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Exhibit 10.42
 
AMENDMENT NO. 1 TO LOAN AGREEMENT

This AMENDMENT NO. 1 TO LOAN AGREEMENT (this “Amendment”), dated as of November
2, 2010, is made by and between SUNPOWER PHILIPPINES MANUFACTURING LTD., a
company organized and existing under the laws of the Cayman Islands, (the
“Borrower”) and INTERNATIONAL FINANCE CORPORATION, an international organization
established by Articles of Agreement among its member countries (“IFC”).

RECITALS:

WHEREAS, the Borrower and IFC have entered into that certain Loan Agreement,
dated May 6, 2010, which constitutes Part 2 of the Mortgage Loan Agreement dated
May 6, 2010 among the Borrower, SPML Land, Inc. and IFC, (such Loan Agreement,
as amended, restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”).  Capitalized terms not otherwise defined in this Amendment
shall have the respective meanings ascribed to such terms in the Loan Agreement.

WHEREAS, the Borrower has requested IFC to agree to certain amendments to the
Loan Agreement described in Section 1 below.

WHEREAS, IFC, on the terms and conditions stated below, is willing to amend the
Loan Agreement as hereinafter set forth.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

SECTION 1.            Amendment.  The Loan Agreement is, subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof, hereby
amended as follows:

(a)            Section 2.16(b)(viii) of the Loan Agreement is hereby amended and
restated to read as follows:

“(viii)       IFC has received evidence satisfactory to IFC that, prior to such
Disbursement, the Current Ratio of the Borrower is not less than 1.1 and, after
giving effect to such Disbursement, the Prospective Debt Service Coverage Ratio
of the Borrower would not be less than 1.5;”

(b)            Annex I of the Loan Agreement is hereby deleted and replaced by
Annex I attached hereto.

(c)            Section 2.16(a) of the Loan Agreement is hereby amended by adding
the following new subclause (xx) at the end thereof:

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“(xx)         IFC shall have received documentary evidence satisfactory to IFC
that the action items set forth in Stage 1 of the SPML Land Action Plan have
been completed.”

(d)            Section 2.16(b) of the Loan Agreement is hereby amended by adding
the following new subclauses (xi) and (xii) at the end thereof:

“(xi)         Prior to and only with respect to the second Disbursement of the
Loan, IFC shall have received documentary evidence satisfactory to IFC that the
action items set forth in Stage 2 and Stage 3 of the SPML Land Action Plan have
been completed.

(xii)          Prior to the second Disbursement of the Loan, IFC shall have
received the Certificate of Good Standing of the Borrower issued by the
Philippine Securities and Exchange Commission.”

SECTION 2.           Disbursement Amount.            The Borrower and IFC hereby
agree that the first Disbursement of the Loan, after satisfaction of all of the
conditions of disbursement set forth in Section 2.16 of the Loan Agreement, as
amended hereby but excluding the requirement to deliver the Certificate of Good
Standing of the Borrower issued by the Philippine Securities and Exchange
Commission, shall be up to a principal amount of fifty million Dollars
($50,000,000).

SECTION 3.           Conditions to Effectiveness.  This Amendment shall become
effective on and as of the date hereof (the “Amendment No. 1 Effective Date”)
when all of the following conditions precedent have been satisfied:

(a)            The representations and warranties set forth in Section 4 below
shall be true and correct in all material respects on and as of the Amendment
No. 1 Effective Date.

(b)            Before and after giving effect to this Amendment, the
representations and warranties set forth in Article III of the Loan Agreement
shall be true and correct in all material respects on and as of the Amendment
No. 1 Effective Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date.

(c)            On the Amendment No. 1 Effective Date, after giving effect to
this Amendment, no Potential Event of Default or Event of Default shall have
occurred and be continuing.

(d)            This Amendment shall have been duly executed and delivered by the
Borrower and IFC, and all legal matters incident to this Amendment, and the
amendment of the Loan Agreement by this Amendment, shall be reasonably
satisfactory to IFC.

SECTION 4.           Representations and Warranties of the Borrower.  The
Borrower hereby represents and warrants as follows:

(a)            The execution and delivery by the Borrower of this Amendment, and
the

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performance of the transactions contemplated by this Amendment and by the Loan
Agreement, as amended by this Amendment, are within its corporate powers, have
been duly authorized by all necessary applicable corporate action, and will not
conflict with or result in a breach of any of the material terms, conditions or
provisions of, or constitute a default or require any consent that has not been
obtained under, any indenture, mortgage, agreement or other instrument or
arrangement to which it is a party or by which it is bound, or violate any of
the terms or provisions of its organizational documents or any Authorization,
judgment, decree or order or any statute, rule or regulation applicable to it;
 
(b)            No Authorization or approval or other action by, and no notice to
or filing with, any Authority is required for the due execution, delivery and
performance by the Borrower of this Amendment, or for the performance by the
Borrower of the Loan Agreement, as amended hereby, other than Authorizations
that are of a routine nature and are obtained in the ordinary course of business
and the Authorizations specified in Annex C of the Loan Agreement and those
Authorizations have all been obtained and are in full force and effect.

(c)            This Amendment has been duly executed and delivered by the
Borrower, and this Amendment and the Loan Agreement, as amended hereby, each
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with the terms hereof and thereof,
respectively.

(d)            Both before and after giving effect to this Amendment, each of
the representations and warranties set forth in Article III of the Loan
Agreement is true and correct in all material respects on and as of the
Amendment No. 1 Effective Date, with the same effect as though made on and as of
such date, except to the extent that such representation or warranty expressly
relates to an earlier date.

SECTION 5.           Reference to and Effect on the Transaction Documents.

(a)            On and after the Amendment No. 1 Effective Date, each reference
in the Mortgage Loan Agreement or the Loan Agreement to “this Agreement”,
“hereunder”, “hereof” or words of like import referring to the Loan Agreement,
and each reference in each of the other Transaction Documents to “the Loan
Agreement”, “thereunder”, “thereof” or words of like import referring to the
Loan Agreement, shall mean and be a reference to the Loan Agreement, as amended
by this Amendment.

(b)            The Mortgage Loan Agreement and the Loan Agreement, as
specifically amended by this Amendment, is and shall continue to be in full
force and effect and is hereby in all respects ratified and confirmed.

(c)            The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of IFC under the Loan Agreement, the Mortgage Loan Agreement or
any other Transaction Document, nor shall it constitute a waiver of any
provision of the Loan Agreement, the Mortgage Loan Agreement or any other
Transaction Document.

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(d)            The Borrower agrees to execute and deliver to IFC such further
instruments, documents and agreements, and to take such further actions, as IFC
may from time to time request in order to carry out and implement the intent and
purpose of this Amendment and the amendment to the Loan Agreement hereby.

SECTION 6.           Execution in Counterparts.  This Amendment may be executed
in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 7 hereof.  Delivery of an executed signature page to this Amendment by
facsimile transmission, or by “pdf”, “tiff” or similar electronic graphic file
transmission shall be as effective as delivery of a manually signed counterpart
of this Amendment.

SECTION 7.           Binding Effect.  This Amendment shall become effective on
the Amendment No. 1 Effective Date when counterparts hereof which, when taken
together, bear the signatures of each of the parties hereto, have been duly
executed and delivered to IFC.  The parties hereto hereby agree that this
Amendment shall constitute a Transaction Document under the Mortgage Loan
Agreement, the Loan Agreement and the other Transaction Documents, and for all
purposes thereunder and in respect thereof.

SECTION 8.           Applicable Law.  (a) This Amendment shall be governed by
and construed in accordance with the laws of the State of New York, United
States of America.

(b)            For the exclusive benefit of IFC, the Borrower irrevocably agrees
that any legal action, suit or proceeding arising out of or relating to this
Amendment may be brought in any federal or state court located in the City and
State of New York.  By the execution of this Amendment, the Borrower irrevocably
submits to the non-exclusive jurisdiction of any such court (and of the
appropriate appellate courts therefrom) in any such action, suit or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any action, suit
or proceeding in any such court or that such action, suit or proceeding brought
in any such court has been brought in an inconvenient forum.

(c)            The Borrower hereby irrevocably designates, appoints and empowers
C T Corporation System, with offices currently located at 111 Eighth Avenue, New
York, New York 10011, as its authorized agent solely to receive for and on its
behalf service of any summons, complaint or other legal process in any action,
suit or proceeding IFC may bring in the State of New York in respect of this
Amendment.  The Borrower also irrevocably consents to the service of  process of
summons, complaint and other legal process in any action, suit or proceeding
being made out of federal and state courts located in the State of New York by
mailing copies of the papers by registered United States air mail, postage
prepaid, or by any other method of delivery specified in Section 6.02 (Notices)
of the Loan Agreement, to the Borrower at its address specified pursuant to such
Section, whether within or without the jurisdiction of any court, and the
Borrower agrees that service of process on it as so specified shall be deemed
effective service of process.

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(d)            THE BORROWER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO A
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(e)            The Borrower hereby explicitly and irrevocably waives any
immunity it may have in respect of its obligations under this Amendment or its
assets, under the laws of any jurisdiction, including laws purporting to grant
sovereign immunity, to the fullest extent permitted now or in the future by the
laws of such jurisdiction.

(f)            The Borrower hereby irrevocably waives, to the fullest extent now
or in the future permitted under the laws of the jurisdiction in which the
relevant court is located, the benefit of any provision of law requiring IFC in
any action, suit or proceeding arising out of or in connection with this
Amendment to which the Borrower is a party to post security for the costs of the
Borrower, or to post a bond or to take similar action.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to Loan
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

 
SUNPOWER PHILIPPINES MANUFACTURING
 
LTD., as Borrower
       
By:
/s/ Dennis Arriola
 
Name:
Dennis Arriola
 
Title:
Senior Vice President and Chief Financial
   
Officer
       
INTERNATIONAL FINANCE CORPORATION
       
By:
/s/ Atup Mehta
 
Name:
Atup Mehta
 
Title:
Director, Global Manufacturing,
   
Agribusiness and Services Department

[Signature Page]

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ANNEX I

SPML LAND ACTION PLAN

Stage
Action
Deadline
1
Definitive Capital Restructuring Stage:
 
a.     Revision of the capital and ownership structure of SPML Land to increase
its equity capitalization level based on a total debt-to-equity ratio of 4:1;
and increase Filipino stake in the equity capitalization, not only in terms of
number of shares but also in par value of shares, based on a
Filipino-to-foreigner-shareholder ratio of 60:40;
 
b.     Organization of the SPML retirement fund as a Philippine national and
subscription by the trustee to the increase in equity capitalization of SPML
Land earmarked to be held by a Filipino shareholder;
 
c.     Approval of the increase and amendment of the capital structure of SPML
Land by its board of directors and shareholders;
 
d.     Filing of the application for the increase in capital stock and amendment
of the charter documents of SPML Land with the Philippine Securities and
Exchange Commission (SEC) for pre-processing; and
 
e.     Issuance by the SEC of the official receipt following acceptance for
processing of the application and payment of the filing fee.
 
 
 
 
Prior to the first Disbursement
2
Sale of the SPML Land shares held by the 3 individual Filipinos to the trustee
of the retirement fund, and registration of the sale in the stock and transfer
book of SPML Land following issuance of  the proper tax clearance.
Within 45 days after the first Disbursement and prior to the second Disbursement
 
3
Approval by the SEC of the increase in capital stock and amendment in charter
documents of SPML Land
Within 105 days after the first Disbursement and prior to the second
Disbursement
 

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Grant of tax-exempt status for the retirement fund by the Bureau of Internal
Revenue (BIR)
30 June 2011

 
 
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