Exhibit 10.2

 

EXECUTION VERSION

 

January 8, 2016

 

Allied Motion Technologies Inc.

495 Commerce Drive Suite 3

Amherst, NY  14228

 

Re:                             Consent and Amendment No. 3 to Note Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain Note Agreement, dated as of October 18, 2013
(as amended by Amendment No. 1 to Note Agreement dated October 20, 2014 and
Amendment No. 2 to Note Agreement dated as of June 22, 2015, the “Note
Agreement”), among Allied Motion Technologies Inc., a Colorado corporation (the
“Company”), and the purchasers named in the Purchaser Schedule attached
thereto.  Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Note Agreement.

 

The Company has requested that the Required Holder(s): (a) consent to the
proposed acquisition by Allied B.V. of the capital stock of Heidrive GmbH for a
purchase price of approximately €23,000,000 (the “Acquisition”); and (b) agree
to modify the Note Agreement as set forth below.  Subject to the terms and
conditions hereof, and provided that the Company agrees to the modifications of
the Note Agreement set forth below, the Required Holder(s) are willing to agree
to the Company’s requests.

 

Accordingly, and in accordance with the provisions of paragraph 12C of the Note
Agreement, the parties hereto agree as follows:

 

SECTION 1.                         Acquisition.

 

1.1                               Consent.  Effective upon the Effective Date
(as defined in Section 3 hereof) and subject to satisfaction of all conditions
specified in Section 1.2 hereof, the Required Holder(s) hereby consent to the
Acquisition (this “Consent”), as follows:

 

(a)                                 Limitation on Consent.  This Consent is only
applicable and shall only be effective in the specific instance and for the
specific purpose for which made, is expressly limited to the facts and
circumstances referred to herein, and shall not operate as (i) a waiver of, or
consent to noncompliance with any other provision of the Note Agreement or any
other Transaction Document, (ii) a waiver of any right, power or remedy of any
holder of a Subordinated Note under the Note Agreement or any Transaction
Document, or (iii) a waiver of or consent to any Event of Default or Default
under the Note Agreement or any Transaction Document.

 

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(b)                                 Acquisition Basket.  The Required Holder(s),
the Company and (by their execution and delivery of the attached Guarantor
Acknowledgment and Agreement) acknowledge that the aggregate consideration paid
for the Acquisition shall not reduce the $10,000,000 maximum aggregate
consideration which the Borrowers may pay for acquisitions during the term of
the Note Agreement permitted under paragraph 6B(v) of the Note Agreement.

 

1.2                               Conditions.  The effectiveness of this Consent
shall be conditioned upon the satisfaction of the following conditions
precedent:

 

(a)                                 Acquisition Documents.  The Company shall
have delivered to the holders of the Subordinated Notes a true, complete and
correct copy of the stock purchase agreement executed in connection with the
Acquisition (including the Exhibits and Schedules thereto) and any other
documents relating to the Acquisition as any holder of a Subordinated Note shall
request, which requested documents shall be in form and substance satisfactory
to the Required Holder(s).

 

(b)                                 Compliance with Note Agreement; No Events of
Default.  The Company shall comply with the requirements set forth in clauses
(a) through (d) of paragraph 6B(v) of the Note Agreement with respect to the
Acquisition, and there shall be, as of the date of consummation of the
Acquisition, no event or condition which constitutes an Event of Default under
any of the Transaction Documents or which, with notice and/or the passage of
time, would constitute an Event of Default.

 

(c)                                  Representations and Warranties.  The
representations and warranties of contained in paragraph 8 of the Note Agreement
shall be true and correct on and as of the date of consummation of the
Acquisition with the same force and effect as if made on and as of such date.

 

SECTION 2.                         Amendments.  Effective on the Effective Date,
paragraph 6C of the Note Agreement is amended by (a) deleting the word “and” at
the end of clause (viii) thereof, (b) replacing the period at the end of clause
(ix) thereof with “; and” and (c) adding the following new clause (x) in proper
sequence::

 

“(x)                           Indebtedness consisting of bank guarantees or
letters of credit issued by one or more Banks for the account of a Foreign
Subsidiary of an Obligor in an aggregate amount not to exceed $500,000 at any
one time outstanding.”

 

SECTION 3.                         Conditions Precedent.  This letter shall
become effective as of the date (the “Effective Date”) upon which each of the
following conditions is satisfied:

 

3.1.                            Documents.  Each holder of a Subordinated Note
shall have received original counterparts or, if satisfactory to such holder,
certified or other copies of all of the following, each duly executed and
delivered by the party or parties thereto, in form and substance satisfactory to
such holder, dated the date hereof unless otherwise indicated, and on such date
in full force and effect:

 

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(a)                                 a copy of this letter, duly executed by the
Company and the Required Holder(s);

 

(b)                                 a copy of the attached Guarantor
Acknowledgment and Agreement, duly executed by the Subsidiary Guarantors; and

 

(c)                                  an executed copy of an amendment to the
Subordination Agreement executed by each holder of a Subordinated Note, the
Company, the Guarantors and the Bank Agent.

 

3.2.                            Credit Agreement.  Each holder of a Subordinated
Note shall have received a copy of an executed amendment to the Credit Agreement
in form and substance satisfactory to the Required Holder(s) containing, among
other things, a consent consistent with the Consent.

 

3.3.                            Fees and Expenses.  The Company shall have paid
the fees and expenses of special counsel to the holders of the Subordinated
Notes that have been presented to the Company as of the Effective Date.

 

3.4.                            Representations and Warranties.  The
representations and warranties of the Company in Section 4 hereof shall be true
and correct on the Effective Date.

 

3.5.                            Proceedings.  All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incident thereto shall be satisfactory in
substance and form to counsel to the holders of the Subordinated Notes, and each
holder of the Subordinated Notes shall have received all such counterpart
originals or certified or other copies of such documents as it may reasonably
request.

 

SECTION 4.                         Representations and Warranties.  To induce
the holders of the Subordinated Notes to execute and deliver this letter, the
Company hereby represents, warrants and covenants that (1) the execution and
delivery of this letter have been duly authorized by all necessary corporate
action on behalf of the Company and each Subsidiary Guarantor and this letter
has been executed and delivered by a duly authorized officer of the Company and
each Subsidiary Guarantor, and all necessary or required consents to this letter
have been obtained and are in full force and effect, (2) this letter constitutes
the legal, valid and binding obligation of the Company and each Subsidiary
Guarantor enforceable in accordance with its terms, except as enforceability may
be limited by (i) bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), (3) after giving effect to Sections 1 and 2
hereof, the representations and warranties contained in paragraph 8 of the Note
Agreement are true on and as of the Effective Date, (4) after giving effect to
Sections 1 and 2 hereof, there shall not exist on the Effective Date any Event
of Default or Default, and (5) neither the Company nor any Subsidiary Guarantor
has paid or agreed to pay, and neither the Company nor any Subsidiary Guarantor
will pay or agree to pay, any fees or other consideration to any Person in
connection with the amendment referenced in Section 3.2 hereof, other than
out-of-pocket fees and expenses of legal counsel to the lenders under the Credit
Agreement and out-of-pocket fees and expenses of legal counsel to the Company
and the Subsidiary Guarantors.

 

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SECTION 5.                         Reference to and Effect on Note Agreement and
other Transaction Documents.  Upon the effectiveness of the amendments in this
letter, each reference to the Note Agreement in any other document, instrument
or agreement shall mean and be a reference to the Note Agreement as modified by
this letter.  Except as specifically set forth in Sections 1 and 2 of this
letter, the Note Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects.  Except as specifically set forth in
Sections 1 and 2 of this letter, the execution, delivery and effectiveness of
this letter shall not (a) amend the Note Agreement, any Subordinated Note or any
other Transaction Document, (b) operate as a waiver of any right, power or
remedy of the holder of any Subordinated Note, or (c) constitute a waiver of, or
consent to any departure from, any provision of the Note Agreement, any
Subordinated Note or any other Transaction Document at any time.  The Company
acknowledges and agrees that it has no defense, whether legal or equitable,
setoff or counterclaim to the payment and performance of its obligations under
the Note Agreement or any other Transaction Document.  The execution, delivery
and effectiveness of this letter shall not be construed as a course of dealing
or other implication that the holders of Subordinated Notes have agreed to or
are prepared to grant any amendment, waiver or consent under the Note Agreement
or any other Transaction Document in the future, whether or not under similar
circumstances.

 

SECTION 6.                         Expenses.  The Company hereby confirms its
obligations under the Note Agreement, whether or not the transactions hereby
contemplated are consummated, to pay, promptly after request by any holder of a
Subordinated Note, all reasonable out-of-pocket costs and expenses, including
attorneys’ fees and expenses, incurred by the holders of the Subordinated Notes
in connection with this letter or the transactions contemplated hereby, in
enforcing any rights under this letter, or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this letter or the transactions contemplated hereby.  The obligations of the
Company under this Section 6 shall survive transfer by any holder of any
Subordinated Note and payment of any Subordinated Note.

 

SECTION 7.                         Governing Law.  THIS LETTER SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL
BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK (EXCLUDING ANY CONFLICTS OF LAW
RULES WHICH WOULD OTHERWISE CAUSE THIS AGREEMENT TO BE CONSTRUED OR ENFORCED IN
ACCORDANCE WITH, OR THE RIGHTS OF THE PARTIES TO BE GOVERNED BY, THE LAWS OF ANY
OTHER JURISDICTION).

 

SECTION 8.                         Counterparts; Facsimile Signature Pages;
Section Titles.  This letter may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same instrument. 
Delivery of an executed counterpart of a signature page to this letter by
facsimile or electronic transmission shall be effective as delivery of a
manually executed counterpart of this letter.  The section titles contained in
this letter are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

 

[signature pages follow]

 

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Very truly yours,

 

 

 

PRUDENTIAL CAPITAL PARTNERS IV, L.P.

 

 

 

By:

Lake Street Partners IV, L.P. (its General

 

 

Partner)

 

 

 

 

 

 

 

By:

/s/ Stephen F. Szejner

 

 

Vice President

 

 

 

 

 

PRUDENTIAL CAPITAL PARTNERS

 

  MANAGEMENT FUND IV, L.P.

 

 

 

By:

Market Street Holdings IV, LLC (its

 

 

General Partner)

 

 

 

 

By:

Prudential Investment Management, Inc. (its

 

 

Managing Member)

 

 

 

 

 

 

 

By:

/s/ Stephen F. Szejner

 

 

Vice President

 

 

 

 

 

 

 

PRUDENTIAL CAPITAL PARTNERS

 

  (PARALLEL FUND) IV, L.P.

 

 

 

 

By:

Lake Street Partners IV, L.P. (its General

 

 

Partner)

 

 

 

 

 

 

 

By:

/s/ Stephen F. Szejner

 

 

Vice President

 

Consent and Amendment No. 3 to Note Agreement

 

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Agreed and accepted:

 

 

 

ALLIED MOTION TECHNOLOGIES INC.

 

 

 

 

 

By:

/s/ Michael R. Leach

 

Name:

Michael R. Leach

 

Title:

Chief Financial Officer

 

 

Consent and Amendment No. 3 to Note Agreement

 

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GUARANTOR ACKNOWLEDGMENT AND AGREEMENT

 

The undersigned consent and agree to and acknowledge the terms of the foregoing
Amendment No. 3 to Note Agreement dated as of January   , 2016 (the
“Amendment”).  The undersigned further agree that the obligations of the
undersigned pursuant to the Guaranty Agreement dated as of October 18, 2013 (the
“Subsidiary Guaranty”) executed by the undersigned are hereby ratified and shall
remain in full force and effect and be unaffected hereby.

 

Each of the undersigned acknowledges and agrees that it has no defense, whether
legal or equitable, setoff or counterclaim to the payment and performance of its
obligations under the Subsidiary Guaranty.

 

 

 

ALLIED MOTION CONTROL CORPORATION

 

 

 

 

By:

/s/ Michael R. Leach

 

Name:

Michael R. Leach

 

Title:

Vice President

 

 

 

 

 

 

 

EMOTEQ CORPORATION

 

 

 

 

By:

/s/ Michael R. Leach

 

Name:

Michael R. Leach

 

Title:

Vice President

 

 

 

 

 

 

 

MOTOR PRODUCTS CORPORATION

 

 

 

 

By:

/s/ Michael R. Leach

 

Name:

Michael R. Leach

 

Title:

Vice President

 

 

 

 

 

 

 

AMOT I, INC.

 

 

 

 

By:

/s/ Michael R. Leach

 

Name:

Michael R. Leach

 

Title:

Vice President

 

Guarantor Acknowledgment and Agreement

 

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AMOT II, INC.

 

 

 

 

By:

/s/ Michael R. Leach

 

Name:

Michael R. Leach

 

Title:

Vice President

 

 

 

 

 

 

 

AMOT III, INC.

 

 

 

 

By:

/s/ Michael R. Leach

 

Name:

Michael R. Leach

 

Title:

Vice President

 

 

 

 

 

 

 

STATURE ELECTRIC, INC.

 

 

 

 

By:

/s/ Michael R. Leach

 

Name:

Michael R. Leach

 

Title:

Vice President

 

 

 

 

 

 

 

GLOBE MOTORS, INC.

 

 

 

 

By:

/s/ Michael R. Leach

 

Name:

Michael R. Leach

 

Title:

Vice President

 

Guarantor Acknowledgment and Agreement

 

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