Exhibit 10.10

 

AMENDMENT TO

CREDIT AGREEMENT AND CONSENT

 

This Amendment to Credit Agreement and Consent (“Amendment”), dated as of
October 20, 2014, is made by and among BANK OF AMERICA, N.A., as Administrative
Agent (in such capacity, “Administrative Agent”), the Lenders (as defined in the
Credit Agreement), and ALLIED MOTION TECHNOLOGIES INC. and ALLIED MOTION
TECHNOLOGIES B.V. (each a “Borrower” and collectively, the “Borrowers”).

 

Statement of the Premises

 

The Administrative Agent, the Lenders and the Borrowers have previously entered
into the Credit Agreement dated as of October 18, 2013 (as amended, the “Credit
Agreement”).  All capitalized terms not otherwise defined in this Amendment have
the meanings given them in the Credit Agreement.

 

The Borrowers have advised the Administrative Agent that one or more of the
Borrowers has entered into a letter of intent to acquire all of the assets or
equity interests of a Swedish entity for a purchase price of approximately Three
Million Dollars (USD 3,000,000) (the “Acquisition”).  Borrowers have requested
the consent of the Administrative Agent and the Lenders to the Acquisition.

 

The Borrowers have also requested that the Administrative Agent and the Lenders
agree to amend certain financial covenants set forth in the Credit Agreement and
to amend the Credit Agreement to permit certain future acquisitions and to
permit the Borrower’s Subsidiaries Allied Motion (Changzhou) Motors Co. Ltd.
and/or Allied Motion (Changzhou) Trading Co., Ltd. to enter into certain
financing with Bank of America, N.A., Shanghai Branch.

 

The Administrative Agent and the Lenders desire to consent to the Acquisition,
and the Administrative Agent, the Lenders and the Borrowers have agreed to amend
certain provisions of the Credit Agreement, each on the terms and conditions set
forth herein.

 

Statement of Consideration

 

Accordingly, in consideration of the premises and under the authority of
Section 5-1103 of the New York General Obligations Law, the Administrative
Agent, the Borrowers and the Lenders agree as follows:

 

Agreement

 

1.                                      Defined Terms.  Capitalized terms used
and not otherwise defined herein shall have the meanings ascribed to such terms
in the Credit Agreement.

 

2.                                      Consent.

 

a)                                     Effective upon the satisfaction of all
conditions specified in Section 2(b) and Section 5 hereof, the Administrative
Agent and the Lenders hereby consent to the Acquisition (“Consent”), as follows:

 

--------------------------------------------------------------------------------

 

(i)                                     Limitation on Consent.  The foregoing
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 Credit Agreement or
any other Loan Document, (ii) a waiver of any right, power or remedy of the
Administrative Agent or any Lender under the Credit Agreement or any Loan
Document, or (iii) a waiver of or consent to any Event of Default or Default
under the Credit Agreement or any Loan Document.

 

(ii)                                  Acquisition Basket.  The Administrative
Agent, the Borrowers and the Lenders 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 Credit Agreement permitted under Section 7.02(e)(v) of the Credit
Agreement, as amended by this Amendment.

 

b)                                     The effectiveness of this Consent shall
be conditioned upon the satisfaction of the following conditions precedent:

 

(i)                                     Acquisition Documents.  The Borrowers
shall have delivered to the Administrative Agent a true, complete and correct
copy of the asset or stock purchase agreement executed in connection with the
Acquisition (including the Exhibits and Schedules thereto) and any other
documents relating to the Acquisition as the Administrative Agent shall request,
which requested documents shall be in form and substance satisfactory to the
Administrative Agent.

 

(ii)                                  No Events of Default.  There is, as of the
date of consummation of the Acquisition, no event or condition which constitutes
an Event of Default under any of the Loan Documents or which, with notice and/or
the passage of time, would constitute an Event of Default.

 

(iii)                               Representations and Warranties.  The
representations and warranties of each Borrower set forth in Article 5 of the
Credit Agreement are 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.

 

3.                                      Amendments.  Effective upon the
satisfaction of all conditions specified in Section 5 hereof, the Credit
Agreement is hereby amended as follows:

 

a)                                     Section 7.02 of the Credit Agreement is
hereby amended by adding the following as the new subsection (e) thereof:

 

“(e)                            Any acquisition by Borrowers and/or any of their
Subsidiaries of all or substantially all of the assets or Equity Interests of
any other Person (the “Target”) in the same line of business, or assets
constituting all or substantially all of a division or product line of a Target
in the same line of business, so long as the Borrowers deliver to the
Administrative Agent and the Lenders a certificate in form and content
satisfactory to the Administrative Agent (“Acquisition Certificate”) indicating
that (i)

 

2

--------------------------------------------------------------------------------

 

immediately prior to contracting for or consummating such acquisition there does
not exist, and there does not occur as a direct or indirect result of the
consummation of such acquisition, any Event of Default or Default, (ii) each of
the Borrowers is in compliance with the financial covenants set forth in
Section 7.10 of this Agreement on a pro-forma basis as of the last fiscal
quarter of the Borrowers most recently ended for which financial statements are
then available or required to be delivered under Section 6.01 of this Agreement
assuming the acquisition had been consummated on the first day of the Reference
Period ending on the last day of such fiscal quarter, and the Borrowers
demonstrate based on pro-forma projections covering the four fiscal quarters of
the Borrowers following the date of such Acquisition Certificate that Borrowers
will be in compliance with the financial covenants set forth in Section 7.10 of
this Agreement upon and after consummation of such acquisition, (iii) such
acquisition is being completed on a non-hostile basis without opposition from
the board of directors, managers or equity owners of the Target, (iv) with
respect to any assets or Equity Interests of any Person acquired directly or
indirectly pursuant to any such acquisition, there are no liens thereon other
than Permitted Liens, and (v) the aggregate consideration paid by Borrowers
and/or any of their Subsidiaries in connection with all such acquisitions during
the term of this Agreement does not exceed $10,000,000.00, unless specifically
consented to by the Required Lenders.”

 

b)                                     Section 7.03(i) of the Credit Agreement
is hereby deleted and replaced with the following:

 

“(i)                               Indebtedness of Allied Motion (Changzhou)
Motors Co. Ltd. and/or Allied Motion (Changzhou) Trading Co., Ltd. to
(A) JPMorgan Chase Bank (China) Company Limited Shanghai Branch in an amount not
to exceed 9,500,000 Chinese Renminbi or (B) Bank of American, N.A. (Shanghai
Branch) (the “Allied China Line”).

 

c)                                      Section 7.10(b) of the Credit Agreement
is hereby deleted in its entirety and replaced with the following:

 

“(b)                           Total Leverage Ratio.  Permit the Total Leverage
Ratio, as of the end of any fiscal quarter to be greater than (i) for the fiscal
quarters ending on or about December 31, 2013, March 31, 2014, June 30, 2014 and
September 30, 2014, 4.0:1.0, (ii) for the fiscal quarter ending on or about
December 31, 2014, March 31, 2015, June 30, 2015 and September 30, 2015,
3.5:1.0, (iii) for the fiscal quarters ending on or about December 31, 2015,
March 31, 2016, June 30, 2016 and September 30, 2016, 3.0:1.0 or (iv) for each
fiscal quarter thereafter, 2.5:1.0.”

 

4.                                      Representations and Warranties.  Each
Borrower makes the following representations and warranties to the
Administrative Agent and the Lenders which shall be

 

3

--------------------------------------------------------------------------------

 

deemed to be continuing representations and warranties so long as any
Obligations, including indebtedness of either Borrower to Administrative Agent
or the Lenders arising under the Credit Agreement or any Loan Documents, remain
unpaid:

 

a)                                     Authorization.  Each Borrower has full
power and authority to execute, deliver and perform this Amendment,  which has
been duly authorized by all proper and necessary action.  The execution and
delivery of this Amendment by each Borrower will not violate the provisions of,
or cause a default under, either Borrower’s Organizational Documents or any
agreement to which such Borrower is a party or by which it or its assets are
bound.

 

b)                                     Binding Effect.  This Amendment has been
duly executed and delivered by each Borrower and constitutes the legal, valid
and binding obligation of each Borrower enforceable in accordance with its
terms, except as enforceability may be limited by applicable Debtor Relief Laws
and laws affecting Creditor’s rights generally.

 

c)                                      Consents; Governmental Approvals.  No
consent, approval or authorization of, or registration, declaration or filing
with, any governmental body or authority or any other party is required in
connection with the valid execution, delivery or performance of this Amendment
or any other document executed and delivered herewith or in connection with any
other transactions contemplated hereby.

 

d)                                     No Events of Default.  There is, on the
date hereof, no event or condition which constitutes an Event of Default under
any of the Loan Documents or which, with notice and/or the passage of time,
would constitute an Event of Default.

 

e)                                      No Material Misstatements.  Neither this
Amendment nor any document delivered to the Administrative Agent or the Lenders
by or on behalf of either Borrower to induce the Administrative Agent and the
Lenders to enter into this Amendment or otherwise in connection with this
Amendment contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein or therein not misleading
in light of the circumstances in which they were made.

 

f)                                       Credit Agreement.  The representations
and warranties of each Borrower set forth in Article 5 of the Credit Agreement
are true and correct on and as of the date hereof with the same force and effect
as if made on and as of such date, subject, however to the exceptions set forth
in Section 4.02(a) of the Credit Agreement.

 

5.                                      Conditions of Effectiveness. This
Amendment shall become effective when and only when the Administrative Agent
shall have received counterparts of this Amendment executed by the Borrowers,
the Administrative Agent and the Lenders and the following conditions shall have
been fulfilled:

 

a)                                     Authorization.  Each Borrower shall have
taken appropriate action to authorize the execution and delivery of this
Amendment, and the taking of all action called for by this Amendment.

 

b)                                     No Default.  No Event of Default and no
event which with notice or lapse of time or both would become such an Event of
Default shall have occurred and be continuing.

 

4

--------------------------------------------------------------------------------

 

c)                                      Representations and Warranties.  The
representations and warranties of each Borrower set forth in Article 5 of the
Credit Agreement shall be true on and as of the date hereof with the same force
and effect as if made on and as of such date, subject, however to the exceptions
set forth in Section 4.02(a) of the Credit Agreement.

 

d)                                     Senior Subordinated Note Purchase
Agreement.  The Borrowers shall have entered into an amendment to the Senior
Subordinated Note Purchase Agreement in form and substance satisfactory to the
Administrative Agent, pursuant to which the Senior Subordinated Note Holders
agree to modify the total leverage ratio set forth in the Senior Subordinated
Note Purchase Agreement so that such ratio remains not less than 0.5% higher
than the maximum Total Leverage Ratio set forth in the Agreement.

 

6.                                      Reference to and Effect on Loan
Documents.

 

a)                                     Upon the effectiveness hereof, each
reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,”
“herein,” or words of like import, and each reference in the Loan Documents to
the Credit Agreement shall mean and be a reference to the Credit Agreement as
amended by this Amendment.

 

b)                                     The Credit Agreement, as amended by this
Amendment, represents the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof.  This Amendment supersedes all
prior negotiations and any course of dealing between the parties with respect to
the subject matter hereof.  This Amendment shall be binding upon each Borrower
and its successors and assigns, and shall inure to the benefit of, and be
enforceable by, the Administrative Agent, the Lenders and each of their
successors and assigns.  The Credit Agreement, as amended hereby, is in full
force and effect and, as so amended, is hereby ratified and reaffirmed in its
entirety.  Each Borrower acknowledges and agrees that the Credit Agreement (as
amended by this Amendment) and all other Loan Documents to which such Borrower
is a party are in full force and effect, that such Borrower’s obligations
thereunder and under this Amendment are its legal valid and binding obligations
enforceable against it in accordance with the terms thereof and hereof, and that
such Borrower has no defense, whether legal or equitable, setoff or counterclaim
to the payment and performance of such obligations.

 

c)                                      The execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of the Administrative Agent or the Lenders under the Credit
Agreement, nor constitute a waiver of any provision of the Credit Agreement.

 

7.                                      Costs and Expenses.  Borrowers agree to
pay on demand all costs and expenses of the Administrative Agent and the Lenders
in connection with the preparation, execution and delivery of this Amendment,
including the fees and out-of-pocket expenses of counsel for the Administrative
Agent and the Lenders.

 

8.                                      Governing Law.  This Amendment shall be
governed and construed in accordance with the laws of the State of New York
without regard to any conflicts-of-laws rules which would require the
application of the laws of any other jurisdiction.

 

5

--------------------------------------------------------------------------------

 

9.                                      Headings.  Section headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.

 

10.                               Execution in Counterparts.  This Amendment may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which when taken together shall constitute
but one and the same document.

 

[Signature Page Follows]

 

6

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective representatives thereunto duly authorized, as of the date
first above written.

 

 

ALLIED MOTION TECHNOLOGIES INC.

 

 

 

 

 

By:

/s/ ROBERT P. MAIDA

 

Name:

Robert P. Maida

 

Title:

Chief Financial Officer

 

 

 

 

 

ALLIED MOTION TECHNOLOGIES B.V.

 

 

 

 

 

By:

/s/ HARRY CLOOS

 

Name:

Harry Cloos

 

Title:

Director

 

[Signature Page to Amendment to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

ADMINISTRATIVE AGENT:

 

 

 

 

 

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

 

 

 

 

 

By:

/s/ Colleen M. O’Brien

 

Name:

Colleen M. O’Brien

 

Title:

Sr. Vice President

 

[Signature Page to Amendment to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

LENDERS:

 

 

 

 

 

BANK OF AMERICA, N.A., AS A LENDER, L/C ISSUER

 

 

 

 

 

By:

/s/ COLLEEN M. O’BRIEN

 

Name:

Colleen M. O’Brien

 

Title:

Sr. Vice President

 

[Signature Page to Amendment to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

MANUFACTURERS AND TRADERS TRUST COMPANY

 

 

 

 

 

By:

/s/ ROSS COMARATIA

 

Name:

Ross Comaratia

 

Title:

Vice President

 

[Signature Page to Amendment to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ SHAUN MALLEN

 

Name:

Shaun Mallen

 

Title:

Vice President

 

[Signature Page to Amendment to Credit Agreement]

 

--------------------------------------------------------------------------------