EXHIBIT 10.1


 


EIGHTH LOAN
MODIFICATION AGREEMENT


 


This
Eighth Loan Modification Agreement (this “Loan Modification
Agreement”) is entered into as of August 3, 2010 (the “Eighth 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 September 29, 2009, as further amended by that
certain Waiver and Fourth Loan Modification Agreement, dated as of February 18,
2010, as further amended by that certain Fifth Loan Modification Agreement,
dated as of March 10, 2010, as further amended by that certain Sixth Loan
Modification Agreement, dated as of April 22, 2010 and as further amended
by that certain Seventh Loan Modification Agreement, dated as of June 16,
2010 (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 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 (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


 


1

















 


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.”


 


and inserting in lieu thereof the following:


 


“(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-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 floating
per annum rate equal to the Prime Rate plus two and one-half of one percent
(2.50%), which interest shall be payable monthly, in arrears, in accordance
with Section 2.3(g) below.”


 


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


 


“(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;”


 


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,


 


2

















 


in an amount equal to one-half of one-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;”


 


3                                          The Loan Agreement shall be
amended by deleting the following text appearing as Section 6.3(c) thereof:


 


“(c)         Collection
of Accounts.  Borrower shall have the
right to collect all Accounts, unless and until a Default or an Event of
Default has occurred and is continuing. 
All payments on, and proceeds of, Accounts shall be deposited directly
by the applicable Account Debtor into a lockbox account, or such other “blocked
account” as Bank may specify, pursuant to a blocked account agreement in form
and substance satisfactory to Bank in its sole discretion.  Whether or not an Event of Default has
occurred and is continuing, Borrower shall hold all payments on, and proceeds
of, Accounts in trust for Bank, and Borrower shall promptly deliver all such
payments and proceeds to Bank in their original form, duly endorsed, to be
applied to be applied to the Obligations pursuant to the terms of Section 9.4
hereof; provided, however, in the event (i) Borrower
maintains or exceeds $10,000,000 in (A) Borrower’s unrestricted cash on
deposit at Bank plus (B) unused availability pursuant to the Revolving
Line under this Agreement, as determined by Bank with reference to the
Availability Amount set forth herein and (ii) no Default or Event of
Default has occurred and in is continuing, Payments on, and proceeds of,
Accounts shall be applied to the Obligations pursuant to the terms of Section 9.4
hereof only in the event the outstanding principal amount of the Obligations
then exceeds $4,500,000 (and only to the extent the Obligations then exceed
$4,500,000) and shall otherwise be transferred by Bank to an operating account
of Borrower maintained at Bank.”


 


and
inserting in lieu thereof the following:


 


“(c)         Collection of Accounts.  Borrower shall have the right to collect all
Accounts, unless and until a Default or an Event of Default has occurred and is
continuing.  All payments on, and
proceeds of, Accounts shall be deposited directly by the applicable Account
Debtor into a lockbox account, or such other “blocked account” as Bank may
specify, pursuant to a blocked account agreement in form and substance
satisfactory to Bank in its sole discretion. 
Whether or not an Event of Default has occurred and is continuing,
Borrower shall hold all payments on, and proceeds of, Accounts in trust for
Bank, and Borrower shall promptly deliver all such payments and proceeds to
Bank in their original form, duly endorsed, to be applied to be applied to the
Obligations pursuant to the terms of Section 9.4 hereof; provided, however,
in the event (i) Borrower maintains or exceeds $10,000,000 in (A) Borrower’s
unrestricted cash on deposit at Bank plus (B) unused availability pursuant
to the Revolving Line under this Agreement, as determined by Bank with
reference to the Availability Amount set forth herein and (ii) no Default
or Event of Default has occurred and in is continuing, Payments on, and
proceeds of, Accounts shall be transferred by Bank to an operating account of
Borrower maintained at Bank.”


 


4                                          The Loan Agreement shall be
amended by deleting the following text appearing as Section 6.9 thereof:


 


3

















 


“              6.9          Financial Covenants.


 


Borrower shall maintain at all times, to be certified by the Borrower
as of the last day of each month, unless otherwise noted, on a consolidated
basis with respect to Borrower and its Subsidiaries:


 


(a)           Liquidity.  (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.


 


(b)           Tangible Net
Worth.  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.”


 


and inserting in lieu thereof the following:


 


“              6.9          Financial Covenants.


 


Borrower shall maintain at all times, to be certified by the Borrower
as of the last day of each month, unless otherwise noted, on a consolidated
basis with respect to Borrower and its Subsidiaries:


 


(a)           Liquidity.  (I) From the Eighth Loan Modification
Effective Date through and including March 31, 2011, Borrower shall
maintain (A) unrestricted cash on deposit at Bank plus (B) unused
availability pursuant to the Revolving Line under this Agreement, as determined
by Bank with reference to the Availability Amount set forth herein (including,
through August 30, 2010, the unused availability under the Non-formula
Sublimit), of at least $5,000,000; and (II) From April 1, 2011 and at
all times thereafter, 


 


4

















 


Borrower shall maintain (A) unrestricted cash on deposit at Bank plus
(B) unused availability pursuant to the Revolving Line under this
Agreement, as determined by Bank with reference to the Availability Amount set
forth herein, of at least $6,500,000.


 


(b)           Adjusted EBITDA.
Achieve EBITDA minus Capital Expenditures, tested as of the last day of
each fiscal quarter on a trailing quarterly basis or trailing two-quarter’s
basis, as indicated below, of at least the following for the periods listed
below:


 


	
  Quarterly Period Ending

  	
   

  	
  Minimum Adjusted EBITDA

  	
   

  
	
  Trailing quarterly period ending
  September 30, 2010

  	
   

  	
  $

  	
  (2,000,000

  	
  )

  
	
  Trailing quarterly period ending December 31,
  2010

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  Trailing two-quarter period ending March 31,
  2011

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  Trailing two-quarter period ending June 30,
  2011

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  Trailing two-quarter period ending
  September 30, 2011

  	
   

  	
  $

  	
  5,000,000

  	
   

  



 


5                                          The Loan Agreement shall be
amended by deleting the following definition from Section 13.1 thereof:


 


“              “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.


 


“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.


 


“Net Income”
means, as calculated on a consolidated basis for Borrower and its Subsidiaries,
if any, for any period as at any date of determination, the net profit (or
loss),  after provision for taxes, of
Borrower and its Subsidiaries for such period taken as a single accounting
period.


 


“Revolving Line”
is an Advance or Advances in an aggregate amount of up to $10,000,000
outstanding at any time.”


 


and
inserting in lieu thereof the following:


 


“              “Borrowing
Base” is (a) 80% of Eligible Accounts plus (b) seventy
percent (70%) of Eligible Chinese Accounts, in each case as determined by Bank
from Borrower’s most recent Borrowing Base Certificate; provided, however,
that Bank may decrease the foregoing percentages  in
its good faith business judgment based on events,


 


5

















 


conditions,
contingencies, or risks which, as determined by Bank, may adversely affect
Collateral.


 


“Eligible Foreign Accounts”
are Accounts (other than Eligible Chinese Accounts) for which the Account
Debtor does not have its principal place of business in the United States but
are otherwise Eligible Accounts, that: (i) the Account Debtors for which
have a principal place of business in any of Canada, France, Germany, Italy,
Japan or the United Kingdom, the billing and payment receipt history for which
is acceptable to Bank, in its sole discretion; (ii) are supported by
letters of credit acceptable to Bank, in its sole discretion; or (iii) are
insured by insurance policies acceptable to Bank, in its sole discretion.  In any event, Bank reserves the right to
include in or exclude from the Borrowing Base any Accounts, in its sole discretion.


 


“Net Income”
means, as calculated on a consolidated basis for Borrower and its Subsidiaries,
if any,  for any period as at any date of
determination, the net profit (or loss), exclusive of any extraordinary gains,
after provision for taxes, of Borrower and its Subsidiaries for such period
taken as a single accounting period.


 


“Revolving Line”
is an Advance or Advances in an aggregate amount of up to $15,000,000
outstanding at any time.”


 


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


 


“              “Capital Expenditures” means, with respect to any Person for
any period, the sum of (a) the aggregate of all expenditures by such
Person and its Subsidiaries during such period that are capital expenditures as
determined in accordance with GAAP, whether such expenditures are paid in cash
or financed, plus (b) to the extent not covered by clause (a), the
aggregate of all expenditures by such Person and its Subsidiaries during such
period to acquire by purchase or otherwise the business or capitalized assets
or the capital stock of any other Person.


 


“EBITDA”
shall mean (a) Net Income, exclusive of any non-cash gains or losses due
to mark-to-market changes in the value of Borrower’s warrants, plus (b) Interest
Expense, plus (c) to the extent deducted in the calculation of Net Income,
depreciation expense and amortization expense (including, without limitation,
deferred financing costs and expenses), plus (d) income tax expense, plus (e) non-cash
stock compensation expense.


 


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


 


“Eighth Loan Modification
Effective Date” is the date noted in the preamble to the Eighth Loan
Modification Agreement.


 


“Eligible Chinese Accounts”
are Accounts for which the Account Debtor has a principal place of business in
China but are otherwise Eligible Accounts that are


 


6

















 


supported
by a letter of credit acceptable to Bank, in its sole discretion and that are,
on a case-by-case basis, acceptable to Bank in its sole reasonable discretion.


 


“Interest Expense”
means for any fiscal period, interest expense (whether cash or non-cash)
determined in accordance with GAAP for the relevant period ending on such date,
including, in any event, interest expense with respect to any Credit Extension
and other Indebtedness of Borrower and its Subsidiaries, if any, including,
without limitation or duplication, all commissions, discounts, or related
amortization and other fees and charges with respect to letters of credit and
bankers’ acceptance financing and the net costs associated with interest rate
swap, cap, and similar arrangements, and the interest portion of any deferred
payment obligation (including leases of all types).”


 


7                                          The Loan Agreement shall be
amended by deleting the following definition from Section 13.1 thereof:


 


“              “Tangible Net
Worth” is, on any date, the consolidated total assets of Borrower
and its Subsidiaries plus (a) Deferred Financing Costs minus
(b) any amounts attributable to (i) goodwill, (ii) intangible
items including unamortized debt discount and expense, patents, trade and
service marks and names, copyrights and research and development expenses
except prepaid expenses, (iii) notes, accounts receivable and other
obligations owing to Borrower from its officers or other Affiliates, and (iv) reserves
not already deducted from assets, minus (c) Total Liabilities
(exclusive of warrant and preferred stock liabilities, provided such
liabilities have redemption dates that exceed the term of this Agreement, as
certified by Borrower to Bank).”


 


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


 


4.             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.


 


5.             RATIFICATION
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT. Borrower hereby ratifies,
confirms, and reaffirms, all and singular, the terms and conditions of the IP
Agreement and acknowledges, confirms and agrees that the IP Agreement contains
an accurate and complete listing of all Intellectual Property.


 


6.             RATIFICATION
OF PERFECTION CERTIFICATE.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of 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.


 


7.             AUTHORIZATION
TO FILE.  Borrower hereby authorizes
Bank to file UCC financing statements without notice to Borrower, with all
appropriate jurisdictions, as Bank deems appropriate, in order to further
perfect or protect Bank’s interest in the Collateral, including a notice that
any disposition of the Collateral, by either the Borrower or any other Person,
shall be deemed to violate the rights of the Bank under the Code.


 


7

















 


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


 


9.             RATIFICATION
OF LOAN DOCUMENTS.  Borrower hereby
ratifies, confirms, and reaffirms all terms and conditions of all security or
other collateral granted to the Bank, and confirms that the indebtedness
secured thereby includes, without limitation, the Obligations.


 


10.           NO
DEFENSES OF BORROWER.  Borrower
hereby acknowledges and agrees that, as of the date of this Loan Modification
Agreement, Borrower has no offsets, defenses, claims, or counterclaims against
Bank with respect to the Obligations, or otherwise, and that if Borrower now
has, or ever did have, any offsets, defenses, claims, or counterclaims against
Bank, whether known or unknown, at law or in equity, all of them are hereby
expressly WAIVED and Borrower hereby RELEASES Bank from any liability
thereunder.


 


11.           CONTINUING
VALIDITY.  Borrower understands and
agrees that in modifying the existing Obligations, Bank is relying upon
Borrower’s representations, warranties, and agreements, as set forth in the
Existing Loan Documents.  Except as
expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the
existing Obligations pursuant to this 
Loan Modification Agreement in no way shall obligate Bank to make any
future modifications to the Obligations. 
Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Obligations.  It is
the intention of Bank and Borrower to retain as liable parties all makers of
Existing Loan Documents, unless the party is expressly released by Bank in
writing.  No maker will be released by
virtue of this Loan Modification Agreement.


 


12.           RIGHT
OF SET-OFF.  In consideration of Bank’s
agreement to enter into this Loan Modification Agreement, Borrower hereby
reaffirms and hereby grants to Bank, a lien, security interest and right of set
off as security for all Obligations to Bank, whether now existing or hereafter
arising upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of Bank or any
entity under the control of Bank (including a Bank subsidiary) or in transit to
any of them.  At any time after the
occurrence and during the continuance of an Event of Default, without demand or
notice, Bank may set off the same or any part thereof and apply the same to any
Obligation of Borrower, even though unmatured and regardless of the adequacy of
any other collateral securing the Obligations. 
ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.


 


13.           JURISDICTION/VENUE.  Borrower accepts for itself and in connection
with its properties, unconditionally, the exclusive jurisdiction of any state
or federal court of competent jurisdiction in the Commonwealth of Massachusetts
in any action, suit, or proceeding of any kind against it which arises out of
or by reason of this Loan Modification Agreement.  NOTWITHSTANDING THE FOREGOING,  THE BANK SHALL HAVE THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST ANY BORROWER OR ANY OF THEIR PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS NECESSARY OR APPROPRIATE
IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE THE BANK’S RIGHTS
AGAINST THE BORROWER OR ITS PROPERTY.


 


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


 


8

















 


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 Eighth Loan
Modification Effective Date.


 


 


	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
  SATCON TECHNOLOGY CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  By
  

  	
  /s/
  Donald R. Peck

  	
   

  
	
  Name:
  

  	
  Donald R. Peck

  	
   

  
	
  Title:
  

  	
  CFO

  	
   

  
	
   

  	
   

  	
   

  
	
  SATCON POWER SYSTEMS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By  

  	
  /s/
  Charles S. Rhoades

  	
   

  
	
  Name:
  

  	
  Charles S. Rhoades

  	
   

  
	
  Title:
  

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  SATCON ELECTRONICS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By  

  	
  /s/
  Charles S. Rhoades

  	
   

  
	
  Name:

  	
  Charles S. Rhoades

  	
   

  
	
  Title:
  

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  SATCON POWER SYSTEMS CANADA LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
  By  

  	
  /s/
  Charles S. Rhoades

  	
   

  
	
  Name:

  	
  Charles S. Rhoades

  	
   

  
	
  Title:
  

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  BANK:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
   

  
	
   

  	
   

  	
   

  
	
  By
  

  	
  /s/
  Michael Quinn

  	
   

  
	
  Name:
  

  	
  Michael Quinn

  	
   

  
	
  Title:
  

  	
  RM

  	
   

  



 


 


[Satcon — Eighth Loan
Modification Agreement Signature Page]


 
















 


Exhibit A to Eighth 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
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

  	
   

  	
  o Yes

  	
   

  	
  o No

  
	
  Annual
  financial statement (CPA Audited) + CC

  	
   

  	
  FYE
  within 120 days

  	
   

  	
  o Yes

  	
   

  	
  o No

  
	
  10-Q,
  10-K and 8-K

  	
   

  	
  Within
  5 days after filing with SEC

  	
   

  	
  o Yes

  	
   

  	
  o No

  
	
  A/R & A/P Agings

  	
   

  	
  Monthly
  within 15 days

  	
   

  	
  o Yes

  	
   

  	
  o No

  
	
  Projections

  	
   

  	
  Annually

  	
   

  	
  o Yes

  	
   

  	
  o 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 therein.

  	
   

  	
  o Yes

  	
   

  	
  o 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)

  	
   

  	
  $

  	
  *

  	
  $

  	
   

  	
  o Yes

  	
   

  	
  o No

  	
   

  
	
  Minimum adjusted EBITDA
  (quarterly)

  	
   

  	
  $

  	
  ** 

  	
  $

  	
   

  	
  o Yes

  	
   

  	
  o No

  	
   

  



 






* See
Section 6.9(a)


**
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:           o Yes  
  o No

  
								



 

















 


Schedule 1 to Compliance Certificate


 


Financial Covenants of Borrower


 


	
  Dated:

  	
   

  	
   

  



 


I.              Liquidity
(Section 6.9(a))


 


Required:               (I) From the Eighth Loan
Modification Effective Date through and including March 31, 2011, Borrower
shall maintain (A) unrestricted cash on deposit at Bank plus (B) unused
availability pursuant to the Revolving Line under this Agreement, as determined
by Bank with reference to the Availability Amount set forth herein (including,
through August 30, 2010, the unused availability under the Non-formula
Sublimit), of at least $5,000,000; and (II) From April 1, 2011 and at all times
thereafter, Borrower shall maintain (A) unrestricted cash on deposit at Bank plus
(B) unused availability pursuant to the Revolving Line under this Agreement, as
determined by Bank with reference to the Availability Amount set forth herein,
of at least $6,500,000.


 


Actual:


 


	
  A.

  	
   

  	
  Unrestricted
  cash at Bank

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Unused
  availability pursuant to the Revolving Line under this Agreement, as
  determined by Bank with reference to the Availability Amount set forth herein
  (including, through August 30, 2010, the unused availability under the
  Non-formula Sublimit) 

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Liquidity
  (line A plus line B)

  	
   

  	
  $

  	
   

  



 


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


 


               o No, not
in compliance                                                                                                o Yes, in
compliance


 

















 


II.            Adjusted EBITDA
(Section 6.9(b))


 


Required:               Achieve
EBITDA minus Capital Expenditures, tested as of the last day of each
fiscal quarter on a trailing quarterly basis or trailing two-quarter’s basis,
as indicated below, of at least the following for the periods listed below:


 


	
  Quarterly Period Ending

  	
   

  	
  Minimum Adjusted EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trailing quarterly period ending September 30,
  2010

  	
   

  	
  $

  	
  (2,000,000

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Trailing quarterly period ending December 31, 2010

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trailing two-quarter period ending March 31, 2011

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trailing two-quarter period ending June 30, 2011 

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Trailing two-quarter period ending September 30,
  2011

  	
   

  	
  $

  	
  5,000,000

  	
   

  



 


Actual:


 


	
  A.                                   Net Income,
  exclusive of any non-cash gains or losses due to mark-to-market changes in
  the value of Borrower’s warrants

  	
   

  	
  $

  
	
  B.                                     To the extend
  deducted from the calculation of Net Income:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  1.                                       Interest
  Expense

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  2.                                       Depreciation
  and amortization expense (including, without limitation, deferred financing
  costs and expenses)

  	
   

  	
  $

  
	
  3.                                       Income tax
  expense

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  4.
  Non-cash stock compensation expense

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  C.                                     EBITDA (line
  A plus line B.1 plus line B.2 plus line B.3 plus line B.4)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  D.                                    Capital
  Expenditures

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  E.                                      Adjusted
  EBITDA (line C minus line D)

  	
   

  	
  $

  



 


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


 


               o No, not
in compliance                                                                                                o Yes, in
compliance