Document:

Exhibit 10.2

 

SECOND AMENDMENT

 

TO THE

 

SATCON TECHNOLOGY CORPORATION

 

2010 EMPLOYEE STOCK PURCHASE PLAN

 

WHEREAS, Satcon Technology Corporation, a Delaware corporation (the “Company”), adopted the Satcon Technology Corporation 2010 Employee Stock Purchase Plan (the “Plan”); and

 

WHEREAS, pursuant to the Section 16 of the Plan, the Committee (as that term is defined in the Plan) reserved the right to amend the Plan; and

 

WHEREAS, pursuant to Section 14(b) of the Plan, if the outstanding shares of the Company’s common stock are decreased as a result of a reverse stock split, the Committee shall make appropriate adjustments in the number and/or kind of shares, and the per-share option price thereof, which may be issued in the aggregate and to any Participant (as that term is defined in the Plan) upon exercise of options granted under the Plan; and

 

WHEREAS, on July 3, 2012, the Company’s Board of Directors approved a reverse stock split on a 1-for-8 exchange ratio, effective on July 19, 2012; and

 

WHEREAS, the Company now wishes to amend the Plan to increase the number of shares that may be purchased by a Participant during any Exercise Period (as that term is defined in the Plan), to narrow the circumstances under which the Plan may be terminated, and to make appropriate adjustments to the Plan so that references under the Plan to a certain number of shares of the Company’s common stock reflect the 8-for-1 reverse stock split of the Company’s common stock.

 

NOW THEREFORE, the Plan is hereby amended as follows:

 

1.                                      Section 7(a) of the Plan is hereby amended and restated, in its entirety, to read as follows, effective August 15, 2012:

 

“(a)                           Shares of Common Stock Subject to Option.  On each Offering Date beginning on or after August 15, 2012, subject to the limitations set forth in Section 7(d) and this Section 7(a), a Participant shall be granted an option to purchase on each subsequent Exercise Date during the Offering Period (at the Exercise Price determined as provided in Section 7(b) below) up to a number of shares of Common Stock determined by dividing such Participant’s Plan Contributions accumulated prior to such Exercise Date and retained in the Participant’s account as of such Exercise Date by the Exercise Price; provided, that the maximum number of shares a Participant may purchase during any

 

 

Exercise Period shall be 2,500 shares.  If a new Offering Period does not begin on August 15, 2012 pursuant to Section 4(b) of the Plan, all Participants who were granted options on May 15, 2012 shall be granted an additional option on August 15, 2012 to purchase up to 2,187.50 shares (so that the total number of shares that may be purchased shall be up to 2,500 shares) on each subsequent Exercise Date during the Offering Period that began on May 15, 2012 (at the Exercise Price determined as provided in Section 7(b) below), subject to the limitations set forth in Section 7(d) hereof.”(1)

 

2.                                      The first sentence of Section 14(a) of the Plan is hereby amended and restated, in its entirety, to read as follows, effective July 19, 2012:

 

“Subject to adjustment as provided in Section 14(b) below, the maximum number of shares of the Company’s Common Stock that shall be made available for sale under the Plan shall be 250,000 shares, plus an automatic annual increase on each anniversary of the Plan’s effective date equal to the lesser of (i) 250,000 shares, (ii) 3% of all shares of Common Stock outstanding on the last day of the immediately preceding fiscal year, or (iii) a lesser amount determined by the Board.” (2)

 

3.                                      A new paragraph is hereby added to Section 16(b) of the Plan, to read as follows, effective August 15, 2012:

 

“If, in the event Participants become entitled to purchase a number of shares greater than the number of reserved shares remaining available for purchase under the Plan on an Exercise Date, the reserved shares remaining as of such Exercise Date shall be sold to Participants on a pro rata basis, based on the relative value of their cash account balances in the Plan as of such Exercise Date.  In addition, the Plan shall be suspended immediately following such Exercise Date until additional shares of the Company’s Common Stock shall be made available for sale under the Plan pursuant to Section 14(a) hereof; provided that the Board or Committee provides notice to the Participants at least 20 business days prior to the date of termination of the suspension period.”

 

4.                                      Section 16(c)(i) of the Plan and the last paragraph in Section 16(c) of the Plan are hereby deleted in their entirety, effective August 15, 2012.

 

(1)  Prior to this Amendment, the Plan was drafted to permit Participants to purchase up to 2,500 shares per Exercise Period.  This maximum would be adjusted downward to 312.5 as a result of the 1-for-8 reverse stock split effective July 17, 2012.  Thus, the Amendment increases this maximum to 2,500 shares (which would have been 20,000 shares pre-reverse split).  In addition, the new grant of an option to purchase up to an additional 2,187.50 shares if a new Offering Period does not begin on August 15, 2012, is intended to give existing Participants an option to purchase up to a total of 2,500 shares, when combined with their existing option to purchase up to 312.5 shares granted on May 15, 2012 (as adjusted because of the 1-for-8 reverse stock split).

 

(2)  This provision is being amended to adjust downwards the maximum number of shares available under the Plan, and the amount subject to the evergreen provision, to reflect the 1-for-8 reverse stock split.  The adjusted amounts are otherwise consistent with the original amounts of 2,000,000 set forth in the Plan document prior to this Amendment.

 

 

5.                                      All other provisions of the Plan remain unchanged and in full force and effect.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the Company has executed this Amendment as of July 16, 2012.

 

 

	
 
    	
Satcon   Technology Corporation, a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   Daniel Gladkowski
    
	
 
    	
Title:   VP Administration & SecretaryEXHIBIT 10.4

 

 

June 27, 2012

 

Mr. Aaron Gomolak

Chief Financial Officer

Satcon Technology Corporation

25 Drydock Avenue

Boston, MA 02210

 

Dear Aaron,

 

In response to our ongoing dialogue re: the company’s failure to maintain the required liquidity levels and the resulting and ongoing Liquidity Event, and SVB’s desire to reduce, then eliminate, the reliance upon inventory in the borrowing base and to better align the terms of our agreement with the current and prospective financial condition of the company, we outline below the proposed terms under which SVB wishes to proceed.  In our view, these terms represent meaningful accommodations on the part of SVB as to loan structure and pricing, particularly in light of the current and forecasted financial condition of the Company.

 

Since the initial Liquidity Event, SVB has relied upon good faith negotiations by and between SVB and the Company on which to grant interim funding accommodations notwithstanding the ongoing default status.  We are unwilling to do so again absent a firm commitment by the company to move forward with the terms as outlined.

 

Noting our ongoing concerns regarding off-plan performance and its impact on the company’s liquidity, we remain convinced of the importance of the company tapping available outside sources for near term additional liquidity.  The terms below address those very concerns and present for you two options, both of which address a limited duration reduced Liquidity threshold.  We agree with your conclusion that managing to a monthly operating covenant, given the more quarterly focused approach the company takes in managing its operations, is quite challenging and may not provide the Bank with the key, real-time metric that is telling of the company’s overall performance and underlying risk profile.  Consequently, as you will see below, we propose to move from a monthly financial covenant measurement to a single liquidity covenant.

 

Below are the terms for the proposed Amendment to the Amended and Restated Credit Agreement (the “Credit Agreement”) dated April 22, 2011 by and Satcon Technology and Corporation and Silicon Valley Bank.

 

	
Borrower:
    	
 
    	
Satcon   Technology Corporation, and other Satcon entities to be determined   (collectively, “Borrower”).
    
	
 
    	
 
    	
 
    
	
Administrative   Agent: 
    	
 
    	
Silicon Valley Bank (“SVB”, or “Agent”). 
    
	
 
    	
 
    	
 
    
	
Lender:
    	
 
    	
SVB and a financial institution(s) acceptable   to the Agent (together with SVB, the “Lenders”).
    
	
 
    	
 
    	
 
    
	
Facility   Size/Structure:
    	
 
    	
$25,000,000, reduced from $35,000,000 -Revolving   Credit Facility. The accordion feature will be terminated with this   Amendment.
    

 

	
275   Grove St., Ste 2-200
    	
TEL   617.796-6928
    	
CONFIDENTIAL
    
	
Newton,   MA
    	
koconnor@svb.com
    	
 
    
	
02466   USA
    	
 
    	
 
    

 

1

 

	
 
    	
 
    	
$10 million sublimit   for the issuance of standby letters of credit (each a “Letter of Credit”)   — no change
    
	
 
    	
 
    	
 
    
	
Purpose:
    	
 
    	
For   ongoing working capital needs (including issuance of Letters of Credit under   the Letter of Credit Sublimit and to support FX activities).
    
	
 
    	
 
    	
 
    
	
Maturity:
    	
 
    	
4/30/2013   — no change
    
	
 
    	
 
    	
 
    
	
Availability:
    	
 
    	
Revolving   Credit Facility: Loans under the Revolving Credit Facility   may be made on a revolving basis up to the full amount of the Revolving   Credit Facility capped at $25,000,000. 
    
    Borrowing Formula: - Change to   existing terms as follows: 
    
   Option #1: 
   Inventory sublimit — immediately reduced to $5,500,000, and further to zero   as of 12/31/2012. 
    
   Option #2: 
    
   Effective immediately upon acceptance of this term sheet (to be incorporated   with any and all future borrowing requests) Inventory sublimit shall be   reduced to zero (e.g. inventory shall be removed from the Borrowing Base and   no advances shall be allowed in reliance thereon).
    
	
 
    	
 
    	
 
    
	
Security:
    	
 
    	
No   Change.
    
	
 
    	
 
    	
 
    
	
Collateral Field Exams:
    	
 
    	
No   Change.
    

 

2

 

	
Interest   Rate:
    	
 
    	
 
    	
 
    	
Applicable
    	
 
    	
 
    
	
 
    	
 
    	
Liquidity (*)
    	
 
    	
Margin
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
OPTION 1:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
> = $35,000,000
    	
+
    	
0.50
    	
%
    	
 
    
	
 
    	
 
    	
< $35,000,000 but > = $20,000,000 
    	
+
    	
1.00
    	
%
    	
 
    
	
 
    	
 
    	
< $20,000,000 
    	
+
    	
2.00
    	
%
    	
 
    
	
 
    	
 
    	
< $10,000,000 
    	
+
    	
3.00
    	
%
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
OPTION 2:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
> = $35,000,000
    	
+
    	
0.50
    	
%
    	
 
    
	
 
    	
 
    	
< $35,000,000 but > = $20,000,000 
    	
+
    	
1.00
    	
%
    	
 
    
	
 
    	
 
    	
< $20,000,000 
    	
+
    	
2.00
    	
%
    	
 
    
	
 
    	
 
    	
< $10,000,000 
    	
+
    	
4.00
    	
%
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	    

    
	
 
    	
 
    	
(*)   As   defined in the Credit Agreement, but for these purposes only, measured for   the prior three months, using month end reporting package information.  Rate will be adjusted (as necessary) as of   the close date, and thereafter, on the 10th business day following receipt of   Compliance Certificate indicating rate change trigger, and such rate will be   retroactive to the 1st day of the month following the reporting period   denoted on the Compliance Certificate.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Administrative Agency Fee: 
    	
 
    	
No   Change 
    
	
 
    	
 
    	
 
    
	
Accommodation Fee:
    	
 
    	
The   Borrower shall have the following options: 

 

1.              $200,000   earned at closing, payable $100,000 at close and $100,000 payable at the   earlier of a) default, b) 12/15/2012, c) the date on which the Borrower   consummates a new equity or subordinated debt raise, or d) any transaction   that results in a change in control; or, 

2.              $75,000   earned and payable in cash at closing, plus the number of equivalent share   value warrants that equates to $200,000, based upon a price equivalent to the   average closing date price for the five trading days prior to amendment   close. Form of warrant shall be SVB’s standard form warrant and shall   include anti-dilution and other language such that the warrants are not   adversely affected by any contemplated reverse stock split.
    
	
 
    	
 
    	
 
    
	
Unused Line Fee:
    	
 
    	
0.375%.   No change.
    
	
 
    	
 
    	
 
    
	
Expenses:
    	
 
    	
Borrower   responsible for all costs and expenses related to this transaction.
    
	
 
    	
 
    	
 
    
	
Other Terms & Conditions: 
    	
 
    	
The   loan documentation would contain representations and warranties, covenants,   events of default, and other provisions acceptable to Lender, including the   following: 
    
									

 

3

 

	
Financial Covenants: 
    	
 
    	
Liquidity   (at all times): Borrower shall maintain minimum Unrestricted Cash on   deposit at SVB plus unused line availability (at all times) as follows: 
    
   Option #1: 

Maintain   at least $5,000,000 of Liquidity at all times through 7/31/2012 and   $15,000,000 thereafter. 

Liquidity   Report, as defined in the Credit Agreement shall be   submitted weekly, with each borrowing request, and with the month end   reporting package, or as requested by SVB. 
    
   Option #2 
    
   Effective with acceptance of this term sheet, and continuing through to and   including 9/14/2012, the required minimum Liquidity shall be zero, and   effective 9/15/2012, the requirement shall increase to $15,000,000 and   continue at that level through loan maturity. 
    
    Liquidity Report, as defined in the   Credit Agreement shall be submitted weekly, with each borrowing request, and   with the month end reporting package, or as requested by SVB. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
No   change other than: 
    
	
 
    	
 
    	
 
    
	
Reporting :
    	
 
    	
1.              Transaction   Reports (with supporting documentation) shall be delivered (i) with each   borrowing request (required 2 day advance notice of borrowing) and   (ii) with the required monthly reporting package, calculated as of month   end. 

 

2.              Submission of   Board approved 2013 Plan by 1/31/2013.
    
	
 
    	
 
    	
 
    
	
Other:
    	
 
    	
Elimination   of the Liquidity Trigger, and other financial covenants and in place thereof,   shall be included the revised Minimum Liquidity Covenant as described above.
    

 

This term sheet is submitted for discussion purposes only and any changes to the existing Credit Agreement shall require formal credit approval by SVB, and the execution of satisfactory documentation.

 

4

 

If the basic terms and conditions described above are acceptable, please so indicate by an affirmative selection of Option #1 or Option #2, and return a signed copy of this term sheet to the attention of the undersigned no later than 5:00 PM Thursday, June 28, 2012.  As noted above, SVB’s willingness to continue funding given the inability to comply with the existing Liquidity Trigger is conditioned upon receipt of an accepted term sheet. All rights afforded the Bank under the existing Loan Documents remain unchanged and binding as they exist today.

 

Again, we look forward to hearing from you re: the proposed terms.

 

Very Truly Yours,

 

SILICON VALLEY BANK

 

	
/s/   Kristan M. O’Connor
    	
 
    
	
 
    	
 
    
	
Kristan   M. O’Connor
    	
 
    
	
Senior   Advisor
    	
 
    

 

 

Cc:  Jack Gaziano — Managing Director

 

 

AGREED & ACCEPTED,  this 28 day of June, 2012.

 

 

With signature below, we hereby elect the terms as outlined above under:

 

	
o
    	
Option   #1
    
	
 
    	
 
    
	
x
    	
Option   #2
    

 

 

Satcon Technology Corporation

 

	
By: 
    	
/s/ Aaron M. Gomolak
    	
 
    
	
 
    	
 
    	
 
    
	
Title:  
    	
EVP & CFO
    	
 
    

 

5

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