Document:

Exhibit 10.2

TRANSITION SERVICES AGREEMENT

This Transition Services Agreement (this "Agreement")
is made and entered into as of February 3, 2006 by and between JLG INDUSTRIES,
INC., a corporation organized under the laws of Pennsylvania ("JLG"),
and ALAMO GROUP (OH) INC., a corporation organized under the laws of Delaware
("Buyer").

Whereas,
Buyer and NP Real Estate, Inc. ("NPR") have agreed to purchase and The
Gradall Company ("Gradall") has agreed to sell certain assets of Gradall
relating to the Gradall excavator product line (the "Business"),
pursuant to that certain Asset Purchase Agreement dated as of the date hereof (the
"Purchase Agreement"); 

Whereas,
Buyer has requested that JLG provide certain transitional services and
transitional arrangements and JLG is willing to provide certain transitional
services and transitional arrangements to Buyer, subject to the terms and
conditions of this Agreement; and

Whereas,
the willingness of Buyer and Gradall to enter into the Purchase Agreement is conditioned
upon the execution and delivery of this Agreement.

Now, Therefore,
in consideration of the foregoing premises, the mutual agreements hereinafter
contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Buyer and JLG hereby agree as
follows:

1.                 
Services; Software Licenses.  (a)          Subject to the terms and
conditions contained herein JLG agrees to provide the transitional services and
arrangements set forth on Exhibit A, which is hereby incorporated herein
by reference (collectively, the "Services") during the Transition Period
(as defined below).  JLG's obligation to render the Services hereunder shall be
subject to the provision by Buyer of such services or deliverables as may be
specified on Exhibit A and to Buyer's reasonable cooperation in
connection with JLG's performance of such Services, including, as applicable,
(a) Buyer timely delivering data and other information, (b) Buyer providing
such data and information in the form required by JLG, (c) timely decision-making
by Buyer and (d) Buyer dedicating such resources as may be necessary in order
to allow JLG to render the Services hereunder.  JLG's obligations under this
Agreement shall relate only to Buyer; JLG shall have no obligation hereunder 
in respect of NPR.  JLG shall have no obligation to assist Buyer in
transitioning the Business to Buyer's systems, other than the use of
commercially reasonable efforts to provide data to Buyer in a useable format.

            (b)          JLG shall obtain or maintain the software licenses
listed on Exhibit A hereto (which Exhibit A, together with any
licenses transferred to Buyer pursuant to the Purchase Agreement, includes all
of the software licenses currently used by the Business).  Notwithstanding the
foregoing, immediately following the date of this Agreement, Buyer will seek to
obtain all required Microsoft Office licenses, and will diligently pursue
obtaining such licenses.  Buyer shall be responsible for obtaining any software
licenses not set forth on Exhibit A hereto and for paying all transfer
fees to the applicable software vendors for all licenses set forth in Schedule
1.01A(c) of the Purchase Agreement.  JLG agrees that, upon termination of this
Agreement, any refunds or other value received by JLG in connection with the
cancellation, termination or retention by JLG of the licenses set forth on Exhibit
A shall be promptly provided to Buyer.

(c)        Notwithstanding the terms of subsection
(b) above, JLG represents that, during the Transition Period, JLG's provision
of the Services shall permit Buyer to operate the Business in a manner
consistent with the past practices of Gradall.

2.                 
Term.  Subject to Section 6, JLG's obligation to perform the
Services covered by this Agreement shall begin on the date of this Agreement
and shall terminate with respect to each Service on the date specified in
respect of such Service on Exhibit A hereto (such period, in respect of
each Service and collectively, as applicable, the "Transition Period"). 
Notwithstanding anything to the contrary in this Agreement, the parties'
respective obligations under Sections 8, 10, 12 and 13 shall survive the
Transition Period.

3.                 
Level of Services.  Subject to any qualifications contained
herein or on Exhibit A, JLG shall use the same degree of care in
rendering the Services as it utilized in rendering such services for the
operations of the Business for Gradall prior to the date hereof, and in any
event shall not be required to use more than its commercially
reasonable efforts in rendering such Services.  JLG shall have no obligation
hereunder to modify its current practices in rendering the Services hereunder,
any such modification to be requested by Buyer in writing and to be undertaken
by JLG in its sole discretion and at Buyer's sole cost and expense.  

4.                 
Consideration.  Buyer shall pay, and JLG shall accept as
consideration for the Services to be rendered hereunder, the service charges
set forth in respect of each Service on Exhibit A.  Such consideration
is net to Buyer of the license fees, user fees, royalties or the like owed to
third parties for the licenses included on Exhibit A hereto and included
in the service charges set forth on Exhibit A.  Any such fees or
expenses shall be the responsibility of JLG, as shall be fees and expenses for
licenses not reflected on Exhibit A but necessary to ensure that the Buyer
is able to operate the Business in a manner consistent with past practices of
Gradall.  Additional licenses, and all license fees, user fees, royalties and
the like associated with such additional licenses, shall be the responsibility
of Buyer.

5.                 
Terms of Payment.  A one-time fee of $234,860 shall be paid by
Buyer to JLG concurrently with the execution of this Agreement.  Invoices for
the remaining Services shall be submitted monthly, in advance, on the monthly
anniversary of the date of execution of this Agreement and shall contain a
summary description of the charges and services to be rendered.  Payment shall
be made by Buyer to JLG not later than ten days after the invoice date.  Except
as otherwise provided in this Agreement, the amount of any monthly service fee
for any Service listed on Exhibit A shall be billed at its full monthly
rate for any month that the corresponding services were provided, except for
partial months, for which such monthly service fee shall be pro rated for the
actual number of days that such Services were provided.  In the event of a bona
fide dispute as to an invoice, the disputing party shall promptly pay all
undisputed amounts, but shall be entitled to withhold amounts in bona fide dispute. 
The disputing party shall promptly notify the other party of any such dispute. 
Each party will provide the other party with reasonably sufficient records and
information to resolve any such dispute and, without limiting the rights and
remedies of the parties hereunder, will negotiate in good faith a resolution
thereto.

 

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6.                 
Termination of Services.  Buyer may at any time, prior to the end
of any applicable Transition Period, terminate any of the Services on at least 30
days prior written notice to JLG, whereupon, from and after the date of
termination specified in such written notice, JLG shall no longer have any
obligation to provide such Services to Buyer and Buyer shall have no obligation
to pay the fee listed on Exhibit A for such Service.  All obligations of
JLG to provide to Buyer any Services under this Agreement shall cease at the
end of the Transition Period.  This Agreement may be terminated upon the mutual
written agreement of Buyer and JLG.

7.                 
Inability to Perform.  JLG and its affiliates shall be excused
from its obligations under this Agreement, and shall have no liability for any
resulting loss or damage, in the event and to the extent that its performance
is delayed or prevented by any circumstance reasonably beyond its control,
including, but not limited to, fire, flood, epidemic, explosion, act of any
government in its sovereign capacity, act of God, act of terrorism, strike,
walkout or other labor dispute, and riot or civil disturbance.  

8.                 
Confidentiality.  Each of Buyer and JLG shall hold, and shall use
commercially reasonable efforts to cause its employees, affiliates,
subcontractors and representatives to hold, in strict confidence all
information concerning the other party or its affiliates in its possession or
control or furnished to it by such other party or such party's affiliates
pursuant to this Agreement or the transactions contemplated hereby and shall
not release or disclose such information to any other person or entity;
provided, however, that any party hereto and its affiliates may disclose such
information to the extent that such person can show that such information, in
the form provided, is in the public domain through no fault of such person. 
Each party acknowledges that (i) it shall be liable for any breach
of this Section 8 by its employees, affiliates, subcontractors and
representatives to whom such information is disclosed by such party and (ii) the
information covered by this Section 8 shall remain the property of the party controlling
or furnishing such information.  This Section 8 shall survive the termination
of this Agreement and shall continue in full force and effect.

9.                 
Method of Payment.  All amounts payable by Buyer for the Services
shall be remitted by wire transfer of immediately available funds to a bank to
be designated on the invoice or otherwise in writing by JLG, unless otherwise
provided for and agreed upon in writing by the parties hereto.  Detailed
billing information shall be provided upon request.

10.             
Liability.  JLG shall have no liability to Buyer, its affiliates
or any third party for any errors in judgment made in good faith in the
performance of its duties under this Agreement, subject to satisfaction of the
standards set forth in Section 3 hereof, except for willful misconduct or gross
negligence.  In no event shall either party be liable to the other party, its
affiliates or any third party for any (i) special, incidental, indirect or
consequential damages of any kind or nature, regardless of the form of action
through which such damages are sought, or (ii) lost profits resulting from an
alleged breach of this Agreement, even if under applicable law such lost profits
damages would not be considered consequential or special damages.

11.             
Further Assurances.  From time to time, as and when requested by
either party hereto, the other party hereto shall make, execute and deliver all
such documents and instruments and shall take all such actions, as such
requesting party may reasonably deem necessary or appropriate to consummate the
transactions contemplated by this Agreement.

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12.             
Governing Law.  This Agreement shall be governed by and construed
in accordance with the substantive laws of the State of New York, excluding any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive law of
another jurisdiction.

13.             
Notices.  Any notice or other communication given under this
Agreement shall be in writing and shall be (a) delivered personally; (b) sent
by documented overnight delivery service; (c) sent by facsimile transmission,
provided that a confirmation copy thereof is sent no later than the Business
Day following the day of such transmission by documented overnight delivery
service or first class mail, postage prepaid (certified or registered mail,
return receipt requested); or (d) sent by first class mail, postage prepaid
(certified or registered mail, return receipt requested).  Such notice shall be
deemed to have been duly given (i) on the date of delivery, if delivered
personally; (ii) on the Business Day after dispatch by documented overnight
delivery service, if sent in such manner; (iii) on the date of facsimile
transmission, if so transmitted; or (iv) on the fifth Business Day after sent
by first-class mail, postage prepaid, if sent in such manner.  Notices or other
communications shall be directed to the following addresses:

Notices
to JLG:

c/o
JLG Industries, Inc.

13224
Fountainhead Plaza

Hagerstown,
Maryland 21742-2678

Facsimile:
(240) 313-1807

Attention:
Senior Vice President and General Counsel

 

with
a copy to:

 

Covington
& Burling

1201
Pennsylvania Avenue, N.W.

Washington,
D.C.  20004

Facsimile:
(202) 778-5232

Attention:
W. Andrew Jack, Esq.

Notices
to Buyer:

Alamo Group (OH) Inc.

406 Mill Avenue, S.W.

New Philadelphia, Ohio 44663

Attention:
Mike A. Haberman

 

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with a copy to:

Alamo Group Inc.

1502 E. Walnut

Seguin, Texas 78155

Facsimile: (830) 372-9683

Attention:
General Counsel 

 

and:

 

Oppenheimer,
Blend, Harrison & Tate, Inc.

711
Navarro, 6th Floor

San
Antonio, Texas 78205

Facsimile:
(210) 224-7540

Attention:
J. David Oppenheimer, Esq.

Either party may, by
notice given in accordance with this Section, specify a new address for notices
under this Agreement.

14.             
Successors and Assigns.  The rights and obligations of any party
hereunder may not be assigned, conveyed or transferred without the prior
written consent of the other party; provided, that JLG may assign its rights
and obligations under this Agreement to one or more of its affiliates without
the prior written consent of Buyer, but such assignment shall not release JLG
from its responsibilities under this Agreement.  Any such conveyance,
assignment or transfer without the prior express written consent of the other
party shall be void.

15.             
Sections and Captions.  The captions or headings of articles,
sections, paragraphs, schedules and exhibits of this Agreement are provided for
convenience only, and shall not be of any force or effect in construing any
provision of this Agreement.

16.             
Entire Agreement.  This Agreement constitutes the entire understanding
between the parties with respect to the matters set forth herein and/or therein
and supersedes all materials, statements, and prior or contemporaneous
understandings or agreements between the parties with respect to the subject
matter hereof, whether oral or written.

17.             
Amendments.  Neither this Agreement nor any provision hereof may
be waived, modified, amended, discharged, or terminated except by an instrument
in writing signed by the party against which the enforcement of such writing is
sought, and then only to the extent set forth in such writing.

18.             
Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single instrument.  Delivery of an executed
counterpart of a signature page of this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement.

19.             
No Third-Party Beneficiaries.  This Agreement is binding upon and
is for the benefit of the parties and their respective successors and permitted
assigns.  This Agreement is not made for the benefit of any person, firm,
corporation or other entity not a party hereto and no person, firm, corporation
or other entity other than the parties or their respective successors and
permitted assigns shall acquire or have any right, remedy or claim under or by
virtue of this Agreement.

5

 

20.             
Severability.  If any provision of this Agreement or the
application thereof to any person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby.

[Signature Page
Follows]

 

 

 

 

 

 

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In Witness Whereof,
the parties hereto, intending to be legally bound hereby, have duly executed
this Agreement as of the date first above written.

JLG
Industries, inc.

By:   ________________________

        Name: Thomas
D. Singer

        Title:  Senior Vice President
and General Counsel

ALAMO GROUP (OH) INC.

By:   ________________________

        Name: Ronald
A. Robinson

        Title: President

 

Signature
Page to Transition Services AgreementExhibit 10.3

THIRD AMENDMENT OF
AMENDED AND RESTATED

REVOLVING CREDIT
AGREEMENT

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

R E
C I T A L S

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

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

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

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

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

1.         Amendments
to the Credit Agreement.  

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

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

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

 

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

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

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

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

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

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

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

 

 

2

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

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

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

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

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

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

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

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

 

 

3

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

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

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

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

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

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

 

 

4

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

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

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

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

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

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

 

5

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

8.19.    Hazardous Materials.

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

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

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

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

 

6

 

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

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

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

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

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

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

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

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

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

3.         Amendment of Credit Agreement and Other Loan Documents.

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

 

7

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

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

4.         Waiver.

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

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

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

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

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

 

8

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

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

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

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

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

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

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

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

 

9

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

[Remainder of
Page Intentionally Left Blank;

Signature Pages
to Follow.]

 

 

 

 

 

10

SIGNATURE PAGE TO
THIRD AMENDMENT OF 

AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

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

AND THE LENDERS
DEFINED THEREIN

EXECUTED as of
the day and year first mentioned.

ALAMO GROUP INC.,

a Delaware corporation

By:                                                                              

            Robert H.
George

            Vice President

 

 

 

 

 

Signature Page to Third
Amendment

SIGNATURE PAGE TO
THIRD AMENDMENT OF 

AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

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

AND THE LENDERS
DEFINED THEREIN

 

 

BANK OF
AMERICA, N.A.,

as
Administrative Agent

By:                                                                              

                                                                                    Suzanne Paul,
Vice President

 

 

 

 

Signature Page to Third
Amendment

SIGNATURE PAGE TO
THIRD AMENDMENT OF     

REVOLVING CREDIT
AGREEMENT BETWEEN

ALAMO GROUP INC.,

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

AND THE LENDERS
DEFINED THEREIN

 

 

BANK OF AMERICA,
N.A.,

as a Lender

By:                                                                              

                                                                                    Stevens E.
Warrick, Senior Vice President

 

 

 

 

           
Signature Page to Third Amendment

SIGNATURE PAGE TO
THIRD AMENDMENT OF 

AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

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

AND THE LENDERS DEFINED
THEREIN

 

 

JP MORGAN
CHASE BANK, as a Lender

By:                                                                              

            Mark V. Harris, Senior Vice President

 

 

 

 

 

           
Signature Page to Third Amendment

SIGNATURE PAGE TO
THIRD AMENDMENT OF 

AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

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

AND THE LENDERS
DEFINED THEREIN

 

 

GUARANTY
BANK, as a Lender

By:                                                                              

                                                                                    Joseph
N. Petet, Senior Vice President

 

 

 

 

           
Signature Page to Third Amendment

SIGNATURE PAGE TO
THIRD AMENDMENT OF 

AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT BETWEEN

ALAMO GROUP INC.,

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

AND THE LENDERS
DEFINED THEREIN

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

		

ALAMO CAPITAL INC.,

				

ALAMO GROUP (TX) L.P.,

			
	

a Nevada corporation

				

a Delaware limited partnership

			
	

By:                                                       

				

By: Alamo Group Holdings, LLC,

			
	

Robert H.
George

				

a Delaware
limited liability company,

			
	

Vice President
- Administration

				

its General
Partner

			
	  	

By:                                                             

			
	

ALAMO GROUP (IA) INC.,

				

Robert H. George

			
	

a Nevada corporation

				

Vice President -
Administration

			
	

By:                                                       

				  
	

Robert H.
George

				

ALAMO GROUP (USA) INC.,

			
	

Vice President
- Administration

				

a Delaware corporation

			
	  	

By:                                                       

			
	

ALAMO GROUP (KS) INC.,

				

Robert H.
George

			
	

a Kansas corporation

				

Vice President
- Administration

			
	

By:                                                       

				  
	

Robert H.
George

				

ALAMO GROUP HOLDINGS, L.L.C.,

			
	

Vice President
- Administration

				

a Delaware limited liability
company

			
	  	

By:                                                       

			
	

ALAMO GROUP (SMC) INC.,

				

Robert H.
George

			
	

a Nevada corporation

				

Vice President
- Administration

			
	

By:                                                       

				 
	

Robert H.
George

				 
	

Vice President
- Administration

				 
	 	 

 

 

 Signature Page to
Third Amendment

		

ALAMO SALES CORP.,

				

HERSCHEL‐ADAMS INC.,

			
	

a Delaware corporation

				

a Nevada corporation

			
	

By:                                                       

				

By:                                                       

			
	

Robert H.
George

				

Robert H. George

			
	

Vice President
- Administration

				

Vice President -
Administration

			
	  	  
	

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

a
Delaware corporation

				

SCHULTE (USA) INC.,

			
	

By:                                                       

				

a Florida corporation

			
	

Robert H. George

				

By:                                                       

			
	

Vice President ‐
Administration

				

Robert H. George

			
	  	

Vice President -
Administration

			
	

SCHWARZE INDUSTRIES, INC.,

				  
	

an Alabama corporation

				

TIGER CORPORATION,

			
	

By:                                                       

				

a Nevada corporation

			
	

Robert H.
George

				

By:                                                       

			
	

       Vice President -
Administration

				

Robert H. George

			
	  	

Vice President ‐
Administration

			
	

ALAMO GROUP SERVICES, INC.,

				  
	

a Delaware corporation

				

Alamo Group (OH) Inc., a Delaware corporation

			
	

By:                                                       

				

By:                                                       

			
	

Robert H.
George

				

Name:                                            

			
	

       Vice President -
Administration

				

     
Title:                                               

			
	 	  
	 	

NP REAL ESTATE Inc., an Ohio corporation

			
	 	

By:                                                       

			
	 	

Name:                                            

			
	 	

     
Title:                                               

			

 

 Signature Page to
Third Amendment

 

EXHIBIT A

AMENDMENT
DOCUMENTS

1.         Amendment;

2.         BofA Note;

3.         JP Note;

4.         Guaranty Note;

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

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

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

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

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

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

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

 

18

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

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

 

 

 

 

19

EXHIBIT H

Permitted Liens

	

  Secured Party

  	

  Pledgor

  	
   Description of Collateral

  
	
   Ford
  Motor Credit Corp

  	
   Schwarze
  Industries, Inc.

  	

  Floor
  Planned Chassis purchased from Mid Tenn Ford

  
	

  MB
  Credit Corp

  	
   Schwarze
  Industries, Inc.

  	

  Floor
  Planned Chassis purchased from Neely Coble

  
	

  National
  Australia Bank (Line of Credit and Security Agreement)

  	
   Schwarze
  Industries, Inc.

  	

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

  
	

  Australian
  Guarantee Corporation (capital lease)

  	
   Schwarze
  Industries, Inc.

  	

  Sweepers

  
	

  Toronto
  Dominion

  	
   Schulte
  (USA) Inc.

  	

  Accounts Receivable,
  Inventory

	Alamo
  Group, Inc. -Guaranty

  
	

  Hitachi Capital America
  Corporation

  	
   Schwarze
  Industries, Inc.

  	

  Chassis

  

 

 

20

EXHIBIT J

COMPLIANCE CERTIFICATE

Date:                                                                       

Bank
of America, N.A.

300
Convent Street

Post
Office Box 300

San
Antonio, Texas  78291

Attn:
Stevens E. Warrick, Senior Vice President

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

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

I.      COMPLIANCE:

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

[List any exceptions]

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

[List any exceptions]

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

[List any exceptions]

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

[List any exceptions]

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

[List any exceptions]

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

 

1

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

(a)           Minimum Fixed Charge
Coverage Ratio

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

(b)           Minimum Consolidated
Tangible Net Worth

(Section 8.15 - minimum of

$_____________, subject to annual

adjustment):                                                                                 $                                              

(c)           Maximum Leverage
Ratio

(Section 8.16 - maximum of

3.25 to 1.0:                                                                                                      
to                        

(d)           Minimum Asset Coverage Ratio

(Section 8.18 - minimum of (a)
2.50 to 1.0 from the 

period beginning February 3, 2006,
through the 

earlier of (i) the receipt of Net Cash
Proceeds from 

an Equity Issuance and (ii) September
30, 2007, and 

(b) all times thereafter, 3.00 to 1.00):                                                                
to                        

(e)           Maximum
Capital Stock Repurchases

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

aggregate
during the term of the Loan Agreement )                          $                                              

(f)            Maximum
Capital Expenditures

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

aggregate
during any fiscal year )                                                     $                                               

 

Very
truly yours,

ALAMO
GROUP INC.

By:                                                                                                                          

Printed
Name:                                                                                       

Title:                                                                                                       

 

 

2

SCHEDULE A TO COMPLIANCE CERTIFICATE

(for the period ending ___________________________)

	

  Covenant
	

  At End of Subject Period
	

  1.       Fixed Charge Coverage Ratio (Section 8.14)

  	

   	

   
	

  (a)     Operating Cash Flow (from Schedule B)

  	

  $                           
	

  	

   
	

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

  	

  $                           
	

  	

   
	

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

  	

  $                           
	

  	

   
	

  (d)     Cash Taxes (Company and Consolidated
  Subsidiaries)

  	

  $                           
	

  	

   
	

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

  	

  $                           
	

  	

   
	

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

  	

   	

  $                            
  
	

  (g)     Interest Expense (Company and Consolidated
  Subsidiaries)

  	

  $                           
	

  	

   
	

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

  	

  $                           
	

  	

   
	

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

  	

  $                           
	

  	

   
	

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

  	

   	

  $                            
  
	

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

  	

   	

  ______ to ______

  
	

  (l)      Minimum Ratio (per §8.14)

  	

   	

  1.25 to 1.00

  
	

  2.       Consolidated Tangible Net Worth (Section 8.15)

  	

   	

   
	

  (a)     Initial minimum Tangible Net Worth  at
  Closing

  	

  $109,500,000	

   
	

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

  	

  $                           
	

  	

   

 

 

3

 

	

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

  	

  $                            

  	

  
	

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

  	

  	

  $                            

  
	

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

  	

  $                            

  	

  
	

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

  	

  $                            

  	

  
	

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

  	

  	

  $                            

  
	

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

  	

  $                            

  	

  
	

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

  	

  $                            

  	

  
	

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

  	

  	

  $                            

  
	

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

  	

  $                            

  	

  
	

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

  	

  $                            

  	

  
	

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

  	

  	

  $                            

  
	

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

  	

  	

  $                            

  
	

  (o)     Total Shareholders Equity

  	

  $                            

  	

  
	

  (p)     Accumulated Other Comprehensive Income

  	

  $                            

  	

  
	

  (q)     Intangible Assets

  	

  $                            

  	

  

 

 

4

 

	

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

  	

  	

  $                            

  
	

  3.       Leverage Ratio (Section 8.16)

  	

  	

  
	

  (a)    Indebtedness for Borrowed Money

  	

  $                            

  	

  
	

  (b)    Capital leases

  	

  $                            

  	

  
	

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

  	

  $                            

  	

  
	

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

  	

  	

  $                            

  
	

  (e)    Operating Cash Flow (from Schedule B)

  	

  	

  $                            

  
	

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

  	

  	

  ______ to _____

  
	

  (g)    Maximum Ratio

  	

  	

  3.25 to 1.00

  
	

  4.       Asset Coverage Ratio (Section 8.18)

  	

  	

  
	

  (a)    Cash Equivalent Investments

  	

  $                            

  	

  
	

  (b)    Accounts Receivable

  	

  $                            

  	

  
	

  (c)    Inventory

  	

  $                            

  	

  
	

  (d)    Net PP&E

  	

  $                            

  	

  
	

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

  	

  	

  $                            

  
	

  (f)     Indebtedness for Borrowed Money

  	

  $                            

  	

  
	

  (g)    Capital leases

  	

  $                            

  	

  
	

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

  	

  $                            

  	

  
	

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

  	

  	

  $                            

  
	

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

  	

  	

  ______ to _____

  
	

  (k)    Minimum Ratio

  	

  	

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

	(b) at all times thereafter, 3.00 to 1.0

  

 

5

 

	

  5.     Maximum Capital Expenditures (Section 9.12)

  	

  	

  
	

  (a)     Actual

  	

  	

  $                            
  

  
	

  (b)     Maximum Amount 

  	

  	

  $10,000,000

  
	

  6.     Maximum Capital Stock Repurchases (Section 9.04)

  	

  	

  
	

  (a)     Actual

  	

  	

  $                            
  

  
	

  (b)     Maximum Amount 

  	

  	

  $20,000,000

  

 

 

6

Exhibit N

List of Existing
Guarantors

Alamo Capital Inc., a Nevada corporation 

Alamo Group (IA) Inc., a Nevada corporation 

Alamo Group (KS) Inc., a Kansas corporation 

Alamo Group (SMC) Inc., a Nevada corporation 

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

Alamo Group (USA) Inc., a Delaware corporation 

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

Alamo Sales Corp., a Delaware corporation 

Herschel-Adams Inc., a Nevada corporation 

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

Schulte (USA) Inc., a Florida corporation 

Schwarze Industries, Inc., an Alabama corporation 

Tiger Corporation, a Nevada corporation

Alamo Group Services, Inc., a Delaware corporation

Alamo Group (OH) Inc., a Delaware corporation

NP Real Estate Inc., an Ohio corporation

Exhibit M

Existing
Indebtedness

	

  Lender

  	

  Borrower

  	
   Term

  	
   Total

	Amount

	Available or

	Original

	Amount

  	
  Current

	Amount

	Outstanding

  	
   Description of Collateral

  
	
  Ford
  Motor Credit Corp

  	
  Schwarze
  Industries, Inc.

  	

  Renewable
  Annually

  	

  $1,000,000

  	

  $
  -0-

  	

  Floor
  Planned Chassis purchased from Mid Tenn Ford

  
	

  MB
  Credit Corp

  	
  Schwarze
  Industries, Inc.

  	

  Renewable
  Annually

  	

  $3,000,000

  	

  $
  -0-

  	

  Floor
  Planned Chassis purchased from Neely Coble

  
	

  National
  Australia Bank (Line of Credit and Security Agreement)

  	
  Schwarze
  Industries, Inc.

  	

  Renewable
  Annually

  	

  $1,300,000

	(Australian)

  	

  $800,000

	(Australian)

  	

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

  
	

  Australian
  Guarantee Corporation (capital lease)

  	
  Schwarze
  Industries, Inc.

  	

  June,
  2004

  	

  $500,000

	(Australian)

  	

  $200,000

	(Australian)

  	

  Sweepers

  
	

  Toronto
  Dominion

  	
  Schulte
  (USA) Inc. 

  	

  Renewable
  Annually

  	

  $3,000,000

  (Canadian)

  	

  $1,250,000

  	

  Accounts Receivable,
  Inventory Alamo
  Group Inc. - Guaranty

  
	

  Lloyds Bank  

	Overdraft Facility

  	
  Alamo
  Group Europe

  	

  Renewable Annually 

  	

  $4,000,000

	(British Pounds)

  	

  0

  	

  Unsecured

  
	

  Siemens Financial Services,
  Inc. (Software License)

  	
  Alamo
  Group Inc.

  	

  September, 2006

  	

  $348,000

  	

  $133,000

  	

  Unsecured

  
	

  Hitachi Capital America
  Corporation

  	
  Schwarze
  Industries, Inc.

  	

  Open

  	

  $500,000

  	

  $190,000

  	

  All Inventory Floored
  through Hitachi

  
	

  AICCO, Inc.

	(Financing Insurance
  Premiums)

  	
  Alamo
  Group Inc.

  	

  September 1, 2006

  	

  $1,890,306

  	

  $1,374,768

  	

  Unsecured

  

 

 

EXHIBIT R

Revolving
Credit Commitments

 

 

	
  Lender

  	
  Commitment

  
	
  Bank of America, N.A.

  	
  $45,000,000

  
	
  JPMorgan Chase Bank, N.A.

  	
  $45,000,000

  
	
  Guaranty Bank

  	
  $35,000,000

  
	
  Total

  	
  $125,000,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]