Second Amendment Agreement
to

Re: Note Purchase Agreements Dated as of September 10, 2001

and 7.56% Secured Notes due September 10, 2011

 

Dated as of

May 13, 2002

To Each of the holders listed in Schedule A to this Second Amendment Agreement

Ladies and Gentlemen:

Reference is made to (i) the separate Note Purchase Agreements each dated as of
September 10, 2001 as amended by the First Amendment Agreement dated as of
March 12, 2002, (the "First Amendment Agreement") among the Obligors (defined
below) and each of you (the "Existing Note Purchase Agreements" and, as amended
hereby, the "Note Purchase Agreements"), among Astec Industries, Inc., a
Tennessee corporation (the "Company"), Astec Financial Services, Inc., a
Tennessee corporation ("Financial" and, together with the Company, the
"Obligors"), and the holders named on Schedule A attached thereto, respectively,
(ii) the $80,000,000 aggregate principal amount of 7.56% Senior Secured Notes
due September 10, 2011 of the Obligors, as amended by the First Amendment (the
"Existing Notes" and, as amended hereby, the "Notes") and (iii) the Pledge
Agreement dated as of September 10, 2001 between the Company and the Collateral
Agent (the "Pledge Agreement").

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Obligors request the amendment of certain provisions of
the Existing Note Purchase Agreements and the Existing Notes as hereinafter
provided.

Upon your acceptance hereof in the manner hereinafter provided and upon
satisfaction of all conditions to the effectiveness hereof and receipt by the
Obligors of similar acceptances from the holders of the Existing Notes, this
Second Amendment Agreement shall constitute a contract between us amending the
Existing Note Purchase Agreements and the Existing Notes, in each case, as of
May 13, 2002, but only in the respects hereinafter set forth:

Section 1. Omnibus Amendment.

In the event that the Leverage Ratio is greater than 3.00 to 1.00 as of the last
day of any fiscal quarter of the Obligors beginning with the fiscal quarter
ending March 31, 2002, the Notes shall bear an additional amount of interest (in
addition to the stated rate of interest or the stated overdue rate of interest
and in addition to the additional amount accrued from January 1, 2002 to
March 31, 2002, pursuant to the First Amendment Agreement) equal to the
respective percentage per annum (the "Percentage") on the unpaid principal
amount of the Notes for the immediately succeeding fiscal quarter (such
additional amount of interest being referred to as the "Additional Amount")
which corresponds to the respective Leverage Ratio as of the last day of each
such fiscal quarter, as set forth in the chart below:

Leverage Ratio

Percentage

3.0:1.0<X<3.5:1.0

.375%

3.5:1.0<X<4.0:1.0

.625%

4.0:1.0<X<4.5:1.0

.875%

4.5:1.0<X<5.0

1.125%

>5.0

1.375%

All accrued and unpaid Additional Amounts shall be paid concurrently with the
payment of all other accrued and unpaid interest on the Notes. The Obligors and
each of the holders acknowledge that the Existing Note Purchase Agreements and
the Existing Notes shall be and are hereby amended to incorporate the provisions
of this Section 1.

In the event any Additional Amount is required to be paid hereunder, the Company
shall give each holder a reasonably detailed calculation thereof with respect to
such holder's Notes not less than 10 days prior to the date on which such
Additional Amount is required to be paid.

Section 2. Additional Amendments to Existing Note Purchase Agreements.

Section 2.1

. Section 10.3 of the Existing Note Purchase Agreements shall be and is hereby
amended in its entirety to read as follows:

"Section 10.3. Consolidated Total Debt Coverage. The Obligors will not permit,
as at the end of each fiscal quarter, the ratio of Consolidated Total Debt to
Consolidated Operating Cash Flow to exceed (a) 5.25 to 1.00 for the fiscal
quarter ending on March 31, 2002, (b) 5.25 to 1.00 for the fiscal quarter ending
on June 30, 2002, (c) 4.50 to 1.00 for the fiscal quarter ending on
September 30, 2002, (d) 3.50 to 1.00 for the fiscal quarter ending on
December 31, 2002 or (e) 3.00 to 1.00 for the fiscal quarters ending on or after
March 31, 2003, in each case for the immediately preceding four quarter period,
taken as a single accounting period ending on the date of calculation."

Section 2.2

. Section 10.4 of the Existing Note Purchase Agreements shall be and is hereby
amended in its entirety to read as follows:

"Section 10.4. Fixed Charge Coverage. The Obligors will not permit, as at the
end of each fiscal quarter, the ratio of Consolidated Earnings Available for
Fixed Charges to Consolidated Fixed Charges to be less than (a) 1.00 to 1.00 for
the fiscal quarter ending on March 31, 2002, (b) 1.00 to 1.00 for the fiscal
quarter ending on June 30, 2002, (c) 1.25 to 1.00 for the fiscal quarter ending
on September 30, 2002 or (d) 2.00 to 1.00 each fiscal quarter ending on or after
December 31, 2002, in each case for the immediately preceding four quarter
period, taken as a single accounting period ending on the date of calculation."

Section 2.3. Section 12.5 of the Existing Note Purchase Agreements shall be and
is hereby amended by adding "and no Default has occurred and is continuing"
after the words "as of the end of two consecutive fiscal quarters".

Section 2.4. Schedule B to the Existing Note Purchase Agreements shall be and is
hereby amended by adding the following definition thereto in alphabetical order:

"'Second Amendment Agreement'

shall mean the Second Amendment Agreement dated as of May 13, 2002 to the Note
Purchase Agreements dated as of September 10, 2001, as amended by the First
Amendment Agreement, between and among the Obligors and the holders."

Section 3. Limited Waiver of Default under Existing Note Purchase Agreements.

The Required Holders waive the Events of Default arising under Section 10.3 and
10.12 of the Existing Purchase Agreements to the extent that (i) the Leverage
Ratio was greater than 5.25 to 1.0 as of March 31, 2002, but not greater than
5.77 to 1.0, and (ii) the parties did not enter into a Security Agreement,
within 30 days of the effective date of the First Amendment Agreement.

Section 4. Conditions Precedent.

Section 4.1. This Second Amendment Agreement shall not become effective until,
and shall become effective on, the Business Day when each of the following
conditions shall have been satisfied:

(a) Each holder shall have received this Second Amendment Agreement, duly
executed by the Obligors.

(b) The holders shall have consented to this Second Amendment Agreement as
evidenced by their execution thereof.

(c) The representations and warranties of the Obligors set forth in Section 4
hereof shall be true and correct in all material respects as of the date of the
execution and delivery of this Second Amendment Agreement.

(d) Any consents or approvals from any holder or holders of any outstanding
Security of the Obligors or any Subsidiary and any amendments of agreements
pursuant to which any Securities may have been issued which shall be necessary
to permit the consummation of the transactions contemplated hereby shall have
been obtained and all such consents or amendments shall be reasonably
satisfactory in form and substance to the holders and their special counsel.

(e) Each holder shall have received such Officer's Certificate and such
certificates of a secretarial officer of each Obligor as it may reasonably
request with respect to this Second Amendment Agreement and the transactions
contemplated hereby.

(f) Each holder shall have received the opinion of counsel for the Obligors
covering the matters set forth in Exhibit A hereto and such other matters
incident to the transactions contemplated hereby as the holders may reasonably
request.

(g) The Obligors shall have paid the fees and disbursements of the holders'
special counsel, Chapman and Cutler, incurred in connection with the
negotiation, preparation, execution and delivery of this Second Amendment
Agreement and the transactions contemplated hereby which fees and disbursements
are reflected in the statement of such special counsel delivered to the Obligors
at the time of the execution and delivery of this Second Amendment Agreement.
Upon receipt of any supplemental statement after the execution of this Second
Amendment Agreement, the Obligors will pay such additional fees and
disbursements of the holders' special counsel which were not reflected in its
accounting records as of the time of the delivery of the initial statement of
fees and disbursements.

(h) The Obligors shall have paid to the holders, on a pro rata basis based on
the aggregate outstanding principal amounts of the Notes held by said
Noteholders on the date hereof a non-refundable fee of $100,000.

(i) Each holder shall have received a fully executed copy of the Second
Amendment to Credit Agreement dated as of May 13, 2002 among the Obligors, the
lender parties thereto and Bank One NA, as agent for such lenders (the "Second
Amendment to Credit Agreement"), satisfactory in form and substance to the
holders, a copy of which is attached hereto as Exhibit B.

(j) Each holder shall have received a fully executed copy of the Security
Agreement dated as of May 13, 2002 among the Obligors, each subsidiary of the
Obligors and Bank One NA, in its capacity as collateral agent (the "Security
Agreement"), satisfactory in form and substance to the holders, a copy of which
is attached hereto as Exhibit C.

(k) Each holder shall have received a fully executed copy of the First Amendment
to Intercreditor and Collateral Agency Agreement dated as of May ____, 2002
among Bank One NA, in its capacity as collateral agent, agent and lender, the
lenders party thereto and the holders party thereto (the "First Amendment to
Intercreditor"), satisfactory in form and substance to the holders, a copy of
which is attached hereto as Exhibit D.

(l) All corporate and other proceedings in connection with the transactions
contemplated by this Second Amendment Agreement and all documents and
instruments incident to such transactions shall be satisfactory to you and your
special counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.

Section 5. Representations and Warranties.

The Obligors hereby represent and warrant that as of the date hereof and as of
the date of execution and delivery of this Second Amendment Agreement:

(a) Each Obligor is duly incorporated, validly existing and in good standing
under the laws of the State of Tennessee.

(b) Each Obligor has the corporate power to own its property and to carry on its
business as now being conducted.

(c) Each Obligor is duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction in which the failure to do so
would, individually or in the aggregate, have a material adverse effect on the
business, condition (financial or other), assets, operations, properties or
prospects of such Obligor.

(d) This Second Amendment Agreement and the transactions contemplated hereby are
within the corporate powers of each Obligor, have been duly authorized by all
necessary corporate action on the part of each Obligor and this Second Amendment
Agreement has been duly executed and delivered by each Obligor and constitute
legal, valid and binding obligations of each Obligor enforceable in accordance
with their respective terms.

(e) Each Obligor represents and warrants that there are no other defaults under
the Existing Note Purchase Agreements other than defaults under the provisions
of the Existing Note Purchase Agreements as a result of violations of
Sections 10.3 and 10.12 thereof as a result of (i) the Consolidated Total Debt
Coverage Ratio being greater than 5.25 to 1.0 as of March 31, 2002, but not
greater than 5.77 to 1.0 and (ii) any default caused by the parties not having
entered into a Security Agreement within 30 days of the effective date of the
First Amendment Agreement.

(f) The execution, delivery and performance of this Second Amendment Agreement
by each Obligor does not and will not result in a violation of or default under
(A) the articles of incorporation or bylaws of such Obligor, (B) any material
agreement to which each Obligor is a party or by which it is bound or to which
such Obligor or any of its properties is subject, (C) any material order, writ,
injunction or decree binding on each Obligor, or (D) any material statute,
regulation, rule or other law applicable to each Obligor.

(g) No authorization, consent, approval, exemption or action by or notice to or
filing with any court or administrative or governmental body (other than
periodic filings with regulatory authorities, none of which are required to be
filed as of the effective date of this Second Amendment Agreement) is required
in connection with the execution and delivery of this Second Amendment Agreement
or the consummation of the transactions contemplated thereby.

(h) The Obligors have not paid or agreed to pay any fees or other consideration,
or given any additional security or collateral, or shortened the maturity or
average life of any indebtedness or permanently reduced any borrowing capacity,
in each case, in connection with the obtaining of any consents or approvals in
connection with the transactions contemplated hereby including, without
limitation thereof, in connection with the Credit Agreement dated as of
September 10, 2001, as amended among the Obligors, the lender parties thereto
and Bank One NA, as agent for such lenders, other than (i) the reduction of
total commitment under the Bank Credit Agreement from $125,000,000 to
$100,000,000, (ii) the payment of legal fees of counsel to the Lenders and the
Agent under the First Amendment to Credit Agreement and the Second Amendment to
Credit Agreement, (iii) the payment of the fees referred to in Section 4.3 of
the First Amendment to Credit Agreement in an aggregate amount not in excess of
$125,000 plus such other fees payable to the Agent as have been separately
agreed to by the Agent and Obligors in connection with the First Amendment to
Credit Agreement and (iv) the payment of the fees referred to in Section 4(b) of
the Second Amendment to Credit Agreement in an aggregate amount not in excess of
$125,000 plus such other fees payable to the Agent as have been separately
agreed to by the Agent and Obligors in connection with the Second Amendment to
Credit Agreement.

(i) The Trigger Date has occurred on March 31, 2002.

(j) The additional amount of accrued interest (as contemplated in the First
Amendment Agreement) for the period from January 1, 2002 up to but not including
April 1, 2002 was $75,000, and $57,500 of such amount has been paid in full on
March 10, 2002.

(k) The Leverage Ratio was greater than 5.25 to 1.00 as of March 31, 2002 and,
accordingly, the Additional Amount which began to accrue as of April 1, 2002 up
to but not including July 1, 2002 is $275,000 in the absence of any principal
prepayment of the Notes.

Section 6. Miscellaneous.

Section 6.1. Except as amended herein, all terms and provisions of the Existing
Note Purchase Agreements, the Existing Notes, the Pledge Agreement and related
agreements and instruments are hereby ratified, confirmed and approved in all
respects.

Section 6.2. Any and all notices, requests, certificates and other instruments,
including the Notes, may refer to any of the Financing Documents without making
specific reference to this Second Amendment Agreement, but nevertheless all such
references shall be deemed to include this Second Amendment Agreement unless the
context shall otherwise require. Your acceptance hereof will also constitute
your agreement that prior to any sale, assignment, transfer, pledge or other
disposition by you of any Notes, you shall either (i) impose on the Notes so to
be disposed of an appropriate endorsement referring to this Second Amendment
Agreement as binding on the parties hereto and upon any and all future holders
of such Notes or (ii) at your option at any time, surrender such Notes for new
Notes of the same form and tenor as the Notes so surrendered but revised to
contain express textual reference to this Second Amendment Agreement. All
expenses for the preparation of such new Notes and the exchange for such new
Notes are to be borne by the Obligor.

Section 6.3. This Second Amendment Agreement and all covenants herein contained
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereunder. All covenants made by the Obligors herein
shall survive the closing and the delivery of this Second Amendment Agreement.

Section 6.4. This Second Amendment Agreement shall be governed by and construed
in accordance with Illinois law.

Section 6.5. The capitalized terms used in this Second Amendment Agreement shall
have the respective meanings specified in the Note Purchase Agreements unless
otherwise herein defined, or the context hereof shall otherwise require.

The execution hereof by the holders shall constitute a contract among the
Obligors and the holders for the uses and purposes hereinabove set forth. This
Second Amendment Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original but all together only one
agreement.

Astec Industries, Inc.

By /s/ Richard W. Bethea

Its Executive Vice President and Secretary

Astec Financial Services, Inc.

By /s/ Albert E. Guth

Its President

 

This foregoing Second Amendment Agreement is hereby accepted and agreed to as of
the date aforesaid. The execution by each holder listed below shall constitute
its respective several and not joint confirmation that it is the owner and
holder of the Notes set opposite its name on Schedule I hereto and that it has
not sold or otherwise transferred any of the Notes originally purchased by it
pursuant to the Note Purchase Agreements.

American United Life Insurance Company

 

 

By /s/ Christopher D. Pahlke

Name: Christopher D. Pahlke

Title: Vice President

 

This foregoing Second Amendment Agreement is hereby accepted and agreed to as of
the date aforesaid. The execution by each holder listed below shall constitute
its respective several and not joint confirmation that it is the owner and
holder of the Notes set opposite its name on Schedule I hereto and that it has
not sold or otherwise transferred any of the Notes originally purchased by it
pursuant to the Note Purchase Agreements.

The Guardian Life Insurance Company of America

 

 

By /s/ Brian Keating

Name: Brian Keating

Title: Director, Fixed Income

 

The Guardian Insurance & Annuity Company, Inc.

 

 

By /s/ Brian Keating

Name: Brian Keating

Title: Director, Fixed Income

 

Fort Dearborn Life Insurance Company

By: Guardian Investor Services LLC

 

By /s/ Brian Keating

Name: Brian Keating

Title: Director, Fixed Income

 

The Berkshire Life Insurance Company of America

 

By /s/ Brian Keating

Name: Brian Keating

Title: Director, Fixed Income

 

This foregoing Second Amendment Agreement is hereby accepted and agreed to as of
the date aforesaid. The execution by each holder listed below shall constitute
its respective several and not joint confirmation that it is the owner and
holder of the Notes set opposite its name on Schedule I hereto and that it has
not sold or otherwise transferred any of the Notes originally purchased by it
pursuant to the Note Purchase Agreements.

National Life Insurance Company

 

 

By

Name:

Title: 

Life Insurance Company of the Southwest

 

 

By

Name:

Title:

 

 

This foregoing Second Amendment Agreement is hereby accepted and agreed to as of
the date aforesaid. The execution by each holder listed below shall constitute
its respective several and not joint confirmation that it is the owner and
holder of the Notes set opposite its name on Schedule I hereto and that it has
not sold or otherwise transferred any of the Notes originally purchased by it
pursuant to the Note Purchase Agreements.

Unum Life Insurance Company of America

By: Provident Investment Management, LLC, its Agent

 

 

By /s/ David Fussell

Name: David Fussell

Title: Senior Vice President

 

This foregoing Second Amendment Agreement is hereby accepted and agreed to as of
the date aforesaid. The execution by each holder listed below shall constitute
its respective several and not joint confirmation that it is the owner and
holder of the Notes set opposite its name on Schedule I hereto and that it has
not sold or otherwise transferred any of the Notes originally purchased by it
pursuant to the Note Purchase Agreements.

United of Omaha Life Insurance Company

 

 

By /s/ Edwin H. Garrison, Jr.

Name: Edwin H. Garrison, Jr.

Title: First Vice President

 

Companion Life Insurance Company

 

 

By /s/ Edwin H. Garrison, Jr.

Name: Edwin H. Garrison, Jr.

Title: Authorized Signer

 

This foregoing Second Amendment Agreement is hereby accepted and agreed to as of
the date aforesaid. The execution by each holder listed below shall constitute
its respective several and not joint confirmation that it is the owner and
holder of the Notes set opposite its name on Schedule I hereto and that it has
not sold or otherwise transferred any of the Notes originally purchased by it
pursuant to the Note Purchase Agreements.

Nationwide Life Insurance Company

 

 

By /s/ Mark W. Poeppelman

Name: Mark W. Poeppelman

Title: Associate Vice President

 

Nationwide Life and Annuity Insurance Company

 

 

By /s/ Mark W. Poeppelman

Name: Mark W. Poeppelman

Title: Associate Vie President

 

This foregoing Second Amendment Agreement is hereby accepted and agreed to as of
the date aforesaid. The execution by each holder listed below shall constitute
its respective several and not joint confirmation that it is the owner and
holder of the Notes set opposite its name on Schedule I hereto and that it has
not sold or otherwise transferred any of the Notes originally purchased by it
pursuant to the Note Purchase Agreements.

Teachers Insurance and Annuity Association of America

 

 

By /s/ Estelle Simsolo

Name: Estelle Simsolo

Title: Director-Private Placements

 

Name of Holder

Outstanding Principal Amount
and Series of Notes
Held as of March 12, 2002

American United Life Insurance Company

$3,000,000

CUDD & CO. (as nominee of The Guardian Life Insurance Company of America)

$5,000,000
$2,500,000

CUDD & CO. (as nominee of The Berkshire Life Insurance Company of America)

$5,000,000

CUDD & CO. (as nominee of The Guardian Insurance & Annuity Company, Inc.)

$1,000,000

Bank One & Co. (as nominee of Fort Dearborn Life Insurance Company)

$1,000,000
$500,000

National Life Insurance Company

$4,000,000

Life Insurance Company of the Southwest

$3,000,000

CUDD & CO. (as nominee of Unum Life Insurance Company of America)

$15,000,000

United of Omaha Life Insurance Company

$13,000,000

Companion Life Insurance Company

$2,000,000

Nationwide Life Insurance Company

$5,000,000

Nationwide Life and Annuity Insurance Company

$2,000,000

Teachers Insurance and Annuity Association of America

$18,000,000