As filed with the Securities and Exchange Commission on February 16, 1994.
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TEREX CORPORATION
(Exact name of Registrant as specified in its charter)

         Delaware                3550                   34-1531521
(State or other      (Primary standard industrial    (I.R.S.employer
jurisdiction of      classification code number)   identification no.)
incorporation or
organization)

                              500 Post Road East
                         Westport, Connecticut  06880
                                (203) 222-7008

(Address, including zip code, and telephone number,
including area code, of Registrants' principal executive offices)

Marvin B. Rosenberg, Esq.
TEREX CORPORATION
500 Post Road East
Westport, Connecticut 06880
(203) 222-7170
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copies To:

Robinson Silverman Pearce               Skadden, Arps, Slate, Meagher & Flom
     Aronsohn & Berman                  300 South Grand Avenue
1290 Avenue of the Americas             Los Angeles, California  90071
New York, New York  10104               Attention:  Michael A. Woronoff, Esq.
Attention:  Stuart A. Gordon, Esq.
            Eric I Cohen, Esq.

Approximate date of commencement of proposed sale to public: From time to time after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1993, check the following box: x

CALCULATION OF REGISTRATION FEE

                                         Proposed      Proposed
                                         Maximum       Maximum
Title of Each Class of       Amount      Offering      Aggregate   Amount of

Securities to be to be Price Offering Registration
Registered Registered per Share(1) Price (1) Fee

Common Stock Purchase 1,300,000 --(2) --(2) --(2)
Warrants

Common Stock, par value 3,900,000 $8.25 $32,175,000 $11,094.83
$.01 (3)

(1)Estimated solely for purposes of calculation of the registration fee. Pursuant to Rule 457(c), the offering price and registration fee are computed on the basis of the average of the high and low prices of the Common Stock on the New York Stock Exchange on February 10, 1994.

(2)Pursuant to Rule 457(g), no separate registration fee is required for the Common Stock Purchase Warrants when the Common Stock offered pursuant thereto is being registered for distribution in the same registration statement.

(3)Represents shares of Common Stock which may be purchased upon exercise of the Common Stock Purchase Warrants. Pursuant to Rule 416, there are also being registered such additional shares of Common Stock which may become issuable pursuant to the anti-dilution provisions of such Warrants.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

TEREX CORPORATION
Cross Reference Sheet

Pursuant to Item 501(b) of Regulation S-K Showing Location in Prospectus of Information Required by Items in Form S-1

1.   Forepart of Registration
   Statement and Outside Front
   Cover Page of Prospectus             Outside Front Cover Page of
                                         the Prospectus

2.   Inside Front and Outside Back
   Cover Pages of Prospectus            Inside Front and Outside Back
                                         Cover Pages of the
                                         Prospectus, Additional
                                         Information

3.   Summary Information/Risk Factors/
   Ratio of Earnings to Fixed
   Charges                              Prospectus Summary/Investment
                                         Considerations/Not Applicable

4.   Use of Proceeds                    Use of Proceeds

5.   Determination of Offering Price    Plan of Distribution

6.   Dilution                           Not Applicable

7.   Selling Security Holders           Selling Security Holders

8.   Plan of Distribution               Outside Front Cover Page of
                                         the Prospectus; Plan of
                                         Distribution

9.   Description of Securities to
   Be Registered                        Description of Securities

10.  Interests of Named Experts
      and Counsel                       Legal Matters; Auditors

11.  Information with Respect to
      the Registrant                    Outside Front Cover Page of
                                         the Prospectus; Prospectus
                                         Summary; The Company;
                                         Investment Considerations;
                                         Market for Common Stock and
                                         Dividend Policy;
                                         Capitalization; Selected
                                         Consolidated Financial Information;
                                         Management's Discussion and
                                         Analysis of Financial
                                         Condition and Results of
                                         Operations; Business;
                                         Principal Stockholders;
                                         Management; Certain
                                         Transactions; Description of
                                         Securities

12.  Disclosure of Commission
      Position on Indemnification
      for Securities Act Liabilities    Not Applicable

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED FEBRUARY 16, 1994
1,300,000 Warrants
3,900,000 Shares
TEREX CORPORATION
Common Stock Purchase Warrants and Common Stock

This Prospectus relates to the registration of (i) 1,300,000 common stock purchase warrants (the "Warrants") exercisable for shares of common stock, par value $.01 per share (the "Common Stock"), of Terex Corporation (the "Company") and (ii) the shares of Common Stock issuable upon exercise or redemption of the Warrants (the "Warrant Shares"). The Warrants were issued by the Company, together with 1,200,000 shares of the Company's Series A Cumulative Redeemable Convertible Preferred Stock, par value $.01 per share (the "Preferred Stock"), in a private placement effected on December 20, 1993. All of the Warrants and Warrant Shares are being registered for resale by the holders thereof (the "Selling Security Holders") and the Warrant Shares are also being registered for their issuance to the Selling Security Holders upon their exercise of the Warrants. See "Selling Security Holders." The Company will not receive any of the proceeds from the resale by the Selling Security Holders of the Warrants or the Warrant Shares. The Company will receive proceeds of $.01 per Warrant Share issued upon exercise of the Warrants.

The Warrants are not exercisable for Warrant Shares until the opening of business on the day following the date designated as the "Warrant Ratio Determination Date" by the Board of Directors of the Company, which date shall be a trading day during the 12 month period beginning on December 20, 1993 or, if no such date is designated, the last day of such 12 month period; provided, that if the Board of Directors has not yet designated a Warrant Ratio Determination Date and the Current Market Price (as defined under "Description of Securities--Warrants") of the Common Stock on any date during such 12 month period equals or exceeds $18.00, the "Warrant Ratio Determination Date" will be such date.

Following the Warrant Ratio Determination Date and until 5:00 p.m., New York time, on December 31, 2000 (unless earlier redeemed), each Warrant will entitle the holder to purchase, at an exercise price of $.01 per share, a number of Warrant Shares (the "Warrant Ratio") equal to (a) 3.0 Warrant Shares if the Current Market Price of a share of Common Stock on the Warrant Ratio Determination Date is $5.00 or less, (b) a number of Warrant Shares which decreases from 3.0 shares to 1.0 share with the increase in such Current Market Price from $5.00 to $18.00, if such Current Market Price is greater than $5.00 but less than $18.00, and (c) 1.0 Warrant Share if such Current Market Price is $18.00 or more. The Warrant Ratio is subject to increase upon the occurrence of certain events relating to the Company's obligation to effect the registration of the Warrants and the Warrant Shares. The Company has reserved 3,900,000 shares of Common Stock for issuance upon exercise of the Warrants, being the maximum number of shares that will initially be issuable following the Warrant Ratio Determination Date. Following the Warrant Ratio Determination Date, the Warrant Ratio is subject to adjustment upon the occurrence of certain dilutive events. See "Description of Securities -- Warrants."

The Warrants may be redeemed by the Company in whole, but not in part, at any time on or after the Warrant Ratio Determination Date, for a number of Warrant Shares equal to the Warrant Ratio on the date of redemption, if, concurrently with such redemption, the Company redeems all then outstanding shares of Preferred Stock.

The Common Stock is listed on the New York Stock Exchange (the "NYSE") under the trading symbol "TEX." On February 10, 1994, the closing price of the Common Stock on the NYSE was $8.25 per share. See "Market for Common Stock and Dividend Policy." The Warrant Shares have been approved for listing on the NYSE, subject to issuance.

Prior to this offering, there has been no public market for the Warrants. The Company does not intend to list the Warrants on any securities exchange or to seek approval for quotation of the Warrants through any automated quotation system. There can be no assurance that an active market for the Warrants will develop.

The Selling Security Holders directly, through agents designated from time to time, or through dealers or underwriters also to be designated, may sell the Warrants and Warrant Shares from time to time on terms to be determined at the time of sale through customary brokerage channels or private sales at market prices then prevailing or at negotiated prices then obtainable. To the extent required, the specific Warrants or Warrant Shares to be sold, names of the selling security holders, purchase price, public offering price, the names of any

(continued on next page)

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is _______, 1994.

such agent, dealer or underwriter, amount of expenses of the offering and any applicable commission or discount with respect to a particular offer will be set forth in an accompanying Prospectus Supplement. Each of the Selling Security Holders reserves the sole right to accept and, together with its agents from time to time, to reject in whole or in part any proposed purchase of Warrants or Warrant Shares to be made directly or through agents. See "Plan of Distribution" for indemnification arrangements among the Company and the Selling Security Holders.

For a discussion of certain matters which should be considered by prospective investors, see "Investment Considerations."

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith is required to file reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at its offices at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, New York, New York 10048 and at Northwestern Atrium Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60661-2511. Copies of such materials can be obtained by mail from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.

The Common Stock is listed on the NYSE and reports, proxy statements and other information concerning the Company may also be inspected at the NYSE. The Company has filed with the Commission a Registration Statement on Form S-1 under the Securities Act with respect to the Warrants and Warrant Shares offered hereby. The Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto, as permitted by the rules and regulations of the Commission. For further information with respect to the Company and the Warrants and Warrant Shares offered hereby, reference is made to the Registration Statement, including the exhibits thereto and the financial statements, notes and schedules filed as a part thereof, which may be inspected and copied at the public reference facilities of the Commission referred to above. Statements contained in this Prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance reference is made to the full text of such contract or document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference.

The Company furnishes stockholders with annual reports containing audited financial statements. The Company also furnishes its stockholders with proxy material for its annual meetings complying with the proxy requirements of the Exchange Act.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements and notes thereto appearing elsewhere in this Prospectus. Investors should carefully consider the information set forth under the caption "Investment Considerations."

The Company

Terex Corporation ("Terex" or the "Company") is a global provider of capital goods and equipment used in the mining, commercial building, infrastructure, manufacturing and construction industries. Through the Company's Heavy Equipment Segment, the Company designs, manufactures and markets heavy-duty, off-highway, earthmoving, construction, lifting, material handling and aerial lift equipment and related components and replacement parts. Through its Material Handling Segment, the Company is engaged in designing, manufacturing and marketing a complete line of internal combustion ("IC") and electric lift trucks, electric walkies, automated pallet trucks, industrial tow tractors and related components and replacement parts. Terex also owns an approximate 22.6% equity interest in Fruehauf Trailer Corporation ("Fruehauf"). Fruehauf designs, manufactures and markets truck trailers, making a wide range of van, refrigerated, platform, tank, dump trailer and other models, and related parts and accessories. See "The Company" and "Business."

The Offering

On December 20, 1993 (the "Issue Date"), the Company completed the private placement of (i) 1,300,000 common stock purchase warrants (the "Warrants") exercisable for shares of common stock, par value $.01 per share (the "Common Stock"), of the Company and (ii) 1,200,000 shares of the Company's Series A Cumulative Redeemable Convertible Preferred Stock (the "Preferred Stock"), to institutional investors for aggregate gross proceeds to the Company of $30.2 million. Jefferies & Company, Inc. ("Jefferies") was the placement agent for the sale of the Warrants and Preferred Stock. The Warrants were issued pursuant to the terms of a Warrant Agreement dated as of December 20, 1993 (the "Warrant Agreement") between the Company and Mellon Securities Trust Company, as Warrant Agent (the "Warrant Agent").

In connection with the sale of the Warrants, the Company and the purchasers of the Warrants entered into a Registration Rights Agreement dated as of December 20, 1993 (the "Warrant Registration Rights Agreement") relating to the Warrants and the shares of Common Stock issuable upon exercise or redemption of the Warrants (the "Warrant Shares"). Pursuant to the terms of the Warrant Registration Rights Agreement, the Company agreed to file the Registration Statement of which this Prospectus forms a part and is required to maintain the effectiveness of this Registration Statement until all Warrants and Warrants Shares have been sold pursuant to an effective registration statement or Rule 144 under the Securities Act.

Summary of Terms of the Warrants

Issuer                        Terex Corporation.
Issue                         Common Stock Purchase Warrants exercisable for
                              shares of Common Stock.  The  number of  Warrant
                              Shares   for   which   each   Warrant  will   be
                              exercisable  (the  "Warrant   Ratio")  will   be
                              determined as of the Warrant Ratio Determination
                              Date, as described below.
Aggregate Number of Warrants  1,300,000.
Expiration Date               The Warrants will expire at 5:00 p.m. New York
                              time  on  December  31,  2000  (unless   earlier
                              redeemed).
Optional Redemption           The Warrants will be redeemable upon not less
                              than  30  days  prior  written  notice  by   the
                              Company, in whole but not in part,  at any  time
                              on or after the Warrant Ratio Determination Date
                              (as described below); provided, that the Company
                              concurrently redeems all then outstanding shares
                              of  Preferred  Stock.    Each  Warrant  will  be
                              redeemable for a number of Warrant Shares  equal
                              to the Warrant Ratio on the date of redemption.
Warrant Ratio                 Each Warrant entitles the holder thereof to
                              purchase a number of Warrant Shares initially as
                              determined  below.   If for  the 30  consecutive
                              trading  days  ending  on   the  Warrant   Ratio
                              Determination Date, the  average closing  market
                              price per share of Common Stock is:
                              (i)  $5.00 per share or lower, each Warrant will
                              be exercisable for 3.0 Warrant Shares;
                              (ii)  between $5.00 and $18.00 per share, each
                              Warrant  will  be  exercisable for  a number  of
                              Warrant Shares which decreases  from 3.0  shares
                              to 1.0 share with the increase  in such  average
                              per  share closing  market price  from $5.00  to
                              $18.00; or
                              (iii)  $18.00 per share or greater, each Warrant
                              will be exercisable for 1.0 Warrant Share.
                              The Company shall give the holders of Warrants
                              written notice of the Warrant Ratio on or  prior
                              to  the  fifth  day  after  the  Warrant   Ratio
                              Determination  Date.    The  Warrant  Ratio   is
                              subject  to  increase  upon  the  occurrence  of
                              certain   events  relating   to  the   Company's
                              obligation  to  effect the  registration of  the
                              Warrants and the Warrant Shares.  Following  the
                              Warrant  Ratio Determination  Date, the  Warrant
                              Ratio  is   subject  to   adjustment  upon   the
                              occurrence of certain dilutive events.
Exercise Price                $.01 per Warrant Share purchased upon the
                              exercise of the Warrants.
Warrant Ratio
Determination Date            A date designated by the Board of Directors of
                              the Company, which date shall be  a trading  day
                              during  the  12  month period  beginning on  the
                              Issue Date or, if  no such  date is  designated,
                              the last day of such 12 month period;  provided,
                              that  if  the  Board  of Directors  has not  yet
                              designated  a Warrant  Ratio Determination  Date
                              and  the  average  closing price  of the  Common
                              Stock equals or exceeds $18.00 per share for any
                              30 consecutive trading days during such 12 month
                              period,  the  Warrant  Ratio Determination  Date
                              will be the last such trading day.  The Warrants
                              will not be exercisable for Warrant Shares prior
                              to the Warrant  Ratio Determination  Date.   The
                              Company  will  give  the  holders  of   Warrants

written notice of the Warrant Ratio Determination Date on or prior to the 25th trading day before the Warrant Ratio Determination Date.

Investment Considerations
See "Investment Considerations" for a discussion of certain factors that should be considered in connection with an investment in the Warrants and the Warrant Shares.

SUMMARY CONSOLIDATED FINANCIAL DATA
(in thousands except per share amounts)

The following summary consolidated financial data is derived from the Selected Consolidated Financial Information appearing elsewhere in this Prospectus. Certain prior year financial information has been adjusted to conform to the 1992 classification and restated as further discussed in Note B -- "Restatements" to the Consolidated Financial Statements for December 31, 1992. As explained in Note B of the Notes to Consolidated Financial Statements for December 31, 1992 and Note F of the Notes to Condensed Consolidated Financial Statements for September 30, 1993, the financial statements and, accordingly, the summary financial information presented herein, are presented giving effect to the deconsolidation of Fruehauf as of January 1, 1992:

Nine Months
Ended As of and for the Year Ended December 31, September 30,
1993 1992 1991 1990 1989 1988

Summary of Operations (1)

  Net Sales         $519,510  $523,355   $784,194$1,023,178   $790,903 $343,721
  Income (loss)
   from
   operations       (18,369)   (4,125)   (36,200)    44,386     39,397   21,994
  Net income (loss) (45,095)  (57,175)  (29,786)      6,053     17,772   13,418
  Net income (loss)
   per share (2)      (4.53)    (5.75)     (3.00)      0.61      1.82     1.20
Ratio of earnings
 to fixed
 charges (3)          (4)       (4)        (4)         1.1x      1.4x      2.0x
Total Assets        $402,576  $477,356   $617,203  $745,065   $833,338 $287,864
Capitalization (5)
  Long-term debt
   and notes
   payable,
   including
   current
   maturities      $ 229,115  $217,605   $216,085  $305,858   $309,796 $109,858
  Stockholders'
   investment       (57,868)   (6,168)     59,881   101,257     80,248   66,912
  Book value
   per share (2)    $ (5.81)   $(0.62)     $6.03     $10.24     $8.24     $6.89
  Dividends per

share (2) --- --- $0.06 $0.05 $0.04 ---

(1) The Selected Financial Data includes the results of operations of the businesses acquired from the date of their respective acquisitions. See a further discussion of acquisitions in Note C -- "Acquisitions" and Note D -- "Investment in Fruehauf Trailer Corporation" in the Notes to Consolidated Financial Statements for December 31, 1992.
(2) The net income (loss) per share, book value per share and dividends per share for all periods shown above reflect the May 1990 five-for-four stock split.
(3) For purposes of determining the ratio of earnings to fixed charges, earnings are defined as income from continuing operations before income taxes, minority interest, extraordinary items and fixed charges. Fixed charges consist of interest on indebtedness, amortization of debt issuance costs and rental expense representative of the interest factor.
(4) The ratio of earnings to fixed charges is less than 1.0 for these periods. The deficiency amounts are $44,225 for the nine months ended September 30, 1993, $22,130 for 1992 and $50,890 for 1991.
(5) See "The Company -- Recent Developments" and "Capitalization" for a description of the Preferred Stock and Warrants issued in December 1993 and presentation of resulting pro forma capitalization.

INVESTMENT CONSIDERATIONS

In addition to other matters described in this Prospectus, the following should be carefully considered in connection with an investment in the Warrants and the Warrant Shares:

Continued Losses From Operations and Uncertainties

In their report dated April 14, 1993 on the Company's 1992 financial statements (set forth on page F-3), the Company's independent accountants indicated in an explanatory paragraph that there are matters which raise substantial doubt about the Company's ability to continue as a going concern. The Company has suffered recurring and significant losses from operations, which have continued during 1993. The Company has also experienced cash flow difficulties and has a net capital deficiency. On a consolidated basis, the Company experienced an operating loss of approximately $4.1 million and a net loss of approximately $57.2 million (approximately $22.1 million, excluding the Company's equity in the net losses of Fruehauf) for the year ended December 31, 1992 and an operating loss of approximately $18.4 million and a net loss of approximately $45.1 million for the nine months ended September 30, 1993. See "Management's Discussion and Analysis of Financial Condition and Results of Operations."

High Leverage, Substantial Payment Obligations and Compliance with Restrictions Imposed by Lenders

The Company is highly leveraged. As of September 30, 1993, the Company had approximately $229.1 million of debt and negative stockholders' equity of $57.9 million. The Company has outstanding Senior Secured Notes due 1996 (the "Secured Notes") in the aggregate principal amount of $160.0 million as of September 30, 1993 and Senior Subordinated Notes due 1997 (the "Subordinated Notes"; together with the Secured Notes, the "Notes") in the aggregate principal amount of approximately $33.3 million as of September 30, 1993. The Company also has outstanding as of September 30, 1993 approximately $18.7 million under a permanent lending facility of up to $20 million (the "Lending Facility") provided by Foothill Capital Corporation ("Foothill") and approximately $6.1 million in acquisition debt due July 1994.

This substantial leverage has several important consequences, including the following: (i) the ability of the Company to obtain additional financing in the future may be impaired, (ii) the significant interest expense and principal repayment obligations will require a substantial amount of the Company's cash flow to be expended on debt service (in 1994, approximately $27.6 million of interest on the Secured Notes, the Subordinated Notes and the Lending Facility (of which approximately $12.9 million has been paid as of February 1) and approximately $14.4 million for a required sinking fund payment on the Subordinated Notes and the maturity of the acquisition debt) and (iii) the Company's ability to withstand competitive pressures, adverse economic conditions and adverse changes in governmental regulation, to make acquisitions, and to take advantage of significant business opportunities that may arise, may be negatively impacted.

The instruments governing the Company's indebtedness contain a number of restrictive covenants, including covenants limiting the incurrence of debt and sales of assets and requiring the Company to maintain certain financial ratios and specified levels of net worth. Adverse operating results, whether in the near future or thereafter, could cause non-compliance with the instruments governing the Company's indebtedness.

As of July 31, 1993, the Company was not in compliance with the tangible net worth covenant under the Lending Facility. Following the closing on August 20, 1993 of Fruehauf's restructuring and financing transactions described in "Business -- Fruehauf Trailer Corporation," Foothill agreed that the Company's noncompliance with the tangible net worth covenant under the Lending Facility is no longer continuing. Foothill also waived the noncompliance. The Company believes, based on management's current estimates, that it will be in compliance with such covenant over the next 12 months. See "Management's Discussion and Analysis of Financial Condition and Results of Operations."

The indentures governing the Notes require, among other things, that the Company maintain certain levels of tangible net worth ("Net Worth Covenants") and collateral ("Collateral Covenant"). In the event that the Company's net worth is not in excess of the amount required under the Net Worth Covenants for any two consecutive quarters, the Company must offer to repurchase, at par plus accrued interest, 20% of the outstanding principal amount of the Notes. In the event the Company is not in compliance with the Collateral Covenant at the end of any calendar quarter, the Company must offer to repurchase, at par plus accrued interest, $16.0 million principal amount of the Secured Notes or such greater amount as would be necessary to bring the Company into compliance with the Collateral Covenant. As of September 30, 1993, the Company's tangible net worth as defined in the Notes indentures was less than the $15 million minimum set forth in the indentures. Management believes that the Company was in compliance with the Net Worth Covenants and Collateral Covenant at December 31, 1993. If the Company continues to sustain losses from operations, it may not be in compliance with the Net Worth Covenants in the future. If any offer to repurchase Notes were required to be made, it is likely that the Company would require additional funding to complete the offer, and if such funding were unavailable to it, the Company would be unable to comply with the terms of the Notes and the maturity of the Notes may be accelerated. Such circumstances would result in a material adverse impact on the Company and its financial position. See "Management's Discussion and Analysis of Financial Condition and Results of Operations."

On December 20, 1993, the Company completed the private placement of 1,200,000 shares of the Preferred Stock and 1,300,000 Warrants for aggregate net proceeds to the Company of $27.2 million. See "The Company -- Recent Developments." The proceeds of such private placement are being used by the Company for additional working capital. In addition, in December 1993, Terex Equipment Limited ("TEL"), a subsidiary of the Company located in Scotland, entered into a pd28 million ($42 million) credit facility with Standard Chartered Bank providing for a credit facility and foreign exchange and bonding lines of credit. The Company is also generating cash through the sale of excess inventory in the Heavy Equipment Segment, deferring certain capital expenditures, selling certain real estate and other assets and continuing corporate wide cost containment efforts. Management believes that the Lending Facility together with these additional financings, new equity and other cash generating activities, will allow the Company to meet its operating payment obligations on a timely basis. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources."

Uncertainty as to Warrant Ratio

The Warrants are not exercisable until the opening of business on the day following the Warrant Ratio Determination Date. Under the terms of the Warrant Agreement, the designation of the Warrant Ratio Determination Date is in the discretion of the Board of Directors of the Company, provided that such date must occur on or before December 20, 1994 and that such date will occur earlier if the Current Market Price per share of Common Stock equals or exceeds $18.00 before such date. Until the occurrence of such date, the number of Warrant Shares issuable upon exercise of a Warrant, and the value of the Warrants when they first become exercisable, are not determinable. Absence of Public Market

As of January 19, 1994, there were 21 holders of the Warrants. There has previously been no public market for the Warrants. The Company does not intend to list the Warrants on any securities exchange or to seek approval for quotation through any automated quotation system. There can be no assurance that an active market for the Warrants will develop. In addition, resales of a substantial percentage of the outstanding Warrants could constrain the ability of any market maker to develop or maintain a market for the Warrants. To the extent that a market for the Warrants does develop, the market value of the Warrants will depend on the price of the Common Stock, general economic conditions, the Company's financial condition and other conditions and may be subject to substantial price volatility.

Future Sales of Common Stock; Control

The Company is unable to predict the effect, if any, that any future sales of Common Stock, including the shares of Common Stock covered hereby, will have on the market price of the Common Stock and, therefore, the value of the Warrants, prevailing from time to time.

As of the date of this Prospectus, Randolph W. Lenz is the beneficial owner, directly and indirectly, of approximately 49.1% of the outstanding Common Stock of the Company. Mr. Lenz currently pledges, and intends to pledge in the future, shares of Common Stock owned by him as collateral for loans. A registration statement has been filed with the Commission with respect to all of the shares of Common Stock directly owned by Mr. Lenz, and Mr. Lenz has advised the Company that such registration is for the purpose of facilitating financing by Mr. Lenz through the pledge of his shares of Common Stock. See "Principal Stockholders." If Mr. Lenz does not pay such loans when due, the pledgee may have the right to sell the shares of Common Stock pledged to it in satisfaction of Mr. Lenz's obligations. The sale or other disposition of a substantial amount of such shares of Common Stock in the public market could adversely affect the prevailing market price for the Common Stock and, therefore, the value of the Warrants. In addition, the sale of a substantial amount of such pledged shares of Common Stock by a pledgee could result in a change of control of the Company under the indentures relating to the Notes, requiring the Company to offer to repurchase certain of these securities as provided for in their respective indentures.

Pursuant to the terms of a Registration Rights Agreement dated December 20, 1993 relating to the Preferred Stock (the "Preferred Stock Registration Rights Agreement"), the Company agreed to file a shelf registration statement covering the outstanding shares of Preferred Stock and the 2,700,000 shares of Common Stock which may be issuable upon conversion of the Preferred Stock. The sale or other disposition of a substantial number of such shares of Common Stock in the public market could adversely affect the prevailing market price for the Common Stock and, therefore, the value of the Warrants.

Dividend Policy

Contractual restrictions exist which limit the Company's ability to pay dividends on its capital stock. The terms of the Preferred Stock also limit the Company's ability to pay cash dividends on any class of capital stock of the Company junior to or on a parity with the Preferred Stock. See "Description of Securities -- Preferred Stock." The Company does not plan on paying dividends on the Common Stock in the foreseeable future. In addition, under Delaware law the Company's ability to pay dividends is subject to the statutory limitation that such payment be either (i) out of its surplus (the excess of its net assets over its total liabilities plus stated capital) or
(ii) in the event that there is no surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.
See "Market for Common Stock and Dividend Policy."

Industry Cyclicality

The Company's Heavy Equipment and Material Handling Segments have experienced declines in sales which are in part attributable to the overall economic slowdown and weakness of industry demand faced both domestically and abroad. Sales of products manufactured by the Heavy Equipment and Material Handling Segments have historically been subject to substantial cyclical variation based on general economic conditions. See "Selected Consolidated Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Environmental and Related Matters

The Company's production facilities and operations are subject to a variety of federal, state, local and foreign environmental, health and job safety laws and regulations. The Company believes that reserves and planned expenditures are adequate to meet potential liabilities and costs in the next several years attributable to applicable environmental, health and job safety requirements. Environmental liabilities (especially those relating to discontinued production or waste disposal practices) are very difficult to quantify, and it is possible that litigation or regulatory action may require significant unanticipated expenditures or otherwise adversely affect the Company. The Company is not aware of any conditions or circumstances that, under applicable governmental environmental, health or safety regulations or requirements, will require expenditures by the Company which management believes would have a material adverse effect on its businesses. The Company may have contingent responsibility for certain environmental liabilities of Fruehauf if Fruehauf fails to discharge its obligation, to the extent that such liabilities arose during the time period during which Terex was the controlling stockholder of Fruehauf. The Company believes that Fruehauf's significant environmental liabilities predate Terex's acquisition of Fruehauf, and therefore any contingent responsibility of the Company is not expected to have a material adverse effect on the Company. See "Business -- Environmental Considerations."

THE COMPANY

Terex is a global provider of capital goods and equipment used in the mining, commercial building, infrastructure, manufacturing and construction industries.
Through the Company's Heavy Equipment Segment, the Company designs, manufactures and markets heavy-duty, off-highway, earthmoving, construction, lifting, material handling and aerial lift equipment and related components and replacement parts. Through its Material Handling Segment, the Company is engaged in designing, manufacturing and marketing a complete line of internal combustion and electric lift trucks, electric walkies, automated pallet trucks, industrial tow tractors and related components and replacement parts. Terex also owns an approximate 22.6% equity interest in Fruehauf. Fruehauf designs, manufactures and markets truck trailers, making a wide range of van, refrigerated, platform, tank, dump trailer and other models, and related parts and accessories. Fruehauf recently restructured its debt obligations and completed new financings. See "Business -- Fruehauf Trailer Corporation."

The Company has grown through acquisitions and has had considerable experience in restructuring and operating capital goods manufacturers, particularly in the off-road truck and construction and industrial equipment industries. Following an acquisition, in order to improve profitability, the Company traditionally
(i) consolidates manufacturing operations, (ii) adjusts new equipment production capacity to meet the actual level of demand in the marketplace,
(iii) reduces corporate overhead and (iv) emphasizes that portion of the business that yields the highest margins, particularly the replacement parts business. More specifically, this strategy involves elimination of marginally profitable or unprofitable product lines, closing underutilized and inefficient plants, liquidating excess inventories and substantially reducing personnel.

The Company's management has made nine acquisitions since 1983. The following table lists these acquisitions and their respective product lines:

                              Date of
Business                      Acquisition         Current Product Lines

Northwest Engineering         November 1983       Draglines, cranes and
 Company                                           replacement parts

BCP Construction Products     March 1985          DYNAHOE backhoe/loader and
 Division                                          replacement parts for
                                                   Bucyrus-Erie machines

Terex Division                December 1986       Haulers, scrapers, loaders,
                                                   crawlers and replacement
                                                   parts

Koehring Cranes & Excavators  January 1987        Cranes, excavators, and
 Division                                          replacement parts

Terex Equipment Limited       June 1987           Haulers, scrapers, loaders,
                                                   crawlers and replacement
                                                   parts

Unit Rig Division             July 1988           Large haulers and loaders and
                                                   replacement parts

Fruehauf Trailer Corporation  July 1989           Truck trailers and related
                                                   parts and services

Mark Industries, Inc.         December 1991       Aerial lift equipment and
                                                   replacement parts

Clark Material Handling       July 1992           Internal combustion and
 Company and certain                               electric lift trucks and
 affiliated entities                               replacement parts

Each of these businesses possesses three key attributes that management believes enhance the Company's ability to improve its cash flow and profitability: (i) a long operating history and, thus, a significant number of units currently in the field that require replacement parts; (ii) significant brand name recognition in the industry and a well-established distribution network, principally through dealers, within its specialty markets; and (iii) new machine manufacturing capabilities which can be, if appropriate, adapted to serve specialty, higher margin markets involving products designed to address specific user needs and manufactured in low to medium production volumes.

The principal executive offices of the Company are located at 500 Post Road East, Westport, Connecticut 06880 and its telephone number is (203) 222-7008.

Recent Developments

The Company has continued to incur operating losses subsequent to September 30, 1993.

On December 20, 1993, the Company completed the private placement of the Warrants and the Preferred Stock to institutional investors for aggregate net proceeds to the Company of $27.2 million. The proceeds of such private placement are being used by the Company for additional working capital. Jefferies was the placement agent for the sale of the Preferred Stock and the Warrants. In connection with the sale of the Warrants and the Preferred Stock, the Company and the purchasers of the Warrants and the Preferred Stock entered into the Warrant Registration Rights Agreement and the Preferred Stock Registration Rights Agreement. See "Description of Securities -- Warrants" and "-- Preferred Stock."

In December 1993, the Company repurchased in the open market Secured Notes in the aggregate principal amount of $5.0 million for approximately $4.5 million, including accrued interest, and the Company had such Secured Notes cancelled as of December 31, 1993.

In December 1993, the Company sold 1,000,000 shares of the common stock of Fruehauf in two separate transactions, which reduced the Company's percentage ownership interest in Fruehauf to approximately 22.6%, for aggregate proceeds to the Company of approximately $3.0 million. The Company intends to make an offer to purchase approximately $3.0 million of outstanding Secured Notes in the second quarter of 1994 pursuant to the terms of the indenture for the Secured Notes.

USE OF PROCEEDS

The Company will receive proceeds of $.01 per Warrant Share issued upon exercise of the Warrants, for an aggregate amount of up to $13,000. The Company will use such proceeds for general corporate purposes. All Warrants and Warrant Shares covered hereby being registered for resale are being so registered for the account of the Selling Security Holders and, accordingly, the Company will not receive any of the proceeds from the resale of the Warrants or Warrant Shares by the Selling Security Holders.

MARKET FOR COMMON STOCK AND DIVIDEND POLICY

Effective March 19, 1991, the Company's Common Stock was listed on the NYSE under the symbol "TEX".

Quarterly Market Prices
                       1993                               1992
           Fourth Third  Second First     Fourth  Third  Second   First

High $9.25 $ 8.13 $10.75$11.88 $12.75 $12.50 $16.25 $18.50 Low 6.38 6.25 6.63 9.13 6.63 8.13 9.50 12.75

No dividends were declared or paid in 1993 or 1992. As discussed in Note I -- "Long-Term Obligations" to the Consolidated Financial Statements, certain of the Company's debt agreements contain restrictions as to the payment of cash dividends. Under these agreements, no retained earnings were available for dividends at December 31, 1993. The terms of the Preferred Stock also restrict the Company's ability to pay cash dividends on the Common Stock. See "Description of Securities -- Preferred Stock." The Company intends generally to retain earnings, if any, to fund the development and growth of its business.
The Company does not plan on paying dividends on the Common Stock in the forseeable future. Any future payments of cash dividends will depend upon the financial condition, capital requirements and earnings of the Company, as well as other factors that the Board of Directors may deem relevant.

As of January 1, 1994, there were 895 stockholders of record of the Common Stock.

CAPITALIZATION

The following table sets forth the consolidated capitalization of the Company as of September 30, 1993. The table should be read in conjunction with the consolidated financial statements of the Company and the related notes thereto included elsewhere in this Prospectus. The Company has continued to incur operating losses subsequent to September 30, 1993. See "The Company -- Recent Developments" and "Selected Consolidated Financial Information."

                                                      (In thousands)
                                                  Actual     Pro Forma (1)
Notes payable and long-term debt
 (including current portion):
  Secured Notes                                $159,080  (2)  $ 159,080
  Subordinated Notes                             32,633  (3)     32,633
  Lending Facility                               18,650  (4)     18,650
  Other debt, including notes payable            18,752  (5)     18,752
    Total notes payable and long term debt       229,115        229,115

Redeemable Convertible Preferred Stock               ---         10,328

Stockholders' investment
  Common Stock Purchase Warrants                     ---         16,851
  Common Stock                                       100            100
  Additional paid-in capital                      37,808         37,808
  Retained deficit                              (81,326)       (81,326)
  Pension liability adjustment                   (4,452)        (4,452)
  Foreign currency translation adjustment        (9,998)        (9,998)
    Total stockholders' investment              (57,868)       (41,017)

Total capitalization                            $171,247       $198,426

(1) Presented as if 1,200,000 shares of the Preferred Stock and 1,300,000 Warrants were issued as of September 30, 1993. See "The Company -- Recent Developments."
(2) Represents $160.0 million principal amount of Secured Notes (of which $5.0 million were repurchased subsequent to September 30, 1993) which bear interest at 13% and are due August 1996. These notes are secured by substantially all inventory and property, plant and equipment of the Company's Material Handling and Heavy Equipment Segments as well as the Company's investment in common stock of Fruehauf.
(3) Represents $33.3 million principal amount of Subordinated Notes which bear interest at 13.5%, are payable in equal annual installments of approximately $8.3 million and are finally due July 1997. These notes are secured by a secondary position in substantially the same assets which collateralize the Secured Notes.
(4) The Lending Facility bears interest at a fluctuating rate (8.75% at September 30, 1993) based on the prime rate. The Lending Facility provides for revolving credit loans and guarantees of letters of credit of up to $20.0 million and matures on August 24, 1995. Borrowings under the Lending Facility are secured by a lien on substantially all of the Company's domestic cash and accounts receivable.
(5) See Note I of the Notes to Consolidated Financial Statements for December 31, 1992, included elsewhere in this Prospectus, for a description of the Company's other debt.

SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands except per share amounts and employees)

Selected Financial Data (1)

Nine Months
Ended As of and for the Year Ended December 31,

September 30,
1993 1992 1991 1990 1989 1988

Summary of Operations (2)

   Net Sales        $519,510   $523,355 $784,194$1,023,178  $790,903   $343,721
   Income (loss)
    from operations (18,368)    (4,125)$(36,200)   $44,386   $39,397    $21,994
   Net income (loss)(45,095)   (51,175) (29,786)     6,053    17,772     13,418
   Net income (loss)
    per share (3)     (4.53)    (5.75)    (3.00)     0.61      1.82       1.20
Ratio of
 earnings to
 fixed charges (4)    (5)       (5)       (5)        1.1x      1.4x       2.0x
Working Capital
   Current assets   $267,589   $319,235 $361,945  $434,533  $483,736   $254,595
   Current
    liabilities      187,539    222,014  244,301   240,310   306,731     95,410
   Working capital    80,050     97,221  117,644   194,223   177,005    159,185
   Current ratio        1.4       1.4       1.5       1.8       1.6       2.7
Property, Plant and Equipment
   Net property,
    plant and
    equipment       $101,543   $116,279 $129,560  $170,592  $179,016    $27,312
   Capital
    expenditures       8,529      5,382    4,098     8,707     2,934      3,263
   Depreciation       11,615      7,074   11,028    10,930     7,728      3,686
Total Assets        $402,576   $477,356 $617,203  $745,065  $833,338   $287,864
Capitalization (6)
   Long-term debt
    and notes payable,
    including current
    maturities      $229,115   $217,605 $216,085  $305,858  $309,796   $109,858
   Stockholders'
    investment      (57,868)    (6,168)   59,881   101,257    80,248     66,912
   Book value
    per share (3)     $(5.81)   $(0.62)    $6.03    $10.24     $8.24     $6.89
   Dividends
    per share (3)        ---       ---     $0.06     $0.05     $0.04       ---
   Return on
    average
    stockholders'
    investment          ---        ---    (37.0)%     6.7%24.2%23.6%
   Shares
    outstanding at
    period-end (3)     9,953      9,949    9,923     9,893     9,743      9,713
Employees             3,150       3,056    6,980     8,000     9,406      2,585

(1) Certain prior year financial information has been adjusted to conform to the 1992 classification and restated as further discussed in Note B -- "Restatements" to the Consolidated Financial Statements for December 31, 1992. As explained in Note B of the Notes to Consolidated Financial Statements for December 31, 1992 and Note F of the Notes to Condensed Consolidated Financial Statements for September 30, 1993, the financial statements and, accordingly, the summary financial information presented herein, are presented giving effect to the deconsolidation of Fruehauf as of January 1, 1992.
(2) The Selected Financial Data includes the results of operations of the businesses acquired from the date of their respective acquisitions. See a further discussion of acquisitions in Note C -- "Acquisitions" and Note D -- "Investment in Fruehauf Trailer Corporation" in the Notes to Consolidated Financial Statements for December 31, 1992.
(3) The net income (loss) per share, book value per share, dividends per share, and shares outstanding at period-end for all periods shown above reflect the May 1990 five-for-four stock split.
(4) For purposes of determining the ratio of earnings to fixed charges, earnings are defined as income from continuing operations before income taxes, minority interest, extraordinary items and fixed charges. Fixed charges consist of interest on indebtedness, amortization of debt issuance costs and rental expense representative of the interest factor.
(5) The ratio of earnings to fixed charges is less than 1.0 for these periods. The deficiency amounts are $44,225 for the nine months ended September 30, 1993, $22,130 for 1992 and $50,890 for 1991.
(6) See "The Company -- Recent Developments" and "Capitalization" for a description of the Preferred Stock and Warrants issued in December 1993 and presentation of resulting pro forma capitalization.

Unaudited Quarterly Financial Data

Summarized quarterly financial data for the first nine months of 1993 and for 1992 and 1991 are as follows (in thousands, except per share amounts):

                                       1993

                            Third     Second    First

Net sales                 $164,052  $172,261  $183,197
Gross profit                12,339    14,321    17,599
Net income (loss)         (15,046)  (17,650)  (12,399)
Net income (loss) per
   share                   $(1.51)   $(1.77)   $(1.25)

                                                 1992
                                 Fourth    Third     Second    First

Net sales                      $210,101  $145,421  $82,843   $84,990
Gross profit                     25,011    12,572    6,901     9,526
Net income (loss)              (18,564)  (19,856) (13,605)    (5,110)
Net income (loss) per
   share                        $(1.87)   $(2.00)   $(1.37)   $(0.51)

                                                 1991
                                 Fourth    Third     Second    First

Net sales                     $200,556  $187,430  $216,609  $179,599
Gross profit                    18,502    25,611    24,390    25,378
Net income (loss)             (15,821)     8,979  (10,932)  (12,012)
Net income (loss) per
   share                        $(1.59)    $0.91    $(1.10)   $(1.21)

The accompanying unaudited quarterly financial data of the Company has been prepared in accordance with generally accepted accounting principles for interim financial information. In the opinion of management, all adjustments considered necessary for a fair presentation have been made and were of a normal recurring nature except for those discussed below.

As disclosed in Note B -- "Restatements" to the Consolidated Financial Statements for December 31, 1992, and in Note F -- "Investment in Fruehauf" to the Condensed Consolidated Financial Statements for the nine months ended September 30, 1993, the financial statements have been restated to give effect to the deconsolidation of Fruehuaf as of January 1, 1992. As disclosed in Note B -- "Restatements" to the Consolidated Financial Statements for December 31, 1992, the prior year financial statements have also been restated. The quarterly financial data shown above reflect these restatements.

The following is a reconciliation of originally recorded financial results to the restated results:

                                                 1993
                                      Third     Second    First
Net Income (Loss)
   As originally reported           $65,954 $(83,116) $(27,635)
   Deconsolidation adjustment      (81,000)    65,466    15,236
Restated net income (loss)        $(15,046) $(17,650) $(12,399)

Net Income (Loss) Per Share
   As originally reported             $6.63    $(8.35)   $(2.78)
   Deconsolidation adjustment         (8.14)     6.58      1.53
Restated net income (loss)
   per share                         $(1.51)   $(1.77)   $(1.25)

                                                 1992
                                 Fourth    Third     Second    First
Net Income (Loss)
   As originally reported    $(22,477) $(20,304)  $(10,919)  $(5,463)
   Restatement adjustment          ---       408    (2,686)       353
   Deconsolidation adjustment    3,913       ---       ---       ---
Restated net income (loss)   $(18,564) $(19,896)  $(13,605)  $(5,110)

Net Income (Loss) Per Share
   As originally reported       $(2.26)   $(2.04)   $(1.10)   $(0.55)
   Restatement adjustment          ---      0.04     (0.27)     0.04
   Deconsolidation adjustment     0.39       ---        ---      ---
Restated net income (loss)
   per share                    $(1.87)   $(2.00)   $(1.37)   $(0.51)

                                                 1991
                                 Fourth    Third     Second    First
Net Income (Loss)
   As originally reported     $(15,717)   $6,203 $(11,410)  $(12,489)
   Restatement adjustment         (104)    2,776       478        477
Restated net income (loss)    $(15,821)   $8,979 $(10,932)  $(12,012)

Net Income (Loss) Per Share
   As originally reported       $(1.58)    $0.63    $(1.15)   $(1.26)
   Restatement adjustment        (0.01)     0.28      0.05      0.05
Restated net income (loss)
   per share                    $(1.59)    $0.91    $(1.10)   $(1.21)

In conjunction with the initial public offering of 4,000,000 shares of Fruehauf common stock in 1991 (the "Fruehauf IPO"), the Company contemplated related exchange transactions between certain stockholders and warrantholders of the Company and Fruehauf. In determining the Company's net gain in 1991 on the Fruehauf IPO, the Company considered the impact of these related exchange transactions. The estimated impact of these exchange transactions was a loss of approximately $7.7 million. The loss was recorded as a reduction of the gain on the sale of Fruehauf, and a net gain of $15.0 million was recorded in 1991. During the fourth quarter of 1992, the agreements governing the exchange transactions expired and management and the parties to the exchange concluded that the exchange transactions originally contemplated were no longer in the best interests of the Terex and Fruehauf stockholders. Accordingly, the $7.7 million reserve for the estimated impacts of the exchange transactions was recorded into income in the fourth quarter of 1992. The impact of this transaction is recorded as a component of Other Income in the Consolidated Statement of Income for December 31, 1992.

During the fourth quarter of 1991, Fruehauf recorded restructuring costs of $15.8 million. This charge related to the anticipated costs of implementing a restructuring of Fruehauf's distribution system, and included other costs related to streamlining Fruehauf's manufacturing operations.

As described in Note D -- "Investment in Fruehauf Trailer Corporation" in the Notes to Consolidated Financial Statements for December 31, 1992, the Company consolidated Fruehauf's financial results with those of the Company for financial reporting purposes during 1991 and, as a result of the termination of the voting trust during 1992, presently accounts for its investment in Fruehauf using the equity method. The Company's consolidated financial statements contained in this Prospectus, and the above summary information, are presented giving effect to the deconsolidation of Fruehauf as of January 1, 1992.

See the Company's Consolidated Financial Statements for December 31, 1992 included elsewhere in this Prospectus.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The Company operates in two industry segments: Heavy Equipment and Material Handling. Prior to 1992, the Company operated in two industry segments: Heavy Equipment and Trailer (Fruehauf). The Material Handling Segment principally represents the operations of Clark Material Handling Company ("CMHC") and certain affiliated companies (together with CMHC, "Clark"). On July 31, 1992, the Company acquired the common stock of CMHC and certain affiliates (the "Clark Acquisition") from Clark Equipment Company (see Note C -- "Acquisitions" to the Consolidated Financial Statements for December 31, 1992). Clark designs, manufactures and markets internal combustion and electric lift trucks, electric walkies, tow tractors and related parts and equipment. The Clark Acquisition was accounted for using the purchase method, therefore, the Clark operating results have been included in the Company's consolidated results of operations since August 1, 1992. As described in "Business -- Fruehauf Trailer Corporation," the Company presently accounts for its investment in Fruehauf using the equity method and the Company's consolidated financial statements are presented giving effect to the deconsolidation of Fruehauf as of January 1, 1992.

Nine Months Ended September 30, 1993

The table below is a comparison of net sales, gross profit, engineering, selling, and administrative expenses and loss from operations, by segment, for the nine months ended September 30, 1993 and 1992. Amounts shown for the Material Handling Segment for 1992 represent activity for two months subsequent to the Clark Acquisition.

                                   Nine Months Ended
                                      September 30          Increase
                                  19931992     (Decrease)
                                     (in millions of dollars)

NET SALES
   Heavy Equipment               $205.5         $224.9     $(19.4)
   Material Handling              314.0           88.4      225.6
     Total                       $519.5         $313.3     $206.2

GROSS PROFIT
   Heavy Equipment                $24.7          $22.3       $2.4
   Material Handling               19.6            6.7       12.9
      Total                       $44.3          $29.0      $15.3

ENGINEERING, SELLING AND ADMINISTRATIVE
EXPENSES

   Heavy Equipment                $22.5          $28.4      $(5.9)
   Material Handling               37.5            8.7       28.8
   General/Corporate                2.6            0.5        2.1
     Total                        $62.6          $37.6      $25.0

INCOME (LOSS) FROM OPERATIONS
   Heavy Equipment                 $2.2          $(6.1)      $8.3
   Material Handling              (17.9)          (2.0)     (15.9)
   General/Corporate               (2.6)          (0.5)      (2.1)
     Total                       $(18.3)         $(8.6)      $9.7

Net Sales

Sales increased $206.2 million, or approximately 66%, for the nine months ended September 30, 1993 over the comparable 1992 period.

Heavy Equipment Segment sales decreased $19.4 million during the nine months ended September 30, 1993 compared to the nine months ended September 30, 1992. This decrease reflects the effects during the first half of 1993 of worldwide economic conditions on the construction and mining industries, the Heavy Equipment Segment's principal markets. Machines and contract sales represented $15.8 million of the decrease and parts sales represented $3.6 million of the decrease, as the sales mix changed to 38% parts in 1993 from 36% parts in 1992.
The Unit Rig division ("Unit Rig"), the Heavy Equipment Segment division that principally serves the mining industry, experienced a decrease in sales of $10.3 million to $47.0 million for the nine months ended September 30, 1993 from $57.3 million in the nine months ended September 30, 1992. This decrease was primarily a result of reduced sales in the first half of 1993 due to continued low bookings in the second half of 1992 as the mining industry continued to operate at reduced levels. Several completed trucks in inventory as of September 30, 1993 were not shipped due to delays in completion of final purchaser financing arrangements, also contributing to the decrease. Koehring Cranes and Excavators ("Koehring"), the Heavy Equipment Segment division that serves the construction market, experienced a decrease in sales of $12.8 million to $57.9 million for the nine months ended September 30, 1993 from $70.7 million for the first nine months of 1992. Koehring sales in 1992 were higher due to sales of slow moving inventory and product lines at low margins to reduce inventory and more effectively utilize working capital. The decreased sales at Koehring and Unit Rig were partially offset by a $3.4 million increase in sales by the Company's Terex division and TEL, to $99.7 million for the nine months ended September 30, 1993.

Heavy Equipment Segment bookings during the first nine months of 1993 were $209.6 million, a decrease of $10.9 million, or 5% from the same period in 1992. Booking for parts sales, from which the Company realizes higher margins than machine sales, increased $1.7 million or 2% for the first nine months of 1993 over the year earlier period. Machine and contract bookings decreased $12.6 million or 9%, reflecting continuing weakness in the Segment's principal markets during the first half of 1993 as well as more aggressive pricing and financing by the Company's competitors. The slow recovery in the construction industry has also made the Koehring and Terex division distributor networks more cautious in their acquisition of new equipment, especially for machines to be used in the rental market. Heavy Equipment Segment backlog was $89.0 million at September 30, 1993 compared to $85.4 million at December 31, 1992 and $47.7 million at September 30, 1992.

Material Handling Segment sales were $314.0 million for the nine months ended September 30, 1993 compared to $88.4 million for August and September 1992, an increase of $225.6 million. On a pro forma basis, giving effect to the Clark Acquisition as of January 1, 1992, sales decreased $62.9 million for the nine months ended September 30, 1993 from $376.9 million for the nine months ended September 30, 1992. Management believes that Material Handling Segment dealers increased orders during the fourth quarter of 1992 to ensure adequate inventory levels during the first quarter of 1993 while the company transferred certain Material Handling Segment production from Korea to the U.S. and Germany, resulting in lower sales in the first quarter of 1993. This transfer of production continued during 1993, but was not completed by September due to delays in establishing replacement lines of credit similar to those previously existing in Korea. In addition, the Material Handling Segment experienced working capital constraints during the third quarter of 1993 which have limited the Company's ability to obtain materials and maintain production, adversely affecting sales. Management expects Material Handling Segment sales volume to remain at third quarter levels during the fourth quarter of 1993 until completion of the working capital equity infusion as discussed below under "Liquidity and Capital Resources." Bookings have remained strong because of improved demand in the North American forklift industry. As a result of these factors, the Material Handling Segment backlog was $127.0 million at September 30, 1993 compared to $83.2 million at December 31, 1992 and $80.8 million at the July 31, 1992 acquisition date.

Gross Profit

Gross profit for the nine months ended September 30, 1993 increased $15.3 million compared to the nine months ended September 30, 1992. The Material Handling Segment contributed gross profit of $19.6 million for the nine months ended September 30, 1993 compared to $6.7 million for August and September 1992, an increase of $12.9 million.

The Heavy Equipment Segment's gross profit increased $2.4 million to $24.7 million in the first nine months of 1993 compared to $22.3 million in the year earlier period. Improved gross profit from machines and contract sales accounted for substantially all of the increase, reflecting the positive effects of cost reduction initiatives implemented in 1992 and throughout 1993. Gross profit for the 1993 period includes a $2.2 million provision for write-down of certain inventory at Koehring in connection with management's decision to cease new machine production for certain products. The gross profit percentage in the Heavy Equipment Segment increased to 12.0% for the nine months ended September 30, 1993 compared to 10.0% for the nine months ended September 30, 1992 reflecting the increased percentage of parts sales, from which the Company realizes higher margins, and improved manufacturing efficiency.

Engineering, Selling and Administrative Expenses

Engineering, selling and administrative expenses increased to $62.6 million for the nine months ended September 30, 1993 from $37.6 million for the nine months ended September 30, 1992. The Material Handling Segment engineering, selling and administrative expenses totaled $37.5 million for the nine months ended September 30, 1993 compared to $8.7 million for August and September, 1992 and compared to $36.6 million for the nine months ended September 30, 1992 on a pro forma basis. Heavy Equipment Segment engineering, selling and administrative expenses decreased from $28.4 million for the nine months ended September 30, 1992 to $22.5 million for the nine months ended September 30, 1993 as a result of cost reduction initiatives including headcount reductions and the consolidation of certain administrative functions into the Heavy Equipment Segment's administrative offices in Tulsa, Oklahoma. Corporate expenses increased $2.1 million primarily as a result of increased legal and accounting expenses.

Income (Loss) from Operations

The Heavy Equipment Segment income from operations increased $8.3 million from a $6.1 million loss in the 1992 period to $2.2 million income in the 1993 period. This improvement resulted from the increase in gross profit and the decrease in engineering, selling and administrative expenses, offset by the $2.2 million provision for write-down of inventory. Except for the Koehring division, the businesses comprising the Heavy Equipment Segment reported income from operations for the nine months ended September 30, 1993. The losses at Koehring have been reduced as a result of continuing cost reductions, improvements in inventory management and elimination of certain low-volume products, and the Company continues to consider additional actions necessary to return that operation to consistent profitability, including a continuing evaluation of facilities, products and inventories. In addition, in March 1992 the Company sold Benton Harbor Engineering ("Benton Harbor"), which had experienced a loss from operations in the first quarter of 1992.

The Material Handling Segment incurred a loss from operations of $17.9 million for the nine months ended September 30, 1993, compared to an operating loss of $2.0 million for August and September, 1992 and compared to an operating loss of $12.3 million for the nine months ended September 30, 1992 on a pro forma basis, primarily as a result of decreased sales.

On a consolidated basis, the Company experienced an operating loss of $18.3 million for the nine months ended September 30, 1993, compared to an operating loss of $8.6 million for the nine months ended September 30, 1992. Income (loss) from operations before depreciation is as follows:

                                          Nine Months Ended September 30,
                                              1993                1992
                                              (in millions of dollars)
INCOME (LOSS) FROM OPERATIONS
BEFORE DEPRECIATION
  Heavy Equipment                           $ 5.1               $(4.3)
  Material Handling                          (9.3)               (0.6)
  General/Corporate                          (2.5)               (0.6)
    Total                                   $(6.7)              $(5.5)

Other Income (Expense)

Interest expense on a consolidated basis was $23.8 million for the nine months ended September 30, 1993 compared to $15.6 million for the nine months ended September 30, 1992. Terex sold $160 million principal amount of the Secured Notes on July 31, 1992. The proceeds of the Secured Notes were used for the cash portion of the Clark Acquisition ($85 million), the payment of all amounts outstanding under Terex's previous credit and letter of credit agreement ($58 million), and for working capital and transaction costs. The increase in Terex interest expense for the nine months ended September 30, 1993 over the nine months ended September 30, 1992 is primarily the result of incremental borrowings to finance the Clark Acquisition (incremental interest expense of approximately $6.7 million) and higher interest rates on new borrowings used to refinance the previous credit and letter of credit agreement, as well as additional costs related to establishing and utilizing a new credit and letter of credit agreement.

The Company recognized equity in the net loss of Fruehauf of $0.7 million for the nine months ended September 30, 1993 compared to equity in the net loss of Fruehauf of $14.6 million for the nine months ended September 30, 1992. As described in Note F of the Notes to Condensed Consolidated Financial Statements for September 30, 1993, the Company does not expect to recognize any significant additional losses with respect to its investment in Fruehauf.

The provision for income taxes generally represents taxes withheld on foreign royalties and dividends. As such, any fluctuation in the provision for income tax is due to fluctuations in these items. The Company adopted SFAS No. 109, "Accounting for Income Taxes" on January 1, 1993. The new pronouncement retains the basic concepts of SFAS No. 96, but generally simplifies its application. The adoption of this new pronouncement did not have a material impact on the Company's operating results and financial position. See "Recent Pronouncements" below.

Extraordinary Item

In connection with terminating its previous bank lending agreement as described below under "Liquidity and Capital Resources," the Company recognized a charge of approximately $2.0 million in the second quarter of 1993 to write off unamortized debt issuance costs.

1992 Compared with 1991

The table below is a comparison of net sales, gross profit, engineering, selling and administrative expenses and income (loss) from operations, by segment, for the years ended December 31, 1992 and 1991:

                                         Year Ended
                                        December 31,          Increase
                                    1992           1991      (Decrease)
                                            (in millions of dollars)

   NET SALES
     Heavy Equipment             $282.4         $271.5           $10.9
     Material Handling            241.0           ---            241.0
     Trailer                       ---           512.7          (512.7)

       Total                     $523.4         $784.2         $(260.8)

   GROSS PROFIT
     Heavy Equipment              $29.6          $26.3            $3.3
     Material Handling             24.4           ---             24.4
     Trailer                       ---            67.6           (67.6)

       Total                      $54.0          $93.9          $(39.9)

   ENGINEERING, SELLING AND
     ADMINISTRATIVE EXPENSES
     Heavy Equipment              $35.6          $37.6           $(2.0)
     Material Handling             22.2           ---             22.2
     Trailer                       ---            90.8           (90.8)
     General/Corporate              0.3            1.7            (1.4)

       Total                      $58.1         $130.1          $(72.0)

   INCOME (LOSS) FROM OPERATIONS
     Heavy Equipment              $(6.0)        $(11.3)           $5.3
     Material Handling              2.2           ---              2.2
     Trailer                       ---           (23.2)           23.2
     General/Corporate             (0.3)          (1.7)            1.4

       Total                      $(4.1)        $(36.2)          $32.1


Operating Results

Net Sales

Sales decreased $260.8 million or approximately 33%, during 1992 compared to 1991. Material Handling Segment sales were $241.0 million for the year ended December 31, 1992 representing the Clark sales since the acquisition date. Trailer Segment sales were $512.7 million in 1991. Heavy Equipment Segment sales increased $10.9 million during 1992 compared to the 1991 period. Mark Industries ("Mark"), an operating unit of the Heavy Equipment Segment, was acquired in December 1991. Excluding Mark, Heavy Equipment Segment fiscal 1992 sales decreased $9.4 million in relation to the comparable 1991 period. This decrease reflects the continuing effects of the worldwide recession on the construction and mining industries, the Heavy Equipment Segment's principal markets. Heavy Equipment Segment bookings during 1992 were $315.9 million, an increase of $56 million, or 22% over 1991. The majority of this increase occurred in the fourth quarter. Fourth quarter 1992 Heavy Equipment Segment bookings were $95.4 million, an increase of $43 million over the comparable 1991 period. Heavy Equipment Segment backlog was $85.4 million at December 31, 1992, an increase of $33.4 million over the comparable amount at December 31, 1991.

The overall Heavy Equipment Segment sales mix of equipment sales as a percentage of total net sales increased slightly during 1992 in relation to 1991. Equipment sales represented 61% of total Heavy Equipment Segment sales in 1992, while equipment sales represented 57% of total Heavy Equipment Segment sales in 1991. This relationship is consistent with the relationship of Heavy Equipment Segment bookings for 1992 in relation to 1991. Generally, the Heavy Equipment Segment realizes lower gross margin percentages on new equipment than its other revenue, principally parts.

The Material Handling Segment backlog was $83.2 million at December 31, 1992 compared to backlog at the July 31, 1992 acquisition date of $80.8 million. On September 2, 1992, the Company announced that certain of its production of its 2,000 and 10,000 lb. capacity trucks would be brought back to the U.S. and Germany beginning in the fourth quarter of 1992. Management believes that Material Handling Segment dealers increased order activity during the fourth quarter to ensure adequate inventory levels during the repatriation. The increased fourth quarter 1992 sales volume will result in somewhat lower sales volume throughout the first quarter of 1993 as the Material Handling Segment completes the final stages of the repatriation of production of its light IC to the U.S. during the second quarter of 1993.

Gross Profit

Gross profit for the year ended December 31, 1992 decreased $39.9 million over 1991. The Material Handling Segment contributed gross profit of $24.4 million to the 1992 gross profit of $94.7 million. Heavy Equipment Segment 1992 gross profit increased $3.3 million over the comparable 1991 period. Mark 1992 gross profit represented $1.4 million of the Heavy Equipment Segment increase. The Trailer Segment gross profit was $40.7 million in 1991.

Excluding Mark, the Heavy Equipment Segment's gross profit increased $1.9 million over 1991. Gross profit percentage increased to 10.8% in 1992 from 9.7% in 1991. Gross profit from parts sales decreased $2.5 million as a result of the change in sales mix from parts to machines. Gross profit from machines and other sales increased $4.4 million, principally as a result of cost reduction initiatives implemented in the latter part of 1991 and throughout 1992 to reduce the fixed overhead cost base and as a result of a reduced provision for inventory obsolescence in 1992. The cost reduction initiatives accounted for approximately $2.4 million of the increase in gross profit and included headcount reductions primarily at Koehring and consolidation of manufacturing operations to reduce excess capacity at TEL. The reduced provision for inventory obsolescence accounted for approximately $2.0 million of the increase in gross profit and resulted from improvements in inventory management which have reduced the amount of inventory entering the excess and obsolete classification. During the second quarter of 1992, the Company substantially reduced inventory to more effectively utilize working capital. However, this reduction occurred at gross margins which were lower than normally achieved in routine sales of such products, and, as a result, the incremental sales had only a minor impact on gross profit. The sale of the Benton Harbor operation in March 1992 also contributed to the improvement in gross profit from machines and other sales. Benton Harbor incurred a loss at the gross profit line of $0.8 million in 1991 on sales of $8.5 million.

Engineering, Selling and Administrative Expenses

Engineering, selling and administrative expenses decreased to $58.1 million in 1992 from $114.3 million in 1991. The Material Handling Segment engineering, selling and administrative expenses totaled $22.2 million for the five months ended December 31, 1992. These incremental engineering, selling and administrative expenses were offset by reduced Heavy Equipment Segment and corporate engineering, selling and administrative expenses of $3.4 million resulting from cost reduction initiatives including headcount reductions and the consolidation of certain administrative functions into the Heavy Equipment Segment's administrative offices in Tulsa, Oklahoma.

Trailer Segment engineering, selling and administrative expenses were $90.8 million in 1991, including restructuring costs of $15.8 million representing provisions for the anticipated future costs of implementing a restructuring of Fruehauf's distribution system and other non-recurring costs, as more fully described in Note D of the Notes to Consolidated Financial Statements for December 31, 1992.

Income (Loss) From Operations

On a consolidated basis, the Company experienced an operating loss of $4.1 million for the year ended December 31, 1992, compared to an operating loss of $36.2 million for the year ended December 31, 1991. The improvement resulted from, among other items, the contribution of operating profit of $2.2 million by the Material Handling Segment for the five months ended December 31, 1992 (since its acquisition), the positive impact of cost reduction and cost containment initiatives implemented in the latter part of 1991 and throughout 1992, and the sale of Benton Harbor in March 1992 which experienced an operating loss in the 1991 period. The Trailer Segment's operating loss was $23.2 million for 1991.

Income (loss) from operations before depreciation is as follows:

Year Ended December 31, 1992 1991


(in millions of dollars)

INCOME (LOSS) FROM OPERATIONS
BEFORE DEPRECIATION

Heavy Equipment                        $(2.7)    $(7.2)
Material Handling                        5.9         ---
Trailer                                    ---   (16.3)
General/Corporate                       (0.3)     (1.7)
   Total                                $2.9    $(25.2)

Other Income (Expense)

Interest expense decreased on a consolidated basis from $31.2 million in 1991 to $23.3 million in 1992. Interest expense related to Fruehauf debt totaled $17.6 million in 1991. Interest expense related to Terex debt increased $9.8 million in 1992.

As discussed further under the caption "Liquidity and Capital Resources," Terex sold $160 million principal amount of the Secured Notes on July 31, 1992. The proceeds of the Secured Notes were used for the cash portion of the Clark Acquisition ($85 million), the payment of all amounts outstanding under Terex's previous credit and letter of credit agreement ($58 million), and for working capital and transaction costs. The increase in Terex interest expense over 1991 is primarily the result of (a) incremental borrowings to finance the Clark Acquisition (incremental interest expense of approximately $4.6 million), (b) higher interest rates on new borrowings used to refinance the previous credit and letter of credit agreement, as well as additional costs related to establishing and utilizing a new credit and letter of credit agreement, and (c) a $2.7 million amendment and renewal fee charged by Terex's previous bank consortium prior to the refinancing.

As described in "Business -- Fruehauf Trailer Corporation," the Company presently accounts for its investment in Fruehauf using the equity method. The Company recognized an equity loss of $35.0 million in 1992 from its investment in Fruehauf. Fruehauf reported a loss of $65.2 million for 1992 as a result of reduced sales because of the closure or conversion of 26 sales and service branches as part of Fruehauf's branch restructuring program, a change in Fruehauf's sales mix to lower-margin new trailer and fleet sales and unfavorable manufacturing variances and lost sales of used trailers and parts because of the effects of liquidity problems experienced by Fruehauf during 1992 and which continued into 1993.

In conjunction with the Fruehauf IPO, the Company contemplated related exchange transactions between certain stockholders and warrantholders of the Company and Fruehauf. In determining the Company's net gain in 1991 on the Fruehauf IPO, the Company considered the impact of these related exchange transactions. The estimated impact of these exchange transactions was a loss of approximately $7.7 million. The loss was recorded as a reduction of the gain on the sale of Fruehauf of $22.7 million, for a net gain of $15.0 million in 1991. During the fourth quarter of 1992, the exchange agreement expired and management and the parties to the exchange concluded that the exchange transactions originally contemplated were no longer in the best interests of the Terex and Fruehauf stockholders. Accordingly, the $7.7 million reserve for the estimated impacts of the exchange transactions was recorded into income in the fourth quarter of 1992. The impact of this transaction is recorded as a component of Other Income in the Consolidated Statement of Income for December 31, 1992.

In 1991, Fruehauf recognized equity in net income of affiliated companies of $4.2 million and a $7.5 million gain on the sale of excess assets, including a $6.6 million gain on the sale of Coast Engineering and Manufacturing Company's ("CEMCO") operating assets.

Other income (expense) in 1992 included foreign exchange losses of $2.4 million and other miscellaneous items. Other income (expense) in 1991 included a $3.3 million loss on the sale by Fruehauf of stock in Societe Europeene de Semi-Remorques S.A. ("SESR"), Europe's largest trailer manufacturer.

1991 Compared with 1990

The table below is a comparison of net sales, gross profit and income (loss) from operations for the years ended December 31, 1991 and 1990 and reflect the restatements as described in Note B -- "Restatement of Prior Period Results" to the Consolidated Financial Statements for December 31, 1992:

                                       Year Ended
                                      December 31,          Increase
                                  1991            1990     (Decrease)
                                        (in millions of dollars)
NET SALES
   Heavy Equipment               $271.5         $433.7     $(162.2)
   Trailer                        512.7          589.5       (76.8)

     Total                       $784.2       $1,023.2     $(239.0)

GROSS PROFIT
   Heavy Equipment                $26.3          $72.2      $(45.9)
   Trailer                         67.6           93.9       (26.3)

     Total                        $93.9         $166.1      $(72.2)

ENGINEERING, SELLING AND
   ADMINISTRATIVE EXPENSES
   Heavy Equipment                $37.6          $48.9      $(11.3)
   Trailer                         90.8           74.6        16.2
   General/Corporate                1.7           (1.8)        3.5

     Total                       $130.1         $121.7        $8.4

INCOME (LOSS) FROM OPERATIONS
   Heavy Equipment               $(11.3)         $23.3      $(34.6)
   Trailer                        (23.2)          19.3       (42.5)
   General/Corporate               (1.7)           1.8        (3.5)

     Total                       $(36.2)         $44.4      $(80.6)

Net Sales

Net sales were $239.0 million lower in 1991 than in 1990. This 23.4% decrease is largely attributable to the overall economic slowdown and weakness of industry demand faced both domestically and abroad in the Heavy Equipment and Trailer Segments principal markets.

Gross Profit

The gross profit percentage of the Heavy Equipment Segment decreased from 16.6% in 1990 to 9.7% in 1991. The decrease in gross profit and the related gross profit percentage was the result of the lower sales volume which resulted in substantially underutilized manufacturing capacity. In addition, the provision for excess and obsolete inventory increased approximately $1.7 million over the 1990 provision of $9.7 million. The principal factors contributing to the increased provision are a decline in net realizable value of certain excess finished goods inventory, as well as certain parts inventory. The reserve for excess and obsolete inventory as a percentage of gross inventory increased to 10.5% at December 31, 1991 as compared to 7.3% at December 31, 1990. This increase as a percentage of gross inventory is a result of the following factors: (i) management efforts to reduce working capital employed to finance inventory levels, (ii) higher reserve requirements resulting from reduced net realizable values to facilitate the movement of certain excess finished goods inventory and (iii) an increased aging of parts inventory. First, management focused its efforts during 1991 to improve inventory turns as a means to improve working capital utilization. Inventory minimization continued to be a high priority of management into 1992. Second, the significant economic downturn faced by the Company resulted in lower sales volume as discussed previously. In addition, the Company experienced a substantial increase in certain finished goods inventory. As part of management's ongoing evaluation of potentially excess and obsolete inventory including current and future market and economic factors, together with working capital utilization objectives, provisions to record the excess finished goods inventory at net realizable value were required. Lastly, the Company has experienced an increased aging of parts inventory due to declining sales volume and the consequent decline in machine populations in the field. As part of management's ongoing evaluation of parts excess and obsolete reserve requirements, management evaluated current part inventory quantities in comparison to current and future market and economic conditions. The evaluation indicated an impairment of the net realizable value of certain quantities of parts inventory. Machine population is expected to decline over the next several years and, as a result, management plans to focus substantial attention on the parts inventory control.

The Trailer Segment's gross margin percentage decreased to 13.2% in 1991 from 15.9% in 1990. The decrease was a result of lower new trailer demand and substantially underutilized manufacturing capacity. Sales mix was virtually unchanged from 1990 to 1991, and therefore did not impact the overall gross margin percentage comparison. Due to the underutilized manufacturing capacity in the domestic trailer manufacturing industry and reduced demand for new trailers, price competition was severe on new trailers. As a result, the gross profit percentage realized on new trailer sales was much lower than that on used trailers, replacement parts and service.

Unit sales of new truck trailers in the United States have historically experienced significant short-term fluctuations due to changing economic conditions. However, over the longer term, new truck trailer unit sales have exhibited growth generally in line with increases in the U.S. gross national product. Due to the poor economic conditions in the United States during 1990 and 1991, unit sales of new truck trailers were at their lowest levels since 1983 and in 1991 were approximately 32% below unit sales in 1988, the last full year before the Fruehauf acquisition.

The Trailer Segment's provision for excess and obsolete inventory increased by approximately $3.9 million over 1990. The principal factor contributing to the increased provision was the decline in the net realizable value of certain new and used trailer inventory, as well as certain parts inventory. The used trailer market continued to soften in the latter part of 1991, resulting in market prices falling below Fruehauf's carrying value of the related used trailers. In other cases certain used trailers remained in inventory for extended periods of time and aged by one model year. This aging adversely impacted the net realizable value of such trailers. Additionally, Fruehauf increased its reserves for replacement parts inventory. Due to the existence of quantities of seasonal products and truck equipment that were over one model-year old, a provision to record the reduction of the parts inventory to its lower net realizable value was required.

Income (Loss) From Operations

Operating earnings (losses) for the Heavy Equipment Segment were ($11.3) million in 1991, as compared to $23.3 million in 1990 for the Heavy Equipment Segment. While engineering, selling, and administrative expenses decreased for the Heavy Equipment Segment from 1990 to 1991, the aforementioned reductions in sales and gross profit led to the operating profit decline.

Fruehauf's operating income was $19.3 million for the year ended December 31, 1990. During 1991, Fruehauf had an operating loss of $23.2 million. While engineering, selling, and administrative expenses remained stable from 1990 to 1991, the aforementioned reductions in sales and gross profit led to the operating profit decline. Additionally, a nonrecurring restructuring charge of $15.8 million recorded in the fourth quarter of 1991 contributed significantly to the decline in operating profit. These restructuring costs represented provisions for the anticipated future cost of implementing a restructuring of Fruehauf's distribution system and other nonrecurring costs related to streamlining Fruehauf's manufacturing operations.

Other Income (Expense)

Interest income decreased $1.6 million in 1991 as compared to 1990 due to reduced average cash balances in 1991 and lower interest rates throughout the year. The lower cash balances resulted largely from the repayment of debt. Interest expense decreased $16.4 million in 1991 as compared to 1990, primarily as a result of lower debt outstanding and reduced interest rates on the borrowings. The reduction in debt outstanding was achieved by generation of cash from operations, continued efforts to dispose of excess facilities and assets held for sale, as well as from proceeds of the Fruehauf IPO. The lower interest rates were achieved by modification of some of the Company's debt facilities in September 1990 and elimination of certain debt facilities with high rates in conjunction with the aforementioned public offering.

The Company's share of earnings from unconsolidated affiliates was $4.2 million in 1991, down from $7.5 million in 1990. Royalty income earned during the year from licensees of Fruehauf totaled $3.2 million in 1991 as compared to $5.2 million in 1990. The decrease in the earnings from unconsolidated affiliates and royalty income is largely due to the worldwide economic slowdown faced by the trailer segment's licensees and affiliates as well as a sale of a portion of the Company's share of its largest unconsolidated affiliate in mid 1991. The decrease in royalty income was also due to a new trademark and licensing agreement entered into in the second quarter of 1991.

The Company recorded a $15.0 million gain as a result of the Fruehauf IPO and the completion of certain of Fruehauf's recapitalization transactions. The Company recognized a $7.2 million gain in 1991 on the sale of excess assets, including a $6.6 million gain on the sale of CEMCO's operating assets. Other expense of $2.4 million and $0.4 million for 1991 and 1990, respectively, includes the loss on sale of affiliate stock in 1991 and various other immaterial items.

The Company's provision for income taxes generally represents taxes withheld on foreign royalties. As such, any fluctuation in the provision for income tax is due to fluctuations in foreign royalties.

Minority interest is reflected as a result of the July 1991 Fruehauf IPO and certain recapitalization transactions.

On September 30, 1990, Fruehauf refinanced the majority of its then outstanding long-term debt. A onetime extraordinary loss of $2.2 million was recorded to write-off the unamortized debt issue costs relating to the refinanced debt.

Liquidity and Capital Resources

Terex owns approximately 22.6% of the outstanding common stock of Fruehauf and presently accounts for its investment using the equity method (see Note A -- "Significant Accounting Policies" and Note D -- "Investment in Fruehauf Trailer Corporation" to the Consolidated Financial Statements for December 31, 1992). By the terms of debt agreements of both companies, neither company may participate in the debt service of the other. Generally, funds cannot be transferred between the companies except for the reimbursement of reasonable expenses incurred on the other's behalf.

On May 20, 1993, Terex entered into the Lending Facility with Foothill. An interim facility provided for cash advances to the Company of up to $17.5 million. A permanent facility became effective as of August 24, 1993 which provides for up to $20 million of cash advances and guarantees of bank letters of credit and is secured by substantially all domestic cash and receivables of the Material Handling and Heavy Equipment Segments. The balance outstanding under the Lending Facility was $18.7 million as of September 30, 1993. As of July 31, 1993, the Company was not in compliance with the tangible net worth covenant under the Lending Facility. Following the closing on August 20, 1993 of Fruehauf's restructuring and financing transactions described in "Business - Fruehauf Trailer Corporation," Foothill agreed that the Company's noncompliance with the tangible net worth covenant under the Lending Facility was no longer continuing. Foothill also waived the noncompliance. The Company believes, based on management's current estimates, that it will be in compliance with such covenant over the next twelve months.

In addition to the Lending Facility, the Company has arranged similar financing for TEL, in the form of a pd28.0 million ($42.0 million) credit facility including up to pd13.0 million ($19.5 million) non-recourse discounting of TEL accounts receivable which meet certain credit criteria plus additional facilities for tender and performance bonds and foreign exchange contracts. During the second half of 1993, the Company experienced liquidity constraints, primarily because of continuing operating losses. During this period, a significant amount of accounts payable were aged 60 days or more and certain vendors required COD or advance cash payments before shipping materials. As a result, the Company's manufacturing facilities operated at less than optimal levels, and the availability of inventory for parts sales, on which the Company generally realizes higher gross margins, was adversely affected.

On December 20, 1993, in order to provide additional liquidity to the Company, the Company completed the private placement of 1,200,000 shares of the Preferred Stock and 1,300,000 Warrants for aggregate net proceeds to the Company of $27.2 million. The proceeds of such private placement are being used by the Company for additional working capital. The Company is also generating cash through the sale of excess inventory in the Heavy Equipment Segment, deferring certain capital expenditures, selling certain real estate and other assets and continuing corporate wide cost containment efforts.

Management believes that the Lending Facility together with these additional financing and cash generating activities will allow the Company to meet its operating payment obligations, including payments to vendors, on a timely basis which will improve the Company's ability to take advantage of improved market conditions, especially in the Material Handling Segment.

In December 1993, the Company repurchased $5.0 million principal amount of the Secured Notes for approximately $4.5 million, including accrued interest. In addition, the Company sold 1,000,000 shares of Fruehauf common stock for aggregate proceeds of approximately $3.0 million and will repurchase approximately $3.0 million of the Secured Notes in the second quarter of 1994, as required by the indenture for the Secured Notes. See "The Company - Recent Developments." In addition to such repurchase obligation and approximately $27.6 million of interest on the Secured Notes, Subordinated Notes and Lending Facility (of which approximately $12.9 million has been paid as of February 1), the Company's debt service requirements for 1994 include approximately $14.4 million in July 1994 for a required sinking fund payment on the Subordinated Notes and the maturity of a note issued to the seller in connection with the Clark Acquisition. Management believes that selling certain real estate and other assets and other cash generating activities discussed above will allow the Company to meet these requirements as they come due. Management is also considering other actions, including the sale of certain non-strategic businesses and additional sales of other assets, which may be necessary for the Company to meet its operating and debt service obligations.

The indentures governing the Notes require among other things that the Company maintain the Net Worth Covenants and Collateral Covenant. In the event that the Company's net worth is not in excess of the amount required under the Net Worth Covenants for any two consecutive quarters, the Company must offer to repurchase, at par plus accrued interest, 20% of the outstanding principal amount of the Notes. In the event the Company is not in compliance with the Collateral Covenant at the end of any calendar quarter, the Company must offer to repurchase, at par plus accrued interest, $16.0 million principal amount of the Secured Notes or such greater amount as would be necessary to bring the Company into compliance with the Collateral Covenant. As of September 30, 1993, the Company's tangible net worth as defined in the Note indentures was less than the $15 million minimum set forth in the indentures. Management believes that the Company was in compliance with the Net Worth and Collateral Covenants at December 31, 1993. If the Company continues to sustain losses from operations, it may not be in compliance with the Net Worth Covenants in the future. If any offer to repurchase Notes were required to be made, it is likely that the Company would require additional funding to complete the offer, and if such funding were unavailable to it, the Company would be unable to comply with the terms of the Notes and the maturity of the Notes may be accelerated. Such circumstances would result in a material adverse impact on the Company and its financial position.

Terex cash and cash equivalents, including restricted cash and investments, totaled $13.5 million and $37.2 million at September 30, 1993 and December 31, 1992, respectively. Certain provisions of the Company's previous lending arrangement with a commercial bank (the "Bank Lending Agreement") required specified amounts of cash to be deposited in a cash collateral account when certain conditions exist. Restricted cash and investments held in such collateral accounts totaled $11.5 million at December 31, 1992, which are presented as "Restricted Cash" in the Condensed Consolidated Balance Sheet for December 31, 1992. Terex has entered into the new Lending Facility which replaced the Bank Lending Agreement. In connection therewith, Terex will continue to utilize letters of credit previously issued under the former Bank Lending Agreement until their expiration. At September 30, 1993 the unexpired letters of credit are cash collateralized by a total of $4.6 million in a cash collateral account. These cash balances will be made available to the Company as the underlying letters of credit expire.

Terex used cash for operating activities of $28.0 million during the nine months ended September 30, 1993, and generated cash from operating activities of $22.7 million in 1992. Such cash was principally used to fund operating losses, interest payments and costs of restructuring the Material Handling Segment's operations partially offset by reductions in receivables and inventory. The reductions in receivables and inventory result from the Company's focused efforts to more effectively utilize working capital. Management expects to continue the Company's efforts to reduce receivables and inventory during 1994 as part of the Company's cash generating activities discussed above. In particular, management believes that required inventory levels in the Material Handling Segment have been reduced as a result of return of certain production to the United States and Germany from Korea during 1993 because the Company will no longer experience the significant lead times associated with the shipping of product from Korea.

Net cash provided by Terex from investing activities of $0.9 million during the nine months ended September 30, 1993 principally reflects the sale of surplus assets in Germany offset by cash used to finance capital expenditures. Net cash used by Terex for investing activities of $94.8 million in 1992 principally reflects cash used to finance the Clark Acquisition, net of cash acquired, and capital expenditures. Cash flow from investing activities in 1992 also included $4.6 million of payments on behalf of and advances to Fruehauf. Proceeds from the sale of surplus assets in Germany in 1993 were approximately $10.1 million. Capital expenditures were $8.5 million during the nine months ended September 30, 1993, including approximately $5.3 million to prepare production lines in the U.S. and Germany for the production of lift trucks formerly produced in Korea, and $5.4 million during 1992. The purchase price of the Clark Acquisition was approximately $91.1 million, which was funded by $85 million in cash and a $6.1 million seller note. In connection with the Clark Acquisition, the Company established reserves for restructuring costs expected to be incurred in connection with the Company's plans to reorganize the operations of Clark by consolidating manufacturing and distribution operations. As of December 31, 1992, the remaining reserves totalled approximately $30.0 million, substantially all of which has been expended during 1993.

Terex generated cash of $10.7 million and $89.3 million from financing activities during the nine months ended September 30, 1993 and the year ended December 31, 1992, respectively. As described above, the Company entered into the Lending Facility in May 1993 and had borrowed $18.7 million under this facility as of September 30, 1993. In conjunction with the Clark Acquisition in 1992, the Company refinanced a major component of its previously outstanding bank debt (the "Refinancing"). The Refinancing included the issuance of the Secured Notes and establishment of the $60 million Bank Lending Agreement. Proceeds from the issuance of the Secured Notes were used for the cash portion of the Clark Acquisition purchase price ($85 million), for the settlement of all amounts outstanding under its previous credit facility ($58 million), and for working capital and transaction costs. The Secured Notes are secured by substantially all inventory and property, plant and equipment of the Company's Material Handling and Heavy Equipment Segments, as well as the Company's investment in Fruehauf common stock. The Subordinated Notes holders have a secondary secured position in certain of the Company's assets.

In connection with the sale of the Secured Notes and obtaining the consent of the holders of the Company's existing Subordinated Notes to modification of the Subordinated Notes, the Company issued 658,409 common stock appreciation rights ("SAR's"). As of September 30, 1993 there were 543,794 SAR's outstanding. Of the outstanding SAR's, 461,385 may be exercised at the option of the holder thereof at any time on or after January 27, 1993, but not later than July 31, 1996, and the remaining 82,409 SAR's may be exercised not later than July 1, 1997. The SAR's entitle the holder to receive, in cash, an amount equal to the market appreciation in the Company's Common Stock between $11 per share, subject to adjustment, and the average price per share for the 30 consecutive trading days prior to the date of exercise.

In addition to the financial covenants discussed above, the indentures governing the Notes limit, among other things, Terex's ability to incur additional indebtedness, consummate mergers and acquisitions, pay dividends, sell business segments and enter into transactions with affiliates, as well as place limitations on change in control of Terex.

Contingencies and Uncertainties

In their opinion on the Company's Consolidated Financial Statements for December 31, 1992 included in this Prospectus, the Company's independent accountants have indicated that there are matters, including recurring losses from operations and a net capital deficiency, lack of availability of additional borrowings under the Company's Bank Lending Agreements and uncertainties with respect to future compliance with covenants of certain other debt agreements, which raise substantial doubt about the Company's ability to continue as a going concern. As described above under "Liquidity and Capital Resources," the Company has entered into the Lending Facility which provides up to $20 million in revolving credit loans and guarantees of letters of credit, and has arranged similar financing for TEL. The Company also completed the private placement of Preferred Stock and Warrants, which provided aggregate net proceeds to the Company of $27.2 million for working capital. The Company is also generating cash through the sale of excess inventory in the Heavy Equipment Segment, deferring capital expenditures, selling certain real estate and other assets and continuing corporate wide cost containment efforts. Management believes that the Lending Facility and other financing and cash generating activities will allow the Company to meet its obligations on a timely basis.

Terex has facilities at numerous geographic locations, which are subject to a range of federal, state, local and foreign environmental laws and regulations. Compliance with these laws has, and will, require expenditures on a continuing basis. See "Business -- Environmental Considerations."

As described in "Business -- Environmental Considerations," Fruehauf has identified environmental exposures at a number of Superfund and other sites, and is currently participating in administrative or court proceedings involving a number of these sites. Many of the proceedings are at a preliminary stage, and the total cost of remediation, the timing and extent of remedial actions which may be required, and the amount of Fruehauf's liability, if any, with respect to these sites can not presently be estimated. The Company believes that it could have contingent responsibility for certain of Fruehauf's liabilities with respect to Fruehauf's environmental matters if Fruehauf fails to discharge its obligations, but only to the extent that such liabilities arose during the time period during which Terex was the controlling stockholder of Fruehauf. The Company believes that Fruehauf's significant environmental liabilities predate Terex's acquisition of Fruehauf, and therefore any contingent responsibility of the Company is not expected to have a material adverse effect on the Company.

Foreign Operations

The Heavy Equipment Segment of the Company operates its TEL subsidiary in Motherwell, Scotland. Equipment manufactured by TEL is distributed in the United States and around the world. Unit Rig maintains nine owned or leased locations outside of the United States for parts distribution. The Heavy Equipment Segment also imports certain new equipment from Japan for sale in the U.S.

The Material Handling Segment operates divisions in Mulheim, Germany and Seoul, Korea. The German facility manufactures forklifts for sale in the European market. The Seoul facility primarily manufactures light IC transaxles which are shipped to the Lexington, Kentucky facility, completed and sold in the U.S. Fruehauf's international operations include affiliates and licensees located worldwide.

Export sales from the Company's domestic operations were $92.3 million, $83.3 million, and $117.3 million in 1992, 1991, and 1990, respectively. See Note P
- -- "Business Segment Information" in the Company's Consolidated Financial Statements for December 31, 1992.

Recent Pronouncements

In November 1992, the FASB issued SFAS No. 112, "Employers' Accounting for Postemployment Benefits." This pronouncement establishes accounting and reporting for the estimated cost of benefits provided by an employer to former or inactive employees after employment but before retirement. In most cases, the Company believes that it already accounts for such benefits on an accrual basis. Therefore, the impact of adoption is not anticipated to have a significant effect on the Company's financial position or results of operations. The Company will adopt this standard during the first quarter of 1994.

BUSINESS

General

Terex is a global provider of capital goods and equipment used in the mining, commercial building, infrastructure, manufacturing and construction industries.
Through its Heavy Equipment Segment, the Company designs, manufactures and markets heavy-duty, off-highway earthmoving, construction, lifting, material handling and aerial lift equipment, and related components and replacement parts. Such products are used primarily by construction, mining, logging, industrial and government customers in the building of roads, dams and commercial and residential buildings; supplying coal, minerals, sand and gravel; and the handling of materials in the scrap, refuse and lumber industries.

Through its Material Handling Segment, the Company is engaged in designing, manufacturing and marketing a complete line of internal combustion and electric lift trucks, electric walkies, automated pallet trucks, industrial tow tractors and related replacement parts. Material Handling Segment products are used in material handling applications in a broad array of manufacturing, distribution and transportation industries. The Material Handling Segment consists of CMHC and certain affiliate companies which were acquired by the Company on July 31, 1992 from Clark Equipment Company pursuant to the Clark Acquisition.

Terex also owns an approximate 22.6% equity interest in Fruehauf. Fruehauf designs, manufactures and markets truck trailers, making a wide range of van, refrigerated, platform, tank, dump trailer and other models, and related parts and accessories. Such products are used principally in the trucking and transport industries. This business was acquired in 1989.

For financial information about the Company's industry and geographic segments, see Note P -- "Business Segment Information" of the Company's Consolidated Financial Statements for December 31, 1992 as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations."

The Company's long-term strategy has been, and continues to be, to seek out acquisitions in the capital goods industry where aggressive management can achieve substantial improvements in profitability and cash flow.

In an effort to reduce costs and facilitate administrative functions, the Company's administrative office in Green Bay, Wisconsin was closed during the second quarter of 1993 and relocated to offices in Westport, Connecticut.

Material Handling Segment

Clark was acquired by the Company on July 31, 1992. Clark is a leading North American and European designer, manufacturer and marketer of a complete line of IC and electric lift trucks, electric walkies, automated pallet trucks, industrial tow tractors and related replacement parts. Clark's U.S. operations are located in Lexington, Kentucky, Danville, Kentucky and Horsham, Pennsylvania. Clark's international operations are located in Mulheim-Ruhr, Germany and Seoul, Korea. Clark also owns a state-of-the-art training and research center in Lexington, Kentucky. Clark's products are distributed through an established global dealer network which includes more than 440 locations. Clark has what management believes is the largest installed fleet in North America, with over 250,000 units. It is estimated that in excess of 320,000 Clark trucks are presently in operation worldwide. Historically, 80% of Clark's revenues have been derived from new product sales and 20% of revenues have been derived from supplying replacement parts to the lift truck aftermarket. Clark and its independent dealers sell to a diversified base of customers in a variety of industries. Clark has 108 independent North American dealers who operate 252 outlets, with all 252 dealer outlets providing both sales and servicing. Clark's European distribution network consists of 106 independent dealers and three company-owned dealers operating in 52 countries.

Clark products are sold through a system which enables customers to design a truck which meets their particular materials handling needs. Customers can add attachments such as container handlers, side shifters, roll clamps, block handlers, carton clamps, push-pulls (slip-sheet) and fork positioners. Clark also offers advanced electronics and software which enables on-line inventory control and instantaneous truck diagnosis. Clark and its dealers sell to a diversified customer base with no single customer accounting for more than 2% of Clark's revenues.

Clark currently offers 116 basic truck designs within six major product lines:
light IC trucks (1.0 to 5.0 tons), heavy IC trucks (5.5 to 47.5 tons), narrow-aisle and very narrow-aisle trucks, electric counterbalanced trucks (1.3 to 6.0 tons), electric walkies and tow tractors.

Light IC trucks are used for general warehousing needs and are generally powered by liquid propane and well suited for manufacturing and distribution applications which require a high degree of maneuverability. Heavy IC trucks are specialty products designed for use in more demanding situations such as heavy manufacturing or container handling applications. Narrow-aisle and very narrow-aisle trucks provide solutions for high density storage needs and operate in six-to-eight foot aisles and reach heights of more than 30 feet. Electric counterbalanced trucks are designed for indoor use in warehousing, manufacturing, distribution and other applications and are powered by a rechargeable electric battery. For environmental reasons, electric trucks are becoming more popular. Electric walkies are generally used in transporting and order-selecting. Tow tractors are units designed to pull one or more trailers.
The largest market for tow tractors is for airport baggage handling.

The CLARK tradename is the leading North American brand of IC and electric lift trucks, with major competitive brands offered by Hyster-Yale, Toyota, Caterpillar, Crown and Raymond. Clark's major European competitors are Linde Group, Toyota, Fiat, Jungheinrich, Hyster-Yale and Caterpillar.

Clark's major suppliers include Samsung, Prime Mover, Mitsubishi, Hydroelectric Lift Truck, General Electric, Kurdziel Iron and Lufkin Industries. Current and potential suppliers are evaluated on a regular basis on their ability to meet Clark requirements and standards.

Following the Clark Acquisition in July 1992, Clark began implementing initiatives intended to reduce its manufacturing and operating costs. These initiatives have included and will continue to include consolidation of engineering, manufacturing and parts facilities. Clark transferred production of its light IC lift truck chassis from Korea to Lexington, Kentucky during 1993.

Heavy Equipment Segment

Terex Division and Terex Equipment Limited

The historical business of Terex Division and TEL evolved during more than 25 years of ownership by General Motors Corporation prior to 1981. The Terex Division and TEL are jointly hereinafter referred to as the "Terex Business." Terex Division's marketing efforts in the United States serve the needs of North, Central and South America, while TEL serves the remainder of the international market. TEL manufactures the products of the Terex Business. There are three principal product lines of the Terex Business: off-highway rigid and articulated haulers, scrapers and wheel loaders. A "hauler" is an off-road dump truck with a capacity in excess of 25 tons. Haulers produced in the Terex Business have capacities up to 120 tons. A "scraper" is an off-road vehicle, commonly referred to as an "earth mover," that loads, moves and unloads large quantities of soil for site preparations, including roadbeds. A "wheel loader" is a vehicle that loads materials onto trucks, conveyors and similar equipment. These products perform a wide range of earthmoving functions in open pit mining and in many types of heavy construction, including highway, dam and waterway construction; commercial and industrial site preparation; general land improvement and real estate development; and structural renovation and replacement. The Terex Business's main competitors are Caterpillar, VME Group, Komatsu and Dresser.

The Company has substantially restructured the Terex Business operations by:
(i) eliminating all manufacturing operations at the Hudson, Ohio facility that it formerly leased; (ii) consolidating virtually all manufacturing operations into TEL's manufacturing facility in Motherwell, Scotland; and (iii) selling excess inventory. The Company has increased production of the Terex Business since its acquisition in 1987 without expanding the Motherwell facility or significantly increasing administrative costs.

In 1987, TEL entered into a joint venture agreement with Second Inner Mongolia Machinery Company for the production of haulers in China. The joint venture company, North Hauler Limited Liability Company, manufactures heavy trucks, principally used in mining, at a facility in Baotou, Inner Mongolia, People's Republic of China. The joint venture began producing units in late 1990.

Unit Rig

On July 15, 1988, the Company purchased certain domestic and foreign assets and operations of Unit Rig & Equipment Co. ("URECO"), primarily through Unit Rig, Inc., a wholly-owned subsidiary of the Company. Unit Rig, Inc. was subsequently merged into Terex, and now operates as the Unit Rig Division. Unit Rig is headquartered in Tulsa, Oklahoma.

URECO pioneered the development of the diesel electric drive, rear dump hauling truck for use in open pit mining operations. Extensive experience acquired in applications of high horsepower diesel engines and electric machinery on drilling rigs encouraged URECO to develop a new line of mining trucks. The trucks' power came from a diesel engine driving a generator which, in turn, provided power for individual electric motors in each of the rear wheels. The prototype truck was completed in 1960 and the first production models entered service in 1963. The truck gained market share steadily because of its greater capacity and reliability over conventional mechanical power-train trucks. While mechanical trucks were limited by the capacity of their transmissions and axles to loads of 65 tons, Unit Rig's trucks could at that time carry loads up to 85 tons. Unit Rig's current LECTRA HAUL product line consists of a series of rear dump hauler trucks, with current payload capacities ranging from 100 to 240 tons, and bottom dump haulers with capacities of 180 to 270 tons.

In 1984, URECO purchased the Dart line of wheel loaders and mechanical drive haulers. This product line consists of the Dart 600C mechanical drive wheel loader which has a bucket capacity up to 23 cubic yards and rear dump trucks ranging in capacity from 85 to 130 tons. The Dart line also includes a tractor-trailer bottom dump hauler with capacities from 120 to 160 tons.

The present principal markets for Unit Rig products are copper, gold, coal and iron mines. Currently, Unit Rig's major customers are mining companies in North and South America, Africa, Australia and other countries overseas, with Unit Rig's foreign sales, including those in Canada, accounting for over 70% of its revenues.

Unit Rig's largest competitors are Caterpillar, Komatsu and Dresser.

Koehring Cranes & Excavators

Koehring Cranes & Excavators, Inc. was established as a wholly-owned subsidiary of the Company to acquire certain assets and operations included in the construction equipment group of AMCA International Limited. This subsidiary was merged into Terex and now operates as the Koehring Cranes & Excavators Division. Koehring, headquartered in Waverly, Iowa, designs, manufactures and markets a broad line of hydraulic excavators and hydraulic telescoping cranes sold under the well recognized trade names of KOEHRING and LORAIN. Koehring's hydraulic excavators are used for certain sewer, water and underground excavation applications, as well as certain specialty applications in the logging and scrap industries. Hydraulic telescoping cranes are primarily used for construction and industrial applications.

Koehring's largest competitors in the hydraulic excavator market are Komatsu and Caterpillar. Koehring has two principal competitors in the hydraulic crane market -- Grove Manufacturing and PPM Cranes.

Mark Industries

On December 10, 1991, the Company acquired substantially all operating assets of Mark Industries. Mark is engaged in the manufacture and sale of aerial lift equipment: scissor lifts, boom lifts and a full line of replacement parts. Scissor lifts and boom lifts are used for repair, maintenance and construction of buildings, manufacturing facilities and equipment. These lifts are used for a wide spectrum of industrial applications, such as installation and repair of electrical and plumbing fixtures, drywall and ceiling installation, cleaning, repair and painting of production equipment, refineries, chemical plants and aircraft maintenance, in addition to common construction tasks such as siding, insulation and structural member installation.

Mark was subsequently merged into Terex and operates as a division of Terex. Mark was relocated to the Koehring facilities in Waverly, Iowa during 1992 in order to more effectively utilize existing capabilities and manufacturing facilities at the Waverly location.

Mark's largest competitor in the aerial lift industry is JLG Industries.

Northwest Engineering Company

The Company's Northwest Engineering Company ("Northwest Engineering"), is located in Waverly, Iowa, and is operated by Koehring. The Company continues to sell the products that established it in the construction machinery industry over 70 years ago. Northwest Engineering's products are considered "duty-cycle" machines, designed and constructed for constant heavy-duty operation under demanding conditions in applications such as scrap processing, material handling, dredging and aggregate mining, using magnets, clam shell buckets and drag bucket options. Dragline operations usually consist of a large scoop type bucket being dragged across the bottom of a pit to load the bucket with sand, gravel or other material. The material is then either stockpiled for later use or sale or loaded for transportation. Clamshell operations consist of a large bucket with two halves that can be opened or closed with use of a cable. Material can be mined, moved to or from a stockpile, or loaded to or from transportation utilizing a clamshell. The sale of replacement parts for Northwest Engineering products constitutes an important part of the Northwest Engineering business. Because of the durability and relatively high cost of replacing such machines, many users seek to repair rather than replace them.

Northwest Engineering's competitors include Link Belt, American and Manitowoc.

BCP Construction Products

The Company's BCP Construction Products Division, located in Waverly, Iowa and operated by Koehring, is engaged in the sale of replacement parts for construction machinery formerly produced by Bucyrus-Erie Company ("Bucyrus-Erie"). A significant portion of the Company's acquisition of certain assets of the Construction Machinery Division of Bucyrus-Erie (the "Bucyrus Acquisition") related to this replacement parts business. For many years, Bucyrus-Erie produced a variety of construction machinery products, including hydraulic truck cranes, draglines, clamshells and other products which continue in active use today.

Additionally, the Company acquired the right to produce the DYNAHOE in the Bucyrus Acquisition. The DYNAHOE models 290K and 490K backhoe / loader will dig up to 19 feet, which is the deepest in the industry. The DYNAHOE is used primarily for underground excavation in connection with water, sewer and electrical utility installations. The DYNAHOE offers a major benefit in large metropolitan markets because, as opposed to excavators, it operates without a tail swing, the absence of which permits the DYNAHOE to operate in restricted space. Similar, although smaller, excavating units are produced by competitors such as J. I. Case Company (a subsidiary of Tenneco), John Deere and Caterpillar.

Fruehauf Trailer Corporation

On July 14, 1989, the Company, through Fruehauf, acquired certain assets and assumed certain liabilities related to the trailer and maritime businesses of Fruehauf Corporation. Fruehauf is a Delaware corporation which, prior to July 1991, was wholly-owned by Terex Holdings Corporation ("Terex Holdings"), a Delaware corporation which, in turn, was wholly-owned by the Company. In July 1991, Fruehauf completed a recapitalization and consummated the Fruehauf IPO. Because Terex Holdings and Fruehauf were wholly-owned prior to the Fruehauf IPO, the Company consolidated the financial results of Fruehauf in its financial statements. Following the Fruehauf IPO and as of December 31, 1991, the Company owned approximately 42% of the outstanding Fruehauf common stock, and retained voting control of more than 50% of Fruehauf's outstanding common stock through a voting trust with the Company's principal stockholder and certain individuals, who together owned approximately 21% of Fruehauf's outstanding common stock. As a result, the Company consolidated Fruehauf's financial results with those of the Company for financial reporting purposes during 1991, and the financial interests of Fruehauf's minority stockholders were reflected on the financial statements of the Company. The voting trust terminated during 1992 and, as a result of the Fruehauf Restructuring described below, the Company's direct ownership of Fruehauf was reduced to approximately 26% and, accordingly, the Company presently accounts for its ownership interest in Fruehauf using the equity method. The Company's consolidated financial statements contained in this Prospectus are presented giving effect to the deconsolidation of Fruehauf as of January 1, 1992.

Fruehauf is headquartered in Southfield, Michigan and is a United States manufacturer and marketer of truck trailers and related parts and has an international presence through its foreign license arrangements and export sales. Fruehauf currently markets its products through a distribution network of 32 company-owned branches dedicated to new trailer and replacement part sales, purchasing and selling used trailers, and performing maintenance and repair services, and a network of approximately 250 independent dealers. In addition, Fruehauf currently owns various interests in foreign trailer manufacturers, including an equity interest in SESR, Europe's largest trailer manufacturer, as well as interests in trailer manufacturers in Japan, South Africa and Mexico. Fruehauf generates royalty income from licensing trademark and patent rights to foreign trailer manufacturers, including those in which Fruehauf has an equity interest.

On August 20, 1993, Fruehauf entered into agreements with its existing lenders, a new lender and a number of investors which resulted in a restructuring of existing debt, and provided for a new $25 million credit facility and $20.5 million of new equity (the "Fruehauf Restructuring"). The $25 million of new credit is in the form of an inventory and receivables revolving credit facility provided by Congress Financial Corporation. The $20.5 million of new equity arose from the private placement of approximately 7,841,000 shares of Fruehauf common stock at $1.50 per share and approximately $8,783,000 of convertible subordinated debt. The convertible subordinated debt has since been converted into approximately 5,855,000 additional shares of Fruehauf common stock. As part of the restructuring, Terex agreed with Fruehauf to accept approximately 2,251,000 shares of Fruehauf common stock in satisfaction of approximately $13.5 million of indebtedness of Fruehauf owed to Terex, which shares were issued to the Company on December 23, 1993. As a result of the restructuring and financing transactions, Terex's ownership of Fruehauf decreased to approximately 26%. In December 1993 the Company sold 1,000,000 shares of Fruehauf common stock, reducing its ownership of Fruehauf to approximately 22.6%. The net proceeds of such sale, approximately $3.0 million, will be used by the Company to offer to purchase Secured Notes in the second quarter of 1994 pursuant to the indenture for the Secured Notes.

The Fruehauf Restructuring was completed following a period of severe liquidity constraints which adversely affected Fruehauf's operations. The Fruehauf Restructuring was consummated to fund its turnaround plan (the "Turnaround Plan"). Key elements of the Turnaround Plan which Fruehauf is implementing include reductions of fixed costs to lower Fruehauf's break-even levels, obtaining access to sufficient working capital and vendor credit and restructuring of bank credit facilities. Actions contemplated by the Turnaround Plan include further reduction of excess manufacturing capacity, deemphasis of vertical integration and rationalization of Fruehauf's management infrastructure to levels more appropriate for Fruehauf's current business volume.

Environmental Considerations

The Company generates hazardous and nonhazardous wastes in the normal course of its operations. As a result, the Company is subject to a wide range of federal, state, local and foreign environmental laws and regulations that (i) govern activities or operations that may have adverse environmental effects, such as discharges to air and water, as well as handling and disposal practices for hazardous and nonhazardous wastes, and (ii) impose liability for the costs of cleaning up, and certain damages resulting from, sites of past spills, disposals or other releases of hazardous substances. Compliance with such laws and regulations has, and will, require expenditures by the Company on a continuing basis.

Fruehauf is contingently liable for portions of remedial costs at numerous off-site waste disposal sites including those previously used by operations of Fruehauf's predecessor. Fruehauf has received notice that it is considered a "Potentially Responsible Party" under the Comprehensive Environmental Response, Compensation, and Liability Act or other similar state laws at approximately 20 Superfund sites and has also identified environmental exposures at approximately 26 other sites not designated as Superfund sites. The Company believes that it could have contingent responsibility for certain of Fruehauf's liabilities with respect to Fruehauf's environmental matters if Fruehauf fails to discharge its obligations, to the extent that such liabilities arose during the time period during which Terex was the controlling stockholder of Fruehauf.
The Company believes that Fruehauf's significant environmental liabilities predate Terex's acquisition of Fruehauf, and therefore any contingent responsibility of the Company is not expected to have a material adverse effect on the Company.

Research and Development

The Company maintains an engineering staff at several of its locations which designs new products and improvements in existing product lines. Such costs incurred in the development of new products or significant improvements to existing products amounted to $11.8 million, $6.7 million and $4.0 million in 1993, 1992 and 1991, respectively.

Materials

Principal materials used by the Company in its various manufacturing processes include steel, castings, engines, tires, electric controls and motors, and a variety of other fabricated or manufactured items. In the absence of labor strikes or other unusual circumstances, substantially all such materials are normally available from multiple suppliers.

Seasonal Factors

Given that the Company markets a large portion of its products in North America and Europe, its sales of heavy equipment during the fourth quarter of each year (i.e., October through December) to the construction industry are usually lower than sales of such equipment during each of the first three quarters of the year because of the adverse effect of inclement winter weather. However, sales of heavy equipment to the mining industry, as well as sales of lift trucks, are generally less affected by such seasonal factors.

Distribution

The Heavy Equipment Segment, other than Unit Rig, markets its products, both original equipment and repair parts, generally through a worldwide dealership network. Unit Rig distributes its products and services directly to customers through its own distribution system.

The Company's heavy equipment dealers are independent businesses which generally serve the construction, mining, timber and/or scrap industries. Although these dealers carry products of a variety of manufacturers, and may or may not carry more than one of the Company's products, each dealer generally carries only one manufacturer's "brand" of each particular type of product. The Company employs sales representatives who service these dealers from offices located throughout the world.

Clark markets both original equipment and parts through a worldwide dealer network. Clark dealers generally market the full Clark product line and maintain comprehensive service capabilities. Clark dealers do not offer products competitive with any Clark product. Clark operates a dealer service organization designed to coordinate sales and promotional activities, provide ongoing dealer training and facilitate dealer communications.

Backlog

The Company's backlog as of December 31, 1993 and 1992 was as follows:

                                 December 31,
                             1993           1992
                           (in millions of dollars)
Heavy Equipment          $  80.7        $  85.4
Material Handling          152.7           83.2
     Total               $ 233.4        $ 168.6

As described above under "Material Handling Segment," Clark was acquired by the Company on July 31, 1992.

Substantially all of the Company's backlog orders are expected to be filled within one year, although there can be no assurance that all such backlog orders will be filled within that time period. The Company's backlog orders pertain primarily to new equipment orders. Parts orders are primarily filled on an as-ordered basis.

Competition

The Company is recognized as a significant competitor in the market for cranes, scrapers, large capacity haulers, and aerial lift equipment, but the Company is not a dominant manufacturer in the heavy equipment industry. The heavy equipment industry is dominated in most segments by large, diversified firms with much broader product lines and greater financial resources such as Caterpillar, Dresser Industries and Komatsu. The Company also competes with a number of specialty firms. The products of such specialty firms generally compete directly with one or more of the Company's product lines.

Clark produces the leading lift truck brand in North America, although the brand names of Hyster and Yale combined produce more lift trucks annually. Other major North American competitors include Toyota, Caterpillar and Komatsu in both IC and electric riders, and Crown and Raymond in electric riders alone.
In Europe, Clark competes with Linde Group, the European market leader, as well as Hyster-Yale, Toyota and Fiat. Clark also competes with a number of specialty firms.

Patents, Licenses and Trademarks

Several of the trademarks and trade names of the Company, in particular the TEREX, KOEHRING, LORAIN, UNIT RIG, MARKLIFT, DYNAHOE, CLARK, DREXEL, and POWRWORKER trademarks, are important to the business of the Company. The Company owns and maintains trademark registrations in countries where it conducts business, and monitors the status of its trademark registrations to maintain them in force and to renew them as required. The Company also takes steps, including legal action, to protect its trademark and trade name rights when circumstances warrant such action.

Employees

As of December 31, 1993, the Company had approximately 2,930 employees. Approximately 40% of the Company's employees are represented by labor unions which have entered into various separate collective bargaining agreements with the Company. Although the Company has experienced labor strikes in the past, the Company considers its relations with its personnel to be good.

Financial Information about Industry and Geographic Segments, Export Sales and Major Customers

Information regarding foreign and domestic operations, export sales, segment information and major customers is included in Note P -- "Business Segment Information" in the Notes to the Consolidated Financial Statements for December 31, 1992.

Properties

The following table outlines the principal manufacturing, warehouse and office facilities owned or leased by the Company and its subsidiaries:

Entity              Facility Location        Type and Size of Facility

                         The  Heavy Equipment Segment
Terex
 (Distribution
 Center)            Southaven, Mississippi * Warehouse and light manufacturing
                                               505,000 sq. ft.
Unit Rig **         Tulsa, Oklahoma          Manufacturing and office
                                               325,000 sq. ft.
Koehring            Waverly, Iowa            Manufacturing, warehouse and
                                               office 383,000 sq. ft.
Koehring            Waterloo, Iowa           Manufacturing and office
                                               66,000 sq. ft.
TEL                 Motherwell, Scotland     Manufacturing, warehouse and
                                               office 714,000 sq. ft.

The Material Handling Segment

CMHC                Lexington, Kentucky *    Manufacturing, warehouse and
                                               office 372,600 sq. ft.
CMHC                Lexington, Kentucky      Training and research and
                                               development 43,000 sq. ft.
CMHC                Danville, Kentucky       Manufacturing, utility and
                                               office 84,800 sq. ft.
Drexel
 Industries ***     Horsham, Pennsylvania    Manufacturing 55,000 sq. ft.
CMHC                Lexington, Kentucky*     Office 64,600 sq. ft.
CMHC                Lexington, Kentucky*     Office 1,900 sq. ft.
CMHC                Lexington, Kentucky*     Warehouse 59,500 sq. ft.
CMHC                Chicago, Illinois*       Warehouse and office 11,100 sq.
ft.
Clark Germany       Mulheim-Ruhr, Germany    Manufacturing, engineering, power
                                             generation, maintenance and office
                                             255,430 sq. ft.
Clark Germany       Saarn, Germany           Warehouse 430,000 sq. ft.
Clark Forklift
 Korea
 Incorporated       Seoul, South Korea       Manufacturing and office
                                              13,764 sq. ft.
Clark Forklift
 Korea
 Incorporated       Banwael, Korea           Manufacturing and office
                                              40,000 sq. ft.

* This facility is either leased or subleased by the indicated entity. ** Unit Rig also has 10 owned or leased locations for parts distribution and rebuilding of components, of which two are in the United States, two are in Canada and six are abroad. *** Drexel Industries, Inc. is an indirect subsidiary of Terex and an affiliate of CMHC.

Clark also operates seven sales and service branch locations, all of which are leased. The branch facilities consist of office and service space and generally range in size from 1,500 to 3,100 square feet per facility. Such branch facilities are suitable and adequate for Clark's use.

The properties listed above are suitable and adequate for the Company's use. The Company has determined that certain of its properties exceed its requirements. Such properties may be sold, leased or utilized in another manner and have been excluded from the above list.

Legal Proceedings

In October 1992, a Class Action complaint was filed purportedly on behalf of all persons who purchased Terex Common Stock during the period from January 2, 1990 through October 5, 1992 (the "Period") against the Company and its Chairman. This suit sought unspecified compensatory and punitive damages and alleged, among other things, that (i) the Company engaged in fraudulent accounting practices, improper reporting of taxes and the illegal manufacture of missile launchers for Iraq and (ii) the Company's Annual Report to Shareholders and its Commission reports on Forms 10-K and 10-Q issued during the Period contained materially false figures for assets, liabilities and/or shareholders' equity. A motion to dismiss the action filed by the Company was granted in September 1993. The plaintiff was granted an extension of time to file an amended complaint; however, the plaintiff determined not to proceed with the action. As a result, this action is no longer pending.

In December 1992, a separate Class Action complaint was filed purportedly on behalf of all persons who purchased Fruehauf common stock during the period from June 28, 1991 through December 4, 1992 against Fruehauf, the Company, certain of Fruehauf's officers and directors, namely, Randolph W. Lenz, Marvin B. Rosenberg, Arthur E. Rowe, G. Chris Andersen and Raymond J. Dempsey, and certain of the underwriters of the Fruehauf IPO, namely, Paine Webber Incorporated, Alex. Brown & Sons, Incorporated and Wertheim Schroeder & Co., Incorporated, in the United States District Court, Eastern District of Michigan, Southern Division, seeking unspecified compensatory and punitive damages. The complaint alleges, among other things, that, in connection with the Fruehauf IPO, the defendants misrepresented Fruehauf's liquidity and the status of compliance with Fruehauf's credit facilities at the time of the Fruehauf IPO. This action is at a very early stage; however, the Company believes that the claims are without merit and that they have valid defenses to the claims made. The Company has not recorded any loss provision for this litigation.

The Company is involved in other various legal proceedings, including product liability and workers' compensation liability matters, which have arisen in the normal course of its operations. Management believes that the final outcome of such matters will not have a material adverse effect on the Company's consolidated financial position.

MANAGEMENT

Executive Officers and Directors

The following individuals are currently directors of the Company:

                                       Positions and           First Year
    Name                Age         Offices with Company    Elected Director

Randolph W. Lenz       47       Chairman of the Board,           1983
                                Chief Executive Officer
                                and Director

Ronald M. DeFeo        41       President, Chief Operating       1993
                                Officer and Director

Marvin B. Rosenberg    53       Senior Vice President,           1992
                                General Counsel,
                                Secretary and Director

G. Chris Andersen      55       Director                         1992

Bruce I. Raben         40       Director                         1992

David A. Sachs         34       Director                         1992

Adam E. Wolf           79       Director                         1983

Mr. Lenz joined the Company as Chairman of the Board and a director in 1983. Mr. Lenz also served as Chairman of the Board and a director of Fruehauf from its acquisition in 1989 until August 1993. He joined Terex's predecessor, Northwest Engineering, as Chairman of the Board and a director in 1983 and continues to serve in such capacities with Terex. In addition, Mr. Lenz has also been the Chairman of the Board and a director of CBC Bancorp, Inc., a bank holding company, since 1992.

Ronald M. DeFeo became a director of the Company in 1993 and was appointed President and Chief Operating Officer of the Company on October 4, 1993. He has also served as the President of Clark since May 1993. Prior to joining Terex on May 1, 1992 and serving as President of Terex's Heavy Equipment Segment, Mr. DeFeo was a Senior Vice President of J.I. Case Company, the farm and construction equipment division of Tenneco Inc., and also served as a Managing Director of Case Construction Equipment throughout Europe. While at J.I. Case, Mr. DeFeo was also a Vice President of North American Construction Equipment Sales and General Manager of Retail Operations.

Mr. Rosenberg was appointed a director of the Company in 1992 and was appointed as Senior Vice President of the Company effective January 1, 1994. He has served as Secretary and General Counsel of the Company since 1987. Mr. Rosenberg was also appointed a director of Fruehauf in 1992 and served as Secretary of Fruehauf since it was organized in March 1989 until August 1993. Since 1987, he has also been General Counsel of KCS Industries, L.P., a Connecticut limited partnership ("KCS"), an entity that, until December 31, 1993, provided administrative, financial, marketing, technical, real estate and legal services to the Company and its subsidiaries. Previously, for 15 years, he had been General Counsel for, and a partner of, Cambridge Research and Development Group, a company engaged in the commercialization of new technology and the acquisition and operation of industrial companies.

Mr. Andersen was appointed director of the Company in 1992 and served as a director of Fruehauf from July 1991 until August 1993. Mr. Andersen has been Vice Chairman of PaineWebber Incorporated ("PaineWebber") since March 1990. Prior to joining PaineWebber, Mr. Andersen was Managing Director for nine years of Drexel Burnham Lambert Incorporated ("Drexel Burnham"), an investment banking firm which filed for protection under Chapter 11 of the United States Bankruptcy Code in 1990. Mr. Andersen is a director of Sunshine Mining Company.

Mr. Raben was appointed director of the Company in 1992. Since 1990, Mr. Raben has been an Executive Vice President and Co-Head of the Corporate Finance Department at Jefferies. Mr. Raben was employed by Drexel Burnham from 1978 to 1990 where he served in various capacities including Managing Director.

Mr. Sachs was appointed director of the Company in 1992 and served as a director of Fruehauf from November 1992 to March 1993. Mr. Sachs is employed at TMT-FW, Inc., an affiliate of Taylor & Co., a private investment firm based in Fort Worth, Texas. TMT-FW, Inc. is one of two general partners of EBD, L.P., which is the sole general partner of The Airlie Group L.P. ("Airlie"). At TMT-FW, Inc., Mr. Sachs is engaged in the investment activities of both Airlie and Taylor & Co. Prior to joining TMT-FW, Inc. in 1990, Mr. Sachs was employed by Columbia Savings and Loan Association from 1984 to 1990 where he served in various capacities, including Executive Vice President.

Mr. Wolf became a director of the Company in 1983. Mr. Wolf has been principally self-employed as an attorney throughout his career.

The following table sets forth, as of January 1, 1994, the respective names and ages of the Company's executive officers indicating all positions and offices held by each such person.

Name                          Age            Positions and Offices Held

Randolph W. Lenz              47             Chairman of the Board and
                                             Chief Executive Officer

Ronald M. DeFeo               41             President and Chief Operating
                                             Officer

David J. Langevin             42             Executive Vice President

Marvin B. Rosenberg           53             Senior Vice President, General
                                             Counsel and Secretary

Ralph T. Brandifino           48             Senior Vice President and Chief
                                             Financial Officer

For information regarding Messrs. Lenz, DeFeo and Rosenberg, refer to the table listing directors above.

David J. Langevin became Executive Vice President of the Company effective January 1, 1994 and had been appointed Acting Chief Financial Officer of the Company on March 9, 1993. He has been employed as a Vice President of KCS since 1988. Prior to KCS, Mr. Langevin was an employee of Ernst & Whinney (currently Ernst & Young) where he became a partner in 1986.

Ralph T. Brandifino was appointed to the position of Senior Vice President and Chief Financial Officer on December 6, 1993. Mr. Brandifino was previously the Chief Financial Officer at the Long Island Lighting Company from 1987 through 1993, previous to which he served as Chief Financial Officer at Chicago Pneumatic Tool Company, a capital goods manufacturer.

Executive Compensation

Summary Compensation Table

The Summary Compensation Table below shows the compensation for the past three fiscal years of the Company's Chief Executive Officer and its executive officers with 1993 earned qualifying compensation in excess of $100,000.

                                                        Long-Term
   Name and      Year   Salary    Bonus      Other     Options/SARS  All Other
   Principal             ($)       ($)        ($)          (#)     Compensation
   Position                                                             ($)

Randolph W.       1993  483,508      -         -            -            -
Lenz, Chairman    1992  486,000      -         -            -            -
of the Board      1991  473,262      -         -            -            -
and Chief
Executive
Officer(1)

Ronald M.         1993  237,500   60,000  214,604(5)        -         3,148(6)
DeFeo,            1992  135,385   66,666       -          20,000         -
President and       1991     -       -           -            -            -
Chief Operating
Officer(2)

Ralph T.          1993  16,913      -       648(7)          -            -
Brandifino,       1992     -        -          -            -            -
Senior Vice       1991     -        -          -            -            -
President and
Chief Financial
Officer(3)


Gary D. Bello,    1993  125,000     -          -            -        284,664(8)
President,        1992  122,500  125,100       -            -            710(6)
Material          1991   -          -          -            -            -
Handling
Segment(4)

(1) In conjunction with the proposed termination of the Company's management agreement with KCS, Mr. Lenz, together with Messrs. Langevin and Rosenberg (who became employees of the Company on January 1, 1994), will receive certain securities of the Company, subject to the approval of the Company's stockholders. See "Certain Transactions."
(2) Mr. DeFeo joined Terex on May 1, 1992.
(3) Mr. Brandifino joined Terex on December 6, 1993.
(4) Mr. Bello joined Terex as an executive officer on July 31, 1992 when the Company completed the Clark Acquisition. Mr. Bello terminated his service with the Company effective May 7, 1993. CMHC and Mr. Bello entered into a termination agreement which provided for a lump sum termination payment to Mr. Bello by CMHC of $300,000 and which provided Mr. Bello with certain benefits, including medical benefits, life insurance coverage, use of an automobile and outplacement services, through May 7, 1994.
(5) Relocation payments.
(6) Company's matching contribution to defined contribution plan account.
(7) Automobile allowance.
(8) Includes $281,538 termination payment (net of certain reimbursements to the Company) and $3,126 Company's matching contributions to defined contribution plan account.

Option Grants in 1993

The table below summarizes options granted during 1993 to the named executive officers listed in the Summary Compensation Table.

                                                                Potential
                                                           Realizable Value
                                                           at Assumed Annual
                                                            Rates of Stock
                  Individual Grants                        Price Appreciation
                                                           for Option Term

Name            Options  % of Total  Exercise  Expiration    5%($)    10%($)
               Granted    Options     Price       Date
                 (#)     Granted to
                         Employees

Randolph W.        -          -         -           -          -        -
Lenz

Ronald M.       10,000       42%      $8.375    11/30/03    52,670   133,476
DeFeo

Ralph T.           -          -         -           -          -        -
Brandifino

Gary D. Bello      -          -         -           -          -        -

In May 1986, the stockholders approved an incentive stock option plan covering key management employees. As further amended by action of the stockholders and the Board of Directors, 395,354 shares of the Company's Common Stock were available for purchase pursuant to options granted or to be granted under the plan. The exercise price approximates the current market price at the time of the grant. Employees vest in options granted ratably over three years from the date of grant.

Aggregated Option Exercises in 1993 and Year-End Option Values

The table below summarizes options exercised during 1993 and year-end option values of the named executive officers listed in the Summary Compensation Table.

                                                                   Value of
                                                  Number of       Unexercised
                                                 Unexercised     In-the-Money
                                                  Options at      Options at
                                                 Year-end (#)    Year-end ($)


                     Shares
                   Acquired on        Value     Exercisable/     Exercisable/
Name                Exercise       Realized($)  Unexercisable    Unexercisable

Randolph W. Lenz        -               -               -              -

Ronald M. DeFeo         -               -         6,667/23,333       - / -

Ralph T.                -               -               -              -
Brandifino

Gary D. Bello           -               -               -              -

Pension Plans

The Company maintains numerous defined benefit pension plans covering most domestic employees, including certain officers of the Company. Retirement benefits for the plans covering the salaried employees are based primarily on years of service and employees' qualifying compensation during the final years of employment.

Mr. Lenz and Mr. DeFeo participate in the Terex Corporation Salaried Employees' Retirement Plan (the "Plan"). Mr. Brandifino does not participate because participation in the Plan was frozen as of May 7, 1993, prior to Mr. Brandifino's employment with the Company. Mr. Bello, as an employee of Clark, a subsidiary of the Company, was not a participant in the Plan nor is any other employee of Clark. Clark employees do not participate in a defined benefit retirement plan.

Participants of the Plan with five or more years of eligible service are fully vested and entitled to annual pension benefits beginning at age 65. Retirement benefits under the Plan are determined based on 1.02% of final average earnings plus .71% of such compensation in excess of amounts shown on the applicable Social Security Integration Table for participants born prior to 1938. For participants born during 1938-1954, the formula is modified by replacing the 1.02% and .71% figures with 1.08% and .65%, respectively. For participants born after 1954, the formula is modified by replacing the 1.02% and .71% figures with 1.13% and .60%, respectively. Service in excess of 25 years is not recognized. There is no offset for primary Social Security.

Participation in the Plan was frozen as of May 7, 1993, and no participants, including Mr. Lenz and Mr. DeFeo, will be credited with service following such date, except that participants not fully vested, including Mr. DeFeo, will be credited with service for purposes of determining vesting only. Mr. Lenz is already fully vested. The annual retirement benefits payable at normal retirement age under the Plan will be $31,530 for Mr. Lenz and $4,503 for Mr. DeFeo (assuming full vesting).

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial ownership of the Common Stock by each person known by the Company to own beneficially more than 5% of the Company's Common Stock, each director and executive officer of the Company, and all directors and executive officers as a group, as of January 1, 1994.

                                       Amount           Percent
Name and Address                    Beneficially           of
of Beneficial Owner                     Owned            Class

Randolph W. Lenz(1)                  5,061,537 (3)       49.13%
 c/o Terex Corporation
500 Post Road East
Westport, CT  06880

The Airlie Group L.P.(2)               965,000 (4)        9.29%
201 Main Street
Fort Worth, TX  76102

Dort A. Cameron, III(2)                971,000 (4)        9.34%
 c/o The Airlie Group, L.P.
201 Main Street
Fort Worth, TX  76102

Thomas M. Taylor(2)                  1,270,500 (4)       12.22%
 c/o The Airlie Group, L.P.
201 Main Street
Fort Worth, TX  76102

EBD L.P. (2)                           965,000 (4)        9.29%
c/o The Airlie Group, L.P.
201 Main Street
Forth Worth, TX  76102

TMT-FW, Inc. (2)                       965,000 (4)        9.29%
c/o The Airlie Group, L.P.
201 Main Street
Forth Worth, TX  76102

G. Chris Andersen                            0             *
1285 Avenue of the Americas
New York, NY  10019

Ronald M. DeFeo                          9,667 (5)         *
c/o Terex Corporation
500 Post Road East
Westport, CT  06880

Bruce I. Raben                          11,000             *
11100 Santa Monica Boulevard
Suite 1000
Los Angeles, CA  90025

Marvin B. Rosenberg                          0             *
 c/o Terex Corporation
500 Post Road East
Westport, CT  06880

David A. Sachs                          10,000             *
201 Main Street
Suite 3200
Fort Worth, TX  76102

Adam E. Wolf                             7,400             *
875 East Donges Lane
Milwaukee, WI  53217

David J. Langevin                        5,400             *
 c/o Terex Corporation
500 Post Road East
Westport, CT  06880

Ralph T. Brandifino                          0             *
c/o Terex Corporation
500 Post Road East
Westport, CT  06880

All directors and officers           5,105,004 (5)       49.55%
as a group (9 persons)

* Amount owned does not exceed one percent (1%) of the class so owned.

(1) Mr. Lenz currently pledges, and intends to pledge in the future, shares of the Common Stock owned by him as collateral for loans. If Mr. Lenz does not pay such loans when due, the pledgee may have the right to sell the shares of the Common Stock pledged to it in satisfaction of Mr. Lenz's obligations. The sale of a significant amount of such pledged shares could result in a change of control of the Company and may require the Company to make an offer to purchase certain of its outstanding debt instruments.
(2) Dort A. Cameron, III and TMT-FW, Inc., a Texas corporation, are general partners of EBD L.P., a Delaware limited partnership which is the sole general partner of Airlie. Thomas M. Taylor is the President, sole director and sole stockholder of TMT-FW, Inc. By reason of such relationships, Messrs. Cameron and Taylor may each be deemed the beneficial owner of the shares deemed beneficially owned by Airlie. On December 22, 1993, each of the indicated individuals, together with certain other persons, filed Amendment No. 9 to a Schedule 13D Statement filed pursuant to Section 13(d) of the Exchange Act reflecting the ownership of an aggregate of 1,255,5000 shares of Common Stock, 40,000 shares of Preferred Stock and 40,000 Warrants, or approximately 13.7% to 14.4% of all outstanding Common Stock, assuming the conversion of such shares of Preferred Stock and the exercise of such Warrants (but not the conversion of any Preferred Stock or the exercise of any Warrants by any other holder). Except as otherwise reflected in this table or the footnotes thereto, each of the indicated individuals disclaims the beneficial ownership of any shares held by any other party to such Schedule 13D filing.
(3) Mr. Lenz is the direct owner of 4,984,337 shares of Common Stock, representing approximately 48.38% of the outstanding Common Stock. In addition, Mr. Lenz is the indirect beneficial owner of 77,200 shares of Common Stock through a corporation that he indirectly owns and controls.
(4) For each of Airlie, Dort A. Cameron, III, Thomas M. Taylor, EBD L.P. and TMT-TW, Inc., the amount shown assumes the conversion of the shares of Preferred Stock owned by such beneficial owner (but not by any other holder of Preferred Stock), but does not assume the exercise of any Warrants owned by such beneficial owner, since the Warrants are not currently exercisable.
(5) Includes 6,667 shares issuable upon the exercise of currently exercisable options held by Mr. DeFeo. See "Management -- Executive Compensation."

SELLING SECURITY HOLDERS

The following table sets forth certain information, as of January 19, 1994, regarding the Warrants held by the Selling Security Holders covered by this Prospectus. Until the occurrence of the Warrant Ratio Determination Date, the Warrants are not exercisable for Warrant Shares and the number of Warrant Shares issuable upon exercise of a Warrant is not determinable. Because the Selling Security Holders may offer all or some part of the Warrants and Warrant Shares which they hold from time to time pursuant to the offering contemplated by this Prospectus, and because this offering is not being underwritten on a firm commitment basis, no estimate can be given as to the amount of Warrants or Warrant Shares that will be held by the Selling Security Holders upon termination of this offering. See "Plan of Distribution."

Name of Selling                    Number of
Security Holder                  Warrants Held

Atwell & Co.                       40,000
Auer & Co.                         25,000
The Bond Fund For Growth           20,000
Cerberus International             20,000
Elliott Associates, L.P.           90,000
FAMCO Income Partners, L.P.        80,000
Gamcan Limited                      1,400
Gerlach & Co.                     400,000
Hare & Co.                         40,000
Institutional Partners, L.P.       14,100
JEFCO                             210,000
Landmark American Fund             30,000
Paresco, Inc.                      40,000
SC Fundamental
  Value Fund, L.P.                 40,000
SP Investors International NV      23,000
Steinhardt Overseas Fund, Ltd.     25,500
Steinhardt Partners, L.P.          16,000
Strome Offshore, Ltd.              90,000
Strome Susskind
  Hedgecap Fund, L.P.              80,000
Taft Securities                     5,000
The Value Realization
  Fund, L.P.                       10,000

The Warrants and Warrant Shares are being registered for resale solely for the account of the Selling Security Holders. None of the Selling Security Holders and none of their respective officers, directors or stockholders has had any material relationship with the Company within the past three years, except as set forth in "Certain Transactions."

It is anticipated that each of the Selling Security Holders named herein will offer and sell the Warrants which may be sold by such person hereunder from time to time in ordinary transactions to or through one or more brokers or dealers in the over-the-counter market or in private transactions at such prices as may be obtainable. Any such person may be deemed to be an "underwriter" as that term is defined by the Securities Act. However, the Company and such persons disclaim that any such person is an underwriter of the Warrants.

CERTAIN TRANSACTIONS

Under a contract dated July 1, 1987, KCS, principally owned by Randolph W. Lenz, Chairman of the Board and Chief Executive Officer of the Company, until December 31, 1993 provided administrative, financial, marketing, technical, real estate and legal services to the Company and its subsidiaries. KCS also provided assistance in the evaluation, negotiation and consummation of potential acquisitions of other companies, products and processes, as well as the development of new areas of business for the Company.

For the services of KCS, the Company paid KCS an annual fee plus the reimbursement for all out-of-pocket expenses incurred by KCS in fulfilling the contract, including travel and similar expenses and fees for professional and other services provided by third parties. Each year the contract was in effect, the annual fee increased by the greater of 10% or the increase in the Consumer Price Index, subject to limitations imposed by the Company's debt agreements. During 1993, the Company made payments to KCS for fees and out-of-pocket expenses of $2.9 million and $0.1 million respectively.

During 1993, the Board of Directors of the Company concluded that it would be in the Company's best interest to terminate the Company's contract with KCS and integrate the management services of KCS directly into the Company. Pursuant to an agreement between the Company and KCS, the contract between the Company and KCS was suspended as of the close of business on December 31, 1993, with the contract to be terminated upon the consent of the Company's stockholders to a proposed issuance of securities to certain executives of KCS, as discussed below. David J. Langevin and Marvin B. Rosenberg, employees of KCS, became salaried employees of the Company effective January 1, 1994, with the titles of Executive Vice President and Senior Vice President, respectively. In addition, in consideration of the proposed termination of the contract, the Company has agreed, subject to the approval of the stockholders of the Company, to issue 89,800 shares of the Company's Series B Cumulative Redeemable Convertible Preferred Stock and 89,800 common stock purchase warrants to certain executives of KCS, the terms of which will be substantially similar to the terms of the Preferred Stock and the Warrants, respectively. Of such amounts, Messrs. Langevin and Rosenberg would each receive 25,500 shares of preferred stock and warrants and Mr. Lenz would receive 38,800 shares of preferred stock and warrants. Upon stockholder approval, the contract will terminate and such securities will be issued to Messrs. Langevin, Rosenberg and Lenz. Absent such stockholder approval, the suspension will terminate and the contract will be restored in full force and effect, although the Company will continue to endeavor to achieve an alternate agreement with KCS to terminate the contract. The Company, certain directors and executives of the Company, and KCS are named parties in various legal proceedings. During 1993, the Company incurred $0.4 million of legal fees and expenses on behalf of the Company, directors and executives of the Company, and KCS named in the lawsuits.

David A. Sachs, a director of the Company, is affiliated with Airlie, a limited partnership which owns approximately 9.29% of the Company's Common Stock (including Common Stock issuable upon conversion of Preferred Stock) and 40,000 Warrants. Mr. Sachs is an employee of the investment firm of TMT-FW, Inc. which is one of two general partners of the general partner of Airlie. On December 20, 1993, Airlie purchased 40,000 Warrants and 40,000 shares of Preferred Stock from the Company as part of the Company's private placement. Prior to 1992, the Company charged Fruehauf for management services and for interest on amounts owed to Terex. As of January 1, 1992, the Company no longer charges Fruehauf for management expenses and interest on amounts due the Company. However, the Company and Fruehauf continue to charge one another for payments made on each other's behalf in the normal course of business. The outstanding balance owed by Fruehauf to the Company was $13.6 million at September 30, 1993, $12.9 million at December 31, 1992 and $10.2 million at December 31, 1991. As part of the Fruehauf Restructuring, the Company accepted in December 1993 approximately 2,251,000 shares of Fruehauf common stock in satisfaction of approximately $13.5 million of indebtedness of Fruehauf to the Company.

As part of the Fruehauf Restructuring, the Company agreed to vote its shares of Fruehauf common stock in favor of, or consent to, an amendment to Fruehauf's Certificate of Incorporation to authorize additional shares of Fruehauf capital stock and the issuance of a portion of such stock to purchasers of Fruehauf's convertible subordinated notes and to the Company, in satisfaction of Fruehauf's indebtedness to the Company. The Company also agreed, for a period of 18 months beginning July 26, 1993, generally to vote its shares of Fruehauf common stock in any other matter in such proportion as the other stockholders of Fruehauf entitled to vote on such matter shall vote their shares of Fruehauf common stock. In addition, at the time of the Fruehauf Restructuring, the Company entered into an agreement with IBJ Schroder Bank & Trust Company ("IBJ Schroder"), on behalf of a group of commercial bank lenders, pursuant to which the Company is obligated to pay a fee of $1,000,000 on or before December 31, 1994 in consideration of the assistance of the banks in evaluating the feasibility of Fruehauf's proposed Turnaround Plan and to induce the banks to consent to certain requests by the Company. Mr. Lenz pledged certain of his shares of Common Stock to IBJ Schroder, as agent for such lenders, as security for the payment of such amount by the Company.

On January 25, 1993, Terex entered into an agreement whereby KCS borrowed $1.7 million from Terex (the "KCS/Terex Note"). The KCS/Terex Note bore interest at prime. The loan represented by the KCS/Terex Note may have constituted a default under the Secured Notes, the Subordinated Notes and the Bank Lending Agreement. The entire balance was repaid to Terex on February 1, 1993, six days after the initial borrowing, thereby curing any default which may have occurred.

The Company's Board of Directors approved a program to consolidate Fruehauf's parts warehousing and administration functions with the Company. During the fourth quarter of 1992, Fruehauf announced its intention to close its parts warehouse in Westerville, Ohio and transfer its replacement parts inventory to the Terex distribution center near Memphis, Tennessee. As a result of the Fruehauf Restructuring, the proposed arrangement will not be effectuated. In November 1992, in contemplation of this agreement, Terex had transferred $2.0 million to Fruehauf. The $2.0 million transfer constituted a default ("November Default") under the Secured Notes, the Subordinated Notes and the Bank Lending Agreement. Subsequently in May 1993, Terex entered into an agreement with an operating unit of Fruehauf, whereby such operating unit will provide products and manufacturing services to Terex. This agreement required Terex to make a $2.0 million payment to such operating unit, which Terex effected on May 11, 1993 by instructing Fruehauf to transfer the $2.0 million Fruehauf owed to Terex directly to such operating unit. This transfer also satisfied Fruehauf's $2.0 million obligation to Terex so that the events which gave rise to the November Default no longer exist. The Company is in discussions with Fruehauf concerning the satisfaction of Fruehauf's obligations under the May 1993 agreement.

In August 1992, Clark purchased certain assets of a subsidiary of Fruehauf for $0.8 million. This constituted a default under the Secured Notes, the Subordinated Notes and the Bank Lending Agreement because the purchase did not have prior approval of the independent members of the Company's Board of Directors. The approval was subsequently obtained; therefore, the events which gave rise to such default no longer exist.

In conjunction with the Clark Acquisition, the Company financed the acquisition and refinanced a major component of its previously outstanding bank debt through a private placement of Secured Notes and SAR's, and the establishment of a revolving credit facility with a commercial bank. Mr. Raben, a director of the Company, is an employee and officer of Jefferies, the investment banking firm which acted as an exclusive placement agent for the Company in the offering of the Secured Notes and SAR's. Jefferies was paid in total fees of $6.5 million in 1992 for services performed as placement agent. Jefferies was also the Company's placement agent for the December 1993 sale of the Preferred Stock and Warrants for which Jefferies received fees totalling $2.5 million in 1993. Jefferies was also the agent for the Company for certain sales by the Company of its common stock of Fruehauf in 1993. Jefferies is also the holder of 210,000 Warrants and 180,000 shares of Preferred Stock, which Jefferies acquired from the Company in connection with the Company's private placement on December 20, 1993.

During 1993, Fruehauf retained PaineWebber as a financial advisor to explore opportunities to maximize stockholder value in Fruehauf. G. Chris Andersen, a member of the Company's Board of Directors, is an executive with PaineWebber. The Company intends that all transactions with affiliates are on terms no less favorable to the Company than could be obtained in comparable transactions with an unrelated person. The Board will be advised in advance of any such proposed transaction or agreement and will utilize such procedures in evaluating their terms and provisions as are appropriate in light of the Board's fiduciary duties under Delaware law. In addition, the Company has an Audit Committee consisting solely of independent directors. One of the responsibilities of the Audit Committee is to review related party transactions.

DESCRIPTION OF SECURITIES

The Company's authorized capital stock consists of 40,000,000 shares of capital stock, $.01 par value, consisting of 30,000,000 shares of Common Stock and 10,000,000 shares of preferred stock. As of January 1, 1994, 10,303,067 shares of Common Stock and 1,200,000 shares of preferred stock were issued and outstanding.

Common Stock

Each outstanding share of Common Stock entitles the holder to one vote, either in person or by proxy, on all matters submitted to a vote of stockholders, including the election of directors. There is no cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of Common Stock can elect all of the directors then standing for election. Subject to preferences which may be applicable to any outstanding shares of preferred stock, holders of Common Stock have equal ratable rights to such dividends as may be declared from time to time by the Board of Directors out of funds legally available thereof. See "Market for Common Stock and Dividend Policy."

Holders of Common Stock have no conversion, redemption or preemptive rights to subscribe to any securities of the Company. All outstanding shares of Common Stock are fully paid and nonassessable. In the event of any liquidation, dissolution or winding-up of the affairs of the Company, holders of Common Stock will be entitled to share ratably in the assets of the Company remaining after provision for payment of liabilities to creditors and preferences applicable to outstanding shares of preferred stock. The rights, preferences and privileges of holders of Common Stock are subject to the rights of the holders of any outstanding shares of preferred stock. See "-- Preferred Stock."

The Certificate of Incorporation provides that directors of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duties as a director except to the extent otherwise required by Delaware law. The by-laws of the Company provide for indemnification of the officers and directors of the Company to the fullest extent permitted by Delaware law.

The transfer agent and registrar for the Common Stock is Mellon Securities Transfer Services, 111 Founders Plaza, Suite 1100, East Hartford, Connecticut 06108.

Warrants

The following summary of the terms and provisions of the Warrants does not purport to be complete and is qualified in its entirety by reference to the detailed provisions of the Warrants and the Warrant Agreement, the forms of which are filed as exhibits to the Registration Statement.

Term. Each Warrant may be exercised by the registered holder thereof at any time in whole and from time to time in part, at the option of the holder, commencing at the opening of business on the day following the Warrant Ratio Determination Date until 5:00 p.m. New York time on December 31, 2000 (the "Expiration Date"). "Warrant Ratio Determination Date" means the date designated as such by the Board of Directors of the Company pursuant to a duly adopted resolution of the Board, which date shall be a trading day during the 12 month period beginning on the Issue Date or, if no such date is designated, the last day of such 12 month period; provided, that if the Board of Directors has not yet designated a Warrant Ratio Determination Date and the Current Market Price (as hereinafter defined) of a share of Common Stock equals or exceeds $18.00 per share on any date during such 12 month period, the "Warrant Ratio Determination Date" will be such date.

A Warrant may be exercised upon (i) surrender of the Warrant certificate at the principal office of the Warrant Agent, with the form of election to purchase on the reverse thereof duly completed and signed and (ii) payment of the Exercise Price with respect to the Warrant Shares being purchased, payable by certified or bank check to the order of the Company.

Warrant Ratio. Upon the exercise or redemption (see "--Redemption" below) of a Warrant, the holder thereof shall be entitled to receive the number of Warrant Shares and other consideration, if any (the "Warrant Ratio"), equal to (a) 3.0 shares of Common Stock if the Current Market Price of a share of Common Stock on the Warrant Ratio Determination Date is $5.00 or less; (b) a number of Warrant Shares which decreases from 3.0 shares to 1.0 share with the increase in such Current Market Price per share from $5.00 to $18.00, if such Current Market Price per share is greater than $5.00 but less than $18.00, as set forth in the schedule below; and (c) 1.0 Warrant Share if such Current Market Price per share is $18.00 or more.

Current Market Price     Warrant Ratio
$ 5.00 or less                3.00
$ 5.50                        2.75
$ 6.00                        2.53
$ 6.50                        2.36
$ 7.00                        2.20
$ 7.50                        2.07
$ 8.00                        1.95
$ 8.50                        1.85
$ 9.00                        1.76
$ 9.50                        1.68
$10.00                        1.60
$10.50                        1.54
$11.00                        1.48
$11.50                        1.42
$12.00                        1.37
$12.50                        1.33
$13.00                        1.28
$13.50                        1.24
$14.00                        1.21
$14.50                        1.17
$15.00                        1.14
$15.50                        1.11
$16.00                        1.08
$16.50                        1.06
$17.00                        1.03
$17.50                        1.01
$18.00 or more                1.00

"Current Market Price" per share of Common Stock on any day means the average of the daily closing prices with respect to the Common Stock for the 30 consecutive trading days ending on such date (or, if such date is not a trading day, on the trading day immediately preceding such date); provided, that if the Common Stock is not publicly traded, the Current Market Price per share shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company.

In the event that (i) the shelf Registration Statement of which this Prospectus is a part shall not have become effective on or prior to the 90th day following the Issue Date, or (ii) prior to the end of the period during which a registration statement relating to the Warrants is required to be maintained effective pursuant to the Warrant Registration Rights Agreement, the Commission shall have issued a stop order suspending the effectiveness of the shelf Registration Statement, then for each 30 consecutive day period (without duplication) during which either of the foregoing events has occurred and is continuing, the Warrant Ratio will increase by 0.5%.

Exercise Price. The Warrants are exercisable for $.01 per Warrant Share in the case of Common Stock and in the case of all other securities issuable upon exercise of the Warrants, for the lowest exercise price permitted by law. Redemption. The Warrants may be redeemed by the Company in whole, but not in part, in exchange for Warrant Shares at any time on or after the Warrant Ratio Determination Date; provided, that concurrently with such redemption the Company redeems all then outstanding shares of Preferred Stock. Each Warrant will be redeemable for a number of Warrant Shares equal to the Warrant Ratio on the date of redemption.

Notice of redemption of the Warrants shall be sent by or on behalf of the Company to the holders not less than 30 days nor more than 60 days prior to the date fixed for redemption (i) notifying the holders of the election of the Company to redeem the Warrants and of the date of redemption, (ii) stating the place or places at which the Warrants shall, upon presentation and surrender of certificates evidencing such Warrants, be redeemed, and the number of Warrant Shares deliverable upon the redemption thereof, and (iii) stating the name and address of the Warrant Agent and the redemption agent.

Adjustments. The Warrants contain certain provisions that, commencing with the occurrence of the Warrant Ratio Determination Date, protect the holders thereof against dilution by adjustment of the Warrant Ratio in the event of (i) dividends or other distributions of Common Stock, (ii) subdivisions and combinations of outstanding shares of Common Stock, (iii) dividends or other distributions of rights or warrants entitling the holders thereof to subscribe for or purchase, during a period not exceeding 45 days from the date of such dividend or other distribution, shares of Common Stock at a price per share less than the Current Market Price per share of Common Stock, or (iv) issuances by the Company of any Common Stock (or securities convertible into or exercisable for Common Stock) for a consideration per share less than the Current Market Price of the Common Stock on the date of such issuance, subject to certain exceptions.

In addition, if the Company shall declare a dividend or other distribution on its Common Stock that would not cause such an adjustment consisting of (i) securities other than Common Stock, (ii) evidences of its indebtedness, or
(iii) assets (including cash dividends or distributions) (collectively, "Assets"), then in each such case adequate provision shall be made so that each holder of Warrants shall receive, without charge, concurrently with the making of such dividend or distribution, the amount and kind of such Assets that such holder would have received if such holder had, immediately prior to the relevant record date, exercised its Warrants.

On or prior to each day on which the Warrant Ratio is adjusted, the Company shall promptly direct the Warrant Agent, and the Warrant Agent shall send to each holder, notice of such adjustment and shall deliver to the Warrant Agent a certificate of a firm of independent public accountants selected by the Board of Directors (who may be the regular accountants employed by the Company) setting forth the Warrant Shares purchasable upon the exercise of each Warrant and the Warrant Ratio after such adjustment, a brief statement of the facts requiring such adjustment, and the computation by which such adjustment was made.

Reorganizations. In case of (a) any consolidation or merger of the Company with or into another corporation, (b) the occurrence of any other transaction or event pursuant to which all or substantially all of the Common Stock is exchanged for, converted into, or acquired for, or constitutes solely the right to receive, cash securities, property or other assets (whether by exchange offer, liquidation, tender offer or otherwise) or (c) the sale, lease or other transfer of all or substantially all of the assets of the Company, there shall thereafter be deliverable upon exercise of each Warrant (in lieu of the Warrant Shares theretofore deliverable), at the lowest exercise price permitted by law, the number of shares of stock or other securities or property to which a holder of the Warrant Shares that would otherwise have been deliverable upon the exercise of such Warrant would have been entitled upon such transaction if such Warrant had been exercised in full immediately prior to such transaction.

No Rights as Stockholders. Nothing contained in the Warrant Agreement or in any of the Warrants confers upon the holders thereof or their transferees the right to vote or to receive dividends or to consent or to receive notice as stockholders in respect of any meeting of stockholders for the election of directors of the Company or any other matter, or any rights whatsoever as stockholders of the Company.

Transfer. The Warrants shall be transferable only on the Warrant register maintained by the Warrant Agent, upon delivery thereof, accompanied by a written instrument or instruments of transfer in form reasonably acceptable to the Warrant Agent, duly executed by the registered holder or holders thereof or by the duly appointed legal representative thereof or by a duly authorized attorney. Upon any registration of transfer, the Warrant Agent shall (a) countersign and deliver a new Warrant certificate evidencing the Warrant or Warrants to the persons entitled thereto and (b) cancel the surrendered Warrant certificate.

Reservation of Shares; Governmental Approvals and Stock Exchange Listings. The Company shall reserve at all times so long as any Warrants remain outstanding, free from preemptive rights, out of its treasury stock (if applicable) or its authorized but unissued shares of Common Stock, or both, solely for the purpose of effecting the exercise of the Warrants, sufficient Warrant Shares to provide for the exercise of all outstanding Warrants, and take all necessary action so that all Warrant Shares that are issued upon exercise of the Warrants will, upon issuance, be duly and validly issued, fully paid and nonassessable.

The Company will use its best efforts to (a) obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities and to make securities acts filing under federal and state laws, that are required in connection with the issuance, sale, transfer and delivery of the Warrant certificates, the exercise or conversion of the Warrants, and the issuance, sale, transfer and delivery of the Warrant Shares issued upon exercise or conversion of the Warrants, and (b) have the Warrant Shares, immediately upon their issuance, listed on such securities exchange on which the Common Stock is then listed.

The Warrant Agent for the Warrants is Mellon Securities Trust Company, 111 Founders Plaza, Suite 1100, East Hartford, Connecticut 06108.

Preferred Stock

The Board of Directors of the Company is authorized to issue up to 10,000,000 shares of preferred stock, par value $.01 per share, in one or more series, with such designations, powers, preferences and rights of such series and the qualifications, limitations or restrictions thereon, including, but not limited to, the fixing of dividend rights, dividend rates, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption price or prices, and the liquidation preferences, in each case, if any, as the Board of Directors of the Company may by resolution determine, without any further vote or action by the Company's stockholders.

By resolution adopted December 17, 1993, the Board of Directors of the Company authorized the issuance of a series of preferred stock consisting of 1,200,000 shares, designated Series A Cumulative Redeemable Convertible Preferred Stock, par value $.01 per share, and fixed the terms of such Preferred Stock. The following summary of the terms and provisions of the Preferred Stock does not purport to be complete and is qualified in its entirety by reference to the relevant sections of the Company's Restated Certificate of Incorporation, a copy of which is filed as an exhibit to the Registration Statement.

The registrar and transfer agent for the Preferred Stock is Mellon Securities Trust Company.

Liquidation Preference. In the event of the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company (a "Liquidation"), subject to the prior preferences and other rights of any stock ranking senior to the Preferred Stock in respect of the right to receive assets upon liquidation, but before any distribution or payment shall be made to the holders of Common Stock or any other stock ranking junior to the Preferred Stock upon liquidation, the holders of the Preferred Stock shall be entitled to be paid, out of the assets of the Company available for distribution to its stockholders, a liquidation preference, initially equal to $25.00 per share, plus all accrued and unpaid dividends thereon to such date, in cash. During the period commencing on the Issue Date and ending on the Dividend Payment Date (as defined below) immediately preceding the first Dividend Payment Date on which the Company is permitted to declare and pay cash dividends on the Preferred Stock under the indentures and loan agreements of the Company as in effect on December 20, 1993 (the "Accretion Termination Date"), the Liquidation Preference will accrete at the rate of 13% per annum, compounded quarterly, until December 20, 1998, and at the rate of 18% per annum, compounded quarterly, thereafter.

Dividends. Subject to the prior preferences and other rights of any stock ranking senior to the Preferred Stock with respect to the payment of dividends, holders of shares of the Preferred Stock are entitled to receive, when and as declared by the Board of Directors, out of funds legally available for the payment of dividends, cumulative cash dividends that will accrue from the Accretion Termination Date at the rate of (a) 13% per annum from the Accretion Termination Date through December 20, 1998 and (b) 18% per annum thereafter. In the event that (i) the Company does not file a shelf registration statement with respect to the Preferred Stock on or prior to the 60th day following the Issue Date, (ii) such registration statement does not become effective on or prior to the 150th day following the Issue Date or (iii) prior to the end of the period during which a registration statement relating to the shares of Preferred Stock and Common Stock issuable upon conversion of the Preferred Stock is required to be maintained effective pursuant to the Preferred Stock Registration Rights Agreement, the Commission issues a stop order suspending the effectiveness of the shelf registration statement, then for each day on which any of the foregoing events occurred and are continuing, the dividend rate will increase by (a) 0.25% per annum if such day is on or prior to the 180th day following the Issue Date and (b) 0.50% per annum if such day is after the 180th day following the Issue Date. Such dividends are cumulative and shall be payable in cash, quarterly, in arrears, when and as declared by the Board of Directors, on March 31, June 30, September 30 and December 31 of each year (each, a "Dividend Payment Date") commencing on the first Dividend Payment Date following the Accretion Termination Date. Each such dividend shall be paid to the holders of record of the Preferred Stock as their names appear on the share register of the Company at the close of business on the applicable record date, which shall be the 15th day of the calendar month in which the applicable Dividend Payment Date falls or such other record date designated by the Board of Directors of the Company with respect to the dividend payable on such respective Dividend Payment Date.

If full cash dividends are not paid or made available to the holders of all outstanding shares of Preferred Stock and of any stock ranking on a parity with the Preferred Stock in respect of the right to receive dividends, and funds available are insufficient to permit payment in full in cash to all such holders of the preferential amounts to which they are then entitled, the entire amount available for payment of cash dividends shall be distributed among the holders of the Preferred Stock and of any such parity stock, ratably in proportion to the full amount to which they would otherwise be respectively entitled, and any remainder not paid in cash to the holders of the Preferred Stock shall cumulate, whether or not earned or declared, with additional dividends thereon for each succeeding full quarterly dividend period during which such dividends shall remain unpaid. Unpaid dividends for any period less than a full quarterly dividend period shall cumulate on a day-to-day basis and shall be computed on the basis of a 360-day year.

So long as any shares of Preferred Stock shall be outstanding, the Company shall not declare or pay on any stock ranking junior to the Preferred Stock in respect of the right to receive dividends any dividend whatsoever, whether in cash, property or otherwise (other than dividends payable in shares of the class or series upon which such dividends are declared or paid), nor shall the Company make any distribution on any such junior stock, nor shall any such junior stock be purchased or redeemed by the Company or any subsidiary of the Company, nor shall any monies be paid or made available for a sinking fund for the purchase or redemption of any such junior stock; provided that from and after the Accretion Termination Date, the Company may declare and pay cash dividends on such junior stock so long as (i) all dividends to which the holders of Preferred Stock shall have been entitled for all previous dividend periods shall have been declared and paid and (ii) on or prior to the later of
(x) the first anniversary of the Accretion Termination Date and (y) the third anniversary of the Issue Date, the Company will not pay dividends on the Common Stock during any 12 month period exceeding 4% of the Current Market Price per share of the Common Stock on the trading day immediately prior to the declaration of any cash dividend.

Redemption. Prior to December 31, 1994, the Preferred Stock may be redeemed in whole, but not in part, at a per share redemption price equal to the Liquidation Preference per share on the date of redemption plus all accrued but unpaid dividends thereon to and including the date of redemption; provided, that concurrently with such redemption the Corporation redeems all Warrants then outstanding. See "--Warrants."

On and after December 31, 1994, the Preferred Stock may be redeemed by the Company at any time in whole or (except as noted below) from time to time, in part, at the option of the Company, at a per share redemption price equal to the Liquidation Preference per share on the date of redemption plus all accrued but unpaid dividends thereon to and including the date of redemption. If less than all of the outstanding shares of Preferred Stock are to be redeemed, such shares shall be redeemed pro rata or by lot as determined by the Board of Directors in its sole discretion. The Company shall not redeem less than all of the outstanding shares of Preferred Stock unless all cumulative dividends on the Preferred Stock for all previous dividend periods have been paid or declared and funds therefor set apart for payment.

The Company shall redeem all then outstanding shares of Preferred Stock on or prior to December 31, 2000 at a per share redemption price equal to the Liquidation Preference per share on the date of redemption plus all accrued but unpaid dividends thereon to and including the date of redemption.

Notice of every proposed redemption of Preferred Stock shall be sent by or on behalf of the Company, by first class mail, postage prepaid, to the holders of record of the shares of Preferred Stock so to be redeemed at their respective addresses as they shall appear on the records of the Company, not less than thirty (30) days nor more than sixty (60) days prior to the date fixed for redemption (the "Redemption Date") (i) notifying such holders of the election or obligation of the Company to redeem such shares of Preferred Stock and of the Redemption Date, (ii) stating the place or places at which the shares of Preferred Stock called for redemption shall, upon presentation and surrender of the certificates evidencing such shares of Preferred Stock, be redeemed, and the redemption price therefor, and (iii) stating the name and address of any redemption agent selected by the Company and the name and address of the Corporation's transfer agent for the Preferred Stock.

Voting. Except as set forth below or as otherwise required by law, the holders of the issued and outstanding shares of Preferred Stock shall have no voting rights.

So long as any Preferred Stock is outstanding, the Company, without first obtaining the affirmative vote or written consent of the holders of not less than a majority of the then outstanding shares of Preferred Stock, voting separately as a class, will not: (i) amend or repeal any provision of, or add any provision to, the Company's Certificate of Incorporation or By-laws if such action would alter adversely or change the preferences, rights, privileges or powers of, or the restrictions provided for the benefit of, any Preferred Stock, or increase or decrease the number of shares of Preferred Stock authorized; (ii) authorize or issue shares of any class or series of stock ranking senior to the Preferred Stock (or, prior to the Warrant Ratio Determination Date, any stock ranking on a parity with the Preferred Stock) in respect of the right to receive dividends or assets upon liquidation; (iii) reclassify any class or series of any junior stock into such parity stock or senior stock or reclassify any series of parity stock into senior stock; (iv) authorize, enter into, or consummate any transaction that would constitute a deemed dividend to holders of the Preferred Stock under United States Federal tax laws; or (v) consolidate with or merge with or into another corporation, other than in a transaction in which the Company is the surviving corporation. From and after the Accretion Termination Date, (i) if and whenever the Company fails to declare and pay in cash the full amount of dividends payable on the Preferred Stock on any two Dividend Payment Dates, then the holders of the Preferred Stock, voting separately as a class, will be entitled at the next annual meeting of the stockholders of the Company or at any special meeting to elect one director, and (ii) if and whenever the Company shall have failed to declare and pay in cash the full amount of dividends payable on the Preferred Stock on any four Dividend Payment Dates, then the holders of the Preferred Stock, voting separately as a class, will be entitled at the next annual meeting of the stockholders of the Company or at any special meeting to elect two directors. Upon election, such directors will become additional directors of the Company and the authorized number of directors of the Company will thereupon be automatically increased by such number of directors. Such right of the holders of Preferred Stock to elect directors may be exercised until all dividends in default on the Preferred Stock have been paid in full, and dividends for the current dividend period declared and funds therefor set apart or paid, and when so paid and set apart or paid, the right of the holders of Preferred Stock to elect such number of directors shall cease and the term of such directors shall terminate, but subject always to the same provisions for the vesting of such special voting rights in the case of any such future dividend default or defaults.

Conversion Right. Each holder of shares of Preferred Stock has the right, at such holder's option, at any time or from time to time, to convert any of such shares of Preferred Stock into the number fully paid and nonassessable shares of Common Stock determined by dividing (i) $25.00 by (ii) the Conversion Price, initially $11.11 and subject to adjustment as set forth below, in effect on the date of conversion. The Conversion Price is subject to adjustment to prevent dilution in the event of (i) dividends or other distributions of Common Stock,
(ii) subdivision and combinations of outstanding shares of Common Stock, (iii) dividends or other distributions of rights or warrants entitling the holders thereof to subscribe for or purchase, during a period not exceeding 45 days from the date of such dividend or other distribution, Common Stock at a price per share less than the Current Market Price of the Common Stock, (iv) dividends or other distributions of other securities, evidences of its indebtedness or other assets, excluding any cash dividend or cash distribution payable out of earned surplus of the Company if the per share amount of such dividend or distribution, together with the aggregate per share amount of all other cash dividends and cash distributions declared or paid during the one year period ending on the date such dividend is declared (the "Declaration Date") does not exceed 4% of the Current Market Price per share of Common Stock on the trading day immediately prior to the Declaration Date, or (v) issuances by the Company of any Common Stock (or securities convertible into or exercisable for Common Stock) for a consideration per share less than the Current Market Price per share of Common Stock on the date of such issuance, subject to certain exceptions.

Reorganizations. In case of (a) any consolidation with or merger of the Company with or into another corporation, (b) the occurrence of any other transaction or event pursuant to which all or substantially all of the Common Stock is exchanged for, converted into, or acquired for, or constitutes solely the right to receive, cash securities, property or other assets (whether by exchange offer, liquidation, tender offer or otherwise) or (c) the sale, lease or other transfer of all or substantially all of the assets of the Company, each share of Preferred Stock shall after the date of such transaction be convertible into the number of shares of stock or other securities or property (including cash) to which the Common Stock issuable (at the time of such transaction) upon conversion of such share of Preferred Stock would have been entitled upon such transaction.

Reservation of Shares; Valid Issuance; Approvals. The Company shall (i) reserve at all times so long as any shares of Preferred Stock remain outstanding, free from preemptive rights, out of its treasury stock (if applicable) or its authorized but unissued shares of Common Stock, or both, solely for the purpose of effecting the conversion of the shares of Preferred Stock, sufficient shares of Common Stock to provide for the conversion of all outstanding shares of Preferred Stock, (ii) take all necessary action so that all shares of Common Stock that are issued upon conversion of the shares of the Preferred Stock will, upon issuance, be duly and validly issued, fully paid and nonassessable, and (iii) take no action which will cause a contrary result (including, without limitation, any action that would cause the Conversion Price to be less than the par value, if any, of the Common Stock).

If any shares of Common Stock reserved for the purpose of conversion of shares of Preferred Stock require registration with or approval of any governmental authority under any Federal or state law before such shares may be validly issued or delivered upon conversion, then the Corporation will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be. If, and so long as, any Common Stock into which the shares of Preferred Stock are then convertible is listed on any national securities exchange, the Corporation will, if permitted by the rules of such exchange, list and keep listed on such exchange, upon official notice of issuance, all shares of such Common Stock issuable upon conversion.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes certain Federal income tax consequences to the initial holders of the Warrants and Warrant Shares under existing Federal income tax law, which is subject to change, possibly retroactively. This summary does not discuss all aspects of Federal income taxation that may be relevant to a particular investor in light of his personal investment circumstances or to certain types of investors subject to special treatment under the Federal income tax laws (for example, financial institutions, insurance companies, tax-exempt organizations, broker-dealers, foreign taxpayers, and taxpayers subject to the "straddle" rules of the Internal Revenue Code of 1986, as amended (the "Code")) and it does not discuss any aspect of state, local or foreign tax law. This summary assumes that investors will hold their Warrants and Warrant Shares as "capital assets" (generally, property held for investment) under the Code. Holders are advised to consult their tax advisors as to the specific tax consequences of holding and disposing of the Warrants and Warrant Shares, including the application and effect of Federal, state, local and foreign income and other tax laws.

Upon the exercise of a Warrant, a holder will not recognize gain or loss and will have a tax basis in the Warrant Shares received equal to the tax basis in such holder's Warrant plus the exercise price thereof. Because the Warrants have a minimal exercise price, it is not certain whether a holder will be treated as owning a Warrant or the shares of Common Stock underlying the Warrant for Federal income tax purposes. Holders are urged to consult their tax advisors regarding such possibility. If the Warrants are treated as warrants for Federal income tax purposes, the holding period for the Warrant Shares purchased pursuant to the exercise of a Warrant will begin on the day following the date of exercise and will not include the period that the holder held his Warrant. On the other hand, if the Warrants are treated as Common Stock, the holding period for the Warrant Shares purchased pursuant to the exercise of a Warrant will include the period during which the Warrant was held by the holder. The holding period for the Warrants began on the day following the day they were acquired.

Upon a sale or other disposition of Warrants or Warrant Shares, a holder will recognize capital gain or loss in an amount equal to the difference between the amount realized and the holder's tax basis in such Warrants or Warrant Shares. Such a gain or loss will be long-term if the holding period is more than one year. In the event that a Warrant lapses unexercised, a holder will recognize a capital loss in an amount equal to his tax basis in the Warrant. Such loss will be long term if the Warrant has been held for more than one year.

An adjustment in the exercise price of the Warrants to reflect distributions to holders of Common Stock may, in certain circumstances, be treated as a constructive distribution to holders of Warrants subject to tax as a dividend pursuant to Section 305 of the Code. Although the matter is not entirely free from doubt, adjustments to the Warrant Ratio should not be treated as a constructive distribution.

PLAN OF DISTRIBUTION

The Company will issue Warrant Shares upon the exercise of Warrants by Selling Security Holders from time to time through the Expiration Date pursuant to the terms of the Warrants and the Warrant Agreement. See "Description of Securities -- Warrants." The Company will receive proceeds of $.01 per Warrant Share issued upon the exercise of the Warrants. The Company will receive no proceeds from the resale of the Warrants and the Warrant Shaes by the Selling Security Holders pursuant to this offering. The Warrants and Warrant Shares offered for resale hereby may be sold from time to time by the Selling Security Holders. Any such distribution of the Warrants or Warrant Shares by the Selling Security Holders, or by transferees or other successors-in-interest of the Selling Security Holders, may be effected from time to time in one or more transactions (which may involve block transactions) on the NYSE or in the over-the-counter market (to the extent that such securities are listed or traded on such markets), in negotiated transactions or in a combination of such methods of sale, at fixed prices, at market prices prevailing at the time of sale, at prices relating to prevailing market prices or at negotiated prices. The Selling Security Holders may effect such transactions directly to purchasers or to or through broker-dealers which may act as agents or principals. Such broker-dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the Selling Security Holders and/or the purchasers of Warrants and Warrant Shares for which broker-dealers may act as agent or to whom they may sell as principal or both (which compensation as to a particular broker-dealer may be less than or in excess of customary commissions). In addition, any Common Stock covered by this Prospectus that subsequently qualifies for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather than pursuant to this Prospectus.

The Warrants were issued to the original purchasers on December 20, 1993 in a private placement. Pursuant to the Warrant Registration Rights Agreement, the Company agreed to file the Registration Statement of which this Prospectus forms a part with the Commission, and to keep the Registration Statement effective until all of the Warrants and Warrant Shares are sold pursuant to an effective registration statement or Rule 144 under the Securities Act. There is no established trading market for the Warrants. The Company does not intend to list the Warrants on any securities exchange or to seek approval for quotation through any automated quotation system. There is no dealer which is obligated to make a market in the Warrants and, if any dealer or dealers should do so, they may discontinue any market making at any time without notice. No assurance can be given as to the liquidity of any trading market for the Warrants.

As of the date of this Prospectus, the Company understands that the Selling Security Holders do not have any agreement, arrangement or understanding concerning the distribution of the Warrants and Warrant Shares offered hereby. At the time a particular offer of Warrants or Warrant Shares is made, a Prospectus Supplement, to the extent required, will be distributed which will set forth the aggregate amount of Warrants or Warrant Shares being offered, the names of the selling security holders, the purchase price, the amount of expenses of the offering and the terms of the offering, including the name or names of any underwriters, dealers or agents, any discounts, commissions and other items constituting compensation from such selling security holders and any discounts, commissions or concessions allowed or reallowed or paid to dealers.

To comply with certain states' securities laws, if applicable, the Warrants and Warrant Shares will be sold in such states only through brokers or dealers. In addition, in certain states the Warrants and Warrant Shares may not be sold unless they have been registered or qualify for sale in such states or an exemption from registration or qualification is available and is complied with.
The Company is obligated pursuant to the Warrant Registration Rights Agreement to use its best efforts to register or qualify the Warrants and Warrant Shares under the securities or blue sky laws of such jurisdictions as any Selling Security Holder reasonably requests.

The Selling Security Holders and any broker-dealers who participate in a sale of their Warrants and Warrant Shares may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act, and any commissions received by them, and proceeds of any such sales as principal, may be deemed to be underwriting discounts and commissions under the Securities Act.

Since the Selling Security Holders will be subject to the antimanipulation rules promulgated under the Exchange Act, including Rule 10b-2, 10b-6 and 10b-7, in connection with transactions in the Warrants and Warrant Shares during the effectiveness of the Registration Statement of which this Prospectus is a part, the Company advises the Selling Security Holders to consult competent securities counsel prior to initiating any such transaction.

Pursuant to the Warrant Registration Rights Agreement, the Company has paid or will pay any and all expenses incident to the performance of such agreement including filing fees, fees and expenses incurred in connection with compliance with the securities or blue sky laws of the applicable states, and fees and disbursements of counsel and independent public accounts for the Company and the reasonable fees and disbursements of one counsel retained by the Selling Security Holders in connection with the Registration Statement. Such expenses are estimated to be approximately $____________. As and when the Company is required to update this Prospectus, it may incur additional expenses in excess of this estimated amount. Normal commission expenses and brokerage fees, as well as any applicable underwriting discounts or transfer taxes, are payable individually by the Selling Security Holders.

In the Warrant Registration Rights Agreement, the Company agreed to indemnify and hold harmless, to the extent permitted by law, the Selling Security Holders, the officers, directors, shareholders, agents, affiliates and partners of the Selling Security Holders, any person who participates as an underwriter in the offering and sale of the Warrants and Warrant Shares and any person who controls any of such sellers or any of such underwriters against losses, claims and expenses arising out of any false or misleading statements contained in this Prospectus or the Registration Statement of which it is a part. The Selling Security Holders have agreed to indemnify the Company against certain liabilities and expenses arising out of statements made by them for reliance by the Company in connection with the Registration Statement or this Prospectus.

LEGAL MATTERS

Certain legal matters in connection with the sale of the Warrants and the Warrant Shares offered hereby will be passed upon for the Company by Robinson Silverman Pearce Aronsohn & Berman, 1290 Avenue of the Americas, New York, New York 10104.

AUDITORS

The Consolidated Financial Statements of the Company as of December 31, 1992 and for the year then ended included in this Prospectus and the related financial statement schedules included elsewhere in the Registration Statement of which this Prospectus is a part have been audited by Price Waterhouse. Their report, dated April 14, 1993, except as to Notes I and O, which are as of May 11, 1993, contains an explanatory paragraph that certain matters identified raise substantial doubt about the Company's ability to continue as a going concern, an explanatory paragraph that in their determination of the Company's compliance with the covenants in the agreements governing the Secured Notes and the Subordinated Notes, and the resultant classification of such obligations as long term, legal opinions were obtained supporting the Company's interpretation of certain covenants related to the maintenance of net worth and curing of any defaults which may have existed, and an explanatory paragraph that makes reference to the contingent liabilities discussed in Notes D and N in the Notes to the Company's Consolidated Financial Statements. However, Price Waterhouse has advised the Company that they are unable to issue an updated accountants report until Deloitte & Touche, which was dismissed as the Company's and Fruehauf's auditors on October 2, 1992, is able to issue an updated accountants report as described below. Accordingly, this Prospectus does not include a copy of Price Waterhouse's audit report on the Company's Consolidated Financial Statements and the Registration Statement of which this Prospectus is a part does not include a consent of Price Waterhouse.

The combined financial statements of the Business Acquired from Clark Equipment Company by Terex Corporation as of December 31, 1991 and for each of the two years in the period ended December 31, 1991 included in this Prospectus have been audited by Price Waterhouse. Their report, dated September 25, 1992, was unqualified. However, Price Waterhouse has advised the Company that they are unable to issue an updated accountants report until Deloitte & Touche is able to issue an updated accountants report as described below. Accordingly, this Prospectus does not include a copy of Price Waterhouse's audit report on the combined financial statements of the Business Acquired from Clark Equipment Company by Terex Corporation and the Registration Statement of which this Prospectus is a part does not include a consent of Price Waterhouse.

The Consolidated Financial Statements of Fruehauf Trailer Corporation as of December 31, 1992 and for the year then ended included in this Prospectus and the related financial statement schedules included elsewhere in the Registration Statement of which this Prospectus is a part have been audited by Price Waterhouse. Their report, dated April 14, 1993, contains an explanatory paragraph that certain matters identified raise substantial doubt about the Company's ability to continue as a going concern, and an explanatory paragraph that makes reference to the contingent liabilities discussed in Note L in the Notes to the Company's Consolidated Financial Statements. However, Price Waterhouse has advised the Company that they are unable to issue an updated accountants report until Deloitte & Touche is able to issue an updated accountants report as described below. Accordingly, this Prospectus does not include a copy of Price Waterhouse's audit report on Fruehauf's Consolidated Financial Statements and the Registration Statement of which this Prospectus is a part does not include a consent of Price Waterhouse.

The Consolidated Financial Statements of the Company as of December 31, 1991 and for each of the two years in the period ended December 31, 1991 included in this Prospectus and the related financial statement schedules included elsewhere in the Registration Statement of which this Prospectus is a part have been audited by Deloitte & Touche. Their report, dated March 30, 1992 (April 14, 1993 as to Note B and the first and second paragraphs of Note N), expressed an unqualified opinion and include explanatory paragraphs relating to the restatement of prior period financial statements and an uncertainty relating to the outcome of certain litigation. However, Deloitte & Touche has advised the Company that they are currently unable to issue an updated accountants report until they complete their consideration of certain items which may affect the financial statements of Fruehauf and, as a result, may also affect the financial statements of the Company. Accordingly, this Prospectus does not include a copy of Deloitte & Touche's audit report on the Company's Consolidated Financial Statements and the Registration Statement of which this Prospectus is a part does not include a consent of Deloitte & Touche.

The Consolidated Financial Statements of Fruehauf Trailer Corporation as of December 31, 1991 and for each of the two years in the period ended December 31, 1991 included in this Prospectus and the related financial statement schedules included elsewhere in the Registration Statement of which this Prospectus is a part have been audited by Deloitte & Touche. Their report, dated March 20, 1992 (April 14, 1993 as to Note P and the ninth paragraph of Note L), expressed an unqualified opinion and include explanatory paragraphs relating to the restatement of prior period financial statements and an uncertainty relating to the outcome of certain litigation. However, Deloitte & Touche has advised the Company that they are currently unable to issue an updated accountants report until they complete their consideration of certain items which may affect the financial statements of Fruehauf. Accordingly, this Prospectus does not include a copy of Deloitte & Touche's audit report on Fruehauf's Consolidated Financial Statements and the Registration Statement of which this Prospectus is a part does not include a consent of Deloitte & Touche.

At this time, the Company does not know when Deloitte & Touche and, therefore, Price Waterhouse will be in a position to issue their updated accountants reports, and there can be no assurances that they will reissue any or all such reports in their original form. In the opinion of the Company, all significant transactions, subsequent events and other matters have been properly disclosed pursuant to relevant reporting requirements in the Company's financial statements and elsewhere in this Prospectus and the Registration Statement of which this Prospectus is a part.

Until the Company is furnished with updated audit reports manually signed by Deloitte & Touche and by Price Waterhouse and files such reports with the Commission along with consents of Deloitte & Touche and Price Waterhouse , the Company will not request that the Commission declare the Registration Statement effective.

With the concurrence of its Audit Committee, the Company engaged Price Waterhouse as its independent accountants effective October 1992. Prior to that date, Deloitte & Touche had been the Company's independent accountants. The change in independent accountants was reported on Form 8-K, dated October 8, 1992. The following is an excerpt from Deloitte & Touche's response to the Form 8-K, as included in the Company's Form 8 dated October 23, 1992:

"On August 24 and 28, 1992, a representative of Deloitte & Touche discussed with the Company's Chief Financial Officer the relationship between Deloitte & Touche and the Company. On September 14 and 17, 1992, representatives of Deloitte & Touche had further discussions with Company officials, including its Chairman, Chief Financial Officer, and Secretary, regarding the auditor-client relationship. These discussions focused on certain changes that Deloitte & Touche believed needed to occur in order for Deloitte & Touche to be willing to continue to serve as the Company's auditor. The matters discussed included changes requested by Deloitte & Touche relating to the financial reporting process and the role of the Audit Committee in overseeing that process, performance of timely quarterly reviews by Deloitte & Touche and timely discussions with Deloitte & Touche of proposed significant transactions. Deloitte & Touche believed, based on those discussions, that the Company was in agreement with the matters discussed, which was the basis for Deloitte & Touche agreeing to continue as the Company's independent auditor. On October 2, 1992, we were advised by the Company's Chief Financial Officer that we were dismissed as auditors."

In connection with its audits for the years ended December 31, 1991 and 1990 and through the date of this Prospectus, there have been no disagreements with Deloitte & Touche on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of Deloitte & Touche would have caused them to make a reference thereto in their report on the financial statements for such years. The reports of Deloitte & Touche on the aforementioned financial statements contained no adverse opinion or disclaimer of opinion and were not qualified as to audit scope or accounting principle. There have been no disagreements with Price Waterhouse on accounting or financial disclosure.


TEREX CORPORATION
INDEX TO FINANCIAL STATEMENTS
Page
TEREX CORPORATION (REGISTRANT)

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1992 AND 1991 AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1992

Reports of independent accountants                               F - 3  **
Consolidated statement of income                                 F - 5
Consolidated balance sheet                                       F - 6
Consolidated statement of stockholders' investment               F - 7
Consolidated statement of cash flows                             F - 8
Notes to consolidated financial statements                       F - 9


                   TEREX CORPORATION (REGISTRANT)

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1993 AND FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1993 AND 1992

Condensed consolidated statement of income                       F - 36
Condensed consolidated balance sheet                             F - 37
Condensed consolidated statement of cash flows                   F - 39
Notes to condensed consolidated financial statements             F - 40


           BUSINESS ACQUIRED FROM CLARK EQUIPMENT COMPANY
                         BY TEREX CORPORATION

COMBINED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1991
AND FOR EACH OF THE TWO YEARS IN THE PERIOD ENDED DECEMBER 31, 1991

     Report of independent accountants                                F - 45 **
     Combined statement of operating revenues and expenses  F - 46
     Combined statement of assets and liabilities                     F - 47
     Combined statement of cash flows                                 F - 48
     Notes to combined financial statements                           F - 49


                BUSINESS ACQUIRED FROM CLARK EQUIPMENT COMPANY
                              BY TEREX CORPORATION
UNAUDITED COMBINED FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1992
     Combined statement of operating revenues and expenses            F - 56
     Combined statement of cash flows                                 F - 57
     Notes to combined financial statements                           F - 58


                        PRO FORMA FINANCIAL INFORMATION
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENT FOR
THE YEAR ENDED DECEMBER 31, 1992                                      F - 59


                         FRUEHAUF TRAILER CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1992
AND 1991 AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1992

Reports of independent accountants                               F - 62  **
Consolidated statement of income                                 F - 64
Consolidated balance sheet                                       F - 65
Consolidated statement of stockholders' investment               F - 67
Consolidated statement of cash flows                             F - 68
Notes to consolidated financial statements                       F - 69


                    FRUEHAUF TRAILER CORPORATION

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1993 AND FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1993 AND 1992

     Condensed consolidated statement of income                       F - 87
     Condensed consolidated balance sheet                             F - 88
     Condensed consolidated statement of cash flows                   F - 89
     Notes to condensed consolidated financial statements             F - 90


**  To be filed by amendment.


REPORT OF INDEPENDENT ACCOUNTANTS

To be filed by amendment.

REPORT OF INDEPENDENT ACCOUNTANTS

To be filed by amendment.

TEREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME

(in thousands except per share amounts)

                                                 Year Ended December 31,
                                               1992 *    1991 *    1990 *

NET SALES                                    $523,355  $ 784,194 $ 1,023,178

COST OF GOODS SOLD                            469,345    690,313     857,119

Gross profit                                   54,010     93,881     166,059

ENGINEERING, SELLING AND ADMINISTRATIVE EXPENSES
  Third parties                                55,287    108,425     116,354
  Related parties                               2,848      5,831       5,319

                                               58,135    114,256     121,673

RESTRUCTURING COSTS                               ---     15,825         ---

  Income (loss) from operations               (4,125)   (36,200)      44,386

OTHER INCOME (EXPENSE)
  Interest income                               1,666      2,862       4,412
  Interest expense to third parties          (23,320)   (27,422)    (42,112)
  Interest expense to related parties             ---    (3,743)     (5,495)
  Equity in net income (loss)
   of affiliate companies                    (35,045)      4,209       7,480
  Royalty income from affiliates                  ---      2,518       4,221
  Royalty income from third parties                67        654         938
  Gain on sale of subsidiary stock
   and related recapitalization                 7,759     15,017         ---
  Gain (loss) on sale of property,
   plant and equipment                            ---      7,150       1,163
  Amortization / write-off of
   debt issuance costs                        (1,694)    (1,304)     (3,954)
  Other expense -net                          (2,416)    (2,381)       (433)

  Income (loss) before income taxes,
   minority interest and extraordinary loss  (57,108)   (38,640)      10,606

PROVISION FOR INCOME TAXES                         67        868       2,361

MINORITY INTEREST IN NET LOSS OF SUBSIDIARY       ---      9,722         ---

  INCOME (LOSS) BEFORE EXTRAORDINARY LOSS    (57,175)   (29,786)       8,245
EXTRAORDINARY LOSS ON RETIREMENT OF DEBT          ---        ---     (2,192)

NET INCOME (LOSS)                            $(57,175) $(29,786) $     6,053

NET INCOME (LOSS) PER  SHARE
  Income (loss) before extraordinary loss      $(5.75)   $(3.00)       $.83

Extraordinary loss on retirement of debt           ---       ---       (.22)

  Net income (loss) per share                  $(5.75)   $(3.00)       $.61

DIVIDENDS PER COMMON SHARE                       $---     $0.06       $0.05

AVERAGE NUMBER OF COMMON AND COMMON
  EQUIVALENT SHARES CONSIDERED OUTSTANDING
  IN PER SHARE CALCULATION                      9,945      9,914       9,889

* Results of Fruehauf consolidated for the years ended December 31, 1991 and 1990 and deconsolidated for the year ended December 31, 1992. See Note D.

The accompanying notes are an integral part of these financial statements.

TEREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands)

ASSETS

                                                            December 31,
                                                      1992*          1991*
CURRENT ASSETS
  Cash and cash equivalents                         $  25,671     $   13,877
  Restricted cash                                      11,479            ---
  Marketable securities                                   ---          1,080
  Trade receivables
     (less allowance of $6,348 in 1992
     and $4,142 in 1991)                               78,277         91,624
  Net inventories                                     197,136        252,574
  Other current assets                                  6,672          2,790

         Total Current Assets                         319,235        361,945

LONG-TERM ASSETS
  Other assets                                         36,971         42,251
  Assets held for sale                                  1,000         43,301
  Investment in affiliate companies                     3,871         40,146
  Property, plant and equipment - net                 116,279        129,560

TOTAL ASSETS                                        $ 477,356     $  617,203

LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES

  Notes payable                                     $   1,573     $      ---
  Trade accounts payable                               91,268         90,649
  Accrued compensation and benefits                     9,594         29,290
  Accrued warranties and product liability             32,431         18,965
  Accrued interest                                     11,819          5,285
  Accrued income taxes                                  2,043            902
  Restructuring reserve                                30,600         21,252
  Other current liabilities                            31,143         54,322
  Current portion of long-term debt                    11,543         23,636

         Total Current Liabilities                    222,014        244,301

LONG-TERM LIABILITIES
  Long-term debt, less current portion                204,489        184,952
  Long-term debt, less current portion
   - related party                                        ---          7,497
  Accrued warranties and product liability
   - long-term                                         35,910         19,160
  Postretirement health benefits                          ---         34,939
  Other long-term liabilities                          21,111         40,271

MINORITY INTEREST                                         ---         26,202

COMMITMENTS AND CONTINGENCIES (Note N)
STOCKHOLDERS' INVESTMENT

  Common Stock, $0.01 par value
  --authorized 20,000 shares in 1992 and 1991;
    issued and outstanding 9,949 in 1992
   and 9,923 in 1991                                       99             99
  Additional paid-in capital                           37,770         37,496
  Retained earnings (deficit)                        (36,231)         20,944
  Pension liability adjustment                        (4,452)        (8,233)
  Foreign currency translation adjustment             (3,354)          9,575

         Total Stockholders' Investment               (6,168)         59,881

TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT      $ 477,356     $  617,203

* Fruehauf consolidated at December 31, 1991 and deconsolidated at December 31, 1992. See Note D. The accompanying notes are an integral part of these financial statements.

TEREX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' INVESTMENT

(in thousands)

                               Additional  Retained  Pension   Cumulative
                       Common   Paid-in    Earnings Liability Translation
                       Stock    Capital   (Deficit) Adjustment Adjustment Total

BALANCE AT DECEMBER 31,
 1989
As previously reported  $ 98   $ 36,188  $48,361    $  ---   $ (1,782) $82,865
Prior period
 adjustment (Note B)     ---       ---   (2,617)       ---        ---   (2,617)

As restated               98    36,188    45,744       ---    (1,782)   80,248
Exercise of stock
 options                   1       730       ---       ---         ---     731
Redemption of
 stock warrants          ---       320       ---       ---         ---     320
Cash dividend            ---       ---     (472)       ---        ---     (472)
Net income               ---       ---     6,053       ---        ---    6,053
Pension liability
 adjustment              ---       ---       ---   (6,960)        ---   (6,960)
Translation adjustment   ---       ---       ---        ---    21,337   21,337

BALANCE AT DECEMBER 31,
 1990                     99    37,238    51,325   (6,960)     19,555  101,257
Exercise of stock
 options                 ---       258       ---       ---        ---      258
Cash dividend            ---       ---     (595)       ---        ---     (595)
Net loss                 ---       ---  (29,786)       ---        ---  (29,786)
Pension liability
 adjustment              ---       ---       ---   (1,273)        ---   (1,273)
Translation adjustment   ---       ---       ---        ---    (9,980)  (9,980)

BALANCE AT DECEMBER 31,
 1991                     99    37,496    20,944   (8,233)      9,575    59,881
Exercise of stock
 options                 ---       274       ---       ---        ---       274
Net loss                 ---       ---  (57,175)       ---        ---   (57,175)
Pension liability
 adjustment              ---       ---       ---     3,781        ---     3,781
Translation adjustment   ---       ---       ---        ---   (12,929)  (12,929)

BALANCE AT DECEMBER 31,
1992 $ 99 $ 37,770 $(36,231) $(4,452) $(3,354) $ (6,168)

The accompanying notes are an integral part of these financial statements.

TEREX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS

                                (in thousands)
                                                 Year Ended December 31,
                                                1992*     1991*     1990 *
OPERATING ACTIVITIES
   Net income (loss)                        $(57,175)  $(29,786)   $6,053
   Adjustments to reconcile net income
    (loss) to net cash from (used in)
    operating activities:
     Depreciation                               7,074     11,028   10,930
     Amortization and write-off
      of deferred costs                         2,619      2,440   10,139
     Noncash extraordinary loss                   ---        ---    2,192
     Unremitted (earnings) loss
      from equity affiliates                   35,045    (2,528)  (6,748)
     Loss on sale of affiliate stock              ---      3,312      ---
     Gain on sale of subsidiary stock         (7,759)   (15,017)      ---
     Minority interest                            ---    (9,722)      ---
     Interest paid-in-kind                        ---      3,302    5,657
   Gain on sale of property, plant
    and equipment                               (363)    (7,584)  (1,163)
     Noncash restructuring costs                  ---     15,825      ---
     Other noncash charges                      1,796      1,492    1,130
     Increase (decrease) in cash due to
      changes in operating assets and
      liabilities net of the effects of
      acquisitions of businesses:
       Trade receivables                       18,806     30,314    9,173
       Net inventories                         49,176     46,297   23,285
       Other current assets                     (455)      8,207  (3,323)
       Trade accounts payable                   7,187     10,309    2,112
       Accrued compensation and benefits      (6,821)        206  (5,939)
       Accrued interest                         7,763      (623)  (3,348)
       Accrued warranties and
        product liabilities                     4,590    (2,153)      363
       Accrued income taxes                       940         29      813
       Other assets                          (19,280)      4,664    (579)
       Other liabilities                     (20,443)   (62,717) (64,709)
          Net cash from (used in)
           operating activities                22,700      7,295 (13,962)

INVESTING ACTIVITIES
   Acquisitions of businesses,
    net of cash acquired                     (86,544)    (5,865)      ---
   Capital expenditures                       (5,382)    (4,098)  (8,707)
   Advances to equity affiliates              (4,646)        ---      ---
   Proceeds from sale of excess assets          1,513      40,156  20,503
   Proceeds from sale of affiliate stock          ---      8,739      ---
   (Increase) decrease in marketable securities    42      (558)    7,274
   Other                                          206        462      ---
          Net cash from (used in)
           investing activities              (94,811)     38,836   19,070

FINANCING ACTIVITIES
   Net repayments under revolving line
    of credit agreements                     (55,753)      (195)  (3,968)
   Principal repayments of long-term debt     (9,109)   (96,726)(136,454)
   Proceeds from issuance of long-term debt   151,890     16,285  122,055
   Proceeds from sale of minority interest
    in subsidiary                                 ---     41,040      ---
   Other                                        2,258    (1,091)  (2,165)
          Net cash from (used in)
           financing activities                89,286   (40,687) (20,532)

   Effect of exchange rate changes on
    cash and cash equivalents                 (2,396)      (521)    (135)
NET INCREASE (DECREASE) IN
 CASH AND CASH EQUIVALENTS                     14,779      4,923 (15,559)
CASH AND CASH EQUIVALENTS AT
 BEGINNING OF YEAR                             13,877      8,954   24,513
LESS:  FRUEHAUF CASH AND CASH EQUIVALENTS
 AT BEGINNING OF YEAR                         (2,985)        ---      ---
CASH AND CASH EQUIVALENTS AT END OF YEAR      $25,671    $13,877   $8,954

* Results of Fruehauf consolidated for the years ended December 31, 1991 and 1990, and deconsolidated for the year ended December 31, 1992. See Note D. The accompanying notes are an integral part of these financial statements.


TEREX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1992

(dollar amounts in thousands, unless otherwise noted, except per share amounts)

NOTE A -- SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation. The Consolidated Financial Statements include the accounts of Terex Corporation and its majority controlled subsidiaries ("Terex" or the "Company"). All intercompany balances, transactions and profits have been eliminated. The equity method is used to account for investments in affiliates in which the Company has an ownership interest between 20% and 50%, with the exception of the Company's 42% investment in the outstanding common stock of Fruehauf Trailer Corporation ("Fruehauf"). Because of the existence of a voting trust among Terex and certain individuals, the Company continued to have voting control of Fruehauf after Fruehauf's initial public offering ("IPO") and, accordingly, continued to account for Fruehauf as a consolidated subsidiary in 1991. The voting trust terminated during 1992 and, accordingly, the Company presently accounts for its 42% ownership interest in Fruehauf using the equity method. The Company's consolidated financial statements are presented giving effect to the deconsolidation of Fruehauf as of January 1, 1992 (see Note D -- "Investment in Fruehauf Trailer Corporation"). The cost method is used to account for investments in affiliates in which the Company has an ownership interest of less than 20%.

Cash and Cash Equivalents. All short-term investments, which consist of highly liquid investments with original maturities of three months or less, are considered to be cash equivalents. The carrying amount of cash and cash equivalents approximates fair value because of the short maturity of those instruments.

Restricted Cash. The Company has classified as restricted, certain cash and cash equivalents that are not fully available for use in its operations. Provisions of certain of the Company's lending agreements require that amounts be deposited in a cash collateral account when specified conditions exist. Access by the Company to such amounts is restricted by the terms of the lending agreement. Restricted cash at December 31, 1992 and 1991 totaled $11,479 and $0, respectively. The balance at December 31, 1992 represented the highest amount required to be deposited in the cash collateral account during 1992.

Inventories. Inventories are stated at the lower of cost or market value. Cost is determined by the last-in, first-out ("LIFO") method for certain domestic inventories and by the first-in, first-out ("FIFO") method for inventories of foreign subsidiaries and certain domestic inventories. Approximately 52% and 49% of consolidated inventories at December 31, 1992 and 1991, respectively are accounted for under the LIFO method.

Debt Issuance Costs. Debt issuance costs represent costs associated with securing the Company's financing arrangements. Such amounts are presented as a component of Other Assets in the Consolidated Balance Sheet. Capitalized debt issuance costs are amortized over the life of the respective debt agreement. Unamortized debt issuance costs totaled $10,614 and $5,077 at December 31, 1992 and 1991, respectively. During 1992, 1991 and 1990, the Company amortized $1,694, $1,304 and $2,814, respectively, of capitalized debt issuance costs.

Intangible Assets. Intangible assets include the excess of purchase price over the fair value of identifiable net assets of acquired companies and are being amortized on a straight-line basis over periods ranging from 12-15 years. Other intangible assets include costs allocated to patents, trademarks and other specifically identifiable assets arising from business combinations. Such amounts are amortized on a straight-line basis over the respective estimated useful lives not exceeding seven years. Included as a component of Other Assets in the Consolidated Balance Sheet at December 31, 1992 and 1991, are unamortized intangible assets of $10,938 and $1,120, respectively. Accumulated amortization at December 31, 1992 and 1991 was $599 and $0, respectively. Amortization of intangible assets was $599, $0 and $0 in 1992, 1991 and 1990, respectively.

Property, Plant and Equipment. Property, plant and equipment are stated at cost. Expenditures for major renewals and improvements are capitalized while expenditures for maintenance and repairs not expected to extend the life of an asset beyond its normal useful life are charged to expense when incurred. Plant and equipment are depreciated over the estimated useful lives of the assets under the straight-line method of depreciation for financial reporting purposes and both straight-line and other methods for tax purposes. Certain property, plant and equipment held for sale is included in Assets Held For Sale (see Note H -- "Assets and Business Held for Sale"), and is carried at the lower of cost or net realizable value. The cost of assets and the related amounts of accumulated depreciation are eliminated from the accounts when the assets are retired or sold.

Revenue Recognition. Revenue and costs are generally recorded when products are shipped and invoiced to either independently owned and operated dealers or customers. Certain new units may be invoiced prior to the time customers take physical possession. Revenue is recognized in such cases only when the customer has a fixed commitment to purchase the units, the units have been completed, tested and made available to the customer for pickup or delivery, and the customer has requested that the Company hold the units for pickup or delivery at a time (generally within two weeks) specified by the customer at the time the customer is notified that the unit is completed or specified in the sales agreement. In such cases, the units are invoiced under the Company's customary billing terms, title to the units and risks of ownership passes to the customer upon invoicing, the units are segregated from the Company's inventory and identified as belonging to the customer and the Company has no further obligations under the order.

Accrued Warranties and Product Liability. The Company's financial statements reflect accruals for potential warranty and product liability claims based on the Company's claim experience. Warranty costs are accrued at the time revenue is recognized. The Company provides self-insurance reserves for estimated product liability experience on known claims and for claims anticipated to have been incurred which have not yet been reported. Certain of the Company's product liability accruals, principally related to the forklift business acquired during 1992 (see Note C -- "Acquisitions"), are presented on a discounted basis. The related discount of $8,567 at December 31, 1992, computed at 8.0%, is recorded as a direct reduction of gross product liability claims and is amortized using the effective interest rate method. Interest expense attributable to the amortization of the discount aggregated $1,250 in 1992. The remainder of the Company's product liability accruals are presented on a gross settlement basis.

Foreign Currency Translation. The majority of the assets and liabilities of the Company's international operations are translated at year-end exchange rates; income and expenses are translated at average exchange rates prevailing during the year. For operations whose functional currency is the local currency, translation adjustments are accumulated in the Cumulative Translation Adjustment component of Stockholders' Investment. Gains or losses resulting from foreign currency transactions are included in Other Expense. Net foreign exchange losses were $2,413, $211 and $173 in 1992, 1991 and 1990, respectively.

Environmental Policies. Environmental expenditures that relate to current operations are either expensed or capitalized. Expenditures relating to conditions caused by past operations that do not contribute to current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or remedial actions are probable, and the costs can be reasonably estimated. Generally, the timing of these accruals coincides with completion of a feasibility study or the Company's commitment to a formal plan of action.

Research and Development Costs. Research and development costs are expensed as incurred. Such costs incurred in the development of new products or significant improvements to existing products amounted to $3,814 in 1992, $4,034 in 1991, and $7,982 in 1990.

Income Taxes. The Company accounts for income taxes in accordance with Statement of Financial Accounting Standard ("SFAS") No. 96, "Accounting For Income Taxes" (see Note K -- "Income Taxes"), which requires the Company to follow the liability method. The liability method provides that deferred tax assets and liabilities be recorded based upon the difference between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Stock Split. The Company's Board of Directors declared a five-for-four stock split of the Company's common stock on May 24, 1990 to shareholders of record on May 11, 1990. Except as otherwise stated, all reference to numbers of shares and to per share information in the consolidated financial statements have been adjusted to reflect the stock split on a retroactive basis.

Issuance of Stock by a Subsidiary. The Company accounts for increases and decreases in its proportionate share of a subsidiary's equity arising from the issuance of stock by the subsidiary and related transactions as gains and losses in the Consolidated Statement of Income (see Note D -- "Investment in Fruehauf Trailer Corporation").

Net Income (Loss) Per Share. Net income (loss) per share is based on the weighted average number of common and common equivalent shares outstanding during the year. The dilutive effect of common stock equivalents (if applicable) is calculated using the treasury stock method.

Reclassifications. Certain amounts shown for 1990 and 1991 have been reclassified to conform to the 1992 presentation.

Recent Pronouncements. In December 1990, the Financial Accounting Standards Board ("FASB") issued SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions", which covers health care and other welfare benefits provided to retirees. The statement, among other things, requires an accrual of the obligation to provide future benefits to employees during the years that the employees provide service. The Company will adopt this standard during the first quarter of 1993 using the delayed recognition method provided for in SFAS 106. The Company's Heavy Equipment Segment has an estimated unfunded accumulated postretirement transition obligation ranging from $4 million to $5 million. No change in the Company's current practice of funding these benefits on a pay-as-you-go basis is currently anticipated.

In February, 1992, the FASB issued SFAS No. 109, "Accounting For Income Taxes" to supersede SFAS No. 96, "Accounting For Income Taxes". The Company has reflected its tax provisions and liabilities using the principles of SFAS No.
96. The new pronouncement retains certain concepts of SFAS No. 96, but generally simplifies its application. The Company will adopt this standard during the first quarter of 1993. The impact of adoption is not anticipated to have a significant effect on the Company's financial position or results of operations.

In November, 1992, the FASB issued SFAS No. 112, "Employers' Accounting for Postemployment Benefits". This pronouncement establishes accounting and reporting for the estimated cost of benefits provided by an employer to former or inactive employees after employment but before retirement. For the most part, the Company already accounts for such benefits on an accrual basis. Therefore, the impact of adoption is not anticipated to have a significant effect on the Company's financial position or results of operations. The Company will adopt this standard during the first quarter of 1994.

NOTE B -- RESTATEMENTS

The accompanying financial statements reflect restatement for current year and prior years activity and transactions as described below:

Restatement of the year ended December 31, 1992.

As described in Note D - "Investment in Fruehauf Trailer Corporation," after an initial public offering of Fruehauf common stock in July 1991 the Company owned approximately 42% of the outstanding common stock of Fruehauf. Due to additional control factors, including shares owned by certain officers of Terex, the presence of three Terex directors on Fruehauf's board, the service of two Terex executive officers as executive officers of Fruehauf, and the existence of a voting trust among Terex and certain individuals, the Company concluded it had a controlling financial interest in Fruehauf. Accordingly, in the Company's Annual Report on Form 10-K for the year ended December 31, 1992 as originally filed, Fruehauf's results were included in the Company's consolidated financial statements for the years ended December 31, 1991 and 1992.

After consultation with the Securities and Exchange Commission staff, management subsequently decided that despite the control factors described above, assurance of strict numerical voting control of Fruehauf by Terex was eliminated as a result of the termination of the voting trust between Terex and certain individuals in July 1992 and, therefore, Terex should not consolidate Fruehauf in its 1992 financial statements. Accordingly, management has restated the financial statements for the year ended December 31, 1992 to account for the Company's investment in Fruehauf on the equity method effective January 1, 1992.

The following table sets forth selected information as originally reported and as restated for the year ended December 31, 1992:

                                                        Year Ended
                                                       December 31,
                                                           1992
Net Sales
   As Originally Reported                             1,012,253
   As Restated                                          523,355

Net Income (Loss)
   As Originally Reported                              (61,088)
   As Restated                                         (57,175)

Net Income (Loss) Per Share
   As Originally Reported                                 (6.14)
   As Restated                                            (5.75)

Average Number of Common and
 Common Equivalent Shares Outstanding                     9,945

Restatement of the years ended December 31, 1987 through 1991

As a result of inquiries by its current independent accountants, the Company reviewed its accounting treatment for certain prior year transactions and concluded that the financial statements for the years ended December 31, 1987 through 1991 required restatement with respect to the accounting for the refinancing of debt, detachable warrants issued with debt, certain property, plant and equipment transactions and other miscellaneous items.

Terex Corporation

The Company issued debt with detachable warrants in 1987. A nominal value was initially assigned to the warrants and the incremental cost of redeeming the warrants over the initial value assigned was originally classified as a deferred charge and was to be amortized over the life of the debt agreement. In 1992, management concluded that the initial value assigned to the warrants at the date of issuance did not reflect fair value. Management obtained an estimate of the fair value of the warrants at the date of issuance and concluded that the fair value of the warrants at date of issuance should have been recorded as debt discount and amortized to interest expense over the life of the debt and that the cost of redeeming the warrants in excess of the revised value of the warrants at the time of issuance should be charged to retained earnings. Retained earnings as of December 31, 1989 was reduced by $1,432 to reflect this revised accounting. Income before extraordinary items and net income were increased by $146 in 1990 and net income was increased by $100 in 1991.

In 1992, management concluded that the carrying value of certain properties were adjusted to amounts in excess of lower of cost or market during 1990 and 1991 by $6,403 and $434, respectively. Therefore, management has restated its financial statements for the years ended December 31, 1990 and 1991 to appropriately account for the property, plant and equipment.

The impact of the revised accounting for the Fruehauf debt transaction and the Fruehauf warrants, as discussed below, resulted in an incremental gain of $2,453 in 1991 related to the initial public offering of Fruehauf common stock and related recapitalization.

Fruehauf Trailer Corporation

Fruehauf issued debt with detachable warrants in 1989. A nominal value was initially assigned to the warrants and the incremental cost of redeeming the warrants over the initial value assigned was originally classified as a deferred charge and was to be amortized over the life of the debt agreement. In 1992, management concluded that the initial value assigned to the warrants at the date of issuance did not reflect fair value. Management obtained an estimate of the fair value of the warrants at the date of issuance and concluded that the fair value should have been recorded as debt discount. In addition, management concluded that the cost of redeeming the warrants in excess of the revised value of the warrants at the time of issuance should be charged to earnings as interest cost.

In 1990, Fruehauf accounted for a debt transaction as a modification to an existing debt instrument as opposed to an extinguishment of debt and the issuance of new debt. In accounting for the transaction as a modification, Fruehauf continued to defer and amortize the existing deferred debt issuance costs over the life of the modified debt instrument. Had Fruehauf accounted for the transaction as an extinguishment of debt, all unamortized debt issuance costs would have been written off at that time as an extraordinary charge to earnings. Management concluded after review, that it was not appropriate for Fruehauf to continue to defer debt issuance costs associated with the previously outstanding long-term debt upon the refinancing and, therefore, has restated its financial statements for the years ended December 31, 1990 and 1991 to reflect the revised accounting treatment for the debt issuance costs. The revised accounting treatment for the Fruehauf warrants and debt issuance costs resulted in a reduction of retained earnings as of December 31, 1989 of $1,185, a reduction in income before extraordinary items of $2,308 and a reduction in net income of $4,500 in 1990, and an increase to net income of $815 in 1991. A one-time extraordinary loss of $2,192, or $(.22) per share, has been recorded in 1990 to write-off the unamortized debt issuance costs relating to the refinanced debt.

The following table sets forth selected information as originally reported and as restated for the years ended December 31, 1991 and 1990:

                                                Year Ended December 31,
                                                    1991          1990

Income (Loss) Before Extraordinary Loss
  As Originally Reported                        (33,413)         15,483

  As Restated                                   (29,786)          8,245

Net Income (Loss)
  As Originally Reported                        (33,413)         15,483

  As Restated                                   (29,786)          6,053

Income (Loss) Per Share Before Extraordinary Loss
   As Originally Reported                         (3.37)          1.57
   As Restated                                    (3.00)           .83

Net Income (Loss) Per Share
   As Originally Reported                         (3.37)          1.57
   As Restated                                    (3.00)           .61

Average Number of Common and Common
 Equivalent Shares Outstanding                     9,914          9,889

NOTE C -- ACQUISITIONS

Clark Material Handling Company - On July 31, 1992, the Company completed the acquisition of the common stock of Clark Material Handling Company and certain affiliate companies ("Clark") from Clark Equipment Company (the "Clark Acquisition"). Clark is engaged in the design, manufacture and marketing of internal combustion and electric forklift and lift trucks and related parts and equipment. The purchase price of the Clark Acquisition was $91,090, which was funded by $85,000 of cash and a $6,090 seller note.

The acquisition was accounted for using the purchase method with the purchase price of the acquisition allocated to assets acquired and liabilities assumed based upon their respective estimated fair value at the date of the acquisition. Purchase price allocations were based on evaluations, estimations, appraisals, actuarial studies and other studies performed by the Company. The excess of purchase price over the net assets acquired ($3,090) is included in other assets and is being amortized on a straight-line basis over 15 years.

The estimated fair values of assets and liabilities acquired on July 31, 1992, net of cash acquired of $4,546, are summarized as follows:

Accounts receivable                       $   47,291
Inventories                                  100,450
Other current assets                           2,519
Property, plant and equipment                 95,284
Other assets                                  22,568
Goodwill                                       3,090
Accounts payable and other
 current liabilities                       (139,063)
Noncurrent liabilities                      (45,595)
                                          $   86,544

The operating results of this acquisition are included in the Company's consolidated results of operations since August 1, 1992. The following unaudited pro forma summary presents the consolidated results of operations as though the Company completed the Clark Acquisition on January 1, 1991, after giving effect to certain adjustments, including amortization of goodwill and intangible assets, increased depreciation resulting from the revaluation of property, plant and equipment, interest expense and amortization of debt issuance costs on the acquisition debt, and reduced operating costs related to recurring cost savings which are directly attributable to the Clark Acquisition.

                                                     Pro Forma
                                                    For the Year
                                                 Ended December 31,
                                                 1992          1991
Net sales                                      $811,859     $1,286,942
Loss from operations                           (14,452)       (62,888)
Net loss                                       (76,513)       (70,309)
Net loss per share                            $(7.69)        $(7.09)

The unaudited pro forma consolidated results do not represent actual operating results. The pro forma amounts were prepared by management and should not be interpreted as predictive of the Company's future results of operations. The Company is actively reorganizing the operations of Clark by consolidating manufacturing and distribution operations. Consequently, management does not view the combination of the historical financial results of the Company and Clark as a meaningful representation of the Company's future operations.

Mark Industries - In December 1991, the Company purchased substantially all operating assets of Mark Industries ("Mark"), a leader in the manufacture and sale of aerial lift equipment, for $5,865. The fair values of the assets acquired, net of liabilities assumed, was approximately $315. The Company continues to use the purchased assets for the manufacture and sale of aerial lift equipment. The results of operations of Mark since December 31, 1991 have been included in the accompanying consolidated financial statements.

The acquisition was accounted for using the purchase method with the purchase price of the acquisition allocated to assets acquired and liabilities assumed based upon their respective estimated fair value at the date of the acquisition. Purchase price allocations were based on evaluations, estimations and other studies performed by the Company. The final allocation of the Mark purchase price allocation was completed in 1992. The excess of the purchase price over the net assets acquired ($5,550) is included in Other Assets and is being amortized on a straight-line basis over 12 years.

NOTE D-- INVESTMENT IN FRUEHAUF TRAILER CORPORATION

Initial Public Offering and Recapitalization

On July 8, 1991, Fruehauf completed an initial public offering ("IPO") of 4,000,000 shares of Fruehauf common stock at a price of $11 per share. Fruehauf applied all of the net proceeds of the offering to repay indebtedness. In conjunction with Fruehauf's IPO, the Company contemplated related exchange transactions between certain stockholders and warrantholders of the Company and Fruehauf. In determining the Company's net gain in 1991 on the Fruehauf IPO, the Company considered the impact of these related exchange transactions. The estimated impact of these exchange transactions was a loss of approximately $7,759. The loss was recorded as a reduction of the gain on the sale of Fruehauf of $22,776, for a net gain of $15,017 in 1991. During the fourth quarter of 1992, the exchange agreement expired and management and the parties to the exchange concluded that the exchange transactions originally contemplated were no longer in the best interests of the Terex and Fruehauf stockholders. Accordingly, the $7,759 reserve for the estimated impacts of the exchange transactions was recorded into income in the fourth quarter of 1992. The impact of this transaction is recorded as a component of Other Income in the Consolidated Statement of Income. Prior to the IPO, Fruehauf was a wholly-owned subsidiary of the Company. Following the IPO and as of December 31, 1992, the Company owns approximately 42% of the outstanding common stock of Fruehauf. Pending the consummation of the exchange transactions, Terex's principal shareholder and certain other individuals placed 956,000 shares of Fruehauf common stock in a voting trust to enable the Company to retain voting control of more than 50% of Fruehauf's outstanding common stock. Because the voting trust allowed the Company to retain a controlling financial interest in Fruehauf, the Company included Fruehauf in its consolidated financial statements for 1991. The voting trust terminated during 1992 and, accordingly, the Company presently accounts for its 42% ownership interest in Fruehauf using the equity method. The Company's consolidated financial statements are presented giving effect to the deconsolidation of Fruehauf as of January 1, 1992.

Minority interest, representing other stockholders' interest in Fruehauf, is classified between noncurrent liabilities and stockholders' investment in the Consolidated Balance Sheet. The minority interest share in the net loss of Fruehauf's operations was $9,722 in 1991.

Unaudited pro forma consolidated results of operations for 1991 and 1990, as though the Company completed the Fruehauf IPO, recapitalization, and related transactions on January 1, 1990 and excluding the nonrecurring gain of $15,017 recorded by the Company in 1991, are as follows:

                                                 Year Ended December 31,
                                                   1991           1990

Net sales                                       $784,194       $1,023,178
Income (loss) from operations                   (36,200)           44,386
Net income (loss) before extraordinary loss     (36,594)           12,811
Net income (loss)                               (36,594)           10,619
Net income (loss) per share                     $(3.69)          $1.07

These unaudited pro forma consolidated results have been prepared pursuant to Article 11 of Securities and Exchange Commission Regulation S-X and are not necessarily representative of the operating results or financial position the Company would have achieved had the events reflected therein occurred at the dates assumed. Additionally, these financial statements are not representative of the future results or financial position that the Company will record. These pro forma consolidated results should be read in conjunction with the audited historical consolidated financial statements of the Company and the notes thereto.

Restructuring Costs

During 1991, Fruehauf recorded the impact of a restructuring plan designed to increase the overall profitability of Fruehauf by closing or selling certain operations that have not met profitability expectations. Restructuring costs of $15,825 represent provisions for the anticipated future cost of implementing a restructuring of Fruehauf's distribution system and other nonrecurring costs related to streamlining Fruehauf's manufacturing operations. The components of the restructuring costs are as follows:

Branch conversion costs $ 5,700

During 1992, Fruehauf recorded additional restructuring costs of $15,500, representing revisions of the estimates relating to the restructuring plan in 1991, which are included in determining the Company's equity in the net loss of Fruehauf for 1992.

Plan of Restructuring and Refinancing

In the fourth quarter of 1991, Fruehauf had taken significant actions to reduce its overall cost structure and improve liquidity. As discussed above, Fruehauf implemented a restructuring program affecting its distribution system and certain of its manufacturing operations. This program continued through 1992 with additional actions, including, among others, temporary plant shutdowns, salary reductions and reductions in fringe benefits.

As a result of the continuing losses, which have continued through the first quarter of 1993, Fruehauf was not in compliance with certain financial covenants at December 31, 1992. On March 15, 1993, Fruehauf and its lenders amended the terms of its Bank Credit Facility. Fruehauf is attempting to secure alternative financing which would provide incremental borrowing and enable it to extinguish all amounts owed under the Bank Credit Facility. Additionally, the Company and Fruehauf announced on January 12, 1993 that a number of unsolicited inquiries had been received from qualified parties expressing an interest in purchasing the Fruehauf business. As a result of this interest, a financial advisor was retained to explore opportunities for maximizing Fruehauf's stockholder value. Given the uncertainty of the transaction, the Company has not recorded the Fruehauf operating results in accordance with Accounting Principles Board Opinion No. 30 "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions". The impact of any consummated transactions will be recorded at the time the transaction is completed.

Summary Financial Information

Assets of the Fruehauf operation totaled $276,658 at December 31, 1992 consisting of current assets of $102,715 and noncurrent assets of $173,943. Current assets consist primarily of cash, receivables, inventories and prepaid expenses which management believes will be disposed in the normal business cycle, while noncurrent assets consist primarily of property, plant and equipment, investments in affiliates, assets held for sale, a facility leased to a Fruehauf affiliate and certain other noncurrent assets. Liabilities of the Fruehauf operation are $294,176 at December 31, 1992 consisting of current liabilities of $196,641 and noncurrent liabilities (exclusive of a $14,890 long-term payable to Terex) of $82,645. Current liabilities include trade payables, accrued compensation and benefits, the current portion of long-term debt and other accruals. Noncurrent liabilities include the noncurrent portion of postretirement health care costs, product liability, environmental obligations and other long-term reserve requirements. Sales of Fruehauf were $489 million, $513 million and $589 million in 1992, 1991 and 1990, respectively, and net loss (100% basis) of the Fruehauf operation was $65,160, $28,876 and $2,176 in 1992, 1991 and 1990, respectively.

Because Fruehauf has experienced significant losses since 1991 and continues to have a stockholders' deficit after the new equity investment, Terex's carrying value for its investment in Fruehauf has been reduced to zero. Terex has also recognized a contingent obligation of approximately $3 million, with respect to guaranties by Terex of certain obligations of Fruehauf. Until such time as Fruehauf returns to profitability and achieves a positive net worth, the Company does not expect to recognize any additional losses or income with respect to its investment in Fruehauf.

NOTE E -- INVESTMENTS IN AFFILIATE COMPANIES

The Company has a less than 50% investment in North Hauler Limited Liability Company ("North Hauler") which was acquired in 1987. North Hauler, located in Baotou, Inner Mongolia, People's Republic of China, is engaged in the manufacturing and marketing of off-highway trucks for use in mining, road construction and other heavy industries. The carrying value of this investment is $-0- at December 31, 1992.

In March 1992, the Company sold an 80% interest in Benton Harbor Engineering, Inc. for a purchase price of $4,300. No gain or loss was recorded on the disposal. The Company financed the sale through the issuance of a $4,300 seller note ("BHE Note"). The note is payable in annual installments on December 31, 1993 and December 31, 1994 and semiannually thereafter through June 2003. The interest rate is initially at the rate of prime plus 2%, with such rate increasing by one percent on each anniversary of the date the first interest payment is due to a maximum of five percent over the then prime rate. The note is secured by the purchased assets, as well as all assets subsequently acquired. There is no quoted market value for this note, therefore, a precise estimate of the fair value could not be made without incurring excessive costs. However, given that the note originated in March 1992, management believes that the carrying value approximates fair value. The carrying value of this investment is $3,871 at December 31, 1992.

Fruehauf has less than 50% investments in three foreign corporations engaged in the design, manufacture and marketing of truck trailers. Fruehauf's investment in Societe Europeenne de Semi-Remorques, S.A. ("SESR"), Europe's leading trailer manufacturer, is the largest equity investment with a recorded value at December 31, 1991 of $30,072. The book value of Fruehauf's investment in SESR exceeds Fruehauf's proportionate share of the underlying equity in net assets. The related excess purchase price of $8,010 at December 31, 1991, is being amortized on a straight-line basis over 20 years. During 1991, Fruehauf sold a portion of its investment in SESR, which was in turn sold to SESR, reducing its ownership from approximately one-third to approximately 23%. In addition to the $8,739 of cash received upon the sale of SESR shares, 1) certain litigation between SESR and Fruehauf was settled, 2) Fruehauf shares of SESR and related accumulated dividends previously held in escrow as a result of the aforementioned litigation were released to Fruehauf, 3) Fruehauf representatives to the SESR Board of Directors were reinstated, 4) and expiring royalty and trademark and license agreements between SESR and Fruehauf were renegotiated. As a net result of these transactions, Fruehauf recorded a loss of $3,312.

The carrying value of Fruehauf's other affiliate accounted for under the equity method is $7,557 at December 31, 1991. The carrying value of Fruehauf's two affiliates accounted for under the cost method is $2,516 at December 31, 1991.

Summarized financial data (100% basis) for Fruehauf's affiliates accounted for under the equity method is as follows:

                                                 Year Ended December 31,
                                                   1991           1990
Net sales                                       $822,045        $831,372
Gross profit                                     133,190         139,600
Net income (loss)                                 15,238          24,594

                                                       December 31,
                                                    1991          1990
Current assets                                  $424,405        $401,483
Noncurrent assets                                212,428         182,118
Current liabilities                              283,690         246,141
Noncurrent liabilities and deferred taxes        190,013         169,665

Fruehauf's share of the net income (loss) of affiliate companies accounted for using the equity method was $4,209 and $7,480 for the years ended December 31, 1991 and 1990, respectively. Dividends received from such companies totaled $1,681 for 1991, and $732 for 1990. Dividends received from affiliated companies accounted for under the equity method are applied as a reduction of the carrying value of the investments.

Fruehauf received dividends from its affiliates accounted for using the cost method totaling $130 and $146 in 1991 and 1990, respectively. Such dividends are included in Other income (expense) in the Consolidated Statement of Income.

Fruehauf sold material to its less than 50% equity affiliates totaling approximately $5,688 and $6,761 for the years ended December 31, 1991 and 1990, respectively. Such sales were made on the same terms and conditions as with other customers. In addition, Fruehauf received amounts pursuant to royalty and trademark and license agreements from its less than 50% owned equity affiliates totaling $2,518 and $4,221 for the years ended December 31, 1991 and 1990, respectively. Amounts receivable from such affiliates at December 31, 1991 and 1990 totaled $2,040 and $2,352, respectively.

NOTE F -- INVENTORIES

Inventories consist of the following:

                                                       December 31,
                                                    1992          1991

New equipment                                    $50,689        $64,875
Used equipment                                     1,495         19,761
Work-in-process and finished parts                83,090         99,879
Raw materials and supplies                        67,014         63,078
Long-term contract costs in excess of
 customer advances of $0 in 1992 and
 $4,749 in 1991                                      ---          3,422

     Gross inventories                           202,288        251,015
Add:  Excess of LIFO inventory value
 over (under) FIFO costs                         (5,152)          1,559

   Net inventories                              $197,136       $252,574

Adequate provisions have been recorded for all inventory determined to be surplus or obsolete. That determination incorporates management's best estimate of the Company's future operations and the economic conditions in the industries served by the Company.

NOTE G -- PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following at:

                                                       December 31,
                                                    1992           1991

Property                                         $14,434        $35,897
Plant                                                            54,662
59,716
Equipment                                         73,021         77,250

                                                 142,117        172,863
Less: Accumulated depreciation                    25,838         43,303

  Net property, plant and equipment             $116,279       $129,560

NOTE H -- ASSETS AND BUSINESS HELD FOR SALE

Fruehauf is holding for sale certain excess real estate, facilities and other assets, as well as the Decatur Business, which are included in the December 31, 1991 consolidated balance sheet under the caption "Assets Held for Sale."

The Decatur Business consists of Fruehauf's wholly-owned aluminum extrusion business and a 50% equity interest in Decatur Aluminum Company, a corporation engaged in the production of aluminum sheeting. The Decatur Business supplies aluminum sheeting and extrusions to Fruehauf's trailer manufacturing plants. Fruehauf acquired the Decatur Business as part of the Fruehauf acquisition and has announced its intention to divest this business. The Decatur Business is included in the Consolidated Balance Sheet for ($1,077) at December 31, 1991. Changes in the carrying value of the Decatur Business result from the net cash used in (generated from ) the Decatur Business. The operating results of the Decatur Business are not included in the Consolidated Statement of Income. The Decatur Business experienced losses of approximately $900, and $800 in 1991 and 1990, respectively, which were excluded from the Consolidated Statement of Income. Reserves were established at the Fruehauf acquisition to absorb operating results until the Decatur Business is divested. Revenues from the Decatur Business (on a 100% basis) were $62,538 in 1992, $55,055 in 1991, and $57,204 in 1990. The majority of these revenues were intercompany sales which would have been eliminated in consolidation.

Fruehauf previously announced its intention to divest Jacksonville, its wholly-owned ship repair subsidiary, at the time of the Fruehauf acquisition in 1989. Jacksonville's primary floating dry-docks were sold in September, 1991 for $28,750, and the proceeds were applied against the repayment of Jacksonville's $29,600 of Industrial Development Revenue Bonds. Substantially all remaining operations at Jacksonville ceased in 1992, and a program was implemented to liquidate the remaining assets, consisting primarily of real estate and receivables. Fruehauf recorded a $11,551 charge in 1992, relating to the closure and liquidation of Jacksonville, which is included in determining the Company's equity in the net loss of Fruehauf for 1992.

The results of Jacksonville are not included in the Consolidated Statement of Income. Jacksonville revenues were $40,700 in 1991 and $31,400 in 1990 and losses were $3,400 in 1991 and $2,500 in 1990. Jacksonville's assets and liabilities are included in the December 31, 1991 Consolidated Balance Sheet under the respective captions.

In December 1991, Fruehauf sold substantially all the operating assets of CEMCO for $6,150 and recorded a gain of $6,599. CEMCO had been in the business of manufacturing cranes. The net proceeds of the sale were used to reduce Fruehauf's outstanding indebtedness. The remaining assets and liabilities of CEMCO, consisting primarily of receivables and warranties, are included in the December 31, 1991 Consolidated Balance Sheet. The operating results of CEMCO are not included in the Consolidated Statement of Income because reserves were established at the time of the Fruehauf acquisition to absorb such operating losses.

In addition to the Decatur Business and Jacksonville's real estate, Fruehauf holds for sale other idle facilities. As a result of manufacturing and distribution restructuring programs, certain facilities were added to the Assets Held for Sale in 1991. Fruehauf is actively marketing all excess properties, and in certain instances, is leasing them in order to generate funds to help cover holding costs. These nonoperating properties are carried on a lower of cost or market basis. In the opinion of management, adequate reserves have been established to absorb holding costs until disposition. As previously discussed in Note D -- "Investment in Fruehauf Trailer Corporation", Fruehauf wrote-down certain assets held for sale and recorded provisions for related holding costs in 1991.

Excluding the proceeds generated from the sale of CEMCO's operating assets and Jacksonville's floating dry-docks, Fruehauf generated proceeds from the sale of excess assets of $4,785 and $18,919 in the years ended December 31, 1991 and 1990, respectively. All proceeds generated from the sale of excess Fruehauf assets are required to be applied against the outstanding indebtedness under Fruehauf's Bank Credit Facility (see Note I -- "Long-Term Obligations").

NOTE I -- LONG-TERM OBLIGATIONS

Long-term debt is summarized as follows:

                                                       December 31,
                                                   1992           1991

Terex and Clark Debt:
Senior Secured Notes bearing interest at 13%,
 due August 1, 1996                             $158,895         $  ---
Secured Senior Subordinated Notes bearing
 interest at 13.5% payable in equal annual
 principal installments, due July, 1997           40,725         48,700
Secured promissory note bearing interest
 at prime rate, due July 31, 1994                  6,090            ---
Unsecured term note bearing interest at 9.0%
 payable in equal semiannual installments
 from August, 1994 to February, 1998                 757            935
Unsecured term notes bearing interest at prime
 rate plus 0.5%, due June, 1993                      ---         20,000
Unsecured term notes bearing interest from
 6.5% - 7.0%, due June, 1993                         ---         42,000
Unsecured noninterest bearing term note with
 an imputed interest rate of 10.3% payable
 in equal annual installments of $2,000 from
 January, 1990 to January, 1992                      ---          1,991
Other                                                123            ---
Capital lease obligations (Note J)                 9,442          5,455

   Total Terex and Clark                         216,032        119,081

Fruehauf debt:
Secured Bank Credit Agreement bearing interest
 at prime plus 2.25% in 1993, prime plus 2.0%
 in 1992, prime plus 1.5% prior thereto,
 due June, 1993                                      ---         85,128
Mortgage note bearing interest at 9.625%
 collateralized by an idle plant,
 due September, 2001                                 ---          4,379
Unsecured promissory note held by a related
 party bearing interest at 14% in 1992 and
 12% in 1991, due March, 1996                        ---          7,497

   Total Fruehauf debt                                 0         97,004

   Total long-term debt                          216,032        216,085
   Current portion of long-term debt              11,543         23,636

   Long-term debt, less current portion         $204,489       $192,449

In conjunction with the Clark Acquisition, the Company refinanced a major component of its previously outstanding bank debt (the "Refinancing"). The Refinancing included the issuance of $160 million, 13% senior secured notes, due August 1, 1996 (the "Senior Secured Notes"), establishment of a $60 million credit agreement with a commercial bank (the "Bank Lending Agreement") and amendments to its existing $50 million Secured Senior Subordinated Notes (the "Subordinated Notes"). Proceeds from the issuance of the Senior Secured Notes were used for the cash portion of the Clark Acquisition purchase price ($85 million), for the settlement of all amounts outstanding under its previous credit facility ($58 million), and for working capital and transaction costs.

Terex and Clark Debt

Senior Secured Notes and Subordinated Notes

In connection with the sale of the Senior Secured Notes and obtaining the consent of the holders of the Company's existing $50 million, 13.5% Subordinated Notes due July 1, 1997 to modification of the Subordinated Notes, the Company issued 658,409 common stock appreciation rights ("SAR's"). As of December 31, 1992 there were 639,794 SAR's outstanding. Of the outstanding SAR's, 557,385 may be exercised at the option of the holder thereof at any time on or after January 27, 1993, but not later than July 31, 1996. The remaining 82,409 SAR's may be exercised through July 1, 1997. The SAR's entitle the holder to receive, in cash, an amount equal to the market appreciation in the Company's common stock between $11 per share, subject to adjustment, and the average price per share for the 30 consecutive trading days prior to the date of exercise. The Company also amended its Subordinated Notes by granting the holders of the notes a secondary secured position in certain of the Company's assets.

The provisions of the Senior Secured Notes agreement required that the Company register the notes with the Securities and Exchange Commission by November 30, 1992 which registration was to become effective no later than March 1, 1993. As of May 12, 1993, Terex has not completed the required filing with the Securities and Exchange Commission. As a result, Terex is incurring liquidated damages of $8 per week for the first thirteen weeks and $16 per week thereafter until such filing becomes effective. Interest on the Senior Secured Notes is due semiannually on February 1 and August 1.

In June 1987, the Company initially issued the $50 million unsecured Subordinated Notes for net proceeds of $48,801. The notes, due in 1997, have annual sinking fund requirements of $8,333 due July 1 which commenced in 1992. Interest on the Subordinated Notes is due semiannually on January 2 and July 1.
As discussed above, the holders were granted a secondary secured position in certain of the Company's assets during 1992. Also, the Company agreed to repurchase $7.5 million of Subordinated Notes on May 28, 1993, approximately 30 days in advance of the date of the required sinking fund payment of $8.3 million and to apply those notes against the sinking fund payment. The Company expects to have adequate liquidity to effect such repurchase. However, without the consummation of the Lending Facilities (see the Lending Facilities discussion below), the Company would have difficulty in meeting its debt obligations on May 28, 1993 without taking steps which might impair its business. If the Lending Facilities are not consummated by May 28, 1993, management may conclude that the best interests of the Company may be served by not effecting its debt repurchase obligations on May 28, 1993. In such event, the Company will be exposed to legal action by the holders of the Subordinated Notes to be repurchased for any losses they incur.

The Senior Secured Notes are secured by substantially all inventory and property, plant and equipment of the Company's Material Handling and Heavy Equipment Segments, as well as the Company's investment in Fruehauf common stock. The Subordinated Notes holders have a secondary secured position in certain of the Company's assets. The indentures governing the Senior Secured Notes and the Subordinated Notes require, among other things, that the Company maintain certain levels of tangible net worth and collateral coverage. In the event that the Company is not in compliance with its tangible net worth covenant for two consecutive quarters or its collateral coverage covenant, the Company must offer to repurchase, at par plus accrued interest, specified portions of the principal amount of long-term debt.

The Company believes that, based on management's current estimates, it will be in compliance with its covenants with respect to its Senior Secured Notes and Subordinated Notes throughout 1993. However, certain future events could affect the Company's continuing compliance with such covenants. In particular, in computing tangible net worth under the covenants of the Senior Secured Notes and the Subordinated Notes, the Company is allowed to maintain a defined value for its investment in Fruehauf. At December 31, 1992, the defined value approximated $51.0 million. At December 31, 1992, the market value of the Company's investment in Fruehauf was $24.4 million. As discussed in Note D - "Investment in Fruehauf Trailer Corporation" to the Consolidated Financial Statements, the Company is evaluating alternatives relating to its investment in Fruehauf, including selling Terex's shares of Fruehauf common stock. If, as a result of any transactions affecting its investment in Fruehauf, or any other reason, the Company is not in compliance with certain of its covenants, the Company may be required to offer to repurchase 20% of the outstanding notes. If such offer were to be made, it is likely that the Company would require additional funding to complete the offer, and if such funding were unavailable to it, the Company would be unable to comply with the terms of the notes and the notes may be accelerated. Such circumstances could result in a material adverse impact on the Company and its financial position.

In addition to the financial covenants discussed above, the indentures governing the Senior Secured Notes and Subordinated Notes limit, among other things, Terex's ability to incur additional indebtedness, consummate mergers and acquisitions, pay dividends, sell business segments and enter into transactions with affiliates, as well as place limitations on change of control.

Certain defaults under the Bank Lending Agreement, the Senior Secured Notes and the Subordinated Notes, which existed at December 31, 1992 have been waived or cured as of May 11, 1993.

Bank Lending Agreement

Immediately following the Clark Acquisition and Refinancing and through May 12, 1993, no cash amounts were outstanding under the Bank Lending Agreement. The Bank Lending Agreement is currently utilized only for outstanding letters of credit. The Bank Lending Agreement is secured by all cash and receivables of the Company's Material Handling and Heavy Equipment Segments. The Bank Lending Agreement originally provided for cash advances or for the issuance of bank letters of credit up to the $60 million commitment subject to the available collateral.

The Bank Lending Agreement provided for adjustments to the $60 million commitment amount based upon Terex's compliance with base financial ratios. On December 31, 1992, Terex's financial ratios (based upon November 30, 1992 financial data) did not meet the base financial ratios; as a result, the commitment amount under the Bank Lending Agreement was reduced to $33,762. At December 31, 1992, the revolving credit facility was limited to the lesser of the commitment amount ($33,762) or the available borrowing base. The total borrowing base available under the Bank Lending Agreement is based upon the application of prescribed advance ratios against eligible receivable balances. Available borrowing base ranged from $26,135 to $38,332 since the inception of the Bank Lending Agreement on July 31, 1992 through December 31, 1992. At December 31, 1992, the available borrowing base was $27,444. There were no cash advances under the Bank Lending Agreement at December 31, 1992; outstanding letters of credit under the Bank Lending Agreement totaled $38,923 at December 31, 1992. Given that outstanding letters of credit were in excess of the lender determined available borrowing base, Terex was required to maintain, in its operating account, a minimum balance equal to the difference between the balance of outstanding letters of credit and available borrowing base. Such amount is presented as Restricted Cash on the Consolidated Balance Sheet.

The Bank Lending Agreement, among other things, requires that the Company maintain certain financial covenants contained in the agreement. Such covenants relate to minimum profitability ratios and levels of tangible net worth, as well as maximum levels of leverage and capital expenditures. In addition to the financial covenants, the Bank Lending Agreement limits, among other things, Terex's ability to incur additional indebtedness, consummate mergers and acquisitions, pay dividends, and enter into transactions with affiliates as well as places limitations on change in control. The Bank Lending Agreement defines "a material adverse change or an event which would have a material adverse effect" as an event of default.

The Company was not in compliance with certain financial covenants in the Bank Lending Agreement at December 31, 1992. Terex has since received waivers for the noncompliance and the financial covenants in the Bank Lending Agreement have been revised. The revised lending agreement allows no cash borrowing availability and states that beginning April 21, 1993, the Company must commence increasing the amount of the cash collateral at specified increments such that by June 30, 1993 all letters of credit are cash collateralized. The Company is attempting to secure alternative financing which would provide adequate liquidity and working capital for the Company's future needs. The Company has received preliminary credit approval from a financial institution to provide short-term financing ("Short-term Agreement") by about May 21, 1993, and a permanent financing facility ("Permanent Lending Agreement") shortly thereafter (together "The Lending Facilities"). The Short-term Agreement only provides cash advances of $15 million and will be secured by all domestic receivables of the Company. The Permanent Lending Agreement is expected to replace the Short-term Agreement and provide up to $45 million for cash advances and guarantees of bank letters of credit and will be secured by all domestic receivables of the Company. The Company believes that the Short-term and Permanent Lending Agreements can be completed in sufficient time to allow the Company to meet all of its debt service and debt payment obligations on a timely basis. However, if such financing is not available or if it is significantly delayed, the Company may not be able to meet its debt and other obligations on a timely basis. If such event were to occur, the Company would be in a payment default which would give the holders of such obligations the right to accelerate their indebtedness which could result in a material adverse effect on the Company. As of April 15, 1993, the noncash collateralized letters of credit were $5.9 million, while accounts receivable remained substantially unchanged from the December 31, 1992 balance of $78.3 million.

Other Long-Term Obligations

A portion of the Clark purchase price was financed through a seller note in the amount of $6,090 due July 31, 1994. Interest accrues at prime rate and is due quarterly. The seller note is secured by certain property, plant and equipment.

TEL entered into a revolving credit facility with a group of banks in January, 1989. The facility is secured by a letter of credit from the Bank Lending Agreement and provides for up to approximately $4.6 million of multi-currency loans on a revolving basis. The interest rates vary depending on the currency. There were no amounts outstanding under the facility at December 31, 1992 and 1991.

Fruehauf Debt

As more fully described in Note D - "Investment in Fruehauf Trailer Corporation," the Company presently accounts for its 42% ownership interest in Fruehauf using the equity method, and the consolidated financial statements are presented giving effect to the deconsolidation of Fruehauf as of January 1, 1992. By the terms of debt agreements of both companies, neither company is obligated for, or may participate in, the debt service of the other. Fruehauf debt as described below is included in the consolidated balance sheet at December 31, 1991.

Fruehauf Secured Bank Credit Agreement

The Secured Bank Credit Agreement (the "Bank Credit Facility") constitutes Fruehauf's primary lending facility and is secured by substantially all of the assets of Fruehauf. The Bank Credit Facility provides both a term loan and a revolving credit facility. Amounts outstanding under the term loan were $70,128 at December 31, 1991. At December 31, 1991, the revolving credit facility was limited to the lesser of $45,000 or the available borrowing base, and the maximum cash advance availability was $20,000. The available borrowing base is calculated by applying prescribed advance ratios against eligible receivable and inventory balances, in accordance with the Bank Credit Facility. Outstanding cash advances totaled $15,000 at December 31, 1991. Outstanding letters of credit totaled $20,520 at December 31, 1991.

All proceeds from the sale of collateralized assets must be applied against the outstanding Bank Credit Facility indebtedness, including proceeds from the sale of most of the properties included in noncurrent Assets Held for Sale on the Consolidated Balance Sheet. As a result, Fruehauf cannot sell excess properties for the purpose of generating working capital.

A commitment fee of 1/2 of 1% per annum is payable on any unused portion of the revolving credit and letter of credit facility. Total unused credit under the revolving credit facility was $9,480 at December 31, 1991. The actual borrowing rate was 8.0% at December 31, 1991.

The Bank Credit Facility restricts the payment of dividends and requires, among other things, that Fruehauf maintain certain levels of tangible net worth and working capital, meet certain current and debt to equity ratios, and achieve certain levels of operating performance and interest coverage. While Fruehauf remained current in all of its payment obligations under the Bank Credit Facility, Fruehauf was not in compliance with certain financial covenants at December 31, 1991.

In September, 1990, Fruehauf entered into the Bank Credit Facility and refinanced the majority of its then outstanding long-term debt. A one-time extraordinary loss of $2,192, or ($.22) per share, was recorded to write-off the unamortized debt issuance costs relating to the refinanced debt. The income tax provision (benefit) on the extraordinary loss was zero. See Note B
- -- "Restatement of Prior Period Results".

Mortgage Note

The mortgage collateralized by an idle plant (the "Fresno Mortgage") was assumed in the Fruehauf acquisition. The Fresno Mortgage is collateralized by Fruehauf's Fresno, California manufacturing plant, which was closed in early 1992. The interest rate on the Fresno Mortgage is 9.625%, and combined principal and interest payments of $345 are payable semiannually until September, 2001. Fruehauf is actively attempting to sell the former Fresno manufacturing plant, and is required to extinguish the Fresno Mortgage with such proceeds.

Unsecured Promissory Note Held by a Related Party

In conjunction with the Fruehauf initial public offering and recapitalization in 1991, Fruehauf extinguished all of its then outstanding Series B Promissory Notes and all but $7,497 of the Series A Promissory Notes. The $7,497 of Series A Notes not extinguished were held by The Airlie Group L.P. and Trailer Partners (collectively "Airlie") and were exchanged for Fruehauf Notes totaling $7,497. The Fruehauf Notes initially bore interest at the rate of 12% per annum, and matured July 1, 1992. The Fruehauf Notes are subordinated to the Bank Credit Facility. Payment of the Fruehauf Notes can only be accelerated in the event that the indebtedness under the Bank Credit Agreement has been accelerated or extinguished.

Schedule of Debt Maturities

Scheduled annual maturities of long-term debt outstanding at December 31, 1992 in the successive five-year period are summarized below:

1993$                                             8,333
1994                                             14,518
1995                                              8,522
1996                                            167,417
1997                                              7,582
Thereafter                                          218

Total                                          $206,590

Amounts shown are exclusive of minimum lease payments disclosed in Note J -- "Lease Commitments".

The Company believes that the carrying value of its borrowings approximates fair market value. Such fair values were estimated by discounting future cash flows using rates currently available for debt of similar terms and remaining maturities.

The Company paid $15,602, $26,591, and $39,572 of interest in 1992, 1991 and 1990, respectively.

NOTE J -- LEASE COMMITMENTS

The Company leases certain facilities, machinery and equipment, and vehicles with varying terms. Under most leasing arrangements, the Company pays the property taxes, insurance, maintenance and expenses related to the leased property. Certain of the equipment leases are classified as capital leases and the related assets have been included in Property, Plant and Equipment in Note G -- "Property, Plant and Equipment". Net assets under capital leases were $6,777 and $5,229 at December 31, 1992 and 1991, respectively. Those assets are net of accumulated amortization of $2,721 and $2,353 at December 31, 1992 and 1991, respectively. Such amortization is included in Accumulated Depreciation in Note G -- "Property, Plant and Equipment".

Future minimum capital and noncancelable operating lease payments and the related present value of capital lease payments at December 31, 1992 are as follows:

                                                 Capital       Operating
                                                  Leases        Leases
1993                                              $3,854         $6,232
1994                                               2,759          4,056
1995                                               1,987          3,462
1996                                               1,402          2,744
1997                                               1,074          2,023
Thereafter                                           678          2,103

  Total minimum obligations                      $11,754        $20,620

Less amount representing interest                  2,312

  Present value of net minimum obligations         9,442
Less current portion                               3,210

  Long-term obligations                           $6,232

Noncash investing and financing activities include capital lease obligations of $2,150, $2,705, and $841 incurred in 1992, 1991, and 1990, respectively, when the Company entered into leases for new equipment.

Most of the Company's operating leases provide the Company with the option to renew the leases for varying periods after the initial lease terms. These renewal options enable the Company to renew the leases based upon the fair rental values at the date of expiration of the initial lease.

Total rental expense under operating leases was $6,601, $9,443, and $7,819 in 1992, 1991, and 1990, respectively.

The Company's Material Handling Segment also routinely enters into sale-leaseback arrangements with regards to certain equipment, which is later sold to third-party customers under sales-type lease agreements. The Company maintains a net investment in these leases, represented by the present value of payments due under the leases of $8,888 of which $2,263 is current at December 31, 1992. The net investment is included in Other Assets in the Consolidated Balance Sheet. The total lease payments related to the net investment is $10,294 at December 31, 1992.

In connection with the original sale-leaseback arrangements underlying the customer leasing program, the Company has an outstanding rental installment obligation. Consistent with the nature of the capital leases, the obligation reflects the present value of minimum payments due under the leases. The current portion of this obligation is included in Current Portion of Long-term Debt in the Consolidated Balance Sheet.

NOTE K -- INCOME TAXES

The components of Income (Loss) Before Income Taxes, Minority Interest and Extraordinary Loss are as follows:

                                                 Year ended December 31,
                                                 1992      1991      1990

United States                                $(59,921)$(34,874)   $11,633
Foreign                                          2,813  (3,766)   (1,027)

  Income (loss) before income taxes,
   minority interest and extraordinary loss  $(57,108)$(38,640)   $10,606

The major components of the Company's provision  for income taxes is summarized
below:

                                                 Year ended December 31,
                                                 1992      1991      1990

Current:
  Federal                                        $---      $---      $820
  State                                           ---       ---       573
  Foreign                                         167       868       865

      Current income tax provision                167       868     2,258

Deferred:
  Federal                                       (100)       ---       103
  State                                           ---       ---       ---
  Foreign                                         ---       ---       ---

      Deferred income tax provision  (benefit)  (100)       ---       103

Total provision for income taxes $67 $868 $2,361

The Company's Provision for Income Taxes is different from the amount which would be provided by applying the statutory federal income tax rate to the Company's Income (Loss) Before Income Taxes, Minority Interest and Extraordinary Loss. The reasons for the difference are summarized below:

                                                 Year ended December 31,
                                       1992           1991           1990
                                    %       $       %      $       %      $

Statutory federal income
 tax rate                       (34)%  $(19,417)(34)% $(13,138)   34%    $3,606
Future potential benefit from
 current NOL                       35     20,274   31    11,858   ---       ---
Federal alternative minimum tax   ---        ---  ---       ---     3       337
Foreign tax differential on
 income/losses of foreign
 subsidiaries                     (1)      (856)    4     1,432     1       145
Utilization of federal net
 operating loss carryforwards     ---        ---  ---       ---  (18)   (1,842)
State income tax net of
 federal benefit                  ---        ---  ---       ---     3       378

Other --- 66 1 716 (1) (263)

Provision for income taxes 0% $67 2% $868 22% $2,361

At December 31, 1992, the Company had domestic federal tax basis net operating loss and tax credit carryforwards of $151,003 and $369, respectively. Approximately $93,000 of the remaining net operating loss carryforwards and all of tax credit carryforwards are attributed to Terex prior to its 1986 acquisition by Northwest Engineering Company ("Northwest" - Now called Terex). These net operating loss and tax credit carryforwards have special limitations placed on them under the Internal Revenue Code. In accordance with SFAS No. 96, "Accounting for Income Taxes", the tax benefits of the unused net operating loss and tax credit carryforwards have not been recognized in the Consolidated Financial Statements, except by reducing deferred taxes, as the recognition of these benefits is dependent on future taxable income.

The tax basis net operating loss and tax credit carryforwards expire as follows:

                                              Tax Basis Net
                                              Operating Loss      Tax
                                              Carryforwards     Credits

1993                                                $---            $69
1994                                                 ---            140
1995                                              24,041             63
1996                                              45,231             29
1997                                               8,004             38
1998                                              11,908             17
1999                                                 ---             13
2000                                               4,581            ---
2006                                              20,689            ---
2007                                              36,549            ---

     Total                                      $151,003           $369

Additionally, the Company has an alternative minimum tax credit carryforward of $580 available to offset future regular income taxes.

The Company also has various state net operating loss and tax credit carryforwards expiring at various dates through 2007 available to reduce future state taxable income and income taxes, respectively. In addition, the Company's foreign subsidiaries have approximately $52,657 of tax basis loss carryforwards which may be available to offset future foreign taxable income, $4,735 expiring in the years 1993 through 1997, and the remainder generally remain available without expiration dates.

The Company made income tax payments of $66, $731 and $1,491 in 1992, 1991 and 1990, respectively.

NOTE L -- STOCKHOLDERS' INVESTMENT

Stock Options. The Company maintains a qualified stock option plan ("ISO") covering certain officers and key employees. The exercise price of the ISO stock option is the fair market value of the shares at the date of grant. The ISO allows the holder to purchase shares of common stock, commencing one year after grant. ISO options expire after ten years. At December 31, 1992, 52,312 of the 395,354 stock options were available for grant.

The following table is a summary of stock options:

                                                Number    Exercise Price
                                              of Options   per Option

Outstanding at December 31, 1989              199,500     $4.00 to 18.50
  Granted                                      18,000     20.50
  Exercised                                 (118,292)      4.00 to 16.25
  Canceled or expired                         (2,000)     12.75
  Five-for-four stock split adjustment         34,542     ---

Outstanding at December 31, 1990              131,750     $6.40 to 20.50
  Granted                                       6,000     10.00 to 12.75
  Exercised                                  (29,917)      6.40 to 10.60
  Canceled or expired                        (29,250)      6.40 to 20.50

Outstanding at December 31, 1991               78,583     $6.40 to 14.80
  Granted                                      20,000     13.25
  Exercised                                  (25,917)      6.40 to 14.80
  Canceled or expired                        (13,000)     10.20 to 14.80

Outstanding at December 31, 1992               59,666     $6.40 to 14.80

Exercisable at December 31, 1992               37,666     $6.40 to 14.80

Stock Appreciation Rights. In connection with the sale of the Senior Secured Notes and obtaining the consent of the holders of the Company's existing Subordinated Notes to modify the Subordinated Notes, the Company issued 658,409 common stock appreciation rights. As of December 31, 1992, there were 639,794 SAR's outstanding. The SAR's entitle the holder to receive the market appreciation in the Company's common stock between $11 per share, subject to adjustment, and the average price per share for the 30 consecutive trading days prior to the date of exercise. At December 31, 1992, there was no reserve requirement necessary as the Company's common stock price was below $11 per share.

Stock Split. In May 1990, the Company declared a five-for-four stock split in the form of a stock dividend. All option data subsequent to this date has been adjusted to properly reflect the split.

Dividends. No dividends were declared or paid in 1992. In 1991 and 1990, the Company declared and paid an annual dividend of six cents and five cents per share, respectively, on its outstanding common stock at each record date. As discussed in Note I -- "Long-Term Obligations", certain of the Company's debt agreements contain restrictions as to the payment of cash dividends. Under the most restrictive of these agreements, no retained earnings were available for dividends at December 31, 1992.

NOTE M -- RETIREMENT PLANS

The Company maintains numerous defined benefit pension plans covering most domestic employees. The benefits for the plans covering the salaried employees are based primarily on years of service and employees' qualifying compensation during the final years of employment. The benefits for the plans covering the hourly employees are based primarily on years of service and a flat dollar amount per year of service. It is the Company's policy to fund these plans based on the minimum requirements of the Employee Retirement Income Security Act of 1974 (ERISA). Plan assets consist primarily of common stocks, bonds, and short-term cash equivalent funds.

Pension expense includes the following components for 1992, 1991, and 1990:

                                               Year Ended December 31,
                                               1992      1991      1990

Service cost for benefits earned
 during period                                  $499    $1,399   $2,150
Interest cost on projected benefit
 obligation                                    2,378     7,377    7,009
Actual (return) loss on plan assets          (3,052)  (12,680)   14,827
Net amortization and deferral                  1,870     6,140 (22,966)
Curtailment loss                                  58        17      207

   Net pension expense                        $1,753    $2,253   $1,227

The following table sets forth the plans' funded status and the amounts recognized in the Company's financial statements at December 31:

                                         1992                1991
                                     Underfunded  Overfunded    Underfunded
                                        Plans       Plans          Plans

Actuarial present value of:
  Vested benefits                        $27,249      $69,587     $26,331

  Accumulated benefits                   $27,637      $70,705     $26,858

  Projected benefits                     $29,602      $70,705     $29,163
Fair value of plan assets                 19,929       73,744      13,919

Projected benefit obligation
 (in excess of) less than
 plan assets                             (9,673)        3,039    (15,244)
Unrecognized net loss from past
 experience different than assumed         6,328       11,756       7,963
Unrecognized prior service cost              920      (5,691)       1,121
Unrecognized transition (asset)            (324)          ---       (450)
Adjustment to recognize minimum
 liability                               (4,988)          ---     (9,354)

     Pension asset (liability)
      recognized in the balance sheet   $(7,737)       $9,104   $(15,964)

The expected long-term rate of return on plan assets was 9% for the periods presented. The discount rate assumption was 8.25% for 1992, 8.5% for 1991 and 9.0% in 1990. The assumption for the rate of compensation increase if applicable per plan provisions, was 5.5% for each year presented.

In accordance with the provisions of the SFAS No. 87, "Employers' Accounting for Pensions", the Company has recorded an adjustment to recognize a minimum pension liability of $4,988 and $9,354 at December 31, 1992 and 1991, respectively. This liability is offset by an intangible asset of $536 and $1,121 and a direct reduction of shareholders' equity of $4,452 and $8,233 at December 31, 1992 and 1991, respectively.

Clark's German employees are also covered by a defined benefit pension plan as required by German law. At December 31, 1992, the Company has accrued approximately $11.2 million related to the benefits earned by active and retired participants as of that date. The plan is unfunded. Pension expense relating to this plan was approximately $636 for the five months ended December 31, 1992.

In addition to providing pension benefits, the Company provides health care and life insurance benefits for certain former domestic employees who retired prior to December 31, 1990. The majority of the cost of retiree health care is charged against reserves previously established in purchase accounting for business combinations. Retiree health payments totaled $235, $3,919, and $3,439 for the years ended December 31, 1992, 1991, and 1990, respectively.

The Company sponsors various tax deferred savings plans into which eligible employees may elect to contribute a portion of their compensation. The Company contributes to certain of these plans.

NOTE N -- LITIGATION AND CONTINGENCIES

General

In October 1992, a Class Action complaint was filed against the Company and its Chairman, alleging, among other things, violation of certain provisions of the federal securities laws. This suit seeks unspecified compensatory and punitive damages and is pending in the United States District Court, District of Connecticut. This action is at a very early stage; however, the Company believes that the claims asserted are without merit and that it has valid defenses to the claims made. A motion to dismiss the action has been filed by the Company, and this motion is currently pending. The Company has not recorded any loss provision for this litigation.

In December 1992, a separate Class Action complaint was filed against Fruehauf, the Company and certain of Fruehauf's officers, directors and investment bankers, in the United States District Court, Eastern District of Michigan, Southern Division, alleging, among other things, violations of certain provisions of the federal securities laws, and seeking unspecified compensatory and punitive damages. This action is at a very early stage; however, Fruehauf and the Company believe that the claims asserted are without merit and that they have valid defenses to the claims made. Fruehauf and the Company have not recorded any loss provision for this litigation.

Terex has facilities at numerous geographic locations, which are subject to a range of federal, state and local environmental laws and regulations. Compliance with these laws has, and will, require expenditures on a continuing basis.

Fruehauf has been identified as a "Potentially Responsible Party" at approximately 19 multi-party Superfund sites, and has also identified environmental exposures at approximately 21 other sites not designated as superfund sites. The Company believes that it could have contingent responsibility for certain of Fruehauf's liabilities with respect to Fruehauf's environmental matters if Fruehauf fails to discharge its obligations, but only to the extent that such liabilities arose during the period during which Terex was the controlling stockholder of Fruehauf. The Company believes that Fruehauf's significant environmental liabilities predate Terex's acquisition of Fruehauf, and therefore any contingent responsibility is not expected to have a material adverse effect on the Company.

As disclosed in Note I -- "Long-Term Obligations", Terex's outstanding letters of credit totaled $38,923 at December 31, 1992. The letters of credit generally serve as collateral for certain liabilities included in the Consolidated Balance Sheet. Certain of the letters of credit serve as collateral guaranteeing the Company's performance under contracts.

In the Company's lines of business, but primarily in the Material Handling Segment, numerous suits have been filed alleging damages for injuries or deaths from accidents involving the Company's products that have arisen in the normal course of operations. As part of the acquisition of Clark, the Company and Clark assumed both the outstanding and future product liability exposures related to such operations. As of December 31, 1992, Clark had approximately 170 lawsuits outstanding alleging damages for injuries or deaths arising from accidents involving Clark products. Most of the foregoing suits are in various stages of pretrial completion, and certain plaintiffs are seeking punitive as well as compensatory damages. In the aggregate, these claims could be material to the Company. With respect to these product liability exposures, as well as for certain exposures related to general, workers compensation and automobile liability, the Company is self-insured up to certain limits. Insurance coverage is obtained for catastrophic losses as well as those risks required to be insured by law or contract. The Company has recorded and maintains an estimated liability, based in part upon actuarial determinations, for such uninsured risks and claims incurred, in the amount of management's estimate of the Company's aggregate exposure for self-insured risks.

The Company is involved in various other legal proceedings which have arisen in the normal course of its operations. The Company has recorded provisions for estimated losses in circumstances where a loss is probable and the amount or range of possible amounts of the loss is estimable.

The Internal Revenue Service is currently in various stages of examination of the Company's Federal tax returns. Liability, if any, resulting from the examinations cannot be determined at present. The Company believes it that its positions for issues raised in these audits are correct and that it would prevail if the taxing authorities were to propose adjustments. In any event, management believes that the outcome of these examinations will not have a material impact on the consolidated financial statements because the Company has significant net operating loss carryovers. No accruals have been made for any taxes which might result from these examinations.

The Company is contingently liable as a guarantor for certain customers' floor plan obligations with financial institutions. As a guarantor, the Company is obligated to purchase equipment which has been repossessed by the financial institution based upon the unamortized principal balance outstanding. The Company records the repossessed inventory at its estimated net realizable value. Any resultant losses are charged against related reserves. The related inventory is presented as a component of used equipment in Note F - Inventories. The guarantee under such floor plans aggregated $19.2 million at December 31, 1992. Adequate reserves, giving consideration to the collateral related to the contingent liabilities, have been recorded for potential losses arising from these guarantees. Losses, if any, under these arrangements are not expected to be significant.

Clark has also given guarantees arising out of the ordinary conduct of its business. These guarantees are to financial institutions and generally relate to capital loans, residual guarantees and other dealer and customer obligations, and approximated $44.9 million at December 31, 1992. Potential losses on such guarantees are accrued as a component of the Allowance for Doubtful Accounts.

To enhance its marketing effort and ensure continuity of its dealer network, Clark has also agreed as part of its dealer sales agreements to repurchase certain new and unused products and parts inventory and certain products used as dealer rental assets in the event of a dealer termination. Through this arrangement, Clark has been able to maintain dealer networks based on operational standards and marketing requirements. Repurchase agreements included in operating agreements with an independent financial institution have been patterned after those included in the dealer sales agreements. Dealer inventory and rental asset financing of approximately $253.9 million at December 31, 1992 are covered by those operating agreements. It is not practicable to determine the additional amount subject to repurchase solely under the dealer sales agreements. Under these agreements, when dealer terminations do occur, a newly selected dealer generally assumes the assets of the prior dealer and any related financial obligations. Historically, Clark has incurred only immaterial losses relating to these arrangements. For the five months ended December 31, 1992, one dealer was terminated and the related losses were negligible.

Terex has agreed to indemnify certain outside parties for losses related to Fruehauf's worker compensation obligations. Some of the claims for which Terex is contingently obligated are also covered by bonds issued by an insurance company. Management is unable to estimate the amount or timing of losses, if any, which might arise from claims for which Terex might be contingently liable, and, accordingly, is unable to conclude that the amount would not be material to the Company. As of December 31, 1992, in accordance with Accounting Principles Board Opinion 18, Terex has recognized liabilities for these contingent obligations in the aggregate amount of $3.0 million, representing management's estimate of the maximum potential losses which the Company might incur.

NOTE O -- RELATED PARTY TRANSACTIONS

KCS

The Company's Chairman and President is the controlling shareholder of KCS Industries, Inc. ("KCS"), a corporation which provides legal, financial and management services to the Company and Fruehauf under management contracts. Pursuant to certain restrictions in Fruehauf's Bank Credit Facility, Fruehauf was prohibited from paying management fees to KCS in excess of $2,300 in 1992 and is prohibited from making any payments in 1993 until all indebtedness under the Bank Credit Facility is repaid. Payments to KCS by Terex and Fruehauf for services rendered and for out-of-pocket expenses amounted to $5,148 in 1992 and $5,831 in 1991, and $5,319 in 1990.

In addition to the 42% of the outstanding common stock of Fruehauf owned by the Company, KCS and its shareholders own approximately 21.5% of Fruehauf's outstanding common stock.

In conjunction with the Fruehauf acquisition, KCS purchased $7,500 of the Series A Notes and $4,500 of the Series B Notes. During 1991, as part of the recapitalization of Fruehauf in connection with its IPO, the warrants acquired by KCS with the Series A Notes were exercised for Fruehauf common stock and the Series B Notes were exchanged for Fruehauf common stock. At December 31, 1991, Fruehauf no longer had debt payable to KCS. Interest and other expenses on debt issued to KCS aggregated $1,651 and $2,746 in 1991 and 1990, respectively.

On January 25, 1993, Terex entered into an agreement whereby KCS borrowed $1.7 from Terex ("the KCS/Terex Note"). The KCS/Terex Note bore interest at prime. The loan represented by the KCS/Terex Note may have constituted a default under the Senior Secured Notes, the Subordinated Notes and the Bank Lending Agreement. The entire balance was repaid to Terex on February 1, 1993, six days after the initial borrowing, thereby curing any default which may have occurred.

Fruehauf Trailer Corporation

Three members of the Company's Board of Directors also serve as directors for Fruehauf Trailer Corporation.

Fruehauf has filed a consent solicitation with the Securities and Exchange Commission to authorize the issuance of up to 2,500,000 shares of preferred stock. A portion of these shares would be issued to the Company in exchange for $11,587 of the long-term payable to the Company. The proposed transaction would require ratification by the Fruehauf's stockholders prior to completion. The consent solicitation was pending at December 31, 1992. The completion of this transaction is uncertain.

The Company's Board of Directors approved a program to consolidate Fruehauf's parts warehousing and administration functions with the Company. During the fourth quarter of 1992, Fruehauf announced its intention to close its parts warehouse in Westerville, Ohio and transfer its replacement parts inventory to the Terex distribution center near Memphis, Tennessee. Under the proposed arrangement, Terex will perform purchasing and warehousing functions for Fruehauf in exchange for monthly parts warehousing fees. This relocation has not yet been implemented and is dependent upon the eventual outcome of the Fruehauf restructuring plan. In November 1992, in contemplation of this agreement, Terex transferred $2,000 to Fruehauf. The $2,000 transfer constituted a default ("November Default") under the Senior Secured Notes, the Subordinated Notes and the Bank Lending Agreement. Subsequently in May 1993, Terex entered into an agreement with Delphos Axle Corporation ("Delphos"), an operating unit of Fruehauf, whereby Delphos will provide products and manufacturing services to Terex. The agreement with Delphos required Terex to make a $2,000 payment to Delphos, which Terex effected on May 11, 1993 by instructing Fruehauf to transfer the $2,000 Fruehauf owed to Terex directly to Delphos. This transfer also satisfied Fruehauf's $2,000 obligation to Terex so that the events which gave rise to the November Default no longer exist.

In August, 1992, Clark purchased certain assets of a subsidiary of Fruehauf for $790. This constituted a default under the Senior Secured Notes, the Subordinated Notes and the Bank Lending Agreement because the purchase did not have prior approval of the independent members of the Company's Board of Directors. The approval was subsequently obtained; therefore, the events which gave rise to such default no longer exist.

Terex Corporation Master Retirement Plan Trust

In conjunction with the financing of the Clark Acquisition and the refinancing of certain of the existing debt, $4,000 of the Senior Secured Notes were issued to the Trust. The Trust later purchased an additional $2,002 of the Senior Secured Notes. At December 31, 1992, debt payable to the Trust was $6,002. Interest on debt issued to the Trust aggregated $232 in 1992.

Other

A director of the Company is affiliated with Airlie, and one director was formerly affiliated with Airlie, a limited partnership which owns approximately 9% of the Company's common stock. An additional 3.6% of the Company's Common Stock is owned by individuals related to Airlie. In addition, Airlie owned approximately 3.3% of Fruehauf's outstanding common stock. In conjunction with the Fruehauf Acquisition, $7,497 of the Series A Notes and $4,500 of the Series B Notes were issued to Airlie. During 1991, as a part of the Fruehauf recapitalization, the Series A Notes were exchanged for the Fruehauf Notes bearing an interest rate of 12% and the Series B Notes were exchanged for Fruehauf common stock (see Note I -- "Long-Term Obligations"). Debt payable to Airlie of $7,497 is included in the Consolidated balance sheet at December 31, 1991. Interest and other expenses on debt issued to Airlie of $2,092 and $2,749 in 1991 and 1990, respectively, is included in the Consolidated Statement of Income. Assuming Airlie exercised the Fruehauf Warrant it received with the Fruehauf Notes in the Recapitalization, it would own approximately 18.2% of Fruehauf's common stock.

Fruehauf owns a manufacturing facility in Germany that it leases to SESR pursuant to a lease agreement assumed in the Fruehauf acquisition. The carrying value of this asset was $18,955 at December 31, 1991. The facility is reported as a component of Other Assets in the December 31, 1991 Consolidated Balance Sheet. Fruehauf received rental revenue of $657 and $665 from SESR in 1991 and 1990, respectively. Rental revenue is recorded as other income in the Consolidated Statement of Income and is reduced by depreciation expense on the facility. SESR is responsible for paying the property taxes, insurance, maintenance and expenses related to the leased property.

NOTE P -- BUSINESS SEGMENT INFORMATION

The Company's operations are structured into two industry segments, heavy equipment and material handling. Prior to 1992, the Company's operations were structured into two industry segments; trailer and heavy equipment. The Material Handling Segment principally represents the operations of Clark which was acquired during 1992 (see "Note C -- Acquisitions").

The Company's Heavy Equipment Segment includes operations engaged in the design, manufacture and marketing of heavy-duty, off-highway earthmoving and lifting equipment. Products include haulers, scrapers, loaders, crawlers, cranes, excavators, draglines and aerial lifts. The Heavy Equipment Segment also manufactures and markets a wide range of accessories and replacement parts for its products. The principal markets served by the Heavy Equipment Segment include the construction, mining, and industrial markets.

The Company's Material Handling Segment is engaged in the design, manufacture and marketing of internal combustion and electric forklifts and related parts and equipment. The principal markets served by the Material Handling Segment include distribution and manufacturing operations and the food, canning and bottling industry.

Through its former consolidated subsidiary, Fruehauf, the Company was also engaged in the design, manufacture and marketing of truck trailers, including vans, refrigerated vans, dump trailers, platform trailers, liquid and bulk tanks, and components (the "Trailer Segment") from 1989 through 1991. In addition, the Trailer Segment sold used trailers, some of which had been accepted as trade-ins in connection with the sale of its new trailers. The Trailer Segment also performed service work on trailers and markets trailer parts and equipment. The principal markets served by the Trailer Segment were the trucking and transport industries. As explained in Note D -- "Investment in Fruehauf Trailer Corporation," the Company accounts for Fruehauf using the equity method as of January 1, 1992.

Industry segment information is presented below:

                                            1992         1991        1990

Sales
   Material Handling                     $240,940        $---         $---
   Trailer                                    ---     512,689      589,441
   Heavy Equipment                        282,415     271,505      433,737

     Total                               $523,355    $784,194   $1,023,178

Income (Loss) From Operations
   Material Handling                       $2,177        $---         $---
   Trailer                                    ---    (23,153)       19,274
   Heavy Equipment                        (5,929)    (11,279)       23,287
   General/Corporate                        (373)     (1,768)        1,825

     Total                               $(4,125)   $(36,200)      $44,386

Depreciation and Amortization
   Material Handling                       $4,042        $---         $---
   Trailer                                    ---       8,449       15,037
   Heavy Equipment                          5,610       3,575        4,628
   General/Corporate                           41       1,444        1,404

     Total                                 $9,693     $13,468      $21,069

Capital Expenditures
   Material Handling                       $3,129        $---         $---
   Trailer                                    ---       2,510        3,565
   Heavy Equipment                          2,238       1,554        5,130
   General/Corporate                           15          34           12

     Total                                 $5,382      $4,098       $8,707

Identifiable Assets
   Material Handling                     $247,813        $---         $---
   Trailer                                    ---     359,928      458,001
   Heavy Equipment                        229,042     256,071      286,384
   General/Corporate                          501       1,204          680

     Total                               $477,356    $617,203     $745,065

Geographical segment information is presented below:

                                            1992         1991         1990

Sales
   North America                         $369,394    $708,854     $906,981
   Europe                                 149,970      84,680      143,980
   All other                               30,780      23,070          29,011
   Eliminations                          (26,789)    (32,410)     (56,794)

     Total                               $523,355    $784,194   $1,023,178

Income (Loss) From Operations
   North America                        $(11,968)   $(35,456)      $40,595
   Europe                                   5,453     (2,131)        4,365
   All other                                1,351         392          284
   Eliminations                             1,039         995        (858)

     Total                               $(4,125)   $(36,200)      $44,386

Identifiable Assets
   North America                         $363,252    $556,165     $674,591
   Europe                                 122,877     105,090      112,808
   All other                                8,664       2,226        4,659
   Eliminations                          (17,437)    (46,278)     (46,993)

     Total                               $477,356    $617,203     $745,065

Intersegment sales were immaterial in all years presented. Sales between geographic areas are generally priced to recover costs plus a reasonable markup for profit. Operating income equals net sales less direct and allocated operating expenses, excluding interest and other nonoperating items. Corporate assets are principally cash, marketable securities and administration facilities.

The majority of the Material Handling Segment operations market their product through independent distributors. The majority of the Heavy Equipment Segment operations market their products through independent distributors, while certain other operations market their products directly to the end user. Trailers and related service, parts and accessories were marketed through Fruehauf's sales and service branches, as well as through an existing nationwide dealership network which consists of over 200 independent businesses which generally serve the trucking and transport industries.

The Company is not dependent upon any single customer. No single customer accounted for more than 10% of 1992, 1991 or 1990 consolidated net sales.

Export sales from U.S. operations were $92,347, $83,324 and $117,320 in 1992, 1991 and 1990, respectively.

NOTE Q - LIQUIDITY AND REFINANCING PLANS

As a result of significant operating losses which have continued through the first quarter of 1993, and cash flow difficulties, the Company has taken significant actions to reduce its overall cost structure and improve liquidity.

The Company intends to augment its top management during 1993, with the addition of a new Chief Executive Officer and a Chief Financial Officer. In addition, the Company has announced that it is formulating a plan to integrate the management services of KCS into the Company. These changes will allow the Company to deal more efficiently with its increased complexity and globalization due to the July, 1992 acquisition of Clark.

The Company was not in compliance with certain financial covenants in the Bank Lending Agreement at December 31, 1992. Terex has since received waivers for the noncompliance and the financial covenants in the Bank Lending Agreement have been revised. The revised lending agreement allows no cash borrowing availability and states that beginning April 21, 1993, the Company must commence increasing the amount of the cash collateral at specified increments such that by June 30, 1993 all letters of credit are cash collateralized. The Company is attempting to secure alternative financing which would provide adequate liquidity and working capital for the Company's future needs. The Company has received preliminary credit approval from a financial institution to provide short-term financing by about May 21, 1993, and a permanent financing facility shortly thereafter. The Short-term Agreement only provides cash advances of $15 million and will be secured by all domestic receivables of the Company. The Permanent Lending Agreement is expected to replace the Short-term Agreement and provide up to $45 million for cash advances and guarantees of bank letters of credit and will be secured by all domestic receivables of the Company. The Company believes that the Short-term and Permanent Lending Agreements can be completed in sufficient time to allow the Company to meet all of its debt service and debt payment obligations on a timely basis. However, if such financing is not available or if it is significantly delayed, the Company may not be able to meet its debt and other obligations on a timely basis. If such event were to occur, the Company would be in a payment default which would give the holders of such obligations the right to accelerate their indebtedness which could result in a material adverse effect on the Company. As of April 15, 1993, the noncash collateralized letters of credit were $5.9 million, while accounts receivable remained substantially unchanged from the December 31, 1992 balance of $78.3 million.

The Company believes that, based on management's current estimates, it will be in compliance with its covenants with respect to its Senior Secured Notes and Subordinated Notes throughout 1993. However, certain future events could affect the Company's continuing compliance with such covenants. In particular, in computing tangible net worth under the covenants of the Senior Secured Notes and the Subordinated Notes, the Company is allowed to maintain a defined value for its investment in Fruehauf. At December 31, 1992, the defined value approximated $51.0 million. At December 31, 1992, the market value of the Company's investment in Fruehauf was $24.4 million. As discussed in Note D - "Investment in Fruehauf Trailer Corporation" to the Consolidated Financial Statements, the Company is evaluating alternatives relating to its investment in Fruehauf, including selling Terex's shares of Fruehauf common stock. If, as a result of any transactions affecting its investment in Fruehauf, or any other reason, the Company is not in compliance with certain of its covenants, the Company may be required to offer to repurchase 20% of the outstanding notes. If such offer were to be made, it is likely that the Company would require additional funding to complete the offer, and if such funding were unavailable to it, the Company would be unable to comply with the terms of the notes and the notes may be accelerated. Such circumstances could result in a material adverse impact on the Company and its financial position.

In addition to its refinancing efforts, the Company is generating cash through the sale of excess inventory in the Heavy Equipment and Material Handling Segments, eliminating nonessential capital expenditures, and continuing corporate wide cost containment efforts. Also, during 1992, the Heavy Equipment Segment significantly reduced its engineering, selling and administrative expenses through headcount reductions and consolidation of certain administrative functions.


TEREX CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)

                                             For the Nine Months
                                             Ended September 30,
                                             1993         1992

Net Sales                                 $519,510     $313,254

Cost of goods sold                         475,251      284,255

  Gross profit                              44,259       28,999

Engineering, selling and administrative expenses:
  Third parties                             60,313       35,661
  Related parties                            2,314        1,973

  Total engineering, selling and
   administrative expenses                  62,627       37,634

  Loss from operations                    (18,368)      (8,635)

Other income (expense):
  Interest income                              945        1,973
  Interest expense                        (23,849)     (15,575)
  Equity in net loss of  Fruehauf (Note F)   (677)     (14,631)
  Other income (expense)                     (950)      (1,741)

  Loss before income taxes and
   extraordinary item                     (42,899)     (38,609)

Provision for income taxes                     193            2

  Loss before extraordinary item         $(43,092)    $(38,611)
  Exraordinary item - loss on
   extinguishment of debt (Note E)         (2,003)          ---

Net loss                                 $(45,095)    $(38,611)

Net loss per share:
  Loss before extraordinary item          $ (4.33)      $(3.88)
  Extraordinary item                         (.20)       ---

  Net loss                                 $(4.53)      $(3.88)

Dividends per share                       $ ---        $ ---

Weighted average common shares outstanding including dilutive options and warrants (see Exhibit 11.1) 9,952 9,944 @Body Single@

The accompanying notes are an integral part of these financial statements.

TEREX CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)

September 30,
1993

ASSETS

Current assets
  Cash and cash equivalents                      $ 8,887
  Restricted cash                                  4,633
  Net receivables                                 78,645
  Net inventories                                168,446
  Other current assets                             6,978

          Total current assets                   267,589

Property, plant and equipment
  Property, plant and equipment                  137,765
  Less - accumulated depreciation                 36,222

          Net property, plant and equipment      101,543

Investments in affiliate companies                 3,343

Other assets                                      30,101

Total assets                                   $ 402,576

The accompanying notes are an integral part of these financial statements.

TEREX CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (Continued)
(in thousands)

September 30,
1993

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities
  Notes payable                                  $ 2,476
  Trade accounts payable                          83,323
  Accrued compensation and benefits               10,937
  Accrued warranties and product liability        28,288
  Accrued interest                                 4,811
  Accrued income taxes                             1,582
  Restructuring reserve                           14,097
  Other current liabilities                       24,234
  Current portion of long-term debt               17,791

          Total current liabilities              187,539

Long-term debt less current portion              208,848
Accrued warranties and product liability
 - long-term                                      39,850
Accrued pension                                   16,984
Postretirement health benefits (Note B)              428
Other long-term liabilities                        6,795

Stockholders' investment
  Common stock, $.01 par value
   - authorized 20,000 shares;
   issued and outstanding 9,953 shares               100
  Additional paid-in capital                      37,808
  Accumulated deficit                           (81,326)
  Pension liability adjustment                   (4,452)
  Foreign currency translation adjustment        (9,998)

          Total stockholders' investment        (57,868)

Total liabilities and stockholders' investment $ 402,576

The accompanying notes are an integral part of these financial statements.

TEREX CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)

                                               For the Nine Months
                                               Ended September 30,
                                               1993        1992
OPERATING ACTIVITIES
  Net loss                                  $(45,095)   $(38,611)
  Adjustments to reconcile net loss to
     cash flows from operating activities:
     Depreciation                              11,615       3,102
     Amortization                               5,979       2,939
     (Gain) loss on sale of property,
      plant and equipment                     (2,029)        (36)
     Unremitted (earnings) loss from
      equity affiliates (Fruehauf)                677      14,631
     Other                                      (221)       1,693
     Changes in operating assets and liabilities:
      Restricted cash                           6,846         ---
      Net receivables                           (782)      18,270
      Net inventories                          28,223      29,834
      Trade accounts payable                  (8,340)         885
      Accrued compensation and benefits         (229)       1,785
      Accrued warranties and product liability(3,835)       3,393
      Accrued interest                        (7,008)       1,342
      Accrued income taxes                      (441)         333
     Restructuring reserve                   (16,503)     (2,500)
      Other                                     3,135    (14,529)

     Net cash from (used in)
      operating activities                   (28,008)      22,531

INVESTING ACTIVITIES
  Acquisition of Business                         ---    (80,454)
  Capital expenditures, net of dispositions   (8,529)     (2,513)
  Advances to Fruehauf                          (622)     (2,802)
  Proceeds from sale of property,
   plant and equipment                         10,377         ---
  Other                                         (337)       (352)

     Net cash from (used in) investing
      activities                                  889    (86,121)

FINANCING ACTIVITIES
  Net borrowings (repayments) under
   revolving line of credit agreements            674    (62,161)
  Proceeds from long-term debt                 18,650     158,800
  Principal repayments of long-term debt      (8,175)    (10,333)
  Other                                         (443)     (4,427)

     Net cash from (used in)
      financing activities                     10,706      81,879

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
  CASH EQUIVALENTS                              (371)         503

NET (DECREASE) INCREASE IN
 CASH AND CASH EQUIVALENTS                   (16,784)      18,792

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                           25,671      10,892

CASH AND CASH EQUIVALENTS AT END OF PERIOD    $ 8,887     $29,684

The accompanying notes are an integral part of these financial statements.

TEREX CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, unless otherwise denoted)

September 30, 1993

NOTE A - BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Terex Corporation and Subsidiaries (the "Company") as of September 30, 1993 and for the nine month periods ended September 30, 1993 and 1992 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual reporting.

The condensed consolidated financial statements include the accounts of Terex Corporation and its majority controlled subsidiaries. All intercompany balances, transactions and profits have been eliminated. The equity method is used to account for investments in affiliates in which the Company has an ownership interest between 20% and 50%, including Fruehauf Trailer Corporation ("Fruehauf"). The cost method is used to account for investments in affiliates in which the Company has an ownership interest of less than 20%.

In the opinion of management, all adjustments considered necessary for a fair presentation have been made. Such adjustments consist only of those of a normal recurring nature, except for the impact of the accounting changes discussed in Note B -- "Accounting Changes". Operating results for the nine months ended September 30, 1993 are not necessarily indicative of the results that may be expected for the year ended December 31, 1993. For further information, refer to the consolidated financial statements for the year ended December 31, 1992.

NOTE B - ACCOUNTING CHANGES

Employers' Accounting for Postretirement Benefits Other than Pensions

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions" on January 1, 1993. This statement requires accrual of postretirement benefits (such as health care benefits) during the years an employee provides service. The Company provides postretirement benefits to certain former salaried and hourly employees and certain hourly employees covered by bargaining unit contracts that provide such benefits.

Terex adopted the provisions of SFAS No. 106 using the delayed recognition method, whereby the amount of the unrecognized transition obligation at January 1, 1993 is recognized prospectively as a component of future years' net periodic postretirement benefit expense. The unrecognized transition obligation at January 1, 1993 was approximately $4,476. Terex is amortizing this transition obligation over 12 years, the average remaining life expectancy of the participants.

Currently, the Company's postretirement benefit obligations are not funded. The liability of the Company, as of January 1, 1993, was as follows:

Actuarial present value of accumulated

 postretirement benefit obligation:
             Retirees                   $   4,476
             Active participants              ---
 Total accumulated postretirement
   benefit obligation                       4,476
Unamortized transition obligation         (4,476)
 Liability recognized in the balance sheet    -0-
Less:  Current portion                        -0-
 Accumulated postretirement
  benefit obligation - long term             $-0-

Health care trend rates used in the actuarial assumptions range from 12.3% to 13.5%. These rates decrease to 6.75% over a period of 9 to 11 years. The effect of a one percentage-point change in the health care cost trend rates would change the accumulated postretirement benefit obligation approximately 5%. The discount rate used in determining the accumulated postretirement benefit obligation is 8.25%.

Net periodic postretirement benefit expense for the nine month period ended September 30, 1993 includes the following components:

Service cost                                  $ 0
Interest cost
277
Net amortization                              280
                                            $ 557

The difference between Terex's net periodic postretirement benefit expense on a cash basis versus accrual basis was approximately $387 for the nine months ended September 30, 1993.

Accounting for Income Taxes

The Company adopted SFAS No. 109, "Accounting for Income Taxes" on January 1, 1993. The new pronouncement retains the basic concepts of SFAS No. 96, but generally simplifies its application. The adoption of this new pronouncement did not have a material impact on the Company's operating results and financial position.

Deferred tax assets and liabilities result from differences in the basis of assets and liabilities for tax and financial statement purposes. The tax effects of the basis differences and net operating loss carryforwards on January 1, 1993 are summarized below for major balance sheet captions:

Net inventories                          $(1,623)
Fixed assets and assets held for sale    (23,635)
Other assets and deferred charges             664
Other current and long-term liabilities    44,497
All other items                             (173)
Benefit of net operating
 loss carryforward                         76,200
Valuation allowance                      (93,930)
   Total deferred tax liability             $   0

At December 31, 1992, the Company had domestic federal tax basis net operating loss carryforwards of approximately $151,000 and foreign net operating loss carryforwards of approximately $ 52,000. Certain of the domestic net operating loss carryforwards have limitations placed on them under the Internal Revenue Code. The Internal Revenue Service is currently in various stages of examination of the Company's federal tax returns. The results of such audits could change the availability of the net operating loss carryforwards.

In accordance with SFAS No. 109, "Accounting for Income Taxes", the tax benefits of the unused net operating loss carryforwards have been recognized in the Consolidated Financial Statements. As further required by SFAS No. 109, the Company has recorded a valuation allowance for deferred tax assets including the benefits of net operating loss carryforwards because their realization is dependent on future taxable income.

NOTE C - ACQUISITIONS

On July 31, 1992, the Company completed the acquisition of the common stock of Clark Material Handling Company and certain affiliate companies ("Clark") from Clark Equipment Company (the "Clark Acquisition"). Clark is engaged in the design, manufacture and marketing of internal combustion and electric lift trucks and related parts and equipment.

The operating results of this acquisition are included in the Company's consolidated results of operations since August 1, 1992. The following unaudited pro forma summary presents the consolidated results of operations for the nine months ended September 30, 1992 as though the Company completed the Clark Acquisition on January 1, 1992, after giving effect to certain adjustments, including amortization of goodwill and intangible assets, increased depreciation resulting from the revaluation of property, plant and equipment, interest expense and amortization of debt issuance costs on the acquisition debt, and reduced operating costs related to recurring cost savings which are directly attributable to the Clark Acquisition.

                            Pro Forma
                       For the Nine Months
                     Ended September 30, 1992

Net sales                     $ 601,758
Loss from operations           (18,962)
Net loss                       (57,949)
Net loss per share             $ (5.83)

The unaudited pro forma consolidated results do not represent actual operating results. The pro forma amounts were prepared by management and should not be interpreted as predictive of the Company's future results of operations. The Company is actively reorganizing the operations of Clark by consolidating manufacturing and distribution operations. Consequently, management does not view the combination of the historical financial results of the Company and Clark as a meaningful representation of the Company's future operations.

NOTE D - INVENTORIES

The components of net inventories consist of the following at September 30, 1993:

New equipment                        $ 36,580
Used equipment                          1,552
Work-in-process and finished parts     86,634
Raw materials and supplies             47,498

Gross inventories                     172,264
Less: Excess of FIFO costs
  over LIFO inventory value           (3,818)

Net inventories                     $ 168,446

NOTE E - LONG TERM DEBT

Covenant Compliance

The indentures governing the Company's Senior Secured Notes and Subordinated Notes (together, the "Notes") require, among other things, that the Company maintain certain levels of tangible net worth and collateral coverage. As of September 30, 1993, the Company's tangible net worth as defined in the Note indentures was less than the $15 million minimum required by the indentures. Based on management's current estimates, the Company is expected to continue to experience losses from operations subsequent to September 30, 1993. As a result, absent a capital infusion, the Company's tangible net worth will be less than required under the tangible net worth covenants as of December 31, 1993. In the event the Company's tangible net worth is not in excess of the amount required under the tangible net worth covenants for two consecutive quarters, the Company must offer to repurchase, at par plus accrued interest, 20% of the outstanding principal amount of the Notes. If such an offer were to be made, it is likely that the Company would require additional funding to complete the offer, and if such funding were unavailable to it, the Company would be unable to comply with the terms of the Notes and the Notes may be accelerated. Such circumstances could result in a material adverse impact on the Company and its financial position. In an effort to raise additional capital and increase the Company's net worth, the Company is currently seeking to effect the sale of preferred stock in a private placement. Management is also considering other actions, including the sale of assets such as a portion of the Company's stock holdings and investments, which, at any time, may be necessary for the Company to remain in compliance with the tangible net worth and collateral coverage covenants.

Permanent Facility

On May 20, 1993, Terex entered into an agreement with a financial institution which initially provided short-term financing ("Interim Facility"), and currently provides permanent financing ("Permanent Facility") (together the "Lending Facilities"). The Interim Facility provided for cash advances to the Company of up to $17.5 million. The Permanent Facility became effective and replaced the Interim Facility as of August 24, 1993 and provides for up to $20 million of cash advances and guarantees of bank letters of credit and is secured by all domestic receivables of the Material Handling and Heavy Equipment Segments.

Borrowings under the permanent facility mature in two years from the August 24, 1993 effective date. Accordingly, all such borrowings, including former short term interim facility borrowings outstanding at the effective date, are classified as Long Term Debt in the accompanying Balance Sheet.

Extraordinary Item

In connection with entering into the Lending Facilities, the Company terminated its previous bank lending agreement with a commercial bank. The Company recognized, as an extraordinary item, a charge of approximately $2.0 million in the second quarter of 1993 to write off unamortized debt issuance costs.

NOTE F - INVESTMENT IN FRUEHAUF

Following an initial public offering of 4,000,000 shares of Fruehauf common stock in July 1991, the Company owned approximately 42% of the outstanding common stock of Fruehauf. The Company presently accounts for its investment in Fruehauf using the equity method. On August 20, 1993, Fruehauf entered into agreements with its existing lenders, a new lender and a number of investors which resulted in a restructuring of existing debt, and provided for a new $25 million credit facility and $20.5 million of new equity (the "Fruehauf Restructuring"). The $25 million of new credit is in the form of an inventory and receivables revolving credit facility provided by Congress Financial Corporation. The $20.5 million of new equity arose from the private placement of approximately 7,841,000 shares of Fruehauf common stock at $1.50 per share and approximately $8,783,000 of convertible subordinated debt. The convertible subordinated debt will be converted into approximately 5,855,000 additional shares of Fruehauf common stock as soon as Fruehauf's Certificate of Incorporation is amended to increase the number of shares authorized following appropriate Fruehauf stockholder approval and approval of such shares for listing on the New York Stock Exchange. As part of the restructuring, Terex agreed with Fruehauf to accept approximately 2,251,000 shares of Fruehauf common stock in satisfaction of approximately $13.5 million of indebtedness of Fruehauf owed to Terex. As a result of the restructuring and financing transactions, Terex's ownership of Fruehauf decreased to approximately 26%.

Because Fruehauf has experienced significant losses since 1991 and continues to have a stockholders' deficit after the new equity investment, Terex's carrying value for its investment in Fruehauf has been reduced to zero. Terex has also recognized a contingent obligation of approximately $3 million with respect to guaranties by Terex of certain obligations of Fruehauf. Until such time as Fruehauf returns to profitability and achieves a positive net worth, the Company does not expect to recognize any additional losses or income with respect to its investment in Fruehauf.

Summarized income statement information of Fruehauf for the first nine months of 1993 and 1992 is as follows:

                                       1993       1992

Net sales                        $196,994      $ 388,552
Gross profit                       10,498         38,196
Net loss                          (93,104)      (34,635)

Restatement of financial statements for the period ended September 30, 1993

As described above, after an initial public offering of Fruehauf common stock in July 1991 the Company owned approximately 42% of the outstanding common stock of Fruehauf. Due to additional control factors, including shares owned by certain officers of Terex, the presence of three Terex directors on Fruehauf's board, the service of two Terex executive officers as executive officers of Fruehauf, and the existence of a voting trust among Terex and certain individuals, the Company concluded it had a controlling financial interest in Fruehauf until the closing of the Fruehauf Restructuring. Accordingly, in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993 as originally filed, Fruehauf's results were included in the Company's consolidated financial statements on a consolidated basis for the periods ended September 30, 1992 and deconsolidated as of January 1, 1993.

After consultation with the Securities and Exchange Commission staff, management subsequently decided that despite the control factors described above, assurance of strict numerical voting control of Fruehauf by Terex was eliminated as a result of the termination of the voting trust between Terex and certain individuals in July 1992 and, therefore, Terex should not consolidate Fruehauf in its 1992 financial statements. Accordingly, management has restated the financial statements for the periods ended September 30, 1993 and 1992 to account for the Company's investment in Fruehauf on the equity method effective January 1, 1992.

The following table sets forth selected information as originally reported and as restated for the nine months ended September 30, 1993 and 1992:

                                   Nine Months Ended    Nine Months Ended
                                   September 30, 1993September 30, 1992
Net Sales
   As Originally Reported                $519,510       $701,806
   As Restated                            519,510        313,254

Net Income (Loss)
   As Originally Reported                (44,797)       (38,611)
   As Restated                           (45,095)       (38,611)

Net Income (Loss) Per Share
   As Originally Reported                (4.50)          (3.88)
   As Restated                           (4.53)          (3.88)

Average Number of Common and
    Common Equivalent Shares Outstanding    9,952          9,944

NOTE G - CONTINGENCIES AND UNCERTAINTIES

The Company is subject to a number of contingencies and uncertainties including product liability claims, self-insurance obligations, tax examinations and guarantees. Many of the exposures are unasserted or proceedings are at a preliminary stage, and it is not presently possible to estimate the amount or timing of any cost to the Company. However, management does not believe that these contingencies and uncertainties will, in the aggregate, have a material effect on the Company. When it is probable that a loss has been incurred and possible to make reasonable estimates of the Company's liability with respect to such matters, a provision is recorded for the amount of such estimate or for the minimum amount of a range of estimates when it is not possible to estimate the amount within the range that is most likely to occur.

Fruehauf has identified environmental exposures at a number of Superfund and other sites, and is currently participating in administrative or court proceedings involving a number of these sites. Many of the proceedings are at a preliminary stage, and the total cost of remediation, the timing and extent of remedial actions which may be required, and the amount of Fruehauf's liability, if any, with respect to these sites cannot presently be estimated. The Company believes that it could have contingent responsibility for certain of Fruehauf's liabilities with respect to Fruehauf's environmental matters if Fruehauf fails to discharge its obligations, but only to the extent that such liabilities arose during the time period during which Terex was the controlling stockholder of Fruehauf. The Company believes that Fruehauf's significant environmental liabilities predate Terex's acquisition of Fruehauf, and therefore any contingent responsibility of the Company is not expected to have a material adverse effect on the Company.


BUSINESS ACQUIRED FROM CLARK
EQUIPMENT COMPANY BY TEREX CORPORATION

COMBINED STATEMENT OF OPERATING
REVENUES AND EXPENSES

(amounts in thousands)

                                                 Year Ended December 31,
                                                   1991           1990

NET SALES                                       $502,748       $632,733
COST OF GOODS SOLD                               472,175        550,985

   Gross profit                                   30,573         81,748
ENGINEERING, SELLING AND ADMINISTRATIVE
 EXPENSES                                         60,553         64,112

RESTRUCTURING CHARGE                               7,180            ---

   Income (loss) from operations                (37,160)         17,636

INTEREST EXPENSE                                 (1,660)        (1,961)

OTHER INCOME - NET                                 1,100          1,386

EQUITY IN NET INCOME (LOSS) OF DEALERSHIPS            70           (70)

INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE
  EFFECT OF CHANGE IN ACCOUNTING(37,650)          16,991

CUMULATIVE EFFECT OF CHANGE IN
  ACCOUNTING - POSTRETIREMENT BENEFITS
 (SEE NOTE G)                                    (8,532)            ---

INCOME (LOSS), EXCLUSIVE OF TAXES              $(46,182)        $16,991

The accompanying notes are an integral part of these financial statements.

BUSINESS ACQUIRED FROM CLARK
EQUIPMENT COMPANY BY TEREX CORPORATION

COMBINED STATEMENT OF ASSETS AND LIABILITIES

(amounts in thousands)

December 31, 1991

ASSETS

CURRENT ASSETS

   Cash and cash equivalents                                  $1,629
   Trade and notes receivable, less allowance of $3,568       42,244
   Accounts due from related parties                           1,678
   Net inventories                                            75,445
   Other current assets                                        4,712
       Total current assets                                  125,708

LONG-TERM ASSETS
   Property                                                    4,750
   Plant                                                      49,824
   Equipment                                                  62,708
                                                             117,282
   Less-Accumulated depreciation                            (67,234)
      Net property, plant and equipment                       50,048
   Goodwill, net of amortization of $796                      18,728
   Investment in dealerships                                   1,995
   Other assets                                               11,697
     Total assets                                            208,176

LIABILITIES

CURRENT LIABILITIES

   Trade accounts payable                                     42,955
   Accounts due to related parties                             2,479
   Other current liabilities                                  49,621
       Total current liabilities                              95,055

RENTAL INSTALLMENT OBLIGATIONS                                 5,817
OTHER LONG-TERM LIABILITIES                                   49,886

       Total liabilities                                     150,758

NET ASSETS OF BUSINESS ACQUIRED                              $57,418

The accompanying notes are an integral part of these financial statements.

BUSINESS ACQUIRED FROM CLARK
EQUIPMENT COMPANY BY TEREX CORPORATION

COMBINED STATEMENT OF CASH FLOWS

(amounts in thousands)

                                                 Year Ended December 31,
                                                   1991           1990

OPERATING ACTIVITIES
   Income (loss), exclusive of taxes           $(46,182)        $16,991
   Adjustments to reconcile loss, exclusive of taxes,
     to net cash from (used in) operating activities:
       Depreciation                                8,410          7,991
       Amortization and write-off of
        deferred costs                               478            318
       Noncash restructuring charge                7,180            ---
       Effect of accounting change                 8,532            ---
       Equity (income) loss                         (70)             70
       Increase (decrease) in cash due to changes in operating
       assets and liabilities, net of the effects of
       business acquisitions:
       Trade receivables                           1,974          6,598
       Accounts due from related parties           (982)             14
       Net inventories                            17,144        (5,865)
       Other current assets                          405          (180)
       Trade accounts payable                    (4,098)       (11,277)
       Accounts due to related parties           (1,402)        (3,250)
       Accrued warranties and product
        liabilities                                2,370          2,440
       Other current liabilities                   7,531          1,507
       Other assets                              (1,016)          (227)
       Other liabilities                             167        (3,608)

   Net cash from (used in) operating
    activities                                       441         11,522

INVESTING ACTIVITIES

Acquisition of business, net of cash acquired     ---       (19,810)
Sale of properties                              1,202            131
Capital expenditures                          (8,640)        (9,881)
Other                                         (1,352)          (958)

  Net cash used in investing activities       (8,790)       (30,518)

FINANCING ACTIVITIES

   Net borrowings from parent                      8,261         19,729
   Decrease in rental obligations                  (528)          (120)

     Net cash from (used in) financing
      activities                                   7,733         19,609


EFFECT OF EXCHANGE RATE CHANGES ON CASH              968          (101)


NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                                352            512

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   1,277              765


CASH AND CASH EQUIVALENTS AT END OF PERIOD        $1,629         $1,277

The accompanying notes are an integral part of these financial statements.

BUSINESS ACQUIRED FROM CLARK
EQUIPMENT COMPANY BY TEREX CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
December 31, 1991
(dollar amounts in thousands, unless otherwise denoted)

NOTE A--REPORTING ENTITY AND BASIS OF PRESENTATION

On July 31, 1992, Terex Corporation ("Terex") completed the acquisition of the common stock of Clark Material Handling Company and certain sister companies (herein referred to as the "Business") from Clark Equipment Company ("CECO" or the "Seller") (the "Clark Acquisition"). The purchase price of the common stock acquired was approximately $90.0 million.

The combined financial statements include the combined accounts of the Business acquired. The Combined Statement of Operating Revenues and Expenses include revenues and expenses directly related to the Business and exclude income taxes.

NOTE B--SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination - All material intercompany balances, transactions and profits have been eliminated. The equity method is used to account for investments in which the Business has an ownership interest between 20% and 50%. All majority-owned subsidiaries have been consolidated.

Foreign Currency Translation - Financial statements of subsidiaries operating outside of the United States are translated into U.S. dollar equivalents in accordance with FAS No. 52. Foreign currency translation adjustments are generally excluded from the Combined Statement of Operating Revenues and Expenses. Such adjustments are inherently included as a component of Net Assets of Business Acquired in the Combined Statement of Assets and Liabilities. Foreign currency exchange losses, resulting primarily from foreign currency transactions, of $0.8 million and $0.5 million in 1991 and 1990, respectively, are included in Other Income.

Cash and Cash Equivalents - The Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

Inventories - Inventories are stated at the lower of cost or market. The last-in-first out (LIFO) method is used to value substantially all U.S. inventories. All other inventories are valued using the first-in, first-out (FIFO) method.

Property, Plant and Equipment - Property, plant and equipment are stated at cost. Plant and equipment are depreciated over the estimated useful lives of the assets, ranging from three years for certain equipment to a maximum of 50 years for some buildings, under the straight-line method of depreciation for financial reporting purposes. Depreciation expense reflected in these financial statements for 1991 and 1990 approximated $8.4 million and $8.0 million, respectively. Expenditures for maintenance and repairs not expected to extend the useful life of an asset beyond its normal useful life are charged to expense as incurred. The cost of assets and related accumulated deprecation that are retired or sold are removed from the accounts, with corresponding gains or losses on disposal included in income.

Costs and Expenses - Provisions are made for the estimated future costs that will be incurred under product warranty claims based on the Company's claims experience. Such costs are accrued at the time revenue is recognized.

Research and Development Costs - Research and development costs are expensed as incurred. Such costs incurred in the development of new products or significant improvements to existing products amounted to $11.2 million in 1991 and 12.4 million in 1990.

Restructuring Charge - During 1991, the Business recorded the impact of a restructuring plan designed to increase the overall profitability of the Business by streamlining and consolidating certain operations. Restructuring costs of $7.2 million represent provisions for the anticipated future costs of implementing reductions in both domestic and foreign manufacturing capacity, as well as streamlining manufacturing processes. The restructuring charge included the following items:

Employment Reduction Costs            $  4,680
Plant Consolidation and
 Rationalization                         2,500
                                       $ 7,180

Income Taxes - Prior to the acquisition, the Business was included in the consolidated federal tax return of CECO. Given the complexity of segregating the tax attributes of the Business from Consolidated CECO and the cumulative operating losses incurred by the Business in recent years, the presentation of tax accounts for the Business would not be meaningful. Accordingly, the combined financial statements exclude income tax effects.

The Seller has agreed to idemnify Terex for any costs arising in future periods related to income tax effects of the Business's operations prior to the acquisition.

Guarantees and Contingencies - Guarantees and other contingencies are accrued when a loss is considered probable and the amount is reasonably measurable.

NOTE C--ACQUISITION ACTIVITIES

On April 30, 1990, the Business acquired the common stock of Drexel Industries, Inc. ("Drexel") for approximately $20 million in cash. The acquisition was accounted for using the purchase method; accordingly, the assets acquired and the liabilities assumed were recorded at their estimated fair value at the date of acquisition. The excess of purchase price over the estimated value of the net assets acquired of approximately $19.5 million is being amortized on a straight-line basis over 40 years. Drexel operations have been included in the Combined Statement of Operating Revenues and Expenses since the date of acquisition.

Unaudited pro forma combined sales and income before taxes for 1990, assuming the Business completed the Drexel acquisition on January 1, 1990, would have increased by approximately $4.0 million and $0.5 million, respectively. The pro forma combined results do not represent actual operating results. The Business is actively reorganizing all its operations, including the integration of Drexel operations with existing manufacturing operations, and adjusting production capacity to meet actual demand in the marketplace. Consequently, management does not view pro forma information as a meaningful representation of the Business's future operations.

NOTE D--INVENTORIES

Inventories, net of valuation reserves of $7.5 million consist of the following:

                                                   December 31,
                                                       1991

Finished products                                 $ 29,405
Work-in-process and finished parts                  29,511
Raw material and supplies`                          43,386

                                                   102,302

Less:  Excess of FIFO costs
                   over stated LIFO value           26,857


                                                  $ 75,445

Inventories valued using the LIFO method represented approximately 60% of combined inventories at December 31, 1991. In 1991 and 1990, certain inventory quantities were reduced, resulting in liquidations of LIFO inventory quantities carried at lower costs prevailing in prior years. The effect was to decrease cost of goods sold by $4.2 million and $0.7 million in 1991 and 1990, respectively.

NOTE E--BALANCE SHEET AND INCOME STATEMENT INFORMATION

Other current liabilities include the following:

                                                  December 31, 1991

Accrued payroll and related taxes                   $  7,076
Accrued product liability                              9,700
Accrued warranties                                     8,531
Accrued product discounts                              5,025
Accrued restructuring costs                            8,708
Other                                                 10,581
                                                    $ 49,621

Other long-term liabilities include the following:

                                                  December 31, 1991

Accrued pension                                     $ 11,141
Accrued product liability                             36,423
Other                                                  2,322

                                                    $ 49,886

Supplementary income statement information

                                                    Year Ended December 31,

                                             1991         1990
Maintenance and repairs                    $ 2,557    $ 2,349
Rent                                         4,192      4,560
Advertising costs                            4,200      4,226

NOTE F--PENSION COSTS

Essentially all of the Business's U.S. employees were covered by a defined benefit pension plan sponsored by the previous employer. The Seller has retained the responsibility after the Clark Acquisition for this plan and another plan covering retirees. Therefore, the impacts of these plans have not been included in the Combined Statement of Assets and Liabilities. The operating expense impact of pension programs related to former operations of the Business which were not acquired by Terex have been eliminated from the Combined Statement of Operating Revenues and Expenses. Provisions related to active employees, however, have been included inasmuch as it is anticipated that the Business will maintain a similar plan after the sale. Pension expense related to active employees was $1.5 million in 1991 and $1.3 million in 1990.

CECO also sponsored defined contribution plans in the United States and Korea. Costs associated with these plans were $0.7 million in 1991 and $0.6 million in 1990.

The Business's German employees are covered by a defined benefit pension plan. At December 31, 1991, the Business has accrued approximately $11.1 million related to the benefits earned by active and retired participants as of that date. The plan is unfunded. Annual pension expense relating to this plan approximated $0.8 million in 1991 and $1.0 million in 1990.

NOTE G--POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS

CECO provided certain health care and life insurance benefits for retired employees of the Business. Substantially all U.S. employees of the Business became eligible for these benefits upon retirement. Contributory requirements for retirees under the Plan varied based upon the actual retirement date.

Effective January 1, 1991, CECO changed its method of accounting for postretirement benefits by adopting the accrual method, as prescribed by Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." In making this change, the Business gave immediate recognition to a $72.2 million provision to accrue the total estimated amount of the Accumulated Postretirement Benefit Obligation related to current and former operations of the Business. This charge was recorded as a cumulative effect of an accounting change.

Under terms of the agreement between CECO and Terex related to the acquisition of the Business, CECO maintains responsibility for the obligations due under the above referenced plan. Therefore, the impacts of the related obligations have not been reflected in the Combined Statement of Assets and Liabilities. Virtually all operating expense impacts, including both the annual provisions expensed on a pay-as-you-go basis prior to the change in accounting and the cumulative effect of the change in accounting, have also been eliminated from the Combined Statement of Operating Revenues and Expenses. These impacts have been removed inasmuch as the related provisions related almost entirely to former operations of the Business which were not acquired by Terex. The remaining portion of the cumulative effect of the change in accounting of $8.5 million included in the Combined Statement of Operating Revenues and Expenses represents the charge associated with active employees and retirees of the Business acquired.

In terms of future periods, Terex has no benefit program which provides retiree health or life insurance benefits to retirees of the Business.

NOTE H--PRODUCT LIABILITY AND OTHER INSURANCE COSTS

Domestically, the Business is self-insured up to certain limits for product liability exposures. The Business provides self-insurance reserves for estimated losses on known claims and for claims anticipated to have been incurred which have not yet been reported. Reserves for product liability losses are generally of a long-term nature and are presented on a projected gross settlement basis.

The Business has suits pending alleging damages for injuries or deaths from accidents involving the Business's products that have arisen in the normal course of its operations. Although the ultimate exposure to the Company from these and any similar subsequent suits, relating to accidents which have occurred, is subject to a high degree of estimation and cannot be determined with complete precision, the Business believes that potential damages are adequately provided for by insurance and product liability reserves.

The Business is also self-insured with respect to various other risks, including workers' compensation, general, and automobile liability. Insurance coverage for product liability and these other risks is obtained for catastrophic losses as well as those risks required to be insured by law or contract. The Business has recorded an estimated liability, based upon actuarial determination, for all uninsured risks and claims incurred. However, future periods could be affected if uninsured losses in excess of amounts provided were incurred.

NOTE I--GUARANTEES AND REPURCHASE ARRANGEMENTS

The Business has given guarantees arising out of the ordinary conduct of its business. These guarantees generally relate to financial institutions for the collectibility of certain third party receivables. These normally relate to capital loans and other dealer and customer obligations, and approximated $37 million at December 31, 1991. Potential losses on such guarantees are accrued as a component of the Allowance for Doubtful Accounts.

To enhance its marketing efforts and ensure continuity of its dealer network, the Business has also agreed as part of its dealer sales agreements to repurchase certain new and unused products and parts inventory and certain products used as dealer rental assets in the event of a dealer termination. Through this arrangement, the Business has been able to maintain its dealer network based on operational standards and marketing requirements. Repurchase agreements included in operating agreements with an independent financial institution have been patterned after those included in the dealer sales agreements. Dealer inventory and rental asset financings approximately $235 million at December 31, 1991, are covered by those operating agreements. It is not practicable to determine the additional amount subject to repurchase solely under the dealer sales agreements. Under these arrangements, when dealer terminations do occur, a newly selected dealer generally assumes the assets of the prior dealer and any related financial obligations. Accordingly, the risk of loss to the Business is minimal, and historically it has incurred only immaterial losses relating to these arrangements. In 1991, four dealers were terminated and the related losses incurred were negligible.

NOTE J--LEASE COMMITMENTS

The Business leases certain office and manufacturing facilities as well as certain other equipment. Future rental commitments relating to leases with a term in excess of one year are as follows:

1992                                       $   3,256
1993                                           2,648
1994                                           2,065
1995                                           1,295
1996                                           1,058
Thereafter                                       957
                                           $  11,279

The Business also routinely enters into sales-leaseback arrangements with regards to certain equipment, which is later sold to third-party customers under sales-type lease agreements. The Business maintains a net investment in these leases, represented by the present value of payments due under the leases, which is included in the Other Current Asset and Other Asset captions of the Combined Statement of Assets and Liabilities. The total net investment in such leases approximated $8.2 million at December 31, 1991.

In connection with the original sale-leaseback arrangements underlying the customer leasing program, the Business has an outstanding rental installment obligation. Consistent with the nature of the capital leases, the obligation reflects the present value of the minimum payments due under the leases. The current portion of this obligation is included in Other Current Liabilities in the Combined Statement of Assets and Liabilities.

The average term of each of the leasing arrangements outlined above is five years. Additional information related to both the net investment in leases and the rental obligation are as follows:

                          Investment              Rental
                          In Leases             Obligation

Total minimum obligations    $9,688                $8,516

Less amount representing
 interest                     1,440                 1,256

Present value of net
 minimum obligations          8,248                 7,260
Less current portion          1,625                 1,443

 Long-term obligations       $6,623                $5,817

Pursuant to the terms of the Stock Purchase Agreement between CECO and Terex, CECO has agreed to fully reimburse Terex for the present value of all payments due under the rental installment obligation as of the date of acquisition.

NOTE K--SEGMENT INFORMATION

The Business operates in one industry segment, that being the design, manufacture and sale of forklift trucks. There was no single customer from which 10% or more of total revenue was derived during the years 1989-1991. Export sales of U.S. manufactured products and parts sold to customers and dealers located outside of the United States were $34.8 million and $38.3 million in 1991 and 1990. These sales were principally to Europe and Canada. Sales to the U.S. government accounted for less than 2% of total sales in each year.

In 1989, the Business began producing transaxle components in Korea for use in forklift trucks produced in conjunction with a joint-venture with Samsung Heavy Industries (See Note L - Related Party Transactions). Transfers of transaxle components to the joint-venture are not reflected as sales for financial reporting purposes. As these components are included in the finished products supplied by the venture, the sales are recognized upon sale of the forklift trucks to third party customers.

For geographic segment reporting, sales and operating profit (loss) reflect amounts sourced from the identified geographic area. Information on geographic segments is as follows:

                                 December 31,
                               1991        1990
                            Amounts in millions

Sales:
  North America             $326.8      $422.1
  Europe                     173.1       209.8
 Pacific Rim                   2.8          .8

Transfers between areas:
  North America               11.5        10.1
  Europe                       8.3         5.4
  Pacific Rim                  3.2          .1
  Eliminations               (23.0)      (15.6)
  Total                     $502.7      $632.7

Operating profit (loss):
  North America             $(23.6)       $9.5
  Europe                     (11.5)       10.5
  Pacific Rim                 (1.0)        (.9)
                             (36.1)       19.1

Interest expense              (1.7)       (2.0)

Combined operations          (37.8)       17.1
Equity investments              .1         (.1)

  Total                     $(37.7)      $17.0


                                 December 31,
                               1991         1990
Amounts in millions
Identifiable assets:
  North America             $105.9      $106.2
  Europe                      81.8       102.1
  Pacific Rim                 18.5        19.6

Combined operations          206.2       227.9

Equity investments             2.0         1.9
  Total                     $208.2      $229.8

NOTE L--RELATED PARTY TRANSACTIONS

The Business, as a part of CECO, had entered into transactions with CECO affiliates. While certain of the transactions may continue for a period of time subsequent to the Clark Acquisition, such transactions are not related party transactions of Terex. A discussion of major transactions follows.

Service Arrangements

The Business has entered into service arrangements with various operations of CECO. Under one such arrangement, Clark Distribution Services (CDS), a wholly-owned subsidiary of CECO, provides warehousing and shipping services related to the Business's North American after-market parts business. Fees relating to this operation were based on negotiated contracts and approximated $7.5 million in 1991 and $7.4 million in 1990. CDS continues to provide services under the terms of the most recent contract subsequent to the acquisition by Terex. The Business provides a similar service for the distribution of parts for other business units of CECO in Europe. Service revenues under this arrangement included in these financial statements approximated $2.5 million in 1991 and $2.5 million in 1990. This arrangement is based on negotiated contracts with indefinite terms, which can be cancelled with 12 months written notice. The Business also contracted with an operation of CECO which provided its data processing resources for its North American operations. Fees of approximately $1.5 million in 1991 and $2.2 million in 1990 were charged under this arrangement. Pursuant to the terms of the Stock Purchase Agreement between Terex and CECO, CECO will continue to provide such data processing services through December 31, 1992.

Purchases from CECO Affiliates

The Business purchased forklift truck componentry from Clark-Hurth Components (CHC), a business unit of CECO. The pricing of such purchases were determined as nearly as possible on the basis of normal commercial relationships. Aggregate purchases from CHC were $20.9 million in 1991 and $46.8 million in 1990. Net accounts payable to CHC were $0.9 million in 1991, and are reflected in Accounts Due From Related Parties in these financial statements.

Joint Venture with Samsung Heavy Industries

The Business has a cooperative agreement with Samsung Heavy Industries (SHI) which began in 1987. The agreement requires that SHI manufacture product based upon the engineering technology provided by the Business. Purchases from SHI were $84.9 million in 1991 and $108.0 million in 1990. Accounts payable to SHI were $16.3 million at December 31, 1991, and are reflected in Trade Payables in these financial statements

The Business has an agreement to purchase a specified number of internal combustion lift-trucks from SHI. If this commitment is not honored, the Business may be subject to a penalty. On September 2, 1992, the Business announced that certain of its production of its 2,000 to 10,000 lb. capacity trucks will be brought back to the U.S. and Germany beginning in the fourth quarter of 1992. Negotiations related to the future supplier relationship, including the manufacturing of certain I.C. trucks and uprights, are continuing at the current time. Management believes that continuing supplier relations will negate any penalty.

BUSINESS ACQUIRED FROM CLARK
EQUIPMENT COMPANY BY TEREX CORPORATION

UNAUDITED COMBINED STATEMENT OF OPERATING
REVENUES AND EXPENSES
(amounts in thousands)

                                                   For the Six Months
                                                          Ended
                                                         June 30,
                                                           1992

NET SALES                                              $ 249,539
COST OF GOODS SOLD                                       237,180

 Gross profit                                            12,359

ENGINEERING, SELLING AND ADMINISTRATIVE
 EXPENSES                                                 25,750
 Loss from operations                                   (13,391)

OTHER INCOME (EXPENSE)
 Interest expense                                          (601)

 Other expense, net                                        (494)

LOSS, EXCLUSIVE OF TAXES                               $(14,486)

The accompanying notes are an integral part of these financial statements.

BUSINESS ACQUIRED FROM CLARK
EQUIPMENT COMPANY BY TEREX CORPORATION

UNAUDITED COMBINED STATEMENT OF CASH FLOWS
(amounts in thousands)

For the Six Months

Ended
June 30, 1992

OPERATING ACTIVITIES

  Loss, exclusive of taxes                             $(14,486)
  Adjustments to reconcile loss, exclusive of taxes,
     to net cash from (used in) operating activities:
       Depreciation                                        4,522
       Amortization and write-off of deferred costs          237
       Noncash restructuring charge                          582
     Increase (decrease) in cash due to changes in operating
       assets and liabilities, net of the effects of
       business acquisitions:
       Trade receivables                                 (1,433)
       Accounts due from related parties                     537
       Net inventories                                   (2,783)
       Other current assets                                  171
       Trade accounts payable                              6,548
       Accounts due to related parties                     (505)
       Accrued warranties and product liabilities          3,673
       Other current liabilities                         (2,416)
       Other assets                                        (563)
       Other liabilities                                     146
  Net cash from (used in) operating activities(5,770)

INVESTING ACTIVITIES
  Sale of properties                                          26
  Capital expenditures                                   (1,783)
  Other                                                     (98)
     Net cash used in investing activities               (1,855)

FINANCING ACTIVITIES
  Net borrowings (repayments) to parent                    6,110
  Decrease in rental obligations                             602
     Net cash from (used in) financing activities          6,712

EFFECT OF EXCHANGE RATE CHANGES ON CASH                     (72)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS       (985)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD           1,629

CASH AND CASH EQUIVALENTS AT END OF PERIOD                $  644

The accompanying notes are an integral part of these financial statements.

BUSINESS ACQUIRED FROM CLARK EQUIPMENT COMPANY
by TEREX CORPORATION
NOTES TO UNAUDITED COMBINED STATEMENT OF
OPERATING REVENUES AND EXPENSES
June 30, 1992
(Amounts in thousands)

Note 1 - Basis of Presentation

Terex completed the Clark Acquisition on July 31, 1992 and, accordingly, financial statements of the Business Acquired from Clark Equipment Company by Terex Corporation (the "Business") do not exist as of September 30, 1992 The accompanying unaudited Combined Statement of Operating Revenues and Expenses is presented for the six months ended June 30, 1992.

The Combined Statement of Operating Revenues and Expenses has been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, it does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been made. Operating results for the six months ended June 30, 1992, are not necessarily indicative of the results that may be expected for the year ended December 31, 1992. For further information, refer to the audited combined financial statements and footnotes thereto of the Business Acquired from Clark Equipment Company by Terex Corporation for the years ended December 31, 1991, 1990 and 1989.

The Combined Statement of Operating Revenues and Expenses includes revenues and expenses directly related to the Business and excludes income taxes. In light of the nature of operations of the Business presented herein, a statement of cash flows has not been presented as such information would not be meaningful.


TEREX CORPORATION

PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated income statement of the Company gives effect to the Clark acquisition on July 31, 1992 (as described in Note C - Acquisitions, of the Notes to Consolidated Financial Statements for the year ended December 31, 1992 included in this Prospectus). The pro forma information is based on the historical income statement of the Company for the period ended December 31, 1992, giving effect to the Clark acquisition and financing transactions and adjustments as reflected in the accompanying notes.

On July 31, 1992, the Company completed the Clark acquisition. A private placement of $160 million of the Secured Notes and a seller note due Clark Equipment Company (the "Seller Note") of approximately $6.1 million provided the financing for the aggregate purchase price of approximately $91.1 million. Proceeds of the Secured Notes also provided funds for the refinancing of certain existing Company debt (the "Refinancing"), for transaction and acquisition costs and for working capital purposes. The Company financed the entire purchase price of the Clark acquisition through proceeds of debt.

The acquisition was accounted for using the purchase method, with the purchase price of the Clark acquisition allocated to the assets acquired and liabilities assumed based upon their respective estimated fair values at the date of acquisition. Purchase price allocations were based on evaluations, estimations, appraisals, actuarial studies and other studies performed by the Company.

The unaudited pro forma consolidated results do not represent actual operating results. The pro forma amounts were prepared by management of the Company and should not be interpreted as predictive of the Company's future results of operations. The Company is actively reorganizing the operations of Clark by consolidating manufacturing and distribution operations. Consequently, management does not view the combination of historical financial results as a meaningful representation of the Company's future operations.

TEREX CORPORATION
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
(in thousands except per share amounts)

                       Terex
                    Corporation           Pro Forma    Pro Forma
                        and      BusinessAcquisition  Refinancing
                    Subsidiaries AcquiredAdjustments  Adjustments   Pro Forma

NET SALES           $523,355  $288,504        $0          $0        $811,859

COST OF GOODS SOLD   469,345   275,065   (4,124) (3b,c,d)  0         740,286

   Gross Profit       54,010    13,439     4,124           0          71,573

ENGINEERING, SELLING
 AND ADMINISTRATIVE
 EXPENSES           58,135      29,873   (1,983) (3d)      0          86,025

   Loss from
    operations       (4,125)  (16,434)     6,107           0         (14,452)

OTHER INCOME (EXPENSE):
   Interest income     1,666         0         0           0           1,666
   Interest expense (23,320)     (689)   (6,752) (3a)  (435) (3a)    (31,196)
   Equity income
    (loss)          (35,045)         0         0           0         (35,045)
   Royalty income         67         0         0           0              67
   Gain on sale of
    subsidiary stock
    and related
    recapitalization  7,759         0          0           0           7,759
   Other - net       (4,110)     (537)   (1,033) (3a)  (915) (3a)     (6,595)

Loss before income
 taxes              (57,108)  (17,660)   (1,678)     (1,350)         (77,796)

PROVISION FOR INCOME
 TAXES                    67         0         0           0              67

   Net loss         $(57,175)$(17,660)  $(1,678)    $(1,350)        $(77,863)


NET LOSS PER SHARE    $(6.14)                                        $(8.22)

AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT
SHARES CONSIDERED
OUTSTANDING IN PER
SHARE CALCULATION 9,945 9,945

TEREX CORPORATION
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED INCOME STATEMENT

1) The unaudited pro forma condensed consolidated income statement is presented for the year ended December 31, 1992. The pro forma statement reflects the operations of the Company combined with those of the acquired business assuming the Clark acquisition and the related refinancings were consummated on January 1, 1992.

2) For purposes of preparing the unaudited pro forma condensed consolidated income statement of the Company, all financial information of foreign operations has been translated into U.S. dollars in accordance with Statement of Financial Accounting Standards No. 52.

3) The pro forma income statement adjustments are summarized as follows:

a) The Secured Notes and the Seller Note provided the funds to finance the Clark acquisition, as well as funds to refinance certain existing Company debt and pay refinancing and acquisition costs. The Secured Notes bear interest at 13% and are due August 1, 1996. The Seller Note bears interest at the prime rate as defined in the related agreement and is due July 31, 1994.

Pro forma interest expense increased $6.8 million and $0.4 million due to acquisition and refinancing pro forma adjustments, respectively, for the year ended December 31, 1992.

Pro forma adjustment to Other - Net represents amortization of debt issuance costs of $1.9 million for the year ended December 31, 1992.

b) Depreciation expense increases on a pro forma basis by $1.6 million for the year ended December 31, 1992. The adjustments are due to the revaluation of plant and equipment in connection with the Clark acquisition in accordance with APB 16.

c) Pro forma adjustments reflect the intangible assets amortization expense of $1.3 million for the year ended December 31, 1992.

d) Pro forma adjustments reflect reduced cost of goods sold of $7.0 million and reduced engineering, selling and administrative expenses of $2.0 million for the year ended December 31, 1992. The reduced expenses relate to recurring cost savings to be derived which are directly attributable to the Clark acquisition.


Report of Independent Accountants

To the Board of Directors and
Stockholders of Fruehauf Trailer Corporation

In our opinion, the consolidated financial statements of Fruehauf Trailer Corporation and Subsidiaries listed in the Index to Consolidated Financial Statements on page F-1 and the financial statement schedules referred to under Item 16 present fairly, in all material respects, the financial position of Fruehauf Trailer Corporation and its subsidiaries at December 31, 1992, and the results of their operations and their cash flows for the year in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above.

The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Notes G and Q to the financial statements, the Company has suffered recurring losses from operations, has a net capital deficiency, and a lender has changed the maturity of the obligation under its Credit Agreement. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note Q. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note L to the financial statements, the Company is currently subject to several contingent liabilities. The ultimate outcome of these contingencies cannot be determined at present; however, the Company has provided reserves for its best estimate of losses related to certain of these contingencies.

Price Waterhouse

Milwaukee, Wisconsin
April 14, 1993

Report of Independent Accountants

Board of Directors and Stockholders of
Fruehauf Trailer Corporation
Southfield, Michigan

We have audited the accompanying consolidated balance sheet of Fruehauf Trailer Corporation (formerly a wholly owned subsidiary of Terex Corporation) and subsidiaries as of December 31, 1991, and the related consolidated statements of income, stockholders' investment, and cash flows for each of the two years in the period ended December 31, 1991. Our audits also included the financial statement schedules for the years ended December 31, 1991 and 1990 listed under Item 16. These financial statements and financial statement schedules are the responsibility of the Corporation's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Fruehauf Trailer Corporation and subsidiaries as of December 31, 1991, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 1991 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedules for the years ended December 31, 1991 and 1990, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note P to the consolidated financial statements, the Corporation has restated its 1991 and 1990 financial statements.

As discussed in Note L to the financial statements, the Corporation is a defendant in a class action lawsuit alleging violation of certain provisions of the federal securities law. The ultimate outcome of the litigation cannot presently be determined. Accordingly, no provision for any loss that may result upon resolution of this matter has been made in the accompanying financial statements.

Deloitte & Touche

Detroit, Michigan
March 30, 1992 (April 14, 1993 as to
Note P and the ninth paragraph of Note L)

FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share amounts)

                                                 Year ended December 31,
                                                 1992      1991      1990
NET SALES                                     $488,898 $512,689  $589,452
COST OF GOODS SOLD                             448,215  445,040   495,599
     Gross margin                               40,683   67,649    93,853
ENGINEERING, SELLING AND ADMINISTRATIVE EXPENSES
   Third parties                                60,562   69,412    68,757
   Parent company                                    -    1,932     2,500
   Other related party                           2,300    3,633     3,322
     Total                                      62,862   74,977    74,579
RESTRUCTURING COSTS                             15,500   15,825        -
   Income (loss) from operations              (37,679) (23,153)    19,274
OTHER INCOME (EXPENSE)
   Interest income                               1,201    1,294     2,824
   Interest expense - third parties            (9,261) (12,283)  (24,035)
   Interest expense - parent company                -   (1,612)   (1,562)
   Interest expense - other related parties      (975)  (3,743)   (5,495)
   Equity in net income (loss) of affiliates   (5,714)    4,209     7,480
   Royalty income - third parties                  342      638       939
   Royalty income - affiliates                   2,557    2,518     4,221
Gain (loss) on sale of excess assets              (22)    7,484         -
   Amortization/write-off of debt issue costs  (4,967)    (867)   (3,329)
   Adjustments of estimated realizable
    value of Jacksonville                     (11,551)       -          -
   Other income (expense) - net                (2,241)  (2,495)       678
     Income (loss) before income taxes        (68,310) (28,010)       995
PROVISION (BENEFIT) FOR INCOME TAXES           (3,150)      866       979
NET INCOME (LOSS) BEFORE EXTRAORDINARY LOSS   (65,160) (28,876)        16
EXTRAORDINARY LOSS ON RETIREMENT OF DEBT           -        -     (2,192)
NET LOSS                                     $(65,160)$(28,876) $ (2,176)
NET INCOME (LOSS) PER SHARE
   Net income (loss) before
    extraordinary loss                        $(5.36)   $(3.50)    $0.00
   Extraordinary loss on retirement of debt         -        -     (0.47)
     Net loss per share                       $(5.36)   $(3.50)   $(0.47)
WEIGHTED AVERAGE COMMON AND COMMON
   EQUIVALENT SHARES OUTSTANDING                12,159    8,260     4,590

The accompanying notes are an integral part of these statements.

FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands, except per share amounts)

ASSETS

                                                       December 31,
                                                   1992           1991
CURRENT ASSETS
   Cash and cash equivalents                       $3,023         $2,985
   Marketable securities                                -          1,038
   Trade receivables (less allowance of $2,048
     in 1992 and $2,210 in 1991)                   39,387         35,716
   Net inventories                                 54,893         98,570
   Note receivable from related party               1,622              -
   Other current assets                             3,790          1,187
      Total Current Assets                        102,715        139,496

LONG-TERM ASSETS
   Prepaid pension cost                             7,795          9,104
   Facility leased to affiliate                    14,000         18,955
   Investment in affiliate companies               33,745         40,145
   Assets held for sale                            50,772         43,301
   Other assets                                     1,364          6,049

PROPERTY, PLANT AND EQUIPMENT
   Property                                        17,265         35,281
   Plant                                           26,287         39,910
   Equipment                                       40,296         45,914
                                                   83,848        121,105
   Less - Accumulated depreciation               (17,581)       (18,227)
     Net Property, Plant and Equipment             66,267        102,878

TOTAL ASSETS                                     $276,658       $359,928

The accompanying notes are an integral part of these statements.

FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands, except per share amounts)

LIABILITIES AND STOCKHOLDERS' INVESTMENT

                                                       December 31,
                                                   1992           1991
CURRENT LIABILITIES
   Notes payable                                  $2,963            $ -
   Trade accounts payable                         47,373         50,033
   Accrued compensation and benefits              12,389         16,245
   Accrued warranties                              7,417          7,439
   Accrued workers compensation                    5,670          9,207
   Accrued cost of facility realignment            6,548         16,701
   Other current liabilities                      16,990         28,767
   Current portion of long-term debt to
    related party                                  7,497              -
   Current portion of long-term debt to
    third parties                                 89,794         12,177
      Total Current Liabilities                  196,641        140,569

LONG-TERM LIABILITIES
   Long-term debt to third parties,
    less current portion                           3,798         77,330
   Long-term debt to related party,
    less current portion                               -          7,497
   Postretirement health benefits                 38,885         34,939
   Long-term payable to parent                    14,890         10,244
   Other long-term liabilities                    39,962         40,944

STOCKHOLDERS' INVESTMENT
   Common stock, $0.01 par value
    -authorized 20,000 shares;
      issued and outstanding 12,159 shares           122            122
   Additional paid-in capital                     71,881         71,881
   Retained deficit                             (96,403)       (31,243)
   Foreign currency translation adjustment         6,882          7,645
      Total Stockholders' Investment            (17,518)         48,405

TOTAL LIABILITIES AND STOCKHOLDERS'
    INVESTMENT                                  $276,658       $359,928

The accompanying notes are an integral part of these statements.

FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' INVESTMENT
(in thousands)

                                                 Retained     Foreign
                                    Additional   Earnings     Currency
                            Common   Paid-in   (Accumulated Translation
                            Stock    Capital     Deficit)    Adjustment  Total

BALANCE AT DECEMBER 31,
 1989
   As previously reported     $46    $9,959        $994        $340    $11,339

   Restatement (Note P)         -         -     (1,185)           -    (1,185)

AS RESTATED - DECEMBER 31,
 1989                          46     9,959       (191)         340     10,154

Net loss                        -         -     (2,176)           -    (2,176)

Translation adjustment          -         -           -      13,989     13,989

BALANCE AT DECEMBER 31,
 1990                          46     9,959     (2,367)      14,329     21,967

Net loss                        -         -    (28,876)           -   (28,876)

Translation adjustment          -         -           -     (6,684)    (6,684)

Net effect of
 recapitalization              36    22,462           -           -     22,498

Issuance of common stock in
  initial public offering      40    39,460           -           -     39,500

BALANCE AT DECEMBER 31,
 1991                         122    71,881    (31,243)       7,645     48,405

Net loss                        -         -    (65,160)           -   (65,160)

Translation adjustment          -         -           -       (763)      (763)

BALANCE AT DECEMBER 31,
 1992                        $122   $71,881   $(96,403)      $6,882  $(17,518)

The accompanying notes are an integral part of these statements.

FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)

                                                 Year ended December 31,
                                              1992         1991        1990
OPERATING ACTIVITIES
   Net loss                               $(65,160)   $(28,876)    $(2,176)
   Adjustments to reconcile net loss
    to net cash from (used in)
    operating activities:
     Depreciation                             4,071       6,882       6,336
     Amortization and write-off of
      deferred costs                          4,967       1,567       8,701
     Non-cash extraordinary loss                  -           -       2,192
     Unremitted (earnings) loss from
      affiliate companies                     6,862     (2,528)     (6,748)
     Loss on sale of affiliate stock              -       3,312           -
     Interest paid-in-kind                        -       4,128       7,036
     (Gain) loss on sale of excess assets        22     (7,484)           -
     Non-cash restructuring costs            15,500      15,825           -
     Non-cash liquidation costs of
      Jacksonville                           11,551           -           -
     Other non-cash charges                   8,120           -           -
     Increase (decrease) in cash due to
      changes in operating assets and liabilities:
       Trade receivables                    (3,671)      12,359      13,492
       Net inventories                       43,677      20,309      20,717
       Other current assets                   (836)       8,758     (5,586)
       Trade accounts payable               (2,660)      10,521       2,765
       Long-term payable to parent            4,646       3,932       5,931
       Accrued compensation and benefits    (3,856)     (5,156)     (6,044)
       Accrued warranties                      (22)         123     (2,103)
       Other liabilities                   (34,278)    (56,498)    (59,711)
       Other assets                         (1,895)          73     (8,108)
          Net cash used in operating
           activities                      (12,962)    (12,753)    (23,306)

INVESTING ACTIVITIES
   Capital expenditures                     (1,937)     (2,510)     (3,565)
   Proceeds from sale of excess assets       10,174      39,685      18,919
   Proceeds from sale of affiliate stock          -       8,739           -
   Proceeds from sale of marketable
    securities                                1,038           -       7,975
   Purchase of marketable securities              -       (538)       (970)
   Other                                          -         462           -
       Net cash from investing activities     9,275      45,838      22,359

FINANCING ACTIVITIES
   Proceeds from issuance of
    long-term debt                           13,000      15,000     120,000
   Proceeds from issuance of notes payable    2,963           -           -
   Principal repayments of long-term debt  (12,177)    (89,748)   (134,161)
   Proceeds from issuance of common stock         -      41,040           -
   Other                                       (38)       (660)     (1,135)

     Net Cash from (used in)
      financing activities                    3,748    (34,368)    (15,296)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
  CASH EQUIVALENTS                             (23)       (186)        (89)

NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                38     (1,469)    (16,332)

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                          2,985       4,454      20,786

CASH AND CASH EQUIVALENTS AT END OF PERIOD   $3,023      $2,985      $4,454

The accompanying notes are an integral part of these statements.

FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1992

(dollar amounts in thousands, except per share data)

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The Consolidated Financial Statements include the accounts of Fruehauf Trailer Corporation and its majority-owned subsidiaries ("Fruehauf" or the "Company"). The Company was incorporated in 1989 for the purpose of acquiring certain assets and assuming certain liabilities of Fruehauf Corporation (the "Fruehauf Acquisition"). The Company is consolidated with Terex Corporation ("Terex") for financial reporting purposes.

All intercompany balances, transactions and profits have been eliminated. The equity method is used to account for investments in affiliates in which Fruehauf has an ownership interest between 20% and 50%. The cost method is used to account for investments in affiliates in which Fruehauf has an ownership interest of less than 20%.

Cash and Cash Equivalents: The Company considers all highly liquid marketable securities with original maturities of 30 days or less to be cash equivalents.

Marketable Securities: Marketable securities include investments in equity securities, commercial paper, notes and bonds. Marketable equity securities and other marketable securities are carried at the lower of cost or market value. The Company held no marketable equity securities at December 31, 1992 and 1991. Net realized gains and losses on security transactions are determined on a specific identification basis.

Inventories: Inventories are stated at the lower of cost or market. Substantially all inventories are valued on the last-in, first-out ("LIFO") method.

Debt Issuance Costs: Costs incurred upon the issuance of debt are deferred in the Consolidated Balance Sheet and amortized over the life of the underlying debt.

Property, Plant and Equipment: Property, plant and equipment are stated at cost. Plant and equipment are depreciated over the estimated useful lives of the assets under the straight-line method of depreciation for financial reporting purposes and both straight-line and other methods for tax purposes. Expenditures for maintenance and repairs not expected to extend the life of an asset beyond its normal useful life are expensed. The cost of assets and the related amounts of accumulated depreciation are eliminated from the accounts when the assets are retired or sold. Certain property, plant and equipment held for sale are included in Assets Held for Sale (see Note F - "Assets and Businesses Held For Sale"), and are carried at the lower of cost or net realizable value.

Revenue Recognition: Revenues and costs are generally recognized as the related products are shipped or picked-up. New trailers may be invoiced prior to the time customers take physical possession. Revenue is recognized in such cases only when the customer has a fixed commitment to purchase the units, the units have been completed, tested and made available to the customer for pickup or delivery, and the customer has requested that the Company hold the units for pickup or delivery at a time (generally within two weeks) specified by the customer at the time the customer is notified that the unit is completed or as specified in the sales agreement. In such cases, the units are invoiced under the Company's customary billing terms, title to the units and risk of ownership passes to the customer upon invoicing, the units are segregated from the Company's inventory and identified as belonging to the customer and the Company has no further obligation under the order.

Accrued Warranties: The Consolidated Financial Statements reflect accruals for potential product liability and warranty claims based on the Company's claim experience.

Foreign Currency Translation: Foreign currency translation adjustments are generally excluded from the Consolidated Statement of Income and are included in Foreign Currency Translation Adjustment in the Consolidated Balance Sheet. Gains or losses resulting from foreign currency transactions are included in Other Income (Expense).

Research and Development Costs: Research and development costs are expensed as incurred. Such costs incurred in the development of new products or significant improvements to existing products totalled approximately $1,827, $1,422 and $2,078 during 1992, 1991 and 1990, respectively.

Income Taxes: The Company accounts for income taxes in accordance with Statement of Financial Accounting Standard ("SFAS") No. 96, "Accounting For Income Taxes" (see Note I - "Income Taxes").

Net Income (Loss) Per Common Share: Net income (loss) per share is based on the weighted average number of common and common equivalent shares outstanding during the year. The dilutive effect of common stock equivalents (if applicable) is calculated using the treasury stock method.

Environmental Policies: Environmental expenditures that relate to current operations are either expensed or capitalized. Expenditures relating to conditions caused by past operations that do not contribute to current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or remedial actions are probable, and the costs can be reasonably estimated. Generally, the timing of these accruals coincides with completion of a feasibility study or the Company's commitment to a formal plan of action.

Reclassifications: Certain amounts shown for 1990 and 1991 have been reclassified to conform to the 1992 presentation. As discussed in Note F - "Assets and Businesses Held for Sale", the Company ceased all operations at Jacksonville Shipyards, Inc. and Coast Engineering & Manufacturing Company in 1992 and 1991, respectively. The remaining assets and liabilities of these operations are included in the Consolidated Balance Sheet in the respective captions.

Recent Pronouncements: In December 1990, the Financial Accounting Standards Board ("FASB") issued SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions". This statement requires accrual of postretirement benefits (such as health care benefits) during the years an employee provides services. The Company does not anticipate that its planned January 1, 1993 implementation of this pronouncement will have a significant effect on operating results or financial position. For further information, refer to Note K - "Retirement Plans."

In February, 1992, the FASB issued SFAS No. 109, "Accounting for Income Taxes" to supersede SFAS No. 96, "Accounting for Income Taxes". The Company has reflected its deferred taxes using the principles of SFAS No. 96. The new pronouncement retains the basic concepts of SFAS No. 96, but generally simplifies its application. Based upon preliminary analysis, the Company does not expect the future implementation of this pronouncement to have a significant effect on its operating results or financial position. The Company intends to adopt this Standard on January 1, 1993.

In November, 1992 the FASB issued SFAS No. 112 "Employers' Accounting for Postemployment Benefits". This pronouncement establishes accounting and reporting for the estimated cost of benefits provided by an employer to former or inactive employees after employment but before retirement. For the most part, the Company already accounts for such benefits on an accrual basis. Therefore, the impact of adoption is not anticipated to have a material effect on the Company's financial position or results of operations.

NOTE B - INITIAL PUBLIC OFFERING AND RECAPITALIZATION

On July 8, 1991, the Company (formerly wholly-owned by Terex Holdings Corporation ("Terex Holdings"), in turn a wholly-owned subsidiary of Terex) completed an initial public offering ("IPO") of 4,000,000 shares of common stock at a price of $11.00 per share. Fruehauf common stock is traded on the New York Stock Exchange under the symbol "FTC".

To prepare the Company for public ownership, Fruehauf's certificate of incorporation was amended to increase the authorized number of shares of common stock to 20,000,000 and to reduce the par value per share from $1.00 to $0.01.

The Terex Holdings Warrant (see Note J - "Stockholders' Investment") issued in the Fruehauf Acquisition to KCS Industries, Inc. ("KCS") was exercised in full by KCS for 245,000 shares of Terex Holdings common stock. KCS applied the $7,497 outstanding principal balance of its initial Series A Note in payment of the exercise price of the Terex Holdings Warrant. Immediately thereafter, Terex Holdings was merged (the "Merger") into Fruehauf, with Fruehauf continuing as the surviving corporation. In the Merger, (i) each outstanding share of Terex Holdings common stock was converted into nine shares of Fruehauf common stock, (ii) Series A Notes in the aggregate principal amount of $7,497 held by The Airlie Group L.P. and Trailer Partners (collectively "Airlie") were exchanged for notes from the Company (the "Fruehauf Notes") in the same principal amount as the Series A Notes surrendered by Airlie, and the Terex Holdings Warrant issued to Airlie in the Fruehauf Acquisition was also exchanged for a new warrant (the "Fruehauf Warrant") to purchase up to an aggregate 2,205,000 shares of the Company's common stock at an exercise price of $3.40 per share, and (iii) the Preferred Stock of the Company, which was previously held by Terex Holdings, was canceled (the foregoing transactions being collectively referred to as the "Recapitalization"). Terex, KCS, and Airlie then exchanged the $15,000 of Series B Notes purchased by them in the Fruehauf Acquisition for 1,363,637 shares of the Company's common stock.

The net proceeds received by the Company in connection with the IPO were $41,040. Of this amount, approximately $25,673 was used to reduce Fruehauf's outstanding borrowings under its primary credit facility and approximately $13,827 was used to pay the remaining balance and accrued interest on the Series A and Series B Notes. After the application of the net proceeds of the IPO and the completion of the Recapitalization, the Company's debt was reduced by $61,998.

Unaudited pro forma consolidated results of operations for 1991 and 1990, as though the Company completed the IPO, Merger, Recapitalization, and related transactions on January 1, 1990, is as follows:

                                                 Year ended December 31,
                                                   1991           1990

Net sales                                       $512,689       $589,452
Income (loss) from operations                   (23,153)         19,274

Net income (loss) before extraordinary loss     (23,154)         11,337
Extraordinary loss on retirement of debt               -        (2,192)
Net income (loss)                               (23,154)          9,145

Net income (loss) per common share
 before extraordinary loss                       $(1.90)         $0.85
Extraordinary loss per common share                    -         (0.15)
Net income (loss) per common share               $(1.90)         $0.70

These unaudited pro forma consolidated results have been prepared pursuant to Article 11 of the SEC Regulation S-X and are not necessarily representative of the actual operating results or financial position the Company would have achieved had the events reflected therein occurred at the dates assumed. These financial statements are not representative of the future results or financial position that the Company will record. These unaudited pro forma consolidated results should be read in conjunction with the audited historical Consolidated Financial Statements of the Company and the notes thereto.

NOTE C - INVESTMENTS IN AFFILIATE COMPANIES

The Company has less than 50% equity investments in three foreign corporations engaged in the design, manufacture and marketing of truck trailers.

The Company's investment in Societe Europeenne de Semi-Remorques, S.A. ("SESR") is the largest equity investment with a carrying value of $23,296 and $30,072 at December 31, 1992 and 1991, respectively. SESR is Europe's largest trailer manufacturer. The book value of the Company's investment in SESR exceeds the Company's proportionate share of SESR's underlying equity. The related excess purchase price of $7,640 and $8,010 at December 31, 1992 and 1991, respectively is being amortized on a straight-line basis over 20 years.

During 1991 the Company sold a portion of its investment in SESR, which was in turn sold to SESR, thereby reducing the Company's ownership from approximately one-third to approximately 23%. In addition to the $8,739 of cash received upon the sale of the SESR shares, 1) certain litigation between the Company and SESR was settled, 2) Company shares of SESR and related accumulated dividends previously held in escrow as a result of the litigation were released to the Company, 3) Company representatives to the SESR Board of Directors were reinstated and 4) the expiring royalty and trademark and license agreements between the Company and SESR were renegotiated. As a net result of these transactions, the Company recorded a loss of $3,312.

The carrying value of the Company's other affiliate accounted for under the equity method, Henred Fruehauf Trailers Pty. Ltd., is $7,933 at December 31, 1992 and $7,557 at December 31, 1991. The carrying value of the Company's affiliate accounted for under the cost method, Nippon Fruehauf Company, Ltd., is $2,516 at both December 31, 1992 and 1991.

Summarized financial data (100% basis) for the Company's two affiliates accounted for under the equity method is as follows:

                                                 Years ended December 31,
                                                  1992      1991    1990
Net sales                                     $915,622  $822,045  $831,372
Gross profit                                   129,473   133,190   139,600
Net income (loss)                             (22,674)    15,238    24,594
Current assets                                 347,236   424,405   401,483
Noncurrent assets                              193,417   212,428   182,118
Current liabilities                            249,133   283,690   246,141
Noncurrent liabilities & deferred taxes        208,603   190,013   169,665

The Company's share of the net income (loss) of affiliate companies, accounted for using the equity method, was ($5,714), $4,209 and $7,480 for the years ended December 31, 1992, 1991 and 1990, respectively. Dividends received from such companies totalled $1,148 in 1992, $1,681 in 1991 and $732 in 1990. Dividends received from affiliates that are accounted for using the equity method are applied as a reduction of the carrying value of the investments.

The Company received dividends from its affiliate accounted for using the cost method totalling $143, $130 and $146 in 1992, 1991 and 1990, respectively. Such dividends are included in Other Income (expense) in the Consolidated Statement of Income.

Trailer components sold by the Company to its less than 50% equity affiliates totalled $2,808, $5,688 and $6,761 in 1992, 1991 and 1990, respectively. Such sales were made on the same terms and conditions as with other customers. In addition, the Company received amounts pursuant to royalty and trademark and license agreements from its less than 50% owned equity affiliates totalling $2,557, $2,518 and $4,221 in 1992, 1991 and 1990, respectively. Amounts receivable from such affiliates at December 31, 1992, 1991 and 1990 totalled $1,384, $2,040 and $2,352, respectively.

NOTE D - RESTRUCTURING COSTS

The Company recorded a $15,825 charge in 1991 to accrue for a restructuring program designed to improve profitability. The restructuring provision represented the estimated cost of restructuring the Company's distribution system and consolidating certain of the Company's manufacturing operations.

During 1992, the Company recorded additional restructuring costs of $15,500 representing revisions of the estimates relating to the restructuring plan in 1991. The cost of restructuring the Company's distribution system by converting company-owned sales and service branches to independent dealers exceeded original estimates. Additionally, due to continuing poor economic and commercial real estate market conditions, excess asset sales have not occurred as rapidly as expected and the proceeds have been lower than anticipated. As a result, the Company recorded the 1992 restructuring provision to absorb such additional costs and valuation adjustments. The idled facilities are included in the Consolidated Balance Sheet in Assets Held for Sale, and are carried on a lower of cost or net realizable value basis, including costs through the date of expected disposition.

The components of the restructuring costs are as follows:

                                   Year ended December 31,
                                        1992      1991

Branch conversion costs               $7,800    $5,700
Plant closing costs                        -       900
Excess asset valuation adjustment      5,100     5,500
Idle facility holding costs            2,600     3,725
   Total                             $15,500   $15,825

NOTE E - INVENTORIES

Inventories consist of the following:

                                              December 31,
                                             1992      1991

Used trailers                             $ 4,385   $18,520
New trailers                               12,993    25,055
Work-in-process and finished parts         17,366    25,421
Raw materials and supplies                 18,013    24,335
  Gross inventories                        52,757    93,331
Excess of LIFO inventory value over
 FIFO costs                                 2,136     5,239
  Net inventories                         $54,893   $98,570

NOTE F - ASSETS AND BUSINESSES HELD FOR SALE

The Company is holding for sale certain excess real estate, facilities and other assets, as well as the Decatur Business.

The Decatur Business consists of the Company's wholly-owned aluminum extrusion operation and a 50% equity interest in Decatur Aluminum Company, a corporation engaged in the production of aluminum sheeting. The Decatur Business supplies aluminum sheeting and extrusions to the Company's trailer manufacturing plants. The Company has previously announced its intention to divest the Decatur Business. The Decatur Business is included in the Consolidated Balance Sheet for $3,578 and ($1,077) at December 31, 1992 and 1991, respectively. Changes in the carrying value of the Decatur Business result from the net cash used in (generated from) the Decatur Business. The operating results of the Decatur Business are not included in the Consolidated Statement of Income. The Decatur Business experienced losses of $1,500, $900 and $800 in 1992, 1991 and 1990, respectively, which were excluded from the Consolidated Statement of Income. Reserves were established at the Fruehauf Acquisition to absorb operating results until the Decatur Business is divested. Revenues of the Decatur Business (on a 100% basis) were $62,538 in 1992, $55,055 in 1991 and $57,204 in 1990. The majority of these revenues were intercompany sales which would have been eliminated in consolidation. The Decatur Business' total assets were approximately $12,746 at December 31, 1992.

The Company announced its intentions to divest Jacksonville Shipyards, Inc. ("Jacksonville"), its wholly-owned ship repair subsidiary at the time of the Fruehauf Acquisition in 1989. Jacksonville's primary floating drydocks were sold in September 1991 for $28,750, and the proceeds were applied against the repayment of Jacksonville's $29,600 of Industrial Development Revenue Bonds. Substantially all remaining operations at Jacksonville ceased in 1992, and a program was implemented to liquidate the remaining assets, consisting primarily of real estate and receivables. The Company recorded a $11,551 charge in 1992 relating to the closure, liquidation and future costs of Jacksonville.

The components of the adjustment to the net realizable value of Jacksonville are summarized as follows:

Revision of pre-disposition operating
 results and shutdown                         $ 5.3
Environmental obligations                       2.4
Employee related liabilities                    1.8
Revision of net realizable value
 of fixed assets                                1.1
Other                                           1.0
                                              $11.6

The results of Jacksonville are not included in the Consolidated Statement of Income, other than the $11,551 charge recorded in 1992. Jacksonville revenues were $16,700 in 1992, $40,700 in 1991 and $31,400 in 1990. Jacksonville experienced losses of $1,200, $3,400 and $2,500 in 1992, 1991 and 1990, respectively, which were excluded from the Consolidated Statement of Income. Jacksonville's assets and liabilities are included in the Consolidated Balance Sheet in the respective captions.

In December of 1991, the Company sold substantially all of the operating assets of Coast Engineering & Manufacturing Company ("CEMCO") for $6,150 and recorded a gain of $6,599. CEMCO had been in the business of manufacturing cranes. The proceeds from this sale were used to reduce the Company's outstanding indebtedness. The remaining assets and liabilities of CEMCO, consisting primarily of receivables and warranties, are included in the Consolidated Balance Sheet. The operating results of CEMCO are not included in the Consolidated Statement of Income as reserves were established at acquisition to absorb such operating losses.

In addition to the Decatur Business and Jacksonville's real estate, the Company holds for sale other idle facilities. As a result of manufacturing and distribution restructuring programs, certain facilities were added to Assets Held for Sale in 1991 and 1992. The Company is actively marketing all excess properties, and in certain instances, is leasing them in order to generate funds to help cover holding costs. These non-operating properties are included in the Consolidated Balance Sheet in Assets Held for Sale, and are carried on a lower of cost or market basis. Adequate reserves have been established to absorb holding costs until disposition. As previously discussed in Note D - "Restructuring Costs", the Company recorded writedowns on certain assets held for sale and provisions for related holding costs in 1991 and 1992.

Excluding the proceeds generated from the sale of CEMCO's operating assets and Jacksonville's floating drydocks, the Company generated proceeds from the sale of excess assets of $10,174, $4,785 and $18,919 in the years ended December 31, 1992, 1991 and 1990, respectively. All proceeds generated from the sale of excess assets are required to be applied against the outstanding indebtedness under the Company's Credit Agreement (See Note G - "Long-term Debt").

The U.S. Environmental Protection Agency (the "EPA") placed a lien in excess of $15,000 on the Company's former manufacturing facility in Harrisburg, Pennsylvania. The facility is included in Assets Held for Sale for $8,250 at December 31, 1992. A small portion of the excess land at this facility contains a landfill established by the Army Air Corp when the property was part of a former military base. The Department of Defense has acknowledged responsibility for the landfill and has appropriated funds for remedial actions. The Company did not operate or contribute any waste to the landfill. The Company believes it may have an "innocent landowner" defense to any claim for remedial action. The Company has repeatedly requested the EPA to remove the lien on this property, which the Company believes was filed improperly without a hearing or an opportunity for the Company to contest it. To date, the Company has had no success in obtaining a lien release. Without a release, the Company will be unable to sell the facility and use the proceeds to reduce outstanding indebtedness. However, the Company is leasing out a portion of this facility on a short-term basis to enhance cash flow. The Company believes it will be successful in obtaining a release for the lien, although no assurances can be given.

NOTE G - LONG-TERM DEBT

Long-term debt is summarized as follows:

                                                         December 31,
                                                     1992           1991
Secured bank credit agreement bearing interest
  at prime plus 2.25% in 1993, prime plus 2.0%
  in 1992, prime plus 1.5% prior thereto,
  due June, 1993                                   $86,228        $85,128

Mortgage note bearing interest at 9.625%
  collateralized by an idle plant,
  due September, 2001                                4,102          4,379

Unsecured promissory notes held by a related party
  bearing interest at 14% in 1992 and 12% in 1991,
  due March, 1996                                    7,497          7,497

Other                                                3,262              -

    Total long-term debt                           101,089         97,004

Less: Current portion of long-term debt to
  related party                                      7,497              -

Less: Current portion of long-term debt
 to third party                                     89,794         12,177
    Long-term debt, less current portion           $ 3,798        $84,827

The secured bank credit agreement (the "Credit Agreement") is secured by substantially all of the assets of the Company. The Credit Agreement provides for both a term loan and a revolving credit facility. Amounts outstanding under the term loan were $58,228 and $70,128 at December 31, 1992 and 1991, respectively. As of December 31, 1992, the revolving credit facility was limited to the lesser of $45,000 or the available borrowing base, which absent the covenant violations discussed below, could have been used in any combination of cash advances or bank letters of credit. At December 31, 1991, the revolving credit facility was limited to the lesser of $45,000 or the available borrowing base, and the maximum cash advance availability was $20,000. The available borrowing base is calculated by applying prescribed advance ratios against eligible receivable and inventory balances, in accordance with the terms of the Credit Agreement. Outstanding cash advances totalled $28,000 and $15,000 at December 31, 1992 and December 31, 1991, respectively. Outstanding letters of credit totalled $11,322 at December 31, 1992 and $20,520 at December 31, 1991.

All proceeds from the sale of collateralized assets are to be applied against outstanding Credit Agreement indebtedness, including proceeds from the sale of the properties included in Assets Held For Sale on the Consolidated Balance Sheet. As a result, the Company cannot sell excess properties for the purpose of generating working capital.

A commitment fee of 0.5% per annum is payable on any unused portion of the revolving credit facility. Total unused credit under the revolving credit facility was zero at December 31, 1992 and $9,480 at December 31, 1991. The actual borrowing rate under the Credit Agreement was 8.0% at both December 31, 1992 and 1991.

The Credit Agreement restricts the payment of dividends and requires, among other things, that the Company maintain certain levels of tangible net worth and working capital, meet certain current and debt to equity ratios, and achieve certain levels of operating performance and interest coverage. While the Company has remained current in all of its payment obligations under the Credit Agreement through December 31, 1992, it was not in compliance with certain financial covenants at December 31, 1992 or 1991.

As described in Note Q - "Plan of Restructuring and Refinancing", the Company and its lenders amended the terms of the Credit Agreement on March 15, 1993. The amendment provides an additional $6.6 million of borrowing availability to the Company, waives past covenant violations, increases the interest rate to prime plus 2.25% effective January 1, 1993 and changes the maturity of the debt from December 31, 1995 to June 30, 1993. The Company has included all outstanding loans under the Credit Agreement in current liabilities in the Consolidated Balance Sheet to reflect the new maturity date. The Company is attempting to secure alternative financing which would provide incremental borrowing and enable it to extinguish all amounts owed under the Credit Agreement. The Company wrote off the remaining $3,942 of capitalized debt issuance costs relating to the Credit Agreement in the fourth quarter of 1992.

The mortgage collateralized by the idle plant (the "Fresno Mortgage") was assumed in the Fruehauf Acquisition. The Fresno Mortgage is collateralized by the Company's Fresno, California manufacturing plant, which was closed in early 1992. The interest rate on the Fresno Mortgage is 9.625%, and combined principal and interest payments of $345 are payable semiannually until September, 2001. The Company is actively attempting to sell the former Fresno manufacturing plant, and is required to extinguish the Fresno Mortgage with such proceeds.

As discussed in Note B - "Initial Public Offering and Recapitalization," the Company extinguished all of its then-outstanding Series B Promissory Notes and all but $7,497 of the Series A Promissory Notes in 1991 in the Recapitalization and with funds generated from the IPO. The $7,497 of Series A Notes not extinguished were held by Airlie and were exchanged for Fruehauf Notes totalling $7,497. The Fruehauf Notes initially bore interest at the rate of 12% per annum, and matured July 1, 1992. However, the Company extended the maturity to March 31, 1996 in exchange for a $56 fee and an increase in the annual interest rate from 12% to 14%.

The Fruehauf Notes are subordinated to the Credit Agreement. Payment of the Fruehauf Notes can only be accelerated in the event that the indebtedness under the Credit Agreement has been accelerated or extinguished. The Fruehauf Notes have been classified as a current liability at December 31, 1992 as a result of the change in the maturity of the obligations under the Credit Agreement to June 30, 1993. In accordance with the terms of the Credit Agreement, the Company is not allowed to make interest payments on the Fruehauf Notes while in violation of its covenants under the Credit Agreement. Therefore, the Company did not make the scheduled semiannual interest payment on December 31, 1992 on the Fruehauf Notes. The interest accrued on such debt at December 31, 1992 totalled $528, and is included in Other Current Liabilities in the Consolidated Balance Sheet.

The Company's Mexican subsidiary borrowed $2,963 in 1992. Such short term notes payable are secured by certain of the subsidiary's assets.

The following table sets forth the scheduled annual maturities of the long-term debt outstanding at December 31, 1992, after giving effect to the Credit Agreement modifications discussed above.

1993                             $ 89,794
1994                                  334
1995                                  367
1996                                7,900
1997                                  442
Thereafter                          2,252
     Total                       $101,089

Amounts shown are exclusive of minimum lease payments disclosed in Note H - "Operating Lease Commitments".

The Company paid $10,166, $11,353 and $23,804 of interest in 1992, 1991 and 1990, respectively.

The Company believes that the carrying value of its borrowings approximates fair market value. Such fair values were estimated by discounting future cash flows using rates currently available for debt of similar terms and remaining maturities.

In September, 1990, the Company entered into the Credit Agreement and refinanced the majority of its then-outstanding long-term debt. A one-time extraordinary loss of $2,192, or $(0.47) per share, was recorded to write-off the unamortized debt issuance costs relating to the refinanced debt. The income tax provision (benefit) on the extraordinary loss was zero. See Note P
- - "Restatement of Prior Year Results" for further information.

NOTE H - OPERATING LEASE COMMITMENTS

The Company leases certain facilities, vehicles, machinery and equipment with varying terms. Under most arrangements, the Company pays the property taxes, insurance, maintenance and expenses related to the leased property. Fruehauf has no capital leases.

Future obligations on non-cancelable operating leases in effect at December 31, 1992 are:

1993                                         $ 4,975
1994                                           3,498
1995                                           3,188
1996                                           2,246
1997                                           1,392
Thereafter                                     9,627

     Total                                   $24,926

The majority of the Company's operating leases provide the Company with the option to renew the leases for varying periods after the initial lease terms. These renewal options enable the Company to renew the leases based upon the fair rental values at the date of expiration of the initial lease.

Total rental expense under operating leases was $3,930, $4,163 and $2,802 for the years ended December 31, 1992, 1991 and 1990, respectively.

NOTE I - INCOME TAXES

The components of Income (loss) Before Income Taxes are as follows:

                                                 Year ended December 31,
                                                 1992      1991      1990

United States                               $(70,502) $(29,336)    $(921)
Foreign                                         2,192     1,326     1,916
Income (loss) before income taxes           $(68,310) $(28,010)      $995

Foreign income tax provisions totalled $950 in 1992, $866 in 1991 and $879 in 1990, the majority of which were taxes withheld on royalty and dividend payments to the Company. In 1990, the Company had a deferred federal tax provision of $100. In 1992, the Company recorded a $4,100 income tax benefit relating to the reversal of federal deferred tax liabilities no longer required due to continued losses.

The Company's Provision (benefit) for Income Taxes is different from the amount which would be provided by applying the statutory federal income tax rate to the Company's Income (loss) Before Income Taxes. The reasons for the difference are summarized below:

                                                 Year ended December 31,
                                           1992           1991          1990
                                        %      $       %      $       %      $
Statutory federal income tax rate     (34)$(23,225)  (34)$(9,523)     34   $338
Future potential benefit
 from current NOL                       29   19,870    36   9,974     -       -
Foreign tax differential
 on income/losses of
 foreign subsidiaries                  (1)    (516)   (1)   (301)   (56)  (561)
Other                                    1      721     2     716    120  1,202
Provision (benefit) for
 income taxes                         (5%) $(3,150)   3%     $866   98%    $979

Deferred tax assets and liabilities result from differences in the basis of assets and liabilities for tax and financial statement purposes. The tax effects of the basis differences are summarized below for major balance sheet captions:

                                                       December 31,
                                                  1992     1991      1990

Net inventories                               $(9,030)$(19,528)  $(24,302)
Assets held for sale                           (6,475)  (6,456)    (6,456)
Fixed assets                                  (12,766) (18,388)   (20,068)
Other assets and deferred charges                  600  (1,313)    (5,598)
Investments in affiliate companies            (11,740)  (8,403)   (11,041)
Other current liabilities & long-term
  liabilities                                   36,632   41,980     62,298
All other items                                      -    1,151    (1,036)
Benefit from NOL carryforward                    2,779    6,857      2,103
  Total deferred tax liability                      $0 $(4,100)   $(4,100)

At December 31, 1992, the Company had domestic federal tax basis net operating loss carryforwards available to offset future taxable income of $148,466. The Company's domestic federal tax basis net operating loss carryforwards exceed the book basis net operating loss carryforwards by approximately $50,323. In accordance with SFAS 96, "Accounting for Income Taxes", the tax benefits of the unused loss and tax credit carryforwards have not been recognized in the Consolidated Financial Statements, except by reducing the deferred taxes, as the realization of these benefits is dependent on future taxable income.

The tax basis net operating loss carryforwards expire as follows:

                              Tax Basis Net
                              Operating Loss
                                  Carryforwards
2004                              $3,641
2005                              70,011
2006                              33,809
2007                              41,005
    Total                       $148,466

The Company also has various state net operating loss carryforwards expiring at various dates through 2007 available to reduce future state taxable income and income taxes. In addition, one of the Company's foreign subsidiaries has approximately $332 of tax basis loss carryforwards, expiring in 1995, which may be available to offset future foreign taxable income.

Provision has not been made for U.S. or additional foreign taxes on undistributed earnings of international subsidiaries as those earnings have been, and will continue to be, permanently reinvested. No U.S. income taxes would be payable in the event of distribution of such earnings. However, on remittance, certain foreign countries impose withholding taxes that are then available for use as credits against U.S. tax liabilities, if any, subject to certain limitations. The amount of withholding tax that would be payable on remittance of the entire amount of undistributed earnings would approximate $689.

The Company made income tax payments of $721, $716 and $788 in 1992, 1991 and 1990, respectively.

NOTE J - STOCKHOLDERS' INVESTMENT

Stock Issuance: The Company was capitalized in 1989 upon the issuance of 510,000 shares of Terex Holdings Common Stock for $10,000. On June 14, 1991 the authorized number of shares of Fruehauf Common Stock was increased to 20,000,000. Each share of Terex Holdings Common Stock outstanding was converted into nine shares of Fruehauf Common Stock on July 8, 1991 in conjunction with the Initial Public Offering and Recapitalization (see Note B - "Initial Public Offering and Recapitalization"). The per share calculation described below, as well as the issued and outstanding shares indicated on the Consolidated Balance Sheet, take the conversion into account.

The Company completed the IPO by issuing 4,000,000 shares of Fruehauf Common Stock at a price of $11 per share. The Company's common stock is traded on the New York Stock Exchange under the symbol "FTC" (see Note B - "Initial Public Offering and Recapitalization").

Stock Warrants: The Company issued two warrants (the "Terex Holdings Warrants") to related parties in conjunction with the issuance of the Series A Notes in 1989. As discussed in Note B - "Initial Public Offering and Recapitalization," one Terex Holdings Warrant was exercised in 1991, and the other was exchanged for a Fruehauf Warrant in 1991. The Fruehauf Warrant enables the holder to purchase up to an aggregate 2,205,000 shares of Fruehauf Common Stock at an exercise price of $3.40 per share. The Fruehauf Warrant was not exercised as of December 31, 1992.

Dividends: As discussed in Note G - "Long-Term Debt", the Credit Agreement contains restrictions as to the payment of cash dividends. As a result of these restrictions, no dividends could have been paid based on the Company's financial position as of December 31, 1990, 1991 or 1992.

Net Income (Loss) Per Common and Common Equivalent Share: Net income (loss) per common and common equivalent share was computed by dividing the net loss by the average number of dilutive shares of common stock and common stock equivalents outstanding during the period after the conversion described above.

Stock Option Plan: The Board of Directors has approved a stock option plan for certain key employees and the directors of the Company. The number of shares of Common Stock to be made available under the proposed stock option plan total 200,000 shares for key employees and 50,000 for directors. The proposed stock option plan is subject to stockholder approval.

Preferred Stock: The Company has filed a consent solicitation with the Securities and Exchange Commission to authorize the issuance of up to 2,500,000 shares of preferred stock. A portion of these shares would be issued to Terex in exchange for $11,587 of the long term payable due Terex. The proposed transaction would require ratification by the Company's stockholders prior to completion. The consent solicitation was pending at December 31, 1992. The completion of this transaction is uncertain.

NOTE K - RETIREMENT PLANS

Prior to 1990, Fruehauf's trailer operations had multiple defined benefit pension plans covering most domestic employees. During 1990, Fruehauf's salaried, nonunion hourly and union hourly plans were merged into a single plan. A separate plan exists for Jacksonville's hourly employees. Benefits for the salaried employees are based primarily on years of service and employees' qualifying compensation during the final years of employment. The benefits for hourly employees are based primarily on years of service and a fixed dollar amount per year of service.

Effective October 1, 1990, the Company amended the pension benefits for certain employees. The plan amendment increased the projected benefit obligation by approximately $2.7 million. The impact on pension expense was not material.

It is the Company's policy to fund its pension plans based on the minimum requirements of the Employee Retirement Income Security Act of 1974 ("ERISA").

Plan assets consist primarily of common stocks, bonds and short-term cash equivalent funds. Assets of Fruehauf's merged plan and the Jacksonville Hourly plan were combined with the assets of Terex's pension plans into a master trust (the "Master Trust") effective January 1, 1992.

The following table summarizes the components of pension expense:

                                                 Year ended December 31,
                                                 1992      1991      1990

Service cost for benefits earned
 during the period                                $962      $893   $1,507
Interest cost on projected benefit obligation    5,109     5,025    4,540
Actual (return) loss on plan assets           (13,098)  (10,315)    5,945
Net amortization and deferral                    8,357     5,400 (11,598)
Curtailment loss                                     -        17        -
  Net pension expense                           $1,330    $1,020     $394

The expected long-term rate of return on plan assets was 9.0% for the periods presented. The discount rate assumption was 8.25% for 1992, 8.5% for 1991 and 9.0% for 1990. Consistent with the provisions of the plan, the actuarial assumption for the rate of compensation increase was 5.5% for plan years ending on or prior to December 31, 1991 and zero thereafter.

The following table sets forth the plans' funded status and amounts recognized in the Consolidated Balance Sheet:

                                               December 31,
                                            1992           1991
Actuarial present value of:
  Vested benefits                        $72,226         $69,587

  Accumulated benefits                   $72,705         $70,705

  Projected benefits                     $72,705         $70,705
Fair value of plan assets                 81,795          73,744
Plan assets in excess of
 projected benefit obligation              9,090           3,039
Unrecognized net loss from past
 experience different than assumed         3,816          11,756
Unrecognized prior service cost          (5,111)         (5,691)
     Prepaid pension cost                 $7,795          $9,104

The Master Trust is a participant in the Credit Agreement, and also has investments in Terex securities. The rights of the Master Trust are equivalent to those of the other lenders and investors. Included in the fair value of the Company's plan assets at December 31, 1992 and December 31, 1991 are approximately $6,445 and $2,365 of such investments.

In addition to providing pension benefits, the Company provides health care benefits for certain retired employees. Certain domestic union employees may become eligible for those benefits if they reach the required years of service and retirement age while working for the Company. Certain of the Company's former domestic salaried employees who retired prior to December 31, 1990 receive company-provided health care benefits. Domestic salaried employees retiring after December 31, 1990 are not eligible for such benefits.

In December 1990, the Financial Accounting Standards Board ("FASB") issued SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions". This statement requires accrual of postretirement benefits (such as health care benefits) during the years an employee provides services. Reserves for past service costs of then-retired employees were established in the purchase price allocation for the Fruehauf Acquisition in 1989. The Company discontinued providing postretirement health benefits for salaried employees retiring after December 31, 1990, and such benefits have been eliminated for future retirees of certain hourly plans since the Fruehauf Acquisition. As a result, the Company has adequate reserves for such obligations at December 31, 1992. Accordingly, the Company does not anticipate the implementation of this pronouncement to have a significant effect on its operating results or financial position. The Company paid retiree health claims totalling $3,101 in 1992, $3,438 in 1991 and $3,161 during 1990.

The Company sponsors various tax deferred savings plans into which eligible employees may elect to contribute a portion of their compensation. The Company contributes to certain of these plans.

NOTE L - CONTINGENCIES & LITIGATION

The Company is contingently liable for a portion of the losses incurred on new trailer loans written by a finance company (the "Finance Company") to the Company's customers. In the event a customer defaults on a loan, the underlying trailers are repossessed by the Finance Company and sold. The Company absorbs 50% of the difference between the remaining loan balance and the proceeds from the sale of the trailer(s), up to an aggregate annual maximum of $750. The Finance Company's portfolio subject to this arrangement totalled $104,136 at December 31, 1992 and $129,520 at December 31, 1991. The average life of the loans in the portfolio is approximately 2 - 3 years. Total losses incurred by the Company under this arrangement were $750 in 1992, $708 in 1991 and $635 in 1990. Reserves have been recorded for potential losses.

The Company is obligated to reimburse the Finance Company for shortfalls in guaranteed residual values of certain leased trailers. All obligations under this arrangement are anticipated to cease prior to December 31, 1993. The Company's total payments to the Finance Company pursuant to these guarantees were $38 in 1992, $664 in 1991 and $1,135 in 1990, respectively. Reserves have been recorded for potential losses.

The Company is contingently liable to various customers and other finance companies as a guarantor of the residual values of certain trailers sold by the Company. The Company's loss exposure on such trailers is the difference between the fair market values of the trailers at a predetermined rate and predetermined values. The Company's contingent liability on such agreements totalled approximately $9,356 and $6,115 at December 31, 1992 and December 31, 1991, respectively. The Company has not experienced any losses under such guarantees in the three years ended December 31, 1992.

As part of the Fruehauf Acquisition, the Company assumed a Fruehauf Corporation guarantee of a customer's trailer loan. The outstanding loan balance was approximately $993 and $2,882 at December 31, 1992 and December 31, 1991, respectively. The loan is scheduled to be extinguished prior to December 31, 1993, at which time the guarantee will cease.

Fruehauf is a party to an agreement with the Finance Company in which the Finance Company purchases certain pools of customer receivables for cash, with recourse to the Company. Under the agreement, the Company acts as an agent for the Finance Company by performing recordkeeping and collection functions on the receivables sold. The outstanding principal balance on open account receivables purchased by the Finance Company totaled $4,300 at December 31, 1992. The Company's losses under this arrangement have been, and are expected to continue to be, immaterial.

As disclosed in Note G - "Long-term Debt," outstanding letters of credit totalled $11,322 and $20,520 at December 31, 1992 and December 31, 1991, respectively. The letters of credit generally serve as collateral for certain liabilities included in the Consolidated Balance Sheet.

The Company has facilities at numerous geographic locations, which are subject to a range of federal, state and local environmental laws and regulations. Compliance with these laws has, and will, require expenditures on a continuing basis. The Company has been identified as a "Potentially Responsible Party" at approximately 19 multi-party Superfund sites, and has also identified environmental exposures at approximately 21 other sites not designated as Superfund sites. The Company is currently participating in administrative or court proceedings involving a number of these sites. Many of the proceedings are at a preliminary stage, and the total cost of remediation, the timing and extent of remedial actions which may be required, and the amount of the Company's liability with respect to those sites cannot presently be estimated. When it is possible to make reasonable estimates of the Company's liability with respect to such matters, a provision is recorded. When it is possible to estimate a range of liability but management is unable to determine the amount within the range that is the best estimate, a provision is recorded for the minimum amount of the range. The Company's policy is to record liabilities for environmental exposures on a gross basis without consideration of possible recoveries from third parties. The Company is self-insured with respect to environmental exposures. The Company's reserves for Superfund sites and other environmental projects and contingencies totaled $12.3 million at December 31, 1992 relating to 7 Superfund sites and 20 other sites for which the Company has been able to make estimates. The amount of possible loss, if any, in excess of the amounts recorded cannot presently be estimated. If the amount of payments required in respect of these sites exceeds the Company's available cash resources, there could be a material adverse effect on the Company.

The Internal Revenue Service is currently in the early stages of examination of the Company's federal tax return for the period July 14, 1989 through December 31, 1989. In addition, SESR is currently under audit by France's taxing authorities for 1988, 1989 and 1990. The Company believes that its positions for issues raised in these audits are correct and that it would prevail if the taxing authorities would propose adjustments. In any event, management believes that the outcome of these examinations will not have a material impact on the consolidated financial statements because the Company has significant net operating loss carryovers. No accruals have been established for these contingencies.

In December 1992, a Class Action Complaint was filed purportedly on behalf of all persons who purchased Fruehauf common stock during the period June 28, 1991 through December 4, 1992 (the "Period") against the Company, Terex, certain of the Company's officers and directors, namely, Randolph W. Lenz, Marvin B. Rosenberg, Arthur E. Rowe, G. Chris Andersen, Raymond J. Dempsey and certain of the underwriters of the Company's initial public offering ("IPO"), namely, PaineWebber Incorporated, Alex Brown & Sons, Incorporated and Wertheim Schroeder & Co., Incorporated, in the United States District Court, Eastern Michigan, Southern Division, seeking unspecified compensatory and punitive damages. The complaint alleges, among other things, that in connection with the IPO, the defendants misrepresented the Company's liquidity and status of compliance with the Company's credit facilities at the time of the IPO. The Company believes that the claims are without merit and that it has valid defenses to the claims made. This action is at a very early stage and the ultimate resolution of the claim cannot be predicted with complete certainty. However, the Company believes that it will be successful in its defense of this action and that the ultimate resolution of this litigation will not have a material adverse effect on the Company.

The Company is involved in other various legal proceedings which have arisen in the normal course of its business. Most of these legal proceedings involve product liability claims for which the Company is principally self insured. Although the Company has established reserves for loss contingencies based on the Company's historical record of payments on product liability claims, the Company is at risk of being obligated to pay substantial damages to product liability claimants. Based on an evaluation of historical losses, it is the opinion of management that none of the product liability or other current proceedings alone or in the aggregate will have a material adverse effect on the Company.

NOTE M - RELATED PARTY TRANSACTIONS

The Chairman of the Board is the controlling shareholder of Terex, Fruehauf's parent company, and KCS, a corporation which provides legal, financial and management services to the Company and Terex under separate management contracts. Pursuant to certain restrictions in the Credit Agreement, the Company was prohibited from paying management fees to KCS in excess of $2,300 in 1992 and is prohibited from making any payments in 1993 until all indebtedness under the Credit Agreement is repaid. Payments to KCS for services rendered and out-of-pocket expenses amounted to $2,300 in 1992, $3,633 in 1991 and $3,322 in 1990. KCS and its shareholders own approximately 21.5% of Fruehauf's outstanding Common Stock.

See Note B - "Initial Public Offering and Recapitalization" for a description of transactions with KCS in the Recapitalization. Interest on the Series A and B Notes issued to KCS aggregated zero in 1992, $1,651 in 1991 and $2,746 in 1990.

KCS and the Company entered into an agreement (the "KCS Note") whereby KCS borrowed $1,000 on an unsecured basis from the Company during 1992. These funds were to be used by KCS as an advance in connection with the KCS-owned insurance company through which the Company would obtain coverage, as approved by the Company's Board of Directors. These funds were utilized by KCS, pending implementation of the insurance program, which is not yet complete. KCS borrowed an additional $622 from Fruehauf during 1992. The KCS obligations bear interest at prime. The entire $1,622 balance owed by KCS was repaid on January 25, 1993.

Terex directly owns approximately 42.2% of Fruehauf's outstanding Common Stock. See Note B - "Initial Public Offering and Recapitalization" for a description of transactions with Terex in the Recapitalization. Terex charged Fruehauf for management services totaling zero in 1992, $1,932 in 1991 and $2,500 in 1990. Terex also charged Fruehauf interest of zero in 1992, $1,612 in 1991 and $1,562 in 1990 on amounts owed Terex, including the $6.0 million Series B Note held by Terex. As of January 1, 1992, Terex no longer charges Fruehauf for management expenses and interest on amounts due Terex. However, Terex and Fruehauf continue to charge one another for payments made on each other's behalf in the normal course of business. The outstanding balance owed by Fruehauf to Terex was $14,890 at December 31, 1992 and $10,244 at December 31, 1991. As disclosed in Note J - "Stockholders' Investment", the Company filed a consent solicitation with the Securities and Exchange Commission in 1992, which contemplates converting $11,587 of the balance due Terex into preferred stock.

The Company's Board of Directors approved a program to consolidate the Company's parts warehousing and administration functions with Terex. This consolidation has not yet been fully implemented. In November, 1992, in contemplation of this agreement, Terex advanced $2,000 to Fruehauf.

On January 12, 1993, Terex and the Company announced that an investment banking firm had been retained to explore opportunities to maximize stockholder value. A member of the Company's Board of Directors is an executive with the investment banking firm. See Note Q - "Plan of Restructuring and Refinancing" for further information regarding this action.

At December 31, 1992, Airlie owned approximately 3.3% of Fruehauf's outstanding Common Stock. See Note B - "Initial Public Offering and Recapitalization" for a description of transactions with Airlie in the Recapitalization. Assuming Airlie exercised the Fruehauf Warrant it received in the Recapitalization, it would own approximately 18.2% of the Company's Common Stock. Interest on the Series A and B Notes and the Fruehauf Notes aggregated $975 in 1992, $2,092 in 1991 and $2,749 in 1990.

The Master Trust is a participant in the Credit Agreement, and also has investments in Terex securities. The rights of the Master Trust are equivalent to those of the other lenders and investors. See Note K - "Retirement Plans," for further information.
The Company rents a facility in Germany to SESR, as disclosed in Note O - "Facility Leased to Affiliate". Additionally, the Company sells trailer components to its equity investees and licensees, as further described in Note C - "Investments in Affiliate Companies."

NOTE N - INDUSTRY SEGMENT INFORMATION

The Company operates principally in the trailer manufacturing industry. Trailer operations consist primarily of the manufacture and sale of trailers and replacement parts. The Company also performs maintenance and repair work on trailers, and purchases and sells used trailers. With the exception of export parts sales and international license, trademark and royalty arrangements, substantially all of the trailer segment's business is conducted in North America.

Jacksonville and CEMCO (collectively, the "Maritime Business") were acquired in the Fruehauf Acquisition, at which time the Company announced its intention to divest such operations. Substantially all of the operating assets of CEMCO were sold in 1991. As a result of its inability to sell Jacksonville as a business, the Company ceased operations in 1992, and a program was implemented to liquidate the remaining assets, consisting primarily of the real estate and receivables. For more information, see Note F - "Assets and Businesses Held for Sale." The assets and liabilities of the Maritime Business are included in the Consolidated Balance Sheet. The operating results of the Maritime Business are not included in the Consolidated Statement of Income other than the $6,599 gain recognized in 1991 on the sale of CEMCO's operating assets and the $11,551 provision recorded in 1992 relating to Jacksonville liquidation costs.

Export sales from U.S. operations were $18,257, $18,576 and $12,818 for 1992, 1991 and 1990, respectively.

The Company is not dependent upon any single customer. No single customer accounted for more than 10% of consolidated net sales during 1992, 1991 or 1990.

NOTE O - FACILITY LEASED TO AFFILIATE

The Company owns a manufacturing facility in Germany that it leases to SESR, pursuant to a lease agreement assumed in the Fruehauf Acquisition. SESR has the option to purchase the facility from the Company at an amount approximating book value any time prior to December 31, 1997. The carrying value of this asset was $14,000 and $18,955 at December 31, 1992 and 1991, respectively. The facility is reported as "Facility Leased to Affiliate" in the Consolidated Balance Sheet. In 1992, the Company was refunded a $3,155 purchase deposit made on a property adjoining the facility leased to SESR. The deposit was acquired by the Company in the Fruehauf Acquisition. The Company received rental revenue of $811, $657 and $665 from SESR in 1992, 1991 and 1990, respectively. Rental revenue is recorded in Other Income (Expense) in the Consolidated Statement of Income and is reduced by depreciation expense on the facility. SESR is responsible for paying the property taxes, insurance, maintenance and expenses related to the leased property.

The future rental revenues under this non-cancelable operating lease, as of December 31, 1992, are as follows:

1993                            $956
1994                           1,200
1995                           1,288
1996                           1,288
1997                           1,288
     Total                    $6,020

NOTE P - RESTATEMENT OF PRIOR YEAR RESULTS

As a result of inquiries by its current independent accountants, the Company reviewed its accounting treatment for certain prior year transactions and concluded that restatements were required to be made to the previously issued financial statements for the years ended December 31, 1990 and 1991.

The Company issued increasing rate debt with detachable warrants in the Fruehauf Acquisition, and redeemed the warrants in 1990. The amount paid to redeem the warrants was deferred, to be amortized over the life of the debt. The fair value of the warrants at the date of issue should have been initially recorded as a debt discount and amortized as interest expense over the life of the debt. Subsequent increases in their fair value should have been recorded as additional interest cost in 1989 and 1990. Additionally, it has been determined that the interest expense recognized on the increasing rate debt in 1989 and 1990 was not properly recorded.

In 1990, the Company accounted for a debt transaction as a modification to an existing debt instrument as opposed to an extinguishment of debt and the issuance of new debt. In accounting for the transaction as a modification, the Company continued to amortize the remaining deferred debt issue costs incurred on the old debt over the term of the new debt. Had the transaction been properly accounted for as an extinguishment of debt, all unamortized debt issue costs would have been written off in 1990 as an extraordinary loss.

The Consolidated Statement of Income, Consolidated Balance Sheet, Consolidated Statement of Cash Flows and Consolidated Statement of Stockholders' Investment have been restated to reflect the foregoing items. The following table sets forth selected information as originally reported and as restated for the years ended December 31, 1991 and 1990.

Year ended December 31, 1991 1990 Net Income (Loss) before Extraordinary Loss:

  As originally reported                $(30,022)         $2,324
  Restatement adjustment                    1,146         (2,308)
     Restated Net Income (loss) before
       Extraordinary Loss               $(28,876)            $16

Net Income (Loss):
  As originally reported                $(30,022)          $2,324
  Restatement adjustment                    1,146         (4,500)
     Restated Net Income (loss)         $(28,876)        $(2,176)

Net Income (Loss) per Share before Extraordinary Loss:
  As originally reported                  $(3.63)          $0.51
  Restatement adjustment                    0.13           (0.51)
     Restated Net Income (loss) per share
     before Extraordinary Loss            $(3.50)          $0.00

Net Income (Loss) per Share:
  As originally reported                  $(3.63)          $0.51
  Restatement adjustment                    0.13           (0.98)

Restated Net Income (loss) per share $(3.50) $(0.47)

Weighted Average Common and Common Equivalent Shares Outstanding 8,260 4,590

NOTE Q - PLAN OF RESTRUCTURING AND REFINANCING

As a result of significant operating losses which have continued through the first quarter of 1993, and cash flow difficulties, the Company has taken significant actions to reduce its overall cost structure and improve liquidity. As described in Note D - "Restructuring Costs," in 1991 the Company implemented a restructuring program affecting its distribution system and certain of its manufacturing operations. This program continued through 1992 with additional actions, including, among others, temporary plant shutdown, salary reductions and reductions in fringe benefits.

On March 15, 1993, the Company and its lenders amended the terms of the Credit Agreement. The amendment provides up to $6.6 million of additional borrowing availability to the Company, and waives past covenant violations. The interest rate under the Credit Agreement was increased to prime plus 2.25% effective January 1, 1993. Additionally, the maturity of the Credit Agreement was changed from December 31, 1995 to June 30, 1993. The Company has included all outstanding loans under the Credit Agreement in current liabilities in the Consolidated Balance Sheet to reflect the new maturity date.

The Company is attempting to secure alternative financing which would provide incremental borrowing and enable it to extinguish all amounts owed under the Credit Agreement. Additionally, the Company and Terex are reviewing various proposals to maximize stockholder value, including potential equity infusions and other financing transactions. The Company and Terex are conducting discussions with interested parties. However, no definitive agreements, terms or structures have been reached, and there are no assurances that any transactions will be consummated. If the Company is unable to secure additional financial resources and refinance the credit agreement, there could be a material adverse impact on the Company's financial position and results of operations.


FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)

                                 For the Nine Months
                                 Ended September 30,
                                     1993      1992

Net Sales                       $196,904     $388,552
Cost of goods sold               186,496      350,356
  Gross profit                    10,498       38,196

Engineering, selling and administrative expenses
  Third parties                   38,635       44,325
  Related parties                    ---        2,300
                                  38,635       46,625

Restructuring provision           47,478       15,500
  Loss from operations          (75,615)     (23,929)

Other income (expense):
  Interest expense               (8,395)      (7,561)
  Equity in net loss of affiliate
    companies                    (2,725)      (1,281)
  Royalty income                   2,233        2,205
  Adjustments of net realizable
    value of Jacksonville         ---         (7,441)
  Debt issue/modification costs  (3,177)        (754)
  Other income (expense) - net   (4,917)        1,423
  Loss before income taxes      (92,596)     (37,338)

Provision (benefit) for
 income taxes                        508      (2,703)

  Net Loss                     $(93,104)    $(34,635)

Loss per share                   $(6.98)      $(2.85)

Weighted average common shares
  outstanding (see Exhibit 11)    13,341       12,159

The accompanying notes are an integral part of these statements.

FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except per share data)

September 30,
1993

ASSETS

Current assets
  Cash and cash equivalents                     $10,206
  Net receivables                                19,721
  Net inventories                                27,160
  Other current assets                            1,444
       Total current assets                      58,531

Restricted cash                                      40
Prepaid pension cost                              7,063
Assets held for sale                             81,461
Other assets                                      2,873

Property, plant and equipment
  Property, plant and equipment                  60,296
  Less - accumulated  depreciation               14,399
       Net property, plant and equipment         45,897
Total Assets                                   $195,865

LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current liabilities
  Notes payable                                  $2,268
  Trade accounts payable                         29,609
  Accrued compensation and benefits              15,268
  Accrued warranties                              9,514
  Accrued workers compensation                    5,403
  Accrued restructuring costs                    32,615
  Other current liabilities                      14,796
  Current portion of long-term debt               7,576
       Total current liabilities                117,049

Long-term debt, less current portion             97,551
Postretirement health insurance,
  less current portion                           40,232
Long-term payable to Terex Corporation           13,507
Other long-term liabilities                      35,325

Stockholders' investment
  Common stock, $0.01 par value -- authorized
       20,000 shares; issued and outstanding
       20,000 as of September 30, 1993 and
       12,159 shares as of December 31, 1992        200
  Additional paid-in capital                     81,683
  Accumulated deficit                         (189,507)
  Foreign currency translation adjustment         (176)
       Total stockholders' investment         (107,799)
Total liabilities and stockholders'
 investment                                    $195,865

The accompanying notes are an integral part of these statements.

FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of dollars)

                                             For the Nine Months
                                             Ended September 30,
                                              1993           1992
OPERATING ACTIVITIES
   Net loss                               $(93,104)      $(34,637)
   Adjustments to reconcile net loss to
     cash flows from operating activities:
     Depreciation and amortization            3,787          3,450
     (Gain) loss on sale of property,
      plant and equipment                     (453)             35
     Net unremitted equity loss
      in affiliates                           3,330          1,281
     Restructuring provision                 47,478         15,500
     Noncash liquidation costs
      of Jacksonville                             0          7,441
     Increase (decrease) in cash due to changes
       in operating assests and liabilities:
       Net receivables                       19,666          2,423
       Net inventories                       25,091         28,760
       Other current assets                   1,363        (1,164)
       Trade accounts payable              (17,764)        (2,193)
       Payable to Terex Corporation             617          2,802
       Accrued  compensation and benefits     (991)        (4,788)
       Accrued workers compensation             (267)      (7,887)
       Accrued warranties                     2,097          (104)
       Other current liabilities            (3,237)       (22,118)
       Other long-term assets               (5,692)          1,868
       Other long-term liabilities          (1,290)        (9,337)
        Net cash used in
        operating activities               (19,369)       (18,668)

INVESTING ACTIVITIES
   Capital expenditures                       (461)        (1,467)
   Proceeds from sale of property,
    plant and equipment                      11,229          7,903
   Increase in restricted cash                 (40)              0
   Decrease in marketable securities              0            457
     Net cash from investing activities      10,728          6,893

FINANCING ACTIVITIES
   Proceeds from issuance of common stock     9,880              0
   Net borrowings under revolving
    line of credit agreements                 6,259         15,014
   Proceeds from issuance of convertible
    subordinated notes                        8,783              0
   Principal repayment of long-term debt    (8,399)        (6,042)
   Net borrowings (repayments) under
    short-term notes payable                  (695)          1,926
     Net cash from (used) in financing
      activities                             15,828         10,900

Effect of exchange rate changes on
 cash and cash equivalents                      (4)             12

NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                       7,183          (863)

Cash and cash eqiuvalents at
 beginning of period                          3,023          2,985

CASH AND CASH EQUIVALENTS AT
 END OF PERIOD                              $10,206         $2,122

The accompanying notes are an integral part of these statements.

FRUEHAUF TRAILER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, unless otherwise denoted)

September 30,1993

NOTE A - BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements of Fruehauf Trailer Corporation and subsidiaries (the "Company") as of September 30, 1993 and for the nine months ended September 30, 1993 and 1992 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation have been made. Such adjustments consist only of those of a normal recurring nature, other than those adjustments discussed in Notes B, F and G. Operating results for the nine months ended September 30, 1993, are not necessarily indicative of the results that may be expected for the year ending December 31, 1993. For further information, refer to the consolidated financial statements for the year ended December 31, 1992.

NOTE B - RESTRUCTURING PROVISION

As discussed more fully in Note E - "Long-Term Debt", the Company completed a series of transactions (the "Restructuring") In August 1993 with its existing lenders, a new lender and equity investors which provided for (i) the issuance of common stock (the "Common Stock") and certain convertible notes (the "Convertible Notes") of the Company for approximately $20.5 million, (ii) the establishment of a now $25 million revolving credit facility (the 'Revolving Credit Facility"), (iii) in amendment and restatement of the Company's existing bank credit facility (as amended and restated, the "Restructured Credit Agreement"), (iv) the issuance of 2,251,187 shares of Common Stock to Terex Corporation ("Terex") in satisfaction (the "Satisfaction") of $13,507,000 of indebtedness owed to Terex by the Company and (v) an amendment to the Company's outstanding unsecured promissory notes hold by certain holders of warrants to purchase Common Stock ("Warrant Note") by adding approximately $1.2 million of accrued interest to principal and by extending the maturity (the "Note Amendment"). These transactions were consummated with a view to fund the Company's turnaround plan (the "Turnaround Plan"). Key elements of the Turnaround Plan include reductions of fixed costs to lower the Company's breakeven levels, obtaining of access to sufficient working capital and vendor credit, and restructuring of existing bank debt. Specific actions contemplated in the Turnaround Plan include further reductions in excess manufacturing capacity, deemphasizing vertical Integration from both the perspective of the manufacture of component parts, as well so reaffirming previous decisions concerning the branch restructuring program, and rationalization of the Company's current management infrastructure to levels more appropriate for current business levels. As a result of the approval of the Turnaround Plan by the Company's Board of Directors and management's commitment to its lenders to implement the Turnaround Plan, the Company provided a restructuring provision of $47.5 million in the second quarter of 1993 to cover the anticipated costs and writedowns involved in implementing the Turnaround Plan. The components of the restructuring provision (in millions) are as follows:

Inventory liquidation and transfer                  $   2.7
Asset held for sale valuation adjustments              22.1
Idle facility holding costs                            14.6
Reduction in force costs                                4.0
Other                                                   4.1
                                                    $  47.5

NOTE C - INVENTORIES

Inventories consist of the following at September 30, 1993:

New trailers                                 $  5,314
Used trailers                                     913
Replacement parts                               7,842
Work-in-process                                 3,606
Raw materials and supplies                      8,249
     Gross inventories                         25,924
Excess of LIFO inventory value
 over FIFO costs.                               1,236

     Net inventories                        $  27,160

NOTE D - ASSETS HELD FOR SALE

At December 31, 1992, the Company was holding for sale certain excess real estate, facilities and other assets, as well as its Decatur Business. As a result of the further actions to be taken pursuant to the Turnaround Plan as discussed in Note B - "Restructuring Provision", additional excess real estate, facilities and machinery and equipment, as well as the Company's investment in non-consolidated affiliates are held for sale. The Company is actively marketing all excess properties, and in certain instances, is leasing them in order to mitigate idle facility holding costs. These properties are included in the Condensed Consolidated Balance Sheet in Assets Held for Sale, and are carried on a lower of cost or net realizable value basis. Adequate reserves have been established to absorb the holding costs until anticipated disposition. As a result of the Company's decision to sell the remaining investments in non-consolidated affiliates, the Company recorded a provision to reduce the carrying values of investments in non-consolidated affiliates to their not realizable value. The Company discontinued the application of the equity method of accounting for these investments.

Prior to the Restructuring, all proceeds from the sale of collateralized assets were applied against outstanding indebtedness under the Company's then existing bank credit facility (the "Prior Credit Agreement") including proceeds from the sale of properties included in Assets Held for Sale on the Consolidated Balance Sheet. As part of the Restructured Credit Agreement, the Company is allowed to retain specified percentages ranging from 15% to 44% of certain properties included in Assets Held for Sale for purposes other than debt repayment. The remaining proceeds are required to be deposited into an account solely for the purpose of repayment of indebtedness under the Restructured Credit Agreement. Given that certain of the proceeds are restricted for purposes of debt repayment, Assets Held for Sale are presented as noncurrent in the Consolidated Balance Sheet.

NOTE E - LONG-TERM DEBT

Long-term debt consists of the following at September 30, 1993:

Restructured Credit Agreement bearing interest
     at prime plus 2.25%, due August 20, 1998        $   83,103
Revolving Credit Facility bearing interest at
     prime plus 2.5%, due August, 1995                       --
Convertible Subordinated Notes                            8,783
Unsecured promissory notes bearing interest
     at 14%, due October 31, 1998                         8,692
Mortgage note bearing interest at 9.625%
     collateralized by an idle plant, due
     September, 2001                                      3,891
Other                                                       658
     Total long-term debt                               105,127
Less: Current portion of long-term debt                   7,576

          Long-term debt, less current portion       $   97,551

On August 20, 1993, the Company completed the Restructuring which provided for
(i) the issuance of Common Stock and Convertible Notes for approximately $20.5 million, (ii) the establishment of the Revolving Credit Facility, (iii) a restructuring of the Prior Credit Agreement, (iv) the entry into an agreement to affect the Satisfaction, and (v) the Note Amendment.

New Equity Funding

As part of the Restructuring, the Company sold 7,841,326 shares of Common Stock and approximately $8.8 million of Convertible subordinated Notes (collectively the "New Equity"). Proceeds to the Company, net of issuance and estimated registration costs, were approximately $18.7 million. The Convertible subordinated Notes and, at the Company's option, any additional Convertible subordinated Notes issued in payment of interest thereon are convertible into Common Stock at the rate of one share of Common Stock for each $1.50 in principal amount of and accrued interest on the Convertible subordinated Notes. The Convertible Notes accrue interest at 6% through March 31, 1994. Such rate increases to 10% as of April 1, 1994 and increases by one percentage point every six months, thereafter, it the Convertible Notes are not converted by April 1, 1994. Interest accrued through March 31, 1994 can, at the Company's option, be paid through the issuance of additional Convertible subordinated Notes. Subsequent interest accrued is payable in cash. On October 1, 1993, the Company made an interest payment in kind on the Convertible Notes aggregating $61 in additional Convertible Notes. The Convertible Notes are due and payable on December 31, 1998, with no prior amortization of principal, and are subordinate to all other indebtedness of the Company.

The sale of the Common Stock pursuant to the Restructuring brought the total of issued and outstanding shares of Common Stock as of August 20, 1993 to 19,999,983. Currently, the Company's certificate of incorporation provides for the issuance of 20 million shares. The Company has prepared a consent solicitation statement seeking shareholder approval of an amendment to the Company's certificate of incorporation to increase the number of shares of Common Stock issuable thereunder to 50 million shares which would result in the issuance of Common Stock for mandatory conversion of the Convertible Notes, and the issuance of 2,251,167 shares of Common Stock to Terex in the Satisfaction. On October 29, 1993, the Company filed the preliminary consent solicitation statement with the Securities and Exchange Commission. The provisions of the Subscription Agreements require Terex to consent or vote in favor of such amendment. In addition, the agreements governing the sale of the New Equity require the purchasers thereof to consent to or vote in favor of such amendment. Given these requirements, the Company believes that such matters will be approved by the stockholders of the Company. The Company is also obligated to register the Common Stock issued in the Restructuring and the Common Stock issuable upon the conversion of the shares issued upon the Convertible Notes with the Securities and Exchange Commission.

Revolving Credit Facility

As part of the Restructuring, the Company entered into the Revolving Credit Facility with a financial institution to be used for working capital purposes. The Revolving Credit Facility provides for borrowings limited to the lesser of $25 million or the available borrowing bass. The available borrowing base is calculated by applying prescribed advance ratios against eligible receivables (ranging from 50% to 85%) and inventory balances (ranging from 35% to 65%), in accordance with the terms of the Revolving Credit Facility. On August 20, 1993, the Company borrowed $1 million under the Revolving Credit Facility. The interest rate on loans pursuant to the Revolving Credit Facility is prime rate, as defined, plus an applicable margin of 2.5% per annum, so long as there is no event of default, and at the prime rate plus 4.5% upon the occurrence of an event of default. Interest is payable monthly. The loans under the Revolving Credit Facility are due August 20, 1995. The Revolving Credit Facility is secured by liens on all accounts receivable and inventory of the Company and certain other assets. At September 30,1993, no amounts were outstanding under the Revolving Credit Facility. As of November 11, 1993, outstanding borrowings under the Revolving Credit Facility totaled $6.2 million.

Restructured Credit Agreement

The Prior Credit Agreement became due and payable which was subsequently extended to July 9, 1993. As part of management's overall plan of recapitalization and restructuring, the Company's previous lenders under the Prior Credit Agreement agreed to restructure the terms of the Prior Credit Agreement and waive past events of default pursuant to the Restructured Credit Agreement. The Prior Credit Agreement consisted of a term loan and a revolving credit and letter of credit facility. Amounts outstanding under the term loan at the time of the Restructuring totaled approximately $51.5 million, while amounts outstanding under the revolving credit facility totaled approximately $30.6 million. Outstanding letters of credit totaled $7.0 million. In addition, letter of credit reimbursement liabilities totaled $2.5 million with respect to draws on previously outstanding letters of credit. The terms of the Restructured Credit Agreement provided for the conversion of the amounts owed pursuant to the Prior Credit Agreement into term loans (the "Term Loans") in the amount of $84.6 million.

The Term Loans are payable (i) in twelve consecutive monthly installments of approximately $538 each payable on the last day of each calendar month, commencing July 31, 1994, (ii) in thirty-seven consecutive monthly installments of approximately $1,077 each payable on the last day of each calendar month, commencing on July 31, 1996, and (iii) in the following six installments payable on the dates set forth and in the amounts set forth: February 28, 1994 in the amount of $2 million; August 31, 1994 in the amount of $3 million, February 28, 1995, June 30, 1995 and September 30, 1995 in the amount of $5 million on each date; with the balance of the Term Loans due on August 20, 1998. In addition to the principal amortizations set forth above, the Term Loans must be mandatorily prepaid upon the occurrence of certain events including asset sales and any new equity offering. In addition, the Company is required to apply 50% of its "excess cash flow" (as defined) to prepay the Term Loans. The Term Loans bear interest at the rate of the base rate (generally prime rate) plus a margin of 2.25%, so long as there is no event of default, and at the rate of Base Rate plus 5.75% upon the occurrence of an event of default, in each case payable monthly in arrears.

Letters of Credit

The Restructured Credit Agreement does not provide for the issuance of any new letters of credit. Existing letters of credit issued for the benefit of the Company (totaling $7.0 million) may be renewed or extended, and will be cash collateralized to the extent of the lenders' defined Excess Cash Flow. In the event of a drawing on a letter of credit, the Company must Immediately reimburse the lenders. In the event of a refinancing of the Term Loans, the letters of credit will terminate.

Collateral and Financial Covenants

The Term Loans issued pursuant to the Restructured Credit Agreement are secured by substantially all of the assets of the Company subject to the first priority lien on accounts receivable and inventories held by the lender under the Revolving Credit Facility lender and the right of such lender to look to other assets of the Company for any deficiency suffered in the event of liquidation.

The Restructured Credit Agreement provides for financial covenants related to tangible net worth and interest coverage. The minimum levels set forth in the Restructured Credit Agreement are specifically based upon the Turnaround Plan.

Note Amendment

The Prior Credit Agreement prohibited the Company from making required principal and Interest payments on the Warrant Note following a violation of certain financial covenants contained In the Prior Credit Agreement. Accordingly, the Company did not make required Interest payments and was In default through August 19, 1993 with respect to this Warrant Note. As part of the Restructuring, the holders of the Warrant Note agreed to restructure the terms of the Warrant Notes whereby accrued interest at August 20, 1993 of $1.2 million was added to the principal balance bringing the outstanding principal balance to $8.7 million. In addition, the Interest rate on the Warrant Note was increased from 14% to 15% after August 20, 1994 and the maturity date of the Warrant Notes was extended from March 31, 1996 to October 31, 1998.

Satisfaction

As discussed above, Terex has agreed to accept 2,251,167 shares of Common Stock of the Company in satisfaction of $13.5 million of certain non-interest bearing debt owing from the Company to Terex. As discussed previously, consummation of the Satisfaction Is subject to stockholder approval. The Company has prepared and filed a preliminary consent solicitation statement with the Securities and Exchange Commission.

The following table sets forth the scheduled maturities of the long-term debt outstanding at September 30, 1993 after giving effect to the Restructuring and assuming the conversion of the Convertible Subordinated Notes:

Remainder of fiscal 1993                $   1.2
1994                                        8.6
1995                                       25.1
1996                                       13.3
1997                                       13.4
Thereafter                                 34.7
                                        $  96.3

NOTE F - POSTRETIREMENT BENEFITS

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions" on January 1, 1993. This statement requires accrual of postretirement benefits (such as health care benefits) during the years an employee provides service. The Company provides health care benefits to former salaried employees who retired prior to December 31, 1990, and certain hourly employees covered by bargaining unit contracts that provide such benefits. Reserves for past service costs of employees were established in the purchase price allocation relating to the Company's acquisition of its businesses from Fruehauf Corporation in 1989 (the "Fruehauf Acquisition"). As a result, at the time of adopting SFAS No. 106 the Company had an adequate reserve on its Consolidated Balance Sheet for such benefits based upon actuarial studies and reports. Thus, the Company did not require a one-time charge to reflect the adoption of the new accounting pronouncement, nor does the Company have an unrecognized transition obligation to recognize in future periods related to the adoption of SFAS No. 106. The obligation for such benefits is reported on a present value basis on the Company's Consolidated Balance Sheet.

Net periodic postretirement benefit expense for the nine months ended September 30, 1 993 includes the following components:

Service Cost                                      $495
Interest Cost on projected
  benefit obligation.                            3,161
Amortization of unrecognized
   transition obligation                             0

  Net periodic postretirement benefit expense
$3,656

The difference between the net periodic postretirement benefit expense on a cash basis versus accrual basis was not material for the nine months ended September 30, 1993 nor is it expected to be material for the year ended December 31, 1993.

Currently, the Company's postretirement benefit obligations are not funded. The liability of the Company, as of January 1, 1993, was as follows:

Actuarial present value of accumulated postretirement benefit obligation:

     Retirees                              $ 37,482
     Active participants                      4,853
Total accumulated postretirement
 benefit obligation                          42,335
Less: Current portion                         3,450
     Accumulated postretirement benefit
     obligation - noncurrent               $ 38,885

Health care cost trends in the actuarial assumptions range from 2% to 14% based on the employee group involved. These rates decrease to 0% to 7%, respectively, over a period of 5 to 12 years, depending on the group involved. The discount rate used in determining the accumulated postretirement benefit obligation is 8.5%. The effect of a one percentage-point change in the health care cost trend rates would change the accumulated postretirement benefit obligation by approximately 5% to 10%.

NOTE G - ACCOUNTING FOR INCOME TAXES

The Company adopted SFAS No. 109, "Accounting for Income Taxes" on January 1, 1993. The new pronouncement retains the basic concepts of SFAS No. 96, but generally simplifies its application. The adoption of this new pronouncement did not have an impact on the Company's operating results or financial position.

At September 30, 1993, the Company had domestic federal tax basis net operating loss carryforwards of approximately $185 million. In accordance with the provisions of the Internal Revenue Code, the Restructuring described in Note E
- - "Long-Term Debt" will likely result in a significant limitation on the use of the losses In future years, The Company continues to assess the extent of such limitations In light of the complex structure of the Restructuring. Although applying the provisions of the Internal Revenue Code to the Restructuring will limit the utilization of the not operating loss carryforwards, the limitation does not currently result In the recording of a deferred tax liability.

NOTE H - CONTINGENCIES AND LITIGATION

The Company's new management team, with the assistance of new outside counsel, has recently initiated a review of the shareholder suit and the product liability and other cases that have arisen in the normal course of the Company's business. As a result of this review, which is ongoing, the Company has evaluated the possible impact of this litigation on the Company in light of current circumstances. The Company is currently unable to determine whether these matters, individually or in the aggregate, will have a material adverse effect on the Company. The Company's present liquidity situation may make settlements in one or more of these cases difficult. Existing or potential judgments against the Company in one or more of these cases could require expenditure of funds beyond the Company's cash resources and could, depending upon their size, result in the violation of certain covenants contained in the Restructured Credit Agreement and the Revolving Credit Facility. In the event that judgments in any of these cases are rendered against the Company that require the expenditure of funds beyond the Company's available cash resources or result in covenant violations that are not waived or otherwise cured, such judgments could jeopardize the Turnaround Plan and could have a material adverse effect on the Company.


No dealer, salesman or other person has been authorized to give any information or to make any representations other than those contained in this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company. Neither the delivery of this Prospectus nor any sale hereunder shall, under any circumstances, create any implication that the information contained herein is correct as of any time subsequent to its date. This Prospectus does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.

                                                        Page
Available Information                                     2
Prospectus Summary                                        3
Investment Considerations                                 6
The Company                                               8
Use of Proceeds                                           9
Market for Common Stock and Dividend Policy              10
Capitalization                                           11
Selected Consolidated Financial Information              12
Management's Discussion and Analysis of
  Financial Condition and Results of Operations          16
Business                                                 27
Management                                               35
Principal Stockholders                                   39
Selling Security Holders                                 41
Certain Transactions                                     42
Description of Securities                                44
Certain Federal Income Tax Considerations                49
Plan of Distribution                                     50
Legal Matters                                            51
Auditors                                                 51
Index to Consolidated Financial Statements              F-1

Until __________ __, 1994, all dealers effecting transactions in the Warrants and Warrant Shares, whether or not participating in this offering, may be required to deliver a Prospectus.

1,300,000 Warrants 3,900,000 Shares of

TEREX CORPORATION

Common Stock Purchase Warrants
and
Common Stock

PROSPECTUS

, 1994


PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution
The following table itemizes the expenses incurred by the Company in connection with the offering of the Warrants and shares of Common Stock being registered. All the amounts shown are estimates except the SEC registration fee.

               Item                            Amount
Registration Fee - SEC                       $11,094.83
Warrant Agent Fees and Expenses                   *
Printing and Engraving Expenses                   *
Legal Fees and Expenses                           *
Accounting Fees and Expenses                      *
Blue Sky Fees and Expenses                        *
Miscellaneous Expenses                            *
               TOTAL                         $    *

* To be completed by amendment.

Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL") and Article IX of the Company's By-laws provide for the indemnification of the Company's directors and officers in a variety of circumstances, which may include liabilities under the Securities Act of 1933, as amended (the "Securities Act").
Article IX of the Company's By-laws generally requires the Company to indemnify its directors and officers against all liabilities (including judgments, settlements, fines and penalties) and reasonable expenses incurred in connection with the investigation, defense, settlement or appeal of any type of action, whether instituted by a third party or a stockholder (either directly or derivatively) and including specifically, but without limitation, actions brought under the Securities Act and/or the Securities Exchange Act of 1934, as amended (the "Exchange Act"); provided that no such indemnification will be allowed if such director or officer was not successful in defending against any such action and it is determined that the director or officer engaged in misconduct which constitutes (i) a willful breach of his or her "duty of loyalty" (as further defined therein) to the Company or its stockholders; (ii) acts or omissions not in "good faith" (as further defined therein) or which involve intentional misconduct or a knowing violation of law; (iii) the payment of an illegal dividend or the authorization of an unlawful stock repurchase in violation of Delaware law; or (iv) a transaction from which the executive derived a material improper personal financial profit.
Finally, the Company's Certificate of Incorporation, as amended, contains a provision which eliminates the personal liability of a director to the Company and its stockholders for certain breaches of his or her fiduciary duty of care as a director. This provision does not, however, eliminate or limit the personal liability of a director (i) for any breach of such director's duty of loyalty to the Company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under the Delaware statutory provision making directors personally liable, under a negligence standard, for unlawful dividends of unlawful stock repurchases or redemptions, or (iv) for any transaction from which the director derived an improper personal benefit. This provision offers persons who serve on the Board of Directors of the Company protection against awards of monetary damages resulting from negligent (except as indicated above) and "grossly" negligent actions taken in the performance of their duty of care, including grossly negligent business decisions made in connection with takeover proposals for the Company. As a result of this provision, the ability of the Company or a stockholder thereof to successfully prosecute an action against a director for a breach of his duty of care has been limited. However, the provision does not affect the availability of equitable remedies such as an injunction or rescission based upon a director's breach of his duty of care. Although the validity and scope of the new statute has not been tested in court, the Securities and Exchange Commission (the "Commission") has taken the position that the provision will have no effect on claims arising under the Federal securities laws.
Item 15. Recent Sales of Unregistered Securities On July 31, 1992, the Company completed the private placement of $160 million aggregate principal amount of its 13% Senior Secured Notes due 1996 and 576,000 of its common stock appreciation rights ("CSARs") to institutional investors. The Company also issued 82,409 CSARs to holders of its 13-1/2% Senior Subordinated Notes due 1997 in consideration for their consent to issuance of the Senior Secured Notes. This private placement was effected pursuant to
Section 4(2) of the Securities Act.
On December 20, 1993, the Company completed the private placement of (i) the 1,300,000 Warrants being registered hereby and (ii) 1,200,000 shares of the Company's Series A Cumulative Redeemable Convertible Preferred Stock to 22 institutional investors for aggregate proceeds to the Company of $30.2 million. This private placement was effected pursuant to Section 4(2) of the Securities Act.
On December 29, 1993, the Company issued and contributed 350,000 shares of its Common Stock to the Terex Corporation Master Retirement Plan Trust (the "Plan") in satisfaction of certain outstanding obligations of the Company to the Plan. This private placement was effected pursuant to Section 4(2) of the Securities Act.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
3.1 Restated Certificate of Incorporation of Terex Corporation.*
3.2 Restated Bylaws of Terex Corporation.*
4.1 Indenture dated as of June 30, 1987 regarding Terex Corporation, as Obligor, and Northwest Engineering Company, as Guarantor, with respect to Terex Corporation's 13-1/2% Senior Subordinated Notes due July 1, 1997 (incorporated by reference to Exhibit 4.2 to the Form 8-K dated June 30, 1987 of Northwest Engineering Company, Commission File No. 0-572).
4.2 First Supplemental Indenture dated as of August 24, 1988 relating to Terex Corporation's 13-1/2% Senior Subordinated Notes due July 1, 1997 (incorporated by reference to Exhibit 4.5 to Amendment No. 1 to the Form S-2 Registration Statement of Terex Corporation, Registration No. 33-23832).
4.3 Second Supplemental Indenture dated as of July 31, 1992 relating to Terex Corporation's 13-1/2% Senior Subordinated Notes due July 1, 1997 (incorporated by reference to Exhibit 4.28 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.4 Third Supplemental Indenture dated as of April 20, 1993 relating to Terex Corporation's 13-1/2% Senior Subordinated Notes due July 1, 1997.*
4.5 Fourth Supplemental Indenture dated as of August 25, 1993 relating to Terex Corporation's 13-1/2% Senior Subordinated Notes due July 1, 1997.*
4.6 Indenture dated as of July 31, 1992 between Terex Corporation, as Obligor, and United States Trust Company of New York, as Trustee, with respect to the 13% Senior Secured Notes due 1996 (incorporated by reference to Exhibit 4.16 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.7 First Supplemental Indenture dated as of November 1, 1992 relating to the 13% Senior Secured Notes due 1996 (incorporated by reference to Exhibit 4.27 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.8 Second Supplemental Indenture dated as of April 20, 1993 relating to the 13% Senior Secured Notes due 1996.*
4.9 Security and Pledge Agreement dated as of July 31, 1992 between Terex Corporation and United States Trust Company of New York, as Collateral Agent (incorporated by reference to Exhibit 10.38 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702). 4.10Bond and Floating Charge, dated as of July 31, 1992, executed by Terex Corporation in favor of United States Trust Company of New York, as Collateral Agent (incorporated by reference to Exhibit 4.18 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702). 4.11Guarantee and Bond and Floating Charge, dated July 31, 1992, executed by Terex Equipment Limited in favor of United States Trust Company of New York, as Collateral Agent (incorporated by reference to Exhibit 4.19 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702). 4.12Bond and Floating Charge, dated as of July 31, 1992, executed by Terex Corporation in favor of Continental Bank, N.A. (incorporated by reference to Exhibit 4.29 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702). 4.13Guarantee and Bond and Floating Charge dated July 31, 1992, executed by Terex Equipment Limited in favor of Continental Bank, N.A. (incorporated by reference to Exhibit 4.30 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.14Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Terex Corporation in favor of United States Trust Company of New York, as collateral agent, affecting Koehring Machinery Center, Waterloo, Iowa (incorporated by reference to Exhibit 4.20 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.15Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Terex Corporation in favor of United States Trust Company of New York, as collateral agent, affecting Unit Rig, Tulsa, Oklahoma (incorporated by reference to Exhibit 4.21 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.16Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Terex Corporation in favor of United States Trust Company of New York, as collateral agent, affecting Unit Rig Parts Depot, Gillette, Wyoming (incorporated by reference to Exhibit 4.22 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.17Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Clark Material Handling Company in favor of United States Trust Company of New York, as collateral agent, affecting Danville Plant, Danville, Kentucky, Engineering and Training Center, Lexington, Kentucky and Lees Town Plant, Lexington, Kentucky (incorporated by reference to Exhibit 4.23 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.18Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Drexel Industries, Inc. in favor of United States Trust Company of New York, as collateral agent, affecting Drexel Plant, Horsham, Pennsylvania (incorporated by reference to Exhibit 4.24 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.19Gesellschaft (mortgage) dated as of July 31, 1992 from Clark Equipment GmbH in favor of United States Trust Company of New York and Continental Bank, N.A. as collateral agents, affecting Mulheim-Ruhr, Germany (incorporated by reference to Exhibit 4.25 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.20Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Terex Corporation in favor of United States Trust Company of New York, as collateral agent, affecting Distribution Center, Southaven, Mississippi (incorporated by reference to Exhibit 4.26 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.21Junior Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Terex Corporation in favor of Continental Bank, N.A., as collateral agent, affecting Koehring Machinery Center, Waterloo, Iowa (incorporated by reference to Exhibit 4.31 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.22Junior Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Terex Corporation in favor of Continental Bank, N.A., as collateral agent, affecting Unit Rig, Tulsa, Oklahoma (incorporated by reference to Exhibit 4.32 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.23Junior Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Terex Corporation in favor of Continental Bank, N.A., as collateral agent, affecting Unit Rig Parts Depot, Gillette, Wyoming (incorporated by reference to Exhibit 4.33 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.24Junior Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Clark Material Handling Company in favor of Continental Bank, N.A., as collateral agent, affecting Danville Plant, Danville, Kentucky, Engineering and Training Center, Lexington, Kentucky and Lees Town Plant, Lexington, Kentucky (incorporated by reference to Exhibit 4.34 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.25Junior Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Drexel Industries, Inc. in favor of Continental Bank, N.A., as collateral agent, affecting Drexel Plant, Horsham, Pennsylvania (incorporated by reference to Exhibit 4.35 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.26Junior Mortgage, Assignment of Rents and Fixture Filing dated as of July 31, 1992 from Terex Corporation in favor of Continental Bank, N.A., as collateral agent, affecting Distribution Center, Southaven, Mississippi (incorporated by reference to Exhibit 4.36 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.27Security Agreement dated as of July 31, 1992 between Clark Material Handling Company and United States Trust Company of New York, as collateral agent (incorporated by reference to Exhibit 10.39 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.28Security Agreement dated as of July 31, 1992 between Clark Lift of Western Michigan, Inc. and United States Trust Company of New York, as collateral agent (incorporated by reference to Exhibit 10.40 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.29Security Agreement dated as of July 31, 1992 between Clark Components International, Inc. and the United States Trust Company of New York, as collateral agent (incorporated by reference to Exhibit 10.41 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.30Security Agreement dated as of July 31, 1992 between Drexel Industries, Inc. and United States Trust Company of New York, as collateral agent (incorporated by reference to Exhibit 10.45 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.31Security and Pledge Agreement dated as of July 31, 1992 between Terex Corporation and Continental Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.42 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.32Security Agreement dated as of July 31, 1992 between Clark Material Handling Company and Continental Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.43 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.33Security Agreement dated as of July 31, 1992 between Drexel Industries, Inc. and Continental Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.44 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.34Security Agreement dated as of July 31, 1992 between Clark Lift of Western Michigan, Inc. and Continental Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.46 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.35Security Agreement dated as of July 31, 1992 between Clark Components International, Inc. and Continental Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.47 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
4.36First Amendment, dated as of January 1, 1993, to Security Agreement between Clark Material Handling Company and United States Trust Company of New York, as Collateral Agent, dated as of July 31, 1992.* 4.37First Amendment, dated as of January 1, 1993, to Security Agreement between Clark Lift of Western Michigan, Inc. and United States Trust Company of New York, as Collateral Agent, dated as of July 31, 1992.* 4.38First Amendment, dated as of January 1, 1993, to Security Agreement between Clark Components International, Inc. and United States Trust Company of New York, as Collateral Agent, dated as of July 31, 1992.* 4.39First Amendment, dated as of January 1, 1993, to Security Agreement between Drexel Industries, Inc. and United States Trust Company of New York, as Collateral Agent, dated as of July 31, 1992.* 4.40Warrant Agreement dated as of December 20, 1993 between Terex Corporation and Mellon Securities Trust Company, as Warrant Agent.*
4.41 Form of Warrant.*
5.1 Opinion of Robinson Silverman Pearce Aronsohn & Berman as to legality of securities being registered.**
10.1 Terex Corporation Incentive Stock Option Plan, as amended (incorporated by reference to Exhibit 4.1 to the Form S-8 Registration Statement of Terex Corporation, Registration No. 33-21483).
10.2 Purchase Agreement dated June 30, 1987, with respect to Terex Corporation's 13-1/2% Senior Subordinated Notes due July 1, 1997 between Terex Corporation and the original purchasers of the Notes (incorporated by reference to Exhibit 4.2 to the Form S-4 Registration Statement of Terex Corporation, Registration No. 33-20737).
10.3 Purchase Agreement dated July 31, 1992 between Terex Corporation and the original purchasers of the Notes with respect to Terex Corporation's 13% Senior Secured Notes due 1996 (incorporated by reference to Exhibit 10.35 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission file No. 1-10702).
10.4 Debt Registration Rights Agreement dated as of July 31, 1992 between Terex Corporation and the purchasers who are signatories thereto (incorporated by reference to Exhibit 4.17 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
10.5 Common Stock Appreciation Rights Agreement dated as of July 31, 1992 between Terex Corporation and United States Trust Company of New York, as SAR Agent (incorporated by reference to Exhibit 10.36 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission file No. 1-10702).
10.6 SAR Registration Rights Agreement dated as of July 31, 1992 between Terex Corporation and the purchasers who are signatories thereto (incorporated by reference to Exhibit 10.37 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission file No. 1-10702).
10.7 Stock Purchase Agreement dated as of May 27, 1992 between Clark Equipment Company and Terex Corporation (incorporated by reference to Exhibit 10.27 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
10.8 First Amendment to Stock Purchase Agreement dated as of July 31, 1992 between Terex Corporation and Clark Equipment Company (incorporated by reference to Exhibit 10.28 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
10.9 Promissory Note dated as of July 31, 1992 executed by Terex Corporation in favor of Clark Equipment Company (incorporated by reference to Exhibit 10.29 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702). 10.10Tax Agreement dated as of July 31, 1992 between Terex Corporation in favor of Clark Equipment Company (incorporated by reference to Exhibit 10.30 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702).
10.11 Trademark Assignment Agreement dated as of July 31, 1992 between Clark Equipment Company and Clark Material Handling Company (incorporated by reference to Exhibit 10.31 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702). 10.12Trademark Assignment dated as of July 31, 1992 executed by Clark Equipment Company in favor of Clark Material Handling Company (incorporated by reference to Exhibit 10.32 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702). 10.13License Agreement dated as of July 31, 1992 between Clark Equipment Company and Clark Material Handling Company (incorporated by reference to Exhibit 10.33 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702). 10.14Mortgage dated as of July 31, 1992 by Clark Equipment GmbH for the benefit of Clark Equipment Company (incorporated by reference to Exhibit 10.34 to the Form 10-K for the year ended December 31, 1992 of Terex Corporation, Commission File No. 1-10702). 10.15Loan and Security Agreement dated as of May 20, 1993 between Foothill Capital Corporation and Terex Corporation (incorporated by reference to Exhibit 10.1 to the Form S-3 Registration Statement of Terex Corporation Registration No. 33-56924). 10.16Loan and Security Agreement dated as of May 20, 1993 between Foothill Capital Corporation and Clark Material Handling Company (incorporated by reference to Exhibit 10.2 to the Form S-3 Registration Statement of Terex Corporation, Registration No. 33-56924).
10.17Continuing Guaranty dated as of May 20, 1993 of Terex Corporation (incorporated by reference to Exhibit 10.3 to the Form S-3 Registration Statement of Terex Corporation, Registration No. 33-56924).
10.18Continuing Guaranty dated as of May 20, 1993 of Clark Material Handling Company (incorporated by reference to Exhibit 10.4 to the Form S-3 Registration Statement of Terex Corporation, Registration No. 33-56924).
10.19Amendment Number One dated as of August 24, 1993 to Loan and Security Agreement dated as of May 20, 1993 between Foothill Capital Corporation and Terex Corporation.*
10.20Amendment Number One dated as of August 24, 1993 to Loan and Security Agreement dated as of May 20, 1993 between Foothill Capital Corporation and Clark Material Handling Company.*
10.21Termination, General Release and Waiver Agreement, dated as of June 29, 1993, between Clark Material Handling Company and Gary D. Bello.* 10.22Form of Purchase Agreement dated as of December 20, 1993 between Terex Corporation and the purchasers of Warrants and shares of Series A Cumulative Redeemable Convertible Preferred Stock of Terex Corporation.* 10.23Registration Rights Agreement dated as of December 20, 1993 between Terex Corporation and the purchasers of Warrants.* 10.24Registration Rights Agreement dated as of December 20, 1993 between Terex, Corporation and the purchasers of shares of Series A Cumulative Redeemable Convertible Preferred Stock of Terex Corporation.* 10.25Agreement dated July 1, 1987, between KCS Industries, Inc. and Northwest Engineering Company (incorporated by reference to Exhibit 10.2 to the Form S-4 Registration Statement of Terex Corporation, Registration No. 33-20737).
10.26Management Agreement Amendment, dated January 1, 1993, between KCS Industries, Inc. and Terex Corporation.* 10.27Management Agreement Termination Agreement, dated January 1, 1994, between KCS Industries, L.P. and Terex Corporation.* 10.28Credit Facility, dated December 23, 1993, among Terex Equipment Limited, Terex Corporation and Standard Chartered Bank.*
11.1 Computation of per share earnings.*
12.1 Computation of ratio of earnings to fixed charges.*
21.1 Subsidiaries of Terex Corporation.*
23.1 Consent of Robinson Silverman Pearce Aronsohn & Berman (included as part of Exhibit 5.1).**
23.2 Independent Accountants' Consent of Price Waterhouse - Milwaukee, Wisconsin.**
23.3 Independent Accountants' Consent of Deloitte & Touche - Detroit, Michigan.**
23.4 Independent Accountants' Consent of Price Waterhouse - South Bend, Indiana.**
23.5 Independent Accountants' Consent of Price Waterhouse - Milwaukee, Wisconsin.**
23.6 Independent Accountants' Consent of Deloitte & Touche - Detroit, Michigan.**
24.1 Power of Attorney (included on signature pages).*

* Filed herewith. ** To be filed by amendment.


RESTATED CERTIFICATE OF INCORPORATION
OF
TEREX CORPORATION

TEREX CORPORATION, a corporation duly organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify as follows:

First: That the name of the corporation is Terex Corporation, and that the name under which the corporation was originally incorporated was Terex U.S.A., Inc.

Second: That the original certificate of incorporation of the corporation was filed by the Secretary of State of the State of Delaware on the thirtieth day of October, 1986.

Third: That this Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the corporation's Certificate of Incorporation as heretofore amended or supplemented, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

Fourth: That this Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Section 245(b) of the General Corporation Law of the State of Delaware by the board of directors of said Terex Corporation without a vote of the stockholders of the corporation.

Fifth: That the text of the Certificate of Incorporation of said Terex Corporation, as amended or supplemented heretofore, is hereby restated to read in full as follows:

ARTICLE I

The name of the corporation (hereinafter called the "Corporation") is Terex Corporation.

ARTICLE II

The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street in the City of Wilmington, County of New Castle. The name of its initial registered agent at such address is The Corporation Trust Company. The Corporation may change its registered office and/or its registered agent in the State of Delaware at any time or from time to time in the manner provided under the General Corporation Law of Delaware.

ARTICLE III

The purpose for which the Corporation is organized is to carry on and engage in any lawful activity for which corporations may be organized under the General Corporation Law of Delaware.

ARTICLE IV

(a) The aggregate number of shares which the corporation shall have the authority to issue is 40,000,000, consisting of (i) 30,000,000 shares designated as Common Stock, par value $.01 per share ("Common Stock"), and (ii) 10,000,000 shares designated as Preferred Stock, par value $.01 per share ("Preferred Stock").

(b) Common Stock. The terms of the Common Stock shall be as follows:

(i) Dividends. Holders of Common Stock will be entitled to receive such dividends as may be declared by the Board of Directors.

(ii) Distribution of Assets. In the event of the voluntary or involuntary liquidation, distribution or winding up of the corporation, subject to the rights of the holders of Preferred Stock, holders of Common Stock will be entitled to receive pro rata all of the remaining assets of the corporation available for distribution to its stockholders.

(iii) Voting Rights. The holders of Common Stock shall have the general right to vote for all purposes, including the election of directors, as provided by law. Each holder of Common Stock shall be entitled to one vote for each share thereof held.

(c) Preferred Stock. The Board of Directors of the corporation is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish, and, to the fullest extent permitted by law, to increase or decrease, from time to time the number of shares to be included in each such series, to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof, and if no shares of stock of any such series has been issued, to amend the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the certificate or certificates establishing the series of Preferred Stock.

(d) Series A Preferred Stock. Pursuant to the authority conferred by this Article IV, the Series A Cumulative Redeemable Convertible Preferred Stock (the "Series A Preferred Stock") has been designated, with such series consisting of 1,200,000 shares, par value $.01 per share, with the powers, preferences and relative, participating, optional or other rights, and qualifications, limitations or restrictions thereof, as follows:

1. Certain Definitions. Unless the context otherwise requires, the terms defined in this paragraph 1 shall have, for all purposes hereof, the meanings herein specified.

"Accretion Termination Date" shall mean the Dividend Payment Date immediately preceding the first Dividend Payment Date on which the Corporation is permitted to declare and pay cash dividends on the Series A Preferred Stock under the Loan Agreements.

"Applicable Rate" shall mean the sum of the Base Rate and the Non-Liquidity Rate.

"Base Rate" shall mean (a) 13% per annum from the Issue Date through the fifth anniversary of the Issue Date and (b) 18% per annum thereafter.

"Closing Price" on any day shall mean the per share closing sale price of the Common Stock, regular way, on such day or, in case no such sale takes place on such day, the average of the reported closing bid and asked prices, regular way, in each case on the principal national securities exchange or quotation system on which the Common Stock is quoted or listed or admitted to trading or, if not quoted or listed or admitted to trading on any national securities exchange or quotation system, the average of the closing bid and asked prices of the Common Stock on the over-the-counter market on such day as reported by the National Quotation Bureau Incorporated, or a similar generally accepted reporting service, or if not so available, in such manner as furnished by any nationally recognized New York Stock Exchange member firm selected from time to time by the Board of Directors of the Corporation in good faith for that purpose.

"Common Stock" shall mean all shares now or hereafter authorized of any class of common stock of the Corporation and any other stock of the Corporation, howsoever designated, authorized after the Issue Date, which has the right (subject always to prior rights of any class or series of preferred stock) to participate in the distribution of the assets and earnings of the Corporation without limit as to per share amount.

"Conversion Date" shall have the meaning set forth in paragraph 7(b) below.

"Conversion Price" shall initially mean $11.11 unless and until such Conversion Price may be adjusted in accordance with the provisions of paragraph 7(d) below, and thereafter shall mean the Conversion Price from time to time as so adjusted. All adjustments in the Conversion Price shall be rounded to the nearest whole cent.

"Current Market Price" per share of Common Stock on any date shall mean the average of the daily Closing Prices with respect to the Common Stock for the thirty consecutive trading days ending on such date (or, if such date is not a trading day, on the trading day immediately preceding such date); provided, however, that if there shall have occurred prior to such date any event described in paragraph 7(d) that shall have become effective at any time during such thirty trading day period, the Closing Price shall be adjusted, for purposes of calculating such average, to ensure that the effect of such event on the market price of the Common Stock shall, as nearly as possible, be eliminated in order that the distortion in the calculation of the Current Market Price may be minimized. Notwithstanding the foregoing, if the Common Stock is not publicly traded, the Current Market Price shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Corporation.

"Determination Date" shall mean with respect to any dividend or other distribution, the date fixed for the determination of the holders of shares of Common Stock entitled to receive such dividend or distribution, or if a dividend or distribution is paid or made without fixing such a date, the date of such dividend or distribution.

"Dividend Payment Date" shall mean March 31, June 30, September 30 and December 31 of each year.

"Dividend Period" shall mean the quarterly period between consecutive Dividend Payment Dates.

"Effectiveness Date" shall mean the 150th day following the Issue Date.

"Effectiveness Period" shall mean the period during which a registration statement relating to the shares of Series A Preferred Stock is required to be maintained effective pursuant to the Registration Rights Agreement.

"Event" shall be deemed to occur if (i) the Shelf Registration Statement has not been filed on or prior to the Filing Date; (ii) the Shelf Registration Statement has not become effective on or prior to the Effectiveness Date; or
(iii) prior to the end of the Effectiveness Period, the SEC shall have issued a stop order suspending the effectiveness of the Shelf Registration Statement.

"Event Day" shall mean any day if on or prior to such day one or more Events shall have occurred with respect to which there has not yet been an Event Termination.

"Event Termination" shall be deemed to occur, with respect to any Event, if the Shelf Registration Statement is (a) filed, in the case of an Event described in clause (i) of the definition thereof, (b) declared effective, in the case of an Event described in clause (ii) of the definition thereof, or (c) no longer subject to an order suspending the effectiveness thereof, in the case of an Event described in clause (iii) of the definition thereof.

"Filing Date" shall mean the 60th day following the Issue Date.

"Final Redemption Date" shall have the meaning set forth in subparagraph 5(f) below.

"Issue Date" shall mean the date that shares of Series A Preferred Stock are first issued by the Corporation.

"Junior Stock" shall mean the Common Stock and, for purposes of paragraphs 3 and 6 below, any other class or series of capital stock of the Corporation issued after the Issue Date not entitled to receive any dividends in any Dividend Period unless all dividends required to have been paid or declared and set apart for payment on the Series A Preferred Stock shall have been paid and, for purposes of paragraphs 4 and 6 below, any class or series of capital stock of the Corporation issued after the Issue Date not entitled to receive any assets upon any Liquidation until the Series A Preferred Stock shall have received the entire amount to which such stock is entitled upon such Liquidation.

"Liquidation" shall mean the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

"Liquidation Preference" per share of Series A Preferred Stock shall mean $25.00 plus any accretion thereon pursuant to paragraph 2 below.

"Loan Agreements" means (i) the Indenture, dated as of July 31, 1992, among the Corporation, certain of its subsidiaries and United States Trust Company of New York, as trustee, (ii) the Indenture, dated as of June 30, 1987, between the Corporation and Continental Bank, National Association (formerly Continental Illinois National Bank and Trust Company of Chicago), as trustee,
(iii) the Loan and Security Agreement, dated as of May 20, 1993, between Foothill Capital Corporation and the Corporation, and (iv) the Loan and Security Agreement, dated as of May 20, 1993, between Foothill Capital Corporation and Clark Material Handling Company, in each case as amended and in effect on the Issue Date.

"Non-Liquidity Rate" shall mean (a) 0% on any day other than an Event Day,
(b) 0.25% per annum on any Event Day on or prior to the 180th day following the Issue Date and (c) 0.50% per annum on any Event Day after the 180th day following the Issue Date.

"Normal Cash Dividend" shall mean any cash dividend or cash distribution payable out of earned surplus of the Corporation; provided, that the per share amount of such dividend or distribution, together with the aggregate per share amount of all other cash dividends and cash distributions declared or paid during the one year period ending on the date such dividend is declared (the "Declaration Date") does not exceed 4% of the Current Market Price per share of Common Stock on the trading day immediately prior to the Declaration Date.

"Parity Stock" shall mean, for purposes of paragraphs 3 and 6 below, any other class or series of capital stock of the Corporation issued after the Issue Date entitled to receive payment of dividends on a parity with the Series A Preferred Stock and, for purposes of paragraphs 4 and 6 below, any other class or series of capital stock of the Corporation issued after the Issue Date entitled to receive assets upon any Liquidation on a parity with the Series A Preferred Stock.

"Record Date" shall mean, with respect to the dividend payable on March 31, June 30, September 30 and December 31, respectively, of each year, the preceding March 15, June 15, September 15 and December 15, or such other record date designated by the Board of Directors of the Corporation with respect to the dividend payable on such respective Dividend Payment Date.

"Redemption Agent" shall have the meaning set forth in subparagraph 5(e) below.

"Redemption Date" shall have the meaning set forth in subparagraph 5(d) below.

"Registration Rights Agreement" shall mean the Registration Rights Agreement, dated as of the Issue Date, relating to the registration of the Series A Preferred Stock.

"SEC" shall mean the Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

"Senior Stock" shall mean, for purposes of paragraphs 3 and 6 below, any class or series of capital stock of the Corporation issued after the Issue Date ranking senior to the Series A Preferred Stock in respect of the right to receive dividends, and, for purposes of paragraphs 4 and 6 below, any class or series of capital stock of the Corporation issued after the Issue Date ranking senior to the Series A Preferred Stock in respect of the right to receive assets upon any Liquidation.

"Shelf Registration Statement" shall mean the registration statement of the Company relating to the shares of Series A Preferred Stock and the Common Stock issuable upon the conversion thereof that is required to be filed pursuant to the Registration Rights Agreement.

"Warrants" shall mean the Warrants exercisable into shares of Common Stock that were issued on the Issue Date.

2. Liquidation Preference. On the Issue Date the Liquidation Preference of each share of Series A Preferred Stock shall equal $25.00. During the period commencing on the Issue Date and ending on the Accretion Termination Date, the Liquidation Preference will accrete and accrue daily, at the Applicable Rate. Such accretion shall be computed on the basis of a 360-day year and shall compound quarterly on each Dividend Payment Date.

3. Dividends.

(a) Subject to the prior preferences and other rights of any Senior Stock, from and after the Accretion Termination Date, the holders of Series A Preferred Stock shall be entitled to receive, out of funds legally available for that purpose, cash dividends that shall accrue from the Accretion Termination Date at the Applicable Rate. Such dividends shall be cumulative and payable in cash, quarterly, in arrears, when and as declared by the Board of Directors, on each Dividend Payment Date commencing on the first Dividend Payment Date following the Accretion Termination Date. Each such dividend shall be paid to the holders of record of the Series A Preferred Stock as their names appear on the share register of the Corporation on the corresponding Record Date. The holder of a share of Series A Preferred Stock at the close of business on a Record Date shall be entitled to receive the dividend payable thereon on the corresponding Dividend Payment Date notwithstanding the conversion thereof during the period between such Record Date and the corresponding Dividend Payment Date. Dividends on account of arrears for any past Dividend Periods may be declared and paid at any time, without reference to any Dividend Payment Date, to holders of record on such date, not exceeding 50 days preceding the payment date thereof, as may be fixed by the Board of Directors.

(b) If full cash dividends are not paid or made available to the holders of all outstanding shares of Series A Preferred Stock and of any Parity Stock, and funds available shall be insufficient to permit payment in full in cash to all such holders of the preferential amounts to which they are then entitled, the entire amount available for payment of cash dividends shall be distributed among the holders of the Series A Preferred Stock and of any Parity Stock, ratably in proportion to the full amount to which they would otherwise be respectively entitled, and any remainder not paid in cash to the holders of the Series A Preferred Stock shall cumulate as provided in subparagraph 3(c) below.

(c) If, on any Dividend Payment Date, the holders of the Series A Preferred Stock shall not have received the full dividends provided for in the other provisions of this paragraph 3, then such dividends shall cumulate, whether or not earned or declared, with additional dividends thereon for each succeeding full Dividend Period during which such dividends shall remain unpaid. Unpaid dividends for any period less than a full Dividend Period shall cumulate on a day-to-day basis and shall be computed on the basis of a 360-day year.

(d) So long as any shares of Series A Preferred Stock shall be outstanding, the Corporation shall not declare or pay on any Junior Stock any dividend whatsoever, whether in cash, property or otherwise (other than dividends payable in shares of the class or series upon which such dividends are declared or paid), nor shall the Corporation make any distribution on any Junior Stock, nor shall any Junior Stock be purchased or redeemed by the Corporation or any subsidiary of the Company, nor shall any monies be paid or made available for a sinking fund for the purchase or redemption of any Junior Stock; provided that from and after the Accretion Termination Date, the Corporation may declare and pay cash dividends on Junior Stock so long as (i) all dividends to which the holders of Series A Preferred Stock shall have been entitled for all previous Dividend Periods shall have been declared and paid and (ii) on or prior to the later of (x) the third year anniversary of the Issue Date and (y) the one year anniversary of the Accretion Termination Date, the Company will not pay dividends on Common Stock in excess of the Normal Cash Dividend.

4. Distributions Upon Liquidation, Dissolution or Winding Up. In the event of any Liquidation, subject to the prior preferences and other rights of any Senior Stock, but before any distribution or payment shall be made to the holders of Junior Stock, the holders of the Series A Preferred Stock shall be entitled to be paid, out of the assets of the Corporation available for distribution to its stockholders, the Liquidation Preference of all outstanding shares of Series A Preferred Stock as of the date of such Liquidation, plus all accrued and unpaid dividends thereon to such date, in cash. If such payment shall have been made in full to the holders of the Series A Preferred Stock, and if payment shall have been made in full to the holders of any Senior Stock and Parity Stock of all amounts to which such holders shall be entitled, the remaining assets and funds of the Corporation shall be distributed among the holders of Junior Stock, according to their respective shares and priorities. If, upon any such Liquidation, the net assets of the Corporation distributable among the holders of all outstanding shares of the Series A Preferred Stock and of any Parity Stock shall be insufficient to permit the payment in full to such holders of the preferential amounts to which they are entitled, then the entire net assets of the Corporation remaining after the distributions to holders of any Senior Stock of the full amounts to which they may be entitled shall be distributed among the holders of the Series A Preferred Stock and of any Parity Stock ratably in proportion to the full amounts to which they would otherwise be respectively entitled. Neither the consolidation or merger of the Corporation into or with another corporation or corporations, nor the sale of all or substantially all of the assets of the Corporation to another corporation or corporations, shall be deemed a Liquidation within the meaning of this paragraph 4.

5. Redemption by the Corporation.

(a) Except as set forth in paragraph 5(b) below, the Series A Preferred Stock shall not be redeemed in whole or in part prior to December 31, 1994. On and after December 31, 1994, the Series A Preferred Stock may be redeemed by the Corporation in cash at any time in whole or (subject to the last sentence of this paragraph 5(a)), from time to time, in part, at the option of the Corporation, at a per share redemption price equal to the Liquidation Preference per share on the date of redemption plus all accrued but unpaid dividends thereon to and including the date of redemption. If less than all of the outstanding shares of Series A Preferred Stock are to be redeemed, such shares shall be redeemed pro rata or by lot as determined by the Board of Directors in its sole discretion. The Corporation shall not redeem less than all of the outstanding shares of Series A Preferred Stock pursuant to this paragraph 5(a) at any time unless all cumulative dividends on the Series A Preferred Stock for all previous quarterly Dividend Periods have been paid or declared and funds therefor set apart for payment.

(b) The Series A Preferred Stock may be redeemed prior to December 31, 1994 in whole, but not in part, at a per share redemption price equal to the Liquidation Preference per share on the date of redemption plus all accrued but unpaid dividends thereon to and including the date of redemption; provided, that concurrently with such redemption the Corporation redeems all Warrants then outstanding.

(c) The Corporation shall redeem all then outstanding shares of Series A Preferred Stock on or prior to December 31, 2000 at a per share redemption price equal to the Liquidation Preference per share on the date of redemption plus all accrued but unpaid dividends thereon to and including the date of redemption.

(d) Notice of every proposed redemption of Series A Preferred Stock shall be sent by or on behalf of the Corporation, by first class mail, postage prepaid, to the holders of record of the shares of Series A Preferred Stock so to be redeemed at their respective addresses as they shall appear on the records of the Corporation, not less than thirty (30) days nor more than sixty
(60) days prior to the date fixed for redemption (the "Redemption Date") (i) notifying such holders of the election or obligation of the Corporation to redeem such shares of Series A Preferred Stock and of the Redemption Date, (ii) stating the place or places at which the shares of Series A Preferred Stock called for redemption shall, upon presentation and surrender of the certificates evidencing such shares of Series A Preferred Stock, be redeemed, and the redemption price therefor, and (iii) stating the name and address of any Redemption Agent selected by the Corporation in accordance with paragraph 5(e) below, and the name and address of the Corporation's transfer agent for the Series A Preferred Stock.

(e) The Corporation may not act as the redemption agent to redeem the Series A Preferred Stock. The Corporation shall appoint as its agent for such purpose a bank or trust company in good standing, organized under the laws of the United States of America or any jurisdiction thereof, and having capital, surplus and undivided profits aggregating at least Fifty Million Dollars ($50,000,000), which agent may be the Corporation's transfer agent for the Series A Preferred Stock, and may appoint any one or more additional such agents which shall in each case be a bank or trust company in good standing organized under the laws of the United States of America or of any jurisdiction thereof, and having capital, surplus and undivided profits aggregating at least Fifty Million Dollars ($50,000,000). Each such bank or trust company is hereinafter referred to as the "Redemption Agent." Following such appointment and prior to any redemption, the Corporation shall deliver to the Redemption Agent irrevocable written instructions authorizing the Redemption Agent, on behalf and at the expense of the Corporation, to cause such notice of redemption to be duly mailed as herein provided as soon as practicable after receipt of such irrevocable instructions and in accordance with the above provisions. All funds necessary for the redemption shall be deposited with the Redemption Agent in trust at least one business day prior to the Redemption Date, for the pro rata benefit of the holders of the shares of Series A Preferred Stock so called for redemption, so as to be and continue to be available therefor.

(f) If notice of redemption shall have been given as hereinbefore provided, and the Corporation shall not default in the payment of the applicable redemption price, then each holder of shares of Series A Preferred Stock called for redemption shall be entitled to all preferences and relative and other rights accorded to such shares of Series A Preferred Stock until and including the Redemption Date. If the Corporation shall default in making payment or delivery as aforesaid on the Redemption Date, then each holder of the shares called for redemption shall be entitled to all preferences and relative and other rights accorded to such shares of Series A Preferred Stock until and including the date (the "Final Redemption Date") when the Corporation makes payment or delivery as aforesaid to the holders of the Series A Preferred Stock. From and after the Redemption Date or, if the Corporation shall default in making payment or delivery as aforesaid, the Final Redemption Date, the shares of Series A Preferred Stock called for redemption shall no longer be deemed to be outstanding, and all rights of the holders of such shares shall cease and terminate, except the right of the holders of such shares, upon surrender of certificates therefor, to receive amounts to be paid hereunder. The deposit of monies in trust with the Redemption Agent shall be irrevocable except that the Corporation shall be entitled to receive from the Redemption Agent the interest or other earnings, if any, earned on any monies so deposited in trust, and the holders of any shares of Series A Preferred Stock redeemed shall have no claim to such interest or other earnings, and any balance of monies so deposited by the Corporation and unclaimed by the holders of the Series A Preferred Stock entitled thereto at the expiration of one (1) year from the Redemption Date (or the Final Redemption Date, as applicable) shall be repaid, together with any interest or other earnings thereon, to the Corporation, and after any such repayment, the holders of the shares of Series A Preferred Stock entitled to the funds so repaid to the Corporation shall look only to the Corporation for such payment, without interest.

6. Voting Rights.

(a) The holders of the issued and outstanding shares of Series A Preferred Stock shall have no voting rights except as set forth in this paragraph 6 or as otherwise required by law.

(b) In addition to any other rights provided by law, so long as any Series A Preferred Stock is outstanding, the Corporation, without first obtaining the affirmative vote or written consent of the holders of not less than a majority of the then outstanding shares of Series A Preferred Stock, voting separately as a class, will not:

(i) amend or repeal any provision of, or add any provision to, the Corporation's Certificate of Incorporation or By-laws if such action would alter adversely or change the preferences, rights, privileges or powers of, or the restrictions provided for the benefit of, any Series A Preferred Stock, or increase or decrease the number of shares of Series A Preferred Stock authorized hereby;

(ii) authorize or issue shares of any class or series of Senior Stock (or, prior to the date designated as the Warrant Ratio Determination Date pursuant to the terms of the Warrants, any Parity Stock);

(iii) reclassify any class or series of any Junior Stock into Parity Stock or Senior Stock or reclassify any series of Parity Stock into Senior Stock;

(iv) authorize, enter into, or consummate any transaction that would constitute a deemed dividend to holders of the Series A Preferred Stock under United States Federal tax laws (other than any deemed dividend by reason of the operation of paragraph 3 above); or

(v) consolidate with or merge with or into another corporation, other than in a transaction in which the Corporation is the surviving corporation.

(c) From and after the Accretion Termination Date, (i) if and whenever the Corporation shall have failed to declare and pay in cash the full amount of dividends payable on the Series A Preferred Stock on any two (2) Dividend Payment Dates, then (subject to the provisions of the next paragraph) the holders of the Series A Preferred Stock, voting separately as a class, shall be entitled at the next annual meeting of the stockholders of the Corporation or at any special meeting to elect one (1) director, and (ii) if and whenever the Corporation shall have failed to declare and pay in cash the full amount of dividends payable on the Series A Preferred Stock on any four
(4) Dividend Payment Dates, then (subject to the provisions of the next paragraph) the holders of the Series A Preferred Stock, voting separately as a class, shall be entitled at the next annual meeting of the stockholders of the Corporation or at any special meeting to elect two (2) directors. Upon election, such directors shall become additional directors of the Corporation, and the authorized number of directors of the Corporation shall thereupon be automatically increased by such number of directors.

Such right of the holders of Series A Preferred Stock to elect directors may be exercised until all dividends in default on the Series A Preferred Stock shall have been paid in full, and dividends for the current Dividend Period declared and funds therefor set apart or paid, and when so paid and set apart or paid, the right of the holders of Series A Preferred Stock to elect such number of directors shall cease, the term of such directors shall thereupon terminate, and the authorized number of directors of the Corporation shall thereupon return to the number of authorized directors otherwise in effect, but subject always to the same provisions for the vesting of such special voting rights in the case of any such future dividend default or defaults. The fact that dividends have been paid and set apart as required by the preceding sentence shall be evidenced by a certificate executed by the Chairman of the Board or President and the chief financial or accounting officer of the Corporation and delivered to the Board of Directors. The directors so elected by holders of Series A Preferred Stock shall serve until the certificate described in the preceding sentence shall have been delivered to the Board of Directors or until their respective successors shall be elected or appointed and qualify.

At any time when such special voting rights have been so vested in the holders of the Series A Preferred Stock, the Secretary of the Corporation may, and, upon the written request of the holders of record of 10% or more of the number of shares of the Series A Preferred Stock then outstanding addressed to such Secretary at the principal office of the Corporation, shall, call a special meeting of the holders of the Series A Preferred Stock for the election of the directors to be elected by them as hereinabove provided, to be held in the case of such written request within forty (40) days after delivery of such request, and in either case to be held at the place and upon the notice provided by law and in the Corporation's By-Laws for the holding of meetings of stockholders.

7. Conversion Rights: The Series A Preferred Stock shall be convertible into Common Stock as follows:

(a) Conversion. Subject to and upon compliance with the provisions of this paragraph 7, each holder of shares of Series A Preferred Stock shall have the right, at such holder's option, at any time or from time to time, to convert any of such shares of Series A Preferred Stock into fully paid and nonassessable shares of Common Stock upon the terms hereinafter set forth. In case any share of Series A Preferred Stock is called for redemption, such right of conversion shall terminate at the close of business on the day prior to the Redemption Date or, if the Corporation shall default in the payment of the Redemption Price, at the close of business on the day prior to the Final Redemption Date. Each share of Series A Preferred Stock shall be converted into a number of shares of Common Stock determined by dividing (i) $25.00 by
(ii) the Conversion Price in effect on the Conversion Date.

(b) Mechanics of Conversion. The holder of any shares of Series A Preferred Stock may exercise the conversion right specified in paragraph 7(a) above by surrendering to the Corporation or any transfer agent for the Series A Preferred Stock of the Corporation the certificate or certificates for the shares of Series A Preferred Stock so to be converted, accompanied by written notice specifying the number of shares of Series A Preferred Stock so to be converted. Conversion shall be deemed to have been effected on the date when delivery of notice of an election to convert and certificates for shares of Series A Preferred Stock is made and such date is referred to herein as the "Conversion Date." Subject to the provisions of paragraph 7(d)(ix) below, as promptly as practicable (and in any event, within five (5) trading days) thereafter, the Corporation shall issue and deliver to or upon the written order of such holder a certificate or certificates for the number of full shares of Common Stock to which such holder is entitled and a check or cash with respect to any fractional interest in a share of Common Stock as provided in paragraph 7(c) below. The person in whose name the certificate or certificates for Common Stock are to be issued shall be deemed to have become a holder of record of such Common Stock on the applicable Conversion Date. Upon conversion of only a portion of the number of shares of Series A Preferred Stock covered by a certificate representing shares of Series A Preferred Stock surrendered for conversion, the Corporation shall issue and deliver to or upon the written order of the holder of the certificate so surrendered for conversion, at the expense of the Corporation, a new certificate covering the number of shares of Series A Preferred Stock representing the unconverted portion of the certificate so surrendered.

(c) Fractional Shares. No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Series A Preferred Stock. If more than one share of Series A Preferred Stock shall be surrendered for conversion at any one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series A Preferred Stock so surrendered. Instead of any fractional shares of Common Stock that would otherwise be issuable upon conversion of any shares of Series A Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fractional interest of the Current Market Price on the Conversion Date.

(d) Conversion Price Adjustments. The Conversion Price shall be subject to adjustment from time to time as follows:

(i) Common Stock Dividends. If the Corporation shall fix a Determination Date with respect to the payment or making of a dividend or other distribution on its Common Stock exclusively in Common Stock, the Conversion Price in effect as of the opening of business of the day following the Determination Date shall be reduced by multiplying such Conversion Price by a fraction (A) the numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the Determination Date and (B) the denominator of which shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution. If such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price that would then be in effect if such Determination Date had not been fixed.

(ii) Rights. If the Corporation shall fix a Determination Date with respect to the making of a dividend or other distribution on its Common Stock consisting exclusively of rights or warrants entitling the holders thereof to subscribe for or purchase, during a period not exceeding 45 days from the date of such dividend or other distribution, shares of Common Stock at a price per share less than the Current Market Price per share of the Common Stock on the Determination Date, the Conversion Price in effect as of the opening of business on the day following the Determination Date shall be reduced by multiplying such Conversion Price by a fraction (A) the numerator of which shall be the sum of (x) the number of shares of Common Stock outstanding at the close of business on the Determination Date plus (y) the number of shares of Common Stock that the aggregate maximum offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price and (B) the denominator of which shall be the sum of (x) the number of shares of Common Stock outstanding at the close of business on the Determination Date plus (y) the number of shares of Common Stock so offered for subscription or purchase. To the extent such rights or warrants expire and, as a result, shares of Common Stock issuable upon exercise thereof will not be delivered, the Conversion Price shall be readjusted to the Conversion Price that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually issued upon exercise thereof. If such rights or warrants are not so issued, the Conversion Price shall again be adjusted to be the Conversion Price that would then be in effect if such Determination Date had not been fixed.

(iii) Stock-Splits, etc. If outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock or combined into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision or combination becomes effective shall be proportionally reduced or increased, respectively, effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective.

(iv) Other Distributions. If the Corporation shall fix a Determination Date with respect to the making of a dividend or other distribution on its Common Stock (including any such dividend or distribution made in connection with a consolidation or merger in which the Corporation is the continuing corporation, but excluding a dividend or distribution (A) referred to in paragraph 7(d)(i) or (ii) above, or (B) in connection with a Liquidation) consisting of securities other than Common Stock, evidences of its indebtedness, or assets (excluding Normal Cash Dividends, but including all other cash dividends and distributions) (any of the foregoing being hereinafter referred to as "Assets"), then, in each such case the Conversion Price in effect as of the opening of business on the day following the Determination Date shall be reduced by multiplying such Conversion Price by a fraction (x) the numerator of which shall be the Current Market Price per share of the Common Stock on the Determination Date less the fair market value (as determined in the case of Assets other than cash, by a nationally recognized independent investment banking or appraisal firm selected by the Board of Directors of the Corporation) on the Determination Date of the portion of the Assets so distributed applicable to one share of Common Stock and (y) the denominator of which shall be such Current Market Price per share of the Common Stock on the Determination Date; provided however, that in the event the then fair market value (as so determined) of the portion of the Assets so distributed or distributable applicable to one share of Common Stock is equal to or greater than the Current Market Price per share of the Common Stock on the Determination Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of shares of Series A Preferred Stock shall have the right to receive, upon conversion, the amount and kind of such Assets that such holder would have received if such holder had, immediately prior to the Determination Date, converted its shares of Series A Preferred Stock. If such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price that would then be in effect if such Determination Date had not been fixed.

(v) Common Stock Issued at Less Than Current Market Price. If the Corporation shall issue any Common Stock (or securities convertible into or exercisable for, Common Stock) for a consideration per share less than the Current Market Price per share of Common Stock on the date of such issuance (which consideration shall include any compensation received for the issuance of any securities convertible into or exercisable for such Common Stock), the Conversion Price in effect immediately prior to each such issuance shall immediately (except as provided below) be reduced to the price determined by multiplying such Conversion Price by a fraction (A) the numerator of which is the sum of (x) the number of shares of Common Stock outstanding immediately prior to such issuance plus (y) the aggregate consideration received for the issuance of such additional shares (which shall include any compensation received for the issuance of any securities convertible into or exercisable for such Common Stock) divided by such Current Market Price and (B) the denominator of which is the number of shares of Common Stock to be outstanding immediately after such issuance and any subsequent conversion or exchange; provided, that this subsection (v) shall not apply to:

(1) any transaction or distribution for which an adjustment has been made pursuant to any other subparagraph of this paragraph (d),

(2) the conversion or exchange of securities convertible or exchangeable for Common Stock or the exercise of rights or warrants issued to the holders of Common Stock, in each case only if an adjustment was made (or specifically not required to be made) in connection with the issuance of such securities, rights or warrants pursuant to any subparagraph of this paragraph (d),

(3) the conversion of shares of Series A Preferred Stock or the exercise of Warrants,

(4) Common Stock or options to purchase Common Stock issued to directors, officers or employees of the Corporation and its subsidiaries under bona fide benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law (but only to the extent that the aggregate number of shares excluded hereby and issued after the Issue Date shall not exceed 10% of the Common Stock outstanding at the time of the adoption of each such plan, exclusive of antidilution adjustments thereunder), or

(5) Common Stock issued pursuant to a bona fide registered public offering, the manager or managers of which are nationally recognized investment banking firms.

(vi) Voluntary Adjustments. In addition to any other adjustment required hereby, to the extent permitted by law, the Corporation from time to time may reduce the Conversion Price by any amount, for any period of time of at least twenty (20) business days, if the reduction is irrevocable during the period. Whenever the Conversion Price is reduced pursuant to this paragraph
7(d)(vi), the Corporation shall mail to holders of record of the Series A Preferred Stock a notice of the reduction at least fifteen (15) days prior to the date the reduced Conversion Price takes effect, and such notice shall state the reduced Conversion Price and, if applicable, the period it will be in effect.

(vii) Consolidation, Merger, Sale, etc. In case of (a) any consolidation with or merger of the Corporation with or into another corporation, (b) the occurrence of any other transaction or event pursuant to which all or substantially all of the Common Stock is exchanged for, converted into, or acquired for, or constitutes solely the right to receive, cash securities, property or other assets (whether by exchange offer, liquidation, tender offer or otherwise) or (c) the sale, lease or other transfer of all or substantially all of the assets of the Company (collectively such actions being hereinafter referred to as "Reorganizations"), each share of Series A Preferred Stock shall after the date of such Reorganization be convertible into the number of shares of stock or other securities or property (including cash) to which the Common Stock issuable (at the time of such Reorganization) upon conversion of such share of Series A Preferred Stock would have been entitled upon such Reorganization; and in any case, if necessary, the provisions set forth herein with respect to the rights and interests thereafter of the holders of the shares of Series A Preferred Stock shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares of Series A Preferred Stock.

(viii) Rounding of Calculations; Minimum Adjustment. All calculations under this paragraph (d) shall be made to the nearest cent or to the nearest one hundredth (1/100th) of a share, as the case may be. Any provision hereof to the contrary notwithstanding, no adjustment in the Conversion Price shall be made if the amount of such adjustment would be less than $0.05, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.05 or more.

(ix) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any case in which the provisions of this paragraph (d) shall require that an adjustment shall become effective immediately after a Determination Date for an event, the Corporation may defer until the occurrence of such event (A) issuing to the holder of any share of Series A Preferred Stock converted after such Determination Date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such conversion before giving effect to such adjustment and (B) paying to such holder any amount of cash in lieu of a fractional share of Common Stock pursuant to paragraph 7(c), above; provided that the Corporation shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares, and such cash, upon the occurrence of the event requiring such adjustment.

(e) Statement Regarding Adjustments. On or prior to each day on which the Conversion Price shall be adjusted as provided in paragraph (7)(d) above, the Corporation shall (i) file, at the office of each transfer agent for the Series A Preferred Stock and at the principal office of the Corporation, a statement showing in detail the facts requiring such adjustment and the Conversion Price that shall be in effect after such adjustment, which statement shall be certified by a nationally recognized independent public accounting firm, and (ii) cause a copy of such certified statement to be sent by mail, first class postage prepaid, to each holder of shares of Series A Preferred Stock at its address appearing on the Corporation's records. Where appropriate, such copy may be given in advance and may be included as part of a notice required to be mailed under the provisions of paragraph 7(f).

(f) Prior Notice of Certain Events. In case:

(i) the Corporation shall (A) declare any dividend or any other distribution on its Common Stock, (B) declare or authorize a redemption or repurchase of Common Stock, or (C) authorize the granting to all holders of Common Stock of rights or warrants to subscribe for or purchase any shares of stock of any class or of any other rights or warrants; or

(ii) of any reclassification of Common Stock, or of any consolidation or merger to which the Corporation is a party and for which approval of any stockholders of the Corporation shall be required, or of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or other property; or

(iii) of a Liquidation; or

(iv) the Corporation shall propose to take any action that would require an adjustment pursuant to paragraph 7(d);

then the Corporation shall cause to be filed with the transfer agent for, and mailed to the holders of record of, the Series A Preferred Stock, at their last addresses as they shall appear upon the stock transfer books of the Corporation, at least fifteen (15) days prior to the applicable record date hereinafter specified, a notice stating (x) the date on which a record (if any) is to be taken for the purpose of such dividend, distribution, redemption, repurchase or granting of rights or warrants or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, redemption, repurchase, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, share exchange or Liquidation is expected to become effective, and the date, if any, as of which it is expected that holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, share exchange or Liquidation.

(g) Treasury Stock. For the purposes of this paragraph 7, the sale or other disposition of any Common Stock theretofore held in the Corporation's treasury shall be deemed to be an issuance thereof.

(h) Payment of Taxes. The Corporation shall pay all documentary, stamp, transfer and other taxes (other than taxes on income of the holders of shares of Series A Preferred Stock) and other governmental charges attributable to the issuance or delivery of shares of Series A Preferred Stock or of shares of Common Stock upon conversion of shares of Series A Preferred Stock; provided however, that the Corporation shall not be required to pay any taxes payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of the shares of Series A Preferred Stock in respect of which such shares are being issued.

(i) Reservation of Shares; Valid Issuance; Approvals. The Corporation shall (i) reserve at all times so long as any shares of Series A Preferred Stock remain outstanding, free from preemptive rights, out of its treasury stock (if applicable) or its authorized but unissued shares of Common Stock, or both, solely for the purpose of effecting the conversion of the shares of Series A Preferred Stock, sufficient shares of Common Stock to provide for the conversion of all outstanding shares of Series A Preferred Stock, (ii) take all necessary action so that all shares of Common Stock that are issued upon conversion of the shares of the Series A Preferred Stock will, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof, and (iii) take no action which will cause a contrary result (including, without limitation, any action that would cause the Conversion Price to be less than the par value, if any, of the Common Stock).

If any shares of Common Stock reserved for the purpose of conversion of shares of Series A Preferred Stock require registration with or approval of any governmental authority under any Federal or state law before such shares may be validly issued or delivered upon conversion, then the Corporation will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be. If, and so long as, any Common Stock into which the shares of Series A Preferred Stock are then convertible is listed on any national securities exchange, the Corporation will, if permitted by the rules of such exchange, list and keep listed on such exchange, upon official notice of issuance, all shares of such Common Stock issuable upon conversion.

8. Exclusion of Other Rights. Except as may otherwise be required by law, the shares of Series A Preferred Stock shall not have any preferences or relative, participating, optional or other special rights, other than those specifically set forth herein and in the Corporation's Certificate of Incorporation. The shares of Series A Preferred Stock shall have no preemptive or subscription rights.

9. Headings of Subdivisions. The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

10. Severability. If any right, preference or limitation of the Series A Preferred Stock set forth herein (as so amended) is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other rights, preferences and limitations set forth herein (as so amended) which can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall, nevertheless, remain in full force and effect, and no right, preference or limitation herein set forth shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.

11. Status of Reacquired Shares. Shares of Series A Preferred Stock that have been issued and reacquired in any manner shall (upon compliance with any applicable provisions of the laws of the State of Delaware) have the status of authorized and unissued shares of Series A Preferred Stock issuable in series undesignated as to series and may be redesignated and reissued.

ARTICLE V

Holders of shares of stock of the Corporation shall not have any preemptive right to acquire additional, unissued, or treasury shares of the Corporation, or securities of the Corporation convertible into or carrying a right to subscribe to or acquire such shares.

ARTICLE VI

Each holder of record of stock of this Corporation shall be entitled to one (1) vote for each share thereof standing registered in his name on the books of the Corporation. At all elections of directors of the Corporation, each shareholder shall be entitled to vote the shares owned of record by him for him for as many persons as there are directors to be elected, but shall not be entitled to exercise any right of cumulative voting.

ARTICLE VII

The number of directors constituting the Board of Directors of the Corporation shall be such number (one or more) as is fixed from time to time by the By-laws of the Corporation.

ARTICLE VIII

Election of directors need not be by written ballot unless the By-laws of the Corporation shall so provide. The books of the Corporation may be kept
(subject to any provision contained in the General Corporation Law of Delaware)
outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-laws of the Corporation.

ARTICLE IX

In furtherance and not in limitation of the powers conferred by the General Corporation Law of Delaware, the Board of Directors is expressly authorized to make, amend or repeal the By-laws of this Corporation.

ARTICLE X

Section 1. Elimination of Certain Director Liability. No director of this Corporation shall be personally liable to the Corporation or its stockholders for monetary damages or other liabilities for a breach of his fiduciary duty as a director, except for liability (i) for a breach of the director's "duty of loyalty" (as defined herein) to the corporation or its stockholders; (ii) for acts or omissions not in "good faith" (as further defined herein) or which involve intentional misconduct or a knowing violation of the law; (iii) under Section 174 of the General Corporation Law of the State of Delaware; or (iv) for any transaction from which the director derived an improper personal profit; provided, however, that if the director shall be liable solely by reason of this clause (iv), then his or her personal liability shall be limited to the amount of such profit.

Section 2. Definitions.

(a) The Term "duty of loyalty," as used herein, shall mean a breach of fiduciary duty by the director which constitutes a willful failure to deal fairly with the Corporation or its stockholders in connection with a transaction in which the director has a material undisclosed conflict of interest.

(b) In determining whether a director has acted or omitted to act otherwise than in "good faith," as such term is used herein, the authority making such determination shall determine solely whether such director: (i) in the case of conduct in his or her "official capacity" (as defined herein) with the Corporation, believed in the exercise of his or her business judgment that his or her conduct was in the best interests of the Corporation; and (ii) in all other cases, reasonably believed that his or her conduct was at least not opposed to the best interests of the Corporation.

(c) "Official capacity," as such term is used herein, shall mean the office of director in the Corporation, membership on any committee of directors, any other offices in the Corporation held by the director and any other offices in the Corporation held by the director and any other employment or agency relationship between the director and the Corporation; provided, however, that such term, as used herein, shall not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, employee benefit plan, or other enterprise.

Section 3. Subsequent Amendment. If the General Corporation Law of Delaware is hereinafter amended to authorize the further limitation or elimination of the personal liability of a director, or to authorize the limitation or elimination of the personal liability of an officer, then the liability of a director and/or officer of the Corporation shall be limited or eliminated to the fullest extent permitted by the General Corporation Law of Delaware, as so amended, without further authorization by or on behalf of the Corporation. Any repeal, modification or amendment of the foregoing provisions of this Article X by the stockholders of the Corporation shall not adversely affect any right or protection of a director (or officer) of the Corporation existing under this Article X at the time of such repeal, modification or amendment.

ARTICLE XI

The Corporation reserves the right to amend, alter, change or repeal any provision contained herein, in the manner now or hereafter prescribed by statute or herein, and all rights conferred upon stockholders herein are granted subject to this reservation.

In witness whereof, Terex Corporation has caused this certificate to be signed by its President and attested by its Secretary this 24th day of January, 1994.

TEREX CORPORATION

                         By:  /s/ Ronald M. DeFeo
                            Ronald M. DeFeo, President



Attest:



By:   /s/ Marvin B. Rosenberg
   Marvin B. Rosenberg, Secretary


RESTATED

BY-LAWS
OF
TEREX CORPORATION
as of November 9, 1993
ARTICLE I. OFFICES

1.01. Principal and Business Offices. The corporation may have such principal and other business offices, either within or without the State of Delaware, as the Board of Directors may designate or as the business of the corporation may require from time to time.

1.02. Registered Office. The registered office of the corporation required by the Delaware General Corporation Law to be maintained in the State of Delaware may be, but need not be, identical with the principal office in the State of Delaware, and the address of the registered office may be changed from time to time by resolution of the Board of Directors or by the registered agent. The business office of the registered agent of the corporation shall be identical to such registered office.

ARTICLE II. STOCKHOLDERS

2.01. Annual Meeting. The annual meeting of the stockholders shall be held at such time and date as may be fixed by or under the authority of the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the election of directors shall not be held on the day fixed as herein provided for any annual meeting of the stockholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the stockholders as soon thereafter as conveniently may be.

2.02. Special Meeting. Except as otherwise set forth in the certificate of incorporation, special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Board of Directors or by the person or in the manner designated by the Board of Directors.

2.03. Place of Meeting. The Board of Directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. If no designation is made or if a special meeting be otherwise called, the place of meeting shall be at the principal executive offices of the corporation.

2.04. Notice of Meeting. Written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered to each stockholder of record entitled to vote at such meeting not less than ten (10) days (unless a longer period is required by law) nor more than sixty (60) days before the date of the meeting, either personally or by mail, by or at the direction of the President or the Secretary or other officer or persons calling the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the stockholder at his address as it appears on the stock record books of the corporation, with postage thereon prepaid.

2.05. Adjournment. Any meeting may be adjourned to reconvene at any place designated by the vote of a majority of the votes represented by shares thereat. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting. No notice of the time or place of an adjournment need be given if the time and place are announced at the meeting at which an adjournment is taken, unless the adjournment is for more than thirty (30) days or a new record date is fixed for the adjourned meeting, in which case notice of the adjourned meeting shall be given to each stockholder of record entitled to vote thereat. Unless a new record date for the adjourned meeting is fixed, the determination of stockholders of record entitled to notice of or to vote at the meeting at which adjournment is taken shall apply to the adjourned meeting.

2.06. Fixing of Record Date. For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a date as the record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten(10) days before the date of such meeting. For the purpose of determining the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a date as the record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than sixty (60) days prior to such action. For the purpose of determining the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date is fixed, the record date for determining:

(a) stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;

(b) stockholders entitled to express consent to a corporate action in writing without a meeting, when no prior action of the Board of Directors is necessary, shall be the first day on which a signed written consent is delivered to the corporation in accordance with applicable law;

(c) stockholders entitled to express consent to a corporate action in writing without a meeting, when prior action of the Board of Directors is necessary, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and

(d) stockholders for any other purpose shall be the close of business on the day on which the Board of Directorsadopts the resolution relating thereto.

2.07. Voting Records. The officer having charge of the stock transfer books for shares of the corporation shall, at least ten (10) days before each meeting of stockholders, make a complete record of the stockholders entitled to vote at such meeting, arranged in alphabetical order, showing the address of each stockholder, the number of shares of each class of stock of the corporation entitled to vote registered in the name of each stockholder and the total number of votes to which each stockholder is entitled. Such record shall be produced and kept open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held as specified in the notice of the meeting or at the place of the meeting. The record shall also be produced and kept at the time and place of the meeting during the whole time thereof, and maybe inspected by any stockholder present. The original stock transfer books shall be the only evidence as to who are the stockholders entitled to examine such record or transfer books or to vote at any meeting of stockholders.

2.08. Quorum; Required Vote. Except as otherwise provided in the certificate of incorporation, a quorum at a meeting of stockholders will exist if shares of the corporation holding a majority of the votes entitled to be cast at such meeting are represented in person or by proxy, but in no event shall less than one-third of the shares entitled to vote constitute a quorum. In all matters other than the election of directors, the affirmative vote of the holders of a majority of the votes represented at the meeting in person or by proxy voting together as one class shall be the act of the stockholders, unless a greater vote is required by law or the certificate of incorporation. Unless otherwise required by law or the certificate of incorporation, directors shall be elected by a plurality of the votes of shares represented at the meeting in person or by proxy and entitled to vote on the election of directors. Though less than a quorum is represented at a meeting, a majority of the votes represented at the meeting in person or by proxy may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.

2.09. Conduct of Meeting. The Chairman of the Board or, in his absence, the President or, in their absence, a Vice Presidentin the order provided under Section 4.07 or, in their absence, any person chosen by the stockholders present shall call the meeting of the stockholders to order and shall act as chairman of the meeting. The Secretary of the corporation shall act as secretary of all meetings of the stockholders, but in the absence of the Secretary, the presiding officer may appoint any other person to act as secretary of the meeting.

2.10. Proxies. At all meetings of stockholders, a stockholder entitled to vote may vote in person or by proxy appointed in writing by the stockholder or by his duly authorized attorney in fact. Such proxy shall be filed with the Secretaryof the corporation before or at the time of the meeting. Unlessotherwise provided in the proxy and supported by sufficient interest, a proxy may be revoked at any time before it is voted, either by written notice filed with the Secretary or the acting secretary of the meeting or by oral notice given by the stockholder to the presiding officer during the meeting. The presence of a stockholder who has filed his proxy shall not of itself constitute a revocation. No proxy shall be valid after three (3) years from the date of its execution, unless otherwise provided in the proxy. The Board of Directors shall have the power and authority to make rules establishing presumptions as to the validity and sufficiency of proxies.

2.11. Voting of Shares. Each outstanding share of stock of the corporation shall be entitled to that number of votes, if any, upon each matter submitted to a vote at a meeting of stockholders as provided in or in accordance with the certificate of incorporation.

2.12. Voting of Shares by Certain Holders.

(a) other Corporations. Shares standing in the name of another corporation may be voted either in person or by proxy, by the president of such corporation or any other officer appointed by such president. A proxy executed by any principal officer of such other corporation or assistant thereto shall be conclusive evidence of the signer's authority to act, in the absence of express notice to this corporation, given in writing to the Secretary of this corporation, of the designation of some other person by the board of directors or the by-laws of such other corporation.

(b) Legal Representatives and Fiduciaries. Shares held by any administrator, executor, guardian, conservator, trustee in bankruptcy, receiver, or assignee for creditors may be voted by duly executed proxy, without a transfer of such shares to his name. Shares standing in the name of a fiduciary may be voted by him, either in person or by proxy. A proxy executed by a fiduciary shall be conclusive evidence of the signer's authority to act in the absence of express notice to this corporation, given in writing to the Secretary of this corporation, that such manner of voting is expressly prohibited or otherwise directed by the document creating the fiduciary relationship.

(c) Pledgees. A stockholder whose shares are pledged shall be entitled to vote such shares unless in the transfer of the shares the pledger has expressly authorized the pledgee to vote the shares and thereafter the pledgee or his proxy shall be entitled to vote the shares so transferred.

(d) Treasury Stock and Subsidiaries. Neither treasury shares, nor shares held by another corporation if a majority of the shares entitled to vote for the election of directors of such other corporation is held by this corporation, shall be voted at any meeting or counted in determining the total number of outstanding shares entitled to vote, but shares of its own issue held by this corporation in a fiduciary capacity or held by such other corporation in a fiduciary capacity maybe voted and shall be counted in determining the total number of outstanding shares entitled to vote.

(e) Joint Holders. Shares of record in the names of two or more persons or shares to which two or more persons have the same fiduciary relationship, unless the Secretary of the corporation is given notice otherwise and furnished with a copy of the instrument creating the relationship, may be voted as follows:

(i) If voted by an individual, his vote binds all holders.

(ii) If voted by more than one holder, the majority vote binds all, unless the vote is evenly split in which case the shares may be voted proportionally, or according to the ownership interest as shown in the instrument filed with the Secretary of the corporation.

.13. Waiver of Notice by Stockholders. Whenever any notice whatever is required to be given to any stockholder of the corporation under the certificate of incorporation or by-laws or any provision of the Delaware General Corporation Law, a waiver thereof in writing, signed at any time, whether before or after the time of meeting, by the stockholder entitled to such notice, shall be deemed equivalent to the giving of such notice. Attendance of a person at a meeting shall constitute waiver of notice of such meeting, except when the person attends for the express purpose of objecting to the transaction of any business. Neitherthe business nor purpose of any regular or special meeting of stockholders, directors or members of a committee of directors need be specified in the waiver.

2.14. Stockholders Consent without Meeting. Except as otherwise set forth in the certificate of incorporation, any action required or permitted by the certificate of incorporation or by-laws or any provision of law to be taken at a meeting of the stockholders, may be taken without a meeting, prior notice, or vote, if a consent, or consents, in writing, setting forth the action so taken, shall be signed by, and bear the date(s) of signature of, the number of stockholders required to authorize such action at a meeting and shall be delivered to the corporation in accordance with applicable law. If the action is authorized by less than unanimous consent, notice of the action shall be given to nonconsenting stockholders.

ARTICLE III. BOARD OF DIRECTORS

3.01. General Powers and Number. The business and affairs of the corporation shall be managed by its Board of Directors. The Board of Directors shall consist of three or more members, the number thereof to be determined from time to time by resolution of the Board of Directors.

3.02. Tenure and Oualifications. Except as otherwise set forth in the certificate of incorporation, each director shall hold office until the next annual meeting of stockholders and until his successor shall have been elected and qualified, or until his prior death, resignation or removal. Except as otherwise set forth in the certificate of incorporation, a director may be removed from office by affirmative vote of a majority of the votes represented by outstanding shares entitled to vote for the election of such director taken at a meeting of stockholders called for that purpose. A director may resign at any time by filing his written resignation with the Secretary of the corporation. Directors need not be residents of the State of Delawareor stockholders of the corporation.

3.03. Regular Meetings. A regular meeting of the Board of Directors shall be held without other notice than this by-law immediately after the annual meeting of stockholders and each adjourned session thereof. The place of such regular meeting shall be the same as the place of the meeting of stockholders which precedes it, or such other suitable place as may be announced at such meeting of stockholders. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Delaware, for the holding of additional regular meetings without other notice than such resolution.

3.04. Special Meetings. Except as otherwise set forth in the certificate of incorporation, special meetings of the Boardof Directors may be called by or at the request of the Chairmanof the Board, President, Secretary or any two (2) directors. Theindividuals calling any special meeting of the Board of Directors may fix any place, either within or without the State of Delaware, as the place for holding any special meeting of the Board of Directors called by them, and if no other place is fixed the place of the meeting shall be at the principal executive offices of the corporation.

3.05. Notice; Waiver. Notice of each meeting of the Boardof Directors (unless otherwise provided in or pursuant to Section3.03) shall be given by written notice delivered personally or mailed or given by telegram to each director at his business address or at such other address as such director shall have designated in writing filed with the Secretary, in each case not less than seventy-two (72) hours prior thereto. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. Ifnotice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Whenever any notice whatever is required to be given to any director of the corporation under the certificate of incorporation or by-laws or any provision of law, a waiver thereof in writing, signed at any time, whether before or after the time of meeting, by the director entitled to such notice, shall be deemed equivalent to the giving of such notice. Theattendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting and objects thereat to the transaction of any business because the meeting is not lawfully called or convened. Neitherthe business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

3.06. Quorum. Except as otherwise provided by law or by the certificate of incorporation or these by-laws, a majority of the directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but in no event shall less than one-third of the directors constitute a quorum. A majority of the directors present (though less than such quorum) may adjourn the meeting from time to time without further notice.

3.07. Manner of Acting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by law or by the certificate of incorporation or these by-laws.

3.08. Conduct of Meetings. The Chairman of the Board or, in his absence, the President or, in their absence, any director chosen by the directors present, shall call meetings of the Boardof Directors to order and shall act as chairman of the meeting. The Secretary of the corporation shall act as secretary of all meetings of the Board of Directors but in the absence of the Secretary, the presiding officer may appoint any Assistant Secretary or any director or other person present to act as secretary of the meeting.

3.09. Vacancies. Except as otherwise set forth in the certificate of incorporation, any vacancy occurring in the Boardof Directors, including a vacancy created by an increase in the number of directors, may be filled until the next succeeding annual election by the affirmative vote of a majority of the directors then in office, though less than a quorum of the Boardof Directors; provided, that in case of a vacancy created by the removal of a director by vote of the stockholders, the stockholders shall have the right to fill such vacancy at the same meeting or any adjournment thereof, except as otherwise set forth in the certificate of incorporation.

3.10. Compensation. The Board of Directors, by affirmative vote of a majority of the directors then in office, and irrespective of any personal interest of any of its members, may establish reasonable compensation of all directors for services to the corporation as directors, officers or otherwise, or may delegate such authority to an appropriate committee. The Board of Directors also shall have authority to provide for or delegate authority to an appropriate committee to provide for reasonable pensions, disability or death benefits, and other benefits or payments, to directors, officers and employees and to their estates, families, dependents or beneficiaries on account of prior services rendered by such directors, officers and employees to the corporation.

3.11. Presumption of Assent. Solely for the purposes of Section 174 of the Delaware General Corporation Law, a director of the corporation who is present at a meeting of the Board of Directors or a committee thereof of which he is a member at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.

3.12. Committees. The Board of Directors by resolution adopted by the affirmative vote of a majority of the authorized number of directors may designate one or more committees, each committee to consist of one or more directors elected by the Board of Directors, which to the extent provided in said resolution as initially adopted and as thereafter supplemented or amended by further resolution adopted by a like vote, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it. Each such committee shall fix its own rules governing the conduct of its activities and shall make such reports to the Board of Directors of its activities as the Boardof Directors may request.

3.13. Unanimous Consent without Meeting. Any action required or permitted by the certificate of incorporation or by-laws or any provision of law to be taken by the Board of Directors at a meeting or by a resolution of any committee thereof may be taken without a meeting if a consent in writing, setting forth the action so taken, filed with the minutes of the proceedings, shall be signed by all of the directors then in office.

ARTICLE IV. OFFICERS

4.01. Number. The principal officers of the corporation shall be a Chairman of the Board, a President, one or more Vice Presidents, a Secretary and a Treasurer, each of whom shall be elected by the Board of Directors. Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board of Directors. Any number of offices maybe held by the same person.

4.02. Election and Term of Office. The officers of the corporation to be elected by the Board of Directors shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the stockholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Each officer shall hold office until his successors shall have been duly elected or until his prior death, resignation or removal. Any officer may resign at any time upon written notice to the corporation. Failure to elect officers shall not dissolve or otherwise affect the corporation.

4.03. Removal. Any officer or agent may be removed by the Board of Directors whenever in its judgment the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment shall not of itself create contract rights.

4.04. Vacancies. A vacancy in any principal office because of death, resignation, removal, disqualification or otherwise, shall be filled by the Board of Directors for the unexpired portion of the term.

4.05. The Chairman of the Board. The Chairman of the Boardshall be the chief executive officer of the corporation and, subject to the control of the Board of Directors, shall in general supervise and control all of the business and affairs of the corporation. He shall, when present, preside at all meetings of the stockholders and of the Board of Directors. He shall have authority, subject to such rules as may be prescribed by the Board of Directors, to appoint such agents and employees of the corporation as he shall deem necessary, to prescribe their powers, duties and compensation, and to delegate authority to them. Such agents and employees shall hold office at the discretion of the Chairman of the Board. He shall have authority to sign, execute and acknowledge, on behalf of the corporation, all deeds, mortgages, bonds, stock certificates, contracts, leases, reports and all other documents or instruments necessary or proper to be executed in the course of the corporation's regular business or which shall be authorized by resolution of the Board of Directors; and, except as otherwise provided by law or the Board of Directors, he may authorize the President or any other officer or agent of the corporation to sign, execute and acknowledge such documents or instruments in his place and stead. In general, he shall perform all duties incident to the office of Chairman of the Board and such other duties as may be prescribed by the Board of Directors from time to time.

4.06. The President. The President shall be the chief operating officer of the corporation and, subject to the control of the Board of Directors, shall assist the Chairman of the Boardin supervising and controlling all of the business and affairs of the corporation. In the absence of the Chairman of the Board or in the event of his death, inability or refusal to act, or in the event for any reason it shall be impracticable for the chairman of the Board to act personally, the President shall perform the duties of the Chairman of the Board and, when so acting, shall have all the powers of and be subject to all the restrictions upon the Chairman of the Board. He shall, in the absence of the Chairman of the Board, when present, preside at all meetings of the stockholders and of the Board of Directors. He shall have authority, subject to such rules as may be prescribed by the Board of Directors and to the approval of the Chairman of the Board, to appoint such agents and employees of the corporation as he shall deem necessary, to prescribe their powers, duties and compensation, and to delegate authority to them. Such agents and employees shall hold office at the discretion of the President. He shall have authority to sign, execute and acknowledge, on behalf of the corporation, all deeds, mortgages, bonds, stock certificates, contracts, leases, reports and all other documents or instruments necessary or proper to be executed in the course of the corporation's regular business, or which shall be authorized by resolution of the Board of Directors; and, except as otherwise provided by law or the Board of Directors, he may authorize any Vice President or other officer or agent of the corporation to sign, execute and acknowledge such documents or instruments in his place and stead. In general, he shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time.

4.07. The Vice Presidents. In the absence of the Presidentor in the event of his death, inability or refusal to act, or in the event for any reason it shall be impracticable for the President to act personally, the Vice President (or, in the event there shall be more than one Vice President, the Vice Presidentsin the order designated by the Board of Directors, or in the absence of such designation, then in the order of their election) shall perform the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign, with the Secretary or Assistant Secretary, certificates for shares of the corporation; and shall perform such other duties and have such authority as from time to time may be delegated or assigned to him by the President or the Board of Directors. Theexecution of any instrument of the corporation by any Vice President shall be conclusive evidence, as to third parties, of his authority to act in the stead of the President.

4.08. The Secretary. The Secretary shall: (a) keep the minutes of the meetings of the stockholders and the Board of Directors in one or more books provided for the purpose; (b) attest instruments to be filed with the Secretary of State; (c) see that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (d) be custodian of the corporate records and of the seal of the corporation, if any, and see that the seal of the corporation, if any, is affixed to all documents the execution of which on behalf of the corporation under its seal is duly authorized; (e) keep or arrange for the keeping of a register of the post office address of each stockholder which shall be furnished to the Secretary by such stockholders;
(f) sign with the Chairman of the Board, the President or any Vice President certificates for shares of the corporation the issuance of which shall have been authorized by resolution of the Board of Directors; (g) have general charge of the stock transfer books of the corporation; and (h) in general perform all duties incident to the office of the Secretary and have such other duties and exercise such authority as from time to time may be delegated or assigned to him by the President or by the Board of Directors.

4.09. The Treasurer. The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation;
(b) receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Section5.04; and (c) in general perform all of the duties and exercise such other authority as from time to time may be delegated or assigned to him by the President or by the Board of Directors. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine.

4.10. Assistant Secretaries and Assistant Treasurers There shall be such number of Assistant Secretaries and Assistant Treasurers as the Board of Directors may from time to time authorize. The Assistant Secretaries may sign with the Presidentor any Vice President certificates for shares of the corporation the issuance of which shall have been authorized by a resolution of the Board of Directors. The Assistant Treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties and have such authority as shall from time to time be delegated or assigned to them by the Secretary or the Treasurer, respectively, or by the President or the Board of Directors.

4.11. Other Assistants and Acting Officers. The Board of Directors shall have the power to appoint any person to act as assistant to any officer, or as agent for the corporation in his stead, or to perform the duties of such officer whenever for any reason it is impracticable for such officer to act personally, and such assistant or acting officer or other agent so appointed by the Board of Directors shall have the power to perform all the duties of the office to which he is so appointed to be an assistant, or as to which he is so appointed to act, except as such power may be otherwise defined or restricted by the Board of Directors.

4.12. Salaries. The salaries of the principal officers shall be fixed from time to time by the Board of Directors or by a duly authorized committee thereof, and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation.

ARTICLE V. CONTRACTS, LOANS, CHECKS AND
DEPOSITS: SPECIAL CORPORATE ACTS

5.01. Contracts. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contractor execute or deliver any instrument in the name of and on behalf of the corporation, and such authorization may be general or confined to specific instances. In the absence of other designation, all deeds, mortgages and instruments or assignment or pledge made by the corporation shall be executed in the name of the corporation by the Chairman of the Board, the President or any Vice President and by the Secretary, an Assistant Secretary,the Treasurer or an Assistant Treasurer; the Secretary or an Assistant Secretary, when necessary or required, shall affix the corporate seal, if any, thereto; and when so executed no other party to such instrument or any third party shall be required to make any inquiry into the authority of the signing officer or officers.

5.02. Loans. No indebtedness for borrowed money shall be contracted on behalf of the corporation and no evidence of such indebtedness shall be issued in its name unless authorized by or under the authority of a resolution of the Board of Directors. Such authorization may be general or confined to specific instances.

5.03. Checks, Drafts, etc. All cheeks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by or under the authority of a resolution of the Boardof Directors.

5.04. Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as may be selected by or under the authority of a resolution of the Board of Directors.

5.05. Voting of Securities Owned by this Corporation. Subject always to the specific directions of the Board of Directors, (a) any shares or other securities issued by any other corporation and owned or controlled by this corporation may be voted at any meeting of security holders of such other corporation by the Chairman of the Board of this corporation if he be present, or in his absence by the President of this corporation if he be present, or in their absence by any Vice President of this corporation who may be present, and (b) whenever, in the judgment of the Chairman of the Board or in his absence, of the President, or in their absence, of any Vice President, it is desirable for this corporation to execute a proxy or written consent in respect to any shares or other securities issued by any other corporation and owned by this corporation, such proxy or consent shall be executed in the name of this corporation by the Chairman of the Board, the Presidentor one of the Vice Presidents of this corporation, without necessity of any authorization by the Board of Directors,affixation of corporate seal, if any, or countersignature or attestation by another officer. Any person or persons designated in the manner above stated as the proxy or proxies of this corporation shall have full right, power and authority to vote the shares or other securities issued by such other corporation and owned by this corporation the same as such shares or other securities might be voted by this corporation.

ARTICLE VI. CERTIFICATES FOR SHARES
AND THEIR TRANSFER

6.01. Certificates for Shares. Certificates representing shares of the corporation shall be in such form, consistent with law, as shall be determined by the Board of Directors. Suchcertificates shall be signed by the Chairman of the Board, the President or any Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books for the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for alike number of shares shall have been surrendered and cancelled, except as provided in Section 6.06.

6.02. Facsimile Signatures. The signatures of any officers of the corporation upon a certificate may be facsimiles if the certificate is manually signed on behalf of a transfer agent, or a registrar, other than the corporation itself or an employee of the corporation.

6.03. Signature by Former Officers. In case any officer, who has signed or whose facsimile signature has been placed upon any certificate for shares, shall have ceased to be such officer

before such    certificate is issued, it may be issued by the
corporation    with the same effect as if he were such officer at
the date of    its issue.

     6.04.     Transfer of Shares.  Prior to due presentment of a certificate

for shares for registration of transfer the corporation may treat the registered owner of such shares as the person exclusively entitled to vote, to receive notifications and otherwise to have and exercise all the rights and power of an owner. Where a certificate for shares is presented to the corporation with a request to register for transfer, the corporation shall not be liable to the owner or any other person suffering loss as a result of such registration of transfer if (a) there were on or with the certificate the necessary endorsements, and (b) the corporation had no duty to inquire into adverse claims or has discharged any such duty. The corporation may require reasonable assurance that said endorsements are genuine and effective and in compliance with such other regulations as may be prescribed by or under the authority of the Board of Directors. Where a transfer of shares is made for collateral security, and not absolutely, it shall be so expressed in the entry of transfer if, when the shares are presented, both the transferor and the transferee so request.

6.05. Restrictions on Transfer. The face or reverse side of each certificate representing shares shall bear a conspicuous notation of any restriction imposed by the corporation upon the transfer of such shares. Otherwise the restriction is invalid except against those with actual knowledge of the restrictions.

6.06. Lost, Destroyed or Stolen Certificates. Where the owner claims that his certificates for shares have been lost, destroyed or wrongfully taken, a new certificate shall be issued in place thereof if the owner (a) so requests before the corporation has notice that such shares have been acquired by a bona fide purchaser, and (b) files with the corporation a sufficient indemnity bond, and (c) satisfies such other reasonable requirements as may be prescribed by or under the authority of the Board of Directors.

6.07. Consideration of Shares. The shares of the corporation may be issued for such consideration as shall be fixed from time to time by the Board of Directors, consistent with the law of the State of Delaware.

6.08. Stock Regulations. The Board of Directors shall have the power and authority to make all such further rules and regulations not inconsistent with the statutes of the State of Delaware as it may deem expedient concerning the issue, transfer and registration of certificates representing shares of the corporation.

ARTICLE VII. SEAL

7.01. The Board of Directors may provide for a corporate seal in an appropriate form or may provide that the corporation shall have no seal.

ARTICLE VIII. AMENDMENTS

8.01. By Stockholders. Except as otherwise set forth herein or in the certificate of incorporation, these by-laws maybe adopted, amended or repealed by the stockholders entitled to vote at the stockholders annual meeting without prior notice, or at any other meeting provided the amendment under consideration has been set forth in the notice of meeting, by the affirmative vote of not less than a majority of the votes present or represented by outstanding shares at any meeting at which a quorum is in attendance.

8.02. By Directors. Except as otherwise set forth herein or in the certificate of incorporation, these by-laws may be adopted, amended or repealed by the directors as provided in the certificate of incorporation by the affirmative vote of a majority of the Board of Directors at any meeting at which a quorum is present, but no by-laws adopted by the stockholders shall be amended or repealed by the Board of Directors if the by-laws so provide.

8.03. Implied Amendments. Any action taken or authorized by the Board of Directors which would be inconsistent with these by-laws, but is taken or authorized by the affirmative vote of not less than the number of votes or the number of directors required to amend the by-laws to conform with such action, shall be given the same effect as though the by-laws had been temporarily amended or suspended so far, but only so far, as is necessary to permit the specific action so taken or authorized.

ARTICLE IX. INDEMNIFICATION

9.01. Mandatory Indemnification.

(a) In all cases other than those set forth in Section9.01b hereof and subject to the conditions and limitations set forth hereinafter in this Article IX, the Corporation shall indemnify and hold harmless any person who is or was a party, or is threatened to be made a party, to any Action (see
Section 9.16of this Article IX for definitions of capitalized terms used herein) by reason of his or her status as an Executive and/or as to acts performed in the course of such Executive's duties to the Corporation and/or an Affiliate, against Liabilities and reasonable Expenses incurred by or on behalf of an Executive in connection with any Action, including, without limitation, in connection with the investigation, defense, settlement or appeal of any Action; provided, that it is not determined by the Authority, or by a court, pursuant to Section 9.03 that the Executive engaged in misconduct which constitutes a Breach of Duty.

(b) To the extent an Executive has been successful on the merits or otherwise in connection with any Action, including, without limitation, the settlement, dismissal, abandonment or withdrawal of any such Action where the Executive does not pay, incur or assume any material Liabilities, or in connection with any claim, issue or matter therein, he or she shall be indemnified by the Corporation against reasonable Expensesincurred by or on behalf of him or her in connection therewith. The Corporation shall pay such Expenses to the Executive (net of all Expenses, if any, previously advanced to the Executivepursuant to Section 9.02), or to such other person or entity as the Executive may designate in writing to the Corporation, within ten (10) days after the receipt of the Executive's written request therefor, without regard to the provisions of Section9.03. In the event the Corporation refuses to pay such requested Expenses the Executive may petition a court to order the Corporation to make such payment pursuant to Section 9.04.

(c) Notwithstanding any other provision contained in this Article IX to the contrary, the Corporation shall not:

(i) indemnify, contribute or advance Expenses to an Executive with respect to any Action initiated or brought voluntarily by the Executive and not by way of defense, except with respect to Actions:

(1) brought to establish or enforce a right to indemnification, contribution and/or an advance of Expenses under
Section 9.04 of this Article IX,under the Statute as it may then be in effect or under any other applicable statute or law or otherwise as required;

(2) initiated or brought voluntarily by an Executive to the extent such Executive is successful on the merits or otherwise in connection with such an Action in accordance with and pursuant to
Section 9.O1b of this Article IX;or

(3) as to which the Board determines it be appropriate.

(ii) indemnify an Executive against judgments, fines or penalties incurred in a Derivative Action if the Executive is finally adjudged liable to the Corporation by a court (unless the court before which such Derivative Action was brought determines that the Executive is fairly and reasonably entitled to indemnity for any or all of such judgments, fines or penalties); or

(iii) indemnify an Executive under this Article IXfor any amounts paid in settlement of any Actioneffected without the Corporation's written consent.

The Corporation shall not settle any Action in any manner which would impose any Liabilities or other type of limitation on the Executive without the Executive's written consent. Neither the Corporation nor the Executive shall unreasonably withhold their consent to any proposed settlement.

(d) in Executive's conduct with respect to an employee benefit plan sponsored by or otherwise associated with the Corporation and/or an Affiliate for a purpose he or she reasonably believes to be in the interests of the participants in and beneficiaries of such plan is conduct that does not constitute a breach or failure to perform his or her duties to the Corporation or an Affiliate, as the case may be.

9.02. Advance for Expenses.

(a) The Corporation shall pay to an Executive, or to such other person or entity as the Executive may designate in writing to the Corporation, his or her reasonable Expenses incurred by or on behalf of such Executive in connection with any Action, or claim, issue or matter associated with any such Action, in advance of the final disposition or conclusion of any such Action(or claim, issue or matter associated with any such Action),within ten
(10) days after the receipt of the Executive's written request therefor; provided, the following conditions are satisfied:

(i) the Executive has first requested an advance of such Expenses in writing (and delivered a copy of such request to the Corporation) from the insurance carrier(s), if any, to whom a claim has been reported under an applicable insurance policy purchased by the corporation and each such insurance carrier, if any, has declined to make such an advance;

(ii) the Executive furnishes to the Corporation an executed written certificate affirming his or her good faith belief that he or she has not engaged in misconduct which constitutes a Breach of Duty; and

(iii) the Executive furnishes to the Corporation an executed written agreement to repay any advances made under this Section 9.02 if it is ultimately determined that he or she is not entitled to be indemnified by the Corporation for such Expenses pursuant to this Article IX.

(b) If the Corporation makes an advance of Expenses to an Executive pursuant to this Section 9.02, the Corporation shall be subrogated to every right of recovery the Executive may have against any insurance carrier from whom the Corporation has purchased insurance for such purpose.

9.03. Determination of Right to Indemnification.

(a) Except as otherwise set forth in this Section 9.03 or in Section
9.O1c, any indemnification to be provided to an Executive by the Corporation under Section la of this Article IXupon the final disposition or conclusion of any Action, or any claim, issue or matter associated with any such Action, unless otherwise ordered by a court, shall be paid by the Corporation to the Executive (net of all Expenses, if any, previously advanced to the Executive pursuant to Section 9.02), or to such other person or entity as the Executive may designate in writing to the Corporation, within sixty (60) days after the receipt of the Executive's written request therefor. Such request shall include an accounting of all amounts for which indemnification is being sought. No further corporate authorization for such payment shall be required other than this Section 9.03a.

(b) Notwithstanding the foregoing, the payment of such requested indemnifiable amounts pursuant to Section 9.01a may be denied by the Corporation if:

(i) the Board by a majority vote thereof determines that the Executive has engaged in misconduct which constitutes a Breach of Duty; or

(ii) a majority of the directors of the Corporationis party in interest to such Action.

(c) In either event of nonpayment pursuant to Section9.03b, the Board shall immediately authorize and direct, by resolution, that an independent determination be made as to whether the Executive has engaged in misconduct which constitutes a Breach of Duty and, therefore, whether indemnification of the Executive is proper pursuant to this Article IX.

(d) Such independent determination shall be made, at the option of the Executive(s) seeking indemnification, by (i) a panel of three arbitrators (selected as set forth below in Section 9.03f from the panels of arbitrators of the American Arbitration Association) in Milwaukee, Wisconsin, in accordance with the Commercial Arbitration Rules then prevailing of the American Arbitration Association; (ii) an independent legal counsel mutually selected by the Executive(s) seeking indemnification and the Board by a majority vote of a quorum thereof consisting of directors who were not parties in interest to such Action (or, if such quorum is not obtainable, by the majority vote of the entire Board); or (iii) a court in accordance with
Section 9.04 of this Article IX.

(e) In any such determination there shall exist are buttable presumption that the Executive has not engaged in misconduct which constitutes a Breach of Duty and is, therefore, entitled to indemnification hereunder. The burden of rebutting such presumption by clear and convincing evidence shall be on the Corporation.

(f) If a panel of arbitrators is to be employed hereunder, one of such arbitrators shall be selected by the Board by a majority vote of a quorum thereof consisting of directors who were not parties in interest to such Action (or, if such quorum is not obtainable, by an independent legal counsel chosen by the majority vote of the entire Board), the second by the Executive(s) seeking indemnification and the third by the previous two arbitrators.

(g) The Authority shall make its independent determination hereunder within sixty (60) days of being selected and shall simultaneously submit a written opinion of its conclusions to both the Corporation and the Executive.

(h) If the Authority determines that an Executive is entitled to be indemnified for any amounts pursuant to this Article IX, the Corporation shall pay such amounts to the Executive (net of all Expenses, if any, previously advanced to the Executive pursuant to Section 9.02), including interest thereon as provided in Section 9.06c, or to such other person or entity as the Executive may designate in writing to the Corporation, within ten (10) days of receipt of such opinion.

(i) The Expenses associated with the indemnification process set forth in this Section 9.03, including, without limitation, the Expenses of the Authority selected hereunder, shall be paid by the Corporation.

9.04. Court-Ordered Indemnification and Advance for Expenses.

(a) An Executive may, either before or within two years after a determination, if any, has been made by the Authority,petition the court before which such Action was brought or any other court of competent jurisdiction to independently determine whether or not he or she has engaged in misconduct which constitutes a Breach of Duty and is, therefore, entitled to indemnification under the provisions of this Article IX. Suchcourt shall thereupon have the exclusive authority to make such determination unless and until such court dismisses or otherwise terminates such proceeding without having made such determination. An Executive may petition a court under this
Section 9.04 either to seek an initial determination by the court as authorized by Section 9.03d or to seek review by the court of a previous adverse determination by the Authority.

(b) The court shall make its independent determination irrespective of any prior determination made by the Authority;provided, however, that there shall exist a rebuttable presumption that the Executive has not engaged in misconduct which constitutes a Breach of Duty and is therefore entitled to indemnification hereunder. The burden of rebutting such presumption by clear and convincing evidence shall be on the Corporation.

(c) In the event the court determines that an Executive has engaged in misconduct which constitutes a Beach of Duty, it may nonetheless order indemnification to be paid by the Corporationif it determines that the Executive is fairly and reasonably entitled to indemnification in view of all of the circumstances of such Action.

(d) In the event the Corporation does not (i) advance Expenses to the Executive within ten (10) days of such Executive's compliance with Section 9.02; or (ii) indemnify an Executive with respect to requested Expenses under
Section 9.01bwithin ten (10) days of such Executive's written request therefor, the Executive may petition the court before which such Action was brought, if any, or any other court of competent jurisdiction to order the Corporation to pay such reasonable Expenses immediately. Such court, after giving any notice it considers necessary, shall order the Corporation to pay such Expenses if it determines that the Executive has complied with the applicable provisions of section 9.02 or 9.01b, as the case may be.

(e) If the court determines pursuant to this Section 9.04that the Executive is entitled to be indemnified for any Liabilities and/or Expenses, or to the advance of Expenses,unless otherwise ordered by such court, the Corporation shall pay such Liabilities and/or Expenses to the Executive (net of all Expenses, if any, previously advanced to the Executive pursuant to
Section 9.02), including interest thereon as provided in Section 9.06c or to such other person or entity as the Executivemay designate in writing to the Corporation, within ten (10) days of the rendering of such determination.

(f) An Executive shall pay all Expenses incurred by such Executive in connection with the judicial determination provided in this Section 9.04, unless it shall ultimately be determined by the court that he or she is entitled, in whole or in part, to be indemnified by, or to receive an advance from, the Corporation as authorized by this Article IX. All Expenses incurred by an Executive in connection with any subsequent appeal of the judicial determination provided for in this Section 9.04 shall be paid by the Executive regardless of the disposition of such appeal.

9.05. Termination of an Action Is Nonconclusive. Theadverse termination of any Action against an Executive by judgment, order, settlement or conviction, or upon a plea of no contest or its equivalent, shall not, of itself, create a presumption that the Executive has engaged in misconduct which constitutes a Breach of Duty.

9.06. Partial Indemnification; Reasonableness; Interest.

(a) If it is determined by the Authority, or by a court, that an Executive is entitled to indemnification as to some claims, issues or matters, but not as to other claims, issues or matters, involved in any Action, the Authority, or the court, shall authorize the proration and payment by the Corporation of such Liabilities and/or reasonable Expenses with respect to which indemnification is sought by the Executive, among such claims, issues or matters as the Authority, or the court, shall deem appropriate in light of all of the circumstances of such Action.

(b) If it is determined by the Authority, or by a court, that certain Expenses incurred by or on behalf of an Executiveare for whatever reason unreasonable in amount, the Authority, or the court, shall nonetheless authorize indemnification to be paid by the Corporation to the Executive for such Expenses as the Authority, or the court, shall deem reasonable in light of all of the circumstances of such Action.

(c) Interest shall be paid by the Corporation to an Executive, to the extent deemed appropriate by the Authority, or by a court, at a reasonable interest rate, for amounts for which the Corporation indemnifies or advances to the Executive.

9.07. Insurance; Subrogation.

(a) The Corporation may purchase and maintain insurance on behalf of any person who is or was an Executive of the Corporation, and/or is or was serving as an Executive of an Affiliate, against Liabilities and/or Expenses asserted against him or her and/or incurred by or on behalf of him or her in any such capacity or arising out of his or her status as such an Executive, whether or not the Corporation would have the power to indemnify him or her against such Liabilities and/or Expensesunder this Article IX or under the Statute as it may then be in effect. Except as expressly provided herein, the purchase and maintenance of such insurance shall not in any way limit or affect the rights And obligations of the Corporation and/or any Executive under this Article IX. Such insurance may, but need not, be for the benefit of all Executives of the Corporation and those serving as an Executive of an Affiliate.

(b) If an Executive shall receive payment from any insurance carrier or from the plaintiff in any Action against such Executive in respect of indemnified amounts after payments on account of all or part of such indemnified amounts have been made by the Corporation pursuant to this Article IX, such Executive shall promptly reimburse the Corporation for the amount, if any, by which the sum of such payment by such insurance carrier or such plaintiff and payments by the Corporation to such Executive exceeds such indemnified amounts; provided, however, that such portions, if any, of such insurance proceeds that are required to be reimbursed to the insurance carrier under the terms of its insurance policy, such as deductible, retention or co-insurance amounts, shall not be deemed to be payments to such Executive hereunder.

(c) Upon payment of indemnified amounts under this Article IX, the Corporation shall be subrogated to such Executive'srights against any insurance carrier in respect of such indemnified amounts and the Executive shall execute and deliver any and all instruments and/or documents and perform any and all other acts or deeds which the Corporation shall deem necessary or advisable to secure such rights. The Executive shall do nothing to prejudice such rights of recovery or subrogation.

9.08. Witness Expenses. The Corporation shall advance or reimburse any and all reasonable Expenses incurred by or on behalf of an Executive in connection with his or her appearance as a witness in any Action at a time when he or she has not been formally named a defendant or respondent to such an Action, within ten (10) days after the receipt of an Executive's written request therefor.

9.09. Contribution.

(a) Subject to the limitations of this Section 9.09, if the indemnity provided for in Section 9.01 of this Article IX is unavailable to an Executive for any reason whatsoever, the corporation, in lieu of indemnifying the Executive, shall contribute to the amount incurred by or on behalf of the Executive, whether for Liabilities and/or for reasonable Expensesin connection with any Action in such proportion as deemed fair and reasonable by the Authority, or by a court, in light of all of the circumstances of any such Action, in order to reflect:

(i) the relative benefits received by the Corporation and the Executive as a result of the event(s) and/or transactions) giving cause to such Action; and/or

(ii) the relative fault of the Corporation (and its other Executives, employees and/or agents) and the Executive in connection with such event(s) and/or transactions).

(b) The relative fault of the Corporation (and its other Executives, employees and/or agents) on the one hand, and of the Executive, on the other hand, shall be determined by reference to, among other things, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such Liabilities and/or Expenses. The Corporation agrees that it would not be just and equitable if contribution pursuant to this Section 9.09 were determined by pro rata allocation or any other method of allocation which does not take into account the foregoing equitable considerations.

(c) An Executive shall not be entitled to contribution from the Corporation under this Section 9.09 in the event it is determined by the Authority, or by a court, that the Executivehas engaged in misconduct which constitutes a Breach of Duty.

(d) The Corporation's payment of, and an Executive's right to, contribution under this Section 9.09 shall be made and determined in accordance with and pursuant to the provisions in Sections 9.03 and/or 9.04 of this Article IX relating to the Corporation's payment of, and the Executive's right to, indemnification under this Article IX.

9.10. Indemnification of Employees. Unless otherwise specifically set forth in this Article IX, the Corporation shall indemnify and hold harmless any person who is or was a party, or is threatened to be made a party to any Action by reason of his or her status as, or the fact that he or she is or was an employee or authorized agent or representative of the Corporationand/or an Affiliate as to acts performed in the course and within the scope of such employees, agent's or representatives duties to the Corporation and/or an Affiliate, in accordance with and to the fullest extent permitted by the Statute as it may then be in effect.

9.11. Severability. If any provision of this Article IXshall be deemed invalid or inoperative, or if a court of competent jurisdiction determines that any of the provisions of this Article IX contravenes public policy, this Article IX shall be construed so that the remaining provisions shall not be affected, but shall remain in full force and effect, and any such provisions which are invalid or inoperative or which contravene public policy shall be deemed, without further Action or deed by or on behalf of the Corporation, to be modified, amended and/or limited, but only to the extent necessary to render the same valid and enforceable, and the Corporation shall indemnify and hold harmless an Executive as to Liabilities and reasonable Expenses with respect to any Action to the full extent permitted by any applicable provision of this Article IX that shall not have been invalidated and to the full extent otherwise permitted by the Statute as it may then be in effect.

9.12. Nonexclusivity of Article IX. The right to indemnification, contribution and advancement of Expensesprovided to an Executive by this Article IX shall not be deemed exclusive of any other rights to indemnification, contribution and/or advancement of Expenses which any Executive or other employee or agent of the Corporation and/or of an Affiliate maybe entitled under any charter provision, written agreement, resolution, vote of stockholders or disinterested directors of the Corporation or otherwise, including, without limitation, under the Statute as it may then be in effect, both as to acts in his or her official capacity as such Executive or other employee or agent of the Corporation and/or of an Affiliate or as to acts in any other capacity while holding such office or position, whether or not the Corporation would have the power to indemnify, contribute and/or advance Expenses to the Executive under this Article Ix or under the Statute:
provided that it is not determined that the Executive or other employee or agent has engaged in misconduct which constitutes a Breach of Duty.

9.13. Notice to the Corporation; Defense of Actions.

(a) An Executive shall promptly notify the Corporation in writing upon being served with or having actual knowledge of any citation, summons, complaint, indictment or any other similar document relating to any Action which may result in a claim of indemnification, contribution or advancement of Expenses hereunder, but the omission so to notify the Corporation will not relieve the Corporation from any liability which it may have to the Executive otherwise than under this Agreement unless the Corporation shall have been irreparably prejudiced by such omission.

(b) With respect to any such Action as to which an Executive notifies the Corporation of the commencement thereof:

(i) The Corporation shall be entitled to participate therein at its own expense; and

(ii) Except as otherwise provided below, to the extent that it may wish, the Corporation (or any other indemnifying party, including any insurance carrier, similarly notified by the Corporation or the Executive)shall be entitled to assume the defense thereof, with counsel selected by the Corporation (or such other indemnifying party) and reasonably satisfactory to the Executive.

(c) After notice from the Corporation (or such other indemnifying party) to the Executive of its election to assume the defense of an Action, the Corporation shall not be liable to the Executive under this Article IX for any Expenses subsequently incurred by the Executive in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. The Executive shall have the right to employ his or her own counsel in such Action but the Expenses of such counsel incurred after notice from the Corporation (or such other indemnifying party) of its assumption of the defense thereof shall be at the expense of the Executive unless (i) the employment of counsel by the Executive has been authorized by the corporation;
(ii) the Executive shall have reasonably concluded that there may be a conflict of interest between the Corporation(or such other indemnifying party) and the Executive in the conduct of the defense of such Action; or (iii) the Corporation(or such other indemnifying party) shall not in fact have employed counsel to assume the defense of such Action, in each of which cases the Expenses of counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any Derivative Action or any Action as to which the Executive shall have made the conclusion provided for in clause (ii) above.

9.14. Continuity of Rights and Obligations. The terms and provisions of this Article IX shall continue as to an Executivesubsequent to his or her Termination Date and such terms and provisions shall inure to the benefit of the heirs, estate, executors and administrators of such Executive and the successors and assigns of the Corporation, including, without limitation any successor to the Corporation by way of merger, consolidation and/or sale or disposition of all or substantially all of the assets or capital stock of the Corporation. Except as provided herein, all rights and obligations of the Corporation and the Executive hereunder shall continue in full force and effect despite the subsequent amendment or modification of the Corporation's Certificate of Incorporation, as it is in effect on the date hereof, and such rights and obligations shall not be affected by any such amendment or modification, any resolution of directors or stockholders of the Corporation, or by any other corporate action which conflicts with or purports to amend, modify, limit or eliminate any of the rights or obligations of the Corporation and/or of the Executive hereunder.

9.15. Amendment. This Article IX may only be altered, amended or repealed by the affirmative vote of a majority of the stockholders of the Corporation so entitled to vote; provided, however, that the Board may alter or amend this Article IXwithout such stockholder approval if any such alteration or amendment:

(a) is made in order to conform to any amendment or revision of the Delaware General Corporation Law,including, without limitation, the Statute, which (i) expands or permits the expansion of an Executive'sright to indemnification thereunder; (ii) limits or eliminates, or permits the limitation or elimination ,of the liability of the Executives; or (iii) is otherwise beneficial to the Executives; or

(b) in the sole judgment and discretion of the Board, does not materially adversely affect the rights and protections of the stockholders of the Corporation.

Any repeal, modification or amendment of this Article IXshall not adversely affect any rights or protections of an Executive existing under this Article IX immediately prior to the time of such repeal, modification or amendment.

9.16. Certain Definitions. The following terms as used in this Article IX shall be defined as follows:

(a) "Action(s)" shall include, without limitation, any threatened, pending or completed action, claim, litigation, suitor proceeding, whether civil, criminal, administrative arbitrative or investigative, whether predicated on foreign, federal, state or local law, whether brought under and/or predicated upon the Securities Act of 1933, as amended, and/or the Securities Exchange Act of 1934, as amended, and/or their respective state counterparts and/or any rule or regulation promulgated thereunder, whether a Derivative Action and/or whether formal or informal.

(b) "Affiliate" shall include, without limitation, any corporation, partnership, joint venture, employee benefit plan, trust, or other similar enterprise that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Corporation.

(c) "Authority" shall mean the panel of arbitrators or independent legal counsel selected pursuant to Section 9.03 of this Article IX.

(d) "Board" shall mean the Board of Directors of the Corporation.

(e) "Breach of Duty" shall mean the Executive breached or failed to perform his or her duties to the Corporation or an Affiliate, as the case may be, and the Executive's breach of or failure to perform those duties constituted:

(i) a breach of his or her "duty of loyalty" (as defined herein) to the Corporation or its stockholders;

(ii) acts or omissions not in "good faith" (as further defined herein) or which involve intentional misconduct or a knowing violation of the law;

(iii) a violation of Section 174 of the Delaware General Corporation Law; or

(iv) a transaction from which the Executivederived an improper direct personal financial profit (unless such profit is determined to be immaterial in light of all the circumstances).

In determining whether an Executive has acted or omitted to act otherwise than in "good faith," as such term is used herein, the Authority, or the court, shall determine solely whether such Executive (i) in the case of conduct in his or her "official capacity" (as defined herein) with the Corporation, believed in the exercise of his or her business judgment that his or her conduct was in the best interests of the Corporation; and (ii) in all other cases reasonably believed that his or her conduct was at least not opposed to the best interests of the Corporation.

(f) "Derivative Action" shall mean any Action brought by or in the right of the Corporation and/or an Affiliate.

(g) "Duty of loyalty" shall mean a breach of fiduciary duty by an Executive which constitutes a willful failure to deal fairly with the Corporation or its stockholders in connection with a transaction in which the Executive has a material undisclosed personal conflict of interest.

(h) "Executive(s)" shall mean any individual who is, was or has agreed to become a director and/or officer of the Corporationand/or an Affiliate.

(i) "Expenses" shall include, without limitation, any and all expenses, fees, costs, charges, attorneys' fees and disbursements, other out-of-pocket costs, reasonable compensation for time spent by the Executive in connection with the Action for which he or she is not otherwise compensated by the Corporation,any Affiliate, any third party or other entity and any and all other direct and indirect costs of any type or nature whatsoever.

(j) "Liabilities" shall include, without limitation, judgments, amounts incurred in settlement, fines, penalties and, with respect to any employee benefit plan, any excise tax or penalty incurred in connection therewith, and any and all other liabilities of every type or nature whatsoever.

(k) "Official capacity" shall mean the


THIRD SUPPLEMENTAL INDENTURE dated as of April 20, 1993 between TEREX CORPORATION, a Delaware corporation (the "Company"), and CONTINENTAL BANK, NATIONAL ASSOCIATION (formerly known as Continental Illinois National Bank and Trust Company of Chicago) (the "Trustee").

WHEREAS, the Company, and Clark Equipment Limited, a Kentucky corporation, Terex Equipment Limited, an entity organized under the laws of Scotland, and Clark Equipment GmbH, an entity organized under the laws of Germany (collectively, the "Guarantors"), as guarantors, and the Trustee are parties to an Indenture dated as of June 30, 1987 providing for the issuance of the Company's 13-1/2% Senior Subordinated Notes due July 1, 1997 (the "Securities"), as amended by the First Supplemental Indenture dated as of August 24, 1988 and the Second Supplemental Indenture dated as of July 31, 1992 (together, the "Indenture");

WHEREAS, the Company, the Guarantors and the Trustee desire to amend the Indenture, pursuant to Section 9.01 thereof, to correct certain ambiguities, defects and inconsistencies in the Indenture to the extent permitted by the Trust Indenture Act of 1939; and

WHEREAS, the definition of "Intangible Assets" as defined and used in the definition of "Tangible Net Worth" in
Section 1.01 of the Indenture should be clarified so that the parenthetical in clause (i) thereof includes all write-ups, capitalized costs and adjustments in connection with the Acquisition or the financing thereof.

NOW, THEREFORE, the Company, the Guarantors and the Trustee agree as follows for the equal and ratable benefit of the Holders of the Securities.

ARTICLE 1

AMENDMENT TO THE INDENTURE

Section 1.01.

The definition of "Tangible Net Worth" in Section 1.01 of the Indenture is hereby amended by inserting the following sentence at the end of such definition:

"Notwithstanding any provision herein to the contrary, Intangible Assets shall not include any write-ups, any capitalized costs or any adjustments in connection with the Clark Acquisition or the financing and refinancing consummated concurrently therewith including, without limitation, debt discount, issue and financing costs, goodwill and other intangibles resulting from or arising in connection with the Clark Acquisition or such financing and refinancing."

ARTICLE 2

MISCELLANEOUS

Section 2.01.

The amendment to the Indenture effected hereby shall be binding upon all Holders of the Securities, their transferees and assigns. All Securities issued and outstanding on the date hereof shall be deemed to incorporate by reference or include the amendment to the Indenture effected hereby.

Section 2.02.

All terms used in this Third Supplemental Indenture which are defined in the Indenture shall have the meanings specified in the Indenture unless the context of this Third Supplemental Indenture otherwise requires.

Section 2.03.

This Third Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement.

Section 2.04.

The recitals contained in this Third Supplemental Indenture are made by the Company and not by the Trustee and all of the provisions contained in the Indenture, in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect thereof as fully and with like effect as if set forth herein in full.


SIGNATURES

Dated as of April 20, 1993         TEREX CORPORATION



                                   By__________________________
                                     Name:
                                     Title:
ATTEST:


____________________________

Dated as of April 20, 1993         CONTINENTAL BANK, NATIONAL
                                     ASSOCIATION
                                        (formerly known as
                                        CONTINENTAL ILLINOIS
                                        NATIONAL BANK AND TRUST
                                        COMPANY OF CHICAGO),
                                        as Trustee

By___________________________ Name:


Title:

ATTEST:



GUARANTORS:

Dated as of April 20, 1993         CLARK EQUIPMENT LIMITED



                                   By:_____________________________
                                      Name:
                                      Title:
ATTEST:


___________________________
                                   TEREX EQUIPMENT LIMITED

By:_____________________________ Name:


Title:

ATTEST:


CLARK EQUIPMENT GmbH

By:_____________________________
Name:
Title:

ATTEST:





TEREX CORPORATION

$50,000,000

13-1/2% Senior Subordinated Notes

due July 1, 1997


THIRD SUPPLEMENTAL INDENTURE

Dated as of April 20, 1993


CONTINENTAL BANK, NATIONAL ASSOCIATION

(FORMERLY KNOWN AS CONTINENTAL ILLINOIS NATIONAL BANK AND
TRUST COMPANY OF CHICAGO), as Trustee




FOURTH SUPPLEMENTAL INDENTURE dated as of August __, 1993 between TEREX CORPORATION, a Delaware corporation (the "Company"), and CONTINENTAL BANK, NATIONAL ASSOCIATION (formerly known as Continental Illinois National Bank and Trust Company of Chicago) (the "Trustee").

WHEREAS, the Company, and Clark Equipment Limited, a Kentucky corporation, Terex Equipment Limited, an entity organized under the laws of Scotland, and Clark Material Handling GmbH, an entity organized under the laws of Germany (collectively, the "Guarantors"), as guarantors, and the Trustee are parties to an Indenture dated as of June 30, 1987 providing for the issuance of the Company's 13-1/2% Senior Subordinated Notes due July 1, 1997 (the "Securities"), as amended by the First Supplemental Indenture dated as of August 24, 1988, the Second Supplemental Indenture dated as of July 31, 1992 and the Third Supplemental Indenture dated as of April 20, 1993 (collectively, the "Indenture");

WHEREAS, the Company, the Guarantors and the Trustee desire to amend the Indenture to provide for the maintenance by the Company of certain amounts of Collateral (as such term is defined in the Indenture).

NOW, THEREFORE, the Company, the Guarantors and the Trustee agree as follows for the equal and ratable benefit of the holders of the Securities ("Holders").

ARTICLE 1

AMENDMENT TO THE INDENTURE

Section 1.01.

The Indenture is hereby modified by the addition of a new Section 4.18 to read in its entirety as follows:

Section 4.18. Maintenance of Collateral

(a) If the Company's Value of the Collateral (defined below) on the last day of any fiscal quarter (the "Collateral Deficiency Date") is not greater than the Minimum Collateral Amount (defined below), then the Company shall, no later than 65 days after a Collateral Deficiency Date (110 days if a Collateral Deficiency Date is also the end of the Company's fiscal year), make an offer to purchase (a "Collateral Offer"), in cash, (i) first, Senior Secured Notes and (ii) second, if no Senior Secured Notes are then outstanding, Securities from all Holders, in either case in an aggregate principal amount equal to the greater of (i) 10% of the principal amount of Senior Secured Notes or Securities, as the case may be, issued and outstanding and (ii) the aggregate principal amount of Senior Secured Notes or Securities, as the case may be, that if purchased in full would result in a pro forma Collateral Coverage Ratio as of such Collateral Deficiency Date of greater than the Minimum Collateral Amount (the "Collateral Offer Amount"), at a purchase price equal to 100% of the principal amount thereof, plus accrued interest to the Collateral Payment Date. Any purchase of Securities pursuant to a Collateral Offer shall be subject to the subordination provisions and limitations of Article 10 hereof.

(b) Each Collateral Offer for Securities shall remain open for a period of twenty (20) Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "Collateral Offer Period"). No later than five (5) Business Days after the termination of the Collateral Offer Period (the "Collateral Payment Date"), the Company shall purchase the Securities tendered, up to the Collateral Offer Amount, or, if less than such Collateral Offer Amount has been tendered, all Securities tendered in response to such Collateral Offer.

(c) If the Collateral Payment Date is on or after a record date with respect to the payment of interest and on or before the related interest payment date, any accrued interest will be paid to the person in whose name a Security is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Securities pursuant to a Collateral Offer.

(d) The Company shall provide the Trustee with notice of a Collateral Offer for Senior Secured Notes or Securities, as the case may be, at least ten (10) days before the notice of any such Collateral Offer is mailed to Holders. In the event of a Collateral Offer for Senior Secured Notes, the Company shall also provide the Trustee with a copy of the notice to holders of Senior Secured Notes (the "Senior Holders") advising them of the Collateral Offer at such time as the notice of such Collateral Offer is mailed to Senior Holders.

(e) Upon the commencement of any Collateral Offer for Securities, the Company or the Trustee shall send, by first class mail, a notice to each Holder at its registered address as it appears in the Securities register maintained by the Registrar. The notice shall, to the extent permitted by applicable law, be accompanied by a copy of the information regarding the Company which is (or would be, if the Company were subject to the reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act")) required to be contained in a Quarterly Report on Form 10-Q for the fiscal quarter ending on the Collateral Deficiency Date if such fiscal quarter is one of the Company's first three fiscal quarters. If such fiscal quarter is the Company's last fiscal quarter, a copy of the information which is (or would be, if the Company were subject to the reporting requirements of the Exchange Act) required to be contained in an Annual Report on Form 10-K (including any financial statements or other information required to be included or incorporated by reference therein) for the fiscal year ending with such fiscal quarter shall either accompany the notice or be delivered to Holders not less than fifteen (15) days before the Collateral Payment Date. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to such Collateral Offer. The notice, which shall govern the terms of such Collateral Offer, shall state:

(1) that the Collateral Offer is being made pursuant to this Section 4.18 and the length of time the Collateral Offer will remain open;

(2) the Collateral Offer Amount of Securities subject to the Collateral Offer, the purchase price (including the amount of accrued interest) and the Collateral Payment Date;

(3) that any Security not tendered or accepted for payment will continue to accrue interest;

(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Collateral Offer shall cease to accrue interest after the Collateral Payment Date;

(5) that Holders electing to have a Security purchased pursuant to the Collateral Offer will be required to surrender the Security with the form entitled "Option of Holder to Elect Purchase" on the reverse of such Security completed, to the Paying Agent at the address specified in the notice before the expiration of the Collateral Offer Period;

(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the expiration of the Collateral Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Securities or Senior Secured Notes such Holder delivered for purchase and a statement that such Holder is withdrawing his election to have the Securities purchased;

(7) that, if the aggregate principal amount of Securities surrendered by Holders exceeds the Collateral Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis (with such adjustment as may be deemed appropriate by the Company so that only Securities in denominations of $1,000, or integral multiples thereof, shall be purchased); and

(8) that Holders whose Securities were purchased only in part will be issued new Securities equal in principal amount to the unpurchased portion of such Securities surrendered.

Each such Collateral Offer shall comply with all applicable provisions of Federal and state laws regulating tender offers, and any provisions of this Indenture that conflict with such laws shall be deemed to be superseded by the provisions of such laws.

(f) On or before a Collateral Payment Date, the Company shall (i) accept for payment on a pro rata basis the Collateral Offer Amount of Securities tendered pursuant to the Collateral Offer, or such lesser amount as shall have been tendered, (ii) deposit with the Paying Agent money sufficient to pay the purchase price (including accrued interest) of all Securities or portions thereof so accepted, (iii) deliver or cause the Paying Agent to deliver to the Trustee, the Securities so accepted and (iv) deliver to the Trustee an Officers' Certificate stating that such Securities or portions thereof are accepted for payment by the Company in accordance with the terms of this Section 4.18 and that sufficient funds have been deposited with the Paying Agent to pay the purchase price (including accrued interest) of such Securities or portions thereof accepted for payment. The Paying Agent shall promptly (but in any case not later than five (5) days after the Collateral Payment Date) mail or deliver to each tendering Holder an amount equal to the purchase price (including accrued interest) of the Securities tendered by such Holder and accepted by the Company for payment, and the Trustee shall promptly authenticate and mail or deliver to such Holders new Securities equal in principal amount to any unpurchased portion of the Securities surrendered. Any Securities not so accepted shall be promptly mailed or delivered by the Company to the respective Holders thereof. The Company will, or will cause the Trustee to, notify the Holders of the results of the Collateral Offer on the Collateral Payment Date.

(g) In the event that upon completion of a Collateral Offer the Value of the Collateral is not at least equal to the Minimum Aggregate Value, the Company shall take such action as may be necessary to cause the Value of the Collateral to be equal to or greater than the Minimum Aggregate Value.

(h) "Collateral Coverage Ratio" means, at any date, the ratio of (x) the aggregate value, on such date, of the net inventory, net fixed assets and securities of Fruehauf ("Fruehauf Securities") that constitute Collateral securing the Securities pursuant to valid and continuing first priority perfected Liens, calculated in the following manner: (i) net inventory and net fixed assets shall be valued at the net book value thereof, as determined in accordance with GAAP and reflected on the consolidated balance sheet of the Company as at such date; provided that net inventory shall be adjusted to exclude the effect of any LIFO reserves; and (ii) Fruehauf Securities shall be valued (A) in the case of Common Stock, par value $.01 per share, at the average of the daily Closing Price for the thirty (30) consecutive trading days prior to such date (after adjusting for all reclassifications, stock-splits, stock dividends or distributions, and similar actions) (the "Fair Market Value"), (B) in the case of securities exercisable for such Common Stock (other than securities representing indebtedness or preferred stock), at the Fair Market Value of the number of shares of such Common Stock for which such securities may be exercised less the applicable aggregate exercise price,
(C) in the case of indebtedness of Fruehauf, at the lower of the book value (as reflected on the consolidated financial statements of the Company in accordance with GAAP), principal amount or face amount thereof and (D) in the case of preferred stock of Fruehauf, at the lower of book value (as reflected on the consolidated financial statements of the Company in accordance with GAAP), liquidation preference or redemption price (the "Value of the Collateral") to (y) the greater of (i) the aggregate principal amount of Securities outstanding on such date and (ii) the aggregate principal amount of Senior Secured Notes outstanding on such date.

(i) "Minimum Collateral Amount" means a Value of the Collateral equal to the greater of (i) an amount resulting in a 1.75 Collateral Coverage Ratio and (ii) an amount (the "Minimum Aggregate Value") equal to or greater than 115% of the aggregate principal amount of and accrued interest on the Securities and Senior Secured Notes then outstanding.

(j) "Closing Price" means for any trading day:

(i) if the Fruehauf Common Stock is then traded on a national securities exchange (A) its last sales price on such date, or (B) if there was no sale on such date, the last sales price on the next preceding trading day on which there was a sale, all as made available over the Consolidated Last Sale Reporting System of Consolidated Tape Association Plan, or (C) if the Fruehauf Common Stock is not then eligible for reporting over such system, its last sales price on such national securities exchange or, if there was no sale on such date, on the next preceding trading day on which there was a sale on such exchange; or

(ii) if the Fruehauf Common Stock is not then traded on a national securities exchange but is quoted on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), (A) the last sale price reported on NASDAQ or (B) if the Fruehauf Common Stock is a security for which last sale prices are not reported on NASDAQ, the average of the closing bid and asked quotations, in each case on such date; provided, that if the relevant NASDAQ price or quotation did not exist on such date, then the price or quotation on the next preceding trading day on which there was such a price or quotation; or

(iii) if the Fruehauf Common Stock is not then traded on a national securities exchange or quoted on NASDAQ, the average of the bid and asked quotations as quoted in any of The Wall Street Journal, the National Quotation Bureau, Inc. pink sheets, quotation sheets of registered market makers and, if necessary, dealers' quotations; or if a Closing Price as of such date cannot be determined on the basis of any of the foregoing methods of valuation, the Current Market Price as of such date of determination shall be determined in good faith by an independent investment banking firm of nationally recognized standing.

ARTICLE 2

MISCELLANEOUS

Section 2.01.

The amendment to the Indenture effected hereby shall be binding upon all Holders of the Securities, their transferees and assigns. All Securities issued and outstanding on the date hereof shall be deemed to incorporate by reference or include the amendment to the Indenture effected hereby.

Section 2.02.

All terms used in this Fourth Supplemental Indenture which are defined in the Indenture shall have the meanings specified in the Indenture unless the context of this Fourth Supplemental Indenture otherwise requires.

Section 2.03.

This Fourth Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement.

Section 2.04.

The recitals contained in this Fourth Supplemental Indenture are made by the Company and not by the Trustee and all of the provisions contained in the Indenture, in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect thereof as fully and with like effect as if set forth herein in full.

SIGNATURES

Dated as of August __, 1993        TEREX CORPORATION



                                   By:__________________________
                                      Name:
                                      Title:

ATTEST:


____________________________

Dated as of August __, 1993        CONTINENTAL BANK, NATIONAL
                                       ASSOCIATION
                                   (formerly known as
                                   CONTINENTAL ILLINOIS
                                   NATIONAL BANK AND TRUST
                                   COMPANY OF CHICAGO),
                                   as Trustee

By:___________________________ Name:


Title:

ATTEST:



GUARANTORS:

Dated as of August __, 1993        CLARK EQUIPMENT LIMITED



                                   By:_____________________________
                                      Name:
                                      Title:

ATTEST:


___________________________

TEREX EQUIPMENT LIMITED

By:_____________________________
Name:
Title:

ATTEST:


CLARK MATERIAL HANDLING GmbH
(formerly known as Clark Equipment
GmbH)

By:_____________________________
Name:
Title:

ATTEST:





TEREX CORPORATION

$50,000,000

13-1/2% Senior Subordinated Notes

due July 1, 1997


FOURTH SUPPLEMENTAL INDENTURE

Dated as of August __, 1993


CONTINENTAL BANK, NATIONAL ASSOCIATION

(FORMERLY KNOWN AS CONTINENTAL ILLINOIS NATIONAL BANK AND
TRUST COMPANY OF CHICAGO), as Trustee




SECOND SUPPLEMENTAL INDENTURE dated as of April 20, 1993 between TEREX CORPORATION, a Delaware corporation (the "Company"), and UNITED STATES TRUST COMPANY OF NEW YORK, a New York corporation (the "Trustee").

WHEREAS, the Company, and Clark Material Handling Company, a Kentucky corporation, Terex Equipment Limited, an entity organized under the laws of Scotland and Clark Equipment GmbH, an entity organized under the laws of Germany (collectively, the "Guarantors"), as guarantors, and the Trustee have executed an Indenture dated as of July 31, 1992 providing for the issuance of the Company's 13% Senior Secured Notes due August 1, 1996 (the "Securities"), as amended by the First Supplemental Indenture dated as of November 1, 1992 (together, the "Indenture");

WHEREAS, the Company, the Guarantors and the Trustee desire to amend the Indenture, pursuant to Section 9.01 thereof, to correct certain ambiguities, defects and inconsistencies in the Indenture to the extent permitted by the Trust Indenture Act of 1939; and

WHEREAS, the definition of "Intangible Assets" in
Section 1.01 of the Indenture should be clarified so that the parenthetical in clause (i) thereof includes all write-ups, capitalized costs and adjustments in connection with the Acquisition or the financing thereof.

NOW, THEREFORE, the Company, the Guarantors and the Trustee agree as follows for the equal and ratable benefit of the Holders of the Securities.

ARTICLE 1

AMENDMENT TO THE INDENTURE

Section 1.01.

The definition of "Intangible Assets" in Section 1.01 of the Indenture is hereby amended by inserting the following sentence at the end of such definition:

"Notwithstanding any provision herein to the contrary, Intangible Assets shall not include any write-ups, any capitalized costs or any adjustments in connection with the Acquisition or the financing and refinancing consummated concurrently therewith including, without limitation, debt discount, issue and financing costs, goodwill and other intangibles resulting from or arising in connection with the Acquisition or such financing and refinancing."

ARTICLE 2

MISCELLANEOUS

Section 2.01.

The amendment to the Indenture effected hereby shall be binding upon all Holders of the Securities, their transferees and assigns. All Securities issued and outstanding on the date hereof shall be deemed to incorporate by reference or include the amendment to the Indenture effected hereby.

Section 2.02.

All terms used in this Second Supplemental Indenture which are defined in the Indenture shall have the meanings specified in the Indenture unless the context of this Second Supplemental Indenture otherwise requires.

Section 2.03.

This Second Supplemental Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement.

Section 2.04.

The recitals contained in this Second Supplemental Indenture are made by the Company and not by the Trustee and all of the provisions contained in the Indenture, in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect thereof as fully and with like effect as if set forth herein in full.


SIGNATURES

Dated as of April 20, 1993         TEREX CORPORATION



                                   By__________________________
                                     Name:
                                     Title:
ATTEST:


____________________________

Dated as of April 20, 1993 UNITED STATES TRUST COMPANY OF

NEW YORK, as Trustee

By___________________________
Name:
Title:

ATTEST:



GUARANTORS:

Dated as of April 20, 1993         CLARK MATERIAL HANDLING COMPANY



                                   By:_____________________________
                                      Name:
                                      Title:
ATTEST:


___________________________
                                   TEREX EQUIPMENT LIMITED

By:_____________________________ Name:


Title:

ATTEST:


CLARK EQUIPMENT GmbH

By:_____________________________
Name:
Title:

ATTEST:





TEREX CORPORATION

$160,000,000

13% Senior Secured Notes

due August 1, 1996


SECOND SUPPLEMENTAL INDENTURE

Dated as of April 20, 1993


UNITED STATES TRUST COMPANY OF NEW YORK




FIRST AMENDMENT TO SECURITY
AGREEMENT

First Amendment to Security Agreement dated as of January 1, 1993 between Clark Material Handling Company, a Kentucky corporation (the "Company") and United States Trust Company of New York, a New York banking corporation, as collateral agent (the "Collateral Agent").

WHEREAS, the Company and the Collateral Agent have executed a Security Agreement dated as of July 31, 1992 (the "Security Agreement");

WHEREAS, the Company and the Collateral Agent desire to amend the Security Agreement in accordance with the provisions of
Section 9.01 of the Indenture dated as of July 31, 1992 (the "Indenture") among Terex Corporation, a Delaware corporation, and the Company, Terex Equipment Limited, an entity organized under the laws of Scotland and Clark Equipment GmbH, an entity organized under the laws of Germany, as guarantors, and the Collateral Agent, as trustee, to correct certain ambiguities, defects and inconsistencies in the Security Agreement;

WHEREAS, Section 4.13 of the Security Agreement should be clarified to provide that for the ability of the Company to dispose of assets in accordance with Section 4.12 of the Indenture;

NOW, THEREFORE, the Company and the Collateral Agent agree as follows:

1. Section 4.13 of the Security Agreement is hereby amended to insert the word "and" at the end of clause (b)(i) thereof and to delete clause (iii) thereof in its entirety and insert the following in its place and stead:

"(c) the disposition of Collateral as provided for in and in accordance with the provisions of Section 4.12 of the Indenture. In the event of a sale, transfer, lease or other disposition of any of the Collateral permitted by this Section 4.13, the Collateral Agent shall execute such documents as shall be required to evidence the release of the lien created by this Security Agreement on such Collateral and, to the extent such Collateral is in the possession of the Collateral Agent, deliver such Collateral to the Company or its designee."


2. The recitals contained in this First Amendment to Security Agreement are made by the Company and not by the Collateral Agent and all of the provisions contained in the Security Agreement, in respect of the rights, privileges, immunities, powers and duties of the Collateral Agent shall be applicable in respect thereof as fully and with like effect as if set forth herein in full.

3. This First Amendment to Security Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and same agreement.

IN WITNESS WHEREOF, the Company and the Collateral Agent have caused this First Amendment to Security and Pledge Agreement to be duly executed and delivered as of the date first above written.

CLARK MATERIAL HANDLING COMPANY

By:
Marvin B. Rosenberg,
Secretary

UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent

By:
Name:
Title:


FIRST AMENDMENT TO SECURITY
AGREEMENT

First Amendment to Security Agreement dated as of January 1, 1993 between Clarklift of Western Michigan, Inc., a Michigan corporation (the "Company") and United States Trust Company of New York, a New York banking corporation, as collateral agent (the "Collateral Agent").

WHEREAS, the Company and the Collateral Agent have executed a Security Agreement dated as of July 31, 1992 (the "Security Agreement");

WHEREAS, the Company and the Collateral Agent desire to amend the Security Agreement in accordance with the provisions of
Section 9.01 of the Indenture dated as of July 31, 1992 (the "Indenture") among Terex Corporation, a Delaware corporation, and Clark Material Handling Company, a Kentucky corporation, Terex Equipment Limited, an entity organized under the laws of Scotland and Clark Equipment GmbH, an entity organized under the laws of Germany, as guarantors, and the Collateral Agent, as trustee, to correct certain ambiguities, defects and inconsistencies in the Security Agreement;

WHEREAS, Section 4.13 of the Security Agreement should be clarified to provide that for the ability of the Company to dispose of assets in accordance with Section 4.12 of the Indenture;

NOW, THEREFORE, the Company and the Collateral Agent agree as follows:

1. Section 4.13 of the Security Agreement is hereby amended to insert the word "and" at the end of clause (b)(i) thereof and to delete clause (iii) thereof in its entirety and insert the following in its place and stead:

"(c) the disposition of Collateral as provided for in and in accordance with the provisions of Section 4.12 of the Indenture. In the event of a sale, transfer, lease or other disposition of any of the Collateral permitted by this Section 4.13, the Collateral Agent shall execute such documents as shall be required to evidence the release of the lien created by this Security Agreement on such Collateral and, to the extent such Collateral is in the possession of the Collateral Agent, deliver such Collateral to the Company or its designee."

2. The recitals contained in this First Amendment to Security Agreement are made by the Company and not by the Collateral Agent and all of the provisions contained in the Security Agreement, in respect of the rights, privileges, immunities, powers and duties of the Collateral Agent shall be applicable in respect thereof as fully and with like effect as if set forth herein in full.

3. This First Amendment to Security Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and same agreement.

IN WITNESS WHEREOF, the Company and the Collateral Agent have caused this First Amendment to Security Agreement to be duly executed and delivered as of the date first above written.

CLARKLIFT OF WESTERN MICHIGAN, INC.

By:
Marvin B. Rosenberg,
Secretary

UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent

By:
Name:

Title:


FIRST AMENDMENT TO SECURITY
AGREEMENT

First Amendment to Security Agreement dated as of January 1, 1993 between Clark Components International, Inc., a Michigan corporation (the "Company") and United States Trust Company of New York, a New York banking corporation, as collateral agent (the "Collateral Agent").

WHEREAS, the Company and the Collateral Agent have executed a Security Agreement dated as of July 31, 1992 (the "Security Agreement");

WHEREAS, the Company and the Collateral Agent desire to amend the Security Agreement in accordance with the provisions of
Section 9.01 of the Indenture dated as of July 31, 1992 (the "Indenture") among Terex Corporation, a Delaware corporation, and Clark Material Handling Company, a Kentucky corporation, Terex Equipment Limited, an entity organized under the laws of Scotland and Clark Equipment GmbH, an entity organized under the laws of Germany, as guarantors, and the Collateral Agent, as trustee, to correct certain ambiguities, defects and inconsistencies in the Security Agreement;

WHEREAS, Section 4.13 of the Security Agreement should be clarified to provide that for the ability of the Company to dispose of assets in accordance with Section 4.12 of the Indenture;

NOW, THEREFORE, the Company and the Collateral Agent agree as follows:

1. Section 4.13 of the Security Agreement is hereby amended to insert the word "and" at the end of clause (b)(i) thereof and to delete clause (iii) thereof in its entirety and insert the following in its place and stead:

"(c) the disposition of Collateral as provided for in and in accordance with the provisions of Section 4.12 of the Indenture. In the event of a sale, transfer, lease or other disposition of any of the Collateral permitted by this Section 4.13, the Collateral Agent shall execute such documents as shall be required to evidence the release of the lien created by this Security Agreement on such Collateral and, to the extent such Collateral is in the possession of the Collateral Agent, deliver such Collateral to the Company or its designee."

2. The recitals contained in this First Amendment to Security Agreement are made by the Company and not by the Collateral Agent and all of the provisions contained in the Security Agreement, in respect of the rights, privileges, immunities, powers and duties of the Collateral Agent shall be applicable in respect thereof as fully and with like effect as if set forth herein in full.

3. This First Amendment to Security Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and same agreement.

IN WITNESS WHEREOF, the Company and the Collateral Agent have caused this First Amendment to Security Agreement to be duly executed and delivered as of the date first above written.

CLARK COMPONENTS INTERNATIONAL, INC.

By:
Marvin B. Rosenberg,
Secretary

UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent

By:
Name:

Title:


FIRST AMENDMENT TO SECURITY
AGREEMENT

First Amendment to Security Agreement dated as of January 1, 1993 between Drexel Industries, Inc., a Pennsylvania corporation (the "Company") and United States Trust Company of New York, a New York banking corporation, as collateral agent (the "Collateral Agent").

WHEREAS, the Company and the Collateral Agent have executed a Security Agreement dated as of July 31, 1992 (the "Security Agreement");

WHEREAS, the Company and the Collateral Agent desire to amend the Security Agreement in accordance with the provisions of
Section 9.01 of the Indenture dated as of July 31, 1992 (the "Indenture") among Terex Corporation, a Delaware corporation, and Clark Material Handling Company, a Kentucky corporation, Terex Equipment Limited, an entity organized under the laws of Scotland and Clark Equipment GmbH, an entity organized under the laws of Germany, as guarantors, and the Collateral Agent, as trustee, to correct certain ambiguities, defects and inconsistencies in the Security Agreement;

WHEREAS, Section 4.13 of the Security Agreement should be clarified to provide that for the ability of the Company to dispose of assets in accordance with Section 4.12 of the Indenture;

NOW, THEREFORE, the Company and the Collateral Agent agree as follows:

1. Section 4.13 of the Security Agreement is hereby amended to insert the word "and" at the end of clause (b)(i) thereof and to delete clause (iii) thereof in its entirety and insert the following in its place and stead:

"(c) the disposition of Collateral as provided for in and in accordance with the provisions of Section 4.12 of the Indenture. In the event of a sale, transfer, lease or other disposition of any of the Collateral permitted by this Section 4.13, the Collateral Agent shall execute such documents as shall be required to evidence the release of the lien created by this Security Agreement on such Collateral and, to the extent such Collateral is in the possession of the Collateral Agent, deliver such Collateral to the Company or its designee."


2. The recitals contained in this First Amendment to Security Agreement are made by the Company and not by the Collateral Agent and all of the provisions contained in the Security Agreement, in respect of the rights, privileges, immunities, powers and duties of the Collateral Agent shall be applicable in respect thereof as fully and with like effect as if set forth herein in full.

3. This First Amendment to Security Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and same agreement.

IN WITNESS WHEREOF, the Company and the Collateral Agent have caused this First Amendment to Security Agreement to be duly executed and delivered as of the date first above written.

DREXEL INDUSTRIES, INC.

By:
Marvin B. Rosenberg,
Secretary

UNITED STATES TRUST COMPANY
OF NEW YORK, as Collateral Agent

By:
Name:

Title:


WARRANT AGREEMENT, dated as of December 20, 1993, between TEREX CORPORATION, a Delaware corporation (the "Company"), and Mellon Securities Trust Company, a corporation organized and existing under the laws of the State of New York, as Warrant Agent (the "Warrant Agent").

Each party hereto agrees as follows:

The Company hereby appoints the Warrant Agent, and the Warrant Agent hereby agrees, to act as agent for the Company in accordance with the instructions set forth in this Agreement in connection with the issuance, division, transfer and exercise of the Company's Common Stock Purchase Warrants (the "Warrants"), issued pursuant to the Purchase Agreement, dated as of the date hereof, among the Company and the purchasers named on the execution pages thereof (the "Purchase Agreement").

SECTION 1. Certain Definitions. Unless the context otherwise requires, the terms set forth below shall have the meanings herein specified:

"Adjustment Factor" on any date shall mean the product of (a) 0.005 times (b) the integer obtained by (i) dividing (x) the number of Event Days occurring on or prior to such date by (y) thirty days and (ii) discarding the remainder, if any.

"Closing Price" on any day shall mean the per share closing sale price of the Common Stock, regular way, on such day or, in case no such sale takes place on such day, the average of the reported closing bid and asked prices, regular way, in each case on the principal national securities exchange or quotation system on which the Common Stock is quoted or listed or admitted to trading or, if not quoted or listed or admitted to trading on any national securities exchange or quotation system, the average of the closing bid and asked prices of the Common Stock on the over-the-counter market on such day as reported by the National Quotation Bureau Incorporated, or a similar generally accepted reporting service, or if not so available, in such manner as furnished by any nationally recognized New York Stock Exchange member firm selected from time to time by the Board of Directors of the Company in good faith for that purpose.

"Common Stock" shall mean all shares now or hereafter authorized of any class of common stock of the Company and any other stock of the Company, howsoever designated, authorized after the date hereof, which has the right (subject always to prior rights of any class or series of preferred stock) to participate in the distribution of the assets and earnings of the Company without limit as to per share amount.

"Current Market Price" per share of Common Stock on any date shall mean the average of the daily Closing Prices with respect to the Common Stock for the thirty consecutive trading days ending on such date (or, if such date is not a trading day, on the trading day immediately preceding such date); provided, however, that if there shall have occurred prior to such date any event described in Section 9.1 that shall have become effective at any time during such thirty trading day period, the Closing Price shall be adjusted, for purposes of calculating such average, to ensure that the effect of such event on the market price of the Common Stock shall, as nearly as possible, be eliminated in order that the distortion in the calculation of the Current Market Price may be minimized. Notwithstanding the foregoing, if the Common Stock is not publicly traded, the Current Market Price shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company.

"Determination Date" shall mean with respect to any dividend or other distribution, the date fixed for the determination of the holders of shares of Common Stock entitled to receive such dividend or distribution, or if a dividend or distribution is paid or made without fixing such a date, the date of such dividend or distribution.

"Effectiveness Date" shall mean the 90th day following the date hereof.

"Effectiveness Period" shall mean the period during which a registration statement relating to the Warrants is required to be maintained effective pursuant to the Registration Rights Agreement.

"Event" shall be deemed to occur if (i) the Shelf Registration Statement has not been filed on or prior to the Filing Date;
(ii) the Shelf Registration Statement has not become effective on or prior to the Effectiveness Date; or (iii) prior to the end of the Effectiveness Period, the SEC shall have issued a stop order suspending the effectiveness of the Shelf Registration Statement.

"Event Day" shall mean any day if on or prior to such day one or more Events shall have occurred with respect to which there has not yet been an Event Termination Date.

"Event Termination Date" shall mean, with respect to any Event, the date on which the Shelf Registration Statement is (a) filed, in the case of an Event described in clause (i) of the definition thereof, (b) declared effective, in the case of an Event described in clause (ii) of the definition thereof, or (c) no longer subject to an order suspending the effectiveness thereof, in the case of an Event described in clause (iii) of the definition thereof.

"Exercise Price" shall mean the per share exercise price of the Warrants, which in the case of Common Stock shall be $.01 per share and in the case of all other Warrant Shares shall be the lowest exercise price permitted by law.

"Filing Date" shall mean the 30th day following the date hereof.

"Holder" shall mean a registered owner of the Warrants.

"Liquidation" shall mean the voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company.

"Pre-adjustment Ratio" shall mean (a) 3.0 shares of Common Stock if the Current Market Price of a share of Common Stock on the Warrant Ratio Determination Date is $5 or less; (b) a number of shares of Common Stock determined in accordance with Schedule 1 hereto if such Current Market Price is greater than $5 but less than $18; and (c) 1.0 shares of Common Stock if such Current Market Price is $18 or more.

"Registration Rights Agreement" shall mean the Registration Rights Agreement, dated as of the date hereof, relating to the registration of the Warrants and the Warrant Shares.

"SEC" shall mean the Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

"Shelf Registration Statement" shall mean the registration statement of the Company relating to the Warrants and the Warrant Shares that is required to be filed pursuant to the Registration Rights Agreement.

"Warrant Ratio Determination Date" shall mean the date designated as such by the Board of Directors of the Company pursuant to a duly adopted resolution of the Board, which date shall be a trading day during the twelve month period beginning on the date hereof or, if no such date is designated, the last day of such twelve month period; provided, that if the Board of Directors has not yet designated a Warrant Ratio Determination Date and the Current Market Price of a share of Common Stock equals or exceeds $18 on any date during such twelve month period, "Warrant Ratio Determination Date" shall mean such date.

"Warrant Ratio" shall mean the number of Warrant Shares issuable upon exercise or redemption of a single Warrant, which shall mean the product of (a) the Pre-adjustment Ratio times (b) the sum of one plus the Adjustment Factor, as such product is adjusted from time to time in accordance with Section 9 hereof.

"Warrant Shares" shall mean the shares of Common Stock and other consideration, if any, issuable upon exercise of the Warrants, as determined in accordance with the terms hereof.

SECTION 2. Warrant Certificates.

2.1 Form of Certificates. The certificates evidencing the Warrants (the "Warrant Certificates") shall be substantially in the form set forth as Exhibit A hereto. Each such certificate shall be marked with the legends set forth in Section 2.4 hereof. The Warrant Certificates may have such letters, numbers or other marks of identification or designation and such legends, summaries or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, or with any rule or regulation made pursuant thereto, or with any rule or regulation of any stock exchange on which the Common Stock or the Warrants may be listed.

2.2 Execution. Warrant Certificates shall be executed on behalf of the Company by its Chairman of the Board, President, Executive or Senior Vice President or Chief Financial Officer, attested by its Secretary or an Assistant Secretary. The signature of any of such officers may be manual or facsimile. Warrant Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that any of such individuals shall have ceased to hold such offices prior to the delivery of such Warrant Certificates or did not hold such offices on the date of this Agreement.

2.3. Countersignature and Dating. Warrant Certificates shall be manually countersigned by the Warrant Agent and shall not be valid for any purpose unless so countersigned. Such countersignature shall be valid and binding, notwithstanding that the persons whose signatures appear thereon as authorized signers of the Warrant Agent shall have ceased to be such authorized signers at the time of such countersignature, issuance or delivery. Warrant Certificates shall be dated as of the date of countersignature thereof by the Warrant Agent.

2.4. Legend. (a) A copy of this Agreement shall be filed with the Secretary of the Company and shall be kept at its principal executive office. Each Warrant Certificate shall carry a legend as follows:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS AND ENTITLED TO THE BENEFITS OF A WARRANT AGREEMENT AND A REGISTRATION RIGHTS AGREEMENT, EACH DATED AS OF DECEMBER 20, 1993. A COPY OF EACH SUCH AGREEMENT IS ON FILE AT THE OFFICES OF THE COMPANY.

(b) So long as required thereunder, each Warrant Certificate shall carry the legend required pursuant to Section 2.3(c) of the Purchase Agreement.

SECTION 3. Registration, Transfer and Exchange.

3.1 Registration. The Warrant Certificates shall be numbered and shall be registered in the books of the Company (the "Warrant Register") maintained at the principal office of the Warrant Agent at the address specified in Section 17 hereof. The Company and the Warrant Agent shall be entitled to treat the Holder of any Warrant whose name appears in the Warrant Register as the owner in fact thereof for all purposes (notwithstanding any notation of ownership or other writing thereon made by anyone or any notice to the contrary).

3.2 Transfer. The Warrants shall be transferable only on the Warrant Register, upon delivery thereof, accompanied by a written instrument or instruments of transfer in form reasonably acceptable to the Warrant Agent, duly executed by the registered Holder or Holders thereof or by the duly appointed legal representative thereof or by a duly authorized attorney. Upon any registration of transfer, the Warrant Agent shall (a) countersign and deliver a new Warrant Certificate evidencing the Warrant or Warrants to the persons entitled thereto and (b) cancel the surrendered Warrant Certificate. If a Holder desires to transfer a Warrant bearing the legend required pursuant to
Section 2.3(c) of the Purchase Agreement (other than pursuant to an effective registration statement under the Securities Act or pursuant to Rule 144A) such Holder shall deliver to the Company a written opinion of counsel (which may be an employee of such Holder), reasonably satisfactory in form and substance to the Company, that an exemption from the registration requirements of the Securities Act is available.

3.3 Exchange. Each Warrant Certificate may be exchanged at the option of the Holder thereof for another Warrant Certificate or Certificates of like tenor and representing in the aggregate a like number of Warrants. Any Holder desiring to exchange a Warrant Certificate shall make such request in writing delivered to the Warrant Agent, and shall surrender the Warrant Certificate to be so exchanged at the principal office of the Warrant Agent. Thereupon, the Warrant Agent shall (a) countersign and deliver to the person entitled thereto a new Warrant Certificate or Certificates as so requested and (b) cancel the Warrant Certificate surrendered for exchange.

SECTION 4. Term of Warrants; Exercise of Warrants.

4.1 Term of Warrants.

(a) Subject to the terms of this Agreement, each Warrant may be exercised at any time in whole and from time to time in part, at the option of the Holder thereof, commencing at the opening of business on the day following the Warrant Ratio Determination Date until 5:00 p.m. New York time on December 31, 2000 (the "Expiration Date").

(b) The Company shall mail written notice to each holder of Warrants of (i) the Board's designation, if any, of the Warrant Ratio Determination Date on or prior to the twenty fifth (25th) trading day prior to the Warrant Ratio Determination Date and
(ii) the Warrant Ratio as of the Warrant Ratio Determination Date on or prior to the fifth (5th) day following the Warrant Ratio Determination Date.

4.2 Exercise of Warrants. A Warrant may be exercised upon (i) surrender of the Warrant Certificate at the principal office of the Warrant Agent as identified in Section 17 hereof, with the form of election to purchase on the reverse thereof duly completed and signed and (ii) payment of the Exercise Price with respect to the Warrant Shares being purchased. Payment of the aggregate Exercise Price shall be made by certified or bank check payable to the order of the Company.

Upon each exercise of a Warrant, the Company shall issue and cause to be delivered promptly upon such exercise (and in any event within five (5) trading days) to, or upon the written order of, the Holder and in such name or names as the Holder may designate, a certificate or certificates for the number of full Warrant Shares to which such Holder shall be entitled, together with cash, as provided in Section 10 hereof, in lieu of any fraction of a Warrant Share. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named the person or persons entitled to receive the Warrant Shares issuable upon exercise of the Warrants therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes as of the date of the surrender of such Warrant Certificate and payment of the Exercise Price.

If a Warrant Certificate is exercised in respect of less than all of the Warrant Shares purchasable on such exercise at any time prior to the date of expiration of the Warrants, a new Warrant Certificate evidencing the remaining Warrant or Warrants will be issued to the Holder, or its nominee(s), without charge therefor, and the Warrant Agent shall countersign and deliver the required new Warrant Certificate or Certificates pursuant to the provisions of this Section 4 and of Section 3 hereof. All Warrant Certificates surrendered in the exercise of the rights thereby evidenced shall be cancelled by the Warrant Agent.

SECTION 5. Payment of Taxes. The Company shall pay all documentary, stamp, transfer and other taxes (other than taxes on income of the holders of Warrants) and other governmental charges attributable to the issuance or delivery of the Warrants or upon the issuance or delivery of Warrant Shares upon the exercise of Warrants; provided, however, that the Company shall not be required to pay any taxes payable in respect of any transfer involved in the issuance or delivery of any Warrants or Warrant Shares in a name other than that of the registered Holder of Warrants surrendered or in respect of which such Warrant Shares are issued.

SECTION 6. Mutilated or Missing Warrants. If any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company shall issue, and the Warrant Agent shall countersign and deliver in exchange and substitution for and upon cancellation of the mutilated Warrant Certificate, or in lieu of and substitution for the Warrant Certificate lost, stolen or destroyed, and upon receipt of evidence to their reasonable satisfaction of the destruction, loss or theft of any Warrant Certificate and such security or indemnity as may reasonably be required by them to save each of them and any of their agents harmless, to issue a new Warrant Certificate of like tenor and representing an equivalent right or interest.

SECTION 7. Reservation of Warrant Shares; Obtaining of Governmental Approvals and Stock Exchange Listings.

7.1 Reservation of Warrant Shares. The Company shall at all times keep reserved and keep available, free from preemptive rights, out of its authorized but unissued Common Stock or authorized Common Stock held in treasury, a number of shares of Common Stock and, in the case of any adjustment made pursuant to
Section 9, other securities, if any, sufficient to provide for the exercise of the outstanding Warrants.

The transfer agent for the Common Stock and every subsequent transfer agent for any shares of the Company's capital stock issuable upon the exercise of the Warrants shall be irrevocably authorized and directed at all times to reserve the maximum number of authorized shares as shall be required for such purpose. The Company shall keep a copy of this Agreement on file with the transfer agent for the Common Stock and with every subsequent transfer agent for any shares of the Company's capital stock issuable upon the exercise of the Warrants. The Warrant Agent is hereby irrevocably authorized to requisition from time to time from such transfer agent the stock certificates required to honor outstanding Warrants upon exercise thereof in accordance with the terms hereof. The Company shall supply such transfer agent with duly executed stock certificates for such purposes and shall provide or otherwise make available any cash that may be payable as provided in Section 10 hereof.

Before taking any action that would cause an adjustment pursuant to Section 9, the Company will take all corporate action that, in the opinion of its counsel (which may be counsel employed by the Company), may be necessary in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares at the Exercise Price. The Company covenants that all Warrant Shares issued upon exercise of the Warrants will, upon issuance in accordance with the terms of this Agreement, be fully paid and nonassessable and free from all taxes, liens, charges and security interests with respect to the issuance thereof that may be created by virtue of any act or omission of the Company.

7.2 Governmental Approvals and Stock Exchange Listings . The Company will use its best efforts to (a) obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities and to make securities acts filings under federal and state laws, that are required in connection with the issuance, sale, transfer and delivery of the Warrant Certificates, the exercise or conversion of the Warrants, and the issuance, sale, transfer and delivery of the Warrant Shares issued upon exercise or conversion of the Warrants, and (b) have the Warrant Shares, immediately upon their issuance, listed on each securities exchange on which the Common Stock is then listed.

SECTION 8. Cancellation of Warrants. If the Company purchases or otherwise acquires Warrants, the same shall thereupon be delivered to the Warrant Agent to be cancelled. The Warrant Agent shall cancel any Warrant surrendered for exchange, substitution, transfer or exercise in whole or in part. Cancelled Warrant Certificates shall thereafter be disposed of in a manner satisfactory to the Company.

SECTION 9. Adjustment of Warrant Ratio. The Warrant Ratio shall be subject to adjustment from time to time as follows:

9.1 Mechanical Adjustments.

(a) Common Stock Dividends. If the Company shall fix a Determination Date with respect to the payment or making of a dividend or other distribution on its Common Stock exclusively in shares of Common Stock, then, immediately after the Determination Date with respect to such dividend, the Warrant Ratio shall be adjusted so that the Holder of any Warrant exercised after such time shall be entitled to receive the sum of (A) the Warrant Shares that, if such Warrant had been exercised immediately prior to such Determination Date, such Holder would have received upon such exercise and (B) the number of shares of Common Stock that such Holder would have been entitled to receive by virtue of such dividend if such Warrant had been exercised immediately prior to such Determination Date.

(b) Rights. If the Company shall fix a Determination Date with respect to the making of a dividend or other distribution on its Common Stock, consisting exclusively of rights or warrants entitling the holders thereof to subscribe for or purchase, during a period not exceeding 45 days from the date of such dividend or other distribution, shares of Common Stock at a price per share less than the Current Market Price per share of Common Stock on the Determination Date, the Warrant Ratio in effect as of the opening of business on the day following the Determination Date shall be increased by multiplying such Warrant Ratio by a fraction (A) the numerator of which shall be the sum of (x) the number of shares of Common Stock outstanding at the close of business on the Determination Date plus (y) the number of shares of Common Stock so offered for subscription or purchase and (B) the denominator of which shall be the sum of
(x) the number of shares of Common Stock outstanding at the close of business on the Determination Date plus (y) the number of shares of Common Stock that the aggregate maximum offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price. To the extent such rights or warrants expire and, as a result, shares of Common Stock issuable upon exercise thereof will not be delivered, the Warrant Ratio shall be readjusted to the Warrant Ratio that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually issued upon exercise thereof. If such rights or warrants are not so issued, the Warrant Ratio shall again be adjusted to be the Warrant Ratio that would then be in effect if such Determination Date had not been fixed.

(c) Stock-Splits, etc. If outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock or combined into a smaller number of shares of Common Stock, the Warrant Ratio in effect at the opening of business on the day following the day upon which such subdivision or combination becomes effective shall be proportionally increased or reduced, respectively, effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective.

(d) Other Distributions. If the Company shall fix a Determination Date with respect to the making of a dividend or other distribution on its Common Stock (including any such dividend or distribution made in connection with a consolidation or merger in which the Company is the continuing corporation but excluding a dividend or distribution referred to in Section 9.1(a) or (b) hereof) consisting of (i) securities other than Common Stock, (ii) evidences of its indebtedness, or (iii) assets (including cash dividends or distributions) (any of the foregoing hereinafter referred to as "Assets"), then in each such case adequate provision shall be made so that each holder of Warrants shall receive, without charge, concurrently with the making of such dividend or distribution, the amount and kind of such Assets that such holder would have received if such holder had, immediately prior to the Determination Date, exercised its Warrants.

(e) Common Stock Issued at Less Than Current Market Price. If the Company shall issue any Common Stock (or securities convertible into or exercisable for, Common Stock) for a consideration per share less than the Current Market Price per share of Common Stock on the date of such issuance (which consideration shall include any compensation received for the issuance of any securities convertible into or exercisable for such Common Stock), the Warrant Ratio in effect immediately prior to each such issuance shall immediately (except as provided below) be increased by multiplying such Warrant Ratio by a fraction (A) the numerator of which is the number of shares of Common Stock outstanding immediately after the issuance of such additional shares and (B) the denominator of which is the sum of (x) the number of shares of Common Stock outstanding immediately prior to such issuance plus (y) the aggregate consideration received for the issuance of such additional shares (which shall include any compensation received for the issuance of any securities convertible into or exercisable for such Common Stock) divided by such Current Market Price; provided, that this subsection (e) shall not apply to:

(1) any transaction or distribution for which an adjustment has been made pursuant to any other subsection of this Section 9.1,

(2) the conversion or exchange of securities convertible or exchangeable for Common Stock or the exercise of rights or warrants issued to the holders of Common Stock, in each case if an adjustment was made (or specifically not required to be made) in connection with the issuance of such securities, rights or warrants pursuant to any subsection of this Section 9.1,

(3) the conversion of shares of Series A Cumulative Redeemable Convertible Preferred Stock of the Company, par value $.01 per share (the "Preferred Stock"), or the exercise of Warrants, or

(4) Common Stock or options to purchase Common Stock issued to directors, officers or employees of the Company and its subsidiaries under bona fide benefit plans adopted by the Board of Directors and approved by the holders of Common Stock when required by law (but only to the extent that the aggregate number of shares excluded hereby and issued after the Issue Date shall not exceed 10% of the Common Stock outstanding at the time of the adoption of each such plan, exclusive of antidilution adjustments thereunder).

(5) Common Stock issued pursuant to a bona fide registered public offering, the manager or managers of which are nationally recognized investment banking firms.

(f) Rounding of Calculations. All calculations under this
Section 9.1 shall be made to the nearest one-hundredth of a share.

(g) Timing of Issuance. In any case in which this Section 9.1 shall require that an adjustment be made effective immediately after a Determination Date for a specified event, the Company may defer until the occurrence of such event (i) the issuing to the Holder of any Warrant exercised after such Determination Date the Warrant Shares issuable upon such exercise over and above the Warrant Shares issuable upon such exercise prior to such adjustment and (ii) paying to such holder any cash pursuant to Section 10 hereof; provided, however, that the Company shall deliver to such Holder a due bill or other appropriate instrument evidencing such Holder's right to receive such additional shares, and such cash, upon the occurrence of the event requiring such adjustment.

9.2 Notice of Adjustment. On or prior to each day on which the Warrant Ratio is adjusted as herein provided, the Company shall promptly direct the Warrant Agent and the Warrant Agent shall send to each Holder, notice of such adjustment and shall deliver to the Warrant Agent a certificate of a firm of independent public accountants selected by the Board (who may be the regular accountants employed by the Company) setting forth the Warrant Shares purchasable upon the exercise of each Warrant and the Warrant Price after such adjustment, a brief statement of the facts requiring such adjustment, and the computation by which such adjustment was made.

9.3 Reorganizations. In case of (a) any consolidation or merger of the Company with or into another corporation, (b) the occurrence of any other transaction or event pursuant to which all or substantially all of the Common Stock is exchanged for, converted into, or acquired for, or constitutes solely the right to receive, cash securities, property or other assets (whether by exchange offer, liquidation, tender offer or otherwise) or
(c) the sale, lease or other transfer of all or substantially all of the assets of the Company (collectively such actions being hereinafter referred to as "Reorganizations"), there shall thereafter be deliverable upon exercise of each Warrant (in lieu of the Warrant Shares theretofore deliverable), at the lowest exercise price permitted by law, the number of shares of stock or other securities or property to which a holder of the Warrant Shares that would otherwise have been deliverable upon the exercise of such Warrant would have been entitled upon such Reorganization if such Warrant had been exercised in full immediately prior to such Reorganization.

The Company shall not effect any Reorganization, unless prior to the consummation thereof the successor or transferee (other than the Company), or if the Company shall be the surviving corporation in any such Reorganization and is not the issuer of the shares of stock or other securities or property to be delivered to holders of shares of the Common Stock outstanding at the effective time thereof, then such issuer shall assume by written instrument the obligation to deliver to the Holder of any Warrant such shares of stock, securities, cash or other property as such Holder shall be entitled to purchase in accordance with the foregoing provisions, which agreement shall provide for adjustments that shall be as nearly equivalent as may be practical to the adjustments provided for in this Section 9.

9.4 Statement on Warrants. Irrespective of any adjustments in the Warrant Price or the number or kind of Warrant Shares purchasable upon the exercise of the Warrants, Warrant Certificates theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in the Warrant Certificates initially issuable pursuant to this Agreement.

SECTION 10. Fractional Interests. The Company shall not be required to issue fractional shares of capital stock on the exercise of Warrants. If more than one Warrant shall be presented for exercise in full at the same time by the same Holder, the number of full shares of capital stock which shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate number of Warrants so presented. If any fraction of a share of capital stock would, except for the provisions of this Section 10, be issuable on the exercise of any Warrant (or specified portion thereof), the Company shall pay an amount in cash equal to the then Current Market Price per share multiplied by such fraction.

The Company shall not be required to issue fractions of Warrants on any distribution, transfer or exchange of Warrants or to distribute Warrant Certificates that evidence fractional Warrants. In lieu of such fractional Warrants there shall be paid by the Company to the registered Holders of the Warrant Certificates with regard to which such fractional Warrants would otherwise be issuable, an amount in cash equal to the same fraction of the Current Market Value of a full Warrant.

SECTION 11. No Rights as Stockholders. Nothing contained in this Agreement or in any of the Warrants shall be construed as conferring upon the Holders thereof or their transferees the right to vote or to receive dividends or to consent or to receive notice as stockholders in respect of any meeting of stockholders for the election of directors of the Company or any other matter, or any rights whatsoever as stockholders of the Company.

SECTION 12. Notices to Holders. In case:

(a) the Company shall (i) declare any dividend or any other distribution on its Common Stock, (ii) declare or authorize a redemption or repurchase of Common Stock, or (iii) authorize the granting to all holders of Common Stock of rights or warrants to subscribe for or purchase any shares of stock of any class or of any other rights or warrants; or

(b) of any reclassification of Common Stock, or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company shall be required, or of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or other property; or

(c) of a Liquidation; or

(d) the Company shall propose to take any action that would require an adjustment pursuant to Section 9.1;

then the Company shall cause to be filed with the Warrant Agent and mailed to the Holders of Warrants, at least fifteen (15) days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record (if any) is to be taken for the purpose of such dividend, distribution, redemption, repurchase or granting of rights or warrants or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, redemption, repurchase, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, share exchange or Liquidation is expected to become effective, and the date, if any, as of which it is expected that holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, share exchange or Liquidation.

SECTION 13. Disposition of Proceeds on Exercise of Warrants; Inspection of Warrant Agreement.

(a) The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the Company all moneys received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants.

(b) The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for inspection by the Holders during normal business hours at its office in New York, New York. The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement, the Purchase Agreement and the Registration Rights Agreement as the Warrant Agent may reasonably request.

SECTION 14. Redemption by the Corporation.

(a) Subject to the terms and conditions of this Section 14, the Warrants may be redeemed in whole, but not in part, in exchange for Warrant Shares at any time on or after the Warrant Ratio Determination Date; provided, that concurrently with such redemption the Company redeems all then outstanding shares of the Preferred Stock. Each Warrant will be redeemable for a number of Warrant Shares equal to the Warrant Ratio on the Redemption Date (as defined below).

(b) Notice of redemption of the Warrants shall be sent by or on behalf of the Company, to the Holders, not less than thirty
(30) days nor more than sixty (60) days prior to the date fixed for redemption (the "Redemption Date") (i) notifying such Holders of the election of the Corporation to redeem such Warrants and of the Redemption Date, (ii) stating the place or places at which the Warrants shall, upon presentation and surrender of the certificates evidencing such Warrants, be redeemed, and the number of Warrant Shares deliverable upon the redemption thereof, and (iii) stating the name and address of any Redemption Agent selected by the Company in accordance with
Section 14(c) below, and the name and address of the Company's Warrant Agent.

(c) The Company may not act as the redemption agent to redeem the Warrants. The Company shall appoint as its agent for such purpose a bank or trust company in good standing, organized under the laws of the United States of America or any jurisdiction thereof, and having capital, surplus and undivided profits aggregating at least Fifty Million Dollars ($50,000,000), which agent may be the Warrant Agent, and may appoint any one or more additional such agents which shall in each case be a bank or trust company in good standing organized under the laws of the United States of America or of any jurisdiction thereof, and having capital, surplus and undivided profits aggregating at least Fifty Million Dollars ($50,000,000). Each such bank or trust company is hereinafter referred to as the "Redemption Agent." Following such appointment and prior to any redemption, the Company shall deliver to the Redemption Agent irrevocable written instructions authorizing the Redemption Agent, on behalf and at the expense of the Corporation, to cause such notice of redemption to be sent as herein provided as soon as practicable after receipt of such irrevocable instructions and in accordance with the above provisions. The Warrant Shares necessary for the redemption shall be deposited with the Redemption Agent in trust at least two business days prior to the Redemption Date, for the benefit of the Holders of the Warrants so called for redemption, so as to be and continue to be available therefor.

The Company covenants that all Warrant Shares issued upon redemption of the Warrants will, upon issuance in accordance with the terms of this Agreement, be fully paid and nonassessable and free from all taxes, liens, charges and security interests with respect to the issuance thereof that may be created by virtue of any act or omission of the Company.

SECTION 15. Concerning the Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the Holders, by their acceptance of Warrants, shall be bound:

15.1 Correctness of Statements. The statements contained herein and in the Warrants shall be taken as statements of the Company. The Warrant Agent assumes no responsibility for the correctness of any of such statements except such as describe the Warrant Agent or action taken by it. The Warrant Agent assumes no responsibility with respect to the distribution of the Warrants except as herein otherwise provided.

15.2 Reliance. The Warrant Agent may consult at any time with legal counsel (who may be counsel for the Company) and the Warrant Agent shall incur no liability or responsibility to the Company or to any holder of Warrants in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion or the advice of such counsel. The Warrant Agent will not incur any liability or responsibility to the Company or to any Holder for any action taken by it hereunder in good faith reliance on any notice, resolution, waiver, consent, order, certificate, or other paper, document or instrument reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties.

15.3 Compensation. The Company agrees to pay the Warrant Agent reasonable compensation for all services rendered by the Warrant Agent in the performance of its duties under this Agreement, to reimburse the Warrant Agent for all reasonable expenses, taxes and governmental charges incurred by the Warrant Agent in the performance of its duties under this Agreement, and to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution and performance of its duties under this Agreement except as a result of the Warrant Agent's gross negligence or bad faith.

15.4 Legal Proceedings. The Warrant Agent shall be under no obligation to institute any action, suit or legal proceeding to or take any other action likely to involve expense unless the Company or one or more Holders of Warrants shall furnish the Warrant Agent with reasonable security and indemnity for any costs and expenses that may be incurred, but this provision shall not affect the power of the Warrant Agent to take such action as the Warrant Agent may consider proper, whether with or without any such security or indemnity. All rights of actions under this Agreement or under any of the Warrants may be enforced by the Warrant Agent without the possession of any of the Warrants or the production thereof at any trial or other proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant Agent shall be brought in its name as Warrant Agent, and any recovery of judgment shall be for the ratable benefit of the Holders, as their respective rights or interests may appear.

15.5 Other Transactions in Securities of Company. The Warrant Agent and any stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.

15.6 Merger or Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party, or any corporation succeeding to the corporate trust business of the Warrant Agent, shall be the successor to the Warrant Agent hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Warrant Agent under the provisions of Section 15.7 hereof. If, at the time such successor to the Warrant Agent shall succeed to the agency created by this Agreement, any of the Warrants shall have been countersigned but not delivered, any such successor to the Warrant Agent may adopt the countersignature of the original Warrant Agent and deliver such Warrants so countersigned; and if, at that time any of the Warrants shall not have been countersigned, any successor to the Warrant Agent may countersign such Warrants whether in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent.

If, at any time the name of the Warrant Agent shall be changed and at such time any of the Warrants shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignatures under its prior name and deliver such Warrants so countersigned; and if, at that time any of the Warrants shall not have been countersigned, the Warrant Agent may countersign such Warrants either in its prior name or in its changed name.

15.7 Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement by giving to the Company forty-five (45) days' written notice. The Warrant Agent may be removed by written notice from the Company or Holders owning at least two-thirds of the Warrants then outstanding. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of forty-five (45) days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by any Holder (who shall with such notice submit such Holder's Warrant for inspection by the Company), then any Holder may apply to any court of competent jurisdiction for the appointment of a successor to the Warrant Agent. Pending appointment of a successor to the Warrant Agent, either by the Company or by such a court, the duties of the Warrant Agent shall be carried out by the Company. Any successor warrant agent, whether appointed by the Company or such a court, shall be a bank or trust company, in good standing, and having at the time of its appointment as warrant agent a combined capital and surplus of at least $50,000,000. After appointment, the successor warrant agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the former Warrant Agent shall deliver and transfer to the successor warrant agent any property at the time held by it under, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Failure to file any notice provided for in this Section 15.7, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the successor warrant agent, as the case may be. In the event of such resignation or removal, the successor warrant agent shall mail, first class, to each holder of Warrants written notice of such removal or resignation and the name and address of such successor warrant agent.

SECTION 16. Identity of Transfer Agent. Promptly upon the appointment of any subsequent transfer agent of the Common Stock, or any other shares of the Company's capital stock issuable upon the exercise of the Warrants, the Company will file with the Warrant Agent a statement setting forth the name and address of such subsequent transfer agent.

SECTION 17. Notices. All notices and other communications provided for or permitted hereunder shall be in writing and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier or (iii) one business day after being deposited with a reputable next-day courier, postage prepaid, to the parties as follows:

if to the Company:

TEREX CORPORATION
500 Post Road East

Westport, Connecticut
Attention: Marvin Rosenberg, Esq.

Fax No.: (203) 222-7976

if to the Warrant Agent:

Mellon Securities Trust Company
120 Broadway, 33rd Floor
New York, New York 10271

Attention: Ms. Joan B. Hayes Fax No.: (212) 571-0871

The Company or the Warrant Agent by notice to the other party may designate additional or different addresses as shall be furnished in writing by such party.

Any notice or communication sent or required to be sent to a Holder of a Warrant shall be mailed to him by first class mail, postage prepaid, at such Holder's address as it appears on the books of the Warrant Agent and shall be sufficiently given to him if so mailed within the time prescribed.

SECTION 18. Amendment and Waiver.

(a) The Company and the Warrant Agent may from time to time supplement, modify or amend this Agreement, and waivers or consents to departures from the provisions hereof may be given, without the approval of any Holder, in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision herein, or to make any other provisions in regard to matters or questions arising hereunder which the Company and the Warrant Agent may deem necessary or desirable and which shall not be inconsistent with the provisions of the Warrants and which shall not adversely affect the interest of the Holders. Except as provided above, this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, without the written consent of Holders of at least a majority of the Warrants.

(b) Whenever in the performance of its duties under this Agreement the Warrant Agent deems it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed or the Warrant Agent has actual knowledge to the contrary) may be deemed to be conclusively proved and established by a certificate signed by a person believed by the Warrant Agent to be authorized officers of the Company.

SECTION 19. Successors. All the covenants and provisions of this Agreement and the Warrants by or for the benefit of the Company or the Warrant Agent shall be binding upon and shall inure to the benefit of their respective successors and assigns hereunder.

SECTION 20. Merger or Consolidation of the Company. The Company will not merge or consolidate with or into any other corporation unless the corporation resulting from such merger or consolidation (if not the Company) shall expressly assume, by supplemental agreement satisfactory in form to the Warrant Agent and executed and delivered to the Warrant Agent, the due and punctual performance and observance of each and every covenant and condition of this Agreement to be performed and observed by the Company.

SECTION 21. Governing Law. THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW, EXCEPT TO THE EXTENT THAT THE DELAWARE GENERAL CORPORATION LAW MAY GOVERN THIS AGREEMENT SOLELY BY VIRTUE OF THE FACT THAT THE COMPANY IS INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE. THE 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 AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY IRREVOCABLY WAIVES ANY OBJECTION WHICH 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.

SECTION 22. Third Party Beneficiary. The provisions hereof have been and are made solely for the benefit of the Company, the Warrant Agent and each of the Holders of Warrants, and their respective successors and assigns, and no other person shall acquire or have any right hereunder or by virtue hereof.

SECTION 23. Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in 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.

SECTION 24. Headings. The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

SECTION 25. Severability. If any term, provision, covenant or restriction of this 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 which may be hereafter declared invalid, illegal, void or unenforceable.

SECTION 26. Entire Agreement. This Agreement, together with the Purchase Agreement and the Warrants, is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, together with the Purchase Agreement and the Warrants, supersedes all prior agreements and understandings between the parties with respect to such subject matter.

SECTION 27. Attorneys' Fees. In any action or proceeding brought to enforce any provision of this Agreement, the Purchase Agreement or the Warrants, or where any provision hereof or thereof is validly asserted as a defense, the prevailing party, as determined by the court, shall be entitled to recover reasonable attorneys' fees in addition to any other available remedy. Notwithstanding the foregoing, this Section 27 shall not impose any additional obligation on the Warrant Agent and shall not offset the indemnification provision for the benefit of the Warrant Agent hereunder.

SECTION 28. Further Assurances. Each party hereto agrees to use all reasonable efforts to obtain all consents and approvals, and to do all other things, necessary for the transactions contemplated by this Agreement on or prior to the Expiration Date. The parties agree to take such further action and to deliver or cause to be delivered to each other after the date hereof such additional agreements or instruments as any of them may reasonably request for the purpose of carrying out this Agreement and the agreements and transactions contemplated hereby and thereby.

SECTION 29. Equitable Remedies. Each party hereto acknowledges and agrees that irreparable harm, for which there may be no adequate remedy at law and for which the ascertainment of damages would be difficult, would occur in the event any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. Each party hereto accordingly agrees that each other party hereto shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement, or any agreement contemplated hereunder and to enforce specifically the terms and provisions hereof or thereof in any court of the United States or any state thereof having jurisdiction, in each instance without being required to post bond or other security and in addition to, and without having to prove the inadequacy of, other remedies at law.

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

TEREX CORPORATION

                                                                        By: /s/ Randolph W. Lenz
                                                                                 Chairman of the Board

(Corporate Seal)

Attest:

/s/ Marvin B. Rosenberg
        Secretary

MELLON SECURITIES TRUST COMPANY
as Warrant Agent

                                                                        By: /s/ Joan B. Hayes
                                                                                Its: Assistant Vice President


Attest:
_________________________
Its _____________________

EXHIBIT A

[Form of Warrant Certificate]

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 UNDER SUCH ACT, OR (iii) ANY OTHER EXEMPTION FROM THE REGISTRATION UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS AND ENTITLED TO THE BENEFITS OF A WARRANT AGREEMENT AND A REGISTRATION RIGHTS AGREEMENT, EACH DATED AS OF DECEMBER 20, 1993. A COPY OF EACH SUCH AGREEMENT IS ON FILE AT THE OFFICES OF THE COMPANY.

No. _________________

Certificate for ________ Warrants
EXERCISABLE IN WHOLE OR FROM TIME TO TIME
IN PART AT ANY TIME AFTER THE WARRANT RATIO
DETERMINATION DATE AND ON OR BEFORE
5:00 P.M. NEW YORK TIME, ON
December 31, 2000

TEREX CORPORATION

COMMON STOCK PURCHASE WARRANT CERTIFICATE

THIS CERTIFIES that _____________________ or registered assigns is the registered holder (the "Holder") of the number of Warrants set forth above (the "Warrants"), each of which represents the right to purchase shares of Common Stock, $.01 par value per share (the "Common Stock"), of Terex Corporation, a Delaware corporation (the "Company"), on the terms set forth in the Warrant Agreement, dated as of December 20, 1993 (the "Warrant Agreement), between the Company and Mellon Securities Trust Company, as Warrant Agent (the "Warrant Agent"), at any time after the Warrant Ratio Determination Date (defined below) and on or before the Expiration Date (defined below), by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon duly executed (with signatures guaranteed by a member firm of a national securities exchange, a commercial bank or a trust company located in the United States, or a member of the National Association of Securities Dealers, Inc. (an "Eligible Institution")), at the office maintained for that purpose by Mellon Securities Trust Company or its successors as warrant agent, and by paying in full the Warrant Price.

Payment of the exercise price may be made by the Holder hereof in United States currency by certified or bank cashier's check payable to the order of the Company.

This Warrant may be exercised at any time in whole and from time to time in part at the option of the Holder hereof, commencing at the opening of business on the Warrant Ratio Determination Date until 5:00 p.m., New York time on December 31, 2000 (the "Expiration Date"). No Warrant may be exercised after the Expiration Date and all Warrants evidenced hereby shall thereafter become void. "Warrant Ratio Determination Date" shall mean the date designated as such by the Board of Directors of the Company pursuant to a duly adopted resolution of the Board, which date shall be a trading day during the twelve month period beginning on the date of the Warrant Agreement, or, if no such date is designated, the last day of such twelve month period; provided, that if the Board of Directors has not yet designated a Warrant Ratio Determination Date and the Current Market Price of a share of Common Stock equals or exceeds $18 on any date during such twelve month period, the term "Warrant Ratio Determination Date" shall mean such date. The Company shall send written notice to each Holder of Warrants of (i) the Board's designation, if any, of the Warrant Ratio Determination Date on or prior to the twenty-fifth
(25th) trading day prior to the Warrant Ratio Determination Date and (ii) the Warrant Ratio (defined below) as of the Warrant Ratio Determination Date on or prior to the fifth (5th) day following the Warrant Ratio Determination Date.

Prior to the Expiration Date, subject to any applicable laws, rules or regulations restricting transferability and to any restriction on transferability that may appear on this Warrant Certificate, or in the Warrant Agreement, the Purchase Agreement or the Registration Rights Agreement, the Holder shall only be entitled to transfer this Warrant Certificate on the Warrant Register maintained at the principal office of the Warrant Agent, upon delivery thereof, duly endorsed by the Holder or by his duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment or authority to transfer deemed acceptable by the Warrant Agent, with the form of assignment set forth hereon duly executed (with signatures guaranteed by an Eligible Institution). Upon any such transfer, a new Warrant Certificate or Warrant Certificates representing the same aggregate number of Warrants will be issued in accordance with instructions in the form of assignment.

Upon the exercise of less than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the Holder a new Warrant Certificate representing the Warrants not exercised.

Prior to the Expiration Date, the Holder shall be entitled to exchange this Warrant Certificate, with or without other Warrant Certificates, for another Warrant Certificate or Warrant Certificates for the same aggregate number of Warrants, upon surrender of this Warrant Certificate at the office maintained for the purpose by the Warrant Agent.

Upon certain events provided for in the Warrant Agreement, the number of shares of Common Stock and other consideration issuable upon the exercise of each Warrant are required to be adjusted.

No fractional shares will be issued upon the exercise of Warrants. As to any final fraction of a share that the Holder of one or more Warrant Certificates, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay the cash value thereof determined as provided in the Warrant Agreement.

Subject to the terms and conditions of the Warrant Agreement, the Warrants may be redeemed in whole, but not in part, in exchange for Warrant Shares at any time on or after the Warrant Ratio Determination Date; provided, that concurrently with such redemption the Corporation redeems all the outstanding shares of the Preferred Stock. Each Warrant will be redeemable for a number of Warrant Shares equal to the Warrant Ratio on the Redemption Date.

This Warrant Certificate is issued under and in accordance with the Warrant Agreement and is subject to the terms and provisions contained in said Warrant Agreement, to all of which terms and provisions the Holder consents by acceptance hereof. Capitalized terms not otherwise defined in this Warrant Certificate shall have the meaning given thereto in the Warrant Agreement.

This Warrant Certificate shall not entitle the Holder to any of the rights of a shareholder of the Company, including, without limitation, the right to vote, to receive dividends and other distributions, or to attend or receive any notice of meetings of shareholders or any other proceedings of the Company.

This Warrant Certificate shall not be valid for any purpose until it shall have been countersigned by the Warrant Agent.

THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS WARRANT

CERTIFICATE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE MAY GOVERN THIS AGREEMENT SOLELY BY VIRTUE OF THE FACT THAT THE COMPANY IS INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE.

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

TEREX CORPORATION

                                                                        By: /s/ Randolph W. Lenz
                                                                                        Chairman of the Board

(Corporate Seal)

Attest:

/s/ Marvin B. Rosenberg
        Secretary

                                                                        MELLON SECURITIES TRUST COMPANY
                                     as Warrant Agent

                                                                        By: /s/ Joan B. Hayes
                                                                        Its:  Assistant Vice President
Attest:

Its:

ELECTION TO PURCHASE

The undersigned hereby irrevocably elects to exercise _________ Warrants represented by this Warrant Certificate and to purchase the shares of Common Stock issuable upon the exercise of said Warrants, and requests that Certificates for such shares be issued and delivered as follows:

ISSUE TO:

(Name)

(Address, Including Zip Code)

(Social Security or Tax Identification Number)

DELIVER TO:

(Name)

(Address, Including Zip Code)

In payment of the purchase price with respect to the Warrants exercised the undersigned hereby tenders payment of $__________ by certified or bank cashiers check payable to the order of the Company. If the number of Warrants hereby exercised is fewer than all the Warrants represented by this Warrant Certificate, the undersigned requests that a new Warrant Certificate representing the number of full Warrants not exercised to be issued and delivered as set forth below:

Name of Warrantholder or Assignee:

(Please Print)

Address:

Signature:________________________ DATED: ,

(Signature must conform in all respects to name of holder as specified on the fact of the Warrant Certificate)

Signature Guaranteed: ________________________

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned represented by the within Warrant Certificate, with respect to the number of Warrants set forth below:

                                                        Taxpayer
                                        Number of       Identification
Name of Assignee        Address         Warrants        Number

and does hereby irrevocably constitute and appoint __________, Attorney, to make such transfer on the Warrant Register maintained at the principal office of the Warrant Agent with full power of substitution in the premises.

Dated: ______________, ____

                                                        Signature
                                                        (Signature must conform in all
         respects to name of holder
         as specified on the face of the
         Warrant Certificate).

                                                        Signature Guaranteed:

                                           Schedule 1

Current Market Price    Pre-Adjustment Ratio

 $5.00  or less         3.00
 $5.50                          2.75
 $6.00                          2.53
 $6.50                          2.36
 $7.00                          2.20
 $7.50                          2.07
 $8.00                          1.95
 $8.50                          1.85
 $9.00                          1.76
 $9.50                          1.68
$10.00                          1.60
$10.50                          1.54
$11.00                          1.48
$11.50                          1.42
$12.00                          1.37
$12.50                          1.33
$13.00                          1.28
$13.50                          1.24
$14.00                          1.21
$14.50                          1.17
$15.00                          1.14
$15.50                          1.11
$16.00                          1.08
$16.50                          1.06
$17.00                          1.03
$17.50                          1.01
$18.00  or more         1.00

For any Current Market Price (the "Specified Price") greater than $5.00 and less than $18.00 that is not set forth on the foregoing table, the Pre-Adjustment Ratio shall be calculated by determining the highest identified Current Market Price lower than the Specified Price (the "Lower Boundary") and the lowest identified Current Market Price greater than the Specified Price (the "Upper Boundary") and calculating (in a straight-line manner) that number of shares (rounded to the nearest .01) that bears the same ratio between the Pre-Adjustment Ratio with respect to the Lower Boundary and the Pre-Adjustment Ratio with respect to Upper Boundary as the Specified Price bears to the Lower Boundary and the Upper Boundary.


THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 UNDER SUCH ACT, OR (iii) ANY OTHER EXEMPTION FROM THE REGISTRATION UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS AND ENTITLED TO THE BENEFITS OF A WARRANT AGREEMENT AND A REGISTRATION RIGHTS AGREEMENT, EACH DATED AS OF DECEMBER 20, 1993. A COPY OF EACH SUCH AGREEMENT IS ON FILE AT THE OFFICES OF THE COMPANY.

No.

Certificate for Warrants

EXERCISABLE IN WHOLE OR FROM TIME TO TIME
IN PART AT ANY TIME AFTER THE WARRANT RATIO
DETERMINATION DATE AND ON OR BEFORE
5:00 P.M. NEW YORK TIME, ON
December 31, 2000

TEREX CORPORATION

COMMON STOCK PURCHASE WARRANT CERTIFICATE

THIS CERTIFIES that or registered assigns is the registered holder (the "Holder") of the number of Warrants set forth above (the "Warrants"), each of which represents the right to purchase shares of Common Stock, $.01 par value per share (the "Common Stock"), of Terex Corporation, a Delaware corporation (the "Company"), on the terms set forth in the Warrant Agreement, dated as of December 20, 1993 (the "Warrant Agreement), between the Company and Mellon Securities Trust Company, as Warrant Agent (the "Warrant Agent"), at any time after the Warrant Ratio Determination Date (defined below) and on or before the Expiration Date (defined below), by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon duly executed (with signatures guaranteed by a member firm of a national securities exchange, a commercial bank or a trust company located in the United States, or a member of the National Association of Securities Dealers, Inc. (an "Eligible Institution")), at the office maintained for that purpose by Mellon Securities Trust Company or its successors as warrant agent, and by paying in full the Warrant Price.

Payment of the exercise price may be made by the Holder hereof in United States currency by certified or bank cashier's check payable to the order of the Company.

This Warrant may be exercised at any time in whole and from time to time in part at the option of the Holder hereof, commencing at the opening of business on the Warrant Ratio Determination Date until 5:00 p.m., New York time on December 31, 2000 (the "Expiration Date"). No Warrant may be exercised after the Expiration Date and all Warrants evidenced hereby shall thereafter become void. "Warrant Ratio Determination Date" shall mean the date designated as such by the Board of Directors of the Company pursuant to a duly adopted resolution of the Board, which date shall be a trading day during the twelve month period beginning on the date of the Warrant Agreement, or, if no such date is designated, the last day of such twelve month period; provided, that if the Board of Directors has not yet designated a Warrant Ratio Determination Date and the Current Market Price of a share of Common Stock equals or exceeds $18 on any date during such twelve month period, the term "Warrant Ratio Determination Date" shall mean such date. The Company shall send written notice to each Holder of Warrants of (i) the Board's designation, if any, of the Warrant Ratio Determination Date on or prior to the twenty-fifth
(25th) trading day prior to the Warrant Ratio Determination Date and (ii) the Warrant Ratio (defined below) as of the Warrant Ratio Determination Date on or prior to the fifth (5th) day following the Warrant Ratio Determination Date.

Prior to the Expiration Date, subject to any applicable laws, rules or regulations restricting transferability and to any restriction on transferability that may appear on this Warrant Certificate, or in the Warrant Agreement, the Purchase Agreement or the Registration Rights Agreement, the Holder shall only be entitled to transfer this Warrant Certificate on the Warrant Register maintained at the principal office of the Warrant Agent, upon delivery thereof, duly endorsed by the Holder or by his duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment or authority to transfer deemed acceptable by the Warrant Agent, with the form of assignment set forth hereon duly executed (with signatures guaranteed by an Eligible Institution). Upon any such transfer, a new Warrant Certificate or Warrant Certificates representing the same aggregate number of Warrants will be issued in accordance with instructions in the form of assignment.

Upon the exercise of less than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the Holder a new Warrant Certificate representing the Warrants not exercised.

Prior to the Expiration Date, the Holder shall be entitled to exchange this Warrant Certificate, with or without other Warrant Certificates, for another Warrant Certificate or Warrant Certificates for the same aggregate number of Warrants, upon surrender of this Warrant Certificate at the office maintained for the purpose by the Warrant Agent.

Upon certain events provided for in the Warrant Agreement, the number of shares of Common Stock and other consideration issuable upon the exercise of each Warrant are required to be adjusted.

No fractional shares will be issued upon the exercise of Warrants. As to any final fraction of a share that the Holder of one or more Warrant Certificates, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay the cash value thereof determined as provided in the Warrant Agreement.

Subject to the terms and conditions of the Warrant Agreement, the Warrants may be redeemed in whole, but not in part, in exchange for Warrant Shares at any time on or after the Warrant Ratio Determination Date; provided, that concurrently with such redemption the Corporation redeems all the outstanding shares of the Preferred Stock. Each Warrant will be redeemable for a number of Warrant Shares equal to the Warrant Ratio on the Redemption Date.

This Warrant Certificate is issued under and in accordance with the Warrant Agreement and is subject to the terms and provisions contained in said Warrant Agreement, to all of which terms and provisions the Holder consents by acceptance hereof. Capitalized terms not otherwise defined in this Warrant Certificate shall have the meaning given thereto in the Warrant Agreement.

This Warrant Certificate shall not entitle the Holder to any of the rights of a shareholder of the Company, including, without limitation, the right to vote, to receive dividends and other distributions, or to attend or receive any notice of meetings of shareholders or any other proceedings of the Company.

This Warrant Certificate shall not be valid for any purpose until it shall have been countersigned by the Warrant Agent.

THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS WARRANT

CERTIFICATE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT THAT THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE MAY GOVERN THIS AGREEMENT SOLELY BY VIRTUE OF THE FACT THAT THE COMPANY IS INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE.

IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly executed.

TEREX CORPORATION

By:
Title:

Attest:

Secretary

Countersigned                                           MELLON SECURITIES TRUST COMPANY
                                                                                as Warrant Agent


Dated:                                                                  By:
                                                                                        Authorized Signature

ELECTION TO PURCHASE

The undersigned hereby irrevocably elects to exercise _________ Warrants represented by this Warrant Certificate and to purchase the shares of Common Stock issuable upon the exercise of said Warrants, and requests that Certificates for such shares be issued and delivered as follows:

ISSUE TO:

(Name)

(Address, Including Zip Code)

(Social Security or Tax Identification Number)

DELIVER TO:

(Name)

(Address, Including Zip Code)

In payment of the purchase price with respect to the Warrants exercised the undersigned hereby tenders payment of $__________ by certified or bank cashiers check payable to the order of the Company. If the number of Warrants hereby exercised is fewer than all the Warrants represented by this Warrant Certificate, the undersigned requests that a new Warrant Certificate representing the number of full Warrants not exercised to be issued and delivered as set forth below:

Name of Warrantholder or Assignee:

(Please Print)

Address:

Signature:________________________ DATED:

(Signature must conform in all respects to name of holder as specified on the fact of the Warrant Certificate)

Signature Guaranteed: ________________________

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the Assignee named below all of the rights of the undersigned represented by the within Warrant Certificate, with respect to the number of Warrants set forth below:

                                                         Taxpayer
                                     Number of           Identification
Name of Assignee        Address      Warrants            Number

and does hereby irrevocably constitute and appoint __________, Attorney, to make such transfer on the Warrant Register maintained at the principal office of the Warrant Agent with full power of substitution in the premises.

Dated: ______________, ____
Signature

(Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate).

Signature Guaranteed:


AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT

This Amendment Number One To Loan and Security Agreement ("Amendment") is entered into as of August 24, 1993, between FOOTHILL CAPITAL CORPORATION ('Foothill') and TEREX CORPORATION ('Borrower').

FACT ONE: Foothill and Borrower entered into that certain Loan And Security Agreement as of May 20, 1993 (the 'Agreement').

FACT TWO: Borrower and Foothill desire to amend the Agreement as provided herein.

NOW, THEREFORE, Foothill and Borrower hereby amend the Agreement as follows:

1. The followings definitions in Section 1.1 of the Agreement are amended to read as follows:

(a) 'Permanent Facility' means the revolving loan facility set forth in Section 2.2.

(b) 'Permanent Facility Closing Date' means the date that Foothill receives the Permanent Facility Closing Fee.

(c) 'Permanent Facility Maximum Amount' means Twenty Million Dollars ($20,000,000).

(d) 'Permanent Facility Maximum Foothill Amount' means that portion of the Permanent Facility Maximum Amount for which Foothill shall be responsible hereunder and under the Clark Agreement, exclusive of any participations with Participants, which amount is Sixteen Million Dollars ($16,000,000).

(e) 'Syndicated Amount' means a subcomponent of the Maximum Amount equal to the aggregate financing commitments (to the extent not breached or terminated) of all Participants.

The following definition is added to Section 1.1 of the Agreement:

'Dilution' means all non-cash charges to Borrower's Accounts, including, but not limited to, returned Inventory, volume discounts, warranty claims, writeoffs, offsets due to Inventory rotations and credits issued by Borrower.

2. Section 2.2 of the Agreement

"2.2 Permanent Facility. From time to time, following the Permanent Facility Effective Date, subject to the terms and conditions of this Agreement, and so long as no Event of Default shall have occurred and is continuing, Foothill agrees to make advances to Borrower in an amount not to exceed the amount (the 'Permanent Borrowing Base') equal to the lesser of:

(a) Seventy percent (70%) of the amount of Eligible Accounts; and (b) An amount equal to Borrower's cash collections for the immediately preceding forty-five (45) day period. Foothill shall not have any obligation to make advances under this Section 2.2 to the extent that they would cause the sum of the outstanding Obligations plus the outstanding Clark Obligations to exceed the Permanent Facility Maximum Amount. In the event that Borrower's Dilution exceeds ten percent (10%) of Borrower's Accounts, then Foothill may, in its discretion, decrease its advance rate against Eligible Accounts by the amount of estimated Dilution in excess of ten percent (10%). For the sake of example only, if Dilution were twelve percent (12%), then Foothill's advance rate would be reduced from seventy percent (70%) of Eligible Accounts to sixty-eight percent (68%) of Eligible Accounts. In the event that Borrower's Dilution is less than ten percent (10%) of Borower's Accounts, then Foothill will increase its advance rate against Eligible Accounts by the amount of estimated Dilution below ten percent (10%) of Borrower's Accounts; provided, however, that the advance rate against Eligible Accounts shall never exceed eighty percent (80%) of Eligible Accounts. For the sake of example only, if Dilution were nine (9%), then Foothill's advance rate would be increased from seventy percent (70%) to seventy-one percent (71%) of Eligible Accounts. For purposes of this Section 2.1(a), Dilution will be calculated by Foothill on a quarterly basis, based upon its examinations of Borrower, unless Foothill determines that it is necessary to make such calculation more frequently.

3. Section 2.3(a) of the Agreement is hereby amended to read as follows:

"(a) Borrower acknowledges that, from time to time, Foothill may establish reserves against Eligible Accounts."

4. Section 2.5(a)(ii) of the Agreement is hereby amended to read as follows:

"(ii) the difference of Five Million Dollars ($5,000,000) less the aggregate outstanding face amount of all L/Cs guaranteed by the L/C Guarantees and letters of credit guaranteed by the Clark L/C Guarantees."

5. The second sentence Section 2.8 of the Agreement is hereby amended to read as follows:

"For interest calculation purposes, all checks, wire transfers, or other items of payment to Foothill shall be deemed to have been paid to Foothill three (3) Business Days after the date Foothill actually receives such wire transfer of immediately available federal funds, or after Foothill actually receives possession of such check or other item of payment.'

6. Section 2. 10(a)(ii) of the Agreement is hereby amended to read as follows:

"(ii) A one-time closing fee (the 'Permanent Facility Closing Fee') of Four Hundred Thousand Dollars ($400,000) which shall be earned, in full, on the Permanent Facility Closing Date and shall be due and payable by Borrower (jointly and severally with Clark) to Foothill in connection with this Agreement and the Clark Agreement on the Permanent Facility Closing Date."

7. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, Borrower and Foothill have executed this Amendment as of the date first set forth above.

FOOTHILL CAPITAL CORPORATION

By  /s/ Pamela S. Ferro, VP
                      Title

TEREX CORPORATION

By  /s/ Marvin B. Rosenberg


AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT

This Amendment Number One To Loan and Security Agreement ('Amendment") is entered into as of August 24, 1993, between FOOTHILL CAPITAL CORPORATION ("Foothill") and CLARK MATERIAL HANDLING COMPANY ("Borrower").

FACT ONE: Foothill and Borrower entered into that certain Loan And Security Agreement as of May 20, 1993 (the 'Agreement").

FACT TWO: Borrower and Foothill desire to amend the Agreement as provided herein.

NOW, THEREFORE, Foothill and Borrower hereby amend the Agreement as follows:

1. The followings definitions in Section 1.1 of the Agreement are amended to read as follows:

(a) "Permanent Facility" means the revolving loan facility set forth in Section 2.2.

(b) "Permanent Facility Closing Date" means the date that Foothill receives the Permanent Facility Closing Fee.

(c) "Permanent Facility Maximum Amount" means Twenty Million Dollars ($20,000,000).

(d) "Permanent Facility Maximum Foothill Amount" means that portion of the Permanent Facility Maximum Amount for which Foothill shall be responsible hereunder and under the Terex Agreement, exclusive of any participations with Participants, which amount is Sixteen Million Dollars ($16,000,000).

(e) "Syndicated Amount" means a subcomponent of the Maximum Amount equal to the aggregate financing commitments (to the extent not breached or terminated) of all Participants.

The following definition is added to Section 1.1 of the Agreement:

"Dilution" means all non-cash charges to Borrower's Accounts, including, but not limited to, returned Inventory, volume discounts, warranty claims, writeoffs, offsets due to Inventory rotations and credits issued by Borrower.

2. Section 2.2 of the Agreement is hereby amended to read as follows:

"2.2 Permanent Facility. From time to time, following the Permanent Facility Effective Date, subject to the terms and conditions of this Agreement, and so long as no Event of Default shall have occurred and is continuing, Foothill agrees to make revolving advances to Borrower in an amount not to exceed the amount (the "Permanent Facility Borrowing Base") equal to the lesser of:

(a) Seventy percent (70%) of the amount of Eligible Accounts; and (b) An amount equal to Borrower's cash collections for the immediately preceding forty-five (45) day period. Foothill shall not have any obligation to make advances under this Section 2.2 to the extent that they would cause the sum of the outstanding Obligations plus the outstanding Terex Obligations to exceed the Permanent Facility Maximum Amount. In the event that Borrower's Dilution exceeds ten percent (10%) of Borrower's Accounts, then Foothill may, in its discretion, decrease, its advance rate against Eligible Accounts by the amount of estimated in excess of ten percent (10%). For the sake of example only, if Dilution were twelve percent (12%), then Foothill's advance rate would be reduced from seventy percent (70%) of Eligible Accounts to sixty-eight percent (68%) of Eligible Accounts. In the event that Borrower's Dilution is less than ten percent (10%) of Borrower's Accounts, then Foothill will increase its advance rate against Eligible Accounts by the amount of estimated Dilution below ten percent (10%) of Borrower's Accounts; provided, however, that the advance rate against Eligible Accounts shall never exceed eighty percent (80%) of Eligible Accounts. For the sake of example only, if Dilution were nine percent (9%), then Foothill's advance rate would be increased from seventy percent (70%) to seventy-one percent (71%) of Eligible Accounts. For purposes of this Section 2.1(a), Dilution will be calculated by Foothill on a quarterly basis, based upon its examinations of Borrower, unless Foothill determines that it is necessary to make such calculation more frequently."

3. Section 2.3(a) of the Agreement is hereby amended to read as follows:

"(a) Borrower acknowledges that, from time to time, Foothill may establish reserves against Eligible Accounts.'

4. Section 2.5(a)(ii) of the Agreement is hereby amended to read as follows:

"(ii) the difference of Five Million Dollars ($5,000,000) less the aggregate outstanding face amount of all L/Cs guaranteed by the L/C Guarantees and letters of credit guaranteed by the Terex L/C Guarantees."

5. The second sentence Section 2.8 of the Agreement is hereby amended to read as follows:

"For interest calculation purposes, all checks, wire transfers, or other items of payment to Foothill shall be deemed to have been paid to Foothill three (3) Business Days after the date Foothill actually receives such wire transfer of immediately available federal funds, or after Foothill actually receives possession of such check or other item of payment."

6. Section 2. 10(a)(ii) of the Agreement is hereby amended to read as follows:

"(ii) A one-time closing fee (the "Permanent Facility Closing Fee") of Four Hundred Thousand Dollars ($400,000) which shall be earned, in full, on the Permanent Facility Closing Date and shall be due and payable by Borrower (jointly and severally with Terex) to Foothill in connection with this Agreement and the Terex Agreement on the Permanent Facility Closing Date.'

7. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, Borrower and Foothill have executed this Amendment as of the date first set forth above.

FOOTHILL CAPITAL CORPORATION

By /s/ Pamela S. Ferro, VP
                     Title

CLARK MATERIAL HANDLING COMPANY

By /s/ Marvin B. Rosenberg
                      Title


AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT

This Amendment Number One To Loan and Security Agreement ("Amendment") is entered into as of August 24, 1993, between FOOTHILL CAPITAL CORPORATION ('Foothill') and TEREX CORPORATION ('Borrower').

FACT ONE: Foothill and Borrower entered into that certain Loan And Security Agreement as of May 20, 1993 (the 'Agreement').

FACT TWO: Borrower and Foothill desire to amend the Agreement as provided herein.

NOW, THEREFORE, Foothill and Borrower hereby amend the Agreement as follows:

1. The followings definitions in Section 1.1 of the Agreement are amended to read as follows:

(a) 'Permanent Facility' means the revolving loan facility set forth in Section 2.2.

(b) 'Permanent Facility Closing Date' means the date that Foothill receives the Permanent Facility Closing Fee.

(c) 'Permanent Facility Maximum Amount' means Twenty Million Dollars ($20,000,000).

(d) 'Permanent Facility Maximum Foothill Amount' means that portion of the Permanent Facility Maximum Amount for which Foothill shall be responsible hereunder and under the Clark Agreement, exclusive of any participations with Participants, which amount is Sixteen Million Dollars ($16,000,000).

(e) 'Syndicated Amount' means a subcomponent of the Maximum Amount equal to the aggregate financing commitments (to the extent not breached or terminated) of all Participants.

The following definition is added to Section 1.1 of the Agreement:

'Dilution' means all non-cash charges to Borrower's Accounts, including, but not limited to, returned Inventory, volume discounts, warranty claims, writeoffs, offsets due to Inventory rotations and credits issued by Borrower.

2. Section 2.2 of the Agreement

"2.2 Permanent Facility. From time to time, following the Permanent Facility Effective Date, subject to the terms and conditions of this Agreement, and so long as no Event of Default shall have occurred and is continuing, Foothill agrees to make advances to Borrower in an amount not to exceed the amount (the 'Permanent Borrowing Base') equal to the lesser of:

(a) Seventy percent (70%) of the amount of Eligible Accounts; and (b) An amount equal to Borrower's cash collections for the immediately preceding forty-five (45) day period. Foothill shall not have any obligation to make advances under this Section 2.2 to the extent that they would cause the sum of the outstanding Obligations plus the outstanding Clark Obligations to exceed the Permanent Facility Maximum Amount. In the event that Borrower's Dilution exceeds ten percent (10%) of Borrower's Accounts, then Foothill may, in its discretion, decrease its advance rate against Eligible Accounts by the amount of estimated Dilution in excess of ten percent (10%). For the sake of example only, if Dilution were twelve percent (12%), then Foothill's advance rate would be reduced from seventy percent (70%) of Eligible Accounts to sixty-eight percent (68%) of Eligible Accounts. In the event that Borrower's Dilution is less than ten percent (10%) of Borower's Accounts, then Foothill will increase its advance rate against Eligible Accounts by the amount of estimated Dilution below ten percent (10%) of Borrower's Accounts; provided, however, that the advance rate against Eligible Accounts shall never exceed eighty percent (80%) of Eligible Accounts. For the sake of example only, if Dilution were nine (9%), then Foothill's advance rate would be increased from seventy percent (70%) to seventy-one percent (71%) of Eligible Accounts. For purposes of this Section 2.1(a), Dilution will be calculated by Foothill on a quarterly basis, based upon its examinations of Borrower, unless Foothill determines that it is necessary to make such calculation more frequently.

3. Section 2.3(a) of the Agreement is hereby amended to read as follows:

"(a) Borrower acknowledges that, from time to time, Foothill may establish reserves against Eligible Accounts."

4. Section 2.5(a)(ii) of the Agreement is hereby amended to read as follows:

"(ii) the difference of Five Million Dollars ($5,000,000) less the aggregate outstanding face amount of all L/Cs guaranteed by the L/C Guarantees and letters of credit guaranteed by the Clark L/C Guarantees."

5. The second sentence Section 2.8 of the Agreement is hereby amended to read as follows:

"For interest calculation purposes, all checks, wire transfers, or other items of payment to Foothill shall be deemed to have been paid to Foothill three (3) Business Days after the date Foothill actually receives such wire transfer of immediately available federal funds, or after Foothill actually receives possession of such check or other item of payment.'

6. Section 2. 10(a)(ii) of the Agreement is hereby amended to read as follows:

"(ii) A one-time closing fee (the 'Permanent Facility Closing Fee') of Four Hundred Thousand Dollars ($400,000) which shall be earned, in full, on the Permanent Facility Closing Date and shall be due and payable by Borrower (jointly and severally with Clark) to Foothill in connection with this Agreement and the Clark Agreement on the Permanent Facility Closing Date."

7. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, Borrower and Foothill have executed this Amendment as of the date first set forth above.

FOOTHILL CAPITAL CORPORATION

By  /s/ Pamela S. Ferro, VP
                      Title

TEREX CORPORATION

By  /s/ Marvin B. Rosenberg


AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT

This Amendment Number One To Loan and Security Agreement ('Amendment") is entered into as of August 24, 1993, between FOOTHILL CAPITAL CORPORATION ("Foothill") and CLARK MATERIAL HANDLING COMPANY ("Borrower").

FACT ONE: Foothill and Borrower entered into that certain Loan And Security Agreement as of May 20, 1993 (the 'Agreement").

FACT TWO: Borrower and Foothill desire to amend the Agreement as provided herein.

NOW, THEREFORE, Foothill and Borrower hereby amend the Agreement as follows:

1. The followings definitions in Section 1.1 of the Agreement are amended to read as follows:

(a) "Permanent Facility" means the revolving loan facility set forth in Section 2.2.

(b) "Permanent Facility Closing Date" means the date that Foothill receives the Permanent Facility Closing Fee.

(c) "Permanent Facility Maximum Amount" means Twenty Million Dollars ($20,000,000).

(d) "Permanent Facility Maximum Foothill Amount" means that portion of the Permanent Facility Maximum Amount for which Foothill shall be responsible hereunder and under the Terex Agreement, exclusive of any participations with Participants, which amount is Sixteen Million Dollars ($16,000,000).

(e) "Syndicated Amount" means a subcomponent of the Maximum Amount equal to the aggregate financing commitments (to the extent not breached or terminated) of all Participants.

The following definition is added to Section 1.1 of the Agreement:

"Dilution" means all non-cash charges to Borrower's Accounts, including, but not limited to, returned Inventory, volume discounts, warranty claims, writeoffs, offsets due to Inventory rotations and credits issued by Borrower.

2. Section 2.2 of the Agreement is hereby amended to read as follows:

"2.2 Permanent Facility. From time to time, following the Permanent Facility Effective Date, subject to the terms and conditions of this Agreement, and so long as no Event of Default shall have occurred and is continuing, Foothill agrees to make revolving advances to Borrower in an amount not to exceed the amount (the "Permanent Facility Borrowing Base") equal to the lesser of:

(a) Seventy percent (70%) of the amount of Eligible Accounts; and (b) An amount equal to Borrower's cash collections for the immediately preceding forty-five (45) day period. Foothill shall not have any obligation to make advances under this Section 2.2 to the extent that they would cause the sum of the outstanding Obligations plus the outstanding Terex Obligations to exceed the Permanent Facility Maximum Amount. In the event that Borrower's Dilution exceeds ten percent (10%) of Borrower's Accounts, then Foothill may, in its discretion, decrease, its advance rate against Eligible Accounts by the amount of estimated in excess of ten percent (10%). For the sake of example only, if Dilution were twelve percent (12%), then Foothill's advance rate would be reduced from seventy percent (70%) of Eligible Accounts to sixty-eight percent (68%) of Eligible Accounts. In the event that Borrower's Dilution is less than ten percent (10%) of Borrower's Accounts, then Foothill will increase its advance rate against Eligible Accounts by the amount of estimated Dilution below ten percent (10%) of Borrower's Accounts; provided, however, that the advance rate against Eligible Accounts shall never exceed eighty percent (80%) of Eligible Accounts. For the sake of example only, if Dilution were nine percent (9%), then Foothill's advance rate would be increased from seventy percent (70%) to seventy-one percent (71%) of Eligible Accounts. For purposes of this Section 2.1(a), Dilution will be calculated by Foothill on a quarterly basis, based upon its examinations of Borrower, unless Foothill determines that it is necessary to make such calculation more frequently."

3. Section 2.3(a) of the Agreement is hereby amended to read as follows:

"(a) Borrower acknowledges that, from time to time, Foothill may establish reserves against Eligible Accounts.'

4. Section 2.5(a)(ii) of the Agreement is hereby amended to read as follows:

"(ii) the difference of Five Million Dollars ($5,000,000) less the aggregate outstanding face amount of all L/Cs guaranteed by the L/C Guarantees and letters of credit guaranteed by the Terex L/C Guarantees."

5. The second sentence Section 2.8 of the Agreement is hereby amended to read as follows:

"For interest calculation purposes, all checks, wire transfers, or other items of payment to Foothill shall be deemed to have been paid to Foothill three (3) Business Days after the date Foothill actually receives such wire transfer of immediately available federal funds, or after Foothill actually receives possession of such check or other item of payment."

6. Section 2. 10(a)(ii) of the Agreement is hereby amended to read as follows:

"(ii) A one-time closing fee (the "Permanent Facility Closing Fee") of Four Hundred Thousand Dollars ($400,000) which shall be earned, in full, on the Permanent Facility Closing Date and shall be due and payable by Borrower (jointly and severally with Terex) to Foothill in connection with this Agreement and the Terex Agreement on the Permanent Facility Closing Date.'

7. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, Borrower and Foothill have executed this Amendment as of the date first set forth above.

FOOTHILL CAPITAL CORPORATION

By /s/ Pamela S. Ferro, VP
                     Title

CLARK MATERIAL HANDLING COMPANY

By /s/ Marvin B. Rosenberg
                      Title


TERMINATION, GENERAL RELEASE AND WAIVER AGREEMENT

This TERMINATION, GENERAL RELEASE AND WAIVER AGREEMENT is made and entered into this 29th day of June, 1993 by and between CLARK MATERIAL HANDLING COMPANY (together with its subsidiaries, the "Company") and GARY D. BELLO ("Bello").

1. Termination

Bello hereby acknowledges and agrees that his employment with the Company shall be terminated effective as of the end of the business day of May 7, 1993 (the "Termination Date"); provided that
(i) Bello shall not be obligated to perform any services for the Company or any of its subsidiaries or affiliates after May 7, 1993 and (ii) Company agrees that as of the Termination Date, Bello has no duty or duties, or other obligations or responsibilities to or for the Company or any of its subsidiaries or affiliates, except as expressly provided herein. Bello hereby waives any right and agrees not to seek reinstatement or employment with the Company.

2. Payment of Accrued Earnings

The Company hereby agrees to pay promptly to Bello when due all monetary or other benefits (including 401(k) contributions, but excepting any medical, life insurance and disability benefits or contributions required to be paid by the Company which will be paid or made as required or otherwise), less withholding for applicable taxes, which he has earned or accrued, or to which he is or may be entitled (but excluding any accrued vacation and any pro-rated bonuses to which Bello may be entitled to the Termination Date) through the Termination Date ("Accrued Earnings Payment"). Bello hereby acknowledges that any and all obligations of the Company with respect to him, except as specifically otherwise provided herein, will be fully satisfied by Bello's acceptance of the Accrued Earnings Payment.

3. Termination Payment and Benefits

(a) Bello hereby agrees to accept three days from the Effective Date, as provided below, as full and final consideration for his promises, obligations and release set forth herein, and in settlement of any and all claims as more particularly set forth below, a lump sum payment of $300,000.00, less withholding for income and other applicable taxes (collectively, "Termination Payment") and the benefits referred to in subparagraphs 3(b)-(d) below. The Termination Payment (i) shall be paid by the Company into escrow with Robinson, Silverman, Pearce, Aronsohn & Berman (the "Escrow Agent") simultaneously with the execution of this Agreement and (ii) shall be paid at the end of three days from the Effective Date (A) to Bello, if Bello has not challenged the waivers and releases under this Agreement or (B) to the Company if Bello has made such a challenge.

(b) The Company also shall continue to include Bello in its medical benefits and life insurance programs during the period commencing on the Termination Date and ending on May 7, 1994 (the "Termination Period"), as if his employment had not been terminated; provided, however, that such benefits shall cease at such time during such period as Bello has secured similar medical and insurance benefits from a new employer.

(c) Bello shall also be entitled to continue to use the Company vehicle he is currently using during the Termination Period, and the Company shall pay all costs of insurance in accordance with its current policies. At the end of the Termination Period Bello, at his option, may purchase the vehicle from the Company at the lease buyout amount, may return the vehicle to the Company or otherwise dispose of the vehicle at the Company's direction.

(d) The Company agrees to pay for any outplacement services obtained by Bello provided (i) the company providing such services as selected by Bello is acceptable to the Company and (ii) the Company shall be responsible for negotiation and settlement of the fees and expenses due for such services. The Company also agrees to pay legal fees incurred by Bello in connection with the preparation and negotiation of this Agreement not to exceed $5,000.00. The parties agree that any payment required to be made by the Company pursuant to this clause (d) shall be timely and fully made by the Company directly to the provider of such services against detailed invoice therefor.

(e) Bello expressly agrees that he shall not be entitled to and shall not receive any other payments or benefits of any kind from the Company, including without limitation any bonus payments, during the Termination Period, other than the Termination Payment, the Accrued Earnings Payment and the benefits expressly provided for herein.

4. Waiver and Release of Claims

(a) Bello understands that there are various state, federal and local laws that prohibit employment discrimination on the basis of age, sex, race, color, national origin, religion, handicap, veteran status and other protected categories and that these laws are enforced through the Equal Employment Opportunity Commission, the U.S. Department of Labor, and other agencies. He intends to give up any and all rights he may have under these or any other laws relating to his employment with the Company and the termination of his employment, except as expressly provided in this Agreement.

(b) In consideration of and subject to and conditional upon the Company's timely making the Termination Payment, the Accrued Earning Payment and the other payments provided for in this Agreement, and the Company's continuing to provide Bello with the benefits provided for herein during the Termination Period, Bello, on his behalf and on behalf of his successors and assigns, hereby irrevocably, unconditionally and generally releases, and agrees not to commence in any forum, any action or proceeding against the Company and its parent, affiliates, subsidiaries, divisions, their successors and assigns, and its and their respective officers, agents, employees, directors, shareholders, representatives, successors and assigns ("Releasees") from or in connection with, and hereby waives and/or settles, except as otherwise stated in this Agreement, to and as of the Effective Date, any and all actions, causes of action, suits, debts, dues, sums of money, accounts, controversies, agreements, promises, damages, judgments, executions, or any liability, claims or demands, known or unknown and of any nature whatsoever and which Bello and his successors or assigns ever had, now have or hereafter can, shall or may have, arising directly or indirectly out of or relating to his employment with the Company or the performance of services for the Company or the termination of such employment or services and, specifically, without limitation (i) claims for wrongful dismissal or termination of employment; (ii) claims arising under any contract, express or implied; (iii) claims arising under any federal, state, local or other fair or equal employment practice or employee relations statutes, orders, laws, ordinances, regulations or the like, specifically, without limitation, those statutes, executive orders, laws, ordinances, regulations or the like prohibiting discrimination based upon age, race, religion, sex, national origin, disability or any other unlawful bases; (iv) claims based upon any other federal, state or local statutes, orders, laws, ordinances, regulations or the like; (v) claims for tort, tortious or harassing conduct, infliction of mental distress, interference with contract, fraud, libel or slander; and (vi) any claim whatsoever for damages, including without limitation, punitive or compensatory damages, or for attorneys' fees, expenses, costs, wages, injunctive or equitable relief. Without in any way limiting the generality of the foregoing, Bello hereby waives and releases any rights or claims that he may have arising under the Age Discrimination in Employment Act of 1967, as amended, the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights Act of 1866, the American's with Disabilities Act of 1990, the Executive Law of the State of New York and the Administrative Code of the City of New York. Bello represents and warrants that he has not filed any complaints, claims, or actions against the Company, its successors, assigns and their affiliates, officers, agents, directors, supervisors, employees, or representatives with any state, federal, or local agency or court, based upon events occurring on or prior to the date of this Agreement on any basis, including without limitation, with respect to his employment with or performances of services the Company or the termination of such employment or services.

Notwithstanding anything to the contrary contained herein, the foregoing release shall not apply to any rights or claims that Bello may have (i) for benefits under the provisions of any pension or employee benefits plans maintained by the Company or applicable affiliates or subsidiaries, (ii) for payments pursuant to any obligation of the Company or any affiliate or subsidiary thereof, or any such party's insurance carrier, to indemnify Bello in connection with any third party or derivative claim arising out of Bello's having served as a director, officer or employee of the Company or any of its affiliates or subsidiaries, pursuant to any by-law, charter provision, contract, policy or otherwise, or (iii) arising out of any Releasee's gross negligence, fraud or willful misconduct. The Company and any applicable subsidiaries or affiliates shall, with respect to Bello's performance of services through the date hereof and through the Termination Date, treat Bello in the same manner as other officers and employees of such companies are treated with respect to mandatory and discretionary indemnification and directors' and officers' insurance coverage.

(c) In consideration of Bello's entry into and compliance with the provisions of this Agreement, the Company, for itself and on behalf of each of its parents, subsidiaries and affiliates (including without limitation Clark Equipment GmbH), successors and assigns (collectively, "Releasors"), hereby irrevocably, unconditionally and generally releases, and agrees not to commence in any forum, any action or proceeding against Bello, his heirs, legal representatives, successors and assigns ("Releasee"), from or in connection with, and hereby waives and/or settles, except as otherwise stated in or contemplated by this Agreement, any and all actions, causes of action, suits, debts, dues, sums of money, accounts, controversies, agreements, promises, damages, judgments, executions, or any liability, claims or demands, known or unknown and of any nature whatsoever and which Releasors ever had, now have or hereafter can, shall or may have, arising directly or indirectly out of or relating to Bello's employment with the Company or any of its subsidiaries or affiliates or the performance or services for the Company or any of its subsidiaries or affiliates or the termination of such employment or services, and, specifically, without limitation, (i) claims for alleged breach of the duty of due care; (ii) claims arising under any contract, express or implied; (iii) claims based upon any federal, state or local statutes, orders, laws, ordinances, regulations or the like; (iv) claims for tort, interference with contract, fraud, libel or slander; and (v) any claim whatsoever for damages, including without limitation, punitive or compensatory, damages, or for attorney's fees, expenses, costs, wages, or injunctive or equitable relief; provided, however, that claims arising out of Bello's gross negligence, fraud or willful misconduct shall not be released.

(d) Bello hereby acknowledges that, subject to the Company's timely performance of its obligations under the Agreement, all sums which are, were or may have been claimed to be due to him have been paid or such payments have been released, waived or settled by Bello as provided in this Agreement and by payment of the Accrued Earnings Payment.

5. Protection of Confidential Information; NonCompetition; NonDisparagement

In consideration of the Company's agreement to make the Termination Payment and to continue to provide Bello with the benefits provided for herein during the Termination Period:

(a) Bello acknowledges that:

(i) As a result of his employment with the Company, he has obtained secret and confidential information concerning the business of the Company and its affiliates and their operations and finances, including, without limitation, the identity of customers and sources of supply, their needs and requirements, the nature and extend of contracts with them, and related cost, price and sales information;

(ii) the Company and its affiliates will suffer substantial damage which will be difficult to compute if, during the period of his employment with the Company or thereafter, Bello should enter into a Competitive Business within one year after the Termination Date or if he should divulge secret and confidential information relating to the business of the Company heretofore or hereafter acquired by him in the course of his employment with the Company or any affiliate; and

(iii) the provision of this Agreement are reasonable and necessary for the protection of the business of the Company and its affiliates.

(b) Bello agrees that he will not at any time during the term of this Agreement, or thereafter, divulge to any person, firm or corporation or use for his own benefit any proprietary information obtained or learned by him during the course of his employment with the company or any of its affiliates, or prior to the commencement thereof in the course of his employment with Clark Equipment Company, with regard to the operational, financial, business or other affairs of the Company or its affiliates, their officers and directors, including, without limitation, proprietary trade "know how" and secrets, customer lists, sources of supply, pricing policies, proprietary operational methods or technical processes, except (i) with the Company's express written consent;
(ii) to the extent that any such information is in or becomes part of the public domain other than as a result of Bello's breach of any of his obligations hereunder; or (iii) where required to be disclosed by court order, subpoena or other government or legal process by law. In the event that Bello shall be required to make disclosure pursuant to the provisions of clause (iii) of the preceding sentence, Bello promptly, but in no event more than 48 hours after learning of such subpoena, court order, or other government or legal process, shall notify, by personal delivery or by facsimile transmission, confirmed by mail, the Company and, at the Company's expense, Bello shall: (A) take all reasonably necessary steps requested by the Company to defend against the enforcement of such subpoena, court order or other government or legal process and (B) permit the Company to intervene and participate with counsel of its choice in any proceeding relating to the enforcement thereof. Notwithstanding the foregoing if at any time Bello is identified or referenced in any print or other media in a manner which could reasonably be believed in any way to have an adverse effect on the reputation or business affairs of Bello, then in such event, Bello may comment or otherwise respond to such matters (i) in a way or means consistent with the intent of the Agreement (including, without limitation, subparagraphs 5(b) and (e) hereof) and (ii) in an effort to defend, clarify or rectify such matters. In the event Bello elects to respond, (i) he will notify the Company not less than 48 hours before any response is made public or given to the party or parties in question and (ii) the Company, in the reasonable exercise of its discretion, shall have the right to approve such response. In the event the Company does not promptly approve the initial response from Bello, the Company and Bello shall promptly negotiate, and the parties shall promptly agree to a mutually satisfactory response.

(c) Bello will promptly deliver to the Company (to the extent not previously delivered) all memoranda, notes, records, reports, manuals, drawings, blueprints and other documents (and all copies thereof) in his possession relating to the business of the Company and its affiliates and all property associated therewith, which he may possess or have under his control. Bello shall have the right to retain all of his personal property.

(d) For a period of one (1) year after the Termination Date, Bello, without the prior written permission of the Company, shall not directly or indirectly, (i) enter into the employ of or render any services to any person, firm or corporation engaged in the manufacture or distribution (including, without limitation, all authorized dealers of or for the Company) of forklift trucks, tow tractors, powered hand trucks or other industrial material handling equipment or replacement parts or components related thereto or which otherwise directly or indirectly competes with the business of the Company as presently conducted or proposed to be conducted as of the Termination Date (a "Competitive Business"); (ii) engage in any Competitive Business for his own account; (iii) become associated with or interested in any Competitive Business as an individual, partner, shareholder, creditor, director, officer, principal, agent, employee, trustee, consultant, advisor or in any other relationship or capacity; (iv) solicit, induce or entice, or cause any other person or entity to solicit, induce or entice to leave the employ of the Company any person who was employed or retained by the Company on the date hereof, provided, however, that Bello may (A) employ, retain or otherwise engage in business with William Tweardy and/or Elwyn Gillette and (B) otherwise employ or retain such other individuals as are subsequently approved by the Company in the reasonable exercise of its discretion; or (v) solicit, interfere with, or endeavor to entice away from the Company or any of its affiliates any of its or their customers, sources of supply, or dealers or in any other way interfere with contractual relations with any such persons. However, nothing in this Agreement shall preclude Bello from investing his personal assets in the securities of any corporation or other business entity which is engaged in a business competitive with that of the Company if such securities are traded on a national stock exchange or in the over-the-counter market and if such investment does not result in his beneficially owning, at any time, more than 1% of the publicly-traded equity securities of such competitor.

(e) Subject to paragraph 6 below, and except as paragraph 5(b) permits or applicable law or legal process requires, Bello agrees he will conduct himself in a professional manner and not make any disparaging, negative or other statements regarding the Company, its affiliates or any of the Company's or its affiliates officers, directors or employees which could reasonably be believed in any way to have an adverse affect on the business or affairs of the Company or its affiliates or otherwise be injurious to or not be in the best interests of the Company, its affiliates or any such other persons. The Company agrees that it will conduct itself in a professional manner and not make any disparaging, negative or other statements regarding Bello which could in any way have and adverse affect on Bello or his reputation or otherwise be injurious to Bello.

(f) If Bello commits a breach, or threatens to commit a breach, of any of the provisions of Paragraph 5, the Company shall have the right and remedy:

(i) to have the provisions of this Agreement specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by Bello that the services rendered by him to the Company were of a special, unique and extraordinary character and that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will not provide an adequate remedy to the Company;

(ii) to require Bello to account for and pay over to the Company all compensation, profits, monies, accruals, increments or other benefits (collectively "Benefits") derived or received by him as the result of any transactions constituting a breach of any of the provisions of Paragraph 5, and Bello hereby agrees to account for and pay over such Benefits to the Company; and

(iii) to require Bello to reimburse the Company for all costs and expenses, including attorneys' fees incurred in connection with the enforcement of this Paragraph 5, unless Bello is the successful party in which event the Company shall reimburse Bello for all such costs and expenses incurred by him.

Each of the rights and remedies enumerated in this Paragraph 5 shall be independent of the other, and shall be severally enforceable, and such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or equity.

(g) If any provision of this Paragraph 5 is held to be unenforceable because of the scope, duration or area of its applicability, the tribunal making such determination shall have the power to modify such score, duration, or area, or all of them, and such provision or provisions shall then be applicable in such modified form.

6. Resignation of Offices; Cooperation

Bello hereby resigns any and all positions previously held as an officer or director of the Company effective immediately. Accordingly, Bello shall not sign any financial periodic or special reports on behalf of the Company, including but not limited to financial reports or statements submitted to the Company's lenders, the Securities and Exchange Commission, the Internal Revenue Service, other governmental agencies or external auditors. Bello shall upon reasonable notice and at reasonable times (having due regard for conflicting obligations arising from any other employment or engagement of Bello), advise and assist the company in preparing such operational, financial or other reports or other filings as the Company may reasonable request, and to respond to inquiries concerning the operations, finances and business of the Company and otherwise cooperate with the Company and its affiliates as the Company shall reasonably request.

7. Consultation with Attorney and Review of Agreement and Release

By executing this Agreement Bello acknowledges that (i) he has been advised in writing by the Company to consult with an attorney before executing this Agreement; (ii) he had adequate time to review it and to consider whether to sign the Agreement and;
(iii) he understands each and every term of this Agreement and the full effect of signing the Agreement, including his obligations to the Company and his release and waiver of any and all claims.

8. Third Party Agreements

Bello hereby warrants and represents that he has not entered into any third party agreements in the Company's name or on the Company's behalf not known or disclosed to the board of directors of Terex Corporation, individual directors on such board or to David Langevin as of the Termination Date, other than in the ordinary course of the Company's business. In consideration of the Company's agreement to make the Termination Payment and to continue to include Bello in its benefits program during the Termination Period, upon reasonable notice and at reasonable times (having due regard for conflicting obligations arising from any other employment or engagement of Bello), Bello agrees to reasonably cooperate with the Company at the Company's reasonable request and at its expense in defending against any claims against the Company and its affiliates. Bello further represents and warrants that during the period of his employment with the Company, he has not engaged in any conduct or activity which was (i) knowingly to Bello a violation of the law (ii) was willful misconduct or (iii) a material breach of Company policy.

9. Breach of this Agreement

(a) In addition to any other remedies which the Company may have hereunder or by law, Bello acknowledges and agrees that in the event of any breach of Bello's obligations under paragraph 5(d) of this Agreement, the Company, at its option, shall be entitled either (i) to the return of the Termination Payment (which shall be forfeited) or (ii) two have the covenants contained in paragraph 5(d) above be automatically extended to a date one (1) year from the date on which Bello either permanently ceases such violation or becomes subject to a final order or judgment enforcing such covenant.

(b) In addition to any other remedies which the Company may have hereunder or by law, Bello acknowledges and agrees that in the event of any breach of Bello's obligations under paragraphs
5 (b) or 5 (e), the Company shall be entitled to the return of the Termination Payment, which shall be forfeited.

(c) Notwithstanding anything to the contrary contained herein, prior to the company's exercising any rights or remedies against Bello for any alleged breach of this Agreement (excluding alleged breaches of paragraphs 5(b), 5(d) and 5(e) above), Bello shall be entitled to cure such alleged breach within twenty (20) days after written notice from the Company thereof. In the event Bello materially breaches his obligations under any provision of this Agreement (and fails to timely cure same, where permitted), the Company shall be entitled to withhold any unpaid benefits which would otherwise be paid or provided to Bello under this Agreement.

10. No Admissions by the Company

This Agreement and/or any payments made hereunder are not intended to be, shall not be construed as and are not an admission or concession by the Company of any wrongdoing or illegal or actionable acts or omissions and the Company affirmatively states that it is not engaged in any such acts or omissions. In consideration of the Company's agreement to make the Termination Payment and to continue to include Bello in its benefits program during the Termination Period, Bello shall not directly or indirectly make any written or oral statements, suggestions or representations that the Company has made or implied any such admission or concession.

11. Confidentiality of this Agreement

In consideration of the mutual covenants contained herein, each party shall keep confidential and not disclose to any person (excluding legal, financial and tax advisors and such minimum disclosure as may be required by applicable securities laws) any and all information concerning the terms of this Agreement, including without limitation, the amounts of any payments made hereunder, except as may be required by law.

12. Miscellaneous

This Agreement contains all the understandings and agreements with respect to the matters set forth herein, and there are no others made either contemporaneously herewith or otherwise. This Agreement shall be governed by the laws of the State of New York applicable to contracts made and wholly performed therein. If any section of this Agreement is determined to be void, voidable or unenforceable, it shall have no effect on the remainder, which shall remain in full force and effect.

13. Voluntary Signing

Bello acknowledges that this Agreement and all the terms hereof are fair, reasonable and are not the result of any fraud, duress, coercion, pressure or undue influence exercised by the Company and that he has approved and/or entered into this Agreement and all of the terms hereof, knowingly, freely and voluntarily. Each of the other parties hereto represents that this Agreement has been duly authorized and executed by a duly authorized officer.

14. Survival

All of Bello's obligations pursuant to this Agreement shall survive the Termination Date and the expiration of the Termination Period, except as expressly stated in this Agreement.

15. Counterparts; Effective Signatures

This Agreement may be executed in two or more counterparts, all of which taken together shall constitute one instrument. Facsimile copies of signatures to this executed Agreement shall be valid and enforceable to the same extent as the original signatures to such agreement.

/s/ Gary D. Bello
GARY D. BELLO

CLARK MATERIAL HANDLING COMPANY

By: /s/ Marvin B. Rosenberg
     Name:    Marvin B. Rosenberg
     Title:   Secretary

CLARK MATERIAL HANDLING GmbH

By: /s/ Marvin B. Rosenberg
     Name:   Marvin B. Rosenberg
     Title:  Secretary

STATE OF KENTUCKY)
: ss.:
COUNTY OF FAYETTE)

On the 25th day of June, 1993 personally came before me Gary D. Bello, and being duly sworn, acknowledged that he is the person described in and who executed the foregoing Agreement and acknowledged that he executed same.

My commission expires: March 16, 1996

/s/ C. Walker
Notary Public


STATE OF Connecticut)
: ss.: Westport
COUNTY OF Fairfield )

On the 30th day of June, 1993 personally came before me Marvin B. Rosenberg, who, being duly sworn, did depose and say that he resides in Westport, Connecticut; that he is the Secretary of Clark Material Handling Company, the corporation described in and which executed that acknowledged that he is the person described in the above instrument; and that he signed his name thereto by order of the board of directors.

My commission expires: February 28, 1998

/s/ Patricia B. Zuckerman
   Notary Public

STATE OF Connecticut)
: ss.: Westport COUNTY OF Fairfield )

On the 30th day of June 1993 personally came before me Marvin B. Rosenberg who, being duly sworn, did depose and say that he resides in Westport, Connecticut; that he is the Secretary of Clark Material Handling GmbH, the corporation described in and which executed that acknowledged that he is the person described in the above instrument; and that he signed his name thereto by order of the board of directors.

My commission expires: Feburary 28, 1998

/s/ Patricia B. Zuckerman
   Notary Public


TEREX CORPORATION
500 Post Road East
Westport, Connecticut 06880

December 20, 1993

To the Purchasers
Who Are Signatories Hereto

Dear Sirs:

TEREX CORPORATION, a Delaware corporation, hereby agrees with you as follows:

SECTION 1. DEFINITIONS

(a) As used in this Agreement, the following terms shall have the following meanings:

Affiliate: An "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

Agreement: This Purchase Agreement and the Other Purchase Agreements, in each case, as the same may be amended, supplemented or modified from time to time in accordance with the terms hereof and thereof.

Applicable Agreement: Any bond, debenture, note or any other evidence of indebtedness, indenture, mortgage, deed of trust or any other lease, contract, agreement or instrument to which the Company or any of the Subsidiaries is a party or by which any of their respective properties or assets is subject.

Applicable Law: Any Federal, state, local or foreign statute, law (including, without limitation, common law), code, ordinance, governmental rule or regulation, or any judgment, injunction, decree, rule, writ, or order of any court or governmental agency or authority applicable to the Company or any of the Subsidiaries or any of their respective properties or assets.

Audited Financial Statements: The audited consolidated financial statements, together with the notes thereto, of the Company, included (or incorporated by reference) in the SEC Documents.

Business Day: A day that is not a Saturday, a Sunday or a day on which banking institutions in the State of New York are not required to be open.

Certificate of Designation: The Certificate of Designation of Preferences and Rights of the Preferred Stock substantially in the form attached hereto as Exhibit 1.

Charter Documents: With respect to any Person, the Articles or Certificate of Incorporation and By-laws, partnership agreement or other organizational documents of such Person.

Code: The Internal Revenue Code of 1986, as amended.

Commission: The Securities and Exchange Commission.

Common Stock: Common Stock, $.01 par value per share, of the Company.

Company: Terex Corporation, a Delaware corporation, and any successor corporation thereto.

Documents: All documents necessary to consummate the transactions contemplated by the Placement Memorandum, including without limitation, this Agreement, the Certificate of Designation, the Registration Rights Agreements, the Warrant Agreement, the Securities and any documents or instruments contemplated by or executed in connection with any of them or the transactions contemplated hereby or thereby.

Environmental Laws: All Applicable Laws now or hereafter in effect, relating to pollution or protection of human health or the environment, including, without limitation, Applicable Laws relating to (i) emissions, discharges, releases or threatened releases of Hazardous Materials into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), (ii) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of Hazardous Materials, and
(iii) underground storage tanks, and related piping, and emissions, discharges, releases or threatened releases therefrom.

ERISA: The Employee Retirement Income Security Act of 1974, as amended.

ERISA Affiliate: Any affiliate of the Company as defined in section 407(d)(7) of ERISA.

Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.

Financial Statements: Collectively, the Audited Financial Statements and the Unaudited Financial Statements.

Hazardous Materials: All pollutants, contaminants, chemicals, or industrial, toxic or hazardous constituents, substances or wastes, including, without limitation, petroleum, including crude oil or any fraction thereof, or any petroleum product or other wastes, chemicals or substances regulated by any Environmental Law.

Latest Unaudited Financial Statements: The unaudited consolidated financial statements, together with the notes thereto, of the Company at, and for the nine months ended, September 30, 1993, included in the SEC Documents.

Lien: Any mortgage, lien, pledge, charge, security interest, adverse claim, or encumbrance of any kind, in each case whether or not filed, recorded or otherwise perfected under applicable law (including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

Loan Agreements: Collectively, (i) the Indenture, dated as of July 31, 1992, among the Company, certain of its subsidiaries and United States Trust Company of New York, as trustee (the "Senior Indenture"), (ii) the Indenture, dated as of June 30, 1987, between the Company and Continental Bank, National Association (formerly Continental Illinois National Bank and Trust Company of Chicago), as trustee, (iii) the Loan and Security Agreement, dated as of May 20, 1993, between Foothill Capital Corporation and the Company, and (iv) the Loan and Security Agreement, dated as of May 20, 1993, between Foothill Capital Corporation and Clark Material Handling Company, in each case as amended and in effect on December 31, 1993.

Material Adverse Effect: A material adverse effect on (i) the properties, business, prospects, operations, earnings, assets, liabilities or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, (ii) the ability of the Company to perform its obligations hereunder, under any of the other Documents or under the Securities or (iii) the validity or enforceability of this Agreement, any of the other Documents or the Securities.

Pension Plan: Any "employee pension benefit plan", as defined in Section 3(2) of ERISA (other than a multiemployer plan, as defined in Section 3(37) of ERISA), maintained or contributed to by the Company or any ERISA Affiliate of the Company.

Person: Any individual, partnership, corporation, joint venture, association, joint-stock company, trust, unincorporated organization, government or agency or political subdivision thereof, or other entity.

Placement Agent: Jefferies & Company, Inc., as placement agent.

Placement Memorandum: The Amended and Restated Private Placement Memorandum of the Company, dated December 14, 1993, relating to the Securities, and all attachments, exhibits and appendices thereto.

Preferred Stock: The Series A Cumulative Redeemable Convertible Preferred Stock of the Company, $.01 par value per share, having the rights, designations and preferences set forth in the Certificate of Designation.

Privately Outstanding Securities: The Securities, the Conversion Shares and the Warrant Shares upon original issuance thereof, and at all times subsequent thereto until, in the case of any such Security, (i) it has been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering it, or (ii) it is sold pursuant to Rule 144.

Proceeding: An action, claim, suit or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition).

Purchasers: Those Persons who have executed a counterpart of this Agreement on any one of the signature pages hereof.

Registration Rights Agreements: The Registration Rights Agreements, dated as of the Closing Date, by and among the Company and the Purchasers, substantially in the forms attached hereto as Exhibit 2(a) and (b), as amended from time to time in accordance with the terms thereof.

Rule 144: Rule 144 as promulgated by the Commission under the Securities Act, and any successor rule or regulation thereto.

Rule 144A: Rule 144A as promulgated by the Commission under the Securities Act, and any successor rule or regulation thereto.

SASM&F: Skadden, Arps, Slate, Meagher & Flom, special counsel to the Purchasers.

Securities: Collectively, the Shares and the Warrants to be sold pursuant to this Agreement.

Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.

State: One of the sovereign states or commonwealths of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico and any U.S. Territory.

subsidiary: With respect to any Person, (a) a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by a subsidiary of such Person, or by such Person and one or more subsidiaries of such Person, (b) 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 (c) any other Person (other than a corporation) 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 thereof, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of the majority of the directors or other governing body of such Person.

Unaudited Financial Statements: Collectively, the unaudited consolidated financial statements, together with the notes thereto, of the Company, included (or incorporated by reference) in the SEC Documents.

Warrant Agreement: The Warrant Agreement, dated as of the Closing Date, by and between the Company and the Warrant Agent, substantially in the form attached hereto as Exhibit 3, as amended from time to time in accordance with the terms thereof.

(b) In addition, the following terms shall have the respective meanings given thereto in the Sections indicated below:

Defined Term                           Section

CERCLA                               5.18

Closing                             2.2

Closing Date                           2.2

Conversion Shares                         5.2

GAAP                                   5.6

Indemnified Parties                     2.6

Intellectual Property                 5.19

Losses                               2.6

Other Purchase Agreements                 2.2

Other Purchasers                           2.2

Party in Interest                         2.3

Prohibited Transaction               4.5

Purchaser Representatives                 5.1

Qualified Trust                     2.3

Scheduled Closing Date               2.4

SEC Documents                         5.8

Separate Account                           2.3

Shares                               2.1

Subsidiaries                           5.1

Warrant Agent                         3.1.6

Warrants                                   2.1

Warrant Shares                       5.2

SECTION 2. PURCHASE AND SALE OF SECURITIES

2.1 Issue of Securities

(a) The Company has authorized the issuance and sale to the Purchasers hereunder of (i) 1,200,000 shares of Preferred Stock (the "Shares") and (ii) 1,300,000 warrants (the "Warrants") to purchase shares of its Common Stock, on the terms and subject to the conditions set forth in the Warrant Agreement. Each share of Preferred Stock will be evidenced by a certificate substantially in the form attached hereto as Exhibit 4. Each Warrant shall be evidenced by a certificate substantially in the form attached to the Warrant Agreement as Exhibit A thereto.

(b) The Company hereby agrees (i) to cause to be authorized and to reserve and keep available at all times during which any shares of Preferred Stock remain outstanding, free from preemptive rights, out of its treasury stock or authorized but unissued shares of Common Stock, or both, solely for the purpose of effecting the conversion of the Preferred Stock pursuant to its terms, sufficient shares of Common Stock to provide for the issuance of the maximum number of shares of Common Stock issuable upon conversion of the outstanding shares of Preferred Stock, (ii) to issue and cause the transfer agent to deliver such shares of Common Stock as required upon conversion of the shares of Preferred Stock, and to take all actions necessary to ensure that all such shares of Common Stock will, when issued, be duly and validly issued, fully paid and nonassessable, and
(iii) if any shares of its Common Stock to be reserved for the purpose of issuance of shares of Common Stock upon conversion of the Preferred Stock, require registration with or approval of any governmental authority under any Applicable Law before such shares of Common Stock may be validly issued or delivered, then it shall secure such registration or approval, as the case may be, and maintain such registration or approval in effect so long as so required.

(c) The Company hereby agrees (i) to cause to be authorized and to reserve and keep available at all times during which any Warrants remain outstanding, free from preemptive rights, out of its treasury stock or authorized but unissued shares of Common Stock, or both, solely for the purpose of effecting the exercise of the Warrants pursuant to the terms of the Warrant Agreement, sufficient shares of Common Stock to provide for the issuance of the maximum number of shares of Common Stock issuable upon exercise of the outstanding Warrants, (ii) to issue and cause the transfer agent to deliver such shares of Common Stock as required upon exercise of the Warrants, and to take all actions necessary to ensure that all such shares of Common Stock will, when issued and paid for pursuant to the exercise of the Warrants, be duly and validly issued, fully paid and nonassessable, and (iii) if any shares of its Common Stock to be reserved for the purpose of issuance of shares of Common Stock upon exercise of the Warrants, require registration with or approval of any governmental authority under any Applicable Law before such shares of Common Stock may be validly issued or delivered, then it shall secure such registration or approval, as the case may be, and maintain such registration or approval in effect so long as so required.

2.2 Sale and Purchase of the Securities; Closing

(a) Subject to the terms and conditions set forth herein, the Company hereby agrees to sell to each Purchaser, and each Purchaser, severally and not jointly, agrees to purchase from the Company, (i) the number of Shares set forth below such Purchaser's name on the applicable signature page hereof, to be sold at a price equal to $23 per Share, and (ii) the number of Warrants set forth below such Purchaser's name on the applicable signature page hereof, to be sold at a price equal to $2 per Warrant. The Company and the Purchasers hereby agree that the aggregate purchase price for the Preferred Stock and Warrants shall be allocated $23 to the Preferred Stock and $2 to the Warrants, which amounts are based on each instrument's anticipated relative fair market value at the time of issuance.

(b) The sale and purchase of the Securities shall take place at a closing (the "Closing") at the offices of SASM&F, 919 Third Avenue, New York, New York, at 9:00 A.M., New York time, on December 20, 1993, or such other Business Day and time as may be agreed upon by you and the Company (such time and date being referred to as the "Closing Date"). At the Closing, the Company will deliver to each Purchaser (i) one or more certificates representing such number of Shares as are to be purchased by such Purchaser, in each case registered in such Purchaser's name or in the name of such nominee or designee as such Purchaser may request, and (ii) one or more certificates representing the Warrants to be purchased by such Purchaser, in each case registered in such Purchaser's name or in the name of such nominee or designee as such Purchaser may request, against payment of the purchase price therefor by Federal funds bank wire transfer to such bank account as the Company shall designate at least two Business Days prior to the Closing. The Company agrees that in connection with the placement of the Securities, the Placement Agent may, in its discretion, deduct from the purchase price of the Securities to be remitted to the Company at the Closing the amount of its fees and expenses as Placement Agent and the fees and expenses of SASM&F.

(c) Simultaneously with the execution of this Agreement, the Company is executing other purchase agreements (the "Other Purchase Agreements") identical to this Agreement with the other purchasers listed on the signature pages thereof (the "Other Purchasers"), pursuant to which the Company shall issue and sell Securities to such Other Purchasers in the respective aggregate amounts set forth below their names on the signature pages thereof for the respective purchase prices set forth thereon. The number of Securities being sold hereby and to the Other Purchasers shall aggregate the amounts indicated as authorized to be sold in Section 2.1. The sale of Securities to you and the Other Purchasers are to be separate sales, and this Agreement and the Other Purchase Agreements are to be separate agreements; provided, that references to this "Agreement" shall include the Other Purchase Agreements where the context so permits, together with all modifications hereof and thereof.

2.3 Purchaser's Representations

Each Purchaser severally represents and warrants to each other party hereto as follows:

(a) Such Purchaser has full power and authority to execute and deliver this Agreement and the Registration Rights Agreements and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by such Purchaser and, assuming this Agreement constitutes a valid and binding agreement of each other party hereto, this Agreement constitutes a valid and binding agreement of such Purchaser, enforceable against such Purchaser in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights and remedies generally and subject, as to enforceability, as to general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law).

(b) Such Purchaser is acquiring the Securities being purchased by it hereunder for its own account (or for accounts over which such Purchaser exercises investment control), and not with a view to the distribution or reselling said Securities or any part thereof in violation of the Securities Act, any other securities laws of the United States or any applicable State securities laws, without prejudice, however, to such Purchaser's right at all times to sell or otherwise dispose of all or any part of said Securities pursuant to an effective registration statement under the Securities Act and applicable State securities laws, or under an exemption from such registration available under the Securities Act and other applicable State securities laws.

(c) Upon original issuance thereof, and until such time as no longer required by law, each certificate evidencing the Securities (and all securities issued in exchange therefor or substitution thereof) shall bear a legend in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 OR RULE 144A UNDER SUCH ACT, OR
(iii) ANY OTHER EXEMPTION FROM REGISTRATION UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES.

If such Purchaser desires to offer, sell or otherwise transfer, pledge or hypothecate all or any part of the Securities bearing such legend (other than pursuant to an effective registration statement under the Securities Act or pursuant to Rule 144A), such Purchaser shall deliver to the Company a written opinion of counsel (which may be an employee of such Purchaser), reasonably satisfactory in form and substance to the Company, that an exemption from the registration requirements of the Securities Act is available.

(d) Either (i) no part of the funds to be used to purchase the Securities to be purchased by such Purchaser constitutes assets allocated to any qualified trust that contains the assets of any employee benefit plan with respect to which the Company is a party in interest or disqualified person or the use of such assets would not constitute a non-exempt prohibited transaction under ERISA or the Code or (ii) such Purchaser is Continental Bank, National Association acting as trustee for the Terex Corporation Master Retirement Plan Trust and the purchase of the Securities to be purchased by you is otherwise permitted under all Applicable Law, including (without limitation) ERISA and the Code. The representation made in the preceding sentence is made solely in reliance upon such Purchaser's review of the list (a copy of which is set forth as Schedule 2.3 hereto), furnished to the Purchasers by the Company, which sets forth the employee benefit plans with respect to which the Company is a party in interest or a disqualified person. The terms "employee benefit plan," "separate account," and "party in interest" shall have the meanings assigned to such terms in Section 3 of ERISA, the term "disqualified person" shall have the meaning assigned to such term in section 4975 of the Code, and the term "qualified trust" shall mean any trust qualified under section 401(a) of the Code in which is held the assets of any employee benefit plan.

(e) Such Purchaser has received a copy of the Placement Memorandum, is an "accredited investor" within the meaning of Rule 501 under the Securities Act, and has had an opportunity to investigate the business and financial condition of the Company and each of the Subsidiaries, and to obtain such information as such Purchaser requires from each of such companies.

2.4 Failure to Deliver

(a) If the Closing fails to occur on or before December 31, 1993, each Purchaser shall, at its election and notwithstanding anything to the contrary in this Agreement, be relieved of all further obligations under this Agreement without thereby waiving any rights such Purchaser may have by reason of such nonfulfillment or failure. Nothing in this Section 2.4 shall operate to relieve the Company from any of its obligations hereunder.

(b) If the Closing shall not actually occur on any date on which the Closing is scheduled to occur (the "Scheduled Closing Date"), and the Company shall have failed to notify Jefferies & Company, Inc., Attention: Andrew Whittaker (Telephone: (310) 575-5200) prior to 10:30 A.M., New York City time, on such Scheduled Closing Date that such Closing has been postponed, the Company shall pay to each Purchaser by wire transfer of immediately available funds to the bank account designated by such Purchaser (as compensation for such Purchaser's loss of funds and administrative costs) an amount equal to interest on the aggregate purchase price for the Securities to have been purchased by such Purchaser on such Scheduled Closing Date, at the effective rate of interest equal to 13% per annum, for each day from and including such Scheduled Closing Date to and including the earlier of the date on which such Closing actually occurs or the date on which the amount to be paid by such Purchaser as the purchase price of such Securities is available to such Purchaser for reinvestment, less interest actually earned on such funds during such period, but in any case not less than one day's interest.

2.5 Expenses

Whether or not the Closing occurs, the Documents are executed or the other transactions contemplated hereby or thereby are consummated, the Company shall pay (or, upon request, promptly reimburse the Purchasers for) all reasonable expenses relating to this Agreement, and the other Documents, including, but not limited to:

(a) the costs of preparing, reproducing and filing this Agreement, the other Documents and the Securities;

(b) the reasonable out-of-pocket expenses incurred by each Purchaser and its agents in connection with the negotiation and execution of this Agreement, the other Documents and the Securities and the transactions contemplated hereby and thereby (including, without limitation, the reasonable fees and expenses of SASM&F and all such other counsel they may employ on the Purchasers' behalf);

(c) the cost of delivering to each Purchaser's home office or the office of such Purchaser's designee the Securities purchased by such Purchaser at the Closing upon the issuance thereof;

(d) all expenses relating to any amendment, or modification of, or any waiver, or consent or preservation of rights under, this Agreement, the other Documents or the Securities;

(e) all other expenses, including reasonable attorneys' fees, incurred by the Company in connection with the transactions contemplated by this Agreement and the other Documents; and

(f) all reasonable fees and expenses (including reasonable fees and expenses of counsel) in connection with any registration or qualification of the Securities for offer and sale hereunder under the securities or "blue sky" laws of any jurisdiction requiring such registration or qualification or in connection with obtaining any exemptions from such requirements.

Notwithstanding the foregoing to the contrary, the Company shall not be required to pay for more than one legal counsel to the Purchasers unless the Company shall have approved the retention of such counsel.

2.6 Indemnification and Contribution

(a) The Company shall, without limitation as to time, indemnify and hold harmless each Purchaser and its Affiliates, and the employees, officers, directors and agents of each Purchaser and its Affiliates (collectively, the "Indemnified Parties"), to the fullest extent lawful, from and against all losses, claims, liabilities, damages, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys' fees) and expenses (including expenses of investigation) (collectively, "Losses") arising out of or in connection with this Agreement or the other Documents or the transactions contemplated hereby or thereby, whether or not the transactions contemplated by this Agreement or the other Documents are consummated and whether or not any Indemnified Party is a formal party to any Proceeding; provided, however, that the Company shall not be liable to any Indemnified Party for any Losses if it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal) that such Losses arose solely from such Indemnified Party's gross negligence or willful misconduct that (i) is independent of any wrongful act by the Company or any of its Subsidiaries or any of their respective representatives and (ii) was not taken in reliance upon any of the representations, warranties, covenants or promises of the Company herein or in the other Documents. The Company agrees promptly to reimburse each Indemnified Party for all such Losses as they are incurred by such Indemnified Party.

(b) Each Indemnified Party shall give prompt written notice to the Company of any claim or of the commencement of any Proceeding with respect to which such Indemnified Party seeks indemnification or contribution pursuant hereto; provided, however, that the failure so to notify the Company shall not relieve the Company from any obligation or liability except to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal) that the Company has been prejudiced materially by such failure. The Company shall have the right, exercisable by giving written notice to an Indemnified Party within 20 Business Days after the receipt of written notice from such Indemnified Party of such Proceeding, to assume, at the Company's expense, the defense of any such Proceeding; provided, however, that an Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless: (1) the Company agrees to pay such fees and expenses; or (2) the Company fails promptly to assume the defense of such Proceeding or fails to employ counsel reasonably satisfactory to such Indemnified Party; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Company or an Affiliate of the Company, and such Indemnified Party shall have been advised by counsel that there may be one or more material defenses available to such Indemnified Party that are in conflict with those available to the Company or such Affiliate (in which case, if such Indemnified Party notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, the Company shall not have the right to assume the defense thereof, it being understood, however, that the Company shall not, in connection with any one such Proceeding or separate but substantially similar or related Proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for such Indemnified Party). Whether or not such defense is assumed by the Company, such Indemnified Party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld).

(c) The Company shall not consent to entry of any judgment, enter into any settlement or otherwise seek to terminate any Proceeding in which any Indemnified Party is or could be a party and as to which indemnification or contribution could be sought by such Indemnified Party under this Section 2.6, unless such judgment, settlement or other termination includes as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release, in form and substance satisfactory to the Indemnified Party, from all liability in respect of such Proceeding.

(d) If the indemnification provided for in Section 2.6(a) is unavailable to any Indemnified Party in respect of any Losses referred to therein or is insufficient to hold such Indemnified Person harmless, then the Company, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the Company, on the one hand, and such Indemnified Party, on the other hand, in connection with the actions, statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Company, on the one hand, and any Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been taken by, or relates to information supplied by, the Company or such Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent any such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include any legal or other fees or expenses incurred by such party in connection with any Proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 2.6(d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above. No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

(e) The obligations of the Company under this Section 2.6 shall be in addition to any liability the Company may otherwise have hereunder, under any of the other Documents or otherwise. The obligations of the Company to each Indemnified Party hereunder shall be separate obligations, and the liability of the Company to any Indemnified Party hereunder shall not be extinguished solely because any other Indemnified Party is not entitled to indemnity hereunder. The obligations of the Company under this Section 2.6 shall survive the payment or prepayment of the Securities, any transfer of the Securities and any termination of this Agreement or the other Documents.

2.7 Further Actions

During the period from the date hereof to the Closing Date, the Company shall use its best efforts and take all action necessary or appropriate to cause its representations and warranties contained in Section 5 hereof to be true as of the Closing Date, after giving effect to the transactions contemplated by this Agreement and the Placement Memorandum, as if made on and as of such date.

SECTION 3. CLOSING CONDITIONS

3.1 Conditions to Purchaser Obligations

Each Purchaser's obligation to purchase and pay for the Securities to be delivered to it at the Closing shall be subject to the satisfaction of the following conditions on or before the Closing Date, unless waived in writing by such Purchaser or its agent:

3.1.1. Opinions of Counsel

Such Purchaser shall have received the following opinions, dated the Closing Date and addressed to the Purchasers:

(a) a favorable opinion of Marvin Rosenberg, Esq., General Counsel of the Company, substantially in the form set forth as Exhibit 5;

(b) a favorable opinion of Robinson Silverman Pearce Aronsohn & Berman, special counsel to the Company, substantially in the form set forth as Exhibit 6; and

(c) such other opinions of counsel covering matters incidental to the transactions contemplated by this Agreement and the other Documents as such Purchaser may reasonably request.

3.1.2. Officers' Certificates

Such Purchaser shall have received (a) a certificate or certificates, dated the Closing Date and signed by the Chairman of the Board or the President and the Acting Chief Financial Officer of the Company certifying (i) that the conditions set forth in Sections 3.1.3 through 3.1.9 hereof have been satisfied on and as of such date and (ii) as to such other matters as such Purchaser may reasonably request and (b) a certificate or certificates, dated the Closing Date and signed by the Secretary or an Assistant Secretary of the Company, certifying such corporate matters as such Purchaser may reasonably request.

3.1.3. Completion of Other Transactions

(a) Prior to the sale to such Purchaser of the Securities to be purchased by such Purchaser at the Closing, the Company shall have duly filed the Certificate of Designation with the Secretary of State of the State of Delaware.

(b) The Company shall have simultaneously issued and sold and received payment for the Securities to be purchased by all of the Other Purchasers pursuant to the Other Purchase Agreements and the number of Securities purchased shall aggregate 1.2 million Shares and not less than 1.2 million Warrants.

(c) Such Purchaser (or the Placement Agent, on behalf of such Purchaser) shall have received certificates representing the Securities to be purchased by such Purchaser at the Closing as required pursuant to Section 2.2(b) hereof.

3.1.4. Representations and Warranties True

The representations and warranties of the Company contained in
Section 5 hereof and in each of the other Documents shall be true and correct in all material respects (except that any representation or warranty that already contains a materiality exception therein, in each such case shall be true and correct as written) at and as of the Closing Date, after giving effect to the transactions contemplated by this Agreement and the other Documents, as if made on and as of such date.

3.1.5. Compliance with Agreements

The Company shall have performed and complied in all material respects with all agreements, covenants and conditions contained herein and in the other Documents that are required to be performed or complied with by the Company on or before the Closing Date.

3.1.6. The Warrant Agreement and Registration Rights Agreements

(a) The Company and a bank or trust company with a capital surplus of not less than $50,000,000, and otherwise satisfactory to the Purchasers, as Warrant Agent (the "Warrant Agent"), shall have duly entered into the Warrant Agreement, and such Purchaser shall have received counterparts, conformed as executed, of the Warrant Agreement.

(b) The Company and the Other Purchasers shall have entered into the Registration Rights Agreements, and such Purchaser shall have received an original, duly executed by the Company, of the Registration Rights Agreements.

3.1.7. Consents and Permits

Each of the Company and its Subsidiaries shall have received all consents, permits and other authorizations, and made all such filings and declarations, as may be required pursuant to any Applicable Law in connection with the transactions contemplated by this Agreement and the other Documents, including without limitation the issuance and sale of the Securities to the Purchasers, and pursuant to all other agreements, orders and decrees to which any of them is a party or to which any of them is subject, in connection with the transactions contemplated by this Agreement and the other Documents.

3.1.8. Purchase Permitted by Applicable Laws; Legal Investment

(a) Such Purchaser's purchase of and payment for the Securities to be purchased by such Purchaser (a) shall not be prohibited by any applicable law or governmental regulation, release, interpretation or opinion (including, without limitation, Regulations G, T, U and X of the Board of Governors of the Federal Reserve System), (b) shall not subject such Purchaser to any material penalty or other onerous condition under or pursuant to any Applicable Law, and (c) shall be permitted by all Applicable Laws. The Company shall have delivered to such Purchaser factual certificates or other evidence as such Purchaser shall reasonably request, in form and substance reasonably satisfactory to such Purchaser, to enable such Purchaser to establish compliance with this condition.

(b) The Placement Agent shall have delivered to such Purchaser and to SASM&F (i) a letter addressed to such Purchaser to the effect that the Placement Agent has arranged for the sale of the Securities pursuant to this Agreement and the Other Purchase Agreements solely as a part of the furnishing of investment banking services to the Company, and (ii) a copy of a letter addressed to the Company, in form and substance reasonably satisfactory to such Purchaser and the Company, confirming certain matters set forth in Section 5.18(b) of this Agreement.

3.1.9. Placement Memorandum

The Placement Memorandum shall not have been supplemented or amended subsequent to December 14, 1993.

3.1.10. Proceedings Satisfactory

All proceedings taken in connection with the sale of the Securities, the matters contemplated by Section 3.1.1 through 3.1.8 hereof, and all documents relating thereto, shall be reasonably satisfactory in form and substance to such Purchaser.
Such Purchaser and SASM&F shall have received copies of such documents as it and SASM&F may reasonably request in connection with the Closing, all in form and substance reasonably satisfactory to such Purchaser and SASM&F. Each Document shall be reasonably satisfactory in form and substance to such Purchaser and SASM&F.

3.2 Conditions to the Obligations of the Company

The obligations of the Company to sell the Securities to be delivered to the Purchasers at the Closing shall be subject to the satisfaction of the following conditions:

3.2.1. Sale of Securities

There shall have been delivered to the Company payment in respect of the purchase of the Securities.

3.2.2. Purchasers' Representations and Warranties

The representations and warranties of each Purchaser contained in Section 2.3 hereof shall be true and correct in all material respects at and as of the Closing Date, after giving effect to the transactions contemplated by this Agreement and the other Documents, as if made at and as of such date.

3.2.3. No Material Judgment or Order

There shall not be on the Closing Date any judgment or order of a court of competent jurisdiction or any ruling of any agency of the Federal, state or local government that, in the reasonable judgment of the Company, would prohibit the sale or issuance of the Securities hereunder or subject the Company to any material penalty if the Securities were to be issued and sold hereunder.

3.2.4. The Sale by the Company Permitted by Applicable Laws

The sale by the Company and the Purchasers' payment for the Securities (a) shall not be prohibited by any Applicable Law (including, without limitation, Regulation G, T, U or X of the Board of Governors of the Federal Reserve System), (b) shall not subject the Company to any material penalty under or pursuant to any Applicable Law, and (c) shall be permitted by all Applicable Laws.

SECTION 4. PURCHASER'S SPECIAL RIGHTS

The provisions of this Section 4 shall apply, notwithstanding anything to the contrary in this Agreement or the other Documents, to Privately Outstanding Securities only; provided that all of the obligations of the Company set forth in this
Section 4 that are outstanding with respect to any Security at the time such Security ceases to be a Privately Outstanding Security shall survive until such time as such obligations with respect to such Security shall be satisfied in full.

4.1 Delivery Expenses

If a holder of a Privately Outstanding Security surrenders such security to the Company or the Warrant Agent for any reason, the Company will pay the cost of delivering to and from such holder's home office (or to and from the office of such holder's designee) and the office of the Company or the Warrant Agent, as the case may be, the surrendered security and each security issued in substitution, replacement or exchange therefor or upon conversion thereof.

4.2 Issue Taxes

The Company shall pay all stamp, transfer and other similar taxes and governmental fees in connection with (a) the issuance, sale, delivery or transfer by the Company to the Purchasers of the Privately Outstanding Securities, (b) the execution and delivery of the Documents and (c) any modification of the Privately Outstanding Securities or the Documents. The Company will hold each holder of Privately Outstanding Securities harmless, without limitation as to time, against any and all liabilities with respect to all such taxes and fees. Notwithstanding the foregoing, except as set forth in the Securities, the Company will not be responsible for any transfer taxes in connection with the transfer of the Securities by the Purchaser (other than to the Company). The obligations of the Company under this Section 4.2 shall survive the payment or prepayment of the Securities, at maturity, upon redemption or otherwise, any transfer of the Securities by the Purchaser, and the termination of this Agreement.

4.3 Direct Payment

The Company shall pay or cause to be paid all amounts payable with respect to any Privately Outstanding Security (without any presentment of such Privately Outstanding Security and without any notation of such payment being made thereon) by crediting such amount, before 12:00 Noon, New York City time, on the date such amount is payable, by Federal funds bank wire transfer, to each holder of Privately Outstanding Securities or its nominee's, as the case may be, account in any bank in the United States of America as may be designated by such holder or such nominee not less than two Business Days prior to such payment. Each Purchaser's initial bank account for this purpose is set forth on its signature page hereof. Each holder of Privately Outstanding Securities is solely responsible for advising the Company of any changes in its designated bank account and the Company shall have no responsibility for delays in transfers because of any failure to advise the Company of a change.

4.4 Financial Statements

(a) The Company will deliver to each holder of record of Privately Outstanding Securities within 90 days after the end of each fiscal year of the Company and within 45 days after the end of each of the first three quarters of each fiscal year, the consolidated financial statements of the Company, including notes thereto (and, (i) with respect to annual statements, an auditors' report by an accounting firm of established national reputation and (ii) with respect to all other statements, a certification by the chief