mortgages.
"Non-located Assets" shall have the meaning provided in Section 4.4
of this Security Agreement.
"Patent Licenses" means, with respect to any Company, all of such
Company's right, title, and interest in and to any and all agreements providing
for the granting of any right in or to Patents (whether such Company is
licensee or licensor thereunder) including, without limitation, each agreement
referred to under such Company's name in Item D of Schedule VI.
"Patents" means, with respect to such Company, all of such Company's
right, title, and interest in and to all United States and foreign patents and
applications for letters patent throughout the world, including, but not
limited to each patent and patent application referred to under such Company's
name in Item C of Schedule VI, all reissues, divisions, continuations,
continuations-in-part, extensions, renewals, and reexaminations of any of the
foregoing, all rights corresponding thereto throughout the world, and all
proceeds of the foregoing including, without limitation, license, royalties,
income, payments, claims, damages, and proceeds of suit and the right to xxx
for past infringements of any of the foregoing.
"Permitted Liens" shall mean the Liens permitted pursuant to Section
4.12 of the Indenture.
"Permitted Working Capital Financers" shall mean those Persons
providing financing to any Company permitted pursuant to Section 4.9(b)(i) of
the Indenture which is secured by Liens on all or part of the Working Capital
Collateral of such Company permitted pursuant to Section 4.12(i) of the
Indenture.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Pledged Securities" shall mean the collective reference to (i) all
shares of capital stock of any corporation, and all ownership and equity
interests in any other Person, from time to time owned by any Company or
options or rights to acquire any such shares or interests now or hereafter
owned by any Company, including, without limitation, the capital stock and
interests identified on Schedule II hereto; provided, however, that the capital
stock of PPM Far East Pte. Ltd., a Singapore company, Xxxxx Material Handling
of Canada, Ltd., a Canadian company, and Samsung-Xxxxx Co., Ltd., a Korean
company (each, a "Subject Company") shall not constitute Pledged Securities of
the owner thereof until and unless such Subject Company shall become a Material
Subsidiary, (ii) all promissory notes and other Instruments now or hereafter
owned by any Company, all security therefore and all rights of any Company
under any and all documents or agreements pursuant to which any such promissory
note or other such Instrument is secured, (iii) all Distributions on Pledged
Securities (as constituted immediately prior to such Distribution) constituting
securities (whether debt or equity securities or otherwise), (iv) all other or
additional stock, notes, securities or property (including cash) paid or
distributed in respect of Pledged Securities (as constituted immediately prior
to such payment or distribution) by way of stock-split, spin-off, split-up,
reclassification, combination of shares or similar rearrangement and (v) all
other or additional stock, notes, securities or property (including cash) that
may be paid in respect of Pledged Securities (as constituted immediately prior
to such payment) by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation, bankruptcy or similar corporate
reorganization or other disposition of Pledged Securities.
"Proceeds" shall mean "proceeds" as such term is defined in Section
9-306(1) of the UCC.
"Purchase Agreement" shall mean that certain Purchase Agreement,
dated as of the date hereof, among Terex, certain Subsidiaries of Terex and
each of the purchasers signatory thereto, as the same may be amended, modified,
supplemented or restated from time to time.
"Receivables" shall mean all rights to payment for goods sold or
leased or services rendered, whether or not earned by performance and all
rights in respect of the Account Debtor, including without limitation all such
rights constituting or evidenced by any Account, Chattel Paper or Instrument,
together with (a) any collateral assigned, hypothecated or held to secure any
of the foregoing and the rights under any security agreement granting a
security interest in such collateral, (b) all goods, the sale of which gave
rise to any of the foregoing, including, without limitation, all rights in any
returned or repossessed goods and unpaid seller's rights, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing and (d) all
powers of attorney for the execution of any evidence of indebtedness or
security or other writing in connection therewith.
"Receivables Records" shall mean (a) all original copies of all
documents, instruments or other writings evidencing the Receivables, (b) all
books, correspondence, credit or other files, records, ledger sheets or cards,
invoices, and other papers relating to Receivables, including without
limitation all tapes, cards, computer tapes, computer discs, computer runs,
record keeping systems and other papers and documents relating to the
Receivables, whether in the possession or under the control of any Company or
any computer bureau or agent from time to time acting for any Company or
otherwise and (c) all credit information, reports and memoranda relating
thereto.
"Security Agreement" shall mean this Subsidiary Security and Pledge
Agreement, as the same may be amended, modified, supplemented or restated from
time to time.
"Secured Obligations" shall mean all obligations, liabilities
(including, without limitation, contingent obligations) and indebtedness of
every nature of Terex, any Company or any of their respective Subsidiaries to
the Secured Parties now existing or hereafter incurred, arising under or in
connection with the Collateral, the Mortgaged Property or the Transaction
Collateral or this Security Agreement, the Purchase Agreement, the Indenture,
the Registration Rights Agreement, the Notes, the Mortgages or the other
Transaction Security Documents, and shall include, interest on the Notes
accruing after the filing of any petition under the Bankruptcy Code at the
default rate applicable under the Indenture.
"Secured Parties" shall mean the collective reference to the
Collateral Agent, the Trustee and each Holder.
"Subordination Agreement" shall have the meaning provided in Section
2(b) of this Security Agreement.
"Subject Terex Chattel Paper" shall mean Chattel Paper constituting
Terex Collateral and representing Receivables that has not been delivered to,
or is not being held by Terex subject to the Lien of, a Permitted Working
Capital Financer as security.
"Subject Terex Instruments" shall mean Instruments constituting Terex
Collateral and representing Receivables that have not been delivered to a
Permitted Working Capital Financer as security.
"Subsidiary" of any Person shall mean (i) a corporation a majority of
whose capital stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly, owned by
such Person, by one or more subsidiaries of such Person or by such Person and
one or more subsidiaries of such Person or (ii) a partnership in which such
Person or a subsidiary of such person is, at the date of determination, a
general partner of such partnership, or (iii) any other Person (other than a
corporation or a partnership) in which such Person, a subsidiary of such person
or such Person and one or more subsidiaries of such Person, directly or
indirectly, at the date of determination, has (x) at least a majority ownership
interest or (y) the power to elect or direct the election of the directors or
other governing body of such Person.
"Terex" shall mean Terex Corporation, a Delaware corporation, and its
successors and assigns.
"Terex Collateral" shall mean "Collateral" as defined in the Terex
Security Agreement.
"Terex Security Agreement" shall mean that certain Security and
Pledge Agreement dated as of the date hereof between Terex and the Collateral
Agent, as the same may be amended, modified, supplemented or restated from time
to time.
"Trademark Licenses" means, with respect to any Company, all of such
Company's right, title, and interest in and to any and all agreements providing
for the granting of any right in or to Trademarks (whether such Company is
licensee or licensor thereunder) including, without limitation, each agreement
referred to under such Company's name in Item F of Schedule VI.
"Trademarks" means, with respect to any Company, all of such
Company's right, title, and interest in and to all United States and foreign
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, certification marks,
collective marks, logos, other source of business identifiers, designs and
general intangibles of a like nature, all registrations and applications for
any of the foregoing including, but not limited to the registrations and
applications referred to under such Company's name in Item E of Schedule VI,
all extensions or renewals of any of the foregoing; all of the goodwill of the
business connected with the use of and symbolized by the foregoing; the right
to xxx for past infringement or dilution of any of the foregoing or for any
injury to goodwill, and all proceeds of the foregoing, including, without
limitation, license royalties, income, payments, claims, damages, and proceeds
of suit.
"Trade Secrets Collateral" means, with respect to any Company, all of
such Company's right, title, and interest in and to trade secrets and all other
confidential or proprietary information and know-how now or hereafter owned or
used in, or contemplated at any time for use in, the business of such Company
(all of the foregoing being collectively called a "Trade Secret"), whether or
not such Trade Secret has been reduced to a writing or other tangible form,
including all documents and things embodying, incorporating, or referring in
any way to such Trade Secret, all licenses of Trade Secrets including, without
limitation each such license referred to under such Company's name in Item G of
Schedule VI, the right to xxx for past infringement or dilution of any Trade
Secret, and all proceeds of the foregoing, including, without limitation,
license royalties, income, payments, claims, damages, and proceeds of suit.
"Transaction Collateral" shall mean the collective reference to
"Collateral" as defined in each of the Transaction Security Documents.
"Transaction Security Documents" shall mean the Terex Security
Agreement and each other document, instrument and agreement executed or
delivered by Terex, any Company or any Subsidiaries from time to time pursuant
to which Terex or any such Company or Subsidiary shall xxxxx x Xxxx on any of
its properties or revenues in favor of any Secured Party to secure any of the
Secured Obligations, as each such document, instrument or agreement may be
amended, modified, supplemented or restated from time to time.
"Trustee" shall mean United States Trust Company of New York, as
trustee under the Indenture, and any successor trustee thereunder.
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the State of New York.
"Working Capital Collateral" shall mean, with respect to each
Company, those assets, properties and rights of such Company identified on
Schedule VII hereto.
(c) All terms defined in the UCC and not otherwise defined
herein shall have the meanings assigned to them in the UCC.
2. Creation of Security Interest, etc.
(a) As security for the prompt and complete payment and
performance in full of all the Secured Obligations, each Company hereby
assigns, pledges, transfers and delivers to the Collateral Agent for the
benefit of itself and the other Secured Parties and grants to the Collateral
Agent for the benefit of itself and the other Secured Parties a security
interest in and continuing lien on all of such Company's right, title and
interest in, to and under the following, in each case, whether now owned or
existing or hereafter acquired or arising, and wherever located (all of which
being hereinafter collectively called the "Collateral"):
(i) all Inventory;
(ii) all Accounts;
(iii) all Pledged Securities;
(iv) all Equipment;
(v) all Distributions;
(vi) the Collateral Account;
(vii) all Collateral Records;
(viii) all Documents;
(ix) all Fixtures;
(x) all Chattel Paper;
(xi) all General Intangibles;
(xii) all Hedging Agreements;
(xiii) all Instruments;
(xiv) all Receivables;
(xv) all Receivables Records;
(xvi) all Intellectual Property Collateral;
(xvii) all Insurance Policies; and
(xviii) all accessions and additions to, all substitutions and
replacements for, and all Proceeds or products of, any or all of the foregoing;
provided, however, that Collateral Agent shall not have any security interest
in, or Lien on, any Equipment or Fixtures acquired by any Company with the
proceeds of Purchase Money Obligations permitted under the terms of the
Indenture, which Equipment or Fixtures are subject to Purchase Money Liens
permitted under the terms of the Indenture, if, and for so long as, the
agreements governing the terms of such Purchase Money Obligations and Purchase
Money Liens prohibit the grant by such Company of such security interests and
Liens on the assets so acquired. If the agreements governing the terms of any
permitted Purchase Money Obligations and Purchase Money Liens prohibit the
grant by such Company of security interests and Liens on the assets so
acquired, the Collateral Agent shall (at the request and sole expense of any
Company) execute and deliver to the Person holding such Purchase Money Liens on
Equipment or Fixtures, partial releases on Form UCC-3 (or comparable form),
which partial releases shall provide that the Collateral Agent shall have no
security interests or Liens on the Equipment or Fixtures subject to such
Purchase Money Liens but only for so long as (i) such Purchase Money
Obligations are outstanding and (ii) such agreements prohibits the grant by
such Company of such security interests and Liens.
(b) Notwithstanding anything contained herein to the contrary,
the Collateral Agent on behalf of the Secured Parties hereby acknowledge that
the Lien of the Secured Parties in Working Capital Collateral, shall be junior
and subordinate in priority to any Liens in Working Capital Collateral of any
Company granted by such Company to Permitted Working Capital Financers. The
Collateral Agent is authorized to enter into the Congress Intercreditor
Agreement and any other intercreditor or subordination agreement necessary or
appropriate to effectuate and be consistent with the foregoing (each such
agreement being a "Subordination Agreement").
3. Representations and Warranties. Each Company jointly and
severally represents and warrants to the Collateral Agent and the other Secured
Parties, which representations and warranties shall survive the execution and
delivery of this Security Agreement, as follows:
3.1 Validity, Perfection and Priority.
(a) The security interests in the Collateral granted to the
Collateral Agent for the benefit of itself and the other Secured Parties
hereunder constitute valid and continuing security interests in the Collateral.
(b) Upon (i) the filing of financing statements naming the
appropriate Company as "debtor" and the Collateral Agent as "secured party" and
describing the Collateral in the filing offices set forth under each Company's
name on Schedule I hereto, (ii) to the extent not subject to Article 9 of the
Applicable UCC, the recordation of the security interests granted hereunder in
Patents, Trademarks and Copyrights in the applicable patent, trademark and
copyright registries and the registration of all Copyrights, (iii) upon the
delivery by the appropriate Company of certificates and instruments evidencing
all of the Pledged Securities identified under each Company's name on Schedule
II hereto, indorsed in blank or accompanied by undated stock powers duly
executed in blank, as the case may be, with respect thereto and (iv) the
consummation of all transactions, and the taking of all actions required under
the Security Documents with respect to the perfection of security interests in
Pledged Securities consisting of equity securities issued by Persons not
organized in the United States or any State thereof, the security interests in
the Collateral granted to the Collateral Agent for the benefit of itself and
the other Secured Parties hereunder will constitute perfected security
interests therein superior and prior to all Liens (other than Permitted Liens),
rights or claims of all other Persons.
3.2 No Liens; Other Financing Statements.
(a) Except for the Lien granted to the Collateral Agent
hereunder for the benefit of itself and the other Secured Parties, the
Companies own and, as to all Collateral whether now existing or hereafter
acquired will continue to own, each item of the Collateral free and clear of
any and all Liens (other than Permitted Liens), rights and claims, and each
Company shall defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to the
Collateral Agent or any other Secured Parties other than holders of Permitted
Liens on the Collateral entitled to priority therein under applicable law.
(b) No financing statement or other evidence of Lien covering
or purporting to cover any of the Collateral is on file and is effective in any
public office other than (i) financing statements filed or to be filed in
connection with the security interests granted to the Collateral Agent
hereunder, (ii) financing statements for which proper, executed termination
statements have been delivered to the Collateral Agent for filing and (iii)
financing statements filed in connection with Permitted Liens.
3.3 Chief Executive Office. The chief executive office of each
Company is located opposite such Company's name on Schedule III hereto. The
originals of the Receivables Records and all Collateral Records of each Company
are located at the locations identified under the name of such Company on
Schedule III as such or at the chief executive office of such Company. All
Receivables are maintained at, and controlled and directed (including, without
limitation, for general accounting purposes) from the chief executive office or
the offices identified on Schedule III as such.
3.4 Location of Inventory and Equipment. All Inventory and
Equipment (other than Non-located Assets with an aggregate book value (together
with the aggregate book value of all Non-located Assets (as defined in each of
the other Transaction Security Documents)) not in excess of $10 million) now or
from time to time included in the Collateral is kept only at (or shall be in
transit to) the locations listed on Schedule III and IV hereto. None of such
Inventory or Equipment is in the possession of an issuer of a negotiable
document (as defined in Section 7-104 of the UCC) therefor or otherwise in the
possession of a bailee or other Person, except as set forth on Schedule IV
hereto.
3.5 Fair Labor Standards Act. Any goods now or hereafter produced
by each Company included in the Collateral have been and will be produced in
compliance with the requirements of the Fair Labor Standards Act, as amended.
3.6 Tradenames; Prior Names. The only names under which any Company
has conducted business during the last five years are as set forth under such
Company's name on Schedule V hereto.
3.7 Certificate of Title. There is no property of any Company the
title to which is governed by a certificate of title or ownership other than
(i) motor vehicles which constitute Inventory of the Companies and (ii) motor
vehicles which constitute Equipment of the Companies and (to the extent that
failure to have accomplished the same would render the representation contained
in the first sentence of Section 3.4 hereof incorrect) with respect to which
the Lien of the Collateral Agent is duly noted on the certificate of title
issued with respect to such motor vehicles.
3.8 Pledged Securities. (a) Each Company is the legal, record and
beneficial owner of, and has good title to, the Pledged Securities listed under
such Company's name on Schedule II hereto and such Pledged Securities are not
subject to any put, call, option or other right in favor of any other Person
whatsoever, (b) except as disclosed on Schedule 3.8 hereto, the Pledged
Securities listed under each Company's name on Schedule II hereto constitutes
all of the capital stock owned legally or beneficially by such Company of any
corporation organized under the laws of the United States or any State thereof
and all of the ownership and equity interests owned legally or beneficially by
such Company of any other business entity organized under the laws of the
United States or any State thereof and all promissory notes and other
Instruments in which such any Company has a legal or beneficial ownership
interest on the date hereof (other than Instruments constituting Working
Capital Collateral that have been delivered to a Permitted Working Capital
Financier and other Instruments in a principal amount, individually or in the
aggregate, not required to be delivered to the Collateral Agent pursuant to
Section 4.7 hereof (collectively, "Exempt Instruments")), (c) except as set
forth on Schedule II hereto, no Company has any options or other rights to
acquire any capital stock or other ownership or equity interests of any other
Person, (d) no Company is a party to or bound by any agreement with any other
Person (including, without limitation, any Subsidiary or any other stockholder
of any Subsidiary) which restricts the ability of such Company to vote,
transfer or dispose of any Capital Stock owned by such Company or any of the
other Pledged Securities, (e) no consent of any other Person (including,
without limitation, any Subsidiary of any Company or any other stockholder of
any such Subsidiary) is required to be obtained by any Company in connection
with the pledge by such Company of any of the Pledged Securities or the
consummation of the other transactions contemplated hereby, including, without
limitation, the exercise by the Collateral Agent of the voting or other rights
provided for in this Security Agreement with respect to the Pledged Securities
or the remedies in respect of the Pledged Securities provided pursuant to this
Security Agreement, (f) all of the Pledged Securities listed on Schedule II
have been duly and validly issued, and are fully paid and nonassessable and (g)
each of the Existing Notes (i) evidences bona fide indebtedness of the issuer
thereof to such Company, (ii) is not subject to any offset for counterclaim and
(iii) is enforceable against the maker thereof in accordance with its terms,
except as enforceability may be limited by bankruptcy, reorganization,
moratorium and other laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity or
at law).
3.9 Receivables.
(a) Each Receivable (i) is and will be the genuine, legal,
valid and binding obligation of the Account Debtor in respect thereof,
representing an unsatisfied obligation of such Account Debtor, (ii) is and will
be enforceable in accordance with its terms, (iii) is and will be in full force
and effect and is not and will not be subject to any setoffs, defenses, taxes,
counterclaims (except (x) with respect to refunds, returns and allowances in
the ordinary course of business and (y) to the extent that such Receivable may
not yet have been earned by performance) and (iv) is and will be in compliance
with all applicable laws, whether federal, state, local or foreign.
(b) No Receivables in excess of $250,000 individually or
$2,000,000 in the aggregate (together with Receivables represented by
Instruments not delivered to the Collateral Agent pursuant to the terms of any
other Transaction Security Document) are evidenced by any Instrument which has
not been delivered to the Collateral Agent or a Permitted Working Capital
Financier.
(c) The representations and warranties contained in this
Section shall be deemed to be repeated by each Company as of the time when each
Receivable arises.
3.10 Intellectual Property. Except as disclosed in Item H of
Schedule VI, as of the date hereof:
(a) all Intellectual Property Collateral material to the
business of each Company is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part;
(b) to the best of each Company's knowledge, all Intellectual
Property Collateral material to the business of such Company is valid and
enforceable;
(c) all Trademark, Patent and Copyright registrations and
applications of each Company are (except as disclosed on items A, C or E of
Schedule VI hereof) standing in the name of such Company, and none of the
Trademarks, Patents, Copyrights or Trade Secret Collateral material to the
business of any Company has been licensed by such Company to any affiliate or
third party, except as disclosed in Items B, D, F and G of Schedule VI;
(d) each Company has been using appropriate statutory notice of
registration in connection with its use of registered Trademarks material to
the business of such Company, proper marking practices in connection with the
use of Patents material to the business of such Company and appropriate notice
of copyright in connection with the publication of Copyrights material to the
business of such Company;
(e) each Company is the exclusive owner of the entire and
unencumbered right, title and interest in and to all Intellectual Property
Collateral material to the business of such Company (subject only to Permitted
Liens and the licenses and other disclosures identified in Items B, D, F and G
of Schedule VI) and, to the best of each Company's knowledge, no claim has been
made that the use of such Intellectual Property Collateral violates the
asserted rights of any third party;
(f) to the best of each Company's knowledge, the conduct of
each Company's business does not infringe upon any trademark, patent,
copyright, trade secret or similar intellectual property right owned or
controlled by a third party and, to the best of each Company's knowledge, no
third party is infringing upon any Intellectual Property Collateral;
(g) no holding, decision, or judgment has been rendered in any
action or proceeding challenging the validity of or any Company's rights to use
any Intellectual Property Collateral and no such action or proceeding is
pending or, to the best of any Company's knowledge, threatened;
(h) each Company has performed all acts and has paid all
required fees and taxes to maintain each and every registration and application
of Intellectual Property Collateral material to the business of such Company in
full force and effect;
(i) each Company owns or has valid rights to use, all patents,
trademarks, trade secrets, copyrights, and similar intellectual property rights
material to the business of such Company and used in the conduct of such
Company's business; and
(j) Schedule VI set forth, under the name of each Company, (i)
all United States, state and foreign registrations of and applications for
Patents, Trademarks and Copyrights of such Company and (ii) all Patent
Licenses, Trademark Licenses and Copyright Licenses material to the business of
such Company.
4. Covenants. The parties agree that the following provisions shall
be applicable to each Company and the Collateral, and each Company jointly and
severally covenants and agrees that at all times during the term of this
Security Agreement and until the Secured Obligations have been full and finally
paid.
4.1 Books and Records.
(a) Each Company shall keep accurate and complete books and
records concerning each category of the Collateral, including, but not limited
to, the originals of all documentation with respect to all Receivables and
records of all payments received and all credits granted on the Receivables,
all merchandise returned and all other dealings therewith. Each Company shall,
at any time that Chattel Paper and Receivables are not pledged to a Permitted
Working Capital Financier, legend, in form and manner reasonably satisfactory
to the Collateral Agent, all Chattel Paper and Receivables Records with an
appropriate reference to the fact that the Chattel Paper and all other
Receivables have been assigned to the Collateral Agent for the benefit of the
Secured Parties and that the Collateral Agent has a security interest therein.
(b) Each Company shall furnish to the Collateral Agent at such
times and in such form and substance as the Collateral Agent may reasonably
request, but in any event within ten business days after the occurrence of an
Event of Default and at least every 30 days thereafter during the continuance
of such Event of Default, information reasonably adequate to enable the
Collateral Agent to identify the Collateral and determine the amount and value
thereof, including, without limitation, the location, cost, net book value and
fair market value of Collateral.
4.2 Further Assurances. At any time and from time to time, upon the
reasonable request of the Collateral Agent, and at the sole expense of the
affected Company, each Company shall promptly do all such further things and
duly execute and deliver any and all such further conveyances, assignments,
agreements, instruments, endorsements, powers of attorney and other documents,
make such filings, give such notices and take such further action as the
Collateral Agent may reasonably deem necessary in obtaining the full benefits
of this Security Agreement and of the rights, remedies and powers herein
granted or in order to assure and confirm unto the Collateral Agent the
Collateral Agent's rights, powers and remedies hereunder, including, without
limitation, the filing of any financing statements, in form reasonably
acceptable to the Collateral Agent under the Uniform Commercial Code in effect
in any jurisdiction with respect to the Liens granted hereby. Each Company
also hereby authorizes the Collateral Agent to file any such financing
statement without the signature of such Company to the extent permitted by
applicable law. A photocopy or other reproduction of this Security Agreement
shall be sufficient as a financing statement and may be filed in lieu of the
original to the extent permitted by applicable law. Each Company will pay or
reimburse the Collateral Agent for all filing fees and related reasonable
out-of-pocket expenses and will make or reimburse the Collateral Agent for
making all searches reasonably deemed necessary by the Collateral Agent to
establish and determine the priority of the security interests of the
Collateral Agent created hereunder or to determine the presence or priority of
other secured parties.
4.3 Change of Chief Executive Office. No Company will move its
chief executive office from that disclosed in Schedule III hereto (or move or
establish any registered office in Kentucky) except to such new location as
such Company may establish in accordance with the last sentence of this
Section. The originals of all Receivables Records will continue to be kept at
such chief executive office, at the offices designated under such Company's
name on Schedule III as offices at which Receivables Records are located, or at
such new locations as such Company may establish in accordance with the last
sentence of this Section. All Receivables and Receivables Records of each
Company will continue to be maintained at, and controlled and directed
(including, without limitation, for general accounting purposes) from, the
chief executive office of such Company or a location identified as a location
at which Receivables or Receivables Records are maintained, controlled and
directed under such Company's name on Schedule III, or such new locations as
such Company may establish in accordance with the last sentence of this
Section. No Company shall establish a new location for its chief executive
office or such activities (or move any such activities from any such locations)
or move or establish any registered office in Kentucky until (i) it shall have
given to the Collateral Agent not less than 30 days' prior written notice of
its intention to do so, clearly describing such new location and providing such
other information in connection therewith as the Collateral Agent may
reasonably request and (ii) with respect to such new location, it shall have
taken all action as the Collateral Agent may reasonably request to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected with the same or better priority
and in full force and effect.
4.4 Change of Location of Inventory and Equipment. Each Company
agrees that (i) all Inventory and Equipment now held or subsequently acquired
by it shall only be kept at (or shall be in transit to) the locations shown
under such Company's name on Schedule III hereto (or, in the case of Inventory
held by a bailee, those locations under such Company's name shown on Schedule
IV hereto), or such new locations as such Company may establish in accordance
with the last sentence of this Section. No Company may establish a new
location for Inventory and Equipment unless (i) it shall have given to the
Collateral Agent not less than 30 days' prior written notice of its intention
to do so, clearly describing such new location and providing such other
information in connection therewith as the Collateral Agent may reasonably
request and (ii) with respect to such new location, it shall have taken all
action as the Collateral Agent may reasonably request to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted
hereby at all times fully perfected with the same or better priority and in
full force and effect. Notwithstanding anything to the contrary contained in
this Section 4.4, any Company may keep Inventory and Equipment at locations
other than those set forth under such Company's name on Schedules III and IV
hereto and locations other than with respect to which such Company has notified
the Collateral Agent in advance (collectively, "Non-located Assets"); provided,
however, that at no time shall the aggregate book value of all the Companies of
all Non-located Assets (together with all other Non-located Assets (as defined
in each of the other Transaction Security Documents)) and the book value of
all Motor Vehicles constituting Equipment owned by any Company or Terex in
which the Collateral Agent does not have a perfected, first priority Lien under
the Transaction Security Documents exceed (a) $2,000,000 in any State of the
United States, province of Canada or in any other country or (b) $10,000,000 in
the aggregate for all such assets and at all locations.
4.5 Change of Name; Identity or Corporate Structure. No Company
shall change its name (or conduct any significant portion of its business under
any tradenames (other than those identified with an asterisk under such
Company's name on Schedule V hereto)), identity or corporate structure unless
(i) it shall have given to the Collateral Agent not less than 30 days' prior
written notice of its intention to do so, clearly describing such new name,
identity or corporate structure or such new tradename and providing such other
information in connection therewith as the Collateral Agent may reasonably
request and (ii) with respect to such new name, identity or corporate structure
or such new tradename, it shall have taken all action as the Collateral Agent
may reasonably request to maintain the security interest of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully
perfected with the same or better priority and in full force and effect.
4.6 Subsequently Acquired Pledged Securities, etc. If at any time
or from time to time after the date hereof, any Company shall acquire any
additional Pledged Securities (by purchase, stock dividend, in lieu of interest
or otherwise) (other than Exempt Instruments), such Company will forthwith
pledge and deposit such Pledged Securities with the Collateral Agent and
deliver to the Collateral Agent certificates or instruments therefor, indorsed
in blank by such Company or accompanied by undated stock powers duly executed
in blank by such Company or such other documentation reasonably required by the
Collateral Agent to perfect its first-priority Lien therein.
4.7 Delivery of Instruments. If any Instrument (other than
Instruments representing Receivables that have been delivered to a Permitted
Working Capital Financier as security) in excess of $250,000 individually or
(together with Subject Terex Instruments) $2,000,000 in the aggregate shall at
any time comprise any portion of the Collateral and the Terex Collateral,
combined, any Company with an interest therein shall within thirty days notify
the Collateral Agent thereof, and promptly deliver such Instrument or
Instruments to the Collateral Agent appropriately indorsed or assigned or to
the order of the Collateral Agent or in such other manner as shall be
satisfactory to the Collateral Agent.
4.8 Delivery of Chattel Paper. If Chattel Paper (other than Chattel
Paper representing Receivables that has been delivered to, or is being held by
any Company subject to the Lien of, a Permitted Working Capital Financier as
security) representing Receivables in excess of $250,000 individually or
(together with Subject Terex Chattel Paper) $2,000,000 in the aggregate shall
at any time comprise any portion of the Collateral and the Terex Collateral,
combined, any Company with an interest therein shall within thirty days notify
the Collateral Agent thereof, and promptly deliver such Chattel Paper to the
Collateral Agent.
4.9 Right of Inspection. The Collateral Agent shall at all times
have full and free access during normal business hours to all the books,
correspondence and records of each Company relating to the Collateral, and the
Collateral Agent and its representatives may examine the same, take extracts
therefrom and make photocopies thereof, and each Company agrees to render to
the Collateral Agent, at such Company's cost and expense, such clerical and
other assistance as may be reasonably requested with regard thereto. The
Collateral Agent and its representatives shall at all times during normal
business hours also have the right to enter into and upon any premises where
any of the Inventory or Equipment is located for the purpose of inspecting the
same, observing its use or otherwise protecting its interests therein. The
Collateral Agent shall, if no Event of Default shall then exist, provide
reasonable notice to the affected Company of any access and inspections
permitted under this Section and shall use all reasonable efforts to ensure
that the business of such Company will not be unreasonably disrupted thereby.
4.10 Insurance. Each Company shall maintain or cause to be
maintained with financially sound and reputable insurers acceptable to the
Collateral Agent and licensed to do business in each state in which any of the
Collateral covered by any policy is located, insurance with respect to the
Collateral and its use, against loss or damage of the kinds customarily insured
against by reputable companies in the same or similar businesses, such
insurance to be of such types and in such amounts (with such deductible
amounts) as is customary for such companies under the same or similar
circumstances, and the types, amounts and terms of which (other than products
liability, which each Company may self-insure) shall, in any event, be
reasonably acceptable to the Collateral Agent. Without limiting the generality
of the foregoing, each Company (a) will keep the Collateral insured on an "all
risk" basis, as appropriate for any particular Collateral against loss or
damage by fire, standard extended coverage perils and such other hazards,
occurrences and events customarily required by a prudent lender in the area
where the Collateral is located in amounts not less than the replacement cost
of the Collateral and (b) will maintain in the amount customarily obtained by
the same or similar businesses, general public liability insurance against
claims for bodily injury, death or property damage. No Company shall obtain or
carry separate insurance concurrent in form or contributing in the event of
loss with that required in this Section to be furnished by such Company unless
the Collateral Agent and the other Secured Parties are included as named
insured, with loss payable as provided herein. All policies of insurance shall
(i) name the Collateral Agent, on behalf of itself and the other Secured
Parties as additional insured (with respect to liability insurance policies) or
loss payees with a lender's loss payable indorsement and a standard "New York"
mortgagee provision with a no contribution clause (with respect to property
insurance policies), in each case as their respective interests may appear,
(ii) include waivers by the insurer of all claims for insurance premiums
against the Collateral Agent and the other Secured Parties, (iii) provide that
any losses shall (subject to the terms of any Subordination Agreement) be
payable to the Collateral Agent notwithstanding (A) any act, failure to act or
negligence of or violation of warranties, declarations or conditions contained
in such policy by any Company, the Collateral Agent or any other Secured
Parties, (B) any foreclosure or other proceedings or notice of sale relating to
any Collateral insured thereunder, or (C) any change in the title to or
ownership of any Collateral insured thereunder and (iv) provide that no
cancellation, termination or lapse in coverage thereof shall be effective until
at least 30 days after receipt by the Collateral Agent of written notice
thereof. Each Company shall pay the premiums for all policies of insurance as
the same become due and payable and shall deliver evidence thereof to the
Collateral Agent. At the request of the Collateral Agent, each Company will
(subject to the terms of any Subordination Agreement relating to casualty
insurance on Working Capital Collateral) assign and deliver all policies of
insurance to the Collateral Agent. In any event, a certificate of insurance
for each of the policies of insurance shall be issued to the Collateral Agent,
and copies of all original policies, together with the endorsements thereof
required hereunder, shall be delivered to the Collateral Agent within ten days
of the Collateral Agent's request therefor. Not later than fifteen days prior
to the expiration date of each of the policies, each Company will deliver to
the Collateral Agent a renewal policy or policies or certificates of insurance
to the Collateral Agent. If at any time the Collateral Agent is not in receipt
of written evidence that all insurance required hereunder is in full force and
effect, the Collateral Agent shall have the right upon seven days' prior
written notice to the affected Company to take such action as the Collateral
Agent deems necessary to protect its interest in the Collateral, including,
without limitation, the payment of any premiums that are due and payable or the
obtaining of such insurance coverage as the Collateral Agent in its reasonable
discretion deems appropriate, and all reasonable out-of-pocket expenses
incurred by the Collateral Agent in connection with such action or in obtaining
such insurance and keeping it in effect, together with interest thereon at the
rate of 10% per annum shall be paid by such Company to the Collateral Agent
upon demand and such payment obligations shall be secured hereby. Anything
contained in this Section to the contrary notwithstanding, any and all
insurance which any Company is obligated to carry pursuant to this Section may
be carried under a general coverage "floater" policy, master insurance policy,
"blanket" policy or policies covering other properties or liabilities, provided
that the coverage so provided in accordance with the requirements set forth
herein shall not be diminished or hindered by reason of the inclusion of any
such required insurance under a policy containing aggregate loss limits.
If the Collateral shall be damaged or destroyed, in whole or in part,
by fire or other casualty, the affected Company shall give prompt notice
thereof to the Collateral Agent. No settlement on account of any material loss
covered by insurance shall be made for less than insured value without the
consent of the Collateral Agent. Except with respect to third party liability
insurance, after the occurrence and during the continuance of an Event of
Default, all sums payable to any Company by any insurer with respect to a
casualty relating to all or any part of the Collateral shall be paid to the
Collateral Agent. Unless an Event of Default shall have occurred and be
continuing and subject, in any event, to the terms of the Mortgages and the
Indenture, (i) all insurance proceeds from any insurance policy held by any
Company shall be paid to such Company and (ii) each Company may invest such
proceeds in assets related to the business of such Company or its Subsidiaries
or otherwise apply such proceeds in the ordinary course of its business. If
any Company shall receive any insurance proceeds which are to be paid to the
Collateral Agent pursuant to this Section, such Company shall hold such
proceeds in trust for the Collateral Agent, shall segregate such proceeds from
other funds of such Company, and shall immediately forward such proceeds in the
form received to the Collateral Agent (appropriately indorsed by Company to the
order of the Collateral Agent or in such other manner as shall be satisfactory
to the Collateral Agent). All such insurance proceeds may be retained by the
Collateral Agent in the Collateral Account as Collateral hereunder and/or
applied by the Collateral Agent toward payment of all or part of the Secured
Obligations (whether matured or unmatured) in such order as is provided herein.
If any portion of the insurance proceeds are made available to any Company, the
Collateral Agent shall not be obligated to see to the application of any amount
paid to such Company.
4.11 Warehouse Receipts Non-negotiable. Each Company agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt or other
Document is issued with respect to any of its Inventory, such warehouse receipt
or receipt in the nature thereof or other Document shall not be "negotiable"
(as such term is used in Section 7-104 of the UCC or under other relevant law).
4.12 Motor Vehicles.
(a) Within the number of days permitted by the applicable
jurisdiction for delivery or filing in order to perfect a security interest as
of the time of its creation (but subject to the qualification contained in the
last sentence of Section 4.4 hereof relating to Motor Vehicles and Non-located
Assets), if after the date hereof any Company shall acquire any Motor Vehicle
or any other item of property the title to which is governed by a certificate
of title or ownership, such Company shall file in each office in each
jurisdiction or deliver to each Person which the Collateral Agent shall deem
necessary or advisable to perfect its first priority security interest in such
Motor Vehicles or other property, all applications for certificates of title or
ownership indicating the Collateral Agent's first priority lien on the Motor
Vehicle or other property covered by such certificate, and any other necessary
documentation and thereafter as soon as practicable, such Company shall deliver
to the Collateral Agent originals of the certificates of title or ownership for
such Motor Vehicles or other property with the Collateral Agent listed as
lienholder, together with the manufacturer's statement of origin; provided,
however, if the Motor Vehicle or other property acquired is subject to a
Purchase Money Lien, the Collateral Agent shall be listed as a junior
lienholder to the Person holding such Purchase Money Lien.
No Motor Vehicle or other property shall be removed from the state
which has issued a certificate of title therefor for a period equal to or in
excess of four months except for the purpose of reregistering such Motor
Vehicle or other property, in which case the Company having an interest in
such Motor Vehicle or property shall take all steps necessary to continue the
perfection and priority of the Collateral Agent's Lien on such Motor Vehicle or
other property.
(b) Any certificates of title or ownership delivered pursuant
to the terms hereof shall be accompanied by odometer statements for each Motor
Vehicle covered thereby.
4.13 Compliance with Laws. Each Company will comply in all material
respects with all requirements of law applicable to the Collateral or any part
thereof; provided, however, that any Company may contest any requirement of law
in any reasonable manner which shall not, in the reasonable opinion of the
Collateral Agent, materially and adversely affect the Collateral Agent's or the
Secured Parties' rights in any of the Collateral or adversely affect the
priority of the Liens created hereunder in any of the Collateral.
4.14 Payment of Obligations. Each Company will pay promptly when
due all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials,
supplies and services) against or with respect to the Collateral, except that
no such charge need be paid if (i) the validity thereof is being contested in
good faith by appropriate proceedings, (ii) such proceedings do not involve, in
the reasonable opinion of the Collateral Agent, any material danger of the
sale, forfeiture or loss of any of the Collateral or any interest therein that
could reasonably be expected to have any adverse effect on the Secured Parties
and (iii) such charge is adequately reserved against on the affected Company's
books in accordance with GAAP.
4.15 No Impairment. Except as expressly permitted herein or in the
Indenture, no Company will take or knowingly permit to be taken any action
which could impair the Collateral Agent's or any Secured Party's rights in the
Collateral.
4.16 Negative Pledge. No Company shall create, incur or permit to
exist, will defend the Collateral against, and will take such other action as
is necessary to remove, any Lien or claim on or to the Collateral, other than
the Liens created hereby and other than the Permitted Liens, and will defend
the right, title and interest of the Collateral Agent and the other Secured
Parties in and to any of the Collateral against the claims and demands of all
Persons whomsoever other than holders of Permitted Liens on the Collateral
entitled to priority therein under applicable law.
4.17 Limitations on Dispositions of Collateral. No Company shall
sell, transfer, lease or otherwise dispose of any of the Collateral or any
right or interest therein, or attempt, offer or contract to do so except for
dispositions of Collateral either permitted pursuant to or not prohibited by
the provisions of Section 4.10 of the Indenture and, to the extent provided for
in Section 4.10 of the Indenture the proceeds of which are applied as permitted
or required by such section. In the event of a sale, transfer, lease or other
disposition of any of the Collateral permitted by this Section, the Collateral
Agent shall, subject to the terms of Section 10.3 of the Indenture, at the sole
cost and expense of the Company disposing of the same, execute such documents
as such Company shall reasonably request to evidence the release of the Lien
created by this Security Agreement with respect to such Collateral and, to the
extent such Collateral is in the possession of the Collateral Agent, deliver
such Collateral to such Company or its designee.
4.18 Maintenance of Equipment. Each Company will maintain each item
of Equipment in good operating condition, ordinary wear and tear and immaterial
impairments of value and damage by the elements excepted, and will provide all
maintenance, service and repairs necessary for such purpose, unless and to the
extent that the Company owning such Equipment reasonably determines that such
item of Equipment is obsolete, worn out or that repair is not economically
feasible or economically desirable.
4.19 Provisions Regarding Receivables.
(a) Each Company shall perform in all material respects all of
its obligations with respect to the Receivables.
(b) Each Company shall use commercially reasonable efforts
(including, without limitation, prompt and diligent exercise of each material
right it may have under any Receivable (other than any right of termination))
to cause to be collected from each Account Debtor, as and when due (including,
without limitation, amounts which are delinquent, such amounts to be collected
in accordance with generally accepted lawful collection procedures) any and all
amounts owing under or on account of any Receivable, and apply all collected
amounts to the outstanding balance of such Receivable immediately upon receipt
thereof. Notwithstanding the foregoing, no Company shall be obligated to
exercise any rights with respect to any Receivables to the extent that it
determines in good faith that such exercise would not be commercially
reasonable or, in the exercise of its best business judgment, prudent. The
costs of collection, whether incurred by any Company or the Collateral Agent
shall be borne by the affected Company and if incurred by the Collateral Agent
shall be reimbursed, together with interest thereon at the rate of 10% per
annum, to the Collateral Agent upon demand and such reimbursement obligation
shall be secured hereby.
(c) Upon the occurrence and during the continuance of an Event
of Default, but subject to the terms of any Subordination Agreement, each
Company shall establish such lock-box arrangements for the collection of
Receivables as the Collateral Agent may require in its sole discretion.
(d) Each Company (i) that has granted a Lien on any Working
Capital Collateral to secure Indebtedness owed to a Permitted Working Capital
Financer by Terex or any of its Subsidiaries organized in any jurisdiction the
United States (including, if applicable, such Company) (collectively, "Domestic
Subsidiaries") shall settle all Receivables owing by such Company to Terex or
any other Domestic Subsidiary within ninety days from the date such Receivable
arises unless there is a bona fide dispute as to the amount of any such
Receivable, in which case such Receivable shall be settled promptly after the
resolution of such dispute and (ii) shall apply any payments on any
intercompany Indebtedness received from Terex or any of its other Subsidiaries
first to the payment of intercompany Indebtedness constituting intercompany
Receivables until such intercompany Receivables are paid in full.
4.20 Intellectual Property.
(a) No Company shall do any act or omit to do any act whereby
any of the Intellectual Property Collateral may lapse or become abandoned or
dedicated to the public or unenforceable if the same could reasonably be
expected to have a material adverse effect on the business, operations,
condition (financial or otherwise) or prospects of such Company (a "Material
Adverse Effect").
(b) No Company shall, in each case to the extent that it could
reasonably be expected to have a Material Adverse Effect, (i) cease the use of
any of the Trademarks or (ii) fail to maintain as in the past the level of the
quality of products and services offered under any of the Trademarks.
(c) Each Company shall promptly notify the Collateral Agent if
it knows that any item of the Intellectual Property Collateral that is material
to the business of such Company may become (a) abandoned or dedicated to the
public or placed in the public domain, (b) invalid or unenforceable, or (c)
subject to any adverse determination or development (including the institution
of proceedings) or any adverse determination or development in any proceeding
in the United States Patent and Trademark Office, the United States Copyright
Office, and state registry any foreign counterpart thereof or any court.
(d) Each Company shall take all commercially reasonable steps,
including in the United States Patent and Trademark Office, the United States
Copyright Office, or any state or foreign counterpart thereof, to maintain and
pursue any application and to maintain any registration of each Trademark,
Patent, and Copyright owned by such Company including, but not limited to, the
filing of applications for renewal, affidavits of use, affidavits of
incontestability, the prosecution and defense of opposition, interference, and
cancellation proceedings, and the payment of fees and taxes (except to the
extent that such dedication, abandonment, or invalidation, or the failure to
pursue and maintain the same could reasonably be expected to have a Material
Adverse Effect).
(e) Each Company shall promptly (but in no event more than
ninety days after any such Company obtains knowledge thereof) report to the
Collateral Agent (i) the filing of any application to register any Intellectual
Property Collateral (whether such application is filed by such Company or
through any agent, employee, licensee or designee thereof) with the United
States Patent and Trademark Office, the United States Copyright Office, or any
State or foreign counterpart thereof and (ii) the registration of any
Intellectual Property Collateral by any such office. Upon the request of the
Collateral Agent, each Company shall promptly execute and deliver any and all
agreements, instruments, documents, and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent's security interest in such
Intellectual Property Collateral.
(f) Each Company shall, promptly upon the reasonable request of
the Collateral Agent, execute and deliver to the Collateral Agent any document
required to acknowledge, confirm, register, record or perfect the Collateral
Agent's interest in any part of the Intellectual Property Collateral.
4.21 Notice. Each Company will advise the Collateral Agent
promptly, in reasonable detail, in accordance with the provisions hereof (a) of
any Lien (other than Permitted Liens) on, or claim asserted against, any of the
Collateral and (b) of the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the aggregate value of the
Collateral or any material component thereof or an adverse effect on the Liens
created hereunder.
4.22 Performance by Collateral Agent of Company's Obligations;
Reimbursement. If any Company fails to perform or comply with any of its
agreements contained herein, the Collateral Agent may, without consent by such
Company and upon such notice to such Company as the Collateral Agent reasonably
deems appropriate under the circumstances, perform or comply or cause
performance or compliance therewith and the expenses of the Collateral Agent
incurred in connection with such performance or compliance, together with
interest thereon at a rate equal to 10% per annum, shall be payable by such
Company to the Collateral Agent on demand and such reimbursement obligation
shall be secured hereby.
5. Appointment of Sub-Agents. The Collateral Agent shall have the
right, with the consent of any affected Company (which consent shall not be
unreasonably withheld) if an Event of Default shall not then have occurred and
be continuing, to appoint one or more sub-agents or nominees for the purpose of
retaining physical possession of the Collateral, which may be held (if
applicable and in the discretion of the Collateral Agent) in the name of the
Collateral Agent, indorsed or assigned in blank or in favor of the Collateral
Agent or any nominee or nominees of the Collateral Agent or a sub-agent
appointed by the Collateral Agent. All references to the Collateral Agent
herein shall be deemed to include such sub-agents or nominees acting in their
capacity as such.
6. Voting, etc. Unless and until (i) an Event of Default shall have
occurred and be continuing under Sections 6.1(1) or (2) of the Indenture or
(ii) an Event of Default shall have occurred and be continuing under any other
provision of the Indenture and the obligations of Terex under the Indenture and
the Notes shall have been accelerated pursuant to Section 6.2 of the Indenture
(either, a "Voting Divestiture Event"), each Company shall be entitled to vote
any and all of the Pledged Securities and to give consents, waivers or
ratifications in respect thereof; provided, that no vote shall be cast or any
consent, waiver or ratification given or any action taken which would violate
or be inconsistent with any of the terms of this Security Agreement, the
Purchase Agreement or the Indenture or any other instrument or agreement
relating to the Secured Obligations, or which would have the effect of
impairing the position or interests of the Collateral Agent or any other
Secured Party hereunder or thereunder or which would authorize or effect
actions prohibited under the terms of this Security Agreement, the Purchase
Agreement, the Indenture or any instrument or agreement relating to the Secured
Obligations. All such rights of each Company to vote and to give consents,
waivers and ratifications shall cease in the event that a Voting Divestiture
Event has occurred and is continuing. Each Company hereby grants to the
Collateral Agent an irrevocable proxy to vote the Pledged Securities, which
proxy shall be effective immediately upon the occurrence and during the
continuance of a Voting Divestiture Event. After the occurrence and during the
continuance of a Voting Divestiture Event and upon request of the Collateral
Agent, each Company agrees to deliver to the Collateral Agent such further
evidence of such irrevocable proxy or such further irrevocable proxies to vote
the Pledged Securities as the Collateral Agent may reasonably request.
7. Payments and Other Distributions. Unless an Event of Default
shall have occurred and be continuing, all cash Distributions payable in
respect of the Pledged Securities (other than Exempt Instruments) shall be paid
to the aggregate Company, provided that all cash Distributions payable in
respect of the Pledged Securities which are determined by the Collateral Agent,
in its reasonable discretion, to represent in whole or in part a payment of
principal thereon or an extraordinary, liquidating or other distribution in
return of capital (or which, in the absence of any such determination by the
Collateral Agent, shall constitute such a distribution), shall be paid to the
Collateral Agent, deposited by it in the Collateral Account and retained by it
as part of the Collateral. The Collateral Agent shall at all times be entitled
to receive directly, and to retain as part of the Collateral:
(a) all other or additional stock or securities or property
(other than cash) paid or distributed by way of Distribution in respect of the
Pledged Securities (other than Exempt Instruments);
(b) all other or additional stock or other securities or
property (including cash) paid or distributed in respect of the Pledged
Securities (other than Exempt Instruments) by way of stock-split, spin-off,
split-up, reclassification, combination of shares or similar rearrangement; and
(c) all other or additional stock or other securities or
property which may be paid in respect of the Pledged Securities (other than
Exempt Instruments) by reason of any consolidation, merger, exchange of stock,
conveyance of assets, liquidation, bankruptcy or similar corporate
reorganization or other disposition of such Pledged Securities.
All monies and other property which are payable to the Collateral Agent or
which the Collateral Agent is entitled to receive pursuant to this Section 7
and which are received by any Company shall be held by such Company in trust
for the Collateral Agent and the other Secured Parties, segregated from other
monies and other property of such Company and shall forthwith upon receipt by
such Company be turned over to the Collateral Agent in the same form received
by such Company (appropriately indorsed or assigned by such Company to the
order of the Collateral Agent or in such other manner as shall be reasonably
satisfactory to the Collateral Agent).
8. Collateral Account.
8.1 Collateral Account. There is hereby established with the
Collateral Agent the Collateral Account. The Collateral Account shall be under
the sole and exclusive dominion and control of the Collateral Agent and no
Company shall have any rights with respect to the Collateral Account other than
with respect to the receipt of Proceeds of Collateral deposited therein upon
the termination of this Security Agreement and the full and final payment of
all of the Secured Obligations. Without limiting the generality of the
foregoing, no Company shall have any right of withdrawal or transfer from the
Collateral Account.
8.2 Deposit of Proceeds. There shall be deposited in the Collateral
Account from time to time the cash proceeds (as defined in Section 9-306(1) of
the UCC) of, and cash Distributions on, any of the Collateral (including
insurance proceeds thereon) required to be delivered to the Collateral Agent
pursuant hereto or under the Indenture. All amounts and investments and other
items credited to the Collateral Account from time to time shall constitute
Collateral hereunder and shall not constitute payment of the Secured
Obligations until applied as hereinafter provided. So long as no Default or
Event of Default has occurred and is continuing, the Collateral Agent shall,
upon five business days' prior written notice from Terex on behalf of each
Company (which notice shall be accompanied by a certificate (in form and
substance satisfactory to the Collateral Agent) executed by a senior officer of
Terex as to the absence of any such Default or Event of Default) release funds
then credited to the Collateral Account to the appropriate Company or
Companies. At any time following the occurrence and during the continuance of
an Event of Default, the Collateral Agent may in its discretion apply or cause
to be applied (subject to collection) the balance from time to time outstanding
to the credit of the Collateral Account to the payment of the Secured
Obligations in the manner specified herein.
8.3 Investment of Balance in Collateral Account. If an Event of
Default shall not then have occurred and be continuing, substantially all
amounts credited to the Collateral Account shall be invested from time to time
by the Collateral Agent upon the direction of Terex on behalf of each Company
in Cash Equivalents reasonably satisfactory to the Collateral Agent and in
which the Collateral Agent shall have a first priority perfected security
interest, which accounts, investments, instruments and securities shall be held
in the name and be under the control of the Collateral Agent. If an Event of
Default shall have occurred and be continuing, all amounts credited to the
Collateral Account shall be invested by the Collateral Agent in such accounts
(interest-bearing or otherwise), investments, instruments and securities as the
Collateral Agent shall elect in its sole discretion. The Collateral Agent
shall have no responsibility or liability for any losses in connection with any
investment in connection with the Collateral Account, including, without
limitation, losses incurred in connection with the liquidation of any such
investments.
9. Power of Attorney.
9.1 Collateral Agent's Appointment as Attorney-in-Fact.
(a) Each Company hereby irrevocably constitutes and appoints
the Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Company and in name of such
Company or in its own name, from time to time in the Collateral Agent's
discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of
the foregoing, such Company hereby gives the Collateral Agent the power and
right, on behalf of such Company, without assent by such Company and upon such
notice to such Company as the Collateral Agent deems appropriate under the
circumstances, to do the following:
(i) at any time after the occurrence and during the continuance
of an Event of Default, in the name of such Company or its own name, or
otherwise, to take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under, or
with respect to, any Collateral; in the name of such Company or otherwise to
direct any party liable for any payment under any of the Collateral (other
than, until amounts then payable to Permitted Working Capital Financers have
been paid in full, Account Debtors with respect to Receivables in which any
such Permitted Working Capital Financer has a Lien permitted under the
Indenture) to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent shall
direct; to ask or demand for, collect, receive payment of and receipt for, any
and all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral;
(ii) after the occurrence and during the continuance of an
Event of Default, to prepare, sign and file any Uniform Commercial Code
financing statements in the name of such Company as debtor;
(iii) after the occurrence and during the continuance of an
Event of Default, to take or cause to be taken all actions necessary to perform
or comply or cause performance or compliance with the terms of this Security
Agreement, including, without limitation, actions to pay or discharge taxes and
Liens levied or placed on or threatened against the Collateral, to effect any
repairs or obtain any insurance called for by the terms of this Security
Agreement and to pay all or any part of the premiums therefor and the costs
thereof; and
(iv) after the occurrence and during the continuance of any
Event of Default (a) to sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (b) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any thereof and to enforce any other right in respect
of any Collateral; (c) to defend any suit, action or proceeding brought against
such Company with respect to any Collateral; (d) to settle, compromise or
adjust any suit, action or proceeding described in the preceding clause and, in
connection therewith, to give such discharges or releases as the Collateral
Agent may deem necessary or commercially reasonable under the circumstances;
and (e) generally, to sell or transfer and make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Collateral Agent were the absolute owner thereof for all purposes, and to
do, at the Collateral Agent's option and such Company's expense, at any time,
or from time to time, all acts and things which the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the Liens of
the Collateral Agent and the other Secured Parties thereon and to effect the
intent of this Security Agreement, all as fully and effectively as such Company
might do; and
(v) after the occurrence and during the continuance of an Event
of Default, at any time and from time to time, to execute, in connection with
any foreclosure, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
Each Company hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable.
Each Company hereby acknowledges and agrees that in acting pursuant
to this power-of-attorney the Collateral Agent shall be acting in its own
interest and in the interest of the other Secured Parties, and each Company
acknowledges and agrees that the Collateral Agent shall have no fiduciary
duties to any Company and each Company hereby waives any claims to the rights
of a beneficiary of a fiduciary relationship hereunder.
(b) No Duty on the Part of Collateral Agent or Secured Parties.
The powers conferred on the Collateral Agent hereunder are solely to protect
the interests of the Collateral Agent and the other Secured Parties in the
Collateral and shall not impose any duty upon the Collateral Agent or any other
Secured Party to exercise any such powers. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to any
Company for any act or failure to act hereunder unless the same shall result
from the gross negligence or willful misconduct of such Person.
10. Remedies.
10.1 Rights and Remedies Generally. (a) If an Event of Default
shall occur and be continuing, then and in every such case, the Collateral
Agent shall have all the rights of a secured party under the UCC, shall have
all rights now or hereafter existing under all other applicable laws, and,
subject to any mandatory requirements of applicable law then in effect, shall
have all the rights set forth in this Security Agreement and all the rights set
forth with respect to the Collateral or this Security Agreement in any other
agreement between the parties. No enumeration of rights in this Section or
elsewhere in this Security Agreement or in any related document or other
agreement shall be deemed to in any way limit the rights of the Collateral
Agent as described in this Section.
(b) If an Event of Default occurs and is continuing, the
Collateral Agent may, and within three Business Days after instructions from
the Majority Holders and the delivery of such indemnities from such Holders
against loss, liability or expense satisfactory to the Collateral Agent shall,
commence the taking of such actions toward collection or enforcement of this
Security Agreement and the Collateral (or any portion thereof), including,
without limitation, action toward foreclosure upon any Collateral, as the
Collateral Agent deems in its discretion to be appropriate or as otherwise
instructed by the Majority Holders.
10.2 Proceeds. (a) If an Event of Default shall occur and be
continuing, (i) all Proceeds and Distributions received by any Company
consisting of cash, checks and other near-cash items shall be held by such
Company in trust for the Collateral Agent and the other Secured Parties,
segregated from other funds of such Company in a separate deposit account
containing only Proceeds and Distributions, and shall forthwith upon receipt by
such Company, be turned over to the Collateral Agent in the same form received
by such Company (appropriately indorsed or assigned by such Company to the
order of the Collateral Agent or in such other manner as shall be satisfactory
to the Collateral Agent) and (ii) any and all such Proceeds and Distributions
received by the Collateral Agent (whether from a Company or otherwise), or any
part thereof, may, in the sole discretion of the Collateral Agent, be held by
the Collateral Agent in the Collateral Account as Collateral hereunder and/or
then or at any time or from time to time thereafter, be applied by the
Collateral Agent against the Secured Obligations (whether matured or
unmatured), in the order provided for herein.
(b) Except as otherwise provided in Section 10.3 of the
Indenture, the proceeds received by the Collateral Agent in respect of any sale
of, collection from or other realization upon all or any part of the Collateral
shall be applied, together with any other sums then held by the Collateral
Agent pursuant to this Security Agreement (including, without limitation, sums
credited to the Collateral Account), promptly by the Collateral Agent as
follows:
First, to the payment of all costs and expenses, commissions and
taxes of such sale, collection or other realization, including, without
limitation, compensation to the Collateral Agent and its agents and counsel,
and all expenses, liabilities and advances made or incurred by the Collateral
Agent in connection therewith;
Second, to the payment of all other costs and expenses of such
sale, collection or other realization, including, without limitation,
compensation to the Secured Parties and their agents and counsel and all costs,
liabilities and indebtedness made or incurred by the Secured Parties in
connection therewith;
Third, to the payment of the remaining outstanding Secured
Obligations to the Trustee under the Indenture for application in accordance
with the Indenture;
Fourth, (i) if the Secured Obligations have not been paid and
performed in full, the Collateral Agent shall deposit such surplus in the
Collateral Account or (ii) if the Secured Obligations have been paid and
performed in full, the Collateral Agent shall pay such surplus to Terex for
distribution to the Companies entitled thereto, or its successors or assigns,
or to whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
10.3 Direct Companies to Dispose of Collateral. If an Event of
Default shall occur and be continuing:
(a) the Collateral Agent may direct one or more of the
Companies to sell, assign or otherwise liquidate or dispose of all or from time
to time any portion of the Collateral, and each Company so directed shall do
so. The Collateral Agent may direct any Company to direct that all Proceeds of
such Collateral be paid directly to the Collateral Agent or may permit the
Proceeds of such Collateral to be paid to such Company and all such Proceeds
consisting of cash, checks, or near-cash items shall be held by such Company in
trust for the Collateral Agent, segregated from other funds of such Company in
a separate deposit account containing only Proceeds and shall forthwith upon
receipt by such Company, be turned over to the Collateral Agent, in the same
form received by such Company (appropriately indorsed or assigned by such
Company to the order of the Collateral Agent or in such other manner as shall
be satisfactory to the Collateral Agent); and
(b) any and all such Proceeds received by the Collateral Agent
(whether from a Company or otherwise) may, in the sole discretion of the
Collateral Agent, be held by the Collateral Agent in the Collateral Account as
Collateral hereunder and/or then or at any time or from time to time
thereafter, be applied by the Collateral Agent against the Secured Obligations
(whether matured or unmatured) in the order provided for herein.
10.4 Collateral Account. If an Event of Default shall occur and be
continuing, the Collateral Agent may liquidate any investments, instruments and
securities credited to the Collateral Account (without any liability for any
losses sustained in such liquidation) and apply the proceeds thereof and any
other amounts credited to the Collateral Account to the Secured Obligations
(whether matured or unmatured) in the order provided for herein.
10.5 Possession of Collateral.
(a) If an Event of Default shall occur and be continuing, and
subject to mandatory provisions of applicable law, (i) the Collateral Agent
may, personally or by agents or attorneys, immediately take possession of the
Collateral or any part thereof, from any one or more Companies or any other
Person who then has possession of any part thereof with or without notice or
judicial process, and for that purpose may enter upon any Company's premises
where any of the Collateral is located and remove the same and may use in
connection with such removal any and all services, supplies, aids and other
facilities of each Company and (ii) upon 15 days' notice to any Company, such
Company shall, at its own expense, assemble the Collateral (or from time to
time any portion thereof) and make it available to the Collateral Agent at any
place or places designated by the Collateral Agent, whether at such Company's
or the Collateral Agent's premises or elsewhere. Each Company shall, at its
sole expense, store and keep any Collateral so assembled at such place or
places pending further action by the Collateral Agent and while the Collateral
shall be so stored and kept, provide such guards and maintenance services as
shall be necessary to protect the same and to preserve and maintain the
Collateral in good condition. Each Company's obligation so to assemble and
deliver the Collateral is of the essence of this Security Agreement and,
accordingly, upon application to a court of equity having jurisdiction, the
Collateral Agent shall be entitled to a decree requiring specific performance
by any Company of said obligation.
(b) When Collateral is in the Collateral Agent's possession,
(i) each Company shall pay (or reimburse the Collateral Agent on demand for)
all out-of-pocket expenses (including the cost of any insurance and payment of
taxes or other charges) reasonably incurred in the custody, preservation, use
or operation of the Collateral, and the obligation to reimburse all such
expenses shall be secured hereby and (ii) the risk of accidental loss or damage
to the Collateral shall be on the Companies to the extent of any deficiency in
any effective insurance coverage.
10.6 Disposition of the Collateral. If an Event of Default shall
occur and be continuing, the Collateral Agent may sell, assign, lease, give an
option or options to purchase or otherwise dispose of the Collateral (or
contract to do any of the foregoing) under one or more contracts or as an
entirety, and without the necessity of gathering at the place of sale of the
property to be sold, at public or private sale or sales, conducted by any
officer, nominee or agent of, or auctioneer or attorney for the Collateral
Agent at any location of any third party conducting or otherwise involved in
such sale or any office of the Collateral Agent or any other Secured Party or
elsewhere and in general in such manner, at such time or times and upon such
terms and conditions and at such price as it may consider commercially
reasonable, for cash or on credit or for future delivery without assumption of
any credit risk. The Collateral Agent may in its discretion restrict
prospective bidders as to their number, nature of their business and investment
intention. Any of the Collateral may be sold, leased, assigned or options or
contracts entered to do so, or otherwise disposed of, in the condition in which
the same existed when taken by the Collateral Agent or after any overhaul or
repair which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other
private proceeding shall be made upon not less than 10 days' written notice to
the affected Company (which such Company agrees to be commercially reasonable)
specifying the time after which such disposition is to be made and the intended
sale price or other consideration therefor. Any such disposition which shall
be a public sale shall be made upon not less than 10 days' written notice to
the affected Company (which such Company agrees to be commercially reasonable)
specifying the time and place of such sale and, in the absence of applicable
requirements of law to the contrary, shall be by public auction (which may, at
the Collateral Agent's option, be subject to reserve), after publication of
notice of such auction for not less than ten days prior thereto in two
newspapers in general circulation in New York City. To the extent permitted by
applicable law, the Collateral Agent and/or any other Secured Party may bid for
and become purchasers of the Collateral or any item thereof, offered for sale
in accordance with this Section without accountability to the affected Company
(except to the extent of surplus money received) as provided below. In the
payment of the purchase price of the Collateral, the purchaser shall be
entitled to have credit on account of the purchase price thereof of amounts
owing to such purchaser on account of any obligations of the affected Company
to it and any such purchaser may deliver notes, claims for interest, or claims
for other payment with respect to such obligations in lieu of cash up to the
amount which would, upon distribution of the net proceeds of such sale, be
payable thereon. Such notes, if the amount payable hereunder shall be less
than the amount due thereon, shall be returned to the holder thereof after
being appropriately stamped to show partial payment. Notwithstanding the
foregoing, if the Collateral or any portion thereof is perishable or threatens
to decline speedily in value or is of a type customarily sold in a recognized
market, no notice of disposition shall be required.
10.7 Voting of Pledged Securities etc. If an Event of Default under
Section 6.1(1) or (2) of the Indenture shall occur and be continuing or if any
other Event of Default shall occur and be continuing and the obligations of
Terex under the Indenture and the Notes shall have been accelerated pursuant to
Section 6.2 of the Indenture with respect to such other Event of Default, (a)
the Collateral Agent shall be entitled to exercise all voting, corporate and
other rights pertaining to all or any portion of the Pledged Securities at any
meeting of the shareholders of the issuer thereof or otherwise pursuant to the
irrevocable proxy granted to it by each Company herein and (b) the Collateral
Agent may register all or any portion of the Pledged Securities in the name of
the Collateral Agent or its nominee, and the Collateral Agent or its nominee
may thereafter exercise (i) all voting, corporate and other rights pertaining
to such Pledged Securities at any meeting of shareholders of the issuer thereof
or otherwise and (ii) any and all rights of conversion, exchange, subscription
and any other rights, privileges or options pertaining to such Pledged
Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of such Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of the issuer thereof, or
upon the exercise by the affected Company or the Collateral Agent of any right,
privilege or option pertaining to such Pledged Securities, and in connection
therewith, the right to deposit and deliver any and all of such Pledged
Securities with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as it may determine), all
without liability except to account for property actually received by it, but
the Collateral Agent shall have no duty to any Company to exercise any such
right, privilege or option and shall not be responsible for any failure to do
so or delay in so doing.
10.8 Registration Rights; Private Sales.
(a) If the Collateral Agent shall determine to exercise its
rights to sell any or all of the Pledged Securities pursuant to this Section
10, and if in the opinion of the Collateral Agent it is necessary or advisable
to have the Pledged Securities, or that portion thereof to be sold, registered
under the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), each Company will use its best efforts to cause the issuer thereof to
(i) execute and deliver, and cause the directors and officers of the issuer
thereof to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts as may be, in the reasonable opinion of
the Collateral Agent, necessary to register the Pledged Securities, or that
portion thereof to be sold, under the provisions of the Securities Act, (ii) to
use its best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the Pledged Securities, or that portion thereof
to be sold, and (iii) to make all amendments thereto and/or to the related
prospectus which, in the opinion of the Collateral Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable
thereto. Each Company agrees to cause such issuer to comply with the
provisions of the securities or "Blue Sky" laws of any and all jurisdictions
which the Collateral Agent shall designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) which will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) Each Company recognizes that the Collateral Agent may be
unable to effect a public sale of any or all the Pledged Securities, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Company acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged
Securities for the period of time necessary to permit the issuer to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if the issuer thereof would agree to do so.
(c) Each Company further agrees to use its best efforts to do
or cause to be done all such other acts as may be reasonably necessary to make
such sale or sales of all or any portion of the Pledged Securities pursuant to
this Section 10.8 valid and binding and in compliance with any and all other
applicable requirements of law. Each Company further agrees that a breach of
any of the covenants contained in this Section 10.8 will cause irreparable
injury to the Collateral Agent and the other Secured Parties, that the
Collateral Agent and the other Secured Parties have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant
contained in this Section 10.8 shall be specifically enforceable against each
Company, and each Company hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred.
10.9 Provisions Regarding Receivables.
(a) Anything herein to the contrary notwithstanding (including
without limitation the grant of any rights to the Collateral Agent), each
Company shall remain liable under each of each Receivables to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise to
each such Receivable. Neither the Collateral Agent nor any Secured Party shall
have any obligation or liability under any Receivable (or any agreement giving
rise thereto) by reason of or arising out of this Security Agreement or the
receipt by the Collateral Agent or any of the Secured Parties of any payment
relating to such Receivable pursuant hereto, nor shall the Collateral Agent or
any of the Secured Parties be obligated in any manner to perform any of the
obligations of any Company under or pursuant to any Receivable (or any
agreement giving rise thereto) to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto), to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.
(b) At any time after an Event of Default shall have occurred
and be continuing (but subject to the terms of any Subordination Agreement),
the Collateral Agent may, and upon request of the Collateral Agent any Company
shall, notify Account Debtors that the Receivables have been assigned to the
Collateral Agent and that payments in respect thereof shall be made directly to
the Collateral Agent. The Collateral Agent may in its own name or in the name
of others communicate with Account Debtors to verify with them to its
satisfaction the existence, amount and terms of any Receivables.
(c) If required by the Collateral Agent at any time that an
Event of Default shall have occurred and be continuing (but subject to the
terms of any Subordination Agreement), any payments of Receivables, when
collected by any Company, shall be forthwith (and, in any event, within two
Business Days) delivered by such Company to the Collateral Agent in the exact
form received, duly indorsed by such Company to the Collateral Agent if
required, for deposit in the Collateral Account, and, until so turned over,
shall be held by such Company in trust for the Collateral Agent and the Secured
Parties, segregated from other funds of such Company. All such Proceeds, while
held by the Collateral Agent (or by any Company in trust for the Collateral
Agent and the Secured Parties), shall continue to be Collateral securing for
all of the Secured Obligations and shall not constitute payment thereof until
applied as hereinafter provided.
10.10 Recourse. Each Company shall remain liable for any deficiency
if the proceeds of any sale or other disposition of the Collateral are
insufficient to satisfy the Secured Obligations.
10.11 Expenses; Attorneys' Fees. Each Company shall reimburse the
Collateral Agent for all its reasonable out-of-pocket expenses in connection
with the exercise of its rights hereunder, including without limitation all
reasonable attorneys' fees and legal expenses incurred by the Collateral Agent
in connection therewith. Such out-of-pocket expenses including, without
limitation, all reasonable attorneys' fees and legal expenses shall constitute
Second Obligations secured by this Security Agreement.
10.12 Preventing Impairment of the Collateral. Regardless of
whether there shall have occurred any Event of Default, the Collateral Agent
may institute and maintain or cause in the name of one or more Companies or of
the Collateral Agent, or both, to be instituted or maintained, such suits and
proceedings as the Collateral Agent may be advised by counsel shall be
necessary to prevent any impairment of the Collateral in contravention of the
terms hereof of the Securities, of the Purchase Agreement or of the Indenture.
10.13 Limitation on Duties Regarding Preservation of Collateral.
(a) The Collateral Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to deal with
it in the same manner as the Collateral Agent deals with similar property for
its own account, it being understood that neither the Collateral Agent nor any
Secured Party shall have responsibility for (i) ascertaining or taking action
with respect to calls, conversations, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Collateral Agent or any
Secured Party has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral.
(b) The Collateral Agent shall have no obligation to take any
steps to preserve rights against prior parties to any Collateral.
(c) Neither the Collateral Agent nor any of its directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Company or otherwise and the rights of the Collateral
Agent and the other Secured Parties hereunder shall not be conditioned or
contingent upon the pursuit by the Collateral Agent or any other Secured Party
of any right or remedy against any Company or against any other Person which
may be or become liable in respect of all or any part of the Secured
Obligations or against any collateral security therefor, guarantee therefore or
right of offset with respect thereto.
10.14 Waiver of Claims. Except as otherwise provided in this
Security Agreement, EACH COMPANY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH ANY COMPANY
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Company hereby further waives, to the extent
permitted by law:
(a) all damages occasioned by such taking of possession except
any damages which are the sole and direct result of the Collateral Agent's
gross negligence or willful misconduct as determined in a final, non-appealable
judgment of a court of competent jurisdiction;
(b) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the Collateral
Agent's and the other Secured Parties' rights hereunder;
(c) demand of performance or other demand, notice of intent to
demand or accelerate, notice of acceleration presentment, protest,
advertisement or notice of any kind to or upon any Company or any other Person;
and
(d) all rights of redemption, appraisement, valuation,
diligence, stay, extension or moratorium now or hereafter in force under any
applicable law in order to hinder, prevent or delay the enforcement of this
Security Agreement or the absolute sale of the Collateral or any portion
thereof and each Company, for itself and all who may claim under it, insofar as
it or they now or hereafter lawfully may, hereby waives the benefit of all such
laws.
To the extent permitted by applicable law, any sale of, or the
exercise of any options to purchase, or any other realization upon, any
Collateral shall operate to divest all right, title, interest, claim and
demand, at law or in equity, of the affected Company therein and thereto, and
shall be a perpetual bar both at law and in equity against such Company and
against any and all persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, through and under such
Company.
10.15 Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy
under this Security Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Agent, then and in every
such case each Company, the Collateral Agent and the other Secured Parties
shall be returned to their former positions and rights hereunder with respect
to the Collateral subject to the security interest created under this Security
Agreement, and all rights, remedies and powers of the Collateral Agent shall
continue as if no such proceeding had been instituted.
10.16 Intellectual Property License. Solely for the purpose of
enabling the Collateral Agent to exercise rights and remedies under this
Section 10 and at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies, each Company hereby grants to the
Collateral Agent, to the extent it has the right to do so, an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to any Company), but subject to appropriate rights to quality
control and inspection in favor of such Company, to use, license or sublicense
any Trademark, Trademark License, Patent, Patent License, Copyright, Copyright
License or Trade Secret Collateral, and any license with respect to any of the
foregoing, now owned or hereafter acquired by such Company, and wherever the
same may be located.
11. Additional Collateral; etc. Without notice or consent of any
Company and without impairment of the security interest and rights created by
this Security Agreement, the Collateral Agent may accept from any person or
persons additional collateral or other security for the Secured Obligations.
The creation of the security interest created hereunder shall not prevent the
Collateral Agent from resorting to such additional collateral or security
without affecting the Collateral Agent's rights hereunder. The Collateral
Agent's acceptance of any such additional collateral or security shall not
prevent the Collateral Agent from resorting to the Collateral without affecting
the Collateral Agent's rights in and to such additional collateral or security.
12. Compensation and Indemnification.
12.1 Compensation. Each Company jointly and severally agrees to pay
to the Collateral Agent from time to time reasonable compensation for its
services. The Collateral Agent's compensation shall not be limited by any law
on compensation of a collateral agent pursuant to a security agreement.
12.2 Indemnity, etc.
(a) Each Company jointly and severally agrees to indemnify,
reimburse and hold the Collateral Agent and each other Secured Party, and their
respective officers, directors, employees, representatives, attorneys and
agents (hereinafter in this Section 12 referred to individually as "Indemnitee"
and collectively as "Indemnitees") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements (including, without
limitation, reasonable attorneys' fees and expenses) (for the purposes of this
Section the foregoing are collectively called "expenses") of whatsoever kind or
nature which may be imposed on, asserted against or incurred by any of the
Indemnitees in any way relating to or arising out of the Security Documents or
the documents executed in connection therewith or in any other way connected
with the administration of the transactions contemplated thereby or the
enforcement of any of the terms of or the preservation of any rights hereunder,
or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, financing,
possession, operation, condition, sale, return or other disposition or use of
the Collateral (including, without limitation, latent or other defects, whether
or not discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or for
property damage) or any contract claim; provided that no Indemnitee shall be
indemnified pursuant to this section for expenses to the extent solely caused
by the gross negligence or wilful misconduct of such Indemnitee as determined
in a final, non-appealable judgment of a court of competent jurisdiction. Each
Company agrees that upon written notice by any Indemnitee of any assertion that
could give rise to an expense, such Company shall, if so requested by such
Indemnitee, assume full responsibility for the defense thereof.
(b) Without limiting the application of subsection (a) above,
each Company jointly and severally agrees to pay, or reimburse the Collateral
Agent for any and all reasonable out-of-pocket fees, costs and expenses of
whatever kind or nature incurred in connection with the creation, preservation
or protection of the Collateral Agent's Liens on, and security interest in, the
Collateral and the acceptance or administration or performance by the
Collateral Agent of its duties under the Security Documents, including, without
limitation, all fees and taxes in connection with the search of the records of,
and the recording or filing of instruments and documents in, public offices,
payment or discharge of any taxes or Liens upon or in respect of the
Collateral, premiums for insurance with respect to the Collateral and all other
reasonable out-of-pocket fees, costs and expenses in connection with
protecting, maintaining or preserving the Collateral and the Collateral Agent's
interest therein, whether through judicial proceedings or otherwise, or in
defending or prosecuting any actions, suits or proceedings arising out of or
relating to the Collateral.
(c) Without limiting the application of subsections (a) or (b),
above, each Company jointly and severally agrees to pay, indemnify and hold
each Indemnitee harmless from and against any expenses which such Indemnitee
may suffer, expend or incur in consequence of or growing solely out of any
misrepresentation by any Company and reliance thereon in this Security
Agreement or in any statement or writing contemplated by or made or delivered
pursuant to or in connection with this Security Agreement.
(d) If and to the extent that the obligations of any Company
under this Section 12 are unenforceable for any reason, each Company hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
12.3 Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Secured Obligations secured by the Collateral.
The indemnity obligations of the Companies contained in this Security
Agreement shall continue in full force and effect notwithstanding the full
payment and performance of the Secured Obligations and notwithstanding the
discharge thereof.
13. Governing Law; Submission to Jurisdiction. THIS SECURITY
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH
COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH
COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. EACH COMPANY IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH COMPANY AT
ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
NOTHING SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY COMPANY IN ANY OTHER JURISDICTION.
14. Limitation of Liability. No claim may be made by any Company or
any other Person against the Collateral Agent or any other Secured Party or the
affiliates, directors, officers, employees, attorneys or agent of any of them
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by the Security Documents, or any act,
omission or event occurring in connection therewith except that the same may be
determined by a final, non-appealable judgment of a court of competent
jurisdiction to have resulted solely from such Person's actions taken in bad
faith; and each Company hereby waives, releases and agrees not to xxx upon any
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor. Each Company hereby agrees to indemnify the
Collateral Agent, each Secured Party and their affiliates, directors, officers,
employees, attorneys and agents for all of their costs and expenses (including
the attributed costs of internal counsel) incurred in connection with defending
any claim made by any Company or any other Person against any of them for any
special, indirect, consequential or punitive damages if in a final,
non-appealable judgment a court of competent jurisdiction does not award such
special, indirect, consequential or punitive damages or, if such damages are
awarded, the court does not determine that such person took actions in bad
faith. In performing its duties under the Security Documents, the Collateral
Agent shall be entitled to all of the powers, privileges and protections
afforded to the Trustee under the Indenture, including, without limitation, the
provisions contained in Article 7 thereof.
15. Notices. Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by facsimile, telex, or cable
communication), in the case of each party hereto, at its address specified
opposite its signature below, or to such other address as may be designated by
any party in a written notice to the other party hereto, provided that notices
and communications to the Collateral Agent shall not be effective until
received by the Collateral Agent. All such notices, requests and demands shall
be deemed to have been duly given: when delivered by hand, if personally
delivered; one business day after being timely delivered to a next-day air
courier; five business days after being deposited in the mail, postage prepaid,
if mailed; when answered back if telexed; and when receipt is confirmed, if
sent by facsimile.
16. Successors and Assigns. This Security Agreement shall be
binding upon and inure to the benefit of each Company, the Collateral Agent,
the other Secured Parties, all future Holders of the Secured Obligations and
their respective successors and assigns, except that no Company may assign or
transfer any of its rights or obligations under this Security Agreement without
the prior written consent of the Collateral Agent and each other Secured Party.
17. Waivers and Amendments. None of the terms or provisions of this
Security Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Article 9 of the Indenture.
18. No Waiver; Remedies Cumulative. No failure or delay on the part
of the Collateral Agent in exercising any right, power or privilege hereunder
and no course of dealing between any Company and the Collateral Agent shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by
the Collateral Agent of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Collateral Agent
would otherwise have on any future occasion. The rights and remedies herein
expressly provided are cumulative, may be exercised singly or concurrently and
as often and in such order as the Collateral Agent deems expedient and are not
exclusive of any rights or remedies which the Collateral Agent would otherwise
have whether by agreement or now or hereafter existing under applicable law.
No notice to or demand on any Company in any case shall entitle any Company to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Collateral Agent to any other or
further action in any circumstances without notice or demand.
19. Termination; Release. When the Secured Obligations have been
finally paid and performed in full, this Security Agreement shall terminate,
and the Collateral Agent, at the request and sole expense of the Companies,
will execute and deliver to the Companies the proper instruments (including
Uniform Commercial Code termination statements) acknowledging the termination
of this Security Agreement, and will duly assign, transfer and deliver to the
Companies, without recourse, representation or warranty of any kind whatsoever,
such of the Collateral as may be in possession of the Collateral Agent and has
not theretofore been disposed of, applied or released.
20. Counterparts. This Security Agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
21. Headings Descriptive. The headings in this Security Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning of this Security Agreement.
22. Marshalling. Neither the Collateral Agent nor any other Secured
Party shall be under any obligation to xxxxxxxx any assets in favor of any
Company or any other Person or against or in payment of any or all of the
Secured Obligations.
23. Severability. If any term, provision, covenant or restriction
of this Security Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
24. Survival. All indemnities set forth herein shall survive the
execution and delivery of this Security Agreement and the making and repayment
of the Secured Obligations.
25. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
26. Authority of Collateral Agent. Each Company acknowledges that
the rights and responsibilities of the Collateral Agent under this Security
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall, as between the Collateral Agent and the
other Secured Parties, be governed by the Indenture and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Collateral Agent and the Companies, the Collateral Agent shall
be conclusively presumed to be acting as agent for the Secured Parties with
full and valid authority so to act or refrain from acting, to the extent it has
the right to do so and no Company shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
27. Waiver. To the extent permitted by applicable law, each Company
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Secured Obligations and this Security Agreement and
any requirement that the Collateral Agent protect, secure, perfect or insure
any security interest or any property subject thereto or exhaust any right or
take any action against any Company or any other person or entity.
28. Obligations Absolute. The liability and obligations of each
Company hereunder shall be absolute and unconditional in accordance with its
terms and shall remain in full force and effect without regard to, and shall
not be released, suspended, discharged, terminated or otherwise affected by,
any circumstance or occurrence whatsoever, including, without limitation: (a)
any change in the time, place or manner of payment of, or in any other term of,
all or any of the Secured Obligations, (b) any waiver, indulgence, renewal,
extension, amendment or modification of or addition, consent or supplement to
or deletion from or any other action or inaction under or in respect of the
Indenture, the Securities, the Purchase Agreement, any Transaction Security
Document, any Mortgage or any document, instrument or agreement relating to the
Secured Obligations or any other instrument or agreement referred to therein
(collectively, the "Subject Documents") or any assignment or transfer of any
thereof; (c) any lack of validity or enforceability of any of the Subject
Documents or any assignment or transfer of any thereof; (d) any furnishing of
any additional security to the Secured Parties or their assignees or any
acceptance thereof or any release of any security by the Secured Parties, or
their assignees; (e) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or unenforceability,
in whole or in part, of any such instrument or agreement or any term thereof;
(f) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to any Company or
Terex or any other Person, or any action taken with respect to this Security
Agreement by any trustee or receiver, or by any court, in any such proceeding,
whether or not any Company shall have notice or knowledge of any of the
foregoing; (g) any exchange, release or nonperfection of any other collateral,
or any release, or amendment or waiver of or consent to departure from any
guarantee or security, for all or any of the Secured Obligations; or (h) any
other circumstance which might otherwise constitute a defense available to, or
a discharge of, any Company.
29. Limitation on Secured Party Rights. Each Company and the
Collateral Agent, on behalf of the Secured Parties, hereby confirm that it is
the intention of all such parties that the granting of Liens by each Company
pursuant to the terms hereof not constitute a fraudulent transfer or conveyance
for purposes of any Federal or state law. To effectuate the foregoing
intention, the Collateral Agent, on behalf of the Secured Parties, irrevocably
agrees that the obligations of each Company hereunder shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Company and to any collections from or payments made by or
on behalf of any other Company in respect of the obligations of such other
Company hereunder, result in the obligations of such Company hereunder not
constituting a fraudulent conveyance or fraudulent transfer under Federal or
state law.
IN WITNESS WHEREOF, each Company and the Collateral Agent have caused
this Security Agreement to be duly executed and delivered as of the date first
above written.
COMPANIES:
CMH ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
CLARKLIFT OF WESTERN MICHIGAN, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
XXXXX MATERIAL HANDLING COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
CMH ACQUISITION INTERNATIONAL CORP.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
KOEHRING CRANES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
TEREX CRANES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
LEGRIS INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
PPM CRANES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary
Address for Notices for each Company:
c/o: Terex Corporation
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telex:
Facsimile: 000-000-0000
COLLATERAL AGENT: UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Vice President
Address for Notices:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Division and Agency
Telex:
Facsimile: 212-852-1625
Schedules
Schedule I Filing Offices
Schedule II Pledged Securities
Schedule III Chief Executive Offices and Inventory and
Equipment Locations
Schedule IV Inventory in Possession of Bailee
Schedule V Trade Names
Schedule VI Intellectual Property Collateral
Item A: Copyrights
Item B: Copyright Licenses
Item C: Patents
Item D: Patent Licenses
Item E: Trademarks
Item F: Trademark Licenses
Item G: Trade Secret Collateral
Item H: Intellectual Property Collateral Matters
Schedule VII Working Capital Collateral
Exhibits
Exhibit A Transaction Security Documents
