EX-99.2 4 a14-1132_1ex99d2.htm EX-99.2

Exhibit 99.2

 

UNAUDITED PROFORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS

 

On August 22, 2013, Allied Motion Technologies Inc. (“Allied Motion”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) to purchase all of the outstanding equity interests of Globe Motors, Inc., a Delaware corporation (“Globe Motors”) from Safran USA, Inc. (the “Seller”), for approximately $90 million in cash. The purchase price paid will be subject to adjustment to reflect, among other things, the working capital and cash on hand of Globe Motors at the time of closing. The acquisition of Globe Motors closed on October 18, 2013 and the post-closing adjustment of the purchase price is expected to be completed during the first quarter of 2014.

 

The unaudited pro forma combined consolidated balance sheet is presented to show how Allied Motion might have looked had the acquisition occurred as of that date. The unaudited pro forma combined consolidated statements of operations and comprehensive income for the year ended December 31, 2012 and the nine months ended September 30, 2013 are presented to show how Allied Motion might have looked had the acquisition occurred as of January 1, 2012, the beginning of the earliest period presented.

 

This pro forma information is based on, and should be read in conjunction with, the following:

 

·                  The historical audited financial statements of Allied Motion as of and for the fiscal year ended December 31, 2012, included in a Form 10-K filed on March 11, 2013;

 

·                  The historical unaudited financial statements of Allied Motion as of and for the nine months ended September 30, 2013, included in a Form 10-Q filed on November 14, 2013;

 

·                  The historical audited financial statements of Globe Motors as of and for the fiscal year ended December 31, 2012, included in this Form 8-K/A;

 

·                  The historical audited financial statements of Globe Motors for the nine months ended September 30, 2013, included in this Form 8-K/A.

 

The unaudited pro forma combined consolidated financial information was prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited pro forma adjustments reflecting the acquisition have been prepared in accordance with the business combination accounting guidance and reflect the preliminary allocation of the purchase price to the acquired assets and liabilities based upon the estimate of fair values, using the assumptions set forth in the notes to the unaudited pro forma combined consolidated financial information. The detailed assumptions used to prepare the unaudited pro forma combined consolidated financial information are contained in the notes hereto and such assumptions should be reviewed in their entirety.

 

The unaudited pro forma combined consolidated financial information is provided for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the acquisition had been completed as of the dates set forth above, nor is it indicative of the future results or financial position of the combined company. In connection with the unaudited pro forma combined consolidated financial information, the total purchase consideration was allocated based on the best estimates of fair value. The allocation is dependent upon certain valuations and other analysis that are not yet final. Accordingly, the pro forma acquisition price adjustments are subject to further adjustments as additional information becomes available and as additional analyses are performed. There can be no assurances that the final valuations will not result in material changes to the estimated purchase price allocation. The unaudited pro forma combined financial information also does not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transaction or any integration costs. Furthermore, the unaudited pro forma combined consolidated statements of operations and comprehensive income do not include certain nonrecurring charges which resulted directly from the acquisition as described in the accompanying notes.

 



 

Unaudited Pro Forma Combined Consolidated Balance Sheet

 

As of September 30, 2013

(In thousands, except per share data)

 

 

 

Historical Results

 

 

 

 

 

 

 

 

 

 

 

Allied Motion
Technologies
Inc.

 

Globe Motors,
Inc.

 

Combined
Subtotal

 

Pro Forma
Adjustments

 

 

 

Unaudited
Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

11,654

 

$

648

 

$

12,302

 

$

(775

)

A, B

 

$

11,527

 

Due from affiliates

 

 

3,364

 

3,364

 

(3,364

)

H

 

 

Trade receivables, net of allowance for doubtful accounts

 

13,429

 

19,490

 

32,919

 

 

 

 

32,919

 

Inventories, net

 

15,167

 

9,703

 

24,870

 

500

 

C

 

25,370

 

Deferred income taxes

 

731

 

1,581

 

2,312

 

(1,581

)

B

 

731

 

Prepaid expenses and other assets

 

1,431

 

2,333

 

3,764

 

 

 

 

3,764

 

Total Current Assets

 

42,412

 

37,119

 

79,531

 

(5,220

)

 

 

74,311

 

Property, plant and equipment, net

 

9,649

 

17,128

 

26,777

 

13,176

 

E, F

 

39,953

 

Deferred income taxes

 

4,115

 

1,698

 

5,813

 

 

 

 

5,813

 

Intangible assets, net

 

2,227

 

 

2,227

 

34,000

 

G

 

36,227

 

Other long-term assets, net

 

2,672

 

 

2,672

 

1,921

 

D

 

4,593

 

Goodwill

 

5,916

 

44,692

 

50,608

 

(34,619

)

B, E, F, G, H

 

15,989

 

Total Assets

 

$

66,991

 

$

100,637

 

$

167,628

 

$

9,258

 

 

 

$

176,886

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Line of credit

 

$

 

$

 

$

 

$

9,225

 

A

 

$

9,225

 

Current maturities of long-term debt

 

1,141

 

 

1,141

 

 

 

 

1,141

 

Accounts payable

 

7,628

 

11,562

 

19,190

 

 

 

 

19,190

 

Accrued liabilities

 

5,485

 

4,230

 

9,715

 

961

 

D

 

10,676

 

Total Current Liabilities

 

14,254

 

15,792

 

30,046

 

10,186

 

 

 

40,232

 

Long-term debt

 

 

 

 

80,000

 

A

 

80,000

 

Deferred income taxes

 

885

 

653

 

1,538

 

2,304

 

E

 

3,842

 

Deferred compensation arrangements

 

2,692

 

 

2,692

 

 

 

 

2,692

 

Pension and post-retirement obligations

 

3,694

 

 

3,694

 

 

 

 

3,694

 

Total Liabilities

 

21,525

 

16,445

 

37,970

 

92,490

 

 

 

130,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, no par value

 

23,543

 

1

 

23,544

 

(1

)

H

 

23,543

 

Preferred stock, par value $1.00 per share

 

 

 

 

 

 

 

 

Additional paid-in capital

 

 

66,397

 

66,397

 

(66,397

)

H

 

 

Retained earnings

 

22,494

 

13,396

 

35,890

 

(12,436

)

D, H

 

23,454

 

Accumulated other comprehensive (loss) income

 

(571

)

4,398

 

3,827

 

(4,398

)

H

 

(571

)

Total Stockholders’ Equity

 

45,466

 

84,192

 

129,658

 

(83,232

)

 

 

46,426

 

Total Liabilities and Stockholders’ Equity

 

$

66,991

 

$

100,637

 

$

167,628

 

$

9,258

 

 

 

$

176,886

 

 

The accompanying notes are an integral part of these unaudited pro forma combined consolidated financial statements.

The pro forma adjustments are explained in Notes 3 and 4.

 



 

Unaudited Pro Forma Combined Consolidated Statement of Operations and Comprehensive Income

 

For the Nine Months Ended September 30, 2013

(In thousands, except per share data)

 

 

 

Historical Results

 

 

 

 

 

 

 

 

 

 

 

Allied Motion
Technologies
Inc.

 

Globe Motors,
Inc.

 

Combined
Subtotal

 

Pro Forma
Adjustments

 

 

 

Unaudited
Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

75,371

 

$

89,260

 

$

164,631

 

$

 

 

 

$

164,631

 

Cost of products sold

 

53,075

 

66,803

 

119,878

 

 

 

 

119,878

 

Gross margin

 

22,296

 

22,457

 

44,753

 

 

 

 

44,753

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling

 

3,640

 

2,661

 

6,301

 

 

 

 

6,301

 

General and administrative

 

8,098

 

8,759

 

16,857

 

(2,789

)

J, K, O, P

 

14,068

 

Engineering and development

 

5,123

 

4,476

 

9,599

 

 

 

 

9,599

 

Business development costs

 

1,235

 

 

1,235

 

(1,235

)

I

 

 

Relocation costs

 

234

 

 

234

 

 

 

 

234

 

Amortization of intangible assets

 

252

 

 

252

 

1,800

 

M

 

2,052

 

Total operating costs and expenses

 

18,582

 

15,896

 

34,478

 

(2,224

)

 

 

32,254

 

Operating income

 

3,714

 

6,561

 

10,275

 

2,224

 

 

 

12,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(30

)

(238

)

(268

)

(4,698

)

L, N

 

(4,966

)

Other income (expense)

 

58

 

623

 

681

 

 

 

 

681

 

Total other income (expense), net

 

28

 

385

 

413

 

(4,698

)

 

 

(4,285

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

3,742

 

6,946

 

10,688

 

(2,474

)

 

 

8,214

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

1,130

 

2,588

 

3,718

 

(965

)

Q

 

2,753

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

2,612

 

$

4,358

 

$

6,970

 

$

(1,509

)

 

 

$

5,461

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

352

 

164

 

516

 

 

 

 

516

 

Comprehensive income

 

$

2,964

 

$

4,522

 

$

7,425

 

$

(1,509

)

 

 

$

5,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

$

0.30

 

 

 

 

 

 

 

 

 

$

0.60

 

Basic weighted average common shares

 

8,778

 

 

 

 

 

 

 

 

 

9,026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

$

0.30

 

 

 

 

 

 

 

 

 

$

0.60

 

Diluted weighted average common shares

 

8,778

 

 

 

 

 

 

 

 

 

9,026

 

 

The accompanying notes are an integral part of these unaudited pro forma combined consolidated financial statements.

The pro forma adjustments are explained in Notes 3 and 4.

 



 

Unaudited Pro Forma Combined Consolidated Statement of Operations and Comprehensive Income

 

For the Year Ended December 31, 2012

(In thousands, except per share data)

 

 

 

Audited Historical Results

 

 

 

 

 

 

 

 

 

 

 

Allied Motion
Technologies
Inc.

 

Globe Motors,
Inc.

 

Combined
Subtotal

 

Pro Forma
Adjustments

 

 

 

Unaudited
Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

101,968

 

$

106,479

 

$

208,447

 

$

 

 

 

$

208,447

 

Cost of products sold

 

72,328

 

77, 436

 

149,764

 

 

 

 

149,764

 

Gross margin

 

29,640

 

29,043

 

58,683

 

 

 

 

58,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling

 

5,093

 

3,491

 

8,584

 

 

 

 

8,584

 

General and administrative

 

10,811

 

8,352

 

19,163

 

(390

)

I, J, K, O, P

 

18,773

 

Engineering and development

 

6,060

 

5,904

 

11,964

 

 

 

 

11,964

 

Business development costs

 

 

 

 

 

 

 

 

Relocation costs

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

548

 

 

548

 

2,400

 

M

 

2,948

 

Total operating costs and expenses

 

22,512

 

17,747

 

40,259

 

2,010

 

 

 

42,269

 

Operating income

 

7,128

 

11,296

 

18,424

 

(2,010

)

 

 

16,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(13

)

(147

)

(160

)

(6,503

)

L, N

 

(6,663

)

Other income

 

383

 

1,467

 

1,850

 

 

 

 

1,850

 

Total other income, net

 

370

 

1,320

 

1,690

 

(6,503

)

 

 

(4,813

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

7,498

 

12,616

 

20,114

 

(8,513

)

 

 

11,601

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

2,101

 

4,409

 

6,510

 

(3,320

)

Q

 

3,190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

5,397

 

$

8,207

 

$

13,604

 

$

(5,193

)

 

 

$

8,411

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

624

 

63

 

687

 

 

 

 

687

 

Pension adjustment

 

(331

)

 

(331

)

 

 

 

(331

)

Comprehensive income

 

$

5,690

 

$

8,270

 

$

13,960

 

$

(5,193

)

 

 

$

8,767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

$

0.63

 

 

 

 

 

 

 

 

 

$

0.95

 

Basic weighted average common shares

 

8,616

 

 

 

 

 

 

 

 

 

8,864

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

$

0.63

 

 

 

 

 

 

 

 

 

$

0.95

 

Diluted weighted average common shares

 

8,616

 

 

 

 

 

 

 

 

 

8,864

 

 

The accompanying notes are an integral part of these unaudited pro forma combined consolidated financial statements.

The pro forma adjustments are explained in Notes 3 and 4.

 



 

ALLIED MOTION TECHNOLOGIES INC.

 

NOTES TO UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS

 

1.              BASIS OF PRO FORMA PRESENTATION

 

On August 22, 2013, Allied Motion Technologies Inc. (“Allied Motion”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) to purchase all of the outstanding equity interests of Globe Motors, Inc., a Delaware corporation (“Globe Motors”) from Safran USA, Inc. (the “Seller”), for approximately $90 million in cash. The purchase price paid will be subject to adjustment to reflect, among other things, the working capital and cash on hand of Globe Motors at the time of closing.  The acquisition of Globe Motors closed on October 18, 2013 and the post-closing adjustment of the purchase price is expected to be completed during the first quarter of 2014.

 

The unaudited pro forma combined consolidated balance sheet as of September 30, 2013 is based on historical financial statements of Allied Motion and the historical financial statements of Globe Motors after giving effect to the acquisition adjustments.  The unaudited pro forma combined consolidated balance sheet as of September 30, 2013 is presented as if the acquisition had occurred on September 30, 2013.

 

The unaudited pro forma combined consolidated statements of operations and comprehensive income for the year ended December 31, 2012 and for the nine months ended September 30, 2013 is based on the historical financial statements of Allied Motion and Globe Motors for the respective periods then ended after giving effect to the acquisition adjustments.  The unaudited pro forma combined consolidated statements of operations and comprehensive income are presented as if the acquisition had occurred on January 1, 2012.

 

The historical financial information has been adjusted to give pro forma effect to events that are (i) directly attributable to the transaction, (ii) factually supportable, and (iii) with respect to the unaudited pro forma combined consolidated statements of operations and comprehensive income, expected to have a continuing impact on the combined results. The pro forma adjustments are preliminary and based on estimated of the fair value and useful lives of the assets acquired and liabilities assumed and have been prepared to illustrate the estimated effect of the transaction and certain other adjustments.

 

Under the acquisition method, acquisition-related transaction costs (e.g. advisory, legal, valuation and other professional fees) are not included as consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. These costs are not presented in the unaudited pro forma combined consolidated statements of operations and comprehensive income because they will not have a continuing impact on the combined results.

 

2.              PURCHASE PRICE ALLOCATION

 

The purchase price was approximately $90 million in cash payments.

 

The allocation of the purchase price paid for Globe Motors is based on estimated fair values of the assets acquired and liabilities assumed of Globe Motors as of September 30, 2013. The allocation of the purchase price is preliminary as the valuation of both the tangible and identifiable intangible assets is being finalized. While the final amounts allocated to assets and liabilities could change from the information presented in the unaudited pro forma combined condensed financial statements, the Company does not expect changes to be material. Cost and fees incurred by Allied Motion associated with the acquisition of Globe Motors are estimated to be approximately $4.1 million.

 

The preliminary allocation of purchase price based on estimated fair values (in thousands):

 

Net tangible assets

 

 

 

 

 

Working capital

 

$

18,580

 

 

 

Property, plant and equipment

 

30,304

 

 

 

Deferred income tax liabilities

 

(2,957

)

$

45,927

 

Identifiable purchased intangible assets:

 

 

 

 

 

Trade name

 

4,000

 

 

 

Customer relationships

 

30,000

 

34,000

 

Goodwill

 

 

 

10,073

 

Total purchase price

 

 

 

$

90,000

 

 



 

Intangible assets

 

The fair value of identifiable intangible assets of $34.0 million has been allocated to the following asset categories (in thousands):

 

 

 

Preliminary
Value

 

First 12
Months
Amortization

 

Amortization
Method

 

Estimated
Useful
Life

 

Trade name

 

$

4,000

 

$

400

 

Straight Line

 

10 Years

 

Customer relationships

 

30,000

 

2,000

 

Straight Line

 

15 Years

 

 

 

$

34,000

 

$

2,400

 

 

 

 

 

 

3.              UNAUDITED PRO FORMA ADJUSTMENTS

 

The unaudited pro forma combined consolidated balance sheet as of September 30, 2013 and unaudited pro forma combined consolidated statements of operations and comprehensive income for the nine months ended September 30, 2013 and for the year ended December 31, 2012 gives effect to the following adjustments (in thousands):

 

A-           To reflect the issuance of both term loan and senior subordinated notes, and borrowings on revolving line of credit facility, related to the acquisition.

 

B-           To reflect the fair value of the purchased cash, intangible assets and goodwill resulting from the acquisition and the related deferred taxes.

 

C-           To reflect the estimated purchase accounting adjustment for capitalization of estimated manufacturing profit in inventory acquired.  (Note: The unaudited pro forma combined consolidated statement of operations and comprehensive income does not reflect the impact of the one-time adjustment to costs of products sold during the periods when this inventory will be sold.)

 

D-           To reflect accrued transaction costs and debt issuance costs related to the acquisition and the incurrence of related debt.  This adjustment reflects the accrual of expected transaction costs as of September 30, 2013.

 

E-           To reflect the fair value of property, plant and equipment acquired in business combination and the related deferred taxes attributed to the difference in the tax and book basis for the foreign assets.

 

F-            To reflect the removal of Globe Motors’ intangible assets ($100) and goodwill ($44,692) at the date of purchase.

 

G-          To reflect the fair value of the purchased intangible assets and goodwill resulting from the acquisition and the related deferred taxes attributed to the difference in the tax and book basis for the foreign assets.

 

H-          To reflect the removal of Globe Motors’ historical equity ($36,036) at the date of purchase and the due from affiliates ($3,364) that is not being assumed as part of the Purchase Agreement.

 

I-               To reflect the removal of Allied Motion’s transaction costs ($1,235 and $24, respectively) incurred that were directly attributable to the acquisition.

 

J-             To reflect the removal of Globe Motors’ litigation costs ($2,429 and $986, respectively) for which Allied Motion is being indemnified by the Seller.

 

K-         To reflect the removal of Globe Motors’ corporate allocation charges from the Seller ($1,107 and $402, respectively) that will not be replaced and the removal of contributions to a supplemental retirement plan for employees ($424 and $539, respectively) which plan will be terminated in connection with the acquisition. .

 

L-           To reflect the interest expense ($4,410 and $6,119, respectively) on the new acquisition debt calculated using the following interest rates:  (1) $50 million five-year term loan - $25 million using a floating Libor based interest rate of 2.67% and $25 million using a fixed hedged interest rate of 3.62%; (2) Senior Subordinated Notes at the stated interest rate of 14.50%; (3) revolving line of credit - 60% using a Libor based floating interest rate of 2.7% and 40% using a Prime based floating interest rate of 4.75%.  The effect on income of a 1/8 % increase or decrease in the floating interest rates would result in an increase or decrease in interest expense for the nine months ended September 30, 2013 and year ended December 31, 2012 of $23 and $37, respectively.

 



 

M-        To reflect the amortization expense of finite lived purchased intangible assets, which lives are ten years for trade names and fifteen years for customer relationships.

 

N-           To reflect the amortization of new debt issuance costs as interest expense ($288 and $384, respectively), which amortization period is five years.

 

O-          To reflect the depreciation expense ($864 and $1,152, respectively) of purchased property, plant and equipment, which depreciable lives are ten years for machinery and equipment and thirty years for real property.

 

P-            To reflect the stock based compensation expense ($307 and $409, respectively) for 248 thousand restricted stock awards issued in relation to the acquisition of Globe Motors.

 

Q-          To reflect the recognition of income taxes at a 39% effective rate, on the combined income before income taxes as adjusted for the income statement pro forma adjustments.

 

4.              UNAUDITED PRO FORMA COMBINED CONSOLIDATED NET INCOME PER SHARE

 

The pro forma basic and diluted net income per share amounts presented are based upon the weighted average number of common shares outstanding during the periods presented.  The basic and diluted earnings per share and the information of the number of shares used to compute basic and diluted earnings per share.

 

5.              VARIABLE RATE DEBT

 

Revolving Credit Facility and Term Loan

 

In connection with the funding of the acquisition of Globe Motors, Allied Motion entered into a Credit Agreement (the “Credit Agreement”) dated as of October 18, 2013. The Credit Agreement provides for a $15 million five-year revolving credit facility (the “Revolver”) and a $50 million five-year term loan (the “Term Loan” and together with the Revolver, the “Senior Credit Facilities”).

 

Borrowings under the Senior Credit Facilities will bear interest at the Base Rate (as defined in the Credit Agreement) plus a margin of 0.25% to 2.00% or the Eurocurrency Rate (as defined in the Credit Agreement) plus a margin of 1.25% to 3.00%, in each case depending on Allied Motion’s ratio of total funded indebtedness (as defined in the Credit Agreement) to Consolidated EBITDA (the “Total Leverage Ratio”). The Senior Credit Facility initially bears interest at 4.75% at October 18, 2013. Subsequently, the interest rates changed to a floating rate based on both the Prime and Libor rates and a hedged fixed rate on a portion of the term debt as more fully described under item “L” in Footnote 3 “Unaudited Pro Forma Adjustments”.  In addition, Allied Motion is required to pay a commitment fee of between 0.125% and 0.30% quarterly (currently 0.25%) on the unused portion of the Revolver, also based on Allied Motion’s Total Leverage Ratio. Principal installments are payable on the Term Loan in varying percentages quarterly through September 30, 2018 with a balloon payment at maturity and with mandatory prepayments being required in certain circumstances. The Senior Credit Facilities are secured by substantially all of Allied Motion’s assets and are fully and unconditionally guaranteed by certain of the Allied Motion’s subsidiaries.