Exhibit 10.3

 

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR SATCON TECHNOLOGY CORPORATION SHALL HAVE
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SATCON TECHNOLOGY
CORPORATION THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

WARRANT TO PURCHASE

 

SHARES OF COMMON STOCK

 

OF

 

SATCON TECHNOLOGY CORPORATION

 

 

Expires October 31, 2008

 

No.: W-B-03-    

 

Number of Shares:                     

Date of Issuance: October 31, 2003

 

 

 

 

FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, SatCon Technology Corporation, a Delaware corporation (together
with its successors and assigns, the “Issuer”), hereby certifies that
                                                        or its registered
assigns is entitled to subscribe for and purchase, during the Term (as
hereinafter defined), up to
                                                                    
(                        ) shares (subject to adjustment as hereinafter
provided) of the duly authorized, validly issued, fully paid and non-assessable
Common Stock of the Issuer, at an exercise price per share equal to the Warrant
Price then in effect, subject, however, to the provisions and upon the terms and
conditions hereinafter set forth.  Capitalized terms used in this Warrant and
not otherwise defined herein shall have the respective meanings specified in
Section 8 hereof.

 

1.                                       Term.  The term of this Warrant shall
commence on October 31, 2003 and shall expire at 5:00 p.m., eastern time, on
October 31, 2008 (such period being the “Term”).

 

2.                                       Method of Exercise Payment; Issuance of
New Warrant; Transfer and Exchange.

 

(a)                                  Time of Exercise.  The purchase rights
represented by this Warrant may be exercised in whole or in part during the Term
commencing on April 30, 2004 and expiring on October 31, 2008.

 

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(b)                                 Method of Exercise.  The Holder hereof may
exercise this Warrant, in whole or in part, by the surrender of this Warrant
(with the exercise form attached hereto duly executed) at the principal office
of the Issuer, and by the payment to the Issuer of an amount of consideration
therefor equal to the Warrant Price in effect on the date of such exercise
multiplied by the number of shares of Warrant Stock with respect to which this
Warrant is then being exercised, payable at such Holder’s election (i) by
certified or official bank check or by wire transfer to an account designated by
the Issuer, (ii) commencing one (1) year following the Original Issue Date, by
“cashless exercise” in accordance with the provisions of subsection (c) of this
Section 2, but only when a registration statement under the Securities Act
providing for the resale of the Warrant Stock is not then in effect, or (iii) by
a combination of the foregoing methods of payment selected by the Holder of this
Warrant.

 

(c)                                  Cashless Exercise.  Notwithstanding any
provisions herein to the contrary and commencing one (1) year following the
Original Issue Date, if (i) the Per Share Market Value of one share of Common
Stock is greater than the Warrant Price (at the date of calculation as set forth
below) and (ii) a registration statement under the Securities Act providing for
the resale of the Warrant Stock is not then in effect, in lieu of exercising
this Warrant by payment of cash, the Holder may exercise this Warrant by a
cashless exercise and shall receive the number of shares of Common Stock equal
to an amount (as determined below) by surrender of this Warrant at the principal
office of the Issuer together with the properly endorsed Notice of Exercise in
which event the Issuer shall issue to the Holder a number of shares of Common
Stock computed using the following formula:

 

X = Y - (A)(Y)

B

 

Where                                                            X
=                             the number of shares of Common Stock to be issued
to the Holder.

 

Y =                              the number of shares of Common Stock
purchasable upon exercise of all of the Warrant or, if only a portion of the
Warrant is being exercised, the portion of the Warrant being exercised.

 

A =                            the Warrant Price.

 

B =                              the Per Share Market Value of one share of
Common Stock.

 

(d)                                 Issuance of Stock Certificates.  In the
event of any exercise of the rights represented by this Warrant in accordance
with and subject to the terms and conditions hereof, (i) certificates for the
shares of Warrant Stock so purchased shall be dated the date of such exercise
and delivered to the Holder hereof within a reasonable time, not exceeding three
(3) Trading Days after such exercise or, at the request of the Holder (provided
that a registration statement under the Securities Act providing for the resale
of the Warrant Stock is then in effect), issued and delivered to the Depository
Trust Company (“DTC”) account on the Holder’s behalf via the Deposit Withdrawal
Agent Commission System (“DWAC”) within a reasonable time, not exceeding three
(3) Trading Days after such exercise, and the Holder hereof shall be deemed for
all purposes to be the holder of the shares of Warrant Stock so purchased as of
the date of such exercise and (ii) unless this

 

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Warrant has expired, a new Warrant representing the number of shares of Warrant
Stock, if any, with respect to which this Warrant shall not then have been
exercised (less any amount thereof which shall have been canceled in payment or
partial payment of the Warrant Price as hereinabove provided) shall also be
issued to the Holder hereof at the Issuer’s expense within such time. 
Notwithstanding the foregoing to the contrary, the Issuer or its designated
transfer agent shall only be required to issue and deliver the shares to the DTC
on a Holder’s behalf via DWAC if such exercise is in connection with a sale and
all requirements to effect such DWAC have been met, including, but not limited
to, the prospectus delivery requirements.  If the Issuer or its designated
transfer agent cannot issue the shares to a Holder via DWAC because the
aforementioned conditions are not satisfied, the Issuer shall deliver physical
certificates to the Holder.

 

(e)                                  Transferability of Warrant.  Subject to
Section 2(g), this Warrant may be transferred by a Holder without the consent of
the Issuer.  If transferred pursuant to this paragraph and subject to the
provisions of subsection (g) of this Section 2, this Warrant may be transferred
on the books of the Issuer by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of the Issuer,
properly endorsed (by the Holder executing an assignment in the form attached
hereto) and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer.  This Warrant is exchangeable at the
principal office of the Issuer for Warrants for the purchase of the same
aggregate number of shares of Warrant Stock, each new Warrant to represent the
right to purchase such number of shares of Warrant Stock as the Holder hereof
shall designate at the time of such exchange.  All Warrants issued on transfers
or exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the name of the Holder or the number of shares of
Warrant Stock, as applicable.

 

(f)                                    Continuing Rights of Holder.  The Issuer
will, at the time of or at any time after each exercise of this Warrant, upon
the request of the Holder hereof, acknowledge in writing the extent, if any, of
its continuing obligation to afford to such Holder all rights to which such
Holder shall continue to be entitled after such exercise in accordance with the
terms of this Warrant, provided that if any such Holder shall fail to make any
such request, the failure shall not affect the continuing obligation of the
Issuer to afford such rights to such Holder.

 

(g)                                 Compliance with Securities Laws.

 

(i)                                     The Holder of this Warrant, by
acceptance hereof, acknowledges that this Warrant or the shares of Warrant Stock
to be issued upon exercise hereof are being acquired solely for the Holder’s own
account and not as a nominee for any other party, and for investment, and that
the Holder will not offer, sell or otherwise dispose of this Warrant or any
shares of Warrant Stock to be issued upon exercise hereof except pursuant to an
effective registration statement, or an exemption from registration, under the
Securities Act and any applicable state securities laws.

 

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(ii)                                  Except as provided in paragraph (iii)
below, this Warrant and all certificates representing shares of Warrant Stock
issued upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form:

 

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR SATCON TECHNOLOGY CORPORATION SHALL HAVE
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SATCON TECHNOLOGY
CORPORATION THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

(iii)                               The restrictions imposed by this subsection
(e) upon the transfer of this Warrant or the shares of Warrant Stock to be
purchased upon exercise hereof shall terminate (A) when such securities shall
have been resold pursuant to an effective registration statement under the
Securities Act, (B) upon the Issuer’s receipt of an opinion of counsel, in form
and substance reasonably satisfactory to the Issuer, addressed to the Issuer to
the effect that such restrictions are no longer required to ensure compliance
with the Securities Act and state securities laws or (C) upon the Issuer’s
receipt of other evidence reasonably satisfactory to the Issuer that such
registration and qualification under the Securities Act and state securities
laws are not required.  Whenever such restrictions shall cease and terminate as
to any such securities, the Holder thereof shall be entitled to receive from the
Issuer (or its transfer agent and registrar), without expense (other than
applicable transfer taxes, if any), new Warrants (or, in the case of shares of
Warrant Stock, new stock certificates) of like tenor not bearing the applicable
legend required by paragraph (ii) above relating to the Securities Act and state
securities laws.

 

(h)                                 In no event may the Holder exercise this
Warrant in whole or in part unless the Holder is an “accredited investor” as
defined in Regulation D under the Securities Act.

 

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3.                                       Stock Fully Paid; Reservation and
Listing of Shares; Covenants.

 

(a)                                  Stock Fully Paid.  The Issuer represents,
warrants, covenants and agrees that all shares of Warrant Stock which may be
issued upon the exercise of this Warrant or otherwise hereunder will, when
issued in accordance with the terms of this Warrant, be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
created by or through Issuer.  The Issuer further covenants and agrees that
during the period within which this Warrant may be exercised, the Issuer will at
all times have authorized and reserved for the purpose of the issue upon
exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

 

(b)                                 Reservation.  If any shares of Common Stock
required to be reserved for issuance upon exercise of this Warrant or as
otherwise provided hereunder require registration or qualification with any
governmental authority under any federal or state law before such shares may be
so issued, the Issuer will in good faith use its reasonable best efforts as
expeditiously as possible at its expense to cause such shares to be duly
registered or qualified.  If the Issuer shall list any shares of Common Stock on
any securities exchange or market it will, at its expense, list thereon,
maintain and increase when necessary such listing, of, all shares of Warrant
Stock from time to time issued upon exercise of this Warrant or as otherwise
provided hereunder (provided that such Warrant Stock has been registered
pursuant to a registration statement under the Securities Act then in effect),
and, to the extent permissible under the applicable securities exchange rules,
all unissued shares of Warrant Stock which are at any time issuable hereunder,
so long as any shares of Common Stock shall be so listed.  The Issuer will also
so list on each securities exchange or market, and will maintain such listing
of, any other securities which the Holder of this Warrant shall be entitled to
receive upon the exercise of this Warrant if at the time any securities of the
same class shall be listed on such securities exchange or market by the Issuer.

 

(c)                                  Covenants.  The Issuer shall not by any
action including, without limitation, amending the Certificate of Incorporation
or the by-laws of the Issuer, or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of the Holder hereof against dilution (to the
extent specifically provided herein) or impairment.  Without limiting the
generality of the foregoing, the Issuer will (i) not permit the par value, if
any, of its Common Stock to exceed the then effective Warrant Price, (ii) not
amend or modify any provision of the Certificate of Incorporation or by-laws of
the Issuer in any manner that would adversely affect the rights of the Holders
of the Warrants in their capacity as Holders of the Warrants, (iii) take all
such action as may be reasonably necessary in order that the Issuer may validly
and legally issue fully paid and nonassessable shares of Common Stock, free and
clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (iv) use its reasonable
best efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be reasonably
necessary to enable the Issuer to perform its obligations under this Warrant.

 

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(d)                                 Loss, Theft, Destruction of Warrants.  Upon
receipt of evidence satisfactory to the Issuer of the ownership of and the loss,
theft, destruction or mutilation of any Warrant and, in the case of any such
loss, theft or destruction, upon receipt of indemnity or security satisfactory
to the Issuer or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Issuer will make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
representing the right to purchase the same number of shares of Common Stock.

 

4.                                       Adjustment of Warrant Price and Warrant
Share Number.  The number of shares of Common Stock for which this Warrant is
exercisable, and the price at which such shares may be purchased upon exercise
of this Warrant, shall be subject to adjustment from time to time as set forth
in this Section 4. The Issuer shall give the Holder notice of any event
described below which requires an adjustment pursuant to this Section 4 in
accordance with Section 5.

 

(a)                                  Recapitalization, Reorganization,
Reclassification, Consolidation, Merger or Sale.

 

(i)  In case the Issuer after the Original Issue Date shall do any of the
following (each, a “Triggering Event”): (a) consolidate or merge with or into
another corporation where the holders of outstanding Voting Stock prior to such
merger or consolidation do not own over 50% of the outstanding Voting Stock of
the merged or consolidated entity immediately after such merger or
consolidation, or (b) sell all or substantially all of its properties or assets
to any other Person, or (c) change the Common Stock to the same or different
number of shares of any class or classes of stock, whether by reclassification,
exchange, substitution or otherwise (other than by way of a stock split or
combination of shares or stock dividends or distributions provided for in
Section 4(b) or Section 4(c)), or (d) effect a capital reorganization (other
than by way of a stock split or combination of shares or stock dividends or
distributions provided for in Section 4(b) or Section 4(c)), then, and in the
case of each such Triggering Event, proper provision shall be made so that, upon
the basis and the terms and in the manner provided in this Warrant, the Holder
of this Warrant shall be entitled upon the exercise hereof at any time after the
consummation of such Triggering Event, to the extent this Warrant is not
exercised prior to such Triggering Event, to receive at the Warrant Price in
effect at the time immediately prior to the consummation of such Triggering
Event in lieu of the Common Stock issuable upon such exercise of this Warrant
prior to such Triggering Event, the securities, cash and property to which such
Holder would have been entitled upon the consummation of such Triggering Event
if such Holder had exercised the rights represented by this Warrant immediately
prior thereto, subject to adjustments (subsequent to such corporate action) as
nearly equivalent as possible to the adjustments provided for elsewhere in this
Section 4.  The Issuer will not effect any consolidation, merger or sale or
conveyance unless prior to the consummation thereof, the successor or acquiring
entity (if other than the Issuer) and, if an entity different from the successor
or acquiring entity, the entity whose capital stock or assets the holders of the
Common Stock of the Issuer are entitled to receive as a result of such
consolidation, merger or sale or conveyance assumes by written instrument the
obligations under this Section 4 and the obligations to deliver to the holder of
this Warrant

 

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such shares of stock, securities or assets as, in accordance with the foregoing
provisions, the holder may be entitled to acquire.

 

(ii)                                  Notwithstanding anything contained in this
Warrant to the contrary, a Triggering Event shall not be deemed to have occurred
if, prior to the consummation thereof, each Person (other than the Issuer) which
may be required to deliver any securities, cash or property upon the exercise of
this Warrant as provided herein shall assume, by written instrument delivered
to, and reasonably satisfactory to, the Holder of this Warrant, (A) the
obligations of the Issuer under this Warrant (and if the Issuer shall survive
the consummation of such Triggering Event, such assumption shall be in addition
to, and shall not release the Issuer from, any continuing obligations of the
Issuer under this Warrant) and (B) the obligation to deliver to such Holder such
shares of securities, cash or property as, in accordance with the foregoing
provisions of this subsection (a), such Holder shall be entitled to receive, and
such Person shall have similarly delivered to such Holder a written
acknowledgement executed by the President or Chief Financial Officer of the
Issuer, stating that this Warrant shall thereafter continue in full force and
effect and the terms hereof (including, without limitation, all of the
provisions of this subsection (a)) shall be applicable to the securities, cash
or property which such Person may be required to deliver upon any exercise of
this Warrant or the exercise of any rights pursuant hereto.

 

(b)                                 Stock Dividends, Subdivisions and
Combinations.  If at any time the Issuer shall:

 

(i)                                     make or issue or set a record date for
the holders of its Common Stock for the purpose of entitling them to receive a
dividend payable in, or other distribution of, shares of Common Stock,

 

(ii)                                  effect a stock split of its outstanding
shares of Common Stock into a larger number of shares of Common Stock, or

 

(iii)                               combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock,

 

then (1) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant Price then in effect
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after
such adjustment.

 

Notwithstanding the foregoing, if such record date shall have been fixed and
such dividend

 

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is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Warrant Price shall be adjusted pursuant to this paragraph as of
the time of actual payment of such dividends or distributions.

 

(c)                                  Certain Other Distributions.  If at any
time the Issuer shall make or issue or set a record date for the determination
of the holders of its Common Stock for the purpose of entitling them to receive
any dividend or other distribution of:

 

(i)                                     cash (other than a cash dividend payable
out of earnings or earned surplus legally available for the payment of dividends
under the laws of the jurisdiction of incorporation of the Issuer),

 

(ii)                                  any evidences of its indebtedness, any
shares of stock of any class or any other securities or property of any nature
whatsoever (other than cash, Common Stock Equivalents or Additional Shares of
Common Stock), or

 

(iii)                               any warrants or other rights to subscribe
for or purchase any evidences of its indebtedness, any shares of stock of any
class or any other securities or property of any nature whatsoever (other than
cash, Common Stock Equivalents or Additional Shares of Common Stock),

 

then (1) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment multiplied by a fraction (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value minus the amount
allocable to one share of Common Stock of any such cash so distributable and of
the fair value (as determined in good faith by the Board of Directors of the
Issuer and supported by an opinion from an investment banking firm of recognized
national standing acceptable to (but not affiliated with) the Holder) of any and
all such evidences of indebtedness, shares of stock, other securities or
property or warrants or other subscription or purchase rights so distributable,
and (2) the Warrant Price then in effect shall be adjusted to equal (A) the
Warrant Price then in effect multiplied by the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares of Common Stock for which this Warrant is
exercisable immediately after such adjustment.  A reclassification of the Common
Stock (other than a change in par value, or from par value to no par value or
from no par value to par value) into shares of Common Stock and shares of any
other class of stock shall be deemed a distribution by the Issuer to the holders
of its Common Stock of such shares of such other class of stock within the
meaning of this Section 4(c) and, if the outstanding shares of Common Stock
shall be changed into a larger or smaller number of shares of Common Stock as a
part of such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common Stock
within the meaning of Section 4(b).

 

Notwithstanding the foregoing, if such record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the

 

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Warrant Price shall be adjusted pursuant to this Section 4(c) as of the time of
actual payment of such dividends or distributions.

 

(d)                                 Issuance of Additional Shares of Common
Stock.

 

(i)                                     In the event the Issuer shall at any
time following the Original Issue Date issue any Additional Shares of Common
Stock (otherwise than as provided in the foregoing subsections (a) through (c)
of this Section 4), at a price per share less than the Warrant Price then in
effect or without consideration, then the Warrant Price upon each such issuance
shall be adjusted to that price determined by multiplying the Warrant Price then
in effect by a fraction:

 

(A)                              THE NUMERATOR OF WHICH SHALL BE EQUAL TO THE
SUM OF (X) THE NUMBER OF SHARES OF OUTSTANDING COMMON STOCK IMMEDIATELY PRIOR TO
THE ISSUANCE OF SUCH ADDITIONAL SHARES OF COMMON STOCK PLUS (Y) THE NUMBER OF
SHARES OF COMMON STOCK (ROUNDED TO THE NEAREST WHOLE SHARE) WHICH THE AGGREGATE
CONSIDERATION FOR THE TOTAL NUMBER OF SUCH ADDITIONAL SHARES OF COMMON STOCK SO
ISSUED WOULD PURCHASE AT A PRICE PER SHARE EQUAL TO THE WARRANT PRICE THEN IN
EFFECT, AND

 

(B)                                THE DENOMINATOR OF WHICH SHALL BE EQUAL TO
THE NUMBER OF SHARES OF OUTSTANDING COMMON STOCK IMMEDIATELY AFTER THE ISSUANCE
OF SUCH ADDITIONAL SHARES OF COMMON STOCK.

 

(ii)                                  No adjustment of the number of shares of
Common Stock for which this Warrant shall be exercisable shall be made under
paragraph (i) of Section 4(d) upon the issuance of any Additional Shares of
Common Stock which are issued pursuant to the exercise of any Common Stock
Equivalents, if any such adjustment shall previously have been made upon the
issuance of such Common Stock Equivalents (or upon the issuance of any warrant
or other rights therefor) pursuant to Section 4(f).

 

(e)                                  Intentionally Omitted.

 

(f)                                    Issuance of Common Stock Equivalents.  If
at any time the Issuer shall issue or sell any Common Stock Equivalents, whether
or not the rights to exchange or convert thereunder are immediately exercisable,
and the aggregate price per share for which Common Stock is issuable upon such
conversion or exchange plus the consideration received by the Issuer for
issuance of such Common Stock Equivalent divided by the number of shares of
Common Stock issuable pursuant to such Common Stock Equivalent shall be less
than the Warrant Price in effect immediately prior to the time of such issue or
sale, then the number of shares of Common Stock for which this Warrant is
exercisable and the Warrant Price then in effect shall be adjusted as provided
in Section 4(d) on the basis that the maximum number of Additional Shares of
Common Stock necessary to effect the conversion or exchange of all such Common
Stock Equivalents shall be deemed to have been issued and outstanding and the
Issuer shall have received all of the consideration payable therefor, if any, as
of the date of actual issuance of such Common Stock Equivalents.  No further
adjustment of the number of shares of Common Stock for which this Warrant is
exercisable and the Warrant Price then in effect shall be made under this

 

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Section 4(f) upon the issuance of any Common Stock Equivalents which are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights therefor, if any such adjustment shall previously have been made upon the
issuance of such warrants or other rights pursuant to this Section 4(f).  No
further adjustments of the number of shares of Common Stock for which this
Warrant is exercisable and the Warrant Price then in effect shall be made upon
the actual issue of such Common Stock upon conversion or exchange of such Common
Stock Equivalents.

 

(g)                                 Superseding Adjustment.  If, at any time
after any adjustment of the number of shares of Common Stock for which this
Warrant is exercisable and the Warrant Price then in effect shall have been made
pursuant to Section 4(f) as the result of any issuance of Common Stock
Equivalents, and (i) such Common Stock Equivalents, or the right of conversion
or exchange in such Common Stock Equivalents, shall expire, and all or a portion
of such or the right of conversion or exchange with respect to all or a portion
of such Common Stock Equivalents, as the case may be, shall not have been
exercised, or (ii) the consideration per share for which shares of Common Stock
are issuable pursuant to such Common Stock Equivalents shall be increased, then
such previous adjustment shall be rescinded and annulled and the Additional
Shares of Common Stock which were deemed to have been issued by virtue of the
computation made in connection with the adjustment so rescinded and annulled
shall no longer be deemed to have been issued by virtue of such computation. 
Upon the occurrence of an event set forth in this Section 4(g) above, there
shall be a recomputation made of the effect of such Common Stock Equivalents on
the basis of: (i) treating the number of Additional Shares of Common Stock
theretofore actually issued or issuable pursuant to the previous exercise of
Common Stock Equivalents or any such right of conversion or exchange, as having
been issued on the date or dates of any such exercise and for the consideration
actually received and receivable therefor, and (ii) treating any such Common
Stock Equivalents which then remain outstanding as having been granted or issued
immediately after the time of such increase of the consideration per share for
which Additional Shares of Common Stock are issuable under such Common Stock
Equivalents; whereupon a new adjustment of the number of shares of Common Stock
for which this Warrant is exercisable and the Warrant Price then in effect shall
be made, which new adjustment shall supersede the previous adjustment so
rescinded and annulled.

 

(h)                                 Purchase of Common Stock by the Issuer.  If
the Issuer at any time while this Warrant is outstanding shall, directly or
indirectly through a Subsidiary or otherwise, purchase, redeem or otherwise
acquire any shares of Common Stock at a price per share greater than the Per
Share Market Value, other than from an employee, consultant or director of the
Issuer pursuant to a restricted stock or similar agreement, then the Warrant
Price upon each such purchase, redemption or acquisition shall be adjusted to
that price determined by multiplying such Warrant Price by a fraction (i) the
numerator of which shall be the number of shares of Outstanding Common Stock
immediately prior to such purchase, redemption or acquisition minus the number
of shares of Common Stock which the aggregate consideration for the total number
of such shares of Common Stock so purchased, redeemed or acquired would purchase
at the Per Share Market Value; and (ii) the denominator of which shall be the
number of shares of Outstanding Common Stock immediately after such purchase,
redemption or acquisition.  For the purposes of this

 

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subsection (h), the date as of which the Per Share Market Price shall be
computed shall be the earlier of (x) the date on which the Issuer shall enter
into a firm contract for the purchase, redemption or acquisition of such Common
Stock, or (y) the date of actual purchase, redemption or acquisition of such
Common Stock.  For the purposes of this subsection (h), a purchase, redemption
or acquisition of a Common Stock Equivalent shall be deemed to be a purchase of
the underlying Common Stock, and the computation herein required shall be made
on the basis of the full exercise, conversion or exchange of such Common Stock
Equivalent on the date as of which such computation is required hereby to be
made, whether or not such Common Stock Equivalent is actually exercisable,
convertible or exchangeable on such date.

 

(i)                                     Other Provisions applicable to
Adjustments under this Section.  The following provisions shall be applicable to
the making of adjustments of the number of shares of Common Stock for which this
Warrant is exercisable and the Warrant Price then in effect provided for in this
Section 4:

 

(i)                                   Limit to Adjustment of Warrant Price. 
Notwithstanding anything to the contrary set forth in Sections 4(d), (f) and (h)
hereof, in no event shall the Warrant Price be adjusted pursuant to Sections
4.1(d), (f) or (h) to a price that is less than the Per Share Market Value of a
share of Common Stock on the date immediately preceding the date of issuance of
this Warrant (as the same may be adjusted pursuant to Sections 4(b) and 4(c)
hereof).

 

(ii)                                  Computation of Consideration.  To the
extent that any Additional Shares of Common Stock or any Common Stock
Equivalents (or any warrants or other rights therefor) shall be issued for cash
consideration, the consideration received by the Issuer therefor shall be the
amount of the cash received by the Issuer therefor, or, if such Additional
Shares of Common Stock or Common Stock Equivalents are offered by the Issuer for
subscription, the subscription price, or, if such Additional Shares of Common
Stock or Common Stock Equivalents are sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering price (in
any such case subtracting any amounts paid or receivable for accrued interest or
accrued dividends and without taking into account any compensation, discounts or
expenses paid or incurred by the Issuer for and in the underwriting of, or
otherwise in connection with, the issuance thereof).  In connection with any
merger or consolidation in which the Issuer is the surviving corporation (other
than any consolidation or merger in which the previously outstanding shares of
Common Stock of the Issuer shall be changed to or exchanged for the stock or
other securities of another corporation), the amount of consideration therefore
shall be, deemed to be the fair value, as determined reasonably and in good
faith by the Board, of such portion of the assets and business of the
nonsurviving corporation as the Board may determine to be attributable to such
shares of Common Stock or Common Stock Equivalents, as the case may be.  The
consideration for any Additional Shares of Common Stock issuable pursuant to any
warrants or other rights to subscribe for or purchase the same shall be the
consideration received by the Issuer for issuing such warrants or other rights
plus the additional consideration payable to the Issuer upon exercise of such
warrants or other rights.  The consideration for any Additional Shares of

 

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Common Stock issuable pursuant to the terms of any Common Stock Equivalents
shall be the consideration received by the Issuer for issuing warrants or other
rights to subscribe for or purchase such Common Stock Equivalents, plus the
consideration paid or payable to the Issuer in respect of the subscription for
or purchase of such Common Stock Equivalents, plus the additional consideration,
if any, payable to the Issuer upon the exercise of the right of conversion or
exchange in such Common Stock Equivalents.  In the event of any consolidation or
merger of the Issuer in which the Issuer is not the surviving corporation or in
which the previously outstanding shares of Common Stock of the Issuer shall be
changed into or exchanged for the stock or other securities of another
corporation, or in the event of any sale of all or substantially all of the
assets of the Issuer for stock or other securities of any corporation, the
Issuer shall be deemed to have issued a number of shares of its Common Stock for
stock or securities or other property of the other corporation computed on the
basis of the actual exchange ratio on which the transaction was predicated, and
for a consideration equal to the fair market value on the date of such
transaction of all such stock or securities or other property of the other
corporation.  In the event any consideration received by the Issuer for any
securities consists of property other than cash, the fair market value thereof
at the time of issuance or as otherwise applicable shall be as determined in
good faith by the Board.  In the event Common Stock is issued with other shares
or securities or other assets of the Issuer for consideration which covers both,
the consideration computed as provided in this Section 4(i)(ii) shall be
allocated among such securities and assets as determined in good faith by the
Board.

 

(iii)                               When Adjustments to Be Made.  The
adjustments required by this Section 4 shall be made whenever and as often as
any specified event requiring an adjustment shall occur, except that any
adjustment of the number of shares of Common Stock for which this Warrant is
exercisable that would otherwise be required may be postponed (except in the
case of a subdivision or combination of shares of the Common Stock, as provided
for in Section 4(b)) up to, but not beyond the date of exercise if such
adjustment either by itself or with other adjustments not previously made adds
or subtracts less than one percent (1%) of the shares of Common Stock for which
this Warrant is exercisable immediately prior to the making of such adjustment. 
Any adjustment representing a change of less than such minimum amount (except as
aforesaid) which is postponed shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Section 4 and not
previously made, would result in a minimum adjustment or on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed
to have occurred at the close of business on the date of its occurrence.

 

(iv)                              Fractional Interests.  In computing
adjustments under this Section 4, fractional interests in Common Stock shall be
taken into account to the nearest one one-hundredth (1/100th) of a share.

 

(v)                                 When Adjustment Not Required.  If the Issuer
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or distribution or subscription or purchase
rights and shall, thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such dividend, distribution,
subscription or purchase rights, then thereafter no adjustment shall

 

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be required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.

 

(j)                                     Form of Warrant after Adjustments.  The
form of this Warrant need not be changed because of any adjustments in the
Warrant Price or the number and kind of Securities purchasable upon the exercise
of this Warrant.

 

(k)                                  Escrow of Warrant Stock.  If after any
property becomes distributable pursuant to this Section 4 by reason of the
taking of any record of the holders of Common Stock, but prior to the occurrence
of the event for which such record is taken, and the Holder exercises this
Warrant, any shares of Common Stock issuable upon exercise by reason of such
adjustment shall be deemed the last shares of Common Stock for which this
Warrant is exercised (notwithstanding any other provision to the contrary
herein) and such shares or other property shall be held in escrow for the Holder
by the Issuer to be issued to the Holder upon and to the extent that the event
actually takes place, upon payment of the current Warrant Price. 
Notwithstanding any other provision to the contrary herein, if the event for
which such record was taken fails to occur or is rescinded, then such escrowed
shares shall be cancelled by the Issuer and escrowed property returned.

 

5.                                       Notice of Adjustments.  Whenever the
Warrant Price or Warrant Share Number shall be adjusted pursuant to Section 4
hereof (for purposes of this Section 5, each an “adjustment”), the Issuer shall
cause its Chief Financial Officer to prepare and execute a certificate setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated (including a
description of the basis on which the Board made any determination hereunder),
and the Warrant Price and Warrant Share Number after giving effect to such
adjustment, and shall cause copies of such certificate to be delivered to the
Holder of this Warrant promptly after each adjustment.  Any dispute between the
Issuer and the Holder of this Warrant with respect to the matters set forth in
such certificate may at the option of the Holder of this Warrant be submitted to
one of the national accounting firms currently known as the “big four” selected
by the Holder, provided that the Issuer shall have ten (10) days after receipt
of notice from such Holder of its selection of such firm to object thereto, in
which case such Holder shall select another such firm and the Issuer shall have
no such right of objection.  The firm selected by the Holder of this Warrant as
provided in the preceding sentence shall be instructed to deliver a written
opinion as to such matters to the Issuer and such Holder within thirty (30) days
after submission to it of such dispute.  Such opinion shall be final and binding
on the parties hereto.

 

6.                                       Fractional Shares.  No fractional
shares of Warrant Stock will be issued in connection with and exercise hereof,
but in lieu of such fractional shares, the Issuer shall make a cash payment
therefor equal in amount to the product of the applicable fraction multiplied by
the Per Share Market Value then in effect.

 

7.                                       Ownership Cap and Certain Exercise
Restrictions.  (a)  Notwithstanding anything to the contrary set forth in this
Warrant, at no time may a Holder of this Warrant exercise this Warrant if the
number of shares of Common Stock to be issued pursuant to such exercise would
exceed, when aggregated with all other shares of Common Stock

 

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owned by such Holder at such time, the number of shares of Common Stock which
would result in such Holder owning more than 4.999% of all of the Common Stock
outstanding at such time; provided, however, that upon a holder of this Warrant
providing the Issuer with sixty-one (61) days notice (pursuant to Section 12
hereof) (the “Waiver Notice”) that such Holder would like to waive this Section
7(a) with regard to any or all shares of Common Stock issuable upon exercise of
this Warrant, this Section 7(a) will be of no force or effect with regard to all
or a portion of the Warrant referenced in the Waiver Notice; provided, further,
that this provision shall be of no further force or effect during the sixty-one
(61) days immediately preceding the expiration of the term of this Warrant.

 

(b)                                 The Holder may not exercise the Warrant
hereunder to the extent such exercise would result in the Holder beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and
the rules thereunder) in excess of 9.999% of the then issued and outstanding
shares of Common Stock, including shares issuable upon exercise of the Warrant
held by the Holder after application of this Section; provided, however, that
upon a holder of this Warrant providing the Issuer with a Waiver Notice that
such holder would like to waive this Section 7(b) with regard to any or all
shares of Common Stock issuable upon exercise of this Warrant, this Section 7(b)
shall be of no force or effect with regard to those shares of Warrant Stock
referenced in the Waiver Notice; provided, further, that this provision shall be
of no further force or effect during the sixty-one (61) days immediately
preceding the expiration of the term of this Warrant.

 

8.                                       Call.  Notwithstanding anything herein
to the contrary, commencing thirty-six (36) months following the effective date
of the registration statement under the Securities Act registering the resale of
the Warrant Stock, the Issuer, at its option, may call up to one hundred percent
(100%) of this Warrant if the Per Share Market Value of the Common Stock has
been equal to or greater than 200% of the Warrant Price for a period of ten (10)
consecutive Trading Days immediately prior to the date of delivery of the Call
Notice (a “Call Notice Period”) by providing the Holder of this Warrant written
notice pursuant to Section 13 (the “Call Notice”); provided, that a registration
statement under the Securities Act providing for the resale of the Warrant Stock
is then in effect and has been effective, without lapse or suspension of any
kind, for a period of 60 consecutive calendar days (unless such registration
statement is no longer required to be effective pursuant to the Registration
Rights Agreement dated as October 31, 2003 among the Issuer, the Holder and the
other holders named therein (the “Registration Rights Agreement”)); provided,
further, that a registration statement under the Securities Act providing for
the resale of the Warrant Stock is in effect from the date of delivery of the
Call Notice until the date which is the later of (i) the date the Holder
exercises the Warrant pursuant to the Call Notice and (ii) the 20th day after
the Holder receives the Call Notice (the “Early Termination Date”) (unless such
registration statement is no longer required to be effective pursuant to the
Registration Rights Agreement).  The rights and privileges granted pursuant to
this Warrant with respect to the shares of Warrant Stock subject to the Call
Notice (the “Called Warrant Shares”) shall expire on the Early Termination Date
if this Warrant is not exercised with respect to such Called Warrant Shares
prior to such Early Termination Date.  In the event this Warrant is not
exercised with respect to the Called Warrant Shares, the Issuer shall remit to
the Holder of this Warrant (i) $.001 per Called Warrant Share and (ii) a new
Warrant representing the number of shares of Warrant

 

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Stock, if any, which shall not have been subject to the Call Notice upon the
Holder tendering to the Issuer the applicable Warrant certificate.

 

9.                Definitions.  For the purposes of this Warrant, the following
terms have the following meanings:

 

“Additional Shares of Common Stock” means all shares of Common Stock issued by
the Issuer after the Original Issue Date, and all shares of Other Common, if
any, issued by the Issuer after the Original Issue Date, except: (i) securities
issued pursuant to an underwritten public offering of the Issuer’s securities,
(ii) securities issued pursuant to the conversion or exercise of convertible or
excercisable securities issued or outstanding on or prior to the date hereof or
issued pursuant to the Purchase Agreement, (iii) the Warrant Stock, (iv)
securities issued in connection with a merger and/or acquisition, consolidation,
sale or disposition of all or substantially all of the Issuer’s assets, (v)
securities issued in connection with strategic license agreements so long as
such issuances are not for the purpose of raising capital, (vi) Common Stock
issued or options to purchase Common Stock granted or issued pursuant to the
Issuer’s stock option plans and employee stock purchase plans as they now exist,
(vii) Common Stock issued or options to purchase Common Stock issued or granted
pursuant to any future stock option plan or employee stock purchase plan or any
amendment to the Issuer’s existing stock option plans and employee stock
purchase plans so long as such issuances in the aggregate do not exceed
1,700,000 shares of Common Stock, (viii) securities issued in any transaction
where the first use of proceeds from such transaction would be used to redeem
all of the shares of Series B Preferred Stock of the Issuer (or the Common Stock
issued in connection with the exercise of any warrants) in accordance with the
Certificate of Designation, (ix) Common Stock or warrants therefore issued in
connection with any acquisition of assets, product lines or businesses so long
as such issuances in the aggregate do not exceed twenty percent (20%) of the
Issuer’s issued and outstanding shares of Common Stock as of the date hereof,
(x) Common Stock issued pursuant to the Issuer’s 401(k) matches; (xi) securities
issued to consultants, financial advisers, public relations consultants or
secured lenders to the Issuer so long as such issuances to such secured lenders
do not in the aggregate exceed ten percent (10%) of the Issuer’s issued and
outstanding shares of Common Stock as of the date hereof, (xii) any warrants
issued to a Holder pursuant to such Purchase Agreement, (xiii) any warrants
issued to the placement agent for the transactions contemplated by the Purchase
Agreement, (xiv) the payment of any dividend on the Series B Preferred Stock of
the Issuer and the payment of any interest on the secured convertible promissory
notes issued pursuant to the Note and Warrant Purchase Agreement, (xv)
securities issued pursuant to Section 3.12 of the Purchase Agreement relating to
the Series B financing, (xvi) securities issued to the holders of Series B
Preferred Stock of the Issuer as payment of a penalty upon redemption of those
shares or otherwise, and (xvii) Common Stock issued upon the exercise or
conversion of any securities described in clauses (i) through (xvii) above.

 

“Board” shall mean the Board of Directors of the Issuer.

 

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“Capital Stock” means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or limited) in
any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.

 

“Certificate of Incorporation” means the Certificate of Incorporation of the
Issuer as in effect on the Original Issue Date, and as hereafter from time to
time amended, modified, supplemented or restated in accordance with the terms
hereof and thereof and pursuant to applicable law.

 

“Common Stock” means the Common Stock, par value $.01 per share, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.

 

“Common Stock Equivalent” means any Convertible Security or warrant, option or
other right to subscribe for or purchase any Additional Shares of Common Stock
or any Convertible Security.

 

“Convertible Securities” means evidences of Indebtedness, shares of Capital
Stock or other Securities which are or may be at any time convertible into or
exchangeable for Additional Shares of Common Stock.  The term “Convertible
Security” means one of the Convertible Securities.

 

“Governmental Authority” means any governmental, regulatory or self-regulatory
entity, department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.

 

“Holders” mean the Persons who shall from time to time own any Warrant.  The
term “Holder” means one of the Holders.

 

“Independent Appraiser” means a nationally recognized or major regional
investment banking firm or firm of independent certified public accountants of
recognized standing (which may be the firm that regularly examines the financial
statements of the Issuer) that is regularly engaged in the business of
appraising the Capital Stock or assets of corporations or other entities as
going concerns, and which is not affiliated with either the Issuer or the Holder
of any Warrant.

 

“Issuer” means SatCon Technology Corporation, a Delaware corporation, and its
successors.

 

“Majority Holders” means at any time the Holders of Warrants exercisable for a
majority of the shares of Warrant Stock issuable under the Warrants at the time
outstanding.

 

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“Nasdaq” means the Nasdaq National Market or the Nasdaq SmallCap Market.

 

“Original Issue Date” means October 31, 2003.

 

“OTC Bulletin Board” means the over-the-counter electronic bulletin board.

 

“Other Common” means any other Capital Stock of the Issuer of any class which
shall be authorized at any time after the date of this Warrant (other than
Common Stock) and which shall have the right to participate in the distribution
of earnings and assets of the Issuer without limitation as to amount.

 

“Outstanding Common Stock” means, at any given time, the aggregate amount of
outstanding shares of Common Stock, assuming full exercise, conversion or
exchange (as applicable) of all options, warrants and other Securities which are
convertible into or exercisable or exchangeable for, and any right to subscribe
for, shares of Common Stock that are outstanding at such time.

 

“Person” means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.

 

“Per Share Market Value” means on any particular date (a) the average of the
closing bid and asked price per share of the Common Stock on such date on Nasdaq
or another registered national stock exchange on which the Common Stock is then
listed, or if there is no such price on such date, then the average of the
closing bid and asked price on such exchange or quotation system on the date
nearest preceding such date, or (b) if the Common Stock is not listed then on
Nasdaq or any registered national stock exchange, the closing bid price for a
share of Common Stock in the over-the-counter market, as reported by the OTC
Bulletin Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices) at the
close of business on such date, or (c) if the Common Stock is not then reported
by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or
similar organization or agency succeeding to its functions of reporting prices),
then the average of the “Pink Sheet” quotes for the relevant conversion period,
as determined in good faith by the holder, or (d) if the Common Stock is not
then publicly traded the fair market value of a share of Common Stock as
determined by an Independent Appraiser selected in good faith by the Majority
Holders; provided, however, that the Issuer, after receipt of the determination
by such Independent Appraiser, shall have the right to select an additional
Independent Appraiser, in which case, the fair market value shall be equal to
the average of the determinations by each such Independent Appraiser; and
provided, further that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other similar
transactions during such period.  The determination of fair market value by an
Independent Appraiser shall be based upon the fair market value of the Issuer
determined on a going concern basis as between a willing buyer and a willing
seller and taking into account all relevant factors determinative of value, and
shall be final

 

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and binding on all parties.  In determining the fair market value of any shares
of Common Stock, no consideration shall be given to any restrictions on transfer
of the Common Stock imposed by agreement or by federal or state securities laws,
or to the existence or absence of, or any limitations on, voting rights.

 

“Purchase Agreement” means the Series B Convertible Preferred Stock Purchase
Agreement dated as of October 31, 2003, among the Issuer and the investors a
party thereto.

 

“Securities” means any debt or equity securities of the Issuer, whether now or
hereafter authorized, any instrument convertible into or exchangeable for
Securities or a Security, and any option, warrant or other right to purchase or
acquire any Security.  “Security” means one of the Securities.

 

“Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute then in effect.

 

“Subsidiary” means any corporation at least 50% of whose outstanding Voting
Stock shall at the time be owned directly or indirectly by the Issuer or by one
or more of its Subsidiaries, or by the Issuer and one or more of its
Subsidiaries.

 

“Term” has the meaning specified in Section 1 hereof.

 

“Trading Day” means (a) a day on which the Common Stock is traded on Nasdaq, or
(b) if the Common Stock is not listed on Nasdaq, a day on which the Common Stock
is traded on any other registered national stock exchange, or (c) if the Common
Stock is not traded on any other registered national stock exchange, a day on
which the Common Stock is traded on the OTC Bulletin Board, or (d) if the Common
Stock is not traded on the OTC Bulletin Board, a day on which the Common Stock
is quoted in the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding its
functions of reporting prices); provided, however, that in the event that the
Common Stock is not listed or quoted as set forth in (a), (b) or (c) hereof,
then Trading Day shall mean any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government action to close.

 

“Voting Stock” means, as applied to the Capital Stock of any corporation,
Capital Stock of any class or classes (however designated) having ordinary
voting power for the election of a majority of the members of the Board of
Directors (or other governing body) of such corporation, other than Capital
Stock having such power only by reason of the happening of a contingency.

 

“Warrants” means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other warrants
of like tenor issued in substitution or exchange for any thereof pursuant to the
provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other
Warrants.

 

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“Warrant Price” initially means U.S. $3.32, as such Warrant Price may be
adjusted from time to time as shall result from the adjustments specified in
this Warrant, including Section 4 hereto.

 

“Warrant Share Number” means at any time the aggregate number of shares of
Warrant Stock which may at such time be purchased upon exercise of this Warrant,
after giving effect to all prior adjustments and increases to such number made
or required to be made under the terms hereof.

 

“Warrant Stock” means Common Stock issuable upon exercise of any Warrant or
Warrants or otherwise issuable pursuant to any Warrant or Warrants.

 

10.                                 Other Notices.  In case at any time:

 

(A)                              the Issuer shall make any distributions to the
holders of Common Stock; or

 

(B)                                the Issuer shall authorize the granting to
all holders of its Common Stock of rights to subscribe for or purchase any
shares of Capital Stock of any class or other rights; or

 

(C)                                there shall be any reclassification of the
Capital Stock of the Issuer; or

 

(D)                               there shall be any capital reorganization by
the Issuer; or

 

(E)                                 there shall be any (i) consolidation or
merger involving the Issuer or (ii) sale, transfer or other disposition of all
or substantially all of the Issuer’s property, assets or business (except a
merger or other reorganization in which the Issuer shall be the surviving
corporation and its shares of Capital Stock shall continue to be outstanding and
unchanged and except a consolidation, merger, sale, transfer or other
disposition involving a wholly-owned Subsidiary); or

 

(F)                                 there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Issuer or any partial liquidation
of the Issuer or distribution to holders of Common Stock;

 

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification,

 

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consolidation, merger, disposition, dissolution, liquidation or winding-up, as
the case may be, shall take place.  Such notice also shall specify the date as
of which the holders of Common Stock of record shall participate in such
dividend, distribution or subscription rights, or shall be entitled to exchange
their certificates for Common Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be.  Such notice shall
be given at least twenty (20) days prior to the record date or effective date
for the event specified in such notice.

 

11.                                 Amendment and Waiver.  Any term, covenant,
agreement or condition in this Warrant may be amended, or compliance therewith
may be waived (either generally or in a particular instance and either
retroactively or prospectively), by a written instrument or written instruments
executed by the Issuer and the Majority Holders; provided, however, that no such
amendment or waiver shall reduce the Warrant Share Number, increase the Warrant
Price, shorten the period during which this Warrant may be exercised or modify
any provision of this Section 10 without the consent of the Holder of this
Warrant.

 

12.                                 Governing Law.  THIS WARRANT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW. Each of the Issuer and
the Holder (i) hereby irrevocably submits to the exclusive jurisdiction of the
United States District Court sitting in the Southern District of New York and
the courts of the State of New York located in New York county for the purposes
of any suit, action or proceeding arising out of or relating to this Warrant or
any of the other Transaction Documents (as defined in the Purchase Agreement) or
the transactions contemplated hereby or thereby and (ii) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper.  Each of the Issuer and the Holder
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under the Purchase Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing in this Section
12 shall affect or limit any right to serve process in any other manner
permitted by law.

 

13.                                 Notices.  Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earlier of
(i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified for notice prior to 5:00
p.m., eastern time, on a Trading Day, (ii) the Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice later than 5:00 p.m., eastern
time, on any date and earlier than 11:59 p.m., eastern time, on such date, (iii)
the Trading Day following the date of mailing, if sent by overnight delivery by
nationally recognized overnight courier service or (iv) actual receipt by the
party to whom such notice is required to be given.  The addresses for such
communications shall be with respect to the Holder of this Warrant or of Warrant
Stock

 

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issued pursuant hereto, addressed to such Holder at its last known address or
facsimile number appearing on the books of the Issuer maintained for such
purposes, or with respect to the Issuer, addressed to:

 

SatCon Technology Corporation

161 First Street

Cambridge, MA 02142

Attention: David B. Eisenhaure

Tel. No.: (617) 661-0540

Fax No.:  (617) 349-0898

 

Copies of notices to the Issuer shall be sent to Greenberg Traurig LLP, One
International Place, Boston, MA 02110, Attention: Jonathan Bell, Esq., Tel. No.:
(617) 310-6038, Fax No.: (617) 279-8438.  Any party hereto may from time to time
change its address for notices by giving at least ten (10) days written notice
of such changed address to the other party hereto.

 

14.                                 Warrant Agent.  The Issuer may, by written
notice to each Holder of this Warrant, appoint an agent having an office in New
York, New York for the purpose of issuing shares of Warrant Stock on the
exercise of this Warrant pursuant to subsection (b) of Section 2 hereof,
exchanging this Warrant pursuant to subsection (d) of Section 2 hereof or
replacing this Warrant pursuant to subsection (d) of Section 3 hereof, or any of
the foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.

 

15.                                 Remedies.  The Issuer stipulates that the
remedies at law of the Holder of this Warrant in the event of any default or
threatened default by the Issuer in the performance of or compliance with any of
the terms of this Warrant are not and will not be adequate and that, to the
fullest extent permitted by law, such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.

 

16.                                 Successors and Assigns.  This Warrant and
the rights evidenced hereby shall inure to the benefit of and be binding upon
the successors and assigns of the Issuer, the Holder hereof and (to the extent
provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall
be enforceable by any such Holder or Holder of Warrant Stock.

 

17.                                 Modification and Severability.  If, in any
action before any court or agency legally empowered to enforce any provision
contained herein, any provision hereof is found to be unenforceable, then such
provision shall be deemed modified to the extent necessary to make it
enforceable by such court or agency.  If any such provision is not enforceable
as set forth in the preceding sentence, the unenforceability of such provision
shall not affect the other provisions of this Warrant, but this Warrant shall be
construed as if such unenforceable provision had never been contained herein.

 

18.                                 Headings.  The headings of the Sections of
this Warrant are for convenience of reference only and shall not, for any
purpose, be deemed a part of this Warrant.

 

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IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year
first above written.

 

 

 

 

 

SATCON TECHNOLOGY CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

Title:

 

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EXERCISE FORM

SATCON TECHNOLOGY CORPORATION

 

The undersigned                            , pursuant to the provisions of the
within Warrant, hereby elects to purchase            shares of Common Stock of
SatCon Technology Corporation covered by the within Warrant.

 

Dated:

 

 

Signature

 

 

 

 

 

 

Address

 

 

 

 

 

 

 

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise:                                       

 

ASSIGNMENT

 

FOR VALUE RECEIVED,                                  hereby sells, assigns and
transfers unto                                     the within Warrant and all
rights evidenced thereby and does irrevocably constitute and appoint
                             , attorney, to transfer the said Warrant on the
books of the within named corporation.

 

Dated:

 

 

Signature

 

 

 

 

 

 

Address

 

 

 

 

 

 

 

PARTIAL ASSIGNMENT

 

FOR VALUE RECEIVED,                                 hereby sells, assigns and
transfers unto                                  the right to purchase
                   shares of Warrant Stock evidenced by the within Warrant
together with all rights therein, and does irrevocably constitute and appoint
                                  , attorney, to transfer that part of the said
Warrant on the books of the within named corporation.

 

Dated:

 

 

Signature

 

 

 

 

 

 

Address

 

 

 

 

 

 

 

FOR USE BY THE ISSUER ONLY:

 

This Warrant No. W-      canceled (or transferred or exchanged) this          
day of                 ,          , shares of Common Stock issued therefor in
the name of                           , Warrant No. W-          issued for
         shares of Common Stock in the name of                           .

 

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