Exhibit 10.1
AMENDMENT NO. 2 TO MERGER AGREEMENT
     This Amendment No. 2 to Merger Agreement (this “Amendment”) is hereby
entered into as of October 30, 2010 by Advanced Energy Industries, Inc., a
corporation organized under the laws of the State of Delaware (the “Acquiror”),
and Mark Fleischauer, in his capacity as Shareholder Representative, and amends
that certain Agreement and Plan of Merger dated March 24, 2010, as amended on
April 21, 2010 (the “Merger Agreement”), among Acquiror, PV Powered, Inc., a
corporation organized under the laws of the State of Oregon (“PV Powered” or the
“Company”), and Neptune Acquisition Sub, (the “Sub”), an Oregon corporation and
wholly-owned subsidiary of the Acquiror. Capitalized terms used and not
otherwise defined herein have the meanings given to them in the Merger
Agreement.
     WHEREAS, pursuant to the Merger Agreement, the Sub has merged with and into
the Company, with the Company surviving as a wholly owned subsidiary of the
Acquiror;
     WHEREAS, pursuant to the Merger Agreement, the Acquiror is required to pay
Additional Consideration in the amount of up to Forty Million Dollars
($40,000,000) to the Shareholders if PV Powered achieves certain financial goals
during fiscal year 2010 set forth in the Merger Agreement, less the Interim CEO
Payment and any amounts in dispute in accordance with Section 2.3(e) of the
Merger Agreement;
     WHEREAS, through December 31, 2010, PV Powered must be operated on a
“stand-alone basis” in accordance with the 2010 Plan and the operational
limitations and restrictions set forth in the Operating Guidelines; and
     WHEREAS, the Acquiror desires to realize certain benefits from the
integration of the operations of PV Powered with the operations of the Company
prior to December 31, 2010, and desires to terminate the Earn-Out Period as of
the date set forth in section 1 below and, in consideration therefor, Acquiror
and the Shareholder Representative have agreed to the payment of $39,600,000 in
Additional Consideration pursuant to the terms and conditions of this Amendment.
     NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby, the Parties agree as
follows:

1.   Additional Consideration. On the basis of the Commercial Gross Revenue
recognized by PV Powered from the sale of Commercial Inverter Products during
the first three quarters of fiscal 2010 and the Commercial Gross Margin
associated with such Commercial Gross Revenue reported by PV Powered to the
Acquiror is as set forth on Schedule A attached hereto, the Acquiror agrees
that, notwithstanding anything to the contrary in the Merger Agreement,
effective as of the date the Additional Consideration is paid in full in
accordance with the terms hereof: (a) the Earn-Out Period shall terminate,
(b) the Operating Guidelines shall terminate and be of no further force and
effect (except as set forth in section 4 below), and (c) the Acquiror shall pay
Additional Consideration in cash by wire transfer of same day funds in an amount
equal to $39,600,000, of which (x) $39,204,000 shall be deposited with

1

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

 

    the Exchange Agent, and (y) $396,000 shall be paid to an account designated
by the Shareholder Representative in satisfaction of the Interim CEO Amount in
accordance with the Merger Agreement. Acquiror shall use its reasonable best
efforts to pay the Additional Consideration as set forth herein by November 8,
2010 but no later than November 15, 2010. Any late payments (after November 15,
2010) shall bear interest at the annual rate of 10% plus reasonable costs of
collection including reasonable attorneys’ fees and expenses.

2.   Representations. The Acquiror represents and warrants that the Board of
Directors of the Acquiror has approved the payment of the Additional
Consideration and the execution, delivery and performance of this Amendment. The
Shareholder Representative represents and warrants that he has the authority
under Section 10.14(a) of the Merger Agreement to execute and deliver this
Amendment by and on behalf of the Shareholders.

3.   Certification of Commercial Gross Revenue and Gross Margin. Each of the
Shareholder Representative and the General Manager certifies that (a) the
Company has been operated during the Earn-Out Period materially in accordance
with the 2010 Plan and the Operating Guidelines and (b) the Commercial Gross
Revenue recognized by the Company and the associated Commercial Gross Margin for
the first three quarters of fiscal 2010 are as set forth on Schedule A attached
hereto and are calculated pursuant to and in accordance with Section 2.3 of the
Merger Agreement. Acquiror has been monitoring the operations of PV Powered
pursuant to the terms of the Operating Guidelines, and based on its review of
the Company’s books and records and the reviewed but unaudited financial
statements prepared by the Company since the Closing, and on the representations
of the Shareholder Representative and the General Manager in this Section 3,
Acquiror agrees with the reviewed but unaudited calculation of Commercial Gross
Revenue and Commercial Gross Margin as set forth in Schedule A attached hereto
and, to its Knowledge, such reviewed but unaudited Commercial Gross Revenue and
Commercial Gross Margin from Closing through the 3rd Quarter of 2010 accurately
reflect such books and records and have been properly accounted for, subject to
any ordinary course adjustments required by Acquiror’s year end audit. For the
purposes set forth in this Section 3, the term “Knowledge” with respect to
Acquiror shall also include the successor to Lawrence Firestone. For the
avoidance of doubt, the parties agree that the payment of the Additional
Consideration under this Amendment is not contingent upon any additional
achievement of Commercial Gross Revenue or Commercial Gross Margin beyond the
amounts set forth in Schedule A attached hereto during the remainder of the
Earnout Period. The parties understand and recognize that, as a result of the
termination of the limitations and restrictions set forth in the Operating
Guidelines, the ability of the Company to operate in a manner which would enable
it to achieve Commercial Gross Revenue or Commercial Gross Margin after the date
hereof may be severely compromised and limited.

4.   Release of Further Obligations. The parties agree that, subject to payment
of the Additional Consideration and the Interim CEO Amount as contemplated
herein, from and as of the date hereof, the Acquiror has fully satisfied and
performed its obligations, and is released from any further obligations, under
Section 2.3 of the Merger Agreement and under the Operating Guidelines,
including, without limitation, the obligation to deliver an Earn-Out Statement
pursuant to Section 2.3(d) of the Merger Agreement, and to operate PV Powered on
a “stand-

2

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

 

    alone” basis and to fund the 2010 Plan under Sections 2.3(b) and 2.3(c)
thereof, provided however that items 2 and 3 of the Operating Guidelines shall
not be altered in any way which would adversely impact the Gross Revenues or
Gross Margin calculated as set forth on Schedule A and as set forth on the
Company’s books and records. The parties further agree that, as of the date
hereof, Acquiror represents to the Shareholders that Acquiror has no Knowledge
of (a) any Losses or facts which could reasonably be expected to give rise to
Losses suffered by Acquiror Indemnified Parties; and (b) any material deviations
by the Company of or from the 2010 Plan or the Operating Guidelines or any
material errors in the recognition of or calculation of Gross Revenues or Gross
Margin. The Shareholders Representative represents to the Acquiror that, as of
the date hereof, the Shareholders have no Knowledge of any Losses or facts which
could reasonably be expected to give rise to Losses suffered by Shareholder
Indemnified Parties. For the purposes set forth in this Section 4, the term
“Knowledge” with respect to Acquiror shall also include the successor to
Lawrence Firestone.

5.   Ratification. Subject to the above provisions hereof, the parties to the
Merger Agreement hereby ratify and affirm (a) their respective rights and
obligations under the Merger Agreement and acknowledge that the Merger
Agreement, as amended herein, remains in full force and effect without other
change or modification except as expressly stated to the contrary herein; and
(b) nothing in this Amendment shall be deemed to limit, alter or modify in any
way the rights of (i) the Acquiror to seek indemnification for any Losses under
Article IX of the Merger Agreement or as a waiver of any right thereto,
including, without limitation, with respect to the operation of the Surviving
Company following the Closing through the date the Operating Guidelines are
terminated in a manner which materially deviates from the Operating Guidelines
or (ii) the Shareholders to seek indemnification for any Losses under Article IX
of the Merger Agreement or as a waiver of any right thereto, subject in each
case to the defenses that may be available to the Acquiror or the Shareholders
as a result of the limited representations made by the parties herein.

6.   Counterparts; Facsimile Delivery. This Amendment may be executed in any
number of counterparts, each of which when executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument. This Amendment may be delivered via facsimile.

[SIGNATURE PAGE TO FOLLOW]

3

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

 

     IN WITNESS WHEREOF, Shareholder Representative and Acquiror have executed
this Amendment as of the date first written above.

            Mark Fleischauer, as Shareholder Representative
      By:   /s/ Mark Fleischauer         Name:   Mark Fleischauer       
Title:   Shareholder Representative        Advanced Energy Industries, Inc., as
Acquiror
      By:   /s/ Dr. Hans Betz         Name:   Dr. Hans Betz        Title:  
Chief Executive Officer     

          Solely with respect to the certification contained in Section 3 above
      By:   /s/ Gregg Patterson         Name:   Gregg Patterson        Title:  
General Manager       

4