EXHIBIT 10.48

 

AMENDMENT NO. 5 TO CREDIT AGREEMENT AND WAIVER

This Amendment and Waiver (this "Amendment") is entered into as of March 31,
2003, by and among Astec Industries, Inc., a Tennessee corporation ("Astec"),
Astec Financial Services, Inc., a Tennessee corporation ("AFS" and together with
Astec, the "Borrowers"), Bank One, NA, individually and as agent ("Agent"), and
the other financial institutions signatory hereto.

RECITALS

A. The Borrowers, the Agent and the Lenders are party to that certain credit
agreement, dated as of September 10, 2001 (as previously amended, the "Credit
Agreement"). Unless otherwise specified herein, capitalized terms used in this
Amendment shall have the meanings ascribed to them by the Credit Agreement.

B. The Borrowers are in discussions with General Electric Capital Corporation
concerning a credit facility (the "GE Facility") which would refinance the
Borrowers' Obligations under the Credit Agreement and the other Loan Documents.

C. The Borrowers, the Agent and the undersigned Lenders wish to amend the Credit
Agreement and waive certain provisions thereof on the terms and conditions set
forth below.

Now, therefore, in consideration of the mutual execution hereof and other good
and valuable consideration, the parties hereto agree as follows:

Amendments to Credit Agreement.

Article I of the Credit Agreement is hereby amended by inserting the following
definition therein:

"Adjusted Consolidated Net Income" means Consolidated Net Income plus (i) the
amount of the Amendment Fee (as defined therein) paid in connection with
Amendment No. 5 to this Credit Agreement (the "Fifth Amendment"), (ii) the
amount of the amendment fee paid in connection with the Fifth Amendment
Agreement and Waiver to Note Purchase Agreements, dated as of March 31, 2003, by
and among the Borrowers and the various institutions party thereto, (iii) any
recording or filing fees paid in connection with the perfection of the
Collateral Agent's security interest in the Credit Parties' real estate,
intellectual property, deposit and disbursement accounts, and other assets, (iv)
any fees paid for title insurance on the real estate described in clause (iii)
above, and (v) any fees paid by the Credit Parties for appraisals of real estate
required by the Fifth Amendment.

The definition of "Aggregate Commitment" found in Article I of the Credit
Agreement is deleted in its entirety and replaced by the following:

"Aggregate Commitment" means $60,700,000, as such amount may be increased or
reduced from time to time pursuant to the terms hereof.

The definition of "Aggregate Tranche A Sublimit" found in Article I of the
Credit Agreement is deleted in its entirety and replaced by the following:

"Aggregate Tranche A Sublimit" means $60,700,000, as such amount may be
increased pursuant to Section 2.4.2(b) or reduced from time to time pursuant to
the terms hereof; provided that $4,200,000 of the Aggregate Tranche A Sublimit
may be used only for the issuance of a Facility Letter of Credit required by
Astec's workers compensation insurance carrier.

The definition of "EBITDA" found in Article I of the Credit Agreement is amended
by inserting the word "Adjusted" after the word "period" and before the word
"Consolidated" in such definition.

The definition of "Leverage Ratio" found in Article I of the Credit Agreement is
deleted in its entirety and replaced by the following:

"Leverage Ratio" means, as at any date of determination thereof, (i) for any
date between and including April 1, 2003 and December 31, 2003, the ratio of (a)
Consolidated Funded Debt of the Credit Parties at such date minus the amount of
any cash collateral held by the Collateral Agent at such date to (b) Adjusted
EBITDA of the Credit Parties computed for the elapsed portion of Astec's Fiscal
Year and annualized, all calculated on a consolidated basis in accordance with
Agreement Accounting Principles, and (ii) for any other date, the ratio of (a)
Consolidated Funded Debt of the Credit Parties at such date minus the amount of
any cash collateral held by the Collateral Agent at such date to (b) Adjusted
EBITDA of the Credit Parties for the four (4) most recently ended fiscal
quarters, all calculated on a consolidated basis in accordance with Agreement
Accounting Principles.

Section 6.21.1 of the Credit Agreement is amended by deleting the section in its
entirety and replacing it with the following:

6.21.1 Leverage Ratio. The Borrowers will cause to be maintained a Leverage
Ratio of not more than the following on each of the following dates, measured as
of such date:

Date

Leverage Ratio

December 31, 2002

3.50 : 1.0

March 31, 2003

5.25 : 1.0

June 30, 2003

4.05 : 1.0

July 31, 2003

3.98 : 1.0

August 31, 2003

4.06 : 1.0

September 30, 2003

4.18 : 1.0

October 31, 2003

4.24 : 1.0

November 30, 2003

4.56 : 1.0

December 31, 2003

5.01 : 1.0

March 31, 2004

3.00 : 1.0

June 30, 2004

3.00 : 1.0

Section 6.21.4 of the Credit Agreement is amended by deleting the section in its
entirety and replacing it with the following:

6.21.4 Fixed Charge Coverage Ratio. The Borrowers will cause to be maintained on
each date below, a ratio (the "Fixed Charge Coverage Ratio") (the components of
which, for any date between and including April 1, 2003 and December 31, 2003,
shall be computed for the elapsed portion of such Fiscal Year and annualized;
and the components of which, for any other date, shall be computed for the four
most recently ended fiscal quarters) of (a) Adjusted Consolidated Net Income,
minus extraordinary gains or plus extraordinary losses, plus income tax expense,
plus Interest Expense (including any Interest Expense relating to commercial
paper issued in connection with a Permitted Securitization even though not
directly incurred by a Credit Party), plus Lease Rentals to (b) Interest Expense
(including any Interest Expense relating to commercial paper issued in
connection with a Permitted Securitization even though not directly incurred by
a Credit Party) of the Credit Parties on a consolidated basis, plus Lease
Rentals, of not less than:

Date

Fixed Charge Coverage

Ratio

December 31, 2002

1.00 : 1.0

March 31, 2003

1.15 : 1.0

June 30, 2003

1.55 : 1.0

July 31, 2003

1.49 : 1.0

August 31, 2003

1.42 : 1.0

September 30, 2003

1.25 : 1.0

October 31, 2003

1.10 : 1.0

November 30, 2003

0.93 : 1.0

December 31, 2003

0.74 : 1.0

March 31, 2004

2.00 : 1.0

June 30, 2004

2.00 : 1.0

 

The following is added as Section 6.21.6 of the Credit Agreement:

6.21.6 Consolidated Net Revenue. The Borrowers shall not permit Consolidated Net
Revenue, as calculated on a rolling four month basis, at the end of the periods
set forth below to be less than the amount indicated below opposite each such
period:

Date

Consolidated Net Revenue

April 2003

$151.04 million

May 2003

$158.58 million

June 2003

$167.14 million

July 2003

$162.42 million

August 2003

$154.06 million

September 2003

$142.23 million

October 2003

$131.36 million

November 2003

$124.81 million

December 2003 and each month
thereafter

$120.37 million

Section 6.21.7 of the Credit Agreement is amended by deleting the section in its
entirety and replacing it with the following:

6.21.7 EBITDA. The Borrowers shall not permit EBITDA, as calculated on a rolling
four month basis, at the end of the periods set forth below to be less than the
amount indicated below opposite each such period:

Date

EBITDA

April 2003

$6.82 million

May 2003

$10.91 million

June 2003

$14.88 million

July 2003

$12.94 million

August 2003

$11.24 million

September 2003

$8.26 million

October 2003

$5.10 million

November 2003

$3.20 million

December 2003 and each month
thereafter

$1.15 million

 

The following is added as Section 6.21.8 of the Credit Agreement:

6.21.8 Collateral Account. The Borrowers shall not permit the balance of funds
on deposit in the Collateral Account (as defined in that certain Consent Letter,
dated as of December 20, 2002, by and among the Borrowers, the Collateral Agent,
the Agent, the Lenders and the Noteholders) at any time during the periods set
forth below to be less than the amount indicated below opposite each such
period:

Period

Balance

May 31, 2003 through June 29, 2003

$23.72 million

June 30, 2003 through July 30, 2003

$29.71 million

July 31, 2003 through August 30, 2003

$34.84 million

August 31, 2003 through September 29, 2003

$37.79 million

September 30, 2003 through October 30, 2003

$41.59 million

October 31, 2003 through November 29, 2003

$48.05 million

November 30, 2003 through December 30, 2003

$49.95 million

December 31, 2003 and thereafter

$52.23 million

 

The following is added as Section 6.21.9 of the Credit Agreement:

6.21.9 Maximum Recourse. Astec shall not permit the aggregate amount of recourse
obligations of itself and its Subsidiaries to exceed $13,500,000 without the
consent of the Required Lenders.

Section 6.22 of the Credit Agreement is amended by deleting such section in its
entirety and replacing it with the following:

6.22 Fixed Asset Expenditures. The Borrowers will not, nor will they permit any
Credit Party to, expend, or be committed to expend, during any period set forth
below, in the acquisition of fixed assets, an amount in excess of the amount
indicated below opposite each such period, such amounts to be computed in the
aggregate for the Credit Parties:

Period

Balance

January 31, 2003 through March 31, 2003

$1.789 million

April 1, 2003 through June 30, 2003

$1.860 million

July 1, 2003 through September 30, 2003

$1.057 million

October 1, 2003 through December 31, 2003

$328,000

; provided that any amount not spent or committed in a given period shall carry
forward into the following periods; provided further that any amounts permitted
but not used prior to December 31, 2003 shall not carry forward.

Section 7.3 of the Credit Agreement is amended by deleting the clause that
begins with the words "of this Agreement, any term or provision . . ." and ends
with the words "and financial institutions party thereto" and substituting in
its stead the following:

"

of this Agreement, any term or provision of that certain Amendment No. 4 to the
Credit Agreement, dated as of November 14, 2002, by and among the Borrowers, the
Agent and the Lenders, any term or provision of that certain Amendment No. 5 to
the Credit Agreement, dated as of March 31, 2003, by and among the Borrowers,
the Agent and the Lenders, any term or provision found in that certain Second
Amendment to the Intercreditor and Collateral Agency Agreement, dated as of
November 14, 2002, by and among the Agent, the Collateral Agent and the several
banks and financial institutions party thereto or any term or provision found in
that certain Third Amendment to the Intercreditor and Collateral Agency
Agreement, dated as of March 31, 2003, by and among the Agent, the Collateral
Agent and the several banks and financial institutions party thereto."

Consent and Waiver. The Lenders hereby waive (a) any breach of Section 6.21.1 of
the Credit Agreement to the extent that the Leverage Ratio was greater than
3.5:1.0 but not greater than 7.50:1.00 as of December 31, 2002, and to the
extent that the Leverage Ratio was greater than 5.25:1.00 but not greater than
19.00:1.00 as of March 31, 2003, and (b) any breach of Section 6.21.4 of the
Credit Agreement to the extent that the Fixed Charge Coverage Ratio was less
than 1.00:1.0 but not less than 0.40:1.0 as of December 31, 2002, and to the
extent that the Fixed Charge Coverage Ratio was less than 1.15:1.0 but not less
than 0.01:1.0 as of March 31, 2003. The waiver in this Section 2 in no way
constitutes a waiver of Astec's obligations under Sections 6.1(a), 6.1(b),
6.1(c) and 6.1(d) for the periods ending December 31, 2002 and March 31, 2003.

Representations and Warranties of the Borrower. The Borrowers represent and
warrant that:

The execution, delivery and performance by the Borrowers of this Amendment have
been duly authorized by all necessary corporate action and that this Amendment
is a legal, valid and binding obligation of the Borrowers enforceable against
the Borrowers in accordance with its terms, except as the enforcement thereof
may be subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally;

Each of the representations and warranties contained in the Credit Agreement is
true and correct in all material respects on and as of the date hereof as if
made on the date hereof;

The Borrowers 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, 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 Note
Purchase Agreements, dated as of September 10, 2001, as amended, among the
Borrowers and the Noteholders, other than the payment of legal fees of counsel
to the Noteholders under the Senior Note Amendment.

All domestic deposit accounts and disbursement accounts of Astec and the Credit
Parties (any such domestic deposit account or disbursement account, a "Deposit
Account") the balances of which exceed $25,000 as of the Effective Date and
which are not maintained with any of the Lenders are listed on Schedule 3(d)
hereto. The aggregate balance of the domestic deposit accounts and disbursement
accounts of Astec and the Credit Parties the balances of which do not exceed
$25,000 as of the Effective Date and which are not maintained with any of the
Lenders does not exceed $250,000.

After giving effect to this Amendment and the Senior Note Amendment (as defined
below), no Default or Unmatured Default has occurred and is continuing.

Further Agreements. As an inducement to the Lenders to enter into this
Amendment, the Borrowers agree that:

Until the Required Lenders shall otherwise agree, no Borrower shall request any
Eurodollar Advance with an Interest Period in excess of thirty (30) days.

On April 30, 2003, the Applicable Margin for Eurodollar Advances shall be fixed
at 3.50%, and the Applicable Margin for Floating Rate Advances shall be fixed at
2.50%. On May 31, 2003, the Applicable Margin for Eurodollar Advances shall be
fixed at 4.00%, and the Applicable Margin for Floating Rate Advances shall be
fixed at 3.00%. On June 30, 2003, the Applicable Margin for Eurodollar Advances
shall be fixed at 5.00%, and the Applicable Margin for Floating Rate Advances
shall be fixed at 4.00%.

Astec shall continue to utilize in a manner satisfactory to the Agent and Astec
the services of the consultant, Alvarez & Marsal, for the purpose of reviewing
and analyzing the business and cash flows of Astec and its Subsidiaries.

Astec shall not permit any Subsidiary to underwrite any financing of equipment
for customers through loans or leases, provided that Astec and its Subsidiaries
shall not be prohibited from offering customary trade terms to its customers.

If the Obligations of the Borrowers to the Lenders have not been paid in full by
April 18, 2003 (or such later date as agreed to by the Agent), Astec shall meet
with the Agent and Lenders (including consultation with the Agent's asset-based
lending group) to present a written overview of Astec's business and review
alternate refinancing strategies.

If the Obligations of the Borrowers to the Lenders have not been paid in full by
April 18, 2003 (or such later date as agreed to by the Agent), Astec shall pay
for appraisals of all the real property of Astec and its subsidiaries by an
appraiser selected by the Agent, such appraisals to be initiated by the Agent.
Astec shall cause such appraisals to be completed by a date satisfactory to the
Agent.

Astec shall continue to provide the Agent on the last Business Day of each week
cash flow forecasts (including statements of the Average Daily Balance and the
Cash Excess (if any)) ("Weekly Cash Flow Reports"), signed by Astec's chief
financial officer and in a form satisfactory to the Agent. The signature of
Astec's chief financial officer on such Weekly Cash Flow Reports shall not
constitute a representation as to the correctness of the calculations of
accounts payable or accounts receivable in such Weekly Cash Flow Reports, but
shall constitute a representation as to the good faith of such calculations.

Astec shall cause any refund relating to the filing of its consolidated income
tax return for the 2002 Fiscal Year to be deposited into the Collateral Account
within two (2) Business Days of receipt.

By April 11, 2003, Astec shall cause the Collateral Agent, for the benefit of
itself, the Agent, the Lenders and the Noteholders, to have a first priority
perfected security interest in Astec's Dassault Breguet Falcon 10 jet. If the GE
Facility has not closed by April 15, 2003, Astec shall cause the Collateral
Agent, for the benefit of itself, the Agent, the Lenders and the Noteholders, to
have a first priority perfected security interest in (1) any real estate of
Astec or any other Credit Party in which the Collateral Agent does not have a
perfected security interest, (2) any intellectual property of Astec and the
Credit Parties, and (3) to the extent that any such asset has a book value in
excess of $500,000, any other asset of Astec and the Credit Parties in which the
Collateral Agent does not have a perfected security interest. Astec shall cause
the security interest in real estate to be perfected by May 15, 2003, or such
later date as the Agent may agree. Astec shall cause the security interest in
intellectual property to be perfected by April 15, 2003, or such later date as
the Agent may agree. Astec shall cause the security interest in the assets
described in clause 3 of this clause (i) to be perfected by April 15, 2003, or
such later date as the Agent may agree.

Astec shall include in each Weekly Cash Flow Report a calculation of the average
aggregate daily cash balance of Astec and its Subsidiaries (computed on a
rolling ten Business Day basis, the last day of which ten day period shall be
the second Business Day preceding the date of the Weekly Cash Flow Report) (such
balance, the "Average Daily Balance"), and if the Average Daily Balance exceeds
$9,000,000 (such excess, the "Cash Excess", and the date of the Weekly Cash Flow
Report setting forth such Cash Excess, the "Cash Excess Date"), Astec shall
deposit on the Cash Excess Date an amount equal to the Cash Excess (such amount,
the "Cash Excess Deposit") into the Collateral Account. Notwithstanding the
occurrence of intervening Cash Excess Dates, no fewer than ten (10) Business
Days must elapse between Cash Excess Deposits.

(i) If the Obligations of the Borrowers to the Lenders have not been paid in
full by May 23, 2003, then on such date, Astec shall pay to the Agent, for the
account of the Lenders, the second installment of the Amendment Fee in an amount
equal to 0.50% of the Aggregate Commitment (as in effect after giving effect to
this Amendment) and (ii) if the Obligations of the Borrowers to the Lenders have
not been paid in full by June 30, 2003, then on such date, Astec shall pay to
the Agent, for the account of the Lenders, the third installment of the
Amendment Fee an amount equal to 0.75% of the Aggregate Commitment (as in effect
after giving effect to this Amendment); it being understood that the entire
Amendment Fee is earned on the Effective Date and that payment of such

Amendment Fee shall come from the Collateral Account.

Astec will deliver to the Agent and the Lenders within 30 days of the end of
each month (i) consolidated and consolidating unaudited balance sheets as at the
close of each such month and consolidated and consolidating profit and loss and
a statement of cash flows for such month and for the period from the beginning
of such Fiscal Year to the end of such month, the calculations therein to be
compared against the corresponding figures in the modified budget prepared on
March 5, 2003, by Alvarez & Marsal, (ii) a compliance certificate, (iii) a
backlog report, (iv) an accounts receivable aging report, (v) an accounts
payable aging report, and (vi) a consolidated recourse report, each of the items
in clauses (i) through (vi) of this clause (l) in a form acceptable to the Agent
and signed by Astec's chief financial officer.

By the earlier of (i) April 15, 2003 and (ii) within two days of receipt by
Astec in draft form, Astec shall deliver to the Agent appraisals of the
inventory, machinery and equipment of Astec and the other Credit Parties in form
and detail reasonably satisfactory to the Agent.

By April 4, 2003, Astec shall deliver to the Collateral Agent pledged account
agreements in form and substance satisfactory to the Agent ("Pledged Account
Agreements") pledging to the Collateral Agent, for the benefit of itself, the
Agent, the Lenders, and the Noteholders, a security interest in the deposit and
disbursement accounts listed on Schedule 3(d) hereto;

If at any time a Deposit Account of Astec or a Credit Party exists which (i) is
not subject to a Pledged Account Agreement, (ii) is not maintained with a Lender
and (iii) either (x) has a balance less than $25,000 and causes the aggregate
balance of the Deposit Accounts of Astec and the Credit Parties not subject to a
Pledged Account Agreement which are not maintained with any of the Lenders to
exceed $250,000 or (y) has a balance in excess of $25,000, then Astec shall, or
shall cause the related Credit Party to, enter into a Pledged Account Agreement
pledging to the Collateral Agent, for the benefit of itself, the Agent, the
Lenders, and the Noteholders, a security interest in such Deposit Account.

Effective Date. This Amendment shall become effective upon the date (the
"Effective Date") when all of the following events shall have occurred: (a) the
execution and delivery hereof by the Borrowers, the Agent and the Lenders; (b)
the execution and delivery by the Borrowers and the Required Holders of an
amendment to the Note Purchase Agreements and/or waiver of certain terms thereof
in form and substance satisfactory to the Lenders (the "Senior Note Amendment");
(c) payment by the Borrowers to the Agent, for the account of the Lenders, of
the first installment of an amendment fee (the "Amendment Fee") equal to 0.25%
of the Aggregate Commitment (as in effect after giving effect to this
Amendment), which fee shall be deducted from the Collateral Account; (d)
delivery to the Agent of certificates executed by the Secretary or Assistant
Secretary of each Borrower, certifying (i) an attached copy of each Borrower's
Board of Directors' (or Executive Committee's) resolutions authorizing the
execution, delivery and performance of this Amendment on behalf of the
respective Borrowers and (ii) that there have been no amendments, supplements or
modifications to the Certificate of Incorporation, the Bylaws or the certificate
of incumbency of each Borrower delivered to the Agent on May 13, 2002, or
attached copies of such amendments, supplements or modifications; (e) the
execution and delivery by the Collateral Agent, the Agent, the Lenders and the
Noteholders of the Third Amendment to Intercreditor and Collateral Agency
Agreement; (f) delivery to the Agent of a listing of (i) all intellectual
property of Astec and the other Credit Parties, (ii) all real estate of Astec
and the other Credit Parties in which the Collateral Agent does not have a
perfected security interest and (iii) to the extent that any such asset has a
book value in excess of $500,000, any other asset of Astec and the Credit
Parties in which the Agent does not have a perfected security interest; and (g)
delivery to the Agent of such other documents as the Agent, any Lender or their
counsel may have reasonably requested.

Reference to and Effect Upon the Credit Agreement.

Except as specifically amended or waived above, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.

The execution, delivery and effectiveness of this Amendment shall not operate as
a waiver of any right, power or remedy of the Agent or any Lender under the
Credit Agreement or any Loan Document, nor constitute a waiver of any provision
of the Credit Agreement or any Loan Document, except as specifically set forth
herein. Upon the effectiveness of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of
similar import shall mean and be a reference to the Credit Agreement as amended
hereby.

Costs and Expenses. The Borrower hereby affirms its obligation under Section 9.7
of the Credit Agreement to reimburse the Agent for all reasonable costs,
internal charges and out-of-pocket expenses paid or incurred by the Agent in
connection with the preparation, negotiation, execution and delivery of this
Amendment, including but not limited to the attorneys' fees and time charges of
attorneys for the Agent with respect thereto.

GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING WITHOUT LIMITATION 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS) OF THE STATE
OF ILLINOIS BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

Headings. Section headings in this Amendment are included herein for convenience
of reference only and shall not constitute a part of this Amendment for any
other purposes.

Counterparts. This Amendment may be executed in any number of counterparts, each
of which when so executed shall be deemed an original but all such counterparts
shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.

ASTEC INDUSTRIES, INC.

By: /s/ F. McKamy Hall

Print Name: F. McKamy Hall

Title: Treasurer

ASTEC FINANCIAL SERVICES, INC.

By: /s/ Albert E. Guth

Print Name: Albert E. Guth

Title: President and Secretary

 

BANK ONE, NA,

individually and as Agent

By: /s/ Andrew D. MacIver

Print Name: Andrew D. MacIver

Title: Vice President

 

SUNTRUST BANK

 

By: /s/ J. H. Miles

Print Name: J. H. Miles

Title: Managing Director

AMSOUTH BANK

By: /s/ McCoy C. Zachry

Print Name: McCoy C. Zachry

Title: Vice President

BRANCH BANK & TRUST CO.

 

By: /s/ James Stallings

Print Name: James Stallings

Title: Vice President

U.S. BANK

 

By: /s/ Bill Hall

Print Name: Bill Hall

Title: Vice President