** **

** **

 

 

 

 

**SEVENTH AMENDMENTOF AMENDED AND RESTATED**

**REVOLVING CREDITAGREEMENT**

 

THIS SEVENTHAMENDMENT OF AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this “***Amendment***”)is entered into effective November 6, 2009, between ALAMO GROUP INC., aDelaware corporation (“***Borrower***”), each of the banks or otherlending institutions that is a signatory to this Amendment (collectively, “***Lenders***”),and BANK OF AMERICA, N.A., a national banking association, as AdministrativeAgent (in such capacity, together with its successors and permitted assigns, “***AdministrativeAgent***”).

 

**R****ECITALS**

 

A.        Referenceis hereby made to that certain Amended and Restated Revolving Credit Agreementdated as of August 25, 2004, by and among Borrower, Lenders, and AdministrativeAgent (as renewed, extended, modified, and amended from time to time, the “***CreditAgreement***”), providing for a revolving line of credit and a letter ofcredit facility.

 

B.         Borrowerand each member of the Obligated Group will pledge to Administrative Agent, forthe benefit of Administrative Agent and Lenders, a first priority securityinterest in certain assets of Borrower and each member of the Obligated Groupin 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 ObligatedGroup. 

 

D.        Capitalizedterms used herein shall, unless otherwise indicated, have the respectivemeanings set forth in the Credit Agreement.

 

E.         Borrower,Lenders, and Administrative Agent desire to modify certain provisions containedin 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 arehereby acknowledged, the parties hereto agree as follows:

 

**1.         Amendmentsto the Credit Agreement. **

** **

**(a)        *Section1***of the Credit Agreement is hereby amended to delete the definitionsof “**Loan Documents**,” “**Obligated Group**,” “**Obligation**,”and “**Operating Cash Flow**” in their entirety and replace suchdefinitions with the following:

 

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

 

**Seventh Amendment**

 

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“**ObligatedGroup**” means the Company and its Consolidated Subsidiaries, Alamo Group(IA) Inc., a Nevada corporation; Alamo Group (SMC) Inc., a Nevada corporation; AlamoGroup (TX), Inc., f/k/a Alamo Industrial, Inc., a Texas corporation, successorin interest by conversion to Alamo Group (TX) L.P.; Alamo Group (USA) Inc., aDelaware 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 Delawarecorporation; Gradall Industries, Inc., formerly known as Alamo Group (OH) Inc.,a Delaware corporation; NP Real Estate Inc., an Ohio corporation; HenkeManufacturing Corporation, a Kansas corporation; Nite-Hawk Sweepers, LLC, aWashington limited liability company; Bush Hog, and any such other Person thatthe Company requests be included in the Obligated Group on the prior writtenapproval of the Required Lenders, which approval shall not be unreasonablywithheld.

 

“**Obligation**”means all present and future indebtedness, obligations, and liabilities of theCompany to Lenders or any of them, and all renewals and extensions thereof, orany part thereof, arising pursuant to this Loan Agreement or represented by theNotes, and all interest accruing thereon, all present and future indebtedness,liabilities, and obligations (and all renewals and extensions thereof or anypart thereof) now or hereafter owed to any Lender or any Affiliate of a Lenderarising from, by virtue of, or pursuant to any Financial Hedge entered into byany member of the Obligated Group, and reasonable attorneys' fees incurred inthe 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 andliabilities of the Company evidenced or arising pursuant to any of the otherLoan Documents, and all renewals and extensions thereof, or part thereof.

 

“**OperatingCash 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 orplus losses from the sale of assets, *plus* income tax expense, *plus*interest expense, *plus* depreciation, depletion, amortization and othernon-cash charges, *plus* Target Operating Cash Flow, and *plus* theRivard Operating Cash Flow with respect to such period, each as determined inaccordance with GAAP and each for the twelve (12) month period ended as of thedate of determination; provided, however, that, solely for the fiscal quarterending December 31, 2009, the Operating Cash Flow of Bush Hog shall be excludedfrom the calculation of Operating Cash Flow for the Company and itsConsolidated Subsidiaries, so long as, the Operating Cash Flow of Bush Hog forsuch fiscal quarter is not negative by more than $2,000,000.

 

**(b)        *Section1***of the Credit Agreement is hereby amended to add the following newdefinitions in the correct alphabetical order:

** **

“**BushHog**” means Bush Hog, Inc., a Delaware corporation, formerly known asAlamo Acquisition, Inc., a Delaware corporation.

 

“**BushHog Acquisition**” means the acquisition by Bush Hog of certain assetsfrom Bush Hog, LLC, a Delaware limited liability company as more fully described in that certain AssetPurchase 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 CollateralDocuments.

 

 

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**Seventh Amendment**

 

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“**CollateralDocuments**” means all documents executed by Borrower, any member of theObligated Group, or any other Person in favor of Administrative Agent for thebenefit 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 orplus loss from discontinued operations, extraordinary items, and each of thenon-recurring items related to the Bush Hog Acquisition for the fiscal quartersended December 31, 2009 and March 31, 2010, each as listed on Schedule Aattached to the Compliance Certificate for each such period, less gains or pluslosses 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) monthperiod ended as of the date of determination.

** **

**(c)        *Section2.05(d)*** of the Credit Agreement is hereby deleted in its entirety andreplaced with the following:

** **

**(d)        ApplicableMargin.****As used in this Agreement and the other Loan Documents, “**ApplicableMargin**” means, as to the Loans, a rate per annum determinedfor each fiscal quarter during the Company's Fiscal Year, beginning with thequarter ending September 30, 2009, by reference to the Leverage Ratio as of theend of the fiscal quarter (herein called the**“date of determination**”),as set forth in the most recent Compliance Certificate received byAdministrative Agent pursuant to Section 8.01(d) and the type of Advanceor Facility Fee, as applicable, as follows:

 

*(i)         **if**,on any date of determination, the following is met:  the Leverage Ratiois equal to or less than 2.50 to 1.0, **then** the Applicable Marginduring the fiscal quarter following the date of determination, expressed as arate per annum, shall be 1.00% for Prime Rate Advances, 3.00% for EurodollarAdvances, and 0.125% for the Facility Fee; and if not, then*

 

*(ii)*        ***if****,on any date of determination, the following is met: the Leverage Ratiois 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 ofdetermination, expressed as a rate per annum, shall be 1.125% for Prime RateAdvances, 3.125% for Eurodollar Advances, and 0.125% for the FacilityFee; and if not, then.*

 

*(iii)       **if**,on any date of determination, the following is met: the Leverage Ratiois 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 ofdetermination, expressed as a rate per annum, shall be 1.375% for Prime RateAdvances, 3.375% for Eurodollar Advances, and 0.25% for the FacilityFee;**and if not, then*

 

 

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**Seventh Amendment**

 

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* *

*(iv)       **if**,on any date of determination, the following is met: the Leverage Ratiois 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 ofdetermination, expressed as a rate per annum, shall be 1.625% for Prime RateAdvances, 3.625% for Eurodollar Advances, and 0.375% for the FacilityFee; and if not, then*

 

*(v)        **if**,on any date of determination, the following is met: the Leverage Ratiois greater than 4.00 to 1.0, **then**, the Applicable Margin duringthe fiscal quarter following the date of determination, expressed as a rate perannum, shall be 2.125% for Prime Rate Advances, 4.125% for EurodollarAdvances, and 0.50% for the Facility Fee*.

* *

*ForEurodollar Advances, the Applicable Margin for a Loan Year applies both to(i) Advances made during the current Loan Year and (ii) Advancesoutstanding during the current Loan Year that were made during a prior LoanYear.*

* *

*Ifthe interest rate changes hereunder because of a change in the ApplicableMargin, interest shall accrue at the changed rate beginning the first day ofthe month  after the earlier of the date on which the Company provides, or bywhich it was required to provide, pursuant to Section 8.01(d) of thisAgreement, the financial information necessary to determine the ApplicableMargin.  The Applicable Margin in effect from September 30, 2009 through thedelivery of the Compliance Certificate for the period ending September 30, 2009shall be determined based upon Pricing Level ____ as set forth in **clause (v)**above.*

** **

**(d)        *Article4***of the Credit Agreement is hereby amended to add the following new ***Section4.13*** at the end thereof:

 

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

** **

**(f)         *Section8.01(e)*** of the Credit Agreement is hereby deleted in its entirety andreplaced with the following:

 

 

 

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**Seventh Amendment**

 

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**(e)        AdditionalReports. **The Company shall (i) as soon as available and in any eventwithin forty-five (45) days after the end of each fiscal quarter of theCompany, copies of (A) a summary of accounts receivable, including an aging report withrespect to such accounts; provided, however, that that, upon written request ofAdministrative Agent, the Company shall promptly provide to AdministrativeAgent, in addition to the summary required under this clause (a), a detailedreport 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 itslegal counsel to deliver to Administrative Agent, within one hundred twenty(120) days after the end of each calendar year, a letter summarizing the statusof all material pending litigation involving or affecting the Company or itsConsolidated Subsidiaries or any of their assets.  The Company shall havesatisfied the requirement set forth in clause (ii) above if it furnishes toAdministrative Agent a letter comparable to and consistent with that furnishedby the Company's counsel to the Company's outside auditors in response to anaudit inquiry covering the same calendar year.  

** **

**(e)        *Section8.14*** of the Credit Agreement is hereby deleted in its entirety andreplaced with the following:

 

**8.14     MinimumEBIT to Interest Expense Ratio.**  The Company shall maintain, as of thelast day of each fiscal quarter during the term hereof, a ratio of (a) EBIT forthe Company and its Consolidated Subsidiaries, divided by (b) Interest Expense,each for the twelve (12) month period ended as of the date of determination, ofnot less than 2.00 to 1.00.

** **

**(f)         *Section8.16*** of the Credit Agreement is hereby deleted in its entirety andreplaced with the following:

** **

**8.16.    LeverageRatio.**  The Company, as of any date during the term hereof, shallmaintain a ratio of Consolidated Funded Debt to Operating Cash Flow notexceeding 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 |
|                                     |         |
| Fiscalquarters ended March 31, 2011      |         |
| through December 31, 2011:               | 3.25 to 1.00 |
|                                     |         |
| Fiscalquarter ended March 31, 2012       |         |
| And each fiscal quarter thereafter:      | 3.00 to 1.00 |

 

**(g)        *Section11.09*** of the Credit Agreement is hereby deleted in its entirety andreplaced with the following:

 

**11.09   Guarantyand Collateral Matters.**  The Lenders irrevocably authorizeAdministrative Agent, at its option and in its discretion to:

 

(a)        releaseany Guarantor from its obligations under the Guaranty if such Person ceases tobe a Subsidiary as a result of a transaction permitted hereunder and

 

 

 

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**Seventh Amendment**

 

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

 

Uponrequest by Administrative Agent at any time, the Required Lenders will confirmin writing Administrative Agent’s authority to release any Guarantor from itsobligations under the Guaranty pursuant to this Section 11.09.

** **

**(h)        *ExhibitJ***(and attached***Schedule A***thereto)****are herebydeleted in their entirety and replaced with ***Exhibit J*** (andattached***Schedule A***)****attached hereto.

 

**(i)         *ExhibitR*** to the****Credit Agreement is hereby deleted in its entirety andreplaced with ***Exhibit R*** attached hereto.

** **

**2.         Amendmentof Credit Agreement and Other Loan Documents.**

 

**(a)**        Allreferences in the Loan Documents to the Credit Agreement shall includereferences 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)**        Allreferences in the Loan Documents to any Original Note shall include referencesto 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)**        Anyand all of the terms and provisions of the Loan Documents are hereby amendedand 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 asamended by this Amendment, (b) ratifies and confirms that all guaranties,assurances, and Liens granted, conveyed, or assigned to Administrative Agentfor 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 asAdministrative 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 ofthe date of this Amendment: (a) each of the items and documents listed on ***ExhibitA*** (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 financingstatements in connection with the Collateral), any Governmental Authority isrequired to authorize, or is otherwise required in connection with, theexecution, delivery, and performance of the Amendment Documents by Borrower andeach Guarantor; (c) the Loan Documents, as amended by the AmendmentDocuments, are valid and binding upon Borrower and each Guarantor and areenforceable against Borrower and each Guarantor in accordance with theirrespective terms, except as limited by debtor relief laws and generalprinciples of equity; (d) the execution, delivery, and performance byBorrower and each Guarantor of the Amendment Documents does not require theconsent of any other Person and do not and will not constitute a violation ofany governmental requirement, order of any Governmental Authority, or materialagreements to which Borrower or any Guarantor is a party or by which Borroweror any Guarantor is bound; (e) all representations and warranties in theCredit Agreement are true and correct in all material respects on and as of thedate of this Amendment, except to the extent that (i) any of them speak to adifferent specific date, or (ii) the facts on which any of them were based havebeen changed by transactions contemplated or permitted by the Credit Agreement;and (f) after giving effect to the Amendment Documents, no Potential Default orEvent of Default exists.

 

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

 

**(a)**        theAdministrative Agent shall have received each of the Amendment Documents, eachacceptable to Administrative Agent in its sole discretion;

 

**(b)**        therepresentations and warranties in this Amendment are true and correct in allmaterial respects on and as of the date of this Amendment, except to the extentthat (i) any of them speak to a different specific date, or (ii) the facts onwhich any of them were based have been changed by transactions contemplated orpermitted by the Credit Agreement; 

 

(c)        Borrowershall have paid to Administrative Agent (i) for the account of each Lender, anamendment fee in an amount equal to fifty basis points (0.50%) times theCommitment of such Lender and (ii) all other fees and expenses required to bepaid by Borrower under the Loan Documents; and

 

**(c)       **aftergiving effect to this Amendment, no Potential Default or Event of Defaultexist.

 

**7.         ContinuedEffect.**  Except to the extent amended hereby or by any documents executedin connection herewith, all terms, provisions, and conditions of the CreditAgreement and the other Loan Documents, and all documents executed inconnection therewith, shall continue in full force and effect and shall remainenforceable and binding in accordance with their respective terms.

 

**9.         Miscellaneous.** Unless stated otherwise (a) the singular number includes the plural and *viceversa* and words of any gender include each other gender, in each case, asappropriate, (b) headings and captions may not be construed in interpretingprovisions, (c) this Amendment shall be construed -- and its performanceenforced -- under Texas law, (d) if any part of this Amendment is for anyreason found to be unenforceable, all other portions of it nevertheless remainenforceable, and (e) this Amendment may be executed in any number ofcounterparts with the same effect as if all signatories had signed the samedocument, and all of those counterparts must be construed together toconstitute the same document.

 

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

 

**11.       ENTIRETIES.  THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, ASAMENDED BY THIS AMENDMENT, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIESABOUT THE SUBJECT MATTER OF THE CREDIT AGREEMENT AND MAY NOT BE CONTRADICTED BYEVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THEPARTIES.  THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.**

 

***[Remainder ofPage Intentionally Left Blank;***

***Signature Pagesto Follow.]***

 

 

 

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**Seventh Amendment**

 

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EXECUTED as ofthe 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.**,                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| asAdministrative Agent                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| By:                                                                               |
|            Tiffany Shin, AssistantVice President                                                                                                                                                                                                                                                                                                                                                                                 |

 

 

 

 

 

 

 

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***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 FargoBank, N.A.,** as a Lender                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| By:                                                                               |
|             Morris G. Camp, Jr., Senior Vice President                                                                                                                                                                                                                                                                                                                                                                      |

            

 

 

***Signature Page to Seventh Amendment***

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| **GUARANTYBANK,**as a Lender                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| By:                                                                               |
|             Name:                                                                                          |
|             Title:                                                                          |

            

 

 

 

***Signature Page to Seventh Amendment***

 

 

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** **

| **CoöperatieveCentrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New York Branch,**as a Lender                                                                                                                                                                                                                                                                                                                                                          |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| By:                                                                               |
|             Name:                                                                                          |
|             Title:                                                                          |
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| By:                                                                               |
|             Name:                                                                                          |
|             Title:                                                                 ***S***  |

 

 

 

 

 

 

 

***Signature Page to Seventh Amendment***

 

 

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To induce theAdministrative Agent and Lenders to enter into this Amendment, each of theundersigned (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 Lendersunder the Loan Documents are not released, diminished, impaired, reduced, orotherwise adversely affected by this Amendment and continue to guarantee,assure, and secure the full payment and performance of all present and futureObligation (except to the extent specifically limited by the terms of suchguaranties, assurances, or Liens), (c) agree to perform such acts and dulyauthorize, execute, acknowledge, deliver, file, and record such additionalguaranties, assignments, security agreements, deeds of trust, mortgages, andother agreements, documents, instruments, and certificates as AdministrativeAgent 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 andagreement binds the undersigned and their successors and permitted assigns andinures to Administrative Agent, Lenders, and their respective successors andpermitted 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-HAWKSWEEPERS, LLC**, a Washington limited liability company                                                                                                                                                                                                                                                                  | **TIGER CORPORATION**,                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                | a Nevada corporation                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                |
| By:                                                        | By:		                                                      |
|       Name:                                                                         | Robert H.George                                                                                                                                                                                                                                                                                                                     |
|       Title:                                                         | Vice President ‐Administration                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                | **GRADALLINDUSTRIES, 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 Kansascorporation, successor in interest by merger to Alamo Group (KS), Inc.                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                | By:		                                                      |
|                                                                                                                                                                                                                                                                                                                                | Name:                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                |       Title:                                                         |
|                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                                                                                                |

***Signature Page to Seventh Amendment***

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**EXHIBIT A**

** **

**AMENDMENTDOCUMENTS**

** **

1.         Amendment; 

 

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

 

3.         Uniform CommercialCode, tax, and judgment lien searches in the jurisdiction of formation of eachmember of the Obligated Group, satisfactory in form and content toAdministrative Agent;

 

4.         Officer’s Certificatefor each member of the Obligated Group certifying as to (a) the constituentdocuments of such Obligated Group member, (b) the incumbency of the officer’sof such Obligated Group member authorized to execute Loan Documents on behalfof such Obligated Group member, (c) resolutions of the Board of Directors (orequivalent governing body) of such Obligated Group member authorizing the LoanDocuments executed by such Obligated Group member; and (d) a Certificate ofExistence and Good Standing for such Obligated Group member, issued by theSecretary of State of the State of formation of such Obligated Group member,and each other jurisdiction in which such Obligated Group member is required tobe 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 CommercialCode Financing Statements listing each member of the Obligated Group as debtor,and Administrative Agent as secured party, listing the Collateral, and filed inthe applicable filing jurisdiction for each member of the Obligated Group;

 

6.         Evidence of insuranceacceptable to Administrative Agent with respect to the Collateral, listingAdministrative Agent as additional loss payee;

 

7.         Guaranty Agreementexecuted by Bush Hog; and

 

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

 

 

2

 

**EXHIBIT A**

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EXHIBIT J

 

COMPLIANCE CERTIFICATE

 

Date:                                                                       

 

Bankof America, N.A.

300  Convent Street

PostOffice Box 300

San  Antonio, Texas  78291

 

Attn:Susan Jarboe, Vice President

 

This Certificate is delivered to you pursuant to thatcertain Amended and Restated Revolving Credit Agreement (the “**LoanAgreement**”), dated August 25, 2004, by and between Bank of America, asAdministrative Agent for the Lenders, the Lenders and Alamo Group Inc. (the “**Company**”)and the subsidiaries of the Company named therein as members of the “**ObligatedGroup**.”  All capitalized terms not otherwise defined shall have the meaningassigned to them in the Loan Agreement.

 

As of the date of this Certificate, the Companycertifies to Lenders the following:

 

I.      COMPLIANCE:

 

A.    The representations and warranties stated in Article6 of the Loan Agreement continue to be true, except:

 

[List any exceptions]

 

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

 

[List any exceptions]

 

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

 

[List any exceptions]

 

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

 

[List any exceptions]

 

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

 

[List any exceptions]

 

F.     The accompanying balance sheet and operatingstatement and supporting financial data have been prepared in accordance withGAAP and are true and correct, subject to normal year end audit andadjustments.

 

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

 

 

 1

**EXHIBIT J**

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(a)           **Minimum EBIT to Interest ExpenseRatio**

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

 

(b)           **Maximum Leverage Ratio**

(Section 8.16 - maximum asfollows 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 1.50to 1.00):                                                              to                        

 

                (d)           **MaximumCapital Stock Repurchases**

                                (Section9.04 – maximum of $20,000,000

                                aggregateduring the term of the Loan Agreement )                      $                                              

 

                (e)           **MaximumCapital Expenditures**

                                (Section9.12 – maximum of $17,500,000

                                aggregateduring any fiscal year )                                                     $                                                              

 

 

 

 

Verytruly yours,

 

ALAMOGROUP INC.

 

 

By:                                                                                                                          

 

PrintedName:                                                                                       

 

Title:                                                                                                       

 

 

**1**

 

**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                                                                                     |  

$                            |  

  |

 

 

 

 

 

 

 

 

2

 

**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                                                                                                                                                         |

 

 

 

 

3

 

**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**

 

----