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GUARANTEE AGREEMENT dated as of March 6, 1998,
between TEREX CORPORATION, a Delaware corporation ("Terex"),
and CREDIT SUISSE FIRST BOSTON, a bank organized under the
laws of Switzerland, acting through its New York branch
("CSFB"), as collateral agent (the "Collateral Agent") for the
Secured Parties (as defined in the Credit Agreement referred
to below).
Reference is made to (a) the Credit Agreement dated as of March 6, 1998
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Terex, Terex Equipment Limited, a company organized under the
laws of Scotland, P.P.M. S.A., a company organized under the laws of the
Republic of France, Unit Rig (Australia) Pty. Ltd., a company organized under
the laws of New South Wales, and P.P.M. S.p.A., a company organized under the
laws of the Republic of Italy, the Lenders (as defined in Article I thereto),
the Issuing Banks (as defined in Article I thereto) and CSFB, as administrative
agent and as collateral agent for the Lenders and (b) the Guarantee Agreement
dated as of March 6, 1998 (as amended, supplemented or otherwise modified from
time to time, the "Subsidiary Guarantee Agreement") among the subsidiaries of
Terex listed on Schedule I thereto (the "Subsidiary Guarantors") and the
Collateral Agent. Capitalized terms used herein and not defined herein shall
have the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrowers, and the Issuing
Banks have agreed to issue Letters of Credit for the account of the Borrowers,
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. Each of the Subsidiary Borrowers is a wholly owned Subsidiary
of Terex and Terex acknowledges that it will derive substantial benefit from the
making of the Loans by the Lenders to the Subsidiary Borrowers, and the issuance
of the Letters of Credit for the account of the Subsidiary Borrowers by the
Issuing Banks. The obligations of the Lenders to make Loans to the Subsidiary
Borrowers and of the Issuing Banks to issue Letters of Credit for the account of
the Subsidiary Borrowers are conditioned on, among other things, the execution
and delivery by Terex of a Guarantee Agreement in the form hereof. As
consideration therefor and in order to induce the Lenders to make Loans to the
Subsidiary Borrowers and the Issuing Banks to issue Letters of Credit for the
account of the Subsidiary Borrowers, Terex is willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Terex unconditionally guarantees, as a primary
obligor and not merely as a surety, (a) the due and punctual payment of (i) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by any Borrower under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral and
(iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Loan Parties to the Secured
Parties under the Credit Agreement and the other Loan Documents, (b) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Loan Parties under or pursuant to the Credit Agreement and the other Loan
Documents and (c) all obligations of any Borrower, monetary or otherwise, under
each Hedging Agreement entered into with a counterparty that was a Lender (or an
Affiliate thereof) at the time such Hedging Agreement was entered into (all the
monetary and other obligations referred to in the preceding clauses (a) through
(c) being collectively called the "Obligations"). Terex further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation.
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SECTION 2. Obligations Not Waived. To the fullest extent permitted by
applicable law, Terex waives presentment to, demand of payment from and protest
to the Subsidiary Borrowers of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment. To the fullest
extent permitted by applicable law, the obligations of Terex hereunder shall not
be affected by (a) the failure of the Collateral Agent or any other Secured
Party to assert any claim or demand or to enforce or exercise any right or
remedy against any Subsidiary Borrower or any Subsidiary Guarantor under the
provisions of the Credit Agreement, the Subsidiary Guarantee Agreement, any
other Loan Document or otherwise, (b) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of this
Agreement, any other Loan Document, any Guarantee or any other agreement,
including with respect to any Subsidiary Guarantor under the Subsidiary
Guarantee Agreement or (c) the failure to perfect any security interest in, or
the release of, any of the security held by or on behalf of the Collateral Agent
or any other Secured Party.
SECTION 3. Security. Terex authorizes the Collateral Agent and each of
the other Secured Parties, to (a) take and hold security for the payment of this
Guarantee and the Obligations and exchange, enforce, waive and release any such
security, (b) apply such security and direct the order or manner of sale
thereof, in accordance with the terms of the Loan Documents, as they in their
sole discretion may determine and (c) release or substitute any one or more
endorsees, other guarantors of other obligors.
SECTION 4. Guarantee of Payment. Terex further agrees that its
guarantee constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Collateral Agent or
any other Secured Party to any of the security held for payment of the
Obligations or to any balance of any deposit account or credit on the books of
the Collateral Agent or any other Secured Party in favor of any Subsidiary
Borrower or any other person.
SECTION 5. No Discharge or Diminishment of Guarantee. The obligations
of Terex hereunder shall not be subject to any reduction, limitation, impairment
or termination for any reason (other than the indefeasible payment in full in
cash of the Obligations), including any claim of waiver, release, surrender,
alteration or compromise of any of the Obligations, and shall not be subject to
any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
Terex hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Collateral Agent or any other Secured Party to assert any claim
or demand or to enforce any remedy under the Credit Agreement, any other Loan
Document or any other agreement, by any waiver or modification of any provision
of any thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of Terex or that would
otherwise operate as a discharge of Terex as a matter of law or equity (other
than the indefeasible payment in full in cash of all the Obligations).
SECTION 6. Defenses of Subsidiary Borrowers Waived. To the fullest
extent permitted by applicable law, Terex waives any defense based on or arising
out of any defense of the Subsidiary Borrowers or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of any Subsidiary Borrower, other than the final payment in
full in cash of the Obligations. The Collateral Agent and the other Secured
Parties may, at their election, foreclose on any security held by one or more of
them by one or more judicial or nonjudicial sales, accept an assignment of any
such security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with any Subsidiary Borrower, any
Subsidiary Guarantor or any other guarantor or exercise any other right or
remedy available to them against any Subsidiary Borrower, any Subsidiary
Guarantor or any other guarantor, without affecting or impairing in any way the
liability of Terex hereunder except to the extent the Obligations have been
fully and finally paid in cash or otherwise satisfied pursuant to the terms of
the Loan Documents. Pursuant to applicable law, Terex waives any defense arising
out of any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or
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other right or remedy of Terex against any Subsidiary Borrower, any Subsidiary
Guarantor or any other guarantor, as the case may be, or any security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of the
foregoing and not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against Terex by virtue hereof,
upon the failure of any Subsidiary Borrower or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, Terex hereby promises to
and will forthwith pay, or cause to be paid, to the Collateral Agent or such
other Secured Party as designated thereby in cash the amount of such unpaid
Obligations. Upon payment by Terex of any sums to the Collateral Agent or any
Secured Party as provided above, all rights of Terex against any Subsidiary
Borrower arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior payment in full in cash
of all the Obligations. In addition, any indebtedness of any Subsidiary Borrower
now or hereafter held by Terex is hereby subordinated in right of payment to the
prior payment in full of the Obligations. If any amount shall erroneously be
paid to Terex on account of (i) such subrogation, contribution, reimbursement,
indemnity or similar right or (ii) any such indebtedness of any Subsidiary
Borrower, and if an Event of Default shall have occurred and be continuing, such
amount shall be held in trust for the benefit of the Secured Parties and shall
forthwith be paid to the Collateral Agent to be credited against the payment of
the Obligations, whether matured or unmatured, in accordance with the terms of
the Loan Documents.
SECTION 8. Information. Terex assumes all responsibility for being and
keeping itself informed of the Subsidiary Borrowers' financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that Terex assumes
and incurs hereunder, and agrees that none of the Collateral Agent or the other
Secured Parties will have any duty to advise Terex of information known to it or
any of them regarding such circumstances or risks.
SECTION 9. Representations and Warranties. INTENTIONALLY OMITTED
SECTION 10. Termination. The Guarantee made hereunder (a) shall
terminate when all the Obligations have been paid in full and the Lenders have
no further commitment to lend to any Subsidiary Borrowers under the Credit
Agreement, the L/C Exposure with respect to all Letters of Credit issued for the
account of any Subsidiary Borrower has been reduced to zero and the Issuing
Banks have no further obligation to issue Letters of Credit to any Subsidiary
Borrower under the Credit Agreement and (b) shall be reinstated if, at any time
after the Guarantee has terminated, payment, or any part thereof, of any
Obligation is rescinded or must otherwise be restored by any Secured Party or
any Subsidiary Guarantor upon the bankruptcy or reorganization of any Subsidiary
Borrower, any Subsidiary Guarantor, Terex or otherwise.
SECTION 11. Binding Effect; Several Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of Terex that are contained in this
Agreement shall bind and inure to the benefit of each party hereto and their
respective successors and assigns. This Agreement shall become effective as to
Terex when a counterpart hereof executed on behalf of Terex shall have been
delivered to the Collateral Agent, and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding upon
Terex and the Collateral Agent and their respective successors and assigns, and
shall inure to the benefit of Terex, the Collateral Agent and the other Secured
Parties, and their respective successors and assigns, except Terex shall not
have the right to assign its rights or obligations hereunder or any interest
herein (and any such attempted assignment shall be void).
SECTION 12. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
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power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the other Secured Parties under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by
Terex therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on Terex in any case shall entitle Terex to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
Terex and the Collateral Agent, with the prior written consent of the Required
Lenders (except as otherwise provided in the Credit Agreement).
SECTION 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. Notices. All communications and notices hereunder shall be
in writing and given as provided in Section 9.01 of the Credit Agreement.
SECTION 15. Survival of Agreement; Severability. (a) All covenants,
agreements, representations and warranties made by Terex herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other Secured Parties and
shall survive the making by the Lenders of the Loans to the Subsidiary Borrowers
and the issuance of the Letters of Credit for the account of the Subsidiary
Borrowers by the Issuing Banks regardless of any investigation made by the
Secured Parties or on their behalf, and shall continue in full force and effect
as long as the principal of or any accrued interest on any Loan to the
Subsidiary Borrowers or any other fee or amount payable under this Agreement or
any other Loan Document by the Subsidiary Borrowers is outstanding and unpaid or
the L/C Exposure with respect to Letters of Credit issued for the account of all
Subsidiary Borrowers does not equal zero and as long as the Commitments and the
L/C Commitments have not been terminated.
(b) In the event any one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 16. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract, and shall become effective as
provided in Section 11. Delivery of an executed signature page to this Agreement
by facsimile transmission shall be as effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 17. Rules of Interpretation. The rules of interpretation
specified in Section 1.02 of the Credit Agreement shall be applicable to this
Agreement.
SECTION 18. Jurisdiction; Consent to Service of Process. (a) Terex
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
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Agreement or the other Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against Terex or its
properties in the courts of any jurisdiction.
(b) Terex hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any New York
State or Federal court. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 14. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 19. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.
SECTION 20. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Secured Party is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other Indebtedness at any time owing by such Secured Party to
or for the credit or the account of Terex against any or all the obligations of
Terex now or hereafter existing under this Agreement and the other Loan
Documents held by such Secured Party, irrespective of whether or not such
Secured Party shall have made any demand under this Agreement or any other Loan
Document and although such obligations may be unmatured. The rights of each
Secured Party under this Section 20 are in addition to other rights and remedies
(including other rights of setoff) which such Secured Party may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
TEREX CORPORATION,
by
Name:
Title: Authorized Officer
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CREDIT SUISSE FIRST BOSTON, as
Collateral Agent,
by
Name:
Title:
by
Name:
Title: