ADVANCED ENERGY INDUSTRIES INC
LOAN MODIFICATION AGREEMENT
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<TYPE>EX-10.1
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<FILENAME>d48732exv10w1.htm
<DESCRIPTION>LOAN MODIFICATION AGREEMENT
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<DIV align="right" style="font-size: 10pt; margin-top: 18pt">Exhibit 10.1</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMENDMENT<BR>
TO<BR>
LOAN AND SECURITY AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS AMENDMENT to Loan and Security Agreement (this &#147;Amendment&#148;) is entered into this 2nd day
of August, 2007, effective July&nbsp;5, 2007, by and between Silicon Valley Bank (&#147;Bank&#148;) and Advanced
Energy Industries, Inc., a Delaware corporation (&#147;Borrower&#148;) whose address is 1625 Sharp Point
Drive, Fort Collins, CO 80525.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT style="font-variant: SMALL-CAPS"><B>Recitals</B></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>A.&nbsp;</B>Bank and Borrower have entered into that certain Loan and Security Agreement dated as of
May&nbsp;10, 2002, as amended (as the same may from time to time be further amended, modified,
supplemented or restated, the &#147;Loan Agreement&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>B.&nbsp;</B>Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>C.&nbsp;</B>Borrower has requested that Bank amend the Loan Agreement to (i)&nbsp;extend the maturity date,
and (ii)&nbsp;make certain other revisions to the Loan Agreement as more fully set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>D.&nbsp;</B>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.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT style="font-variant: SMALL-CAPS"><B>Agreement</B></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS"><B>Now, Therefore,</B></FONT> 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:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;Definitions. </B>Capitalized terms used but not defined in this Amendment shall have the
meanings given to them in the Loan Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;Amendments to Loan Agreement.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.1 Section&nbsp;2.1.1 </B>(<B>Revolving Advances</B>). The last sentence of subsection (a)&nbsp;of <B>Section&nbsp;2.1.1</B>
is deleted and replaced with the following:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, the Borrowing Base shall not be applied until
the aggregate amount of Credit Extensions outstanding is equal to or exceeds
$25,000,000 for more than 30 consecutive days.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.2 Section&nbsp;2.1.3 (Cash Management Services Sublimit). </B>The figure &#147;$5,000,000&#148; in the first
sentence of <B>Section&nbsp;2.1.3 </B>is deleted and replaced with the figure &#147;$10,000,000&#148;.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2</B>.<B>3 Section&nbsp;2.1.4 (Letters of Credit Sublimit). </B>The figure &#147;$1,000,000&#148; at the end of the
first sentence of <B>Section&nbsp;2.1.4 </B>is deleted and replaced with the figure &#147;$5,000,000&#148;.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.4 Section&nbsp;6.2 (Financial Statements, Reports, Certificates)</B>. Subsection (b)&nbsp;of <B>Section&nbsp;6.2</B>
is deleted and replaced with the following:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Within 30&nbsp;days after the last day of each month, if the Borrowing Base is
applicable under the last sentence of Section&nbsp;2.1.1(a) or if during such month the
aggregate amount of all Credit Extensions outstanding during such month equals or exceeds
$25,000,000, Borrower will deliver to Bank a Borrowing Base Certificate signed by a
Responsible Officer in the form of <U>Exhibit&nbsp;C</U>, with aged listings of accounts
receivable and accounts payable.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">And the first sentence of subsection (d)&nbsp;of <B>Section&nbsp;6.2 </B>is deleted and replaced with the following:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">At any time that the aggregate amount of outstanding Advances, exclusive of interest
thereon, exceeds $25,000,000 and remains outstanding for 30 consecutive days, Borrower will
allow Bank to conduct an initial audit and thereafter annual audits of Borrower&#146;s assets at
Borrower&#146;s expense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.5 Section&nbsp;13 </B>(<B>Definitions</B>). The following term and its definition set forth in <B>Section&nbsp;13.1</B>
is amended to read as shown:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<B>Revolving Maturity Date</B>&#148; is July&nbsp;4, 2008.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.5 Exhibits. </B>Exhibit&nbsp;D attached hereto shall be substituted for that attached to the Loan
Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;Limitation of Amendments.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.1 </B>The amendments set forth in <B>Section&nbsp;2</B>, above, are effective for the purposes set forth
herein and shall be limited precisely as written and shall not be deemed to (a)&nbsp;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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.2 </B>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.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;Representations and Warranties. </B>To induce Bank to enter into this Amendment, Borrower
hereby represents and warrants to Bank as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.1 </B>Immediately after giving effect to this Amendment (a)&nbsp;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)&nbsp;no Event of Default has occurred and
is continuing;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.2 </B>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;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.3 </B>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;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.4 </B>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;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.5 </B>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)&nbsp;any law or regulation binding on or affecting Borrower, (b)&nbsp;any contractual
restriction with a Person binding on Borrower, (c)&nbsp;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;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.6 </B>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
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.7 </B>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&#146; rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;Counterparts. </B>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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;Effectiveness</B>. This Amendment shall be deemed effective upon (a)&nbsp;the due execution and
delivery to Bank of this Amendment by each party hereto,
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(b)&nbsp;Borrower&#146;s payment of a fee in an amount equal to $7,500.00, and (c)&nbsp;Borrower&#146;s payment to
Bank of any billed but unpaid fees or expenses owing to Bank.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;Governing Law. </B>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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;Miscellaneous. </B>All of the provisions in Sections&nbsp;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 &#147;this
Agreement&#148; and words of similar import shall mean this Amendment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT style="font-variant: SMALL-CAPS"><B>In Witness Whereof, </B></FONT>the parties hereto have caused this Amendment to be duly executed
and delivered as of the date first written above.
</DIV>
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<TR valign="bottom">
    <TD valign="top"><B>BANK</B></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left"><B>BORROWER</B></TD>
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    <TD>&nbsp;</TD>
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    <TD colspan="3" valign="top" align="left">Silicon Valley Bank</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="bottom" align="left" nowrap>Advanced Energy Industries, Inc.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" style="border-bottom: 1px solid #000000">/s/&nbsp;Ryan Incorvaia</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" style="border-bottom: 1px solid #000000">/s/&nbsp;Lawrence D. Firestone</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Ryan Incorvaia&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Name:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Lawrence D. Firestone&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
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</TD>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Deal Team Leader&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>Executive Vice President and Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
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</DIV></TD>
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</TD>
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