EXHIBIT 10.1

 

SIXTH LOAN MODIFICATION AGREEMENT

 

This Sixth Loan Modification Agreement (this “Loan Modification Agreement”) is
entered into as of the Sixth 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 SATCON TECHNOLOGY
CORPORATION, a Delaware corporation (“Satcon”); SATCON POWER SYSTEMS, INC., a
Delaware corporation (“Power”); SATCON ELECTRONICS, INC., a Delaware corporation
(“Electronics”), each with offices located at 27 Drydock Avenue, Boston,
Massachusetts 02210; and SATCON POWER SYSTEMS CANADA LTD., a corporation
organized under the laws of the Province of Ontario, Canada with offices located
at 835 Harrington Court, Burlington, Ontario L7N 3P3 (the “Canadian Borrower”;
and together with Satcon, Power and Electronics, individually and collectively,
jointly and severally, the “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, as further
amended by that certain Second Loan Modification Agreement, dated as of the
Second Loan Modification Effective Date, as further amended by that certain
Third Loan Modification Agreement, dated as of the Third Loan Modification
Effective Date, as further amended by that certain Waiver and Fourth Loan
Modification Agreement, dated as of the Fourth Loan Modification Effective Date,
and as further amended by that certain Fifth Loan Modification Agreement, dated
as of the Fifth 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.

 

2.             DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is
secured by the Collateral as described in the Loan Agreement and in a certain
Intellectual Property Security Agreement dated as of February 20, 2008, as may
be amended from time to time (the “IP Agreement”).

 

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 2.1.5 thereof:

 

“2.1.5     Term Loans.

 

(a)           Availability.  Subject to the terms and conditions of this
Agreement, Bank agrees to make (i) one (1) Tranche A Term Loan (the “Tranche A
Term Loan”) in an amount up to the Tranche A Term Loan Amount and (ii) one
(1) Tranche B Term Loan (the “Tranche B Term Loan”) in an amount up to the
Tranche B Term Loan Amount.

 

(i)  Tranche A Term Loan.  The Tranche A Term Loan will be available only during
the Tranche A Term Loan Availability Period.

 

1

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

 

(ii)  Tranche B Term Loan.  The Tranche B Term Loan will be available only
during the Tranche B Term Loan Availability Period.

 

(b)           Repayment.  Borrower shall repay each Term Loan in (i) thirty-six
(36) equal installments of principal, plus (ii) monthly payments of accrued
interest (the “Term Loan Payment”).  Beginning on the last day of the month
following the month in which the Funding Date occurs, each Term Loan Payment
shall be payable on the last day of each month.  Borrower’s final Term Loan
Payment, due on the respective Tranche A Term Loan Maturity Date or Tranche B
Term Loan Maturity Date, shall include all outstanding principal and accrued and
unpaid interest under the applicable Term Loan.  Once repaid, no Term Loan may
be reborrowed.

 

(c)           Prepayment.  Term Loans may be prepaid, in whole or in part prior
to the respective Term Loan Maturity Date by Borrower, effective three
(3) Business Days after written notice of such prepayment is given to Bank. 
Notwithstanding any such prepayment, Bank’s lien and security interest in the
Collateral shall continue until Borrower fully satisfies its Obligations.  If
such prepayment is at Borrower’s election or at Bank’s election due to the
occurrence and continuance of an Event of Default, Borrower shall pay to Bank,
in addition to the payment of any other expenses or fees then-owing, a
termination fee in an amount equal to (i) if such prepayment occurs after the
Funding Date of any Term Loan but prior to the day that is 365 days after the
Funding Date of such Term Loan (the “Applicable Term Loan First Anniversary”),
one percent (1.00%) of the principal amount of the applicable Term Loan so
prepaid; (ii) if such prepayment occurs after the Applicable Term Loan First
Anniversary but prior to the day that is 365 days from the Applicable Term Loan
First Anniversary (the “Applicable Term Loan Second Anniversary”), one-half of
one percent (0.50%) of the principal amount of the applicable Term Loan so
prepaid; and (iii) if such prepayment occurs after the Applicable Term Loan
Second Anniversary, zero percent (0.00%) of the applicable Term Loan so prepaid;
provided that no termination fee shall be charged if any Term Loan hereunder is
replaced with a new facility from another division of Silicon Valley Bank.  Upon
payment in full of the Obligations and at such time as Bank’s obligation to make
Credit Extensions has terminated, Bank shall terminate and release its liens and
security interests in the Collateral and all rights therein shall revert to
Borrower.”

 

2                                          The Loan Agreement shall be amended
by deleting the following text appearing as Section 2.2 thereof:

 

“2.2        Overadvances.  If at any time or for any reason the total of all
outstanding Advances and all other monetary Obligations exceeds the Availability
Amount (an “Overadvance”), Borrower shall immediately pay the amount of the
excess to Bank, without notice or demand.  Without limiting Borrower’s
obligation to repay to Bank the amount of any Overadvance, Borrower agrees to
pay Bank interest on the outstanding amount of any Overadvance, on demand, at
the Default Rate.”

 

and inserting in lieu thereof the following:

 

“2.2        Overadvances.  If, at any time, the sum of (a) the outstanding
principal amount of any Advances (including any amounts designated as used for
Cash Management Services and/or the Non-formula Sublimit); plus (b) the face
amount of any outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit and any Letter of Credit Reserve); plus (c) the FX Reserve
exceeds the lesser of either (i) the Revolving Line or (ii) the Borrowing Base
plus, without duplication, the Non-formula Sublimit, if any (such excess amount
being an “Overadvance”), Borrower shall immediately pay to Bank in cash such
Overadvance.  Without limiting Borrower’s obligation to repay Bank

 

2

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

 

any amount of the Overadvance, Borrower agrees to pay Bank interest on the
outstanding amount of any Overadvance, on demand, at the Default Rate.”

 

3                                          The Loan Agreement shall be amended
by deleting the following text appearing as Section 2.3(a) thereof:

 

“(a)         (i)            Advances.  Subject to Section 2.3(b), the principal
amount outstanding under the Revolving Line shall accrue interest at a floating
per annum rate equal to the Prime Rate plus one percent (1.00%), which interest
shall be payable monthly, in arrears, in accordance with Section 2.3(g) below.”

 

(ii)           Term Loan.  Subject to Section 2.3(b), the principal amount
outstanding under any Term Loan shall accrue interest at a floating per annum
rate equal to the Prime Rate plus two and one-half percent (2.50%), which
interest shall be payable monthly, in arrears, in accordance with
Section 2.3(g) below.”

 

and inserting the following in lieu thereof:

 

“(a)         (i)            Advances.  Subject to Section 2.3(b), the principal
amount outstanding under the Revolving Line (other than the Non-formula
Sublimit) shall accrue interest at a floating per annum rate equal to the Prime
Rate plus one percent (1.00%), which interest shall be payable monthly, in
arrears, in accordance with Section 2.3(g) below; provided, however, commencing
on July 1, 2010, provided no Default or Event of Default has occurred or would
occur as a result of notice and/or the passage of time, subject to
Section 2.3(b), the principal amount outstanding under the Revolving Line (other
than under the Non-formula Sublimit) shall accrue interest at a floating per
annum rate equal to the Prime Rate plus one-half of one percent (0.50%), which
interest shall be payable monthly, in arrears, in accordance with
Section 2.3(g) below.

 

(ii)           Non-formula Sublimit. Subject to Section 2.3(b), the principal
amount of Advances outstanding under the Non-formula Sublimit shall accrue
interest at a fixed per annum rate equal to eight percent (8.00%), which
interest shall be payable monthly, in arrears, in accordance with
Section 2.3(g) below; provided, however, commencing on July 1, 2010, provided no
Default or Event of Default has occurred or would occur as a result of notice
and/or the passage of time, subject to Section 2.3(b), the principal amount of
Advances outstanding under the Non-formula Sublimit shall accrue interest at a
fixed per annum rate equal to six and one-half of one percent (6.50%), which
interest shall be payable monthly, in arrears, in accordance with
Section 2.3(g) below.”

 

4                                          The Loan Agreement shall be amended
by deleting the following text appearing as Section 2.4(c) thereof:

 

“(c)         Termination Fee.  Subject to the terms of Section 2.1.5(c) with
respect to Term Loans and Section 4.1 with respect to Advances, a termination
fee;”

 

and inserting the following in lieu thereof:

 

“(c)         Termination Fee.  Subject to the terms of Section 4.1, a
termination fee;”

 

5                                          The Loan Agreement shall be amended
by deleting the following text appearing as Section 2.4(d) thereof:

 

3

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

 

“(d)         Unused Revolving Line Facility Fee.  A fee (the “Unused Revolving
Line Facility Fee”), which fee shall be paid monthly, in arrears, on the last
day of each month, in an amount equal to one-half percent (0.50%) per annum of
the average unused portion of the Revolving Line, as determined by Bank. 
Borrower shall not be entitled to any credit, rebate or repayment of any Unused
Revolving Line Facility Fee previously earned by Bank pursuant to this
Section notwithstanding any termination of the within Agreement, or suspension
or termination of Bank’s obligation to make loans and advances hereunder;”

 

and inserting in lieu thereof the following:

 

“(d)         Unused Revolving Line Facility Fee.  A fee (the “Unused Revolving
Line Facility Fee”), which fee shall be paid monthly, in arrears, on the last
day of each month, in an amount equal to five-eighths of one-percent (0.625%)
per annum of the average unused portion of the Revolving Line, as determined by
Bank.  Borrower shall not be entitled to any credit, rebate or repayment of any
Unused Revolving Line Facility Fee previously earned by Bank pursuant to this
Section notwithstanding any termination of the within Agreement, or suspension
or termination of Bank’s obligation to make loans and advances hereunder;”

 

6                                          The Loan Agreement shall be amended
by deleting the following Section 2.4(g) thereof:

 

“(g)         Term Loan Fee. (i) on the Funding Date of the Tranche A Term Loan,
a fee equal to three-eighths of one percent (0.375%) of the Tranche A Term Loan;
and (ii) on the Funding Date of the Tranche B Term Loan, a fee equal to
three-eighths of one percent (0.375%) of the Tranche B Term Loan.”

 

7                                          The Loan Agreement shall be amended
by deleting the following text appearing as Section 3.4(b) thereof:

 

“(b)         Term Loan.  Subject to the prior satisfaction of all other
applicable conditions to the making of any Term Loan set forth in this
Agreement, to obtain a Term Loan, Borrower shall notify Bank (which notice shall
be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon,
Eastern time on the Funding Date of the applicable Term Loan.  Together with
such notification, Borrower must promptly deliver to Bank by electronic mail or
facsimile a completed Payment/Advance Form executed by a Responsible Officer or
his or her designee.  Bank shall credit the Term Loan to the Designated Deposit
Account.  Bank may make Term Loans under this Agreement based on instructions
from a Responsible Officer or his or her designee or without instructions if the
Term Loan or Term Loans are necessary to meet Obligations which have become
due.  Bank may rely on any telephone notice given by a person whom Bank believes
is a Responsible Officer or designee.”

 

8                                          The Loan Agreement shall be amended
by deleting the following text appearing as Section 6.9(a) thereof:

 

“(a)         Liquidity.  Borrower’s (A) unrestricted cash on deposit at Bank
plus (B) the difference between (i) gross Borrowing Base availability (as
determined by Bank from Borrower’s most recent Borrowing Base Certificate) minus
(ii) all outstanding Obligations owed by Borrower to Bank, of at least
$4,000,000.”

 

and inserting in lieu thereof the following:

 

4

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

 

“(a)         Liquidity.  (I) From the Sixth Loan Modification Effective Date
through and including June 29, 2010, Borrower shall maintain (A) unrestricted
cash on deposit at Bank plus (B) the difference between (i) gross Borrowing Base
availability (as determined by Bank from Borrower’s most recent Borrowing Base
Certificate, but in any event excluding any availability under the Non-formula
Sublimit) minus (ii) all outstanding Obligations owed by Borrower to Bank
(excluding outstanding Advances under the Non-formula Sublimit), of at least
$4,000,000; and (II) From June 30, 2010 and at all times thereafter, Borrower
shall maintain (A) unrestricted cash on deposit at Bank plus (B) the difference
between (i) gross Borrowing Base availability (as determined by Bank from
Borrower’s most recent Borrowing Base Certificate, but in any event excluding
any availability under the Non-formula Sublimit) minus (ii) all outstanding
Obligations owed by Borrower to Bank (excluding outstanding Advances under the
Non-formula Sublimit), of at least $14,000,000.”

 

9                                          The Loan Agreement shall be amended
by deleting the following clause (g) from the definition of “Eligible Accounts”
in Section 13.1 thereof, entitled “Definitions”:

 

“(g)         Accounts owing from an Account Debtor which does not have its
principal place of business in the United States or Canada except for Eligible
Foreign Accounts;”

 

and inserting in lieu thereof the following:

 

“(g)         Accounts owing from an Account Debtor which does not have its
principal place of business in the United States or Canada except for,
commencing July 1, 2010 and thereafter, Eligible Foreign Accounts;”

 

10                                    The Loan Agreement shall be amended by
deleting the following definitions appearing in Section 13.1 thereof, entitled
“Definitions”:

 

“              “Availability Amount” is (a) the lesser of (i) the Revolving Line
minus 100% of the outstanding principal balance of and accrued but unpaid
interest on the Term Loans or (ii) the Borrowing Base, minus (b) the amount of
all outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit plus an amount equal to the Letter of Credit Reserves), minus (c) the FX
Reserve, and minus (d) the outstanding principal balance of any Advances
(including any amounts used for Cash Management Services).

 

“Borrowing Base” is 80% of Eligible Accounts, as determined by Bank from
Borrower’s most recent Borrowing Base Certificate minus 100% of the outstanding
principal balance of and accrued but unpaid interest on the Term Loans,
provided, however, that Bank may decrease the foregoing advance rate percentage
in its good faith business judgment based on events, conditions, contingencies,
or risks which, as determined by Bank, may adversely affect Collateral.

 

“Credit Extension” is any Advance, Letter of Credit, FX Forward Contract, amount
utilized for Cash Management Services, Term Loan, or any other extension of
credit by Bank for Borrower’s benefit.

 

“Eligible Foreign Accounts” are Accounts for which the Account Debtor does not
have its principal place of business in the United States but are otherwise
Eligible Accounts that are (a) covered by credit insurance satisfactory to Bank
in its good faith business judgment, less any deductible; (b) supported by
letter(s) of credit acceptable to Bank in its good faith business judgment; or
(c) that Bank approves in writing.”

 

5

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

 

and inserting in lieu thereof the following:

 

“              “Availability Amount” is (a) the lesser of (i) the Revolving Line
or (ii) the sum of (X) the Borrowing Base plus (Y) the Non-formula Sublimit
minus (b) the amount of all outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit plus an amount equal to the Letter of Credit
Reserves), minus (c) the FX Reserve, and minus (d) the outstanding principal
balance of any Advances (including any amounts used for Cash Management Services
and/or the Non-formula Sublimit).

 

“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.

 

“Credit Extension” is any Advance (including, without limitation, any Advance
under the Non-formula Sublimit), Letter of Credit, FX Forward Contract, amount
utilized for Cash Management Services, or any other extension of credit by Bank
for Borrower’s benefit.”

 

“Eligible Foreign Accounts” are Accounts for which the Account Debtor does not
have its principal place of business in the United States but are otherwise
Eligible Accounts that are, on a case-by-case basis, acceptable to Bank in its
sole reasonable discretion.”

 

11                                    The Loan Agreement shall be amended by
inserting the following definitions in the appropriate alphabetical order in
Section 13.1 thereof:

 

“              “Non-formula Sublimit” is an Advance or Advances under the
Revolving Line made after the Sixth Loan Modification Effective Date of up to
Five Million Dollars ($5,000,000); provided, however, the Non-formula Sublimit
shall be reduced to Two Million Five Hundred Thousand Dollars ($2,500,000)
effective on July 1, 2010, and Non-formula Sublimit Advances in excess of such
amount will be immediately due and payable; provided further, that following the
occurrence of a Default or an Event of Default, the Non-formula Sublimit shall
be reduced to Zero Dollars ($0.00) and Non-formula Sublimit Advances in excess
of such amount will be immediately due and payable.

 

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

 

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

 

12                                    The Loan Agreement shall be amended by
deleting the following definitions from Section 13.1 thereof:

 

“Payment/Advance Form” is that certain form attached as Exhibit B to the Fifth
Loan Modification Agreement.

 

“Tranche A Term Loan” is defined in Section 2.1.5.

 

6

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

 

“Tranche A Term Loan Amount” is an aggregate principal amount up to One Million
Dollars ($1,000,000) plus any accrued but unpaid interest thereon outstanding at
any time.

 

“Tranche A Term Loan Availability Period” means the period commencing on the
date that Borrower provides Bank evidence satisfactory to Bank, in its
reasonable discretion, that Borrower has a Tangible Net Worth of not less than
Nine Million Dollars ($9,000,000) for the quarterly period ending March 31, 2010
and terminating on the earlier to occur of (x) the occurrence of an Event of
Default and (y) September 30, 2010.

 

“Tranche A Term Loan Maturity Date” is the earlier to occur of (i) the
occurrence of an Event of Default and (ii) the last day of the month that is
thirty-five (35) months from the last day of the month following the month in
which the Funding Date of the Tranche A Term Loan occurs.

 

“Tranche B Term Loan” is defined in Section 2.1.5.

 

“Tranche B Term Loan Amount” is an aggregate principal amount up to One Million
Dollars ($1,000,000) plus any accrued but unpaid interest thereon outstanding at
any time.

 

“Tranche B Term Loan Availability Period” means the period commencing on the
date that Borrower provides Bank evidence satisfactory to Bank, in its
reasonable discretion, that Borrower has a Tangible Net Worth of not less than
Nine Million Dollars ($9,000,000) for the quarterly period ending June 30, 2010
and terminating on the earlier to occur of (i) the occurrence of an Event of
Default and (ii) December 31, 2010.

 

“Tranche B Term Loan Maturity Date” is the earlier to occur of (i) the
occurrence of an Event of Default and (ii) the last day of the month that is
thirty-five (35) months from the last day of the month following the month in
which the Funding Date of the Tranche B Term Loan occurs.

 

“Term Loan” or “Term Loans” means the Tranche A Term Loan and the Tranche B Term
Loan.

 

“Term Loan Maturity Date” means either or both of the Tranche A Term Loan
Maturity Date or the Tranche B Term Loan Maturity Date, as applicable.”

 

13                                    The Compliance Certificate appearing as
Exhibit D to the Loan Agreement is hereby replaced with the Compliance
Certificate attached as Exhibit A hereto.

 

14                                    The Payment/Advance Form appearing as
Exhibit E to the Loan Agreement is hereby deleted in its entirety.

 

4.             CONDITIONS PRECEDENT.  Borrower hereby agrees that the following
documents shall be delivered to the Bank prior to or concurrently with the Sixth
Loan Modification Effective Date, each in form and substance satisfactory to the
Bank (collectively, the “Conditions Precedent”):

 

A.                                   copies, certified by a duly authorized
officer of the Borrower to be true and complete as of the date hereof, of each
of (i) the governing documents of the Borrower as in effect on the date hereof
(unless such governing documents have been previously delivered to Bank and have
not been modified as of the date of such delivery), (ii) the resolutions of the
Borrower authorizing the execution and delivery of this Loan Modification
Agreement, the other documents executed in

 

7

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

 

connection herewith and the Borrower’s performance of all of the transactions
contemplated hereby, and (iii) an incumbency certificate giving the name and
bearing a specimen signature of each individual who shall be so authorized;

 

B.                                     a certificate from the Secretary of State
of the applicable State of organization of a recent date as to the Borrower’s
existence and good standing, together with a certificate of foreign
qualification from each applicable jurisdiction; and

 

C.                                     such other documents and/or instruments
as Bank may request, in its reasonable discretion.

 

5.             FEES.  Borrower shall pay to Bank a modification fee in the
amount of Twenty Five Thousand Dollars ($25,000.00) (the “Modification Fee”),
which Modification 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.  On or before April 21, 2010, Borrower shall pay to Bank a
good faith deposit in the amount of Five Thousand Dollars ($5,000) (the “Good
Faith Deposit”), to be utilized to pay Bank Expenses.  Any portion of the Good
Faith Deposit not utilized to pay Bank Expenses will be applied to the
Modification Fee.

 

6.             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.

 

7.             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 March 10, 2010 between
Borrower and Bank, and acknowledges, confirms and agrees the disclosures
Borrower provided to Bank in the Perfection Certificate, as amended, has not
changed.

 

8.             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.

 

9.             CONSISTENT CHANGES.  The Existing Loan Documents are hereby
amended wherever necessary to reflect the changes described above.

 

10.           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.

 

11.           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.

 

12.           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

 

8

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

 

Documents, unless the party is expressly released by Bank in writing.  No maker
will be released by virtue of this Loan Modification Agreement.

 

13.           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.

 

14.           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.

 

15.           COUNTERSIGNATURE.  This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Bank.

 

9

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

 

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 Sixth Loan Modification Effective Date.

 

 

BORROWER:

 

 

 

SATCON TECHNOLOGY CORPORATION

 

 

 

By

 

/s/ Charles S. Rhoades

 

Name:

   Charles S. Rhoades

 

Title:

  President, Chief Executive Officer

 

 

SATCON POWER SYSTEMS, INC.

 

 

 

By

 

/s/ Charles S. Rhoades

 

Name:

   Charles S. Rhoades

 

Title:

  President, Chief Executive Officer

 

 

SATCON ELECTRONICS, INC.

 

 

 

By

 

/s/ Charles S. Rhoades

 

Name:

   Charles S. Rhoades

 

Title:

  President, Chief Executive Officer

 

 

SATCON POWER SYSTEMS CANADA LTD.

 

 

 

By

 

/s/ Charles S. Rhoades

 

Name:

   Charles S. Rhoades

 

Title:

  President, Chief Executive Officer

 

 

BANK:

 

 

 

SILICON VALLEY BANK

 

 

 

By

 

 

 

Name:

   

 

Title:

  

 

 

 

 

 

 

 

Sixth Loan Modification Effective Date: April 22, 2010

 

 

[Satcon –Sixth Loan Modification Agreement Signature Page]

 

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

 

Exhibit A to Sixth Loan Modification Agreement

 

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

Transaction Reports

 

Bi-weekly (monthly, in the event (I)  there are no outstanding Credit Extensions
under the Revolving line for the entire calendar month then ended or
(II) 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.

 

Yes No

 

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

 

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

 

 

Financial Covenant

 

Required

 

Actual

 

Complies

 

 

 

 

 

 

 

Maintain, as indicated:

 

 

 

 

 

 

Minimum Liquidity (at all times, certified monthly)

 

$

4,000,000

*

$

 

 

Yes No

Minimum Tangible Net Worth (quarterly)

 

$

              

*

$

 

 

Yes No

 

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

*From June 30, 2010 and thereafter, $14,000,000.

**See Section 6.9(b)

 

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:

 

 

 

Title:

 

 

Date:

 

 

 

 

 

 

Verified:

 

 

 

AUTHORIZED SIGNER

 

 

 

 

 

Date:

 

 

 

 

 

 

Compliance Status:                  Yes No

 

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

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

Dated:          

 

I.              Liquidity (Section 6.9(a))

 

Required:               (I) From the Sixth Loan Modification Effective Date
through and including June 29, 2010, Borrower shall maintain (A) unrestricted
cash on deposit at Bank plus (B) the difference between (i) gross Borrowing Base
availability (as determined by Bank from Borrower’s most recent Borrowing Base
Certificate, but in any event excluding any availability under the Non-formula
Sublimit) minus (ii) all outstanding Obligations owed by Borrower to Bank
(excluding outstanding Advances under the Non-formula Sublimit), of at least
$4,000,000; and (II) From June 30, 2010 and at all times thereafter, Borrower
shall maintain (A) unrestricted cash on deposit at Bank plus (B) the difference
between (i) gross Borrowing Base availability (as determined by Bank from
Borrower’s most recent Borrowing Base Certificate, but in any event excluding
any availability under the Non-formula Sublimit) minus (ii) all outstanding
Obligations owed by Borrower to Bank (excluding outstanding Advances under the
Non-formula Sublimit), of at least $14,000,000.

 

Actual:

 

A.

 

Unrestricted cash at Bank

 

$

 

 

 

 

 

B.

 

Gross Borrowing Base availability (as determined by Bank from Borrower’s most
recent Borrowing Base Certificate but excluding any availability under the
Non-formula Sublimit)

 

$

 

 

 

 

 

C.

 

All outstanding Obligations owed by Borrower to Bank (excluding outstanding
Advances under the Non-formula Sublimit)

 

$

 

 

 

 

 

D.

 

Net Borrowing Base Availability (line B minus line C)

 

$

 

 

 

 

 

E.

 

Liquidity (line A plus line D)

 

$

 

Is line E equal to or greater than $[                                 ]?

 

 

o        No, not in compliance

o        Yes, in compliance

 

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

 

 

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

 

Required:               Maintain a Tangible Net Worth, tested as of the last day
of each fiscal quarter, of at least the following for the periods listed below:

 

Quarterly Period Ending

 

Minimum Tangible Net Worth

 

March 31, 2010

 

$

7,500,000

 

 

 

 

 

June 30, 2010

 

$

8,000,000

 

 

 

 

 

September 30, 2010, December 31, 2010 and March 31, 2011

 

$

11,000,000

 

 

 

 

 

June 30, 2011, and each quarterly period ending  thereafter

 

$

13,000,000

 

 

The Tangible Net Worth requirements set forth above shall increase by 50% of the
proceeds from issuances of equity and/or the incurrence of Subordinated Debt
after the Fifth 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 the sum of (i) $           plus (ii) 50% of
the proceeds from issuances of equity and/or the incurrence of Subordinated Debt
after the Fifth Loan Modification Effective Date?

 

 

o    No, not in compliance

o    Yes, in compliance

 

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