Exhibit 10.1

SHARE LENDING AGREEMENT

Dated as of February 2, 2007

Among

SUNPOWER CORPORATION (“Lender”),

and

LEHMAN BROTHERS INTERNATIONAL (EUROPE) LIMITED (“Borrower”), through

LEHMAN BROTHERS INC., as agent for Borrower (“Borrowing Agent”),

and

LEHMAN BROTHERS INC., in its capacity as Collateral Agent (as hereinafter
defined). This Agreement sets forth the terms and conditions under which
Borrower may borrow from Lender shares of Common Stock.

The parties hereto agree as follows:

Section 1.    Certain Definitions. The following capitalized terms shall have
the following meanings:

“Business Day” means, with respect to any Loan hereunder, a day on which regular
trading occurs in the principal trading market for the Common Stock.

“Cash” means any coin or currency of the United States as at the time shall be
legal tender for payment of public and private debts.

“Clearing Organization” means The Depository Trust Company, or, if agreed to by
Borrower and Lender, such other Securities Intermediary at which Borrower (or
Borrowing Agent) and Lender maintain accounts.

“Closing Price” on any day means, with respect to the Common Stock (i) if the
Common Stock is listed or admitted to trading on a U.S. securities exchange
registered under the Exchange Act or is included in the OTC Bulletin Board
Service (operated by the National Association of Securities Dealers, Inc.), the
last reported sale price, regular way, in the principal trading session on such
day on such market on which the Common Stock is then listed or is admitted to
trading (or, if the day of determination is not a Business Day, the last
preceding Business Day) and (ii) if the Common Stock is not so listed or
admitted to trading or if the last reported sale price is not obtainable (even
if the Common Stock is listed or admitted to trading on such market), the
average of the bid prices for the Common Stock obtained from as many dealers in
the Common Stock (which may include Borrower or its affiliates), but not
exceeding three, as shall furnish bid prices available to the Lender.

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“Collateral” means any Cash or Non-Cash Collateral. Each of the parties to this
Agreement hereby agree that Cash and each item within the definition of Non-Cash
Collateral shall be treated as a “financial asset” as defined by
Section 8-102(a)(9) of the UCC.

“Collateral Account” means the securities account of the Collateral Agent
maintained on the books of Lehman Brothers Inc., as securities intermediary, and
designated “Lehman Brothers Inc., as Collateral Agent of SunPower Corporation,
as pledgee of Lehman Brothers International (Europe) Limited, as Borrower of
Loaned Shares.” Any Collateral deposited in the Collateral Account shall be
segregated from all other assets and property of the Collateral Agent, which
such segregation may be accomplished by appropriate identification on the books
and records of Collateral Agent, as a “securities intermediary” within the
meaning of the UCC. The Securities Intermediary acknowledges that the Collateral
Account is maintained for the Collateral Agent and undertakes to treat the
Collateral Agent as entitled to exercise the rights that comprise the Collateral
credited to the Collateral Account. For purposes of UCC Section 9301(2), the
Collateral Account and the Collateral will reside in New York, New York.

“Collateral Agent” means Lehman Brothers Inc., in its capacity as collateral
agent for Lender hereunder, or any successor thereto under Section 20.

“Collateral Percentage” means 100%.

“Common Stock” means shares of Class A Common Stock, par value $0.001 per share,
of Lender, or any other security into which the Class A Common Stock shall be
exchanged or converted as the result of any merger, consolidation, other
business combination, reorganization, reclassification, recapitalization or
other corporate action (including, without limitation, a reorganization in
bankruptcy), in each case not involving an Unaffiliated Third Party.

“Convertible Notes” means the $175,000,000 aggregate principal amount of 1.25%
Senior Convertible Debentures due 2027 issued by Lender, or up to $200,000,000
aggregate principal amount to the extent the option to purchase additional
Convertible Notes is exercised in full as set forth in the purchase agreement
relating to the initial purchase of the Convertible Notes.

“Credit Downgrade” occurs when the Guarantor receives a rating for its long
term, unsecured and unsubordinated indebtedness that is below A- by Standard and
Poor’s Ratings Group, or its successor (“S&P”), or below A3 by Moody’s Investors
Service, Inc., or its successor (“Moody’s”), or, if either S&P or Moody’s ceases
to rate such debt, an equivalent or lower rating by a substitute rating agency
mutually agreed upon by the Lender and the Borrower.

“Credit Upgrade” occurs when the Guarantor receives a rating for its long term,
unsecured and unsubordinated indebtedness that is A- or better by S&P or A3 or
better by Moody’s, or, if either S&P or Moody’s ceases to rate such debt, an
equivalent or higher rating by a substitute rating agency mutually agreed upon
by the Lender and the Borrower.

 

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“Cutoff Time” shall mean 10:00 a.m. in the jurisdiction of the Clearing
Organization, or such other time on a Business Day by which a transfer of Loaned
Shares must be made by Borrower or Lender to the other, as shall be determined
in accordance with market practice.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Indenture” means the indenture, dated as of February 7, 2007, between the
Lender and Wells Fargo Bank, National Association, as supplemented by the first
supplemental indenture, dated as of February 7, 2007, between the Lender and
Wells Fargo Bank, National Association, pursuant to which the Convertible Notes
were issued.

“Loan Availability Period” means the period beginning with the date of issuance
of the Convertible Notes and ending on the earlier of (i) February 15, 2027,
(ii) the date as of which the Lender has notified the Borrower in writing of its
intention to terminate this Agreement at any time after the entire principal
amount of Convertible Notes ceases to be outstanding, whether as a result of
conversion, redemption, repurchase, cancellation or otherwise and (iii) the date
on which this Agreement shall terminate in accordance with the terms of this
Agreement.

“Loaned Shares” means shares of Common Stock initially transferred to the
Borrower in a Loan hereunder until such Loan or portion thereof is terminated
and a corresponding number of Loaned Shares is transferred to Lender pursuant to
this Agreement; provided that in respect of any such share of Common Stock
initially transferred to the Borrower by Lender and subsequently transferred by
the Borrower to another transferee, “Loaned Share” means an equivalent number of
shares of identical Common Stock. If, as the result of a stock dividend, stock
split or reverse stock split, the number of outstanding shares of Common Stock
is increased or decreased, then the number of outstanding Loaned Shares shall be
proportionately increased or decreased, as the case may be. If any new or
different security (or two or more securities) shall be exchanged for the
outstanding shares of Common Stock as the result of any reorganization, merger,
consolidation, reclassification, recapitalization or other corporate action
(including, without limitation, a reorganization in bankruptcy) not involving an
Unaffiliated Third Party, such new or different security (or such two or more
securities collectively) shall, effective upon such exchange, be deemed to
become a Loaned Share in substitution for the former Loaned Share for which such
exchange is made.

“Market Value” on any day means (i) with respect to Common Stock, the most
recent Closing Price of the Common Stock prior to such day and (ii) with respect
to any Collateral that is (a) Cash, the face amount thereof, (b) a letter of
credit, the undrawn amount thereof and (c) any other security or property, the
market value thereof, as determined by the Collateral Agent, in accordance with
market practice for such securities or property, based on the price for such
security or property as of the most recent close of trading obtained from a
generally recognized source or the closing bid quotation at the most recent
close of trading obtained from such source, plus accrued interest to the extent
not included therein, unless market practice with respect to the valuation of
such securities or property in connection is to the contrary.

 

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“Maximum Number of Shares” means 2,947,132 shares of Common Stock, subject to
the following adjustments:

(a) If, as the result of a stock dividend, stock split or reverse stock split,
the number of outstanding shares of Common Stock is increased or decreased, the
Maximum Number of Shares shall, effective as of the payment or delivery date of
any such event, be proportionally increased or decreased, as the case may be.

(b) If, pursuant to a merger, consolidation, other business combination,
reorganization, reclassification, recapitalization or other corporate action
(including, without limitation, a reorganization in bankruptcy), in each case
involving an Unaffiliated Third Party, the Common Stock is exchanged for or
converted into cash, securities or other property, the Maximum Number of Shares
shall be reduced to zero on the effective date of such event.

(c) Upon the termination of any Loan pursuant to Section 6(a) the Maximum Number
of Shares shall be reduced by the number of Loaned Shares surrendered by
Borrower to Lender.

(d) Notwithstanding the foregoing, in no event shall the Maximum Number of
Shares at any time exceed the product of (i) the aggregate principal amount of
Notes outstanding at such time, divided by $1,000 and (ii) the Conversion Rate
(as defined in the Indenture).

“Non-Cash Collateral” means (i) any evidence of indebtedness issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof; (ii) any deposits, certificates of deposit or
acceptances of any institution which is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than $500
million at the time of deposit (and which may include the Collateral Agent or
any affiliate of the Collateral Agent so long as the Collateral Agent is other
than Borrower or an affiliate of Borrower); (iii) any investments of any Person
that is fully and unconditionally guaranteed by a bank referred to in clause
(ii); (iv) any repurchase agreements and reverse repurchase agreements relating
to marketable direct obligations issued or unconditionally guaranteed by the
United States of America or issued by any agency thereof and backed as to timely
payment by the full faith and credit of the United States of America;
(v) commercial paper of any corporation incorporated under the laws of the
United States or any State thereof that is rated “investment grade” A-1 by
Standard & Poor’s Rating Group, a division of McGraw Hill Inc., or any successor
thereto, or P-1 by Moody’s Investors Services, Inc., or any successor thereto;
(vi) any money market funds (including, but not limited to, money market funds
managed by the Collateral Agent or an affiliate of the Collateral Agent)
registered under the Investment Company Act of 1940, as amended; (vii) any
letter of credit issued by a bank referred to in clause (ii); and (viii) all
proceeds of the foregoing; provided that in no event shall Non-Cash Collateral
include “margin stock” as defined by Regulation U of the Board of Governors of
the Federal Reserve System.

“Pledge Date” has the meaning set forth in Section 3(a).

 

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“Pledge Period” means any period beginning on a Pledge Date and to the extent
such Pledge Date occurred as a result of a Credit Downgrade ending on the
earlier of (i) the Business Day immediately following the day on which Borrower
notifies Lender and Collateral Agent that a Credit Upgrade has occurred and
(ii) the date on which this Agreement shall terminate in accordance with the
terms of this Agreement.

“Securities Intermediary” means a “securities intermediary” as defined by
Section 8-102(a)(14) of the UCC.

“UCC” means the Uniform Commercial Code as in effect in the State of New York on
the date hereof and as it may be amended from time to time.

“Unaffiliated Third Party” shall mean, with respect to any transaction by the
Lender, any person that the Lender does not “control” (as that term is defined
by Rule 12b-2 under the Exchange Act) immediately prior to the transaction.

Section 2.    Loans of Shares; Transfers of Loaned Shares.

(a) Subject to the terms and conditions of this Agreement, Lender hereby agrees
to make available for borrowing by Borrower during the Loan Availability Period,
shares of Common Stock up to, in the aggregate, the Maximum Number of Shares.

(b) Subject to the terms and conditions of this Agreement, Borrower may by
written notice to Lender on or prior to February 2, 2007 (a “Borrowing Notice”),
seek to initiate a transaction in which Lender will lend Loaned Shares to
Borrower through the issuance by Lender of such Loaned Shares to Borrower upon
the terms, and subject to the conditions, set forth in this Agreement (each such
issuance and loan, a “Loan”). Borrower shall not deliver more than one Borrowing
Notice. Such Loan shall be confirmed by a schedule and receipt listing the
Loaned Shares provided by Lender to Borrower (the “Confirmation”). Such
Confirmation shall constitute conclusive evidence with respect to the Loan,
including the number of shares of Common Stock that are the subject of the Loan,
to which the Confirmation relates, unless a written objection to the
Confirmation specifying the reasons for the objection is received by Lender
within five Business Days after the delivery of the Confirmation to Borrower;
provided that in no event shall the delivery of the Confirmation or any such
objection thereto delay the transfer of Loaned Shares to which a Borrowing
Notice relates pursuant to clause (d) below.

(c) Notwithstanding anything to the contrary in this Agreement, Borrower shall
not be permitted to borrow, and may not initiate a Loan hereunder with respect
to, any shares of Common Stock at any time to the extent that Borrower
determines that any Loan of such shares of Common Stock shall cause Borrower to
become, directly or indirectly, a “beneficial owner” (within the meaning of
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, a “Beneficial Owner”) of more than 9.9% of the shares of Common
Stock outstanding at such time. Under no circumstances shall Lender be liable to
Borrower for any Loan in contravention of this Section 2(c).

 

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(d) Lender shall transfer Loaned Shares to Borrower on or before the Cutoff Time
on February 7, 2007. Delivery of the Loaned Shares to Borrower shall be made in
the manner set forth under Section 13 below.

(e) As a condition to its entry into this Agreement, Borrower will deliver to
Lender, at the time of entry into this Agreement, a guarantee of Lehman Brothers
Holdings, Inc. (“Guarantor”), in the form of Exhibit A hereto.

Section 3.    Collateral.

(a) Unless otherwise agreed by Borrower and Lender, Borrower shall, no later
than 10:00 a.m. New York time on the second Business Day immediately following
any day on which a Credit Downgrade has occurred, transfer to Collateral Agent,
for deposit to the Collateral Account, Collateral with a Market Value at least
equal to the Collateral Percentage of the Market Value of the Loaned Shares as
of the close of business on the Business Day immediately preceding such transfer
(any such date, a “Pledge Date”).

(b) During any Pledge Period, any Collateral transferred by Borrower to
Collateral Agent shall be security for Borrower’s obligations in respect of the
Loaned Shares and for any other obligations of Borrower to Lender
hereunder. Borrower on the Pledge Date pledges with, assigns to, and grants
Collateral Agent for the benefit of Lender a continuing first priority security
interest in, and a lien upon, the Collateral, which shall attach upon the
transfer of the Loaned Shares by Lender to Borrower and which shall cease upon
the transfer of the Loaned Shares by Borrower to Lender, a Credit Upgrade or
upon the transfer of any such Collateral to Borrower in accordance with the
terms of this Agreement. In addition to the rights and remedies given to Lender
hereunder, Lender shall have all the rights and remedies of a secured party
under the UCC. To provide for the effectiveness, validity, perfection and
priority of Lender’s rights as a secured party, Borrower acknowledges that
Collateral Agent has obtained control of any financial assets included in the
Collateral (or shall have obtained control upon posting of such Collateral
pursuant to the terms contained herein) within the meaning of Sections 8-106 and
9-106 of the UCC. Collateral Agent acknowledges that it has control of the
Collateral (or shall have control upon posting of such collateral pursuant to
the terms contained herein) on behalf of Lender within the meaning of
Section 8-106(d)(1) of the UCC. Notwithstanding anything to the contrary herein,
Lender may not use or invest the Collateral and Collateral Agent shall take no
instruction from Lender regarding the use or investment of Collateral. Promptly
upon the termination of any Pledge Period, the Collateral Agent shall release to
the Borrower all of the Collateral.

(c) Borrower shall, promptly at the request of the Collateral Agent, execute all
documents and do all things reasonably required by the Collateral Agent to
enable the Collateral Agent to register, within 21 days of the Pledge Date, the
security interest created by this Agreement in accordance with the provisions of
the Companies Act 1985 (United Kingdom). The Borrower further agrees that if so
requested by the Collateral Agent at any time, to promptly execute all documents
(including any security agreements and transfers) and do all things (including
the delivery, transfer, assignment or payment of all or part of the Collateral
to the

 

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Collateral Agent or its nominee(s)) that the Collateral Agent may reasonably
specify for the purpose of (a) exercising the rights to the Collateral or
(b) securing and perfecting its security over or title to all or any part of the
Collateral (including transferring the Collateral into the name of the
Collateral Agent or its nominee(s)).

(d) Except as otherwise provided herein, upon the transfer to Lender of Loaned
Shares pursuant to Section 6, Collateral Agent shall release to Borrower
Collateral with a Market Value equal to the Collateral Percentage of the Market
Value of the Loaned Shares so transferred but only to the extent that
immediately following such transfer of Collateral, no Collateral Deficit would
exist. Such transfer of Collateral shall be made no later than the Cutoff Time
on the day the Loaned Shares are transferred, or if such day is not a day on
which a transfer of such Collateral may be effected under Section 13, or if the
transfer of Loaned Shares by Lender to Borrower occurs after the Cutoff Time on
such day, then in each case the next day on which such a transfer may be
effected.

(e) If Borrower transfers Collateral to Collateral Agent, as provided in this
Section 3, and Lender does not transfer the Loaned Shares to Borrower, Borrower
shall have the absolute right to the return of the Collateral; and if Lender
transfers Loaned Shares to Borrower and Borrower does not transfer Collateral to
Collateral Agent as provided in this Section 3, Lender shall have the absolute
right to the return of the Loaned Shares.

(f) Borrower may, upon notice to Lender and Collateral Agent, substitute
Collateral for Collateral securing any Loan or Loans; provided that such
substituted Collateral shall have a Market Value such that the aggregate Market
Value of such substituted Collateral, together with all other Collateral, shall
equal or exceed the Collateral Percentage of the Market Value of the Loaned
Shares as of the date of such substitution.

Section 4.    Mark to Market.

(a) During any Pledge Period, if at the close of trading on any Business Day
during the Loan Availability Period the aggregate Market Value of all Collateral
shall be less than the Collateral Percentage of the Market Value of all the
outstanding Loaned Shares (a “Collateral Deficit”), Lender may, by notice to
Borrower and Collateral Agent, demand that Borrower transfer to Collateral
Agent, for deposit to the Collateral Account, no later than the following
Business Day, additional Collateral so that the Market Value of such additional
Collateral, when added to the Market Value of all other Collateral, shall equal
or exceed the Collateral Percentage of the Market Value of the Loaned Shares on
such Business Day of determination.

(b) During any Pledge Period, if at the close of trading on any Business Day
during the Loan Availability Period the aggregate Market Value of all Collateral
shall be greater than the Collateral Percentage of the Market Value of all the
outstanding Loaned Shares (a “Collateral Excess”), Borrower may, by notice to
Lender and Collateral Agent, demand that Collateral Agent transfer to Borrower
such amount of the Collateral selected by Borrower so that the Market Value of
the Collateral, after deduction of such amounts, shall thereupon be at least
equal to the Collateral Percentage of the Market Value of the Loaned Shares on
such Business Day of

 

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determination; provided however that with respect to clauses (a) and (b), the
Collateral Agent will promptly give Lender a statement setting forth the Market
Value of all Collateral upon Lender’s request and Lender shall have the right to
audit the Market Value of all Collateral.

(c) Notwithstanding the foregoing, with respect to any outstanding Loans secured
by Collateral, the respective rights of Lender and Borrower under
Section 4(a) and Section 4(b) may be exercised only where a Collateral Excess or
Collateral Deficit exceeds 5% of the Market Value of the Loaned Shares.

Section 5.    Loan Fee. Borrower agrees to pay Lender a single loan fee per Loan
(a “Loan Fee”) equal to $0.001 per Loaned Share. The Loan Fee shall be paid by
Borrower on or before the time of transfer of the Loaned Shares pursuant to
Section 2(d) on a delivery-versus-payment basis through the facilities of the
Clearing Organization.

Section 6.    Loan Terminations.

(a) Borrower may terminate all or any portion of a Loan on any Business Day by
giving written notice thereof to Lender and transferring the corresponding
number of Loaned Shares to Lender, without any consideration being payable in
respect thereof by Lender to Borrower.

(b) All outstanding Loans, if any, on the last day of the Loan Availability
Period shall terminate on the first Business Day following the last day of the
Loan Availability Period (the “Facility Termination Date”) and all outstanding
Loaned Shares shall be delivered by Borrower to Lender, without any
consideration being payable in respect thereof by Lender to Borrower, no later
than the fifth Business Day following the Facility Termination Date.

(c) If on any date, the number of Loaned Shares exceeds the Maximum Number of
Shares, the number of Loaned Shares in excess of the Maximum Number of Shares
shall be delivered by Borrower to Lender, without any consideration being
payable in respect thereof by Lender to Borrower, no later than the third
Business Day following such date (the “Delivery Due Date”). If as a result of
complying with such Section 6(c), as promptly as reasonably practicable (but
subject to applicable law, regulation or policy), Borrower would become a
Beneficial Owner of more than 9.9% of the shares of Common Stock outstanding at
such time, then Borrower shall be permitted to extend the Delivery Due Date for
all or a portion of the corresponding delivery obligation and in no event no
longer than such time to allow Borrower to return such Loaned Shares, through
one transaction or a series of transactions, without causing Borrower to become,
directly or indirectly a Beneficial Owner of more than 9.9% of the shares of
Common Stock outstanding at such time. If a Loan is terminated upon the
occurrence of a Default as set forth in Section 11, the Loaned Shares shall be
delivered by Borrower to Lender, without any consideration being payable in
respect thereof by Lender to Borrower, no later than the third Business Day
following the termination date of such Loan as provided in Section 11.

Section 7.    Distributions.

(a) If at any time when there are Loaned Shares outstanding under this
Agreement, Lender pays a cash dividend or makes a cash distribution in respect
of its outstanding Common

 

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Stock to the then holder or holders of such Loaned Shares, Borrower shall pay to
Lender (whether or not Borrower is a holder of any or all of the outstanding
Loan Shares), within one Business Day after the payment of such dividend or
distribution, an amount in cash equal to the product of (i) the amount per share
of such dividend or distribution and (ii) the number of Loaned Shares on which
the dividend or distribution was paid.

(b) If at any time when there are Loaned Shares outstanding under this
Agreement, Lender makes a distribution in respect of its outstanding Common
Stock in property or securities, including any options, warrants, rights or
privileges in respect of securities (other than a distribution of Common Stock,
but including any options, warrants, rights or privileges exercisable for,
convertible into or exchangeable for Common Stock) to the then holder or holders
of such Loaned Shares (a “Non-Cash Distribution”), Borrower shall deliver to
Lender (whether or not Borrower is a holder of any or all of the outstanding
Loan Shares) in kind, within one Business Day after the date of such Non-Cash
Distribution, the property or securities distributed in an amount equal to the
product of (i) the amount per share of Common Stock of such Non-Cash
Distribution and (ii) the number of Loaned Shares on which such Non-Cash
Distribution was made.

(c) Any interest, cash distribution or cash dividend made on or in respect of
any Collateral for any Loan hereunder, shall, subject to (e) below, be delivered
by the Collateral Agent to Borrower, on the date such interest, cash
distribution or cash dividend is received by the Collateral Agent.

(d) Any non-cash distributions or dividend made on or in respect of any
Collateral for any Loan hereunder shall, subject to (e) below, be delivered by
the Collateral Agent to Borrower on the date such non-cash distribution or
dividend is received by the Collateral Agent.

(e) If the cash or other property received by the Collateral Agent under the
provisions of paragraph (c) or (d) of this Section 7 qualifies as Collateral, to
the extent that a transfer of such cash or other property to Borrower by the
Collateral Agent would give rise to a Collateral Deficit, the Collateral Agent
shall (only to the extent of any such Collateral Deficit) not make such transfer
of cash or other property in accordance with this Section 7, but shall in lieu
of such transfer immediately credit the amounts that would have been
transferable under this Section 7 to the Collateral Account.

Section 8.    Rights in Respect of Loaned Shares. Subject to the terms of this
Agreement, and except as otherwise agreed by Borrower and Lender, Borrower,
insofar as it is the record owner of Loaned Shares, shall have all of the
incidents of ownership in respect of any such Loaned Shares until such Loaned
Shares are required to be delivered to Lender in accordance with the terms of
this Agreement, including the right to transfer the Loaned Shares to
others. Borrower agrees that it or any of its affiliates that are the record
owner of any Loaned Shares will not vote such Loaned Shares on any matter
submitted to a vote of Lender’s shareholders.

 

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Section 9.    Representations and Warranties.

(a) Each of Borrower and Lender represent and warrant to the other that:

(i)      it has full power to execute and deliver this Agreement, to enter into
the Loans contemplated hereby and to perform its obligations hereunder;

(ii)      it has taken all necessary action to authorize such execution,
delivery and performance;

(iii)      this Agreement constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms; and

(iv)      the execution, delivery and performance of this Agreement does not and
will not violate, contravene, or constitute a default under, (A) its certificate
of incorporation, bylaws or other governing documents, (B) any laws, rules or
regulations of any governmental authority to which it is subject, (C) any
contracts, agreements or instrument to which it is a party or (D) any judgment,
injunction, order or decree by which it is bound.

(b) Lender represents and warrants to Borrower, as of the date hereof, and as of
the date any Loaned Shares are transferred to Borrower in respect of any Loan
hereunder, that the Loaned Shares and all other outstanding shares of Common
Stock of the Lender have been duly authorized and, upon the issuance and
delivery of the Loaned Shares to Borrower in accordance with the terms and
conditions hereof, and subject to the contemporaneous or prior receipt of the
applicable Loan Fee by Lender, will be duly authorized, validly issued, fully
paid nonassessible shares of Common Stock; and the stockholders of Lender have
no preemptive rights with respect to the Loaned Shares.

(c) Lender represents and warrants to Borrower, as of the date hereof, and as of
the date any Loaned Shares are transferred to Borrower in respect of any Loan
hereunder, that the outstanding shares of Common Stock are listed on NASDAQ
Global Market (“NASDAQ”) and the Loaned Shares have been approved for listing on
NASDAQ, subject to official notice of issuance.

(d) Borrower represents to Lender that it has, or at the time of transfer to the
Collateral Agent shall have, the right to grant to Lender, and that Lender shall
acquire, a continuing first priority security interest in the Collateral, if
any.

(e) The representations and warranties of Borrower and Lender under this
Section 9 shall remain in full force and effect at all times during the term of
this Agreement and shall survive the termination for any reason of this
Agreement.

Section 10.    Covenants.

(a) Borrower covenants and agrees with Lender that it will not transfer or
dispose of any Loaned Shares initially transferred to Borrower by Lender as a
Loan hereunder of which it is the record owner except pursuant to a registration
statement that is effective under the Securities

 

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Act; provided that Borrower may transfer any such Loaned Shares to any of its
affiliates without a registration statement so long as such affiliate transferee
does not transfer or dispose of such Loaned Shares to any non-affiliated
transferee except pursuant to a registration statement that is effective under
the Securities Act.

(b) The parties hereto acknowledge that Borrower has informed Lender that
Borrower is a “financial institution” within the meaning of Section 101(22) of
Title 11 of the United States Code (the “Bankruptcy Code”). The parties hereto
further acknowledge and agree that (i) each Loan hereunder is intended to be a
“securities contract,” as such term is defined in Section 741(7) of the
Bankruptcy Code; (ii) each and every transfer of funds, securities and other
property under this Agreement is intended to be a “settlement payment” or a
“margin payment,” as such terms are used in Sections 362(b)(6) and 546(e) of the
Bankruptcy Code; and (iii) the rights given to Lender hereunder upon a Default
by Borrower are intended to constitute the rights to cause the liquidation of a
securities contract and to set off mutual debts and claims in connection with a
securities contract, as such terms are used in Sections 555 and 362(b)(6) of the
Bankruptcy Code.

(c)      Borrower covenants and agrees with Lender that in so far as it is the
record owner of any Loaned Shares, such Loaned Shares will be used for the
purpose of directly or indirectly facilitating the sale of the Convertible Notes
and the hedging of the Convertible Notes by the holders thereof.

Section 11.    Events of Default.

(a) All Loans, and any further obligation to make Loans under this Agreement,
may, at the option of Lender by a written notice to Borrower (which option shall
be deemed exercised, even if no notice is given, immediately on the occurrence
of an event specified in Section 11(a)(iv) below), be terminated (i) immediately
on the occurrence of any of the events set forth in Section 11(a)(iv) below and
(ii) two Business Days following such notice on the occurrence of any of the
other events set forth below, (each, a “Default”):

(i)      Borrower fails to deliver Loaned Shares to Lender as required by
Section 6;

(ii)      Borrower fails to deliver or pay to Lender when due any cash,
securities or other property as required by Section 7;

(iii)      Borrower fails to transfer Collateral when due as required by
Section 3 and Section 4;

(iv)      the occurrence of any of the following:

(A)       the Borrower is unable or admits its inability to pay its debts as
they fall due, suspends making payments (whether principal or interest) on any
of its debts or announces an intention to do so or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or more of
its

 

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creditors with a view to rescheduling any of its indebtedness or is otherwise
deemed unable to pay its debts within the meaning of section 123(a), (b), or
(2) of the Insolvency Act 1986 (United Kingdom); and/or

(B)      any corporate action, legal proceedings or other procedure or step is
taken in relation to:

(a)      the suspension of its payments, a moratorium of any of its
indebtedness, its winding-up, its dissolution, its administration or
reorganization (by way of voluntary arrangement, scheme of arrangement or
otherwise) other than a solvent liquidation or reorganization with another
entity with which it forms a group or an order is made or a resolution passed
for its winding up;

(b)      a composition, compromise, assignment or arrangement with any of its
creditors;

(c)      the appointment of a liquidator, receiver, administrative receiver
administrator, compulsory manager or other similar officer in respect of it or
of its assets; or

(d)      enforcement of any security interests created over any of its assets;

or any analogous procedure or step is taken in respect of it in any
jurisdiction;

(v)      Borrower fails to provide any indemnity as required by Section 14;

(vi)      Borrower notifies Lender of its inability to or intention not to
perform Borrower’s obligations hereunder or otherwise disaffirms, rejects or
repudiates any of its obligations hereunder; or

(vii)      Any representation made by Borrower under this Agreement in
connection with any Loan or Loans hereunder shall be incorrect or untrue in any
material respect during the term of any Loan hereunder or Borrower fails to
comply in any material respect with any of its covenants under this Agreement.

 

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Section 12.     Lender’s Remedies.

(a) Upon the termination of any Loan by Lender under Section 11, Borrower may,
with the prior written consent of Lender (which consent may be withheld at
Lender’s sole discretion; provided however that, Lender shall not withhold such
request if Borrower as a result would unavoidably become, directly or
indirectly, a Beneficial Owner of more than 9.9% of the shares of Common Stock
outstanding at such time), in lieu of the delivery of Loaned Shares to Lender in
accordance with Section 6(d), pay to Lender, no later than one Business Day
following notice of such Default to Borrower, an amount in immediately available
funds (the “Replacement Cash”) equal to the product of the Closing Price as of
the date of such notice of Default and the number of Loaned Shares otherwise
required to be delivered; provided that if Lender consents to the delivery of
Replacement Cash, Borrower may direct the Collateral Agent to deliver to Lender
any Collateral held by the Collateral Agent in respect of the Loan so terminated
and, to the extent the Market Value of any such Collateral delivered to Lender
is less than the required amount of Replacement Cash, pay to Lender such
difference in immediately available funds. Any Collateral in respect of the Loan
so terminated that is not so delivered to Lender pursuant to this clause shall,
upon payment in full of the Replacement Cash to Lender, be immediately delivered
by Collateral Agent to Borrower.

(b) Notwithstanding anything to the contrary herein, if, upon the termination of
any Loan by Lender under Section 11 and, at the time of such termination, the
purchase of Common Stock in an amount equal to the Loaned Shares to be delivered
to Lender in accordance with Section 6(d) shall (i) be prohibited by any law,
rules or regulation of any governmental authority to which it is or would be
subject, (ii) violate, or would upon such purchase likely violate, any order or
prohibition of any court, tribunal or other governmental authority or
(iii) require the prior consent of any court, tribunal or governmental authority
prior to any such repurchase (each of (i), (ii) and (iii), a (“Legal Obstacle”),
then, in each case, Borrower shall immediately notify Lender of the Legal
Obstacle and the basis therefor, whereupon Borrower’s obligations under
Section 6(d) shall be suspended until such time as no Legal Obstacle with
respect to such obligations shall exist (a “Repayment Suspension”). Borrower and
Borrowing Agent shall use their respective commercially reasonable best efforts
to remove any such Legal Obstacle as promptly as practicable. Upon notification
of a Repayment Suspension and for so long as the Repayment Suspension shall
continue during any Pledge Period, Lender shall have the right, exercisable in
it sole discretion, to direct the Collateral Agent to, and the Collateral Agent
upon receipt of the written request of Lender (with a copy to Borrower) shall,
release to Lender an amount of Collateral with a Market Value equal to the
Market Value of all (or such fewer number as Lender may specify) of the Loaned
Shares that are the subject of the Repayment Suspension, whereupon the
Borrower’s obligation to return the specified number of Loaned Shares to the
Lender shall be automatically extinguished.

(c) If Borrower shall fail to deliver Loaned Shares to Lender pursuant to
Section 6(d) when due or shall fail to pay the Replacement Cash to Lender when
due in accordance with Section 12(a) or (b) above (to the extent Borrower is
permitted and elects to pay Replacement Cash), then, in either case, in addition
to any other remedies available to Lender under this Agreement or under
applicable law, Lender shall have the right (without further notice

 

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to Borrower) to (i) purchase a like amount of Loaned Shares (“Replacement
Shares”) in the principal market for such securities in a commercially
reasonable manner, (ii) sell any Collateral in the principal market for such
Collateral in a commercially reasonable manner and (iii) apply and set off the
Collateral, if any, and any proceeds thereof (including any amounts drawn under
a letter of credit supporting any Loan) against the payment of the purchase
price for such Replacement Shares and any amounts due to Lender under this
Agreement. To the extent Lender shall exercise such right, Borrower’s obligation
to return a like amount of Loaned Shares or to pay the Replacement Cash, as
applicable, shall terminate and Borrower shall be liable to Lender for the
purchase price of Replacement Shares (plus all other amounts, if any, due to
Lender hereunder). In the event that (i) the purchase price of Replacement
Shares (plus all other amounts, if any, due to Lender hereunder) exceeds
(ii) the amount of the Collateral, if any, Borrower shall be liable to Lender
for the amount of such excess. The purchase price of Replacement Shares
purchased under this Section 12 shall include, and the proceeds of any sale of
Collateral shall be determined after deduction of, broker’s fees and commissions
and all other reasonable costs, fees and expenses related to such purchase and
sale. In the event Lender exercises its rights under this Section 12, Lender may
elect in its sole discretion, in lieu of purchasing all or a portion of the
Replacement Shares or selling all or a portion of the Collateral, if any, to be
deemed to have made, respectively, such purchase of Replacement Shares or sale
of Collateral for an amount equal to the Closing Price of the Common Stock on
the date Lender elects to exercise this remedy. Upon the satisfaction of all
Borrower’s obligations hereunder, any remaining Collateral shall be returned to
Borrower.

Section 13.     Transfers.

(a) All transfers of Loaned Shares to Borrower or to Lender hereunder shall be
made by the crediting by a Clearing Organization of such financial assets to the
transferee’s “securities account” (within the meaning of Section 8-501 of the
UCC) maintained with such Clearing Organization. All transfers of Collateral to
Collateral Agent by Borrower shall be made by crediting the Collateral
Account. All transfers of Collateral to Lender by Collateral Agent shall be made
in the manner directed by Lender. In every transfer of “financial assets”
(within the meaning of Section 8-102 of the UCC) hereunder, the transferor shall
take all steps necessary (a) to effect a delivery to the transferee under
Section 8-301 of the UCC, or to cause the creation of a security entitlement in
favor of the transferee under Section 8-501 of the UCC, (b) to enable the
transferee to obtain “control” (within the meaning of Section 8-106 of the UCC),
and (c) to provide the transferee with comparable rights under any applicable
foreign law or regulation.

(b) All transfers of cash hereunder to Borrower or Lender shall be by wire
transfer in immediately available, freely transferable funds.

(c) A transfer of securities or cash may be effected under this Section 13 on
any day except (i) a day on which the transferee is closed for business at its
address set forth in Section 17 or (ii) a day on which a Clearing Organization
or wire transfer system is closed, if the facilities of such Clearing
Organization or wire transfer system are required to effect such transfer.

 

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Section 14.     Indemnities.

(a) Lender hereby agrees to indemnify and hold harmless Borrower and its
affiliates and its former, present and future directors, officers, employees and
other agents and representatives from and against any and all liabilities,
judgments, claims, settlements, losses, damages, fees, liens, taxes, penalties,
obligations and expenses incurred or suffered by any such person or entity
directly or indirectly arising from, by reason of, or in connection with,
(i) any breach by Lender of any of its representations or warranties contained
in Section 9 or (ii) any breach by Lender of any of its covenants or agreements
in this Agreement.

(b) Borrower hereby agrees to indemnify and hold harmless Lender and its
affiliates and its former, present and future directors, officers, employees and
other agents and representatives from and against any and all liabilities,
judgments, claims, settlements, losses, damages, fees, liens, taxes, penalties,
obligations and expenses, including without limitation any of the foregoing
incurred pursuant to indemnification or other provisions of other agreements,
incurred or suffered by any such person or entity directly or indirectly arising
from, by reason of, or in connection with (i) any breach by Borrower of any of
its representations or warranties contained in Section 9 or (ii) any breach by
Borrower of any of its covenants or agreements in this Agreement.

(c) In case any claim or litigation which might give rise to any obligation of a
party under this Section 14 (each an “Indemnifying Party”) shall come to the
attention of the party seeking indemnification hereunder (the “Indemnified
Party”), the Indemnified Party shall promptly notify the Indemnifying Party in
writing of the existence and amount thereof; provided that the failure of the
Indemnified Party to give such notice shall not adversely affect the right of
the Indemnified Party to indemnification under this Agreement, except to the
extent the Indemnifying Party is materially prejudiced thereby. The Indemnifying
Party shall promptly notify the Indemnified Party in writing if it accepts such
claim or litigation as being within its indemnification obligations under this
Section 14. Such response shall be delivered no later than 30 days after the
initial notification from the Indemnified Party; provided that, if the
Indemnifying Party reasonably cannot respond to such notice within 30 days, the
Indemnifying Party shall respond to the Indemnified Party as soon thereafter as
reasonably possible.

(d) An Indemnifying Party shall be entitled to participate in and, if (i) in the
judgment of the Indemnified Party such claim can properly be resolved by money
damages alone and the Indemnifying Party has the financial resources to pay such
damages and (ii) the Indemnifying Party admits that this indemnity fully covers
the claim or litigation, the Indemnifying Party shall be entitled to direct the
defense of any claim at its expense, but such defense shall be conducted by
legal counsel reasonably satisfactory to the Indemnified Party. An Indemnified
Party shall not make any settlement of any claim or litigation under this
Section 14 without the written consent of the Indemnifying Party.

 

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Section 15.     Termination of Agreement.

(a) This Agreement may be terminated (i) at any time by the written agreement of
Lender and Borrower, (ii) by Lender upon the occurrence of a Default or
(iii) upon the earlier of (A) February 15, 2027 and (B) the date on which the
Lender has notified the Borrower in writing of its intention to terminate this
Agreement at any time after the entire principal amount of Convertible Notes
ceases to be outstanding, whether as a result of conversion, redemption,
repurchase, cancellation or otherwise.

(b) Unless otherwise agreed by Borrower and Lender, the provisions of Section 14
shall survive the termination of this Agreement.

Section 16.     Registration Provisions. If, following the initial Loan
hereunder and registration of the initial Loaned Shares in respect of such Loan,
any subsequent Loan and public sale of the Loaned Shares in respect of such
subsequent Loan, in the reasonable opinion of counsel to Borrower, would require
registration under the Securities Act of 1933, as amended, Lender shall register
such sale in a form and manner reasonably satisfactory to Borrower, and shall
enter into an underwriting agreement substantially in the form of the
Underwriting Agreement dated as of February 2, 2007 relating to the issuance and
sale of such initial Loaned Shares and shall afford Borrower and its
representatives and agents an opportunity to conduct an appropriate “due
diligence” investigation to Borrower’s reasonable satisfaction, all at the
expense of Lender. In no event shall this Section 16 require Lender to register
shares of Common Stock in excess of the Maximum Number of Shares.

Section 17.     Notices.

(a) All notices and other communications hereunder shall be in writing and shall
be deemed to have been duly given when received.

(b) All such notices and other communications shall be directed to the following
address:

(i)      If to Borrower or Borrowing Agent to:

Lehman Brothers Inc.

745 7th Avenue

New York, NY 10019

(ii)    If to Collateral Agent to:

Lehman Brothers Inc., as Collateral Agent for

745 7th Avenue

New York, NY 10019

(iii)    If to Securities Intermediary to:

Lehman Brothers Inc.

745 7th Avenue

New York, NY 10019

 

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(iv)     If to Lender to:

SunPower Corporation

3939 North First Street

San Jose, CA 95134

Facsimile: (408) 739-7713

Attention: Chief Financial Officer

With a copy to:

Jones Day

1755 Embarcadero Road

Palo Alto, CA 94303

Facsimile: (650) 739-3900

Attention: Todd Johnson and Steve Gillette

(c) In the case of any party, at such other address as may be designated by
written notice to the other parties.

Section 18. Governing Law; Submission To Jurisdiction; Severability.

(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, but excluding any choice of law provisions that
would require the application of the laws of a jurisdiction other than New York.

(b) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY SUCH COURT, SOLELY
FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT TO ENFORCE ITS
OBLIGATIONS HEREUNDER OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY LOAN
HEREUNDER AND (B) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT AND ANY RIGHT OF JURISDICTION ON ACCOUNT OF ITS PLACE OF
RESIDENCE OR DOMICILE.

(c) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(d) To the extent permitted by law, the unenforceability or invalidity of any
provision or provisions of this Agreement shall not render any other provision
or provisions herein contained unenforceable or invalid.

 

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Section 19.     Counterparts. This Agreement may be executed in any number of
counterparts, and all such counterparts taken together shall be deemed to
constitute one and the same agreement.

Section 20.    Designation of Replacement Collateral Agent. If at any time while
this Agreement is in effect (i) Lehman Brothers Inc. ceases to be a Securities
Intermediary or (ii) Lender shall determine, in its sole discretion, that any of
the relationships by or among the parties hereto are reasonably likely to
prevent Lender from acquiring, or jeopardize the continuation and enforceability
of, Lender’s continuing first priority security interest in the Collateral as
contemplated under Section 3(b), Lender shall be entitled to designate a bank or
trust company reasonably satisfactory to Borrower as a successor Collateral
Agent. In the event of a designation of a successor Collateral Agent, each of
the parties to this Agreement agrees to take all such actions as are reasonably
necessary to effect the transfer of rights and obligations of Lehman Brothers
Inc. as Collateral Agent hereunder to such successor Collateral Agent, including
the execution and delivery of amendments to this Agreement as shall be necessary
to effect such designation and transfer.

 

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IN WITNESS WHEREOF, the parties hereto to have executed this Share Lending
Agreement as of the date and year first above written.

 

SUNPOWER CORPORATION

 

as Lender

     

LEHMAN BROTHERS INTERNATIONAL (EUROPE) LIMITED

as Borrower

By:          By:  

/Emmanuel T. Hernandez/

      /S/  

[Illegible]

   Name: Emmanuel T. Hernandez         Name:    Title: Chief Financial Officer
        Title:         

LEHMAN BROTHERS INC. as Collateral

Agent

         By:            /S/  

[Illegible]

           Name:            Title:         

LEHMAN BROTHERS INC.

as Borrowing Agent

         By:            /S/  

[Illegible]

           Name:            Title:

 

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