THIRD AMENDMENT OF AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT

THIS THIRD AMENDMENT OF AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this
"Amendment") is entered into effective February 3, 2006, between ALAMO GROUP
INC., a Delaware corporation ("Borrower"), each of the banks or other lending
institutions that is a signatory to this Amendment (collectively, "Lenders"),
and BANK OF AMERICA, N.A., a national banking association, as Administrative
Agent (in such capacity, together with its successors and permitted assigns,
"Administrative Agent").

R E C I T A L S

A.        Reference is hereby made to that certain Amended and Restated
Revolving Credit Agreement dated as of August 25, 2004, by and among Borrower,
Lenders, and Administrative Agent (as renewed, extended, modified, and amended
from time to time, the "Credit Agreement"), providing for a revolving line of
credit and a letter of credit facility.

B.         In connection with the Credit Agreement, and in order to evidence
Borrower's obligations thereunder, Borrower executed and delivered to Lenders
(a) that certain Revolving Credit Note dated August 25, 2004, payable to the
order of Bank of America, N.A. in the original principal amount of $25,000,000
(the "Original BofA Note"), (b) that certain Revolving Credit Note dated August
25, 2004, payable to the order of JPMorgan Chase Bank in the original principal
amount of $25,000,000 (the "Original JP Note"), and (c) that certain Revolving
Credit Note dated August 25, 2004, payable to the order of Guaranty Bank in the
original principal amount of $20,000,000 (the "Original Guaranty Note" the
Original BofA Note, the Original JP Note, and the Original Guaranty Note are
collectively, the "Original Notes" and individually, an "Original Note").

C.         Capitalized terms used herein shall, unless otherwise indicated, have
the respective meanings set forth in the Credit Agreement.

D.        Borrower, Lenders, and Administrative Agent desire to modify certain
provisions contained in the Credit Agreement, subject to the terms and
conditions set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

1.         Amendments to the Credit Agreement. 

(a)        Paragraph C. of the Recitals of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:

C.         The Company has requested that Lenders make available under this
facility $125,000,000, and give the Company the option to expand the facility by
$25,000,000, to $150,000,000, at the Company's election and pursuant to the
terms of this Agreement.

(b)        Section 1 of the Credit Agreement is hereby amended to delete the
definitions of "Obligated Group," "Permitted Acquisition," "Revolving Credit
Commitment," and "Revolving Credit Notes" in their entirety and replace such
definitions with the following:

 

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"Obligated Group" means the Company, Alamo Capital Inc., a Nevada corporation;
Alamo Group (IA) Inc., a Nevada corporation; Alamo Group (KS) Inc., a Kansas
corporation; Alamo Group (SMC) Inc., a Nevada corporation; Alamo Group (TX)
L.P., a Delaware limited partnership;  Alamo Group (USA) Inc., a Delaware
corporation; Alamo Group Holdings, L.L.C., a Delaware limited liability company;
Alamo Sales Corp., a Delaware corporation; Herschel Adams Inc., a Nevada
corporation; Alamo Group (IL) Inc., a Delaware corporation, f/k/a M&W Gear
Company; Schulte (USA) Inc., a Florida corporation; Schwarze Industries, Inc.,
an Alabama corporation; Tiger Corporation, a Nevada corporation, Alamo Group
Services Inc., a Delaware corporation, Alamo Group (OH) Inc., a Delaware
corporation, NP Real Estate Inc., an Ohio corporation, and any such other Person
that the Company requests be included in the Obligated Group on the prior
written approval of the Required Lenders, which approval shall not be
unreasonably withheld.

"Permitted Acquisition" means an Acquisition by the Company or any Consolidated
Subsidiary of the Company with respect to which each of the following conditions
shall have been satisfied:

(a)        the consideration paid for any individual Acquisition shall be less
than $20,000,000, provided however that, notwithstanding the limitation in this
clause (a), the consideration paid for the Gradall Acquisition shall not exceed
$65,000,000;

(b)        the consideration paid for all Acquisitions during the current fiscal
year, in the aggregate, after giving effect to the Acquisition, shall not exceed
$30,000,000, provided however, that for the fiscal year 2006, the Gradall
Acquisition shall not be included in the amounts used to determine the
limitation contained in this clause (b) for such fiscal year;

(c)        the Company has provided to Administrative Agent and Lenders all
information and documentation reasonably requested by Administrative Agent and
Lenders regarding the Acquisition;

(d)        as of the closing of such Acquisition, after giving effect to such
Acquisition, no Event of Default or Potential Default shall exist or occur as a
result of, and after giving effect to, such Acquisition;

(e)        not less than five (5) Business Days prior to the closing of any
Acquisition, Administrative Agent shall have received a certificate in the form
of Exhibit Q dated on or immediately prior to the date of the Acquisition,
executed by the President or a Vice President of the Company (i) confirming that
all representations and warranties set forth in the Loan Documents continue to
be true and correct in all material respects immediately prior to and after
giving effect to the Acquisition and the transactions contemplated thereby, and,
for any Acquisition in which the total consideration is equal to or greater than
$20,000,000, certifying pro forma financial statements of the Company and its
Consolidated Subsidiaries demonstrating compliance with the covenant set forth
in Section 8.16 including in such calculation the Target Operating Cash Flow (as
if the business, assets or Person acquired had been acquired since the first
(1st) day of the period for which such pro forma financial statements are
delivered and had been managed and conducted in accordance with the Company's
standard business practices) for the prior four (4) fiscal quarters of the
Company and its Consolidated Subsidiaries.

 

 

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"Revolving Credit Commitment" means for each Lender, the amount set forth in
Exhibit R, as the same may be increased or decreased from time to time by
assignment pursuant to Section 12.10 hereof, decreased pursuant to Section
2.01(a), decreased by the Required Lenders pursuant to Section 10.01, or
increased pursuant to Section 2.01(b),  and "Revolving Credit Commitments" shall
mean the aggregate commitments of all Lenders.

"Revolving Credit Notes" means the Amended and Restated Revolving Credit Notes
dated February 3, 2006, executed by the Company, substantially in the form of
Exhibit B attached hereto, one payable to each Lender in an amount equal to the
Revolving Credit Commitment of such Lender, as the same may be amended,
supplemented, modified or restated from time to time, evidencing the obligation
of the Company to repay the Revolving Credit Loan, and all renewals,
modifications and extensions thereof, such notes are in amendment, restatement,
and increase, but not extinguishment, of the Revolving Credit Notes dated August
24, 2005, executed by the Company, one payable to each Lender.

(c)        Section 1 of the Credit Agreement is hereby amended to add the
following definitions in the appropriate alphabetical order:

"Gradall Acquisition" means the Acquisition of the assets of The Gradall
Company, and Ohio corporation, by Alamo Group (OH) Inc., a Delaware corporation
and NP Real Estate Inc., an Ohio corporation, as set forth in the Gradall
Purchase Agreement.

"Gradall Purchase Agreement" means that certain Asset Purchase Agreement dated
February 3, 2006, by and among The Gradall Company, an Ohio corporation, Alamo
Group (OH) Inc., a Delaware corporation, NP Real Estate Inc., an Ohio
corporation, Gradall Industries, Inc., a Delaware corporation, JLG Industries,
Inc., a Pennsylvania corporation, and the Company.

(d)        Section 2.03(a) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

(a)        Request For Advance.  Each request by the Company to Administrative
Agent for an Advance under Section 2.01 (a "Request For Advance") shall specify
the aggregate amount of the requested Advance, the requested date of the
Advance, and, when the Request For Advance specifies a Eurodollar Advance, the
Interest Period applicable thereto.  The Company shall furnish to Administrative
Agent the Request For Advance by 10:00 a.m. central standard time, at least
three (3) Business Days before any requested Eurodollar Advance date (which must
be a Business Day) and on the same Business Day of any requested borrowing date
for a Prime Rate Advance.  Any such Request For Advance shall: (i) in the case
of a Prime Rate Advance, be in the form attached hereto as Exhibit D, and (ii) 
in the case of a Eurodollar Advance, be in the form attached hereto as
Exhibit E.

(e)        Section 2.05(d) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

 

 

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(d)           Applicable Margin. As used in this Agreement and the other Loan
Documents, "Applicable Margin" means, as to the Loans, a rate per annum
determined for each fiscal quarter during the Company's Fiscal Year, beginning
with the quarter ending September 30, 2004, by reference to the Leverage Ratio
as of the end of the fiscal quarter (herein called the "date of determination"),
as set forth in the most recent Compliance Certificate received by
Administrative Agent pursuant to Section 8.01(d) and the type of Advance or
Facility Fee, as applicable, as follows:

(i)         if, on any date of determination, the following is met:  the
Leverage Ratio is equal to or less than 1.00 to 1.0, then the Applicable Margin
during the fiscal quarter following the date of determination, expressed as a
rate per annum, shall be 0.00% for Prime Rate Advances, 0.875% for Eurodollar
Advances, and 0.125% for the Facility Fee; and if not, then

(ii)        if, on any date of determination, the following is met: the Leverage
Ratio is greater than 1.00 to 1.0 and less than or equal to 1.50 to 1.0, then
the Applicable Margin during the fiscal quarter following the date of
determination, expressed as a rate per annum, shall be 0.00% for Prime Rate
Advances, 1.00% for Eurodollar Advances, and 0.125% for the Facility Fee; and if
not, then.

(iii)       if, on any date of determination, the following is met: the Leverage
Ratio is greater than 1.50 to 1.0 and less than or equal to 2.00 to 1.0, then
the Applicable Margin during the fiscal quarter following the date of
determination, expressed as a rate per annum, shall be 0.00% for Prime Rate
Advances, 1.125% for Eurodollar Advances, and 0.125% for the Facility Fee; and
if not, then

(iv)       if, on any date of determination, the following is met: the Leverage
Ratio is greater than 2.00  to 1.0 and less than or equal to 2.50 to 1.0, then
the Applicable Margin during the fiscal quarter following the date of
determination, expressed as a rate per annum, shall be 0.125% for Prime Rate
Advances, 1.375% for Eurodollar Advances, and 0.25% for the Facility Fee; and if
not, then

(v)        if, on any date of determination, the following is met: the Leverage
Ratio is greater than 2.50  to 1.0, then the Applicable Margin during the fiscal
quarter following the date of determination, expressed as a rate per annum,
shall be 0.25% for Prime Rate Advances, 1.75% for Eurodollar Advances, and 0.25%
for the Facility Fee.

 

 

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For Eurodollar Advances, the Applicable Margin for a Loan Year applies both to
(i) Advances made during the current Loan Year and (ii) Advances outstanding
during the current Loan Year that were made during a prior Loan Year.

If the interest rate changes hereunder because of a change in the Applicable
Margin, interest shall accrue at the changed rate beginning the first day of the
month  after the earlier of the date on which the Company provides, or by which
it was required to provide, pursuant to Section 8.01(d) of this Agreement, the
financial information necessary to determine the Applicable Margin.  The
Applicable Margin in effect from February 3, 2006 through the delivery of the
Compliance Certificate for the period ending March 31, 2006 shall be determined
based upon Pricing Level 4 as set forth in clause (iv) above.

(f)         Section 2.01(b)(i) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

(i)         Upon notice to Administrative Agent (which shall promptly notify
Lenders), the Company may from time to time, request an increase in the
Revolving Credit Commitments of up to $25,000,000, resulting in an increased
Revolving Credit Commitments of up to $150,000,000, provided that, (A) each
increase in the Revolving Credit Commitments shall be in the minimum amount of
$10,000,000 or a greater integral multiple of $5,000,000, (B) after giving
effect to the increase in the Revolving Credit Commitments, the Revolving Credit
Commitments do not exceed $150,000,000, and (C) no Potential Default or Event of
Default exists. At the time of sending such notice, the Company (in consultation
with Administrative Agent) shall specify the time period within which each
Lender is requested to respond (which shall in no event be less than ten (10)
Business Days from the date of delivery of such notice to Lenders). Each Lender
shall notify Administrative Agent within such time period whether or not it
agrees to increase its Commitment, and, if so, whether by an amount equal to,
greater than, or less than its Pro Rata Share of such requested increase. Any
Lender not responding within such time period shall be deemed to have declined
to increase its Commitment. Administrative Agent shall notify the Company and
each Lender of Lenders' responses to each request made hereunder.  To achieve
the full amount of a requested increase, the Company may also invite additional
eligible assignees to become Lenders. Any increase in the Revolving Credit
Commitments must be effected by an amendment that is executed in accordance with
Section 12.01 by the Company, Administrative Agent, and the one or more Lenders
who have agreed to increase their Commitments or by new Lenders who have agreed
to new Commitments in accordance with Section 12.01.

(g)        Section 8.18 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

8.18     Minimum Asset Coverage Ratio.  The Company shall maintain, as of any
date during the term hereof, a minimum Asset Coverage Ratio of (a) 2.50 to 1.00
from February 3, 2006 until the earlier of (i) the receipt by any member of the
Obligated Group of Net Cash Proceeds of any Equity Issuance, and (ii) September
30, 2007, and (b) thereafter, 3.00 to 1.00.

 

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(h)        Article 8 of the Credit Agreement is hereby amended to add the
following Section 8.19:

8.19.    Hazardous Materials.

(a)        Indemnity Regarding Hazardous Materials.   The Company will indemnify
and hold harmless the Administrative Agent or any Lender from any loss or
liability the Administrative Agent and each Lender incurs in connection with or
as a result of this Agreement, which directly or indirectly arises out of the
use, generation, manufacture, production, storage, release, threatened release,
discharge, disposal or presence of Hazardous Materials.  The indemnity includes
but is not limited to attorneys' fees (including the reasonable estimate of the
allocated cost of in-house counsel and staff).  The indemnity extends to the
Administrative Agent, each Lender, and all of their respective directors,
officers, employees, agents, successors, attorneys and assigns.

(b)        Compliance Regarding Hazardous Materials.  The Company represents and
warrants that the Company and each Subsidiary has complied with all current and
future laws, regulations and ordinances or other requirements of any
governmental authority relating to or imposing liability or standards of conduct
concerning protection of health or the environment or hazardous substances.

(c)        Notices Regarding Hazardous Materials.  The Company will promptly
notify the Administrative Agent in writing of any threatened or pending
investigation of the Company or any Subsidiary, or its or their operations by
any Governmental Authority under any current or future Environmental Law.

(d)        Site Visits, Observations and Testing.  The Administrative Agent and
its agents and representatives will have the right at any reasonable time, after
giving notice to the Company pursuant to Section 819(e) below, to enter and
visit any real property of the Company or any Subsidiary for the purposes of
observing such real property, taking and removing environmental samples, and
conducting tests.  The Company shall reimburse the Administrative Agent on
demand for the costs of any such environmental investigation and testing.  The
Administrative Agent will make reasonable efforts during any site visit,
observation or testing conducted pursuant this paragraph to avoid interfering
with the Company's or such Subsidiary's use of the real property.  The
Administrative Agent is under no duty to observe the real property or to conduct
tests, and any such acts by the Administrative Agent will be solely for the
purposes of protecting the Administrative Agent's and Lender's rights under this
Agreement.  No site visit, observation or testing or any report or findings made
as a result thereof ("Environmental Report") (i) will result in a waiver of any
default of the Company; (ii) impose any liability on the Administrative Agent or
any Lender; or (iii) be a representation or warranty of any kind regarding the
real property (including its condition or value or compliance with any Laws) or
the Environmental Report (including its accuracy or completeness).  In the event
the Administrative Agent has a duty or obligation under applicable Laws,
regulations or other requirements to disclose an Environmental Report to the
Company or any other party, the Company authorizes the Administrative Agent to
make such a disclosure.  The Company further understands and agrees that any
Environmental Report or other information regarding a site visit, observation or
testing that is disclosed to the Company by the Administrative Agent or its
agents and representatives is to be evaluated (including any reporting or other
disclosure obligations of the Company) by the Company without advice or
assistance from the Administrative Agent.

 

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(e)        Notice Regarding Site Visits, Observations and Testing.  Prior to
entering or visiting any real property of the Company or any of its Subsidiaries
for the purpose of (x) observing such real property, (y) taking and removing
environmental samples, or (z) conducting tests under Section 8.19(d),
Administrative Agent shall: (i) with respect to the real property transferred to
NP Real Estate Inc., an Ohio corporation, under the Gradall Purchase Agreement
(the "Gradall Property"), during the term of the indemnification for Qualified
Environmental Matters pursuant to Section 6.02(b) of the Gradall Purchase
Agreement (the "Gradall Property Indemnification"), give the Company 180 days
notice; and (ii) with respect to all other real property, including the Gradall
Property following the termination or extinguishment of the Gradall Property
Indemnification, give the Company reasonable notice.

(f)         Continuing Obligation.  The Company's obligations to the
Administrative Agent and the Lenders under this Section 8.19, except the
obligation to give notices to the Administrative Agent, shall survive
termination of this Agreement and repayment of the Obligations.

(i)         The Lender's Revolving Credit Commitments listed on each Lender's
signature page to the Credit Agreement are hereby deleted in their entireties.

(j)         The Credit Agreement is hereby amended to add Exhibit R attached
hereto.

(k)       Exhibit H of the Credit Agreement is hereby deleted in its entirety
and replaced with Exhibit H attached hereto.

(l)         Exhibit J (and attached Schedule A thereto) are hereby deleted in
their entirety and replaced with Exhibit J (and attached Schedule A) attached
hereto.

(m)       Exhibit M of the Credit Agreement is hereby deleted in its entirety
and replaced with Exhibit M attached hereto.

(n)        Exhibit N of the Credit Agreement is hereby deleted in its entirety
and replaced with Exhibit N attached hereto.

2.         Amended and Restated Notes.  Borrower shall execute an (a) Amended
and Restated  Note dated February 3, 2006, payable to the order of Bank of
America, N.A. in the original principal amount of $45,000,000 (the "BofA Note"),
(b) Amended and Restated  Note dated February 3, 2006, payable to the order of
JPMorgan Chase Bank in the original principal amount of $45,000,000 (the "JP
Note"), and (c) Amended and Restated  Note dated February 3, 2006, payable to
the order of Guaranty Bank in the original principal amount of $35,000,000 (the
"Guaranty Note" the BofA Note, the JP Note, and the Guaranty Note are
collectively, the "Amended and Restated Notes" and individually, an "Amended and
Restated Note") which Amended and Restated Notes are in amendment, and increase,
and not extinguishment, of the Original Notes.

3.         Amendment of Credit Agreement and Other Loan Documents.

(a)        All references in the Loan Documents to the Credit Agreement shall
include references to the Credit Agreement as modified and amended by this
Amendment, and as may, from time to time, be further modified, amended,
restated, extended, renewed, and/or increased.

 

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(b)        All references in the Loan Documents to any Original Note shall
include references to the Amended and Restated Notes as modified and amended by
this Amendment, and as may, from time to time, be further modified, amended,
restated, extended, renewed, and/or increased.

(c)        Any and all of the terms and provisions of the Loan Documents are
hereby amended and modified wherever necessary, even though not specifically
addressed herein, so as to conform to the amendments and modifications set forth
herein.

4.         Waiver.

(a)        Pursuant to the definition of "Permitted Acquisition" and Section
8.01(f) of the Credit Agreement, Borrower is required, not less than five (5)
Business Days prior to the closing of any Acquisition, to deliver to
Administrative Agent a certificate in the form of Exhibit Q to the Credit
Agreement together with the representations, financial statements, and financial
calculations required thereby (a "Permitted Acquisition Certificate").  Borrower
has provided to Administrative Agent and Lenders preliminary financial
statements and financial calculations regarding the Gradall Acquisition, but
will not have final financial statements and financial calculations prior to the
consummation of the Gradall Acquisition. Borrower has requested that
Administrative Agent and Lenders waive the receipt of the Permitted Acquisition
Certificate and final financial statements and financial calculations regarding
the Gradall Acquisition, each in form and substance acceptable to Administrative
Agent and Lenders, for a period of thirty (30) days from the date of this
Amendment.

(b)        By execution of this Amendment, Administrative Agent and each Lender
executing this Amendment (collectively, "Consenting Lenders") hereby waive the
delivery of receipt of the Permitted Acquisition Certificate and final financial
statements and financial calculations regarding the Gradall Acquisition until
12:00 noon (central time) on March 3, 2006.

(c)        The waiver hereby granted by Administrative Agent and Consenting
Lenders does not (i) constitute a waiver or modification of any other terms or
provisions set forth in the Credit Agreement or any other Loan Document and
shall not impair any right that Administrative Agent and Lenders may now or
hereafter have under or in connection with the Credit Agreement or any other
Loan Document, and (ii) impair any of Administrative Agent's or any Lender's
rights to insist upon strict compliance with the Credit Agreement, as amended or
otherwise modified hereby, or the other Loan Documents.  The Loan Documents
continue to bind and inure to Borrower, Administrative Agent, and Lenders, and
their respective successors and permitted assigns.  Failure to provide any of
the items listed in Paragraph 4(a) above on or before the date specified above,
shall be an Event of Default under the Credit Agreement.

5.         Ratifications. Borrower (a) ratifies and confirms all provisions of
the Loan Documents as amended by this Amendment, (b) ratifies and confirms that
all guaranties, assurances, and Liens granted, conveyed, or assigned to
Administrative Agent for the benefit of Lenders under the Loan Documents are not
released, reduced, or otherwise adversely affected by this Amendment and
continue to guarantee, assure, and secure full payment and performance of the
present and future Obligation (except to the extent specifically limited by the
terms of such guaranties, assurances, or Liens (if any)) including, without
limitation, the Amended and Restated Notes, and (c) agrees to perform such acts
and duly authorize, execute, acknowledge, deliver, file, and record such
additional documents, and certificates as Administrative Agent and Lenders may
reasonably request in order to create, perfect, preserve, and protect those
guaranties, assurances, and Liens (if any).

6.         Representations.  Borrower represents and warrants to Administrative
Agent and Lenders that as of the date of this Amendment: (a) each of the items
and documents listed on Exhibit A (the "Amendment Documents") have been duly
authorized, executed, and delivered by Borrower and each Guarantor, as
applicable; (b) no action of, or filing with, any Governmental Authority is
required to authorize, or is otherwise required in connection with, the
execution, delivery, and performance of the Amendment Documents by Borrower and
each Guarantor; (c) the Loan Documents, as amended by the Amendment Documents,
are valid and binding upon Borrower and each Guarantor and are enforceable
against Borrower and each Guarantor in accordance with their respective terms,
except as limited by debtor relief laws and general principles of equity;
(d) the execution, delivery, and performance by Borrower and each Guarantor of
the Amendment Documents does not require the consent of any other Person and do
not and will not constitute a violation of any governmental requirement, order
of any Governmental Authority, or material agreements to which Borrower or any
Guarantor is a party or by which Borrower or any Guarantor is bound; (e) all
representations and warranties in the Credit Agreement are true and correct in
all material respects on and as of the date of this Amendment, except to the
extent that (i) any of them speak to a different specific date, or (ii) the
facts on which any of them were based have been changed by transactions
contemplated or permitted by the Credit Agreement; and (f) after giving effect
to the Amendment Documents, no Potential Default or Event of Default exists.

 

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7.         Conditions.  This Amendment shall not be effective unless and until:

(a)        the Administrative Agent shall have received each of the items and
documents listed on Exhibit A (the "Amendment Documents"), each acceptable to
Administrative Agent in its sole discretion;

(b)        the representations and warranties in this Amendment are true and
correct in all material respects on and as of the date of this Amendment, except
to the extent that (i) any of them speak to a different specific date, or (ii)
the facts on which any of them were based have been changed by transactions
contemplated or permitted by the Credit Agreement;

(c)        the Administrative Agent shall have received (a) an upfront fee in
the amount of $68,750, to be shared among the Lenders based on their Pro Rata
Share, and (b) each other fee referenced in that certain Fee Letter dated
January 5, 2006, by and between Borrower and Administrative Agent; and

(d)        after giving effect to this Amendment, no Potential Default or Event
of Default exist.

8.         Continued Effect.  Except to the extent amended hereby or by any
documents executed in connection herewith, all terms, provisions, and conditions
of the Credit Agreement and the other Loan Documents, and all documents executed
in connection therewith, shall continue in full force and effect and shall
remain enforceable and binding in accordance with their respective terms.

9.         Miscellaneous.  Unless stated otherwise (a) the singular number
includes the plural and vice versa and words of any gender include each other
gender, in each case, as appropriate, (b) headings and captions may not be
construed in interpreting provisions, (c) this Amendment shall be construed --
and its performance enforced -- under Texas law, (d) if any part of this
Amendment is for any reason found to be unenforceable, all other portions of it
nevertheless remain enforceable, and (e) this Amendment may be executed in any
number of counterparts with the same effect as if all signatories had signed the
same document, and all of those counterparts must be construed together to
constitute the same document.

10.       Parties.  This Amendment binds and inures to Borrower, Administrative
Agent, and each Lender and their respective successors and permitted assigns.

 

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11.       Entireties.  The Credit Agreement and the other Loan Documents, as
amended by this Amendment, represent the final agreement between the parties
about the subject matter of the Credit Agreement and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the
parties.  There are no unwritten agreements between the parties.

[Remainder of Page Intentionally Left Blank;
Signature Pages to Follow.]

 

 

 

 

 

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SIGNATURE PAGE TO THIRD AMENDMENT OF
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT BETWEEN
ALAMO GROUP INC.,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
AND THE LENDERS DEFINED THEREIN

EXECUTED as of the day and year first mentioned.

ALAMO GROUP INC.,
a Delaware corporation

By:      
                                                                       
            Robert H. George
            Vice President

 

 

 

 

 

Signature Page to Third Amendment

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SIGNATURE PAGE TO THIRD AMENDMENT OF
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT BETWEEN
ALAMO GROUP INC.,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
AND THE LENDERS DEFINED THEREIN

 

 

BANK OF AMERICA, N.A.,
as Administrative Agent

By:      
                                                                       
                                                                                   
Suzanne Paul, Vice President
 

 

 

 

Signature Page to Third Amendment

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SIGNATURE PAGE TO THIRD AMENDMENT OF    
REVOLVING CREDIT AGREEMENT BETWEEN
ALAMO GROUP INC.,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
AND THE LENDERS DEFINED THEREIN

 

 

BANK OF AMERICA, N.A.,
as a Lender

By:      
                                                                       
                                                                                   
Stevens E. Warrick, Senior Vice President

 

 

 

 

            Signature Page to Third Amendment

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SIGNATURE PAGE TO THIRD AMENDMENT OF
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT BETWEEN
ALAMO GROUP INC.,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
AND THE LENDERS DEFINED THEREIN

 

 

JP MORGAN CHASE BANK, as a Lender

By:      
                                                                       
            Mark V. Harris, Senior Vice President

 

 

 

 

 

            Signature Page to Third Amendment

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SIGNATURE PAGE TO THIRD AMENDMENT OF
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT BETWEEN
ALAMO GROUP INC.,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
AND THE LENDERS DEFINED THEREIN

 

 

GUARANTY BANK, as a Lender

By:      
                                                                       
                                                                       
            Joseph N. Petet, Senior Vice President

 

 

 

 

            Signature Page to Third Amendment

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

SIGNATURE PAGE TO THIRD AMENDMENT OF
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT BETWEEN
ALAMO GROUP INC.,
BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
AND THE LENDERS DEFINED THEREIN

To induce the Administrative Agent and Lenders to enter into this Amendment,
each of the undersigned (a) consent and agree to this Amendment's execution and
delivery, (b) ratify and confirm that all guaranties, assurances, and Liens (if
any) granted, conveyed, or assigned to Administrative Agent on behalf of Lenders
under the Loan Documents are not released, diminished, impaired, reduced, or
otherwise adversely affected by this Amendment and continue to guarantee,
assure, and secure the full payment and performance of all present and future
Obligation (except to the extent specifically limited by the terms of such
guaranties, assurances, or Liens), including, without limitation, the Amended
and Restated Notes, (c) agree to perform such acts and duly authorize, execute,
acknowledge, deliver, file, and record such additional guaranties, assignments,
security agreements, deeds of trust, mortgages, and other agreements, documents,
instruments, and certificates as Administrative Agent may reasonably deem
necessary or appropriate in order to create, perfect, preserve, and protect
those guaranties, assurances, and Liens (if any), and (d) waive notice of
acceptance of this consent and agreement, which consent and agreement binds the
undersigned and their successors and permitted assigns and inures to
Administrative Agent, Lenders, and their respective successors and permitted
assigns.

ALAMO CAPITAL INC.,

ALAMO GROUP (TX) L.P.,

a Nevada corporation

a Delaware limited partnership

By:                                                      

By: Alamo Group Holdings, LLC,

Robert H. George

a Delaware limited liability company,

Vice President - Administration

its General Partner

 

By:                                                            

ALAMO GROUP (IA) INC.,

Robert H. George

a Nevada corporation

Vice President - Administration

By:                                                      

 

Robert H. George

ALAMO GROUP (USA) INC.,

Vice President - Administration

a Delaware corporation

 

By:                                                      

ALAMO GROUP (KS) INC.,

Robert H. George

a Kansas corporation

Vice President - Administration

By:                                                      

 

Robert H. George

ALAMO GROUP HOLDINGS, L.L.C.,

Vice President - Administration

a Delaware limited liability company

 

By:                                                      

ALAMO GROUP (SMC) INC.,

Robert H. George

a Nevada corporation

Vice President - Administration

By:                                                      

 

Robert H. George

 

Vice President - Administration

     

 

 

 Signature Page to Third Amendment

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

ALAMO SALES CORP.,

HERSCHEL‑ADAMS INC.,

a Delaware corporation

a Nevada corporation

By:                                                      

By:                                                      

Robert H. George

Robert H. George

Vice President - Administration

Vice President - Administration

   

ALAMO GROUP (IL) INC., f/k/a M&W Gear Company,
a Delaware corporation

SCHULTE (USA) INC.,

By:                                                      

a Florida corporation

Robert H. George

By:                                                      

Vice President ‑ Administration

Robert H. George

 

Vice President - Administration

SCHWARZE INDUSTRIES, INC.,

 

an Alabama corporation

TIGER CORPORATION,

By:                                                      

a Nevada corporation

Robert H. George

By:                                                      

       Vice President - Administration

Robert H. George

 

Vice President ‑ Administration

ALAMO GROUP SERVICES, INC.,

 

a Delaware corporation

Alamo Group (OH) Inc., a Delaware corporation

By:                                                      

By:                                                      

Robert H. George

Name:                                           

       Vice President - Administration

      Title:                                              

     

NP REAL ESTATE Inc., an Ohio corporation

 

By:                                                      

 

Name:                                           

 

      Title:                                              

 

 Signature Page to Third Amendment

 

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

EXHIBIT A

AMENDMENT DOCUMENTS

1.         Amendment;

2.         BofA Note;

3.         JP Note;

4.         Guaranty Note;

5.         Guaranty Agreement executed by Alamo Group (OH) Inc., a Delaware
corporation ("Alamo OH"), for the benefit of Administrative Agent and Lenders;

6.         Guaranty Agreement executed by NP Real Estate Inc., an Ohio
corporation ("NP"), for the benefit of Administrative Agent and Lenders;

7.         Officer's Certificate of Borrower certifying as to (a) no changes to
the constituent documents of the Borrower since the Officer's Certificate dated
August 25, 2004, delivered to Administrative Agent and Lenders in connection
with the Credit Agreement, (b) the incumbency of the officer's of Borrower
authorized to execute the Amendment Documents, and (c) resolutions of the Board
of Directors of Borrower authorizing the Amendment Documents;

8.         Officer's Certificate of Alamo OH certifying as to (a) the
constituent documents of Alamo OH, (b) the incumbency of the officer's of Alamo
OH authorized to execute the Amendment Documents to which Alamo OH is a party,
and (c) resolutions of the Board of Directors of Alamo OH authorizing the
Amendment Documents to which Alamo OH is a party;

9.         Officer's Certificate of NP certifying as to (a) the constituent
documents of NP, (b) the incumbency of the officer's of NP authorized to execute
the Amendment Documents to which NP is a party, and (c) resolutions of the Board
of Directors of NP authorizing the Amendment Documents to which NP is a party;

10.       Officer's Certificate of Alamo Group (IL) INC., f/k/a M&W Gear Company
("Alamo IL"), certifying as to (a) the constituent documents of Alamo IL, (b)
the incumbency of the officer's of Alamo IL authorized to execute the Amendment
Documents to which Alamo IL is a party, and (c) resolutions of the Board of
Directors of Alamo IL authorizing the Amendment Documents to which Alamo IL is a
party;

11.       Officer's Certificate of each Obligated Party (other than Borrower,
Alamo OH, Alamo IL, and NP) certifying as to (a) no changes to the constituent
documents of such Obligated Party since the Officer's Certificate dated August
25, 2004, delivered to Administrative Agent and Lenders in connection with the
Credit Agreement, (b) the incumbency of the officer's of such Obligated Party
authorized to execute the Amendment Documents to which such Obligated Party is a
party, and (c) resolutions of the Board of Directors of Borrower authorizing the
Amendment Documents to which such Obligated Party is a party;

 

18

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12.        Fully executed copy of the Gradall Purchase Agreement together with
all schedules and exhibits thereto;

13.        Such other items and documents as Administrative Agent and Lenders
shall reasonably request.

 

 

 

 

19

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EXHIBIT H

Permitted Liens

Secured Party

Pledgor

 Description of Collateral

 Ford Motor Credit Corp

 Schwarze Industries, Inc.

Floor Planned Chassis purchased from Mid Tenn Ford

MB Credit Corp

 Schwarze Industries, Inc.

Floor Planned Chassis purchased from Neely Coble

National Australia Bank (Line of Credit and Security Agreement)

 Schwarze Industries, Inc.

All assets except R/E, Bank of America Letter of Credit

Australian Guarantee Corporation (capital lease)

 Schwarze Industries, Inc.

Sweepers

Toronto Dominion

 Schulte (USA) Inc.

Accounts Receivable, Inventory
Alamo Group, Inc. -Guaranty

Hitachi Capital America Corporation

 Schwarze Industries, Inc.

Chassis

 

 

20

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EXHIBIT J

COMPLIANCE CERTIFICATE

Date:                                                                      

Bank of America, N.A.
300 Convent Street
Post Office Box 300
San Antonio, Texas  78291

Attn: Stevens E. Warrick, Senior Vice President

This Certificate is delivered to you pursuant to that certain Amended and
Restated Revolving Credit Agreement (the "Loan Agreement"), dated August 25,
2004, by and between Bank of America, as Administrative Agent for the Lenders,
the Lenders and Alamo Group Inc. (the "Company") and the subsidiaries of the
Company named therein as members of the "Obligated Group."  All capitalized
terms not otherwise defined shall have the meaning assigned to them in the Loan
Agreement.

As of the date of this Certificate, the Company certifies to Lenders the
following:

I.      COMPLIANCE:

A.    The representations and warranties stated in Article 6 of the Loan
Agreement continue to be true, except:

[List any exceptions]

B.    The Company has performed and fulfilled all of its obligations stated in
Article 8 of the Loan Agreement, except:

[List any exceptions]

C.    The Company and each other member of the Obligated Group has kept,
observed, performed and fulfilled each and every covenant and condition stated
in Article 9 of the Loan Agreement, except:

[List any exceptions]

D.    There are no Events of Default or Potential Default in existence as such
term is defined in Article 10 of the Loan Agreement, except:

[List any exceptions]

E.     Neither the Company nor any Obligated Group member is involved in any
material litigation, except:

[List any exceptions]

F.     The accompanying balance sheet and operating statement and supporting
financial data have been prepared in accordance with GAAP and are true and
correct, subject to normal year end audit and adjustments.

 

1

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

G.    The Company's computations of the following financial covenants of the
Company contained in the Loan Agreement and as calculated on the attached
Schedule A are as follows, and are correct:

(a)           Minimum Fixed Charge Coverage Ratio
(Section 8.14 - minimum of 1.25 to 1.0):                                      
                    to                       

(b)           Minimum Consolidated Tangible Net Worth
(Section 8.15 - minimum of
$_____________, subject to annual
adjustment):                                                                                
$                                             

(c)           Maximum Leverage Ratio
(Section 8.16 - maximum of
3.25 to
1.0:                                                                                  
                    to                       

(d)           Minimum Asset Coverage Ratio
(Section 8.18 - minimum of (a) 2.50 to 1.0 from the
period beginning February 3, 2006, through the
earlier of (i) the receipt of Net Cash Proceeds from
an Equity Issuance and (ii) September 30, 2007, and
(b) all times thereafter, 3.00 to 1.00):                                     
                           to                       

(e)           Maximum Capital Stock Repurchases
(Section 9.04 - maximum of $20,000,000
aggregate during the term of the Loan Agreement )                         
$                                             

(f)            Maximum Capital Expenditures
(Section 9.12 - maximum of $10,000,000
aggregate during any fiscal year
)                                                    
$                                               

 

Very truly yours,

ALAMO GROUP INC.

By:         
                                                                                                               

Printed
Name:                                                                                      

Title:                                                                                                      

 

 

2

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

SCHEDULE A TO COMPLIANCE CERTIFICATE

(for the period ending ___________________________)

Covenant

At End of Subject Period

1.       Fixed Charge Coverage Ratio (Section 8.14)

   

(a)     Operating Cash Flow (from Schedule B)

$                             

(b)     Lease and rent expense (Company and Consolidated Subsidiaries)

$                             

(c)     Maintenance Capital Expenditures (Company and Consolidated Subsidiaries)

$                             

(d)     Cash Taxes (Company and Consolidated Subsidiaries)

$                             

(e)     Dividends paid in cash (Company and Consolidated Subsidiaries)

$                             

(f)      Line 1(a), plus Line 1(b), minus Line 1(c), minus Line 1(d), minus Line
1(e)

  $                           

(g)     Interest Expense (Company and Consolidated Subsidiaries)

$                             

(h)     Principal Payments on Indebtedness for Borrowed Money (excluding the
Obligation) (Company and Consolidated Subsidiaries)

$                             

(i)      Lease and rent expense (Company and Consolidated Subsidiaries)

$                             

(j)      Line 1(g), plus Line 1(h), plus Line 1(i)

  $                           

(k)     Fixed Charge Coverage Ratio - ratio of Line 1(f) to Line 1(j)

 

______ to ______

(l)      Minimum Ratio (per §8.14)

 

1.25 to 1.00

2.       Consolidated Tangible Net Worth (Section 8.15)

   

(a)     Initial minimum Tangible Net Worth  at Closing

$109,500,000  

(b)     Net Income (as reported on the audited financials for the fiscal year
ending December 31, 2005) times 50%

$                             

 

 

3

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(c)     Net proceeds of Equity Issuances from Closing Date through the fiscal
year ending December 31, 2005

$                           

(d)     Additions for fiscal year ending December 31, 2005 (Line 2(b) plus Line
2(c))

$                           

(e)     Net Income (as reported on the audited financials for the fiscal year
ending December 31, 2006) times 50%

$                           

(f)      Net proceeds of Equity Issuances for fiscal year ending December 31,
2006

$                           

(g)     Additions for fiscal year ending December 31, 2006 (Line 2(e) plus Line
2(f))

$                           

(h)     Net Income (as reported on the audited financials for the fiscal year
ending December 31, 2007) times 50%

$                           

(i)      Net proceeds of Equity Issuances for fiscal year ending December 31,
2007

$                           

(j)      Additions for fiscal year ending December 31, 2007 (Line 2(h) plus Line
2(i))

$                           

(k)     Net Income (as reported on the audited financials for the fiscal year
ending December 31, 2008) times 50%

$                           

(l)      Net proceeds of Equity Issuances for fiscal year ending December 31,
2008

$                           

(m)    Additions for fiscal year ending December 31, 2008 (Line 2(k) plus Line
2(l))

$                           

(n)     Sum of Line 2(a), plus Line 2(d), plus 2(g), plus 2(j), plus 2(m)

$                           

(o)     Total Shareholders Equity

$                           

(p)     Accumulated Other Comprehensive Income

$                           

(q)     Intangible Assets

$                           

 

 

4

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

 

(r)    Actual Consolidated Tangible Net Worth (Line 2(o), minus or plus (as
applicable) Line 2(p), minus Line 2(q) - Must be greater than Line 2(n)

$                           

3.       Leverage Ratio (Section 8.16)

(a)    Indebtedness for Borrowed Money

$                           

(b)    Capital leases

$                           

(c)    Guaranties of Indebtedness for Borrowed Money and capital leases

$                           

(d)    Consolidated Funded Debt - Line 3(a), plus Line 3(b), plus Line 3(c)

$                           

(e)    Operating Cash Flow (from Schedule B)

$                           

(f)     Leverage Ratio - ratio of Line 3(d) to Line 3(e)

______ to _____

(g)    Maximum Ratio

3.25 to 1.00

4.       Asset Coverage Ratio (Section 8.18)

(a)    Cash Equivalent Investments

$                           

(b)    Accounts Receivable

$                           

(c)    Inventory

$                           

(d)    Net PP&E

$                           

 (e)   Line 4(a), plus Line 4(b), plus Line 4(c), plus Line 4(d)

$                           

(f)     Indebtedness for Borrowed Money

$                           

(g)    Capital leases

$                           

(h)    Guaranties of Indebtedness for Borrowed Money and capital leases

$                           

(i)     Consolidated Funded Debt - Line 4(f), plus Line 4(g), plus Line 4(h)

$                           

(j)     Asset Coverage Ratio - ratio of Line 4(e) to Line 4(i)

______ to _____

(k)    Minimum Ratio

(a) 2.50 to 1.0 from the period beginning February 3, 2006, through the earlier
of (i) the receipt of Net Cash Proceeds from an Equity Issuance and (ii)
September 30, 2007, and
(b) at all times thereafter, 3.00 to 1.0

 

5

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5.     Maximum Capital Expenditures (Section 9.12)

(a)     Actual

$                           

(b)     Maximum Amount

$10,000,000

6.     Maximum Capital Stock Repurchases (Section 9.04)

(a)     Actual

$                           

(b)     Maximum Amount

$20,000,000

 

 

6

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Exhibit N

List of Existing Guarantors

Alamo Capital Inc., a Nevada corporation

Alamo Group (IA) Inc., a Nevada corporation

Alamo Group (KS) Inc., a Kansas corporation

Alamo Group (SMC) Inc., a Nevada corporation

Alamo Group (TX) L.P., a Delaware limited partnership 

Alamo Group (USA) Inc., a Delaware corporation

Alamo Group Holdings, L.L.C., a Delaware limited liability company

Alamo Sales Corp., a Delaware corporation

Herschel-Adams Inc., a Nevada corporation

Alamo Group (IL) Inc.,  a Delaware corporation, f/k/a M&W Gear Company

Schulte (USA) Inc., a Florida corporation

Schwarze Industries, Inc., an Alabama corporation

Tiger Corporation, a Nevada corporation

Alamo Group Services, Inc., a Delaware corporation

Alamo Group (OH) Inc., a Delaware corporation

NP Real Estate Inc., an Ohio corporation

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

Exhibit M

Existing Indebtedness

Lender

Borrower

 Term

 Total
Amount
Available or
Original
Amount

Current
Amount
Outstanding

 Description of Collateral

Ford Motor Credit Corp

Schwarze Industries, Inc.

Renewable Annually

$1,000,000

$ -0-

Floor Planned Chassis purchased from Mid Tenn Ford

MB Credit Corp

Schwarze Industries, Inc.

Renewable Annually

$3,000,000

$ -0-

Floor Planned Chassis purchased from Neely Coble

National Australia Bank (Line of Credit and Security Agreement)

Schwarze Industries, Inc.

Renewable Annually

$1,300,000
(Australian)

$800,000
(Australian)

All assets except R/E, Bank of America Letter of Credit

Australian Guarantee Corporation (capital lease)

Schwarze Industries, Inc.

June, 2004

$500,000
(Australian)

$200,000
(Australian)

Sweepers

Toronto Dominion

Schulte (USA) Inc.

Renewable Annually

$3,000,000
(Canadian)

$1,250,000

Accounts Receivable, Inventory Alamo Group Inc. - Guaranty

Lloyds Bank 
Overdraft Facility

Alamo Group Europe

Renewable Annually

$4,000,000
(British Pounds)

0

Unsecured

Siemens Financial Services, Inc. (Software License)

Alamo Group Inc.

September, 2006

$348,000

$133,000

Unsecured

Hitachi Capital America Corporation

Schwarze Industries, Inc.

Open

$500,000

$190,000

All Inventory Floored through Hitachi

AICCO, Inc.
(Financing Insurance Premiums)

Alamo Group Inc.

September 1, 2006

$1,890,306

$1,374,768

Unsecured

 

 

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EXHIBIT R

Revolving Credit Commitments

 

 

Lender

Commitment

Bank of America, N.A.

$45,000,000

JPMorgan Chase Bank, N.A.

$45,000,000

Guaranty Bank

$35,000,000

Total

$125,000,000