Exhibit
10.4


NEITHER THESE SECURITIES NOR THE
SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.  THESE SECURITIES AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES, SUBJECT TO THE TERMS
OF THIS LEGEND AND THE SECURITIES ACT.


SATCON TECHNOLOGY CORPORATION


WARRANT B


Warrant B No. [  ]                                                                                                                                          Dated:  July 19, 2006


SatCon Technology Corporation, a Delaware corporation
(the “Company”), hereby certifies
that, for value received, [Name of Holder] or its registered assigns (the “Holder”), is entitled to purchase from the
Company (a) up to a total of [          ]
shares of common stock, $0.01 par value per share (the “Common Stock”), of the Company (each such
share, a “Warrant Share” and all
such shares, the “Warrant Shares”)
at an exercise price equal to $1.68 per share (as adjusted from time to time as
provided in Section 9, the “Exercise
Price”), and (b) only as part of and in connection with the purchase
of the Warrant Shares, warrants in the form attached to the Purchase Agreement
(as hereinafter defined) as Exhibit B-3 to acquire up to 0.50 shares of
Common Stock for each Warrant Share purchased (the “Additional Warrants”), at any time and from time to time from
and after the six month anniversary of the Closing Date and through and
including the 90th Trading Day following the later of (i) the
Effective Date, but not including the Effective Date and (ii) the six month
anniversary of the Closing Date (the “Expiration
Date”), and subject to the following terms and conditions.  This Warrant (this “Warrant”) is one of a series of similar
warrants issued pursuant to that certain Securities Purchase Agreement, dated
as of the date hereof, by and among the Company and the Purchasers identified
therein (the “Purchase Agreement”).  All such warrants are referred to herein,
collectively, as the “Warrants.”  Common Stock issuable upon exercise of the
Additional Warrants shall be known herein as the “Additional Warrant Shares”.









 



 


1.             Definitions.  In addition to the terms defined elsewhere in
this Warrant, capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Purchase Agreement.


2.             Registration
of Warrant.  The Company shall
register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes,
absent actual notice to the contrary.


3.             Registration
of Transfers.  The Company shall register
the assignment and transfer of any portion of this Warrant in the Warrant
Register, upon surrender of this Warrant, with the Form of Assignment attached
hereto on Annex B duly completed and signed, to the Company at its
address specified herein.  Upon any such
registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of
this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Holder. 
The acceptance of the New Warrant by the transferee thereof shall be
deemed the acceptance by such transferee of all of the rights and obligations
of a holder of a Warrant.


4.             Exercise
and Duration of Warrants.


(a)           This Warrant shall be exercisable by the registered Holder at
any time and from time to time on or after the six month anniversary of the
Closing Date to and including the Expiration Date.  At 6:30 P.M., New York City time on the
Expiration Date, the portion of this Warrant not exercised prior thereto shall
be and become void and of no value. Notwithstanding anything to the contrary
herein, the Expiration Date shall be extended for each day following the
Effective Date that the Registration Statement is not effective.


(b)           A Holder may exercise this Warrant by delivering to the
Company (i) an exercise notice, in the form attached hereto on Annex A
(the “Exercise
Notice”), appropriately
completed and duly signed, and (ii) payment of the Exercise Price for the
number of Warrant Shares and Additional Warrants as to which this Warrant is
being exercised, and the date such items are delivered to the Company (as determined
in accordance with the notice provisions hereof) is an “Exercise Date.”  The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder.  Execution and
delivery of the Exercise Notice shall have the same effect as cancellation of
the original Warrant and issuance of a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares and Additional Warrants.


5.             Delivery
of Warrant Shares and Additional Warrants.


(a)           Upon exercise of this Warrant, the Company shall promptly
(but in no event later than three Trading Days after the Exercise Date) issue
or cause to be issued and cause to be delivered to or upon the written order of
the Holder and in such name or names as the Holder may designate, a certificate
for the Warrant Shares and Additional Warrants issuable 



 2
 






 



 


upon
such exercise.  The Company shall cause
the certificate for the Warrant Shares to be issued free of restrictive legends
unless a registration statement covering the resale of the Warrant Shares and
naming the Holder as a selling stockholder thereunder is not then effective and
the Warrant Shares are not freely transferable without volume restrictions
pursuant to Rule 144 under the Securities Act. 
The Holder, or any Person so designated by the Holder to receive Warrant
Shares and Additional Warrants, shall be deemed to have become holder of record
of such Warrant Shares and Additional Warrants as of the Exercise Date.  The Company shall, upon request of the
Holder, use its best efforts to deliver Warrant Shares hereunder electronically
through the Depository Trust Corporation or another established clearing
corporation performing similar functions.


(b)           This Warrant is exercisable, either in its entirety or, from
time to time, for a portion of the number of Warrant Shares and Additional
Warrants.  Upon surrender of this Warrant
following one or more partial exercises, the Company shall issue or cause to be
issued, at its expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares and Additional Warrants.


(c)           In addition to any other rights available to a Holder, if the
Company fails to deliver to the Holder a certificate representing Warrant
Shares and Additional Warrants by the third Trading Day after exercise of this
Warrant in full compliance with Section 4(b), and if after such third Trading
Day the Holder purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares or Additional Warrant Shares that the Holder anticipated receiving from
the Company (a “Buy-In”), then the Company shall, within three
Trading Days after the Holder’s request and in the Holder’s discretion, either
(i) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock
so purchased (the “Buy-In
Price”), at which point the
Company’s obligation to deliver such certificate (and to issue such Common
Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the
Holder a certificate or certificates representing such Common Stock and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In
Price over the product of (A) such number of shares of Common Stock, times (B)
the Closing Price on the date of the event giving rise to the Company’s
obligation to deliver such certificate.


(d)           The Company’s obligations to issue and deliver Warrant Shares
and Additional Warrants in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares and Additional Warrants.  Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the
Warrant  as required pursuant to the
terms hereof.



 3
 






 



 


6.             Charges,
Taxes and Expenses.   Issuance and
delivery of certificates for shares of Common Stock and Additional Warrants
upon exercise of this Warrant shall be made without charge to the Holder for
any issue or transfer tax, withholding tax, transfer agent fee or other
incidental tax or expense in respect of the issuance of such certificates, all
of which taxes and expenses shall be paid by the Company; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for
Warrant Shares or Warrants in a name other than that of the Holder or an Affiliate
thereof.  The Holder shall be responsible
for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares and Additional Warrants
upon exercise hereof.


7.             Replacement
of Warrant.  If this Warrant is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation hereof, or in
lieu of and substitution for this Warrant, a New Warrant, but only upon receipt
of evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.


8.             Reservation
of Warrant Shares and Additional Warrant Shares.  The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant and
Additional Warrants as herein provided or in the Additional Warrant Shares upon
exercise of the Additional Warrants as provided in the Additional Warrants, the
number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant and the number of Additional Warrant Shares issuable
and deliverable upon the exercise of any Additional Warrants, free from
preemptive rights or any other contingent purchase rights of persons other than
the Holder (taking into account the adjustments and restrictions of Section
9).  The Company covenants that all
Warrant Shares and Additional Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, or the Additional Warrants, be duly and validly
authorized, issued and fully paid and nonassessable.  The Company will take all such action as may
be necessary to assure that such shares of Common Stock may be issued as
provided herein without violation of any applicable law or regulation, or of
any requirements of any securities exchange or automated quotation system upon
which the Common Stock may be listed.


9.             Certain
Adjustments.  The Exercise Price and
number of Warrant Shares issuable upon exercise of this Warrant are subject to
adjustment from time to time as set forth in this Section 9.  The exercise price and number of Additional
Warrant Shares issuable upon exercise of the Additional Warrants shall be
subject to adjustment from time to time as set forth in Section 9 of the
Additional Warrants.


(a)           Stock Dividends and Splits.  If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of




 4
 






 



 


shares
of Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event.  Any
adjustment made pursuant to clause (i) of this paragraph shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution, and any adjustment pursuant
to clause (ii) or (iii) of this paragraph shall become effective immediately
after the effective date of such subdivision or combination.


(b)           Pro Rata Distributions.  If the Company, at any time while this
Warrant is outstanding, distributes to holders of Common Stock (i) evidences of
its indebtedness, (ii) any security (other than a distribution of Common Stock
covered by the preceding paragraph), (iii) rights or warrants to subscribe
for or purchase any security, or (iv) any other asset (in each case, “Distributed Property”), then in each such case the Exercise Price
in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution shall be adjusted (effective
on such record date) to equal the product of such Exercise Price times a
fraction of which the denominator shall be the average of the Closing Prices
for the five Trading Days immediately prior to (but not including) such record
date and of which the numerator shall be such average less the then fair market
value of the Distributed Property distributed in respect of  one outstanding share of Common Stock, as
determined by the Company’s independent certified public accountants that
regularly examine the financial statements of the Company, (an “Appraiser”).  In
such event, the Holder, after receipt of the determination by the Appraiser,
shall have the right to select an additional appraiser (which shall be a
nationally recognized accounting firm), in which case such fair market value
shall be deemed to equal the average of the values determined by each of the Appraiser
and such appraiser.  As an alternative to
the foregoing adjustment to the Exercise Price, at the request of the Holder
delivered to the Company in writing before the 45th day after such record date,
the Company will deliver to such Holder, within five Trading Days after such
request (or, if later, on the effective date of such distribution), the
Distributed Property that such Holder would have been entitled to receive in
respect of the Warrant Shares for which this Warrant could have been exercised immediately
prior to such record date.  If such
Distributed Property is not delivered to a Holder pursuant to the preceding
sentence, then upon expiration of or any exercise of the Warrant that occurs
after such record date, such Holder shall remain entitled to receive, in
addition to the Warrant Shares otherwise issuable upon such exercise (if
applicable), such Distributed Property.


(c)           Fundamental Transactions.  If, at any time while this Warrant is
outstanding, (i) the Company effects any merger or consolidation of the Company
with or into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or another Person)
is completed pursuant to which holders of Common Stock are permitted to tender
or exchange their shares for other securities, cash or property, or (iv) the
Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (other than as a result of
a subdivision or combination of shares of Common Stock covered by Section 9(a)
above) (in any such case, a “Fundamental
Transaction”), then the
Holder shall have the right thereafter to receive, upon exercise of this
Warrant, the same amount and kind of securities, cash or property as it would
have been entitled to receive upon the occurrence of such Fundamental Transaction
if it had been, immediately prior to such 



 5
 






 



 


Fundamental
Transaction, the holder of the number of Warrant Shares then issuable upon
exercise in full of this Warrant (the “Alternate Consideration”).  The aggregate Exercise Price for this Warrant
will not be affected by any such Fundamental Transaction, but the Company shall
apportion such aggregate Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration.  If holders
of Common Stock are given any choice as to the securities, cash or property to
be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any exercise of
this Warrant following such Fundamental Transaction.  In the event of a Fundamental Transaction,
the Company or the successor or purchasing Person, as the case may be, shall
execute with the Holder a written agreement providing that:


(x)   this Warrant shall thereafter entitle the
Holder to purchase the Alternate Consideration in accordance with this section
9(c),


(y)  in the case of any such successor or
purchasing Person, upon such consolidation, merger, statutory exchange,
combination, sale or conveyance such successor or purchasing Person shall be
jointly and severally liable with the Company for the performance of all of the
Company’s obligations under this Warrant and the Purchase Agreement, and


(z)   if registration or qualification is required
under the Exchange Act or applicable state law for the public  resale by the Holder of shares of stock and
other securities so issuable upon exercise of this Warrant, such registration
or qualification shall be completed prior to such reclassification, change,
consolidation, merger, statutory exchange, combination or sale.


If,
in the case of any Fundamental Transaction, the Alternate Consideration
includes shares of stock, other securities, other property or assets of a
Person other than the Company or any such successor or purchasing Person, as
the case may be, in such Fundamental Transaction, then such written agreement
shall also be executed by such other Person and shall contain such additional
provisions to protect the interests of the Holder as the Board of Directors of
the Company shall reasonably consider necessary by reason of the
foregoing.  At the Holder’s request, any
successor to the Company or surviving entity in such Fundamental Transaction
shall issue to the Holder a new warrant consistent with the foregoing provisions
and evidencing the Holder’s right to purchase the Alternate Consideration for
the aggregate Exercise Price upon exercise thereof.  The terms of any agreement pursuant to which
a Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph
(c) and insuring that the Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. If any Fundamental Transaction constitutes or results in a Change
of Control, then at the request of the Holder delivered to the Company in
writing before the 45th day after such Fundamental Transaction, the Company (or
any such successor or surviving entity) will purchase the Warrant from the
Holder for a purchase price, payable in cash within five Trading Days after
such request (or, if later, on the effective date of the Fundamental
Transaction), equal to the Black-Scholes value of the remaining unexercised
portion of this Warrant on the date of such request.



 6
 






 



 


(d)           Subsequent Equity Sales.


(i)            For so long as this
Warrant is outstanding, the Company or any Subsidiary shall not issue
additional shares of Common Stock or rights, warrants, options or other securities
or debt convertible, exercisable or exchangeable for shares of Common Stock or
otherwise entitling any Person to acquire shares of Common Stock (collectively,
“Common Stock Equivalents”) at an effective price per share of Common
Stock (prior to deducting fees, commissions and other expenses related to such
issuance) (the “Effective
Price”) less than the
Conversion Price (as defined in the Notes) (as adjusted to such date) (a “Prohibited Issuance”).  For purposes of this paragraph, in connection
with any issuance of any Common Stock Equivalents, (A) the maximum number of
shares of Common Stock potentially issuable at any time upon conversion,
exercise or exchange of such Common Stock Equivalents (the “Deemed Number”) shall be deemed to be outstanding upon
issuance of such Common Stock Equivalents, (B) the Effective Price applicable
to such Common Stock shall equal the minimum dollar value of consideration
payable to the Company to purchase such Common Stock Equivalents and to
convert, exercise or exchange them into Common Stock (prior to deducting any
fees, commissions and other expenses related thereto), divided by the Deemed
Number, and (C) the actual issuance of Common Stock upon conversion, exercise
or exchange of such Common Stock Equivalents shall not be subject again to this
Section 9(d)(i).


(ii)           If, at any time while this Warrant is
outstanding, the Company or any Subsidiary issues Common Stock Equivalents with
an Effective Price or a number of underlying shares that floats or resets or
otherwise varies or is subject to adjustment based (directly or indirectly) on
market prices of the Common Stock (a “Floating Price Security”),
then for purposes of applying the preceding paragraph, whether Section
9(d)(i) has been violated will be determined separately each time such
adjustment occurs.


(iii)          In the event the Company breaches Section
9(d)(i), then at the request of the Holder delivered to the Company in
writing before the 45th day after such Prohibited Issuance, the Company (or any
such successor or surviving entity) will purchase this Warrant from the Holder
for a purchase price, payable in cash within five Trading Days after such
request, equal to the Black-Scholes value of the remaining unexercised portion
of this Warrant on the date of such request.


(iv)          Notwithstanding the foregoing, the
Company shall be permitted to issue Excluded Stock.


(e)           Number of Warrant Shares.  Simultaneously with any adjustment to the
Exercise Price pursuant to paragraphs (a) or (b) of this Section, the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased
number of Warrant Shares shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment.


(f)            Calculations.  All calculations under this Section 9
shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable.  The number of shares of
Common 



 7
 






 



 


Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such
shares shall be considered an issue or sale of Common Stock.


(g)           Notice of Adjustments.  Upon the occurrence of each adjustment
pursuant to this Section 9, the Company at its expense will promptly
compute such adjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment, including a statement of
the adjusted Exercise Price and adjusted number or type of Warrant Shares or
other securities issuable upon exercise of this Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in
detail the facts upon which such adjustment is based.  The Company will promptly deliver a copy of
each such certificate to the Holder within 10 Trading Days of the occurrence of
such adjustment.


(h)           Notice of Corporate Events.  If the Company  (i) declares a dividend or any other distribution
of cash, securities or other property in respect of its Common Stock, including
without limitation any granting of rights or warrants to subscribe for or
purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or
approves, enters into any agreement contemplating or solicits stockholder
approval for any Fundamental Transaction or (iii) authorizes the voluntary
dissolution, liquidation or winding up of the affairs of the Company, then the
Company shall deliver to the Holder a notice describing the material terms and
conditions of such transaction, at least 20 calendar days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction, and
the Company will take all steps reasonably necessary in order to insure that
the Holder is given the practical opportunity to exercise this Warrant prior to
such time so as to participate in or vote with respect to such transaction;
provided, however, that the failure to deliver such notice or any defect
therein shall not affect the validity of the corporate action required to be
described in such notice.


10.           Payment
of Exercise Price.  The Holder shall
pay the Exercise Price in cash in immediately available funds.


11.           Limitation
on Exercise.


(a)           Notwithstanding anything to the contrary
contained herein, the number of shares of
Common Stock that may be acquired by the Holder upon any exercise of this
Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the
total number of shares of Common Stock then beneficially owned by such Holder
and its Affiliates and any other Persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Section 13(d) of
the Exchange Act, does not exceed 4.999% 
(the “Threshold Percentage”) or 9.999% (the “Maximum Percentage”) of the total number of
issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise).  For
such purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder.  Each delivery of an Exercise
Notice hereunder will constitute a representation by the Holder that it has
evaluated the limitations set forth in this paragraph and determined that
issuance of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph.  The
Company’s 



 8
 






 



 


obligation to issue shares of Common Stock in excess of the limitation
referred to in this Section shall be suspended (and shall not terminate or
expire notwithstanding any contrary provisions hereof) until such time, if any,
as such shares of Common Stock may be issued in compliance with such
limitation.  By written notice to the
Company, the Holder shall have the right (x) at any time and from time to time
to reduce its Maximum Percentage immediately upon notice to the Company in the
event and only to the extent that Section 16 of the Exchange Act or the rules
promulgated thereunder (or any successor statute or rules) is changed to reduce
the beneficial ownership percentage threshold thereunder to a percentage less
than 9.999% and (y) at any time and from time to time, to waive the provisions
of this Section insofar as they relate to the Threshold Percentage or to
increase or decrease its Threshold Percentage (but not in excess of the Maximum
Percentage) unless the Holder shall have, by written instrument delivered to
the Company, irrevocably waived its rights to so increase or decrease its
Threshold Percentage, but (i) any such waiver, increase or decrease will not be
effective until the 61st day after such notice is delivered to the Company, and
(ii) any such waiver or increase or decrease will apply only to the Holder and
not to any other holder of Warrants.


(b)           Notwithstanding anything to the contrary
contained herein, the number of shares of
Common Stock that may be acquired by the Holder upon any exercise of this
Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the
total number of shares of Common Stock then beneficially owned by such Holder
and its Affiliates and any other Persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Section 13(d) of
the Exchange Act, does not exceed 19.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise).  For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder.


12.           Fractional
Shares.  The Company shall not be
required to issue or cause to be issued fractional Warrant Shares or Additional
Warrants to purchase fractional Additional Warrant Shares on the exercise of
this Warrant.  If any fraction of a
Warrant Share or if any Additional Warrant to purchase a fraction of an
Additional Warrant Share would, except for the provisions of this Section, be
issuable upon exercise of this Warrant, the number of Warrant Shares and/or
Additional Warrant Shares issuable upon exercise of the Additional Warrants, as
the case may be, to be issued will be rounded up to the nearest whole share or
right to purchase the nearest whole share, as the case may be.


13.           Notices.  Any and all notices or other communications
or deliveries hereunder (including without limitation any Exercise Notice)
shall be in writing and shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 6:30 p.m.
(New York City time) on a Trading Day, (ii) the next Trading Day after the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified in this Section on a day that is not a Trading
Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the
Trading Day following the date of mailing, if sent by a nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given.  The
address for such notices or communications shall be as set forth in the
Purchase Agreement.



 9
 






 



 


14.           Warrant
Agent.  The Company shall serve as
warrant agent under this Warrant.  Upon
30 days’ notice to the Holder, the Company may appoint a new warrant
agent.  Any corporation into which the
Company or any new warrant agent may be merged or any corporation resulting
from any consolidation to which the Company or any new warrant agent shall be a
party or any corporation to which the Company or any new warrant agent
transfers substantially all of its corporate trust or shareholders services
business shall be a successor warrant agent under this Warrant without any further
act.  Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be mailed (by
first class mail, postage prepaid) to the Holder at the Holder’s last address
as shown on the Warrant Register.


15.           Call
Right.


(a)           If following the Effective Date, the
Closing Prices for any 20 consecutive Trading Days exceeds 150% of the Exercise
Price (the “Threshold Price”, and
such 20 day period, the “Threshold Period”),
then the Company will have the right, but not obligation (the “Call Right”), on prior written notice in
accordance with Section 15(b) to the Holder, to require the Holder to exercise
any unexercised portion of this Warrant for which an Exercise Notice has not
yet been delivered (the “Call Amount”);
provided that the Call Right must be exercised within 20 Trading Days of the
last day of the Threshold Period.


(b)           To exercise this Call Right, the Company
shall deliver to the Holder an irrevocable written notice (a “Call Notice”), indicating the Call Amount.  The date that the Company delivers the Call
Notice to the Holders will be referred to as the “Call Date.” Within 15 Trading Days of receipt of the Call
Notice, the Holder shall exercise this Warrant for the entire Call Amount in
accordance with Section 4(b) above.  The
date on which the Call Amount is exercised is referred to herein as the “Forced Exercise Date”.  Any
unexercised portion of this Warrant to which the Call Notice does not pertain
(the “Remaining Portion”) will be unaffected by such Call Notice.  The Company covenants and agrees that it will
honor any Exercise Notice with respect to the Call Amount that are tendered
from the Call Date through and including 6:30 p.m. (New York City time) on the
Forced Exercise Date.


Notwithstanding anything to
the contrary set forth in this Warrant, the Company may not require the
cancellation of any unexercised Call Amount (and any Call Notice will be void),
unless from the beginning of the 20 consecutive Trading Days used to determine
whether the Common Stock has achieved the Threshold Price through the Forced
Exercise Date (the “Call
Period”) (i) the Closing
Prices for each Trading Day during such Call Period exceeds the Threshold
Price, (ii) the Company shall have honored in accordance with the terms of this
Warrant any Exercise Notice delivered by 6:30 p.m. (New York City time) on the
Forced Exercise Date, (iii) the Equity Conditions (as defined in the Notes) are
satisfied (or waived in writing by the applicable Holder) on each Trading Day
with respect to all Underlying Shares issuable upon exercise of the Call
Amount, and (iv) the average daily trading volume as reported on Bloomberg,
L.P. during such Call Period (determined by calculating the arithmetic average
of the daily trading volume for each Trading Day in such Call Period) is
greater than 100,000 shares.


(c)           Notwithstanding anything herein to the
contrary, (i) in connection with the Company’s exercise of a Call Right, the
Threshold Percentage limitation on exercise set forth in 



 10
 






 



 


Section 11 shall not apply and (ii) if after the Call Right is
exercised, the stated Expiration Date of this Warrant would occur prior to the
Forced Exercise Date, the “Expiration Date” hereof shall be extended to end of
the Forced Exercise Date solely to the extent necessary to enable this Warrant
to be exercised for the Call Amount on the Forced Exercise Date.


16.           Miscellaneous.


(a)           Subject to the restrictions on transfer
set forth on the first page hereof, this Warrant may be assigned by the Holder.
This Warrant may not be assigned by the Company except to a successor in the
event of a Fundamental Transaction. This Warrant shall be binding on and inure
to the benefit of the parties hereto and their respective successors and
assigns.  Subject to the preceding sentence,
nothing in this Warrant shall be construed to give to any Person other than the
Company and the Holder any legal or equitable right, remedy or cause of action
under this Warrant.  This Warrant may be
amended only in writing signed by the Company and the Holder and their
successors and assigns.


(b)           The Company will not, by amendment of
its governing documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary 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 action as may be
necessary or appropriate in order to protect the rights of the Holder against
impairment.  Without limiting the
generality of the foregoing, the Company (i) will not increase the par value of
any Warrant Shares or Additional Warrant Shares above the amount payable
therefor on such exercise, (ii) will take all such action as may be reasonably
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Warrant Shares or Additional Warrant Shares
on the exercise of this Warrant and the Additional Warrants, respectively, and
(iii) will not close its shareholder books or records in any manner which
interferes with the timely exercise of this Warrant.


(c)           GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. 
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND
INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT
IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.  EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING 



 11
 






 



 


CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN
ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.  THE COMPANY HEREBY WAIVES ALL RIGHTS TO A
TRIAL BY JURY.


(d)           The headings herein are for convenience
only, do not constitute a part of this Warrant and shall not be deemed to limit
or affect any of the provisions hereof.


(e)           In case any one or more of the
provisions of this Warrant shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions of this
Warrant shall not in any way be affected or impaired thereby and the parties
will attempt in good faith to agree upon a valid and enforceable provision
which shall be a commercially reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Warrant.


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]



 12
 






 



 


IN WITNESS WHEREOF, the
Company has caused this Warrant B to be duly executed by its authorized officer
as of the date first indicated above.


	
  

  	
  SATCON TECHNOLOGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: David B. Eisenhaure

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name: David E. O’Neil

  
	
   

  	
  Title: Vice President of Finance and Treasurer

  



 



 13














 


 


Annex A


FORM OF EXERCISE NOTICE


(To be executed by the Holder to exercise the right to
purchase shares of Common Stock under the foregoing Warrant)


To:  SatCon
Technology Corporation


The undersigned is the Holder of Warrant B No. _______
(the “Warrant”) issued by SatCon
Technology Corporation, a Delaware corporation (the “Company”).  Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.


1.                               The Warrant is currently
exercisable to purchase a total of ______________ Warrant Shares.


2.                               The undersigned Holder
hereby exercises its right to purchase _________________ Warrant Shares
pursuant to the Warrant and Additional Warrants exercisable for _______________
shares of Common Stock.


3.                               In satisfaction of the
Exercise Price, the holder shall pay the sum of $____________ to the Company in
accordance with the terms of the Warrant.


4.                               Pursuant to this exercise,
the Company shall deliver to the holder _______________ Warrant Shares and
Additional Warrants exercisable for _______________ shares of Common Stock in
accordance with the terms of the Warrant.


5.                               Following this exercise, the
Warrant shall be exercisable to purchase a total of _____________ Warrant
Shares and Additional Warrants exercisable for _____________ shares of Common
Stock.


	
  Dated: _________________, ____

  	
   

  	
  Name of Holder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print) 
  ___________________________

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  
  _____________________________

  
	
   

  	
   

  	
  Name: 
  ___________________________

  
	
   

  	
   

  	
  Title:  ____________________________

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must conform in all respects to name of
  holder as specified on the face of the Warrant)

  



 









 



 


Annex  B


FORM OF ASSIGNMENT


[To be completed and signed only upon transfer of
Warrant]


FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto ________________________________ the right
represented by the within Warrant to purchase 
____________ shares of Common Stock and warrants to purchase shares of
the Common Stock of SatCon Technology Corporation to which the within Warrant
relates and appoints ________________ attorney to transfer said right on the
books of SatCon Technology Corporation with full power of substitution in the
premises.


	
  Dated:  __________________, ____

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must conform in all respects to name of
  holder as specified on the face of the Warrant)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address of Transferee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In the presence
  of: