AMENDMENT NO. 2, WAIVER and AGREEMENT

 

                                                                EXECUTION COPY

 

 

               AMENDMENT   NO. 2,   WAIVER and   AGREEMENT   dated as of October 15,

          2005 (this   "Waiver"),   to the AMENDED AND RESTATED   CREDIT   AGREEMENT

          dated as of July 3, 2002,   as amended by Amendment No. 1 and Agreement

          dated as of November 25, 2003 (as so amended, the "Credit Agreement"),

          among TEREX CORPORATION,   a Delaware corporation ("Terex"),   NEW TEREX

          HOLDINGS UK LIMITED,   a limited   company   organized   under the laws of

          England   (the   "Scottish   Borrower"),   TEREX   INTERNATIONAL   FINANCIAL

          SERVICES   COMPANY,   a company organized under the laws of the Republic

          of   Ireland   (the   "European   Borrower"),    POWERSCREEN   INTERNATIONAL

          LIMITED,    a    company    organized    under    the    laws    of    England

          ("Powerscreen"), TEREX CRANES FRANCE S.A.S., a company organized under

          the laws of the Republic of France formerly named P.P.M.   S.A.S.   (the

          "French   Borrower"),    TEREX   MINING   AUSTRALIA   PTY   LTD,   a   company

          organized    under   the   laws   of   New   South   Wales,    Australia   (the

          "Australian   Borrower"),   TEREX   GERMANY GMBH & CO. KG, a   partnership

          founded under the laws of the Federal Republic of Germany (the "German

          Borrower"),   and TEREX ITALIA S.R.L.,   a company   organized   under the

          laws of the Republic of Italy (the "Italian   Borrower"   and,   together

          with Terex, the Scottish Borrower, the European Borrower, Powerscreen,

          the French Borrower,   the Australian Borrower and the German Borrower,

          the   "Borrowers"),   the Lenders (as defined in Article I of the Credit

           Agreement),   the Issuing   Banks (as defined in Article I of the Credit

          Agreement)   and CREDIT SUISSE   (formerly   known as Credit Suisse First

          Boston),    as    administrative    agent    (in    such    capacity,     the

          "Administrative Agent") and as collateral agent (in such capacity, the

          "Collateral Agent") for the Lenders.

 

     A. Pursuant to the Credit Agreement, the Lenders and the Issuing Banks have

extended,   and have   agreed to   extend,   credit to the   Borrowers,   in each case

pursuant   to the terms and   subject   to the   conditions   set forth in the Credit

Agreement.

 

     B. Terex has informed the Administrative   Agent that it will not furnish to

the   Administrative   Agent, in compliance with Sections 5.04(a),   (b) and (c) of

the Credit Agreement,   the consolidated and consolidating   financial   statements

with respect to the year ended   December   31, 2004 and the quarters   ended March

31,   2005,   June 30,   2005 and   September   30,   2005,   accompanied   by the audit

opinion,   accountants'   certificate and officer's   certificate   required by such

Sections   (collectively,   the "Financial   Statements and Certificates"),   at the

times required by such Sections.

 

     C.   Terex has also   informed   the   Administrative   Agent that it intends to

restate   (the   "Restated    Financial    Statements")    its    historical    audited

 

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consolidated   financial   statements for the years ended December 31, 2000, 2001,

2002 and 2003 (the "Affected Financial Statements").

 

     D. In connection with the foregoing,   the Borrowers have requested that the

Requisite   Lenders (as defined   below)   waive,   through   February 15, 2006,   (i)

compliance by the Borrowers   with   Sections   5.04(a),   (b) and (c) of the Credit

Agreement   and (ii) any Defaults or Events of Default that may arise solely as a

result of (x) the   failure to deliver or file in a timely   manner the   Financial

Statements and Certificates or (y) the failure of any representation or warranty

contained   in the   Credit   Agreement   and   relating   to the   Affected   Financial

Statements to be correct when made or deemed made.

 

     E. The Borrowers have also   requested   that the Requisite   Lenders agree to

amend the Credit Agreement as set forth herein.

 

     F. The Requisite Lenders are willing to grant such waivers, and to agree to

such   amendment,   in each case on the terms and   subject to the   conditions   set

forth herein.

 

     G.   Capitalized   terms used but not defined   herein shall have the meanings

assigned to them in the Credit Agreement.

 

     Accordingly, in consideration of the mutual agreements herein contained and

other good and valuable consideration,   the sufficiency and receipt of which are

hereby acknowledged, the parties hereto agree as follows:

 

     SECTION 1.   Waivers.   (a)   Subject to Section 2 below,   pursuant to Section

9.08(b) of the Credit   Agreement,   the Requisite   Lenders hereby waive,   through

February 15, 2006, (i) compliance by the Borrowers   with Sections   5.04(a),   (b)

and (c) of the Credit   Agreement   and (ii) any Default or Event of Default   that

may arise   under the Credit   Agreement   solely as a result of (x) the failure of

Terex to deliver or file the Financial   Statements and   Certificates   (including

any Default   arising under   Article   VII(f) of the Credit   Agreement   unless and

until the holders of any   Indebtedness   referred to in such Article VII(f) shall

take any   action to cause   such   Indebtedness   to become due prior to its stated

maturity) or (y) the failure of any   representation or warranty contained in the

Credit Agreement and relating to the Affected Financial Statements to be correct

when made or deemed made.

 

     (b) In no way shall the waiver set forth in Section   1(a)   hereof be deemed

to be a   waiver   of   any   matter   disclosed   in   the   Financial   Statements   and

Certificates or the Restated Financial Statements upon delivery.

 

     SECTION 2. Waiver Termination. The waivers set forth in Section 1(a) hereof

shall remain in effect through and including February 15, 2006, after which time

such waivers shall   automatically   terminate and be of no further force, and all

rights and remedies with respect to the matters set forth in Section 1(a) hereof

of the   Administrative   Agent,   the   Collateral   Agent and the Lenders under the

 

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Credit   Agreement and any other Loan Document shall,   without any further action

by any   person,   automatically   be   reinstated   as if the   waivers   set forth in

Section 1(a) hereof had not become effective.

 

     SECTION 3.   Representations   and   Warranties.   To induce the other   parties

hereto to enter into this Waiver, each of the Borrowers   represents and warrants

to the Administrative Agent, the Collateral Agent, the Issuing Banks and each of

the Lenders that:

 

     (a) This Waiver has been duly authorized,   executed and delivered by it and

constitutes its legal, valid and binding   obligation,   enforceable in accordance

with its terms   except as such   enforceability   may be   limited   by   bankruptcy,

insolvency,    reorganization,    moratorium   or   other   similar   laws    affecting

creditors' rights generally and by general   principles of equity   (regardless of

whether such enforceability is considered in a proceeding at law or in equity).

 

     (b) After giving effect to this Waiver, the   representations and warranties

set forth in Article   III of the Credit   Agreement   are true and   correct in all

material   respects   on and as of the date   hereof with the same effect as though

made on and as of the date hereof, except to the extent such representations and

warranties expressly relate to an earlier date.

 

     (c) After giving effect to this Waiver,   no Default or Event of Default has

occurred and is continuing.

 

     SECTION 4. Effectiveness. This Waiver shall become effective as of the date

first set forth above on the date that the   following   conditions   are satisfied

(the "Waiver Effective Date"):

 

     (a) The   Administrative   Agent   shall have   received   counterparts   of this

Waiver that, when taken together, bear the signatures of (i) the Borrowers, (ii)

the Required   Lenders and (iii)   Revolving   Credit Lenders holding a majority of

the aggregate Revolving Credit Commitments (the "Requisite Lenders").

 

     (b) The Lenders   shall have   received   the Waiver Fee   payable   pursuant to

Section 7 of this Waiver.

 

     (c) The Administrative Agent shall have received the following:

 

           (i)   unaudited,    draft    consolidated    balance   sheets   and   related

     statements    of   income   and   cash   flows    ("Draft    Unaudited    Financial

     Statements")   showing the financial condition of Terex and its consolidated

     Subsidiaries as of and for (x) the fiscal year ended December 31, 2004, and

     (y) the fiscal quarters (and the   then-elapsed   portion of the fiscal year)

     ended March 31, 2005 and June 30, 2005; and

 

          (ii) a   certificate   of a Financial   Officer,   based on the   financial

     information derived from the Draft Unaudited Financial Statements delivered

     pursuant   to clause (i) above   (which   certificate   may note that the Draft

     Unaudited Financial Statements are not complete and are subject to change),

 

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     setting forth reasonably   detailed   calculations   demonstrating   compliance

     with Sections   6.10,   6.11,   6.12,   6.13 and 6.14 of the Credit   Agreement,

     including but not limited to a detailed   schedule of the calculation of Pro

     Forma Acquisition EBITDA and Total Debt for the periods and as of the dates

     referred to in clause (i) above, in a form   reasonably   satisfactory to the

     Administrative   Agent (any such