EXHIBIT 10.43 

 

 

 

 

ASSET SALE OF

 

SUPERIOR INDUSTRIES OF MORRIS, INC.

 

TO

 

SUPERIOR INDUSTRIES, LLC

TABLE OF CONTENTS

 

Headings

Page No.

ARTICLE I : DEFINITIONS

Section 1.1 Specific Definitions.

Section 1.2 Other Terms.

Section 1.3 Other Definitional Provisions.

ARTICLE II : PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES

Section 2.1 Purchase of Assets from Seller.

Section 2.2 Excluded Assets.

Section 2.3 Assumed Liabilities.

Section 2.4 Excluded Liabilities and Obligations.

Section 2.5 Sales, Use and Deed Taxes.

Section 2.6 Purchase and Sale of Premises.

Section 2.7 Retention of Second Quarter 2004 Profit by Seller.

ARTICLE III : PURCHASE PRICE AND PAYMENT

Section 3.1 Purchase Price.

Section 3.2 Payment of Purchase Price.

Section 3.3 Allocation of Purchase Price.

Section 3.4 Closing; Delivery and Payment.

ARTICLE IV : REPRESENTATIONS AND WARRANTIES OF SELLER AND ASTEC

Section 4.1 Organization and Authority of Seller.

Section 4.2 Financial Statements.

Section 4.3 Litigation.

Section 4.4 Consents and Approvals.

Section 4.5 Tax Matters.

Section 4.6 Benefit Plans.

Section 4.7 Brokers and Finders.

Section 4.8 Insurance.

Section 4.9 Completeness of Statements; Effect of Representations and
Warranties.

Section 4.10 Real Property.

ARTICLE V : REPRESENTATIONS AND WARRANTIES OF BUYER

Section 5.1 Organization and Authority of Buyer.

Section 5.2 Brokers and Finders.

Section 5.3 Legal Proceedings.

Section 5.4 Consents and Approvals.

ARTICLE VI : TAX MATTERS

Section 6.1 Tax Indemnification.

Section 6.2 Tax Returns.

Section 6.3 Contest Provisions.

Section 6.4 Assistance and Cooperation.

Section 6.5 Survival of Obligations.

ARTICLE VII : CERTAIN COVENANTS AND AGREEMENTS OF SELLER

Section 7.1 Access and Information.

Section 7.2 Registrations, Filings and Consents.

Section 7.3 Conduct of Business.

Section 7.4 Best Efforts.

Section 7.5 Retention of Books and Records.

Section 7.6 Further Assurances.

ARTICLE VIII : CONDITIONS TO THE PURCHASE AND SALE

Section 8.1 General Conditions to the Purchase and Sale Relating to Parties.

Section 8.2 Conditions to Purchase by Buyer.

Section 8.3 Conditions to Sale by Seller.

ARTICLE IX : INDEMNIFICATION

Section 9.1 Survival; Rights and Remedies Not Affected by Knowledge.

Section 9.2 Indemnification and Payment of Damages By Astec.

Section 9.3 Indemnification By Buyer.

Section 9.4 Indemnity Claims.

ARTICLE X : TERMINATION

Section 10.1 Termination

ARTICLE XI : MISCELLANEOUS

Section 11.1 Expenses.

Section 11.2 Best Efforts; Further Assurances.

Section 11.3 Public Disclosure.

Section 11.4 Assignment.

Section 11.5 Amendments and Waivers.

Section 11.6 Entire Agreement.

Section 11.7 Schedules.

Section 11.8 Notices.

Section 11.9 Governing Law.

Section 11.10 Severability.

Section 11.11 Section Headings.

Section 11.12 Counterparts.

Section 11.13 Representation By Counsel; Interpretation.

Section 11.14 Arbitration Clause.

Section 11.15 Confidentiality.

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into this 1st
day of June, 2004 ("Effective Date") by and among Astec Industries, Inc., a
Tennessee corporation ("Astec") Superior Industries of Morris, Inc., a Minnesota
corporation ("Seller"), and Superior Industries, LLC, a Minnesota limited
liability company ("Buyer").

R E C I T A L S:

WHEREAS

, Seller is a wholly owned subsidiary of Astec;

WHEREAS

, Seller has been engaged in the business of manufacturing equipment for
aggregate processing applications ("Business"); and

WHEREAS

, Seller owns certain property, plant, equipment, goodwill, assets and real
property from which Seller conducts the Business; and

WHEREAS,

Seller desires to sell and transfer to Buyer, and Buyer desires to purchase from
Seller, the Purchased Assets of Seller, as more specifically provided herein;
and

WHEREAS

, Seller owns real property and improvements located in Morris, Minnesota, which
constitutes all the real property and improvements used in connection with
Seller's Business (the "Premises"); and

WHEREAS

, Seller desires to sell and transfer to Buyer and Buyer desires to purchase
from Seller, the Premises, as more specifically provided herein.

NOW, THEREFORE,

in consideration of the mutual covenants and undertakings contained herein, and
subject to and on the terms and conditions herein set forth, the parties
intending to be legally bound hereby agree as follows:

ARTICLE I : DEFINITIONS

Section 1.1 Specific Definitions.

As used in this Agreement and any Exhibits, Schedules, or certificates delivered
pursuant hereto, the following terms shall have the following meanings:

"Accounts Receivable" has the meaning set forth in Section 2.1(i).

"Advances to Corporate"

has the meaning set forth in Section 2.2(b).

"Agreement"

means this Agreement and all Exhibits and Schedules.

"Affiliate"

means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, such other Person. For
the purposes of this definition, "control" of a Person means the power, direct
or indirect, to direct or cause the direction of the management and policies of
such Person, whether by ownership of securities, contract, law or otherwise and
the terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.

"Assets"

has the meaning set forth in Section 2.1.

"Astec"

means Astec Industries, Inc. a Tennessee corporation.

"Base Purchase Price"

has the meaning set forth in Section 3.1(a)(i).

"Benefit Plans"

has the meaning set forth in Section 4.6.

"Breach"

has the meaning set forth in Section 9.2(a).

"Business" has the meaning set forth in the Recitals.

"Buyer"

means Superior Industries, LLC, a Minnesota limited liability company.

"Buyer Indemnitees"

has the meaning set forth in Section 9.2.

"Cash"

has the meaning set forth in Section 2.1(j).

"Claim"

has the meaning set forth in Section 9.4(a).

"Claim Notice"

has the meaning set forth in Section 9.4(a).

"Closing"

has the meaning set forth in Section 3.4.

"Closing Date"

means the date of the Closing.

"Closing Date Financial Statements"

has the meaning set forth in Section 2.7.

"Code"

means the Internal Revenue Code of 1986, as amended to the date hereof.

"Contracts" has the meaning set forth in Section 2.1(h).

"Damages"

means debts, obligations, losses, claims, damages (including incidental and
consequential damages), liabilities, deficiencies, proceedings, demands,
assessments, orders, judgments, writs, decrees, costs and other expenses
(including costs of investigation and defense and reasonable attorneys' fees) or
diminution of value, whether or not involving a third-party claim, of any nature
and of any kind whatsoever.

"Effective Date" has the meaning set forth in the Preamble.

"Encumbrances"

means any charges, claims, community property interests, conditions, equitable
interests, liens, mortgages, easements, rights-of-way, options, pledges,
security interests, rights of first refusal or restrictions of any kind,
including any restrictions on use, voting, transfer, receipt of income or
exercise of any other attribute of ownership.

"Equipment"

has the meaning set forth in Section 2.1(a).

"ERISA"

means the Employee Retirement Income Security Act of 1974, as amended.

"Excluded Assets"

has the meaning set forth in Section 2.2.

"FDAA"

mean the Fold Down Axle Assembly.

"Final Reconciliation"

has the meaning set forth in Section 2.7.

"Financial Statements"

has the meaning set forth in Section 4.2.

"GAAP"

means generally accepted accounting principles in the United States of America,
as in effect from time to time.

"Indemnitee"

has the meaning set forth in Section 9.4.

"Indemnifying Party"

has the meaning set forth in Section 9.4.

"Intangible Property" has the meaning set forth in Section 2.1(c).

"Interim Financial Statements"

has the meaning set forth in Section 4.2.

"Inventory" has the meaning set forth in Section 2.1(d).

"IRS"

means the Internal Revenue Service.

"KPI"

has the meaning set forth in Section 8.3(b).

"Letter of Understanding"

means that letter of understanding dated May 14, 2004, entered into between the
parties, a copy of which is attached hereto as Exhibit A.

"Licenses and Permits"

has the meaning set forth in Section 2.1(e).

"Material Adverse Effect"

means a material adverse effect on the business, operations, properties, assets,
prospects or condition (financial or otherwise) of Seller, taken as a whole, the
Premises, or on any Seller's ability to perform any of their obligations under
this Agreement and consummate the transactions contemplated hereby.

"Net Transactional Income Tax"

has the meaning set forth in Section 3.1(a)(ii).

"Patents"

has the meaning set forth in Section 2.1(c)(iii).

"Pension Plan"

has the meaning set forth in Section 4.6.

"Person"

means an individual, corporation, partnership, trust or unincorporated
organization or government or any agency or political subdivision thereof.

"Personal Property Leases"

has the meaning set forth in Section 2.1(g).

"Premises"

has that meaning set forth in the recitals.

"Pre-Paid Income Tax"

has the meaning set forth in Section 2.2(c).

"Purchase Price"

has that meaning set forth in Section 3.1.

"Real Estate Leases"

has the meaning set forth in Section 2.1(f).

"Securities Act"

means the Securities Act of 1933, as amended.

"Seller"

means Superior Industries of Morris, Inc., a Minnesota corporation.

"Seller Indemnitees"

has the meaning set forth in Section 9.3.

"Tax" or "Taxes"

means any federal, state, local or foreign income, gross receipts, windfall
profits, severance, property, production, sales, use, stock transfer,
conveyance, intangible, stamp, duty, transfer, reporting, recording, license,
excise, franchise or similar taxes, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties.

"Tax Returns"

means all federal, state, local and foreign Tax returns, Tax reports, and
declarations of estimated Tax, including without limitation federal income tax
returns that include Seller.

"Technology"

has the meaning set forth in Section 2.1(c)(iv).

"Third Party Claim"

has the meaning set forth in Section 9.4(b).

"Transactional Income Tax"

has the meaning set forth in Section 3.1(a)(ii).

"Vehicles" has the meaning set forth in Section 2.1(b).

"Work in Process"

has the meaning set forth in Section 2.1(k).

Section 1.2 Other Terms.

Other terms may be defined elsewhere in the text of this Agreement and shall
have the meanings indicated throughout this Agreement.

Section 1.3 Other Definitional Provisions.

For all purposes of this Agreement, except as otherwise expressly provided:

a. The terms defined in this Article 1 have the meanings assigned to them in
this Article 1 and include the plural as well as the singular;

b. All accounting terms not otherwise defined herein having the meanings
assigned under GAAP or under Astec standard operating procedures;

c. All references to Articles, Sections, Exhibits and Schedules are to the
designated Articles, Sections, Exhibits and Schedules, respectively, to this
Agreement;

d. Pronouns of either gender and neuter shall include, as appropriate, the other
pronoun forms;

e. The words "herein", "hereof", and "hereunder" and other words of similar
import refer to this Agreement as a whole and not any particular Article,
Section, or other subdivision;

f. The use herein of the word "include" or "including", when following any
general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter;

g. For the purposes of this Agreement, "knowledge" means actual knowledge or
knowledge that would exist upon reasonable inquiry. A Person's knowledge shall
specifically include the actual knowledge of any officer or trustee thereof, if
applicable, or knowledge that would exist upon reasonable inquiry by any officer
or trustee thereof, if applicable. "Astec's knowledge" means the actual
knowledge of J. Don Brock, Robert G. Stafford, F. McKamy Hall, or Albert E.
Guth, or knowledge that would exist upon reasonable inquiry by those
individuals.

h. For purposes of this Agreement, the term "ordinary course of business" shall
mean an action that is consistent with the past practices of the applicable
party and is taken in the ordinary course of the normal day-to-day operations of
the applicable party, is not required to be authorized by the board of directors
or similar governing body of the applicable party and is similar in nature and
magnitude to actions customarily taken without any authorization by the board of
directors of a corporation in the same line of business as the applicable party.

ARTICLE II : PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES

Section 2.1 Purchase of Assets from Seller.

Subject to the terms and conditions hereof, Seller agrees on the Closing Date
(as hereinafter defined) to assign, sell, transfer, convey, and deliver to
Buyer, and Buyer agrees on the Closing Date to purchase from Seller, all of the
assets and personal property of Seller (except only the assets specifically
identified as "Excluded Assets" in Section 2.2 herein) related to or used in the
operation of the Business, wherever the same may be located (collectively
referred to as the "Assets"), including, without limitation, the following (all
exhibits incorporated in Section 2.1 and 2.2 reflect information as of March 31,
2004, unless stated otherwise):

a. All furniture, equipment, machinery, tooling, trade fixtures and leasehold
improvements reflected on Seller's books and records for the Business, including
those items identified on Exhibit 2.1(a) ("Equipment");

b. All vehicles including those vehicles identified on Exhibit 2.1(b) hereto
("Vehicles");

c. All intangible personal property, business records, customer lists and
goodwill ("Intangible Property"), including the following:

(i) All assumed names under which Seller conducts the Business, including those
identified on Exhibit 2.1(c)(i) hereto;

(ii) All tradenames, trademarks or service mark registrations and applications,
common law trademarks, including those identified on Exhibit 2.1(c)(ii) hereto;

(iii) All domestic and foreign letters patent, patent applications, and patent
and know-how licenses, including those identified in Exhibit 2.1(c)(iii) hereto
("Patents"); and

(iv) All technology, know-how, trade secrets, manufacturing processes, formulae,
drawings, designs, computer programs, copyrights (including registrations and
applications therefor identified on Exhibit 2.1(c)(iv) hereto, related to the
Business, and all documentary evidence thereof ("Technology");

d. All inventory, including raw materials, supplies, work in process and
finished inventory of the Business as of the Closing Date ("Inventory");

e. To the extent transferable or assignable, all permits, licensing approvals
and notifications, governmental or otherwise, relating to the Business
("Licenses and Permits");

f. To the extent transferable or assignable, all of Seller's contract rights and
benefits under its real estate leases ("Real Estate Leases") used in the
Business, including leases identified in Exhibit 2.1(f) hereto, subject to the
terms and conditions thereof;

g. To the extent transferable or assignable, all of Seller's contract rights and
benefits under all of its personal property leases for tangible personal
property used in the Business, including those leases identified in Exhibit
2.1(g) hereto, subject to the terms and conditions thereof ("Personal Property
Leases");

h. All other contract rights related to the Business, subject to the terms and
conditions thereof identified on Exhibit 2.1(h) ("Contracts");

i. All accounts receivable of Seller relating to the Business identified on
Exhibit 2.1(i) ("Accounts Receivable");

j. All cash on hand of Seller as of the Closing Date identified on Exhibit
2.1(j) ("Cash");

k. All work in process, customer orders and vendor requests identified on
Exhibit 2.1(k) ("Work in Process"); and

l. The Premises as legally described on Exhibit 2.1(l).

Section 2.2 Excluded Assets.

Notwithstanding anything herein to the contrary, Buyer does not purchase, and
Seller does not sell, any of the following assets ("Excluded Assets"):

a. Seller's corporate minute book and corporate records (provided that Seller
will provide copies thereof relating to the Business to Buyer upon request by
Buyer for reasonable business purposes).

b. Net funds sent by Seller to Astec, referred to herein as "Advances to
Corporate" which shall be more fully described on Exhibit 2.2(b).

c. Seller's pre-paid income tax which shall be more fully described on Exhibit
2.2(c) ("Pre-Paid Income Tax").

d. Seller's prepaid property casualty insurance premiums.

 

Section 2.3 Assumed Liabilities.

Subject to the terms and conditions hereof, and with the exception of those
excluded liabilities set forth in Section 2.4, upon the Closing Date, Buyer
shall assume the obligation to pay all known and unknown liabilities of the
Seller, including warranty and product liability claims.

Section 2.4 Excluded Liabilities and Obligations.

Buyer does not assume and Seller does not transfer or assign any of the
following liabilities or obligations relating to Seller and the Business:

 

Any obligation incurred by Seller for accounting, legal or other professional
fees which are related to the consummation of the transaction contemplated
herein;

All obligations or liabilities of Seller known to Astec but not disclosed to
Buyer prior to the Closing Date;

Any state or local taxes based upon or measured by revenue or profits from sales
to end users in the operation of the Business from November 1, 1999 through the
Closing Date.

All obligations or liabilities of Seller for federal, state or local income
taxes or excise or franchise taxes arising from Ernst & Young prepared tax
returns from November 1, 1999 through the Closing Date;

All obligations or liabilities incurred by Seller or Astec in connection with
the Purchase Agreement and the transactions provided for herein, including any
liabilities to Astec's shareholders or shareholder's claims and any claims by
unsuccessful "bidders" for the purchase of the assets of Seller;

All obligations or liabilities of Seller or Astec under any credit agreement
with Seller's or Astec's current or past lenders;

All obligations and liabilities of Seller relating to any covered medical or
dental plan benefits provided by an Astec sponsored benefit plan for any
eligible and insured employee of Seller from 11/01/99 to 6/30/04 where the claim
is incurred prior to the Closing Date;

All obligations and liabilities of Seller relating to contributions to Astec's
401K retirement plan with respect to any employee of Seller for 11/01/99 to
6/30/04;

All claims or potential claims against Seller arising out of or relating to
Superior or the ownership or operation of Superior by Seller which were actually
known to Seller but not disclosed to Buyer prior to the Closing Date; and

All obligations and liabilities, if any, of Seller relating to the Astec
Employee Bonus Plan.

Section 2.5 Sales, Use and Deed Taxes.

Except as otherwise provided herein, Buyer shall be responsible for payment of
any sales, use or deed taxes assessable with respect to the transfer of the
Purchased Assets contemplated herein.

Section 2.6 Purchase and Sale of Premises.

Upon the terms and subject to the conditions of this Agreement, Buyer and Seller
agree that Seller shall transfer, sell and assign the Premises to Buyer.

Section 2.7 Retention of Second Quarter 2004 Profit by Seller.

The parties agree that the account balance of Advances to Corporate as of March
31, 2004 is $9,287,848, and shall be subject to the adjustments described below.
The adjustments to the account balance of Advances to Corporate for the period
of March 31, 2004 through and including June 30, 2004 will be reconciled by the
parties to Seller's pre-tax earnings for the second calendar quarter ending June
30, 2004. The March 31, 2004 balance in shareholder's equity was $23,319,928 and
the March 31, 2004 balance in Advances to Corporate was $9,287,848. Seller's
pre-tax income from March 31, 2004 to June 30, 2004 will be compared to the
change in Advances to Corporate from March 31, 2004 to June 30, 2004. If the
increase in Advances to Corporate exceeds Seller's pre-tax income for the
quarter ended June 30, 2004, Seller will owe Buyer such difference. If the
increase in Advances to Corporate is less than Seller's pre-tax income for the
quarter ended June 30, 2004, Buyer will owe Seller such difference. By August
31, 2004, a reconciliation (true-up) of the audited or reviewed June 30, 2004
financial statements (the "Closing Date Financial Statements") to the March 31,
2004 financial statements shall be made and the difference shall be paid within
thirty (30) days by the Buyer or the Seller to the other party ("Final
Reconciliation"). The Closing Date Financial Statements will be prepared in
accordance with GAAP and Astec's standard operating procedures. The Closing Date
Financial Statements shall be reviewed by Astec's Corporate Staff and Ernst &
Young auditors as required and by Buyer's auditors if desired by Buyer. The
balance sheet accounts and other financial information shall be analyzed and
detailed contents reconciled to the general ledger as of June 30, 2004 in
accordance with the "client assistance package" provided by Ernst & Young, which
is attached as Exhibit 2.7. Such client assistance package shall be completed by
Seller's accounting personnel on or before August 2, 2004 and submitted to
Astec's Chief Financial Officer. If the Closing Date is delayed for any reason,
the dates set forth above shall be adjusted accordingly.

 

ARTICLE III : PURCHASE PRICE AND PAYMENT

Section 3.1 Purchase Price.

The total purchase price shall consist of a base purchase price and the Net
Transactional Income Tax (collectively, "Purchase Price"):

For the purpose of defining the Purchase Price, the following definitions shall
control:

"Base Purchase Price" shall mean the sum of Twenty Three Million and no/100ths
Dollars ($23,000,000.00), together with the balance of liabilities assumed in
Section 2.3;

"Transactional Income Tax" shall mean the sum of all federal and state income
tax payable by Seller and Astec as a result of the consummation of the
transaction contemplated by this Agreement (with this transaction consummated as
an "asset" as opposed to a "stock" transaction), which amount shall not exceed
Three Million Three Hundred Sixty Seven Thousand Seven Hundred Three and no/100
Dollars ($3,367,703.00). The amount of Three Million Three Hundred Sixty Seven
Thousand Seven Hundred Three and no/100 Dollars ($3,367,703.00) will be divided
equally between Buyer and Seller and shall then be reduced by a number resulting
from the following formula: the excess of Seller's actual pre-tax earnings over
its forecasted pre-tax earnings for the period of March 31, 2004 through and
including June 30, 2004 multiplied by a factor of .60 (tax effected) and the
result of application of the formula will then be referred to as the "Net
Transactional Income Tax". For purposes of illustration, if the Seller's pre-tax
earnings are $1,400,000 for the applicable period, the calculation would be as
follows:

$3,367,703 Estimated Tax to convert this transaction to an asset sale

divided by 2, 50/50 division between Seller/Buyer

$1,683,851

- 318,000 [Est. $1,400,000 - Forecast $870,000 = Pre-Tax $530,000

x Tax Effect 60%]

Credit for after tax earnings in excess of 2nd Qtr. forecast

$1,365,851 Net Transactional Income Tax

The Purchase Price shall be the sum of the Base Purchase Price and the Net
Transactional Income Tax, subject to adjustment, upon final audit or review as
provided for in Section 3.1 (a)(ii) above on or before August 31, 2004.

Cash in the amount of Twenty Four Million and no/100 Dollars ($24,000,000.00)
shall be payable by Buyer to Seller in collected funds at Closing. The
calculation of the Purchase Price will be finalized upon completion of an audit
as described in Section 3.1 (a)(ii) above.

At Closing, Seller shall provide Buyer with a credit of Fifteen Thousand and
no/100 Dollars ($15,000.00) against the Purchase Price as Seller's contribution
towards the cost of the issuance of a commitment for title insurance on the
Premises and the state deed tax required for the transfer the Premises. Buyer
shall assume the remaining cost of the issuance of a commitment for title
insurance on the Premises and the remaining state deed tax required for the
transfer of the Premises.

Section 3.2 Payment of Purchase Price.

The Purchase Price shall be paid as follows:

Payment at Closing. Buyer shall deliver to Seller the sum of Twenty-four Million
and no/100 Dollars ($24,000,000.00) of the Purchase Price at the Closing by wire
transfer to a bank account designated by Seller. The balance of the Purchase
Price, if any, shall be paid in accordance with Section 3.2(b) hereafter.

Payment of the Balance of the Purchase Price

. The balance of the Purchase Price shall be paid by Buyer to Seller by wire
transfer to a bank account designated by Seller within thirty (30) days of the
completion of the Final Reconciliation.

Section 3.3 Allocation of Purchase Price.

The Purchase Price shall be allocated by the parties in accordance with Exhibit
3.3 attached hereto.

Section 3.4 Closing; Delivery and Payment.

The closing of the sale and purchase of the Assets and the Premises contemplated
herein (the "Closing") shall take place at the offices of Mansfield, Tanick &
Cohen, P.A., 1700 Pillsbury Center South, 220 South Sixth Street, Minneapolis,
Minnesota 55402-4511 at 10:00 a.m. CST on June 30, 2004, or at such other time
or place as is mutually agreed to by the parties hereto. The Closing shall be
facilitated by a pre-closing held on or before June 29, 2004.

ARTICLE IV : REPRESENTATIONS AND WARRANTIES OF SELLER AND ASTEC

Seller and Astec jointly and severally represent and warrant to Buyer as
follows:

Section 4.1 Organization and Authority of Seller.

Seller is duly formed and validly existing as a corporation under the laws of
the State of Minnesota. Seller has all necessary corporate power, capacity and
authority to execute, deliver and perform this Agreement. This Agreement has
been duly authorized by all requisite corporate action on the part of Seller,
executed and delivered by Seller and constitutes the valid and binding
obligation of Seller, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws affecting creditors' rights
generally and by general principles of equity. Neither the execution and
delivery by Seller of this Agreement nor consummation of the transactions
contemplated hereby will violate any provision of the articles of incorporation
or bylaws of Seller; or any contract provision, license, franchise or permit to
which Seller is a party or by which it is bound; or any law, statute or
regulation or any injunction, order or decree of any government agency or
authority or court to which Seller is subject except to the extent, in each
case, that such a violation would not prohibit or materially impair Seller's
ability to perform its obligations under this Agreement.

Section 4.2 Financial Statements.

Astec has heretofore furnished to Buyer copies of the following financial
statements: unaudited balance sheets of Seller as of December 31 in each of the
years 1999 through 2003, and the related unaudited statements of income, changes
in stockholders' equity, and cash flow for each of the fiscal years then ended,
and an unaudited balance sheet of Seller as of April 30, 2004 and the related
unaudited statements of income, changes in stockholders' equity, and cash flow
for the four (4) months then ended (the "Interim Financial Statements"; with all
of those items referred to above collectively referred to as the "Financial
Statements"). The Financial Statements represent actual, bona fide transactions
and have been prepared in conformity with GAAP applied on a consistent basis
(except for changes, if any, required by GAAP and disclosed therein) and in
accordance with Astec's standard operating procedures, and the results of
operations, changes in stockholders' equity and cash flows of Seller for such
periods are consistent with the books and records of Seller. Such Financial
Statements fairly present in all material respects the financial position of
Seller as at the respective date thereof and the results of operations and cash
flows of Seller for the periods then ended.

Section 4.3 Litigation.

Except as set forth in Schedule 4.3, there are no actions, suits, proceedings or
investigations pending or, to the best of Seller's or Astec's knowledge, overtly
threatened against Seller at law, in equity or otherwise in, before, or by, any
court or governmental agency or authority which individually or in the aggregate
would reasonably be expected to have a Material Adverse Effect.

Section 4.4 Consents and Approvals.

Except as set forth in Schedule 4.4, the execution, delivery and performance of
this Agreement by Seller or Astec will not require any consent, waiver,
authorization or approval of, or the making of any filing with or giving of
notice to, any person, entity or governmental authority except for such
consents, waivers, authorizations or approvals which if not obtained would not
reasonably be expected to have a Material Adverse Effect.

Section 4.5 Tax Matters.

(i) Astec has provided a true and complete copy of Seller's federal and state
income tax returns filed for the period ending December 31, 2002. (ii) The
income tax returns for the period ending December 31, 2003 have been properly
extended and will be filed within the extension period. (iii) Except as set
forth in Schedule 4.5, all federal and state income Tax Returns that are
required to be filed on or before the Closing Date by or with respect to Seller
have been filed, all Taxes shown to be due on the Tax Returns referred to in
clauses (i) and (ii) have been or will be paid in full, any deficiencies
asserted or assessments made as a result of any examinations of the Tax Returns
referred to in clauses (i) and (ii) by the IRS or the relevant state, local or
foreign taxing authority have been or will be paid in full, no issues that have
been raised by the relevant taxing authority in connection with any such
examination of any of the Tax Returns referred to in clause (i) are currently
pending, and no waivers of statutes of limitations have been given or requested
by or with respect to any federal or state income Taxes of Seller.

Section 4.6 Benefit Plans.

a. Schedule 4.6(a) lists each "employee benefit pension plan", as such term is
defined in Section 3(2) of ERISA (a "Pension Plan"), and each "employee welfare
benefit plan", as such term is defined in Section 3(1) of ERISA (together with
the Pension Plans, the "Benefit Plans"), which is maintained by Astec and
contributed to by Seller for the benefit of employees of Seller and which is
subject to ERISA. Each Benefit Plan has been from its inception and remains in
compliance in all material respects with such Plan's terms and, where
applicable, with ERISA and the Code.

b. Except as set forth in Schedule 4.6(b), to the knowledge of Astec, Seller has
no incentive compensation, bonus, deferred compensation, stock option, stock
ownership, stock bonus, stock purchase, savings, retirement, pension,
profit-sharing, severance or other similar plan or arrangement with or for the
benefit of any officer or employee.

c. Each Pension Plan that is intended to be qualified under Section 401(a) of
the Code has received a favorable determination letter from the IRS that it is a
qualified plan for purposes of Section 401(a) of the Code, and there has been no
amendment to any Pension Plan subsequent to the determination letter which would
reasonably be expected to materially adversely affect such Plan's qualified
status. .

d. Since November 1, 1999, all contributions required to be made to any Benefit
Plan have been timely made or reflected in the Financial Statements in all
material respects. No Pension Plan has an "accumulated funding deficiency", as
such term is defined in Section 302 of ERISA and Section 412 of the Code
(whether or not waived).

e. Since November 1, 1999, Seller has not incurred any liability to the Pension
Benefit Guaranty Corporation under Title IV of ERISA, other than for the payment
of premiums, if any, all of which have been paid when due.

f. Since November 1, 1999, Seller has never contributed or been required to
contribute to any "multiemployer plan", as such term is defined in Section 3(37)
of ERISA.

g. Since November 1, 1999, Seller has not engaged in any "prohibited
transaction", as such term is defined in Section 4975 of the Code, or a
transaction prohibited by Section 406 of ERISA, for which a statutory or
administrative exemption is not available and that would result in a material
tax or a material penalty under Section 4975 of the Code or Section 502(i) of
ERISA.

Section 4.7 Brokers and Finders.

Astec has not employed any broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement who would be
entitled to a broker's, finder's or similar fee or commission in connection
therewith or upon the consummation thereof.

Section 4.8 Insurance.

As of the Closing the following information will have been provided by Astec
with respect to each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which Seller has to Astec's knowledge been a party, a named
insured, or otherwise the beneficiary of coverage at any time within the past
three (3) years:

a. the name, address, and telephone number of the agent;

b. the name of the insurer, the name of the policyholder, and the name of each
covered insured;

c. the policy number and the period of coverage;

d. the scope (including an indication of whether the coverage was on a claims
made, occurrence, or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage; and

e. description of any retroactive premium adjustments or other loss sharing
arrangements.

At Buyer's request, Astec shall provide a certificate of such coverage issued by
McGriff, Seibels & Williams.

Section 4.9 Completeness of Statements; Effect of Representations and
Warranties.

To the best of Astec's knowledge, no representation or warranty of Seller and
Astec in the Agreement contains any untrue statement of a material fact, omits
any material fact necessary to make such representation or warranty, under the
circumstances which it was made, not misleading, or contains any misstatement of
a material fact. Seller and Astec have made due inquiry and investigation
concerning the matters to which the representations and warranties of Seller and
Astec under this Agreement pertains and Seller and Astec do not know of any
facts, events or circumstances which have not been disclosed to Buyer which are
material to Seller or its Business.

Section 4.10 Real Property.

Attached as Exhibit 4.10 is a commitment for title insurance issued by Chicago
Title Insurance Company which describes the premises owned by Seller. The
Premises will be conveyed by Seller to Buyer according to the terms of such
title insurance commitment and subject to the encumbrances listed therein except
that the encumbrances reflecting obligations to General Electric Capital
Corporation shall have been removed at Closing. With respect to the Premises:

Seller shall pay the cost of recording any documents necessary to clear any
objections to marketable title for the Premises.

Seller shall pay one-half of the cost incurred with the title company for the
purposes of the Closing and transferring the Premises to Buyer. Buyer shall pay
one-half of the cost incurred with the title company for the purposes of the
Closing and transferring the Premises to Buyer.

At Closing, Seller shall provide Buyer with a credit of Fifteen Thousand and no/
100 Dollars ($15,000.00) against the Purchase Price as Seller's contribution
towards the cost of the issuance of a commitment for title insurance and the
state deed tax required for the transfer of any real property which may be the
subject of this transaction.

ARTICLE V : REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller and Astec as follows:

Section 5.1 Organization and Authority of Buyer.

Buyer has been duly organized and is validly existing under the laws of
Minnesota, with the limited liability power and authority to enter into this
Agreement and perform its obligations hereunder. This Agreement has been duly
authorized, executed and delivered by Buyer and constitutes a legal, valid and
binding obligation of Buyer, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws affecting creditors' rights
generally and to general principles of equity. No other proceedings on the part
of Buyer are necessary to authorize this Agreement and the consummation of
transactions contemplated hereby. Neither the execution and delivery of this
Agreement nor compliance by Buyer with its terms and provisions will violate:
(a) any provision of the operating agreement or member control agreement of
Buyer; or (b) any contract provision, license, franchise or permit to which
Buyer is a party or by which it is bound; or (c) any law, statute or regulation
or any injunction, order or decree of any government agency or authority or
court to which Buyer is subject except to the extent, in each case, that such a
violation would not have a Material Adverse Effect.

Section 5.2 Brokers and Finders.

Buyer has not employed any broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement who would be
entitled to a broker's, finder's or similar fee or commission in connection
therewith or upon the consummation thereof.

Section 5.3 Legal Proceedings.

There are no actions, suits, proceedings or investigations pending or, to
Buyer's knowledge, overtly threatened against Buyer at law, in equity or
otherwise in, before, or by, any court or governmental agency or authority which
individually or in the aggregate would reasonably be expected to have a Material
Adverse Effect.

Section 5.4 Consents and Approvals.

Except as set forth in Schedule 5.4, the execution, delivery and performance of
this Agreement by Buyer will not require any consent, waiver, authorization or
approval of, or the making of any filing with or giving of notice to, any
Person, entity or governmental authority, except for such consent, waivers,
authorizations or approvals which the failure to obtain would not have a
Material Adverse Effect.

ARTICLE VI : TAX MATTERS

Section 6.1 Tax Indemnification.

Except to the extent disclosed on Schedule 4.5, or as otherwise provided for in
the Financial Statements, Seller shall be liable for, indemnify and hold the
Buyer harmless against any federal or state Taxes imposed on Seller, the Assets
or the Premises for any taxable year or period after October 31, 1999 (or
portion thereof) that ends on or before the Closing Date.

Buyer shall be liable for, indemnify and hold Seller harmless against, any Taxes
imposed on the Assets or the Premises that are allocable or attributable to any
taxable year or period that begins after the Closing Date. Buyer shall be
entitled to any refund of such Taxes that are allocable to such periods.

Section 6.2 Tax Returns.

Tax Returns that are required to be filed by or with respect to Seller shall be
filed as follows:

a. Seller shall file or cause to be filed when due (taking into account
extensions) all Tax Returns that are required to be filed by or with respect to
Seller, the Assets and the Premises for taxable years or periods ending on or
before the Closing Date. Except as otherwise agreed, such Tax Returns shall be
completed in a manner consistent with past practice.

b. Buyer shall file or cause to be filed when due (taking into account
extensions) all Tax Returns that are required to be filed by or with respect to
the Assets and the Premises for taxable years or periods ending after the
Closing Date. Except as otherwise agreed, such Tax Returns shall be completed in
a manner consistent with past practice.

Section 6.3 Contest Provisions.

Buyer shall promptly notify Astec in writing upon receipt by Buyer, Seller or
any of their respective Affiliates of notice of any pending or threatened
federal, state, local or foreign audits or assessments which may materially
affect the liabilities for Taxes of Seller for which Seller would be required to
indemnify Buyer pursuant to Section 6.1; provided that failure to comply with
this provision shall not affect Buyer's right to indemnification hereunder
except to the extent Seller is prejudiced by such failure. Astec shall have the
sole right to represent the interests of Seller in any such audit or
administrative or court proceeding relating to taxable periods for which they
may be required to indemnify Buyer pursuant to Section 6.1, and to employ
counsel of their choice at their expense. Neither Buyer nor Seller may agree to
settle any such claim for the portion of a taxable year or period which may be
the subject of indemnification by Seller under Section 6.1 without the prior
written consent of Astec, which consent shall not be unreasonably withheld.

Section 6.4 Assistance and Cooperation.

After the Closing Date, each of Seller and Buyer shall:

a. assist (and cause their respective affiliates to assist) the other party in
preparing any Tax Returns which such other party is responsible for preparing
and filing, including all necessary tax information through the Closing Date;

b. cooperate fully in preparing for any audits of, or disputes with taxing
authorities regarding, any Tax Returns of Seller, and in the collection of
reimbursement owed by customers or other third parties for Taxes paid by either
Astec, Seller or Buyer;

c. make available to the other and to any taxing authority as reasonably
requested all information, records, and documents relating to Taxes of Seller;

d. provide timely notice to the other in writing of any pending or threatened
tax audits or assessments of Seller for taxable periods for which the other may
have a liability under Section 6.1; and

e. furnish the other with copies of all correspondence received from any taxing
authority in connection with any tax audit or information request with respect
to any such taxable period.

Section 6.5 Survival of Obligations.

The obligations of the parties set forth in this Article 6 shall remain in
effect until the expiration of the applicable statute of limitations (including
any waivers thereof).

ARTICLE VII : CERTAIN COVENANTS AND AGREEMENTS OF SELLER

Section 7.1 Access and Information.

Seller shall permit Buyer and its representatives after the date of execution of
this Agreement to have reasonable access, during regular business hours and upon
reasonable advance notice, to any financial and operating data and other
information that is available with respect to the business and Assets of Seller
and the Premises as Buyer shall from time to time reasonably request. In the
event of the termination of this Agreement, Buyer shall promptly deliver
(without retaining any copies thereof) to all applicable parties, or (at such
parties' option) certify to such parties that it has destroyed, all documents,
workpapers and other material obtained by Buyer or on its behalf from Seller or
from any of their respective advisors, agents, employees or representatives as a
result hereof or in connection with the matters contemplated by this Agreement,
and all documents, workpapers and other materials prepared by Buyer or its
advisors, agents, employees or representatives in connection with the matters
contemplated by this Agreement, in each case whether so obtained or prepared
before or after the execution hereof. Buyer shall at all times prior to the
Closing Date, and in the event of termination of this Agreement, cause any
information so obtained or prepared to be kept confidential and will not use, or
permit the use of, such documents, workpapers and other materials in its
business or in any other manner or for any other purpose except as contemplated
hereby.

Section 7.2 Registrations, Filings and Consents.

Prior to the Closing, Seller, Astec and Buyer shall cooperate and use their
respective best efforts to make all registrations, filings and applications, to
give all notices and to obtain any governmental or other consents, transfers,
approvals, orders, qualifications and waivers necessary or desirable for the
consummation of the transactions contemplated hereby.

Section 7.3 Conduct of Business.

Prior to the Closing, and except as otherwise contemplated by this Agreement or
consented to or approved by Buyer, Seller shall cause its officers and managers:

a. To operate the Business of Seller in the ordinary course consistent with past
practices and to use its commercially reasonable best efforts to preserve the
business and goodwill of customers and suppliers;

b. Not to change or amend its articles or certificates of incorporation or
bylaws, issue, sell or redeem any shares of its capital stock, or issue or sell
any securities convertible into, or options with respect to, or warrants to
purchase or rights to subscribe to, any shares of its capital stock or enter
into any agreement obligating it to do any of the foregoing, enter into any
amendment of any Material Contract which materially adversely affects the rights
of Seller thereunder or enter into any new, or make any amendment to any
existing, collective bargaining agreement or Benefit Plan which materially
adversely affects the rights of Seller thereunder, except as required by law, in
which case Seller shall give prompt notice to Buyer; and

c. Not to make, or enter into any agreement to make, any acquisition or sale of
property or assets (tangible or intangible) other than in the ordinary course of
business consistent with past practices.

Section 7.4 Best Efforts.

Prior to Closing, each of the parties hereto shall use its commercially
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
to Closing, including, without limitation, the execution and delivery of all
agreements or other documents contemplated hereunder to be so executed and
delivered.

Section 7.5 Retention of Books and Records.

After the Closing Date, Buyer shall retain all books, records and other
documents pertaining to Seller in existence on the Closing Date and make the
same available after the Closing Date for inspection and copying by Astec or its
agents at its expense, upon reasonable request and upon reasonable notice, for a
period of seven (7) years after the Closing Date. No such books, records or
documents of Seller shall be destroyed by Buyer without first advising Astec in
writing and giving Astec a reasonable opportunity to obtain possession of at
least a copy thereof.

Section 7.6 Further Assurances.

At any time after the Closing Date, Seller, Astec and Buyer shall promptly
execute, acknowledge and deliver any other assurances or documents reasonably
requested by any other party and necessary for such other party to satisfy its
obligations hereunder.

ARTICLE VIII : CONDITIONS TO THE PURCHASE AND SALE

Section 8.1 General Conditions to the Purchase and Sale Relating to Parties.

The obligations of the parties to consummate the sale and purchase of the Assets
and the Premises at the Closing as contemplated by this Agreement shall be
subject to the satisfaction or waiver by the parties on or prior to the Closing
Date of the following conditions:

a. No action or proceeding shall have been instituted and remain pending on the
Closing Date before any court or governmental body or authority pertaining to
the acquisition by Buyer of the Assets, or the result of which could prevent or
make illegal the consummation of such acquisition.

b. Any required consents of third parties disclosed on Schedule 4.7, Schedule
5.4 and Section 7.2 hereto shall have been obtained.

c. For a period of one (1) year from Closing, Buyer shall be provided primary
supplier status by Astec and its subsidiaries for component products to be sold
at a fixed price, which price may be adjusted only for raw material costs.

d. At or following Closing, Astec and Buyer shall enter into an agreement which
shall allow Astec's subsidiary, Telsmith, to sell, under its name, stationary
system conveyors produced by Buyer. Astec and Buyer agree to use their good
faith best efforts to negotiate the terms and conditions of this agreement,
including pricing.

e. From and after Closing, through December 31, 2004, Buyer shall continue to
service Astec's intellectual property licensing companies in return for the
management fee and rent currently being paid by Astec to Seller, the details of
which and copies thereof shall be provided on Schedule 8.1(e).

Section 8.2 Conditions to Purchase by Buyer.

The obligation of Buyer to consummate the purchase of the Assets and the
Premises at the Closing as contemplated by this Agreement shall be subject to
the satisfaction or waiver by Buyer on or prior to the Closing Date of each of
the following conditions:

 

(i) Each of the representations and warranties of Astec and Seller contained in
this Agreement shall be true in all material respects when made and as of the
Closing Date, with the same effect as though such representations and warranties
had been made on and as of the Closing Date (except representations and
warranties that are made as of a specific date need be true in all material
respects only as of such date); (ii) each of the covenants and agreements of
Astec and Seller in this Agreement to be performed on or prior to the Closing
Date shall have been duly performed in all material respects; (iii) Buyer shall
have received at the Closing a certificate of a duly authorized officer of Astec
and Seller as to the satisfaction of the conditions set forth in clause (i) and
clause (ii) of this Section 8.2(a), dated as of the Closing Date.

During the period from the date hereof to the Closing Date, no event or
condition shall have occurred which results in a Material Adverse Effect.

Buyer shall have had delivered to it a warranty deed conveying to Buyer good and
marketable fee simple title to the Premises effective as of the Closing Date in
form reasonably acceptable to Buyer.

At least ten (10) days prior to the Closing Date, Buyer shall have had delivered
to it a real estate title abstract or a commitment for an owner's title
insurance policy in an amount acceptable to the Buyer issued by a title
insurance company acceptable to Buyer covering the Premises and containing only
exceptions which would not adversely affect the use or marketability of the
Premises.

Buyer shall have received a certified copy of resolutions of the board of
directors of Seller approving the transaction set forth in and execution of this
Agreement.

Buyer shall have received a certified copy of resolutions of the board of
directors of Astec approving the transactions set forth in and execution of this
Agreement.

Buyer shall have received financing for the Purchase Price on terms and
conditions satisfactory to Buyer, in its sole discretion.

Buyer shall have received notices of termination and release of all employment
contracts and non-compete agreements for employees of Seller.

Buyer shall have received a release from a lien held in favor of G.E. Capital on
the Assets and the Premises;

Buyer shall have received an opinion from legal counsel of Seller in form and
substance satisfactory to the Buyer and its counsel.

Buyer shall have received such other documents as may be reasonably necessary to
effect the Closing as anticipated in this Agreement.

Section 8.3 Conditions to Sale by Seller.

The obligation of Seller to consummate the sale of the Assets and the Premises
at the Closing as contemplated by this Agreement shall be subject to the
satisfaction or waiver by Seller on or prior to the Closing Date of each of the
following conditions:

a. (i) Each of the representations and warranties of Buyer contained in this
Agreement shall be true in all material respects when made and as of the Closing
Date, with the same effect as though such representations and warranties had
been made on and as of the Closing Date (except representations and warranties
that are made as of a specific date need be true in all material respects only
as of such date); (ii) each of the covenants and agreements of Buyer in this
Agreement to be performed on or prior to the Closing Date shall have been duly
performed in all material respects; and (iii) Seller shall have received at the
Closing a certificate of a duly authorized officer of Buyer as to the
satisfaction of the conditions set forth in clause (i) and clause (ii) of this
Section 8.3, dated as of the Closing Date.

b. Buyer and Astec or its designee shall have entered into a License Agreement
for the intellectual properties involving the FDAA allowing Kolberg-Pioneer,
Inc. ("KPI") the licensed use of the intellectual property for a royalty of One
Thousand and no/100 Dollars ($1,000.00) per axle. This license would be
nontransferable and would be limited to application for axles intended for the
use on KPI conveyors.

c. Buyer and Astec or its designee shall have entered into a License Agreement
for future patents issued for link conveyor technology obligating that they be
shared.

d. Seller shall have received certified copies of resolutions of the board of
governors of Buyer approving the transaction set forth in and executed for this
Agreement.

e. Seller shall have received payment of the Purchase Price by wire transfer of
immediately available funds to accounts designated by Seller prior to Closing.

f. Seller shall have received an opinion from legal counsel to Buyer in form and
substance satisfactory to Seller and their counsel.

g. Seller shall have received approval and release from G.E. Capital, as may be
necessary pursuant to a loan agreement and related documents, of Seller's Assets
and Premises.

h. Seller shall have received such other documents as may be reasonably
necessary to effect the Closing as anticipated in this Agreement.

ARTICLE IX : INDEMNIFICATION

Section 9.1 Survival; Rights and Remedies Not Affected by Knowledge.

The representations and warranties in this Agreement, the Schedules, any
supplements to the Schedules, any other certificate or document delivered
pursuant to this Agreement and any other Closing Document will survive the
Closing. The rights to indemnification and payment of Damages and all other
rights or remedies provided herein, including those relating to any
representations, warranties, covenants and obligations, will not be affected by
any investigation conducted with respect to, or any knowledge acquired at any
time, whether before or after the execution and delivery of this Agreement or
the Closing Date, with respect to the accuracy or inaccuracy of or compliance
with, any such representation, warranty, covenant or obligation. The waiver of
any condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants and obligations.

Section 9.2 Indemnification and Payment of Damages By Astec.

Astec shall indemnify and hold Buyer and its officers, directors, governors,
members, managers, Affiliates, successors and assigns ("Buyer Indemnitees")
harmless for, and shall pay to the Buyer Indemnitees the amount, to the extent
not covered by insurance, of all Damages arising, directly or indirectly, from
or in connection with:

a. any breach or nonfulfillment of or failure to comply with in any respect
("Breach") any representation or warranty made by Astec or Seller;

b. any Breach by Seller of any covenant, agreement or obligation of Seller and
Astec;

c. any Damages arising out of the ownership, use or conduct of the Business or
operations of Seller on or prior to the Closing Date or any act, omission,
transaction, circumstance, fact, agreement, or other condition relating to
Seller, any of which were known to Astec and existed on or prior to the Closing
Date but was not fully and properly disclosed to Buyer in the Financial
Statements, the Schedules, the Exhibits or any other part of the Agreement.

Section 9.3 Indemnification By Buyer.

Buyer shall indemnify and hold Astec, Seller and their successors and assigns
("Seller Indemnitees") harmless for, and will pay to the Seller Indemnitees the
amount of, all Damages, to the extent not covered by insurance, arising directly
or indirectly from or in connection with:

a. any Breach of any representation or warranty made by Buyer;

b. any Breach by Buyer of any covenant, agreement or obligation of the Buyer;

c. any Damages arising out of the ownership, use or conduct of the Business or
operations of the Assets and the Premises after the Closing Date or any act,
omission, transaction, circumstance, fact, agreement, or other condition
relating to Seller which exists after the Closing Date.

Section 9.4 Indemnity Claims.

a. Claims. In the event that any claim ("Claim") is hereafter asserted by a
party hereto as to which such party may be entitled to indemnification
hereunder, such party ("Indemnitee") shall notify the party required by the
terms of this Agreement to indemnify the Indemnitee ("Indemnifying Party")
thereof ("Claim Notice") within 30 days after (1) receipt of notice of
commencement of any third-party litigation against such Indemnitee, (2) receipt
by such Indemnitee of written notice of any third-party claim pursuant to an
invoice, notice of claim or assessment, against such Indemnitee, or (3) such
Indemnitee becomes aware of the existence of any other event in respect of which
indemnification may be sought from the Indemnifying Party. The Claim Notice
shall describe the Claim and the specific facts and circumstances in reasonable
detail, shall include a copy of the Notice referred to in (1) and (2), above,
shall indicate the amount, if known, or an estimate, if possible, of Damages
that have been or may be incurred or suffered.

b. Defense of Third Party Claim by Indemnifying Party. The Indemnifying Party
may elect to defend or compromise any Claim by a third party ("Third Party
Claim"), at its or his own expense and by its or his own counsel, who shall be
reasonably acceptable to the Indemnitee. The election by the Indemnifying Party
to defend or compromise a claim shall constitute an avowal by the Indemnifying
Party that the Indemnifying Party is obligated to indemnify the Indemnitee with
respect to such claim. The Indemnitee may participate, at its or his own
expense, in the defense of any Claim assumed by the Indemnifying Party. Without
the approval of the Indemnitee, which approval shall not be unreasonably
withheld or delayed, the Indemnifying Party shall not agree to any compromise of
a Claim defended by the Indemnifying Party which would require the Indemnitee to
perform or take any action or to refrain from performing or taking any action.

c. Assumption of Defense by Indemnitee. Notwithstanding the foregoing, if an
Indemnitee determines in good faith that there is a reasonable probability that
a proceeding may adversely affect it or its Affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the Indemnitee may, by notice to the Indemnifying Party, assume the
exclusive right to defend, compromise, or settle such proceeding, but the
Indemnifying Party will not be bound by any determination of a proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld or delayed).

d. Defense of Claim by Indemnitee. If, within thirty (30) days of the
Indemnifying Party's receipt of a Claim Notice involving a Third Party Claim,
the Indemnifying Party shall not have notified the Indemnitee of its or his
election to assume the defense, the Indemnitee shall have the right to assume
control of the defense or compromise of such Claim, and the costs and expenses
of such defense, including costs of investigation and reasonable attorneys'
fees, shall be added to the Claim. The Indemnitee shall have the right to
compromise such Claim without the consent of the Indemnifying Party.

e. Cooperation of Parties. The party assuming the defense of any Claim shall
keep the other party reasonably informed at all times of the progress and
development of the party's defense of and compromise efforts with respect to
such Claim and shall furnish the other party with copies of all relevant
pleading, correspondence and other papers. In addition, the parties to this
Agreement shall cooperate with each other, and make available to each other and
their representatives all available relevant records or other materials required
by them for their use in defending, compromising or contesting any Claim. The
failure to timely notify the Indemnifying Party of the commencement of such
actions in accordance with Section 9.4(a) shall relieve the Indemnifying Party
from the obligation to indemnify but only to the extent the Indemnifying Party
establishes by competent evidence that it is has been materially and adversely
prejudiced thereby.

ARTICLE X : TERMINATION

Section 10.1 Termination.

a. Notwithstanding anything herein to the contrary, this Agreement shall
terminate if the Closing does not occur on or before June 30, 2004, unless
extended by mutual written agreement of the parties to this Agreement.

b. This Agreement may be terminated (i) by the mutual written consent of the
parties to this Agreement, (ii) (a) by Buyer, if there has been a material
misrepresentation or other material breach by Seller or Astec of any of their
representations, warranties, covenants and agreements set forth herein and there
shall not have occurred and be continuing a breach or violation by Seller or
Astec, in any material respect, of any of its representations, warranties,
covenants and agreements set forth herein and (b) by Seller if there has been a
material misrepresentation or other material breach by Buyer of any of its
representations, warranties, covenants and agreements set forth herein and there
shall not have occurred and be continuing a breach or violation by Buyer, in any
material respect, of any of their representations, warranties, covenants and
agreements set forth herein; provided, however, that if the breach by the
non-terminating party is susceptible to cure, such party shall have thirty (30)
business days after receipt of written notice from the other party of its
intention to terminate this Agreement or June 30, 2004, whichever is earlier, in
which to cure such breach, and (iii) any party hereto, on or after June 30,
2004, by written notice to the other parties, if (a) the Closing shall then not
have occurred for any reason other than the breach or violation by the notifying
party, in any material respect, of any of its representations, warranties,
covenants and agreements set forth in this Agreement and (b) there shall not
have occurred and be continuing a breach or violation by the notifying party, in
any material respect, of any of such representations, warranties, covenants and
agreements.

c. If this Agreement is terminated pursuant to Section 10.1, this Agreement,
other than with respect to the obligations under Sections 7.1, 11.1 and 11.3
hereof, shall thereafter have no effect, except that termination of this
Agreement will not relieve either party of any liability for breach of any
covenants or agreements set forth herein occurring prior to such termination.

ARTICLE XI : MISCELLANEOUS

Section 11.1 Expenses.

Unless otherwise indicated, the parties shall bear their own respective expenses
(including, but not limited to, all compensation and expenses of counsel,
financial advisors, consultants, actuaries and independent accountants) incurred
in connection with the preparation and execution of this Agreement and
consummation of the transactions contemplated hereby.

Section 11.2 Best Efforts; Further Assurances.

a. Commitment to Best Efforts. Subject to the rights of the parties under
Section 10.1, (i) each party hereto shall use its best efforts to cause all
conditions to its obligations hereunder to be timely satisfied and to perform
and fulfill all obligations on its part to be performed and fulfilled under this
Agreement, to the end that the transactions contemplated by this Agreement shall
be effected substantially in accordance with its terms as soon as reasonably
practicable, (ii) each party shall cooperate with the other parties in such
actions and in securing requisite consents and (iii) each party shall execute
and deliver such further documents and take such other actions as may be
necessary or appropriate to consummate or implement the transactions
contemplated hereby or to evidence such events or matters.

b. Limitation. As used in this Agreement, the term "best efforts" shall not mean
efforts which require the performing party to do any act that is commercially
unreasonable under the circumstances, to make any capital contribution or to
expend any funds other than in payment of reasonable out-of-pocket expenses
incurred in satisfying obligations hereunder, including but not limited to the
fees, expenses and disbursements of its accountants, counsel and other
professional advisors.

c. Exclusive Dealing. Until the Closing Date or the earlier termination of this
Agreement, Astec will not, nor will it permit any officers, directors, employees
or other advisors or representatives to (i) solicit, initiate or encourage
submission of any proposal to purchase the Assets, the Premises or any of
Seller's assets, other than in the ordinary course of business; or (ii) enter
into any agreement with respect to any such proposal.

Section 11.3 Public Disclosure.

Prior to the Closing Date, none of the parties will make any public release of
information regarding any matters contemplated herein without the consent of the
other parties, except for press releases issued by Astec as may be required by
law.

Section 11.4 Assignment.

This Agreement may not be assigned by either party, by operation of law or
otherwise.

Section 11.5 Amendments and Waivers.

The provisions of this Agreement may not be amended, supplemented or changed
orally, but only by writing signed by Buyer, Seller and Astec and making
specific reference to this Agreement.

Section 11.6 Entire Agreement.

This Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties, with
respect to the subject matter hereof, except as otherwise contemplated herein;
and is not intended to confer upon any other persons any rights or remedies
hereunder.

Section 11.7 Schedules.

The inclusion of any matter in any Schedule or Exhibit to this Agreement shall
be deemed to be an inclusion for all purposes of this Agreement, including each
representation to which it may relate.

Section 11.8 Notices.

All notices, requests, demands or other communications herein required or
permitted to be given shall be in writing and may be personally served,
telecopied, telexed or sent by United States mail and shall be deemed to have
given when delivered in person, upon receipt of telecopy or telex (with
confirmed answerback) or five business days after deposit in the United States
mail, registered or certified, postage prepaid and properly addressed to the
party's address as set forth on the signature pages hereof. Any party may change
the address to which notices are to be addressed by giving the other party
written notice in the manner herein set forth.

Section 11.9 Governing Law.

This Agreement shall be governed by, and construed in accordance with, the laws
of the State of Tennessee, without regard to conflicts of law principles.
However, the sale, transfer and assignment of the Premises shall be governed by
and construed in accordance with the laws and local practice of the State of
Minnesota.

Section 11.10 Severability.

In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

Section 11.11 Section Headings.

The section and paragraph headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

Section 11.12 Counterparts.

This Agreement and any amendments hereto may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be considered one and the same instrument.

Section 11.13 Representation By Counsel; Interpretation.

Each party acknowledges that such party has been represented by counsel in
connection with this Agreement and the transactions contemplated by this
Agreement. Accordingly, any rule of law, or any legal decision that would
require interpretation of any claimed ambiguities in this Agreement against the
party that drafted it has no application and is expressly waived. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
intent of the parties.

Section 11.14 Arbitration Clause.

Except for any dispute concerning the financial statements of Seller, any
dispute pertaining to this Agreement or the matters addressed herein shall be
referred to arbitration at the request of any party before a single arbitrator.
In any arbitration the parties shall be entitled to be legally represented. This
matter shall be arbitrated solely under Title 35 United States Code, as
interpreted by the United States Court of Appeals for the Federal Circuit, and
pursuant to Title 9 United States Code, the Federal Arbitration Act. The
Arbitration Rules of the Center for Public Resources, New York, New York for
Non-Administered Arbitration of Business Disputes, as they exist on the date of
this Agreement, are adopted as the rules governing this arbitration.
Interpretation and enforcement of this instrument and all of this Agreement and
all questions, issues or claims regarding the performance of the parties
hereunder shall be controlled and governed by the law of the State of Tennessee
except as otherwise specifically stated to the contrary in this Agreement. The
arbitration shall take place in Kansas City, Missouri at a mutually agreeable
site. Provided, however, that any dispute concerning the financial statements of
Seller, including the Financial Statements, the Interim Financial Statements,
and the Closing Date Financial Statements, shall be submitted for determination
to a national accounting firm, other than Ernst & Young, mutually selected by
Astec and Buyer on terms agreed by Astec and Buyer. In the event Astec and Buyer
are unable to agree on the selection of an accounting firm or the scope of the
terms of submission to such firm, an arbitrator selected by mutual agreement
between Astec and Buyer shall determine the accounting firm, the scope and the
terms of submission of such dispute.

 

Section 11.15 Confidentiality.

Buyer shall not, nor will it permit any officers, directors, employees, advisors
or representatives of Buyer to, disclose or publish any information regarding
the Business of Seller, Astec or other subsidiaries of Astec, their customers or
assets ("Information") that Buyer or any of such individuals has received or has
been privy to as an officer or employee of Seller, whether marked "confidential"
or not, to any person, firm or corporation outside of Seller, and such
Information shall remain confidential, other than to their attorneys,
accountants, tax advisors, or as may be required by either judicial or
administrative order. Buyer shall use the highest degree of care to avoid such
outside disclosure, publication, or use of such Information. The parties further
agree that any information contained in any digital, written, visual or verbal
presentation or demonstration describing the above stated Information shall be
considered proprietary and shall come under the terms of this Section 11.15.
After Closing, all Astec consolidating and consolidated financial statements
shall be returned to Astec.

[Signatures on Following Page]

IN WITNESS WHEREOF

, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective officers therein duly authorized as of the 1 day
of June, 2004.

BUYER:

SELLER:

SUPERIOR INDUSTRIES, LLC

ASTEC INDUSTRIES, INC.

By: /s/ Micah Zeltwanger

By: /s/ Albert E. Guth

Title: Secretary/Treasurer

Title: Group Vice President

ASTEC

SUPERIOR INDUSTRIES OF MORRIS, INC.

By: /s/ Albert E. Guth

Title: Secretary