SEVENTH AMENDMENT OF AMENDED AND RESTATED

REVOLVING CREDIT AGREEMENT

 

THIS SEVENTH AMENDMENT OF AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this
“Amendment”) is entered into effective November 6, 2009, 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.         Borrower and each member of the Obligated Group will pledge to
Administrative Agent, for the benefit of Administrative Agent and Lenders, a
first priority security interest in certain assets of Borrower and each member
of the Obligated Group in order to secure the Obligation.

 

C.         Borrower, Administrative Agent, and lenders desire to amend the
Credit Agreement to (a) add the security referenced in Recital B above, (b)
change the pricing, (c) change the Leverage Ratio, (d) add a new EBIT to
Interest Expense covenant, and (e) add Bush Hog, Inc., a Delaware corporation as
a member of the Obligated Group.

 

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

 

E.         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)        Section 1 of the Credit Agreement is hereby amended to delete the
definitions of “Loan Documents,” “Obligated Group,” “Obligation,” and “Operating
Cash Flow” in their entirety and replace such definitions with the following:

 

“Loan Documents” means (a) this Loan Agreement, the Notes , the Letter of
Credit, the guaranties, the Collateral Documents, (b) all agreements,
certificates, documents or instruments in favor of Administrative Agent or
Lenders ever delivered pursuant to this Loan Agreement or otherwise delivered in
connection with all or any part of the Obligation, and (c) any and all future
renewals, extensions, restatements, reaffirmations, or amendments of, or
supplements to, all or any part of the foregoing.

 

Seventh Amendment

 

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“Obligated Group” means the Company and its Consolidated Subsidiaries, Alamo
Group (IA) Inc., a Nevada corporation; Alamo Group (SMC) Inc., a Nevada
corporation; Alamo Group (TX), Inc., f/k/a Alamo Industrial, Inc., a Texas
corporation, successor in interest by conversion to Alamo Group (TX) L.P.; Alamo
Group (USA) Inc., a Delaware corporation; Alamo Sales Corp., a Delaware
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; Gradall Industries, Inc., formerly known
as Alamo Group (OH) Inc., a Delaware corporation; NP Real Estate Inc., an Ohio
corporation; Henke Manufacturing Corporation, a Kansas corporation; Nite-Hawk
Sweepers, LLC, a Washington limited liability company; Bush Hog, 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.

 

“Obligation” means all present and future indebtedness, obligations, and
liabilities of the Company to Lenders or any of them, and all renewals and
extensions thereof, or any part thereof, arising pursuant to this Loan Agreement
or represented by the Notes, and all interest accruing thereon, all present and
future indebtedness, liabilities, and obligations (and all renewals and
extensions thereof or any part thereof) now or hereafter owed to any Lender or
any Affiliate of a Lender arising from, by virtue of, or pursuant to any
Financial Hedge entered into by any member of the Obligated Group, and
reasonable attorneys' fees incurred in the enforcement or collection thereof,
regardless of whether such indebtedness, obligations and liabilities are direct,
indirect, fixed, contingent, joint, several or joint and several; together with
all indebtedness, obligations and liabilities of the Company evidenced or
arising pursuant to any of the other Loan Documents, and all renewals and
extensions thereof, or part thereof.

 

“Operating Cash Flow” means, for the Company and its Consolidated Subsidiaries,
for any period, the sum of Net Income, less income or plus loss from
discontinued operations and extraordinary items, less gains or plus losses from
the sale of assets, plus income tax expense, plus interest expense, plus
depreciation, depletion, amortization and other non-cash charges, plus Target
Operating Cash Flow, and plus the Rivard Operating Cash Flow with respect to
such period, each as determined in accordance with GAAP and each for the twelve
(12) month period ended as of the date of determination; provided, however,
that, solely for the fiscal quarter ending December 31, 2009, the Operating Cash
Flow of Bush Hog shall be excluded from the calculation of Operating Cash Flow
for the Company and its Consolidated Subsidiaries, so long as, the Operating
Cash Flow of Bush Hog for such fiscal quarter is not negative by more than
$2,000,000.

 

(b)        Section 1 of the Credit Agreement is hereby amended to add the
following new definitions in the correct alphabetical order:

 

“Bush Hog” means Bush Hog, Inc., a Delaware corporation, formerly known as Alamo
Acquisition, Inc., a Delaware corporation.

 

“Bush Hog Acquisition” means the acquisition by Bush Hog of certain assets from
Bush Hog, LLC, a Delaware limited liability company as more fully described in
that certain Asset Purchase Agreement dated September 4, 2009, by and among
Borrower, Bush Hog, LLC, CC Industries, Inc., a Delaware corporation, and Bush
Hog.

 

“Collateral” means all assets pledged by Borrower or any other Person under the
Collateral Documents.

 

 

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“Collateral Documents” means all documents executed by Borrower, any member of
the Obligated Group, or any other Person in favor of Administrative Agent for
the benefit of the Lenders (whether directly or by assignment from a prior
agent), to secure payment and performance of the Obligation or any part thereof.

 

“EBIT” means, for the Company, for any period, the sum of Net Income, less
income or plus loss from discontinued operations, extraordinary items, and each
of the non-recurring items related to the Bush Hog Acquisition for the fiscal
quarters ended December 31, 2009 and March 31, 2010, each as listed on Schedule
A attached to the Compliance Certificate for each such period, less gains or
plus losses from the sale of assets, plus income tax expense, plus interest
expense, each as determined in accordance with GAAP and each for the twelve (12)
month period ended as of the date of determination.

 

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

 

(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, 2009, 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 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 1.00% for Prime Rate Advances, 3.00% 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 2.50 to 1.0 and less than or equal to 3.00 to 1.0, then
the Applicable Margin during the fiscal quarter following the date of
determination, expressed as a rate per annum, shall be 1.125% for Prime Rate
Advances, 3.125% 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 3.00 to 1.0 and less than or equal to 3.50 to 1.0, then
the Applicable Margin during the fiscal quarter following the date of
determination, expressed as a rate per annum, shall be 1.375% for Prime Rate
Advances, 3.375% for Eurodollar Advances, and 0.25% for the Facility Fee; and if
not, then

 

 

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(iv)       if, on any date of determination, the following is met: the Leverage
Ratio is greater than 3.50 to 1.0 and less than or equal to 4.00 to 1.0, then
the Applicable Margin during the fiscal quarter following the date of
determination, expressed as a rate per annum, shall be 1.625% for Prime Rate
Advances, 3.625% for Eurodollar Advances, and 0.375% 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 4.00 to 1.0, then, the Applicable Margin during the fiscal
quarter following the date of determination, expressed as a rate per annum,
shall be 2.125% for Prime Rate Advances, 4.125% for Eurodollar Advances, and
0.50% for the Facility Fee.

 

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 September 30, 2009 through the delivery of the
Compliance Certificate for the period ending September 30, 2009 shall be
determined based upon Pricing Level ____ as set forth in clause (v) above.

 

(d)        Article 4 of the Credit Agreement is hereby amended to add the
following new Section 4.13 at the end thereof:

 

4.13     Security.  The Obligation shall be secured by the Liens granted by each
member of the Obligated Group pursuant to the Collateral Documents, until such
Liens are released pursuant to the terms thereof, and any other Liens granted to
Administrative Agent for the ratable benefit of Lenders pursuant to the terms of
this Agreement or any other Loan Document.

 

(f)         Section 8.01(e) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

 

 

 

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(e)        Additional Reports.  The Company shall (i) as soon as available and
in any event within forty-five (45) days after the end of each fiscal quarter of
the Company, copies of (A) a summary of accounts receivable, including an aging
report with respect to such accounts; provided, however, that that, upon written
request of Administrative Agent, the Company shall promptly provide to
Administrative Agent, in addition to the summary required under this clause (a),
a detailed report of all accounts receivable, (B) a summary of all inventory by
location, and (C) a summary of all machinery and equipment by location, (ii)
cause its legal counsel to deliver to Administrative Agent, within one hundred
twenty (120) days after the end of each calendar year, a letter summarizing the
status of all material pending litigation involving or affecting the Company or
its Consolidated Subsidiaries or any of their assets.  The Company shall have
satisfied the requirement set forth in clause (ii) above if it furnishes to
Administrative Agent a letter comparable to and consistent with that furnished
by the Company's counsel to the Company's outside auditors in response to an
audit inquiry covering the same calendar year. 

 

(e)        Section 8.14 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

 

8.14     Minimum EBIT to Interest Expense Ratio.  The Company shall maintain, as
of the last day of each fiscal quarter during the term hereof, a ratio of (a)
EBIT for the Company and its Consolidated Subsidiaries, divided by (b) Interest
Expense, each for the twelve (12) month period ended as of the date of
determination, of not less than 2.00 to 1.00.

 

(f)         Section 8.16 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

 

8.16.    Leverage Ratio.  The Company, as of any date during the term hereof,
shall maintain a ratio of Consolidated Funded Debt to Operating Cash Flow not
exceeding the ratio set forth below for the applicable period set forth below:

 

Fiscal quarter ended September 30, 2009:

3.75 to 1.00

 

 

Fiscal quarter ended December 31, 2009:

4.25 to 1.00

 

 

Fiscal quarter ended March 31, 2010:

4.25 to 1.00

 

 

Fiscal quarter ended June 30, 2010:

4.00 to 1.00

 

 

Fiscal quarter ended September 30, 2010:

3.75 to 1.00

 

 

Fiscal quarter ended December 31, 2010:

3.50 to 1.00

 

 

Fiscal quarters ended March 31, 2011

 

through December 31, 2011:

3.25 to 1.00

 

 

Fiscal quarter ended March 31, 2012

 

And each fiscal quarter thereafter:

3.00 to 1.00

 

(g)        Section 11.09 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:

 

11.09   Guaranty and Collateral Matters.  The Lenders irrevocably authorize
Administrative Agent, at its option and in its discretion to:

 

(a)        release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder and

 

 

 

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Seventh Amendment

 

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(b)        transfer or release any Lien on, or after foreclosure or other
acquisition of title by Administrative Agent on behalf of Lenders to transfer or
sell, any Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full of all of the Obligation (other than contingent
indemnification obligations) and the expiration or termination of all Letters of
Credit; or (ii) after foreclosure or other acquisition of title if approved by
the Required Lenders

 

Upon request by Administrative Agent at any time, the Required Lenders will
confirm in writing Administrative Agent’s authority to release any Guarantor
from its obligations under the Guaranty pursuant to this Section 11.09.

 

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

 

(i)         Exhibit R to the Credit Agreement is hereby deleted in its entirety
and replaced with Exhibit R attached hereto.

 

2.         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.

 

(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.

 

3.         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 (i) to the extent specifically limited by
the terms of such Guaranties, assurances or Liens, or (ii) as otherwise
permitted in this Amendment), 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.

 

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Seventh Amendment

 

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5.         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 (other than filing of financing
statements in connection with the Collateral), 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.

 

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

 

(a)        the Administrative Agent shall have received each of 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)        Borrower shall have paid to Administrative Agent (i) for the account
of each Lender, an amendment fee in an amount equal to fifty basis points
(0.50%) times the Commitment of such Lender and (ii) all other fees and expenses
required to be paid by Borrower under the Loan Documents; and

 

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

 

7.         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.

 

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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Seventh Amendment

 

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EXECUTED as of the day and year first mentioned.

 

 

ALAMO GROUP INC.,

a Delaware corporation

 

 

By:      
                                                                       

           Robert H. George

           Vice President

 

 

 

 

 

 

 

 

 

 

Signature Page to Seventh Amendment

 

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BANK OF AMERICA, N.A.,

as Administrative Agent

 

 

By:      
                                                                       

           Tiffany Shin, Assistant Vice President

 

 

 

 

 

 

 

 

 

 

Signature Page to Seventh Amendment

 

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BANK OF AMERICA, N.A.,

as a Lender

 

 

By:      
                                                                       

            Susan Jarboe, Vice President

           

 

 

 

 

 

 

Signature Page to Seventh Amendment

 

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Wells Fargo Bank, N.A., as a Lender

 

By:      
                                                                       

            Morris G. Camp, Jr., Senior Vice President

           

 

 

Signature Page to Seventh Amendment

 

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GUARANTY BANK, as a Lender

 

 

By:      
                                                                       

            Name:                                                             

           
Title:                                                                

           

 

 

 

Signature Page to Seventh Amendment

 

 

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Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New
York Branch, as a Lender

 

 

By:      
                                                                       

            Name:                                                             

           
Title:                                                                

     

By:      
                                                                       

            Name:                                                             

           
Title:                                                                 S

 

 

 

 

 

 

 

Signature Page to Seventh Amendment

 

 

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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), (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 GROUP (TX), INC.,

ALAMO GROUP (USA) INC.,

f/k/a Alamo Industrial, Inc., a Texas corporation

a Delaware corporation

 

 

 

 

By:                                                            

By:                                                      

Robert H. George

      Robert H. George

Vice President – Administration

      Vice President – Administration

 

 

ALAMO GROUP (IA) INC.,

ALAMO SALES CORP.,

a Nevada corporation

a Delaware corporation

 

 

By:                                                      

By:                                                      

Robert H. George

      Robert H. George

Vice President – Administration

      Vice President – Administration

 

 

 

 

ALAMO GROUP (SMC) INC.,

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

a Nevada corporation

 

 

 

By:                                                      

By:                                                      

Robert H. George

      Robert H. George

Vice President – Administration

      Vice President – Administration

 

 

BUSH HOG, INC.,

SCHWARZE INDUSTRIES, INC.,

a Delaware corporation

an Alabama corporation

 

 

By:                                                      

By:                                                      

Name:                                           

      Robert H. George

      Title:                                              

      Vice President – Administration

 

 

 

 

 

 

 

 

Signature Page to Seventh Amendment

 

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ALAMO GROUP SERVICES, INC.,

SCHULTE (USA) INC.,

a Delaware corporation

a Florida corporation

 

 

By:                                                      

By:                                                      

Robert H. George

Robert H. George

Vice President – Administration

Vice President – Administration

 

 

 

 

NITE-HAWK SWEEPERS, LLC, a Washington limited liability company

TIGER CORPORATION,

 

a Nevada corporation

 

 

By:                                                      

By:                                                      

      Name:                                           

Robert H. George

      Title:                                              

Vice President ‑ Administration

 

 

 

 

 

GRADALL INDUSTRIES, INC., formerly known as Alamo Group (OH) Inc., a Delaware
corporation

 

 

 

By:                                                      

 

Name:                                           

 

      Title:                                              

 

 

 

 

 

NP REAL ESTATE Inc., an Ohio corporation

 

 

 

By:                                                      

 

Name:                                           

 

      Title:                                              

 

 

 

 

 

HENKE MANUFACTURING CORPORATION, a Kansas corporation, successor in interest by
merger to Alamo Group (KS), Inc.

 

 

 

By:                                                      

 

Name:                                           

 

      Title:                                              

 

 

Signature Page to Seventh Amendment

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EXHIBIT A

 

AMENDMENT DOCUMENTS

 

1.         Amendment;

 

2.         Pledge and Security Agreement (each a “Security Agreement”) executed
by each member of the Obligated Group, granting to Administrative Agent, for the
benefit of Administrative Agent and each Lender a first priority security
interest in all accounts, inventory, and equipment of each member of the
Obligated Group;

 

3.         Uniform Commercial Code, tax, and judgment lien searches in the
jurisdiction of formation of each member of the Obligated Group, satisfactory in
form and content to Administrative Agent;

 

4.         Officer’s Certificate for each member of the Obligated Group
certifying as to (a) the constituent documents of such Obligated Group member,
(b) the incumbency of the officer’s of such Obligated Group member authorized to
execute Loan Documents on behalf of such Obligated Group member, (c) resolutions
of the Board of Directors (or equivalent governing body) of such Obligated Group
member authorizing the Loan Documents executed by such Obligated Group member;
and (d) a Certificate of Existence and Good Standing for such Obligated Group
member, issued by the Secretary of State of the State of formation of such
Obligated Group member, and each other jurisdiction in which such Obligated
Group member is required to be qualified to do business, each as of a date that
is not more than thirty (30) days prior to the date of this Amendment;

 

5.         Uniform Commercial Code Financing Statements listing each member of
the Obligated Group as debtor, and Administrative Agent as secured party,
listing the Collateral, and filed in the applicable filing jurisdiction for each
member of the Obligated Group;

 

6.         Evidence of insurance acceptable to Administrative Agent with respect
to the Collateral, listing Administrative Agent as additional loss payee;

 

7.         Guaranty Agreement executed by Bush Hog; and

 

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

 

 

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EXHIBIT A

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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: Susan Jarboe, 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.

 

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:

 

 

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EXHIBIT J

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(a)           Minimum EBIT to Interest Expense Ratio

(Section 8.14 - minimum of 2.00 to
1.00):                                                               to   
                   

 

(b)           Maximum Leverage Ratio

(Section 8.16 - maximum as follows for each

Period listed below:

 

Fiscal quarter ended September 30, 2009:         

 3.75 to 1.00

 

 

Fiscal quarter ended December 31, 2009:          

4.25 to 1.00

 

 

Fiscal quarter ended March 31, 2010:  

 4.25 to 1.00

 

 

Fiscal quarter ended June 30, 2010:    

4.00 to 1.00

 

 

Fiscal quarter ended September 30, 2010: 

 3.75 to 1.00

 

 

Fiscal quarter ended December 31, 2010:    

3.50 to 1.00

 

 

Fiscal quarters ended March 31, 2011

 

through December 31, 2011:   

3.25 to 1.00

 

 

Fiscal quarter ended March 31, 2012

 

And each fiscal quarter thereafter:        

3.00 to 1.00

 

Actual:                                                                                  
                    to                       

 

(c)           Minimum Asset Coverage Ratio

(Section 8.18 - minimum of 1.50 to
1.00):                                                               to   
                   

 

                (d)           Maximum Capital Stock Repurchases

                                (Section 9.04 – maximum of $20,000,000

                                aggregate during the term of the Loan Agreement
)                      $                                             

 

                (e)           Maximum Capital Expenditures

                                (Section 9.12 – maximum of $17,500,000

                                aggregate during any fiscal year
)                                                    
$                                                             

 

 

 

 

Very truly yours,

 

ALAMO GROUP INC.

 

 

By:         
                                                                                                               

 

Printed
Name:                                                                                      

 

Title:                                                                                                      

 

 

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EXHIBIT J

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SCHEDULE A TO COMPLIANCE CERTIFICATE

 

(for the period ending ___________________________)

 

 

 

Covenant

 

At End of Subject Period

 

 

1.       EBIT to Interest Expense Ratio (Section 8.14)

 

 

 

 

 

(a)     Net Income

 

$                           

 

 

 

(b)     less income or plus loss from discontinued operations and extraordinary
items

 

$                           

 

 

 

(c)     less gains or plus losses from the sale of assets

 

$                           

 

 

 

(d)     plus income tax expense

 

$                           

 

 

(e)     plus interest expense

 

$                           

 

 

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

 

 

 

$                           

 

(g)     Interest Expense

 

 

 

$                           

 

(h)     EBIT to Interest Expense Ratio - ratio of Line 1(f) to Line 1(h)

 

 

 

______ to _____

 

(i)      Minimum Ratio

 

 

 

2.00 to 1.00

 

 

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

 

 

 

As set forth for the applicable period in Section 8.16

 

4.       Asset Coverage Ratio (Section 8.18)

 

 

 

 

 

(a)     Cash Equivalent Investments

 

$                           

 

 

 

 

 

 

 

 

 

 

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EXHIBIT J

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(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) 1.50 to 1.0

 

5.       Maximum Capital Expenditures (Section 9.12)

 

 

 

 

 

(a)     Actual

 

 

 

$                           

 

(b)     Maximum Amount

 

 

 

$17,500,000

 

6.       Maximum Capital Stock Repurchases (Section 9.04)

 

 

 

 

 

(a)     Actual

 

 

 

$                           

 

(b)     Maximum Amount

 

 

 

$20,000,000

 

 

 

 

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EXHIBIT J

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EXHIBIT R

 

Revolving Credit Commitments

 

 

Lender

Commitment

Bank of America, N.A.

$40,000,000

Wells Fargo Bank, N.A.

$40,000,000

Guaranty Bank

$25,000,000

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New
York Branch

$20,000,000

Total

$125,000,000

 

 

 

 

 

 

 

 

 

 

EXHIBIT R

 

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