EXHIBIT 10.1

 

THIRD LOAN MODIFICATION AGREEMENT

 

This Third Loan Modification Agreement (this “Loan Modification Agreement”) is
entered into as of the Third 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 POWER SYSTEMS, INC., a
Delaware corporation; SATCON ELECTRONICS, INC., a Delaware corporation; SATCON
APPLIED TECHNOLOGY, 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”).

 

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 AND THAT
CERTAIN SECOND LOAN MODIFICATION AGREEMENT, DATED AS OF THE SECOND 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 SECTION 2.4(E) IN ITS ENTIRETY:

 

“(e)         Collateral Monitoring Fee.  During each month in which any
Obligations are outstanding under this Agreement, a monthly collateral
monitoring fee of $750, payable in arrears on the last day of each month
(prorated for any partial month) at the beginning and upon termination of this
Agreement; and”

 

and inserting in lieu thereof the following:

 

“(E)         COLLATERAL MONITORING FEE.  DURING EACH MONTH IN WHICH ANY
OBLIGATIONS ARE OUTSTANDING UNDER THIS AGREEMENT, A MONTHLY COLLATERAL
MONITORING FEE OF $750, PAYABLE IN ARREARS ON THE LAST DAY OF EACH MONTH
(PRORATED FOR ANY PARTIAL MONTH) AT THE BEGINNING AND UPON TERMINATION OF THIS
AGREEMENT; PROVIDED, HOWEVER, SUCH FEE SHALL BE WAIVED FOR

 

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ANY MONTH IN WHICH BORROWER’S UNRESTRICTED CASH ON DEPOSIT AT BANK PLUS UNUSED
AVAILABILITY PURSUANT TO THE REVOLVING LINE UNDER THIS AGREEMENT, AS DETERMINED
BY BANK WITH REFERENCE TO THE AVAILABILITY AMOUNT SET FORTH HEREIN, IS GREATER
THAN $10,000,000 AT ALL TIMES DURING SUCH MONTH; AND”

 

2                                          THE LOAN AGREEMENT SHALL BE AMENDED
BY DELETING THE FOLLOWING TEXT APPEARING AS SECTION 6.2(A)(I) IN ITS ENTIRETY:

 

“(i) weekly (monthly, if there are no borrowings under this Agreement or in the
event Borrower maintains or exceeds $12,000,000 in (A) Borrower’s unrestricted
cash on deposit at Bank plus (B) unused availability pursuant to the Revolving
Line under this Agreement, as determined by Bank with reference to the
Availability Amount set forth herein) (twice per month, if there are borrowings
under this Agreement and Borrower maintains between $10,000,000 and $12,000,000
in (A) unrestricted cash on deposit at Bank plus (B) unused availability
pursuant to the Revolving Line under this Agreement, as determined by Bank with
reference to the Availability Amount set forth herein, and upon each request for
a Credit Extension, a Transaction Report;”

 

and inserting in lieu thereof the following:

 

“(i) twice per month as of the 15th day and as of the last day of each month
(monthly, in the event Borrower maintains or exceeds $10,000,000 in
(A) Borrower’s unrestricted cash on deposit at Bank plus (B) unused availability
pursuant to the Revolving Line under this Agreement, as determined by Bank with
reference to the Availability Amount set forth herein), and upon each request
for a Credit Extension, a Transaction Report;”

 

3                                          THE LOAN AGREEMENT SHALL BE AMENDED
BY DELETING THE FOLLOWING SECTION 6.6 ENTITLED “ACCESS TO COLLATERAL; BOOKS AND
RECORDS” IN ITS ENTIRETY:

 

“6.6        ACCESS TO COLLATERAL; BOOKS AND RECORDS.  AT REASONABLE TIMES, ON
ONE (1) BUSINESS DAY’S NOTICE (PROVIDED NO NOTICE IS REQUIRED IF AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING), BANK, OR ITS AGENTS, SHALL HAVE THE
RIGHT TO INSPECT THE COLLATERAL AND THE RIGHT TO AUDIT AND COPY BORROWER’S
BOOKS.  THE FOREGOING INSPECTIONS AND AUDITS SHALL BE (I) CONDUCTED THREE TIMES
PER YEAR OR AS CONDITIONS WARRANT IN BANK’S DISCRETION, AND (II) AT BORROWER’S
EXPENSE, AND THE CHARGE THEREFOR SHALL BE $750 PER PERSON PER DAY (OR SUCH
HIGHER AMOUNT AS SHALL REPRESENT BANK’S THEN-CURRENT STANDARD CHARGE FOR THE
SAME), PLUS REASONABLE OUT-OF-POCKET EXPENSES.  IN THE EVENT BORROWER AND BANK
SCHEDULE AN AUDIT MORE THAN TEN (10) DAYS IN ADVANCE, AND BORROWER CANCELS OR
SEEKS TO RESCHEDULES THE AUDIT WITH LESS THAN TEN (10) DAYS WRITTEN NOTICE TO
BANK, THEN (WITHOUT LIMITING ANY OF BANK’S RIGHTS OR REMEDIES), BORROWER SHALL
PAY BANK A FEE OF $1,000 PLUS ANY OUT-OF-POCKET EXPENSES INCURRED BY BANK TO
COMPENSATE BANK FOR THE ANTICIPATED COSTS AND EXPENSES OF THE CANCELLATION OR
RESCHEDULING.”

 

and inserting in lieu thereof the following:

 

“6.6        ACCESS TO COLLATERAL; BOOKS AND RECORDS.  AT REASONABLE TIMES, ON
ONE (1) BUSINESS DAY’S NOTICE (PROVIDED NO NOTICE IS REQUIRED IF AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING), BANK, OR ITS AGENTS, SHALL HAVE THE
RIGHT TO INSPECT THE COLLATERAL AND THE RIGHT TO AUDIT AND COPY BORROWER’S
BOOKS.  THE FOREGOING INSPECTIONS AND AUDITS SHALL

 

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BE (I) CONDUCTED THREE TIMES PER YEAR OR AS CONDITIONS WARRANT IN BANK’S
DISCRETION, AND (II) AT BORROWER’S EXPENSE, AND THE CHARGE THEREFOR SHALL BE
$850 PER PERSON PER DAY (OR SUCH HIGHER AMOUNT AS SHALL REPRESENT BANK’S
THEN-CURRENT STANDARD CHARGE FOR THE SAME), PLUS REASONABLE OUT-OF-POCKET
EXPENSES.  IN THE EVENT BORROWER AND BANK SCHEDULE AN AUDIT MORE THAN TEN
(10) DAYS IN ADVANCE, AND BORROWER CANCELS OR SEEKS TO RESCHEDULES THE AUDIT
WITH LESS THAN TEN (10) DAYS WRITTEN NOTICE TO BANK, THEN (WITHOUT LIMITING ANY
OF BANK’S RIGHTS OR REMEDIES), BORROWER SHALL PAY BANK A FEE OF $1,000 PLUS ANY
OUT-OF-POCKET EXPENSES INCURRED BY BANK TO COMPENSATE BANK FOR THE ANTICIPATED
COSTS AND EXPENSES OF THE CANCELLATION OR RESCHEDULING.”

 

4                                          THE LOAN AGREEMENT SHALL BE AMENDED
BY DELETING THE FOLLOWING SECTION 6.9 ENTITLED “FINANCIAL COVENANTS” IN ITS
ENTIRETY:

 

“              6.9          FINANCIAL COVENANTS.

 

BORROWER SHALL MAINTAIN AT ALL TIMES, TO BE CERTIFIED BY THE BORROWER AS OF THE
LAST DAY OF EACH MONTH, UNLESS OTHERWISE NOTED, ON A CONSOLIDATED BASIS WITH
RESPECT TO BORROWER AND ITS SUBSIDIARIES:

 

(A)           LIQUIDITY.  BORROWER’S (A) UNRESTRICTED CASH ON DEPOSIT AT BANK
PLUS (B) UNUSED AVAILABILITY PURSUANT TO THE REVOLVING LINE UNDER THIS
AGREEMENT, AS DETERMINED BY BANK WITH REFERENCE TO THE AVAILABILITY AMOUNT SET
FORTH HEREIN, OF AT LEAST $4,000,000.

 

(B)           TANGIBLE NET WORTH.  A TANGIBLE NET WORTH, TESTED AS OF THE LAST
DAY OF EACH FISCAL QUARTER, OF AT LEAST (I) FROM THE SECOND LOAN MODIFICATION
EFFECTIVE DATE THROUGH MARCH 31, 2009, $12,000,000, AND (II) FROM JUNE 30, 2009,
AND AS OF THE END OF EACH FISCAL QUARTER OF BORROWER THEREAFTER, $12,500,000.
THE TANGIBLE NET WORTH REQUIREMENTS SET FORTH HEREIN SHALL INCREASE BY 50% OF
QUARTERLY NET INCOME AND 50% OF ISSUANCES OF EQUITY AFTER THE SECOND LOAN
MODIFICATION EFFECTIVE DATE.”

 

and inserting in lieu thereof the following:

 

“              6.9          FINANCIAL COVENANTS.

 

BORROWER SHALL MAINTAIN AT ALL TIMES, TO BE CERTIFIED BY THE BORROWER AS OF THE
LAST DAY OF EACH MONTH, UNLESS OTHERWISE NOTED, ON A CONSOLIDATED BASIS WITH
RESPECT TO BORROWER AND ITS SUBSIDIARIES:

 

(a)           Liquidity.  Borrower’s (A) unrestricted cash on deposit at Bank
plus (B) unused availability pursuant to the Revolving Line under this
Agreement, as determined by Bank with reference to the Availability Amount set
forth herein, of at least $4,000,000.

 

(b)           Tangible Net Worth.  A Tangible Net Worth, tested as of the last
day of each fiscal quarter, of at least (i) as of the quarter ending
September 30, 2009, $16,000,000, and (ii) as of the quarter ending December 31,
2009 and as of the end of each fiscal quarter of Borrower thereafter,
$15,000,000. The Tangible Net Worth requirements set forth herein shall increase
by 50% of quarterly Net Income and 50% of issuances of equity after the Third
Loan Modification Effective Date.”

 

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

 

“              “BORROWING BASE” IS (A) 80% OF ELIGIBLE ACCOUNTS PLUS (B) THE
LESSER OF 25% OF THE VALUE OF BORROWER’S ELIGIBLE INVENTORY (VALUED AT THE LOWER
OF COST OR WHOLESALE FAIR MARKET VALUE) OR $1,000,000, AS DETERMINED BY BANK
FROM BORROWER’S MOST RECENT BORROWING BASE CERTIFICATE, PROVIDED, HOWEVER, THAT
BANK MAY DECREASE THE FOREGOING PERCENTAGES IN ITS GOOD FAITH BUSINESS JUDGMENT
BASED ON EVENTS, CONDITIONS, CONTINGENCIES, OR RISKS WHICH, AS DETERMINED BY
BANK, MAY ADVERSELY AFFECT COLLATERAL.”

 

“Eligible Inventory” means, at any time, the aggregate of Borrower’s Inventory
that (a) consists of finished goods or raw materials, in good, new, and salable
condition, which are not perishable, returned, consigned, obsolete, not
sellable, damaged, or defective, and is not comprised of demonstrative or custom
inventory, works in progress, packaging or shipping materials, or supplies;
(b) meet all applicable governmental standards; (c) have been manufactured in
compliance with the Fair Labor Standards Act; (d) are not subject to any Liens,
except the first priority Liens granted or in favor of Bank under this Agreement
or any of the other Loan Documents; (e) are located at Borrower’s principal
place of business, any location noted on the Borrower’s Perfection Certificate
delivered in connection herewith (provided Bank has received a landlord’s
waiver, bailee’s waiver or similar agreement in form reasonably satisfactory to
Bank with respect to such location), or any location permitted under
Section 7.2; and (f) are otherwise acceptable to Bank in its good faith business
judgment.

 

“Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not
Bank’s lowest rate.”

 

and inserting in lieu thereof the following:

 

“              “Borrowing Base” is 80% of Eligible Accounts, as determined by
Bank from Borrower’s most recent Borrowing Base Certificate, provided, however,
that Bank may decrease the foregoing percentage in its good faith business
judgment based on events, conditions, contingencies, or risks which, as
determined by Bank, may adversely affect Collateral.

 

“Prime Rate” is the greater of (i) Bank’s most recently announced “prime rate,”
even if it is not Bank’s lowest rate and (ii) four percent (4.00%) per annum.”

 

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

“              “Third Loan Modification Agreement” means that certain Third Loan
Modification Agreement, dated as of the Third Loan Modification Effective Date,
by and between Borrower and Bank.”

 

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

 

4

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6                                          THE COMPLIANCE CERTIFICATE APPEARING
AS EXHIBIT D TO THE LOAN AGREEMENT IS HEREBY REPLACED WITH THE COMPLIANCE
CERTIFICATE ATTACHED AS EXHIBIT D HERETO.

 

4.             FEES.  BORROWER SHALL PAY TO BANK A MODIFICATION FEE IN THE
AMOUNT OF TEN THOUSAND DOLLARS ($10,000.00), 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, 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.

 

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12.           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 Third Loan Modification Effective Date.

 

 

BORROWER:

 

 

 

SATCON TECHNOLOGY CORPORATION

 

 

 

By

/s/ Charles S. Rhoades

 

Name:

Charles S. Rhoades

 

Title:

President and Treasurer

 

 

 

SATCON POWER SYSTEMS, INC.

 

 

 

By

/s/ Charles S. Rhoades

 

Name:

Charles S. Rhoades

 

Title:

President and Treasurer

 

 

 

SATCON APPLIED TECHNOLOGY, INC.

 

 

 

By

/s/ Charles S. Rhoades

 

Name:

Charles S. Rhoades

 

Title:

President and Treasurer

 

 

 

SATCON ELECTRONICS, INC.

 

 

 

By

/s/ Charles S. Rhoades

 

Name:

Charles S. Rhoades

 

Title:

President and Treasurer

 

 

 

 

 

SATCON POWER SYSTEMS CANADA LTD.

 

 

 

By

/s/ Charles S. Rhoades

 

Name:

Charles S. Rhoades

 

Title:

President and Treasurer

 

 

 

BANK:

 

 

 

SILICON VALLEY BANK

 

 

 

By

 

 

Name:

 

 

Title:

 

 

 

 

Third Loan Modification Effective Date: September 30, 2009

 

 

[Satcon –Third Loan Modification Agreement Signature Page]

 

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EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

TO:

 

SILICON VALLEY BANK

Date:

 

FROM:

 

SATCON TECHNOLOGY CORPORATION, et al.

 

 

 

The undersigned authorized officer of Satcon Technology Corporation and its
Subsidiaries (“Borrower”) certifies that under the terms and conditions of the
Loan and Security Agreement between Borrower and Bank (the “Agreement”),
(1) Borrower is in complete compliance for the period ending
                               with all required covenants except as noted
below, (2) there are no Events of Default, (3) all representations and
warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed
all required tax returns and reports, and Borrower has timely paid all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by
Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of
the Agreement, and (5) no Liens have been levied or claims made against Borrower
or any of its Subsidiaries, if any, relating to unpaid employee payroll or
benefits of which Borrower has not previously provided written notification to
Bank.  Attached are the required documents supporting the certification.  The
undersigned certifies that these are prepared in accordance with generally GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.  The undersigned acknowledges that no
borrowings may be requested at any time or date of determination that Borrower
is not in compliance with any of the terms of the Agreement, and that compliance
is determined not just at the date this certificate is delivered.  Capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenant

 

Required

 

Complies

 

 

 

 

 

Monthly financial statements with Compliance Certificate

 

Monthly within 30 days

 

Yes   No

Annual financial statement (CPA Audited) + CC

 

FYE within 120 days

 

Yes   No

10-Q, 10-K and 8-K

 

Within 5 days after filing with SEC

 

Yes   No

A/R & A/P Agings

 

Monthly within 15 days

 

Yes   No

Projections

 

Annually

 

Yes   No

 

]

 

The following Intellectual Property was registered after the Effective Date (if
no registrations, state “None”)

 

 

Financial Covenant

 

Required

 

Actual

 

Complies

 

 

 

 

 

 

 

 

 

Maintain on a Monthly Basis:

 

 

 

 

 

 

 

Minimum Liquidity

 

$

4,000,000

 

$

 

Yes   No

 

Minimum Tangible Net Worth

 

$

 

 

$

 

Yes   No

 

 

 

 

*See Section6.9(b)

 

 

 

 

 

 

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The following financial covenant analyses and information set forth in Schedule
1 attached hereto are true and accurate as of the date of this Certificate.

 

The following are the exceptions with respect to the certification above:  (If
no exceptions exist, state “No exceptions to note.”)

 

 

 

SATCON TECHNOLOGY CORPORATION, et al.

 

BANK USE ONLY

 

 

 

 

 

Received by:

 

By:

 

 

 

AUTHORIZED SIGNER

Name:

 

 

Date:

 

Title:

 

 

 

 

Verified:

 

 

 

AUTHORIZED SIGNER

 

Date:

 

 

 

 

 

Compliance Status:  o Yes   o No

 

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Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

Dated:                                

 

I.              Liquidity (Section 6.9(a))

 

Required:               $4,000,000 (at all times)

 

Actual:

 

A.

 

Unrestricted cash at Bank

 

$

 

 

 

 

 

 

 

B.

 

Availability Amount

 

$

 

 

 

 

 

 

 

C.

 

Liquidity (line A plus line B)

 

$

 

 

Is line C equal to or greater than $4,000,000          ?

 

o

No, not in compliance

o

Yes, in compliance

 

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II.            Tangible Net Worth (Section 6.9(b))

 

Required:               As of the fiscal quarter ending September 30, 2009,
$16,000,000, and (ii) as of the quarter ending December 31, 2009, and as of the
end of each fiscal quarter of Borrower thereafter, $15,000,000.  The Tangible
Net Worth requirements set forth herein shall increase by 50% of quarterly Net
Income and 50% of issuances of equity after the Third Loan Modification
Effective Date.

 

Actual:                   $           

 

A.

 

Aggregate value of total assets of Borrower

 

$

 

 

 

 

 

 

 

B.

 

Deferred Financing Costs

 

$

 

 

 

 

 

 

 

C.

 

Aggregate value of goodwill of Borrower

 

$

 

 

 

 

 

 

 

D.

 

Aggregate value of intangible assets of Borrower

 

$

 

 

 

 

 

 

 

E.

 

Aggregate value of obligations owing to Borrower from officers or other
directors

 

$

 

 

 

 

 

 

 

F.

 

Aggregate value of any reserves not already deducted from assets

 

$

 

 

 

 

 

 

 

G.

 

Total Liabilities

 

$

 

 

 

 

 

 

 

H.

 

Value of Line A plus B minus C minus D minus E minus F minus G

 

$

 

 

Is line H equal to or greater than $          ?

 

o

No, not in compliance

o

Yes, in compliance

 

BOS 46,531,632v2 063230.010000

 

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