EXHIBIT 10.1


 


FOURTH AMENDMENT TO AMENDED AND RESTATED

ACCOUNTS RECEIVABLE
FINANCING AGREEMENT


 


This Fourth Amendment (the
“Fourth Amendment”) to the Amended and Restated Accounts Receivable Financing
Agreement is entered into as of September 10, 2003, by and among (i) SILICON VALLEY BANK, a California-chartered
bank, 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,
doing business under the name “Silicon Valley East” (“Bank”) and (ii) SATCON TECHNOLOGY CORPORATION, a Delaware
corporation with offices located at 161 First Street, Cambridge, Massachusetts
(FAX 617-661-3373); SATCON POWER SYSTEMS,
INC., Delaware corporation with offices located at 161 First Street,
Cambridge, Massachusetts; SATCON APPLIED
TECHNOLOGY, INC., a Delaware corporation with offices located at 161
First Street, Cambridge, Massachusetts;
SATCON ELECTRONICS, INC., a Delaware corporation with offices
located at 161 First Street, Cambridge, Massachusetts; and SATCON POWER SYSTEMS CANADA LTD. a
corporation organized under the laws of the Province of Ontario, Canada with
offices located at 161 First Street, Cambridge, Massachusetts (individually and
collectively, jointly and severally, “Borrower”).


 


1.                                       DESCRIPTION
OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and
obligations which may be owing by Borrower to Bank, Borrower is indebted to
Bank pursuant to a certain Amended and Restated Accounts Receivable Financing
Agreement dated as of April 4, 2003, as amended by a certain First Amendment to
Amended and Restated Accounts Receivable Financing Agreement dated as of June
24, 2003, as further amended by a certain Second Amendment to Amended and
Restated Accounts Receivable Financing Agreement dated as of August 11, 2003,
and as further amended by a certain Third Amendment to Amended and Restated
Accounts Receivable Financing Agreement dated as of September 2, 2003 (as
amended from time to time, the “Loan Agreement”). Capitalized terms used but
not otherwise defined herein shall have the same meaning as in the Loan
Agreement.


 


Hereinafter, all indebtedness and obligations
owing by Borrower to Bank shall be referred to as the “Obligations”.


 


2.                                       DESCRIPTION
OF COLLATERAL.  Repayment of the
Obligations is secured by the Collateral as described in the Loan Agreement
(together with any other collateral security granted to Bank, the “Security
Documents”).


 


Hereinafter, the Security Documents, together
with all other documents evidencing or securing the Obligations 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 definitions appearing
in Section 1, thereof:


 


““Capitalization Event” is the issuance by Borrower of equity or
subordinated debt after the date hereof to investors acceptable to Bank
resulting in the receipt of net proceeds to Borrower of at least Eight Hundred
Thousand Dollars ($800,000.00) in cash.


 


“Facility Amount” is Five Million Dollars ($5,000,000.00).”


 


and inserting in lieu
thereof the following:


 


““Capitalization Event No. 1” is, after September 8, 2003, the
issuance by Borrower of equity or subordinated debt to investors acceptable to
Bank


 

















 


resulting in the receipt of
net proceeds to Borrower of at least Seven Hundred Thousand Dollars
($700,000.00) in cash.


 


“Facility Amount” is Five Million Dollars ($5,000,000.00),
provided, however, than until the occurrence of each of Capitalization Event
No. 1 and Capitalization Event No. 2, and provided that no Event of Default has
occurred, the maximum Facility Amount shall be Three Million One Hundred Twenty
Five Thousand Dollars ($3,125,000.00).”


 


2.                                       The
Loan Agreement shall be amended by inserting the following definition, in
alphabetical order, in Section 1, thereof:


 


““Capitalization Event No. 2” is, after the occurrence of
Capitalization Event No. 1, the issuance by Borrower of equity or subordinated
debt to investors acceptable to Bank, or the sale of assets by Borrower
(provided such sale of assets is acceptable to Bank), resulting in the receipt
of net proceeds to Borrower of at least One Million Dollars ($1,000,000.00) in
cash.”


 


3.                                       The
Loan Agreement shall be amended by deleting the following text appearing in
Section 3.4, thereof:


 


“On each Reconciliation Day,
Borrower will pay to Bank a Collateral Handling Fee, equal to 0.45% per month
of the average daily Financed Receivable Balance outstanding during the
applicable Reconciliation Period.”


 


and inserting in lieu
thereof the following:


 


“On each Reconciliation Day,
Borrower will pay to Bank a Collateral Handling Fee, equal to: (a) 0.55%  per month of the average daily Financed
Receivable Balance outstanding during the applicable Reconciliation Period,
prior the occurrence of Capitalization Event No. 1 and Capitalization Event No.
2, and (b) 0.45% per month of the average daily Financed Receivable Balance outstanding
during the applicable Reconciliation Period, after the occurrence of
Capitalization Event No. 1 and Capitalization Event No. 2.”


 


4.                                       The
Loan Agreement shall be amended by deleting the following text appearing in
Section 6.3(M), thereof:


 


“(M)                      Maintain at all times an Adjusted Tangible
Net Worth of Nine Million Dollars ($9,000,000.00).”


 


and inserting in lieu
thereof the following:


 


“(M)                      Maintain at all times, to be tested monthly,
an Adjusted Tangible Net Worth equal to or greater than the aggregate of:
(a)(i) Four Million Five Hundred Thousand Dollars ($4,500,000.00) as of the
month ended August 31,  2003; (ii) Four
Million Eight Hundred Thousand Dollars ($4,800,000.00) as of the month ending
September 30, 2003; (iii) Three Million Seven Hundred Thousand Dollars
($3,700,000.00) as of the month ending October 31, 2003; (iv) Three Million Six
Hundred Thousand Dollars ($3,600,000.00) as of the month ending November 30,
2003; (v) Four Million Seven Hundred Thousand Dollars ($4,700,000.00) as of the
month ending December 31, 2003; (vi) Three Million Six Hundred Thousand Dollars
($3,600,000.00) as of the month ending January 31, 2004; (vii) Three Million
Five Hundred Thousand Dollars ($3,500,000.00) as of the month ending February
28, 2004 and for each month


 


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thereafter, plus (b) 100% of
the amount of proceeds received by Borrower in connection with any issuance of
equity or subordinated debt, including Capitalization Event No. 1 and
Capitalization Event No. 2, minus (c) a maximum of Seven Hundred Thousand
Dollars ($700,000.00) in past and current expenses approved by the Bank which
have been netted out of the H.C. Wainwright equity/sub debt financing upon the
closing of same.”


 


5.                                       The
Loan Agreement shall be amended by deleting the following text appearing in
Section 6.3(N), thereof:


 


“(N)                         Cause a Capitalization Event to occur on or
before July 31, 2003.”


 


and inserting in lieu
thereof the following:


 


“(N)                         (i) Cause Capitalization Event No. 1 to occur
on or before September 10, 2003, and (ii) Cause Capitalization Event No. 2 to
occur on or before October 10, 2003.”


 


B.                                     Waivers.


 


1.                                       Bank
hereby waives Borrower’s existing default under the Loan Agreement by virtue of
Borrower’s failure to comply with the financial covenant set forth is Section
6.3(M) thereof as of the month ending July 31, 2003.  Bank’s waiver of Borrower’s compliance of said affirmative
covenant shall apply only to the foregoing specific period.


 


4.                                       FEES.  Borrower shall pay to Bank a modification
fee equal to Seven Thousand Five Hundred Dollars ($7,500.00), which fee shall
be due on the date hereof and shall be deemed fully earned as of the date
hereof.  The Borrower shall also
reimburse Bank for all legal fees and expenses incurred in connection with this
amendment to the Existing Loan Documents.


 


5.                                       RATIFICATION
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT.  Borrower hereby ratifies, confirms and reaffirms, all and
singular, the terms and conditions of a certain Intellectual Property Security
Agreement dated as of December 19, 2002 between Borrower and Bank, and
acknowledges, confirms and agrees that said Intellectual Property Security
Agreement contains an accurate and complete listing of all
Intellectual Property Collateral as defined in said Intellectual Property
Security Agreement, shall remain in full force and effect.


 


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


 


7.                                       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.


 


8.                                       NO
DEFENSES OF BORROWER.  Borrower
hereby acknowledges and agrees that 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.


 


9.                                       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 Fourth Amendment, 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 Fourth Amendment in no way shall obligate
Bank to make any future modifications to the Obligations.  Nothing in this Fourth Amendment shall
constitute a satisfaction of the Obligations. 
It is the


 


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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 Fourth Amendment.


 


10.                                 COUNTERSIGNATURE.  This Fourth Amendment shall become effective
only when it shall have been executed by Borrower and Bank (provided, however,
in no event shall this Fourth Amendment become effective until signed by an
officer of Bank in California).


 


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This Fourth Amendment is
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first written above.


 


 


	
  BORROWER:

  
	
  SATCON TECHNOLOGY
  CORPORATION

  
	
   

  
	
  By 

  	
  /s/Ralph M. Norwood

  	
   

  
	
   

  
	
  Name:

  	
  Ralph M. Norwood

  	
   

  
	
   

  
	
  Title

  	
  VP & CFO

  	
   

  
	
   

  
	
   

  
	
  SATCON POWER SYSTEMS, INC.

  
	
   

  
	
   

  
	
  By

  	
  /s/Ralph M. Norwood

  	
   

  
	
   

  
	
  Name:

  	
  Ralph M. Norwood

  	
   

  
	
   

  
	
  Title

  	
  VP & CFO

  	
   

  
	
   

  
	
  SATCON APPLIED TECHNOLOGY,
  INC.

  
	
   

  
	
  By

  	
  /s/Ralph M. Norwood

  	
   

  
	
   

  
	
  Name:

  	
  Ralph M. Norwood

  	
   

  
	
   

  
	
  Title

  	
  VP & CFO

  	
   

  
	
   

  
	
   

  
	
  SATCON ELECTRONICS, INC.

  
	
   

  
	
   

  
	
  By 

  	
  /s/Ralph M. Norwood

  	
   

  
	
   

  
	
  Name:

  	
  Ralph M. Norwood

  	
   

  
	
   

  
	
  Title

  	
  VP & CFO

  	
   

  
	
   

  
	
   

  
	
  SATCON POWER SYSTEMS
  CANADA LTD.

  
	
   

  
	
   

  
	
  By

  	
  /s/Ralph M. Norwood

  	
   

  
	
   

  
	
  Name:

  	
  Ralph M. Norwood

  	
   

  
	
   

  
	
  Title

  	
  VP & CFO

  	
   

  
														



 


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  BANK:

  
	
  SILICON VALLEY BANK

  
	
   

  
	
   

  
	
  By

  	
  /s/John K. Peck

  	
   

  
	
   

  
	
  Title 

  	
  Vice President

  	
   

  
				



 


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