AMENDMENT NO. 2 TO CREDIT AGREEMENT (Pennsylvania Crusher Corporation)

AMENDMENT NO. 2 TO CREDIT AGREEMENT

(Pennsylvania Crusher Corporation)

     AMENDMENT NO. 2, dated as of June 28, 2005, (this “Amendment No. 2”) among PENNSYLVANIA CRUSHER CORPORATION, a Delaware corporation (the “Borrower”); the financial institutions referred to as “LENDERS” in the Credit Agreement referred to below (the “Lenders”); and National City Bank, as agent for the Lenders (together with its successors and assigns in such capacity, the “Agent”.

Background

     The Borrower, the Lenders and the Agent entered into a certain Credit Agreement, dated as of January 3, 2003, as amended pursuant to that certain Amendment No. 1 dated as off May 12, 2003 (as so amended, the “Existing Credit Agreement” and the same, as it may be further amended, restated, modified and/or supplemented from time to time, the “Credit Agreement”), which provides for certain extensions of credit to the Borrower, subject to certain conditions.

     The Borrower has requested that the Lenders agree to modify the Existing Credit Agreement to allow for a $1,000,000 dividend to be paid on or before July 15, 2005. The Agent and the Lenders are willing to make the amendments requested by the Borrower pursuant to the terms, and subject to the conditions, specified below. Accordingly, the parties hereto agree as follows.

     SECTION 1. DEFINITIONS. Except as otherwise defined in this Amendment No. 2, terms defined in the Existing Credit Agreement are used herein as defined therein.

     SECTION 2. AMENDMENTS TO EXISTING CREDIT AGREEMENT. Subject to the satisfaction of the conditions precedent specified in Section 4 below,

          2.1.1 Section 7.4 of the Existing Credit Agreement (Restricted Payments) is amended by inserting the following paragraph (c) immediately following paragraph (b) thereof:

     (c) Dividend. In addition, the Borrower may pay a cash dividend in an aggregate amount not to exceed One Million Dollars ($1,000,000) on or before July 15, 2005, so long as no Event of Default or Default exists or would be created as a result of the making thereof.

     SECTION 3. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders and the Agent to agree to amend the Existing Credit Agreement in the manner set forth herein, the Borrower makes the following representations and warranties, which shall survive the execution and delivery of this Amendment No. 2:

          (a) As of the date hereof, no Default or Event of Default has occurred and is continuing after giving effect to the amendments contained herein; and

          (b) Each of the representations and warranties set forth in the Existing Credit Agreement and other Loan Documents is true and correct in all material respects before and after giving effect to the amendments and transactions contemplated hereby as though each such representation and warranty were made at and as of the date hereof.

     SECTION 4. CONDITIONS PRECEDENT.

     The amendments to the Existing Credit Agreement set forth in Section 2 above, shall become effective upon the execution and delivery of this Amendment No. 2 by (a) the Borrower, (b) the Agent and (c) the Majority Lenders, and the execution and delivery of the acknowledgement below by the Persons indicated thereon.

     SECTIONS. MISCELLANEOUS.

          5.1 Counterparts. This Amendment No. 2 may be executed in counterparts and by different parties hereto in separate counterparts, each of which, when executed and delivered, shall be deemed to be an original and all of which, when taken together, shall constitute one and the same instrument. A photocopied or facsimile signature shall be deemed to be the functional equivalent of a manually executed original for all purposes.

          5.2 Ratification. The Existing Credit Agreement, as amended by this Amendment No. 2 and the other Loan Documents are, and shall continue to be, in full force and effect and are hereby in all respects confirmed, approved and ratified. Without limiting the generality of the foregoing, the undersigned confirms the pledges and the security interests granted pursuant to such Loan Documents.

          5.3 Payment of Fees and Expenses. Without limiting other payment obligations of the Borrower set forth in the Loan Documents, the Borrower agrees to pay all costs and expenses incurred by the Agent in connection with the preparation, execution and delivery of this Amendment No. 2 and any other documents or instruments which may be delivered in connection herewith, including, without limitation, the reasonable fees and expenses of its counsel, Drinker Biddle & Reath LLP.

          5.4 Authorization to Agent. Each Lender hereby authorizes the Agent to take such action as shall be consistent with the purposes hereof and as it shall deem necessary or appropriate to carry out the purposes of this Amendment No. 2.

          5.5 Governing Law. This Amendment No. 2 shall be construed in accordance with, and governed by, the laws of the Commonwealth of Pennsylvania, without regard to choice of law principles.

          5.6 References. From and after the Amendment No. 2 Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereof”, “hereunder” or words of like import, and all references to the Credit Agreement in any and all Loan Documents, other agreements, instruments, documents, certificates and writings of every kind and nature, shall be deemed to mean the Existing Credit Agreement as modified and amended by this Amendment No. 2 and as the same may be further amended, modified or supplemented in accordance with the terms thereof.

     IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 2 to be duly executed by their respective, duly authorized officers as of the date first above written.

BORROWER:

		PENNSYLVANIA CRUSHER CORPORATION
		By:		/s/ Ronald R. Remick
		Name: Ronald R. Remick
		Title: Vice President and Treasurer

AGENT AND LENDERS:

		NATIONAL CITY BANK, in its capacity as Agent and a Lender
		By		/s/ Laura J. Rowley
		Name: Laura J. Rowley
		Title: Vice President

Acknowledgement

Each of the undersigned acknowledges the foregoing amendment and confirms its obligations under each of the Loan Documents to which it is a party, provided, however, it is agreed that the consent of the undersigned is not required to amend the Credit Agreement or any Loan Document except where it is a party to such Loan Document.

JEFFREY SPECIALTY EQUIPMENT CORPORATION
By:		/s/ Ronald R. Remick
Name: Ronald R. Remick
Title: Vice President and Treasurer
K-TRON INVESTMENT CO.
By:		/s/ Edward B. Cloues, II
Name: Edward B. Cloues, II
Title: Chairman and President
K-TRON INTERNATIONAL INC.
By:		/s/ Edward B. Cloues, II
Name: Edward B. Cloues, II
Title: Chairman and Chief Executive Officer