Document:

Exhibit 10.2

 

PLEDGE AND SECURITY AGREEMENT

 

THIS
PLEDGE AND SECURITY AGREEMENT (this “Pledge Agreement”) is dated as of               
and made by and between ROAD BAY INVESTMENTS, LLC (the “Pledgor”) and
AMERICAN HERITAGE LIFE INSURANCE COMPANY(the “Secured Party”).

 

W I T N E S S E T H

 

WHEREAS,
the Secured Party and the Pledgor have entered into an Asset Purchase Agreement
dated               
(the “Asset Purchase Agreement”), under which the Secured Party has agreed to
sell, and the Pledgor has agreed to purchase from the Secured Party, certain
Assets (as defined in the Asset Purchase Agreement) ; and

 

WHEREAS,
as security for the payment and performance by the Pledgor of its obligations
under the Asset Purchase Agreement, the Pledgor has agreed to grant a pledge of
and security interest in the Pledgor’s right, title, and interest in and to the
Assets;

 

NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
contained, the Pledgor and the Secured Party hereby agree as follows:

 

ARTICLE I

 

GRANT
OF PLEDGE AND SECURITY INTEREST

 

Section 1.1                                      Grant of Security Interest.  To
secure the payment in full when due by the Pledgor to the Secured Party under
the Asset Purchase Agreement of all amounts (including fees, charges, and
expenses) which accrue and become due thereunder and the timely performance by
the Pledgor of each of its other obligations thereunder (collectively, the “Secured
Obligations”), the Pledgor hereby pledges and grants to the Secured Party a
security interest in all of the Pledgor’s right, title, and interest in, to,
and under the following (collectively, the “Collateral”): (a) the Assets
and all certificates or instruments evidencing the same and all proceeds
thereof, all accessions thereto, and substitutions therefor; (b) all
interest, distributions, and other proceeds from time to time received,
receivable, or otherwise distributed to Pledgor in respect of or in exchange
for any or all of the Assets; and (c) all “Proceeds” (as such term is
defined in the Uniform Commercial Code as in effect in the State of Illinois or
any other relevant jurisdiction (the “UCC”)) of any of the foregoing.

 

Section 1.2                                      Perfection of Security Interest.

 

(a)                                  The Pledgor agrees to take all other actions which may be necessary under
the laws of the State of Illinois or may be requested by the Secured Party to
protect and perfect the interest of the Secured Party in the Collateral created
hereby and to ensure that such interest is senior in rank to the claims of any
other creditor of the Pledgor claiming an interest in and to the Collateral,
including the filing of UCC-1 financing statements (including any continuation
statements with respect to such financing statements when applicable)
identifying the Assets and naming the Pledgor as debtor and the Secured Party
as secured party.  The Pledgor shall
deliver to the Secured Party file-stamped copies or other evidence of such
filings.  Notwithstanding the 

 

 

agreements set forth in this Section 1.2, the
Pledgor hereby authorizes the Secured Party to take, and appoints the Secured
Party as its attorney-in-fact for the purpose of taking, any action necessary
under the UCC to perfect, and to maintain the perfection and priority of, the
Secured Party’s interest in the Collateral, including, without limitation, the
filing of any such financing and continuation statements.

 

(b)                                 Notwithstanding the agreements set forth in this Section 1.2,
Pledgor shall not be required to file or record any mortgage or other security
instrument in the event any recordation, transfer, stamp, documentary, or other
fees or taxes are or would be levied on Pledgor by reason of the making or
recording of any Note (as defined in the Asset Purchase Agreement) or
mortgage.  All such recordation,
transfer, stamp, documentary, or other fees or taxes shall be the sole
responsibility of Secured Party.

 

ARTICLE II

 

REPRESENTATIONS,
WARRANTIES, AND COVENANTS

 

Section 2.1                                      Representations, Warranties, and Covenants as
to the Pledgor.  The Pledgor hereby represents, warrants, and
covenants to the Secured Party:

 

(a)                                  Title to Collateral.  The Assets and all of the other Collateral in
existence on the date hereof are, and all Assets and all of the other
Collateral issued subsequent to the date hereof will be, owned by the Pledgor
free and clear of any lien or encumbrance. 
The Pledgor has not (i) filed or consented to the filing with any
governmental authority of any financing statement or analogous document under
the UCC or any other applicable laws covering any Collateral, (ii) made
any assignment to any other person of any interest in the Collateral, or
(iii) entered into any security agreement or similar instrument or
arrangement covering all or any part of the Collateral with any other person,
which financing statement or analogous document, assignment, security
agreement, or similar instrument is still in effect.

 

(b)                                 Organization.  The Pledgor is a limited liability company
organized under the laws of the State of Delaware.

 

(c)                                  Principal Office.  The Pledgor maintains its chief executive
office at 3075 Sanders Road, Northbrook, Illinois 60062.

 

(d)                                 No Liens.  Pledgor is as of the date hereof, and at the
time of any delivery of any Collateral to the Secured Party pursuant to Article I
of this Pledge Agreement, Pledgor will be, the sole legal and beneficial owner
of the Collateral.  All Collateral is on
the date hereof, and will be, so owned by Pledgor free and clear of any lien
except for the lien created by this Pledge Agreement.

 

(e)                                  Due Authorization.  The execution and delivery to the Secured
Party of this Pledge Agreement by the Pledgor, the delivery to the Secured
Party of the Assets together with any necessary endorsements, and the
consummation of the transactions provided for in this Pledge Agreement have
been duly authorized by the Pledgor by all necessary corporate action on its
part and this Pledge Agreement constitutes a legal, valid, and binding
obligation of the Pledgor, enforceable against the Pledgor in accordance with
its terms, and except in each case as 

 

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enforcement may be limited
by bankruptcy, insolvency, examination, suspension of payments, fraudulent
transfer, reorganization, moratorium, and other similar laws of general
applicability affecting the enforcement of creditors’ rights generally, public
policy, and general principles of equity (regardless of whether such proceeding
is considered in a proceeding in equity or law).

 

(f)                                    No Conflict.  The execution and delivery of this Pledge
Agreement, the delivery of the Collateral, the consummation of the transactions
contemplated hereby, and the fulfillment of the terms hereof will not conflict
with or result in the breach of any of the material terms and provisions of,
constitute (with or without notice or lapse of time or both) a default under,
or result in the creation of any lien upon any property or assets of the
Pledgor pursuant to, any indenture, contract, agreement, mortgage, deed of
trust, or other instrument to which the Pledgor is a party or by which it or
any of its properties is bound.

 

(g)                                 No Violation.  The execution and delivery of this Pledge
Agreement, the delivery of the Collateral, the consummation of the transactions
contemplated hereby, and the fulfillment of the terms hereof will not conflict
with or violate any organizational or governing documents of the Pledgor or any
law, treaty, rule, or regulation, or any judgment, order, or decree, or
determination of an arbitrator or governmental authority applicable to or
binding upon the Pledgor.

 

(h)                                 No Proceedings.  There are no actions at law, suits in equity,
or proceedings by or before any governmental commission, bureau, or
administrative agency pending or, to the best knowledge of the Pledgor,
threatened against the Pledgor or any of its assets, that would adversely
affect the ability of the Pledgor to perform its obligations under this Pledge
Agreement.

 

(i)                                     No Authorization Required.  Except for such authorizations or approvals
as shall have been obtained prior to the date hereof, no authorization or approval
of any governmental agency or commission or public or quasi-public body or
authority with jurisdiction over the Pledgor or any of its assets is necessary
for the due execution and delivery of this Pledge Agreement or for the validity
or enforceability hereof.

 

Section 2.2                                      Delivery of Pledged Collateral; Filings.

 

Pledgor
has delivered, or will deliver, to the Secured Party an appropriate UCC-1
financing statement to be filed with the Secretaries of State of the States of
Delaware and Illinois, the States in which the Pledgor is organized and
located, respectively, evidencing the lien created by this Pledge
Agreement.  Pledgor has delivered, or
will deliver, to the Secured Party an appropriate mortgage or other security
instrument evidencing the lien of this Pledge Agreement on any Assets
constituting real property.

 

Section 2.3                                      Distributions; etc.  So
long as no Event of Default shall have occurred, Pledgor shall be entitled to
receive and retain, and to utilize free and clear of the lien of this Pledge
Agreement, any and all distributions of interest or other funds in respect of
the Assets to the extent made in accordance with the provisions of the Asset
Purchase Agreement.

 

Section 2.4                                      Transfers and Other Liens. 
Pledgor shall not (i) sell, convey, assign, or otherwise dispose
of, or grant any option or right with respect to, any of the Collateral 

 

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except in connection with
the full and complete payment or prepayment of the Note issued in connection with
the acquisition of the Asset or Collateral to be sold, conveyed, assigned or
otherwise disposed of or (ii) create or permit to exist any lien or
encumbrance upon or with respect to any Collateral, other than the lien and
security interest granted to the Secured Party pursuant to this Pledge
Agreement.

 

ARTICLE III

 

EVENTS
OF DEFAULT; REMEDIES

 

Section 3.1                                      Events of Default.  Each
of the following events shall constitute an event of default (each, an “Event
of Default”) under this Pledge Agreement: (i) any material breach by
the Pledgor of any term, provision, or covenant of the Asset Purchase
Agreement; (ii) any material breach by the Pledgor of any term, provision,
or covenant of this Pledge Agreement; (iii) the Secured Party ceases to
have a security interest in the Collateral; or (iv) the Pledgor becomes
subject to bankruptcy, insolvency, reorganization, liquidation, conservation,
rehabilitation, or other similar proceedings.

 

Section 3.2                                      Remedies Upon Default.

 

(a)                                  Upon the occurrence of an Event of Default, all rights of Pledgor to
receive distributions which it would otherwise be authorized to receive and
retain pursuant to Section 2.3 hereof shall cease and all such rights
shall thereupon become vested in the Secured Party, which shall thereupon have
the sole right to receive and hold as Collateral such distributions.

 

(b)                                 All distributions which are received by Pledgor contrary to the
provisions of paragraph (a) of this Section 3.2 shall be received in
trust for the benefit of the Secured Party, shall be segregated from other
funds of Pledgor and shall immediately be paid over to the Secured Party as
Collateral in the same form as so received (with any necessary endorsement).

 

(c)                                  If an Event of Default shall have occurred, Secured Party shall have the
right, in addition to the other rights and remedies provided for herein or
otherwise available to it to be exercised from time to time, (i) to retain
and apply the distributions to the Secured Obligations and (ii) to
exercise all the rights and remedies of a secured party on default under the
UCC in effect in the State of Illinois at that time, and the Secured Party may
also in its sole discretion, without notice except as specified below, sell the
Collateral or any part thereof (including, without limitation, any partial
interest in the Assets) in one or more parcels at public or private sale, at
any exchange, broker’s board, or at any of the Secured Party’s offices or
elsewhere, at such price or prices and upon such other terms as the Secured
Party may deem commercially reasonable. 
Secured Party may be the purchaser of any or all of the Collateral at
any such sale and shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at such sale, to use and apply any of the Secured Obligations
owed to it as a credit on account of the purchase price of any Collateral
payable by it at such sale.  Each
purchaser at any such sale shall acquire the property sold absolutely free from
any claim or right on the part of Pledgor, and Pledgor hereby waives, to the
fullest extent permitted by law, all rights of redemption, stay, and/or
appraisal which it now 

 

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has, or may at any time in the future have, under
any rule of law or statute now existing or hereafter enacted.  Pledgor acknowledges and agrees that five
days’ notice to Pledgor of the time and place of any public sale or the time
after which any private sale or other intended disposition is to take place
shall constitute reasonable notification of such matters.  No notification need be given to Pledgor if
it has signed, after the occurrence of an Event of Default, a statement
renouncing or modifying any right to notification of sale or other intended
disposition.  The Secured Party shall not
be obligated to make any sale of Collateral regardless of notice of sale having
been given.  The Secured Party may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefore, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.  Pledgor hereby waives, to the fullest extent
permitted by law, any claims against the Secured Party arising by reason of the
fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if the Secured Party accepts the first offer received and does not
offer such Collateral to more than one offeree. 
The Secured Party shall not be liable for any incorrect or improper
payment made pursuant to this Section in the absence of gross negligence
or willful misconduct.

 

(d)                                 Pledgor recognizes that, by reason of certain prohibitions contained in
the Securities Act of 1933, as amended (the “Securities Act”), and applicable
state securities law, the Secured Party may be compelled, with respect to any
sale of all or any part of the Collateral, to limit purchasers to persons who
will agree, among other things, to acquire the Collateral for their own
account, for investment and not with a view to the distribution or resale
thereof.  Pledgor acknowledges that any
such private sales may be at prices and on terms less favorable to the Secured
Party than those obtainable through a public sale without such restrictions
(including, without limitation, a public offering made pursuant to a
registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Secured Party shall have
no obligation to engage in public sales and no obligation to delay the sale of
any Collateral for the period of time necessary to permit the issuer thereof to
register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would agree to do so.

 

Section 3.3                                      Application of Proceeds.  All
distributions held from time to time by the Secured Party and all proceeds
received by the Secured Party in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral pursuant to the
exercise by the Secured Party of its remedies as a secured creditor as provided
herein shall be applied, together with any other sums then held by the Secured
Party pursuant to this Pledge Agreement, promptly by the Secured Party as
follows:

 

First, to the payment of all costs and expenses,
fees, commissions, and taxes of such sale, collection, or other realization,
including, without limitation, compensation to the Secured Party and its agents
and counsel, and all expenses, liabilities, and advances made or incurred by
the Secured Party in connection therewith, together with interest on each such
amount at the highest rate then in effect under the Asset Purchase Agreement
from and after the date such amount is due, owing, or unpaid until paid in
full;

 

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Second, without duplication of amounts applied
pursuant to clause First above, to the indefeasible payment in full in cash of
the Secured Obligations in accordance with the terms of the Asset Purchase
Agreement; and

 

Third, the balance, if any, to the persons lawfully
entitled thereto (including Pledgor or its successors or assigns).

 

Section 3.4                                      Expenses.  Pledgor
will upon demand pay to the Secured Party the amount of any and all expenses,
including the fees and expenses of its counsel and the fees and expenses of any
experts and agents, which the Secured Party may incur in connection with (i) the
collection of the Secured Obligations, (ii) the enforcement and
administration of this Pledge Agreement, (iii) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the
Collateral, (iv) the exercise or enforcement of any of the rights of the
Secured Party hereunder, or (v) the failure by Pledgor to perform or
observe any of the provisions hereof. 
All amounts payable by Pledgor under this Section 3.4 shall be due
upon demand and shall be part of the Secured Obligations.  Pledgor’s obligations under this Section 3.4
shall survive the termination of this Pledge Agreement and the discharge of
Pledgor’s other obligations hereunder.

 

ARTICLE IV

 

MISCELLANEOUS

 

Section 4.1                                      Notices.  All
demands, notices, instructions, and communications hereunder shall be in
writing and shall be deemed to have been duly given when received.  All notices or communications under this
Pledge Agreement shall be addressed as follows:

 

Notices to Secured Party:

 

American
Heritage Life Insurance Company

 

3075
Sanders Road

Northbrook, Illinois  60062

Attention:  Commercial Mortgage Division

Facsimile:  847-402-4346

 

Notices to Pledgor:

 

Road
Bay Investments, LLC

3075 Sanders Road, Suite G5C

Northbrook, IL
60062

Attention:  President

Section 4.2                                      Termination; Release.  When
a Note issued in connection with the acquisition of an Asset or Collateral has
been paid in full, the security interest in such Asset or Collateral created by
this Pledge Agreement shall be released. 
When all the Secured Obligations 

 

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have
been paid in full, this Pledge Agreement shall terminate.  Upon partial release or termination of this
Pledge Agreement, the Secured Party shall, upon the request and at the sole
cost and expense of Pledgor, forthwith assign, transfer, and deliver to
Pledgor, against receipt and without recourse to or warranty by the Secured
Party, such of the Collateral to be released (in the case of a release) as may
be in the possession of the Secured Party and as shall not have been sold or
otherwise applied pursuant to the terms hereof, and, with respect to any other
Collateral, proper instruments (including UCC termination statements on Form UCC-3)
acknowledging the termination of this Pledge Agreement or the release of such
pledged Collateral, as the case may be.

 

Section 4.3                                      Continuing Security Interest; Assignment.  This
Pledge Agreement shall create a continuing security interest in the Collateral
and shall (i) be binding upon Pledgor, its successors, and assigns and (ii) inure,
together with the rights and remedies of the Secured Party hereunder, to the
benefit of the Secured Party and each of its successors, transferees, and
assigns; no other persons (including, without limitation, any other creditor of
Pledgor) shall have any interest herein or any right or benefit with respect
hereto.

 

Section 4.4                                      Severability of Provisions.  If
any one or more of the covenants, agreements, provisions, or terms of this
Pledge Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions, or terms shall be deemed severable from the
remaining covenants, agreements, provisions, or terms of this Pledge Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Pledge Agreement.

 

Section 4.5                                      Further Assurances.  The
Pledgor agrees to do and perform, from time to time, any and all acts and to
execute any and all further instruments required or reasonably requested by the
Secured Party to maintain the perfection and the priority of the Secured Party’s
interest and to effect more fully the purposes of this Pledge Agreement.

 

Section 4.6                                      No Waiver; Cumulative Remedies.  No
failure to exercise and no delay in exercising, on the part of the Secured
Party, any right, remedy, power, or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power, or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power, or privilege.  The rights, remedies, powers, and privileges
herein provided are cumulative and not exhaustive of any rights, remedies, powers,
and privileges provided by law.

 

Section 4.7                                      Amendment.  This
Pledge Agreement may not be modified, amended, waived, or supplemented except
by a writing signed by each of the parties hereto.

 

Section 4.8                                      Headings.  The
headings herein are for purposes of reference only and shall not otherwise
affect the meaning or interpretation of any provision hereof.

 

Section 4.9                                      GOVERNING LAW.  THIS
PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LOCAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO ITS PRINCIPLES OF CHOICE
OF LAW.

 

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Section 4.10                                Submission to Jurisdiction. 
Pledgor hereby irrevocably submits to the jurisdiction of the federal
and state courts of competent jurisdiction in the State of Illinois in any suit
or proceeding arising out of this Pledge Agreement or the transactions
contemplated hereby, agrees to be bound by any judgment rendered by such courts
in connection with this Pledge Agreement, and waives any and all objections to
jurisdiction that it may have under the laws of Illinois or any other
jurisdiction.

 

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IN
WITNESS WHEREOF, the undersigned have caused this Pledge Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
day and year first above written.

 

	
   

  	
  ROAD
  BAY INVESTMENTS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN
  HERITAGE LIFE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  

 

9EXHIBIT 10.1

 

SIXTH
LOAN MODIFICATION AGREEMENT

 

This Sixth Loan Modification Agreement (this “Loan
Modification Agreement”) is entered into as of the Sixth 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 the Third Loan
Modification Effective Date, as further amended by that certain Waiver and
Fourth Loan Modification Agreement, dated as of the Fourth Loan Modification
Effective Date, and as further amended by that certain Fifth Loan Modification
Agreement, dated as of the Fifth Loan Modification Effective Date (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 Section 2.1.5
thereof:

 

“2.1.5     Term Loans.

 

(a)           Availability.  Subject to the terms and conditions of this
Agreement, Bank agrees to make (i) one (1) Tranche A Term Loan (the “Tranche A Term Loan”) in an amount up to the Tranche A Term
Loan Amount and (ii) one (1) Tranche B Term Loan (the “Tranche B Term Loan”) in an amount up to the Tranche B Term
Loan Amount.

 

(i)  Tranche
A Term Loan.  The Tranche A Term Loan
will be available only during the Tranche A Term Loan Availability Period.

 

1

 

(ii)  Tranche
B Term Loan.  The Tranche B Term Loan
will be available only during the Tranche B Term Loan Availability Period.

 

(b)           Repayment.  Borrower shall repay each Term Loan in (i) thirty-six
(36) equal installments of principal, plus (ii) monthly payments of
accrued interest (the “Term Loan Payment”).  Beginning on the last day of the month
following the month in which the Funding Date occurs, each Term Loan Payment
shall be payable on the last day of each month. 
Borrower’s final Term Loan Payment, due on the respective Tranche A Term
Loan Maturity Date or Tranche B Term Loan Maturity Date, shall include all
outstanding principal and accrued and unpaid interest under the applicable Term
Loan.  Once repaid, no Term Loan may be
reborrowed.

 

(c)           Prepayment.  Term Loans may be prepaid, in whole or in
part prior to the respective Term Loan Maturity Date by Borrower, effective
three (3) Business Days after written notice of such prepayment is given
to Bank.  Notwithstanding any such
prepayment, Bank’s lien and security interest in the Collateral shall continue
until Borrower fully satisfies its Obligations. 
If such prepayment is at Borrower’s election or at Bank’s election due
to the occurrence and continuance of an Event of Default, Borrower shall pay to
Bank, in addition to the payment of any other expenses or fees then-owing, a
termination fee in an amount equal to (i) if such prepayment occurs after
the Funding Date of any Term Loan but prior to the day that is 365 days after
the Funding Date of such Term Loan (the “Applicable Term Loan
First Anniversary”), one percent
(1.00%) of the principal amount of the applicable Term Loan so prepaid; (ii) if
such prepayment occurs after the Applicable Term Loan First Anniversary but
prior to the day that is 365 days from the Applicable Term Loan First
Anniversary (the “Applicable Term Loan
Second Anniversary”), one-half of
one percent (0.50%) of the principal amount of the applicable Term Loan so
prepaid; and (iii) if such prepayment occurs after the Applicable Term
Loan Second Anniversary, zero percent (0.00%) of the applicable Term Loan so
prepaid; provided  that no termination fee shall be charged if any
Term Loan hereunder is replaced with a new facility from another division of
Silicon Valley Bank.  Upon payment in
full of the Obligations and at such time as Bank’s obligation to make Credit
Extensions has terminated, Bank shall terminate and release its liens and
security interests in the Collateral and all rights therein shall revert to
Borrower.”

 

2                                          The
Loan Agreement shall be amended by deleting the following text appearing as Section 2.2
thereof:

 

“2.2        Overadvances. 
If at any time or for any reason the total of all outstanding Advances
and all other monetary Obligations exceeds the Availability Amount (an “Overadvance”), Borrower shall immediately pay the amount of
the excess to Bank, without notice or demand. 
Without limiting Borrower’s obligation to repay to Bank the amount of
any Overadvance, Borrower agrees to pay Bank interest on the outstanding amount
of any Overadvance, on demand, at the Default Rate.”

 

and inserting in lieu thereof the following:

 

“2.2        Overadvances.  If, at
any time, the sum of (a) the outstanding principal amount of any Advances
(including any amounts designated as used for Cash Management Services and/or
the Non-formula Sublimit); plus (b) the face amount of any
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit and any Letter of Credit Reserve); plus (c) the FX Reserve
exceeds the lesser of either (i) the Revolving Line or (ii) the
Borrowing Base plus, without duplication, the Non-formula Sublimit, if
any (such excess amount being an “Overadvance”),
Borrower shall immediately pay to Bank in cash such Overadvance.  Without limiting Borrower’s obligation to
repay Bank

 

2

 

any amount of the Overadvance, Borrower agrees to pay Bank interest on
the outstanding amount of any Overadvance, on demand, at the Default Rate.”

 

3                                          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 shall accrue interest at a floating
per annum rate equal to the Prime Rate plus one percent (1.00%), which interest
shall be payable monthly, in arrears, in accordance with Section 2.3(g) below.”

 

(ii)           Term
Loan.  Subject to Section 2.3(b),
the principal amount outstanding under any Term Loan shall accrue interest at a
floating per annum rate equal to the Prime Rate plus two and one-half percent
(2.50%), which interest shall be payable monthly, in arrears, in accordance
with Section 2.3(g) below.”

 

and inserting the following in lieu 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 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.”

 

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

 

“(c)         Termination Fee.  Subject to the terms of Section 2.1.5(c) with
respect to Term Loans and Section 4.1 with respect to Advances, a
termination fee;”

 

and
inserting the following in lieu thereof:

 

“(c)         Termination Fee.  Subject to the terms of Section 4.1, a
termination fee;”

 

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

 

3

 

“(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 one-half 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;”

 

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, 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;”

 

6                                          The
Loan Agreement shall be amended by deleting the following Section 2.4(g) thereof:

 

“(g)         Term Loan Fee.
(i) on the Funding Date of the Tranche A Term Loan, a fee equal to
three-eighths of one percent (0.375%) of the Tranche A Term Loan; and (ii) on
the Funding Date of the Tranche B Term Loan, a fee equal to three-eighths of
one percent (0.375%) of the Tranche B Term Loan.”

 

7                                          The
Loan Agreement shall be amended by deleting the following text appearing as Section 3.4(b) thereof:

 

“(b)         Term Loan.  Subject to the prior satisfaction of all
other applicable conditions to the making of any Term Loan set forth in this
Agreement, to obtain a Term Loan, Borrower shall notify Bank (which notice
shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00
noon, Eastern time on the Funding Date of the applicable Term Loan.  Together with such notification, Borrower
must promptly deliver to Bank by electronic mail or facsimile a completed
Payment/Advance Form executed by a Responsible Officer or his or her
designee.  Bank shall credit the Term
Loan to the Designated Deposit Account. 
Bank may make Term Loans under this Agreement based on instructions from
a Responsible Officer or his or her designee or without instructions if the
Term Loan or Term Loans are necessary to meet Obligations which have become
due.  Bank may rely on any telephone
notice given by a person whom Bank believes is a Responsible Officer or
designee.”

 

8                                          The
Loan Agreement shall be amended by deleting the following text appearing as Section 6.9(a) thereof:

 

“(a)         Liquidity.  Borrower’s (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) minus (ii) all outstanding Obligations owed by
Borrower to Bank, of at least $4,000,000.”

 

and inserting in lieu thereof the following:

 

4

 

“(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.”

 

9                                          The
Loan Agreement shall be amended by deleting the following clause (g) from
the definition of “Eligible Accounts” in Section 13.1 thereof, entitled “Definitions”:

 

“(g)         Accounts owing from
an Account Debtor which does not have its principal place of business in the
United States or Canada except for Eligible Foreign Accounts;”

 

and inserting in lieu thereof the following:

 

“(g)         Accounts owing from
an Account Debtor which does not have its principal place of business in the
United States or Canada except for, commencing July 1, 2010 and
thereafter, Eligible Foreign Accounts;”

 

10                                    The
Loan Agreement shall be amended by deleting the following definitions appearing
in Section 13.1 thereof, entitled “Definitions”:

 

“              “Availability Amount” is (a) the lesser of (i) the
Revolving Line minus 100% of the outstanding principal balance of and
accrued but unpaid interest on the Term Loans or (ii) the Borrowing Base, minus
(b) the amount of all outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit plus an amount equal to the Letter of Credit
Reserves), minus (c) the FX Reserve, and minus (d) the
outstanding principal balance of any Advances (including any amounts used for
Cash Management Services).

 

“Borrowing Base”
is 80% of Eligible Accounts, as determined by Bank from Borrower’s most recent
Borrowing Base Certificate minus 100% of the outstanding principal
balance of and accrued but unpaid interest on the Term Loans, provided, however,
that Bank may decrease the foregoing advance rate percentage  in its good faith business judgment based on events,
conditions, contingencies, or risks which, as determined by Bank, may adversely
affect Collateral.

 

“Credit Extension”
is any Advance, Letter of Credit, FX Forward Contract, amount utilized for Cash
Management Services, Term Loan, or any other extension of credit by Bank for
Borrower’s benefit.

 

“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 (a) covered
by credit insurance satisfactory to Bank in its good faith business judgment,
less any deductible; (b) supported by letter(s) of credit acceptable
to Bank in its good faith business judgment; or (c) that Bank approves in
writing.”

 

5

 

and inserting in lieu thereof the following:

 

“              “Availability Amount” is (a) the lesser of (i) the
Revolving Line or (ii) the sum of (X) the Borrowing Base plus (Y) the
Non-formula Sublimit minus (b) the amount of all outstanding
Letters of Credit (including drawn but unreimbursed Letters of Credit plus an
amount equal to the Letter of Credit Reserves), minus (c) the FX
Reserve, and minus (d) the outstanding principal balance of any Advances
(including any amounts used for Cash Management Services and/or the Non-formula
Sublimit).

 

“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.

 

“Credit Extension” is any Advance (including, without
limitation, any Advance under the Non-formula Sublimit), Letter of Credit, FX
Forward Contract, amount utilized for Cash Management Services, or any other
extension of credit by Bank for Borrower’s benefit.”

 

“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.”

 

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

 

“              “Non-formula Sublimit” is an Advance or Advances under the
Revolving Line made after the Sixth Loan Modification Effective Date of up to
Five Million Dollars ($5,000,000); provided, however, the
Non-formula Sublimit shall be reduced to Two Million Five Hundred Thousand
Dollars ($2,500,000) effective on July 1, 2010, and Non-formula Sublimit
Advances in excess of such amount will be immediately due and payable; provided
further, that following the occurrence of a Default or an Event of
Default, the Non-formula Sublimit shall be reduced to Zero Dollars ($0.00) and
Non-formula Sublimit Advances in excess of such amount will be immediately due
and payable.

 

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

 

“Sixth Loan Modification
Effective Date” is the date noted on the signature page to the
Sixth Loan Modification Agreement.”

 

12                                    The
Loan Agreement shall be amended by deleting the following definitions from Section 13.1
thereof:

 

“Payment/Advance Form”
is that certain form attached as Exhibit B to the Fifth Loan Modification
Agreement.

 

“Tranche A Term Loan”
is defined in Section 2.1.5.

 

6

 

“Tranche A Term Loan Amount”
is an aggregate principal amount up to One Million Dollars ($1,000,000) plus
any accrued but unpaid interest thereon outstanding at any time.

 

“Tranche A Term Loan
Availability Period” means the period commencing on the date that
Borrower provides Bank evidence satisfactory to Bank, in its reasonable
discretion, that Borrower has a Tangible Net Worth of not less than Nine
Million Dollars ($9,000,000) for the quarterly period ending March 31,
2010 and terminating on the earlier to occur of (x) the occurrence of an
Event of Default and (y) September 30, 2010.

 

“Tranche A Term Loan
Maturity Date” is the earlier to occur of (i) the occurrence of
an Event of Default and (ii) the last day of the month that is thirty-five
(35) months from the last day of the month following the month in which the
Funding Date of the Tranche A Term Loan occurs.

 

“Tranche B Term Loan”
is defined in Section 2.1.5.

 

“Tranche B Term Loan Amount”
is an aggregate principal amount up to One Million Dollars ($1,000,000) plus
any accrued but unpaid interest thereon outstanding at any time.

 

“Tranche B Term Loan
Availability Period” means the period commencing on the date that
Borrower provides Bank evidence satisfactory to Bank, in its reasonable
discretion, that Borrower has a Tangible Net Worth of not less than Nine
Million Dollars ($9,000,000) for the quarterly period ending June 30, 2010
and terminating on the earlier to occur of (i) the occurrence of an Event
of Default and (ii) December 31, 2010.

 

“Tranche B Term Loan
Maturity Date” is the earlier to occur of (i) the occurrence of
an Event of Default and (ii) the last day of the month that is thirty-five
(35) months from the last day of the month following the month in which the
Funding Date of the Tranche B Term Loan occurs.

 

“Term Loan” or “Term Loans” means the Tranche A Term Loan and the Tranche B
Term Loan.

 

“Term Loan Maturity Date”
means either or both of the Tranche A Term Loan Maturity Date or the Tranche B
Term Loan Maturity Date, as applicable.”

 

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

 

14                                    The
Payment/Advance Form appearing as Exhibit E
to the Loan Agreement is hereby deleted in its entirety.

 

4.             CONDITIONS
PRECEDENT.  Borrower hereby agrees
that the following documents shall be delivered to the Bank prior to or
concurrently with the Sixth Loan Modification Effective Date, each in form and
substance satisfactory to the Bank (collectively, the “Conditions Precedent”):

 

A.                                   copies,
certified by a duly authorized officer of the Borrower to be true and complete
as of the date hereof, of each of (i) the governing documents of the
Borrower as in effect on the date hereof (unless such governing documents have
been previously delivered to Bank and have not been modified as of the date of
such delivery), (ii) the resolutions of the Borrower authorizing the
execution and delivery of this Loan Modification Agreement, the other documents
executed in

 

7

 

connection
herewith and the Borrower’s performance of all of the transactions contemplated
hereby, and (iii) an incumbency certificate giving the name and bearing a
specimen signature of each individual who shall be so authorized;

 

B.                                     a
certificate from the Secretary of State of the applicable State of organization
of a recent date as to the Borrower’s existence and good standing, together
with a certificate of foreign qualification from each applicable jurisdiction;
and

 

C.                                     such
other documents and/or instruments as Bank may request, in its reasonable
discretion.

 

5.             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.  On or before April 21,
2010, Borrower shall pay to Bank a good faith deposit in the amount of Five
Thousand Dollars ($5,000) (the “Good Faith Deposit”),
to be utilized to pay Bank Expenses.  Any
portion of the Good Faith Deposit not utilized to pay Bank Expenses will be
applied to the Modification Fee.

 

6.             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.

 

7.             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.

 

8.             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.

 

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

 

10.           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.

 

11.           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.

 

12.           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

 

8

 

Documents, unless the party is expressly
released by Bank in writing.  No maker
will be released by virtue of this Loan Modification Agreement.

 

13.           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.

 

14.           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.

 

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

 

9

 

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 Sixth Loan Modification Effective Date.

 

 

	
  BORROWER:

  	
   

  
	
   

  	
   

  
	
  SATCON TECHNOLOGY CORPORATION

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
  /s/ Charles S. Rhoades

  	
   

  
	
  Name:

  	
     Charles S. Rhoades

  	
   

  
	
  Title:

  	
    President, Chief Executive Officer

  	
   

  

 

	
  SATCON POWER SYSTEMS, INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
  /s/ Charles S. Rhoades

  	
   

  
	
  Name:

  	
     Charles S. Rhoades

  	
   

  
	
  Title:

  	
    President, Chief Executive Officer

  	
   

  

 

	
  SATCON ELECTRONICS, INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
  /s/ Charles S. Rhoades

  	
   

  
	
  Name:

  	
     Charles S. Rhoades

  	
   

  
	
  Title:

  	
    President, Chief Executive Officer

  	
   

  

 

	
  SATCON POWER SYSTEMS CANADA LTD.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
  /s/ Charles S. Rhoades

  	
   

  
	
  Name:

  	
     Charles S. Rhoades

  	
   

  
	
  Title:

  	
    President, Chief Executive Officer

  	
   

  

 

	
  BANK:

  	
   

  
	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Name:

  	
     

  	
   

  
	
  Title:

  	
    

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Sixth Loan Modification Effective Date: April 22, 2010

  	
   

  

 

[Satcon –Sixth Loan Modification Agreement Signature Page]

 

 

Exhibit A to Sixth 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 generally 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

  	
   

  	
  Yes No

  
	
  Annual financial statement (CPA Audited) + CC

  	
   

  	
  FYE within 120 days

  	
   

  	
  Yes No

  
	
  10-Q, 10-K and 8-K

  	
   

  	
  Within 5 days after filing with SEC

  	
   

  	
  Yes No

  
	
  A/R & A/P Agings

  	
   

  	
  Monthly within 15 days

  	
   

  	
  Yes No

  
	
  Projections

  	
   

  	
  Annually

  	
   

  	
  Yes 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 herein.

  	
   

  	
  Yes 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)

  	
   

  	
  $

  	
  4,000,000

  	
  *

  	
  $

  	
   

  	
   

  	
  Yes No

  
	
  Minimum Tangible Net Worth (quarterly)

  	
   

  	
  $

  	
                

  	
  *

  	
  $

  	
   

  	
   

  	
  Yes No

  

 

*From June 30, 2010 and thereafter, $14,000,000.

**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:                  Yes
  No

  
										

 

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

Dated:          

 

I.              Liquidity (Section 6.9(a))

 

Required:               (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.

 

Actual:

 

	
  A.

  	
   

  	
  Unrestricted cash at Bank

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Gross Borrowing Base availability (as determined by Bank from Borrower’s
  most recent Borrowing Base Certificate but excluding any availability under
  the Non-formula Sublimit)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  All outstanding Obligations owed by Borrower to Bank (excluding
  outstanding Advances under the Non-formula Sublimit)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Net Borrowing Base Availability (line B minus line C)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Liquidity (line A plus line D)

  	
   

  	
  $

  

 

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

 

	
   

  	
  o        No,
  not in compliance

  	
  o        Yes,
  in compliance

  

 

 

 

II.            Tangible Net Worth (Section 6.9(b))

 

Required:               Maintain
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.

 

Actual:

 

	
  A.

  	
   

  	
  Aggregate value of total assets of Borrower

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Deferred Financing Costs

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Aggregate value of goodwill of Borrower

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Aggregate value of intangible assets of Borrower

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Aggregate value of obligations owing to Borrower from officers or
  other directors

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Aggregate value of any reserves not already deducted from assets

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Total Liabilities

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  Value of line A plus B minus C minus D minus
  E minus F minus G

  	
   

  	
  $

  

 

 

Is line H equal to or greater than the sum of (i) $          
plus (ii) 50% of
the proceeds from issuances of equity and/or the incurrence of Subordinated
Debt after the Fifth Loan Modification Effective Date?

 

	
   

  	
  o    No,
  not in compliance

  	
  o    Yes,
  in compliance

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]