exv10w1



 







Exhibit 10.1




AMENDMENT

TO

LOAN AND SECURITY AGREEMENT




     THIS AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into this 25th day
of July, 2006, effective July 6, 2006, by and between Silicon Valley Bank (“Bank”) and Advanced
Energy Industries, Inc., a Delaware corporation (“Borrower”) whose address is 1625 Sharp Point
Drive, Fort Collins, CO 80525.



Recitals




     A. Bank and Borrower have entered into that certain Loan and Security Agreement dated as of
May 10, 2002, as amended (as the same may from time to time be further amended, modified,
supplemented or restated, the “Loan Agreement”).



     B. Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.



     C. Borrower has requested that Bank amend the Loan Agreement to (i) decrease the amount
available to be borrowed under the Committed Revolving Line, (ii) extend the maturity date, (iii)
release the Collateral so that the Revolving Line will be unsecured, and (iv) make certain other
revisions to the Loan Agreement as more fully set forth herein.



     D. Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the
extent, in accordance with the terms, subject to the conditions and in reliance upon the
representations and warranties set forth below.



Agreement




     Now, Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to
be legally bound, the parties hereto agree as follows:



     1. Definitions. Capitalized terms used but not defined in this Amendment shall have the
meanings given to them in the Loan Agreement.



     2. Amendments to Loan Agreement.




          2.1 Section 2.5 (Fees). Subsection (b) of Section 2.5 is amended in its entirety and replaced
with the following:





     (b) Non-usage Fee. No later than the 15th calendar day following the end of
each calendar quarter, Borrower shall pay to Bank a non-usage fee equal to
One-Fourth of One Percent (0.25%) per annum of the difference between the
Committed Revolving Line and the average daily outstanding balance during the
prior calendar quarter.



 









 





          2.2 Article 4. (Creation of Security Interest) and Section 5.2 (Collateral). Article 4 shall
be deleted and the term “Reserved” will be inserted in lieu thereof following the numeral “4” and
Section 5.2 shall be deleted and the term “Reserved” will be inserted in lieu thereof following the
numeral “5.2” and all references to “Collateral” shall be deleted so that the Loan Agreement is
understood to provide for an unsecured Revolving Line.




          2.3 Section 6.7 (Financial Covenants). Section 6.7 entitled “Financial Covenants” is amended
to read as follows:





Borrower will maintain on a consolidated basis as of the last day of each fiscal
quarter of Borrower unless otherwise noted:




(i) Quick Ratio. A ratio of Quick Assets to Current Liabilities of at least 2.00
to 1.0; and, for purposes hereof, the current portion of convertible subordinated
notes shall be subtracted from Current Liabilities.




(ii) Tangible Net Worth. A Tangible Net Worth plus Subordinated Debt of at least
the sum of $180,000,000 plus 50% of the net profit for such quarter; on a
cumulative basis commencing with the fiscal quarter ending June 30, 2006.



          2.4 Section 13 (Definitions). The following terms and their respective definitions set forth
in Section 13.1 are amended to change the definitions of the following terms to read as shown:





“Committed Revolving Line” is a Credit Extension of up to $25,000,000.




“Permitted Acquisition” is (i) any Cash Acquisition in which the aggregate
consideration paid, directly or indirectly, by the Borrower does not exceed the
lesser of 50% of Borrower’s Tangible Net Worth or 75% of Borrower’s aggregate cash
and marketable securities immediately prior to such Cash Acquisition, or (ii) any
Stock Acquisition that does not result in a change in ownership of more than 25% of
the aggregate voting control of the Borrower outstanding immediately prior to such
Stock Acquisition and the consideration paid, directly or indirectly, will not in
the aggregate exceed 50% of Borrower’s Tangible Net Worth, or (iii) any transaction
consisting in part of a Stock Acquisition and in part of a Cash Acquisition,
provided that each such portion does not exceed a pro rata portion of the
applicable threshold set forth in the preceding clauses (i) and (ii) as is equal to
the percentage of the aggregate consideration paid in such transaction.



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Subpart (g) of the definition of “Permitted Indebtedness” is amended to read as
follows:




(g) Indebtedness of AE-Japan up to an aggregate principal
amount of $5,000,000.




“Revolving Maturity Date” is July 5, 2007.



          2.5 Exhibits. Exhibit D attached hereto shall be substituted for that attached to the Loan
Agreement.




     3. Limitation of Amendments.



          3.1 The amendments set forth in Section 2, above, are effective for the purposes set forth
herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any
amendment, waiver or modification of any other term or condition of any Loan Document, or (b)
otherwise prejudice any right or remedy which Bank may now have or may have in the future under or
in connection with any Loan Document.




          3.2 This Amendment shall be construed in connection with and as part of the Loan Documents and
all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan
Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full
force and effect.




     4. Representations and Warranties. To induce Bank to enter into this Amendment, Borrower
hereby represents and warrants to Bank as follows:



          4.1 Immediately after giving effect to this Amendment (a) the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;




          4.2 Borrower has the power and authority to execute and deliver this Amendment and to perform
its obligations under the Loan Agreement, as amended by this Amendment;




          4.3 The organizational documents of Borrower delivered to Bank on the Closing Date remain
true, accurate and complete and have not been amended, supplemented or restated and are and
continue to be in full force and effect;




          4.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, have been duly
authorized;




          4.5 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not
contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or
other governmental or public body or
authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of
Borrower;




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          4.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, do not require any
order, consent, approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Borrower, except as already has been obtained or made; and




          4.7 This Amendment has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to or affecting
creditors’ rights.




     5. Counterparts. This Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same instrument.



     6. Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and
delivery to Bank of this Amendment by each party hereto, (b) Borrower’s payment of a fee in an
amount equal to $7,500.00, and (c) Borrower’s payment to Bank of any billed but unpaid fees or
expenses owing to Bank..



     7. Governing Law. This Amendment and the rights and obligations of the parties hereto shall
be governed by and construed in accordance with the laws of the State of Colorado.



     8. Miscellaneous. All of the provisions in Sections 10, 11 and 12 of the Loan Agreement which
are not already included in this Amendment are incorporated in this Amendment by this reference as
if fully set forth herein, except that the references in the Loan Agreement to the term “this
Agreement” and words of similar import shall mean this Amendment.



     In Witness Whereof, the parties hereto have caused this Amendment to be duly executed
and delivered as of the date first written above.



	 	 	 	 	 	 	 	 	 
	BANK	 	 	 	BORROWER
	 
	 	 	 	 	 	 	 	 
	Silicon Valley Bank	 	 	 	Advanced Energy Industries, Inc.
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Cindy Schatz
	 	 
	 	By:
	 	/s/ D. Brent Wilson
	 

	 	 
	 	 	 	 	 	 
	Name: Cindy Schatz	 	 	 	Name: D. Brent Wilson
	Title: Relationship Manager	 	 	 	Title: Director Tax & Treasury







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