Exhibit 10.26





 


AMENDMENT OF
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT




THIS AMENDMENT
OF AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this "Amendment")
is entered into effective January 5, 2005, between ALAMO GROUP INC., a Delaware
corporation ("Borrower"), each of the banks or other lending
institutions that is a signatory to this Amendment (collectively, "Lenders"),
and BANK OF AMERICA, N.A., a national banking association, as Administrative
Agent (in such capacity, together with its successors and permitted assigns, "Administrative
Agent").




R E
C I T A L S




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




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




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




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




1.         Amendments
to the Credit Agreement.  


(a)        Section
1 of the Credit Agreement is hereby amended to delete the definitions
of "Operating Cash Flow" and "Permitted Acquisition"
in their entirety and replace such definitions with the following:




"Operating
Cash Flow" means, for the Company and its Consolidated Subsidiaries,
for any period, the sum of Net Income, less income or plus loss from
discontinued operations and extraordinary items, less gains or plus losses from
the sale of assets, plus income tax expense, plus interest expense, plus
depreciation, depletion, amortization and other non-cash charges, plus Target
Operating Cash Flow, each as determined in accordance with GAAP and each for
the twelve (12) month period ended as of the date of determination.




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




(a)        the
consideration paid for any individual Acquisition shall be less than
$20,000,000;




(b)        the
consideration paid for all Acquisitions during the current fiscal year, in the
aggregate, after giving effect to the Acquisition, shall not exceed
$30,000,000;




A- 171263.3                                                                                  1                                        
                                       Amendment 




                                                                                                                                                              




















                                                                                                                                                            




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




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




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




(b)        Section
1 of the Credit Agreement is hereby amended to add the following
definitions:




"Target"
means any Person that has been or may be acquired pursuant to an Acquisition
permitted hereunder.




"Target
Operating Cash Flow" means, for any Target, (a) with respect to the
proforma calculations required pursuant to (x) paragraph (e) of the
definition of Permitted Acquisition and (y) Section 8.01(f), either (i)
the actual Operating Cash Flow of the Target for the four (4) quarter period
ended immediately prior to the date of such Acquisition or (ii) an amount
agreed upon by Borrower and Required Lenders for the four (4) quarter period
ended immediately prior to the date of such Acquisition and (b) with respect to
the calculation of any financial covenant as reported by Borrower pursuant to
the requirements of Section 8.01(d), either (i) the actual Operating
Cash Flow for each Target for the portion of the twelve (12) month (or four (4)
quarter) period ended on the date of determination that is prior to the date of
the Acquisition of such Target or (ii) an amount agreed upon by Borrower and
Required Lenders for the portion of the twelve (12) month (or four (4) quarter)
period ended on the date of determination that is prior to the date of the
Acquisition of such Target.


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


 


A- 171263.3                                                                                  2                                        
                                       Amendment 




                                                                                                                                                              




















(d)        Compliance
Certificate.  Within forty-five (45) days after the end of each first
three fiscal quarters of the Company, and concurrent with the delivery of the
annual financial statements that must delivered pursuant to Section 8.01(b),
a certificate executed by the President, Vice President - Controller, or Vice
President - Administration of the Company, stating that a review of the
activities of the Company and its Consolidated Subsidiaries during that fiscal
quarter has been made under the officer's supervision and that the Company and
its Consolidated Subsidiaries have performed each and every obligation and
covenant contained herein and are not in default under any of the same or, if a
default has occurred, specifying the nature and status thereof, and setting
forth a computation in reasonable detail as of the end of the period covered by
such statements, of compliance, to the extent required, with Sections 8.14,
8.15, 8.16, and 8.18, (including calculations supporting
Target Operating Cash Flow with respect to each Target)  in addition to the
foregoing, and within 120 days after the close of each fiscal year of the
Company, the President, Vice President - Controller, or Vice President  
Administration of the Company shall certify to Administrative Agent in writing
that there is no condition or event that would constitute a Potential Default
or an Event of Default under any of the terms or provisions of this Agreement
(insofar as any of those terms or provisions pertain to accounting or financial
matters) and, if any such condition or event then exists, specifying the nature
and period of existence thereof.  The compliance certificates described in this
Section 8.01 shall be in substantially the form of the attached Exhibit
J;


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


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


 


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




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


2.         Amendment of Credit Agreement and Other Loan Documents.




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




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




A- 171263.3                                                                                  3                                        
                                       Amendment 




                                                                                                                                                              




















                                                                                                                                                            




3.         Ratifications.
Borrower (a) ratifies and confirms all provisions of the Loan Documents as
amended by this Amendment, (b) ratifies and confirms that all guaranties,
assurances, and Liens granted, conveyed, or assigned to Administrative Agent
for the benefit of Lenders under the Loan Documents are not released, reduced,
or otherwise adversely affected by this Amendment and continue to guarantee,
assure, and secure full payment and performance of the present and future
Obligation (except to the extent specifically limited by the terms of such
guaranties, assurances, or Liens (if any)), and (c) agrees to perform such
acts and duly authorize, execute, acknowledge, deliver, file, and record such
additional documents, and certificates as Administrative Agent and Lenders may
reasonably request in order to create, perfect, preserve, and protect those
guaranties, assurances, and Liens (if any).




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




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




(a)        Administrative
Agent shall have received this Amendment executed by all of the parties hereto;




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




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




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




A- 171263.3                                                                                  4                                        
                                       Amendment 




                                                                                                                                                              




















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




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




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






[Remainder of
Page Intentionally Left Blank;

Signature Pages
to Follow.]

 

 

 

 

 

 


A- 171263.3                                                                                  5                                        
                                       Amendment 




                                                                                                                                                              
























                                                                                                                    








SIGNATURE PAGE TO
AMENDMENT OF 

AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

BANK OF AMERICA,
N.A., AS ADMINISTRATIVE AGENT,

AND THE LENDERS
DEFINED THEREIN




EXECUTED as of
the day and year first mentioned.






ALAMO GROUP INC.,

a Delaware corporation






By:                                                                              


            Robert H. George

            Vice President

 

 

 

 

   

 

 










Signature Page to Amendment 
























 






SIGNATURE PAGE TO
AMENDMENT OF 

AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

BANK OF AMERICA,
N.A., AS ADMINISTRATIVE AGENT,

AND THE LENDERS
DEFINED THEREIN


 


 


 


BANK OF
AMERICA, N.A.,

as
Administrative Agent






By:                                                                              


                                                                                    Suzanne Paul,
Vice President

 

 

 

 

 

 

 


Signature Page to Amendment 




























SIGNATURE PAGE TO
THIRD AMENDMENT OF 

REVOLVING CREDIT
AGREEMENT BETWEEN

ALAMO GROUP INC.,

BANK OF AMERICA,
N.A., AS ADMINISTRATIVE AGENT,

AND THE LENDERS
DEFINED THEREIN


 


 


BANK OF
AMERICA, N.A.,

as a Lender






By:                                                                              


                                                                                    Stevens E.
Warrick, Senior Vice President


            

 

 

 

 

 


Signature Page to Amendment 




























SIGNATURE PAGE TO
AMENDMENT OF 

AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

BANK OF AMERICA,
N.A., AS ADMINISTRATIVE AGENT,

AND THE LENDERS
DEFINED THEREIN


 


 


JP MORGAN
CHASE BANK, as a Lender

 




By:                                                                              


            Mark V. Harris, Senior Vice President


            

 

 

 

 

 

 






Signature Page to Amendment 




























SIGNATURE PAGE TO
AMENDMENT OF 

AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

BANK OF AMERICA,
N.A., AS ADMINISTRATIVE AGENT,

AND THE LENDERS
DEFINED THEREIN


 


 


GUARANTY
BANK, as a Lender






By:                                                                              


                                                                                    Joseph
N. Petet, Senior Vice President


            

 

 

 

 

 

 

 


Signature Page to Amendment 






























SIGNATURE PAGE TO
AMENDMENT OF 

AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

BANK OF AMERICA,
N.A., AS ADMINISTRATIVE AGENT,

AND THE LENDERS
DEFINED THEREIN




To induce the
Administrative Agent and Lenders to enter into this Amendment, each of the
undersigned (a) consent and agree to this Amendment's execution and delivery,
(b) ratify and confirm that all guaranties, assurances, and Liens (if any)
granted, conveyed, or assigned to Administrative Agent on behalf of Lenders
under the Loan Documents are not released, diminished, impaired, reduced, or
otherwise adversely affected by this Amendment and continue to guarantee,
assure, and secure the full payment and performance of all present and future
Obligation (except to the extent specifically limited by the terms of such
guaranties, assurances, or Liens), (c) agree to perform such acts and duly
authorize, execute, acknowledge, deliver, file, and record such additional
guaranties, assignments, security agreements, deeds of trust, mortgages, and
other agreements, documents, instruments, and certificates as Administrative
Agent may reasonably deem necessary or appropriate in order to create, perfect,
preserve, and protect those guaranties, assurances, and Liens (if any), and (d)
waive notice of acceptance of this consent and agreement, which consent and
agreement binds the undersigned and their successors and permitted assigns and
inures to Administrative Agent, Lenders, and their respective successors and
permitted assigns.


		














ALAMO CAPITAL INC.,


				

ALAMO GROUP (TX) L.P.,


			
	

a Nevada corporation




				

a Delaware limited partnership




			
	 	 
	



By:                                                       


				



By: Alamo Group Holdings, LLC,


			
	

Robert H.
George


				

a Delaware
limited liability company,


			
	

Vice President
- Administration






				

its General
Partner




			
	 	 
	





ALAMO GROUP (IA) INC.,


				



By:                                                             


			
	

a Nevada corporation




				

Robert H. George


			
	 	            Vice President -
Administration
	



By:                                                       


				

 






			
	

Robert H.
George


				





ALAMO GROUP (USA) INC.,


			
	

Vice President
- Administration






				

a Delaware corporation




			
	 	 
	





ALAMO GROUP (KS) INC.,


				



By:                                                       


			
	

a Kansas corporation




				

Robert H.
George


			
	 	      Vice President
- Administration
	



By:                                                       


				

 






			
	

Robert H.
George


				





ALAMO GROUP HOLDINGS, L.L.C.,


			
	

Vice President
- Administration






				

a Delaware limited liability
company




			
	 	 
	





ALAMO GROUP (SMC) INC.,


				



By:                                                       


			
	

a Nevada corporation




				

Robert H.
George


			
	 	      Vice President
- Administration
	



By:                                                       


				

 






			
	

Robert H.
George


				 
	

Vice President
- Administration


				 









 


 


Signature Page to Amendment 



























		












ALAMO SALES CORP.,


				


HERSCHEL‐ADAMS INC.,


			
	

a Delaware corporation




				

a Nevada corporation




			
	 	 
	



By:                                                       


				



By:                                                       


			
	

Robert H.
George


				

Robert H.
George


			
	

Vice President
- Administration






				

Vice President
- Administration






			
	 	 
	





M&W GEAR COMPANY,


				





SCHULTE (USA) INC.,


			
	

a Delaware corporation




				

a Florida corporation




			
	 	 
	



By:                                                       


				



By:                                                       


			
	

Robert H. George


				

Robert H.
George


			
	

Vice President ‐
Administration






				

Vice President
- Administration




			
	  	 
	





SCHWARZE INDUSTRIES, INC.,


				



 


			
	

an Alabama corporation




				

TIGER CORPORATION,


			
	



By:                                                       


				

a Nevada corporation




			
	

Robert H.
George


				



By:                                                       


			
	      Vice President -
			Administration	 
	

       






				

Robert H.
George


			
	 	      Vice President ‐
Administration
	





ALAMO GROUP SERVICES, INC.,


				

 




			
	

a Delaware corporation




				 
	



By:                                                       


				 
	

Robert H.
George


				 
	

       Vice President -
Administration


















				 
	





















				 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 




Signature Page to Amendment 






























EXHIBIT "J"




COMPLIANCE CERTIFICATE




Date:                                                                       




Bank
of America, N.A.

300
Convent Street

Post
Office Box 300

San
Antonio, Texas  78291




Attn:
Stevens E. Warrick, Senior Vice President




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




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




I.      COMPLIANCE:




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




[List any exceptions]




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




[List any exceptions]




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




[List any exceptions]




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




[List any exceptions]




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




[List any exceptions]




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

 

 

 




A-171263.2                                                                                     1                                                        
EXHIBIT "J"


























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




(a)           Minimum Fixed Charge
Coverage Ratio

                           (Section 8.14
- minimum of 1.25 to 1.0):                                                                
to                        




(b)           Minimum Consolidated
Tangible Net Worth

                           (Section 8.15 - minimum of

                            $_____________, subject to annual

                           
adjustment):                                                                                      
$                                              




(c)           Maximum Leverage
Ratio

                           (Section 8.16 - maximum of

                          
3.25 to 1.0:                                                                                        
                   
to                        




(d)           Minimum Asset Coverage Ratio

                           (Section 8.18 - minimum of 3.00
to 1.0):                                                                 
to                        

(e)           Maximum
Capital Stock Repurchases

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

                           aggregate
during the term of the Loan Agreement )                              $                                              




(f)            Maximum
Capital Expenditures

                           
(Section
9.12 - maximum of $10,000,000

                            aggregate
during any fiscal year )                                                        $                                                              

 

 

 










Very
truly yours,




ALAMO
GROUP INC.






By:       
                                                                                                           




Printed
Name:                                                                                       




Title:                                                                                                     

 

 

 

 

 

 




A-171263.2                                                                                     2                                                        
EXHIBIT "J"






























SCHEDULE A TO COMPLIANCE CERTIFICATE




(for the period ending ___________________________)

 






























	

  Covenant

  	
   

  At End of Subject
	Period

  
	

  
	1.      
	Fixed Charge Coverage Ratio (Section 8.14)

  	


  	


  
	

  
	(a)    
	Operating Cash Flow (from Schedule B)

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	

  
	(d)    
	Cash Taxes (Company and Consolidated Subsidiaries)

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	

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

  	

  	

  $                           
	 

  
	

  
	(g)    
	Interest Expense (Company and Consolidated Subsidiaries)

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	

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

  	

  	

  $                           
	 

  
	

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

  	


  	

  ______ to ______

  
	

  
	(l)     
	Minimum Ratio (per §8.14)

  	


  	

  1.25 to 1.00

  
	

  
	2.      
	Consolidated Tangible Net Worth (Section 8.15)

  	


  	


  
	

  
	(a)    
	Initial minimum Tangible Net Worth  at Closing

  	

  $109,500,000

  	


  
	

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

  	

  $                           
	 

  	


  


















 






A-171263.2                                                                                  3                                                            EXHIBIT "J"




























 






























	

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

  	

  $                           
	 

  	


  
	

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

  	


  	

  $                           
	 

  
	

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

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	

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

  	


  	

  $                           
	 

  
	

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

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	

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

  	


  	

  $                           
	 

  
	

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

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	

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

  	


  	

  $                           
	 

  
	

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

  	


  	

  $                           
	 

  
	

  
	(o)     Total Shareholders Equity

  	

  $                           
	 

  	


  
	

  
	(p)     Accumulated Other Comprehensive Income

  	

  $                           
	 

  	


  
	

  
	(q)     Intangible Assets

  	

  $                           
	 

  	


  


















 






A-171263.2                                                                                 
4                                                            EXHIBIT "J"











































	

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

  	


  	

  $                           
	 

  
	

   

  
	3.       Leverage Ratio (Section 8.16)

  	


  	


  
	

  
	(a)     Indebtedness for Borrowed Money

  	

  $                           
	 

  	


  
	

  
	(b)     Capital leases

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	


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

  	


  	

  $                           
	 

  
	

  
	(e)     Operating Cash Flow (from Schedule B)

  	


  	

  $                           
	 

  
	

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

  	


  	

  ______ to _____

  
	

  
	(g)     Maximum Ratio

  	


  	

  3.25 to 1.00

  
	

  
	4.       Asset Coverage Ratio (Section 8.18)

  	


  	


  
	

  
	(a)     Cash Equivalent Investments

  	

  $                           
	 

  	


  
	

  
	(b)     Accounts Receivable

  	

  $                           
	 

  	


  
	

  
	(c)     Inventory

  	

  $                           
	 

  	


  
	

  
	(d)     Net PP&E

  	

  $                           
	 

  	


  
	

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


  	

  	

  $                           
	 

  
	

  
	(f)      Indebtedness for Borrowed Money

  	

  $                           
	 

  	


  
	

  
	(g)     Capital leases

  	

  $                           
	 

  	


  
	

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

  	

  $                           
	 

  	


  
	

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

  	


  	

  $                           
	 

  
	

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

  	


  	

  ______ to _____

  
	

  
	(k)     Minimum Ratio

  	


  	

  3.00 to 1.00

  
	

  
	5.       Maximum Capital Expenditures (Section 9.12)

  	


  	


  
	

  
	(a)     Actual

  	


  	

  $                           
	
  

  
	

  
	(b)     Maximum Amount  

  	


  	

  $10,000,000

  











 A-171263.2                                                                                                  
5                                             
EXHIBIT "J"


 



 










































	

  
	6.       Maximum Capital Stock Repurchases (Section 9.04)

  	


  	


  
	

  
	(a)     Actual

  	


  	

  $                           
	 
  

  
	

  
	(b)     Maximum Amount  

  	


  	

  $20,000,000

  


















 

 

 

 

 

 A-171263.2                                                                                                  
6                                             
EXHIBIT "J"


 



 









































SCHEDULE B TO COMPLIANCE CERTIFICATE




(for the period ending ___________________________)








	

  	
  Schedule B to Compliance
  Certificate

  	

  	

  	

  	

  	

  	

  	

  	

  
	

  	

  	

  	

  	

  	

  	

  	

  	

  	

  
	

  	

  	

  	

  	

  	

  	

  	

  	

  	

  
	

  	

  	

  	

  	

  	

  	

  	

  	

  	

  
	

  	

  	
   

  	
   

  	
   

  	
   

  	
  
	Current

  	
   

  	
   

  	

  
	

  	

  	
  
	Prior Year

  	
   

  	
  
	Prior Full

  	
   

  	
  
	Year

  	
   

  	
  
	Totals

  	

  
	

  	
  Operating Cash Flow

  	
  
	Interim

  	
   

  	
  
	Fiscal Year

  	
   

  	
  
	Interim

  	
   

  	
  
	Columns

  	

  
	

  	
  (Company and Consolidated Subsidiaries plus sum of all Targets)

  	
  
	(1)

  	
   

  	
  
	(2)

  	
   

  	
  
	(3)

  	
   

  	
  
	(2)+(3)-(1)

  	

  
	

  	
   

  	
  
	 

  	
   

  	
  
	 

  	
   

  	
  
	 

  	
   

  	
  
	 

  	

  
	

  	
  Company and Consolidated Subsidiaries

  	

  	

  	

  	

  	

  	

  	

  	

  
	
  
	A.

  	
  Net
  Income

  	

  	

  	

  	

  	

  	

  	

  	
  
	A.

  
	
  
	B.

  	
  Income
  from discontinued operations or extraordinary items

  	

  	

  	

  	

  	

  	

  	

  	
  
	B.

  
	
  
	C.

  	
  Losses
  from discontinued operations or extraordinary items

  	

  	

  	

  	

  	

  	

  	

  	
  
	C.

  
	
  
	D.

  	
  Gains
  from sales of assets

  	

  	

  	

  	

  	

  	

  	

  	
  
	D.

  
	
  
	E.

  	
  Losses
  from sales of assets

  	

  	

  	

  	

  	

  	

  	

  	
  
	E.

  
	
  
	F.

  	
  Income
  tax expense

  	

  	

  	

  	

  	

  	

  	

  	
  
	F.

  
	
  
	G.

  	
  Interest
  expense

  	

  	

  	

  	

  	

  	

  	

  	
  
	G.

  
	
  
	H.

  	
  Depreciation,
  depletion, amortization and non-cash charges

  	

  	

  	

  	

  	

  	

  	

  	
  
	H.

  
	

  	

  	

  	

  	

  	

  	

  	

  	

  	

  
	

  	
  Operating Cash Flow-Company and Consolidated Subsidiaries

  	

  	

  	

  	

  	

  	

  	

  	

  
	

  	
  (Line
  A, minus Line B, plus Line C, minus Line D, plus Line E

  	

  	

  	

  	

  	

  	

  	

  	

  
	
  
	I.

  	
  plus Line F, plus Line G, plus Line H)

  	

  	

  	

  	

  	

  	

  	

  	
  
	I.

  
	

  	

  	

  	

  	

  	

  	

  	

  	

  	

  
	
  
	J.

  	
  Target Operating Cash Flow (sum of all Targets)

  	

  	

  	

  	

  	

  	

  	

  	
  
	J.

  
	

  	

  	

  	

  	

  	

  	

  	

  	

  	

  
	
  
	K.

  	
  Operating Cash Flow (Line I plus Line J)

  	

  	

  	

  	

  	

  	

  	

  	
  
	K.

  
	

  	

  	

  	

  	

  	

  	

  	

  	

  	

  
	

  	

  	

  	

  	

  	

  	

  	

  	

  	

  
	

  	

  	

  	

  	

  	

  	

  	

  	

  	

  


















A-171263.2                                                                                                  
7                                             
EXHIBIT "J"






























SCHEDULE C TO COMPLIANCE CERTIFICATE




(for the period ending ___________________________)








	

  	
  Schedule C to Compliance
  Certificate

  	

  	

  	

  	

  
	

  	

  	

  	

  	

  	

  
	

  	

  	

  	

  	

  	

  
	

  	
  Target Operating Cash Flow 
	 

  	
  
	 

  	
  
	 

  	

  	

  
	

  	
  (separate calculation for each acquired Target)

  	
  
	 

  	
  
	 

  	

  	

  
	

  	

  	
  
	 

  	
  
	 

  	

  	

  
	

  	

  	

  	
  
	 

  	

  	

  
	

  	
  Target Name: 
	 

  	
  
	Actual last 12 month/

  	
   	
  
	Amount agreed upon

  	

  
	

  	
  Acquisition Date: 
	 

  	
  
	last 4 quarter

  	
   	
  
	among Borrower

  	

  
	

  	
   

  	
  
	period immediately

  	

  	
  
	and Required Lenders

  	

  
	

  	
  Actual Target Operating Cash Flow

  	
  
	preceding acquisition

  	

  	
  
	(Line I)

  	

  
	

  	
   

  	
  
	 

  	

  	
  
	 

  	

  
	
  
	A.

  	
  Net
  Income

  	

  	

  	

  	
  
	A.

  
	
  
	B.

  	
  Income
  from discontinued operations or extraordinary items

  	

  	

  	

  	
  
	B.

  
	
  
	C.

  	
  Losses
  from discontinued operations or extraordinary items

  	

  	

  	

  	
  
	C.

  
	
  
	D.

  	
  Gains
  from sales of assets

  	

  	

  	

  	
  
	D.

  
	
  
	E.

  	
  Losses
  from sales of assets

  	

  	

  	

  	
  
	E.

  
	
  
	F.

  	
  Income
  tax expense

  	

  	

  	

  	
  
	F.

  
	
  
	G.

  	
  Interest
  expense

  	

  	

  	

  	
  
	G.

  
	
  
	H.

  	
  Depreciation,
  depletion, amortization and non-cash charges

  	

  	

  	

  	
  
	H.

  
	

  	

  	

  	

  	

  	

  
	

  	
  Target
  historical operating cash flow (Line A, minus Line B, plus Line C,

  	

  	

  	

  	

  
	
  
	I.

  	
  minus Line D, plus Line E, plus Line F, plus Line G, plus Line H)

  	

  	

  	

  	
  
	I.

  
	

  	

  	

  	

  	

  	

  
	
  
	J.

  	
  Months
  per year

  	
  
	12

  	

  	
  
	12

  	
  
	J.

  
	
  
	K.

  	
  Number
  of Months Alamo Group has operated Target

  	
   

  	
   

  	
   

  	
  
	K.

  
	
  
	L.

  	
  Number
  of Months operated under previous ownership (Line J minus Line K)

  	

  	

  	

  	
  
	L.

  
	
  
	M

  	
  Historical
  target factor (Line L divided by Line J)

  	

  	

  	

  	
  
	M

  
	

  	

  	

  	

  	

  	

  
	
  
	N.

  	
  Target Operating Cash Flow (Line I multiplied by Line M)

  	

  	

  	

  	
  
	N.

  
	

  	

  	

  	

  	

  	

  










A-171263.2                                                                                           
8                                                         
EXHIBIT "J"






























EXHIBIT Q




Permitted Acquisition Certificate


Bank of America, N.A.

300 Convent Street

Post Office Box 300

San Antonio, Texas  78291




Attn: Stevens E. Warrick,
Senior Vice President




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




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




1.          The
consideration paid for the proposed Acquisition is $____________ (must be less
than $20,000,000).




2.          The
consideration paid for all Acquisitions during the current fiscal year is
$____________ (must be less than $30,000,000).




3           After
giving effect to the Acquisition:




(a)           All representations and warranties set
forth in the Loan Documents continue to be true and correct in all material
respects immediately prior to and after giving effect to the Acquisition and
the transactions contemplated thereby.




(b)           No Event of Default or Potential Default
shall exist or occur as a result of, and after giving effect to, the
Acquisition.




(c)           If the total consideration for the
Acquisition is equal to or greater than $20,000,000, the Company has attached
as Schedule A, pro forma financial statements of the Company and its
Consolidated Subsidiaries that demonstrate compliance with the covenant set
forth in Section 8.16 of the Loan Agreement, including in such
calculation Target Operating Cash Flow as set forth on Schedule B (as if
the business, assets or Person acquired had been acquired since the first (1st)
day of the period for which such pro forma financial statements are delivered
and had been managed and conducted in accordance with the Company's standard
business practices) for the prior four (4) fiscal quarters of the Company and
its Consolidated Subsidiaries.








ALAMO
GROUP INC.






By:                                                                                                                      




Name:                                                                                                     




Title:                                                                                                       


 

A-171263.2                                                                                       
9                                                       EXHIBIT "Q"

























SCHEDULE A to EXHIBIT Q TO
PERMITTED Acquisition Certificate


See attached pro forma financials.

 

 

 

 

 

 

 

 

 

 
















A-171263.2                                                                                       
10                                                       EXHIBIT "Q"










































SCHEDULE B to exhibit q to
PERMITTED Acquisition Certificate




	

   	
   	

   	

   	

   	

   
	

  	
  
	 

  	

  	

  	

  	

  
	

  	
  Target Operating Cash Flow to be used for
	 

  	

  	

  	

  	

  
	

  	
  completion of Exhibit Q pursuant to section

  	

  	

  	

  	

  
	

  	
  8.01(f) of the Credit Agreement

  	
  
	 

  	
  
	 

  	

  	

  
	

  	
  (separate calculation for each Target)

  	
  
	 

  	
  
	 

  	

  	

  
	

  	

  	
  
	 

  	
  
	 

  	

  	

  
	

  	

  	

  	
  
	 

  	

  	

  
	

  	
  Target Name: 
	 

  	
  
	Actual last 12 month/

  	
  
	 

  	
  
	Amount agreed upon

  	

  
	

  	
   

  	
  
	last 4 quarter

  	
   	
  
	among Borrower

  	

  
	

  	
   

  	
  
	period as of date

  	

   	
  
	and Required Lenders

  	

  
	

  	
  Actual Target Operating Cash Flow

  	
  
	of Exhibit Q

  	

  	
  
	(Line I)

  	

  
	

  	
   

  	
  
	 

  	

  	
  
	 

  	

  
	
  
	A.

  	
  Net
  Income

  	

  	

  	

  	
  
	A.

  
	
  
	B.

  	
  Income
  from discontinued operations or extraordinary items

  	

  	

  	

  	
  
	B.

  
	
  
	C.

  	
  Losses
  from discontinued operations or extraordinary items

  	

  	

  	

  	
  
	C.

  
	
  
	D.

  	
  Gains
  from sales of assets

  	

  	

  	

  	
  
	D.

  
	
  
	E.

  	
  Losses
  from sales of assets

  	

  	

  	

  	
  
	E.

  
	
  
	F.

  	
  Income
  tax expense

  	

  	

  	

  	
  
	F.

  
	
  
	G.

  	
  Interest
  expense

  	

  	

  	

  	
  
	G.

  
	
  
	H.

  	
  Depreciation,
  depletion, amortization and non-cash charges

  	

  	

  	

  	
  
	H.

  
	

  	

  	

  	

  	

  	

  
	

  	
  Target Operating Cash Flow
	 (Line
  A, minus Line B, plus Line C,

  	

  	

  	

  	

  
	
  
	I.

  	
  minus
  Line D, plus Line E, plus Line F, plus Line G, plus Line H)

  	

  	

  	

  	
  
	I.

  
	

  	

  	

  	

  	

  	

  










 

A-171263.2                                                                                        
11                                                        EXHIBIT "Q"