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                                                                   Exhibit 10.1



                    SECOND AMENDMENT TO FORBEARANCE AGREEMENT

         THIS SECOND AMENDMENT TO FORBEARANCE AGREEMENT (this "AGREEMENT") is
made this 11th day of February, 2003 by and among:

         SILICON VALLEY BANK (the "LENDER"), a bank organized under the laws of
         the State of California with its principal place of business at 3003
         Tasman Drive, Santa Clara, California and with a loan production office
         located at 2221 Washington Street, Suite 200, Newton, Massachusetts
         doing business under the name "Silicon Valley East";

         SATCON TECHNOLOGY CORPORATION, SATCON POWER SYSTEMS, INC., SATCON
         APPLIED TECHNOLOGY, INC., SATCON ELECTRONICS, INC., AND SATCON POWER
         SYSTEMS CANADA LTD. (individually and collectively, jointly and
         severally, the "BORROWER"), Delaware corporations (other than SatCon
         Power Systems Canada Ltd. which is organized under the laws of the
         Province of Ontario, Canada) with offices located at 161 First Street,
         Cambridge, Massachusetts;

                                   BACKGROUND

         Reference is made to the loan arrangement maintained between the Lender
and the Borrower, evidenced by, among other things, a certain Loan and Security
Agreement dated as of September 13, 2002 (the "LOAN AGREEMENT"), as affected by
a certain Forbearance Agreement entered into by the Lender and the Borrower
dated as of December 19, 2002, as amended on January 17, 2003 (as amended, the
"FORBEARANCE AGREEMENT"). Hereinafter, the Loan Agreement, the Forbearance
Agreement and all documents, instruments, and agreements incidental thereto
shall be referred to collectively as the "LOAN DOCUMENTS". Capitalized terms
used in this Agreement and not otherwise defined herein shall have the meanings
as defined in the Forbearance Agreement.

         The Borrower has requested that the Lender revise certain terms of the
Forbearance Agreement relating to Termination Events and Lender has agreed, but
only upon the terms and conditions set forth herein.

         Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed by and between
the Lender and the Borrower, as follows:

                         ACKNOWLEDGMENT OF INDEBTEDNESS

         1.       The Borrower hereby acknowledges and agrees that it is
                  unconditionally liable to the Lender for the following amounts
                  in accordance with the terms of the Loan Documents and this
                  Agreement, as of February 11, 2003:

                  (a)      Revolving Loans:

                                  Principal:                 $196,991.49


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                  (b)      For any additional principal advances and all
                           interest heretofore or hereafter accruing, and all
                           fees, penalties, costs, expenses, and costs of
                           collection (including attorneys' fees and expenses)
                           heretofore or hereafter incurred by the Lender in
                           connection with the Loan Documents.

                  (c)      Hereinafter all amounts due as set forth in this
                           Paragraph 1 and all other amounts payable pursuant to
                           the terms of the Loan Documents, shall be referred to
                           collectively as the "OBLIGATIONS".

                                WAIVER OF CLAIMS

         2.       The Borrower hereby acknowledges and agrees that it has no
                  offsets, defenses, claims, or counterclaims against the
                  Lender, or its officers, directors, employees, attorneys,
                  representatives, parent, affiliates, predecessors, successors,
                  or assigns with respect to the Loan Documents, the
                  Obligations, or otherwise, and that if the Borrower now has,
                  or ever did have, any offsets, defenses, claims, or
                  counterclaims against the Lender, or its officers, directors,
                  employees, attorneys, representatives, parent, affiliates,
                  predecessors, successors, or assigns, whether known or
                  unknown, at law or in equity, from the beginning of the world
                  through this date and through the time of execution of this
                  Agreement, all of them are hereby expressly WAIVED, and the
                  Borrower hereby RELEASES the Lender, and its officers,
                  directors, employees, attorneys, representatives, parent,
                  affiliates, predecessors, successors, and assigns from any
                  liability therefor.

                         RATIFICATION OF LOAN DOCUMENTS

         3.       The Borrower hereby ratifies, confirms, and reaffirms all and
                  singular the terms and conditions of the Loan Documents. The
                  Borrower further acknowledges and agrees that, except as
                  specifically modified in this Agreement, all terms and
                  conditions of the Loan Documents shall remain in full force
                  and effect including, without limitation, the requirement of
                  the payment of the Additional Fees set forth in Section 11 of
                  the Forbearance Agreement.

                       AMENDMENTS TO FORBEARANCE AGREEMENT

         4.       The Forbearance Agreement is hereby amended as follows:

                           (i) Section 5 of the Forbearance Agreement is hereby
                           amended by deleting same in its entirety and
                           replacing it with the following:

                           "The Borrower acknowledges and agrees that during the
                           term of this Forbearance Agreement, the Lender shall
                           have no obligation to make any further Loans or other
                           advances to the Borrower. Notwithstanding the
                           foregoing, the Lender shall, on or about February 11,
                           2003, provide a Loan to the Borrower in the amount of
                           $245,000.00. The making of such Loan shall not
                           constitute a waiver of any Event of Default, whether
                           now existing or hereafter arising, nor shall the
                           making of such Loan obligate the Lender to make any
                           future Loans or advances to the Borrower."


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                           (ii) Section 11 (ii) of the Forbearance Agreement is
                           hereby amended by deleting the text "January 25,
                           2003" set forth therein the first time it appears and
                           substituting the text "February 15, 2003" therefor.

                           (iii) Section 11(ii) of the Forbearance Agreement is
                           hereby further amended to provide for the Additional
                           Fees in the amount of $10,000.00 currently payable on
                           Monday of each week to be paid on Thursday of each
                           week from and after the date hereof.

                           (iv) Section 12 (a) of the Forbearance Agreement is
                           hereby amended by deleting same in its entirety and
                           substituting the text "February 15, 2003" therefor.

                                ENTIRE AGREEMENT

         5.       This Agreement shall be binding upon the Borrower and the
                  Borrower's respective employees, representatives, successors,
                  and assigns, and shall inure to the benefit of the parties and
                  their successors and assigns. This Agreement and all
                  documents, instruments, and agreements executed in connection
                  herewith incorporate all of the discussions and negotiations
                  between the Borrower and the Lender, either expressed or
                  implied, concerning the matters included herein and in such
                  other documents, instruments and agreements, any statute,
                  custom, or usage to the contrary notwithstanding.

                            CONSTRUCTION OF AGREEMENT

         6.       In connection with the interpretation of this Agreement and
                  all other documents, instruments, and agreements incidental
                  hereto:

                  (a)      All rights and obligations hereunder and thereunder,
                           including matters of construction, validity, and
                           performance, shall be governed by and construed in
                           accordance with the law of the Commonwealth of
                           Massachusetts and are intended to take effect as
                           sealed instruments.

                  (b)      In the event of any inconsistency between the
                           provisions of this Agreement and any other document,
                           instrument, or agreement entered into by and between
                           the Lender and the Borrower, the provisions of this
                           Agreement shall govern and control.


                         ILLEGALITY OR UNENFORCEABILITY

         7.       Any determination that any provision or application of this
                  Agreement is invalid, illegal, or unenforceable in any
                  respect, or in any instance, shall not affect the validity,
                  legality, or enforceability of any such provision in any other
                  instance, or the validity, legality, or enforceability of any
                  other provision of this Agreement.


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                               INFORMED EXECUTION

         8.       The Borrower warrants and represents to the Lender that the
                  Borrower has read and understands all of the terms and
                  conditions of this Agreement, intends to be bound by the terms
                  and conditions of this Agreement, and is executing this
                  Agreement freely and voluntarily, without duress, after
                  consultation with independent counsel of its own selection.

         IN WITNESS WHEREOF, this Agreement has been executed as of the 11th day
of February, 2003.


                                                "BORROWER"

                                                SATCON TECHNOLOGY CORPORATION

                                                By: /s/ RALPH M. NORWOOD
                                                   ----------------------------
                                                    Title: VP & CFO


                                                SATCON POWER SYSTEMS, INC.

                                                By: /s/ RALPH M. NORWOOD
                                                    ---------------------------
                                                    Title: VP & CFO


                                                SATCON APPLIED TECHNOLOGY, INC.

                                                By: /s/ RALPH M. NORWOOD
                                                    ---------------------------
                                                    Title: VP & CFO


                                                SATCON ELECTRONICS, INC.

                                                By: /s/ RALPH M. NORWOOD
                                                    ---------------------------
                                                    Title: VP & CFO


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                                                SATCON POWER SYSTEMS CANADA
                                                LTD

                                                By: /s/ RALPH M. NORWOOD
                                                    ---------------------------
                                                    Title: VP & CFO


                                                "LENDER"

                                                 SILICON VALLEY BANK

                                                 By: /s/ JOHN K. PECK
                                                     --------------------------
                                                     Title: VICE PRESIDENT


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