Grove Holdings LLC, et al. – ‘424B3’ on 10/21/98

As of:  Wednesday, 10/21/98   ·   Accession #:  1047469-98-37789   ·   File #s:  333-57609, -01

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Prospectus   —   Rule 424(b)(3)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus                                           162    833K 

Document Table of Contents

424B3
1st Page of 162
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
                                             As filed Pursuant to Rule 424(b)(3)
                                                      Registration No. 333-57609
PROSPECTUS                                                                      
$88,000,000 

GROVE HOLDINGS LLC
GROVE HOLDINGS CAPITAL, INC.

OFFER TO EXCHANGE THEIR 
11 5/8% SENIOR DISCOUNT DEBENTURES DUE 2009, WHICH HAVE BEEN REGISTERED 
UNDER THE SECURITIES ACT, FOR ANY AND ALL OF THEIR OUTSTANDING
11 5/8% SENIOR DISCOUNT DEBENTURES DUE 2009 

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON NOVEMBER 19, 1998, UNLESS EXTENDED 

  Grove Holdings LLC, a Delaware limited liability company ("Holdings"), and
Grove Holdings Capital, Inc., a Delaware corporation and a wholly owned         
subsidiary of Holdings ("Grove Holdings Capital" and, together with Holdings,   
the "Issuers"), hereby offer, upon the terms and subject to the conditions set  
forth in this Prospectus and the accompanying letter of transmittal (the "Letter
of Transmittal," and together with this Prospectus, the "Exchange Offer") up to 
$88,000,000 aggregate principal amount at maturity of their 11 5/8% Senior      
Discount Debentures Due 2009 (the "Exchange Debentures") for a like principal   
amount of their outstanding 11 5/8% Senior Discount Debentures Due 2009 that    
were issued and sold in reliance upon an exemption from registration under the  
Securities Act of 1933, as amended (the "Securities Act") (the "Senior Discount 
Debentures" and, together with the Exchange Debentures, the "Debentures").      

The terms of the Exchange Debentures will be the same in all material   
respects (including principal amount, interest rate, maturity and ranking) as   
the terms of the Senior Discount Debentures for which they may be exchanged     
pursuant to the Exchange Offer, except that the Exchange Debentures have been   
registered under the Securities Act, and therefore will not be subject to       
certain restrictions on transfer applicable to the Senior Discount Debentures   
and will not be entitled to registration rights except under certain limited    
circumstances. The Exchange Debentures will be issued under the Indenture (as   
defined on page 3) governing the Senior Discount Debentures. The Senior Discount
Debentures are, and the Exchange Debentures will be, general unsecured          
obligations of the Issuers, will rank equal in right of payment to all existing 
and future senior indebtedness of the Issuers and will be senior in right of    
payment to all subordinated indebtedness of the Issuers. As indebtedness of the 
Issuers, however, the Debentures will be effectively subordinated to all        
liabilities of Grove Worldwide LLC (the "Company" or "Grove") and its other     
subsidiaries. As of August 29, 1998, the Debentures were subordinated to        
approximately $685.9 million of liabilities of Grove and its other subsidiaries.
As of August 29, 1998, Holdings had no senior indebtedness (other than the      
Debentures) and no subordinated indebtedness outstanding.                       

   The Senior Discount Debentures were originally issued and sold on April 29,
1998 in a transaction not registered under the Securities Act, in reliance upon 
the exemption provided in Section 4(2) of the Securities Act and Rule 144A of   
the Securities Act (the "Initial Offering"). Accordingly, the Senior Discount   
Debentures may not be reoffered, resold or otherwise pledged, hypothecated or   
transferred in                                                                  

                                                        (CONTINUED ON NEXT PAGE)
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 21 FOR A DISCUSSION OF CERTAIN RISKS       
ASSOCIATED WITH AN INVESTMENT IN THE EXCHANGE DEBENTURES.                       
--------------------- 

424B3
2nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 2nd
THE SECURITIES OFFERED HEREBY 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 OCTOBER 20, 1998.

424B3
3rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 3rd
(CONTINUED FROM COVER)                                                          

the United States unless so registered or unless an applicable exemption from   
the registration requirements of the Securities Act is available. Based upon    
interpretations provided to third parties by the Staff (the "Staff") of the     
Securities and Exchange Commission (the "Commission"), the Issuers believe that 
the Exchange Debentures issued pursuant to the Exchange Offer in exchange for   
the Senior Discount Debentures may be offered for resale, resold and otherwise  
transferred by holders thereof (other than any holder which is (i) an           
"affiliate" of the Company within the meaning of the Securities Act (an         
"Affiliate") or (ii) a broker-dealer that purchases Debentures from the Issuers 
to resell pursuant to Rule 144A or any other available exemption) without       
compliance with the registration and prospectus delivery provisions of the      
Securities Act, provided that such Exchange Debentures are acquired in the      
ordinary course of such holder's business and such holder has no arrangement or 
understanding with any person to participate in the distribution of such        
Exchange Debentures and neither such holder nor any other such person is        
engaging in or intends to engage in a distribution of such Exchange Debentures. 
Each Affiliate that receives the Exchange Debentures must comply with the       
registration and prospectus delivery requirements of the Securities Act to the  
extent applicable. In addition, each broker-dealer that receives Exchange       
Debentures for its own account pursuant to the Exchange Offer may be deemed to  
be an "underwriter" within the meaning of the Securities Act, and must          
acknowledge that it will deliver a prospectus meeting the requirements of the   
Securities Act in connection with any resale of such Exchange Debentures. The   
Letter of Transmittal states that by so acknowledging and by delivering a       
prospectus, a broker-dealer will not be deemed to admit that it is an           
"underwriter" within the meaning of the Securities Act. This Prospectus, as it  
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Debentures received in exchange for      
Senior Discount Debentures where such Senior Discount Debentures were acquired  
by such broker-dealer as a result of market-making activities or other trading  
activities. The Issuers have agreed that, for a period of one year after the    
Expiration Date (as defined below), they will make this Prospectus available to 
any broker-dealer for use in connection with any such resale. See "Plan of      
Distribution."                                                                  

The Exchange Debentures constitute new issues of securities with no     
established public trading market. The Issuers do not intend to apply for       
listing of the Exchange Debentures on any national securities exchange or for   
their quotation through the Nasdaq Stock Market, Inc. Therefore, there can be no
assurance as to the development or liquidity of any trading market for the      
Exchange Debentures. Any Senior Discount Debentures not tendered and accepted in
the Exchange Offer will remain outstanding. To the extent that Senior Discount  
Debentures are tendered and accepted in the Exchange Offer, a holder's ability  
to sell untendered Senior Discount Debentures could be adversely affected.      
Following consummation of the Exchange Offer, the holders of Senior Discount    
Debentures will continue to be subject to the existing restrictions on transfer 
thereof and Holdings will have no further obligation to register such Senior    
Discount Debentures under the Securities Act except under certain limited       
circumstances. See "Description of Debentures--Registration Rights; Liquidated  
Damages."                                                                       

The Senior Discount Debentures currently trade in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") market. Following     
commencement of the Exchange Offer but prior to its consummation, the Senior    
Discount Debentures may continue to be traded in the PORTAL market. Following   
consummation of the Exchange Offer, the Exchange Debentures will not be eligible
for PORTAL trading.                                                             

  The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Senior Discount Debentures being tendered or accepted for exchange.   
The Exchange Offer will expire at 5:00 p.m., New York City time, on November 19,
1998, unless extended (the "Expiration Date"). The date of acceptance for       
exchange of the Senior Discount Debentures ( the "Exchange Date") will be the   
Expiration Date, upon surrender of the Senior Discount Debentures tendered.     
Senior Discount Debentures tendered pursuant to the Exchange Offer may be       
withdrawn at any time prior to the Expiration Date.                             

 The Issuers will not receive any proceeds from this Exchange Offer and no
underwriter is being utilized in connection with this Exchange Offer.           

2 

424B3
4th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 4th
AVAILABLE INFORMATION 

Upon the effectiveness of this Registration Statement, the Issuers will 
become subject to the periodic reporting and to the informational requirements  
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in 
accordance therewith, Holdings will file reports, proxy statements and other    
information with the Commission. Reports, proxy and information statements and  
other information filed by Holdings may be inspected and copied at the public   
reference facilities maintained by the Commission in Room 1024, 450 Fifth       
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices  
located at Seven World Trade Center, 13th Floor, New York, New York 10048 and   
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.  
Copies of such materials may be obtained upon written request from the Public   
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 
20549, at prescribed rates. In addition, the Commission maintains a site on the 
World Wide Web at http://www.sec.gov that contains reports, proxy and           
information statements and other information regarding registrants that file    
electronically with the Commission.                                             

No separate financial statements of Grove Holdings Capital are included 
herein. Holdings believes that providing separate financial statements and other
disclosures concerning Grove Holdings Capital would not be material to holders  
of the Exchange Debentures. As of June 27, 1998 (the latest date for which      
financial statements are included in this Prospectus), Grove Holdings Capital   
had no assets, liabilities or operations.                                       

Holdings is required by the terms of the Indenture dated as of April 29,
1998, by and among the Issuers and the United States Trust Company of New York  
(the "Trustee"), under which the Senior Discount Debentures were issued and     
under which the Exchange Debentures are to be issued (the "Indenture"), to      
furnish to holders of the Debentures (i) all quarterly and annual financial     
information that would be required to be contained in a filing with the         
Commission on Forms 10-Q and 10-K if Holdings were required to file such Forms, 
including a "Management's Discussion and Analysis of Financial Condition and    
Results of Operations" that describes the financial condition and results of    
operations of Holdings and its consolidated subsidiaries and, with respect to   
the annual information only, a report thereon by the Holdings' certified        
independent accountants and (ii) all current reports that would be required to  
be filed with the Commission on Form 8-K if Holdings were required to file such 
reports, in each case within the time periods specified in the Commission's     
rules and regulations. In addition, following the consummation of the Exchange  
Offer, whether or not required by the rules and regulations of the Commission,  
the Company will file a copy of all such information and reports with the       
Commission for public availability within the time periods specified in the     
Commission's rules and regulations (unless the Commission will not accept such a
filing) and make such information available to securities analysts and          
prospective investors upon request. In addition, (i) at all times the Commission
does not accept the filings provided for in the preceding sentence or (ii) such 
filings provided for in the preceding sentence do not contain the information   
required to be delivered upon request pursuant to Rule 144A(d)(4) under the     
Securities Act, then, in each case, the Company has agreed that, for so long as 
any Debentures remain outstanding, it will furnish to the holders of the        
Debentures and to securities analysts and prospective investors, upon their     
request, the information required to be delivered pursuant to Rule 144A(d)(4)   
under the Securities Act.                                                       

  This Prospectus constitutes a part of a registration statement on Form S-4
(the "Registration Statement") filed by the Issuers with the Commission under   
the Securities Act. This Prospectus does not contain all the information set    
forth in the Registration Statement, certain parts of which are omitted in      
accordance with the rules and regulations of the Commission, and reference is   
hereby made to the Registration Statement and to the exhibits relating thereto  
for further information with respect to the Issuers and the Exchange Debentures.
Any statements contained herein concerning the provisions of any document are   
not necessarily complete, and, in each instance, reference is made to the copy  
of such document filed as an exhibit to the Registration Statement or otherwise 
filed with the Commission. Each such statement is qualified in its entirety by  
such reference.                                                                 

3 

424B3
5th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 5th
SPECIAL NOTE REGARDING FORWARD--LOOKING STATEMENTS

Certain statements under "Prospectus Summary," "Risk Factors," "Selected
Historical Financial Data," "Management's Discussion and Analysis of Financial  
Condition and Results of Operations," "Business" and elsewhere in this          
Prospectus constitute "forward-looking statements." Any statements that express,
or involve discussions as to, expectations, beliefs, plans, objectives,         
assumptions or future events or performance (often, but not always, through the 
use of words or phrases such as "will likely result," "are expected to," "will  
continue," "anticipates," "expects," "estimates," "intends," "plans,"           
"projects," and "outlook") are not historical facts and may be forward-looking. 
Such forward-looking statements involve known and unknown risks, uncertainties  
and other factors that may cause the actual results, levels of activity, cost   
savings, performance or achievements of Holdings, or industry results, to be    
materially different from any future results, levels of activity, cost savings, 
performance or achievements expressed or implied by such forward-looking        
statements, and accordingly, such statements should be read in conjunction with 
and are qualified in their entirety by reference to, such risks, uncertainties  
and other factors, which are discussed throughout this Prospectus. Such factors 
include, among others, the following: (i) substantial leverage and ability to   
service debt; (ii) changing market trends in the mobile hydraulic crane, aerial 
work platform and truck-mounted crane industries; (iii) general economic and    
business conditions including a prolonged or substantial recession; (iv) the    
ability of the Company to implement its business strategy and maintain and      
enhance its competitive strengths; (v) the ability of the Company to implement  
the Operations Improvement Program (as defined); (vi) the ability of Holdings to
obtain financing for general corporate purposes; (vii) competition; (viii)      
availability of key personnel; (ix) industry overcapacity; and (x) changes in,  
or the failure to comply with, government regulations. See "Risk Factors." As a 
result of the foregoing and other factors, no assurance can be given as to      
future results, levels of activity and achievements, and neither Holdings nor   
any other person assumes responsibility for the accuracy and completeness of    
these forward-looking statements. Any forward-looking statements contained      
herein speak solely as of the date on which such statements are made, and       
Holdings undertakes no obligation to update any forward-looking statements to   
reflect events or circumstances after the date on which such statements were    
made or to reflect the occurrence of unanticipated events.                      

4 

424B3
6th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 6th
PROSPECTUS SUMMARY

    THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND COMBINED FINANCIAL          
STATEMENTS OF THE GROVE COMPANIES, THE PREDECESSOR TO HOLDINGS AND THE CONDENSED
FINANCIAL STATEMENTS OF HOLDINGS, INCLUDING THE NOTES THERETO (THE "FINANCIAL   
STATEMENTS"), INCLUDED ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE NOTED, THE
"COMPANY" OR "GROVE" REFERS TO GROVE WORLDWIDE LLC AND ITS SUBSIDIARIES AND     
INCLUDES THE ACQUIRED BUSINESS (AS DEFINED). THE COMPANY'S FISCAL YEAR ENDS ON  
THE SATURDAY CLOSEST TO THE LAST DAY OF SEPTEMBER. REFERENCES TO FISCAL 1993,   
FISCAL 1994, FISCAL 1995, FISCAL 1996 AND FISCAL 1997 REFER TO THE FISCAL YEARS 
ENDED OCTOBER 2, 1993, OCTOBER 1, 1994, SEPTEMBER 30, 1995, SEPTEMBER 28, 1996  
AND SEPTEMBER 27, 1997, RESPECTIVELY. REFERENCES TO HISTORICAL FINANCIAL        
INFORMATION ARE TO THE HISTORICAL COMBINED FINANCIAL RESULTS OF THE ACQUIRED    
BUSINESS. SEE "THE TRANSACTIONS--THE ACQUISITION." THIS PROSPECTUS CONTAINS     
FORWARD-LOOKING STATEMENTS THAT INHERENTLY INVOLVE RISKS AND UNCERTAINTIES. THE 
COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE
FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS, INCLUDING THOSE SET  
FORTH UNDER "THE COMPANY--BUSINESS STRATEGY" AND "RISK FACTORS." CERTAIN MARKET 
DATA USED IN THIS PROSPECTUS REFLECT MANAGEMENT ESTIMATES. PROSPECTIVE INVESTORS
ARE URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY.                              

HOLDINGS

Membership interests of the Company and capital stock of Grove Holdings 
Capital account for all of Holdings' assets. Holdings conducts all of its       
business through the Company.                                                   

THE COMPANY 

Grove Worldwide is a leading international designer, manufacturer and   
marketer of a comprehensive line of mobile hydraulic cranes, aerial work        
platforms and truck-mounted cranes. In North America, Grove Crane, the Company's
largest operating division, has a number one market position and a 43% market   
share. The Company's products are used in a wide variety of applications by     
commercial and residential building contractors, as well as by industrial,      
municipal and military end-users. The Company's products are marketed to        
independent equipment rental companies and directly to end-users under three    
widely recognized brand names--GROVE CRANE, GROVE MANLIFT and NATIONAL CRANE.   
The Company believes it has achieved a leading position in each of its principal
markets due to its: (i) strong brand name and reputation for quality products;  
(ii) superior customer service; (iii) established network of distributors; (iv) 
broad product line; and (v) commitment to superior engineering design and       
product innovation.                                                             

 The Company's products are sold in over 50 countries primarily through an
established, global network of approximately 240 independent distributors. The  
Company's major markets are North America (67% of fiscal 1997 new equipment     
sales), Europe (19% of fiscal 1997 new equipment sales), Africa and the Middle  
East (4% of fiscal 1997 new equipment sales), Asia (7% of fiscal 1997 new       
equipment sales) and Latin America (3% of fiscal 1997 new equipment sales). The 
Company markets its products through three operating divisions:                 

- GROVE CRANE (approximately 69% of fiscal 1997 net sales) designs and          
manufactures over 40 models of mobile hydraulic cranes. The Company's mobile
hydraulic cranes, which are used primarily in industrial, commercial and    
  public works construction, are capable of reaching maximum heights of 372 feet
  and lifting up to 300 tons. From fiscal 1993 to fiscal 1997, Grove Crane's net
sales (including acquisitions) increased from $290 million to $587 million, 
representing a compound annual growth rate ("CAGR") of 19.4%.               

- GROVE MANLIFT (approximately 23% of fiscal 1997 net sales) designs and        
manufactures over 60 models of aerial work platforms. The Company's aerial  
work platforms, which are used primarily in industrial, commercial and      
construction applications, are capable of lifting people to maximum working 
  heights ranging from 19 to 131 feet. Aerial work platforms elevate workers and
their materials more safely,                                                

5 

424B3
7th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 7th
quickly and easily than alternative methods such as scaffolding and ladders.
From fiscal 1993 to fiscal 1997, Grove Manlift's net sales (including       
 acquisitions) increased from $57 million to $199 million, representing a CAGR
of 36.8%.                                                                   

- NATIONAL CRANE (approximately 8% of fiscal 1997 net sales) designs and        
manufactures over 14 models of telescoping and 14 models of articulating    
  truck-mounted cranes. The Company's telescoping and articulating cranes, which
are used primarily in industrial, commercial, public works and construction 
 applications, are capable of reaching maximum heights of 166 feet and lifting
up to 36 tons. Telescoping and articulating cranes are mounted on a standard
  truck chassis or on a pedestal at a fixed location. From fiscal 1993 to fiscal
1997, National Crane's net sales increased from $40 million to $71 million, 
representing a CAGR of 15.4%.                                               

COMPETITIVE STRENGTHS                                                           

The Company believes that it benefits from the following competitive    
strengths:                                                                      

- LEADING MARKET POSITIONS. The Company believes that its three operating       
divisions have established a leading position in each of their principal    
markets.                                                                    

                                                        [Enlarge/Download Table]

DIVISION              PRODUCTS                       PRINCIPAL MARKETS        MARKET POSITION(1)       MARKET SHARE(1)  
--------------------  --------------------------  ------------------------  -----------------------  -------------------
                                                                                                                        
Grove Crane           Mobile Hydraulic Cranes     North America                            1                    43%(2)  
                                                                                           2                    14%     
                                                  Europe (excluding                                                     
                                                  Russia)                                                               

Grove Manlift         Aerial Work Platforms       North America                            3                    10%     
                                                                                           3                    16%     
                                                  Europe (excluding                                                     
                                                  Russia)                                                               

National Crane        Truck-Mounted Cranes:                                                                             
                                                                                           1                    43%     
                      Telescoping                 North America                                                         
                                                                                           4                    13%(3)  
                      Articulating                North America                                                         

- STRONG BRAND NAME AND REPUTATION FOR QUALITY PRODUCTS.  The Company has       
created significant brand equity as a result of its innovative designs,     
 quality products and product reliability. With over 100,000 units sold during
the past 50 years, the Company believes that it currently has one of the    
industry's largest installed bases of cranes and aerial work platforms. The 
quality of the Company's products and the value of its brand name are       
reflected in the North American marketplace, where the Company believes that
its cranes generally command premium prices and have higher residual values 
than comparable products manufactured by its competitors. For example, Grove
Crane's products typically have residual values in excess of 50% of their   
original cost after five years, which management believes is significantly  
greater than the average residual value of its competitors' products.       

- SUPERIOR CUSTOMER SERVICE.  The Company is committed to providing superior    
training, sales and service support to its distributors and end-users as a  
standard part of its sales and marketing effort. Management believes that no
 other major competitor matches the extent and quality of its customer support
services and that such services significantly contribute to the Company's   
ability to charge premium prices for its products. In addition, the Company 
 has focused on providing ready availability of service parts. For example, in
fiscal 1997, the Company shipped over 80% of its replacement parts worldwide
within 24 hours after receipt of an order. After-market sales for parts and 
services accounted for 12% of the                                           

------------------------------                                                  

(1) All market share data are based on units shipped during fiscal 1997, except 
   for data on Grove Manlift's share of the North American and European aerial
    work platform markets, which are based on fiscal 1997 revenues. With respect
to aerial work platforms, management believes that because the Company  
 primarily competes in the North American and European markets for larger,
high-end aerial work platforms, comparisons based on revenues are more  
 appropriate. Market data were derived from management estimates including
management assumptions regarding unit price.                            

(2) Does not include industrial cranes.                                         

(3) In the United States, the Company has a number three market position and a  
17% market share. National Crane has a nominal presence in the Canadian 
market for articulating cranes.                                         

6 

424B3
8th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 8th
Company's net sales and 26% of gross profits in fiscal 1997. Such sales     
typically have higher gross margins and are less cyclical than new equipment
sales.                                                                      

- ESTABLISHED NETWORK OF DISTRIBUTORS.  The Company benefits from an established
base of approximately 240 independent distributors located in 50 countries  
  around the world. Over two-thirds of Grove Crane's North American distributors
  have sold the Company's products for over 10 years. The Company believes that,
in many cases, its products represent an important portion of its           
 distributors' business. Many of these distributors also represent Caterpillar
Inc. or Komatsu Ltd. and, as such, are considered among the best-capitalized
in the industry. Management believes that the strength of its distributor   
network is an important competitive advantage. For example, within twelve   
months after acquiring the mobile hydraulic crane business of Fried Krupp AG
Hoesch-Krupp ("Krupp") in August 1995, the Company leveraged Grove's brand  
  name and distribution network to increase annual sales in the United States of
the cranes, formerly manufactured by Krupp, by 100% from approximately 40   
units in 1995 to approximately 80 units in 1996.                            

- BROAD PRODUCT LINE.  The Company believes it has the broadest product line in 
the industry, with 10 product categories and over 120 models offered by its 
three operating divisions. Management believes the breadth of the Company's 
product offerings enables it to more effectively serve the equipment rental 
market, which management estimates represents approximately 80% of the      
  Company's net sales. The Company's broad product line allows it to satisfy the
rental market's demand for models addressing specific end-user needs, while 
also providing customers the opportunity to save on support, maintenance and
training costs by purchasing from a single manufacturer.                    

BUSINESS STRATEGY                                                               

 As a result of the Acquisition (as defined), the Company is operated on a
stand-alone basis rather than as part of a larger diversified enterprise. The   
Company's management team expects to capitalize on the experience and expertise 
of new senior management as it implements the Operations Improvement Program in 
cooperation with the George Group Inc. ("George Group"), an acquisition and     
management consulting firm that applies strategic and operations management     
expertise to manufacturing businesses. Management is led by Salvatore J. Bonanno
who joined the Company in March 1998 from Foamex International Inc., where he   
led an organizational restructuring designed to reduce manufacturing and        
overhead costs. The Company will implement the Operations Improvement Program   
and the other key elements of the Company's business strategy described below in
order to reach its objective of increased net sales and EBITDA.                 

- OPERATIONS IMPROVEMENT PROGRAM.  The Company, in cooperation with the George  
Group, has developed a comprehensive program (the "Operations Improvement   
  Program") which it believes will enable the Company to reduce its annual costs
by approximately $35 million to $50 million and achieve significant working 
capital efficiencies by fiscal 2001. The Operations Improvement Program is  
intended to improve the Company's operating efficiency and margins by: (i)  
rationalizing product lines; (ii) reducing manufacturing costs; and (iii)   
reducing selling, general and administrative expenses. In addition, the     
  Company believes the Operations Improvement Program should enable it to reduce
its working capital requirements by decreasing inventory levels by          
approximately $40 million to $50 million.                                   

- CONTINUE TO PROVIDE SUPERIOR PRODUCTS.  The Company has maintained a          
commitment to superior engineering design and technological innovation. The 
 Company believes that it has the most extensive engineering capability in the
crane industry, with a dedicated engineering group focusing on developing   
innovative, high performance, low maintenance products that satisfy the     
demands of its customers. Together with the Company's manufacturing and     
marketing staff, these engineers seek to utilize new technologies and       
effectively introduce new products. For example, the Company has introduced 
lighter booms with greater lifting capacity, electronic controls that       
facilitate operations and product features that enhance safety and increase 
versatility. The Company believes that the greater sophistication of its    

7 

424B3
9th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 9th
products contributes to its ability to sustain higher residual values. The  
  Company intends to intensify its efforts to design products that meet evolving
 customer needs while reducing manufacturing costs and the period from product
conception to introduction.                                                 

- EXPAND EXISTING INTERNATIONAL BUSINESS.  The Company intends to leverage its  
 significant brand equity and strong distribution network to opportunistically
  expand its existing international business. As an industry leader, the Company
believes it is well-positioned to increase sales internationally as         
 infrastructure development in existing and emerging markets stimulates demand
for cranes and aerial work platforms. In 1995, the Company expanded its     
  product offerings and strengthened its manufacturing and distribution presence
  in Europe by acquiring the mobile hydraulic crane business of Krupp in Germany
and the aerial work platform business of Delta Systemes SA ("Delta") in     
France. In addition, all of the Company's manufacturing facilities have     
received ISO 9001 certifications, which enhances the Company's international
marketing efforts.                                                          

- CAPITALIZE ON THE GROWTH OF THE WORLDWIDE AERIAL WORK PLATFORM MARKET.  The   
Company seeks to capitalize on the increasing recognition by end-users      
worldwide that aerial work platforms are economical and safe alternatives to
scaffolding and ladders. The North American aerial work platform industry   
 experienced a CAGR in total unit shipments from 1992 to 1997 of 32%. In 1997,
  approximately 41,000 aerial work platforms were shipped in North America while
only 13,000 units were shipped in markets outside of North America. The     
Company expects to generate increased sales of aerial work platforms in     
international markets as international end-users recognize the productivity 
and safety advantages of aerial work platforms.                             

THE OPERATIONS IMPROVEMENT PROGRAM                                              

    The Company, in cooperation with George Group, has developed a comprehensive
program which it believes will enable it to reduce its annual costs by          
approximately $35 million to $50 million and achieve significant working capital
efficiencies by fiscal 2001. The Operations Improvement Program is intended to  
improve the Company's operating efficiency and its margins by: (i) rationalizing
product lines; (ii) reducing manufacturing costs; and (iii) reducing selling,   
general and administrative expenses. In addition, the Company believes the      
Operations Improvement Program should enable it to reduce its working capital   
requirements by decreasing inventory levels by approximately $40 million to $50 
million. It is expected that these cost savings will be offset by non-recurring 
costs of up to approximately $25 million associated with the implementation of  
the Operations Improvement Program, plus consulting fees payable to George      
Group. Estimates of potential cost savings and implementation costs are         
inherently uncertain and the description of the Operations Improvement Program  
should be read in conjunction with "Special Note Regarding Forward Looking      
Statements" and "Risk Factors--Realization of Benefits of Operations Improvement
Program." The key components of the Operations Improvement Program are as       
follows:                                                                        

   RATIONALIZE PRODUCT LINES.  The Company expects to implement a product line
rationalization program which will position it to reduce both operating costs   
and working capital requirements without diminishing the advantages derived from
its broad product line. The Company will monitor product line data to enable it 
to simplify its engineering processes by reducing the number of models and      
manufacturing components, standardizing options and using platform design       
concepts. The Company believes this program will enable it to eliminate certain 
models that have low demand, low margins or features and capabilities that are  
redundant with other models. The product line rationalization program will      
identify key product requirements by different customer groups within each of   
the market segments which the Company serves. Such information will be used to  
define a more focused product portfolio which, when compared to the existing    
product lines, will help the Company identify opportunities to reduce           
components, standardize features and eliminate models. Management believes that 
these actions will (i) reduce inventory, (ii) increase labor productivity, (iii)
improve purchasing leverage and (iv) help reduce selling, general and           
administrative expenses without negatively impacting revenue.                   

8 

424B3
10th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 10th
  REDUCE MANUFACTURING COSTS.  Management intends to reduce the annual costs
of goods sold by approximately $25 million to $30 million by fiscal 2001 by     
rationalizing its product line and undertaking the following initiatives to     
improve the Company's manufacturing process:                                    

- Accelerate the recently initiated Design for Manufacturing and Assembly       
("DFMA") program and continue to implement value analysis programs. These   
established techniques are designed to lower material and labor costs by    
 redesigning products, incorporating more standardized components and allowing
a simplified fabrication and assembly process. Initial efforts during fiscal
1997 resulted in a 28% reduction in labor costs for a test model.           

- Consolidate sourcing by using fewer suppliers to fulfill the Company's global 
requirements. As a result of its product rationalization and DFMA programs, 
  the Company expects to purchase a greater volume of fewer components, enabling
  it to significantly reduce its vendor base and benefit from increased sourcing
leverage.                                                                   

- Implement other procedures to reduce manufacturing costs, including: (i)      
  improving planning and scheduling by introducing continuous flow manufacturing
principles and integrating the Company's new management information system; 
(ii) improving product flow and reducing cycle time in order to increase    
manufacturing flexibility and capacity; and (iii) shifting the production of
  certain models and components to facilities where they can be more efficiently
produced.                                                                   

    REDUCE SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Management believes it
can reduce annual selling, general and administrative expenses by approximately 
$10 million to $20 million by fiscal 2001 by reducing redundant functions across
facilities, utilizing the Company's new management information system and       
streamlining existing business processes, including redesigning sales and       
administrative functions. See "Business--Management Information Systems."       

REDUCE WORKING CAPITAL REQUIREMENTS.  Management believes the Operations
Improvement Program will enable the Company to reduce its working capital       
requirements by reducing inventory levels by approximately $40 million to $50   
million. The Company expects to reduce its inventory levels primarily as a      
result of: (i) improved manufacturing processes; (ii) the shifting of production
of certain models and components to facilities where they can be more           
efficiently produced; and (iii) product rationalization.                        

9 

424B3
11th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 11th
THE TRANSACTIONS

THE ACQUISITION                                                                 

    On March 10, 1998, the Company, entered into an agreement (together with the
related agreements, the "Acquisition Agreement") to acquire, through certain of 
its subsidiaries, the mobile hydraulic crane, aerial work platform and          
truck-mounted crane businesses of Hanson Funding (G) PLC ("Hanson") and certain 
of its subsidiaries (the "Acquired Business"), for aggregate cash consideration 
of approximately $583.0 million plus certain assumed liabilities, subject to a  
post-closing net worth adjustment (the "Acquisition").                          

On April 29, 1998 (the "Closing Date"), pursuant to the Acquisition     
Agreement, the Company acquired the Acquired Business. Cash funding requirements
to consummate the Acquisition, including the payment of related fees and        
expenses, were approximately $604.5 million, which were provided by: (i) $209.5 
million of borrowings under a new $325.0 million credit facility (the "New      
Credit Facility"); (ii) $225.0 million of estimated gross proceeds to the       
Company from the offering of the 9 1/4% Senior Subordinated Notes due 2008 (the 
"Senior Subordinated Notes"); (iii) the issuance by Holdings of $50.0 million in
gross proceeds of its Senior Discount Debentures; and (iv) the issuance of      
$120.0 million of limited liability company membership interests of Holdings    
(the "Holdings Equity Issuance") (collectively, the "Financings"). At the       
Closing, Holdings contributed (the "Equity Contribution") the net proceeds from 
the Holdings Equity Issuance and the Debenture offering to the Company. The     
Acquisition, the Financings and the application of the proceeds of the          
Financings are hereinafter referred to as the "Transactions." See "The          
Transactions."                                                                  

Under the Acquisition Agreement, the purchase price is subject to a post
closing net worth adjustment based upon the net worth of the Grove Companies (as
defined in the Acquisition Agreement) as of April 28, 1998. In July 1998, the   
Company received $16.7 million from Hanson in payment of the post closing net   
worth adjustment. The Company has until October 1998 to review the combined     
balance sheet of the Grove Companies (the "Closing Balance Sheet") and, if it   
does not agree with the post closing net worth adjustment, to object to such    
determination.                                                                  

THE INVESTOR GROUP                                                              

   Keystone, Inc. and its related parties ("Keystone"), FW Strategic Partners,
L.P. ("Strategic Partners"), certain minority investors and certain principals  
of, and an entity formed by certain employees of, the George Group and certain  
other investors, including certain members of senior management (together with  
Keystone, Strategic Partners, the minority investors and the George Group, the  
"Investor Group") beneficially own in the aggregate, through Grove Investors LLC
("Grove Investors"), all of the outstanding membership interests of Holdings.   
Keystone is the principal investment entity of Robert M. Bass. Since 1985,      
Keystone and associated entities have directly and indirectly sponsored over 30 
leveraged acquisitions valued in the aggregate at more than $6.0 billion. These 
acquisitions have included, among others, American Savings Bank, F.A., Bell &   
Howell Company, CapStar Hotel Company, Ivex Packaging Corporation, National     
Reinsurance Corporation, Reliant Building Products, Inc., Specialty Foods       
Corporation, Stage Stores, Inc., and Williams Scotsman, Inc. Strategic Partners 
is a Delaware limited partnership formed to invest primarily in public and      
private debt and equity securities. George Group is an acquisition and          
management consulting firm that applies its strategic and operations management 
expertise to manufacturing businesses. George Group has established an exclusive
relationship with Keystone to pursue leveraged acquisitions of companies in     
which George Group's operational expertise may significantly reduce costs and   
increase revenue, cash flow and return on invested capital. As part of their    
on-going relationship, in May 1997, Keystone, Strategic Partners, certain other 
parties and George Group completed the acquisition of Reliant Building Products,
Inc.                                                                            

10

424B3
12th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 12th
GROVE HOLDINGS CAPITAL, INC.                                                    

   Grove Holdings Capital was organized as a direct wholly owned subsidiary of
Holdings for the purpose of acting as a co-issuer of the Debentures and is also 
a co-registrant of the Registration Statement. This was done so that certain    
institutional investors to whom the Senior Discount Debentures were marketed and
that might otherwise have been restricted in their ability to purchase debt     
securities issued by a limited liability company, such as Holdings, by reason of
the legal investment laws of their states of organization or their charter      
documents, would be able to invest in the Senior Discount Debentures. Grove     
Holdings Capital has no assets, no liabilities (other than the Debentures), no  
operations and will not have any revenues and is prohibited from engaging in any
business activities. As a result, holders of the Debentures should not expect   
Grove Holdings Capital to participate in servicing the interest and principal   
obligations on the Debentures.                                                  

11

424B3
13th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 13th
THE EXCHANGE OFFER

                                                        [Enlarge/Download Table]
                                                                                           
ISSUERS........................... The Exchange Debentures will be joint and several       
                                   obligations of Holdings and Grove Holdings Capital.     
                                   Grove Holdings Capital is a Delaware corporation and    
                                   wholly-owned subsidiary of the Company formed in        
                                   connection with the Offering. Grove Holdings Capital has
                                   no assets, no liabilities (other than the Debentures)   
                                   and no operations and is prohibited from engaging in any
                                   business activities.                                    

THE EXCHANGE OFFER................ The Issuers are offering to exchange up to $88,000,000  
                                   aggregate principal amount at maturity of their 11 5/8% 
                                   Series Discount Debentures due 2009 for a like principal
                                   amount at maturity of their outstanding 11 5/8% Senior  
                                   Discount Debentures due 2009 that were issued and sold  
                                   on April 29, 1998 in reliance upon an exemption from    
                                   registration under the Securities Act. The terms of the 
                                   Exchange Debentures will be identical in all material   
                                   respects (including principal amount, interest rate,    
                                   maturity and ranking) to the terms of the Senior        
                                   Discount Debentures for which they may be exchanged     
                                   pursuant to the Exchange Offer, except that the Exchange
                                   Debentures will be registered under the Securities Act  
                                   and therefore will not be subject to certain            
                                   restrictions on transfer and will not be entitled to    
                                   registration rights except under certain limited        
                                   circumstances. See "The Exchange Offer--Terms of the    
                                   Exchange".                                              

                                   Exchange Debentures issued pursuant to the Exchange     
                                   Offer in exchange for the Senior Discount Debentures may
                                   be offered for resale, resold and otherwise transferred 
                                   by holders thereof (other than any holder which is (i)  
                                   an Affiliate of the Company or (ii) a broker-dealer that
                                   purchases Notes from the Issuers to resell pursuant to  
                                   Rule 144A or any other available exemption) without     
                                   compliance with the registration and prospectus delivery
                                   provisions of the Securities Act, provided that such    
                                   Exchange Debentures are acquired in the ordinary course 
                                   of such holder's business and such holder has no        
                                   arrangement or understanding with any person to         
                                   participate in the distribution of such Exchange        
                                   Debentures and neither such holder nor any other such   
                                   person is engaging in or intends to engage in a         
                                   distribution of such Exchange Debentures.               

EXPIRATION DATE................... The Exchange Offer will expire at 5:00 p.m., New York   
                                   City time, on November 19, 1998 unless extended (the    
                                   "Expiration Date").                                     

EXCHANGE DATE..................... The first date the Senior Discount Debentures will be   
                                   accepted for exchange will be the Exchange Date.        

CONDITIONS TO THE EXCHANGE                                                                 
  OFFER........................... The obligation of the Issuers to consummate the Exchange
                                   Offer is subject to certain customary conditions which  
                                   may be waived by the Issuers. See "The Exchange         
                                   Offer--Certain Conditions to the Exchange Offer." The   
                                   Exchange Offer is not conditioned                       

12

424B3
14th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 14th
                                                        [Enlarge/Download Table]
                                                                                           
                                   upon any minimum aggregate principal amount of Senior   
                                   Discount Debentures being tendered for exchange. The    
                                   Issuers reserve the right to terminate or amend the     
                                   Exchange Offer at any time prior to the Expiration Date 
                                   upon the occurrence of any such condition.              

WITHDRAWAL RIGHTS................. Tenders may be withdrawn at any time prior to the       
                                   Expiration Date. Any Senior Discount Debentures not     
                                   accepted for any reason will be returned without expense
                                   to the tendering holders thereof as promptly as         
                                   practicable after the expiration or termination of the  
                                   Exchange Offer.                                         

PROCEDURES FOR TENDERING SENIOR                                                            
  DISCOUNT DEBENTURES............. Unless a tender of Senior Discount Debentures is        
                                   effected pursuant to the procedures for book-entry      
                                   transfer as provided herein, each holder of Senior      
                                   Discount Debentures wishing to accept the Exchange Offer
                                   must complete, sign and date a Letter of Transmittal, or
                                   a facsimile thereof, in accordance with the instructions
                                   contained herein and therein, and mail or otherwise     
                                   deliver such Letter of Transmittal, or such facsimile,  
                                   together with such Senior Discount Debentures or in     
                                   compliance with the specified procedures for guaranteed 
                                   delivery of Senior Discount Debentures, and any other   
                                   required documentation, to the Exchange Agent at the    
                                   address set forth herein. Holders of Senior Discount    
                                   Debentures registered in the name of a broker, dealer,  
                                   commercial bank, trust company or other nominee are     
                                   urged to contact such person promptly if they wish to   
                                   tender Senior Discount Debentures pursuant to the       
                                   Exchange Offer. See "Risk Factors--Adverse Consequences 
                                   of Failure To Exchange" and "The Exchange               
                                   Offer--Procedures for Tendering Senior Subordinated     
                                   Notes."                                                 

                                   Letters of Transmittal and certificates representing    
                                   Senior Discount Debentures should not be sent to the    
                                   Issuers. Such documents should only be sent to the      
                                   Exchange Agent. Questions regarding how to tender and   
                                   requests for information should be directed to the      
                                   Exchange Agent. See "Risk Factors--Adverse Consequences 
                                   of Failure To Exchange" and "The Exchange               
                                   Offer--Exchange Agent."                                 

FEDERAL INCOME TAX CONSEQUENCES... In the opinion of Paul, Weiss, Rifkind, Wharton &       
                                   Garrison, counsel to the Issuers, the exchange of Senior
                                   Discount Debentures for Exchange Debentures by holders  
                                   will not constitute an exchange for federal income tax  
                                   purposes, and U.S. holders will not realize any gain or 
                                   loss upon receipt of Exchange Debentures. See "The      
                                   Exchange Offer--Certain Federal Income Tax              
                                   Considerations."                                        

EFFECT ON HOLDERS OF THE SENIOR                                                            
  DISCOUNT DEBENTURES............. As a result of the making of the Exchange Offer, and    
                                   upon acceptance for exchange of all validly tendered    
                                   Senior Discount Debentures pursuant to the terms of this
                                   Exchange Offer, the Company will have fulfilled         
                                   covenants contained in the terms of                     

13

424B3
15th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 15th
                                                        [Enlarge/Download Table]
                                                                                           
                                   the Senior Discount Debentures and the Registration     
                                   Rights Agreement (the "Registration Rights Agreement")  
                                   dated April 29, 1998 between the Issuers and Donaldson, 
                                   Lufkin & Jenrette Securities Corporation ("DLJ") and    
                                   Chase Securities Inc. ("Chase Securities" and together  
                                   with DLJ, the "Initial Purchasers") and, accordingly,   
                                   the holders of the Senior Discount Debentures will have 
                                   no further registration or other rights under the       
                                   Registration Rights Agreement, except under certain     
                                   limited circumstances. See "Description of Deben-       
                                   tures--Registration Rights; Liquidated Damages." Holders
                                   of the Senior Discount Debentures who do not tender     
                                   their Senior Discount Debentures in the Exchange Offer  
                                   will continue to hold such Senior Discount Debentures   
                                   and will be entitled to all the rights and limitations  
                                   applicable thereto under the Indenture. All untendered, 
                                   and tendered but unaccepted, Senior Discount Debentures 
                                   will continue to be subject to the restrictions on      
                                   transfer provided for in the Senior Discount Debentures 
                                   and the Indenture. To the extent that Senior Discount   
                                   Debentures are tendered and accepted in the Exchange    
                                   Offer, the trading market, if any, for the Senior       
                                   Discount Debentures could be adversely affected. See    
                                   "Risk Factors--Adverse Consequences of Failure to       
                                   Exchange."                                              

EXCHANGE AGENT.................... The United States Trust Company of New York is serving  
                                   as exchange agent (the "Exchange Agent") in connection  
                                   with the Exchange Offer. See "The Exchange              
                                   Offer--Exchange Agent."                                 

RESALE OF EXCHANGE DEBENTURES..... Based upon interpretations by the Staff issued to third 
                                   parties, the Issuers believe that Exchange Debentures   
                                   issued pursuant to the Exchange Offer in exchange for   
                                   the Senior Discount Debentures may be offered for       
                                   resale, resold and otherwise transferred by holders     
                                   thereof (other than any holder which is (i) an Affili-  
                                   ate of the Company or (ii) a broker-dealer that         
                                   purchases Debentures from the Issuers to resell pursuant
                                   to Rule 144A or any other available exemption) without  
                                   compliance with the registration and prospectus delivery
                                   provisions of the Securities Act, provided that such    
                                   Exchange Debentures are acquired in the ordinary course 
                                   of such holder's business and such holder has no        
                                   arrangement or understanding with any person to partici-
                                   pate in the distribution of such Exchange Debentures and
                                   neither such holder nor any other such person is        
                                   engaging in or intends to engage in a distribution of   
                                   such Exchange Debentures. Each Affiliate that receives  
                                   the Exchange Debentures must comply with the            
                                   registration and prospectus delivery requirements of the
                                   Securities Act to the extent applicable. In addition,   
                                   each broker-dealer that receives Exchange Debentures for
                                   its own account pursuant to the Exchange Offer may be   
                                   deemed to be an "underwriter" within the meaning of the 
                                   Securities Act, and must acknowledge that it will       
                                   deliver a prospectus meeting the requirements of the    
                                   Securities Act in connection with any resale of such    
                                   Exchange Debentures. This Prospectus, as it may be      
                                   amended or supplemented from time to                    

14

424B3
16th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 16th
                                                                [Download Table]
                                                       
time, may be used by a broker-dealer in connection with
resales of Exchange Debentures received in exchange for
Senior DiscountDebentures where such Senior            
DiscountDebentures were acquired by such broker-dealer 
as a result of market-making or other trading          
activities. See "The Exchange Offer--Resale of Exchange
Debentures."                                           

TERMS OF THE EXCHANGE DEBENTURES

The Exchange Offer applies to $88,000,000 aggregate principal amount at 
maturity of the Senior Discount Debentures. The form and terms of the Exchange  
Debentures are the same in all material respects as the form and terms of the   
Senior Discount Debentures except that the Exchange Debentures have been        
registered under the Securities Act and, therefore, will not bear legends       
restricting the transfer thereof. The Exchange Debentures will evidence the same
debt as the Senior Discount Debentures and will be entitled to the benefit of   
the Indenture. See "Description of Debentures."                                 

                                                        [Enlarge/Download Table]
                                                                                           
THE EXCHANGE DEBENTURES........... $88,000,000 aggregate principal amount at maturity of   
                                   11 5/8% Senior Discount Debentures due 2009.            

MATURITY DATE..................... May 1, 2009.                                            

ACCRETION......................... The Exchange Debentures will accrete at a rate of       
                                   11 5/8% compounded semi-annually to an aggregate        
                                   principal amount of $88.0 million at May 1, 2003.       

INTEREST RATE..................... The Exchange Debentures will bear interest at the rate  
                                   of 11 5/8 per annum, payable semi-annually on May 1 and 
                                   November 1 of each year, commencing November 1, 2003.   

SINKING FUND...................... None.                                                   

RANKING........................... The Exchange Debentures will be general unsecured       
                                   obligations of the Issuers, will rank equal in right of 
                                   payment with all existing and future senior indebtedness
                                   of the Issuers and will rank senior in right of payment 
                                   to all subordinated indebtedness of the Issuers. As     
                                   indebtedness of the Issuers, however, the Exchange      
                                   Debentures will be effectively subordinated to all      
                                   indebtedness of Grove and its other subsidiaries. As of 
                                   August 29, 1998, the Debentures were subordinated to    
                                   approximately $685.9 million of liabilities of Grove and
                                   its other subsidiaries. As of August 29, 1998, Holdings 
                                   had no senior indebtedness (other than the Debentures)  
                                   and no subordinated indebtedness outstanding.           

OPTIONAL REDEMPTION............... The Exchange Debentures will be redeemable at the option
                                   of the Issuers, in whole or in part, at any time on or  
                                   after May 1, 2003 in cash at the redemption prices set  
                                   forth herein, plus accrued and unpaid interest and      
                                   Liquidated Damages (as defined), if any, thereon to the 
                                   date of redemption. In addition, at any time prior to   
                                   May 1, 2001, the Issuers may on any one or more         
                                   occasions redeem up to 35% of the aggregate principal   
                                   amount of Exchange Debentures originally issued at a    
                                   redemption price equal to 111.625% of the principal     
                                   amount thereof,                                         

15

424B3
17th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 17th
                                                        [Enlarge/Download Table]
                                                                                           
                                   plus accrued and unpaid interest and Liquidated Damages,
                                   if any, thereon to the redemption date, with the net    
                                   cash proceeds of one or more Public Equity Offerings (as
                                   defined); PROVIDED that at least 65% of the aggregate   
                                   principal amount of Exchange Debentures originally      
                                   issued remains outstanding immediately after the        
                                   occurrence of any such redemption. See "Description of  
                                   Debentures--Optional Redemption."                       

CHANGE OF CONTROL................. Upon the occurrence of a Change of Control, each holder 
                                   of Exchange Debentures will have the right to require   
                                   the Issuers to repurchase all or any part of such       
                                   holder's Exchange Debentures at an offer price in cash  
                                   equal to 101% of the aggregate principal amount thereof,
                                   plus accrued and unpaid interest and Liquidated Damages,
                                   if any, thereon to the date of purchase. See            
                                   "Description of Debentures--Repurchase at the Option of 
                                   Holders--Change of Control." There can be no assurance  
                                   that, in the event of a Change of Control, the Issuers  
                                   would have sufficient funds to purchase all Exchange    
                                   Debentures tendered. See "Risk Factors--Limitations on  
                                   Ability to Make Change of Control Payment."             

CERTAIN COVENANTS................. The Indenture contains certain covenants that will      
                                   limit, among other things, the ability of the Issuers   
                                   to: (i) pay dividends, redeem capital stock or make     
                                   certain other restricted payments or investments, (ii)  
                                   incur additional indebtedness or issue certain preferred
                                   equity interests, (iii) merge, consolidate or sell all  
                                   or substantially all of its assets, (iv) create liens on
                                   assets and (v) enter into certain transactions with     
                                   affiliates or related persons. See "Description of      
                                   Debentures--Certain Covenants."                         

ORIGINAL ISSUE DISCOUNT........... The Exchange Debentures are being issued with original  
                                   issue discount for U.S. federal income tax purposes.    
                                   Thus, although interest will not be payable on the      
                                   Exchange Debentures prior to November 1, 2003, holders  
                                   will be required to include amounts in gross income for 
                                   U.S. federal income tax purposes in advance of receipt  
                                   of the cash payments to which such income is attribu-   
                                   table. See "Certain Federal Income Tax                  
                                   Considerations--United States Holders--Original Issue   
                                   Discount."                                              

ABSENCE OF PUBLIC MARKET.......... There is no public market for the Exchange Debentures,  
                                   and the Exchange Debentures will not be listed on any   
                                   securities exchange or quotation system. The Company has
                                   been advised by the Initial Purchasers that, following  
                                   consummation of the Exchange Offer, the Initial         
                                   Purchasers intend to make a market in the Exchange      
                                   Debentures; however, any market-making may be           
                                   discontinued at any time without notice. If an active   
                                   public market does not develop, the market price and    
                                   liquidity of the Exchange Debentures may be adversely   
                                   affected. See "Risk Factors--Absence of a Public Market 
                                   for Exchange Debentures."                               

                                   The Senior Discount Debentures currently trade in the   
                                   PORTAL market. Following commencement of the Exchange   
                                   Offer                                                   

16

424B3
18th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 18th
                                                                [Download Table]
                                                       
but prior to its consummation, the Senior Discount     
Debentures may continue to be traded in the PORTAL     
market. Following consummation of the Exchange Offer,  
the Exchange Debentures will not be eligible for PORTAL
trading.                                               

  For definitions of certain capitalized terms used herein, see "Description
of Debentures."                                                                 

HOLDERS OF SENIOR DISCOUNT DEBENTURES AND PROSPECTIVE PURCHASERS OF THE 
EXCHANGE DEBENTURES SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION SET FORTH  
IN THIS PROSPECTUS AND, IN PARTICULAR, SHOULD EVALUATE THE SPECIFIC FACTORS SET 
FORTH UNDER "RISK FACTORS" FOR RISKS ASSOCIATED WITH THE EXCHANGE OFFER AND AN  
INVESTMENT IN THE EXCHANGE DEBENTURES. SEE "RISK FACTORS."                      
------------------------

  Holdings principal executive offices are located at 201 Main Street, Suite
3200, Fort Worth, Texas 76102. The telephone number of Holdings executive       
offices is (817) 390-8500. Grove Holdings Capital's principal executive offices 
are located at 1565 Buchanan Trail East, Shady Grove, Pennsylvania 17256. The   
telephone number of Grove Holdings Capital's executive offices is (717)         
597-8121.                                                                       

17

424B3
19th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 19th
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA 
(DOLLARS IN THOUSANDS)

  The following table presents summary: (i) historical financial data of the
Company for fiscal 1995, fiscal 1996, fiscal 1997, the nine months ended June   
28, 1997, the seven months ended April 28, 1998 and the two months ended June   
27, 1998; (ii) pro forma data of the Company for fiscal 1997 and the nine months
ended June 27, 1998; and (iii) historical consolidated balance sheet data of the
Company as of June 27, 1998. The Company's fiscal year ends on the Saturday     
closest to the last day of September. The summary historical financial data for 
the nine months ended June 28, 1997, the seven months ended April 28, 1998 and  
the two months ended June 27, 1998 were derived from unaudited historical       
financial statements. The pro forma financial data for fiscal 1997 and the nine 
months ended June 27, 1998 give effect to the Transactions as if they had       
occurred at the beginning of fiscal 1997. The pro forma financial data are      
unaudited and do not purport to represent what the Company's results of         
operations or financial position would have been if the Transactions had been   
completed as of the date or for the periods presented, nor does such data       
purport to represent the results of operations for any future period. The       
summary financial data set forth below should be read in conjunction with "The  
Transactions," "Selected Historical Financial Data," "Management's Discussion   
and Analysis of Financial Condition and Results of Operations," and the         
historical financial statements and pro forma financial data of the Company and 
the related notes thereto included elsewhere in this Prospectus. For purposes of
the following discussion, the Company refers to Holdings.                       

                                                        [Enlarge/Download Table]

                                                                                     PREDECESSOR                                   
                                                               -------------------------------------------------------             
                                                                                                  NINE                    COMPANY  
                                                                                                 MONTHS       SEVEN     -----------
                                                                      FISCAL YEAR ENDED           ENDED      MONTHS     TWO MONTHS 
                                                               -------------------------------  JUNE 28,   ENDED APRIL  ENDED JUNE 
                                                                 1995       1996       1997       1997      28, 1998     27, 1998  
                                                               ---------  ---------  ---------  ---------  -----------  -----------
STATEMENT OF OPERATIONS DATA(1):                                                                                                   
                                                                                                                                   
  Net sales................................................... $ 503,815  $ 794,209  $ 856,812  $ 633,845   $ 476,199    $ 154,780 
  Gross profit................................................   126,589    185,079    203,273    146,086     100,467       23,636 
  Operating expenses..........................................    88,216    134,459    135,382    100,575      78,412       24,326 
  Operating profit (loss).....................................    38,373     50,620     67,891     45,511      22,055         (690)
  Net income (loss)(2)........................................    16,769     25,448     42,220     27,320       4,436      (10,420)
BALANCE SHEET DATA (AT PERIOD END):                                                                                                
  Cash and cash equivalents...................................                                                           $  11,424 
  Total assets................................................                                                             951,416 
  Total debt..................................................                                                             514,753 
  Total holder's equity.......................................                                                             107,529 
OTHER DATA(3):                                                                                                                     
  Depreciation and amortization(4)............................    13,765     17,313     17,985     13,560      10,934        2,749 
  Capital expenditures(5).....................................     7,385     19,443     32,491     26,282      20,254        3,047 
  Sales backlog at end of period(6)...........................   208,152    185,237    229,513    242,529                  218,669 
  Net cash provided by (used in) operating activities.........     6,953      9,826     11,995    (22,003)     96,464      (20,515)
  Net cash used in investing activities.......................   (46,574)   (45,241)   (68,782)   (38,839)    (33,004)    (574,925)
  Net cash provided by (used in) financing activities.........    50,601     25,752     54,349     59,214     (59,459)     606,952 



                                                                                                                        NINE MONTHS
                                                                                                                           ENDED   
                                                                                                                         JUNE 27,  
                                                                                                                           1998    
                                                                                                                        -----------
                                                                                                                                   
PRO FORMA DATA(7):                                                                                                                 
  Interest expense(8).........................................                          44,318                              33,264 

------------------------------                                                  

(1) The financial results of Krupp and Delta have been included since their     
 respective dates of acquisition on August 30, 1995 and November 30, 1995,
respectively.                                                           

(2) Includes losses by the Company's Sunderland U.K. facility of $14,085 and    
 $2,912 for the seven months ended April 28, 1998 and the two months ended
   June 27, 1998, respectively. In August 1998, the Company announced plans to
   close the Sunderland facility. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital    
Resources."                                                             

18

424B3
20th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 20th
(3) The data below presents, for the periods indicated, operating profit plus   
 (i) depreciation and amortization (exclusive of depreciation on equipment
  held for rent), (ii) write-off of amount assigned to inventory in purchase
accounting, (iii) management fees paid to Hanson, (iv) restructuring    
charges, principally related to redundancy costs of facility            
reorganizations, (v) business process reengineering and training costs  
associated with installation of the Company's new management information
   system ("MIS") and (vi) an adjustment to eliminate the effect of units sold
 with residual value guarantees which have been accounted for as operating
  leases and recognize the gross profit on such units in the period in which
   such units were shipped. This data is included herein to provide additional
 information with respect to the ability of the Company to meet its future
debt service, capital expenditure and working capital requirements. In  
    addition, the Company believes that certain investors find this data to be a
 useful tool for measuring the ability of the Company to service its debt.
   This data is not necessarily a measure of the Company's ability to fund its
  cash needs nor is it intended to represent and should not be considered an
alternative to, or more meaningful than, net income and income from     
   operations as an indicator of the operating performance of this data should
   not be considered by investors as an indicator of cash flows from operating
  activities, investing activities and financing activities as determined in
accordance with generally accepted accounting principles, and items     
   excluded, such as depreciation and amortization, are significant components
in understanding and assessing the Company's financial performance. For 
purposes of the following presentation, the Company has compiled certain
 unaudited financial information for the seven months ended April 28, 1998
(prior to the Acquisition) and has combined such information with the   
unaudited financial information for the two months ended June 27, 1998  
(period subsequent to the Acquisition) to provide unaudited financial   
information with respect to the nine month period ended June 27, 1998.  

                                                        [Enlarge/Download Table]

                                                                        PREDECESSOR                                    
                                                 ---------------------------------------------------------    COMPANY  
                                                                                                  SEVEN     -----------
                                                        FISCAL YEAR ENDED         NINE MONTHS    MONTHS     TWO MONTHS 
                                                 -------------------------------  ENDED JUNE   ENDED APRIL  ENDED JUNE 
                                                   1995       1996       1997      28, 1997     28, 1998     27, 1998  
                                                 ---------  ---------  ---------  -----------  -----------  -----------
                                                                                                                       
Operating profit................................ $  38,373  $  50,620  $  67,891   $  45,511    $  22,055    $    (690)
Depreciation and amortization...................    13,765     17,313     17,985      13,560       10,934        2,749 
Write-off of amount assigned to inventory in                                                                           
  purchase accounting...........................        --         --         --      --           --           10,000 
Management fees paid to Hanson..................     3,390      5,655      2,176       1,632          162       --     
Restructuring charges from facility                                                                                    
  reorganizations...............................        --         --      1,960       1,960       --           --     
Expenses associated with new MIS installation...        --      2,723      1,283         910          142           12 
Impact of units sold accounted for as operating                                                                        
  leases........................................        66      2,393      2,555       1,381          801          797 
                                                 ---------  ---------  ---------  -----------  -----------  -----------
Total........................................... $  55,594  $  78,704  $  93,850   $  64,954    $  34,094    $  12,868 
                                                 ---------  ---------  ---------  -----------  -----------  -----------
                                                 ---------  ---------  ---------  -----------  -----------  -----------


                                                  COMBINED                                                             
                                                 -----------                                                           
                                                 NINE MONTHS                                                           
                                                 ENDED JUNE                                                            
                                                  27, 1998                                                             
                                                 -----------                                                           
                                                                                                                       
Operating profit................................  $  21,365                                                            
Depreciation and amortization...................     13,683                                                            
Write-off of amount assigned to inventory in                                                                           
  purchase accounting...........................     10,000                                                            
Management fees paid to Hanson..................        162                                                            
Restructuring charges from facility                                                                                    
  reorganizations...............................     --                                                                
Expenses associated with new MIS installation...        154                                                            
Impact of units sold accounted for as operating                                                                        
  leases........................................      1,598                                                            
                                                 -----------                                                           
Total...........................................  $  46,962                                                            
                                                 -----------                                                           
                                                 -----------                                                           

(4) Depreciation and amortization excludes depreciation on equipment held for   
rent.                                                                   

(5) Includes expenditures on the Company's new MIS of approximately $4,300 in   
   fiscal 1996, approximately $14,000 in fiscal 1997, approximately $9,084 for
the nine months ended June 28, 1997, approximately $9,322 for the seven 
months ended April 28, 1998 and approximately $2,222 for the two months 
ended June 27, 1998.                                                    

(6) Sales backlog includes firm orders for new equipment and replacement parts. 
Data with respect to backlog is unaudited for all periods presented.    

(7) As a result of the Acquisition, the Company has had to replace certain      
    administrative functions previously provided by Hanson. Management estimates
  that the cost of replacing these functions will be less than $1,000 in the
  first twelve months following the Acquisition ("Stand-alone Costs"). Since
the Acquisition, no further management fees have been paid to Hanson.   
 Accordingly, the adjusted operating profit data presented in footnote (3)
  above may be further adjusted to take account of (i) Stand-alone Costs and
    (ii) reductions in corporate overhead. Management expects that reductions in
    corporate overhead will result from, among other things, (i) the elimination
of the senior management long-term incentive plan and certain other     
 perquisites, (ii) lower pension and postretirement benefit expense due to
 purchase accounting adjustments and (iii) the elimination of professional
    fees and other expenses associated with the sale of the Company. The Company
   replaced the long-term incentive plan with an option plan providing for the
  granting of options to purchase membership interests to certain members of
 senior management at fair market value. See "Unaudited Pro Forma Combined
Financial Data."                                                        

  The pro forma adjustments to the adjusted operating profit data presented in
footnote (3) are set forth below for the periods indicated:             

                                                        [Enlarge/Download Table]

                                                                         FISCAL YEAR ENDED   NINE MONTHS ENDED
                                                                        SEPTEMBER 27, 1997     JUNE 27, 1998  
                                                                        -------------------  -----------------
                                                                                                              
                                                                             $  93,850           $  46,962    
Reduction in corporate overhead, net...................................          2,404               2,067    
Stand-alone Costs......................................................         (1,000)               (583)   
                                                                               -------             -------    
Total..................................................................      $  95,254           $  48,446    
                                                                               -------             -------    
                                                                               -------             -------    

19

424B3
21st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 21st
In addition to the cost savings reflected in the pro forma financial      
    statements, the Company believes it can achieve $35,000 to $50,000 of annual
cost savings by fiscal 2001. These additional cost savings, which depend
upon the Company's ability to implement certain improvements, relate to 
manufacturing productivity improvements, better supplies procurement and
SG&A reductions. It is expected that cost savings during the four fiscal
   years ending September 29, 2001 will be offset by non-recurring costs of up
to approximately $25,000 associated with the implementation of the      
    Operations Improvements Program. See "Special Note Regarding Forward Looking
Statements," "Risk Factors--Realization of Benefits of Operations       
Improvement Program" and "Business--The Operations Improvement Program."

(8) Cash interest expense represents total interest expense less amortization of
 deferred financing costs. Interest rates with respect to borrowings under
   the New Credit Facility are variable. A 25-basis point increase in interest
  rates on borrowings under the New Credit Facility would increase pro forma
interest expense by $500 annually.                                      

20

424B3
22nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 22nd
RISK FACTORS

PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS   
TOGETHER WITH THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS, BEFORE MAKING 
A DECISION TO EXCHANGE THE SENIOR DISCOUNT DEBENTURES. CERTAIN STATEMENTS IN    
THIS PROSPECTUS (INCLUDING CERTAIN OF THE FOLLOWING FACTORS) CONSTITUTE         
FORWARD-LOOKING STATEMENTS. SEE "SPECIAL NOTE REGARDING FORWARD-LOOKING         
STATEMENTS."                                                                    

SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE DEBT                                   

The Issuers incurred substantial indebtedness in connection with the    
Transactions and are highly leveraged. As of August 29, 1998, the Issuers had   
total indebtedness of $484.2 million. On a pro forma basis after giving effect  
to the Transactions, interest expense for fiscal 1997 would have been $38.3     
million. Pro forma earnings before fixed charges were insufficient to cover     
fixed charges by approximately $8.2 million for the nine months ended June 27,  
1998. Pro forma earnings for the nine months ended June 27, 1998 include        
non-cash charges of approximately $15.3 million. Holdings may incur additional  
indebtedness in the future, subject to limitations imposed by the Indenture, the
New Credit Facility and certain other agreements. See "The Transactions--The    
Acquisition," "Capitalization," "Description of Debentures" and "Unaudited Pro  
Forma Combined Financial Statements."                                           

Holdings' ability to make scheduled payments of principal of, or pay    
interest on, or to refinance its indebtedness depends on its future performance,
which, to a certain extent, is subject to general economic, financial,          
competitive, legislative, regulatory, and other factors beyond its control.     
Furthermore, all or a portion of the principal payments at maturity on the      
Debentures may require refinancing. There can be no assurance that Holdings'    
business will generate sufficient cash flow from operations or that future      
borrowings will be available in an amount sufficient to enable Holdings to      
service its indebtedness, including the Debentures, or for the Company to make  
necessary capital expenditures, or that any refinancing would be available on   
commercially reasonable terms or at all. See "--Limitation on the Payment of    
Funds to Holdings by its Subsidiaries" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital         
Resources."                                                                     

The degree to which the Issuers are leveraged could have significant    
consequences to the Issuers and the holders of the Debentures, including the    
following: (i) Holdings' ability to obtain additional financing for working     
capital, capital expenditures, acquisitions or general corporate purposes may be
impaired; (ii) a substantial portion of Holdings' cash flow from operations will
be dedicated to the payment of interest on the Debentures and the Company's     
existing indebtedness (including indebtedness under the New Credit Facility and 
the Senior Subordinated Notes), thereby reducing the funds available to Holdings
for other purposes; (iii) certain indebtedness under the New Credit Facility are
at variable rates of interest, which would cause Holdings to be vulnerable to   
increases in interest rates; (iv) Holdings is substantially more leveraged than 
certain of its competitors, which might place Holdings at a competitive         
disadvantage; and (v) Holdings' substantial degree of leverage could make it    
more vulnerable in the event of a downturn in general economic conditions or in 
its business. See "The Transactions--The Acquisition," "Description of Certain  
Indebtedness--New Credit Facility" and "Description of Debentures--Repurchase at
the Option of Holders--Change of Control."                                      

HOLDING COMPANY STRUCTURE; EFFECTIVE SUBORDINATION                              

  Holdings is a holding company and does not have any material operations or
assets other than ownership of the Company. Accordingly, the Debentures will be 
effectively subordinated to all existing and future liabilities of Holdings'    
subsidiaries including indebtedness under the New Credit Facility and the Senior
Subordinated Notes. As of August 29, 1998, the aggregate amount of liabilities  
of Holdings' subsidiaries to which holders of the Debentures were subordinated  
was approximately $685.9 million. Holdings and its subsidiaries may incur       
additional indebtedness in the future, subject to certain limitations contained 
in the instruments governing their indebtedness.                                

21

424B3
23rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 23rd
 Any right of Holdings to participate in any distribution of assets of its
subsidiaries upon the liquidation, reorganization or insolvency of any such     
subsidiary (and the consequent right of the holders of the Debentures to        
participate in the distribution of those assets) will be subject to the prior   
claims of the respective subsidiary's creditors. The obligations of the Company 
under the New Credit Facility are secured by substantially all of its assets.   
Additionally, Holdings will guarantee the Company's obligations under the New   
Credit Facility, and such guarantee will be secured by a first priority pledge  
of all the membership interests of the Company owned by Holdings. See           
"Description of Certain Indebtedness-- New Credit Facility."                    

LIMITATION ON THE PAYMENT OF FUNDS TO HOLDINGS BY ITS SUBSIDIARIES              

 Holdings' cash flow, and consequently its ability to pay dividends and to
service debt, including its obligations under the Debentures, is dependent upon 
the cash flows of its subsidiaries and the payment of funds by such subsidiaries
to Holdings in the form of loans, dividends or otherwise. Holdings' subsidiaries
have no obligation, contingent or otherwise, to pay any amounts due pursuant to 
the Debentures or to make any funds available therefor. In addition, the        
Company's New Credit Facility and the indenture governing the Company's Senior  
Subordinated Notes (the "Senior Subordinated Notes Indenture") impose, and      
agreements entered into in the future may impose, significant restrictions on   
the payment of dividends and the making of loans by the Company to Holdings.    
Accordingly, repayment of the Debentures may depend upon the ability of Holdings
to effect an offering of membership interests or to refinance the Debentures.   

ASSET ENCUMBRANCES                                                              

    In connection with the New Credit Facility, Holdings has granted the lenders
thereunder a first priority lien on all of the membership interests of the      
Company owned by it as security for its guarantee of the Company's obligations  
under the New Credit Facility. In the event of a default under the New Credit   
Facility or such guarantee, the lenders under the New Credit Facility could     
foreclose upon the assets pledged to secure the New Credit Facility, including  
such membership interests, and the holders of the Debentures might not be able  
to receive any payments until any payment default was cured or waived, any      
acceleration was rescinded, or the indebtedness under the New Credit Facility   
was discharged or paid in full.                                                 

REALIZATION OF BENEFITS OF OPERATIONS IMPROVEMENT PROGRAM                       

   The Company estimates that significant cost savings can be achieved through
implementation of the Operations Improvement Program. However, the estimates of 
potential cost savings are inherently uncertain, and the actual cost savings, if
any, could differ materially from those projected. In addition, a majority of   
those cost savings are to be realized gradually over the next four years. There 
can be no assurance that any or all of these cost savings will be achieved, or  
specifically, that they can be achieved within four years. Further, it is       
expected that cost savings during the four fiscal years ending September 29,    
2001 will be offset by non-recurring costs of up to approximately $25.0 million 
associated with the implementation of the Operations Improvement Program, plus  
consulting fees payable to George Group. See "Special Note Regarding Forward    
Looking Statements" and "Business--Operations Improvement Program."             

INDUSTRY CYCLICALITY                                                            

 Historically, sales of products manufactured and sold by the Company have
been subject to cyclical variations caused by, among other things, cyclical     
changes in general economic conditions and, in particular, in conditions in the 
construction industry. During periods of expansion in construction activity, the
Company generally has benefitted from increased demand for its products.        
Conversely, during recessionary periods, the Company has been adversely affected
by reduced demand for such products.                                            

22

424B3
24th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 24th
Downward cycles may result in reduction of the Company's new unit sales and     
pricing, which may materially and adversely impact the Company's results of     
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Cyclicality."                                            

COMPETITION                                                                     

    The markets in which the Company competes are highly competitive. To compete
successfully, the Company must remain competitive in areas of quality, value,   
product line, ease of use, safety, comfort and customer service. See            
"Business--Competition."                                                        

INTERNATIONAL RISKS                                                             

 The Company's products are sold in over 50 countries around the world. In
fiscal 1997, the Company generated approximately 29% of its net sales in foreign
currencies, while the costs associated with those net sales were only partly    
incurred in the same currencies. The major foreign currencies, among others, in 
which the Company does business are the British pound sterling, German mark and 
French franc. Because the Company's financial statements are denominated in U.S.
dollars, changes in exchange rates between the U.S. dollar and other currencies 
have had and will have an impact on the reported results of the Company. To     
date, this impact has not been material. In addition, changes in currency rates 
can affect the competitiveness of the Company's products and could result in    
management reconsidering prices and strategies to maintain market share.        
Historically, the Company's currency risk had been coordinated with Hanson. The 
Company is now responsible for its own cash management activities and expects to
use forward exchange contracts and options to manage its foreign currency risk. 
Although revenues and costs of the Company may be partially hedged, currency    
fluctuations will likely impact the Company's financial performance in the      
future.                                                                         

    In addition, the Company's business strategy includes expanding its existing
business in selected international markets. International operations and        
business expansion plans are subject to numerous additional risks, including the
impact of foreign government regulations, currency and interest rate            
fluctuations, exchange controls, trade barriers, the effects of income and      
withholding tax, governmental expropriation, political uncertainties and        
differences in business practices. There can be no assurance that foreign       
governments will not adopt regulations or take other actions that would have a  
direct or indirect adverse impact on the business or market opportunities of the
Company. Furthermore, there can be no assurance that the political, cultural and
economic climate outside the United States will be favorable to the Company's   
operations and business strategy.                                               

ENVIRONMENTAL AND RELATED MATTERS                                               

    The Company generates hazardous and nonhazardous wastes in the normal course
of its manufacturing operations. As a result, the Company is subject to a wide  
range of federal, state, local and foreign environmental laws and regulations,  
including the Comprehensive Environmental Response, Compensation and Liability  
Act ("CERCLA"), 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 required, and will require,       
expenditures by the Company on a continuing basis. The Company does not expect  
that these expenditures will have a material adverse effect on its financial    
condition or results of operations.                                             

CONCENTRATION OF OWNERSHIP                                                      

  The members of the Investor Group beneficially own, through their holdings
of the membership interests of Grove Investors, all of the outstanding          
membership interests of Holdings. Holdings in turn                              

23

424B3
25th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 25th
owns 100% of the outstanding membership interests of the Company. As a result,  
the Investor Group has the ability to control the Company's management, policies
and financing decisions, to elect a majority of the members of the Company's    
Management Committee and to control the vote on all matters coming before the   
equity holders of the Company. See "Security Ownership of Certain Beneficial    
Owners and Management."                                                         

RESTRICTIVE DEBT COVENANTS                                                      

 The New Credit Facility and the Senior Subordinated Note Indenture impose
significant operating and financial restrictions on the subsidiaries of         
Holdings, and the Indenture and certain other agreements impose significant     
financial restrictions on the Issuers. The New Credit Facility significantly    
limits or prohibits, among other things, the ability of the Company and its     
restricted subsidiaries to incur additional indebtedness, incur liens, pay      
dividends or make certain other restricted payments or investments, consummate  
certain asset sales, enter into certain transactions with affiliates, impose    
restrictions on the ability of a subsidiary to pay dividends or make certain    
payments to the Issuers, merge or consolidate with any other person or sell,    
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of the assets of the Company. The Indenture and certain other agreements contain
similar restrictions on the Issuers and their restricted subsidiaries. The New  
Credit Facility also requires the Company to maintain balance sheet and fixed   
charge coverage and leverage ratios. The ability of the Company to comply with  
these and other provisions of the New Credit Facility and the Senior            
Subordinated Note Indenture may be affected by events beyond the Company's      
control, and the Issuers' compliance with the provisions of the Indenture may be
similarly affected. These restrictions could limit the ability of the Company to
respond to market conditions or meet extraordinary capital needs or otherwise   
restrict corporate activities. There can be no assurances that such restrictions
will not materially adversely affect the ability of the Company to finance its  
future operations or capital needs. See "Description of Certain                 
Indebtedness--New Credit Facility" and "Description of Debentures--Certain      
Covenants."                                                                     

LIMITATIONS ON ABILITY TO MAKE CHANGE OF CONTROL PAYMENT                        

 The Indenture provides that, upon the occurrence of any Change of Control
(as defined therein), the Issuers will be required to make an offer (a "Change  
of Control Offer") to repurchase all the Debentures issued and then outstanding 
under the Indenture at a price equal to 101% of the Accreted Value thereof (if  
such date of repurchase is prior to May 1, 2003) or 101% of the principal amount
thereof (if such date of repurchase is on or after May 1, 2003) plus, in each   
case, accrued and unpaid interest and Liquidated Damages, if any, to the date of
repurchase. Any Change of Control under the Indenture would trigger a similar   
change of control offer under the Senior Subordinated Note Indenture and would  
constitute a default under the New Credit Facility. Therefore, upon the         
occurrence of a Change of Control, the lenders under the New Credit Facility    
would have the right to accelerate the Company's obligations under the New      
Credit Facility. Upon such event, such lenders would be entitled to receive     
payment of all outstanding obligations under the New Credit Facility. See       
"Description of Certain Indebtedness--New Credit Facility." If a Change of      
Control were to occur and waivers under the New Credit Facility were not        
obtained, it is unlikely that the Company and Grove Capital, Inc. ("Grove       
Capital") would be able to repay all of their obligations under the New Credit  
Facility and the Senior Subordinated Notes. Consequently, it is unlikely that   
the Issuers would have sufficient funds available to repurchase the Debentures  
pursuant to the Change of Control Offer in the absence of a waiver under the New
Credit Facility and the Senior Subordinated Note Indenture.                     

RISK OF FRAUDULENT TRANSFER LIABILITY                                           

 If a court of competent jurisdiction in a suit by an unpaid creditor or a
representative of creditors (such as a trustee in bankruptcy or a               
debtor-in-possession) were to find that either the Issuers did not receive fair 
consideration or reasonably equivalent value for issuing the Senior Discount    
Debentures and,                                                                 

24

424B3
26th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 26th
at the time of the incurrence of indebtedness represented by the Senior Discount
Debentures, the Issuers were insolvent, were rendered insolvent by reason of    
such incurrence, were engaged in a business or transaction for which their      
remaining assets constituted unreasonably small capital, intended to incur, or  
believed that they would incur, debts beyond their ability to pay as such debts 
matured, or intended to hinder, delay or defraud their creditors, such court    
could avoid such indebtedness, subordinate such indebtedness to other existing  
and future indebtedness of the Issuers or take other action detrimental to the  
holders of the Senior Discount Debentures. The measure of insolvency for        
purposes of the foregoing will vary depending upon the law of the relevant      
jurisdiction. Generally, however, a company would be considered insolvent for   
purposes of the foregoing if the sum of such company's debts is greater than all
the company's property at a fair valuation, or if the present fair saleable     
value of the company's assets is less than the amount that will be required to  
pay its probable liability on its existing debts as they become absolute and    
matured.                                                                        

RELIANCE ON KEY MANAGEMENT                                                      

The success of Holdings' business is dependent upon the management and  
leadership skills of Salvatore J. Bonanno, the Chairman and Chief Executive     
Officer of both Holdings and the Company. Although Holdings and the Company have
an employment agreement with Mr. Bonanno, the loss of his services or those of  
other members of senior management could have a material adverse effect on the  
Company and Holdings.                                                           

PRODUCT RECALL                                                                  

 From time to time, the Company becomes aware of defects in product design
for existing products which require it to take steps to correct or retrofit, at 
the Company's expense, previously sold products. There can be no assurance that 
any such product recall will not adversely affect the Company's reputation or   
result in a decline in sales of the Company's products, that action required to 
be taken to correct these defects will not result in additional temporary       
disruptions in the Company's business or that the costs of correcting any such  
defects will not adversely affect the Company's results of operations.          

ADVERSE CONSEQUENCES OF FAILURE TO EXCHANGE                                     

Issuance of the Exchange Debentures in exchange for Senior Discount     
Debentures pursuant to the Exchange Offer will be made only after a timely      
receipt by the Exchange Agent of such Senior Discount Debentures, a properly    
completed and duly executed Letter of Transmittal and all other required        
documents. Therefore, holders of Senior Discount Debentures desiring to tender  
such Senior Discount Debentures in exchange for Exchange Debentures should allow
sufficient time to ensure timely delivery. A tender will not be deemed to have  
been timely received if the tendering holder's properly completed and duly      
signed Letter of Transmittal accompanied by the Senior Discount Debentures is   
mailed prior to the Expiration Date but is received by the Exchange Agent after 
the Expiration Date. All questions as to the validity, form, eligibility        
(including time of receipt) and acceptance of Senior Discount Debentures        
tendered for exchange will be determined by the Issuers in their sole           
discretion, which determination will be final and binding on all parties.       
Neither the Issuers nor the Exchange Agent are under any duty to give           
notification of defects or irregularities with respect to the tenders of Senior 
Discount Debentures for exchange. See "The Exchange Offer--Procedures for       
Tendering Senior Discount Debentures."                                          

Holders of Senior Discount Debentures who do not exchange their Senior  
Discount Debentures for Exchange Debentures pursuant to the Exchange Offer, or  
whose Senior Discount Debentures are tendered but not accepted, will continue to
be subject to the restrictions on transfer of such Senior Discount Debentures as
set forth in the legend thereon as a consequence of the issuance of the Senior  
Discount Debentures pursuant to exemptions from, or in transactions not subject 
to, the registration requirements of the Securities Act and applicable state    
securities laws. In general, the Senior Discount Debentures may not be offered  
or sold unless registered under the Securities Act and applicable state laws,   

25

424B3
27th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 27th
or pursuant to an exemption therefrom. The Issuers do not intend to register the
Senior Discount Debentures under the Securities Act, other than in the limited  
circumstances contemplated by the Registration Rights Agreement. In addition, to
the extent that Senior Discount Debentures are tendered and accepted in the     
Exchange Offer, the trading market for untendered and tendered but unaccepted   
Senior Discount Debentures could be adversely affected. See "The Exchange       
Offer--Consequences of Failure to Exchange."                                    

RECEIPT OF RESTRICTED SECURITIES UNDER CERTAIN CIRCUMSTANCES                    

  Any holder of Senior Discount Debentures who tenders in the Exchange Offer
for the purpose of participating in a distribution of the Exchange Debentures   
may be deemed to have received restricted securities and, if so, will be        
required to comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. Failure of any    
holder to comply with such registration and prospectus delivery requirements may
subject such holder to civil and criminal liability under the Securities Act.   
See "The Exchange Offer--Resale of Exchange Debentures."                        

ABSENCE OF A PUBLIC MARKET FOR EXCHANGE DEBENTURES                              

   The Exchange Debentures will constitute a new issue of securities for which
there is no established trading market. The Issuers do not intend to list the   
Exchange Debentures on any national securities exchange or to seek the admission
of the Exchange Debentures for quotation through the Nasdaq Stock Market, Inc.  
Although the Initial Purchasers have advised the Company that they currently    
intend to make a market in the Exchange Debentures, they are not obligated to do
so, and may discontinue such market-making at any time without notice. In       
addition, such market-making activity will be subject to the limits imposed by  
the Securities Act and the Exchange Act. The Senior Discount Debentures         
currently trade in the PORTAL market. Following commencement of the Exchange    
Offer but prior to its consummation, the Senior Discount Debentures may continue
to be traded in the PORTAL market, but the Exchange Debentures will not be      
eligible for PORTAL trading. Accordingly, there can be no assurance as to the   
development or liquidity of any market for the Exchange Debentures (or any      
Senior Discount Debentures not tendered), the ability of the holders of the     
Exchange Debentures to sell their Exchange Debentures or the price at which the 
holders would be able to sell their Exchange Debentures. Future trading prices  
of the Exchange Debentures (or any Senior Discount Debentures not tendered) will
depend on many factors, including, among other things, prevailing interest      
rates, the Company's operating results and the market for similar securities.   

26

424B3
28th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 28th
THE TRANSACTIONS

THE ACQUISITION                                                                 

On March 10, 1998, the Company entered into the Acquisition Agreement to
acquire, through certain of its subsidiaries, the mobile hydraulic crane, aerial
work platform and truck-mounted crane businesses of Hanson and certain of its   
subsidiaries (the "Sellers"), for aggregate cash consideration of approximately 
$583.0 million plus certain assumed liabilities, subject to a post-closing net  
worth adjustment. In July 1998, the Company received $16.7 million from Hanson  
in payment of the post closing net worth adjustment. The Company has until      
October 1998 to object to the Closing Balance Sheet and the post closing net    
worth adjustment determined thereby.                                            

   To effect the Acquisition, the Company purchased from Hanson and certain of
its subsidiaries substantially all of the assets of Kidde Industries, Inc., a   
Delaware corporation ("Kidde"), and the capital stock of each of Crane Holdings,
Inc, a Delaware corporation, Grove Europe Ltd., a limited company organized     
under the laws of England and Wales, Deutsche Grove GmbH, a German limited      
liability company, Grove France S.A., a SOCIETE ANONYME organized under the laws
of France, Delta Manlift S.A.S., a SOCIETE PAR ACTION SIMPLIFIEE organized under
the laws of France, and Grove Manlift Pty. Ltd., a limited liability company    
incorporated under the laws of New South Wales, Australia. The Acquisition      
closed on April 29, 1998. As a result of the Acquisition, the Company became the
parent company of the entities operating the Acquired Business. The Company is a
wholly owned subsidiary of Holdings, whose limited liability membership         
interests are owned indirectly by members of the Investor Group. Cash funding   
requirements to consummate the Acquisition, including the payment of related    
fees and expenses, were $604.5 million. Financing for the Acquisition was       
provided by: (i) $209.5 million of borrowings under the New Credit Facility;    
(ii) $225.0 million of gross proceeds from the offering of the Senior           
Subordinated Notes; and (iii) the proceeds from the Equity Contribution.        
Holdings and the Company had no operations prior to the Acquisition. Holdings,  
Grove Holdings Capital, the Company and Grove Capital were formed in December   
1997, March 1998, December 1997 and March 1998, respectively, with nominal      
capital contributions and had no operations prior to the Acquisition.           

The structure of Grove Investors, Holdings, the Company and their       
subsidiaries (excluding inactive and immaterial foreign subsidiaries) is set    
forth below:                                                                    

[CHART] 

------------------------                                                        

(1) The Senior Discount Debentures were offered by Holdings and Grove Holdings  
Capital, a wholly owned subsidiary of Holdings.                         

(2) The Senior Subordinated Notes were offered by the Company and Grove Capital,
Inc., a wholly owned subsidiary of the Company.                         

27

424B3
29th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 29th
NEW CREDIT FACILITY                                                             

  On the Closing Date, the Company and Grove Capital, Inc. ("Grove Capital")
entered into the New Credit Facility with a syndicate of banks, as lenders, and 
Chase Bank of Texas, National Association, as administrative agent ("Chase"),   
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), as documentation   
agent, and BankBoston, N.A. ("BankBoston"), as syndication agent. The New Credit
Facility consists of a $200.0 million term loan facility (the "Term Loan        
Facility") and a $125.0 million revolving credit facility (the "Revolving Credit
Facility"). At Closing, the Company borrowed $200.0 million under the Term Loan 
Facility and $9.5 million under the Revolving Credit Facility. The undrawn      
portion of the Revolving Credit Facility will be available for working capital, 
acquisitions and general corporate purposes. See "Description of Certain        
Indebtedness--New Credit Facility."                                             

HOLDINGS EQUITY ISSUANCE                                                        

  The Equity Contribution by Holdings to the Company was partially funded by
the purchase of membership interests of Holdings by Grove Investors. See        
"Security Ownership of Certain Beneficial Owners and Management."               

HOLDINGS DISCOUNT DEBENTURES OFFERING                                           

The issuance by Holdings of the Debentures resulted in gross proceeds to
Holdings of approximately $50.0 million. The Equity Contribution was funded with
the net proceeds from the offering of the Debentures together with the proceeds 
of the Holdings Equity Issuance.                                                

THE INVESTOR GROUP                                                              

 Members of the Investor Group beneficially own, through their holdings of
membership interests of Grove Investors, all of the outstanding membership      
interests of Holdings. See "Security Ownership of Certain Beneficial Owners and 
Management." Keystone, formerly Robert M. Bass Group, Inc., is the principal    
investment entity of Robert M. Bass. Since 1987, Keystone and associated        
entities have directly and indirectly sponsored over 30 leveraged acquisitions  
valued in the aggregate at more than $6.0 billion. These acquisitions have      
included, among others, American Savings Bank, F.A., Bell & Howell Company,     
CapStar Hotel Company, Ivex Packaging Corporation, National Reinsurance         
Corporation, Reliant Building Products, Inc., Specialty Foods Corporation, Stage
Stores, Inc., and Williams Scotsman, Inc. Strategic Partners is a Delaware      
limited partnership formed to invest primarily in public and private debt and   
equity securities. George Group is an acquisition and management consulting firm
that applies its strategic and operations management expertise to manufacturing 
businesses. George Group has established an exclusive relationship with Keystone
to pursue leveraged acquisitions of companies in which George Group's           
operational expertise may significantly reduce costs and increase revenue, cash 
flow and return on invested capital. As part of their on-going relationship, in 
May 1997, Keystone, Strategic Partners, certain other parties and George Group  
completed the acquisition of Reliant Building Products, Inc.                    

28

424B3
30th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 30th
USE OF PROCEEDS 

The Issuers will not receive any cash proceeds or incur any additional  
indebtedness as a result of the issuance of the Exchange Debentures pursuant to 
the Exchange Offer.                                                             

The gross proceeds of $50.0 million from the sale of the Senior Discount
Debentures, together with borrowings by the Company totaling $209.5 million     
under the New Credit Facility, proceeds of $120.0 million from the Holdings     
Equity Issuance and gross proceeds of $225.0 million from the Senior            
Subordinated Notes, were used by the Company: (i) to fund the cash purchase     
price paid in connection with the Acquisition and (ii) to pay fees and expenses 
in connection with the Transactions. See "The Transactions."                    

   The estimated sources and uses of funds in connection with the Transactions
are set forth below:                                                            

                                                        [Enlarge/Download Table]

                                                                                                         AMOUNT    
                                                                                                      (IN MILLIONS)
                                                                                                      -------------
                                                                                                                   
SOURCES                                                                                                            
New Credit Facility:                                                                                               
  Revolving Credit Facility..........................................................................   $     9.5  
  Term Loan Facility.................................................................................       200.0  
Senior Subordinated Notes............................................................................       225.0  
Senior Discount Debentures...........................................................................        50.0  
Holdings Equity Issuance.............................................................................       120.0  
                                                                                                           ------  
    Total............................................................................................   $   604.5  
                                                                                                           ------  
                                                                                                           ------  
USES                                                                                                               
Acquisition of the Acquired Business.................................................................   $   583.0  
Fees and expenses....................................................................................        21.5  
                                                                                                           ------  
    Total............................................................................................   $   604.5  
                                                                                                           ------  
                                                                                                           ------  

29

424B3
31st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 31st
CAPITALIZATION
(DOLLARS IN THOUSANDS)

The following table sets forth the cash and cash equivalents and        
capitalization of Holdings at June 27, 1998. This table should be read in       
conjunction with "Use of Proceeds," "Selected Historical Combined Financial     
Data," "Management's Discussion and Analysis of Financial Condition and Results 
of Operations" and the historical and pro forma combined financial statements   
and the related Debentures thereto appearing elsewhere in this Prospectus.      

                                                        [Enlarge/Download Table]

                                                                                                        AS OF    
                                                                                                    JUNE 27, 1998
                                                                                                    -------------
                                                                                                                 
Cash and cash equivalents..........................................................................  $    11,424 
                                                                                                    -------------
                                                                                                    -------------
Total debt:                                                                                                      
New Credit Facility(1):                                                                                          
  Revolving Credit Facility........................................................................  $    25,200 
  Term Loan Facility...............................................................................      200,000 
Senior Subordinated Notes..........................................................................      225,000 
Senior Discount Debentures.........................................................................       50,953 
Other debt(2)......................................................................................       13,600 
                                                                                                    -------------
      Total debt...................................................................................      514,753 

Total holder's equity..............................................................................      107,259 
                                                                                                    -------------
      Total capitalization.........................................................................  $   622,282 
                                                                                                    -------------
                                                                                                    -------------

------------------------                                                        

(1) As part of the Transactions, the Company and Grove Capital, Inc. entered    
   into the New Credit Facility, which consists of a $125,000 Revolving Credit
 Facility and a $200,000 Term Loan Facility. The Revolving Credit Facility
enables the Issuers to obtain revolving credit loans and the issuance of
letters of credit. As of June 27, 1998, $22 of letters of credit were   
outstanding under the Revolving Credit Facility and $99.8 million of the
Revolving Credit Facility was available for future liquidity and capital
   needs. See "Management's Discussion and Analysis of Financial Condition and
   Results of Operations--Liquidity and Capital Resources" and "Description of
Certain Indebtedness--New Credit Facility."                             

(2) Represents short-term borrowings by Deutsche Grove GmbH, which are secured  
by an equal amount of trade receivables.                                

30

424B3
32nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 32nd
SELECTED HISTORICAL FINANCIAL DATA
(DOLLARS IN THOUSANDS)

   The following table presents selected historical combined financial data of
the Company (i) as of and for each of the fiscal years ended October 2, 1993,   
October 1, 1994, September 30, 1995, September 28, 1996 and September 27, 1997  
and (ii) as of June, 1998 and for the nine months ended June 28, 1997, the seven
months ended April 28, 1998 and the two months ended June 27, 1998. The selected
historical financial data for fiscal 1993 and fiscal 1994 and as of September   
25, 1993, September 24, 1994 and September 30, 1995, respectively, and the nine 
months ended June 28, 1997, the seven months ended April 28, 1998 and the two   
months ended June 27, 1998 were derived from unaudited historical financial     
statements. The selected historical combined financial data for fiscal 1995 were
derived from historical financial statements as of and for such periods audited 
by PricewaterhouseCoopers LLP and included elsewhere in this Prospectus. The    
selected historical financial data for fiscal 1996 and 1997 were derived from   
historical financial statements for such periods audited by Ernst & Young LLP   
and included elsewhere in this Prospectus. Information for interim periods      
includes all adjustments (consisting of normal recurring adjustments) considered
necessary in the opinion of management for a fair presentation of financial     
position and results of operations of the Company. Results for interim periods  
are not indicative of results for a full fiscal year. The selected historical   
financial data set forth below should be read in conjunction with "The          
Transactions," "Management's Discussion and Analysis of Financial Condition and 
Results of Operations" and the historical financial statements and the related  
notes thereto included elsewhere in this Prospectus. For purposes of the        
following discusssion, the Company refers to Holdings.                          

                                                        [Enlarge/Download Table]

                                                                         PREDECESSOR                                   COMPANY  
                                         ---------------------------------------------------------------------------  --------- 
                                                                                                  NINE       SEVEN       TWO    
                                                                                                 MONTHS     MONTHS     MONTHS   
                                                                                                  ENDED      ENDED      ENDED   
                                                                                                JUNE 28,   APRIL 28,  JUNE 27,  
                                           1993       1994       1995       1996       1997       1997       1998       1998    
                                         ---------  ---------  ---------  ---------  ---------  ---------  ---------  --------- 
                                                                                                                                
STATEMENT OF OPERATIONS DATA:                                                                                                   
  Net sales............................. $ 387,373  $ 393,526  $ 503,815  $ 794,209  $ 856,812  $ 633,845  $ 476,199  $ 154,780 
  Gross profit..........................    95,225     87,991    126,589    185,079    203,273    146,086    100,467     23,636 
  Operating expenses....................    86,077     80,752     88,216    134,459    135,382    100,575     78,412     24,326 
  Operating profit (loss)...............     9,148      7,239     38,373     50,620     67,891     45,511     22,055       (690)
  Net income (loss)(2)..................    (5,358)    (4,942)    16,769     25,448     42,220     27,320      4,436    (10,420)
BALANCE SHEET DATA (AT PERIOD END):                                                                                             
  Cash and cash equivalents............. $   5,458  $   7,135  $  18,685  $   8,184  $   5,024                        $  11,424 
  Total assets..........................   497,646    509,189    652,000    730,158    881,496                          951,486 
  Total debt............................    --         --         --          7,443      7,265                          514,753 
  Total invested capital................   416,368    399,762    467,306    502,554    628,492                          107,529 
OTHER DATA:                                                                                                                     
  Depreciation and amortization(3)...... $  13,093  $  13,258  $  13,765  $  17,313  $  17,985  $  13,560  $  10,934  $   2,749 
  Capital expenditures(4)...............     4,672      6,042      7,385     19,443     32,491     26,282     20,254      3,047 
  Sales backlog at end of period........    63,084    109,350    208,152    185,237    229,513    242,529               218,669 
  Ratio of earnings to fixed                                                                                                    
    charges(5)..........................       2.7x       2.0x      12.4x      12.2x      22.4x      16.5x      10.1x    --     

------------------------                                                        

(1) The results of Krupp and Delta have been included since their dates of      
acquisition on August 30, 1995 and November 30, 1995, respectively.     

(2) Includes losses by the Company's Sunderland U.K. facility of $14,085 and    
 $2,912 for the seven months ended April 28, 1998 and the two months ended
   June 27, 1998, respectively. In August 1998, the Company announced plans to
   close the Sunderland facility. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital    
Resources."                                                             

(3) Depreciation and amortization excludes depreciation on equipment held for   
rent.                                                                   

(4) Includes expenditures on the Company's new MIS of approximately $4,300 in   
   fiscal 1996, approximately $14,000 in fiscal 1997, approximately $9,084 for
the nine months ended June 28, 1997, approximately $9,322 for the seven 
months ended April 28, 1998 and approximately $2,222 for the two months 
ended June 27, 1998.                                                    

(5) Earnings used in computing the ratio of earnings to fixed charges consists  
of earnings before provision for income taxes plus fixed charges. Fixed 
   charges are defined as interest expense, which includes the amortization of
   deferred financing costs, and that portion of rental expense representative
of interest (deemed to be one-third of rental expense). Earnings before 
    fixed charges were insufficient to cover fixed charges by $8,669 for the two
   months ended June 27, 1998. Earnings for the two months ended June 27, 1998
included non-cash charges of $13,080.                                   

31

424B3
33rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 33rd
MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

The following discussion should be read in conjunction with the more    
detailed information and the historical combined financial statements and pro   
forma combined financial data included elsewhere in this Prospectus.            

OVERVIEW                                                                        

Membership interests of the Company and capital stock of Grove Holdings 
Capital account for all of Holdings' assets. Holdings conducts all of its       
business through the Company.                                                   

    The Company generates most of its net sales from the manufacture and sale of
new mobile hydraulic cranes, aerial work platforms and truck-mounted cranes. The
Company also generates a portion of its net sales from after-market sales       
(parts, service and used equipment) of the products it manufactures. Sales of   
used equipment are not material and are generally limited to trade-ins on new   
equipment through Company-owned distributors in France, Germany and the United  
Kingdom.                                                                        

Over the three fiscal years ended September 27, 1997, the Company       
experienced significant growth and profitability as a result of a strong North  
American economy and growing market demand for aerial work platforms. The       
Company also benefited from the acquisition of the mobile hydraulic crane       
business of Krupp in August 1995 and the aerial work platform business of Delta 
in November 1995. The Company's net sales for the nine months ended June 27,    
1998 were $631.0 million, a decrease of 0.4% from the same period in fiscal     
1997. The following is a summary of net sales for the periods indicated (dollars
in millions):                                                                   

                                                        [Enlarge/Download Table]

                                                                            FISCAL YEAR               NINE MONTHS ENDED    
                                                                  -------------------------------  ------------------------
                                                                                                                           
                                                                                                    JUNE 28,     JUNE 27,  
                                                                    1995       1996       1997        1997         1998    
                                                                  ---------  ---------  ---------  -----------  -----------
New equipment sold (1)........................................... $   378.8  $   632.4  $   670.1   $   499.5    $   492.8 
After-Market.....................................................      81.5      120.6      125.8        90.0         89.5 
Other (2)........................................................      43.5       41.2     60.9(3)       44.3         48.7 
                                                                  ---------  ---------  ---------  -----------  -----------
Net sales........................................................ $   503.8  $   794.2  $   856.8   $   633.8    $   631.0 
                                                                  ---------  ---------  ---------  -----------  -----------
                                                                  ---------  ---------  ---------  -----------  -----------

------------------------                                                        

(1) Excludes specialty cranes and equipment sold to the U.S. government.        

(2) Includes specialty cranes and equipment sold to the U.S. government and     
revenues from unit sales accounted for as operating leases.             

(3) Includes revenues resulting from a non-recurring contract for crane         
refurbishment with the Ministry of Defence of the United Kingdom.       

  Consistent with industry practice, particularly in Germany, certain of the
Company's mobile hydraulic crane sales (generally less than 5% of units sold    
annually) are made with residual value guarantees under which the full sales    
price is collected in cash on normal commercial terms following delivery of the 
cranes. However, these sales are accounted for in a manner similar to operating 
leases. Upon collection, the sales price is deferred and accounted for as       
deferred revenue (current and non-current) while the related inventory is       
reclassified as "property, plant and equipment--equipment held for rent." Over  
the term of the residual value guarantee, deferred revenue is recognized as     
sales and the depreciation of the related equipment held for rent is classified 
as cost of goods sold, the effect of which is to recognize sales, costs of goods
sold and gross profit over the residual value guarantee period, typically five  
years, as opposed to at the time of delivery of the crane. Losses with respect  
to residual value guarantees have been insignificant. See Note 1 of Notes to    
Combined Financial Statements.                                                  

As a result of the Acquisition, a significant portion of the Company's  
business is operated as a limited liability company organized under the laws of 
Delaware, as a result of which (i) Holdings is not itself subject to income tax,
(ii) the taxable income of the mobile hydraulic crane, aerial work platform and 
truck-mounted crane businesses in the United States will be allocated to the    
equity holders of Holdings, and (iii) such equity holders will be responsible   
for income taxes on such taxable income. The Company                            

32

424B3
34th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 34th
intends to make distributions in the form of dividends to equity holders of     
Holdings to enable them to meet their tax obligations with respect to income    
allocated to them by the Company. See "Description of Notes--Certain            
Covenants--Restricted Payments."                                                

RESULTS OF OPERATIONS                                                           

For financial reporting purposes, the Acquisition creates a new basis of
accounting and, accordingly, the Company is required to report results prior to 
the Acquisition separate from results subsequent to the Acquisition. For        
purposes of the following discussion of the Company's results of operations, the
Company has compiled certain unaudited financial information for the nine months
ended June 27, 1998 by combining results of operations for the seven months     
ended April 28, 1998 (prior to the Acquisition) with those for the two months   
ended June 27, 1998 (subsequent to the Acquisition). As described above, the    
Company's capital structure changed and, for income tax reporting purposes, the 
Company is a limited liability company. Consequently, information with respect  
to interest, income taxes, and net income for the nine month periods ended June 
27, 1998 is not considered meaningful and, accordingly, comparison of such items
with results for the nine month periods ended June 28, 1997 are not made herein.

 Set forth below is certain information regarding the Company's results of
operations for fiscal 1995, fiscal 1996 and fiscal 1997 and the nine month      
periods ended June 28, 1997 and June 27, 1998 (dollars in thousands).           

                                                        [Enlarge/Download Table]

                                                             FISCAL YEAR ENDED              NINE MONTHS ENDED      
                                                      -------------------------------  ----------------------------
                                                        1995       1996       1997     JUNE 28, 1997  JUNE 27, 1998
                                                      ---------  ---------  ---------  -------------  -------------
                                                                                                                   
Net Sales............................................ $ 503,815  $ 794,209  $ 856,812    $ 633,845      $ 630,979  
Cost of goods sold...................................   377,226    609,130    653,539      487,759        496,876  
Write-off of amount assigned to inventory in excess                                                                
  of historical costs resulting from purchase                                                                      
  accounting adjustments.............................    --         --         --           --             10,000  
                                                      ---------  ---------  ---------  -------------  -------------
    Gross profit.....................................   126,589    185,079    203,273      146,086        124,103  
Selling, engineering, general and administrative                                                                   
  expenses...........................................    84,826    128,804    124,152       92,142         96,197  
Management fees paid to Hanson.......................     3,390      5,655      2,176        1,632            162  
Amortization of goodwill.............................    --         --          9,054        6,801          6,379  
                                                      ---------  ---------  ---------  -------------  -------------
    Operating profit................................. $  38,373  $  50,620  $  67,891    $  45,511      $  21,365  
                                                      ---------  ---------  ---------  -------------  -------------
                                                      ---------  ---------  ---------  -------------  -------------

NINE MONTHS ENDED JUNE 27, 1998 (THE "FISCAL 1998 NINE MONTHS") COMPARED TO THE 
NINE MONTHS ENDED JUNE 28, 1997 (THE "FISCAL 1997 NINE MONTHS").                

   NET SALES.  Net sales for the Company decreased $2.8 million, or 0.4%, from
$633.8 million for the fiscal 1997 nine months to $631.0 million for the fiscal 
1998 nine months.                                                               

Net sales of mobile hydraulic cranes declined from the fiscal 1997 nine 
months to the fiscal 1998 nine months on higher unit sales. The decline in net  
sales was caused by a shift in product mix and higher price concessions,        
primarily on mobile hydraulic cranes produced by the Company's Sunderland, U.K. 
facility. While net sales to North American customers remained strong, net sales
in Europe and Asia declined. Net sales in Europe were also lower as a result of 
an increase in the percentage of units sold with residual value guarantees      
accounted for as operating leases.                                              

  Net sales of aerial work platforms increased modestly from the fiscal 1997
nine months to the fiscal 1998 nine months. Unit sales of aerial work platforms 
were down; however, net sales increased as a result of improved sales mix.      

 Net sales of truck-mounted cranes increased significantly from the fiscal
1997 nine months to the fiscal 1998 nine months. Net sales increased as the     
result of increased production capacity as well as significantly increased      
demand for higher priced models.                                                

 After-market sales, including parts and services, decreased slightly from
the fiscal 1997 nine months to the fiscal 1998 nine months. This decrease was   
due primarily to a modest decrease in parts sales partially offset by an        
increase in used equipment sales.                                               

33

424B3
35th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 35th
Other sales increased 9.9% as a result of higher revenue from unit sales
that were accounted for as operating leases, partially offset by lower revenues 
following the completion of a non-recurring contract for crane refurbishment    
with the Ministry of Defence of the United Kingdom.                             

  GROSS PROFIT.  Gross profit decreased $22.0 million, or 15.0%, from $146.1
million in the fiscal 1997 nine months to $124.1 million in the fiscal 1998 nine
months. The decline in gross profit was primarily attributable to a $10.2       
million decline in gross profit at the Company's Sunderland, U.K. facility      
caused by higher price concessions and lower sales volume available to absorb   
fixed overhead. The higher price concessions were primarily required to induce  
the sale of U.K. manufactured products, including 17 all-terrain cranes that    
were built to order for a customer that refused delivery in fiscal 1998. The    
sale of the cranes, which were sold for approximately $8.2 million during the   
second quarter of fiscal 1998, resulted in a loss of approximately $1.5 million.
In addition, gross profit was adversely impacted by the $10.0 million write-off 
of amounts assigned to inventory in excess of historical costs.                 

SELLING, ENGINEERING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling,    
engineering, general and administrative expenses increased $4.1 million, or     
4.4%, from $92.1 million in the fiscal 1997 nine months to $96.2 million in the 
fiscal 1998 nine months. As a percentage of net sales, selling, engineering,    
general and administrative expenses were 14.5% in the fiscal 1997 nine months   
and 15.2% in the fiscal 1998 nine months. The expense growth occurred broadly   
across the Company as the result of the distraction to operations created by the
Acquisition. Included in selling, engineering, general and administrative       
expenses for the 1998 nine months are approximately $0.9 million of George Group
expenses and $1.4 million of transition costs related to the sale of the        
Company. Included in selling, engineering, general and administrative expenses  
for the 1997 nine months is approximately $2.0 million in restructuring charges 
related to the U.K. crane manufacturing operation.                              

FISCAL 1997 COMPARED TO FISCAL 1996                                             

   NET SALES.  Net sales increased $62.6 million, or 7.9%, from $794.2 million
in fiscal 1996 to $856.8 million in fiscal 1997.                                

 Net sales of mobile hydraulic cranes were virtually unchanged from fiscal
1996 to fiscal 1997. Unit shipments increased in fiscal 1997 versus fiscal 1996,
with substantially all of the increase representing units sold to Latin American
customers. Sales of the Company's mobile hydraulic cranes reflected strong      
demand in North America.                                                        

   Net sales of aerial work platforms increased significantly from fiscal 1996
to fiscal 1997. Unit sales increased as a result of continued industry growth   
led by efficiency considerations as well as government-mandated safety standards
for people working in elevated environments.                                    

  Net sales of truck-mounted cranes increased significantly from fiscal 1996
to fiscal 1997. Unit sales increased principally due to increased international 
marketing efforts. Net sales of truck-mounted cranes also benefited from an     
improved product sales mix resulting primarily from increased demand for higher 
priced models.                                                                  

    After-market sales, including parts and services, increased from fiscal 1996
to fiscal 1997. This increase was due primarily to an increase in parts sales   
resulting from a larger installed base and relatively high rental fleet         
utilization.                                                                    

Other sales increased significantly as a result of a non-recurring crane
refurbishment contract for cranes with the Ministry of Defence of the United    
Kingdom.                                                                        

 GROSS PROFIT.  Gross profit increased $18.2 million, or 9.8%, from $185.1
million in fiscal 1996 to $203.3 million in fiscal 1997. The increase in gross  
profit was due primarily to increased sales in the aerial work platform and     
truck-mounted crane businesses. As a percentage of sales, gross profit improved 
modestly from 23.3% in fiscal 1996 to 23.7% in fiscal 1997.                     

34

424B3
36th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 36th
SELLING, ENGINEERING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling,    
engineering, general and administrative expenses increased $4.4 million, or     
3.4%, from $128.8 million in fiscal 1996 to $133.2 million in fiscal 1997.      
However, as a percentage of net sales, selling, engineering, general and        
administrative expenses declined from 16.2% in fiscal 1996 to 15.5% in fiscal   
1997 as a result of higher sales that absorbed fixed costs. The dollar increase 
was principally related to higher selling and advertising costs to support the  
sales growth of the Company's product lines as well as general cost increases.  
Included in selling, engineering, general and administrative expenses are       
research and development expenses, which increased 2.7% from $15.0 million in   
fiscal 1996 to $15.4 million in fiscal 1997. In addition, in fiscal 1996 and    
fiscal 1997, general and administrative expenses included $2.7 million and $1.3 
million, respectively, due to process reengineering and systems assessment costs
associated with the installation of the Company's management information system.
See "--Information Systems and the Impact of Year 2000."                        

MANAGEMENT FEES.  Results of operations for fiscal 1996 and fiscal 1997 
included management fees paid to Hanson of $5.7 million and $2.2 million,       
respectively. Management believes the Company's results of operations in all    
material respects reflect all operating costs on a stand alone basis. Management
estimates that costs to replace services provided by Hanson prior to the        
Acquisition together with other stand alone costs will be less than $1.0 million
for the twelve months following the Acquisition. Such costs, which are generally
less than the management fees charged by Hanson on an annual basis, relate to   
additional treasury, human resource and income tax requirements. Management     
believes such additional costs will be more than offset by planned costs savings
in other general and administrative areas.                                      

NET INTEREST EXPENSE/INCOME.  Net interest expense/income included (i)  
interest income of $0.6 million in fiscal 1996 and $2.1 million in fiscal 1997, 
which was generated primarily from notes receivable under the Company's special 
North American dealer financing program and (ii) interest expense of $3.3       
million in fiscal 1996 and $2.0 million in fiscal 1997, substantially all of    
which was paid to Hanson with respect to intercompany borrowings.               

 INCOME TAXES.  Income tax expense, virtually all of which was U.S.-based,
increased 18.3% from $22.2 million in fiscal 1996 to $26.2 million in fiscal    
1997. The overall effective tax rates were 46.6% and 38.3% for fiscal 1996 and  
fiscal 1997, respectively. The decline in tax rate was caused principally by a  
reduction in permanent goodwill additions which resulted from the transactions  
consummated to effect a demerger of certain of Hanson PLC's various businesses. 
The Company has established valuation allowances for net operating losses       
generated by its foreign subsidiaries.                                          

NET INCOME.  Net income increased $16.8 million, or 65.9%, from $25.4   
million in fiscal 1996 to $42.2 million in fiscal 1997. The increase related    
principally to increased sales and operating profits.                           

FISCAL 1996 COMPARED TO FISCAL 1995                                             

NET SALES.  Net sales increased $290.4 million, or 57.6%, from $503.8   
million in fiscal 1995 to $794.2 million in fiscal 1996.                        

Net sales of mobile hydraulic cranes increased significantly from fiscal
1995 to fiscal 1996, primarily as a result of higher unit sale and an improved  
product mix. Approximately 60% of the net sales increase resulted from sales to 
North American customers, with the majority of the balance resulting from sales 
to European customers. Unit sales increased as a result of strong demand created
by improved economic conditions for the construction industry in North America  
as well as from the acquisition and integration of the Krupp mobile hydraulic   
crane business (acquired in August 1995).                                       

   Net sales of aerial work platforms increased significantly from fiscal 1995
to fiscal 1996. Unit sales increased as a result of continued growth of the     
industry, resulting from efficiency considerations and government-mandated      
safety standards for people working in elevated environments, as well as from   
the acquisition of Delta in November 1995. Net sales to North American customers
grew by 33.5% in fiscal 1996 compared to fiscal 1995. Net sales to European     
customers, excluding the impact of the Delta acquisition, grew significantly in 
fiscal 1996.                                                                    

35

424B3
37th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 37th
    Net sales of truck-mounted cranes increased from fiscal 1995 to fiscal 1996.
Unit sales increased as a result of growth in the Company's telescoping product 
line. Product sales prices and mix improved slightly.                           

 After-market sales, including parts and services, increased significantly
from fiscal 1995 to fiscal 1996. This increase was related primarily to the     
acquisition of Krupp and higher volume from an increase of service part sales   
resulting from the higher installed base and relatively high rental fleet       
utilization.                                                                    

  GROSS PROFIT.  Gross profit increased $58.5 million, or 46.2%, from $126.6
million in fiscal 1995 to $185.1 million in fiscal 1996. The increase in gross  
profit was primarily due to increased sales in aerial work platforms and        
truck-mounted cranes, as well as due to the acquisition of Krupp. As a          
percentage of sales, gross margins declined from 25.1% in fiscal 1995 to 23.3%  
in fiscal 1996. The decrease was attributable principally to lower profit       
margins for the acquired Krupp all-terrain line of mobile hydraulic cranes      
relative to the Company's other product lines and lower gross margins from      
after-market sales related to Krupp's all-terrain products.                     

SELLING, ENGINEERING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling,    
engineering, general and administrative expenses increased $44.0 million, or    
51.9%, from $84.8 million in fiscal 1995 to $128.8 million in fiscal 1996.      
However, as a percentage of net sales, selling, engineering, general and        
administrative expenses declined from 16.8% in fiscal 1995 to 16.2% in fiscal   
1996 as the result of higher sales that absorbed fixed costs. The dollar        
increase was primarily related to the acquisitions of Krupp and Delta and higher
selling, general and administrative expenses to support the higher volume of    
business. Included in selling, engineering, general and administrative expenses 
are research and development expenses, which increased $5.7 million, or 61.3%,  
from $9.3 million in fiscal 1995 to $15.0 million in fiscal 1996 as the result  
of costs associated with accelerated development of new products and the Krupp  
acquisition. In addition, fiscal 1996 general and administrative expenses       
included $2.7 million of process reengineering and systems assessment costs     
associated with the installation of the Company's new management information    
system.                                                                         

MANAGEMENT FEES.  Results of operations for fiscal 1995 and fiscal 1996 
included management fees and other charges paid to Hanson of $3.4 million and   
$5.7 million, respectively.                                                     

 NET INTEREST EXPENSE/INCOME.  Interest expenses in fiscal 1995 and fiscal
1996 were $2.6 million and $3.3 million, respectively, substantially all of     
which was paid to Hanson with respect to intercompany receivables.              

 INCOME TAXES.  Income tax expense, virtually all of which was U.S.-based,
increased from $19.0 million, or 16.7%, in fiscal 1995 to $22.2 million in      
fiscal 1996. The overall effective tax rates were 53.1% and 46.6% for fiscal    
1995 and fiscal 1996, respectively. The decline in tax rate was caused          
principally by the utilization of Deutsche Grove loss carryforwards. The Company
has established valuation allowances for net operating losses generated by its  
foreign subsidiaries.                                                           

    NET INCOME.  Net income increased $8.6 million, or 51.8%, from $16.8 million
in fiscal 1995 to $25.4 million in fiscal 1996. The increase related primarily  
to increased sales and operating profits created by increased demand for mobile 
hydraulic cranes and aerial work platforms as well as the acquisitions of Krupp 
and Delta.                                                                      

GEOGRAPHIC COMPARISONS DURING THE THREE YEARS ENDED SEPTEMBER 27, 1997          

 Net sales to unaffiliated customers by the Company's domestic subsidaries
contributed in excess of 70.0% of the Company's sales in fiscal 1997 and        
virtually all of its net income. Net sales to unaffiliated customers by the     
Company's domestic subsidaries increased by $43.6 million or 7.8% in fiscal 1997
as compared to fiscal 1996, which represented approximately 70.0% of the        
Company's overall sales increase for fiscal 1997. The increase in net sales by  
the Company's domestic subsidiaries was caused by strong sales of aerial work   
platforms and truck-mounted cranes. Net sales of mobile hydraulic cranes by the 
Company's domestic subsidiaries were virtually unchanged in fiscal 1997 as      
compared to fiscal 1996. Net sales to unaffiliated customers by the Company's   
foreign subsidiaries increased by $16.7 million or 7.2% in fiscal               

36

424B3
38th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 38th
1997 as compared to fiscal 1996. The increase in net sales by the Company's     
foreign subsidiaries was primarily the result of continued growth of aerial work
platform sales in Europe. Recurring operating losses by the Company's           
manufacturing facility in Sunderland, U.K. of approximately $2.5 million in     
fiscal 1997 offset virtually all of the operating earnings of the Company's     
German and French subsidaries during the same period.                           

  Net sales to unaffiliated customers by the Company's domestic subsidiaries
contributed in excess of 70.0% of the Company's sales in fiscal 1996 and all of 
its net income. Net sales to unaffiliated customers by the Company's domestic   
subsidaries increased by $165.2 million or 41.6% in fiscal 1996 as compared to  
fiscal 1995, which represented approximately 56.0% of the Company's overall     
sales increase for 1997. The increase in net sales by the Company's domestic    
subsidiaries was primarily the result of continued growth of aerial work        
platform sales. Net sales to unaffiliated customers by the Company's foreign    
subsidiaries increased by $125.2 million or 117.3% in fiscal 1996 as compared to
fiscal 1995. The acquistion of Krupp contributed significant sales growth to    
both domestic and European operations. Operating losses by the Company's        
manufacturing facility in Sunderland, U.K. of approximately $3.8 million offset 
all of the operating earnings of the Company's German and French subsidiaries.  
The acquisitions of Delta and Krupp improved the operating results of the       
Company's German and French subsidiaries.                                       

  Net sales to unaffiliated customers by the Company's domestic subsidiaries
contributed in excess of 75.0% of the Company's sales in fiscal 1995 and all of 
its net income. The domestic net income was offset to some extent by losses from
the foreign subsidiaries including operating losses by the Company's            
manufacturing facility in Sunderland, U.K. of $2.4 million.                     

LIQUIDITY AND CAPITAL RESOURCES                                                 

Holdings conducts all of its business through the Company and its       
subsidiaries. The Company's business is working capital-intensive, requiring    
significant investments in receivables and inventory. In addition, the Company  
requires capital for replacement and improvements of existing plant, equipment  
and processes.                                                                  

During the two months ended June 27, 1998, the Company's operating      
activities used approximately $20.5 million in operating cash flow. This amount 
resulted primarily from $21.5 million of new notes receivable from customers    
under the Company's special North American dealer financing program. In July    
1998, the Company entered into an agreement with a third party financial        
institution to sell up to $50.0 million of notes generated from sales under such
program. The third party financial institution purchases the notes at face value
on a 90.0% non-recourse basis. In July 1998, the Company sold approximately     
$21.0 million of notes receivable to the third party. The sale of the notes     
qualifies as a sale under generally accepted accounting principles and,         
accordingly, upon sale, the notes receivable will be removed from the Company's 
balance sheet. See Note 4 of Notes to Unaudited Condensed Financial Statements. 

During the two months ended June 27, 1998 the Company used approximately
$574.9 million of cash flow for investing activities of which $563.5 million was
related to the Acquisition, $3.0 million was for capital expenditures and $8.3  
million was for investment in equipment held for rent. The cash flows used in   
operating and investing activities were funded by issuance of long-term debt of 
$450.2 and an equity contribution from Holdings of $168.2 million. See "The     
Transactions" and "Use of Proceeds."                                            

During the seven months ended April 28, 1998 (the "fiscal 1998 seven    
months"), the Company's operating activities provided $96.4 million in operating
cash flow. Cash flow from operating activities increased due to a sale to a     
third party financing company of $52.7 million of notes receivable from         
customers under the Company's special North American dealer financing program.  
Until the first quarter of fiscal 1998, Hanson financed all of the notes        
receivable arising under the special North American dealer financing program.   
Grove is currently negotiating with a number of financial institutions to sell  
secured notes receivable or similar instruments or accounts arising from sales  
pursuant to the Company's special North American dealer financing program.      
During the fiscal 1998 seven months, the Company used (i) $27.9 million in      
investing activities, consisting of $20.2 million of capital expenditures (of   
which $9.3                                                                      

37

424B3
39th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 39th
million was for the new management information system) and $16.4 million of     
investment in equipment held for rent (due to the operating lease treatment     
relating to certain sales which are accounted for as operating leases), and (ii)
$59.5 million in financing activities, principally consisting of amounts paid to
Hanson.                                                                         

 Cash used in investing activities in fiscal 1997 was related primarily to
capital expenditures of $32.5 million and costs of equipment held for rent of   
$37.9 million. Such equipment related to sales that are accounted for as        
operating leases as described under the caption, "Overview," above. Costs are   
recognized over the term of the residual guarantees, but the Company collects   
the invoiced price of equipment on normal commercial terms after shipment.      

 Capital expenditures in fiscal 1997 consisted of $14.0 million related to
the installation of the new management information systems, $8.3 million in     
discretionary spending (including $2.5 million to expand aerial work platform   
capacity) and $10.2 million for the replacement of existing plant and equipment.
The Company estimates that capital expenditures for the fiscal year ending      
September 26, 1998 will be approximately $31.7 million of which $18.7 million   
will be related to the completion of the installation of the new management     
information systems in its North American and European operations. See          
"--Management Information Systems and the Impact of Year 2000."                 

The Company plans to close its Sunderland, U.K. manufacturing facility  
because of recurring operating losses. Management believes closing the facility 
will improve operating earnings as well as provide the opportunity for          
additional cost reductions through product rationalization, reduced selling,    
general and administrative expenses and reduced manufacturing costs. Management 
has estimated total closure costs to be approximately $17.0 million, consisting 
of approximately $10.0 million of employee severance and $7.0 million of plant  
shut-down costs, all of which are expected to be expended in the next twelve    
months.                                                                         

    The Company expects that cash flows from foreign operations will be required
to meet its domestic debt service requirements. Such cash flows are expected to 
be generated from intercompany interest expense on loans the Company has made to
certain of its foreign subsidiaries to consummate the acquisition of Hanson's   
crane and aerial work platform subsidiaries in the U.K., Germany and France and 
for working capital requirements. The loans have been established with amounts  
and interest rates to allow for repatriation without restriction or additional  
tax burden. However, there is no assurance that the foreign subsidiaries will   
generate the cash flow required to service the loans or that the laws in the    
foreign jurisdictions will not change to limit repatriation or increase the tax 
burden of repatriation.                                                         

  In connection with the Acquisition, the Company entered into a seven-year,
$125 million Revolving Credit Facility, which will allow the Company, subject to
certain borrowing conditions, to obtain revolving credit loans and issue letters
of credit for working capital, acquisitions and general corporate purposes. A   
portion of the Revolving Credit Facility is available for borrowing by the      
Issuers in the Eurocurrency markets of British pounds sterling, German marks and
French francs and certain other currencies. Management believes that the        
Company's income from operations and available borrowings under the Revolving   
Credit Facility will be sufficient to meet its debt service obligations, capital
expenditure requirements and distributions in the form of dividends to equity   
holders of Holdings to enable them to meet their tax obligations with respect to
income allocated to them by the Company for at least the twelve months following
the Acquisition. See "Description of Certain Indebtedness--New Credit Facility."
Subject to certain exceptions, including the right of the Company to make cash  
distributions to Holdings to enable Holdings to make distributions to its equity
holders with respect to their tax obligations, the New Credit Facility and the  
Senior Subordinated Notes Indenture impose significant restrictions on the      
payment of cash dividends by the Company and its subsidiaries to Holdings. See  
"Risk Factors--Limitation on the Payment of Funds to Holdings by its            
Subsidiaries."                                                                  

38

424B3
40th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 40th
BACKLOG                                                                         

The Company's backlog consists of firm orders for new equipment and     
replacement parts. Total backlog as of September 30, 1998, was approximately    
$194.1 million compared to total backlog as of September 27, 1997 of $222.5     
million. 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. Parts orders are generally filled
on an as-ordered basis.                                                         

CYCLICALITY                                                                     

 Historically, sales of products manufactured and sold by the Company have
been subject to cyclical variations based, among other things, on general       
economic conditions and, in particular, on conditions in the construction       
industry. During periods of expansion in construction activity, the Company     
generally has benefited from increased demand for construction equipment.       
Conversely, during recessionary times, the Company has been adversely affected  
by reduced demand for such products. Downward cycles result in reductions in the
Company's new unit sales and prices, which adversely impact the Company's       
results of operations. Management believes there are several factors that may   
mitigate the effects of future cyclical trends in the Company's business. These 
factors include the continued growth of its aerial work platform business, which
has a lower correlation to the results of the construction industry, the global 
diversification of its sales network and the decrease in the fixed costs        
elements of the Company's overall business. After-market sales for parts and    
services accounted for 12% of the Company's net sales and 26% of gross profits  
in fiscal 1997. Such sales typically have higher gross margins and are less     
cyclical than new equipment sales. However, there can be no assurance that a    
decline in the general condition of the economy will not have a material adverse
impact on the Company. See "Risk Factors--Industry Cyclicality."                

   During fiscal 1996, fiscal 1997 and the nine months ended June 27, 1998 net
sales of new units to Asian customers represented 5.6%, 5.1% and 2.7% of the    
Company's net sales, respectively. The Asian economic crisis has had a limited  
impact on the Company's results of operations. Although the Company is not      
dependent on sales to Asian customers, management cannot reasonably predict what
impact, if any, the crisis will have on its competitors or on markets outside of
Asia where the Company sells its products.                                      

MANAGEMENT INFORMATION SYSTEMS AND THE IMPACT OF YEAR 2000                      

Certain computer programs and microprocessors use two digits rather than
four to define the applicable year. Any of the Company's computer programs that 
have date-sensitive software and microprocessors may recognize a date using "00"
as the year 1900 rather than the year 2000. This phenomenon (the "Year-2000     
Issue") could cause a disruption of operations, including, among other things, a
temporary inability to utilize manufacturing equipment, send invoices or engage 
in similar normal business activities.                                          

In fiscal 1995, the Company conducted a Year-2000 assessment of all     
management information systems used at its crane and aerial work platform       
facilities in the United States, United Kingdom and Germany. Upon completing    
this review in October 1995, the Company launched a campaign designed to replace
all existing software and hardware that was not Year-2000 compliant (the        
"Year-2000 Project"). In addition to replacing all business application software
and hardware, the Year-2000 Project was designed to provide improved business   
processes and procedures.                                                       

The Company determined that the Year-2000 Project would not need to be  
implemented at its National Crane facility in Waverly, Nebraska. Instead,       
National Crane implemented upgrades to all of its existing hardware and software
and converted all of its data. Management believes the completion of this       
project has rendered all of National Crane's major computer systems Year-2000   
compliant.                                                                      

The Year-2000 Project is expected to be completed at the end of first   
quarter of fiscal 1999 and will have a total cost of approximately $38.0        
million, of which approximately $35.3 million had been expended as of August 29,
1998. If the Year-2000 Project is delayed, the Company will be required to      
shorten its planning horizons and replace certain computerized functions, such  
as inventory and work-in-process                                                

39

424B3
41st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 41st
tracking, billing and order processing, with manual systems. Any such delay     
could result in part shortages and slow the delivery of products to the         
Company's customers. Management believes that all of the Company's major        
computer systems will be rendered Year-2000 compliant. If such modifications and
conversions are not completed in a timely manner, the Year-2000 Issue could have
a material impact on the operations of the Company. See "Business--Management   
Information Systems."                                                           

   The Company has also polled the manufacturers of its computerized numerical
control ("CNC") manufacturing/production equipment. The Company has been        
informed by such manufacturers that there are no Year-2000 Issues with respect  
to the Company's CNC equipment at its Shady Grove, Pennsylvania and Waverly,    
Nebraska facilities. The Company is also conducting an internal review of its   
CNC equipment to confirm its Year-2000 readiness. Although management believes  
that the Year-2000 Issue will not have a material adverse impact on its CNC     
equipment, there can be no assurance that it will not.                          

   In addition, the Company has initiated communications with key suppliers to
determine the extent to which the Company may be vulnerable to such parties'    
failure to remediate Year-2000 Issues in products they supply to the Company.   
There can be no guarantee that the systems of the other companies on which the  
Company's systems and products rely will be timely converted, or that a failure 
to convert by another company, or a conversion that is incompatible with the    
Company's systems, would not have a material adverse effect on the Company.     
However, based on its current assessment, management believes that the Year-2000
Issue will not have a material adverse impact on the Company's future results of
operations or financial conditions, although there can be no assurance that such
will be the case.                                                               

    Further, although it is difficult to predict with certainty what will happen
after December 31, 1999, in the event that some of the Company's key suppliers  
are not Year-2000 compliant, in a reasonably likely worst case scenario, the    
Company may be forced to temporarily replace certain computerized functions with
manual applications and may experience significant delays in its ability to     
perform certain functions, but does not expect to be unable to perform critical 
functions or to otherwise conduct its business. In addition, in the event that  
some of the Company's key customers are not Year-2000 compliant, in a reasonably
likely worst case scenario, the Company may suffer a loss in orders and revenue 
but does not expect such loss to have a material adverse effect on its          
operations or revenue. As part of the Company's Year-2000 efforts, the Company  
is planning to develop a contingency plan which is designed to (i) identify     
current key suppliers products which the Company has reason to believe may      
suffer significant malfunctions as a result of Year-2000 compliance failures and
identify alternative suppliers in order to minimize any impact on the Company   
and (ii) continue addressing any internal Year-2000 Issues.                     

DERIVATIVE FINANCIAL INSTRUMENTS, INFLATION AND INTEREST RATE RISK              

 Movement in foreign currency exchange rates creates risk to the Company's
operations to the extent of sales made and costs incurred in foreign currencies.
The major foreign currencies, among others, in which the Company does business  
are the British pound sterling, German mark and French franc. In addition,      
changes in currency exchange rates can affect the competitiveness of the        
Company's products and could result in management reconsidering pricing         
strategies to maintain market share. In fiscal 1997, approximately 29% of the   
Company's net sales were transacted in foreign currencies. During the past three
fiscal years, the impact of currency fluctuations has not had significant impact
on the Company's results of operations.                                         

   Historically, the Company's currency risk had been coordinated with Hanson.
The Company is now responsible for its own cash management activities and       
expects to use forward exchange contracts and options to manage its foreign     
currency risk. As of June 27, 1998, the Company was obligated under forward     
exchange contracts of approximately $3.7 million primarily for the purchase and 
sale of U.S. dollars, French francs, German marks and British pounds sterling.  
The Company is now responsible for its own cash management activities and       
expects to use forward exchange contracts and options to manage its foreign     
currency risk.                                                                  

40

424B3
42nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 42nd
   The Company historically has been able to adjust prices to offset increased
inflation, and, therefore, inflation has not had, nor is it expected to have, a 
significant effect on the operations of the Company.                            

Interest rates on borrowings under the Company's Term Loan Facility and 
Revolving Credit Facility are based, at the option of the Company, on the       
Alternative Base Rate or the relevant Eurocurrency Rate (each as defined in the 
Credit Agreement) plus an Applicable Margin, as defined in the Credit Agreement.
As of June 27, 1998, borrowings under the Term Loan Facility and Revolving      
Credit Facility bore interest at LIBOR plus 250 and 225 basis points,           
respectively. In July 1998, the Company entered into an interest rate agreement 
to collar the interest rate on approximately $100.0 million of the Company's    
floating rate borrowings for the three years ended September 2001. The Company  
may enter into additional interest rate caps, swaps or collars to hedge its     
interest rate risk. See "Description of Certain Indebtedness--New Credit        
Facility."                                                                      

ENVIRONMENTAL MATTERS                                                           

    The Company generates hazardous and non-hazardous waste in the normal course
of its manufacturing operations. As a result, the Company is subject to a wide  
range of Federal, state, local and foreign environmental laws, including CERCLA,
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 has required, and will continue to require, expenditures by the       
Company on a continuing basis. The Company does not expect that these           
expenditures will have a material adverse effect on its financial condition or  
results of operations.                                                          

    The Company is currently developing a remediation program with respect to an
area that has been contaminated by petroleum hydrocarbons at its Shady Grove,   
Pennsylvania facility. The Company believes that this contamination is confined 
to the Shady Grove site and has not migrated to any adjacent properties. The    
Company also believes that the costs of remediating this contamination will not 
have a material adverse effect on its financial condition or results of         
operations.                                                                     

CHANGE IN ACCOUNTING STANDARDS                                                  

   In 1997, the Financial Accounting Standards Board issued Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information." This     
Statement requires that public business enterprises disclose information about  
their products and services, operating segments, the geographic areas in which  
they operate, and their major customers. Management will adopt the provisions of
this Standard in fiscal year 1999.                                              

In 1998, the American Institute of Certified Public Accountants issued  
Statement No. 98-1, "Accounting for the Costs of Computer Software Developed or 
Obtained For Internal Use." This Statement requires capitalization of: (i)      
external direct costs of materials and services incurred in developing or       
obtaining internal-use computer software, (ii) payroll and payroll-related costs
for employees who are directly associated with and who devote time to the       
internal-use computer software project and (iii) interest costs incurred in     
developing computer software for internal use. Costs that are considered to be  
related to research and development activities would be expensed as incurred.   
Similarly, training and maintenance costs would be expensed, and allocations to 
amounts capitalized of general and administrative or overhead costs would not be
permitted. The proposal is effective for fiscal years beginning after December  
15, 1998. Application would be prospective. Earlier application of this         
Statement of the beginning of the fiscal year is encouraged for years for which 
annual financial statements have not been issued. The Company is not expected to
early-adopt this Statement. The adoption of this Statement is not expected to   
have a material effect on the financial position or results of the Company.     

   In 1998, the Financial Accounting Standards Board issued Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement  
establishes accounting and reporting standards for derivative instruments and   
for hedging activities. It requires that an entity recognize all derivatives as 
either assets or liabilities measured at fair value. Management has not yet     
evaluated this statement's impact on the Company's financial condition or       
results of operations. Adoption of this statement will be required for the      
fiscal year beginning October 1999.                                             

41

424B3
43rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 43rd
THE EXCHANGE OFFER

GENERAL                                                                         

  The Issuers hereby offer, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal (which   
together constitute the Exchange Offer), to exchange up to $88.0 million        
aggregate principal amount at maturity of Exchange Debentures for a like        
aggregate principal amount at maturity of Senior Discount Debentures properly   
tendered on or prior to the Expiration Date and not withdrawn as permitted      
pursuant to the procedures described below. The Exchange Offer is being made    
with respect to any and all of the Senior Discount Debentures.                  

   As of the date of this Prospectus, $88.0 million aggregate principal amount
at maturity of the Senior Discount Debentures is outstanding. This Prospectus,  
together with the Letter of Transmittal, is first being sent on or about October
21, 1998, to all holders of Senior Discount Debentures known to Holdings. The   
Issuers' obligations to accept Senior Discount Debentures for exchange pursuant 
to the Exchange Offer are subject to certain conditions set forth under "Certain
Conditions to the Exchange Offer" below. The Issuers currently expect that each 
of the conditions will be satisfied and that no waivers will be necessary.      

PURPOSE OF THE EXCHANGE OFFER                                                   

The Senior Discount Debentures were issued on April 29, 1998 in a       
transaction exempt from the registration requirements of the Securities Act.    
Accordingly, the Senior Discount Debentures may not be reoffered, resold, or    
otherwise transferred unless so registered or unless an applicable exemption    
from the registration and prospectus delivery requirements of the Securities Act
is available.                                                                   

   In connection with the issuance and sale of the Senior Discount Debentures,
the Issuers entered into the Registration Rights Agreement, which requires the  
Issuers to file with the Commission a registration statement relating to the    
Exchange Offer not later than June 29, 1998 (60 days after the date of issuance 
of the Senior Discount Debentures) and to use their reasonable best efforts to  
cause the registration statement relating to the Exchange Offer to become       
effective under the Securities Act not later than October 29, 1998 (180 days    
after the date of issuance of the Senior Discount Debentures) and the Exchange  
Offer to be consummated not later than 30 business days after the date of the   
effectiveness of the Registration Statement. In addition, under certain         
circumstances the Issuers are required to use their reasonable best efforts to  
file a shelf registration statement with respect to resales of the Debentures   
not later than 60 days after such filing obligation arises and cause such       
registration statement to become effective not later than 120 days after the    
date on which the Issuers become obligated to file such shelf registration      
statement. A copy of the Registration Rights Agreement has been filed as an     
exhibit to the Registration Statement.                                          

    The Exchange Offer is being made by the Issuers to satisfy their obligations
with respect to the Registration Rights Agreement. The term "holder," with      
respect to the Exchange Offer, means any person in whose name Senior Discount   
Debentures are known to Holdings or any other person who has obtained a properly
completed bond power from the registered holder, or any person whose Senior     
Discount Debentures are held of record by The Depository Trust Company. Other   
than pursuant to the Registration Rights Agreement, the Issuers are not required
to file any registration statement to register any outstanding Senior Discount  
Debentures. Holders of Senior Discount Debentures that do not tender their      
Senior Discount Debentures or whose Senior Discount Debentures are tendered but 
not accepted would have to rely on exemptions to registration requirements under
the securities laws, including the Securities Act, if they wish to sell their   
Senior Discount Debentures.                                                     

TERMS OF THE EXCHANGE                                                           

 The Issuers hereby offer to exchange, subject to the conditions set forth
herein and in the Letter of Transmittal accompanying this Prospectus, $1,000 in 
principal amount at maturity of Exchange Debentures for each $1,000 in principal
amount at maturity of the Senior Discount Debentures. The terms of the Exchange 
Debentures are the same in all material respects (including principal amount,   
interest rate,                                                                  

42

424B3
44th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 44th
maturity and ranking) as the terms of the Senior Discount Debentures for which  
they may be exchanged pursuant to the Exchange Offer, except that the Exchange  
Debentures have been registered under the Securities Act, and therefore will not
be subject to certain restrictions on transfer applicable to the Senior Discount
Debentures and will not be entitled to registration rights except under certain 
limited circumstances. The Exchange Debentures will evidence the same           
indebtedness as the Senior Discount Debentures and will be entitled to the      
benefits of the Indenture. See "Description of Debentures."                     

  The Exchange Offer is not conditioned upon any minimum aggregate amount of
Senior Discount Debentures being tendered for exchange.                         

The Issuers have not requested, and do not intend to request, an        
interpretation by the Staff with respect to whether the Exchange Debentures     
issued pursuant to the Exchange Offer in exchange for the Senior Discount       
Debentures may be offered for sale, resold or otherwise transferred by any      
holder without compliance with the registration and prospectus delivery         
provisions of the Securities Act. Instead, based on an interpretation by the    
Staff set forth in a series of no-action letters issued to third parties, the   
Issuers believe that Exchange Debentures issued pursuant to the Exchange Offer  
in exchange for Senior Discount Debentures may be offered for sale, resold and  
otherwise transferred by any holder of such Exchange Debentures (other than any 
holder which is (i) an Affiliate of the Company or (ii) a broker-dealer that    
purchases Debentures from the Issuers to resell pursuant to Rule 144A or any    
other available exemption) without compliance with the registration and         
prospectus delivery provisions of the Securities Act, provided that such        
Exchange Debentures are acquired in the ordinary course of such holder's        
business and such holder has no arrangement or understanding with any person to 
participate in the distribution of such Exchange Debentures and neither such    
holder nor any other such person is participating in or intends to participate  
in a distribution of such Exchange Debentures. Since the Commission has not     
considered the Exchange Offer in the context of a no-action letter, there can be
no assurance that Staff would make a similar determination with respect to the  
Exchange Offer. Any holder who is an Affiliate of the Company or who tenders in 
the Exchange Offer for the purpose of participating in a distribution of the    
Exchange Debentures may be deemed to have received restricted securities and    
cannot rely on such interpretation by the Staff and must comply with the        
registration and prospectus delivery requirements of the Securities Act in      
accordance with any resale transaction. Each holder must acknowledge, among     
other things, that it is not participating in, and does not intend to           
participate in, a distribution of Exchange Debentures. Each broker-dealer that  
receives Exchange Debentures for its own account in exchange for Senior Discount
Debentures, where such Senior Discount Debentures were acquired by such         
broker-dealer as a result of market-making activities or other trading          
activities, must acknowledge that it will deliver a prospectus in connection    
with any such resale of the Exchange Debentures. See "Plan of Distribution."    

    Tendering holders of the Senior Discount Debentures shall not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter 
of Transmittal, transfer taxes with respect to the exchange of the Senior       
Discount Debentures pursuant to the Exchange Offer.                             

EXPIRATION DATE; EXTENSION; TERMINATION; AMENDMENT                              

    The Exchange Offer will expire at 5:00 p.m., New York City time, on November
19, 1998, unless the Issuers have extended the period of time for which the     
Exchange Offer is open (such date, as it may be extended, is referred to herein 
as the "Expiration Date"). The Expiration Date will be at least 20 business days
after the commencement of the Exchange Offer in accordance with Rule 14e-1(a)   
under the Exchange Act. The Issuers expressly reserve the right, at any time or 
from time to time, in their sole discretion, to extend the period of time during
which the Exchange offer is open, and thereby delay acceptance for exchange of  
any Senior Discount Debentures, by giving oral or written notice to the Exchange
Agent and by timely public announcement no later than 9:00 a.m. New York City   
time, on the next business day after the previously scheduled Expiration Date.  
During any such extension, all Senior Discount Debentures previously tendered   
will remain subject to the Exchange Offer unless properly withdrawn.            

43

424B3
45th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 45th
The Issuers expressly reserve the right to (i) terminate or amend the   
Exchange Offer and not to accept for exchange any Senior Discount Debentures not
theretofore accepted for exchange upon the occurrence of any of the events      
specified below under "--Certain Conditions to the Exchange Offer" which have   
not been waived by the Issuers and (ii) amend the terms of the Exchange Offer in
any manner which, in their good faith judgment, is advantageous to the holders  
of the Senior Discount Debentures, whether before or after any tender of the    
Senior Discount Debentures. If any such termination or amendment occurs, the    
Issuers will notify the Exchange Agent and will either issue a press release or 
give oral or written notice to the holders of the Senior Discount Debentures as 
promptly as practicable.                                                        

   For purposes of the Exchange Offer, the term "business day" has the meaning
set forth in Rule 14d-1(c)(6) under the Exchange Act.                           

PROCEDURES FOR TENDERING SENIOR DISCOUNT DEBENTURES                             

   The tender to the Issuers of Senior Discount Debentures by a holder thereof
as set forth below and the acceptance thereof by the Issuers will constitute a  
binding agreement between the tendering holder and the Issuers upon the terms   
and subject to the conditions set forth in this Prospectus and in the           
accompanying Letter of Transmittal.                                             

  A holder of Senior Discount Debentures may tender the same by (i) properly
completing and signing the Letter of Transmittal or a facsimile thereof (all    
references in this Prospectus to the Letter of Transmittal shall be deemed to   
include a facsimile thereof) and delivering the same, together with the         
certificate or certificates representing the Senior Discount Debentures being   
tendered and any required signature guarantees and any other documents required 
by the Letter of Transmittal, to the Exchange Agent at its address set forth    
below on or prior to the Expiration Date (or complying with the procedure for   
book-entry transfer described below) or (ii) complying with the guaranteed      
delivery procedures described below. A tender will not be deemed to have been   
timely received if the tendering holder's properly completed and duly signed    
Letter of Transmittal accompanied by the Senior Discount Debentures is mailed   
prior to the Expiration Date but is received by the Exchange Agent after the    
Expiration Date.                                                                

   Any beneficial owner whose Senior Discount Debentures are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee and   
who wishes to tender should contact such registered holder promptly and instruct
such registered holder to tender on such beneficial owner's behalf. If such     
beneficial owner wishes to tender on such beneficial owner's behalf, such       
beneficial owner must, prior to completing and executing the Letter of          
Transmittal and delivering the Senior Discount Debentures, either make          
appropriate arrangements to register ownership of the Senior Discount Debentures
in such beneficial owner's name or obtain a properly completed bond power from  
the registered holder. The transfer of registered ownership may take            
considerable time.                                                              

    THE METHOD OF DELIVERY OF SENIOR DISCOUNT DEBENTURES, LETTERS OF TRANSMITTAL
AND ALL OF THE REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER. IF 
SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL PROPERLY       
INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME  
SHOULD BE ALLOWED TO INSURE TIMELY DELIVERY. NO SENIOR DISCOUNT DEBENTURES OR   
LETTERS OF TRANSMITTAL SHOULD BE SENT TO THE ISSUERS.                           

If tendered Senior Discount Debentures are registered in the name of the
signer of the Letter of Transmittal and the Exchange Debentures to be issued in 
exchange therefor are to be issued (and any untendered Senior Discount          
Debentures are to be reissued) in the name of the registered holder (which term,
for the purposes described herein, shall include any participant in The         
Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility") whose    
name appears on a security listing as a owner of Senior Discount Debentures),   
the signature of such signer need not be guaranteed. In any other case, the     
tendered Senior Discount Debentures must be endorsed or accompanied by written  
instruments of transfer, in form satisfactory to the Issuers and duly executed  
by the registered holder, and the signature on the endorsement or instrument of 
transfer must be guaranteed by a firm which is a member of a registered         

44

424B3
46th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 46th
national securities exchange or a member of the National Association of         
Securities Dealers, Inc. or by a clearing agency, an insured credit union, a    
savings association or a commercial bank or trust company having an office or   
correspondent in the United States (collectively, "Eligible Institutions"). If  
the Exchange Debentures and/or Senior Discount Debentures not exchanged are to  
be delivered to an address other than that of the registered holder appearing on
the Debenture registrar for the Senior Discount Debentures, the signature in the
Letter of Transmittal must be guaranteed by an Eligible Institution.            

  The Issuers understand that the Exchange Agent has confirmed with DTC that
any financial institution that is a participant in DTC's system may utilize     
DTC's Automated Tender Offer Program ("ATOP") to tender Senior Discount         
Debentures. The Issuers further understand that the Exchange Agent will request,
within two business days after the date the Exchange Offer commences, that DTC  
establish an account with respect to the Senior Discount Debentures for the     
purpose of facilitating the Exchange Offer, and any participant may make        
book-entry delivery of Senior Discount Debentures by causing DTC to transfer    
such Senior Discount Debentures into the Exchange Agent's account in accordance 
with DTC's ATOP procedures for transfer. However, the exchange of the Senior    
Discount Debentures so tendered will only be made after timely confirmation (a  
"Book-Entry Confirmation") of such book-entry transfer and timely receipt by the
Exchange Agent of an Agent's Message (as defined in the next sentence), an      
appropriate Letter of Transmittal with any registered signature guarantee, and  
any other documents required. The term "Agent's Message" means a message,       
transmitted by DTC and received by the Exchange Agent and forming part of a     
Book-Entry Confirmation, which states that DTC has received an express          
acknowledgement from a participant tendering Senior Discount Debentures which   
are the subject of such Book-Entry Confirmation and that such participant has   
received and agrees to be bound by the terms of the Letter of Transmittal and   
that the Issuers may enforce such agreement against such participant.           

If a holder desires to tender Senior Discount Debentures in the Exchange
Offer and time will not permit a letter of Transmittal or Senior Discount       
Debentures to reach the Exchange Agent before the Expiration Date or the        
procedure for book-entry transfer cannot be completed on a timely basis, a      
tender may be effected if the Exchange Agent has received at its address set    
forth below on or prior to the Expiration Date, a letter, telegram or facsimile 
transmission (receipt confirmed by telephone and an original delivered by       
guaranteed overnight courier) from an Eligible Institution setting forth the    
name and address of the tendering holder, the names in which the Senior Discount
Debentures are registered and, if possible, the certificate number of the Senior
Discount Debentures to be tendered, and stating that the tender is being made   
thereby and guaranteeing that within three business days after the Expiration   
Date, the Senior Discount Debentures in proper form for transfer (or a          
confirmation of book-entry transfer of such Senior Discount Debentures into the 
Exchange Agent's account at the Book-Entry Transfer Facility), will be delivered
by such Eligible Institution together with a properly completed and duly        
executed Letter of Transmittal (and any other required documents). Unless Senior
Discount Debentures being tendered by the above-described method are deposited  
with the Exchange Agent within the time period set forth above (accompanied or  
preceded by a properly completed Letter of Transmittal and any other required   
documents), the Issuers may, at their option, reject the tender. Copies of the  
notice of guaranteed delivery ("Notice of Guaranteed Delivery") which may be    
used by Eligible Institutions for the purposes described in this paragraph are  
available from the Exchange Agent.                                              

 A tender will be deemed to have been received as of the date when (i) the
tendering holder's properly completed and duly signed Letter of Transmittal     
accompanied by the Senior Discount Debentures (or a confirmation of book-entry  
transfer of such Senior Discount Debentures into the Exchange Agent's account at
the Book-Entry Transfer Facility) is received by the Exchange Agent, or (ii) a  
Notice of Guaranteed Delivery or letter, telegram or facsimile transmission to  
similar effect (as provided above) from an Eligible Institution is received by  
the Exchange Agent. Issuances of Exchange Debentures in exchange for Senior     
Discount Debentures tendered pursuant to a Notice of Guaranteed Delivery or     
letter, telegram or facsimile transmission to similar effect (as provided above)
by an Eligible Institution will be                                              

45

424B3
47th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 47th
made only against deposit of the Letter of Transmittal (and any other required  
documents) and the tendered Senior Discount Debentures.                         

All questions as to the validity, form, eligibility (including time of  
receipt) and acceptance of Senior Discount Debentures tendered for exchange will
be determined by the Issuers in their sole discretion, which determination shall
be final and binding on all parties. The Issuers reserve the absolute right to  
reject any and all tenders of any particular Senior Discount Debenture not      
properly tendered or not to accept any particular Senior Discount Debentures    
which acceptance might, in the judgment of the Issuers or their counsel, be     
unlawful. The Issuers also reserve the absolute right to waive any defects or   
irregularities or conditions of the Exchange Offer as to any particular Senior  
Discount Debentures either before or after the Expiration Date (including the   
right to waive the ineligibility of any holder who seeks to tender Senior       
Discount Debentures in the Exchange Offer). The interpretation of the terms and 
conditions of the Exchange Offer (including the Letter of Transmittal and the   
instructions thereto) by the Issuers shall be final and binding on all parties. 
Unless waived, any defects or irregularities in connection with tenders of      
Senior Discount Debentures for exchange must be cured within such reasonable    
period of time as the Issuers shall determine. Neither the Issuers, the Exchange
Agent nor any other person shall be under any duty to give notification of any  
defect or irregularity with respect to any tender of Senior Discount Debentures 
for exchange, nor shall any of them incur any liability for failure to give such
notification.                                                                   

    If the Letter of Transmittal is signed by a person or persons other than the
registered holder or holders of Senior Discount Debentures, such Senior Discount
Debentures must be endorsed or accompanied by appropriate powers of attorney, in
either case signed exactly as the name or names of the registered holder or     
holders appear on the Senior Discount Debentures.                               

   If the Letter of Transmittal or any Senior Discount Debentures or powers of
attorney are signed by trustees, executors, administrators, guardians,          
attorneys-in-fact, officers of corporations or others acting in a fiduciary or  
representative capacity, such persons should so indicate when signing, and,     
unless waived by the Issuers, proper evidence satisfactory to the Issuers of    
their authority to so act must be submitted.                                    

 By tendering, each holder will represent to the Issuers that, among other
things, (A) the Exchange Debentures acquired pursuant to the Exchange Offer are 
being acquired in the ordinary course of business of the person receiving such  
Exchange Debentures, whether or not such person is the holder; (B) it is not an 
Affiliate of the Issuers; (C) it is not participating in, and does not intend to
participate in, and has no arrangement or understanding with any Person to      
participate in, a distribution of the Senior Discount Debentures or the Exchange
Debentures; and (D) if such holder is a broker or dealer registered under the   
Exchange Act, it will receive the Exchange Debentures for its own account in    
exchange for the Senior Discount Debentures that were acquired as a result of   
market-making activities or other trading activities.                           

   Each broker-dealer referred to in clause (D) of the preceding sentence must
acknowledge that it will deliver a prospectus in connection with any resale of  
such Exchange Debentures. See "Plan of Distribution."                           

TERMS AND CONDITIONS OF THE LETTER OF TRANSMITTAL                               

   The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Exchange Offer.                           

The party tendering Senior Discount Debentures for exchange (the        
"Transferor") exchanges, assigns and transfers the Senior Discount Debentures to
the Issuers and irrevocably constitutes and appoints the Exchange Agent as the  
Transferor's agent and attorney-in-fact to cause the Senior Discount Debentures 
to be assigned, transferred and exchanged. The Transferor represents and        
warrants that it has full power and authority to tender, exchange, assign and   
transfer the Senior Discount Debentures and to acquire Exchange Debentures      
issuable upon the exchange of such tendered Senior Discount Debentures, and     
that, when the same are accepted for exchange, the Issuers will acquire good and
unencumbered title to the tendered Senior Discount Debentures, free and clear of
all liens, restrictions, charges and encumbrances                               

46

424B3
48th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 48th
and not subject to any adverse claim. The Transferor also warrants that it will,
upon request, execute and deliver any additional documents deemed by the        
Exchange Agent or the Issuers to be necessary or desirable to complete the      
exchange, assignment and transfer of tendered Senior Discount Debentures or     
transfer ownership of such Senior Discount Debentures on the account books      
maintained by a Book-Entry Transfer Facility. The Transferor further agrees that
acceptance of any tendered Senior Discount Debentures by the Issuers and the    
issuance of Exchange Debentures in exchange therefor shall constitute           
performance in full by the Issuers of certain of their obligations under the    
Registration Rights Agreement. All authority conferred by the Transferor will   
survive the death or incapacity of the Transferor and every obligation of the   
Transferor shall be binding upon the heirs, legal representatives, successors,  
assigns, executors and administrators of such Transferor. The Transferor will   
also make the representations described above under "Procedures for Tendering   
Senior Discount Debentures."                                                    

WITHDRAWAL RIGHTS                                                               

   Tenders of Senior Discount Debentures may be withdrawn at any time prior to
5:00 p.m., New York City time, on the Expiration Date.                          

For a withdrawal to be effective, a written notice of withdrawal sent by
telegram, facsimile transmission (receipt confirmed by telephone) or letter must
be received by the Exchange Agent at the address set forth herein prior to the  
Expiration Date. Any such notice of withdrawal must (i) specify the name of the 
person having tendered the Senior Discount Debentures to be withdrawn (the      
"Depositor), (ii) identify the Senior Discount Debentures to be withdrawn       
(including the certificate number or numbers and principal amount of such Senior
Discount Debentures), (iii) specify the principal amount of Senior Discount     
Debentures to be withdrawn, (iv) include a statement that such holder is        
withdrawing his election to have such Senior Discount Debentures exchanged, (v) 
be signed by the holder in the same manner as the original signature on the     
Letter of Transmittal by which such Senior Discount Debentures were tendered or 
as otherwise described above (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Trustee under the   
Indenture register the transfer of such Senior Discount Debentures into the name
of the person withdrawing the tender and (vi) specify the name in which any such
Senior Discount Debentures are to be registered, if different from that of the  
Depositor. The Exchange Agent will return the properly withdrawn Senior Discount
Debentures promptly following receipt of notice of withdrawal. If Senior        
Discount Debentures have been tendered pursuant to the procedure for book-entry 
transfer, any notice of withdrawal must specify the name and number of the      
account at the Book-Entry Transfer Facility to be credited with the withdrawn   
Senior Discount Debentures or otherwise comply with the Book-Entry Transfer     
Facility's procedure. All questions as to the validity of notices of            
withdrawals, including time of receipt, will be determined by the Issuers in    
their sole discretion and such determination will be final and binding on all   
parties.                                                                        

   Any Senior Discount Debentures so withdrawn will be deemed not to have been
validly tendered for exchange for purposes of the Exchange Offer. Any Senior    
Discount Debentures which have been tendered for exchange but which are not     
exchanged for any reason will be returned to the holder thereof without cost to 
such holder (or, in the case of Senior Discount Debentures tendered by          
book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer
Facility pursuant to the book-entry transfer procedures described above, such   
Senior Discount Debentures will be credited to an account with such Book-Entry  
Transfer Facility specified by the holder) as soon as practicable after         
withdrawal, rejection of tender or termination of the Exchange Offer. Properly  
withdrawn Senior Discount Debentures may be retendered by following one of the  
procedures described under "--Procedures for Tendering Senior Discount          
Debentures" above at any time on or prior to the Expiration Date.               

ACCEPTANCE OF SENIOR DISCOUNT DEBENTURES FOR EXCHANGE; DELIVERY OF EXCHANGE     
DEBENTURES                                                                  

   Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
the Issuers will accept, promptly after the Exchange Date, all Senior Discount  
Debentures properly tendered and will issue the Exchange Debentures promptly    
after such acceptance. See "--Certain Conditions to the Exchange Offer"         

47

424B3
49th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 49th
below. For purposes of the Exchange Offer, the Issuers shall be deemed to have  
accepted properly tendered Senior Discount Debentures for exchange when, as and 
if the Issuers have given oral or written notice thereof to the Exchange Agent. 

    For each Senior Discount Debenture accepted for exchange, the holder of such
Senior Discount Debenture will receive an Exchange Debenture having a principal 
amount at maturity equal to that of the surrendered Senior Discount Debenture.  

    In all cases, issuance of Exchange Debentures for Senior Discount Debentures
that are accepted for exchange pursuant to the Exchange Offer will be made only 
after timely receipt by the Exchange Agent of certificates for such Senior      
Discount Debentures or a timely book-entry confirmation of such Senior Discount 
Debentures into the Exchange Agent's account at the Book-Entry Transfer         
Facility, a properly completed and duly executed Letter of Transmittal and all  
other required documents. If any tendered Senior Discount Debentures are not    
accepted for any reason set forth in the terms and conditions of the Exchange   
Offer or if Senior Discount Debentures are submitted for a greater principal    
amount than the holder desires to exchange, such unaccepted or non-exchanged    
Senior Discount Debentures will be returned without expense to the tendering    
holder thereof (or, in the case of Senior Discount Debentures tendered by       
book-entry transfer into the Exchange Agent's account the Book-Entry Transfer   
Facility pursuant to the book-entry transfer procedures described above, such   
non-exchanged Senior Discount Debentures will be credited to an account         
maintained with such Book-Entry Transfer Facility) as promptly as practicable   
after the Exchange Date.                                                        

CERTAIN CONDITIONS TO THE EXCHANGE OFFER                                        

   Notwithstanding any other provision of the Exchange Offer, or any extension
of the Exchange Offer, the Issuers shall not be required to accept for exchange,
or to issue Exchange Debentures in exchange for, any Senior Discount Debentures 
and may terminate or amend the Exchange Offer (by oral or written notice to the 
Exchange Agent or by a timely press release) if at any time before the          
acceptance of such Senior Discount Debentures for exchange or the exchange of   
the Exchange Debentures for such Senior Discount Debentures, any of the         
following conditions exist:                                                     

        (a) any action or proceeding is instituted or threatened in any court or
by or before any governmental agency or regulatory authority or any     
injunction, order or decree is issued with respect to the Exchange Offer
which, in the sole judgment of the Issuers, might materially impair the 
    ability of the Issuers to proceed with the Exchange Offer or have a material
adverse effect on the contemplated benefits of the Exchange Offer to the
Issuers; or                                                             

        (b) any change (or any development involving a prospective change) shall
have occurred or be threatened in the business, properties, assets,     
liabilities, financial condition, operations, results of operations or  
 prospects of the Issuers that is or may be adverse to the Issuers, or the
Issuers shall have become aware of facts that have or may have adverse  
   significance with respect to the value of the Senior Discount Debentures or
the Exchange Debentures or that may materially impair the contemplated  
benefits of the Exchange Offer to the Issuers; or                       

   (c) any law, rule or regulation or applicable interpretation of the
    Staff is issued or promulgated which, in the good faith determination of the
Issuers, does not permit the Issuers to effect the Exchange Offer; or   

       (d) any governmental approval has not been obtained, which approval the
  Issuers, in their sole discretion, deems necessary for the consummation of
the Exchange Offer; or                                                  

        (e) there shall have been proposed, adopted or enacted any law, statute,
 rule or regulation (or an amendment to any existing law, statute, rule or
regulation) which, in the sole judgment of the Issuers, might materially
    impair the ability of the Issuers to proceed with the Exchange Offer or have
    a material adverse effect on the contemplated benefits of the Exchange Offer
to the Issuers; or                                                      

48

424B3
50th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 50th
   (f) there shall occur a change in the current interpretation by the
Staff of the Commission which permits the Exchange Debentures issued    
    pursuant to the Exchange Offer in exchange for Senior Discount Debentures to
  be offered for resale, resold and otherwise transferred by holders thereof
    (other than any such holder that is a broker-dealer or an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act) without
  compliance with the registration and prospectus delivery provisions of the
 Securities Act provided that such Exchange Debentures are acquired in the
ordinary course of such holders' business and such holders have no      
arrangement with any person to participate in the distribution of such  
Exchange Debentures.                                                    

   The Issuers expressly reserve the right to terminate the Exchange Offer and
not accept for exchange any Senior Discount Debentures upon the occurrence of   
any of the foregoing conditions. In addition, the Issuers may amend the Exchange
Offer at any time prior to the Expiration Date if any of the conditions set     
forth above occur. Moreover, regardless of whether any of such conditions has   
occurred, the Issuers may amend the Exchange Offer in any manner which, in its  
good faith judgment, is advantageous to holders of the Senior Discount          
Debentures.                                                                     

   The foregoing conditions are for the sole benefit of the Issuers and may be
asserted by the Issuers regardless of the circumstances giving rise to any such 
condition or may be waived by the Issuers in whole or in part at any time and   
from time to time in their sole discretion. The failure by the Issuers at any   
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be    
asserted at any time and from time to time.                                     

 In addition, the Issuers will not accept for exchange any Senior Discount
Debentures tendered, and no Exchange Debentures will be issued in exchange for  
any such Senior Discount Debentures, if at such time any stop order shall be    
threatened or in effect with respect to the Registration Statement of which this
Prospectus constitutes a part or the qualification of the Indenture under the   
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). In any such
event the Issuers are required to use their best efforts to obtain the          
withdrawal of any stop order at the earliest possible time.                     

  The Exchange Offer is not conditioned upon any minimum principal amount of
Senior Discount Debentures being tendered for exchange.                         

EXCHANGE AGENT                                                                  

  United States Trust Company of New York has been appointed as the Exchange
Agent for the Exchange Offer. All executed Letters of Transmittal should be     
directed to the Exchange Agent the addresses set forth below:                   

                                                                [Download Table]
                                                                                   
BY HAND UP TO 4:30 PM:                      United States Trust Company of New York
                                            111 Broadway                           
                                            Lower Level                            
                                            New York, New York 10006               
                                            Attention: Corporate Trust Services    
                                            Telephone: 1(800) 548-6565             
                                            Facsimile: (212) 780-0592              

BY OVERNIGHT COURIER AND BY HAND            United States Trust Company of New York
AFTER 4:30 PM ON THE EXPIRATION DATE ONLY:  770 Broadway, 13th Floor               
                                            New York, New York 10003               
                                            Attention: Corporate Trust Services    
                                            Telephone: 1(800) 548-6565             
                                            Facsimile: (212) 780-0592              

49

424B3
51st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 51st
                                                                [Download Table]
                                                                             
BY REGISTERED OR CERTIFIED MAIL:  United States Trust Company of New York    
                                  Post Office Box 844                        
                                  New York, New York 10276-0844              
                                  Attention: Corporate Trust Services, Cooper
                                  Station                                    
                                  Telephone: 1(800) 548-6565                 
                                  Facsimile: (212) 780-0592                  

Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notices of     
Guaranteed Delivery should be directed to the Exchange Agent at the address and 
telephone number set forth above.                                               

 DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF
INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT     
CONSTITUTE A VALID DELIVERY.                                                    

SOLICITATION OF TENDERS; FEES AND EXPENSES                                      

The Issuers have not retained any dealer-manager in connection with the 
Exchange Offer and will not make any payments to brokers, dealers or others     
soliciting acceptances of the Exchange Offer. The Issuers, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.           

  The estimated cash expenses to be incurred in connection with the Exchange
Offer will be paid by the Issuers and are estimated in the aggregate to be      
approximately $135,000 which includes fees and expenses of the Exchange Agent,  
Trustee, registration fees, accounting, legal, printing and related fees and    
expenses.                                                                       

No person has been authorized to give any information or to make any    
representations in connection with the Exchange Offer other than those contained
in this Prospectus. If given or made, such information or representation should 
not be relied upon as having been authorized by the Issuers.                    

Neither the delivery of this Prospectus nor any exchange made hereunder 
shall, under any circumstances, create any implication that there has been no   
change in the affairs of the Issuers since the respective dates as of which     
information is given herein. The Exchange Offer is not being made to (nor will  
tenders be accepted from or on behalf of) holders of Senior Discount Debentures 
in any jurisdiction in which the making of the Exchange Offer or the acceptance 
thereof would not be in compliance with the laws of such jurisdiction. However, 
the Issuers may, at their discretion, take such action as it may deem necessary 
to make the Exchange Offer in any such jurisdiction and extend the Exchange     
Offer to holders of Senior Discount Debentures in such jurisdiction.            

TRANSFER TAXES                                                                  

   The Issuers will pay all transfer taxes, if any, applicable to the exchange
of Senior Discount Debentures pursuant to the Exchange Offer. If, however,      
certificates representing Exchange Debentures or Senior Discount Debentures for 
principal amounts not tendered or accepted for exchange are to be delivered to, 
or are to be issued in the name of, any person other than the registered holder 
of the Senior Discount Debentures tendered, or if tendered Senior Discount      
Debentures are registered in the name of any person other than the person       
signing the Letter of Transmittal, or if a transfer tax is imposed for any      
reason other than the exchange of Senior Discount Debentures pursuant to the    
Exchange Offer, then the amount of any such transfer taxes (whether imposed on  
the registered holder or any other person) will be payable by the tendering     
holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with the Letter of Transmittal, the amount of such transfer    
taxes will be billed directly to such tendering holder.                         

50

424B3
52nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 52nd
ACCOUNTING TREATMENT                                                            

    The Exchange Debentures will be recorded at the carrying value of the Senior
Discount Debentures as reflected in the Company's accounting records on the     
Exchange Date. Accordingly, no gain or loss for accounting purposes will be     
recognized by the Issuers upon the exchange of Exchange Debentures for Senior   
Discount Debentures. Expenses incurred in connection with the issuance of the   
Exchange Debentures will be amortized over the term of the Exchange Debentures. 

CONSEQUENCES OF FAILURE TO EXCHANGE                                             

Holders of Senior Discount Debentures who do not exchange their Senior  
Discount Debentures for Exchange Debentures pursuant to the Exchange Offer will 
continue to be subject to the restrictions on transfer of such Senior Discount  
Debentures as set forth in the legend thereon. Senior Discount Debentures not   
exchanged pursuant to the Exchange Offer will continue to remain outstanding in 
accordance with their terms. In general, the Senior Discount Debentures may not 
be offered or sold unless registered under the Securities Act, except pursuant  
to an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Issuers do not currently anticipate that  
they will register the Senior Discount Debentures under the Securities Act.     
However, under certain limited circumstances the Issuers may be required to file
with the Commission a shelf registration statement to cover resales of the      
Senior Discount Debentures by the Holders thereof who satisfy certain conditions
relating to the provision of information in connection with such shelf          
registration statement. See "Description of Debentures--Registration Rights;    
Liquidated Damages."                                                            

Participation in the Exchange Offer is voluntary, and holders of Senior 
Discount Debentures should carefully consider whether to participate. Holders of
Senior Discount Debentures are urged to consult their financial and tax advisors
in making their own decision whether or not to tender their Senior Discount     
Debentures. See "Certain Federal Income Tax Consequences."                      

As a result of the making of, and upon acceptance for exchange of all   
validly tendered Senior Discount Debentures pursuant to the terms of, this      
Exchange Offer, the Issuers will have fulfilled a covenant contained in the     
Registration Rights Agreement. Holders of Senior Discount Debentures who do not 
tender their Senior Discount Debentures in the Exchange Offer will continue to  
hold such Senior Discount Debentures and will be entitled to all the rights and 
limitations applicable thereto under the Indenture, except for any such rights  
under the Registration Rights Agreement that by their terms terminate or cease  
to have further effectiveness as a result of the making of this Exchange Offer. 
To the extent that Senior Discount Debentures are tendered and accepted in the  
Exchange Offer, the trading market for untendered, or tendered but unaccepted,  
Senior Discount Debentures could be adversely affected. See "Risk               
Factors--Adverse Consequences of Failure to Exchange"                           

  The Issuers may in the future seek to acquire, subject to the terms of the
Indenture, untendered Senior Discount Debentures in open market or privately    
negotiated transactions, through subsequent exchange offers or otherwise. The   
terms of any such purchases or offers may differ form the terms of the Exchange 
Offer.                                                                          

RESALE OF EXCHANGE DEBENTURES                                                   

    The Issuers are making the Exchange Offer in reliance on the position of the
Staff of the Commission as set forth in certain interpretive letters addressed  
to third parties in other transactions. However, the Issuers have not sought    
their own interpretive letter and there can be no assurance that the Staff would
make a similar determination with respect to the Exchange Offer as it has in    
such interpretive letters to third parties. Based on these interpretations by   
the Staff, the Issuers believe that the Exchange Debentures issued pursuant to  
the Exchange Offer in exchange for Senior Discount Debentures may be offered for
resale, resold and otherwise transferred by a holder (other than any holder     
which is (i) an Affiliate of the Company or (ii) any broker-dealer that         
purchases Debentures from the Issuers to resell pursuant to Rule 144A or any    
other available exemption) without compliance with the registration and         
prospectus                                                                      

51

424B3
53rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 53rd
delivery provisions of the Securities Act, provided that such Exchange          
Debentures are acquired in the ordinary course of such holder's business and    
such holder has no arrangement or understanding with any person to participate  
in the distribution of such Exchange Debentures and neither such holder nor any 
other such person is engaging in or intends to engage in a distribution of such 
Exchange Debentures. However, any holder who is an Affiliate of the Company or  
who has an arrangement or understanding with respect to the distribution of the 
Exchange Debentures to be acquired pursuant to the Exchange Offer, or any       
broker-dealer who purchased Senior Discount Debentures from the Issuers to      
resell pursuant to Rule 144A or any other available exemption under the         
Securities Act (i) cannot rely on the applicable interpretations of the Staff   
and (ii) must comply with the registration and prospectus delivery requirements 
of the Securities Act. A broker-dealer who holds Senior Discount Debentures that
were acquired for its own account as a result of market-making or other trading 
activities may be deemed to be an "underwriter" within the meaning of the       
Securities Act and must, therefore, deliver a prospectus meeting the            
requirements of the Securities Act in connection with any resale of Exchange    
Debentures. Each such broker-dealer that receives Exchange Debentures for its   
own account in exchange for Senior Discount Debentures, where such Senior       
Discount Debentures were acquired by such broker-dealer as a result of          
market-making activities or other trading activities must acknowledge in the    
Letter of Transmittal that it will deliver a prospectus in connection with any  
resale of such Exchange Debentures. A secondary resale transaction in the United
States by a holder using the Exchange Offer to participate in a distribution of 
Senior Discount Debentures must be covered by an effective registration         
statement containing the selling security holder information required by Item   
507 of Regulation S-K. See "Plan of Distribution."                              

    In addition, to comply with the securities laws of certain jurisdictions, if
applicable, the Exchange Debentures may not be offered or sold unless they have 
been registered or qualified for sale in such jurisdiction or an exemption from 
registration or qualification is available and is complied with. The Issuers    
have agreed, pursuant to the Registration Rights Agreement and subject to       
certain specified limitations therein, to register or qualify the Exchange      
Debentures for offer or sale under the securities or blue sky laws of such      
jurisdictions as any holder of the Exchange Debentures reasonably requests. Such
registration or qualification may require the imposition of restrictions or     
conditions (including suitability requirements for offerees or purchasers) in   
connection with the offer or sale of any Exchange Debentures.                   

52

424B3
54th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 54th
BUSINESS

Grove Worldwide is a leading international designer, manufacturer and   
marketer of a comprehensive line of mobile hydraulic cranes, aerial work        
platforms and truck-mounted cranes. In North America, Grove Crane, the Company's
largest operating division, has a number one market position and a 43% market   
share. The Company's products are used in a wide variety of applications by     
commercial and residential building contractors, as well as by industrial,      
municipal and military end-users. The Company's products are marketed to        
independent equipment rental companies and directly to end-users under three    
widely recognized brand names--GROVE CRANE, GROVE MANLIFT and NATIONAL CRANE.   
The Company believes it has achieved a leading position in each of its principal
markets due to its: (i) strong brand name and reputation for quality products;  
(ii) superior customer service; (iii) established network of distributors; (iv) 
broad product line; and (v) commitment to superior engineering design and       
product innovation.                                                             

 The Company's products are sold in over 50 countries primarily through an
established, global network of approximately 240 independent distributors. The  
Company's major markets are North America (67% of fiscal 1997 new equipment     
sales), Europe (19% of fiscal 1997 new equipment sales), Africa and the Middle  
East (4% of fiscal 1997 new equipment sales), Asia (7% of fiscal 1997 new       
equipment sales) and Latin America (3% of fiscal 1997 new equipment sales). The 
Company markets its products through three operating divisions:                 

- GROVE CRANE (approximately 69% of fiscal 1997 net sales) designs and          
manufactures over 40 models of mobile hydraulic cranes. The Company's mobile
hydraulic cranes, which are used primarily in industrial, commercial and    
  public works construction, are capable of reaching maximum heights of 372 feet
  and lifting up to 300 tons. From fiscal 1993 to fiscal 1997, Grove Crane's net
sales (including acquisitions) increased from $290 million to $587 million, 
representing a CAGR of 19.4%.                                               

- GROVE MANLIFT (approximately 23% of fiscal 1997 net sales) designs and        
manufactures over 60 models of aerial work platforms. The Company's aerial  
work platforms, which are used primarily in industrial, commercial and      
construction applications, are capable of lifting people to maximum working 
  heights ranging from 19 to 131 feet. Aerial work platforms elevate workers and
 their materials more safely, quickly and easily than alternative methods such
as scaffolding and ladders. From fiscal 1993 to fiscal 1997, Grove Manlift's
  net sales (including acquisitions) increased from $57 million to $199 million,
representing a CAGR of 36.8%.                                               

- NATIONAL CRANE (approximately 8% of fiscal 1997 net sales) designs and        
manufactures over 14 models of telescoping and 14 models of articulating    
  truck-mounted cranes. The Company's telescoping and articulating cranes, which
are used primarily in industrial, commercial, public works and construction 
 applications, are capable of reaching maximum heights of 166 feet and lifting
up to 36 tons. Telescoping and articulating cranes are mounted on a standard
  truck chassis or on a pedestal at a fixed location. From fiscal 1993 to fiscal
1997, National Crane's net sales increased from $40 million to $71 million, 
representing a CAGR of 15.4%.                                               

53

424B3
55th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 55th
COMPETITIVE STRENGTHS                                                           

The Company believes that it benefits from the following competitive    
strengths:                                                                      

- LEADING MARKET POSITIONS. The Company believes that its three operating       
divisions have established a leading position in each of their principal    
markets.                                                                    

                                                        [Enlarge/Download Table]

                                                                                  MARKET                            
DIVISION             PRODUCTS                       PRINCIPAL MARKETS          POSITION(1)       MARKET SHARE(1)    
-------------------  -----------------------  -----------------------------  ----------------  -------------------  
                                                                                                                    
Grove Crane          Mobile Hydraulic Cranes  North America                               1                   43%(2)
                                              Europe (excluding Russia)                   2                   14%   

Grove Manlift        Aerial Work Platforms    North America                               3                   10%   
                                              Europe (excluding Russia)                   3                   16%   

National Crane       Truck-Mounted Cranes:    North America                               1                   43%   
                     Telescoping              North America                               4                   13%(3)
                     Articulating                                                                                   

- STRONG BRAND NAME AND REPUTATION FOR QUALITY PRODUCTS. The Company has created
significant brand equity as a result of its innovative designs, quality     
  products and product reliability. With over 100,000 units sold during the past
50 years, the Company believes that it currently has one of the industry's  
largest installed bases of cranes and aerial work platforms. The quality of 
the Company's products and the value of its brand name are reflected in the 
North American marketplace, where the Company believes that its cranes      
generally command premium prices and have higher residual values than       
comparable products manufactured by its competitors. For example, Grove     
Crane's products typically have residual values in excess of 50% of their   
original cost after five years, which management believes is significantly  
greater than the average residual value of its competitors' products.       

- SUPERIOR CUSTOMER SERVICE. The Company is committed to providing superior     
training, sales and service support to its distributors and end-users as a  
standard part of its sales and marketing effort. Management believes that no
 other major competitor matches the extent and quality of its customer support
services and that such services significantly contribute to the Company's   
ability to charge premium prices for its products. In addition, the Company 
 has focused on providing ready availability of service parts. For example, in
fiscal 1997, the Company shipped over 80% of its replacement parts worldwide
within 24 hours after receipt of an order. After-market sales for parts and 
  services accounted for 12% of the Company's net sales and 26% of gross profits
in fiscal 1997. Such sales typically have higher gross margins and are less 
cyclical than new equipment sales.                                          

- ESTABLISHED NETWORK OF DISTRIBUTORS. The Company benefits from an established 
base of approximately 240 independent distributors located in 50 countries  
  around the world. Over two-thirds of Grove Crane's North American distributors
  have sold the Company's products for over 10 years. The Company believes that,
in many cases, its products represent an important portion of its           
 distributors' business. Many of these distributors also represent Caterpillar
Inc. or Komatsu Ltd. and, as such, are considered among the best-capitalized
in the industry. Management believes that the strength of its distributor   
network is an important competitive advantage. For example, within twelve   
 months after acquiring the mobile hydraulic crane business of Krupp in August
1995, the Company leveraged Grove's brand name                              

------------------------                                                        
(1) All market share data are based on units shipped during fiscal 1997, except 
   for data on Grove Manlift's share of the North American and European aerial
    work platform markets, which are based on fiscal 1997 revenues. With respect
to aerial work platforms, management believes that because the Company  
 primarily competes in the North American and European markets for larger,
high-end aerial work platforms, comparisons based on revenues are more  
  appropriate. Market data were derived from management estimates including,
management assumptions regarding unit price.                            

(2) Does not include industrial cranes.                                         

(3) In the United States, the Company has a number three market position and a  
17% market share. National Crane has a nominal presence in the Canadian 
market for articulating cranes.                                         

54

424B3
56th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 56th
 and distribution network to increase annual sales in the United States of the
  cranes, formerly manufactured by Krupp, by 100% from approximately 40 units in
1995 to approximately 80 units in 1996.                                     

- BROAD PRODUCT LINE. The Company believes it has the broadest product line in  
the industry, with 10 product categories and over 120 models offered by its 
three operating divisions. Management believes the breadth of the Company's 
product offerings enables it to more effectively serve the equipment rental 
market, which management estimates represents approximately 80% of the      
  Company's net sales. The Company's broad product line allows it to satisfy the
rental market's demand for models addressing specific end-user needs, while 
also providing customers the opportunity to save on support, maintenance and
training costs by purchasing from a single manufacturer.                    

BUSINESS STRATEGY                                                               

As a result of the Acquisition, the Company is operated on a stand-alone
basis rather than as part of a larger diversified enterprise. The Company's     
management team expects to capitalize on the experience and expertise of new    
senior management as it implements the Operations Improvement Program in        
cooperation with the George Group Inc. (the "George Group"), an acquisition and 
management consulting firm that applies strategic and operations management     
expertise to manufacturing businesses. Management is led by Salvatore J. Bonanno
who joined the Company in March 1998 from Foamex International Inc., where he   
led an organizational restructuring designed to reduce manufacturing and        
overhead costs. The Company will implement the Operations Improvement Program   
and the other key elements of the Company's business strategy described below in
order to reach its objective of increased net sales and EBITDA.                 

- OPERATIONS IMPROVEMENT PROGRAM. The Company, in cooperation with the George   
  Group, has developed a comprehensive program which it believes will enable the
  Company to reduce its annual costs by approximately $35 million to $50 million
and achieve significant working capital efficiencies by fiscal 2001. The    
 Operations Improvement Program is intended to improve the Company's operating
efficiency and margins by: (i) rationalizing product lines; (ii) reducing   
manufacturing costs; and (iii) reducing selling, general and administrative 
  expenses. In addition, the Company believes the Operations Improvement Program
should enable it to reduce its working capital requirements by decreasing   
inventory levels by approximately $40 million to $50 million.               

- CONTINUE TO PROVIDE SUPERIOR PRODUCTS. The Company has maintained a commitment
to superior engineering design and technological innovation. The Company    
believes that it has the most extensive engineering capability in the crane 
industry, with an extensive engineering group focusing on developing        
innovative, high performance, low maintenance products that satisfy the     
demands of its customers. Together with the Company's manufacturing and     
marketing staff, these engineers seek to utilize new technologies and       
effectively introduce new products. For example, the Company has introduced 
lighter booms with greater lifting capacity, electronic controls that       
facilitate operations and product features that enhance safety and increase 
versatility. The Company believes that the greater sophistication of its    
products contributes to its ability to sustain higher residual values. The  
  Company intends to intensify its efforts to design products that meet evolving
 customer needs while reducing manufacturing costs and the period from product
conception to introduction.                                                 

- EXPAND EXISTING INTERNATIONAL BUSINESS. The Company intends to leverage its   
 significant brand equity and strong distribution network to opportunistically
  expand its existing international business. As an industry leader, the Company
believes it is well-positioned to increase sales internationally as         
 infrastructure development in existing and emerging markets stimulates demand
for cranes and aerial work platforms. In 1995, the Company expanded its     
  product offerings and strengthened its manufacturing and distribution presence
  in Europe by acquiring the mobile hydraulic crane business of Krupp in Germany
 and the aerial work platform business of Delta in France. In addition, all of
the Company's manufacturing                                                 

55

424B3
57th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 57th
  facilities have received ISO 9001 certifications, which enhances the Company's
international marketing efforts.                                            

- CAPITALIZE ON THE GROWTH OF THE WORLDWIDE AERIAL WORK PLATFORM MARKET. The    
Company seeks to capitalize on the increasing recognition by end-users      
worldwide that aerial work platforms are economical and safe alternatives to
scaffolding and ladders. The North American aerial work platform industry   
 experienced a CAGR in total unit shipments from 1992 to 1997 of 32%. In 1997,
  approximately 41,000 aerial work platforms were shipped in North America while
only 13,000 units were shipped in markets outside of North America. The     
Company expects to generate increased sales of aerial work platforms in     
international markets as international end-users recognize the productivity 
and safety advantages of aerial work platforms.                             

THE OPERATIONS IMPROVEMENT PROGRAM                                              

    The Company, in cooperation with George Group, has developed a comprehensive
program which it believes will enable it to reduce its annual costs by          
approximately $35 million to $50 million and achieve significant working capital
efficiencies by fiscal 2001. The Operations Improvement Program is intended to  
improve the Company's operating efficiency and its margins by: (i) rationalizing
product lines; (ii) reducing manufacturing costs; and (iii) reducing selling,   
general and administrative expenses. In addition, the Company believes the      
Operations Improvement Program should enable it to reduce its working capital   
requirements by decreasing inventory levels by approximately $40 million to $50 
million. It is expected that these cost savings will be offset by non-recurring 
costs of up to approximately $25 million associated with the implementation of  
the Operations Improvement Program. Estimates of potential cost savings and     
implementation costs are inherently uncertain and the description of the        
Operations Improvement Program should be read in conjunction with "Special Note 
Regarding Forward Looking Statements" and "Risk Factors--Realization of Benefits
of Operations Improvement Program." The key components of the Operations        
Improvement Program are as follows:                                             

   RATIONALIZE PRODUCT LINES.  The Company expects to implement a product line
rationalization program which will position it to reduce both operating costs   
and working capital requirements without diminishing the advantages derived from
its broad product line. The Company will monitor product line data to enable it 
to simplify its engineering processes by reducing the number of models and      
manufacturing components, standardizing options and using platform design       
concepts. The Company believes this program will enable it to eliminate certain 
models that have low demand, low margins or features and capabilities that are  
redundant with other models. The product line rationalization program will      
identify key product requirements by different customer groups within each of   
the market segments which the Company serves. Such information will be used to  
define a more focused product portfolio which, when compared to the existing    
product lines, will help the Company identify opportunities to reduce           
components, standardize features and eliminate models. Management believes that 
these actions will (i) reduce inventory, (ii) increase labor productivity, (iii)
improve purchasing leverage and (iv) help reduce selling, general and           
administrative expenses without negatively impacting revenue.                   

  REDUCE MANUFACTURING COSTS.  Management intends to reduce the annual costs
of goods sold by approximately $25 million to $30 million by fiscal 2001 by     
rationalizing its product line and undertaking the following initiatives to     
improve the Company's manufacturing process:                                    

- Accelerate the recently initiated DFMA program and continue to implement value
  analysis programs. These established techniques are designed to lower material
and labor costs by redesigning products, incorporating more standardized    
  components and allowing a simplified fabrication and assembly process. Initial
efforts during fiscal 1997 resulted in a 28% reduction in labor costs for a 
test model.                                                                 

- Consolidate sourcing by using fewer suppliers to fulfill the Company's global 
requirements. As a result of its product rationalization and DFMA programs, 
the Company expects to purchase a greater volume                            

56

424B3
58th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 58th
of fewer components, enabling it to significantly reduce its vendor base and
benefit from increased sourcing leverage.                                   

- Implement other procedures to reduce manufacturing costs, including: (i)      
  improving planning and scheduling by introducing continuous flow manufacturing
principles and integrating the Company's new management information system; 
(ii) improving product flow and reducing cycle time in order to increase    
manufacturing flexibility and capacity; and (iii) shifting the production of
  certain models and components to facilities where they can be more efficiently
produced.                                                                   

    REDUCE SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Management believes it
can reduce annual selling, general and administrative expenses by approximately 
$10 million to $20 million by fiscal 2001 by reducing redundant functions across
facilities, utilizing the Company's new management information system and       
streamlining existing business processes, including redesigning sales and       
administrative functions. See "Business--Management Information System."        

REDUCE WORKING CAPITAL REQUIREMENTS.  Management believes the Operations
Improvement Program will enable the Company to reduce its working capital       
requirements by reducing inventory levels by approximately $40 million to $50   
million. The Company expects to reduce its inventory levels primarily as a      
result of: (i) improved manufacturing processes; (ii) the shifting of production
of certain models and components to facilities where they can be more           
efficiently produced; and (iii) product rationalization.                        

INDUSTRY OVERVIEW                                                               

    The markets in which the Company competes include North America, (defined as
the United States and Canada), Latin America (defined as Central and South      
America), Europe, Africa, the Middle East and Asia. All statistical and         
numerical information set forth below are based on industry data, which the     
Company has not independently verified, together with management estimates and  
assumptions regarding unit prices.                                              

MOBILE HYDRAULIC CRANES (GROVE CRANE)                                   

    The mobile hydraulic crane business was a $2.8 billion industry worldwide in
1997 with a demand for approximately 11,000 machines. Demand in this industry is
primarily dependent upon industrial and construction activity and replacement   
cycles for existing cranes. Because of the different demands of each project,   
such as boom lengths and lifting capacities, contractors, particularly those in 
North America, tend to rent specific machines as needed rather than own a fleet 
of machines with varying capabilities. Management estimates that 80% of all new 
sales in North America are made to the equipment rental market. In periods of   
economic recovery, rising end-user demand is initially reflected in rising      
rental fleet utilization. Then, as rental fleet utilization reaches a maximum   
level, new orders for cranes generally tend to increase.                        

In 1997, demand for mobile hydraulic cranes in North America was        
approximately 2,400 machines, representing 22% of global demand. From 1992 to   
1997, demand grew at a CAGR of 12.6%. The Company believes that, based on the   
superior reputation of its products as well as the Company's strong network of  
distributors, it is well positioned to capitalize on any growth in the North    
American mobile hydraulic crane market. In addition, Grove's product line, which
is the broadest in the industry, enables rental fleet owners to provide a wide  
range of models for end-users while maintaining low after-market maintenance and
service costs by buying from a single manufacturer. See "--Competitive          
Strengths."                                                                     

Demand for mobile hydraulic cranes in Europe was approximately 1,700    
machines in 1997, representing 16% of global demand. Since 1992, demand in      
Europe has experienced little growth. European construction activity has        
remained at recessionary levels for the last five years. The Company believes   
that this has been due initially to a cyclical downturn and more recently to    
fiscal tightening as European                                                   

57

424B3
59th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 59th
countries attempt to meet the budget deficit targets established by the         
Maastricht Treaty. The Company believes that it is well positioned to           
participate in any cyclical improvements in Europe due to its local             
manufacturing operations, strong local distribution and its established market  
position in the region. The Company believes that European growth could act as a
buffer to a possible future economic downturn in the United States.             

    In addition to North America and Europe, markets for mobile hydraulic cranes
include Africa, the Middle East, Asia, notably Japan, and Latin America. These  
markets represented 62% of global demand in 1997 with approximately 6,800 units 
shipped. The Japanese market represents approximately 29% of the worldwide      
market on a unit basis, with approximately 3,200 machines sold in 1997. The     
Company, like other crane manufacturers in the United States and Europe, has    
chosen not to compete in Japan due to economic fundamentals and certain barriers
to entry. Japanese crane manufacturers generally do not compete in the United   
States or Europe. The Chinese market accounted for approximately 2,100 machines 
sold in 1997, the majority of which were manufactured locally. However, the     
People's Republic of China has been an emerging market for the Company, where it
has sold an average of 8 units per year since 1995, representing approximately  
10% of imported units.                                                          

AERIAL WORK PLATFORMS (GROVE MANLIFT)                                   

 The aerial work platform industry in North America has developed over the
past 20 years as end-users realize that aerial work platforms are an efficient  
and safer alternative to scaffolding and ladders. The products are used for     
indoor or outdoor applications in a variety of construction, industrial and     
commercial settings which require workers to be lifted to high elevations. Rapid
growth of the industry has been due to efficiency considerations as well as     
regulations mandating safety standards for people working in elevated areas. The
Company believes that approximately 90% of all aerial work platform sales in    
North America are to rental fleets. The rental market represents such a large   
percentage of the overall market because: (i) contractors require workers to be 
elevated only for limited periods during a given job, and different jobs require
different platform heights, making ownership of a single specification unit     
uneconomical and (ii) industrial customers increasingly outsource their         
equipment requirements to rental providers.                                     

  In terms of market penetration of aerial work platforms, the United States
is the most advanced market in the world, indicating strong fundamental growth  
potential for the industry outside North America. Since 1992, demand in North   
America has grown at a CAGR of 32%. In 1997, demand for aerial work platforms in
North America was approximately 41,000 machines, representing 76% of global     
demand. The demand for aerial work platforms in the worldwide market, excluding 
North America, in comparison, was only 13,000 units in 1997. The Company expects
increased sales of aerial work platforms in international markets, where the    
number of aerial work platforms remains significantly lower than in the United  
States.                                                                         

The Company expects the aerial work platform division to be an important
factor in its long-term growth strategy. Growth in the aerial work platform     
market is expected to be driven primarily by new product introductions and      
applications, as well as continued compliance in the United States with         
government-mandated safety regulations. Furthermore, as foreign governments     
adopt stricter safety regulations and foreign end-users realize the efficiency  
benefits of using aerial work platforms, the Company expects to capture its     
share of international growth given its strong existing international market    
presence and distribution capabilities, particularly in Europe.                 

TRUCK-MOUNTED CRANES (NATIONAL CRANE)                                   

 The truck-mounted crane division manufactures both telescoping cranes and
articulating cranes. These cranes are used primarily by contractors engaged in  
the industrial, commercial, public works and residential construction, railroad 
and oil field service industries and in maintenance applications to lift        

58

424B3
60th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 60th
materials or personnel at the same job site or to move material to another job  
site or location. In 1997, demand for truck-mounted telescoping cranes in North 
America was approximately 2,100 machines, representing 48% of total North       
American demand. Since 1992, demand has grown at a CAGR of 16%. Demand for      
truck-mounted articulating cranes in North America was approximately 2,300      
machines in 1997, representing 52% of total North American demand. Since 1992,  
demand has grown at a CAGR of 5%. Telescoping cranes are more popular in the    
United States while articulating cranes are more popular in Europe.             

PRODUCTS                                                                        

MOBILE HYDRAULIC CRANES (GROVE CRANE)                                   

 Grove Crane manufactures over 40 models of mobile hydraulic cranes, which
are used primarily in the industrial, commercial and public works construction  
industries and in maintenance applications, to lift material at job sites. There
are four main types of mobile hydraulic cranes: (i) Rough-Terrain, (ii) All-    
Terrain, (iii) Truck-Mounted and (iv) Industrial. In addition, Grove Crane      
produces three models of specialty cranes for the U.S. Department of Defence.   

  ROUGH-TERRAIN CRANES are designed to lift materials and equipment on rough
or uneven terrain. These cranes cannot be driven on highways, and, accordingly, 
must be transported by truck to a work site. Grove Crane produces 15 models of  
rough-terrain cranes, believed to be the broadest such line in the world,       
capable of working heights of up to 208 feet and maximum load capacities of up  
to 100 tons.                                                                    

ALL-TERRAIN CRANES are versatile cranes designed to lift materials and  
equipment on rough or uneven terrain and yet are highly maneuverable and capable
of highway speeds. Grove Crane produces 11 models of all-terrain cranes capable 
of working heights of up to 372 feet and maximum load capacities of up to 300   
tons.                                                                           

 TRUCK-MOUNTED CRANES are designed to provide simple set-up and long reach
high capacity booms and are capable of traveling from site to site at highway   
speeds. These cranes are suitable for urban and suburban uses. Grove Crane      
produces 10 models of truck-mounted cranes, believed to be the broadest such    
line in the world, capable of working heights of up to 270 feet and maximum load
capacities of up to 150 tons.                                                   

    INDUSTRIAL CRANES are designed primarily for plant maintenance, storage yard
and material handling jobs. Grove Crane produces 5 models of industrial cranes  
capable of working heights of up to 85 feet and maximum load capacities of up to
18 tons.                                                                        

AERIAL WORK PLATFORMS (GROVE MANLIFT)                                   

Grove Manlift manufactures over 60 models of aerial work platforms which
elevate workers and their materials more safely, quickly and easily than        
alternative methods such as scaffolding and ladders. The work platform is       
mounted on either a telescoping and/or articulating boom or on a vertical       
lifting scissor mechanism. The boom truck lifting mechanism is mounted on a     
chassis powered by electric motors or gas, diesel or propane engines. The       
Company manufactures four types of aerial work platforms: (i) Scissor Lift, (ii)
Articulating Boom, (iii) Telescoping Boom and (iv) Vertical Mast.               

   SCISSOR LIFTS have a work platform that is mounted on top of a scissor type
lifting mechanism. The lifts are designed to set up and move quickly from job to
job in construction, industrial and commercial settings. Grove Manlift produces 
19 models of scissor lifts capable of working heights of up to 46 feet and      
maximum load capacities of up to 2,000 pounds.                                  

ARTICULATING BOOM LIFTS have a work platform that is mounted on top of a
jointed boom. These lifts are used primarily in the industrial and construction 
settings where articulation allows users to access elevated                     

59

424B3
61st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 61st
areas over machines or structural obstacles. Grove Manlift produces 20 models of
articulating boom lifts capable of working heights of up to 131 feet and maximum
load capacities of up to 800 pounds.                                            

TELESCOPING BOOM LIFTS have a work platform that is mounted on top of a 
telescoping boom and designed for strength, rigidity and resistance to          
deflection. These lifts are used primarily outdoors in residential, commercial  
and industrial construction and maintenance projects. Grove Manlift produces 11 
models of telescoping boom lifts capable of working heights of up to 116 feet   
and maximum load capacities of up to 700 pounds.                                

 VERTICAL MAST LIFTS have work platforms that are either mounted on top of
fork-lift type devices or on push-around type devices. These lifts are designed 
for use by workers for general purpose indoor maintenance. Some models are for  
vertical lifting applications only, while others also have out-reach            
capabilities. Grove Manlift produces 16 models of vertical mast lifts capable of
working heights of up to 46 feet and maximum load capacities of up to 500       
pounds.                                                                         

TRUCK-MOUNTED CRANES (NATIONAL CRANE)                                   

    National Crane manufactures 24 models of truck-mounted cranes used primarily
by contractors engaged in the industrial, commercial, public works and          
residential construction, railroad and oil field service industries and in      
maintenance applications to lift materials or personnel at the same job site or 
to move material to another job site or location. The Company manufactures two  
types of truck-mounted cranes: telescoping and articulating. The Company also   
manufactures four models of pedestal-mounted, fixed location cranes.            

   TELESCOPING CRANES are used primarily for lifting material and personnel on
a job site. National Crane produces 10 models of truck-mounted telescoping      
cranes capable of working heights of up to 166 feet and maximum load capacities 
of up to 36 tons.                                                               

 ARTICULATING CRANES are used primarily to load and unload truck beds at a
job site. National Crane produces 14 models of truck-mounted articulating cranes
capable of working heights of up to 71 feet and maximum load capacities of up to
28 tons.                                                                        

OTHER CRANES include four models of pedestal-mounted cranes designed for
docks, factories, yards, and other areas where fixed, stationary lifting is     
required. These cranes are capable of working heights of up to 90 feet and      
maximum load capacities of up to 23 tons.                                       

MARKETING AND DISTRIBUTION                                                      

GENERAL                                                                 

The Company benefits from an established base of approximately 240      
independent distributors located in 50 countries around the world. Over two     
thirds of Grove Crane's North American distributors have been with the Company  
for over 10 years. While the Company's distributors generally do not sell the   
Company's products exclusively, management believes that, in many cases, the    
Company's products represent a significant portion of the distributor's         
business. Many of Grove Crane's distributors also represent Caterpillar Inc. or 
Komatsu Ltd. and, as such, are considered among the best-capitalized in the     
industry. Management believes that the strength of its distributor network is an
important competitive advantage. For example, within twelve months after        
acquiring the mobile hydraulic crane business of Krupp in August 1995, the      
Company leveraged its brand name and distribution network to increase annual    
sales from approximately 40 units to approximately 80 units of the cranes       
formerly manufactured by Krupp.                                                 

60

424B3
62nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 62nd
MOBILE HYDRAULIC CRANES                                                 

The Company distributes its mobile hydraulic cranes primarily through a 
global network of independent distributors, except in Germany, France and the   
United Kingdom, where the Company has its own distributors. In addition, the    
Company sells directly to certain large corporate customers and the United      
States Government. The Company believes that its distribution network is one of 
its key strengths.                                                              

  In fiscal 1997, 67% of the Company's unit sales of mobile hydraulic cranes
were derived from units shipped to North American and Latin American            
distributors. The Company has longstanding relationships with its 45 North      
American and 24 Latin American distributors, of which over 40% have been        
distributors for the Company for over 25 years. Shipments to Europe comprised   
approximately 21% of the Company's shipments in fiscal 1997 through three       
Company stores, located in the U.K., Germany and France, and 42 third-party     
distributors. In fiscal 1997, shipments to Asia, Africa and the Middle East     
comprised approximately 5%, 4%, and 2% of the Company's unit shipments,         
respectively.                                                                   

AERIAL WORK PLATFORMS                                                   

 In fiscal 1997, aerial work platforms sold by North American distributors
represented approximately 63% of the Company's unit sales of aerial work        
platforms. The Company has 65 authorized distributors in 187 locations across   
North America providing coverage in most major markets. To take advantage of    
growth in the aerial work platform market, the Company has increased the number 
of North American distributors by 18% since 1992. Approximately 50% of the      
Company's North American distributors carry only the Company's aerial work      
platforms.                                                                      

  In fiscal 1997, sales to customers in Europe represented approximately 24%
of the Company's units shipped of aerial work platforms. The Company's 13       
European distributors include independent and Company-owned distributors. Three 
Company locations in the U.K., Germany and France and a major independent       
distributor in the Netherlands collectively accounted for more than 50% of      
aerial work platform net sales in Europe. Asian customers purchased             
approximately 11% of the Company's units shipped in fiscal 1997. Asia is        
supported by authorized distributors located in Hong Kong, India, Indonesia,    
Korea, the Philippines, Singapore/Malaysia, Taiwan, Thailand and Vietnam and a  
Company-owned distribution facility in Penrith, Australia. Latin American       
customers purchased approximately 2% of the Company's units shipped in fiscal   
1997. African and Middle Eastern customers purchased less than 1% of the        
Company's units shipped in fiscal 1997.                                         

TRUCK-MOUNTED CRANES                                                    

The Company's North American truck-mounted crane distribution network   
consists of 66 distributors that carry multiple product lines, the majority of  
which maintain rental fleets. In addition, the Company has eight distributors   
that focus either on limited product lines and/or market niches. Certain of the 
Company's "niche" distributors primarily sell to railroads and are a particular 
strength of the Company's customer base. Most of these distributors have been   
with the Company for over 15 years. The Company believes that these distributors
account for a significant portion of the U.S. railroad market for articulating  
truck-mounted cranes. The Company sells directly to E.I. du Pont de Nemours and 
Company, The Hertz Corporation, the Tennessee Valley Authority, Union Pacific   
Railroad Corporation and U.S. Rentals, Inc. In fiscal 1997, direct sales        
accounted for 9% of all truck-mounted cranes sold by the Company.               

END-USERS AND CUSTOMERS                                                         

Mobile hydraulic cranes are primarily used by contractors engaged in    
industrial, commercial and public works construction and for plant maintenance  
and material handling jobs. Aerial work platforms are primarily used by         
contractors engaged in residential, commercial and industrial construction and  
in maintenance projects. Truck-mounted cranes are primarily used by contractors 
engaged in the industrial,                                                      

61

424B3
63rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 63rd
commercial, public works and residential construction, railroad and oil field   
service industries and in maintenance applications to lift materials or         
personnel at the same job site or to move material to another job site or       
location. In addition, U.S. railroad companies and U.S. equipment rental        
companies use the Company's truck-mounted cranes. Mobile hydraulic cranes and   
aerial work platforms are also sold to the U.S. Department of Defense and other 
government agencies.                                                            

For the fiscal years ended September 30, 1995, September 28, 1996 and   
September 27, 1997, approximately 20%, 20% and 19%, respectively, of the        
Company's revenues were generated from sales to six major customers, with no one
customer accounting for more than 5% of total revenue. Approximately 15% and 31%
of the outstanding accounts and notes receivable balance as of September 28,    
1996 and September 27, 1997, respectively, were due from these customers.       

DEALER FINANCING PROGRAM                                                        

The Company offers certain of its distributors up to 360-day inventory  
financing. Units sold under this program generate secured notes receivable,     
which the Company sells, from time to time, to third party financial            
institutions. The terms of the notes provide that if the distributor sells the  
equipment prior to the maturity of the notes, the notes must be repaid          
immediately along with any interest accrued thereon.                            

In June 1998, the Company entered into an agreeement with a third-party 
financial institution to sell up to $50.0 million of notes receivable generated 
from sales of mobile hydraulic cranes and aerial work platforms on credit terms 
of up to 360 days on a revolving basis. The third-party financial institution   
purchases the notes receivable at face value on a 90% non-recourse basis. The   
agreement requires the Company to purchase credit insurance on behalf of the    
third-party to insure the 90% risk assumed by the third-party financial         
institution. The Company retains 10% of the credit risk. See Note 4 of Notes to 
Unaudited Condensed Financial Statements.                                       

ENGINEERING AND DESIGN                                                          

   The Company believes that its engineering and design capabilities are among
the Company's major strengths. The Company's team of engineers focuses on       
developing innovative, high performance, low maintenance products that create   
significant brand loyalty among customers. Design engineers work closely with   
the Company's manufacturing and marketing staff, enabling the Company to quickly
identify changing end-user requirements, implement new technologies and         
effectively introduce product innovations. As part of its ongoing commitment to 
provide superior products, the Company intends to intensify its efforts to      
design products that meet evolving customer demands and reduce the period from  
product conception to product introduction.                                     

    The Company believes its investment in systems and techniques will enable it
to continually improve its cost position in the industry. The Company is now    
positioned to realize the benefits of this investment as it reduces costs,      
improves productivity and product development times, and enhances inventory     
management.                                                                     

MANUFACTURING AND FACILITIES                                                    

The Company maintains major manufacturing and engineering facilities in 
Shady Grove, Pennsylvania, Sunderland, United Kingdom, and Wilhelmshaven,       
Germany, as well as plants in Tonneins, France and Waverly, Nebraska. All such  
manufacturing facilities are ISO 9001 certified. The Company also maintains     
service facilities in the United Kingdom, Germany and France, and offices in the
United Arab Emirates, Singapore, Australia and China.                           

62

424B3
64th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 64th
    The following table outlines the principal facilities owned or leased by the
Company:                                                                        

                                                        [Enlarge/Download Table]

                                                                                     APPROXIMATE                 
FACILITY LOCATION                                       TYPE OF FACILITY            SQUARE FOOTAGE  OWNED/LEASED 
------------------------------------------------------  --------------------------  --------------  -------------
                                                                                                                 
Shady Grove, Pennsylvania                               Manufacturing/Headquarters     1,165,600        owned    
Quincy, Pennsylvania                                    Manufacturing                     40,100        owned    
Chambersburg, Pennsylvania                              Office/Storage                    81,000        owned    
Waverly, Nebraska                                       Manufacturing/Headquarters       303,800        owned    
Sunderland, U.K.(1)                                     Manufacturing/Storage/Office      775,000      leased    
Wilhelmshaven, Germany (2)                              Manufacturing/Storage/Office      410,400   owned/leased 
                                                        Storage/Office/Field                                     
Langenfeld, Germany (3)                                 Testing                           80,300       leased    
Tonneins, France (4)                                    Manufacturing/Storage/Office      101,900   owned/leased 
Osny, France                                            Storage/Repair/Office             43,000        owned    

------------------------                                                        

(1) The lease expires on April 30, 2000. The Company has an option to purchase  
 the facility at any time prior to February 27, 1999 for a nominal amount.
   The Company plans to close this facility as a result of recurring operating
    losses. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Liquidity and Capital Resources."                 

(2) The buildings are owned by the Company and the underlying land is leased    
from the Federal Republic of Germany and Friedrich Krupp AG Hoesch Krupp
  ("Krupp"). The lease with the Federal Republic of Germany expires December
31, 2043 and the lease with Krupp December 31, 2042, respectively.      

(3) The lease for the Langenfeld, Germany facility is automatically renewed     
annually unless either party gives notice of termination.               

(4) Includes two facilities, one of which is leased. The lease expires on       
November 29, 2004.                                                      

    To the extent any such properties are leased, the Company expects to be able
to renew such leases or lease comparable facilities on terms commercially       
acceptable to the Company. Management believes that the Company's facilities are
suitable for its operations and provide sufficient capacity to meet the         
Company's requirements for the foreseeable future.                              

   The obligations of the Company under the New Credit Facility are secured by
a mortgage on certain of the Company's owned, domestic real properties.         

COMPETITION                                                                     

The markets in which the Company operates are highly competitive. The   
Company faces competition in each of its operating divisions from a number of   
manufacturers. Competition in each of the Company's markets generally is based  
on product design, overall product quality, maintenance costs and price. The    
Company believes it benefits from the following competitive advantages: (i)     
leading market positions; (ii) a strong brand name and reputation for quality   
products and service; (iii) an established network of global distributors; (iv) 
a broad product line and (v) a commitment to engineering design and product     
innovation. The following table sets forth the Company's primary competitors in 
each of its operating divisions:                                                

                                                        [Enlarge/Download Table]

OPERATING                                                                                                        
DIVISIONS                  PRODUCTS                                  PRIMARY COMPETITORS                         
------------------  -----------------------  --------------------------------------------------------------------
                                                                                                                 
Grove Crane         Mobile Hydraulic Cranes  Liebherr Werk Nenzing, Link-Belt Construction Equipment Co.,        
                                             Mannesman DeMag, Tadano Ltd. and Terex Corporation ("Terex")        

Grove Manlift       Aerial Work Platforms    Genie Industries, JLG Industries, Inc., Sky Jack Inc., Snorkel      
                                             Company, Terex and UpRight, a division of W.R. Carpenter North      
                                             America, Inc.                                                       

National Crane      Truck-Mounted Cranes     Fassi Gru Idrauliche SpA, Hiab BV, Iowa Mold Tooling Co. Inc. (IMT),
                                             Manitex, Inc., Palfinger GmbH, Pioneer Truck Cranes, manufactured by
                                             Pioneer Engineering Corporation, Terex and USTC Inc.                

RAW MATERIALS                                                                   

Principal materials used by the Company in its various manufacturing    
processes include steel, castings, engines, tires, axles, transmissions,        
hydraulic valves and controls, hydraulic cylinders, electric controls and       
motors, and a variety of other fabricated or manufactured items. Substantially  
all materials are normally                                                      

63

424B3
65th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 65th
available from multiple suppliers. Current and potential suppliers are evaluated
on a regular basis on their ability to meet the Company's requirements and      
standards.                                                                      

EMPLOYEES                                                                       

As of September 30, 1998, the Company had a total of approximately 4,960
employees, of which approximately 3,260 were employed in the United States.     
Approximately 27% of the Company's employees are represented by labor unions. In
the United States, workers at the Company's Waverly, Nebraska facility are      
organized and are subject to a collective bargaining agreement that expires on  
April 11, 1999. Certain employees at the Company's Sunderland, United Kingdom,  
Wilhelmshaven, Germany and Tonneins, France facilities are also organized under 
the host country's labor laws. The collective bargaining agreements applicable  
to remaining employees at the Company's Sunderland, United Kingdom facility are 
subject to renegotiation in January 1998. The collective bargaining agreements  
covering the Wilhelmshaven, Germany employees will not terminate unless due     
notice is given by either party pursuant to special provisions within the       
collective bargaining agreements, but are subject to renegotiation at various   
times. Throughout all facilities, the Company considers its relations with its  
employees and union representatives to be good.                                 

MANAGEMENT INFORMATION SYSTEMS                                                  

  In fiscal 1995, the Company initiated the Year-2000 Project. The Year-2000
Project, which is expected to be completed at the end of the first quarter of   
fiscal 1999, will have a total cost of approximately $38.0 million, of which    
approximately $35.3 million had been expended at August 29, 1998. The Company   
believes that this new system will enable the Company to reduce costs, improve  
productivity and product development times, and enhance inventory management.   

  The Company's new resource planning system is expected to provide improved
cost data, facilitate inventory and work-in-process tracking and provide        
improved order processing. In addition, the system is expected to yield improved
organizational performance due to timely and meaningful performance measurements
and the availability of timely and accurate management information across all   
functions and all levels. The new software will cover the Company's product     
lifecycle, including the functionality needed for new product development, order
management and lifetime product service and support, as well as accounting      
support activities. The system will also address the Company's global           
requirements such as a multi-lingual and multi-currency system to cover all of  
its facilities.                                                                 

The completion of the project is expected to render all of the Company's
major computer systems Year-2000 compliant. See "Management's Discussion and    
Analysis of Financial Condition and Results of Operations--Management           
Information Systems and the Impact of Year 2000."                               

ENVIRONMENTAL MATTERS                                                           

    The Company generates hazardous and non-hazardous waste in the normal course
of its manufacturing operations. As a result, the Company is subject to a wide  
range of Federal, state, local and foreign environmental laws, including CERCLA,
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 has required, and will continue to require, expenditures by the       
Company on a continuing basis. The Company does not expect that these           
expenditures will have a material adverse effect on its financial condition or  
results of operations.                                                          

    The Company is currently developing a remediation program with respect to an
area that has been contaminated by petroleum hydrocarbons at its Shady Grove,   
Pennsylvania facility. The Company believes                                     

64

424B3
66th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 66th
that this contamination is confined to the Shady Grove site and has not migrated
to any adjacent properties. The Company also believes that the costs of         
remediating this contamination will not have a material adverse effect on its   
financial condition or results of operations.                                   

LEGAL PROCEEDINGS                                                               

 The Company is involved in various legal proceedings which have arisen in
the normal course of its operations. The outcome of these legal proceedings, if 
determined adversely to the Company, is unlikely to have a material effect on   
the Company. The Company is also subject to product liability claims for which  
it believes it has adequate insurance.                                          

INTELLECTUAL PROPERTY                                                           

The Company's products are sold primarily under the logo                
"G-Registered Trademark-", and the trademarks GROVE-Registered Trademark-,      
MANLIFT-Registered Trademark-, GROVE WORLDWIDE-Registered Trademark-, G         
MANLIFT-Registered Trademark-, G MEGA TRAK-Registered Trademark-,               
MAXX-Registered Trademark- and SUPER-MAXX-Registered Trademark-. The Company    
owns a number of patents and trademarks relating to the products it manufactures
that have been obtained over a number of years. These patents and trademarks    
have been of value in the growth of the Company's business and may continue to  
be of value in the future. The Company does not regard any portion of the       
Company's business as being dependent upon any single patent or group of        
patents.                                                                        

65

424B3
67th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 67th
MANAGEMENT

MANAGEMENT COMMITTEE AND EXECUTIVE OFFICERS OF HOLDINGS                         

    The executive officers of Holdings serve at the discretion of the Management
Committee of Holdings (the "Management Committee"). The Management Committee is 
identical in composition to the Company's management committee. The following   
table sets forth information concerning executive officers of Holdings and the  
members of the Management Committee:                                            

                                                        [Enlarge/Download Table]

                        NAME                           AGE                           POSITION                       
-----------------------------------------------------  ---     -----------------------------------------------------
                                                                                                                    

Salvatore J. Bonanno.................................      57  Chairman and Chief Executive Officer, Grove Holdings 
                                                               and Member of each Management Committee              

Keith R. Simmons.....................................      48  Secretary                                            

J Taylor Crandall....................................      43  Member of each Management Committee                  

Michael L. George....................................      58  Member of each Management Committee                  

Gerald Grinstein.....................................      66  Member of each Management Committee                  

Steven B. Gruber.....................................      40  Member of each Management Committee                  

Robert B. Henske.....................................      37  Member of each Management Committee                  

Gerard E. Holthaus...................................      49  Member of each Management Committee                  

Anthony P. Scotto....................................      50  Member of each Management Committee                  

  Mr. Bonanno serves as Chairman and Chief Executive Officer of Holdings and
serves as a member of each Management Committee. From July 1995 to June 1997, he
was President of Foamex L.P. and from July 1997 to March 1998, he was President,
Chief Operating Officer and a Board Member of Foamex International Inc.         
("Foamex"), a $1 billion polyurethane manufacturing company, where he was       
responsible for directing all manufacturing operations, strategic planning and  
policy-making activities for Foamex's cushioning foams, automotive foams and    
technical foams businesses. While at Foamex, Mr. Bonanno led an organizational  
restructuring which included eliminating three layers of management,            
restructuring manufacturing operations and reducing costs. From July 1993 to    
July 1995, Mr. Bonanno served as General Manager of International Manufacturing 
Operations for Chrysler Corporation where his responsibilities included solely  
owned operations, joint ventures and licensing agreements outside of North      
America. Mr. Bonanno joined Chrysler in 1965.                                   

Mr. Simmons serves as Secretary of Holdings. He has served as the Senior
Vice President, General Counsel and Senior Business Development Officer for     
Grove Worldwide since May 1995, and is responsible for managing the legal       
affairs of Grove Worldwide and its operating companies and for developing and   
implementing all external growth initiatives. From April 1992 to May 1995, he   
was Senior Vice President and General Counsel for Grove Worldwide.              

 Mr. Crandall serves as a member of each Management Committee. Since 1986,
Mr. Crandall has served as Chief Financial Officer and Vice President of        
Keystone. Since 1991, he has served as a President and a director of Acadia MGP,
Inc. Mr. Crandall is currently a director of Bell & Howell Company, Quaker State
Corporation, Specialty Foods Corporation, Washington Mutual, Inc., Integrated   
Orthopedic, Inc. and Signature Resorts, Inc. Mr. Crandall also serves on the    
Board of Advisors of FEP Capital Holdings, L.P., and on the Investment          
Committees of Insurance Partners and Brazos Fund, L.P.                          

   Mr. George serves as a member of each Management Committee. Since 1984, Mr.
George has served as Chief Executive Officer and Chairman of the Board of George
Group, an acquisition and management consulting firm based in Dallas, Texas. He 
is currently a Director of Reliant Building Products, Inc.                      

66

424B3
68th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 68th
   Mr. Grinstein serves as a member of each Management Committee. Since August
1997, Mr. Grinstein has been the non-executive Chairman of Delta Airlines. He   
served as Chairman of Burlington Northern Santa Fe Corp., a railroad            
transportation company, until his retirement in 1995. He was Chairman and Chief 
Executive Officer of Burlington Northern Inc. from 1991 to 1995. Before joining 
Burlington Northern in 1987, he was Chairman of Western Airlines from 1983 to   
1987 and a partner in the law firm of Preston, Thorgrimson, Ellis and Holman    
from 1969 to 1983. In addition to being a director of Delta Airlines, Mr.       
Grinstein also serves as a director of Browning-Ferris Industries, Inc., PACCAR 
Inc., Sundstrand Corp. and Imperial Holly Corp.                                 

Mr. Gruber serves as a member of each Management Committee. Since March 
1992, Mr. Gruber has been a Managing Director of Oak Hill Partners, Inc. From   
May 1990 to March 1992, he was a Managing Director of Rosecliff, Inc. Since     
February 1994, Mr. Gruber has also been an officer of Insurance Partners        
Advisors, L.P., an investment adviser to Insurance Partners, L.P. Since October 
1992, he has been a Vice President of Keystone. From 1981 to 1990, Mr. Gruber   
was a Managing Director and co-head of High Yield Securities and held various   
other positions at Lehman Brothers, Inc. Mr. Gruber serves as a director of     
Superior National Insurance Group, Inc., MVE Holdings, Inc., Reliant Building   
Products, Inc. and several private companies related to Keystone, Insurance     
Partners, L.P. and Oak Hill Partners, Inc.                                      

 Mr. Henske serves as a member of each Management Committee. Since January
1997, Mr. Henske has served as a principal at Arbor Investors, LLC. From January
1996 to December 1996, he was Executive Vice President, Chief Financial Officer 
and Board Member of American Savings Bank, F.A., a federally-chartered thrift.  
From 1986 to January 1996, he was a partner and held various other positions    
with Bain & Company, Inc., a management consulting firm. Mr. Henske is currently
a director of Reliant Building Products, Inc. and Williams Scotsman, Inc.       

 Mr. Holthaus serves as a member of each Management Committee. Since April
1997, Mr. Holthaus has been President and Chief Executive Officer of Williams   
Scotsman, Inc. From September 1995 to April 1997, he was President and Chief    
Operating Officer of Williams Scotsman, Inc. and was Executive Vice President   
and Chief Financial Officer of Williams Scotsman, Inc. prior thereto. He has    
served as a director since June 1994. Before joining Williams Scotsman, Inc.,   
Mr. Holthaus served as Senior Vice President of MNC Financial, Inc. from April  
1988 to June 1994. From 1971 to 1988, Mr. Holthaus was associated with the      
accounting firm of Ernst & Young (Baltimore), where he served as a partner from 
1982 to 1988.                                                                   

  Mr. Scotto serves as a member of each Management Committee. Since 1992, he
has served as a Managing Director of Oak Hill Partners, Inc., the investment    
advisor and management company for Acadia Partners, L.P. and Keystone. Mr.      
Scotto is currently a director of Holophane Corporation, Ivex Packaging         
Corporation and Specialty Foods Corporation.                                    

MANAGEMENT COMMITTEE SUBCOMMITTEES AND FEES                                     

  Neither Management Committee has a compensation committee, audit committee
or nominating committee. The members of the Management Committees are not       
compensated for their services as such.                                         

EXECUTIVE COMPENSATION                                                          

    The executive officers of Holdings are not compensated for their services as
such.                                                                           

DESCRIPTION OF MANAGEMENT OPTION PLAN                                           

 In April 1998, Grove Investors adopted the Grove Investors LLC Management
Option Plan (the "Option Plan"). The purpose of the Option Plan is to promote   
the interests of Grove Investors and its members by (i) attracting and retaining
exceptional officers and other key employees of Grove Investors                 

67

424B3
69th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 69th
and its affiliates, specifically the Company, and (ii) enabling such individuals
to acquire an equity interest in, and participate in the long-term growth and   
financial success of Grove Investors.                                           

Subject to a participant's continued employment with the Company or its 
affiliates, options granted under the Option Plan will vest over a five year    
period as follows. For each of the first five fiscal years beginning after the  
date the options are granted, the options will vest and become cumulatively     
exercisable with respect to 20% of Grove Investors' membership interests subject
to such option on the last day of such fiscal year if the Company and its       
subsidiaries meet the EBITDA target established for that fiscal year. If the    
EBITDA actually achieved for a year is less than the EBITDA target for that     
year, then the vesting schedule for that year will be proportionately reduced.  
In addition, options will not vest in any year if the EBITDA that year is less  
than a minimum percentage of the EBITDA target.                                 

To the extent not previously canceled, any unvested portion of an option
will, as of the date of a Change in Control (as defined in the Option Plan), be 
deemed vested and exercisable immediately prior to such Change in Control. In   
addition, as a result of a termination of employment by any participant, Grove  
Investors has the assignable right but not the obligation to purchase the       
participant's membership interests in Grove Investors for an amount to be       
calculated based on the participant's reason for termination of employment.     

EMPLOYMENT ARRANGEMENTS                                                         

 Mr. Bonanno entered into an employment contract with the Company in March
1998. Mr. Bonanno's term of employment is two years, beginning on April 29,     
1998, subject to two-year automatic renewal periods. Mr. Bonanno is entitled to 
an annual salary of $500,000, STIP awards and two additional payments of        
$450,000 on March 31, 1999 and March 31, 2000. See "Short-Term Incentive Plan." 
Mr. Bonanno will also receive an amount equal to the positive difference between
the fair market value of shares of stock of Mr. Bonanno's former employer under 
options that Mr. Bonanno held that were not exercisable when he terminated his  
previous employment and the exercise price thereof. Further, the Company will   
purchase Mr. Bonanno's former residence for $675,000.                           

   As part of his employment contract, Mr. Bonanno was granted an option under
the Option Plan to purchase 2.0% of the outstanding membership interests of     
Grove Investors, calculated as of the Closing Date. See "--Description of       
Management Option Plan." The contract also provides that Mr. Bonanno has the    
option to purchase additional membership interests of Grove Investors.          

    In March 1998, Mr. Bonanno entered into a separate employment agreement with
the Company covering the period between March 16, 1998 and April 29, 1998, under
which he received a ratable payment based on the actual number of days elapsed  
during such period based on a yearly salary of $500,000. In addition, the       
Company loaned approximately $1.9 million to Mr. Bonanno to finance his         
investment in the membership interests of Grove Investors. The loan is evidenced
by two promissory notes which bear interest at a rate per annum equal to the    
prime rate of Wells Fargo Bank. The $1.0 million note is due in June 2008 and is
secured by a pledge of Mr. Bonanno's membership interests in Grove Investors.   
The second note, for approximately $912,000, is due in June 2005, is unsecured  
and will be forgiven upon the occurrence of certain events.                     

    Mr. Shull entered into an executive agreement with the Company in June 1998.
Mr. Shull's term of employment is four months, beginning on June 1, 1998. Mr.   
Shull is entitled to a ratable payment based on his current salary and STIP     
awards. See "Short-Term Incentive Plan." In addition, in consideration of his   
agreeing not to compete with the Company through August 31, 2001, and to waive  
his change of control agreement, Mr. Shull will receive additional annual       
payments through August 31, 2001. See "--Termination and Change of Control      
Agreements." Mr. Shull also entered into a consulting arrangement covering the  
period between October 1, 1998 and December 31, 2000.                           

68

424B3
70th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 70th
 Mr. Cripe entered into an employment arrangement with the Company in July
1998. Under his arrangement, Mr. Cripe is entitled to an annual salary of       
$250,000, STIP awards and severance payments. See "--Short-Term Incentive Plan."
In addition, Mr. Cripe will be compensated for the loss of certain payments that
he would have been entitled to if he had not terminated his previous employment.
He will also receive certain payments to compensate him for stock options that  
were not exercisable when he terminated such employment. Mr. Cripe was also     
granted an option under the Option Plan to purchase membership interests of     
Grove Investors. See "--Description of Management Option Plan."                 

TERMINATION AND CHANGE OF CONTROL AGREEMENTS                                    

Effective March 1, 1997, each of Messrs. Heidinger, Kolinski, Shull,    
Simmons, Sliwa and Urbanek entered into separate change of control agreements   
with Grove Worldwide. Each executive's agreement provides that if, within two   
years after a change in control of Grove Worldwide, (a) the executive is        
terminated by Grove Worldwide without Cause (as defined therein) or due to      
death, disability or retirement, or (b) the executive terminates his employment 
for Good Reason, then, in addition to payment for certain unreimbursed expenses,
deferred compensation, health coverage premiums (including reimbursement for any
income tax liability resulting from such payment) and other employment-related  
benefits, the executive will also be entitled to a lump-sum payment equal to two
times the sum of (x) his highest annual base salary in effect within 180 days   
prior to the change of control and (y) his highest annual bonus paid or payable 
for either of the last two completed years by the Company or its predecessors.  
Each executive is also entitled to the above-described severance amount in the  
event his employment is within 180 days prior to a change in control terminated 
(a) by the Company without Cause or (b) by him for Good Reason (based on an     
event that occurred within the 180-day period) or (c) due to his death. Subject 
to the terms of Mr. Shull's 1998 executive agreement, he has waived any rights  
under his change of control agreement. See "--Employment Arrangements."         

SHORT-TERM INCENTIVE PLAN                                                       

The Company's short-term incentive plan (the "STIP"), will permit the   
Company to pay officers and other key employees, including prospective officers 
and employees, of the Company and its affiliates an annual bonus conditioned on 
the attainment of certain pre-established financial performance criteria based  
on EBITDA targets for the Company and/or designated business sub-units. The STIP
will be administered by the Committee of the Company or any person or persons   
designated by the Committee to administer the STIP.                             

MANAGEMENT OF GROVE HOLDINGS CAPITAL                                            

Messrs. Henske, Scotto and Bonanno are the directors of Grove Holdings  
Capital. They are not compensated in any way for acting in their capacity as    
such. The board of directors of Grove Holdings Capital does not have a          
compensation committee, audit committee or nominating committee.                

 Mr. Bonanno is the Chief Executive Officer of Grove Holdings Capital. Mr.
Simmons is the Secretary of Grove Holdings Capital. Neither of the executive    
officers of Grove Holdings Capital are compensated as such. See "--Management   
Committee and Executive Officers of Holdings" for biographical information on   
the members and executive officers of Grove Holdings Capital.                   

69

424B3
71st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 71st
SECURITY OWNERSHIP OF CERTAIN 
BENEFICIAL OWNERS AND MANAGEMENT

 All of the issued and outstanding membership interests of the Company are
beneficially owned by Holdings, whose principal address is 201 Main Street, Fort
Worth, Texas 76102. All shares of the issued and outstanding capital stock of   
Grove Holdings Capital are beneficially owned by Holdings. All of the issued and
outstanding membership interests of Holdings are beneficially owned by Grove    
Investors, whose principal address is 201 Main Street, Fort Worth, Texas 76102. 

The following table sets forth certain information regarding beneficial 
ownership of the membership interests of Grove Investors, the managing member of
Holdings, by (i) each member of the Management Committee individually, (ii) each
Named Executive Officer and (iii) all executive officers and members of the     
Management Committee as a group:                                                

                                                        [Enlarge/Download Table]

                                                                                                                  PERCENTAGE OF    
                                                                                                                 GROVE INVESTORS   
NAME OF BENEFICIAL OWNER                                                                                      MEMBERSHIP INTERESTS 
------------------------------------------------------------------------------------------------------------  ---------------------
                                                                                                                                   
FW Strategic Partners, L.P. (1).............................................................................            43.83%     
  201 Main Street, Suite 3200                                                                                                      
  Fort Worth, Texas 76102                                                                                                          
FW Grove Coinvestors, L.P. (2)..............................................................................            43.83%     
  201 Main Street, Suite 3200                                                                                                      
  Fort Worth, Texas 76102                                                                                                          
GGEP-Grove, L.P.............................................................................................             2.68%     
Squam Lake Investors, II, L.P...............................................................................            *          
Sunapee Securities, Inc.....................................................................................            *          
DLJ Capital Corporation.....................................................................................             1.27%     
D. Brown (2)................................................................................................           --          
J Crandall (1)..............................................................................................           --          
M. George...................................................................................................             1.90%     
G. Grinstein................................................................................................           --          
S. Gruber...................................................................................................           --          
R. Henske...................................................................................................           --          
G. Holthaus.................................................................................................           --          
A. Scotto...................................................................................................           --          
S. Bonanno(3)...............................................................................................             2.67%     
K. Simmons..................................................................................................           --          
All executive officers and members of the Management Committee as a group (9 persons).......................             4.57%     

------------------------                                                        

*   Indicates less than one percent.                                            

(1) The general partner of FW Strategic Partners, L.P. is FW Strategic Asset    
  Management, L.P., whose general partner is Strategic Genpar, Inc. J Taylor
   Crandall is the sole stockholder of Strategic Genpar, Inc. Accordingly, Mr.
Crandall may be deemed to be the beneficial owner of the membership     
  interests of FW Strategic Partners, L.P. Mr. Crandall disclaims beneficial
ownership of these membership interests.                                

(2) The general partner of FW Grove Coinvestors, L.P. is FW Group Genpar, Inc.  
 ("Group Genpar"). David G. Brown is the sole stockholder of Group Genpar.
Accordingly, Mr. Brown may be deemed to be the beneficial owner of the  
membership interests of FW Grove Coinvestors, L.P. Mr. Brown disclaims  
beneficial ownership of these membership interests.                     

(3) Mr. Bonanno has options to acquire up to an additional 2.0% of the          
 outstanding membership interests of Grove Investors, calculated as of the
Closing Date.                                                           

   Certain members of Senior Management of the Company (the "Senior Management
Members") have purchased approximately 5.0% of the membership interests of Grove
Investors. The purchase price of such interests was partially financed through  
approximately $2.7 million in loans from the Company. The Senior Management     
Members have also been granted options to purchase membership interests of Grove
Investors under the Option Plan. See "Management--Description of Management     
Option Plan." Grove Investors membership interests held by Senior Management    
Members are subject to calls by Grove Investors upon termination of employment. 
See "Management--Description of Management Option Plan."                        

70

424B3
72nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 72nd
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

OPERATING AGREEMENTS                                                            

GROVE WORLDWIDE LLC OPERATING AGREEMENT                                 

   The Company is wholly owned by Holdings, which is also the managing member.
As managing member, Holdings has delegated the management of the Company to the 
Company's management committee. Subject to restrictions contained in the New    
Credit Facility, all distributions in respect of membership interests of the    
Company will be made to Holdings.                                               

GROVE HOLDINGS LLC OPERATING AGREEMENT                                  

Grove Holdings is wholly owned by Grove Investors, which is also the    
managing member. As managing member, Grove Investors has delegated the          
management of the Company to the Management Committee, which is identical in    
composition to the Company's management committee. Subject to restrictions      
contained in the Debenture Indenture, all distributions in respect of membership
interests of Holdings will be made to Grove Investors.                          

AGREEMENTS WITH GEORGE GROUP INC. FOR MANAGEMENT CONSULTING SERVICES            

George Group provides consulting services to facilitate the Company's   
development and achievement of its business plan, including services with       
respect to strategic planning, operations and financial matters. For such       
services, George Group will be paid cash fees equivalent to their costs and will
be reimbursed for its out-of-pocket expenses. George Group has advised the      
Company that it estimates its engagement will be completed within 48 months and 
that the total cash fees and expenses would approximate $14 million. The Company
has agreed to indemnify George Group, its owners, employees, and agents from    
liabilities and claims relating to or arising from the engagement of George     
Group, other than those resulting from gross negligence or willful misconduct of
George Group. Michael L. George, a member of the Company Management Committee,  
is Chief Executive Officer and Chairman of the Board of George Group. See "The  
Acquisition."                                                                   

AGREEMENTS WITH CERTAIN EXECUTIVE OFFICERS                                      

    The Company has entered into certain agreements with Messrs. Bonanno, Stift,
Simmons, Urbanek, Kolinski and Shull. See "Management --Employment Arrangements"
and "--Termination and Change of Control Agreements." In addition, the Company  
has entered into an executive agreement with Mr. Shull. See "Management         
--Employment Arrangements."                                                     

LOANS TO CERTAIN EXECUTIVE OFFICERS                                             

The Company has provided approximately $2.7 million in loans to certain 
executive officers of the Company to finance their investment in the membership 
interest of Grove Investors. These loans are evidenced by promissory notes which
bear interest at a rate per annum equal to the prime rate of Wells Fargo Bank   
and, except for a $912,000 note made by Mr. Bonanno, are secured by a pledge of 
the executive's membership interests in Grove Investors and are due in June     
2008. As of September 30, 1998, Mr. Bonanno, Mr. Bust, Mr. Kolinski and Mr. John
Wheeler, the Company's Senior Vice President of Worldwide Operations, were      
indebted to the Company in the amount of approximately $1.9 million $375,000,   
$250,000 and $150,000. respectively.                                            

CERTAIN TRANSACTIONS WITH HANSON PRIOR TO THE CLOSING DATE                      

Prior to the consummation of the Transactions, the Company and its      
subsidiaries were affiliates of Hanson. Hanson provided the Company and its     
subsidiaries with various services, including, without limitation, cash         
management, tax reporting and risk management services and charged a management 
fee for such services. See "Management's Discussion and Analysis of Financial   
Condition and Results of Operations--Results of Operations." Prior to the       
consummation of the Transactions, Hanson also purchased small quantities of the 
Company's products on an arm's-length basis.                                    

71

424B3
73rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 73rd
DESCRIPTION OF CERTAIN INDEBTEDNESS 

NEW CREDIT FACILITY                                                             

As part of the Transactions, the Company entered into the New Credit    
Facility with a syndicate of banks, as lenders, and Chase, as administrative    
agent, DLJ, as documentation agent, and BankBoston, as syndication agent. Each  
of Chase and DLJ is an affiliate of one of the Initial Purchasers. The New      
Credit Facility consists of a $200 million term loan facility (the "Term Loan   
Facility") and a $125 million revolving credit facility (the "Revolving Credit  
Facility"). The Revolving Credit Facility enables the Issuers to obtain         
revolving credit loans and the issuance of letters of credit for the account of 
the Company from time to time for working capital, acquisitions and general     
corporate purposes. A portion of the Revolving Credit Facility is available for 
borrowings by the Company in the Eurocurrency markets of British pounds         
sterling, German marks, French francs and certain other currencies. At the      
Company's option, loans under the New Credit Facility will bear interest (a) in 
the case of loans in U.S. dollars, at the highest of (x) 1 of 1% in excess of   
the Federal Funds Effective Rate (as defined in the New Credit Facility), (y)   
1.0% in excess of a certificate of deposit rate and (z) the Agent's prime rate, 
plus the Applicable Margin (as defined in the New Credit Facility), or (b) in   
the case of all loans, the relevant Eurocurrency Rate (as defined in the New    
Credit Facility) as determined by the Agent, plus the Applicable Margin. The    
Company will also pay certain fees with respect to the New Credit Facility. The 
Term Loan Facility has a term of eight years unless terminated sooner upon an   
event of default (as defined in the New Credit Facility). The Term Loan Facility
must be repaid in semi-annual installments until the date that is eight years   
after the closing date of the Term Loan Facility (the "Closing Date") in an     
aggregate amount for each year following the Closing Date of (i) $2 million for 
the first six years, (ii) $88 million during the seventh year and (iii) $100    
million during the eighth year. The Revolving Credit Facility has a term of     
seven years, unless terminated sooner upon an event of default, and outstanding 
revolving credit loans will be payable on such date or such earlier date as may 
be accelerated following the occurrence of any event of default.                

   The obligations of the Company under the New Credit Facility are guaranteed
by Holdings and each of the Company's domestic subsidiaries (the "Guarantors"). 
The obligations of the Company under the New Credit Facility are secured by a   
first priority lien (subject to permitted encumbrances) on substantially all of 
the Company's and each Guarantor's real, personal and intellectual property and 
on the capital stock of the Company, all of the capital stock of the Company's  
domestic subsidiaries and 65% of the capital stock of the Company's first-tier  
foreign subsidiaries (such amount to be increased to 100% for a first-tier      
foreign subsidiary if, and only for so long as, (i) such first-tier foreign     
subsidiary has elected, and continues to elect, to be treated as a partnership  
for United States federal income tax purposes (any such first-tier foreign      
subsidiary, a "Partnership Subsidiary"), and (ii) the pledge of the greater     
percentage does not result in material adverse tax consequences). Each          
Partnership Subsidiary will pledge its equity interests in its subsidiaries to  
secure any intercompany notes owing by it, but only so long as (i) such         
Partnership Subsidiary continues to elect to be treated as a partnership for    
United States federal income tax purposes and (ii) such pledge does not result  
in material adverse tax consequences.                                           

    The New Credit Facility contains various covenants that restrict the Company
from taking various actions and that require the Company to achieve and maintain
certain financial covenants. The New Credit Facility includes covenants relating
to balance sheet, fixed charge coverage and leverage ratios, and limitations on,
among other things, capital expenditures, liens, indebtedness, guarantees,      
mergers, acquisitions, disposition of assets, dividends, changes in business    
activities and certain corporate activities. The New Credit Facility prohibits  
the Company from prepaying the Notes.                                           

The New Credit Facility also contains events of default, including      
nonpayment of principal, interest or fees, violation of covenants, inaccuracy of
representations or warranties in any material respect, cross default and cross  
acceleration to certain other indebtedness, bankruptcy, ERISA, material         
judgments and certain changes in control of the Company or Holdings.            

    Oak Hill Securities Fund, L.P. ("OHSF") participated as a lender in the Term
Loan Facility and received customary fees in connection therewith. OHSF is a    
Delaware limited partnership that acquires and actively manages a diverse       
portfolio of investments principally in leveraged companies. Certain principals 
of the general partner of OHSF and Oak Hill Advisors, Inc., the adviser of OHSF,
have business relationships with Keystone, and Keystone has an equity investment
in OHSF. Keystone is a member of the Investor Group. See "The Transactions."    

72

424B3
74th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 74th
DESCRIPTION OF DEBENTURES 

GENERAL                                                                         

 The Senior Discount Debentures were, and the Exchange Debentures will be,
issued pursuant to the Indenture between the Issuers and the Trustee, in a      
private transaction that was not subject to the registration requirements of the
Securities Act. The form and terms of the Exchange Debentures are identical in  
all material respects to those of the Senior Discount Debentures, except for    
certain transfer restrictions and registration rights relating to the Existing  
Debentures, which do not apply to the Exchange Debentures. The terms of the     
Debentures include those stated in the Indenture and those made part of the     
Indenture by reference to the Trust Indenture Act. The Debentures are subject to
all such terms, and Holders of Debentures are referred to the Indenture and the 
Trust Indenture Act for a statement thereof. The following summary of the       
material provisions of the Indenture does not purport to be complete and is     
qualified in its entirety by reference to the Indenture, including the          
definitions therein of certain terms used below. Copies of the proposed form of 
Indenture and Registration Rights Agreement are available as set forth below    
under "--Additional Information." The definitions of certain terms used in the  
following summary are set forth below under "--Certain Definitions." For        
purposes of this summary, the term "Holdings" refers only to Grove Holdings LLC 
and not to any of its Subsidiaries.                                             

   The Debentures are general unsecured obligations of the Issuers, rank equal
in right of payment with all existing and future senior indebtedness of the     
Issuers and rank senior in right of payment to all subordinated indebtedness of 
the Issuers. As indebtedness of the Issuers, however, the Debentures are        
effectively subordinated to all indebtedness of Grove and its other             
Subsidiaries. As of August 29, 1998, the Debentures were subordinated to        
approximately $685.9 million of liabilities of Grove and its other Subsidiaries.
See "Risk Factors--Holding Company Structure; Effective Subordination."         

The operations of Holdings are conducted through its Subsidiaries and,  
therefore, the Issuers are dependent upon the cash flow of such Subsidiaries to 
meet their obligations, including their obligations under the Debentures. As of 
April 29, 1998, all of Holdings' Subsidiaries were Restricted Subsidiaries.     
However, under certain circumstances, Holdings will be able to designate current
or future Subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries  
will not be subject to many of the restrictive covenants set forth in the       
Indenture.                                                                      

Grove Holdings Capital is a wholly owned subsidiary of Holdings that was
incorporated in Delaware solely for the purpose of serving as a co-issuer of the
Debentures in order to facilitate the Offering. Holdings believed that certain  
prospective purchasers of the Senior Discount Debentures may have been          
restricted in their ability to purchase debt securities of limited liability    
companies, such as Holdings, unless such debt securities are jointly issued by a
corporation. Other than serving as a co-issuer of the Debentures and any        
additional Debentures subsequently issued after the Offering, Grove Holdings    
Capital does not have any assets, operations or revenues and is prohibited from 
engaging in any business activities. As a result, holders of the Debentures     
should not expect Grove Holdings Capital to participate in servicing the        
interest and principal obligations on the Debentures.                           

PRINCIPAL, MATURITY AND INTEREST                                                

  The Debentures are limited in aggregate principal amount to $150.0 million
at maturity of which $88.0 million at maturity was issued in the Offering. The  
Debentures will mature on May 1, 2009. The Debentures will accrete at a rate of 
11 5/8% per annum, compounded semi-annually to an aggregate principal amount of 
$88.0 million. Thereafter, interest on the Debentures will accrue at the rate of
11 5/8% per annum and will be payable semi-annually in arrears on May 1 and     
November 1 of each year, commencing November 1, 2003, to Holders of record on   
the immediately preceding April 15 and October 15. No cash interest will be     
payable on the Debentures prior to May 1, 2003. Additional Debentures may be    
issued from time to time after the Offering, subject to the provisions of the   
Indenture described below under the caption "--Certain Covenants--Incurrence of 
Indebtedness and Issuance of                                                    

73

424B3
75th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 75th
Disqualified Stock." The Debentures offered hereby and any additional Debentures
subsequently issued would be treated as a single class for all purposes under   
the Indenture, including without limitations, waivers, amendments, redemptions  
and offers to purchase. Interest on the Debentures will accrue from the most    
recent date to which interest has been paid or, if no interest has been paid,   
from May 1, 2003. Interest will be computed on the basis of a 360-day year      
comprised of twelve 30-day months. Principal, premium and Liquidated Damages, if
any, and interest on the Debentures will be payable at the office or agency of  
the Issuers maintained for such purpose within the City and State of New York   
or, at the option of the Issuers, payment of principal, premium, interest and   
Liquidated Damages, if any, may be made by check mailed to the Holders of the   
Debentures at their respective addresses set forth in the register of Holders of
Debentures; provided that all payments of principal, premium, interest and      
Liquidated Damages, if any, with respect to Debentures the Holders of which have
given wire transfer instructions to the Issuers will be required to be made by  
wire transfer of immediately available funds to the accounts specified by the   
Holders thereof. Until otherwise designated by the Issuers, the Issuers' office 
or agency in New York will be the office of the Trustee maintained for such     
purpose. The Debentures will be issued in denominations of $1,000 and integral  
multiples thereof.                                                              

OPTIONAL REDEMPTION                                                             

  The Debentures are redeemable at any time at the option of the Issuers, in
whole or in part upon not less than 30 nor more than 60 days' notice, in cash at
the redemption prices (expressed as percentages of principal amount) set forth  
below plus accrued and unpaid interest and Liquidated Damages, if any, thereon  
to the applicable redemption date, if redeemed during the twelve-month period   
beginning on May 1 of the years indicated below:                                

                                                        [Enlarge/Download Table]

YEAR                                                                                PERCENTAGE 
----------------------------------------------------------------------------------  -----------
                                                                                               
2003..............................................................................     105.813%
2004..............................................................................     103.875%
2005..............................................................................     101.938%
2006 and thereafter...............................................................     100.000%

    Notwithstanding the foregoing, at any time prior to May 1, 2001, the Issuers
may (but will not have the obligation to) on any one or more occasions redeem up
to 35% of the aggregate principal amount at maturity of Debentures originally   
issued at a redemption price equal to 111.625% of the Accreted Value (determined
at the date of redemption) thereof, plus accrued and unpaid interest and        
Liquidated Damages, if any, thereon to the redemption date, with the net cash   
proceeds of one or more Public Equity Offerings; PROVIDED that at least 65% of  
the aggregate principal amount at maturity of Debentures originally issued      
remain outstanding immediately after the occurrence of such redemption          
(excluding Debentures held by Holdings and its Subsidiaries); and PROVIDED,     
FURTHER, that such redemption shall occur within 60 days of the date of the     
closing of such Public Equity Offering.                                         

SELECTION AND NOTICE                                                            

   If less than all of the Debentures are to be redeemed or repurchased at any
time, selection of Debentures for redemption or repurchase will be made by the  
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Debentures are listed, or, if the Debentures are 
not so listed, on a pro rata basis, by lot or by such method as the Trustee     
shall deem fair and appropriate; PROVIDED that no Debentures of $1,000 or less  
shall be redeemed in part. Notices of redemption shall be mailed by first class 
mail at least 30 but not more than 60 days before the redemption date to each   
Holder of Debentures to be redeemed at its registered address. Notices of       
redemption or repurchase may not be conditional. If any Debenture is to be      
redeemed or repurchased in part only, the notice of redemption or repurchase    
that relates to such Debenture shall state the portion of the principal amount  
thereof to be redeemed or repurchased. A new Debenture in principal amount equal
to the                                                                          

74

424B3
76th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 76th
unredeemed or unrepurchased portion thereof will be issued in the name of the   
Holder thereof upon cancellation of the original Debenture. Debentures called   
for redemption or repurchase become due on the date fixed for redemption or     
repurchase. On and after the redemption or repurchase date, interest and        
Liquidated Damages ceases to accrue on Debentures or portions of them called for
redemption or repurchase.                                                       

MANDATORY REDEMPTION                                                            

 The Issuers are not required to make mandatory redemption or sinking fund
payments with respect to the Debentures.                                        

REPURCHASE AT THE OPTION OF HOLDERS                                             

CHANGE OF CONTROL                                                       

  Upon the occurrence of a Change of Control, each Holder of Debentures will
have the right to require the Issuers to repurchase all or any part (equal to   
$1,000 or an integral multiple thereof) of such Holder's Debentures pursuant to 
the offer described below (the "Change of Control Offer") at an offer price in  
cash equal to 101% of the Accreted Value thereof on the date of purchase (if    
such date of purchase is prior to May 1, 2003) or 101% of the aggregate         
principal amount thereof (if such date of purchase is on or after May 1, 2003)  
plus, in each case, accrued and unpaid interest and Liquidated Damages thereon, 
if any, to the date of purchase (the "Change of Control Payment"). Within 30    
days following any Change of Control, the Issuers will mail a notice to each    
Holder describing the transaction or transactions that constitute the Change of 
Control and offering to repurchase Debentures on the date specified in such     
notice, which date shall be no earlier than 30 days and no later than 60 days   
from the date such notice is mailed (the "Change of Control Payment Date"),     
pursuant to the procedures required by the Indenture and described in such      
notice. The Issuers will comply with the requirements of Rule 14e-1 under the   
Exchange Act and any other securities laws and regulations thereunder to the    
extent such laws and regulations are applicable in connection with the          
repurchase of the Debentures as a result of a Change of Control. To the extent  
that the provisions of any securities laws or regulations directly conflict with
the provisions of the Indenture relating to such Change of Control Offer, the   
Company will comply with the applicable securities laws and regulations and     
shall not be deemed to have breached its obligations described in the Indenture 
by virtue thereof.                                                              

On the Change of Control Payment Date, the Issuers will, to the extent  
lawful, (1) accept for payment all Debentures or portions thereof properly      
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying   
Agent an amount equal to the Change of Control Payment in respect of all        
Debentures or portions thereof so tendered and (3) deliver or cause to be       
delivered to the Trustee the Debentures so accepted together with an Officers'  
Certificate stating the aggregate principal amount of Debentures or portions    
thereof being purchased by the Issuers. The Paying Agent will promptly mail to  
each Holder of Debentures so tendered the Change of Control Payment for such    
Debentures, and the Trustee will promptly authenticate and mail (or cause to be 
transferred by book entry) to each Holder a new Debenture equal in principal    
amount to any unpurchased portion of the Debentures surrendered, if any;        
PROVIDED that each such new Debenture will be in a principal amount of $1,000 or
an integral multiple thereof. The Issuers will publicly announce the results of 
the Change of Control Offer on or as soon as practicable after the Change of    
Control Payment Date.                                                           

   The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as described
above with respect to a Change of Control, the Indenture does not contain       
provisions that permit the Holders of the Debentures to require that the Issuers
repurchase or redeem the Debentures in the event of a takeover, recapitalization
or similar transaction. Due to Change of Control repayment provisions in certain
indebtedness of Holdings' Subsidiaries (including the Senior Discount           
Debentures) and the existence of a Change of Control event of                   

75

424B3
77th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 77th
default in the New Credit Facility, it is unlikely that the Issuers would be    
able to repurchase all of the Debentures upon the occurrence of a Change of     
Control. See "Risk Factors--Limitations on Ability to Make Change of Control    
Payment." In addition, the Debentures will rank equal in right of payment with  
other senior Indebtedness of Holdings. The ability of Holdings to redeem all of 
the Debentures upon a Change of Control may also be limited by restrictions on  
the ability of Holdings' Subsidiaries to pay dividends to Holdings. Finally, the
Debentures will be effectively subordinated to Obligations of Subsidiaries of   
Holdings, including with respect to Change of Control Payments. See "--General."

 The Issuers will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the     
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Issuers and
purchases all Debentures validly tendered and not withdrawn under such Change of
Control Offer.                                                                  

 "Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of    
merger or consolidation), in one or a series of related transactions, of all or 
substantially all of the assets of Holdings and its Subsidiaries (determined on 
a consolidated basis), to any "person" (as such term is used in Section 13(d)(3)
of the Exchange Act) other than Holdings or a Wholly Owned Restricted Subsidiary
or any Permitted Holder or Permitted Holders, (ii) the adoption of a plan       
relating to the liquidation or dissolution of one of both of the Issuers (other 
than in a transaction which complies with the provisions described under        
"--Merger, Consolidation or Sale of Assets"), (iii) the consummation of any     
transaction (including, without limitation, any merger or consolidation) the    
result of which is that any "person" (as defined above), other than one or more 
Permitted Holders, becomes the "beneficial owner" (as such term is defined in   
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall be 
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is currently exercisable or is exercisable 
only upon the occurrence of a subsequent condition), directly or indirectly, of 
more than 50% of the Voting Stock of Holdings (measured by voting power rather  
than number of shares) and the Permitted Holders do not beneficially own as much
or more of the Voting Stock of Holdings (measured by voting power rather than by
number of shares) than such person, (iv) the first day on which a majority of   
the members of the Management Committee of Holdings are not Continuing Members  
or (v) the first day on which Holdings fails to own 100% of the issued and      
outstanding Equity Interests of Grove Holdings Capital (other than by reason of 
the merger of Grove Holdings Capital with and into a corporate successor to     
Holdings).                                                                      

   The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"  
of the assets of Holdings and its Subsidiaries (determined on a consolidated    
basis). Although there is a developing body of case law interpreting the phrase 
"substantially all," there is no precise established definition of the phrase   
under applicable law. Accordingly, the ability of a Holder of Debentures to     
require the Issuers to repurchase such Debentures as a result of a sale, lease, 
transfer, conveyance or other disposition of less than all of the assets of     
Holdings and its Subsidiaries taken as a whole to another Person or group may be
uncertain.                                                                      

  "Continuing Members" means, as of any date of determination, any member of
the Management Committee of Holdings who (i) was a member of such Management    
Committee on the date of the Indenture or (ii) was nominated for election or    
elected to such Management Committee with the approval of a majority of the     
Continuing Members who were members of such Management Committee at the time of 
such nomination or election.                                                    

  "Permitted Holders" means (i) any of Keystone, Inc., FW Grove Coinvestors,
L.P., FW Strategic Partners, L.P., George Group Employee Partners--Grove, L.P.  
and Michael George and their respective Affiliates on the date of the Indenture;
(ii) any of the Permitted Transferees of the Persons referred to in clause (i); 
and (iii) any person or group which holds, directly or indirectly, Equity       
Interests in Holdings so                                                        

76

424B3
78th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 78th
long as a majority of the Equity Interests in Holdings are beneficially owned by
the Persons referred to in clauses (i) and (ii).                                

    "Permitted Transferee" means, with respect to any Person: (a) in the case of
any Person who is a natural person, such individual's spouse or children, any   
trust for such individual's benefit or the benefit of such individual's spouse  
or children, or any corporation, partnership, limited liability company or      
similar entity in which the direct and beneficial owner or owners of 80% or more
of the Equity Interests in such Person or such individual's spouse or children  
or any trust for the benefit of such Persons; and (b) in the case of any Person 
who is a natural person, the heirs, executors, administrators or personal       
representatives upon death of such Person or upon the incompetence or disability
of such Person for purposes of the protection and management of such            
individual's assets.                                                            

ASSET SALES                                                                     

 The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, consummate an Asset Sale unless (i) Holdings (or
the Restricted Subsidiary, as the case may be) receives consideration at the    
time of such Asset Sale at least equal to the fair market value (evidenced by a 
resolution of the Management Committee set forth in an Officers' Certificate    
delivered to the Trustee) of the assets or Equity Interests issued or sold or   
otherwise disposed of and (ii) at least 75% of the consideration therefor       
received by Holdings or such Restricted Subsidiary is in the form of cash and   
Cash Equivalents; provided that the amount of (x) any liabilities (as shown on  
the Holding's or such Restricted Subsidiary's most recent balance sheet), of the
Company or any Restricted Subsidiary (other than contingent liabilities and     
liabilities that are by their terms subordinated to the Debentures or any       
guarantee thereof) that are assumed by the transferee of any such assets        
pursuant to a customary novation agreement that releases Holdings or such       
Restricted Subsidiary from further liability and (y) any securities, Debentures 
or other obligations received by Holdings or any such Restricted Subsidiary from
such transferee that are converted by Holdings or such Restricted Subsidiary    
into cash (to the extent of the cash received) within 60 days following the     
closing of such Asset Sale, shall be deemed to be cash for purposes of this     
provision.                                                                      

 Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
Holdings or any of its Restricted Subsidiaries may apply such Net Proceeds, at  
its option, (a) to repay Senior Debt (as defined in the Senior Subordinated Note
Indenture) or the Senior Discount Debentures, (b) to the acquisition of a       
majority of the assets of, or a majority of the Voting Stock of, another        
Permitted Business, the making of a capital expenditure or the acquisition of   
other long-term assets that are used or useful in a Permitted Business or (c)   
for a combination of uses described in clauses (a) and (b). Pending the final   
application of any such Net Proceeds, Holdings and its Restricted Subsidiaries  
may temporarily reduce revolving credit borrowings or otherwise invest such Net 
Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds
from Asset Sales that are not applied or invested as provided in the first      
sentence of this paragraph will be deemed to constitute "Excess Proceeds." When 
the aggregate amount of Excess Proceeds exceeds $10.0 million, the Issuers will 
be required to make an offer to all Holders of Debentures (an "Asset Sale       
Offer") to purchase the maximum principal amount of Debentures that may be      
purchased out of the Excess Proceeds, at an offer price in cash in an amount    
equal to 100% of the Accreted Value thereof on the date of purchase (if such    
date of purchase is prior to May 1, 2003) or 100% of the principal amount       
thereof on the date of purchase (if such purchase date is on or after May 1,    
2003) plus, in each case, accrued and unpaid interest and Liquidated Damages    
thereon, if any, to the date of repurchase, in accordance with the procedures   
set forth in the Indenture. To the extent that any Excess Proceeds remain after 
consummation of an Asset Sale Offer, Holdings may use such Excess Proceeds for  
any purpose not otherwise prohibited by the Indenture. If the aggregate         
principal amount of Debentures tendered into such Asset Sale Offer surrendered  
by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall     
select the Debentures to be purchased on a pro rata basis. Upon completion of   
such offer to purchase, the amount of Excess Proceeds shall be reset at zero.   
Notwithstanding the foregoing, Holdings will not be                             

77

424B3
79th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 79th
required to make an Asset Sale Offer if (i) Holdings' obligation to make such   
Asset Sale Offer is due to an Asset Sale by one or more of Holdings'            
Subsidiaries, (ii) as a result of such Asset Sale (or Asset Sales) Grove is     
required to make and does make an offer similar to an Asset Sale Offer to the   
Holders of the Senior Discount Debentures in accordance with the terms of the   
Senior Subordinated Note Indenture and (iii) to the extent that the aggregate   
amount of Senior Discount Debentures tendered pursuant to such offer is less    
than the Excess Proceeds, Holdings makes an Asset Sale Offer to all Holders of  
Debentures with such remaining Excess Proceeds.                                 

CERTAIN COVENANTS                                                               

RESTRICTED PAYMENTS                                                     

 The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any  
dividend or make any other payment or distribution on account of Holdings' or   
any of its Restricted Subsidiaries' Equity Interests (including, without        
limitation, any payment in connection with any merger or consolidation involving
Holdings or any of its Restricted Subsidiaries) or to the direct or indirect    
holders of Holdings' or any of its Restricted Subsidiaries' Equity Interests in 
their capacity as such (other than dividends or distributions payable in Equity 
Interests (other than Disqualified Stock) of Holdings or dividends or           
distributions payable to Holdings or a Restricted Subsidiary of Holdings); (ii) 
purchase, redeem or otherwise acquire or retire for value (including, without   
limitation, in connection with any merger or consolidation involving the        
Issuers) any Equity Interests of Holdings (other than Equity Interests owned by 
Holdings or any Restricted Subsidiary of Holdings) or any direct or indirect    
parent of Holdings; (iii) make any payment on or with respect to, or purchase,  
redeem, defease or otherwise acquire or retire for value any Indebtedness that  
is subordinated to the Debentures (other than any subordinated indebtedness held
by Holdings), except a payment of interest or principal at Stated Maturity; or  
(iv) make any Restricted Investment (all such payments and other actions set    
forth in clauses (i) through (iv) above being collectively referred to as       
"Restricted Payments"), unless, at the time of and after giving effect to such  
Restricted Payment:                                                             

        (a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof; and                            

    (b) Holdings would, at the time of such Restricted Payment and after
   giving pro forma effect thereto as if such Restricted Payment had been made
   at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed
   Charge Coverage Ratio test set forth in the first paragraph of the covenant
    described below under the caption "--Incurrence of Indebtedness and Issuance
of Disqualified Stock"; and                                             

      (c) such Restricted Payment, together with the aggregate amount of all
  other Restricted Payments made by Holdings and its Restricted Subsidiaries
   after the date of the Indenture (excluding Restricted Payments permitted by
 clauses (ii), (iii), (iv), (vi), (viii), (x), (xi) and (xiii) of the next
    succeeding paragraph), is less than the sum, without duplication, of (i) 50%
of the Consolidated Net Income of Holdings for the period (taken as one 
    accounting period) from the beginning of the first fiscal quarter commencing
   after the date of the Indenture to the end of Holdings' most recently ended
   fiscal quarter for which internal financial statements are available at the
time of such Restricted Payment (or, if such Consolidated Net Income for
   such period is a deficit, less 100% of such deficit), plus (ii) 100% of the
aggregate net cash proceeds received by Holdings since the date of the  
   Indenture as a contribution to its equity capital or from the issue or sale
   of Equity Interests of Holdings (other than Disqualified Stock) or from the
    issue or sale of Disqualified Stock or debt securities of Holdings that have
  been converted into such Equity Interests (other than Equity Interests (or
  Disqualified Stock or convertible debt securities) sold to a Subsidiary of
   Holdings), plus (iii) to the extent that any Restricted Investment that was
made after the date of the Indenture is sold for cash or otherwise      
   liquidated or repaid for cash, the lesser of (A) the cash return of capital
with respect to such                                                    

78

424B3
80th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 80th
Restricted Investment (less the cost of disposition, if any) and (B) the
    initial amount of such Restricted Investment, plus (iv) 50% of any dividends
   received by Holdings or a Wholly Owned Restricted Subsidiary after the date
   of the Indenture from an Unrestricted Subsidiary of Holdings, to the extent
  that such dividends were not otherwise included in Consolidated Net Income
  of Holdings' for such period, plus (v) to the extent that any Unrestricted
   Subsidiary is redesignated as a Restricted Subsidiary after the date of the
Indenture, the lesser of (A) the fair market value of the Holdings'     
 Investment in such Subsidiary as of the date of such redesignation or (B)
such fair market value as of the date on which such Subsidiary was      
originally designated as an Unrestricted Subsidiary.                    

   The foregoing provisions will not prohibit: (i) the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of        
declaration such payment would have complied with the provisions of the         
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other     
acquisition of any PARI PASSU or subordinated Indebtedness or Equity Interests  
of Holdings in exchange for, or out of the net cash proceeds of the             
substantially concurrent sale (other than to a Subsidiary of Holdings) of, other
Equity Interests of Holdings (other than any Disqualified Stock); PROVIDED that 
the amount of any such net cash proceeds that are utilized for any such         
redemption, repurchase, retirement, defeasance or other acquisition shall be    
excluded from clause (c) (ii) of the preceding paragraph; (iii) the defeasance, 
redemption, repurchase or other acquisition of subordinated Indebtedness with   
the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; 
(iv) the payment of any dividend or making of any distribution by a Subsidiary  
of Holdings to the holders of its Equity Interests on a pro rata basis; (v) the 
repurchase, redemption or other acquisition or retirement for value of any      
Equity Interests of Grove Investors, Holdings or any Subsidiary of Holdings held
by any former member of Holdings' (or any of its Subsidiaries') Management      
Committee or any former officer, employee or director of Holdings or any of its 
Subsidiaries pursuant to the Holdings Operating Agreement or Grove Investors    
Operating Agreement, any equity subscription agreement, stock option agreement, 
employment agreement or other similar agreement and any dividends or            
distributions to Grove Investors to fund such purchase, redemption or other     
acquisition or retirement; PROVIDED that (A) the aggregate price paid for all   
such repurchased, redeemed, acquired or retired Equity Interests shall not      
exceed (1) $5.0 million in any calendar year (with unused amounts in any        
calendar year being carried over to succeeding calendar years subject to a      
maximum (without giving effect to clause (2)) of $10.0 million PLUS (2) the     
aggregate cash proceeds received by Holdings during such calendar year from any 
reissuance of Equity Interests by Grove Investors, Holdings or the Company to   
members of management of Holdings and its Restricted Subsidiaries and (B) no    
Default or Event of Default shall have occurred and be continuing immediately   
after such transaction; PROVIDED, FURTHER that the aggregate cash proceeds      
referred to in (2) above shall be excluded from clause (c)(ii) of the preceding 
paragraph; (vi) so long as Holdings is a limited liability company either       
treated as a partnership or disregarded as an entity separate from its owner for
federal income tax purposes (as evidenced by a certificate of an officer of     
Holdings, prepared based on such officer's best knowledge, at least annually),  
distributions to members of Holdings in an amount with respect to any period    
after December 31, 1997 not to exceed the Tax Amount of Holdings for such       
period; PROVIDED, HOWEVER, that such distributions shall be allowed to be made  
quarterly based on an estimation and after the end of a taxable year based on   
the partnership tax return of Holdings (or, if Holdings is disregarded as an    
entity separate from its owner, its nearest owner that is not so disregarded)   
for such taxable year (or at such other times as reasonably appropriate         
including in connection with an audit adjustment), taking into account any      
previous payments of Tax Amount for such taxable year or, if Holdings becomes   
included in a consolidated tax group for federal income tax purposes, payments  
to the common parent of the taxable group in an amount, with respect to any     
period after December 31, 1997, not to exceed the tax liability attributable to 
Holdings and its Subsidiaries on a stand-alone basis for such period; (vii) any 
Investment to the extent that the consideration therefor consists of the net    
cash proceeds of the concurrent issue and sale (other than to a Restricted      
Subsidiary) of Equity Interests of Holdings (other than any Disqualified Stock);
(viii) the payment of dividends or the making of loans or advances for costs and
expenses incurred by Grove Investors or Holdings in its capacity as a holding   
company in an aggregate amount not to exceed                                    

79

424B3
81st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 81st
$2.0 million in each calendar year pursuant to this clause (viii); (ix) so long 
as no Default or Event of Default has occurred and is continuing and Holdings   
can incur at least $1.00 of additional indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of the covenant described  
below under caption "--Incurrence of Indebtedness and Issuance of Disqualified  
Stock," the declaration and payment of dividends to holders of any class or     
series of Disqualified Stock of Holdings, issued after the date of the Indenture
in accordance with the covenant described below under the caption "Incurrence of
Indebtedness and Issuance of Disqualified Stock"; (x) Investments made by       
Holdings or one of its Restricted Subsidiaries within 30 days of the date of the
Indenture, the proceeds of which are used to fund the Transactions or capitalize
Restricted Subsidiaries; (xi) repurchase of Equity Interests deemed to occur    
upon exercise of stock options if such Equity Interests represent a portion of  
the exercise price of such options; (xii) Restricted Investments having an      
aggregate fair market value, taken together with all other Restricted           
Investments made pursuant to this clause (xii) that are at that time            
outstanding, not to exceed $30.0 million (with the fair market value of each    
Investment being measured at the time made and without giving effect to         
subsequent changes in value); (xiii) distributions or payments of Receivables   
Fees; (xiv) dividends or distributions to Grove Investors to fund severance     
costs incurred by Grove Investors in connection with the Transactions and (xv)  
Restricted Payments not to exceed $20.0 million since the date of the Indenture.

    The Management Committee may designate any Restricted Subsidiary, other than
Grove Holdings Capital, to be an Unrestricted Subsidiary if such designation    
would not cause a Default. For purposes of making such determination, all       
outstanding Investments by Holdings and its Restricted Subsidiaries (except to  
the extent repaid in cash) in the Subsidiary so designated will be deemed to be 
Restricted Payments at the time of such designation and will reduce the amount  
available for Restricted Payments under the first paragraph of this covenant.   
All such outstanding Investments will be deemed to constitute Investments in an 
amount equal to the fair market value of such Investments at the time of such   
designation. Such designation will only be permitted if such Restricted Payment 
would be permitted at such time and if such Restricted Subsidiary otherwise     
meets the definition of an Unrestricted Subsidiary.                             

    For purposes of determining compliance with this covenant, in the event that
a Restricted Payment meets the criteria of more than one of the exceptions      
described in (i) through (xiv) above or is entitled to be made pursuant to the  
first paragraph of this covenant, Holdings shall, in its sole discretion,       
classify such Restricted Payment in any manner that complies with the covenant. 
The amount of all Restricted Payments (other than cash) shall be the fair market
value on the date of the Restricted Payment of the asset(s) or securities       
proposed to be transferred or issued by Holdings or such Restricted Subsidiary, 
as the case may be, pursuant to the Restricted Payment. The fair market value of
any non-cash Restricted Payment shall be determined by the Management Committee 
whose resolution with respect thereto shall be delivered to the Trustee, such   
determination to be based upon an opinion or appraisal issued by an accounting, 
appraisal or investment banking firm of national standing if such fair market   
value exceeds $5.0 million. Not later than the date of making any Restricted    
Payment, the Issuers shall deliver to the Trustee an Officers' Certificate      
stating that such Restricted Payment is permitted and setting forth the basis   
upon which the calculations required by the covenant "Restricted Payments" were 
computed, together with a copy of any fairness opinion or appraisal required by 
the Indenture.                                                                  

INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK                   

 The Indenture provides that Holdings will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur, issue, assume,      
guarantee or otherwise become directly or indirectly liable, contingently or    
otherwise, with respect to (collectively, "incur") any Indebtedness (including  
Acquired Debt) and that Holdings will not issue any Disqualified Stock and will 
not permit any of its Subsidiaries to issue any shares of Disqualified Stock;   
PROVIDED, HOWEVER, that the Issuers may incur Indebtedness (including Acquired  
Debt) or issue shares of Disqualified Stock and Holdings' Subsidiaries may incur
Indebtedness or issue preferred equity if the Fixed Charge Coverage Ratio for   
Holdings' most recently ended four full fiscal quarters for which internal      
financial statements are available immediately preceding                        

80

424B3
82nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 82nd
the date on which such additional Indebtedness is incurred or such Disqualified 
Stock is issued would have been at least 1.75 to 1, determined on a pro forma   
basis (including a pro forma application of the net proceeds therefrom), as if  
the additional Indebtedness had been incurred, or the Disqualified Stock had    
been issued, as the case may be, at the beginning of such four-quarter period.  

        The provisions of the first paragraph of this covenant does not apply to
   the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):                                                      

    (i) the incurrence by the Issuers and the Restricted Subsidiaries of
Indebtedness under the New Credit Facility; PROVIDED that the aggregate 
  principal amount of all term Indebtedness outstanding under the New Credit
 Facility after giving effect to such incurrence does not exceed an amount
 equal to $200.0 million plus (in the case of any refinancing thereof) the
  aggregate amount of fees, underwriting discounts, premiums and other costs
    and expenses incurred in connection with such refinancing less the aggregate
    amount of all scheduled or mandatory repayments of the principal of any term
  Indebtedness under the New Credit Facility (other than repayments that are
    immediately reborrowed) that have been made since the date of the Indenture;

     (ii) the incurrence by the Issuers and the Restricted Subsidiaries of
 Indebtedness and letters of credit under Credit Facilities; PROVIDED that
 the aggregate principal amount of all revolving credit Indebtedness (with
letters of credit being deemed to have a principal amount equal to the  
maximum face amount thereunder) outstanding under all Credit Facilities 
 after giving effect to such incurrence does not exceed an amount equal to
  the greater of (A) the amount of the Borrowing Base and (B) $125.0 million
    less, in the case of clause (B), the aggregate amount of all Net Proceeds of
    Asset Sales applied to permanently reduce revolving credit commitments under
    a Credit Facility pursuant to the covenant described above under the caption
"--Asset Sales";                                                        

     (iii) the incurrence by Holdings and its Restricted Subsidiaries of the
Existing Indebtedness;                                                  

     (iv) the incurrence by (A) the Issuers of Indebtedness represented by
the Debentures sold in the Offering and (B) the incurrence by Grove and 
  Grove Capital of Indebtedness represented by the Senior Subordinated Notes
 and the incurrence by the Subsidiary Guarantors (as defined in the Senior
  Subordinated Note Indenture) of Indebtedness represented by the guarantees
of such Senior Subordinated Notes;                                      

       (v) the incurrence by Holdings or any of its Restricted Subsidiaries of
  Indebtedness represented by Capital Lease Obligations, mortgage financings
  or purchase money obligations or similar financings, in each case incurred
  for the purpose of financing all or any part of the purchase price or cost
  of construction or improvement of property, plant or equipment used in the
business of Holdings or such Restricted Subsidiary, in an aggregate     
principal amount not to exceed $10.0 million at any time outstanding;   

        (vi) the incurrence by Holdings or any of its Restricted Subsidiaries of
Indebtedness in connection with the acquisition of assets or a new      
   Subsidiary; PROVIDED that such Indebtedness was incurred by the prior owner
  of such assets or such Subsidiary prior to such acquisition by Holdings or
   one of its Restricted Subsidiaries and was not incurred in connection with,
    or in contemplation of, such acquisition by Holdings or one of it Restricted
 Subsidiaries; and PROVIDED further that the principal amount (or accreted
value, as applicable) of such Indebtedness, together with any other     
outstanding Indebtedness incurred pursuant to this clause (vi) and any  
   Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (vi), does not exceed 
$10.0 million;                                                          

       (vii) the incurrence by Holdings or any of its Restricted Subsidiaries of
  Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to refund, refinance or replace Indebtedness (other than 
intercompany Indebtedness) that was permitted by the Indenture to be    
   incurred under the first paragraph hereof or clauses (iii), (iv), (v), (vi)
or (x) of this paragraph;                                               

81

424B3
83rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 83rd
      (viii) the incurrence by Holdings or any of its Restricted Subsidiaries of
 intercompany Indebtedness between or among Holdings and any of its Wholly
 Owned Subsidiaries, including a pledge of assets in connection therewith;
PROVIDED, HOWEVER, that (i) if one of the Issuers is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior  
 payment in full in cash of all Obligations with respect to the Debentures
and (ii)(A) any subsequent issuance or transfer of Equity Interests that
   results in any such Indebtedness being held by a Person other than Holdings
    or a Restricted Subsidiary thereof and (B) any sale or other transfer of any
   such Indebtedness to a Person that is not either Holdings or a Wholly Owned
  Restricted Subsidiary thereof shall be deemed, in each case, to constitute
an incurrence of such Indebtedness by Holdings or such Restricted       
Subsidiary, as the case may be, that was not permitted by this clause   
(viii);                                                                 

        (ix) the incurrence by Holdings or any of its Restricted Subsidiaries of
  Hedging Obligations that are incurred for the purpose of fixing or hedging
  (i) interest rate risk with respect to any floating rate Indebtedness that
is permitted by the terms of this Indenture to be outstanding, (ii) the 
value of foreign currencies purchased or received by Holdings in the    
    ordinary course of business as conducted by Holdings or (iii) commodity risk
   relating to commodity agreements to the extent entered into in the ordinary
   course of business to protect Holdings and its Restricted Subsidiaries from
fluctuations in the prices of raw materials used in its business;       

       (x) the incurrence by Holdings or any of its Restricted Subsidiaries of
    additional Indebtedness in an aggregate principal amount (or accreted value,
   as applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness  
incurred pursuant to this clause (x), not to exceed $40.0 million;      

(xi) the incurrence by Holdings' Unrestricted Subsidiaries of   
  Non-Recourse Debt, PROVIDED, HOWEVER, that if any such Indebtedness ceases
  to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted      
Subsidiary of Holdings that was not permitted by this clause (xi);      

     (xii) the Guarantee by Issuers or any of its Restricted Subsidiaries of
    Indebtedness of Holdings or a Subsidiary of Holdings, which Indebtedness was
permitted to be incurred by another provision of this covenant;         

  (xiii) the incurrence of Indebtedness (including letters of credit) in
respect of workers' compensation claims, self-insurance obligations,    
    performance, surety, bid or similar bonds and completion guarantees provided
 by Holdings or a Restricted Subsidiary in the ordinary course of business
and consistent with past practices;                                     

     (xiv) the incurrence of Indebtedness, including Guarantees, by Holdings
   or any of its Restricted Subsidiaries in connection with a Dealer Financing
Program;                                                                

(xv) the incurrence of Equipment Financing Guarantees; and        

      (xvi) the incurrence of Indebtedness arising from agreements of Holdings
 or any Restricted Subsidiary providing for indemnification, adjustment of
   purchase price or similar obligations, in each case, incurred or assumed in
 connection with the disposition or acquisition of any business, assets or
    Capital Stock of a Subsidiary; PROVIDED that the maximum aggregate liability
of such Indebtedness shall at no time exceed the gross proceeds actually
   received by Holdings and its Restricted Subsidiaries in connection with any
such disposition or the gross proceeds actually paid by Holdings and its
Restricted Subsidiaries in connection with any such acquisition.        

    For purposes of determining compliance with this covenant, in the event that
an item of Indebtedness meets the criteria of more than one of the categories of
Permitted Debt described in clauses (i) through (xvi) above or is entitled to be
incurred pursuant to the first paragraph of this covenant, the Issuers shall, in
their sole discretion, classify such item of Indebtedness in any manner that    
complies with this covenant. Accrual of interest, accretion or amortization of  
original issue discount, the payment of interest on any                         

82

424B3
84th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 84th
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional shares of  
the same class of Disqualified Stock will not be deemed to be an incurrence of  
Indebtedness or an issuance of Disqualified Stock for purposes of this covenant;
PROVIDED, in each such case, that the amount thereof is included in Fixed       
Charges of Holdings as accrued.                                                 

LIENS                                                                           

    The Indenture provides that the Issuers will not, and will not permit any of
their Restricted Subsidiaries to, directly or indirectly, create, incur, assume 
or suffer to exist any Lien securing Indebtedness or trade payables on any asset
now owned or hereafter acquired, or any income or profits therefrom or assign or
convey any right to receive income therefrom, except Permitted Liens.           

DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES                  

 The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or otherwise     
cause or suffer to exist or become effective any encumbrance or restriction on  
the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any    
other distributions to Holdings or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or 
measured by, its profits, or (b) pay any indebtedness owed to Holdings or any of
its Restricted Subsidiaries, (ii) make loans or advances to Holdings or any of  
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
Holdings or any of its Restricted Subsidiaries. However, the foregoing          
restrictions will not apply to encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the date of the Indenture,  
(b) the New Credit Agreement as in effect as of the date of the Indenture, and  
any amendments, modifications, restatements, renewals, increases, supplements,  
refundings, replacements or refinancings thereof, PROVIDED that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,      
replacement or refinancings are no more restrictive, taken as a whole, with     
respect to such dividend and other payment restrictions than those contained in 
the New Credit Agreement as in effect on the date of the Indenture, (c) the     
Debentures, the Indenture, the Senior Discount Debentures and the Senior        
Subordinated Note Indenture, (d) applicable law, (e) any instrument governing   
Indebtedness or Capital Stock of a Person acquired by Holdings or any of its    
Restricted Subsidiaries as in effect at the time of such acquisition (except to 
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any 
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, PROVIDED that, in the case of    
Indebtedness, such Indebtedness was permitted by the terms of the Indenture to  
be incurred, (f) customary non-assignment provisions in leases and other        
agreements entered into in the ordinary course of business and consistent with  
past practices, (g) purchase money obligations for property acquired in the     
ordinary course of business that impose restrictions of the nature described in 
clause (iii) above on the property so acquired, (h) any agreement for the sale  
of a Restricted Subsidiary that restricts distributions by that Restricted      
Subsidiary pending its sale, (i) Permitted Refinancing Indebtedness, PROVIDED   
that the restrictions contained in the agreements governing such Permitted      
Refinancing Indebtedness are no more restrictive, taken as a whole, than those  
contained in the agreements governing the Indebtedness being refinanced, (j)    
secured Indebtedness otherwise permitted to be incurred pursuant to the         
provisions of the covenant described above under the caption "--Liens" that     
limits the right of the debtor to dispose of the assets securing such           
Indebtedness, (k) provisions with respect to the disposition or distribution of 
assets or property in joint venture agreements and other similar agreements     
entered into in the ordinary course of business, (l) restrictions on cash or    
other deposits or net worth imposed by customers under contracts entered into in
the ordinary course of business, (m) purchase money obligations or other        
Indebtedness or contractual requirements incurred in connection with or         
permitted by the covenant described below under the caption "--Sales of Accounts
Receivable," (n) any Equipment                                                  

83

424B3
85th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 85th
Financing Guarantees, and (o) restrictions on transfers of assets pursuant to   
agreements relating to a Dealer Financing Program.                              

MERGER, CONSOLIDATION, OR SALE OF ASSETS                                        

   The Indenture provides that neither Issuer may consolidate or merge with or
into (whether or not such Issuer is the surviving corporation), or sell, assign,
transfer, convey or otherwise dispose of all or substantially all of its        
properties or assets in one or more related transactions, to another Person     
unless (i) such Issuer is the surviving corporation or the entity or the Person 
formed by or surviving any such consolidation or merger (if other than one of   
the Issuers) or to which such sale, assignment, transfer, lease, conveyance or  
other disposition shall have been made is a corporation or other entity         
organized or existing under the laws of the United States, any state thereof or 
the District of Columbia; (ii) the entity or Person formed by or surviving any  
such consolidation or merger (if other than one of the Issuers) or the Person to
which such sale, assignment, transfer, lease, conveyance or other disposition   
shall have been made assumes all the obligations of such Issuer under the       
Registration Rights Agreement, the Debentures and the Indenture pursuant to a   
supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)  
immediately after such transaction no Default or Event of Default exists; and   
(iv) except in the case of a merger of one of the Issuers with or into a Wholly 
Owned Subsidiary of Holdings, the Issuer or the entity or Person formed by or   
surviving any such consolidation or merger (if other than one of the Issuers),  
or to which such sale, assignment, transfer, lease, conveyance or other         
disposition shall have been made will, at the time of such transaction and after
giving pro forma effect thereto as if such transaction had occurred at the      
beginning of the applicable four-quarter period, be permitted to incur at least 
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio    
test set forth in the first paragraph of the covenant described above under the 
caption "--Incurrence of Indebtedness and Issuance of Disqualified Stock."      
Notwithstanding the foregoing, Holdings is permitted to reorganize as a         
corporation in accordance with the procedures established in the Indenture (and 
Grove Holdings Capital may thereafter liquidate); PROVIDED that Holdings shall  
have delivered to the Trustee an opinion of counsel in the United States        
reasonably acceptable to the Trustee confirming that such reorganization (and,  
if applicable, liquidation of Grove Holdings Capital) is not adverse to holders 
of the Debentures (it being recognized that such reorganization shall not be    
deemed adverse to the holders of the Debentures solely because (i) of the       
accrual of deferred tax liabilities resulting from such reorganization or (ii)  
the successor or surviving corporation (a) is subject to income tax as a        
corporate entity or (b) is considered to be an "includible corporation" of an   
affiliated group of corporations within the meaning of the Code or any similar  
state or local law) and certain other conditions are satisfied.                 

LIMITATION ON LEASES                                                            

    The Indenture provides that Holdings will not, directly or indirectly, lease
all or substantially all of its properties or assets to any Person.             

TRANSACTIONS WITH AFFILIATES                                                    

 The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any        
property or assets from, or enter into or make or amend any transaction,        
contract, agreement, understanding, loan, advance or guarantee with, or for the 
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),  
unless (i) such Affiliate Transaction is on terms that are no less favorable to 
Holdings or the relevant Restricted Subsidiary than those that would have been  
obtained in a comparable transaction by Holdings or such Restricted Subsidiary  
with an unrelated Person and (ii) the Issuers deliver to the Trustee (a) with   
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $2.0 million, a resolution of the
Management Committee set forth in an Officers' Certificate certifying that such 
Affiliate Transaction complies with clause (i) above and that such Affiliate    
Transaction has been approved by a majority of the disinterested                

84

424B3
86th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 86th
members of the Management Committee and (b) with respect to any Affiliate       
Transaction or series of related Affiliate Transactions involving aggregate     
consideration in excess of $10.0 million, an opinion as to the fairness to the  
Holders of such Affiliate Transaction from a financial point of view issued by  
an accounting, appraisal or investment banking firm of national standing.       
Notwithstanding the foregoing, the following items shall not be deemed to be    
Affiliate Transactions: (i) any employment agreement, compensation or employee  
benefit arrangements and incentive arrangements with any officer, director,     
member or employee entered into by Grove Investors or any of its Restricted     
Subsidiaries in the ordinary course of business of Grove Investors or such      
Restricted Subsidiary, as well as customary change of control and severance     
payments, (ii) transactions between or among the Issuers and/or its Restricted  
Subsidiaries, (iii) payment of reasonable managers and directors fees to Persons
who are not otherwise Affiliates of the Issuers, (iv) Restricted Payments,      
Permitted Investments and other payments and distributions that are permitted by
the provisions of the Indenture described above under the caption "--Restricted 
Payments," (v) any Permitted George Group Transaction; (vi) loans and advances  
to officers, directors and employees of the Company or any Restricted Subsidiary
for travel, entertainment, moving and other relocation expenses, in each case   
made in the ordinary course of business; (vii) transactions permitted by the    
provisions of the covenant described below under the caption "--Sales of        
Accounts Receivables"; (viii) transactions permitted by clauses (xii) and (xiv) 
of the covenant described above under the caption "--Incurrence of Indebtedness 
and Issuance of Disqualified Stock"; and (ix) transactions pursuant to any      
contract or agreement in effect on the date of the Indenture as the same may be 
amended, modified or replaced from time to time so long as such amendment,      
modification or replacement is no less favorable to Holdings and its Restricted 
Subsidiaries than the contract or agreement as in effect on the date of the     
Indenture.                                                                      

SALE AND LEASEBACK TRANSACTIONS                                                 

 The Indenture provides that Holdings will not, and will not permit any of
its Restricted Subsidiaries to, enter into any sale and leaseback transaction;  
provided that Holdings or any of its Restricted Subsidiaries may enter into a   
sale and leaseback transaction if (i) Holdings or such Restricted Subsidiary    
could have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the Fixed Charge    
Coverage Ratio test set forth in the first paragraph of the covenant described  
above under the caption "--Incurrence of Additional Indebtedness and Issuance of
Disqualified Stock" and (b) incurred a Lien to secure such Indebtedness pursuant
to the covenant described above under the caption "--Liens," (ii) the gross cash
proceeds of such sale and leaseback transaction are at least equal to the fair  
market value (as determined in good faith by the Management Committee and set   
forth in an Officers' Certificate delivered to the Trustee) of the property that
is the subject of such sale and leaseback transaction and (iii) the transfer of 
assets in such sale and leaseback transaction is permitted by, and, if          
applicable, the Issuers apply the proceeds of such transaction in compliance    
with, the covenant described above under the caption "--Asset Sales."           
Notwithstanding the foregoing, Delta Manlift, S.A. and Grove France, S.A. and   
its successor, may enter into any sale and leaseback transaction; PROVIDED that 
such sale and leaseback transaction is in the ordinary course of business       
consistent with past practices as in effect on the date of the Indenture and the
aggregate amount of any Attributable Debt in connection with such transaction   
does not exceed $4.0 million in any calendar year.                              

85

424B3
87th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 87th
RESTRICTIONS ON PREFERRED STOCK OF SUBSIDIARIES                                 

  The Indenture provides that Holdings will not permit any of its Restricted
Subsidiaries to issue any preferred stock (other than Grove, which may issue    
preferred stock that is not Disqualified Stock), or permit any Person to own or 
hold an interest in any preferred stock of any such Subsidiary, except for      
preferred stock issued to Holdings.                                             

LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN WHOLLY OWNED           
SUBSIDIARIES                                                                

  The Indenture provides that Holdings (i) will not, and will not permit any
Wholly Owned Restricted Subsidiary of Holdings to, transfer, convey, sell, lease
or otherwise dispose of any Equity Interests in any Wholly Owned Restricted     
Subsidiary of Holdings to any Person (other than Holdings or a Wholly Owned     
Restricted Subsidiary of Holdings), unless (a) such transfer, conveyance, sale, 
lease or other disposition is of all the Equity Interests in such Wholly Owned  
Restricted Subsidiary and (b) the cash Net Proceeds from such transfer,         
conveyance, sale, lease or other disposition are applied in accordance with the 
covenant described above under the caption "--Asset Sales," and (ii) will not   
permit any Wholly Owned Restricted Subsidiary of Holdings to issue any of its   
Equity Interests (other than, if necessary, shares of its Capital Stock         
constituting directors' qualifying shares) to any Person other than to the      
Company or a Wholly Owned Restricted Subsidiary of Holdings.                    

BUSINESS ACTIVITIES                                                             

   Holdings will not, and will not permit any Restricted Subsidiary to, engage
in any business other than Permitted Businesses, except to such extent as would 
not be material to Holdings and its Restricted Subsidiaries taken as a whole.   

RESTRICTIONS ON ACTIVITIES OF GROVE HOLDINGS CAPITAL                            

   The Indenture provides that Grove Holdings Capital may not hold any assets,
become liable for any obligations or engage in any business activities; PROVIDED
that Grove Holdings Capital may be a co-obligor with respect to Debentures      
issued pursuant to the Indenture and engage in any activities directly related  
or necessary in connection therewith.                                           

PAYMENTS FOR CONSENT                                                            

The Indenture provides that neither Holdings nor any of its Restricted  
Subsidiaries will, directly or indirectly, pay or cause to be paid any          
consideration, whether by way of interest, fee or otherwise, to any Holder of   
any Debentures for or as an inducement to any consent, waiver or amendment of   
any of the terms or provisions of the Indenture or the Debentures unless such   
consideration is offered to be paid or is paid to all Holders of the Debentures 
that consent, waive or agree to amend in the time frame set forth in the        
solicitation documents relating to such consent, waiver or agreement.           

SALES OF ACCOUNTS RECEIVABLE                                                    

  Holdings may, and any of its Restricted Subsidiaries may, sell at any time
and from time to time, accounts receivable and or notes receivable and related  
assets to an Accounts Receivable Subsidiary; PROVIDED that (i) the aggregate    
consideration received in each such sale is at least equal to the aggregate fair
market value of the receivables sold, as determined by the Management Committee 
in good faith, (ii) no less than 80% of the consideration received in each such 
sale consists of either cash or a promissory note (a "Promissory Note") which is
subordinated to no Indebtedness or obligation other than the financial          
institution or other entity providing the financing to the Accounts Receivable  
Subsidiary with respect to such accounts receivable (the "Financier") or an     
Equity Interest in such Accounts Receivable Subsidiary; PROVIDED FURTHER that   
the initial sale will include all accounts receivable of Holdings and/or its    
Restricted Subsidiaries that are party to such arrangements that constitute     
eligible receivables under such                                                 

86

424B3
88th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 88th
arrangements, (iii) the cash proceeds received from the initial sale less       
reasonable and customary transaction costs will be deemed to be Net Proceeds and
will be applied in accordance with the second paragraph of the covenant         
described above under the caption entitled "--Repurchase at the Option of       
Holders--Assets Sales," and (iv) Holdings and its Restricted Subsidiaries will  
sell all accounts receivable that constitute eligible receivables under such    
arrangements to the Accounts Receivable Subsidiary no less frequently than on a 
weekly basis.                                                                   

   Holdings (i) will not permit any Accounts Receivable Subsidiary to sell any
accounts receivable purchased from Holdings or any of its Restricted            
Subsidiaries to any other person except on an arms-length basis and solely for  
consideration in the form of cash or Cash Equivalents, (ii) will not permit the 
Accounts Receivable Subsidiary to engage in any business or transaction other   
than the purchase, financing and sale of accounts receivable of Holdings and its
Restricted Subsidiaries and activities incidental thereto, (iii) will not permit
any Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess 
of the book value of such Accounts Receivable Subsidiary's total assets, as     
determined in accordance with GAAP, (iv) will, at least as frequently as        
monthly, cause the Accounts Receivable Subsidiary to remit to Holdings or any of
its Restricted Subsidiaries as payment on the Promissory Notes or a dividend,   
all available cash or Cash Equivalents not held in a collection account pledged 
to a Financier, to the extent not applied to pay or maintain reserves for       
reasonable operating expenses of the Accounts Receivable Subsidiary or to       
satisfy reasonable minimum operating capital requirements and (v) will not, and 
will not permit any of its Subsidiaries to, sell accounts receivable to any     
Accounts Receivable Subsidiary upon (1) the occurrence of a Default with respect
to Holdings and its Restricted Subsidiaries and (2) the occurrence of certain   
events of bankruptcy or insolvency with respect to such Accounts Receivable     
Subsidiary.                                                                     

REPORTS                                                                         

The Indenture provides that, whether or not required by the rules and   
regulations of the Commission, so long as any Debentures are outstanding,       
Holdings will furnish to the Holders of Debentures (i) all quarterly and annual 
financial information that would be required to be contained in a filing with   
the Commission on Forms 10-Q and 10-K if Holdings was required to file such     
Forms, including a "Management's Discussion and Analysis of Financial Condition 
and Results of Operations" that describes the financial condition and results of
operations of the Issuers and their consolidated Subsidiaries and, with respect 
to the annual information only, a report thereon by the Issuers' certified      
independent accountants and (ii) all current reports that would be required to  
be filed with the Commission on Form 8-K if Holdings was required to file such  
reports, in each case within the time periods specified in the Commission's     
rules and regulations. In addition, following the consummation of the exchange  
offer contemplated by the Registration Rights Agreement, whether or not required
by the rules and regulations of the Commission, Holdings will file a copy of all
such information and reports with the Commission for public availability within 
the time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, (i) at 
all times the Commission does not accept the filings provided for in the        
preceding sentence or (ii) such filings provided for in the preceding sentence  
do not contain the information required to be delivered upon request pursuant to
Rule 144A(d)(4) under the Securities Act, then, in each case, Holdings has      
agreed that, for so long as any Debentures remain outstanding, it will furnish  
to the Holders and to securities analysts and prospective investors, upon their 
request, the information required to be delivered pursuant to Rule 144A(d)(4)   
under the Securities Act.                                                       

EVENTS OF DEFAULT AND REMEDIES                                                  

 The Indenture provides that each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on, or     
Liquidated Damages with respect to, the Debentures; (ii) default in payment when
due of the principal of or premium, if any, on the Debentures; (iii) failure by 

87

424B3
89th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 89th
Holdings or any of its Restricted Subsidiaries for 30 days after notice by the  
Trustee or by the Holders of at least 25% in principal amount of Debentures then
outstanding to comply with the provisions described under the captions "--Change
of Control," "--Asset Sales," "--Restricted Payments" or "--Incurrence of       
Indebtedness and Issuance of Disqualified Stock"; (iv) failure by Holdings or   
any of its Restricted Subsidiaries for 60 days after notice by the Trustee or by
the Holders of at least 25% in principal amount of Debentures then outstanding  
to comply with any of its other agreements in the Indenture or the Debentures;  
(v) default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money 
borrowed by Holdings or any of its Restricted Subsidiaries (or the payment of   
which is guaranteed by Holdings or any of its Restricted Subsidiaries) whether  
such Indebtedness or guarantee now exists, or is created after the date of the  
Indenture, which default (a) is caused by a failure to pay principal of or      
premium, if any, or interest on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default (a       
"Payment Default") or (b) results in the acceleration of such Indebtedness prior
to its stated maturity and, in each case, the principal amount of any such      
Indebtedness, together with the principal amount of any other such Indebtedness 
under which there has been a Payment Default or the maturity of which has been  
so accelerated, aggregates $10.0 million or more and PROVIDED that in the case  
of any guarantees, a default shall not be deemed to occur unless Holdings or    
such Restricted Subsidiary, as applicable, defaults in its payment obligations  
under such guarantee after demand has been made in accordance with the terms of 
such guarantee; (vi) failure by Holdings or any of its Restricted Subsidiaries  
to pay final judgments aggregating in excess of $10.0 million (net of any amount
with respect to which a reputable insurance company with assets over $100.0     
million has acknowledged liability in writing), which judgments are not paid,   
discharged or stayed for a period of 60 days; (vii) failure by the Company or   
its Subsidiaries to apply the proceeds from the Offering as set forth under the 
caption "Use of Proceeds" above prior to the 10th Business Day after the date of
the Indenture; and (viii) certain events of bankruptcy or insolvency with       
respect to Holdings or any of its Subsidiaries.                                 

    If any Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Debentures may      
declare all the Debentures to be due and payable immediately; PROVIDED, that so 
long as any Indebtedness permitted to be incurred pursuant to the New Credit    
Agreement or the Senior Discount Debentures shall be outstanding, such          
acceleration shall not be effective until the earlier of (i) an acceleration of 
any such Indebtedness under the New Credit Agreement or the Senior Discount     
Debentures or (ii) five business days after receipt by the Issuers of written   
notice of such acceleration. Upon such declaration, the principal of (or, if    
prior to May 1, 2003, the Accreted Value of), premium, if any, and accrued and  
unpaid interest on the Debentures shall be due and payable immediately.         
Notwithstanding the foregoing, in the case of an Event of Default arising from  
certain events of bankruptcy or insolvency, with respect to the Issuers, any    
Significant Subsidiary or any group of Subsidiaries that, taken together, would 
constitute a Significant Subsidiary, all outstanding Debentures will become due 
and payable without further action or notice. Holders of the Debentures may not 
enforce the Indenture or the Debentures except as provided in the Indenture.    
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Debentures may direct the Trustee in its exercise of any trust 
or power. The Trustee may withhold from Holders of the Debentures notice of any 
continuing Default or Event of Default (except a Default or Event of Default    
relating to the payment of principal or interest) if it determines that         
withholding notice is in their interest.                                        

In the case of any Event of Default occurring by reason of any willful  
action (or inaction) taken (or not taken) by or on behalf of the Issuers with   
the intention of avoiding payment of the premium that the Issuers would have had
to pay if the Issuers then had elected to redeem the Debentures pursuant to the 
optional redemption provisions of the Indenture, an equivalent premium shall    
also become and be immediately due and payable to the extent permitted by law   
upon the acceleration of the Debentures. If an Event of Default occurs prior to 
May 1, 2003 by reason of any willful action (or inaction) taken (or not taken)  
by or on behalf of the Issuers with the intention of avoiding the prohibition on
redemption of the                                                               

88

424B3
90th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 90th
Debentures prior to May 1, 2003, then the premium specified in the Indenture    
shall also become immediately due and payable to the extent permitted by law    
upon the acceleration of the Debentures.                                        

 The Holders of a majority in aggregate principal amount of the Debentures
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Debentures waive any existing Default or Event of Default and its           
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Debentures.             

The Issuers are required to deliver to the Trustee annually a statement 
regarding compliance with the Indenture, and the Issuers are required upon      
becoming aware of any Default or Event of Default, to deliver to the Trustee a  
statement specifying such Default or Event of Default.                          

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, MEMBERS AND            
STOCKHOLDERS                                                                

  No director, officer, employee, incorporator, member or stockholder of the
Issuers, as such, shall have any liability for any obligations of the Issuers   
under the Debentures or, the Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Debentures  
by accepting a Debenture waives and releases all such liability. The waiver and 
release are part of the consideration for issuance of the Debentures. Such      
waiver may not be effective to waive liabilities under the federal securities   
laws and it is the view of the Commission that such a waiver is against public  
policy.                                                                         

LEGAL DEFEASANCE AND COVENANT DEFEASANCE                                        

    The Issuers may, at their option and at any time, elect to have all of their
obligations discharged with respect to the outstanding Debentures ("Legal       
Defeasance") except for (i) the rights of Holders of outstanding Debentures to  
receive payments in respect of the principal of, premium and Liquidated Damages,
if any, and interest on such Debentures when such payments are due from the     
trust referred to below, (ii) the Issuers' obligations with respect to the      
Debentures concerning issuing temporary Debentures, registration of Debentures, 
mutilated, destroyed, lost or stolen Debentures and the maintenance of an office
or agency for payment and money for security payments held in trust, (iii) the  
rights, powers, trusts, duties and immunities of the Trustee, and the Issuers'  
obligations in connection therewith and (iv) the Legal Defeasance provisions of 
the Indenture. In addition, the Issuers may, at their option and at any time,   
elect to have the obligations of the Issuers released with respect to certain   
covenants that are described in the Indenture ("Covenant Defeasance") and       
thereafter any omission to comply with such obligations shall not constitute a  
Default or Event of Default with respect to the Debentures. In the event        
Covenant Defeasance occurs, certain events (not including non-payment,          
bankruptcy, receivership, rehabilitation and insolvency events) described under 
"Events of Default" will no longer constitute an Event of Default with respect  
to the Debentures.                                                              

    In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the
Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of 
the Holders of the Debentures, cash in U.S. dollars, non-callable Government    
Securities, or a combination thereof, in such amounts as will be sufficient, in 
the opinion of a nationally recognized firm of independent public accountants,  
to pay the principal of, premium, if any, and interest and Liquidated Damages on
the outstanding Debentures on the stated maturity or on the applicable          
redemption date, as the case may be, and the Issuers must specify whether the   
Debentures are being defeased to maturity or to a particular redemption date;   
(ii) in the case of Legal Defeasance, the Issuers shall have delivered to the   
Trustee an opinion of counsel in the United States reasonably acceptable to the 
Trustee confirming that (A) the Issuers have received from, or there has been   
published by, the Internal Revenue Service a ruling or (B) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in 
either case to the effect that, and based thereon such opinion of counsel shall 
confirm that, subject to customary assumptions and exceptions, the Holders of   
the outstanding Debentures will not recognize income, gain or loss for federal  
income tax purposes as a result of such Legal Defeasance and will be subject to 
federal income tax on the same amounts, in the same                             

89

424B3
91st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 91st
manner and at the same times as would have been the case if such Legal          
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the      
Issuers shall have delivered to the Trustee an opinion of counsel in the United 
States reasonably acceptable to the Trustee confirming that, subject to         
customary assumptions and exceptions, the Holders of the outstanding Debentures 
will not recognize income, gain or loss for federal income tax purposes as a    
result of such Covenant Defeasance and will be subject to federal income tax on 
the same amounts, in the same manner and at the same times as would have been   
the case if such Covenant Defeasance had not occurred; (iv) no Default or Event 
of Default shall have occurred and be continuing on the date of such deposit    
(other than a Default or Event of Default resulting from the borrowing of funds 
to be applied to such deposit) or insofar as Events of Default from bankruptcy  
or insolvency events are concerned, at any time in the period ending on the 91st
day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance 
will not result in a breach or violation of, or constitute a default under any  
material agreement or instrument (other than the Indenture) to which Holdings or
any of its Subsidiaries is a party or by which Holdings or any of its           
Subsidiaries is bound; (vi) the Issuers must have delivered to the Trustee an   
opinion of counsel to the effect that, subject to customary assumptions and     
exceptions, after the 91st day following the deposit, the trust funds will not  
be subject to the effect of any applicable bankruptcy, insolvency,              
reorganization or similar laws affecting creditors' rights generally; (vii) the 
Issuers must deliver to the Trustee an Officers' Certificate stating that the   
deposit was not made by the Issuers with the intent of preferring the Holders of
Debentures over the other creditors of the Issuers with the intent of defeating,
hindering, delaying or defrauding creditors of the Issuers or others; and (viii)
the Issuers must deliver to the Trustee an Officers' Certificate and an opinion 
of counsel, each stating that all conditions precedent provided for relating to 
the Legal Defeasance or the Covenant Defeasance have been complied with.        

TRANSFER AND EXCHANGE                                                           

A Holder may transfer or exchange Debentures in accordance with the     
Indenture. The Registrar and the Trustee may require a Holder, among other      
things, to furnish appropriate endorsements and transfer documents and the      
Issuers may require a Holder to pay any taxes and fees required by law or       
permitted by the Indenture. The Issuers are not required to transfer or exchange
any Debenture selected for redemption. Also, the Issuers are not required to    
transfer or exchange any Debenture for a period of 15 days before a selection of
Debentures to be redeemed.                                                      

   The registered Holder of a Debenture will be treated as the owner of it for
all purposes.                                                                   

AMENDMENT, SUPPLEMENT AND WAIVER                                                

  Except as provided in the next two succeeding paragraphs, the Indenture or
the Debentures may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount at maturity of the Debentures then      
outstanding (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, Debentures), and any      
existing default or compliance with any provision of the Indenture or the       
Debentures may be waived with the consent of the Holders of a majority in       
principal amount of the then outstanding Debentures (including, without         
limitation, consents obtained in connection with a purchase of, or tender offer 
or exchange offer for, Debentures).                                             

   Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Debenture held by a non-consenting Holder): (i) reduce the 
principal amount of Debentures whose Holders must consent to an amendment,      
supplement or waiver, (ii) reduce the principal of or change the fixed maturity 
of any Debenture or alter the provisions with respect to the redemption of the  
Debentures (other than provisions relating to the covenants described above     
under the caption "--Repurchase at the Option of Holders"), (iii) reduce the    
rate of or change the time for payment of interest on any Debenture, (iv) waive 
a Default or Event of Default in the payment of principal of or premium, if any,
or interest on the Debentures (except a rescission of acceleration of the       
Debentures by the Holders of at least a majority                                

90

424B3
92nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 92nd
in aggregate principal amount of the Debentures and a waiver of the payment     
default that resulted from such acceleration), (v) make any Debenture payable in
money other than that stated in the Debentures, (vi) make any change in the     
provisions of the Indenture relating to waivers of past Defaults or the rights  
of Holders of Debentures to receive payments of principal of or premium, if any,
or interest on the Debentures, (vii) waive a redemption payment with respect to 
any Debenture (other than a payment required by one of the covenants described  
above under the caption "--Repurchase at the Option of Holders") or (viii) make 
any change in the foregoing amendment and waiver provisions.                    

Notwithstanding the foregoing, without the consent of any Holder of     
Debentures, the Issuers and the Trustee may amend or supplement the Indenture or
the Debentures to cure any ambiguity, defect or inconsistency, to provide for   
uncertificated Debentures in addition to or in place of certificated Debentures,
to provide for the assumption of the Issuers' or a Subsidiary Guarantor's       
obligations to Holders of Debentures in the case of a merger or consolidation or
sale of all or substantially all of the Issuers' assets, to make any change that
would provide any additional rights or benefits to the Holders of Debentures or 
that does not adversely affect the legal rights under the Indenture of any such 
Holder, or to comply with requirements of the Commission in order to effect or  
maintain the qualification of the Indenture under the Trust Indenture Act.      

CONCERNING THE TRUSTEE                                                          

The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Issuers, to obtain payment of claims in      
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to continue
or resign.                                                                      

The Holders of a majority in principal amount of the then outstanding   
Debentures will have the right to direct the time, method and place of          
conducting any proceeding for exercising any remedy available to the Trustee,   
subject to certain exceptions. The Indenture provides that in case an Event of  
Default shall occur (which shall not be cured), the Trustee will be required, in
the exercise of its power, to use the degree of care of a prudent man in the    
conduct of his own affairs. Subject to such provisions, the Trustee will be     
under no obligation to exercise any of its rights or powers under the Indenture 
at the request of any Holder of Debentures, unless such Holder shall have       
offered to the Trustee security and indemnity satisfactory to it against any    
loss, liability or expense.                                                     

ADDITIONAL INFORMATION                                                          

  Anyone who receives this Prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to the Issuers at 1565  
Buchanan Trail East, Shady Grove, Pennsylvania 17256, Attention: Keith R.       
Simmons, Secretary.                                                             

BOOK-ENTRY; DELIVERY AND FORM                                                   

   The Exchange Debentures will initially be issued in the form of one or more
registered Exchange Debentures in global form without coupons (collectively, the
"Global Debentures").The Global Debentures will be deposited on the date of the 
closing of the exchange of the Exchange Debentures for Senior Discount          
Debentures with, or on behalf of, DTC and registered in the name of DTC or its  
nominee, in each case for credit to an account of a direct or indirect          
participant as described below.                                                 

Except as set forth below, the Global Debentures may be transferred, in 
whole and not in part, only to another nominee of DTC or to a successor DTC or  
its nominee. Beneficial interests in the Global Debentures may not be exchange  
for Debentures in certificated form except in the limited circumstances         
described below. In addition, transfers of beneficial interests in the Global   
Debentures will be subject to                                                   

91

424B3
93rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 93rd
the applicable rules and procedures of DTC and its direct or indirect           
participants, which may change from time to time.                               

    The Debentures may be presented for registration of transfer and exchange at
the offices of the Registrar.                                                   

DEPOSITARY PROCEDURES                                                           

DTC has advised the Issuers that DTC is a limited-purpose trust company 
created to hold securities for its participating organizations (collectively,   
the "Direct Participants") and to facilitate the clearance and settlement of    
transactions in those securities between Direct Participants through electronic 
book-entry changes in accounts of Participants. The Direct Participants include 
securities brokers and dealers (including the Initial Purchasers), banks, trust 
companies, clearing corporations and certain other organizations. Access to     
DTC's system is also available to other entities that clear through or maintain 
a direct or indirect, custodial relationship with a Direct Participant          
(collectively, the "Indirect Participants"). DTC may hold securities            
beneficially owned by other persons only through the Direct Participants or     
Indirect Participants and such other persons' ownership interest and transfer of
ownership interest will be recorded only on the records of the Direct           
Participant and/or Indirect Participant, and not on the records maintained by   
DTC.                                                                            

DTC has also advised the Issuers that, pursuant to DTC's procedures, (i)
upon deposit of the Global Debentures, DTC will credit the accounts of the      
Direct Participants designated by the Initial Purchasers with portions of the   
principal amount of the Global Debentures allocated by the Initial Purchasers to
such Direct Participants, and (ii) DTC will maintain records of the ownership   
interests of such Direct Participants in the Global Debentures and the transfer 
of ownership interests by and between Direct Participants. DTC will not maintain
records of the ownership interests of, or the transfer of ownership interests by
and between, Indirect Participants or other owners of beneficial interests in   
the Global Debentures. Direct Participants and Indirect Participants must       
maintain their own records of the ownership interests of, and the transfer of   
ownership interests by and between, Indirect Participants and other owners of   
beneficial interests in the Global Debentures.                                  

    Investors in the Global Debentures may hold their interests therein directly
through DTC if they are Direct Participants in DTC or indirectly through        
organizations that are Direct Participants in DTC. All ownership interests in   
any Global Debentures may be subject to the procedures and requirements of DTC. 

   The laws of some states require that certain persons take physical delivery
in definitive, certificated form of securities that they own. This may limit or 
curtail the ability to transfer beneficial interests in a Global Debenture to   
such persons. Because DTC can act only on behalf of Direct Participants, which  
in turn act on behalf of Indirect Participants and others, the ability of a     
person having a beneficial interest in a Global Debenture to pledge such        
interest to persons or entities that are not Direct Participants in DTC, or to  
otherwise take actions in respect of such interests, may be affected by the lack
of physical certificates evidencing such interests. For certain other           
restrictions on the transferability of the Debentures.                          

Except as described in "Transfers of Interests in Global Debentures for 
Certificated Debentures," owners of beneficial interests in the Global          
Debentures will not have Debentures registered in their names, will not receive 
physical delivery of Debentures in certificated form and will not be considered 
the registered owners or holders thereof under the Indenture for any purpose.   

    Under the terms of the Indenture, the Issuers and the Trustee will treat the
persons in whose names the Debentures are registered (including Debentures      
represented by Global Debentures) as the owners thereof for the purpose of      
receiving payments and for any and all other purposes whatsoever. Payments in   
respect of the principal, premium, Liquidated Damages, if any, and interest on  
Global Debentures registered in the name of DTC or its nominee will be payable  
by the Trustee to DTC or its nominee as the registered holder under the         
Indenture. Consequently, neither the Issuers, the Trustee nor any agent of the  

92

424B3
94th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 94th
Issuers or the Trustee has or will have any responsibility or liability for (i) 
any aspect of DTC's records or any Direct Participant's or Indirect             
Participant's records relating to or payments made on account of beneficial     
ownership interests in the Global Debentures or for maintaining, supervising or 
reviewing any of DTC's records or any Direct Participant's or Indirect          
Participant's records relating to the beneficial ownership interests in any     
Global Debenture or (ii) any other matter relating to the actions and practices 
of DTC or any of its Direct Participants or Indirect Participants.              

   DTC has advised the Issuers that its current payment practice (for payments
of principal, interest and the like) with respect to securities such as the     
Debentures is to credit the accounts of the relevant Direct Participants with   
such payment on the payment date in amounts proportionate to such Direct        
Participant's respective ownership interests in the Global Debentures as shown  
on DTC's records. Payments by Direct Participants and Indirect Participants to  
the beneficial owners of the Debentures will be governed by standing            
instructions and customary practices between them and will not be the           
responsibility of DTC, the Trustee or the Issuers. Neither the Issuers nor the  
Trustee will be liable for any delay by DTC or its Direct Participants or       
Indirect Participants in identifying the beneficial owners of the Debentures,   
and the Issuers and the Trustee may conclusively rely on and will be protected  
in relying on instructions from DTC or its nominee as the registered owner of   
the Debentures for all purposes.                                                

  Interests in the Global Debentures are expected to be eligible to trade in
DTC's Same-Day Funds Settlement System and, therefore, transfers between Direct 
Participants in DTC will be effected in accordance with DTC's procedures, and   
will be settled in immediately available funds. Transfers between Indirect      
Participants who hold an interest through a Direct Participant will be effected 
in accordance with the procedures of such Direct Participant but generally will 
settle in immediately available funds.                                          

DTC has advised the Issuers that it will take any action permitted to be
taken by a holder of Debentures only at the direction of one or more Direct     
Participants to whose account interests in the Global Debentures are credited   
and only in respect of such portion of the aggregate principal amount of the    
Debentures as to which such Direct Participant or Direct Participants has or    
have given direction. However, if there is an Event of Default under the        
Debentures, DTC reserves the right to exchange Global Debentures (without the   
direction of one or more of its Direct Participants) for legended Debentures in 
certificated form, and to distribute such certificated forms of Debentures to   
its Direct Participants. See "-- Transfers of Interests in Global Debentures for
Certificated Debentures."                                                       

   Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in the Global Debentures among Direct Participants, they are under 
no obligation to perform or to continue to perform such procedures, and such    
procedures may be discontinued at any time. None of the Issuers, the Initial    
Purchasers or the Trustee will have any responsibility for the performance by   
DTC, Direct and Indirect Participants of their respective obligations under the 
rules and procedures governing any of their operations.                         

 The information in this section concerning DTC, and its book-entry system
has been obtained from sources that the Issuers believe to be reliable, but the 
Issuers take no responsibility for the accuracy thereof.                        

TRANSFERS OF INTERESTS IN GLOBAL DEBENTURES FOR CERTIFICATED DEBENTURES         

An entire Global Debenture may be exchanged for definitive Debentures in
registered, certificated form without interest coupons ("Certificated           
Debentures") if (i) DTC (x) notifies the Issuers that it is unwilling or unable 
to continue as depositary for the Global Debentures and the Issuers thereupon   
fail to appoint a successor depositary within 90 days or (y) has ceased to be a 
clearing agency registered under the Exchange Act, (ii) the Issuers, at their   
option, notify the Trustee in writing that they elect to cause the issuance of  
Certificated Debentures or (iii) there shall have occurred and be continuing a  
Default or an Event of Default with respect to the Debentures. In any such case,
the Issuers will notify the Trustee in writing that, upon surrender by the      
Direct and Indirect Participants of their interest in such Global               

93

424B3
95th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 95th
Debenture, Certificated Debentures will be issued to each person that such      
Direct and Indirect Participants and DTC identify as being the beneficial owner 
of the related Debentures.                                                      

Beneficial interests in Global Debentures held by any Direct or Indirect
Participant may be exchanged for Certificated Debentures upon request to DTC, by
such Direct Participant (for itself or on behalf of an Indirect Participant),   
but only upon at least 20 days' prior written notice given to the Trustee by or 
on behalf of DTC in accordance with customary DTC procedures. Certificated      
Debentures delivered in exchange for any beneficial interest in any Global      
Debenture will be registered in the names, and issued in any approved           
denominations, requested by DTC on behalf of such Direct or Indirect            
Participants (in accordance with DTC's customary procedures).                   

Neither the Issuers nor the Trustee will be liable for any delay by the 
holder of the Global Debentures or the DTC in identifying the beneficial owners 
of Debentures, and the Issuers and the Trustee may conclusively rely on, and    
will be protected in relying on, instructions from the holder of the Global     
Debenture or the DTC for all purposes.                                          

SAME DAY SETTLEMENT AND PAYMENT                                                 

The Indenture requires that payments in respect of the Debentures       
represented by the Global Debentures (including principal, premium, if any,     
interest and Liquidated Damages, if any) be made by wire transfer of immediately
available funds to the accounts specified by the holder of such Global          
Debenture. With respect to Certificated Debentures, the Issuers will make all   
payments of principal, premium, if any, interest and Liquidated Damages, if any,
by wire transfer of immediately available funds to the accounts specified by the
holders thereof or, if no such account is specified, by mailing a check to each 
such holder's registered address. The Issuers expect that secondary trading in  
the Certificated Debentures will also be settled in immediately available funds.

REGISTRATION RIGHTS; LIQUIDATED DAMAGES                                         

   The Issuers and the Initial Purchasers entered into the Registration Rights
Agreement on April 29, 1998. Pursuant to the Registration Rights Agreement, the 
Issuers agreed to file with the Commission this Registration Statement under the
Securities Act with respect to the Debentures. As required by the Registration  
Rights Agreement, upon the effectiveness of the Registration Statement, the     
Issuers will offer to the Holders of Transfer Restricted Securities (as defined)
that are able to make certain representations the opportunity to exchange their 
Transfer Restricted Securities for Exchange Debentures. If (i) the Issuers are  
not required to file the Registration Statement or permitted to consummate the  
Exchange Offer because the Exchange Offer is not permitted by applicable law or 
Commission policy or (ii) any Holder of Transfer Restricted Securities notifies 
the Issuers prior to the 20th day following consummation of the Exchange Offer  
that (A) such Holder is prohibited by law or Commission policy from             
participating in the Exchange Offer or (B) that it may not resell the Exchange  
Debentures acquired by it in the Exchange Offer to the public without delivering
a Prospectus and the Prospectus contained in the Registration Statement is not  
appropriate or available for such resales or (C) that it is a broker-dealer and 
owns Debentures acquired directly from the Issuers or an affiliate of the       
Issuers, the Issuers will file with the Commission a shelf registration         
statement to cover resales of the Transfer Restricted Securities by the Holders 
thereof who satisfy certain conditions relating to the provision of information 
in connection with the shelf registration statement. The Issuers will use their 
best efforts to cause the applicable registration statement to be declared      
effective as promptly as possible by the Commission. For purposes of the        
foregoing, "Transfer Restricted Securities" means each Senior Discount Debenture
until the date on which such Senior Discount Debenture (i) is exchanged in the  
Exchange Offer for an Exchange Debenture which is entitled to be resold to the  
public by the holder thereof without complying with prospectus delivery         
requirements of the Securities Act, (ii) has been disposed of in accordance with
a shelf registration statement (and the purchasers thereof have been issued     
Exchange Debentures), or (iii) is distributed to the public pursuant to Rule 144
under the Securities Act or is saleable pursuant to Rule 144(k) under the       

94

424B3
96th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 96th
Securities Act and each Exchange Debenture until the date on which such Exchange
Debenture is disposed of by a broker-dealer pursuant to the "Plan of            
Distribution" contemplated by this Registration Statement.                      

    Pursuant to the Registration Rights Agreement, the Issuers were obligated to
file this Registration Statement with the Commission on or before June 29, 1998 
(60 days after the Closing Date). In addition, the Registration Rights Agreement
provides that (i) the Issuers will use their best efforts to have the           
Registration Statement declared effective by the Commission on or prior to      
October 29, 1998 (180 days after the Closing Date), (ii) unless the Exchange    
Offer would not be permitted by applicable law or Commission policy, the Issuers
will commence the Exchange Offer and use their best efforts to issue on or prior
to 30 business days after the date on which the Registration Statement is       
declared effective by the Commission, Exchange Debentures in exchange for all   
Debentures tendered prior thereto in the Exchange Offer and (iii) if obligated  
to file a shelf registration statement, the Issuers will use their best efforts 
to file the shelf registration statement with the Commission on or prior to 60  
days after such filing obligation arises and to cause the shelf registration    
statement to be declared effective by the Commission on or prior to 120 days    
after such obligation arises. If (a) the Issuers fail to file any of the        
registration statements required by the Registration Rights Agreement on or     
before the date specified for such filing, (b) any of such registration         
statements is not declared effective by the Commission on or prior to the date  
specified for such effectiveness (the "Effectiveness Target Date"), (c) the     
Issuers fail to consummate the Exchange Offer within 30 business days of the    
Effectiveness Target Date with respect to the Registration Statement, or (d)    
this Registration Statement or a shelf registration statement is declared       
effective but thereafter ceases to be effective or usable in connection with    
resales of Transfer Restricted Securities during the periods specified in the   
Registration Rights Agreement (each such event referred to in clauses (a)       
through (d) above a "Registration Default"), then the Issuers will pay          
Liquidated Damages to each Holder of Debentures, with respect to the first      
90-day period immediately following the occurrence of the first Registration    
Default in an amount equal to $.05 per week per $1,000 principal amount of      
Debentures held by such Holder. The amount of the Liquidated Damages will       
increase by an additional $.05 per week per $1,000 principal amount of          
Debentures with respect to each subsequent 90-day period until all Registration 
Defaults have been cured, up to a maximum amount of Liquidated Damages for all  
Registration Defaults of $.50 per week per $1,000 principal amount of           
Debentures. All accrued Liquidated Damages will be paid by the Issuers on each  
Damages Payment Date to the Global Debenture Holder by wire transfer of         
immediately available funds or by federal funds check and to Holders of         
Certificated Securities by wire transfer to the accounts specified by them or by
mailing checks to their registered addresses if no such accounts have been      
specified. Following the cure of all Registration Defaults, the accrual of      
Liquidated Damages will cease.                                                  

 Holders of Debentures are required to make certain representations to the
Issuers (as described in the Registration Rights Agreement) in order to         
participate in the Exchange Offer and are required to deliver certain           
information to be used in connection with a shelf registration statement and to 
provide comments on the shelf registration statement within the time periods set
forth in the Registration Rights Agreement in order to have their Debentures    
included in the shelf registration statement and benefit from the provisions    
regarding Liquidated Damages set forth above. See "The Exchange Offer."         

   The foregoing description of the Registration Rights Agreement is a summary
only and does not purport to be complete. This summary is qualified in its      
entirety by reference to all provisions of the Registration Rights Agreement    
which as been filed as an exhibit to the Registration Statement of which this   
Prospectus forms a part.                                                        

CERTAIN DEFINITIONS                                                             

  Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.        

95

424B3
97th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 97th
"ACCOUNTS RECEIVABLE SUBSIDIARY"  means a Wholly Owned Subsidiary of    
Holdings (i) which is formed solely for the purpose of, and which engages in no 
activities other than activities in connection with, financing accounts         
receivable and/or notes receivable and related assets of Holdings and/or its    
Restricted Subsidiaries, (ii) which is designated by the Management Committee of
Holdings as an Accounts Receivables Subsidiary pursuant to a Management         
Committee resolution set forth in an Officers' Certificate and delivered to the 
Trustee, (iii) that has total assets at the time of such designation with a book
value not exceeding $100,000 plus the reasonable fees and expenses required to  
establish such Accounts Receivable Subsidiary and any accounts receivable       
financing, (iv) no portion of Indebtedness or any other obligation (contingent  
or otherwise) of which (a) is at any time recourse to or obligates Holdings or  
any Restricted Subsidiary of Holdings in any way, other than pursuant to (I)    
representations and covenants entered into in the ordinary course of business in
connection with the sale of accounts receivable and/or notes receivable to such 
Accounts Receivable Subsidiary or (II) any guarantee of any such accounts       
receivable financing by Holdings that is permitted to be incurred pursuant to   
the covenant described under the caption entitled "--Certain                    
Covenants--Incurrence of Indebtedness and Issuance of Disqualified Stock," or   
(b) subjects any property or asset of Holdings or any Restricted Subsidiary of  
Holdings, directly or indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to (I) representations and covenants entered into  
in the ordinary course of business in connection with sales of accounts         
receivable and/or notes receivable or (II) any guarantee of any such accounts   
receivable financing by Holdings that is permitted to be incurred pursuant to   
the covenant described under the caption entitled "--Certain                    
Covenants--Incurrence of Indebtedness and Issuance of Disqualified Stock," (v)  
with which neither Holdings nor any Restricted Subsidiary of Holdings has any   
contract, agreement, arrangement or understanding other than contracts,         
agreements, arrangements and understandings entered into in the ordinary course 
of business in connection with sales of accounts receivable and/or notes        
receivable in accordance with the covenant described under the caption          
"--Certain Covenants--Sales of Accounts Receivable" and fees payable in the     
ordinary course of business in connection with servicing accounts receivable    
and/or notes receivable and (vi) with respect to which neither Holdings nor any 
Restricted Subsidiary of Holdings has any obligation (a) to subscribe for       
additional shares of Capital Stock or other Equity Interests therein or make any
additional capital contribution or similar payment or transfer thereto other    
than in connection with the sale of accounts receivable and/or notes receivable 
to such Accounts Receivable Subsidiary in accordance with the covenant described
under "--Certain Covenants--Sales of Accounts Receivable" or (b) to maintain or 
preserve solvency or any balance sheet item, financial condition, level of      
income or results of operations thereof.                                        

 "ACCRETED VALUE"  means, for each $1,000 face amount of Debentures, as of
any date of determination prior to May 1, 2003, the sum of (i) the initial      
offering price of each Debenture and (ii) that portion of the excess of the     
principal amount of each Debenture over such initial offering price which shall 
have been accreted thereon through such date, such amount to be so accreted on a
daily basis and compounded semi-annually on each May 1 and November 1 at the    
rate of 11 5/8% per annum from the date of issuance of the Debentures through   
the date of determination.                                                      

"ACQUIRED DEBT"  means, with respect to any specified Person, (i)       
Indebtedness of any other Person existing at the time such other Person is      
merged with or into or became a Subsidiary of such specified Person, including, 
without limitation, Indebtedness incurred in connection with, or in             
contemplation of, such other Person merging with or into or becoming a          
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien    
encumbering any asset acquired by such specified Person.                        

"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 purposes of this definition, "control"  
(including, with correlative meanings, the terms "controlling," "controlled by" 
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the     
direction of the management or policies of such Person,                         

96

424B3
98th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 98th
whether through the ownership of voting securities, by agreement or otherwise;  
provided that beneficial ownership of 10% or more of the Voting Stock of a      
Person shall be deemed to be control.                                           

   "ASSET SALE"  means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and       
leaseback) other than (A) in the ordinary course of business or (B) sales or    
other dispositions of accounts receivable and/or notes receivable and related   
assets to (x) the Accounts Receivable Subsidiary in accordance with the covenant
described under the caption "--Certain Covenants--Sale of Accounts Receivable"  
and (y) one or more financial institutions in connection with a Dealer Financing
Program or factoring arrangements as in existence on the date of the Indenture  
(provided that, in each case, the sale, lease, conveyance or other disposition  
of all or substantially all of the assets of Holdings and its Subsidiaries      
(determined on a consolidated basis) are governed by the provisions of the      
Indenture described above under the caption "--Change of Control" and/or the    
provisions described above under the caption "--Limitation on Leases" and not by
the provisions of the Asset Sale covenant), and (ii) the issue or sale by       
Holdings or any of its Subsidiaries of Equity Interests of any of the Holdings' 
Subsidiaries, in the case of either clause (i) or (ii), whether in a single     
transaction or a series of related transactions (a) that have a fair market     
value in excess of $2.5 million or (b) for net proceeds in excess of $2.5       
million. Notwithstanding the foregoing, the following items shall not be deemed 
to be Asset Sales: (i) a transfer of assets by the Issuers to a Wholly Owned    
Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to the Issuers 
or to another Wholly Owned Restricted Subsidiary, (ii) an issuance of Equity    
Interests by a Wholly Owned Restricted Subsidiary to the Issuers or to another  
Wholly Owned Restricted Subsidiary, (iii) a Restricted Payment that is permitted
by the covenant described above under the caption "--Restricted Payments," (iv) 
the sale and leaseback of any assets within 90 days of the acquisition of such  
assets; PROVIDED that such sale and leaseback complies with the covenant        
described above under the caption "--Sale and Leaseback Transactions", (v)      
foreclosures of assets, and (vi) the sale at fair market value of property or   
equipment that has become worn out, obsolete or damaged or otherwise unsuitable 
for use in connection with the business of Holdings or any Restricted           
Subsidiary, as the case may be, in the ordinary course of business.             

  "ATTRIBUTABLE DEBT"  in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of      
interest implicit in such transaction, determined in accordance with GAAP) of   
the obligation of the lessee for net rental payments during the remaining term  
of the lease included in such sale and leaseback transaction (including any     
period for which such lease has been extended or may, at the option of the      
lessor, be extended).                                                           

  "BORROWING BASE"  means, as of any date, an amount equal to the sum of 85%
of the face amount of all accounts receivable and notes receivable owned by     
Holdings and its Restricted Subsidiaries as of such date that are not more than 
90 days past due, as calculated on a consolidated basis and in accordance with  
GAAP. To the extent that information is not available as to the amount of       
accounts receivable and notes receivable as of a specific date, Holdings may    
utilize the most recent available information for purposes of calculating the   
Borrowing Base.                                                                 

   "CAPITAL LEASE OBLIGATION"  means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.                                                                           

 "CAPITAL STOCK"  means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,      
interests, participations, rights or other equivalents (however designated) of  
corporate stock, (iii) in the case of a partnership or limited liability        
company, partnership or membership interests (whether general or limited) and   
(iv) any other interest or participation that confers on a Person the right to  
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.                                                                 

97

424B3
99th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 99th
   "CASH EQUIVALENTS"  means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or  
any agency or instrumentality thereof (provided that the full faith and credit  
of the United States is pledged in support thereof) having maturities of not    
more than one year from the date of acquisition, (iii) certificates of deposit  
and eurodollar time deposits with maturities of one year or less from the date  
of acquisition, bankers' acceptances with maturities not exceeding one-year and 
overnight bank deposits, in each case with any domestic commercial bank having  
capital and surplus in excess of $500 million, (iv) repurchase obligations with 
a term of not more than thirty days for underlying securities of the types      
described in clauses (ii) and (iii) above entered into with any financial       
institution meeting the qualifications specified in clause (iii) above, (v)     
obligations issued or fully guaranteed by any state of the United States of     
America or any political subdivision of any such state or any public            
instrumentality thereof maturing within one year from the date of acquisition   
thereof and, at the time of acquisition, having one of the two highest ratings  
obtainable from either Standard & Poor's Corporation or Moody's Investors       
Service, Inc., (vi) commercial paper having the highest rating obtainable from  
Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each    
case maturing within one year after the date of acquisition and (vii) money     
market funds at least 95% of the assets of which constitute Cash Equivalents of 
the kinds described in clauses (i) through (vii) of this definition.            

"CODE"  means the Internal Revenue Code of 1986, as amended.            

   "CONSOLIDATED CASH FLOW"  means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount   
equal to any extraordinary or nonrecurring loss plus any net loss realized in   
connection with an Asset Sale or the extinguishment of any Indebtedness (to the 
extent such losses were deducted in computing such Consolidated Net Income),    
plus (ii) provision for taxes based on income or profits or the Tax Amount of   
such Person and its Subsidiaries for such period or, following the              
reorganization of Holdings as a corporation, any tax sharing payment made       
pursuant to a tax sharing agreement executed in connection therewith, in each   
case, to the extent that such provision for taxes was included in computing such
Consolidated Net Income, plus (iii) consolidated interest expense of such Person
and its Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance costs 
and original issue discount, non-cash interest payments, the interest component 
of any deferred payment obligations, the interest component of all payments     
associated with Capital Lease Obligations, imputed interest with respect to     
Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments 
(if any) pursuant to Hedging Obligations), to the extent that any such expense  
was deducted in computing such Consolidated Net Income, plus (iv) depreciation, 
amortization (including amortization of goodwill and other intangibles but      
excluding amortization of prepaid cash expenses that were paid in a prior       
period) and other non-cash expenses (excluding any such non-cash expense to the 
extent that it represents an accrual of or reserve for cash expenses in any     
future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Subsidiaries for such period to the extent that  
such depreciation, amortization and other non-cash expenses were deducted in    
computing such Consolidated Net Income, plus (v) any interest expense on        
Indebtedness of another person that is guaranteed by such person or a Subsidiary
of such person or secured by a Lien on the assets of such person or one of its  
Subsidiaries (to the extent that such interest expense was deducted in computing
Consolidated Net Income in such period), plus (vi) any charges of up to $30.0   
million relating to a facility closing, plus (vii) any charges of up to $16.0   
million resulting from fees payable to the George Group in connection with the  
consulting arrangements with Holdings or its Restricted Subsidiaries, plus      
(viii) one-time expenses associated with inventory, research and development and
other write-ups resulting from purchase accounting adjustments at the time of   
the Transactions or any other permitted acquisition (to the extent such expenses
were deducted in computing Consolidated Net Income in such period), plus (ix)   
any expenses or charges related to any Equity Offering, Permitted Investment or 
Indebtedness permitted to be incurred by the Indenture (including such expenses 
or charges related to the Transactions) and deducted in such period in computing
Consolidated Net Income, minus (x) non-cash items increasing such Consolidated  
Net Income for such period, in each case, on a consolidated basis and determined
in                                                                              

98

424B3
100th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 100th
accordance with GAAP. Notwithstanding the foregoing, the provision for taxes    
based on the income or profits of, and the depreciation and amortization and    
other non-cash charges of, a Subsidiary of a Person shall be added to           
Consolidated Net Income to compute Consolidated Cash Flow only to the extent    
(and in the same proportion) that the Net Income of such Subsidiary was included
in calculating the Consolidated Net Income of such Person and only if a         
corresponding amount would be permitted at the date of determination to be      
dividended to Holdings by such Subsidiary without prior approval (that has not  
been obtained), pursuant to the terms of its charter and all judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that         
Subsidiary or its stockholders.                                                 

    "CONSOLIDATED NET INCOME"  means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Subsidiaries for such    
period, on a consolidated basis, determined in accordance with GAAP; PROVIDED   
that (i) the Net Income (but not loss) of any Person that is not a Subsidiary   
(other than Holdings) or that is accounted for by the equity method of          
accounting shall be included only to the extent of the amount of dividends or   
distributions paid in cash (or converted into cash) to the referent Person or a 
Wholly Owned Restricted Subsidiary thereof, (ii) the Net Income of any          
Restricted Subsidiary shall be excluded to the extent that the declaration or   
payment of dividends or similar distributions by that Subsidiary of that Net    
Income is not at the date of determination permitted without any prior          
governmental approval (that has not been obtained) or, directly or indirectly,  
by operation of the terms of its charter or any judgment, decree, order,        
statute, rule or governmental regulation applicable to that Subsidiary or its   
stockholders, unless such restriction with respect to the payment of dividends  
or in similar distributions has been legally waived, provided that Consolidated 
Net Income of Holdings shall be increased by the amount of dividends or other   
distributions or other payments paid in cash (or to the extent converted into   
cash) to the referent person or a Wholly Owned Restricted Subsidiary thereof in 
respect of such period, (iii) the Net Income of any Person acquired in a pooling
of interests transaction for any period prior to the date of such acquisition   
shall be excluded, (iv) the cumulative effect of a change in accounting         
principles shall be excluded and (v) the Net Income (but not loss) of any       
Unrestricted Subsidiary shall be excluded, whether or not distributed to        
Holdings or one of its Subsidiaries.                                            

   "CREDIT FACILITIES"  means, with respect to the Issuers or their Restricted
Subsidiaries, one or more debt facilities (including, without limitation, the   
New Credit Facility) or commercial paper facilities with banks or other         
institutional lenders providing for revolving credit loans, term loans,         
receivables financing (including through the sale or factoring of receivables to
such lenders or to special purpose entities formed to borrow from such lenders  
against such receivables) or letters of credit, in each case, as amended,       
restated, modified, renewed, refunded, replaced or refinanced in whole or in    
part from time to time.                                                         

"DEALER FINANCING PROGRAM"  means (x) that certain financing program    
pursuant to which (i) distributors of Holdings and its Restricted Subsidiaries  
can obtain up to 366-day inventory financing for the purchase of the Holdings'  
Subsidiaries' products, (ii) units financed will generate secured notes         
receivable, accounts receivable, chattel paper, instruments or other intangibles
(collectively, "Receivables"), which Holdings or its Restricted Subsidiaries may
sell, from time to time, to financial institutions at 100% of face value and    
(iii) Holdings or its Restricted Subsidiaries will insure (with a nationally    
recognized insurance company with at least $100.0 million in assets) at least   
85% of the payment obligations relating to such Receivables and (y) factoring or
discounting arrangements as in effect on the date of the Indenture or entered   
into in the ordinary course of business consistent with past practice.          

    "DEFAULT"  means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.                                 

   "DISQUALIFIED STOCK"  means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is          
exchangeable, at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund         
obligation or otherwise, or redeemable at the option of the Holder thereof, in  
whole or in part, on or prior to the date                                       

99

424B3
101st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 101st
that is 91 days after the date on which the Debentures mature; PROVIDED,        
HOWEVER, that any Capital Stock that would constitute Disqualified Stock solely 
because the holders thereof have the right to require the Issuers to repurchase 
such Capital Stock upon the occurrence of a Change of Control or an Asset Sale  
shall not constitute Disqualified Stock if the terms of such Capital Stock      
provide that the Issuers may not repurchase or redeem any such Capital Stock    
pursuant to such provisions unless such repurchase or redemption complies with  
the covenant described above under the caption "--Certain Covenants-- Restricted
Payments"; and PROVIDED FURTHER, that Capital Stock issued to any plan for the  
benefit of employees of Holdings or its subsidiaries or by any such plan to such
employees shall not constitute Disqualified Stock solely because it may be      
required to be repurchased by Holdings in order to satisfy applicable statutory 
or regulatory obligations.                                                      

"EQUIPMENT FINANCING GUARANTEES"  means guarantees (including but not   
limited to repurchase or remarketing obligations, residual value guarantees,    
conditional loss guarantees or first loss guarantees) by Holdings or a          
Restricted Subsidiary incurred in the ordinary course of business consistent    
with past practice of Indebtedness incurred by a distributor, or other purchaser
or lessor, for the purchase of inventory manufactured or sold by Holdings or a  
Restricted Subsidiary, the proceeds of which Indebtedness is used solely to pay 
the purchase price of such inventory to such distributor or other purchaser or  
lessor and any related reasonable fees and expenses (including financing fees); 
PROVIDED, HOWEVER, that (1) to the extent commercially practicable, the         
Indebtedness so guaranteed is secured by a Lien on such inventory in favor of   
the holder of such Indebtedness, and (2) if Holdings or such Restricted         
Subsidiary is required to make payment with respect to such guarantee, Holdings 
or such Restricted Subsidiary will have the right to receive either (q) title to
such inventory, (r) a valid assignment of a Lien in such inventory or (s) the   
net proceeds of any resale of such inventory.                                   

  "EQUITY INTERESTS"  means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is        
convertible into, or exchangeable for, Capital Stock).                          

 "EXISTING INDEBTEDNESS"  means up to $15.0 million in aggregate principal
amount of Indebtedness of Holdings and its Subsidiaries (other than Indebtedness
under the New Credit Agreement) in existence on the date of the Indenture, until
such amounts are permanently repaid.                                            

"FIXED CHARGE COVERAGE RATIO"  means with respect to any Person for any 
period, the ratio of the Consolidated Cash Flow of such Person for such period  
to the Fixed Charges of such Person for such period. In the event that the      
referent Person or any of its Restricted Subsidiaries incurs, assumes,          
Guarantees or redeems any Indebtedness (other than revolving credit borrowings) 
or issues or redeems preferred equity subsequent to the commencement of the     
period for which the Fixed Charge Coverage Ratio is being calculated but prior  
to the date on which the event for which the calculation of the Fixed Charge    
Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage 
Ratio shall be calculated giving pro forma effect to such incurrence,           
assumption, Guarantee or redemption of Indebtedness, or such issuance or        
redemption of preferred equity, as if the same had occurred at the beginning of 
the applicable four-quarter reference period. In addition, for purposes of      
making the computation referred to above, (i) acquisitions that have been made  
by Holdings or any of its Restricted Subsidiaries, including through mergers or 
consolidations and including any related financing transactions, during the     
four-quarter reference period or subsequent to such reference period and on or  
prior to the Calculation Date shall be deemed to have occurred on the first day 
of the four-quarter reference period and Consolidated Cash Flow for such        
reference period shall be calculated without giving effect to clause (iii) of   
the proviso set forth in the definition of Consolidated Net Income and shall    
reflect any pro forma adjustments for expenses and cost reductions attributable 
to such acquisitions (to the extent such adjustments are (x) realizable within  
twelve months of the date of the acquisition and (y) based on pro forma         
financial statements reviewed by Holdings' accountants), (ii) the Consolidated  
Cash Flow attributable to discontinued operations, as determined in accordance  
with GAAP, and operations or businesses disposed of prior to the Calculation    
Date, shall be excluded, (iii) the Fixed Charges attributable to discontinued   
operations, as                                                                  

100 

424B3
102nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 102nd
determined in accordance with GAAP, and operations or businesses disposed of    
prior to the Calculation Date, shall be excluded, but only to the extent that   
the obligations giving rise to such Fixed Charges will not be obligations of the
referent Person or any of its Restricted Subsidiaries following the Calculation 
Date, and (iv) the amount of interest expense attributable to financings        
pursuant to the Dealer Financing Program shall be subtracted from the numerator 
and excluded from the denominator in calculating the Fixed Charge Coverage Ratio
PROVIDED that the interest income from such financings exceeds interest expense.

   "FIXED CHARGES"  means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of debt issuance costs and original issue      
discount, non-cash interest payments, the interest component of any deferred    
payment obligations, the interest component of all payments associated with     
Capital Lease Obligations, imputed interest with respect to Attributable Debt,  
commissions, discounts and other fees and charges incurred in respect of letter 
of credit or bankers' acceptance financings, and net payments (if any) pursuant 
to Hedging Obligations; PROVIDED, however, that in no event shall any           
amortization of deferred financing costs incurred in connection with the        
Transactions be included in fixed charges) and (ii) the consolidated interest of
such Person and its Restricted Subsidiaries that was capitalized during such    
period, and (iii) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a 
Lien on assets of such Person or one of its Subsidiaries (whether or not such   
Guarantee or Lien is called upon) excluding, however, guarantees incurred in    
connection with (a) any Equipment Financing Guarantee or (b) residual value     
guarantees, conditional loss guarantees and similar financings allowed to be    
incurred pursuant to the covenant described above under the caption "Incurrence 
of Indebtedness and Issuance of Preferred Stock" and (iv) if and for so long as 
such Person is taxed as a partnership for federal income tax purposes, all cash 
dividend payments or other distributions of property on any series of preferred 
stock of such Person or, if such Person is taxed as a corporation for federal   
income tax purposes, the product of (a) all cash dividend payments or other     
distributions of property (and non-cash dividend payments in the case of a      
Person that is a Subsidiary) on any series of preferred equity of such Person   
times (b) a fraction, the numerator of which is one and the denominator of which
is one minus the then current combined federal, state and local statutory tax   
rate of such Person expressed as a decimal, in each case, on a consolidated     
basis and in accordance with GAAP.                                              

"GAAP"  means generally accepted accounting principles set forth in the 
opinions and pronouncements of the Accounting Principles Board of the American  
Institute of Certified Public Accountants and statements and pronouncements of  
the Financial Accounting Standards Board or in such other statements by such    
other entity as have been approved by a significant segment of the accounting   
profession, which are in effect on the date of the Indenture.                   

 "GEORGE GROUP"  means The George Group, Inc. a Texas corporation, and its
successors.                                                                     

"GUARANTEE"  means a guarantee (other than by endorsement of negotiable 
instruments for collection in the ordinary course of business), direct or       
indirect, in any manner (including, without limitation, by way of a pledge of   
assets or through letters of credit or reimbursement agreements in respect      
thereof), of all or any part of any Indebtedness.                               

    "HEDGING OBLIGATIONS"  means, with respect to any Person, the obligations of
such Person under (i) interest rate or currency swap agreements, interest rate  
cap agreements and interest rate collar agreements, (ii) other agreements or    
arrangements designed to protect such Person against fluctuations in interest or
currency exchange rates and (iii) commodities purchase and sale agreements and  
other similar agreements designed to protect such Person against fluctuations in
the price of raw materials used by Holdings or its Restricted Subsidiaries in   
the ordinary course of business.                                                

101 

424B3
103rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 103rd
   "INDEBTEDNESS"  means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by 
bonds, notes, debentures or similar instruments or letters of credit (or        
reimbursement agreements in respect thereof) or banker's acceptances or         
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except  
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing (other than letters of credit and Hedging       
Obligations) would appear as a liability upon a balance sheet of such Person    
prepared in accordance with GAAP, as well as all Indebtedness of others secured 
by a Lien on any asset of such Person (whether or not such Indebtedness is      
assumed by such Person) and, to the extent not otherwise included, the Guarantee
by such Person of any indebtedness of any other Person. The amount of any       
Indebtedness (other than Hedging Obligations and guarantees) outstanding as of  
any date shall be (i) the accreted value thereof, in the case of any            
Indebtedness issued with original issue discount, and (ii) the principal amount 
thereof, together with any interest thereon that is more than 30 days past due, 
in the case of any other Indebtedness.                                          

  "INVESTMENT GRADE SECURITIES"  means (i) securities issued or directly and
fully guaranteed or insured by the United States government or any agency or    
instrumentality thereof (other than Cash Equivalents), (ii) debt securities or  
debt instruments with a rating of BBB- or higher by Standard and Poor's         
Corporation or Baa3 or higher by Moody's Investors Services, Inc. or the        
equivalent of such rating by such rating organization, or, if no rating of      
Standard and Poor's Corporation or Moody's Investors Services, Inc. then exists,
the equivalent of such rating by any other nationally recognized securities     
rating agency, but excluding any debt securities or instruments constituting    
loans or advances among Holdings and its Subsidiaries, and (iii) investments in 
any fund that invests exclusively in investments of the type described in       
clauses (i) and (ii) which fund may also hold immaterial amounts of cash pending
investment and/or distribution.                                                 

 "INVESTMENTS"  means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or        
indirect loans (including guarantees of Indebtedness or other obligations),     
advances or capital contributions (excluding commission, travel and similar     
advances to officers and employees made in the ordinary course of business),    
purchases or other acquisitions for consideration of Indebtedness, Equity       
Interests or other securities, together with all items that are or would be     
classified as investments on a balance sheet prepared in accordance with GAAP;  
PROVIDED that an acquisition of assets, Equity Interests or other securities by 
the Issuers or any of their Restricted Subsidiaries for consideration consisting
solely of Equity Interests (other than Disqualified Stock) of Holdings shall not
be deemed to be an Investment. If Holdings or any Restricted Subsidiary of      
Holdings sells or otherwise disposes of any Equity Interests of any direct or   
indirect Restricted Subsidiary of Holdings such that, after giving effect to any
such sale or disposition, such Person is no longer a Restricted Subsidiary of   
Holdings, Holdings shall be deemed to have made an Investment on the date of any
such sale or disposition equal to the fair market value of the Equity Interests 
of such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of the covenant described above under the       
caption "--Restricted Payments."                                                

"LIEN"  means, with respect to any asset, any mortgage, lien, pledge,   
charge, security interest or encumbrance of any kind in respect of such asset,  
whether or not filed, recorded or otherwise perfected under applicable law      
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security    
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).      

"MANAGEMENT COMMITTEE"  means (i) for so long as Holdings is a limited  
liability company, the Management Committee of Holdings and (ii) otherwise the  
Board of Directors of Holdings.                                                 

102 

424B3
104th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 104th
   "NET INCOME"  means, with respect to any Person for any period, (i) the net
income (loss) of such Person, determined in accordance with GAAP and before any 
reduction in respect of dividends on preferred interests, excluding, however,   
(a) any gain (but not loss), together with any related provision for taxes or   
Tax Distributions on such gain (but not loss), realized in connection with (1)  
any Asset Sale (including, without limitation, dispositions pursuant to sale and
leaseback transactions) or (2) the disposition of any securities by such Person 
or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness 
of such Person or any of its Restricted Subsidiaries and (b) any extraordinary  
or nonrecurring gain (but not loss), together with any related provision for    
taxes or Tax Distributions on such extraordinary or nonrecurring gain (but not  
loss) less (ii) in the case of any Person that is a partnership or limited      
liability company, the Tax Amount of such person for such period.               

 "NET PROCEEDS"  means the aggregate cash proceeds received by Holdings or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,     
without limitation, any cash received upon the sale or other disposition of any 
non-cash consideration received in any Asset Sale), net of the direct costs     
relating to such Asset Sale (including, without limitation, legal, accounting   
and investment banking fees, and sales commissions) and any relocation expenses 
incurred as a result thereof, any taxes or Tax Distributions paid or payable as 
a result thereof (after taking into account any available tax credits or        
deductions and any tax sharing arrangements), and any reserve for adjustment in 
respect of the sale price of such asset or assets established in accordance with
GAAP.                                                                           

    "NEW CREDIT AGREEMENT"  means that certain New Credit Agreement, dated as of
the date of the Indenture by and among Grove, Grove Capital and Chase Bank of   
Texas, National Association, as administrative agent, BankBoston N.A., as       
syndication agent and Donaldson, Lufkin & Jenrette Securities Corporation, as   
documentation agent, and certain other lenders party thereto, providing for up  
to $125 million of revolving credit borrowings and $200 million, of term        
borrowings, including any related Debentures, guarantees, collateral documents, 
instruments and agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time. 

    "NEW CREDIT FACILITY"  means, with respect to the Issuers and the Restricted
Subsidiaries, one or more debt facilities (including, without limitation, the   
New Credit Agreement) or commercial paper facilities with banks or other        
institutional lenders providing for revolving credit loans, term loans,         
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such  
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.

    "NON-RECOURSE DEBT"  means Indebtedness (i) as to which neither Holdings nor
any of its Restricted Subsidiaries (a) provides credit support of any kind      
(including any undertaking, agreement or instrument that would constitute       
Indebtedness), (b) is directly or indirectly liable (as a guarantor or          
otherwise), or (c) constitutes the lender; and (ii) no default with respect to  
which (including any rights that the holders thereof may have to take           
enforcement action against an Unrestricted Subsidiary) would permit (upon       
notice, lapse of time or both) any holder of any other Indebtedness (other than 
the Debentures being offered hereby) of Holdings or any of its Restricted       
Subsidiaries to declare a default on such other Indebtedness or cause the       
payment thereof to be accelerated or payable prior to its stated maturity; and  
(iii) as to which the lenders have been notified in writing that they will not  
have any recourse to the stock or assets of Holdings or any of its Restricted   
Subsidiaries.                                                                   

"OBLIGATIONS"  means any principal, interest, penalties, fees,          
indemnifications, reimbursements, damages and other liabilities and obligations 
payable under the documentation governing any Indebtedness.                     

  "PERMITTED BUSINESS"  means any of the businesses and any other businesses
related to the businesses engaged in by Holdings and its respective Restricted  
Subsidiaries on the date of the Indenture.                                      

103 

424B3
105th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 105th
  "PERMITTED GEORGE GROUP TRANSACTIONS"  means, for purposes of the covenant
described above under the caption "--Transactions with Affiliates," consulting  
arrangements with the George Group and its affiliates and any payments for fees 
and expenses thereunder made, provided that such payments shall not exceed $8.0 
million in any fiscal year (with such amount being subject to reasonable        
adjustments in connection with advisory and consulting services rendered in     
connection with Permitted Investments).                                         

    "PERMITTED INVESTMENTS"  means (a) any Investment in Holdings or in a Wholly
Owned Restricted Subsidiary of Holdings and is engaged in a Permitted Business; 
(b) any Investment in Cash Equivalents and Investment Grade Securities; (c) any 
Investment by Holdings or any Restricted Subsidiary of the Company in a Person, 
if as a result of such Investment (i) such Person becomes a Wholly Owned        
Restricted Subsidiary of the Company and is engaged in a Permitted Business or  
(ii) such Person is merged, consolidated or amalgamated with or into, or        
transfers or conveys substantially all of its assets to, or is liquidated into, 
the Company or a Wholly Owned Restricted Subsidiary of the Company that is      
engaged in Permitted Business; (d) any Investment made as a result of the       
receipt of assets not constituting Cash Equivalents from an Asset Sale that was 
made pursuant to and in compliance with the covenant described above under the  
caption "--Repurchase at the Option of Holders--Asset Sales"; (e) any           
acquisition of assets solely in exchange for the issuance of Equity Interests   
(other than Disqualified Stock) of Holdings; (f) other Investments in any Person
having an aggregate fair market value (measured on the date each such Investment
was made and without giving effect to subsequent changes in value), when taken  
together with all other Investments made pursuant to this clause (f) that are at
the time outstanding, not to exceed $10 million; (g) Investments in securities  
of customers received in settlement of obligations or pursuant to a plan of     
reorganization or similar arrangement upon the bankruptcy or insolvency of such 
trade creditors or customers; (h) Investments existing on the date of the       
Indenture or made in connection with the Transactions; (i) Investments          
consisting of receivables owing to Holdings and its Restricted Subsidiaries and 
advances or loans to or the receipt of notes or drafts from, distributors and   
customers, in each case, in connection with the sale or lease of inventory in   
the ordinary course of business and consistent with past practices, including   
such Investments made in connection with or pursuant to a Dealer Financing      
Program; (j) loans and advances to officers, directors, members and employees   
for business-related travel expenses, moving expenses and other similar         
expenses, in each case, incurred in the ordinary course of business and         
consistent with past practices not to exceed $1.0 million; (k) any Hedging      
Obligation; (l) Investments in an Accounts Receivable Subsidiary made in        
connection with the formation of an Accounts Receivable Subsidiary or received  
in consideration of sales of accounts receivable, in each case, in accordance   
with the covenant described above under the caption entitled "--Certain         
Covenants-- Sales of Accounts Receivable," (m) Investments consisting of        
intercompany loans from Holdings and its Restricted Subsidiaries to Restricted  
Subsidiaries; (n) Investments consisting of capital contributions from Holdings 
or any Restricted Subsidiaries to Restricted Subsidiaries in an aggregate amount
at any one time outstanding not to exceed $25.0 million ; (o) Equipment         
Financing Guarantees permitted by the terms of clause (xv) of the covenant      
described above under the caption "--Certain Covenants--Incurrence of           
Indebtedness and Issuance of Preferred Stock" and (p) loans to and promissory   
notes or other instruments of managers and officers of Grove Investors, Holdings
or its Restricted Subsidiaries issued in connection with the purchase of Equity 
Interests of Grove Investors or Holdings.                                       

  "PERMITTED LIENS"  means (i) Liens securing Senior Debt (as defined in the
Senior Subordinated Note Indenture) and Liens on assets of Restricted           
Subsidiaries securing Senior Debt permitted by the terms of the Senior          
Subordinated Note Indenture to be incurred; (ii) Liens in favor of the Issuers  
or a Restricted Subsidiary; (iii) Liens on property of a Person existing at the 
time such Person becomes a Restricted Subsidiary of Holdings or is merged into  
or consolidated with one of Holdings or any Subsidiary of Holdings; PROVIDED    
that such Liens were in existence prior to the contemplation of such merger or  
consolidation and do not extend to any assets other than those of the Person    
merged into or consolidated with Holdings or any Subsidiary of Holdings; (iv)   
Liens on property existing at the time of acquisition thereof by Holdings or any
Subsidiary of Holdings, PROVIDED that such Liens were in existence prior to the 
contemplation of such acquisition; (v) Liens to secure Indebtedness (including  
Capital Lease Obligations)                                                      

104 

424B3
106th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 106th
permitted by clause (v) of the second paragraph of the covenant entitled        
"Incurrence of Indebtedness and Issuance of Disqualified Stock" covering only   
the assets acquired, constructed or improved with such Indebtedness; (vi) Liens 
existing on the date of the Indenture; (vii) Liens for taxes, assessments or    
governmental charges or claims that are not yet delinquent or that are being    
contested in good faith by appropriate proceedings promptly instituted and      
diligently concluded, PROVIDED that any reserve or other appropriate provision  
as shall be required in conformity with GAAP shall have been made therefor;     
(viii) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse    
Debt of Unrestricted Subsidiaries; (ix) Liens incurred in the ordinary course of
business of the Issuers or any Subsidiary of the Issuers with respect to        
obligations that do not exceed $5.0 million at any one time outstanding and that
(a) are not incurred in connection with the borrowing of money or the obtaining 
of advances or credit (other than trade credit in the ordinary course of        
business) and (b) do not in the aggregate materially detract from the value of  
the property or materially impair the use thereof in the operation of business  
by the Issuers or such Subsidiary; (x) liens on assets of the Subsidiary        
Guarantors (as defined in the Senior Subordinated Note Indenture) to secure     
Senior Debt of such Subsidiary Guarantors that was permitted to be incurred     
under the Senior Subordinated Note Indenture; (xi) statutory Liens of landlords 
and Liens of carriers, warehousemen, mechanics, suppliers, materialmen,         
repairmen and other Liens imposed by law incurred in the ordinary course of     
business; (xii) Liens incurred or deposits made in the ordinary course of       
business in connection with workers' compensation, unemployment insurance and   
other types of social security or similar obligations, or to secure the         
performance of tenders, statutory obligations, surety and appeal bonds, bids,   
leases, government contracts, performance and return-of-money bonds and other   
similar obligations (exclusive of obligations for the payment of borrowed       
money); (xiii) judgment or attachment Liens not giving rise to an Event of      
Default; (xiv) easements, rights-of-way, zoning restrictions and other similar  
charges or encumbrances in respect of real property not interfering in any      
material respect with the ordinary course of the business of Holdings or any of 
its Restricted Subsidiaries; (xv) any interest or title of a lessor under any   
lease, whether or not characterized as capital or operating; provided that such 
Liens do not extend to any property or assets which is not leased property      
subject to such lease; (xvi) Liens upon specific items of inventory or other    
goods and proceeds of any Person securing such Person's obligations in respect  
of bankers' acceptances issued or created for the account of such Person to     
facilitate the purchase, shipment or storage of such inventory or other goods;  
(xvii) Liens securing reimbursement obligations with respect to letters of      
credit and products and proceeds thereof; (xviii) Liens securing Hedging        
Obligations which Hedging Obligations relate to Indebtedness that is otherwise  
permitted under the Indenture; (xix) Liens arising out of consignment,          
conditional purchase or similar arrangements for the sale of goods entered into 
by Holdings or any Restricted Subsidiary in the ordinary course of business;    
(xx) Liens securing Permitted Refinancing Indebtedness which is incurred to     
refinance any Indebtedness which has been secured by a Lien permitted under the 
Indenture and which has been incurred in accordance with the provisions of the  
Indenture; (xxi) Liens with respect to Equipment Financing Guarantees and       
related inventory and equipment; (xxii) Liens incurred in connection with the   
Equipment Financing Program and (xxiii) Liens incurred in the ordinary course of
business on equipment and inventory held for lease by the Company or any of its 
Restricted Subsidiaries.                                                        

   "PERMITTED REFINANCING INDEBTEDNESS"  means any Indebtedness of the Issuers
or any of their Restricted Subsidiaries issued in exchange for, or the net      
proceeds of which are used within 60 days after the incurrence thereof to       
extend, refinance, renew, replace, defease or refund other Indebtedness of the  
Issuers or any of their Restricted Subsidiaries (other than intercompany        
Indebtedness); provided that: (i) the principal amount (or accreted value, if   
applicable) of such permitted Refinancing Indebtedness does not exceed the      
principal amount of (or accreted value, if applicable), plus accrued interest   
on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or    
refunded (plus the amount of reasonable expenses, premiums, penalties, fees and 
interest incurred in connection therewith); (ii) such Permitted Refinancing     
Indebtedness has a final maturity date later than the final maturity date of,   
and has a Weighted Average Life to Maturity equal to or greater than the        
Weighted Average Life to Maturity of, the Indebtedness being extended,          
refinanced, renewed, replaced, defeased or refunded; (iii) if the               

105 

424B3
107th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 107th
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Debentures, such Permitted           
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and is subordinated in right of payment to, the Debentures on terms at 
least as favorable to the Holders of Debentures as those contained in the       
documentation governing the Indebtedness being extended, refinanced, renewed,   
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either by
the Issuers or by the Restricted Subsidiary who is the obligor on the           
Indebtedness being extended, refinanced, renewed, replaced, defeased or         
refunded.                                                                       

  "PUBLIC EQUITY OFFERING"  means a public offering pursuant to an effective
registration statement under the Securities Act of Equity Interests (other than 
Disqualified Stock) of Holdings (or any other person that owns, directly or     
indirectly, 100% of the common equity of the Issuers to the extent the net      
proceeds thereof are contributed to Holdings as a capital contribution), that,  
in each case, results in the net proceeds to Holdings of at least $25.0 million.

"RECEIVABLES FEES"  means distributions or payments made directly or by 
means of discounts with respect to any participation interests issued or sold in
connection with, and other fees paid to a Person that is not a Restricted       
Subsidiary in connection with, any receivables financing permitted pursuant to  
the covenant entitled "Sales of Accounts Receivable."                           

"RESTRICTED INVESTMENT"  means an Investment other than a Permitted     
Investment.                                                                     

 "RESTRICTED SUBSIDIARY"  of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.                                  

   "SENIOR SUBORDINATED NOTES"  means the 9 1/4% Senior Subordinated Notes due
2008 of Grove Worldwide LLC and Grove Capital, Inc.                             

 "SENIOR SUBORDINATED NOTE INDENTURE"  means the Indenture relating to the
Senior Subordinated Notes.                                                      

   "SIGNIFICANT SUBSIDIARY"  means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated   
pursuant to the Act, as such Regulation is in effect on the date hereof.        

"STATED MATURITY"  means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of      
interest or principal was scheduled to be paid in the original documentation    
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date    
originally scheduled for the payment thereof.                                   

"SUBSIDIARY"  means, with respect to any Person, (i) any corporation,   
association or other business entity of which more than 50% of the total voting 
power of shares of Capital Stock entitled (without regard to the occurrence of  
any contingency) to vote in the election of directors, managers or trustees     
thereof is at the time owned or controlled, directly or indirectly, by such     
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing  
general partner of which is such Person or a Subsidiary of such Person or (b)   
the only general partners of which are such Person or of one or more            
Subsidiaries of such Person (or any combination thereof).                       

    "TAX AMOUNT"  means, with respect to Holdings for any period, the product of
(i) the taxable income of Holdings for such period and (ii) the maximum combined
Federal, state and local income tax rates applicable to an individual resident  
in New York City or California, whichever is higher; PROVIDED, HOWEVER, that in 
determining the Tax Amount, the effect thereon of any net operating loss        
carryforwards or other carryforwards or tax attributes, such as alternative     
minimum tax carryforwards shall be taken into account,                          

106 

424B3
108th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 108th
and adjusted to take into account any applicable credits, deductions or other   
adjustments allowed under both New York and California law to a direct or       
indirect owner of an interest in Holdings for state and local income tax        
purposes.                                                                       

   "TAX DISTRIBUTION"  means a distribution in respect of taxes to the members
of Holdings pursuant to clause (vi) of the second paragraph of the covenant     
described above under the caption "Certain Covenants--Restricted Payments."     

"TRANSACTIONS"  means each of (i) the acquisition by Holdings through   
certain of its subsidiaries of the mobile hydraulic crane, aerial work platform 
and truck-mounted crane businesses of Hanson Funding (G) PLC and certain of its 
subsidiaries, for aggregate cash consideration of approximately $583.0 million  
plus certain assumed liabilities (the "Acquisition"); (ii) approximately $203.0 
million of borrowings under the New Credit Facility; (iii) approximately $225.0 
million of estimated gross proceeds from the offering of the Senior Subordinated
Notes; and (iv) an approximately $168.0 million equity contribution to the Grove
Worldwide by Holdings (the "Equity Contribution"), a portion of which was       
financed with $50.0 million in gross proceeds from the offering of the          
Debentures.                                                                     

"UNRESTRICTED SUBSIDIARY"  means (i) any Subsidiary (other than Grove   
Holdings Capital) or any successor to any of them that is designated by the     
Management Committee as an Unrestricted Subsidiary pursuant to a resolution of  
the Management Committee; but only to the extent that such Subsidiary: (a) has  
no Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with Holdings or any Restricted          
Subsidiary of Holdings unless the terms of any such agreement, contract,        
arrangement or understanding are no less favorable to Holdings or such          
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of Holdings; (c) is a Person with respect to which       
neither Holdings nor any of its Restricted Subsidiaries has any direct or       
indirect obligation (x) to subscribe for additional Equity Interests or (y) to  
maintain or preserve such Person's financial condition or to cause such Person  
to achieve any specified levels of operating results; (d) has not guaranteed or 
otherwise directly or indirectly provided credit support for any Indebtedness of
Holdings or any of its Restricted Subsidiaries; and (e) has at least one        
director on its board of directors that is not a director or executive officer  
of Holdings or any of its Restricted Subsidiaries and has at least one executive
officer that is not a director or executive officer of Holdings or any of its   
Restricted Subsidiaries. Any such designation by the Management Committee shall 
be evidenced to the Trustee by filing with the Trustee a certified copy of the  
Board Resolution giving effect to such designation and an Officers' Certificate 
certifying that such designation complied with the foregoing conditions and was 
permitted by the covenant described above under --he caption "Certain           
Covenants]Restricted Payments." If, at any time, any Unrestricted Subsidiary    
would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it 
shall thereafter cease to be an Unrestricted Subsidiary for purposes of the     
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary of Holdings as of such date (and, if such            
Indebtedness is not permitted to be incurred as of such date under the covenant 
described under the caption "Incurrence of Indebtedness and Issuance of         
Disqualified Stock," the Issuers shall be in default of such covenant). The     
Management Committee of Holdings may at any time designate any Unrestricted     
Subsidiary to be a Restricted Subsidiary; PROVIDED that such designation shall  
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of     
Holdings of any outstanding Indebtedness of such Unrestricted Subsidiary and    
such designation shall only be permitted if (i) such Indebtedness is permitted  
under the covenant described under the caption "Certain Covenants--Incurrence of
Indebtedness and Issuance of Disqualified Stock," calculated on a pro forma     
basis as if such designation had occurred at the beginning of the four-quarter  
reference period, and (ii) no Default or Event of Default would be in existence 
following such designation.                                                     

    "VOTING STOCK"  of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Management   
Committee of such Person.                                                       

107 

424B3
109th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 109th
    "WEIGHTED AVERAGE LIFE TO MATURITY"  means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the        
products obtained by multiplying (a) the amount of each then remaining          
installment, sinking fund, serial maturity or other required payments of        
principal, including payment at final maturity, in respect thereof, by (b) the  
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.                                                    

"WHOLLY OWNED RESTRICTED SUBSIDIARY"  of any Person means a Restricted  
Subsidiary of such Person all of the outstanding Capital Stock or other         
ownership interests of which (other than (x) directors' qualifying shares and   
(y) shares required to be held by a second shareholder pursuant to the laws of  
France in an amount not to exceed one-tenth of one percent of the outstanding   
shares) shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted  
Subsidiaries of such Person.                                                    

108 

424B3
110th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 110th
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS 

  In the opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the
Issuers, the following discussion is an accurate general description of certain 
of the material anticipated Federal income tax consequences of the purchase,    
ownership and disposition of the Debentures. This summary is based on laws,     
regulations, rulings and decisions now in effect, all of which are subject to   
change. This summary deals only with holders that will hold Debentures as       
capital assets and does not address tax considerations applicable to investors  
that may be subject to special tax rules such as banks, insurance companies,    
tax-exempt organizations, dealers in securities or currencies, persons that will
hold Debentures as part of an integrated investment (including a "straddle")    
comprised of Debentures and one or more other positions, persons that have a    
"functional currency" other than the U.S. dollar or holders of Debentures that  
did not acquire the Debentures in the initial distribution thereof at their     
original issue price. In addition, this discussion does not consider the effect 
of any estate, gift or other tax laws. Investors considering the purchase of    
Debentures should consult their own tax advisors with respect to the application
of the Federal income tax laws to their particular situations as well as any tax
consequences arising under the laws of any state, local or foreign taxing       
jurisdiction.                                                                   

UNITED STATES HOLDERS 

  As used herein, the term "United States Holder" means the beneficial owner
of Debentures that is, for United States Federal income tax purposes, (i) a     
citizen or resident of the United States, (ii) a domestic corporation or other  
entity taxable as a corporation, (iii) an estate or trust the income of which is
subject to United States Federal income taxation regardless of its source or    
(iv) otherwise subject to United States Federal income taxation with respect to 
its worldwide income on a net income basis.                                     

TAXATION OF UNITED STATES HOLDERS ON EXCHANGE                                   

  In the opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the
Issuers, the exchange of a Senior Discount Debenture for an Exchange Debenture  
will not be a taxable event to a United States Holder of a Senior Subordinated  
Debenture, and a United States Holder will not recognize any taxable gain or    
loss as a result of such an exchange. Accordingly, a United States Holder will  
have the same adjusted basis and holding period in an Exchange Debenture as it  
had in a Senior Subordinated Debenture immediately before the exchange. Further,
the tax consequences of ownership and disposition of any Exchange Debenture will
be the same as the tax consequences of ownership and disposition of a Senior    
Subordinated Debenture.                                                         

ORIGINAL ISSUE DISCOUNT                                                         

    United States Holders of Debentures generally will be subject to the special
tax accounting rules for original issue discount obligations provided by the    
Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, as         
described in more detail below, United States Holders of the Debentures will be 
required to include original issue discount in gross income as ordinary income  
as it accrues, in advance of the receipt of cash attributable to that income.   

In general, a debt obligation that is issued for an amount less than its
stated redemption price at maturity will be considered to have been issued with 
original issue discount for U.S. Federal income tax purposes. Under the         
applicable regulations, the stated redemption price at maturity will equal the  
sum of all payments to be made on a Debenture, whether denominated as interest  
or principal.                                                                   

   Each United States Holder of a Debenture, whether such holder uses the cash
or the accrual method of tax accounting, will be required to include in gross   
income the sum of the "daily portions" of original issue discount on that       
Debenture for all days during the taxable year that the United States Holder    
owns the Debentures. The daily portions of original issue discount on a         
Debenture are determined by allocating to each day in any "accrual period" a    
ratable portion of the original issue discount allocable to that accrual        

109 

424B3
111th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 111th
period. At the election of each United States Holder, accrual periods may be of 
any length and may vary in length over the term of the Debentures, provided that
each accrual period is no longer than one year and each scheduled payment occurs
either on the final or first day of an accrual period. The amount of original   
issue discount allocable to each accrual period is determined by multiplying the
"adjusted issue price" (as defined below) at the beginning of the accrual period
by the annual yield to maturity of the Debentures. The "adjusted issue price" of
a Debenture at the beginning of any accrual period will be the sum of its issue 
price (generally, the first price at which a substantial amount of Debentures   
are sold, disregarding sales to bond houses, brokers, or similar persons or     
organizations acting in the capacity of underwriters, placement agents or       
wholesalers) and the amount of original issue discount allocable to all prior   
accrual periods, reduced by the amount of all payments previously received on   
the Debenture. As a result of this "constant yield" method of including original
issue discount in income, the amounts includible in income by a United States   
Holder in respect of a Debenture generally are less in the early years and      
greater in the later years than the amounts that would be includible on a       
straight-line basis.                                                            

SALE, EXCHANGE OR RETIREMENT OF DEBENTURES                                      

    Upon the sale, exchange or retirement of a Debenture, a United States Holder
generally will recognize capital gain or loss equal to the difference between   
the amount realized on the sale, exchange or retirement and such holder's       
adjusted tax basis in the Debentures. A United States Holder's adjusted tax     
basis in a Debenture will generally be equal to the amount paid for the         
Debentures by such holder, increased by any original issue discount included in 
income by the holder, and reduced by the amount of all payments previously      
received on the Debenture. Such capital gain or loss will be long-term capital  
gain or loss if the United States Holder's holding period in the Debenture is   
more than one year at the time of disposition. The distinction between capital  
gain or loss and ordinary income or loss is important for purposes of the       
limitations on a United States Holder's ability to offset capital losses against
ordinary income and because United States Holders that are individuals may be   
entitled to a preferential rate on long-term capital gains. The Taxpayer Relief 
Act of 1997 further reduces tax rates on capital gains recognized by individuals
in respect of assets held for more than 18 months. United States Holders are    
advised to consult with their own tax advisers regarding the application of the 
Taxpayer Relief Act of 1997 to their particular circumstances.                  

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX                                

In general, information reporting requirements will apply to payments of
principal, premium, if any, and interest (including original issue discount) on 
a Debenture, and payment of the proceeds of the sale of a Debenture to certain  
non-corporate, not otherwise exempt, United States Holders, and a 31% backup    
withholding tax may apply to such payments if the United States Holder (i) fails
to furnish or certify its correct taxpayer identification number to the payor in
the manner required, (ii) is notified by the Internal Revenue Service (the      
"IRS") that it has failed to report payments of interest and dividends properly,
or (iii) under certain circumstances, fails to certify that it has not been     
notified by the IRS that it is subject to backup withholding for failure to     
report interest and dividend payments. Any amounts withheld under the backup    
withholding rules from a payment to a United States Holder will be allowed as a 
credit against such holder's United States Federal income tax liability and may 
entitle the United States Holder to a refund.                                   

REPORTING REQUIREMENTS                                                          

Holdings will provide annual information statements to holders of the   
Debentures and to the IRS, setting forth the amount of original issue discount  
determined to be attributable to the Debentures for that year.                  

110 

424B3
112th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 112th
NON-UNITED STATES HOLDERS 

    As used herein, the term "Non-United States Holder" means a beneficial owner
of Debentures that, for United States Federal income tax purposes, is not a     
United States Holder.                                                           

TAXATION OF NON-UNITED STATES HOLDERS ON EXCHANGE                               

 The exchange of a Senior Subordinated Debenture for an Exchange Debenture
will not be a taxable event to a Non-United States Holder of a Senior           
Subordinated Debenture, and a Non-United States Holder will not recognize any   
taxable gain or loss as a result of such an exchange. Accordingly, a Non-United 
States Holder will have the same adjusted basis and holding period in an        
Exchange Debenture as it had in a Senior Subordinated Debenture immediately     
before the exchange. Further, the tax consequences of ownership and disposition 
of any Exchange Debenture will be the same as the tax consequences of ownership 
and disposition of a Senior Subordinated Debenture.                             

INTEREST                                                                        

 Subject to the discussion of information reporting and backup withholding
below, payments of interest (including original issue discount) on the          
Debentures to or on behalf of any Non-United States Holder will not be subject  
to United States Federal income or withholding tax if such interest is not      
effectively connected with the conduct of a trade or business within the United 
States by such Non-United States Holder, provided that (i) such Non-United      
States Holder is not a bank for United States Federal income tax purposes, (ii) 
such Non-United States Holder is not a "10-percent shareholder" within the      
meaning of section 871(h)(3)(B) of the Code, (iii) such Non-United States Holder
is not a controlled foreign corporation for United States Federal income tax    
purposes that is related to Holdings through stock ownership, and (iv) certain  
certification requirements are met. A Non-United States Holder that is not      
exempt from tax under these rules generally will be subject to United States    
Federal income tax withholding at a rate of 30% (or lower applicable treaty     
rate) on interest payments.                                                     

If the interest is effectively connected with the conduct of a trade or 
business within the United States of such Non-United States Holder, such        
interest will be subject to the United States Federal income tax on net income  
that applies to United States persons generally (and with respect to corporate  
holders under certain circumstances, the branch profits tax).                   

GAIN ON DISPOSITION                                                             

    Any capital gain realized upon a sale, exchange or retirement of a Debenture
by or on behalf of a Non-United States Holder generally will not be subject to  
United States Federal withholding or income tax, unless (i) such gain is        
effectively connected with a United States trade or business of such Non-United 
States Holder, (ii) the Non-United States Holder is an individual that is       
present in the United States for 183 days or more during the taxable year of the
sale, exchange or retirement and certain other requirements are met, or (iii)   
the Non-United States Holder is subject to tax pursuant to provisions of the    
United States Federal tax law applicable to certain United States expatriates.  

INFORMATION REPORTING AND BACKUP WITHHOLDING                                    

 Under temporary Treasury Regulations now in effect, information reporting
and backup withholding will not apply to payments by Holdings or any middleman  
to a Non-United States Holder, provided that the holder (and, in certain cases  
the custodian, nominee or other agent of such holder) meets certain             
certification requirements as to the status of the holder as a Non-United States
Holder (provided that the payor does not have actual knowledge that the holder  
is a United States person or that the conditions of any other exemption are not 
in fact satisfied).                                                             

111 

424B3
113th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 113th
Recently published final Treasury Regulations (the "Final Withholding   
Regulations") make a number of important changes to the procedures for income   
tax withholding and certification of eligibility for the portfolio interest     
exemption or for a reduced rate of income tax withholding based on an applicable
income tax treaty. In general, the Final Withholding Regulations do not         
significantly alter substantive withholding requirements but unify certification
procedures and clarify reliance standards. The Final Withholding Regulations are
scheduled to be effective for payments made on or after January 1, 2000, subject
to certain transition rules.                                                    

  Initial Non-United States Holders will be required to submit certification
complying with the temporary Treasury Regulations upon purchase of the          
Debentures. Certification that complies with the procedures in the Final        
Withholding Regulations, where required, must be provided not later than the    
earlier of (i) the date after December 31, 1999 on which such Non-United States 
Holders' certification is no longer accurate or has expired, and (ii) December  
31, 2000 by initial Non-United States Holders that remain holders on such date, 
unless such Non-United States Holders receive payments on the Debentures through
a qualified intermediary (as defined in the Final Withholding Regulations) that 
has certified on such Non-United States Holders' behalf. Non-United States      
Holders claiming under an income tax treaty (and not relying on the portfolio   
interest exemption) should be aware that they may be required to obtain taxpayer
identification numbers and to certify their eligibility under the applicable    
treaty's limitations on benefits article in order to comply with the Final      
Withholding Regulations' certification requirements. THE FINAL WITHHOLDING      
REGULATIONS ARE QUITE COMPLEX. NON-UNITED STATES HOLDERS ARE STRONGLY URGED TO  
CONSULT THEIR OWN TAX ADVISORS REGARDING POTENTIAL APPLICATION OF THE FINAL     
WITHHOLDING REGULATIONS TO PAYMENTS ON THE DEBENTURES IN LIGHT OF THEIR         
PARTICULAR CIRCUMSTANCES.                                                       

   Backup withholding is not an additional tax; any amounts so withheld may be
refunded or credited against a Non-United States Holder's United States Federal 
income tax liability, provided the required information is furnished to the IRS.

THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF FEDERAL INCOME    
TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER OF DEBENTURES IN LIGHT OF  
HIS PARTICULAR CIRCUMSTANCES AND INCOME TAX SITUATION. EACH HOLDER OF DEBENTURES
SHOULD CONSULT HIS OWN ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH      
HOLDER OF THE OWNERSHIP AND DISPOSITION OF THE DEBENTURES, INCLUDING THE        
APPLICATION AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS, OR          
SUBSEQUENT VERSIONS THEREOF.                                                    

ERISA CONSIDERATIONS

    Sections 406 and 407 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and Section 4975 of the Code prohibit certain employee    
benefit plans, individual retirement accounts, individual retirement annuities, 
and employee annuity plans ("Plans") from engaging in certain transactions with 
persons who, with respect to such Plan, are "parties in interest" under ERISA or
"disqualified persons" under the Code. A violation of these "prohibited         
transactions" rules may generate excise taxes under the Code and other          
liabilities under ERISA for such persons. Possible violations of the prohibited 
transaction rules occur if the Debentures are purchased with the assets of any  
Plan if Holdings or any of its affiliates is a party in interest or disqualified
person with respect to such Plan, unless such acquisition is subject to a       
statutory or administrative exemption.                                          

The foregoing discussion is general in nature and is not intended to be 
all-inclusive. Any fiduciary of a Plan considering the purchase of the          
Debentures should consult its legal advisors regarding the consequences of such 
purchases under ERISA and the Code. If the Plan is not subject to ERISA, the    
fiduciary should consult its legal advisors regarding the consequences of any   
state law or Code considerations.                                               

112 

424B3
114th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 114th
PLAN OF DISTRIBUTION

   Based on interpretations by the Staff set forth in no-action letters issued
to third parties, the Issuers believe that a holder (other than a person that is
an affiliate of the Company within the meaning of Rule 405 under the Securities 
Act or a "broker" or "dealer" registered under the Exchange Act (a "Broker      
Dealer") that purchases Debentures from the Issuers to resell pursuant to Rule  
144A under the Securities Act or any other exemption) that exchanges Senior     
Discount Debentures for Exchange Debentures in the ordinary course of business  
and that is not participating, does not intend to participate, and has no       
arrangement or understanding with any person to participate, in the distribution
of the Exchange Debentures will be allowed to resell the Exchange Debentures to 
the public without further registration under the Securities Act and without    
delivering to the purchasers of the Exchange Debentures a prospectus that       
satisfies the requirements of Section 10 thereof. However, if any holder        
acquires Exchange Debentures in the Exchange Offer for the purpose of           
distributing or participating in a distribution of the Exchange Debentures, such
holder cannot rely on the position of the Staff enunciated in Exxon Capital     
Holdings Corporation (available May 13, 1988) or similar no-action or           
interpretive letters and must comply with the registration and prospectus       
delivery requirements of the Securities Act in connection with a secondary      
resale transaction, and such secondary resale transaction must be covered by an 
effective registration statement containing the selling security holder         
information required by Item 507 or 508, as applicable, of Regulation S-K if the
resales are of Exchange Debentures obtained by such holder in exchange for      
Senior Discount Debentures acquired by such holder directly from the Issuers or 
an affiliate thereof, unless an exemption from registration is otherwise        
available.                                                                      

  As contemplated by the above no-action letters and the Registration Rights
Agreement, each holder accepting the Exchange Offer is required to represent to 
the Issuers in the Letter of Transmittal that (A) it is not an Affiliate of the 
Issuers; (B) it is not participating in, and does not intend to participate in, 
and has no arrangement or understanding with any Person to participate in, a    
distribution of the Senior Discount Debentures or the Exchange Debentures; (C)  
it is acquiring the Exchange Debentures in the ordinary course of business; and 
(D) if such holder is a Broker Dealer, it will receive the Exchange Debentures  
for its own account in exchange for the Senior Discount Debentures that were    
acquired as a result of market-making activities or other trading activities.   
Each Broker Dealer must acknowledge that it will deliver a prospectus in        
connection with any resale of such Exchange Debentures.                         

Any Broker Dealer registered under the Exchange Act who holds Senior    
Discount Debentures that were acquired for its own account as a result of       
market-making activities or other trading activities (other than Senior Discount
Debentures acquired directly from the Issuers or any Affiliate of the Issuers)  
may exchange such Senior Discount Debentures for Exchange Debentures pursuant to
the Exchange Offer; however, such Broker Dealer may be deemed an "underwriter"  
within the meaning of the Securities Act and, therefore, must deliver a         
prospectus meeting the requirements of the Securities Act in connection with any
resales of the Exchange Debentures received by it in the Exchange Offer, which  
prospectus delivery requirement may be satisfied by the delivery by such Broker 
Dealer of this Prospectus, as it may be amended or supplemented from time to    
time. The Issuers have agreed to use their reasonable best efforts to cause the 
Registration Statement, of which this Prospectus is a part, to remain           
continuously effective for a period of one year from the Exchange Date, and to  
make this Prospectus, as amended or supplemented, available to any such Broker  
Dealer for use in connection with resales. Any Broker Dealer participating in   
the Exchange Offer will be required to acknowledge that it will deliver a       
prospectus in connection with any resales of Exchange Debentures received by it 
in the Exchange Offer. The Letter of Transmittal states that, by acknowledging  
that it will deliver and by delivering a prospectus meeting the requirements of 
the Securities Act, a Broker Dealer will not be deemed to admit that it is an   
"underwriter" within the meaning of the Securities Act.                         

The Issuers will not receive any proceeds from any sale of Exchange     
Debentures by a Broker Dealer. Exchange Debentures received by Broker Dealers   
for their own account pursuant to the Exchange Offer may be sold from time to   
time in one or more transactions in the over-the-counter market, in negotiated  

113 

424B3
115th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 115th
transactions, through the writing of options on the Exchange Debentures or a    
combination of such methods of resale, at market prices prevailing at the time  
of resale, at prices related to such prevailing market prices or negotiated     
prices. Any such resale may be made directly to purchasers or to or through     
brokers or dealers who may receive compensation in the form of commissions or   
concessions from any such Broker Dealers and/or the purchasers of any such      
Exchange Debentures. Any Broker Dealer that resells Exchange Debentures that    
were received by it for its own account pursuant to the Exchange Offer and any  
Broker Dealer that participates in a distribution of such Exchange Debentures   
may be deemed to be an "underwriter" within the meaning of the Securities Act   
and any profit on any such resale of Exchange Debentures and any commission or  
concessions received by any such persons may be deemed to be underwriting       
compensation under the Securities Act.                                          

  The Issuers have agreed to pay all expenses incident to the Exchange Offer
(including the reasonable expenses of one counsel for holders of the Senior     
Discount Debentures) other than commissions and concessions of Broker Dealers,  
and will indemnify the holders of the Senior Discount Debentures (including any 
Broker Dealers) against certain liabilities, including liabilities under the    
Securities Act.                                                                 

LEGAL MATTERS 

Certain legal matters in connection with the Exchange Debentures offered
hereby will be passed upon for Holdings and Grove Holdings Capital, by Paul,    
Weiss, Rifkind, Wharton & Garrison, New York, New York.                         

EXPERTS 

   The historical financial statements of the Company as of September 28, 1996
and September 27, 1997 and for the fiscal years then ended, included in this    
Prospectus have been so included in reliance on the report of Ernst & Young LLP 
("Ernst & Young"), independent auditors, given on the authority of said firm as 
experts in auditing and accounting. The historical financial statements of the  
Company for the fiscal year ended September 30, 1995, included in this          
Prospectus have been so included in reliance on the report of                   
PricewaterhouseCoopers LLP, independent auditors, given on the authority of said
firm as experts in auditing and accounting.                                     

CHANGE IN ACCOUNTANTS 

As indicated above, Ernst & Young was the independent accountant of the 
Company. In July 1998, Ernst & Young was replaced by KPMG Peat Marwick, LLP     
("KPMG") as the independent accountant of the Company. Ernst & Young did not    
resign nor was it dismissed under adverse circumstances. Ernst & Young's report 
on the financial statements for the past two years did not contain an adverse   
opinion or a disclaimer of opinion, nor was it qualified or modified as to      
uncertainty, audit scope, or accounting principles. The decision to change      
accountants was recommended by the parent of the Company. In addition, during   
the two most recent fiscal years (and the subsequent interim periods) prior to  
the Company's change in accountants, there were no disagreements with Ernst &   
Young 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 Ernst & Young, would have caused Ernst & Young to make   
reference to the subject matter of the disagreements in connection with its     
report.                                                                         

114 

424B3
116th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 116th
INDEX TO UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

                                                        [Enlarge/Download Table]

                                                                                                            PAGE   
                                                                                                            -----  
                                                                                                                   
Introduction...............................................................................................     P-2
Unaudited Pro Forma Combined Statement of Operations for the year ended September 27, 1997.................     P-3
Unaudited Pro Forma Combined Statement of Operations for the nine months ended June 27, 1998...............     P-4
Notes to Unaudited Pro Forma Combined Statements of Operations.............................................     P-5

P-1 

424B3
117th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 117th
GROVE HOLDINGS LLC
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA 

  The following unaudited pro forma combined financial data of Holdings have
been derived by the application of pro forma adjustments to the historical      
combined and consolidated financial statements of the Company appearing         
elsewhere in this Prospectus. The unaudited pro forma combined balance sheet    
gives effect to the Transactions as if they were consummated on June 27, 1998.  
The unaudited pro forma combined statements of operations for the nine months   
ended June 27, 1998 (the "fiscal 1998 nine months") and the year ended September
27, 1997 ("fiscal 1997") give effect to the Transactions as if they were        
consummated at the beginning of fiscal 1997.                                    

 The pro forma adjustments are described in the accompanying notes and are
based upon available information and upon certain assumptions that management   
believes are reasonable. The unaudited pro forma combined information and       
accompanying notes should be read in conjunction with the Combined and          
Consolidated Financial Statements and related notes, and other financial        
information pertaining to Holdings and the Company, including "Capitalization"  
and "Management's Discussion and Analysis of Financial Condition and Results of 
Operations," included elsewhere in this Prospectus.                             

The unaudited pro forma combined financial data are provided for        
informational data only and are not necessarily indicative of the operating     
results that would have occurred had the Transactions been consummated on the   
dates described above, nor are they necessarily indicative of the Holdings'     
future results of operations or financial position.                             

The unaudited pro forma combined financial data have been prepared      
accounting for the Acquisition using the purchase method. The estimated total   
purchase price of $583 million and related acquisition fees and expenses of     
approximately $6.5 million, have been allocated to the assets and liabilities of
the Company based upon an estimate of their respective fair values, with the    
remainder being allocated to goodwill. Such allocation is based on studies which
have not yet been completed. Accordingly, the allocation reflected in the       
unaudited pro forma combined financial data is preliminary and subject to       
revision. Such revision could be material.                                      

The unaudited pro forma combined statements of operations data do not   
include annual costs savings Holdings estimates the Company can achieve by      
fiscal 2001 through the implementation of a detailed program to improve the     
manufacturing process and reduce selling, general and administrative expenses   
described elsewhere in this Prospectus. It is expected that cost savings during 
the next four years will be offset by non-recurring costs of approximately $25.0
million associated with the implementation of the Operations Improvement        
Program.                                                                        

P-2 

424B3
118th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 118th
GROVE HOLDINGS LLC
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

YEAR ENDED SEPTEMBER 27, 1997 
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                       PRO FORMA      PRO      
                                                                          HISTORICAL  ADJUSTMENTS    FORMA     
                                                                          ----------  -----------  ----------  
                                                                                                               
Net sales................................................................ $  856,812   $  --       $  856,812  
Cost of goods sold.......................................................    653,539       1,421(a)    654,960 
                                                                          ----------  -----------  ----------  
    Gross profit.........................................................    203,273      (1,421)     201,852  

Selling, engineering, general and administrative expenses................    120,909         587(a)    120,092 
                                                                                          (1,404)(c)           
Restructuring costs......................................................      1,960      --            1,960  
Business process reengineering costs associated with new computer system                                       
  installation...........................................................      1,283      --            1,283  
Amortization of goodwill.................................................      9,054      (1,899)(d)      7,155
Management fees paid to Hanson...........................................      2,176      (2,176)(e)     --    
                                                                          ----------  -----------  ----------  
    Operating profit.....................................................     67,891       3,471       71,362  
Other income (expense):                                                                                        
  Interest income........................................................      2,085      (1,606)(f)        479
  Interest expense.......................................................     (2,042)      1,404(g)    (46,318)
                                                                                         (45,680)(h)           
  Other income, net......................................................        535      --              535  
                                                                          ----------  -----------  ----------  
    Income before income taxes...........................................     68,469     (42,411)      26,058  
Income taxes.............................................................     26,249     (22,543)(i)      3,706
                                                                          ----------  -----------  ----------  
    Net income........................................................... $   42,220   $ (19,868)  $   22,352  
                                                                          ----------  -----------  ----------  
                                                                          ----------  -----------  ----------  

See notes to unaudited pro forma combined statements of operations

P-3 

424B3
119th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 119th
GROVE HOLDINGS LLC
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

NINE MONTHS ENDED JUNE 27, 1998 
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                         PREDECESSOR                                            
                                                        -------------     COMPANY                               
                                                            SEVEN      -------------                            
                                                        MONTHS ENDED        TWO                                 
                                                          APRIL 28,    MONTHS ENDED    PRO FORMA                
                                                            1998       JUNE 27, 1998  ADJUSTMENTS   PRO FORMA   
                                                        -------------  -------------  -----------  -----------  
                                                                                                                
Net sales..............................................  $   476,199    $   154,780    $  --        $ 630,979   
Cost of goods sold.....................................      375,732        121,144          829(a)    497,705  
Write-off of amount assigned to inventory in excess of                                                          
  historical costs resulting from purchase accounting                                                           
  adjustments..........................................      --              10,000      (10,000)(b)     --     
                                                        -------------  -------------  -----------  -----------  
  Gross profit.........................................      100,467         23,636        9,171      133,274   
Selling, engineering, general and administrative                                                                
  expenses.............................................       72,893         23,162          342(a)             
                                                                                          (1,484)(c)     94,913 
Restructuring costs....................................      --             --            --           --       
Business process reengineering costs associated with                                                            
  new computer system installation.....................          142        --            --              142   
Amortization of goodwill...............................        5,215          1,164       (1,013)(d)      5,366 
Management fees paid to Hanson.........................          162        --              (162)(e)     --     
                                                        -------------  -------------  -----------  -----------  
  Operating profit (loss)..............................       22,055           (690)      11,488       32,853   
Other income (expense):                                                                                         
  Interest income......................................        3,484            340       (3,144)(f)        680 
  Interest expense.....................................       (2,437)        (8,325)       2,174(g)             
                                                                                         (26,176)(h)    (34,764)
  Other income (expense), net..........................       (6,993)             6       --           (6,987)  
                                                        -------------  -------------  -----------  -----------  
    Income (loss) before income taxes..................       16,109         (8,669)     (15,658)      (8,218)  
Income taxes...........................................       11,673          1,751       (9,007)(i)      4,417 
                                                        -------------  -------------  -----------  -----------  
    Net income (loss)..................................  $     4,436    $   (10,420)   $  (6,651)   $ (12,635)  
                                                        -------------  -------------  -----------  -----------  
                                                        -------------  -------------  -----------  -----------  

See notes to unaudited pro forma combined statements of operations

P-4 

424B3
120th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 120th
GROVE HOLDINGS LLC
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS)

(a) To reflect additional depreciation expense as a result of the fair values   
assigned to property, plant and equipment.                              

                                                        [Enlarge/Download Table]

                                                                                 FISCAL 1998 
                                                                    FISCAL 1997  NINE MONTHS 
                                                                    -----------  ------------
                                                                                             
Additional depreciation expense:                                                             
  Included in cost of goods sold...................................  $   1,421    $      829 
  Included in selling, engineering, general and administrative                               
    expenses.......................................................        587           342 
                                                                    -----------  ------------
                                                                     $   2,008    $    1,172 
                                                                    -----------  ------------
                                                                    -----------  ------------

(b) In connection with the allocation of the purchase price, the Company has    
    assumed that it will assign a value to inventory of approximately $25,000 in
    excess of its net book value. The amount in excess of net book value will be
charged against operations over the first six months following the      
    Acquisition. The charge of $10,000 for the two months ended June 27, 1998 is
  eliminated in the pro forma combined statements of operations for the nine
months ended June 27, 1998 since such charge is non-recurring.          

(c) To adjust selling, engineering, general and administrative expenses for     
costs increases and reductions resulting from the Acquisition and the   
operation of the Company on a stand-alone basis.                        

                                                        [Enlarge/Download Table]

                                                                                 FISCAL 1998 
                                                                    FISCAL 1997  NINE MONTHS 
                                                                    -----------  ------------
                                                                                             
Elimination of long-term incentive plan for senior executives......  $    (750)   $     (190)
Elimination of other executive perquisites.........................       (600)         (350)
Adjustment to pension and postretirement expense resulting from                              
  purchase accounting adjustments..................................     (1,054)         (615)
Estimated additional costs to replace certain administrative costs                           
  provided by Hanson...............................................      1,000           583 
Professional fees and expenses in connection with the sale of the                            
  Company..........................................................     --              (412)
                                                                    -----------  ------------
  Net reduction in expenses........................................  $  (1,404)   $   (1,484)
                                                                    -----------  ------------
                                                                    -----------  ------------

In connection with the Acquisition, the Company replaced the long-term    
incentive plan with an option plan which provides for the granting of   
options to purchase membership interests at fair market value.          

(d) To adjust goodwill amortization to $7,155 in fiscal 1997 and $5,366 in the  
fiscal 1998 nine months based on goodwill of $286,180 amortized over 40 
years.                                                                  

(e) To eliminate management fees paid to Hanson ($2,176 in fiscal 1997 and $162 
in the fiscal 1998 nine months).                                        

(f) To eliminate interest income ($1,606 in fiscal 1997 and $3,144 in the fiscal
1998 nine months) earned on notes receivable from customers using the   
special North American dealer financing program. Virtually all notes    
 receivable outstanding under this dealer financing program at the date of
    the Acquisition were retained by Hanson. The Company intends to continue the
  dealer financing program and in July 1998 entered into an agreement with a
third-party to purchase notes receivable as they are issued. The Company
will generate interest income generally at the prime rate from new notes
issued                                                                  

P-5 

424B3
121st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 121st
GROVE HOLDINGS LLC
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
(IN THOUSANDS) (CONTINUED)

under the dealer financing program. No interest income from the notes   
receivable has been assumed in the pro forma combined statements of     
operations for periods prior to the Acquisition.                        

(g) To eliminate interest expense paid to Hanson ($1,404 in fiscal 1997 and     
$2,174 in the fiscal 1998 nine months) with respect to intercompany     
obligations.                                                            

(h) To reflect interest expense based upon the pro forma debt of the Company,   
including pro forma borrowings under the Revolving Credit Facility, as  
follows for fiscal 1997 and the fiscal 1998 nine months:                

                                                        [Enlarge/Download Table]

                                                                                 FISCAL 1998 
                                                                    FISCAL 1997  NINE MONTHS 
                                                                    -----------  ------------
                                                                                             
Revolving Credit Facility (7.95% per annum)........................  $     488    $      352 
Term Loan Facility (8.20% per annum)...............................     16,400        12,300 
9 1/4% Senior Subordinated Notes due 2008..........................     20,813        15,610 
11 5/8% Senior Discount Debentures.................................      5,979         4,442 
Other borrowing costs..............................................        638           560 
Amortization of deferred financing costs...........................      2,000         1,500 
                                                                    -----------  ------------
                                                                     $  46,318    $   34,764 
                                                                    -----------  ------------
                                                                    -----------  ------------

Interest expense on the Revolving Credit Facility includes the unused     
  facility fee (0.375%) of $457 and $352 in fiscal 1997 and fiscal 1998 nine
months, respectively.                                                   

   Interest rates with respect to borrowings under the Revolving Credit Facility
and the Term Loan Facility are variable. A 25-basis point increase in   
interest rates on borrowings under the Revolving Credit Facility and the
Term Loan Facility would increase pro forma interest expense by $500    
annually.                                                               

(i) To eliminate certain United States Federal and state income taxes. Following
the Acquisition, a significant portion of the Company's business will be
  operated as a United States limited liability company, whereby the limited
liability company will not itself be subject to income tax, the taxable 
income of the limited liability company in the United States will be    
   allocated to the equity holders of Holdings and such equity holders will be
   responsible for income taxes on such taxable income. The Company expects to
    make distributions in the form of dividends to equity holders of Holdings to
  enable them to meet their tax obligations with respect to income allocated
    to them by the Company. Foreign and domestic taxes payable on taxable income
   generated by the Company's foreign subsidiaries and its truck-mounted crane
business will continue to be the responsibility of the Company. The pro 
  forma adjustment does not reflect income tax planning techniques which may
be implemented to reduce such foreign and domestic taxes.               

P-6 

424B3
122nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 122nd
INDEX TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS 

                                                        [Enlarge/Download Table]

                                                                                                              PAGE   
                                                                                                            ---------
                                                                                                                     
THE GROVE COMPANIES:                                                                                                 

Report of Independent Auditors.............................................................................    F-2   

Report of Independent Accountants..........................................................................    F-3   

Combined Balance Sheets as of September 28, 1996 and September 27, 1997....................................    F-4   

Combined Statements of Operations for the years ended September 30, 1995, September 28, 1996 and September     F-5   
  27, 1997.................................................................................................          

Combined Statements of Changes in Invested Capital for the years ended September 30, 1995, September 28,       F-6   
  1996 and September 27, 1997..............................................................................          

Combined Statements of Cash Flows for the years ended September 30, 1995, September 28, 1996 and September     F-7   
  27, 1997.................................................................................................          

Notes to Combined Financial Statements.....................................................................    F-8   

GROVE HOLDINGS LCC:                                                                                                  

Unaudited Condensed Consolidated Balance Sheet as of June 27, 1998.........................................   F-32   

Unaudited Condensed Combined Statements of Operations for the nine months ended June 28, 1997 and seven       F-33   
  months ended April 28, 1998 and Unaudited Condensed Consolidated Statement of Operations for the two               
  months ended June 27, 1998...............................................................................          

Unaudited Condensed Combined Statements of Cash Flows for the nine months ended June 28, 1997, and seven      F-34   
  months ended April 28, 1998 and Unaudited Condensed Consolidated Statement of Cash Flows for and the two           
  months ended and June 27, 1998...........................................................................          

Notes to Unaudited Condensed Financial Statements..........................................................   F-35   

 Grove Holdings LLC, Grove Holdings Capital, Inc., Grove Worldwide LLC and
Grove Capital, Inc. were formed in December 1997, March 1998, December 1997 and 
March 1998, respectively, with nominal capital contributions and had no         
operations prior to the Acquisition. Accordingly, Holdings has not provided     
herein any financial statements for such entities for any period prior to the   
Acquisition.                                                                    

F-1 

424B3
123rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 123rd
REPORT OF INDEPENDENT AUDITORS

The Shareholder of                                                              
The Grove Companies                                                         

    We have audited the accompanying combined balance sheets as of September 27,
1997 and September 28, 1996 of the Grove Companies (as listed in Note 1), and   
the related combined statements of income, changes in invested capital, and cash
flows for each of the two years in the period ended September 27, 1997. Our     
audits also included the financial statements schedule listed in the Index at   
Item 21(b). These financial statements and schedules are the responsibility of  
the Companies' management. Our responsibility is to express an opinion on the   
financial statements and schedule 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 of 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, the financial statements referred to above present fairly,
in all material respects, the combined financial position at September 27, 1997 
and September 28, 1996, of the Grove Companies, and the combined results of     
their operations and their cash flows for each of the two years in the period   
ended September 27, 1997, in conformity with generally accepted accounting      
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basis financial statements taken as a whole,      
presents fairly in all material respects the information set forth therein.     

                     ERNST & YOUNG LLP

December 15, 1997                                                               
except for Note 19, as to which the date is                                     
April 29, 1998                                                                  
Baltimore, Maryland                                                             

F-2 

424B3
124th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 124th
REPORT OF INDEPENDENT ACCOUNTANTS 

To the Shareholder of                                                           
The Grove Companies                                                         

   In our opinion, the combined statements of operations, of cash flows and of
changes in invested capital for the year ended September 30, 1995 present       
fairly, in all material respects, the results of operations and cash flows of   
The Grove Companies for the year ended September 30, 1995, in conformity with   
generally accepted accounting principles. Our audit also included the financial 
statement schedule listed in the Index as Item 21(b). 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. We have not  
audited the combined statements of The Grove Companies for any period subsequent
to September 30, 1995.                                                          

                              PricewaterhouseCoopers LLP

December 15, 1997                                                               
Florham Park, NJ                                                                

F-3 

424B3
125th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 125th
THE GROVE COMPANIES 

COMBINED BALANCE SHEETS 

AS OF SEPTEMBER 28, 1996 AND SEPTEMBER 27, 1997 

(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                              1996        1997   
                                                                                           ----------  ----------
                                                                                                                 
ASSETS                                                                                                           
Current assets:                                                                                                  
  Cash and cash equivalents............................................................... $    8,184  $    5,024
  Trade receivables (net).................................................................    121,044     149,164
  Notes receivable........................................................................     --          68,450
  Inventories.............................................................................    222,542     215,332
  Other current assets....................................................................      6,680       7,633
  Deferred tax assets.....................................................................     --          14,936
                                                                                           ----------  ----------
    Total current assets..................................................................    358,450     460,539
Property, plant, and equipment (net)......................................................    101,176     147,588
Goodwill..................................................................................    264,844     254,728
Deferred tax assets.......................................................................     --          11,415
Other non-current assets..................................................................      5,688       7,226
                                                                                           ----------  ----------
    Total assets.......................................................................... $  730,158  $  881,496
                                                                                           ----------  ----------
                                                                                           ----------  ----------
LIABILITIES AND INVESTED CAPITAL                                                                                 
Current liabilities:                                                                                             
  Trade accounts payable.................................................................. $   70,779  $   70,327
  Short-term borrowings...................................................................      7,443       7,265
  Income taxes payable....................................................................     --           4,622
  Deferred tax liability..................................................................      4,828      --    
  Other payables and accrued liabilities..................................................     90,206      86,112
                                                                                           ----------  ----------
    Total current liabilities.............................................................    173,256     168,326
Non-current liabilities:                                                                                         
  Deferred tax liability..................................................................      4,047      --    
  Deferred revenue........................................................................     21,154      46,509
  Other non-current liabilities...........................................................     29,147      38,169
                                                                                           ----------  ----------
    Total liabilities.....................................................................    227,604     253,004
Total invested capital....................................................................    502,554     628,492
                                                                                           ----------  ----------
    Total liabilities and invested capital................................................ $  730,158  $  881,496
                                                                                           ----------  ----------
                                                                                           ----------  ----------

See notes to combined financial statements. 

F-4 

424B3
126th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 126th
THE GROVE COMPANIES 

COMBINED STATEMENTS OF OPERATIONS 

FOR THE YEARS ENDED SEPTEMBER 30, 1995, 

SEPTEMBER 28, 1996, AND SEPTEMBER 27, 1997

(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                   FISCAL YEAR ENDED             
                                                                      -------------------------------------------
                                                                                                                 
                                                                      SEPTEMBER 30,  SEPTEMBER 28,  SEPTEMBER 27,
                                                                          1995           1996           1997     
                                                                      -------------  -------------  -------------
Net sales...........................................................   $   503,815    $   794,209    $   856,812 
Cost of goods sold..................................................       377,226        609,130        653,539 
                                                                      -------------  -------------  -------------
    Gross profit....................................................       126,589        185,079        203,273 
Selling, engineering, general, and administrative expenses..........        84,826        128,804        131,246 
Management fees.....................................................         3,390          5,655          2,176 
Restructuring charges...............................................       --             --               1,960 
                                                                      -------------  -------------  -------------
    Operating profit................................................        38,373         50,620         67,891 
Net interest (expense) income, net of interest income of $302, $535,                                             
  and $2,085 respectively...........................................        (2,312)        (2,791)            43 
Other (expense) income, net.........................................          (279)          (193)           535 
                                                                      -------------  -------------  -------------
    Income before income taxes......................................        35,782         47,636         68,469 
Income taxes........................................................        19,013         22,188         26,249 
                                                                      -------------  -------------  -------------
    Net income......................................................   $    16,769    $    25,448    $    42,220 
                                                                      -------------  -------------  -------------
                                                                      -------------  -------------  -------------

See notes to combined financial statements. 

F-5 

424B3
127th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 127th
THE GROVE COMPANIES 

COMBINED STATEMENTS OF CHANGES IN INVESTED CAPITAL

FOR THE YEARS ENDED SEPTEMBER 30, 1995, 

SEPTEMBER 28, 1996, AND SEPTEMBER 27, 1997

(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                               MINIMUM                            
                                                                               PENSION                   TOTAL    
                                                                  INVESTED    LIABILITY   TRANSLATION   INVESTED  
                                                                  CAPITAL    ADJUSTMENT   ADJUSTMENT    CAPITAL   
                                                                 ----------  -----------  -----------  ---------- 
                                                                                                                  
Balance at October 1, 1994...................................... $  420,401   $    (975)   $ (19,664)  $  399,762 
  Net income....................................................     16,769      --           --           16,769 
  Dividend paid to parent.......................................    (11,097)     --           --          (11,097)
  Net transactions with affiliates..............................     61,825      --           --           61,825 
  Change in minimum pension liability...........................     --          (1,102)      --           (1,102)
  Change in foreign currency translation........................     --          --            1,149        1,149 
                                                                 ----------  -----------  -----------  ---------- 
Balance at September 30, 1995...................................    487,898      (2,077)     (18,515)     467,306 
  Net income....................................................     25,448      --           --           25,448 
  Dividend paid to parent.......................................    (30,057)     --           --          (30,057)
  Net transactions with affiliates..............................     42,394      --           --           42,394 
  Change in minimum pension liability...........................     --            (162)      --             (162)
  Change in foreign currency translation........................     --          --           (2,375)      (2,375)
                                                                 ----------  -----------  -----------  ---------- 
Balance at September 28, 1996...................................    525,683      (2,239)     (20,890)     502,554 
  Net income....................................................     42,220      --           --           42,220 
  Net transactions with affiliates..............................     88,524      --           --           88,524 
  Change in minimum pension liability...........................     --             601       --              601 
  Change in foreign currency translation........................     --          --           (5,407)      (5,407)
                                                                 ----------  -----------  -----------  ---------- 
Balance at September 27, 1997................................... $  656,427   $  (1,638)   $ (26,297)  $  628,492 
                                                                 ----------  -----------  -----------  ---------- 
                                                                 ----------  -----------  -----------  ---------- 

See notes to combined financial statements. 

F-6 

424B3
128th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 128th
THE GROVE COMPANIES 

COMBINED STATEMENTS OF CASH FLOWS 

FOR THE YEARS ENDED SEPTEMBER 30, 1995, 

SEPTEMBER 28, 1996, AND SEPTEMBER 27, 1997

(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                  FISCAL YEAR ENDED             
                                                                     -------------------------------------------
                                                                                                                
                                                                     SEPTEMBER 30,  SEPTEMBER 28,  SEPTEMBER 27,
                                                                         1995           1996           1997     
                                                                     -------------  -------------  -------------
OPERATING ACTIVITIES                                                                                            
  Net income........................................................   $  16,769     $    25,448    $    42,220 
  Adjustments to reconcile net income to net cash provided by                                                   
    operating activities:                                                                                       
      Depreciation and amortization.................................      13,765          17,313         17,985 
      Depreciation of equipment held for rent.......................         196           3,805          8,352 
      (Gain)/loss on sale of fixed assets...........................      (1,297)              5           (600)
      Deferred tax expense..........................................         183             126          1,969 
      Changes in operating assets and liabilities:                                                              
        Trade receivables (net).....................................     (13,241)        (48,405)       (23,266)
        Notes receivable............................................      --             --             (68,450)
        Inventories.................................................     (33,766)        (27,528)          (162)
        Trade accounts payable......................................      (1,022)         21,559            564 
        Other assets and liabilities (net)..........................      25,366          17,503         33,383 
                                                                     -------------  -------------  -------------
  Net cash provided by operating activities.........................       6,953           9,826         11,995 
                                                                     -------------  -------------  -------------
INVESTING ACTIVITIES                                                                                            
  Capital expenditures..............................................      (7,385)        (19,443)       (32,491)
  Investment in equipment held for rent.............................        (552)        (22,527)       (37,904)
  Proceeds from sales of property, plant, and equipment.............       1,733             432          1,603 
  Acquisition of businesses.........................................     (40,370)         (3,703)       --      
                                                                     -------------  -------------  -------------
  Net cash used in investing activities.............................     (46,574)        (45,241)       (68,792)
                                                                     -------------  -------------  -------------
FINANCING ACTIVITIES                                                                                            
  Net proceeds from short-term borrowings...........................        (127)          7,443            204 
  Net amounts received from parent..................................      61,825          48,366         54,145 
  Cash dividends paid to parent.....................................     (11,097)        (30,057)       --      
                                                                     -------------  -------------  -------------
  Net cash provided by financing activities.........................      50,601          25,752         54,349 
                                                                     -------------  -------------  -------------
  Effect of exchange rate changes on cash...........................         570            (838)          (712)
                                                                     -------------  -------------  -------------
  Net increase (decrease) in cash and cash equivalents..............      11,550         (10,501)        (3,160)
  Cash and cash equivalents at beginning of year....................       7,135          18,685          8,184 
                                                                     -------------  -------------  -------------
  Cash and cash equivalents at end of year..........................   $  18,685     $     8,184    $     5,024 
                                                                     -------------  -------------  -------------
                                                                     -------------  -------------  -------------

See notes to combined financial statements. 

F-7 

424B3
129th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 129th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS

(IN THOUSANDS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

ORGANIZATION AND BASIS OF PRESENTATION                                          

   The Grove Companies (the "Company") and the accompanying combined financial
statements consist of the combined operations and substantially all of the      
assets and liabilities of Kidde Industries, Inc. and the following legal        
entities: Grove Europe Ltd., Crane Holding Inc., Delta Manlift SAS, Grove France
SA, Deutsche Grove GmbH, and Grove Manlift Pty. Ltd. All of the Grove Companies 
are either directly or indirectly wholly owned by Hanson PLC, a United Kingdom  
company.                                                                        

All significant intercompany transactions have been eliminated in the   
accompanying combined financial statements.                                     

DESCRIPTION OF BUSINESS                                                         

The Company is primarily engaged in the design, production, sale, and   
after-sale support of mobile hydraulic cranes, aerial work platforms and        
truck-mounted cranes. The Company's manufacturing plants and primary related    
facilities are located in: Shady Grove and Chambersburg, Pennsylvania and       
Waverly, Nebraska, United States; Sunderland, United Kingdom; Wilhelmshaven and 
Langenfeld, Germany; and Tonneins and Cergy, France. The majority of the        
Company's sales are to independent distributors, rental companies, and end users
which serve the heavy industrial and construction industries in the United      
States and Europe.                                                              

FOREIGN CURRENCY TRANSLATION                                                    

  The financial statements of subsidiaries located outside the United States
are measured using the local currency as the functional currency. Assets,       
including goodwill, and liabilities are translated at the rates of exchange at  
the balance sheet date. The resulting translation gains and losses are included 
as a separate component of invested capital. Income and expense items are       
translated at average monthly rates of exchange. Gains and losses from foreign  
currency transactions of these subsidiaries are included in net income.         
Aggregate gains (losses) on foreign currency transactions are not material.     

USE OF ESTIMATES                                                                

The preparation of financial statements in conformity with generally    
accepted accounting principles requires management to make reasonable estimates 
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.           

CASH AND CASH EQUIVALENTS                                                       

The Company defines cash equivalents as highly liquid investments with a
maturity of less than three months when purchased.                              

TRADE RECEIVABLES AND NOTES RECEIVABLE                                          

  Trade receivables are net of allowance for doubtful accounts of $2,553 and
$2,717 as of September 28, 1996 and September 27, 1997, respectively.           

Notes receivable relate to sales of new equipment to North American     
distributors on terms of up to 360 days. Payment of interest and principle are  
due at the maturity of the note unless the dealer sells the                     

F-8 

424B3
130th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 130th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                       
equipment prior to maturity in which case the notes must be repaid immediately  
along with any interest accrued thereon.                                        

INVENTORIES                                                                     

Inventories are valued at the lower of cost or market, as determined    
primarily under the first-in, first-out method.                                 

PROPERTY, PLANT AND EQUIPMENT                                                   

  Property, plant, and equipment are stated at cost. Maintenance and repairs
are charged to operations when incurred, while expenditures having the effect of
extending the useful life of an asset are capitalized. Depreciation is computed 
primarily using the straight-line method for financial reporting purposes. The  
depreciation periods for these assets are as follows:                           

                                                                [Download Table]
                                                                            
Land improvements...............................................  3-20 years
Buildings and improvements......................................  10-50     
                                                                  years     
Machinery and equipment.........................................  3-12 years
Equipment held for rent.........................................  Lease term
Furniture and fixtures..........................................  3-10 years

GOODWILL                                                                        

 The excess of the purchase price of the Company and its subsidiaries over
the fair value of the net assets acquired was recorded as goodwill. Amortization
expense is recorded on the straight-line method over periods of up to 40 years. 
The Company assesses the recovery of goodwill by determining whether            
amortization of the goodwill over its remaining life can be recovered through   
undiscounted cash flows of the acquired operations. Goodwill impairment, if any,
is measured by determining the amount by which the carrying value of the        
goodwill exceeds its fair value based upon discounting of future cash flows.    

IMPAIRMENT OF LONG-LIVED ASSETS                                                 

    In accordance with FASB Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," the Company     
records impairment losses on long-lived assets when events and circumstances    
indicate that the assets might be impaired. No such losses have been recorded in
the accompanying financial statements.                                          

POSTRETIREMENT BENEFITS                                                         

    The Company has several defined benefit pension plans covering substantially
all of its employees. Plans covering salaried employees provide pension benefits
that are based on the participant's final average salary and credited service.  
Plans covering hourly employees provide benefits based on the participant's     
career earnings and service with the Company. The Company's funding policy for  
all plans is to make the minimum annual contributions required by applicable    
regulations, plus such additional amounts as the Company may determine to be    
appropriate from time to time. Prior service costs and                          

F-9 

424B3
131st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 131st
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                       
unrecognized gains or losses in excess of the corridor for defined benefit plans
are generally amortized on the straight-line method over the estimated remaining
service periods of participants.                                                

   Certain employees of the Company are covered by defined contribution plans.
The Company's contributions to the plans are based on percentage of employee    
compensation or employee contributions. The plans are funded on a current basis.

    In addition to pension benefits, the Company provides certain postretirement
medical, and prescription drug benefits, principally to certain former United   
States employees. These plans are unfunded. Retirees in other countries are     
generally covered by government-sponsored programs.                             

DERIVATIVE FINANCIAL INSTRUMENTS                                                

Derivative financial instruments are utilized by the Company to reduce  
foreign currency exchange risks and consist primarily of forward contracts. The 
Company does not hold or issue derivative financial instruments for trading     
purposes. Gains and losses on foreign currency transaction hedges are recognized
in income and offset the foreign exchange gains and losses of the underlying    
transactions. Gains and losses on foreign currency firm commitment hedges are   
deferred and included in the basis of the transactions underlying the           
commitments. If and when the hedged transactions are no longer likely to occur, 
the derivative financial instruments are marked-to-market and recognized through
the income statement as other income or expense.                                

REVENUE RECOGNITION                                                             

Revenue is generally recognized as products are shipped to customers.   
However, for certain transactions, the Company provides guarantees of the       
residual value of the equipment to third party leasing companies. Such          
guarantees generally take the form of end-of-term residual value guarantees or  
reducing residual value guarantees. Reducing residual value guarantees represent
guarantees of residual value that decline with the passage of time. End-of-term 
guarantees and reducing residual value guarantees are generally over periods of 
five years. The Company records these transactions in accordance with the lease 
principles established by FASB Statement No. 13. If the transaction qualifies as
an operating lease, the Company records deferred revenue for the amount of the  
net proceeds received upon the equipment's initial transfer to the customer. The
liability is then subsequently reduced on a pro rata basis over the period to   
the first exercise date of the guarantee, to the amount of the guaranteed       
residual value at that date, with corresponding credits to revenue in the       
Company's income statement. Any further reduction in the guaranteed residual    
value resulting from the purchaser's decision to continue to use the equipment  
is recognized in a similar manner. Depreciation of equipment held for rent is   
recognized in a similar manner over the term of the lease agreement. As of      
September 28, 1996 and September 27, 1997, the amount of deferred revenue       
relating to transactions involving residual value guarantees which is included  
in other current or noncurrent liabilities was $24,179 and $53,150,             
respectively.                                                                   

PRODUCT WARRANTIES                                                              

  Product warranty expenses are provided for estimated normal warranty costs
at the time of sale. Additional warranty expense is provided for specific       
performance issues when identified. Specific performance issues relate to       
situations in which the Company issues a part replacement notice to each owner  
of a                                                                            

F-10

424B3
132nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 132nd
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                       
model that is experiencing a particular problem. Estimated obligations beyond   
one year are classified as other non-current liabilities.                       

RESEARCH AND DEVELOPMENT                                                        

    Research and development expenditures are charged to operations as incurred.
Research and development costs were $9,337, $14,976, and $15,427 for the years  
ended September 30, 1995, September 28, 1996, and September 27, 1997,           
respectively.                                                                   

ADVERTISING                                                                     

 All costs associated with advertising and promoting products are expensed
when incurred. Advertising expense amounted to $3,952, $3,887, and $4,802 for   
the years ended September 30, 1995, September 28, 1996, and September 27, 1997, 
respectively.                                                                   

STOCK-BASED COMPENSATION                                                        

 The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees," and related interpretations in  
accounting for its stock-based compensation arrangements.                       

ADOPTION OF NEW ACCOUNTING STANDARDS                                            

In October 1996, the Accounting Standards Executive Committee of the    
American Institute of Certified Public Accountants issued Statement of Position 
(SOP) 96-1, "Environmental Remediation Liabilities." The SOP provides           
authoritative guidance on the recognition, measurement, display, and disclosure 
of environmental liabilities.                                                   

 The SOP provides benchmarks that should be considered when evaluating the
probability that a loss has been incurred and the extent to which the amount of 
any loss is reasonably estimable at each benchmark. Management does not believe 
that the adoption of this SOP will have a material effect on the Company's      
financial position or on its results of operations.                             

   In June 1997, the Financial Accounting Standards Board issued Statement No.
130 "Reporting of Comprehensive Income." This Statement requires the reporting  
of comprehensive income in interim and annual financial statements. Net income  
together with periodic adjustments with respect to foreign currency translation 
and minimum pension liabilities will result in comprehensive income. The Company
intends to adopt the pronouncement in the first quarter of fiscal year 1999.    

   In 1997, the Financial Accounting Standards Board issued Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information." This     
Statement requires that public business enterprises disclose information about  
their products and services, operating segments, the geographic areas in which  
they operate, and their major customers. Management will adopt the provisions of
this standard in fiscal year 1999.                                              

F-11

424B3
133rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 133rd
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

2. ACQUISITIONS                                                                 

  On August 30, 1995, the Company acquired certain assets and liabilities of
Krupp Mobilkrane GmbH and affiliates of the Fried.Krupp AG Hoesch-Krupp's       
("Krupp") mobile hydraulic crane business, for approximately $40,370. The       
acquisition was accounted for under the purchase method. The purchase price was 
allocated based on the fair values of the assets and liabilities acquired, with 
the excess allocated to goodwill. In connection with the acquisition, the       
Company recognized $10,454 in goodwill which is being amortized on the          
straight-line basis over a period of 15 years. Results of the Company's         
operations from the date of acquisition, including the amortization of goodwill,
have been reflected in the statement of operations.                             

  Pro forma unaudited combined operating results of the Company for the year
ended September 30, 1995, assuming that the acquisition had been made as of     
October 2, 1994 are summarized below:                                           

                                                                [Download Table]
                                                                             
Net sales.........................................................  $ 639,203
Operating profit..................................................  $  38,210
Net income........................................................  $  15,799

    These pro forma results have been prepared for comparative purposes only and
include certain adjustments, including the recognition of additional            
amortization expense as a result of goodwill. They do not purport to be         
indicative of the results of operations which actually would have resulted had  
the combination been in effect on October 2, 1994 or of future results of       
operations of the combined entities.                                            

    A summary of the fair value of assets acquired and liabilities assumed as of
August 30, 1995 are as follows:                                                 

                                                                [Download Table]
                                                                              
Inventories........................................................  $  58,492
Property, plant, and equipment.....................................     14,203
Goodwill...........................................................     10,454
Other non-current assets...........................................      1,571
                                                                     ---------
  Total assets.....................................................     84,720
                                                                     ---------
                                                                     ---------
Trade accounts payable.............................................     10,535
Other payables and accrued liabilities.............................     33,410
Other non-current liabilities......................................        405
                                                                     ---------
  Total liabilities................................................     44,350
                                                                     ---------
  Total cash paid..................................................  $  40,370
                                                                     ---------
                                                                     ---------

In 1996, the Company acquired the operations of Delta Manlift SAS for a 
purchase price of $3,703. The acquisition was accounted for under the purchase  
method and is not significant to the Company's operations.                      

3. RESTRUCTURING                                                                

In 1996, the Company restructured certain operations obtained in the    
acquisition of Krupp's mobile hydraulic crane business and recorded a purchase  
accounting reserve (and increase to goodwill) of $1,642.                        

F-12

424B3
134th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 134th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

3. RESTRUCTURING (CONTINUED)                                                    
    In 1997, the Company recorded a restructuring charge of approximately $1,960
related to the gradual phase-out of crane production at its Sunderland, United  
Kingdom location.                                                               

4. INVENTORY                                                                    

The components of inventory are as follows as of September 28, 1996 and 
September 27, 1997:                                                             

                                                        [Enlarge/Download Table]

                                                                          1996        1997   
                                                                       ----------  ----------
                                                                                             
Raw materials and supplies............................................ $   58,749  $   76,573
Work in process.......................................................     88,005      78,993
Finished goods........................................................     75,788      59,766
                                                                       ----------  ----------
                                                                       $  222,542  $  215,332
                                                                       ----------  ----------
                                                                       ----------  ----------

5. PROPERTY, PLANT AND EQUIPMENT                                                

The components of property, plant and equipment are as follows as of    
September 28, 1996 and September 27, 1997:                                      

                                                        [Enlarge/Download Table]

                                                                          1996        1997    
                                                                       ----------  ---------- 
                                                                                              
Land and improvements................................................. $   12,789  $   12,765 
Buildings and improvements............................................     60,348      63,052 
Machinery and equipment...............................................     62,904      71,864 
Equipment held for rent...............................................     24,845      58,455 
Furniture and fixtures................................................     15,845      17,016 
Construction in progress..............................................      7,090      20,329 
                                                                       ----------  ---------- 
                                                                          183,821     243,481 
Less accumulated depreciation and amortization........................    (82,645)    (95,893)
                                                                       ----------  ---------- 
                                                                       $  101,176  $  147,588 
                                                                       ----------  ---------- 
                                                                       ----------  ---------- 

  Depreciation expense for the years ended September 30, 1995, September 28,
1996, and September 27, 1997 was $5,898, $11,933 and $17,295, respectively.     
Gains and losses on the sale of fixed assets are included in other (expense)    
income.                                                                         

Construction in progress consists primarily of costs related to the     
Company's installation of new manufacturing and administrative systems,         
including computer hardware and software components. The project is expected to 
be completed during the latter part of fiscal year 1998. As of September 28,    
1996 and September 27, 1997, total capitalized costs related to this project    
were approximately $4,286 and $18,328, respectively. Project costs related to   
reengineering, training of personnel, and the current and future operational    
state assessments have been expensed as incurred.                               

F-13

424B3
135th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 135th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

6. GOODWILL                                                                     

 Goodwill consists of the following as of September 28, 1996 and September
27, 1997:                                                                       

                                                        [Enlarge/Download Table]

                                                                          1996        1997    
                                                                       ----------  ---------- 
                                                                                              
Goodwill.............................................................. $  338,505  $  337,443 
Accumulated amortization..............................................    (73,661)    (82,715)
                                                                       ----------  ---------- 
                                                                       $  264,844  $  254,728 
                                                                       ----------  ---------- 
                                                                       ----------  ---------- 

7. SHORT-TERM BORROWINGS AND LINES OF CREDIT                                    

The Company's European operations maintain credit facilities. As of     
September 27, 1997, the Company had $14,998 of credit facilities available for  
discounting certain accounts receivable. As of September 28, 1996 and September 
27, 1997, $7,443 and $7,265 were drawn against these facilities. The interest   
rate charged on the outstanding borrowings was 3.25% and 3.0% at September 28,  
1996 and September 27, 1997, respectively. As of September 27, 1997, the Company
also had available revolving lines-of-credit in the amount of $14,072. These    
arrangements do not have termination dates and are reviewed periodically. No    
material commitment fees are required to be paid on the undrawn portion of the  
credit facilities and the revolving lines of credit.                            

8. OTHER PAYABLES AND ACCRUED LIABILITIES                                       

  The components of other payables and accrued liabilities are as follows as
of September 28, 1996 and September 27, 1997:                                   

                                                        [Enlarge/Download Table]

                                                                           1996       1997   
                                                                         ---------  ---------
                                                                                             
Salaries and wages...................................................... $  18,639  $  21,036
Employee benefits.......................................................     8,511      8,603
Accrued warranty........................................................    23,940     18,044
Deferred revenue associated with equipment held for rent................     3,025      6,641
Product, workers' compensation and general liability....................    12,923     12,757
All other...............................................................    23,168     19,031
                                                                         ---------  ---------
                                                                         $  90,206  $  86,112
                                                                         ---------  ---------
                                                                         ---------  ---------

  All other consists primarily of accruals for advertising, commissions, and
accruals for inventory receipts.                                                

9. CREDIT AND FOREIGN EXCHANGE RISK                                             

Trade receivables subject the Company to concentration of credit risk,  
because they are concentrated in distributors and rental companies which serve  
the heavy industrial and construction industries, which are subject to business 
cycle variations. For the fiscal years ended September 30, 1995, September 28,  
1996 and September 27, 1997, approximately 20%, 20% and 19%, respectively, of   
revenues were generated from six major customers, with no one customer          
accounting for more than 5% of total revenue. Approximately 15%                 

F-14

424B3
136th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 136th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

9. CREDIT AND FOREIGN EXCHANGE RISK (CONTINUED)                                 
and 31% of the outstanding trade and notes receivable balance as of September   
28, 1996 and September 27, 1997, respectively, were due from these customers.   
This risk is managed by the periodic evaluation of customers' financial         
condition.                                                                      

The Company generally offers terms of up to 30 days to its customers and
generally obtains a security interest in the underlying machinery sold. In the  
year ended September 27, 1997, the Company offered a special financing program  
primarily to its U.S. distributors which provides credit terms of periods up to 
360 days in exchange for an interest-bearing note. The Company generally retains
a security interest in the machinery sold.                                      

Through its foreign currency hedging activities, the Company seeks to   
minimize the risk that cash flows resulting from the sales of products          
manufactured in a currency different from that of the selling company will be   
affected by changes in exchange rates. Management responds to foreign exchange  
movements through various means, such as pricing actions, changes in cost       
structure, and changes in hedging strategies.                                   

The Company may hedge its foreign currency transactions and firm sales  
commitment exposures, based on management's judgment, through forward exchange  
contracts. These forward exchange contracts are purchased from local banks or   
from the Company's parent, Hanson PLC. Some of the contracts involve the        
exchange of two foreign currencies according to the local needs of the          
companies.                                                                      

The following table summarizes the contractual amounts of the Company's 
forward exchange contracts as of September 28, 1996 and September 27, 1997,     
including details by major currency as of September 27, 1997. Foreign currency  
amounts were translated at the current rate as of the reporting date. The "sell"
amounts represent the U.S. dollar equivalent of commitments to sell foreign     
currencies, and the "buy" amounts represent the U.S. dollar equivalent of       
commitments to purchase foreign currencies.                                     

                                                        [Enlarge/Download Table]

                                                                           BUY        SELL    
                                                                        ---------  ---------- 
                                                                                              
As of September 28, 1996............................................... $  48,856  $  (49,145)
                                                                        ---------  ---------- 
                                                                        ---------  ---------- 
As of September 27, 1997:                                                                     
  United States Dollars................................................ $   2,098  $   (6,880)
  Japanese Yen.........................................................    --            (208)
  German Marks.........................................................    10,651      (1,687)
  Pounds Sterling......................................................     7,347      (5,175)
  French Francs........................................................        21      (6,443)
                                                                        ---------  ---------- 
                                                                        $  20,117  $  (20,393)
                                                                        ---------  ---------- 
                                                                        ---------  ---------- 

  The Company's credit exposure on its foreign currency derivatives was $352
and $259 as of September 28, 1996 and September 27, 1997, respectively,         
including $17 and $38, respectively with Hanson PLC. Gross deferred realized    
gains and losses on firm commitments were not significant as of September 28,   
1996 and September 27, 1997. Substantially all of the amounts deferred at       
September 27, 1997 are expected to be recognized in income during fiscal year   
1998, when the gains or losses on the underlying transactions will also be      
recognized.                                                                     

F-15

424B3
137th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 137th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

10. FAIR VALUE OF FINANCIAL INSTRUMENTS                                         

   The fair value of a financial instrument represents the amount at which the
instrument could be exchanged in a current transaction between willing parties, 
other than a forced sale or liquidation. Significant differences can arise      
between the fair value and carrying amount of financial instruments that are    
recognized at historical cost amounts.                                          

    The following methods and assumptions were used by the Company in estimating
fair value disclosures for financial instruments:                               

     Cash, trade receivables, notes receivable, trade accounts payable and
  short-term borrowings: The amounts reported in the combined balance sheets
approximate fair value.                                                 

        Foreign currency contracts: The fair value of forward exchange contracts
is estimated using prices established by financial institutions for     
    comparable instruments. As of September 28, 1996 and September 27, 1997, the
carrying amounts of forward currency contracts reported in the balance  
sheets were in a net liability of $225 and $276, respectively. The fair 
value of the forward contracts approximated the carrying amounts as of  
September 28, 1996 and September 27, 1997.                              

11. INCOME TAXES                                                                

   For the period presented, federal and state income taxes are provided as if
the Company filed its own separate income tax returns. The Company files its    
foreign income tax returns separately for each subsidiary. In the U.S., certain 
of the Company's operations were included in a U.S. consolidated return with    
other Hanson PLC affiliates until the demerger of Millennium Chemicals Inc.     
("Millennium"). As a result of transactions consummated pursuant to the         
demerger, the U.S. operations now file separate U.S. federal and state income   
tax returns. The Company is charged for its share of taxes by Hanson PLC. These 
charges are reflected in invested capital. In 1995 and 1996, Hanson PLC did not 
charge the Company for its share of federal taxes.                              

   The Company uses the liability method in accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on the    
differences between financial reporting and tax bases of assets and liabilities 
and are measured using enacted tax rates and laws that will be in effect when   
the differences are expected to reverse.                                        

Income (losses) from continuing operations before income taxes were as  
follows for the fiscal years ended September 30, 1995, September 28, 1996 and   
September 27, 1997:                                                             

                                                        [Enlarge/Download Table]

                                                                1995       1996       1997   
                                                              ---------  ---------  ---------
                                                                                             
United States................................................ $  39,979  $  47,535  $  66,721
Other Countries..............................................    (4,197)       101      1,748
                                                              ---------  ---------  ---------
                                                              $  35,782  $  47,636  $  68,469
                                                              ---------  ---------  ---------
                                                              ---------  ---------  ---------

F-16

424B3
138th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 138th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

11. INCOME TAXES (CONTINUED)                                                    

   The provision for income taxes is comprised of the following for the fiscal
years ended September 30, 1995, September 28, 1996 and September 27, 1997:      

                                                        [Enlarge/Download Table]

                                                                1995       1996       1997   
                                                              ---------  ---------  ---------
                                                                                             
Current:                                                                                     
  United States.............................................. $  18,979  $  21,623  $  23,979
  Other Countries............................................      (149)       439        301
                                                              ---------  ---------  ---------
                                                                 18,830     22,062     24,280
Deferred:                                                                                    
  United States..............................................       183        126      1,969
  Other Countries............................................    --         --         --    
                                                              ---------  ---------  ---------
                                                                    183        126      1,969
                                                              ---------  ---------  ---------
                                                              $  19,013  $  22,188  $  26,249
                                                              ---------  ---------  ---------
                                                              ---------  ---------  ---------

   Significant components of the Company's deferred tax liabilities and assets
are as follows as of September 28, 1996 and September 27, 1997:                 

                                                        [Enlarge/Download Table]

                                                                          1996        1997    
                                                                       ----------  ---------- 
                                                                                              
Deferred tax liabilities:                                                                     
  Intercompany basis differences...................................... $   (7,557) $   (7,557)
  Fixed assets........................................................     (7,492)     --     
  Other...............................................................     (6,423)       (122)
                                                                       ----------  ---------- 
    Total deferred tax liabilities....................................    (21,472)     (7,679)
                                                                       ----------  ---------- 
Deferred tax assets:                                                                          
  Fixed assets........................................................     --           6,977 
  Tax-deductible goodwill.............................................     --           5,074 
  Inventory differences...............................................     --           1,881 
  Accrued expenses....................................................      1,114      12,221 
  Foreign net operating losses and AMT credits........................      6,957       6,323 
  Other...............................................................     11,483       7,877 
                                                                       ----------  ---------- 
  Total deferred tax assets...........................................     19,554      40,353 
                                                                       ----------  ---------- 
  Valuation allowance.................................................     (6,957)     (6,323)
                                                                       ----------  ---------- 
  Net deferred tax assets (liabilities)............................... $   (8,875) $   26,351 
                                                                       ----------  ---------- 
                                                                       ----------  ---------- 

    As stated above, the Company's ultimate parent, Hanson PLC, demerged several
of their businesses. In connection with the Millennium demerger, one of the     
Company's U.S. subsidiaries as well as the Company's German subsidiaries were   
owned by Millennium Chemicals Inc. from September 29, 1996 to October 6, 1996.  
On October 6, 1996, these subsidiaries were reacquired by Hanson PLC, which     
resulted in a new tax basis in certain assets and liabilities. The impact of    
this "step-up" in basis, generated additional deferred tax assets, of which     
$37,195 has been recorded as a component of invested capital. The combined      
financial statements reflect the results of operations of these entities for the
full year.                                                                      

F-17

424B3
139th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 139th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

11. INCOME TAXES (CONTINUED)                                                    
 Tax carryforwards at September 28, 1996 and September 27, 1997 consist of
alternative minimum tax credit carryforwards of $700 which do not expire, and   
other foreign net operating loss carryforwards of $17,878 and $16,066, which do 
not expire.                                                                     

The reasons for the differences between applicable income taxes and the 
amount computed by applying the statutory federal income tax rate of 35% to     
income before taxes were as follows for the fiscal years ended September 30,    
1995, September 28, 1996 and September 27, 1997:                                

                                                        [Enlarge/Download Table]

                                                                     1995       1996       1997    
                                                                   ---------  ---------  --------- 
                                                                                                   
Applicable income taxes based on federal statutory tax rate....... $  12,524  $  16,673  $  23,964 
State taxes, net of federal tax benefit...........................     1,879      1,130      2,520 
Goodwill amortization.............................................     2,822      2,955        333 
Foreign operating loss benefits not previously recognized.........      (229)    (1,020)    (1,409)
Foreign operating loss valuation allowances.......................     1,915      2,182      1,405 
Other.............................................................       102        268       (564)
                                                                   ---------  ---------  --------- 
                                                                   $  19,013  $  22,188  $  26,249 
                                                                   ---------  ---------  --------- 
                                                                   ---------  ---------  --------- 

   The Company does not provide for income taxes on the undistributed earnings
of a subsidiary not consolidated for U.S. federal income tax purposes since it  
intends to retain these earnings in the business. The additional taxes payable  
if these earnings were distributed would principally represent the difference   
between applicable U.S. income tax rates and credits allowed for taxes          
previously paid by such subsidiary.                                             

12. EMPLOYEE BENEFIT PLANS                                                      

    The Company has several defined benefit pension plans covering substantially
all of its employees. Plans covering salaried employees provide pension benefits
that are based on the participant's final average salary and credited service.  
Plans covering hourly employees provide benefits based on the participant's     
career earnings and service with the Company. The Company's funding policy for  
all plans is to make the minimum annual contributions required by applicable    
regulations, plus such additional amounts as the Company may determine to be    
appropriate from time to time.                                                  

The components of the net periodic pension costs for all U.S. defined   
benefit plans for the fiscal years ended September 30, 1995, September 28, 1996,
and September 27, 1997 are summarized below:                                    

                                                        [Enlarge/Download Table]

                                                                    1995       1996       1997    
                                                                  ---------  ---------  --------- 
                                                                                                  
Service cost..................................................... $   1,480  $   1,787  $   2,172 
Interest cost....................................................     2,149      2,482      3,128 
Actual return on assets..........................................    (1,773)    (1,895)    (2,748)
Net amortization and deferral....................................       122        341        539 
                                                                  ---------  ---------  --------- 
Net periodic pension costs....................................... $   1,978  $   2,715  $   3,091 
                                                                  ---------  ---------  --------- 
                                                                  ---------  ---------  --------- 

F-18

424B3
140th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 140th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

12. EMPLOYEE BENEFIT PLANS (CONTINUED)                                          
 The following tables set forth the U.S. plans' funded status at September
28, 1996 and September 27, 1997:                                                

                                                        [Enlarge/Download Table]

                                                                                        PLANS WHOSE   PLANS WHOSE 
                                                                                           ASSETS     ACCUMULATED 
                                                                                           EXCEED       BENEFITS  
                                                                                        ACCUMULATED      EXCEED   
                                                                                          BENEFITS       ASSETS   
                                                                                        ------------  ------------
                                                                                                                  
As of September 28, 1996                                                                                          
  Projected benefit obligation for service rendered to date...........................   $  (25,587)   $  (14,179)
  Plan assets at fair value, primarily marketable securities..........................       17,436        11,889 
                                                                                        ------------  ------------
  Underfunded projected benefit obligation............................................       (8,151)       (2,290)
  Unrecognized net loss...............................................................        3,764         3,445 
  Unrecognized prior service cost.....................................................          835         3,491 
  Adjustment to recognize the required minimum pension liability......................       --            (6,936)
                                                                                        ------------  ------------
  Pension liability recognized in the balance sheets..................................   $   (3,552)   $   (2,290)
                                                                                        ------------  ------------
Actuarial present value of accumulated benefit obligation, including vested benefits                              
  of $15,380 and $14,088, respectively................................................   $   15,565    $   14,179 
                                                                                        ------------  ------------
                                                                                        ------------  ------------
As of September 27, 1997                                                                                          
  Projected benefit obligation for service rendered to date...........................   $  (29,550)   $  (17,259)
  Plan assets at fair value, primarily marketable securities..........................       22,519        15,523 
                                                                                        ------------  ------------
  Underfunded projected benefit obligation............................................       (7,031)       (1,736)
  Unrecognized net loss...............................................................          933         2,520 
  Unrecognized prior service cost.....................................................        3,128         4,312 
  Adjustment to recognize the required minimum pension liability......................       --            (6,832)
                                                                                        ------------  ------------
  Pension liability recognized in the balance sheets..................................   $   (2,970)   $   (1,736)
                                                                                        ------------  ------------
                                                                                        ------------  ------------
  Actuarial present value of accumulated benefit obligation, including vested benefits                            
    of $18,574 and $16,776, respectively..............................................   $   18,859    $   17,259 
                                                                                        ------------  ------------
                                                                                        ------------  ------------

The weighted average discount rate and the rate of increase in future   
compensation levels used in determining the actuarial present value of the      
projected benefit obligation shown in the above domestic plan tables were 7.5%  
and 4.25%, respectively, for all periods presented above. The expected return on
plan assets was 9.0% for all periods presented above.                           

The plans' assets relating to the domestic plans are included in the HM 
Holdings Master Trust (the "Trust"). The Trust invests principally in listed    
stocks and bonds, including common stock of Hanson PLC which, at market values, 
comprised 2.1% of the Trust's assets at September 28, 1996. These assets were   
subsequently transferred to the Hanson North America Inc. Master Trust effective
November 1, 1996.                                                               

F-19

424B3
141st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 141st
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

12. EMPLOYEE BENEFIT PLANS (CONTINUED)                                          
The components of the net periodic pension costs for all foreign defined
benefit plans for the years ended September 30, 1995, September 28, 1996, and   
September 27, 1997 are summarized below:                                        

                                                        [Enlarge/Download Table]

                                                                    1995       1996       1997    
                                                                  ---------  ---------  --------- 
                                                                                                  
Service cost..................................................... $   1,216  $   1,804  $   1,978 
Interest cost....................................................     1,108      1,481      1,782 
Actual return on assets..........................................    (1,870)    (2,176)    (3,038)
Net amortization and deferral....................................       220         80        802 
                                                                  ---------  ---------  --------- 
Net periodic pension costs....................................... $     674  $   1,189  $   1,524 
                                                                  ---------  ---------  --------- 
                                                                  ---------  ---------  --------- 

The following table sets forth the foreign plans' unfunded status at    
September 30, 1996 and September 27, 1997:                                      

                                                        [Enlarge/Download Table]

                                                                          1996        1997    
                                                                       ----------  ---------- 
                                                                                              
Projected benefit obligation for service rendered to date............. $  (22,093) $  (25,906)
Plan assets at fair value, primarily marketable securities............     15,940      19,911 
                                                                       ----------  ---------- 
Underfunded projected benefit obligation..............................     (6,153)     (5,995)
Unrecognized net loss (gain)..........................................         77        (367)
                                                                       ----------  ---------- 
Pension liability recognized in the balance sheets.................... $   (6,076) $   (6,362)
                                                                       ----------  ---------- 
                                                                       ----------  ---------- 
Actuarial present value of accumulated benefit obligation, including                          
  vested benefits of $19,056 and $22,792, respectively................ $   19,813  $   23,449 
                                                                       ----------  ---------- 
                                                                       ----------  ---------- 

The weighted average discount rate and the rate of increase in future   
compensation levels used in determining the actuarial present value of the      
projected benefit obligation shown in the above foreign plan tables were at     
rates ranging from 6.5% to 8.0% and 6.0%, respectively for all periods presented
above. The expected return on plan assets was 9.0% for all periods presented.   

Assets of the foreign defined benefit plans consist principally of      
investments in equity securities, debt securities, and cash equivalents.        

The Company also has several defined contribution plans covering        
substantially all of its U.S. employees. Eligible employees may contribute a    
portion of their base compensation to the plan and their contributions are      
matched by the Company at rates specified in the plan documents. Contributions  
by the Company for the years ended September 30, 1995, September 28, 1996 and   
September 27, 1997 were approximately $1,532, $1,797, and $1,902, respectively. 

In addition to providing pension benefits, the Company provides certain 
health care and prescription drug benefits to certain retirees. Substantially   
all of the Company's eligible employees may qualify for benefits if they reach  
normal retirement age while working for the Company. The Company funds benefits 
on a pay-as-you-go basis, while retirees pay monthly premiums. These benefits   
are subject to deductibles, copayment provisions and other limitations.         

F-20

424B3
142nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 142nd
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

12. EMPLOYEE BENEFIT PLANS (CONTINUED)                                          
Net periodic postretirement benefit expense included the following      
components as of September 30, 1995, September 28, 1996 and September 27, 1997: 

                                                        [Enlarge/Download Table]

                                                                    1995       1996       1997   
                                                                  ---------  ---------  ---------
                                                                                                 
Service expense.................................................. $     149  $     797  $     833
Interest expense.................................................       597      1,423      1,464
Net amortization and deferral....................................       305        550        458
                                                                  ---------  ---------  ---------
Net periodic postretirement benefit cost......................... $   1,051  $   2,770  $   2,755
                                                                  ---------  ---------  ---------
                                                                  ---------  ---------  ---------

  The reconciliation of the accumulated postretirement benefit obligation to
the liability recognized in the combined balance sheet at September 30, 1996 and
1997 is as follows:                                                             

                                                        [Enlarge/Download Table]

                                                                           1996       1997    
                                                                         ---------  --------- 
                                                                                              
Accumulated postretirement benefit obligation:                                                
    Retirees............................................................ $   4,822  $   5,542 
    Fully eligible active participants..................................     3,796      5,214 
    Other active participants...........................................    11,243     14,503 
                                                                         ---------  --------- 
Total...................................................................    19,861     25,259 
Unrecognized prior service (cost) benefit...............................      (251)     3,407 
Unrecognized net loss...................................................    (2,720)    (9,807)
                                                                         ---------  --------- 
Net postretirement benefit liability recognized in the balance sheets... $  16,890  $  18,859 
                                                                         ---------  --------- 
                                                                         ---------  --------- 

    The discount rate used in determining the accumulated postretirement benefit
obligation was 7.5% for 1996 and 1997. The assumed health care cost trend rate  
used in measuring the accumulated postretirement benefit obligation was 9.5% and
9.0% for 1996 and 1997, respectively, with subsequent annual decrements of 0.5% 
to an ultimate trend rate of 5.5%. A one percentage point increase in the       
assumed health care cost trend rate for each year would increase the accumulated
postretirement benefit obligation by approximately 11.6% and the net            
postretirement benefit cost by approximately 13.2% as of September 27, 1997.    

13. STOCK COMPENSATION PLANS                                                    

  The Hanson PLC Long Term Incentive Plan, which became effective January 1,
1997 allocates Hanson PLC stock to eligible management employees based on       
continued employment and achievement of certain performance objectives. The     
Company has recorded a provision of $1,378 as an estimate of the value of the   
shares earned for the nine months ended September 27, 1997.                     

  In 1993, the Board of Directors of Hanson PLC approved a Stock Option Plan
("the Plan") which authorizes up to 65,530,000 shares of Hanson PLC stock for   
participants in the Plan, including certain employees of the Company, as well as
including employees of other Hanson PLC divisions and subsidiaries. The Plan    
provides for the granting of options to officers and other key employees at an  
exercise price not lower than the fair market value of the stock on the date of 
grant. Under the terms of the plan, the maximum term for the options granted is 
ten years with the options vesting ratably over a period of three               

F-21

424B3
143rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 143rd
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

13. STOCK COMPENSATION PLANS (CONTINUED)                                        
years. The Plan only permits the issuance of non-qualified options. The         
following table summarizes the activity related to the Company's participation  
in the Plan:                                                                    

                                                        [Enlarge/Download Table]

                                                                                         STOCK        WEIGHTED    
                                                                                        OPTIONS        AVERAGE    
                                                                                      OUTSTANDING  EXERCISE PRICE 
                                                                                      -----------  ---------------
                                                                                                                  
October 1, 1994......................................................................   1,064,090     $    6.07   
Granted..............................................................................     244,447          6.53   
Exercised............................................................................     (70,009)         5.55   
                                                                                      -----------         -----   
September 30, 1995...................................................................   1,238,528          6.20   
Granted..............................................................................     162,651          5.49   
Exercised............................................................................     (42,882)         4.13   
Forfeited............................................................................     (32,498)         6.31   
                                                                                      -----------         -----   
September 28, 1996...................................................................   1,325,799          6.11   
Exercised............................................................................     (24,945)         4.79   
Forfeited............................................................................     (83,843)         6.76   
                                                                                      -----------         -----   
September 27, 1997...................................................................   1,217,011     $    6.29   
                                                                                      -----------         -----   
                                                                                      -----------         -----   
Options exercisable at September 30, 1995............................................     566,159     $    5.25   
Options exercisable at September 28, 1996............................................     682,361          5.61   
Options exercisable at September 27, 1997............................................     847,545          6.29   

Exercise prices for options outstanding as of September 27, 1997, ranged
from $3.79 to $7.76. The following table sets forth certain information with    
respect to those stock options outstanding at September 27, 1997:               

                                                        [Enlarge/Download Table]

                                                                                                       WEIGHTED    
                                                                                                        AVERAGE    
                                                                                     WEIGHTED          REMAINING   
                                                                  STOCK OPTIONS  AVERAGE EXERCISE     CONTRACTUAL  
RANGE OF EXERCISE PRICES                                           OUTSTANDING         PRICE             LIFE      
----------------------------------------------------------------  -------------  -----------------  ---------------
                                                                                                                   
Under $4.82.....................................................       121,402       $    4.22          0.94 years 
$4.82 to $6.42..................................................       493,080            5.81          4.77 years 
Over $6.42......................................................       602,529            7.10          6.36 years 
                                                                  -------------          -----      ---------------
                                                                     1,217,011       $    6.29          5.17 years 
                                                                  -------------          -----      ---------------
                                                                  -------------          -----      ---------------

The following table sets forth certain information with respect to those
stock options exercisable at September 27, 1997:                                

                                                        [Enlarge/Download Table]

                                                                                                      WEIGHTED     
                                                                                   STOCK OPTIONS  AVERAGE EXERCISE 
RANGE OF EXERCISE PRICES                                                            EXERCISABLE         PRICE      
---------------------------------------------------------------------------------  -------------  -----------------
                                                                                                                   
Under $4.82......................................................................      121,402        $    4.22    
$4.82 to $6.42...................................................................      344,781             5.86    
Over $6.42.......................................................................      381,362             7.37    
                                                                                   -------------          -----    
                                                                                       847,545        $    6.29    
                                                                                   -------------          -----    
                                                                                   -------------          -----    

F-22

424B3
144th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 144th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

14. TRANSACTIONS WITH RELATED PARTIES                                           

    The common stock reflected in the combined statements of changes in invested
capital represent the legal capital of Grove Europe Ltd. The total number of    
authorized shares is 10,000, of which 5,307 are issued and outstanding for all  
periods presented. The total amount of invested capital relating to the common  
stock of Grove Europe Ltd. was $8,976 for all periods presented.                

The Company receives certain services provided by Hanson PLC and its    
affiliates that include cash management, tax reporting, and risk management and 
is charged a management fee for such services. The allocation of these          
management fees was based on percentage of total group sales in 1995 and 1996   
and on total group operating profits in 1997. In the opinion of management,     
these methods of allocation are reasonable.                                     

The amount of invested capital included in the combined balance sheet   
represents a net balance as the result of various transactions between the      
Company and its parent, Hanson PLC. There are no terms of settlement associated 
with the account balance. Generally, there are no interest charges associated   
with these balances. The balance is primarily the result of various equity      
transactions, as well as the Company's participation in the parent's central    
cash management program, wherein all the Company's cash receipts are remitted to
the parent and all cash disbursements are funded by the parent. Other           
transactions included in invested capital are management fees, taxes, insurance,
employee benefits, and miscellaneous other administrative expenses incurred by  
the parent on behalf of the Company.                                            

    Intercompany interest expense for the fiscal years ended September 30, 1995,
September 28, 1996 and September 27, 1997 was $2,553, $2,610, and $1,404,       
respectively. Substantially all of the interest expense related to borrowings by
one of the Company's subsidiaries from Hanson which are classified as invested  
capital in the combined balance sheet. Such borrowings averaged $25,052, $24,540
and 19,000 for the fiscal year ended September 30, 1995, September 28, 1995 and 
September 27, 1997, respectively.                                               

In 1996, the Company had an arrangement with a Hanson PLC affiliated    
company, whereby the affiliated company acted as a sales agent on behalf of the 
Company. The Company recorded commission expense in the amount of $3,209 for the
fiscal year ended September 28, 1996.                                           

15. BUSINESS SEGMENT AND GEOGRAPHIC AREAS                                       

The Company markets to heavy industrial and construction industries,    
primarily in the United States and Europe through the production and support of 
mobile hydraulic cranes, aerial work platforms and truck-mounted cranes. For    
financial reporting purposes, the Company considers the heavy industrial and    
construction industries as one segment. Transfers between geographic areas      
primarily represent intercompany export sales and are accounted for based on    
established sales prices between the related companies. In computing income from
operations, no allocations of general corporate expenses have been made.        
Identifiable assets are those assets identified with the operation of legal     
entities domiciled within the geographic area. General corporate assets were not
material at September 30, 1995, September 28, 1996 and September 27, 1997.      

F-23

424B3
145th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 145th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

15. BUSINESS SEGMENT AND GEOGRAPHIC AREAS (CONTINUED)                           
 Information relating to operations by geographic area is as follows as of
and for the fiscal years ended September 30, 1995, September 28, 1996 and       
September 27, 1997:                                                             

                                                        [Enlarge/Download Table]

                                                                                        CORPORATE               
                                                  UNITED                     OTHER         AND                  
                                                  STATES       EUROPE      COUNTRIES   ELIMINATIONS   COMBINED  
                                                -----------  -----------  -----------  ------------  -----------
                                                                                                                
1995                                                                                                            
Sales to unaffiliated customers................ $   397,095  $   106,720  $   --        $   --       $   503,815
Transfers between geographic areas.............      28,025       10,726      --           (38,751)      --     
                                                -----------  -----------  -----------  ------------  -----------
Net sales...................................... $   425,120  $   117,446  $   --        $  (38,751)  $   503,815
                                                -----------  -----------  -----------  ------------  -----------
                                                -----------  -----------  -----------  ------------  -----------
Operating profit............................... $    47,267  $    (4,457) $   --        $   (4,437)  $    38,373
Identifiable assets............................ $   528,998  $   177,971  $   --        $  (60,706)  $   646,263
1996                                                                                                            
Sales to unaffiliated customers................ $   562,331  $   231,878  $   --        $   --       $   794,209
Transfers between geographic areas............. $    37,685  $    83,330      --        $ (121,015)      --     
                                                -----------  -----------  -----------  ------------  -----------
Net sales...................................... $   600,016  $   315,208  $   --        $ (121,015)  $   794,209
                                                -----------  -----------  -----------  ------------  -----------
                                                -----------  -----------  -----------  ------------  -----------
Operating profit............................... $    58,653  $        72  $   --        $   (8,105)  $    50,620
Identifiable assets............................ $   530,605  $   230,849  $   --        $  (31,296)  $   730,158
1997                                                                                                            
Sales to unaffiliated customers................ $   606,003  $   248,532  $     2,277   $   --       $   856,812
Transfers between geographic areas.............      35,225       63,834      --           (99,059)      --     
                                                -----------  -----------  -----------  ------------  -----------
Net sales...................................... $   641,228  $   312,366  $     2,277   $  (99,059)  $   856,812
                                                -----------  -----------  -----------  ------------  -----------
                                                -----------  -----------  -----------  ------------  -----------
Operating profit............................... $    69,284  $       670  $      (100)  $   (1,963)  $    67,891
Identifiable assets............................ $   648,578  $   261,768  $     3,548   $  (32,398)  $   881,496

   Information with respect to Europe includes Africa and the Middle East. Net
sales to customers in Africa and the Middle East were less than 5.0% of the     
combined net sales of the Company during each of the years in the three year    
period ended September 27, 1997.                                                

 Net sales by the Company's U.S. operations to foreign customers were less
than 10.0% of the combined net sales of the Company during each of the years in 
the three year period ended September 27, 1997.                                 

16. LEASES                                                                      

The Company and its subsidiaries lease office space, machinery and other
equipment under noncancelable operating leases with varying terms, some of which
contain renewal and/or purchase options.                                        

F-24

424B3
146th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 146th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

16. LEASES (CONTINUED)                                                          
   The following is a schedule of future minimum lease payments required under
third party operating leases that have initial or remaining noncancelable lease 
terms in excess of one year:                                                    

                                                        [Enlarge/Download Table]

YEAR                                                                                          
-----------------------------------------------------------------------------------           
                                                                                              
1998...............................................................................  $   4,570
1999...............................................................................      2,701
2000...............................................................................      1,870
2001...............................................................................        640
2002...............................................................................        327
Thereafter.........................................................................      9,768
                                                                                     ---------
  Total............................................................................  $  19,876
                                                                                     ---------
                                                                                     ---------

   The major component of the future minimum lease payments due after the year
2002 relates to leases of the Company's manufacturing facility and land in      
Germany that expires in 2043.                                                   

Rental expense associated with third party operating leases was         
approximately $1,608, $2,809, and $3,489 for the fiscal years ended September   
30, 1995, September 28, 1996, and September 27, 1997, respectively. It is       
expected that, in the normal course of business, leases that expire will be     
renewed or replaced by leases on other property and equipment.                  

17. COMMITMENTS AND CONTINGENCIES                                               

  The Company is involved in various lawsuits arising in the ordinary course
of business. These lawsuits primarily involve claims for damages arising out of 
the use of the Company's products. The Company is also involved in litigation   
and administrative proceedings relating to employment matters and commercial    
disputes. Some of these lawsuits include claims for punitive as well as         
compensatory damages. The Company is insured for product liability and workers' 
compensation claims for amounts in excess of established deductibles and accrues
for the estimated liability up to the limits of the deductibles. The Company    
accrues for all other claims and lawsuits on a case-by-case basis. The Company's
policy is to accrue the probable legal costs to be incurred in defending the    
Company against the claims. The Company has followed this policy during each of 
the years in the three year period ended September 27, 1997 with respect to all 
investigations, claims and litigation.                                          

    The Company is also involved in lawsuits and administrative proceedings with
respect to claims involving the discharge of hazardous substances into the      
environment. Certain of these claims assert damages and liability for remedial  
investigations and cleanup costs with respect to sites at which the Company has 
been identified as a potentially responsible party under federal and state      
environmental laws and regulations (off-site). Other matters involve sites that 
the Company currently owns and operates or has previously sold (on-site). For   
off-site claims, the Company makes an assessment of the costs involved based on 
environmental studies, prior experience at similar sites, and the experience of 
other named parties. The Company also considers the ability of other parties to 
share costs, the percentage of the Company's exposure relative to all other     
parties, and the effects of inflation on these estimated costs. For on-site     
matters associated with properties currently owned, the Company makes an        
assessment as to whether an investigation and remediation effort is necessary   
and estimates other potential costs associated with the site. The Company's     
estimate of the costs associated with legal, product liability, and             
environmental                                                                   

F-25

424B3
147th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 147th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

17. COMMITMENTS AND CONTINGENCIES (CONTINUED)                                   
exposures is accrued if, in management's judgment, the likelihood of a loss is  
probable. These accrued liabilities are not discounted.                         

   Insurance recoveries for environmental and certain general liability claims
are not recognized until realized. In the opinion of management, while the      
ultimate results of lawsuits or other proceedings against the Company cannot be 
predicted with certainty, the amounts accrued for awards or assessments in      
connection with these matters are adequate and, accordingly, management believes
that the ultimate resolution of these matters will not have a material effect on
the Company.                                                                    

   As of September 27, 1997, the Company had no known probable but inestimable
exposures that could have a material effect on the Company.                     

The Company provides conditional loss guarantees to certain financing   
companies on behalf of their customers. As of September 28, 1996 and September  
27, 1997, the Company had outstanding guarantees of $2,438 and $1,297           
respectively. These guarantees mature at various dates ranging from October 1997
through August 2000. The Company has not and does not expect to incur losses as 
a result of these guarantees.                                                   

As noted under the Company's revenue recognition policy, the Company    
provides guarantees of residual value to third party financing companies in     
support of certain customers' financing arrangements. These guarantees are only 
exercisable should the Company's customer default on their financing agreements.
The Company has not and does not expect to incur losses under these guarantees. 
Exercises of these guarantees have not been significant for the years ended     
September 30, 1995, September 28, 1996 and September 27, 1997.                  

   As of September 27, 1997, the Company had approximately $595 in outstanding
letters of credit relating to the purchase of certain equipment.                

As collateral for performance and for import duties, the Company is     
contingently liable under bonds in the amount of $3,125 at September 27, 1997.  

18. SUBSEQUENT EVENTS                                                           

DEALER FINANCING PROGRAM                                                        

In the first quarter of fiscal year 1998, the Company entered into an   
agreement to finance certain of its notes receivable. The agreement enables the 
transfer to a financial institution of up to 90% of these receivables (up to a  
limit of $90,000), without recourse.                                            

PRODUCT LIABILITY AND WORKERS' COMPENSATION INSURANCE                           

Hanson, on behalf of the Company, purchased an insurance policy which   
effectively indemnifies the Company against North American product liability and
workers' compensation claims arising prior to October 1, 1997 up to an aggregate
loss limit of $85,000. Losses in excess of that amount, if any, are the         
responsibility of the Company. The Company is responsible for claims arising on 
or after October 1, 1997. For product liability claims arising on or after such 
date, the Company is self-insured for losses up to $2,000 per occurrence, with a
$15,000 annual aggregate loss limit. For workers' compensation claims arising on
or after such date, the Company is self-insured for losses up to $250 per       
occurrence with a $1,000 annual aggregate loss limit. Losses over the loss      
limits are covered by umbrella insurance coverage up to $100,000. The Company   
accrues a reserve for the estimated amount of claims which will be self-insured.
The estimates are provided by a third party actuary based upon historical       
trends. The reserve for claims includes estimates of legal and administrative   
costs to be incurred.                                                           

F-26

424B3
148th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 148th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

19. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL INFORMATION                       

 The Company's payment obligations under the Senior Subordinated Notes are
guaranteed by all of the Company's wholly-owned domestic subsidiaries other than
Grove Capital (the "Subsidiary Guarantors"). Such guarantees are full,          
unconditional and joint and several. Separate financial statements of the       
Subsidiary Guarantors are not presented because the Company's management has    
determined that they would not be material to investors. The ability of the     
Company's subsidiaries to make cash distributions and loans to the Company and  
the Subsidiaries Guarantors is not significantly restricted under the terms of  
the Company's debt obligations. The following supplemental financial information
sets forth, on a combined basis, balance sheets, statements of operations and   
statements of cash flows information for the Subsidiary Guarantors, the         
Company's non-guarantor subsidiaries and for the Company.                       

CONDENSED COMBINING BALANCE SHEETS AT SEPTEMBER 28, 1996                        

                                                        [Enlarge/Download Table]

                                                               GUARANTOR      OTHER                    COMBINED 
                                                              SUBSIDIARIES SUBSIDIARIES ELIMINATIONS    TOTALS  
                                                              -----------  -----------  ------------  ----------
                                                                                                                
ASSETS                                                                                                          
Current assets:                                                                                                 
    Cash and cash equivalents................................  $     470    $   7,714    $   --       $    8,184
    Trade receivables (net)..................................     65,200       55,844        --          121,044
    Inventories..............................................    112,258      113,181        (2,897)     222,542
    Other current assets.....................................      4,869        1,811        --            6,680
                                                              -----------  -----------  ------------  ----------
    Total current assets.....................................    182,797      178,550        (2,897)     358,450
Property, plant, and equipment (net).........................     56,852       44,324        --          101,176
Goodwill.....................................................    257,060        7,784        --          264,844
Due from Grove Companies.....................................     28,399       --           (28,399)      --    
Other non-current assets.....................................      5,497          191        --            5,688
                                                              -----------  -----------  ------------  ----------
    Total assets.............................................  $ 530,605    $ 230,849    $  (31,296)  $  730,158
                                                              -----------  -----------  ------------  ----------
                                                              -----------  -----------  ------------  ----------
LIABILITIES AND INVESTED CAPITAL                                                                                
Current liabilities:                                                                                            
  Trade accounts payable.....................................  $  41,194    $  29,585    $            $   70,779
  Short-term borrowings......................................      7,443       --            --            7,443
  Deferred tax liability.....................................      4,828       --            --            4,828
Other payables and accrued liabilities.......................     42,331       47,875        --           90,206
                                                              -----------  -----------  ------------  ----------
    Total current liabilities................................     95,796       77,460        --          173,256
  Deferred tax liability.....................................      4,047       --            --            4,047
Non-current liabilities:                                                                                        
    Due to Grove Companies...................................     --           28,399       (28,399)      --    
    Deferred revenue.........................................     --           21,154        --           21,154
Other non-current liabilities................................     18,556       10,591        --           29,147
                                                              -----------  -----------  ------------  ----------
    Total liabilities........................................    118,399      137,604       (28,399)     227,604
Total invested capital.......................................    412,206       93,245        (2,897)     502,554
                                                              -----------  -----------  ------------  ----------
    Total liabilities and invested capital...................  $ 530,605    $ 230,849    $  (31,296)  $  730,158
                                                              -----------  -----------  ------------  ----------
                                                              -----------  -----------  ------------  ----------

F-27

424B3
149th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 149th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

19. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL INFORMATION (CONTINUED)           
CONDENSED COMBINING BALANCE SHEETS AT SEPTEMBER 27, 1997                        

                                                        [Enlarge/Download Table]

                                                               GUARANTOR      OTHER                    COMBINED 
                                                              SUBSIDIARIES SUBSIDIARIES ELIMINATIONS    TOTALS  
                                                              -----------  -----------  ------------  ----------
                                                                                                                
ASSETS                                                                                                          
Current assets:                                                                                                 
  Cash and cash equivalents..................................  $    (492)   $   5,516    $   --       $    5,024
  Trade receivables (net)....................................     65,823       83,341        --          149,164
  Notes receivable...........................................     68,450       --            --           68,450
  Inventories................................................    123,621       94,395        (2,684)     215,332
  Other current assets.......................................      3,923        3,710        --            7,633
  Deferred tax assets........................................     14,936       --            --           14,936
                                                              -----------  -----------  ------------  ----------
    Total current assets.....................................    276,261      186,962        (2,684)     460,539
Property, plant, and equipment (net).........................     75,884       71,704        --          147,588
Goodwill.....................................................    248,620        6,108        --          254,728
Deferred tax assets..........................................     11,415       --            --           11,415
Due from Grove Companies.....................................     29,272          442       (29,714)      --    
Other non-current assets.....................................      7,126          100        --            7,226
                                                              -----------  -----------  ------------  ----------
    Total assets.............................................  $ 648,578    $ 265,316    $  (32,398)  $  881,496
                                                              -----------  -----------  ------------  ----------
                                                              -----------  -----------  ------------  ----------
LIABILITIES AND INVESTED CAPITAL                                                                                
Current liabilities:                                                                                            
  Trade accounts payable.....................................  $  45,072    $  25,255    $   --       $   70,327
  Short-term borrowings......................................     --            7,265        --            7,265
  Income taxes payable.......................................      4,622       --            --            4,622
  Other payables and accrued liabilities.....................     46,423       39,689        --           86,112
                                                              -----------  -----------  ------------  ----------
    Total current liabilities................................     96,117       72,209        --          168,326
Non-current liabilities:                                                                                        
  Due to Grove Companies.....................................        442       29,272       (29,714)      --    
  Deferred revenue...........................................     --           46,509        --           46,509
Other non-current liabilities................................     27,781       10,388        --           38,169
                                                              -----------  -----------  ------------  ----------
  Total liabilities..........................................    124,340      158,378       (29,714)     253,004
Total invested capital.......................................    524,238      106,938        (2,684)     628,492
                                                              -----------  -----------  ------------  ----------
  Total liabilities and invested capital.....................  $ 648,578    $ 265,316    $  (32,398)  $  881,496
                                                              -----------  -----------  ------------  ----------
                                                              -----------  -----------  ------------  ----------

F-28

424B3
150th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 150th
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

19. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL INFORMATION (CONTINUED)           
CONDENSED COMBINING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30,   
1995                                                                            

                                                        [Enlarge/Download Table]

                                                               GUARANTOR      OTHER                    COMBINED  
                                                              SUBSIDIARIES SUBSIDIARIES ELIMINATIONS    TOTALS   
                                                              -----------  -----------  ------------  ---------- 
                                                                                                                 
Net sales....................................................  $ 425,120    $ 117,446    $  (38,751)  $  503,815 
Cost of goods sold...........................................    315,864       99,066       (37,704)     377,226 
                                                              -----------  -----------  ------------  ---------- 
    Gross profit.............................................    109,256       18,380        (1,047)     126,589 
Selling, engineering, general, and administrative expenses...     61,989       22,837        --           84,826 
Management fees..............................................      3,390       --            --            3,390 
                                                              -----------  -----------  ------------  ---------- 
    Operating profit.........................................     43,877       (4,457)       (1,047)      38,373 
Net interest (expense)/income................................     (2,572)         260        --           (2,312)
Other expense, net...........................................       (279)      --            --             (279)
                                                              -----------  -----------  ------------  ---------- 
    Income before income taxes...............................     41,026       (4,197)       (1,047)      35,782 
Income taxes.................................................     19,162         (149)       --           19,013 
                                                              -----------  -----------  ------------  ---------- 
    Net income...............................................  $  21,864    $  (4,048)   $   (1,047)  $   16,769 
                                                              -----------  -----------  ------------  ---------- 
                                                              -----------  -----------  ------------  ---------- 

CONDENSED COMBINING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 28,   
1996                                                                            

                                                        [Enlarge/Download Table]

                                                               GUARANTOR      OTHER                    COMBINED  
                                                              SUBSIDIARIES SUBSIDIARIES ELIMINATIONS    TOTALS   
                                                              -----------  -----------  ------------  ---------- 
                                                                                                                 
Net sales....................................................  $ 600,016    $ 315,208    $ (121,015)  $  794,209 
Cost of goods sold...........................................    458,629      269,066      (118,565)     609,130 
                                                              -----------  -----------  ------------  ---------- 
    Gross profit.............................................    141,387       46,142        (2,450)     185,079 
Selling, engineering, general, and administrative expenses...     82,734       46,070        --          128,804 
Management fees..............................................      5,655       --            --            5,655 
                                                              -----------  -----------  ------------  ---------- 
Operating profit.............................................     52,998           72        (2,450)      50,620 
Net interest (expense)/income................................     (2,820)          29        --           (2,791)
Other expense, net...........................................       (193)      --            --             (193)
                                                              -----------  -----------  ------------  ---------- 
    Income before income taxes...............................     49,985          101        (2,450)      47,636 
Income taxes.................................................     21,749          439        --           22,188 
                                                              -----------  -----------  ------------  ---------- 
    Net income...............................................  $  28,236    $    (338)   $   (2,450)  $   25,448 
                                                              -----------  -----------  ------------  ---------- 
                                                              -----------  -----------  ------------  ---------- 

F-29

424B3
151st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 151st
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

19. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL INFORMATION (CONTINUED)           
CONDENSED COMBINING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 27,   
1997                                                                            

                                                        [Enlarge/Download Table]

                                                               GUARANTOR      OTHER                    COMBINED 
                                                              SUBSIDIARIES SUBSIDIARIES ELIMINATIONS    TOTALS  
                                                              -----------  -----------  ------------  ----------
                                                                                                                
Net sales....................................................  $ 641,228    $ 314,643    $  (99,059)  $  856,812
Cost of goods sold...........................................    486,381      266,430       (99,272)     653,539
                                                              -----------  -----------  ------------  ----------
    Gross profit.............................................    154,847       48,213           213      203,273
Selling, engineering, general, and administrative expenses...     85,563       45,683        --          131,246
Management fees..............................................      2,176       --            --            2,176
Restructuring charges........................................     --            1,960        --            1,960
                                                              -----------  -----------  ------------  ----------
    Operating profit.........................................     67,108          570           213       67,891
Net interest (expense)/income................................        275         (232)       --               43
Other income, net............................................        535       --            --              535
                                                              -----------  -----------  ------------  ----------
    Income before income taxes...............................     67,918          338           213       68,469
Income taxes.................................................     25,948          301        --           26,249
                                                              -----------  -----------  ------------  ----------
    Net income...............................................  $  41,970    $      37    $      213   $   42,220
                                                              -----------  -----------  ------------  ----------
                                                              -----------  -----------  ------------  ----------

CONDENSED COMBINING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30,   
1995                                                                            

                                                        [Enlarge/Download Table]

                                                                           GUARANTOR      OTHER                 
                                                                          SUBSIDIARIES SUBSIDIARIES ELIMINATIONS
                                                                          -----------  -----------  ------------
                                                                                                                
OPERATING ACTIVITIES                                                                                            
Net cash provided by operating activities................................  $   5,025    $   1,928    $    6,953 
                                                                          -----------  -----------  ------------
INVESTING ACTIVITIES                                                                                            
Capital expenditures.....................................................     (7,701)         316        (7,385)
Investment in equipment held for rent....................................     --             (552)         (552)
Proceeds from sales of property, plant, and equipment....................      1,733       --             1,733 
Acquisition of businesses................................................     --          (40,370)      (40,370)
                                                                          -----------  -----------  ------------
Net cash used in investing activities....................................     (5,968)     (40,606)      (46,574)
                                                                          -----------  -----------  ------------
FINANCING ACTIVITIES                                                                                            
Net proceeds from short-term borrowings..................................       (127)      --              (127)
Net amounts received from parent.........................................     12,017       49,808        61,825 
Cash dividends paid to parent............................................    (11,097)      --           (11,097)
                                                                          -----------  -----------  ------------
Net cash provided by financing activities................................        793       49,808        50,601 
                                                                          -----------  -----------  ------------
Effect of exchange rate changes on cash..................................     --              570           570 
                                                                          -----------  -----------  ------------
Net (decrease) increase in cash and cash equivalents.....................       (150)      11,700        11,550 
Cash and cash equivalents at beginning of year...........................        663        6,472         7,135 
                                                                          -----------  -----------  ------------
Cash and cash equivalents and end of year................................  $     513    $  18,172    $   18,685 
                                                                          -----------  -----------  ------------
                                                                          -----------  -----------  ------------

F-30

424B3
152nd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 152nd
THE GROVE COMPANIES 

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

(IN THOUSANDS)

19. SUPPLEMENTAL CONDENSED COMBINED FINANCIAL INFORMATION (CONTINUED)           
CONDENSED COMBINING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 28,   
1996                                                                            

                                                        [Enlarge/Download Table]

                                                                           GUARANTOR      OTHER                 
                                                                          SUBSIDIARIES SUBSIDIARIES ELIMINATIONS
                                                                          -----------  -----------  ------------
                                                                                                                
OPERATING ACTIVITIES                                                                                            
Net cash (used in) provided by operating activities......................  $  35,276    $ (25,450)   $    9,826 
                                                                          -----------  -----------  ------------
INVESTING ACTIVITIES                                                                                            
Capital expenditures.....................................................    (16,522)      (2,921)      (19,443)
Investment in equipment held for rent....................................     --          (22,527)      (22,527)
Proceeds from sales of property, plant, and equipment....................        432       --               432 
Acquisition of businesses................................................     --           (3,703)       (3,703)
                                                                          -----------  -----------  ------------
Net cash used in investing activities....................................    (16,090)     (29,151)      (45,241)
                                                                          -----------  -----------  ------------
FINANCING ACTIVITIES                                                                                            
Net proceeds from short-term borrowings..................................      7,443       --             7,443 
Net amounts received from parent.........................................      3,385       44,981        48,366 
Cash dividends paid to parent............................................    (30,057)      --           (30,057)
                                                                          -----------  -----------  ------------
Net cash (used in) provided by financing activities......................    (19,229)      44,981        25,752 
                                                                          -----------  -----------  ------------
Effect of exchange rate changes on cash..................................     --             (838)         (838)
Net decrease in cash and cash equivalents................................        (43)     (10,458)      (10,501)
Cash and cash equivalents at beginning of year...........................        513       18,172        18,685 
                                                                          -----------  -----------  ------------
Cash and cash equivalents and end of year................................  $     470    $   7,714    $    8,184 
                                                                          -----------  -----------  ------------
                                                                          -----------  -----------  ------------

CONDENSED COMBINING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 27,   
1997                                                                            

                                                        [Enlarge/Download Table]

                                                                           GUARANTOR      OTHER                 
                                                                          SUBSIDIARIES SUBSIDIARIES ELIMINATIONS
                                                                          -----------  -----------  ------------
                                                                                                                
OPERATING ACTIVITIES                                                                                            
Net cash (used in) provided by operating activities......................  $  (5,448)   $  17,443    $   11,995 
                                                                          -----------  -----------  ------------
INVESTING ACTIVITIES                                                                                            
Capital expenditures.....................................................    (25,521)      (6,970)      (32,491)
Investment in equipment held for rent....................................     --          (37,904)      (37,904)
Proceeds from sales of property, plant, and equipment....................      1,587           16         1,603 
                                                                          -----------  -----------  ------------
Net cash used in investing activities....................................    (23,934)     (44,858)      (68,792)
                                                                          -----------  -----------  ------------
FINANCING ACTIVITIES                                                                                            
Net proceeds from short-term borrowings..................................     (7,443)       7,647           204 
Net amounts received from parent.........................................     35,863       18,282        54,145 
                                                                          -----------  -----------  ------------
Net cash provided by financing activities................................     28,420       25,929        54,349 
Effect of exchange rate changes on cash..................................     --             (712)         (712)
                                                                          -----------  -----------  ------------
Net decrease in cash and cash equivalents................................       (962)      (2,198)       (3,160)
Cash and cash equivalents at beginning of year...........................        470        7,714         8,184 
                                                                          -----------  -----------  ------------
Cash and cash equivalents and end of year................................  $    (492)   $   5,516    $    5,024 
                                                                          -----------  -----------  ------------
                                                                          -----------  -----------  ------------

F-31

424B3
153rd Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 153rd
GROVE HOLDINGS LLC
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 27, 1998 
(UNAUDITED) 
(IN THOUSANDS)

                                                        [Enlarge/Download Table]
                                                                                          
ASSETS                                                                                    
Current assets:                                                                           
  Cash and cash equivalents...................................................  $  11,424 
  Trade receivables (net).....................................................    134,540 
  Notes receivable............................................................     21,471 
  Inventories.................................................................    240,292 
  Due from Hanson PLC.........................................................     16,700 
  Other current assets........................................................     22,687 
                                                                               -----------
      Total current assets....................................................    447,114 

Property, plant, and equipment (net)..........................................    195,921 
Goodwill......................................................................    285,016 
Other non-current assets......................................................     23,365 
                                                                               -----------
      Total assets............................................................  $ 951,416 
                                                                               -----------
                                                                               -----------
LIABILITIES AND HOLDER'S EQUITY                                                           
Current Liabilities:                                                                      
  Trade accounts payable......................................................  $  86,999 
  Current maturities of long-term debt........................................     27,200 
  Short-term borrowings.......................................................     13,600 
  Other payables and accrued liabilities......................................    124,885 
                                                                               -----------
      Total current liabilities...............................................    252,684 
Non-current liabilities:                                                                  
  Long-term debt, less curent maturities......................................    473,953 
  Deferred revenue............................................................     61,545 
  Other non-current liabilities...............................................     55,705 
                                                                               -----------
      Total liabilities.......................................................    843,887 
                                                                               -----------
Holder's equity:                                                                          
  Holder's equity.............................................................    119,992 
  Accumulated deficit.........................................................    (10,420)
  Cumualtive translation adjustment...........................................     (2,043)
                                                                               -----------
      Total holder's equity...................................................    107,529 
                                                                               -----------
                                                                                $ 951,416 
                                                                               -----------
                                                                               -----------

See notes to unaudited condensed financial statements.

F-32

424B3
154th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 154th
GROVE HOLDINGS LLC

CONDENSED COMBINED STATEMENTS OF OPERATIONS 

FOR THE NINE MONTHS ENDED JUNE 28, 1997 AND SEVEN MONTHS ENDED APRIL 28, 1998 
AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR

THE TWO MONTHS ENDED JUNE 27, 1998

(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                              PREDECESSOR           COMPANY  
                                                        ------------------------  -----------
                                                           NINE         SEVEN         TWO    
                                                          MONTHS       MONTHS       MONTHS   
                                                           ENDED        ENDED        ENDED   
                                                         JUNE 28,     APRIL 28,    JUNE 27,  
                                                           1997         1998         1998    
                                                        -----------  -----------  -----------
                                                                                             
Net sales..............................................  $ 633,845    $ 476,199    $ 154,780 
Cost of goods sold.....................................    487,759      375,732      121,144 
Write-off of amount assigned to inventory in excess of                                       
  historical costs resulting from purchase accounting                                        
  adjustments..........................................     --           --           10,000 
                                                        -----------  -----------  -----------
  Gross profit.........................................    146,086      100,467       23,636 
Selling, engineering, general, and administrative                                            
  expenses.............................................     93,774       73,197       23,162 
Amortization of goodwill...............................      6,801        5,215        1,164 
                                                        -----------  -----------  -----------
  Operating profit (loss)..............................     45,511       22,055         (690)
Net interest (expense)/income..........................       (938)       1,047       (7,985)
Other (expense) income, net............................        495       (6,993)           6 
                                                        -----------  -----------  -----------
  Income (loss) before income taxes....................     45,068       16,109       (8,669)
Income taxes...........................................     17,748       11,673        1,751 
                                                        -----------  -----------  -----------
  Net income (loss)....................................  $  27,320    $   4,436    $ (10,420)
                                                        -----------  -----------  -----------
                                                        -----------  -----------  -----------

See notes to unaudited condensed financial statements.

F-33

424B3
155th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 155th
GROVE HOLDINGS LLC

CONDENSED COMBINED STATEMENTS OF CASH FLOWS 

FOR THE NINE MONTHS ENDED JUNE 28, 1997 AND THE SEVEN MONTHS ENDED APRIL 28,
1998

AND CONDENSED CONSOLIDATED CASH FLOWS FOR 
THE TWO MONTHS ENDED JUNE 27, 1998

(UNAUDITED) 

                                                        [Enlarge/Download Table]

                                                                      PREDECESSOR               COMPANY   
                                                             ------------------------------  -------------
                                                                 NINE            SEVEN            TWO     
                                                             MONTHS ENDED     MONTHS ENDED   MONTHS ENDED 
                                                             JUNE 28, 1997   APRIL 28, 1998  JUNE 27, 1998
                                                             -------------   --------------  -------------
                                                                                                          
OPERATING ACTIVITIES                                                                                      
  Net income................................................   $ 27,320         $  4,436       $ (10,420) 
  Adjustments to reconcile net income to net cash provided                                                
    by operating activities:                                                                              
    Depreciation and amortization...........................     13,560           10,934           2,749  
    Depreciation of equipment held for rent.................      4,384            5,501           2,529  
    Accretion of subordinated discount debentures...........     --              --                  968  
    Amortization of deferred financing costs................     --              --                  332  
    Write-off of amount assigned to inventory in excess of                                                
      historical costs resulting from purchase accounting                                                 
      adjustments...........................................     --              --               10,000  
    Loss (gain) on sale of fixed assets.....................        (42)           4,714         --       
    Deferred tax expense....................................      1,268            2,358              11  
    Changes in operating assets and liabilities:                                                          
      Trade receivables (net)...............................    (11,935)          32,096         (15,992) 
      Notes receivable......................................    (46,889)          28,409         (21,471) 
      Inventories...........................................    (10,126)         (10,157)          1,183  
      Trade accounts payable................................      7,960            7,542           8,500  
      Other assets and liabilities, net.....................     (7,503)          10,361           1,096  
                                                             -------------   --------------  -------------
Net cash provided by (used in) operating activities.........    (22,003)          96,464         (20,515) 
                                                             -------------   --------------  -------------
INVESTING ACTIVITIES                                                                                      
  Capital expenditures......................................    (26,282)         (20,254)         (3,047) 
  Investment in equipment held for rent.....................    (12,907)         (16,380)         (8,335) 
  Acquisition of business from Hanson PLC, including                                                      
    transaction costs of $6,485, net of cash acquired of                                                  
    $9,242 and post-closing adjustment of $16,700...........     --              --             (563,543) 
  Other investing activities................................        350            3,630         --       
                                                             -------------   --------------  -------------
  Net cash used in investing activities.....................    (38,839)         (33,004)       (574,925) 
                                                             -------------   --------------  -------------
FINANCING ACTIVITIES                                                                                      
  Net proceeds from short-term borrowings...................       (363)           2,628               4  
  Proceeds from issuance of long-term debt..................     --              --              500,185  
  Equity investment from Grove Investors LLC................     --              --              119,992  
  Deferred financing costs..................................     --              --              (14,442) 
  Other financing activities................................     59,214          (62,087)          1,213  
                                                             -------------   --------------  -------------
  Net cash provided by (used in) financing activities.......     58,851          (59,459)        606,952  
                                                             -------------   --------------  -------------
  Effect of exchange rate changes on cash...................       (464)             217             (88) 
                                                             -------------   --------------  -------------
  Net increase (decrease) in cash and cash equivalents......     (2,455)           4,218          11,424  
    Cash and cash equivalents at beginning of period........      8,184            5,024         --       
                                                             -------------   --------------  -------------
Cash and cash equivalents at end of period..................   $  5,729         $  9,242       $  11,424  
                                                             -------------   --------------  -------------
                                                             -------------   --------------  -------------

See notes to unaudited condensed financial statements.

F-34

424B3
156th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 156th
GROVE HOLDINGS LLC

NOTES TO CONDENSED FINANCIAL STATEMENTS 

JUNE 27, 1998 

(UNAUDITED) 
(IN THOUSANDS, UNLESS OTHERWISE NOTED)

1. THE ACQUISITION                                                              

    On April 29, 1998, Grove Holdings LLC ("Holdings"), through its wholly owned
subsidiary Grove Worldwide LLC ("Grove" and, together with Holdings, the        
"Company") acquired (the "Acquisition") from Hanson PLC ("Hanson") and certain  
of its subsidiaries, substantially all of the assets of Hanson's U.S. mobile    
hydraulic crane and aerial work platform operations, the capital stock of       
Hanson's U.S. truck-mounted crane operation and the capital stock of Hanson's   
British, French, German, and Australian crane and aerial work platform          
subsidiaries for an aggregate purchase price of $583 million. The purchase price
was subject to a post closing adjustment for which the Company received $16.7   
million from Hanson in July 1998. The Company is a wholly owned subsidiary of   
Grove Investors LLC ("Investors"). Funds required by the Company to consummate  
the Acquisition, including the payment of related fees and expenses were as     
follows:                                                                        

                                                        [Enlarge/Download Table]
                                                                                            
Sources:                                                                                    
  Issuance of the Senior Subordinated Notes....................................... $ 225,000
  Borrowings under Revolving Credit Facility......................................     9,500
  Borrowings under Term Loan Facility.............................................   200,000
  Issuance of Senior Discount Debentures..........................................    49,985
  Equity investment by Holdings...................................................   120,000
                                                                                   ---------
                                                                                   $ 604,485
                                                                                   ---------
                                                                                   ---------

Uses:                                                                                       
  Acquisition price............................................................... $ 583,000
  Transaction costs...............................................................     6,485
                                                                                   ---------
    Aggregate purchase price......................................................   589,485
  Debt financing costs............................................................    15,000
                                                                                   ---------
                                                                                   $ 604,485
                                                                                   ---------
                                                                                   ---------

  The Acquisition was accounted for using the purchase method. The estimated
total purchase price of $583 million and related acquisition fees and expenses  
of approximately $6.5 million have been allocated to the assets and liabilities 
of the Company based upon an estimate of their respective fair values, with the 
remainder being allocated to goodwill. Such allocation is based on studies which
have not yet been completed. Accordingly, the allocation reflected in the       
unaudited consolidated financial statements is preliminary and subject to       
revision. The Company intends to amortize goodwill over a 40 year period based  
on the strong brand name of the Company and the longevity of the business and   
the industry in which it                                                        

F-35

424B3
157th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 157th
GROVE HOLDINGS LLC

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED) 

JUNE 27, 1998 

(UNAUDITED) 
(IN THOUSANDS, UNLESS OTHERWISE NOTED)

1. THE ACQUISITION (CONTINUED)                                                  
operates. The estimated fair values of the assets acquired and liabilities      
assumed in the Acquisition are summarized as follows:                           

                                                        [Enlarge/Download Table]

Cash and cash equivalents........................................................ $   9,241 
                                                                                            
Due from Hanson for post-closing adjustment......................................    16,700 
Trade receivables................................................................   122,616 
Notes receivable.................................................................     2,280 
Inventories......................................................................   251,316 
Other current assets.............................................................    10,602 
Property, plant and equipment....................................................   185,855 
Goodwill.........................................................................   286,180 
Other non-current assets.........................................................       720 
Short-term borrowings............................................................   (14,086)
Trade accounts payable...........................................................   (79,493)
Accrued expenses and other current liabilities...................................   (77,187)
Accrual for closure of Sunderland U.K. manufacturing facility....................   (17,000)
Other non-current liabilities....................................................  (108,259)
                                                                                  --------- 
    Aggregate purchase price..................................................... $ 589,485 
                                                                                  --------- 
                                                                                  --------- 

2. BASIS OF PRESENTATION                                                        

The accompanying unaudited consolidated financial statements have been  
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, these financial statements do not include   
all the information and notes required by generally accepted accounting         
principles for complete financial statements. In the opinion of management, the 
unaudited consolidated financial statements include all adjustments (consisting 
of normal recurring accruals) considered necessary for a fair presentation of   
the financial position and results of operations.                               

Information prior to April 29, 1998 relates to the Company prior to the 
Acquisition (the "Predecessor"). Information subsequent to April 29, 1998       
relates to the Company following the Acquisition. Following the Acquisition, the
Company has a new basis of accounting and a different capital structure, and,   
accordingly, the results for the Predecessor and for the Company are not        
directly comparable.                                                            

Interim results for the two month period ended June 27, 1998 are not    
necessarily indicative of the results that may be expected for a full fiscal    
year. For further information, refer to the combined financial statements and   
notes for the year ended September 27, 1997.                                    

3. ADOPTION OF NEW ACCOUNTING STANDARDS                                         

In 1998, the Financial Accounting Standards Board issued Statement 133, 
"Accounting for Derivative Instruments and Hedging Activities." This Statement  
establishes accounting and reporting standards for derivative instruments and   
for hedging activities. It requires that an entity recognize all derivatives as 
either assets or liabilities measured at fair value. Management has not yet     
evaluated this Statement's                                                      

F-36

424B3
158th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 158th
GROVE HOLDINGS LLC

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED) 

JUNE 27, 1998 

(UNAUDITED) 
(IN THOUSANDS, UNLESS OTHERWISE NOTED)

3. ADOPTION OF NEW ACCOUNTING STANDARDS (CONTINUED)                             
impact on the Company's operations. Adoption of this statement will be required 
for the fiscal year beginning October 1999.                                     

4. SALE OF NOTES RECEIVABLE                                                     

Prior to the Acquisition, the predecessor of the Company entered into an
agreement to sell certain notes receivable to a third-party financial           
institution on a 90% non-recourse basis. In addition, substantially all notes   
receivable outstanding at the date of the Acquisition that had not been sold to 
the third party financial institution were retained by Hanson. Following the    
Acquisition, the Company is responsible for administrative and collection       
activities with respect to such receivables but Hanson is responsible for all   
credit risk. The cost of providing administrative support is immaterial.        

Following the Acquisition, the Company entered into an agreement with a 
third-party financial institution to sell up to $50 million of notes receivable 
generated from sales of mobile hydraulic cranes and aerial work platforms on    
credit terms of up to 360 days on a revolving basis. The third-party financial  
institution purchases the notes receivable at face value on a 90% non-recourse  
basis. The agreement requires the Company to purchase credit insurance on behalf
of the third-party financial institution to insure the 90% risk assumed by the  
third-party. The Company retains 10% of the credit risk.                        

    The Company is responsible for administrative and collection activities. The
cost of administrative and collection activities is immaterial. Cash collections
on the notes are deposited directly into an account for the benefit of the      
third-party financial institution. The third-party financial institution has the
power to sell or pledge the notes receivable purchased at any time and the      
Company has no rights to repurchase the notes receivable                        

Notes receivable sold by the Company under this arrangement meet the    
criteria for sale under SFAS No. 125 and, accordingly, will be removed from the 
Company's balance sheet upon sale.                                              

5. INVENTORY                                                                    

The components of inventory at June 27, 1998 consisted of the following:

                                                        [Enlarge/Download Table]
                                                                                                                 
Raw materials and supplies............................................................................ $   61,544
Work in process.......................................................................................     81,291
Finished goods (including a purchase accounting adjustment of $15,000 in 1998)........................     97,457
                                                                                                       ----------
                                                                                                       $  240,292
                                                                                                       ----------
                                                                                                       ----------

Inventories are valued at the lower of cost or market, as determined    
primarily under the first-in, first-out method.                                 

    In connection with the Acquisition, the Company has allocated $25,000 of the
purchase price to the inventories acquired in excess of their historical costs. 
Such amount is being charged to operations as inventory turns over the five     
months following the Acquisition. As of June 27, 1998, $10,000 has been charged 
to operations and the balance has been included in determination of inventory   
carrying value.                                                                 

F-37

424B3
159th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 159th
GROVE HOLDINGS LLC

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED) 

JUNE 27, 1998 

(UNAUDITED) 
(IN THOUSANDS, UNLESS OTHERWISE NOTED)

6. INCOME TAXES                                                                 

  Following the Acquisition, a significant portion of the Company's business
is operated as a United States limited liability company, whereby the limited   
liability company is not itself subject to income tax. The taxable income of the
limited liability company in the United States will be allocated to the equity  
holders of Investors and such equity holders will be responsible for income     
taxes on such taxable income. The Company expects to make distributions in the  
form of dividends to equity holders of Investors to enable them to meet their   
tax obligations with respect to income allocated to them by the Company. Foreign
and domestic taxes payable on taxable income generated by the Company's foreign 
subsidiaries and its truck-mounted crane business will continue to be the       
responsibility of the Company.                                                  

The difference between the Company's reported tax provision for the two 
months ended June 27, 1998 and the tax provision computed based on U.S.         
statutory rates is primarily attributed to the Company's structure as a limited 
liability company and losses generated in foreign operations for which a tax    
benefit will not be recognized until realization is deemed to be more likely    
than not.                                                                       

7. LONG-TERM DEBT                                                               

  BANK CREDIT FACILITY.  The Bank Credit Facility, which was entered into on
April 29, 1998, consists of a $200,000 term loan facility ("Term Loan Facility")
and a $125,000 revolving credit facility ("Revolving Credit Facility"). To      
consummate the Acquisition, the Company borrowed $200,000 under the Term Loan   
Facility and approximately $9,500 under the Revolving Credit Facility. The      
Revolving Credit Facility will enable the Company to obtain revolving credit    
loans and to issue letters of credit for working capital, acquisitions and      
general corporate purposes. A portion of the Revolving Credit Facility is       
available for borrowings by the Company in the Eurocurrency markets of British  
pounds sterling, German marks, French francs and certain other currencies.      

At the Company's option, loans under the Bank Credit Facility will bear 
interest (a) in the case of loans in U.S. dollars, at the highest of (x) 1/2 of 
1% in excess of the Federal Funds Effective Rate (as defined in the Bank Credit 
Facility) (y) 1.0% in excess of a certificate of deposit rate and (z) the bank's
prime rate, plus the applicable margin (as defined in the Bank Credit Facility),
or (b) in the case of all loans, the relevant Eurocurrency Rate (as defined in  
the Bank Credit Facility) as determined by the Agent, plus the applicable       
margin.                                                                         

  The applicable margin will vary based upon the Company's operating results
and will range between 1.25% and 2.25% for borrowings under the Revolving Credit
Facility and between 2.0% and 2.5% for borrowings under the Term Loan Facility. 
The Company will also pay certain fees with respect to the unused portion of the
Bank Credit Facility. The Term Loan Facility has a term of eight years and must 
be repaid in semi-annual installments in April and October of each year in an   
aggregate amount of (i) $2,000 for the first six years, (ii) $88,000 during the 
seventh year and (iii) $100,000 during the eighth year. The Revolving Credit    
Facility has a term of seven years. At June 27, 1998, the Company had           
outstanding borrowings of $25,200 and available borrowing of $99,788 under the  
Revolving Credit Facility.                                                      

    The obligations of the Company under the Bank Credit Facility are guaranteed
by Holdings and each of the Company's domestic subsidiaries (the "Guarantors"). 
The obligations of the Company under the                                        

F-38

424B3
160th Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 160th
GROVE HOLDINGS LLC

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED) 

JUNE 27, 1998 

(UNAUDITED) 
(IN THOUSANDS, UNLESS OTHERWISE NOTED)

7. LONG-TERM DEBT (CONTINUED)                                                   
Bank Credit Facility are secured by a first priority lien (subject to permitted 
encumbrances) on substantially all of the Company's and each Guarantor's real,  
personal, and intellectual property and on the capital stock of the Company, all
of the capital stock of the Company's domestic subsidiaries, and 65% of the     
capital stock of the Company's first-tier foreign subsidiaries.                 

In addition, the Bank Credit Facility contains various covenants that   
restrict the Company from taking various actions and that require the Company to
achieve and maintain certain financial ratios.                                  

    SENIOR SUBORDINATED NOTES.  The Senior Subordinated Notes bear interest at a
rate of 9 1/4% per annum payable semi-annually on May 1 and November 1 of each  
year commencing November 1, 1998. The Senior Subordinated Notes are general     
unsecured obligations of the Company and its co-issuer, Grove Capital, Inc., and
are guaranteed by all of the Company's domestic subsidiaries, other than Grove  
Capital, Inc. The Senior Subordinated Notes are redeemable at the option of the 
Company, in whole or in part, at any time on or after, May 1, 2003, at a        
declining redemption price.                                                     

   In addition, at any time prior to May 1, 2001, the Company may redeem up to
35% of the originally issued aggregate principal amount of the Senior           
Subordinated Notes at 109.25% of the principal amount thereof, plus accrued and 
unpaid interest and liquidated damages, if any, with net proceeds of one or more
public offerings of the Company's equity (or that of Investors or Holdings),    
provided at least 65% of the principal amount of the originally issued Senior   
Subordinated Notes remain outstanding. Upon the occurrence of a Change of       
Control, as defined in the Indenture governing the Senior Subordinated Notes    
(the "Indenture"), each holder of the Senior Subordinated Notes will have the   
right to require the Company to repurchase such holder's notes at an offer price
in cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and liquidated damages, if any, thereon to the date of purchase.

    The Indenture contains certain covenants that limit, among other things, the
ability of the Company to (i) pay dividends, redeem capital stock or make       
certain other restricted payments, (ii) incur additional indebtedness or issue  
certain preferred equity interests, (iii) merge into or consolidate with certain
other entities or sell all or substantially all of its assets, (iv) create liens
on assets and (v) enter into certain transactions with affiliates or related    
persons.                                                                        

SENIOR DISCOUNT DEBENTURES.  The Senior Discount Debentures were issued 
pursuant to an Indenture dated April 29, 1998 (the "Holdings Indenture") at a   
discount from their principal amount. The Senior Discount Debentures are general
unsecured obligations of Holdings and its co-issuer, Grove Holdings Capital,    
Inc. The Senior Discount Debentures accrete interest at a rate of 11 5/8% per   
annum, compounded semi-annually, to an aggregate principal amount of $88,000 at 
May 1, 2003. Thereafter, the Senior Discount Debentures will accrue cash        
interest at a rate of 11 5/8% per annum, payable semi-annually on May 1 and     
November 1 of each year, commencing on November 1, 2003. The Senior Discount    
Debentures will be redeemable at the option of Holdings, in whole or in part, at
any time after May 1, 2003, at a declining redemption price.                    

    In addition, at any time prior to May 1, 2001, Holdings may redeem up to 35%
of the originally issued aggregate principal amount of the Senior Discount      
Debentures at 111.625% of the accreted value (as                                

F-39

424B3
161st Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 161st
GROVE HOLDINGS LLC

NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED) 

JUNE 27, 1998 

(UNAUDITED) 
(IN THOUSANDS, UNLESS OTHERWISE NOTED)

7. LONG-TERM DEBT (CONTINUED)                                                   
defined by the Holdings Indenture) thereof plus liquidated damages (as defined  
by the Holdings Indenture) thereon, if any, with the net proceeds of one or more
public offerings of the Company's or Investors' equity, provided that at least  
65% of the originally issued aggregate principal amount of the Senior Discount  
Debentures remain outstanding thereafter.                                       

Upon the occurrence of a Change of Control (as defined by the Holdings  
Indenture), each holder of the Senior Discount Debentures will have the right to
require Holdings to repurchase such holders' notes at an offer price in cash    
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid 
interest and liquidated damages, if any, thereon to the date of purchase.       

The Holdings Indenture contains certain covenants the limit, among other
things, the ability of the Holdings to (i) pay dividends, redeem capital stock  
or make certain other restricted payments, (ii) incur additional indebtedness or
issue certain preferred equity interests, (iii) merge into or consolidate with  
certain other entities or sell all or substantially all of its assets, (iv)     
create liens on assets and (v) enter into certain transactions with affiliates  
or related persons. At June 27, 1998, the Company had $50,953 outstanding in    
Senior Discount Debentures.                                                     

    The Company expects that cash flows from foreign operations will be required
to meet its domestic debt service requirements. Such cash flows are expected to 
be generated from intercompany interest expense on loans the Company has made to
certain of its foreign subsidiaries to consummate the acquisitions of Hanson's  
crane and aerial work platform subsidiaries in the U.K., Germany and France and 
for working capital requirements. The loans have been established with amounts  
and interest rates to allow for repatriation without restriction or additional  
tax burden. However, there is no assurance that the foreign subsidiaries will   
generate the cash flow required to service the loans or that the laws in the    
foreign jurisdictions will not change to limit repatriation or increase the tax 
burden of repatriation.                                                         

8. RELATED PARTY TRANSACTIONS                                                   

On February 27, 1998, the Company sold the land and building of its U.K.
subsidiary to Hanson for $2,524 and recognized a loss of $4,769. The purchase   
price was determined by an independent third party appraisal. Immediately after 
the sale, Hanson leased the property back to the Company.                       

9. CLOSURE OF SUNDERLAND MANUFACTURING FACILITY                                 

 The Company plans to close its Sunderland, U.K. manufacturing facility as
the result of recurring operating losses. Management believes closing the       
facility will improve operating earnings as well as provide the opportunity for 
additional cost reductions through product rationalization, reduced selling,    
general and administrative expenses and reduced manufacturing costs. Management 
has estimated total closure costs to be approximately $17,000, consisting of    
approximately $10,000 of employee severance and $7,000 of plant shut-down costs,
all of which are expected to be expended in the next twelve months. Such amount 
has been accrued in purchase accounting.                                        

F-40

424B3
Last Page of 162
TOC
1st
Previous
Next
↓Bottom
Just 162nd
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY    
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS 
PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS AND, IF   
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS   
HAVING BEEN AUTHORIZED BY HOLDINGS OR GROVE HOLDINGS CAPITAL. NEITHER THE       
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY         
CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS 
OF HOLDINGS OR GROVE HOLDINGS CAPITAL SINCE THE DATE HEREOF. THIS PROSPECTUS    
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY, THE  
SECURITIES OFFERED HEREBY 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.                                                

--------------------------

TABLE OF CONTENTS 

                                                                [Download Table]

                                                      PAGE   
                                                      -----  
                                                             
Available Information............................           3
Special Note Regarding Forward-Looking                       
  Statements.....................................           4
Prospectus Summary...............................           5
Risk Factors.....................................          21
The Transactions.................................          27
Use of Proceeds..................................          29
Capitalization...................................          30
Selected Historical Financial Data...............          31
Management's Discussion and Analysis of Financial            
  Condition and Results of Operations............          32
The Exchange Offer...............................          42
Business.........................................          53
Management.......................................          66
Security Ownership of Certain Beneficial Owners              
  and Management.................................          70
Certain Relationships and Related Transactions...          71
Description of Certain Indebtedness..............          72
Description of Debentures........................          73
Certain Federal Income Tax Considerations........         109
ERISA Considerations.............................         112
Plan of Distribution.............................         113
Legal Matters....................................         114
Experts..........................................         114
Change in Accountants............................         114
Index to Unaudited Pro Forma Combined Financial              
  Statements.....................................         P-1
Index to Combined and Consolidated Financial                 
  Statements.....................................         F-1

--------------------------

UNTIL JANUARY 18, 1998 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL 
DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE SECURITIES, WHETHER OR NOT       
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.    
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN   
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENT.              

$88,000,000 

GROVE HOLDINGS LLC
GROVE HOLDINGS CAPITAL, INC.

OFFER TO EXCHANGE THEIR 
11 5/8% SENIOR DISCOUNT DEBENTURES
DUE 2009
WHICH HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, 
AS AMENDED, 
FOR ANY AND ALL OF
THEIR OUTSTANDING 
11 5/8% SENIOR DISCOUNT DEBENTURES
DUE 2009

--------------------- 

PROSPECTUS

--------------------- 

OCTOBER 20, 1998

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘424B3’ Filing		Date		First		Last			Other Filings
		5/1/09		16		74
		11/29/04		64
		11/1/03		16		160
		5/1/03		16		160
		9/29/01		21		23
		8/31/01		69
		5/1/01		16		160
		12/31/00		69		113
		4/30/00		64
		3/31/00		69
		1/1/00		113					10-Q
		12/31/99		41		113
		4/11/99		65
		3/31/99		69
		2/27/99		64
		12/15/98		42
		11/19/98		1		44
		11/1/98		160
		10/29/98		43		96
Filed on:		10/21/98		43
		10/20/98		2		162
		10/1/98		69
		9/30/98		40		72
		9/26/98		39
		8/29/98		1		74
		6/29/98		43		96
		6/27/98		4		161
		6/1/98		69
		4/29/98		1		160
		4/28/98		11		155
		3/16/98		69
		3/10/98		11		28
		2/27/98		161
		1/18/98		162
		12/31/97		80
		12/15/97		123		124
		10/1/97		147
		9/30/97		142
		9/27/97		6		157
		6/28/97		19		155
		3/1/97		70
		1/1/97		142
		11/1/96		140
		10/6/96		138
		9/30/96		141		142
		9/29/96		138
		9/28/96		6		152
		11/30/95		19		32
		9/30/95		6		151
		9/28/95		144
		8/30/95		19		133
		10/2/94		133
		10/1/94		6		143
		9/24/94		32
		10/2/93		6		32
		9/25/93		32
									List all Filings