Amendment to Forbearance Agreement between Silicon Valley Bank and SatCon Entities (January 17, 2003)

Summary

This amendment updates the terms of a prior forbearance agreement between Silicon Valley Bank (the lender) and SatCon Technology Corporation and its affiliates (the borrowers). The amendment changes certain deadlines in the original agreement, confirms the borrowers' outstanding debt, and requires the borrowers to waive any claims against the lender. All other terms of the original loan and forbearance agreements remain in effect. The agreement is binding on both parties and governed by Massachusetts law.

EX-10.1 3 a2101115zex-10_1.txt EXHIBIT 10.1 AMENDMENT TO FORBEARANCE AGREEMENT THIS AMENDMENT TO FORBEARANCE AGREEMENT (this "AGREEMENT") is made this 17th day of January, 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 (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 January 16, 2003: (a) Revolving Loans: Principal: $1,479,291.15 Page 1 of 4 (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 11 (ii) of the Forbearance Agreement is hereby amended by deleting the text "January 15, 2003" set forth therein and substituting the text "January 25, 2003 therefor. (ii) Section 12 (a) of the Forbearance Agreement is hereby amended by deleting same in its entirety and substituting the text "January 25, 2003" therefor. Page 2 of 4 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. 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. Page 3 of 4 IN WITNESS WHEREOF, this Agreement has been executed as of the 17th day of January, 2003. "BORROWER" SATCON TECHNOLOGY CORPORATION By: /s/ Ralph M. Norwood -------------------- Title: Vice President and Chief Financial Officer SATCON POWER SYSTEMS, INC. By: /s/ Ralph M. Norwood -------------------- Title: Vice President and Chief Financial Officer SATCON APPLIED TECHNOLOGY, INC. By: /s/ Ralph M. Norwood -------------------- Title: Vice President and Chief Financial Officer SATCON ELECTRONICS, INC. By: /s/ Ralph M. Norwood -------------------- Title: Vice President and Chief Financial Officer SATCON POWER SYSTEMS CANADA LTD By: /s/ Ralph M. Norwood -------------------- Title: Vice President and Chief Financial Officer "LENDER" SILICON VALLEY BANK By: /s/ John K. Peck -------------------- Title: Vice President Page 4 of 4