Exhibit 10.1

 

WAIVER AND FOURTH LOAN MODIFICATION AGREEMENT

 

This Waiver and Fourth Loan Modification Agreement (this “Loan Modification
Agreement”) is entered into as of the Fourth Loan Modification Effective Date by
and between SILICON VALLEY BANK, a California corporation, with its principal
place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a
loan production office located at One Newton Executive Park, Suite 200, 2221
Washington Street, Newton, Massachusetts 02462 (“Bank”) and (i) SATCON
TECHNOLOGY CORPORATION, a Delaware corporation “Satcon”); SATCON POWER SYSTEMS,
INC., a Delaware corporation; SATCON ELECTRONICS, INC., a Delaware corporation;
each with offices located at 27 Drydock Avenue, Boston, Massachusetts 02210; and
(ii) SATCON POWER SYSTEMS CANADA LTD. (the “Canadian Borrower”), a corporation
organized under the laws of the Province of Ontario, Canada with offices located
at 835 Harrington Court, Burlington, Ontario L7N 3P3 (individually and
collectively, jointly and severally, “Borrower”).

 

Pursuant to a certain Consent and Release Agreement, by and between Borrower and
Bank, dated as of January 11, 2010, Bank consented to the sale of Satcon Applied
Technology, Inc., a Delaware corporation and former co-borrower under the Loan
Agreement (as defined below), as more fully described in that certain Stock
Purchase Agreement, dated as of January 11, 2010, by and between Satcon and RCT
Holdings, Inc., a Maryland corporation.

 

1.             DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. AMONG OTHER
INDEBTEDNESS AND OBLIGATIONS WHICH MAY BE OWING BY BORROWER TO BANK, BORROWER IS
INDEBTED TO BANK PURSUANT TO A LOAN ARRANGEMENT DATED AS OF FEBRUARY 20, 2008,
EVIDENCED BY, AMONG OTHER DOCUMENTS, A CERTAIN LOAN AND SECURITY AGREEMENT DATED
AS OF FEBRUARY 20, 2008, AS AMENDED BY THAT CERTAIN FIRST LOAN MODIFICATION
AGREEMENT, DATED AS OF THE FIRST LOAN MODIFICATION EFFECTIVE DATE, AS FURTHER
AMENDED BY THAT CERTAIN SECOND LOAN MODIFICATION AGREEMENT, DATED AS OF THE
SECOND LOAN MODIFICATION EFFECTIVE DATE, AND AS FURTHER AMENDED BY THAT CERTAIN
THIRD LOAN MODIFICATION AGREEMENT, DATED AS OF THE THIRD LOAN MODIFICATION
EFFECTIVE DATE (AS AMENDED, THE “LOAN AGREEMENT”).  CAPITALIZED TERMS USED BUT
NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE SAME MEANING AS IN THE LOAN
AGREEMENT.

 

DESCRIPTION OF COLLATERAL.  REPAYMENT OF THE OBLIGATIONS IS SECURED BY THE
COLLATERAL AS DESCRIBED IN THE LOAN AGREEMENT AND A CERTAIN INTELLECTUAL
PROPERTY SECURITY AGREEMENT DATED AS OF FEBRUARY 20, 2008, AS MAY BE AMENDED
FROM TIME TO TIME (THE “IP AGREEMENT”).

 

2.             HEREINAFTER, THE LOAN AGREEMENT AND THE IP AGREEMENT, TOGETHER
WITH ALL OTHER DOCUMENTS EXECUTED IN CONNECTION THEREWITH EVIDENCING, SECURING
OR OTHERWISE RELATING TO THE OBLIGATIONS (OTHER THAN THIS LOAN MODIFICATION
AGREEMENT) SHALL BE REFERRED TO AS THE “EXISTING LOAN DOCUMENTS”.

 

3.             DESCRIPTION OF CHANGE IN TERMS.

 

A.                                   MODIFICATIONS TO LOAN AGREEMENT.

 

1                                          THE LOAN AGREEMENT SHALL BE AMENDED
BY DELETING THE FOLLOWING DEFINITIONS APPEARING IN SECTION 13.1 THEREOF,
ENTITLED “DEFINITIONS”:

 

“              “REVOLVING LINE MATURITY DATE” IS FEBRUARY 18, 2010.”

 

and inserting in lieu thereof the following:

 

“              “Revolving Line Maturity Date” is March 19, 2010.”

 

2                                          THE LOAN AGREEMENT SHALL BE AMENDED
BY INSERTING THE FOLLOWING DEFINITIONS IN THE APPROPRIATE ALPHABETICAL ORDER IN
SECTION 13.1 THEREOF, ENTITLED “DEFINITIONS”:

 

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“              “FOURTH LOAN MODIFICATION AGREEMENT” MEANS THAT CERTAIN WAIVER
AND FOURTH LOAN MODIFICATION AGREEMENT, DATED AS OF THE FOURTH LOAN MODIFICATION
EFFECTIVE DATE, BY AND BETWEEN BORROWER AND BANK.”

 

“Fourth Loan Modification Effective Date” is the date noted on the signature
page to the Fourth Loan Modification Agreement.”

 

B.                                     ACKNOWLEDGEMENT OF DEFAULT; WAIVER.

 

1                                          BORROWER HAS INFORMED BANK THAT IT
ANTICIPATES THAT IT WILL FAIL TO COMPLY WITH THE TANGIBLE NET WORTH FINANCIAL
COVENANT SET FORTH IN SECTION 6.9(B) OF THE LOAN AGREEMENT FOR THE QUARTERLY
COMPLIANCE PERIOD ENDED DECEMBER 31, 2010 (THE “ANTICIPATED DEFAULT).

 

2                                          BANK HEREBY WAIVES BORROWER’S
ANTICIPATED DEFAULT UNDER THE LOAN AGREEMENT.  BANK’S WAIVER SHALL ONLY APPLY TO
THE ANTICIPATED DEFAULT DESCRIBED ABOVE, AND ONLY FOR THE SPECIFIC COMPLIANCE
PERIOD DESCRIBED ABOVE.  BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
SPECIFICALLY PROVIDED HEREIN, NOTHING IN THIS SECTION OR ANYWHERE IN THIS LOAN
MODIFICATION AGREEMENT SHALL BE DEEMED OR OTHERWISE CONSTRUED AS A WAIVER BY THE
BANK OF ANY OF ITS RIGHTS AND REMEDIES PURSUANT TO THE EXISTING LOAN DOCUMENTS,
APPLICABLE LAW OR OTHERWISE.

 

4.             FEES.  BORROWER SHALL PAY TO BANK A MODIFICATION FEE IN THE
AMOUNT OF TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500.00), WHICH FEE SHALL BE DUE
AND PAYABLE AND FULLY EARNED AS OF THE DATE HEREOF.  BORROWER SHALL ALSO
REIMBURSE BANK FOR ALL LEGAL FEES AND EXPENSES INCURRED BY BANK IN CONNECTION
WITH THE EXISTING LOAN DOCUMENTS AND THIS AMENDMENT THERETO.

 

5.             RATIFICATION OF INTELLECTUAL PROPERTY SECURITY AGREEMENT.
BORROWER HEREBY RATIFIES, CONFIRMS, AND REAFFIRMS, ALL AND SINGULAR, THE TERMS
AND CONDITIONS OF THE IP AGREEMENT AND ACKNOWLEDGES, CONFIRMS AND AGREES THAT
THE IP AGREEMENT CONTAINS AN ACCURATE AND COMPLETE LISTING OF ALL INTELLECTUAL
PROPERTY.

 

6.             RATIFICATION OF PERFECTION CERTIFICATE.  BORROWER HEREBY
RATIFIES, CONFIRMS AND REAFFIRMS, ALL AND SINGULAR, THE TERMS AND DISCLOSURES
CONTAINED IN A CERTAIN PERFECTION CERTIFICATE DATED AS OF FEBRUARY 20, 2008
BETWEEN BORROWER AND BANK, AND ACKNOWLEDGES, CONFIRMS AND AGREES THE DISCLOSURES
BORROWER PROVIDED TO BANK IN THE PERFECTION CERTIFICATE, AS AMENDED, HAS NOT
CHANGED.

 

7.             AUTHORIZATION TO FILE.  BORROWER HEREBY AUTHORIZES BANK TO FILE
UCC FINANCING STATEMENTS WITHOUT NOTICE TO BORROWER, WITH ALL APPROPRIATE
JURISDICTIONS, AS BANK DEEMS APPROPRIATE, IN ORDER TO FURTHER PERFECT OR PROTECT
BANK’S INTEREST IN THE COLLATERAL, INCLUDING A NOTICE THAT ANY DISPOSITION OF
THE COLLATERAL, BY EITHER THE BORROWER OR ANY OTHER PERSON, SHALL BE DEEMED TO
VIOLATE THE RIGHTS OF THE BANK UNDER THE CODE.

 

8.             CONSISTENT CHANGES.  THE EXISTING LOAN DOCUMENTS ARE HEREBY
AMENDED WHEREVER NECESSARY TO REFLECT THE CHANGES DESCRIBED ABOVE.

 

9.             RATIFICATION OF LOAN DOCUMENTS.  BORROWER HEREBY RATIFIES,
CONFIRMS, AND REAFFIRMS ALL TERMS AND CONDITIONS OF ALL SECURITY OR OTHER
COLLATERAL GRANTED TO THE BANK, AND CONFIRMS THAT THE INDEBTEDNESS SECURED
THEREBY INCLUDES, WITHOUT LIMITATION, THE OBLIGATIONS.

 

10.           NO DEFENSES OF BORROWER.  BORROWER HEREBY ACKNOWLEDGES AND AGREES
THAT, AS OF THE DATE OF THIS LOAN MODIFICATION AGREEMENT, BORROWER HAS NO
OFFSETS, DEFENSES, CLAIMS, OR COUNTERCLAIMS AGAINST BANK WITH RESPECT TO THE
OBLIGATIONS, OR OTHERWISE, AND THAT IF BORROWER NOW HAS, OR EVER DID HAVE, ANY
OFFSETS, DEFENSES,

 

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CLAIMS, OR COUNTERCLAIMS AGAINST BANK, WHETHER KNOWN OR UNKNOWN, AT LAW OR IN
EQUITY, ALL OF THEM ARE HEREBY EXPRESSLY WAIVED AND BORROWER HEREBY RELEASES
BANK FROM ANY LIABILITY THEREUNDER.

 

11.           CONTINUING VALIDITY.  BORROWER UNDERSTANDS AND AGREES THAT IN
MODIFYING THE EXISTING OBLIGATIONS, BANK IS RELYING UPON BORROWER’S
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THE EXISTING LOAN
DOCUMENTS.  EXCEPT AS EXPRESSLY MODIFIED PURSUANT TO THIS LOAN MODIFICATION
AGREEMENT, THE TERMS OF THE EXISTING LOAN DOCUMENTS REMAIN UNCHANGED AND IN FULL
FORCE AND EFFECT.  BANK’S AGREEMENT TO MODIFICATIONS TO THE EXISTING OBLIGATIONS
PURSUANT TO THIS LOAN MODIFICATION AGREEMENT IN NO WAY SHALL OBLIGATE BANK TO
MAKE ANY FUTURE MODIFICATIONS TO THE OBLIGATIONS.  NOTHING IN THIS LOAN
MODIFICATION AGREEMENT SHALL CONSTITUTE A SATISFACTION OF THE OBLIGATIONS.  IT
IS THE INTENTION OF BANK AND BORROWER TO RETAIN AS LIABLE PARTIES ALL MAKERS OF
EXISTING LOAN DOCUMENTS, UNLESS THE PARTY IS EXPRESSLY RELEASED BY BANK IN
WRITING.  NO MAKER WILL BE RELEASED BY VIRTUE OF THIS LOAN MODIFICATION
AGREEMENT.

 

12.           RIGHT OF SET-OFF.  IN CONSIDERATION OF BANK’S AGREEMENT TO ENTER
INTO THIS LOAN MODIFICATION AGREEMENT, BORROWER HEREBY REAFFIRMS AND HEREBY
GRANTS TO BANK, A LIEN, SECURITY INTEREST AND RIGHT OF SET OFF AS SECURITY FOR
ALL OBLIGATIONS TO BANK, WHETHER NOW EXISTING OR HEREAFTER ARISING UPON AND
AGAINST ALL DEPOSITS, CREDITS, COLLATERAL AND PROPERTY, NOW OR HEREAFTER IN THE
POSSESSION, CUSTODY, SAFEKEEPING OR CONTROL OF BANK OR ANY ENTITY UNDER THE
CONTROL OF BANK (INCLUDING A BANK SUBSIDIARY) OR IN TRANSIT TO ANY OF THEM.  AT
ANY TIME AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
WITHOUT DEMAND OR NOTICE, BANK MAY SET OFF THE SAME OR ANY PART THEREOF AND
APPLY THE SAME TO ANY OBLIGATION OF BORROWER, EVEN THOUGH UNMATURED AND
REGARDLESS OF THE ADEQUACY OF ANY OTHER COLLATERAL SECURING THE OBLIGATIONS. 
ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

13.           JURISDICTION/VENUE.  BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN
ANY ACTION, SUIT, OR PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY
REASON OF THIS LOAN MODIFICATION AGREEMENT.  NOTWITHSTANDING THE FOREGOING,  THE
BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY BORROWER
OR ANY OF THEIR PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK
DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO
OTHERWISE ENFORCE THE BANK’S RIGHTS AGAINST THE BORROWER OR ITS PROPERTY.

 

14.           COUNTERSIGNATURE.  THIS LOAN MODIFICATION AGREEMENT SHALL BECOME
EFFECTIVE ONLY WHEN IT SHALL HAVE BEEN EXECUTED BY BORROWER AND BANK.

 

[The remainder of this page is intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Loan Modification
Agreement to be executed as a sealed instrument under the laws of the
Commonwealth of Massachusetts as of the Fourth Loan Modification Effective Date.

 

 

BORROWER:

 

 

 

SATCON TECHNOLOGY CORPORATION

 

 

 

By

/s/ Charles S. Rhoades

 

Name:

Charles S. Rhoades

 

Title:

President and Chief Financial Officer

 

 

 

 

SATCON POWER SYSTEMS, INC.

 

 

 

 

By

/s/ Charles S. Rhoades

 

Name:

Charles S. Rhoades

 

Title:

President and Chief Financial Officer

 

 

 

 

SATCON ELECTRONICS, INC.

 

 

 

 

By

/s/ Charles S. Rhoades

 

Name:

Charles S. Rhoades

 

Title:

President and Chief Financial Officer

 

 

 

 

SATCON POWER SYSTEMS CANADA LTD.

 

 

 

 

By

/s/ Charles S. Rhoades

 

Name:

Charles S. Rhoades

 

Title:

President and Chief Financial Officer

 

 

 

 

BANK:

 

 

 

 

SILICON VALLEY BANK

 

 

 

 

By

/s/ Ryan Ravenscroft

 

Name:

Ryan Ravenscroft

 

Title:

Vice President

 

 

Fourth Loan Modification Effective Date: February 18, 2010

 

[Satcon –Waiver and Fourth Loan Modification Agreement Signature Page]

 

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